New York, New Jersey governors warn of long recovery from storms

New York, New Jersey governors warn of long recovery from storms Fri, Nov 09 21:10 PM EST 1 of 6 By Eddie Evans and Ernest Scheyder NEW YORK (Reuters) - Residents of New York and New Jersey were told on Friday to prepare for a long recovery from Superstorm Sandy, as thousands of people grappled with cleaning up their properties, the extended lack of electricity and gasoline shortages nine days after the storm. New Yorkers faced gasoline rationing for the first time since the energy crisis of the 1970s, as authorities tried to deal with long lines at gas stations and some commuters continued to struggle to get to and from work. The White House said President Barack Obama would visit the region next week. Sandy hammered the U.S. East Coast on October 29, killing at least 120 people and causing an estimated $50 billion in damage or economic losses. Then an early season snowstorm pummeled the region on Wednesday, knocking out power to some homes just as they were getting back on the grid. Rationing on Friday seemed to ease gas lines in New York, just as it did in New Jersey last week, and utilities reported that power was being restored to many homes. Some 434,000 homes and businesses in the Northeast lacked power as of Friday afternoon, down from 696,000 the previous day, the Energy Department said. But for coastal communities where thousands of homes were smashed, flooded, filled with sand or burned to the ground, full recovery would take a long time. "This is not going to be a short journey" for many communities, New York Governor Andrew Cuomo said at a news conference. And New Jersey Governor Chris Christie, after touring the Shore, said that many popular vacation spots will not be fully rebuilt by next summer. "This is our Katrina," he declared, referring to the hurricane that washed out New Orleans in 2005. LONG BEACH ISLAND TO REOPEN At Sea Bright, New Jersey, where Christie spoke to reporters, the boardwalk was buckled and the pier was "out to sea," he said. Christie said access to Long Beach Island, a popular summer destination evacuated October 29, would reopen on Saturday morning, giving residents their first chance to view the damage to their homes. Still, he said he expected power to be restored to 100 percent of his state by Saturday night. Christie, Cuomo and New York Mayor Michael Bloomberg all appeared to shift their focus from immediate recovery to long-term rebuilding. Bloomberg said New York City would work with federal authorities to provide electricians, plumbers and carpenters to people in the worst-hit coastal areas. He said some 40,000 homes in the Rockaways and other neighborhoods had suffered structural damage or salt water had eroded their electrical circuits and power could not be restored until they were sound. Bloomberg said the program, to be paid mostly by the Federal Emergency Management Agency, would be faster than asking individual homeowners to find contractors and would get people back in their homes by the end of the year. "We think we can kick-start this," he said. In the Long Island town of Oceanside, protesters - many without power - took to the streets chanting, "Where is LIPA? Where is LIPA?" LIPA is the Long Island Power Authority, a state-owned utility. In the Rockaways, a hard-hit area of Long Island, New York, that faces the ocean, a group of military veterans known as Team Rubicon helped residents shovel sand away from their homes, remove rotted drywall from basements and haul large items to the sidewalk. At the sidewalk, New York sanitation workers used huge tractors to scoop the debris into dump trucks that hauled it away. START OF GAS RATIONING Peter Meijer, a Team Rubicon member who said he just returned from a trip helping refugees in South Sudan, was glad to be helping. "This is more satisfying than even my time in the military," he said. Friday was the first day of gasoline rationing in New York City and some surrounding counties, a measure introduced by Bloomberg and Cuomo to ease long gasoline lines brought on by Sandy. Cars with odd- and even-numbered license plates will be able to buy gas and diesel fuel on alternate days. Ralph Bombardiere, executive director of the New York State Association of Service Stations and Repair Shops, said the situation was worse than the fuel crisis of the 1970s. "Back then there was just a perceived shortage of supply in New York, when there was plenty of gasoline around," he said. "Now we're having real distribution problems." While Sandy did disrupted the fuel supply to New York, Cuomo said the key problem was panic buying. "More than anything, we have to get buyers to relax," he said. Some 28 percent of gas stations in the New York metropolitan area did not have fuel available for sale on Friday, the same level as on Thursday, the U.S. Energy Information Administration said. With parts of the transportation network still damaged, the long lines at the pump added to the frustration of commuters, who must choose between driving and enduring seemingly interminable waits for buses and trains. The Morris Truck, which usually drives around Manhattan's midtown or financial districts selling $10 grilled cheese sandwiches, instead