[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]




 
                     SOLVING THE AFFORDABLE HOUSING
                    CRISIS IN THE GULF COAST REGION
                          POST-KATRINA, PART I

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

                             FIELD HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                   HOUSING AND COMMUNITY OPPORTUNITY

                                 OF THE

                    COMMITTEE ON FINANCIAL SERVICES

                     U.S. HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

                           FEBRUARY 22, 2007

                               __________

       Printed for the use of the Committee on Financial Services

                            Serial No. 110-5


                    U.S. GOVERNMENT PRINTING OFFICE
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                 HOUSE COMMITTEE ON FINANCIAL SERVICES

                 BARNEY FRANK, Massachusetts, Chairman

PAUL E. KANJORSKI, Pennsylvania      SPENCER BACHUS, Alabama
MAXINE WATERS, California            RICHARD H. BAKER, Louisiana
CAROLYN B. MALONEY, New York         DEBORAH PRYCE, Ohio
LUIS V. GUTIERREZ, Illinois          MICHAEL N. CASTLE, Delaware
NYDIA M. VELAZQUEZ, New York         PETER T. KING, New York
MELVIN L. WATT, North Carolina       EDWARD R. ROYCE, California
GARY L. ACKERMAN, New York           FRANK D. LUCAS, Oklahoma
JULIA CARSON, Indiana                RON PAUL, Texas
BRAD SHERMAN, California             PAUL E. GILLMOR, Ohio
GREGORY W. MEEKS, New York           STEVEN C. LaTOURETTE, Ohio
DENNIS MOORE, Kansas                 DONALD A. MANZULLO, Illinois
MICHAEL E. CAPUANO, Massachusetts    WALTER B. JONES, Jr., North 
RUBEN HINOJOSA, Texas                    Carolina
WM. LACY CLAY, Missouri              JUDY BIGGERT, Illinois
CAROLYN McCARTHY, New York           CHRISTOPHER SHAYS, Connecticut
JOE BACA, California                 GARY G. MILLER, California
STEPHEN F. LYNCH, Massachusetts      SHELLEY MOORE CAPITO, West 
BRAD MILLER, North Carolina              Virginia
DAVID SCOTT, Georgia                 TOM FEENEY, Florida
AL GREEN, Texas                      JEB HENSARLING, Texas
EMANUEL CLEAVER, Missouri            SCOTT GARRETT, New Jersey
MELISSA L. BEAN, Illinois            GINNY BROWN-WAITE, Florida
GWEN MOORE, Wisconsin,               J. GRESHAM BARRETT, South Carolina
LINCOLN DAVIS, Tennessee             RICK RENZI, Arizona
ALBIO SIRES, New Jersey              JIM GERLACH, Pennsylvania
PAUL W. HODES, New Hampshire         STEVAN PEARCE, New Mexico
KEITH ELLISON, Minnesota             RANDY NEUGEBAUER, Texas
RON KLEIN, Florida                   TOM PRICE, Georgia
TIM MAHONEY, Florida                 GEOFF DAVIS, Kentucky
CHARLES A. WILSON, Ohio              PATRICK T. McHENRY, North Carolina
ED PERLMUTTER, Colorado              JOHN CAMPBELL, California
CHRISTOPHER S. MURPHY, Connecticut   ADAM PUTNAM, Florida
JOE DONNELLY, Indiana                MARSHA BLACKBURN, Tennessee
ROBERT WEXLER, Florida               MICHELE BACHMANN, Minnesota
JIM MARSHALL, Georgia                PETER J. ROSKAM, Illinois
DAN BOREN, Oklahoma

        Jeanne M. Roslanowick, Staff Director and Chief Counsel
           Subcommittee on Housing and Community Opportunity

                 MAXINE WATERS, California, Chairwoman

NYDIA M. VELAZQUEZ, New York         JUDY BIGGERT, Illinois
JULIA CARSON, Indiana                STEVAN PEARCE, New Mexico
STEPHEN F. LYNCH, Massachusetts      PETER T. KING, New York
EMANUEL CLEAVER, Missouri            PAUL E. GILLMOR, Ohio
AL GREEN, Texas                      CHRISTOPHER SHAYS, Connecticut
WM. LACY CLAY, Missouri              GARY G. MILLER, California
CAROLYN B. MALONEY, New York         SHELLEY MOORE CAPITO, West 
GWEN MOORE, Wisconsin,                   Virginia
ALBIO SIRES, New Jersey              SCOTT GARRETT, New Jersey
KEITH ELLISON, Minnesota             RANDY NEUGEBAUER, Texas
CHARLES A. WILSON, Ohio              GEOFF DAVIS, Kentucky
CHRISTOPHER S. MURPHY, Connecticut   JOHN CAMPBELL, California
JOE DONNELLY, Indiana
BARNEY FRANK, Massachusetts


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on:
    February 22, 2007............................................     1
Appendix:
    February 22, 2007............................................    83

                               WITNESSES
                      Thursday, February 22, 2007

Babers, C. Donald, Board Chairman, Housing Authority of New 
  Orleans........................................................    38
Blakely, Edward J., Director of Recovery, City of New Orleans....    36
Blanco, Hon. Kathleen Babineaux, Governor, State of Louisiana....     2
Blom, Dominique G., Deputy Assistant Secretary, Office of Public 
  Housing Investments, Department of Housing and Urban 
  Development....................................................    29
Bradberry, Stephen, Association of Community Organizations for 
  Reform Now.....................................................    57
Dupuy, Ben, Executive Director, Cypress Cottage Partners.........    63
Jamieson, Gil, Deputy Director for Gulf Coast Recovery, Federal 
  Emergency Management Agency....................................    32
Jefferson, Hon. William J., a Representative in Congress from the 
  State of Louisiana.............................................     8
Johnigan, Donna, tenant..........................................    62
Kelly, James R., Chief Executive Officer, Catholic Charities.....    56
Leger, Walter J., Jr., Chairman, Housing and Development Task 
  Force, Louisiana Recovery Authority............................    34
Nagin, Hon. C. Ray, Mayor, City of New Orleans, Louisiana........    13
Paul, Emelda, President, Lafitte Resident Council................    65
Perry, James H., Greater New Orleans Fair Housing Action Center..    54
Reiff, Isabel, Senior Vice President, ICF International, Inc.....    69
Rodi, Mark, President-elect, Louisiana Realtors Association......    73
Taylor, Paul R., Jr., President, SRP Development.................    74
Thomas, Hon. Oliver M.,Jr., President, New Orleans, Louisiana 
  City Council...................................................    15
Washington, Tracie L., Director, NAACP Gulf Coast Advocacy Center    71
West, Dr. Sherece Y., CEO, Louisiana Disaster Recovery Foundation    59
Williams, Gloria, tenant.........................................    61

                                APPENDIX

Prepared statements:
    Blakely, Edward J............................................    84
    Blom, Dominique G............................................    90
    Bradberry, Stephen...........................................    95
    Dupuy, Ben...................................................   101
    Jamieson, Gil................................................   106
    Leger, Walter J., Jr.........................................   115
    Nagin, Hon. C. Ray...........................................   149
    Reiff, Isabel................................................   159
    Rodi, Mark...................................................   170
    Taylor, Paul R., Jr..........................................   177
    Washington, Tracie L.........................................   180
    West, Dr. Sherece Y..........................................   191


                     SOLVING THE AFFORDABLE HOUSING
                    CRISIS IN THE GULF COAST REGION
                          POST-KATRINA, PART I

                              ----------                              


                      Thursday, February 22, 2007

             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 2:10 p.m., in 
the Lawless Memorial Chapel, Dillard University, 2601 Gentilly, 
New Orleans, Louisiana, Hon. Maxine Waters [chairwoman of the 
subcommittee] presiding.
    Present: Representatives Waters, Green, Cleaver, Sires; 
Biggert, and Neugebauer
    Also present: Representative Jefferson.
    Chairwoman Waters. Ladies and gentlemen, this hearing of 
the Subcommittee on Housing and Community Opportunity will come 
to order. Thank you very, very much.
    Before we start, we would like to call on President Hughes 
for some remarks. President Hughes.
    Ms. Hughes. Good afternoon, everyone. I am Marvalene 
Hughes, president of Dillard University, and it is indeed a 
pleasure for us to have you, Honorable Congresswoman Maxine 
Waters, here to chair this hearing.
    The Dillard University family considers this to be 
absolutely an appropriate event for us to host and we consider 
it so because we know the devastation that has occurred to many 
of the residents in this area and in New Orleans.
    We join you in wanting to provide the kind of service and 
housing that they need and we promise you that we will continue 
to be the best citizens that we know how to be in providing 
educational opportunities and in servicing our community.
    And so we thank you so very much for highlighting the needs 
here today and we look forward to the outcomes of this event 
and to participating even after you have gone.
    Thank you very much for coming.
    Chairwoman Waters. Thank you very much, President Hughes. 
We are delighted to be here at Dillard and we thank you for 
your kindness and for hosting us today.
    Ladies and gentlemen, I would like to thank all of the 
Members of Congress who are here today. First, I would like to 
thank Ranking Member Biggert for being here today. Second, I 
would like to thank Representative Green, who is with us today, 
as well as Representatives Neugebauer and Sires. They have all 
taken time from their busy schedules and changed their plans in 
order to be here. Also, Representative Jefferson is here; of 
course, we are in his district and hometown, so we certainly 
cannot forget that name. And finally, Representative Cleaver 
just joined us, having had to make a lot of changes in his 
schedule to be here. We are delighted that they are all here.
    I am now going to call on Governor Blanco. We thank you for 
coming today. We know that you have a busy schedule and we 
would like you to share with us in any way that you see fit 
your observations, your directions, and your advice about what 
is happening here, particularly with housing. This is the 
Subcommittee on Housing and Community Opportunity and that is 
what we will be focused on. So welcome, Governor Blanco.

STATEMENT OF THE HONORABLE KATHLEEN BABINEAUX BLANCO, GOVERNOR, 
                       STATE OF LOUISIANA

    Governor Blanco. Thank you. Thank you, Chairwoman Waters, 
and distinguished Members of Congress. We are very pleased that 
you have taken this opportunity and taken the time out of your 
busy lives to join us here at this renowned and respected 
Dillard University, here in the City of New Orleans.
    The immediate recovery of the Gulf Coast region depends on 
solutions to affordable housing and there is definitely a 
crisis in trying to bring back housing, affordable and 
otherwise. So I want to thank you for providing a forum to help 
identify steps that we can all take to expedite this recovery.
    I traveled to Washington, D.C., earlier this month and I 
presented a Hurricanes Katrina and Rita Recovery Agenda to many 
Members of the new Congress. And although it was an unusually 
cold week in Washington, I received a warm welcome in the halls 
of Congress, so I thank you for that. Your hearing here today 
is definitely proof that the 110th Congress is committed to our 
recovery.
    Today, you are going to hear from a number of experts who 
are well-versed in the details that you may want to talk about. 
They will be well-versed in the program specifics. An example 
of someone who will testify before you is Mr. Walter Leger; he 
is a member of the Louisiana Recovery Authority.
    So my goal with you today is to provide an overview of the 
State's actions to expedite the Road Home Program, to discuss 
our rental program and public housing, and to recommend Federal 
actions.
    Members of this committee are well aware that the full 
funding needed to run Louisiana's Housing Program was delayed 
some 6 months after Mississippi. But we are not here to debate, 
you know, all of the things that went on in the past. For the 
first 10 months after the storms, I fought alongside 
Congressman Jefferson here to secure adequate funding needed to 
put together a housing program, an equitable relief package 
that we are presenting to the citizens. So I want to thank you 
and I wand to thank the members of this committee who voted on 
securing that funding for us. We are extremely grateful for 
your actions.
    The Road Home Program offers homeowners up to $150,000 to 
repair, rebuild, or sell their homes. With over 200,000 homes 
and rental units destroyed in Louisiana, this is the largest 
housing program the Nation has ever seen, so the challenge is 
enormous. Did the fact that we did not receive our Federal 
housing money until almost a year after the hurricane delay our 
progress? Well, I would have to be honest and say of course, it 
did. But nonetheless, our focus has to be on solutions that we 
can do now, and that we need to be able to move forward.
    The Road Home Program has received over 109,000 
applications; more than 78,000 families have received their 
appointments; nearly 38,000 families know the amount of their 
award as of today; and over 17,000 families have selected their 
awards; but as of today, only 782 closings have been held, and 
this is unacceptable.
    It is maddening. I am on the phone every day pushing for 
solutions. When we have met obstacles at the State level, we 
have broken through them.
    For example, when mobile home owners were excluded, we 
found a way within Federal regulations to include them. When 
senior citizens were being penalized for moving away, we 
removed the penalty. When FEMA and insurance companies refused 
to release federally-required data, I intervened, and when 
appraisals for homes were grossly under-valued, I forced a 
change. Too many homeowners disagreed with the pre-storm value 
of their home. Our contractor was relying on an industry-
accepted standard called an automated valuation method. This 
does not work in the City of New Orleans. This is a flawed 
methodology because our neighborhoods here are unique. It is 
not unusual to find a home worth $75,000 sitting next to a far, 
far more expensive home, in the hundreds of thousands. At my 
insistence, the contractor is now relying on trusted local 
appraisers and new Federal data to make sure that homeowners 
are treated fairly. As more people are comfortable with their 
pre-storm values, I believe that people will select their award 
options.
    In order to break through the closings bottleneck, I asked 
the contractor to ramp up the resolution team at the back end 
of the process. We believe they did not have enough people 
hired to do this volume of work. I have asked the clerks of 
court and the recorders of mortgages to extend their hours to 
do title work. We have also implemented a procedure to avoid 
the necessity of opening secessions on property that would have 
caused significant delays.
    This brings us to today. The company promises us that by 
the end of this month, we will see a rapid increase. I will be 
satisfied when I see the results and I am expecting some 
positive results. I hope they can perform.
    In addition to the homeowner program, we are leveraging 
Federal housing funds to restore affordable rental housing. 
Walter Leger will discuss this program in detail. I do want you 
to know that we have thousands of applications ready to move 
forward pending approval of a HUD waiver declaring this to be 
an incentive program. I discussed this waiver just yesterday 
with Secretary Jackson.
    Forgivable loans will be provided to landlords who own a 
small number of rental units if they keep the rentals at HUD-
approved rates. We are leveraging Federal housing dollars with 
Federal tax credits to help developers build mixed-income 
communities. Our long-term goal is not to bring back 
substandard public housing, but to transition these units to 
mixed-income housing.
    However, as a temporary, interim measure, I have asked HUD 
and the Congress to bring back readily rehabilitated public 
housing units. Let us rehab as many as possible to allow 
immediate occupancy while we are proceeding with the long-term 
redevelopment plan. We must repatriate our citizens and this 
means affordable housing now, as quickly as we can do it.
    In closing, there are several steps the Federal Government 
can take to speed up our housing recovery.
    First, get rid of the red tape. Chairwoman Waters, thank 
you, and Chairman Frank, for agreeing to work with us to remove 
the obstacles holding up our hazard mitigation funding. Just 
this week, FEMA again claimed legal impediments to freeing up 
this $1.2 billion intended for the Road Home Program. The White 
House required Louisiana to use hazard mitigation funding as a 
part of our Road Home Program. Red tape is keeping us from 
being able to reach it. Please allow a FEMA waiver or a 
transfer of these funds to HUD dollars.
    Second, exempt the Road Home awards from Federal tax 
penalties so homeowners can use the grants as they are 
intended, to rebuild. We do not want our people taxed on this 
money.
    Third, extend the placed-in-service deadline for the Go-
Zone tax credits. This will facilitate the development of 
affordable rental housing.
    Finally, I would like to thank Majority Whip Jim Clyburn 
for the legislation he introduced to authorize 100 percent 
Federal cost share. This will cut through the paperwork and 
financial setbacks slowing down our recovery.
    I know you are also working to reform the Stafford Act, and 
I thank you for that. And I also know that you are looking at 
potential Federal insurance solutions, because the insurance 
crisis will be the second crisis after the storm, if we do not 
have something sensible.
    This is just the beginning agenda of housing-related items 
that we deal with.
    I want to thank you for your assistance and I look forward 
to working with you to rebuild housing along the Gulf Coast. It 
is an investment that will more than pay off for this country. 
And we thank you for the fact that you are here, the fact that 
you care enough, and the fact that you are willing to work with 
us to try to make sense out of a situation that makes no sense 
to any of the citizens here experiencing it. Thank you so much.
    Chairwoman Waters. Thank you very much, Governor Blanco. 
Thank you. We are not going to keep you. We know that you have 
a very busy schedule and you advised us of that prior to 
coming.
    I would simply like to ask you whether you have set some 
goals for your expectations for the Road Home Program? How many 
completions would you like to have by what time, what would you 
consider progress and success? And if you do not get it, would 
you be willing to try and back out of that contract and find 
another way by which to implement the program?
    Governor Blanco. Yes, we have goals. We expect by the end 
of this month, which is coming to an end very quickly, to see 
more than 2,300 completed applications, where people have their 
money. Next month, we expect 7,000 more, and in the ensuing 
months, we expect to see no less than 10,000 per month. That is 
what we are asking of the company. We have been told for months 
now that once it gets into the pipeline, it will be rushing 
through the pipeline. We want to see it rushing through the 
pipeline.
    If this cannot happen or does not happen, we are certainly 
going to take measures to put in a new operation.
    Chairwoman Waters. All right. Well, thank you very much, 
Governor Blanco. We appreciate you being here today, we look 
forward to working with you, and we, too, intend that the Road 
Home Program, which is Federal CDBG money, be spent in the way 
that we intended it to be spent. We would like to see that 
application process speeded up and we would like to see the 
applications completed. We are also concerned about the fact 
that even though the program could use up to $150,000 per 
applicant, it appears that the rules are such that nobody has 
received $150,000.
    We are going to talk in detail with the company that is 
responsible for the contract, and we would like for you also to 
keep a close eye on that, because we think that the program has 
been designed in such a way that it is so focused on trying to 
keep down fraud or reduce fraud, and that it is not allowing it 
to move as fast as it possibly can.
    I know, because you and I have talked about some other 
issues that you are paying attention to, that we are concerned 
about not only some of those things that you have mentioned 
that we will correct in the Federal Government, but also 
everything from the appraisals and how they are being done, to 
the fact that there are applications that are stuck because 
they cannot clear title. We think there are some creative ways 
to do that and so we are looking forward in a short period of 
time to you telling us whether or not these goals are being 
met, what you intend to do about it, and how we can straighten 
it all out.
    Governor Blanco. Thank you.
    Chairwoman Waters. Thank you very much.
    Governor Blanco. I appreciate it. Thank you so much.
    Chairwoman Waters. We would like to thank you very, very 
much, Governor, and we will stay in touch with you.
    Governor Blanco. I appreciate it. Thank you again for being 
here, and we appreciate your time.
    Chairwoman Waters. At this time, I would like to call the 
Mayor of the City of New Orleans, Mayor Nagin, and the 
president of the City Council, Mr. Thomas. Thank you for being 
here with us today.
    If I could get your attention. While the panel is being 
seated there, I will recognize myself for an opening statement 
and then I will recognize the other members for opening 
statements.
    First of all, again, we would like to thank President 
Hughes, and Dillard University, for their hospitality and for 
allowing us to be here today.
    As the chairwoman of the Subcommittee on Housing and 
Community Opportunity, I have the responsibility to provide 
leadership in the development of housing policy in America.
    The Gulf Coast was devastated by Hurricanes Katrina and 
Rita with a severe loss of homes, rental properties, and public 
housing. Thousands of Americans have been displaced and 17 
months later are living in trailers, sharing space with family 
members and friends and strangers, both in the Gulf Coast 
region and, still, in cities and towns all over America. There 
is indeed a housing crisis here in New Orleans and in the Gulf 
Coast.
    Whether it is public housing, rental housing, or homes that 
they own, people are desperate to return, to rebuild their 
lives. However, there is very little, if any, affordable 
housing to return to. Some public housing that had not been 
adequately maintained for years received additional damage. 
Also, we have been told that the infrastructure in the City is 
still inadequate to support all the housing that is needed. 
Homeowners who want to rebuild are being asked to do 
practically the impossible through the Road Home Program. Many 
homeowners have lost everything and have yet to receive a dime 
from the State of Louisiana for damaged or lost homes, although 
the funds for rebuilding their homes is being financed through 
Federal Community Development Block Grant Program funds that 
the Congress appropriated last year, $16.7 million in CDBG 
funds with $10.4 billion--I am sorry, $16.7 billion with CDBG 
funds with $10.4 billion to Louisiana. Unfortunately, much of 
the response of the Federal Government to the housing needs in 
the Gulf region can be best described as temporary.
    FEMA received the major portion of funds that were 
contained in two appropriations bills for the initial emergency 
response and repair, approximately $62.3 billion. And on June 
15, 2006, Congress gave FEMA an additional $6 billion. We now 
question whether FEMA was the correct agency to address housing 
issues related to this disaster.
    The House passed legislation last year which would have 
removed responsibility for housing from FEMA and transferred it 
to HUD. As you know, FEMA was providing rental assistance to 
700,000 households. Currently, 33,000 households are receiving 
rental assistance. So does HUD have the infrastructure to 
better serve the housing needs of these 33,000 households? FEMA 
just recently extended housing assistance to households 
displaced by Katrina through February 2008.
    Part of the housing crisis in the Gulf region is linked to 
the state of public housing. This is an area that we are going 
to pay an awful lot of attention to and so today, we made a 
tour in the City and I think I can remember all of the places 
we stopped. We were at Iberville, Lafitte, C.J. Peete, and St. 
Bernard. We went through the Desiree redevelopment and we were 
in the 9th and the Lower 9th, and we were particularly paying 
attention to public housing because there are a lot of things 
to be resolved. There is a lawsuit that has been filed against 
HUD. There are people who are living in Dallas and Houston and 
other places who want to come home.
    They are desperate to come home. Some of these residents 
have said to us, as they have traveled to Washington, D.C. to 
talk with us, that they had every expectation that the units 
would be rehabilitated and they would be returned to the units, 
only to find out that there is a proposal to dismantle all of 
these public housing units.
    And so, one of the things we must do in our work is to 
determine whether or not units should be rehabbed, whether or 
not they are habitable units, whether or not HUD has a 
responsibility because of the lease agreements to return people 
to the homes that they had a lease on, and we need to look at 
some of the HUD policies where there were units that were 
scheduled for development pre-Katrina that sat boarded up for 
years, or whether or not there should be wholesale 
dismantlement or whether or not there should be a moratorium or 
indeed whether or not there should be more planning between 
HUD, the City, and the residents to talk about the future of 
public housing.
    So these are some of the issues that we are concerned with. 
And you heard the testimony of the Governor and a general kind 
of statement that I shared with her about some of our concerns 
about the Road Home Program. We certainly intend to do 
everything that we can to straighten out that program so that 
implementation is faster and that people receive at least the 
subsidies that they deserve in order to get their homes started 
again, to start rebuilding, and to get back into some kind of 
regular form of life.
    With that, I thank you very much, and I am going to then go 
to our ranking member, the Honorable Judy Biggert.
    Mrs. Biggert. Thank you very much, Madam Chairwoman. I want 
to thank you for putting together this afternoon's hearing to 
focus on the housing needs of the Gulf Coast region. I would 
also like to thank you and HUD for arranging our visit to many 
of the devastated sites around the City so that we can better 
understand the task at hand and how we can best assist in this 
effort.
    I would like to also recognize and welcome today's 
witnesses; my colleagues from the House; local, State, and 
Federal officials; the President and administration of Dillard 
University; volunteers and businessmen and businesswomen; and, 
most importantly, the residents of this wonderful City. Thank 
you for being here today to testify, for showing us your 
neighborhoods and homes, for sharing with us your difficulties 
in rebuilding, and for revealing to us your hopes for the 
future of New Orleans.
    By all accounts, to call Katrina a hurricane is an 
understatement; it was the most destructive and costly natural 
disaster in United States history. It led to the evacuation of 
a major city and the surrounding areas and it destroyed housing 
and infrastructure on an unprecedented scale.
    During the 109th Congress--that was last year and the year 
before--the Financial Services Committee was at the forefront 
of the hurricane relief efforts with three hearings and four 
briefings, with approximately 80 witnesses participating. In 
the months following the disaster, the committee shepherded 
needed relief legislation to the House Floor, helping not only 
families in the immediate hurricane-ravaged areas, but also 
those who suffered in the aftermath due to flooding.
    The task of recovery and rebuilding in this area continues 
to be a monumental one. We are more than 18 months removed from 
Hurricane Katrina, yet the challenges seem unending. To many of 
those affected, the recovery has seemed slow and uneven. 
Rebuilding has been hindered by the severity of the damage, the 
need to limit future flooding damage, and the need to 
coordinate the recovery among many levels of government. There 
are still too many people who are without permanent housing, 
jobs, and infrastructure.
    How best to go about the reconstruction of the region and 
the problems facing communities, public housing authorities, 
renters, homeowners, and the mortgage and financial services 
industry are certainly all issues that must be addressed.
    One thing is certain; disasters will continue to happen. We 
need only to look at the devastating tornado that went through 
New Orleans recently and the recent storms in Florida as 
reminders.
    We, in Congress, need to learn from our mistakes in the 
Gulf Coast. We must ask the difficult questions about how the 
$110 billion has been spent in these localities. Should it have 
been spent in a more efficient way and cost-effective manner? 
What accountability should there be? What Federal organization 
should be in charge of the national government's response and 
what should be done about uninsured losses? These are difficult 
questions, but we must figure out how to get it right.
    As the new ranking minority member on the Financial 
Services Subcommittee on Housing, I certainly have an interest 
in this. Clearly, the availability of affordable housing is 
critical to the overall recovery after such a devastating 
storm. If there is no housing, there are no businesses; if 
there are no businesses, there are no jobs; and without jobs 
and businesses, residents will fail to return and provide the 
economic base that will spur the economy for the New Orleans 
metropolitan region.
    I hope that today's hearing will shed light on specific 
issues that Congress should consider in order to better plan 
for future disasters and how to improve the capability of all 
levels of government to respond to disasters effectively.
    Again, I thank the chairwoman for this important hearing 
and I yield back.
    Chairwoman Waters. Thank you, very much.
    Members, without objection, I would like to call on the 
Representative from this district. He does not serve on this 
committee, but we certainly want to afford him the opportunity 
to address us and give us his advice and his thinking on this.
    I would like to recognize Mr. Jefferson for 5 minutes.

