[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]




 
                    HOUSING OPTIONS IN THE AFTERMATH
                     OF HURRICANES KATRINA AND RITA

=======================================================================

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                   HOUSING AND COMMUNITY OPPORTUNITY

                                 OF THE

                    COMMITTEE ON FINANCIAL SERVICES

                     U.S. HOUSE OF REPRESENTATIVES

                       ONE HUNDRED NINTH CONGRESS

                             FIRST SESSION

                               __________

                           DECEMBER 14, 2005

                               __________

       Printed for the use of the Committee on Financial Services

                           Serial No. 109-68



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                 HOUSE COMMITTEE ON FINANCIAL SERVICES

                    MICHAEL G. OXLEY, Ohio, Chairman

JAMES A. LEACH, Iowa                 BARNEY FRANK, Massachusetts
RICHARD H. BAKER, Louisiana          PAUL E. KANJORSKI, Pennsylvania
DEBORAH PRYCE, Ohio                  MAXINE WATERS, California
SPENCER BACHUS, Alabama              CAROLYN B. MALONEY, New York
MICHAEL N. CASTLE, Delaware          LUIS V. GUTIERREZ, Illinois
EDWARD R. ROYCE, California          NYDIA M. VELAZQUEZ, New York
FRANK D. LUCAS, Oklahoma             MELVIN L. WATT, North Carolina
ROBERT W. NEY, Ohio                  GARY L. ACKERMAN, New York
SUE W. KELLY, New York, Vice Chair   DARLENE HOOLEY, Oregon
RON PAUL, Texas                      JULIA CARSON, Indiana
PAUL E. GILLMOR, Ohio                BRAD SHERMAN, California
JIM RYUN, Kansas                     GREGORY W. MEEKS, New York
STEVEN C. LaTOURETTE, Ohio           BARBARA LEE, California
DONALD A. MANZULLO, Illinois         DENNIS MOORE, Kansas
WALTER B. JONES, Jr., North          MICHAEL E. CAPUANO, Massachusetts
    Carolina                         HAROLD E. FORD, Jr., Tennessee
JUDY BIGGERT, Illinois               RUBEN HINOJOSA, Texas
CHRISTOPHER SHAYS, Connecticut       JOSEPH CROWLEY, New York
VITO FOSSELLA, New York              WM. LACY CLAY, Missouri
GARY G. MILLER, California           STEVE ISRAEL, New York
PATRICK J. TIBERI, Ohio              CAROLYN McCARTHY, New York
MARK R. KENNEDY, Minnesota           JOE BACA, California
TOM FEENEY, Florida                  JIM MATHESON, Utah
JEB HENSARLING, Texas                STEPHEN F. LYNCH, Massachusetts
SCOTT GARRETT, New Jersey            BRAD MILLER, North Carolina
GINNY BROWN-WAITE, Florida           DAVID SCOTT, Georgia
J. GRESHAM BARRETT, South Carolina   ARTUR DAVIS, Alabama
KATHERINE HARRIS, Florida            AL GREEN, Texas
RICK RENZI, Arizona                  EMANUEL CLEAVER, Missouri
JIM GERLACH, Pennsylvania            MELISSA L. BEAN, Illinois
STEVAN PEARCE, New Mexico            DEBBIE WASSERMAN SCHULTZ, Florida
RANDY NEUGEBAUER, Texas              GWEN MOORE, Wisconsin,
TOM PRICE, Georgia                    
MICHAEL G. FITZPATRICK,              BERNARD SANDERS, Vermont
    Pennsylvania
GEOFF DAVIS, Kentucky
PATRICK T. McHENRY, North Carolina
CAMPBELL, JOHN, California

                 Robert U. Foster, III, Staff Director
           Subcommittee on Housing and Community Opportunity

                     ROBERT W. NEY, Ohio, Chairman

GARY G. MILLER, California, Vice     MAXINE WATERS, California
    Chairman                         NYDIA M. VELAZQUEZ, New York
RICHARD H. BAKER, Louisiana          JULIA CARSON, Indiana
WALTER B. JONES, Jr., North          BARBARA LEE, California
    Carolina                         MICHAEL E. CAPUANO, Massachusetts
CHRISTOPHER SHAYS, Connecticut       BERNARD SANDERS, Vermont
PATRICK J. TIBERI, Ohio              STEPHEN F. LYNCH, Massachusetts
GINNY BROWN-WAITE, Florida           BRAD MILLER, North Carolina
KATHERINE HARRIS, Florida            DAVID SCOTT, Georgia
RICK RENZI, Arizona                  ARTUR DAVIS, Alabama
STEVAN, PEARCE, New Mexico           EMANUEL CLEAVER, Missouri
RANDY NEUGEBAUER, Texas              AL GREEN, Texas
MICHAEL G. FITZPATRICK,              BARNEY FRANK, Massachusetts
    Pennsylvania
GEOFF DAVIS, Kentucky
CAMPBELL, JOHN, California
MICHAEL G. OXLEY, Ohio


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on:
    December 14, 2005............................................     1
Appendix:
    December 14, 2005............................................    33

                               WITNESSES
                      Wednesday, December 14, 2005

Montgomery, Hon. Brian D., Assistant Secretary for Housing/
  Federal Housing Commissioner, Department of Housing and Urban 
  Development, accompanied by Hon. Orlando J. Cabrera, Assistant 
  Secretary for Public and Indian Housing........................     7

                                APPENDIX

Prepared statements:
    Ney, Hon. Robert W...........................................    34
    Montgomery, Hon. Brian D.....................................    36
    Statement of the National Housing Coalition..................    52

              Additional Material Submitted for the Record

Hon. Barney Frank:
    Letter from Steven B. Nesmith................................    65
    Letter to Alphonso Jackson...................................    67


