PHOTO: Gov. Cuomo has asked for a federal Duplication of Benefits waiver for homeowners affected by Superstorm Sandy. Photo Courtesy of Kevin P. Coughlin/Office of the Governor
Gov. Andrew Cuomo late last week requested that U.S. Housing and Urban Development Secretary Julian Castro use his executive discretion to waive the Duplications of Benefits regulation for homeowners affected by Superstorm Sandy.
According to Cuomo’s office, unless waived, the regulation would require impacted New Yorkers who will now be receiving additional funds from the Federal Emergency Management Agency and the National Flood Insurance Program as a result of recent legal settlements to pay back funds granted to them by NY Rising, a participatory recovery and resiliency initiative established to provide assistance to 124 communities severely damaged by Sandy, Hurricane Irene, and Tropical Storm Lee.
“Waiving this requirement is not just smart policy—it’s the right thing to do,” Cuomo said. “In a matter of days, Superstorm Sandy turned millions of lives upside down, and many people are continuing to put back the pieces of what was lost. They deserve our full support, and I am urging HUD Secretary Castro to help us build back better.”
Recent legal challenges to FEMA and NFIP, and new cases brought before FEMA for reassessment, will now require homeowners who receive settlements or additional monies, to potentially return funds to NY Rising. This process would create an administrative burden to numerous government agencies, Cuomo said, and pose a significant financial burden and additional delay to homeowners who have suffered for nearly three years while recovering from this devastating storm.
The Stafford Act permits the waiver of the Duplications of Benefits requirements when the head of an agency considers it to be in the best interests of the federal government. There are 902 individuals in New York State who have sued FEMA to receive an additional flood insurance payout totaling more than $45 million, as part of the NFIP.
Average awards for homeowners are approximately $20,000, with as much as 60 percent deducted for attorney fees and expenses. Further mandatory deductions potentially include payments to homeowners’ mortgage companies, the Small Business Administration to payback post-storm loans, as well as other third-party lenders, grantors and insurers. Once these repayments are established on a case-by-case basis, NY Rising would then have to recalculate each of the 902 recovery awards, and then deduct the settlement balance, which could range from $0 to $8,000, as a duplication of benefits. The recoupment to the state is potentially less that the cost of administering this process, which is estimated at $1.5 million in staff time and resources.
Moreover, Cuomo said, there are at least 3,900 individuals in New York who have asked FEMA to re-open their NFIP claims, hoping for an additional award. If these individuals receive additional NFIP funds, they will be also be subject to paying legal fees, mortgage companies and the Small Business Administration first, as well as all of the other third parties mentioned.
“Enforcing the Duplications of Benefits requirement in this instance is patently unfair to these particular Superstorm Sandy victims, who have already waited long enough to be adequately compensated for their storm damage,” said Lisa Bova-Hiatt, interim executive director of the Governor’s Office of Storm Recovery.
By Forum Staff
