Initial HUD Payout, Critical Milestone on Road to Recovery from Hurricane Sandy

Scott Gurian | April 30, 2013 | Housing, More Issues, Sandy
Although only a fraction of what will ultimately be needed, first federal funds a welcome down payment on reconstruction, renovation.

Gov. Chris Christie and HUD Secretary Shaun Donovan.
Six months after Sandy, many residents and business owners along New Jersey’s coast are still struggling to rebuild, but help is finally on the way.

The $1.83 billion in federal grant money that Gov. Chris Christie and HUD Secretary Shaun Donovan announced Monday is long overdue for people like Gert Sofman, owner of Gert’s Snacks and Spices, a combination ice cream shop and health food store in Highlands, New Jersey.

Sofman had just finished renovating her business when Sandy flooded it with six-and-a-half feet of water, totally destroying it, along with her home, which is also in town. She’s gotten some insurance money, but it’s only covered about half her losses. Since she’s been unemployed since last October, she’s had to dip into some of her payout just to make ends meet.

Sofman has been living since last October in a FEMA-subsidized apartment, but she says she can’t even begin to think about rebuilding her house until she re-opens her business and has some income.

But to do that, she’ll need to have contractors build a new foundation, reconstruct a wall, and move the kitchen and all of the utilities to the second floor, so she’ll be ready for the next storm. That’s probably going to cost a lot of money, so Sofman’s been in a holding pattern, awaiting more financial assistance before she can move on with her life.

She came away from Monday’s press conference feeling cautiously optimistic. “From what I heard, there’s $50,000 grants for the small businesses owners. I need that $50,000 to get back up and going,” she said. “There’s no doubt about it.”

In addition to the grants for business owners, individual homeowners will be able to apply for up to $150,000 to cover reconstruction, renovation, and elevation costs not paid for by FEMA, insurance, the Small Business Administration, or other sources. This $1.83 billion is the first of what’s expected to be three batches of federal aid from HUD’s Community Development Block Grant program to help the state recover from the storm.

Christie said the state will pay the money directly to approved contractors rather than issuing checks to individuals, preventing people from taking their aid money and moving out of the neighborhood, as happened in many places after Hurricane Katrina.

HUD Secretary Donovan explained that the government was specifically trying to avoid some of problems that occurred along the Gulf Coast and will put safeguards in place to ensure that people seeking grants have not already been reimbursed for their losses by other means.

“We’ve got to be responsible with this money, and we’ve got to make sure that it’s spent right,” he said. Even though the process has thus far seemed slow, he said he was confident it will be much faster and more effective than it was after Katrina, and will achieve better results.

Donovan also assured residents that they will be able to continue to get financial aid, even after this initial $1.8 billion is exhausted. “As we go through this, we need to adjust the plan and make more money available going forward for needs as they emerge,” he said.
In addition to the grants to struggling home and business owners, HUD’s Disaster Recovery Action Plan also includes no-interest loans to help small businesses open and expand in Sandy-impacted areas. Money will be set aside for low-income housing, as well as housing for people with special needs who were severely affected by the storm.

In a press release, the Fair Share Housing Center — an affordable housing advocacy group — applauded the Action Plan for providing funds for repairing public housing, greater outreach to non-English speakers and for directing aid to renters. But the group added that there’s “still much to be done to ensure the Christie Administration manages the recovery in a way that includes everybody and complies with fair housing laws.”

The grant money will also include $25 million for a tourism marketing campaign to lure visitors back to the Jersey Shore and encourage them to support local businesses.

New Jersey Future, one of the advocacy groups that objected to the original administration plan, expressed concern that “insufficient attention is being paid to the need for robust planning for sustainability and longer-term resiliency.”

Gov. Christie praised Donovan and the Obama Administration for their cooperation and support over the past six months. He said that while he and the President disagree on many issues, Obama has “kept every promise he’s made” about helping New Jersey recover and that Donovan and the other cabinet secretaries have upheld their pledge to immediately return all of the Governor’s phone calls. Much work remains to be done, Christie said, but “today is the beginning of us getting to phase two of the return to normalcy.”