[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]
PROTECTING THE AMERICAN DREAM (PART III):
ADVANCING AND IMPROVING THE FAIR HOUSING ACT ON THE 5-YEAR ANNIVERSARY
OF HURRICANE KATRINA
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON THE CONSTITUTION,
CIVIL RIGHTS, AND CIVIL LIBERTIES
OF THE
COMMITTEE ON THE JUDICIARY
HOUSE OF REPRESENTATIVES
ONE HUNDRED ELEVENTH CONGRESS
SECOND SESSION
__________
JULY 29, 2010
__________
Serial No. 111-145
__________
Printed for the use of the Committee on the Judiciary
Available via the World Wide Web: http://judiciary.house.gov
U.S. GOVERNMENT PRINTING OFFICE
57-674 WASHINGTON : 2010
-----------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Printing
Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; DC
area (202) 512-1800 Fax: (202) 512-2104 Mail: Stop IDCC, Washington, DC
20402-0001
COMMITTEE ON THE JUDICIARY
JOHN CONYERS, Jr., Michigan, Chairman
HOWARD L. BERMAN, California LAMAR SMITH, Texas
RICK BOUCHER, Virginia F. JAMES SENSENBRENNER, Jr.,
JERROLD NADLER, New York Wisconsin
ROBERT C. ``BOBBY'' SCOTT, Virginia HOWARD COBLE, North Carolina
MELVIN L. WATT, North Carolina ELTON GALLEGLY, California
ZOE LOFGREN, California BOB GOODLATTE, Virginia
SHEILA JACKSON LEE, Texas DANIEL E. LUNGREN, California
MAXINE WATERS, California DARRELL E. ISSA, California
WILLIAM D. DELAHUNT, Massachusetts J. RANDY FORBES, Virginia
STEVE COHEN, Tennessee STEVE KING, Iowa
HENRY C. ``HANK'' JOHNSON, Jr., TRENT FRANKS, Arizona
Georgia LOUIE GOHMERT, Texas
PEDRO PIERLUISI, Puerto Rico JIM JORDAN, Ohio
MIKE QUIGLEY, Illinois TED POE, Texas
JUDY CHU, California JASON CHAFFETZ, Utah
TED DEUTCH, Florida TOM ROONEY, Florida
LUIS V. GUTIERREZ, Illinois GREGG HARPER, Mississippi
TAMMY BALDWIN, Wisconsin
CHARLES A. GONZALEZ, Texas
ANTHONY D. WEINER, New York
ADAM B. SCHIFF, California
LINDA T. SANCHEZ, California
DANIEL MAFFEI, New York
JARED POLIS, Colorado
Perry Apelbaum, Majority Staff Director and Chief Counsel
Sean McLaughlin, Minority Chief of Staff and General Counsel
------
Subcommittee on the Constitution, Civil Rights, and Civil Liberties
JERROLD NADLER, New York, Chairman
MELVIN L. WATT, North Carolina F. JAMES SENSENBRENNER, Jr.,
ROBERT C. ``BOBBY'' SCOTT, Virginia Wisconsin
WILLIAM D. DELAHUNT, Massachusetts TOM ROONEY, Florida
HENRY C. ``HANK'' JOHNSON, Jr., STEVE KING, Iowa
Georgia TRENT FRANKS, Arizona
TAMMY BALDWIN, Wisconsin LOUIE GOHMERT, Texas
JOHN CONYERS, Jr., Michigan JIM JORDAN, Ohio
STEVE COHEN, Tennessee
SHEILA JACKSON LEE, Texas
JUDY CHU, California
David Lachmann, Chief of Staff
Paul B. Taylor, Minority Counsel
C O N T E N T S
----------
JULY 29, 2010
Page
OPENING STATEMENTS
The Honorable Jerrold Nadler, a Representative in Congress from
the State of New York, and Chairman, Subcommittee on the
Constitution, Civil Rights, and Civil Liberties................ 1
The Honorable F. James Sensenbrenner, Jr., a Representative in
Congress from the State of Wisconsin, and Ranking Member,
Subcommittee on the Constitution, Civil Rights, and Civil
Liberties...................................................... 3
The Honorable John Conyers, Jr., a Representative in Congress
from the State of Michigan, Chairman, Committee on the
Judiciary, and Member, Subcommittee on the Constitution, Civil
Rights, and Civil Liberties.................................... 4
WITNESSES
Mr. James Perry, Executive Director, Greater New Orleans Fair
Housing Action Center
Oral Testimony................................................. 8
Prepared Statement............................................. 10
Mr. Daniel M. Rothschild, Managing Director, State and Local
Policy Project, and Director, Gulf Coast Recovery Project,
Mercatus Center, George Mason University
Oral Testimony................................................. 23
Prepared Statement............................................. 26
Mr. Reilly Morse, Co-Director of Housing Policy, Mississippi
Center for Justice
Oral Testimony................................................. 91
Prepared Statement............................................. 93
Ms. Stacy E. Seicshnaydre, William K. Christovich Associate
Professor of Law, Tulane Law School, New Orleans, LA
Oral Testimony................................................. 105
Prepared Statement............................................. 108
APPENDIX
Material Submitted for the Hearing Record
Prepared Statement of the Honorable F. James Sensenbrenner, Jr.,
a Representative in Congress from the State of Wisconsin, and
Ranking Member, Subcommittee on the Constitution, Civil Rights,
and Civil Liberties............................................ 147
Prepared Statement of the Honorable Henry C. ``Hank'' Johnson,
Jr., a Representative in Congress from the State of Georgia,
and Member, Subcommittee on the Constitution, Civil Rights, and
Civil Liberties................................................ 150
Response to Post-Hearing Questions from James Perry, Executive
Director, Greater New Orleans Fair Housing Action Center....... 152
Response to Post-Hearing Questions from Daniel M. Rothschild,
Managing Director, State and Local Policy Project, and
Director, Gulf Coast Recovery Project, Mercatus Center, George
Mason University............................................... 156
Response to Post-Hearing Questions from Reilly Morse, Co-Director
of Housing Policy, Mississippi Center for Justice.............. 159
Response to Post-Hearing Questions from Stacy E. Seicshnaydre,
William K. Christovich Associate Professor of Law, Tulane Law
School, New Orleans, LA........................................ 162
PROTECTING THE AMERICAN DREAM (PART III): ADVANCING AND IMPROVING THE
FAIR HOUSING ACT ON THE 5-YEAR ANNIVERSARY OF HURRICANE KATRINA
----------
THURSDAY, JULY 29, 2010
House of Representatives,
Subcommittee on the Constitution,
Civil Rights, and Civil Liberties,
Committee on the Judiciary,
Washington, DC.
The Subcommittee met, pursuant to notice, at 2:18 p.m., in
room 2141, Rayburn House Office Building, the Honorable Jerrold
Nadler (Chairman of the Subcommittee) presiding.
Present: Representatives Nadler, Conyers, Sensenbrenner,
King and Franks.
Staff Present: (Majority) David Lachmann, Subcommittee
Chief of Staff; Kanya Bennett, Counsel; and Paul Taylor,
Minority Counsel.
Mr. Nadler. This hearing of the Subcommittee on the
Constitution, Civil Rights, and Civil Liberties will come to
order.
I will begin by recognizing myself for a statement. Today
the Subcommittee on the Constitution, Civil Rights, and Civil
Liberties holds its third in a series of hearings examining the
Fair Housing Act. The hearing today will examine current fair
housing issues in the context of the aftermath of Hurricanes
Katrina and Rita.
In the 5 years since the City of New Orleans was devastated
by Hurricane Katrina, we have watched that city try to rebuild,
and have had the opportunity to witness the struggles of its
citizens as they try to rebuild their lives and communities.
Some of the hardships were a result of a natural disaster of
historic proportions. But as is often the case, the devastation
wrought by natural forces was compounded by human activity.
One important area was housing. For the displaced, whether
homeowners or renters, discrimination made it more difficult
for them to return to their homes and get on with their lives.