handed them out for free in the Rockaways, paid for by New York City. "I had no idea how bad it was out here until I came," said Kenan Fedele, who handed out more than 400 sandwiches and four gallons of spicy tomato bisque to victims of Sandy. The truck showed up around 11 a.m. and was out of sandwiches by 3:30 p.m., Fedele said. (Additional reporting by Dan Trotta, Edith Honan, Peter Rudegeair, David Sheppard and Jonathan Allen; Editing by Eric Walsh and Philip Barbara) ======================= How Much Will Hurricane Sandy Cost Insurance Companies? November 13, 2012 | Filed Under » Home Insurance, Personal Finance Just days after Hurricane Sandy pummelled the east coast of the United States, and made her historic turn inward towards the New Jersey coast, insurance estimates began rolling in, and the news wasn't good. The storm, which affected a broad area, particularly devastated the states of New Jersey, Pennsylvania, and New York. Many in the tri-state area and beyond suffered severe or moderate property damage, flooding, power outages and more. Now that the clean-up for Hurricane Sandy has begun, insurance companies are attempting to gauge just how expensive this catastrophic storm really was and what the real cost of this natural disaster looks like. Here is a look at preliminary figures from the damage Hurricane Sandy caused and an in-depth look at just how much money the superstorm is costing insurance companies as a result. Total Estimated Cost of Damage is Staggering The total estimated cost of damage wreaked by Hurricane Sandy is nothing short of staggering. An article released by the Associated Press on Nov. 2, 2012, estimates the total damage caused by Hurricane Sandy to be up to $50 billion. (The total was projected by Eqecat, a catastrophic risk management consulting firm, which indicated that the damage caused by the storm was between $30-$50 billion.) The damage is comprised of property damage, loss of business, an increase in living expenses and more. Cost to Insurance Companies Projected to Be Much Less Another finding in Eqecat's report is that although the total amount of damage is estimated at $50 billion, the costs that insurance companies will incur from Hurricane Sandy are considerably less. The report indicated that insurance companies can expect to pay between $10-$20 billion. The low end of this figure, while significantly reduced from that of the total damage incurred, is still a hefty price tag to pay. Hurricane Sandy is already more expensive than many severe hurricanes from the past, including 2008's Hurricane Ike, 2004's Hurricane Ivan and even the much overhyped Hurricane Irene from 2011. Why the Lower Price Tag for Insurance Companies? There are plenty of reasons why the insurance companies got a lower price tag. For one, many homeowners' insurance policies have tricks and do not cover the cost incurred from flooding. In order for flood claims to be paid, a consumer must have already purchased a flood policy prior to the arrival of Hurricane Sandy. In addition, the damage estimates include costs that are not covered by insurance policies such as loss of wages, power outages and increased costs of living expenses. High Short-Term Costs, Low Long-Term Effect While the staggering cost of Hurricane Sandy is still being calculated, insurance companies and risk management firms are trying to pinpoint whether the damage done is short-term or if it has the potential to cripple the economy and insurance industry on a long term or permanent level. According to an article released by the Huffington Post on Oct. 31, 2012, the rebuilding will start and continue at a feverish pace, and the economy will not be impacted over a long period of time. Meanwhile, an article released by SeekingAlpha.com projects that the insurance industry will take a hit, but quickly recover once the cleanup has been completed. The Bottom Line Hurricane Sandy ravaged the east coast and left New Jersey coastal towns, New York City and plenty of other locations with billions of dollars worth of damages. With cases of flooding, structural damage, power outages and more, the clean-up process for Sandy is certain to be long and expensive. Only time will tell if the numbers projected by Eqecat are correct, and as more reports of damage come through, it certainly seems as though the catastrophic risk management firm has done its homework. Let Sandy serve as a great reminder of how families should take appropriate measures for protecting their assets and finances from natural disasters. Read more: http://www.investopedia.com/financial-edge/1112/how-much-will-hurricane-sandy-cost-insurance-companies.aspx#ixzz2CfQQbP52 ====================== After Sandy, do you still want a beach house? Thu, Nov 15 05:53 AM EST (Linda Stern is a Reuters columnist. The opinions expressed are her own.) By Linda Stern WASHINGTON (Reuters) - The scenes rolling in from the New Jersey shore are devastating, and not just to the people whose homes were destroyed. Also damaged are the "retire with a water view" dreams of others who had aspired to vacation property and may have been thinking about beach real estate - until they saw what a storm like Sandy can do. Disclosure here: Along with my husband, I own a