The State of Sandy Recovery

Transcription

1 The State of Sandy Recovery Two and a Half Years Later, Over 15,000 Families Still Waiting to Rebuild Second Annual Report February 2015 Fair Share Housing Center Latino Action Network NAACP New Jersey State Conference

2 The State of Sandy Recovery Two and a Half Years Later, Over 15,000 Families Still Waiting to Rebuild Second Annual Report February 2015 Fair Share Housing Center Latino Action Network NAACP New Jersey State Conference Cover Photo: Bill Halbeisin s cot in his damaged home in Beach Haven West. Bill s house has been approved for RREM funding but has not been rebuilt by Fair Share Housing Center, Latino Action Network, and NAACP New Jersey State Conference. This document may be freely reproduced, disseminated, or distributed in full. For permission for reproducing excerpts, contact Adam Gordon at Fair Share Housing Center, adamgordon@fairsharehousing.org. The authors express their thanks to Yvette Chen for her assistance in data analysis on this report.

3 Introduction A few weeks ago, Governor Chris Christie did not mention the still ongoing recovery from Superstorm Sandy in his State of the State address. This second annual report fills in what Governor Christie omitted. Two and a half years after Superstorm Sandy, much work remains to ensure that New Jersey s rebuilding effort fairly and effectively gets people back home. In October 2012, Sandy seriously damaged or destroyed more than 55,000 homes. Two programs, one for homeowners, and one for renters, have provided the State s primary permanent recovery strategy to get people back in their homes and communities: The Reconstruction, Rehabilitation, Elevation and Mitigation (RREM) program aims to serve approximately 10,800 families who had serious damage in rebuilding and elevating the homes they own. Of those 10,800 families, only 328 have completed rebuilding. About half have not even signed a contract to start. The Fund for Restoration of Multi-family Housing (FRM) will result in 5,400 rehabilitated or replacement rental homes for families who experienced serious damage. Of these 5,400 homes, only 51 are complete. Most will not be available until between late 2015 and While some delay is unavoidable in any rebuilding, New Jersey s deep problems in initial rollout set the state back significantly. We still need to fully account for these problems which is hard when the State refuses to release documents that explain them such as the Cohn Reznick integrity monitor reports. We also need to evaluate whether, given these issues, the State is doing everything it can to address the difficult reality of thousands of families whose rebuilding has been set back. Thousands of people find themselves in the untenable situation of simultaneously paying the mortgage and taxes on an uninhabitable home and also rent on another home. Many people, especially lower-income families, have been displaced far from their original communities. It is critical that the State do everything it can to move the rebuilding process along and provide both transparency to people waiting for funds on how to access them, along with assistance in the interim. For homeowners, the flawed rollout of RREM included lost applications and ever-changing instructions. The State fired the contractor running RREM, HGI, in January For renters, there was too little money available. And that limited money went to places with little storm damage such as Belleville, instead of to the hardest hit communities such as those in Monmouth and Ocean Counties. Some problems hit African-American and Latino communities especially hard: the lack of funds for renters, inaccurate information in Spanish, and disproportionate rejection rates from RREM even though many rejected applicants were actually eligible. As a result of a settlement of a fair housing complaint filed by Fair Share Housing Center, Latino Action Network, and the NJ NAACP, the State has begun to address these issues. But much work remains to be done. Regardless of race, ethnicity, or community, there is still a long way to go for too many New Jerseyans. This report identifies the work left to do, and suggests a path forward in three key areas: fairness, getting people back home, and transparency. We hope that this report will help make New Jersey s recovery programs more effective so that by the third anniversary of Sandy in October, far more people will be back home. 1

4 1. Fair Funding for Both Renters and Homeowners Impacted by Sandy, with Priority for the Hardest Hit Communities The problem: The initial rollout of the Sandy recovery did not happen fairly for either renters or homeowners. Far less of New Jersey s initial Sandy funding went to renters than their share of damage would suggest. This underfunding disproportionately affected large numbers of African-American and Latino families, and lower-income families of all races and ethnicities including many white working-class families. As a result of the fair housing settlement mentioned above, more funding will go to both renters and homeowners in proportions that begin to address this disparity: Percent of Sandy-impacted Renters by Race, Ethnicity, and Income White 56% African-American 23% Asian-American 8% Latino 25% Non-Latino 75% HH Income below $30,000 67% HH Income $30,000-$60,000 22% HH Income above $60,000 11% Percent of Sandy-impacted Homeowners by Race, Ethnicity, and Income White 82% African-American 8% Asian-American 7% Latino 8% Non-Latino 92% HH Income below $30,000 28% HH Income $30,000-$60,000 23% HH Income above $60,000 49% 2

