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



 
                     SOLVING THE AFFORDABLE HOUSING


                    CRISIS IN THE GULF COAST REGION


                         POST-KATRINA, PART II

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


                             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 23, 2007

                               __________

       Printed for the use of the Committee on Financial Services

                            Serial No. 110-6



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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 23, 2007............................................     1
Appendix:
    February 23, 2007............................................    57

                               WITNESSES
                       Friday, February 23, 2007

Bender, Lillie D., Unity Homes Project...........................    38
Bounds, Dr. Jeffrey K., representing Mayor Brent Warr, Gulfport, 
  Mississippi....................................................    10
Bynum, William J., Chief Executive Officer, Enterprise 
  Corporation of the Delta.......................................    41
Clark, Rodger, Executive Director, Paralyzed Veterans of America.    49
Collier, Diane, tenant...........................................    43
Evans, Derrick, Executive Director, Turkey Creek Initiative......    46
Jamieson, Gil, Deputy Director for Gulf Coast Recovery, Federal 
  Emergency Management Agency....................................    20
Jopling, John, Mississippi Center for Justice....................    40
Mackenzie, Jason, North Gulfport Community Land Trust............    36
Robinson, Delmar P., Chairman, Board of Commissioners, Biloxi 
  Housing Authority..............................................    23
Sanderson, Brian, Gulf Coast Business Council....................    44
Sanford, Donna, Director, Disaster Recovery Division, Mississippi 
  Development Authority..........................................    21
Taylor, Hon. Gene, a Representative in Congress from the State of 
  Mississippi....................................................     7
Wilder, H. Rodger, President, Gulf Coast Community Foundation....    39

                                APPENDIX

Prepared statements:
    Bender, Lillie D.............................................    58
    Bounds, Dr. Jeffrey K........................................    60
    Bynum, William J.............................................    66
    Hensley, Bobby...............................................    74
    Jamieson, Gil................................................    77
    Jopling, John................................................    86
    Sanderson, Brian.............................................   107


                     SOLVING THE AFFORDABLE HOUSING



                    CRISIS IN THE GULF COAST REGION



                         POST-KATRINA, PART II

                              ----------                              


                       Friday, February 23, 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 9:05 a.m., in 
the Good Deeds Center, 15101 Madison Street, Gulfport, 
Mississippi, Hon. Maxine Waters [chairwoman of the 
subcommittee] presiding.
    Present: Representatives Waters, Cleaver, Sires; Biggert, 
and Neugebauer.
    Also present: Representative Taylor.
    Chairwoman Waters. This hearing of the Subcommittee on 
Housing will come to order. If we can get you to take your 
seats, we will move this hearing very quickly and give all of 
our witnesses an opportunity to share information with us.
    Thank you, very much. I see that we have our colleague with 
us at the witness table this morning. Congressman Gene Taylor, 
we are pleased to be in your district. Thank you for having us, 
and I am going to turn the microphone over to you.
    Mr. Taylor. Chairwoman Waters, thank you very much for 
coming. I know all of you have your own districts to be looking 
after and I am just very, very honored and grateful that you 
have taken the time to come to south Mississippi. I know you 
have had a brief tour here, and for some of you, it is your 
first trip here, for others, it is your second or third.
    As you can see, a lot of progress has been made, but there 
is still a heck of a lot to do, particularly with regard to 
housing. We have an inverse situation of what you saw yesterday 
in New Orleans where about two-thirds of the folks in 
Mississippi own their own homes, as opposed to New Orleans 
where about two-thirds were renters. Most of the homes that 
could be saved have been saved, so the challenges now are 
replacing the public housing, replacing the apartment complexes 
that have been lost, and replacing the individual homes that 
were reduced down to a slab, which is going to take an enormous 
effort.
    We are going to need your help with things like Section 8, 
and public housing using HUD. We still have a lot of schools 
that need to be replaced and we need to straighten out, as I 
mentioned last week, some of the FEMA rules where a school may 
be 49 percent destroyed, and under the FEMA rules it would not 
be replaced. But you run into issues where, if you are going to 
save that old building, what about the asbestos in it, and what 
about the fact that it was built before the Americans with 
Disabilities Act so it may not be handicap accessible?
    And lastly--we will talk about next week up in Washington, 
and I very much appreciate your help and support on--is that 
insurance has become a huge problem. Number one, they did not 
pay people who, I think, filed legitimate claims, and then they 
turned around and said, if you rebuild, we are going to 
quadruple your rates or we will not cover you at all for wind. 
And so, as you know, we have introduced legislation to allow 
people to buy all natural perils insurance as an extension of 
their flood insurance program. And we know that under the Pay-
Go rules that we passed since the Democrats took over Congress, 
it has to pay for itself, it will not be funded by all the 
taxpayers; it will be funded by the ratepayers. It really does 
affect every American who lives in a coastal community, and the 
census folks tell us that is 53 percent of all Americans, who 
are now at risk of some sort of natural catastrophe, and so we 
want to make this available for the folks from California, from 
Washington State, from Massachusetts, and from Texas. We think 
it is important; it is certainly an impediment to the 
rebuilding of the coast.
    You have probably noticed where there were 4,000 and 5,000 
square foot houses, people are putting up a 1,000 square foot 
house, and that is a combination of not being paid on their 
insurance and then being told it is going to be a heck of a lot 
more expensive.
    So I do not want to monopolize the time. You have put 
together a great panel and I cannot express again my gratitude. 
Words cannot adequately thank all of you for giving up the time 
that you could be spending with your families and your 
constituents, but you are here in Mississippi, and I am just 
very, very grateful for that.
    Chairwoman Waters. Well, thank you very much, and of 
course, we would like you to join the panel and continue to 
help us focus on these issues that you are helping to bring to 
our attention in Washington. So please join us and continue 
your statement in just a few minutes. Thank you very, very 
much.
    I would like to introduce the members of the Subcommittee 
on Housing and Community Opportunity who are here today. I am 
Maxine Waters, chairing the subcommittee, and I am from 
California. And we have our ranking member from Illinois, 
Congresswoman Biggert, and also with us representing a district 
in Missouri, Congressman Cleaver. And from Texas, Mr. 
Neugebauer, and from New Jersey, Mr. Sires.
    So the Chair will recognize herself for a 5-minute opening 
statement and then we will move right into statements from the 
other members who are here.
    Again, I would like to thank Ranking Member Judy Biggert 
and each member of the Subcommittee on Housing and Community 
Opportunity who has joined me for today's hearing.
    We gave a title to this hearing, ``Solving the Affordable 
Housing Crisis in the Gulf Region Post-Katrina'', and we raised 
a question about the progress and we are trying to figure out 
the obstacles to success.
    I am very pleased that we could hold today's hearing in 
Gulfport, Mississippi. This is one of the hardest hit areas in 
the Gulf region and people are still having a hard time 
recovering from Katrina. People are suffering because many 
individuals and families want to return to their homes. 
Unfortunately, there is very little, if any, affordable housing 
to which to return. The housing stock has virtually disappeared 
in some parts of this region. Where there is housing, it is in 
such short supply that the price is unaffordable for many 
working families, the elderly, and the disabled.
    We know that Hurricane Katrina destroyed or severely 
damaged 8,600 rental units in Mississippi, 95 percent of which 
were located in Hancock, Harrison, and Jackson Counties. Many 
homeowners have decided to rebuild, but some cannot make the 
decision to rebuild because the sums they are receiving are not 
adequate to rebuild. There are still many homeowners who have 
lost everything and have yet to receive grants from the State 
of Mississippi for damaged or lost homes, although the 
reconstruction or repair of their homes was funded through the 
Federal Community Development Block Grant Program, funds that 
the Congress appropriated last year, $5.5 billion to 
Mississippi since January 2006. And of course, it is very 
important for everyone to know that we responded as quickly as 
we possibly could with that appropriation, and we certainly 
intend for it to go to the people and to be distributed in the 
best way possible.
    One of the major efforts undertaken in Mississippi to make 
homeowners whole again is the Mississippi Homeowners Grant 
Assistance Program. Under the program, the State of Mississippi 
will pay a one-time grant up to $150,000 to eligible homeowners 
who suffered flood damage to their primary residence by 
Katrina. To date, 17,654 applications were taken by the State 
and 84 percent of the applicants who decided to repair or 
rebuild have been paid. As of February 2, 2007, 10,247 
applicants have been paid a total of $681,456,000, which means 
that 72 percent of the applicants have received checks.
    I have to tell you, we just came from Louisiana, and I have 
to applaud the State of Mississippi for its progress in 
assisting homeowners. I would like to determine whether there 
is more that we can do to help the State with each of these 
homeowners who are still in need of assistance, but Louisiana 
is far behind Mississippi in distributing the dollars in their 
Road Home Program, so what appears to have been done here is a 
lot greater than what was done over there.
    Unfortunately, the response of the Federal Government to 
the housing needs in the Gulf region still can only be 
described as temporary. Interestingly, on September 1st, there 
was some representation that was made by HUD that got changed 
and it caused a lot of concern. But we think that the 
appropriations that we have made can go a long way toward 
assisting all of those homeowners and renters who need to be 
assisted. We just have to make sure that not only are the 
programs being implemented in ways that will get all of this 
money out, but we want to know where the soft spots are. We 
want to know where the problems, where the obstacles are.
    HUD approved an action plan to address the needs of the 
five public housing authorities in 2006. Under the plan, up to 
$100 million could be used by the public housing authorities 
that suffered damage to their facilities. There were 2,695 
rental units pre-storm, 2,534 were damaged or destroyed, and 
906 are currently unoccupied. According to HUD, the grant 
allocations have been based on the percentage of individual 
public housing authority dollar damages to the total damages 
for all five public housing authorities. So while the level of 
damage to the public housing stock does not equate to the 
situation in New Orleans, there is still a need to address the 
lost public housing stock in the public housing authorities in 
Mississippi.
    We have many questions for today's witnesses and I hope 
that the testimony today will answer many questions related to 
the rebuilding process in the Gulf region. Members of this 
subcommittee and the people need to be sure that in moving 
forward, the Federal response to the affordable housing crisis 
in the Gulf region, to the extent it exists in Mississippi, is 
a measured one.
    Let me just take a moment to compliment the State and the 
region for the tremendous job that has been done in removing 
the debris and cleaning up following Katrina. This is the 
second time that I have been in this area and the job that you 
have done is absolutely tremendous. But also let me just say 
that on my first trip here, I noticed that the work that had 
been done to get people into trailers was work that was to be 
commended, that more people had received immediate assistance 
here in Mississippi than certainly had taken place in 
Louisiana.
    In addition to that, in the conversations we had today with 
our representative of one of the public housing authorities, I 
was just very pleased to see the very positive attitude about 
rebuilding and even expanding the number of units that would be 
available to people who desperately need affordable housing. 
And so while we are going to ask a lot of questions here today, 
it certainly appears that a lot of work has been done, that 
some considerable progress has been made, and that the spirit 
is good here and people are moving forward and we are here to 
see if we cannot even do better than we have done in helping 
you to move the agenda.
    With that, I would like to call on the ranking member of 
this subcommittee, Congresswoman Biggert.
    Mrs. Biggert. Thank you, Madam Chairwoman. I want to thank 
you for putting together this 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 areas 
around New Orleans, and now here in Mississippi, and the 
Governor's Office for giving us their time to really give us 
the background on what is going on here. I think this will help 
us so much to understand the task at hand and how we can best 
assist in the effort.
    I would also like to recognize and welcome today's 
witnesses: my colleagues from the House; the local, State, and 
Federal officials; the volunteers; the businessmen and 
businesswomen; and, most importantly, the residents of this 
region. Thank you for being here today, for your testimony, and 
for showing us your neighborhoods and homes and for sharing 
with us your difficulties in rebuilding and revealing your 
hopes for the future.
    Certainly, by all accounts, Hurricane Katrina was the most 
destructive and costly natural disaster in the United States. 
It has destroyed housing and infrastructure on such an 
unprecedented scale. I think that the task of recovery and 
rebuilding in Mississippi and the whole region continues to be 
a monumental one. We are 18 months removed from the hurricane, 
yet the challenges still seem to be unending.
    But I have to say, and I would agree with the chairwoman, 
that in visiting here in Mississippi, we have seen such a 
remarkable recovery in comparison to New Orleans. And I think 
that really is due to the community, and I think one of the 
differences is that this seems to be from the locals up and has 
really provided--I think the people have really provided the 
progress, the plans, and obviously, effective coordination. And 
I really believe that rebuilding starts from the ground up; it 
starts at the local level. I think that is what is happening 
here, so I really do commend everyone.
    One thing that is certain, though, is that disasters will 
continue to happen. We need only to look at a recent tornado in 
the New Orleans area and recent storms in Florida as reminders. 
We, in Congress, need to learn from our mistakes in the Gulf 
Coast. We have to ask the difficult questions about how the 
Federal money has been spent in these localities. Should it 
have been spent in a more efficient and cost-effective manner? 
What accountability should there be, what Federal organization 
should be in charge of the national government response, what 
should be done about uninsured losses, and what should be done 
about insurance? These are difficult questions but we have to 
figure out how to get it right and we need to do it soon. It 
has been 18 months and people's lives are deeply affected by 
this.
    Clearly the availability of affordable housing is critical 
to the partial recovery after such a storm. And if there is no 
housing, there is no business; if there are no businesses, 
there are no jobs; and without jobs and businesses, the 
residents who have not yet come back to provide the economic 
base that will spur the economy for this region. But I think 
just traveling through today, we saw so many businesses that 
have opened, and looked very viable, very clean, and very 
happy. And again, I do commend you for the progress that has 
been made.
    But I hope today's hearing will shed light on specific 
issues that we still need to consider in order to better plan 
for future disasters and how to improve the capabilities of all 
levels of government in response to disasters effectively and 
whatever we can do further to help the people of Mississippi.
    So I thank the chairwoman for holding this meeting and look 
forward to the witnesses.
    Chairwoman Waters. Thank you, very much.
    Now I will call on Representative Sires from New Jersey.
    Mr. Sires. Good morning. First of all, I want to thank the 
chairwoman for putting this together.
    This is my first time ever in this region. I had seen the 
devastation on television and I wanted to put a face to what I 
saw. And I have to tell you, it is incredibly moving. I give 
the people of this region a lot of credit. You are building 
back this region, you have worked so hard, but I am troubled by 
the differences between one region and the other and how you 
are putting everything together.
    My district in New Jersey is across the river from the 
World Trade Center and one of the things that I always observed 
after 9/11 is the emergency response and the coordination when 
there is a catastrophe. And I think in this area, there has 
been a great effort after the disaster to put the lives of 
people back together again.
    So I am just here to get the facts to understand, to get to 
know the people of the region, and in a small way see how much 
I can help you bring your lives back again.
    I also want to compliment your Congressman. I know he cares 
a great deal about the district and the region and I certainly 
am here to help as much as I can. Affordable housing and 
housing has always been an issue that is very, very important 
to me and I hope we can work together.
    So thank you very much, Madam Chairwoman.
    Chairwoman Waters. Thank you, very much.
    The gentleman from Texas, Mr. Neugebauer.
    Mr. Neugebauer. Well, thank you very much, Madam 
Chairwoman, and thank all of you for being here today to show 
your interest.
    I want to compliment your Congressman, Mr. Taylor. He has 
been a great voice, because not only does he represent the 
people who are in the room, but he, in fact, experienced the 
full effects of one of the most devastating national disasters 
in the history of our country. And he has been a great voice, 
and really kept our committee updated on a lot of the important 
issues in this process as we go along.
    I think one of the things that hopefully will come from 
these hearings that we have had, both in Louisiana and 
Mississippi, is that we are trying to make sure we finish this 
process, but also making sure that in the future we do better. 
Because if we do not do better next time, and hopefully--I mean 
obviously none of us want a next time, but what we know is that 
the probability is that there will be future disasters in our 
country in the future and that we do this better. And one of 
the things that we talked about yesterday was the fact that 
FEMA, you know, how do we in the future--FEMA is a disaster 
response, it is kind of a first responder. And so how do we 
pass that ball off to the agencies that can start working more 
quickly with our communities to start rebuilding those 
communities, because when you have the kind of devastation that 
we have seen over the last 2 days, you recognize that if you do 
not quickly put those communities back together, people have to 
make choices to relocate other places because, as was 
mentioned, either housing or jobs or economic opportunity. And 
so it is very important that we have these hearings both to 
finish this process, but more importantly to me is that we also 
make sure that in the future we have a better pass-off of whose 
responsibilities are what.
    I commend this community. We had a little bit of a tour 
this morning and began to see a lot of the things that are 
coming back. There is still a long way to go, but--and we 
hopefully can hear some things today that possibly will help 
speed up that recovery.
    So it is a pleasure to be here on this beautiful day in 
Mississippi. The only problem is that we do not have an ocean 
view from where we are here, but thank you, Madam Chairwoman, 
for holding this hearing.
    Chairwoman Waters. Thank you, very much.
    Mr. Cleaver from Missouri.
    Mr. Cleaver. Madam Chairwoman, thank you for your effort to 
keep Washington connected with the problems resulting from the 
record flood that devastated this part of the country.
    I do not have an opening statement. I would like to also 
thank my colleague, Congressman Taylor, Gene Taylor, for your 
relentless pursuit of some redress for the people in this area. 
You have certainly kept Congress sensitive to this issue, so we 
appreciate your effort very much.
    Thank you.
    Chairwoman Waters. Thank you, very much.
    The Chair now recognizes the first panel. Our very first 
witness is our colleague, Congressman Gene Taylor, for 5 
minutes.

