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Grassroot Institute suggests ways accelerate Lahaina’s recovery

A new report says barriers must be removed and regulatory restrictions eased, perhaps lifted, if Lahaina has any hopes for a quicker economic recovery.

"If policymakers do not move faster to remove legal barriers that have been blocking the rebuilding of Lahaina, the town will lose its sense of community and historic charm, and its residents will continue to leave or go homeless while its economy crumbles," according

to the Grassroot Institute of Hawaii's August policy brief authored by Jonathan Helton.

The study focuses on ways to speed up Laihaina's recovery as well as suggesting two ways lawmakers could create more housing.

The policy brief encourages regulatory flexibility with tax relief to help residents rebuild their homes and businesses, but adds: "It's been two years now since the horrific wildfire in Lahaina that wrought so much havoc. At this point, the most fundamental action lawmakers could take is to let the people of Lahaina rebuild their homes and businesses without delay."

Helton, a policy analyst for the institute, is a summa cum laude graduate of Freed-Hardeman University in Tennessee. He has interned for the Tennessee General Assembly and was a fellow in the inaugural class of the Lincoln Institute of Land Policy's Vibrant Communities Program.

"If policymakers don't remove these barriers, the chances of Lahaina experiencing gentrification and speculation are actually much higher," Helton said.

He added that many local entrepreneurs who owned land can't afford to wait much longer to rebuild, as some have already given up on West Maui, according to a Maui business health check survey.

The longer they have to wait, the more likely it is that the owners will sell to someone who has no connection to the Lahaina community, he warned.

Helton said the Grassroot Institute believed the state and county are capable of making this fire-rebuilding process simple, fair and reasonably timely.

Rebuilding fatigue

Helton said there are signs "rebuilding fatigue" has already set in.

"A multitude of plans have been published for rebuilding and envisioning what a rebuilt Lahaina could look like," Helton said. "These plans could help inform policymakers on helpful changes to make, or they could slow down the process as every project must check every new box, even if it is just a rebuild of what was there before the fire."

Officials at the Grassroot Institute hope its new report can provide specific, actionable information on what changes are needed.

"A lot of Lahaina residents seem to be in the 'wait and see' stage," Helton said. "Action from the county could give them the certainty they need to know that their rebuilding projects will be approved in a reasonable time without too many conditions or legal hangups."

Four suggestions to speeding up wildfire recovery

The first of the four ways suggested by the institute to accelerate Lahaina's recovery is to reform the county’s review process for historic buildings.

The institute calls for streamlining the current protocol that all building plans for properties in Maui County's three historic zones must go through a nine-member cultural resource commission.

The policy brief identified what it describes as a cumbersome and slow process as the brief noted that the volunteer commission met only six times in nearly two years and that 17 meetings were canceled, resulting in the commission approving only a "handful" of rebuilding plans in the aftermath of the wildfire.

Helton said each of the four main recommendations are based on legislation that has been introduced at the Maui County Council and the state Legislature or on discussions that various departments have had in public meetings.

"The state and county have already waived some land-use rules that had been hampering recovery, so there is an appetite for some changes," He added. "Nevertheless, Lahaina's rebuilding has been slow. Just 40 rebuilding permits have been completed. "

He said shoreline setback rules would need to be addressed by the Legislature or an emergency order from Gov. Josh Green. One draft of SB1296, now Act 304, would have addressed these rules, but the final version left them intact, according to Helton.

So either the governor will need to step in or property owners trying to navigate the shoreline rules will have to use the traditional application process, which involves at least one public hearing before the Maui Planning Commission and five votes in favor from the planning commissioners," he said.

Infrastructure improvements

The brief's second recommendation is to waive or defer the county's infrastructure improvement assessments, which it says could either be done through legislation or an executive order.

According to the brief, "requiring victims of the Lahaina fire to fund any infrastructure upgrades deemed necessary could add thousands of dollars to the cost of rebuilding and requiring improvements as a condition of rebuilding would be unconstitutional."

The general rule in Maui, according to the Grassroot Institute, is that whenever a new building is proposed or work on a property exceeds 50% of the value of the existing structure, the Maui Department of Public Works can require the owner to make infrastructure improvements.

But for business, apartments and tourist accommodations, the cost might be prohibitive and an insurmountable barrier to recover and rebuild properties whose loss or damage was in no way their fault.

Shoreline setbacks

The third path to a faster recovery is to waive by executive order state rules applicable to the rebuilding of destroyed or damaged structures in the state’s shoreline setback area or use existing county "workarounds" to those rules whenever possible.

More than 600 structures were lost in areas covered by the state's Special Management Areas regulations. Changes to these regulations would have to be done by the state and not Maui County.

Some exemptions were granted freeing non-shoreline property owners from the time-consuming permitting processes, but according to the institute's findings, it "did not include structures on the oceanside of Front Street that were damaged or destroyed. Eighty six properties were in this category."

The study cited the loss of approximately $5 million in tax revenue for both residential and nonresidential properties in 2024, according to parcel data from the Maui County Real Property Assessment Division website.

The potential of further economic decline in the area were identified as crucial reasons to speed up the rebuilding process.

Greater tax relief

Fourth on the list of accelerated recovery suggestions is to provide short-term tax relief for all Maui businesses and long-term tax relief for properties in the burn zone.

The study noted that Lahaina served as West Maui's economic hub for hundreds of years period to the 2023 wildfire and tax relief might help in the same manner as what the Kauai County Council did for owners of industrial and commercial properties by cutting their taxes 50% for one year after Hurricane Iniki decimated the island in 1992.

The brief suggests Maui County could do something similar when it establishes property tax rates for fiscal year 2027. Though Mayor Richard Bissen and the Maui County Council have waived taxes for parcels in the burn zone several times with the most recent legislation extending the waiver until July 1, 2026, the study raises the possibility of a 10-year tax reduction for both homes and businesses in the burn zone.

Structures that have not been rebuilt could be completely exempted while businesses that have been rebuilt could receive as much as a 50% reduction in property tax reducing the economic strain so many feel in Lahaina.

The Grassroot Institute offered up an initial slate of recommendations in 2024. Some reforms were adopted but many more need to be implemented, according to Keli'i Akina, president and CEO of the nonprofit.

Housing suggestions

In this year's brief, there are also two housing recommendations. One is to authorize more housing in existing residential areas.

According to a 2024 report by the Department of Business, Economic Development and Tourism, it was estimated that Maui needed 5,138 housing units by 2035 to meet demand.

The institute says that by enacting Bill 98 (2024), which would streamline the permitting process for modular and pre-fab hosing, and Bill 103 (2024), which would empower property owners on Maui and Lanai to add additional dwellings on their land, would help the county move closer to easing its chronic housing shortage.

Grassroot Institute called for the county to allow third parties to process non-rebuilding work.

They suggested the county could enter a longstanding contract with 4Leaf or another firm to make the process faster and less onerous, or that a third-party entity could be used on a case by case basis.

Helton said the Grassroot Institute hopes the new report can provide specific, actionable information on what changes are needed.

"A lot of Lahaina residents seem to be in the "wait and see" stage," he said. "Action from the county could give them the certainty they need to know that their rebuilding projects will be approved in a reasonable time without too many conditions or legal hangups. ... I hope this report will give Lahaina residents hope."

For the full report, go to www.grassrootinstitute.org/wp-content/uploads/2025/07/250701_pb_maui_e.pdf