New York Homeowners May Have To Repay Sandy ‘Build It Back’ Money

As many as 3,000 New York City homeowners may have to repay federal money used to help rebuild their Sandy-ravaged homes, the Daily News reports.

The bureaucratic nightmare stems from FEMA’s decision to allowed homeowners to reopen flood insurance claims after reports surfaced that insurers had underpaid claims for Sandy victims. The review triggered the U.S. Department of Housing and Urban Development (HUD) to announce it would recoup any funds provided through the city’s Build it Back program from homeowners who win their claims against insurers.

A letter to HUD Secretary Julian Castro, signed by Mayor Bill de Blasio and City Councilman Mark Treyger, head of the Committee on Recovery and Resiliency, called the federal rules “patently unfair.”

“Our primary concern is ensuring that all impacted homeowners return to their homes as quickly as possible. Asking the City and homeowners to stop and re-evaluate their HUD grant funding at this point will divert significant program resources and delay construction and relief for homeowners,” the letter read.

Treyger, who represents Coney Island, one of Sandy’s hardest hit neighborhoods, said HUD’s decision would place Sandy victims back in a bureaucratic morass that recalls the earliest days of the recovery effort.

“The victims of Superstorm Sandy are not just dealing with the aftermath of the storm, but they are really dealing with the aftermath of bureaucracy at its worst,” he said. “Let’s not begin to audit these victims because they did not create the mess that we’re in today.”

Treyger faulted FEMA, which regulates flood insurers, for not providing adequate oversight during the Sandy recovery process. He said FEMA rules, like paying an insurer’s legal fees if they are sued by a homeowner, create incentives for insurance company’s to shortchange disaster victims.

“The insurance companies should be held accountable to pay what they rightfully owe to Sandy victims,” Treyger said. “But rather than put the onus on Sandy victims, let’s put the onus on FEMA.”

FEMA has set a deadline of September 15 for people to request to have their insurance cases reopened.

The HUD announcement comes at a time when the city is beginning to make meaningful headway in its Build it Back program. As of February, 389 houses had been completed, up from zero a year earlier, and 2,482 checks totaling $45 million had been mailed.The HUD announcement could affect as much as one-third of people covered by the program, according to the Daily News.