[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]
THE FUTURE OF HOUSING IN AMERICA:
A BETTER WAY TO INCREASE EFFICIENCIES
FOR HOUSING VOUCHERS AND CREATE
UPWARD ECONOMIC MOBILITY
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON
HOUSING AND INSURANCE
OF THE
COMMITTEE ON FINANCIAL SERVICES
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED FOURTEENTH CONGRESS
SECOND SESSION
__________
SEPTEMBER 21, 2016
__________
Printed for the use of the Committee on Financial Services
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Serial No. 114-101
HOUSE COMMITTEE ON FINANCIAL SERVICES
JEB HENSARLING, Texas, Chairman
PATRICK T. McHENRY, North Carolina, MAXINE WATERS, California, Ranking
Vice Chairman Member
PETER T. KING, New York CAROLYN B. MALONEY, New York
EDWARD R. ROYCE, California NYDIA M. VELAZQUEZ, New York
FRANK D. LUCAS, Oklahoma BRAD SHERMAN, California
SCOTT GARRETT, New Jersey GREGORY W. MEEKS, New York
RANDY NEUGEBAUER, Texas MICHAEL E. CAPUANO, Massachusetts
STEVAN PEARCE, New Mexico RUBEN HINOJOSA, Texas
BILL POSEY, Florida WM. LACY CLAY, Missouri
MICHAEL G. FITZPATRICK, STEPHEN F. LYNCH, Massachusetts
Pennsylvania DAVID SCOTT, Georgia
LYNN A. WESTMORELAND, Georgia AL GREEN, Texas
BLAINE LUETKEMEYER, Missouri EMANUEL CLEAVER, Missouri
BILL HUIZENGA, Michigan GWEN MOORE, Wisconsin
SEAN P. DUFFY, Wisconsin KEITH ELLISON, Minnesota
ROBERT HURT, Virginia ED PERLMUTTER, Colorado
STEVE STIVERS, Ohio JAMES A. HIMES, Connecticut
STEPHEN LEE FINCHER, Tennessee JOHN C. CARNEY, Jr., Delaware
MARLIN A. STUTZMAN, Indiana TERRI A. SEWELL, Alabama
MICK MULVANEY, South Carolina BILL FOSTER, Illinois
RANDY HULTGREN, Illinois DANIEL T. KILDEE, Michigan
DENNIS A. ROSS, Florida PATRICK MURPHY, Florida
ROBERT PITTENGER, North Carolina JOHN K. DELANEY, Maryland
ANN WAGNER, Missouri KYRSTEN SINEMA, Arizona
ANDY BARR, Kentucky JOYCE BEATTY, Ohio
KEITH J. ROTHFUS, Pennsylvania DENNY HECK, Washington
LUKE MESSER, Indiana JUAN VARGAS, California
DAVID SCHWEIKERT, Arizona
FRANK GUINTA, New Hampshire
SCOTT TIPTON, Colorado
ROGER WILLIAMS, Texas
BRUCE POLIQUIN, Maine
MIA LOVE, Utah
FRENCH HILL, Arkansas
TOM EMMER, Minnesota
Shannon McGahn, Staff Director
James H. Clinger, Chief Counsel
Subcommittee on Housing and Insurance
BLAINE LUETKEMEYER, Missouri, Chairman
LYNN A. WESTMORELAND, Georgia, Vice EMANUEL CLEAVER, Missouri, Ranking
Chairman Member
EDWARD R. ROYCE, California NYDIA M. VELAZQUEZ, New York
SCOTT GARRETT, New Jersey MICHAEL E. CAPUANO, Massachusetts
STEVAN PEARCE, New Mexico WM. LACY CLAY, Missouri
BILL POSEY, Florida AL GREEN, Texas
ROBERT HURT, Virginia GWEN MOORE, Wisconsin
STEVE STIVERS, Ohio KEITH ELLISON, Minnesota
DENNIS A. ROSS, Florida JOYCE BEATTY, Ohio
ANDY BARR, Kentucky DANIEL T. KILDEE, Michigan
KEITH J. ROTHFUS, Pennsylvania
ROGER WILLIAMS, Texas
C O N T E N T S
----------
Page
Hearing held on:
September 21, 2016........................................... 1
Appendix:
September 21, 2016........................................... 37
WITNESSES
Wednesday, September 21, 2016
Blom, Dominique, Deputy Assistant Secretary, Office of Public
Housing Investments, U.S. Department of Housing and Urban
Development.................................................... 4
Lovell, Cheryl, Executive Director, the St. Louis Housing
Authority...................................................... 10
Sard, Barbara, Vice President, Housing Policy, the Center on
Budget and Policy Priorities (CBPP)............................ 5
Thrope, Deborah, Staff Attorney, the National Housing Law Project
(NHLP)......................................................... 7
Young, Ailrick, Executive Director, the Laurel Housing Authority. 9
APPENDIX
Prepared statements:
Blom, Dominique.............................................. 38
Lovell, Cheryl............................................... 47
Sard, Barbara................................................ 55
Thrope, Deborah.............................................. 70
Young, Ailrick............................................... 83
Additional Material Submitted for the Record
Waters, Hon. Maxine:
Written statement of the Council of Large Public Housing
Authorities................................................ 91
Written statement of the National Low Income Housing
Coalition.................................................. 94
THE FUTURE OF HOUSING IN AMERICA:
A BETTER WAY TO INCREASE EFFICIENCIES
FOR HOUSING VOUCHERS AND CREATE
UPWARD ECONOMIC MOBILITY
----------
Wednesday, September 21, 2016
U.S. House of Representatives,
Subcommittee on Housing
and Insurance,
Committee on Financial Services,
Washington, D.C.
The subcommittee met, pursuant to notice, at 10:01 a.m., in
room 2128, Rayburn House Office Building, Hon. Blaine
Luetkemeyer [chairman of the subcommittee] presiding.
Members present: Representatives Luetkemeyer, Royce,
Garrett, Pearce, Posey, Ross, Barr, Rothfus, Williams; Cleaver,
Velazquez, Capuano, Clay, Ellison, Beatty, and Kildee.
Ex officio present: Representatives Hensarling and Waters.
Also present: Representative Palazzo.
Chairman Luetkemeyer. The Subcommittee on Housing and
Insurance will come to order. Without objection, the Chair can
call a recess of the subcommittee at any time.
Today's hearing is entitled, ``The Future of Housing in
America: A Better Way to Increase Efficiencies for Housing
Vouchers and Create Upward Economic Mobility.''
Before we begin, I would like to thank the witnesses for
appearing before the subcommittee today. I look forward to your
testimony.
I now recognize myself for 3 minutes to give an opening
statement.
Today's hearing serves as another opportunity for this
subcommittee to look at the state of housing in our Nation and
to examine potential changes to Federal housing programs that
would maximize the investment of taxpayer funds and serve more
families in a smarter way.
Too often, the regulatory regime surrounding public housing
authorities (PHAs) has the ultimate effect of stifling
opportunities for tenants. Rules preventing flexibility and
modernization for PHAs mean more work and fewer served. Archaic
rules surrounding housing vouchers limit the ability of
residents to pursue financial independence.
All of this, combined with a budget situation that is not
improving, means that we need to think differently about the
way we administer housing programs.
With H.R. 3700, the Housing Opportunity Through
Modernization Act, this subcommittee worked together because we
shared a similar vision. We looked at the programs and
processes of HUD and the Rural Housing Service to see where we
could enact commonsense reforms and make both Departments work
better for the American people. Together, and with incredible
support from housing industry leaders, residents, and
advocates, we made meaningful strides to raise up those in need
and give more Americans the opportunity, as I always say, to
have not just a place to live but a place to have a life.
That is also the objective of the Speaker's Task Force on
Poverty. Speaker Ryan has charged each of us with developing
policy solutions that foster independence and freedom and allow
for a better way.
Today, we will hear from a panel of witnesses who will
offer ideas for reform of rules impacting public housing
authorities and the Housing Choice Voucher Program, among
others. We will also discuss the Administration's housing
choice voucher mobility demonstration program.
It is my hope that the spirit that fostered H.R. 3700
continues to lead us to more collaborative reforms. We can and
should continue to push for meaningful change that creates
upward economic mobility and better stewardship of taxpayer
dollars.
We have a distinguished panel with us today, including
Cheryl Lovell, executive director of the St. Louis Housing
Authority. This committee is always glad to see and hear from
fellow Missourians.
My colleagues and I look forward to each of your
testimonies.
The Chair now recognizes the ranking member of the
subcommittee, the gentleman from Missouri, Mr. Cleaver, for 5
minutes for an opening statement.
Mr. Cleaver. Thank you, Mr. Chairman, and members of the
subcommittee.
I would also like to take this opportunity to welcome those
of you who are here to provide us with information. We have an
opportunity today to take a very close look at the Section 8
Housing Choice Voucher Program as well as discuss and perhaps
receive some suggestions from you on the best ways to increase
and enhance the portability process for residents who rely on
these vouchers.
Everyone here knows the importance of housing choice
vouchers in our overall public housing strategy. Administered
by the public housing authorities, these vouchers enable low-
income individuals to live in private-market rental units by
providing funding that makes up the difference of the amount
the individual can afford and the rental payment itself.
Currently, about 2.2 million Americans rely on this program.
These vouchers go to some of our most vulnerable
populations: extremely low-income families; seniors; and the
disabled. All parents want the best outcome for their children,
whether they are poor or rich, and providing a child with a
safe, reliable home is vital to their growth, just as helping
children access educational opportunity is vital to their
overall success and well-being.
By improving upon the portability process, we will help
families move to areas with lower rates of poverty. A number of
our witnesses have cited a 2015 study by Harvard Professor Raj
Chetty which finds that moving to a lower-poverty neighborhood
significantly improves college attendance rates and earnings
for children who were young when their families moved.
Though we have some conflict on some parts of this program,
I think that you, as witnesses, can provide us with valuable
information about HUD's more recent actions on this issue,
including the President's Fiscal Year 2017 funding request for
a mobility demonstration program, which I hope we can get
through. I think it is critically important for us to
demonstrate this program so that when we come back next year we
will be able to put programs like this into play.
Last year, this committee was able to push past the
paralyzing partisan divide, due to the leadership of our
chairman, and we passed a long-needed overhaul of many of our
public housing policies. And without the support of many in
this room today, H.R. 3700 would not have been possible.
So I want to thank all of you who helped make it possible,
and we need your help now.
I yield back, Mr. Chairman.
Chairman Luetkemeyer. I thank the gentleman.
Today, we welcome the testimony of Ms. Dominique Blom,
Deputy Assistant Secretary of the Office of Public Housing
Investments, U.S. Department of Housing and Urban Development;
Ms. Barbara Sard, vice president of housing policy at the
Center on Budget Policies and Priorities; Ms. Deborah Thrope,
staff attorney at the National Housing Law Project; Mr. Ailrick
Young, executive director of the Laurel Housing Authority in
Laurel, Mississippi; and Ms. Cheryl Lovell, the executive
director of the St. Louis Housing Authority in St. Louis,
Missouri.
Each of you will be recognized for 5 minutes to give an
oral presentation of your testimony, and without objection,
your written statements will be made a part of the record.
Before we turn to questioning, I would like to extend a
special welcome to my fellow Missourian on today's panel, and
yield to the gentleman from St. Louis, Mr. Clay, for an
introduction.
Without objection, the gentleman from Missouri is
recognized.
