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New York and New Jersey will receive about $2.5 billion of the remaining $3.6 billion of federal rebuilding funds after superstorm Sandy, a government official said Friday.

That sum is less than what local officials say is needed to finish repairing homes and building major infrastructure projects.

Elected officials have advocated that the region should receive the vast majority of the final round of funding from the U.S. Department of Housing and Urban Development, saying billions of dollars of work is still left to be done.

Destruction in Seaside Heights, N.J., left in the wake of superstorm Sandy in 2012. Associated Press

New York City will receive about $994 million, New Jersey will receive about $882 million and New York state will receive about $606 million, according to a government official. Connecticut and Rhode Island will also receive a small share.

New Jersey has more than $10 billion in unmet needs, according to an official in Gov. Chris Christie's administration.

New York City officials have said they need $1 billion to finish rebuilding all of the homes hit by Sandy and billions more to complete some of the ambitious resiliency proposals by former Mayor Michael Bloomberg, including an elevated neighborhood on the east side of lower Manhattan to act as a buffer against future storms.

HUD officials said the funds will cover the remaining housing needs in New York City and New Jersey.

The funding will "reach everyone on their current housing waiting lists," said Melanie Roussell, assistant secretary for public affairs at HUD. "We will continue working with the grantees to ensure they have the resources they need to help families get back into their homes, and to rebuild smarter and stronger."

A spokeswoman for Mayor Bill de Blasio said the city plans to spend $640 million on housing and the remaining $354 million on resiliency. She said the city has been able to reallocate additional funds so that all homeowners in the city will get enough money to finish rebuilding or repairing their homes.

Those new funds combined with the federal money "ensures that we'll be able to provide the support that every homeowner" deserves, Mr. de Blasio said through the spokeswoman.

HUD hasn't yet made a decision about how to distribute the remaining $1.1 billion, federal officials said. The Wall Street Journal previously reported that HUD is considering holding a national resiliency competition to distribute the funding across the country, according to people briefed on the proposal.

A Christie administration official said they were told a fourth round of funding would include a national Rebuild by Design contest and the state would compete for funding.

"That's lower than what we think New York City needs to fully recover," said Susannah Dyen, coordinator for the Alliance for a Just Rebuilding, a coalition of community groups and advocates. Ms. Dyen said the city should advocate for more money from the federal government and use some of its own funds to finish rebuilding.

Congress set aside about $60 billion in 2013 for Sandy aid after a contentious debate. The largest portion—more than $15 billion—went to HUD for distribution to the local level. HUD has allocated about $10.5 billion so far, primarily to New York City, New York state and New Jersey, officials said.

HUD officials have said that spreading the funds around to disasters other than Sandy that occurred in 2011, 2012 or 2013 is required by federal law.


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