In St. Bernard Parish, the local government engaged in a
variety of actions to prevent African Americans from taking up
residence. One ordinance outlawed single-family home rentals to
anyone other than blood relatives. The parish repealed the law
when the Greater New Orleans Fair Housing Action Center brought
suit.
In September 2008, the parish tried again, this time
imposing a building moratorium on the construction of
apartments with five or more units in response to a developer's
proposal to build new apartment complexes with 70 percent of
the units set aside for low-income renters. In March of last
year, the United States District Court for the Eastern District
of Louisiana found that, ``the parish and the council's intent
in enacting and continuing the moratorium is and was racially
discriminatory and, as such, defendants have violated the Fair
Housing Act.''
In other instances, websites with names like
www.Katrinahousing.org allowed ads to be posted with messages
like, ``I would love to house a single mom with one child. Not
racist, but White only,'' or, ``Not to sound like a racist, but
because we want to make things more understandable for our
younger child, we would like to house White children,'' and
``Prefer White Catholic family, children.''
Had these ads appeared in the newspaper, the publisher, in
addition to the advertiser would have been found to have
violated the Fair Housing Act. Because of a provision in the
Communications Decency Act, these Internet publishers were
protected.
Post-Katrina reconstruction efforts have also used Federal
funds in a discriminatory manner. For example the Road Home
Program, run by the Louisiana Recovery Authority using funds
appropriated by Congress through the Community Development
Block Grant Disaster Recovery Grant funds and administered by
HUD, devised a formula for determining the amount of assistance
to homeowners that had the effect of providing smaller grants
to homeowners in African American neighborhoods than to
homeowners in White neighborhoods with similar homes. The
formula devised by the Louisiana Recovery Authority in
consultation with and with the approval of HUD provided
homeowners with the lesser of the pre-storm value of the home
or the cost of repairing a home. After controlling for
conditions found in quality homes in African American
communities were valued at much lower amounts than homes in
White communities. The resulting disparity, especially when the
value of the home is less than the repair costs, which do not
vary from neighborhood to neighborhood, has had the effect of
discriminating the allocation of the funds on the basis of
race.
It would be unfair to single out Louisiana and that is not
the purpose of this hearing. Discrimination exists, and our
prior hearings have documented that it is still all too common
in housing rentals, sales and financing around the country.
While the aftermath of Katrina brings many of these issues into
higher relief, none of what happened there is by any means
unique to that part of the country. As a result of the
information we have gathered at these hearings, I plan to
introduce legislation when Congress returns in September--this
is beginning to make real that we are going to be out of here
next week--when Congress returns in September to update the
Fair Housing Act to address emerging issues and to ensure that
the act provides the tools necessary to protect the right of
every American to a decent place to live, free from
discrimination.
I want to note that the Fair Housing Act passed the same
year that the distinguished Chairman of the full Committee
joined the House of Representatives and joined the Committee.
He has always been a vigorous champion of civil rights, and I
look forward to working with him as we continue the efforts to
ensure fair housing rights for all.
I yield back the balance of my time.
I now recognize the distinguished Ranking Member of the
Subcommittee.
Mr. Sensenbrenner. Thank you, Mr. Chairman.
The purpose of this hearing is to explore potential gaps in
the fair housing laws that some argue were exposed by events
following the devastation caused by Hurricane Katrina in 2005.
Whatever Congress may decide about the merits of those
arguments, it should make such a decision having more complete
understanding of the role dysfunctional layers of bureaucracy
had on the availability of housing and other resources.
Congress should also reject the use of litigation that
relies on the Justice Department's assertion of legal theories
but go beyond those that are authorized by statute.
As I have mentioned in previous hearings on similar topics,
one such theory involves what are called disparate impact
claims. The Obama Justice Department has made it clear that it
intends to follow the Clinton administration and file more of
such claims. Disparate impact lawsuits challenge practices that
lead to statistically worse results for a particular group
relative to other groups without alleging that the practice is
actually discriminatory in its terms, design, or application.
That is, disparate impact lawsuits claim there is
discrimination when there often is no discrimination at all
under any reasonable definition of that term.
The abuse of the disparate impact theory in courts has
real-world consequences. There were many pressures on mortgage
lenders to relax the standards under which loans were extended
in the 1990's, but one factor was the Clinton administration
Justice Department's aggressive pursuit of disparate impact
claims in which it sought to prosecute entities whose mortgage
lending practices did not intentionally discriminate but only
had a disparate impact on one group or another.
In 1998, for example, Clinton administration Housing
Secretary Andrew Cuomo announced the results of a Federal
lawsuit settlement in which a bank was forced to extend $2
billion in loans to people who posed a poor credit risk.
Secretary Cuomo even admitted during a press conference
televised on C-SPAN that the $2.1 billion lending amount in the
mortgages will be a higher risk, and I am sure there will be a
higher default rate on these mortgages than on the rest of the
portfolio, unquote.
A leading article published in the Banking Law Journal at
the time made it clear that lenders relying on written
standards and criteria in making decisions as to whether to
grant a residential mortgage loan application run the risk of
exposure to liability under the civil rights law doctrine known
as disparate impact analysis. Several underwriting guidelines
that are fairly common throughout the mortgage lending industry
are at risk of disparate impact analysis, including
creditworthiness standards.
These lawsuits pressured lenders to bend traditional and
time-tested accounting rules and extend more mortgages to many
who couldn't afford them. These relaxed lending standards are
now widely regarded as being a prime cause of the current
financial crisis.
Even The Washington Post editorialized that the problem
with the U.S. economy has been the government's failure to
control systemic risk that the government itself helped to
create. We are not witnesses to a crisis of the free market but
a crisis of distorted markets. Government helped make mortgages
a purportedly sure thing in the first place, unquote.
As one economist wrote recently in The Wall Street Journal
in addressing housing policy, ``political leaders must face up
to the actual causes of the crisis, not fictitious causes that
fit political agendas and election strategies.''
In our efforts to enforce the Nation's housing laws, I hope
we don't repeat past mistakes. And I look forward to all of our
witnesses today and yield back the balance of my time.
Mr. Nadler. I thank the gentleman.
I now recognize for 5 minutes the distinguished Chairman of
the full Committee.
Mr. Conyers. Thank you, Chairman Nadler.
And thank you, too, Jim Sensenbrenner, the former Chairman
of the Committee. We appreciate your concern about disparate
impact lawsuits.
But I asked our counsel if the Chairman of the Committee
had mentioned that, and he did not mention it one time.
Unfortunately, I wasn't going to mention it either, until you
mentioned it.
And so I'm going to take another look at the case you make
for not bringing them. Unfortunately, the Department of Justice
is bringing those cases. The question I asked the other counsel
here on the Committee was, were any of these kinds of suits
brought during the previous Administration? And they're
researching it now. So I will be happy to--the answer is no,
that they did not.
So in the spirit that moved our Committee yesterday to
break the crack cocaine disparity problem, which I congratulate
you on, I would like to join you in working on some resolution
of this problem.
Mr. Sensenbrenner. If the gentleman would yield?
Mr. Conyers. Yes, sir, I will.
Mr. Sensenbrenner. Well, I am certainly looking forward to
what your proposal is, and we may have a counterproposal.
Mr. Conyers. Well, I don't have any proposal. I am looking
at it because you are complaining about it.
Mr. Sensenbrenner. Maybe my complaint is legitimate.
Mr. Conyers. So, returning, Mr. Chairman, and Committee, to
my own statement, I regret that 5 years after Hurricane
Katrina, we're still considering what went wrong. And not only
what went wrong but what continues to go wrong.
This isn't a historical examination. Katrina is still very
visible, its effects. And I am looking forward to the witnesses
enlightening us on that particular area, not just what mistakes
were made, but what needs to be done now.
Now we all knew that when the President told Federal
Emergency Management Chief Michael Brown the classic phrase,
``Brownie, you're doing a heck of a job,'' it was the biggest
incorrect assessment of one of his people in the Administration
of maybe all time. The compliment would still be premature
because 5 years later, we can't point to what's going right
with the government's response to Katrina.