Mr. Clay. I thank you, Mr. Chairman. And just very briefly,
I want to introduce my constituent, who has advanced the cause
of quality, affordable housing for thousands of low- and
moderate-income residents in St. Louis.
Ms. Cheryl Lovell, the executive director of the St. Louis
Housing Authority, became the executive director just about the
same time that I was first elected to Congress. Some of the
members of the subcommittee may recall that for many years
prior to that, the St. Louis Housing Authority was considered a
symbol of dysfunction, despair, and decline.
Today, that is no longer the case, and much of that
improvement is because of Cheryl's tenacity and commitment to
doing things right. During her tenure, the HUD rating score for
the St. Louis Housing Authority has risen from a dismal 14 to
an admirable 92.
During the last 16 years, the St. Louis Housing Authority
has developed over 2,200 new rental units, of which over 1,000
units are public housing; and they have used public and private
partnerships, leveraging $200 million in public money with $325
million of private funds, for a total development portfolio of
$525 million in completed projects.
Cheryl has also worked closely with my staff and I to make
Section 8 work better for more low-income citizens and to also
leverage other HUD support, such as HOPE VI grants, which has
helped to transform shameful public housing failures into
attractive and welcoming housing where citizens can live in
dignity.
I am pleased to welcome her here, Mr. Chairman, and I thank
you for the opportunity to introduce her. I yield back.
Chairman Luetkemeyer. I thank the gentleman.
Ms. Lovell, as you can see, you have a very passionate
advocate in Mr. Clay for housing issues, and we certainly are
excited to have him on the committee, and he has done a
fantastic job for you.
With that, Ms. Blom, you are recognized for 5 minutes.
STATEMENT OF DOMINIQUE BLOM, DEPUTY ASSISTANT SECRETARY, OFFICE
OF PUBLIC HOUSING INVESTMENTS, U.S. DEPARTMENT OF HOUSING AND
URBAN DEVELOPMENT
Ms. Blom. Thank you. Good morning.
Chairman Luetkemeyer, Ranking Member Cleaver, and members
of the subcommittee, thank you for allowing me this opportunity
to discuss how HUD is working to make its housing programs more
efficient while expanding economic mobility for Americans who
count on us. I am Dominique Blom, the Deputy Assistant
Secretary for the Office of Public Housing Investments at HUD.
The Housing Choice Voucher Program, which the committee has
asked specifically about, is one of HUD's most important
initiatives in this ongoing effort. HUD provides direct housing
assistance to 2.3 million households living in public housing
and the project-based rental housing program, and supports
another 2.2 million Americans who are elderly, disabled, and
families with children through housing choice vouchers. This
support is vital to helping these citizens keep a roof over
their head.
In fact, without housing choice vouchers, much of the
progress we have made as part of President Obama's Opening
Doors plan to end homelessness in our Nation, implemented in
partnership with the Congress, would not have been possible.
HUD is a principal partner in fulfilling the President's vision
of a Nation in which everyone has a secure home. That is why we
have stepped up our work through efforts like the Family
Unification Program to help end youth homelessness, especially
among Americans who are involved in the foster care system,
many of whom are often at greatest risk of becoming homeless.
In addition to helping more Americans secure a stable home,
HUD is also working to ensure that more of the families we
support live in neighborhoods of opportunity, and housing
choice vouchers are a central part of this effort. As our
Moving to Opportunities demonstration has shown, mothers who
use their vouchers to move to safer, low-poverty neighborhoods
experience a host of health benefits, including a 50 percent
lower rate of diabetes and a 42 percent reduction in severe
obesity, and the youngest children of these mothers have higher
rates of college attendance and 31 percent higher earnings as a
result of their move.
We look forward to working with the members of the
committee to make this program even more effective in the
future.
Further, HUD continues our efforts to expand the Moving to
Work (MTW) demonstration. For 20 years, the MTW initiative has
given public housing authorities greater flexibility to invest
in innovation and use Federal resources in a smarter way for
the families that they serve. By expanding this important
effort to 100 more public housing authorities, HUD will learn
from new policy interventions and apply that knowledge to our
entire housing authority portfolio, to include simplifying the
administration of housing assistance programs.
The MTW expansion will help us build on other actions HUD
has undertaken to reduce Administration requirements for PHAs
across the Nation. HUD held a multiyear review of existing
requirements, resulting in a streamlining rule to make
administration of a number of PHA programs more efficient amid
reduced funding.
And HUD believes our new rules support the progress we
anticipate as a result of two important bills enacted in the
past year by Congress, namely the Fixing America's Surface
Transportation Act and the Housing Opportunities Through
Modernization Act.
Within its existing authority, HUD is working to streamline
and create more efficiencies so that we deliver for the people
who count on us directly while also strengthening our Nation as
a whole. We look forward to working with this committee and
with your colleagues in Congress to continue the important
progress we have already achieved.
Thank you, and I would be happy to answer any questions.
[The prepared statement of Ms. Blom can be found on page 38
of the appendix.]
Chairman Luetkemeyer. Thank you, Ms. Blom.
Ms. Sard, you are recognized for 5 minutes.
STATEMENT OF BARBARA SARD, VICE PRESIDENT, HOUSING POLICY, THE
CENTER ON BUDGET AND POLICY PRIORITIES (CBPP)
Ms. Sard. Thank you, Chairman Luetkemeyer, Ranking Member
Cleaver, and members of the subcommittee. I am Barbara Sard,
vice president for housing policy at the Center on Budget and
Policy Priorities. Thank you for giving me the opportunity to
testify this morning, and particular thanks to the two of you
and your staff and the members of this committee for your
leadership and persistence in enacting H.R. 3700, the first
comprehensive reform of the low-income housing programs in
nearly 2 decades.
The recent report of the Speaker's Task Force on Poverty,
Opportunity, and Upward Mobility recommends in part that we
should enhance the portability of housing vouchers and reform
the fragmented system of thousands of public housing agencies.
We agree with those recommendations and we think they form the
foundation for a new stage of bipartisan work to improve the
low-income housing programs.
These recommendations are based on a strong body of
evidence that the chairman referred to, and Ms. Blom referred
to, which shows that growing up in safe, low-poverty
neighborhoods can improve results for adults and children,
including, most notably, an increase in earnings among young
adults of, on average, $3,500 per year--very significant
impacts.
Unfortunately, only a small share of families now use
vouchers in low-poverty areas--just one in eight of the
families with children served by the program--though the
program is effective for poor African-American and Hispanic
families with vouchers, who are nearly twice as likely as other
poor minority children to grow up in low-poverty neighborhoods.
Yet, we have 343,000 children in families with vouchers living
in extremely poor neighborhoods today, and we need to do better
to help those children and others like them to have a better
chance at a better life.
One of the major barriers to families making such moves to
opportunity is the fragmented system of voucher administration,
as the Speaker's Task Force noted. More than 1,500 housing
authorities administer vouchers in metropolitan areas. In most
of these areas, one agency administers the program in the
central city, and one or more agencies serve the surrounding
suburban communities. In many cases, a lot more agencies
surround the central city.
For families, this fragmentation means that they are less
likely to get useful advice about opportunities that other
communities offer and more likely to have trouble using their
voucher to find housing because they don't get information
about landlords who will rent to them, and moving to another
housing authority's jurisdiction requires them to deal with yet
another bureaucracy whose staff may not be very welcoming to
what they consider outsiders.
For Federal taxpayers, this fragmentation increases costs
of Federal oversight and of local agency administration, as the
U.S. Government Accountability Office has found. Federal
policymakers can help solve this problem.
As Mr. Cleaver mentioned, one opportunity in front of you
is to agree with the Senate and fund the regional housing
mobility demonstration that the Administration proposed. This
is a very important start.
But this modest demonstration is not enough. Encouraging
housing authorities to consolidate or form a consortia enables
them to retain their identity and their individual boards of
directors, which I am sure you appreciate is very politically
important, but they still get to combine their administrative
functions and create economies of scale and efficiencies.
Helping them do this ought to be a goal of Federal policy.
But few agencies are going to take this step unless it
really pays for them to do it, if it really creates
efficiencies. And currently, policy doesn't do that.
The key here is to enable agencies that form a consortia to
have a single funding contract with HUD. It has been more than
2 years since HUD proposed a rule change to allow that to
happen, and HUD has not followed through.
Congress can expedite these changes by directing HUD to
permit consortia to have a single voucher funding contract
without delay.
It is also important to modify administrative fee policy to
remove disincentives to form consortia and encourage greater
use of vouchers in high-opportunity areas. My testimony
includes other recommendations that will facilitate consortia.
But one thing Congress should not do is advance or enact
the small agency reform bill.
Thank you.
[The prepared statement of Ms. Sard can be found on page 55
of the appendix.]
Chairman Luetkemeyer. Thank you, Ms. Sard.
Ms. Thrope, you are recognized for 5 minutes.
STATEMENT OF DEBORAH THROPE, STAFF ATTORNEY, THE NATIONAL
HOUSING LAW PROJECT (NHLP)
Ms. Thrope. Thank you.
Good morning, Chairman Luetkemeyer, Ranking Member Cleaver,
and distinguished members of the subcommittee. Thank you for
the opportunity to testify today on increasing efficiencies for
housing vouchers and creating upward mobility.
I am here on behalf of the National Housing Law Project, a
private, nonprofit organization that provides legal and
technical assistance to local housing advocates, tenant
leaders, and public officials nationwide. NHLP hosts the
National Housing Justice Network, a vast field network of over
1,000 community-level housing advocates and tenant leaders. Our
work with local advocates who deal with the day-to-day problems
and opportunities presented by implementation of housing laws
informs NHLP's policy advocacy, including the views that I am
going to express today.
The Housing Choice Voucher Program has great potential to
provide housing choice and mobility to families nationwide. The
cornerstone of the voucher program is the opportunity to move
to neighborhoods with high-performing schools, medical
services, quality jobs, and other amenities.
And yet, an increasing number of poor families live in
areas of highly concentrated poverty where over 40 percent of
residents are low-income. Even families who are lucky enough to
receive a Section 8 voucher remain segregated in low-rent,
high-poverty neighborhoods.
There are several reasons for this. Some voucher tenants
choose to live in lower-income neighborhoods to be near
friends, family, a local church, medical care, or other support
networks.
That is why vouchers are only part of the multifaceted
national approach to address housing instability and
homelessness. National housing policy must also consider the
preservation of affordable housing and community investment and
revitalization.
In addition, for the families who wish to move to more
economically diverse neighborhoods with a voucher, housing
choice is limited. Voucher tenants across the country report
that they cannot use their voucher in the private rental market
and often end up returning to high-poverty areas with or
without their voucher, because if they can't use their voucher,
they have to give it back. And this is true even for families
who have spent sometimes 10 to 15 years on the voucher wait
list.
In order to maximize the effectiveness of the voucher
program, policymakers must prioritize eliminating the barriers
families face when they try to use their voucher in that
private market.
First, in many places the value of a voucher does not
reflect market rent, making it difficult, if not impossible,
for families to find a place they can afford. The value of a
voucher is primarily based on fair market rents, or FMRs.
When HUD sets the FMR below market, the maximum assistance
level for a voucher tenant is so low that families are
effectively barred from many neighborhoods, and particularly
areas of opportunity. If HUD revised its FMR methodology,
voucher families would experience greater housing choice and
mobility.
