After Sandy, homeowners applied to FEMA for immediate relief. FEMA can only provide up to about $32,000 in individual assistance, so in major disasters like Sandy, other federal programs are necessary to help people repair and rebuild their homes. FEMA advised applicants who exhausted their assistance to apply to the U.S. Small Business Administration (SBA), which provides low-interest disaster recovery loans. Only after receiving the SBA loan did many New Yorkers learn that their application to SBA made them ineligible to receive grants from Build it Back, the City’s HUD-funded disaster recovery program.
This resulted in a major inequity in Sandy recovery: of two neighbors with the same level of damage and similar financial situations, one may have received free grant money from Build it Back while another owed tens of thousands of dollars to SBA for a long-term loan. This unfair and unjust outcome impacted thousands of Sandy victims all over New York City.
Before Sandy, assistance applicants were permitted to use grants to repay their SBA loans. In 2011, HUD issued a rule forbidding the practice during future disasters. When drafting the post-Sandy aid bill, Congress had the opportunity to override HUD’s rule, but did not do so.
Also included in the measure were two other reforms Donovan recommended in partnership with Borough President Oddo and Holly Leicht. The first involves environmental reviews. Before Build it Back could begin work repairing homes, the City had to conduct environmental reviews of each home in the program. This requirement was expensive and time-consuming and contributed to Build it Back’s delays. The reform requires an overhaul of post-disaster environmental review regulations and an accounting of the costs associated with the current rules.
The second reform is to the way homeowners apply for disaster assistance. After Sandy, FEMA applicants had to prove their eligibility by producing citizenship documents, multiple forms of identification, and documents to prove their residency. When applying to SBA and Build it Back for assistance, the same applicants often had to re-produce the same paperwork to re-confirm their eligibility. Gathering the necessary documents after losing a home is challenging enough, but having to re-submit the same paperwork over and over again added unnecessary red tape and delays to the process. This reform requires an analysis of how multiple federal agencies can streamline the application process, hopefully resulting in one simple, all-encompassing eligibility portal.
BP Oddo said, “The 'recovery' after the storm should not be more painful and cause more heartache than the storm itself. Sadly, that is what many Staten Islanders experienced after Sandy. I am proud that the intelligent and critically important work done by former HUD Region II Director Holly Leicht, which Borough Hall co-sponsored and supported, was shepherded by Congressman Donovan into reality. As I have said numerous times over the last several years, mistakes were made early, made often, were compounded, and were repeated. Holly's work identified genuine course corrections to prevent them from being a problem the next time such a natural disaster strikes. Our government has to be better across the board in the future. These improvements are a tangible improvement in that direction.”
Congressman Donovan said, “Ronald Reagan quipped that ‘there’s no limit to the amount of good you can do if you don't care who gets the credit.’ The federal rules Congress and the agencies implemented after Sandy were terribly unfair to a lot of New Yorkers, and the reforms I helped pass last week came from months of conversations. Plenty of folks deserve some credit for the fact that once this bill becomes law, no future disaster victim will be burdened with an SBA loan while others in the same situation get free grants. Thank you to Borough President Oddo and Holly Leicht for working with me to get this done.”
The FAA Reauthorization Act passed on April 27, 2018.