Maui Strong 808: Maui fire survivors upset with living conditions from FEMA's housing program

Nearly a year after wildfires devastated Maui and displaced many of its residents, Charles Nahale is still searching for a permanent place to call home.

Nahale is one of the more than 1,300 fire victims who find themselves enrolled in FEMA's Direct Lease program, which aims to convert short-term rental units into long-term housing for up to two years for fire survivors, but has been fraught with challenges.

Since the Lahaina fire displaced him last August, Nahale has relocated five times. He didn't like the first property he was assigned.

"The contract reflected something completely different from what the actual space of the unit was," Nahale said of the first place he was offered. "For example, the space was a studio. The contract says it's a one-bedroom and newly remodeled, which it wasn't. The bed was practically in the kitchen."

FEMA has allocated $197 million to three companies, none of which are based in Hawaii, to administer the Direct Lease program. These companies are tasked with the complex process of finding and leasing ready-to-occupy residential properties from owners before subleasing them to displaced residents as temporary housing. According to FEMA, they are also responsible for ensuring units comply with HUD standards and is functional, inspection, providing on-call maintenance, and coordinating repairs.

As of early June, 1,041 units are occupied by fire survivors. However, 177 units remain unoccupied while FEMA pays property owners and management companies thousands of dollars a month per property.

Nahale says once he matched with his first property, he waited three months for a background check through the property management company.

“I was told when I had that happen, that it would take no more than three weeks to do. It took three months. And while I was in the shelter, the hotel, waiting to be placed in this unit, they were paying for the unit, which was three months and over $5,000 a month, and the hotel I was in.” He says he was heartbroken when he finally was able to view the apartment for the first time, and says it was unsuitable.

“The contract reflected something completely different from what the actual space of the unit was,” Nahale said. “The space was a studio. The contract says it's a one bedroom and newly re- remodeled, which it wasn't. Drawers were falling apart. The curtains were broken. The bed was practically in the kitchen. Talk about breakfast in bed.”

Charles said he spent hours with FEMA representatives trying to get out of that property.

“These two representatives at FEMA, they seemed to put the fear of God in us, that if you don't take this property, you're going to be kicked out, most likely, and you'll be on your own.”

He says he was re-matched to a second property, but found the new apartment still needed repairs.

"We're sitting at this table -- two FEMA representatives going over the contract, so three of us are sitting at this table. While we're sitting here, this piece of granite, this stone, falls and breaks into two pieces," Nahale said. You can see the crack."

FEMA assured Nahale they would make the necessary repairs instead of having him move for the third time. He says the management company is fixing fixed some of the issues, but not all of them, including termite damage. While making repairs, Nahale said FEMA was paying 5100 dollars a month for the property, while paying for his hotel shelter.

Days after an interview with ABC News, Nahale had to vacate his hotel shelter with a day’s notice. With Nahale now in housing limbo, the Red Cross stepped in to pay for the outstanding repairs in his FEMA unit.

Nahale's problems with FEMA and the properties aren't specific to him. Other people have expressed their frustration, including Timothy Putnam, known as "Timster" on the island, who has been matched four times to different units.

"The first unit was a cute little unit. But it didn't come up to code electrically," Putnam said. "The second unit was horrifying, rat infested, with a lot of urine on mattresses, and incredibly dirty. That was super simple. I didn't have to say no to that one because the FEMA agents that were there were horrified, as well. The third unit, you know, was far from where I wanted to be because I just started working again on the west side. And the commute was going to be difficult, but at least it was a roof over my head."

Since moving in, Putnam has faced rodent and insects in his unit.

In a statement, FEMA told ABC News: “All units require an inspection and we make sure the house is safe, livable, sanitary and functional before anyone moves in.” But in May a FEMA representative told Maui residents they had found a number of units under FEMA contract that were not yet filled were found unsuitable.

“We went and reinspected them all over the last two and a half weeks and found quite a number of 'em that needed some upkeep, some because they were just empty and there are a few bugs, some probably should not have been in our program. Quite a number of them. We stopped our agreement with those property owners because we found the initial inspection was inadequate. That's on us. That's our fault,” the FEMA representative said.

Both Putnam and Nahale mentioned that after they expressed dissatisfaction with the units, they were told by FEMA representatives they should live with it since it probably wouldn't be any better elsewhere. Despite horrid living conditions, they both felt pressured to make the best out of their situation.

Still, Putnam says he’s grateful. “I do have a roof over my head and I have since August 17th because of Governor Green, State of Hawaii, FEMA, and the Red Cross. They have kept me housed and it's a pretty amazing thing. Right? So, there's a lot of flaws in the system, but overall, I've been looked after, and I'm grateful for that.”

Putnam recently learned he would be re-matched to a property closer to his job.

FEMA leaders admit they have faced challenges matching their inventory to families' needs, such as proximity to school and work, number of bedrooms and accessibility.

“There are some circumstances where people have rejected the offer 3, 4, 5, even 6 times to go into housing, and that’s a challenge,” Gov. Green said at a press conference in March. “I do understand how difficult it is to have to commute it all uh but many of um these units they they simply have to be occupied.”

Then a development in late May, when several property owners in the direct lease program told ABC News that their property management company suddenly terminated their rental agreements because "the unit has remained unmatched to an applicant."

ABC News contacted FEMA, but they declined an on-camera interview and could not confirm how many leases were ended.