Second, voucher families may find there is a shortage of
landlords willing to rent to assisted families. In San Diego,
for example, there are reportedly enough vouchers to end
veteran homelessness, although not enough landlords willing to
take them. It is important to implement policies to incentivize
and increase levels of landlord participation.
Third, mobility counseling is an essential component of the
voucher program because it educates families about the
advantages of moving to higher-opportunity areas and provides
the support and resources to complete a successful housing
search. We therefore fully support the Administration's
proposal for a new housing choice voucher mobility
demonstration.
Last, there are nearly 4,000 PHAs administering public
housing and/or Section 8 vouchers in this country. This
structure creates real challenges for tenants and can greatly
restrict mobility because: one, it is inefficient and confusing
for tenants who have to apply to a number of different wait
lists in one metro area; and two, it creates portability
problems when tenants have to jump through administrative hoops
to move to the jurisdiction of another PHA.
To resolve the issues that arise when tenants face
jurisdictional boundaries, Congress should enact policies that
will encourage PHAs to form consortia, such as the provision in
H.R. 4816 that allows agencies participating in a consortium to
fully merge reporting applications.
While the Small Public Housing Agency Opportunity Act, or
H.R. 4816, includes this important provision regarding
consortia, parts of the bill run the risk of negatively
impacting voucher families. The bill essentially calls for the
deregulation of small PHAs by allowing full funding
flexibility. As we have seen through the Moving to Work
demonstration program, though, financial flexibility can lead
to a significant reduction in the number of families served by
Federal dollars.
H.R. 4816 also includes a rent demonstration that could
cause extreme financial hardship to many tenants. A tiered rent
system, gross rents, and unlimited minimum rents will likely
harm the most vulnerable families.
My written testimony includes a number of additional ways
that this bill could negatively impact tenants.
Congress can and should take steps to eliminate barriers to
improve housing choice and mobility for voucher families. Thank
you.
[The prepared statement of Ms. Thrope can be found on page
70 of the appendix.]
Chairman Luetkemeyer. Thank you.
With that, we recognize Mr. Young for 5 minutes.
STATEMENT OF AILRICK YOUNG, EXECUTIVE DIRECTOR, THE LAUREL
HOUSING AUTHORITY
Mr. Young. Good morning, Chairman Luetkemeyer, Ranking
Member Cleaver, and members of the Housing Subcommittee. Thank
you for the opportunity to appear before you this morning.
My name is Ailrick Young and I am the executive director of
the housing authority of the city of Laurel, Mississippi.
Although this testimony is representative of my own personal
experience, I am also here representing my colleagues at public
housing agencies across the country who have shared in my
experiences.
I want to thank the subcommittee for your work on passing
the Housing Opportunity Through Modernization Act. I also want
to thank Congressman Palazzo for introducing and sponsoring the
Small Public Housing Agency Opportunity Act of 2016, H.R. 4816.
He and his staff have been invaluable assets to small housing
authorities and to the affordable housing community in general.
H.R. 4816 can offer solutions to allow small agencies to,
among other things, increase efficiencies for housing choice
vouchers, create upward economic mobility, and offer better
housing solutions for their communities. The bill strives to
find the appropriate balance between responsible government
oversight and additional flexibilities to make sure agencies
are able to responsibly provide safe and decent housing.
H.R. 4816 is designed to assure the long-term viability and
effectiveness of small agencies and the portfolios they manage.
The bill encourages flexibility and enables smaller agencies
managing fewer than 550 units of federally-assisted housing to
explore innovative approaches to determining tenant rents while
reducing administrative burdens unique to smaller agencies.
It accomplishes this by streamlining reporting and other
regulatory burdens. Many of the burdensome reporting
requirements not only take valuable time away from staff who
could be meeting the needs of those whom we serve, but many of
the reporting requirements are not even required for HUD's
multifamily program.
If adopted, H.R. 4816 would also increase HUD's efficiency
through more manageable and appropriate oversight. Smaller
agencies typically perform well on all of HUD's assessments and
tend to still superbly carry out their mission to provide
affordable housing. Small agencies like Laurel need the
flexibilities provided in H.R. 4816 in order to cope with this
harsh reality and to continue to provide high-quality, safe,
and affordable housing in our communities.
I understand that you are also looking at regionalization
of housing--of the Housing Choice Voucher Program. I believe
that mandatory consolidation of agencies is a bad idea.
Creating voluntary programs where agencies can choose to work
together and where they can receive regulatory flexibilities
that make this cooperation easier and feasible is a worthy
goal.
Although the Laurel Housing Authority is a small agency
without vouchers, our jurisdiction is included in a larger
regional voucher program. Being local, the public housing
residents of the community of Laurel can easily assess our
agency services, while voucher holders and applicants do not
have the same level of access.
This is critical to eligible families who are looking to
receive housing assistance. Many of our residents have
children, they are trying to hold down a job, are elderly, or
do not have access to their own transportation. Easy access to
our agency significantly increases their ability to apply for
housing, interview for a unit, or interact with staff at our
agency.
I thank you for the work to help us serve our residents
better, and I stand ready, with my affordable housing peers,
NAHRO, and PHADA, to assist you as best we can in moving
responsible small agency reforms like H.R. 4816 forward. I am
happy to answer any questions that you may have.
Thank you.
[The prepared statement of Mr. Young can be found on page
83 of the appendix.]
Chairman Luetkemeyer. Thank you, Mr. Young.
And Ms. Lovell, you are recognized for 5 minutes. Welcome.
STATEMENT OF CHERYL LOVELL, EXECUTIVE DIRECTOR, THE ST. LOUIS
HOUSING AUTHORITY
Ms. Lovell. Good morning, Chairman Luetkemeyer, Ranking
Member Cleaver, and other members of the Housing and Insurance
Subcommittee.
First, I want to thank Congressman Clay for his
introduction. I have worked with his office for many years and
we have been able to accomplish a lot in our area, with the
assistance of Congressman Clay's office.
My name is Cheryl Lovell and I am the executive director of
the St. Louis Housing Authority. I am pleased to be here today
to provide you information and insight on the proposed
demonstration program for mobility counseling for families
using housing choice vouchers. The demonstration program would
allow public housing agencies to collaborate on initiatives to
assist low-income families using existing vouchers to move to
areas of opportunity.
The government structure in St. Louis is relatively unique.
The City of St. Louis is a city that is not in a county. The
City is surrounded by St. Louis County, which contains almost
90 municipalities.
St. Louis County has a separate housing authority.
Together, the housing authorities serve almost 13,000 families
in the Housing Choice Voucher Program. Approximately 95 percent
of these families are African-American, and the average income
for families is about $12,500 a year. The families served are
about half elderly and disabled and the other half families
with children, mostly single parents.
For many years, the St. Louis Housing Authority and the
Housing Authority of St. Louis County have allowed voucher
holders to rent units in each other's jurisdiction without
using the portability process. The jurisdictional sharing
process allows families a broader choice of units in the
metropolitan area.
Despite the efforts of both housing authorities, the
housing choice voucher units are largely concentrated in areas
of minority population or poverty. To address the concentration
of voucher utilization, the St. Louis Housing Authority and the
Housing Authority of St. Louis County are collaborating to
design and implement a small mobility counseling program.
The program focuses on moving families to areas with a
concentration of poverty of less than 10 percent. Participation
in the program is voluntary and open to all new or existing
clients of both housing authorities. Our program is funded by a
small, one-time grant which supports the program for 12 to 14
months. Our hope is that during the design phase, additional
funding can be identified to continue and expand the program.
The St. Louis metropolitan area is one of the most
segregated cities in the country and the poverty rate of
African-Americans is nearly 3 times higher than the poverty
rate of the remaining population. While the current program is
early in the development stage and will initially serve a
limited number of families, both agencies view the program as
critical to their missions.
Providing families with extra services they may need to
take advantage of areas of greater opportunity is a small step
towards addressing historic segregation, and will provide
participating families with a path to potentially break the
cycle of poverty. Like St. Louis, many older urban areas remain
segregated. As economic disparity tends to follow patterns of
segregation, housing choice voucher families in many areas live
in neighborhoods with a high concentration of poverty.
Creation of a demonstration program will evaluate the
effectiveness and efficiency of regional mobility programs and
will provide an opportunity for HUD and their partnering
housing authorities to develop innovative solutions to move
families to areas of higher opportunity. A demonstration
program also allows HUD to determine which solutions provide
the best outcome and develop best practices.
The results of a demonstration program could assist other
housing authorities to develop and implement mobility programs.
We hope that the results of the demonstration program will
provide insight on how to increase the number and size of
programs in areas where voucher holders are highly concentrated
and areas of poverty.
It is important to note that the award of demonstration
program need not be equally distributed across the regions of
the country but should focus on the areas with the greatest
need and the strongest proposals for a mobility program.
Funding of a demonstration program is important, as housing
authorities currently lack resources to create such programs.
Administrative fees for Housing Choice Voucher Programs have
not been fully funded for several years. As have most housing
authorities nationwide, both the St. Louis Housing Authority
and the Housing Authority of St. Louis County have undertaken
significant cost-cutting measures, including significant
reductions in staff, to continue to operate their program.
The proposed funding levels of the administrative fee does
not provide sufficient resources to provide staff necessary to
create the mobility counseling program. Funding of a
demonstration program would provide the necessary resources to
initially design and implement programs and potentially
identify additional resources to maintain a program.
Given the potential benefit that moving to a low-poverty
area can have for a family, providing the authorization funding
to a mobility demonstration program is a positive step toward
finding solutions to persistent issues with segregation. It has
been 50 years since the Fair Housing Act was enacted. The low-
income families are often stuck in neighborhoods that offer
little opportunity to change their lives.
While mobility counseling programs should not replace
programs that revitalize existing neighborhoods to generate new
economic opportunities, a mobility demonstration program could
assist in developing solutions that offer families choices.
Thank you for inviting me to testify.
[The prepared statement of Ms. Lovell can be found on page
47 of the appendix.]
Chairman Luetkemeyer. Thank you, Ms. Lovell.
With that, I recognize myself for questions.
Ms. Blom, as we were going through the discussion here it
appeared that most of the witnesses addressed the
Administration's mobility demonstration program, and I didn't
really catch from your testimony whether you approve,
disapprove, support, or don't support it. Can you give me a
definitive answer on whether you do or do not support the
mobility demonstration program?
Ms. Blom. Unequivocally, the Department does support the
mobility demonstration program. The Administration has sought,
as part of its Fiscal Year 2017 budget, to include $15 million
for this mobility demonstration: $12 million of that would go
directly to PHAs that work as part of the mobility
demonstration; and $3 million of that would be used for an
evaluation of the program.
Chairman Luetkemeyer. Perfect. Thank you very much.
Ms. Sard, you began the discussion--at least during your
discussion you made the comment with regards to consolidation
and forming consortiums as a way to address some issues and
problems. Can you discuss the difference between a
consolidation and a consortium, what problems you have, and if
you have already analyzed it, whether you are going to save any
money by doing this? Very quickly.
Ms. Sard. We think that consolidation would be ideal to
reduce the number of agencies and expand agencies' borders so
families could move freely about the region--
Chairman Luetkemeyer. Are you going to save any money doing
that?
Ms. Sard. I'm sorry?
Chairman Luetkemeyer. Will you save any money doing that?
Ms. Sard. We expect that you would. Right--
Chairman Luetkemeyer. Have you done an analysis of how
much?