So I commend the Committee for getting to the bottom or
still exploring this. This may not be the last hearing, as a
matter of fact, the way things are going.
So the questions outstanding are, how did the government
bungle this response to Katrina? And why does it take 5 years
later still trying to get our acts together? There were 1,464
deaths officially reported as a result of Hurricane Katrina,
1,464; children left parentless, the sick without medical
attention, the elderly without assistance, homes damaged and
buildings destroyed.
We hope that we will hear about the pain of displacement,
of how this displacement was made worse because of clearly
discriminatory behavior in violation of the Fair Housing Act,
not just by perpetrators, citizens, but by the government
itself. Post-Katrina year four, when FEMA ended its temporary
housing assistance program, 3,450 households were still in need
of long-term housing. Today, New Orleans is missing
approximately 92,000 of its pre-Katrina residents. So I have
asked that a study be done--a summary study was put together
just today a few hours ago of how our former colleague, the
Governor of Louisiana, Governor Jindal, has been handling the
matter.
And here's the background that I would like to lay before
the Committee and the witnesses for their examination and
disposition. First was his response to President Obama's Joint
Session address to the Congress on February 24, 2009. He
described being in the office of Sheriff Harry Lee during
Katrina and hearing him yelling into the phone at a government
bureaucrat who was refusing to let him send volunteer boats out
to rescue stranded storm victims because they didn't have the
necessary permits. Jindal said he told Lee, that's ridiculous,
prompting Lee to tell the bureaucrat that the rescue effort
would go ahead, and he or she could arrest both Lee and Jindal.
But now a Jindal spokesman has admitted, in reality, Jindal was
overheard talking about the episode to someone else by phone
days later. Just when we were about to give him some credit, it
turns out that it might not be deserved. I have got a Web site
and documents for all of these examples.
Who doesn't know that it was the Governor of Louisiana that
rejected Federal assistance for Katrina and in the same speech
delivered for our conservative party, the response on February
24, 2009, to President Obama's address to a Joint Session of
Congress? And then, as his response as spokesman, he called the
President's economic stimulus plan irresponsible and argued
against government intervention. He used Hurricane Katrina to
warn against government solutions to the economic crisis. And
here's what he said: Today in Washington, some are promising
that government will rescue us from the economic storms raging
about us. This is Jindal. Those of us who lived through
Hurricane Katrina, we have our doubts.
I will now refer to how the Governor made clear, based on
his rejection of Federal assistance for Katrina but the
acceptance of Federal assistance for the British Petroleum oil
spill. On April 29, 2010, the same Governor Bobby Jindal asked
Federal authorities to grant funding for Louisiana National
Guard members joining the multi-agency response to the offshore
oil spill. Here's what he said: The National Guard will provide
security, medical capabilities, engineers and communication
support in response to this threat.
I only have a few more comments about the Governor of this
State, currently the Governor. Governor Jindal vetoed a bill
that both Houses of Louisiana's legislature unanimously passed
which would have created a statewide federally funded agency to
address homelessness. Governor Jindal rejected a nearly $100
million unemployment insurance funding from the Federal
Government, ruining over 25,000 unemployed residents' lives and
prevented them from receiving unemployment compensation
insurance.
Governor Jindal claimed that the Federal Government is
``the problem'' and ``cannot be trusted,'' which I think is
totally unhelpful when the one time he's praising the Federal
Government, another time he's not taking Federal funds, and
another time he's telling us how untrustworthy the same Federal
Government that is sending him money is.
And finally, one last point about the Governor of a State
who knows the potential impacts of natural disasters as well as
any, Governor Jindal mocked President Obama and his
Administration for its funding of what he called ``something
called volcano monitoring,'' which he sees as a very bad and
useless activity.
And now we come to the present Administration. Public
confidence in the Obama administration's handling of the
British Petroleum oil spill gets him very poor ratings.
The Obama administration enforced the July 1, 2009,
deadline by which people were forced to leave FEMA temporary
housing, even though it was clear that they could not afford to
restore their homes or have the resources to find other
housing.
After Katrina resulted in a shortage of drywall, the
Federal Consumer Product Safety Commission failed to prevent
the usage in Louisiana of Chinese drywall that is known to
cause serious health problems.
The present Administration, in displacing these temporary
housing residents, failed to implement the United Nations'
guiding principles on internal displacement, namely a human
rights policy that has for several years guided our government
in providing temporary and permanent homes for people in
foreign countries who become displaced by earthquakes, typhoons
and flooding and implementing, instead, a far harsher and
callous policy on those in his own country.
This Administration continues the previous Administration
of breaking international law by demolishing public housing,
thereby preventing displaced, low-income, largely minority
residents from returning back to New Orleans.
And under the current Administration and during a time of
extremely high unemployment, people who are jobless can't
participate in the Administration's trial loan modification
program. So there's a need for increased HUD accountability
post-Katrina.
Louisiana's Road Home program is stifling African American
New Orleans homeowners' rebuilding efforts, as the African
American Road Home participants are finding their recovery is
limited to the depressed values of their pre-storm segregated
housing instead of the actual cost of repair.
So the Chairman of the Committee has raised a number of
issues that I join in with him in raising.
And I would like to point out that, with his approval, we
called the Secretary of HUD, Mr. Donovan, to suggest that he
come. He was unable to respond. His schedule wouldn't allow him
to come. But he sent instead attorney Renae Campbell, who is
here instead of the Secretary, and we appreciate her presence.
She is a special assistant in his department, working on these
kinds of matters. She is special assistant to the general
deputy assistant secretary for the Office of Fair Housing and
Equal Opportunity in HUD, Mr. Bryan Greene. She has been with
HUD since 2002, and she has been in this position for a year
and a half. I welcome her presence.
And I thank the Chairman for his generous relinquishing of
time for me to make this statement.
Mr. Nadler. I thank the gentleman.
Without objection, all Members will have 5 legislative days
to submit opening statements for the record.
And without objection, the Chair will be authorized to
declare recesses of the hearing.
We will now turn to our panel of witnesses.
We have four witnesses. James Perry is the executive
director of the Greater New Orleans Fair Housing Action Center.
Mr. Perry also serves on The Board of Directors, National Fair
Housing Alliance, the National Low-Income Housing Coalition,
the Gulf Coast Fair Housing Center and chairs the Louisiana
Housing Alliance's Board of Directors. He holds a bachelors
degree in political science from the University of New Orleans
and a J.D. from Loyola University School of Law.
Daniel Rothschild is the managing director of the Mercatus
Center's State and Local Policy Project, where he coordinates
Mercatus research on State and local economic policy and
directs the Gulf Coast Recovery Project, previously managing
international economic development programs at the Mercatus
Center. He earned his BA in history from Grinnell, his M.A. in
modern British history from the University of Manchester, and
his master. in public policy from the Gerald Ford School of
Public Policy at the University of Michigan.
Reilly Morse is the co-director of housing policy at the
Mississippi Center for Justice Katrina Recovery Office in
Biloxi. Mr. Morse is a former assistant municipal judge and
prosecutor in the City of Gulfport. He is also a member of the
Affordable Housing Committee of the Governor's Recovery
Commission and the Harrison County Recovery Committee. He is a
graduate of the University of Mississippi School of Law and
Millsaps College.
Professor Stacy Seicshnaydre is the William Christovich
Associate Professor of Law and director of the Civil Litigation
Clinic at Tulane University Law School. Following law school,
she clerked for the Honorable W. Eugene Davis of the U.S. Fifth
Circuit Court of Appeals. In 1995, she served as the first
executive director of the Greater New Orleans Fair Housing
Action Center and became the organization's general counsel in
2001. She began teaching as an adjunct faculty member at Tulane
Law School in 1998. Ms. Seicshnaydre earned her B.A. from the
University of Notre Dame and a law degree magna cum laude from
Tulane.
