"> Lack of Federal Support for Second Homes May Stunt Communities - Fineman, Krekstein, & Harris

Lack of Federal Support for Second Homes May Stunt Communities

Second homes have been excluded from federal support for rebuilding after Superstorm Sandy devastated the New Jersey shore. While there is limited political support for subsidizing vacation homes, the result may be many homes on the shore are not rebuilt, stunting the regrowth of communities along the Jersey shore.

Many homes on the shore have been passed down through generations, having been built in the World War II era when shore homes went for an average of $2,095. The mortgages on those homes were paid off long ago, and as a result, were not required to maintain flood insurance. Now homes go for at least 100 times more than that rate, limiting the number of families that can afford to restore a damaged home without federal assistance. Many homeowners have been forced to walk away from their homes, but that doesn’t mean the homes will disappear. Economists say the lack of support will leave “gap-tooth” areas in shore neighborhoods, which will stunt property values and make many people reluctant to invest in the area.

Many of the homeowners feel they are being shortchanged, given their tax contributions are the same as those who use the municipal services year-round. One vacation homeowner complained that while he pays full municipal taxes, he never sent his kids to school in the township where his vacation home is located, nor used many of the other resources municipal taxes fund. Vacation home owners are also angered by a program offering a $50,000 loan forgiveness for first-time homeowners who purchase homes in Sandy-affected areas. The homeowners feel it is a slap in the face to give financial support to people who weren’t affected by the storm and leave the current homeowners without assistance.