5 Funds especially for renters were not initially targeted towards the areas hardest hit by Sandy and many developments were funded with little or no connection to Sandy. Sandy impacted renters would have to move long distances instead of returning to their home communities. Part of the fair housing settlement requires this imbalance to be corrected through the Fund for Restoration of Multi-Family Housing, the biggest rental program, which will allocate funding based on the actual damage in the hardest hit counties. 1 Homeowner Rebuilding: Damage vs. Funds Awarded % Damage % Funds Awarded 64.9% 76.3% 17.0% 6.0% 18.1% 17.7% Bergen to Middlesex Monmouth-Ocean Atlantic-Cape May Renter Rebuilding: Damage vs. Funds Awarded % Damage % Funds Awarded 52.5% 39.1% 34.3% 22.2% 25.2% 25.8% Bergen to Middlesex Monmouth-Ocean Atlantic-Cape May 1 In the charts, Bergen to Middlesex includes Bergen, Essex, Hudson, Union, and Middlesex Counties. Sandy Homebuyer Assistance Program is not included in calculations, as it serves both homeowners and renters. Geographic allocation of Sandy Homebuyer Assistance funding: Bergen to Middlesex 21.6%; Monmouth-Ocean 53.7%; Atlantic-Cape May 24.7%. 3

6 Lavern Burgess, a renter from the Ironbound section of Newark, is still trying to rebuild from the storm: Lavern Burgess is a father of three who has lived for the past eight years in an apartment in the Ironbound section of Newark. He works as a machine operator in Hackensack. When Sandy struck his apartment, the water came in through the first floor balcony, flooding the living room and kitchen. For me and having my kids with me, it was a nightmare, Burgess said. We were sleeping in the dark, my kids were scared, and I was so stressed out. I just had to hold on and pray that everything would get better. Sandy ruined the carpet, leaving behind a putrid odor. The flooding also damaged the boiler which took the landlord two months to fix. In the meantime, the Burgess family was left with no heat or hot water. Lavern was forced to use the gas stove and space heaters to generate heat. I stayed up most nights to make sure nothing caught on fire, Lavern said, noting that he also felt the impact in his job. This generated a utility bill that was nearly $2,000. Eventually, Lavern s power was shut off and he had to live in the dark for about two weeks. He also fell behind in his rent at this time which caused him to go to court with the landlord. The funds that the State made available to homeowners through the Resettlement program for these kinds of short-term needs were not made available to renters. A local non-profit organization, Ironbound Community Corporation, has been able to help with his gas, electric, and rent somewhat, but as a result of the shortfall of funding for renters, Lavern is still today trying to catch up on his back expenses and living in an apartment that suffered severe damage from Sandy. For homeowners, a major problem with RREM was incorrect rejections. Data from the State showed that nearly 80 percent of applications that were rejected and were then reviewed on appeal were actually eligible for funding. African-Americans and Latinos were rejected at higher rates than white non-latino applicants. Adding insult to injury, the information available on the RREM program in Spanish had incorrect information such as the wrong deadlines for applying.. As of November 2014, significant disparities between African-American and Latino applicants and white non-latino applicants remained, with African-Americans having been rejected at over two times the rate of white non-latino applicants and Latino applicants at 20% higher rates. These disparities will likely decrease slightly as a result of a review of all rejections mandated by the fair housing settlement, which was provided by DCA right before this report went to press. Based on an initial analysis, 253 people who were rejected from RREM were actually eligible for funding. These applications would never have been reviewed absent the settlement. The settlement also provides an additional $40 million for low and moderate income homeowners who were missed in the initial process of all races and ethnicities. Between the review of rejections and the new program, it is likely that 500 or more additional homeowners will qualify for assistance. 4

