A Tough, Expensive Recovery for the Sandy-Damaged Rivercrest Co-op

Even that wound up providing no balm. "FEMA came in and did an inspection, but we were turned down for disaster grants because co-ops are not covered under the Stafford Act," says Alfred Kramer, who has served on Rivercrest's board of directors since 1993 and is now its president. "FEMA didn't give us a dime."

Background 

He was referring to the 1988 legislation sponsored by Senator Robert T. Stafford (R - Vt.). It amended the Disaster Relief Act of 1974, giving FEMA responsibility for coordinating government-wide disaster relief efforts. It also categorizes co-ops and condos as businesses, making them ineligible for disaster grants. While apartment-owners, however, are indeed eligible for FEMA grants —which are designed to shelter homeowners after a disaster and helped many after Hurricane Irene and superstorm Sandy — common areas are not covered.

The co-op suffered about $200,000 in damages from the storm. A small fraction of that sum was covered by a state disaster grant and an insurance board ruling; the bulk of it came out of the co-op's reserve fund, which was nearly wiped out.

Legislation Introduced

And yet, there may be hope. Last year, Representative Steve Israel (D - N.Y.) introduced legislation in Congress that would end the designation of co-ops and condos as businesses and make them eligible for federal disaster grants. The bill would also remove the current $30,000-per-household cap on such grants.

Israel's legislation would list co-op and condo associations as entities eligible to apply for assistance through FEMA's Individual and Households Program (IHP) and add definitions for both to the Stafford Act. For now, though, the bill's fate remains uncertain. 

But Kramer, the board president at Rivercrest, has faith, saying that the looming elections might provide a crucial lever for Israel's bill. "Remember, this is an election year," Kramer says. "Management companies need to get busy and correspond with politicians and see if we can get this bill passed."

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Photo courtesy Rivercrest. Click to enlarge.