Ms. Sard. We estimate that there is now about $40 million
in additional administrative fees that is paid to agencies
because they are small, so some of that could be saved and
that--
Chairman Luetkemeyer. Do you have a percentage of that? 10
percent? 20 percent?
Ms. Sard. That is a small percentage of the overall amount,
but it is really important to make that change because it is a
disincentive now to do the right thing, which is to consolidate
or form consortia.
Chairman Luetkemeyer. All right. Very good. I want to be
able to get Mr. Young's and Ms. Lovell's opinions on that.
You kind of addressed it, Mr. Young, in your testimony,
saying you didn't approve of the consolidation, but kind of
alluded to maybe a consortium of working together on certain
issues. Would you like to explain that just a little bit,
please?
Mr. Young. Yes, sir, Mr. Chairman. I think in most cases
when we have local input and involvement in these changes, for
example, it works better. There are instances where as
governmental entities overlap and they consolidate and the
housing authorities consolidate, as well, but it works better
when that is worked at the local level and they worked out
whether or not certain services that they can share. When it is
mandated, I think if it is mandated it will not work as well as
allowing agencies and governmental entities--
Chairman Luetkemeyer. Okay. Do you share with other PHAs
any sort of consortium-type things that would help you right
now that you can point to as a way that you are working
together on certain things?
Mr. Young. Yes, sir, Mr. Chairman. We share as far as
procurement.
Chairman Luetkemeyer. Okay. Very good.
Ms. Lovell, would you like to address that question? You
have some experience, apparently, because you work together,
both the city and the county. Tell us your experiences on that
and whether you would agree or disagree with Ms. Sard here on
consolidation versus consortium.
Ms. Lovell. We work together but the agencies remain
independent. The consolidation and consortium issue really is
mostly directed at very small housing authorities, and our two
housing authorities are actually quite large, so we don't
really have a lot of issues in common because of the two large
housing authorities.
The sharing of jurisdiction does create a lot of
efficiencies between our two agencies because the formal
portability process is very cumbersome and very time-consuming.
Chairman Luetkemeyer. Okay.
With regards to Mr. Palazzo's bill, just a kind of quick
question for a couple of you with regards to the rules and
regulations he is trying to streamline, can you give us an
example, Mr. Young, of some of the rules and regulations that
he is trying to streamline that would be cost savings that
would--either with monies that you are going to have to spend
to comply with or people you are going to have to hire? What
would be your--a quick synopsis? I have about 30 seconds.
Mr. Young. A good example would be the provision in the
bill for us to have a inspection every 3 years. Currently, that
inspection is once a year.
Chairman Luetkemeyer. Let me stop you right there.
Ms. Blom, do you have any problem with something like that?
Ms. Blom. From the Department's perspective, we believe
that any kind of streamlining measures should be applicable to
both large and small agencies, specifically with regard to the
inspection protocol. We do believe that the current requirement
of a 2-year inspection is the most appropriate interval for
doing inspections.
Chairman Luetkemeyer. It is kind of interesting because
this is the Financial Services Committee--and I will make my
remarks brief here--this is the Financial Services Committee
and we just passed recently--and Mr. Barr, I think, is the
gentleman that passed it--with regards to streamlining an
examination process. And those banks that are not problem
shops, that have clean records, that are small, they went to a
longer inspection period--or examination period. So I am kind
of curious here that that doesn't seem to translate from one
industry to another.
I appreciate your comments, but I am over my time.
With that, let me recognize the ranking member of the full
Financial Services Committee, the gentlelady from California,
Ms. Waters, for 5 minutes.
Ms. Waters. Thank you very much, Mr. Chairman. I have a
commitment to be at an event where I am speaking this morning.
But I really did have to stay here because I, as you--
perhaps you know this, that at one time I represented six
public housing authorities in Los Angeles when I was in the
State legislature, and I am originally from St. Louis and have
family who live in Pruitt-Igoe and Vaughan. And, of course,
when I was young in St. Louis, most of my friends lived in Carr
Square Village. That was about the only public housing that was
offered way back then. So I pay a lot of attention to public
housing.
Mr. Young, you have come before us this day to advocate for
less rules and regulations to operate your public housing and
Section 8 Housing Choice Voucher Programs. Specifically, you
are advocating for H.R. 4816, the Small Public Housing Agency
Opportunity Act.
Mr. Young, I recall a very serious letter of findings from
HUD's Office of Fair Housing and Equal Opportunity from March
2014 outlining civil rights violations that occurred as a
result of egregious actions taken by the Laurel Housing
Authority via your rental assistance demonstration application,
which uncovered that 27 African-American households were
evicted from a public housing development without due process
and administrative grievance procedures to which they were
rightfully entitled under existing law and regulations.
I have been following this issue. I sent a letter to the
HUD Secretary expressing my serious concerns about this conduct
and the well-being of the wrongfully evicted tenants.
My staff got very much involved with this. We sought out
some of the low-income housing advocates who tried to do
something about locating all of these African-Americans who had
been evicted. And to date, I understand that HUD has uncovered
even more concerns with your housing authority and that all of
these issues are still outstanding today.
So here you are, Mr. Young, to advocate for less rules and
regulations despite the fact that you cannot even follow the
basic rules protecting the rights and due process of your
public housing residents. Your testimony suggests that the
level of oversight and regulatory requirements applied to small
PHAs is unnecessary and that scaling these back now will allow
you to better serve residents. But it seems to me that
loosening oversight and regulations, many of which serve as key
protections for tenants, will only ensure that serious
violations of tenant rights, such as those that occurred in
your agency, will happen more often and go unreported.
HUD advocated that exceptional measures needed to be taken
to provide emergency relief for the 27 affected households. Has
that been done, Mr. Young? Did these households receive
emergency relief or were they welcomed back into the housing
authority? What have you done since this incident to mitigate
the egregious lapses in your housing authority to ensure this
would never happen again?
Mr. Young?
Mr. Young. Yes, ma'am.
Congresswoman, all of the affected people have been allowed
to move back or their situations have been addressed. To this
date, HUD has not provided us any final information regarding
that incident.
Ms. Waters. Excuse me. Let me just stop you here. Was it
your responsibility or HUD's responsibility to go out and find
these people and get them back? Because they have not been
returned, is that right?
Mr. Young. Yes, ma'am. We did contact all of those
residents, and those who wanted to come back to the housing
authority, all of them were allowed to if they wished--
Ms. Waters. How many of the 27 are back?
Mr. Young. It is less than half a dozen, if I am not
mistaken.
Ms. Waters. It is my understanding that none of them are
back. And so what I am going to do is I am going to get with
HUD and I am coming to Laurel because when I tell you some of
my family was in Pruitt-Igoe and in Vaughan, I am serious about
public housing and the way tenants are treated. And I don't
know that justice has been done in this case and why you did
what you did.
Why did you evict them?
Mr. Young. Ma'am, those who were evicted, were evicted
because they violated the rules.
Ms. Waters. There was no proof. When HUD went down there
and they took a look at what you had done, you had no
documentation and no proof that violations had been made,
particularly some of the accusations about drugs.
They searched houses. They found nothing. What documents
and what proof do you have?
Mr. Young. When HUD came in and did their assessment, they
asked for files that did not contain the documentation
regarding those cases.
Ms. Waters. So since 2014--
Chairman Luetkemeyer. The gentlelady's time has expired.
Ms. Waters. Thank you, Mr. Chairman.
I will be coming to Laurel. Thank you.
Chairman Luetkemeyer. Mr. Young, if you would like to
respond to that, if you have anything else to add to that, we
will give you another 30 seconds to respond if you so wish.
Mr. Young. Yes, I would like to respond, Mr. Chairman.
Chairman Luetkemeyer. Yes, sir. Proceed.
Mr. Young. Regarding that, HUD did come in and do an
investigation regarding our RAD project, in which some of our
residents were evicted due to a violation of our housing
authority's rules that happened to coincide with this ongoing
RAD project. The files that HUD looked into regarding the
allegation did not contain the documentation that would have
shown that due process was allowed to everyone involved. And
when we tried to provide those documents to HUD, they went
ahead and made their decision without the benefit of the
additional documentation. But the documentation does exist.
Thank you, Mr. Chairman.
Chairman Luetkemeyer. Thank you, Mr. Young.
The gentleman from New Mexico, Mr. Pearce, is recognized
for 5 minutes.
Mr. Pearce. Thank you, Mr. Chairman.
And I thank each one of you for being here today.
Ms. Blom, what is the cost of the program? What is the
overall administrative cost of all the housing programs,
basically? I am just looking for the big line figure. So the
budget is, what, $21 billion or $22 billion? About what percent
of that is used up in administrative costs?
Ms. Blom. With regard to the Housing Choice Voucher
Program--
Mr. Pearce. I am looking for the top-line number. Just the
basic administrative cost for all the housing programs as a
percent of the program budget.
Ms. Blom. I will need to consult with experts back at HUD
to be able to give you that exact figure--
Mr. Pearce. Thirty-something percent? Does about 33 percent
sound right? $7 billion or $8 billion?
Ms. Blom. I think for the variety of different programs
there are different administrative costs associated with them.
For the Housing Choice Voucher Program, which is about half
of HUD's budget, housing authorities do receive an
administrative fee for that. For the Public Housing Program,
housing authorities are able to use a portion of their
operating fund and capital fund to cover administrative costs.
So each of the different programs has a different level of
administrative costs and we can break that down for you as well
as sum that up.
Mr. Pearce. You talked about streamlining in your
presentation. Have you succeeded in streamlining? Do you feel
that your efforts there are paying off?
Ms. Blom. I am happy to report that in April the Department
published a rule which became effective, that streamlined
programs for the Housing Choice Voucher Program as well as the
Public Housing Program--
Mr. Pearce. And about how much do you think, with that
report, are you saving and able to redirect? The reason I bring
it up is, you say that you are short of funds, and almost
always when I get to looking, administration takes up a big
amount of the cost.
And so if you are short of funds it seems like you would be
measuring and saying, okay, we just freed up $30 million, $10
million, whatever the numbers happen to be. So do you have a
kind of a top-line figure on how much you have saved by
streamlining and able to redirect into better direction of the
funding?
Ms. Blom. The streamlining measures just went into effect
in April so it is too early to tell to provide a monetary
figure on the amount of savings that have been incurred to
date.
Mr. Pearce. So give me one example of a streamlined figure.
Tell me--streamline action, tell me one thing you have done.
Ms. Blom. Right. One example of streamlining is that
housing authorities now only need to inspect units every 2
years instead of every 1 year. And in addition to that, when
they--if there are other funding programs that assist that
unit--for instance, a low-income housing tax credit program--
the housing authority can rely on the inspection process that
has occurred with the low-income housing program--
Mr. Pearce. And you didn't do any projections on how much
that was going to save when you implemented it? That would be a
normal business practice: Okay, we are going to stop this and
it is going to save us so many dollars. You did not do those
projections?
Ms. Blom. I will check to see if--
Mr. Pearce. Okay.
Ms. Blom. --the Department has done that.
Mr. Pearce. So when I look at your overall--your statement
says that targeted long-term housing assistance can be
important for ending homelessness. So as we consider the 2.2
million people in one set of the programs and 2.3 million in
another set that you referred to, if we were going to be able
to do a search of the names that compose that 2.2 million, 2.3
million people, 4.5 million total, how static are those names?
In other words, are they actually moving into prosperity?
Are they moving out of housing? Is it a very static group of
people that you are dealing with?
