[House Hearing, 108 Congress]
[From the U.S. Government Publishing Office]
THE SECTION 8 PROGRAM--COMMUNITY
DEVELOPMENT BLOCK GRANT (CDBG)
PROGRAMS, AND AFFORDABLE HOUSING
IN OHIO
=======================================================================
FIELD HEARING
BEFORE THE
SUBCOMMITTEE ON
HOUSING AND COMMUNITY OPPORTUNITY
OF THE
COMMITTEE ON FINANCIAL SERVICES
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED EIGHTH CONGRESS
FIRST SESSION
__________
JULY 29, 2003
__________
Printed for the use of the Committee on Financial Services
Serial No. 108-50
92-234 U.S. GOVERNMENT PRINTING OFFICE
WASHINGTON : 2003
____________________________________________________________________________
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HOUSE COMMITTEE ON FINANCIAL SERVICES
MICHAEL G. OXLEY, Ohio, Chairman
JAMES A. LEACH, Iowa BARNEY FRANK, Massachusetts
DOUG BEREUTER, Nebraska PAUL E. KANJORSKI, Pennsylvania
RICHARD H. BAKER, Louisiana MAXINE WATERS, California
SPENCER BACHUS, Alabama CAROLYN B. MALONEY, New York
MICHAEL N. CASTLE, Delaware LUIS V. GUTIERREZ, Illinois
PETER T. KING, New York NYDIA M. VELAZQUEZ, New York
EDWARD R. ROYCE, California MELVIN L. WATT, North Carolina
FRANK D. LUCAS, Oklahoma GARY L. ACKERMAN, New York
ROBERT W. NEY, Ohio DARLENE HOOLEY, Oregon
SUE W. KELLY, New York, Vice Chair JULIA CARSON, Indiana
RON PAUL, Texas BRAD SHERMAN, California
PAUL E. GILLMOR, Ohio GREGORY W. MEEKS, New York
JIM RYUN, Kansas BARBARA LEE, California
STEVEN C. LaTOURETTE, Ohio JAY INSLEE, Washington
DONALD A. MANZULLO, Illinois DENNIS MOORE, Kansas
WALTER B. JONES, Jr., North CHARLES A. GONZALEZ, Texas
Carolina MICHAEL E. CAPUANO, Massachusetts
DOUG OSE, California HAROLD E. FORD, Jr., Tennessee
JUDY BIGGERT, Illinois RUBEN HINOJOSA, Texas
MARK GREEN, Wisconsin KEN LUCAS, Kentucky
PATRICK J. TOOMEY, Pennsylvania JOSEPH CROWLEY, New York
CHRISTOPHER SHAYS, Connecticut WM. LACY CLAY, Missouri
JOHN B. SHADEGG, Arizona STEVE ISRAEL, New York
VITO FOSSELLA, New York MIKE ROSS, Arkansas
GARY G. MILLER, California CAROLYN McCARTHY, New York
MELISSA A. HART, Pennsylvania JOE BACA, California
SHELLEY MOORE CAPITO, West Virginia JIM MATHESON, Utah
PATRICK J. TIBERI, Ohio STEPHEN F. LYNCH, Massachusetts
MARK R. KENNEDY, Minnesota ARTUR DAVIS, Alabama
TOM FEENEY, Florida RAHM EMANUEL, Illinois
JEB HENSARLING, Texas BRAD MILLER, North Carolina
SCOTT GARRETT, New Jersey DAVID SCOTT, Georgia
TIM MURPHY, Pennsylvania
GINNY BROWN-WAITE, Florida BERNARD SANDERS, Vermont
J. GRESHAM BARRETT, South Carolina
KATHERINE HARRIS, Florida
RICK RENZI, Arizona
Robert U. Foster, III, Staff Director
Subcommittee on Housing and Community Opportunity
ROBERT W. NEY, Ohio, Chairman
MARK GREEN, Wisconsin, Vice MAXINE WATERS, California
Chairman NYDIA M. VELAZQUEZ, New York
DOUG BEREUTER, Nebraska JULIA CARSON, Indiana
RICHARD H. BAKER, Louisiana BARBARA LEE, California
PETER T. KING, New York MICHAEL E. CAPUANO, Massachusetts
WALTER B. JONES, Jr., North BERNARD SANDERS, Vermont
Carolina MELVIN L. WATT, North Carolina
DOUG OSE, California WILLIAM LACY CLAY, Missouri
PATRICK J. TOOMEY, Pennsylvania STEPHEN F. LYNCH, Massachusetts
CHRISTOPHER SHAYS, Connecticut BRAD MILLER, North Carolina
GARY G. MILLER, California DAVID SCOTT, Georgia
MELISSA A. HART, Pennsylvania ARTUR DAVIS, Alabama
PATRICK J. TIBERI, Ohio
KATHERINE HARRIS, Florida
RICK RENZI, Arizona
C O N T E N T S
----------
Page
Hearing held on:
July 29, 2003................................................ 1
Appendix:
July 29, 2003................................................ 63
WITNESSES
Tuesday, July 29, 2003
Baughn, Bambi, Deputy Director, Community Action Commission of
Fayette County, Washington Court House, OH..................... 35
Cates, Walter R. Sr., President, Main Street Business
Association, Columbus OH....................................... 37
Coleman, Hon. Michael B., Mayor of Columbus, OH.................. 28
Faith, Bill, Executive Director, Coalition on Homelessness and
Housing in Ohio (COHHIO), Columbus, OH......................... 6
Fisher, Latoya N., Resident, Columbus, OH........................ 9
Garber, Roberta, Executive Director, Community Research Partners,
Columbus, OH................................................... 39
Gladman, Steven D., Governmental Affairs Coordinator, Ohio
Apartment Association, Columbus, OH, appearing on behalf of
Columbus Apartment Association and Midwest Affordable Housing
Management Association......................................... 11
Guest, Dennis S., Executive Director, Columbus Metropolitan
Housing Authority, Columbus, OH................................ 13
Hale, William, President, Portage Area Development Corp.,
Ravenna, OH.................................................... 48
Klaben, Amy, President and CEO, Columbus Housing Partnership,
Columbus, OH................................................... 41
Kuhn, Amy, Deputy Director, Community Development Division, Ohio
Department of Development, Columbus, OH........................ 50
Lowenstein, Roy, Vice President, Development, Ohio Capital
Corporation for Housing, Columbus, OH.......................... 51
Luken, Sally, Acting Director, Corporation for Supportive
Housing, Columbus, OH.......................................... 53
McCleary, Cornell H., Commander, PRO-Private Police Training
Academy, Columbus, OH.......................................... 15
Ring, Cynthia K., Executive Director, Allen Metropolitan Housing
Authority, Lima, OH............................................ 43
Slemmer, Thomas W., President, National Church Residences,
Columbus, OH, on behalf of the American Association of Homes
and Services for the Aging..................................... 16
Tavares, Charleta Bell, Member, Columbus City Council, Columbus,
OH, Chair of Health, Housing and Human Services Committee...... 55
Weaver, April, Resident, Columbus, OH............................ 42
Woda, Jeffrey J., President, The Woda Group LLC, Columbus, OH.... 57
Zawilinski, Fred, Executive Director, Lake Metropolitan Housing
Authority, Painesville, OH..................................... 18
APPENDIX
Prepared statements:
Ney, Hon. Robert W........................................... 64
LaTourette, Hon. Steven C.................................... 66
Tiberi, Hon. Patrick J....................................... 68
Baughn, Bambi................................................ 75
Cates, Walter R. Sr.......................................... 84
Coleman, Hon. Michael B...................................... 90
Faith, Bill.................................................. 93
Fisher, Latoya N............................................. 100
Garber, Roberta.............................................. 103
Gladman, Steven D............................................ 108
Guest, Dennis S.............................................. 115
Hale, William................................................ 122
Klaben, Amy.................................................. 131
Kuhn, Amy.................................................... 136
Lowenstein, Roy.............................................. 139
Luken, Sally................................................. 143
McCleary, Cornell H.......................................... 167
Ring, Cynthia................................................ 173
Slemmer, Thomas W............................................ 176
Tavares, Charleta Bell....................................... 182
Weaver, April................................................ 186
Woda, Jeffrey J.............................................. 187
Zawilinski, Fred............................................. 191
Additional Material Submitted for the Record
Ring, Cynthia:
Letter to Hon. James Walsh................................... 195
FIELD HEARING
THE SECTION 8 PROGRAM--COMMUNITY
DEVELOPMENT BLOCK GRANT (CDBG)
PROGRAMS, AND AFFORDABLE HOUSING
IN OHIO
----------
Tuesday, July 29, 2003
U.S. House of Representatives,
Subcommittee on Housing and
Community Opportunity,
Committee on Financial Services,
Washington, D.C.
The subcommittee met, pursuant to call, at 1:35 p.m, at the
Martin Luther King, Jr. Performing & Cultural Arts Complex,
Mount Vernon Avenue, Columbus, Ohio, Honorable Robert W. Ney,
[chairman of the subcommittee] presiding.
Present: Representatives Ney, Jones, Tiberi, and
LaTourette.
Staff Present: Clinton Jones, Counsel; Cindy Chetti,
Professional Staff; and Paula Johnson, Professional Staff.
Chairman Ney. I want to--can you hear me?
I want to welcome everyone here today for the Subcommittee
on Housing and Community Opportunity. We're going to meet this
afternoon to discuss housing and community development policies
in the State of Ohio.
With us today are Clinton Jones, and Paula Johnson--where's
Cindy?--Cindy Chetti. Cindy, raise your hand. And these three
are with the housing committee staff in Washington, D.C., who
have come here for this--for this hearing.
And I want to thank my colleagues who will speak in a
second here, to my right, Congresswoman Stephanie Tubbs Jones
from Cleveland, Ohio, Cuyahoga County; and to my left here--
missing, but he'll be right back--Congressman Tiberi,
everybody, I think, knows him, from Columbus, Ohio, we also
share half of Licking County with Congressman Tiberi; and,
also, to the far left is Congressman Steve LaTourette, who is
also from Ohio, around the Cuyahoga County area. So I want to
thank my colleagues for coming here today.
This is our 17th hearing, and the housing committee
actually started around January 21st of this year, so it's been
very busy. It has two bills out of the house and six bills out
of the committee, all contributing to trying to help with the
area of housing.
As the housing subcommittee began a series of field
hearings--this is the second field hearing outside of the
capitol, the other hearings we had with our ranking member,
Maxine Waters, out in Los Angeles a couple weeks ago--I
promised a series of field hearings, I promised to shift
America's housing debate outside the Washington beltway to
different regions of this country.
Today we focus especially on affordable housing
availability in Ohio, the effectiveness of the Federal
Government's Community Development Block Grant program, and the
Section 8 housing voucher program for low income families.
Within the State of Ohio, affordable housing is essential
for this State to continue to grow and for working families in
order to prosper. The subcommittee and its members of the Ohio
delegation, some of them are here today, are committed to
working with State and local officials on this very, very
important issue.
Today the housing subcommittee continues the process of
listening, learning, and then discussing the situation.
I am certain my colleagues from Ohio would agree that the
best economic development plan for any city or community
consists of three factors: Effective public safety, good
schools, and affordable housing. When one of these factors is
lagging, the community will deteriorate.
In the previous months we've heard a variety of opinions on
causes and solutions to help build communities and prevent
deterioration. While we may not all agree on the possible
solutions, it's important that this committee act prudently and
provide an exhaustive review of all existing housing programs
and determine how regulatory and legislative adjustments could
provide additional housing across the United States.
At the same time, it is fair that the committee consider
new ideas, provided they are fiscally prudent, maximize the
taxpayers' investment, and provide accountability and results
for the individuals that need assistance in this country.
Among the forms that have been discussed is an
administration proposal to replace Section 8 tenant-based
housing vouchers with State-managed block grants.
I introduced this bill at the administration's request and
the request of Secretary Martinez so it could be debated. And
that's, again, why we're here specifically today, but also to
discuss other housing issues.
Rather than contracting with an estimated 2,600 separate
public housing authorities, as HUD currently does, the
department would like to allocate funds to the 50 States, which
could then work with public housing agencies or other entities
to administer the voucher program.
As well as examining the merits of this proposal, the
subcommittee continues to look at other crucial housing
programs, such as HUD's Community Development Block Grant
program, or CDBG, which is what we also discussed in Los
Angeles.
CDBG is one of the primary vehicles for local Mayors and
officials to revitalize our nation's neighborhoods and provide
economic opportunity and hope for millions of lower income
Americans to achieve self-efficiency.
I look forward to hearing testimony from today's panelists
on how the Community Development Block Grant program operates
in the greater Columbus area, and how local development groups
contribute to the effectiveness of the program.
And also we'll be hearing from people throughout the entire
State of Ohio.
And at this point in time I want to thank and recognize the
gentlewoman from Ohio, Ms. Stephanie Tubbs Jones.
Ms. Jones. Thank you. Good afternoon. I'm pleased to join
Chairman Ney and my colleagues from around Ohio to discuss the
issue of housing.
Actually, I used to serve on this subcommittee for four
years, and had a great opportunity to talk about the issues.
Now that I've had an opportunity to move to the Ways and Means
Committee, I still know housing is an important part of any
fabric of any community.
As we go through the upcoming years, specifically in
Cuyahoga County, Ohio, we have a large number of foreclosures
that come about as a result of lack of jobs et cetera, and we
are going to need more and more affordable housing for people
who traditionally may not have been looking for housing--or
affordable housing, as well as the hundreds of people who are
looking for affordable housing throughout Ohio.
I'm pleased to be here. I look forward to the testimony,
and look forward to asking some questions so we can get some
responses on particularly the issue of the block grant for
voucher--excuse me--for Section 8 housing.
Thank you, Mr. Chairman.
Chairman Ney. Thank you.
And next is Congressman Pat Tiberi.
Mr. Tiberi. Thank you, Mr. Chairman.
I want to commend Bob Ney, the chairman of the
subcommittee, for scheduling today's hearing entitled ``Housing
and Community Development Policies in the State of Ohio,'' and
scheduling it especially here in my Congressional district, in
the city in which I've lived my entire life. But I also want to
thank my colleagues, Steve LaTourette and Stephanie Tubbs
Jones, for taking time out of their busy schedules from their
districts to come down here and listen to the folks here in
central Ohio about the issues impacting housing.
The hearing will focus on three topics: The current
operation and administration of Section 8 housing assistance to
families program, Community Development Block Grant program,
and housing production.
I want to thank Chairman Ney for his attention and
dedication to the many housing issues that impact our country.
For this hearing today we hope to learn more about problems
faced by many of our working families and determine how we
might better address their housing needs.
Housing is the number one consumer product in America. And
while the homeownership rate in this country is an impressive
all-time high at 68 percent, there are still some that are
unable to share in this American dream.
It is essential to restore confidence and accountability to
our nation's housing policies by reforming programs that are
underused, duplicative, or hindered by vague objectives.
Despite the fact that more and more people are sharing in
the American dream of homeownership, many working families are
finding it more difficult to find affordable housing.
The nation's lost more than 197,000 units of federally
subsidized affordable housing over the last several years,
including more than 9,500 in Ohio. More than a third of those
units housed poor seniors.
It is essential that affordable housing be made available
to people that need it.
Clearly, we must take steps to encourage new production and
preservation of existing housing stock. Many witnesses
testifying today are working hard every day to provide
affordable housing to those in need. We need to make sure that
they have the tools necessary to enhance and define affordable
housing.
The Section 8 program serves more than 2 million people
throughout the country. In Columbus alone there are 10,000
recipients of Section 8 assistance from the Columbus
Metropolitan Housing Authority.
Recent proposals have been made that I believe threaten to
destabilize the Section 8 program. The current proposals focus
on shifting Section 8 management responsibilities to the States
by converting them into block grants. This idea will not be
effective, in my opinion, because the States have only limited
experience with such programs. The last thing that the Columbus
Metropolitan Housing Authority needs is another layer of
bureaucracy upon it, which is certainly the outcome if these
proposals are to be put into place.
Changes must be made to this program as it loses 2 billion
annually to fraud and other factors nationally. However, I
believe the best solution to Section 8 is to give more
flexibility to local housing agencies.
These local agencies, along with elected officials,
landlords, and others, work together to assure Section 8
provides the proper assistance. It's a simple idea: Local
residents can better address local problems.
Another important issue facing central Ohio is that of the
Community Development Block Grants, CDBGs. While the criteria
established by the Formula A of CDBGs in 1974 and Formula B in
1976 may have been fair and equitable at that time, continued
usage of these formulas, these old formulas, have led to a
tremendously unfair situation in the 21st century.
Case in point is the criteria that we deal with the age of
housing stock in Formula B. Formula B establishes houses built
prior to 1940 as 50 percent of the funding formula. For cities
such as Columbus, which saw the bulk of their growth occur
after World War II, the failure to update this criteria means
aging neighborhoods built in the '40s and '50s, such as the
North Linden area, the Woodland and Joyce area, other areas,
are ineligible for assistance under the CDBJ--BG grant program.
While these neighborhoods were not in need of assistance in
the early 1970s, now they are more than 50 years old. They are
experiencing the same level of need as older cities showed in
the 1970s.
Comparing Columbus to cities whose main growth was prior to
World War II, you can see the disparities that have arisen.
Take, for example, Saint Louis, Missouri, with a population
of just under 350,000 people, it is the 49th largest city in
the United States. In fiscal year 2001, Saint Louis received
over $28 million in CDBG funding. Columbus, the 15th largest
city, with a population of 710,000 people, received
approximately 8.8 million. Similar discrepancies can be found
when comparing Columbus to Baltimore, Pittsburgh, Boston, New
Orleans, just to name a few.
Yes, all these cities share one common theme, they're
smaller than Columbus.
Clearly, the criteria used in the formula needs to be
updated and changed. The age of housing should be indexed to
maintain fairness and consistency across the country.
Mr. Chairman, Ms. Tubbs Jones, Mr. LaTourette, thank you
for coming to Columbus today to be part of this hearing.
We look forward to hearing from our witnesses.
Chairman Ney. I want to thank the gentleman from Ohio.
Congressman LaTourette.
Mr. LaTourette. Mr. Chairman, thank you very much for the
opportunity to be here today. Thank you for inviting us down
here.
I was going to begin my remarks by saying thank you for
having this hearing in our back yard, but it's not really our
back yard. And, as a matter of fact, Congresswoman Tubbs Jones
and I needed a green card to get across the border, being from
the state of Cleveland; but we're very happy--we're very happy
to be here.
And I also want to commend our colleague, Congressman
Tiberi, he was the fellow who approached me with your guidance
a few months ago, indicated that this was an issue that would
be vital to the constituents that he represented, and I'm happy
to be here to aid in whatever questions come about today.
And, Mr. Chairman, I want to commend you for your
leadership. As you mentioned, this is the 17th hearing that the
subcommittee has held, and your interest in this issue is not
only known in the State, but nationally.
The Section 8 housing voucher program, which was started in
the 1970s, and there's no doubt that countless Americans have
benefited from this Federal assistance and have found a means
to put a roof over their heads, over the years, though, this
worthwhile program has fallen victim to the same plague that,
in fact, many government-run programs, in some instances,
inefficiency, a lack of managerial accountability, and, in some
cases, a bloated bureaucracy.
