Brooklyn, NY – July 3, 2013 – (RealEstateRama) — Brooklyn, New York – Representative Yvette D. Clarke on Tuesday called on the Department of Housing and Urban Development to eliminate restrictions that have prevented victims of Hurricane Sandy from rebuilding their homes and businesses.
The letter to Secretary Shaun Donovan, which was signed by every member of New York City’s delegation to Congress, requests reforms that would: (1) allow homeowners who were approved for, but did not accept, Small Business Administration loans to become eligible for Community Development Block Grants, (2) waive environmental reviews for homeowners to expedite repairs, and (3) reduce burdensome requirements under the Federal Emergency Management Agency’s Disaster Housing Assistance Program.
“The people of Brooklyn whose families were displaced by Hurricane Sandy and whose businesses were damaged need to have access to every available resource,” said Representative Clarke. “We have a responsibility to support their efforts to rebuild.”
Under current rules, homeowners who were approved for, but did not accept, loans from the Small Businesses Administration are ineligible for participation in the “NYC Build it Back” program. In addition, restrictions on payments for environmental reviews for the “NYC Build it Back” program and on rental assistance for low-income residents have prevented many victims of Hurricane Sandy from obtaining assistance.
Representative Clarke continued: “From Gerritsen Beach and Sheepshead Bay to Marine Park and Canarsie, residents and business owners are dedicated to the process of rebuild, despite many difficulties. The removal of these restrictions will eliminate some of these difficulties, and allow families to return to their homes and small business owners to reopen their stores.”
The letter was also signed by Senators Kirsten Gillibrand, Charles E. Schumer, and Representatives Charles Rangel, Jerrold Nadler, Joseph Crowley, Carolyn Maloney, Nydia Velázquez, José E. Serrano, Gregory Meeks, Michael Grimm, Hakeem Jeffries, Grace Meng, and Eliot Engel.
Dear Secretary Donovan,
We are writing to express our concerns with current HUD regulations that we believe are creating unintentional and unnecessary barriers to New York City’s recovery from Hurricane Sandy. We have heard from our constituents that there are regulatory requirements that are impeding the City’s ability to repair homes and provide shelter for those in need. This includes a denial of benefits for those who have been approved for U.S. Small Business Administration (SBA) loans, and a requirement for individuals to comply with State environmental standards in order to get reimbursed for repairs. In addition, the eligibility requirements for the Federal Emergency Management Agency (FEMA) Disaster Housing Assistance Program (DHAP), which was created to help those who do not qualify for traditional housing assistance programs, are so restrictive that they have resulted in less than one percent of applicants being approved. We ask that you review these regulatory requirements and waive or alter them as needed to ensure that homeowners are receiving consistent and effective assistance during this recovery.
After Hurricane Sandy, homeowners whose homes were damaged by the storm were advised to apply for a loan from the SBA to repair their homes. This loan constitutes a benefit and under the federal Duplication of Benefit rules, residents who were approved for SBA loans are ineligible to receive grants through the New York City administered Community Development Block Grant (CDBG) program, NYC Build it Back, in that loan amount. This prohibition is regardless of whether the homeowner ended up taking the loan or not. For example: A homeowner who has already been approved for a $150,000 loan from the SBA, but did not actually take it, will not be eligible for $150,000 worth of assistance from NYC Build it Back. Should NYC Build it Back determine that this homeowner, for example, needs additional repair assistance beyond the $150,000, SBA retains the right of first refusal and can determine whether or not a homeowner will receive this additional assistance. We believe that this policy is unintentionally burdensome and will prevent many homeowners from receiving the assistance they need. It also penalizes homeowners who did what they were told to do and applied for SBA loans after the storm. We ask that HUD work with SBA to reduce the regulatory red tape for homeowners who have qualified for a SBA loan, so they are not unnecessarily burdened by more debt and can make a full, sustainable recovery.
NYC Build it Back also administers a homeowner reimbursement program. However, this reimbursement program will not be able to help all of the homeowners in need, due to the requirement that homes that receive federal assistance greater than 50% than the value of their home must undergo an environmental review in order to be in compliance with the National Environmental Policy Act (NEPA). According to HUD guidance, in order to reimburse homeowners for out-of-pocket expenses, NYC Build it Back can conduct retroactive environmental reviews for repairs that have already been completed – but only if the home has not been “substantially damaged.” The substantially damaged definition is triggered when the cost to repair a home to its pre-storm condition is 50 percent or greater than the fair market value of the structure itself.
This creates an inequitable system that is not based on the actual cost of repairs or the potential impact to the environment, but rather on the value of the home. For example: Two homeowners complete the exact same repairs to the interior of their homes. The repairs amount to $70,000 for each home. One home is valued at $120,000 and the other at $150,000. NYC Build it Back can only reimburse the homeowner with the more valuable home, despite the fact that they did the exact same work.
We ask that you eliminate the need for an environmental review on home repairs that have already been completed, and can be reimbursed through the NYC Build it Back program. Eligible homeowners should not penalized because of the environmental review and we do not believe it is necessary in post-disaster recovery. This will enable New York City to reimburse homeowners with structures that are substantially damaged and will also expedite the process for repairing and rehabilitating these homes.
Lastly, the FEMA Disaster Housing Assistance Program (DHAP) is not helping the people it is intended to assist. DHAP was targeted for residents who have already demonstrated that they do not qualify for traditional FEMA Rental Assistance – either due to extremely low income, long-term housing need, or lack of long term housing options. Yet DHAP has some of the same restrictive requirements as FEMA Rental Assistance, which has resulted in an extremely low eligibility rate. To date, of the 7,000 families screened for DHAP eligibility, only 25 have qualified. We ask that you relax the eligibility requirements for the DHAP program so that it may meet the needs of the most vulnerable residents in the community.
Thank you for your consideration of these requests. We appreciate your leadership in the recovery since Hurricane Sandy damaged our shores over seven months ago and we look forward to working with you to refine these issues and ensure that the rebuilding process continues effectively and efficiently.