Bloomberg’s Post-Sandy Redevelopment Program – Not a Buyout Program

by Anne Siders

WNYC radio announced this morning that Mayor Bloomberg, as part of his post-Sandy recovery effort, is considering purchasing waterfront homes that were damaged by Sandy.   The plan would use some portion of the $1.8 billion in Community Development Block Grant funding that has been earmarked for New York City to purchase damaged properties that owners cannot afford to or do not wish to rebuild.   Although some media outlets are terming this program a “buyout” program, similar to Governor Cuomo’s program, it is important to note that what Mayor Bloomberg is proposing may not technically be a buyout program.

According to the Department of Housing and Urban Development (HUD), a “buyout” program is one “intended to reduce risk from future flooding.”  In a true buyout program, therefore, acquired properties are required to be “dedicated and maintained in perpetuity for a use that is compatible with open space, recreational, or wetlands management practices,” which means that no re-development is allowed on the space.  Moreover, because no re-development is allowed on lands acquired through a buyout program, the city or state can never request FEMA or HUD disaster funds to repair those lands in the future.

However, unlike Governor Cuomo’s buy-out program, which would purchase damaged homes and turn the land into undeveloped natural buffers to prevent future floods, Mayor Bloomberg’s program may allow for the redevelopment of the acquired properties.  According to WNYC, the Mayor’s office has not yet decided whether to allow re-development.

If the plan allows re-development, it would therefore not actually reduce the risk from future flooding, because it would neither create natural barriers nor reduce the number of buildings exposed to floods.   The program may require redeveloped structures to build to better standards, but it will not have the same overall protective effect.

Another important distinction is that while Governor Cuomo’s buyout program would purchase damaged houses at the pre-flood market value, Mayor Bloomberg’s redevelopment proposal (in order to meet HUD Guidelines released on Friday) would have to pay the post-flood value for damaged homes.  This would be a substantial loss for homeowners, although the program could offer some additional relocation assistance.

At first glance, allowing redevelopment on acquired lands may raise equity concerns in the post-Sandy recovery process if homeowners too poor to rebuild are removed and replaced with wealthier developers.   Allowing re-development could also increase the long-term exposure of New York by continuing to develop in areas that have already proven to be at risk.   In the meantime, we await the details of Mayor Bloomberg’s final plan.

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