  STATEMENT OF THE HONORABLE GENE TAYLOR, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF MISSISSIPPI

    Mr. Taylor. Thank you, Madam Chairwoman, and again, I want 
to thank all of my colleagues for coming down. I was remiss in 
my opening statement that I thank you for your time in being 
here. What I failed to thank you for was the incredible 
generosity that the Congress, all of you, extended to the 
people of south Mississippi in the wake of Katrina. Within a 
week, the Go-Zone legislation had been passed and by the week 
of Christmas, the approximately $4 billion that was going to 
ride to the aid of the people of Mississippi passed Congress 
probably about 3 a.m. as a part of the Defense appropriations 
bill that passed that week. We are very, very grateful for 
every penny of it and at no time, please do not ever doubt that 
we, just like the rest of our fellow Americans, want to make 
sure that it is spent properly and none of it is wasted, that 
it goes to the right place.
    So a couple of suggestions based on what did happen:
    You might remember about a year ago, our colleague Mel 
Watt, offered an amendment to the National Flood Insurance 
Program for those people who had homeowners' insurance, who 
were told they lived outside the flood plain and did not need 
flood insurance, but subsequently flooded and then their 
homeowners' insurance said that they would not pay. It was 
going to allow them to buy into the homeowners' insurance 
program retroactively, sign a contract saying they would stay 
in it forever, so that this would not happen again, and then 
file a claim as if they had been in the program.
    That went on to become the Community Development Block 
Grants, and again, we are grateful for every penny of it. I 
happen to think that Congressman Watt's plan would have been 
quicker. And what I really saw after the storm was people who 
were having trouble making the decision, they found themselves 
in an unforeseen situation and I was very much afraid that 
people would have to sell their houses, walk away from their 
mortgages, and lose everything they had because something they 
never expected happened to them.
    We are grateful for the CDBG program, but there are a 
couple of flaws.
    One is that it took way too long. Even in Mississippi, 
where we did better than Louisiana, on the anniversary of the 
storm, only about 200 people had received their checks. Now we 
passed that money through Congress Christmas week, the check 
was in Jackson, Mississippi, our State capitol, by March and 
yet towards the end of August, only about 200 people had 
received their checks. And I think if we had done it the way 
Congressman Watt wanted to do it, using the existing 
bureaucracy, it would have been a lot faster. So that is the 
first suggestion.
    The second thing is, one of the unpleasant things that came 
out of this is that we actually had some State elected 
officials do business with the program. And as someone who 
asked for that money, and as someone who promised my colleagues 
that money would be spent properly, since the State allowed 
that to happen, I would suggest that we, as a Nation, pass some 
rules saying that is not going to happen in the future. I want 
my colleagues in Congress to know that should this ever happen 
in Mississippi again, or in Los Angeles or in Texas or New 
Jersey, that the money is going to go to the citizens and not 
somebody who is using their elected office to try to get a few 
bucks out of the deal.
    The third thing is that transparency is a good thing. A lot 
of these local communities actually publish their monthly 
expenditures in the paper. Whether they are buying a lawnmower, 
or getting a police car fixed, it is published in the paper, 
and transparency is a good thing. One of the things that I 
would hope in the future is that the amount of money that is 
distributed is transparent, because again, most of you may come 
from other small communities where people know what happened to 
the Jones, people know what happened to this family over here. 
And the best way to ensure that the checks were given out 
properly and fairly is self-policing of the citizenry. They are 
going to know which houses were gone, which houses were 
flooded, and which houses only lost a few shingles. And so I 
think transparency is a good thing. If we, as a Nation, are 
looking for transparency from Bechtel and Halliburton and all 
of them, then it ought to be transparent all the way through. 
So that would be a suggestion for the future.
    In the case of the trailers, we are very, very grateful for 
them. There are a few folks in the back of this room who worked 
for FEMA in delivering those trailers and at one point we had 
40,000 Mississippi families living in those tiny trailers. They 
are designed for up to a family of four. One of my neighbors 
who used to play ball for one of our colleges here in 
Mississippi, the guy is about 260 pounds, and he has two 280-
pound sons. You put his wife in there, and that is a lot of 
people in one of those little trailers. So again, maybe in the 
future, you ought to take that into account.
    And there are some issues that have only recently come out. 
We had just yesterday, in our local paper, a front page story 
about a lot of congestive problems that are coming from the 
people living in these trailers. They were really made for a 
weekend. Now we have had people--and again, thank goodness--we 
have had people who have had an opportunity to live in them for 
18 months because they lost everything. The President has 
extended that to 24 months, but they are finding some 
respiratory problems because the materials in these trailers, 
among other things, contain formaldehyde. Again, if you are 
only going to spend one weekend a month in it, no big deal. If 
you are spending 18 months every night in it, it does become a 
big deal, so that is something that I would encourage you to 
look into.
    A lot of the initial contracts were cost-plus, non-compete 
contracts. And I will point to the trailers again, and I want 
to make it really clear that we are grateful for the trailers. 
It did take too long to get them on people's property but it 
was a cost-plus non-compete contract to an outfit called 
Bechtel, and it turns out that when you put a pencil to it, it 
was about $16,000 per trailer just to haul them from about 70 
miles from here, take them to somebody's yard, hook them up to 
a garden hose, hook them up to a sewer tap and put in what 
those of us in the construction trade call a 200 amp pole. That 
is way too much money.
    In the beginning, it was chaotic down here. There was a 
lack of fuel, no electricity, you had to bring in food for your 
employees, you had to bring in a portalet for your employees, 
and you had to bring in a shower and a cot for your employees. 
So obviously in the first month or so, everything we did was 
very expensive. But that was not the case after the fourth 
month or the sixth month. And so again, maybe we need to find a 
good balance between responding to the initial emergency and 
then as things get a little bit more normal, rebidding those 
contracts, giving the local guys a better shot at bidding for 
them, because a heck of a lot of the contracts went to outfits 
like Ashford out of Florida, Bechtel out of California, and the 
locals felt left out. And then what also happened, in the case 
of the debris, the debris removal contract was fairly generous, 
it was about $21 per cubic yard in some of these counties. 
Well, then someone would come along and rebuy that contract for 
$19 a cubic yard. Someone else would buy it for $17, or $15, 
and so it ends up that the guy who is actually hauling debris 
is getting about $9. And again, we, as a Nation, should have 
been in a position to say, you know what, if that price is 
going to end up around $9, maybe that is what the Corps of 
Engineers ought to be issuing and not the $21.
    The good side was, because there was a lot of money to be 
made, it almost looked like the gold rush to get debris out of 
here, because people knew that every time they put a yard of 
debris in their truck and got it to the dump, they were going 
to get a check for that much money. So it moved things along 
quickly, but I think it certainly could have been done in a 
more cost-effective manner that gave more of the local folks an 
opportunity to compete.
    Again, I do not want to monopolize your time. I am 
incredibly grateful for everything our Congress has done, and I 
am particularly grateful for you being here. God bless you all.
    Chairwoman Waters. Thank you, very much.
    I am very appreciative, and we all are very appreciative 
that we have elected officials who have come to be with us 
today. We have Supervisor William Martin from District 4; 
Council Member Bill Stallworth from Ward 2; Council Member 
Barbara Nalley; the Election Commissioner from District 4, 
Christine Brice; former City Council Member for Gulfport, Jimmy 
Jenkins; Council Member Jackie Smith; and Councilwoman Ella 
Holmes-Hine from Gulfport. Thank you very much for coming 
today.
    With that, I would now like to call on the representative 
who is here from the Mayor's office. I understand that the 
Honorable Brent Warr could not be with us today, but he has 
asked Dr. Bounds--I could not see that lettering on your 
identification tag there. Thank you very much for being with 
us, Dr. Bounds. Please go ahead.

