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Rebuilding NYC

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LOWER MANHATTAN DEVELOPMENT CORPORATION

IN COOPERATION WITH

THE STATE OF NEW YORK AND
THE CITY OF NEW YORK

DRAFT ASSISTANCE PLAN FOR INDIVIDUALS

This plan offers several forms of assistance to individuals affected by the World Trade Center disaster. First, the plan recognizes the economic hardship and quality-of-life disruption suffered by individual residents of lower Manhattan since September 11^th. Second, the plan creates economic incentives for individuals to rent or purchase housing in the downtown area. Finally, the plan provides job training assistance to affected individuals to help prepare them for employment at companies in lower Manhattan.

The plan acknowledges that an array of government and private sector programs have already been established to provide assistance to individuals. It does not attempt to provide assistance for needs that are already being met through such sources. Instead, it focuses on those forms of residential and job-training assistance that are not currently available.

Existing programs for individuals impacted by the World Trade Center disaster include:

Government Programs

Victim Compensation Fund. The fund will provide economic compensation to families and dependents of victims of the September 11th attack in lieu of pursuing a civil case for damages. The program is intended to provide victims’ families with compensation equal to the likely lifetime earnings of the victim and for pain and suffering without the delay normally encountered in seeking damages through the judicial system. Payments from collateral sources, such as insurance and pensions, are deducted from the calculated amount before distribution to the claimant.

Low-Interest Loans. The Small Business Administration (SBA) offers low interest loans to eligible individuals to repair or replace damaged property and personal belongings not covered by insurance.

Cash grants of up to a maximum of $14,800 (adjusted annually for inflation) are available under the state-administered Individual and Family Grant program. Individuals who do not qualify for a loan from the SBA may be eligible for these grants from the state to recover unmet necessary expenses and serious needs, including medical, dental, and funeral expenses that are incurred as a result of the disaster. FEMA funds 75% of the grant program’s eligible costs with the remaining 25% of the program’s eligible costs provided by the state.

Housing Assistance. FEMA’s Disaster Housing Program makes funds and services available to individuals whose homes are uninhabitable because of a disaster. Funding has been provided to affected households for alternate rental housing and to clean residences.

Veterans Benefits. The Department of Veterans’ Affairs provides death benefits, pensions, insurance settlements and adjustments to home mortgages for veterans.

Tax Refunds. The Internal Revenue Service allows certain casualty losses to be deducted on federal income tax returns for the year of the loss or through an immediate amendment to the previous year’s return.

Unemployment Benefits. Disaster unemployment assistance and unemployment insurance benefits are funded by the United States Department of Labor and distributed through the state unemployment office. Individuals receiving such unemployment benefits may also receive retraining vouchers worth $4,000 to enhance their employability.

Private Sector Programs

Private charities have collected approximately $2 billion to assist individuals affected by the disaster. These charities provide funds to the families of victims, as well as assistance to those living or working in the area who suffered as a result of the World Trade Center disaster. Among the charities providing assistance are:

The American Red Cross will spend $850 million to help impacted individuals. Programs supported by the Red Cross include:

Assistance to families of deceased, missing or seriously injured. The Red Cross provides financial assistance for up to one year, as well as food, clothing, utilities, mortgage or rent payments, childcare, tuition, medical bills, funeral and memorial service costs. The Red Cross will also provide future supplemental grants of $45,000 per estate, and future need-based assistance for dependents, extended families, and non-traditional family members of up to $15 million.

Financial support for displaced residents, economically impacted individuals and disaster responders. To date, the Red Cross has provided $245 million for this purpose.

Long-term services, such as support and referrals for mental health care, uncovered health care, and family services. The Red Cross will provide approximately $80 million for this purpose.

The September 11^th Fund of the United Way of New York City and the New York Community Trust has raised $438 million for assistance to victims, families and communities. Programs supported by the September 11^th Fund include:

Cash assistance to those who were seriously injured and surviving families ($10,000) and those who were displaced from their home or job ($2,500).

Grants to providers of health care and mental health care who serve those affected by the disaster.

The Twin Towers Fund has collected approximately $100 million to provide assistance to families of uniformed services members who lost their lives as a result of the disaster. The fund provides: surviving spouses, $75,000; next of kin where no surviving spouse is present, $50,000; surviving children aged 23 or younger, $25,000; surviving children aged 24 or older, $10,000. All heads of household will receive additional $10,000 payments.

