Storm Recovery Program in New York City Was Mired by Its Design

The New York Times – by 

The night Hurricane Sandy struck, Jayme and John Galimi swam out the front door of their home in Broad Channel, Queens, into the rising waters of Jamaica Bay with their five children, the youngest clinging to his father’s back.

Almost two years later, all seven remain jammed into a three-bedroom rental. Their debt is mounting. They applied to a federally funded New York City program for help rebuilding, but that devolved into an unending loop of lost documents, aborted meetings and frustrating exchanges with temporary workers handling their application.   

A low point came in January, when the couple arrived for an appointment at the intake center to hear what construction work would be covered. But they were met by blank looks.

“Nobody knew why we were there,” Ms. Galimi said. “Again.”

The Galimis were among the thousands of families caught in what has been nearly two years of crushing uncertainty, postponed promises and hopeless bottlenecks that have been the hallmarks of the city’s program to help people rebuild homes that were destroyed by the storm that hit on Oct. 29, 2012.


Mayor Michael R. Bloomberg in 2013 speaking about Rapid Repairs, which helped people “shelter in place.” CreditJohn Moore/Getty Images

While hundreds of millions of dollars in federal money sat waiting to be used, devastated homeowners were stuck in an application process that was overdesigned and undermanaged to such a degree that, until a few months ago, not a single one of the 20,000 homeowners who applied for help rebuilding their homes in the city had seen work begin.

Though public officials have criticized the program’s slowness, there has yet to be a detailed exploration of what caused the process to bog down. A review by The New York Times, based on documents, data analysis and dozens of interviews, shows that while some early delays were the inevitable outgrowth of federal rules and a slow-moving Congress, the standstill into this year was largely attributable to the design and execution of the program by the administration of Mayor Michael R. Bloomberg.

The program continued to sputter into the summer, and there was a widespread perception among officials involved in the effort that this was because the new administration of Mayor Bill de Blasio did not immediately focus on making changes.

From the outset, Mr. Bloomberg’s ambition was to forge a new model for disaster recovery, one that would provide help but also make certain that the waste and corruption that occurred in New Orleans after Hurricane Katrina in 2005 would not be repeated in New York. In response, however, his administration and their outside consultants created an application process so rigidly linear that it became nearly unworkable.

The issues in processing were not helped by the fact that the contractors in charge of the application intake centers staffed them with temporary workers, who received little or no training. They worked with no city managers present and little meaningful oversight from the contractors who hired them. Applications were supposed to be stored and processed within a specially designed computer program, but the program became better known for causing documents to disappear without a trace.

At the same time, the administration locked in money for initiatives it saw as central to Mr. Bloomberg’s legacy, such as long-term planning to minimize damage in future disasters, rather than putting that money toward urgent housing needs. Officials chose to focus first on lower-income applicants, creating even longer delays for moderate-income families.

The effort also was bogged down under repeated changes of leadership: Three executives have headed the program in the last year.

By the time Mr. Bloomberg left office at the end of last year, the program had paid $8.3 million to one of the nation’s most expensive business consulting firms. Another consulting firm was poised to collect several hundred thousand dollars to run contests seeking ideas that might help businesses in future storms. Nearly $300 million had been awarded to the mayor’s coveted long-term disaster planning effort. But the rebuilding of people’s homes was completely stalled, a situation that remained largely unchanged through the spring, several months into Mr. de Blasio’s tenure.

Mr. de Blasio said in February that a comprehensive review and changes to the program were coming. A month later, federal officials urged him to move faster. The new mayor announced changes at the end of March that led to a burst of activity over the summer. Construction has now started on more than 500 homes.

By contrast, the administration of New York’s governor, Andrew M. Cuomo, chose a different path for homeowners outside the city — and the results were far different. By the end of last year, the state had distributed nearly $119 million to help rebuild 2,854 homes, and then continued the pace during the first three months of this year, distributing another $190 million and including another 2,617 homeowners.

Nearly every federally financed disaster recovery program has stumbled because of complicated rules and the difficulty of creating a large-scale operation in the aftermath of a crisis. But there is a widespread perception among public officials who monitored the city’s program that the Bloomberg administration’s miscalculations worsened matters.

“They turned the spigot so tightly that we went to the other end of the pendulum, and we created this gridlock,” James S. Oddo, the Staten Island borough president, said.