STATEMENT OF DR. JEFFREY K. BOUNDS, A REPRESENTATIVE FOR MAYOR 
               BRENT WARR, GULFPORT, MISSISSIPPI

    Dr. Bounds. Thank you for having me. First, I would like to 
apologize on behalf of Mayor Warr, who had a previous 
engagement and could not be here. The Mayor asked me and my 
colleague Linda Weil, another planner, to be here, partly 
because, I think, of my somewhat unique experience. I am a 
local native to the area, I grew up here, so I know the area 
from that perspective, and I experienced Katrina not just from 
the perspective of a resident who is suffering through it, but 
also as a volunteer.
    Shortly after Katrina, or a few months after Katrina, I 
went to the City of Gulfport and volunteered to help with the 
management of the building department, so I got some exposure 
to the perspective as a city staff employee. And then lastly, I 
have served as a planning consultant with the Cities of 
Gulfport and Pass Christian and several other cities on the 
coast in the adoption of the planning reform efforts that the 
Governor's Mississippi Renewal Forum pioneered in October of 
2005.
    So in my comments, I would like to say first that I am 
extremely appreciative of all the efforts that the Congress, 
and Congressman Taylor, in particular, and the Federal 
Government has expended in terms of support and recovery for 
the Mississippi Gulf Coast.
    In what I say next, though, you may notice a little bit of 
frustration and I am largely going to be talking about the 
negatives. I do not want that to be construed as a lack of 
appreciation for State, local, or Federal officials because 
basically wonderful things have happened and have been done, 
but I do think that we can do better in many regards.
    Chairwoman Waters. Excuse me. Could you speak up a little 
bit louder so everybody in the back can hear you?
    Dr. Bounds. Yes, ma'am.
    I would like to start with two comments about the goings on 
in the city and then to basically make four specific points 
about the recovery efforts as far as affordable housing goes.
    First, the extent of housing damage in the City of Gulfport 
is something that is sort of difficult to put a specific number 
to. The fact of the matter, and one of the things that I 
learned when I volunteered to work with the City is that one of 
the most frustrating aspects of the recovery has been that the 
local governments, city and county, do not actually possess the 
staff and resources to address a lot of the challenges of the 
recovery.
    So for all the funding that has been provided, little or 
none has actually gone to help local governments obtain the 
staffing and administrative support that the recovery requires. 
The building department, I think, in the City of Gulfport was 
an early example for me. They essentially have to permit every 
single repair or building replacement that happens and this is 
a building office that normally handles a fairly sleepy number 
of additional buildings that are constructed every year. But at 
this point, fully a third of the structures in the city had to 
essentially have some work done on them. As you can imagine, 
that really overburdened the resources the City had.
    Essentially every department in the City of Gulfport has 
been strained to the breaking point, and are generally unable 
to hire sufficient staff due to housing constraints. It is very 
difficult to move new people into the area, and essentially 
coast-wide, there is a huge employment shortage, which makes it 
very difficult to get staff.
    As a result, the City has not had staff available to 
provide the data collection that would be necessary in order to 
obtain useful accurate information on the actual number of 
destroyed, required, or even in-service housing units that are 
on the ground at this time, or to put numbers to the shortfall 
of affordable housing in the City. That is sort of a 
fundamental requirement in terms of knowing where you are so 
you can know where you need to go. And essentially, I think 
most of the cities across the coast are just unable to do that 
and some assistance would essentially be very, very helpful.
    Based on that, I would like to make the recommendation that 
funding for additional administrative staffing for local 
governments is really an important thing after a major 
catastrophe. FEMA's model of providing national food insurance 
staff to help local building officials with answering flood 
questions is a great model, I think, for the way that that can 
work. It was a little on the insufficient side in the amount of 
help that was actually needed, but it was a brilliant idea and 
it worked really well in the towns where it was used.
    I think in general that short and longer term support is 
needed for administrative tasks from damage assessment to 
housing evaluation to building code and engineering staff.
    The second point I would like to make, or issue I would 
like to address, is just talking about the City of Gulfport's 
repair and rebuilding experiences after the storm. Gulfport is 
an entitlement city with home and CDBG funds administered by 
the Community Development Division of the City's Urban 
Development Department. After Katrina, existing entitlements in 
the amount of about $800,000, including CDBG and home funds, 
were reallocated for a hurricane emergency repair program that 
was fashioned as a direct response to the catastrophic 
destruction of a large number of homes by City staff. That 
required a large number of waivers on the part of HUD, and to 
their credit, HUD actually came through with the waivers, but 
it took a very, very long time for that to happen and part of 
the problem was no doubt the fact that there was not a good 
communication channel between local staff on the ground and 
higher ups. And so it became somewhat difficult to make clear 
the nature of the situation and the fact that the waivers were 
needed.
    What the City did with that $800,000 of reallocated funding 
was to essentially team up with local nonprofit groups. The 
nonprofit groups provided the labor to do emergency repairs on 
houses that were damaged for people who could not afford to 
otherwise repair them. The City provided the materials and 
provided local housing in the National Guard Armory for some of 
the volunteers to make that happen.
    Chairwoman Waters. I am going to have to ask you to wrap 
up. We are going to ask you questions and get to some more of 
this information.
    Dr. Bounds. All right. I would like to touch really briefly 
then, if I can, on two issues or one issue in particular and 
that is the flood hazard. As a planner, one of the things that 
I think is easily lost in looking at recovery is the bigger 
term questions of how we make sure this doesn't happen again 
and how we avoid the mistakes that we made. One of the things 
that we see happening, especially in the City of Gulfport is an 
enormous amount of development that is happening is happening 
in the flood plain. Unfortunately a tremendous part of the high 
and dry and probably safest ground in the City of Gulfport is 
actually only about a mile north of the beach in older parts of 
town, which are in-fill. And essentially what we found is an 
awful lot of the federally funded programs to produce 
affordable housing take no account of that, provide us no 
reasonable mechanism for redevelopment of in-fill areas, and 
essentially programs like the tax credit programs which are 
intended well and which have made some efforts to accommodate 
the needs of cities, in fact are falling woefully behind in 
terms of the requirements. So we actually need, in particular, 
mixed use, mixed income, and mixed ownership types. Those are 
really sort of the critical things that are needed in order to 
make affordable housing work in the community.
    [The prepared statement of Dr. Bounds can be found on page 
00 of the appenidx.]
    Chairwoman Waters. Thank you, very much.
    We would like to ask a few questions now. First, let me say 
to my colleague, Congressman Taylor, you and I had a 
conversation some time ago where you indicated your concern 
about conflicts of interest and you alluded to it again today. 
And I am not sure that I remember the details of that, but I do 
remember walking away from the conversation feeling that this 
was very serious and it sounded as if some elected officials 
had been the beneficiaries of our appropriations because they 
had businesses that they were able to get to do certain kinds 
of work. And it certainly did not seem as if it is the kind of 
thing that we would support.
    So would you explain to us again exactly what is it that 
concerns you and what should we do, what ideas do you have to 
correct it?
    Mr. Taylor. Madam Chairwoman, the State of Mississippi, in 
the State Constitution, Section 109, has a very strong conflict 
of interest section that says in effect that a city councilman 
cannot do business with the city or a county supervisor with 
his county. You cannot even recuse yourself from a vote. You 
simply cannot do business.
    Because the CDBG money came out of Washington, the State 
Ethics Department ruled that was Federal money. And even though 
it flowed through the State of Mississippi, it was Federal 
money and, therefore, a couple of State reps and a State 
senator, or vice versa, were able to start a corporation. Now 
in their defense, they were the low bidder and the 
substantially low bidder, but it still gives off the appearance 
of impropriety. And again, we are asking for your generosity 
and we do not want anyone to think, 5 years from now, should 
this happen in Mississippi again, and I go to my colleagues 
again, I do not want my colleagues saying, ``Well, wait a 
second, you gave that money to a bunch of legislators.''
    So I would ask that the rules be changed to just make it 
very clear that anyone who is going to handle this money in an 
official capacity cannot bid on this money, and that is whether 
it is a trailer delivery contract, whether it is debris 
removal, anything of that sort, we need a good clear--because 
again, the State has a very good law, a well-intended law, but 
I think the Ethics Commission came up with a bad ruling on 
that. So that is the situation and that is why I think it needs 
to be addressed.
    Chairwoman Waters. Thank you, very much. I thank you for 
bringing that to our attention, and certainly, I think we can 
write into our legislation something that would prevent that 
from happening in the future.
    Let me just ask, is it Mr. Bounds?
    Dr. Bounds. Yes, Dr. Bounds.
    Chairwoman Waters. Dr. Bounds, you mentioned that the City 
did not have a lot of support and you needed personnel--here 
you are in a crisis and you need to do some management. Now am 
I to understand that you did not get any of the CDBG money that 
we sent to the State to help offset your costs at the City 
level?
    Dr. Bounds. The CDBG money actually was forthcoming but in 
programs, to my familiarity, that essentially were not--
certainly were not available to the City immediately after the 
storm when the staffing crisis first happened. And, you know, 
that is not intended as a criticism of that program, just that 
I think some other mechanism is probably needed in order to 
ensure that when a catastrophe hits an area comprised largely 
of very small towns, which in many cases have a single building 
official and nobody else in the department, that some kind of 
support is going to be needed in order for at least the very 
obvious case of rebuilding.
    Chairwoman Waters. Well, as I understand it, the CDBG money 
that we sent to the State could have been used to assist the 
local communities in expediting whatever programs they needed 
to expedite in order to help the citizens.
    Secondly, if I still have a minute here, you alluded to 
public housing and the replacement of public housing, I 
believe. And I was not clear what you were saying.
    Dr. Bounds. My concerns were actually directed to 
affordable housing in general, not just public housing, but my 
concerns are that what we see locally is that probably 95 
percent of the reconstruction is actually happening in the 
flood plain, and the concern being, in my opinion, that there 
is a real issue with whether you are doing anybody any favors 
by locating those who are least able to handle the financial 
consequences in harm's way.
    Chairwoman Waters. Thank you.
    Now I do not know if you are able to answer this question, 
but I just heard some information that was not clearly 
explained to me about residents who are being asked to do long-
term leases rather than purchasing. Are you familiar with that?
    Dr. Bounds. No, ma'am, I am not.
    Chairwoman Waters. All right. Thank you, very much.
    With that, I will turn to my colleague, Ranking Member Judy 
Biggert.
    Mrs. Biggert. Thank you very much, Madam Chairwoman.
    Congressman Taylor, thank you so much for all that you are 
doing for your constituents. And I notice that in the Wall 
Street Journal today, there is an editorial which you are in, 
along with Senator Trent Lott, and both of you talking about 
the flood insurance and I know that you have been working very 
hard on that.
    I understand that you are introducing a bill that will 
address this issue, at some point? At least that is what they 
are saying here. What I wanted to ask you is if that is similar 
to--there was a bill that was introduced in 2007, it was called 
the Multiple Peril Insurance Act, and Congressman Boustany had 
this bill, and it was to amend the National Flood Insurance Act 
to provide for the National Flood Insurance Program to make 
available multi-peril coverage for damage resulting from wind 
storms or floods and for other purposes. Is the legislation 
that you are proposing similar to that?
    Mr. Taylor. Yes, ma'am. Two things. Number one, the only 
industry in America that is exempt from the Sherman Antitrust 
Act is the insurance industry, and I will give you some 
examples. If a storm had just hit, and people had holes in 
their roofs, and the local roofers all got together and said, 
let's all bump our prices by $100 a square because we have a 
captive audience, then they they would go to prison. If just 
before a hurricane, people are trying to get out of town and 
there are only three gas stations and the three gas stations 
all look at each other and say, you know, we have a captive 
audience, so let's charge $5.00 a gallon, then they would go to 
prison.
    But it is perfectly legal for State Farm to call Allstate 
and to call Nationwide and say, let's raise our rates or, what 
I suspect they did in the wake of Hurricane Katrina, they said 
let's not pay claims. If you, Allstate, do not pay claims, then 
there will not be pressure on me, State Farm, to pay claims, 
and then Nationwide will not have to pay claims. It is wrong, 
but it is legal.
    And if you think about it, we have laws that say you have 
to have insurance. You have to have insurance to drive. If you 
have a federally backed mortgage, you have to have insurance. 
So we are telling the people on one hand, you have to have 
insurance; on the other hand, we are telling them that you are 
exempt from the antitrust laws and there is zero Federal 
regulation of the insurance industry.
    The all perils insurance--one of the phenomena that 
happened is the few people who got justice from the insurance 
industry that I saw early on were eyewitnesses. Even though the 
satellites told us the storm was coming, even though the 
hurricane told us, even though the sheriff's deputies went out 
to all the churches that morning and said, you cannot have any 
more services, tell your congregation to get the heck out of 
here, some people did stay behind. Some died as a result of 
that. But the ones who lived were the ones who could say yes, I 
saw my house fly apart before the water got here, and they got 
paid by the insurance industry. The ones who were not 
eyewitnesses because they did what they should have, which was 
to get the heck out of here, all they know is that they have 
come home to a slab, and they have an insurance company who is 
holding the checkbook and they are saying they do not see any 
sign of wind damage, so they are not going to pay.
    So the purpose of the all perils is that if you built your 
house to Code, if you have built it high enough that--the 
Federal Flood Insurance Program tells you how high to build 
it--you have built it to Code, you have paid your premiums, and 
you purchased an all perils extension to that policy, then it 
does not matter if it got hit with a microburst, if your 
neighbor's house flew into it, if a shrimp boat went through it 
because the water got so high--it does not matter. And stuff 
like that really did happen to a personal friend. It does not 
matter, if it happened and you paid your policy, you are going 
to get paid. And you do not have to stick around--I really have 
heard a lot of my constituents say next time, I am staying with 
a video camera, and I am going to have evidence to show those 
sons of guns and they will have to pay me. And remember, 53 
percent of all Americans live in a coastal community. So 
whether it is New Jersey, whether it is California, whether it 
is Texas, or whether it is Maine, 53 percent of all Americans 
are affected by this and I would certainly, for the interior 
States, if they want to be included, extend that to tornados 
and wildfires. But I am not going to force it on those 
communities. We want to make it available should they choose to 
participate.
    But that is the intention, that is why we are doing it and 
quite frankly, the same year that the industry made $44 billion 
in profits, in 2005, the flood insurance program lost $20 
billion, and the reason I think that happened is that the 
citizens got stuck with the bill that should have been picked 
up by Allstate, State Farm, Nationwide, and others.
    Mrs. Biggert. I realize how passionate you are about this, 
but I do think that you are correct that people should not 
remain behind to video the disaster. I think the smarter people 
still were the ones who left, but thank you for all that you 
are doing.
    I yield back.
    Chairwoman Waters. Thank you, very much.
    Allow me to share this. Congressman Watt, who chairs our 
Subcommittee on Oversight and Investigations, will be having an 
oversight hearing next Wednesday in Washington on insurance, on 
precisely what you are describing now about what happened here. 
So it is because of you that this is the number one issue on 
the agenda for that subcommittee and this overall committee and 
additionally, support from this subcommittee.
    Thank you very much, and I will turn to Mr. Cleaver.
    Mr. Cleaver. Thank you, Madam Chairwoman.
    I am stuck on CDBG and I do not think I am going to get 
unstuck any time soon because I think that there is some 
legislation needed in the event--not in the event, when we end 
up in another tragedy--it is going to happen.
    The CDBG requirements for, as my colleague, Mr. Sires and I 
know, both of us have served as mayor, requires a community 
meeting, a public hearing on the spending of those dollars. 
That was waived in this process and as I understand it, the 
community was told that they could send in letters, which 
probably means that the majority of the people in here now 
never sent in a letter. Those public hearings are designed so 
that the public can participate in the decisions on how those 
dollars are going to be spent, and that is an annual event for 
cities that receive the Community Development Block Grant, the 
CDBG grant.
    Do any of you believe that process needs to be addressed or 
do you think that even though it was waived, that things worked 
out okay, and that the community is satisfied even though they 
did not have the opportunity to participate? To some degree, I 
am begging the question, but was that process acceptable? Does 
the community, as far as you know--
    Mr. Taylor. If you do not mind--and we also want these 
folks to speak--to a very large extent, as I was riding around 
the first couple of weeks after the storm--remember, the first 
week we were not in session, the second week we were, but I 
felt it was important to stay. And really, within days of the 
storm, as I am riding around checking on people, people were 
coming to me, tears in their eyes, policy in their hand, 
saying, ``Gene, I live 25 feet above sea level, and I was told 
I did not need flood insurance because you only had to have 
flood insurance if you had a federally backed mortgage and you 
lived in the flood plain.'' So in some instances the FEMA maps 
were wrong, but in many instances, the unthinkable happened, 
places that had not flooded in the 300 years that people have 
lived here flooded. So people were coming to me saying I have a 
$150,000 policy, but I am not going to get a dime. I am going 
to lose everything.
    So to a very large extent, the way it was written in the 
expedited process was at my request, because I wanted to get 
money in people's hands. It was pretty easy to spot that 
problem. Congressman Watt offered that plan as an amendment, it 
failed by a vote or two in committee, but Senator Cochran 
picked up the ball and God bless him for doing so, and did it 
through CDBG program. But basically took that plan, to cover 
someone up to the amount of their homeowners' policy, up to 
$150,000, for the amount of the damage or the amount of the 
policy, whichever was less. So if a guy only had $20,000 worth 
of damage, he got a $20,000 check and not a $150,000 check.
    So a lot of that was waived to get things going because 
of--really because of the situation, as universal as the 
situation was and the fear that people would give up hope and 
sell out short to the sharks. And the sharks were circling from 
day one, coming around saying, ``Okay, you have more mortgage 
than you are going to get homeowners' policy or you are not 
going to get any money. I will give you 10 cents on the dollar 
for that piece of property.'' We did not want people to lose 
their houses and we wanted to give them hope.
    And again, it is one of the things that we did, I think, 
better than Louisiana. We got our plan going quicker. It was 
not perfect, but at least by Christmas time, people knew that 
help was on the way. So that is why we waived some of those 
rules. I understand your concerns, but it was to give people 
some hope right away that they did not have to lose their 
properties.
    Mr. Cleaver. Thank you. Madam Chairwoman, that is the only 
question. I yield back the balance of my time.
    Chairwoman Waters. Thank you, very much.
    Mr. Neugebauer.
    Mr. Neugebauer. Thank you, very much.
    Congressman, I want to kind of go back to what you were 
talking about with the insurance. I agree with you 
wholeheartedly. We have to have a centralized policy process so 
that people do not have to guess what perils they are insured 
for, that they know if they have a loss, that they are covered.
    I think one of the things that will be an interesting part 
of that, and I wanted to get your thoughts on that is, is that 
a coastal rider that the private sector is going to make 
actuarially sound? Because obviously we do not want to start--
you know how I feel about the government being in any kind of 
business, I get concerned about that. So can you kind of walk 
me through some of the thoughts that you have on that?
    Mr. Taylor. Sure. And I very much appreciate the question.
    If you go back to the 1960's, in the late 1960's, we 
started the National Flood Insurance Program because the 
private sector did not want that business. They thought it was 
a bad investment on their part and so rather than tell people 
who live in the flood plain of Texas or the flood plain of Ohio 
or the Mississippi Gulf Coast that they cannot live there or 
they cannot get insurance, the Nation stepped up and created 
the Federal Flood Insurance Program. And to this day, it covers 
about 53 percent of all Americans, those who live in a coastal 
community or the folks who live on the Great Lakes, who live on 
the Mississippi River, etc.
    What we have seen since the storm, and I followed it closer 
than most because it is so personal, is that on a State-by-
State basis, the insurance industry has pulled out of coastal 
America. Just last week, Ms. Waters told me that, I believe, 
Nationwide, pulled out of the State of California. A couple of 
weeks ago, last week, State Farm said, ``We are out of 
Mississippi.'' A couple of weeks before that, in Congressman 
Joe Bonner's district down in coastal Alabama, one of the 
majors said, ``We are out of here.'' And we actually have a map 
of coastal America where, on a State-by-State basis, company by 
company, they are pulling out. So there is a void there that 
the private sector does not want or, I will play devil's 
advocate, maybe it is a marketing ploy. Because remember, they 
are exempt from the antitrust laws. So they really are the only 
businesses in America who can turn to their competitors and 
say, ``You say out of Mississippi, you stay out of Alabama, I 
will take Florida.'' Maybe it is a game for them to pull out 
for awhile, wait until a couple of weeks before hurricane 
season, come back into the State and say, ``Okay, we are back, 
but we are going to charge you 5 times more money.'' Either 
way, that is wrong.
    So if they do not want the business, and 53 percent of all 
Americans live on the coast, I do then see it as something that 
our Nation should step forward and do as long as it is done in 
a cost-effective manner, and under the Pay-Go rules, we cannot 
pass anything that is not going to pay for itself.
    It is not just Mississippi. I guarantee you, if you take a 
look around Texas, you will see that many of your big carriers 
have pulled out. It was the biggest issue in the Florida 
gubernatorial race this year, and the Republican winner is now 
trying to deal with that in a special session.
    As you notice, the co-sponsors of this bill are the folks 
from Louisiana, the folks from here, and Walter Jones from 
coastal North Carolina. This is a national issue and that is 
why I think we should step forward. I understand your concerns 
about taking something from the private sector. I feel very 
confident in saying this is business the private sector does 
not want, so we are either going to leave those people out 
there exposed or our Nation is going to step up and provide 
that coverage.
    Mr. Neugebauer. Well, I think one of the things that maybe 
we need to do with the private sector, Congressman, is just 
kind of sit down with them and say, how do we make this--
obviously if you have 53 percent of the American people living 
in a coastal area, I have to believe that it is going to be 
tough for them to try to make a living off of the 47 percent of 
us who do not. So I think one of the things that we may have to 
look at is what is the issue that is causing the private sector 
not to--and obviously when you have a catastrophic event like 
we have had where it was a major--and in some of those areas of 
Florida that have had repetitive losses. I mean I understand 
the business model of you keep paying out, you keep paying out.
    So I look forward to working with you in that respect as we 
look at ways to see if we can induce or entice maybe is a 
better term that private sector participation.
    Thank you.
    Chairwoman Waters. Thank you.
    Mr. Sires of New Jersey.
    Mr. Sires. Thank you, Madam Chairwoman.
    Congressman, I could not agree with you more on the fact 
that most people live along the coast. New Jersey is a time 
bomb waiting to happen. Millions of dollars have been invested 
in my region. But I certainly agree with you that we have to 
hold these insurance companies' feet to the fire and we have to 
come to--it is just not acceptable that you have a region like 
this and they have a process not to help the people but it 
seems they have a process to make as much money as they want.
    I have a question for the planner. You made a 
recommendation that some of the functions, I guess, that you 
have to do after you have this devastation, like inspectors, 
and administrators, you said the smaller communities cannot 
handle the magnitude of it. What is your suggestion, what 
should we be looking at? Do you want a regional approach, do 
you want it to be part of the emergency program afterwards? How 
much power are you going to give these people when they come 
into this region and say, you know, the inspectors, because I 
have dealt with inspectors all my life, I was a mayor for 12 
years. Some of them are good, some of them are not so good. So 
what is your suggestion?
    Dr. Bounds. Actually, I would say that probably the best 
thing that could be done would be sort of a three-tiered 
program. And that would be first, for immediate services part 
of what is needed is just--and perhaps it could be provided 
through FEMA, but essentially just on the ground groups of 
people doing even very basic administrative tasks, probably not 
inspections or anything like plan approval because that is 
really not what happens. But sometimes just getting bodies in 
these smaller towns is important.
    A second part of that would be in the longer term, what 
would have been helpful and what is essentially not allowed by 
the CDBG program is for cities to have used the CDBG money 
for--at least the way the program was administered--for 
staffing needs or to even hire short term consultants to 
alleviate some of the issue. And I think that would alleviate 
some of the problems as well.
    And lastly, and I think perhaps most importantly, that what 
we found locally and I think across the coast was that 
nonprofits, working with local governments have essentially 
been able to multiply the capabilities of what the local 
governments could do. And in many cases, much more cost-
effectively than the governments themselves were able to do.
    So I would urge that CDBG funding be aimed at existing 
nonprofit infrastructure so that essentially those are 
basically people who were there, they are frequently very 
knowledgeable and, you know, generally you can get a lot for 
your money that way.
    Mr. Sires. One of the problems that we heard when we were 
in New Orleans was the fact that some of the buildings--some 
people said that they should be torn down, and some inspectors 
said that they needed to be torn down; while other people said 
that they should--they had an engineer there from MIT saying 
that these buildings could be saved. You would not come into 
that situation by having a regional approach, so I just want 
you to think that over, because sometimes it is not as easy as 
just--
    Dr. Bounds. I think you are right, clearly for the larger 
decisions. But I think what we found overwhelmingly was it was 
not even these big decisions that were overpowering the local 
government, it was just volumes and volumes of residents coming 
in saying, ``What do I do? Where can I go for emergency 
assistance? I need to do something, I have to patch a hole in 
the roof of my house, do I need a permit?'' Really very basic 
stuff in many cases.
    Mr. Sires. I guess what I am getting at is that region by 
region, we really have to take a look at what is in the best 
interest of that region.
    Dr. Bounds. I think that is true. I think that the 
nonprofit approach has the advantage that generally, you know, 
local nonprofits are pretty aware of the circumstances on the 
ground. I think that is a real opportunity going forward.
    Mr. Sires. And Congressman, I want you to count on my 
support on anything that you are doing with insurance. I think 
it is just--I felt like I was back in New Jersey when I heard 
some of these people getting into the insurance business.
    Thank you.
    Chairwoman Waters. Thank you, very much. I would like to 
thank you for your participation today. And Congressman, feel 
free to join us here if you would like, or at the table where 
you are. We are just delighted to be here and thank you for all 
that you are doing to educate us about what we can do to have 
better assistance from the Federal Government.
    With that, I will call the next panel, panel two. Mr. Gil 
Jamieson, Deputy Director for Gulf Coast Recovery, Federal 
Emergency Management Agency; Ms. Donna Sanford, director, 
Disaster Recovery Division, Mississippi Development Authority; 
and Mr. Bobby Hensley, executive director, Biloxi Housing 
Authority.
    And while they are coming to the table, let me take a 
moment to thank Ms. Valerie Hill and the Good Deeds Center. 
Where is Ms. Hill? Thank you, Ms. Hill, so very much for 
hosting us here today. We really do appreciate your kindness 
and the generosity of the Good Deeds Center.
    All right, we will call on our first witness. I think we 
are just about settled there. We have a familiar face, Mr. Gil 
Jamieson, Deputy Director for Gulf Coast Recovery, Federal 
Emergency Management Agency. Anything we did not ask you 
yesterday, we will ask you today. Thank you.

