Federal Government Promises Expedited Review of State’s Plan to Utilize $1.83 Billion in Community Development Block Grant Funding for Superstorm Sandy Recovery
Trenton, NJ – The Christie Administration today submitted the Community Development Block Grant (CDBG) Disaster Recovery Action Plan to the U.S. Department of Housing and Urban Development (HUD) for review and approval. The Action Plan outlines how the State will utilize $1,829,520,000 in federal funding to help homeowners, renters, businesses and communities impacted by Superstorm Sandy.
As part of the grant process, members of the public had an opportunity to comment on the Action Plan during a seven-day period that closed March 19. The Plan submitted to HUD includes the public comments that were submitted along with the State's responses. The comments informed the final Action Plan that was sent to the federal government, including suggestions and revisions that assisted the Department of Community Affairs (DCA) in establishing a process to better identify public housing needs, to better explain how citizen participation helped develop the Action Plan, and to provide clarity on what "first-come, first-served" means in the context of applicable programs.
"The programs designed as part of the Action Plan will help address the unmet needs of Sandy-impacted homeowners, renters, and business owners as they rebuild their lives and recover from their losses," said Governor Christie. "I thank HUD Secretary Shaun Donovan for his assurance of a quick review so that we can begin getting relief out to the many people who were devastated by Superstorm Sandy."
Pursuant to HUD guidelines, the Action Plan focuses predominantly on the nine counties most affected by the storm (Atlantic, Bergen, Cape May, Essex, Hudson, Middlesex, Monmouth, Ocean, and Union) and on assisting low-to-moderate-income families. Following HUD approval, more than 26,000 homeowners, more than 5,000 renters and more than 10,000 businesses will be helped, as well as dozens of local governmental units.
HUD has up to 45 days to approve the Action Plan, but has stated that it intends to work closely with New Jersey to conduct an expedited review process. Therefore, the State anticipates that the Action Plan should be approved in April.
"While HUD is reviewing the Action Plan, we will move diligently to finalize all program designs and put in place the framework needed to implement the programs in order to enable funds to reach residents and businesses as quickly as possible," said Richard E. Constable, III, Commissioner of the NJ Department of Community Affairs, which will administer the distribution of CDBG Disaster Recovery funds for New Jersey. "We recognize people and communities are hurting and we are working literally night and day to get aid out the door."
Assisting homeowners in the reconstruction, rehabilitation, and elevation of their homes and helping them prepare for future storms is a top priority of the Christie Administration’s rebuilding efforts and, if approved, $825 million will be allocated to these efforts with this first phase of funding. The Action Plan will also set aside $254.5 million to meet the needs of displaced renters whose primary residences were damaged by the storm. Through the Plan, the State will leverage CDBG Disaster Recovery funds to create approximately 5,000 affordable rental units for low-to-moderate-income families, including those with special needs.
Additionally, economic recovery is a focus of the Action Plan. To help New Jersey businesses, the State will set aside $500 million of the CDBG Disaster Recovery allocation for the New Jersey Economic Development Authority (EDA) to administer such activities as small business grants, community revitalization programs and a tourism marketing campaign.
"The EDA hopes to be able to get assistance to impacted businesses as quickly as possible to ensure they have the capital they need to resume, maintain or grow their operations," said EDA Chief Executive Officer Michele Brown. "We are working to develop programs and a marketing strategy to best meet the needs of our businesses and communities and ensure that the world knows New Jersey is open for business."
In general, CDBG Disaster Recovery funds are intended to support local rebuilding efforts after private insurance, Federal Emergency Management Agency (FEMA) grants and other available sources of funds have been applied. HUD also requires that at least 50% of the funding focus on low-to-moderate-income households.
