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Sandy homeowners in and out of rental home market

31 Aug 2014

Sandy homeowners in and out of rental home market

Posted by with - in 2014

Margaret Quinn responded to 32 online ads, spoke with 14 real estate agents, went to 10 open houses, called four apartment complexes, asked FEMA for a trailer and sought advice from Gov. Chris Christie on how she could find a short-term rental for her family when it came time for her rebuilt house to be elevated.

“After we got married in 1990, we rented the house I grew up in,” said Quinn, who has owned and lived in her home on Bay Stream Drive for more than 20 years, “so renting to us is like a whole new concept.”

People like the Quinns have jumped in and out of the rental housing market since superstorm Sandy, revealing the meager supply of apartments and rental homes on the Shore and constricting it even further.

First, countless residents displaced by Sandy who sought apartments ended up couch-surfing with friends or family, hoping their story would draw some empathy from a landlord or real estate agent with an opening.

“When Sandy hit and we needed extra rental housing to accommodate those that were displaced, it just wasn’t there,” said Jim Hughes, the dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University and an expert on New Jersey housing.

Now, with 3,300 families moving off the Reconstruction, Rehabilitation, Elevation and Mitigation program waiting list in June and a total of 3,150 RREM awards pledged, a new wave of homeowners are having to search again for somewhere to stay while their houses are being elevated.

The latest vacancy rates released by the New Jersey Apartment Association show that 4 percent of rental units in Ocean County and 2.5 percent in Monmouth County were empty this past winter. That’s quite an improvement for Ocean County, where less than 1 percent of rentals were available during the winter of 2013, a period that started about two months after Sandy made landfall in New Jersey.

Even in a no-vacancy rental market, the vacancy rate still would be somewhere near 1 or 2 percent, Hughes said, simply because you’ll have a certain number of apartments that are between tenants when the survey is taken. He described 3 or 4 percent as “extremely tight.”

A desperate search

Doug Quinn, no relation to Margaret, and his 17-year-old daughter Megan were put up by a rotating list of friends after Sandy caused the Kettle Creek to rise up and into their Toms River home.

“I would pick up my daughter from school and then we’d have dinner at the diner and we would talk about whose house we wanted to stay at that night,” he recalled.

Quinn, not wanting to take a Federal Emergency Management Agency-paid hotel room far from his daughter’s school, remembers the desperation of his search. He looked at one place he called “a billy goat shack” and was ready to move into another — billed as an empty summer home — that looked like it belonged on the A&E show “Hoarders.”

“We spent exactly 20 minutes there,” Quinn said.

He eventually found a rental in Toms River, but he’s been there much longer than he had anticipated as he continues to challenge what he believes is a woefully low settlement offer from his flood insurance provider.

It’s never been easy to find a four-bedroom apartment for about $1,800 a month, said Jerry Lamberson, a Hazlet man who is living with his wife and six kids at a hotel for the time being.

But ever since Sandy, his options for affordable housing have dwindled as displaced homeowners scrambled to find what they thought would be temporary fix, but ended up staying much longer.

“If you do find something, now they want an arm and a leg for it, instead of just an arm,” joked Lamberson, who works at the hotel.

The U.S. Department of Housing and Urban Development’s Fair Market Rent measurement, which HUD uses in its housing voucher calculations, will rise 2 percent to $1,373 in Monmouth and Ocean counties in October, according to a proposed annual readjustment released on Aug. 15.

Median rent — half the rents were higher, half were lower — for a two-bedroom in Monmouth and Ocean counties actually dropped in this federal fiscal year, which ends Sept. 30. According to HUD, the typical two-bedroom in the two counties cost $1,444, compared to $1,515 in 2013 and $1,495 in 2012.

The Housing and Community Development Network of New Jersey posted a report earlier this week showing that 44 percent of the state’s low-income renters spent more than half of their income on rent and utilities.

“We’ve always had an affordability problem,” Hughes said, “but over the last year or so it’s moved to the center of the screen.”

For displaced homeowners, a $1,500 apartment might end up being more than the mortgage they are still paying for a home they can’t live in.

