[House Hearing, 110 Congress]
[From the U.S. Government Printing Office]

                      AFFORDABLE HOUSING NEEDS IN 
                      THE CITY OF HOUSTON: UNIQUE 


                             FIELD HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON

                                 OF THE


                     U.S. HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION


                            OCTOBER 29, 2007


       Printed for the use of the Committee on Financial Services

                           Serial No. 110-76

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                 BARNEY FRANK, Massachusetts, Chairman

PAUL E. KANJORSKI, Pennsylvania      SPENCER BACHUS, Alabama
MAXINE WATERS, California            RICHARD H. BAKER, Louisiana
LUIS V. GUTIERREZ, Illinois          MICHAEL N. CASTLE, Delaware
NYDIA M. VELAZQUEZ, New York         PETER T. KING, New York
MELVIN L. WATT, North Carolina       EDWARD R. ROYCE, California
GARY L. ACKERMAN, New York           FRANK D. LUCAS, Oklahoma
JULIA CARSON, Indiana                RON PAUL, Texas
BRAD SHERMAN, California             STEVEN C. LaTOURETTE, Ohio
GREGORY W. MEEKS, New York           DONALD A. MANZULLO, Illinois
DENNIS MOORE, Kansas                 WALTER B. JONES, Jr., North 
MICHAEL E. CAPUANO, Massachusetts        Carolina
RUBEN HINOJOSA, Texas                JUDY BIGGERT, Illinois
WM. LACY CLAY, Missouri              CHRISTOPHER SHAYS, Connecticut
CAROLYN McCARTHY, New York           GARY G. MILLER, California
JOE BACA, California                 SHELLEY MOORE CAPITO, West 
STEPHEN F. LYNCH, Massachusetts          Virginia
BRAD MILLER, North Carolina          TOM FEENEY, Florida
DAVID SCOTT, Georgia                 JEB HENSARLING, Texas
AL GREEN, Texas                      SCOTT GARRETT, New Jersey
EMANUEL CLEAVER, Missouri            GINNY BROWN-WAITE, Florida
MELISSA L. BEAN, Illinois            J. GRESHAM BARRETT, South Carolina
GWEN MOORE, Wisconsin,               JIM GERLACH, Pennsylvania
LINCOLN DAVIS, Tennessee             STEVAN PEARCE, New Mexico
ALBIO SIRES, New Jersey              RANDY NEUGEBAUER, Texas
PAUL W. HODES, New Hampshire         TOM PRICE, Georgia
KEITH ELLISON, Minnesota             GEOFF DAVIS, Kentucky
RON KLEIN, Florida                   PATRICK T. McHENRY, North Carolina
TIM MAHONEY, Florida                 JOHN CAMPBELL, California
CHARLES A. WILSON, Ohio              ADAM PUTNAM, Florida
ED PERLMUTTER, Colorado              MICHELE BACHMANN, Minnesota
JOE DONNELLY, Indiana                THADDEUS G. McCOTTER, Michigan
ROBERT WEXLER, Florida               KEVIN McCARTHY, California
DAN BOREN, Oklahoma

        Jeanne M. Roslanowick, Staff Director and Chief Counsel
           Subcommittee on Housing and Community Opportunity

                 MAXINE WATERS, California, Chairwoman

JULIA CARSON, Indiana                    Virginia
STEPHEN F. LYNCH, Massachusetts      STEVAN PEARCE, New Mexico
EMANUEL CLEAVER, Missouri            PETER T. KING, New York
AL GREEN, Texas                      CHRISTOPHER SHAYS, Connecticut
WM. LACY CLAY, Missouri              GARY G. MILLER, California
GWEN MOORE, Wisconsin,                   Virginia
ALBIO SIRES, New Jersey              SCOTT GARRETT, New Jersey
KEITH ELLISON, Minnesota             RANDY NEUGEBAUER, Texas
CHARLES A. WILSON, Ohio              GEOFF DAVIS, Kentucky
JOE DONNELLY, Indiana                THADDEUS G. McCOTTER, Michigan
BARNEY FRANK, Massachusetts          KEVIN McCARTHY, California

                            C O N T E N T S

Hearing held on:
    October 29, 2007.............................................     1
    October 29, 2007.............................................    43

                        Monday, October 29, 2007

Allison, Horace, Senior Vice President, Housing Authority of the 
  City of Houston................................................    14
Bustamante, Daniel, Executive Director, Greater Houston Fair 
  Housing Center.................................................    34
Celli, Richard S., Director, City of Houston Housing and 
  Community Development Department...............................    13
Gerber, Michael, Executive Director, Texas Department of Housing 
  and Community Affairs..........................................    11
Henneberger, John, Co-Director, Texas Low Income Housing 
  Information Service............................................    26
Junor, Debra, Member, Texas Tenants' Union.......................    31
McElroy, Toni, President, Texas ACORN............................    33
Muhammad, Robert, Chief Executive Officer, ACTION Community 
  Development Corporation........................................    29
Ozdinec, Milan, Deputy Assistant Secretary for Public Housing and 
  Voucher Programs, U.S. Department of Housing and Urban 
  Development....................................................     9
Quan, Gordon, Founding Partner, Quan, Burdette and Perez, on 
  behalf of the National Coalition for Asian Pacific American 
  Community Development..........................................    36


Prepared statements:
    Bustamante, Daniel...........................................    44
    Celli, Richard S.............................................    57
    Gerber, Michael..............................................    60
    Henneberger, John............................................    71
    Junor, Debra.................................................    93
    Lopez, Manuel................................................   101
    McElroy, Toni................................................   104
    Muhammad, Robert.............................................   110
    Ozdinec, Milan...............................................   114

