Albany, NY - August 13, 2015 - Governor Cuomo requested that U.S. Housing and Urban Development Secretary Castro use his executive discretion to waive the Duplications of Benefits regulation for homeowners affected by Superstorm Sandy. Unless waived, the regulation would require impacted New Yorkers who will now be receiving additional funds from FEMA and the National Flood Insurance Program as a result of recent legal settlements to pay back funds granted to them by NY Rising.
“Waiving this requirement is not just smart policy – it’s the right thing to do,” said Governor Cuomo. “In a matter of days, Superstorm Sandy turned millions of lives upside down, and many people are continuing to put back the pieces of what was lost. They deserve our full support, and I am urging HUD Secretary Castro to help us build back better.”
“Governor Cuomo’s long term recovery efforts for Sandy, Irene and Lee, have been extremely successful, in part because of New York State’s strong, productive partnership with HUD,” said Jamie Rubin, Commissioner of New York State Homes and Community Renewal. “Waiving the duplication of benefits requirement in these cases is public policy that makes sense for both the Federal and State government, in terms of time, money and precious resources, which must continue to be directed to rebuilding resilient communities. Importantly, our mission is also to quickly and effectively serve the homeowners who live in these communities and experienced Sandy’s devastating effects first-hand, which we believe is best accomplished by sparing them additional hardship.”
“Enforcing the Duplications of Benefits requirement in this instance is patently unfair to these particular Superstorm Sandy victims, who have already waited long enough to be adequately compensated for their storm damage,” said Lisa Bova-Hiatt, Interim Executive Director of the Governor’s Office of Storm Recovery. “It is clear there is no reasonable procedure for administering these funds and the cost in both staff time and resources allocated far outweigh any potential recoupment New York State might achieve on behalf of HUD.”
Federal storm recovery funds granted through HUD’s Community Development Block Grant – Disaster Recovery program to regions affected by Superstorm Sandy, Hurricane Irene and Tropical Storm Lee are regulated by the Robert T. Stafford Disaster Relief and Emergency Assistance Act ensuring that homeowners do not receive multiple federal benefits for the same purpose.
The NY Rising Housing Recovery program has provided nearly $800 million to approximately 11,000 homeowners in accordance with these guidelines, deducting federal funding including FEMA and National Flood Insurance Program grants from the total NY Rising award, before homeowners complete the program.
Recent legal challenges to FEMA/NFIP and new cases brought before FEMA for reassessment, will now require homeowners who receive settlements or additional monies, to potentially return funds to the NY Rising program. This process would create an administrative burden to numerous government agencies, and pose a significant financial burden and additional delay to homeowners who have suffered for nearly three years while recovering from this devastating storm.
The Stafford Act permits the waiver of the Duplications of Benefits requirements when the head of an agency considers it to be in the best interests of the federal government. There are 902 individuals in New York State who have sued FEMA to receive an additional flood insurance payout totaling more than $45 million, as part of the NFIP.
Average awards for homeowners are approximately $20,000, with as much as 60 percent deducted for attorney fees and expenses. Further mandatory deductions potentially include payments to homeowners’ mortgage companies, the Small Business Administration to payback post-storm loans, as well as other third party lenders, grantors and insurers. Once these repayments are established on a case-by-case basis, NY Rising would then have to recalculate each of the 902 recovery awards, and then deduct the settlement balance, which could range from $0 to $8,000, as a duplication of benefits. The recoupment to New York State is potentially less that the cost of administering this process, which is estimated at $1.5 million in staff time and resources.
Moreover, there are at least 3,900 individuals in New York who have asked FEMA to re-open their NFIP claims, hoping for an additional NFIP award. If these individuals receive additional NFIP funds, they will be also be subject to paying legal fees, mortgage companies and the Small Business Administration first, as well as all of the other third parties mentioned.