NJ Announces Plans For Federal Sandy Relief Funds

STATE — The governor’s office today outlined a proposed Community Development Block Grant Disaster Recovery Action Plan, which indicates how the state would use $1.8 billion  in federal disaster relief funding.

CDBG Disaster Recovery funds are intended to address unmet needs not satisfied by private insurance, the Federal Emergency Management Agency, the U.S. Small Business Administration, or other sources. With this first phase of funding, officials are focusing primarily on helping homeowners, renters, businesses and communities impacted by Superstorm Sandy.

More than half of the funding is targeted for low-to-moderate-income households, in accordance with guidelines from the federal Department of Housing and Urban Development (HUD).

Additionally, per HUD guidelines, 80 percent of the funds will be dedicated to the nine most heavily impacted counties in the state: Atlantic, Bergen, Cape May, Essex, Hudson, Middlesex, Monmouth, Ocean and Union. If approved by HUD, state officials expect that more than 20,000 homeowners, more than 5,000 renters and more than 10,000 businesses will be helped, as well as dozens of local governmental units.

Following a seven day period for public comment, the state will submit the Action Plan to HUD for approval.

Superstorm Sandy caused an estimated $3.837 billion in damage to houses and apartments throughout the state, with over 86,700 units impacted. The state’s plan proposes a variety of programs to meet the needs of displaced homeowners and renters whose primary residences were damaged by the storm, which include:

  • Reconstruction, Rehabilitation, Elevation and Mitigation (RREM) Program: This $600 million program will provide eligible homeowners up to $150,000 to aid reconstruction, rehabilitation, elevation and mitigation of damaged homes. Seventy percent of the funds will be reserved for low-to-moderate-income households.
  • Housing Resettlement Program: This program is aimed at Sandy-impacted homeowners who sustained storm damage and who are considering selling or abandoning their property. Funded at $200 million, this program will provide $10,000 grants to eligible homeowners to remain part of the fabric of their communities as they continue the recovery process. Sixty percent of the funds will be reserved for low-to-moderate-income households.
  • Blight Reduction Pilot Program: This $30 million program will provide zero-interest forgivable loans to nonprofit and for-profit developers to purchase and rehabilitate foreclosed, vacant or abandoned properties throughout the state. The program will encourage development of affordable homes and rental housing.
  • Sandy Home Buyer Assistance Program: Funded at $25 million, this program will provide financial assistance of up to $50,000 to low-and-moderate-income households to purchase a home. Housing created under this program would be affordable to households earning up to 80% area median income.

Businesses in the 113 municipalities most impacted by Superstorm Sandy incurred $382 million in commercial property loss and another $63.9 million in business interruption losses. To help New Jersey businesses, the plan sets aside $500 million in funding for the New Jersey Economic Development Authority to administer the following activities:

  • Small Business Grants of up to $50,000 to eligible businesses that sustained physical damage. A $300 million allocation will fund grants that can be used for purposes including rehabilitation, new construction, equipment, inventory, mitigation, refinancing and working capital among other uses.
  • No-Interest Loans for Storm-Impacted Small Businesses ranging from $100,000 to $5 million for documented physical damage not covered by other sources. These loans are intended to assist eligible businesses that suffered physical damage, as well as spur economic revitalization by providing funding for expansion and new businesses in storm-impacted areas.
  • Neighborhood And Community Revitalization Programs to provide funding of up to $10 million to help communities rebuild commercial areas with public facility improvements such as streetscapes, lighting, and sidewalks and undertake other activities critical to restoring and strengthening local economies, including micro-loans for storm-related damage and loan guarantees as well as façade and code-related improvements.
  • A Tourism Marketing Campaign to promote storm-impacted businesses and shore communities by letting the nation know that New Jersey is recovering and that communities are open for business. The campaign funded at $25 million would also encourage New Jerseyans and tourists to shop local, thereby supporting companies that are operational.

While the housing and economic sectors are the central focus of this first allocation of CDBG Disaster Recovery funding, the plan also proposes to use funds to help local governments provide essential services after incurring unanticipated expenses caused by the storm that are not reimbursed by FEMA. The Action Plan proposes to allocate $116 million in funds as follows:

  • Public Assistance Program: An allocation of $50 million would be used to provide critical funding support to municipalities by helping to subsidize the “local match” for FEMA Public Assistance projects. This will ensure local governments have sufficient resources to continue providing essential services without resorting to tax increases or other measures that may cause further hardship and distress in Sandy-impacted communities.
  • Protecting Essential Services For Long-Term Recovery: $60 million would be used to close gaps in funding in FEMA’s Community Disaster Loan Program so that local governments can continue to pay essential personnel in critically important service areas including police and fire services, education, and public works.
  • Code Enforcement Grant Program: $6 million in funding would supplement local code enforcement offices with additional personnel, provide an online plan review and permitting process, and enhance the NJ Department of Community Affairs’ continuing education curriculum for code officials to include training in flood hazard mitigation practices and other storm-related code issues.

The plan also includes a range of rental housing activities designed to replenish rental housing stock lost to Sandy, rehabilitate affordable rental units left uninhabitable by Sandy, and provide affordable housing for special needs populations.

  • Restoration of Multi-Family Housing: $104.5 million will be utilized to provide zero and low-interest loans of up to $120,000 per unit to qualified developers and public housing authorities to facilitate the creation of new permanent housing units. A significant portion of the fund will be used to assist in the development of new permanent, supportive housing for people with special needs.
  • Fund for Rehabilitation of Small Rental Properties: Through an allocation of $70 million, the Christie Administration will provide zero-interest, forgivable loans of up to $50,000 per unit to eligible owners of rental buildings with 25 or fewer units that received significant damage from Superstorm Sandy and are partially or completely uninhabitable.
  • Predevelopment Fund for Affordable Rental Housing: Provide financing of up to $500,000 to help nonprofit housing developers cover the predevelopment costs of properties that are unsafe, underutilized, or in foreclosure. Projects must help to revitalize communities by facilitating the acquisition, clearance, and preparation of difficult to develop sites. Allocation for the program would be $10 million.
  • Affordable Housing Incentives: Through $40 million in funding, this program will provide incentive payments to eligible rental property owners who agree to lease their units to low and moderate income households at affordable rents.

Assembly Deputy Speaker John S. Wisniewski found one major flaw with Gov. Chris Christie’s plans for the federal dollars. “While there are many pressing needs as New Jersey continues its recovery from the damage inflicted by Superstorm Sandy, I share the disappointment of many residents in my district over the fact that the Governor has made no commitment to a buyout program for those whose properties have been subject to chronic flooding,” said Wisniewski (D-Middlesex). ” These homeowners remain in limbo as we await news about the extent of the Governor’s commitment to support homeowners who wish to be bought out. I look forward any news from the Governor that can help these homeowners as they seek to rebuild their lives and reaffirm my commitment to work cooperatively with him to help meet the needs of these constituents”

To view the Action Plan, visit the NJ Department of Community Affairs’ website at www.nj.gov/dca.

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