There's no doubt in anyone's mind that the founding
principles the Section 8 program were built upon are still
intact, and are probably more relevant and necessary today than
they were even a decade ago.
The proposal, however, to reform the Section 8 voucher
program introduced by the Bush administration has certainly
generated a tremendous amount of interest and controversy. It
is unclear to me, for example, whether or not States like Ohio
will manage to be successful if the State begins receiving
funding for Section 8 vouchers in direct Federal block grants.
One of the tensions that sometimes exists in Washington, as
we all know, is: Who is better able to take care of problems,
is it the Federal Government or the State government? In this
particular instance, I differ from time to time with my party
and believe that the Federal Government has a role to play and
needs to be an active partner with the States, and we just
simply can't wash our hands and say: State, here, take this.
And I'm looking very much forward to the testimony that we
receive from all of the panelists today as they help guide not
only this subcommittee, but also the full Financial Services
Committee and then the Congress of the United States in
grappling with these important issues.
Again, Mr. Chairman, I want to thank you for having this
hearing today, and I look very much forward to hearing from
everyone.
Chairman Ney. I want to thank all three of my colleagues,
all three members, for their time.
I would note that this is the district work period for the
Congress, and a lot of these members have given up their
personal time and their items that they had scheduled to do to
be here, so I want to thank all of them--all three of my
colleagues for that.
Chairman Ney. And could the witnesses please--please come
forward, first panel.
In the first panel is Bill Faith, Executive Director of
Coalition on Homelessness and Housing in Ohio; LaToya N.
Fisher, a resident, Columbus, Ohio--we'll get the chair there--
Steven Gladman, Governmental Affairs Coordinator, Ohio
Apartment Association, Columbus, Ohio, appearing on behalf of
the Columbus Apartment Association and the Midwest Affordable
Housing Management Association; Dennis Guest, Executive
Director, Columbus Metropolitan Housing Authority; and Cornell
H. McCleary, Commander, PRO-Private Police Training Academy,
Columbus, Ohio; Thomas W. Slemmer, President, National Church
Residences, Columbus, Ohio, on behalf of the American
Association of Homes and Services for the Aging; and Fred
Zawilinski, Executive Director of the Lake Metropolitan Housing
Authority in Painesville, Ohio.
I want to welcome the first panel. This is an official
hearing of the U.S. House, and it's being transcribed. And also
I would note that we're going to operate by the five-minute
rule; each of the witnesses will have five minutes in which to
present their testimony. And, also, without objection, all
members' opening statements are made part of the record, any
additional statements that they want to make, and each of the
witnesses' statements, without objection to the written
language, your statements will be made part of the record.
You'll each be recognized again for five minutes, if there's
additional information, without objection, to be put into the
record, and the members of the committee will have 30 days in
which to ask additional questions without objection of
particular witnesses of the panel.
So when you hear the tone, you've got about a minute to
wrap up, and so we'll hold you to the rule so we can get all
three panels.
I want to thank all of you for being here today, we'll
start with Bill Faith.
STATEMENT OF BILL FAITH, EXECUTIVE DIRECTOR, COALITION ON
HOMELESSNESS AND HOUSING IN OHIO, COLUMBUS, OHIO
Mr. Faith. Thank you, Mr. Chairman. I want to thank you for
taking the time to come to Columbus for this field hearing. I
also want to thank all the committee members for coming;
particularly, Congressman Pat Tiberi, for allowing me to
testify and to offer my comments and suggestions.
I am here representing the Coalition on Homelessness and
Housing in Ohio, better known as COHHIO. We're a statewide
organization with over 600 member groups throughout all of
Ohio's 88 counties.
There are several issues that I want to bring up today. I
have more extended written comments that I've submitted, but I
want to make a few highlights.
I know during this hearing you will be hearing from others
who will talk more specifically about the housing needs here in
Columbus. I wanted to bring to your attention a couple of more
recent national studies.
The reason is this--this crisis that we face in affordable
housing is national in scope and does require a national
response.
The studies I want to point out to you is the most recent
State-of-the-Nation's Housing Report published by the Joint
Center on Housing Studies at Harvard University. One of the key
points of their findings this year--and I included a graph
which illustrates this--there is a 2-million-unit gap between
the number of renter households in the bottom fifth of the
income distribution and the number of physical units that they
can afford to rent.
Also, in that same report, many households working at lower
wage jobs are struggling to keep up with the escalating rents.
I'll just illustrate a couple of these. Of the 2.1 million
waiters, waitresses and cooks who rent, nearly half spend more
than 30 percent of their incomes on housing; more than 40
percent of renter households with an earner employed in child
care, home health care, cashiers, library assistants, maids,
janitors, are similarly cost burdened. If they are the sole
wage earner, renters in several other moderate paying
occupations, like receptionists, carpenters, and electricians,
also have a hard time affording their housing. And I included
another graph which illustrates those dynamics.
I also wanted to point out to you another study, which may
not have come to your attention, but the President's New
Freedom Initiative Mental Health Commission, which was chaired
by Dr. Mike Hogan of the Ohio Department of Mental Health,
recently issued their report, in fact, on July 22nd, and I just
want to provide in my written testimony a brief excerpt from
that report, which I will summarize.
``The lack of decent, safe, affordable, and integrated
housing is one of the most significant barriers to full
participation in community life for people with serious mental
illness. Today, millions of people with serious mental
illnesses lack housing that meets their needs.
``The shortage of affordable housing and accompanying
support services causes people with severe--serious mental
illnesses to cycle among jails, institutions, shelters, and the
streets; to remain unnecessarily in institutions; or to live in
seriously substandard housing. People with serious mental
illnesses also represent a large percentage of those who are
repeatedly homeless, who are--or who are homeless for long
periods of time.''.
All over the country, local and State governments have
stepped forward to provide support for the affordable housing
efforts by creating housing trust funds. In fact, today there
are 282 State and local housing trust funds operating
throughout the United States. In an effort to leverage other
resources to better address the affordable housing crisis,
local governments in Ohio, such as Summit County, Montgomery
County, Toledo, here in Columbus, Franklin County, as well as
the State of Ohio, have established trust funds and dedicated
local and State revenues to provide permanent funding.
In fact, as a result of the recently passed State budget
bill, on August 1st the recording fees will be increased with
the first $50 million proceeds going to the housing trust fund.
There's a similar bill that's been introduced at the
national level, which would create a national version of a
housing trust fund. This bill has very deep targeting, it would
provide flexible resources----
Chairman Ney. That's not our tone.
Mr. Faith. That's a really fancy tone.
Chairman Ney. That's somebody else.
Mr. Faith. It would provide flexible resources to the State
that are deeply targeted to those with the greatest housing
needs.
Chairman Ney. That's not ours either.
Mr. Faith. This legislation has tremendous grassroot
support. There are now over 4,300 endorsements from across the
country, and I've submitted a copy, hopefully for the record,
if you will, Mr. Chairman, of all those endorsers, including
232 from across Ohio.
The national housing trust fund legislation has 204
cosponsors in the house, and I want to thank Congresswoman
Tubbs Jones for being one of them, and encourage the rest of
you cosponsoring this legislation.
There is, I guess, tripartisan support for the bill. 11
republicans have joined. But--and I urge you, Chairman Ney, to
hold a hearing on this legislation. Surely, a bill with this
level of support deserves such a hearing.
I want to add my voice--I know you'll be hearing from other
members of this panel--about the HANF proposal. We are very
much opposed to this proposal. As Congressman Tiberi, I think,
articulated the best, this is a ill-conceived proposal that
would not add any value and simply put the State bureaucracy in
the middle of an already burdensome process of distributing
critically needed rental assistance.
And I work a lot with the State of Ohio, and I know that
they do a great job at many things. But administering a rental
assistance program, I don't believe is one of them. They are
good at production, they are good at tax credit, the bond
programs, the home program, but administering a rental
assistance program, they are entirely ill equipped for. They
would need a hire literally hundreds of new staff to take on
that job.
And, finally, my last comment, Mr. Chairman, is related to
the Section 8 project-based. In the information I received,
you're open to comments on that program, as well. And we--we
are involved in this.
Ohio has 86,000 Section 8 project-based units, more than
any other State outside of California and New York. As you
know, we're going through massive changes in that program
because of all the expiring contracts. And my organization
provides a small part, but an important part, in the average
technical assistance grants that we receive from HUD.
Now, HUD has held up distributing any new funds for this
program, in spite of the fact that the Inspector General went
through a very thorough audit, they moved into our offices for
six weeks, went through all of our records, found no findings.
I think the auditor almost came to tears when she realized they
had no findings after six weeks.
But in spite of no findings, this administration has failed
to issue a NOFA for the past two years for any new funds for
this program. And I encourage you to add an amendment to the
bill which would require them to issue a NOFA to get this
program back up and running.
I know Ms. Jones has spent a fair amount of time--actually
an unfair amount of time--trying to resolve this issue. And I
think the only solution at this point is some additional
legislation to require the administration to get back on the
right track.
So with that, I'll close.
Thank you for your patience, and I'll be happy to respond
to any questions.
Chairman Ney. Thank you.
[The prepared statement of Bill Faith can be found on page
93 in the appendix.]
Chairman Ney. Ms. Fisher.
STATEMENT OF LaTOYA N. FISHER, RESIDENT, COLUMBUS, OHIO
Ms. Fisher. Testimony of LaToya N. Fisher before the House
Subcommittee on Housing and Community Opportunity.
Chairman Ney, Ranking Member Waters, and the distinguished
members of the subcommittee, thank you for allowing me to
testify on the subject of the Housing Choice Voucher Program
and the role of the Columbus Metropolitan Housing Authority and
how it has been beneficial to me.
My name is LaToya N. Fisher. I reside at 3035 Osgood Road
West, Columbus, Ohio 43232. I am a 26-year-old single parent to
four children, two of which I have adopted. I am currently
employed at Ross Laboratories, and I attend Ohio State School
of Cosmetology. My future goals are to complete the courses at
this school to receive a certificate of completion in
technology and further my education to obtain a degree in
nursing.
At this point, I do not have the knowledge to comment on
the national implications of changing the Housing Choice
Voucher Program; but I would like to share with you my
experience about being a participant in CMHA's Housing Choice
Voucher Program.
I applied for Section 8 assistance in 1996. At the time my
son and I were living at home with my mother and father, and I
wanted to live on my own. I received my voucher several months
after completing my application, and I was successful in
finding an apartment that could fulfill my living needs at that
time.
Two years later, I had another child and moved into a
house. I enrolled in the Family Self-Sufficiency Program in
February, 2003. I was able to obtain information about this
program through my realtor. This program was the beginning of
my becoming a first-time homebuyer.
I was able to achieve the goal May 23, 2003. Without CMHA's
homeownership program, I would not have been able to achieve
this goal so soon in my life. Because of the benefits from this
program, I was able to find a home in a nice neighborhood and a
stable environment for my children. I am grateful to HUD and
CMHA for the assistance provided for my family and myself.
With the housing assistance, I am able to pay for school
and afford the cost of everyday living for my family.
Since I have started this program, I have built a strong
relationship with the coordinators of the FSS program, Ms.
Carol Winchester and Ms. Michelle Barthelemy. Throughout the
process of finding my home, I have had to speak with either one
or both of these ladies on a daily basis, so I would know which
steps to take next.
I am proud to say that I am very pleased with my
relationship with CMHA staff--with the CMHA. The staff is
friendly, courteous and professional.
CMHA has provided a valuable resource to our community. I
would not want any changes to the Housing Choice Voucher
Program that would reduce its current impact upon the thousands
of Housing Choice participants who reside in Columbus, Ohio.
However, I would like to make a few suggestions on how to
improve the program and weed out the people who don't plan to
better their lives with this--with the help of this program.
One, require all able-body individuals to work or attend at
least 30 hours per week at school or work. With responsibility,
these people can feel a sense of self-importance in their lives
and not live by society's standards, but want to achieve more
in life.
Number two, take more of an aggressive against participants
and landlords that are not following the CMHA rules.
Number 3, have the landlords attend the inspection with the
inspectors so that they will understand clearly what needs to
be fixed and for which reason. Hold payment on landlords that
do not keep up on routine maintenance.
Number 4, find a way to acknowledge the workers for their
hard work.
And Number 5, if possible, give more CMHA vouchers to
assist families that are motivated to better their lives and
current situation so that one day they can also live out the
American dream and become a homeowner, also.
I would like to thank you once again for your time and
interest. And I would be happy to answer any questions that you
may have about my comments and suggestions.
Chairman Ney. I want to thank you for your fine testimony.
[The prepared statement of LaToya N. Fisher can be found on
page 100 in the appendix.]
Chairman Ney. Let's move on to Mr. Gladman.
STATEMENT OF STEVEN D. GLADMAN, GOVERNMENTAL AFFAIRS
COORDINATOR, OHIO APARTMENT ASSOCIATION, COLUMBUS, OHIO,
APPEARING ON BEHALF OF COLUMBUS APARTMENT ASSOCIATION AND
MIDWEST AFFORDABLE HOUSING MANAGEMENT ASSOCIATION
Mr. Gladman. Thank you, Chairman.
Chairman Ney and distinguished members, my name is Steve
Gladman. I serve as the Executive Director of the Columbus
Apartment Association as the Governmental Affairs Coordinator
for the Ohio Apartment Association. Both organizations are
affiliated with the National Apartment Association.
I also am the Executive Director of the Midwest Affordable
Housing Management Association, which is affiliated with the
National Affordable Housing Management Association.
All three of these organizations represent companies
dedicated to provide quality rental housing.
My involvement in these three associations provides me
unique insight into the Section 8 rental assistance program.
I believe it's critical to meet the housing needs of low
and moderate income families, and that improving the Section 8
program is a central part of meeting those needs. However, I
urge Congress and HUD to enact reforms to the existing Section
8 program that will encourage apartment owner participation;
and, in turn, increase housing availability to voucher holders.
Although it is well intentioned, I think HANF will not
reduce administrative costs to participating rental owners and
will not maximize program benefits to--for residents.
I support the Section 8 program as a means for private
housing owners to provide affordable rental housing to families
who need it.
More apartment owners would participate if the costs of
renting to voucher residents were more comparable to the costs
of serving unsubsidized residents. Eliminating transactional
barriers will encourage more owners to participate in the
program. More owner participation will result in greater
housing choice and increased voucher utilization rates.
But do I think the Section 8 program needs to be improved?
I think there are four simple things:
First, fund the program adequately; second, ensure that the
rental property owners are paid on time; set fair market rents
so they're truly fair; and, finally, eliminate inspections and
replace them with a process that is helpful to the resident and
owner alike.
Funding: I urge continued funding for the existing program
structure administered by HUD. Historically, many have
criticized the Section 8 appropriation structure because too
much funding remained unused each year. Effective this year,
Congress enacted changes to minimize recaptures and national
utilization rates have risen to nearly 96 percent.
I believe that the existing successful appropriations
structure should be supported.
Timely payment: PHAs are required to make prompt subsidy
payments to apartment owners. However, subsidy payments are
sometimes untimely because of antiquated systems or processing
delays. Just as owners would not regularly accept late rental
payments from conventional residents, they should not be asked
to accept late subsidy payments.
Some PHAs already use automated systems, but it would be
helpful if HUD would provide technical assistance, funding, and
other support so all the PHAs have the capability to utilize
automated payment systems. HUD should also establish some
incentives to make sure that the owners are paid on time.
Fair market rents: I urge that HUD enact a more efficient
process for PHAs to apply for higher fair market rents that are
more reflective of the submarket rents. I also propose changes
that would allow PHAs to raise the payment standard to 120
percent of FMR without HUD approval and to afford PHAs
increased flexibility in requesting higher payment standards
when necessary. FMRs must be set high enough to encourage owner
participation; and, in turn, create a sufficient supply of
apartments and choices for voucher holders.
I thank HUD for raising the current FMR level to the 50th
percentile in 39 high-cost areas. But that level is
insufficient in areas with outdated FMRs and in certain high-
cost submarkets. In many areas of Ohio, FMRs have not been
updated in years and are well below market rates in both high-
cost and moderately priced areas.
Inspections: Finally, I propose eliminating what many
owners see as the greatest barrier to program participation,
the inspection process.
The current inspection requirement is a losing proposition
for all involved. The owner doesn't like the inspection because
it delays resident move-in. The PHA struggles to keep up with
the demand for inspections, and realizes that the inspection
requirement discourages many rental owners from participating
in the program. The resident has to wait to move in and has
fewer housing options because of the limited owner
participation.
Rental housing is a competitive business, and housing
quality is market driven. Local housing codes and State
landlord-tenant law already provides adequate protections for
residents.
I urge that the inspection requirement be eliminated and
the funds currently used for inspection be used to establish
resident-owner liaisons. These liaisons would be PHA staff that
work with both the resident and the owner to ensure both
parties are benefiting from the Section 8 rental assistance
program.
If a housing quality issue exists, the liaison could
intervene on behalf of the resident; if appropriate, a housing
quality inspection could be performed. If there's a payment or
resident relationship issue that exists, the liaison would work
with the owner to resolve these problems.
This process would focus on establishing a long-term
relationship with owners and residents rather than focusing on
a once-a-year inspection process.
I believe the existing Section 8 program, with the
improvements I've just noted, will make affordable housing
available for more Americans.
Thank you.
Chairman Ney. Thank you for your testimony.
[The prepared statement of Steven D. Gladman can be found
on page 108 in the appendix.]
Chairman Ney. Mr. Guest.
STATEMENT OF DENNIS S. GUEST, EXECUTIVE DIRECTOR OF THE
COLUMBUS METROPOLITAN HOUSING AUTHORITY, COLUMBUS, OHIO
Mr. Guest. Chairman Ney and other distinguished
representatives of the Subcommittee on Housing and Community
Opportunity.
I'm Dennis Guest, I'm Executive Director of the Columbus
Metropolitan Housing Authority, which is responsible for the
operation of 3,814 units of public housing and the
administration 9,732 budgeted Section 8 vouchers throughout
Columbus and Franklin County.
I might also add, since one of our residents talked about
the self-sufficiency program, that we currently have 500
residents registered in the program with over $480,000 in
escrow accounts.
There are three issues on which I will comment:
A, the HANF block grant proposal; B, the potential
improvements to the Section 8 program; and C, PHA selected
project-based vouchers.
First, let me state that CMHA is opposed to the current
proposal to block grant the voucher program.
And I dare say, most other State PHAs would be in the same
boat. And there are three reasons for my opposition.
Number one, the concept of the voucher program could or
should be coordinated with the TANF program is weak.
Specifically, of the 10,000 vouchers currently under lease with
CMHA, only 24 percent of households, heads of households with
TANF, in Ohio called Ohio Works First, income, the majority, 76
percent, of our clients are seniors, the disabled, pensioners,
and those working with modest incomes.
Number two, it is proposed that the States could better
administer the program because they are more aware of the local
needs, and by allowing increased regulatory waivers could more
adequately meet such needs.
Members of the subcommittee, by passing the QWRA bill and
by allowing the PHAs to utilize vouchers in a project-based
manner, you have already encouraged the customization of the
voucher program to the community level, an outstanding
achievement.
