On Tuesday, January 29, 2013, President Obama signed the Disaster Relief Appropriations Act (HR152) providing $16 billion in funding to the Department of Housing and Urban Development (HUD) Community Development Block Grant Disaster Recovery (CDBG-DR) program in order to help affected States respond to and recover from the severe damage caused by Superstorm Sandy. On March 5, 2013, a Notice was published in the Federal Register (Docket FR-5696-N-01) allocating $1,829,520,000 of those funds to New Jersey. The Secretary of HUD made the initial funding award based on data from FEMA and SBA, which was used to determine the areas of greatest need in the region impacted by Superstorm Sandy. It is expected that there will be additional allocations of CDBG-DR funds to New Jersey in the coming months and programs will be developed accordingly.
To obtain the funds from the initial funding award, New Jersey submitted an Action Plan to HUD detailing the proposed use of funds, including criteria for eligibility and how the use of these funds will address disaster relief, long-term recovery, restoration of infrastructure and housing and economic revitalization in the most impacted and distressed areas.
The State worked diligently to craft the most effective Action Plan and released it publically on March 12, 2013. The Action Plan was subject to a seven-day public comment period which ended March 19, 2013. The final Action Plan, which was submitted to HUD on March 27, 2013, included the public comments that were submitted along with the State’s responses. On April 29, 2013, the Christie Administration received approval from HUD to move forward with the Action Plan. The State of New Jersey is working diligently to implement programs under the Action Plan to help homeowners, renters businesses and communities impacted by Superstorm Sandy.
HUD required that an Action Plan be submitted and approved before the State of New Jersey could receive any CDBG-DR funds. As prescribed by HUD in the Federal Register Notice, a state’s Action Plan must outline how the State will utilize its allocation of federal funding to help homeowners, renters, businesses and communities impacted by Superstorm Sandy. The Plan submitted by the State and approved by HUD sets forth New Jersey’s proposed programs to address housing and economic recovery needs, as well as infrastructure needs.
While approval of the Action Plan was pending, the State moved diligently to finalize all program designs and hire the contractors needed to implement the programs in order to enable funds to reach residents as quickly as possible. The State continues to work to put in place the program infrastructure needed so that programs can begin operating as soon as possible. However, this does not mean people will receive financial assistance right away. For example, information will have to be reviewed to determine a person’s eligibility for funding, federally mandated environmental reviews will be needed. The State is taking every step to expedite the application development process and distribute aid as quickly as possible.
Under the Action Plan, the monies from just the initial federal allocation will assist more than 26,000 homeowners, more than 5,000 renters and more than 10,000 businesses, as well as local governments.
In New Jersey, HUD mandates that 80% of the CDBG-DR funds be spent in the nine most storm-impacted and distressed counties: Atlantic, Bergen, Cape May, Essex, Hudson, Middlesex, Monmouth, Ocean, and Union. Other communities will also benefit from the Action Plan’s contemplated programs.
HUD elected not to make a direct allocation to local governmental entities in New Jersey. Instead, the funds were allocated to the State and will be administered by the NJ Department of Community Affairs.
HUD has allowed CDBG-DR funds to be used as matching funds for other federal programs when used to carry out an eligible CDBG Disaster Recovery activity, including those funded by FEMA. For example, if a federal program requires a 25% match, the locality must provide 25% of the total program costs, which is often a strain on local budgets. A program for match assistance outlined in the Action Plan will help alleviate the match required to be met with local government funds. A program to fund public services and a code enforcement program will also relieve the increased costs faced by local governments as a result of the impact of Superstorm Sandy.
The Appropriations Act requires that 50% of CDBG-DR funds must be used for activities that benefit persons of low- and moderate-income. The provision can only be waived by the Secretary of HUD, and even then, only when a compelling need is specifically identified.
The State is required to prioritize serving low and moderate income households in its housing recovery programs. However, in order for the State to serve those whose income is above 80% of the area median income, there are funds available in the Rehabilitation, Reconstruction, Elevation and Mitigation (RREM) and Housing Resettlement programs for those who fall outside of the HUD definition of low-to-moderate income.
