Lava recovery buyout program launches Friday

  • Lava cut a swath through housing in Leilani Estates during the Fissure 8 eruption in 2018. (Courtesy photo/WHT file)

Puna property owners affected by the 2018 Kilauea eruption can apply for the county to buy their land starting this week.

On Friday, April 30, applications open for the Kilauea Disaster Recovery Voluntary Housing Buyout Program, which is funded by $83.8 million in U.S. Department of Housing and Urban Development Community Development Block Grants to purchase eruption-damaged land for up to $230,000.

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The program will open in phases.

In phase one, owners of primary residences affected by the eruption — whether isolated, damaged or destroyed — will be able to apply for a buyout via an application that will be made available on the county’s Kilauea recovery website.

Kilauea Recovery Officer Doug Le said the recovery team expects about 300 applications in this first phase.

Of the 612 homes destroyed in the eruption, 294 were primary residences.

The first phase begins April 30 and ends July 30.

Then, on Nov. 1, owners of secondary residences will be able to apply until Jan. 31, 2022.

The third phase, when owners of undeveloped properties can apply for a buyout, will begin on May 2, 2022, and continue until July 29, 2022.

However, Le said people eligible in one phase will be able to apply in subsequent phases.

“It’s like boarding an airplane,” Le said. “First-class gets to board first, but if you miss that, and they start boarding other sections, you still get to board.”

Regardless of one’s eligibility, however, nobody will be able to apply during the months between phases.

The phased structure of the program allows the recovery team to focus its efforts on processing applications and working with applicants, Le said, adding that the recovery team has hired staff to fill 15 temporary positions to manage the case load.

Le said applicants will not be asked to submit confidential information with their application. Rather, after submitting an application, Le said applicants should wait to be contacted by a member of the recovery team, who will work with the applicant to learn more about the property.

Between submitting an application and the final property buyout, the full process should take about six months, Le said.

During this process, Le said the applicant should be prepared to submit their ID, proof of ownership, status of legal residency, information on other financial assistance received following the eruption, and the financial state of the property — much of which is standard information for any property sale.

In most cases, eligibility will not be impacted by prior financial assistance, Le said. However, in some cases — such as, if an applicant received an insurance payout but hasn’t spent it, or spent it on something not recovery-related — the recovery team might take it into account when valuating the property.

Similarly, any liens or other debts related to the property will be measured against the final buyout price.

Buyout prices are determined by the value of the property pre-eruption, based on 2017 assessments, but cannot exceed $230,000, the median appraised market value of properties in the region during that time.

Le said more than 70% of properties in the region were valued at less than $300,000, so most eligible properties shouldn’t run into the buyout cap.

Because the program only has $83 million in HUD funds, Le recommended that any primary homeowner considering applying should do so within the first two phases, or else the program may have insufficient funds to buy all applicants’ properties.

Priority will be given to households with low to moderate income, although all income ranges are eligible for the program.

All structures on properties purchased by the buyout program will be demolished, with the land managed as open space, although limited agricultural uses may be permitted.

Le noted the process can be intimidating, and urged prospective applicants to call the recovery team if they have questions about their eligibility. On the other hand, applicants who have second thoughts will be able to back out of the program until relatively late in the process.

In addition to the buyout program, the county also will begin a Housing Relocation Services Program — also funded through HUD CDBG funds — on April 30, to help qualified residents who were displaced by the eruption find secure permanent housing.

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Applications for the buyout program will be available at recovery.hawaiicounty.gov starting April 30. Prospective applicants can contact the Kilauea Disaster Recovery Division at (808) 961-8996 or at kilaueabuyout@hawaiicounty.gov.

Email Michael Brestovansky at mbrestovansky@hawaiitribune-herald.com.

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