For example, CMHA has customized its program to meet the
needs of the City of Columbus, Franklin County, the Alcohol
Drug and Mental Health Board, MR/DD, Community Shelter Board,
United Way, et cetera. In one instance specifically, The Ohio
State University and CMHA have partnered to provide housing
assistance to young mothers with children who are students at
OSU. Special supportive services provided by the University
will allow these mothers to pursue degrees and begin successful
careers without the need for TANF.
I have attached a list of our partnering agencies and
nonprofits.
I am hard pressed to understand how a State-administered
program could function more effectively at our city/county
level. Rather, this committee should consider allowing PHAs
more flexibility provided there is local governmental and
community and private sector support.
Number three, it is difficult to comprehend the transition
of the voucher program to a State block grant program being
anything other than a time-consuming burden. If the State of
Ohio alone were to administer the program, absorbing just our
portfolio of housing would require inspecting 14,000 to 15,000
units a year, conducting 14,000 to 15,000 annual
recertifications a year, processing 30,000 individual landlord
checks, establishing relationships with over 2,200 owners of
property, hearing a thousand grievances, and negotiating 12,000
unit rents. Plus, dealing with 27,000 residents currently in
our program.
I might add, if you let the State of Ohio take all of these
numbers and multiply them by about eight, then you'll find out
what the volume of work would be at the State level.
Of course, the State could elect to subcontract their work
to the PHAs, or the State could even decide not to participate
in the program. All three scenarios are possible.
It is unlikely that this will create anything less than an
administrative nightmare for HUD.
B, if the goal is to improve this section, the voucher
program, I suggest the following for your consideration, and
Mr. Gladman and I are probably on the same page:
We have variations of this, but we would allow PHAs to
inspect units every two or three years, rather than yearly,
based on unit history upkeep by landlords.
At least 85 percent of the landlords here in Columbus, I
would say, are diligent, professional and maintain quality
units. Annual inspections of their property is wasteful of
their time and the PHAs' time and of the residents' time.
Fewer inspections should result in cost savings for both
the public housing authorities and eventually to HUD, and
result in more individual landlords participating in the
program.
Number two, rent recertifications for senior citizens could
be done every two years instead of yearly. For most senior
citizens, you're seeing very little, if any, change in their
annual income on a year-to-year basis. And rather than hauling
them in on a yearly basis, money could also be spent and time
saved, in terms of administrative savings in just doing that
every two years.
Number three, this is where we get into some real technical
stuff that some people may or may not be interested at this
hearing right now, establish a LOCCS system of funding for
Section 8. LOCCS stands for Lines of Credit Control System, and
it's the method in which housing authorities draw down money.
It could be set up on a yearly basis schedule. It's very
similar to the way we get subsidy and other funds right now,
rather than individual requests for often only two months at a
time, which are paperwork intensive.
Finally, I would like to emphasize that the project-based
program is tremendously successful locally. Because of the use
of vouchers as financial backing, CMHA has been able to work
with the Community Shelter Board and other nonprofit housing
providers and support service agencies to develop over 200
units of housing for the homeless. Additionally, 48 new family
units and 30 senior units are being developed with National
Church Residences by utilizing project-based vouchers.
Thank you very much for allowing me to make this
presentation.
Chairman Ney. Thank you.
[The prepared statement of Dennis S. Guest can be found on
page 115 in the appendix.]
Chairman Ney. Mr. McCleary.
STATEMENT OF CORNELL H. McCLEARY, COMMANDER, PRO-PRIVATE,
POLICE TRAINING ACADEMY, COLUMBUS, OHIO
Mr. McCleary. Honorable Members of the Subcommittee on
Housing and Community Opportunity.
I want to thank subcommittee chairperson, Bob Ney,
committee members, and Congressman Pat Tiberi for bringing it
to Columbus.
Columbus, Ohio is a community under siege, and it's quickly
becoming the murder capital of America. Our children are
getting shot while they play and while they sleep. During
daylight hours, people's homes are being broken into where
they're either raped, robbed or both. Just recently, three
young people were tied up and shot in the head, for the lack of
a better description, executed.
In our war on terrorism, we are not as worried about Saddam
Hussein as we are worried about the boys in the hood, little
Jermaine and Booboo.
Dead center of this horrific development in Columbus is the
Section 8 low income housing communities. These communities
have become unintended breeding grounds for violent and
destructive criminals.
The public housing program was designed to provide safe,
decent and affordable housing to low income families. In
reality, the program has evolved to become a multibillion-
dollar growth industry for politically connected developers, an
economic nightmare for small and emerging property owners, and
pure hell for too many low income families.
The Bush administration advocates shifting most of the
management responsibility of the program from the Federal
Government to the States by converting the program into block
grants. Currently, the program loses billions of dollars to
fraud and other factors. If Congress were to, in fact, reshift
management of the program to inexperienced States, fraud and
waste factors in the program would go through the roof. Not to
mention the possibility of States, for budgetary reasons, never
earnestly attempting to resolve community crime issues
associated with the program.
My formal written testimony that I have presented to the
subcommittee for consideration in the matter of achieving to
the community's ability, making a factual argument that we must
earnestly go after the boys in the suites, as well as the boys
in the streets; the blood flow--and I must say, mostly the
blood of African-Americans--must be stopped; the omissions of
powerful and politically connected developers and property
owners, quote, their respectability, must be reconciled in
favor of safe and stable communities, and this reconciliation
must be done by the Federal Government. If this challenge is
left up to the States, God would have to be the Governor to get
the job done.
Thank you for your invitation to speak.
And I will at this time entertain any questions that the
subcommittee may have.
Chairman Ney. Thank you.
[The prepared statement of Cornell H. McCleary can be found
on page 167 in the appendix.]
Chairman Ney. Mr. Slemmer.
STATEMENT OF THOMAS W. SLEMMER, PRESIDENT, NATIONAL CHURCH
RESIDENCES, COLUMBUS, OHIO, ON BEHALF OF THE AMERICAN
ASSOCIATION OF HOMES AND SERVICES FOR THE AGING
Mr. Slemmer. Chairman Ney, Members of the Subcommittee.
Thank you for inviting me today. I'm President of the
National Church Residences, but today I'll be speaking on the
American of Association of Homes and Services for the Aging. We
think we have a unique voice as it relates to affordable
housing and services for affordable housing for seniors.
Also, as affiliate, is the Association of Ohio
Philanthropic Homes and Services for Aging, and it represents
350 not-for-profit primarily faith-based organizations
statewide.
I want to call your attention, my original testimony where
we address several issues, including the Section 202 production
programs, social service coordination, affordable housing and
preservation and production. But first let me echo some of the
sentiments of the panelists here as it relates to concerns of
the administration's proposal to block--block grant Section 8
voucher programs as reflected in HR 1841.
I have a couple of practical examples I thought you might
be interested in, as relates to Columbus. In your district,
Congressman Tiberi, under construction right now is a 300-unit
affordable housing development on Waggoner Road, east of 270,
in the eastern part of Columbus, in a recently annexed
property.
In that development we've established a partnership with
the Columbus Metropolitan Housing Authority to develop 75 units
of high-quality, affordable, service enrichment housing for
senior citizens, and we've used HOPE VI funds, tax credits, tax
exempt bonds, home funds from the city and State, as well as
city TIF funds. Really, a complex development.
We also have on that same location 55 units of senior
housing that's been developed under the Section 202 program, in
cooperation with the local HUD office, and a 176-unit family
affordable housing development, which includes 50 four-bedroom
houses. And in that family development, we have worked very
closely with the Columbus Metropolitan Housing Authority to--
and, Dennis, you said 48, but 50--53 Section 8 vouchers on that
property to serve the poorest of the poor.
And the emphasis I want to place on this was the close
cooperation and working relationship with the Columbus housing
authority, and their understanding of the local situation
really brought that about, and especially as it relates to the
need for four-bedroom housing industry for families.
A second development in Westerville, Ohio, is starting
construction as a 75-unit senior housing facility that was
developed in partnership with CMHA. They've purchased the land
and are leasing it back to us to help us with our targeted
development costs. Furthermore, they provide 30 project-based
Section 8 vouchers so that we can serve the poorest of the poor
in those developments.
Both of these developments, I think, speak to the success
of the current program. It's operating well. Section 8 vouchers
are being administered well. And the need for close local
cooperation between the development community and the public
housing authority has been met and really is working well.
It's our opinion that implementing HR 1841 will not improve
the program. It is exactly the situation here in Columbus that
really enables us to customize and meet the special local
needs, which I think will be lost if this is administered at
the State level.
It's hard to imagine that transitioning the voucher program
to the States will be anything more than a time-consuming
burden, as Mr. Guest mentioned.
It's really our experience that the existing program
currently operated locally provides the flexibility and the
partnership and the local coordination that you need.
If I could speak just briefly about the Section 202 program
that your committee oversees. Many not-for-profits, that's
their primary vehicle for developing affordable senior housing
for services. And in our written testimony we have several
specific suggestions on how to make the program work better.
But one of them, I thought I would bring to your attention,
HUD has still not implemented, after three years, your
committee's intent, which was passed in the legislation, which
allows us to combine the 202 program with tax credits so we can
expand affordable housing supply in this country. I would
submit to you that that's embarrassing.
Furthermore, HUD needs to speed up the process of
refinancing its older portfolio of Section 202 housing. Some of
those loans are financed at 9-1/2 percent interest. Right now,
I think today, you could refinance those at 4-1/2 percent
interest, and that money could be used to expand services and
improve those properties. To date, that program has not been
implemented. There's only been three applications approved so
far in Washington.
I submit that this committee ought to really look into
that, and instead of HUD dragging its feet on those
applications, they ought to be pushing sponsors to refinance
and take advantage of that lower interest rate environment.
Finally, we're grateful for your support of the Social
Service Coordination program. It is vital for senior housing. I
know you know it. But on the written testimony, we express
concerns that are also shared by the American Association of
Service Coordinators, that the 203--2003 NOFA on service
coordination we think adversely affects both the quality and
the training program of service coordinators. We would urge you
to take a look at that.
Again, we want to thank you for your time.
Chairman Ney. Thank you.
[The prepared statement of Thomas W. Slemmer can be found
on page 176 in the appendix.]
Chairman Ney. Mr. Zawilinski.
STATEMENT OF FRED ZAWILINSKI, EXECUTIVE DIRECTOR, LAKE
METROPOLITAN HOUSING AUTHORITY, PAINESVILLE, OHIO
Mr. Zawilinski. Thank you, Congressman Ney and Congressman
LaTourette for the invitation to speak to the entire
subcommittee this afternoon here in Columbus.
My name is Fred Zawilinski, and I'm the Executive Director
of the Lake Metropolitan Housing Authority headquartered in
Painesville, Ohio. We are a suburban county to the east of
Cleveland.
The first point I'd like to make about the HANF proposal is
that you're not going to see the results that the TANF proposal
and welfare reform did in the last several years. First of all,
you're not going to see the decrease in caseloads that has been
celebrated as the success of TANF. The reason is, is that we're
not operating an entitlement program; we're operating a program
in the Housing Choice Voucher which has extensive waiting lists
in most communities, if the housing authority's, indeed, even
taking applications at all. Successes will be replaced by other
folks from that waiting list. And sanctions do not carry the
same impact under the Section 8 program that they would under
welfare reform.
Simply put, sanctioning a family for not fulfilling work
requirements not only penalizes the family for that, but also
jeopardizes the business relationships housing authorities and
those tenants share with landlords dependent on that steady
stream of income that is promised through the contract that we
sign with them.
The Housing Choice Voucher is not a failing program. It's--
its primary emphasis is not on families in the sense of TANF
recipient cash assistance. There are approximately only 14
percent of our families that we assist that are receiving cash
assistance, and a much higher percentage of our families are
receiving Social Security and disability assistance.
The Lending for Housing Commission has referred to the
program as flexible, cost effective and successful under the
commission. And the Housing Choice Vouchers' already
administered at the most local level possible here in Ohio.
Flexibility offered to us in preferences, payment standards
allow us to adapt to the local needs of our community.
And our governance is local as well. Our boards are
appointed by locally elected officials, they are responsive to
their communities, and--and offer the opportunity to provide
input to every individual in our community.
Additionally, housing authorities uniquely have the
opportunity to administer Section 8 because of our--of our
experience in public housing. Simply put, landlords have a
greater trust for us because we share many of the
responsibilities of a landlord through our public housing
program.
I serve on the board of the National--or I'm sorry--the
Lake County Apartment Owners Association, and that
participation, from the landlord's perspective, allows me to
have greater input into apartment policies in our community;
but also has provided the trust needed to develop the business
relationships needed to expand our program over the last
several years.
One of the justifications for making the HANF program is
that there are hundreds of pages of HUD regulation and guidance
that would be pared down at the Federal level. Indeed, that
probably would happen. However, some of that guidance is
offered to us through the Housing Choice Voucher Guidebook,
which was designed in the last year, and provides tremendous
relief as far as guidance to offering the program on a national
basis.
If given to the States, the opportunities for technical
assistance and guidance is diminished because we are now
dependent upon Columbus for that same guidance as every housing
authority or administrator of a Section 8 voucher program would
be dependent upon their State capital.
The myriad of regulations that housing authority and, more
importantly, the families that receive our housing assistance
would indeed grow. They would not--not only be responsive to
the Federal guidelines established for the program, but the
States and indeed local communities would be still designing
implementation policies that would affect their lives as well.
One of the other arguments that has been made is that by
paring the number of HUD-administered Section 8 recipients from
2,600 public housing authorities and nonprofit organizations to
approximately 50 States and a few territories that we would be
streamlining a program and that HUD would be better able to
manage the program. I find this curious in an environment where
they've established a very good indicator of Section 8
management through the SEMAP evaluation process, and more
importantly in the development of information technology
through PIC and the LOCCS system that Mr. Guest described
where, indeed, management of 26,000 housing--2,600 housing
authorities should not be much more difficult than
administering 50, and simply shifting that burden to the States
does not provide for the program efficiency of the people--to
the people that most need it, the families that are--are
involved in our program.
This is not to say that the Housing Choice Voucher Program
is not in need of some changes and improvement. However, I
would--I would make the analogy that it's more like taking your
car in for a tune-up than buying a new car. The greater
flexibility in setting H2S inspections to ensure that housing
quality is maintained is indeed a good point that Mr. Guest
made and others will make.
Many of our landlords are very responsible, many are
constructing new housing specifically for the program. And we
have the opportunity to waive those inspection requirements.
Rent calculations could also be simplified to--to allow
families the opportunity to have less burden on them.
And I'd also like to mention, in closing, that you've
offered in the last five years the opportunity for housing
authorities to explore deregulation to the Move Into Work
program. You've created this demonstration for housing
authorities to take essentially a block grant program, modify
it, and design rules that will fit their local community. I
urge you to take a look at those results and see what
innovative housing authorities in our communities have already
done.
I thank you for your time this afternoon, and wish you well
for the rest of this afternoon.
[The prepared statement of Fred Zawilinski can be found on
page 191 in the appendix.]
Chairman Ney. I want to thank all the witnesses.
We'll be in a series of questions.
I just want to note to Bill Faith, in Los Angeles we had
someone raise an issue about homelessness and Section 8 and
something that HUD did not proceed with. And we have been in
the process of finding out why that didn't happen. I don't know
if you're aware of that or not. But it was raised to our
attention.
So we'll--because every hearing, somebody raises something
that we don't know that HUD hasn't done. So homelessness was
raised out there. Today you raised the--what we did three years
ago about combining the 202 and the--and the tax credits, so
we'll follow back up on that as we're following back up on
homelessness. So I just wanted to assure you of that.
Just a generic question, I guess I'd want to ask, of people
that--you know, when you look at the State of Ohio, and do you
feel that the present piece of legislation that we presented
for discussion, when it comes to--when it comes to HANF, do you
think it's locked tight enough to guarantee that the State
couldn't move monies?
The only reason I mention that, the State acquired the TANF
monies for Head Start--Mom and Dad used to call it stealing--
but the State acquired those monies and moved those monies.
So, you know, is there--do you think it's--if we did this
that there's a foolproof way that State--the State would not be
in a budget crunch if any money----
Mr. McCleary. Can I respond, Mr. Chairman?
I think that you have to look at it this way: Basically,
any money that the State can steal, they will steal it if
there's a way to do it, it will be done.
I mean, one of the problems of the program is a lot of
independence, for a lot of people to get things done, and
because we've never had the enforcement apparatus in place to
stringently enforce the rules that we have. To give it to the
State that's not heretofore--have no idea that bureaucracy, the
money that they would need, just to get in place to take the
program, it would be a nightmare.
I think they would do it. They might not do it
intentionally, but they probably would do it.
Mr. Faith. Mr. Chairman, I just experienced very close-up
and personal the State budget process this year. And I have to
tell you that they were some four-plus billion dollars in the
hole when they started. They looked for money under every rock,
and even uprooted a few trees to see if there was any money
under there. They raided rotary funds, they looked--they raided
unclaimed funds, they raided any funds they could find, raised
taxes, raised fees, which--some of which were very positive, by
the way.
However, they looked for money everywhere they could find
it.
And I don't--I don't think it's the administrators of the
program that would shuffle money from here to there. But I
think as States struggle with this very difficult economy and a
lack of resources to simply fund basic State government
services, you could bet there would be supplanting of--of
funds. I mean, if they can get away with it, they would do it.
Because they feel they're forced to. They don't have the
resources that they need to manage their own affairs.
So I think that's a fear.
But I think there's a more fundamental problem, and that is
the State is simply not in the ongoing rental assistance
business. They--that's not their expertise; they have no
history with that. They administer production programs and do a
decent job of that, because it's basically a onetime
commitment. They monitor for ongoing compliance, but they're
not involved in the manner that Mr. Guest described with that
kind of hands-on year-to-year basis with these owners and
tenants.
And I don't--and I just don't think that's their expertise,
I don't think they want to get into that business, and I think
that's one of the bigger problems with the proposal.
Chairman Ney. Thank you.
On the comment Mr. Guest made, is everybody pretty well in
agreement about the rent recertifications for seniors, we could
do it for every two years? And also the PHAS to inspect the
units every two to three years rather than yearly? Does
everybody feel pretty comfortable with that?
Mr. McCleary. If there is a waiver where there is immediate
inspection upon complaint. I think if there's a process if
there's a problem, has to be well in place that the resident
could ask for that at any rate.
Chairman Ney. My final question, I did want to ask you----
I'm sorry. Yes?
Mr. Gladman. Mr. Chairman, if I may just add to what Mr.
McCleary said. I think that that process for inspection, in my
testimony, I'm suggesting eliminating it and going with a
liaison person to resolve problems, because I think that we
become focused on this process of inspection and really we kind
of lose sight of housing quality in general. There's other
issues besides the physical aspect of the properties. The
point-in-time inspection, you could inspect it one day, it
could deteriorate the next. There needs to be a process that's
ongoing that provides the resident some support as well as the
owner to make this program really work.
But right now we're spending a lot of time and energy and
frustrating a lot of people to do these point-in-time
inspections.
Chairman Ney. Thank you.
My time's run out. But, Ms. Fisher, I did want to
afterwards just get some of the ideas you had about--ideas of
how we would reward people who have been hard workers, maybe
later on we could.
Ms. Fisher. I just think they should be acknowledged. I
don't have any ideas as far as how----
Chairman Ney. Acknowledge them.
Ms. Fisher.----but I just think they should be
acknowledged.
Chairman Ney. Thank you.
