The Recovery of Lahaina
In August of 2023, wildfires erupted on the island of Maui. One of the most devastating was the fire in Lahaina on the west coast of the island. Approximately 6,500 acres were scorched in the fire, which was exacerbated by moderate drought conditions and strong winds starting on August 7. The area, consisting mainly of densely built single-family homes from the 1960s-1980s, experienced rapid fire spread due to dry grasslands, dense vegetation, and older building designs that allowed embers to penetrate easily.
Climate change is driving increasingly arid and hotter conditions, creating environments that are optimal for fire spread that may not have existed in previous decades. The grassy areas outside of Lahaina dried quickly even under only moderate drought conditions creating a large supply of viable fuel for fires to burn.
The combination of a changing climate and vulnerable building stock increased the likelihood of urban conflagrations. The financial impact of a disaster like Lahaina was significant, with CoreLogic estimating total insured losses between $2 billion and $4 billion.
As of late June 2024, the U.S. Army Corps of Engineers has cleared nearly all the damaged residential lots, however rebuilding is much slower. Maui County has only received 93 disaster recovery building permits, only 23 of which were approved. The first residential property to be rebuilt is now being rough-framed, and utility lines and foundations are being laid on many other lots. This progress, though slow, is crucial as the speed of the rebuild will directly impact costs, influenced by supply and demand dynamics for materials and labor.
Labor availability is a critical bottleneck in the reconstruction process.
- 40% higher - The cost of reconstruction labor in Hawaii compared to the mainland[1]
- +2.2% - U.S. national average increase in building material prices[2]
- +7% - Hawaiian Islands increase in building material prices[2]
- +16% - Year-over-year change in costs for flooring materials[2]
- -12% - Year-over-year change in costs for electrical wire[2]
- -9% - Year-over-year change in costs for dimensional lumber[2]
[1] due to sourcing labor from the continental U.S. and the need for specialized professionals with experience in wildfire restoration
[2] From May 2023 to May 2024
Know Your Risk. Accelerate Your Recovery™
Communities across the United States face an increasing wildfire threat, intensified by climate change and the expanding wildland-urban interface. The Lahaina Fires highlighted the necessity of insurance and effective mitigation strategies to protect these communities. Lahaina’s gradual reconstruction underscores the financial, regulatory, and logistical complexities inherent in post-disaster recovery.
Now more than ever, a forward-thinking strategy for managing wildfire risks is essential. Such a strategy must assess the current risk environment, factor in climate change, and implement measures to minimize future wildfire damage. Leveraging advanced risk assessment tools and the latest technology allows insurers, homeowners, and other stakeholders to make informed decisions and adopt effective mitigation practices, protecting communities against the ever-growing threat of wildfires.
About CoreLogic
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