                    HOUSING OPTIONS IN THE AFTERMATH
                     OF HURRICANES KATRINA AND RITA

                              ----------                              


                      Wednesday, December 14, 2005

             U.S. House of Representatives,
                        Subcommittee on Housing and
                             Community Opportunity,
                           Committee on Financial Services,
                                                   Washington, D.C.
    The subcommittee met, pursuant to notice, at 2:20 p.m., in 
room 2128, Rayburn House Office Building, Hon. Robert W. Ney 
[chairman of the subcommittee] presiding.
    Present: Representatives Ney, Waters, Velazquez, Lee, 
Scott, Frank (ex officio), Davis of Alabama, and Cleaver.
    Also present: Representative Watt.
    Chairman Ney. The House subcommittee meets this afternoon 
to continue its discussion of the Federal Government's response 
to the emergency housing needs of residents affected by the 
hurricanes, by Katrina and Rita.
    Last week this subcommittee heard from FEMA regarding its 
efforts to provide housing assistance to the hurricane 
evacuees. Today we are pleased to have two witnesses from HUD 
who are testifying, FHA Commissioner Brian Montgomery, and 
Assistant Secretary for Public and Indian Housing, Orlando J. 
Cabrera.
    Along the Louisiana and Alabama and Mississippi Gulf Coast, 
of course, there is a Herculean task of coordinating the 
relocation of thousands of individuals. In order to save time, 
I am going to just stop with that. I will entertain, of course, 
opening statements, but a lot of the statements that I would be 
making today are statements about Katrina that we made last 
week, and I am, of course, curious to hear from the witnesses 
today.
    With that, I am going to yield to our ranking member.
    Ms. Waters. Thank you very much, Mr. Chairman. I appreciate 
you taking the time to come back this week to hold this 
hearing. And the reason that we are doing it is because HUD did 
not have a representative at the meeting that was called where 
we thought we would be talking with FEMA and HUD at the same 
time. So I am delighted that you are here today. I am hopeful 
that you can help us to shed some light on a few things. You 
are probably as much in the dark as we are about some of the 
activities that FEMA is responsible for.
    As you know, this is the Subcommittee on Housing of the 
Financial Services Committee, and we are concerned about a lot 
of things, but we are concerned about housing. I am 
particularly concerned that we sat in this committee, we sat in 
roundtable discussions that were organized by the chairman, and 
we sat on several occasions talking about shelters and 
temporary housing. We talked about trailers early on and 
manufactured housing. We talked about the need that we were 
going to have to house the victims of Katrina and Rita, and we 
never, we never thought that we would be at this point and have 
FEMA announcing that the support for the victims and their 
rental assistance would be running out, as they first 
announced, in December, and that now it has been extended by 
the court until February 7th. But February 7th is right around 
the corner, and we have thousands of victims who are going to 
be without housing unless we can make sense out of all of this.
    I don't know why we don't have the temporary housing. I 
don't know why we don't have the temporary housing that we 
thought we would have. It is very disturbing, and it is very 
disturbing to watch on television the description of this lack 
of housing and people saying that they have offered space to 
FEMA for the temporary homes; that the mayors are saying they 
have cooperated in every way that they can do. And while you 
don't have a responsibility for this, or maybe you do have some 
responsibility somewhere; if you do, I would like you to tell 
us what it is. If you don't, I would like for you to tell us 
that, and I would like for you to tell us whether or not you 
have any ideas about how we could move this along, whether you 
know something about whether or not the manufacturing can be 
speeded up, whether or not there are some problems with 
locating the space, whether or not there are some problems with 
cooperation from local elected officials. If you have any 
insight into this, we would like you to share that with us.
    Beyond that, if we can get people in temporary housing and 
out of these shelters and out of the hotels; they are going to 
have to have permanent homes. That is where HUD can play a 
role. How and what is HUD going to do to help build low- and 
moderate-income housing for the many victims of Katrina and 
Rita?
    So that is where we are today. We are trying to find out 
what role can HUD play. I would also like to know whether or 
not HUD had offered to the Administration to play a role that 
could have been helpful that maybe was not agreed upon. It 
seems to me that you are kind of bystanders, watching what is 
going on, when maybe there is something else that you could be 
doing to help get these people into temporary housing.
    With that, I yield back the balance of my time, Mr. 
Chairman. Thank you.
    Chairman Ney. The gentleman from Massachusetts, the ranking 
member of the committee.
    Mr. Frank. Thank you, Mr. Chairman, and thank you for your 
efforts to make sure that we have had this hearing.
    I don't want to get involved in recrimination. I will say I 
think it would have been better if we had had FEMA and HUD 
together because they have been working together. And I have to 
say, given the need for them to work together in this, the 
notion that they couldn't sit next to each other and testify is 
somewhat troubling. I would think sitting next to each other 
and testifying would be easier to coordinate than dealing with 
actually housing people. But at least you are here, and let us 
focus on that.
    I want to say here I do believe I have only one major 
concern with regard to the short-term situation, because this 
has obviously been FEMA's responsibility primarily. I do 
appreciate--I have a copy of a letter from Assistant Secretary 
Nesmith dated November 29th. We received it on the 8th. One of 
the things that I think has now been cleared up is that in the 
immediate aftermath, HUD did suggest with varying degrees of 
emphasis to some housing authorities that they take Katrina 
evacuees and put them ahead of people on the Section 8 waiting 
list. Many of us thought that a poor idea because there was 
money voted for the Katrina evacuees, and we already have the 
problem of the waiting list.
    I appreciate the fact, if I understand it now, that it is 
no longer the policy. There was--as the letter said, there had 
been some suggestions about that on the website; they have been 
removed, and it is now clear going forward housing authorities 
are under no pressure from the Federal Government or from HUD 
to put evacuees ahead of people on the waiting list. This does 
not mean evacuees don't get help, it means they get it out of 
another pot.
    But we did have situations where HUD-funded Section 8 
vouchers were made available by some housing authorities, in 
part because they thought HUD wanted them to do that. And what 
I had asked was that they be reimbursed for this. We already 
have a tight Section 8 situation. And I would just quote Mr. 
Nesmith's letter. It says, ``Your suggestion that the 
Department ask FEMA to reimburse PHA's for the cost of 
providing housing choice vouchers to families that were not 
HUD-assisted will be taken under consideration.'' In other 
words, where the families were previously HUD-assisted, I know 
they were taken care of by the program, the KDHAP program, but 
there were some people who were not. And I appreciate that it 
is being taken under consideration. It really does seem to me 
that you ought to be asking FEMA for that reimbursement. There 
is a large pot of money there. I don't think anybody wants to 
pit evacuees against worthy people in various cities. So I 
think that is a very high priority.
    The second issue I want to raise and I hope we can address 
in the questions, and I know your written testimony, 
understandably, Secretary Montgomery, does deal with the 
emergency, but while FEMA had the primary role in the 
emergency, it is up to HUD to help make sure that New Orleans 
can be repopulated with some of the people who used to live 
there. We need to be very clear. Lower-income people in New 
Orleans, many of whom whatever they had was somewhat wiped out, 
they will not be able to come back to New Orleans unless the 
Federal Government steps up and provides significant funding 
through programs.
    That is really I think what we need to start focusing on 
now. We need to focus on the need to make sure that the result 
of this hurricane is not, frankly, a richer, whiter New 
Orleans. That is not what we ought to tolerate morally as a 
country. I know there has been debate about, well, what was the 
situation; was it racial or not? Let us set up this one 
standard. If, as a consequence of this and the failure of 
public policy, we wind up with a richer, whiter New Orleans, it 
will be because lower-income people, not all of whom, but many 
of whom, will be African Americans, were financially unable to 
move back in, and if that is the case, shame on us as a Nation.
    It is going to be HUD that has the burden of working on 
that with us. So we are available to you to deal with that. We 
have already begun on this side. Frankly, we have expressed 
some agreement with the Governor of Mississippi, Governor 
Barbour, in terms of the funding he wants. We will be having a 
markup tomorrow, I am pleased to say, on the bill that the 
gentleman from Louisiana from this committee, Mr. Baker, has 
put in. He has worked, and we have worked; the gentleman from 
North Carolina Mr. Watt, the head of the Congressional Black 
Caucus, we have had negotiations. We will be producing a bill 
that I think begins the process, because we can only authorize, 
we cannot appropriate, of providing the basis for the poorest 
and hardest-hit victims of Katrina that will at least be able 
to move back home. I hope you will begin to address that, and 
you will certainly have our cooperation if you do, and a big 
fight if you don't.
    Mr. Chairman, again, thank you for making sure that we were 
able to have this hearing under these circumstances.
    Chairman Ney. The gentlewoman from New York, Ms. Velazquez.
    Ms. Velazquez. Thank you, Mr. Chairman. Thank you, Mr. 
Montgomery and Mr. Cabrera, for attending today's hearing. We 
hope that today you will be able to provide some clarity and 
explain how HUD has responded to the devastating hurricanes. As 
I stated last week, the hurricanes were an unprecedented 
disaster, and, for that reason, they deserve an unprecedented 
response. However, thus far we have not seen much more than 
ineffective and inefficient solutions. Red tape and 
misinformation face victims at every turn. And, despite a tried 
and true option being available in the form of apartment 
rentals and Section 8 vouchers, the Administration moved 
forward with expensive cruise ships, trailers, and a soon-to-
expire hotel program. Three months later announcements continue 
to be revised, extended, and canceled. Displaced families read 
one thing in the papers, hear another from FEMA advisors, and 
yet another from HUD counselors. The right hand is not talking 
to the left, and something must change.
    I also am interested in the steps HUD will be taking to 
alleviate the horrendous health hazards that exist in the 
hurricane region, especially since it appears that each agency 
is passing the responsibility for providing mold remediation 
assistance. Mold has infested many homes, and removing it is 
neither an easy nor inexpensive task. And for voucher holders, 
we must ensure that their homes are clean and healthy when they 
return.
    Mr. Chairman, displaced families are tired. They are tired 
of waiting for trailers, they are tired of receiving 
contradictory information or no information at all, and they 
are tired of hearing that the check is in the mail. These 
families need more from our government, and they deserve more 
from our government. I look forward to hearing from our 
witnesses as to how HUD will be providing this assistance. 
Thank you, Mr. Chairman.
    Chairman Ney. Thank you. The gentlewoman from California, 
Ms. Lee.
    Ms. Lee. Thank you, Mr. Chairman. I, too, want to thank you 
and Ranking Member Waters for convening this hearing and 
welcome both of our witnesses.
    Let me say a couple of things with regard to just first the 
coordination between FEMA and HUD. I think after the hearing 
last week, I became quite concerned, given the way that FEMA 
passed the buck to HUD, just really what type of communication 
and coordination is there. If, in fact, it was that loose here 
and that confusing, I can't imagine what people who are needing 
your assistance are going through. So this kind of 
coordination, I think, is very important, and I would like to 
hear a little bit about that.
    Secondly, I would like to know exactly, and I asked the 
FEMA representatives this also, with regard to the homeless, 
because, you know, I understand the regulations and laws that 
govern programs for the homeless, but I need a clear 
understanding about what happened to those people and what will 
happen to those people who are homeless in the Gulf region and 
still remain homeless, and what you are doing to help make sure 
they are provided with decent housing now and not--because from 
FEMA's--from what I remember of FEMA's response was that, well, 
they were homeless then; there is probably not much of anything 
we can do. I just think that is downright shameful. So I would 
like to know what is going on on your front with regard to the 
homeless.
    Also, it has been reported that Katrina and Rita evacuees 
have faced considerable discrimination in their efforts to find 
rental housing and flexible leasing. Of course, the 
Congressional Black Caucus has, I think, the best Katrina 
response legislation, and in that bill we put in some 
requirements for enforcement of housing discrimination. I 
wanted to see what kind of--what are you doing right now and 
what actions are being undertaken to make sure that these 
individuals are not discriminated against nor gouged really as 
a result of landlords seeing an opportunity now.
    Finally, let me just say, I think long term, I think in 
terms of how HUD proceeds, temporary housing, yes, immediately; 
but also long term, the equitable distribution of housing 
resources and housing counseling to prevent future pockets of 
poverty, and just how you are going to address the long-term 
economic and community development needs to help use HUD 
resources now to begin to alleviate the critical numbers in 
terms of poverty rates that we have in the Gulf region.
    With that, I yield the balance of my time and just thank 
you again for being here.
    Chairman Ney. Thank you. Mr. Davis, from Alabama.
    Mr. Davis of Alabama. Thank you, Mr. Chairman. I want to be 
brief so that we can quickly get to questions, but I want to 
make two observations. The first one, I remember in the early 
days after Katrina when we first came back here after the 
August recess, there was a lot of hope on this committee that 
HUD would take very seriously the problem of people defaulting 
on their mortgages, not being able to pay their mortgages. I 
don't want us to leave this hearing without the record being 
clear that two members of this committee were stalwarts on this 
issue, Mr. Watt from North Carolina, and Ms. Waters from 
California. Frankly, their efforts were seen as quixotic by 
some. There was a mindset that, well, that is just not 
something that we are going to get out of this Administration, 
or something that we are going to get out of this committee.
    I will give your HUD department some credit. While it has 
certainly not taken on the comprehensive problem of mortgage 
defaults, you have at least addressed it in the context of the 
FHA. But I want to make sure the record is very clear that the 
two people who were most aggressive in raising this issue were 
the gentleman from North Carolina and the gentlewoman from 
California.
    The final point that I want to make, I almost hate to raise 
this point, but this is the fourth hearing in a row that we 
have had on Katrina-related issues where there has been a very 
conspicuous tilt when you look at who attends these hearings. 
Frankly, I wish I could just say it was Democrats and not 
Republicans, but if you look around the dais, it is actually 
even starker than that. I don't know how clearly I can make 
this point. Katrina is not a black folks issue. It is not an 
issue that somehow the black members of this committee have a 
special interest in and no one else cares about.
    I haven't seen a racial breakdown of how many evacuees are 
African American, how many are Latino, how many are Caucasian, 
and I could care less, and I don't think anybody on this 
committee could care less. I just wish that we understood, as 
we talk about these issues, this is not a special interest case 
or a special pleading case, and, frankly, I wish more of our 
colleagues on both sides of the aisle would take the time to 
attend these hearings.
    Chairman Ney. Mr. Scott of Georgia.
    Mr. Scott. Thank you very much, Mr. Chairman. Thank you for 
coming. It is good to see representatives from HUD here, 
finally, at last. It is still unfortunate that your leader Mr. 
Alphonso Jackson is not here. That, to me, typifies the level 
of concern that this Administration has for this issue. It 
shows blatantly that for this kind of catastrophe where the 
number one issue for these evacuees is trying to get a roof 
over their heads, housing, and you don't even have the 
Secretary of HUD coming to this committee for the second time. 
I hope somebody somewhere remembers that and marks that.
    This is the hill that this committee has to climb. Not only 
that, but as my colleague Mr. Davis so eloquently spoke, that 
it is left to a few. But just as the disciple said and the Lord 
said, where there are few gathered, the Lord is there with us. 
I am convinced that the Lord is with us here as we go forward.
    But it is very, very interesting that in last week's 
Congressional Quarterly, and I don't know if you all saw this 
or not, but when FEMA was here and we were running around 
trying to figure out why HUD wasn't here, there was an 
interesting quote in the Congressional Quarterly that I hope 
you will go back and see, because it says that, the HUD 
spokesman said that they, HUD, did not want to be seen sitting 
side-by-side with FEMA. That is astounding, given the 
magnitude, just for any reason, but given the magnitude of the 
hurt and the pain that this Nation is going through right now, 
the two primary agencies that should be seen working together 
are FEMA and HUD.
    I am particularly vexed about this because my State of 
Georgia is the third State in terms of the number of evacuees 
that we are housing from Mississippi and from Alabama, and I am 
consistently perplexed by this. But there are a number of 
issues and there are a number of questions that the people in 
Georgia want to hear answered today.
    One of the major concerns is that this is not enough, and 
there is no long-term plan at all. The amount of money that is 
being given to the evacuees is not enough to cover even their 
short-term needs.
    So I yield back the balance of my time, Mr. Chairman, and I 
will reserve the balance of my time to ask questions.
    Chairman Ney. I do want to caution everybody, around 2:45, 
2:50, probably, there is going to be a vote.
    Mr. Cleaver.
    Mr. Cleaver. Thank you, Mr. Chairman. I will reserve my 
questions that I would like an answer to until later, but this 
is a rhetorical question: Is the failure to show up a request 
to give up?
    Chairman Ney. Thank you. Mr. Watt.
    Mr. Watt. Mr. Chairman, I pass. I just came because I was 
interested in hearing the witnesses' testimony.
    Chairman Ney. Thank you.
    Mr. Frank. Mr. Chairman, parliamentary inquiry. Is it 
permissible for a Member to come to a hearing because he wants 
to hear testimony? That is unusual.
    Chairman Ney. With that, without objection, the statement 
from the National Housing Coalition is included for the record, 
and also we will note Mr. Watt, who has great interest in the 
hearings.
    We will go ahead and start with Brian Montgomery and 
Orlando Cabrera.
    Mr. Montgomery.