                      AFFORDABLE HOUSING NEEDS IN 
                      THE CITY OF HOUSTON: UNIQUE 


                        Monday, October 29, 2007

             U.S. House of Representatives,
                        Subcommittee on Housing and
                             Community Opportunity,
                           Committee on Financial Services,
                                                   Washington, D.C.
    The subcommittee met, pursuant to notice, at Houston 
Baptist University, Belin Chapel, 7502 Fondren Road, Houston, 
Texas, Hon. Maxine Waters [chairwoman of the subcommittee] 
    Members present: Representatives Waters and Green.
    Also present: Representative Jackson Lee.
    Chairwoman Waters. Good morning, ladies and gentlemen. I'd 
like to start by thanking President Robert Sloan and the 
Houston Baptist University for allowing us to use this 
wonderful space for today's hearing on ``Affordable Housing 
Needs in the City of Houston: Unique Challenges and 
Opportunities.'' It's a beautiful campus. This is a beautiful 
auditorium. And let's just give the president a round of 
applause to thank him. Where are you, President Sloan? There he 
is, in the back. Thank you so very, very much.
    Mr. Sloan. Thank you.
    Chairwoman Waters. I'd also like to thank Congressman Al 
Green for inviting me here today. And upon learning about this 
hearing that was being held by the subcommittee that I chair 
and where Mr. Green serves, your other Congressperson of the 
area, Ms. Sheila Jackson Lee, said, ``I would like to 
participate.'' Let's thank her for being here.
    I'm very pleased to hold today's hearing for several 
reasons. First, as I said, Representative Green asked me to. 
And whenever he makes a request, I do my best to comply. That 
is because Representative Green is simply the most committed 
member of my subcommittee. We have many scheduling commitments 
as Members of Congress. Representative Green, for example, 
serves on the critical Homeland Security Committee as well as 
facing the demands of the full Financial Services Committee 
which has been extraordinarily active this season due to recent 
events in the economy and the leadership of our chairman, 
Chairman Barney Frank. Yet as we prepared for this hearing, my 
staff confirmed what I had already suspected, namely that Mr. 
Green is the only member of the subcommittee to have attended 
every single one of our hearings this session. He has perfect 
    Mr. Green. Thank you.
    Chairwoman Waters. And he deserves much more than just a 
gold star for attendance. Representative Green is a consistent 
voice for the poorest, most vulnerable residents of Houston, 
Harris County, and the Nation when it comes to Federal housing 
policy decisions, whether they take place within our 
subcommittee, at the full committee level, or even on the Floor 
of the House itself. In the subcommittee, I can always count on 
him. Indeed, he ably stepped in for me as chair recently when 
my own multiple committee assignments forced me to miss a 
portion of one of our subcommittee's hearings on homelessness. 
At the full committee, during consideration of our Section 8 
voucher reform bill, Representative Green offered a successful 
amendment to authorize desperately needed additional housing 
vouchers in recognition that we need to do more than just 
improve existing Federal housing programs. We need to expand 
them after many, many years of neglect. Finally, earlier this 
month, Representative Green spoke eloquently on the House Floor 
in support of the National Affordable Housing Trust Fund Act, 
whose passage by the full House stands as perhaps our 
committee's proudest accomplishment this year.
    Representative Green is also an innovative legislator in 
his own right. I look forward to hearing from all of the 
witnesses today about the potential impact of a bill that he 
has introduced, H.R. 2629, the Housing Fairness Act of 2007, 
which would reinvigorate the Department of Housing and Urban 
Development's enforcement of the Nation's fair housing laws. He 
is also the lead sponsor of H.R. 3329, the Homes for Heroes 
Act, which would devote substantial new resources to the 
housing and supportive services needs of America's veterans, an 
absolute necessity in these times, as we all know.
    Now, before I highlight additional reasons why this hearing 
is so timely and appropriate, I would like to acknowledge 
Representative Jackson Lee. While I do not have her serving on 
the Housing Subcommittee, she has many accomplishments that she 
can be proud of, because in addition to the work that she does 
on the Judiciary Committee--where I serve with her--she is 
serving on three of the most influential committees in the 
Congress of the United States. Again, in addition to the 
Judiciary Committee, she is on the Homeland Security Committee 
and the Foreign Affairs Committee. So I'm very pleased that 
she's been able to join us today. And she has worked with 
Representative Green as they have both been extraordinary 
advocates on behalf of the victims of Hurricanes Katrina and 
Rita and the housing of the Houston region which has been so 
affected. They have both been staunch allies in the fight to 
push for my legislation, H.R. 1227, which is known as the Gulf 
Coast Hurricane Housing Recovery Act of 2007, through the 
    Again, I'm pleased to hold this hearing because the 
affordable housing needs in Houston are quite unique. As the 
Nation's fourth largest city and one of the fastest growing, 
Houston boasts one of the most diverse populations in the 
Nation. As the title of the hearing suggests, Houston's 
circumstances provide for both challenges and opportunities. On 
one hand, as one who comes from Los Angeles where the median 
home price is $529,000, the housing costs in Houston seem 
downright reasonable. It is nearly $400,000 less than that to 
purchase a median home here. I think the median here is about 
what, Mr. Green, $156,000?
    Mr. Green. $154,900.
    Chairwoman Waters. $154,900. That seems awfully reasonable 
to those of us who come from California. However, when we look 
at the number of people who have very low incomes, and are just 
barely making it, that can be very high. People are paying more 
than 30 percent of that income for housing. These costs, as 
well as flexible zoning environments, make development of 
additional affordable housing here perhaps more feasible than 
in some of the major metropolitan areas. On the other hand, 
reasonable does not necessarily mean affordable, nor can 
affordable housing be developed anywhere no matter the economic 
and regulatory climate without the resources to do it.
    Nearly one-third of Houston homeowners and over half of all 
renters in the Houston metropolitan area again, as I indicated, 
spend more than 30 percent of monthly pretax income on all 
housing costs making them housing cost burdened as defined by 
the Department of Housing and Urban Development. Fully a 
quarter of renters pay more than 50 percent of their income in 
rent unsustainable for households over the long term. And as in 
every community in the country, working no longer guarantees 
being able to afford housing in Houston. The National Low 
Income Housing Coalition estimates that in order to afford a 
reasonable two-bedroom apartment here, a renter would have to 
earn $14.77 an hour, more than 2\1/2\ times the minimum wage.
    Also, like most communities in the Nation, the Federal 
housing resources available in Houston don't come close to 
meeting the need. Across the country, only one out of four 
households eligible for Federal housing assistance receive it. 
Here, this manifests itself in waiting lists numbering in the 
thousands for the Houston Housing Authority Section 8 vouchers 
and public housing units. Houston's booming growth is now 
threatened by the recent crisis in the subprime mortgage 
market. The foreclosure rates here are not among the highest in 
the Nation, but they are still significant. And this market 
experienced double-digit drops in both home prices and housing 
starts last month.
    Added to these challenges, of course, is the continued 
impact of Gulf Coast hurricanes. The nearly 200,000 evacuees 
who initially came to Houston constituted the equivalent of the 
entire City of Shreveport, one of the Nation's 100 largest 
cities, suddenly being dropped in Houston's lap. Nearly half of 
the evacuees remain here. The generosity shown by the City and 
its residents has been extraordinary.
    Representatives Green, Jackson Lee, and I have just had the 
opportunity to observe some of the excellent work that has been 
done here, but, of course, there have been bumps in the road 
along with the successes. I'm sure that we will hear about both 
today. I want to assure you that as chair of the Housing and 
Community Opportunity Subcommittee, I am indeed committed to 
helping Houston meet all of its affordable housing needs, both 
those that existed before Hurricanes Katrina and Rita and 
additional ones that have been created by the hurricanes.
    Not only am I committed because of the wonderful advocacy 
of Mr. Green and Ms. Lee and others, as you know, my husband is 
from Houston. And so I have to honor him and his family also. 
Not only do I have to work for Los Angeles and California, but 
I have to work for Houston and Texas, also. So with that, I 
want to recognize Representative Green for his opening 
    Mr. Green. Thank you, Madam Chairwoman. Friends, this is 
indeed a great occasion, because today the Congress of the 
United States of America via its Housing Subcommittee has 
convened in Houston, Texas. It is historical. And I am so 
honored, I cannot tell you what a preeminent privilege it is. 
In fact, it is a superlative pleasure and a splendiferous honor 
to be seated next to the Honorable Maxine Waters, the 
preeminent authority. The preeminent authority, that's right. 
Give her a big Texas-size welcome. If you love Maxine Waters 
and you know it, you ought to stand up and show it. Give her 
the kind of welcome that she merits for bringing this committee 
to Houston, Texas. Give it to her.
    Friends, in the United States Congress, the Congressional 
Black Caucus, with its 43 members, is considered the conscience 
of the United States Congress. I would have you know that the 
Honorable Maxine Waters is considered the conscience of the 
conscience of the United States Congress. Maxine Waters.
    By way of some information that is of benefit to you that 
will, of course, coincide with much of what we'll talk about 
today, I need to share the following: There was an effort to 
raise the minimum wage in this country. It took 10 years to get 
it done. Throughout the entirety of the 10-year period, the 
Honorable Maxine Waters was at the very forefront of that 
movement. She was a part of the movement to raise the minimum 
wage, and I say thank God that this Congress has now raised the 
minimum wage to $5.85 an hour. It's not what it should be, but 
thank God it isn't what it was. We have raised the minimum 
    It's important to talk about this minimum wage because, 
when we talk about affordable housing, people who are among the 
least, the last, and the lost need affordable housing too. And 
they need to be able to have the dignity of earning an income 
so that they can pay their own way. No one wants to be on 
welfare. Every person wants to say farewell to welfare. A 
decent day's wage for a decent day's work is a means by which 
people can say farewell to welfare. She has been a part of that 
effort to help people get that decent day's wage.
    But more importantly--and as important as it is, I will say 
more importantly, this Housing Trust Fund that she mentioned, 
friends, it is unheard of in the annals of U.S. history to have 
an Affordable Housing Trust Fund dedicated to the preservation 
of affordable housing, to the construction of affordable 
housing, to the renovation of affordable housing, dedicated to 
maintaining a sufficient stock of affordable housing to meet 
the needs of those in this country who do not have affordable 
housing. This Affordable Housing Trust Fund will be funded with 
money from the GSE, Fannie Mae and Freddie Mac, about $700 
million annually, and money from FHA, about $300 million. This 
is a significant number. We're talking about approximately $1 
billion annually for affordable housing. And it is something 
that we can thank the Honorable Maxine Waters for. I will also 
tell you that I have been so blessed to serve on a committee 
with her and to serve on a committee that is also under the 
leadership of the Honorable Barney Frank. And when my 
subcommittee chair and my full committee chair are working in 
sync and harmony, if you will, it really makes it easy for us 
to get some of the things done that you want to have us do. So 
I'm very appreciative that she has come today and she is here 
to hear from us and understand what our needs are here in 
Houston, Texas, and we do have some needs.
    I also want to say to you that I'm honored to have the 
Honorable Sheila Jackson Lee here with us as well. She and I 
are working together on a good number of projects, not only in 
Congress but also here locally, that while they may not seem to 
relate to the congressional effort, we are elected to help in 
any way that we can, and we do so. And I ask that you give her 
an expression of appreciation, as well.
    Finally, before I give you just a bit of statistical 
information--and I don't want to overwhelm you because we have 
capable, confident, qualified experts who will impart this 
information to you, but I do want say this finally before I go 
to this information. When Katrina hit Louisiana, it was 
necessary for Members of Congress to go there. I know of at 
least five occasions wherein the Honorable Maxine Waters went. 
But I want to tell you about one mall incident, just a brief 
vignette, to give you some understanding of how she relates to 
    We had a lady who wanted us to go and see how her home had 
been flooded, and it was a consensus that we didn't have enough 
time, that it was just really not available for us at that time 
to do this. I want you to know that when she overheard that 
conversation, she stepped up and said, ``We will go, we will 
see, and we will hear.'' No one in her world is above the law, 
and thank God in her world no one is beneath the law. Every 
person merits consideration of the law.
    With reference to my City of Houston, Texas, we define 
affordable housing at the national level as spending no more 
than 30 percent of your income, your gross income, on housing. 
I regret to inform you that in our City, we have many persons 
who are exceeding that and exceeding 50 percent, but also when 
you add housing and transportation into the equation, we find 
that the average family is spending about 56 percent of their 
income on housing and transportation. Now, if you're spending 
50 percent of your income on housing and transportation, that 
doesn't leave a lot for the necessities of life other than 
housing--clothing, food, and some of the other amenities that 
you need to live, as well. So we're here today to hear from the 
experts and ask that they would give us the insight that we 
need so that we can go back to the Congress of the United 
States and be efficacious in the effort to make sure that the 
needs of all persons in this country are met with reference to 
housing. Every person ought to have a place to call home. We 
are here to meet these needs.
    Finally, we have people who are homeless in Houston, Texas, 
and the statistical information is quite shocking. For fear 
that I may not recite it all absolutely correctly, I'd like to 
just read to you some of this information: At any point in 
Houston, Texas, we have about 12,000 to 14,000 people who are 
experiencing homelessness. And in this group of people who are 
experiencing homelessness, about 11 percent are there because 
of domestic violence; about 24 percent are there because they 
have been incarcerated and they are back trying to make their 
way through life; about 28 percent of them are veterans; 55 
percent have some mental health issues; 57 percent have had 
some sort of history of substance abuse; 59 percent lost their 
housing because they lost their job; and 66 percent have no 
income at all. These numbers don't add up to 100 percent 
because many of the persons will fall into multiple classes. We 
have persons who have no jobs, who have substance abuse, who 
may have some mental concerns that should be addressed.
    So as we look to acquire our intelligence on housing, we 
want to remember that we have the homeless, we have those who 
are working and still cannot afford housing, and then, of 
course, we have those who want to buy homes and would like to 
have the opportunity to have a home and not get caught up in a 
subprime market or, even worse, a predatory market such that 
they find themselves only expending capital, not acquiring 
equity and not building wealth.
    I want to thank you again, Congresswoman, for convening 
this hearing in Houston, Texas. I think I speak for all of 
Houston when I say we will be eternally grateful that Houston 
is now going to be a part of the focus, if you will, of the 
housing issues in the United States of America. Thank you.
    Chairwoman Waters. Thank you. Thank you, Congressman, for 
that opening statement. We have such an appreciation for his 
passion, and we just love his vocabulary. Okay. Without 
objection, Ms. Jackson Lee will be considered a member of the 
subcommittee for the duration of this hearing. And with that, I 
recognize Ms. Lee for her opening statement also.
    Ms. Jackson Lee. Thank you, Madam Chairwoman. And, again, 
let me offer a deeply appreciated welcome on behalf of all of 
the citizens of Houston in every congressional district that we 
have the privilege of sending to the United States Congress. I 
might leave off the concept that there was a change in 2007. I 
won't be pointed in that. But that allowed Maxine Waters to 
become the chairwoman of this subcommittee. You can see what a 
difference a day makes in terms of the focus and the compassion 
and passion. And so I thank her for her presence today, and it 
is a delight to be able to work with my colleague. The smartest 
thing that our Caucus could have done is to appoint Congressman 
Al Green to the Financial Services Committee. We applaud that 
act, and out of that was generated a great opportunity for 
    I ask unanimous consent to put my entire statement into the 
record, but I'll make these very brief points. Without a doubt, 
I believe that when you think of our Constitution and our 
beginning language in the Declaration of Independence, we all 
are created equal with certain inalienable rights of life and 
liberty and the pursuit of happiness. Although education and 
housing may not have been directly mentioned, I don't know 
about you, but I think that the quality of life of all of us is 
dependent upon good education, good healthcare, and good 
    So I make these very brief points: One, we are looking 
forward to this trust fund so that we can have a commitment to 
affordable housing in this community and certainly across the 
Nation. I encourage you to support this legislation. And even 
though you may be in the State of Texas, call Senators across 
the Nation. Particularly call our Senators and ask them to 
support this very important legislation. And I will give you a 
reason why: If you look at low-income owners who experience 
severe costs and, therefore, block them out of the market, 
you'll find among the 31,886 owner households with income below 
30 percent of the area median income in 2000, almost half, 49 
percent, spent more than 50 percent of their gross income on 
housing costs and another 17 percent more than--more than 30 
percent of their gross income. Disabled persons receiving SSI 
benefits are particularly vulnerable to affordability concerns. 
And so the most vulnerable people--for example, the fair market 
rent for a one bedroom apartment in Houston is $633, which 
exceeds by 5 percent the average monthly SSI benefits of $603. 
So there are enormous costs for those who are seeking 
affordable housing.
    Let me move to another point that I think is very important 
and close to Chairwoman Waters' heart and, of course, knowing 
the Fifth Ward area, many of our older areas in Houston and 
particularly areas in my district, she knows the number of 
seniors who also suffer from the inadequate housing. I'm 
grateful to the leadership of Congressman Green, who has worked 
with me on these issues. But a couple of years ago, the City of 
Houston suffered a number of challenges that required audits 
and required the elimination of certain programs. One of them 
happened to be the rehabilitation program of senior housing. In 
actuality, the senior housing repair and rehabilitation was 
actually stopped. When we recognized that seniors would suffer, 
we brought together the Department's Director and Secretary of 
the U.S. Department of Housing and Urban Development with a 
goal of restarting the program. An agreement was reached where 
the City would expend local funds and be reimbursed by HUD. The 
program was restarted with new contractors and procedures.
    Now, the home repair program for our seniors seems of 
little consequence to City officials even though the repair of 
senior's homes is a priority in the consolidated plan pursued 
by HUD. Seniors continue to wait on a list. So we hope, as we 
move through this hearing and further our interest, that we'll 
be able to correct that problem.
    My last point is just an example. Just last week, a senior 
who had been on a waiting list expecting repairs came before 
the City Council after being told that her property--that she 
lived in the floodplain. The City staff who misread the 
regulation had denied this woman home repairs because she lives 
in the floodplain. Fortunately, Council Member Jarvis Johnson 
called my office and we were able to connect the Council Office 
with the HUD official who cited the chapter and verse of the 
exemption that allowed repairs of this nature without regard to 
the flood zone. So as we look for housing, we must include all 
of those in our community--the disabled, the seniors, those who 
need affordable housing.
    And, Madam Chairwoman, I am so grateful for both you and 
Congressman Green, because as I look as the representatives of 
the homeless here in this auditorium--I took it upon myself to 
drive around Houston late at night--12 to 2 in the morning--
just to see the second city that most of us don't see. The 
enormous amount of homeless persons really begs for our action. 
And so as I look to the State and look to the City and County, 
I am grateful of your presence here but also of the leadership 
of the chairwoman. And I'd like to, in a moment of personal 
privilege, thank Mr. Guy Rankin, who is not here, Madam 
Chairwoman, but who wanted to offer his appreciation to you 
from the Harris County Housing Authority for their DHAP program 
and also to acknowledge the work that they are doing. I thank 
you very much. I look forward to this hearing, and I yield back 
my time.
    Chairwoman Waters. Thank you very much. I think that we 
have some of the elected officials from the Houston area that 
entered the room, so if you would like to make an introduction, 
Mr. Green.
    Mr. Green. I'm most appreciative, Madam Chairwoman. We have 
with us this morning an outstanding elected official, public 
servant, if you will, the Honorable Adrian Garcia, who is a 
member of the Houston City Council. Adrian Garcia. I'd like to 
also just acknowledge that our veterans have united and decided 
to be here today as a unit. And we are honored to have a group 
of veterans who are here. Veterans, would you just stand so 
that we can see? Any veterans, of course, but these are 
veterans who have united. They are here, and we must serve 
them. They have served us well.
    There are many institutions that were available to assist 
when Katrina hit, but I will tell you that one that is in the 
18th Congressional District, and I'm sorry that I can't move 
them into the 9th Congressional District, but the Sheikh 
Community Center is represented today by the Honorable Delord 
Parker. Would you give him an expression of appreciation?
    For the record, I would like to introduce a document, and 
if there are others with documents that you would like to have 
become a part of the record, I believe the chairwoman will 
announce at some point that the record will remain open for 
members. And if you'll give it to me, I will submit it into the 
record for you.
    But we have from the Honorable Gladys House--who needs no 
introduction, but for edification purposes, I will tell you 
that she's with historic Freedman's Town and Allen Parkway 
Village--a document titled ``Affordable Housing Needs in 
Houston, Unique Challenges and Opportunities.'' Madam 
Chairwoman, I beg that have we have unanimous consent to place 
this into the record as well as any other documents that I may 
    Chairwoman Waters. Without objection, it is so ordered.
    Mr. Green. Thank you, Madam Chairwoman.
    Chairwoman Waters. Mr. Green, I want to remind the veterans 
of H.R. 3329, the Homes for Heroes Act, that has been 
introduced by Mr. Green. One of America's shames is the number 
of homeless veterans that we have on our streets all over 
America. And not only will my subcommittee make this a 
priority, we're saying to all of the presidential candidates on 
both sides of the aisle that they better make that a part of 
their platforms as they campaign to lead this country. So thank 
you so very much for being here. Thank you.
    With that, I'd like to introduce our first panel: Mr. Milan 
Ozdinec, Deputy Assistant Secretary for Public Housing and 
Voucher Programs, U.S. Department of Housing and Urban 
Development; Mr. Michael Gerber, executive director, Texas 
Department of Housing and Community Affairs; and Mr. Richard S. 
Celli, director, City of Houston Housing and Community 
Development Department. I'd like to thank all of you for 
appearing for the subcommittee today, and without objection, 
your written statements will be made a part of the record. You 
will now each be recognized for a 5-minute summary of your 
    We will start with Mr. Ozdinec.