Ms. Blom. About half of the population is elderly or
disabled, and that--
Mr. Pearce. So they are going to be very static.
Ms. Blom. Exactly.
Mr. Pearce. What about the other 50 percent?
Ms. Blom. For the other 50 percent, it varies among housing
authorities. Some families with children tend to stay for some
time but there is also turnover in that population.
Mr. Pearce. But you don't have an average? Like if I go to
V.A. and ask them, what is the wait time, they can give me a
wait time nationwide: ``Roughly 51 days. In your area, it might
be a little higher.'' So do you have that nationwide figure of
the mobility of these programs?
Ms. Blom. I seem to recall that it was a 7-year period, but
again, I will confirm that and we will provide that information
to you.
Mr. Pearce. Just an observation from up here: If your
greatest objective is to move people into better living
conditions it seems like that might be the one number that you
would like to advertise.
Ms. Lovell, you had mentioned also in your report that the
choice program moving people to areas of higher opportunity, of
course, we have a hope that is going to actually improve their
status in life. Do you have any results for those 6,500
families that you work with through the choice program? Are
they actually improving?
You have figures in here on what their average income is,
but do they improve when they move to an area of better
opportunity?
Ms. Lovell. Our demonstration program actually has not
started yet. It was just recently funded so we don't have any
information on--
Mr. Pearce. It says in your report you have 6,500 people
receiving assistance through the Housing Choice Voucher
Program, and in the front of it you say you are going to
measure the effectiveness of regional mobility programs. So you
have 6,500 people but they haven't started receiving
assistance?
Ms. Lovell. No. What I am saying is the mobility counseling
program was just recently funded so we don't know the effect of
moving to a higher-income--
Mr. Pearce. All right.
Mr. Chairman, I yield back. Thank you.
Chairman Luetkemeyer. The gentleman's time has expired.
With that, we will recognize the gentleman from Missouri,
the ranking member of the subcommittee, Mr. Cleaver.
Mr. Cleaver. Thank you, Mr. Chairman.
My children believe that I just take every opportunity I
can to quote Robert Frost, and that is probably accurate. I try
to camouflage it but it doesn't work. Robert Frost said, ``Two
roads diverged in a woods, I took the one less traveled by, and
that has made all the difference.''
When I think about my years and growing up in public
housing there were two men--boys--who grew--spent at least 7
years in public housing, and we were--our parents were able to
move. We are the only two who graduated from college, and most
of them didn't graduate from high school.
The point I want to make is I think it is critically
important that we pay attention to Professor Chetty's comments,
and I also think that it is important to run this mobility
demonstration program as well as the consortia.
But I want to concentrate--Ms. Blom, we have been concerned
about housing on this committee, but we have also become
concerned about the homeless, particularly after the economic
collapse in 2008. Are there ways that programs like the voucher
program are effective in reducing homelessness?
Ms. Blom. Thank you very much for the question.
The voucher program has proven to be very successful in
reducing homelessness. There was a recent study that has been
published that the voucher program is extremely effective, and
reducing homelessness is one of the most effective ways of
having people have stable housing once they have become
homeless.
The Department also has several programs within the public
housing voucher program that target the homeless. One is the
VASH Program, so that is veterans who are receiving vouchers
and providing supports from the Veterans Administration; and
then secondly, the Family Unification Program that is now
targeting foster youth, and once they become adults, providing
them with a voucher to prevent homelessness. And we currently
have a demonstration that we are currently initiating to
provide those individuals with support through the Family Self-
Sufficiency Program.
So we do currently use the voucher program as a very
successful tool for preventing and ending homelessness.
Mr. Cleaver. But it is just a demonstration.
Ms. Blom. In two areas--with regard to the Family
Unification Program, we are starting that demonstration. Just a
couple of months ago, we started to identify housing
authorities that are interested in this, and we have already
seen improvements to that thanks to HOTMA, which allowed for an
extension of the vouchers from 18 months to 36 months.
I would say the VASH Program is beyond a demonstration and
has proven to be effective. And the study that was recently
released also, too, I think has proven that vouchers in and of
themselves are an extremely effective way of ending
homelessness.
Mr. Cleaver. Thank you.
Mr. Young and Ms. Thrope, the two of you may be the most
likely responders to this inquiry, but I represent three rural
areas outside of Kansas City, the urban area--Saline and
Lafayette Counties--and we do have public housing there, maybe
per capita more than we have in Kansas City or St. Louis. But
if we are able to increase mobility and coordination, do you
think that will help these communities thrive or the public
housing programs there?
And I wondered about the--when HUD will finalize the rule.
Maybe I have to get that from you, Ms. Blom, but in the rural
areas how valuable would a consortia? If we were able to pool
housing authorities from across counties and so forth, would
that be of some help?
Mr. Young. As far as in Mississippi, and it is a rural
area, some of the housing authorities are 30, 40 miles away. So
if you consolidate housing authorities from that great a
distance I think you lose some resources, local resources and
what have you, of people being on the ground.
It is a little bit different, I think, in urban areas. It
may work better. I just don't think that you would have the
same level of customer service, support; you have people
driving greater distances if you consolidate in the rural
areas.
Chairman Luetkemeyer. The gentleman's time has expired.
The gentleman from Florida, Mr. Posey, is recognized for 5
minutes.
Mr. Posey. Thank you very much, Mr. Chairman.
Deputy Secretary Blom, I am going to read you a list of
just some of the recent developing HUD requirements for all
public housing agencies: smoke-free protocol; community service
certification; stricter Section 8 employment rules; Violence
Against Women Act updates; conflicted instructions of the use
of applicant's criminal records; restrictions on the use of
demolition and disposition tools; the costly Green Physical
Needs Assessment; rollout of small area fair market rents; and
ambitious assessment of fair housing tools.
These are just some; that is not all of them.
These may be well-intentioned ideas, but do they really
come with any funding? Each of these requirements will entail
communications with residents, training for staff, and updates
to local policies and procedures. And, of course, that takes
time and money.
If HUD doesn't provide the money and small agencies don't
have the extra time to do this work, what do you suggest? Which
of these is the highest priority? Which can be ignored? When is
enough regulation enough?
Ms. Blom. Thank you very much for that list of variety of
different HUD programs. I think some of them are voluntary in
nature, some of them are not in effect yet, and some of them
are required.
Housing authorities do receive funding from the Department,
thanks to Congress, to support their administrative activities.
I think the Department certainly realizes that there are a
number of requirements that housing authorities currently face,
and the Department has looked at that seriously and reduced the
burden for the housing authorities.
In April, the Department published a rule that would reduce
burden for housing authorities. In addition to that, the
Department is very eager to implement the time-reducing burdens
associated with the FAST Act as well as with HOTMA, and we are
focusing our attention on that so that we can, again, reduce
burden and reduce cost for housing authorities.
Mr. Posey. Tell me some of the burdens you have reduced.
Ms. Blom. Some of the burdens that have reduced as a result
of our current regulation is that the inspections only need to
be done every 2 years instead of every 1, and that housing
authorities can use protocols of other programs instead of
having to inspect them themselves. Also, with regard to
families who are on fixed incomes, the recertification of those
incomes can now be done only every 3 years instead of on a more
frequent basis.
Mr. Posey. Do you expect to change any of the ones that I
mentioned?
Ms. Blom. Specifically with regard to the Physical Needs
Assessment, the Department has not implemented that provision.
And if it were to implement that provision, we would not make
that a requirement for small PHAs.
With regard to demolitions and dispositions, we are looking
to provide more flexibilities to housing authorities on that
through a notice process. And in addition to that, with regard
to implementing the Moving to Work Program, providing 100
additional agencies with flexibilities, the Department is on a
very accelerated timeframe to be able to offer those Moving to
Work flexibilities to agencies as quickly as possible.
Mr. Posey. The Public Housing Capital Fund is down another
$18 billion, and the operating fund is down $6 billion below
the need. Should there be a point where the Department stops
adding new demands on agencies that receive just partial
funding?
Ms. Blom. I think the Department is looking to reduce
requirements where it can, and at the same time we have a
responsibility to ensure that the laws that are on the books
are enforced and that the Department puts an emphasis on that,
as well.
Mr. Posey. Do you think there is a point where there is
just too much?
Ms. Blom. Again, I think that through HOTMA, which we were
very pleased to have enacted, we will provide a number of
reductions of burden for housing authorities. And again, the
Department is working as quickly as possible to be able to
implement those. Some we have already implemented directly,
such as the flexibility for the vouchers so that benefits can
go to families.
Mr. Posey. So we agree that there is way too much
regulation? Do we agree on that already?
Ms. Blom. Again, the Department implements requirements
that are--
Mr. Posey. If you agree we need to get rid of a bunch of
them, then obviously we had too many. Do we agree on that?
Ms. Blom. Again, I think the Department is doing its best--
Mr. Posey. Can't you just say yes or no? Do you agree with
it or not?
Ms. Blom. I think the Department is doing the best--
Mr. Posey. No, just say yes or no. Do you agree we had too
many regulations?
I hate this game. The bureaucrats come in here, and I ask
you what time it is, and you describe a clock to me for 5
minutes, but you won't tell me what doggone time it is.
Do you agree that we had too much regulation and that is
why we are removing regulations now? Yes or no, please. Just
say yes or no.
Ms. Blom. I think the Department is--
Mr. Posey. Arrogant, petulent, and defiant.
Mr. Chairman, my time is up. I am sorry I couldn't get a
yes-or-no answer.
Chairman Luetkemeyer. The gentleman's time has expired.
With that, we go to the gentlelady from New York, Ms.
Velazquez. She is recognized for 5 minutes.
Ms. Velazquez. Thank you, Mr. Chairman.
Ms. Thrope, I would like to discuss with you how HUD's
proposed small area rule will work in New York City and other
cities like New York with low vacancy. In fact, in New York it
is expected that it will impact more than 55,000 voucher
holders, and they might have to move or pay substantially more
money in rent.
Can you explain the problem of implementing HUD's small
area proposal and the steps that you think HUD should take to
limit its harm on individuals and families?
Ms. Thrope. Great. Thank you, Representative Velazquez.
First, I will explain a little bit about subsidy and
assistance levels work in the voucher program. I talked a
little bit about this earlier, but fair market rents are set by
HUD and they are supposed to reflect average gross rent
estimates in a given geographical area.
HUD sets one FMR for what it calls metropolitan statistical
areas, and these can actually be relatively large regions that
encompass a fair number of cities and towns. So HUD's proposed
small area FMR rule is specifically meant to address the
problems that we have when we set FMRs based on large
geographical regions, and it actually changed the way FMRs are
calculated and uses zip code-level data, so much more granular-
level data, when setting FMRs, which are what assistance levels
are based on.
So under HUD's proposed small area FMR, rule 31 housing
authorities would be required to use small area FMRs, so the
zip code-level rent data, in setting assistance levels, and
other housing authorities would be able to opt in. And New York
is one of the jurisdictions that would be impacted by small
area FMRs.
On the one hand, small area FMRs could actually help a lot
of new voucher tenants entering the program because it
increases the value of that voucher so it allows people to move
to areas of higher opportunity and higher rent places. But
unfortunately, for existing tenants it looks like small area
FMRs, because a lot of existing tenants are in lower-income
neighborhoods, could actually negative impact those tenants and
cause rent increases and significant rent burdens.
So we performed a rigorous data analysis of HUD's proposed
small area FMRs and found that 78 percent of existing voucher
holders could be negatively impacted by the small area FMR
rule, and that amounts to over 400,000 voucher families in this
country.