I am pleased to welcome all of you. Your written statements
in their entirety will be made a part of the record. I would
ask you to try to summarize your testimony in 5 minutes. To
help you stay within that time, there is a timing light at the
table. When 1 minute remains, the light will switch from green
to yellow, and then red when 5 minutes are up.
Before we begin, it's customary for the Committee to swear
in its witnesses. If you would please stand and raise your
right hand to take the oath.
[Witnesses sworn.]
Mr. Nadler. Let the record reflect that the witnesses
answered in the affirmative. You may be seated.
Mr. Nadler. I will begin by recognizing for 5 minutes Mr.
Perry.
TESTIMONY OF JAMES PERRY, EXECUTIVE DIRECTOR, GREATER NEW
ORLEANS FAIR HOUSING ACTION CENTER
Mr. Perry. Chairman, thank you for this opportunity.
And thank you, Representative Conyers.
My name is James Perry, and I serve as executive director
of the Greater New Orleans Fair Housing Action Center. In 1
month, we will commemorate the fifth anniversary of Hurricane
Katrina. Unfortunately, in the 5 years since Hurricane Katrina
has hit, you will find that our recovery in New Orleans is not
complete. And consistently, you will find that there are a few
groups of people who have had a more difficult time in that
process: People with disabilities, families with children, low-
income families and people of color have had an extremely
difficult time. Inconsistently, housing discrimination has been
a factor, but regretfully the thing that's been different since
Hurricane Katrina is that in addition to individual landlords
and apartment complexes engaging in discrimination, it's been
the acts of government entities and government bodies that's
made it extremely difficult for people to recover.
One specific example is the action of the Louisiana Road
Home program. It's a program that was established to assist
people in their recovery. When insurance companies didn't pay
enough money to folks trying to recover, the Road Home program
was supposed to step in and bridge the gap. We found in
examining the Road Home program that its formula was
discriminatory. The program made payments based on the value of
a person's home. And so based on the historic pattern of
segregation in the City of New Orleans, if you had two
identical homes, one in a White neighborhood and one in an
African American neighborhood, that sustained the exact same
damage, the home in the White neighborhood generally got more
money because it was worth more than the African American home.
And so the result has been that consistently thousands and
thousands of African American homeowners have gotten less money
under the Louisiana Road Home program. We estimate that it is
as many as 20,000 homeowners who have been shorted by the
program.
Now, of course, one of the problems is that this is a
program that is a Louisiana State program. The State of
Louisiana gets funding from the United States of America. In
fact, it receives Community Development Block Grant funding.
Under that funding formula, it's required to affirmatively
further fair housing in its efforts, and it has failed to do
that.
In addition, the program is monitored and in some ways
managed by the U.S. Department of HUD. So HUD plays a key role
in what's happened in that program and its failure to citizens
in the City of New Orleans.
In addition, many folks have read about litigation in St.
Bernard Parish that my organization is engaged in. St. Bernard
Parish passed an ordinance that made it almost impossible for
African American residents to live in the parish. It passed
what was called the blood-relative ordinance and said that in
order to rent a single-family home in the parish, you had to be
a relative by blood to the owner of the home. St. Bernard
Parish is a parish that is a majority White; 93 percent of the
homes in St. Bernard Parish are owned by White homeowners. The
result has been that it was almost impossible for Black, Latino
and Vietnamese homeowners to find housing in St. Bernard
Parish.
My organization filed suit against the parish and forced
them to overturn that ordinance. But shortly afterwards, St.
Bernard Parish passed an additional ordinance that continued to
make it very difficult. So over the course of the 5 years since
Hurricane Katrina, we've been in litigation with St. Bernard
Parish at almost every single point in an effort to ensure that
there were equal housing opportunities. Again, this is a
community that receives Federal funding. There's no way that
this community should be allowed to engage in these
discriminatory acts, particularly to make them part of the
actual law.
You will find in my written testimony a number of examples
of circumstances where government entities, where State and
local government entities have engaged in actual
discrimination, and you will even find circumstances where the
U.S. Department of HUD was involved or played some very
significant role in the discriminatory activities that
happened.
As we approach the 5-year anniversary of Hurricane Katrina,
there is one last opportunity for us to make sure that the Gulf
Coast is rebuilt in an equitable fashion, but it requires a
reconsideration of fair housing laws and a reconsideration of
the government's commitment to the City of New Orleans.
And so I ask the Members of this Committee to reconsider
the Federal Fair Housing Act and to reconsider regulations
dealing with affirmatively furthering fair housing. The true
teeth in the affirmatively furthering fair housing provisions
and regulations would give a real opportunity to people
attempting to recover in New Orleans and would also be key to
lending, fair lending and fair housing practices across the
Nation. Thank you very much.
[The prepared statement of Mr. Perry follows:]
Prepared Statement of James Perry
__________
Mr. Nadler. Thank you.
Before we go to Mr. Rothschild, let me ask you a question
at this point. The program you referenced a moment ago giving
those--where you said there was discrimination based on the
worth of the homes, were those grants or loans?
Mr. Perry. Those were grants.
Mr. Nadler. Those were grants. Now one might say, if it
were a loan program, that prudence or standard lending
practices would say you shouldn't lend to more than the value
of the home, because the home is a collateral for the mortgage.
So even though the repairs cost more, that's too bad because
you are limited by the value of the home in order to recover
the funds. But that's for a loan.
For a grant, that logic doesn't apply.
The question I have for you is, was any rationale ever
offered by the State authority as to why they were doing this?
Mr. Perry. Sure. Chairman, that's a great question. And I'd
start by noting that you are absolutely right to note that this
is very different from a loan program. In fact, it's more
similar to an insurance program. And for anyone who has insured
their own home, you know that you have a choice to get
insurance based on the value of your home or the cost to repair
your home, should damage happen.
Mr. Nadler. Obviously. But did they ever express a reason
why they were doing this?
Mr. Perry. We are in litigation over this issue right now,
and Judge Kennedy, the gentleman who is considering the case,
said in his ruling so far that there has been offered no
reason--no reasonable reason for not--for engaging in this
formula that had this discriminatory impact.
Mr. Nadler. Thank you. I'm sorry.
Mr. Rothschild is recognized.
TESTIMONY OF DANIEL M. ROTHSCHILD, MANAGING DIRECTOR, STATE AND
LOCAL POLICY PROJECT, AND DIRECTOR, GULF COAST RECOVERY
PROJECT, MERCATUS CENTER, GEORGE MASON UNIVERSITY
Mr. Rothschild. Chairman Nadler, Ranking Member
Sensenbrenner, thank you for the opportunity to discuss the
important issue of housing in the Gulf Coast area after
Hurricane Katrina and lessons about how we can apply this to
future disaster response. I commend the Subcommittee for
keeping the spotlight on this issue almost 5 years after the
hurricane.
Let me start off by explaining my background on the
subject. I am not a legal scholar but rather a field researcher
who has spent much of the past 5 years learning about the Gulf
Coast's recovery after Hurricane Katrina. I serve as the
director of the Gulf Coast Recovery Project at the Mercatus
Center at George Mason University, a university-based research
group focused on the economics of public policy issues.
I am part of a team that has conducted over 450 hours of
interviews with nonprofit leaders, social and economic
entrepreneurs, public officials, clergy, community leaders, and
everyday citizens in Louisiana and Mississippi, who are working
hard to rebuild their lives, businesses, schools and
communities after Katrina.
The important questions to ask are, what worked after
Hurricane Katrina? What didn't work? And what can public policy
improve?
I would like to first address what did work with regard to
housing and neighborhood redevelopment after Katrina and then
discuss what failed. Our research is described in much greater
depth in the written statement I have provided to the
Subcommittee.
Virtually every success related to rebuilding housing has
stemmed from the resilience and hard work of the communities
affected by Katrina, each in a different way. To give just a
few examples, the Broadmoor Improvement Association partnered
with universities and businesses to bring expertise and funds
to the community, leading to over two-thirds of the
neighborhood's homes being rebuilt or under repair 2 years
after Katrina.
