CT’s Sandy housing program yet to repair a single home
Washington — A year after Superstorm Sandy ravaged the state’s coastline, not a single homeowner has been helped by a new program aimed at repairing homes.
Similar programs in New York and New Jersey have also failed to rehab a single house.
“Everybody says, ‘It’s a year later, and little has been done,’ and it’s true,” said Department of Housing and Urban Development spokesman Brian Sullivan.
One reason is that safeguards aimed at preventing fraud and abuse have slowed the flow of money to those who most need it. Sullivan said that jurisdictions hit by Sandy felt controls were needed “to make sure the repairs are done.”
Connecticut, New Jersey, New York state and New York City received billions of dollars in HUD Community Development Block Grants (CDBG) appropriated by Congress in a massive Sandy bill last January. The states have aimed most of the money distributed so far, nearly $6 billion, for housing needs, although the CDBG funds could also be used for infrastructure repair and economic development.
Connecticut’s Sandy housing program is barely off the ground, while those in New York and New Jersey are much closer to helping storm victims. Contributing to the delay in Connecticut is that New York, New Jersey and New York City submitted their plans to HUD by early April, while Connecticut did not turn in a plan until three months later, in July. As a result, the other jurisdictions got the green light from HUD earlier for their programs and their money first.
Connecticut is also hamstrung by the relatively small amount of money it received from HUD, less than $72 million. Meanwhile, New York, New Jersey and New York City — all of which suffered much more damage from Sandy — each received nearly $2 billion, allowing them to develop more comprehensive homeowner programs.
The state’s program
Asra Ali, whose house in Milford was demolished by Sandy, said she is envious of New York and New Jersey’s housing programs, especially since they include buyouts of homes like hers. “I knew from day one I wasn’t going to be a recipient of anything,“ Ali said.
She decided to start a new life in New Haven and arranged with her mortgage lender to dispose of her home in a short sale. “I’m not waiting around for money that would never come,” Ali said.
Gov. Dannel P. Malloy unveiled Connecticut’s Sandy homeowner program at the end of August. Run by the state’s new Department of Housing, which had to hire temporary employees to administer it, the Owner Occupied Rehabilitation and Rebuilding Program would give grants to qualified homeowners to help them cover the out-of-pocket costs of rebuilding their homes.
That means homeowners could apply for money to cover expenses not met by money from the Federal Emergency Management Agency, their insurance companies and other sources.
The Malloy administration allocated $30 million of the nearly $72 million it received in Community Development Block Grants to the housing program.
The administration estimated that Sandy had damaged 38,000 homes in Connecticut. But as of the storm’s one-year anniversary last week, only 128 homeowners had applied for rehabilitation grants. Of those, only 35 have been fully vetted and are in the pipeline to receive help, said Michael Santoro, a community development specialist with the Connecticut Department of Housing.
State-hired architects and engineers will eventually assess the damage to a qualified applicant’s home and “write up the scope of work necessary to bring the property up to code and do a cost estimate,” Santoro said.
The next step is bidding out the job to a number of state-approved building contractors. The Department of Housing would pay the winning contractors directly -– the homeowner would not receive any money.
The grant program will only pay to restore a home to its original state — unless architects say mitigation efforts such as raising the structure are needed. Homeowners would have to pay for any upgrades.
Low-income homeowners receive priority, and only primary residences are eligible for help.
But it may be some time before a Sandy-battered home is fixed under the program.
A final list of architects and engineers who would assess damages has not been compiled. And contractors interested in participating in the program have until Nov. 8 to apply. A decision on which contractors will make the cut will be made after that.
The Department of Housing opened intake centers in Milford, Fairfield, Norwalk and East Haven on Oct. 23 to make it easier for homeowners to apply for the program, although they can also apply online.
Danielle Blumner visited the center in her hometown of Milford last week seeking help to rebuild her home, which had been battered by Tropical Storm Irene and then again by Sandy.
“I took 200 pieces of paper with me, and the people there could not have been nicer and more helpful,” she said.
Blumner hopes a grant from the Owner Occupied Rehabilitation and Rebuilding Program will not only help her repair her home, but raise it to meet new federal flood insurance requirements. Connecticut’s flood zone was expanded after Sandy.
“I’m going to rebuild and I want to go back to my house,” she said.