My final question, Mr. McCleary, I noted in your testimony,
you were talking about systematic--systemic, I'm sorry,
problems relating to developers and private property owners
having appropriate security-related budgets. So that would be--
what would that be?
Mr. McCleary. Well, the current cap, I think, you have like
a 10-percent administrative cost that goes to the property
managers. The problem with that, they have--most property
owners have to choose between maintenance and security and
other issues, so the end result, maintenance taking priority to
security unless they have a total crises. Then, the traditional
response is, once the crisis is over, go back to inadequate
security.
One of the biggest things that hurt expansion of the
program and people welcoming this program into the community is
both the fear and perception of crime that's done in these
communities. And putting different monies available to the
property owners who do have security budgets and the legal--
legal budgets to accommodate that, not only would it stabilize
the community, but I think it would do a great job in changing
the whole perception of this program in the broader community,
and make more people welcoming in engaging the program.
Chairman Ney. Thank you.
The gentlewoman.
Ms. Jones. Thank you. Thank you, Mr. Chairman.
I would like to thank all of you for testifying here this
afternoon.
Mr. McCleary, I support many of the commentaries that you
made. One of the things that we spoke out about last year was
the fact that HUD reduced the drug elimination grant dollars
going to public housing to address many of the various issues
that you raised. And I guess our horses weren't just quite loud
enough, because they still eliminated some of the money anyway.
But I want you to know that your comments are not falling
on deaf ears. There are a lot of us who know of many of the
issues that you raised with regard to that.
Let me quickly, Mr. Guest, bring you greetings from Terry
Hamilton Brown, who is now actually the head of University
Circle, Inc., in Cleveland, but she told me--I told her I was
coming, and she said, tell everybody she said hello.
I want to talk briefly about this inspection piece. And
I'll talk to Mr. Guest about it or anyone else.
The dilemma I have comes from a history of having been an
attorney for landlords as well as an attorney for tenants back
in the day, as my 20-year-old son says, and dealing with the
landlord-tenant laws and dealing with the--in someone's
testimony, they said that the landlord-tenant laws were
convenient or--adequate enough to address some of the issues
that are raised by people in Section 8 settings.
I would say, based on that--the background that I have that
it would be very, very important that the housing authorities
maintain as much control as possible over inspections because
when you start going to the court system to resolve an issue
that ought to have been resolved between you and the landlord
and the tenant, it presents a problem.
I don't understand--and I need a short answer, because we
don't have very much time--what you're saying that the--a
person could do, or you were talking about having a tenant
representative or something.
Mr. Gladman?
Mr. Gladman. My suggestion is to take the existing funding
that you use for inspections and transfer that staff and make
them really problem-solvers and resolvers. So if there is a
housing quality issue, they can do a housing quality
inspection. But there are a lot of issues that are unrelated,
that affect the quality of life, whether it's resident disputes
or unfairly administered program rules as far as the owner.
Ms. Jones. So you would be happy, then, if we put some
money in for residents' disputes and other quality-of-life
instances----
Mr. Gladman. The purpose----
Ms. Jones.----not necessarily diminishing inspections, you
just say there are other issues that ought to be addressed.
Mr. Gladman. Yes. I think there are broader issues, and to
focus--really, the inspection is the primary control, if you
will, and it's a point-in-time inspection. The market drives
that--what happens now is----
Ms. Jones. Let me ask you this, Mr. Gladman: You know we're
coming on the end of the 20 years where--period where there
were all these contracts with these different buildings to
provide housing, and now they are not renewed because the
market value far exceeds the dollars that people are getting.
When you start going into some of those facilities and looking
at how they've deteriorated over the years, how do you justify
no inspection?
Mr. Gladman. Well, from the project basis, there certainly
is an inspection process, as you know, I think the react
process.
But what happens currently, because inspections are such a
barrier--an example, in the Columbus market we have several
companies that have project-based properties all over the
country and operate a variety of subsidized programs, but will
not accept any vouchers in their market-rate programs because
of all the transactional barriers because of inspections.
My argument is if you eliminate the inspections or at least
streamline, as Mr. Guest said, you will get more property
owners that are providing a quality product, and there will be
greater choice for voucher holders. That's one of the issues
now is the choice.
Ms. Jones. I hate to cut you off, but I want to go to a
couple of issues before the day is gone.
Talk to me, Mr. Slemmer, about what barriers there are to
the construction of additional affordable housing across the
country. A real short answer, if you could.
Mr. Slemmer. In talking about senior housing, the barriers
are basically the limitation of funds. To develop affordable
housing, you have to have subsidies on the construction, the
debt service side, or subsidies on the operations side. Both of
them are very limited.
One of the things that I've mentioned before to this
committee is that the preservation of housing is, therefore,
even more important, because you could preserve the affordable
housing stock that we have at much less cost than we have--we
have for new construction. So I would really urge you to
consider that as we look at ways of--of expanding or continuing
to supply affordable housing.
Ms. Jones. Thank you.
My time is up.
I just want to go on the record in opposition to the
proposal for block granting Section 8. I'm opposed to block
granting Head Start. I'm opposed to block granting everything
that we can block grant. Because there are so many issues that
the Federal Government has requirements that will not be
imposed by the State of Ohio. And I won't--I won't get partisan
up here today, so I'll leave that alone.
Chairman Ney. Thank you.
On a bipartisan basis, I have to let you know, the good
Congressman Tiberi, I introduced his proposal at 7:00 in the
evening, and he opposed it at 6:30.
Mr. Tiberi. Thanks, Mr. Chairman.
Let me--let me continue down the road that Ms. Tubbs Jones
talked about that was mentioned in several of your testimony,
and that is this issue of inspections again from Ms. Fisher to
Mr. Gladman to Mr. Guest.
One of the issues that I've heard a little bit about from
those who may be proponents of this block granting is the
frustration with this particular issue, the inspection issue.
Mr. Guest, can you give me a--give the panel an idea of the
breakdown in the Columbus Metropolitan Housing Authority of the
Section 8 program of residents in private landlord facilities
versus public facilities? Do you know that breakdown?
Mr. Guest. Well, we have--if you're looking at the size of
programs, we have 10,000 vouchers right now. We're a little
overleased over what we're allotted. So we're--we're past that
hundred percent category here.
We have 27,000 residents in the Section 8 program. In the
public housing program, we have about 8,000. So there is no
doubt that it is a predominant program in Franklin County. And
it's critical that it work well.
And in Congress we get going about the--we talk about the
inspections and how all of this works. I've not seen the
answers in two or three years. Obviously, Steve and I have
variations. I think there is general agreement that it doesn't
work the way it does now. And I think the key thing is that--I
would propose, maybe on an experimental basis, maybe far more
conversation, as to what are the alternatives to the current
system of inspections? Are there criteria that could be set up
where provided--you know, I would guess every two to three
years somebody does a really good job, every time we've been
out there, it's up-to-date, bang, bang, bang, bang, all right,
it's three years before we have to go back out.
Others who have been more problematical, maybe it's every
six months you need to go back out. Or maybe you need to have a
liaison system.
But right now it does frustrate very good owners to say,
well, I'd rather have--I mean, I hear from the other side of
it, you know, every once in a while, you know, I don't want to
have to go deal with somebody and spend time on an inspection
when I've been leasing my units to other people, and they have
the common sense to determine themselves whether that's a good
unit or a bad unit.
So I think we make great leaps and set up cumbersome
procedures that may only affect a small number of people, we
need to focus more on them. So what we can do to generate a
more localized version of that, or at the national level, if
you can just give more flexibility and say, come up with
something at the local level that makes sense, that most
everybody can agree on, I think would be really helpful.
Mr. Tiberi. Mr. Zawilinski, have you heard some of the
same, similar issues up in Lake County?
Mr. Zawilinski. I agree that we have actually much
different inspection needs than--than inner city Cleveland and
Cuyahoga County faces in the sense that our housing stock is
much newer. We get the reports, for example, on children that
we receive, elevated blood levels for lead poisoning, and we
may have one a year in our county for all houses, not
subsidized housing. And certainly in many of the cities that is
a much greater issue.
If we could grant to owners the opportunity to--to be
waived from inspections for two or three years, the safeguard
to that is that the tenants or an owner can request an
inspection at any time to verify that our inspection standards
are still being met.
Mr. Tiberi. You don't believe you have authority today to
do that?
Mr. Zawilinski. To waive the annual inspection? I know we
don't have the authority to do that. We have to do it every 12
months.
Mr. Tiberi. Thank you.
Mr. McCleary. Congressman Tiberi, may I make a comment----
Mr. Tiberi. Yes.
Mr. McCleary.----listening to them?
Can I suggest we can put in place a sworn affidavit
process, that the property owner signs an affidavit the unit
meets the criteria set by CMHA, or whatever, with substantial
penalties to anybody that perjured on the affidavit?
I think that would accomplish the objective and save a
whole lot of money and time. That way you only focus on getting
the bad people. So if a complaint is validated that they lied,
then there would be a heavy penalty for them for doing that.
Mr. Tiberi. Thank you.
One last question because I know my time is about ready to
expire.
The issue that Mr. Gladman brought up of timely payments
and fair market rents, and an issue that we've heard about
today with respect to the number of housing units that are
available in a marketplace, whether that marketplace be
Columbus, Cincinnati, Cleveland, whatever city, is that an
issue that you and Mr. Guest have heard about in terms of a
national issue? Or do you guys have some flexibility in your
local housing authority with respect to that issue with private
owners?
Mr. Zawilinski. I would say for our housing authority,
we've been timely based on the HUD-established timeliness
standard.
Mr. Tiberi. What does that mean?
Mr. Zawilinski. Well, it means that we get our checks out
to our landlords within five days, business days, of when we
get the money from HUD. And if the 1st happens to fall on
Saturday, on Labor Day weekend, we don't get our checks out at
best until the 4th. Landlords are typically expecting those
checks out on the 1st. To us, we've been timely; to a landlord,
they may not think so.
Mr. Tiberi. Very good point.
Mr. Guest. I was going to say, that's a very similar
problem that all of us have.
Another issue that you may hear about is the whole project-
based issue of payments on that. Now, that has been very slow.
Like I said, we've got a lot of project-based developments we
deal with, and there is a case--we're only doing two-month
renewals oftentimes, the dollars--it's paperwork intensive. I
know we've had some owners within the last four or five months,
it's been as much as 20, 30 and 45 days before we have gotten
the money from HUD. And we're not talking about a thousand
dollars. We're talking about in some cases over $100,000. These
are large developments. That is particularly--we can all
imagine what that means.
Mr. Tiberi. Thank you all. Thank you all for coming.
Chairman Ney. Mr. LaTourette.
Mr. LaTourette. Thank you, Mr. Chairman and Fred, for
both--thanks, Fred, for driving all the way from Lake County,
and thank you more for describing why we call Lake County God's
country in that part of Ohio.
I--you would come to see me with a couple other fellows
earlier in the year, and I'd like to just ask you to comment--
I'll go ahead and turn the spotlight on you, and then maybe ask
Mr. Guest to make an observation from Columbus's point of
view--but on the omnibus appropriations bill at the beginning
of this year had a provision that indicated that there was a
cap placed upon the amount of administrative fees to be placed
in an agency's reserve fund and in general reserve funds that
could be maintained by a housing authority. If I remember--and
you can certainly, in your answer, tell me if I remember it
right--indicated--and then we'll go to Mr. Gladman and other
folks' comments about timely payments to the landlord--but when
you get to the end of the year, and you have to roll out the
checks for the first of January of 2003 or 2004, it was--many
times that those reserve funds made the difference between
whether or not you were able to make the bills and the payments
for the--for the landlords, particularly when--and I'll take a
slap at the republicans and democrats--we didn't get our work
done, and don't have an appropriations bill in place in a
timely fashion on September the 30th of whatever year we're
dealing with.
Could you make an observation about the impact that you
think that provision of the omnibus appropriations bill had?
And, Mr. Guest, then I'd like you to share any thoughts
that you have as well.
Mr. Zawilinski. The issue that you referred to is the
recapture of administrative fee reserves that we had as the
housing authority during that bill. And for us it provided a
buffer so that were HUD to be late in releasing functions, or
were Congress, in appropriating funds, that we have the ability
to at least meet a month, perhaps two, if it broke down to
that--that level of payments to our landlords on a timely
basis. By recapturing those funds, we've lost a tremendous
amount of flexibility in not only working our program, Section
8 program, but it also alleviated us of the opportunity of
being able to use those funds for other housing-related
purposes in our community.
It also has created an atmosphere and attitude that we have
very little incentive to make equipment and programs stretch
because the risk of recapturing those funds means that there's
no reward for getting an extra year out of our inspector's car
or computer.
And so replacement of equipment on a much more quick basis,
you know, will be more of an emphasis, because we have no
incentive to save.
Mr. LaTourette. And so basically if I--we've run into this
problem with a number of programs on Capitol Hill. So basically
the effect of the recapture provision was you might as well
spend it if you've got it, because they're just going to take
it back at the end of the year anyway.
Mr. Zawilinski. Well, and in our case, not only was it a
recapture of funds from the previous year, but it was a buildup
of surplus of funds over many years. And so the rewards of
frugality and responsible administration were--were punished.
Mr. LaTourette. Thank you.
Mr. Guest, do you have a similar situation here in
Columbus?
Mr. Guest. Yes, we're in a similar situation. Obviously, it
cuts down on your flexibility to run into this situation where
the funds aren't coming on time.
But there's other issues that came up. For example, Mr.
Slemmer mentioned that we help--that we're helping on
developing a senior community up in Westerville. Over the
years, we have accumulated money from being efficient. That
land was purchased with the Section 8 funds in order to make
that program work.
So there is an incentive to make other programs come about
because of it. And if that incentive, as Mr. Zawilinski pointed
out, is removed, it is--gets to be, let's just spend it all
this year. It's a terrible attitude, but that's what inevitably
will happen.
Mr. LaTourette. And to both of you, too, a question: In
your experience, have either of your authorities returned
Section 8 vouchers unused? Have you not been able to completely
subscribe those?
Mr. Zawilinski. We have not used the number of vouchers
issued; but we've more than used the number of dollars issued,
attached to those vouchers. Because of the rising cost in
utilities and rental charges, we've always been able to use our
dollars.
Mr. LaTourette. And, Mr. Guest.
Mr. Guest. We haven't returned any. Like I said, we're
overleased right now, so there won't be any coming back.
Mr. LaTourette. Thank you very much.
Thank you, Mr. Chairman.
Chairman Ney. Thank you.
I want to thank a very good panel. I appreciate your input.
It's important to the process. And appreciate your
participation here at the U.S. House field hearing.
And I want to thank the members for their time, also.
And with that, we'll move on to Panel II.
Thank you.
We're going to move on immediately to the second panel. So
if you don't want to stay for the second panel, move on.
The subcommittee will come to order for Panel II.
We'll begin Panel II, and introduce the Mayor.
We welcome you, Mayor.
Mayor Coleman of Columbus, Ohio, meet Congressman Tiberi.
Mr. Tiberi. Thank you, Mr. Chairman.
It's a pleasure and honor for me to introduce my Mayor, the
Mayor of the City of Columbus, Michael Coleman, who was elected
to City Council in the early 1990s, and really doesn't need to
be introduced to anybody in the audience, but at least to the
panel, was later elected council President, in 1999 was elected
Mayor of the City of Columbus, and will be reelected to a
second term in November.
Most importantly from my perspective, though, he is a
constituent and a friend. Thank you for testifying today.
Mayor.
STATEMENT OF HONORABLE MICHAEL B. COLEMAN, MAYOR OF COLUMBUS,
OHIO
Mr. Coleman. Thank you very much. Thank you.
Chairman--Chairman Ney. Congressman Tiberi, who is my
Congressman, and is doing a great job for his district and the
City of Columbus and central Ohio. Congresswoman Stephanie
Tubbs Jones, who's also my friend, welcome back to the City of
Columbus. Congressman Steve LaTourette, thank you very much for
being in the great City of Columbus.
And I want to also thank all of you for bringing this
hearing to our city and choosing the City of Columbus to talk
about such an important issue as we are presented with here
today.
Housing. Housing has been a very important part of my
administration, because in this city we view housing and
residential opportunities as a way to build strong
neighborhoods, strong families, and a better quality of life.
In our neighborhoods we view them as key to the survival of our
city. They're the lifeblood of our city. That is where we live,
where we work, and where--and where we play and raise families.
In Columbus we're doing a great deal to address many of our
needs locally. The City of Columbus has helped finance or
participated in approximately 6,000 residential units during my
first four years as Mayor. And when we first took office, we
felt that housing was so important, working with Columbus City
Council, and Charleta Tavares, who is here today, that we
pulled together what's called--what we called the Affordable
Housing Task Force of members of the community who are involved
in housing to address many of the issues in our city, in a city
where only 49 percent of our residents own a home when the
national average is about 68, 69 percent. There is a great
disparity there.
We looked at things such as tax incentive for housing, land
banking, streamlining the development process, driving down the
cost of buying a home, and, very importantly, the establishment
of a local housing trust fund and corporation.
The Franklin County/Columbus Affordable Housing Trust
Corporation was subsequently put together. It's a collaboration
between the county commissioners and the City of Columbus where
we utilize a dedicated resource of funding, that being the
hotel-motel tax of about $1 million annually, to revitalize
neighborhoods, increase homeownership, and make housing more
affordable for people in our city.
Presently, the affordable housing trust corporation has
some 800 units through this trust fund.
In addition, we've created five neighborhood investment
districts, we call them NIDs. And these investment districts
are areas of our city where there has been a disinvestment of--
of businesses, people moving out of the area, fewer students in
our schools, a proliferation of vacant lots. And in these five
areas we indicated and designed a program where if someone were
to move into the area, build a home on one of these vacant
lots, or substantially rehab a home, they will receive a 15-
year tax abatement and live there tax-free for 15 years.
We have $3.4 million commitment of HOME funds for
supportive housing as well. And in 2002 through 2003 we
committed $6.3 million in HOME funds, upgrading three large
Section 8 projects, to preserve affordable housing and enhance
their contribution to our neighborhoods.
Let me just touch on remedying the concentration of Section
8 projects in Columbus neighborhoods.
One of our major efforts is to renovate and upgrade Section
8 housing, and that is being led by Community Properties of
Ohio. They now own one of the largest scattered site Section 8
projects in the entire nation, more than 1,100 apartments and
249 buildings located in the central city. Through new
homeownership agreement, we are now--we are not only helping
leverage the rehabilitation of the housing stock, but also
ensuring that these residents can continue to receive the
affordable housing that they need.
Decentralization of these affordable units must also occur
in order to improve the quality of life of the neighborhoods.
Community Properties is currently working with members of
Congress to design a solution that would allow Section 8
subsidies and use restrictions to be transferred to properties
in areas of the city where such properties are not heavily
concentrated.
In other words, share the burden among everybody in the
City of Columbus, not just in one area or two areas of our
city. We all have that responsibility and obligation.
This will help ease the concentration of poverty and allow
new investments to flow into neighborhoods. I look forward to
working with the legislature in this regard.
Let me just touch on Section 8 vouchers. I believe that the
proposal to block grant the Section 8 voucher program to States
should not be enacted in this country. The Section 8 voucher
program administered through our local public housing authority
is the most effective way to assure local families' housing
needs are addressed by a local community and not by the State
of Ohio or any State, for that matter.
