Maui agents warn of land grabs, disregard for locals
Following the Lahaina wildfires, "predatory capitalism" has taken hold in the historic community as locals are faced with the decision to rebuild or sell.
- Local agents say residents are receiving cold calls asking if they want to sell.
- "I think people are going to lose their licenses over it," said John Guard, a real estate agent who grew up on Maui.
- But with the high cost of construction loans and elevated mortgage rates, selling may be the only option for some residents who lost their homes.
There's a new phrase rising from the ashes of the fires that devastated Maui's Lahaina community in August: "predatory capitalism."
It came from the calls Lahaina residents got from strangers looking to buy their still-smoldering properties — no matter that family members were still unaccounted for, that they had nowhere else to call home, or that the deed to the place had gone up in flames.
Did they want to sell?
"There's definitely people making those calls, and I think people are going to lose their licenses over it," said John B. Guard IV, a real estate agent with Hawaii Life who grew up on Maui.
Shaun Lopez, a Maui native and Hawaii Life agent as well as an electrician and solar energy engineer, has heard about the calls — and the uneasiness they have wrought.
"The fear of locals losing ownership of their land and their community is real, and it's justified," Lopez said. "[Maui] is an island. It's finite. There is such a shortage of land. It's so valuable."
But that same land is priceless in the eyes of those who have called it home, often for generations. And the idea of people coming in to take it is an echo of the takeover of the Hawaiian kingdom in 1887, when the so-called "Bayonet Constitution" undermined the authority of King Kalakaua, took away native Hawaiian land rights and gave the vote to foreign landowners.
"The fear is that this is another extension of that," Lopez said. "It's also jobs, and property taxes and mortgages."
Which speaks to concerns over who will be hired to work on the rebuilding. Guard worries that contractors from off-island and out of state will be brought in to manage the cleanup.
"There is a lot of fear out there that they may not include more of the native and indigenous groups … and to have the work be done in a culturally sensitive way," he said.
"There is so much history that you drive through every day," said Guard, whose grandparents developed a mall on Front Street — not far from the church where they were married and the cemetery where they are buried.
Those wanting to buy into Lahaina don't seem to grasp that history — or the fact that people just don't live there. They established roots that are too deep to pull up and plant somewhere else.
"There is a sense of pride in Hawaii that you are not going to see in any other state, a connection to the land and community," Guard said.
"Think about the people who have 100 years on the ground," he continued. "You can't just up and move, and the people making these calls have no idea."
Robin Kean, the Hawaii-born owner of Kean Properties, which owns and manages properties in and around Lahaina — including four buildings on famed Front Street — hasn't received any calls from developers or contractors, "But I have been waiting for someone to call and say they wanted to buy my property," he said.
Does he think about selling?
"That's a loaded question," Kean said. "I went from a positive return to a negative return overnight. We have loans on properties and we have no more money coming in."
In that sense, selling might seem like the answer for some people, Kean said, noting that even if a homeowner's existing mortgage was covered by insurance, a construction loan is at 8%, and a mortgage on whatever they build may be around 7% — a much higher rate than what they had at the time of the fire.
"They can never afford to own their own property again," Kean said. "That's the reality."
Perhaps, Kean said, the government should step in and buy up all the mortgages of the destroyed homes. That would save people financial devastation, on top of the emotional and property losses they've already suffered.
"Unless that happens," Kean said, "people are going to be forced to sell, whether it's predatory, whether it's not … just from the circumstances."
For now, Guard said, residents still reeling from the fire need to take a breath.
"People need to know that they can settle down, they're not getting evicted," Guard said. "They need to be told, 'Give yourself time. Don't make any irrational decisions.'"
And outsiders looking to make money — in real estate or rebuilding — need to step back.
"Contractors want to get set up, and I'm like, 'The place is still smoking,'" he said.
"Even the vultures, at some point, have to think that maybe it wasn't the time to make that call."