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THE COURIER/Photo by Melissa Chan
THE COURIER/Photo by Melissa Chan
Local leaders want FEMA to make co-ops eligible for recovery grants. From left are Friedrich, City Councilmember Mark Weprin, Israel and State Senator Tony Avella.

A glitch in the law is keeping co-op owners from receiving federal storm recovery grants, officials said.

According to Congressmember Steve Israel, co-ops are shouldering the costs of repair for Sandy-inflicted damages because they are categorized as “business associations,” making them ineligible for federal grants — only loans.

The Stafford Act, which governs how the Federal Emergency Management Agency (FEMA) responds to major disasters, does not include the word “co-op” in the law, Israel said. But there is no statute that purposefully bans co-op owners from being eligible for grants, a privilege given to homeowners.

“FEMA is taking an overzealous interpretation to this,” said Israel. “It discriminates against co-op owners. It’s one thing to be devastated by a hurricane. It’s another to be devastated by a loophole.”

Cryder Point Co-ops suffered $1 million in damage that left their waterfront community’s pier in shambles, said Phil Resnick, vice president of the co-op’s board of directors.

More than half of the total buildings in Glen Oaks Village endured “moderate to severe shingle loss,” leading to $250,000 in infrastructural damages, said Bob Friedrich, the co-op’s president. The unbudgeted costs also include the removal of downed trees.

“Housing co-ops are not business associations. We do not generate income based on corporate or private profit,” said Warren Schreiber, president of the Bay Terrace Community Alliance. “Many middle-class shareholders who are already experiencing financial difficulties will not be able to absorb the additional charges.”

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