“I’ve exhausted (Sandy Homeowner Renter Assistance Program) benefits, I don’t get FEMA assistance anymore. There are still so many of us in this position,” Margaret Quinn said. “When we do rent somewhere, we will be paying our mortgage and we’re going to be paying for the rental.”

Rental assistance

The Ocean County Long Term Recovery Group, which coordinates disaster recovery efforts for qualifying individuals and families, said since July 1 there has been a “dramatic” rise in the calls to their office looking for rental assistance, according to executive director Sue Marticek.

A likely contributor to that spike is housing assistance programs are drying up, Marticek said, and people spent much more time in a rental than they had anticipated because of the glacial pace of programs like RREM.

To address the issue of supply, tens of millions of dollars in disaster aid financing is available for the creation of affordable rental housing, but that money is only meant to replenish the apartment units lost because of Sandy.

“Unfortunately, even after all of those homes will be built, the long-term shortage will still remain,” said Adam Gordon, an attorney for the Fair Share Housing Center, an affordable-housing advocate for low-income New Jerseyans.

To settle a complaint with housing and minority advocates, the state agreed on May 29 to spend an additional $215 million of its federal disaster aid allocation on multifamily housing construction. Per the agreement, the state must spend 52 percent of all disaster money dedicated to building duplexes and apartments in Monmouth and Ocean counties.

The state has committed about $40.6 million to seven projects in Ocean and Monmouth counties so far, including a new development that had a groundbreaking ceremony in Toms River on Aug. 20. Another seven are in the pipeline, according to Lisa Ryan, spokeswoman for the New Jersey Department of Community Affairs. All together those projects will create more than 1,000 affordable rental units in the two counties, and people displaced by Sandy have first crack at leasing in those apartments.

Apartment housing wasn’t being developed at the same pace after Sandy, according to building permit data gathered by the Census Bureau.

In Monmouth and Ocean counties, a total of 106 multifamily buildings have been permitted, accounting for 593 new units, from after Sandy and through June, the data shows. By comparison, in the 20 months before Sandy, building permits were obtained for 945 new rental units in the two counties.

So far, an estimated $606 million has been spent or committed to construct more than 3,000 new single-family homes after Sandy, or 14 times more than has been appropriated for multifamily buildings.

Skeptical of apartments 

Many Shore towns historically have been more welcoming to office and retail development and less so to apartment buildings, Gordon said.

Indeed, multifamily developers, such as Ron Ladell, senior vice president of AvalonBay Communities, say that towns they have sought to build in have expressed concerns that an apartment complex could “change the dynamic of that particular town.”

“The main reason is the fear that their municipal budget or school budget will be detrimentally affected,” Ladell said.

In Jackson, more than 1,300 apartment and townhouse units are part of a 273,000-square-foot commercial development that has already been approved, though the time line is still being worked out, according to Township Administrator Helene Schlegel. As a result, the 99-square-mile township would have concerns about additional apartment complexes because they could prompt an increase in the cost of providing services and “not only have an impact on the school system but on the municipality as a whole,” Schlegel said.

Municipalities have to consider not only the potential that new apartment housing will upset their finances but that it also could send the balance between total units and affordable units to a ratio that is unacceptable to the state.

“It’s not as though we’re close-minded about this stuff,” said Jay Lynch, planner for Toms River, “but when you make a decision like this, you have to examine the impacts on nearby properties and also how it affects these affordable housing numbers.”

Donna Blaze, CEO of the Affordable Housing Alliance, said there’s just not many available and suitable locations in Monmouth County. Securing the land and the right to develop apartments “is tedious in the best of circumstances,” she said.

About 95 percent of Brick is developed, according to Township Planner Mike Fowler, and all but one of the areas zoned for apartments are already built up.

The most likely type of growth in Brick would actually be redevelopment, he said. A cleared dirt lot in the heart of the township, which is to be transformed into a “live, work, play” community for homeowners, rentals and retailers, is one such location.

“The recession has really encouraged municipalities to look at their housing stock,” said Steve Santola, executive vice president and general counsel for Woodmont Properties, a real estate developer in Fairfield. “Office buildings and retail centers have become less of a tax base that you can rely on.”

Russ Zimmer: 732-557-5748,

Russ Zimmer, @RussZimmer12:38 a.m. EDT August 31, 2014

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