More than 3,000 houses along Long Island's South Shore and barrier islands have been declared substantially damaged because of superstorm Sandy, a key designation that triggers rebuilding requirements in the floodplain.
Owners of these homes who fail to meet the tougher codes may face financial penalties and insurance-rate increases -- consequences that could wash over their entire community.
The number of substantially damaged residences, based on a Newsday survey of two dozen towns and villages in the devastated areas, is likely to rise because more homeowners are expected to come forward now that state money is available for rebuilding, officials said.
The homes are among more than 50,000 on Long Island, mostly on the South Shore, that the state has estimated were destroyed or damaged when Sandy struck on Oct. 29, 2012.
The declaration of substantial damage -- meaning a structure sustained damage of 50 percent or more of its pre-storm market value -- is made at the local level and is crucial both for homeowners and municipalities.
For homeowners, the finding dictates how much federally funded programs -- such as the New York Rising Housing Recovery Program or the Federal Emergency Management Agency's Individual Assistance Program -- will contribute toward rebuilding and repairs.
For communities, the damage designation means stringent requirements for rebuilding in the floodplain, incorporating FEMA and New York State building-code standards.
Meeting those standards often translates into a requirement to elevate buildings to certain heights to protect against future storm damage -- and is necessary to get affordable flood insurance. Other options, considered more extreme and often more costly, are relocating the home to higher ground, or razing it and rebuilding to code.
Failure to enforce building codes puts municipalities at risk of sanctions by FEMA and state authorities, who will return to storm-damaged localities in coming years to examine how rebuilding has occurred and whether it adheres to post-Sandy requirements.
FEMA, in conjunction with its state partners, conducts such on-site reviews -- called Community Assistance Visits -- at least every five years as part of the National Flood Insurance Program. Officials refer to the reviews as "CAVs" for short.
Violations can mean higher insurance premiums for all residents in a municipality. In extreme cases of noncompliance, suspension altogether from the National Flood Insurance Program is possible, affecting all residents of the municipality.
Insurance, costs at stake
"The federal government gives us no leeway," said Lou Carnovale, the Town of Hempstead's chief plans examiner. "People must comply" with code requirements, he said, citing potential loss of flood insurance for homeowners.
"If you have a mortgage that's federally secured, you must have it [flood insurance]," Carnovale said. "That's why we have to be tough on this."
The town has declared 521 homes substantially damaged, and officials estimated another 500 building-permit applications could be received from homeowners wanting to elevate with money from NY Rising, town spokesman Michael Deery said.
Rebecca Furst, Hempstead Town's floodplain manager, said most homes in the town that are being raised are in Bellmore, Merrick, Oceanside and Seaford.
Along the South Shore, the pressures to meet building codes are complicated by other Sandy-related fallout, interviews with scores of local officials showed. They cited concerns that sometimes are in conflict: the desire to ensure that rebuilding mitigates against damage from future storms, dismay about the costs homeowners face in complying with local codes, and annoyance with the long delays residents have faced in getting funds for rebuilding.
The number of Long Island homes declared substantially damaged has not been released by any government entity.
Nassau and Suffolk county officials said they did not have such figures. The state Department of Environmental Conservation, which emailed local officials as far back as February requesting information on substantial damage figures, would not provide the information, saying the details they have received were incomplete.
Jon Kaiman, the governor's special adviser for Long Island Storm Recovery, said he could not immediately determine how many among the 10,000 completed applications to NY Rising were from homeowners whose houses have been declared substantially damaged.
More than 2,900 applicants on the Island had received $97.3 million in reimbursement checks from the program as of last week. It was not clear how many of those checks went to owners of homes declared to be substantially damaged.
Newsday's survey showed that no single system of damage assessment has been used in the towns and villages along the South Shore and the barrier islands, though many localities said they used FEMA's Substantial Damage Estimator computer software as part of the process.
Many towns and villages, after initial field inspections in the weeks after the storm, sent out their own personnel, usually in response to homeowner requests. In others, FEMA staff accompanied local officials.
The Town of Oyster Bay differed from most, leaving the assessment task to a homeowner's licensed architect as part of the building permit process.
