Co-Op Owners May Not Receive Help from FEMA After Hurricane Sandy

For co-op residents whose homes were damaged in Hurricane Sandy, financial assistance from FEMA may not be forthcoming.  

Cooperative housing, a system that exists all over the nation but flourishes in New York City, is a housing agreement wherein apartment dwellers, rather than legally own or rent their units, instead purchase a share of the entire building. The legal distinction may not appear to mean much to the average person, but after Hurricane Sandy, the difference has cost many co-op apartment dwellers Federal Emergency Management Agency aid, even though many of the buildings and residencies were damaged extensively by the storm.[1]

Under current law, co-op owners cannot apply for aid to their individual units or common areas because that is seen as the responsibility of the entire building, which is regarded as a business, even though no actual profits are sought or even received. Although issue was addressed before after Hurricane Wilma in Florida, it has never been resolved. However, because no other region in the nation that has such a high percentage of co-ops has ever been hit by a storm the size of Hurricane Sandy, the problem will not be as easy to ignore. 

Approximately 20 percent of the residencies hardest hit by Hurricane Sandy were co-ops. Even though the common image of co-op dwellers is that of well-to-do, moneyed American aristocracy, many co-op residents are senior citizens and retirees for whom additional financial obligations would be devastating. 

FEMA can, however, provide aid for damaged furniture and possessions, in much the same way that renter’s insurance does.  However, areas such as the roof or boilers, for example, are considered “common areas,” to be addressed by the board and the tenants. 

Appeals have been made by local representatives for the purpose of changing legislation, so that co-ops might qualify for a portion of the repair funds. However, the real difficulty lies in finding representatives from other states who will support an allotment for co-ops. Because many senators and congressmen and women come from regions that are often hit by natural disasters such as floods and tornadoes, they might not be amenable to the possibility that FEMA funding could be diverted to a New York co-op.

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[1] Navarro, Mireya: U.S. Rules Bar Aid to Co-ops Hit by Sandy New York Times 5/1/2013 http://www.nytimes.com/2013/05/02/nyregion/fema-policy-keeps-co-ops-from-disaster-aid.html?ref=nyregion&_r=0&pagewanted=print

Hurricane Sandy Relief Funds Might Not Be Used to Rebuild Homes

Six months after Hurricane Sandy made landfall, property owners are still struggling with the costs of repairs, and it was recently discovered that New York City residents might not be allowed to use federally granted funds to rebuild their homes. 

New Yorkers still have a hurdle to overcome with regard to funding for hurricane repairs and renovations: federal relief money disbursed to private citizens can only be used to build new structures, not restore damaged ones.[1] However, no such restrictions are given to Long Island residents, even though the amount of money being given to the districts is almost the same (New York has been allotted $1.8 billion; Long Island $1.7billion). The funding for structural repair is desperately needed, since many of the severely damaged homes will have to be not only repaired, but elevated as well, in accordance with new flood safety standards.[2]

The lack of consistency with regard to how monies can be used within a single state is causing consternation among not only New York City residents, many of whom are still not able to move back into their homes, but also among state and local officials. Senator Chuck Schumer wrote in a letter to Housing and Urban Development Secretary Shawn Donovan that there must be uniformity with regard to relief funding for all residents of New York State. “A homeowner in Rockaway Beach will not be eligible for the same benefit that a homeowner in Long Beach, just 10 miles away, will be able to access."

The New Yorkers without flood insurance who are looking to repair their homes and businesses might have reason for hope, however, since the plans for the allotment of funds are “only preliminary,” according to a spokesperson for the City.

It was announced that residents who were still unable to inhabit their homes would be moved from Federal Emergency Management Agency-funded hotels into temporary apartments. FEMA would pay the rental, as well as administrative, costs for the initiative.

Any funding for rebuilding efforts will certainly come in handy, considering that many residences will have to be elevated in order to comply with the new safety standards. The price of elevating a structure is steep—between $10,000 and $100,000, not including the cost of any other related expenses, such as a new foundation. Nevertheless, certain structures lying within the current advisory flood maps will be required to be elevated. Others outside of the flood area will not necessarily have to be elevated, but homeowners will have to decide whether to bear the costs of elevation or contend with substantially higher insurance rates.

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[1] Hurricane Sandy relief rules restrict New Yorkers from  using cash to rebuild 4/11/2013 http://rt.com/usa/sandy-relief-federal-restrictions-662/

[2] Harris, Elizabeth: Going Up a Few Feet, and Hoping to Avoid a Storm’s Path New York Times 4/15/2013 http://www.nytimes.com/2013/04/16/nyregion/after-hurricane-sandy-homeowners-elevate-property.html?pagewanted=all&_r=0