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

    Mr. Jamieson. It is good to see you again this morning. 
Good morning, Madam Chairwoman, Ranking Member Biggert, and 
other distinguished members of the panel.
    As you know, but others here do not, my name is Gil 
Jamieson, and I am FEMA's Deputy Director for Gulf Coast 
Recovery. My current position was established to ensure that 
FEMA's programs are consistently and effectively administered 
throughout the Gulf region. I am very proud to say that to help 
me do that, we have established transitional recovery offices 
in all four States in which I am responsible. We have been here 
on the ground since the early days. We have a presence in 
Biloxi, and we have a presence in Jackson. Throughout the AOR, 
we have over 3,300 people, which is, in fact, larger than the 
size of FEMA in its headquarters region itself. In Mississippi, 
that number is 1,000 folks and I am very proud to say that 70 
percent of that number are local folks who are working to 
assist in the recovery of their communities.
    Madam Chairwoman, I know yesterday--I am trusting that you 
have a copy of my full testimony and I would ask that it be 
submitted for the record. I will summarize my remarks very 
quickly.
    Essentially, FEMA has declared emergencies in 44 States and 
the District of Columbia to assist in this response and 
recovery effort. We have reimbursed over $750 million in 
shelter expenses; we have provided approximately $6.3 billion 
to over one million households through FEMA's Individual and 
Household Program; we have provided more than 120,000 
households with travel trailers and mobile homes through FEMA's 
Direct Housing Assistance Program, and we have provided over $7 
billion of public assistance funding throughout the Gulf 
region.
    FEMA is authorized, as you know, to provide temporary 
housing assistance and a point that I continue to make is that 
it is important to note that FEMA's Temporary Housing 
Assistance Program; and our authorities were not designed to 
provide long-term housing solutions, but rather to provide 
eligible disaster victims with temporary accommodations.
    Just very, very briefly, under our Financial Assistance 
Program, we have provided over $2.1 billion in rental 
assistance to over 700,000 households, and 35,000 households 
continue to receive some form of rental assistance payment.
    Under our Home Replacement Program, we are authorized to 
provide up to $10,500, and we have provided $300 million to 
over 30,000 households.
    For the Direct Housing Assistance Program, which I know is 
a concern of the committee's, we have, over the last 17 months, 
provided 120,000 households with travel trailers and mobile 
homes. That number has decreased and we are now down to 28,000 
here in the State of Mississippi. The good news here, as it was 
in Louisiana, is that a good number of those units are on 
private sites where people are actually working to build back 
their homes.
    Congressman Taylor mentioned that the President has 
extended the deadline for housing assistance for an additional 
6 months, which gives us 24 months. That is important because 
it is additional time, not only for disaster victims to be in 
temporary housing assistance, but for us to work with HUD and 
our other partners to find permanent housing alternatives.
    On the mitigation program, I cannot emphasize how important 
I think it is to build this community back stronger. There was 
a good deal of discussion this morning about insurance, about 
mapping, and about advisory base flood elevations which are 
guiding the elevations levels. Building back smarter and 
stronger is clearly--there is a rich opportunity here in the 
State to ensure that we do that.
    We have, through our Hazard Mitigation Grant Program, $433 
million that will be available to the State to assist them with 
elevation of structures and what-have-you. The National Flood 
Insurance Program has paid out here in Mississippi $2.4 
billion; 18,600 claims in Mississippi, and I am very pleased to 
say that over 99 percent of those claims have been settled.
    An issue for many on the panel, I know, is the issue of 
contracting and I am proud to say that here, as well as in 
Louisiana, all of our new contracts now are competitively bid 
contracts, with significant thresholds in there for locally 
owned and minority owned firms.
    One thing that I would like to focus on over here is that 
Congress did, as part of an emergency supplemental, pass $400 
million to FEMA for our pilot program. Madam Chairwoman, just 
the Alternative Housing Program, I think perhaps in question, 
it would be important that we address that, and I will conclude 
my testimony however.
    [The prepared statement of Mr. Jamieson can be found on 
page 77 of the appendix.]
    Chairwoman Waters. Thank you, very much.
    Our next witness is Ms. Donna Sanford, director, Disaster 
Recovery Division, Mississippi Development Authority.

    STATEMENT OF DONNA SANFORD, DIRECTOR, DISASTER RECOVERY 
          DIVISION, MISSISSIPPI DEVELOPMENT AUTHORITY

    Ms. Sanford. Good morning, Madam Chairwoman. Thank you for 
being here and welcome to Mississippi.
    I think you kind of hit on our highlights with our members 
earlier and I would like to update those for you. I would like 
to remind you that over 30,000 homes in the coast area received 
flood damage and our homeowners assistance programs were 
directed to those who received flood surge damage.
    We have a $3.2 billion plan that has been approved by HUD. 
I also would like to point out that plan was approved on April 
1, 2006, but we did not receive a release of funds until July 
of 2006. That was because there was a question from the 
mortgage industry as to whether or not we had appropriately 
addressed environmental issues.
    In our Phase I Homeowners Program, we have received 17,750 
applications. We have deemed that 14,300 of those are 
potentially eligible and we have notified 13,770 that they are 
eligible to close their grants--12,660 homeowners have closed 
their grants and as of Tuesday, we have paid 11,100 homeowners. 
This is 78 percent of the potentially eligible applicants and 
we have issued checks for $738.2 million. It also interesting 
to note that 84 percent of these applicants have indicated that 
they would repair or rebuild their homes here on the coast.
    In July of 2006, we began taking applications for our Phase 
II Homeowners Program. This included residents who were either 
inside or outside the flood zone and regardless if they had 
structure insurance. There is an eligibility requirement that 
the home be 120 percent of area median income. To date, we have 
received 7,100 applications for this program; in addition, the 
3,450 Phase I applicants who did not qualify will be rolled 
into this program. That brings us to 10,550 applications that 
we are currently working, and we have begun damage assessments 
and title work on all of these.
    With both of these phases, we are working with 24,850 
applicants. This represents 83 percent of the 30,000 homes that 
received flood damage on the coast.
    In addition to this part of our Homeowners Program, we are 
offering $30,000 elevation grants to those homeowners who wish 
to elevate and are a part of Phase I and Phase II.
    We have provided $5 million for the local governments for 
inspectors. We have issued 16 grants for a proposed 85 
additional inspectors on the coast. We provided $5 million to 
the State auditors office for the Katrina fraud and 
investigations team. This team investigates fraud in the 
application process and also contractor fraud related to 
rebuilding.
    In addition to the CDBG monies that we have utilized for 
homeowners, $390 million in mortgage revenue bonds have been 
issued, and $157 million of this is Go-Zone. These issues have 
assisted 400 families on the coast. This provides low-interest 
rates for these homes and also a 3 percent closing cost, which 
does not have to be repaid.
    As you said, there were 8,600 rental units on the coast 
that were destroyed or severely damaged, and about 8,200 of 
these were located in the coastal counties. $38 million is 
allocated annually in 2006, 2007, and 2008 in low-income tax 
credits in the Go-Zone. To date, 2,627 units have been funded 
in the coastal area. This represents 32 percent of the 
destroyed or severely damaged units. It is estimated that these 
income tax credits will provide a total of 5,000 rental units 
in the lower six counties of Mississippi.
    A draft plan was submitted to HUD earlier this week to 
address assistance to small rental properties to increase the 
availability of affordable units. This plan allocates $250 
million for this program. Approximately 2,500 rental units, 
with less than nine units, fall into the FEMA serious damage 
category. Small rental units for this plan is defined as 10 or 
less units for the owner, with the ability for the State to 
expand to 40 units, depending on funding availability. This 
program is open to both new and existing rental units. In 
exchange for assistance, the owner will agree to accept 
limitations on rent and income levels of their tenants.
    Our next witness is here and he is Delmar P. Robinson, 
chairman, Board of Commissioners, Biloxi Housing Authority.
    Chairwoman Waters. Thank you, very much.