                     AND URBAN DEVELOPMENT

    Mr. Ozdinec. Thank you, Madam Chairwoman. Good morning. My 
name is Milan Ozdinec, and I am the Deputy Assistant Secretary 
for the Office of Public Housing and Voucher Programs at HUD. I 
wish to thank Chairwoman Waters, Congressman Green, and 
Congresswoman Jackson Lee for inviting me here this morning to 
appear before the subcommittee. Specifically, you requested 
that I describe the Department's new Disaster Housing 
Assistance Program and its implementation, including here in 
the City of Houston, thus far.
    The Administration recognizes the need to continue 
assistance to Gulf Coast residents who remain displaced by 
Hurricanes Katrina and Rita, many of whom are currently 
residing here in the Houston area. The Disaster Housing 
Assistance Program, or DHAP for short, is a new demonstration 
program that will ultimately provide tenant-based rental 
assistance to approximately 44,000 families. DHAP commenced 
case management on September 1, 2007. The first rental 
assistance payments under DHAP will begin December 1, 2007.
    The DHAP is a temporary housing assistance program, and its 
overall objective is to help families ultimately transition 
back to permanent housing and economic self-sufficiency by 
March 1, 2009. HUD is indeed responsible for the design, 
implementation, and operation of DHAP. We welcome this 
opportunity, Madam Chairwoman. Housing families in need is one 
of our core missions. We are also in a unique position to help. 
As you know, we have at our disposal a national network of some 
2,400 housing agencies that administer HUD's Housing Choice 
Voucher Program. We have proven to have the experience and 
expertise at the local level to effectively administer tenant-
based rental assistance. These PHAs know their local housing 
markets and already work with owners in the private rental unit 
market. Housing authorities are involved in providing 
assistance to families. Housing families is their bread and 
butter. It's what they do.
    DHAP may be a new program, but tenant-based housing 
assistance has already proven to be a highly effective 
mechanism for assisting displaced families. Shortly after 
Hurricane Katrina, HUD developed and implemented the KDHAP 
program to assist displaced families who were previously 
assisted by HUD. Then in December of 2005, the Congress 
appropriated an additional $390 million directly to HUD to 
assist thousands of additional families displaced by Hurricane 
Katrina--displaced who were previously HUD assisted or homeless 
through the disaster voucher program. To date, over 33,000 
families have received rental assistance through these two 
programs. HUD is once again calling upon our public housing 
authorities to provide assistance to eligible families under 
DHAP. Since the vast majority of these families are already 
housed, our PHAs will make rental assistance payments on behalf 
of these families. These families may remain in their current 
unit or, in some cases if they choose, they can find another 
unit and move. In those cases where a family must move, the PHA 
will provide housing search assistance.
    Implementation of DHAP is well under way. We have published 
operating requirements, contracts, grant agreements, and case 
management procedures, including software development. We held 
meetings with PHAs, landlords, and advocacy groups both here in 
Houston and in other areas around the Gulf. We have provided 
onsite technical assistance at PHA offices, broadcast 
interactive Web casts, and established a DHAP referral call 
center with a toll free number.
    On August 11, 2007, FEMA referred to HUD 28,582 eligible 
families for DHAP. Since then, we have executed 336 grant 
agreements with PHAs that cover over 26,000 of those families. 
Here in Houston, we have one of the largest concentrations of 
DHAP families. We have executed two grant agreements, one with 
the Housing Authority of the City of Houston, and one with the 
Housing Authority of Harris County, to serve approximately 
9,000 families. By way of contrast, Madam Chairwoman, through 
the entire State of California, we only have 143 eligible 
families for DHAP. With respect to the challenges and concerns 
we face in regard to implementing DHAP, our biggest concern is 
the nature of the transition from FEMA to HUD and all of the 
complexities associated with it. For instance, this complexity 
resulted in HUD concerns that the transitions would not be 
seamless for all families. Therefore, it was decided to delay 
the complete transition to DHAP from November 1, 2007, to 
December 1, 2007.
    Madam Chairwoman, members of the subcommittee, I cannot say 
enough about the tremendous response and effort put forward by 
our PHAs throughout the country. Without their dedication and 
commitment, DHAP would not be possible. I especially would like 
to commend both the Housing Authority of the City of Houston 
and the Harris County Housing Authority for their exceptional 
work on DHAP. All new programs have growing pains. Our PHAs, 
through their hard work and perseverance, have been able to 
ramp up this program and provide case management operations 
within 30 days of signing an agreement with FEMA.
    Madam Chairwoman, I wish again to express our enthusiasm 
for being able to help. We believe that HUD, using our local 
PHA infrastructure, can effectively and efficiently deliver 
assistance. The expertise is already on the ground to link case 
management services and housing assistance in order to provide 
a comprehensive response to help families recover from a 
disaster. In conclusion, and on behalf of the Secretary, Madam 
Chairwoman, again, I want to thank you for affording HUD the 
opportunity to discuss DHAP with you and the subcommittee in 
its implementation here in Houston and around the country. I 
would be happy to respond to any questions that you might have.
    [The prepared statement of Mr. Ozdinec can be found on page 
114 of the appendix.]
    Chairwoman Waters. Thank you very much.
    Mr. Gerber.


    Mr. Gerber. Good morning, Madam Chairwoman, Congressman 
Green, and Congresswoman Sheila Jackson Lee. My name is Michael 
Gerber, and I am the executive director of the Texas Department 
of Housing and Community Affairs in Austin. I'd like to thank 
you for the opportunity to appear before you today. Madam 
Chairwoman, before I start, for those of us who have lived with 
a natural disaster in Texas for the last 2 years, our hearts 
and thoughts certainly go out to the people in Southern 
California who are dealing with the effects of these horrific 
    Chairwoman Waters. Thank you.
    Mr. Gerber. My department, TDHCA, is the lead State agency 
to assist low-income Texans in finding safe, decent, and 
affordable housing. Without you and your colleagues in 
Congress, we couldn't do our jobs. And we'd like to thank you 
for all that you do to help provide a better standard of living 
for low-income Texans. We also want to join in thanking you for 
your efforts in passing the new Housing Trust Fund legislation 
that will help even more low-income Texans and other persons of 
low income across the country to have greater access to 
affordable housing.
    The National Housing Trust Fund would enable our State to 
have another tool in order to target lower-income Texans, 
especially those at 30 percent and below. And we will certainly 
take you up on your request to be in touch with our members of 
the Senate to make them aware of the benefits of the Housing 
Trust Fund nationally and here in Texas. Thankfully, our State 
legislature has also received the word about the benefits of 
the Housing Trust Fund. And thanks to the efforts of a number 
of folks in this room, our State legislature in the last 
legislative session approved an almost 60 percent increase in 
our own State housing trust fund.
    Even with all that help, we know that we're still not 
reaching the need that's out there. So what exactly are we 
doing? With the Federal funds available, we've allocated at 
TDHCA more than $680 million for low-income Texans during the 
2007 fiscal year that just concluded. With those funds, we 
rehabilitated seniors and single head-of-household homes in 
rural Texas allowing families to stay in their community while 
repairing their homes to a decent standard.
    We used private activity bonds to place a record level of 
assisted and low interest rate unassisted mortgages helping 
those people who are ready to take the next step in the housing 
continuum of home ownership. These are safe, traditional 
mortgages that provide real security rather than people going 
to higher interest rate loans to gain homeownership.
    Locally, through our Texas First time Homebuyer Program, we 
have been able to help more than 1,500 families here in the 
Houston area achieve the American Dream of homeownership. TDHCA 
offers the lowest interest rates of any State agency and we 
have a very safe and traditional mortgage product that's firmed 
up by conventional underwriting. You'll find no exotic ARMs or 
balloon mortgages through TDHCA.
    We also work with the Department of Energy Weatherization 
Program that not only saves energy but helps a family afford to 
heat here in Texas and cool--cooling's very important--a home 
without making choices between food and electricity.
    And, of course, the public-private partnership of the Low 
Income Housing Tax Credit Program has had a tremendous impact 
in creating additional affordable house or rehabbing existing 
housing and improving the quality of life for the residents in 
those communities. For instance, here in the Houston area 
alone, we have placed more than 26,000 units of affordable 
housing since the program's inception in 1986. We have built 
more than 250,000 units around the State. So it's a great 
record of accomplishments, but clearly we need to do more. We 
also make sure that every dollar spent is utilized for its 
maximum impact.
    And as a responsible steward of these valuable but limited 
Treasury Funds, we closely monitor these units for compliance 
with all State and Federal regulations. Once the units are 
placed in service, we make sure that the residents and the 
taxpayers get the full benefit of the program. This past year, 
our State legislature gave us the power to levy financial 
penalties up to $1,000 a day against those developers who are 
not keeping their commitments. That's $1,000 a day per 
violation. Accordingly, we'll make sure that those few bad 
actors are firmly removed from the program and that a clear 
message is sent industry-wide that TDHCA will not tolerate 
slumlords. Our ultimate concern is always for the safety and 
welfare of our low-income tenants, and we are proud here in the 
Houston area to be partnered so closely with the City of 
Houston and Harris County in that regard.
    I also wanted to share with you this morning the active 
work we've done in leading Texas' disaster recovery efforts 
stemming from Katrina and Rita. While we appreciate the efforts 
of the entire Congress in assisting Texans, I would be remiss 
if I did not thank you, Madam Chairwoman, along with 
Congressman Al Green, Congresswoman Jackson Lee, Congressman 
Ruben Hinojosa, and Congressman Kevin Brady. So many other 
members of the Texas delegation have been key in making sure 
that we have some resources to assist Texans in need.
    We expect with the dollars we receive, we will serve more 
than 8,000 Texans here in Southeast Texas, including Harris 
County. Shortly after Congress appropriated the funds, Texas 
Governor Rick Perry designated TDHCA as the lead agency for 
administering the funds that Congress has given to help us.
    In May of 2006, we received our first allocation of funds. 
That was $74.5 million, which was split almost evenly between 
housing and infrastructure. The second allocation of funds came 
earlier this year, and it totaled $428.6 million. We're working 
very ambitiously to get those dollars out. Governor Perry 
designated that $60 million specifically would be designated 
for Houston, Harris County, to meet the needs of Katrina 
evacuees. Houston will be using its $40 million of that $60 
million for law enforcement overtime and public safety issues 
associated with the influx of close to 200,000 Katrina 
evacuees. And the City will also be using part of the funds to 
rehabilitate many multifamily developments that are called home 
by Katrina evacuees to ensure that they will have safe and 
decent, affordable housing options. The remaining $20 million 
will be used by Harris County for a myriad of social services 
assistance programs for evacuees, such as crisis counseling and 
medical services. The remainder of the funds are being used 
primarily throughout Southeast Texas to meet the physical 
devastation that has been suffered throughout the 22-county 
area surrounding Houston and heading mostly east.
    But, again, we will continue to report to you and make sure 
those funds are used wisely. We are so grateful that you have 
taken the time to come to Houston, Representative Waters, to 
see this situation here firsthand. We welcome any questions.
    [The prepared statement of Mr. Gerber can be found on page 
60 of the appendix.]
    Chairwoman Waters. Thank you.
    Mr. Celli.


    Mr. Celli. Thank you very much for the opportunity to 
appear before you today and present brief remarks relating to 
the unique challenges and opportunities in the City of Houston.
    Two factors create increasing demand for affordable housing 
in Houston: New households forming due to immigration or 
population growth; and pent-up demand for homeless persons or 
low-income households who are enduring substandard housing 
conditions by two or more families sharing one roof.
    According to the 2000 census, about 9,000 households per 
year will be moved into Houston. In addition, 65,000 households 
were reported as overcrowded in the 2000 census and 
approximately 12,000 individuals in the City of Houston are 
currently homeless. Total demand for affordable housing must 
include some accounting for these underserved households. As 
Congressman Green mentioned in his opening remarks, the 
homeless population is a unique and severe problem in the City 
of Houston. We work diligently as a city. We meet every 2 weeks 
as a city, leaders within the city community, to try and solve 
the homeless issue, but we need more dollars.
    Due to the low incomes earned by many Houston households, 
the overwhelming majority of housing units will have to be 
affordable rental units, with less than 10 percent affordable 
single family home units. The under 50 percent of area median 
income, small family submarket is the most underserved in the 
Houston market. Over 27,000 families are rent-burdened, meaning 
that they spend more than 30 percent of their monthly income on 
    The demand for affordable housing is staggering. My staff 
estimates that, including new arrivals and underserved current 
residents, 2,000 households per year will demand affordable 
housing products. Of these, 1,300 households are projected to 
have incomes below 30 percent of area median income, and 700 
households are projected to fall in the 30 to 60 percent area 
median income. In addition, the Katrina evacuees currently 
living in Houston and benefiting from re-extended housing 
vouchers will eventually need to find housing on their own. 
This will increase our demand further.
    Historically, Houston City programs have invested about $54 
million per year in housing. The City of Houston has worked 
diligently to leverage all available resources, using low 
income housing tax credits, HOME funds, and requiring developer 
equity in outside debt in many multifamily transactions. The 
City of Houston has encouraged private investment in 
redeveloping historic neighborhoods via the Houston Hope 
Program by granting downpayment assistance to low-income 
families purchasing their first home, thus reducing the 
mortgage risk to lenders.
    Houston, like all major cities, works hard to meet the 
needs of its citizens. Meeting all the demands for housing 
would cost approximately $100 million a year. To close this 
gap, additional resources are needed. I assure you, as director 
of housing and community development, I could easily invest 3 
times my current allocation of HOME funds every year and still 
not meet the needs of deserving Houstonians.
    Enactment of the National Housing Trust Fund Act of 2007 
and the related Expanding American Homeownership Act of 2007 
would help the City of Houston by providing more funds to 
benefit low- to moderate-income families both directly and 
indirectly. As a participating jurisdiction, Houston would 
receive some portion of the trust funds intended to create 
150,000 units of affordable housing nationwide each year. The 
requirement that such housing be primarily targeted for 
families with AMI below 30 percent would help those families 
here who have the greatest demonstrated need for housing 
assistance. Restructuring of the FHA program to reduce the need 
for private market subsidy of subprime lending would provide 
some benefit to Houston even though our housing stock is priced 
very affordably. Any product that provides lower cost 
alternatives for low-income households who qualify for 
mortgages is a good product. I applaud the Representatives' 
study of the needs of everyday households and welcome your 
interest in Houston. Thank you very much for having me.
    [The prepared statement of Mr. Celli can be found on page 
57 of the appendix.]
    Chairwoman Waters. Thank you very much. And while I failed 
to announce Mr. Allison, I'd like to call on him now. Mr. 
Horace Allison is a senior vice president of the Housing 
Authority of the City of Houston. I thank you for being here.