Let me touch on the need for greater Federal commitment for
housing and community development.
In Columbus the combination of Federal home resources and
local funds are still not enough to meet the housing needs of
the very low income households. Those earning less than 30
percent of the area median income in the City of Columbus.
That's why it is important that additional Federal resources be
considered for increasing and preserving the supply of
affordable housing in the City of Columbus.
One option is the creation of a national housing trust
fund, something that Congress is--has recently introduced and
is entertaining. By leveraging additional Federal funds with
the efforts of our local housing trust corporation that was
established in 2001, we can increase the production of
affordable housing and better address the housing needs of low
income households in the City of Columbus.
I also ask that you consider the creation of a
homeownership tax credit. An initiative that can have as great
an impact on homeownership rate in Columbus as the low income
housing tax credit has had for affordable rental housing.
Columbus needs to increase the percentage of homeownership
rate, which is, as you know, 49 percent.
We believe that a homeownership tax credit can
significantly increase the homeownership rate by attracting
needed investment in new home development and complementing
local efforts to stimulate owner-occupied housing in our older
neighborhoods.
Let me just touch on Community Development Block Grants.
As in so many cities, parts of Columbus's urban core are
still experiencing high levels of poverty, declining
populations, and low homeownership rates. Columbus has received
about $8 million in CDBG entitlement in the year 2003 to
directly serve such areas. Yet, this amount is significantly
below other cities of similar size and demographics in the
country.
The population of the older City of Columbus approximates
that of several other--other urban areas, such as Baltimore,
Memphis, Seattle and Honolulu. But Columbus receives less CDBG
funds than any of these cities.
The need for revitalization in Columbus is just as great as
in those other cities.
HUD should look at their current allocation formulas and
update the criteria so that cities like Columbus, which
experienced major growth after 1940, can get a balanced amount
of CDBG funds.
I urge you to partner with us to take a look at how the
CDBG formula works and make recommendations on the distribution
of these funds to reflect the community development and housing
needs of our city and in other cities.
In summary, let me just touch basically again on the four--
four or five areas that we're asking that you take a look at.
Number one, transferring of Section 8 subsidies and use
restrictions on the--one of the largest Section 8 projects in
the nation, Community Properties, in order to reduce the
concentration of subsidized housing in one area of the city, so
they can be shared in all areas of the city.
Number two is the proposed Housing Assistance to Needy
Families should not be enacted. Local administration of Section
8 voucher program is the best way to address local housing
needs.
Number three, we need additional Federal resources, and
they should be considered for increasing and preserving the
supply for affordable housing. And one option is the creation
of a national housing trust fund. We think that could go a long
way when you partner with local communities around the country,
particularly those communities that have trust fund
incorporations like the City of Columbus.
And number four, the creation of a homeownership tax credit
to increase homeownership.
And number five, take a new look at how the CDBG formula
works, and make recommendations on the distribution of these
funds to achieve a balanced allocation of CDBG funds to reflect
the community development and housing needs of our city and
other cities.
I thank you for the opportunity to testify. Thanks for
holding this hearing in Columbus.
And I also want to thank those who have come out today to
testify from all over the State of Ohio.
Mr. Chairman.
[The prepared statement of Hon. Michael B. Coleman can be
found on page 90 in the appendix.]
Chairman Ney. Thank you, Mayor, for your testimony and your
office's participation in helping us with this hearing.
I really don't have any questions. Just a couple
observations, though.
I have supported the bill by Rob Portman, which would be of
interest to you, with the tax credit.
And then the issue of the CDBG was raised in California,
too. They're looking at 1950-some statistics, is what they're
looking at.
Mr. Coleman. Yeah.
Chairman Ney. Which opens it--that back up to be a huge
food fight, because some cities are going to get less. We're
probably all on the same page here, but other cities and other
States that wouldn't be so happy with this. But it's an issue
that keeps cropping up.
And I'll move on to the gentlelady.
But one--one statistic that you said shocks me. Columbus is
48 percent housing ownership?
Mr. Coleman. About 49 percent. It was less than that a few
years ago.
Chairman Ney. This was my second home for 22 years between
Belmont County and here going to Ohio State and also the
legislature, and I've seen amazing growth in this city. And
it's just shocking, I guess, with that growth not everybody has
bought places to live.
Mr. Coleman. Yes. And it's something that I saw back in
'99, '98, that we felt was important to deal with because in my
view--and the reason why homeownership is so important in our
city, and the rest of America, not only for the American dream,
but when people have ownership in their neighborhoods, they
have a vested interest in the success of their neighborhoods.
And our rate is far too low. And it's going to take a lot
of help from the Federal Government to increase homeownership
rates in our community and all neighborhoods of our city.
Chairman Ney. Gentlelady.
Ms. Jones. Thank you, Mr. Chairman.
Mayor Coleman, good afternoon. I'm so pleased to be in
Columbus once again.
I have not had an opportunity to say this publicly, I'm so
very proud of the work that you do. It just makes my chest
stick out. When I grow up, I want to be like you, run
unopposed.
But I--and your words are loud and clear, and I support
many of the things that you've said.
I am interested in talking for a moment in your testimony
about the disbursement of low income housing so that it's not
all concentrated in one area. Tell me what that will do for the
City of Columbus.
Mr. Coleman. Well, first of all, I think there's an
obligation for everybody to be of help in this area, and every
neighborhood, and not just one or two neighborhoods in the City
of Columbus. Because we all have an obligation.
Number two is that I believe it's important, for example,
downtown--I call downtown everybody's neighborhood--but I
believe like for our downtown that there has to be every income
level represented in our downtown. Historically, we haven't had
very much housing in our downtown. We've developed a plan, a
policy, and now we're actually building units in our downtown
now. But it is representative of the entire economic spectrum,
the entire market within our community, the high income, the
low income, and everywhere in between.
And, in fact, the very first project we were involved in
the City of Columbus was a low income housing effort and
homeless effort downtown called Commons at Grant. That is now
constructed on Grant, where there are a hundred units, and it
took a great partnership between a lot of people, a lot of
entities to make it happen.
But I think it makes stronger neighborhoods, a better
quality of life, and spreads the opportunity among all
neighborhoods in our city.
Ms. Jones. Do you have a large network of community
development corporations in the City of Columbus?
Mr. Coleman. Well, it depends on what you compare it to.
We've been actively--in fact, I've created a community
development corporation, a couple of them now, and about to
create a third one for this area you're in right now called the
King-Lincoln Development Corporation.
We have community development corporations. They need
strengthening in the City of Columbus. They need tools. They
need financing. They need capacities. And that's something that
we could use some help on as well.
Ms. Jones. I asked that question because in Cleveland we've
had great success with community development corporations with
a lot of the housing development that has occurred, and I am
sponsoring a piece of legislation called the Seed Act, which
provides capacity for community development corporations to
train the members of the board because they're traditionally
neighborhood folk, to offer them economists, architects, et
cetera, et cetera, et cetera.
That's my only paid political announcement. So anybody out
there who would be interested in that, please call your
Congressperson.
And I will close with that, Mr. Chairman.
Again, Mayor Coleman, it's so good to be with you this
afternoon, and always good to see you. And I promise I'll be in
touch.
Mr. Coleman. Thank you very much, Congresswoman.
Chairman Ney. Thanks, gentlelady.
Mr. Pat Tiberi.
Mr. Tiberi. Thank you, Mr. Chairman.
I'm going to put an ad in for Ms. Jones, as well, for the
legislation, I'm a cosponsor of that legislation.
And I'd make one request of you, Mayor, is before you
leave, if you could put in--a word in for Ms. Jones, and make
sure that she spends a lot of money here in Columbus before she
goes back to Cleveland.
Mr. Coleman. That's my Congressman right there.
Mr. Tiberi. Thank you and your staff for your work on these
issues, and for communicating with me and my staff, I truly
appreciate that, Director Barbash as well and his staff on
these issues and other issues.
In fact, I was at the Homeless Families Foundation this
morning, and both of your names came up, and your working with
them on trying to partner with the Federal Government and the
city on trying to improve their situation on the near west
side.
I really appreciate your relationship on the CDBG issue and
look forward to working with you, and maybe not just with you,
with other Mayors who face similar problems in their cities,
who are being shortchanged because of the formula, and working
with those Mayors and their members of Congress, maybe we can
win that food fight, because it will be a food fight, with
other members of Congress and those Mayors who now benefit from
that formula.
So thank you for your leadership.
Mr. Coleman. Thank you.
Chairman Ney. Congressman LaTourette.
Mr. LaTourette. Thank you, Mr. Chairman.
Mayor, it's a pleasure to be in your company. Although
you're the Mayor of Columbus, your reputation certainly goes up
to the part of the State that I'm from, and you are clearly an
example of a chief executive of a city and how it should be
run, and I congratulate you on that.
Mr. Coleman. Thank you.
Mr. LaTourette. You don't have to worry about Ms. Tubbs
Jones, Mr. Tiberi, she's cut the wide slot through many malls.
And I'm sure--I am sure she'll do her part in the Columbus area
as well.
Mayor, my question, I was intrigued with--Mr. Faith was
here on the first panel, and he talked a little bit about the
same issue, being that of the national trust fund. One of the
difficulties that I have with it, not being a cosponsor, even
though it's tripartisan, as he indicated, it has the only
independent, Mr. Sanders of Vermont, who is the lead sponsor,
is how he proposes to fund it. So I was interested in your
idea. Do you devote all of the hotel-motel tax to that purpose?
Mr. Coleman. No. We have set aside a specific percentage of
the hotel-motel tax collections towards providing for
affordable housing in the City of Columbus. So that if you
spend the night here in the City of Columbus----
Are you spending the night here?
Mr. LaTourette. I am.
Mr. Coleman.----a percent of your bill that you will pay
will go directly to providing housing for somebody in our city.
Mr. LaTourette. Okay.
Is it possible to get the Tiberi discount while I'm here,
too?
Mr. Coleman. As long as--as long as you use the word
``Tiberi.''.
Mr. LaTourette. Can I ask you what is the rate that your
hotel--what is the percentage?
Mr. Coleman. Oh, let's see here.
You've got me on that one.
Mr. LaTourette. Can I ask you and, maybe you can get back
to it, but what percentage of whatever your rate is, is set
aside for----
Mr. Coleman. It's set aside by a council act, set aside,
every year it goes into a fund, and the Housing Trust
Corporation uses that to leverage private financing for
affordable housing.
It's about 20 percent of the bed tax. What's the bed tax?
Mr. LaTourette. 80 percent more.
Mr. Coleman. Yes.
Mr. LaTourette. And that generates about a million dollars,
you're saying?
Mr. Coleman. Well, yes. The good thing about setting aside
a percentage is that as that fund grows, as the--more people
come to Columbus, and that's why we're glad that you're here,
the more people that come to Columbus, they pay more for hotel
rooms, and the bed tax goes up, and, therefore, they're
supporting some of our neediest people in our city in the
process.
Our bed tax also pays for emergency human services, part of
it goes to the general fund, part of it goes to the arts and
the visitors bureau as well.
Mr. LaTourette. I think that's--where I'm from, the bulk of
it goes to the visitors bureau, if I have it right. And your
idea of sort of separating it, or trifurcating it, or whatever
the word for splitting it in fives is, is probably an idea
that's worthy of studying in other areas of the State. And I've
learned something today.
And, again, I appreciate the opportunity to hear you
testify, I appreciate the benefit of your insight.
And, Mr. Chairman, the last question, this has nothing to
do with housing: Mr. Mayor, is it Jerry Springer or Eric
Fingerhut that gets your----
Mr. Coleman. I guess we'll just have to see.
Mr. LaTourette. Thank you, Mr. Chairman.
Chairman Ney. I can see why you're unopposed, and now I
understand why our colleague, Steve LaTourette, keeps winning.
Any further questions of the Mayor?
Mr. Coleman. If I might, I might want to add on to the
discussion with--about the community development corporations.
Because what I have found as Mayor of this city is that
community development corporations, if they have the capacity,
are very, very successful in providing economic development
opportunities and housing opportunities in this city.
And we need to hold them up, we need to give them
additional tools and additional capacity.
And I can see many ways where the Federal Government can be
of assistance.
Chairman Ney. Thank you, Mayor.
Appreciate your time.
Mr. Coleman. Thank you.
Chairman Ney. And we'll move on to Panel III. Panel III:
Mr. Tiberi. While the chairman makes his way up here, I
would like us all to give our thanks to Barbara Nicholson, the
Executive Director--Barbara, can you wave?--of the King Arts
Center and her staff for doing a wonderful job in accommodating
us today in this wonderful facility.
Thank you, Barbara.
Chairman Ney. I want to welcome our third panel.
And we--first, we have Bambi Baughn, the Deputy Director of
the Community Action Commission of Fayette County, Washington
Court House, Ohio; Walter Cates, Sr., President, Main Street
Business Association, Columbus, Ohio; Roberta Garber, Executive
Director, Community Research Partners, Columbus, Ohio; Amy
Klaben, President and CEO, Columbus Housing Partnership,
Columbus, Ohio; Cynthia K. Ring, Executive Director, Allen
Metropolitan Housing Authority, Lima, Ohio; and April Weaver, a
resident of Columbus, Ohio.
And with that, we'll begin with Bambi. Thank you.
STATEMENT OF BAMBI BAUGHN, DEPUTY DIRECTOR, COMMUNITY ACTION
COMMISSION OF FAYETTE, COUNTY, WASHINGTON COURT HOUSE, OHIO
Ms. Baughn. Well, thanks for the opportunity to submit
testimony on housing policy in Ohio to this subcommittee.
Thank you, Chairman Ney, for convening this hearing.
I'm the deputy director of Community Action Agency in
Washington Court House, Ohio. We are not part of Columbus. We
are 45 miles south of Columbus. We are contiguous to Ross
County.
My written testimony addresses the subcommittee's questions
concerning affordable housing production. And it includes a
description of the housing programs and activities of our
agency and a rural perspective of the housing needs and
activities in the State of Ohio, especially the difficulties in
developing housing in rural areas compared to developing them
in an urban area.
So in this brief oral presentation, I'm just going to focus
on what we're doing in our agency in Fayette County, I'm going
to emphasize on homeownership programs. Because in the rural
counties we have access to USDA rural developments, or as we
always call it back home, the Farmers Home Administration, and
we've found that homeownership under USDA is a good option for
affordable housing.
The Community Action Commission of Fayette County is a
multipurpose organization. We've been in Fayette County for
over 35 years. Fayette County is a rural county. We have 28,000
people total. And our agency is just one of a few social
services in agencies in the county.
And besides the housing program, we operate two Head Start
centers, we have the public transit system, we offer home
winterization, emergency assistance, we have health clinics and
a dental clinic. We have numerous programs for the elderly and
services to the families with children.
The housing programs created by our agency cover the entire
continuum of housing services. We have prevention programs for
persons facing impending homelessness. We operate an emergency
shelter and transitional housing for the homeless.
Our agency owns and operates a single-room occupancy
facility for the homeless that provides permanent supportive
housing for 17 single adults. That particular facility does
have Section 8 project-based vouchers with it. So that's my
experience with Section 8.
And we're also involved in several rental communities, and
we've used a variety of funding for that, which is tax credits,
USDA 515, we've done some housing trust fund money from the
State, and we've also used the HOME money from HUD, mainly as
gap funding for tax credits.
Our most successful housing activity, however, is our
homeownership program, which we operate almost exclusively
through USDA funding.
Our program's called Self-Help Housing, and we have the
only mutual Self-Help Housing program in the State of Ohio,
although I do think there is one getting ready to start
operating in Athens.
Our program's funded through a USDA 523 grant. We began
operating this program in 1995, after nearly five years of
planning and predevelopment.
Since it began, our agency has received five USDA 523
grants and four Self-Help Housing Opportunity Program or SHOP
awards from HUD, totaling $1.75 million at leveraging
additional funds for a total economic impact to Fayette County
of 8.9 million.
133 homes have been built through our Self-Help Housing
program.
Under this unique program, the agency organizes families in
groups of six to five to eight, and we assist them in applying
for USDA Section 502 single-family mortgages. We work with them
as they put in over 1,000 hours of sweat equity in the building
of their own and their neighbors' homes. No one moves into
their homes until all the houses in the group are finished.
A skilled construction supervisor from our staff works with
the families, providing training and technical assistance
during construction. A family worker is on-site to monitor the
family's schedules.
After the families complete the homes, they have done 65
percent of the construction labor themselves, the families have
approximately $10,000 of true equity in their homes. These are
not soft second mortgages that need to be forgiven over a
period of time. This is true, honest equity.
In our Self-Help Housing program, we've used the housing
assistance council's HUD-funded Self-Help Housing Opportunity
Program. We received $850,000 in SHOP funds from HAC, and
another $800,000 in loans from HAC's Rural Housing Loan Fund.
The SHOP funding helps us buy land and put in
infrastructure for our Self-Help Homes. Without this SHOP
money, we would have a very difficult time doing Self-Help in a
subdivision as we're doing now, because the cost of getting the
land, putting in the infrastructure is high.
For many rural families, homeownership through the USDA
programs is another option in affordable housing. In our Self-
Help program, a very low income family of 50 percent of the
area median income can qualify for as low an interest rate as 1
percent on a 502 loan. The Self-Help Homes generally appraise
for over $90,000; with the sweat equity, the mortgage amount is
usually around $82,000. For an actual family in our program,
their 502 mortgage is $80,588.76. The family's payment over a
33-year period is $245.77 per month for their mortgage, and
with tax and insurance added to the mortgage, the total payment
is between 350 and $400.
This is equal to or less than rent prices in our area.
And in spite of the benefits, homeownership is not an
option for all families. A family's tenure limit in an area is
short, renting may make more financial sense. And many of the
families that come to our agency have very poor credit, making
it impossible for them to qualify for a mortgage at that time.
We do spend time with them to get their credit improved.
Another program I wanted to discuss with this committee,
because it's growing in Ohio, is Youthbuild. The program
provides academic and job training services to low income
dropouts between the ages of 16 and 24.
Chairman Ney. I'm sorry. I just wanted to note the time has
expired. If you could please just sum it up.
Ms. Baughn. Okay.
The 13 Youthbuild----
Chairman Ney. We will accept the rest of the record.
Ms. Baughn. Okay.
There are 13 Youthbuild sites in Ohio for rural, non-urban.
I have the list of towns that they're in, if you are
interested. And it's going to become very important in Ohio
because we're the third highest State with Youthbuild centers.
Chairman Ney. Thank you very much.
[The prepared statement of Bambi Baughn can be found on
page 75 in the appendix.]
Chairman Ney. Mr. Cates.
STATEMENT OF WALTER R. CATES, SR., PRESIDENT, MAIN STREET
BUSINESS ASSOCIATION
Mr. Cates. My name is Walter Cates. I am Founder and
President, CEO, of Main Street Business Association. And I
would like to thank the members of this committee, Mr. Ney,
chair; Mr. Tiberi, my Congressman from Columbus; and Mr.
LaTourette, and Ms. Stephanie Tubbs Jones. Appreciate your
being able to be here.
I'm just very glad to be at this hearing, this table of
individuals. I asked them to take a picture so I can show it to
my 89-year-old mother to let her know I'm still functioning.
I'm the only guy sitting here, and I feel proud of that.