7 Percent of RREM Applicants Funded, Rejected, and Waitlisted by Race/Ethnicity Funded Waitlisted Rejected Withdrawn 7% 12% 12% 32% 18% 15% 8% 14% 11% 50% 61% 59% African-American Latino White Non-Latino How to Make Recovery Work: Implementing the Voluntary Compliance Agreement The Voluntary Compliance Agreement reached in May 2014 between the Latino Action Network, NJ NAACP, Fair Share Housing Center, the State of New Jersey, and the U.S. Department of Housing and Urban Development requires the State to take numerous steps to address fairness throughout the rest of federally-funded recovery. The State should implement the agreement, which: Sets firm targets for prioritizing most impacted areas first, especially the hardest hit counties Ocean, Monmouth, and Atlantic. Funds for replacing rental homes through the FRM program will be allocated geographically to reflect the amount of damage Requirements for Targeting FRM Program to Hardest Hit Counties 52% Monmouth and Ocean Counties Atlantic County 20% 28% Everywhere Else experienced in each county within a total of $594 million in FRM funding. As these homes become available, they will be listed at and preference will be given to applicants who were displaced by and/or experienced major and severe damage from Sandy. 5

8 Requires equal access for non-english speakers to all programs funded with HUD s disaster recovery funds and the creation of a Spanish bilingual website for all programs, now available at (with 10 other languages also available at the menu in the upper right). Establishes $15 million in available funding for renters still displaced from Sandy, which can be used for up to two years while replacement homes are being built, which funds are now available by applying by March 4 at Targets $40 million to low- and moderate-income homeowners missed in the initial RREM outreach, including at least $10 million to owners of manufactured housing, which funds are now available by applying by March 4 at Provides an opportunity for funding for those wrongly found ineligible, through a rereview of all applications rejected from the RREM program, as part of a broader plan to clear the RREM wait list. Notifications about the re-review of applications have been sent out to individual applicants over the last month. Provides enhanced outreach to low- and moderate-income communities that have been underserved by the recovery to date, including enhanced partnerships with community groups and housing counseling to help people who are facing financial distress in recovering from Sandy, with housing counseling information available here: As the above information shows, the Voluntary Compliance Agreement s implementation is starting to actually lead to changes in the State s programs. Still, much work remains to be done over the next year to make sure the Voluntary Compliance Agreement is implemented fully and effectively. For example, our organizations are concerned that the initial rollout of the new programs for renters and homeowners mentioned above may not be reaching many of the people eligible due to a lack of advertising in both the English and Spanish language media. Our organizations are currently seeking more information through an Open Public Records Act request about what, if any, paid marketing has been done and believe it is critical to have sufficient marketing of all programs to make sure that people who are eligible actually apply. The Agreement does not make all of the funding perfectly fair. And it is not possible to undo all of the damage from the problems with the initial rollout of Sandy funds. That said, if the Agreement is implemented successfully it will help a lot of people impacted by Sandy who up to this point have been left behind. 6

9 2. Getting People Back Home The problem: while a lot of money has been committed, very little of it has actually gotten people to the finish line of the rebuilding process. According to the most recent Quarterly Performance Report submitted by New Jersey to HUD, $3.3 billion has been provided to the state, yet less than ¼ of that money $768.4 million has actually been spent. The slow disbursement of available funding has severe consequences, with repairs and rebuilding lagging behind. In the case of RREM, the most recent quarterly report shows that the state has only spent 1/5 ($219 million out of $1.1 billion) of the money allocated for the RREM program, the largest homeowner program for Sandy relief. Only 328 homes have been completed as of January 2015, a tiny fraction compared to over 40,000 owner-occupied homes in the state that were severely damaged or destroyed by Sandy, and the 15,000 families who applied for RREM. Of those 15,000 families who applied, about 12,500 were found eligible, but nearly 2,000 have withdrawn from the program, in many cases due to giving up on the process, leaving about 10,800 families still waiting for money today. Even when people have received money, they have often had problems with their contractors; a recent integrity monitoring report found that 12 out of 74 contractors reviewed for a RREM program had red flags such as allegations of bribery, unpaid taxes, and labor law violations, which the State had inadequately screened. For FRM, progress is also slow. The State projects that FRM will result in 5,400 rehabilitated or replacement rental homes for families who had serious damage. Of these 5,400 homes, only 51 are complete. Most of the rest will not be available until between late 2015 and RREM Progress FRM Progress Total Eligible Applicants Signed Grant Agreements In Active Construction Completed Homes Total Affordable Rental Units Projected Funding Committed In Active Construction Completed Units 7

