Category Archives: Consumer issues

Cautionary tale of post-fire response in Oregon

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Three years ago, wildfires burned in many parts of Oregon. More than 4,000 homes were destroyed, about half of them manufactured homes, which represented significant amounts of affordable housing.

In response, the state legislature authorized spending $161 million to provide about 1,000 permanent housing units for low-income residents in 15 projects.

Today the Oregonian newspaper reported that the promises have not yet been fulfilled (“Oregon promised permanent housing for wildfire survivors. Victims are still waiting 3 years later“).

Two of the largest projects, in southern Oregon, are substantially behind schedule and timelines for completion remain murky. In one case, agency leaders failed to effectively navigate warnings about alleged construction defects and didn’t tell people expecting the homes until 14 months later.

As a result, some low-income Oregonians waiting for years to move into new homes or apartments remain stuck living in state-funded RVs or former hotel and motel rooms converted into cramped studios.

There have been contruction problems. Unresolved financing issues. Unexplained delays. Lack of public information.

Repairing construction defects in modular homes delivered to one project “would likely exceed the value of the newly built homes,” the Oregonian reported. The story goes into greater detail as the problems kept coming.

If there are lessons to be learned from the Oregon experience, Hawaii officials should be paying close attention to what has gone wrong there and how to avoid similar delays.

RIP Kokua Country Foods Co-op

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Kokua Market, which passed its 50th anniversary a couple of years ago, quietly closed its doors earlier this month, according to a statement posted on its website.

Kokua Market was the trade name of the Kokua Country Foods Cooperative, first registered to do business on December 11, 1970.

Surprisingly, there doesn’t seem to have been a peep in the news about the final collapse of this alternative local institution.

From its website:

For over 50 years, Kokua has filled a unique role on Oahu — thought and practice leadership in sustainable food systems; supporting small farms and food producers; and offering consumers a meaningful healthy alternative to corporate food merchandisers. Your board of directors is deeply grateful for your loyalty over the last half century. We could not have existed this long without your support.

Unfortunately, market forces today have rendered the co-op financially unable to continue under the present business model, at the present location. Regrettably, it is time — indeed, it is necessary — to stop the bleeding, step back, evaluate the alternatives, and decide whether there are other options. We will pursue that evaluation and make that decision as promptly and responsibly as possible.

After very careful consideration, the Board of Directors has decided to close Kokua Market at King Street this Saturday, September 9th at 5 p.m.

Supporters had gathered on July 8 in a last-minute attempt to generate the support necessary to keep the store afloat.

“Without community support, this event could be a “last hurrah” for Hawaii’s original natural foods cooperative,” organizers said in a press release.

After an earlier near-death experience in 2019, supporters had stepped up and raised more than $100,000 in a few days to keep Kokua Market in business.

This time around, though, it was too late. Covid, and “market forces,” had continued to take a toll over the past four years, leading to the difficult decision to close.

It’s really the end of an era. Kokua Market was grounded in the spirit of the 60s counterculture and its rejection of the corporate world.

We can only hope that it’s not the end of that vision of a community-owned, community-based, participatory and non-profit alternative.

Lahaina condos could trigger broader insurance woes

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At least one condo project burned to the ground in the Lahaina fire. There are likely others damaged or destroyed, but although I’ve seen references to condos, I haven’t found a list identifying those with significant damage.

Rebuilding of condominiums is a trickier affair than rebuilding a single family residence.

A condominium is governed by an association made up of the owners of individual apartments, in some cases owners of commercial as well as residential units.

While the contents of apartments are owned and insured by individual unit owners, the structure(s) themselves are owned in common by the association. State law requires associations to carry insurance sufficient to cover the replacdement cost of the structure.

The state’s condominium statute, Chapter 514B HRS, provides in part:

§514B-143 Insurance. (a) Unless otherwise provided in the declaration or bylaws, the association shall purchase and at all times maintain the following:
(1) Property insurance:
(A) On the common elements;
(B) Providing coverage for special form causes of loss; and
(C) In a total amount of not less than the full insurable replacement cost of the insured property, less deductibles, but including coverage for the increased costs of construction due to building code requirements, at the time the insurance is purchased and at each renewal date….