Ms. Velazquez. What do you propose?
Ms. Thrope. We propose first, an exception for low vacancy
rate areas like New York, where if you increase the amount of
rent a family has to pay they will absolutely, in most cases,
be forced to move and so it could cause displacement. So a
vacancy rate exception along with a provision that would hold
all current tenants harmless from a small area FMR rule.
Ms. Velazquez. Thank you.
And, Ms. Sard, I have seen that the center has similar
comments. If there is anything that you would like to add to
what Ms. Thrope explained?
Ms. Sard. Thank you, Congresswoman.
We agree that the small area FMR change that HUD has
proposed is a key policy change to help fulfill the goal that
we have been talking about this morning of helping families
with vouchers live in higher-opportunity areas.
That said, we agree with what Ms. Thrope said about the
importance of starting out the implementation with areas that
aren't under such low vacancy/tight market pressure as New
York. We also think it is important to target those areas where
voucher use is concentrated in the poorest and most racially
segregated neighborhoods.
Ms. Velazquez. And I support that. Thank you so much.
Ms. Blom, in August, Senator Schumer and I wrote a letter
to Secretary Castro that was signed by the rest of the New York
delegation. Neither Senator Schumer nor I have heard a
response.
So would you convey to Secretary Castro how important this
issue is not only for New York but other cities across the
country that will be negatively impact and that we expect a
response back?
Ms. Blom. Yes. Certainly.
Ms. Velazquez. When does HUD expect to release the final
rule?
Ms. Blom. The final rule is still in process. We have taken
into consideration strongly your recommendations, those of
Senator Schumer, those of Ms. Thrope and Ms. Sard, as well as
other comments that we received.
Thanks to those comments, we are keenly aware of the issue
of residents potentially being displaced, and while I can't
speak to what the final rule says, I can assure everyone here
that all of those comments have been taken into consideration
and that we are mindful of that issue.
Chairman Luetkemeyer. The gentlelady's time has expired.
The gentleman from Pennsylvania, Mr. Rothfus, is recognized
for 5 minutes.
Mr. Rothfus. Thank you, Mr. Chairman.
Ms. Lovell, I want to talk a little bit about this notion
of success and housing programs. This committee has taken a
look over the past couple of years at the last 50 years of HUD
and considered what works and what doesn't. I have been
surprised that there seems to be a divergent view of defining
success.
In your testimony you note that your housing authority has
a public housing occupancy rate and voucher utilization rate of
99 percent. Do you consider full occupancy to be the mark of a
successful public housing program?
Ms. Lovell. There are a number of marks that would indicate
success. In the end, a public housing authority's business is a
real estate business. It is a business that rents units, albeit
to a very specific set of clients.
But you would measure success the same way you would
measure success with any real estate: Are the units rented? Is
the maintenance being performed accordingly? Is the rent being
collected? Is the physical condition of the property in good
shape? Are your finances in good shape?
Those are all measures of success of these programs.
Mr. Rothfus. Apart from elderly and disabled individuals,
what about able-bodied adults and looking at a metric and
transitioning to independence? Should that be a consideration
in determining whether a public housing authority is trying to
help with this notion of upward mobility?
Ms. Lovell. Certainly, upward mobility is the goal for all
of our residents--
Mr. Rothfus. It is a goal, but is it measured in any way?
Ms. Lovell. Currently, it is not measured in any particular
way. It is measured with an individual grant. If you get a
grant for a specific program, for specific funding to do a jobs
training program or a family self-sufficiency program, the
goals of the program are and the success of your achievements
with that grant funding are measured.
But for the most part there is very little funding for
housing authorities to implement job training-type programs
unless it is through a special grant, so they rely on their
partners in the community to serve their clients.
Mr. Rothfus. Mr. Young, I want to touch on a couple of
issues here: the political challenges associated with
consolidated public housing authorities and the potential
operational difficulties that could result, especially when
mergers might be involuntary. Do you believe that consortia
between existing public housing authorities could be a first
step towards a more efficient voucher system, as opposed to
consolidation?
Mr. Young. Congressman, I do believe that it would be
beneficial, but I think that it has to start with the
individual housing authorities, as I have stated earlier,
working together to see what areas administratively that could
benefit the number of housing authorities involved.
Mr. Rothfus. Are there steps that we can be taking to
address barriers or disincentives that would prevent PHAs from
forming consortia?
Mr. Young. Some of the regulations that is mentioned, but
some of it prevents this consortia, as you have mentioned, of
being able to move forward. Some loosening of the regulation
would allow for more consolidation.
Mr. Rothfus. If I can touch on with Ms. Blom, again, the
dichotomy between the larger housing authorities and the
smaller ones, though there are many small and very small public
housing authorities across the country, they are only
responsible for administering a small percentage of units--
roughly 6 percent. Many of these public housing authorities are
regulated similarly to the large entities that manage thousands
of units. Is that reasonable?
Ms. Blom. I think from our perspective, we are looking at
this from the families who are being served, and we believe
that all of the families who are being served should have the
ability to live in a place that is safe and decent for them. We
believe that the Department should have the ability to be able
to inspect units as needed to be able to ensure that families
are living in safe environments.
Mr. Rothfus. And there is a cost that goes with all of that
when we are talking about scarce resources that we have. How
much of HUD's resources and manpower are spent on regulating
small public housing authorities? Do you know?
Ms. Blom. I don't know that exact figure, but we have staff
who are monitoring housing authorities based on a risk profile.
Some of those are small agencies; some of them are larger
agencies.
Mr. Rothfus. I would be curious as to whether it is
proportionate to their overall scale. We might want to follow
up with you on that.
So thank you. I yield back.
Ms. Blom. Absolutely. We will do that.
Chairman Luetkemeyer. The gentleman's time has expired.
With that, we go to the gentleman from Massachusetts, Mr.
Capuano, for 5 minutes.
Mr. Capuano. Thank you, Mr. Chairman.
And I thank the panel for being here.
As far as I am concerned, the question of whether there are
too many regulations or too few regulations is the wrong
question. It is whether we have the right regulations versus
the wrong regulations. And as far as I know, in everything I
have ever done most of my time in public life has been trying
to fine tune those regulations trying to figure out what works,
and what doesn't work.
Things change and you want to change a regulation; you try
something, it doesn't work, you try something else. That is why
I am here.
I don't think you will find anybody on either side of the
aisle, anybody here, anybody I know who thinks that public
housing should be a permanent situation for anyone if we can
help it.
And, by the way, my measure of success for all public
housing authorities--not just for them, for us--is to put you
out of business. I wish I lived in a society where there is no
need for HUD, no need for any housing authorities, no need for
any think tanks who try to help us work this through. I wish
everybody had a job that could pay them enough money to live in
safe, decent, affordable housing everywhere in this country.
I am not sure with--I am not so sure that is your job. It
probably is more my job than it is your job, and we are trying
to do it.
So the truth is I love you all but I am trying to put you
all out of business. And I actually think if you are doing your
job you are trying to put yourselves out of business as well.
All that being said, we are here for upward mobility. Can
anybody guarantee you know how to do this? Do you have the
magic elixir? Anybody?
I am not sure. If I knew, I would do it. So would you. We
are here to try to struggle how to figure that out.
I guess for me--we are always trying new things--HUD is
trying some new things. I love the idea of the small area FMRs,
but I also understand the difficulties in transitioning to
them.
And I love it because I come from Boston. Cambridge costs a
lot more money than some of the other towns in my area, and you
can't move. Well, you can, but it is really difficult to move
from one place to another, to get a job, to get transportation,
to get more affordable housing, to be able to build yourself up
so you can get off Section 8.
And that is why I like the concept. They are trying to
figure out some mobility issues. That's not easy to do. I
respect HUD's problem.
However, while we are struggling to do that, we need
regulations that prohibit inappropriate activity both by
tenants and by housing authorities. We need them, period.
When we are doing it this is an experiment unless, as I
said--I didn't hear anybody jump up and say, ``I have the
answers.'' It is an experiment. We are going to try something
new, try to open up maybe some--deregulate a few places to
allow a little bit more mobility.
Good idea. I don't know if it is going to work, but I think
it is worth trying.
Yet in my area, I don't think anybody would disagree that
the people of Massachusetts are pretty open-minded, pretty
supportive of the concept of public housing. We have some of
the best housing authorities in the country. HUD has reached
into Boston to grab an Assistant Secretary repeatedly.
We had people trying the Move to Work Program. We have some
questions about it, but we are trying it.
Last year Congress allowed HUD--didn't require, allowed
you--to take the MTW programs and merge them if you want, come
up with some regionalization. And to be perfectly honest, one
of the good and bad things in New England, we have a long
tradition, hundreds of years, of local government--small local
governments. We don't have big places.
Boston is one of the geographically smallest cities in
America. If we were the size of Houston we would be 4 million
people. But we chose that. Not a problem. Good, bad, or
indifferent. It has good parts, and it has bad parts. But it
makes these kinds of things problematic.
Yet, after Congress allowed it my Boston Housing Authority
and my Cambridge Housing Authority, two of the best in the
country, asked HUD to be able to regionalize for the purposes
of trying some of these things out. Two good agencies, area
where everybody knows that our income differences and
inequalities in Boston are huge--we are struggling with that.
Mobility might help it.
And yet HUD basically did not just say no, it just said,
``We are not accepting applications.'' They had the support of
the smartest people in the country that you say you listen to
on a regular basis. Yet, Ms. Blom, you said, ``No, we are not
taking applications now. We know better than you what to do.''
What the heck are you thinking? Let them try it with some
and experiment so you can learn from their experience. Why
wouldn't you let that happen?
Ms. Blom. Thank you very much for the question.
The letter that did come to us from the Cambridge Housing
Authority and the Boston Housing Authority I personally thought
was intriguing. They had a very interesting proposal. I have
spoken to staff at the Boston Housing Authority asking for a
little bit more information on exactly what types of MTW
flexibilities would they be seeking in order to create a
regional program among those two agencies.
You are absolutely correct that the letter that was sent
back to the executive directors of those agencies did say that
the Department is not quite ready at this moment to be able to
accept applications for that. We are currently diligently
working on setting up the framework for expanding the MTW
Program to add an additional 100 agencies, and as part of that
expansion we will be testing the regionalization, as well.
Chairman Luetkemeyer. The gentleman's time has expired.
The gentleman from Texas, Mr. Williams, is recognized for 5
minutes.
Mr. Williams. Thank you, Mr. Chairman.
First of all, Mr. Young, you are a veteran, aren't you?
Mr. Young. Yes, Congressman.
Mr. Williams. I don't think anybody has said thank you
today. We appreciate your service.
Mr. Young. Thank you.
Mr. Williams. Yes, sir.
My first question to you, Mr. Young, is this: In your
testimony you say HUD's implementation of portability is more
complicated and burdensome than it needs to be. What changes
would you suggest to HUD that would increase portability
outcomes?
Mr. Young. As I said earlier, we don't have a voucher
program. What I hear from my peers is that the system is
complicated and if we are allowed to figure out ways to work
together, that we can do that.
I probably have to get with my peers and provide some
better answer for you on that, Congressman.
Mr. Williams. If you would do that, it is--the problem is
that big government sometimes gets in the way.
How should HUD streamline its portability administration?
Do you have an idea about that?
Mr. Young. I need to provide you some information, get back
with you on that.