      STATEMENT OF THE HONORABLE WILLIAM J. JEFFERSON, A 
     REPRESENTATIVE IN CONGRESS FROM THE STATE OF LOUISIANA

    Mr. Jefferson. Thank you, Chairwoman Waters. I want to 
express how extraordinarily lucky I think we all are in this 
country to have at a time like this--when we need so much in 
our City, particularly in the housing area--Maxine Waters 
chairing this important committee at this critical time.
    I prevailed on her early after the elections in November 
to, among the first things she would do as she assumed her 
chairmanship of the Subcommittee on Housing, come to New 
Orleans this time, not to visit in a normal way as we have 
before. We have all brought many Members of Congress down here, 
we have traipsed around and looked at things and all of that 
was wonderful and good and necessary. But this is to be a 
different visit. This one is to come away with something and to 
get something done about the problem. We are tired of talking 
and looking and seeing. We want to have some bills passed in 
Congress that are going to bring relief to our folks and bring 
our people home.
    That is what this committee is committed to do under her 
leadership, and I want to thank all the members who have taken 
the time to come to our district, to our City. I want to 
welcome you all in the warmest way.
    I want to just state as a predicate two things. The first 
is that Dr. Hughes, thank you very much--before I say that--for 
hosting this event at this wonderful, historic university. 
Dillard is a wonderful part of our community and you give so 
much to us and we thank you. This is another example of what 
Dillard does for New Orleans and for the region.
    I want to say two predicate things. First of all, it is 
important for this committee to remember, and for the Congress 
to remember, that the flooding of the City of New Orleans was 
not the result of a natural disaster.
    It was the result of the failure of our Federal Government, 
particularly the Army Corps of Engineers, to do its job. And it 
was because of its negligence in designing, constructing, and 
maintaining our levees that our City drowned. So that gives the 
Federal Government a special responsibility. It is more than a 
response to a humanitarian disaster, it is a response to a 
Federal Government responsibility for not having done its job 
that, I think, brings us here. So that is an important thing to 
note.
    The second thing is this--the second thing is that while 
$110 billion is a lot of money, it is important to understand 
how the money has been allocated, first of all. And second of 
all, to what the current money has been applied. Of the $110 
billion, about $59 billion was allocated for Louisiana's 
purposes. Of that, $18 billion or so was spent in the early 
stages of rescue and maintaining people in different places and 
FEMA workers coming here and all the other things. $14 billion 
of it was spent to shore up the flood insurance program that 
was not adequately capitalized to meet the needs of people who 
had flood insurance. That leaves about $26 billion for 
everything else to be done--for the homeowners program, which 
is the $10 billion just mentioned earlier, and the rest of it 
for public infrastructure for the rebuilding of police and fire 
stations and all the rest of those things. And the City 
itself--that is for all of Louisiana. The City itself has 
assessed that it needs about $14 billion for its own 
infrastructure needs, so if the City just applied it to New 
Orleans, it would not be enough.
    But here is what I really want to make the point about. If 
the figure for Mississippi is right, Mississippi got $5 billion 
out of the $16 billion. If it is right, then Louisiana's figure 
is necessarily wrong, because Louisiana suffered 4 to 5 times 
the damage that Mississippi did and got twice the money.
    And so while I would agree with the committee observation 
on this, that the Road Home Program is not working right even 
with the money we have, it is important that we think about 
this in larger terms and somebody needs to figure out exactly 
what is needed to bring back this City as it should be brought 
back, because of what I said as a predicate--the Federal 
Government failed in its responsibility to keep us whole.
    So with that, I will let the others bring the details. I 
want to welcome our Mayor and the president of our City 
Council, and to thank them for appearing here. All of our local 
officials who are here, glad to see you here and thank you for 
the work you are doing to bring back our City. And for the 
people out here, most importantly who want to come back home, 
we are here to make sure that this can happen for you and 
happen for you soon. That is our responsibility and that is our 
job.
    Thank you, Madam Chairwoman.
    Chairwoman Waters. Thank you, Mr. Jefferson.
    We will now hear from the gentleman from Texas, Congressman 
Green.
    Mr. Green. Thank you, Madam Chairwoman, and I especially 
thank you for bringing this hearing to Louisiana. I have been 
here with you before and while you were not the chairwoman, I 
thought you were.
    And I want you to know, friends, that I am honored to be in 
New Orleans because I was born in New Orleans. I am a Charity 
baby, and now I represent the 9th Congressional District in 
Houston, Texas.
    This problem that we are facing, and it is a problem, it is 
a huge problem, is much larger than we have contemplated in 
some quarters, because we have approximately 20,000 persons in 
my district in Houston, Texas, many of whom still want to come 
home.
    And I want to do all that I can to make sure every person 
has an opportunity to come home. Whether you were born into 
riches, or whether you inherited a legacy of poverty, I think 
you should have the opportunity to come home.
    To do this, I am honored to be here with the chairwoman so 
that we can find out about the housing situation. We hear a lot 
of rumors, and we want to see for ourselves what the situation 
is. To do this, we have to hear not only from the persons who 
are going to be before us today, but we have also talked to 
people in the housing projects. And we have talked to people 
with ACORN, and we are going to talk to people who want to talk 
to us, so that we can get a clear vision of what is going on.
    Finally, let me say this, because time is of the essence 
and this is important--my desire is that we rebuild those 
levees, not to Category 3 standards, but to Category 5.
    I want businesses to feel comfortable here, but I want 
people who live here to feel equally as comfortable.
    My desire is that we work together--Federal, State, and 
municipality--to make sure that every dollar that we can get to 
the people will get to the people. We in this country had 
another catastrophe--9/11. It was horrible. And we did the 
right thing. We took care of a good many people and we gave 
cash to people. I want to make sure that we treat the people in 
New Orleans equally as well as we treated the people in New 
York.
    And I say this with love in my heart for the people who 
suffered and I believe that they were treated fairly and I want 
to do more for the people in New York, but I just want to make 
sure that the people in New Orleans are treated with the kind 
of compassion that they richly deserve.
    Madam Chairwoman, I thank you again for your dynamic 
leadership and I am honored to serve under you.
    For edification purposes, history has been made in 
Congress, and we need to talk about it sometimes, I think. This 
is the very first African-American to chair the Housing 
Subcommittee in the U.S. Congress. And I think that means 
something to people. It ought to mean something to you.
    Chairwoman Waters. Thank you, very much.
    Next, we will hear from a gentleman who paid a lot of 
attention this morning on the tour, and asked a lot of 
questions, the gentleman from Texas, Congressman Neugebauer.
    Mr. Neugebauer. Thank you, Chairwoman Waters, and thank all 
of you for being here. I think this speaks volumes of your 
interest in your community. Last evening, I arrived in New 
Orleans and I was in the cab, and you know, you can find out a 
lot about a city just talking to the cab drivers, right? I 
think he recognized my voice, maybe I talk a little bit 
different than he did, I do not know, but he said you must be 
from Texas. I said yes, I am. And he said well, I spent 3 weeks 
in Texas after Katrina, and I just want to thank you on behalf 
of my family. He said, I have three children and my wife and we 
were over in Texas. And I said you do not have to thank us, 
because that is what neighbors are for, right?
    This was a disaster in historic proportions and we hope it 
is the only one of this proportion that this Nation will have 
to endure. And America has responded with historic resources, 
over $100 billion has been put forward and authorized for this 
effort.
    New Orleans has a long history. In just a few years, you 
are going to celebrate your 300th birthday. This is a community 
that has evolved over almost 290 years and it has suffered a 
major blow. But looking out across this audience, I know it is 
not a blow that you cannot come back from, but it is going to 
take time. You did not get to be the great city that you are 
overnight, and as some have said, Rome was not built in a day 
and neither was New Orleans built in a day, and it is going to 
take time.
    But you know what? It is time to get started. And as we get 
started, we have to make sure that we have the best plan in 
place. And I know your leaders have been working on that 
planning process. We need to make sure that we have a plan that 
will succeed, because we do not want to go down a road of 
failure for the people of New Orleans. You deserve a plan that 
will succeed and we are hopeful that plan is evolving and will 
be in place.
    And the second piece of that is when you say we are going 
to get started, is now that we have a plan or we finish up our 
plan, we have to make sure that it is a plan that we execute in 
the appropriate way.
    The American people have responded in a large way, putting 
forward $100 million of their hard-earned tax dollars to make 
sure that New Orleans and the communities along the coast are 
able to rebuild and families restored. We owe them a 
stewardship to make sure that the plan is good, that the people 
are in place to make the plan work, and that the plan, in the 
long term makes sense, not only for you, but makes sense for 
the American people, because that is what makes America great. 
Because as some of us go, all of us go.
    I look forward to spending the next few days with your 
leadership listening. We have already had a wonderful tour of 
this City today. I have seen the devastation. This is my second 
trip back to the region and I look forward to hearing from the 
witnesses today to begin to enlighten this committee on what is 
the plan, how we intend to implement it, and what are some of 
the stumbling blocks that are in the way that are keeping us 
from getting started.
    And so thank you for being here, and thank you, Chairwoman 
Waters, for bringing this very important hearing to the City of 
New Orleans, and I look forward to our time here.
    Chairwoman Waters. Thank you, very much.
    Next, we will hear from the gentleman from Missouri, 
Representative Cleaver.
    Mr. Cleaver. Thank you, Madam Chairwoman.
    I do not have much of an opening statement, I would like to 
express appreciation to you for your leadership and your 
relentless push for the Federal Government to address the 
problems of what has been the greatest national disaster in the 
history of this republic.
    I would also like to say, Madam Chairwoman, that I am 
embarrassed that the United States of America, the world's only 
super power, has been woefully inept in dealing with this 
problem. And I feel as if the government has let people down.
    I want to thank my hometown corporation, Black & Beach, 
representatives, they have come down and volunteered to work 
here in New Orleans. After all is said and done, there has been 
more said than done, and so I have nothing else to say.
    Chairwoman Waters. Thank you, very much.
    And now we will hear from the gentleman from New Jersey, 
Representative Sires.
    Mr. Sires. Thank you, Madam Chairwoman. I just want to say 
thank you for inviting me and thank you for your leadership.
    This is my first time in New Orleans ever. My district lies 
in New Jersey, across from the World Trade Center, and I saw 
that devastation; I lived it. I saw the plume of smoke all 
those weeks burning. And as I rode around this morning, I could 
not believe the devastation here. I had seen it on television, 
but until you see it for yourself--and I am sure that you have 
lived it--all I can tell you is that I am here to learn, I am 
here to work with the chairperson and the other Members of 
Congress, I am here to get all the facts and whatever I can do 
to help you with this horrible situation that you have here in 
New Orleans, I am here to help you.
    So thank you very much for having me here.
    Chairwoman Waters. Thank you.
    Without objection, all members' opening statements will be 
made a part of the record.
    Before I call on the Honorable Mayor, I would just like 
thank ACORN for the work that they did in helping to build two 
new houses that we had an opportunity to share in the ceremony 
at this morning. The Members of Congress were asked to present 
the keys to the residents who will be occupying those homes. So 
I would like to thank you, ACORN, and all of the groups that 
work with ACORN. You give us hope, you give us inspiration. 
Thank you very much.
    There are some legislators in the room. I recognize one 
whom I have worked with for many years, Senator Bajoie. Senator 
Sheppard is also in the room, and Mr. Danatus King, the local 
president of the NAACP.
    Thank you very much. With that, the Chair will now 
recognize our first panel and start with the Mayor of the great 
City of New Orleans for a 5-minute statement.
    Mayor Nagin.

  STATEMENT OF THE HONORABLE C. RAY NAGIN, MAYOR, CITY OF NEW 
                       ORLEANS, LOUISIANA

    Mayor Nagin. I am C. Ray Nagin, Mayor of the City of New 
Orleans, one of America's most beloved and culturally 
distinctive cities, and a city which is facing the challenge of 
recovery and rebuilding after the worst disaster to occur in 
United States of America.
    Chairwoman Waters, thank you for your leadership on this 
particular issue. Distinguished members and guests of the 
Subcommittee on Housing and Community Opportunity, I want to 
personally thank you for coming to New Orleans.
    You know, there is lots of information that is out there, 
lots of news reports. It is probably 50 percent right. It is 
not until you come to this City and actually see and experience 
somewhat what we are going through on a day-to-day basis that 
you can surely understand this.
    I hear the audience. There is lots of frustration out there 
and it is understandable.
    [Audience reaction]
    Mayor Nagin. But I am going to--
    Chairwoman Waters. Quiet it down for a moment. Mr. Mayor, I 
am so enthused about being here and I know that you are too, 
but we can really make better use of our time if we just kind 
of hold it down and let's listen to the Mayor and our other 
witnesses. And I thank you very much.
    Mayor Nagin. Madam Chairwoman, I am going to shoot straight 
with you. You know me, I have always done that. I believe in 
the spirit of truth. It prevails all the time, so I am going to 
do what I normally do.
    Let me first thank the American people, because there are 
lots of people around the country who have helped us out 
tremendously.
    As I start my testimony, I am not going to go over all my 
notes, but I am just going to cover a couple of the highlights. 
Pre-Katrina, this City had a population of 455,000 people, we 
had $3 billion worth of construction activity, 215,000 housing 
units, and a viable and growing central business district. We 
were setting back-to-back records relating to tourism; we 
topped off at about 10.1 million tourists in 2004, and we had 
something going on that was unique in this country. We were 
creating Hollywood South where we had lots of multimillion 
dollar films being filmed in our City. The economic landscape 
of this City was definitely improving prior to Katrina. We saw 
thousands of people move off the poverty rolls and we were 
starting to see our business community really start to pick up 
prior to Katrina.
    Then Katrina hit. And like Congressman Jefferson said, we 
in New Orleans did not do anything other than we normally do. 
We just live and breathe and work and try and have a good time 
and raise our children in this City. Then, the levees broke. 
The levees broke and all hell followed it. And it is not 
necessarily what happened when the levees broke, it is what is 
happening or has happened after the levees broke that is the 
story.
    Your committee deals with housing. We have talked a lot 
about the Road Home and I am going to touch upon that in a 
minute. But you need to understand that in this City, 54 
percent of the people were renting. And right after Katrina 
happened, the rental stock went away for the most part, and 
when you have a supply and demand issue, where you do not have 
enough supply, demand goes up high, and prices follow it.
    So we are in a crisis at the moment. It is getting a little 
bit better but it is not much better than it was 16 to 17 
months ago. Everything was impacted after Katrina. Schools, 
hospitals, infrastructure. You name it, it was impacted. You 
need to understand the devastation as far as the amount of 
water that sat in our City for over a month. It represented 480 
billion pounds of water that totally devastated this City. 
Portions of our City literally collapsed under the weight of 
this water. Entire areas were pushed even further below sea 
level and hundreds of miles of underground utilities were 
damaged.
    We have patched it up. Every area of this City can get 
utilities, but it is with bubble gum and tape that that system 
is put together right now. We have not been able to see all the 
dollars that are promises via the Stafford Act to repair our 
public facilities.
    Let me move into what is the crux of this issue. Why, in 
America, would we be struggling 18 months later?
    You know, I have lived and breathed this 24 hours a day for 
the past 18 months and in my humble opinion, the slow pace and 
awkward bureaucratic regulations of how these Federal funds are 
flowing present a critical challenge to the recovery at the 
local level. All the dollars that you have been talking about, 
$110 billion, very little, almost none of it, has gotten to the 
local level, and that is the crux of the issue.
    If I had known in all my lobbying trips when I went to 
Washington, that I would have to sit here and borrow money to 
avoid bankruptcy in a great American city, I would have lobbied 
totally differently. But the money flows through the Federal 
system to the State system, and we are still waiting. And the 
money is not in New Orleans as we speak; it is a shame.
    Chairwoman Waters. Mr. Mayor, could you wrap up your 
testimony? We do have it in writing and it will be an official 
part of the record.
    Mayor Nagin. I will wrap it up, ma'am.
    Public housing, ladies and gentlemen. I have been very 
consistent in my position about public housing. I have gone in 
public housing units to inspect them after the event, I have 
talked and met with Secretary Jackson and his staff. I have 
been very consistent. Every citizen who was in public housing 
prior to Katrina deserves the right to move back into this City 
in a better unit than they had before.
    According to the Secretary and his staff, at least 60 
percent of the public housing residents want to come back to 
the City of New Orleans. That means we need about 3,000 units 
immediately. All right, they have delivered 1,000 or 1,200 
units and about another 1,000 Section 8 certificates. So we are 
short, and that is what is causing all the stress that you are 
hearing behind me today. We need to ensure that as we move 
forward, there is a phased redevelopment of public housing, 
that we upgrade all the units and whatever units are available 
to be repopulated are immediately put back on line.
    [The prepared statement of Mayor Nagin can be found on page 
149 of the appendix.]
    Chairwoman Waters. Thank you very much, Mr. Mayor.
    The Chair now recognizes Mr. Thomas, president of the City 
Council, for 5 minutes.