In New Orleans East, the Mary Queen of a Vietnam Catholic
Church, served as a rallying point for the Vietnamese American
community, which rebounded quickly as a result.
Brad Pitt's Make It Right Foundation worked with the Lower
Ninth Ward Neighborhood Empowerment Network Association to
rebuild that devastated community.
Habitat for Humanity built a small neighborhood especially
for musicians and artists, and the list goes on.
Community leaders, clergy, and social entrepreneurs have
leveraged social capital and local knowledge to spur
rebuilding, and over 1 million Americans have volunteered their
time, some for weeks and some for years, to gut, fix, and
rebuild houses one at a time.
In short, housing has been rebuilt from the ground up.
Public policy, however, has in many cases done more to
impede than to promote the restoration of the Gulf Coast
housing stock after Katrina. To take just one example, look at
Louisiana's Road Home program. Though it was established and
funded by the end of 2005, by January 2007, Road Home had
written fewer than 1,000 checks to Louisiana homeowners. Two
years after Katrina hit, only 23 percent of those who had
successfully navigated a 57-step application process had
received settlements. Because the program endeavored to operate
not just as a disaster compensation program but also as a
community development program, homeowners whose homes were
damaged could not leave the State or become renters without
significant penalties to their settlements.
Hazard mitigation grants, which provided funds to
homeowners to elevate their homes, were abruptly stopped in
March 2007, when FEMA informed Louisiana that the State's
implementation of the program failed to comply with Federal
regulations. The program did not resume for 7 months.
Also in March 2007, a HUD ruling made Road Home subject to
a host of additional Federal regulations which shut down the
program for a month so it could be redesigned.
In short, Federal and State policies designed to rebuild
homes sowed confusion and uncertainty, making it difficult for
people to make informed choices about how, when, and where to
rebuild.
Local policy in some places aggravated this. The City of
New Orleans undertook five different replanning processes, one
of which suggested that whole neighborhoods, including
Broadmoor and the Lower Ninth Ward, should not be allowed to
rebuild. Put together, the confusion resulting from
bureaucratic, politically-designed programs and the city
planning mentality that viewed New Orleans as a blank slate
contributed more than perhaps any other factors to slowing the
rebuilding of homes and neighborhoods after Katrina.
Three key policy principles come out of our research and
interviews. The importance of certainty by government;
flexibility for citizens; and simplicity in execution.
Certainty, certainty about what economists call the rules
of the game for rebuilding is the best way to get homeowners
and landlords to revamp their properties, which in turn is the
best way to increase the quantity and reduce the cost of
housing. Unclear planning policies, confusing and contradictory
programs and broken promises only serve to slow the process.
Government must provide citizens with, for example, accurate
flood maps and information about public services and not change
these rules of the game.
My second point is flexibility. Flexibility means that
citizens can adapt and make choices that work for them within a
set of rules that do not change. Allowing people in communities
to figure out their own solutions to both short-term and long-
term housing problems will unleash creativity and create
opportunity.
Finally, simplicity, policy goals and programs should be
simple. Policymakers should avoid creating perverse incentives,
such as Louisiana did when the Road Home program effectively
penalized people for having carried homeowner and flood
insurance. Establish concrete and simple policy goals and
execute them to the simplest means possible.
To conclude, certainty, flexibility, and simplicity should
be the bedrock principles of postdisaster housing policy. I
thank you for your time and look forward to taking your
questions.
[The prepared statement of Mr. Rothschild follows:]
Prepared Statement of Daniel M. Rothschild
__________
Mr. Nadler. I thank you. And I will now recognize Mr.
Morse.
TESTIMONY OF REILLY MORSE, CO-DIRECTOR OF HOUSING POLICY,
MISSISSIPPI CENTER FOR JUSTICE
Mr. Morse. Thank you, Chairman Nadler, and Members of the
Committee for inviting Mississippi Center for Justice to
testify before your Committee.
While this Nation has made major strides toward greater
residential racial integration, there remains stubborn pockets
of segregation. My home community Biloxi/Gulfport, already
historically segregated, became more racially segregated during
the 1990's. So, in 2005, when Hurricane Katrina devastated tens
of thousands of homes along the coast, Mississippi faced a
crossroads. Would we build back better than before, as the
Governor put it? Or in fair housing terms, more integrated than
before? Or would we restore the status quo?
The Fair Housing Act expected HUD to use its grant-making
power to reduce discrimination and segregation to the point
where the supply of genuinely open housing would increase.
Congress generously appropriated funds to Mississippi for
disaster relief but prudently required that HUD ensure
compliance with the Fair Housing Act, a nonwaivable
requirement. HUD had the duty to ensure that the action plan
submitted by Mississippi would rebuild communities in ways that
would reduce or eliminate discrimination and segregation.
Unfortunately, with the blessing of a HUD led by the
previous Administration, Mississippi set itself upon an unjust
course. Among other things, the State spent over $1 billion to
benefit primarily wealthier insured homeowners. The State
certified that this action met the Fair Housing Act using
promises to update its 2004 Analysis of Impediments to Fair
Housing and its promise to use the remaining funds to increase
the supply of affordable housing.
Mississippi did not keep these promises and suffered no
consequences as a result. Its analysis of impediments was not
updated until after it diverted almost $800 million away from
housing programs and into business and economic development. It
never provided required race data. And the State's record since
the first and most generous program has been to spend less,
later and more slowly on low-income housing.
The second homeowner grant program, for instance, Mr.
Chairman, capped the grant at $100,000, while the first one for
wealthier homeowners was at $150,000. No explanation for that
was ever given.
Today the State is over 5,200 units short of the affordable
housing unit forecasts it has set for itself.
Also, Mississippi obtained waivers from HUD for the
requirement to spend funds on lower-income residents, covering
$4 billion out of the $5.5 billion Mississippi received. Today
our organization estimates that well over 5,000 households
still require assistance to repair their existing homes or
secure permanent safe housing, and that African Americans with
unrepaired damage outnumber Whites by two to one.
One reason for this disparity was Mississippi's decision
not to the provide assistance to wind-damaged homeowners.
Several concentrated areas of unrepaired damage lay north of
the railroad tracks, with some homes only three blocks from the
beach. The rail bed held back the tidal surge but not the
hurricane-force winds.
Depending on which side of the tracks you lived, Mr.
Chairman, you could get up to $150,000 or nothing. One of our
clients, Ms. Chamberlain, escaped the hurricane surge during
the storm, crossed the tracks to take refuge in a Black
family's home. Ms. Chamberlain received a grant but not the
woman whose wind-damaged roof sheltered her in the storm.
South Mississippi's classic southern pattern of residential
segregation meant that excluding wind-damaged households
disproportionately burdened African American neighborhoods.
Meanwhile, displaced south Mississippi renters waited for 3
years for the State to start spending on rental programs and
watched local government block private efforts to build
subsidized multifamily apartments in Whiter, more affluent
neighborhoods. Others who occupied Mississippi cottages, small,
sturdy, modular shotgun houses to replace the infamous FEMA
trailers saw their hopes of obtaining affordable permanent
housing thwarted by local government prohibitions, including
veto power extended to anyone within 160 feet of the lot.
In both cases, HUD and State officials administering
Federal block grant dollars had but failed to use the leverage
of withholding other the Federal funds to municipalities for
their refusal to affirmatively further Fair Housing, as was
ultimately done in St. Bernard Parish, Louisiana.
Today, however, HUD has clearly taken more seriously its
responsibilities to deeply assess the State's use of disaster
block grants. When Texas proposed to use Hurricane Ike funds in
ways that would have diverted resources away from the housing
needs of the most vulnerable storm victims, HUD stepped up.
Assistant Secretary For Community Planning and Development,
Mercedes Marquez, turned down Texas's proposal, perhaps a first
in HUD's history, because Texas did not have a current Analysis
of Impediments and because the proposal as structured would
likely stray too far from the core emergency disaster
assistance objectives set by Congress.