But Blumner is concerned she won’t be able to hire her own contractor, who repaired her home after Irene and has earned her trust. She is also concerned, though much less so, about a requirement that homeowners who receive a grant stay in their homes for at least five years to rid themselves of a lien the state will place on the property.
New York also created a home reconstruction program in response to Sandy, with $800 million of the $1.77 billion it received in CDBG grants. But New York rejected the idea of placing liens on properties, an official said, because that could have made it difficult for homeowners to obtain second mortgages, car loans or any other types of loans. Instead, New York requires homeowners in its rebuilding program to sign a three-year promissory note.
But the biggest difference between home reconstruction programs in Connecticut and other jurisdictions hit by Sandy is the scope and variety of help that’s being offered.
In New York, New Jersey and New York City, those who have already spent their own money to repair their homes are eligible for reimbursements.
Connecticut did not receive enough money to do that, at least right now.
“In the future we may do a reimbursement program for people who already have had work done,” Santoro said. “Unfortunately, we are not as well allocated as (New York City) and the two other states.”
New York and New Jersey also offer buyout programs for communities and individuals like Ali, whose dream of living by the sea has soured.
Barbara Brancaccio, spokeswoman for New York’s Office of Storm Recovery, said two neighborhoods, one on Long Island and another on Staten Island, totaling 613 parcels of land have been cleared for buyouts. The land would be returned to its normal state, perhaps a marsh or wilderness area.
“Once the state purchases the land it remains in perpetuity and can’t be built upon again,” Brancaccio said.
But not a single homeowner has gone to closing yet, although Brancaccio said sales are expected to be finalized soon.
Brancaccio said 4,300 applicants have received award letters for grants from New York’s home reconstruction program that average $122,000. Unlike Connecticut homeowners, the New Yorkers can choose their own contractors, who are paid by the state in increments as the job is completed.
But, as in Connecticut, not a single home has been repaired yet under the New York program, although Brancaccio said work will begin soon.
“They are getting their contractors and we are moving forward,” she said.
Unlike Connecticut, New York state does not give low-income homeowners preference — all are eligible for grants.
In New Jersey, the Sandy home reconstruction program is run a little differently.
Like Connecticut and New York, the state sends inspectors to properties whose owners have applied for help to determine the extent of damage and how much it would cost to repair the homes to pre-storm condition.
But New Jersey homeowners can choose between their own contractor or one on a list of pre-certified contractors the state has compiled.
No one in New Jersey has had their home completely repaired through the program yet. But the state has issued about 400 checks to reimburse residents who have used their own money to fix their home.
New Jersey has also offered $10,000 to homeowners as an incentive to stay in their Sandy-damaged communities.
“They can use the money for rent while their homes are repaired, utilities, a new furnace or furniture, anything,” a state official said.
To date, 17,000 New Jersey residents have been approved for the incentive grants.
The Katrina Effect
In the aftermath of Hurricane Katrina, in 2005, which demolished the Mississippi Gulf Coast and largely destroyed New Orleans’ levies, prompted the federal government to offer states a way to fund massive home reconstruction projects after destructive storms.
It was determined CDBG funds would give states the most flexibility in creating those programs. Louisiana created the “Road Home” program, which disbursed $10 billion directly to homeowners.
“Some people rehabbed and some people didn’t,” said HUD’s Sullivan. “You give people cash and they may rehabilitate their home and they may not.”
Sullivan said some Katrina victims used their rebuilding grants, in the amounts of up to $150,000, for living expenses, leaving their homes in ruin.
The Gulf Coast states’ experiences with the grants after Katrina made governors of New York, New Jersey and Connecticut wary, and the red tape intended to ensure that properties are repaired, and repaired properly, has slowed recovery.
“The reason we chose to do it this way is because the program is ripe for fraud and abuse,” Santoro said. “The homeowner could take the money and run.”
HUD announced a second allocation of Sandy CDBG grants last week. Connecticut’s share is $65 million, while New York, New Jersey and New York City were allocated billions of dollars.
Connecticut said it may ask HUD for permission to use some of that money to expand its homeowner reconstruction program, but Santoro said that decision hasn’t been made yet.
Sullivan said it’s difficult for Connecticut to offer aid to Sandy harmed homeowners.
“(The state) does not have a ton of money,” he said.
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