 STATEMENT OF THE HONORABLE OLIVER M. THOMAS, JR., PRESIDENT, 
              NEW ORLEANS, LOUISIANA CITY COUNCIL

    Mr. Thomas. First of all, let me thank President Hughes and 
the Dillard family. Let me also thank the person whom I call 
``Super Maxine'', you are doing what you have always done for 
years, and that is fighting for the oppressed or depressed, 
whether it is in your district in L.A., or anywhere around the 
country. Let me thank our Congressman Jefferson for helping 
host this much needed hearing. Also, let me thank the other 
members of this panel.
    You know, let me say that we appreciate the $110 billion 
that have been committed to this region. We appreciate that 
even though every expert around the world says we have a $200- 
to $300 billion problem--we appreciate that. We appreciate the 
$110 billion even though we provide 25 percent of the Nation 
with its oil and gas to the tune of trillions--we appreciate 
the $110 billion.
    We appreciate any and everything that people--we are the 
greatest survivors in the history of the world. In New Orleans, 
we are used to being messed over.
    And so we appreciate any and everything, we appreciate you, 
and we appreciate this committee. We thank you all for holding 
this hearing. I am going to hurry up and get through my remarks 
because my remarks are probably less important than the 
solutions that we are going to have to find.
    There is a housing crisis in New Orleans. This is beyond 
dispute. There is an affordable housing crisis in New Orleans; 
this, too, is beyond dispute. By best estimates of 
professionals and statistical analysts from all over the world, 
we had 188,000 units occupied before Katrina; 124,999 of those 
units had at least 2 feet of floodwater. By FEMA's own 
estimates, 54.91 percent of all housing units in New Orleans 
received 75 percent to 100 percent damage.
    But numbers tend to be meaningless, particularly when you 
have heard as many different versions as we have heard down 
here--and we have heard a lot. But let me say it the way we say 
it down here--if you did not lose your house, your mama 
probably lost hers. If your sister did not lose her house, then 
your brother probably lost his. And if you are a family 
struggling to get by, working poor by no fault of your own, the 
chances that you lived in the unaffected areas were remote, and 
the chances that your house is gone are almost implausibly 
high.
    There is a housing crisis in New Orleans and affordability 
is the key. If you would just think rationally about our 
situation--and that has been difficult for people all over, to 
think rationally, and we understand that--you would realize 
that every step that we have taken has been frustrated, the 
Mayor, the City Council, every step we have taken has been 
frustrated by the fact that we cannot bring our family members 
home, our friends back home. So you cannot separate us from 
everybody else. Some people may try, but we love our family 
members and we love our friends too.
    Businesses cannot hire employees who cannot afford an 
apartment. Schools cannot hire teachers who cannot find a 
house. And customers cannot shop in neighborhoods where no one 
can come home.
    We need affordable housing and we need it now. I am sure 
you are all aware of the Road Home Program, $7.5 billion 
designated to help homeowners repair their property. We heard 
the Governor, she is trying to step up and speed up that 
program. Well, if you do the math, less than 5.58 percent of 
the people have received assistance now. Less than three-
quarters of one percent of applicants have received funds to 
rebuild their homes. And that just covers homeowners, not 
renters. Some of us wonder if we would have been better off 
waiting on the Second Coming. But what we have is what we have.
    In fairness, the Road Home Program has recently launched 
their rental assistance program which is designed to help 
rental property owners and their properties and bring them back 
into commerce. If it works, it will help. I am an optimist by 
nature, so I am always hopeful. But I am a politician by 
profession and so right now I am skeptical about everything.
    My final point, and I promise to be brief, is that we have 
thousands of units of public housing that are lying dormant. 
Some are damaged but some can be repaired. We have already 
received an agreement from HUD for rolling reconstruction 
rather than mass tear-downs that were initially proposed.
    And let me say there is another thing that HUD can do. We 
have qualified, competent professionals who live and work in 
this City. They do not have to keep bringing in these 
multimillion dollar professions from outside the City to keep 
telling competent professionals how incompetent we are when 
they have been doing a good job for years.
    Every step we make is a step in the right direction. Every 
effort to help is such a step. But now, having labeled all of 
the problems, hopefully we can work toward a solution and a 
common goal where we can bring all of New Orleans back.
    And Madam Chairwoman, as I close, let me use this song that 
is the Women's Anthem right now, to tell you how we feel. We 
feel like the guy in the Beyonce song, ``To the left, to the 
left.''
    All of our stuff is in a little box to the left. All that 
other stuff in the closet, all those oil and gas reserves, all 
of those trillions of dollars of taxpayer dollars we have 
donated over the years--I am a little boy who lived in a 
shelter after Hurricane Betsy, whose family lost everything. 
But we still, ``to the left, to the left.'' And then to cap it 
off, even when we get frustrated, you can keep talking that 
stuff, that's fine, but they tell us keep walking and talking 
at the same time.
    We ain't walking no more. It is time for everybody to stand 
up and listen to us. We do not want to be, ``to the left, to 
the left'' or ``to the right to the right'', we want to be in 
the middle, in the middle.
    Chairwoman Waters. All right, okay.
    Thank you. If you will allow us now to raise some questions 
of our witnesses. I will recognize myself for 5 minutes, and 
let me start with the Mayor, if I may.
    Thank you again, Mr. Mayor, for being here and for sharing 
with us your honest opinion and your thoughts about everything.
    Obviously, the Road Home Program is a problem, and I do not 
think that you have any oversight or authority in dealing with 
this program, that the CDBG money did not come to the City.
    Mayor Nagin. Right.
    Chairwoman Waters. It ended up in the State, and I suppose 
it was organized out of the Governor's Office.
    Mayor Nagin. Yes.
    Chairwoman Waters. And now having said that, and having 
watched the program at work, or not at work, what specific 
recommendations do you have to make it a more viable program? 
What would you do, based on your observations, that would move 
this program?
    Mayor Nagin. Thank you, Madam Chairwoman.
    You know, back in February, after the event happened, I got 
all of the parish presidents together and we made a 
presentation to the State about a program that is similar to 
Road Home.
    To cut it short, there are a couple of things I need to--
the Road Home Program in its current format will not work. I do 
not care what they do with that program right now, it is 
overwhelmed, undermanned, and technically flawed.
    It is technically flawed because they are starting with 
pre-Katrina values and that has nothing to do with today's 
environment. They should start with replacement cost and then 
process from that point. That is the first problem.
    The second problem is they tried to start a big 
organization from scratch with this company called ICF. You 
just cannot do it, Madam Chairwoman.
    We recommended back February last year for them to use the 
financial institutions in the community to process these loans.
    I have taken $11 million of the City's money and we really 
probably should have used, or could have used it in other ways, 
we leveraged it 5 times and we put together what we call a Fast 
Track Program. We have launched that, it has been in existence 
now about 3 weeks and we have already--we are pretty close to 
capacity on it.
    Chairwoman Waters. What does the Fast Track Program do?
    Mayor Nagin. It is a loan program, it is a no-interest loan 
program that is designed to give people money, up to $50,000, 
in anticipation of the Road Home grant. So if you are waiting 
for it, this is front money.
    Chairwoman Waters. Well, excuse me, because I understand 
that in the Road Home Program, they deduct everything that 
someone has received, including insurance money, money from 
SBA.
    Mayor Nagin. They do.
    Chairwoman Waters. Now does that mean that they are going 
to deduct the loan money from the Fast Track Program when 
they--
    Mayor Nagin. Yes, they will. This is designed to get people 
money who are waiting on their Road Home check. And then once 
they get their check, they are required to reimburse the fund 
so we can replenish it. We can only help 1,000 families at a 
time. So that is a program we have.
    But the other solution that I would suggest to you, is let 
us carve New Orleans out. Let us take New Orleans, all the 
people who have registered for the Road Home Program, whichever 
status phase they are in, and let us administer the program 
with the banking institutions and let us change the formula to 
start with replacement value. And I think we can get it done 
for you pretty quickly.
    Chairwoman Waters. Thank you very much.
    Honorable Oliver Thomas, you mentioned that you support 
residents being able to return to public housing that has been 
rehabilitated so that they can get back home. And you sand that 
HUD had talked with you about some kind of phased 
redevelopment.
    Mr. Thomas. Yes.
    Chairwoman Waters. What I understand, having talked with 
many of the residents and some of the activists around the 
country is that people are fearful of dismantling public 
housing for several reasons. One is that many people think they 
will never get back in and they point to the Desiree project 
that took 10 years to get started and many people did not get 
back in. Also, they say that once you do the redevelopment, 
most of the configurations are such that you will never replace 
the number of units for public housing in these mixed use 
developments.
    That, as with the Hope VI Project with mixed use, you have 
homeownership, you have market rates, and you have two-thirds 
less in public housing, and they are afraid of that.
    And then the other thing that they say is that in New 
Orleans, there was a tremendous waiting list for housing, even 
though there was boarded-up housing.
    Have you heard these kinds of complaints?
    Mr. Thomas. Yes, I have. But Madam Congresswoman, I think 
one of the answers--potentially one of the solutions to that is 
you place people while you are doing redevelopment or while you 
are working on new plans to make them better. You know, people 
have experienced that while they are waiting on a new unit, 
they do not get a unit. But if people are placed and people are 
in affordable housing while they are waiting on improved 
housing, then that is a solution to that. Not to have them wait 
while you say I promise you a unit, but to give them a unit 
while we are improving all of the housing stock in the City of 
New Orleans.
    Chairwoman Waters. So you are talking about one-for-one 
replacement.
    Mr. Thomas. Absolutely.
    Chairwoman Waters. Okay.
    Mr. Thomas. Look, if we have an opportunity--and I wrote 
these down because, you know, we all come from different 
planets on this issue. Why can we not have better housing in 
New Orleans? Why can we not have better public housing in New 
Orleans? Why can we not have training? Why can we not have day 
care? Why can we not have more homeownership? Why can we not 
have more homeownership programs? Why can we not, even after 
Katrina, we hope for and pray for a better place than we had 
before? Why can we not?
    Chairwoman Waters. Was the City involved in the HUD plans 
for redevelopment?
    Mr. Thomas. I called a special hearing, the day after HUD 
released their plan on national television, I called a special 
hearing to bring them before Mr. Davis and his group before the 
City Council when they announced mass demolition, and said that 
was not going to happen.
    Chairwoman Waters. Okay.
    Mr. Thomas. I also called for a commission on public 
housing.
    Chairwoman Waters. Okay, all right.
    Thank you very much. And now I will turn to Congresswoman 
Biggert.
    Mrs. Biggert. Thank you, very much.
    Mayor Nagin, it sounds to me like you are not a big fan of 
bureaucracy, from your testimony.
    Mayor Nagin. Right.
    Mrs. Biggert. And I am not a big fan of it either. Could 
you tell us, is it the bureaucracy of the Federal Government or 
the State government that seems to be standing in the way of 
New Orleans' plan for rebuilding? Could you give me some 
specifics?
    Mayor Nagin. Yes. I think it is two-fold. It is two 
bureaucracies that are clashing right now. And as soon as we 
get the money or approvals from the Federal level, we have to 
go through pre-audits and post-audits before the money starts 
to flow from the State.
    In addition to that, we have a local law that basically 
says until we have the money in the bank, we cannot let the 
contract. And based upon the Stafford Act, everything that we 
do for infrastructure redevelopment is a reimbursement program. 
And we basically do not have the funds in the bank to start the 
process.
    Mrs. Biggert. When you are working out your plans and 
working with HUD and working with the State government, do you 
all sit down and discuss this? Or is this just kind of a--
    Mayor Nagin. I have sat in so many meetings, Congresswoman, 
you know, you name it, we have done it. We make a little 
progress and then we go backwards. It is really a two step 
dance.
    To me, the solution is to try and get as many dollars as 
close to the people as possible. You know, I have been in 
office now a little over 4\1/2\ years. I have had no major 
scandals, no scandals at all. We know how to handle the money, 
we can stretch it, and we can do a good job and get our 
citizens back and prove to the Nation that we can do this.
    Mr. Thomas. Congresswoman, that is a good question. Let me 
say as someone who has dealt with Dr. Pajorno and Hyasse and 
others from around the world in trying to study disaster and 
recovery, there is a fundamental difference in how we deal with 
disaster in America.
    If you look at other countries, their central government, 
which is their Federal Government, their prefects, their State 
governments, and their local governments, there is no 
separation. In those other countries that have emerged from 
disasters, they do not say okay, we are the federal government, 
you are the State government, you are the local government, and 
here, we are going to give you this, you do this. All three of 
those heads stay in the same room and hold the same hands until 
you go from disaster to recovery.
    So the amount of separation that we have had here--and you 
say, okay, I am going to send you all this amount of money, but 
the expertise in many cases and the manpower and the additional 
resources that are needed are not accompanied the way they are 
in other countries that deal with disaster and recovery in a 
different way. So you are absolutely correct, the process has 
to be different.
    And then some of think and believe that what happens with a 
natural disaster is much different than what happens with a 
terrorist disaster. They are both unfortunate, but a lot of the 
policies and requirements how you would deal with and react to 
each are different. The U.N. has specific solutions, where 
other countries have offered expertise and helped where they 
deal with from around the world. So the principles about 
recovery and about dealing with disaster are there, we just 
choose to deal with it differently here in the United States.
    Mrs. Biggert. Thank you.
    Just one other question. We had a continuing resolution to 
continue the government this year because we did not pass all 
of our appropriation bills last year.
    Mayor Nagin. Yes.
    Mrs. Biggert. And there was a change in the formula for the 
Section 8 housing. Have you heard anything about that? I know 
that--I am from Illinois, right outside of Chicago, and in the 
suburban Illinois counties there was a definite loss of Section 
8 housing money. And from what I have heard, this is also true 
of this area, New Orleans. I know there has been a loss in New 
York and a loss in Los Angeles.
    Mayor Nagin. Well, we know that there is a change coming, 
we just do not have the specifics, not only to the Section 8 
funding but also to the Community Block Development Grant 
money, the annual allocations that we get that we use for a 
whole host of different sources. That is being cut, and has 
been cut; every year I have been in office, that money has been 
dwindling.
    Mrs. Biggert. Okay. I think that according to my numbers, 
estimates that St. Bernard Parish will lose $1.3 million, 
Jefferson Parish public housing will lose $12 million, and New 
Orleans will lose $70 million in funding.
    Mayor Nagin. Those numbers are something that we are 
watching very closely. But yet and still, we will spend $75,000 
on a FEMA trailer.
    Mr. Thomas. Congresswoman, you hit on something that is 
extremely important and I think is within the realm of Congress 
to deal with.
    All cities qualify for Federal funding in certain areas, 
period, based on your population, your demographics, and your 
income statistics. So in many cases, to assist us, you do not 
have to have Road Home, Road to Rome or Road to the Moon. To 
assist us, all they would have to do is increase our allocation 
based on our recovery for this period of time. Even if you 
would take a look at future allocations, which sometimes cities 
apply for future allocations based on their need right now. So 
there are several areas that you do not have to have a special 
appropriation. If you know there is a need, increase our 
allocation right now, this year, and next year and then deal 
with us in the future when we go back under the formula that 
all cities qualify for. That information is already there.
    Chairwoman Waters. It would be great if Congress worked 
that way, it really would be. But it does not. However, I would 
like staff to make a note to review the formula.
    Mrs. Biggert. I am concerned and I think we would all be 
committed to work to make sure that--
    Chairwoman Waters. Well, not only that, I mean when we 
reconcile the continuing resolution, if there is something that 
we can do to make up, we should do that. So I will focus on it 
and you will and we will see what we can do.
    Mrs. Biggert. Yes.
    Chairwoman Waters. With that, let me go to the gentleman 
from Louisiana, Mr. Jefferson.
    Mr. Jefferson. Thank you, Madam Chairwoman.
    Mr. Mayor, I talk to you and Mr. Thomas all the time and 
other folks on the panel cannot do that, so I do want to take 
advantage of their time here. I just want to ask you about one 
thing.
    You have borrowed a lot of money, the City has, to fill in 
the gaps here. How much money is that, that the City has 
borrowed so far?
    Mayor Nagin. The total, by the end of this year, we will be 
at $240 million in community disaster loans, and we have before 
Wall Street now another $150 million instrument--
    Mr. Jefferson. How much of your tax base is back in 
position?
    Mayor Nagin. How much what?
    Mr. Jefferson. Tax base do you have now, 25 percent, 30 
percent of what you had pre-Katrina?
    Mayor Nagin. Probably about 65 to 70 percent. We are very 
tight; we barely avoided bankruptcy a couple of months ago.
    Mr. Jefferson. So if the Congress was to go back and 
forgive these loans, this would be a tremendous help to this 
City and to this region?
    Mayor Nagin. It would be a tremendous, tremendous help.
    Mr. Jefferson. The community disaster loan is part of it. 
Some of it came from private banks as well.
    Mayor Nagin. Yes. The Congressional history has been that 
after a disaster, communities that need these dollars would get 
them, but it would be forgiven. But just for us, we are 
special, so there is no forgiveness clause in the current 
legislation.
    Mr. Jefferson. Thank you, Mr. Mayor.
    Our job is to get back to Chairwoman Maxine Waters and get 
these loans forgiven for the City. We already have it in the 
works. We hope by Easter, we will have a bill out of the 
Congress, out of the House at least, to make sure that this 
problem goes away.
    Now the last thing is, did you say, with the money you have 
gotten that you put together for advancing homeowners up to 
$50,000, you have all your money out already?
    Mayor Nagin. We do not have it out, but we have enough 
people that have applied for the loans that we are going to 
probably over-subscribe pretty soon.
    Mr. Jefferson. And the last thing is, you emphasized local 
recovery, the local responsibility for recovery. If the 
Congress went back up there and changed the Stafford Act such 
that it does not always require everything to go to the State, 
if we could take some formula and say, if it is 60 percent of 
such and such damages, it could get control of getting itself 
fixed up and we then give money to Jefferson Parish, 
Plaquemines Parish, St. Bernard Parish, and Orleans Parish and 
let them get at their own recovery, would that be a help to 
this area?
    Mayor Nagin. I think that would be an absolute home run for 
every community. I think the State is doing the best they can, 
but they were a bit overwhelmed by this disaster also.
    Mr. Jefferson. I am going to pass it.
    Chairwoman Waters. Thank you, very much.
    Now I turn to the gentleman from Texas, Mr. Neugebauer.
    Mr. Neugebauer. Thank you, Madam Chairwoman.
    Mayor, the housing issue is one of the primary reasons that 
I came down, although I am very interested in the economic 
development piece of it. I have been in the land development 
business, I have built homes, and I have been on the city 
council, so I have dealt with a lot of these issues.
    One of the things that was kind of interesting to me though 
today was we were in a project, one of the housing projects 
here and they have 90 units that are vacant that are ready for 
somebody to move into, but they do not have anybody moving into 
them. So while I know there are a lot of people who want to 
come back to New Orleans--but what we do know about economic 
development and how communities are built, they are built with, 
you know, two or three ingredients, but infrastructure is one 
of those. You have to have an infrastructure to support people 
to be there, but jobs is the primary reason that people come to 
communities. Opportunity is the reason people come to America, 
they come to America for opportunity.
    I think that one of the things that I want to hear from you 
and the President of the Council is should we be focusing 
equally as much on growing back this economy, because you were 
talking about a very vibrant economy pre-Katrina. I think we 
can keep up with the housing demand, I think there are things 
in place now--we need to get some of the bureaucracy things out 
of the way, but I think--I hear people saying we can deliver 
the housing, we have housing under construction, but I do not 
see this pent up demand that everybody is talking about, that 
people are standing in line for houses when we have 90 
vacancies in one project.
    Mayor Nagin. Congressman, I think what you are--New Orleans 
is an interesting City, and it is a City where people are 
comfortable with their neighborhoods. So when you hear that 
there are vacant units, they are being offered in a 
neighborhood that the residents are not comfortable in, and 
have never lived in. So therefore, they are somewhat skeptical 
about going there and being stuck there for the rest of their 
lives. And one of the things--wait a minute.
    Chairwoman Waters. Excuse me one moment. This is very, very 
important. And if in fact--just a moment--if the members are to 
learn, we must hear what is being said. This is very important. 
Please continue, Mr. Mayor.
    Mayor Nagin. I am relaying to you what I have had 
discussions with many public housing residents, okay? They want 
to come back to the City, but their first choice is to come 
back into an area they are familiar with. And if there are 
units that are available, that is the only logical conclusion 
that I could come up with, other than HUD may not be 
communicating to the residents that these are available.
    Mr. Thomas. Congressman, that is why I called for a 
commission of public housing almost a year ago. I think it is a 
perfect opportunity to get residents with developers, with 
activists, with housing experts, with HUD, with HANO, and with 
everybody in the same room at the same time to talk about the 
future of public housing. Because you get one story one place, 
and you get another story another place. And I think hopefully 
one of the things that will come out of this is a commission on 
public housing so that we can strategically analyze its 
condition right now and get everybody together in the same room 
to work it out right now. I think if we had done that some time 
ago, a lot of those units would be filled already.
    Mr. Neugebauer. And you were reading my mind because--
    Mr. Thomas. I have been a mind reader; we have to be mind 
readers down here.
    Mr. Neugebauer. I hear you. I think, as I was looking and 
touring so far, and obviously we are going to be doing some 
more, but one of the things that I think is a tremendous 
opportunity for New Orleans is you have a chance to start over 
and correct some things that maybe were not right. And some of 
these huge concentrations do not make sense any more. I think 
one of the things we have to be very careful about here is 
going back and creating environments that people are, as the 
Mayor said, reluctant to come back to.
    So I think what we want to do is do bring the private 
sector, do bring everybody to the table and talk about ways to 
create a legacy of opportunity and not necessarily repeating 
things just because we were comfortable with that. Because in 
many ways some of those were not positive things, but in some 
ways some of them were. Well, let us take the best part of it, 
but let us also use the opportunity. And I think the Mayor in 
his opening statement talked about--or maybe it was the 
president--about having better housing than we had pre-Katrina. 
And I think there is an opportunity for people to have, the 
residents of New Orleans, to have better housing post-Katrina 
but I think it is going to take all the factions working 
together. And so I think your idea--and I hope you will follow 
up with that--of bringing all of those folks to the table and 
keeping that dialogue open.
    Chairwoman Waters. Will the gentleman yield?
    Mr. Neugebauer. Yes, please. Thank you.
    Chairwoman Waters. Mr. Mayor, is it true that you need 
housing for workers, city workers, to do a lot of the jobs that 
are going to be needed to be complete projects, and that you 
would entertain some type of lease arrangement with public 
housing for maybe 500,000, 600,000, or 700,000 units to put 
workers in; is that true?
    Mayor Nagin. We have a need for housing, period, among all 
of our city workers, and absolutely we would entertain a lease 
with HUD or anybody else to put permanent housing--for example, 
Madam Chairwoman, we have police officers, we have clerical 
people who are living in FEMA trailers or doubling up with 
their families and they need housing. And we have these stocks 
that are available. Some of it can be restored pretty quickly 
and we would definitely be interested in that.
    Chairwoman Waters. Thank you. I yield back to the gentleman 
from Texas.
    Mr. Neugebauer. Thank you. Well, those were my comments and 
questions, and I thank the gentlewoman.
    Chairwoman Waters. Thank you, very much.
    The gentleman from Texas, Mr. Green.
    Mr. Green. Thank you, Madam Chairwoman. And I neglected to 
thank the ranking member and the minority members for being 
here with us. It means a lot to me that you came, thank you 
very much.
    Mr. Mayor, I know that for some time you were trying to get 
a list of the survivors and you wanted that list to include 
addresses, contact information. Were you able to secure the 
list? You came to Houston a number of times and you had to 
literally hold meetings in places and beg that people would 
come to you. Did you ever get a list of the survivors and their 
locations?
    Mayor Nagin. We have never gotten a list of people. Every 
time we have asked for it, it is some privacy law or something 
that holds back us getting that information.
    Mr. Green. For my edification, because I would like to try 
to do what I can to help you with this, tell us how you would 
benefit, how the City would benefit from having the list, so 
that I can have that for edification purposes when I present it 
to other persons.
    Mayor Nagin. Well, a list like that would allow us to 
communicate a little more directly with our citizens. Right 
now, we have some recovery centers that are in Houston and 
other cities that allow our residents to come in and find out 
information about what is going on and how they can get back. 
But most of these cities are spread out and out citizens do not 
really understand how to get to these particular centers. So a 
list would allow us to do direct mail, to target our radio and 
television or whatever advertising we have, to make sure that 
our citizens understand what is going on in New Orleans, how to 
get back, what assistance we can provide, and what job 
opportunities are available.
    Mr. Green. More specifically, would it allow you to target 
them with reference to housing information? There are many 
persons who are looking to come back and they are disconnected 
from the people who can tell them how to get back, it seems. 
Would that help?
    Mayor Nagin. Yes. It would help tremendously. We are 
working with a number of apartment complex owners, I think 
there are 12,000 units that are coming online, but as those 
units come online, it is very difficult for us to get that 
information effectively out to the people who need the housing.
    Mr. Green. This is a good segue into the notion that we 
need an independent commission to find all of the people and to 
do a survey, if you will, so as to ascertain the number of 
persons who truly want to return, where they are, and whether 
they have decided that they are going to stay on. Because we 
continue to have guesstimates as to what their desires are.
    Mayor Nagin. Yes.
    Mr. Green. Would an independent commission established just 
to find out where they are, would that be of benefit to you?
    Mayor Nagin. That would be a tremendous benefit to us. We 
have been going through a little duel, if you will, as far as 
how many people are actually back and how many are not back. 
The State has a number, we have a number, and there are 
probably two or three others out there. So an independent 
commission to really assess who is back, and the people who are 
not back, where are they, would be tremendously helpful.
    Mr. Green. And there is a lawsuit that is pending right now 
concerning the housing, public housing.
    Mayor Nagin. Yes.
    Mr. Green. Give me your impression as to how this can be 
best settled with the parties? What would your recommendation 
be if you had an opportunity to have input into that settlement 
negotiation?
    Mayor Nagin. The settlement, in my opinion, hinges upon how 
quickly we can get the units or affordable housing in the 
community, to satisfy the residents who want to come back. We 
still are about 1,000 units short as far as what I can 
determine, based upon the surveys that we have looked at, as 
far as how many people want to come back, as far as families, 
and how many units are actually available.
    Mr. Green. And finally, the elections were quite a 
challenge for persons who were running for office here in 
Louisiana.
    Mayor Nagin. Yes.
    Mr. Green. You did have to campaign at least in one other 
city that I am aware of and my suspicion is that you went to 
more than Houston, Texas--
    Mayor Nagin. Yes.
    Mr. Green. --to try to locate people.
    Mayor Nagin. Yes.
    Mr. Green. In these circumstances wherein we have these 
disasters that are just of mammoth proportions, would it be 
beneficial to have some sort of emergency means by which 
persons can vote away from the city, out of the State, as we 
have seen in other countries, Iraq, for example, where people 
could vote in various places around the world.
    If you would, give us some testimony as to how that might 
be helpful under these circumstances.
    Mayor Nagin. Congressman, you know that question could take 
us a whole number of different directions, but I will tell you 
this, this past election was made harder than it should have 
been for an election in the United States. Our citizens had to 
come back to the State to vote or either to the City to vote. 
And where we allow Mexican-Americans or people from Mexico, we 
allow Iraqis, we allow soldiers, to vote where they are. but 
that was not--that did not happen in the City of New Orleans. 
So I would encourage Congress strongly to pass some legislation 
that in the event of a disaster, that process be allowed, where 
a voter, if they are registered in the disaster area, that they 
can vote where they are.
    Mr. Green. Thank you. I yield back the balance of my time. 
Thank you, Mr. Mayor.
    Chairwoman Waters. Thank you, very much.
    And now the gentleman from Missouri, Mr. Cleaver.
    Mr. Cleaver. Thank you, Madam Chairwoman.
    Mr. Mayor, I served as mayor of a city about the same size 
as New Orleans and I cannot imagine how crippled Kansas City, 
Missouri, would have been had the low-income citizens ended up 
in States all around us. Does not the economy of New Orleans 
also depend on low-income workers and what is the impact of 
low-income citizens being in Congressman Green's district? Are 
there jobs that could be taken right now if they were here?
    Mayor Nagin. Congressman, that is the tragedy of what we 
are doing with this housing crisis. Besides families being 
dispersed, there are significant numbers of jobs here, good 
paying jobs that people can take advantage of, but since they 
are not here, they cannot do it. Our economy is being hindered 
as a result of that. All the workers that we need, a lot of 
them were in the public housing units or in the communities 
surrounding that. So now, some of the restauranteurs--I can 
tell you, our service levels at the restaurants are not as good 
as they were pre-Katrina, because some of those skilled workers 
are not back. So absolutely that is a problem, and then the 
Road Home is basically hindering our middle class citizens from 
coming back to the City and participating in this recovery.
    Mr. Cleaver. Well, what can we do, if you have some 
suggestions, either you or the president of the City Council, 
what can we do in order to try to help bring back to the City 
the workers and if we had a process by which to bring them back 
into the City, is there comparable housing? Would FEMA be able 
to accommodate workers if the call went out and said, you know, 
we have 10,000 jobs available right now and we have temporary 
housing for those workers until they get back on their feet?
    Mayor Nagin. My suggestion is that, first, we push for as 
many units in the housing developments that are safe and that 
can be rehabbed, we push for their redevelopment as quickly as 
possible. Second, we use whatever public land is available and 
we try and push for modular homes to come into this community 
to house workers. I think if we do those two things, we can 
jump start this economy.
    Mr. Thomas. I think the Mayor is right on, but hopefully 
they will pay them better now that they miss them. And 
hopefully they will have some benefits, healthcare and others, 
when they eventually come back. There are a lot of people here 
who worked real hard for very little. So hopefully now that 
they are missed, when they come back, those good wages will be 
there and those benefit programs will be there.
    Yes, a lot of things could be done. Hopefully a lot of 
those units that are not re-occupied could be--a working 
preference could be given to people who are part of the 
traditional workforce. A lot of those apartment complexes will 
receive some type of subsidy, whether it's the Road Home or 
Federal subsidy, there could be a cap on a lot of those units 
for a lot of our traditional working class citizens who were 
originally part of our economy.
    But those things, you could help us by mandating some of 
those things, especially with the disbursement or use of 
Federal funds whether it is homeownership, whether it is 
housing authority, or whether it is apartment complexes. But if 
you do not do that, just to allow the market to--the market is 
going to try to bleed you out of everything they can get. So if 
we can have some stipulations from Congress to deal with our 
traditional workforce, especially those that are part of the 
tourism community and our cultural economy, that would help 
tremendously.
    Mr. Cleaver. One final question, Madam Chairwoman. Three of 
us were in a meeting with President Bush on this past Thursday, 
and he had at the meeting Secretary Jackson, and we raised the 
question with Secretary Jackson similar to what I just asked 
you. Here was the Secretary's response, and I want to try to be 
fair with him. He said that the housing units needed to come 
down, that he would have new units up and running in 2 years.
    He further said that the units that, I think, some of my 
colleagues saw today, even though they are not in a condition 
to be torn down, that they need to come down and that in 2 
years, if people are patient, we will have housing. I was just 
interested in your response.
    Mayor Nagin. Well, I am not sure about the timeline, I have 
not seen a construction schedule. I think what we should ask of 
HUD is to give us an independent assessment of how quickly they 
can bring back certain units. Let us get a hard number on that.
    Mr. Cleaver. Well, he also said--and I think my colleague 
was in this conversation, Congressman Green--that the people 
did not want to come back, which contradicts what you had said 
earlier. And I think I am being fair, aren't I? He said that 
the people do not want to come back, Mr. Mayor.
    Mr. Thomas. Well, we need two things. We need new units and 
we need now units. So new units and now units. So now units 
have nothing to do with the new units. If we can get some now 
units, then you can develop some new units.
    Chairwoman Waters. Thank you, very much.
    Mr. Sires of New Jersey.
    Mr. Sires. Thank you, Madam Chairwoman.
    Mayor, I used to be a mayor years ago and you have some job 
here.
    Mayor Nagin. Yes.
    Mr. Sires. One of the things that has struck me being here, 
we talk about low-income affordable housing, we talk about all 
the things that we need. There seems to be a population that 
sometimes falls through the crack, and that is our senior 
citizens. What happened to the senior citizen population who 
lived in those places after Katrina and what is the 
Administration and FEMA and everybody that is supposed to be 
helping out doing to help those most vulnerable people in our 
society? What are we doing to assure that it is not just people 
who need housing, but also that senior citizens have a place to 
live in their last years?
    Mayor Nagin. Right. You know, the senior population is one 
that we have tried to focus on from the beginning, whether it 
be working with HUD, some of the initial units that they opened 
up were specifically targeted for seniors. In addition to that, 
all of the other programs that we put in place, whether it be 
with apartment complexes or Section 8 certificates or our 
adjudicative process, all have a senior component to it, to try 
and get as many of our citizens, our seniors, back as possible.
    Mr. Sires. Did a lot of the seniors that were here before 
Katrina, did a lot of them leave and have not come back?
    Mayor Nagin. A lot of seniors are out there but looking to 
come back to our City.
    Chairwoman Waters. Please, we have the testimony going on 
now. Let us hear the question.
    Mr. Sires. I am sorry, Mayor, I did not hear that.
    Mayor Nagin. Many of our senior citizens are trying to come 
back to New Orleans. We get communications from seniors all the 
time, whether they be homeowners or renters or whether they are 
in a public housing unit. So they definitely want to come back 
to this City.
    Mr. Thomas. Congressman, this is extremely disturbing to 
all of us because if there is any population or any group that 
deserves special treatment, it should be our senior citizens.
    Let me say, one of the stark contrasts about a lot of our 
fact-finding with the mayor and some of the research we have 
done around the world, in Japan, they had 30,000 units for 
their senior citizens, their disabled and elderly, 6 months 
after one of the worst earthquakes in the world--6 months. So 
to have a population that has paid more tax dollars than some 
of us will ever pay just because of longevity, be in a 
situation that they are in right now--you know, they are 
American citizens and they fought harder for that label than 
any other group that exists today.
    But let us put it in real terms, let me give you a lady by 
the name of Ms. Mumford, I know her. She has been a homeowner 
for 50 years in the Lower Ninth Ward, the area I grew up in. So 
for 50 years, they have owned their property. Well, guess what, 
she has gone from homeowner to homeless. So now her house is 
not worth very much because houses just are not worth very much 
in that neighborhood. So insurance cannot build her a new house 
in today's value. Well, Road Home cannot do it either. So how 
do you go from being a homeowner for 50 years, from being 
independent, to being dependent, hopeless and homeless? And if 
you do anything--a lot of us youngsters, we can fend for 
ourselves, but if anything comes out of this, our seniors ought 
to have special first-class fast track treatment.
    Mr. Sires. Well, Mr. Mayor, and Council President Thomas, I 
certainly agree with you and anything that I can do, please. 
They certainly deserve that. Thank you.
    Mr. Thomas. Just get a list. The Mayor has been trying to 
get a list of people for quite some time. You know how that 
list would help us, Congressman? That list would help us by 
saying where are you, what do you need, how much can you 
afford, here is what is available, how we put a package 
together.
    Chairwoman Waters. Thank you very, very much. We really 
appreciate you being here.
    Mr. Jefferson. Chairwoman Waters, may I just say one thing 
with respect to that question?
    Chairwoman Waters. Yes.
    Mr. Jefferson. When we were in Houston, we found out that 
nobody is sharing data, that the senior population, the Social 
Security folks know who they are, where they are, and what they 
need, they receive checks from them every week--every month, 
whatever. They will not share the data with HUD so that HUD can 
do special things for them. That is one thing this committee 
ought to think about addressing too, so we can meet the housing 
needs of people by having these agencies share data so we can 
take care of our senior population.
    Chairwoman Waters. All right, we will take a look in the 
bill that we are putting together to see if we can waive what 
they say are the privacy laws about the sharing of information, 
so that we can make these databases available.
    Thank you very much for being here.
    Mr. Thomas. Thank you guys, very much. God bless you.
    Mayor Nagin. Thank you, thank you for being here.
    Chairwoman Waters. Thank you, so very much.
    Mr. Thomas. We appreciate you all coming.
    Chairwoman Waters. The Chair will now call the second panel 
and I would like to, while they are coming, recognize 
Councilwoman Cynthia Willard-Lewis, who is here from the 9th 
Ward.
    We also have members of the Parish Council of St. Bernard's 
Parish, Joey DiFatta, council chair and Judy Hoffmeister, 
member of the Council. Thank you for being here.
    For this panel, we have Dominique Blom, Deputy Assistant 
Secretary of the Office of Public Housing Investments at HUD. 
We also have Gil Jamieson, FEMA Deputy Director for Gulf Coast 
Recovery; Jerry LeBlanc, commissioner, Louisiana Department of 
Administration; Walter J. Leger, Jr., chairman, Housing and 
Redevelopment Task Force, Louisiana Recovery Authority; Dr. 
Edward Blakely, director of recovery; and C. Donald Babers, 
board chairman, Housing Authority of New Orleans.
    Each witness will be recognized for 5 minutes for an 
opening statement, which will be made part of the record.
    Thank you very much. Our first panelist is Dominique Blom.

