In this week's WAVE - Build It Back… Slowly

Build It Back… Slowly

Reimbursements Could Be Years Away

By Kevin Boyle...Nov. 15th, 2013

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Holding your breath for Build It Back money could be hazardous to your health. Those hoping for reimbursements for out of pocket money used to repair homes could wind up waiting three or four years from now, or almost five years from the storm, if the money arrives at all.

It’s all about priorities, says Kathryn Mallon.

Mallon is the new head of the Build It Back program, replacing Brad Gair. Previously, Mallon was director of the Rapid Repairs program. She also doubles as a deputy commissioner at the DEP.

Mallon addressed a crowd in the Colony Theater in Breezy Point on Wednesday night. Using a power point presentation to present an overview of the Build It Back program, Mallon said some of the numbers were yet to be validated. She said, for instance, that in Breezy Point alone there were 1800 registrants for the program and that 107 houses were candidates for repair, 179 for repair and elevation and 1,000 homes were candidates for a full rebuild.

These numbers are likely to change when damage assessments are done by Build It Back reps. Mallon said there were 26,000 registrants for the program overall and that intake forms and documentation collection (which are used to determine what priority category homeowners fall into) would be completed “by the middle of next year.”

Mallon said Build It Back must follow HUD guidelines in dispensing money and as of now there is not enough money to completely fund rebuilds, rehabs, and reimbursements. The first pool of money that came in the form of CDBG (HUD grant money) was $640 million. Mallon said to Build It Back would “need a little over” $1 billion to cover “just Priority 1 cases.”

HUD requires prioritizing money allocation based on household income and to a “lesser degree, damage to the home.” Mallon said the calculations are based on AMI (Area Median Income). If households can claim to have less than 80 percent of AMI they are put in Priority 1 for rebuild and/or repair.

The example Mallon used was a household of four people. To qualify, to be “less than 80 percent” of AMI, the household income would have to be less than $68,700. Household income includes all people earning a W-2 tax form with the exception of minors and full-time students.

The median income in this region according to HUD is $85,900 for a family of four. See the accompanying chart for AMI guidelines.

Although income is the main determining factor, homeowners who need a full rebuild – determined after an assessment — can earn up to 165 percent more than AMI and still be considered Priority 1.

Priority 2 is the repair or rehab category. If a house does not need to be fully rebuilt it will be considered a rehab job. Money for these homes will only be allocated after all Priority 1 needs are met. This includes possible environmental reviews, permits, and complete construction.

As stated, Mallon said, Priority 1 will cost more than a billion dollars. As of now, Build It Back has just $640 million. The shortfall is expected to be covered from a second tranche of Sandy money that just arrived from HUD. The exact amount earmarked for housing has yet to be determined. Using Mallon’s estimates, another $400 million will be needed from this second round of money to cover Priority 1 cases only. These Priority 1 cases, many of which will be full rebuilds will take as long as one and a half years to complete from start date. No Priority 2 money will be spent until all Priority 1 jobs are completed and paid for.

If monies remain, Priority 2 cases, will come under consideration in 2015 or 2016 or possibly beyond.

Mallon said the total amount of money needed to pay all registrants would be approximately $2 billion. But Sandy payouts in tranche 1 and 2 will be less than $2 billion. There will be unmet claims. Mallon said a third tranche is possible but many variables must be considered (including other disasters).

Assuming repairs are covered in 2015 or 2016 or later, and some money is still available Build It Back will then consider reimbursements.

Clearly, it could be a long wait. As for homeowners who paid for repairs themselves instead of using Rapid Repairs and now hope to be reimbursed, they may have to hold onto their hope until 2017 or 2018. Mallon urged people to keep receipts.