[House Hearing, 107 Congress]
[From the U.S. Government Publishing Office]



 
                  FIGHTING DISCRIMINATION AGAINST THE


                    DISABLED AND MINORITIES THROUGH


                        FAIR HOUSING ENFORCEMENT
=======================================================================

                             JOINT HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                   HOUSING AND COMMUNITY OPPORTUNITY

                                AND THE

                             SUBCOMMITTE ON
                      OVERSIGHT AND INVESTIGATIONS

                                 OF THE

                    COMMITTEE ON FINANCIAL SERVICES

                     U.S. HOUSE OF REPRESENTATIVES

                      ONE HUNDRED SEVENTH CONGRESS

                             SECOND SESSION

                               __________

                             JUNE 25, 2002

                               __________

       Printed for the use of the Committee on Financial Services

                           Serial No. 107-73








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                 HOUSE COMMITTEE ON FINANCIAL SERVICES

                    MICHAEL G. OXLEY, Ohio, Chairman

JAMES A. LEACH, Iowa                 JOHN J. LaFALCE, New York
MARGE ROUKEMA, New Jersey, Vice      BARNEY FRANK, Massachusetts
    Chair                            PAUL E. KANJORSKI, Pennsylvania
DOUG BEREUTER, Nebraska              MAXINE WATERS, California
RICHARD H. BAKER, Louisiana          CAROLYN B. MALONEY, New York
SPENCER BACHUS, Alabama              LUIS V. GUTIERREZ, Illinois
MICHAEL N. CASTLE, Delaware          NYDIA M. VELAZQUEZ, New York
PETER T. KING, New York              MELVIN L. WATT, North Carolina
EDWARD R. ROYCE, California          GARY L. ACKERMAN, New York
FRANK D. LUCAS, Oklahoma             KEN BENTSEN, Texas
ROBERT W. NEY, Ohio                  JAMES H. MALONEY, Connecticut
BOB BARR, Georgia                    DARLENE HOOLEY, Oregon
SUE W. KELLY, New York               JULIA CARSON, Indiana
RON PAUL, Texas                      BRAD SHERMAN, California
PAUL E. GILLMOR, Ohio                MAX SANDLIN, Texas
CHRISTOPHER COX, California          GREGORY W. MEEKS, New York
DAVE WELDON, Florida                 BARBARA LEE, California
JIM RYUN, Kansas                     FRANK MASCARA, Pennsylvania
BOB RILEY, Alabama                   JAY INSLEE, Washington
STEVEN C. LaTOURETTE, Ohio           JANICE D. SCHAKOWSKY, Illinois
DONALD A. MANZULLO, Illinois         DENNIS MOORE, Kansas
WALTER B. JONES, North Carolina      CHARLES A. GONZALEZ, Texas
DOUG OSE, California                 STEPHANIE TUBBS JONES, Ohio
JUDY BIGGERT, Illinois               MICHAEL E. CAPUANO, Massachusetts
MARK GREEN, Wisconsin                HAROLD E. FORD Jr., Tennessee
PATRICK J. TOOMEY, Pennsylvania      RUBEN HINOJOSA, Texas
CHRISTOPHER SHAYS, Connecticut       KEN LUCAS, Kentucky
JOHN B. SHADEGG, Arizona             RONNIE SHOWS, Mississippi
VITO FOSSELLA, New York              JOSEPH CROWLEY, New York
GARY G. MILLER, California           WILLIAM LACY CLAY, Missouri
ERIC CANTOR, Virginia                STEVE ISRAEL, New York
FELIX J. GRUCCI, Jr., New York       MIKE ROSS, Arizona
MELISSA A. HART, Pennsylvania         
SHELLEY MOORE CAPITO, West Virginia  BERNARD SANDERS, Vermont
MIKE FERGUSON, New Jersey
MIKE ROGERS, Michigan
PATRICK J. TIBERI, Ohio

             Terry Haines, Chief Counsel and Staff Director
           Subcommittee on Housing and Community Opportunity

                    MARGE ROUKEMA, New Jersey, Chair

MARK GREEN, Wisconsin, Vice          BARNEY FRANK, Massachusetts
    Chairman                         NYDIA M. VELAZQUEZ, New York
DOUG BEREUTER, Nebraska              JULIA CARSON, Indiana
SPENCER BACHUS, Alabama              BARBARA LEE, California
PETER T. KING, New York              JANICE D. SCHAKOWSKY, Illinois
ROBERT W. NEY, Ohio                  STEPHANIE TUBBS JONES, Ohio
BOB BARR, Georgia                    MICHAEL E. CAPUANO, Massachusetts
SUE W. KELLY, New York               MAXINE WATERS, California
BOB RILEY, Alabama                   BERNARD SANDERS, Vermont
GARY G. MILLER, California           MELVIN L. WATT, North Carolina
ERIC CANTOR, Virginia                WILLIAM LACY CLAY, Missouri
FELIX J. GRUCCI, Jr, New York        STEVE ISRAEL, New York
MIKE ROGERS, Michigan
PATRICK J. TIBERI, Ohio

              Subcommittee on Oversight and Investigations

                     SUE W. KELLY, New York, Chair

RON PAUL, Ohio, Vice Chairman        LUIS V. GUTIERREZ, Illinois
PETER T. KING, New York              KEN BENTSEN, Texas
ROBERT W. NEY, Texas                 JAY INSLEE, Washington
CHRISTOPHER COX, California          JANICE D. SCHAKOWSKY, Illinois
DAVE WELDON, Florida                 DENNIS MOORE, Kansas
WALTER B. JONES, North Carolina      MICHAEL CAPUANO, Massachusetts
JOHN B. SHADEGG, Arizona             RONNIE SHOWS, Mississippi
VITO FOSSELLA, New York              JOSEPH CROWLEY, New York
ERIC CANTOR, Virginia                WILLIAM LACY CLAY, Missouri
PATRICK J. TIBERI, Ohio




                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on:
    June 25, 2002................................................     1
Appendix:
    June 25, 2002................................................    53

                               WITNESSES
                         Tuesday, June 25, 2002

Arnwine, Barbara, Executive Director, Lawyers Committee for Civil 
  Rights Under Law...............................................    42
Marcus, Hon. Kenneth, General Deputy Assistant Secretary for Fair 
  Housing and Equal Opportunity, HUD.............................     7
Pratt, Sara K., Civil Rights and Fair Housing Consultant on 
  behalf of the National Council on Disability...................    28
Smith, Shanna, President and CEO, National Fair Housing Alliance.    38
Tegeler, Philip, Legal Director, Connecticut Civil Liberties 
  Union..........................................................    40
Vaughn, Becca, Topeka Independent Living Resource Center Advocacy 
  Coordinator on behalf of The Disability Rights Action Coalition 
  for Housing....................................................    30

                                APPENDIX

Prepared statements:
    Roukema, Hon. Marge..........................................    54
    Kelly, Hon. Sue W............................................    56
    Oxley, Hon. Michael G........................................    58
    Clay, Hon. William Lacy......................................    59
    Gutierrez, Hon. Luis V.......................................    62
    Jones, Hon. Stephanie T......................................    66
    LaFalce, Hon. John J.........................................    68
    Lee, Hon. Barbara............................................    70
    Velasquez, Hon. Nydia M......................................    73
    Waters Hon. Maxine...........................................    75
    Arnwine, Barbara.............................................    76
    Marcus, Hon. Kenneth.........................................    87
    Pratt, Sara K.,..............................................    93
    Smith, Shanna................................................   121
    Tegeler, Philip..............................................   139
    Vaughn, Becca................................................   154

              Additional Material Submitted for the Record

Kelly, Hon. Sue W.:
    U.S. Department of Agriculture letter to Hon. Marge Roukema, 
      June 25, 2002..............................................   166
Marcus, Hon. Kenneth:
    Written response to questions from Hon. John J. LaFalce......   168
Vaughn, Becca:
    Response to Members' question asked during the hearing.......   175
Housing Assistance Council, prepared statement...................   176
National Council on Disability, letter, July 29, 2002............   181
Paralyzed Veterans of America, prepared statement................   184
U.S. Department of Agriculture, Rural Housing Service, 
  Administrator, Arthur A. Garcia, prepared statement............   189


                  FIGHTING DISCRIMINATION AGAINST THE



                    DISABLED AND MINORITIES THROUGH



                        FAIR HOUSING ENFORCEMENT

                              ----------                              


                         TUESDAY, JUNE 25, 2002

             U.S. House of Representatives,
     Subcommittee on Oversight and Investigations, 
         and Subcommittee on Housing and Community 
                                       Opportunity,
                           Committee on Financial Services,
                                                    Washington, DC.
    The subcommittees met, pursuant to notice, at 2 p.m., in 
room 2129, Rayburn House Office Building, Hon. Sue Kelly [chair 
of the Subcommittee on Oversight and Investigations] presiding.
    Present: Representatives Kelly, Gary G. Miller of 
California, Tiberi, Frank, Waters, Gutierrez, Velazquez, Watt 
of North Carolina, Lee, Inslee, Schakowsky, Moore, Jones of 
Ohio, and Clay.
    Ex officio present: Representatives Oxley and LaFalce.
    Chairman Kelly. This joint hearing of the Subcommittee on 
Oversight and Investigations and the Subcommittee on Housing 
and Community Opportunity will come to order.
    I want to thank all Members of Congress that are present 
today. There will be others. We have a busy day. Without 
objection, all members present will participate fully in the 
hearing, and all opening statements and questions will be made 
part of the official hearing record.
    Beyond the issue of availability of affordable housing is 
the ability of the disabled and minorities to access what 
housing is currently available. Unfortunately, discrimination 
continues to be a disturbing problem in our nation, which is 
very apparent in housing.
    The disabled have a particularly hard time since the wrong 
housing reduces their ability to function even in the confines 
of their own homes. As a nation, we have recognized these 
problems and have enacted laws which created agencies dedicated 
to stopping housing discrimination and ensuring more homes are 
accessible to the disabled.
    It is for this reason that I have become very frustrated 
when I read reports which state that these laws are not being 
enforced and the agencies created to investigate and correct 
these wrongs have been failing in their jobs.
    One issue I continually hear about when I am in New York is 
the desperate need for housing for people with disabilities. We 
have adults who desperately want to get out on their own, to 
hold jobs, pay taxes, and simply have no options for housing.
    Think about people of slight or profound disability even, 
and the courage that it takes for them to enter the world on 
their own. That desire to become an active part of society must 
not be thwarted by a lack of available affordable housing.
    It is my hope that with today's hearing we can all gain a 
better understanding of what the issues are which face the 
disabled and minorities seeking homes and better living 
conditions within those homes.
    We will discuss why efforts to enforce fair housing laws 
have failed, and what is and can be done to rectify the 
situation. But, most of all, I hope that we can agree to work 
together to renew our efforts to ultimately solve this problem.
    There must be zero tolerance for discrimination against the 
disabled and minorities. The need for clean, safe, affordable 
housing for minorities and the disabled has never been greater. 
Addressing this housing shortage and fighting discrimination 
must be a top priority in our nation's housing policy.
    I now want to ask unanimous consent to insert in the record 
the opening statement of the co-chairman, whose subcommittee is 
a part of this hearing today, and that is Congressman Marge 
Roukema, Chairman of the Subcommittee on Housing and Community 
Opportunity.
    [The prepared statement of Hon. Marge Roukema can be found 
on page 54 in the appendix.]
    Ms. Roukema is going to try to be with us here today, but 
she is not here for this opening statement. So I would like 
unanimous consent to place it into the record. And, with that, 
I will turn now to my friend from Massachusetts, Mr. Frank, for 
his opening statement.
    [The prepared statement of Hon. Sue W. Kelly can be found 
on page 56 in the appendix.]
    Mr. Frank. Thank you, Madam Chair. I am pleased that a 
request which we made for this hearing was agreed to. And I am 
pleased that we have a chance to address this very important 
subject.
    There is a great myth that plagues our politics. Whenever 
we try to enact legislation to protect people against unfair 
discrimination, the opponents of that legislation conjure up 
all sorts of horrors.
    They paint a picture of a world in which innocent 
employers, building owners, rental agents, et cetera, are at 
the mercy of this gaggle of vicious potential plaintiffs and 
are often mistreated by overbearing enforcement agents.
    In fact, as we know, the great scandal of anti-
discrimination laws is that they are substantially 
underenforced. The problem with laws against discrimination in 
every case is that it is hard to enforce them.
    It is hard to enforce them. You get a transition period. 
There is a practice of people being bigoted. A societal 
consensus finally gets to the point where we can outlaw that, 
and for the first couple of years you catch a few of the bigots 
because they are too dumb to disguise their bigotry.
    But after awhile the warriors may, those who want to do 
this, figure it out. And we then deal with a subtler form of 
discrimination, subtler only in its expression, not in the 
terrible impact it has on its victims.
    And because under American law, the burden of proof is on 
those who would seek to establish that things have been done 
wrong because people are careful not to say incriminating 
things in the presence of witnesses or write them down, we find 
ourselves in a very difficult situation when we try to enforce 
the law.
    I will say, for those who raise questions about affirmative 
action, the major role of affirmative action in many cases is 
not to achieve some foreordained result, but because it can be 
an important evidentiary tool, if in fact people have an 
employment practice, or a residential bias, or have sold houses 
to a population that is substantially different than the 
underlying population; if people who suffer from disabilities, 
or who are a particular ethnic group are clearly excluded from 
a particular place. That is a piece of evidence.
    At any rate, because it is so hard to enforce, it becomes 
very important for us to do this kind of oversight. It becomes 
very important for us to focus on this. It also is the case 
that because enforcement is so hard, it is expensive. And we 
have not in general funded those agencies that are charged with 
protecting people against discrimination at nearly the level 
they ought to be.
    They are formal law enforcement. And if we are serious 
about the law that says you should not deny someone a place to 
live because of her disability, or his color, or children, then 
we ought to put our money where our mouth is and provide the 
enforcement entities. And we do not do that nearly enough.
    So that is another important piece of this that we have to 
do. We have got to make sure that people are adequately 
financed so they can in fact carry out their responsibilities 
in this area.
    The purpose of this hearing is to get some progress 
reports. But I know what we will find out is that we have 
underenforced these laws, as we have underenforced all anti-
discrimination laws. It is not a partisan matter; it is an 
institutional bias.
    The last point I would make--and I assume we will see some 
numbers on this--one of the unfortunate facts about any anti-
discrimination law I have ever seen is that the backlog of 
complaints is excessive; that people file a complaint and have 
to wait months, over a year.
    That simply is intolerable. That is a failure of will. And 
the basic point that we need to get across is we have not 
discharged our moral obligation to our fellow citizens to 
protect them against unfair prejudice just by passing a law.
    Passing the law is a necessary first step. But if all we do 
is pass the law, and do not provide the vigilance, and the 
resources, and the energy to enforce it, then we have done very 
little to protect people.
    So I am glad that we have this hearing. And I look forward 
to demonstrating here today our commitment to making sure that 
this law against discrimination and housing is in fact 
enforced.
    Chairman Kelly. Thank you very much, Mr. Frank.
    Ms. Velazquez, I understand you have an opening statement.
    Ms. Velazquez. Thank you. And, first, I would like to thank 
Chairwomen Roukema and Kelly, and ranking members, Frank and 
Gutierrez, for convening this hearing today. The subject of 
discrimination involved public and private housing markets. It 
is one that needs to be addressed, and I appreciate the efforts 
of this body to do so.
    As our Federal housing policy has evolved over the years, a 
number of programs and initiatives have been implemented that 
are intended to ensure that not only do families have safe, 
affordable places to call home, but that they are in 
neighborhoods that we will all feel comfortable raising our 
children in.
    Hope VI was specifically created with this intent. 
Furthermore, the 1998 public housing reform law espoused the 
theory of deconcentration of poverty. Unfortunately, the impact 
of these theories have not been what was hoped; 4.9 million 
American families have worst case housing needs.
    These are families who pay more than 50 percent of their 
income for rent, or live in severely substandard housing. Last 
year, we heard from several witness who believed that the 
number of families in such situations might even be greater 
than the 4.9 million cited in HUD's most recent report on that 
topic.
    Even more alarming is the fact that the number of families 
who pay more than 50 percent of their income in rent is rapidly 
increasing in urban areas and among working minority families. 
These are many of the same people for whom our educational 
system is failing. This is especially hard on the children.
    When you add the burdens of an unstable housing situation, 
it is little wonder that these children are being left further 
behind with each passing year. Yet, the administration has paid 
little attention to the office charged with reversing these 
trends.
    Eighteen months into the President's term, the position of 
Assistant Secretary for Housing--for Fair Housing and Equal 
Opportunity--remains unfilled. In fact, the current nominee, 
Ms. Carolyn Peoples, was only submitted by the President in 
May.
    Furthermore, she has had very limited experience 
administering fair housing laws. I take this to be a troubling 
indication of the low level of importance placed on these 
issues by the administration, one that I hope will soon be 
reversed.
    This void has left us with a backlog of fair housing 
complaints that members of our communities tell us take far 
longer than the statutorily required deadline of 100 days to 
address.
    I would be interested in hearing how many complaints are 
currently pending we fulfill, and how long it typically takes 
to process them. I also look forward to learning what specific 
specs HUD intends to take to improve its record on this score.
    I look forward to the testimony of all of our witnesses, 
and hope that we can begin to bring forward some practical 
solutions to reversing the trends of minorities lagging behind 
the Nation in almost statistical analysis of housing 
affordability. Thank you, Ms. Chairwoman.
    Chairman Kelly. Thank you, Ms. Velazquez.
    Mr. Miller, do you have an opening statement?
    Mr. Gary G. Miller of California. Well, thank you, Madam 
Chair. I am just very pleased that we are having this hearing. 
I think some things might be blown out of perspective.
    I have to agree that there has been a lack of enforcement 
on certain programs and policies, and especially when it comes 
to disabled and minorities in the past. But I think that is 
somewhat in the past.
    I think the new administration is making every attempt to 
remove the problems that we faced in the past. So I do not know 
that it is necessarily a problem that requires new legislation.
    I think it is a problem that needs focusing upon. And I 
think that is what we are doing in this hearing. And I think 
that if we can get the dialog going with the administration--
and I know how the President feels strongly about this issue--
and then, that impetus is put toward enforcement, I think the 
problems are going to be resolved.
    But it is a timely hearing. And it is a timely issue that 
needs to be dealt with. And, again, like I said, I think the 
issue is acknowledgement there has been a problem through lack 
of oversight and lack of enforcement. And I am encouraged that 
we are taking those steps. And I am looking forward to hearing 
the gentlemen speak to us today. I yield back.
    Mr. Frank. If I could just have 30 seconds. I neglected--
and maybe you should cover it--but it is impossible to convene 
on this subject without noting the enormous loss in the death 
of Justin Dart. And I should have mentioned that at the outset.
    But Justin Dart was such a dedicated pioneer on behalf of 
this that, as we convene here, shortly after his death, I just 
thought it was important to take note of that.
    Chairman Kelly. Thank you for reminding all of us.
    Mr. Gutierrez.
    Mr. Gutierrez. Good afternoon, Chairman Roukema, and 
Chairman Kelly, and ranking member Frank.
    It has been more than three decades since the passage of 
the Federal Housing Act, and we can still see, hear, and 
experience housing discrimination almost the same way we did 
more than 30 years ago.
    In the year 2000, Federal agencies reported more than 
22,000 complaints. I think it is a telltale sign that out of 
these numerous complaints, race was the most commonly reported 
discrimination, followed by disability and familial status.
    Last year, the number of complaints increased approximately 
23,500, but these numbers do not tell the whole story. HUD 
estimates that more than 2 million incidents of housing 
discrimination occur each year.
    It has been documented that victims of housing-related 
discrimination or hate activity feel isolated, afraid, shocked, 
and vulnerable. It is typical for these victims to decide not 
to report their case because they may fear retaliation, 
mistrust of law enforcement, experience cultural language 
barriers, or just fear deportation.
    Our nation's heartland seems to be sovereignly segregated 
according to the best information available. The cities of 
Chicago, Detroit, Milwaukee, Cleveland, St. Louis, all ranked 
among the ten metropolitan areas with the most black/white 
segregation.
    At the same time, Hispanics in Chicago, Cleveland, and 
Milwaukee live in more pronounced segregation than Latinos in 
any other major metropolis. In fact, segregation for Latinos is 
greater in Chicago than in any other major metropolitan region 
in the country.
    Let us remember the sad, but direct, correlation between 
segregation and poor schools, which, in turn, have fewer 
resources for Latino and black children who attend them. 
Research shows that economic differences alone cannot explain 
the highly segregated pattern of housing choices because 
serious racial discrimination continues to exist within each 
economic group.
    You can make money. Does it mean that you necessarily will 
live in a segregated community--I mean a desegregated 
community?
    I think the majority of us here today might agree that one 
of the most important reasons for the sluggish movement toward 
diversity in the housing is what looks to be racist tendencies. 
Studies show that even people who work hard, maintain good 
credit, and have strong references are still being 
discriminated because of the color of their skin, because they 
have small children, or because they suffer from a disability.
    Fair housing efforts have long been underfunded and 
undervalued. At the same time, the economic and social costs of 
housing discrimination, and segregated housing patterns 
continue to be overwhelming.
    It is time for Congress, for all of us here today, to 
allocate additional funds to HUD's Office of Fair Housing and 
Equal Opportunity in an amount sufficient so that this office 
can process all housing discrimination complaints in a timely 
and effective manner; that is in 100 days, or preferably less, 
as it should be at HUD, and in accordance with the Fair Housing 
Act, and not at a 500 day pace that we currently have, and 
equality in housing doesn't happen in a vacuum.
    It is there for each of us to see, feel, hear, bite, or 
ignore it, profit, or suffer from it, tolerate it, initiate it, 
and sometimes even die because of it. I look forward to hearing 
all of the testimonies this afternoon.
    Chairman Kelly. Thank you very much, Mr. Gutierrez. Ms. 
Lee.
    Ms. Lee. Thank you, Madam Chair. I would like to just ask 
permission to put my full statement into the record, and just 
make a couple of comments.
    Chairman Kelly. So granted, no objection.
    Ms. Lee. I would like for your unanimous consent. Thank 
you.
    I just want to thank you, Chairwoman Roukema, and our 
ranking member, Mr. Frank, for holding this very important 
hearing. Housing, as many of us continue to say, should be 
really a basic right of every human being.
    And, therefore, it is extremely important that we have an 
honest and a fair system that works to improve the lives of 
everyone regardless of their race, nationality, disability, 
age, sex, sexual orientation, or religion. And so, this is an 
extremely important hearing. Just this past weekend I had a 
town meeting in my district, actually, in Oakland, on housing.
    And, of course, issues with regard to discrimination came 
up. And I think that we need to understand also clearly the 
commitment of HUD, in terms of its priority in tackling the 
issues with regard to fair housing enforcement; but also what 
is going on with this vacancy with regard to the Assistant 
Secretary for Fair Housing and Employment Opportunity and find 
out the status of that, and what has been the problem in this 
slow movement in terms of filling this vacancy.
    So, thank you again, Madam Chair, for the hearing, and I 
appreciate being able to submit my full record.
    [The prepared statement of Hon. Barbara Lee can be found on 
page 70 in the appendix.]
    Chairman Kelly. Thank you very much, Ms. Lee. If there are 
no further opening statements, I will introduce our first 
witness, Mr. Kenneth Marcus, the General Deputy Assistant 
Secretary for Fair Housing and Equal Opportunity at HUD.
    Mr. Marcus, we thank you for testifying before us today, 
and I welcome you on behalf of the committees. Without 
objection, your written statements and any attachments will be 
made part of the record.
    You will now be recognized for a 5-minute summary of your 
testimony. Before you begin, let me explain that we have lights 
on the ends of the table. Those lights are the indicators for 
the 5 minute period.
    The green light means that you will have 4 minutes in which 
to speak; the yellow light means you have 1 minute; the red 
light means that you are out of time. I tend to try to give 
people the ability to finish their closing sentence when that 
red light comes on.
    But I do feel that since we have your written testimony, it 
will be and is a part of our record, we really feel that you 
probably can sum this up in 5 minutes, and we ask that you do 
so.
    That being said, please proceed, Mr. Marcus, and thank you 
for being here.

