Redirect Remaining Sandy Aid to Victims Who Still Are Not Back in Homes, State Urged

Six years after superstorm’s devastation, not all recovery money has been spent. Advocates want some to go to people who are trying to ‘cross the finish line’

Hurricane Sandy
New Jersey still has $1.4 billion of unspent Sandy recovery money and has announced plans to reallocate about $10 million to better meet new disaster recovery and housing assistance needs. But advocates are urging the state to consider other uses for the unspent aid by giving it to those victims of Superstorm Sandy who still have been unable to get back home nearly six years after the massive storm devastated the state.

The state’s Sandy Recovery Program Dashboard indicates the state had spent, as of June 30, 2018, $2.8 billion of the $4.17 billion it received in federal Community Development Block Grant Disaster Recovery funds. That leaves nearly $1.4 billion, or about a third of the total, unspent. In responding to questions from the Office of Legislative Services during budget deliberations, the state Department of Community Affairs, which is responsible for administering the funds, wrote that it expects to spend all remaining funds by the 2022 deadline set by the federal government.

Questioning the priorities

But news that so much aid appears to have been unspent to date has some advocates questioning why and urging state officials to prioritize remaining funds for five purposes that would help the most people who still need assistance. These include money for those who have exhausted all possible sources of funds and still don’t have enough to complete repairs or reconstruction of their homes. They also want the state to forgive “clawbacks” of funds the state says property owners must repay because there was no proof the money was spent appropriately.

Amanda Devecka-Rinear
“There definitely are a lot of unspent funds,” said Amanda Devecka-Rinear, executive director of the New Jersey Organizing Project that has been working to help Sandy victims’ recover from the October 2012 superstorm that damaged some 346,000 homes across the state, mostly along the Shore. “Whether or not it is allocated for the right things is another question.”

Lisa Ryan, a spokeswoman for DCA’s Sandy Recovery Division, said money that has not been spent yet has been allocated for specific purposes and there are plans to spend it. The largest programs slated for future funding include buying flood-prone properties through the Blue Acres Buyout Program, and not allowing further development; the Fund for Restoration of Multifamily Housing, which supports the development of rental housing in affordable or mixed-income projects; and the Flood Hazard Risk Reduction and Resiliency Grant Program, which funds projects that reduce risks from storm surges or floods.

Not carved in stone

There is also $80 million remaining to be spent in the state’s single largest block-grant program, the Reconstruction, Rehabilitation, Elevation and Mitigation (RREM) program that is helping homeowners rebuild. Of 7,379 eligible homeowners in the program, 6,081 — or more than 82 percent — have completed construction, Ryan said. More than $1.2 billion in RREM grants has been awarded to homeowners participating in the program, or more than 90 percent of the total allocated.

“Nearly all the homeowners who have not finished rebuilding are well into construction, with many of them back home as they wrap up their projects,” Ryan said.

Although the state has earmarked all the funding it has received, the way it spends the remaining money is not carved in stone. “While all $4.1 billion is allocated, DCA does continue to evaluate existing programs and the unmet needs that Sandy-impacted people have. If necessary, we can and do reallocate funds by amending the State’s CDBG-DR (block grant) Action Plan through a public process that requires HUD approval,” Ryan said, noting the state is currently proposing the reallocation of some funds.

Proposed transfer of funds

DCA is looking to make three funding transfers, none of which “would affect any existing funding commitment to any individual, business, community or project,” according to a notice from the department about the proposed transfers. Under the rules governing the aid, the state must seek public comments before doing so. The comment period ended Tuesday.
According to its proposal, DCA is looking to:

