A third of homes auctioned by NY Rising have been redeveloped

More than six years after superstorm Sandy, about one third of the 509 storm-damaged properties auctioned by New York Rising since 2015 for redevelopment are now finished.

New York State’s storm recovery program funneled hundreds of millions of dollars in federal aid money into programs to buy houses in flood zones to either demolish them for open space or sell them to buyers willing to elevate them or otherwise make them resilient to flooding.

Buyers, many of them contractors and investors, had three years after closing on the houses to finish the job and get a certificate of occupancy. If they failed, the state could take back the property, but routinely granted extensions if work was ongoing.

Of the 135 properties that went to closing after the first auction in May 2015, more than half have been redeveloped. To date, 76 houses, or 58.5 percent, have certificates of occupancy. Another 48, or 35.5 percent, were granted extensions when the state deemed that construction or permitting had progressed sufficiently to warrant more time.

One house was taken back by the state and re-auctioned in November in the last of the six auctions, while another seven, or 5 percent, are under review by the state, which is working with the purchasers on how to finish the projects.

The 509 storm-damaged properties acquired and auctioned statewide were bought for $209.8 million by the state’s acquisition program, including 391 of them in Nassau and Suffolk counties. They were located in 100- and 500-year flood plains and were deemed substantially damaged in Sandy and in prior storms. So far, a total of 166 have been successfully redeveloped and received certificates of occupancy.

The program’s auctions, in which buyers obtained property at a fraction of pre-storm values, raised $71.5 million for use in housing and recovery programs.

The state’s storm recovery office “monitors redevelopment progress and works with purchasers to help them successfully complete their recovery and resiliency projects, which at times includes granting extensions, so that we can achieve the ultimate goal of building back stronger and smarter,” said Emily Thompson, its acting general counsel and chief external affairs officer. She said the program was intended to help maintain the local tax base, reduce neighborhood blight and enhance resiliency.

The state is set to phase out its storm recovery office in 2022 and intends to put in place a plan to monitor and dispose of any properties not completed by then. Buyers were given 18 months to redevelop properties auctioned November in the last of the six auctions conducted since 2015.

Rich Schaffer, Babylon Town supervisor, said he’d heard only a few complaints from town residents about the progress of redevelopment on auctioned properties and assumed that if there were widespread problems, “I probably would have heard more,” he said. “We have seen some of the properties where they’ve done what they were supposed to do. Sometimes it was a real estate investor who flipped it, but we’re just happy it’s gotten properties back on the tax rolls and gotten neighbors who could be part of the community. That’s a pretty good record then.”

Michele Insinga, executive director of Adopt-A-House and an officer of the American Venice Civic Association, said that overall, “I think there is definitely some progress that has definitely happened from the auctions,” while pointing to instances where work hadn’t begun yet.

The range of outcomes for auctioned houses is evident on Surf Road, a short canalside street in the Town of Babylon that flooded in Sandy. A dozen homes there were purchased in the acquisition program and auctioned in 2015. According to NY Rising, two houses have certificates of occupancy, three are complete and awaiting certificates, three are under construction and four are in the permitting process.

Several homes are now up for sale, including one where work hasn’t begun yet due to the death of its buyer. His sons may redevelop it themselves and expect to get needed extensions, according to the real estate agent representing them.

Three of the houses were turned over to the Long Island Housing Partnership for affordable housing, and requests for variances to build homes larger than normally permitted for the size of their lots have caused some concerns among their neighbors.

One resident on Surf Road is Terry Mennella, who works as a real estate salesperson. The house next door was acquired by NY Rising and turned over to the Long Island Housing Partnership, which now wants a variance to build a house she believes is far too big for the size of the lot. But overall, she’s happy with the changes on the block from new elevations and reconstruction.

“I’m happy to see the block being re-created,” she said. “It doesn’t look scary anymore.”

While some of the auctioned homes were elevated, not all were. The occupant of one such house near the end of the block, who declined to give his name, said the house was made code-compliant by closing off the first floor and installing flood gates through the cinder block walls. “All the utilities are upstairs, we killed the whole first floor,” he said. “That’s how I had to comply with the Town of Babylon to get a C of O.”

While the house was made resilient according to town codes, the street itself still floods periodically, he said. “You still worry about the water every day,” he said. “Six times a year, the water comes up the driveway to the house.”

A large puddle remained in the street from a rainstorm a few days before.

“They're supposed to be fixing the road,” he said.

By Carol Polsky

Carol.Polsky@newsday.com

Carol Polsky writes news and features on wide-ranging topics, from superstorm Sandy, 9/11 and presidential elections to health care and the economy.