Photo credit – Eliud Echevarria: FEMA News Photo.

Sandy and the surges of water that accompanied her didn’t discriminate in terms of which lives, homes and businesses they devastated. People of all income levels and companies of all sizes were hard hit. Thousands in New York, New Jersey and Connecticut remain without power, hampering the relief effort. All of this is to say: there’s a long road ahead and communities must work with decision-makers now to create a plan for allocating reconstruction financial resources.

After past disasters such as the 9/11 attacks and Hurricane Katrina, Congress created federal assistance programs that became dominated by those that needed it least: large corporations and luxury housing developers. It’s safe to assume these interests, the typical beneficiaries of “disaster capitalism,” are trying to influence similar legislation after Sandy.

Post-September 11, 2001 federal resources helped firms that already had vast resources—such as Bank of America, Goldman Sachs and Morgan Stanley—or “small businesses” like boutique brokerage houses and law firms (see Good Jobs New York’s Database of Deals for more information). As recently reported by our Good Jobs First colleagues, in the wake of Hurricane Katrina, most of Louisiana’s allocation of the federal Gulf Opportunity Zone Bonds went to giant petrochemical companies not located in the hardest hit areas.

Here are some suggestions on how to do it right this time:

Do help small businesses get back on their feet quickly with a minimum of red tape. This includes helping them deal with private insurance carriers. Provide technical assistance that helps them firm up their operations by making them more sustainable.

Don’t prioritize luxury housing. Real estate interests made sure that 9/11 Liberty Bonds for Lower Manhattan had so few strings attached that they fueled housing for the fabulously wealthy and no new affordable housing construction.

Do focus on the needs of residents and small businesses most affected. Subsidies and/or other land-use policies shouldn’t displace existing or future generations from working and living in healthy, affordable neighborhoods. Private Activity Bonds after Hurricane Katrina were available to such a large geographic area that those who needed resources the most were left with little access to these funds.

Don’t ignore the needs of low-income workers. The 9/11 attacks had a huge direct impact on the financial sector of Lower Manhattan, but they also had a severe ripple effect on low-income workers; think of the baggage handlers at the airports, retail workers in Lower Manhattan or restaurant employees in Chinatown. Before Congress in 2007, Interfaith Worker Justice testified that after Katrina, loose regulations lowered wages and greatly undermined job standards.

Do subsidize projects that create high-road employment in both the construction industry and for permanent jobs. If recent reports are any indication, there are decades’ worth of employment opportunities. Many of the areas swept away or without heat and hot water are home to the poor and working class and between 70,000 and 80,000 residents of the New York City Housing Authority have been impacted by the storm. If these people don’t have decent -paying jobs to return to, it will have devastating long-term impacts on the economy

A message to Katrina victims from some community groups engaged in 9/11 rebuilding still rings true after Sandy: Officials at all levels of government, particularly in Congress, must consider four things before creating reconstruction subsidy programs:

1) Programs must be created using broadly democratic and transparent planning principles.

2) The allocation of funds must prioritize the creation of good jobs and building sustainable neighborhoods.

3) Programs must focus on fiscal stewardship by rebuilding infrastructure and public goods that will help existing businesses rebound and foster new ones.

4) Programs must incorporate clawback provisions to make sure that recipients (especially large firms) live up to those job-creation requirements. Some of the largest recipients of 9/11 funds had grants withheld or were forced to repay them after laying off workers.

Some might argue that these safeguards will slow the recovery from Sandy. We think the opposite is true: if loose rules allow big companies with the most lobbyists and consultants to hog the trough, the neighborhoods hit hardest will get short-changed and suffer longest.

Boat meets Metro-North Railroad in Westchester County, Photo credit: MTA Photos, Flicker

As New York, New Jersey and Connecticut begin the painstaking process of recovering from Hurricane Sandy, experts are estimating that the cost of cleaning up and rebuilding may top $50 billion. It’s likely— considering the dire state of roads, subways, bridges, commuter rail and other infrastructure–that the figure will escalate.

Using past disasters as an example, we can also expect that big business will seek to dominate the conversation and benefit most from the use of relief and rebuilding funds.

Billions of dollars in federal economic development aid was made available to New York after the attacks of September 11, 2001. Left out of much of the allocation and all of the decision-making were small businesses and low-income residents, especially in nearby areas of Chinatown and the Lower East Side. Much of the cash grants went to large business or wealthy “small” businesses like hedge funds and brokerages with few employees. Billions in Liberty Bonds went to building luxury housing in Lower Manhattan  and new headquarters for powerful financial firms like Goldman Sachs.  Good Jobs New York tracked these funds as part of our Reconstruction Watch project and in our Database of Deals.

How does this bode for an impending flood of rebuilding aid for the area? The answer is good and bad. Technology could be a great democratizer, and opportunities to educate taxpayers about proposals and get feedback are widely available. While acknowledging the existence of the digital divide, it has lessened dramatically since 9/11. Town halls, literal and virtual, are more accessible, (expect opinionated New Yorkers to chime in loudly once electricity is back online).  The bad part is that powerful business interests will be using their influence with policymakers to set the agenda while the rest of us are still preoccupied with recovering from the storm.

This week New York City announced two Hurricane Sandy recovery programs. A loan program capped at $10,000 for small firms and tax breaks for large firms spending more than half a million dollars on rebuilding. There are also “swing” spaces available in Brooklyn and The Bronx for displaced firms. Right out of the box, it looks like little has changed: small firms offered more debt and big firms with big checkbooks get tax breaks.

UPDATED Sunday, November 4: The New York City Economic Development Corporation (EDC) alerted us to the following:

• The emergency loan program for mid to small business has increased from $10,000 to $25,000 with a 1% interest rate starting at 6 months; zero interest before then.
• Free swing office space is now available in all boroughs.
• The EDC has established a business exchange. If you have goods or services to offer for free to impacted companies, the EDC will connect you.
• The New York City Industrial Development Agency is waving its fee for firms applying for benefits.

We will update this post as new details emerge. For more information and how to apply for these programs or to help visit the EDC’s Back to Business webpage.

Keeping in mind that these programs will most likely evolve and new ones created, we urge officials to use this tragic storm to make accountability, equity and transparency central to rebuilding our communities:

• Prioritize small businesses over giant ones.

• Hold public hearings and allow citizens to help shape how funds will be allocated.

• Post data on the web about which companies are receiving aid, whether there are any conditions on that assistance and whether those conditions are met.

• Use resources to leverage high-road job standards (good wages and benefits).

• Require funds for rebuilding to be sustainable for the environment and for future storms.  Wise public investment now will pay off in the future.

• Include stringent work-safety rules.

• Include clawback – money-back guarantee – provisions. This is especially important when it comes to large firms, which often make extravagant job-creation promises and then fall short.

• Existing transparency practices should be maintained, or even improved, for storm-related subsidies.

The allocation of discretionary economic subsidies has become more transparent in New York City in recent years (a fuller explanation is here), yet policies that include democratic planning principles is badly lacking in New York City and many surrounding areas. There is a long road of rebuilding ahead and public funds must be used efficiently. To help ensure this, leaders must bring community members to the table while decisions are being made.

If history is any gauge, the interests of big business have already landed on the table of decision makers. But there’s still time to create a future that gives priority to the creation of good jobs for people that need them and the rebuilding of sound infrastructure for all.