Mr. Williams. If you would do that, it would be great.
Okay.
Another question is, what changes need to be made that
would incentivize PHAs to voluntarily collaborate on voucher
administration?
Mr. Young. Again--
Mr. Williams. Okay.
Mr. Young. --personally we--
Mr. Williams. Would you get that to me?
Mr. Young. Yes, Congressman.
Mr. Williams. That would be great.
Ms. Blom, a question to you. It has been suggested this
morning that consolidation and regionalization of voucher
administrations or a public housing agency would potentially
harm local rural communities where the local leadership could
become disengaged or residents are at a disadvantage to have
reasonable access to housing officials.
I am from Texas, and I represent a large rural population
in the State of Texas, and this is something I would obviously
be concerned about. So could regionalization or consolidation
of voucher administrations place rural areas at a disadvantage,
in your opinion?
Ms. Blom. From the Department's perspective, the
regionalization or the consolidation or consortiums are
activities that housing authorities should be able to decide on
their own if they want to go forward with that type of
cooperation among those agencies. The Department is not
requiring agencies to do such. Instead, we believe that
agencies should make those decisions on their own. Some have
and some haven't, at this point.
Mr. Williams. So they might know better than you all?
Ms. Blom. Right. And again, the Department wants to be able
to facilitate that kind of regionalization and cooperation
where agencies want to do it, but the Department is not
mandating it.
Mr. Williams. Okay. Another question would be how could
some of these perceived disadvantages that I am talking about
be addressed?
Ms. Blom. Can you speak a little bit more about the types
of disadvantages?
Mr. Williams. The perception is that rural populations
could have a problem, and if that is a disadvantage, how could
we address that and make sure it doesn't happen?
Ms. Blom. Again, I think from the Department's perspective,
we do not want to regulate those smaller agencies and force
them to do consolidation. If there are barriers there for
consolidation where agencies want to do that, we are ready to
provide them with advice. But the Department at this point is
not seeking to ask smaller housing authorities to consolidate.
Mr. Williams. New ideas, flexibility you would listen to?
Ms. Blom. Excuse me?
Mr. Williams. New ideas, flexibility from your rural areas
you would listen to?
Ms. Blom. I am having a hard time hearing your question.
Mr. Williams. You are talking about flexibility and the
rural areas have to have flexibility to have their own
programs, and so forth. You support that.
Ms. Blom. Yes, we do.
Mr. Williams. Okay. All right.
Thank you, Mr. Chairman. I yield back.
Chairman Luetkemeyer. The gentleman yields back.
With that, the gentleman from Minnesota, Mr. Ellison, is
recognized for 5 minutes.
Mr. Ellison. Let me thank the chairman and the ranking
member.
I am glad we are holding this hearing on the affordable
housing crisis. To me, it is perhaps one of the most important
things that Congress could be doing at this moment.
On this screen are some quotes from Matthew Desmond. He is
the author of a great book I recommend to everyone here. The
book is called, ``Evicted: Poverty and Profit in the American
City.''
And I will just say that according to Desmond, the majority
of low-income renting families spend half of their income on
housing; one in four families spend 70 percent of their income
on housing--rent and utilities. And for those families,
eviction is more likely the result of an inevitability than
personal responsibility.
It is a huge moral issue and deserves a solution. You can't
fix it unless you fix housing.
So I just wanted to sort of frame my comments in light of
this.
Let me just start with my--there is some other stuff up
there. It just sort of lays out rental assistance program and
how much our programs that exist now don't even reach the
people who need them. And I definitely appreciate every one of
my colleagues, Republican and Democrat, who believe that we
need to have more efficiency, more flexibility, more
creativity. I am all in with that. Fine, let's try it.
But I cannot escape the fact that we simply don't have
enough low-income housing. We don't have the units.
Now, would one of you all like to challenge me on that? Do
we have enough units or we simply not have them?
Because in Minneapolis, where I am from, between public
housing and Section 8, we may have a waiting list of about
15,000 people. And so could somebody--why am I wrong?
You got it.
Ms. Sard. You are absolutely right. Thank--
Mr. Ellison. See?
Ms. Sard. --you for putting up our chart.
And it is correct that only one out of four families
eligible for Federal rental assistance programs receives help
from any of them. It is a problem that has been getting
dramatically worse over the last 15 years, at the same time
that the number of households assisted has been static.
Mr. Ellison. Right. Now, Ms. Sard, let me ask you just a
general question: If you were 9 years old and homeless, how
easy would it be to complete your homework assignment?
Ms. Sard. Obviously, it would be much more difficult.
Mr. Ellison. If you were on drugs and trying to get clean,
what if you were living under a bridge and didn't have anywhere
to live? Would it be easy to get clean on the street?
Ms. Sard. No.
Mr. Ellison. How about even holding a job? Homeless people
have jobs. A lot of people don't know homeless people work
every day. But how tough is it to keep that job or get it when
you don't have an address?
Ms. Sard. It is hard for homeless people who don't have an
address. It is also hard for the millions of families who don't
have a stable address, who are moving from house to house of
people who will help them out temporarily.
Mr. Ellison. Now, I only have 2 minutes left, and I have 1
minute where I have to ask a question. I am going to use my
next minute to ask you all this question: Do you think there is
a lot of discrimination against people on Section 8?
Ms. Sard. Unfortunately, we know less than we should know
about that question. I believe the Department is doing a study
now about that discrimination.
We also know that in jurisdictions that have passed State
or local laws to prohibit that discrimination, those laws help,
but they are not well enough enforced. And that is actually one
of the things that I would hope the regional mobility
demonstration would focus on.
Mr. Ellison. I wish we could just really kind of get
together with landlords to tell them that a Section 8 tenant is
not going to be a bad tenant necessarily. Some are, but other
tenants who pay full rent are bad tenants, too.
And I think that because of the way the program is
administered people kind of think--they look down on Section 8
and public housing, but the truth is when they say there is
about $28 billion in unmet maintenance needs for public
housing. And when Congress went great guns, when we did the
most we did about $4 billion with the stimulus package.
We are not doing what we are supposed to do in here.
By the way, do you know how much the mortgage interest
deduction program costs? $70 billion. Do you know how much
HUD's total budget is? A lot less.
We spend up to about over $100 billion on middle- and
upper-income people giving them government money for housing.
Government money. Okay, maybe welfare for upper-income people
like me, but we don't do nearly as much for people who
desperately need housing and don't have the same level of
option.
Are you all as mad about this as I am? Do you guys see this
as an issue? No? Yes?
Ms. Sard. Yes.
Mr. Ellison. Okay, thank you.
So let me just wrap up by saying this. Now, I am trying to
help people, with a lot of my colleagues, and I would like to
ask, Ms. Blom, if you could answer this question. Ms. Blom, I
am interested in the power of--oh, man.
Chairman Luetkemeyer. Do you want to wrap it up?
Mr. Ellison. Yes. I am interested in the power of rent
reporting pilot for the HUD assisted attendance. Do you
understand what I am asking you?
Chairman Luetkemeyer. Okay.
Ms. Blom. I think it is an intriguing idea. We would like
to talk with you further about that concept and see if it is an
idea that we can promote in the future.
Mr. Ellison. Okay. We will do that.
Ms. Blom. Thank you.
Chairman Luetkemeyer. The gentleman's time has expired.
The gentleman from Kentucky, Mr. Barr, is recognized for 5
minutes.
Mr. Barr. Thank you, Mr. Chairman. Thank you for your
leadership and for the ranking member, my friend, Mr. Cleaver
from Missouri, thank you for your joint leadership in holding
this important hearing.
And I want to compliment and thank all of the witnesses
here on our panel for your dedication to helping our fellow
Americans who are struggling and who, as Ms. Sard just pointed
out, need help.
To Ms. Sard's testimony that only one in four families in
need or who are eligible for Section 8 housing is actually
getting those vouchers, I wanted to direct my initial question
to Ms. Blom and the Department of Housing and Urban
Development.
My understanding is that the total budget, annual budget
for Section 8 vouchers, is about $21 billion-plus annually. Is
that about right?
Ms. Blom. That is right.
Mr. Barr. So we spend $21 billion on Section 8 vouchers but
only one out of four eligible families get them. Is that
correct?
Ms. Blom. I need to double-check that figure, but there
certainly is more of a need than funding that is available.
Mr. Barr. Okay.
Now, I think Ms. Sard's testimony was about one out of
four. So one out of four eligible families gets an allocation
of what we spend annually on Section 8 vouchers, which is a
little over $21 billion annually.
Ms. Sard. Or any other Federal rental assistance.
Mr. Barr. Thank you.
So, Ms. Blom, my question is this: I have read and I
understand that a full one-third of HUD's annual budget of $21
billion for Section 8 vouchers is spent on administrative
expenses, not on actually housing low-income Americans. Is that
an accurate figure?
Ms. Blom. My belief is that there is much more funding
going directly to housing payments than the administrative fee
that housing authorities receive and that the budget does set
aside a certain amount of money directly for housing assistance
payments versus funding that goes to--
Mr. Barr. Is that number an accurate number?
Anyone, is that an accurate number?
Ms. Sard. The Congress provides for administrative fees to
administer the voucher program about 8 percent of the total
funding--8 percent.
Mr. Barr. Okay. So of $21 billion, how much is not actually
spent on rental payments to landlords?
Ms. Sard. I believe this year it is on the order of $1.6
billion.
Mr. Barr. Okay. So--
Ms. Blom. That is correct.
Mr. Barr. So all of this administrative expense, okay, and
not sheltering people who actually are eligible--my question is
this: Do we agree that these administrative expenses are too
high? Are they too high?
Ms. Blom. The Department administered an administrative fee
study which actually showed that the administrative fees that
housing authorities receive is less than what it costs to run
an effective Housing Choice Voucher Program. As a result of
that, the Department has requested as part of the 2017 budget
an increased amount of funds for administrative fees so that
housing authorities receive the funding that they need to be
able to properly administer the housing choice voucher--
Mr. Barr. Well, someone disagrees with the statistics that
you are offering. There is some analysis out there that says a
full one-third of all Federal dollars spent on the Section 8
program is spent on administration and overhead.
Would you at least stipulate and agree that would be too
much, it would be too high, it would be excessive?
Ms. Blom. One-third is certainly too much.
Mr. Barr. Okay.
Let's talk about how we can get a little bit of
administrative efficiency here. The consolidation idea, I would
applaud anyone who is considering the ideas.
Mr. Young, I am very sympathetic to the small public
housing authorities and the agencies that have to deal with a
lot of the administrative compliance costs, but I do believe
economies of scale is a policy objective. I applaud a
demonstration project.
Can anyone speak to the idea of encouraging greater
competition for these scarce Section 8 voucher allocations so
that we reward public housing agencies, and maybe even non-
public authorities, maybe some private institutions, some
dioceses, some not-for-profit organizations who actually
deliver results in delivering efficiency and more units for
less cost?
Is that a concept that any of you are open to?
Ms. Sard. If I may, sir, we at CBPP have supported the idea
of a demonstration of competition. It actually was once 20
years ago recommended by Senate Republican appropriators for
HUD to look into it and HUD rejected it at the time.
But vouchers are different from public housing. Public
housing is, by design, publicly owned on publicly-owned land.
The administration of rental assistance can be much more
flexible, and we ought to be looking for the best performance
for the money.
Mr. Barr. Well, amen to that. And I would encourage
everybody on this committee to consider a competition so that
we deliver more units and less cost.
