Published February 3, 2014
By Erin O'Neill

The state Monday released its plan for spending more than $1.46 billion in long-awaited federal funding for victims of Hurricane Sandy amid mounting criticism over how well and how fairly the money is being distributed.

The proposal pours hundreds of million of dollars into existing housing recovery programs with lengthy waiting lists and creates infrastructure programs aimed at mitigating flooding and hardening energy systems. It also sets aside $5 million for a tourism marketing campaign and provides $10 million for demolishing dilapidated homes.

Gov. Chris Christie and other top officials called the plan a step forward in the state’s recovery from the October 2012 storm.

Housing advocates criticized the state for largely following the same distribution pattern it had used for the first installment of federal aid.

In essence, they say, this plan throws good money after bad.

"We are very disappointed that the governor appears to be continuing down the same flawed path for this round of funding, one that has not produced the fair and equitable recovery N.J. deserves," said Staci Berger, president of the Housing and Community Development Network of New Jersey. The network is part of a coalition that has been highly critical of the state’s distribution of federal aid so far.

The plan, released by the state Department of Community Affairs, builds off the framework used for distributing the nearly $1.83 billion in Community Development Block Grants that New Jersey received from the U.S. Department of Housing and Urban Development last spring

The Reconstruction, Rehabilitation, Elevation and Mitigation, or RREM, program, which has been lambasted by residents for long delays and a lack of communication, would receive an infusion of $390 million.

That extra funding would provide grants to about 3,000 homeowners, according to state officials, while thousands more would remain on the program’s waiting list.

The state quietly ended its contract with the firm overseeing that program in early December. State officials have not said who is now handling the program and why the $68 million contract with Louisiana-based Hammerman and Gainer Inc., or HGI, was terminated.

Lisa Ryan, a spokeswoman for the state Department of Community Affairs, said there has been no interruption in services. "We are working and will continue to work with existing contractors in administering our disaster recovery programs," she said.

Adam Gordon, a staff attorney with Fair Share Housing Center, said HGI botched the rollout of the housing recovery program and so the state needs to re-examine the entire initiative.

"I don’t how you can secretly fire a contractor and then basically say, ‘Hey, they did a great job and we’re just going to keep going with their work,’ " he said.

The plan sets aside $100 million for a buyout program targeting properties in flood-prone neighborhoods and allocates $200 million to create affordable housing.

A senior housing project in Belleville was awarded millions of dollars through that affordable housing program. The funding for the project was announced less than two weeks before the town’s Democratic mayor backed Christie for re-election.

Marc Ferzan, the executive director of the Governor’s Office of Recovery and Rebuilding, said in a conference call with reporters Monday that "politics has played absolutely no role in disaster recovery."

"There is nothing that is more highly regulated than federal recovery disaster grants programs," he said.

The plan, which HUD has to approve, allocates funding for major infrastructure projects as well. The proposal includes a $100 million flood-hazard risk-reduction program, a $210 million energy resilience bank and a $225 million allocation to help towns and counties cover matching funding requirements for projects.

Chris Sturm, senior director of state policy at New Jersey Future, said there were signs of progress in the plan but said more work needs to be done.

She said she was happy to see the state factor in sea level rise for the flood mitigation initiative. But, she said, "That kind of forward-looking analysis needs to be applied to all the rebuilding programs."

The state will hold three public hearings on its proposed spending plan next week: 4-7 p.m. Feb. 11 at Richard Stockton College of New Jersey in Galloway; 5:30- 8:30 p.m. Feb. 12 at New Jersey Institute of Technology in Newark, and 4-7 p.m. Feb. 13 at Brookdale Community College in Middletown.