Homeowners Eye N.Y. and N.J. Buyout Plans
Some homeowners in New York state, New York City and New Jersey that were hit hard by Superstorm Sandy have a few options. These include rebuilding, which in some cases will require homes to be elevated above flood levels, or accepting a government buyout offer.
There are three separate buyout plans pending—one each from New Jersey, New York state and New York City. Each differs slightly from the others. The plans of both New Jersey Gov. Chris Christie (R) and New York Gov. Andrew Cuomo (D) involve razing the homes they purchase and reverting the land to wetlands, which are expected to protect against future storm surges.
New Jersey qualified in May for $1.83 billion in federal grants for nine affected counties, $300 million of which will go toward an estimated 1,300 home purchases. Offers are expected to be made in July, and closings are to wrap up next summer with owners getting "fair value" for their properties, the Christie administration said in a recent statement. "The process is a way to help people and property get out of harm's way," Christie says.
New York state will spend $400 million on buyouts, but only $171 million has been approved so far. Most of the money will go to eligible homeowners primarily on Long Island. But some funds will flow to upstate communities hurt by tropical storms Irene and Lee in 2011.
The buyouts are voluntary, but the pricing varies; people who live in the most vulnerable areas will get paid the pre-storm value of their homes, with others in drier areas getting less, according to news reports.
In New York City, which was approved for $1.77 billion in grants in May, $720 million will help housing, with an undetermined portion of that dedicated to "acquisitions," city officials say. Homes the city acquires can be resold to developers or others for rebuilding.
"It's a way to avoid having gaps in the community, small lots that don't fit and don't make sense," says Peter Spencer, a city spokesman. But the city can pay homeowners only post-Sandy values for their homes.
Some analysts say that this pricing is to discourage shoreline development, as owners who get only half the pre-storm value for their homes might choose to stay and fix them up instead. But Spencer says that this is not the rationale. In fact, the city will be allowed to make up the difference between the pre- and post-storm values with relocation fees. "In the end people will get fair value for their homes," he adds.
Even so, early indications show that residents will stay put. "What we are seeing so far is a mentality that people want to build back better than before," says Carol Danko, a spokeswoman for U.S. Rep. Michael Grimm (R), who represents Staten Island and waterfront parts of Brooklyn.
Also, New York City and New York state have separate funds and proposals, but there is overlap. The state will purchase tracts of homes in the Oakwood Beach section of Staten Island, which it deems as too vulnerable for rebuilding. So far, almost all of the nearly 200 homeowners there have signed up for buyouts, perhaps in agreement with what Cuomo said in a speech on Staten Island in February: There are just "some places that Mother Nature owns."