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Senator Announces Dept. of Housing and Urban Development Has Agreed To Allow Funding From Sandy Relief Bill To Assist Sandy-Impacted Co-Ops and Condos

Press Release

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U.S. Senator Charles E. Schumer today announced that the U.S. Department of Housing and Urban Development (HUD) will allow 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. The move comes after Schumer requested that HUD establish program guidelines to establish eligibility requirements to help co-op and condo homeowners repair damage incurred by Sandy. The funds can be used to repair the common areas in the building, such as lobbies, boilers and elevators.

"We have finally cleared a bureaucratic hurdle that prevented thousands of homeowners in New York City and Long Island from getting the help they needed," said Schumer. "We have always said that condos and co-ops should be eligible for the same assistance as single family homes, and now they are."

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. Last month, 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.

However, it was not clear following the initial allocation whether co-op and condo owners would qualify for assistance. Last month, Schumer called on HUD to allow CDBG-DR aid to be used for co-ops and condos, to fill the gap left by FEMA's existing policy against providing individual assistance for repairs to common areas, such as exterior damage or damage to building-wide electrical systems.

"This welcome decision to allow federal aid for storm-damaged condos and co-ops will provide much-needed relief to the thousands of families and seniors who live in these buildings. It will save these victimized homeowners from unfairly shouldering the massive capital expenditures to repair common areas and infrastructure. Co-op and condo owners deserved the same relief that private homeowners received, and this decision helps accomplish that basic fairness," said Schumer.

Schumer today announced that HUD has agreed to assist CDBG-DR recipients in establishing programs to help impacted co-op and condo owners. Schumer also noted that New York has one of the largest concentrations of cooperative housing in the nation, but for several 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 original letter, requesting this change, 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,

Charles E. Schumer
United States Senator


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