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Economy & Business

Amid Concerns, New York Auctions Flood-Wrecked Wrecked Homes

SCOTT SIMON, HOST:

When Sandy struck the East Coast in 2012, it became one of the most devastating and costly storms in history. In New York, over a thousand people sold their ravaged homes to the state. The most damaged became open land, but now some are being resold at auction. They're fetching a fraction of their pre-Sandy value, and not everyone thinks that's a good deal. Member station WNYC's Stephen Nessen reports.

STEPHEN NESSEN, BYLINE: Ripping folders full of documents, eager homebuyers and developers file into a ballroom at a Hilton Garden Inn on Staten Island.

UNIDENTIFIED WOMAN: Photo ID and your $25,000 cashier's check.

NESSEN: They nervously display their $25,000 cashier's checks, the only prerequisite for bidding on the 61 properties. And they suss out the competition.

ALBERT PAYAH: Not happy seeing this. The enthusiasm just went down.

NESSEN: Forty-seven-year-old Staten Islander Albert Payah is hoping to score a deal on a small bungalow.

PAYAH: Especially when I see the Chinese people. They're going to overbid - that I know. They're known to pay top dollar for real estate.

NESSEN: Thirty-seven-year-old Danny Ling is with a group of fellow Chinese investors, and he has his own concerns.

DANNY LING: The Russian guys have money.

(LAUGHTER)

NESSEN: And then there's 55-year-old Thomas Cunsolo. He's been living in a cramped apartment since the storm destroyed his Staten Island home.

THOMAS CUNSOLO: I'm looking to get a bigger piece of property than I had so I could build back. I think the bigger the property, you can build back safer.

NESSEN: That was the ideal when the state bought the properties - that the new owners would lift and rebuild the homes to withstand rising sea levels and more intense and frequent storms. And the bidding? It's just like you'd imagine.

UNIDENTIFIED WOMAN: Ladies and gentlemen, this is going to be for round one - round one. (Unintelligible) a hundred thousand to start it off - a hundred thousand...

NESSEN: White cards pop up like bread out of a toaster and shoot back down again.

UNIDENTIFIED WOMAN: Two hundred thousand and 225.

NESSEN: Three auctioneers wade into the aisles and shout when they see a card, signifying a bid.

UNIDENTIFIED WOMAN: Five seventy five - (unintelligible) - now 600,000 - last call.

UNIDENTIFIED WOMAN: (Inaudible).

UNIDENTIFIED WOMAN: Sold - $575,000.

NESSEN: 33-year-old Homeland Security officer, soon have fourth child, chooses a large home in Howard Beach.

UNIDENTIFIED WOMAN: Five-two-one in Queens is now off the board.

NESSEN: And that property is blacked out on the screen, like on a bingo card. After several dozen rounds, the bids get lower and lower, down to $35,000. Those hopeful guys we just met - they leave empty-handed. But Angela Tenteromano Nickel, a registered nurse from Great Kills, is the winner of a small two-story home in the same neighborhood. She says there were two reason she came out.

ANGELA NICKEL: To make some money and to better the community.

NESSEN: She wants to fix the home and rent it to her kids. She'll pay a hundred sixty thousand dollars for the beige clapboard home with a rotting shed in the back. It was valued at nearly twice that before Sandy. As for the next storm...

TENTEROMANO NICKEL: It worries the [expletive] out of me.

NESSEN: But in the meantime, she has work to do.

TENTEROMANO NICKEL: Renovate it, fix it up, rent it, lift it. It's going to be a lot of work.

NESSEN: But Eric Goldstein with the Natural Resources Defense Council says buyer beware.

ERIC GOLDSTEIN: The concern is that what's being sold here may be fool's gold.

NESSEN: He questions why New York State is encouraging people to rebuild in what was a deadly flood zone.

GOLDSTEIN: Even if a home is elevated, that doesn't mean that the car that's in the driveway or the senior citizen who's walking in the street is protected. There are all kinds of costs to governmental agencies for essential services during storms and rescue.

NESSEN: On the upside, the proceeds from these auctions will go toward affordable housing and public housing. And there are still more properties the state plans to auction soon. For NPR News, I'm Stephen Nessen in New York. Transcript provided by NPR, Copyright NPR.