    Mr. Allison. Thank you. Welcome to Houston. Chairwoman 
Waters, Congresswoman Lee, and Congressman Green, I want to 
thank you for your tireless efforts in support of affordable 
housing. On behalf of the resident population that we serve, we 
want to thank you for convening this hearing here in Houston.
    The Houston Housing Authority operates about 4,000 units of 
public housing and currently runs a voucher program of about 
15,000 units. We have a waiting list of over 42,000 families 
for those two programs. We opened our waiting list last 
December and it was only open for 14 days. And to give you a 
magnitude of the need, we ended up with 30,000 people in 14 
days wanting to get on the waiting list. This does not include 
people who may have not had the opportunity to or who may need 
housing assistance but who elected not to.
    There's a vast need for affordable housing in Houston. Our 
current utilization rate is 99 percent for the Public Housing 
Program, and 98 percent for the voucher program. In our voucher 
program, we only have a turnover of about 120 units a month, 
which means if you look at that 30,000 waiting list, it will be 
a long time before those families can be served. Hence the need 
for additional vouchers in the City of Houston. The families 
that we serve, typically their income is about $10,000 per 
year, whereas the median income for the City of Houston is 
$61,000 a year.
    How we've been trying to address some of these issues--the 
Housing Authority, several years ago, embarked with HUD's 
participation on the Hope VI program to develop additional 
affordable housing. We received $56 million in Federal funding 
in which we turned around and leveraged into $110 million. We 
did that in partnership with both the private sector, the 
public sector, and the City and State and local entities so 
that we could leverage those funds. Out of that, we created 
over 1,000 units of affordable housing. Rental, multifamily 
rental, single family rental, homeownership opportunities for 
families, inclusive of historic rental and homeownership, and 
the provision of social and community services. The effort 
revived a formerly neglected neighborhood in the near west end 
of Houston. It was done with the help and in partnership with 
various City leaders and departments.
    Mayor Bill White of the City of Houston has formed a joint 
task force comprised of the Housing Authority, Houston Housing 
Finance, and Housing and Community Development to address the 
affordable housing needs here in Houston. It's on the front 
page. In Katrina and Rita, as you're aware, the Gulf Coast was 
devastated. But Houston welcomed the evacuees into the City of 
Houston. Working with the City, working with the County, we 
processed over 60,000 families during a 4-month period of time 
in helping them find shelters, moving from the shelters into 
homes or into multifamily units. It took some 80 of our key 
staff people working 12- to 14-hour days, 7 days a week, for 
over 6 weeks, to address this need. The impact on our current 
program was felt, however, knowing the need for maintaining the 
existence of affordable housing in Houston, we prevailed, and 
our current programs are functioning well.
    Currently under the KDHAP DVP and DHAP program, we manage 
about 1,500 DVP vouchers and we're working on 2,400 DHAP 
vouchers. Our concern when this program ends is the need to 
address those who will not be assisted, i.e., the elderly and/
or the disabled. There will be a need for additional vouchers 
to address these families.
    Some of the challenges that the Housing Authority faces 
are: this vast waiting list, as I said earlier, 42,000 
families; shortfall in the availability of development funding; 
and operating subsidies at only 80 to 85 percent. And just 
imagine if your household was only receiving 82 percent of what 
you thought would be needed, you can feel the impact of that as 
well as the Housing Authority. So there's an increased need for 
public housing units in the City of Houston. A city of our size 
should have upwards of 10,000 public housing units, and we only 
have 4,000. There's a need for additional funding and support 
to adequately support healthcare, education, and employment, 
and provide supportive services, needs from HUD, simplification 
of the rules and regulations so that Housing Authorities can be 
more proactive in addressing housing needs, reforming the 
adjusted income definition, and something as simple as--for the 
seniors and the elderly, just something as simple as having the 
elderly to be able to provide medical information through a 
copy as opposed to having to go to the doctor to obtain a 
certified copy.
    Chairman, Chairwoman, and committee members, we want to 
thank you for coming to Houston. We want to recognize again 
your tireless efforts in support of affordable housing in 
Houston. And we want to make sure that you're aware that the 
Houston Housing Authority and others in the City are doing 
their best to deliver and create additional affordable housing 
opportunities as we move forward. Thank you.
    Chairwoman Waters. Thank you all very much for your 
testimony. I recognize myself for 5 minutes for questions. I 
think I'll start with Mr. Gerber.
    You mentioned that this legislature provided a 60 percent 
increase in the State housing trust fund. Could you tell me 
what that puts the funding level at and just discuss a bit 
about the mechanism for funding the State trust fund as well as 
the targeted requirements. And I think it was you that I talked 
to earlier. You asked me about the City of Los Angeles housing 
trust fund. I gave you a wrong figure. It's $100 million for 
the City of Los Angeles. I think I was talking with you about 
that. So tell me about yours.
    Mr. Gerber. Sure. I wish I could say ours was anywhere near 
a $100 million. We have historically received about $7 million 
a year from the legislature. Thanks to the efforts of folks in 
this room, it was increased by $5 million. The $7 million that 
has been available remains largely limited to something called 
our bootstrap program. That's--
    Chairwoman Waters. This is for the entire State?
    Mr. Gerber. For the entire State.
    Chairwoman Waters. $7 million?
    Mr. Gerber. $7 million--$12 million. $12 million is the 
    Chairwoman Waters. $12 million is the total?
    Mr. Gerber. $12 million now. It was $7 million, but now it 
has gone up by $5 million.
    Chairwoman Waters. Provided by the legislature.
    Mr. Gerber. The $5 million. And that's the only money.
    Chairwoman Waters. Did you put any of your CDBG money in 
    Mr. Gerber. No, ma'am.
    Chairwoman Waters. No CDBG.
    Mr. Gerber. No CDBG.
    Chairwoman Waters. Do you have any money that's coming from 
the developers to support this fund in any way?
    Mr. Gerber. No, ma'am. That's the only money.
    Chairwoman Waters. So this is the total amount of your 
statewide housing trust fund?
    Mr. Gerber. That's correct. And the $7 million, a little 
over, is largely used again for the bootstrap program, which is 
a self-help, sweat equity program largely done in the Colonias 
along the U.S.-Mexico border.
    Chairwoman Waters. Largely on what?
    Mr. Gerber. Largely sponsoring homes in the Colonias, which 
are areas along the U.S.-Mexico border, that have just 
tremendous needs. It's a sweat equity, Habitat for Humanity-
like construction program, and we have had tremendous success 
down there using those very limited resources. The $5 million, 
though, that the State legislature has put in, we're trying to 
do a number of very innovative things. And we actually have 
several notices of funding availability out for those funds. 
Our hope is that we can prove that a little bit of housing 
trust fund money can go a long way. And there are opportunities 
to increase home ownership through production in senior 
housing, multi-family housing. There are a variety of different 
homeownership program options that might be available, 
additional programs to provide barrier removable for the 
disabled community and accessibility benefits for the disabled 
community. That has certainly been a key thing.
    We're also using some of those funds for gap financing for 
disaster victims who are not able to quite get into a safe and 
affordable repaired home or new home because they just don't 
have enough money in the current benefit that we have in our 
CDBG program for disaster recovery. So that gap--that missing 
gap is also--we have about $1 million that is going into 
meeting that, those gap financing needs for those folks in 
Southeast Texas as well.
    Chairwoman Waters. Just give me the total amount of State 
assistance for housing for Houston. Tell me basically that in 
addition to your housing trust fund, whether CDBG or HOME 
funds, or any other funds or tax credits, give me an idea of 
what the State does to assist housing in the Greater Houston 
area, in Harris County.
    Mr. Gerber. Sure. Thanks again to our tax credit program, 
which is $42 million statewide, roughly 25 percent of that goes 
here into the Greater Houston area for affordable housing. So 
that's putting real multifamily housing units on the ground, 
either new construction or rehabilitation. In terms of the home 
    Chairwoman Waters. Wait. So going to both nonprofit and 
for-profit developers?
    Mr. Gerber. Yes, ma'am. That's correct. The HOME program, 
the City of Houston is a participating jurisdiction, so they 
receive a direct award of HOME funds. And that gets 
administered by Mr. Celli.
    Chairwoman Waters. That's from the State?
    Mr. Gerber. From the Federal Government.
    Chairwoman Waters. From the Federal--so that is CDBG 
through the State to the local?
    Mr. Gerber. That's the HOME program. The HOME program, 
which can be used for a myriad of purposes, including tenant-
based rental assistance, homebuyer assistance, or owner-
occupied rehab. We at the State level manage a pot of about $45 
million in home funds, but it's for largely the rural parts of 
the State, the nonparticipating jurisdictions that aren't big 
enough or sophisticated enough to manage their program on their 
own. Large cities like Houston, of course, have that ability, 
so they receive a direct allocation from HUD for the HOME 
    Our other big program that we have are certainly the first-
time homebuyer program. We do a tremendous amount of business 
here in the Houston area, not just in Harris County, but in the 
surrounding counties which have large, booming suburbs. I'm 
very pleased that just with our last issuance of first-time 
homebuyer funds, $16 million got used within 30 minutes to 
provide mortgages for families here in the Houston area, first-
time homebuyer mortgages here in the Houston area. So that's 
another program. And right at the moment, we have $120 million 
in funds available for folks here in Houston as well as 
    Chairwoman Waters. What would say is the poorest area of--
and maybe the Mayor would like to--the absolute neediest, 
poorest area of the Houston area in your City, say, Mr. Celli?
    Mr. Celli. We have several neighborhoods, Congresswoman, 
that we're focusing on with Houston Hope--the Settegast area on 
the near north side of Houston, Acres Home, and Sunnyside. 
Those are the areas that we're focusing our attention with the 
Houston Hope foreclosure program where we're trying to create 
affordable housing and redevelop these neighborhoods.
    Chairwoman Waters. So what do you do as the City and the 
State combined to try to work together and target funding to 
some of the neediest areas? And how is that realized? What can 
you tell me about a combination of HOME funds, Housing Trust 
Funds, CDBG, and other funds that you've directed? What 
percentages do you put into the poorest areas?
    Mr. Celli. Primarily we work with the State, with the low 
income housing tax credit program. We try and leverage those 
funds to do multifamily projects. Lately we've been focusing 
our efforts on the homeless. We've done just one project that 
we--that just scored number one in the State of Texas, an SRO 
right on the Gulf Freeway in Houston, right as you come in from 
Hobby Airport, where they were awarded low income tax credits. 
And partnered with our dollars two to one, we're going to 
credit about 175 brand new units of single room occupancy.
    Chairwoman Waters. So are you focusing on permanent housing 
for the homeless or basically still emergency shelters?
    Mr. Celli. Still emergency shelters. We have a desperate 
need for permanent housing for the homeless. We've spent our 
initial efforts with rapid rehousing, but with--after the rapid 
rehousing, we need to create some permanent housing in the City 
of Houston along with the commensurate programs to get people 
back on their feet, some support programs. Those cost money, 
and there is a lot of money involved in that.
    Chairwoman Waters. That will be a focus of our committee to 
try and get permanent housing for the homeless. We think that 
this vicious cycle of emergency shelters and people lined up 
has to stop.
    Mr. Celli. We applaud that.
    Chairwoman Waters. Thank you. So we'll be looking forward 
to the efforts put forth here and see what we can do to provide 
some assistance.
    To Mr. Allison, that waiting list that you have is typical 
of what's happening all over the country. And the only way to 
deal with that is what we're attempting to do through the 
Housing Trust Fund, the National Housing Trust Fund, that will 
present some new opportunities for people who need housing. 
Hopefully, as Mr. Green described, through the resources that 
we will get from the GSEs, Fannie Mae and Freddie Mac, and 
Federal Home Loan, we'll be able to make some new money 
available for the creation of new housing units.
    As we look at our public housing, we have to figure out how 
to expand those opportunities and give people some choices. And 
as we look at Hope VI projects, we have to make sure that we 
don't eliminate housing as been done with some of the Hope VI 
projects where they redesigned these projects so that they look 
beautiful and they're wonderful, but they don't tell us what 
happened to the people who get lost after they redevelop the 
housing projects and they reduce the size of those projects. So 
we're going to look out for public housing and for expanded 
opportunities for people who really do need that assistance.
    With that, I'm going to turn to Mr. Green for his 
    Mr. Green. Thank you, Madam Chairwoman. And I thank the 
members of the panel for being here today. Your testimony has 
been very enlightening.
    Let me start by just asking if we have any persons in the 
audience who are with NGOs or some sort of 501(c)3, some sort 
of entity that is trying to assist with housing? If you are, 
would you raise your hand so that I can just get some sense?
    Okay. We have a lot of people here who are working with 
housing. And this is important. So I would like to ask each 
member of the panel, as tersely as you can, to tell us about 
some of the products that are available for these NGOs so that 
they can benefit from much of what may not be published widely. 
I understand that you have problems in terms of getting your 
information out. You don't have big budgets to PR your 
products. So let's talk about some of the products that you 
have that they can benefit from. And friends, this would be a 
good time for you to take out your pen and your paper. Because 
one of the things that we want to do in Congress is make sure 
that what we know and, to a limited extent some of what we 
don't know, you have an opportunity to know.
    So let me start with you, Mr. Allison. Tell me some of the 
things that NGOs are doing that can be of benefit to them.
    Mr. Allison. We have been partnering with other entities in 
the development of affordable housing.
    Mr. Green. Say that again.
    Mr. Allison. We have been partnering with other entities in 
the development of affordable housing. We don't have an open 
RFP process, but any organization that desires to partner with 
the Housing Authority or trying to obtain assistance through 
the Housing Authority to develop affordable housing is welcome 
to come in. We will sit down with them and evaluate their 
project or their proposal and work with them to try to see if 
we can go forward. We do have some limited capital moneys that 
we are investing, whether it be with a nonprofit or a private 
developer, but that is our process.
    Mr. Green. Are you currently working with not-for-profits 
in developing products right now?
    Mr. Allison. No, we are not partnered directly with a not-
    Mr. Green. If you have one that will perform some outreach, 
you would be amenable to working with a not-for-profit--
    Mr. Allison. Absolutely.
    Mr. Green. --to develop a product?
    Mr. Allison. Absolutely.
    Mr. Green. All right. Thank you very much. Now, Mr. Celli, 
in giving your explanation, if you would, tell us about the low 
income tax credit just briefly, because we have a lot of NGOs 
that can benefit from that kind of intelligence in terms of how 
that can work to develop affordable housing.
    Mr. Celli. Well, a low income housing tax credit is the 
best way to create quality affordable multifamily housing for 
low income individuals as well as seniors. It basically 
provides a Class A property with Class C rents. No other 
vehicle can leverage dollars the way that does, and we like to 
use our Federal dollars in partnership to leverage the low 
income housing tax credits.
    Generally, we can do that sometimes two and sometimes three 
to one. So what that really relates to, it costs about $100,000 
to build a multifamily apartment unit that's a quality, 
livable, decent place for people to live, but it only debt 
service about $30,000 of that cost. So low income housing tax 
credits, along with our dollars, can bring down that 
affordability for our senior citizens as well as for our low-
income individuals.
    Mr. Green. For further explanation, that low income tax 
credit means that there is a tax certificate that is made 
available to someone that we'll call a developer. Is that a 
fair statement?
    Mr. Celli. Yes, it is. And then it's sold to investors.
    Mr. Green. Let's just make that clearer. When we say that 
it's sold to investors, that means that this developer will go 
out and find an investor who can benefit from a tax break?
    Mr. Celli. Yes, sir.
    Mr. Green. And he then will partner with him, and he'll 
receive moneys from the investor that he can couple--that the 
investor will benefit from the tax break, so he's willing to 
give the money to the developer to develop property?
    Mr. Celli. Yes, sir.
    Mr. Green. And when this property is developed, of course 
they all go to the bank. But it means that some not-for-profit 
or some entity we'll call a developer has had the opportunity 
now to build this low-income housing.
    And tell me if we have some NGOs that are participating in 
this process. Do we have some?
    Mr. Celli. Yes, we do.
    Mr. Green. Okay. Now for the benefit of those of you who 
are listening and you want to get into the business of helping 
to develop affordable housing, this low income tax credit is an 
excellent means by which you can get involved. It really 
provides money from the private sector by virtue of a tax break 
that is accorded. Is that a fair statement, Mr. Celli?
    Mr. Celli. Yes, it is.
    Mr. Green. All right. Do you have another product that you 
can tell us about briefly? Because my time is quickly passing.
    Mr. Celli. The City of Houston just provided $700,000 to 10 
different community development corporations to construct 10 
houses in the Houston Hope neighborhoods. Those are the 
neighborhoods that I mentioned earlier, like Sunnyside, Acres 
Home, Settegast, and Independence Heights. That's a single 
family program where we're encouraging new homes by community 
development corporations with our product. Along with that, 
we're coupling our down payment assistance program where for 
the homeowner, you can buy down the mortgage up to $30,000 in 
the Houston Hope neighborhoods.
    Mr. Green. And for additional information on these products 
and others that you may have, how would people access the 
    Mr. Celli. Call me. 713-868-8444.
    Mr. Green. Now, if you did not get that number, raise your 
hand--you need to repeat it.
    Mr. Celli. 713-868-8444. That's a direct line to my office.
    Mr. Green. Thank you, Mr. Celli.
    Mr. Gerber. In the interest of time, I'll just add on. The 
tax credit program, that is a very complex program. We were 
very pleased about 3 or 4 months ago to do a--actually less 
than that, an event with Congresswoman Jackson Lee, a workshop 
with members of the faith-based community who are interested in 
participating in that program. It is a very complex and 
challenging program that really is something that requires some 
degree of expertise. And many of the folks in this room have 
those skills. We would very much welcome a chance to do another 
workshop, maybe even partnered with the City of Houston and the 
County under your good offices. Let's try to piece that 
together to invite folks in this room to come together and 
learn in a, you know, full-day workshop, which is really what 
it takes to get, I think, a grounding of some of the benefits 
and the risks of going into this. Because building a 250-unit 
apartment complex is not something that one wants to go into 
lightly. There's a lot that is involved. So we welcome that 
chance. And, of course, we really value the leveraging that 
goes on with locals in order to make those tax credit deals 
work in places like Houston. So I would just focus really on 
that program.
    Mr. Green. Well, I want to thank you for volunteering and 
being accessible. I think we'll take you up on that offer and 
have that workshop. Absolutely. There's a competitive side to 
the low income tax credit program. Are you prepared to address 
that, or should I go to the next speaker?
    Mr. Gerber. Well, there are really two tax credit programs. 
There's a 4 percent tax credit program, and then there's the 9 
percent tax credit program. It's the 9 percent tax credit 
program that has the deepest subsidy and is the program that is 
the most competitive. And, you know, we're oversubscribed for 
those funds 3 to 1.
    In contrast, the 4 percent tax credits are generally 
layered with a bond transaction. And the Harris County, you 
know, Housing Finance Corporation of Southeast Texas has a 
finance corporation. All are bond issuers. The Texas Department 
of Housing and Community Affairs is a bond issuer. And then we 
will layer onto it 4 percent tax credits. There are plenty of 
those. It's based on the volume counts the State receives to be 
able to do an additional deeper targeting to make the economics 
of the deal work. So for both a bond transaction, layered with 
4 percent credits, or the 9 percent competitive program, I 
would propose that we do a workshop that would link both of 
those and talk about both of them. Because in many cases, in a 
City like Houston, a bond transaction makes a lot of sense at 
those 4 percents. You can make the economics of it work as you 
can with the 9.
    Mr. Green. Ms. Lucinda Daniels will contact you about it.
    Mr. Gerber. I'll look forward it.
    Mr. Green. Mr. Ozdinec, if you can respond quickly, because 
my time is very limited.
    Mr. Ozdinec. Sure, Congressman. As you know, the 
Department's annual budget is about $32 billion a year. A 
little more than half of that is the Housing Choice Voucher 
Program. That's the engine that drives the rental assistance 
market pretty much across the country. Our ambassadors to our 
programs are literally public housing authorities and our 
cities. All of our funds flow through the cities. But there are 
things that can be done, obviously, in the Section 8 program 
for the nongovernmental folks out here that do small-scale 
development. They can reach out to their Public Housing 
Authority. Each Public Housing Authority has the ability to 
project base their vouchers. To the extent that a Housing 
Authority is looking for properties or rental units in--
    Mr. Green. Let me just intercede quickly. Explain that 
term, ``project base.'' Many people may not understand exactly 
what that means. That's an important term.
    Mr. Ozdinec. I'll give you an example, a hypothetical. If a 
Housing Authority had 1,000 vouchers in their program, they 
could take the budget authority for up to 20 percent of that 
voucher program and solicit proposals from developers, 
nonprofit or otherwise, to provide rental units through the 
project-based program. And they would sign a 10-year contract 
with the Housing Authority to provide that unit for waiting 
list families for that period of time.
    That helps to support some of the deals that Mr. Gerber 
discussed. The 4 percent deals are tough to do, but often when 
there's project basing associated with it, it's the grease that 
makes the wheel run.
    Mr. Green. Thank you very much. Madam Chairwoman, I'd like 
to submit for the record a statement from Council Member Adrian 
Garcia. Without any objection, I offer it at this time.
    Chairwoman Waters. Without objection, it is so ordered. 
Thank you very much. Ms. Jackson Lee?
    Ms. Jackson Lee. Madam Chairwoman, thank you very much. And 
to all the witnesses, let me thank you for very instructive 
testimony. Might I just repeat, because I think we have already 
acknowledged the leadership of Chairwoman Waters, but let me 
repeat these numbers that are so striking.
    I want to pose a line of questioning that hopefully maybe 
will change attitudes: 30,000 people came on the waiting list 
in 14 days; 42,000 are waiting for Section 8 vouchers. I know 
we can do better here in Houston. We can do better. And I thank 
you for that instructive information, because we have to find a 
way to move toward a corrective action. And so let me just 
quickly--Mr. Ozdinec, let me quickly just refresh your memory. 
As you know, about a decade or so ago, there was a mindset that 
suggested that large structures such as Cabrini-Green in 
Chicago, and some others in Atlanta, were not the way to go in 
terms of public housing. Unfortunately, Houston got caught up 
in the overall umbrella where Houston was not high density. And 
so my question to you, listening to Mr. Allison and the crisis 
we have here, that's Section 8, but he also mentioned the need 
for public housing units. We have only 4,000. We've had 4,000 
for decades. We now are minimally needing 10,000. What 
policies, because of the policy that I've just enunciated--you 
worked in New Orleans, you worked in Chicago and Atlanta--can 
be altered to work with a city that really needs these public 
housing units?
    Mr. Ozdinec. Thank you. And I appreciate the question. The 
thing that I think is the most important lesson that we could 
have learned through the 1990's through the Hope VI program, if 
there's one very important lesson, is partnerships. Up until 
that point, Housing Authorities were doing public housing 
developments on their own through direct appropriations from 
Congress to build public housing projects. I think in the last 
decade, we've gotten housing authorities familiar with the 
terms that many of the people in this room are familiar with, 
the difference between a 9 percent and a 4 percent credit.
    What do I need to do to be a good partner to a private 
developer so I can participate as part of a development process 
where, for example, a 250-unit multifamily development can 
support perhaps 100 very-low-income families as part of the 
public housing program. We have, as part of that new 
development process, instituted ways for nonpublic housing 
authorities to own public housing through long-term rental 
assistance agreements and other mechanisms that are available 
to take what were traditionally operating subsidies to support 
market rate and tax credit units combined together to generate 
additional low rent public housing units in the context of a 
larger community.
    To the extent that housing authorities can take those tools 
that they've learned on financing, mixing incomes, mixing 
financing tools, partnering with developers who develop 
affordable public housing across the country, and being a good 
steward and a good partner for those sorts of deals, using 
their Section 8 program potentially to project base, those are 
all tools, I think, that we've learned through the 1990's. To 
the extent that the Congress decides to appropriate any 
additional development funds for the Department, my 
recommendation would be for those funds to be used very similar 
to the way we use the tax credit equity both on the 9 percent 
and the 4 percent credits; that developers submit proposals--
    Ms. Jackson Lee. I'm sorry. My time is limited.
    Mr. Ozdinec. I apologize.
    Ms. Jackson Lee. If you can wrap up.
    Mr. Ozdinec. Well, that's it. I mean, that would be my 
number one lesson, partnerships and a variety of funds being 
pulled together to create partners and stakeholders around 
affordable housing developments.
    Ms. Jackson Lee. I guess the question I would have is 
whether or not we have the ability through legislation or 
otherwise to go back to those underutilized communities that 
never had the density and let them build public housing. Is 
that a possibility?
    Mr. Ozdinec. If the money is there, Congresswoman, I think 
the answer is yes to that. I think the method of development 
now has changed from 30 years ago to something more akin to 
what you see in Atlanta and some parts of Chicago now.
    Ms. Jackson Lee. Thank you. Let me ask Mr. Celli on another 
issue that I'm very keen on and, Mr. Ozdinec, if you can 
respond to this as well, and that is the question of senior 
repair housing under your community development funding. It is 
in your consolidated plan. I understand the program is, if you 
will, suspended. The question is the ability to be able to 
address senior repair programs in a way that meets the needs in 
this community. And Mr. Ozdinec, if you can speak from a 
housing perspective--from HUD's perspective in the utilization 
of these funds, so what we call senior repair reconstruction, 
as to the viability of that. And why don't I go to you first 
and then Mr. Celli, please.
    Mr. Ozdinec. Thank you, Congresswoman. That is not my 
account, unfortunately.
    Ms. Jackson Lee. I understand.
    Mr. Ozdinec. But I met with your staff this morning, and I 
will definitely get them in contact with our Deputy Assistant 
Secretary who runs the CDBG program. We can have a conversation 
about that to ensure that your concerns are being met.
    Ms. Jackson Lee. Mr. Celli.
    Mr. Celli. We are in the process of going back and looking 
at about 1,800 homes that are required by us, by HUD, to go 
back and reinspect homes that we did senior repair to going 
back to 2001 through 2005. And we have to go back and reinspect 
those houses and fix them if they need to be fixed. 
Unfortunately, we have a waiting list of about 2,000 
individuals who are on that that are in need of repair work. 
And that list was created when Federal funds were cut off to 
the City of Houston in 2005. And so we're in the process--on 
that 2,000 waiting list, we're looking at, I believe, 200 of 
those houses right now. And we're beginning to try to whittle 
down that waiting list.
    Ms. Jackson Lee. So, Mr. Ozdinec, we can work with you to 
correct this seemingly heavy burden on the City of Houston, 
which is looking behind and not forward, the crisis of senior 
housing and disabled housing on rehab and reconstruction, maybe 
we can move along, because it really is at disaster proportions 
in terms of seniors and the disabled not being able to have 
home repair because the work that the City is now doing is work 
that is fix-up work, meaning going back to try and correct 
ills. And I know there should be a parallel track of them being 
able to fix the problems of the past and report to HUD but move 
forward on a program that is literally now stagnated and people 
are suffering.
    Mr. Ozdinec. Yes, ma'am.
    Ms. Jackson Lee. Thank you.
    Chairwoman Waters. Thank you very much. The Chair will 
grant herself an additional minute because, as we walked in, we 
were handed pictures from some of the citizens about homes that 
were built, developers that were contracted with by the Housing 
Authority, that are falling apart. Who is responsible for 
making these homeowners whole for these homes that have been 
paid for by HUD, I'm told?
    Mr. Allison. I would need to see the properties. The 
Houston Housing Authority is only responsible for homes in 
Houston. We are not responsible for homes in San Antonio.
    Chairwoman Waters. Well, without looking at these 
particular ones--I'll give you a copy of these, are you aware 
of this problem?
    Mr. Allison. No, I'm not aware that--of the problems with 
some homes that we have developed that are in disrepair. Not at 
    Chairwoman Waters. All right. Are you going to stick around 
after the panel?
    Mr. Allison. Yes, ma'am.
    Chairwoman Waters. Very good, because I think we have some 
people here who will describe it in more detail to us. With 
that, I think--yes?
    Ms. Jackson Lee. May I read just two questions into the 
    Chairwoman Waters. Yes, you may.
    Ms. Jackson Lee. --just very quickly? This is for the 
Secretary for HUD. Let me ask for a response to a series of 
letters that I have written regarding the Allen Parkway Village 
and the nonfulfillment of the Hope VI requirements that were 
agreed to in the reconstruction and rehab of Allen Parkway 
Village. The second one is the issue of HUD programs that may 
be applied in a discriminatory fashion as relates to low-income 
residents, particularly in the Fourth Ward area. And I'd 
appreciate it. We have a series of letters in to you on that 
    Mr. Ozdinec. I'll look into that, ma'am.
    Chairwoman Waters. They will be included in the record. The 
Chair notes that some members may have additional questions for 
this panel which they may wish to submit in writing. Without 
objection, the hearing record will remain open for 30 days for 
members to submit written questions to these witnesses and to 
place their responses in the record. This panel is now 
dismissed. I would like to welcome our second panel. Thank you 
very much. I will call on Mr. Green to introduce the second 
    Mr. Green. Thank you. And as you're coming forward, I will 
start the introductions because time is of the essence and we 
want to cover as much as possible. So panelists, if you would, 
kindly move forward as expeditiously as possible.
    Our first witness will be Mr. John Henneberger. He is the 
director of the Texas Low-Income Housing Information Service. 
This organization provides a great service in terms of 
statistical information. We are honored to have Mr. Henneberger 
with us.
    Our second witness is Mr. Robert Muhammad, the chief 
executive officer of ACTION CDC; they very much involved when 
the Katrina survivors were coming to the City and in need of a 
multiplicity of services. They were, of course, there to be of 
    Our third witness is Ms. Debra Junor, a member of the Texas 
Tenants' Union. She, I believe, has testified in Washington, 
D.C. If not Ms. Junor herself, we've had a member of the 
organization to testify before us in Congress.
    Our fourth witness is Ms. Toni McElroy, the president of 
Texas ACORN. Texas ACORN has been to Washington many times on 
behalf of Katrina survivors, and we're honored to have Ms. 
McElroy with us today.
    Our fifth witness is Mr. Daniel Bustamante, the executive 
director of the Greater Houston Fair Housing Center, a long-
time community activist and champion for persons who are 
suffering from homelessness.
    Our sixth witness is Mr. Gordon Quan, founding partner of 
Quan, Burdette and Perez, here today on behalf of the National 
Coalition of Asian Pacific American Community Development, also 
shown as CAPACD.
    And, finally, we have Mr. Manuel Lopez, the housing 
director of the Tejano Center for Community Concerns. I would 
add also that Mr. Quan is a former city council person--I 
neglected to say this--who chaired the Housing Committee for 
the City of Houston. And Mr. Lopez has been involved in this 
community for some time as well. I don't see him currently; but 
if he does arrive, of course we will hear from him. With this 
said, Madam Chairwoman, I yield back to you.
    Chairwoman Waters. Thank you very much. We will start with 
Mr. Henneberger. We will recognize you for 5 minutes.


