Co-Op and Condo Homeowners Not Eligible for FEMA Grants When Repairing Buildings Impacted by Sandy
Senator Calls on Dept. of Housing and Urban Development to Establish CDBG Program Disaster Recovery Guidelines to Assist Sandy-Impacted Co-Ops and Condos
WASHINGTON, D.C. – February 13, 2013 – (RealEstateRama) — U.S. Senator Charles E. Schumer today called on the U.S. Department of Housing and Urban Development (HUD) to establish a framework for how assistance programs can be structured with Community Development Block Grants Disaster Recovery (CDBG-DR) funding to help housing cooperative and condominium owners impacted by Superstorm Sandy. Co-op and condominium owners are not currently eligible for Federal Emergency Management Agency (FEMA) grants to cover the cost of repairs to common areas and infrastructure. Schumer today is asking HUD to establish program guidelines for eligible recipients using CDBG funds to help co-op and condo homeowners repair damage incurred by Sandy.
“After Sandy, FEMA was able to help many communities, however, due to inflexible bureaucratic rules co-op and condo homeowners were left in the wake,” said Schumer. “While individual homeowners can receive money from FEMA to repair a damaged boiler or electrical system, similar grants are not available for this type of common infrastructure of co-ops and condos. Fortunately, the law we just passed with new aid to rebuild is flexible and I strongly urge HUD to use the CDBG program to fill this clear gap, and to work with affected communities to establish a funding framework that uses these block grants to help co-op and condo homeowners repair and rebuild after Sandy.”
“While FEMA has programs in place to help Lower Manhattan residents affected by Superstorm Sandy, co-ops and condos, which comprise a growing part of the Lower Manhattan residential community, are ineligible for this important relief funding,” said Alliance for Downtown New York President Elizabeth H. Berger. “Thanks to Senator Schumer for his push to establish Community Development Block Grants to support repairs for Sandy-impacted co-ops and condos. These resources will help Lower Manhattan come back even stronger as a 21st century mixed-use, business district.”
“It is astonishing to me that residential co-op buildings are not being afforded any financial assistance in the recovery from Super Storm Sandy. We are homeowners just like those who live in 1 & 2 family houses. We just happen to live vertically and cooperatively and share essential services such as boilers, electricity, gas and hot water. Why is it that we are not eligible for FEMA assistance? There are nearly 3,000 Mitchell-Lama Coop units in Rockaway. Mitchell-Lama Coops are limited profit and are for modest working class families, with many senior citizens. It is urgent that HUD recognize Coops and help us restore essential services to our homes by including us in all assistance program,” said Dolores Orr, Co-op Owner and President of Rockaway Beach Civic Association.
“The only way for most people to own a home in New York City is through a condo or co-op,” said 114 Liberty Street Cooperative President Dave Stanke. “These types of apartments are as vital to the Lower Manhattan community as the single family home is to the rest of the country. Currently, Superstorm Sandy recovery costs will be borne by the individual shareholders and co-op owners. Community Development Block Grants should be made available to offset the costs of repairs to common areas and equipment not covered by insurance. Thank you to Senator Schumer for his ongoing support and advocacy in the recovery process.”
“Our co-op building incurred significant additional costs to remedy impacts caused by Superstorm Sandy but is not eligible for relief from FEMA due to its existing rules. It is our hope that Community Development Block Grants will be made available to help with our recovery costs and I applaud Senator Schumer for his support, ” said Joel Kopel, Vice President of the Board for 3 Hanover Square Owners Corporation.
According to FEMA, co-operative and condominium associations are not eligible for grants because, unlike single family homes, they carry a “master policy” for the complex that is paid through association fees and therefore, the occupant of an individual co-op or condo unit is responsible for damages. Common areas of housing cooperatives that suffered damage from Sandy may be eligible for Small Business Administration loans.
Community Development Block Grants Disaster Recovery Assistance is a block grant program administered by HUD to provide communities with resources to address community development needs after a presidentially declared disaster, like Superstorm Sandy. Schumer worked tirelessly to ensure that Sandy disaster relief legislation included $16 billion in CDBG-DR funding. Earlier this week, HUD announced allocation levels for the first $5.4 billion of this funding. Of the initial $5.4 billion tranche, New York State and New York City are eligible for approximately $3.5 billion in CDBG-DR funds.
Schumer today called on HUD to stand ready to assist Community Development Block Grants Disaster Recovery funding recipients to establish programs to help impacted co-operative owners. Schumer also noted that, for any number of reasons, many co-ops with damages from high winds and trees are not eligible for FEMA grants. As a result, the immense numbers of New York co-ops affected by the storm are in need of an alternate source of funding for repairs, such as the highly flexible CDBG-DR funding.
A copy of Schumer’s letter to the Department of Housing and Urban Development is below:
The Honorable Shaun Donovan
Secretary
U.S. Department of Housing and Urban Development
451 Seventh Street, S.W.
Washington, D.C. 20410
Dear Secretary Donovan,
I write to you today on behalf of condominium and housing cooperative homeowners located across Sandy-impacted areas of New York that are discovering large amounts of damage in their residences and properties. I am concerned that there is a lack of clarity regarding how the federal government provides assistance to cover repairs for condominium and cooperative housing associations versus disaster assistance that is available to single family homeowners.
For instance, it is my understanding that common areas of housing cooperatives and condominiums that suffered damage to building wide electrical systems from flooding or exterior damage from high winds and falling trees are not eligible for funding under FEMA’s Individual Assistance and Public Assistance Programs, but such commons spaces may be eligible for Small Business Administration (SBA) loans. Given this lack of clarity and lack of substantive federal assistance available to such a unique housing subset, I ask that the U.S. Department of Housing and Urban Development (HUD) stand ready to assist Community Development Block Grant Disaster Recovery funding recipients to establish programs in order to help impacted condominium and cooperative owners.
New York has a unique housing market. In fact, it has one of the largest concentrations of cooperative housing in the nation. As a result, these characteristics require additional flexibility as localities and New York State continue to identify the best way to address damage incurred by Superstorm Sandy.
It is my hope that HUD will work with localities now to establish a framework for how these assistance programs can be structured with CDBG-DR funding in order to assure a swift use of funds now that allocation levels have been provided. The damage incurred from Superstorm Sandy was wide and deep. At least 300,000 homes – many of which were condominiums or housing cooperatives – in New York alone suffered significant damage from flooding due to Superstorm Sandy’s heavy winds, intense rainfall and storm surge. I highly encourage HUD to reach out to localities and guide communities that are working through the recovery process proactively in order to ensure that their needs are addressed as efficiently and quickly as possible.
Thank you for your consideration of this request. Please feel free to contact my staff at your earliest convenience if you have any additional questions or comments
Sincerely,
U.S. Senator Charles E. Schumer
