Malloy plans to use Sandy money to repair housing

Washington — Gov. Dannel Malloy has proposed spending the lion’s share of about $72 million in federal Hurricane Sandy money to upgrade and repair housing on the coast, leaving towns short of money to recover from the storm.

“We really tried to find the best allocation we could,” said Anne Foley, Connecticut’s undersecretary for Policy Development and Planning.

She said helping homeowners is the administration’s first priority.

Connecticut was allocated $71.8 million in the first payout of Housing and Urban Development Community Development Block Grants. That’s much less than New Jersey, which was allocated $1.8 billion; New York state, which would receive $1.7 billion, and New York City, nearly $1.8 billion.

“While the damage we suffered from Storm Sandy was bad, we know that it could have been far, far worse,” Malloy said in a statement. “One needs only to look to our neighbors in New York and New Jersey to see how much worse it could have been.”

The grant money is the first allocation of $16 billion in CDBG funds approved by Congress in a Sandy relief bill earlier this year.

“This first allocation will help our rebuilding efforts, but the real goal is receiving funding that will help us to mitigate damage from future storms,” Malloy said.

To receive the money, all states and New York City are required to give HUD an action plan proposing what they plan to do with the money, and then HUD must approve the plan.

Malloy’s proposal is the first step in creating that action plan, which will provide more details of the administration’s plan to recover from Sandy, Foley said.

The proposal is available for public comment on the website of the state Department of Economic and Community Development for seven days.

It proposes to spend $30 million on owner-occupied homes that suffered uninsured losses or need flood-proofing.

The money would be distributed under a new program run by Connecticut’s Department of Housing. Second homes and homeowners who earn more than 120 percent of the area’s median income would not be eligible for the grant money.

Another $26 million would be used to leverage more than $100 million in tax breaks and other money to repair and rehabilitate a number of multifamily housing units, mostly in Fairfield County.

Once again, the Department of Housing would distribute the money.

The proposal said Connecticut’s Sandy-hit towns identified 88 storm-related projects that cost about $34.5 million. These include the repairs of public buildings and parks and recreational facilities. Malloy proposed $4 million to help fund these projects, about 6.4 percent of the amount of money the municipalities determined they needed.

The governor also proposed to spend another $4 million to leverage more money in grants and from other sources that could be used to cover the needs of small businesses hurt by the storm.

Last year, Malloy asked the federal government for $3.2 billion to help the state recover from Sandy and protect itself from the ravages of another storm. Most of the money requested, $2.58 billion, would go to bury power lines and make upgrades to the state’s power transmission systems.

Malloy also requested $495 million to safeguard coastal towns from another bad storm.

It’s unclear if the state will ever get that much money.

The proposal to HUD said future distributions of block grant funds may provide Connecticut with tens of millions of dollars to purchase emergency generators and construct seawalls and new drainage systems and other projects. But those distributions can be some time away. Under the Sandy bill, HUD has until September 2017 to distribute all CDGB grant money.