The New York State World Trade Center Relief Fund raised more than $56 million to assist families of victims of the World Trade Center Disaster. The fund provides grants of:

$10,000 to surviving spouses and domestic partners;

$5,000 to surviving children age 21 or younger and those older than 21 who received at least 50% of their financial support from the victim;

Parents of victims where no surviving spouse, domestic partner or children are eligible for an award receive $10,000; and

Other individuals receiving at least 50% of their financial support from the victim, where there is no other eligible survivor receive $10,000.

NOTE: For more information on existing individual aid programs, please contact the Federal Emergency Management Agency (FEMA) at 1-800-462-9029 (TTY for the speech- or hearing-impaired: 1-800-462-7585). FEMA’s website offers information on assistance available through multiple existing sources: http://www.fema.gov/nwz01/nwz01_117a.htm

Individual Assistance to be Provided Through the Plan
Housing Assistance

The World Trade Center disaster had an immediate negative impact on the housing market in lower Manhattan, which has resulted in a significant increase in vacancy rates. The residents of lower Manhattan, particularly in the area south of Chambers Street and west of Broadway, and in Battery Park City (the "Immediate Impact Zone"), face a number of concerns regarding the effects of the attack such as quality of life issues, transportation and the disruption caused by ongoing construction that will be necessary to rebuild lower Manhattan. As part of the recovery process, the economic impact of many of these issues is being addressed through existing grant programs administered by the Federal Emergency Management Agency, as well as recovery efforts by other Federal, State and City agencies. Unfortunately, the lower Manhattan housing market remains depressed despite the efforts that are being made in the area.

The United States Housing Market Conditions Regional Activity Report issued by the Department of Housing and Urban Development recently reported that lower Manhattan rental rates are down approximately 10 to 15%, even though one-month rental concessions are being typically offered by landlords. Occupancy rates are reported to be about 70%, with some buildings as low as 50%. Many tenants are reported to have broken their leases. Others have successfully obtained rent reductions from their landlords.

Owner-occupied housing has seen a similar downturn in the aftermath of the attack. Many residents have sold their condominiums or co-operative apartments in lower Manhattan because of the same concerns facing tenants in the area. In addition, real estate analysts report a decreasing interest in purchasing owner-occupied housing in lower Manhattan.

Lower Manhattan’s residential population is essential to the continued viability of the area’s businesses. Increased housing vacancy rates have a significant negative impact on the area’s economic recovery. Increasing vacancies in the rental and owner-occupied housing market begin a downward economic cycle, reducing business activity, which in turn makes housing in the area less attractive. Development of an effective program to encourage individuals to remain in, or move to, housing in lower Manhattan will require the creation of significant incentives to encourage individuals to renew existing leases, sign new lease agreements or purchase residential units. Without such a program, the perceived disadvantages of lower Manhattan as a housing location will continue to adversely impact the area’s housing market and commercial activity.

Area Characteristics

The population of the area south of Canal Street is diverse. Approximately half of the area’s residents live within walking distance of their place of employment. Residential income characteristics reflect the area’s industry mix, which includes a significant number of financial service businesses, small manufacturers (including garment producers), retailers, and providers of professional and personal services. For example, residents of the area east of Broadway and south of Canal Street have a median household income that is lower than the area west of Broadway, which is characterized by relatively high household incomes.

The area of lower Manhattan adjacent to the World Trade Center had been attractive to urban professionals because of the presence of the major transportation hub at the World Trade Center, and a major shopping area located at the World Trade Center and the World Financial Center. These attributes were complimented by the presence of attractive residential units in locations like Battery Park City and TriBeCa. In TriBeCa alone, more than 5,000 units were converted to housing from other purposes in the 1990’s.