   STATEMENT OF BRIAN D. MONTGOMERY, ASSISTANT SECRETARY FOR 
HOUSING/FEDERAL HOUSING COMMISSIONER, DEPARTMENT OF HOUSING AND 
URBAN DEVELOPMENT; ACCOMPANIED BY ORLANDO J. CABRERA, ASSISTANT 
SECRETARY FOR PUBLIC AND INDIAN HOUSING, DEPARTMENT OF HOUSING 
                     AND URBAN DEVELOPMENT

    Mr. Montgomery. Thank you, Mr. Chairman.
    Mr. Frank. Mr. Montgomery, you have overestimated the 
eyesight of the Members.
    Mr. Montgomery. Apologies, sir.
    Mr. Chairman, Ranking Member Waters, Ranking Member Frank, 
distinguished members of the committee, I am Brian Montgomery, 
HUD's Assistant Secretary for Housing and Federal Housing 
Commissioner.
    I do want to also offer that we regret any miscommunication 
last week. Speaking for my colleague to my left and myself, we 
were--it is our understanding we were going to appear this 
week, and, again, if there was any miscommunication on that 
part, we regret that it happened. The important thing is, sir, 
that we are here today.
    I also would request that our written statement, Mr. 
Chairman, be entered into the record.
    Chairman Ney. Without objection.
    Mr. Montgomery. Thank you, sir.
    Today we will discuss what HUD, at the direction of the 
Federal Emergency Management Agency, has done in the effort to 
help people recover and rebuild from the devastation caused by 
Hurricanes Katrina, Rita, and Wilma, and what we are doing to 
provide housing for so many people with unprecedented 
challenges before them.
    As it became apparent that the first of these major storms 
was going to make landfall, Secretary Jackson directed the 
establishment of a HUD working group to coordinate all agency 
resources that might be utilized. Known as the Hurricane 
Response and Recovery Center, or HRRC for short, this emergency 
center served as a command post for HUD-related efforts and was 
staffed with housing professionals from every program office at 
HUD.
    I would also like to add, Mr. Chairman, that while many 
other Cabinet agencies have 24-hour command posts, this was 
certainly new territory for HUD, and I certainly want to 
commend my HUD colleagues for their efforts. So many of them 
worked 40, 50, 60 days straight manning that Response and 
Recovery Center.
    A couple of months later, as we moved forward in the 
recovery and rebuilding stage, the Secretary and Deputy 
Secretary established HUD's Assistance and Recovery Team, known 
as HART. This team is now coordinating all HUD deployment with 
FEMA, ensuring that program offices are fulfilling their 
mission, as well as coordinating policy decisions.
    HUD has been working closely with FEMA to get housing 
assistance to those who have been displaced and those who have 
been uprooted by these hurricanes. This partnership with FEMA 
and, I might add, along with our colleagues at agriculture, VA, 
HHS, and others, demonstrates our dedication to providing 
housing assistance.
    I think some of the best examples of these partnerships are 
the Katrina Disaster Housing Assistance Program that my 
colleague will discuss later; also, programs that provide 
multiple types of temporary Federal housing. Another example is 
the Joint Housing Solution Center that was stood up within days 
of the hurricane, in Baton Rouge, which HUD played a role in 
that, as well as the numerous times that we have joined with 
other Department staff to brief staff and Members of Congress, 
including members of this committee, as well as Senate staff.
    The program offices at HUD have aided in the recovery 
process as well and have played a large part in that, and, Mr. 
Chairman, I would like to summarize those quickly.
    HUD's Office of Community Planning and Development, for 
example, has issued waivers of more than 40 requirements for 
the States of Louisiana, Mississippi, and Alabama, in an effort 
to increase the flexibility of our existing grant programs to 
be used within their current resources for disaster relief. For 
example, CPD issued a series of waivers in the HOME program 
that included self-certification of income, elimination of the 
match requirement, and greater flexibility in the use of HOME 
and American Dream Downpayment Initiative funds to help low-
income families receive tenant-based rental assistance and to 
rehabilitate and to buy homes.
    Beyond these efforts with the HOME program, we have issued 
a series of waivers for the Community Development Block Grant 
program, the Emergency Shelter Grants program, and the HOPWA 
program as well. The Office of Housing took the lead in 
providing the first 90-day foreclosure relief for 
Presidentially declared major disaster areas impacted by 
Hurricanes Katrina, Rita, and, finally, Wilma. On November 
22nd, Secretary Jackson and I extended the foreclosure 
moratorium in those counties declared eligible for individual 
assistance. That additional 90 days will go through February 
28, 2006. The extended foreclosure relief will provide 
mortgagees additional time in which to confirm the mortgagor's 
intention and ability to repair their homes or their ability to 
resume regular mortgage payments, all in an effort to help 
retain homeownership.
    Now, to that end, earlier this month the Department 
announced an additional homeownership retention initiative to 
help homeowners with FHA-insured mortgages who live or work in 
the Presidentially declared counties. Under this initiative, 
known as the Mortgage Assistance Initiative, FHA will advance 
mortgage payments for up to 12 months for eligible borrowers 
who are committed to continue occupancy of their homes as their 
principal residence, and are expected to have the financial 
capacity to repair storm damage and resume making full mortgage 
payments at some point within a 12-month period.
    This unprecedented, and I want to stress unprecedented, 
mortgage relief program is expected to help up to 20,000 
families and perhaps more that were seriously impacted by the 
hurricanes. We are doing this in an effort to help retain 
homeownership so these families can also concentrate on 
repairing their homes or on finding jobs. I want to stress, Mr. 
Chairman, that it was very important to us to not have families 
have to worry about those bills, and I am, again, very proud of 
the effort of our staff at HUD for putting forward this 
unprecedented initiative.
    In addition, Secretary Jackson and I have personally 
encouraged lenders to undertake actions such as mortgage 
modification, refinancing, and waiver of late charges for those 
in the hurricane disaster areas and to also refrain from 
reporting derogatory credit information to credit bureaus.
    The Office of Public and Indian Housing has issued guidance 
to the Nation's more than 3,000 public housing authorities on 
how to assist displaced public housing residents. For example, 
HUD's guidance and Q and A's for PHA's and public housing 
residents are located on HUD's website. This document, titled 
Guidance for Public Housing Agencies in Assisting Families 
Displaced by Hurricane Katrina, has also been distributed to 
all PHA's, to all HUD field office directors, and to HUD's 
field policy and management staff.
    The KDHAP initiative that I referenced earlier is providing 
housing vouchers for evacuee households that were previously 
receiving public housing assistance and to evacuees who were 
homeless prior to the hurricane. The details of that program 
include that individuals and households must register with FEMA 
and be determined ineligible for FEMA assistance. FEMA will 
transfer appropriate registrant qualification data and 
authorized Stafford Act funds to HUD for this program.
    Displaced families, including former HUD-assisted evacuees 
who do not qualify for other assistance such as FEMA IHP grants 
or homeowners insurance, can qualify for HUD's KDHAP program. 
Housing assistance will be administered through the established 
network of local PHA's located across the country. Eligible 
individuals and households may contact local housing 
authorities nationwide to participate in this program. 
Participants will receive housing vouchers that can be redeemed 
for both public and private housing units in any community at 
the discretion of the participant. Vouchers will be calculated 
at 100 percent of the fair market rent in any community that an 
evacuee selects.
    Eligible evacuees may receive rental assistance payments 
for up to 18 months. Finally, the effective date for this 
program was September 26th of this year.
    Also, HUD's Center for Faith-Based and Community 
Initiatives has been an active participant with the rest of the 
Department in responding to the hurricane. The center 
participated in the Department's post-Katrina hurricane 
meetings and continues its contribution as a member of the HART 
team. The Center has also contacted thousands of faith-based 
and community organizations to recruit their engagement in the 
Department's KDHAP enrollment efforts.
    Mr. Chairman, ranking members, we thank you for the 
opportunity to appear today to present HUD's testimony. My 
fellow HUD colleagues and I will respond to any questions you 
may have.
    [The prepared statement of Mr. Montgomery can be found on 
page 36 of the appendix.]
    Chairman Ney. Thank you. As I understand it, Mr. Cabrera 
does not have a prepared statement, but is here to answer 
questions. I want to thank you for your time.
    On page 2 of the testimony, you indicate that HUD 
identified 20,000 units of multifamily housing that were made 
available to displaced families through FEMA starting in 
September of 2005. Can you just elaborate a little bit on what 
types of housing you identified in terms of public housing 
units, project Section 8-based, or what?
    Mr. Cabrera. I think HUD's efforts with respect to locating 
units was very broad. So finding what the inventory was amongst 
the public housing stock was an issue of simply communicating 
with public housing authorities. But it didn't stop there. 
There was a broad, industrywide effort to find units for folks 
to move into, and that included the stakeholder, the private 
sector element, which meant apartments and companies that owned 
multifamily assets.
    But on top of that, housing finance agencies were contacted 
and, frankly, the full gamut of anybody having an available 
unit. This even included, in many cases, people who owned 
single-family homes that happened to be vacant. I know of at 
least a couple of incidences of that.
    Chairman Ney. Just to follow up for a second, of the 20,000 
that were open, whether it was a unit or multifamily, or 
whatever it was, how many of the FEMA evacuees went into there, 
20,000-some people, or do you know?
    Mr. Montgomery. Mr. Chairman, we can give you an exact 
number, but I daresay probably the vast majority of those were 
occupied by evacuees.
    Chairman Ney. And you were going to say something else?
    Mr. Montgomery. I was just going to also add, sir, that 
again, HUD worked diligently with our career staff and others 
to identify these units. We knew early on that this was an 
unprecedented disaster, and we also worked with the Department 
of the Treasury to get the income waiver guidelines for tax 
credit properties. We knew that the market for the affordable 
housing in parts of the south was very soft, and there were 
thousands of vacant units, so it was critical that we worked 
with Treasury to get that waiver early on, as well as making 
sure that the vouchers for victims who were displaced, that 
those could be ported to other locales.
    Chairman Ney. Some of the people previously had HUD Section 
8, but there is also a whole new group of people who are brand-
new now into the system who lost what they owned, so they are 
new. I imagine that some emergency vouchers probably applied to 
them, correct, to the new people?
    Mr. Cabrera. Currently the partnership we have with FEMA 
under their duties pursuant to the Stafford Act are to deal 
mostly with those folks who are in that universe of tenants who 
were receiving a Federal subsidy under public housing or 
Section 8, but does not include those who were not.
    Chairman Ney. So what happens with individuals who were on 
the waiting list down there, let's say, for a voucher, a 
waiting list, and then you have to take care of people who had 
the vouchers. Some people have been displaced to other areas of 
the country, so did a voucher follow?
    And then the other question I would have is, then who will 
pay for this as new people come on to the Section 8? Who pays 
for that? Does that come out of HUD? Has that been talked about 
yet? Or does it come out of FEMA?
    Mr. Cabrera. Well, currently no one new is coming on to 
Section 8 vouchers. But coming back, Mr. Chairman, to the first 
question you asked, which was the issue of the waiting lists, 
it has been a long-standing policy in many PHA's, PHA's have 