  STATEMENT OF DOMINIQUE G. BLOM, DEPUTY ASSISTANT SECRETARY, 
OFFICE OF PUBLIC HOUSING INVESTMENTS, DEPARTMENT OF HOUSING AND 
                       URBAN DEVELOPMENT

    Ms. Blom. Chairwoman--
    Chairwoman Waters. Could we get a little order, please, so 
that we can hear the Deputy Assistant Secretary of HUD. This is 
very important. Thank you.
    Ms. Blom. Thank you very much.
    Chairwoman Waters, Ranking Member Biggert, and 
distinguished members of the Committee on Financial Services, 
it is a privilege to appear before you today on behalf of the 
Department of Housing and Urban Development.
    I am Dominique Blom, the Deputy Assistant Secretary for the 
Office of Public Housing Investments at HUD. My office 
administers the HOPE VI, the mixed financed, mixed income 
public housing development program.
    Since Hurricane Katrina, my staff and I have been directly 
involved in the recovery plans for New Orleans public housing. 
Today, I share with you HUD's efforts to help the Housing 
Authority of New Orleans recover from the devastating effects 
of Hurricane Katrina. From assisting the relocation of low-
income families to safe and decent housing to planning for and 
carrying out the repair and redevelopment of public housing to 
creating opportunities of public housing residents to return, 
HUD has marshalled significant resources to support the 
recovery effort. Notwithstanding the significant level of 
physical destruction, I believe we have made great strides in 
the recovery effort.
    Allow me to provide you a brief list of our efforts over 
the last 18 months. HUD created and implemented the Katrina 
Disaster Housing Assistance Program (KDHAP), to assist poor 
families who were being assisted by HUD prior to the hurricane.
    HUD sought and received from Congress supplemental 
appropriations to continue assisting vulnerable families under 
the disaster voucher program (DVP).
    Immediately after the hurricane, HUD deployed its own staff 
to Houston, Dallas, and Fort Worth to assist families in 
finding decent temporary housing. HUD increased the Section 8 
payment standard so vouchers could be used for more private 
units.
    HUD inspected 100 percent of the public housing portfolio 
affected by the storm. HANO has made nearly 2,000 units ready 
for re-occupancy and through HUD approvals, HANO has dedicated 
$98 million to the redevelopment effort.
    HANO has secured tax credits and CDBG piggyback funds to 
redevelop four distressed public housing developments, and HANO 
is partnering with private developers to assist in the 
reconstruction to create mixed income affordable communities. 
Also, HUD deployed staff to New Orleans to relocate families 
willing to come home.
    Madam Chairwoman, this is merely a short list of HUD's 
efforts to bring families home immediately while at the same 
time planning for meaningful reconstruction of affordable 
housing in New Orleans.
    We are also aware that there are many challenges that lie 
ahead. The Department, in particular my staff, remain committed 
to the principles outlined by Secretary Jackson in August 2006 
when he visited New Orleans. That is, and I quote: ``Every 
family who wants to come home should have the opportunity to 
come back. HUD's goal is to bring back families to quality 
housing.''
    HUD is working with the local community the redevelop New 
Orleans' public housing so families will have the opportunity 
to return to better, safer neighborhoods. We do not intend to 
waiver from this commitment.
    As you know, HANO is one of the Nation's largest public 
housing authorities and also one of its most troubled. For 
decades, its housing stock was substandard and ridden with 
crime. At the time of the hurricane, HANO's public housing 
inventory consisted of 7,000 units, of which only 5,000 were 
occupied due to deplorable conditions. Of the 5,000 units that 
were occupied and affected by the disaster, nearly 2,000 have 
already been repaired and are habitable. As soon as possible 
after the hurricane, HANO began to repair and reoccupy 1,000 
units at Iberville, Gust, River Gardens, and Fischer. And due 
to the critical housing shortage, HANO and HUD decided to 
repair and reoccupy another 1,000 units at those projects and 
portions of B.W. Cooper. Now over 1,200 families have already 
come back to New Orleans.
    At the same time, HUD and HANO determined that four of its 
largest public housing projects, consisting of approximately 
3,900 units in St. Bernard, Lafitte, B.W. Cooper, and C.J. 
Peete were not fit for human habitation. Where possible, these 
projects will be redeveloped in phases, allowing residents to 
return to repaired units while redevelopment begins.
    The redeveloped sites will have a mix of income to create 
low density communities that provide safe and decent 
environments for families to thrive.
    Chairwoman Waters. Let us hear.
    Ms. Blom. By the end of 2008, there will be over 3,000 
public housing units and new vibrant neighborhoods. In addition 
to the 3,000 units, there will be 1,000 affordable units and 
800 market rate and homeownership units to be built.
    To implement this redevelopment plan, the Louisiana Housing 
Finance Agency awarded these four projects with $30 million in 
tax credit allocation, which will result in private equity 
commitments of approximately $300 million. The Louisiana 
Recovery Authority awarded the projects $108 million in CDBG 
piggyback funds.
    Combining these valuable State resources with $88 million 
of HANO funds, HANO was able to partner with nationally 
recognized affordable housing developers to create vibrant 
mixed income communities.
    But time is of the essence. These four projects, which will 
create 744 public housing units, and over 2,000 units in total, 
must be built by December 30, 2008. This is the deadline 
associated with the tax credit award. To meet this deadline, 
construction must begin this summer. And to meet this 
construction deadline, demolition must begin this spring.
    Chairwoman Waters. Would you wrap up your testimony, 
please. We have it in writing, it is in the record, we will 
review it, and we may have a few questions for you, but our 
time is a little bit limited here, and I would like to move on 
to our second panelist who will be presenting here today.
    [The prepared statement of Ms. Blom can be found on page 90 
of the appendix.]
    Chairwoman Waters. So with that, I am going to call on next 
the FEMA Director for Gulf Coast Recovery, Mr. Gil Jamieson.

   STATEMENT OF GIL JAMIESON, DEPUTY DIRECTOR FOR GULF COAST 
         RECOVERY, FEDERAL EMERGENCY MANAGEMENT AGENCY

    Mr. Jamieson. Good afternoon, Madam Chairwoman, Ranking 
Member Biggert, and distinguished members of the subcommittee.
    My name is Gil Jamieson and I am FEMA's Deputy Director for 
Gulf Coast Recovery. I lead and coordinate FEMA's Gulf Coast 
recovery efforts. I have been in the region since the early 
days of the disaster, previously serving as the Deputy 
Principal Federal Official during the response, as the 
principal Federal official during last year's hurricane season. 
I am a long-time civil servant, having worked in the Agency 
since its inception. My current position was established in 
order to ensure that FEMA's programs are consistently and 
effectively administered throughout the Gulf region. It is my 
pleasure to be with you here today.
    Katrina, in conjunction with other devastating storms in 
2004 and 2005, thoroughly tested the capabilities of FEMA, the 
Department, and the Nation. While these disasters tested our 
plans and our processes as never before, FEMA, working closely 
with our Federal and State partners, has provided more 
assistance than ever before. 44 States and the District of 
Columbia received emergency declarations and have been 
reimbursed for over $750 million in shelter expenses. 
Approximately $6.3 billion has been provided to over a million 
households through FEMA's Individual and Households Program. 
More than 120,000 households have been provided travel trailers 
and mobile homes through FEMA's Direct Housing Mission. And 
over $7 billion of public assistance funds, money for roads, 
bridges, buildings, and utilities has been provided to 
Louisiana, Mississippi, Alabama, and Texas.
    We have worked diligently to balance expediency and 
accountability and support the efforts of our State and local 
counterparts. This collaboration has resulted in significant 
progress, though clearly challenges remain.
    Under Section 8 of the Stafford Act, FEMA is authorized to 
provide temporary housing assistance to include rental 
assistance, home repair assistance, home replacement 
assistance, and direct housing. I will discuss each briefly but 
it is important to note that FEMA's temporary housing 
assistance programs and authorities were not designed to 
provide long-term housing solutions but rather to provide 
eligible victims with temporary accommodations while they work 
with State and local governments and other Federal agencies to 
find permanent housing solutions.
    Under our financial assistance program, $2.1 billion of 
rental assistance has been distributed to over 700,000 
households; 35,000 households continue to receive this form of 
rental assistance.
    Under the home repair program, to date, FEMA has provided 
$318 million, making over 129,000 homes habitable in the Gulf.
    Under FEMA's home replacement assistance, FEMA is 
authorized to provide up to $10,500 in home repair costs. To 
date, $300 million has been provided to over 30,000 households 
across the Gulf.
    Under direct housing assistance, FEMA is providing leases 
to secure housing for evacuees outside the impacted area and 
manufactured housing was provided within the most heavily 
damaged areas of Louisiana.
    Over the course of the last 17 months, FEMA has housed more 
than 120,000 households in travel trailers and mobile homes. 
The total number of households currently living in temporary 
housing assistance has decreased to 91,000. 83 percent of these 
temporary housing units are on private sites where individuals 
are living in those units while they are rebuilding their 
homes.
    Direct housing is authorized under the Stafford Act for up 
to 18 months, but as you well know, that deadline has just 
recently been extended 6 months. This extension gives us an 
additional opportunity to continue our work with disaster 
victims, HUD, and our State and local partners.
    Clearly, FEMA and our Federal and State partners face a 
challenge in transitioning individuals back to permanent 
housing. While the National Flood Insurance Program and the 
Small Business Administration and the State Homeowner Grant 
Programs help address the needs of homeowners and renters, 
renters are experiencing difficulties in finding solutions to 
their long-term housing requirements. This population is 
significant, as the proportion of renters in pre-Katrina New 
Orleans was approximately 53 percent of its residents.
    While the housing challenge is significant, we must also 
ensure that the community builds back, and as it does so, it 
does in a way that makes it stronger and less susceptible to 
future damages.
    FEMA's mitigation efforts have focused on working with 
local communities to rebuild. FEMA's Hazard Mitigation Grant 
Program is available to States following a disaster to fund 
cost-effective mitigation projects. Funds may be used to do 
such things as flood-proofing properties as well as elevating 
and acquiring homes.
    Chairwoman Waters. Would you wrap up, please?
    Mr. Jamieson. Yes, ma'am.
    In Louisiana, over $1.7 billion is expected to be available 
under the Hazard Mitigation Grant Program. FEMA continues to 
work with Louisiana to facilitate the implementation of the 
Hazard Mitigation Grant Program in a manner that meets both the 
objectives of the Road Home and the statutory, regulatory 
requirements of HMGP. But barriers do remain concerning 
equitable treatment in the distribution of Hazard Mitigation 
Grant Program funds. Specifically, the State has established a 
40 percent penalty for funds going to homeowners leaving the 
State, or staying in the State but not committing to owning 
property for 3 years. Recently, the State exempted seniors from 
this 40 percent penalty if they choose to leave the State.
    Chairwoman Waters. The gentleman's time is up, please. Your 
statement will be made a part of the record. Let me remind you 
that the members here do not have a copy of your testimony.
    Mr. Jamieson. Madam Chairwoman, I understand that they do 
not, and we are working to get that provided to you.
    Chairwoman Waters. It is very important; we need to have 
that. Thank you very much.
    [The prepared statement of Mr. Jamieson can be found on 
page 106 of the appendix.]
    Chairwoman Waters. Now, Mr. Walter J. Leger, Jr., chairman, 
Housing and Redevelopment Task Force, Louisiana Recovery 
Authority.

   STATEMENT OF WALTER J. LEGER, JR., CHAIRMAN, HOUSING AND 
      DEVELOPMENT TASK FORCE, LOUISIANA RECOVERY AUTHORITY

    Mr. Leger. Chairwoman Waters, it is a pleasure to be with 
you. Congresswoman Biggert, Congressman Jefferson, and members 
of the subcommittee, I have submitted about 16 pages of 
presentation similar to what we did in Washington a few weeks 
ago when I appeared before you. I have prepared oral remarks 
but I am going to toss them aside and attempt to address a few 
of the things that you brought up a little bit earlier.
    My name is Walter Leger, and I lived in St. Bernard Parish 
most of my life, on the other side of the Lower Ninth Ward, 
down river. I, like so many others in this room, and nearly 
200,000 Louisianans, lost my home. I want to just give you one 
little glimpse into what the loss of a home means to us.
    When a house burns down in a neighborhood, it is a horrible 
tragedy. What we have experienced, all of us in this room, has 
not been the loss of our house. We have lost our homes. We have 
lost our barbers, as you can tell by looking at me. We have 
lost our dry cleaners, we have lost our pharmacist, our 
dentist, our schools, and our neighbors. We have lost our 
family valuables and when we find, in digging through that 
rubbish and wreckage a photograph of family that we thought we 
had lost, we have captured one of the greatest treasures that 
we can.
    We have had great and significant loss here in Louisiana. I 
was asked to serve as a volunteer--I guess I was drafted by the 
Governor--on the Louisiana Recovery Authority, crafted after 
the Lower Manhattan Recovery Authority.
    We have developed a number of policies attempting to 
utilize the $10.4 billion in CDBG monies, including the Road 
Home plan. Let me tell you a little bit about the Road Home 
plan. Our responsibility is development of the policy, 
implementation of the policy. It was enacted actually before we 
got the full amount of money in the hopes of the additional 
$4.2 billion that we fought for and you so graciously allowed 
us to have in anticipation of rebuilding the homes in south 
Louisiana.
    I was told as a rookie in government a year ago that CDBG 
money is the best Federal dollars you can get. It has the least 
strings attached, you can just get it out and you can spend it. 
If that is true, I do not know how the Federal Government ever 
spends any money. Because what we have been a victim of here in 
Louisiana is what I call federalism with strings. We have been 
directed by Washington and, thankfully, here is some money, you 
guys go fix it. But the money is sent and it is actually not 
even really sent, but it is wrapped in red tape with strings 
leading back to Washington.
    Congresswoman Waters, you asked about the regulations, the 
red tape, what can you do. Let me tell you just a few of those 
things. HUD has been wonderful actually in helping us try to 
get around the rules and regulations. But the rules and 
regulations are there, they exist, and they tie our hands and 
make it more difficult to get the money to the people. You 
talked about, and we have all complained about, the fact that 
in computing the grants, we have to deduct what HUD calls, the 
Federal Government calls, duplication of benefits--insurance 
payments, FEMA payments and all of those things--
    Chairwoman Waters. Will the gentleman yield for a moment? 
Are you saying these are CDBG rules or are these rules that 
were developed by the State to implement CDBG?
    Mr. Leger. Oh, no, ma'am. The only real rule--and 
Congresswoman, you pointed out something that, you know, we are 
so concerned with preventing fraud that we are tying our own 
hands. It is not the fraud prevention that is the problem. It 
is the CDBG regulations that have tied our hands so much, the 
Federal regulations.
    We have to verify everything that the homeowners tell us 
and ICF has to verify everything they tell us by third party 
verification. That means we have to get data from SBA/FEMA, we 
have to get it from insurance companies who are not being paid 
to give us this information, and we know how insurance 
companies are when they do not get paid. Those things have to 
be done in order for the monies to be released. Otherwise, the 
State may lose the money. So there is a lot of regulations, I 
could go into detail.
    There are a couple of things--several things, that you can 
do for us immediately. One of the things the Mayor addressed so 
very eloquently, and that is we are required--FEMA monies that 
are spent for assistance and public assistance, we are required 
to make a 10 percent match. State and local governments have to 
make the 10 percent match. You have probably heard about it. 
What is difficult about making the match is not only do we have 
to use a billion dollars of the money you so graciously gave 
us, and send it right back to you, but basically we have to 
comply with both FEMA regulations and HUD regulations on all of 
20,000 projects. Many times the regulations are conflicting. 
You--the White House could do it with the stroke of a pen. We 
ask that you do it by Congressional Act. Waive the 10 percent 
match. It was waived on 9/11, and waived in almost every major 
disaster--Hurricanes Andrew, Hugo, and Nikki in recent history 
of this country.
    Secondly, FEMA has indicated--Mr. Jamieson talked about 
$1.7 billion in FEMA dollars that have been dedicated toward 
the use with the Road Home Program. That money is still tied 
up. FEMA has not released it, is either unable or unwilling to 
release it, claiming that we are discriminating in the program 
in favor of seniors, who you so graciously and eloquently heard 
from Mr. Thomas, you know, this cherished group of our 
citizens.
    HUD, on the other hand, has agreed with the program as it 
stands, that it is not discriminatory. It is my understanding--
and again, I am a rookie in government, I am not a regular 
government guy--HUD is in charge of determining if housing 
policy is discriminatory. But FEMA is holding the dollars up. 
We ask you, move the money away from FEMA, give it to HUD, put 
it in CDBG money, and we will get the money to the people 
faster.
    Another thing you can do for us immediately is teach the 
SBA that there is a difference between a loan and a grant. We 
have had enough trouble getting money from the SBA. You talk 
about the slowness of the Road Home Program, it is 18 months 
out, all of the SBA money is not out, all of those loans are 
not out and they were a bureaucracy in place long before this 
hurricane took place. But SBA is requiring that if a homeowner 
gets a grant, they have to take that money and use the money to 
pay off SBA dollars. That is another $2.3 billion. So you gave 
us $10.4 billion, we are already giving you a billion back in 
that 10 percent match. Now we are supposed to give you $2.3 
billion right back. So we are only at $7 billion.
    Chairwoman Waters. All right. Thank you very, very much. We 
appreciate that.
    Mr. Leger. There are a number of other things, a lot of 
things in my written testimony.
    Chairwoman Waters. We have your testimony, we will refer to 
that. Thank you.
    Mr. Leger. Thank you.
    [The prepared statement of Mr. Leger can be found on page 
115 of the appendix.]
    Chairwoman Waters. Let me move on to Dr. Edward Blakely, 
Director of Recovery.

STATEMENT OF EDWARD BLAKELY, DIRECTOR OF RECOVERY, CITY OF NEW 
                            ORLEANS

    Mr. Blakely. Chairwoman, I am delighted to be here. As you 
know, since we are fellow Californians, I have been in more 
than one disaster and had the responsibility for recovering 
major cities. In each disaster I have been in, speed is very 
important.
    As you know, we got the Santa Monica Freeway up in days, 
not months. The Oakland Hills fire recovery was the fastest in 
the history of the United States. All insurance settlements 
were done and everyone returned to their homes within 3 years. 
So it is very important, now that we are 18 months out, we have 
to make up for a lot of lost time.
    It has already been pointed out by Mr. Leger, that we are 
not building houses, we are building total communities. And by 
building total communities, it requires that we work together 
effectively with schools, with hospitals, and with all the 
social infrastructure that is required to build a community. 
That includes working with the Housing Authority since the 
Housing Authority makes up so much of the housing in this City 
and is strategically located. It is absolutely necessary that 
we enter into agreements with the Housing Authority so that we 
build on time the same kind of products in the same places. And 
I think we can effectively do that.
    This recovery is guided by five principles. The first is 
containing the healing and the consultation process. We have 
been involved for 18 months with planning community level 
plans. Those plans are now reaching their fruition and we will 
be working with the communities to implement those plans.
    The second is we have to put in the infrastructure required 
for a modern economy, and we will be doing that. We are not 
just putting back the infrastructure that was. Although my 
colleagues at FEMA will pay for certain things, we are going to 
have to go well beyond that. The Mayor addressed that. We are 
going to issue bonds to pay for new and improved 
infrastructure. We will be doing that very quickly.
    The third thing that we are trying to do is to ensure that 
every neighborhood is safe, and has hospitals, schools, and all 
the other infrastructure.
    And fourth, we are trying to make sure we have a 
diversified economy. And that is very important because people 
need to come back to jobs. So we have to build jobs while we 
are building the rest of the economy. And we are doing that 
neighborhood by neighborhood. We want to have job centers in 
every neighborhood and job creation opportunities in every 
neighborhood.
    And finally, a modern settlement system, which I discussed 
with you earlier today. That means putting people out of harm's 
way, elevating entire neighborhoods and not just one house at a 
time, building those houses on platforms so that they will be 
safe in the future. You saw some of that today. We can do this 
all over the City.
    How do we do it? We are picking strategic and targeted 
neighborhoods to begin this process so we can build the entire 
neighborhood at one time. We are putting all of our resources 
into these neighborhoods in order to be trigger points to 
attract private investment and to attract other investments. We 
are making sure that we coordinate this by having a council 
across the parish of all agencies--Sewage and Water Board, 
electricity, all those agencies will be sitting at the same 
table with me as the Chair. I will be coordinating all the FEMA 
programs that come in here so that we work together to get to 
the right results and the right places at the same time. We 
will be making a master schedule for this work so that 
neighbors and community members know when things are going to 
happen.
    Let me finish with what I think we need to do to make these 
things work.
    First, we need the CDBG flexibility that was alluded to 
earlier.
    Second, we need to know who is coming back, where they are 
coming back from, and when they are coming back. This is a job 
that is usually done by the United States Census. And having 
sat on census committees, I know it can be done. It's called a 
special census. It is possible to do, we have the resources to 
do it already within the United States Census. The only thing 
they have to do is give us the data. It would not violate 
anyone's privacy. You can get it off the Web.
    And third, we have to be very creative about how we re-
establish public housing. Much has been said about this 
already. It has to be a phased program that includes all the 
ingredients, including the social programming, and not just the 
housing programming. We talked about that earlier today. That 
includes job training programs for the people out-of-State and 
people in-State, so they are eligible in taking the jobs. And 
we have to have some jobs for workers, for police officers, and 
for other people within these same housing settlements, so that 
we provide the security I mentioned earlier.
    Those are the things that we need to do and we need to do 
immediately. Thank you.
    [The prepared statement of Mr. Blakely can be found on page 
84 of the appendix.]
    Chairwoman Waters. Thank you, very much.
    Next, we are going to move to a gentleman I have gotten to 
know very well, as he has escorted me on every visit to New 
Orleans public housing, C. Donald Babers, board chairman, 
Housing Authority of New Orleans.

