Property owners and other qualifying individuals in New York City will be given additional time following a disaster to repair and clear their property, without incurring penalties for certain municipal code violations.  New disaster legislation passed by the City Council takes effect August 8, 2016, and applies retroactively to fines imposed after Hurricane Sandy.

Sandy - homes destroyedI’ve posted a detailed summary of new developments here.  In this post, I’ll explain why the scope of protection under one of those laws, Int. 1037, depends on how quickly and effectively the City implements a recovery program following the next major disaster.  The record from Hurricane Sandy is not encouraging, but perhaps the benefit of that experience will produce better results in the future.



A Quick Review of Int. 1037

This law temporarily waives civil and criminal penalties associated with Construction Code violations under two different circumstances: one applies for a period of time following a disaster, the other applies to property enrolled in an official disaster recovery program.  Think in terms of a “time based” waiver, and a “program based” waiver.

Under the time-based waiver, penalties will not be enforced if the underlying violation is fixed within 40 days of a designated “disaster period” – 6 months following a “major disaster,” or 90 days following other natural or man-made disasters.  A “notice of violation” can still be issued during the relevant disaster period, but it will not be enforced so long as the property is brought up to code within 40 days of that time.  The Building Commissioner has authority to waive penalties or authorize additional time for repairs.

Under the program-based waiver, penalties will not be enforced against property covered by an official- disaster recovery program, including property that is “undergoing, or scheduled or under evaluation for work or acquisition through such a program.”

These measures reflect lessons learned from Hurricane Sandy, when penalties were assessed on out-of-code conditions that property owners had no practical ability to remedy.  During the hearings on Int. 1037, Sandy advocates described how these fines burdened low-income home owners who could not afford repair work, could not find a contractor to do the work, or, as in one case, were told by a disaster-recovery official not to have the work done.  More than 50% of home owners who applied for federal assistance after Hurricane Sandy earned $60,000 a year, nearly a third earned less than $30,000.  Municipal fines that often amount to hundreds, and sometimes thousands, of dollars, pose a substantial hardship to these families.

Int. 1037 would avoid some of these situations. It would provide the broadest scope of protection when a disaster recovery program is up and running before the 6 month waiver period expires.  In that scenario, the “time based” waiver would overlap with the “program based” waiver, extending immunity for violations a property owner had yet to remedy.

To benefit the greatest number of people, however, the City must do more than formally adopt a disaster recovery program.  It must vigorously publicize and effectively implement that program in affected areas, giving people an actual opportunity to enroll.  Otherwise, the waiver authorized under Int. 1037 simply will not benefit the population of people that law is supposed to protect.

Hurricane Sandy’s Recovery Debacle

Consider this: New York City launched two major recovery initiatives following Hurricane Sandy.  The first program, Rapid Repair, focused exclusively on restoring heat, hot water, and electrical power so people could shelter in damaged but habitable homes while the government ironed out the details of a long-term reconstruction plan.  The second program, Build It Back, was more comprehensive and offered, among other options, full rehabilitation, structural elevation, or acquisition of property that was beyond reasonable repair.

Hurricane Sandy hit on October 28, 2012, and it took the City 7 months to launch Built It Back.  It makes sense then, that a 6 month “time based” waiver precedes the “program based” waiver under Int. 1037.  With Sandy behind them, the City Council might have thought that would be enough time to jump start recovery after the next disaster.

Build It Back, however, was wholly dysfunctional for the first several months, and didn’t get off the ground in some neighborhoods for years.  A 2014 report issued by the Mayor’s office described red-tape and redundancies so cumbersome that designs weren’t even drawn up on a single property slated for repair or reconstruction under the program in all of 2013.  Many applicants simply gave up, withdrew their application, and did their best to rehabilitate their own homes.  That created additional hardship when contractors disappeared with the owner’s deposit or completed shoddy out-of-code repair work that had to be redone.  Hold this thought – we’ll return to it in a moment.

Moreover, Council Members in support of Int. 1037 testified that constituents in some boroughs still hadn’t even heard of Build It Back as late as January, 2016.  The program apparently was not adequately promoted in heavily impacted areas, and whether it was advertised in languages other than English, as required by a 2008 Mayor’s order, was unclear.

This experience with Hurricane Sandy shows that government officials who design and implement disaster recovery programs (most likely in the Executive Branch), will have to move faster and more effectively next time around if property owners are to fully benefit from the “program based” waiver under Int. 1037.

The Reality of Reconstruction: When More Than Time Is Needed

Recovery programs aside, some might ask, wouldn’t most home owners benefit from the 6 month “time based” waiver under Int. 1037 anyway?  Isn’t that enough time to fix a code violation in property that wasn’t destroyed?

That’s a fair question.  But following a mega-disaster, the answer is typically, “no.”  Low-income property owners can’t afford immediate repairs.  They have next to no savings, and depending on the scale of the disaster, might have lost a job, and therefore their income, for the foreseeable future.  They’ll still have to pay a mortgage though. And find money for food.  FEMA will provide temporary shelter to displaced families, and cash assistance for some of life’s necessities.  But the money won’t last, the housing will end, and there’ll be nothing left to cover the cost of repairing damaged property or continually accruing penalties.

Insurance doesn’t always help either.  Hurricane Sandy damaged and destroyed homes outside of the regional flood zone, which meant that most of the property was uninsured for flood damage.  However, maps used by the federal government to assess the risk of flooding, and determine when flood insurance would be required to get a mortgage, were inexcusably out of date – something that FEMA knew, failed to address, and neglected to inform homeowners about.  As a result, people bought homes they reasonably thought were safe from storm surge.  But they weren’t. They flooded.  And there was no insurance.

Even people who carried flood insurance on high risk properties were left empty handed, though.  Following Sandy, thousands of home owners were bilked out of millions of dollars legally owed to them, despite premiums they paid, on account of rampant fraud in FEMA’s flood insurance program.  Money that could have been used to repair damaged property, instead lined the pockets of third party inspectors who intentionally falsified reports to minimize payouts.

Finally, low-income property owners who manage to scrape together enough money for repairs – most likely borrowing from friends, or running up credit – may have trouble finding a qualified contractor within 6 months to do the work that is required to qualify for the “time based” waiver under 1037.  Before home owners can even catch a breath after a disaster, the government will have probably hired all of the local licensed contractors for official reconstruction projects.  Unlicensed or out-of-state contractors will be happy to help – for a hefty deposit on labor and materials that far exceeds the market rate.  There’s a good chance those contractors take the money without doing the work.  Or they start the work, but don’t complete it.  Or they finish the work, but don’t know, or don’t care, about local code requirements.  Contractor fraud runs rampant following a disaster, and there’s not much recourse when a property owner is issued a citation for an illegal contractor’s shoddy repair work.

I would have voted for Int. 1037 were I on the City Council.  But executive officers who design and implement the next disaster recovery plan are the ones who will determine whether the law reaches New York’s most vulnerable home owners.  There are lessons to be learned from Hurricane Sandy.  Let’s home everyone is listening.

  • Kathleen Bergin

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