this within their own policy, that preference be given to 
people who are victims of disasters. That is nothing new, and 
that is something that PHA's can opt to do or not.
    Chairman Ney. Well, that is what I am wondering, and my 
time is running out, and I want to get on to the other Members, 
but I may come back to this if we all get through questions. 
But who pays for that at the end of the day, if someone needs 
help, and then they come up to Ohio and they get the voucher, 
and then somebody up there is on the waiting list? Are we going 
to count at the end of the day how much money we need to take 
care of the people who were also on the waiting list and 
obviously take care of the evacuees, too?
    Mr. Cabrera. Only momentarily taking off my HUD hat and not 
speaking for FEMA, and putting on my prior hat, my experience 
is that FEMA is currently paying for that. That is the housing 
piece of FEMA assistance, and those folks are still covered 
under the housing allocation that FEMA is providing.
    Chairman Ney. The gentleman from Massachusetts, Mr. Frank.
    Mr. Frank. Thank you.
    Let me go back to the issue I mentioned where we had a 
period where HUD had encouraged people, and it was on the 
website, housing authorities, to give priority to evacuees. The 
letter I got dated November 29th said you were thinking about 
asking FEMA to reimburse. FEMA has large amounts of unpaid 
money. What is the current status of your thinking on asking 
FEMA for a reimbursement to those housing authorities? Because 
we have a tightness in Section 8. Is there any further thinking 
on that?
    Mr. Cabrera. On the first issue, as I recall, the only 
thing that we were trying to clarify was that those who did not 
have a stated policy already on dealing with the waiting list 
issue, that they had the flexibility now to deal with it the 
way that other PHA's already had. So they can make that 
decision. We were providing them autonomy to make that 
decision.
    Mr. Frank. I will tell you that somehow the authorities 
felt some pressure to do that.
    Mr. Cabrera. Okay.
    Mr. Frank. And I would think that whether they did it 
autonomously or not, we have a shortage of Section 8 in some 
cities where there are waiting lists. We have at this point 
some extra FEMA money. I would think that HUD would be 
interested in facilitating that transfer to help it out. Is 
there any reason or public policy not to?
    Mr. Cabrera. Not to do what, Congressman?
    Mr. Frank. To reimburse those housing authorities that use 
scarce Section 8's where they had waiting lists for evacuees.
    Mr. Cabrera. Congressman, that is a conversation I have not 
yet had, but I am happy to inquire.
    Mr. Frank. I hope you do that.
    One other question, and this is a FEMA decision, but I 
would hope you would have some input here. Several cities have 
been willing, I think quite admirably, to be intermediaries. We 
are talking about people who were displaced, people who did not 
have a lot of experience with travel and did not have a lot of 
resources, and they are being told to go out and find a 3-month 
rental. I know the City of Houston was pretty active, the City 
of Atlanta, and at some point FEMA told the cities that it 
would no longer allow them to be the intermediaries, that they 
could not sign the leases and be reimbursed by FEMA, that the 
individuals had to sign the leases directly. That just seems to 
me to be a very bad idea. We are talking about some people who 
are literally bereft. Would it not be a good idea if the cities 
were willing to undertake that, to encourage them to continue 
to do it?
    Mr. Cabrera. Congressman, truthfully, I can't speak to that 
issue. It sounds like--I am not trying to punt.
    Mr. Frank. It is a FEMA issue, but do you want me to give 
you FEMA's phone number? I mean, I have it.
    Mr. Cabrera. Yes, I have it, too.
    Mr. Frank. You are the Housing Department. You have housing 
expertise. We have counseling. How about being a little bit 
energetic and proactive and maybe picking up the phone? I am 
asking you in the advice--you guys are used to dealing with 
housing more so than FEMA. We are not talking now about 
providing a physical short-term emergency, but getting people 
long-term housing. Wouldn't it be a good idea to get the cities 
involved, and couldn't you help FEMA understand that?
    Mr. Cabrera. I think that the cities that you have 
mentioned, mostly Houston and Dallas, have both noted that they 
had their own challenges in trying to accommodate a whole lot 
of folks, and I think what FEMA was trying to make sure of is 
that if people wound up in living arrangements that somehow 
they could finalize in the form of a lease, that they could do 
that as swiftly and as easily as possible on their own with 
these leases. But I don't believe that either Houston or Dallas 
were acting as housing locator services.
    Mr. Frank. I am trying to be calm about this. Why are you 
trying to put a gloss on this? You are putting words in 
people's mouths who don't put them there themselves. The Mayor 
of Houston has complained about this. They were willing; in 
fact, they signed the leases, because you have people who have 
no resources, they have nothing. They were told, well, we will 
give a 3-month deal. The cities were willing to put themselves 
out, and they have been told they can't do it. It is not at all 
what you described.
    I am really disappointed that you would start creating some 
rationale for a bad policy rather than trying to be helpful. I 
am serious. I am disappointed. That is not what the cities 
themselves tell us. They are willing to be the intermediaries. 
Why, if the cities are willing to be the intermediaries and get 
the reimbursement, is that not a better idea than leaving all 
of these people to fend for themselves?
    Mr. Cabrera. Congressman, far be it for me to disappoint 
you. That is not what I am trying to do. What I am trying to do 
is explain to you the logistical--
    Mr. Frank. I asked you a question. Why is it not a good 
idea to have the cities, if they are willing to do this, to be 
intermediaries for these people?
    Mr. Cabrera. Congressman, that is not an issue that we are 
handling here. That is what I am trying to explain it to you.
    Mr. Frank. I am sorry we don't have a bowl for you to wash 
your hands in, Mr. Assistant Secretary. I am very disappointed. 
I know you were not dealing with that. I said it was FEMA. I 
was asking why you wouldn't use your expertise in the housing 
area to suggest to them that maybe this is something they ought 
to do.
    Let me ask you, Mr. Montgomery, where are we on planning 
for affordable housing on a permanent basis? What is the status 
of that?
    Mr. Montgomery. Congressman, are you referring to the long-
term redevelopment?
    Mr. Frank. I am referring to the possibility of poor people 
who were driven out and lost their homes being able to return 
to live in the city.
    Mr. Montgomery. Thank you very much, sir, for that 
question. One of the key things that we, speaking for FHA, sir, 
determined early on, to reference my previous point, was we 
could--we saw, we heard the concerns from many families who, 
through no fault of their own, had been uprooted and moved--
    Chairman Ney. The gentleman's time has expired. You can 
summarize, and then we can come back for a second round.
    Mr. Frank. No, my patience has expired along with the time.
    Chairman Ney. Okay. Mr. Davis.
    Mr. Davis of Alabama. Thank you, Mr. Chairman.
    Mr. Montgomery, let me ask you a little bit again about the 
homeownership or the home default initiative that has been 
lodged related to FHA payments. What percentage of the national 
mortgage market is FHA-backed?
    Mr. Montgomery. Currently, Congressman, our market share, 
our current market share, is about 4 percent of all loans out 
there.
    Mr. Davis of Alabama. Now, with respect to Louisiana and 
Mississippi, is there any reason to think that the number is 
substantially greater than that 4 percent?
    Mr. Montgomery. Congressman, I can't give you an exact 
figure, but, yes, it would be.
    Mr. Davis of Alabama. Well, what is your basis for thinking 
that it is significantly greater in Louisiana and Mississippi 
than it would be in the rest of the country, and how much 
greater do you think it is?
    Mr. Montgomery. Primarily due to the housing prices, sir, 
where because of the loan limits, it is difficult for FHA to 
compete, if you will, in markets such as up here in Washington, 
D.C., or on the west coast. Where housing prices are much more 
affordable, sir, the FHA has been a very good product for many 
low-income people.
    Mr. Davis of Alabama. It is as high as 15 percent in 
Louisiana and Mississippi, the FHA share of the market?
    Mr. Montgomery. Again, Congressman, if I could get you an 
exact figure?
    Mr. Davis of Alabama. Okay. The reason for my asking is 
that despite what I think is a good program, there clearly are 
a lot of mortgagees who are facing defaults who are not 
affected by HUD's efforts, and I wanted to ask, is there any 
particular good public policy reason for not launching some 
kind of initiative to reach the large number of families who 
don't have FHA-backed mortgages?
    Mr. Montgomery. Congressman, we have asked ourselves that 
same question many times within HUD. I, as the FHA 
Commissioner, can only speak for FHA. As much as I would like 
to, given the parameters of what FHA can and can't do, I just 
don't see right now how, without some legislative authority, we 
could reach the conventional market, if you will.
    Mr. Davis of Alabama. Would HUD look favorably on Congress 
providing legislative authority to reach beyond the FHA market, 
either one of you?
    Mr. Montgomery. Yes, yes, Congressman.
    Mr. Davis of Alabama. And I assume, Mr. Cabrera, you would 
share that?
    Mr. Cabrera. I would, but it is his world.
    Mr. Davis of Alabama. Well, it is all of our world. We all 
live in it together.
    Mr. Cabrera. In my case, and to the extent that it actually 
affects Indian housing, the answer is yes.
    Mr. Davis of Alabama. I agree with you, and I think a lot 
of the members on the committee would agree with you, that if 
we are serious about addressing the housing problem, I think 
you are right, that there is probably a greater FHA share of 
the mortgage in this these relatively low-income, southern 
States than in the country, but it is still a very small share 
of the market, I would suspect.
    The second thing I wanted to ask you about is the 
Homesteading Initiative, which, again, has positive elements to 
it, but as I understand the Homesteading Initiative, it is up 
to the person who would move into the home to bear the cost of 
the repair; am I right about that? That, in effect, the person 
would have the opportunity to come into this abandoned land, 
but would have to bear the cost of the repair; is that right?
    Mr. Montgomery. Not necessarily, Congressman. The key thing 
to note here is that HUD wants to do what they can to keep 
communities together, to help stabilize neighborhoods that will 
certainly need that. This program, we think, is designed to do 
that. Rather than under the current program where HUD can sell 
those properties, in this case we would turn them over to local 
units of government for $1. We, of course, will take a 
substantial financial hit for that, but it is part of our 
effort to make sure those communities are stabilized. We think 
it is something we should do. Now, it is up to the local unit 
of government whether they will work with the nonprofits such 
as Enterprise, Habitat for Humanity, just as some examples, to 
actually do the sweat equity or the repair to the home.
    Mr. Davis of Alabama. Let me again just follow up on that, 
because I think that you are--I understand what you are saying, 
but obviously, the local governments might have to bear a lot 
of the responsibility. But I would echo what Mr. Frank said, 
that this is a place for HUD to be proactive. It does not make 
a lot of public policy sense for me to say to these people, you 
have a shot of reclaiming this property and making some use of 
it if you can afford it, because, obviously, a lot of them are 
in destitute conditions.
    The final point that I will make before my time runs out, I 
think it is enormously important that we move forward with a 
much more expansive approach on housing, because this is the 
consequence of the government's inaction over the last several 
months. A lot of people who used to live in New Orleans feel 
they have no reason to go back. Unless we want this disaster to 
result in the repopulation and realignment of this city, the 
government needs to do more; frankly, HUD needs to do more and 
Congress needs to do more, to make an affirmative statement and 