    STATEMENT OF C. DONALD BABERS, BOARD CHAIRMAN, HOUSING 
                    AUTHORITY OF NEW ORLEANS

    Mr. Babers. Chairwoman Waters, Ranking Member Biggert, and 
distinguished members of the Committee on Financial Services, 
it is a privilege to appear before you today on behalf of the 
Housing Authority of New Orleans.
    Chairwoman Waters. Let us hear what Mr. Babers has to say.
    Mr. Babers. I am Don Babers, chairman of the board for the 
Housing Authority of New Orleans, and I have been directly 
involved in the recovery plans of New Orleans housing since 
last spring.
    The demolition and rebuilding of public housing in New 
Orleans did not start with Hurricane Katrina. The discussion on 
how to offer a better public housing alternative in New Orleans 
started in the late 1990's when the majority of HANO's public 
housing units continuously failed HUD's physical inspection 
standards.
    Despite millions of dollars appropriated for extensive 
rehab and modernization, only 5,000 of the 7,000 units were 
habitable prior to Hurricane Katrina. Of those 5,000 units, 
many needed extensive work to bring them up to acceptable 
levels.
    In 2002, HUD took over the Housing Authority of New 
Orleans, cleaned up its books, and embarked on an ambitious 
$700 million rebuilding plan. HUD envisioned the creation of 
new safe neighborhoods with homeownership opportunities for 
anyone who wished to pursue the American dream, including 
public housing residents.
    Since HUD took over, 1,000 affordable housing units have 
been built and are being built at Fischer, Gus, Florida and St. 
Thomas and another 300 are underway at Gus, Fischer, and St. 
Thomas.
    Let me just say, litigation and public debate about new 
construction certainly has slowed the rebuilding progress. We 
have had every form of architectural expert here assessing the 
bricks and mortar of public housing. However, those experts 
have not addressed the toll of the crime plagued, racially 
segregated public housing units. Both factors in HUD's 
evaluation of the densely built decayed old public housing, and 
our decision to rebuild.
    Hurricane Katrina struck the City while HUD's receivership 
team was in the midst of redeveloping New Orleans worst 
developments. Outwardly, the homes appear to have survived the 
storm. It is when you evaluate the insides of the homes, the 
electrical wiring, the plumbing, the power receptacles, the 
roof structure, the mold, and the overall infrastructure 
damage, that one comes to realize the time for change is now.
    We believe now is the time, for a variety of reasons. The 
cost of renovating public housing is not cost-effective. Our 
engineering firm estimated it would cost $129 million to make 
only Katrina-related repairs to St. Bernard, B.W. Cooper, C.J. 
Peete, and Lafitte. Extensive modernization of these same four 
would cost approximately $745.2 million. On the other hand, 
demolition and the redevelopment of similarly configured units 
would cost $597 million. It would be an irresponsible use of 
taxpayers' dollars to follow any other path, which is why we 
came to the conclusion that redevelopment was the best option 
on so many levels.
    Economically, HANO is poised to rebuild affordable housing 
by December 2008. We were awarded approximately $300 million in 
tax credit equity to redevelop the big four. The projects 
include the development of nearly 2,100 affordable units that 
collectively have a total development cost of approximately 
$540 million, including approximately $300 million in tax 
credit equity. This funding could be lost due to the December 
31, 2008, deadline.
    Chairwoman Waters, Ranking Member Biggert, and 
distinguished members of the Committee on Financial Services, 
whether you agree with our plan or not, you should know we are 
in this fight solely to provide a better tomorrow for our New 
Orleans public housing residents.
    Repairs may be cheaper and more expedient in the short run 
where costs are measured in dollars, but in the long run where 
costs are measured in lives, they are too great. While HANO has 
been charting the course ahead, we have also worked hard to 
ensure all former residents of New Orleans public housing are 
receiving a rent subsidy. We are also working, where possible, 
to bring residents back to safe environments. Thus far, we have 
1,200 families residing in public housing. We are calling other 
families and advertising for all others to keep us apprised of 
their situation on the anticipation of return.
    Chairwoman Waters. Mr. Babers, would you wrap up? We have 
your testimony in writing and would you wrap up, please.
    Mr. Babers. We realize that the mistrusts of HANO have left 
many doubters. As proof that such a revitalization plan can 
work, we would ask that you look to a neighbor to the east, 
Atlanta. Atlanta last week announced plans to raze most of 
their distressed public housing.
    Chairwoman Waters. Thank you, your time is up. Thank you 
very much. We do have your testimony in writing. Thank you.
    All right, if I could have your attention, please. We are 
going to ask some questions. And maybe some of the questions we 
ask will help you to maybe understand or to gather some 
thoughts for some recommendations through some of the 
representatives who will be in the next panel.
    With that, I will recognize myself for 5 minutes. Let me 
start with not so much a question, but a statement relative to 
CDBG.
    We are going to have an omnibus bill that will correct the 
need for the 10 percent match and we are going to do some 
waivers and all of that.
    But I want to be clear that we are going to correct the 
$1.2 billion that FEMA has in the Hazards Mitigation Program, 
but that $1.2 billion has nothing to do with the slowness of 
the project at this time. The fact of the matter is, you have 
all of that other money that has not been spent. So I just want 
to--and also I want you to be clear about the difference 
between CDBG requirements and the requirements that were 
created by the Road Home Program rather than CDBG. So put a pin 
in that while I go directly to public housing and Mr. Babers.
    I want to ask about your numbers. First of all, is there a 
problem in contacting the public housing residents who are 
living in other States? How good is your database? And what can 
you tell us about how many have been actually contacted, what 
did they say and how can the Congress, how can this committee 
get from you the complete information on the numbers that are 
out there, the numbers that have been contacted, the numbers 
that said they did not want to come back, the numbers who said 
I need some money for relocation to come back, the numbers who 
said I will be back as soon as school closes because I do not 
want to take my kid out of school--help us to understand this.
    Mr. Babers. Yes. We have a team of 15 individuals calling 
daily that we have brought in who are actually making calls.
    Chairwoman Waters. Let us hear. Yes?
    Mr. Babers. Just our recent calls, we have made 978 calls 
in the last couple of weeks and we have been unable to reach 
736 of those. We have heard that within 30 days, 79--
    Chairwoman Waters. I really do need to hear him. 978 calls 
and what was your next sentence?
    Mr. Babers. We are hearing that in 30 days, 79 would be 
able to come back; in 90 days, 50 would be able to come back; 
and in 90-plus days, 34 would be able to come back. We are 
hearing different reasons in terms of leases, doctors, the 
infrastructure, and many reasons, school--68 percent of our 
families have children in school. Many of these are saying that 
it would have to be after school is out. So we are hearing 
numerous things.
    On the other side of the coin, one thing that would 
certainly be helpful is us getting current information from 
FEMA. We are having a problem. We are getting a lot of wrong 
numbers--
    Chairwoman Waters. What percentage of telephone numbers do 
you have of residents who are living--
    Mr. Babers. Out of the 978 calls, we were unable to reach 
736 for various reasons.
    Mr. Babers. Many of them we were leaving messages.
    Chairwoman Waters. Wait just a minute.
    Mr. Babers. Bad information.
    Chairwoman Waters. Excuse me, one moment, one moment, one 
moment.
    This is very important, very important. Out of 978 calls, 
how many people did you reach?
    Mr. Babers. Again, 900, and we were able to get a total of 
237 that we made contact with. And I can get you definitive 
numbers on this and the various reasons.
    Chairwoman Waters. Okay, so you were able to reach, out of 
the 978, you were able to reach 237?
    Mr. Babers. Right.
    Chairwoman Waters. Okay. As I understand it, for those 
people who have signed leases, HUD is making a commitment to 
take care of those leases so that they will not be stuck and 
not be able to return; is that correct?
    Mr. Babers. We are making provisions to deal with the 
leases, to buy out the leases.
    Chairwoman Waters. I am sorry. Do you have--have you 
developed a policy that is applicable to everybody about how 
you will handle the lease responsibility at this time?
    Mr. Babers. We are still working on that. We did hearings 
in five cities and met with the various residents in the cities 
and we are in the process of pulling that process together.
    Chairwoman Waters. All right, okay. So there is no 
consistent lease policy at this time?
    Mr. Babers. No, not at this time.
    Chairwoman Waters. Okay, what is HUD's position on 
relocation costs?
    Mr. Babers. We are negotiating and working with our 
families in terms of trying to do the relocation costs.
    Chairwoman Waters. Do you have a policy that is applicable 
to everyone on relocation?
    Mr. Babers. We pay relocation costs.
    Chairwoman Waters. Just a moment. Let me ask you, do you 
have a policy that I could put my hands on right now that 
describes how you handle relocation?
    Mr. Babers. Yes.
    Chairwoman Waters. Is that known? Has that somehow been 
communicated to the public housing residents who are in other 
States?
    Mr. Babers. I would say so, yes. Many of them have already 
received relocation checks.
    Chairwoman Waters. HUD--excuse me, I need you to give me 
your attention now. Can someone get for me the HUD policy on 
relocation by tomorrow morning or tonight or sometime?
    Mr. Babers. Yes, ma'am.
    Chairwoman Waters. Would you get me that policy in writing? 
Okay, so also, I know that many of our residents did not leave 
with their household goods, because I saw them in the housing 
development.
    Mr. Babers. Right.
    Chairwoman Waters. Does HUD have a policy on replacement of 
household goods or assistance with replacement of household 
goods in any way?
    Mr. Babers. Not at this time, no.
    Chairwoman Waters. All right. And just a minute. For those 
families who have children in school, is there a policy 
developed by HUD about how many months you will wait for them 
to return, based on the fact that their children are in school 
and they do not want to take them out, what is your policy?
    Mr. Babers. We have a policy. We make a call and you have 
an opportunity to come. If you do not come at a certain point, 
then you drop down, not to the bottom of the list, but there is 
a policy in place.
    Chairwoman Waters. Just a minute.
    When they are contacted, how much time are they given 
before they drop down on the list?
    Mr. Babers. How many days--30 days.
    Chairwoman Waters. Okay, so there is a 30-day policy. So if 
you call Mrs. Jones and Mrs. Jones says, ``I have three kids in 
school and I do not want to take them out, but I do want to 
come back, but I cannot come back until June.'' What happens to 
Mrs. Jones' family?
    Mr. Babers. At some point, then they would drop down on the 
list. They are still on the list, but we go to the next person. 
We offer the first right of refusal.
    Chairwoman Waters. Okay, all right. My time is actually 
expired and I was just trying to find out what the policies are 
because if you do not have clearly defined policies and rules 
so that people can understand them, it causes a lot of 
confusion.
    Mr. Babers. We have a clear policy.
    Chairwoman Waters. But I am going to move on so that our 
ranking member can raise her questions now. Ranking Member 
Biggert. Thank you very much.
    Mr. Babers. Yes, ma'am.
    Mrs. Biggert. Thank you.
    I would like to ask all of the panelists one question. Is 
there anything that we, in Congress, have not done? In other 
words, have we provided any barriers to what you are trying to 
accomplish here? Dr. Blakely.
    Mr. Blakely. The rules that Mr. Leger talked about are 
sometimes barriers and I think they can be waived 
administratively, but apparently the Congress is going to have 
to weigh in on these. I think that we need some guidance from 
the Congress as to exactly how we handle our housing 
infrastructure as a whole, not just public housing. That would 
be very helpful because the money has to arrive for both at the 
same time. If we are discoordinated there, then that means the 
schools will not work, it means I cannot put the sewer in, and 
the water systems, etc.
    Clearly we can do some of this at the local level, but if 
the money does not come at the same time, we are hamstrung. So 
I think these things are very important. And as the Mayor said, 
here in New Orleans, we would like handle those infrastructures 
ourselves, including the Road Home Program.
    Mrs. Biggert. Well, you know, we went and visited so many 
of the public housing complexes, and they were really hard hit, 
there is no doubt about it.
    Mr. Blakely. They were.
    Mrs. Biggert. And need so much repair. But it seems like 
then we talk about the services, the infrastructure, the 
schools are not there, the kids cannot go to school. But it 
still seems to be this cycle, this circle. How do we break that 
circle and where would you start? We see that the housing is 
still there; it has not been cleaned up or torn down. What 
would you recommend doing first? What would be the first thing, 
let us say you would say okay, we are going to start this now, 
what would you do tomorrow?
    Mr. Blakely. Tomorrow I would select a zone and that zone 
would be a concentrated zone in which we put all of our 
infrastructure and things in and we would go from area to area 
doing that and within 3 years, like I did in Oakland, we would 
be finished.
    Mrs. Biggert. Mr. Jamieson.
    Mr. Jamieson. Congresswoman, from an appropriations 
standpoint, with what Congress has done through the disaster 
relief fund, that provides funding assistance for us for 
temporary housing assistance, public assistance. If it was 
anything, I think both the Mayor and the president of the 
Council mentioned that community disaster loan program; in the 
specific appropriation for that, Congress was removing the 
payback option that had historically been associated with that. 
But certainly from a funding perspective, we have the resources 
that we need.
    Mrs. Biggert. Mr. Leger, what would you do first and what 
is an impediment that you find from Congress?
    Mr. Leger. What would be the first thing we would do? In 
terms of Road Home, we would eliminate some of the restrictions 
and regulations. And by the way, the restrictions and 
regulations that I discussed before, you asked were they CDBG? 
Staff corrected me, they are not HUD regulations, they were 
regulations in the appropriations bill that HUD cannot waive 
certain restrictions including duplication of benefits and 
others.
    Mrs. Biggert. Can you give me those specifics?
    Mr. Leger. Yes. Specifically--as a matter of fact, 
correcting something I said a little bit earlier, the reason 
there is a $150,000 cap, the reason there is a pre-storm value 
cap, is because in December 2005, in the original 
appropriation, we were given $6.2 billion. It was insufficient 
for our needs. We came back and got an additional $4.2 billion, 
but we needed $8 billion. So we have had to, with the budget 
available, deal with infrastructure, and we have had to deal 
with economic development issues, and $7.5 billion allocated to 
housing including rental housing development and homeowners' 
assistance. So what I would do first is to give us more money, 
give us more money to fully compensate people who have 
sustained losses.
    You know, Congressman Jefferson has been good to point out 
that there is an exemption or an immunity in the Flood Control 
Act with respect to the U.S. Army Corps of Engineers. If a 
private party were responsible for the damage that was done in 
Louisiana, then the homeowners could be compensated by the 
course of civil litigation. Accordingly, we are capped, so we 
cannot fully compensate them. We are restricted by HUD 
regulations and appropriations regulations from compensating 
for loss of goods and property and contents and otherwise. We 
would remove those specific restrictions, and my written 
comments provides some very specific aspects.
    Mrs. Biggert. All right, thank you.
    Mr. Babers.
    Mr. Babers. We would ask for social service monies as well 
as job training. We have a tremendous need for job training, 
job placement, and counseling. So certainly there is a 
tremendous need for that.
    Mrs. Biggert. Okay, and what would you do first here as far 
as the circle of the house and the jobs and the services? How 
do we really start where you can come and say we are on our 
way?
    Mr. Babers. Right. We are in the process of entering into 
an agreement with Odyssey House to do case management, which 
will actually, as each family comes back, get a defined idea of 
what their needs are and from that we would then be able to 
make the referrals to the necessary social service agencies.
    Mrs. Biggert. Ms. Blom.
    Ms. Blom. I think there are three major items that we would 
seek Congress' assistance on to be able to allow for phased 
redevelopment.
    The first is an extension of the placed-in-service date. 
Currently that placed-in-service date for all the tax credit 
projects is December 2008, and in order to accommodate phased 
redevelopment, we will be doing repairs first and having 
families come back and then doing development in phases, would 
really require at least a 2010 deadline for the placed-in-
service date.
    Second, we would seek for additional flexibility under the 
901 provisions that were provided under the emergency 
supplemental that was passed in December of 2005. It allowed 
housing authorities in the Gulf region to commingle their funds 
from HUD and use it for development efforts. And in this case, 
if that were extended for another year, that would give HANO 
additional funding to be able to carry out the redevelopment 
effort.
    Third, as you mentioned earlier, the reduction in Section 8 
funding for Gulf States housing authorities as a result of the 
continuing resolution, we would ask for restoration of those 
fundings to be able to allow persons on Section 8 to be able to 
continue without assistance.
    Mrs. Biggert. Thank you. Thank you, Madam Chairwoman.
    Chairwoman Waters. All right, Congressman Jefferson, 5 
minutes for questioning.
    Mr. Jefferson. Yes, ma'am.
    Mr. Jamieson, I do not think that anyone expected this 
recovery to take so long and the storm to be so devastating. 
None of the laws we had contemplated this sort of disaster. You 
have a $26,200 cap on assistance. How many folks are bumping up 
against that cap now, how big a problem is that, and what does 
the Congress need to do to fix the problem, if anything?
    Mr. Jamieson. Forgive me, but I am not sure I heard all of 
your question. I think you were dealing with the $26,000 cap?
    Mr. Jefferson. Yes, the $26,200 cap. My question is how big 
a problem is that now for individuals and families and what do 
you think--does the Congress need to address that now? Because 
a lot of folks must be bumping up against that cap now.
    Mr. Jamieson. Yes, what we have done, sir, is we are not 
bound by that cap. What we are doing is continuing to provide 
direct financial assistance and as opposed to it bumping 
against an individual's cap, for those folks who are in rental 
assistance, what we are doing is providing direct assistance to 
the landlord of that rental unit. So that we are not bound and 
will continue to provide rental assistance as long as they are 
in those rental units.
    Mr. Jefferson. How long can that work, using this method, 
because there is enough money in the pipeline to do that sort 
of thing without getting a release on the cap? So we do not run 
out of money and tell people they have to get out their places 
because they do not have any more cap available to them? You 
mean you can carry out this program without a cap increase?
    Mr. Jamieson. Congressman, I am terribly sorry, but with 
the acoustics in here, I am not getting all of your question.
    Mr. Jefferson. I just want to know whether or not the cap--
we will never have to address this cap increase issue, you can 
always get around that and there is enough money in the 
pipeline to do that? That is what I am asking.
    Mr. Jamieson. As long as--with the extension of housing 
assistance for that 6 months, we will--
    Chairwoman Waters. It is very difficult to hear. So if you 
would keep the noise down.
    Mr. Jefferson. We are down here to fix things. So the issue 
is on the $26,200 cap on assisting individuals, families.
    Mr. Jamieson. Yes.
    Mr. Jefferson. And the question is whether we need to do 
anything about that or not. Do you have a way to work around it 
that will take us through the whole process here? Because we do 
not want to have to run out of money and you say now we are out 
of money and therefore we cannot assist families any more. So 
just want to know today whether that is--we need to raise that 
cap or not.
    Mr. Jamieson. Yes, sir, sorry for taking you the long way 
around there. But I think that is something that the committee 
should look at in terms of that cap. It is not going to affect 
disaster victims down here because of the work-around that we 
have done. But I think that it is an issue in today's rental 
markets, because not only is it dealing with rental assistance, 
but it is dealing with other needs such as medicines and 
clothing for the folks who left without anything. They are 
getting up to $10,000. That is all running up against that cap. 
So I think it makes sense to have a cap, but I think it should 
be expanded and I think there should be discretion at the 
director's level to waive that and adjust it to the 
circumstance.
    Mr. Jefferson. Will you make recommendations to the 
committee or someone in your organization as to how we get at 
this problem because it is--
    Mr. Jamieson. I am sorry, I will get with the chief of 
staff and do that; yes, sir.
    Mr. Jefferson. The next is, the Mayor tells me that there 
is a whole lot of controversy over valuations of what the 
losses are for various public infrastructure needs. For 
instance, the Mayor says for the sewage and water recovery, 
$400 million, some number like that.
    Mr. Jamieson. Right.
    Mr. Jefferson. And FEMA looks at it and says no, no, it's 
$100 million.
    Mr. Jamieson. Yes.
    Mr. Jefferson. Then the Mayor is criticized for not 
submitting work orders when he says, ``God, if I do that, we 
will never get the place fixed back again.'' How can we fix 
this issue of valuation?
    Mr. Jamieson. Sir, I think we have a fix there and let me 
just say that the total estimated public assistance costs down 
here are some $5 billion. We have obligated almost 75 percent 
of that funding, but the Sewer and Water Board is a very, very 
complicated project. I am dealing with Dr. Blakely, the members 
of the Sewer and Water Board, the Mayor, and the State. And 
what we have agreed to is putting in place an MOU between all 
of us that says we are going to get an independent contractor 
in here to do a baseline assessment of that, we are going to 
determine what is disaster-related damage.
    Mr. Jefferson. A contractor that you and the Mayor would 
agree on to come in here? You called this person independent. 
Someone--the two of you would agree on some independent 
appraisal of this thing and then go with the numbers, that is 
how you would do it?
    Mr. Jamieson. Yes, sir, it is. And the contracting process 
allows us to not have it be strictly a Federal activity, but to 
bring the City in so that we are all in agreement that this is 
the right contractor to use for this particular job and we are 
going to live with the results.
    Mr. Jefferson. Mr. Blakely--Dr. Blakely, I am sorry, you 
described a process, a very extensive process. In the short 
term, because the Congress is trying to address the short term 
and long term needs down here--in the short term, what are the 
most important things that--three most important things that 
Congress ought to go and address right now to help you through 
the short term part of this recovery for the City?
    Mr. Blakely. The three are pretty simple. First, we need to 
know who is coming back. That data is vital to us. The second 
is--
    Mr. Jefferson. Now how can we help you to find that out?
    Mr. Blakely. The U.S. Census is pretty good at that and 
there are other devices that we can use, but we do need--and 
some of that data is with FEMA, and some of that data is with 
ICF. It is all over the place, so it would be helpful if we 
could bring it together in a coherent fashion.
    Mr. Jefferson. All right, that is one thing.
    Mr. Blakely. All right. That might require the U.S. Census 
to help us, but they have the expertise.
    The second thing that we have to do is to focus very 
clearly on the fact that we do not have enough housing for our 
workers. If we do not have workers here, we cannot build 
anything. So we need a carve-out through a lease or something 
to lease some of the existing structures, rehab those 
structures, and then have them for workers and then have those 
workers phased-out and have the residents phased-in. That is 
essential. And we need Congressional approval to do that, 
because we do not have that kind of approval now.
    Chairwoman Waters. Thank you very much. The gentleman's 
time has expired.
    I will now call on Mr. Neugebauer.
    Mr. Neugebauer. Thank you, Madam Chairwoman.
    I want to kind of go down the road here just a little bit 
of managed expectations, because I think a lot of people here 
are here out of frustration because of the expectations that 
they have.
    You know, one of the things that a lot of commercials do 
today is they take an object apart over a long period of time 
and then in a 30-second commercial, we get to see them run it 
in reverse and it is all back together again. And what the 
people in New Orleans, I think, want to see, is New Orleans 
back together again.
    But Dr. Blakely, you have a distinguished career of looking 
at these rebuilding programs. What is a reasonable expectation, 
if we could hit the rewind switch and put everything back 
together the way it was pre-Katrina, what kind of time frame 
are we talking about?
    Mr. Blakely. Well, at the outside, we would be talking 
about a rebuild of this City to about 600,000 or 700,000 
people--it would take between 15 and 20 years, at the outside.
    Mr. Neugebauer. Okay.
    Mr. Blakely. But within that, I think we can get back to 
around 400,000 citizens in 5 to 7 years, using the existing 
infrastructure cleverly. And I think the citizens, as long as 
we are moving, will be with us. We have lost almost 2 years in 
that kind of a program. But I think we have now the capacity to 
do that with the monies that we can receive, with the leverage 
we can generate and the flexibilities that I have asked for.
    Mr. Neugebauer. And really what I heard you say awhile ago 
is that we really do not even--today if we could bring 
everybody back, we do not have the capacity to do that, nor the 
economy probably to do that.
    Mr. Blakely. No, we do not. Just for schools, we do not 
have enough hospitals available, and we do not have the social 
infrastructure Mr. Babers talked about, so it is very important 
to bring this about in a phased way. And this is about my sixth 
time around on this, so you learn a few things by doing it.
    Mr. Neugebauer. And speaking of learning something, I want 
to go somewhere with Mr. Jamieson. What do you think FEMA's 
role is in a national disaster of this magnitude as far as it 
relates to housing? What do you think FEMA's role should be?
    Mr. Jamieson. I think, first of all, sir, there does need 
to be clarification there. I think what FEMA does, and does 
pretty well, is to get interim emergency housing to folks. But 
we are clearly not resource authorized or appropriated to deal 
with the long term permanent housing issues. And I think 
because FEMA is so present down here, we are associated with a 
lot of those issues--we were not as quick as we could be in 
terms of even providing emergency housing with the 120,000 
travel trailers that were here.
    One of the things that Congress has recently done is 
authorized $400 million for us to explore alternative emergency 
housing measures and I think there is a clear distinction that 
needs to be made between emergency housing and what FEMA does, 
and what our partners at HUD do, in terms of permanent housing 
assistance.
    Mr. Neugebauer. I guess the question then I have is have we 
learned some things in this situation where we manage those 
expectations of what FEMA's role really is, and that is to get 
as many people housed as soon as possible, and then moving more 
quickly to the permanent solution. Are there some structural 
things that Members of Congress, my colleagues who are sitting 
up here, need to be looking at so that if, God forbid, we have 
another Katrina, we know what to expect from FEMA, and we know 
what action items need to begin to take place? Because I think 
the Congress was very generous. I mean every time somebody 
brought a request to the President, the President sent it over 
to the Congress, and we appropriated the money. But I am not 
sure we were--that the systematic transfer of what was FEMA and 
what was HUD and what was the local community and what was the 
housing authorities. So did we learn something to make that 
transition? I just kind of open that up to the panel really.
    Mr. Leger. Congressman, if I may, I think that there is a 
psyche in the post-disaster south Louisiana and the psyche is, 
and particularly if you look at New Orleans and St. Bernard 
Parish which was so severely devastated, and a question gets to 
be once the immediate disaster is over and actually Senator 
Lieberman said that there ought to be a new category of event, 
a catastrophe. You know, FEMA was designed to deal with a 
disaster, we have something of that proportion here. And the 
psyche is that some things become self-fulfilling prophecies.
    As Dr. Blakely pointed out, we have lost 11 hospitals 
here--11 hospitals here in New Orleans. St. Bernard Parish lost 
its only hospital. We were in a meeting with Councilman DiFatta 
just the other day about the need a hospital for people to come 
back. Sixty percent of the people are questioning whether they 
are going to go back. They need to know they are going to have 
levee protection and coastal restoration. And then people 
individually are looking at their neighborhoods and saying, 
``Well, do I want to go back and rebuild my home, what are my 
neighbors going to do?''
    So in our transition--infrastructure, schools, hospitals, 
and roads. The roads are full of potholes developed by the 
longstanding water. Those things have to come before there is a 
feeling of confidence that the community is coming back. And 
then, of course, we have to get the funds, the insurance 
monies, the grant monies, and that type of thing.
    Chairwoman Waters. The gentleman's time has expired.
    We are going to move on now to the gentleman from Texas, 
Mr. Green.
    Mr. Green. Thank you, very much.
    Mr. Leger, would you be so kind as to submit a letter 
requesting relief with all of your concerns in it? And this 
way, with that codified document, we can give you an 
intelligent response.
    Mr. Leger. Yes, sir. In fact, a lot of those are listed in 
my written testimony, which we have submitted, but we will make 
it much more pointed.
    Mr. Green. There is some question as to where your written 
testimony is right now.
    Mr. Leger. Oh, I apologize. We have it, and we submitted it 
to the Financial Services Committee 2 weeks ago.
    Mr. Green. If you would, just codify the requests for 
relief as opposed to giving me and the committee the entire 
testimony. And we will sift through that and look through it, 
but I think that would be beneficial.
    Mr. Leger. Yes, sir.
    Mr. Green. Mr. Babers, sir, the people seem to want to come 
back to what they had. The Mayor, while he did not use that 
language, seems to want to get as many people back as he can to 
what they had.
    Now let me ask this, because there seems to be an 
assumption that this is a great time to improve upon public 
housing. I have no argument with you; I would like to see it 
improved too. I think the people who want to come back to what 
they had would like to see things improved, but there seems to 
be the assumption that people are doing better where they are.
    Now I have people who are living from deadline to extension 
and many of these deadlines will end right around Christmas or 
some holiday and many of them are not comfortable where they 
are and they really want to return.
    So I am asking you to factor in, when we factor that into 
the equation, the money that we are going to have to spend, 
hopefully that we will spend to continue to house people where 
they are, how do you reconcile that with a desire to do a 
really good job, but at the same time you are keeping people 
away from the house and the home that they know and they want 
to return to?
    And friends, I am going to ask, if you would, do not 
applaud because I only have 5 minutes and I have some more 
questions.
    Mr. Babers. I am trying to get exactly what you are asking 
me. Come again in the sense of being satisfied where they are. 
Let me--first of all, we want to bring our families back. We 
have identified up to this point 2,000 units that we have 
identified as low lying fruit that had the least number of 
trouble in terms of fixing these units up for habitation. 
Again, 67 percent of our units were uninhabitable prior to 
Katrina, so we have identified the 2,000 units.
    One of the things that Dr. Blakely and I--
    Mr. Green. Permit me to intercede for just a moment, I do 
not mean to be rude. But let us not talk about those that were 
not habitable, let us just talk about the people who want to 
come back to what they had.
    And I have to add one more element to the equation. If you 
are only contacting one-fourth of the people that you try to 
reach, can you truthfully say that you have an efficacious 
effort to contact people in place?
    Mr. Babers. That is a good point. Our initial tallies gave 
us 60 percent of the families wanted to come back, which would 
equate to about 3,000 units, which is what we are proposing to 
put on the ground. But again, if we are talking about bringing 
the families about, what we are talking about total, just 
Katrina-related cost, $130 million to fix up just Katrina-
related costs. If we are talking about extensive mod, our 
figures are saying $746 million.
    So that is what we are grappling with, the numbers. And so, 
you know--
    Mr. Green. Excuse me, Mr. Jamieson, my time is about up, so 
let me quickly ask, the 403 to 408 transition, why is that 
transition so nebulous that people seem to just drop through 
the cracks and courts have to be involved?
    Chairwoman Waters. Quickly. The gentleman's time has 
expired. Would you quickly wrap it up, please?
    Mr. Jamieson. Yes, I would. Congressman, 403 was what FEMA 
could do under emergency assistance, it was the quickest way 
that we could get our hands on the money for folks and housing 
assistance. 408 of the Act is what actually allows us to 
provide temporary housing assistance.
    I do not think we were as clear as we could have been, but 
I do not think anyone has fallen through the cracks. I think we 
have been over in Texas, the 16,000 folks from Louisiana who 
are still over there, we have case managed every one of those 
cases. Those who are eligible for assistance are receiving it, 
sir.
    Chairwoman Waters. The gentleman's time has expired.
    Next we have the gentleman from Missouri, Mr. Cleaver.
    Mr. Cleaver. If you would be economical in your response, 
so I can get through. Mr. Jamieson, I am familiar with this 
school, my son graduated just prior to the flood; he was still 
here when the flood hit. And are you familiar with the letters 
that have gone out to students from Dillard University and 
other universities telling them to send $2,000 back that they 
received after the flood?
    Mr. Jamieson. I am.
    Mr. Cleaver. Thank you for the economy.
    Mr. Jamieson. I would be happy to address it. I have a 
daughter in high school and a daughter in college as well, so I 
am sensitive to those concerns and I have, in anticipation, 
quite frankly, of this hearing, we have set up a separate call 
number for those students so that we can work through each one 
of their cases on an independent basis, not only here, but also 
at Tulane University, the University of New Orleans, and other 
schools.
    Mr. Cleaver. Yes. Okay, and I am glad you are doing that. I 
think it would have been better if there had been, you know, a 
little more effort put into deciding whom to send the checks to 
in the first place. If you are 19 years old and you get a 
letter and you are up in Tennessee, you just left here and you 
are in another school, and it starts talking about prosecution, 
the FBI and Rin Tin Tin and the Lone Ranger all coming after 
you, you know, I mean these are kids and I am personally 
involved with two young ladies who are in colleges elsewhere 
and I just think that was a terrible public relations blunder.
    Mr. Jamieson. I agree.
    Mr. Cleaver. Secondly, Ms. Blom and Mr. Babers, do you 
agree with Secretary Jackson that the people who have left do 
not want to come back?
    Mr. Babers. We are hearing 60 percent say they would like 
to come back and so that is the figure that we have been 
dealing with.
    Chairwoman Waters. All right, Mr. Cleaver needs time to 
raise his questions.
    Mr. Cleaver. The Secretary said to me and some of my 
colleagues, he said he would take 3 days off, come down to 
point out door to door that people didn't want to come back, if 
we went to Houston. So I am just asking, since you are on the 
ground here, the two of you are on the ground, is that your--
    Mr. Babers. Let me say this, we have 338 key-ready units 
right now. I said we have 338 key-ready that we could give to a 
family today.
    Mr. Cleaver. Okay. That is not the number that the 
Secretary gave us.
    Mr. Babers. And we gave the Congresswoman the addresses, I 
think Scott Keller gave you some information last night on some 
units.
    Mr. Cleaver. Okay, well if she has that, I am satisfied if 
she has the information.
    Mr. Babers. Right.
    Mr. Cleaver. Final question.
    Chairwoman Waters. Let me, if I may, if the gentleman will 
yield, so that everybody will understand. I requested 
information from HUD about where these units are, they did send 
it to me last night, and I am going to spend as many days as I 
can visiting and finding out about the units, and also Dr. 
Blakely is looking at some of this, and I will share it with 
the members. Thank you.
    Mr. Cleaver. My final question, we have $10 billion missing 
in Iraq and I am wondering what the situation is here. We get 
information that there are no bid contracts being let, that the 
local contractors are being excluded, that there is 
preferential treatment for contractors who are being brought in 
to do the work here. Do you have a Reader's Digest version of 
an answer?
    Mr. Jamieson. Sir, I do. I am very proud to say that there 
are no contracts down here in the Gulf now, no new contracts, 
that are no bid contracts. And all of those contracts are 
heavily--I will give you the statistics, but 8(a) contractors, 
locally based contractors. That did happen in the early days of 
this response, it was well-documented, but I am very proud of 
what we have been able to do since that time. And I would be 
happy to provide you the exact statistics.
    Mr. Cleaver. Yes, I would really like to have information 
on that, because the elected officials here do not seem to have 
that information. They are saying otherwise, as well as local 
business people.
    Mr. Jamieson. Congressman, I would be happy to provide it 
to you.
    Mr. Cleaver. Mr. Jamieson, do you have a rough estimate of 
the number of people who are still in trailers?
    Mr. Jamieson. In Louisiana, sir, there are some 60,000 
folks who are still in travel trailers.
    Mr. Cleaver. Did you say sixty?
    Mr. Jamieson. Yes, sir.
    Chairwoman Waters. What did he say? What was the number?
    Mr. Cleaver. 60,000.
    Chairwoman Waters. In trailers?
    Mr. Jamieson. Yes, ma'am.
    Chairwoman Waters. We need to hear this.
    Mr. Cleaver. What will happen to those individuals and 
families who are living in trailers, what is the plan?
    Mr. Jamieson. Well, sir, the plan is to try to get them 
into permanent housing as quickly as we can.
    Mr. Cleaver. I know, but what is the plan?
    Mr. Jamieson. Well, part--
    Chairwoman Waters. Okay, all right, okay. We are going to 
give him an opportunity as soon as we complete the questions of 
our next member and before we go to the next panel, we will 
give him an opportunity.
    With that, I would like to ask Representative Sires.
    Mr. Sires. Thank you, Madam Chairwoman.
    Mr. Babers, is that how you pronounce your name?
    Mr. Babers. Yes. I would just like to offer an observation. 
It seems to me that there is a lot of insensitivity from the 
Authority in trying to reach these people who want to come 
back. I do not sense an urgency, I do not sense the human hurt 
that people have gone through. So I would plead with you that 
this 25 percent of the people in these phone calls, there has 
to be a stronger effort. You know, I would implore you, because 
what I have seen here--and this is my first time in New 
Orleans--you know, I will never forget. So I just offer you 
that observation.
    I want to say that certainly, we are taking that very 
seriously. We were doing the calling and the surveying 
internally. We have brought in 15 people from around the 
country who are doing these calls all day. We are trying to 
improve on that system, but I do agree with you.
    Mr. Sires. But there seems to be almost a cavalier attitude 
when you address some of these things, and I do not think that 
helps the situation.
    Chairwoman Waters. Excuse me, one second, Congressman.
    This is very, very serious and we need to hear the response 
from HUD and the question is being raised in a very serious 
way. So please give us your undivided attention. Okay.
    Mr. Sires. Have you worked with the Mayor's office in 
trying to put together a plan to reach these people? You know, 
is there any work with the Housing Authority and the Mayor's 
office and the Council people and the Council president?
    Mr. Babers. I have met with the Mayor's office, I have met 
with--
    Mr. Sires. Or a tenants' council that you have or, you 
know.
    Mr. Babers. I beg your pardon?
    Mr. Sires. A tenants' council?
    Mr. Babers. Yes. As a matter of fact, we work very closely 
with the resident council. We have board meetings, we have a 
resident board relationship with two members of the resident 
council that we meet with monthly. So we are trying to do--and 
certainly I agree, we can improve on our efforts, but it is not 
a lack of not making communication or contact with the council, 
with the City. I have met with the Mayor in Houston, we have 
yet to go out to the various other cities. We had planned a 
tour and we had mentioned it to the chairwoman about going to 
Atlanta, Baton Rouge, Dallas, and Houston, and that meeting has 
not taken place yet, but certainly that is something that we 
have been planning to do, to do just what you are talking 
about.
    Mr. Sires. But this is precisely the point. The chairwoman 
asked you if there was a plan or there was a policy. Here we 
are 18 months later, you are still developing a policy.
    Mr. Babers. Sir--
    Mr. Sires. This is just an observation of a freshman 
Congressman.
    Mr. Babers. Sure. The thing is we just started our plan--
the Secretary made the announcement in June and we have been 
continuously trying to fine-tune our efforts, but I applaud 
what you are saying and certainly have no problem in terms of 
putting a plan together.
    Mr. Sires. Thank you. Do I have time for one more question?
    Chairwoman Waters. Yes.
    Mr. Sires. Mr. Leger, you testified before the full 
committee on February 6th and you discussed the problem your 
organization had in getting full funding for the Road Home 
Program. You explained how the difficulty resulted in delays in 
implementation. And you testified that 500 homeowners had 
received their awards the week of February 6th. Can you tell me 
how many more families have received their awards since then?
    Mr. Leger. Yes, sir. The latest numbers are as of today 
probably about 800 now. The commitment, the Governor spoke 
about the commitment of ICF, the contractor. Again, we are the 
policymaking entity, Louisiana Recovery Authority. You will 
have ICF before you. The commitment that they made was delivery 
of a total of 2600 by the end of this month, by the end of 
February, that is next Wednesday.
    Mr. Sires. So how many do you have total today?
    Mr. Leger. Eight hundred, approximately 800 or possibly 
more by today. So they have 1,500 or so to do.
    Mr. Sires. And how did you decide who gets first? You know, 
how did you decide--
    Mr. Leger. Who decides who gets--
    Mr. Sires. Yes, how do you award it first, who gets the 
award first?
    Mr. Leger. That is a process that is performed by ICF, the 
contractor. They have taken 100,000 applications, scheduled 
72,000 appointments, and they are working their way through the 
process. They claim that there have been a lot of 
administrative hold-ups including the verifications. And they 
have awarded--they have made awards to about 17,000 homeowners 
who are now going through closings.
    Chairwoman Waters. The gentleman's time has expired.
    Mr. Sires. Thank you, Madam Chairwoman.
    Chairwoman Waters. Thank you, very much.
    We are going to call up our third panel. I would like to 
make two deviations from our normal way of doing this. One is I 
am going to ask Mr. Jamieson to remain while the other panel is 
coming up because the question of how many people are still in 
trailers and what do you plan to do with them has not been 
answered and it is key to everything.
    And let me say to Mr. Leger that we really do respect you 
as a volunteer and the work that you are doing and the way that 
you have spent your time on this program. But the numbers about 
how many actually have been completed and how many have 
gotten--keeps changing on us and so we are going to put it on 
Ms. Isabel Reiff when she comes up and if I get a different 
number, then I am going to put somebody under oath on this one 
because we keep getting a different number.
    Chairwoman Waters. Okay. Thank you all, so very much.
    Mr. Jamieson, if you can answer Mr. Cleaver's question 
while the other panel is coming up. Mr. Jamieson, please.
    I need your attention. Mr. Jamieson is getting ready to 
tell us how many people are in FEMA trailers and what they are 
going to do about it. It is very important.
    Mr. Jamieson. And Congressman Cleaver, your question was 
about the folks who are in travel trailers. There are some 
60,000 travel trailers out there, and I do not want to 
underestimate that number. In an average family size of three 
folks, that is a lot of folks. Those are units, not families 
and people, so that number is significantly larger than that.
    We have had 23,000 units that have already been 
deactivated. Of the 60,000 units that are still there, 83 
percent of that number are on private sites. That means an 
individual homeowner is living in that unit while they are 
repairing their home. In addition to that--
    Chairwoman Waters. Would you please hold your response 
until we can get some quiet. This is very important. What is 
going to happen to the 60,000 people in the trailers? Okay, 
would you start again, Mr. Jamieson?
    Mr. Jamieson. Yes, Madam Chairwoman, I would be happy to.
    Of the 60,000 units, you know, that is units, not family 
members, it is a larger number than that. But 83 percent of 
that number are on private sites. That means they are rolled 
into a driveway while those folks are either with a friend or 
they are rebuilding their home. So the good news there is that 
because that percentage is so high on private sites versus a 
group site, they are going to be rebuilding their home. That 
other residual number that is there are the folks who were 
renting before the disaster. And in fact, and indeed the 
purpose of this hearing is, how are we going to provide 
permanent housing assistance for those folks who were renting 
before? And until we get landlords rebuilding, until the Road 
Home money starts to flow through, those folks will be in those 
travel units until permanent housing is available to them.
    Chairwoman Waters. All right, thank you, very, very much.
    I thank all of our last panel. Now we will start with our 
next panel: Mr. James H. Perry, Greater New Orleans Fair 
Housing Action Center; Mr. James R. Kelly, chief executive 
officer, Catholic Charities; Mr. Steve Bradberry, Association 
of Community Organizations for Reform Now; Dr. Sherece West, 
executive director, Louisiana Disaster Recovery Foundation; Ms. 
Gloria Williams, tenant; Ms. Donna Johnigan, tenant; Mr. Ben 
Dupuy, The Cypress Group; and Ms. Emelda Paul, president of 
Lafitte Resident Council.
    Okay, we will start with Mr. Perry.

