Federal Task Force on Sandy Rebuilding Urges Regional Economic Development & Community Development

August 23, 2013


This is our second of three blog posts reviewing the federal Hurricane Sandy Rebuilding Task Force report released earlier this week. Our

first blog

was on the report’s recommendations related to transparency. We also provided examples of where we believe the Task Force should have used its influence to require cities and states to agree to abide by the recommendations


especially those that would enhance democratic planning principles and benefit low and moderate-income communities.

For our second blog, we focus on economic development and community needs.

Regional Economic Development & Community Needs

We were thrilled to see the Task Force’s report reference regional coordination.

Competition between cities and states has gotten out of control in recent years

, with billions of unaccountable economic development dollars often used to shuffle jobs around regions rather than create new ones. Considering how New York allocated hundreds of millions of dollars in disaster aid after the attacks of September 11, 2001

to large financial and real estate interests in Lower Manhattan

, fearing they would move, a bona fide conversation directed from the White House about thoughtful approaches to regional economic development planning is long overdue.

Additionally, the emphasis on how impacted communities can assist small businesses is another welcome change from policies implemented after 9/11. At that time, a disproportionate amount of the assistance from New York State went to boutique law firms and bond trading firms under the guise of aid to small business, a

New York Times analysis


We are encouraged by the report's recommendations that small businesses receive assistance with resiliency planning and that more types of small business that be made eligible for SBA loans, and in a wider range of loan amounts. Also helpful is the call for more flexibility for community-based intermediary lenders. However, the New York City Economic Development Corporation, which is expected to allocate a significant portion of CDBG-DR funds for business resiliency and rebuilding, is lacking transparency on its existing non-CDBG disaster relief aid for area businesses. This lack of transparency is a bad precedent for company-specific disaster aid.

There is a passing mention of tax-exempt bond financing in the report, while we suspect the potential for Sandy related private activity bonds can be an important tool to leverage affordable housing and other capital projects that have broad community benefits. If those

bonds or other tax benefits become available

, they should be used to promote truly affordable housing in the region and focus on the needs of working families and low-income communities. Lacking a requirement to do so, there is little to prevent what occurred after 9/11,

when Liberty Bonds were used to build luxury housing

, helping to establish Lower Manhattan as one of the region’s hottest and priciest neighborhoods.

The report accurately describes the region’s housing market as challenging. Many neighborhoods in the area, especially in New York City, are experiencing an affordability crisis and the New York City Housing Authority was ill-prepared for the storm. The loss of housing stock due to the hurricane was a double whammy as low vacancies meant there were limited places for displaced New Yorkers to go even temporarily. The report outlines several programs that could help repair homes and recommends that various agencies work with the private sector, including the philanthropic sector, to preserve and develop affordable housing.

Aside from affordability, the housing situation also faces environmental problems such as mold.   Not uncommon after disasters like Hurricane Sandy,

mold is a problem for thousands of households

in New York City but policies on how to fix the problem have not been effective, as the report implies. The recommendation that federal agencies streamline how to deal with “indoor air pollutants” is a welcome one.

An issue environmental justice advocates are particularly concerned about is that low-income neighborhoods and communities of color that have historically borne the brunt of hazardous waste dumping may have suffered additional damage as a result of  Sandy’s storm surge. The Environmental Protection Agency's "Plan EJ 2014" cited in the report is expected to provide various tools for community engagement and inclusive planning procedures. The

Sandy Regional Assembly

has been organizing and advocating for policies and capital projects to protect residents and workers from hazardous exposures in the event of severe weather, and create jobs for residents, as part of the rebuilding process.

We are pleased there’s no mention of using disaster aid to build market rate housing, yet there is also nothing in the report that will prevent this from happening. The Bloomberg Administration has done little to help the city’s middle class and working poor; its policies that displace small businesses combined with a proliferation of low-wage jobs have led to

a dramatic increase in disparity

. The administration continues stubbornly down the same economic development path after Sandy with recently proposed programs like the “

Neighborhood Game Changer

” causing anxiety in some communities.

The Task Force acknowledges the immense impact Hurricane Sandy had on our region. However, as mentioned in our first post, the report leaves too much responsibility on already struggling neighborhoods to push for its implementation and not enough of a mandate to local officials.

Thanks to GJNY’s Research Analyst, Elizabeth Bird