The 2007 Toyota Prius has a manufacturing flaw - the rubbery covering on the hatch release button has a tendency to de-polymerize, creating a big gooey mess that prevents the latch button from operating. This disintegration has nothing to do with being in a warm climate, it's just Chemistry Gone Wrong.
A new part is $70, plus labor and overhead. You can repair this for $5, tops
In the first photo we have the BEFORE situation - a nasty, gooey mess. It's more than a cover - some of this glop extends down BESIDE the switch plunger, welding everything into a dysfunctional blob. (You'll see.) ADVANCE WARNING - wear disposable gloves when you are working near this gunk.
In the second photo we have the glorious AFTER. Functions smoothly, just like 2007 again! Ooo la, la!
BTW, there are two YouTube videos that touch on this topic. They are worth a look. First one is by [DIY]:
[Dufisthenics] describes -replacement- of the failed latch assembly. Alas, I fear he had too much coffee before making his video. ;)
Step 1: Detach Latch-and-Camera Assembly From Hatch
The first phase of assembly is to remove the entire latch-cover assembly. Click the individual photos for detailed comments.
First up, a word to the wise - DO NOT EVEN TRY TO REMOVE THOSE PHILLIPS-HEAD SCREWS YET! It's REALLY easy to remove them in a later step. You will experience Pain, Suffering, and Strippage if you attempt it now.
Step 2: De-Gunkify the Switch Mechanism
WEAR DISPOSABLE GLOVES! That de-poluymerized stuff is -very- sticky. Learn from my fail.
Step 3: Reassemble the Switch Assembly, Cover It With Rubber
See the notes on the individual photos for details.
Step 4: Final Assembly
Reassembly is pretty straightforward if you've gotten this far.
If you have closed the hatch while you were inside the house de-gunkifying the switch mechanism, then you will need trickery to get the hatch open again, That's right, to re-open the hatch you will need to crawl in through the side door and temporarily re-connect the electrical cable. :)