"We, as a municipality . . . do not have the wherewithal to say a house is substantially damaged," said Frederick Ippolito, the town's commissioner of planning and development. "When that architect is going to come here, that license is at stake, his seal is at stake. When he does a set of plans and puts a number [of damage] on it, that's a for-real thing."
Waiting to file
Officials in the majority of localities surveyed by Newsday said they waited for homeowners to request determinations of substantial damage. And in many cases, residents made such requests so they could apply for the federal government's Increased Cost of Compliance coverage -- a one-time payment of up to $30,000 from the National Flood Insurance Program to help with the cost of home elevation, razing or relocation.
FEMA does not require a uniform method of assessment. But both FEMA and state officials noted that as structures are rebuilt, adherence to building codes is essential.
"Each community may do it a little bit differently, based on their staffing," said Bill McDonnell, FEMA's hazard mitigation outreach coordinator for Region II, which includes New York. "They can do it by assessing damage [themselves], or by scrutinizing the [building] permit."
"The only entity that declares homes substantially damaged is the municipality," McDonnell said. "If they are allowing people to rebuild to lower standards, they are not in compliance with the National Flood Insurance Program. They jeopardize their status."
Kaiman also said the building codes are paramount. As a point person with NY Rising, Kaiman helps oversee disbursement of $1.77 billion the state has received so far from the U.S. Department of Housing and Urban Development's Community Development Block Grant disaster recovery program to assist homeowners, businesses and municipalities for "unmet needs" in rebuilding efforts.
"Everyone has to go by the building codes," Kaiman said. "Everyone who applies for our program is required to obtain local building permits and meet all zoning and state building codes, like any other construction."
Local and state authorities who are working with localities or otherwise observing their work would not speculate on whether some substantially damaged homes have been overlooked by local authorities, stressing instead the importance of adhering to building codes to keep rebuilding from Sandy on track.
Most claims in Long Beach
Among communities along the South Shore that responded to Newsday's survey, Long Beach tallied the largest number of substantially damaged homes, at 1,065 -- a number city officials said was likely to rise. The city was among a handful of Long Island communities that had FEMA's help in conducting substantial-damage assessments.
"There were very few homes that did not get damaged during the flooding," said Scott Kemins, Long Beach's building commissioner. He noted, however, that newer or updated homes built to new FEMA codes before Sandy struck "had no structural damage, no utility damage."
That, FEMA and other officials said, is the purpose of the floodplain codes. In New York State, new homes or those undergoing substantial improvement must be 2 feet above "base flood elevation." FEMA defines this as "the computed elevation to which floodwater is anticipated to rise" from a "base flood" that has a 1 percent chance of equaling or exceeding that level in any given year. Base flood elevations are shown on Flood Insurance Rate Maps.
Post-Sandy, towns and villages on the Island have waived local height restrictions on buildings, clearing the way for residents to raise their homes to comply with building codes.
Freeport, which has declared 130 homes to be substantially damaged, has gone further, seeking state approval of an ordinance that would mandate elevation another 2 feet above the state requirement.
Joe Madigan, Freeport's superintendent of buildings, put it bluntly: "You're going to have to build these homes at higher elevation after Sandy, to make them sellable."
FEMA officials said Long Island can expect a visit from FEMA or state officials acting on its behalf to review the rebuilding process and determine whether the rebuilding is in compliance with floodplain building code standards.
Since 1986, FEMA has placed 124 communities nationwide on notice that they would be put on probation if they didn't correct program deficiencies or code violations, agency spokesman Dan Watson said in an email. Of those, 65 actually were placed on probation. Currently, four communities are on probation and 28 are suspended from the National Flood Insurance Program, he said.
The city of Gulfport, Miss., which was decimated by Hurricane Katrina in 2005, has had repeat experience with Community Assistance Visits that found scores of code violations.
Gary Anderson, a Gulfport deputy building official, said it can be a long process -- "I'm talking about a couple of years" -- to bring code violations into compliance. The city has had two post-Katrina reviews, in 2006 and 2011.
