[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]
THE SECTION 8
VOUCHER REFORM ACT
=======================================================================
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
__________
MARCH 9, 2007
__________
Printed for the use of the Committee on Financial Services
Serial No. 110-11
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35-403 WASHINGTON : 2007
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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:
March 9, 2007................................................ 1
Appendix:
March 9, 2007................................................ 61
WITNESSES
Friday, March 9, 2007
Cabrera, Hon. Orlando J., Assistant Secretary, Public and Indian
Housing, Department of Housing and Urban Development........... 9
Charlton, Janet S., President, Triton Advisors, Inc., on behalf
of The National Leased Housing Association, The National
Apartment Association, and The National Multihousing Council... 50
Crowley, Sheila, President, The National Low Income Housing
Coalition...................................................... 46
Day, John E., President, DuPage Housing Authority and Executive
Director, Kendall Housing Authority............................ 35
Godfrey, Richard, Executive Director, Rhode Island Housing, on
behalf of The National Council of State Housing Agencies....... 37
Hiebert, P. Curtis, Executive Director, Keene, New Hampshire
Authority, and Vice President for Legislation, The Public
Housing Authorities Directors Association...................... 32
Ramirez, Saul N., Jr., Executive Director, National Association
of Housing and Redevelopment Officials (NAHRO)................. 30
Sard, Barbara, Director of Housing Policy, Center on Budget and
Policy Priorities.............................................. 48
Sperling, Andrew, Director of Legislative Advocacy, National
Alliance on Mental Illness, on behalf of The Consortium for
Citizens with Disabilities Housing Task Force.................. 52
Tegeler, Philip, Executive Director, The Poverty & Race Research
Action Council................................................. 54
Zaterman, Sunia, Executive Director, Council of Large Public
Housing Authorities............................................ 33
APPENDIX
Prepared statements:
Miller, Hon. Gary G.......................................... 62
Sires, Hon. Albio............................................ 67
Cabrera, Hon. Orlando J...................................... 68
Charlton, Janet S............................................ 74
Crowley, Sheila.............................................. 80
Day, John E.................................................. 86
Godfrey, Richard............................................. 92
Hiebert, P. Curtis........................................... 98
Ramirez, Saul N., Jr......................................... 107
Sard, Barbara................................................ 127
Sperling, Andrew............................................. 143
Tegeler, Philip.............................................. 149
Zaterman, Sunia.............................................. 155
THE SECTION 8
VOUCHER REFORM ACT
----------
Friday, March 9, 2007
U.S. House of Representatives,
Subcommittee on Housing and
Community Opportunity,
Committee on Financial Services,
Washington, D.C.
The committee met, pursuant to notice, at 10:27 a.m., in
room 2128, Rayburn House Office Building, Hon. Maxine Waters
[chairwoman of the subcommittee] presiding.
Present: Representatives Waters, Lynch, Cleaver, Green,
Clay, Sires, Ellison, Murphy; Biggert, Shays, Miller, and
Capito.
Chairwoman Waters. This hearing of the Subcommittee on
Housing and Community Opportunity will come to order.
We are going to allow opening statements for the record,
but without objection, all of our members' opening statements
will be made a part of the record. We are going to allow 10
minutes on either side.
We do not have an indication from our members over here who
wish to have opening statements, but we will allow 2 minutes
each, if you wish.
The Chair will yield herself 5 minutes for an opening
statement. Good morning, ladies and gentlemen. I want to thank
Chairman Frank and Ranking Member Biggert for making sure that
this subcommittee hearing was placed on the calendar so early.
I also want to thank the other members of the subcommittee who
are here today, given the importance of Section 8 Voucher
Reform Act issues, and I would like to welcome the new members
of the subcommittee. We have not had an opportunity to meet
together before.
We have a few members who were present at the hearing that
we had in New Orleans, but most of our members have not met in
subcommittee before.
As you know, the past several weeks have been busy as the
committee sought practical solutions to speed the rebuilding
process in the Gulf region.
