Letter to Shaun Donovan, Secretary of the U.S. Department of Housing and Urban Development

Letter

Dear Secretary Donovan,

I write today regarding the Department of Housing and Urban Development's (HUD) review of the State of New Jersey's Community Development Block Grant -- Disaster Recover (CDBG-DR) Action Plan amendment. Before you approve the second round of CDBG-DR funds for the State of New Jersey, I ask that you carefully consider some of the concerns I outline in this letter.

The Sandy Aid package requires that 50% of CDBG-DR funds be used for activities that benefit persons of low and moderate income. Concerns have been raised that not enough emphasis has been placed on ensuring Sandy recovery funds get to those that need financial help the most. An analysis by the Fair Share Housing Center in New Jersey found that only 37 percent of resettlement grants awarded in New Jersey were awarded to low and moderate income households. HUD must review the state's needs assessments and determine that New Jersey is properly administering its aid programs with respect to low and moderate income residents. This should also include a greater emphasis on financial assistance to low and moderate income renters. I am also concerned with potential racial disparities in the aid distribution process. Analyses show that black and Hispanic citizens were more likely than whites to get rejected by the State's Reconstruction, Rehabilitation, Elevation and Mitigation (RREM) program and Resettlement program. This inequity should be corrected as the second tranche of CDBG-DR funds are allocated.

HUD should review the New Jersey CDBG-DR Action Plan amendment to determine if the state has set forth comprehensive information regarding the policies and procedures guiding recovery programs. HUD guidance states that "During the term of the grant, the grantee must provide citizens, affected local governments, and other interested parties with reasonable and timely access to information and records relating to the Action Plan and to the grantee's use of grant funds." My constituents need to know exactly what the eligibility criteria are for these grant programs, as well as the process for being approved, placed on the waiting list and appealing a denial of their application. Many of my constituents are extremely angry that they have not been able to learn the status of their application to a particular program, and that clear guidelines for grant programs administered by the state are difficult to locate. Further, the State has not publicized its criteria or methodology for ranking the applications it received, and I believe the State should be compelled to do so. A greater focus on accountability and transparency is critical as the second round of CDBG-DR funds are distributed in New Jersey.

My staff has had lengthy discussions with HUD staff regarding your agency's rejection of New Jersey's request to reimburse rehabilitation expenses for applicants to the state's RREM program. I understand that HUD must comply with the National Environmental Policy Act (NEPA), however my staff has asked whether it is possible to "stop the clock" and disallow work to continue only once a homeowner enters into an agreement with the State and funds are actually allocated to them. Homeowners are barred from being reimbursed for work on their home from the moment they apply, when there is still uncertainty around whether they will truly be allocated funding. It is possible their application could be denied, or they could be placed on a waiting list for funding only to find out down the line that the state does not have the funding available to assist them. Additionally, I would like clarification as to whether homeowners can be reimbursed for work they undertake after they receive an environmental review from the appropriate state agency, but before their application is formally approved.

I also request detailed information on the criteria used for determining the funding allocations for New Jersey, New York, New York City and other grantees working to recover from Superstorm Sandy. The second allocation for the entire state of New Jersey, $1.463 billion, is only slightly higher than the allocation for New York City alone. Given the tremendous challenge New Jersey faces rebuilding from this catastrophic storm, I believe it is important that the methodology by which these allocations were determined be made public.

I would like to invite you to New Jersey to meet with mayors and other elected officials in my Congressional District who have been on the front lines of the recovery effort in New Jersey. Elected officials in my district are frustrated and angry with the aid distribution process and I believe their perspective will be valuable as HUD continues to review and oversee New Jersey's usage of CDBG funds.

As you know, my district suffered some of the worst damage from Hurricane Sandy. The second allocation of CDBG-DR funding to the State of New Jersey is critical to our rebuilding effort. It is our responsibility to ensure the funds are distributed fairly, swiftly, and transparently. Please do not hesitate to contact me if I can be of assistance in any way.

Sincerely,

FRANK PALLONE, JR.

Member of Congress

6th District of New Jersey

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