A copy of the Final CDBG Disaster Recovery Action Plan as submitted to HUD can be found here: http://www.nj.gov/dca/announcements/pdf/CDBG-DisasterRecoveryActionPlan.pdf
An overview of the Action Plan can be found below:
Taking Action To Distribute The Necessary Resources For The Rebuilding Process
What New Jersey Residents Need To Know About The Christie Administration’s Proposed First Community
Development Block Grant Disaster Recovery Action Plan
“This plan puts into motion the specific actions we’ve been designing to get relief out as quickly as possible to our Sandy-impacted homeowners and businesses – to reconstruct, rehabilitate and elevate homes, and to get over hurdles for our small businesses to get up and running again. These programs have been carefully, but quickly designed to fill the unmet needs faced by our residents to rebuild in a safer, more enduring way, to strengthen our impacted local economies going into this summer, and to help preserve the unique character of our shore communities as we’ve known them. With this first round of funding, we will also begin an aggressive marketing effort to let people both in the region and across the country know that New Jersey is rebounding and that the Jersey Shore will be open for business this summer.”
– Governor Chris Christie
The Christie Administration today unveiled its proposed Community Development Block Grant Disaster Recovery Action Plan, which outlines how the State plans to utilize $1,829,520,000 in federal funding. This is the first phase of Community Development Block Grant funds provided to New Jersey by the U.S. Department of Housing and Urban Development. Additional CDBG recovery funds are expected in the coming months. With this first phase of funding, the Christie Administration is focusing primarily on helping homeowners, renters, businesses and communities impacted by Superstorm Sandy.
- The Action Plan incorporates input from Sandy-impacted communities and stakeholder groups whose engagement will continue throughout the State’s recovery, rebuilding and restoration process, as well as comment from the public.
- CDBG Disaster Recovery funds are intended to address unmet needs not satisfied by private insurance, the Federal Emergency Management Agency, the U.S. Small Business Administration, or other sources.
- The Christie Administration will dedicate over 50% of funding for low-to-moderate-income households, in accordance with HUD guidelines.
- Additionally, per HUD guidelines, 80 percent of the funds will be dedicated to the nine most heavily impacted counties in the state: Atlantic, Bergen, Cape May, Essex, Hudson, Middlesex, Monmouth, Ocean and Union.
- If approved by HUD, the Christie Administration expects that more than 20,000 homeowners, more than 5,000 renters and more than 10,000 businesses will be helped, as well as dozens of local governmental units.
The finalization and submission to HUD of the Action Plan represents an important step in distributing the federal resources necessary to aid New Jersey’s rebuilding by developing the state’s specific plan for how those resources will be spent.
Helping Families Return To Their Homes:
Assisting homeowners in the reconstruction, rehabilitation, and elevation of their homes and helping them prepare for future storms is a top priority of the Christie Administration’s rebuilding efforts. Superstorm Sandy caused an estimated $3.837 billion in damage to houses and apartments throughout the state, with over 86,700 units impacted. The Administration’s Plan proposes a variety of programs to meet the needs of displaced homeowners and renters whose primary residences were damaged by the storm, which include:
- Reconstruction, Rehabilitation, Elevation and Mitigation (RREM) Program: This $600 million program will provide eligible homeowners up to $150,000 to aid reconstruction, rehabilitation, elevation and mitigation of damaged homes. Seventy percent of the funds will be reserved for low-to-moderate-income households.
- Housing Resettlement Program: This program is aimed at Sandy-impacted homeowners who sustained storm damage and who are considering selling or abandoning their property. Funded at $200 million, this program will provide $10,000 grants to eligible homeowners to remain part of the fabric of their communities as they continue the recovery process. Sixty percent of the funds will be reserved for low-to-moderate-income households.
- Blight Reduction Pilot Program: This $30 million program will provide zero-interest forgivable loans to nonprofit and for-profit developers to purchase and rehabilitate foreclosed, vacant or abandoned properties throughout the state. The program will encourage development of affordable homes and rental housing.
- Sandy Home Buyer Assistance Program: Funded at $25 million, this program will provide financial assistance of up to $50,000 to low-and-moderate-income households to purchase a home. Housing created under this program would be affordable to households earning up to 80% area median income.
Supporting Economic Recovery and Revitalization:
Economic recovery and revitalization is also a top priority of the Action Plan to restore communities and promote job growth. Businesses in the 113 municipalities most impacted by Superstorm Sandy incurred $382 million in commercial property loss and another $63.9 million in business interruption losses. To help New Jersey businesses, the Christie Administration is setting aside $500 million in funding for the New Jersey Economic Development Authority to administer the following activities:
- Small Business Grants of up to $50,000 to eligible businesses that sustained physical damage. A $300 million allocation will fund grants that can be used for purposes including rehabilitation, new construction, equipment, inventory, mitigation, refinancing and working capital among other uses.