      STATEMENT OF DELMAR P. ROBINSON, CHAIRMAN, BOARD OF 
            COMMISSIONERS, BILOXI HOUSING AUTHORITY

    Mr. Robinson. Thank you, Chairwoman Waters, Ranking Member 
Biggert, and other members of the panel. We appreciate very 
much the Biloxi Housing Authority being invited here to give 
testimony regarding the aftermath of Katrina. Katrina hit us in 
Biloxi and hit us hard.
    Prior to Katrina, we were prepared to move into an 
additional 100 units of our HOPE VI project, but on the 29th of 
August, Katrina visited us. We lost 700 affordable homes and 
apartments with 1,500 family members; 172 of our units were 
completely destroyed.
    After a day or so of individual recovery and staff 
recovery, we went to work. Since that time, we have partnered 
with volunteer organizations in gutting out our units. With 
small sums of monies from HUD, $7.8 million and insurance 
funds, we have been able to rehab our units, where by the end 
of the summer, we will have 400 of these 700 units on line.
    We could not have accomplished this without the support of 
America Corps and Hands on America USA who assisted in this 
recovery process. Last month, our Mayor Holloway targeted the 
Housing Authority for the City of Biloxi as the lead agency in 
affordable housing recovery for the City. And we have accepted 
that challenge. We have had support and we interfaced and have 
for about a year now with Living Cities, with the Enterprise 
Community Partners, and with Fannie Mae to begin this process.
    We unveiled a 5-year plan last week for 1,500 affordable 
units-- that is, public housing affordable housing and mixed 
income homeownership houses. We feel confident that over the 5-
year period, that we will be successful, however, we need your 
support.
    We presented a proposal to our Congressional delegation in 
Washington on the 30th of September 2005 of our needs. We did a 
needs assessment, and it was there by the 30th of September. We 
met with our delegation on the 18th of October 2005. You 
appropriated the funds I believe, the CDBG funds, in December 
of 2005. Yesterday, we were able to meet with our partners here 
in the State of Mississippi, who outlined the process for us to 
use in receiving those funds. We do need assistance in 
expediting the funds that Congress appropriates. I know red 
tape and I know bureaucracy--I served 34 years for the Federal 
Government, and then I retired. However, we are dealing with 
flesh and blood.
    I have four specific proposals:
    We have a 44-acre site in the City of Biloxi which is now 
under Keesler Air Force Base. They no longer will be using this 
site for housing. We need it. We need it transferred to the 
Authority.
    We need Congress to continue funding many of the proven 
community development programs that have been crucial in our 
ability to provide housing to address the needs of not only 
residents in Biloxi but all residents throughout the United 
States.
    We also urge Congress to extend the placed-in-service 
deadline for projects funded with Go-Zone low-income housing 
tax credits. The Mississippi Home Corp's final round is in 
2007. We need at least 2 years from that date in order to get 
them placed in service.
    Insurance--major issue. And to be more specific, we will 
complete a 76-unit senior citizen complex within the next few 
months.
    The insurance increase has been from $5,400 to $8,000 per 
unit. We would have only received 76 percent of that $5,400 
insurance need from HUD because they said that we are not going 
to be funded at the level that we should.
    The Biloxi Housing Authority appreciates the support we 
have received from our elected officials. Senators Lott and 
Cochran, Representatives Taylor, Governor Barbour, and Mayor 
Holloway. And with your continued support and action on the 
items we have outlined, we will be able to replace the housing 
that Katrina washed away.
    [The prepared statement of The Biloxi Housing Authority can 
be found on page 74 of the appendix.]
    Chairwoman Waters. Thank you very much for your testimony.
    I will yield myself 5 minutes for questions. Where do I 
start?
    Mr. Jamieson, I do not want you to take up the entire 5 
minutes, but I want you to again just tell us, for all of the 
people who are still in FEMA trailers, what are your plans?
    Mr. Jamieson. Madam Chairwoman, as we spoke yesterday, the 
deactivation rate of those in trailers is now almost 300 a 
week, so a lot of those folks are finding permanent housing 
alternatives. We are working with the voluntary organizations 
here to, for those who were in Section 8 housing and public 
housing before, as units become available, we are sharing lists 
back and forth so folks can occupy those units.
    Here in Mississippi, we also have the Alternative Housing 
Program, which I mentioned at the end of my testimony, and that 
was where Congress was asking us if there is a better way to do 
business than mobile homes and travel trailers. Mississippi did 
benefit from the awards of the Alternative Housing Program and 
so in conversations right before this hearing, we think that a 
good number of those folks, given the rate of folks returning 
to their homes as well as those that may be available to occupy 
some of these alternative housing programs, we think there is a 
good path there to certainly interim, and in some instances 
permanent, housing solutions for those folks.
    Chairwoman Waters. All right, thank you very much.
    Mr. Robinson, I would like to ask you to clarify for me 
some of what you just testified to in relationship to the 
rebuilding and the replacement of the units that were lost as a 
result of the hurricane. Am I to understand that you have been 
doing this without assistance, with CDBG money or without the 
HUD allocations? Would you explain to us again?
    Mr. Robinson. We received $7.8 million in emergency funds 
from HUD for the rehabbing of facilities. Our facilities were 
insured, not to full capacity, but we did receive these funds. 
We received capacity building grants from both Fannie Mae and 
from Enterprise Community Partners, and a tremendous amount of 
volunteer work.
    Now the funds that have not been forthcoming are for the 
completely destroyed--
    Chairwoman Waters. What are they telling you about--
    Mr. Robinson. We have been told that we are to receive $41 
million for the replacement of units that were completely 
destroyed.
    Chairwoman Waters. When is that supposed to be forthcoming?
    Mr. Robinson. It is to be forthcoming when we submit the 
papers that were delivered yesterday.
    Chairwoman Waters. I thought that was what I heard in your 
testimony, that you had just heard a response yesterday.
    Mr. Robinson. Yes, ma'am.
    Chairwoman Waters. It seems to me that it is commendable to 
have all of the volunteer support that you have had, but it was 
clear to me in listening to you that you have not gotten the 
money for the replacement from HUD. I do not know why it has 
taken so long. That goes to the top of my agenda to check out. 
When I go back to Washington, I will call Secretary Jackson and 
I will ask him to help speed up the funds so that you can get 
the work done. And I thank you for working hard to get the 
replacement units for poor people who probably have no other 
place to live.
    Mr. Robinson. Thank you, Madam Chairwoman. We are dealing 
with flesh and blood; we are not dealing with widgets.
    Chairwoman Waters. Thank you. Do you have any other 
recommendations for us to help your agency?
    Mr. Robinson. I had better write them down.
    Chairwoman Waters. All right, thank you very much.
    Let me just ask very quickly, Ms. Sanford, you are 
responsible for all of the CDBG money and you gave us those 
wonderful statistics and the data on what you have been able to 
do. You have a second round and in the second round, you are 
funding people who applied in the first round that you did not 
fund. And it looks as if the second round is not eligible for 
$150,000, they are eligible for something less, $100,000. What 
is the difference?
    Ms. Sanford. They are actually eligible for $100,000. In 
the first round, the $150,000 is capped by the amount of 
insured value of the home because in round one, they were 
required to have structure insurance and be outside of the 
flood zone.
    Chairwoman Waters. No, stop one moment. To get CDBG money, 
one of the requirements was that you had to have had flood 
insurance. What about people who did not have insurance, were 
they the ones who needed it most?
    Ms. Sanford. They are included in Phase II, and the 3,450 
who did not qualify in Phase I, basically 50 percent of those 
were inside the flood zone and they had applied and the other 
50 percent did not have a structure insurance. So that is why 
they are covered under Phase II.
    Chairwoman Waters. All right. Under this Phase II, you are 
saying that they are eligible for the same amount of money, 
$150,000?
    Ms. Sanford. They are eligible for $100,000.
    Chairwoman Waters. For how much?
    Ms. Sanford. $100,000.
    Chairwoman Waters. Is that less than in the first phase?
    Ms. Sanford. Yes, ma'am, the first phase--
    Chairwoman Waters. Why is it $50,000 less?
    Ms. Sanford. That was the amount of money that we set 
aside.
    Chairwoman Waters. But is there not a problem about--I mean 
could somebody not go to court based on equal protection under 
the law and say you gave them $150,000, and now you are telling 
me I only get $100,000. What is wrong with this picture?
    It just seems as if something is wrong with that. I do not 
know. You could maybe get sued, I do not know. Why are you 
doing it that way?
    Ms. Sanford. That was a policy decision that was made. But 
I would like to point out that in Phase I, we changed policy as 
we went through and calculated grants. Originally they were 
capped at their insured value. We found that the insured value 
in most places, they were underinsured, so we added an 
additional 35 percent to that. We also went, instead of a 
percentage of damage, we went to a straight damage estimate. We 
gave them the benefit of the doubt and used an SBA estimate 
which was more. So there is a possibility that changes will be 
made.
    Chairwoman Waters. Okay. Well, let me tell you what we are 
looking at. Despite the fact that you have done a reasonably 
good job, there are several things that we are looking at with 
this recovery program. Number one, Congress evidently somehow 
supported a waiver from what we normally do with our CDBG funds 
and it is, what 70 percent--what is the rule. The targeting 
requirement normally for CDBG is 70 percent and it can be 
reduced to 50 percent in this kind of a crisis, and it was 
waived, everything was waived for Mississippi. Is that right?
    Ms. Sanford. We received a waiver for the homeowners 
program. Each waiver we received was for the specific--
    Chairwoman Waters. Yes, but see, what I am worried about is 
that you received that waiver and then you gave money to people 
who were already insured, which appears that the people who may 
have been a little bit better off, because they had insurance, 
were getting the assistance that they needed and you had done 
the waiver that precluded you from spending the lion's share on 
the people who were less well off.
    Ms. Sanford. Their grant was reduced by the amount of 
insurance proceeds that they received. So if a home was damaged 
and the estimate was $100,000, and they received $50,000 from 
their structure insurance, then their grant was $50,000, not 
$100,000.
    Chairwoman Waters. Yes, but I am not--at this time, I am 
not focusing on the amount of the insurance, we know that both 
in Louisiana and Mississippi, that you deduct basically, I 
guess, the amount of the insurance that they get. What I am 
focusing on is, first of all, a criteria that says if you 
already had insurance, you get at the head of the line and 
somehow you get taken care of. Even if it is for something less 
than the maximum, $60,000, $50,000, $40,000, $30,000, or 
whatever. And then also included in that policy, there is no 
targeting of the neediest or the low income or the moderate 
income. And I am just asking about this, because as we take a 
look at trying to help fix our CDBG program for this crisis, 
whether or not we need to direct how this is done, so that we 
can make sure that we take care of everybody. It appears that--
I do not know if this is true--it appears that what you have 
left over is now what you are making available to perhaps the 
people who needed it the most.
    Mr. Taylor. Would the gentlewoman yield?
    Chairwoman Waters. Yes, I will certainly yield to the 
gentleman from Mississippi.
    Mr. Taylor. Madam Chairwoman, again I would just remind 
people that the program that we did pass was a hard sell. And 
if you recall, Congressman Watt's amendment did not pass 
Financial Services, it was voted down on almost a party line 
basis unfortunately. And it really was the good work of Senator 
Cochran in his capacity as chairman of Appropriations that made 
this happen.
    What I found in going to bat for folks is that there was 
very little sympathy in Congress, collectively, for the folks 
who did not buy insurance. We could make the case for the folks 
who bought insurance, who thought they had taken all the 
precautions and were denied, out of what I thought was a really 
flimsy defense on the part of the insurance companies, but they 
were denied. And so it was the best case we could make, the one 
that seemed to resonate with the majority was look, these folks 
took all the precautions that you as a homeowner have taken, 
and something unbelievable happened to them, so we ought to try 
to make them whole.
    So I understand your frustration with what Ms. Sanford is 
telling you, but it was the will of Congress and again, even 
that bailout did not pass through the House. It really was 
Senator Cochran in his capacity as chairman of Appropriations 
over in the Senate, who made it happen.
    Chairwoman Waters. Well, thank you, very much.
    There are further concerns around this issue that perhaps 
you can help me with. It is my understanding that those 
decisions were not the decisions that were made by Congress, 
but rather by the State, relative to--except for the waiver. We 
know that the Senator helped out a lot in doing that waiver.
    Mr. Taylor. And you helped out a lot. Unfortunately, you 
were not on the winning side of that vote. But you know, your 
heart was there, but the majority was not there. The majority 
has since shifted in Congress.
    Chairwoman Waters. Not on the waiver, we were not a part of 
that, that took place, I think, over on the Senate side.
    Mr. Taylor. Again, the original proposal was for the people 
who had homeowners' insurance. Even the proposal that 
Congressman Watt brought up last year was for the people who 
had homeowners' insurance because everyone agreed that was just 
an unforeseen occurrence. It has since been expanded to help 
some other folks, and rightfully so.
    Chairwoman Waters. But Congressman, let me just ask this. 
On the question of flood insurance, I do not know if it is true 
in Mississippi or not, but over in Louisiana, there were people 
who were given mortgages, who were told they did not need flood 
insurance, because they were not even in the flood plain. So 
people were given mortgages by the bank that did not require 
them to have any flood insurance. They did not know that they 
were even in the flood plain and then all of a sudden, they are 
at the back of the line for getting some help. And that is what 
I am trying to understand. How do we fix that for the future?
    Mr. Taylor. If I may, the flood maps were woefully 
inadequate.
    Chairwoman Waters. Okay.
    Mr. Taylor. The flood maps were mostly designed, in a 
nutshell, to take care of rain coming down, streams flowing 
out, never envisioned water coming in. You saw where my house 
used to be.
    Chairwoman Waters. Yes.
    Mr. Taylor. I was not in the flood plain as determined by 
FEMA. Now I had flood insurance, because if I could see the 
bay, I figured something might come see me one day.
    But legally, I did not have to have it. And some of my 
neighbors actually were burned that way. So now, that is being 
changed.
    Chairwoman Waters. Well, that is good, because we do not 
want people penalized because we have bad maps and the banks 
will extend the mortgage and not require them to have such 
insurance. Then when we have a disaster, we tell them, well you 
go to the back of the line because you didn't have flood 
insurance.
    So with that, let me just move to our ranking member. I 
have taken up much too much time. Mrs. Biggert.
    Mrs. Biggert. Thank you very much, Madam Chairwoman.
    Ms. Sanford, a couple of things, and maybe Mr. Jamieson, 
and I am not sure about Mr. Robinson, this would apply. When we 
were in New Orleans, we found that one of the problems of 
trying to get out of this cycle of where you start to address 
the issue was that there is a lot of property where there was 
not a clear title and people were not available and people 
actually had, you know, the property had kind of just passed 
down generation to generation. And so in order to start doing 
something, that has to be addressed. It does not look to me 
like that is such a problem here, but if you could address 
that.
    And also, as we drove by on the coast today and by the 
beach areas, there are so many houses that, you know, all you 
see are some cement stairs and a slab left of those. One of the 
concerns, I guess, is the elevation levels and you talked about 
the $30,000 that might be applied to that. But in order for 
people to really begin to rebuild and to make sure that they 
are within those levels which will be set, it seems like this 
has to move forward. Do you have any idea when this will be? 
And it applies, does it not, to all the coastal areas, I mean 
California, Texas, Florida and whatever, New Jersey. And it 
seems to me that this is really an impediment to people being 
able to rebuild.
    Ms. Sanford. First to address the title situation. We have 
the same situation in Mississippi that they have in Louisiana. 
We basically have performed 17,750 real estate transactions, 
and title searches were done on all of those. We are adding 
another 7,100 with Phase II. This has been accomplished with 
the help of the chancery clerks, through much overtime and 
working weekends. And again, it is just a real estate 
transaction, is the issue that we have dealt with many times on 
an individual basis with the applicant.
    As far as the elevation grants, we have patterned our 
program after the NFIP ICC grants. We have submitted to HUD a 
request to allow this to be a compensation program. We provide 
$15,000 for the permit to elevate and then $15,000 for the 
certificate of compliance, just like the ICC program. We have 
not received a response from HUD, we are waiting on that. 
Again, we want to do it as a compensation program so that we do 
not have to do environmental assessments on every home that is 
included.
    Mrs. Biggert. Mr. Jamieson, could you--
    Mr. Jamieson. Yes, I cannot improve on the title answer 
that you got there. I would like to address just the mapping 
issues very quickly. Congressman Taylor is exactly right, the 
maps that were down here did not reflect the true risk in many 
instances. What FEMA has done immediately following the 
disaster is that that we offered these advisory base flood 
elevations which is actually reflecting the flooding that did 
occur, the wave heights they did experience. So as people begin 
to rebuild, they have some perspective in terms of what those 
elevations might be.
    These are not part of the National Flood Insurance Program. 
The preliminary maps for this area will be out in approximately 
the August time frame of this year, that will be engineered 
studies, if you will. We call them preliminary because they 
then have to go to the community and there is actually an 
adoption of those maps, if you will, that serve as a basis for 
land use.
    So there are advisories out now. The preliminary maps will 
be available in the August time frame.
    Mrs. Biggert. So if there are preliminary maps in August, 
those would not be the final, and then would there be a comment 
period and whatever goes into it?
    Mr. Jamieson. There would, that's exactly--we call them 
preliminary because they go in and they are reviewed by the 
community in terms of the science and the zoning that occurs, 
velocity zones that are there along the coast, and other levels 
of deep flooding that may exist. And so many times there are 
local contractors who look at the hydrology of those and 
disagree and so there is the process, due process, if you will, 
before the adoption occurs.
    Mrs. Biggert. So can you give an approximation for a final 
decision on those?
    Mr. Jamieson. It's a contentious process and, you know, it 
can go into a deliberative phase and sometimes it can take 6 
months and sometimes it can go quicker than that. But there 
is--you know, in the areas where the Congressman lives, there 
is obviously deep flooding there and those are hard decisions 
in terms of, you know, how--when you are talking about 14 feet 
and 15 feet and 18 feet elevations in those areas.
    Mrs. Biggert. So people who would want to rebuild and let 
us say they took an estimate and it turned out to be several 
feet short of what is recommended or what is the elevation, 
then what would happen?
    Mr. Jamieson. If they rebuilt based on our advisories?
    Mrs. Biggert. Yes.
    Mr. Jamieson. They would be grandfathered into the program 
as having provided protection that was equivalent to what we 
would eventually recommend. And that is the case, as the 
Congressman and many of you probably know, in many instances, 
you know, we are grandfathering homes in to what becomes new 
science or new elevations.
    I think what is very, very important here is there is a 
rich opportunity as the community rebuilds to build back 
stronger and smarter to avoid damages the next time out.
    And I was just also advised by folks here that those 
preliminary maps do become effective, regardless of any 
appeals, within 12 months after the preliminary map is issued.
    Mrs. Biggert. Thank you.
    Chairwoman Waters. We will turn now to Mr. Cleaver.
    Mr. Cleaver. Thank you, Madam Chairwoman.
    My concern is why is it that Bechtel and Halliburton always 
show up, whether it is a flood or a war or a circus? I mean, 
whatever it is, they always show up. What is it about their 
company that allows them to be so multi-faceted?
    Mr. Jamieson. Congressman, I am not in acquisition, but I 
will give you my best shot on an answer on that. I think, 
again, as Congressman Taylor well knows, and using a baseball 
as an analogy, FEMA was clearly caught on the short hop when 
this disaster occurred. We were in the process of doing a 
competition, but that competition had not concluded. Those 
contracts were not definitized, and many of them are still not. 
But at the same time, we needed to get a resource out there as 
quickly as we could to be responsive in terms of the rebuilding 
process and hauling and installing mobile homes, and what-have-
you. I do not make apologizes for that, I do not make excuses 
for that. It was wrong, it was more costly than it needed to 
be.
    But I think under the competitive process that FEMA goes 
through, and we now are going through for those contracts, we 
need a capacity to deal with a catastrophic disaster in terms 
of what we have experienced here. We are not saying that it is 
one company or another who necessarily qualifies, it is a 
competitive process under the A&E process, and nationally any 
firm has the basis to respond.
    What we have done in both the pre-existing contracts that 
you spoke of and the new ones, is that we have put very high 
thresholds in there for subcontracting to minority owned firms, 
to disadvantaged firms, to locally based firms, so that those 
large contractors who can do the supervision, are drawing on 
the local economy for their workforce, to get the work done.
    Mr. Cleaver. Yes, I appreciate--you and I talked about this 
yesterday--I appreciate the way things have been corrected and 
the reason I am concerned about it and appreciate the new 
direction that FEMA has taken is that, you know, if the public 
doesn't trust the government to do the fair thing, it damages 
our ability to help because people come in automatically 
assuming that they are going to get the short end of the stick 
unless they are the wealthy, the connected. So I do appreciate 
that.
    The other issue is for me, and the gentleman representing 
the Mayor's office is not here, I do not think, but it seems to 
me that if the State always handles these disasters, that the 
local community and the locally elected officials are, to some 
degree, frozen out of the process. And I know that as a former 
municipally elected official--actually three of us up here have 
been elected from a municipality--we always challenged 
anything, whether it was the COPS grant or whatever, where the 
money went directly to the State, because we always believed 
that we lose and we also are the people most able to understand 
the local needs.
    This is already a done deal now, so I am not--there is 
nothing we can do about it. But should this happen again, I 
would really be interested in hearing from local folks whether 
or not they believe they could address the local problems 
better than the State.
    Okay, thank you, thank you very kindly.
    It is rambling. I mean I am always interested in the local 
community dealing with problems as opposed to the State. That 
is just part of who I am. So there is no need for a response. 
The Mayor would probably have a better response. Thank you.
    I yield back the balance of my time.
    Chairwoman Waters. Thank you, very much.
    Mr. Neugebauer.
    Mr. Neugebauer. I thank the chairwoman.
    Mr. Jamieson, I think my colleagues probably expressed the 
frustration for all of us is that, you know, when we, Congress, 
stands up and allocates what we think is going to be the 
resources needed to address problems of the American people and 
then when we have these issues where things are--the $500 
commode seats in military aircraft, I mean those kinds of 
things make it difficult for policymakers to go back home and 
say well, we did the right thing, we just did not do it very 
smart.
    But, I understand the issue of all of a sudden you wake up 
and you have millions of people displaced, and you have debris, 
billions of tons of debris maybe. I guess the question is, and 
as my friend from Mississippi was saying awhile ago, could you 
actually get some of these companies that have the resources to 
respond to that magnitude? Would they have come in and said 
look, all we want is a 1-week contract until we can bid this 
out to local contractors? Would they have given you--or one 
month? I mean how do we bridge between being able to meet those 
needs now and then being able to move to where we can, you 
know, go to a bid situation? And what has FEMA learned, I 
guess, through this process is that hopefully we do that a 
little better in the future.
    Mr. Jamieson. Thank you, sir, I appreciate the question. 
And at the risk of Congressman Taylor making my hair shorter 
than it already is, I think FEMA has learned from that 
experience. It is in no one's interest to not employ the local 
workforce and to jump start the economy as part of the recovery 
effort. So let me speak of debris and say what FEMA has done 
there.
    I think that part of what we do as an option is that we 
offer the local community the ability to use the Corps of 
Engineers if they cannot contract themselves. The Corps of 
Engineers has also brought in some large contracts to do that. 
But we are putting a significant emphasis this year to not only 
offering the option for local governments to contract with 
their own resources to do this, but to also offering, as 
opposed to saying if they cannot do it, go to the Corps of 
Engineers, to provide force packages and technical assistance 
to step in with the communities and help them contract, so that 
we can better engage the local workforce. And we have also 
established a system where--unfortunately every time there is a 
disaster, there are a lot of bad folks, quite frankly, who come 
along, and so what we are trying to do is establish a reference 
system, if you will, of reputable contractors that a local 
government could use that have worked with us before and that 
we know are good.
    So, you know, we have learned from some of those lessons. I 
will also tell you that as part of what we are doing now 
throughout the competitive process, the contractors here in 
Mississippi, for instance, that are doing the maintenance and 
deactivations of the mobile homes that are there, there are 
some 10 of them that are there, five of them are 8(a) and 
minority owned businesses, there are also women owned 
businesses and 8(a) contractors that are there. So of the 10 
that are there, all of them are represented either locally or 
through minority owned businesses.
    Mr. Neugebauer. Just a follow-up question then. What is 
the--obviously you bought a lot of trailers. So then the 
question is now, as these trailers are being deactivated, what 
are FEMA's plans for those trailers?
    Mr. Jamieson. Sir, we did buy a lot of trailers and FEMA 
took a lot of hits because we bought a lot of trailers. I think 
that if I may, I think some of that is a little overstated, 
because part of the slowness that was here on the front end was 
the fact that we had to award contracts, we had to wait for 
those units to be produced to roll them onto sites. So the fact 
that we bought a little bit more, as a guide, an operational 
person on the ground does not bother me a whole lot, because I 
think having a certain amount of them in reserve to offer a 
quick response is a good idea.
    Of those travel trailers that are here on the ground, those 
that we can refurbish and use and return to an inventory, we 
will do that. But we are also looking to excess those units, to 
donate those units. In Louisiana, we have already started the 
donations policy, and to sell those units themselves to folks 
who want to buy them and use them as a form of housing 
assistance. In other words, they would move off our caseload of 
our supporting them and they would use them as permanent 
housing alternatives.
    Chairwoman Waters. Thank you, very much.
    Mr. Sires.
    Mr. Sires. Thank you, Madam Chairwoman.
    Mr. Jamieson, what is the actual number of families in 
trailers? I keep getting all these different numbers.
    Mr. Jamieson. Sir, in Mississippi, it is approximately 
28,000 folks.
    Mr. Sires. 28,000?
    Mr. Jamieson. Those are units, incidentally, those are not 
people. You know, the average size of a family is three folks, 
so those are 28,000 units.
    Mr. Sires. This question, I guess, goes to Mr. Robinson. 
Mr. Robinson, you stated before that you had 700 units that 
were wiped out by Katrina.
    Mr. Robinson. We had 172 that were completely destroyed. 
The others were rehabbable.
    Mr. Sires. So you have rehabbed about 400?
    Mr. Robinson. We will have 400 rehabbed and ready for 
occupancy, all of them by the end of the summer, although we do 
have people moving in the end of this week, because we schedule 
the construction where as soon as it is completed we can move 
the people in.
    Mr. Sires. Have you made an effort to identify the people 
living in the trailers who will want to come back or maybe who 
lived in those places?
    Mr. Robinson. Yes, we have. The first priority is for 
people who were living in those units. That is the first 
priority.
    Mr. Sires. What happened to your senior population in those 
places, are they in trailers?
    Mr. Robinson. Sir?
    Mr. Sires. Your senior population and your disabled.
    Mr. Robinson. Okay, I did not address that at the outset. 
We made provisions as much as we possibly could to relocate 
people to other housing complexes in the State and outside of 
the State, the farthest away was Tennessee--Memphis and 
Chattanooga. We do make every effort to stay in contact with 
our tenants and this is why I indicated earlier that we are 
dealing with human beings, so those people who left have first 
priority in the units when they return.
    Mr. Sires. So you keep track of them and you do offer to 
let them come back to their homes?
    Mr. Robinson. Yes. In fact, they contact--
    Mr. Sires. Well, I commend you because I have not heard 
that--
    Mr. Robinson. They contact me at my home at night.
    Mr. Sires. I did not hear that in New Orleans, let me tell 
you. They are still trying to put a list together.
    Mr. Robinson. I live in the community.
    Mr. Sires. Great job. Thank you.
    Chairwoman Waters. Thank you.
    Mr. Robinson. Thank you.
    Chairwoman Waters. Thank you very much, panel. Before we 
leave, I just want to make sure that I understand very clearly 
from Ms. Sanford how your two phase program works.
    In your first phase program, the significant criterion is 
that you should have had insurance, and in that program, you 
could get up to $150,000. In your second phase program, you 
have additional criteria, that is you have to be 120 percent of 
median, which means here that would be about what, $30,000?
    Ms. Sanford. For a family of four, that is $57,000.
    Chairwoman Waters. Okay, about $57,000. Your money is 
handled a little bit differently in the second phase. You have 
to have counseling and you have to go into a disbursement 
system, which means that you do not get the money, but the 
money would get paid to the contractor or the person providing 
the service, is that right?
    Ms. Sanford. No, ma'am. The money would be put into a 
disbursement account in the name of the applicant. They would 
be able to draw that money as they achieve certain permits 
through the local permits department. It will not be paid to a 
contractor.
    Chairwoman Waters. Is that the same--did you have that 
requirement in Phase I?
    Ms. Sanford. No, ma'am, we did not, it was a compensation 
plan.
    Chairwoman Waters. Why is there a difference in the two 
phases?
    Ms. Sanford. One of the differences is that this is inside 
the flood zone and we felt that the destruction--
    Chairwoman Waters. I cannot hear you.
    Ms. Sanford. We felt that the destruction was greater 
inside the flood zone and this will assure that those houses 
are hardened and that we have affordable housing stock in that 
area.
    Chairwoman Waters. Okay, let me ask you, because it worries 
me a little bit, in that if you have flood insurance, you are 
eligible. What if you make $70,000 a year, so two people are 
working, you are making $60,000, $70,000, $80,000 a year, you 
are not--you did not have flood insurance. You could not get in 
the first phase and now you are not eligible for the second 
phase. What happens to that hard-working, middle income 
American who does not fit in either of these phases?
    Ms. Sanford. You are addressing those people who were 
inside the flood zone without insurance over 120 percent of 
AMI? We have asked all homeowners that received flood surge 
damage to come in and register their needs and fill out our 
application. And we are addressing the buckets of people as we 
have funds to do so and as we can write a program. So we 
encourage those people to come in and apply so that we can 
identify them and see the need of those applicants.
    Chairwoman Waters. All right. We see what the rules are, 
now you have rules and these rules appear to eliminate the 
possibility for some people who have been damaged by Katrina, a 
family of four with $70,000 and four kids or so, I mean they 
should be eligible in my estimation, and I think you are 
setting yourself up for a lawsuit. So I want you to take a look 
at this, because it appears that there are some people who are 
going to be left out and the people who are going to be left 
out of receiving any assistance, are not the rich, but just 
good hard-working people who earn $60,000 and have four kids. I 
mean, I think they should also be covered. So you take a look 
at that. I will talk with the Congressman about it to see if he 
wants to deal with this issue in any way, but I bring to your 
attention that which is disturbing; people who have lost their 
homes just do not need that kind of hassle.
    Thank you, very much.
    Chairwoman Waters. All right. I am sorry, Representative, 
please, do you have any questions you would like to ask?
    Mr. Taylor. Madam Chairwoman, again, thank you for your 
time and while we have the folks from FEMA here, something I 
would like the committee, a thought I would like them to leave 
with. FEMA had a tendency for expediency to want to put 
trailers in clusters. I found that most homeowners wanted to be 
back on their lot. In a world where they have lost everything, 
the only bit of certainty they had was that little piece of 
ground, where their neighbors used to live to the left of them 
and to the right of them. And we have had trouble with the 
group sites, for whatever reason, we have had more crime there, 
we have had drug dealing, and in some instances, even gangs. 
And so if there are going to be group sites, one message I 
would leave since I am sure the Mayor would have delivered this 
if he was here, that is if you are going to have group sites, 
then FEMA needs to pay for the additional police that would be 
necessary. But to the greatest extent possible, even though it 
is harder, I would really encourage FEMA to continue the 
practice of trying to put people back on their property, if 
they can, to give them a sense of certainty.
    The second thing is really a question, and an observation 
for Mr. Jamieson. And I have been through this and it is water 
under the bridge for me. I do not want it, but I can see where 
other people are going to raise the question that if they lived 
in an area that was not in the flood plain, but is going to be 
in the flood plain in the new set of maps, they are going to 
find that they cannot get ICC. Now I have raised this question 
directly to Director Paulison and so again, I am passed it, I 
have already put my pilings down and took care of it myself, I 
do not want the money, but for the sake of all those other 
folks, that has to be addressed, because you are going to have 
a lot of angry people when those new rules come out, who think 
they are going to be eligible for that $30,000, so that they 
are trying to prevent future losses, who are going to be told 
the same thing I was told, you were not in it, but now you are 
in it, so you are slipping through the cracks. So I want to 
impress upon this committee that needs to get fixed. You 
understand the issue because you are down here, I do not think 
the guys in D.C. really do understand that issue, but that has 
to get fixed and it has to get fixed very, very quickly. And if 
you cannot fix it administratively, then this Commission needs 
to fix it legislatively. But I would welcome your thoughts on 
that.
    Mr. Jamieson. Congressman, thank you, and for the other 
panel members, increased cost of construction is what the 
Congressman is speaking about, and that is for those folks who 
are grandfathered in and they will be grandfathered in if they 
have not been in the flood plain with the new maps, but they 
are not entitled to this coverage of what they may need to do 
to build those structures up, and so I will carry back that 
message.
    I just have two very quick points, Madam Chairwoman, if I 
may.
    First of all, Congressman, thank you, you have been through 
it down here and I appreciate your opening statements and your 
remarks. FEMA has tried hard to be responsive. We were not 
always all the time, we were sometimes slow, but I do 
appreciate your recognition of what we tried to do down here.
    And second, on the issue of travel trailers, we do have 80 
percent of those trailers that are down here on private sites. 
We always try to put those travel trailers on private sites if 
we can. In many instances, because of debris in the early days, 
we did need group sites. I do not mean to suggest that does not 
happen, but I personally met with Mayor Warr probably 2 or 3 
weeks ago to address the security issues and we have doubled 
our security in those parks and we have also doubled our 
management in those parks and we are working very, very closely 
with local law enforcement. If we see trends occurring in those 
parks in terms of crime, whatever it may be, we are doing what 
we can on the civil side to increase our presence there in the 
park and work with local law enforcement to quite frankly stamp 
it out before it gets any worse.
    Chairwoman Waters. Thank you very much, and we do 
appreciate your presence here today and the testimony that you 
have shared with us.
    And with that, I will call our third panel, thank you.
    Mr. Derrick Evans, executive director, Turkey Creek 
Initiative; Mr. Jason Mackenzie, North Gulfport Community Land 
Trust; Ms. Lillie Bender, Unity Homes Project; Mr. Rodger 
Wilder, president, Gulf Coast Community Foundation; Mr. John 
Jopling, Mississippi Center for Justice; Mr. William Bynum, 
chief executive officer, Enterprise Corporation of the Delta; 
Ms. Diane Collier, tenant; and Mr. Brian Sanderson, Gulf Coast 
Business Council.
    Please join us at the table.
    Mr. Sires. [presiding] Mr. Mackenzie, would you please lead 
us off, for 5 minutes