Texas and HUD later reached an accord which, among other
things, required an updated analysis of impediments to be
prepared before, not after, funds were obligated and spending
percentage targets for housing and lower-income residents.
This laudable strengthening of commitment under the current
HUD administrator now should be turned to the difficult
inherited problems remaining in my home State set forth in,
``How Will Mississippi Turn the Corner,'' a report released
today by my organization. Thank you very much.
[The prepared statement of Mr. Morse follows:]
Prepared Statement of Reilly Morse
__________
Mr. Nadler. Thank you. We will now hear from Professor
Seicshnaydre.
TESTIMONY OF STACY E. SEICSHNAYDRE, WILLIAM K. CHRISTOVICH
ASSOCIATE PROFESSOR OF LAW, TULANE LAW SCHOOL, NEW ORLEANS, LA
Ms. Seicshnaydre. Thank you, Mr. Chairman.
As a native New Orleanian and someone who teaches and
practices Fair Housing around New Orleans, I have had an
opportunity to study post-Katrina recovery through a fair
housing lens. I have been working on a paper, a work in
progress, that I have excerpted for the Committee, and I would
like to spend a few moments now highlighting in my remarks the
challenges we've faced in the rebuilding process and rebuilding
a more inclusive New Orleans.
New Orleans is certainly unique in its challenges, but I
believe in studying this issue that New Orleans can illustrate
the dynamic in which federally assisted housing programs
operate everywhere and the way we seem destined to repeat and
build on racial segregation in federally assisted housing
programs in the absence of a more robust commitment to
affirmatively furthering fair housing.
In looking at New Orleans pre-Katrina, it was clear that we
exceeded the poverty concentration averages when compared with
the top 50 MSAs nationally. We had extremely high----
Mr. Nadler. You mean the Metropolitan Statistical Area?
Ms. Seicshnaydre. Yes. Yes, sir.
So when you look at New Orleans in comparison to the larger
cities in the country, our levels of poverty concentration,
segregation were higher. And in the 1990's, whereas other
communities were experiencing improvements with respect to
racial segregation, New Orleans was becoming more segregated.
I think one of the most compelling statistics is when you
compare low-income Whites with low-income African Americans and
consider, what are the comparative housing choices between
those two groups? What you can find when looking at pre-Katrina
2000 Census numbers is that, whereas African Americans are
overwhelmingly concentrated in high-poverty neighborhoods, low-
income Whites have access in overwhelming numbers to middle-
class neighborhoods throughout the metropolitan area of New
Orleans.
So the question of whether Whites and African Americans had
equal housing choice pre-Katrina is certainly answered in the
negative.
So, Katrina, of course, provided an opportunity to undo
these patterns of racial and economic concentration and
segregation in our housing and create a more inclusive New
Orleans with a more regional approach to meeting the housing
needs of families of all incomes. And the reason we had this
opportunity was that our housing was destroyed, over 200,000
units were destroyed, and we had a massive infusion of Federal
dollars coming into our community to help us rebuild.
So did we embrace this opportunity to approach the
rebuilding effort from a more regional perspective and a more
conclusive perspective? Unfortunately not. And what we see is
sort of some enduring fears, customs and market dynamics, as
well as government failures that have operated to facilitate
exclusion. And unless we understand these dynamics, we appear
poised to repeat our past failures.
What are these dynamics? We've seen a proliferation of
rental bans, and these have been alluded to by earlier
testimony. We have rental bans appearing throughout the metro
area. We also have seen--and I think even more disturbingly,
we've seen that communities that had disproportionately fewer
rental units before the storm have taken steps to eliminate
rental units that pre-existed the storm. So rather than using
Katrina as an opportunity to correct historic imbalances of
rental versus homeownership units, we're seeing communities
take steps to exacerbate or intensify the imbalance.
The other thing that we've seen is that communities that
might be considered the second-rung communities on the housing
ladder, the places where we're seeing some level of
affordability and some level of integration, these tend to be
the first places where federally assisted housing is proposed.
Now St. Bernard Parish is a huge exception, because that
community has remained racially segregated, even though it
might have some greater levels of affordability. But we've seen
that instead of using Federal resources to make communities
more open, more affordable, we're seeing the resources sort of
follow a path of least resistance and go to the communities
that already have some level of affordability and already have
some level of integration.
So, in conclusion, I think New Orleans can help illustrate
what the enduring forces of segregation are and how we need to
better understand them and resist them, not only in New Orleans
but nationally. And in order to do this, we need to use the
affirmatively furthering provision of the Fair Housing Act. We
need to define it. We need to make it enforceable by private
parties. And HUD needs to use the affirmatively furthering
provision to ensure that it is doing more than just providing a
subsidy, that it's actually opening neighborhoods not already
open, making affordable what's not already affordable, enabling
housing subsidies to act as gateways to educational and
employment opportunity, inform families historically excluded
from housing markets about their choices. Any Federal housing
interventions that are not so aimed will almost certainly
exacerbate existing racial segregation and poverty
concentration. Thank you.
[The prepared statement of Ms. Seicshnaydre follows:]
Prepared Statement of Stacy E. Seicshnaydre
__________
Mr. Nadler. Thank you.
I will now recognize myself for some questions.
First Mr. Perry. In May 2008, you testified before the
Financial Services Subcommittee on Housing that the State of
Louisiana post-Hurricane Katrina adopted a new building code
but removed all the provisions that would have forced
developers to build multi-family units in a manner that was
accessible for people with physical disabilities, closed quote.
Is there any improvement in terms of fair housing for people
with physical disabilities in the building code to date in
Louisiana?
Mr. Perry. Unfortunately, there has not been any
improvement. My organization did a study of new construction
shortly after that testimony. We investigated 22 new apartment
complexes and found that every single one, 100 percent of those
complexes, failed accessibility tests under the Federal Fair
Housing Act.
Mr. Nadler. And they failed the accessibility test under
the ADA?
Mr. Perry. Not under the ADA. Well, some of them may have
had ADA failures, but we didn't investigate for the ADA. We
investigated exclusively under the Fair Housing Act.
Mr. Nadler. Now during the same testimony--well earlier,
actually 2 months earlier, you recommended the Congress require
municipalities to engage in specific activities that further
fair housing. What specific activities do you suggest that we
could require municipalities to do in order to promote fair
housing?
Mr. Perry. Well, the first is that if organizations or
cities are going to get Federal funding, then they should have
inclusionary zoning ordinances, ordinances that ensure that
there will be some level of construction of affordable rental
housing, and it can be properly integrated into communities.
Second is that they should engage in education and outreach
around Fair Housing laws. And so many communities don't do
anything, but they should engage----
Mr. Nadler. You are saying, in other words, as a condition
of receipt of Federal funds, they should have to have
inclusionary housing laws and do outreach?
Mr. Perry. Absolutely. And last but not least, they've
failed to engage in enforcement, of fair housing laws, and they
should engage in enforcement or fund organizations that do
engage in enforcement, in their communities.
Mr. Nadler. What would your recommendation be to make them
do that enforcement?
Mr. Perry. Well, I think it's very simple. It's that there
aren't regulations for the affirmatively furthering fair
housing requirements under the fair housing laws. So if we were
to promulgate regulations, those regulations could require them
to do so.
Mr. Nadler. Thank you.
Mr. Rothschild, you have been very critical of the Federal
Government in its role in the Gulf Coast rebuilding efforts
post-Katrina today. You have suggested the best approach to
rebuilding occurs by ``allowing people in communities to figure
out their own solutions to both short-term and long-term
housing problems.'' This approach, in your words, ``unleashes
their creativity and allows for that pre-Katrina life
closure.'' Where does the Federal Government fit into your
bottom-up approach to recovery efforts, if anywhere?
