Malloy’s Sandy plan worries coastal mayors

Washington — With the help of $71.8 million in federal block grants, Gov. Dannel P. Malloy hopes to launch a new housing program to aid the state’s Hurricane Sandy victims.

But several Connecticut cities and towns have reacted to the proposal with confusion and are concerned that Malloy’s plan is based on bad information.

Mayors and housing officials from several municipalities — including Norwalk, New Haven, Milford, Fairfield and Bridgeport — have weighed in on Malloy’s plan to spend most of the $71.8 million on grants to homeowners and owners of multifamily homes who have not received enough money from insurance companies or the Federal Emergency Management Agency to repair their homes. The money is being allocated to the state by the Department of Housing and Urban Development (HUD).

Only second homes and the wealthy would be ineligible for the help.

But coastal city mayors say the plan is too vague for them to understand how it could help their communities and they worry that some homeowners, who are now required to elevate their homes, would be locked out of the program.

There’s also concern that there isn’t enough money to take care of housing needs, or to pay for other projects to fortify Connecticut’s coastline from another storm.

Bridgeport Mayor Bill Finch said all of the $71.8 million should go to New Haven and Fairfield counties, “two counties where the vast majority of damage occurred.”

Under the governor’s plan, storm victims in Fairfield, New Haven, Middlesex and New London counties, and the Mashantucket Pequot Indian Reservation, would be eligible for the aid — with 80 percent of the funding going to Fairfield and New Haven counties. Through the state’s Department of Housing, Malloy proposes to provide $30 million in grants to homeowners who did not receive enough money from FEMA or their insurance companies to repair their homes and/or who lacked federal flood insurance coverage.

Finch, in his public comments on the plan, said the data on how many homeowners need help “seems vague and those residents are more likely to be at the top of the eligible income bracket.”

The allocation plan — which would also provide several million dollars for economic development and infrastructure — is short on detail. Administration officials say it’s still in development. The plan is available here.

The plan proposes to allocate $26 million to leverage up to $105 million in private and public funds to repair apartments and other multifamily housing units damaged by Sandy.

“Based on current knowledge of affordable housing funds, it is estimated that the $147 million in unmet needs … can be addressed using First Tranche Funds as gap financing to leverage over $105 million in federal Low Income Housing Tax Credits, historic tax credits (state and federal), private financing, and/or tax-exempt bond financing from the State or the Connecticut Housing Finance Authority,” the proposal says.

Yet, Finch said, “there are no assurances” that the money raised would be committed to repairing storm-damaged rental units.

Finch’s comments were among dozens submitted by municipalities and individuals during a recent seven-day public comment period on the Malloy administration’s proposed plan. The administration declined to make those comments public, but the comments were provided by some of the mayors’ offices and through a Freedom of Information request.

Milford Mayor Benjamin Blake criticized the plan because it does not break down how the money would be spent by municipalities.

“It is impossible to provide insightful and well-informed commentary on this plan without knowing where these funds will be allocated,” Blake said in his public comments.

He also said the governor’s draft proposal “grossly” understates the number of homes that need to be repaired and protected from future storms.

The plan says about 5,400 homes need help with repairs and 220 of these also need to be flood-proofed.

But Blake said Milford alone has 209 homes that are in a flood zone and require to be elevated before their owners are granted building permits to repair the houses. He said the total number of those required to be elevated is more like 2,500, not 220, and there’s no money in Malloy’s plan to help those homeowners.

In a letter to Malloy, U.S. Rep. Rosa DeLauro, D-3rd District, said she wanted to “amplify” Blake’s concerns.

DeLauro said FEMA only provides money to acquire and demolish homes in a flood plain that are more than 50 percent damaged. “Milford is in dire need of another solution,” DeLauro wrote.

“That no mitigation money is included in the draft plan is deeply concerning,” DeLauro wrote.

Evonne M. Klein, commissioner of the Connecticut Department of Public Housing, wrote to DeLauro that “mitigation only” projects were not included in the Malloy plan, but that qualified homeowners could use the money to elevate their houses.

She also reminded DeLauro that the administration was not obligated to allow the public to comment on a preliminary plan.

“There is no requirement that it be submitted for public review and comment, we published it as part of our commitment to public participation in the development of our formal (final) plan,” Klein wrote.

HUD, however, requires the final plan to be subject to public comment.

Congress appropriated $16 billion in HUD Community Development Block Grants as part of a massive disaster relief aid bill approved in January. The bill required HUD to allocate one-third of the money within 60 days of approval of the bill. Most of that $5.4 billion “first tranche” of money was allocated to New York and New Jersey, which suffered the majority of the damage in Hurricane Sandy.

Connecticut’s allocation of $71.8 million — and all of the HUD grants — are subject to a 5 percent reduction because of sequestration, or recent across-the-board, automatic spending cuts.

To receive the funds, Connecticut and the other jurisdictions must secure HUD’s approval of an “action plan” to spend the money.

HUD has already approved New Jersey and New York’s action plans. Connecticut lags behind.

Malloy’s proposal is slated to be considered by the state legislature Tuesday, another step toward a final plan. HUD must receive the final plan at the beginning of June.

Meanwhile, mayors hope that the final plan will address their concerns.

In his public comments, Norwalk Mayor Richard Moccia said it is “unclear” if the city’s storm-damaged Washington Village housing development would be eligible for aid.

Moccia also said it’s been months since Sandy hit in October, and homeowners with “unmet needs” dipped into their own pockets to repair their homes. He’s concerned they may not be eligible for CDBG grant money since they no longer have “unmet needs” even if they depleted their savings to repair their homes.

“They are now one hiccup away from financial disaster,” Moccia said.

The Malloy administration released its proposed plan the afternoon of April 19, a Friday.

New Haven officials said they were unaware of the plan until it was too late to provide comment in the seven-day window that was allowed.

Mark Barnhart, Fairfield’s director of community and economic development, was on vacation and also unaware of the governor’s plan until it was too late.

“My bad,” he wrote an administration official in a letter that conveyed some concerns he hoped the administration would consider.

Barnhart said Fairfield already receives CDBG housing grant money and the city has a program that would be a good alternative to the governor’s plan.

“While I appreciate the need for the State to efficiently distribute and timely expend these funds as well as to ensure compliance with all applicable HUD requirements, use of these existing local programs should merit further consideration,” he wrote.

In March, HUD made a second allocation of CDBG grants, in the total amount of $500 million, to Missouri, Alabama, Texas and other states that have suffered recent disasters unrelated to Sandy.

That leaves about $10 billion of undistributed CDBG grant money. HUD spokesman Brian Sullivan said the agency does not know how that money will be allocated or when.

He did say HUD would use the most up-to-date information on the unmet needs in each state to distribute the rest of the money.

In her letter to DeLauro, Klein said, “we anticipate an additional allocation of federal funding under (the CDBG program) to be targeted specifically to infrastructure and mitigation-only projects some time later this year.”