  STATEMENT OF JASON MACKENZIE, NORTH GULFPORT COMMUNITY LAND 
                             TRUST

    Mr. Mackenzie. Thank you for having us.
    I would like to speak of the work that local nonprofit 
organizations are doing in the recovery effort in coastal 
Mississippi. In a recent article, Wall Street Journal reporter 
Christopher Cooper reported that tens of thousands of residents 
remain displaced while authorities dither over how to 
distribute housing assistance. Many crucial infrastructure 
projects have yet to start. Of the tens of billions 
appropriated by Congress, half remains unspent. The article 
goes on to detail how concerns about local corruption and fraud 
have mired the process of providing financial aid to the 
municipalities and individuals with desperate need.
    Often left out of articles like these is any discussion of 
the potential role of the local nonprofit sector. Governor 
Barbour has done an excellent job of assembling talent in 
Jackson to study issues of rebuilding housing and revitalizing 
economies. The Governor's Office, however, has not yet taken 
full advantage of coast-based nonprofit organizations with 
first-hand knowledge of local problems and innovative solutions 
for solving these problems.
    We acknowledge the important role of private investment and 
government in improving the lives of coastal residents, yet we 
believe strongly that the Governor's plan for the remaining 
CDBG allocation must include grants to community based 
nonprofit organizations.
    Unlike the private sector, local nonprofit organizations 
are required to serve the public interest and return any 
surplus funds into programs that serve the community. Community 
based nonprofit organizations, moreover, do not raise 
significant concerns about fraud. Local nonprofit organizations 
are largely transparent to the public and are managed by highly 
committed boards and staff with no inclination or opportunity 
for personal enrichment.
    The coast nonprofit organizations enjoy excellent 
reputations and solid records of accomplishment. Back Bay 
Mission of Biloxi, for instance, has operated successfully 
since 1922. Housing 2010 developed an entire community of 
affordable housing in Moss Point with modest resources.
    These organizations have also repeatedly demonstrated 
uncanny innovation in the chaos following Katrina. Witness the 
North Gulfport Community Land Trust, which preserved 
affordability of housing through in-fill development, 
separating ownership of land from its improvements and 
utilizing a resell restriction that provides for permanent 
affordability, or the emergence of a Hattiesburg nonprofit 
organization Unity Homes, which will provide the coast with 
green modular housing at prices unheard of in the affordable 
housing industry.
    Alternative funding strategies have been suggested for 
nonprofit organizations throughout the United States and in 
greater numbers since Hurricane Katrina. Tax credits are 
offered to investors so they might assist in the creation of 
affordable housing. Though this form of financing affordable 
housing projects has provided thousands of units throughout the 
country, tax credit developments are required to create mass 
rental housing densities of very low to low income people. No 
mention exists of creating multiple use, multiple income, or 
multiple ownership types of tax credit development. Aside from 
FEMA trailers, this is the State's principal solution that has 
been offered for coastal development.
    Providing grant funding from the remaining CDBG allotment 
to local nonprofit organizations would assist these grassroots 
groups on the Gulf Coast to expand critical work, and to 
rebuild affordable rental and homeownership opportunities for 
hurricane survivors and low income populations. Nonprofit 
organizations have demonstrated a proven track record of 
building and rebuilding affordable housing in communities 
across the Gulf Coast. It is essential that local grassroots 
organizations on the front lines of long term hurricane 
recovery have access to CDBG funds to serve the unmet housing 
needs.
    To date, these organizations have moved mountains through 
tremendous innovation, out of State technical assistance and 
generous but relatively small private grants from foundations 
and individuals. With the creation of a grant fund for 
nonprofit organizations from the remaining CDBG allocation, the 
Governor's Office could ensure that thousands of units of safe, 
decent, affordable housing are rebuilt and that public dollars 
are reinvested quickly, efficiently and creatively in local 
neighborhood redevelopment.
    Nonprofits offer an important capacity and willingness to 
take on the hardest to develop projects, the ones that are not 
attractive to the private sector. Please urge HUD to encourage 
the State of Mississippi to include an allocation for nonprofit 
community development. This is essential in Mississippi because 
our State has not fully laid out its budget for use of the CDBG 
allocation.
    Mr. Sires. Can you wrap up, please?
    Mr. Mackenzie. Thank you.
    Mr. Sires. Ms. Lillie Bender, please.

       STATEMENT OF LILLIE D. BENDER, UNITY HOMES PROJECT

    Ms. Bender. Good morning. Welcome and thank you for 
allowing me to testify. I am Lillie Bender, and I am a native 
Mississippian. It is indeed an honor and a pleasure to 
represent Unity Homes Project as its Mississippi operations 
director.
    Our project is an innovative program to build and install 
houses that are more energy efficient and use healthier 
building materials than have ever been offered in affordable 
and workforce housing. I would like to focus on three aspects 
of the Unity Homes approach that set us apart from other 
efforts.
    First, community based rebuilding. Unity Homes is 
developing a modular housing production factory and 
installation operation in Mississippi as a nonprofit 
Mississippi based corporation. Unity Homes will invest in our 
most valued assets--our employees and communities. These 
efforts will product not only beautiful homes but also over 100 
high quality jobs.
    Second, healthy affordability. Our nonprofit approach 
allows us to avoid many traps that drive affordable housing to 
the lowest common denominators of quality. Healthy and 
inexpensive housing are not mutually exclusive.
    As a nonprofit organization, we do not markup our costs at 
the expense of the homeowners and we are able to raise private 
grants and donations that offset the thin margins that are 
common in the industry. Further, by integrating both the 
construction and installation components of modular housing, we 
will operate with maximum efficiency and care.
    A Unity Home builds equity in every sense. It minimizes the 
use of unhealthy materials like resins, insulation, and 
particle board that are laden with formaldehyde, paints that 
emit volatile organic compounds and toxic flooring and siding 
that are made of vinyl. Better indoor air means less asthma and 
other illnesses, which enhances productivity and reduces 
healthcare costs.
    Third, strategic partnerships. Unity Homes is a fusion of 
strong partnerships with community groups, affordable housing 
organizations, leading legal advocates and national law firms, 
and some of the country's best green architects, engineers, and 
manufacturers. With their expertise, we have developed an 
organizational framework that includes public and private 
sector workforce development programs, affordable housing 
organizations, faith-based initiatives, legal aid 
organizations, financial, construction and employment 
counseling programs, land trusts, and community development 
corporations.
    This new approach counteracts unhealthy housing conditions, 
unjust financing, and entrenched cycles of sickness and poverty 
for many families and communities. By replacing these industry 
standard materials with green building practices, we are 
building healthy homes that generate long term equity for their 
owners.
    In fact, we are so dedicated to the mission of providing 
healthy, affordable homes to this area that we have donated a 
prototype home to the North Gulfport Land Trust. We held a 
ribbon cutting and open house on January 27, 2007, when over 
250 people came out on, believe me, the rainiest day of the 
year, to support this effort. We are proud that the first Unity 
Home is located less than a mile from here on the corner of Dr. 
Martin Luther King, Jr. Drive and Ohio Street.
    In conclusion, our prototype is a symbol of many other 
private efforts to fill the gap in affordable housing that grew 
larger after Hurricane Katrina roared through here. Over the 
past 18 months, private, nonprofit organizations and volunteers 
have taken the lead in tracking unmet needs of the Gulf Coast. 
We hope that the Federal Government has taken notice of what 
works and can see that this project and others like it are 
worthwhile investments through initiatives like the special 
CDBG program. As innovative stewards of our communities and the 
environment, we can help implement Federal and State efforts to 
serve the thousands of people for whom affordable housing has 
not yet been rebuilt.
    Chairwoman Waters and committee members, I urge you to come 
and see the Unity Homes advantage for yourselves. I invite you 
all to come and tour the Unity Home immediately following the 
hearing and we will be glad to answer any additional questions.
    Thank you.
    [The prepared statement of Ms. Bender can be found on page 
58 of the appendix.]
    Chairwoman Waters. Thank you, very much.
    Next, we will hear from Mr. H. Rodger Wilder, president, 
Gulf Coast Community Foundation.

STATEMENT OF H. RODGER WILDER, PRESIDENT, GULF COAST COMMUNITY 
                           FOUNDATION

    Mr. Wilder. Thank you, Madam Chairwoman. My name is Rodger 
Wilder, and I am the president of the Gulf Coast Community 
Foundation, having just recently assumed that job after 
practicing law on the coast for approximately 29 years. I will 
make my comments brief.
    First, I want to thank you for all that you have done and 
tell you how much we appreciate that effort.
    I also want to commend to you the charitable and faith-
based organizations who have come into this community. 
Government certainly had a large part in the recovery that we 
have enjoyed to this point, but as you will hear from other 
members of this panel and you no doubt have heard from others, 
the faith-based and the charitable organizations have literally 
responded in ways that are overwhelming to us. They came in the 
day after the storm, they have provided support, they have 
provided manpower, they have provided health benefits, and many 
other things, most of which could not have been provided to us 
regardless of how much money you had ever allocated because the 
money would not clean out a house, it would not tear out 
sheetrock, and it would not rip out flooring; those people did. 
We have enjoyed on the coast literally hundreds of thousands of 
people who have come in and helped us, and once they finished 
helping us, they thanked us for the opportunity to allow them 
to help us.
    As you go forward and consider what you need to do to 
respond to this and other disasters, I ask you to remember that 
one of the big legs of the stool that supports any recovery are 
your charitable and faith-based organizations. Whatever you can 
do to support those organizations, both before the storm in the 
nature of capacity building and what you can do then to help 
them in their efforts post-storm will benefit you, not only in 
terms of the human assistance that will be gained, but more 
importantly in terms of just pure money savings. And so I 
commend that to you as you go forward. Please remember those 
faith-based and charitable organizations, they can assist you 
in many, many ways.
    Thank you again for everything you have done.
    Chairwoman Waters. Thank you, very much.
    Mr. John Jopling, Mississippi Center for Justice.

   STATEMENT OF JOHN JOPLING, MISSISSIPPI CENTER FOR JUSTICE

    Mr. Jopling. Yes, and let me begin, Chairwoman Waters, and 
all members of the subcommittee who are present, by thanking 
you so much for coming to the Mississippi Gulf Coast to hold 
this hearing. Your concern about the post-Katrina housing 
crisis on the coast is vital to our recovery. We need your 
attention very much. I would like to also thank Congressman 
Gene Taylor for being such a champion for the coast since the 
storm. We really appreciate it.
    I am with the Mississippi Center for Justice, which is a 
nonprofit local agency committed to the advancement of 
economic, social, and racial justice in the State of 
Mississippi. We are the southern affiliate for the Washington-
based Lawyers Committee for Civil Rights under the Law. On 
behalf of the Mississippi Center for Justice and the Lawyers 
Committee, I am here to outline for you a very specific problem 
that we are having with regard to public housing on the 
Mississippi Gulf Coast.
    At stake are at least five housing complexes funded by HUD 
and managed by the Mississippi Regional Housing Authority.
    Less than a year after Katrina, the Mississippi Regional 
Housing Authority decided to dispose of three large public 
housing complexes: Charles Warner in Pascagoula; L.C. Jones in 
Gulfport; and William Ladnier, also in Gulfport. These three 
housing developments sustained very minimal damage from 
Katrina, all three were and are habitable, and all three were 
and are occupied.
    We have submitted to the committee a CD-ROM. We know that 
time constraints will not permit you to visit all of these 
public housing developments because they are spread throughout 
the coast. If you take a look at the CD-ROM, you will see the 
excellent condition, both outside and inside, of these public 
housing developments.
    The Housing Authority notified residents first of its plans 
in July of 2006, when the residents were told that these 
properties would no longer serve as public housing communities. 
They were told that they might be eligible for Section 8 
vouchers or that they might be transferred to other public 
housing properties. The notice also stated that residents 
eligible for Section 8 would have the option of returning upon 
completion of the redevelopment. Nothing was said about how the 
residents would be housed in the course of the redevelopment.
    Now obviously we have serious concerns about any 
redevelopment of HUD-funded public housing property and we 
would have those concerns regardless of the context in which 
this decision was made. Our concern would be that there be no 
displacement of any of the current residents and our concern 
would be that there be one-for-one replacement of all low-
income units.
    However, our overriding concern with the decision made by 
the Mississippi Regional Housing Authority is the context in 
which that decision was made. You have heard the testimony and 
many members of the committee have recited the statistics 
themselves; well over half of the rental property was gone 
after Katrina. What rental property remained escalated in its 
market value, according to the Mississippi Realtors 
Association, by at least 30 percent. At the same time, Section 
8 only raised the level of its voucher by $25.
    Why in the world would anyone pursue a policy in the 
aftermath of Katrina, in the midst of the most acute housing 
crisis in this State, a policy that would remove housing rather 
than add housing? Why would you put people out of the shelter 
that they presently have? At a time when almost 90,000 people 
are living in 28,000 FEMA trailers, why would you ask people to 
get out of a brick home with a good roof?
    That is exactly what Region 8 is doing. Just last week, 
they told the elderly residents of Baywood that they would have 
to leave by November.
    Chairwoman Waters. I am sorry, I am going to have to ask 
you to wrap up, your time is over. But I want you to know that 
the CD-ROM that you have advised us that you have, without 
objection will be submitted for the record. And I want my staff 
to inquire about our time today, to see if we can squeeze in 
time before I go to the airport, and hopefully other members, 
to see some of these housing projects that I understand are not 
too far away. Is that correct?
    Mr. Jopling. That is correct. L.C. Jones. Thank you.
    [The prepared statement of Mr. Jopling can be found on page 
86 of the appendix.]
    Chairwoman Waters. All right. Mr. Bynum, chief executive 
officer, Enterprise Corporation of the Delta.