- No-Interest Loans for Storm-Impacted Small Businesses ranging from $100,000 to $5 million for documented physical damage not covered by other sources. These loans are intended to assist eligible businesses that suffered physical damage, as well as spur economic revitalization by providing funding for expansion and new businesses in storm-impacted areas.
- Neighborhood And Community Revitalization Programs to provide funding of up to $10 million to help communities rebuild commercial areas with public facility improvements such as streetscapes, lighting, and sidewalks and undertake other activities critical to restoring and strengthening local economies, including micro-loans for storm-related damage and loan guarantees as well as façade and code-related improvements.
- A Tourism Marketing Campaign to promote storm-impacted businesses and shore communities by letting the nation know that New Jersey is recovering and that communities are open for business. The campaign funded at $25 million would also encourage New Jerseyans and tourists to shop local, thereby supporting companies that are operational.
In November 2012, the first full month after the storm, approximately 138,000 New Jerseyans filed unemployment claims. The economic development funding in the Action Plan will help to create thousands of jobs and help struggling New Jerseyans get back to work.
Assisting Local Governments And Property Taxpayers:
While the housing and economic sectors are the central focus of this first allocation of CDBG Disaster Recovery funding, the Christie Administration also proposes to use funds to help local governments provide essential services after incurring unanticipated expenses caused by the storm that are not reimbursed by FEMA. The Action Plan proposes to allocate $116 million in funds as follows
- Public Assistance Program: An allocation of $50 million would be used to provide critical funding support to municipalities by helping to subsidize the “local match” for FEMA Public Assistance projects. This will ensure local governments have sufficient resources to continue providing essential services without resorting to tax increases or other measures that may cause further hardship and distress in Sandy-impacted communities.
- Protecting Essential Services For Long-Term Recovery: $60 million would be used to close gaps in funding in FEMA’s Community Disaster Loan Program so that local governments can continue to pay essential personnel in critically important service areas including police and fire services, education, and public works.
- Code Enforcement Grant Program: $6 million in funding would supplement local code enforcement offices with additional personnel, provide an online plan review and permitting process, and enhance the NJ Department of Community Affairs’ continuing education curriculum for code officials to include training in flood hazard mitigation practices and other storm-related code issues.
Providing For New Jersey’s Most Vulnerable Citizens And Protecting Shore Communities:
Governor Christie is committed to helping low-to-moderate income families as well as vulnerable populations recover from Sandy. The Christie Administration is proposing a range of rental housing activities designed to replenish rental housing stock lost to Sandy, rehabilitate affordable rental units left uninhabitable by Sandy, and provide affordable housing for special needs populations.
- Restoration of Multi-Family Housing: $104.5 million will be utilized to provide zero and low-interest loans of up to $120,000 per unit to qualified developers and public housing authorities to facilitate the creation of new permanent housing units. A significant portion of the fund will be used to assist in the development of new permanent, supportive housing for people with special needs.
- Fund for Rehabilitation of Small Rental Properties: Through an allocation of $70 million, the Christie Administration will provide zero-interest, forgivable loans of up to $50,000 per unit to eligible owners of rental buildings with 25 or fewer units that received significant damage from Superstorm Sandy and are partially or completely uninhabitable.
- Predevelopment Fund for Affordable Rental Housing: Provide financing of up to $500,000 to help nonprofit housing developers cover the predevelopment costs of properties that are unsafe, underutilized, or in foreclosure. Projects must help to revitalize communities by facilitating the acquisition, clearance, and preparation of difficult to develop sites. Allocation for the program would be $10 million.
- Affordable Housing Incentives: Through $40 million in funding, this program will provide incentive payments to eligible rental property owners who agree to lease their units to low and moderate income households at affordable rents.
The New Jersey Housing and Mortgage Finance Agency will administer rental housing and homebuyer assistance programs, which would be funded by at least $154 million. It is estimated the Action Plan’s rental development and rehabilitation programs will create 3,000 jobs and $500 million in economic activity.