  • Transfer $3.1 million from the Tenant-Based Rental Assistance Program, which provides temporary rental assistance to low- and moderate-income residents who were living in one of the nine counties most impacted by the storm to the Sandy Recovery Housing Counseling Program that provides counseling services to both renters and homeowners. The counseling program provides help with foreclosure prevention, debt management and rental guidance for free to Sandy-impacted individuals and has so far provided 8,200 households with housing counseling services. TBRA has assisted 1,788 households to date. All TBRA rent subsidies are scheduled to end December 31, 2018, according to federal rules. The funding shift would not impact the program’s ability to fully serve all eligible recipients. Data DCA provided to OLS indicates that of the $32 million originally allocated to the TBRA program, $25.6 million has been spent and another $3.5 million is expected to be spent in the current fiscal year, which would leave about $2.9 million.
  • Shift $3 million to the Rental Assistance Program to meet the ongoing rental assistance needs of homeowners who are displaced while rebuilding their homes through two other programs, RREM and the Low- to Moderate-Income (LMI) Homeowners Rebuilding Program. DCA has already spent $10 million of the $12.5 million originally allocated to RAP, which provides rental assistance payments of up to $1,300 per month for a maximum of 21 months to homeowners in the RREM and LMI Homeowners Rebuilding programs while they are displaced, and expects to spend the rest this year. To date, approximately 2,400 homeowners have received assistance through RAP, with 474 currently receiving rental assistance. The $3 million in additional funding for RAP would come from surplus funds from the Lead Hazard Risk Reduction Program, which has served all its applicants and is in the process of closing. The Sandy Dashboard shows that $1.2 million of $5 million allocated for that program had been spent through June 30.
  • Reallocate $4.3 million in surpluses from 14 disaster-recovery programs, including $802,000 from the Lead Hazard Risk Reduction Program, to pay for the continued management, oversight and disbursement of the federal funds. The largest transfer would total almost $1.4 million from the Housing Resettlement Program, which had disbursed $203 million in grants of up to $10,000 each to eligible homeowners for flood insurance premiums and other nonconstruction purposes through the end of 2017. A total of $205 million was allocated to that program, which has ended after having provided funds to 18,247 homeowners. Other fund transfers would come from money set aside for planning purposes and for program administration by the Economic Development Authority. This would bring the total spent for general administration of the block grant funds to $187 million.
  • Protect renters

    Devecka-Rinear said she is concerned about the possibility that some of the money the DCA has proposed shifting could still be needed for its original purpose. “I want to make sure renters aren’t losing money,” she said. “I don’t want to see them move money from anywhere if people are using it.”

    Credit: Amanda Devecka-Rinear
    Sandy victims protesting in Trenton in 2015
    The New Jersey Organizing Project, whose members include community leaders in touch with people still struggling to recover post-Sandy, sent out an email to members on Tuesday urging them to contact DCA to comment on its plan to reallocate some federal Sandy aid funds. NJOP suggests the state focus at least some of its unused funding on needs it says are the most crucial right now.

    One of the greatest needs is for a “cross the finish line” fund to help people who, through no fault of their own, started rebuilding very late or still haven’t started, according to Devecka-Rinear. They missed out on funding opportunities that were available early on from the Gap Funding Initiative and from churches, unions and local groups. Now there are still families who are getting some assistance but are still tens of thousands of dollars short of being able to finish rebuilding.

    ‘Where are they going to get $55,000?’

    “They have been trying to get home, but where are they going to get $55,000?” Devecka-Rinear asked, referring to one family that is short funds.

    Other families have experienced new or worsening health issues since Sandy and some missed out on getting a grant for an elevator and need funds to help them get in, out or around newly elevated homes.

    Devecka-Rinear also said that the state should stop demanding repayment of funds and forgive the clawbacks already asked of impacted homeowners. Families followed the rules and don’t understand why the state is demanding repayment of as much as tens of thousands of dollars in grants they received, she said.

    Finally, NJOP said the state should spend more money on legal assistance for families facing contractor fraud and other issues and make more funds available for property buyouts.

    DCA is obligated to respond to all the public comments it receives and then will formally submit its proposed funding amendments to the U.S. Department of Housing and Urban Development for review and approval.