 STATEMENT OF JAMES H. PERRY, GREATER NEW ORLEANS FAIR HOUSING 
                         ACTION CENTER

    Mr. Perry. Good afternoon. I was lucky enough to speak with 
you only a few weeks ago about many of the fair housing issues 
that the Gulf Coast has been facing. In particular today, I 
want to focus on two issues.
    The first that I want to make clear is some of the 
difficulties that citizens have had with the Housing Authority 
of New Orleans in the past, and this will make clear, I think, 
the reason that so many residents are so distrustful of the 
Housing Authority and of HUD.
    Second, I want to discuss CDBG funding and the requirement 
to affirmatively further under the CDBG funding program.
    With regard to HUD handling the public housing, I think it 
is very important to consider one particular case, and that is 
the case of the St. Thomas public housing development. St. 
Thomas was pitched as an opportunity to redevelop public 
housing and to make mixed income housing that would give 
opportunity to public housing residents in New Orleans. Public 
housing residents were told that 50 percent of the units would 
be reserved for public housing residents and another 30 percent 
would be reserved for low-income residents. So 80 percent of 
the units were supposed to be set aside for low-income and 
public housing residents. Instead, at the end of the day, 80 
percent of those units have gone to market rate residents. Only 
about 20 percent of those units have gone to low-income 
residents, 9 percent were set aside for public housing 
residents. Particularly, 122 units were set aside for public 
housing residents. Of those 122 units, 59, as of today, have 
been occupied by public housing residents. The remaining 63 
have yet to be occupied by public housing residents even though 
they are set aside for public housing residents.
    In fact, as I mentioned in my last testimony, after the 
storm, instead of public housing residents being able to move 
into these remaining units, regular citizens were moved into 
the units, citizens who did not have the public housing 
preference at St. Thomas. It has been extremely troublesome. 
This is the story of public housing in New Orleans.
    So when HUD or HANO comes in and says that they are going 
to redevelop housing and that we are going to get people back 
in public housing in only 2 years, it is very difficult, if not 
impossible, for us to believe it. There was a switcheroo. We 
were told 80 percent of the housing would be for low-income 
residents and instead only 20 percent or less have been 
reserved for public housing residents--a switcheroo.
    So I think that members should really consider each 
statement that HUD and HANO makes because I can tell you that 
citizens do not trust HUD or HANO and do not trust their 
positions.
    The second issue is about Community Development Block Grant 
funding. There have been a lot of calls in today's testimony 
about lessening the rules, and I had specific conversations 
with members of this very subcommittee where you said that you 
specifically made sure that the affirmatively furthering for 
housing components were not taken out of the Community 
Development Block Grant funding program.
    Well, I want to give you two examples. In one case, St. 
Bernard Parish, a parish that does receive Community 
Development Block Grant money, passed an ordinance. Its 
ordinance said that in order to rent a single family home in 
St. Bernard Parish, you had to be related to the owner of the 
property. In St. Bernard Parish, 93 percent of the people in 
the parish are white, which means that non-whites could not 
rent single family homes in the Parish.
    Our organization filed a lawsuit against the Parish and 
since then we have forced them to repeal the ordinance. But I 
would say that any parish or any county or any municipality 
that would pass such a heinous ordinance should not be able to 
receive Community Development Block Grant money in the future.
    I will give a second example, and that example is Jefferson 
Parish. Jefferson Parish has gone out of its way to make it 
nearly impossible for developers to use low-income tax credits 
for development within its borders, particularly in Terrytown 
in Jefferson Parish. They have even attempted to get the 
legislature to pass a law that would require their specific 
authority in order to use tax credits within their borders.
    This is an action that would specifically limit housing for 
low-income residents. In particular, Councilman Roberts, who 
has pushed this ordinance said--
    Chairwoman Waters. Would you wrap it up, please, your time 
has expired.
    Mr. Perry. Sure. I submitted my written comments and they 
go into these issues in great detail and I would urge that 
members consider strengthening the Community Development Block 
Grant terms for affirmatively furthering fair housing.
    Chairwoman Waters. Thank you, very much.
    Next, we have Mr. Kelly, chief executive officer, Catholic 
Charities.

STATEMENT OF JAMES R. KELLY, CHIEF EXECUTIVE OFFICER, CATHOLIC 
                           CHARITIES

    Mr. Kelly. I would like to thank Chairwoman Waters, Ranking 
Member Biggert, and the other members of the committee. I am 
Jim Kelly, CEO of Catholic Charities and CEO of a new 
nonprofit, Providence Community Housing.
    In the past 17 months, Catholic Charities has reached out 
and served over 700,000 people. We have delivered 70 million 
pounds of food and water, provided counseling and information 
to over half a million people, and through our emergency 
centers distributed millions of dollars in direct assistance to 
families in need.
    Shortly after the storm, a group of Catholic organizations, 
charities, and CDC's came together to see how we might use our 
joint talents, experience, and resources to help bring people 
of all races, income, and backgrounds home. Last April, 
Providence was formed with the mission of bringing home 20,000 
victims of Katrina by repairing, rebuilding, or developing 
7,000 homes and apartments. In partnership with Catholic 
Charities, we have recently--with the assistance of 9,000 
volunteers--gutted and cleaned out 800 homes and 800 
apartments. Now we are working to help repair the homes of 
these elderly.
    In partnership with Ujama CDC, Tulane Canal CDC, Mary Queen 
of Vietnam CDC, and a soon-to-be-formed Hispanic CDC, we are 
exploring any and all options to rebuild our housing stock, our 
homes, and our neighborhoods for our friends and our neighbors. 
We soon hope to refinance 902 apartments for elderly seniors. 
Insurance costs are 400 to 600 percent over pre-Katrina. We are 
hopeful that some type of special insurance reserve or some 
type of new income can be afforded us so that we can reach out 
and open these facilities for these seniors.
    Providence, with our partner Enterprise, is anxious to have 
all residents of public housing come home as soon as possible. 
We concur with today's elected officials about a phased 
redevelopment of public housing, and in particular Lafitte. I 
attended a pubic meeting recently where the historic value of 
these buildings was under discussion. Ms. Johnson, a member of 
the resident council, asked me who all the people were. I 
explained that most of them were preservationists. She said 
they did not represent her. Yes, she wanted to come home as 
soon as possible, but she also wanted new homes and apartments 
for her family and friends like the ones they had voted on in 
October at our week-long planning meeting. No large apartment 
buildings, but instead singles and shotgun doubles that were 
both apartments and homes. She wanted new apartments that were 
larger and had more bedrooms for the children.
    I explained that we had been advocating for a phased 
redevelopment where apartments would be reopened for all those 
who wanted to come home right now. Redevelopment of the new 
homes would then begin on the other unoccupied blocks. I 
reminded her that when complete, there would be a one-to-one 
replacement of all 900 units plus 600 new homes for working 
families and first time homeowners.
    I asked Ms. Johnson, based on her knowledge, how many 
families wanted to come home today. She thought between 300 and 
400. This is the same number that our resident outreach staff 
have estimated. In December, we raised $2.5 million to help 
former residents, both here and in other States, and will soon 
initiate counseling, direct assistance, job placement, and 
healthcare.
    A successful community will also need good schools, Head 
Start, senior centers, playgrounds, and parks, as well as 
literacy, job training, and women and minority small business 
development programs.
    We pray each day for a resolution to the public housing 
debate. We do not believe that it is an either/or proposition. 
We believe a phased redevelopment is not the middle ground, but 
rather the right ground. It allows all residents, who have 
suffered greatly in these 17 months, to come home today while 
also allowing the building of healthy, diverse vibrant 
communities where families and children's lives are filled with 
plenty of opportunities and a host of dreams.
    I will close by saying that Katrina has taught us many 
lessons, that to be successful will take a spirit of humility 
and collaboration. We have to focus on the victims of Katrina, 
and then God, who loves these families infinitely more than we 
do, will bless our efforts together.
    I do want to point out that you, Ms. Waters, have come from 
the beginning and have come time and time again. And we thank 
you for that. My prayers of gratitude to this committee for all 
you have done and will do for the good and great people of 
Louisiana.
    Chairwoman Waters. Thank you, very much.
    Mr. Bradberry.

   STATEMENT OF STEPHEN BRADBERRY, ASSOCIATION OF COMMUNITY 
                  ORGANIZATIONS FOR REFORM NOW

    Mr. Bradberry. Good afternoon.
    Chairwoman Waters. Good afternoon.
    Mr. Bradberry. Chairwoman Waters, Ranking Member Biggert, 
and members of the committee, I would like thank you all for 
the opportunity to testify here today. My name is Stephen 
Bradberry and I am the head organizer for Louisiana ACORN, the 
largest grassroots community based organization in the City of 
New Orleans, and the State of Louisiana, as well the United 
States of America. I am not only the only American individual 
to receive the Robert F. Kennedy Human Rights Award, but I am 
also a graduate of fair Dillard.
    I would like to point to two things that helped to set the 
stage, at least for everyone in the City of New Orleans, that 
occurred very shortly after the storm as we watched the 
recovery process unfold before our eyes.
    In the September 8th Wall Street Journal, Jim Reese, who 
was later appointed to the Bring New Orleans Back Commission to 
be the Chair of the Infrastructure Committee, was quoted as 
saying, coming out of a meeting in Dallas with the power elite, 
which included our Mayor, that the City of New Orleans would 
have to change demographically and economically or these 
families would be pulling their money out of the City of New 
Orleans. New Orleans, prior to the storm, was demographically 
primarily African-American and economically working class.
    On September 28th, in the Houston Chronicle, Alphonso 
Jackson, Secretary of HUD said that New Orleans will not be 
returning as black as it was before the storm and that HUD 
would not be putting monies into public housing the way it had 
prior to the storm.
    These two statements by these two gentlemen who are 
decision-makers non-par, have set the stage for all the 
confusion, the heartache, and the trauma that we have been 
dealing with ever since.
    In spite of that, days after the storm, ACORN found myself 
and two other people sending text messages to get people off of 
the road into homes in Texas, Georgia, Alabama, and 
Mississippi. In December, with a threat for us to march across 
the bridge into the Lower Ninth Ward, on December 1st, the 
Mayor finally opened up the Lower Ninth Ward, the only 
neighborhood that people were not allowed to go into up to that 
time. We began our ``No Bulldozing'' Campaign, which became 
known nationwide and others followed with their ``We're Back'' 
signs. We also initiated the first gutting program in the City, 
wrapping up about 2,000 homes to date.
    In February 2006, President Bush said he would not be 
sending any more money to the Gulf region for recovery--that 
the Community Development Block Grant monies he had sent were 
enough. A week later, 500 people in red shirts like this one 
here chanting ``ACORN'' showed up on his doorstep. The week 
after that, $19 billion more was allocated to the Gulf region.
    In May of that same year, the City Council passed an 
ordinance that said that the first anniversary of Hurricane 
Katrina, August 29th, would be the deadline by which people 
would have to gut their homes or risk losing them. They had not 
put up a single penny to assist any of the gutting 
organizations, not the ones by ACORN, not the ones by Catholic 
Charities, not the ones by Common Ground, not the ones by any 
organization in the City of New Orleans. And just so that you 
know, the Mayor just gave out $15 million to private 
corporations to gut houses, although all of us used volunteers 
to leverage the private funds that we have been receiving.
    Immediately following August 29th, people had to get in the 
streets again to fight to have water certified in the Lower 
Ninth Ward because people were not able to get FEMA trailers or 
clean out their properties because water was being afforded 
them. And you all came down today to see the first two houses 
that were constructed in that very same neighborhood.
    I would like to wrap up with a few recommendations:
    Place a moratorium on imminent domain;
    Preserve the existing housing stock;
    Restore HUD's public housing;
    Ensure affordability of replacement housing;
    Rein in the insurance companies;
    Provide more CDBG funds;
    Provide adequate oversight of State disbursement of the 
Road Home funds; and
    Include community groups in emergency preparedness plans 
and mitigation.
    Thank you, very much.
    [The prepared statement of Mr. Bradberry can be found on 
page 95 of the appendix.]
    Chairwoman Waters. Dr. Sherece West.

   STATEMENT OF DR. SHERECE Y. WEST, CEO LOUISIANA DISASTER 
                      RECOVERY FOUNDATION

    Ms. West. Chairwoman Waters, distinguished members, and 
staff and guests of the Subcommittee on Housing and Community 
Opportunity, thank you for coming to Louisiana and for your 
continued interest in the families and communities damaged or 
destroyed by Hurricane Katrina.
    I am Sherece West, CEO of the Louisiana Disaster Recovery 
Foundation, Louisiana's fund for Louisiana's people. By way of 
background, the Louisiana Disaster Recovery Foundation was 
established in the aftermath of Hurricanes Rita and Katrina. We 
provide resources for relief, recovery, and betterment to 
nonprofit organizations throughout the State that provide 
services and support to displaced individuals, families, and 
organizations that work in hurricane-damaged communities.
    Our support comes from the generosity of individuals, 
corporations, and foundations, including the Bush-Clinton 
Katrina Fund, and others from across the United States and 
around the world. To date, we have awarded $14.7 million to 
nonprofit organizations working Louisiana's recovery. I am 
proud to say that ACORN and ACORN Housing Corporation are among 
our grantees.
    We are not just a grant-making organization. We are a vital 
resource in the State's recovery effort.
    My written testimony speaks to, and previous witnesses 
spoke about, why there is little to no progress in restoring 
affordable housing and the obstacles to the success of 
restoring affordable housing. I will discuss how the affordable 
housing dilemma can be resolved and the role of LDRF in 
addressing the affordable housing crisis.
    At the Federal level, the housing dilemma can be resolved 
through Congressional intervention. We appreciate and support 
Representative Waters' proposed Memorandum of Understanding 
with HUD to guarantee the right of return of displaced persons 
and one-to-one housing replacement--very important to us.
    We appreciate and support Representative Jefferson's 
proposed rehabilitation and reoccupancy of public housing 
developments, not in major disrepair and Section 8 voucher 
portability.
    We appreciate and support Representative Frank's proposed 
National Affordable Housing Trust Fund and Representative 
Clyburn's amendment of the Stafford Act.
    At the State level, the housing dilemma can be resolved 
through the Governor and the State legislature's promotion of 
innovative housing policy and funding through enactment of a 
State housing trust fund with sizable funding from the State 
surplus, enactment of a low-income tax credit, enactment of 
additional piggyback funds for affordable housing and enactment 
of provision of soft second loans for any household below 80 
percent of median income.
    At the local level, municipal government has an opportunity 
to advance creative land assemblage and resettlement of 
homeowners and renters.
    LDRF supports the New Orleans Road Home Fast Track Program 
as described earlier by the Mayor, expansion of the City's 
programs for disposition of property, gutting, remediation, and 
adjudicated properties, and we especially support flexible use 
policies that promote inclusionary zoning and land trust 
authority.
    These opportunities will need and require flexible Federal 
funding streams from HUD and we support the City's efforts.
    What is the role of LDRF in addressing the affordable 
housing crisis? The role or the Louisiana Disaster Recovery 
Foundation and our philanthropic partners is to promote and 
fund affordable housing strategies.
    We are embarking on a Housing Recovery and Development 
Initiative and Equity and Inclusion Campaign. The Housing 
Recovery and Development Initiative is a place-based strategy 
to adopt a number of neighborhoods in New Orleans and invest 
$7- to $11 million dollars in that Initiative. We will leverage 
additional resources and partner with nonprofit housing 
developers, housing intermediaries, community development 
corporations and local residents.
    Second, with my testimony today, the Foundation is 
embarking on an Equity and Inclusion Campaign that will build a 
coalition of elected and appointed officials, policymakers, 
community activists, faith-based leaders, and others to promote 
affordable housing and community development.
    As part of our leadership through social section, we are 
sponsoring a statewide legislative affordable housing convening 
for our grantees and the Louisiana Housing Alliance on March 
22nd and 23rd in Baton Rouge.
    On March 30th, we will serve as co-sponsor and host of a 
right of return forum convened by the Congressional Black 
Caucus and the Congressional Black Caucus Foundation, also in 
Baton Rouge.
    We will convene a forum on policies of equity and inclusion 
hosted by the Brookings Institute in June, and in September we 
will conduct an equity and inclusion issues forum as part of 
the Congressional Black Caucus legislative conference.
    We invite all of you in the subcommittee and those here to 
participate and work with us on those convenings.
    In the spirit of non-partisanship, we have met with the 
White House to promote our Louisiana faith-based leaders who 
remain champions of the recovery.
    As part of my testimony for the record, I submit to you a 
set of housing policy papers and other papers prepared in 
partnership with Rutgers University's Initiative for Regional 
and Community Transformation. We lead with policy and we follow 
with social action.
    I am proud to represent the Louisiana Disaster Recovery 
Foundation and I thank you for providing me with the 
opportunity to speak today.
    [The prepared statement of Dr. West can be found on page 
191 of the appendix.]
    Chairwoman Waters. Thank you, very much.
    Now we will hear from Ms. Gloria Williams, who is a tenant.