But out of all of the talk that we've been doing this
afternoon, I've been listening, everybody's talking about the
housing market, the problems with housing, affordability, and
the need. I have my statement already presented in writing, so
I will not talk from that.
But when we have these needs for housing, does anybody
think about the impact of the economic development in our
community?
Because if we just pack people in affordable housing in the
central city, which is where they have gone, because I started
out with this process with getting a first HUD-funded
recreation center by Chalmers P. Wylie, the Congressman from
our community, on Main Street, called the Blackburn Recreation
at South 18th and Main Street. That was when I couldn't swim at
the YMCA or anything else. So Congressman Wylie saw the benefit
of that, and he provided a HUD grant in 1968. I was with the
East Central Citizens Organization, first federally funded
program in the nation from the Office of Economic Opportunity.
The second opportunity I had to work with Congressman Wylie
was to secure the funding for the Urbancrest--Urbancrest Hollow
under the first black elected Mayor, lady Mayor, Mrs. Ellen
Walker Craig, and Homewood Builders was sponsoring that, and he
has always stood firm to do what he could to help develop our
community.
We haven't talked about the problem that has hurt us
greatly in being able to deconcentrate housing; and that's
exactly what we're going to have to do with this huge portfolio
purchase by Broad Street Management.
We have not talked about the fact that the 49-percent
homeownership of housing in the central city has been sort of
sidetracked due to redlining from the banks and from the
insurance companies. Now, that's a reality. We've got predatory
lenders running around throughout our State, and the State
would not allow the local communities to deal with predatory
lending, which goes after our senior citizens, people who
sometimes have a house that's cash rich but unable to pay for
the kind of flipping that they do of those mortgages. So that's
another thing.
In Columbus we've got an issue called Win-Win and
annexation. Win-Win protects the major suburban communities,
like New Albany and other kinds of communities that are bumped
up against Columbus, who want our water but don't want our
children in their school districts. So you can locate next to
New Albany and have a Columbus address but send your kids to
the New Albany schools, those who can afford to buy close at
hand.
Now, those are the facts that we've got to deal with. Some
part of it is just because of our local zoning laws, we
understand that, so we're not going to flip everything over and
blame the Federal Government for our local problems, because we
don't have the guts to take on this type of things that are
happening in our community.
How should I know?
Because I was born and raised in Columbus, and I was past-
President of NAACP in 1973, and I filed a lawsuit against the
police and the fire and the Columbus Board of Education, Penick
U.S. College Board of Education.
The police and the fire because two friends of mine,
Vietnam era veterans, couldn't get a job who had returned home
and applied for the police department. My one brother applied
for the fire department.
And the school systems were horrendous. So I filed suit
about the desegregation because all the central city schools
did not have air conditioning, nor carpet. The one on Main
Street that elementary school has now been totally rebuilt, in
the wintertime the coal furnaces that they had, had the kids--
they couldn't heat the building, so the kids had to wear their
gloves and their hats and coats in school. In the summertime
they would have to open the top floors on third and use these
big, heavy-duty fans to blow air and circulate around in there,
and had bats and bugs and all kinds of things.
When I filed that lawsuit, one of the settlements was is
that they demolished all the central city schools that were
falling down as a means of sort of placating the citizens.
So we've got problems on both sides.
One strength that I would like for our Federal Government
to look at is letting the local HUD office have the strength to
do the job they should do. These folk here at the HUD office
are like a bunch of high-paid secretaries. They basically just
send everything to Chicago, send everything to Washington, and
it can't get dealt with because there's no decision-making
authority.
So if anything that you can do, hold the local folk into
account, but give them the authority to make decisions so that
they can help the community. Because those of us who have been
at this 35 or 40 years, we know what's needed in the community,
we just can't get nothing done about it.
Chairman Ney. Thank you.
[The prepared statement of Walter R. Cates can be found on
page 84 in the appendix.]
Chairman Ney. Ms. Garber.
STATEMENT OF ROBERTA GARBER, EXECUTIVE DIRECTOR, COMMUNITY
RESEARCH PARTNERS, COLUMBUS, OHIO
Ms. Garber. Thank you, Chairman Ney and Members of the
Committee.
My name is Roberta Garber, and I'm Executive Director of
Community Research Partners. We are a nonprofit partnership of
United Way of Central Ohio, the City of Columbus, and the John
Glenn Institute at OSU.
I would like to briefly touch on two areas today: One is to
talk about research we have done on housing needs in central
Ohio; and to talk just briefly about a topic that has already
been mentioned a couple of times, the allocation of Community
Development Block Grant resources to urban areas in Ohio.
There are three areas of housing needs that we've looked
at: One is affordable rental housing needs; the other deals
with housing condition needs and the third is homeownership
needs.
The testimony that I've presented to you in writing has
data and sources on these topics, but I'd like to just touch on
them briefly.
Since renter households typically have lower incomes than
homeowners, they comprise the largest group in central Ohio
with housing needs. We've found that 75 percent of low income
renters are cost burdened. That is, they pay more than 30
percent of their income for housing. And in 2002 a household
had to earn more than $25,000 a year to afford a two-bedroom
apartment at fair market rent in Franklin County.
We've identified a large deficit of rental housing
affordable to the lowest income renters, those at or below
poverty level. That deficit is estimated at 22,000 units.
There are few affordable rental units in central Ohio near
the suburban areas where job creation is happening.
Since 1996 we've lost over 1,200 privately owned HUD-
assisted units from the affordable housing stock through opt-
outs and prepayments; and with those that are expected to opt
out in the near future, that represents 12 percent of that
housing stock that will no longer be in the affordable stock.
It all adds up to persons still being homeless in the
community and over 7,500 persons a year experiencing
homelessness.
If we look at housing condition, we know that lower income
renters and owners are more likely to live in housing that is
in poor condition. The new American Housing Survey that was
just released last week shows 29,000 housing units in Franklin
County with severe or moderate physical problems, and two-
thirds of these are rental units.
There are over 12,000 vacant housing units in the older
part of Columbus, and the city has over 1,600 active vacant
housing cases that they're following.
We know that there are over 12,000 low and moderate income
homeowners who may be able to--may not be able to afford home
maintenance because these owners are paying more than 50
percent of their income for mortgage and utilities.
Finally, there are homeownership needs. I know that there
was some surprise at the fact that the homeownership rate in
Columbus is only 49 percent. But homeownership rates are even
lower for minority households. There's a huge gap in
homeownership rates in Franklin County between white households
and minority households. The gap ranges from 23 to 35
percentage points difference, depending on the groups you're
looking at.
There are few new single-family homes being built that are
affordable even to moderate income households, those that may
be making $45,000 a year. In 1999 only 10 percent of the new
single-family homes built were affordable to that group.
So, obviously, with those needs, the Community Development
Block Grant and other HUD funds are very important to be able
to address housing needs.
As has been mentioned, there is a significant disparity
between Columbus and other communities in Ohio only in CDBG
allocation. We looked at per capita allocation for the total
population of the largest cities in Ohio and found a huge
disparity.
If you look at per capita CDBG allocation only by poverty
population of Columbus and the other big Ohio communities,
there is still a significant disparity.
But then we took it one step further, and pretended that
Columbus only consists of the area within the 1950 boundaries
of the city, before there was all this annexation. This area is
much more like the other urban communities. We still found that
Columbus ranks last among the large Ohio cities in allocation
per capita of persons living in poverty.
In this case, the annual grant to Columbus would need to be
increased by 50 percent to nearly one hundred percent to be
equivalent to the funds received by Cincinnati or Cleveland.
I want to close by saying that this formula issue has
implications not just for Community Development Block Grant,
because this formula forms the foundation of other HUD
programs, such as the HOME program, the Emergency Shelter Grant
program, and even some of the continuing care of allocations.
Thank you.
Chairman Ney. Thank you.
[The prepared statement of Roberta Garber can be found on
page 103 in the appendix.]
Chairman Ney. Amy Klaben.
STATEMENT OF AMY KLABEN, PRESIDENT AND CEO, COLUMBUS HOUSING
PARTNERS, COLUMBUS, OHIO
Ms. Klaben. Thank you, Chairman Ney.
Thank you, Chairman Ney and Members of the Committee, and
Mrs. Jones, for allowing me to provide you with comments this
afternoon. Thank you for coming to Columbus, Ohio.
I'm Amy Klaben the President, CEO, of Columbus Housing
Partnership. We are a nonprofit housing development
corporation, and we were formed 16 years ago.
Access to safe, affordable housing is one of the most
important issues we face in our nation. People cannot retain
their jobs, stay in school, and live a decent life without an
affordable home to go home to every day.
We see in our community, without affordable homes, people
continually change schools. We have mobility problems within
the school system.
And people cannot go to their jobs every day unless they
have a home that is safe, decent and affordable.
To enable people to purchase affordable homes, we provide
both a housing counseling program and we build affordable
homes. Our housing counseling program is supported financially
through the CDBG program, and we thank you very much for that
support. People need economic literacy training and people need
to know how to buy a home. Without such programs, people cannot
become successful long-term homeowners.
So far this year we've had 324 people complete an eight-
hour homebuyer education program. We are HUD certified, and our
numbers this year are twice what they were last year. We
attribute that to a marketing program that we started this
year. The marketing program needs to continue. I'm explaining
this to you because part of the HUD funding that we received
does not cover marketing, and it's so important for nonprofit
organizations to be able to market their programs so people
know what's available. Many people who currently rent don't
know that they can one day become a homeowner, and we need to
help them know that they can achieve the American dream of
homeownership.
We provide not only prepurchase counseling, but
postpurchase counseling, default counseling, and other
programs. All of these programs together are important to
helping people remain successful homeowners.
In the past 16 years, we've built over 3,200 homes in our
community--homes and apartments. Most of our homes are built
through the low-income housing tax credit program and are
rental units. We currently have 70 units under construction, 70
will start in the next couple of months, and approximately that
many next year.
We have a pipeline for development, and that pipeline is
very important for the continued development of affordable
housing.
We also have an AmeriCorps Community Safety Program, which
I know you're not involved with, but it's a very important
program to Mr. Tiberi. This program has been very important to
dealing with community safety issues that must be addressed as
we look at revitalizing our central city. This program works in
conjunction with the HUD programs that we're involved with.
As I said, we receive CDBG funds for our housing counseling
programs. And I just want to say that there's not enough funds
in Columbus to support the need for these programs.
We would be happy to participate in counseling participants
in HUD's Housing Choice Voucher Program. This is a very
important program to help Section 8 participants become and
remain successful homeowners.
CDBG funds and HOME dollars are also used for down payment
assistance. We administer down payment assistance programs, and
it's needed in conjunction with counseling. Not everybody's
able to save funds necessary for a down payment. To enable
people to become homeowners, down payment assistance is
necessary, and I would like you to consider increasing the
current cap of 80 percent area median income to 100 percent.
If you look at revitalizing central city neighborhoods, we
need to attract higher income people into those neighborhoods.
One way to do that is by providing down payment assistance to
incentivize people to come into the central city.
There's currently limits on the amount of funds that we're
able to use through the HOME and CDBG programs, for development
of rental housing and homeownership opportunities. Those
amounts need to be increased, as well. We find that the cost of
building new homes is much higher than the amount we can sell
the houses for in many areas of the central city. It's called
an appraisal gap.
To attract people to buy in these areas, we need to provide
incentives.
Thank you very much.
Chairman Ney. Thank you. I appreciate it.
[The prepared statement of Amy Klaben can be found on page
131 in the appendix.]
Chairman Ney. Before we move on, is Ruth McNeil still in
the audience?
Ruth, do you want to stand up? She is with Congresswoman
Deborah Pryce's office, so I wanted to make sure everybody saw
her.
And we can move on to April Weaver then. Welcome.
STATEMENT OF APRIL WEAVER, RESIDENT, COLUMBUS, OHIO
Ms. Weaver. Good afternoon. Thank you for allowing me to be
here today. I'm really excited to be here to sort of reiterate
what Ms. Klaben was talking about with Columbus Housing
Partnership.
I began working with Columbus Housing Partnership, I would
say, about a year ago, last July, I found out about one of the
homeownership classes they were offering, found out about it
through the newspaper, and I called and got enrolled in one of
the classes. And I really think it's important what Ms. Klaben
was talking about with--we all know it's one thing to buy a
home, but it's probably another to maintain the home. I think
that's what I really learned from the homeownership classes, a
lot about budgeting, and a lot about home maintenance, and just
all sorts of things.
I also appreciate how well-organized the classes were. I
didn't have a lot of time, because I'm a single parent, I have
a 3-1/2-year-old little girl, so it's like time is money, I pay
the babysitter by the hour. So it was nice to get into a class,
have my itinerary, and to stick with that and get it finished.
And I really learned a lot through those classes.
Not only did I learn a lot through the classes, but I
learned a lot through working with Ms. Klaben and her
colleagues with Columbus Housing Partnership. They kept in
touch with me through the whole process of buying a home. One
of the representatives came with me to close on the home. And
I've kept in touch with Columbus Housing Partnership through e-
mails and phone calls. And any questions that I have and
concerns there, they're there to help me out.
Oh, yeah, I didn't introduce myself. I'm April Weaver. I
teach second grade here in Columbus. And I love Columbus, I'm
so happy to be here. I moved here from Akron two years ago. And
two years ago, I was living in Section 8 housing in Akron and
on food stamps. And it's just so great to be at this point in
my life, I'm really excited about that.
I don't know what else to tell you. I guess--I just--I
really feel like Columbus Housing Partnership has helped a lot
of people. I recommended it to some of my schoolteacher
friends, and they're very excited about it, they've called and
are really interested in it.
And I guess that's all I can tell you. I don't know what
else.
So thank you very much.
Chairman Ney. Thank you.
[The prepared statement of April Weaver can be found on
page 186 in the appendix.]
Chairman Ney. And we'll move on to Cynthia K. Ring, who
Congressman Oxley had requested you to be here. And I think he
said you won an award or something.
STATEMENT OF CYNTHIA K. RING, EXECUTIVE DIRECTOR, ALLEN
METROPOLITAN HOUSING AUTHORITY, LIMA, OHIO
Ms. Ring. We did.
Actually, he asked me to be here, and I want to thank
Chairman Ney and the other Members of the Committee for
allowing me to testify.
Actually, I was gone last week, so I didn't get my written
testimony to you in advance.
I am the Executive Director of the Allen Metropolitan
Housing Authority located in Lima, Allen County, Ohio.
And I had to explain to Ms. Weaver where that was. For
those of you who don't know, it's in northwest Ohio between--
kind of halfway between Toledo and Dayton.
I'm also past-President and a current member of the Ohio
Housing Authority's Conference, called OHAC, that represents 75
housing authorities in the State of Ohio. Many of my colleagues
are here today, as is our current President, Terry Meese.
These public housing authorities administer assistance to
approximately 85,000 families under what you call--or what you
know as the Section 8 tenant-based assistance program, called
the Housing Choice Voucher Program.
And AMHA proudly has served our community for 30 years.
We're a high performer under the public housing assessment, or
PHAS, and a standard performer under SEMAP. And recently, just
last week, we received an award from NAHRO, which is the
National Housing and Redevelopment Officials, at their summer
conference, for innovation.
We have a landlord training program that we have
implemented in Lima. It's a cooperative effort between our
city, our local law enforcement, and housing consortium. And
it's provided free of charge to any landlord or property
manager in our community.
And we believe because of the flexibility we have as a
local housing authority, we're able to have programs in our
area that really meet our needs.
Lima, of course--and I put approximately 50 percent of the
housing stock is rental housing, and that's being kind, because
there's a great deal more than 50 percent of our housing stock
that's rental housing. So it's important for us to have
landlords who are knowledgeable about State law and how to be
integrated into the neighborhoods.
We have a highly trained staff of 29. We provide housing
services to the most needy populations. And I think sometimes
we tend to forget about that. You see only the negative things
in the media about PHAs and you don't hear about the positive
things.
We deal with our senior citizens, our handicapped and
disabled individuals, and the homeless and families with
children.
And the families we serve are someone's grandparents, their
mother or father, sister or brother, child, or perhaps
grandchild, and we know what type of services they need,
because we live and work in the community.
And we give them something very special. I think somewhere
that's--a decent home can sometimes be the first decent place
that they've lived.
AMHA has sold 16 of our homes to public housing residents,
and we continue to prepare others to accomplish the same goals.
And last month HUD recognized our PHA during National
Homeownership Month because we had another resident who was
successful in purchasing her home through the 5(h) program.
We also are preparing a Section 8 Housing Choice Voucher
Program that will enable many of our other families to also
realize the American dream.
And we also have the Family Self-Sufficiency Program, which
you may know about, that also will enable families to become
free of any type of public assistance.
We serve over 1,600 families in our community on a monthly
basis through some sort of Section 8 rental subsidy. And we are
surrounded by a lot of rural counties, and oftentimes families
are able to have some sort of choice, and our housing authority
is the place that they come to, to get that assistance.
There is a portability issue, a feature with a voucher that
they are allowed to use. And I know that Assistant Secretary of
HUD, Michael Liu, has said that that is very complicated. And
in our community, it is not. It's fairly simple to do, and we
encourage the mobility.
I want to tell you that the PHAs in Ohio need many more
additional resources. We currently have had our waiting list
closed for over a year. And we have about half the number of
families waiting as we do spots available for housing. And it's
not unusual to have your waiting list close when you anticipate
the need being over one year.
Last year we were 15 percent overleased, and that caused
quite a bit of funding issues and concerns that we had until
just recently. But one of the reasons that we were overleased
is because of the great need that we have in our community;
also, to meet HUD's program requirements; and because of our
declining economy.
And lastly, I guess, I just want to mention to you that I
would like seriously for you to look at the Section 8
administrative fee issue and the fee reserve issues very
closely before agreeing to those.
I have some additional information, and a letter that one
of your colleagues sent that I would like to introduce into
testimony.
Chairman Ney. Without objection, the letter will be
introduced for the record.
Ms. Ring. Okay.
[The following information can be found on page 195 in the
appendix.]
[The prepared statement of Cynthia K. Ring can be found on
page 173 in the appendix.]
Chairman Ney. I want to thank all the witnesses.
There is the American Dream Down Payment, we were talking
about the down payments. I think a lot of people go out and
they struggle with work, or work a second job, but they have a
terrible time trying to get that down payment. And in my
family, it took--my father was 45, I think he was, before he
could get a down payment on a house. So I think that's a
difficult thing. The American Dream Down Payment is going to
help 44,000-some people. In fact, the committee has got
tremendous bipartisan support.
We've got to get this law and get it to the floor. If
anybody can make a phone call, American Dream Down Payment, to
a member of Congress, please--please do that. It's American
Dream Down Payment, has tremendous bipartisan support, so I
thought I would want to mention it.
I wanted to ask April Weaver, you said--you read first
about the housing opportunity in the newspaper, did you?
Ms. Weaver. Yes.
Chairman Ney. In the Columbus Dispatch?
Ms. Weaver. Yes.
Chairman Ney. You saw it in the newspaper.
What kind of ad was it? Do you know who sponsored it?
I'm just always curious how people get all the information.