    Mr. Henneberger. Thank you, Madam Chairwoman, and members 
of the subcommittee. I want to thank you for the opportunity to 
be invited to testify today. I'm John Henneberger. I'm the 
director of an NGO that undertakes education, research, and 
advocacy concerning the low-income housing and community 
development needs of Texans. Madam Chairwoman, beyond the 
course of this hearing, I would urge the committee to help us 
shine the light on the problems and challenges that have been 
encountered with providing housing assistance to the 75,000 
Texas families who lost their homes or had their homes severely 
damaged by Hurricane Rita. We are coming to a train wreck 
regarding this program because of a lack of adequate funding 
and the fact that many of the poorest people who had their 
homes destroyed by Hurricane Rita in Texas stands not to be 
able to receive any housing assistance because of the shortage 
of available funds, but that is a topic for another day.
    And today I would like to first begin by talking to you 
about the current state of affordable housing in Houston, which 
I can best characterize as a worsening crisis. There are four 
trends that highlight the critical housing challenges that face 
Houston; first of all, the large share of Houston residents who 
rent rather than own. Madam Chairwoman, it is counterintuitive 
to those of us in Texas who are very proud of our independence 
and our ownership to find that we are 41st among the States in 
homeownership. And it is deeply distressing to find that 
Houston is 57th among the large U.S. cities in terms of 
homeownership. We are 22 percentage points below the national 
average of homeownership here in Houston. And we are 10 percent 
below the rate of homeownership of central cities in the United 
    So Houston is a profoundly troubled city in terms of its 
extremely low rate of homeownership. Houston's rate of 
homeownership is lowest among all the major cities in the State 
of Texas. We also have a very large share of renters who pay 
too much of their income for rent and utilities--36 percent of 
all the renters in Houston have incomes below $20,000. And many 
of these, as I think you have already well summarized in 
statistical data, are severely rent-burdened; 140,000 
households in the City of Houston with severe rent burdens. I 
provided you 20 pages of testimony which provides you detailed 
statistics, so I won't go into all of the details here.
    The fourth characteristic trend in Houston is the shortage 
of rental housing to the low-income families who need that 
housing. And the City has, based on our estimates of the 2005 
American Community Survey, a deficit of 49,323 homes for 
extremely-low-income families, that is, families below 30 
percent of median family income. I provided you in my testimony 
a breakout by congressional district. And those congressional 
districts which represent the Greater Houston area have a 
deficit of 108,000 homes for families with incomes below 30 
percent of median family income. The crisis is truly 
    The fourth trend is the sizable gap between the 
homeownership of the City of Houston and its suburbs. This gap 
is 23 percent. The ratio of Houston homeowners to suburban 
homeowners is 23 percent lower in the City of Houston than it 
is in the suburbs. And this is in excess of national trends of 
major metropolitan areas and their suburbs.
    And, finally, government housing subsidies, as Ms. Jackson 
Lee has explored with a previous witness, in Houston are 
disgraceful. And the government housing, in essence, has to 
provide the safety net for the poorest families in most cities. 
In Houston, the rate is substantially below that of most of the 
rest of the country. Houston has the smallest number of per 
poverty population--smallest number of Section 8 units and 
public housing units per the number of people in poverty of any 
of the 20 largest cities in the country, with the exception of 
Detroit and Phoenix. We are well below the rate. We have only 
one Section 8 and public housing unit for every 22.5 persons in 
poverty in this town. That is that a disgracefully low rate. 
All of these make for a major affordable housing crisis in 
Houston. And then came Hurricanes Katrina and Rita, and things 
suddenly got a whole lot worse.
    I'll briefly summarize a few of the challenges that the 
City of Houston and the surrounding community have faced in 
meeting the housing needs of Katrina and Rita evacuees, first 
and foremost of which is that Texas has received grossly 
inadequate levels of funding for hurricane survivors for 
housing assistance. The total amount budgeted currently for 
assistance for Katrina evacuees in this City, which received by 
far the largest number of Katrina evacuees of any city in the 
country, is only $60 million.
    Now, of that $60 million, in our opinion, the City made a 
poor choice to spend a large portion of that money for 
additional policing and for reimbursement of various costs the 
City has incurred. We believe that if you only have $60 
million, the first people in line ought to be the people who 
were hurt and lost their homes. And the government ought to 
stand behind them. The housing programs, furthermore, that we 
have available, housing resources that we have available--the 
other housing resources we have available is largely limited to 
the Low Income Housing Tax Credit Program. And Texas did get an 
allocation from Congress of additional funds under the Low 
Income Housing Tax Credit Program. But the Tax Credit Program 
cannot serve people at the income levels of the average Katrina 
and Rita evacuee. They just cannot afford those rents. And, in 
fact, a recent market study by the Texas Department of Housing 
and Community Affairs has shown that Houston is actually 
overbuilt with tax credit units of 60 percent of median family 
income while we have 140,000 plus families below 30 percent of 
median family income who are paying more than 50 percent of 
their income for rent. Texas came together and submitted a plan 
for long-term housing recovery and submitted it to the 
President in 2006, which I've attached to my testimony. 
Unfortunately, those specific recommendations have largely not 
been provided for.
    I know my time is up, and I'll briefly--I'll move quickly 
to our specific recommendations from that letter. First of all, 
if Houston is going to make it, it's going to need substantial 
new Section 8 Housing Choice Vouchers, and I don't know exactly 
where they're going to come from given the budget situation the 
way it is. The combined organizations which looked at the Rita 
and Katrina problem estimated that Texas cities all together 
needed 36,000 incremental additional Section 8 vouchers in 
order to deal with the Katrina and Rita population that we've 
    We need an additional, in our estimate, $97.5 million of 
low income housing tax credits, but only if we can get that 
coupled with a rules waiver which will allow the State issuing 
entity to permit the State to fund a portion of the apartments 
within each development at a higher level than the 9 percent 
credits. In other words, use the total cap of authority that 
Congress would give the State for low income housing tax 
credits but allow them to enhance the subsidy so we can get 
some units at the 40 percent of median family income rate, 
because we are only able effectively to generate at the upper 
50 percent and 60 percent of median family income rate with tax 
    Chairwoman Waters. Mr. Henneberger, is all of this in the 
attached testimony that you've given us?
    Mr. Henneberger. Yes, ma'am, it is. And I thank you very 
much for the opportunity to testify before you today.
    [The prepared statement of Mr. Henneberger can be found on 
page 71 of the appendix.]
    Chairwoman Waters. Thank you. And I'm hopeful that you will 
make sure that the plan that you alluded to that was presented 
to the President about how to fix some of this is not only made 
available to us but you will perhaps even, at the invitation of 
Mr. Green, come to Washington and work with us on that.
    Mr. Henneberger. Thank you.
    Chairwoman Waters. I appreciate it very much. And I'm 
sorry. We're going to have to move on in order to get to 
everybody's testimony in the time that we have been alloted. 
Mr. Muhammad.