Mr. Rothschild. The Federal Government has an absolutely
critical role to play in rebuilding and recovery after any kind
of disaster like this, and that's through establishing and
enforcing clear rules of the game, through which people on the
ground can make informed intelligent decisions about how to go
about rebuilding their communities and their homes.
Mr. Nadler. But if we're allowing people in communities to
figure out their own solutions to both short-term and long-term
housing problems, how can we do that and have the Federal
Government establish those policies as you have just suggested?
Mr. Rothschild. I think that also goes to what I was saying
about the importance of simplicity in programmatic goals and
then simplicity in the execution of those goals.
Mr. Nadler. I mean, in allowing people and communities to
figure out their own solutions, what do you do about protecting
people in communities where those communities engage in
discriminatory practices? What do you do for the people who
find themselves subjected to discriminatory ordinances and
policies for which the Federal Fair Housing Act should serve as
a check if you do this bottom-up development?
Mr. Rothschild. As I mentioned at the beginning of my
testimony, I am not a legal scholar so that's not an issue that
I could directly address.
Mr. Nadler. Well, but if you're talking--okay, but if
you're talking about a bottom-up approach, it seems to me you
have to make a recommendation in there either to say, we don't
care about enforcing fair housing provisions, or, despite the
bottom-up approach, this doesn't interfere with the enforcement
of fair housing provisions if do you this and that.
Mr. Rothschild. Again, I think the really critical thing is
that there is certainty about the rules of the game and that
the rules of the game are not constantly changing underneath
people's feet as they try to rebuild. So it's important that
the government make those clear, credible commitments
regardless of what they are.
Mr. Nadler. Even if they're clear Federal commitments about
discrimination and fair housing policy, as long as they're
there and people know what they are, then they can do the
bottom-up?
Mr. Rothschild. It's dangerous any time the government--
it's dangerous to the recovery process if government makes a
promise or makes a commitment and government doesn't follow
through on it.
Mr. Nadler. But if it makes a rule, you may not
discriminate. This is what discrimination is. And that's okay?
Mr. Rothschild. I'm sorry. Could you repeat the question?
Mr. Nadler. If it makes a rule--because you said
certainty--if it makes a rule, you may not discriminate in
whatever you do, and here's how we define discrimination, then
that's okay.
Mr. Rothschild. It's important to follow through on the
rules that are created, but it's also important that those
rules be done in a way--are enacted in a way that people on the
ground can understand and can be expected to follow.
Mr. Nadler. Thank you.
Mr. Morse, in a list of recommendations you've shared with
us today, you include, quote, ``The endorsement of the
interpretation of section 804(b), which is the prohibition of
discrimination in sale or rental of housing under Block v.
Frischholz.'' en banc, the Seventh Circuit found that the Fair
Housing Act reaches a broader range of post-acquisition
conduct, which in this case could include the condominium
board's repeated removal of a family's mezuzah attached to the
front door frame of that family's condo. With such a favorable
ruling, can you discuss the need for Federal legislation that
ensures the reach of the Fair Housing Act includes post-
acquisition conduct? And are you aware of other conduct like
that which occurred in the context of religious symbols that
dwellers would be particularly vulnerable to without
legislation?
Mr. Morse. Well, I would say, it's a great ruling for the
Seventh Circuit.
Mr. Nadler. It's a great what? I'm sorry.
Mr. Morse. I said, that's a great ruling for the Seventh
Circuit, and it's a great ruling I think for the companion
case, the Ninth Circuit. I don't know that--the Fifth Circuit,
where most of us reside and work, yet have that direct
advantage of that ruling. The problem for us is to get
consistency and uniformity across the Nation on a specific
ruling of that sort. So that's why we would encourage that
legislation put that formally in place.
Mr. Nadler. So you would encourage legislation on this?
Mr. Morse. I would encourage you to put everything firmly
in place explicitly, given the sometimes hostile interpretative
approach of the courts to the Fair Housing Act.
Mr. Nadler. I will tell you that I designed such
legislation after that mezuzah case came down from a three-
panel circuit--I think it was the Seventh Circuit, but then
they reconsidered it in Block, so we put that on the side. But
you are saying that because of the uncertainty in circuits, we
might reconsider that?
Mr. Morse. I would encourage you to.
Mr. Nadler. Okay. You have discussed the NIMBY syndrome,
Not In My Backyard. We have seen this approach taken with the
Mississippi cottages, which were a response to the problem-
riddled FEMA trailers that were provided to Katrina victims,
which I know seem to be being reused now after the Gulf oil
spill, which is incredible. But anyway, jurisdictions are now
pursuing ordinances that would eliminate such housing and,
again, displaced residents because they, quote, ``don't want it
in their backyard.'' We can create laws to combat such laws,
but in the end, when nothing has been done to educate
individuals, families and communities as to the importance of
having fair and inclusive housing, we will not truly bring an
end to the NIMBY syndrome. What can be done in terms of
education to combat the NIMBY mind-set in your opinion?
Mr. Morse. Well, on the Gulf Coast, one of the efforts
undertaken was something called Warm Welcome Gulf Coast, which
humanized and personified individuals, working families, folks,
which other residents of the Gulf Coast area could readily
identify with and put a human face on folks who are advantaged
by having more inclusionary zoning and more housing
opportunity. Those sorts of things, those very public
discussions are essential. There is essential leadership that
needs to be expressed at the local government level and there
has been a paucity of that. So maybe the sort of education
efforts that Mr. Perry was referring to would also add to it.
But I must tell you, it's a chronic problem, and it
sometimes seems to me that it needs to have some kind of
intervention possibility and either through threatening other
funds available to municipalities or through some kind of
public interest override. I have heard of such a thing in some
cases where repeatedly multifamily rentals are vetoed in local
government situations, and the developer in some jurisdictions
can appeal to the courts to say, I have made every possible--I
have met every possible requirement and this is just an
instance of NIMBY. And if you meet a certain set of standards--
I think that's a rule that may be in place in Massachusetts--
some version of that sort of override has got to be available
because there are some stubbornly recalcitrant jurisdictions
where just education----
Mr. Nadler. Nothing will ever work.
Mr. Morse. Correct.
Mr. Nadler. Thank you. Now you have also testified before
other Committees in Congress on the serious housing barriers to
lower-income families with limited reading, literacy or
financial literacy abilities. Are there still requirements for
housing assistance that make the acquisition of such assistance
impossible or unnecessarily difficult for low-income families
that are limited in reading or literacy or financial literacy
skills?
Mr. Morse. Well, last year, for example, Mississippi
received a series of vouchers to try to help very low-income
renters who were being pressured to leave FEMA trailers and
MEMA cottages to access affordable rental in the area. And the
multistep process folks had to go through to achieve
eligibility and actually convert that voucher into a location
was a serious problem. And in fact, the State officials, folks
with whom we've had not an especially warm relationship,
reached out to us and asked us to help try and increase the
usage of those vouchers. So the answer is, yes, there is that
sort of need. And it needs to----
Mr. Nadler. There is what?
Mr. Morse. There is a sort of need to provide--I would call
it just extra strong case management and extra strong
explanations and very careful sort of guiding people through
some of these processes. It's even more true when folks are in
displaced situations and their minds are distracted----
Mr. Nadler. So, in other words, you are saying that--you
use the phrase case management to help people through the
bureaucracy and the forms and so forth.
Mr. Morse. In certain cases, I do think that's an important
part of the process. And I think that there are thousands of
people in the Gulf region who have just walked away in futility
and are living with other relatives just because they can't----
Mr. Nadler. So what would you think of a provision of law
that said that X percent of any grant had to be used by local
government either to do it itself or to subcontract with some
private organization to provide case management services to
applicants?
Mr. Morse. I think it's a worthwhile approach. But I would
certainly encourage Congress to consider urging municipalities
to bring in nonprofit community organizations which, generally
speaking, have warmer, more approachable relationships with the
disadvantaged populations you are trying to deal with. A lot of
times just trying to do the case management through the city
people is just reproducing the same problem over and over
again. These folks are the same folks that can't help them in
the first instance get through the process, so they need
someone who can function more as an advocate, Mr. Chairman.