Ms. Weaver. It wasn't a very big ad. I just remembered
looking through, I was actually looking for rental property,
and I looked over in the homeownership, they had Homes for
Families, and I called. And I think that class was actually
closed. And so when I went to look at my house in the Hilltop
area, the gentleman who showed me the home said, well, have you
tried calling CHP and getting into one of their classes. I
said, no, I hadn't tried calling again. He said, try again, and
see if they're going to be doing that. So he was--sort of
backed that up and encouraged me to call back.
Chairman Ney. That's great.
I'm a secondary ed degreed teacher.
Ms. Weaver. Oh, really.
Chairman Ney. I think you've got a rougher job in
elementary, by the way. Nice little kids, but kind of squirmy,
running around, kind of like herding cats.
Congratulations on that.
Ms. Weaver. Thanks.
Chairman Ney. I want to ask Ms. Ring, were you talking
about the portability of the voucher was a problem--the
portability?
Ms. Ring. It is not a problem in our community, because we
have a lot of rural counties surrounding Allen County, where
there are no housing authorities; besides, they're able to use
the vouchers to move elsewhere.
Chairman Ney. And one point about the HUD----
Mr. Cates. Yes, sir.
Chairman Ney.----we have had discussion on that, and at
some point in time we'll talk to you about some discussions
we've had about a better flexibility at local levels.
Mr. Cates. No question.
Chairman Ney. The gentlelady.
Ms. Jones. Mr. Chairman, in the interest of time, I'm going
to bypass my questions and let my colleagues ask questions.
I want to thank all of the panel for coming here this
afternoon and participating. And it's not that I don't want to
ask you questions, but I want to try----
You want to ask me a question, Mr. Cates?
Mr. Cates. I would.
I do appreciate your CDC's in Cleveland.
Ms. Jones. Oh, yes.
Mr. Cates. They are powerful. We have not yet began to make
that happen in Columbus. And I can tell you a lot of reasons.
The main thing is we've got a serious food chain operation: The
sharks who've got installed stay at the top. That's just the
best way to say that.
Ms. Jones. Thank you, Mr. Cates, for the compliments.
Chairman Ney. Mr. Tiberi.
Mr. Tiberi. Just a question regarding homeownership in
rural areas that kind of caught my attention on your testimony.
You said Fayette County operates the only USDA Self-Help
Housing program in the State.
And also in your testimony, just to put that in
perspective, you mentioned that while many people don't
consider Ohio as a rural State, Ohio's the fourth largest rural
population.
Why in the world aren't there more of you? In Ohio.
Ms. Baughn. I don't know.
We have had lots of interest from other counties, they have
come and looked at our site. Our housing director is right
behind me. We have talked the program up. We think it's
wonderful. I mean, it's not just for housing development, it's
an antipoverty program, it's no risk to the housing developer.
We do think that we've got two counties on either side of
us are in the predevelopment phase, Clinton County and Highland
County. And there is a program, I believe, in--Athens?--Athens,
there's a Rural Alliance or--Rural Alliance, I think.
It's a hard program to start because it's not like a grant
program where you write a grant and you fund activities. You
have to actually have your families' loans approved, your lots
secured, your home plans approved by your local--your
localities. And basically the day you close the grant, the next
day you build.
So we were able to get predevelopment money from USDA and
from the State of Ohio to hire Mrs. Griffiths to come in and
actually do all of the predevelopment activities that needed to
be done.
But it is a wonderful program. I wish more people did that.
Mr. Tiberi. Well, Mr. Chairman, I would--I would
encourage--I would encourage you to look to see what they have,
and it is in Washington Court House, it is a wonderful program.
And if there's a way that maybe we or this committee can
encourage others in the State to utilize it, I think it's a
great program.
Thank you all for coming.
Chairman Ney. Mr. LaTourette.
Mr. LaTourette. Thank you very much.
And like Congresswoman Tubbs Jones, I don't have any
questions other than to indicate to you, Mr. Cates, that the
committee was sad when Congresswoman Tubbs Jones was elevated
to the Ways and Means Committee because no one--there wasn't a
bigger champion on predatory lending in Congress than Stephanie
Tubbs Jones. All of us have horror stories from our districts
where folks come in and use a variety of unscrupulous
techniques, not only against the elderly but the poor and
overleverage the value of homes. And so the Ways and Means
Committee, now with the rest of the people is a so much more
violent place, it was their gain, but it was our loss on the
Financial Services Committee. And I know that I very much miss
Stephanie--Congresswoman Tubbs Jones' leadership on that issue.
And we're lucky to have such a leader in the Congress.
And I do just want to make a comment to Ms. Garber, in your
observations, CDBG and how Columbus is being treated not fairly
has come up as sort of a theme here, I'm getting--I'm in
Columbus, I've got a theme. And I would suggest that it's going
to be more than a food fight. Because the answer to these
questions--we have a similar thing with the highway trust fund,
for instance, where it's not based on anything reasonable other
than who's got the biggest delegation of how many miles of
interstate highway system you have, and so, as a result, while
we get about 90 cents back on the dollar that we send to
Washington here in Ohio, Massachusetts gets $2.25, and
Pennsylvania gets $1.16. And I can tell you, as we're in
negotiations on that as well, the guys from Massachusetts
aren't saying, oh, we're sorry, it's not fair, here's some of
your money back.
And so the only way that we solve those problems is to grow
the pot of money. And it's not a problem in the house to fix
it, because usually there's more of us from those States, and
we can beat up the other guys and take it back. But in the
senate everybody gets two votes, and the senators aren't
anxious to give it back.
So I really think that the solution to the CDBG dilemma in
Columbus is find yourself, and, Mr. Chairman, that we have to
find a way to grow the pot, make more money available so that
we can all benefit and perhaps rectify some of the situations
that Columbus finds itself in.
I thank you and yield my time.
Ms. Jones. Real quickly, Mr. LaTourette, you've made up for
your shopping comment.
Chairman Ney. I also want to thank Fayette County for
participation in Washington that you all have done to help us
out there.
A fine panel. And with that, we'll move on to Panel III.
Thank you very much. Panel IV.
Move on with Panel IV.
We have William Hale, President, Portage Area Development
Corporation of Ravenna, Ohio; Amy Kuhn, Deputy Director of
Community Development Division, Ohio Department of Development,
Columbus, Ohio; Roy Lowenstein, Vice President, Development,
Ohio Capital Corporation for Housing, Columbus; Sally Luken,
Acting Director, Corporation for Supportive Housing in
Columbus, Ohio; Charleta Bell Tavares, Columbus City Council,
Columbus, Ohio; and Jeffrey Woda, President of The Woda Group,
which is located in Columbus, Ohio.
Thank you.
STATEMENT OF WILLIAM HALE, PRESIDENT, PORTAGE AREA DEVELOPMENT
CORP., RAVENNA, OHIO
Mr. Hale. Good afternoon. Thanks. I'm glad to see
everybody's awake, and I'm surprised I--I'm awake, it's been an
interesting afternoon.
And the encouragements I have for you this afternoon, I
don't think are new from the other testimony, but since I have
five minutes, I'll go through it.
It's exciting that you take this interest in housing. It's
a critical needs----
Ms. Jones. Why don't you move the microphone over.
Mr. Hale. How about this?
Chairman Ney. There you go.
Mr. Hale. It's exciting because in the deficit era that
we're in, both Federal and State, you know, we need to go ahead
and concentrate on the lowest third income group in Ohio, those
making under 80 percent.
A little bit about PADCorp., we're a rural CBC nonprofit,
covering all of northeast Ohio, rural being for us those
populations under--under 50,000. We touch a number of
Congressional areas, pretty much a mirror image of Congressman
LaTourette's area. And by the way, we have found your office
knowledgeable, helpful and responsive. And we thank you for
this partnership.
We go ahead--we produce both affordable rental properties,
preservation, as well as creation, as well as homeownership.
Nothing that I say today should decrease the importance of the
rental property. But I want to go ahead and focus on
homeownership, because I find that the most dynamic tool in
neighborhood revitalization, as well as family self-sufficiency
and self-determination.
We've been doing this since we started in 1985. In 2001 we
went ahead and adopted NeighborWorks, a full cycle lending
model. If you're not familiar with it, I have a section in my
written testimony. It deals with intensive pre- and
postpurchase counseling and homeownership education, and we
feel it's a superior system, not that there aren't others that
are also good, but we have found that by implementing it we've
been able to go ahead and in two years double what we've done
over the last 15.
And so my first encouragement would be to go ahead and take
a look at programs that are working for homeownership and
support them, increase that pool that Congressman LaTourette
was talking about.
The second area that I would like to talk about deals with
the Section 8 to homeownership program. I think this is a slick
program. It goes ahead and takes those families that are on
Section 8, that are working, that are productive members in
their community, and it goes ahead and gives them the
opportunity to make the Section 8 program what it was
originally designed to be, and that's temporary.
And so what we've done now is we have a memorandum of
understanding with three different housing authorities. And it
represents about 10 percent of what we have done to date--I
mean, 10 percent of what we've done in the last couple of
years. Those counties are very, very different, they include
Lake County, Portage County, and Columbiana County, and, of
course, as Congressman Ney knows, we're in discussions in--in
Zanesville. All four of those areas are uniquely different. All
four of those housing authorities are dealing with a
different--a different population, with different market need.
I would encourage not to consider--or your result would be
not to go ahead and have block grant--block granting Section 8
program because of those unique needs.
The State of Ohio has some excellent service delivery
systems, one's sitting next to me, and it's not so much that,
but the unique need to respond to the communities can only be
done on a local level with the local housing authorities. In
some States they're not as fortunate as Ohio, and I think the
product would suffer.
The other two encouragements that I have for you--and then
I'll quit--is, again, like my first encouragement, take a look
at those programs that are working partnerships with housing
authorities and nonprofits and go ahead and assure that they
have adequate funding both in operation capital as well as
financing capital.
Last, but not least, there's been some discussion as to
housing trust fund, and I encourage you to move forward on
that. The State of Ohio, the legislature, and the Governor's
office, went ahead I think and took a very bold step and its
programs were stripped out of the Ohio budget. The housing
trust fund is still there to go ahead and give positive force
so that they can be a partner in affordable housing.
Chairman Ney. Thank you.
[The prepared statement of William Hale can be found on
page 122 in the appendix.]
Chairman Ney. Ms. Kuhn.
STATEMENT OF AMY KUHN, DEPUTY DIRECTOR, COMMUNITY DEVELOPMENT
DIVISION, OHIO DEPARTMENT OF DEVELOPMENT, COLUMBUS, OHIO
Ms. Kuhn. Thank you, Chairman Ney.
My name is Amy Kuhn, and I'm Deputy Director of the
Community Development Division of the Ohio Department of
Development.
This division, among its many programs, is responsible for
the distribution of Federal community development programs,
including Community Development Block Grant, the HOME
Investment Partnerships, Emergency Shelter Grants, and Housing
Opportunities for Persons with AIDS.
Before I begin, I would like to thank the members of the
committee for the opportunity to speak here today, and I'll try
to keep it brief.
The State of Ohio and Ohio Department of Development have a
long and successful history of working with its local
communities and nonprofit organizations to maintain Ohio's
great quality of life.
Today I would like to address some changes related to the
State's ability to continue to successfully administer the U.S.
Department of Housing and Urban Development's CDBG program.
The Department of Development requests your support of the
following three minor but very important revisions to the CDBG
program. None of the revisions would require an increase in
funding or allocation levels, but would provide flexibility for
the changing environment as I think we've heard about here
today.
The first issue is to increase flexibility at the
discretion of the States to allocate technical assistance and
administrative funds between the two activities without
financial limitations and without a match requirement being
applied to the technical assistant funds.
Currently, States may allocate 1 percent of the annual CDBG
allocations to technical assistance activities and 2 percent
plus $100,000 to administration. As an example, in fiscal year
2002, Ohio allocated approximately $437,000 of CDBG funds to
technical assistance, and $1,236,000 to administration.
If the percentage requirements were eliminated, Ohio would
have the flexibility to expend these funds based on the needs
of the communities.
For example, in order for Ohio's rural areas to make the
best use of limited resources, ODOD is encouraging Ohio Small
Cities CDBG Program eligible communities to develop a community
assessment strategy.
Now, this is a planning document designed to encourage
communities to match local needs with available resources;
facilitate a holistic approach to addressing housing, economic,
and community development needs, identify the type and degree
of community development needs; identify the type and degree of
community development needs within areas of low and moderate
income concentration or distressed areas; and provide
information that will serve as a resource for State planning
efforts.
In order for communities to develop a credible strategy, it
is imperative that we be able to supply direct technical
assistance. As with most initiatives, the initial training
costs could be higher but will decrease as the communities
build administrative capacity and experience.
And I think you've heard from several folks today, from
some of our rural counties and communities, which are very
capable and provide very good services.
If States were permitted the flexibility to allocate funds
between technical assistance and administrative activities it
would be much easier for these Ohio associations.
The second issue is an increase in the State match
threshold from 2 percent of the State allocation plus $100,000
to 2 percent of the State allocation plus $500,000.
Basically, the States receive CDBG funds through a formula
allocation. The allocation includes funding for administration
of the program. The amount of funds available to States for
administration is 2 percent of each state's formula allocation
plus a hundred thousand dollars.
However, States are required to provide a 50-percent match
for any administrative funds received greater than $100,000.
As you heard, the latest biennium budget process, it was
determined that the availability of the State funds as matching
funds has been decreasing at an alarming rate. Until the
economy improves, this trend is expected to continue. Although
the threshold requirement has not been revised since the
program's inception in 1982, the cost of administering the
program continues to increase due to the many things we've
discussed here today.
If the State administrative threshold for the CDBG program
were increased to 2 percent plus $500,000 of the State
allocation, the States would have additional revenue to
dedicate to administration.
Without adequate administrative funding, ODOD will be
unable to continue to effectively administer approximately 280
CDBG program grants every year.
The final issue I would like to address is the dedicated
source of funding for training and technical assistance
activities.
States would benefit greatly from a dedicated source of
funding for training. If such an initiative were funded, the
national organizations could access the funds needed to keep
States abreast of new CDBG program rules and regulations,
proper program administration, and tips for innovatively
implementing projects and activities.
In the past, HUD provided funds to these organizations and
this has no longer been possible.
Thank you.
Chairman Ney. Thank you.
[The prepared statement of Amy Kuhn can be found on page
136 in the appendix.]
Chairman Ney. Mr. Lowenstein.
STATEMENT OF ROY LOWENSTEIN, VICE PRESIDENT, DEVELOPMENT, OHIO
CAPITAL CORPORATION FOR HOUSING, COLUMBUS, OHIO
Mr. Lowenstein. Thank you, Chairman Ney and distinguished
Members of the Committee.
I'm Roy Lowenstein, the Vice President for Development,
Ohio Capital Corporation for Housing here in Columbus.
Ohio Capital assists developers around the State to secure
low income housing tax credits, and we operate an equity fund
which purchases the credits.
We have, since 1989, raised about half a billion dollars
for investment in Ohio. We put it into about 200 different
affordable housing developments with about 10,000 units.
Recently we acquired a portfolio of more than 1,300 Section
8 units, primarily in Columbus, as well as a management
company, renamed Community Properties of Ohio, which you've
heard about--a little bit about earlier.
Along with local partners, we will be rehabilitating and
preserving a great majority of those units over the next few
years.
So we have a variety of roles, consultant, developer,
investor, asset manager, and property manager, and those
provide many insights into the rental housing and finance
operation areas.
You've heard already today from many of the other speakers
today about housing needs in Ohio, so I don't need to comment
further on that.
What I would like to do is comment on some of the housing
tools that we need in our toolbox.
Ohio's a microcosm of the whole country, so it's not
surprising that many different housing tools are needed. For
example, fair market rents in some rural counties are so low
that no new construction is incentivized. Some cities in Ohio
have been losing population for 20 or 30 years, but they still
need more affordable housing. Why? Because many of the people
most in need are still there, and because people--other people
are leaving, you don't see new construction going on, you need
replacement housing just to maintain the housing stock.
Some neighborhoods in decline or that have declined and
then stabilized, provide very little economic incentive for
reinvestment without public dollars to lead the way to help
recreate a market in some of our neighborhoods.
The message here is that great flexibility is needed to
craft solutions to these distortions to what's normally a
market.
Sometimes the biggest problem is housing supply; other
times it's the gap between the income that the people have and
what it costs to actually operate housing.
Other times it's the appraised value being too low to allow
for new development.
So what programmatic tools do we need? Some of them are
going to cost money, and actually some of them won't.
Poor families need both rental subsidies and production
subsidies to target to extremely low income households.
However, rental subsidies are in very short supply as we've
heard from other speakers.
This is particularly a shame when we have a fair amount of
vacancy in the market, and it's just a shame that we're not
able to house more extremely low income households from our
vouchers. Why? Because there aren't enough vouchers to go
around, but there is a housing supply in some markets.
It's particularly a concern here in Columbus where we have
an exemplary program known as Rebuilding Lives to house long-
term homeless individuals, using a range of Section 8 and
McKinney funds as operating subsidies. Halfway to the goal of
800 permanent housing units for the homeless, we sure hope that
the Section 8 subsidies will again materialize to provide an
operating base for some of those most severely--or for people
most severely in need.
Secondly, we do need a larger Federal source of gap
financing. Gap is the--what it costs to--the difference between
what folks can pay and what it costs to develop housing. We've
really been starving these production programs for the last 15
or 20 years compared to the amount of need there is in this
country.
And basically what happens is that a project--given Ohio's
relatively low rent structure, those rental properties cannot
support such a high level of debt. And even in the case of
Federal tax credits, a gap exists between what it costs to
deliver new housing and what folks can afford to pay.
And the tax credit program serves those who have enough
income to maybe pay 400 or $500 a month in rent. But those
people who can't pay that, basically the minimum wage or a
little bit above minimum wage workers, they cannot afford
enough in rent to support any permanent debt on the housing
unit. And so that provides no incentive for folks to develop
new housing for that population.
We need a Federal targeted source that's going to help
support production for people, for example, under 30 percent of
the median income, along with providing operating support.
Finally, we need greater flexibility in the Section 8
program to allow the portability of--for project-based rental
assistance. That's a big issue in Cincinnati, and it's a big
issue with our portfolio in Columbus, as well.
[The prepared statement of Roy Lowenstein can be found on
page 139 in the appendix.]
Chairman Ney. Thank you.
Mr. Lowenstein. Thank you.
Chairman Ney. Ms. Luken.
STATEMENT OF SALLY LUKEN, ACTING DIRECTOR, CORPORATION FOR
SUPPORTIVE HOUSING, COLUMBUS, OHIO
Ms. Luken. Mr. Chairman, Representative Tiberi, and other
Members of the Subcommittee.
On behalf of the Corporation for Supportive Housing, thank
you for the opportunity to testify.
CSH has a long-standing and productive relationship with
this subcommittee and its excellent staff throughout the
tenures of your predecessors, Mr. Lazio and Ms. Roukema.
I appear before you today to draw on CSH's experience
nationally, including Ohio, and my recommendations to the
subcommittee are based on our experience with housing
production, targeting the lowest income individuals and
families, those that have been homeless repeatedly, for long
periods, and those who are at risk of homelessness.
In a moment I'm going to present some evidence about the
supportive housing solution. But now I'd like to let you know
what we're seeking from you today.
CSH encourages the subcommittee to act to ensure that the
HUD McKinney-Vento homeless assistance programs continue to
sustain and produce new supportive housing.