    Mr. Muhammad. Chairwoman Waters, Representative Green and 
of course my own representative, Sheila Jackson Lee, I am 
Robert Muhammad. I'm the founder and CEO of ACTION Community 
Development Corporation. I would like the record to reflect, 
Madam Chairwoman, that I am being joined today by Ruqayya 
Gibson who is our executive director, and Sadiyah Evangelista, 
who is a board member and our general counsel for ACTION CDC.
    I hold a master's degree and I am currently beginning the 
dissertation phase in my Ph.D. work in the field of urban 
planning and environmental policy at Texas Southern University 
here in Houston. I have served as a student in the ministry and 
a community servant in Houston for over 20 years.
    ACTION CDC's mission is to empower low- and moderate-income 
individuals, families, and neighborhoods. Our motto is, 
``Improving Our Nation One Neighborhood at a Time.''
    Houston-- Just some background, Madam Chairwoman. Houston 
is a nonzoned, low regulation, market-driven, developer-
friendly city. Houston's cost of living is relatively low, as 
you noted, in comparison to California. When rental cost and 
unit availability are the variables used in determining housing 
affordability, one could reasonably conclude that there's no 
shortage of affordable housing stock in the City of Houston. 
However, a more thorough examination will reveal that there is 
a shortage of safe, hazard free, environmentally sound, energy-
efficient, handicap accessible, senior citizen and family 
friendly affordable housing, conveniently located near transit, 
decent schools, and job centers.
    In Houston, for-profit developers would gladly build 
affordable housing if it was in their best interest. Land 
acquisition and carrying costs, predevelopment expense, 
construction, and marketing for sales and rental dictates that 
each project in its highest and best use results in the highest 
return on investment. Therefore, housing stock in Houston is 
built--or affordable housing stock in Houston is built by small 
for-profit developers or nonprofits or is the result of 
cyclical market forces that make housing units available 
because they cannot reasonably command market prices without 
major reinvestment and redevelopment.
    I just want to go through the challenges of meeting the 
housing needs of Katrina evacuees, and then I will, if time 
allows, tell you the projects that ACTION is working on in 
terms of building some housing. After Hurricane Katrina, ACTION 
CDC provided housing counseling to 1,400 Katrina families, 
financial recovery counseling to 1,120 families, case 
management services to 916 families, employment services to 
1,620 families, food services to 5,090 families, and 
transportation assistance to 2,050 families. We have provided 
$172,164 to families in unmet needs assistance from the long-
term recovery committee of Houston, $85,000 in direct financial 
assistance, $240,000 in financial assistance through the 
American Red Cross. Our staff of eight hard-working case 
managers includes four Katrina evacuees.
    Now, according to a recent statistic, nearly 3 years after 
Hurricane Katrina, an estimated 100,000 survivors still reside 
in Houston and have no concrete plans to leave and return to 
New Orleans. Many are elders and they are losing hope, 
suffering from prolonged mental anguish and/or dying.
    Another challenge is that in assisting 30 percent of the 
survivors who are elderly or disabled, with meeting the long-
term needs, the survivors who were able to live off of a $600 
disability check in New Orleans cannot do so in Houston due to 
our cost of living. And they cannot do so in New Orleans any 
longer because the cost of living there has doubled since the 
hurricane. According to a recent Zogby poll, a large number of 
survivors are currently employed, but 70 percent earn less than 
$25,000 per household. Many survivors that we have been engaged 
are living two and three families to a household, which 
contains 9 to 18 individuals per apartment. The constant 
instability in the FEMA housing program has had a negative 
effect on the mental health of survivors. For the past 2 years, 
ACTION CDC has made it our priority to assist the survivors 
with recovering and achieving self-sufficiency.
    The HUD-funded Disaster Housing Assistance Program 
administered jointly through the City of Houston and Harris 
County Housing Authorities will not help every survivor. There 
are an estimated 25,000 households in Houston not covered by 
DHAP, and at least 50 percent of those households need 
additional assistance. This is a complex situation, meeting 
housing and human needs, will most certainly require patient 
pragmatic, holistic case management. And funding to provide 
these services haves to be adequate and ongoing.
    In terms of tools that are needed to increase and preserve 
affordable housing and our position on the National Housing 
Trust Fund Act of 2007, H.R. 2895, let me say it like this to 
this distinguished panel subcommittee. Nonprofits in a 
nonzoned, low regulated, market-driven, developer-friendly city 
such as Houston are at a distinct disadvantage. Sometimes it 
feels like we're being asked to make brick without straw. In 
order to increase and preserve affordable housing, we request 
that you consider the following.
    Continued and increased access to funding, programs such as 
HOME and Community Development Grants are critical to 
nonprofits to be able to design, build, and manage quality 
affordable housing in the communities we serve. Operating funds 
for Certified Housing Development Organizations is equally, if 
not more, important because it frees the nonprofit to focus on 
project delivery versus a preoccupation with seeking funds to 
cover related overhead. Funds for staff, consultants, and 
quality training are important to building the internal 
capacity necessary for continual project success.
    Transparency and clarity of process has already been 
stated. Federal and State and City entities should simplify 
processes and documentation requirements.
    Land acquisition funds, nonprofits cannot build or preserve 
affordable housing stock if we cannot assemble parcels near job 
centers, transit, or in low-income areas that are going through 
gentrification. Land cost normally should not exceed 20 percent 
of one's total project cost. Nonprofits need gap land 
acquisition funding in order to build affordable projects that 
would otherwise be impossible under highest and best use 
    Lastly, we need predevelopment funds. Nonprofits cannot 
properly assess the feasibility nor deliver affordable housing 
projects without competent, professional expertise. Private 
lenders will not participate in projects that are not packaged 
properly or fail to cash flow. ACTION predicts that energy 
usage and expense along with public safety will become major 
determinants of housing affordability in the future. Energy 
efficient ``green'' building and safety through design programs 
increase cost during the development phase. However, these 
predevelopment expenses increase development sustainability and 
property value over the life of the project.
    I close with this. ACTION CDC fully supports the National 
Housing Trust Fund of 2007 because it will provide increased 
funding and clear benchmarks for achievement. The addition of 
significant funds will be tremendous in its impact on 
underserved communities. In a major metropolis such as Houston, 
new and existing nonprofits need to be positioned to assist 
government in meeting our low-income population's needs. We see 
H.R. 2895 as a wise use of taxpayer funds. H.R. 2895 helps 
deconcentrate poverty by allowing nonprofits to offer quality 
workforce housing to middle class first responders, teachers, 
and other public employees. It is good for nonprofits because 
it has the potential to help create innovative affordable 
housing developments that are mixed income, mixed use, 
transportation oriented, environmentally sound, energy 
efficient, hazard mitigated, safe, handicapped accessible and 
financially feasible. May God bless you for your concern for 
the poor and less fortunate. On behalf of the Board and staff 
of ACTION CDC, thank you in advance for your invitation and 
consideration of our testimony.
    [The prepared statement of Mr. Muhammad can be found on 
page 110 of the appendix.]
    Chairwoman Waters. Thank you very much.
    I'd like to ask the other members of the panel to please 
summarize your testimony. We're going to try to wrap each of 
your presentations up in about 4 minutes. We allowed the first 
two to go far beyond the 5 minutes, because I know they have 
been waiting a long time to tell somebody about what is going 
on and what the needs are. I think they have done a pretty good 
job of kind of identifying what the needs are, so I'd like you 
to just add to it as quickly as you possibly can, and then 
we'll give the members an opportunity to ask some questions. We 
will then have to catch planes to go back to Washington to 
vote. Thank you very much.


