The city is planning to bail out thousands of homeowners who have run out of money to repair properties decimated by Hurricane Sandy with $350 million in federal funds, Mayor Bloomberg announced yesterday.
That will come as a welcome dose of news to as many as 1,000 homeowners who lost everything and 8,300 others whose houses were severely damaged, but not destroyed.
“We’re talking about the first stage of a plan that will bring a lot of relief to New York City,” the mayor said as he unveiled a proposal for spending an initial installment of $1.77 billion in storm relief coming from Washington as part of a $51 billion aid package approved by Congress for the region.
The federal Department of Housing and Urban Development will have to approve the mayor’s plan before funds begin flowing. That process is not expected to be completed until late April or early May after public hearings.
In a joint appearance with Bloomberg on Staten Island yesterday, HUD Secretary Shaun Donovan praised the city’s plan and made it clear he didn’t anticipate any problems releasing the money.
“This is the fastest this money has ever been allocated,” Donovan said.
Bloomberg described the timeframe as “instantaneous” by government standards.
Officials stressed that homeowners would have to exhaust their FEMA grants, which top out at $31,900, and their insurance proceeds before applying for the new federal funds.
Councilman Vincent Ignizio (R-SI) said that won’t be an issue for most Staten Islanders still grappling with Sandy’s after-effects.
“It’s going to cost between $50,000 and $75,000 to raise your home,” he said of requirements that damaged homes in flood zones will have to be rebuilt higher off the ground.
“FEMA will only give you — and we’re grateful for it — $30,000. So now you’re personally on the hook for upwards of $40,000 that most people who live in these communities don’t have at this stage. So that’s why this funding came as a blessing.”
Officials said there would be a cap on how much each homeowner could get as an outright grant and there would be income eligibility standards. But the amount of the cap — the key question for most of the owners— hasn’t been determined.
An estimated 60,000 city homes were impacted by Sandy and about 20,000 still require repairs to get back to their original condition and meet tougher construction codes.
Officials are hoping to get to the destroyed and most severely damaged homes first, leaving thousands of others to the next round of funding.
They’re also taking steps to ensure federal funds aren’t wasted.
“We don’t want someone going out and buying a Jaguar,” said one official. “We’re anticipating a situation where the contractors get paid [directly].”
In all, the mayor set aside $720 million for housing repairs and upgrades. That included $250 million to restore 12,790 apartments and $120 million for the Housing Authority, which was looking to install generators for emergency power at key locations.
Businesses were expected to get $185 million in grants and loans, with large companies in vulnerable areas eligible for as much as $1 million.
Another $140 million in the mayor’s plan was allocated to jump start economic activity in five Business Recovery Zones and as grants to utilities that come up with innovative measures to protect their networks from the next devastating storm.