The Obama administration recently approved more than $1.8 billion in aid to help New Jersey residents and businesses recover from Hurricane Sandy. The Community Development Block Grant (CDBG) funds for New Jersey, part of a $60 billion emergency relief package approved by Congress in January 2013, represent the first phase of the state’s disaster recovery plan, according to Governor Chris Christie’s administration.

Although a substantial portion of the $60 billion recovery package is intended to help homeowners, it also provides relief to local governments, as well as public housing authorities and qualified developers of affordable housing. The CDBG funds will be administered by the New Jersey Department of Community Affairs (DCA) to reimburse expenses not already covered by private insurance, the Federal Emergency Management Agency (FEMA), the U.S. Small Business Administration, or other sources.

CDBG recovery funds designated for local governments and public housing include:

• $179.52 million to provide zero- and low-interest loans of up to $120,000 per unit to qualified developers and public housing authorities for new permanent housing units. Much of this funding will be used to develop supportive housing for individuals with special needs.
• $60 million to close funding gaps in FEMA’s Community Disaster Loan Program. This funding will enable counties, municipalities, school districts, and other local government entities to continue to pay essential personnel in areas such as police and fire services, education, and public works.
• $50 million to help subsidize the required match for FEMA Public Assistance projects for eligible applicants such as state agencies and local governmental entities.
• A $10 million program that will provide up to $500,000 in financing to help nonprofit housing developers cover the predevelopment costs of properties that are unsafe, underutilized, or in foreclosure. Projects must facilitate the acquisition, clearance, and preparation of sites that are difficult to develop.
• A $6 million Code Enforcement Grant Program. This funding will supplement local code enforcement offices with additional staff, provide an online plan review and permitting process, and enhance the DCA’s continuing education curriculum for code officials to include training in flood hazard mitigation practices and other storm-related building code issues.
• Funding for neighborhood and community revitalization programs. Communities would receive aid for public facility improvements including streetscapes, lighting, and sidewalks; business assistance initiatives such as micro-loans for storm-related damage and loan guarantees for loss reserves; and façade and code-related improvements.

According to Governor Christie, the application process will be rolled out this month, and the distribution of CDBG funds could begin near the end of the month. The Governor has cautioned, however, that this timeline is only an estimate and could change.

Ballard Spahr’s Public Finance Department can assist local governments and businesses in New Jersey with a wide range of financing needs related to Hurricane Sandy recovery. Our attorneys represent state and local governments and authorities, nonprofit organizations, investment banks, and banking institutions in virtually every type of bond transaction. For more information, please contact William C. Rhodes at 215.864.8534 or rhodes@ballardspahr.com, or Holly V. Horsley at 856.761.3472 or horsleyh@ballardspahr.com.