NJ Residents Faring Worse Than Neighbors in Hurricane Sandy Recovery

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It's been one year since Hurricane Sandy sacked the East Coast, turning homes and businesses upside down, and though billions of dollars in aid has been promised to rebuild affected areas, most victims have yet to replace what the floodwaters swept away.

Residents of New Jersey, where Gov. Chris Christie declared his state "open for business" before the summer season began, have waited longer than those in neighboring states for promised federal aid to help rebuild their homes.

How and where aid flows is a complex issue, driven by various levels of government, each with its own set of rules and timetables. For those affected by the storm, who are often battling insurance companies as well, it can be a frustrating struggle to return to normalcy.

And to the chagrin of many residents, those that do receive aid will not be allowed to touch the money until pre-approved contractors notify them that they are ready to begin working.

"I hear all these Jersey 'Stronger than the Storm' commercials and it really pisses me off, it's insulting. Christie will spend $20 million on a Sandy commercial and here I am waiting. I can't get any help," said Elena Pagonis, 41, whose Keansburg home was wrecked in the storm.

SEE ABC NEWS FULL COVERAGE OF THE HISTORIC STORM

Pagonis was referring to a $4 million commercial starring Christie, part of a $25 million aid package devoted to tourism to help spread the message that the Jersey Shore's boardwalks and businesses were back open for summer, even while residents are still living in temporary housing awaiting aid.

"New York has made a faster recovery than anywhere in New Jersey," said Mitchell Moss, a professor of urban policy and planning at New York University.

"The homeowners cannot seem to mobilize, the insurance companies have not moved fast enough, and despite Christie's initial statements and the boardwalks being back open, homeowners are still in bad shape," Moss said.

GOV. CHRISTIE ON RESPONSE TO STORM A YEAR LATER

After the storm hit in October 2012, it took Congress until January 2013, to approve a $60 billion aid package with an array of purposes: funding for FEMA and future disasters on the East Coast and around the country, money for infrastructure, and direct aid to victims.

States then were required to submit proposals for how to spend their share of the aid money.

But while New Jersey waited for federal approval for its plan, New York City responded to the storm's damage by tapping into city coffers to immediately get neighborhoods up and running again under its Rapid Recovery system, in which they restored utility services to get residents back in their homes quickly. The city is seeking to be reimbursed by the federal government now.

Meanwhile, the city, New York state, and New Jersey all submitted proposals for how to spend the federal aid, and received about the same amount devoted to housing: $720 million for housing rebuilding in New York City, $838 million in New York state, and $600 million in New Jersey.

SLIDESHOW: VIEWER-SUBMITTED PHOTOS OF THE STORM

But that money has been tied up in red tape for months in New Jersey.

In New York, an initial round of grants was awarded to about 4,300 residents, and the state is still accepting applications, according to the state's Storm Recovery office.

So far in New Jersey, about 130 applicants have completed their grant signings, and can expect their grant money soon. The state's Department of Community Affairs said another 200 can expect their grant signings through the end of this month, and more than 3,000 are still awaiting their letters. An additional 4,000 are still waiting to find out whether they will be approved at all, an answer that hinges on whether the federal government releases additional aid money.

The grants for rebuilding of up to $150,000 and can be used for construction and elevation of homes. Smaller grants of $10,000 have been handed out to more than 14,000 New Jersey residents but cannot be used for construction or home repair.

SLIDESHOW: LOST TREASURES OF SANDY

FEMA also distributed about $450 million for home repairs across all of the affected states right after the storm, according to the federal agency.

Gov. Christie's office did not return calls from ABC News seeking comment. In an interview with The Associated Press on Sunday he blamed the delays on federal red tape and Congress for taking three months to approve the aid package.

"We've done everything we possibly can, and I think in the immediate aftermath did a very good job," Christie told the AP. "Since then, we've kind of been hostage to two situations, the delay in the aid itself and then what I call the 'Katrina factor,' which is the much more detailed and difficult rules surrounding the distribution of the aid. To the victims, I'd say you're right, it is too slow, and I wish that the federal government would allow us the flexibility to get you aid more quickly."

Some 360,000 homes in the state were damaged in the storm, which was New Jersey's worst natural disaster in modern times.

When grantees do receive their rebuilding money, they won't be allowed to spend it themselves. Instead, the money will be placed in a bank account that pre-approved contractors can draw from once they start the construction work, a precaution against fraud put in place after problems arose in the aftermath of Katrina. Some residents there simply took their government checks and left town--many of those properties still sit abandoned eight years later.

Residents have expressed frustration at the byzantine system through which they have to go to get approvals, inspections and, finally, the grant money, all while the boardwalks and businesses lining the Jersey Shore reopened much more quickly.

"There was no red tape for the boardwalk. All the red tape was set aside for that. The most important thing was because it was so close to summer, to get the businesses back, the tourists back, and the money for the state," said Joanne Gwinn, whose Toms River home took on two feet of water from the Barnegat Bay during the flood surge.

"And we are boardwalk people, we are beach people, we live here, but it's frustrating when that's all you see and stories about 'we're back' but I'm still paying my rent in my apartment and my mortgage and property taxes and still paying my flood and insurance policies," Gwinn said.

New Jersey hired a Texas-based contractor that worked during Hurricane Katrina recovery, Hammerman & Gainer, Inc., to set up service centers to process applications, but residents have testified at state hearings about problems with the company, including the difficulty of reaching employees by phone, having paperwork misplaced, and being staffed by temporary workers, according to the Wall Street Journal. HGI did not respond to requests for comment from ABC News, but Cherie Pinac, HGI's chief operating officer, told the Journal that the company doesn't comment on continuing contracts as a policy and couldn't respond to questions about performance for programs.

Lisa Ryan, the spokeswoman for New Jersey's Department of Community Affairs, said she understands the frustration, but the DCA has actually moved quite quickly to set up an entire organization to begin distributing the funds.

"We understand folks' frustration--some people have been out of their home for a year now, but it's important to note our action plan was approved on April 29 and we didn't receive federal (Community Block Development Grant) Disaster Recovery funds until May. We are moving quickly compared to many other states after disaster."

Ryan said the DCA hopes to receive a new round of federal funding to approve more applicants. Until then, residents remain in limbo, waiting to see whether they will get the money to rebuild their homes. A spokesman for the Department of Housing and Urban Development said he could not comment on if or when states would receive another round of federal aid.

In the meantime, residents say they're being nickel-and-dimed by foot-dragging insurance companies and stuck in limbo with the DCA grants, while being sent through an endless task list of registering for permits and inspections followed by weeks or months of silence or denials.

"I'm fighting every step of the way with the very people I'm paying," Gwinn said.

"My insurance company has been fighting me, I've been trying to get in touch with the DCA and I can't. It's a game. It's just a game. It's ridiculous," Pagonis said. "Everybody's out for a buck."

For homeowners, relief cannot come soon enough.

"Here I am starting my life over again. Now I'm in North Jersey, I had to get a job up here to pay for stuff, I'm living in my parents' basement. My life completely turned upside down," Pagonis said.

I'm thankful we have a roof over our head but it's frustrating," Gwinn said. "Every time you take two steps forward you take 10 steps back."

Gwinn said she and her husband are in their early fifties, and their 26-year-old daughter lives with them while she saves to move out. She is worried that the couple is heading into retirement with major debt.

"We're going to have a mortgage until we die," she said. "That wasn't our plan."

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