to put proposals in place to make this city livable again. 
Otherwise, we are engaging in what amounts to a resettlement, 
and there is no place for that in our conscience when it comes 
to these evacuees.
    I yield back the balance of my time.
    Chairman Ney. Thank you.
    The gentlewoman from California, Ms. Waters, the ranking 
member.
    Ms. Waters. Thank you very much.
    I may have missed this answer already, but I am sorry I 
will have to request it again. HUD took some actions early on 
to build assistance, and I know that was discussed, I think, in 
the testimony that you had prepared where you talked about a 
number of things. One of the things you talked about was making 
some of the HUD properties available to FEMA, over 5,000 
properties that you had. Were those accepted and utilized by 
FEMA?
    Mr. Montgomery. Thank you, Ranking Member Waters. Early on, 
FHA identified about 6,000 homes that were currently unoccupied 
that had been foreclosed on. That was in the 11-State region 
around--well, to include Alabama, Mississippi, and Florida, and 
Louisiana as well. Since those homes have been foreclosed, many 
of them required extensive repair.
    Now, as part of an existing interagency agreement with FEMA 
that was developed with the hurricanes in Florida last year, we 
quickly modified that agreement to include these disasters. But 
again, many of these units needed repair. We quickly identified 
1,800, began the repair on them, and made those a part of the 
agreement with FEMA. We dispatched HUD staff to the FEMA 
regional office in Dallas over 2 months ago to work on placing 
families into these properties, a lot of which were located in 
Texas. To date, back to the 1,800 for a minute, about 500 
families have moved in. About another 700 families have been 
matched to a property, but not quite moved in, and the balance 
of that number are still under repair.
    Now, getting back to the other 4,000 or so homes, again, 
many of those need to be repaired. As families move out of 
hotels, we will certainly make those properties available to 
them. We are also researching the possibility of maybe offering 
some of those homes on a very discounted sale to some other 
families. But again, we are still working through those issues.
    Ms. Waters. Well, let me ask you, you said 6,000 
properties. How many all together?
    Mr. Montgomery. A little less than 6,000.
    Ms. Waters. Something less than 6,000. Why is it only 1,800 
are repaired?
    Mr. Montgomery. Well, I would say that it requires time. 
Unfortunately, whenever a home is foreclosed, we found that on 
average, they require at least $15,000 worth of repair. 
Building materials are in short supply. It is hard to get, in 
some cases, the labor to repair these homes. The last thing we 
want to do is put a family into a home that doesn't have 
appliances, or the roof is not--
    Ms. Waters. Do you have the money for the labor?
    Mr. Montgomery. As part of the interagency agreement, FEMA 
will reimburse us up to $10,000 per home. The rest of that--
    Ms. Waters. So the money is there for the labor?
    Mr. Montgomery. Finding the labor has been the biggest 
difficulty, given the shortage of labor in that part of the 
country.
    Ms. Waters. I am not sympathetic to that argument, because 
we have victims of Katrina and Rita coming from the area 
looking for jobs. You have contractors down there--you don't, 
but FEMA--where they are getting people from Guatemala. We have 
people who want to work, people who are unemployed. I don't buy 
the argument that you can't find the labor.
    What I buy is that between, I guess, HUD, FEMA and 
everybody else, there has been no program put in place by which 
to identify the unemployed, particularly those who come from 
the regions affected by the hurricane, and to place them into 
jobs. I mean, it is just outrageous that we have all of these 
unemployed people, and then we talk about we don't have enough 
people to do this kind of work.
    And if $15,000 is the average amount of work that is 
required on a foreclosed home, you could spend $15,000 in 15 
minutes in repairs. That is not a lot of money. That is not a 
lot of repair. I mean, that is a few drywalls and, you know, 
some faucets replaced. I mean, that is no big deal. We have 
people whom we are spending millions of dollars on and who are 
still on ships and in hotels, and we have got to do something 
to get these people into homes.
    How many days has it been since--
    Mr. Watt. One hundred ten.
    Ms. Waters. One hundred ten days, and we have about 4,000 
properties that could be repaired and used that we just haven't 
been able to get on line yet; is that right?
    Mr. Montgomery. I am sorry?
    Ms. Waters. About 4,000 properties we just have not been 
able to get on line yet, we haven't been able to get repaired 
and put into use?
    Mr. Montgomery. That number is accurate. But I would add, 
again, we are also looking at the homes that require less 
repair to perhaps be able to offer to some families who have 
expressed interest, who have called our call center. Because 
again, these homes have been pulled off the market. We didn't 
want to sell them at market rate. We may be in a position to 
offer these at a discounted sale to some families.
    But I do want to add that we did--we repaired over 1,800 
homes less than 10 weeks or so after this agreement was signed.
    Ms. Waters. I know. I know you probably think you did a 
good job and you should be complimented. We are just not in a 
complimentary mood right now with these television stories 
every night about these poor people who are dying for someplace 
to live. We really--I am really focused on the trailers, but 
when I saw your testimony, with the 6,000 homes, my appetite 
was immediately whetted, and I thought, oh, you know, here we 
go.
    So you had 6,000 homes; about 4,000 of those are left, 
1,800 have been repaired, but only 500 people are housed in 
that possibility of 6,000.
    But the other thing that you did is you gave a lot of 
waivers, and those waivers could have gotten people into homes, 
etc. How much have the waivers been able to do to get people 
into housing?
    Mr. Montgomery. As I referenced earlier, the last thing we 
want to do is to waive safety and soundness.
    Ms. Waters. We don't want you to do that. What did you 
waive?
    Mr. Montgomery. The waivers I referenced earlier had to do 
with our CPD program.
    Ms. Waters. Okay. So how many people got into houses as a 
result of those waivers?
    Mr. Montgomery. I will have to get that number for you.
    Ms. Waters. The chairman is telling me we have to go and 
vote, but I just want you to leave here knowing that we would 
really appreciate it if, for every housing resource you have, 
you could get somebody in it, and we are going to have to find 
a way to track that, because we just have to do better than we 
are doing. Thank you very much.
    Chairman Ney. We have a vote, but I would note to the 
Members that I am more than willing to come back and have 
questions. I would like to personally do a round of questions 
after you all ask your questions. I am more than willing to do 
that.
    The other thing, too, I wanted to note, I have talked with 
the ranking member, I think it would have not worked that well 
to have had a hearing at the point in time this happened. Now, 
in the critical juncture, maybe in January we could go down to 
New Orleans and Gulfport and physically go to the people and 
have a hearing. I know individual Members who went down. I know 
it would be helpful if we could do that.
    Mr. Scott. Before we vote, Mr. Chairman, could I ask my 
question?
    Chairman Ney. Absolutely. I am willing to come back.
    Mr. Scott. I do have a question. I want to get your 
response, because as I mentioned in my opening statement, we in 
Georgia rank third in the number of evacuees that we have, so 
it is a very critical issue. A major concern in one of those 
areas that HUD is involved in is your rental assistance through 
your KDHAP program in which you are providing some rental 
assistance.
    With that in mind, I want to share with you a major 
concern. I want to read just a part of a letter to me from my 
constituents in Georgia, the Georgia Municipal Association. 
They say, Congressman Scott: The Federal Government's policy of 
rental assistance money simply does not align with market 
reality. As I am sure you know, the Federal Government is 
offering evacuees $786 per month for rent, although in the 
metro area, the fair market value of rent is considerably 
higher, over $1,000. The Department of Housing and Urban 
Development's fair market rent of approximately $830 for the 
City of Atlanta is still not sufficient. As of last week, we 
were told by the Georgia Emergency Management Agency that a 
housing assessment conducted by the City of Atlanta had 
identified only 740 apartments that were available at that 
rate.
    My question simply is that given that the average rental 
payment for a two-bedroom apartment in Atlanta, Georgia's 
market approximates $1,000 per month, not even counting 
estimated monthly utility costs of another $400 per month; how 
do you think and how did you arrive at a market value 
substantially lower than that, and did you do an analysis of 
the market value? And given the fact that this information is 
coming from Georgia, what can we do to increase that to get the 
help down to the local governments so that this burden isn't 
totally on them to make up that difference?
    Mr. Cabrera. Congressman, I am reasonably certain that the 
Atlanta MSA has an area median rent that is higher than $746. 
The KDHAP voucher is not pegged to any one number. It is pegged 
to the area, the area fair market rent.
    So I am not entirely sure where the number was that you 
mentioned, $746.
    Mr. Scott. Right, $786.
    Mr. Cabrera. $786, where that came from. I will be happy to 
go back.
    Mr. Scott. Which does not include the utility cost. And 
when the average two-bedroom cost is over $1,000.
    Chairman Ney. We have about 4 minutes left in the vote. You 
can come back? I will be back.
    Mr. Scott. I think I will come back. It is important.
    Chairman Ney. We will reconvene in about 8 minutes.
    [Recess]
    Chairman Ney. We will go ahead. I want to thank you for 
returning.
    We will start with Mr. Scott. He was in the middle of a 
question.
    Mr. Scott. Thank you, Mr. Chairman. I think where we left 
off was the situation in Georgia that we are faced with, and 
this discrepancy in the amount of money that is allocated to 
cover rent, rental assistance, which is clearly about $200, 
maybe $300, $350 less, not including the cost for utilities.
    How do we deal with that? How can we get that discrepancy 
closed? We, in Congress, have allocated the moneys for that; 
you all have that authority. How quickly can we solve that 
problem?
    Mr. Cabrera. Mr. Scott, I did get some clarity on the rent 
issue. As I noted earlier, it is, in fact, area fair market 
rent that predominates in any given market where KDHAP is used.
    In the case of the Atlanta MSA, that number is $818, which 
means that a study was done, and I have signed those in the 
last 3 weeks. I was sworn in 3 weeks ago. And so sometime 
recently there was a rent study done. The rent study said that 
the fair market rent for a two-bedroom unit in the Atlanta area 
is $818. That is the applicable rent pursuant to KDHAP.
    Now, as part of the KDHAP program, the tenant also gets a 
utility deposit allowance and gets a security deposit 
allowance. But they don't get utilities, as far as I know. I 
can check with my staff, but let me find out.
    Correct, there are no utilities in the KDHAP program.
    Mr. Scott. I mean--you have got winter coming. How are 
people going to stay warm? How are they going to eat? How are 
they going to subsist? There is no utility.
    Mr. Cabrera. The KDHAP program is designed to deal with 
emergency response. It is allocated to FEMA. KDHAP comes out of 
a small subprogram within FEMA's program that we are 
administering for them. It is designed to essentially take care 
of a victim's rental needs or housing needs.
    Mr. Scott. In your opinion, what is it going to take for us 
to get some help down to our State and our local communities 
who are facing this issue? You say, it is $819. My folks down 
in Georgia say it is closer to $1,000 per month. There is a 
problem here. How do we address that?
    Mr. Cabrera. There are different elements to housing 
assistance and emergency response.
    Generally, there is an emergency response package that is 
provided to those folks who are not receiving help, essentially 
from HUD, in the form of anything that has to do with public 
and Indian housing. And those folks are being helped by FEMA. 
The folks that public and Indian housing are helping are folks 