Thank you. I yield back.
Chairman Luetkemeyer. The gentleman's time has expired.
With that, the gentleman from Missouri, Mr. Clay, is
recognized for 5 minutes.
Mr. Clay. Thank you, Mr. Chairman.
And I thank Ranking Member Cleaver, both of you, for
holding this informative hearing.
Let me start with Ms. Lovell. In your testimony, you state
that St. Louis is one of the most segregated cities in the
country and that economic disparity tends to follow the
patterns of segregation. You also note that an important first
step to a successful mobility counseling program is to dispel
stigma and myths about the HCV Program among landlords and
communities.
Can you talk a little bit more about how structural
discrimination can limit the mobility of voucher holders and
other households, and can neighborhoods block landlords from
getting established in these neighborhoods?
Ms. Lovell. Thank you for the question. When Congressman
Ellison was talking I--yes, there is a huge stigma against
Section 8 voucher holders for--a lot of landlords won't accept
them because they believe that somehow voucher holders are less
reliable tenants. In fact, there are bad tenants everywhere.
No matter how much you pay in rent you can be a good or a
bad tenant, and the vast majority of Section 8 voucher holders
are families who are just like everybody else, just want to
have a decent place to live, and a roof over their head and a
safe neighborhood in which to raise their children.
There is a structural--there are many neighborhoods that
are very opposed to not only Section 8 but even any rental
housing. In St. Louis a couple of years ago, there was a big
demonstration against an elderly development that was located
in--I am not sure--in your district in South County, which to
me just spoke to the stigma of not only affordable assisted
housing but also the racial stigma that still exists in our
community.
Mr. Clay. Yes. Thank you for that response.
Mr. Young, in follow up to Ms. Waters' questions, you
indicated that some rules were violated. Were other tenants
complaining about violations or was this an initiative by your
housing authority? What specifically were the rules violated?
Mr. Young. I am sorry, Mr. Chairman. I didn't say that
rules were violated. I said that HUD accused us of rule
violation of the residents dealing with our RAD demonstration
project.
And since, we have tried to provide HUD with the
information and the documentation that would dispute their
allegations but have yet to resolve the issue with them. But
there is proof that exists that all of the affected residents
had the opportunity to exercise their due process.
Mr. Clay. Wait a minute now. Were they evicted?
Mr. Young. Yes, sir.
Mr. Clay. And they were evicted because of--
Mr. Young. Of violation of the housing authority's
policies.
Mr. Clay. Okay, specifically what kind of violation?
Mr. Young. Some of them may have dealt with--may--I
believe, as Congresswoman Waters mentioned earlier, with drug
violations. Some of them were just normal violations of the
policy regarding guests, or a number of various violations.
Mr. Clay. In the case of drug violations, were any criminal
charges filed and were any drugs found?
Mr. Young. To be honest, it has been--this has been over a
2-year process and, to be honest, I probably need to review the
files. There were various reasons and various different cases
that HUD looked into.
Mr. Clay. That gives me pause and concern when you put
these struggling families out and then it makes their situation
that much more difficult, that much more challenging. Where is
the compassion for the people who need a roof over their head?
Mr. Young. Congressman, I totally agree with you. We have a
number of different levels that we go through before we evict
any residents. That is a serious matter with us when you are
evicting a family and they have to find somewhere else to stay.
And usually we do not go to that point unless it gets to a
situation where it is affecting the safety and well-being of
the other families in a development.
Mr. Clay. All right. I yield--
Chairman Luetkemeyer. The gentleman's time has expired.
Next, the gentleman from California, Mr. Royce, is
recognized for 5 minutes.
Mr. Royce. Thank you very much, Mr. Chairman.
And thank you, witnesses, for joining us today.
The cost of the Housing Choice Voucher Program consists
really of two parts, right? You have the payments to owners to
cover the difference between a tenant's contribution and the
rent, and then you have the administrative fees paid to
participating housing authorities. And logic would dictate that
reducing the resources extended on one would free up resources
for the other, but the pool of these resources that they are
drawn from, that is not infinite.
So the housing authorities in my district are unable to
accept applicants to Section 8 wait lists, they tell me,
because the administrative costs are rising.
And I would like to ask Ms. Sard, you pointed to housing
authority consolidation and also HUD shuttering poorly run or
poorly performing, I guess I should say, housing authorities as
a way to increase that efficiency. And I was going to ask you,
how will that alleviate the wait for these families in need?
Ms. Sard. I want the committee to be clear that today's
consortia rules don't create the kinds of efficiencies that
they potentially could, and that makes them less attractive to
PHAs and less useful to families. So we need changes--
Mr. Royce. We need to reform that.
Ms. Sard. I think the key thing is to allow the agencies
that agree to form a consortia to have a single funding
contract with HUD. That means instead of each of them doing all
the paperwork and HUD doing all the paperwork on the reporting,
that saves time.
It saves time on maintenance of waiting lists. Right now,
each individual housing authority maintains their own waiting
list. Families often apply to as many as they can in an area to
maximize their chances of getting assistance, as they should,
but--
Mr. Royce. On economies of scale--
Ms. Sard. --that is a waste of resources.
Mr. Royce. Right, right. Are you suggesting city-wide we
could do this, or county-wide as the most--
Ms. Sard. It is going to vary in the area. There are a lot
of parts of the country that have county-wide authorities.
Mississippi, in fact, is a leader in having regional housing
authorities as a strategy to work in rural areas.
Mr. Royce. That we should--
Ms. Sard. It is going to vary.
Mr. Royce. We should pursue that.
The second issue, you speak of efficiency here. I am
encouraged by HUD's Moving to Work contract renewals and the
expansion of that pilot program, and I will just tell you I
have talked at length to the board of supervisors through that
local payment standards.
The housing authority, for example, of San Bernardino
County in my district oversaw a reduction per unit cost from
$730 to $652 in addition to a 9 percent decrease in residents
living in the two highest-poverty areas. So that is kind of a
win-win. We are spending more efficiently there while moving
residents closer to better opportunities, which is why the
board really likes the program.
Ms. Blom, how has the Moving to Work contributed to
economic mobility and efficiency in public housing? What
characteristics can be replicated in other affordable housing
programs so authorities like San Bernardino's can expand their
success?
And I will just share with you that I have expressed my
feelings about this to Secretary Castro many times. I am glad
to see HUD making progress, albeit slowly.
And with that, I will go to your answer.
Ms. Blom. Thank you very much.
The Moving to Work demonstration that currently has 39
agencies participating, including San Bernardino, have been
leading the way on reducing administrative costs and providing
more housing choice and self-sufficiency options to families.
We used that as one of the pieces of information to help inform
the streamlining rule that we published in April.
But going forward, with regard to the 100-PHA expansion on
MTW, we are going to be rigorously studying the policy areas
for that expansion so that we can better utilize that research
to be able to make changes and simplify and reduce burden to
housing authorities. So I appreciate your support--
Mr. Royce. A quick response on Ms. Sard's comments, too.
Were you in concurrence with some of her suggestions on--
Ms. Blom. I think with regard to consortium the Department
believes that this is a vehicle that housing authorities should
voluntary choose to do and that we are looking to provide
guidance on consortium beyond just the voucher program but also
on public housing, and we need to look at that in a unified
way.
Mr. Royce. Thank you very much.
Thank you, Mr. Chairman.
Chairman Luetkemeyer. The gentleman's time has expired.
The gentlelady from Ohio, Mrs. Beatty, is recognized for 5
minutes.
Mrs. Beatty. Thank you, Mr. Chairman, and Mr. Ranking
Member.
And thank you to all of our witnesses here today.
Let me just start by saying this is very dear to me. I have
over 20 years of experience with working with public housing
authorities and doing relocation work, so let me just tell you
I know the difficulties, I know the funding fiasco, I know the
issues that many of my people have living in poverty. And I see
it as our role, your role, and especially those who are hands-
on running public authorities, that you have a special
obligation.
We come here, we quote articles from Harvard and how well
people are doing and they are moving out of poverty and what
they are doing with their Section 8 vouchers, and we know the
real reality. We know, as Congressman Ellison just said, in
most of our communities we have long, long wait lists for them
to get a Section 8 voucher. People wait what seems like to them
a lifetime.
So for the record I want to say I want more information,
Mr. Young, about what is happening. I am appalled sitting here
hearing from my colleagues and learning that earlier some 27
people were evicted and--or put out of facilities where you
have responsibilities of leadership and administration and it
was 2 years ago; 2 years ago is not like it was 20 years ago.
Coming here, there is an expectation that we will get
information from you all, and that is something that you are
going to hear a lot more about, and I want responses to what
happened to those folks, where are they, what are we doing.
Because this is what makes it bad for us when we come here
trying to help individuals be more self-reliant, to be self-
sufficient, all the terminology that we have used for over the
last 40 years that we want people to move out of poverty.
So you get where I am coming from.
So let me get to my questions, Mr. Chairman.
First, I want to also say some thank you's. I am from the
great State of Ohio, and Ms. Blom, just to let you know, I have
worked for 15 years with the Columbus Metropolitan Housing
Authority and our $30 million Choice Neighborhood
Implementation Grant is converting a public housing portfolio
through rental assistance demonstration.
And we were very sensitive when we went into a public
housing entity, Mr. Young. I know what it is like, that you get
people in there who have all kind of issues because they
haven't had the opportunities that many of us have had, and
especially people who look like us, or me.
So I want to thank you for the dollars and saying to us not
to displace anyone. If they need treatment, they get treatment.
We brought in mental health counselors; we brought in drug
counselors; we did financial literacy.
So with all that said, Ms. Blom, in your testimony you
discuss the problems with prioritizing subset populations for
housing assistance absent targeting funding. Could you briefly
expand on that or tell us why that is a problem and what it
means for at-risk individuals in need of housing assistance?
Ms. Blom. Thank you very much, and thank you for your
support of the Choice Neighborhoods Program. The Columbus
Housing Authority has done a phenomenal job of creating new
housing in Columbus to support low-income families.
With regard to your question--I'm sorry, remind me again
what your question was?
Mrs. Beatty. In your testimony, you discussed the problem
with prioritizing subset populations for housing assistance
absent of targeted funding.
Ms. Blom. Thank you very much for that reminder.
The housing authorities have the ability to establish the
preferences for families who are on their waiting list. And
depending on the locality, some jurisdictions may want to
provide preferences for homeless; some may want to provide
preferences for homeless youth; some may want to provide
preferences to veterans, or to women who have been a victim of
domestic violence.
I think from the Department's point of view, we want to
allow housing authorities and jurisdictions to have the ability
to decide what is the most important policy objective for their
jurisdiction and to allow housing authorities to have that
flexibility.
Mrs. Beatty. Okay. Thank you.
I yield back my 1 second.
Chairman Luetkemeyer. The gentlelady's time has expired.
With that, we are at the end of the hearing, and we want to
thank all our witnesses today for your testimony and for taking
time out of your schedules to be here to answer our questions
and to inform us. Your expertise and your insights are very
important to us and we certainly appreciate everything that
everybody has said.
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 5 legislative days for Members to submit written questions
to these witnesses and to place their responses in the record.
Also, without objection, Members will have 5 legislative days
to submit extraneous materials to the Chair for inclusion in
the record.
And with that, this hearing is adjourned.
[Whereupon, at 11:54 a.m., the hearing was adjourned.]
A P P E N D I X
September 21, 2016
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