Mr. Nadler. So you would say that even if the purpose of
this division of the city government with the function of the
advocates----
Mr. Morse. Well, I have yet to encounter that where I live,
sir. I have yet to encounter that kind of city government
official where I live. So I'm unfamiliar with that.
Mr. Nadler. Okay. Now you have previously described FEMA's
failure to provide elderly and disabled displaced storm victims
with suitable housing. You noted that the Federal Government
needs to improve its performance with disability access in
catastrophic disasters. What do you think we should do,
Congress should do, to ensure that appropriate housing for
elderly and disabled disaster victims is afforded properly in
the future?
Mr. Morse. If you are talking about postdisaster, I think
the thing that Congress needs to do is, they need to not leave
unfettered discretion to Governors on what to set the
priorities at. Congress needs to be more directive in how it
tells States to spend money. In Mississippi, it was more than 3
years before our State started actually spending money on any
rental program. What Congress could do is say, for particularly
elderly disabled folks, folks who are especially vulnerable and
do not have the ability to lift a hammer and pull themselves up
by their bootstraps, is to say, early dollars that you spend
need to go out to the most vulnerable populations. We figured
the folks who got the money in Mississippi, by about a rate of
80 percent, were relatively wealthy or insured folks, folks who
could earn their way or borrow their way or get insurance to
hire somebody to take care of their needs.
Mr. Nadler. Do you think the State government and local
government doesn't make such judgments?
Mr. Morse. I am just saying that historically that is not
what we have seen in either Louisiana or Mississippi. This is
not unique to Mississippi. The thing that I am suggesting you
do is to be more explicit and directive and formulaic in the
way that you use these moneys.
Mr. Nadler. We should be more explicit and formulaic in
directing money in ways that make obvious sense, that benefit
the most vulnerable populations, in the expectation that if we
don't do that, the States often won't.
Mr. Morse. Precisely. When you and other Members of
Congress came to the coastal area, your sympathies were excited
by elderly, disabled folks knee deep in mud. Well,
unfortunately, since nobody put it into the law, they did not
get the early money that you would have wished them to get. I
am encouraging you to be more explicit about that next time
around.
Mr. Nadler. Thank you.
Professor Seicshnaydre, a couple of years ago, you said
that post-Katrina planning has resulted in two false choices
when it comes to affordable housing options. The options are to
either, one, keep public housing as it was before the storm,
meaning segregated, or two, remove blight, redevelop it, and
attract market rate tenants to reduce the number of affordable
apartments, which I assume would mean segregated. As this
August will mark the fifth-year anniversary of Katrina, are we
now at a point where we have real choices when it comes to
affordable housing options? If so, how have these housing
options been pursued and implemented?
Ms. Seicshnaydre. Chairman, that question runs directly
into the discussion about the NIMBYism that I think we've all
commented on today. And that is that, unfortunately, we've seen
a disconnect between public housing redevelopment policy and
policy to create more regional, inclusive approaches to
providing affordable housing. If we're focused on tearing it
down, but we're not focused on creating access and inclusion in
a metropolitan area, then have we really succeeded in
deconcentrating poverty? Though justifications for the public
housing redevelopment programs are to deconcentrate poverty.
Mr. Nadler. Say that again.
Ms. Seicshnaydre. Many of the justifications fueling the
redevelopment of public housing are based on the notion that
public housing historically has concentrated poor people and
has segregated them racially and economically.
Mr. Nadler. And you are saying we shouldn't do that again,
obviously.
Ms. Seicshnaydre. We shouldn't do that again. But when we
go about fixing that, we need to have a comprehensive approach
so that we're not just tearing it down without making sure
people have a place to go. And unfortunately, in New Orleans--
and I don't think New Orleans is so unique to other communities
in this respect--unfortunately, what we've seen is, we tore it
down, but we didn't make sure that on a regional basis, we were
ensuring that folks had a better place to go.
Mr. Nadler. So you are saying that if you tore it down x
units of low-income housing, you weren't making sure that in
the reconstruction you were replacing at least x units of low-
income housing in the region?
Ms. Seicshnaydre. Certainly there was not one for one
replacement and that was a matter of great concern.
Mr. Nadler. Do you think Congress should mandate a one-for-
one replacement?
Ms. Seicshnaydre. I would recommend that Congress
reconsider that and put back in a one for one replacement
provision.
Mr. Nadler. Back in, it used to be there?
Ms. Seicshnaydre. Used to be.
Mr. Nadler. When was it there?
Ms. Seicshnaydre. I would have to--I'm not positive about
that.
Mr. Nadler. Are we talking ancient history or until 5 years
ago.
Ms. Seicshnaydre. I'm thinking maybe in the 1990's.
Mr. Nadler. In the 1990's, such a requirement which had
been there was removed?
Ms. Seicshnaydre. I believe that it was eliminated, yes.
Mr. Nadler. Whenever it was eliminated, do you know what
was the rationale at that time?
Ms. Seicshnaydre. Probably expense.
Mr. Nadler. Okay. Now you have argued that a just public
housing policy would be resident-conscious, meaning it would be
resident-driven and focused on the residents who lived in
public housing before the makeover. That's what we were just
talking about in fact. Are you aware of a city, town or other
jurisdiction that has implemented a successful resident-
conscious public housing policy?
Ms. Seicshnaydre. Well, unfortunately, the jurisdictions
that have really managed to embark upon a resident-conscious
approach are jurisdictions in which there has been litigation.
So where housing authorities and HUD have been sued for
historic segregation in their programs, consent decrees have
emerged that have brought residents to the table and ensured
that, over time, housing authorities and municipalities, you
know, remedied historic segregation in a way that included
residents.
Mr. Nadler. And those policies have been implemented in
various places?
Ms. Seicshnaydre. Yes.
Mr. Nadler. And how have they worked out?
Ms. Seicshnaydre. Well I think in communities like Dallas,
in communities where--Baltimore is still--they're still
struggling to implement--actually, they're still negotiating a
remedy. Chicago had the Gautreaux litigation that had a remedy
in place for decades. Those communities are further along. I
don't think we can say that they've managed to eliminate racial
segregation in their metropolitan areas, but they are further
along than certainly we are in New Orleans.
Mr. Nadler. Okay. And finally, as we discuss these fair
housing issues in the context of Katrina--we are all aware that
these issues of discrimination and housing sales, rentals,
financing occurred throughout the entire country--not in the
exact form necessarily. But overall they necessarily do. Aside
from re-establishing the one-for-one replacement rule, what
recommendations would you have for Federal legislation that
could strengthen and improve the Fair Housing Act?
Ms. Seicshnaydre. I would strongly recommend that we look
at the affirmatively furthering fair housing provision as kind
of the missing link in ensuring that when we intervene in the
housing market, when the Federal Government intervenes in the
housing market, that it does so in a way that promotes a more
regional approach, that it promotes inclusion, and that
affordable housing can be provided in a way that gives people
more housing choice and access to high-opportunity
neighborhoods. There is some hope on the horizon. There are
some programs in HUD's 2011 budget that give us some hope that
we can move in a positive direction.
But I think, with respect to Congress, the affirmatively
furthering provision needs to be better defined. We need a
private right of action, and we need to make sure that HUD
actually enforces it.
Mr. Nadler. Private right of action is very important here.
Ms. Seicshnaydre. Yes.
Mr. Nadler. Thank you. I thank the witnesses.
Without objection, all Members will have 5 legislative days
to submit to the Chair additional written questions for the
witnesses, which we will forward and ask the witnesses to
respond as promptly as they can so that their answers may be
made part of the record. Without objection, all Members will
have 5 legislative days to submit any additional materials for
inclusion in the record. And we're thanking the Members and
thanking the panelists and the witnesses.
This hearing is adjourned.
[Whereupon, at 3:33 p.m., the Subcommittee was adjourned.]
A P P E N D I X
----------
Material Submitted for the Hearing Record