Feds waive rule that would have forced Sandy victims to repay recovery funds
CITY HALL -- The federal government will waive a rule that could have forced hundreds of Staten Island homeowners to repay Hurricane Sandy recovery funds.
Thousands of homeowners citywide won't be billed for receiving money for repairs through Build it Back because of a decision announced Wednesday by the U.S. Department of Housing and Urban Development.
As many as 3,000 homeowners citywide, and 829 on Staten Island, could request to have the Federal Emergency Management Agency reopen flood insurance claims. The agency is reviewing National Flood Insurance Program claims after some policyholders accused insurance companies of unfairly assessing damage.
Federal rules say that the city's Build it Back program is only supposed to pay for repairs and funds when insurance has been fully utilized. This meant some homeowners could have been hit with a bill if FEMA determined they are owed more insurance funds.
"These families have suffered enough and shouldn't be further victimized through no fault of their own," HUD's Harriet Tregoning said in a statement.
Sandy victims who receive $20,000 or less from FEMA won't be subject to a duplication of benefits review or collection. To date, about three-quarters of claimants have gotten less than that and won't face possible repayment, officials said.
The decision will have an especially large impact on Staten Island because few borough homeowners are suing their insurance companies and would therefore receive smaller settlements. The city estimates as many as 800 Staten Island homeowners could have the duplication waived.
"These are not the people the feds should be knocking on the door of to pay up," U.S. Sen. Charles Schumer said in a statement praising the decision.
Mayor Bill de Blasio noted, "It would have been unacceptable and unfair to ask New Yorkers to clean up a mess they didn't create."
Those families that receive more than $20,000 in additional flood insurance payments will have a chance to show the money addresses legitimate unmet needs.
Staten Island Rep. Daniel Donovan said that normally federal agencies should "strictly enforce rules" to limit duplication of benefits.
"In this case, though, Sandy victims have been put through the ringer: fraudulent engineering repots, nonsensical SBA loan regulations, and constantly changing guidelines -- all caused by government bureaucracy," Donovan said in a statement. "HUD's rule change finally places the victim first."
Homeowners now have until Oct. 15 to request that their insurance case be reopened by FEMA.