    Ms. Junor. Good morning, Congresswoman Waters, Congressman 
Green, Congresswoman Jackson Lee, and members of the committee. 
My name is Debra Junor, and I'm here of behalf of the Texas 
Tenants' Union, a nonprofit tenants' rights organization which 
empowers tenants through education and organizing to protect 
their rights, preserve their homes, improve their living 
conditions, and enhance the quality of life in their community. 
I am a former tenant of a HUD-assisted apartment complex, a 
former HUD-funded VISTA volunteer, and a former tenant 
organizer for the Texas Tenants' Union.
    The HUD properties I have worked in and will discuss today 
are privately-owned apartment complexes that either have HUD-
insured loans or project-based Section 8 Housing Assistance 
Payments contracts, or both. In the 1960's and 1970's, HUD 
encouraged private developers to build affordable housing 
through low-interest HUD-insured loans. In exchange, the owners 
were required to keep rents affordable to low- and moderate-
income people.
    In the late 1970's and early 1980's, HUD began providing 
additional subsidies to some of these developments and created 
new apartment complexes with the project Section 8 program. 
This program provided great affordability to low- and 
extremely-low-income people similar to the public housing or 
Section 8 voucher program.
    In the mid 1980's, some owners began paying off these HUD-
insured loans which released them from the obligation to 
provide affordable housing. One of the first prepayments in the 
country occurred in Dallas, Texas, where the apartments were 
demolished and replaced with a 17-screen theater. At that time, 
there was no Federal program designed to keep the properties 
affordable and no protection at all for the residents.
    I'm going to skip a whole lot because of the 4 minutes. The 
Texas Tenants' Union participates in the Preservation Working 
Group, which has a number of recommendations:
    Provide adequate appropriations to renew Section 8 
contracts. HUD's failure to request appropriate appropriations 
is a huge threat to the success of preserving this housing. It 
is essential for Congress to fix this problem very soon. TTU is 
working with a property in South Texas now that is likely the 
casualty of this fiasco.
    Strengthen the mark-to-market program. Mark-to-market has 
generally been an effective tool for preserving and improving 
Section 8 housing; 134 properties in Texas are involved in this 
program, including nine in Houston. At least two dozen Houston 
properties could still benefit from mark-to-market 
restructuring in the reforms pending in H.R. 3965.
    Amend H.R. 3965 to direct HUD to fund the technical 
assistance programs to tenants. Expiring subsidies can have a 
drastic impact on residents. And tenants can play a critical 
role in determining the outcome of these properties. Please 
include the amendment that was submitted in the National 
Alliance of HUD Tenants testimony on mark-to-market last week.
    Enact a Federal first right of purchase. This could be a 
very useful tool in getting at-risk properties under new 
ownership willing to keep the subsidies in place.
    Ensure vouchers are provided for all families and units 
when properties are not preserved. Too many low-income families 
have fallen through the cracks as subsidized properties convert 
to market-rate housing.
    Empower tenants to enforce their rights when HUD 
enforcement is lacking.
    Provide HUD with the direction to save troubled properties 
and other at-risk housing through the enactment of H.R. 44. Our 
written testimony elaborates on the recommendations. Thank you 
for giving me the opportunity to testify on these issues.
    [The prepared statement of Ms. Junor can be found on page 
93 of the appendix.]
    Chairwoman Waters. Thank you so much, Ms. Junor.
    Ms. McElroy, thank you for being here. We are very much 
aware of the work of ACORN all over the country. You made your 
presence known in Washington.


    Ms. McElroy. Okay. Thank you, Chairwoman Waters, 
Congressman Green, and Congresswoman Jackson Lee. Thank you. 
I'm glad to have the opportunity to testify today about the 
affordable housing needs of low-income residents in the City of 
Houston. I'd just like to skim over some of the challenges of 
affordable housing needs in this City as well as the challenges 
of low-income families to achieve and maintain homeownership, 
the lack of protection for renters, the remaining long-term 
housing needs of Katrina survivors which has been documented 
today, and finally some recommendations to enhance the 
availability of affordable housing.
    There's a shortage of affordable housing construction 
within the City. The developers are building affordable 
housing, but it's outside of the City limits. Many times they 
are putting minority residents, outside of the City of Houston 
where there's no public transportation, where there's no 
healthcare facilities, where there are few, if any, job 
centers. So our neighborhoods are being gentrified. And the 
infrastructure is being improved, but the traditional residents 
are gone, so we don't benefit from that at all.
    Third Ward is an example of such a community. Let me talk a 
little bit about our predatory lending and housing campaign. We 
have issued a report called ``Foreclosure Exposure'' which 
examines the Home Mortgage Disclosure Act data and talks about 
what's happening right here in Houston. African-Americans were 
issued 26 percent of all the high-cost home purchase loans in 
Houston in 2006, but only 6.7 percent of the prime home 
purchase loans. Latinos were issued 32.8 percent of those same 
high-cost loans originated here in Houston and 20 percent of 
the prime loans, which is greater than their--which is really 
out of whack. In contrast, Whites received 52.5 percent of the 
prime loans originated in Houston, 52.5, which is greater than 
their 30 percent share of the high-cost loans originated here.
    African-Americans represent 16.6 of the population in the 
metropolitan area, but they're getting a great number of the 
high-cost loans. Latinos in the Houston area represent about 
28.7 percent of the population. So the home loans, the 
mortgages that are being written are really bad predatory 
loans, and they're affecting minority buyers out of proportion 
of their population in Houston. Immigrant families are falling 
victims to a number of scams which we have worked on, including 
the contract for deeds.
    Also, it has been mentioned about the home repair program. 
ACORN members, along with Members of Congress, Congresswoman 
Jackson Lee have fought tooth and nail. We went to the City, we 
went to HUD, and there's still not enough money for senior home 
repairs. There has been a lot of improvement under Mayor White, 
but we need more dollars, especially Federal dollars, to get 
into the program to help seniors who are literally dying before 
their repairs can be made. So we're encouraged by the 
improvements, but we know that there is a need for more.
    There are few protections absolutely for renters, because 
Houston, as been alluded to, has such a high number of renters 
for a city this size. For a major city, most of the folks are 
renters. And there is no protection. ACORN members in other 
areas have gotten legislation, such as having landlords being 
licensed and being fined for not keeping up their properties. 
Something of that nature is needed right here, right now.
    And, of course, the housing needs for Katrina survivors, 
the rise in foreclosures, ACORN is--along with its sister 
organization, ACORN Housing, has been meeting with banks, 
mortgage companies, and services to try and get some relief for 
the almost 2 million families that could lose their home in 
foreclosure in the next few years. So we'd like to see a number 
of things happen, one of which is that the State of Texas 
should enhance enforcement and oversight of landlords, of which 
we have none now.
    [The prepared statement of Ms. McElroy can be found on page 
104 of the appendix.]
    Chairwoman Waters. Thank you very much, Ms. McElroy.
    We are going to have to move to Mr. Bustamante now. Thank 


    Thank you. Good morning to the honorable members of the 
subcommittee. My name is Daniel Bustamante, and I'm the 
executive director of the Greater Houston Fair Housing Center.
    I'm here today to testify before you about the fair housing 
needs and the state of fair housing in Houston, Texas. After 
hearing testimony today, all I have to say is that housing 
discrimination is alive and well in our City. It is a daily 
occurrence in the lives of thousands of families and children, 
Blacks, disabled individuals, Latinos, and other protected 
class members.
    Since the passage of the Federal Fair Housing Act in 1968, 
and its amendment in 1988, the issue of housing discrimination 
has continued to be prominent in the development of the City of 
Houston. Studies and surveys have consistently shown that 
housing discrimination against African-Americans and Hispanics 
continues unabated in our region. The influx of Hurricane 
Katrina evacuees exacerbated this historical housing 
discrimination problem and has been documented through testing.
    The area's demographics include an ever-growing immigrant 
population, with limited English proficiency, who are 
victimized daily by unscrupulous housing providers. The 
disabled in our region are in constant need of fair housing 
enforcement services, such as reasonable accommodations and 
modifications to ensure their rights to barrier-free living.
    Houston is the largest city in the south as well as the 
fourth largest city in the country. The use of racially 
restricted covenants to maintain segregated communities is not 
very far removed. The 1968 Civil Rights Act through the Fair 
Housing Act made housing discrimination practices illegal and 
created the protected classes that exist today. In spite of 
these laws, housing discrimination has continued throughout 
America and still occurs on a daily basis in the Houston area.
    In general, people move into better housing situations so 
they can improve their quality of life. The ability to access 
quality housing will impact access to quality education, 
employment opportunities, retail establishments, parks, 
churches, and other public services. Most people are totally 
unaware of their fair housing rights. Discriminatory practices 
in housing can be quite subtle and are unlikely to be detected 
by victims.
    The United States Census clearly shows segregation and the 
changing patterns in the ethnic and racial composition of 
Greater Houston's neighborhoods. Over the last 30 years, the 
primarily White communities have developed in areas towards the 
outskirts of the City of Houston and in the surrounding 
counties. In recent years, many of the historically minority 
low rent communities in the inner city have been redeveloped 
into high-rent mostly white communities.
    The metropolitan Houston area includes a large region with 
multiple counties, and the further away you get from the City 
of Houston into the surrounding counties, the less colored the 
community becomes and the more White it is. The City of 
Houston, for example, is a majority-minority community, but if 
you take the population surrounding Houston, it is primarily 
White. And what has been happening, and this has been 
documented by studies all the way from Harvard and a lot of 
other prominent universities that are quoted in my documents, 
Houston is still a segregated community. We have desegregated, 
but we have not really paid attention to what's going on in our 
community with discrimination.
    The 2007 Fair Housing Trends by the National Fair Housing 
Alliance indicates that the incidence of discrimination against 
African-Americans, Latinos, and Asian-Americans continues 
unabated. In Houston, the Housing Discrimination Study in the 
year 2000, which was conducted by HUD, found that African-
Americans and Latinos were discriminated against 25 percent of 
the time when they went to rent homes and 19 percent of the 
time when they went to purchase them. These statistics continue 
to be very real.
    Our agency did a rental audit in 2001, and through testing, 
we found the following: 85 percent of families with children 
were discriminated against when they sought to rent; 80 percent 
of African-Americans were discriminated against when they 
sought to rent; and 65 percent of Hispanics were discriminated 
against when they sought to rent. These are very real figures 
that we have documented through independent testing that we 
have done.
    These figures continue to trouble us because we understand 
that people move for the right reasons. The disabled in our 
community, for instance, are being forced to file complaints, 
Federal complaints, to get such basic needs as accommodations 
and modifications for their living situation because of 
landlords' inability to comply with the law.
    Our City is experiencing a tremendous growth right now. 
Over 29 percent of our City is foreign born. 47 percent of the 
population over 5 years old speak a language other than 
English. This community is bringing new dynamics to our City, 
and they're very much being targeted by unscrupulous landlords. 
Families with children, for instance, represent a significant 
part of this tremendous growth. Single-parent families and two-
parent homes with several children are very common in the City. 
Many families are denied their fair housing right when they 
seek to improve housing. Children are constantly made to suffer 
policies by landlords who don't tolerate children. They 
frequently take advantage of families through penalties and 
fines when they're trying to get them to move to larger units. 
I do want to address this panel about the Housing Fairness Act 
of 2007.
    [The prepared statement of Mr. Bustamante can be found on 
page 44 of the appendix.]
    Chairwoman Waters. We are going to have to move on to Mr. 
Quan. I'm so sorry. We're going to have to limit our time. 
Thank you very much.