   STATEMENT OF KENNETH L. MARCUS, GENERAL DEPUTY ASSISTANT 
SECRETARY FOR FAIR HOUSING AND EQUAL OPPORTUNITY, DEPARTMENT OF 
                 HOUSING AND URBAN DEVELOPMENT

    Mr. Marcus. Thank you; thank you, Chairman Kelly; thank 
you, members of the committee.
    My name is Kenneth L. Marcus, and I am the General Deputy 
Assistant Secretary for Fair Housing and Equal Opportunity at 
the U.S. Department of Housing and Urban Development. I am 
honored to testify before you today on HUD's efforts to enforce 
those laws that protect the right of every American including 
minorities and persons with disabilities to freely choose where 
they will live.
    No one should be precluded from seeking the house of their 
choice, or purchasing the house of their dreams because of 
their race, color, religion, national origin, sex, familial 
status, or disability.
    Secretary Mel Martinez has repeatedly emphasized that 
aggressive enforcement of the Fair Housing Act, and the other 
civil rights acts regarding housing, will be a high priority of 
this department during this administration. HUD and the State 
and local agencies that enforce substantially equivalent laws 
receive an average of 10,000 complaints a year alleging Fair 
Housing Act violations.
    The most meaningful contribution HUD can make to the fight 
against housing discrimination is the prompt and successful 
resolution of complaints from individuals who have come forward 
to us to report claims of discrimination. There have been 
comments already this afternoon concerning the speed with which 
we resolve complaints.
    We, at HUD, do believe that we must improve our track 
record with respect to the enforcement of the Federal fair 
housing laws, and with respect to the timing within which we 
complete the resolution of these cases.
    During previous years, the Department developed a bad 
reputation for its delays in processing Fair Housing Act cases, 
to the extent that even today, many of the Department's 
constituents express reluctance to file complaints with the 
Department out of a belief that nothing will come out of it.
    At the end of fiscal year 2000, the percentage of fair 
housing cases remaining open past the statutory deadline of 100 
days was well over 80 percent. At the end of the first fiscal 
year of the Bush administration, fiscal year 2001, we had 
reduced the aged-case inventory to 37.1 percent.
    This was the first time since the passage of the Fair 
Housing Act Amendments Act of 1988 that HUD's aged-case backlog 
had dropped below 50 percent. HUD is also stepping up its 
efforts to combat lending discrimination. The Department will 
soon provide a contract for an enforcement project that targets 
mortgage lending discrimination generally and predatory 
lending, in particular.
    In addition, this year's Fair Housing Initiatives Program 
encourages grant proposals from fair housing groups, who among 
their activities, place a special emphasis on educating and 
enforcing the Fair Housing Act against predatory lending 
practices.
    In addition, the Department is focused on a wide variety of 
other priorities and initiatives. For instance, the Department, 
through the FHIP program, is focusing attention on problems 
faced by persons within the Southwest border area, which may 
include predatory lending and other discriminatory lending 
activities.
    In addition, through the FHIP program, and in other ways, 
we are also working to implement the Bush administration's 
commitment to tapping the potential of faith-based and grass 
roots organizations by partnering them with the traditional 
fair housing organizations.
    HUD has a great responsibility to make sure that its own 
programs are accessible to people with disabilities; and, also 
to safeguard their rights because a disproportionate share of 
people with disabilities rely on federally assisted housing.
    Even within the last several months, in the District of 
Columbia and Boston alone, we have increased the number of 
accessible housing units for a person with a disability by over 
1200, and entered into the voluntary compliance agreements that 
will increase the number by over 1200 units.
    In addition, we are working to increase the number of 
accessible private housing opportunities that are available to 
persons with disabilities. For instance, HUD has awarded over 
two-and-a-half million dollars to KPMG to develop and conduct 
training and technical guidance on the Fair Housing Act 
accessibility requirements for persons engaged in designing, 
approving, and building multi-family housing.
    As part of this project, KPMG will set up resource centers 
in different parts of the country where architects, builders, 
and others can obtain technical guidance on specific design 
questions.
    In addition to making sure that new housing is built 
correctly in the first place, and taking action against those 
housing providers who have failed to comply with the provisions 
of the Fair Housing Act, HUD is also enforcing the Fair Housing 
Act against those housing providers who refuse to make 
reasonable and necessary allowances in their building operation 
for persons with a disability.
    In closing, we believe that all of these efforts, and 
others that I have discussed in my written remarks, when 
combined with appropriate enforcement actions and timely 
processing of complaints will enable the Department and our 
nation to strike a decisive blow in the fight against 
discrimination.
    We look forward to working with industry, community 
leaders, local governments, fair housing advocates, and 
Congress, to bring everyone in America over the threshold to 
equal opportunity and justice.
    This concludes my formal statement. I am happy to answer 
questions.
    [The prepared statement of Hon. Kenneth L. Marcus can be 
found on page 87 in the appendix.]
    Chairman Kelly. Thank you very much, Mr. Marcus. We 
appreciate your statement. I have read reports that have warned 
about the problems that the HUD 20/20 Management Reform Program 
caused at HUD.
    Is correcting the problems you have found at HUD, as a 
result of the 20/20 Management Reform Program; is that one of 
the largest problems that HUD faces now?
    Is that one of your biggest problems right now?
    Mr. Marcus. We certainly have a number of management 
problems in the Department. And I think some of them at least 
were mentioned in the report to which you allude. There were 
many problems that HUD faced over the years with respect to 
management it is hard really to list them.
    Certainly, the question of how best to deploy the community 
builders, which I think may be one of the specific issues 
discussed in that report, has been a huge challenge for the 
Department, and is one of the areas in which the Department has 
focused a great deal of resources.
    Chairman Kelly. Is that part of the 20/20 Management 
Reform?
    Mr. Marcus. Yes, I think that is one of the areas.
    Chairman Kelly. What else in that 20/20 reform is difficult 
for you right now?
    What are you needing to change to help correct the 
situation?
    Mr. Marcus. I think that the greatest problems have 
involved the distribution or misdistribution of staffing 
resources and personnel, and ensuring that we can retain 
appropriate lines of reporting authority within the Department 
that had been redistributed, and to make sure that the program 
areas including FHEO, are able to best marshall the resources 
within the Department in order to achieve our mission.
    Chairman Kelly. During the downsizing at HUD, under 
Secretary Cuomo, the Office of Fair Housing and Equal 
Opportunity was absolutely decimated. They lost money; they 
lost many experienced staff; staff resigned; they took early 
retirement.
    I would like to know if this is, in fact, true because it 
is what I have read. And I would like to know what you are 
doing to rectify that problem because it seems to me that right 
now this is what this hearing is about. It is about that 
office, and it is being effective at doing its job.
    Mr. Marcus. There is no question that we lost a large 
number of incredibly talented people during that period and 
through that process. And there is no question that that loss 
is going to be very difficult to deal with. Many of the most 
vital, engaged, committed, and talented people we had 
unfortunately left the Department at that time.
    We are dealing with it in a number of different ways. One 
way that we are dealing with it, of course, is through the 
redeployment of the community builders. The Office of Fair 
Housing has already employed at least a handful of very 
talented, experienced fair housing professionals through that 
process.
    And we will be getting at least another couple of dozen by 
the end of this fiscal year, who are already becoming involved 
in our compliance and enforcement efforts. In addition, we have 
focused on the notion of succession and are planning to deal 
with the loss of experienced people. By bringing in interns and 
others, we're attempting to remedy the problems created by the 
loss of personnel.
    I am happy to report that in my several months since 
joining HUD, I have found that we have a number of 
extraordinarily talented and committed professional staff 
within the Office of Fair Housing and Equal Opportunity, who 
are doing a tremendous amount of work to deal with the sorts of 
problems to which you refer.
    Chairman Kelly. I want to go back to that just a little bit 
because it seems to me that what you just stated was that you 
did not feel that given the resignations and the lack of money 
that the Fair Housing and Equal Opportunity Office could 
continue to really function properly. It was not functioning 
properly, and you are taking steps now.
    I just want to be clear on the record. You are now taking 
steps that are going to rectify the situation that was created 
under Secretary Cuomo, is that correct?
    Mr. Marcus. Let me say that we faced an enormous number of 
challenges when we came in, and we have taken a number of 
measures to try and deal with them.
    The redeployment of the community builders has been a bold 
move forward, I believe, to strengthen fair housing, 
enforcement and compliance through the use of personnel. And we 
are attempting in various ways to change management and 
administrative procedures also to deal with those problems. And 
I believe that we will do so.
    Chairman Kelly. I want to go back to that one more time. 
From what I read in your testimony, and in testimony of others, 
the partnership between HUD and the fair housing agencies that 
were getting the fair housing initiatives program funds started 
to deteriorate in 1998. And they have just gotten worse and 
worse. I want to know how this happened, and I want to know 
what is being done to resolve that.
    Mr. Marcus. There is no question that the relationship with 
the Fair Housing Initiatives Program recipients has 
deteriorated a great deal over the last few years. I was not, 
of course, here in 1998, so others can give you a better 
explanation of the exact date.
    But I understand that it is approximately that number of 
years that the trust and relationship with those organizations 
has become strained and difficult. Let me say that I have done 
everything that I can to work as closely as possible with those 
organizations.
    I believe there are across the country, and in this very 
hearing room, some extraordinarily dedicated professionals 
through the FHIP program, who are working very hard with us to 
implement our programs throughout the country.
    I have tried to establish as open a door policy as I can, 
both with regular policy meetings with FHIP recipients, and 
also with meetings with myself and with staff to try and get a 
better understanding of how we can strengthen that 
relationship, and to repair the loss of trust that had 
evidently developed in prior years.
    Chairman Kelly. Thank you very much. I see I'm out of time. 
We will go now to Mr. Frank.
    Mr. Frank. Mr. Marcus, one of the rules we have here that I 
don't like, and I have in the past myself, when I was a chair, 
was the administration witness always testifies first. And 
that's a problem, because sometimes what I want to ask people 
about are what other people think.
    So I have had a chance to read some of the other testimony. 
And I wonder if you could respond to a couple of points:
    One is that HUD has imposed restrictions with regard to the 
form which has to be used, and what the Lawyers Committee for 
Civil Rights asserts in this statement of Arnwine is that there 
is a website that has forms, and that they have had cases where 
people have filled out the form on the website, turned it in, 
and have been told that was the wrong form; and in one case at 
least that led to a year's delay intervening so the case could 
not be filed at all.
    And is there a strict requirement--I guess it is two part: 
Is there some strict requirement as to form? I would say with 
victims of discrimination, who may not always be the most 
sophisticated, I would hope we would have some flexibility.
    And, second, and even more disturbing, is there a form on 
the website that is out there that if people use it, it does 
not count? Could you respond to that?
    Mr. Marcus. I would be delighted to respond to it, because 
I think the more that we can do to educate people as to their 
options for coming to us the better because we are in any 
number of different----
    Mr. Frank. All right. Mr. Marcus, let's be specific with 
what I just asked you.
    Is there a very specific form, and have different versions 
of the form that would not be accepted been available recently?
    Mr. Marcus. No, Congressman. There are several different 
forms there. We have a form available on the website. We will 
be happy to look at it to see if we can simplify it. One way is 
to use the website. Another way is to use----
    Mr. Frank. No, excuse me, but maybe I was not clear. I was 
not suggesting that that form was too complicated. I was saying 
that we have an assertion that people who use the form on the 
website were then told that was the wrong form. I thought I was 
clearer than that. I was not talking about complications. Are 
you aware that that may have happened?
    Mr. Marcus. I am not aware, and I have not yet read the 
testimony, but let me say this. We have tried to communicate 
throughout the field that if anyone comes to us with anything 
that even remotely sounds like it may be a claim under the Fair 
Housing Act, we will look behind the form with which they come 
to us.
    It could be oral, it could be written. They could fill out 
a form on the website. They could not fill it out if they even 
think they might----
    Mr. Frank. Well, that is what I would hope would happen. 
And I would hope then maybe if we got these specific examples 
submitted to you, you could address them, and we could figure 
out what the groups, the way in which we could avoid that.
    Let me ask you then about the budget. What was the budget 
in the last year of the Clinton administration?
    Mr. Marcus. It was approximately $23 million and 22--$24 
million for the FHIP program, $22 million for the FHAP program.
    Mr. Frank. Forty-six total. What's it this year? What was 
requested for this year--for the current, for the next fiscal 
year, for 2003?
    Mr. Marcus. We have requested level funding.
    Mr. Frank. Are the number of complaints going up?
    Mr. Marcus. Well, that is a difficult question, 
Congressman. We have fewer complaints so far this year, 
although this is a seasonal matter. But the fact is we have 
somewhat fewer complaints this year, even for this time in 
prior years.
    So we are going down a little bit in complaints. But we 
think that as we increase education and outreach, it is hard to 
say, we might be back.
    Mr. Frank. I must say, I think level funding is 
inappropriate, and this is part of the problem. I think the 
funding was too low, in the first place. And only the level 
funded, I don't think gives anybody an impression that this is 
something we are very serious about. And I include in this both 
branches, legislative and executive.
    The other assertion that was troubling that I hope you 
would be able to address would be the notion that in cutting 
down the backlog there has been a kind of emphasis on speed and 
cutting down the backlog; and that cases in the backlog have 
not gotten the full individual treatment that they would have 
gotten if they were not in the backlog.
    Would you respond to that accusation?
    Mr. Marcus. Yes, Congressman Frank. And I would like to 
because I think that is a very important point.
    I have considered the reduction of our aged-case backlog to 
be the singlemost important administrative or managerial 
problem that we have right now, and we have given it a great 
deal of focus.
    But I have also, every time I have discussed with staff the 
problem of aged-case backlog resolution, tried to emphasize 
that we are not simply in the business of resolving cases 
within 100 days. We are in the business of ensuring that 
persons claims are resolved appropriately, and that we are 
reducing discrimination in the United States.
    Now trying to make sure that that happens, and that 
procedures are in place to ensure that aged-case backlog 
resolution does not come at the expense of a thorough 
resolution of the complaints is a difficult matter that we have 
looked at in a few different ways.
    One thing that I have done is to try to ensure that we are 
developing goals and timetables which, while ambitious, are 
attainable. I would have liked, for instance, to be able to 
reduce our aged-case backlog over the course of this year down 
not just to 35 percent, but to 25, or 20 percent.
    But in speaking with staff, I have been convinced that 
there is a certain point to which we can reduce it this year 
consistent with a complete and thorough investigation; and that 
if we push people to go further, they might not meet those 
goals.
    But they might do so only at the expense of a thorough 
investigation. So I have tried to make sure to push people only 
as far as we can legitimately do so, consistent with a thorough 
investigation.
    We have also tried to make sure that where there is any 
indication from anyone that an individual case has not gotten 
the care and attention that it deserves including cases that 
may have been dismissed or determined not to be a basis for 
reasonable cause determination, that we go back and look at it 
to see whether in fact we did not do it right because of the 
rush to resolution.
    So this is a problem that we deal with both in terms of 
developing priorities and objectives, and also in terms of 
dealing with specific individual cases.
    Chairman Kelly. Thank you very much. Ms. Velazquez, have 
you questions?
    Ms. Velazquez. Thank you, Chairwoman.
    Mr. Marcus, I heard that you are making reference three 
times for the record that this office under Andrew Cuomo was 
practically dismantled. And maybe that explains why I endorse, 
and I am on the record supporting Carl McCall for Governor in 
New York.
    But, putting that aside, does that also explain the fact 
that it took that administration 18 months to submit Ms. 
Peoples' name for that position?
    Mr. Marcus. Let me try to hit on both parts of that. First, 
my concern in discussing the problems that we have faced has 
really been to try and identify what the challenges are, as 
opposed to assessing blame. Because we certainly have our share 
of challenges.
    As for the nomination of Mrs. Peoples, of course, I have 
not personally been involved in that. I understand that the 
emphasis has been on finding the right person, even if it takes 
a little bit longer.
    And based on my assessment, and that of everyone that I 
have talked to who has met with her, I think that there is a 
general consensus that Mrs. Peoples will be an assistant 
secretary worth waiting for.
    Ms. Velazquez. Well, I have my concerns in terms of the 
fact that she has very limited experience at administering fair 
housing laws. I just would like to ask you, Mr. Marcus, what 
assurances can HUD give this committee that Ms. Peoples and 
other seniors at HUD will address the concerns of fair housing, 
civil rights, and disability advocates to regain public 
confidence in the enforcement of civil rights laws protecting 
minorities and people with disabilities?
    Mr. Marcus. Well, you know, there is what we can say to try 
and provide assurances; and then, in the end, there is what we 
do, and what we can do.
    In terms of what we can say, I am proud to be able to tell 
you that from when I first met Secretary Mel Martinez, he has 
emphasized to me, as he has emphasized to other members of his 
staff, the commitment of this administration and this 
Department, not just to the enforcement, but to the aggressive 
enforcement of the Fair Housing Act.
    And everything that I have seen from the attitudes of 
everyone in the Department, and certainly the attitude that I 
share, is that the Fair Housing Act must be aggressively 