The agency pointed out that 1,041 people have been placed under the program. There are also 177 empty and ready-for-move-in units. They say 35 families continue to search for a match.

However, residents and local real estate agents tell ABC they have felt excluded from the process, possibly contributing to the unoccupied units in outside of West Maui.

“I have a friend who has been a real advocate for Lahaina and the fire survivors. He has a condo in Lahaina and he's been trying to get me in there. For eight months I think we've been trying. We have tried every avenue to get me there, uh, in his place. FEMA won't allow owners of condos who are participating in their program to choose who goes into these units,” Nahale said. “I believe we would have had hundreds of people in units on the west side if they allowed that to happen,” he added.

Putnam said he questions how sustainable living on Maui truly is, and says the program has affected an already difficult rental market.

“The rental market was slim and prices were going up. The fire happens. That takes away so many rentals,” Putnam said. “Now there's less properties for people that weren't displaced that need it on Maui. And the supply/demand is all whack, prices are going through the roof. I don't think it's sustainable. I don't think the average person's gonna be able to live here for much longer.

Nara Boone, co-founder of Maui Housing Hui, a nonprofit that educates the community on their rights, says this problem is probably the biggest issue that Maui has faced in decades.

"It comes down to the fabric of our community being shredded and changing every facet of it because people cannot afford to live here," Boone said.

Boone says people who were not displaced by the fire, have found themselves homeless in the aftermath of the fire. "Landlords that wanna take advantage of this federal money and raise their rents are just either going radio silent or refusing to renew people's leases, to then, you know, offer a new lease to somebody else at a higher rate” Boone said.

Zoltan Balogh, a Maui resident for 20 years, lived in a rental in Kula. He said his property was spared during the fires in his area. Last December Balogh arranged a 3 month sublease for his one-bedroom rental to spend time with his daughter in Montana. “On December 29th my landlady sent a text saying that she and her father were choosing not to renew my lease, and they would be signing a contract with FEMA,” Balogh said. “That lease would begin on January 7th, which was nine days later. This was all while I was here in Montana, 3000 miles away.”

Zoltan said he hired a lawyer, and his landlord later agreed to give him 45 days to vacate.

“But what I did have to do is leave my daughter, lose what ended up being six weeks of work here,” Balogh said. “Shipping things from Maui is, it just wasn't at all a financial option for me. So, I essentially gave or sold everything I owned after, again, most of 20 years, and that was that.”

Zoltan says he is technically homeless now and can couch surf until he finds permanent housing. He filed a complaint with the Hawaii Attorney General Office.

“When you are evicting people to get more money, that's greed. It's pretty simple,” Balogh said. “You're displacing people to place people who lost their homes,” Balogh said.

The state attorney general found Balogh’s landlord did not violate any laws by evicting Balogh and told ABC in a statement “it was determined that the action of terminating a fixed-term lease does not violate the Governor’s Emergency Proclamation (EP).” But Zoltan alleged he never signed a fixed term lease.

“You just stated you're evicting this person with nine day's notice to place a FEMA recipient,” Balogh said. “How are you saying this is okay and closing my- my file?”

The Hawaii Attorney General's Office has confirmed to ABC News that they have received at least 227 housing-related complaints; including 29 FEMA abuse allegations and 198 related to housing violations of the Governor’s Emergency Proclamation. 28 violations were investigated and corrected, and 37 investigations remain ongoing.

“The violations have already happened. They're already without their home, and what's their recourse now?” Boone questioned. “The attorney general's office has not enforced as much as we would like them to enforce.”

FEMA provided a statement to ABC News about their policy regarding FEMA abuse: "Our policy is clear. If we discover a landlord has inappropriately evicted a tenant in good standing so they may pursue a lease from FEMA, we will not work with that landlord.”

According to Boone, Maui residents continue to battle with landlords illegally increasing rent after the fires.

“With FEMA's payments of the rents, proposed payments of rents, in general throughout Maui County, our rents have doubled and sometimes tripled, and it's just become way too much for a lot of people to try to pay. So, there's a lot more homelessness right now. There's a lot more people living in their cars,” Boone said.

In May Hawaii Gov. Josh Green stepped in and issued his eleventh emergency proclamation with added protections for tenants against landlords attempting to raise rent due to operational costs, evict tenants to move themselves or their family in, or sell the property.

“I think that it has finally kind of tightened the reins for landlords and made ... put the onus on them to prove, uh, the reason that they're evicting someone,” Boone said. "It seems like the governor is listening, but we need him to close the other loophole. The biggest loophole is this termination of leases. That's the only way, really, to stop the, this bleeding that's happening."

For now Nara says landlords can help house people on Maui by converting their dwellings to meet HUD housing quality standards, so there’s more inventory available.

In addition, Gov. Green announced plans to build temporary housing in Lahaina that is expected to be ready this year.

Putnam says he’s grateful to FEMA that he has a roof over his head, no matter its flaws.

“I guarantee they're doing as best as they can. But, a wise man once said, the 10 most feared words in the English language are, "I'm here from the government and I'm here to help."

But Nahale isn’t as hopeful.

“FEMA help ends in February of 2025, and they have us in places where the rents are so high,” he said. “Every day it's getting a little closer and you, you get into knots wondering what's gonna... how I'm going to survive. What's gonna happen now?”