    Mr. Quan. Thank you, Chairwoman Waters, Congresswoman 
Jackson Lee, and Congressman Green. My name is Gordon Quan, and 
I am here representing the National Coalition of Asian Pacific 
Community Development, as well as the Asian Chamber of 
Commerce, our largest Asian business group in the Houston area. 
You have copies of my testimony, so I'll go straight to the 
items that have not possibly been covered.
    Houston, as you see, has a very unique situation. You asked 
the question, Ms. Waters, as to what areas are in greatest 
need. And the mayor has designated seven areas of development 
that we need to be looking at. We have this mixed blessing of 
tax-delinquent properties that we can redevelop into affordable 
housing in the future. What I propose is greater cooperation 
between government agencies, both Federal, State, and local, to 
earmark funds to these different areas, and also a public-
private partnership that looks at working with CDCs and 
developers. As has been said by the panel previously, this City 
has been long an area for private development, where developers 
have really taken a major role in the City. Unleash that power. 
Work with nonprofits and see how we can develop communities, 
not just low income but multi--mixed income communities where 
we have middle income and higher income homes. We don't want to 
stigmatize areas of the City as ghettos. In 10 years, nobody 
will want to live in those areas, and we've wasted our time. So 
how do we look at developing long-term neighborhoods that will 
have a lasting effect.
    Another thing you talked about was homelessness. In our 
City, we did a poll to indicate that 12- to 14,000 individuals 
every night are homeless. What we have found is that 35 percent 
of those individuals have mental or physical ailments that do 
not allow them to live independently in our City, and 55 
percent need a structured environment where they can receive 
the counseling that they need to get back on their feet, so it 
is only 10 percent that are left in shelters. So while we're 
looking at sheltering, we're not looking at the long-term 
benefits. How do we get these people off this treadmill, not 
just a bandage approach? Permanent housing is the answer. 
Unfortunately, we have been producing very few permanent 
housing units.
    Mr. Celli talked about this one project, 175 units. That's 
great. But we need 7,000 units if we're really going to address 
our needs. So we're talking about project-based tax credits. We 
talked about housing vouchers. Those are things that we need 
because, otherwise, these projects are not feasible because 
there's very low income, so no bank will finance these 
    We also need to be building capacity. There are only two 
organizations in Houston that really develop SROs, the Housing 
Corporation of Houston and the New Hope Housing. We need at 
least five or six of these corporations. We need to have more 
people who know how to do that. Catholic Charities, the 
women's--so many groups would like to do it, and they don't 
know how. We need to instruct them.
    Education is the third point I want to reach, because I 
know I'm running out of time. As mentioned by Mr. Bustamante, 
we have a changing demographic in Houston, and many new 
immigrants don't know about homeownership. I know there are 
programs that have been raised up, but I look at the Vietnamese 
community where we have had condominiums that have been 
foreclosed upon because people didn't know their obligations to 
maintain within that common structure. We've had, as Ms. 
McElroy talked about, deed--contract for deed. So many 
immigrants are coming who don't know how to purchase homes in 
our community, not to mention subprime lending, which we all 
know about, and first-time homebuyer programs, which many 
people don't know about.
    Finally, I'd like to just hit upon the Fair Housing Act. 
One of things we're trying to develop in this community is 
senior housing specifically geared towards certain communities 
where there are special needs, such as the Vietnamese 
community. We're going to be having a ground breaking this 
afternoon for the Golden Bamboo Village, which will work with 
the Vietnamese community. But we want to make sure the Fair 
Housing Act does not inadvertently discriminate against 
organizations that seek to meet special needs groups that are 
not otherwise being enforced. So I thank you for this time, but 
I know my time is up. I'm available to answer any questions you 
have. Thank you.
    Chairwoman Waters. Thank you very much.
    A big round of applause for this panel. I'm going to kind 
of forego what would be our traditional questions to say, we 
get it. We get it. We understand. And all that has been 
mentioned from this panel about funding, adequate funding for 
housing survivors, and the extreme shortage of government-
subsidized housing, the mark-to-market program we just heard, 
we're going to insist that all of those owners of those 
buildings be paid and be paid on time, and that they be paid 
fair market value for the rents. And we're working on that, 
including moneys to help, you know, fix up some of those 
    For the predatory lending, we have a big bill that we are 
putting together. We know that there are people who should be 
given prime loans but have been forced into the subprime 
market. That market has collapsed because of all of the 
reasons, greed mostly, that have taken place out there. And 
we're now focused on trying to save some of these homes from 
foreclosure. Housing discrimination is one of the shames of 
this country, and we have to continue to work on it. I'm so 
pleased that Mr. Green has presented us with legislation to 
deal with housing discrimination in America and fair housing. 
We understand what is going on. You have adequately described 
the gentrification that is going on, and you are absolutely 
right. The need for 7,000 units--I'm absolutely shocked at the 
fact that there are only 4,000 public housing units here. I 
hear what you're saying about the seven areas that have been 
identified, the tax delinquent properties.
    And I want to thank you all for reinforcing what we've 
already come to understand, but we came here to have you 
document what is going on at the invitation of Mr. Green. I 
will yield time to Mr. Green and ask him to keep his comments 
and his questions to a minimum so that we can get out on time. 
Thank you very much.
    Mr. Green. Thank you. I will be brief, but I do want to 
thank you, Mr. Bustamante. In your testimony, you mentioned the 
Housing Fairness Act of 2007. And just for edification 
purposes, friends, we can end discrimination in housing in this 
country. We really can. We can. The most efficacious tool that 
we have available to us is something known as testing. Testing 
works. When we can send our persons equally qualified of 
different ethnicities or different stations in life, we can 
find out who is performing this dastardly kind of behavior, and 
we can catch them. We can catch them. But it takes not only an 
act of Congress to do this; it takes a Congress willing to act. 
That is what it takes.
    And I assure you that this committee chaired by 
Congresswoman Waters is willing to act. I have been very 
grateful and benefited from her help with this Housing Fairness 
Act. I just want to tell you that in that Act, we have $20 
million annually from HUD--for HUD to administer nationwide 
testing. We also have in that Act a requirement that HUD 
presents a report to Congress on testing every 2 years--every 2 
years--so that we can track what's happening as a result of 
what we are doing. And we have other means by which NGOs can 
get involved, and the NGOs can go out and do the testing and 
bring lawsuits. The NGOs can test and also litigate to make 
sure that, when we catch them, we can punish them. That must 
    And finally, to Ms. McElroy from ACORN. You mentioned 
contracts for deed. Let me just share this with you. Some of 
them are contracts for misdeeds. Many people find themselves 
having made a long history of payments only to have what they 
thought would be their home taken from them when they're right 
near the point where they can purchase. So I share your 
concern, and I assure you that is something that I will be 
working with you and others on in the Congress of the United 
States to see if we can make some corrections. I want to only 
echo what the Congresswoman had said, ``From time to time it's 
good to say amen.'' This is one of those days when we should 
say, ``A woman, a woman, a woman.'' Thank you.
    Chairwoman Waters. Thank you very much. Now Ms. Jackson 
    Ms. Jackson Lee. Madam Chairwoman, let me thank you and 
Congressman Green. And let me--because of the great panel--Mr. 
Henneberger, Mr. Muhammad, Ms. Junor, Ms. McElroy, Mr. 
Bustamante, and Mr. Quan, and I know Mr. Lopez was detained--
let me champion and thank Congresswoman Waters for recognizing 
that we live in a diverse America. All of the amendments that 
have been discriminatory relating to housing and immigrants 
have been fought back by this chairwoman. And we have joined 
her with Chairman Frank and Congressman Green, and we will 
continue to do that.
    Let me quickly do a few thank you's, and acknowledge the 
presence of Mr. Love of the Coalition of the Homeless. I hope 
he has been inspired today. I would also like to thank, in his 
absence, Chad Bogany and Gerald Womack. Both of them are 
leaders in the real estate area and they have fought these 
issues of discriminatory housing. And we thank them. I want to 
acknowledge Gladys House as well and just put on the record in 
particular that the Gregory School received HUD-earmarked 
dollars and the project is yet to be finished. We recognize 
    Let me quickly just say not only do we get it, Ms. McElroy 
and ACORN, I can't thank you enough. We're going to reignite 
the battle on senior housing, particularly on the reverse 
mortgages that Congressman Green--we'll all be working, but 
also on the senior repair, which does not make sense. I want to 
make sure that we reignite that fight. And I do want to put 
into the record that we--Mr. Henneberger, if you would share 
with us additional legislative fixes to help us, if you will--
and I'm going to get you to put it in the record, but to help 
us overcome what has happened to Houston where they only have 
4,000 public housing units when they should have more. I know 
that you can think about it collectively.
    And then would you also note that we--your point about 
segregated housing. What we want to do, and I think what we 
heard, people think the Third Ward is segregated, or the Fifth 
Ward. But we want to come out and fix it up. We don't mind our 
seniors and low incomes coming in, but let's have them have 
beautiful properties. Let's get ACTION CDC to take up this 
project that HUD has said where they can joint venture on the 
Section 8. Let's let the CDCs build these facilities for 
Section 8. I'd like to develop it, but let's get the CDCs to do 
    I close, Madam Chairwoman with this: We are champions of 
what our cities do. All we do is take back the message of our 
cities. And so when you hear the term Houston HOPE, we champion 
it. We think, in fact, that we have a wonderful effort because 
it has Houston HOPE. But I want to put into the record, Edith 
Salaville, 87 years old, at Weinburg & Delanore on the front 
page of The Houston Chronicle. Her inherited property by a 
historic civil rights leader in our community and she, I think 
was a granddaughter, fell behind in property taxes after she 
lost her senior exemption.
    She was foreclosed on, an 87-year-old woman who lived in 
this property under the pretense we can get these houses and 
put them in Houston HOPE. We must have restraint and oversight 
federally of a program that builds itself on foreclosures which 
might catch up the elderly and the disabled. We want Houston 
HOPE, but we want it to work in a nondiscriminatory fashion.
    And so I am grateful for the presence of all of you here 
today. And, again, I thank you, Madam Chairwoman, and 
Congressman Green. I thank you for allowing me to participate 
in this outstanding hearing. With that, I yield back.
    Chairwoman Waters. Thank you very much. I'd like to thank 
both Congressman Green and Congresswoman Jackson Lee for their 
great advocacy and the time and attention that they put into 
their work in Washington, D.C. I know there are days when many 
of you have felt that there's no help coming, that Washington 
is not doing what it should do. But I want to tell you that we 
do have the gavel now, and it is going to make a difference. We 
are going to use our power to correct some of these ills that 
have existed for far too long. Again, I'm so pleased that Al 
Green is on that committee doing such a great job. He is a 
workhorse. He has a fabulous work ethic. And so I'm delighted 
to be here. The Chair notes that some members may have 
additional questions for this panel which they may wish to 
submit in writing. And without objection, the hearing record 
will remain open for 30 days for members to submit written 
questions to these witnesses and to place their responses in 
the record. I understand that there are some other things that 
should be submitted for the record, and without objection, Mr. 
Green first.
    Mr. Green. We have these photographs, and I would ask that 
the parties submitting the photographs give us a narrative that 
will be placed in the record as well, if there are no 
    Chairwoman Waters. Yes. And also do you have any other 
documents to submit, Ms. Lee?
    Ms. Jackson Lee. Yes, Madam Chairwoman. I'll read it 
because I have written on it. Just simply to announce again, 
the Harris County Housing Authority that developed the disaster 
housing process that may become a national model for disaster 
housing assistance. And if there is anyone from Harris County 
Housing, just raise their hand. I'm just putting that statement 
in the record. Thank you very much.
    Chairwoman Waters. Thank you very much. And I would also 
like to submit for the record the written statements of the 
Houston Center For Independent Living and historic Freedman's 
Town and Allen Parkway Village as well as that of Mr. Malaika 
Adan will be made part of the record. And if the young lady in 
the back who submitted these being would raise her hand--oh, 
I'm sorry--in the front, will raise your hand, and make sure we 
get a narrative to go along with those pictures so that we can 
put that in the record and have an opportunity to address what 
you brought to our attention, I would appreciate it very much.
    I'd like to thank all of you for being here. This is a 
fantastic turnout for rather short notice to be here today. And 
we really do appreciate it. You bring to us the support that we 
need to be able to move forward. This hearing is adjourned. 
Thank you very much.
    [Whereupon, the hearing was adjourned.]

                            A P P E N D I X

                            October 29, 2007