A Plan to ‘Build It Back’

The basic elements of the long-term rebuilding effort were conceived in the crazed days immediately after the storm.

Tens of thousands of buildings had flooded. Entire blocks in Breezy Point, a beachside community on the Rockaway Peninsula in Queens, burned to the ground. Thousands of homes in low-lying waterside communities were severely damaged.

The usual strategy by the Federal Emergency Management Agency involved paying for hotels or putting people up in mobile homes.

The Bloomberg administration saw those methods as unworkable. Instead, a team of officials hatched an alternative plan, called Rapid Repairs. The program would help people “shelter in place” by hiring contractors to restore heat, electricity and hot water to thousands of homes quickly.

In less than 100 days, Rapid Repairs restored heat, power and hot water service to more than 11,700 buildings. More than $640 million was spent, much of it toward repairs with permanent value.


Three executives have led the city’s housing recovery program in the past year, from top: Brad Gair, Kathryn Mallon and Amy Peterson. The Galimis’ home in Broad Channel, Queens, was destroyed by Hurricane Sandy in 2012.CreditClockwise from top left: Ruth Fremson/The New York Times; The Galimi Family; Dave Sanders for the New York Times; Uli Seit for The New York Times

While Rapid Repairs was not universally well received, the Bloomberg team’s pride in the program’s innovation would define the shape of the permanent rebuilding effort that would follow, eventually named Build It Back.

As with Rapid Repairs, the city would hire and oversee contractors to do the work, instead of writing checks to people to pay contractors themselves — the model that had been the source of much of the corruption in New Orleans.

A deadlocked Congress took three months to approve the aid package, which would come in several payments from the federal Department of Housing and Urban Development. The Bloomberg team recognized that the first installment of $1.77 billion would be insufficient and expected more to come. It decided to focus first on families that most needed help.

The city hired Boston Consulting Group, one of the country’s premier business advising firms, to help design the program. Many of the consultants were recently minted M.B.A.s, billing the city nearly $400 an hour, according to city records. The firm’s top consultant billed the city $860 an hour. A gaggle of well-dressed consultants tagged along everywhere with Brad Gair, a former federal disaster recovery official whom Mr. Bloomberg hired days after the storm and put in charge of the housing office.

City officials and the consultants came up with a system to prioritize the first 1,000 applicants to receive help from the first payment. Boston Consulting’s research showed that in disasters, a disproportionate share of the aid went to higher-income households because they tended to have better documentation, enabling them to move through the process faster.

As a result, the city gave top priority to homes with all residents at or below 80 percent of the area median income — roughly $67,100 for a family of four — or homes that were “severely damaged or destroyed,” in which all residents earned at or below 165 percent of the area median income, about $141,700 for a family of four. That meant that a home with a police officer and a teacher might have to wait until the federal government approved more money.

It also meant the program would have to go to great lengths to document applicants’ incomes, despite already having dozens of documentation requirements.

Aside from housing needs, the allocation plan locked in $322 million to cover costs the city incurred responding to the storm that were not going to be reimbursed by the federal government. Critics said that choice put the city budget ahead of displaced families.

Moreover, the city devoted $294 million for construction and planning programs to help it survive future storms and rising seas. Mr. Bloomberg, a political independent, had made addressing climate change a centerpiece of his time in office, and the money would pay for the recommendations of a panel he commissioned after the storm.

Over all, the city allocated 37 percent of the first $1.77 billion payment to housing. The state, by contrast, used nearly half of its first block grant payment for housing, because, the state said, housing represented the greatest unmet need.

Senator Charles E. Schumer of New York said that Congress intended for housing assistance to be the highest priority, and that the state’s program got money to people faster than the city’s because Mr. Cuomo, a fellow Democrat, did the same.

“In the city, Bloomberg chose to focus on long-term resiliency,” Mr. Schumer said.

In May 2013, the mayor unveiled the Build It Back program and promised that a housing recovery specialist would shepherd people through the application process “every step of the way.”

Two weeks before the mayor’s announcement, the Galimis stood together on the median of Cross Bay Boulevard as bulldozers knocked down the house that John, 45, and Jayme, 44, bought in their early 20s. It was the only home their five children, now ages 12 to 24, had ever known.

Their youngest son, Nick, watched as his toys tumbled down among the splintered lumber.

“The look on Nick’s face that day I will never forget,” Ms. Galimi said.