that were previously receiving vouchers under Section 8 and 
those who were residents in public housing.
    And I have just been corrected by my staff, and evidently 
the fair market rent includes utilities.
    Mr. Scott. Well, I understand that. For $200, I think. Is 
that right, you have a utility of $200?
    Mr. Cabrera. I do not know what the utility allowance is.
    Mr. Scott. So that $200 is included in the $816?
    Mr. Cabrera. That is not--I know that is not how they used 
to statistically handle it.
    May I have a moment, please.
    Mr. Scott. Sure.
    Mr. Cabrera. Congressman, I am going to again go back to an 
old hat I used to wear.
    As a matter of practice, what typically happens is that 
there is fair market rent and there is a utility portion of 
rent that HUD publishes. As a general rule, that utility 
portion is published from time to time.
    The issue that you have just identified is unclear to me. 
We are looking it up right now, and I will get back to you as 
to whether the $818 number is a gross number or whether it is a 
net rent number with a utility on top. I suspect it is a gross 
number.
    Mr. Scott. Well, let me just say before I go to my next 
question, I know there are other questions that obviously this 
is an issue. It is a very serious one. I think it is one which 
we can do something about in terms of it. We need your 
direction to tell us what we need to do in Congress to fix that 
problem.
    It could be an additional appropriation. It needs to be 
something because it is clear that, you know, you have got 
average utility down there. My folks are saying--Georgia 
Municipal Association, City of Atlanta, Clayton County, Cobb 
County, De Kalb County, all of these counties that are holding 
over 30-, 40,000 folks, they are facing this dilemma.
    And so, we need to address that. That is a really killing 
issue to us.
    And you have got $900 or $1,000 in rent for a two-bedroom 
apartment, the utility is $400, that is $1,300, and you got 
only an assistance of $819, as you say. And quite possibly $200 
of that is folded in to take care of the utilities.
    Let me just ask you one other question too. For the FHA, in 
those FHA-insured homes in the devastated area, have you issued 
any moratorium on closure?
    Mr. Montgomery. Thank you, Congressman. Yes, sir, we have. 
We issued the first 90-day moratorium shortly after the 
hurricane. The first moratorium expired in late November. We 
extended, sir, an additional 90 days that will currently take 
us to the end February of 2006.
    Mr. Scott. Let me ask you. Another major concern is the 
long-term planning of this and your ability to work. Whatever 
it is, I do not know what these differences are.
    Well, before I get into that, what are the differences? 
Let's lay the cards on the table. I just believe that there are 
some problems. Not only are there problems within FEMA 
responding to this, problems within HUD responding to this, 
there appears to be a very serious problem of getting HUD and 
FEMA together.
    What is the status of your relationship with one another? 
Be frank and honest with us because there are clearly some 
problems here; we need to address those. There are people out 
there who are hurting because there is a failure with these two 
agencies, one dealing with the temporary that has to hand it 
off to the semipermanent to the permanent housing to fix. If 
there is no bridge there, if there is no glue there, we have a 
problem.
    Mr. Montgomery. I will address that, speaking for FHA and 
for housing at HUD. We realized early on that this was an 
unprecedented disaster. And we, on our own, dispatched dozens 
of HUD staff to staff Disaster Recovery Centers, knowing that 
FEMA would need those resources.
    We again modified an existing interagency agreement that we 
had with them, so we quickly put that into place along the Gulf 
Coast, relative to the FHA foreclosed homes that we had in our 
inventory. And working with them, we quickly pulled those homes 
off of the market, knowing that they would be occupied.
    What we did know early on was the level of repair that they 
required. But, again, that was us working together with FEMA.
    Mr. Scott. I want to get to this point. I want to know if 
this is the root of the problem.
    There have been individuals and housing advocates all 
across the board--and I am sure you are aware of this. They 
have increasingly been raising the issue of whether some or all 
of FEMA's housing assistance responsibilities should be 
transferred to HUD, the Federal agency which is primarily, as 
you are, for housing policy.
    And these calls have increased in light of the continuing 
criticism of FEMA's administration of its emergency housing 
programs.
    Where are we on that? Is there movement here? Is there any 
substance to these issues and this effort to transfer all of 
the housing into HUD?
    Mr. Montgomery. Well, certainly, sir, that is a decision 
others will have to make. But, speaking for the here and now, I 
think we have all learned significantly from this. And to the 
degree that we could, when we encountered a problem, instead of 
saying, Well, that is a square peg in a round hole, we said, 
let's make that square peg fit in that round hole.
    Mr. Scott. You are aware that some people are suggesting 
that?
    Mr. Montgomery. Sir, I am aware of that. Again, those are 
decisions for others to make.
    But I would also say one thing that we learned from this.
    Chairman Ney. I've got to call time on this. Sum it up.
    Mr. Montgomery. We learned from this, working with other 
Cabinet agencies--as you know, HUD is not the only Cabinet 
agency that has a housing role; certainly, USDA does and VA 
does. We work very closely with our partners in those other 
Cabinet agencies, including in the Disaster Recovery Centers, 
bringing all of our efforts, all of our properties to bear; and 
particularly USDA should be commended for what they did.
    Chairman Ney. I could be wrong, but before FEMA was 
created, didn't HUD have a HUD disaster, and they handled 
everything, and people got mad and they created FEMA.
    Mr. Montgomery. That is my understanding.
    Mr. Watt. Thank you, Mr. Chairman. I am not a member of 
this subcommittee, and I am an interloper, so I want to try to 
stay well within the 5 minutes.
    There is plenty of abuse that HUD, FEMA, and everybody else 
is taking. I want to take the opportunity to praise something 
that I think may have the capacity to be built upon.
    The Congressional Black Caucus's Katrina relief bill has a 
provision in it that would provide for payment of mortgage 
payments by the government for a 1-year or 2-year period; and I 
think it is wonderfully significant that HUD has picked that up 
with reference to the things that are under its jurisdiction.
    So a couple of questions, because I think we may have the 
potential here to build on something that you all have taken 
the lead on.
    Have you--in the aftermath of your decision to do this 
mortgage assistance program for FHA-insured mortgages, have you 
found any receptivity in your discussions with private mortgage 
lenders to do the same, to replicate this program with non-FHA 
insured mortgages? That is the first question.
    Second, you may not have this information readily available 
with you today, but I certainly would like for you to give the 
information to the committee. What is it going to cost to do 
this mortgage assistance program? Obviously, you all have 
costed it out, I would assume you have; you may not have the 
figures right here. But it seems to me that the way you have 
done it, picked up the payments for a period of time, and then 
tacked those payments back on the end of the mortgage, while it 
costs something in the short term, saves something in the long 
term because you do a lot less foreclosures.
    And where I am headed to here is, if we could get a number 
and this is a manageable number, we might be able to convince 
our colleagues here that by spending a little bit of money on a 
program such as this in the short term, we might even be able 
to convince lenders that by doing this in the short term, it is 
a long-term savings to them.
    So is there any receptivity that you have sensed from the 
private mortgage lenders to follow your lead, and if they did 
and did it basically on the same model, tacking the payments 
that are deferred onto the end of the mortgage, what would be 
the financial impact of doing that?
    Mr. Montgomery. Thank you, sir, for your questions. I will 
answer the second one first. You had asked about the cost of 
doing it.
    Speaking for HUD, we considered the cost of not doing it, 
that by investing in this--yes, it is a note, a second mortgage 
that is not payable, however, until the first mortgage is paid 
off or refinanced--we will lose less money in the long term.
    It wasn't our principal reason for doing it. We wanted to 
give these families some relief. They have got enough to worry 
about. We wanted to be able to take this off of their plate. To 
the degree that we could, sir, we did that.
    Mr. Watt. But you are not really saying that the net cost 
effect is--you have costed it out--is a positive figure, are 
you? I mean, surely it is costing you something.
    Mr. Montgomery. Absolutely.
    Mr. Watt. I understand that this is a good gesture. But I 
want the record to be clear. You are not saying FHA and HUD are 
going to gain money as a result of doing this?
    Mr. Montgomery. No, sir, we will not.
    Mr. Watt. So there is a cost associated with it that is 
aside from the, you know, the cost of not doing it?
    Mr. Montgomery. That is correct.
    Mr. Watt. That is the cost I am looking for. And, you know, 
you may not have it today. I just think it is important for us 
to get it in the record.
    Mr. Montgomery. Yes, sir. We will do that.
    Chairman Ney. The time has expired. You can sum up.
    Mr. Montgomery. Just quickly, sir. It is difficult for us 
to speak for the conventional market. Speaking for Fannie and 
Freddie, though, they did put moratoriums on their mortgages 
fairly early on.
    Perhaps the conventional market will look at the fact that 
we will lose less money by doing this effort, and they will 
have to make those decisions on their own.
    Chairman Ney. Ms. Lee.
    Ms. Lee. Let me go back to asking my question with regard 
to the homeless. In terms of those who were homeless prior to 
Katrina, what are the details in terms of eligibility for 
program assistance and funds for evacuees now, who were 
homeless prior to Katrina, and who knows where they are now?
    But what is going on with them and how do they become 
eligible for housing assistance?
    Mr. Cabrera. Many of these questions are answered, frankly, 
by the existing system. It is a continuum of care. And those 
who are homeless and involved in a continuum of care, who are 
identified; and then what we would do is match that with 
current FEMA intake information and try to locate them.
    In those cases where they were located, we are providing 
housing, including KDHAP vouchers.
    Ms. Lee. And when they return home, what will they go back 
to? Where will they be returned to in terms of housing?
    Mr. Cabrera. We are implementing a housing solution that 
would entail a greater incentive than just the physical locale 
in which to live, with respect to the Katrina response.
    But returning home is an issue as well. I mean, New Orleans 
is probably not going to be an alternative for a homeless 
person to go back to for a while. So at the end of the day, 
what we are trying to do is maintain this program, the KDHAP 
program, in order to provide for their housing as long as 
possible.
    Ms. Lee. I guess when they return home, when it is safe for 
them to return home and when there has been adequate housing 
built, a person who was homeless prior to Katrina, will they be 
eligible to return to some rental housing, for example, 
subsidized by HUD, or where they will return?
    Mr. Cabrera. They will be eligible to still receive the 
subsidy they previously received when they were part of the 
continuum of care.
    Ms. Lee. But--part of the continuum of care, sure, but if 
you are homeless, you are living in a shelter or you are 
homeless. So do you return homeless to the block where you were 
living, or do you go to the shelter?
    Mr. Cabrera. In the case of the homeless, there are a 
variety of groups. There are folks who are homeless for one 
reason or another. In some cases, those are folks that are 
going to go to shelters. That is the place where they feel they 
are best served. So that largely becomes an issue of how that 
city deals with the homeless issue in their particular area.
    For those who are looking to go beyond that, that is a 