H.R. 1227, the Gulf Coast Housing Recovery Act of 2007,
which the committee passed on Wednesday, is a major step
towards assisting the people of the Gulf with their affordable
housing needs and in rebuilding their lives.
Today we begin the process of tackling one of the most
important Federal housing programs in the Nation.
The Section 8 Voucher Program serves some 2 million
households. Last year, I was an original cosponsor of the
Section 8 Voucher bill, H.R. 5443, which the committee passed,
although the House did not take up the measure.
The Section 8 Voucher Reform Act of 2006 represented the
most comprehensive reform to the Section 8 Voucher Program that
we have seen in several years.
The major provisions of the voucher bill, including
targeting, inspections, tenant rents, and move to work,
represented a major step in the direction of reform.
I share this with you because I believe that this year we
can pass the Section 8 Voucher Act using a similar strategy,
with bipartisan support.
It is important that we move forward on Section 8 voucher
reform if for no other reason than to restore our committee's
legislative responsibility for the program.
Many important aspects of the program, like the funding
formula, have had to be addressed by the appropriators, because
we did not reauthorize our own program.
Just a month ago, the funding formula was placed in the
continuing resolution, and of course it had not been heard in
committee, the subcommittee or the full committee. A program of
this importance to communities all over the country needs to be
thoroughly scrutinized.
I hope that we can lay the foundation to develop consensus
around affordable housing programs that work for the Nation's
poor, working families with children, and the elderly, as well
as the disabled.
We also must include public housing authorities and HUD by
moving a Section 8 voucher reform once it is introduced.
The Section 8 Voucher bill addresses a number of provisions
that are important to me. One is the need to improve the
mechanisms for inspections of rental units. Most would agree
that tenants need protections and that these protections should
meet current housing quality standards. The Voucher Reform Act
requires inspections every 2 years.
Any time a unit passes inspections related to another
Federal program, like the home program, the idea would be to
not have to inspect the unit as long as it occurred in the
preceding 12 months, saving time and money and making the
rental unit available for occupancy as soon as possible, while
protecting the health and welfare of the tenant.
This would be a major improvement over current practices.
Another major provision of Section 8 voucher reform is
related to rent reform and income reviews. Tenants will not pay
more than 30 percent of income for rent. This is essential to
ensure that those traditionally served by the program will
continue to be served.
We consider incentives for work by allowing income
increases of less than 10 percent to be disregarded as well as
last year's income.
We also exempt the income of full-time students attending
college in income calculations. PHA's would also recertify
income every 3 years where the major resource of income is
fixed.
Another important aspect of Section 8 voucher reform is the
issue of targeting vouchers to those most in need. Under the
bill passed last year, 75 percent of new vouchers would go to
families below 30 percent of income. Vouchers would be
authorized for the next 5 years.
The bill to be introduced will contain a similar provision.
In addition, under current law, medical expenses in excess of 3
percent of a tenant's income for elderly and disabled are
deductible for income calculations. The Voucher Reform Act will
raise the threshold from 3 percent to 10 percent for the
elderly and disabled.
As you know, the CR we just passed included a measure to
change the Section 8 funding formula. The CR changed the
funding formula to base funding in 2007 using the PHA's most
recent verifiable 12-month period of voucher spending based on
leasing and cost data.
As a result, the actual voucher allocation would occur
annually instead of being based forever on the 2004 allocation
formula.
I believe that the voucher reform is so essential to our
ability to assist the poor working families with children and
the elderly and disabled to have decent, safe, and affordable
housing.
Of course, we would all like to fund a voucher program that
supported everyone who needs a voucher, but that is not
possible. We can make needed improvements to the program while
restoring faith in the voucher program for the tenants who are
in need of affordable housing as well as for our PHA's.
I hope that my colleagues will support the Section 8
Voucher Act when it is introduced to ensure that these goals
are met.
Part of achieving the goal of voucher reform begins with
this hearing and the witnesses' testimony. I hope that the
witnesses will share their insight on this important issue so
that we can begin to reform the program.