    STATEMENT OF WILLIAM J. BYNUM, CHIEF EXECUTIVE OFFICER, 
              ENTERPRISE CORPORATION OF THE DELTA

    Mr. Bynum. Thank you, Madam Chairwoman, and members of the 
committee, for holding this hearing and for inviting me to 
speak today.
    I testify as the chief executive officer of the Enterprise 
Corporation of the Delta and Hope Community Credit Union. 
Working together, these nonprofit organizations form a regional 
community development financial institution that since 1994 has 
generated over $300 million in financing and helped over 30,000 
residents, primarily in the Delta, but over the past 18 months 
we have done significant work down here on the coast. Perhaps 
most relevant to my comment today is the fact that these 
accomplishments have been achieved certainly not by ourselves 
but by collaboration with banks, with private industry, with 
public agencies, foundations, and the faith-based community and 
community development organizations.
    I emphasize this collaboration because it has been our 
experience that development needs facing these communities, 
particularly here on the coast, cannot adequately be addressed 
by the resources of any one sector by itself.
    Immediately after the storm, ECD/HOPE began working with 
several groups to begin connecting families with resources that 
they desperately needed, first to survive, and then to start 
the process of rebuilding their homes, lives, and communities. 
Together with community development groups, faith-based 
organizations, low-income advocates and others, we have 
provided affordable financial services to over 4,500 residents, 
assisted 450 homeowners with repair and rebuilding, generated 
over $20 million in financing to help rebuild homes and small 
businesses, and to help consumers get back on their feet, often 
making bridge loans while people were waiting for FEMA proceeds 
and insurance payments and government support.
    In addition to working with individuals and nonprofit 
organizations, one of my colleagues last year before this 
committee talked about Home Again, our nonprofit housing 
development affiliate, which has been working to build 71 homes 
in Pass Christian. These homes have been funded by Jim 
Barksdale, Johnny Grisham, and The Home Depot Foundation. We 
provide counseling--financial and construction counseling--to 
help navigate the chaos that I think you have heard described 
that individuals have to endure in this environment, navigating 
FEMA requirements, elevation requirements, what you do with 
your first mortgage, etc. People need counseling.
    As a result of our successful pilot and collaboration and 
advocacy by the nonprofit community, Enterprise Corporation has 
been invited to extend our financial counseling as a part of 
Phase II. We are going to be doing the financial counseling for 
the Phase II program that has been described earlier. We are 
very clear that this is an important obligation and we also are 
very clear that we cannot do it by ourselves. We will be 
working with nonprofits throughout the coast to make sure these 
homeowners get good information that they need to rebuild their 
homes. Counseling is really going to be critical if people are 
going to come out of this intact.
    Again, none of this would have been possible without the 
work of nonprofits. They have been instrumental in filling the 
gap that exists between public resources and the resources 
people need to survive. I illustrate this with the story of Mr. 
George. He is a 70 year old man who lived in the Old Town 
District of Bay St. Louis. He received 8 feet of flood surge 
damage, even though he lived outside the flood zone, and he 
could not meet SBA requirements because his income was too low. 
After going through a process with the State for Phase I, he 
received only $10,000. With nowhere else to go, he turned to 
Citizens Homes Project, a project of Catholic Social and 
Community Services, which covered the gap in funding between 
the check he received from the State and what he needed to 
rebuild his home. It is nonprofits that have helped over 1,500 
residents on the Mississippi coast. It is safe to say that 
without organizations like this, Mr. George, and many Mr. 
George's, would not have been able to return to their homes.
    It is also the collective voice of nonprofits that champion 
an inclusive Phase II. Initially Phase II was capped at 
$50,000, not $100,000, as was reported today. It is because of 
advocacy, effective advocacy, that the amount is at $100,000 
which we certainly would like to see more, but it is much 
better than it was.
    On the eve of the storm, there were 3,300 nonprofits in the 
Gulf Coast including Biloxi, Gulfport, and over to New Orleans 
that employed 37,000 people. These nonprofits experienced the 
same sort of damage that everyone else did. They lost staff, 
they lost buildings, and they lost businesses as a result of 
this and now they were struggling. But very few programs exist 
that are targeted for the needs of nonprofits. I implore this 
committee to consider ways to ensure that the viability of 
these nonprofits is not an after-thought. I would propose that 
the CDBG funds, as has been echoed by several members on this 
panel--certainly a billion dollars would not be adequate to 
equip these nonprofits to play the vital role that they have 
played and will need to play if residents of the coast are 
going to be able to rebuild in a fair and inclusive manner.
    We have done this in the Delta, we have seen nonprofits 
come together and work effectively, and we have seen it on the 
coast since the storm. The STEPS Coalition is a prime example 
of effective collaboration and we are making strides toward 
helping people rebuild.
    Chairwoman Waters. Please wrap it up.
    Mr. Bynum. Simply put, I would just like to leave you with 
this. Without the strong and viable nonprofits in the Gulf 
region, the region will not recover in a fair and equitable way 
for those who are most distressed.
    [The prepared statement of Mr. Bynum can be found on page 
66 of the appendix.]
    Chairwoman Waters. Thank you very much.
    Ms. Diane Collier.

               STATEMENT OF DIANE COLLIER, TENANT

    Ms. Collier. Good morning. I would first like to thank all 
of you for giving us the opportunity to speak today.
    Mr. Jopling has already said most of what I was going to 
say, but back to the Regional Housing--the tenants from Charles 
Warner Homes in Pascagoula, Mississippi. Some of our tenants 
out there just received their eligibility for relocation and 
they were signed on the 16th, but they did not receive the 
letter until after President's Day, which was Monday. They 
received their letter on Tuesday and it said, ``As you know, 
Mississippi Regional Housing is proceeding with the Charles 
Warner Homes disposition project. You are eligible as a 
resident of Charles Warner Homes for relocation assistance to 
help you in moving to another Mississippi Regional Section 8 
rental property or another rental housing assistance program. 
Charles Warner Homes has a management office located Palmer 
Street. Your current unit must be vacated by Monday, February 
26th.''
    I have it right here, this is the letter that came from the 
manager's office. It says, ``Your current unit must be 
vacated.'' Now they received it just this past Tuesday, and it 
says, ``Your current unit must be vacated by Monday, February 
26th. Therefore, Mississippi Regional Housing would like to 
offer you a choice.''
    I am telling you. ``We will provide you with a dislocation 
advance of $50. Arrange for moving company, furnishing and 
assisting you in making all necessary arrangements for your 
move. After completion of the move, families will report to the 
management office to sign the relocation certification. Payment 
will be made within 7 to 10 days after receiving verification 
of telephone cable reconnection costs.''
    Now all the elderly people out there, the ones who are 
moving from the west end up to Charles Warner, they are mostly 
all elderly people. You know, they first told them that they 
were going to give them vouchers and that they were going to 
see to them being moved to where they want to move, you know, 
relocated. Well, they changed their minds on that. So I went to 
a board meeting and in the board meeting, they said that I 
would have to have it in writing. Well, we did this on February 
12th. I put it in writing, and I had it faxed to the 
Mississippi Regional Housing for the 15th, for the board 
meeting. When I got to the board meeting, we asked questions 
about the vouchers, and they shut me off; they would not give 
me an answer. They would not say anything.
    So, I said well, the tenants are upset, they want to know 
what is happening, what is going on. You know, when they have 
to move, when they are going to receive their vouchers. They 
would not give me an answer. If so, I would have been able to 
tell them that they would have to be gone by Monday, February 
26th. And I was just in the board meeting and they would not 
tell us anything, they just will not talk to us.
    Chairwoman Waters. Thank you, Ms. Collier. First of all, I 
would like to have a copy of that evacuation notice for the 
record. Without objection, that notice will be submitted for 
the record.
    Which housing authority oversees, is it Taylor Homes? What 
is the name of your housing development?
    Ms. Collier. Charles Warner Homes.
    Chairwoman Waters. Okay, thank you. I am going to move on 
and get our next witness up and then we will be back for 
questions.
    Next we will hear from Mr. Brian Sanderson, Gulf Coast 
Business Council.

   STATEMENT OF BRIAN SANDERSON, GULF COAST BUSINESS COUNCIL

    Mr. Sanderson. Chairwoman Waters, Ranking Member Biggert, 
members of the subcommittee, and Mr. Taylor, good morning and 
welcome back to the Mississippi Gulf Coast. My name is Brian 
Sanderson and on behalf of the Gulf Coast Business Council, I 
thank you for your continued attention and assistance to the 
people of Mississippi.
    I work as president of the Gulf Coast Business Council, an 
organization comprised of over 170 of the top business leaders 
in the three coast counties. Most of our members are small 
businesses. Our group was formed in the wake of Hurricane 
Katrina to provide a unified regional voice of business on 
important public policy matters. No issue is more important to 
our region than affordable housing and it has been the priority 
of our organization.
    In response to this unprecedented need, we have formed the 
Gulf Coast Renaissance Corporation, the mission of which I will 
explain in a moment. You have heard the enormous need we have 
for affordable housing. It is integral to any inclusive, 
sustainable community and it is absolutely essential for the 
economic recovery of the Gulf Coast. Without affordable, safe 
housing close to the major centers of employment, our projected 
economic growth will not be realized.
    The title of this hearing asks the question, ``Why no 
progress?'' I cannot disagree more with that inference. I know 
you do not mean to suggest that the thousands of volunteers, 
faith-based and community action groups, and local, State, and 
Federal officials have made no meaningful steps in rebuilding 
affordable housing in this State.
    In addition to the assistance from State and Federal 
Governments, countless community organizations, many of which 
you have heard from today, also have made investments in 
affordable housing. They are tireless examples of the progress 
made in Mississippi. But if you are still one of the thousands 
of people living in FEMA trailers or driving 3 hours to work 
every day, the progress is not fast enough.
    The fairer question you posed today is what are the 
obstacles to success? The obstacles are significant. They can 
and will be overcome. Four are most prominent: elevated land 
prices; insurance costs and availability; increased 
construction material cost; and a shortage of construction 
labor. Continued Federal funding to support workforce training 
programs are crucial to meeting this need.
    The exorbitant cost of insurance and its decreasing 
availability are the most critical impediments. We must create 
a stable environment which will attract good insurance 
companies to provide coverage in all parts of our State. Multi-
family developers have to charge, on average, an additional 
$300 per unit per month, just to cover the increases in 
insurance rates. We are hopeful that proposed State legislation 
will bring some stability, but the only permanent solution lies 
with a Federal insurance program for all catastrophic 
disasters. Congressman Taylor is working on important 
legislation and we are supportive of those concepts and urge 
you to work to develop a national catastrophic insurance 
program. Without it, our individual efforts will be a stop-gap 
at best and dependent on the forces of the private market.
    I will conclude by telling you about the efforts of our 
organization to develop affordable housing. As you know, many 
faith-based and community organizations have begun important 
work in building affordable housing. A comprehensive 
collaborative initiative, however, is necessary to build the 
significant numbers of homes in this area at a much more rapid 
pace. To date, the efforts have been well-intentioned but 
piecemeal. We have formed an independent, not-for-profit 
corporation named the Gulf Coast Renaissance Corporation. It 
will create and implement a broad based approach to land 
acquisition and development and redevelopment of single family 
and multi-family housing units on the coast with a particular 
emphasis on workforce housing. It seeks to work with, not 
replace, existing organizations like the North Gulfport 
Community Land Trust and the Enterprise Corporation of the 
Delta. A large portion of the workforce in desperate need of 
housing is households at 80 to 120 percent of the area median 
income. This need is not being effectively met by existing 
State and Federal programs and it is our focus.
    The Corporation will marshal capital to bridge the gaps in 
financing land acquisition and construction costs so the new 
units will be affordable to this population. Although we plan 
to raise capital from private sources and through creative 
partnerships with local and State governments, the rebuilding 
effort will require an unparalleled commitment from HUD. A 
commitment of this nature will require flexibility within the 
existing HUD guidelines for the use of CDBG funds, or a new 
program, tailored to this period of recovery. A historical 
parallel is existing in the Reconstruction Finance Corporation 
established during the great depression and its similar use in 
the 1980's to solve the S&L crisis. The Marshall Plan for 
European recovery is another illustration. Private enterprise, 
even at little or no profit, cannot assemble land and build 
housing at prices affordable to this population group.
    In closing, the Renaissance Corporation is developing a 
formula and framework for the use of public and private funds 
in an effort to maximize the number of workforce housing units 
produced and to ensure that the development of these units 
reflects responsible land use practices and the creation of 
sustainable communities.
    Developments will adhere to mixed income principles. Above 
all, the Renaissance Corporation will ensure fairness in 
housing and transparency in process and structure. It will be 
led by an experienced president and CEO, Laura Davis. It will 
be supported by a large advisory board that will bring together 
nonprofit groups, advocacy groups, housing authorities, policy 
organizations, and government stakeholders, as well as 
committed individuals.
    I will leave you with one specific request, that if 
granted, will provide greater housing options for workers in 
that 80 to 120 percent of area median income. My request is 
that more flexibility be authorized for the use of public 
funds, namely CDBG, to serve the needs of these households, 
above 80 percent of the area median income. It is our challenge 
to you to create today's Marshall Plan by considering non-
traditional approaches to the use of public funds. Your efforts 
are the critical piece in restoring hope to the families of the 
Mississippi Gulf Coast.
    I thank you for being with us again and for inviting me to 
share these thoughts. I thank the American people for their 
continued support.
    [The prepared statement of Mr. Sanderson can be found on 
page 107 of the appendix.]
    Chairwoman Waters. Thank you, very much.
    And now we will hear from Mr. Derrick Evans, executive 
director, Turkey Creek Initiative

 STATEMENT OF DERRICK EVANS, EXECUTIVE DIRECTOR, TURKEY CREEK 
                           INITIATIVE

    Mr. Evans. Thank you, Madam Chairwoman, and members of the 
subcommittee. My name is Derrick Evans and I am the founder and 
executive director of Turkey Creek Community Initiatives, a 
local nonprofit here in the Turkey Creek Drainage Basin, 
working in partnership with nonprofit partners to plan for the 
revitalization of this distressed community and drainage basis.
    Long before Hurricane Katrina, the Mississippi coast was in 
many ways a housing disaster just waiting to happen. 
Mississippi's lack of legal protections for renters in the 
absence of a State fair housing law have compounded the misery 
of many survivors who have needlessly lost habitable rental 
housing. Municipal and regional disinvestment in public housing 
is not new, nor is the dearth of creative and comprehensive 
planning to encourage in-fill development and to finance 
redevelopment of vacant structures in older, low- and moderate-
income neighborhoods.
    At present, virtually every major lender in Mississippi 
fails to offer to HUD 203(k) mortgage, a nationally touted 
vehicle for revitalizing existing housing stock while 
protecting borrowers from poor workmanship and other common 
rehab pitfalls.
    In addition, poorly planned growth by annexation and the 
reckless permitting of inappropriate areas by local, State, and 
Federal authorities, particularly the Army Corps of Engineers, 
were for nearly 2 decades cornerstone features of the so-called 
Mississippi miracle that preceded Hurricane Katrina.
    With or without a major hurricane, our coast gets more than 
70 inches of annual rainfall and runoff flows into open ditches 
in front of many homes, wetland destruction intensifies, 
flooding significantly and learning little from the adverse 
impacts of poorly planned coastal urbanization, the Corps, 
commercial developers, and even many housing agencies are right 
back to these costly and self-defeating practices that made 
Katrina even worse than it needed to be.
    A postcard victim of this trend, the Turkey Creek and North 
Gulfport area have been ravaged for more than a decade by 
investors, politicians, and government agencies willing to 
trade this region's unique cultural and natural identity for 
the homogenous sprawl of a drive-through economy. In 1994, 
after being annexed without input or consent, the entire Turkey 
Creek community was rezoned for commercial and industrial 
development, through an alleged clerical error in Gulfport City 
Hall. Getting listed as one of the State's 10 most endangered 
historical places in 2001 did not protect us from the boom town 
feeding frenzy that largely destroyed our ancestral cemetery 
that very same year.
    When asked in 2003 why our residents opposed a multi-
billion dollar development entailing a massive loss of even 
more wetlands, the then-mayor referred to our community, ``as a 
bunch of dumb bastards.''
    Squeezed tighter each day by the Gulfport-Biloxi Airport 
expansion and development near I-10 and U.S. 49, our homes, 
wetlands, and people were gasping for relief long before 
Katrina struck. In truth, Katrina did attract more concern from 
outside groups than our community had seen before, but far less 
from policymakers.
    While Katrina introduced others in this region to terms 
like smart growth, long term recovery, and new urbanism, we 
have cried for balance and sustainability for years. We have 
already tasted what the top down redevelopment push sweeping 
the coast will likely mean for low- and moderate-income 
families, African-Americans, and anyone else outside of the 
proverbial loop. We have lost more of our community's 
diminishing resources in the 18 months since Katrina than in 
the 3-year period preceding it. Judging from the major road 
projects, wetland fills, and commercial developing sprouting 
around us daily, nothing much different can be expected from 
those who insist on this area where we sit today as the 
economic center of gravity for the entire region's recovery.
    Indeed, just 2 days into Black History Month and less than 
a week after the Mississippi Department of Archives and History 
finally nominated my community for the National Register of 
Historic Places, Gulfport red-tagged five of our remaining 
historic structures, ordering their demolition to occur within 
the next 30 days. It takes roughly 45 days for the Department 
of the Interior to approve the recent historic district 
nomination.
    Shortly before Katrina, several disabled, elderly, and low 
income owner-occupants of distressed dwellings on Rippy Road 
applied to Gulfport and were approved for HUD home grants of up 
to $30,000 per household. This much needed program had been 
fashioned and pitched to community residents and several were 
approved. When these houses were further and significantly 
damaged by Katrina, including the complete loss of one roof, 
the previously approved grantees went months without hearing 
from the City as to when or whether their anticipated home 
funds would be forthcoming. It was months before they learned 
that the initial pool of funds had been reallocated for 
emergency housing somewhere else.
    The previous year, a similar single street approach to the 
home grant program was piloted by Gulfport on South Carolina 
Avenue, just 3 short blocks from where we are today. I urge you 
to drive up South Carolina on your way to the airport from this 
hearing and to judge for yourself if HUD's home program appears 
to have made any significant difference on that street. Should 
it seem to you that the answer is no, then you will personally 
understand why I mark the City 0 for 2 with HUD housing grants 
in the Turkey Creek/North Gulfport area.
    Please note that my point here is not to deride Gulfport, 
but to illustrate for you the demonstrable fact that housing 
policy, planning, and program implementation have never been 
priorities or functional capacities characterizing our local or 
State government.
    The dismal 18 months since Hurricane Katrina have only 
further driven home this truth, a truth that is readily 
observed in relation to public houses and places like the L.C. 
Jones Public Housing Complex that abuts South Carolina Avenue.
    Another example of poor housing policy has been Phase I of 
the special Community Development Block Grant allocation. HUD 
exempted Mississippi from a host of requirements that are 
designed to serve low- and moderate-income households. Despite 
being low income elderly and disabled, however, and thus 
overlooked by the ill-conceived waivers, my mother lucked out 
by being one of the 17,000 homeowners who very narrowly 
qualified for assistance under Phase I of the CDBG grant 
program. Nevertheless, she is still in her FEMA trailer like 
everyone else who must wait for Phases II, III, IV, and V to 
occur. For her and virtually every household in communities 
like mine, there would be no housing recovery to speak of, if 
not for private donations and millions of hours of unpaid labor 
performed by friends, neighbors, and volunteers from across the 
Nation and the world. Along with their contributions to the 
physical repair of our homes and communities, local nonprofits 
are at the center of an essentially grassroots recovery 
occurring brick-by-brick with limited or no access to Federal 
or State dollars allocated for Katrina housing recovery.
    Thank you.
    Chairwoman Waters. Thank you, very much.
    We have one other person here today, and I think it is 
someone I met when I was here before. Mr. Rodger Clark, 
executive director, Paralyzed Veterans of America. Thank you 
very much.