Plan for Assistance

This plan offers substantial financial incentives to offset the perceived and real disadvantages of a lower Manhattan location. To encourage individuals to sign or renew leases, or purchase housing, in lower Manhattan, the following is proposed:

Rental units and owner occupied housing within the Immediate Impact Zone (defined as the area south of Chambers Street and west of Broadway, and the entirety of Battery Park City) will be eligible for a grant of 30% of the monthly rent (or mortgage payments, plus maintenance costs and taxes for purchased units), up to $12,000 over two years. To provide maximum benefit to lower income individuals in the area, the Plan provides a minimum grant of $4,000 per assisted unit over two years.
Rental units and owner occupied housing outside of the Immediate Impact Zone (as defined above) but South of Canal Street and Rutgers Street in Manhattan will be eligible for a grant of 30% of the monthly rent (or mortgage payments plus maintenance costs and taxes for owner occupied units), up to $6,000 over two years. To provide maximum benefit to lower income individuals in the area, the Plan provides a minimum grant of $2,000 per assisted unit over two years.
For rental housing:

Payments will be made available to:

(a) New tenants who sign at least a two-year lease after the commencement date of the program and whose lease term begins prior to 8/31/03.

(b) Existing tenants who entered into at least a two-year lease prior to the commencement date of the program and whose lease term expires after 8/31/03.

Existing tenants whose lease term ends prior to 8/31/03 will be eligible for payments under the program upon the renewal of their lease for at least a two-year term.

- To be eligible for the program, the rents paid by tenants in categories (a) and (c) may be no higher than the pre-9/11/01 rates for the same rental unit, plus applicable increases for rent-stabilized and rent-controlled units. Going forward, these rates may be adjusted to reflect market conditions.

- The tenant must occupy the apartment for which assistance is provided.

Existing tenants who occupied their apartment as of 9/11/01 and who apply for assistance will be eligible for an additional grant of $1,000.

Existing tenants must show that their rental payments are up to date (or have otherwise been lawfully placed in escrow).

Payments under the program will be made directly to eligible tenants for up to two years. One grant will be made per apartment.

Additional eligibility criteria regarding health, safety, and habitability of buildings may be applied.

For owner occupied housing:

Payments will be made available to:

(a) Existing owners who agree to remain for at least two years after the commencement date of the program.

(b) For new owners who purchase between 9/11/01 and 8/31/03 and who agree to remain for at least two years.

Only owner-occupied residences will be eligible for assistance. Owners who lease out their residences will not be eligible for this assistance, but their tenants will be eligible pursuant to Section 3.

Existing owners who occupied their apartment as of 9/11/01 and who apply for assistance will be eligible for an additional grant of $1,000.

Existing owners will be required to show that mortgage, maintenance and tax payments are current (or have otherwise been lawfully placed in escrow).

Number of units included in the program:

Housing units in the Immediate Impact Zone: 5,000

Housing units south of Canal Street (less Immediate Impact Zone): 22,200

Estimated program cost: Approximately $175,000,000 to $220,000,000 (assumes 80% to 100% participation)

Administration

It is anticipated that LMDC will contract with one or more entities to provide administrative services in connection with this housing assistance program.

Employment Training Assistance

Background

An array of job training programs is being provided through existing workforce development programs to help individuals affected by 9/11 obtain basic skills needed for employment in the New York City area. For example, New York State has received a $25 million National Emergency Grant from the federal government to provide job training, placement services, career counseling, resume preparation and access to job banks to individuals impacted by the attack. The grant, provided through the New York State Department of Labor to 14 organizations offering these services, will help workers dislocated as a result of the tragedy transition back into the workforce.

In addition, unemployed individuals can receive training vouchers valued at $4,000 through the Workforce Investment Act for training that prepares them for jobs that are in occupations in high demand.

However, to be effective in specific employment settings, new and existing employees often require specific skills not taught in traditional classroom training programs. The customized training needed by individuals for their particular jobs involves special preparation, often in on-the-job settings, in the use of proprietary work or production techniques.

Plan for Assistance

To help provide a better match between the skills offered by affected individuals and those needed by employers, this Plan will provide grants to businesses in the area south of 14^th Street. Such grants will prioritize individuals affected by 9/11, providing them with the skills they need to succeed at the specific work processes found at those businesses.

Assistance will be in the form of grants to businesses south of 14^th street. These grants will be used for training and retraining for skills specific to these businesses’ and employees’ needs.
Eligible firms must employ fewer than 500 people.
The maximum benefit will be 50% of eligible training costs.
Groups of small firms (so-called training consortia) will be eligible applicants, and could receive a fee of up to 5% of training costs for administration.
Up to $10 million will be allocated through this Plan.
ESD estimates that this program will provide assistance to approximately 5,000 individuals.

Administration

It is anticipated that the employment training assistance program will be administered by the Empire State Development Corporation.

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