At this time, I would like to yield 5 minutes to our
ranking member, Congresswoman Biggert, for an opening
statement.
Mrs. Biggert. Thank you. Thank you, Chairwoman Waters, and
I want to welcome all of today's witnesses here, and to thank
you, Chairwoman Waters, for holding this important hearing to
examine the Section 8 housing choice voucher program.
I think that we on the subcommittee are acutely aware of
the many difficult management and budget challenges inherent in
this government program. It's my hope that we can take this
opportunity to work together as we contemplate the future of
Section 8.
While homeownership is a desired goal for all Americans,
there are many in today's society that are not yet ready to own
their own home, and we must therefore continue to pursue
alternatives to make sure that affordable rental housing is
available, and we must encourage recipients of rental housing
assistance to move towards self-sufficiency and we must make
sure that the assistance is there for those who truly need it.
As you know, the Section 8 housing assistance program is
the major vehicle for providing rental assistance to low income
families and individuals, helping over 2 million low income
households, elderly, and disabled persons secure affordable
housing in the private market.
This program represents the Nation's largest low income
housing assistance program and today's Section 8 program has
become the largest component of HUD's budget.
The rising cost of providing rental assistance is due in
varying degrees to the expansion of the program, the cost of
renewing expiring long-term contracts, and rising costs in
housing markets across the country.
The day of reckoning is coming fast. If we do not address
the increased costs of this program, it will consume the HUD
budget. It is already affecting the funding of other programs
within the department. I trust that we can use today's hearing
to engage in productive discussions and to help us find common
sense solutions to reforming the Section 8 program.
Not a day goes by that I don't talk to a constituent or an
organization concerning the problems inherent in this program,
such as long waiting lists, lack of affordable Section 8
voucher housing, lack of local program flexibility, and various
PHA funding concerns.
The longer we wait to address some of these concerns, the
greater the risk is, not just to Section 8 but to other HUD
programs that surely will be cut to pay for it.
I hope that we can draft language to address some of the
funding shortfalls that occurred as a result of language placed
in the most recent continuing resolution.
Over 1,200 public housing authorities, over half of the
PHA's in our Nation, including all of those in the Gulf Stream
and all of those in my district and at least some in the
chairwoman's district will take a hit in fiscal year 2007. The
Chicago suburbs are hard hit by this new formula. Each housing
authority in all three countries in my Congressional district
will receive a funding cut this year. The housing authority and
county will lose $8 million. Jolie will lose $1.1 million,
Aurora and DuPage will lose over $1 million.
These are not just dollars. These are families and seniors
who are being hurt here. With this bill, proposed cuts to
Section 8 housing funds, more than 100 families in DuPage
County, about 150 in Will County, and thousands across this
country will be kicked to the curb in 2007.
With that said, my hope is that we will move this bill
through the committee process. We can make modest changes to
the voucher funding formula to provide incentives for agencies
to operate in an efficient, cost-effective manner while serving
the maximum number of low income tenants.
We also should work to modify inspection rules, and to give
agencies more flexibility, which will encourage owners to rent
to voucher holders and preserve essential tenant protections.
To reduce burdens on agencies, landlords, and tenants, I
would support efforts to streamline rent determination and
other procedures for the Section 8 program.
Finally, we should promote local incentives that encourage
recipients of rental assistance to move towards self-
sufficiency.
As we seek ways to improve America's communities and
strengthen housing opportunities for all citizens, particularly
our poor, I recognize that the issue of reforming programs like
Section 8 can be contentious. However, politics is the part of
the possible, and I believe that today's hearing is a good
first step on the road to reforming this country's largest
rental assistance program, Section 8.
Again, I welcome all of today's witnesses and look forward
to your testimony.
Thank you, Madam Chairwoman. I yield back.
Chairwoman Waters. Thank you, very much.
The gentleman from Massachusetts, Mr. Lynch, is recognized
for 2 minutes for an opening statement.
Mr. Lynch. Thank you, Madam Chairwoman, and Ranking Member
Biggert, for holding this hearing. I also want to thank all of
the panelists and the under secretary for attending.
