HUD to allow co-ops, condos to get federal Sandy help

Arthur Vercelletto hopes a federal grant will help

Arthur Vercelletto hopes a federal grant will help the Town N Harbor co-ops where he lives. (Feb. 6, 2012) (Credit: Newsday / Thomas A. Ferrara)

Co-op and condominium owners facing huge repair bills for storm-damaged boilers and other shared property will be able to get help from federal housing grants.

The federal Department of Housing and Urban Development will let co-op and condo associations receive aid from the $1.7 billion it is giving New York in Sandy relief funds, a department spokesman said Wednesday.

For co-op and condo associations to be eligible, the state must include them in an action plan it drafts, the spokesman said.


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A spokesman for Gov. Andrew M. Cuomo said the administration will include the associations in its plan. The state intends to submit the plan "in the very near future," well before the 90-day deadline set by HUD, the spokesman said. HUD can then take up to 45 days to decide whether to approve the plan.

Owners of co-ops and, to a lesser extent, condos are constrained by federal rules in the aid they can get for flood damage. The Federal Emergency Management Agency does not give grants to repair co-op and condo developments' common property. By contrast, uninsured or underinsured single-family homeowners can get FEMA grants for big-ticket items such as boilers.

The reason: FEMA considers co-op and condo associations to be businesses rather than groups of homeowners; businesses are not eligible for FEMA grants, but only loans from the federal Small Business Administration.

Making matters worse, co-op owners typically are not eligible to buy federally subsidized flood insurance for their homes, and the federal government sets a $250,000-per-building limit on the flood insurance co-op complexes can buy for common property.

Last month, Sen. Charles Schumer (D-N.Y.) called on HUD to allow New York to use some of its initial share of the nearly $51 billion Sandy aid package approved by Congress in January for co-op and condo associations' common property. The housing grants "will provide much-needed relief to the thousands of families and seniors who live in these buildings," Schumer said in a statement Wednesday.

At the 160-unit Town N Harbor co-op complex in Freeport, residents were informed last month that they would need to pay $800,000 to repair common property.

The company that manages the complex, Hempstead-based Stanan Management Corp., did not return calls.

A federal grant "would take a big burden off us financially," said Arthur Vercelletto, a retired sanitation worker who lives at the complex.

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