Insurance would cover less than half the cost of rebuilding. But they did not want to leave Broad Channel, an affordable island a few blocks wide between Howard Beach and the Rockaways where people live connected to the water, and to each other.

“We were excited that somebody was going to help us,” she said. “And we thought it would happen really quick.”


Construction at the Galimis’ home this week..CreditChang W. Lee/The New York Times

Temps With No Training

One of the housing recovery specialists who Mr. Bloomberg said would guide people through the process was a young woman who arrived at her interview for the job weeks after graduating from college. She had seen an advertisement for the position and applied.

Thinking it was a government job, she was surprised that the interview was conducted at the office of Manpower Inc., one of the country’s biggest temporary agencies. She said the only question she was asked was whether she could work long hours.

On her first day of work she found herself sitting in front of a devastated couple who had lost everything in the storm.

“I thought I was going to start training that day,” said the woman, who spoke on the condition of anonymity because she is now applying for other jobs. “But they told me right away, ‘You’re a housing recovery specialist.’ There was no training. We all had to learn it ourselves.”

That was July 8, 2013 — eight months after the storm, and the first day application intake centers opened across the city. But even before the doors opened, the system was breaking down.

Outside contractors had been hired to run the centers and process the applications. A $50 million contract was awarded to Public Financial Management to oversee the entire operation. The company, which specializes in advising governments on economic and financial issues, had no experience in what it was now assigned to do.

PFM brought in another firm that had worked on prior disasters, URS Corporation, to run the intake centers, which it staffed with temporary workers.

The custom-made computer system, into which all applications were to be entered and stored, was supposed to be delivered two to four weeks before opening day, a person involved in setting up the centers said. But it did not arrive until the night before opening day, leaving no time for any familiarization.

“Everybody was pretty much on their own, trying to figure it out themselves,” said a man who worked as a recovery specialist and also would only speak anonymously to protect his chances of finding a new job.

For months to come, records scanned into the computer system — proof of income, property ownership and storm damage — seemed to disappear.

“People were told to come back with the same info, and the same form,” the man said. “I apologized to them a lot, because it was frustrating for me as well.”

Jayme Galimi said she was regularly summoned to the office at Fort Tilden, Queens, sometimes twice a week. One day in September, she submitted a form and was called back the next day to sign it.

“They couldn’t answer anything,” John Galimi said. “It was almost like a pacifier for the people.”

‘Where Are the 1,000?’

By September, Mr. Gair, the head of the housing recovery office, was regularly pacing through its headquarters, telling workers that he wanted 1,000 homeowners at the final stage by the end of the month.

“Where are the 1,000?” he would ask.

But it was clear the process was stalling in the first step of the six-step flow chart: deeming an application complete.


In Broad Channel frustration over the Build It Back program.CreditChang W. Lee/The New York Times

Only then would the city order the second step of sending an assessor to estimate the cost of fixing the damage.

By the end of October, the number of people moving to the construction phase still was at zero. Mr. Gair was reassigned to focus on helping the city get reimbursed from the federal government for Rapid Repairs.

Caswell F. Holloway, the city’s deputy mayor for operations, assigned another official who had helped lead Rapid Repairs, Kathryn Mallon, to take over.

Ms. Mallon quickly ended the involvement of Boston Consulting Group, which had billed the program a total of $8.3 million, almost all of it over six months.

She and Mr. Holloway met regularly at City Hall with representatives of the contractors, URS Corporation and the PFM Group, who were managing the processing of applications. Week after week, however, the progress reports did not budge. During one meeting in early December, Mr. Holloway made his frustration clear, according to two people briefed on the encounter. How could it be, he asked, that, more than a year after Hurricane Sandy, construction had not started on a single home?

The contractors looked dumbstruck. They offered the same excuses they had for months. Mr. Holloway rose from his chair.

“Where are the hammers in homes?” he loudly asked, according to the two people. “If you had one hammer in a home, I might think you had a leg to stand on!”

Soon after that meeting, the PFM Group agreed to step aside and let URS Corporation take over the lead role.

By the end of the year, Mr. Gair and Mr. Holloway had departed, along with the Bloomberg administration.

At that point, 2,453 applications had progressed to the damage inspection phase. Of them, only 454 applicants had been presented with their options, and none of them had made a choice and proceeded to the design phase.

The state, on the other hand, let homeowners hire their own contractors. It did not prioritize applications based on income. It got damage inspections moving as soon as possible, even if some documents were still needed. Most significantly, it avoided a rigidly sequential system.