enforced in this country.
    Now we have been here a short time, but I think that we 
have already at least made progress in terms of dealing with a 
substantial aged-case backlog and on increased the number of 
charges last year. And I think in the end it will be a question 
of whether we are able to increase with that record.
    Ms. Velazquez. Thank you. I would like to read from page 2 
of your testimony. At the bottom, when you made reference to 
the study title, ``All Other Things Being Equal,'' prepared 
testing study of mortgage lending institutions, you said, ``The 
study revealed that while the majority of mortgage lending 
transactions do not involve discrimination, blacks and 
Hispanics in the market studied tended to receive less 
information, less assistance, and worse terms.''
    Mr. Marcus, if this is not discrimination, what do you call 
this?
    Mr. Marcus. It looks like discrimination to me. That's what 
I would call it. Perhaps the language needs a little 
clarification.
    And let me say what I intended to emphasize in this 
language is that when we looked at treatment of different 
persons in Chicago and Los Angeles at the pre-application stage 
of mortgage lending, what we found is that for the most part, 
most African-Americans and Hispanics received the same 
information, assistance, terms, and treatment as did white 
people, mostly the same.
    However, there was a statistically significant number of 
African-Americans and Hispanics who received worse treatment at 
that stage. And that looks like differential treatment to me.
    Ms. Velazquez. Mr. Marcus, what specific steps will HUD 
take to reverse this trend?
    Mr. Marcus. Well, that is an excellent question, and we are 
doing a few things. The first and most focused thing that we 
are doing in response to this is developing a special contract 
that we will have competitively bid out for a fair housing 
organization, or organizations which can focus on the problems 
of mortgage lending discrimination, to go out, and to help us 
with enforcement, and perhaps also education and outreach, to 
ensure that where there are people committing this sort of 
discrimination, we will be able to find them, and make sure 
that we cure the problem.
    But we are using both HUD resources, as well as the FHIP 
process, to ensure that there is a new and increased emphasis 
on mortgage lending discrimination.
    Ms. Velazquez. Thank you, Ms. Chairwoman.
    Chairman Kelly. Thank you very much. I would like a bit of 
clarification, Mr. Marcus. You did this study referred to, that 
Ms. Velazquez referred to, on page 2 in your testimony, with 
regard to blacks and Hispanics and mortgage lending.
    What emphasis are you placing on people with disabilities? 
Have you done a similar study with that?
    Mr. Marcus. We have not done a similar study in the past. 
And I don't think that there is a similar study that has been 
done in the past, but we believe that there needs to be one.
    And so, for the first time, we will be commissioning a 
nationwide, very rigorous study of discrimination against 
persons with disability including failure to make reasonable 
accommodations which will be a part of the HDS or housing 
discrimination study that had begun in prior years, but which 
will only now reach the question of discrimination against 
persons with disabilities.
    Chairman Kelly. And when do you expect that study to be 
done? You are going to field it at what--can you give me some 
time parameters?
    Mr. Marcus. It will start later in this year, and we expect 
to have results during the next fiscal year.
    Chairman Kelly. Thank you. Perhaps, we can pursue it a 
little further and get it moved up more quickly. I turn now to 
Mr. Tiberi.
    Mr. Tiberi. Thank you, Madam Chair. Just one question to--
one question. Well, I apologize for coming in late and not 
hearing your testimony, had an opportunity to review it. And in 
reviewing it, you mentioned the issue of the disabled. I am 
going to read back to you a letter that was sent to Secretary 
Martinez on March 5th of 2002, by Jeffrey Rosen, on behalf of 
the National Council of Disability.
    In the third paragraph I quote, ``Leaving the February 
meeting, however, many attendees shared with me their 
convictions that outside of the modest initiatives described by 
Deputy Assistant Secretary Kenneth Marcus, HUD has done little 
to develop a strategic plan to address the housing needs of 
people with disabilities. Although the meeting was styled as a 
listening session, there was frustration expressed by the 
participants about the lack of substantive responses by HUD. 
Too many longstanding concerns expressed at the meeting. Since 
several had traveled long distance, a great personal expense, 
they set high expectations for any outcome. There was no 
articulation at this meeting of further information since then 
about how its plan for meeting follow-up, action.''
    Mr. Marcus, can you tell us today in June, where we are, 
where HUD is, in terms of this issue?
    Mr. Marcus. Well, I think that there are a number of 
different disability issues that are involved in the concern 
that Mr. Rosen raised. I will tell you that there is no set of 
issues that has received greater attention within the Office of 
Fair Housing than this set of issues involving persons with 
disabilities.
    I believe we were able at the time of that meeting to 
discuss with Mr. Rosen the progress that we had made in the 
District of Columbia with our compliance review there. As I 
recall, we might not yet have been able to disclose to him the 
success, which we shortly after were able to achieve, in terms 
of dealing with the Boston Housing Authority.
    Over the course of the year, we will complete 80 compliance 
reviews under Section 504 of the Rehabilitation Act, which will 
be an increase of one-third over last year's. We have started a 
number of those reviews since we saw Mr. Rosen, and we will 
complete a substantial addition of other ones afterward as 
well.
    I believe that since then we have also published a series 
of initiatives that we would be doing in connection with the 
Olmstead issue. President Bush has also outlined initiatives in 
connection with the new freedom initiative. I have met with 
other disability groups individually since then.
    I have also met with some groups in connection with larger 
meetings that we have. And we certainly look forward to having 
other meetings to hear other concerns and to work for or with 
them in the future.
    Mr. Tiberi. Just one follow-up. Do you find that there is 
some difficulty in trying to get your HUD regional offices to 
exercise directives equally, officially?
    Mr. Marcus. Well, I will say this. There has been, over the 
years, a tendency to have either greater devolution to the 
field, or greater control by headquarters. Over the last few 
years, both during this administration and the prior 
administration, I would say we have had a greater degree of 
decentralization.
    That has had both advantages and disadvantages. The 
advantages have included a greater degree of work being done by 
the people who have knowledge of the specific local conditions, 
which I believe has been very important for some of these 
successes we have achieved.
    On the other hand, one of the down sides is that it is more 
difficult to achieve consistency and standardization both in 
quality and in the outcome of what they do in the field.
    Now, to the extent that we continue in that direction, and 
I think that we have had very favorable gains so far from 
moving in that direction, what I think we need to do is be more 
creative in the way in which we conduct headquarters review and 
oversight of what is being done in the field.
    We have implemented various procedures along those lines 
and will continue to. And I think that as we continue with that 
oversight, we will be able to deal with the disadvantages, 
while at the same time receiving the advantages.
    Mr. Tiberi. Thank you. I yield back the balance.
    Chairman Kelly. Thank you, Mr. Tiberi. We go now to Ms. 
Tubbs-Jones.
    Mrs. Jones of Ohio. Thank you, Madam Chairwoman. I would 
like to thank my colleagues for allowing me to question early 
because I have another committee meeting to get to.
    I, for the record, want to say that Doug Shelby, my HUD 
community partner, is doing one heck of a job in the city of 
Cleveland. So when you talk to him tell him his Congresswoman 
spoke highly of him.
    We were very pleased very recently to break ground on Arbor 
Village Apartments--did I skip you, Mr. Gutierrez--OK--to break 
ground on Arbor Village Apartments, which is affordable rental 
housing in the city of Cleveland, with up to four bedrooms for 
families. So we are real excited about that opportunity.
    Let me understand what you--I am a former trial lawyer with 
the Equal Employment Opportunity Commission. And so, this term 
of ``aged-case resolution,'' means is of significance to me. 
When you--what does aged-case resolution for HUD mean?
    Mr. Marcus. Under Title VIII, it means that we are 
required, unless impracticable, to complete the processing of a 
Title VIII complaint within 100 days.
    Mrs. Jones of Ohio. OK. So assume you come in as the new 
General Secre--General Deputy--excuse me for not knowing all of 
these names.
    Mr. Marcus. It is a mouthful.
    Mrs. Jones of Ohio. It is--a Secretary of Fair Housing. And 
you 700 case--well, let me say 50 just for example. Does 
someone then take those 50 and review them if they are past 100 
days, and figure out we are going to--how you are going to 
handle these, or what happens?
    Mr. Marcus. Well, there are, Congresswoman, in my view, two 
parts to the problem. One is managing new cases to prevent them 
from becoming aged; and the other part of it is dealing with 
those cases that are already aged; and, in particular, those 
which are super aged, which is to say, over 1 year old, to make 
sure that we are addressing the older cases.
    Mrs. Jones of Ohio. Well, let's talk about not the ones 
coming in. Let's talk about those that are already there. What 
do you do?
    Mr. Marcus. From the manager's point of view, the first 
thing that you do is survey the problem and develop a set of 
objectives and procedures for managers in the field to deal 
with these problems.
    You come up with goals and timetables for how many you feel 
that it is appropriate to achieve in a particular year, and how 
many people you want to do it; and then you develop a series of 
procedures to assist managers in doing so, which may include, 
and have included, specific task forces----
    Mrs. Jones of Ohio. Hold on, Mr. Marcus. I don't mean to 
cut you off. All of that sounds wonderful. And I have been 
there, as a trial lawyer, and had all of these edicts come down 
from Washington about how you resolve cases. But to Mrs. Jones, 
who is sitting out there with a complaint that has been sitting 
over 100 days or a year, none of that has any real meaning to 
her.
    And I guess really what I want to say to you and the people 
who are within your department, that regardless of these 
wonderful things we can put out there, the most important thing 
that we can do for these folks is to see that their cases see 
the light of day, and that they get some just resolution.
    And I am going to cut that off because I only have 5 
minutes. I want to ask you about something else.
    You are saying on page 3 of your report, bottom 2-3, that 
you will provide a contract for an enforcement project that 
targets mortgage lending discrimination and predatory lending 
in particular; and you would place special emphasis on 
educating and enforcing, and that you are going to do contracts 
to people to do that kind of work.
    I would hope that in the RFP's that you put out for that 
work, that in there is included something to allow neighborhood 
input. Because, very often, there are organizations that 
represent or even bid to the Federal Government that they are 
capable of doing XYZ work, and the community people actually 
have worked with those organizations.
    And I am not saying they should totally be able to nix, but 
you ought to have some type of input as to their reputation in 
the community for doing the work. Could you let me know whether 
or not that is something that could be included in your RFP for 
work in communities across the country?
    Mr. Marcus. Sure. What I can say, to start with, is that we 
do share that concern. And when we work with fair housing 
initiative programs through our NOFA, or Notice of Funds 
Availability, one of the considerations that we have is whether 
an organization has support and a strong reputation within the 
community.
    So it is something that is built into the program by which 
we usually distribute funds. As for whether there are any 
problems or not with an RFP in doing that, I don't know. But it 
is certainly something we will consider because it is already 
one of the factors that we do keep in mind.
    Mrs. Jones of Ohio. What else are you doing in this same 
area with regard to predatory lending, sir?
    Mr. Marcus. We----
    Mrs. Jones of Ohio. I am out of time. I am sorry. Am I out 
of time? Real quick.
    Mr. Marcus. We have just done some training on that subject 
during a policy conference earlier in this month to try and 
bring our partners up to speed on it. We are emphasizing it 
through our FHIP NOFA, and we have the contract.
    Chairman Kelly. Thank you, Ms. Tubbs-Jones.
    Mrs. Jones of Ohio. Thank you, Madam Chairwoman. And, Mr. 
Gutierrez, if I stepped in your way, I absolutely do apologize.
    Chairman Kelly. Thank you, Ms. Tubbs-Jones. Mr. Gutierrez.
    Mr. Gutierrez. Thank you. I understand that Hope in their 
Wheaton office filed 21 complaints with HUD from Elgin 
homeowners, landlords, and tenants who have been the victims of 
a targeted campaign of civil and constitutional rights.
    Did you receive those complaints?
    Mr. Marcus. I am familiar with those complaints. We do have 
those.
    Mr. Gutierrez. And did you evaluate those complaints?
    Mr. Marcus. We have evaluated the Elgin complaints over a 
period of--it has now been years, as has the Department of 
Justice.
    Mr. Gutierrez. And what is the result of the evaluation of 
those complaints? Were they substantiated, or did you think 
they were frivolous?
    Mr. Marcus. We are now in a--fairly far along in a process 
of----
    Mr. Gutierrez. Have you made any findings on the 21 
complaints?
    Mr. Marcus. We did make a referral to the Department of 
Justice. We found that there was cause to refer the case for a 
suit, yes.
    Mr. Gutierrez. For suit, to the Department of Justice. And 
where is that case at now?
    Mr. Marcus. The case is now being conciliated. And there 
have been fairly active settlement discussions undergoing--not 
only within the last several months----
    Mr. Gutierrez. Are you involved in those settlement 
discussions?
    Mr. Marcus. Not personally, but I have kept----
    Mr. Gutierrez. Is HUD involved in those settlements?
    Mr. Marcus. HUD is involved in it, and they have been----
    Mr. Gutierrez. And what is the position of HUD in the 
settlement discussions.
    Mr. Marcus. If we can get an appropriate outcome, we 
believe that a mutually agreeable resolution would be good for 
everyone. But until we actually have one, or don't have one, I 
cannot really say. But it is something that is moving along 
very quickly, and does have a lot of attention. And some of our 
very----
    Mr. Gutierrez. When do you think it will be resolved?
    Mr. Marcus. That is up to the parties. I understand there 
is a----
    Mr. Gutierrez. You don't have any further role in this 
issue, other than to refer it to the Department of Justice?
    And you feel as though now that it has been referred to the 
Department of Justice, you don't have any relationship to the 
situation?
    Mr. Marcus. Well, I would not say that, Congressman. Since 
it is a zoning and land use case, we do not have the same 
degree of involvement that we would----
    Mr. Gutierrez. Well, not a zoning and--I don't think you 
are going to get involved in a landing and zoning issue. You 
are going to get involved because people may have used land and 
zoning issues to discriminate against a particular racial or 
ethnic group. So it is really about using these things.
    Mr. Marcus. I would say it is both of those. But where it 
is about that set of issues, we refer to the Department of 
Justice. Now just because we referred the case to the 
Department of Justice, that does not mean that we are not 
involved. And we have been very much involved in the question 
of whether it can be settled.
    Mr. Gutierrez. What are you going to do to resolve this 
issue, or what is the Department of HUD going to do to resolve 
this issue?
    Are you just going to let Justice continue to discuss it, 
and to try to find a solution to it?
    Mr. Marcus. I am hopeful that there may be a resolution of 
this very soon.
    Mr. Gutierrez. OK. I guess I am hopeful, too. So we each 
share the same hopefulness. I guess what are we going to do so 
that it gets done?
    Mr. Marcus. We have had people working very long, hard, 
intense hours.
    Mr. Gutierrez. How long do you think it is going to take 
before it gets resolved? Do you have any sense of----
    Mr. Marcus. I don't know for sure, but there is a city 
council meeting tomorrow.
    Mr. Gutierrez. There is a meeting tomorrow?
    Mr. Marcus. There is a city council meeting tomorrow. That 
is one possible date. But I don't want to say for sure 
because----
    Mr. Gutierrez. You mean the city council of the city, 
Elgin, the same one you found that discriminated against the 
families?
    Mr. Marcus. Yes.
    Mr. Gutierrez. We are going to let them be the determining 
factor in how this thing gets settled?
    Mr. Marcus. All of the parties have been involved. And I 
can tell you that we have some of our most senior, talented 
people in the Chicago region who have been working to try and 
make sure that is a resolution that will solve this problem and 
help the families.
    Mr. Gutierrez. I want to help the families, too. But, as 
you say, it has been going on for years, and we need to settle 
this situation so that it doesn't continue, whether in Elgin--
because you know that there are other suits, Moline and other 
municipalities, in the state of Illinois that are also--
everybody is awaiting the outcome of this one.
    So I would suggest that we get on it, so that we can make 
this--because I heard you speak to a timely fashion and how 
that that is very important in your administration. Well, I 
think it should be also important that once you have a finding 
of discrimination, that that also gets settled.
    Because simply saying that somebody got discriminated 
against, and saying we found that discrimination, and letting 
it move on without a solution, is not really a solution to the 
discrimination.
    Let me ask, since time is going to be a matter of essence 
here, how many current complaints do you have before HUD?
    Mr. Marcus. Let me answer. But before I answer that, let me 
make sure that I did not create confusion in my answer to your 
prior question.
    When we made the referral to the Department of Justice in 
the Elgin matter, it was not predicated upon a finding of 
discrimination. Because the way the procedure works with the 
referral in matters of this kind, we don't make that 
affirmative finding at that time.
    But that was just a clarification. The question, I am 
sorry, is how many complaints we have?
    Mr. Gutierrez. So you are saying that HUD never found that 
there was discrimination in this matter, and simply referred 
the case to Justice with no determination?
    Do you refer all of your cases with complaints to the 
Department of Justice?
    Mr. Marcus. We have different procedures, depending on the 
type of case.
    Mr. Gutierrez. What did you find relevant in these 21 
complaints that would compel you to send it to the Department 
of Justice when you do not send all cases to the Department of 
Justice?
    Mr. Marcus. What was relevant under the statute was that it 
fell under the general rubric of land use and zoning, and that 
we would not be able to make a finding that there had been 
discrimination at HUD. It was the Department of Justice would 
have to either make that finding.
    Mr. Gutierrez. Did they find one?
    Mr. Marcus. Their process is to file suit when they find 
it, and they have not yet filed suit. And there is a question 
of whether it will be settled prior to that.
    Mr. Gutierrez. So, in other words, no one has really found 
in this administration after 18 months that there has been any 
discrimination on these 21 complaints--either HUD or the 
Department of Justice?
    Mr. Marcus. Well, it is not just this department. The 
process is either to file the case or to engage in the 
settlement discussions. And what has been going on has been the 
settlement discussions, which we hope will resolve the matter 
favorably for everyone.
    Mr. Gutierrez. All right.
