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30,000 Sandy Victims Stuck in Bureaucratic Limbo

New York Times reports that the process of obtaining full compensation for losses is deliberately byzantine.

A Sandy-destroyed home in Long Beach's West End. (Photo: Joe Kellard)
A Sandy-destroyed home in Long Beach's West End. (Photo: Joe Kellard)

The New York Times published a lengthy report on the more than 30,000 residents who remain displaced from Hurricane Sandy — from Long Beach to Toms River, New Jersey — and are mired still in mind-boggling bureaucratic red tape and face financial ruin.

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The story highlights a few Long Beach residents, Kathryn Fitzgerald and her neighbors, Anne Walsh and Penny Ryan, on Delaware Avenue. Fitzgerald, whose two-story home was deemed “substantially damaged,” was offered just $71,000 on her federally subsidized flood insurance policy, and she opted to demolish her home, the property of which remains an empty lot. Fitzgerald said:

“This has been a horrendously hard year for me. If I don’t think of this in a way that is going to relieve the anger and upset, then I’ll just go back to crying every day.”

Walsh and Ryan, whose storm-damaged two-story home escaped the “substantially damaged” designation, were thereby not required to elevate their home above ground level but spent $200,000 to restore it and recouped an amount considerably less from flood insurance, the Federal Emergency Management Agency, and New York Rising Program, and now they face considerable debt.  

The Times also reports that in the areas in and around New York City, nearly half of residents who received assistance from the FEMA received less than $5,000, with most of those fund intended to cover housing and other emergency costs in the days and weeks after the hurricane struck. Moreover, government officials say the process of obtaining full compensation for losses is deliberately byzantine, designed to involve several steps and to frustrate efforts to game the system and to minimize fraud.

The story also reports that state officials said last week that they had asked the Department of Housing and Urban Development to allow them to send more than $650 million directly to more than 6,600 homeowners before the end of the year.

Read the full story here.

Mike Cogg December 10, 2013 at 03:50 PM
Here is a question...why didnt FEMA just pay out the $250,000 on each flood policy instead of making this crazy process....seems to me if they just paid "fair value" to get everyone up and running again you wouldnt have to have three to four different places to go for money.... Cause at the end of the day its coming from the Gov't however you slice it....
Mike Cogg December 10, 2013 at 04:02 PM
And if i have to hear the comment one more time "the money is going to start flowing" im going to throw up....
Rory December 11, 2013 at 08:19 AM
Mike; The answer to your question was in the Times article "The process of obtaining full compensation for losses is designed to involve several steps and to frustrate efforts to take unfair advantage, as some were accused of doing after Hurricane Katrina struck in 2005, government officials say. They want everyone to give up and go away, I for one am not going to do that. I have to much invested in my home and my life here to just give up.
Jack December 11, 2013 at 09:45 AM
Unfortunately what happened is that some people overpaid for their homes . Others had subprime mortgages. Therefore they had very little equity in their homes and the insurance companies and even FEMA base their amounts on the value of the home and the equity level. This is what happens during a real estate craze. No one is guarunteed to make a profit in real estate. A similar situation is developing with college student loans. Kids have been fleeced into going to college and indebting themselves with essentially a second mortgage that they might not pay off and received a subpar college degree worth zero in return qualifying them to work in retail.
Mike Cogg December 11, 2013 at 04:12 PM
Ummm no....the insurance payout has nothing to do with the price of property but the amount it cost to rebuild it (contractors)...this is why we all got roughly 50-70k from Insurance cause they made one blanket payout instead of basing it on what it would actually cost to put back together...

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