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HUD Secretary Discusses Ways To Cut Sandy Red Tape, Meets With Gov. Christie

NEW YORK (CBSNewYork) - As the federal government releases its first batches of aid for recovery from superstorm Sandy, Shaun Donovan, the Secretary of Housing and Urban Development, has been visiting some of the areas hardest hit.

That includes actually grabbing tools and helping out in places like Jones Beach.

He took some time Thursday morning to talk about it live with WCBS 880's Michael Wallace and Paul Murnane.

HUD Secretary Tells WCBS 880 How They're Trying To Cut Sandy Red Tape

He started by talking about HUD's role in the release of those funds.

"The money that we released yesterday - $5.4 billion - is what we call 'community development block grant.' It is HUD money. So, it comes out of my agency - Housing and Urban Development. But the most important thing listeners should know is that this is the most flexible money that we provide and it's going to be targeted on helping homeowners and small businesses rebuild that haven't been able to rebuild so far just with emergency money from FEMA or their insurance checks," Donovan said.

Shaun Donovan Jones Beach Sandy HUD
Secretary of Housing and Urban Development Shaun Donovan helps with cleanup from superstorm Sandy in Jones Beach (credit: HUD)

He said they've put out the funds in the fastest way ever.

"The law said we had to do it in 60 days. We did it in about one tenth of that because we wanted to make sure we got this money to homeowners, small businesses as quickly as possible," he said.

Murnane pointed out that people are still complaining about red tape and asked what's being done to get the money to the people who need it as soon as possible.

"Well, first of all, what I can tell you is that we've already provided $3 billion throughout the region for help and one of the the things, I was out at Goodfellas Pizza yesterday in Staten Island with Scot Cosentino, the owner of that business. He was able to get a $29,000 loan from the Small Business Administration very very quickly. What I heard from him was that the biggest problem families are having in that community is getting their insurance checks. They actually said the government's been much faster than the insurance companies and so one of the big things that we're focused on as well is pushing insurance companies to get money to homeowners as quickly as possible," Donovan said.

"And then what we're going to do, and this is what President Obama told me to do, is cut red tape for those who are applying for our help. One example of that: There are many businesses that haven't been able to take a loan because they already had too much debt. They're worried about how much income they have coming in after the storm, if their neighborhood's been hard hit," he added. "So, we're now going to do grants, but we're taking all the information on those businesses that came in to try and get a loan and we're giving it to these state and local governments that are getting our money so that they don't have to go back [and] have these businesses fill out more paperwork. They know exactly who to go to right away to be able to get help to the right people without more red tape."

Wallace asked what authority HUD has to pressure the insurance companies.

"One of the things is that the President asked me to lead an overall federal government task force. So, in addition to my role as HUD secretary, I'm leading this effort across across the entire Obama administration. So, we can bring the financial agencies and others to the table," Donovan said. "The other thing I'm doing, I'm headed today to meet with Chris Christie in New Jersey. I met with Andrew Cuomo yesterday. We're working with them, with their state insurance regulators, to make sure that we're doing this in a all government way so this isn't just the federal government trying to make sure the insurance companies are working in the right way. But it's working with the state governments as well that have those regulatory authorities at the state level."

In Donovan's meeting with Christie in Sea Bright on Thursday afternoon, much of the focus was on using some of the federal aid to buy out homeowners who live in flood-prone areas.

HUD Secretary Discusses Ways To Cut Sandy Red Tape, Meets With Gov. Christie

"The vast majority of homeowners, businesses, the issue is about rebuilding not about buyouts," said Donovan. "We're here to listen to what Sea Bright wants or what other folks want."

"It makes no sense to buy one or two of these homes. If you're going to do it, you need to buy out an entire neighborhood," Christie told residents. "If you buy two or three homes in the neighborhood that flood and you leave the other 15 or 20 or 40, then you're back to the same problem in terms of paying for damage in the long haul."

Christie said Sayreville, South Amboy and Union Beach have expressed interest in home buyouts, so he said the government will work with the cities to possibly use the next round of funding to cover the project.

For homeowners and business owners unsure if they want to take a federal loan, Donovan said it is best to get on the federal government's radar, just in case.

"Register even if you don't think you're going to take money," Donovan told residents in Sea Bright.

Donovan said federal officials use the total number of applicants to determine how much money to dole out.

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