small beach townhouse condominium on the Delaware shore. And because of Sandy, we had to cancel a weekend's worth of concert tickets and family plans and instead head to the shore to make sure our place was still standing, and not full of water. It was safe and dry, but it hasn't always been so. As top floor owners, we've had to contend with nor'easter rain in our bedroom and roof repairs that took years to get right. And as members of a condo association, we would have been on the hook had flooding compromised the foundation underneath our neighbour's downstairs apartment. So we took ourselves out for a nice beach walk and some oysters, and talked about how much we dodged a bullet - this time. We also saw less-lucky neighbours bailing out their basements and grumbling about how much they would spend on the cleanup. After a big storm like that, some people will take their insurance settlements and walk away from properties that they will sell "as is" to undeterred buyers who think this is the time to pick up a beach bargain. Who's got it right? The National Association of Realtors, predictably, thinks it is the buyers. "There's intrinsic value to being by the shore," says spokesman Walter Molony. "It's a high desire that isn't going to go away." Maybe that's true, but satisfying that desire could cost more than you expect, and more than it used to. Here are some line items to consider before you ride in with your checkbook and start making offers. - Prices may rise, not fall. Stan Humphries, the chief economist for Zillow, the real estate research site, has observed that home prices typically rise about six months after an area is hit hard by hurricanes or other major natural events. Housing stock is depleted and new-construction costs are high. So, it's unlikely that you will pick up a big bargain, though some buyers are negotiating hard now on homes they were planning to buy before the storm hit. As always, people willing to buy "needs work" homes will get better prices. - Your flood insurance is going to get more expensive. If you own a home in a high-risk area, you're already paying about $275 a month for a policy that will cover a maximum amount of $250,000 for your building and $100,000 for its contents. Legislation that reauthorized the National Flood Insurance Program will require FEMA to eliminate subsidies and raise premiums on some properties. Premiums could go up by as much as 20 percent a year in some areas. Older "non primary" vacation homes will take a bigger hit: Their premiums are expected to rise 25 percent a year until they are fully covering the risk of flood. - That may be the only insurance you can get. Look at Florida for an example of what can happen to homeowners who live too close to the shore. Insurers like State Farm and Nationwide Insurance stopped writing new policies and raised rates aggressively on old ones. All across the country, insurers are revising their homeowners' policies to include hurricane and high-wind deductibles that run as high as 5 percent of the insured value of the home. Furthermore, some insurers charge more for some policies if the home is left vacant most of the time. - Your mortgage could cost more, too. Typically, a second-home mortgage doesn't cost very much more than one for a primary home as long as you can qualify for it on the basis of your income. If you need rental income to qualify for the mortgage, that's a different story. Expect to need a higher down payment - at least 20 percent - and to pay an interest rate that is roughly 0.5 percentage point higher, according to quotes from MortgageMarvel.com. - You're part of a club. Of course, many vacation places are simply single-family homes that owners tale care of themselves. (More about the expenses of that in a minute.) But condos and resort communities take care of maintenance for you, for a price. Our tiny place requires a monthly condo fee of $240, for example, and we don't have tennis courts or a pool, or lavish grounds or much of anything, save a parking lot and an exposed outside shower. And it's not just monthly maintenance. Everyone in a particular condo association pays when repairs are made to common areas like roofs, sidewalks and golf courses. When a building sustains significant damage, its condo association may eventually have to make a special assessment on all owners, asking them to pony up their share of the fixes. The last time our building needed new siding and a roof, we were assessed an extra $21,000. Not all owners were in a position to pay that and had to borrow the funds. - You're not there. It's not just your insurance that could cost more if you don't live near your vacation home. It's the emergency plumbing, lawn mowing and property management you might have to arrange from afar. With gasoline at or near $4 a gallon, the commuting costs aren't insignificant, especially if you have to race there in a hurry to board up windows or check on basements. And yes, if the roof fails and you don't have a condo association to fix it, it's on you to get it fixed. - Wear and tear is not insignificant. You can make money by renting out your beach home, but even the most careful and conscientious renters will break the window shades, wear out the sofa and