10 Not surprisingly given this lack of progress, in a Monmouth University survey of a sample of displaced families, only a small number of residents sampled have returned to their homes. Among survey participants in the previous year that reported waiting to return to their homes, only 28% were able to move back, 67% are still displaced, and 6% say they will never return to their damaged homes. Bill Halbeisen, homeowner in Beach Haven West, is still waiting to rebuild: Bill Halbeisin has owned his home in Beach Haven West since September 22nd He retired from being a school psychologist in He had four and a half feet of water in his house during Superstorm Sandy. The entire structure was damaged. He's lived in nine different places since the storm and says he feels like he makes camp to break camp and then make camp again. Bill got a suitable settlement from insurance, has been working part time to save up, and combined with the RREM grant, will be able to rebuild. Bill applied for RREM the first week it was announced. Three or four months later he was rejected. He was told that he needed to have more than one foot of water, and more than $8,000 in damage. He had four feet of water, and pretty much lost everything, so he appealed. The appeal also took three or four months. He heard back that he was on the waiting list for approximately five months and then he was put on the funded list. He didn't actually sign his RREM contract until December Before funds are released, Bill needs to have a contract signed with a builder, which should happen this month. According to his builder's estimate, it is likely another 10 or 11 months until the work is done and Bill can go home. This winter, he's got help from a non-profit to pay for his winter rental. In the summer, he lives on a boat that he bought to have a place to stay, and he stays on a cot in his damaged house when it gets too rough or stormy. Since the SHRAP program ended, Bill is grateful to have assistance, but wonders where he'll stay next winter as it's likely the project will continue into the cold months this year as well. Bill is now working with the New Jersey Organizing Project (NJOP) along with fellow Sandy survivors to try to speed up the rebuilding process and ensure there is help along the way. 8

11 While people are still waiting to move back home permanently, resources available for short-term assistance have dried up. The funds to help people meet short term housing needs, from FEMA and the SHRAP program, were based on the idea that after two years people should be able to move back home. People are not back home, and the funds have run out to pay rents, taxes, and mortgages. There is a critical need for more assistance for these families. According to the Monmouth University Residents Needing Assistance Making Payments Sept Jan 2014 July October % 28% 25% 23% Assistance with Mortgage survey, as the chart to the right shows, there has been little change in the number of residents impacted by Sandy needing short-term assistance over the past year. This same survey finds the majority of respondents are still dissatisfied with the recovery effort and feel forgotten. Satisfaction with NJ Sandy Recovery Effort Assistance with Rent Sept Jan 2014 July October % 27% 30% 28% 35% 38% 8% 6% Very Satisfied Somewhat Satisfied Somewhat Dissatisfied Very Dissatisfied Feeling About NJ's Recovery Effort Sept Jan 2014 July October % 71% 22% 29% Focused on helping people like me People like me have largely been forgotten 9

12 How to Make Recovery Work: Get money out efficiently and effectively so that people can finish the job of recovery and get back home. The state should: Set benchmarks for when it expects to have money out the door and homes under construction and fully and safely completed for the RREM and FRM programs and explain their justification for those benchmarks. By the third year anniversary of the storm have all RREM grants awarded and under construction. Publicly provide monthly progress reports towards those benchmarks. o For RREM those reports should include how many grantees have pulled building permits, begun construction, and finished construction and back in their homes, and for those grantees elevating their home where they are in the elevation process (elevation has not yet begun, elevation underway, elevation completed). o For FRM those should include how many grantees have pulled building permits, begun construction, and completed homes and made them available for rent. Report the above objectives and performance data by census tract and municipality, and for elevation by FEMA zone, so that the public can tell that all communities are being fairly treated Help homeowners with problems with contractors, especially contractors who may have been insufficiently screened by the State before being recommended to homeowners Provide short-term assistance to homeowners and tenants who are still displaced and waiting for permanent housing, through reallocation of unused Community Development Block Grant-Disaster Recovery funds or other funds. Implement a moratorium on foreclosures for people who are waiting for Sandy funding to rebuild their homes, as a bill with bipartisan support currently pending in the New Jersey Legislature proposes. 3. A Fully Transparent Recovery The problem: Too often, it has been incredibly difficult to get transparent information on the recovery. People can t get answers on either the small questions why their grant agreement is not moving forward or the big ones such as publicly-funded integrity monitor reports. In March 2013, Governor Christie signed legislation establishing integrity monitors that review the Sandy rebuilding process including how billions of dollars in federal aid is spent and release periodical reports. Despite spending nearly $10 million in public funds in June 2013 to hire an integrity monitor, Cohn Reznick, to oversee the main grant process, none of those integrity monitor reports have ever been released. Instead, the Christie Administration set up a second integrity monitor to monitor the integrity monitor, and release short summaries of their activity. People who have been waiting for funds for two and a half years are still in the dark as to what has caused delays and problems. 10

