Builders in New Jersey are positioning themselves to be major participants in the recovery effort from Hurricane Sandy, which caused an estimated $20 billion in property damage in the Garden State.
The state’s Home Builders Association, based in Hamilton, has prepared what executive director Tim Touhey calls “policy recommendations” that the HBA will present to legislators at hearings on the relief effort that are scheduled to begin Nov. 26.
While Touhey did not want to get into specifics about recommendations that are still being crafted, he tells Builder they would touch on streamlining various areas such as permitting, zoning, and “regulatory impediments” that include the blizzard of local reporting requirements enforced by the state’s 566 municipalities.
The HBA also will make suggestions about how best to, in Touhey’s words, “marry our labor force to projects.” New Jersey is a union and nonunion state, and unemployment among its trades soared as high as 40% during the housing recession. Even though business conditions have improved of late, the state will issue only approximately 14,000 permits this year, compared with 24,000 during a “normal” year. “We have not had a full housing recovery in New Jersey,” says Touhey, so contractors here “are ready to go” once rebuilding commences.
Touhey says his group had been contacted by HBA affiliates in Maryland and Gulf Coast states, “who have reached out to us” offering assistance. The HBA wants lawmakers to make it easier for contractors from other states to come into New Jersey to do repair and rebuilding.
In the early stages of the recovery, the HBA set up a website that provides the latest news on the recovery effort, as well as “advice and tips” to HBA members, such as how to secure repair and reconstruction permits quicker. The HBA also secured warehouse space in Lakewood, N.J., from the plumbing wholesaler Ferguson Enterprises, where the trade group has been storing and redistributing donations of building materials, clothing, and blankets. And the Foundation of Housing, an HBA affiliate, made what Touhey calls a “substantial donation” to the Hurricane Sandy NJ Relief Fund that Gov. Chris Christie and his wife, Pat, established.
Right now, HBA members are mostly engaged in repair and cleanup work. Touhey thinks repairs could be completed within six to 12 months. Rebuilding, however, is likely to take much longer, as state and insurance officials continue to assess the devastating wreckage, especially in hard-hit beach communities such as Highlands, N.J., where 1,200 of 1,500 downtown homes were flooded or damaged. The hurricane destroyed an estimated one-quarter of the homes along the barrier island of Mantoloking, N.J. Sections of Ortley Beach were wiped out.
Touhey couldn’t comment on whether the bulk of the rebuilding would be done by independent builders or by public companies active in the state that include K Hovnanian, Toll Brothers and Pulte. (In an email, a spokesperson for Hovnanian, the state’s biggest builder, said it was “too early” to respond to questions regarding the company’s participation in the rebuilding effort.) However, Touhey expects both independents and publics to be involved at some point.
The extent of the rebuilding effort, and how long it will take, are anybody’s guesses right now. Touhey notes that 109,000 New Jersey families have applied for assistance from the Federal Emergency Management Agency, although how many of those claims are related to home damage could not be determined.
Homeowners who rent out their houses along the Jersey shore during the summer aren’t eligible for FEMA assistance, but they could file for Small Business Administration disaster loans up to $40,000. However, in coastal communities where home values can range from $500,000 to $15 million, it would appear that owners with severely damaged homes will need to rely primarily on private insurance to cover their rebuilding costs.
When asked about the wisdom of rebuilding homes in areas that might be susceptible to future storms, Touhey concedes “there has to be a dialogue around that issue.” However, he thinks discussions about future construction are premature, given that the state has only begun to assess the storm’s impact. That assessment is likely to include a report card on what housing design features did and didn’t work during the hurricane.
John Caulfield is senior editor for Builder magazine.