track sand across the floors. You'll have to get everything sanded, cleaned, repaired and replaced often. Finally, don't forget friends. They will visit week after week. You'll have to feed them. That's the fun part, and the happiest expense on this long list. (Editing by Steve Orlofsky) ================ Buyers consider risks of beachfront homes after Sandy Wed, Nov 21 14:26 PM EST By Robin Respaut NEW YORK (Reuters) - Dina Anzalone thought buying her first home would be one of the most exciting experiences of her life. That is, until Superstorm Sandy struck a month before she and her husband were set to close on a house in the Rockaways, Queens. Located blocks from the ocean and the bay on a thin peninsula of land that makes up the coastal community of Belle Harbor in the Rockaways, Anzalone's prized colonial home with "old world charm" was inundated with 12 feet of seawater that filled the basement to the ceiling and a few feet of the first floor. "My husband and I struggled," said Anzalone, who ultimately decided to move forward with the purchase of the home worth around $750,000. "People think we're absolutely crazy." Throughout the New York metro area, Superstorm Sandy left behind difficult decisions for prospective buyers and sellers of damaged homes on the market. Some buyers have decided to move forward but now must negotiate how repairs will be completed. Others are reneging and looking for escape clauses in their contracts. Realtors are taking inventory of their listings in flooded neighborhoods, while banks are sending appraisers out in droves to re-evaluate homes in the wake of the storm. For the last eight years, Anzalone has rented in Brooklyn's Bay Ridge neighborhood with her husband and their 3-year-old daughter. Now, planning to go ahead with the purchase of the home in Rockaways, she expects home insurance premiums to rise 10 to 20 percent, and she is working with an attorney to negotiate with the seller to make necessary repairs. INSURANCE DECISION MORE IMPORTANT NOW Other buyers in contract have decided the risks are not worth closing the deal. Richard R. Rodriguez, a real estate attorney who represents Anzalone, is helping two other clients try to escape from contracts on homes that were damaged. "Everyone has the same concern: the neighborhood," and how it will recover, said Rodriguez. In one case, Rodriguez said he plans to use a clause in the buyer's contract that required the deal to close by the end of October, just two days after Sandy hit. The buyer will most likely lose a few thousand dollars by walking away, a cost Rodriguez considered "not bad." Attorney Jay Freedhand is representing a buyer who planned to close on a nearly $2 million home last week in Far Rockaway. But after the city's Department of Buildings deemed the house severely structurally damaged, the buyer wanted to renege. Freedhand is now looking for outlets to stop the sale stemming from the city's damage classification. "We don't know what that legally means," said Freedhand. "We need to figure out exactly what the government order actually means. That part is unprecedented." In hard-hit Hoboken, New Jersey, contracts began fraying shortly after the storm moved inland, even on homes that were not damaged by the storm. Gene Cordano, director of sales for Halstead Property in New Jersey, said he lost three deals in contract. "They decided they didn't want to deal with the possibility of flooding in the aftermath," said Cordano, who said he considered the loss "a blip on our radar screen." With some New Jersey residents dislocated by the storm, Cordano said he expects to see available housing units quickly filled. "The question being asked going forward is, ‘Did this building flood during the hurricane?' And that will be answered by, ‘yes,' in many cases," Cordano said. Of the roughly 140 properties listed in Hoboken, an estimated 56 percent were flooded or otherwise damaged in the storm, Prime Real Estate Group Co-Chief Executive Officer Jesse Halliburton said. "There is definitely going to be a time period when consumer confidence is going to be lower and less likely to make a quick decision," Halliburton said. "It's crossed my mind that property prices could drop," Halliburton said. Robin Shapiro of Robin Shapiro Realty said the sand drift against her own home in the Rockaways was 3-feet-high the day after the hurricane. After digging out, Shapiro said she fielded calls from real estate flippers looking for cheap deals, but Shapiro, who still lost two deals in contract after the storm, did not foresee prices would significantly decline. "There are only so many oceanfront properties," she said. Jonathan Miller, president of the real estate appraisal firm Miller Samuel, agreed buyers will continue to idolize beachfront properties, but a sobering effect on the market, should there be one, would most likely come from lenders and insurers. "It's going to come down to cost and access to credit. Lenders right now are essentially afraid of their own shadow. They are looking for reasons not to lend," said Miller. "Even if a home has flood insurance, lenders may be wary and look for a reason to not issue a mortgage." (Reporting by Robin Respaut; Editing by Jackie Frank) ==================