    Chairman Kelly. Thank you very much.
    Ms. Lee.
    Ms. Lee. Thank you, Madam Chair. Let me ask Mr. Marcus a 
couple of questions with regard to your response to the Chair, 
as it relates to many people who actually left HUD who were 
responsible for the enforcement of fair housing laws.
    You indicated that there were many talented and experienced 
people, who, for whatever reason, are not there now. I would 
like to get a sense of what that is about. Why aren't they 
there and what happened? I mean, were they civil servants? Were 
they Schedule C, or why did they leave? Was it as a result of 
reorganization, or just--could you, you know, elaborate a bit 
on that?
    Mr. Marcus. Well, I am referring to career people, rather 
than Schedule C. And while I am sure, since there were so many, 
that there were a large variety of reasons, and while I was not 
personally there at the time, I have certainly heard many 
stories of frustration and dissatisfaction with the way things 
were going in the last few years and a lot of people concerned 
about the way the Department was going, and retiring perhaps a 
little bit earlier, or just leaving for greener pastures. Our 
concern is not so much to find out in each case why people 
left, but to find a way to keep good people committed to what 
we are doing and to make sure we make the best use that we can 
of our existing resources.
    Ms. Lee. But has the enforcement of our fair housing laws 
and EEO laws, has that been a problem, as a result of the 
turnover, or do the backlogs and complaints reflect any 
staffing issues? And what is your staffing pattern like now?
    Mr. Marcus. Well, I can tell you there have been findings 
of various organizations including the National Council of 
Disability which do connect matters such as the aged-case 
backlog to the reduction in staffing numbers, and to the loss 
of talented staff.
    We have found that we have substantial problems as a result 
of the turnover and the loss of experienced people. And I think 
that that is undoubtedly connected with some of the problems 
that we have.
    I am sorry. The follow-up question?
    Ms. Lee. Your current staffing patterns, I mean, are you 
fully staffed now, or what do you think has been your 
direction, in terms of----
    Mr. Marcus. We are certainly better staffed than we were 
last year, and last year we were better staffed than the year 
before.
    In 1999, we had over 590 people. That slipped a little. In 
2000, it was 587. It was at a little over 600 in 2001. When you 
exclude the Office of Departmental Equal Employment 
Opportunity, which was merged into us last year, we now have I 
believe approximately 610, who are within FHEO right now, plus 
another couple of dozen people who are assigned to us, but have 
not formally joined us. So I would say we have a couple dozen 
beyond what we had before.
    Ms. Lee. OK. And, now, could you, at some point, give us an 
ethnic breakdown of your employees, and also who are 
responsible for the enforcement of fair housing laws?
    And also, this Office of Disability, is that up and 
running, or do you have that fully staffed? Is it there? Is it 
not there? I hear different----
    Mr. Marcus. We have a disability office within the Office 
of Fair Housing and Equal Opportunity, which is staffed by some 
extraordinary people. And since you have given me the 
opportunity, perhaps I could recognize the director, Milton 
Turner, of that office, who is here. We are staffed with a 
number of very committed people there, who are doing great 
work.
    Ms. Lee. Great, OK. And you will be able to provide us the 
ethnic breakdown of your--ethnic agenda breakdown of the 
employees?
    Mr. Marcus. We will be able to provide that.
    Ms. Lee. Thank you very much.
    Chairman Kelly. Thank you, Ms. Lee. We go to Mr. Clay.
    Mr. Clay. Thank you, Madam Chair. I appreciate the 
opportunity to have this hearing today. We are facing a 
tremendous problem of fair housing complaints filed by people 
with disabilities, African-Americans, Hispanics, Asians, and 
women. And in 2000, there were in excess of 23,000 complaints 
filed.
    The National Fair Housing Alliance reported that the 
complaints are highest among African-Americans, people with 
disabilities, and families with children. And, Madam Chair, I 
would like to ask unanimous consent to submit my entire 
statement to the record. Thank you.
    [The prepared statement of Hon. William Lacy Clay can be 
found on page 59 in the appendix.]
    Let me ask you, Mr. Marcus. Is there an Acting Assistant 
Secretary for Fair Housing and Equal Opportunity?
    Mr. Marcus. I am the General Deputy Assistant Secretary. 
And I am serving in the function of the assistant secretary for 
most purposes.
    Mr. Clay. So you are handling the responsibility of the 
Assistant Secretary?
    Mr. Marcus. Yes, Congressman.
    Mr. Clay. And has this vacancy affected the manner in which 
HUD ensures compliance in enforcing fair housing laws?
    Mr. Marcus. We have worked as hard, and I would like to 
think as effectively, in the absence of a Senate-confirmed 
assistant secretary. As we would under any other circumstances, 
we have, aside from that person, the other 630-some-odd 
employees who continue to work very hard to achieve our mission 
goals.
    Mr. Clay. How about the disparity between the amounts of 
complaints handled by private and government agencies?
    Mr. Marcus. That is difficult to compare--in part because 
the term ``complaint'' is defined differently by different 
organizations. So, to some extent, we are dealing with apples 
and oranges.
    However, I am certainly pleased to see that so many matters 
are being handled by private organizations. Many of the 
organizations are being funded by HUD, some of them are not.
    To the extent that these organizations are working with us, 
whether they are receiving our funds are not, we certainly 
encourage them to file complaints with HUD, so that we can 
utilize the resources that we have to solve the problems that 
they identify.
    Mr. Clay. Twice as many private agencies handle these 
complaints, as opposed to HUD and stage agencies. I mean what 
is the reason for that?
    Mr. Marcus. Again, it is hard to break down the numbers 
exactly because the term ``complaint'' is defined differently. 
I think that many of the matters that are identified by the 
private organizations will later be brought to HUD or state 
agencies; others they will not bring to us for a variety of 
reasons including if they don't pan out.
    I think that certainly those private agencies involved in 
our FHIP program serve a very valuable function when they find 
a very large number of potential claims and bring to us those 
which they believe truly to be actionable.
    I also believe that private organizations in many cases 
have greater ties to the community; and, in some cases, greater 
levels of trust within some communities, and are able to reach 
out a little bit more effectively to communities. But that is 
one of the reasons that we like to work with them.
    Mr. Clay. I see. The administration has made a number of 
public pronouncements about its commitment to the rights of 
people with disabilities, and I commend you and the Secretary 
for that commitment.
    Does the administration intend to dedicate more mainstream 
housing resources to people with disabilities?
    Mr. Marcus. I can tell you, speaking as acting head of the 
Office of Fair Housing and Equal Opportunity, that we intend to 
work to make sure that more mainstream inaccessible housing 
that is noncompliant is brought into compliance.
    And we are making sure that through the discrimination 
side, that we are working to try and bring a greater number 
of--what you might call mainstream housing into availability 
and into compliance.
    Mr. Clay. And does that include new housing coming on line, 
new units coming on line?
    Mr. Marcus. Yes, we are working in a number of different 
ways to try and make sure that new units are accessible. When 
that comes to public housing it involves, for instance, 
providing notices to all public housing authorities of the 
requirements under the Rehabilitation Act to provide accessible 
features.
    When it involves private housing, it can come in the form 
of a number of initiatives that we have to try and make sure 
that new housing is accessible for persons with disabilities.
    That includes, for instance, working with the International 
Code Council to try and ensure that local governments around 
the country are aware of the Fair Housing Act requirements, and 
to the extent that they choose to, can incorporate our 
requirements into their codes.
    It also involves a variety of education initiatives that we 
try and ensure that architects, builders, and other development 
professionals are aware of, and what their requirements are, so 
that they can build new compliant housing.
    Mr. Clay. What steps, if any, has the Secretary taken to 
appoint a National Consumer Advisory Committee, as called for 
by the National Council on Disability report?
    Mr. Marcus. There have been a number of discussions about 
what is the best way to gain access to the views of disabled 
persons and disabled advocacy groups.
    What we have been doing so far has largely been a series of 
informal meetings including, in some cases, very regular staff 
meetings and contacts with disabled people, as well as more 
formalized meetings to get their views.
    There has been some discussion about whether an advisory 
group under that statute would be appropriate. It would have 
some advantages, some disadvantages, some questions about who 
the appropriate membership is, who is excluded, who is 
included, so on, and so forth.
    My concern has been to try and ensure that we have the 
greatest possible number of views that we are hearing, so that 
we are not just getting the views of only a small number of 
people.
    Mr. Clay. So you will not assemble a commission?
    Mr. Marcus. I don't want to close the door to that option. 
We certainly have not committed to it yet. And our approach, at 
this point, has been to try to work informally, and to the 
greatest extent possible, to try and get all of the groups that 
have concerns, and who would like to speak to us, to do so, 
rather than limiting it to specified finite number of 
commission members.
    Mr. Clay. All right. Thank you.
    Chairman Kelly. Thank you, Mr. Clay.
    We go now to Ms. Waters.
    Ms. Waters. Well, thank you very much, Madam Chairlady. I 
would like to submit my opening remarks.
    Chairman Kelly. So moved.
    [The prepared statement of Hon. Maxine Waters can be found 
on page 75 in the appendix.]
    Ms. Waters. Thank you very much. I hear my colleagues 
asking a lot about the complaints that are filed, and talking 
about the need for more housing, and certainly the need to make 
sure that the disabled are included in the construction and 
rehab in ways that will accommodate them.
    And, of course, we all have questions about predatory 
lending. And we cannot help but wonder to what extent the 
predatory lending practices of our financial services community 
is eliminating the ability for people to have adequate fair and 
decent housing.
    With all of that, let me just ask. The President rolled out 
an initiative. And the intent of that initiative, as I 
understand it, was to increase the number of housing units 
available because of the crisis that we have; to support 
minorities and the disabled, and their ability to access safe 
and decent housing; and all of that.
    I have not heard the particulars of this initiative. Could 
you explain to us what the President and this administration is 
going to do to expand the housing units that are available, and 
to make sure that they are accessible to minorities and the 
handicapped? How do you do that?
    Mr. Marcus. That is a big question, which has received--we 
are glad to observe, a great deal of attention first from the 
White House, and from the Secretary; and then increasingly 
through the media during this June month of home ownership.
    Within the Office of Fair Housing and Equal Opportunity, we 
deal with one portion of the larger problem. I can tell you 
that throughout the Department, virtually every program area is 
involved in the question of how can we make home ownership 
available to a greater number of people in general; and then, 
specifically, how can we close what is referred to as the 
minority home ownership gap.
    Our portion within the Office of Fair Housing and Equal 
Opportunity has been to find out to what extent has the lack of 
home ownership, and, particularly, that home ownership gap been 
the result of discrimination?
    And to the extent that it has been, how can we use the 
tools that have been legislatively afforded to us in order to 
try and break down those obstacles to home ownership which are 
associated with discrimination?
    And we have focused on that from the discrimination point 
of view in a number of ways. The first has been to determine 
how can we increase public trust and confidence in our 
complaint procedure, so that when people face discrimination, 
they will come to us.
    And that has led to the reforms that we are trying to work 
on involving aged-case processing that I have talked about. We 
are also concerned that the lending process might be a barrier 
to home ownership.
    Ms. Waters. If I may just interrupt you for a moment, let 
me refer you to--I guess this is your statement for today--
where on page 2, you say the study that you have been involved 
in reveal that while the majority of mortgage lending 
transactions do not involve discrimination, blacks and 
Hispanics in the markets studied tended to receive less 
information, less assistance, and worst terms.
    Let's see if we can't get in sync on what discrimination--a 
definition of discrimination. What do you mean that the lending 
transactions do not involve discrimination, and then you go on 
to describe other forms of discrimination?
    So I want to make sure that we have kind of a same 
definition of discrimination.
    Mr. Marcus. Let me apologize again for what might be some 
lack of clarity in this sentence.
    What we tried to do in this study is to ask what happens 
when caucasians, African-Americans, and Hispanics in Chicago 
and Los Angeles go to lending officers and various financial 
institutions seeking a loan.
    And what we found is looking under any number of different 
specific criteria, most Hispanics and African-Americans 
received initially the same assistance, information, and terms 
and conditions in the loans that were offered to them, as the 
caucasians did. There was no way of determining any difference.
    However, while most people did not face discrimination, we 
did find that there was a statistically significant percentage 
of both African-Americans and Hispanics in both of those cities 
who did receive either less information about loans, or else 
they got the same information but they got less assistance; or 
if they got the same assistance, they received worse loan 
terms.
    Now, on the one hand, we are concerned that the information 
not be taken out of context because we want to make sure that 
people do not avoid mainstream lending institutions for fear of 
discrimination and end up in predatory lending situations.
    But, on the other hand, even though most people did not 
face disparate treatment, we are very concerned that there are 
some----
    Ms. Waters. Do you have any numbers? Do you have numbers on 
that portion which you identify as the ones that were 
discriminated against?
    Mr. Marcus. Yes, we would be happy to provide the study for 
you, if you would like. I don't have the numbers with me. I can 
say that it was significantly below half. But, on the other 
hand, it was enough that all of our experts agreed that it was 
statistically significant, and I can provide the details for 
you.
    Chairman Kelly. Thank you very much, Ms. Waters.
    Mr. Gutierrez, you have a point of clarification here?
    Mr. Gutierrez. Yes, just the same--the way you had one on 
disability, I have one on discrimination. Sorry, I don't--and 
forgive me.
    If you get worse terms, if you get less information, that 
is not discrimination. Let me just finish. First, you state it 
is not discrimination; and then when I asked you about Elgin, 
there were 21 complaints made, you said that was a zoning and 
land use.
    So if I use zoning and land use against a particular group 
of people--in the case of Elgin, latinos--it is a zoning and 
land use, it is not a discrimination issue. It doesn't--I am 
sorry--any one of those things that you use that are targeted 
to a particular group of people, as far as I am concerned, 
would be discrimination.
    Because if I show up in a wheelchair, and you say I 
discriminated because I did not like the model of the 
wheelchair, not that the person was disabled, and that you 
found that models of wheelchair people get a certain--it just--
I think we had better clarify what discrimination constitutes.
    Mr. Marcus. Sure. I don't think we have any real difference 
of agreement. Where it is difference in assistance, whether it 
is difference in information, whether it is difference in 
terms, I consider any of that to be discrimination.
    And even if most people don't face it, we at HUD are very 
concerned about it. And since we found that it appeared that 
some people did get either less information, or less 
assistance, or less of anything, we considered that as 
discrimination. And that is why we are going to focus in on it.
    Now I don't think that it is any less discrimination if it 
takes place in a zoning area than if it takes place anywhere 
else. It is just that under the statute, HUD is not supposed to 
make that finding, the Department of Justice is. So it is not a 
question of whether it is discrimination or not, it is a 
question of who has the statutory authority to make the 
finding.
    Chairman Kelly. Thank you very much, Mr. Marcus.
    Mr. Marcus. Thank you.
    Chairman Kelly. Mr. Gutierrez and Ms. Waters have both 
raised the same issue that came forward in my mind when I read 
your testimony; and that is the definition of discrimination. 
At this point, it seems to be very fluid.
    I am wondering if there isn't some way we could ask you to 
get together with the Department of Justice and sort of give us 
all some kind of definition of how you are--how you, in your 
department, your agency are going to handle the question of 
what defines discrimination.
    Because, as Mr. Gutierrez says, if somebody appears in a 
wheelchair, but they are discriminated against because that 
model wheelchair isn't approved of for one reason or another, 
is that--does that qualify, or does the color of somebody's 
skin qualify?
    I think this is a very, very important issue. And, 
obviously, it is a bipartisan concern. So, perhaps, you would 
be willing to do that for us.
    Mr. Marcus. We will be happy to talk to the Department of 
Justice on that.
    Chairman Kelly. Thank you. And I hope you will get back to 
us.
    Mr. Marcus. Yes.
    Chairman Kelly. Thank you very much. The Chair notes that 
some members may have additional questions for you, Mr. Marcus. 
They may wish to submit those in writing. So, without 
objection, the hearing record will be held open for 30 days for 
members to submit written questions to you.
    And we would like to have you place that response in the 
record. And if you can respond to some of the issues that Mr. 
Gutierrez and I just raised, I would appreciate that.
    We will excuse Mr. Marcus, with our great appreciation. 
Thank you very much.
    Mr. Marcus. Thank you.
    Chairman Kelly. And, at this time, we would like to call 
for the second panel of witnesses. As the second panel takes 
their seats at the witness table, I am going to begin the 
introductions.
    For our second panel, we welcome Ms. Sara Pratt, a Civil 
Rights and Fair Housing Consultant, on behalf of the National 
Council on Disability; and Ms. Becca Vaughn, Topeka Independent 
Living Resource Center Advocacy Coordinator; on behalf of 
Disability Rights Action Coalition for Housing.
    I want to thank each of you for being here and testifying 
for us today. And I welcome you on behalf of the full 
committee. Without objection, your written statements and any 
attachments that you have brought will be made part of the 
record.
    And, at this time, I want to insert as a part of the 
record, with unanimous consent, a statement from the United 
States Department of Agriculture, sent to Chairman Roukema, who 
is the co-chairman of this hearing today.
    [The following information can be found on page 166 in the 
appendix.]
    Chairman Kelly. But, without objection, your statements are 
a part of the record, and you will each now be recognized for a 
5-minute summary of your testimony. Thank you very much. And we 
will begin with you, Ms. Pratt.
    Pull, if you could, Ms. Pratt, just make sure----
    Ms. Pratt. Can you hear me?
    Chairman Kelly. Yes, we can. Thank you.