Each of the visits to Gulfport determined there were about 100 houses in violation of the building code, Anderson said. "We were not very favorable people at that time," he said, referring to how residents felt about city officials requiring them to fix code violations.
"We were never penalized by FEMA," Anderson continued. "I sent them a report just about weekly showing the addresses and what we were doing to bring them into compliance . . . and we just kept working it until they were all removed from the CAV list."
Probation spurs fixes
When a locality is placed on probation, a potential penalty is a $50 surcharge added to flood insurance premiums for all residents in that municipality.
If probation -- or the threat of it -- is not successful in prodding a municipality to make residents fix code violations, the community can be suspended from the flood insurance program. That has repercussions for residents with mortgages, and could imperil their ability to sell their homes, experts said.
Suspension from the flood insurance program means "no new or extended flood insurance policies may be sold, and there are limitations to certain types of federal disaster assistance," Watson said.
McDonnell said FEMA works closely with municipalities to correct violations so they are not suspended.
The importance of adhering to floodplain codes is safety, said Chad Berginnis, executive director of the Association of Floodplain Managers, a professional group based in Madison, Wis.
Any home that does not meet floodplain codes "will become much harder to sell in the future because it was substantially damaged," he said. In addition, people who do not elevate their homes face much higher flood insurance premiums.
In the Village of Mastic Beach, where 251 homes have been declared substantially damaged, higher costs will hit a vulnerable population, Mayor Bill Biondi said.
"A lot of houses along the waterfront are owned by seniors," he said. "If they're going to have to rebuild, they're going to have to rebuild in the right way and elevate. If they don't, their insurance is going to skyrocket."
Even before taking damage from Sandy into account, the Biggert-Waters National Flood Insurance Reform Act of 2012 will mean higher insurance rates for some homeowners, because the law phases out subsidies to take into account a location's "true flood risk."
A FEMA brochure gives this example: A single-family, one-story home 4 feet below base flood elevation could face an annual insurance premium of $9,500; for a home at base flood elevation, that cost could be $1,410; and for a home at 3 feet above base flood elevation, $427 annually.
The Letterman family, in Babylon Village, decided to rebuild. Sandy's floodwaters swept away the two-story, four-bedroom house, built in 1927, that Jane, her husband, Eric, and their three children had called home for 16 years. The mortgage had been paid off.
"We lost 100 percent of the house and everything we owned," said Jane Letterman, 56. "This was our dream home."
The village responded rapidly to their plight, said Letterman, a real estate agent.
"As soon as I asked for it, we got the inspection" from village officials, she said. A substantial-damage determination quickly followed.
The Lettermans received the maximum $250,000 payout from their insurance company, plus another $34,610 for contents that were ruined. The family has applied to NY Rising for more assistance to cover unmet needs.
Meanwhile, their new home is being built on the property, with pilings installed in October. The building code requires elevation of 9 feet, but she and her husband opted to go up 14 feet "to be safe."
The couple, along with a teenage daughter who still is at home, are renting an apartment in North Babylon. Jane Letterman said she strives to keep an "upbeat attitude."
"You have absolutely no choice. You could either run into bed and pull the covers over your head, or put a smile on your face and move on," she said.
Officials in many municipalities said they have met with homeowners to make clear when home elevation is required.
Architect James Prisco, who has helped rebuild several Sandy-damaged homes, and several building inspectors pointed out how a house's size can affect whether it meets the 50 percent threshold to be declared substantially damaged.
He and others made the hypothetical point that a single-story ranch in a flood-ravaged area would be more likely to be declared substantially damaged than a two-story house in the same area, because of the effect that the two-story home's larger square footage would have in the damage calculation.
As a result, the owner of the two-story home may "have the option of leaving their house at the base [elevation] level," the Garden City-based architect said -- even if that home remains vulnerable to flooding.
FEMA's McDonnell said while rebuilding to floodplain standards relates to structures that were substantially damaged or to new construction, homeowners whose residences had lesser damage should consider meeting more stringent standards because of the higher insurance rates.
"It may behoove them to meet tougher codes," McDonnell said, "so they can become more resilient."