Sign Up For Sandy $$
Here comes the money. Maybe.
The City announced on Monday that the first round of Sandy relief money would start flowing and that homeowners, landlords and tenants might be eligible for financial assistance.
The Bloomberg administration encouraged residents affected by Sandy to register for its Build It Back program which presumably is designed to assist homeowners and tenants affected by Sandy.
Although it’s too early to know whether frustration or disappointment will be overriding themes in the process, The Wave has already identified a number of obstacles and challenges registrants are likely to face. Still, each individual case is different, so residents are indeed encouraged to register by calling 311 or going online to www.nyc.gov and following the link for NYC Recovery.
Residents should also begin gathering documents such as tax returns and receipts. Case workers, known as Recovery Specialists, will be assigned to each registrant.
The specialists will review the documents and make eligibility determinations. It is expected the specialists will begin contacting registrants in July.
According to the City, there is no income limitation regarding eligibility. However, “assistance will be prioritized based on income and level of damage.”
In late January, Congress approved a $50 billion Sandy recovery bill. In order to receive these federal funds, New York City had to apply to the Department of Housing and Urban Development (HUD) for something called a Community Development Block Grant (CDBG). Before applying, the City was required to develop an “action plan” that would essentially spell out how monies received would be spent. New York State and New Jersey developed and submitted similar plans.
On May 10th, HUD approved the city’s action plan, setting free some 1.8 billion dollars. The CDBG money is now being packaged in a program the City is calling Build It Back. HUD allows for flexibility for applicants or grantees (in this case, New York City) to determine how funds will address unmet needs. Unmet needs – those areas that still require monetary assistance – can include housing, infrastructure, and economic revitalization.
The Bloomberg administration has decided that $648 million of the $1.77 billion it received will be used for housing issues and needs.
The City has identified four “pathways” for New Yorkers to return to sustainable homes, those being: Repair, Reimbursement, Rebuild, and Acquisition.
Under “repair,” the City alleges that it will offer assistance for homes needing minor or moderate repair. The nature and extent of the assistance is individualized, subject to the findings of a case worker.
As for “reimbursement,” the City says it will recover out-of-pocket expenses for minor repairs that fall within HUD and other guidelines.
The City action plan does not make clear what constitutes “minor repairs.” The City initially rejected the concept of reimbursing homeowners for repairs but when the State action plan indicated there would be reimbursements, the City changed course. In Rockaway, many homeowners incurred out-ofpocket expenses and took the initiative to repair their houses instead of waiting for Rapid Repairs or possible assistance from Sandy relief money. These homeowners may be in line for reimbursement. However, the City states “homeowners will be equally subject to the program’s eligibility requirements and restrictions on assistance.” Reimbursements, therefore, will happen only after priority is given to those who are determined to have the most need.
“Rebuilding” is a possible pathway for those whose homes were substantially damaged and need to be rebuilt. Owners will have the choice of using a home model specially designed for the community or use an architect and builder of their own choice who follows federal and Build It Back guidelines. Eligibility is limited to “qualifying participants.”
Finally, the fourth pathway the City offers is “Acquisition.” Some owners may want to sell their properties to the City. The City would need to establish that the property could be redeveloped in a more sustainable way and fit the overall community plan. There is a State plan that offers buyouts but those properties would be turned into open space and the offering price is at post- Sandy levels. In its plan to HUD, the State defers to the City on the decision on possible buyouts.
Some limitations of the Build It Back program are already clear. Reimbursement, for example, is only for “minor” repairs. City spokespeople have said that they are urging HUD to allow for changes but so far, the restrictive guidelines remain in place.
Although the City said the $648 million would help homeowners, tenants, and landlords, there is, in fact, very limited help for tenants. The City will offer a rental subsidy to displaced victims of Sandy who earn less than 50 percent of the area median income for those who have not already been offered placements through public housing or Section 8. Funding will be prioritized for households currently residing in the city’s hotel system. Other renters will find no other financial assistance in Build It Back.