   STATEMENT OF SARA K. PRATT, CIVIL RIGHTS AND FAIR HOUSING 
   CONSULTANT ON BEHALF OF THE NATIONAL COUNCIL ON DISABILITY

    Ms. Pratt. Chairwoman Kelly, and ranking member Gutierrez, 
and other members of the committee, thank you so much for the 
privilege of allowing me to testify before you today.
    As you have heard, I am testifying on behalf of the 
National Council on Disability. It will come as no surprise to 
committee members that illegal discrimination is alive and 
well, and actively occurring today in our country's cities and 
towns.
    It occurs in rural areas, and in urban areas; it occurs 
wherever apartments are rented, wherever houses are sold, 
wherever loans are made, and wherever people who look a little 
different move into new neighborhoods. Discrimination is as 
active in programs funded by the Federal Government as it is in 
private housing.
    Many observers would say that discrimination is more likely 
to occur in programs funded by the Federal Government, 
especially when the discrimination is directed at people with 
disabilities and minorities who make up disproportionate 
numbers of the poor, the underhoused, and the homeless in our 
country, those who are most likely to seek housing from public 
housing authorities and assisted housing providers.
    I am one of three authors of a report issued by the 
National Council on Disability last November, a report called 
``Reconstructing Fair Housing.'' That report documents 11 years 
of enforcement of two major civil rights laws entrusted to HUD 
for enforcement by Congress.
    One law, the Federal Fair Housing Act, applies to almost 
all housing related transactions in this country. The other, 
Section 504 of the 1973 Rehabilitation Act, prohibits 
discrimination based on disability by housing that is funded by 
Federal dollars, in this case, from HUD.
    These laws provide two critical pieces to protect people 
who are injured by illegal discrimination. One is, as 
guaranteed by the Fair Housing Act, inexpensive and speedy 
resolution of their claims through administrative enforcement 
by HUD with full remedies where discrimination is identified.
    And, second, HUD initiated action to protect people 
proactively. Separate from a complaint investigation process, 
they are requiring compliance by its programs with 
nondiscrimination requirements.
    The National Council on Disabilities Report concludes that 
HUD has not funded or supported a strong effective functional 
system to administer either part of this process. This failure 
has resulted in an increasing loss of faith in the complaint 
process, a sense that filing a complaint does not really make a 
difference.
    It has also resulted in something just as important, harm 
to victims of discrimination, who do not know about their 
rights, who are not protected by HUD even in its own programs 
and activities, who are not protected by a timely and effective 
enforcement process, and who thereby suffer discrimination 
without recourse.
    The National Council on Disabilities report concludes that 
the Department of Housing and Urban Development must do much 
more to address unlawful discrimination by housing providers.
    In summary, the report identifies three important ways in 
which that should be done. First, the Secretary of HUD and the 
political leadership of the department must lead the department 
in a top-down and bottom-up coordinated commitment to 
preventing illegal discrimination, and righting the wrong 
wherever discrimination has occurred.
    This includes an organized civil rights enforcement program 
that has long-term and short-term goals, that has a strategy 
and a rationale that is coordinated with HUD's program offices, 
and that includes strong, consistent, and speedy enforcement by 
program and fair housing staff jointly; that is to say, between 
public housing authority, PIH staff, and fair housing staff 
jointly between housing staff and fair housing staff jointly, 
and so forth.
    HUD should use program sanctions, like refusing to fund 
discriminators, and like debarment, routinely, and frequently 
in cases involving discrimination by those who discriminate, 
and are funded by taxpayer money.
    Two, HUD must make a significant and sustained financial 
investment in enforcement of the Fair Housing Act, and the 
other civil rights enforced by HUD. HUD's Office of Fair 
Housing and Equal Opportunity must be resourced to help its 
committed staff do what must be done more effectively.
    This includes, specifically, HUD must increase its staffing 
of the Office of Fair Housing and Equal Opportunity to a 
minimum of 750 full-time equivalents, the staffing level at 
which FHEO operated most effectively in the mid-90's.
    HUD must provide more and consistent training for its 
staff, and for its funded programs, and HUD must significantly 
increase contract funds to support civil rights enforcement and 
compliance.
    In addition, HUD must support unequivocal, and unrelenting 
enforcement of the non-discrimination requirements of both 
Section 504, and the Fair Housing Act, for rental and home 
ownership housing including housing operated by HUD, the Hope 
VI program, the Home Program, the Section 8 Project base 
program.
    When compliance reviews conducted 13 years after the Fair 
Housing Amendments Act were passed, and after Section 504 
regulations were adopted, and units are still, in public 
housing authorities, not accessible to people with 
disabilities, and other significant issues of discrimination 
remain, HUD should be referring these matters to the Department 
of Justice for litigation. Thank you.
    [The prepared statement of Sara K. Pratt can be found on 
page 93 in the appendix.]
    Chairman Kelly. Thank you, Ms. Pratt.
    Ms. Vaughn.

 STATEMENT OF BECCA VAUGHN, TOPEKA INDEPENDENT LIVING RESOURCE 
CENTER ADVOCACY COORDINATOR ON BEHALF OF THE DISABILITY RIGHTS 
                  ACTION COALITION FOR HOUSING