longer-term issue that I believe frankly would be outside the 
orbit of emergency response. Most of what we have been dealing 
with here is emergency response.
    Ms. Lee. Okay. So for those living in the streets who are 
homeless and had to leave to survive, what do they return to?
    Mr. Cabrera. Well, I think it depends upon--it is not a 
question of what they return to. Their question is, we have to 
locate them now.
    Ms. Lee. Well, once you locate them.
    Mr. Cabrera. I am trying understand the question a little 
bit better. I think what you are trying to ask me is, what 
happens after the subsidy is up, the KDHAP subsidy is up?
    Ms. Lee. When people return home, when housing is built, 
when it is safe to return, people who were living in the 
streets, who had to leave--
    Mr. Cabrera. They were already receiving some subsidy from 
public and Indian housing.
    Ms. Lee. But they did not have any place to live. What I am 
trying to find out is, will they have a place to live now when 
they return to New Orleans?
    Mr. Cabrera. I think that is part of a more general 
question, which is, what is that continuum of care eventually 
going to do for folks who are homeless, what is ``homeless'' 
defined as?
    Ms. Lee. But if you are living on a block, a street corner, 
and you are homeless, and you get whatever subsidy you get 
every month to get food stamps or whatever, do you return to 
that block where you are living, where you were living?
    Mr. Cabrera. You were previously in a program where people 
were familiar with you and people were attending to your needs. 
And at that time, the time the hurricane hit, we were asked to 
undertake essentially a housing solution for them in that 
context. For those folks, that continuum of care will persist.
    But I am not sure that those are the only folks you are 
discussing.
    Ms. Lee. I am talking about other folks. I know that New 
Orleans had a large homeless population, like many urban areas. 
So what happens to those were living in the streets?
    Mr. Cabrera. For folks who were living in the streets, 
whose continuum of care we are not aware of, I mean, no one--
    Ms. Lee. So everyone had shelter? Everybody was living in a 
shelter?
    Mr. Cabrera. I do not believe that anyone has ever 
maintained that those folks had shelter. I think the issue is 
that there is a continuum of care that was trying to deal with 
them. That is the context that we can best address.
    Ms. Lee. But will they have shelter when they return?
    Mr. Cabrera. The issue is first locating and identifying.
    Chairman Ney. The time has expired. Mr. Cleaver.
    Mr. Cleaver. Thank you, Mr. Chairman.
    Mr. Montgomery or Mr. Cabrera, first of all, this is a 
question that I think all human beings can feel.
    What is your assessment of the interest of Congress in 
trying to solve the issues, the mammoth issues, in the Gulf 
Coast region based on--you know, there are four people here 
from the committee, but does that say anything to you at all?
    Mr. Montgomery. I am sorry, Congressman. I want to make 
sure I understand the question. You are asking our assessment 
of Congress' role or their interest?
    Mr. Cleaver. No. I know the role of Congress.
    I am asking if you can look here at the four Members 
present, and realize there are about 30 others who are not 
here, maybe more. Does that make any suggestion to you about 
the disinterest in Congress, that this issue has already had 
its moment in the sun, and so there is no need to, you know, 
press forward to try to resolve the issues that are in front of 
us?
    What do you think when you look up here?
    Mr. Montgomery. Congressman, it is hard for me to speak why 
there are so few Members here today.
    Mr. Cleaver. No, no, no.
    Mr. Montgomery. If I understand the question, we have had 
significant discussions with Members not here today, with their 
staffs, and certainly the Members who are in the Gulf Coast 
region.
    Mr. Cleaver. That is not what I am talking about.
    I don't blame you for avoiding it, because it has nothing 
to do with you in a way; it has something to do with the 
problem that I think faces this country on almost any issue. 
That is attention deficit disorder.
    I mean, all of a sudden there is no interest, it appears, 
in this issue. And people are in pain. And I just wonder 
whether or not both HUD and FEMA would have a different kind of 
aggressiveness if there appeared to be Herculean interest both 
from the Administration and from Congress?
    And you are saying that it wouldn't matter, you are going 
to--you are going to just push ahead no matter what anyway. I 
mean, that is the correct answer.
    Mr. Montgomery. It is true, sir. We are pushing ahead.
    Mr. Cleaver. I understand. Okay, well, I am trying to make 
my point too. Hopefully, I have.
    Is training going on now for fair housing and 504 housing 
accessibility requirements in the flood-ravaged area? Are you 
doing training on fair housing and 504? Assistant Secretary Kim 
Kendrick recently described training on fair housing and 504 
housing accessibility requirements that the Department is 
conducting in the hurricane affected areas.
    Can you describe now the training that is going on?
    Mr. Montgomery. Congressman, I cannot get into a level of 
detail on the training, as that is not a program that is under 
my purview. But I can wholeheartedly say that Assistant 
Secretary Kendrick is 100 percent committed to making sure that 
fair housing remains a large part of the recovery and 
rebuilding effort in and around the Gulf Coast region, and 
throughout the country.
    Early on, staff from fair housing were dispatched to the 
Gulf Coast region, within days, and those staff are still down 
there, sir. And since that time, Assistant Secretary Kendrick 
has been sworn in, and she has continued an equally aggressive 
posture in that regard.
    Mr. Cleaver. I am not sure if it is under your purview or 
not. But do you know if HUD is doing something proactively to 
make sure that HUD contractors are aware of 504 and fair 
housing guideline obligations?
    Mr. Montgomery. Sir, if I can get you a concrete response 
after this, after I have discussed it with Assistant Secretary 
Kendrick--
    Mr. Cleaver. Thank you very much.
    Let's move on. One of the concerns that seems--that I think 
is being kind of overlooked: Why is it that the mortgage 
lenders--why are mortgage lenders asking evacuees to get vacant 
property insurance?
    Mr. Montgomery. I am sorry, sir, about property insurance?
    Mr. Cleaver. Vacant property insurance. Evacuees, some have 
said to us that they are being required to get vacant property 
insurance.
    Mr. Montgomery. Well, sir, I can speak for FHA in that 
regard; I cannot speak for the conventional market.
    But part of our market assistance initiative is, we will 
pay the insurance for that 1-year period. In addition to the 
principal, the interest, and the taxes, we also pay the 
insurance.
    Mr. Cleaver. Okay.
    Chairman Ney. Let me just ask one question, and then we 
will go on if you have some other rounds of questions.
    Has HUD completed the damage assessments in the impacted 
areas? Have you completed those?
    Mr. Montgomery. Speaking for FHA, sir, those damage 
assessments continue as we speak. I have previously shared some 
of the numbers on the FHA properties, as far as the levels of 
damage, whether they are severely damaged or can be repaired.
    Relative to the multifamily portfolio, we have a little 
more concrete answers. It appears right now, for the three 
disasters in the Gulf Coast region, the estimated damage for 
multifamily properties is a little less than $400 million.
    Chairman Ney. One thing I wanted to mention. This is what 
was in a recently updated version of HUD's online report. I 
know you took some of those actions on assessing damages.
    In the recent report, it says, ``Actions taken in response 
to Hurricane Katrina,'' dated November 1st, HUD states, ``All 
physical inspections of both public housing and multifamily 
properties in the impacted counties in Mississippi, Louisiana, 
Alabama and Florida have been postponed.'' That was online. Are 
you aware of that?
    Mr. Montgomery. I do not believe, speaking for our 
portfolio, sir, I do not think that is the case. We have fairly 
concrete numbers now.
    Mr. Cabrera. Mr. Chairman, I think what that might be 
referring to--and I will go back and double-check--is that as 
part of our customary practice, we do physical inspections. So 
they mean the physical inspection of units that are required, I 
think, in public housing.
    The postponement means that we know you are busy trying to 
recover, so therefore you should not expect HUD or any of its 
inspectors to knock on the door and assess you based upon 
damaged property. That is, I think, what they intend by stating 
it.
    Chairman Ney. Do you know why the proposal, I think, we 
have seen so far from the Administration--why it did not 
include designated funding for repairing and rebuilding the 
damaged and destroyed public housing properties; or is that 
altered and there is now a proposal to do that? In other words, 
restoring public housing that was damaged in those areas, is 
there something in the Administration's proposal that would do 
that?
    Mr. Cabrera. I think the Administration is committed to 
restoring multifamily housing to the extent that the President 
has committed or made it clear that New Orleans needs to 
recover, because it is critical to the United States.
    I think the issue is that there are a lot of ways to 
recover inventory. And I am not entirely sure that it is just 
an issue of the public housing appropriation. I also think that 
part of the appropriation in the supplemental was designed to 
deal with the ability to either rehabilitate or build units of 
one kind or another for affordable housing.
    Chairman Ney. Well, I will move on to our ranking member. I 
just think as this--you know, I have other questions which we 
will ask HUD. But with the housing authorities and what had to 
happen, and moving people and brand-new Section 8 vouchers, and 
people have gone across the country with all of these issues 
that are out there, I just think that we are going to have to 
be careful in the Congress to make sure that as we try to help 
people, HUD then does not, you know, try to assume the costs of 
all this, and then people who are on waiting lists in other 
parts of the country do not have help.
    I mean, I think that is something that we have got to be 
careful to watch.
    Ms. Waters. I know that you have probably been asked some 
of these questions more than once.
    But what is amazing me as I examine what FEMA is supposed 
to be doing and what HUD is doing, I believe that there are 
just tremendous resources, but we do not feel the impact of 
those resources out there.
    Let me just ask you, the Katrina Disaster Housing 
Assistance Program--HUD is responsible for administering the 
Katrina Disaster Housing Assistance Program--will provide up to 
18 months of temporary rental assistance for tens of thousands 
of families displaced by Hurricane Katrina; will jointly 
administer this program with the help of approximately 2,500 
public housing authorities for those receiving HUD assistance 
before the hurricane struck.
    To be eligible, displaced families must register with FEMA. 
Families will be given a rental subsidy based on 100 percent.
    Okay, so FEMA handles this program for you, for the victims 
of the disaster. They register with FEMA, those who are 
eligible for the Katrina Disaster Housing Assistance Program. 
They register with FEMA. Is that how it works?
    Mr. Cabrera. Typically what happens is that anyone who is a 
storm victim registers with FEMA generally. If that person 
happens to have been a tenant in public housing or a recipient 
of a Section 8 voucher, then the KDHAP program was created in 
order to provide them with the ability to pay for housing, and 
that is what the KDHAP is designed to do.
    Ms. Waters. So how many families or individuals have you 
assisted who have gone through and gotten their FEMA 
registration, and they have been connected with or identified 
with one of the persons eligible for KDHAP? How many of those 
have you assisted?
    Mr. Cabrera. The number of people assisted right now is--
approximately 12,500 people have been processed to receive 
KDHAP.
    Ms. Waters. What does that represent of the total number, 
or would you have any way of knowing?
    Mr. Cabrera. The total number of people who are potentially 
qualified to receive KDHAP is approximately 75,000 in terms of 
people who received HUD assistance.
    Ms. Waters. What do you think happened to the rest of those 
folks, the 75,000?
    Mr. Cabrera. I see why the difference between 75,000 and 
