“I looked around and said, ‘Wait a minute, that treatment costs $100, and I can buy those cabinets for $500,'” Rodríguez said. “I know. I worked construction.”

Rodríguez was not the only homeowner who complained after the devastating storm that federal taxpayers were being charged far more for emergency home repairs than residents ever saw in improvements to their homes.

Extravagant markups, overhead and multiple levels of middlemen have helped lead to huge costs in the FEMA-financed repair program. Known as Tu Hogar Renace — Your Home Reborn — the program is spending $1.2 billion in Puerto Rico to repair up to 120,000 homes.

More than 60 percent of what FEMA is spending in the program, the largest emergency housing program in the agency’s history, is going toward overhead, profit and steep markups.

The significant costs of transportation, warehousing, insurance and other services that are built into the prices for repairs are not unusual for FEMA disaster relief programs, which reflect the substantial expense of operating in disaster zones. But in Puerto Rico those costs were often so much greater than what would have been possible if homeowners had done the work themselves that they caused a public uproar.

Contractors have said that the rates they collect cover a variety of expenses, including shipping fees, workers’ compensation insurance, vehicle and warehouse rental, taxes and profit. But prices charged for equipment and appliances often bore little relation to what was charged on the retail market, even in storm-ravaged Puerto Rico.

FEMA officials said the agency uses a nationwide construction cost database to establish prices, adjusted for “supply chain challenges” in a place such as Puerto Rico.

“Looking at individual line item prices can be inaccurate and misleading,” Michael Byrne, FEMA’s federal coordinating officer in Puerto Rico, said in a statement. “It doesn’t take into consideration the context of actual location, difficulty of installation and other factors.”

The New York Times

Frances Robles © 2018 The New York Times