    Ms. Vaughn. I found it easier than Sara. Thank you very 
much. I am honored to be here today to share our collective 
thoughts and experiences concerning fair housing; or, perhaps, 
I should say the lack of fair housing rights, and the blatant 
discrimination perpetuated against folks with disabilities.
    I have been working in the disability rights movement most 
of my life, and I particularly have an emphasis on housing. 
Most of the folks that I have served over the years are people 
not only with disabilities, but other protected status as well.
    So I just wanted to share that a little bit, and who I am. 
I am not merely concerned today. And I believe I have heard 
that from you all. I think that we are all outraged at some--at 
the horrendous discrimination that continues to just erode away 
at the core of our great nation.
    I have to interject quickly that often those very entities 
that have been entrusted with the enforcement of our fair 
housing rights, have been the ones violating them the most. And 
I share that from personal experience.
    I find that extremely difficult today, in that, we sat and 
we heard HUD talk about all of their wonderful commitments. 
And, yet, many people in this room, and you all yourselves, can 
sit here, and you know that it is just pretty words.
    There are people every day that are literally dying on the 
streets. They are becoming homeless because of lack of 
enforcement because we continue to fund programs that are 
segregated, because we continue to allow folks to ask 
prohibited inquiry questions and the nature or severity of 
disability.
    We continue to allow folks to be forced to accept services 
in order to get a roof, just a human basic right of a roof. All 
of these things, in DRACH's opinion, add up to equal status of 
lack of enforcement on denying Americans with disabilities 
equal opportunity in our country for housing of choice.
    We believe that there are many things that have to be 
addressed by this body if we are to truly achieve full 
integration and compliance. We believe that we must have full 
implementation of the Olmstead initiative. We must stop funding 
programs that perpetuate segregation on the basis of a specific 
diagnoses of disability.
    We believe that this body must, in fact, disallow programs 
that require a human to accept a service. And we must increase 
home ownership rates of folks with disabilities; currently, 
less than 2 percent is what we think. That is pretty pitiful.
    And we would like to see that these are addressed in a 
global arena, as opposed to segregated arena. And we have some 
specific recommendations. One of the most important I think is 
that because of the blatant non-compliance with our fair 
housing rights, we literally have been X'd out, or stepped 
out--let me correct myself--stepped out of the housing market 
through attitudes and through actual cement barriers.
    I think that we could begin to make a good progress in this 
country with the National Visitability initiative as well. That 
is why I would like to plant the seed with you today. 
Visitability is just what it says, the ability to visit our 
friends, family, and loved ones.
    It is currently law in five states in our country and 
numerous cities, and DRACH would recommend that we seriously 
consider possibly following up on this type of initiative. I 
think it works hand-in-hand with the enforcement that we are 
here today addressing. And that is probably about all I am 
going to say.
    I just really feel honored to be in your presence to share 
this information. I would love to spend more time talking about 
all of the cases that we have worked on over the years.
    And, hopefully, this is the beginning, that we can work 
together, a grass roots and the legislators, toward stopping 
this pattern of blatant discrimination that keeps Americans 
with disabilities separated. Thank you.
    [The prepared statement of Becca Vaughn can be found on 
page 154 in the appendix.]
    Chairman Kelly. Thank you, Ms. Vaughn. Certainly, if you 
would like to submit any further written material to the 
committee, we are more than willing to accept anything you 
would like to give us.
    Ms. Pratt, I understand that you worked on these issues at 
HUD in the prior administration, and then left, due to being 
dissatisfied with the efforts that the senior HUD management 
had made in this area.
    Can you discuss with us--I wonder if you will discuss that 
with us, and if you have seen more of an effort made by this 
current HUD leadership?
    Ms. Pratt. I resigned my position, a senior SES position at 
HUD, HUD's Office of Fair Housing and Equal Opportunity, in 
1999. There are three key reasons that I found problematic, as 
someone whose entire career has been devoted to administrative 
enforcement of fair housing and civil rights laws.
    First is the diminished staffing and resources for fair 
housing and civil rights enforcement in the beginning of 1995, 
and continuing thereon, that caused the necessity of running 
from one enforcement issue to the next, always trying to keep 
up without adequate resources to be able to address the many, 
many civil rights issues that HUD confronts.
    Second, my concern dealt with the devolution to field 
offices of significant decisionmaking authority without 
adequate oversight systems and guidance, a process which I 
think exacerbated some of the structural problems.
    And the third is the lack of top-down leadership that has 
to happen at HUD. The program offices, as well as the Office of 
Fair Housing and Equal Opportunity, have to share in a 
commitment to enforcement of the laws.
    I have to tell you that staffing numbers that I heard 
Deputy Assistant Secretary Marcus, who, by the way, I have a 
great deal of respect for, the numbers that he gave me on 
staffing of 610 full-time equivalents is way below what the 
National Council on Disability Report suggests is adequate 
funding for fair housing and civil rights enforcement.
    And that is a specific finding, that the most effective 
work that was done in fair housing in the last 11 years was 
during the period 1993 and 1994, where there was more staffing, 
more cases charged, more complaints filed, and complaints 
investigations occurred more quickly.
    Chairman Kelly. Thank you. Ms. Pratt, on page 4 of your 
testimony, you talk about the annual number of cause cases that 
dropped from 324 in 1994 to 96 in 2000. When I read that, I was 
just astonished at the lack of--96 only in 2000.
    What factor was the most significant in causing this?
    Ms. Pratt. I believe it was the lack of staffing and other 
financial resources for fair housing and civil rights 
enforcement at HUD. The National Council on Disabilities 
findings include a finding that there was a significant drop in 
the number of staff during that time period for fair housing 
enforcement and for compliance.
    In addition, there was a drop of $1.8 million during that 
time period in contract money that supported investigations, 
the kind of money you would use to do training, to hire expert 
witnesses, and so forth.
    Chairman Kelly. I just want to be clear. That is what you 
feel happened from 1994 to 2000; that it was a significant 
drop. And that is part of what you have, as I understood you 
correctly, what made you feel that you were seeking employment 
elsewhere. Is that fair to say?
    Ms. Pratt. What I have recited to you are among the 
findings of the Reconstructing Fair Housing Report. They also 
happen to be consistent with my own views of the process.
    Chairman Kelly. On page 4 of your testimony, 
``Underenforcement,'' you state that one of the factors that 
have attributed to enforcement failures is a recent lack of 
effective management of HUD's fair housing enforcement and 
compliance operations.
    When did these failures begin? And are we now seeing any 
improvement? And how long do you think it should take to 
correct some of these failures?
    Ms. Pratt. I believe that throughout the 11 years examined 
through the Reconstructing Fair Housing Report process, there 
were areas in which strong management processes were lacking. 
HUD undertook an evaluation of its own enforcement process in 
1995, through a study conducted by Price Waterhouse.
    Those recommendations which were designed to improve the 
effectiveness of fair housing enforcement were unfortunately 
not all implemented. In addition, the current administration's 
lack of issuance of guidance that will ensure consistent 
decisionmaking among regions appears to be a continuing problem 
that has not been addressed by this administration, and which 
began very significantly during the devolution process in the 
mid-'90's.
    Chairman Kelly. You are asking for more oversight, 
basically?
    Ms. Pratt. The National Council on Disabilities 
recommendations include development of stronger guidance 
systems, better technology systems, and more management 
oversight for more consistent and stronger outcomes nationally.
    Chairman Kelly. Thank you. I am out of time.
    Mr. Gutierrez.
    Mr. Gutierrez. Thank you both for being here. I guess I 
want to ask Ms. Vaughn. You said that certain types of people 
with disabilities that have certain medical conditions 
shouldn't be segregated.
    Are you specifically talking about people that are HIV 
positive or have AIDS, and the development of housing for them? 
And if that is a group, are there other groups like that?
    Ms. Vaughn. Yeah, I was not specifically talking about any 
of the groups, but there are many programs within HUD that 
continues to be funded, that do allow for targeted housing 
toward specific groups of folks. It could be spinal cord 
injury; it could be multiple sclerosis; it could be cerebral 
palsy; it could be HIV AIDS. I mean there is--MRDD, mental 
retardation.
    I mean there is several of the programs and mortgage 
guarantee programs that HUD does fund those type of projects; 
and, in DRACH's opinion, in direct violation of fair housing 
because we believe that that adds to the attitudinal barriers, 
as well as--you know, segregation is not a good thing in any 
form, we have found that out in this country.
    So we are not saying that the individuals that have AIDS, 
HIV, mental health issues, don't deserve housing. We are saying 
perhaps we need to look at a better way of adequate funding 
attached to the people, so that they and their support team can 
then make an informed choice and have the resources in place, 
you know, to find the best option.
    For example, most folks that I work with that have mental 
illness--or Tourette Syndrome would be another good example, 
are not able to live in a multi-family complex. It is not 
workable.
    So we tend to have a high rate of eviction. So there is a 
lot of homelessness because of that, so single family, detached 
units, is a preferred method. But the resources being attached 
to a building limits those opportunities for folks.
    Mr. Gutierrez. OK. Do you feel the same way, Ms. Pratt?
    Ms. Pratt. I think Congress, when it passed the HOFWA, a 
program in particular, said in the enabling legislation that 
any other provision of law, notwithstanding the HOFWA program, 
was allowed to serve particularly people with AIDS. So Congress 
made that decision.
    The difficulty comes not with congressional intent on 
particular matters, from my point of view, but on programmatic 
decisionmaking or interpretations made much further down the 
food chain at front line levels at HUD, or even in policies at 
HUD, as opposed to congressional determinations.
    Mr. Gutierrez. OK. And, Ms. Pratt, is HUD properly staffed 
at the current moment to deal with the complaints, and the 
discrimination that exist in housing in the United States of 
America?
    Ms. Pratt. Based on what Mr. Marcus earlier testified to, 
it is not.
    Mr. Gutierrez. And what would, in your opinion, be a 
correct amount of staff?
    Ms. Pratt. A minimum of 750 full-time equivalents.
    Mr. Gutierrez. Or another 140 people?
    Ms. Pratt. That is correct.
    Mr. Gutierrez. As an advocate for people with disabilities, 
are we--Mr. Marcus spoke when we--I know I believe we were 
asking him about how many--what they were doing in terms of--
and he said, ``Well, we are enforcing it. We are making sure 
that when public housing does this, or when somebody develops 
this''--in other words, we are telling people build homes with 
people for--that people with disabilities can use. That is what 
I heard him say. But I think the question was--and so I will 
ask you.
    Are there enough units being created currently, so that 
people with disabilities can find a unit?
    Ms. Pratt. Absolutely not.
    Mr. Gutierrez. And what would you suggest that we do?
    Ms. Pratt. Well, I would suggest, at the very least, that 
Congress invite HUD to take stronger enforcement efforts 
against public housing authorities, and assisted housing 
providers, who already have had on the books for 13 years 
obligations to provide accessible units.
    And housing authorities such as the Boston and D.C. housing 
authorities who now, 13 years later, have 10 or fewer 
accessible units in total non-compliance with the law should be 
the subject of stronger enforcement action than simple 
agreements to do better in the future.
    HUD should send a message to assisted and public housing 
providers, as it should send all of its programs, that people 
with disabilities and other people who are subject to 
discrimination need to be considered and treated in an 
appropriate way upfront in the programs and not excluded by 
making agreements with units with steps.
    Mr. Gutierrez. Let me ask you one last question. If in a 
municipality zoning and land use issues arose, and 21 people in 
wheelchairs, and in other conditions of disability were the 
only ones targeted by these zoning, and it was found that they 
are the only ones, is it a land--in your opinion, is it a land 
use and zoning issue, or is it a discrimination issue against 
people with disability?
    Ms. Pratt. Representative Gutierrez, it is a discrimination 
issue.
    Mr. Gutierrez. Thank you very much.
    Ms. Pratt. You are welcome.
    Chairman Kelly. Thank you. Ms. Lee.
    Ms. Lee. Thank you, Madam Chair. Let me just ask you a 
couple of things about a couple of points Mr. Marcus made, 
primarily in his written testimony. I am not sure if he 
presented this today verbally. But he indicated that the 
President in his new freedom initiative has launched an effort 
designed to help persons with disabilities live more 
independently in all communities.
    Do you have some feedback on this new freedom initiative, 
in terms of what you think that it will accomplish, and if it 
is going to take care of the needs of the disabled community?
    Ms. Pratt. I can't testify about that from the point of 
view of the National Council on Disability because that was not 
a subject in the report. I do not believe--I may be wrong on 
this--but I do not believe that HUD has issued information that 
identifies what actions it will take with respect to specific 
implementations of the new freedom initiative.
    Ms. Lee. Ms. Vaughn, do you have any take on this?
    Ms. Vaughn. Yeah, our opinion of it is that--what 
initiative was that? I am sorry.
    Ms. Lee. Within the new freedom initiative which the 
President recently announced, there is an effort incorporated 
in this to assist people with disabilities to live more 
independently.
    Ms. Vaughn. I am sorry. I was being facetious. That is how 
we feel out in the community, is that we know about the 
initiative, and very active in its--or attempting to be active 
with implementation of that.
    And often out in the community, that is what we will say. 
We will say, ``Well, what initiative? Is there one?'' So that 
is sort of----
    Ms. Lee. That is an answer in itself.
    Ms. Vaughn. HUD did issue a preliminary report under that. 
I actually brought it to D.C., but I left it in my room. But I 
can get that for you.
    And, again, and just like Sara said, I mean, they did not 
really recommend any options, solutions to achieve the goal of 
the plan of the freedom initiative which is integration and 
full recognition of civil and human rights for folks with 
disabilities.
    Ms. Lee. OK, thank you. Madam Chair, perhaps, then, this 
committee needs to look at how that provision should be 
implemented. It may require some legislation from our committee 
to make sure that it is implemented in a way that makes sense 
for people living with disabilities.
    Chairman Kelly. Well, I think that that is part of the 
reason why I am glad you asked the question. That is what this 
hearing is about.
    Ms. Lee. Thank you, Madam Chair. And let me just ask one 
more question about the enforcement of the provisions of the 
Fair Housing Act for the past 11 years as it relates to the 
enforcement with regard to people living with disabilities, and 
enforcement of disability--what do you think has been the 
trend--I mean are you--do you think we are making progress, in 
terms of equal opportunity and fairness in housing for people 
with disabilities, or do you think we are stuck?
    Ms. Vaughn. Is that for both of us or?
    Ms. Lee. Yeah.
    Ms. Vaughn. In DRACH's experience--and we are a national 
grass roots organization, and we are folks with disabilities 
ourselves--we have found that it is sort of the old adage of 
you take--you know, you roll a couple of inches forward, and 
then you lose a few inches backwards.
    We have seen some progress made on the grass roots level, 
in that, we feel like that we have done a good job with 
outreach in educating individuals with disabilities themselves 
about their existing rights, and how to exercise those rights.
    We continue to see that there are institutional barriers, 
and primarily perpetuated by the very enforcers of our rights. 
HUD, in this case, FHAP agencies, real quick story is I had a 
FHIP grant a couple of years ago. We did a statewide project to 
train folks on these issues, an outreach to building industry, 
you know, everyone in the state, very successful project, 18 
month grant.
    We reapplied to do it four state. And our region in Kansas 
City HUD said, ``You are not going to do it. We are not going 
to approve it. And all we want you to do is to send us the list 
of people you talked to, and then we will decide if there is a 
complaint.''
    So all of our efforts to do education were stopped by HUD 
regional office. We pulled off the grant, my organization did, 
because we felt like that we would not be a part of them 
attempting to water down the importance of our rights.
    This is just a little story that happens every day, trying 
to assist folks to exercise their rights through filing 
complaints has been a really incredible experience as well. 
Oftentimes, folks are very intimidated to even come to the 
decision to file a complaint.
    I mean it is a very hard thing because you might lose the 
little roof that you have. And so, oftentimes we are asked to 
be representatives of those complaints. And it took me about 4 
years in Kansas city office before they--I came up with the 
right form that would recognize that the individuals wanted me 
to assist them in representation on their fair housing 
complaint.
    So I don't know if that answers your question. But we feel 
like we have done some great work on the grass roots advocates 
level, and feel like that we have the tools to be able to 
effect greater change. But we are interfered with often by the 
folks that are entrusted to investigate and uphold those civil 
rights.
    Chairman Kelly. Thank you, Ms. Lee.
    Ms. Waters.
    Ms. Waters. Well, I think this hearing is absolutely making 
it clear that these very serious problems exists, and it seems 
to have even gotten worse, as it relates to both discrimination 
against minorities and the disabled. There are a couple of 
things I am wondering about, you may be able to help me with.
    The first is I am beginning to understand the definition of 
the disabled to include the elderly, that may be living in 
public housing that needs some assistance in order to pay their 
rent, or to just get some very basic things done.
    I don't really believe that--or most of the elderly in 
public housing is getting that kind of assistance. What I think 
is happening is we have a growing number of elderly, who may be 
entering the first stages of Alzheimer's. They want to stay in 
their homes. They do not want to go to nursing homes or group 
living. They can prepare food for themselves.
    They can take care of themselves pretty good, but they 
cannot carry out all of the functions that they have been doing 
when they were younger, and before they started to enter this 
stage. They could probably stay in their homes another four or 
5 years with a little bit of assistance.
    Do these people qualify as the disabled? And what do you 
know about this group of folks? What are we doing with them? 
Either Ms. Pratt or Ms. Vaughn.
    Ms. Vaughn. Thank you. It is an excellent question. I think 
you are on the edge of an incredibly important issue in our 
country that we are facing right now. The issue of having 
adequate in-home community supports is a very critical issue to 
our nation.
    Now, as you all know, we have several--there are two 
national legislations pending, Mi Casa. Hopefully, all of you 
all are endorsing that. It is Mi Casa. And what that is, is 
that would amend the social security law in order to really 
throw open the door to the possibility of additional services 
in-home supports for folks of any age with any disability that 
need the assistance based on financial need, as well as degree 
of disabling condition.
    And I think that we have to--when we look at--the reason I 
mentioned Olmstead before in my testimony was because that is 
what Olmstead is, it is a most integrated setting.
    OK. So folks do not have to unnecessarily be 
institutionalized early, or whatever; when, in our opinion, 
they never need to be if there is adequate in-home services. 
And, certainly, folks who are aging often want to tell you, 
``Well, Representative Waters, I am a person with a 
disability.''
    I know you had heard that before. But they do need some 
increased attendant services. If they are getting adequate 
housing that fits their needs, as far as affordability and 
accessibility goes, and they are being reasonable accommodated 
in those needs, then we have to assure that there is adequate 
funding for the in-home support.
    I am not sure that we can pay for that through housing 
funds--and I am not sure we would want to because that may 
limit our housing funds. But I believe that we have to again 
look for equal opportunity for people with disabilities of any 
age, is a holistic approach.
    I mean it is a global issue, several issues that are rolled 
to one. And you cannot have success without the other one 
there.
    Ms. Waters. Thank you. Let me just. What do you know about 
this memorandum of understanding that is in the testimony that 
was just given of Mr. Marcus between the Department of Justice 
and the Treasury to ensure low income residential renting 
housing is placed in service under the IRS administered low 
income housing tax credit program, and that it is accessible to 
people with disabilities.
    It seems to me there is great potential there, but I have 
not heard any details or specificity about how we can take the 
tax credits and force or dictate to those who get them, the 
developers who have the advantage of the support from their tax 
credits, how can we get more housing for the disabled?
    Ms. Pratt. Well, this memorandum of understanding addresses 
low income tax credit housing issue if identified correctly. 
Most of that housing was built since 1994. And all of that 
housing is required, most of it, not all of it, but most of it 
has been built since 1994, and it is covered by the Federal 
Fair Housing Act. It is required to be accessible and usable, 
accessible to and usable by people with disabilities.
    Unfortunately, we hear increasing reports of discrimination 
by tax credit properties, either that they have not been built 
to be accessible in the first place; that they discriminate 
based on race or national origin, or that they discriminate 
against Section 8 certificate and voucher holders, something 
that is covered by Federal law. They are prohibited from 
discriminating against Section 8 holders, as a matter of 
Federal law.
    These are matters which should be handled through 
complaints investigated by HUD. Unfortunately, it appears that 
the amount and extent of discrimination out there exceeds the 
number of complaints that are currently being handled by the 
Department.
    IRS has the ability to condition tax credits on compliance 
with the laws currently. It has never exercised the authority. 
It is a process that is monitored by state housing finance 
agencies and reported to the IRS, and the IRS has the 
capability of conditioning tax credits for properties that 
engage in unlawful discrimination.
    Ms. Waters. Thank you.
    Ms. Vaughn. Additionally, if I may, the Section 42, which 
is what you are referring to, the low income housing tax 
credit, currently are not seen as a recipient of Federal 
financial assistance. So 504 does not--is not enforced on those 
properties.
    I believe that would be a very good move to include that. 
What 504 gets us, of course, is the greater accessible units in 
the very newest part of towns with the nice features, and those 
type of things.
    I know in my state in Kansas, we actually exceed the 
Federal requirement, and that we do require our low income 
housing tax credits we administer in our state to have the 
features of Section 504, but that is not the norm.
    Chairman Kelly. Thank you both very much for your testimony 
today. The Chair notes that some members may have additional 
questions for the panel, and may wish to submit them in 
writing.
    So, without objection, the hearing record will remain open 
for 30 days for members to submit questions and for responses 
for the record.
    The second panel is excused, and we thank you very much, 
with great appreciation for your time.
    Ms. Vaughn. Thank you.
    Chairman Kelly. As our third panel takes their seats, which 
I hope they will be doing now, I will begin the introductions.
    We welcome Ms. Shanna Smith, President and CEO of the 
National Fair Housing Alliance; Mr. Philip Tegeler, Legal 
Director of the Connecticut Civil Liberties Union; and Mrs. 
Barbara Arnwine, Executive Director of the Lawyers' Committee 
for Civil Rights Under Law.
    I want to thank each one of you for testifying before us 
today, and I welcome all of you on behalf of the entire full 
committee. Without objection, your written record, or your 
statements will be a part of the record. And I will go to you 
now for a brief 5 minute testimony of your statements. And we 
will begin with you, Ms. Smith.

