For San Luis Obispo resident Beth Wagner, shock stifled any other emotion while she watched helplessly from Los Angeles as rising water wrecked the interiors of both her house and rental property near San Luis Creek on Jan. 9.
“Our neighbor called us in a panic. We looked at our cameras and watched as our houses were inundated,” she said. “In the back house, it was about 3 feet of water at one point … everything we’ve worked for just obliterated in seconds.”
Like many residents in SLO County, Wagner attempted to get help from the Federal Emergency Management Agency (FEMA) soon after President Joe Biden’s emergency major disaster declaration. She visited the FEMA booth at the disaster relief center set up at the local Vets Hall, but quickly hit stumbling blocks.
“If you have flood insurance, which we did, and you have good credit, you’re screwed. You fall in the cracks,” Wagner said. “In the middle of the FEMA fair, when I realized there’s no help to be had here, I just broke down crying.”
She added that FEMA won’t help if someone facing damage has flood insurance. If they have good credit, Wagner said, FEMA recommends a Small Business Administration (SBA) loan. These loans have interest rates as low as 2.3 percent for homeowners and renters with terms up to 30 years.
But not everyone wants to take on a loan.
Wagner is one of them. Her insurance paid the base amount for damage, which doesn’t cover all the loss, but knocks her out of FEMA eligibility. Wagner then got approved for an SBA loan, but only for her primary residence. The government agency rejected her application for the back house she uses as a rental because they thought she wouldn’t be able to pay it off.
“We absolutely could repay it,” she said. “I’ll appeal that because we do need help. What’s annoying me is that people’s perspective around us in San Luis Obispo is, ‘Oh, you just need to go to the Vets Hall, you’ll get help.'”
Over the weekend of Feb. 11, Wagner finally got the second SBA loan approved. They told her they made a mistake, she said. But getting there took too long for Wagner. The loan amount wasn’t enough, and by then, she had already applied for credit card plans to pay for damage recovery.
The disaster recovery center at the SLO Veterans Hall closed on Feb. 14. Now, SLO County residents in need can visit the sites at Allan Hancock College in Santa Maria and the Ventura County Fairgrounds.
A series of rejections must take place before FEMA and the SBA can offer financial assistance. Renee Bafalis, the spokesperson for FEMA, told New Times that a person’s insurance coverage should be the priority before they seek additional aid. FEMA enters the picture only if insurance can’t cover the cost of damage, she said.
Bafalis also confirmed that FEMA doesn’t cover secondary property—like Wagner’s back house rental—and refers those owners to the SBA. If the SBA also rejects them for a loan, that opens the possibility of FEMA returning to take a second look.
“Our role is not to get you back to where you were prior to the storm happening. It’s only to jumpstart your recovery process,” Bafalis said. “We can help you with child care expenses during the time that you maybe didn’t have in the past because you have to do repairs to your home; if you have transportation issues; if you have medical and dental expenses, or even funeral expenses.”
As of Feb. 12, 1,828 people in SLO County had registered with FEMA for help. The federal agency committed roughly $2.8 million for housing assistance, and $103,729 for other needs. By Feb. 13, the SBA received 303 loan applications from county residents, and greenlit 106 of those. The SBA approved more than $4.7 million in loans for them—almost double the amount authorized for residents in neighboring Santa Barbara and Monterey counties combined.
That total is a testament to SLO County being classified as a “primary or designated county” under the presidential emergency declaration.
“What that means when I say a primary or designated county is that our federal program provides low-interest federal disaster loans to assist businesses and residents that may not be insured or may be under-insured as a result of the severe winter storms, flooding, landslides, and mudslides that began Dec. 27, 2022,” SBA spokesperson George Kostyrko told New Times.
The $4.7 million in loans includes aid to individuals and families that can total up to $200,000 to repair or replace real estate. Eligible homeowners and renters can receive loans up to $40,000 to replace personal property.
“We encourage people to complete the SBA application even if they are not sure if they need it yet. If approved, the loan becomes an option,” Kostyrko said.
But people like Wagner were left in the lurch. After receiving the initial SBA rejection for her rental, she called FEMA again hoping it would reconsider her case.
“There was just silence on the phone,” Wagner said of the FEMA staffer she was speaking with. “She said, ‘I don’t know, we can appeal your primary residence.’ But we already got a loan on our primary residence.”
Creston resident Stephanie Laird felt burned out by the application process. Parts of Laird’s 96-acre property were damaged and filled with debris after the Huer Huero Creek overflowed during the storm. While her raised house was unscathed, the debris and flooding blocked her from getting to the back of her property. She hired a backhoe operator on Jan. 11 who cleared 40 yards of debris, and she was still waiting to be billed for it as of Feb. 1.
Laird then sent an assistance application for debris clearance to FEMA but was rejected within an hour because her residence wasn’t damaged. The back-and-forth between her and the representatives tired her out.
“What I was told over the phone was completely contradicted by my case worker at the Vets Hall,” Laird said. “My caseworker said I was not flagged to fill out an SBA loan application. I was told over the phone that everybody has to have an SBA loan application for anything for FEMA. My caseworker said that wasn’t true.”
In a second phone call to FEMA, Laird’s caseworker asked if the agency had sent an inspector over to the property. But Laird hadn’t even been able to report any damage yet.
“When you fill out the application, they didn’t let me report any damage,” she said. “It asked if I had any damage to my home or personal property. I said no because my home didn’t, and I don’t know if fencing is considered personal property. I don’t know what the definition of that is.”
FEMA is encouraging people to seek help elsewhere, too. At the Vets Hall, a representative who requested anonymity told New Times that people like Laird who were facing dead ends could speak with the California Department of Insurance to contest their insurance coverage. Laird received additional advise from FEMA.
“They said they can’t help us and said to get ahold of possibly building and planning, and possibly the USDA [Department of Agriculture],” she said. Δ
Reach Staff Writer Bulbul Rajagopal at brajagopal@newtimesslo.com.
This article appears in Feb 16-26, 2023.