   STATEMENT OF RODGER CLARK, EXECUTIVE DIRECTOR, PARALYZED 
                      VETERANS OF AMERICA

    Mr. Clark. Madam Chairwoman, and distinguished panel, I 
would like to thank you all for allowing me to speak, even 
though I was not scheduled. Congressman Taylor, I would like to 
thank you for your efforts and the continued efforts that have 
been done here for the people of south Mississippi.
    One thing that no one has really looked at in the 
rebuilding of the coastal area is that they have stated that if 
you own the property in the flood zones, and you have to go up 
to the higher elevations, they are not looking after the 
disabled community. If you have to rebuild a home--if you own 
property, let us say, on the waterfront in Hancock County and 
you are told you have to go up to 19 feet or whatever the 
height requirement is, they will give you the $30,000 if you 
qualify, to raise your home, but they are not including any 
funds for handicap ramps or handicap elevators to allow the 
disabled to get into their homes. According to the ADA, you 
have to have a one inch drop for every foot. That means if you 
are going up 23 feet with your home, your ramp is going to go 
totally around your house twice. Okay? Then you have to have 
another way to get out in the event of an emergency, which when 
I met with community planners, they said elevators. Okay, there 
are no funds that the Federal Government has even thought about 
for the ramps or the elevators.
    If you get a non-service connected veteran, and I represent 
a lot of them, as well as representing and advocating for the 
disabled community as a whole, someone who is on a fixed income 
is not going to be able to afford a handicap elevator. A 
handicap elevator runs anywhere from $20,000 to $25,000 for the 
elevator itself. Okay, and then you are talking about the ramp 
that is going to wrap totally around the house at least twice. 
Someone needs to take a real good look at that.
    I have asked if they could be waived and build back to the 
normal requirements. They were told no. I have had seven 
members who fought for this country, who have spinal cord 
injuries, and own property in Hancock County that have now had 
to sell their property, purchase property up in north 
Mississippi and move because with the building requirements, 
they could not afford to get their house up in the air, they 
could not afford the wrap around ramp, and they could not 
afford the elevators. And nobody in the Federal Government is 
taking a look at it. I have brought it up in meetings with the 
mayors, the planners when they were discussing the Sherette 
Plans, and no one has even come on board and even thought about 
inviting anybody who has any idea of the ADA into the planning 
process.
    Secondly, the affordable housing down here on the coast, I 
would like to thank these organizations here, because without 
them, a lot of the disabled community and elderly would not 
have affordable housing. But you have to look at the price that 
the housing was going for pre-Katrina, versus what it is going 
for post-Katrina. I have disabled members of my organization 
who are veterans and members of the disabled community who have 
called me up--pre-Katrina a one bedroom handicap apartment was 
running them $550 a month. Post-Katrina, that same apartment, 
if there is one available, is now $1,000 a month. And if you 
get an elderly person or an individual on a fixed income, who 
is disabled, they cannot afford the prices post-Katrina.
    A lot of the Sherette Plans for the entire coastal front do 
not look at the affordable housing aspect. They are looking at 
condominiums. The cost of a condo, minimal price, is $1,300 a 
month. Do you think anyone in the disabled community on a fixed 
income will be able to afford that? No.
    In closing, thank you, very much.
    Chairwoman Waters. Thank you, very much.
    Boy, there are so many questions I need to ask, and I do 
not have time; I am limited here. Let me see.
    First, I would like to get a clear picture of how many 
housing developments are under what housing authority, so that 
I can be clear, are scheduled to be torn down? Could you answer 
that for me, Mr. Jopling?
    Mr. Jopling. Yes, Madam Chairwoman, there are five 
developments that currently have applications before HUD for 
disposal. Disposal is sort of a term of art within HUD and it 
does not necessarily mean that they will all be completely torn 
down, but that they will be transformed in some way that will 
require the displacement of the current residents.
    Chairwoman Waters. Is this the Biloxi Housing Authority?
    Mr. Jopling. It is not, it is very important for me to 
point out to you that these are all properties under the 
management of Mississippi Regional Housing 8. We have no 
quarrel with the Biloxi Housing Authority.
    Chairwoman Waters. Okay, all right. And how many units are 
represented in these five developments?
    Mr. Jopling. Warner has 210 units, L.C. Jones has 124 
units, William Ladnier has 64 units, Baywood has 72 units, and 
the Village has 68 units.
    Chairwoman Waters. Are any of these units being rehabbed 
now?
    Mr. Jopling. Yes. They are making some repairs at the 
William Ladnier development according to the residents.
    Chairwoman Waters. All right, so those people who were 
displaced do have the possibility of returning into these 
rehabbed units and what you are worried about is--oh, okay, let 
me back up. Explain it to me.
    Mr. Jopling. This is a situation where people are currently 
living in those units that are habitable in these various 
complexes. They are soon to be displaced, but they are not now 
displaced seeking to return; they are seeking to remain in 
their habitable and safe units.
    Chairwoman Waters. So these units that you are describing 
are not being closed down as a result of Katrina; they are not 
using that as an excuse. They were making application to get 
rid of them whether Katrina took place or not, is that right?
    Mr. Jopling. They made the application after Katrina and in 
some cases, Katrina is the excuse, but it does not furnish a 
reason.
    Chairwoman Waters. Okay, so you said some were being 
rehabbed. What was the evacuation notice about, that the young 
lady just told me about? Ms. Collier, the evacuation notices 
are notices that people who could not return or have already 
returned or just living there, what? Who got these evacuation 
notices?
    Ms. Collier. The people who are going to be moving out, 
they do not know if they are going to return or not, until the 
other building is built.
    Chairwoman Waters. I see. So they are talking about tearing 
them down and building new buildings under the kind of the HOPE 
VI program?
    Mr. Jopling. Similar. They are going to transfer these to a 
nonprofit agency that has been created by the Housing Authority 
which then is going to seek to go after low-income tax credit 
money and transform these units, which serve the extremely 
poor, into mixed income developments, but they will not tell us 
any of the details.
    Chairwoman Waters. I get it. It looks as if it is a 
continuation of the philosophy of HUD and this Administration 
to get out of the business of providing units for low income 
poor people and getting rid of public housing projects.
    Mr. Jopling. Yes.
    Chairwoman Waters. It is done in any number of ways and 
Katrina may be a convenient excuse for moving people out and 
putting them under this now nonprofit private authority and HUD 
is out, is that right?
    Mr. Jopling. As you say, Madam Chairwoman, you get it--you 
get it.
    Chairwoman Waters. I get it. All right, thank you very 
much.
    I am interested, Mr. Evans, in your description of the 
demolishment of historical properties. Are you talking about 
properties that have been designated as historical that are 
being torn down in violation of the law?
    Mr. Evans. I am talking, Madam Chairwoman, about five 
structures that were identified as ``contributing structures'' 
in a State Department of Archives and History application 
nominating the entire community of Turkey Creek, to the 
Department of the Interior as a historic district. There are 
currently--I testified before Congress in November of 2005 and 
contributed to our receiving $40 million here for historic 
preservation grants for distressed historic structures in 
Turkey Creek and elsewhere.
    There are currently ample funds on the ground here in 
Mississippi for--
    Chairwoman Waters. But the properties that you are talking 
about are not being covered?
    Mr. Evans. Well, they will be. The April 6th deadline is 
for homeowners with clear title to apply for the grant monies, 
what it is is a classic example of various layers of government 
here on the Gulf Coast not reading the newspaper and not 
knowing what other layers or departments are doing, quite 
honestly. I will leave it at that.
    Chairwoman Waters. All right. Mr. Bynum, thank you for the 
information that you shared with us about Phase I and Phase II. 
If you got it up from $50,000 to $100,000, you guys are 
certainly to be commended; do not stop working, they owe you 
$50,000. Okay?
    All right. Let me thank you for coming and let me turn it 
over to our ranking minority member, Mrs. Biggert.
    Mrs. Biggert. Thank you, Madam Chairwoman.
    Mr. Bynum and all of you, I think working with the NGO, not 
for profits is a great thing and they do such a good job, 
whether it is in Mississippi, whether it is in Louisiana, 
whether it is in Chicago or wherever. I think we depend on the 
organizations so much to really move us forward without always 
having to have the government, and to a better job it sounds 
like in a lot of cases.
    I want to ask Mr. Bynum, you talked about assisting the 
nonprofit organizations and raised a considerable amount of 
money, the $915,000, to use and then you got a recommendation 
for rebuilding the region and being able to then have small 
business loans and investments. You are raising money to 
develop small businesses, create and retail jobs, train 
workers, expand homeownership opportunities, and build 
affordable housing. One of the things that we saw in Louisiana 
was that cycle of the jobs, business, and homeownership. How is 
this working here in Mississippi?
    Mr. Bynum. Thank you. Unfortunately, it is working without 
a lot of support from the public sector. I would commend 
Governor Barbour's office for having conversations with the 
coalitions of nonprofits on the coast and moving forward with a 
counseling initiative and upping the amount of grants for Phase 
II. That said, nonprofits--I think if you ask people across the 
coast from Mississippi to Louisiana, who has helped them, 90 
percent of them would not say the public sector, the Federal or 
State government. They would say nonprofits, they would say 
volunteers. And this has been done without any formal programs 
to help rebuild these nonprofits, without any formal allocation 
of funds for the CDBG dollars that you appropriated to the 
nonprofit sector. And so I think what I would encourage is that 
there be a more deliberate means to build the capacity, rebuild 
the capacity of nonprofits in these situations and equip them 
to address those gaps that cannot be adequately met by 
government bureaucracies, by banks, by entities that 
historically have not had a priority on serving the needs of 
people in economically distressed situations or socially 
distressed situations. That is what nonprofits do, that is what 
churches do, and that is what philanthropic organizations have 
done so effectively. And we have done it in a tremendous way 
since the storm. Again, without--we have been fighting, you 
know, we have been digging out of this with a spoon.
    Mrs. Biggert. Well, thank you for all the work that has 
been done.
    The other thing that you talked about, which I think is so 
important, is the counseling and I think that the Financial 
Services Committee has been very committed to financial 
literacy and I think that is so important as people have to 
make these decisions on how finance for rebuilding, what to do 
even in the public housing, financial literacy is so important. 
Could you expand on that a little bit?
    Mr. Bynum. Certainly. I think you would all appreciate the, 
even if you have a--if you are a banker, if you are an 
attorney, if you are an accountant, in this environment, it is 
very confusing, what are the elevation requirements, do you do 
with your existing mortgage, do you have to negotiate solutions 
with existing lienholders, with insurance companies. And so 
what we will be doing after the grant award has been calculated 
by the State, people will be routed to us and we will work with 
them to determine what their financial options are. In many 
cases, the grants by themselves will not be adequate to 
rebuild. What was affordable, maybe a $60,000 home before the 
storm now costs $120,000, or $130,000 because of labor, 
materials, etc. And so many of these people will have to find 
gap financing, they will have to go to a lender and in many 
cases these loans may be $40,000 to $50,000 and most banks do 
not find that a financially profitable proposition. And so they 
will need alternative sources of financing. So we will be 
providing financial counseling to help them determine their 
financial options, match them up with gap financing, and then 
after the gap financing is identified, work with them to avoid 
unscrupulous contractors. There are sharks swimming in the 
water who are waiting to rip people off. There is more money in 
this region than there has ever been and there are a lot of 
people who would like to take that money and many have already 
taken it without anything to show for it. So we will be working 
with the individuals to make sure that as they interact with 
contractors, the contracts are in their best interests and at 
the end of the day they end up with an affordable, quality 
home.
    Mrs. Biggert. Thank you. I yield back.
    Chairwoman Waters. Thank you very much.
    Mr. Neugebauer.
    Mr. Neugebauer. Thank you, Madam Chairwoman.
    There are a couple of things I want to do. I also want to 
talk about our nonprofits. I know that I came down to this area 
a few weeks after the terrible storm and there were tents that 
churches and organizations had set up all over the region. They 
were feeding people, they were bringing clothes in, and they 
were making sure people had water. And truly it was, I think, 
one of America's finest moments because I know a lot of 
churches from Texas and companies were sending trailer loads of 
food and water and clothing down there.
    So one of the things I want to say to the--I agree that is 
an infrastructure that is important to our country. But let me 
just say this, I think one of the things that we can do to help 
you better probably than anything is that we have an unfair tax 
policy in this country. The issue today is that this is your 
hard-earned tax dollar that goes to the Federal Government. And 
by the time it goes through the washing machine in Washington, 
D.C., when it gets back to the people you serve, it is this 
size. What we need to do is to have a better tax policy in this 
country that encourages individuals and corporations to be able 
to directly give you those dollars and not try to shuffle them 
through the Federal Government, so that you can then keep that 
infrastructure in place, serve the communities, and encourage 
local companies to support their local organizations. They are 
the most efficient delivery system in many cases of any of the 
services that we have. Yet today, we encourage you to send that 
dollar to the Washington washing machine, which shrinks that 
dollar and then by the time it comes back through the State 
government and then as we have been talking about in this 
meeting, that dollar is much smaller, and less effective for 
the people that it serves the most.
    So, I look forward, I am hoping that in this Congress we 
are going to be talking about I think some tax policy in this 
country and I would hope to work on a bipartisan basis on a way 
to make sure that we encourage, not discourage, companies to do 
that.
    I think the second thing I want to say is that, Madam 
Chairwoman, we have had wonderful panels in this hearing. We 
have had a great cross section of people that have testified 
all the way from the users to the people in government, people 
in the Federal Government and State government and local 
government. But there has been one group missing. and I would 
hope as we have future conversations about housing that we have 
America's homebuilders and developers at the same table getting 
their input, because they are also our partners in rebuilding, 
whether it is Louisiana or Mississippi or Florida, and making 
sure that we are getting input from them as to, from the 
private sector, the things that we might be doing from a policy 
standpoint that we could do better, that would help them bring 
their dollars to the table. We need everybody's resources and 
so hopefully as we in the future have some additional hearings 
possibly on housing that we could have some of those people at 
the table also.
    And I yield back the balance of my time.
    Chairwoman Waters. Thank you, very much.
    Congressman Taylor.
    Mr. Taylor. Madam Chairwoman, I just want to thank our 
panelists and I think the gentleman from Texas summed up what 
they have privately told me before the gentleman said that was 
how impressed they were with all of you, how you did really 
touch every aspect of what needs to be done. And I thank all of 
you for being here and I thank all of our participants, the 
folks in the gallery--the folks sitting out there.
    Thank you all for being here, it is important. Ms. Waters 
has asked to try to cut this short a little bit because she 
does want to try to find the time to go look at one of those 
housing complexes before she heads back and I think, as we all 
know, you have to see it to believe it. So I am going to cut my 
time short and try to make that happen.
    Chairwoman Waters. Thank you very much. Congressman Sires.
    Mr. Sires. Yes, thank you, Madam Chairwoman--go ahead, he 
deserves it.
    I just want to say thank you to all of you. I have the 
opportunity to work with nonprofit corporations and you do a 
great job, and I know you get discouraged, but I beg you, do 
not get discouraged. You do a wonderful job, people appreciate 
it, and the most needy are the ones you serve. So keep up the 
good work and we are going to take some of these things back 
and see what we can do.
    Thank you very much for being here. We want a copy of that 
letter.
    Chairwoman Waters. Thank you very much.
    Chairwoman Waters. 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.
    This hearing is adjourned.
    [Whereupon, at 12:16 pm., the hearing was adjourned.]


                            A P P E N D I X



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