HUD Warns NYC It's Too Slow with Sandy Funds

Federal housing officials have warned the de Blasio administration that, despite progress on its recovery program, it has not been drawing down Sandy aid quickly enough and risks losing a part of it.

The U.S Department of Housing and Urban Development awarded New York City a total of $4.4 billion in Community Development Block Grants for long-term recovery and rebuilding. The first $425 million was obligated Aug. 16, 2013, with the stipulation that the money had to be claimed within two years.

But, according to a monitoring report issued Jan. 26, the city had expended just about half of it as of September, a large proportion going to immediate expenses right after Sandy and much less to Build it Back, the city's home repair program and a major target of the HUD aid. 

"HUD has concerns that the city is not moving quickly enough to deploy assistance to those in need and may face significant challenges in meeting the two-year expenditure deadline," the report states.

A spokeswoman for the mayor, Amy Spitalnick, disputed the assessment and said there would be no problem meeting the deadline six months from now. She said there was a lag between when the city spent the money on homeowners and when it is successfully reimbursed by HUD — what the federal government calls "drawing down" funds.

"A contractor does the work," she said. "The city is billed by the contractor, the city pays the contractor. Then the city finishes the documentation and submits it to HUD and then gets reimbursed by HUD."

After he came into office last January, Mayor Bill de Blasio made several changes to speed up Build it Back. Since then, more than 1,000 repairs have gotten underway and another 2,482 reimbursement checks have been sent out to homeowners who completed work on their own. But those numbers are just a portion of the 13,000 applications for help that the city said are still active.  

"There are still too many administrative hurdles that are throwing people off track," said Margaret Becker, the director of disaster relief for Legal Services NYC, which represents about 1,200 Build it Back clients. "I don't know a single client whose house is under construction, much less rebuilt."

She said work is slower than it needs to be because of a shortage of building crews and other factors. Some homeowners have been forced to spend their initial repair money on other expenses, preventing them from moving forward on Build it Back repairs. In other cases, Becker suggested the city should take a block-by-block approach to rebuilding, since the damaged homes were built so close together homeowners will need cooperation from neighbors in order to resolve sticky zoning and planning issues. 

Spitalnick, the spokeswoman for the mayor, said the city is taking steps to address those issues, and expects to hire more contractors in the coming months who will develop neighborhood-wide solutions.

"The exponential pace at which things have increased over the last few months is only going to grow," Spitalnick said.