              STATEMENT OF GLORIA WILLIAMS, TENANT

    Ms. Williams. Chairwoman Waters, and members of the 
committee, you will hear me say ``our'' because I am a twin and 
everything we do, we do it together. My name is Gloria 
Williams, her name is Bobbie Jennings, and we are twin sisters.
    Prior to Hurricane Katrina, we were residents of public 
housing in C.J. Peete. I lived there for 24 years, and she 
lived there for 37 years. Respectfully, we are here today 
asking all of you to help us come back home.
    Since Hurricane Katrina, we have been displaced six times. 
We have vouchers for over $1,100, and our utility bills run 
$400 a month. I am going to tell you my income; I cannot tell 
you hers. My income is $667 a month, so I cannot afford to live 
outside of public housing.
    At C.J. Peete, we lived next door to each other. Our units 
did not get any water damage. As a matter of fact, no units in 
C.J. Peete had any water damage; HUD and HANO made that up. We 
did not get any water. The damage that was done to our home was 
done by looters after our homes were left unlocked. Everything 
was taken from us, all the tenants of C.J. Peete, and I know I 
can speak for C.J. Peete because my sister and I went in and 
cleaned up units.
    HUD and HANO claimed that it would take them 3 years--which 
today I heard 2 years--to do one unit. It took us--me and my 
sister--4 hours to do one unit.
    We do not have--HUD cut the water off--HUD or HANO cut the 
water off to keep us out. They cut the lights off to keep us 
out. We went in and we cleaned up 15 units. It took us 2 days 
to clean up 15 units until they put a sign on there that we 
were going to lose our vouchers. I have a family, and my sister 
has a family, and we cannot afford to live on the streets.
    We went to Baker, Louisiana, to visit some of our friends 
because we wanted to know if they wanted to come home, and we 
cleaned up their units. It is a concentration camp, Congress. 
You all ought to see it. I heard FEMA talking about how they 
have 60,000 or 30,000; they have 600 trailers in Baker. They 
are close together; it is a cow pasture. A horse fly bit a 
friend of mine, and she had to travel all the way to New 
Orleans to get doctor's care, because they were 30 miles from a 
doctor. They are 30 miles from school, they are 30 miles from a 
grocery store, and they have one bus to take them to Wal-Mart 
once a month. Come on now, there is no reason for us to have to 
to live like that. We can go home. HUD's plan is about keeping 
us from home for a long time, probably until we die.
    We recently visited C.J. Peete friends at the camp that I 
told you about. I am not reading; I am just not a reader.
    Congresswoman Waters, we are asking you all today to stop 
HUD from awarding any contracts for redevelopment until the 
people come back and participate.
    Thank you.
    Chairwoman Waters. Thank you.
    Ms. Johnigan.

              STATEMENT OF DONNA JOHNIGAN, TENANT

    Ms. Johnigan. Welcome to New Orleans, Chairwoman Waters, 
and members of the committee. First of all, I want to thank you 
for not just coming to listen to the people who make the 
decisions, but also the people like us who are directly 
affected by the decisions that everybody is making.
    I lived in B.W. Cooper for 30 years, and I have been a part 
of the resident council. I lost one son to violence, one to 
incarceration, and I am still fighting. I know what it feels 
like to lose a child. I am a 16-year survivor of breast cancer, 
so I advocate for American women on knowing about breast 
cancer.
    But when we left New Orleans for Hurricane Katrina, I was 
in the Superdome. I do not care how much money you put into the 
Superdome, I will never revisit it. If you could put that much 
money into the Superdome, you could put that much money in 
putting people back into homes, and into educating our 
children.
    When we came back to B.W. Cooper, the Housing Authority did 
not help us. It took my maintenance director, Mr. West, and 
three of his people to call my executive director, Darrell 
Williams, and the board of directors, five of us women who went 
through training to become resident management of our housing 
development. We came back, we started the assessment in B.W. 
Cooper, and we started removing debris, and doing assessments 
on our own apartments. I do not know if you saw the pictures; I 
still have the ``before'' and ``after'' pictures. This was work 
done by our maintenance people.
    We came in, an then HANO came in and stopped the work, but 
when they saw that we would not stop, it was us who started. It 
took us, as residents, because we were responsible.
    I heard you ask, how do you track your residents? We went 
to every city where residents were, every shelter, every FEMA 
office, every hotel, everywhere residents were, and we know 
where our residents are, and I can show it to you, because we 
have it in black and white. We know where they are because we 
tracked them.
    Every other week for a year, myself and my board and my 
executive director traveled from Houston to New Orleans doing 
assessments on our development. We kept our residents informed 
about what was going on. We went to the HANO meetings.
    I heard you ask if HANO did anything else to help with 
personal items, replacing things. Not only did the storm 
destroy us, but vandalism came in and destroyed 80 percent 
after the storm and took away personal things. What more could 
we do? Nobody stood up for us. The resident leaders, not just 
in Cooper, in St. Bernard, Lafitte, C.J. Peete, Iberville, and 
Gus, we found out where our residents are. We do our own 
tracking. We know what it is to take care of our people because 
we have been doing it for so long.
    All we ever asked the Housing Authority for, or HUD, or 
anybody, was to give us the resources, the tools, and the 
funding, and let us take care of ourselves, because we have 
always done that.
    We had approximately 1,078 units occupied. We had a good 
after school program, and approximately 78 to 80 percent of the 
residents worked. All of us worked, even if it was at Burger 
King or McDonald's.
    We taught our residents how to deal with what happened when 
welfare went into its 5-year lifetime term and after that you 
were not able to go back on welfare.
    Our job is as a liaison between a social service agency or 
anybody who makes decisions on our lives to be a part of it. 
Everybody does not have to make a decision on what we need to 
do. When we get angry as a people of color, and go to the 
schools, we are rioters. When other people go to the schools 
because things are not right for their children, they are 
concerned parents. What is the difference?
    And everybody wants to say it is not racism. It is not--
well, look at the color of the people you see every day, who 
are begging to come back home, who need to be back home. 
Because it is a project, look at the violence in the City now. 
The projects are not open.
    Do they arrest them and ask them whether they are from 
public housing? Because it is not there.
    This is what I am saying. You talk about the revolving 
door. Has anybody taken a step to hire an ex-offender? Has 
anybody ever talked about giving them a job? No. But you know 
who picks them up? The drug dealers; the drug dealers are the 
employers and the entrepreneurs, because nobody else gives them 
a chance.
    Chairwoman Waters. Would you wrap it up for me, please, Ms. 
Johnigan?
    Ms. Johnigan. I sure will. But what I am saying is if 
anybody is going to do anything for us, then ask us what you 
can do to help us. I thought when you helped somebody--say I am 
a cripple and I drop my crutches--that you help me, you hand me 
my crutches to help me stand; you do not knock my crutches out 
of the way so that I cannot stand up on my own.
    Chairwoman Waters. Thank you very, very much.
    Next, we have Mr. Ben Dupuy--how do you pronounce your last 
name?
    Mr. Dupuy. Dupuy.
    Chairwoman Waters. Dupuy. The Cypress Group.

  STATEMENT OF BEN DUPUY, EXECUTIVE DIRECTOR, CYPRESS COTTAGE 
                            PARTNERS

    Mr. Dupuy. Thank you. I am Ben Dupuy, I am a native New 
Orleanian, and I am the executive director of Cypress Cottage 
Partners. I would like to thank the committee for conducting 
this hearing. I would also like to thank Governor Blanco for 
the LRA for their support for the project my testimony 
describes.
    The shortcomings of FEMA's emergency housing options 
allowed for under current law are well known. The Inspector 
General of the Department of Homeland Security has reported 
that some of FEMA's group sites on the Gulf Coast will be 
operating for 5 or more years and are far from ideal living 
conditions. The cost of a FEMA trailer is at least $60,000 for 
an 18-month period. As of the start of this year, there were 
70,000 trailers in use in Louisiana. That amounts to a cost of 
$4.3 billion in this State alone.
    The combination of the unprecedented demand for disaster 
recovery housing and the shortcomings of existing options 
available prompted Congress last year to appropriate $400 
million to FEMA for the Alternative Housing Pilot Program to: 
(1) identify new solutions for disaster recovery housing; and 
(2) transition displaced families into housing more appropriate 
for long-term use. The legislation included a one-time waiver 
of the Stafford Act so as to make it possible for homes built 
under this program to be occupied for longer than 18 months. 
Louisiana will receive $74 million. It is noteworthy that 
Mississippi received $281 million despite the fact that 
Louisiana had a far greater number of homes destroyed. The 
selected proposal for Louisiana was the Cypress Cottage 
Partners solution to build homes that transition from temporary 
housing to permanent communities or what we call temp to perm.
    The homes we will build are affordable, permanent, quickly 
constructed, appropriate for various sizes of families, able to 
withstand winds of up to 140 miles an hour, and easily 
adaptable to local zoning, building codes, and architectural 
styles.
    We will build several models of single family homes, 
ranging in size from two to three bedrooms. We will also build 
two models of single-story, multi-family buildings, with units 
ranging from one to four bedrooms.
    Our homes will carry a higher initial cost than trailers, 
however, their total life cycle cost will certainly be lower, 
given that the State of Louisiana will own a permanent and 
appreciating asset at the end of the 2-year pilot program. Most 
importantly, our homes will enable displaced citizens to move 
more quickly into housing appropriate for long-term use. If all 
of the trailers in group sites in the New Orleans area were 
instead temp-to-perm homes, the City's affordable housing 
crisis likely would not be as severe as it is today.
    We plan to build our homes at four sites in southern 
Louisiana, each of which has formally expressed its support. In 
New Orleans, we plan to build homes in the Treme neighborhood. 
The State of Louisiana, which is currently developing its 
guidelines for this program, has indicated a willingness to 
prioritize former residents of public housing for residence in 
our homes in the Treme neighborhood.
    204,000 homes in Louisiana experienced major or severe 
damage from Katrina and Rita and there is a much greater demand 
for permanent homes like the ones we are building than can be 
delivered through Louisiana's $74 million grant. Several 
solutions exist. First, the State could use proceeds from the 
sale of these homes to create a revolving fund that could be 
used to build additional units. Second, Congress could dedicate 
part of the funds from the proposed GSE Affordable Housing 
Program to the appropriate agencies in Louisiana and 
Mississippi to build additional units. Third, as Governor 
Blanco and members of the Louisiana Congressional delegation 
have advocated, Congress could appropriate additional funds to 
a Federal agency for this purpose. Finally, Congress should 
encourage FEMA and OMB to write the regulations and policies 
necessary to implement Congressman Richard Baker's important 
provision in the DHS Fiscal Year 2007 appropriations bill that 
amends the Stafford Act to enable the Federal Government to 
build permanent housing in the wake of disasters.
    To respond to future disaster situations, the Federal 
Government should have among its available solutions the 
ability to deploy temp-to-perm housing that enables displaced 
citizens to return quickly to their communities and that 
prevents the prolonged purgatory of life in temporary group 
sites.
    Thank you for the opportunity to testify today.
    [The prepared statement of Mr. Dupuy can be found on page 
101 of the appendix.]
    Chairwoman Waters. Thank you, very much.
    Our next witness is Ms. Emelda Paul.

 STATEMENT OF EMELDA PAUL, PRESIDENT, LAFITTE RESIDENT COUNCIL

    Ms. Paul. Chairwoman Maxine Waters, thank you for the 
opportunity to speak to you today. My name is Emelda Paul, and 
I am a 30-year resident of Lafitte, as well as the president of 
the Lafitte Resident Council.
    Shortly after the announcement in August by Secretary 
Jackson, I was contacted by Providence, who met with the 
leaders of the Lafitte Resident Council and explained their 
role with Lafitte.
    We asked a lot of questions because we wanted to make sure 
that they were doing the right thing. Providence wanted to know 
our views and how we felt about the things that were happening 
with Lafitte. They wanted to know what Lafitte was like 20 
years ago, and what we would like to see happen now, and what 
kind of apartments we wanted to see.
    Providence told us that they would make sure that every 
resident could come home. Every unit that was taken down would 
be replaced with a unit that would be affordable to the 
residents. And most importantly, that they would work with the 
residents in planning, not against them.
    I was skeptical at first. But they have kept their word on 
their promise ever since. We have been involved in every step 
of the process.
    There was a week-long workshop where they brought in all 
the local Lafitte residents in New Orleans and one in Houston. 
As the week went on, I liked what I heard. We were asked what 
we wanted to see and what we wanted to preserve and what kind 
of housing we wanted to live in. I was impressed with the 
presentation. A lot of the residents who were there agreed with 
the things that we saw. And most importantly, the plan that 
Providence had produced reflected the things that we said we 
wanted to see.
    I, along with some of the residents of Lafitte, worked with 
ACT to do a survey of Lafitte residents who were living in 
different States. We gave them an update on what was happening 
and listened to their questions and concerns, and then 
Providence developed newsletters that responded to the things 
we were hearing from the residents. Providence did not have 
their own agenda; they listened to what we wanted. In our 
survey, we asked how many bedrooms they would need if they came 
back, what kind of help they would need when they come back, 
childcare, mental health, and counseling.
    I know there are a lot of people out there who need 
counseling, I am not one of them, but I know those who do.
    Chairwoman Waters. Please allow Ms. Paul to give her 
testimony.
    Ms. Paul. When I see and hear some of these people who are 
fighting the redevelopment, I ask myself who the heck are these 
people and where were they when we really needed them? All of a 
sudden, they are crawling out of the woodwork saying they want 
the historic buildings.
    Chairwoman Waters. Please, please, please, you must let her 
talk.
    Ms. Paul. They are talking about bricks and mortar. We are 
talking about people's lives.
    Chairwoman Waters. Would you hold on one moment, Ms. Paul?
    Ms. Paul. Yes.
    Chairwoman Waters. Now you may not agree with her 
testimony, but we must allow her to give her testimony and then 
there will be questions, so please cooperate with us.
    Yes, I know, please, please--please. Listen, we have done a 
great job today, we are learning a lot, let us keep--
    Ms. Paul. We are the ones who have to live under these 
conditions. I cannot say for sure how many, but I think there 
are a lot of people who, like me, want things better than they 
have now.
    I have been back to Lafitte and from what I have seen, I do 
not want to go back there like that. I do not want to live like 
that any more. I am living in a senior village over at Fischer, 
and it is nice, clean, and safe. When I go for my appointment 
at Fischer and see my old apartment in Lafitte, it is 
depressing. Beyond the mold and the looting, it is also not 
safe.
    Those who say the buildings would be preserved are looking 
at the bricks and mortar, but they are not looking at the 
outside. When you get up close, you see that the ground is 
sinking. I had mold in my bedroom way before Katrina and now I 
have mold growing up the walls on both sides. If people are 
going to come back, I want to see them coming back to something 
decent, something healthy. I took photos of the development 
that shows what I saw from the window of my apartment after 
Katrina.
    People are under a lot of stress and want to come home. 
Something should be done as soon as possible to get the 
residents back and start working on new Lafitte. Our residents 
want to come home and they want a new apartment and new homes. 
They want something better for their families. So why can we 
not allow those who want to come home to come now and also take 
down and rebuild part of the sites in the meantime. While we 
are sitting here bickering about what should be done, the 
people are the ones who are suffering. In fact, some of them 
are dying. I lost a sister. I think there are about 300 to 350 
individual families who want to come back now. And probably 100 
or 200 would want to come back in a couple of years, because 
they are happy where they are right now. They have a decent 
apartment, their children are in school, and they have jobs and 
medical care where they are. We have to give them something to 
come back to first, something for the kids to do, schools and 
medical.
    I like the idea of phasing. I know that more and more 
people are excited about it. People can come home to apartments 
temporarily and participate in the planning for the 
redevelopment.
    Chairwoman Waters. Ms. Paul, could you please wrap it up?
    Ms. Paul. Yes, okay.
    Ms. Paul. We want new apartments for our children. In other 
words, what we want is a new Jerusalem now.
    Chairwoman Waters. Your time has expired and we will now go 
to our questions.
    Thank you very much. I will recognize myself for 5 minutes. 
I am going to ask the members to be very concise in their 
questions when their time comes. They have been very, very 
descriptive in their testimony.
    And so I want to just ask one question, and I want to ask 
this question of the residents. If there was a policy that 
returned everybody that wanted to return with the kind of 
support that I alluded to--relocation and getting out of the 
leases and some support for getting household goods back--and 
we got everybody back in, do you think that you could engage--
and if there was a moratorium on dismantling or tearing down 
any units, do you think that as residents and as a resident 
council, you could engage with HUD and the City and talk about 
the future and give input and take a look at recommendations 
and make decisions that would be in the best interest of 
everybody. Would you do that?
    Ms. Johnigan. But will they listen? Will HUD, will HANO, 
will anybody listen?
    Chairwoman Waters. So let me understand. Basically what you 
are saying, Ms. Johnigan, and maybe what you are saying as 
well, Ms. Paul, is that we have to guarantee that everybody who 
wants to come back can come back. Do we all agree on that? Do 
we agree that redevelopment is not out of the question; it is 
just a matter of how it is done?
    Ms. Johnigan. It is how it is done.
    Chairwoman Waters. Do we agree that if people could get 
together and get some guarantees because of the fear that this 
development could not be one-on-one replacement, could exclude 
folks and may not get done for years like Desiree was done, 
that if all of these issues could be dealt with, there is a 
possibility that there could be a meeting of the minds about 
the future?
    Okay, thank you very much. That is all for me. We will go 
on now and I will recognize Mrs. Biggert.
    Mrs. Biggert. Thank you.
    Mr. Kelly, could you explain exactly how you propose 
phasing the redevelopment of Lafitte? How many units, and what 
is the specific timetable?
    Mr. Kelly. The number of units on the phase-in, Ms. 
Biggert, would depend on how many residents want to come home. 
So I think the first thing to do would be to perform a new 
survey to formally survey the residents, for example, of 
Lafitte, to find out how many want to come back to Lafitte or 
how many might want to come back to New Orleans. That would be 
the first step. From there, then you could move forward on 
knowing how many apartments that HANO and HUD would need to 
repair so the people could get back in them--repair and clean, 
not rehab or anything, just clean and repair.
    Mrs. Biggert. Just repair them.
    Mr. Kelly. Clean and repair so people could get in right 
away.
    Mrs. Biggert. And about how many would that be?
    Mr. Kelly. The question out there is, is it 300, is it 400? 
We hear different numbers. I think you would have to do a 
formal survey.
    Mrs. Biggert. Thank you.
    Mr. Kelly. And I think one of the things you could do is 
you could also do redevelopment off-site at the same time so 
that people would have an option at looking at homes off-site, 
as well.
    Chairwoman Waters. Right now we want to talk about the 
developments. Mr. Jefferson.
    Mr. Jefferson. Thank you, Madam Chairwoman.
    If I could, I would like to recognize Dr. Millie Charles, 
is she out here? Ms. Waters, she is a long-standing dean of the 
School of Social Work at Dillard University, and she has done 
so much work over the years with the Housing Authority. Is she 
still there? She has been ill, under the weather. It is 
wonderful to see her out. There she is. Thank you for 
permitting me to do that.
    I just want to ask one question of Mr. Kelly. I want to 
commend the tenants and all of the folks who have testified. 
This has been wonderful testimony and very helpful.
    I want to ask you a question. I wish I had asked someone 
else, but my time ran out. The problem seems to be that 
decisions are being made for people when they are not in town.
    And the question is, no matter how beautiful these plans 
may be, do you think it is right for these decisions to be made 
with people not here able to participate? Or should we make 
that an essential part of building this case of trust?
    Mr. Kelly. No argument from me. We have gone to Houston; we 
have brought in residents from Baton Rouge; we have tried to 
reach out. We have had residents survey other residents. Is it 
ever enough? Absolutely not.
    Mr. Jefferson. I understand, and the chairwoman has it 
right. If we get our people back home first so that they can 
participate and be a part of the decisionmaking, then we can go 
ahead and make these plans for development and improvement.
    Chairwoman Waters. Mr. Neugebauer.
    Mr. Neugebauer. Madam Chairwoman, I do not have any 
questions for these witnesses.
    Chairwoman Waters. Okay. Mr. Green.
    Mr. Green. Thank you, Madam Chairwoman, one quick question 
for our ACORN representative. Would you just quickly please 
tell us about the two projects that we saw today, if you did 
not mention it in your testimony, the two houses that were 
constructed. I would like to know how much it cost to construct 
those units, please, and how long it took. And when you are up 
and running, how long will it take? Just quickly, please.
    And I will yield back, Madam Chairwoman.
    Mr. Bradberry. The two houses that were developed down on 
Dellary Street were a partnership with Louisiana State 
University with a grant from Housing and Urban Development that 
trained gentlemen from Bethany Colony South and Covenant House 
in how to do construction work. Those houses were funded 
primarily, construction was funded by Countrywide Bank in the 
form of grants to go to two Lower Ninth Ward residents. I think 
it is around $84,000 per property for those two properties and 
it was an extensive program, including the training and all, I 
think it took maybe about 9 months for that.
    Mr. Green. We may have missed that number. Was that $84,000 
per unit?
    Mr. Bradberry. Yes.
    Mr. Green. Thank you.
    Mr. Bradberry. If we were to sell them.
    Mr. Green. I yield back.
    Chairwoman Waters. Thank you very much. Did Mr. Cleaver 
leave? Mr. Sires.
    Mr. Sires. I do not have a question, but I do have a 
compliment to ACORN on your advocacy for affordable housing. In 
my State, you are a force for affordable housing and I 
compliment you. Keep up the good work and we are here to work 
with you.
    Chairwoman Waters. We would like to thank you very, very 
much and we are going to call up our next panel now. Thank you 
so much.
    We are now seating the fourth panel. Each will be 
recognized for 5 minutes for an opening statement. To the 
panel, please take your seats and let us ask everyone else to 
take a seat.
    Chairwoman Waters. We need order please. Please take your 
seats. This panel is made up of Ms. Isabel Reiff, senior vice 
president, ICF International, Inc.; Mr. Mark Rodi, president-
elect of the Louisiana Realtors Association; Ms. Tracie L. 
Washington, director, NAACP Gulf Coast Advocacy Center; and Mr. 
Paul R. Taylor, president, SRP Development.
    Ladies and gentlemen, if you would give me your attention, 
there is going to be some very important information that we 
are about to hear. It is very important that we keep down the 
noise so that we can hear our panelists.
    We are going to start with Ms. Isabel Reiff, senior vice 
president of ICF International, Inc.

     STATEMENT OF ISABEL REIFF, SENIOR VICE PRESIDENT, ICF 
                      INTERNATIONAL, INC.

    Ms. Reiff. Good afternoon, Chairwoman Waters, and members 
of the subcommittee. I am Isabel Reiff, the senior vice 
president of ICF International, and the deputy program manager 
for the Louisiana Road Home Program. I am pleased to 
participate in today's hearing and will discuss ICF's role in 
the implementation of the program.
    ICF was founded as the Inner City Fund in 1969 to provide 
analysis and advice on public policy issues facing inner city 
communities.
    Chairwoman Waters. One moment, please, Ms. Reiff, one 
moment. Ladies and gentlemen, it is very important for you to 
cooperate with us. We cannot hear up here and we need this 
information in order to go back and make good public policy. So 
if you will help us out, we would appreciate it very much. 
Thank you. Let's start again.
    Ms. Reiff. Okay. As I said, I am Isabel Reiff, and I am the 
senior vice president with ICF International, and the deputy 
program manager for the Louisiana Road Home Program. I am 
pleased to participate in today's hearing. I will discuss ICF's 
role in the implementation of this program.
    ICF was founded as the Inner City Fund in 1969 to provide 
analysis and advice on public policy issues facing inner city 
communities across the United States. We bring decades of 
experience with the Community Development Block Grant Program 
and we have also been involved with major housing disaster 
recovery projects and emergency response related work.
    As many have said, the level of devastation caused by 
Hurricanes Katrina and Rita is unparalleled.
    Chairwoman Waters. Please. We really do need to get the 
information. The hour is getting late and it is very important. 
And I want to ask my witnesses to get to the meat of their 
testimony. We would love to hear about your background, but we 
want to hear about Road Home.
    Ms. Reiff. Okay. We signed, ICF signed, a 3-year contract 
with the State of Louisiana in June of 2006. We have been under 
contract since June and we have been in the operational phase 
of this program for 4\1/2\ months.
    During the initial pilot phase of this program, we 
established 10 housing assistance centers, we hired and trained 
2,000 staff, we developed the Road Home application, and we 
began the planning of the rental program.
    In October, with the beginning of the implementation phase, 
we began to accept applications and move homeowners through the 
process that culminates in the disbursement of funds. During 
this implementation phase, we have also opened a center in 
Houston, Texas, and we are deploying mobile units to Atlanta, 
Georgia, and Dallas, Texas, to also reach out to homeowners.
    Originally, we planned to complete the process of accepting 
applications, calculating awards, and closing on all of these 
transactions by the end of 2008. We now project that much of 
this work will be done and most closings held by the end of 
this calendar year, a year earlier than the original schedule.
    During the 4 months of this operational phase, we have, as 
of February 18th, received over 105,000 applications. We have 
scheduled, or held, actually, appointments with nearly 80,000 
applicants; we have visited over 65,000 homes to conduct home 
evaluations; and we have committed in excess of $3 billion in 
funding for close to 40,000 applicants.
    Through the end of February, we expect to close on 
approximately 2,600 applicants. In the month of February alone, 
we will be closing on 6 times the number of applicants in the 
whole period of the program prior to that. And we have every 
expectation that the numbers will increase significantly and 
appreciably as people move through the process.
    Chairwoman Waters. We are going to have to ask you to wrap 
it up and we will get back to you with questions.
    Ms. Reiff. Okay.
    [The prepared statement of Ms. Reiff can be found on page 
159 of the appendix.]
    Chairwoman Waters. We will move on to our next person on 
the panel, Ms. Washington.