In New York City, some of the federal funds devoted to the mayor’s long-term efforts were being spent. KPMG, the auditing and professional services firm, was awarded a $625,513 contract to advise the city on how to set up an office to run a business resiliency investment program.

Other contractors were to be hired to run that office. Money was planned for an idea competition to help the city and businesses survive future storms. The plans included spending $33,500 to handle “logistics” for an awards ceremony.

The Galimis, however, remained stuck.

“At first it felt like it was going to be a good thing,” Ms. Galimi said about the city’s recovery program. “And then it felt like it was all a scam and nothing was ever going to happen.”

Compared with many displaced families, they had some advantages. They were considered high on the priority list, based on the complete destruction of their home and Mr. Galimi’s income as a lineman for a railroad.

They were also directly in touch with Ms. Mallon, who returned emails at all hours. Ms. Galimi took great comfort in her interest.

Still, nothing had moved.


Mayor Bill de Blasio at a May event linked to storm recovery.CreditOzier Muhammad/The New York Times

A New Administration

In January, Ms. Mallon showed up at a meeting for Build It Back applicants at a high school on Staten Island and assured them the program was ramping up.

She had a reputation as a hard-driving, data-obsessed manager. She saw the recovery program’s success as a critical part of Mr. Bloomberg’s legacy, according to several officials who dealt with her directly, but she had also begun to worry that the new administration was not focused on the effort.

On Feb. 20, Ms. Mallon announced she was leaving her job. “The behind-the-scenes story was that she was willing to stay,” but that Mr. de Blasio was not paying attention, one federal official said. “It took them a while to show up on this.”

Mr. de Blasio, a Democrat, did not immediately name a successor. By early March, federal officials were increasingly concerned with the city’s lack of progress. There was even a risk that the city might be required to forfeit money not spent within the required two-year limit.

In a conference call on March 10, Shaun Donovan, then the federal housing secretary, pressed Mr. de Blasio and other city officials to address the logjam.

Not long afterward, Mr. de Blasio appointed a new leader for Build It Back: Amy Peterson, who had extensive experience with public and private construction projects.

A spokeswoman for Mr. de Blasio said he replaced Ms. Mallon as quickly as possible. The mayor’s top deputy, Anthony E. Shorris, insisted in an interview that the mayor was focused on the program even before taking office. But fully diagnosing the scope of the problem and developing solutions took time.

At the end of March, Mr. de Blasio announced several measures intended to speed the process, including moving $100 million from other parts of the allocation plan into housing and removing the prioritization based on income. The city was later approved for a second payment from the federal government of $1.45 billion, a little more than a third of which would be devoted to Build It Back.

The administration put city managers and staff in the intake centers, and began reviewing the performance of the contractors.

To underscore his commitment, Mr. de Blasio set a goal of 500 construction starts and 500 reimbursement checks issued by this month, which he recently announced had been surpassed.

But many homeowners had already given up. Nearly 900 formally withdrew their applications, and another 5,130 stopped responding to calls from the housing recovery office.

John Galimi understands why.

“I wanted to just quit,” he said, sitting at the donated dining table in the family’s rental house in Broad Channel. “But she wanted to keep going,” he added, nodding with admiration at his wife.

For the Galimis, the departure of Ms. Mallon, who had taken an interest in their case, was yet another blow.

“I called John crying,” Ms. Galimi recalled. “I said, ‘Oh my God, now what are we going to do?’ ”

But in the spring, Ms. Galimi began trading emails with Ms. Peterson. She asked when the family’s next meeting might be scheduled.

Ms. Peterson said they did not have to worry about it. They were done with meetings.

As the two-year anniversary of the storm approaches, the city’s contractor recently began installing the underground pylons upon which the Galimis’ new home will someday sit, on the same lot as their destroyed home.

Some 13,000 homeowners are still waiting.

2 thoughts on “Storm Recovery Program in New York City Was Mired by Its Design

  1. Mayor De Blowhole doesn’t have a brain in his head. He makes Bloominidiot look intelligent and that’s saying something.

  2. This is why I “never” give to charities. The money never get’s to the people who need it. All the funds in this case where given to Bloomberg buddies who did “surveys and studies” and accomplished zero. Behind closed doors I’m sure Bloomberg said “I’ll give you the contract but I need you to help me in my re-election campaign…..$100,000. Smile…wink….close door.

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