  STATEMENT OF SHANNA SMITH, PRESIDENT AND CEO, NATIONAL FAIR 
                        HOUSING ALLIANCE

    Ms. Smith. Thank you to you, Chairman Kelly, and Co-
Chairman Roukema, and the ranking members, Frank and Gutierrez.
    I am Shanna Smith. I am president of the National Fair 
Housing Alliance. And I have been working through the HUD 
process for more than 27 years. I outlined issues of where the 
deterioration in the relationship between the private fair 
housing groups and HUD began.
    In the eight issues I raised, No. 2 dealt with the 
requirement that the fair housing groups return their funds to 
the U.S. Treasury when we recovered money. I wanted to say that 
while that was implemented under Secretary Cuomo, it was 
because during the appropriations hearing for the FHIP program, 
the majority required that we do return these funds.
    And we tried to speak with the Republican leadership to 
explain that it is not double dipping, that it was wise for us 
to reinvest the monies we receive in settlement back into the 
program because of the low funding level with the fair housing 
enforcement.
    I am concerned that under the current administration some 
of the problems continue, and additional problems have been put 
into place. The last 4 days, we have had our national 
conference. And the state and local substantial equivalent 
agencies participated in our conference, and their president 
was with us.
    And I told them that there is this five point penalty for 
the private fair housing groups who apply under the FHIP 
program, and that we may not get the money, which means that 
the state and local agency will have fewer complaints. If they 
have fewer complaints, then they get less money from HUD. If 
they get less money from HUD, they can do less work.
    I will tell you that we did spend a week with HUD in 
Orlando for a policy conference, and the private fair housing 
groups came back very disillusioned. We felt that there is an 
intent at HUD, to eliminate our work.
    And what is remarkable is that out of the 20,000 complaints 
that were filed just in the past year, that is less than 1 
percent of the estimate of housing discrimination that occurs 
in the United States.
    We have done investigations and studies where Hispanics 
have experienced a 100 percent rate of discrimination. We did 
this study--it was not a study. I am sorry. It was enforcement 
investigation in Chicago, and it dealt with homeowners 
insurance. And every single Hispanic who called to try to get 
homeowners insurance experienced discrimination.
    Every African-American who called, 50 percent of the time 
to 70 percent of the time, they were denied homeowners 
insurance. You heard Ken Marcus say that our complaint 
information, the 23,557 that were dealt with this year, we are 
dealing with apples and oranges. That is incorrect.
    Our complaints are defined exactly how HUD and the state 
agencies define complaints. A complaint is when someone calls 
us and we speak to them. We spend 2 hours in our intake with an 
individual. And we determine during that time if the allegation 
they are bringing is covered under the Federal Fair Housing 
Act.
    So to say that we had more than 16,000 complaints of 
discrimination last year, the numbers that HUD and the state 
agencies get tend to be referrals from us. Their complaints are 
very--very few of those are in addition to what we refer to 
them after our investigation.
    About a third of the complaints that we handle show no 
probable cause after an investigation; another third show 
cause. And we try to take cases through an administrative 
process to remedy the situation as quickly as possible, to 
secure housing for the victim of housing discrimination, to 
secure the loan, to secure homeowners insurance, to stop the 
racial harassment, or the sexual harassment of the victim.
    Unfortunately, the administrative process fails us 
completely in securing housing. We are forced to go into 
Federal and state court to get temporary restraining orders to 
prevent our client from losing the housing.
    One of the things I would like to emphasize is that HUD has 
had an obligation since 1974 to promulgate in affirmatively 
furthering fair housing regulation under the Housing and 
Community Development Act. It is today, 2002, there is still no 
regulation.
    As a result, more than 1,000 communities in states that 
receive community development block grant monies don't promote 
fair housing, education, and enforcement. We have recovered and 
reviewed more than 600 of the analysis of impediments that 
these cities and states and counties have been required to 
create and document what are the barriers to fair housing.
    What are the barriers to home ownership for people of 
color, people with disabilities, families with children, and 
women? And, overwhelmingly, the cities, and counties, and 
states have failed to address those issues.
    The last thing I want to say is that we would recommend 
that these committees request HUD to provide for you the Urban 
Institute reports. Congress funded these reports. They are 
supposed to show us what the rates of discrimination are in 
rental and sales issues.
    The reports and the testing are done, and HUD has those 
documents. And I think it would help the committee to know what 
is the nature and extent of discrimination, so you could 
appropriately fund those programs that address. Thank you.
    [The prepared statement of Shanna Smith can be found on 
page 121 in the appendix.]
    Chairman Kelly. Thank you very much, Ms. Smith.
    Mr. Tegeler.
    Mr. Tegeler. Thank you. My name is Philip Tegeler.
    Chairman Kelly. Mr. Tegeler, pull that microphone closer to 
you.
    Mr. Tegeler. Thank you.
    Chairman Kelly. And thank you. Would you please pull it a 
little closer even? I think that we can all hear it better. 
Thank you.

STATEMENT OF PHILIP TEGELER, LEGAL DIRECTORY, CONNECTICUT CIVIL 
                        LIBERTIES UNION

    Mr. Tegeler. My name is Philip Tegeler. I am the Legal 
Director of the Connecticut Civil Liberties Union in Hartford, 
Connecticut. On behalf of the ACLU, I would like to thank 
Chairpersons Roukema and Kelly, and ranking members, Frank and 
Gutierrez, for calling this important hearing on fair housing 
enforcement.
    As an ACLU lawyer, much of my work is focused on government 
action, as opposed to private acts of discrimination. For 
example, we have challenged discriminatory government policies 
onsite selection, tenant relocation, Section 8 administration, 
admissions policies, and exclusionary suburban housing and 
zoning policies.
    From this perspective, I have a few simple points to convey 
today. First, few government housing actions are race neutral. 
HUD basically has a choice in every program it operates; 
whether to support continued segregation of our metropolitan 
areas, or to take affirmative steps to desegregate and to 
promote racially and economic diverse communities.
    Second, because of HUD's powerful impact on race and 
segregation, the agency's most important fair housing 
enforcement role is in its own programs in requiring 
affirmative fair housing enforcement among HUD grantees, which 
include local public housing agencies, private housing 
managers, and municipal governments.
    The devolution of authority to local PHA's, housing 
managers, and municipalities has worked in many areas, but it 
has not been a fair housing success story. Like any other civil 
rights requirement, fair housing is controversial, and it is 
susceptible to local political pressure and prejudice.
    Congress needs to help HUD take back control of the civil 
rights review process, and adequately fund and prioritize fair 
housing enforcement against HUD grantees. This will require, 
among other things, a fully staffed and funded Office of Fair 
Housing and Equal Opportunity.
    Third, an assessment of racial impacts of actions and 
policies should be factored into all HUD decisionmaking. This 
is required in some HUD programs, but is unevenly enforced. 
Programs like Hope VI, the Home Program, the Low Income Housing 
Tax Credit Program, and Section 8 need to have much stronger 
civil rights goals and assessment procedures.
    These are programs that directly effect where large numbers 
of Americans live; and the effects of these programs on racial 
segregation and poverty concentration, need to be taken much 
more seriously.
    The Section 8 program, which is now called the Housing 
Choice Voucher Program, is a good case in point. Funding was 
recently cut for successful programs that helped families find 
apartments in lower poverty neighborhoods.
    These programs, including the Moving to Opportunity 
Program, and the Regional Opportunity Counseling Program, were 
working to provide families with information about desegregated 
housing options and helping them to apply for housing.
    Without these programs, it is even more difficult for 
families to move out of high poverty neighborhoods using 
housing vouchers. There are many other aspects of the Section 8 
program that could be strengthened to promote fair housing.
    Just as one example, we could move toward a more efficient 
regional administration of the Section 8 program. We could 
change the archaic system for setting local rents to increase 
the number of neighborhoods and towns that tenants have to 
choose from.
    Section 8 is currently our largest Federal housing program, 
and it has the most potential of any program to decrease 
segregation in our metropolitan areas. Fair housing should be 
part of this program's core design. There are many similar 
examples throughout HUD's programs.
    As I pointed out in my written testimony, a large coalition 
of legal services and civil rights organizations requested a 
meeting with Secretary Martinez on these issues last spring, 
and we would be very much in following up on that request this 
year.
    Finally, we would encourage the committee on, after 
reviewing the Millennial Housing Commission Report, which was 
recently submitted to Congress, to ask for a follow up report 
on fair housing. The Millennial Housing Commission Report 
contains some very important recommendations on new housing 
production, particularly housing production for very low income 
families. But it does not address fair housing enforcement in a 
systematic way.
    To implement these important recommendations, fair housing 
will need to be factored in from the beginning. And if this 
committee can appoint some type of task force to look at this, 
I think it would be very important. Thank you.
    [The prepared statement of Philip Tegeler can be found on 
page 139 in the appendix.]
    Chairman Kelly. Thank you very much.
    Ms. Arnwine.