As part of the Christie Administration’s continued commitment to the most vulnerable, a direct allocation of funds will be made to the NJ Housing and Mortgage Finance Agency to operate a fund, similar to the NJ Special Needs Housing Trust Fund, dedicated to the construction of permanent supportive housing across New Jersey for special needs populations. The Action Plan also has an array of rental programs that will benefit people with special needs. It is anticipated these programs will add more than 1,000 housing units over the next two years for special needs households.
HUD requires that the state develop a needs assessment to identify the unmet needs in housing, infrastructure and the economy. Programs are designed to demonstrate a proportionate allocation of resources to areas and categories of greatest needs. These determinations take into account factors such as income, extent of damage, and location of property (in or out of a flood zone).
HUD does not allow CDBG-DR funds to be utilized for second homes or vacation homes.
Yes, funding in the Rehabilitation, Reconstruction, Elevation and Mitigation (RREM) Program will provide eligible homeowners up to $150,000 for reconstruction, rehabilitation, elevation and/or mitigation of damaged homes. Priority will be given to homes in the nine most impacted counties that are deemed “substantially damaged” (damages exceed 50% of a home’s assessed value) by a municipality’s floodplain manager.
HUD has specified that 80% of the funds must be spent in the most impacted nine counties, which include non-coastal communities in Bergen, Hudson, Essex, Middlesex and Union. The remaining funds can be utilized in other areas impacted by the storm.
To address New Jersey’s housing needs, the State will undertake a number of initiatives including developing adequate, storm-resistant housing that will meet building standards and incorporate mitigation measures including green technologies where feasible. For example, the Action Plan’s rental housing programs will promote sustainable communities and help to protect the environment by requiring the incorporation of green building technology and energy efficient development. When applicable, replacement and new construction will meet the 2009 Residential International Building Code and the green building standards by requiring compliance with ENERGY STAR™. Also, housing rehabilitation work will adhere to such standards as the HUD CPD Green Building Retrofit checklist when applicable. All reconstruction, new construction and rehabilitation must be designed to incorporate principals of sustainability, including water and energy efficiency, resilience, and mitigating the impact of future disasters.
The State has designed several programs aimed at assisting in the replacement of rental units including those for low and moderate income renters. It is expected that approximately 5,000 affordable rental units will be created as a result of programs in the Action Plan.
The State has proposed a $25 million program for a Tourism Marketing Campaign that will promote storm-impacted businesses and shore communities by letting the nation know that New Jersey is recovering and open for business. The campaign would also encourage New Jerseyans and tourists to shop locally. The Administration has requested, and HUD has approved, a special waiver to allow this program which will provide much needed assistance to the vital tourism industry that is critical to our shore communities.
Many direct jobs will be sustained and/or created in the implementation of local rehabilitation, reconstruction and elevation of homes and rental units. Additionally, businesses that are recipients of grant and loan funds administered by the New Jersey Economic Development Authority will be able to retain and hire employees, particularly in the shore-impacted communities striving to re-open and be fully operational for the summer season. Currently we have no definite estimaties, but thousands of jobs should result from the programs being funded in the Action Plan.
Yes. There are several controls in the Action Plan’s policy and procedures to control waste, fraud and abuse. This includes the requirements for detailed procedures to detect and prevent waste, fraud and abuse and avoid duplication of benefits. In addition, Executive Order 125 signed by Governor Christie, establishes several additional safeguards, including an Accountability Officer within each department. The New Jersey Sandy Transparency Portal was created to provide public access to all State contracts for the allocation and expenditure of federal disaster relief funds, including contract vendor information. In addition, the portal lists the available federal funding streams and funding criteria and tracks the federal funding allotment of disaster relief funds in New Jersey. There will be staff at all levels, including at HUD and the State, to ensure transparency throughout the Sandy recovery.
No. While individual tax circumstances may vary, Homestead Rebate and Senior Freeze eligibility should not be affected by the receipt of CDBG –DR funds.