As for co-op and condo owners, the restrictions and funding opportunities vary. There is more information at the NYC Recovery website.
HUD guidelines and other rules will presumably be addressed and explained by the recovery specialists whose qualifications were not addressed in the City’s announcement. In the plan submitted to HUD, the City wrote: Housing Recovery Specialists will be selected in compliance with local and HUD procurement guidelines based on relevant experience and skills. In other words, the specialists should be able to explain the guidelines under which they were hired.
For homeowners, besides the guidelines’ murkiness there is already a known hitch. There is the quandary of the Small Business Administration (SBA) loan. When determining unmet needs and eligibility for grants and assistance, the recovery specialist will consider a number of factors. Insurance payouts, FEMA grants, philanthropic grants, and SBA loans are among items that will be calculated. Some homeowners looking for reimbursement or additional monies for repairs will find themselves tripped up by the SBA.
Homeowners were encouraged by FEMA and other government officials to apply for an SBA loan after Sandy. Many residents experienced frustration with the process and still others experienced disappointment with the interest rate ultimately offered after first hearing about SBA’s 1.6 percent rate. The 1.6 percent was reserved for those whom the SBA determined would have a difficult time getting credit on the open market. Simply, if you had a good credit score or little debt you were offered a far less attractive rate.
Regardless of whether homeowners accepted the loan or not, the SBA still looms. The amount of loan the SBA offered is counted against any possible grant money. For example, a case worker finds that a house had $100,000 damage. The case worker finds that the homeowner received $25,000 in a FEMA grant and was offered a $75,000 SBA loan. That equals $100,000, the cost of repair. That means no grant money.
If that same homeowner turned down the $75,000 grant and decided to use savings to pay for repairs there would be no reimbursement money either. The $75,000 SBA offer would, in effect, still be on the books.
Another example that highlights the shortcomings of this plan is in the case of Rapid Repairs reimbursements. It’s possible that two neighbors with similar damage to their homes received similar FEMA and/or insurance payments and SBA offers. If one neighbor got $10,000 worth of repairs through Rapid Repairs, he simply enjoyed the benefit. If the other neighbor made the same repairs out of pocket, he is unlikely to be reimbursed because of the SBA loan.
Again, the City (and Senator Charles Schumer) says it is appealing to HUD to forego this method of calculating unmet needs and costs, but so far the HUD guidelines remain in place. If you did not apply for an SBA loan or were turned down, no SBA figures will be calculated.
Another consideration for some will be the City’s requirement that anyone who accepts CDBG money participate in the National Flood Insurance Program. Some homeowners face no such insurance requirement now and may balk at signing up for a program that may prove extremely costly over time.
Wave readers are also encouraged to read through the lengthy plan available online. There is some “fine print” that may cause concern. One such example, is the restriction on some grants which will require “maintained ownership” for up to five years.
It seems the City is aware that the various requirements and restrictions present challenges. In an effort to increase public understanding and awareness, the Office of Housing Recovery is holding a number of town hall meetings. On Monday evening, June 10th, Recovery officials and Congressman Gregory Meeks will hold such a meeting at St. Francis de Sales gym on Beach 129th Street from 6:30 to 9:30 p.m. This will be the second town hall; the first one was held in Far Rockaway on Thursday as The Wave went to press.
Although it remains to be seen how many people will benefit from the $648 million, it should be noted that this is just the first round of Sandy money. City officials say it’s possible that HUD guidelines and other restrictions will be lifted or eased when subsequent rounds of Sandy money arrive. It is expected that another grant will be issued in the early fall.
For now, in addition to the restrictions listed above, second homes are not eligible for any Build It Back assistance. Rental properties are subject to landlord income calculations and other HUD requirements.
To register for the Build It Back program, call 311 or go online to www.NYC.GOV and follow the NYC Recovery link. For its part, the City says it hopes to get a high number of registrants. A higher number will help the City gather data and assist in their efforts to persuade HUD for the need to loosen restrictions and offer more funds.
In addition to the application, the website has considerable information regarding the recovery and rebuilding process.