13 Lisa Stevens, homeowner in Little Egg Harbor, has had problems getting clear answers as to what she needs to do to rebuild: Lisa Stevens has owned her home in Little Egg Harbor's Mystic Island since Ten months before Sandy hit, she retired from a career of service to the state at the Division of Youth and Family Services. When she bought her house she was told 'it never flooded'. During Superstorm Sandy, Lisa had about two feet of water in her house. It took weeks for both the full impact of the destruction to set in, and for Lisa and her neighbors to salvage what they could, and begin to clean up the rest. Though she says she probably shouldn't have, she stayed in her home even for the eight weeks where she was without heat and hot water. After a fight with the insurance company, she was able to reach a settlement. She invested nearly all of that settlement in getting her home livable again. When the RREM program came out, Lisa applied. Her application got lost, and she was initially told there was no record of her application. She had evidence that she applied and was able to appeal. In a move characteristic of the confusion of the RREM program, Lisa received a letter denying her appeal the same day she received a letter accepting her in the program. She initially chose pathway C - where the state's contractors handle all aspects of the program - to avoid the hassles, complications and potential fraud she'd faced trying to rebuild her home. Initial estimates came in at $368,000 (the RREM grant covers a maximum of $150,000) to completely rebuild and raise. Deciding to only raise her house, estimates came it at $173,000, then another quote came in at $263,000 just to lift the house. Lisa was told she would need to pay out of pocket $90,000 and to just take out a loan for that amount. She already has a mortgage. She decided to try and leave Pathway C to move to Pathway B where she may have more control over design costs and choices. She's hoping this will be a more affordable path forward. She was notified last week of the pathway switch after applying to switch in the fall. She's starting this leg of her journey now, and has joined the New Jersey Organizing Project to help her and others get back home. People also have problems figuring out what the issues are causing their own individual delays. Often, people can t get answers as to what documents they still need to submit to get funding, can t get calls returned, or are told different things by different people. The Sandy Bill of Rights, bipartisan legislation that would have provided remedies to these issues, passed unanimously in the Senate and Assembly. However, Governor Christie vetoed the legislation and members of his own party refused to override his veto. Today, there is no clear and comprehensive checklist or timetable for getting funding. 11

14 How to Make Recovery Work: Ensure transparency at every step of the process. The state should: Release all periodic reports from integrity oversight monitors with full detail, including all past Cohn Reznick reports Provide info for people still waiting for money from the RREM program including a clear and detailed list of any remaining documents needed and a timetable for providing funding Provide a customer service standard of returning all calls and s regarding questions on accessing Sandy funding within two business days of contact Data Sources Fairness section: Share of homes impacted by Sandy: NYU Furman Center for Real Estate and Urban Policy analysis of FEMA data, April 2013 Race/ethnicity and income data: Enterprise Community Partners, FEMA Assistance Analysis, March Share of NJ Sandy housing funding: Action Plan Amendment #11, December 2014 Monmouth University Survey: NJ Sandy Panel: Recovery Stuck in the Sand, released October 30, Rejected RREM applicants found to be eligible: DCA data as reported pursuant to Voluntary Compliance Agreement, January Percent of RREM applicants funded: DCA data as reported pursuant to Voluntary Compliance Agreement, November Requirements for targeting FRM: Voluntary Compliance Agreement, May Getting People Back Home section: RREM Rebuilding Numbers: Star-Ledger, 'We need help desperately,' residents tell state officials at Sandy hearing, January 7, 2015; DCA data as reported pursuant to Voluntary Compliance Agreement, November FRM Rebuilding Numbers: Action Plan Amendment #11, December 2014 Contractor issues: Navigant integrity monitor report, January 2015 Monmouth University Survey: NJ Sandy Panel: Impacted Residents Needs Have Not Diminished in Past Year, released October 28,