Thousands of co-op owners have been left without a crucial safety net in the wake of Hurricane Sandy, as a longstanding Federal Emergency Management Agency policy considers co-ops as businesses and leaves them ineligible for federal aid, the New York Times reported.
The agency does not provide aid to condominium and homeowners’ associations. But individual condo owners can receive FEMA assistance for their homes, as technically condos are considered personal property. In the case of co-ops however, owners sign leases for the rights to their units, rather than actual ownership, and this leaves them ineligible to receive federal aid.
Nearly 20 percent of the city’s housing units in the storm surge area were in co-ops, according to data from the Furman Center for Real Estate and Urban Policy seen by the Times. The city’s Office of Housing Recovery Operations told the Times that at least 120 co-op buildings, with 13,000 apartments, and 368 condominiums, with 7,000 units, sustained flooding and damage to ground floors.
FEMA officials told the Times that unless federal aid law was amended, the agency would not be able to act.
Lawmakers are pushing for an overhaul of the policy, arguing that the growing incidence of weather-related problems will exacerbate the burden that co-op owners face. Members of Congress from the region said that FEMA was discriminating against co-op owners through its rigid interpretation of the federal disaster law known as the Stafford Act. They added that they would make a push for new legislation, but in the meantime urged FEMA to ease up on its policy.
“There’s nothing in the Stafford Act that prohibits condos and co-ops from applying for FEMA aid,” Sen. Charles Schumer, told the Times. “To deny this is wrong.” [NYT] – Hiten Samtani