   STATEMENT OF BARBARA ARNWINE, EXECUTIVE DIRECTOR, LAWYERS 
              COMMITTEE FOR CIVIL RIGHTS UNDER LAW

    Ms. Arnwine. Good afternoon. I am Barbara Arnwine, 
Executive Director of the Lawyers' Committee for Civil Rights 
Under Law. I would like to thank----
    Chairman Kelly. Ms. Arnwine, are you sure that that 
microphone is turned on?
    Ms. Arnwine. Let me--how is that?
    Chairman Kelly. That is a lot better. Thank you, ma'am.
    Ms. Arnwine. OK. I would like to thank Chairman Sue Kelly, 
Chairman Roukema, and Representative Frank, for holding these 
important hearings on fair housing enforcement.
    My comments today focus on the Lawyers' Committee's 
concerns with the Department of Housing and Urban Development's 
declining efforts at ensuring the principals of fair housing, 
as set forth in the Constitution and Title VIII of the Civil 
Rights Act of 1968.
    We want to make sure that they are not only memorialized in 
words, but that these protections are also adhered to indeed by 
the Department. Over the past 10 years, we have seen the 
Federal Government's involvement in the enforcements of fair 
housing and other civil rights laws decrease dramatically.
    This trend is alarming at a time when the number of civil 
rights complaints is rising, and thus the need for leadership 
of agencies enforcing vital civil rights laws is even greater. 
Unfortunately, the alarms ring, it has been met by deaf ears at 
HUD, and other Federal agencies responsible for enforcing and 
ensuring equal justice under our housing laws.
    First, the Lawyers' Committee has serious concerns with the 
HUD complaint process. The starting point for any problem is 
the vast reduction and funding of FHEO at HUD. As would be 
expected, the reduction in funding and staff has taken its toll 
as HUD has been unable to keep up with its increasing workload 
by failing to conduct timely and complete investigations of 
fair housing complaint, HUD prolongs fair housing acts 
violations, and its conduct threatens this country's commitment 
to ensuring that every American will be free from 
discrimination in housing.
    What is more troubling than HUD's delay in investigating 
complaints, or HUD's recent efforts to reduce the backlog of 
complaints, rather than providing more staff to investigate and 
pursue these complaints, HUD has taken Congress's clear mandate 
to operate a straightforward, user-friendly complaint process, 
and turned it on its head.
    They have created an elaborate like system designed to 
administratively dismiss complaints without conducting any 
investigation to determine the merits of the underlying client 
claim. This reprehensible conduct by HUD seemingly returns us 
to a day where we had a law that banned discrimination, but 
without ``an effective enforcement system to make that promise 
a reality.''
    Through the work of the Lawyers' Committee and our 
affiliates and other groups across the nation, we have seen 
numerous and repeated failings by the FHEO staff to meet the 
congressional goals set forth in the Fair Housing Act. The 
problems we have seen include a couple of examples:
    (1) In one case, where there was clear evidence of 
discrimination including letters signed by the respondent 
harassing the complainants, and attempts by the respondent to 
run over the complainants with a car, more than 15 months have 
passed since the complaint was filed and the investigation has 
not been concluded.
    In another case, HUD refused to accept the complaint 
because it was printed on an improper form. The form, it should 
be noted, came from HUD's own website that they recommended to 
complainants to use.
    And, yet, another case brought by the Boston Lawyers' 
Committee, our affiliate organization, HUD has adopted strained 
analyses of legal principles that work to deny fair housing 
organizations standing where established precedent would grant 
them.
    Thus, HUD has adopted legal theories and imposed additional 
requirements on complainants that are neither required nor 
permitted under the Fair Housing Act, or HUD's implementing 
regulations.
    The Lawyers' Committee is gravely concerned about these 
growing burdens, these burdens on complainants with great and 
important cases that HUD's attempts to reduce its backlog 
through administrative gimmicks rather than through 
investigation and resolution of the case is particularly 
troubling and clearly goes against Congress's intent when they 
passed the Fair Housing Act amendments in 1988.
    Using administrative schemes to avoid HUD's investigative 
responsibilities is shameful, and also fails to fulfill HUD's 
statutory obligations to investigate an eradicate housing 
discrimination. It is clear that further oversight and guidance 
from Congress is needed now more than ever.
    We are not only concerned about these matters, but we also 
are concerned, as has been expressed by my colleagues, about 
the failure to merge--to look at the failure to enforce fair 
housing laws by various cities and regions; and, at the same 
time, granting them more money under other programs including 
the Hope VI Program, the Low Income Tax Credit Program, the 
Community Development Block Grant Program, and others. HUD must 
gather and use this information.
    In closing, we call on Congress to enforce our laws, to 
hold HUD much more accountable, to make sure that it is 
complying with its obligations, and that we must make sure that 
they do not continue to put stumbling blocks in the path of 
those who are certain that violations of their rights under the 
Fair Housing Act, and that instead they are living up to their 
obligation to affirmatively further fair housing. Thank you so 
much.
    [The prepared statement of Barbara Arnwine can be found on 
page 76 in the appendix.]
    Chairman Kelly. We thank you. That is quite a statement, 
Ms. Arnwine.
    Ms. Smith, in your statement, you go into detail about the 
downsizing of the Office of Fair Housing and Equal Opportunity, 
and the staff was just decimated.
    Is it your observation that this was not conducted 
properly, and that a center of knowledge and experience was not 
maintained there?
    Ms. Smith. I cannot respond to whether it was conducted 
properly or not because I am not familiar with how HUD moves 
people around. But we did lose a number of highly skilled 
people, Sara Pratt being one of them.
    I think Sara gave you some of the reasons why she left. 
But, in addition, there were people who told me they left 
because of the changes in management; but also because in the 
appropriations arena, Congress said to HUD under the FHIP 
program and the enforcement, they could no longer do special 
enforcement projects.
    And by not being able to attack the institutionalized 
systems of discrimination, people were disillusioned. And the 
senior--the most senior staff, who were both Republicans and 
Democrats, who worked at the division left, and went into 
private practice.
    Some came to work for us, some went to work at much lower 
salaries in the private fair housing movement because they 
thought they could make a difference. The devolution though was 
a problem. Devolution in the fair housing side is a serious 
problem. Headquarters must make the decisions.
    Chairman Kelly. I am sorry. I did not mean to interrupt 
you.
    Did you feel that fair housing enforcement was not really a 
priority for Secretary Cuomo here?
    Ms. Smith. I think enforcement was, but structuring it in a 
way that would be most effective was difficult. He was 
competing with mandates from Congress that the private fair 
housing groups could not bring homeowners insurance actions; 
that it should not be covered under the law.
    He was dealing with the issue of Congress saying that the 
fair housing groups should not be able to use the awards that 
they receive, that were given to us by courts, and lawfully 
given to us to recover our expenses, has to go back to the U.S. 
Treasury.
    And then, on the other hand, he--there was a lot of press 
that was going on, but there was no consistent funding for the 
private groups who were bringing and filing the majority of the 
cases in the country. And the changes to the FHIP NOFA process, 
we found to be very detrimental to enforcement.
    And, now, even more punitive issues have been added into 
that process. And so, we sit here as the private fair housing 
enforcement movement and education movement feeling no support 
from Congress or the Department to do the job that needs to be 
done, in fact, that HUD's charged to do.
    But Congress found in 1990 that fair housing groups do a 
good job of providing education and enforcement, and therefore 
created the fair housing initiatives program under President 
Reagan, and with the leadership in Congress at that time. And 
it became a permanent program under President Bush, and the 
money was increased by Congress.
    And under Secretary Cisneros, the program expanded. And, as 
you heard Sara testify, that some of the strongest enforcement 
was going on because the funds were coming from Congress. We 
had good leadership in Secretary Cisneros, and then there was a 
change.
    The money had many more conditions placed on it. And even 
today, with the $20 million that has been allocated, less than 
$12 million is being used for enforcement for the whole United 
States.
    This is very difficult. It is a sad situation. I have 
complaints pending at HUD. As a national organization, we have 
a complaint that was filed in 1997, and very little--there was 
some investigation in 1999, some in 2000, and HUD has not 
proceeded with the investigation, and we had to file in Federal 
District Court. And that is not our chosen way to resolve a 
complaint. We want to try to work with the industry in an 
administrative process.
    Chairman Kelly. Thank you. I have got a little bit more 
time. I want to ask you one more question.
    You made a special reference to the disaffected populations 
of non-English speaking immigrants like the Hispanic and the 
Asian populations. Secretary Cuomo spoke to us then about the 
efforts that the department was making to address their housing 
needs.
    What is your evaluation of those efforts that he said were 
being made?
    Ms. Smith. I think the FHIP program has ended up being the 
catchall for innovative programs when Congress says something, 
or someone comes up with an idea in fair housing, they say, 
``Well, we will let the FHIP groups do it.'' But then there is 
no corresponding funding for us to do that.
    Most of the fair housing, private fair housing agencies 
have maybe three or four staff people. And we said to Secretary 
Cuomo at the time, as we said to Secretary Martinez, we need 
more money, so that we can hire staff who will speak Spanish, 
who will have connections with the Asian-American communities.
    And, as you see, we have a high rate of disability cases 
that we handle. And that is because HUD and Congress focused 
money on that, and Secretary Cuomo focused money on 
disabilities. Our race cases remained level, our disability 
cases increased, but complaints from people who are Hispanic-
Americans and Asian-Americans remain very flat.
    And, in fact, we get more than the government gets, and yet 
it is very difficult unless we get enough money. I think 
Secretary Cuomo asked for more money for the FHIP program, as I 
recall, and we did not get it. And if we don't get the money, 
we cannot reach all of the protected classes, and there are 
seven of them under the Federal Fair Housing Act.
    Chairman Kelly. Thank you very much. My time is up. Mr. 
Frank.
    Mr. Frank. Ms. Arnwine, I apologize. I had a very important 
piece of legislation that will be coming up soon deeply 
affecting the fishing industry in my district and I had to go 
off.
    But I know you were present when I was questioning Mr. 
Marcus, and he was in fact denying some of the things you 
asserted. He can't know everything obviously in the Department. 
And then I had to step out briefly during testimony. But I 
assume you--did you address that disagreement?
    Ms. Smith. Yes.
    Mr. Frank. And how do you reconcile that?
    Ms. Arnwine. Well, I think it is just embarrassing for HUD 
to admit that they have forms on their website----
    Mr. Frank. Oh, Ms. Arnwine, you are an expert on a lot of 
things, but I am an expert in some things. Please do not 
overestimate HUD's ability to be embarrassed. I think you will 
find that that is not as easy as you think, but please go 
forward.
    Ms. Arnwine. I think that he obviously did not want to 
admit to it. I mean it is embarrassing that they have this form 
that is on their websites that when complainants go to HUD to 
try to figure out, you know, how do they come forth and 
register a complaint, that they find these forms; they then 
download them--if they are able, you know, they have computer 
access--they take those forms, they fill them out, they send 
them to HUD.
    They have a very reasonable expectation that those forms 
are going to be processed and followed up on by HUD. What 
instead happens is that HUD gets the forms, and in many cases 
rejects them.
    Mr. Frank. Is that still happening? I mean this is not----
    Ms. Arnwine. Yes, yes, it still happens.
    Mr. Frank. All right. Let me make this proposal.
    Ms. Arnwine. Still happens.
    Mr. Frank. Because I don't want these things just to be 
brought up here and dropped.
    Ms. Arnwine. Yes.
    Mr. Frank. If you will send to me some documented cases of 
that----
    Ms. Arnwine. Yes.
    Mr. Frank.--I will then send it on to Mr. Marcus saying 
``this is what you told me did not happen.'' I don't mean to 
say that he was being dishonest. But, obviously, there are 
things he wasn't aware of, and I will directly call those to 
his attention, any other disparity of that sort, where you can 
document them.
    Yes, go ahead.
    Ms. Arnwine. Right, because the other thing they do that 
really is very troubling is that they take the form, sometimes 
even the forms that they accept, they will take them and they 
retype them for summaries, and then they send them back to the 
complainants to sign them.
    As you know, that is totally in the 100 days, the 
complainants get these forms back, don't recognize what is 
required, and don't know what to do. It is another way where we 
losing----
    Mr. Frank. All right. Now let me ask you. When they retype 
it and send it back, does that stop the statute, or does it 
keep running?
    Ms. Arnwine. No, it keeps running. That is a big problem.
    Mr. Frank. All right. One of the things, if you will remind 
me, I will say to them that if an application is filed, it 
seems to me--let me ask you this. You are the experts in law.
    Is there any statutory barrier which keeps them from 
starting the clock on the day they get the completed and formal 
application rather than the initial one?
    I mean could they, if they said, ``Well, that is not right, 
but you have got to redo it, but I will start the clock when I 
get the new one?'' Is there a statutory problem there?
    Ms. Smith. Yeah, there is.
    Ms. Arnwine. The statute talks about 1 year from the date 
of the discrimination.
    Mr. Frank. All right. So that means then they have to take 
up. Although maybe we can also look at the statute, and perhaps 
put into the statute a little more flexibility. But, in the 
meantime, they have got to work on that.
    Ms. Smith, I was very interested in what you had to say, 
and I--maybe I wasn't paying attention. I don't remember anyone 
beginning in 1998, calling some of these problems to my 
attention, obviously, it is something I want to work on. And it 
began in the last administration. It has carried over. It seems 
to be wrong in both cases.
    I will be working with my colleagues to try to get 
Secretary Martinez to change some of these policies. I must 
say, these days privatizing all kinds of things is en vogue; 
privatizing social security, privatizing prisons, maybe the 
only thing that some of these people don't want to privatize is 
enforcement of discrimination because it might be too 
effective. But I think we probably ought to be somewhat 
consistent.
    One thing particularly troubled me here when you talked 
about the new restrictions that Secretary Martinez imposed. I 
want to make sure I understand this. It is one page 6 of your 
testimony, that the applicant--that is the fair housing group, 
private applicant--must show that the proposed activities 
comply with CDBG recipients consolidated plan analysis of 
impediments to housing.
    In fact, it would seem to me that the main reason for 
having this is to criticize the CDBG recipients. In other 
words, have I got this right? The CDBG recipient is the local 
government entity here, correct?
    Ms. Smith. That is correct.
    Mr. Frank. So what they are telling you is that if you were 
monitoring that entity's fair housing compliance, you must have 
a plan that is in compliance with their non-compliance. I mean 
I guess that one seems to me particularly troubling. I don't 
understand why you should have to comply with the people you 
are monitoring.
    Ms. Smith. Well, theoretically, had the analysis of 
impediments been conducted by the cities, and actually 
documented the barriers to fair housing, and then made 
recommendations to remove those barriers, and then funded those 
barriers, then----
    Mr. Frank. Right. But, as you point out, one, we have not, 
as the Federal Government, done a good job of monitoring that. 
But, second, it may well be that one of the problems is that 
the entity has not in fact done a good plan; and then you would 
be debarred from doing that very fundamental critiquing.
    Ms. Smith. We would lose points in our application. And the 
competition is so keen, that oftentimes there is one-half point 
deciding who gets a grant and who doesn't. So when you look at 
that and you lose points--and there are only about 60 cities 
that actually have a good AI that we have reviewed.
    So, you know, if you lose points there, and then you lose 
the five points if you are already in a state such as Ohio that 
has eight great fair housing groups, who work very closely with 
the Ohio Civil Rights Commission, have great successes, all of 
those groups are being penalized, and then the Ohio Civil 
Rights Commission is penalized.
    Mr. Frank. My time is up. I will want to work with you to 
maybe get a letter that some of my colleagues might join----
    Ms. Smith. Yes.
    Mr. Frank [continuing]. To the Secretary on that. And, Ms. 
Arnwine, I would like a letter from you, which I will pass 
along to Mr. Marcus. Thank you, Madam Chair.
    Chairman Kelly. Thank you, Mr. Frank.
    Mr. Watt.
    Mr. Watt. Thank you, Madam Chair, and thank the chair and 
the ranking member for convening this hearing. And I apologize 
to this panel of witnesses, and the prior panel of witnesses 
for being in and out during the course of the afternoon.
    I want to say a special welcome to my good friend and long-
term colleague, Ms. Arnwine, who spent a good portion of her 
life in North Carolina, and tell her how great it is to see her 
continuing to carry on the magnificent work that she is doing 
on the national stage.
    I want to try to get some more details about these two 
North Carolina cases, in particular, so that I might be able to 
piggyback on Mr. Frank's letter, and put some additional 
pressure on HUD to be more timely in its investigation of 
complaints.
    Ms. Jones, Stephanie Tubbs-Jones, raised some of the issues 
about delays in investigating complaints during one little 
snippet of time when I was actually in the room earlier today.
    What seems to be the problem with getting these 
investigations to be more timely in you all's experience, if 
anybody has experience with that? Ms. Arnwine.
    Ms. Arnwine. Thank you very much. We really appreciate it. 
Thank you. Congressman, for those kind remarks. It is obvious 
that one of the biggest problems is the implementing 
regulations that HUD has proffered and operates under. It is 
their own regulations that is requiring that they, you know, 
reject complaints.
    It is their own lack of I think any kind of sense of 
imperative for enforcement that allows them to just treat the 
100 day requirements just, you know, totally in a casual non-
serious manner. It is their own lack of seriousness that allows 
them to, as you notice, to today to talk about they only are 
asking for level funding for FHEO.
    It is their own lack of a kind of seriousness that I have 
seen also with the Department of Justice where, as Mr. Frank 
and others have called, and Mr. Gutierrez have called to our 
attention today, to even use the term ``discrimination.''
    I mean we have--I was just, you know, in the last number of 
months, I have been talking to attorneys over at Department of 
Justice where they have been told to strike from the their 
briefs the use of the word ``discriminatory.''
    There is this problem that is at HUD, but it permeates this 
administration of a kind of ambiguity toward recognizing, and 
admitting to the discrimination that exists in our society. But 
I really think the regulations are a problem, and a lack of 
serious leadership over at HUD on these matters.
    Mr. Watt. Either of the other witnesses have any experience 
with this that might be able to give us some insight as to why 
it is taking so long to process investigation?
    Ms. Smith. Well, in part, just trying to get your complaint 
accepted with HUD lately has been very difficult. I would say 
in the last 2 years, when you call, the intake person, who is 
not trained in what is covered by the law, and what the courts 
have decided since 1968 about the law will oftentimes reject a 
complaint.
    And then you have the situation that Barbara described 
where they will fill it out on the internet, mail it in, and 
then a lot of questions start happening, and the time is 
ticking all along.
    The other issue is during an investigation, I know when the 
private fair housing centers, who have standing to bring 
complaints with HUD, as well as in Federal and state court, we 
have to show an injury, and we know that, in order to file a 
complaint.
    But the HUD investigators have this--it was actually like 
an eight page checklist that the fair housing groups had to 
answer before our complaint would be accepted. In fact, in the 
case that we have pending, the Federal District Court here in 
the District of Columbia has already denied the motion to 
dismiss based on standing.
    But HUD wants to continue to question, not only the 
National Fair Housing Alliance, but fair housing groups in 
Toledo, Milwaukee, and Chester, Pennsylvania, and Richmond, 
Virginia. We are all together in a lawsuit. And we have all 
filed complaints in 1997 with HUD, and the standing issue just 
started in the last 2 years. And we are baffled by this issue.
    So if they question groups that have had standing, that can 
document injury, I wonder what happens to the individual who 
comes in. And our experience is that we know of cases that have 
had no investigation started, cases that are five and 6 years 
old.
    In addition, when they were talking about closing out the 
cases and how important this is, I know of situations where, 
for example, our attorney was called and said, ``Would you 
withdraw your complaint from HUD?'' And if they ask us to do 
that rather than counting, you know, this case, and taking 
credit when this case should settle is very frustrating.
    And I know of situations where if they called the 
complainant one time and couldn't reach them, they are calling 
nine to five, the majority of our clients work. They don't 
reach them, they will say the complainant was unresponsive. We 
couldn't locate them, and then they close the case.
    Mr. Watt. Thank you, Madam Chair. My time has expired. I 
thank the witnesses for being here.
    Mr. Tegeler. If I could briefly add one other response to 
the same question. The problem of delay and understaffing is 
not limited to HUD enforcement agencies, but also to all of 
those states where ``substantially equivalent'' laws have 
allowed the delegation of complaint processing and fair housing 
to local agencies.
    There are a lot of problems there as well. I think the HUD 
approval process for those local agencies needs to be much more 
stringent because we have serious delays in a number of states 
that don't have HUD processing, per se.
    Chairman Kelly. Thank you, Mr. Watt.
    Mr. Watt. Thank you.
    Chairman Kelly. Now Ms. Lee.
    Ms. Lee. Yeah, thank you, Madam Chair.
    Once again, I want to thank you for this hearing, and thank 
the panelists because it is very--I don't know if any other 
members are feeling this, but I am feeling very frustrated and 
somewhat angry knowing that these hearings are just the tip of 
the iceberg in terms of what our constituents are feeling each 
and every day, and going through each and every day just to be 
able to be treated fairly and equally.
    And, Madam Chair, I think I am seeing this as a 
bipartisan--has been a bipartisan problem historically. And I 
think Ms. Smith kind of laid out the history of why some of the 
frustrations with staff was there, which Mr. Marcus mentioned 
earlier.
    But I guess what I am concluding is--and after listening to 
Mrs. Arnwine also, that the commitment to fair housing just has 
not been there. And the congressional constraints have been so 
onerous, that even if the Secretary of HUD, whomever that 
Secretary may be, has made it a priority.
    The Congress is not going to allow for that to be enacted. 
We haven't seen much in terms of increasing the funding for 
programs and for the division which is responsible for fair 
housing and equal opportunity.
    So if we don't put our money where our mouth is, and if the 
Congress doesn't allow for the enforcement of fair housing or 
equal opportunity laws, then where are we going? I mean are we 
going backwards or forward?
    I mean we heard the complaints with regard to the previous 
10 years, and Ms. Arnwine also talked about the decrease in, 
you know, the complaint process moving forward. But, yet, now 
we are hearing that we may be in a similar situation.
    And so, is it the culture of HUD, or is it the culture of 
the Congress? Is it--what is it? Is it we still have problem 
with equal opportunity for people in our country? I mean I 
guess I want to know what you guys really think it is.
    Ms. Smith. Well, since I have a grant application pending--
but I will be frank. There is a culture of HUD that they can't 
be an advocate. And in the private fair housing movement, we 
only become the clients advocate after evidence of 
discrimination is documented.
    We are as skeptical as everybody else when that complaint 
walks in the door because we can't bring a frivolous action. It 
hurts our community. It hurts the whole concept of fair 
housing. We make enemies in the industry if we bring frivolous 
actions. HUD and the state agencies have to step back and say, 
``You know, we are the neutral factfinders. We can't advocate 
for anyone.''
    As a result, if a fair housing agency isn't helping a 
client through the process, most victims of housing 
discrimination don't know what to ask for, and HUD doesn't know 
how to expand a remedy that changes the institutionalized 
practices in large industries that occur.
    Sometimes there is conflict. HUD administers the FHA 
program. HUD oversees the GSE's. HUD oversees all of the public 
housing authorities, and the Section 8 programs. We often have 
housing discrimination complaints against those very entities. 
And there is a conflict for HUD to monitor those agencies and 
enforce the Fair Housing Act.
    You heard Sara respond to debarment. We had a case that 
went to the 6th Circuit Court of Appeals against a large 
Section 8 developer, and we asked HUD to debar this builder. We 
have a Federal jury decision, and we had an appellate court 
upholding that jury decision that this developer discriminated 
on the basis of religious and national origin.
    No steps were taken. And what HUD said to me when I called 
to find out why, they said, ``Shanna, they have the best-
looking projects that are out there.'' I said OK. And they said 
their management is really good. I said, ``Yes, but they 
discriminate. They don't allow people of color. They don't 
allow people who are not Christians or Jews to move into their 
developments.''
    And there is a culture, and it is a problem. And years ago 
we thought that Congress should make a separate entity for fair 
housing enforcement similar to the Equal Employment Opportunity 
Commission because there is a conflict at HUD. And I think if 
Congress could look at a separate entity and see the 
enforcement, see the kinds of education that could be done 
because we are--I consider ourselves to be evenhanded.
    I work with many large corporations including State Farm 
and Allstate, Nationwide, and Liberty Mutual Insurance 
companies, who had been seriously violating the law prior to 
1996. And we are in partnerships with these companies.
    And so, there is a way to work with the companies who have 
engaged in institutionalized practices of discrimination, 
eliminate those problems, still work with those same agents 
that may be having problems on a local level, and handle that.
    But HUD does not have that vision of challenging the 
institutionalized practices that exists in the United States. 
In Congress, you all haven't just allocated the money. And the 
lobbies or the interest of the real estate industry, of the 
insurance industry, of the lending industry have come to you 
and said, you know, don't regulate us.
    But the Fair Housing Act doesn't regulate anything. The 
Fair Housing Act simply enforces the law. HUD never regulated 
insurance. We have no interest in regulating insurance. We just 
want to make sure that their underwriting guidelines are fair, 
and there is no disparate impact, based on race, religion, 
disability, or sex in those laws.
    So, if you do something, and either you mandate HUD to 
change its culture, or create a separate organization that will 
administer the fair housing money for private groups, and 
administer the money to the State agencies because now the 
State agencies tell me they are being micromanaged by HUD, and 
it just thwarts all of the enforcement.
    And any time we have to file a complaint, make a Federal 
case out of everything that comes forward is not productive. 
There are small cases that just calling the landlord, and our 
client says call the landlord, we can wrap it up.
    Chairman Kelly. Speaking of wrapping it up, we are well 
over the time.
    Ms. Smith. Yes.
    Ms. Arnwine. Can I make just one----
    Chairman Kelly. Appreciate your passion, but we are out of 
time.
    Ms. Arnwine. OK.
    Chairman Kelly. I note that our members probably have some 
additional questions, given the testimony that this panel has 
submitted. You will probably find questions submitted in 
writing.
    So, without objection, the hearing record will remain open 
for 30 days for members to submit written questions to these 
witnesses, and to place their responses in the record. This 
third panel is excused, again, with our great appreciation.
    And I want to briefly thank all of the members and the 
staff for their assistance in making the hearing possible. And 
this hearing is adjourned.
    [Whereupon, at 4:55 p.m., the subcommittees were 
adjourned.]
                            A P P E N D I X



                             June 25, 2002
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