So in theory, all condo projects are insured against catastrophic loss.

And condo boards are required to use the insurance proceeds to rebuild, usually unless a super majority of owners vote to terminate the condominium instead of rebuilding.

Although the law has several ways to accomplish this. One provides that if 80% of owners, and all holders of liens (mortgage lenders, etc) approve, then a condominium project can move to dissolve itself.

Another possible occurs if a condominium experiences “substantial damage or destruction and the damage or destruction has not been rebuilt, repaired, or restored within a reasonable time after the occurrence thereof, or the unit owners have earlier determined as provided in the declaration that the damage or destruction shall not be rebuilt, repaired, or restored,” then any owner can go file an action for partition, which if approved would mean that the property would be sold and the proceeds divided among qualifying owners.

In practice, the prospect of rebuilding Lahaina is driving up estimated construction costs across the board for all kinds of construction. So condominiums carrying what would normally have been sufficient insurance to cover replacement costs of, say, $400 per square foot, suddenly are finding themselves significantly underinsured when faced with current cost estimates of perhaps $800 per square foot or higher.

If boards are legally bound to rebuild, and if they are unable to get the approval of owners and lenders to terminate their projects, then the uninsured portion of the rebuilding costs will have to be distributed among the owners according to their shares of the common interest. If construction costs are as high as many fear, many owners will likely be unable to pay or finance such a large amount, and they will be forced to sell their interests.

But all that is in the future.

The issue now hitting condo owners in their pocketbooks is that property insurers are having to examine their exposure to catastrophic losses and raise their rates accordingly. And that’s the best case, if insurers raise rates instead of pulling out of the state.

Condo owners in Lahaina and across the state are going to be grappling with these ramifications of the fire for a long time to come.

Here’s a question: Were any condominiums totally destroyed by Hurricane Iniki in 1992, requiring demolition and total rebuilding? Does anybody know?

Lahaina and the tragedy of disinformation

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Pop over to Civil Beat without delay and check out their important coverage of the disinformation war that warped public understanding of the Lahaina fire. Newly available analysis shows how conspiracy theories of the Lahaina fire, attributing it to a “directed energy weapon” or an intentional plot to powerful development interests, originated or were powerfully amplified by foreign governments who took advantage of the tragedy to create division and dissension designed to weaken the U.S.

Today’s “Sunshine Blog” column points to research by Newsguard, “Pro-China Disinformation Campaign Claims US Started Maui Fires in a ‘Weather Weapons’ Experiment, Falsely Citing the UK’s MI6.”

But there’s more.

A couple of weeks ago, the New York Times noted similar disinformation surrounding other natural disasters in addition to Lahaina (“Falsehoods Follow Close Behind This Summer’s Natural Disasters/Misattributed videos, recycled lies and warped fears are fueling unfounded claims about the recent record-breaking heat, floods and wildfires”).

An earlier analysis pointed to Russian involvement in spreading similar disinformation (“Russia amplifies right-wing influence campaign to undermine support for Ukraine by exploiting Hawaii’s tragedy/A deep, deep dive into the symbiotic relationship between right-wing influencers, Russian state media, and the shared disinformation ecosystem in which they live”). This analysis traced the origin of the phrase, “Hawaii not Ukraine,” designed to pit U.S. disaster funding to Hawaii against the separate issue of aid to Ukraine, as if our choice was one or the other.

This article traced the “Hawaii not Ukraine” phrase to an obscure social media account, picked up an hour later by a layer of Russian-linked influencers, and then again to more mainstream social media.

I’ve seen how effective these disinformation tactics have been. A brother-in-law let me know he was a believer in the directed energy weapon theory, and a former Kaaawa neighbor, now living in the Northeast, reposted a link to a site promoting the theory. His email was headed, “Sounds crazy, but were the Maui fires caused by directed energy weapons?”

It’s all very troubling.