 STATEMENT OF TRACIE L. WASHINGTON, DIRECTOR, NAACP GULF COAST 
                        ADVOCACY CENTER

    Ms. Washington. Good afternoon, Chairwoman Waters, and 
members of the Housing and Community Opportunity Subcommittee, 
and thank you for allowing me to testify this afternoon. I know 
you want to get to the meat of what we have to say and so I am 
going to try to work around what I had prepared.
    We are here today in a City that is known for its ability 
to have a good time, but I am here today because this 
subcommittee really offers the last best chance to bring some 
discipline and some sense to what I can only refer to as 
bureaucrats gone wild.
    You have the power and the moral responsibility and 
fortitude to solve New Orleans's affordable housing crisis, and 
we need you to step in because those who have been charged with 
this responsibility have failed miserably. Now you know the 
problems. You have been to public housing and you have heard, I 
am sure, about the problems with Road Home.
    I want to kind of answer the charge. You asked us to 
provide you with some proposed solutions, and I want to talk to 
you today about some of those solutions.
    First, let me talk about public housing, and I am going to 
get to solutions. I want to dispel a couple of myths that you 
heard today. Public housing residents pay rent. I want 
everybody in this room to understand that if you have an 
income, and you live in public housing, 33 percent of your 
aggregate income goes to pay--is part of your rent calculation.
    Public housing residents work. We live in a very poor City, 
but 86 percent of my clients, public housing residents, work at 
least one job, many of them work two or three jobs, just to 
move from being abjectly poor to just poor.
    Public housing residents in the public housing communities 
cannot be seen as the breeding ground for crime. We had a real 
interesting e-mail from one of our city council members, a 
breeding ground for crime. Four murders in the last 24 hours 
during Mardi Gras, not a public housing development big four 
open. The bricks did not shoot anybody, mortar and concrete do 
not shoot anybody.
    So let us stop the madness about, you know, the public 
housing buildings commit the crimes.
    Next thing, number two, let us debunk some of these fairy 
tales that you heard today from some of the people who 
testified. Public housing residents do not ``want'' to return 
home, they are here. They might live with cousin Ray Ray, Aunt 
Sis, or whomever, but they are here.
    Number three, that are 2,000 units open right now. 
Representative Cleaver, you are from the show-me State. Next 
time somebody says that, please put them under oath--please. 
Tell them to please tell you where those 2,000 units are, we do 
not know where those 2,000 units are, and they do not know 
where those 2,000 units are. It is fantasy.
    And finally, that it costs more to rehabilitate than it 
does to demolish and tear down; that is just not true. I am not 
going to go through all the numbers, let me just give you 
Lafitte. $20 million--now these are HANO's numbers, their 
insurance company. The wonderful thing about litigation is that 
when you sue somebody and the judge says to give them the 
information, we can get it. $20 million to repair, $100 million 
to demolish and rebuild. Now this ain't Iraq. That math should 
work for somebody--$20 million to repair, $100 million to 
demolish and rebuild. This does not make sense.
    So what should we do? First of all, all we have been asking 
for a survey. Now I know HANO cannot do the survey, they cannot 
find 200 or 300 residents. But somebody surely can do a survey 
and find the people they are still giving checks to, do a 
survey, find out when they want to come home--30 days, 60 days, 
90 days, or 120 days. Not rocket science. We can get this 
survey done, but they have to give you the information. Now 
they will not give it to Tracie Washington, but surely they can 
give it to Maxine Waters. We can get that information.
    Once we find out who wants to come home and when, open the 
units. We know that the units can be cleaned out and opened. 
And then once we get people home, we can have a fair, 
reasonable conversation about what happens with public housing. 
I do not live in public housing. I will take part in the 
conversation like the rest of the community, but it is not my 
home. It is their home.
    Bring them home and we will deal with the redevelopment. 
Just cleaning them up, repair, whatever, but let us get the 
survey done.
    Okay, in my written testimony, I have some other proposed 
solutions but I want to very quickly move on to Road Home, 
because Road Home is just--that is just bad. That is just bad 
and you need to hear some solutions and I am going to just give 
one because my testimony, my written testimony gives more.
    Chairwoman Waters. I am going to need you to wrap it up 
quickly. Go ahead.
    Ms. Washington. It is not difficult to give away $10.5 
billion if you want to. We know 100,000 people, 100,000 homes 
had water. Insurance companies did not go to 100,000 homes in 
the City of New Orleans, they said okay, zip code 70125, you 
had 3 feet, so we are going to give you 30 percent of your 
insurance policy. If you need more, write us. 70122, you had 9 
feet, so you are going to get all of your money, because we 
know with 9 feet of water, you need your policy limit.
    If insurance companies can do it, and if banks know how to 
give out money, why do we need--all due respect--to give you 
$800 million to give away $10 billion? That does not make any 
sense to me.
    I want Congress to simply change the regulation. I say they 
can do it if they try. But they cannot get it done, but if you 
could write new law and legislation and help us, so that our 
people can come home, you would have done a service to this 
community that we cannot expect now for another 10 years.
    [The prepared statement of Ms. Washington can be found on 
page 180 of the appendix.]
    Chairwoman Waters. Thank you very much.
    Mr. Rodi.

  STATEMENT OF MARK RODI, PRESIDENT-ELECT, LOUISIANA REALTORS 
                          ASSOCIATION

    Mr. Rodi. Madam Chairwoman, and other distinguished members 
of the committee, I want to thank you on behalf of the 
Louisiana Realtors and the National Association of Realtors for 
allowing us to make comments on public policy that we think 
would be effective in future disasters and in the current 
situation we are in.
    I have already submitted a detailed testimony, so I am 
going to summarize quickly what we have.
    First of all, it is our knowledge that FEMA, HUD, and 
Homeland Security struggled to develop a cohesive plan to 
assist housing needs immediately after. 403, 408, and housing 
vouchers did not work. The rules were too complicated, and even 
the officials did not know how to interpret them.
    We at the National Association of Realtors and Louisiana 
Realtors believe that the responsibility for disaster housing 
should be moved from FEMA to HUD. They have the most effective 
knowledge of where the houses are and where we could put 
people. Trailers, cruise ships, and hotels do not work in the 
short run or in the long run.
    We would also like to say that the national flood insurance 
works. I was one of the beneficiaries, I got paid quickly, and 
I was able to start my rehabilitation. While we may have some 
funding problems because of solvency, it is a program that 
should be continued by the Congress and we would encourage the 
Congress to do everything it can to encourage the 
implementation of Bunning-Bereuter-Blumenauer, the Flood Reform 
Act of 2004.
    The Gulf recovery is an ongoing problem. Construction costs 
have skyrocketed. Already, Dr. Blakely testified that if we did 
not have affordable housing for construction workers, we are 
not going to be able to get New Orleans rebuilt. We have to do 
something with Federal assistance in the reconstruction of 
housing in this area.
    One of the things that we could do is for the Congress to 
take a look, and this committee, although it might not be in 
its jurisdiction, to support a continuing House resolution of 
1549, the bipartisan bill of the 109th Congress which provided 
tax credits of up to 50 percent for the cost of construction 
and rehabilitation of affordable housing. This would allow the 
capital accumulation that we need from the private sector to 
help implement the reconstruction in New Orleans and in future 
disasters throughout the country.
    NAR and Louisiana specifically believe that the Congress 
has to address a comprehensive national disaster policy on 
insurance. Without affordable insurance, there is no affordable 
housing, whether it be for a homeowner or a renter, because 
renters are passed on those costs for high insurance. The 
Congress needs to do something about a disaster insurance for--
to underwrite and put a limit for the public insurance 
companies.
    We appreciate the fact that you have given us the time to 
have a short testimony today. Our written report is filed with 
the clerk and we thank you for this opportunity.
    [The prepared statement of Mr. Rodi can be found on page 
170 of the appendix.]
    Chairwoman Waters. Thank you very much.
    Mr. Paul Taylor.

  STATEMENT OF PAUL R. TAYLOR, JR., PRESIDENT, SRP DEVELOPMENT

    Mr. Taylor. Yes, ma'am. Thank you, Madam Chairwoman, for 
the opportunity to testify today and submit this statement 
regarding the affordable housing crisis that New Orleans is 
facing in the aftermath of Hurricane Katrina. To the other 
Members of Congress, I am thankful for being given the 
opportunity to testify today.
    I am here today as a follow-up to an invitation 
Congresswoman Waters extended during the Congressional Black 
Caucus Foundation's 35th annual legislative conference. The 
invitation was to develop solutions for the rebuilding of New 
Orleans as part of the outcome of ``The Rebuilding Process in 
New Orleans: Strategies for Leveraging the Public-Private 
Partnership Forum'' held during the ALC.
    We were one of several national development firms, African-
American firms, that was brought in to look at how we can take 
the engines that we have in other cities and bring them in 
partnership with New Orleans, not to replace jobs and people in 
New Orleans, but to bring solutions.
    We have taken the Congresswoman up on that effort and I am 
pleased to be here today.
    SRP Development is a faith-based development construction 
firm, which is one of the largest African-American construction 
concerns in the country. Our organization has done projects 
ranging from Union Station in Washington, D.C., to the MCI 
Arena, and Coseco Stadiums--a lot of public works as well as 
doing housing subdivisions for low- to moderate-income people, 
and HOPE VI projects all over the country. My resume and 
background is included in the record.
    But what I want to focus on very clearly here, and it is 
appropriate that we are last on this issue, because once all 
the conversations are done, somebody has to put a shovel in the 
ground and get work done. And right now, the challenges that we 
see when we put that shovel in the ground to get the work done 
are some very glaring things that are being omitted, being 
touched on, but being omitted in the process.
    The residents have clearly demonstrated that they have lost 
everything that they have. You have also heard from the 
recovery fund people and everyone else that the verification of 
ownership is impacting the ability to collect resources and get 
access to resources.
    What we have looked at when we have come into New Orleans, 
and you have heard it today, 40 percent of the homes in greater 
New Orleans were duplex two-family structures. That is a large 
percentage of homes that are providing rental and 
homeownership. Public housing is important, and I am a strong 
advocate of public housing. But we also have to look at the 
loss of those duplex units from the housing stock, because what 
it is doing, it is starting to create a cannibal effect of 
people who have been displaced from homeownership and these 
duplexes on a limited amount of resources to replace housing.
    55 percent of all housing in New Orleans, as the Mayor 
testified, was rental housing; that means 45 percent of the 
housing stock was homeowners, and those homes were destroyed or 
lost also.
    What is happening in this equation is that you are starting 
to see people take, and you have heard it in the testimony, 
take available housing because you have lost homeownership as 
well. The effort has to be very well balanced. If not, you are 
going to continue to create crisis.
    The community impact we see once you get the housing on the 
ground is three points.
    The very first one is amazing, a lot of people did not talk 
about it today. You have a title insurance problem here. You 
cannot get title or clear title to real estate. You cannot 
access the Road Home funds, you cannot access Fannie Mae, you 
cannot access Freddie Mac. You cannot access anything without 
title. So with that process, we have looked at that and said, 
``Okay, we have to develop a solution.''
    The second point, our research has shown that the lack of 
reasonable property insurance--I am just taking a couple of 
examples of research we have done here. The average insurance 
between the flood insurance, the property insurance--and that 
is not even counting wind insurance--is going to run between 
$7,000 and $10,000 a home--$7,000 to $10,000. You are not going 
to put people back in housing with that kind of pricing 
structure, especially when you are talking about the affordable 
people. Plus, when you take that and you push it into the 
rental community, it is going to continue to raise the 
ceilings.
    The last impact, and it is the most important impact, is 
the financial gap.
    Chairwoman Waters. You need to wrap it up, Mr. Taylor.
    Mr. Taylor. Yes, ma'am.
    You have heard the impacts on the gaps. The gaps are going 
to range anywhere between $80,000 to $100,000. Funds are not 
going to be there for people to pick up the housing on the 
other side.
    Our recommendations:
    First, title insurance. I had with me today, but he had to 
leave, the chief underwriter for Stewart Title. Stewart Title 
has entered into an MOU with our firm and our partnerships here 
in New Orleans to actually write through the title insurance 
and actually create, along with members of the Congressional 
Black Caucus and Congress, a title mitigation fund. The purpose 
of that fund is that if you cannot verify the title, issue the 
policy. Mitigate the claim on the back side, because we are 
doing without housing because we are coming up with solutions 
of why we cannot provide the funding.
    The second solution is on the insurance side. We are 
already starting to take it upon our group and organization to 
meet with some of the top insurance companies in the country. 
We have gone directly to the top and we are going to challenge 
them on this pricing structure.
    The third piece, and it is one you have heard today, is if 
we are going to come in as private developers, we cannot work 
with all this confusion--a lot of confusion. And it is 
impacting people's lives. We are not criticizing the local 
system that has been done today. But we are going to partner 
and work with institutions like Dillard University in 
developing RFP's so that we can work with that form of 
government on a smaller scale and then download our entire 
resources, because they are a stakeholder here and they have 
been here for a long time. That resource will then be able to 
work in this particular community, the Gentilly community, to 
perfect change.
    Thank you, ma'am.
    [The prepared statement of Mr. Taylor can be found on page 
177 of the appendix.]
    Chairwoman Waters. Thank you very, very much. I do 
appreciate your testimony here today.
    I would like to recognize myself for a question or so. I am 
going to turn my questions to the Road Home Program.
    I want you to start with the number of applications that 
you have received, and give me the numbers again. You said 
105,000, then you gave me 80,000 had been something, then you 
said 65,000. Then I want to you to tell me exactly how many 
applications you have completed and funded. Quickly.
    Ms. Reiff. Okay. We prepare and present this data every 
single day in an official report, so I will give you the 
information through this Tuesday. Okay? So as of this Tuesday, 
we had recorded 109,176 applications. We have scheduled--we 
have mailed out letters to applicants inviting them to come in 
for an appointment to 100,139 applicants, of which 75,536 have 
called to schedule their appointments. We have completed 78,033 
appointments through Tuesday and we have calculated benefits 
for 43,421 applicants and--
    Chairwoman Waters. I am sorry, what was the 43,000, what is 
that?
    Ms. Reiff. We have calculated benefits for 43,421 
applicants and have actually sent out letters to 35,873 of 
those applicants. To date, we have received back--this is 
something that comes back, not something that we have done--but 
we have received back benefit selection forms where applicants 
have made their decisions, from 17,307 homeowners. We have 
scheduled, again through Tuesday, 2,160 closings and we have 
held through Tuesday, 749 closings. Obviously, these numbers 
change every day.
    Chairwoman Waters. All right, so you have actually closed 
or funded 749 residents, homeowners.
    Ms. Reiff. Through Tuesday, yes, that's correct.
    Chairwoman Waters. Through Tuesday. Those 749 have gotten 
money, is that what you are saying?
    Ms. Reiff. The money is provided to a lending institution.
    Chairwoman Waters. I beg your pardon?
    Ms. Reiff. Yes.
    Chairwoman Waters. 749 have gotten money.
    Ms. Reiff. Yes.
    Chairwoman Waters. Okay, given all of the criticism about 
the program, all of the news accounts, and the beatings that 
the Governor's Office is taking on this, our concern about 
this, the unhappiness of the residents and the homeowners, what 
do you recommend can be done to implement this program faster, 
to get rid of the accusations that you do not know how to do 
appraisals, you do not know how to clear title, that the 
program is only designed to mitigate against fraud or to keep 
fraud from taking place and these obstacles have just made this 
an unworkable program? What are you going to do?
    Ms. Reiff. Okay, why don't I start by telling you some of 
the things that we have done and that--
    Chairwoman Waters. No, no, no. Just tell me what you will 
do to straighten out the program. If you have done it already, 
just say that this is how we straightened out appraisals.
    Ms. Reiff. We are accepting affidavits from homeowners for 
their insurance and for their FEMA so that we can move forward 
before we get the third party verification. We are having 
homeowners--we have implemented a second disbursement policy so 
if homeowners are not satisfied with their award or do not have 
all of the documentation they need, they can go to closing and 
they can go back a second time for an additional disbursement, 
they do not have to have it all in perfect place to be able to 
move ahead.
    Chairwoman Waters. That is at the end. 749 or so, you know, 
10 or 15 may be unhappy, I do not know, but how do you get, how 
do you move the numbers?
    Ms. Reiff. We are--you probably remember we have received 
109,000 applications and we have only scheduled 75,000 
appointments and we are calling everyone who has had an 
application--
    Chairwoman Waters. Did you hire more people?
    Ms. Reiff. We are calling every individual--
    Chairwoman Waters. Did you hire more people?
    Ms. Reiff. Excuse me?
    Chairwoman Waters. Did you increase your personnel in order 
to do this?
    Ms. Reiff. Yes, of course we did.
    Chairwoman Waters. Okay, thank you.
    Ms. Reiff. When the program was accelerated, we increased 
our personnel tremendously.
    Chairwoman Waters. Would you at any time, if this does not 
move any better or faster, would you at any time say to the 
State of Louisiana that this is not working, we want to tell 
you that you need to find another way to do it. We appreciate 
the contract, but we need to get out of it?
    Ms. Reiff. We are in constant contact with everybody at the 
State level and the Federal level; yes, we would, of course say 
that. We would make every suggestion. We are fully committed to 
doing this as expeditiously as possible. We share the sense of 
urgency.
    Chairwoman Waters. Thank you very much. My time is up, I am 
going to have to go to our ranking member, Mrs. Biggert.
    Mrs. Biggert. Thank you. I think rather than ask a 
question, and we have been here since a little bit after 2:00 
and we I think have had a thorough hearing and I would like to 
thank all of the witnesses for this panel. I think you all have 
brought something new to the table from what we have been 
talking about this afternoon, and I think we will take that 
back.
    I am particularly interested in the insurance and the 
title. In one of my former lives, I used to be a real estate 
lawyer, so this has always been something that is so important, 
and really, I think, is an impediment to the development and 
the rehab and everything and it needs to be resolved in order 
to move ahead.
    But I do think that all of the witnesses have really 
brought something to the table and all of the residents that 
are here, all of the people here as I look across the room, 
there are not as many as were here at 2:15, but I think it just 
shows--but there are a lot--and it really shows the commitment 
to the issue and the challenges that we all face in trying to 
resolve this. And I appreciate everybody staying and listening 
and participating.
    So thank you very much. With that, I yield back.
    Chairwoman Waters. Thank you very, very much.
    Mr. Jefferson.
    Mr. Jefferson. Thank you, Madam Chairwoman. I am just going 
to ask one question.
    Can you tell me, describe for me, the demographics of the 
folks who have been awarded the Road Home grants so far? What 
neighborhoods do they come from?
    Ms. Reiff. I can provide that to you separately. We do 
compile a list of everyone who has closed on the program by 
parish and according to a whole variety of demographic data and 
I can provide that to you. I do not have that in front of me.
    Mr. Jefferson. The anecdotal information we have is that 
the people who are best situated, who have the better homes and 
all that, who are more knowledgeable, who always know how to 
work the system better, are getting results. And other folks 
are having a harder time. So we just want to be sure how this 
thing is working out for people. Okay?
    Ms. Reiff. Yes.
    Mr. Jefferson. Can you help us out with that?
    Ms. Reiff. I can provide you all that data.
    Mr. Jefferson. I want to give others a chance. I know that 
the hour is late. Thank you, Madam Chairwoman.
    Chairwoman Waters. Mr. Neugebauer.
    Mr. Neugebauer. Thank you, Chairwoman Waters.
    I think this day has been very productive and I appreciate 
the participation of the witnesses and my colleagues and 
certainly the folks who came. As I said earlier, it shows your 
commitment to making this work.
    I want to kind of go back to what Mr. Taylor was talking 
about, because as a former land developer and homebuilder, I 
been in the real estate business, you know the title insurance 
piece of it is an important part of that. That is an 
interesting proposal by Stewart Title and I wondered if that 
would require any Federal changes in--title insurance laws in 
Texas are pretty much regulated by the State and so you are not 
proposing any Federal participation in this to bring that 
forward; did I hear you correctly?
    Mr. Taylor. That is correct. One of the things that we sat 
down with--I had the chief underwriter for Steward Title here 
today.
    Mr. Neugebauer. Yes.
    Mr. Taylor. And one of the things that we have looked at--
in the pricing structure--is to create a recovery fund to deal 
with any mitigation. We can then come back and look at taking 
it to a national level to create like a reinsurance if we need 
to. We are not looking at tinkering with any of the laws, that 
is just slowing it down. We can make it work within the 
existing structure.
    Mr. Neugebauer. Now I guess that is where I want to go. Is 
that reinsurance fund a Federal fund or a State fund?
    Mr. Taylor. We are looking at it both ways, looking at it 
both ways, does it make sense at the State level or the Federal 
level.
    Mr. Neugebauer. Can I make a suggestion?
    Mr. Taylor. Sure.
    Mr. Neugebauer. You do not want the Federal Government 
involved in this any more than you possibly have to, so I would 
suggest to you that you try to do that at the State level. 
Trust me.
    Mr. Rodi, you bring up a great point about the insurance. 
It is one of the things that I have--I have just recently come 
to Congress, about 4 years ago I was building communities in 
Texas, and what I do know is that the cost of housing, and part 
of that is taxes and insurance and all of those, that piece of 
it, but one of the things I think is incumbent upon this 
committee, I think if we in the 110th Congress, we are going to 
have to come up with a solution on a comprehensive policy that 
addresses all of the risks of living on the coast. And quite 
honestly, one of those proposals in my mind is actually to get 
the Federal Government out of the insurance business and come 
up with a way that that pricing structure is built into the 
marketplace. Because quite honestly, I think long term, it is 
more--the private markets are more efficient. I think in some 
ways we are prolonging or subsidizing the behavior in the 
marketplace that is somewhat manipulative. So I would look 
forward to hearing solutions.
    And I appreciate particularly this panel. You brought some 
solutions to the table and that is really what we need. We have 
plenty of--and I think my colleague said we had talked about a 
lot but we need to start doing a lot more. So I appreciate the 
solutions that you brought and look forward to--Mr. Taylor, did 
you want to make a comment?
    Mr. Taylor. Yes. I would just ask that as you look to do 
that, I think--I have been in the business a long time, just 
like banks are regulated, I think the insurance companies need 
to be regulated.
    Mr. Neugebauer. Thank you. And I will yield back my time.
    Chairwoman Waters. Thank you.
    Mr. Cleaver.
    Mr. Cleaver. Thank you, Madam Chairwoman. Let me just--
since this is probably my last question, thank you very much 
for all of the commitment you have shown over the--since the 
tragedy. I appreciate it very much.
    Ms. Reiff, did I pronounce your name correctly? Do you have 
any idea how much the homeowners have been paid so far?
    Ms. Reiff. I do not have the number off the top of my head, 
no.
    Mr. Cleaver. Do you have any idea how much ICF has received 
thus far?
    Ms. Reiff. I do not know that number either, not off the 
top of my head.
    Mr. Cleaver. Okay. Those are some important questions--
well, the answers are more important than the questions. And 
the reason I am saying that is that we are talking about a lot 
of money, I think you would agree. And so it certainly causes 
one to wonder why the State would not enter into some kind of 
contractual agreement with local banks to handle this kind of 
money, because most States are not equipped to do this. And I 
think the latter part of what I just said makes more sense if I 
knew the numbers. I mean, for example, if ICF has received more 
than the homeowners, then I think we have a problem. Is there 
any possibility I can get that before we leave?
    Ms. Reiff. I would be happy to provide your staff with that 
data. Obviously, ICF has incurred--we have a team of 23 firms 
and we have engaged in a very substantial startup effort. We 
have opened 11 centers including centers in Houston. We have 
hired 2,000 people, 84 percent of whom are Louisiana residents, 
and 70 percent of whom have been affected by the storm.
    Mr. Cleaver. I think it is a very difficult job, I am not 
trying to make light of it. I think it is a very, very 
difficult and complicated job.
    My concern is the ratio that homeowners get compared with 
ICF at this point. If the ratio is always in favor of ICF, then 
I think maybe you would agree that we would have a problem.
    Ms. Reiff. Right. Sir, over the course of this project, the 
ratio will certainly be on the side of the homeowner.
    Chairwoman Waters. If the gentleman will yield. We would 
like you to submit for the record to us the information that is 
being requested from you.
    Ms. Reiff. Absolutely.
    Mr. Cleaver. Thank you.
    Chairwoman Waters. Mr. Sires.
    Mr. Sires. Thank you, Madam Chairwoman.
    You have 108,000 applications? This is the number, or 
109,000?
    Ms. Reiff. That is applications, yes.
    Mr. Sires. Is this in the 4\1/2\ months span that you have 
been there? Is that--
    Ms. Reiff. Excuse me?
    Mr. Sires. Is that in the 4\1/2\ months?
    Ms. Reiff. Yes. In the operational phase, yes.
    Mr. Sires. That is a staggering number.
    Ms. Reiff. Yes, it is, sir.
    Mr. Sires. Maybe the Federal Government should contract you 
to do the census in 2010 since you are so good at getting, you 
know--
    Ms. Reiff. One job at a time.
    Mr. Sires. --at doing this. This company, yours, it just 
went public, right, recently?
    Ms. Reiff. Yes.
    Mr. Sires. Was it after you got the contract?
    Ms. Reiff. We went public after we won the contract, yes. 
We decided to go public considerably before that.
    Mr. Sires. So this contract in essence has increased your 
revenues by a large amount since you went public.
    Ms. Reiff. It has increased our revenue, yes.
    Mr. Sires. Well, I just hope that, you know, all these 
numbers are correct and you are doing, you know, what it says 
here, because I just find it difficult to look at these numbers 
and just not question it.
    Thank you very much, Madam Chairwoman.
    Chairwoman Waters. Thank you, very, very much.
    With that, the Chair notes that some members may have 
additional questions for this panel which they may wish to 
submit in writing. Without objection, the hearing record will 
remain open for 30 days for members to submit written questions 
to these witnesses and to place their responses in the record.
    And I have been told to share with you that we have copies 
of much of the testimony that was done here today, and to the 
extent that it will cover the members in this room, you are 
welcome to it. They will make it available to you so you can 
take this testimony with you and review it at home.
    And with that, the hearing is adjourned.
    [Whereupon, at 6:55 p.m., the hearing was adjourned.]


                            A P P E N D I X



                           February 22, 2007


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