You can do this by establishing a homeless housing
permanence account for renewals of expiring rent and operating
subsidies under the Shelter Plus Care and the Supportive
Housing Programs.
And you can also do it by enacting authorizing legislation
targeting 30 percent of those grants to permanent supportive
housing.
In addition, we recommend that the subcommittee enact
legislation that will close the affordability gap for
households earning less than 30 percent of area median income.
Specifically, CSH endorses the creation of a national housing
trust fund.
Now to the evidence.
In addition to grinding poverty and high housing costs,
tens of thousands of Americans are homeless and struggle with
mental illness, substance addiction, and other health problems
that are creating barriers to their stability.
Research from around the country and right here in Columbus
and Franklin County show that as a consequence of this double
whammy these folks are cycling repeatedly in and out of
shelters and institutions and the streets, for months and even
years.
Supportive housing ends this vicious cycle. It combines
permanent affordable housing with flexible voluntary services
that many people need to achieve stability. This includes
mental health and substance abuse services, employment
services, and other services that keep people housed, but also
help them participate in their communities.
Supportive housing is cost-effective as well as humane.
Research has shown that it costs little more to permanently
house and support these folks than just to leave them homeless.
And Columbus and Franklin County was one of the first in
the nation to overhaul its approach to homelessness in
recognition of this research. Led by the Community Shelter
Board and Franklin County and the City of Columbus, they
launched, as Roy has mentioned, Rebuilding Lives. This
initiative to address long-term homelessness is to create 800
units of permanent supportive housing.
And what's great about it is it's working. Over 93 percent
of Rebuilding Lives' tenants have retained their housing for
one year or more. They are not going back to the shelter.
In addition, the cost to operate a unit of supportive
housing here in Franklin County is 36 to $38 a day. That's
quite a bit less than the public systems that traditionally
have served and taken care of these folks; namely, prisons and
mental health hospitals.
Policy makers at every level are taking a new look at
homelessness, and a consensus is emerging. We can and must plan
to end homelessness, not manage it.
Recognizing that we face a significant but solvable
problem, the Bush administration, Congress, and two blue ribbon
commissions have adopted the goal of ending chronic
homelessness.
Most recently, as Bill Faith has mentioned, the President's
new Freedom Commission on Mental Health has recommended that,
quote, in partnership with the interagency council on
homelessness, HUD develop and implement a comprehensive plan
designed to facilitate access to 150,000 units of permanent
supportive housing for people who are chronically homeless.
To speed the progress to that goal, the policy strategies
that this committee should implement are amplified in my
written report.
But to reiterate them simply: Ensure McKinney-Vento
homeless programs continue to generate new permanent supportive
housing, and work to close the affordability gap for those
lowest income Americans.
Chairman Ney. Thank you.
[The prepared statement of Sally Luken can be found on page
143 in the appendix.]
Chairman Ney. Ms. Tavares, welcome.
STATEMENT OF CHARLETA BELL TAVARES, MEMBER, COLUMBUS CITY
COUNCIL, COLUMBUS, OHIO
Ms. Tavares. Thank you.
Thank you Chairman Ney and Members of the Committee.
I am Charleta Tavares, on I'm the chair of the Health,
Housing and Human Services Committee on Columbus City Council.
I want to welcome you to my city and to thank not only Chairman
Ney, but also my friend, Congresswoman Stephanie Tubbs Jones,
my Congressman, as well, Pat Tiberi, and Congressperson
LaTourette for coming to Columbus.
We're proud of what we're doing in this city. As chair of
the committee, I work with our Mayor, Mayor Coleman, to focus
attention on developing more affordable housing, increasing
homeownership in our community, and revitalizing our older
neighborhoods.
We have developed a toolbox to help us in accomplishing
these three goals. And we have created partnerships to
strengthen and sustain our efforts. One of our tools was to
create the Columbus/Franklin County Affordable Housing Trust
Corporation with the city and the county, which enabled us to
look at where affordable housing units were needed in our
community, the community of Franklin, and to determine what
kinds of units were needed, apartment, single-family, senior
housing, et cetera.
In addition, we were able to pool our resources in order to
better leverage our dollars and expand our partnerships to the
public and private sectors.
The housing trust corporation has three--has a three-part
goal: To increase the number of affordable housing units as was
expressed by another witness, we need at least 22,000 units;
increase homeownership opportunities; and, three, to strengthen
and revitalize our older neighborhoods.
Increasing the number of affordable housing units is
critical if we are going to provide opportunity and present--
and prevent homelessness amongst our individual and family
residents.
Ensuring that we have safe, decent, and affordable housing
for all families in our community has largely depended upon the
partnerships we have had with the Federal Government through
the Department of Housing and Urban Development and the
Columbus Metropolitan Housing Authority.
I'm going to touch on the Community Development Block Grant
program. The CDBG program has been effectively used to increase
our supply of affordable housing, to revitalize central city
neighborhoods, strengthen our neighborhood and commercial
strips, provide loans to create and expand small businesses,
and help low income families maintain their homes. All of these
issues are critical to central cities and rural communities who
are attempting to rehabilitate older housing stock, attract
business development, and eliminate blight and flight from the
core city.
The CDBG program has allowed communities to target the
dollars where they are needed, to leverage the dollars with the
private and other public investments, such as our housing trust
and HOME funds.
The next area that I want to touch on deals a little bit
with the city and the county again and our work with the CDBG
program.
I believe the key to this program is to keep it local, not
to pass it on to the State, and not to pass it into any kind of
a regional plan. The key has been that it's been a local
program with the Federal Government. That has enabled us to
develop the needs--meet the needs of our city and to develop
the programs and services that best meet those needs.
A State or regional administration would add another level
or layer of administrative expenses, monitoring, and
interpretation of regulations. Regional or State administration
of the entitlement CDBG would add negative dimensions of
competition between rural and suburban, small city, large city,
et cetera.
Unfortunately, there is nowhere in America that a family or
an individual working a minimum wage job can afford a two-
bedroom apartment. Mr. Chairman and Members of the Committee,
as you know, far too many of our children are growing up in
single-parent households, many working minimum wage or low wage
jobs, who are one crisis, one paycheck away from homelessness.
We are fortunate in Columbus, Ohio, that our cost of living
is well below our sister cities, such as New York, Los Angeles,
San Francisco, and Chicago. However, we cannot forget that we
have thousands of families in our community living below the
poverty line who are responsible, who are working, and who
cannot afford a clean, safe, and decent place to call home.
We have to do more. Our children and families are depending
on us to ensure that their basic needs of food, clothing,
housing, and health care are met.
We have a need in our great city for more housing units
that are affordable. It is both a cost and production issue in
our community. Columbus is working hard to produce and
decentralize our affordable housing units throughout the city.
Many of our job centers are on the fringe areas of Columbus.
And we believe, in order to make any affordable housing program
work, we have to be able to locate the housing where the jobs
are located, in the fringe areas of Columbus and suburban
communities throughout this county.
I thank you, Mr. Chairman and Members of the Committee, and
more than happy to respond to any questions.
Chairman Ney. Thank you, Ms. Tavares.
[The prepared statement of Charleta Bell Tavares can be
found on page 182 in the appendix.]
Chairman Ney. And Mr. Woda, although he has a Columbus
office, he's a River Rat. And I'll let you explain that.
STATEMENT OF JEFFREY J. WODA, PRESIDENT, THE WODA GROUP, LLC,
COLUMBUS, OHIO
Mr. Woda. Thank you, Mr. Chairman. Thank you Congressman
Tiberi and the rest of the committee for allowing me to testify
before you today.
I am the last person to testify, so I will try to keep it
as brief as possible.
My name is Jeff Woda, I'm a member of The Woda Group. I
grew up in rural Ohio, in Belmont County, and the last few
years I have relocated to the Columbus area.
Our expertise is developing, constructing, and managing
housing in the rural area, and specifically affordable housing.
And that's what I would like to concentrate my testimony on
here today.
In my written testimony, I've listed various programs that
we have used to create such housing. And I've also gone on to
talk about some of the challenges that we have encountered when
working in programs that combine funds from HUD, tax credits
with IRS regulations, funds from the United States Department
of Agriculture, USDA, and different State programs. So I won't
bore you with reading some of the horror stories that I've
noted there.
But we have found that a lot of times these programs have
inconsistent policies that don't help us in either preserving
or creating affordable housing in the rural areas.
I'd like to just cut right to the chase and talk to you
about some recommendations and what we see that could be done
in the rural areas to help us increase the affordable rental
housing.
The United States Department of Agriculture Rural
Development Section 515 funds have been greatly cut over the
years. That was probably the main producer of affordable
multifamily housing in the rural areas. Those funds need to be
either increased or looked at so we can best leverage what is
already allocated.
For instance, there are RD 515 funds allocated, a lot of
times they're coupled with tax credits, but currently you're
only allowed to use a 4-percent tax credit, which is less than
half of the available 9-percent credit that's out there. In
other words, one small change, we could double, if not triple,
the amount of housing produced with the same funds already
available.
The rental assistance contracts that go with those funds
don't have any minimum payment that a tenant has to pay. If
that was somewhat modeled after the Welfare to Work program or
where there were minimum payments, we could stretch those
dollars a lot further.
A new program that has really caught a lot of interest in
the private sector is the USDA Section 538 guaranteed rural
rental program. This program leverages private sector dollars,
as the United States only provides a 90-percent guarantee to
the lender. We've had some administrative rules that you've--
that members of your committee have helped us change to make
that more usable. Some other things that we see is that we
provide interest credit up to 20 percent of your annual
allocation. And what that interest credit does is you buy the
interest rate down to the applicable Federal rate, which is
around the 10- to 30-year treasury amount. Although it's not
very expensive, that really helps the rural areas reduce our
rents.
And if you could look at expanding that 20 percent to a
larger portion of the pool, again, not near as costly as the
direct program that you've had in the past.
Also, you should offer flexibility to your State RD
offices. If they have interest credit available, why not link
it to those guaranteed loans that you have there. The program's
already in place, dollars that are already there, with slight
administrative changes could be much more leveraged and provide
much more affordable housing in the rural area.
The national housing trust fund may be another avenue if
enacted to assist the rural areas. Our groups believe that a
portion of that, 30, 40 percent, should be designated for the
rural areas, but not only to provide support on the development
of housing, but also the continuing support, such as the rental
assistance program noted earlier.
Another area that we see a problem is that currently county
median incomes for the tax cutter program use the greater of
the county AMGI, area median gross income, or the State non-
metro average. Again, a slight change in using the State
average would certainly widen the band of rural households that
would now be eligible for this program.
An example, a rural household consisting of a single
parent, one child in Ohio, earning in excess of $24,300 is not
eligible in most of our average counties. That's certainly a
low number. With one change of how we calculate what the AMGI
is, we could really broaden that band and make a lot more
households eligible.
Finally, I would like to express the support that we have
for the homeownership tax credit. It's an excellent concept in
rural areas, especially where you've been told by other people
testifying about the gap in the rural areas, trying to get
enough dollars to entice a developer to go out and build homes
where the prices that you can charge can't generate enough
dollars. The tax credit's an excellent avenue, if it could be
modeled after the housing credit rental program that's there,
that's been extremely successful, we see that that's another
avenue that could greatly benefit all areas of Ohio.
Please keep in mind, not all households, though, are meant
to be homeowners. There is still a great demand out there for
affordable rental housing. And I encourage you to keep that in
mind as you look at these pieces of legislation.
Again, thank you very much for your time. I would be more
than happy to answer any questions.
Thank you.
Chairman Ney. Thank you for your testimony. I explained to
my colleagues, if you live on the Ohio River, you're a River
Rat. So it's not an insult; it's a compliment.
Mr. Woda. That was the nickname of our high school,
actually.
Chairman Ney. In Congress we call our Congressional
softball team the Ohio River Rats, too.
[The prepared statement of Jeffrey J. Woda can be found on
page 187 in the appendix.]
Chairman Ney. Ms. Luken, I thought 30 percent was dedicated
in the McKinney-Vento language to permanent housing. Are you
worried that that will change?
Ms. Luken. Well, it's something that is happening on a
yearly basis. And we're encouraging you to authorize
legislation to make it permanent.
Chairman Ney. Make it permanent. I see. So you're worried
about future----
Ms. Luken. Yes.
Chairman Ney.----future terms.
Okay. The--Mr. Woda, we had that Amendment 515, I think
we're going to try to redo that. But it just does what was done
for the urban program, you know, a long time ago. And I think
that was a good idea, if we could do it.
I have one question I want to ask, and I don't know if you
can answer this, but I'm going to ask it, Mrs. Kuhn. Would the
State of Ohio want the Section 8 block grant? It's a joint
question. It's a bipartisan group. Would the State of Ohio want
to do--if this piece of legislation passed, would the State
take it, has it developed a position?
We do invoke the fifth amendment here in the subcommittee
formally.
Ms. Kuhn. I don't have the official answer to that. But I
do know that it's a very complicated issue. I think a lot of
the points that have been brought up here today about our
staffing levels, the ability of the State to do these
additional duties, are something we would take very much into
consideration.
I think we have a very talented group of people that could
do it, but it would take resources and whatever.
So I don't know that we're really ready to answer that
question.
Chairman Ney. Thank you.
Ms. Jones. Real short.
I want to thank everyone for testifying this afternoon. The
information you provided us was very useful.
Mr. Woda, I just want to ask you one question: Remember
back earlier in the year when we were debating tax cuts, there
was a whole--and the dividend tax cut, there was a whole
discussion about the impact dividend tax cuts had on low income
housing tax credits. Can you briefly discuss that, if you
could--if you would, or could.
Mr. Woda. Sure. It was certainly a big scare to our
industry, as we looked at it, the assumption was most of the
investors would lose a lot of the benefit they have in
investing in those credits because of the tax treatment of
dividends.
I'd just like to thank all of you for the way you worked it
out, and that that scare has now passed. And I think whenever
looking at an issue like that the unintended consequence of
hurting probably our best producer of affordable housing in
this country would not have been what any of us wanted. But you
worked with the investors out there in the private sector to
make sure that we had legislation that didn't do that.
So, yeah, it was a big scare. A lot of our investors really
pulled back until they saw what you ended up doing. And, again,
I'd like to thank you for that.
Ms. Jones. Thank you.
Chairman Ney. Mr. Tiberi.
Mr. Tiberi. Thank you, Mr. Chairman.
Ms. Tavares, thank you for coming to testify today. From
where you sit in the council chambers and from your experience
with this State, what--what can we do up here--what can the
Federal Government do and the State government do to help you
all? And I should have asked this of the Mayor, but I'll ask it
of you: What can we do to help you increase that homeownership
from 49 to 55 or 60?
Obviously, knowing we're not going to get to a hundred
percent. But getting it closer to the national average.
Ms. Tavares. I think a couple of things that have been
mentioned about some of my other colleagues on this panel and
other panels. Certainly the homebuyer education is critically
important. We've got to make sure that people understand what
it is they're venturing into, and to make sure that they have
the assets, so to speak, or at least some cushion money set
aside for whatever might happen when you own a home. All of us
know that there are major expenses. And maybe we haven't
educated individuals enough about how to get into homeownership
and how to stay in homeownership. Because that's one of my
other concerns, it's maintaining homeownership. It's one thing
to get into a house. But to stay there, we have to make sure
that people have the tools not only to fix the house, but also
the assets or a pool of money to maintain that home.
I think the other thing that the Federal Government can do
is to continue work with us to keep the program as flexible as
possible, the CDBG program, the HOME program, so that as we see
there are other tools that we can develop locally, that we'll
have the money to help us implement those programs.
It's education. I think critically important is the
education of our electorate that you can get into a home in
many cases more easily than you can pay the rent that's being
commanded today in the market.
Mr. Tiberi. Did you want to comment on that, too?
Mr. Lowenstein. Thank you, Mr. Tiberi.
I think that the homeownership tax credit would be a
critical tool to add to that. Because, for example, our
company, you know, kind of in a small way got into trying to
develop some new units in a relatively depressed neighborhood
of the city, and the problem that we have in trying to sell new
houses--and believe me even in an area that is, you know--isn't
the best neighborhood in the city, they don't want to see
little boxes built. People want to see nice houses put in.
Well, it costs $120,000 or $130,000 to put in a fairly nice
house. But the problem that you have in some of these areas is
that the appraised value of houses in the existing neighborhood
may be 60,000 or $70,000.
So you need some vehicle to cover the gap between the
mortgage that could be supported. Maybe you can get an
appraisal at $100,000 or $90,000, but it costs another 30,000
or $40,000 to put in a new house. But that's what you need to
help turn the neighborhood around.
The same thing would be true if it's a rehabilitated house,
with the cost of what rehab are, you still have that gap, and
that's where you--a financing vehicle like the credit would be
critical.
Mr. Tiberi. Thank you.
Chairman Ney. Mr. LaTourette.
Mr. LaTourette. Thank you, Mr. Chairman.
Folks, it's been a long afternoon, so I won't drag it out
much longer. Thank you for coming.
And for the record, Mr. Chairman, the tax board is a new
constituency of mine, since the geniuses down here in Columbus
did the redistricting. And I've been more than impressed with
the work that you do, Mr. Hale, and your group.
And, Ms. Tavares, I know you by reputation, and you
certainly represent yourself well not only on behalf of your
city but and party and the people that you represent and the
issues you advocate, and it's a pleasure to finally make your
acquaintance.
And, Ms. Kuhn, I'm going to try to be charitable to your
organization, not you personally, but I think one of the
reasons we put caps on various programs is that we haven't just
made it up, it was subject to abuses, and not to say anything
bad went on in Ohio relative to abuses, but that's why we have
caps on technical assistance and also administration costs, we
found that in some areas some States short of cash were
siphoning off all the dough in administration costs, and that
the money wasn't getting to where it needed to be.
And I would say that if--if the issue that you brought to
our attention, and that is the 2 percent plus 100,000 proposal
were to come to me to take it to 2 percent plus 500,000, I
don't think that I'd be favorable. Again, no criticism of you
or your organization, but I, as an Ohioan, have been horrified,
and as a republican, by this budget process, and the idea that
our legislators would give back--it's not free money, but money
back is like penalizing the taxpayers of Ohio twice. And not to
have the political courage to come up with matching funds where
assistance is offered from the Federal Government, I think is
sinful, and I'm not proud of anybody that participated in that
process.
And I yield back the balance of my time.
Chairman Ney. And we're not redistricting for ten years, so
I'm agreeing with everything he said about the legislature.
With that--they already did damage to me--I want to thank
the panel. I want to thank our members. And we think this is
the first housing hearing in Ohio that we've had in the history
on the housing subcommittee on the books. Black caucus met two
years ago, I believe, you chaired it up in Cleveland. And I
think this is the first housing subcommittee, so we appreciate
the staff coming in, the members spending their time, and all
of you, it gives us good insight. Believe me, it was very
helpful.
We appreciate the Martin Luther King Center--Jr. Center and
the director of that.
And with that, that concludes--I would note for the record,
if members have additional questions they might want to ask the
panel, if they want to ask them in writing without objection,
the hearing record will remain open for 30 days for members to
submit written questions and witnesses to place their response
in the record.
And I want to thank all of you again, and this concludes
the hearing.
[Whereupon, at 4:52 p.m., the subcommittee was adjourned.]
A P P E N D I X
July 29, 2003
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