approximately 12,500. In many cases, it is finding folks; in 
many cases, it is people who have not signed up; in many cases, 
issues of eligibility are being dealt with.
    It is not an easy thing to locate people after a storm, 
even 110 days after a storm.
    Ms. Waters. Do you have a public relations program or a 
public service program of some kind where you do outreach to 
try and say, if you lived in public housing, this is what you 
do? Do you have something like that?
    Mr. Cabrera. Yes, we have, and we have used it extensively.
    Ms. Waters. Okay.
    Now, Congresswoman Lee was asking you about homeless 
individuals. This information that you gave us said eligible 
families include displaced public housing residents, Section 8 
voucher holders, other HUD-assisted households, and predisaster 
homeless individuals who are directly affected by the 
hurricane.
    Mr. Cabrera. Correct.
    Ms. Waters. Do you know if any of those homeless people 
have been assisted?
    Mr. Cabrera. As I recall, a lot of those folks are 
currently receiving KDHAP vouchers, yes. I do not know the 
number affirmatively, because again it is difficult to 
ascertain.
    These are people who would have to register with FEMA. In 
many cases, they do not.
    Ms. Waters. Okay.
    The FHA provides both single and multifamily housing 
insurance when there is a disaster declared. The declaration 
automatically implements certain procedures with regard to FHA-
insured mortgages in the affected areas. These procedures 
remain in effect for 1 year.
    Who, and how can you describe who has received assistance 
from HUD as a result of this declaration? I am interested in 
the mortgage payment problem. We have a lot of homeowners in 
some of these areas, and most of them cannot continue to pay 
the mortgage, but I guess they will continue to owe. Some of 
them were insured and some were not. How do you fit into that?
    Chairman Ney. The time has expired, but please go ahead and 
answer the question.
    Mr. Montgomery. Thank you, Ranking Member Waters. Again, 
speaking only for FHA, we just announced this program last 
week. And mortgagees, lenders, are in the process of reaching 
out to their borrowers who will be eligible for this program.
    We have also sent out numerous news releases, media 
interviews within the region, encouraging people who have FHA 
mortgages to call their lenders as soon as possible. And I can 
get you some numbers after this meeting.
    Ms. Waters. Well, just tell me how it works real quick, if 
I may. They call and say, I cannot pay my mortgage, then what 
happens?
    Mr. Montgomery. We will have to look at their current 
situation. But if they do qualify for the program, then we will 
forebear, we will put off those payments for a period of up to 
12 months.
    Ms. Waters. Up to 12 months. So it is too soon to know 
whether or not anybody is taking advantage of that program? It 
is recent?
    Mr. Montgomery. Yes, ma'am. We just announced it last week. 
I will get you some numbers after this meeting and communicate 
those back to your office.
    Ms. Waters. And you will make that program aware to the 
mortgage holders, the banks, and what have you, and they will 
tell the people that they can have their mortgages placed on 
hold for a year?
    Mr. Montgomery. The lender, if you will, will sit down with 
the borrower and look at their assessment, look at the damage 
assessment, and determine whether or not they are eligible for 
the program, because it is the lender's loan; FHA just provides 
the insurance.
    Ms. Waters. All right. Mr. Chairman, I will follow up on 
that.
    Chairman Ney. Other final questions?
    Ms. Lee. I would like to ask you about HUD's contracting 
authority and what exactly takes place as it relates to housing 
and community development efforts in this whole Katrina 
response.
    Several of us met with the African American Chamber of 
Commerce and minority and small businesses. And, of course, the 
concern right after Katrina was that these companies have been 
shut out of the primary contracts in terms of cleanup and all 
of the immediate kind of work.
    Does HUD intend to, or are you contracting any of these 
programs out now, or will you be? And if so, what type of 
contracts will you be letting?
    Mr. Montgomery. Congresswoman, we have our Assistant 
Secretary for Community Planning and Development here if you 
would like her to respond to those questions.
    I will offer, though, that HUD, as an agency, I believe 
leads the government in contracts with minority and 
disadvantaged firms in 8a contracts. I know that they have an 
outstanding record in that regard.
    Ms. Patenaude. Congresswoman, if I could echo Assistant 
Secretary Montgomery, Secretary Jackson is very committed to 
small business. It is actually a procurement question.
    Ms. Lee. And minority businesses?
    Ms. Patenaude. Absolutely.
    Ms. Lee. Could you tell us, give us an example of the type 
of contracts that will be coming down the pike as it relates to 
the Katrina efforts?
    Mr. Cabrera. Most of the efforts relating to contracting at 
NPIH we have worked in within the context of the existing 
contracts. A lot of those servicers are 8a and minority-owned 
contracts. And we have simply, within the orbit of the law, 
within what is permissible, expanded that servicing.
    What is coming down the pike, I am--honestly, 
Congresswoman, I do not know. But I think one of the things you 
are asking me is whether HUD will have to do, for example, 
debris removal, or will HUD do other kinds of emergency 
response functions. And typically, the answer from PIH's 
perspective--and not to speak for either of my two colleagues, 
but generally from HUD's perspective, is, no, that is typically 
handled by FEMA.
    Ms. Lee. Okay. Well, is there a way, though, that we can 
get an idea of what you will be contracting out in terms of the 
Katrina response?
    Mr. Cabrera. I am happy to inquire and get back to your 
office.
    Ms. Lee. Thank you very much. And also what if the plans 
are, if it is strictly expanding 8a contracts to include a 
larger scope of work, let us know that, or just what exactly 
you plan to do with those new funds.
    Thank you.
    Chairman Ney. Mr. Cleaver.
    Mr. Cleaver. Thank you, Mr. Chairman.
    I am going to give you the HUD funding targeted for the 
rescission package, and I want you to tell me if it will have 
an adverse impact on what we are trying to do in the Gulf 
region: $100 million for Section 811 disabled housing 
construction program; $24 million for the HUD brownfields 
redevelopment grant; and $6 million in credit subsidies for the 
CDBG Section 8 program.
    Those are all targeted for rescission. What impact will 
that have on what we are trying to do in the Gulf region?
    Mr. Montgomery. Sir, relative to the 811, the $100 million 
was unobligated funds. Those funds had not yet been obligated.
    Mr. Cleaver. So there is no impact. Is that what you are 
saying?
    Mr. Montgomery. Sir, it is difficult to say what that 
impact would have been, since they were unobligated. But that 
is what the decision is that was made.
    Mr. Cleaver. Brownfield, I mean if there has ever been a 
brownfield explosion, it would be certainly in the Ninth Ward. 
And $24 million is being cut from the brownfield program.
    Mr. Montgomery. Again, Congressman, I would ask that 
Assistant Secretary Patenaude, who administers that program, 
respond.
    Ms. Patenaude. Congressman, we have money still available 
in fiscal year 2005. We have not awarded the 2005 awards, and 
we do anticipate having $10 million in 2006.
    Mr. Cleaver. So they were unobligated. These were 
brownfield dollars that were available that cities were not 
awarded.
    Ms. Patenaude. They have not been awarded yet for 2005. 
They will be shortly.
    Mr. Cleaver. They will be awarded shortly?
    Ms. Patenaude. Correct.
    Mr. Cleaver. So we cannot count that as dollars that will 
be used in New Orleans?
    Ms. Patenaude. That competition was under way prior to the 
hurricane.
    Mr. Cleaver. Yes, that is the precise point I am making. So 
$24 million in the rescission for brownfield will have an 
impact on what we are going to need it to do in New Orleans.
    Ms. Patenaude. We will still have $10 million available in 
fiscal year 2006 for brownfields.
    Mr. Cleaver. So the $24 million is irrelevant to what we 
want to do in New Orleans?
    Ms. Patenaude. It could have a potential impact. It is a 
competitive program.
    Mr. Cleaver. I am a former mayor. I am familiar with all of 
these programs, very familiar with them. And since New Orleans 
cannot compete, probably, right now in terms of developing the 
programs and making all of the assessments, how are we going to 
deal with brownfield problems and no money?
    I mean, they cannot compete. You are saying that the cities 
have already competed.
    Go ahead.
    Ms. Patenaude. In 2006, we will have $10 million available.
    Mr. Cleaver. For New Orleans?
    Ms. Patenaude. New Orleans would be eligible to compete for 
those dollars.
    Mr. Cleaver. Okay. So if we have, let's say, four major 
projects, let's say five or six large service stations or some 
other highly toxic soil, it will take up the $10 million.
    So what we are saying is that there is a minuscule amount 
of money compared with the need that will go into New Orleans?
    I mean, $10 million. God bless everybody, but I mean, I 
wish I had $10 million. But, you know, $10 million in my pocket 
is different than $10 million in New Orleans after this flood, 
and after the contamination level has made the whole city a 
brownfield.
    So $10 million is insufficient; isn't that right?
    Ms. Waters. Will the gentleman yield so I can give you some 
information that may be helpful with this questioning.
    I am told by staff that the $24 million in brownfield has 
been rescinded. They sent in a request for rescinding that 
money, along with $100 million for Section 811 and $6 million 
for CDBG.
    Mr. Cleaver. Yes, I just gave them that information.
    Ms. Waters. She said it was going to be awarded?
    Mr. Cleaver. She said there was $10 million that was not 
awarded last year that will be used in New Orleans.
    As a former mayor, I am saying that $10 million in Kansas 
City, the largest city in the State of Missouri, would not deal 
with 10 blocks. We are talking about a whole city that is a 
brownfield, Brownfield, Louisiana. So we do not have enough 
money, right, for the brownfield?
    Ms. Patenaude. We have $14 million still available for 
fiscal year 2005, and $10 million for the fiscal year 2006 
after the rescission.
    Mr. Cleaver. So we would have had $48 million without the 
rescission?
    Chairman Ney. Any additional questions? Time has expired.
    Ms. Patenaude. We are dealing here with 2 fiscal years.
    Mr. Cleaver. I understand.
    Ms. Patenaude. The $24 million rescission is for fiscal 
year 2005.
    Mr. Cleaver. So we do not have enough money, right?
    I mean, can somebody else answer, somebody over here? Do we 
have enough money?
    Ms. Patenaude. Sir, the CDBG program can also be used.
    Chairman Ney. No, we don't.
    Seriously, it is going to take billions of dollars for the 
infrastructure, just to get the cleanup. That is my opinion. I 
mean, I think it is going to take billions. Any response to 
that?
    Mr. Cleaver. Write it out and do not sign your name to it. 
I mean, you know, when you look at the rescission and then you 
look at the problems that are out there, does HUD support this, 
the rescission?
    Mr. Montgomery. Sir, relative to all of the decisions, 
obviously this was a disaster of unprecedented scale. Some 
difficult decisions had to be made.
    Mr. Cleaver. So HUD doesn't support it?
    Mr. Montgomery. Sir, that was a decision that was made on 
the rescission.
    Mr. Cleaver. So you are denying HUD made it? God bless you. 
Have a nice holiday season. I appreciate it.
    Chairman Ney. If we could follow up with questions that you 
have, we would like them back in writing.
    I wanted to also note, this is Cindy Chetti's birthday.
    Cindy, raise your hand. So happy birthday.
    She does a lot of work on this committee and helps a lot.
    I want to thank the members. I want to thank HUD. I 
appreciate your patience today, and follow-up questions, I 
think, will be important.
    So with that, we may have additional questions for this 
panel; they may want to submit in writing. Without objection, 
the hearing will remain open for 30 days for members to submit 
their questions and for the witnesses to place their response.
    Thank you very much.
    [Whereupon, at 4:30 p.m., the subcommittee was adjourned.]


                            A P P E N D I X



                           December 14, 2005


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