I have gone down to New Orleans previously on earlier Code
Ls. I did not make that one. But I have the perspective of a
former tenant of HUD housing. I grew up in the Old Colony
Housing Projects in South Boston with my mom and dad and my
five sisters, so I have that bias, as a former tenant.
I must confess also that when I completed law school, I
went back to the housing projects and represented tenants, my
former neighbors, as free legal counsel on matters of asbestos
and lead paid in apartments, people being underhoused.
And by the way, I think that had a lot to do with me
getting elected. You never know how many friends you have in
this world until you start doing free legal work.
But that being said, I do believe that there's a real
struggle in this country about U.S. housing policy, and I think
we have greater struggles than we had when I was living there
because of the huge disparity in what is earned by the families
in many of our housing projects and in Section 8 tenant-based
units versus what it might cost them to move to private
housing.
I still live--I haven't moved far--two blocks from the
housing project that I grew up in, and yet the rents in my area
two blocks away are a couple of thousand dollars a month, and
that's just beyond the hope and the reach of a lot of families
in public housing, and we're going to talk about that hopefully
a little bit later on.
The bottom line here is, I think we can do better. I know
we can, and we have to, not only in the situation post-Katrina,
but also just in our general housing policy.
I respect the people who come here before us today, and I
think we could benefit from your counsel, and we could use your
help, and I hope we can work in a constructive way to really
recognize that the Federal Government does have a rightful
place to play in national housing policy, and we want to get to
that.
Chairwoman Waters. The time of the gentleman has expired.
Mr. Lynch. Thank you. I yield back.
Chairwoman Waters. Thank you very much.
The gentleman from California, Mr. Miller, is recognized
for 2 minutes for an opening statement.
Mr. Miller. Thank you.
Over the years, Congress has grappled with the issue
regarding the skyrocketing costs of Section 8 programs, under-
used vouchers, and the general management of the program.
The cost of the program is growing so rapidly that HUD's
other programs, including public housing, homeless programs,
CDBG, Hope VI, and many others are suffering as a result. If
Section 8 is to remain viable, we must take steps to reform the
program.
During this time of budget constraints, Congress is
struggling to renew existing vouchers. As we try to reform this
program, we must remain mindful that it is not feasible for the
Federal Government to continue to increase funding for the
program without enacting meaningful reforms.
The Section 8 program must be implemented in a way that is
fiscally responsible. With this goal in mind, in the 109th
Congress, I introduced H.R. 1999, the State and Local Housing
Flexibility Act of 2005, to help the Section 8 voucher housing
program work better and remain available to those in need.
Specifically, this legislation would improve the delivery
of housing assistance to families in need by providing
flexibility to the local public housing authorities, PHA's, and
holding them accountable for results.
Additionally, the legislation would allow PHA's to serve as
many families as possible within their grant amount, rather
than being held to a specific number of vouchers.
Rather than H.R. 1999, the committee passed a different
bill to make changes at the margins of the Section 8 program.
While H.R. 5443 made important improvements to the inspection
process and income verification process, the bill did not truly
address the fundamental weakness in the Section 8 program.
If we pass a bill this year, let us pass one with true
reforms, not just one that gives the perception that reform was
accomplished. We can do much more than merely provide changes
on the margins. We should encourage PHA's to cooperate, and to
operate in an efficient, cost-effective manner to serve the
maximum number of low income tenants.
For example, eligible PHA's should have a chance to be
innovative in their efforts to move families to self-
sufficiency. Further, we must address the long list of waiting
lines for the Section 8 assistance. The average length of time
families spend on the waiting list for subsidized housing in
the United States is more than 2 years. In cities like Los
Angeles, the waiting list is 10 years.
I undoubtedly must yield back.
Chairwoman Waters. The time of the gentleman has expired.
We're going to be keeping a very tight schedule today; I
know people have planes to catch.
So the gentleman from Missouri, Mr. Cleaver, is recognized
for 2 minutes for an opening statement.
Mr. Cleaver. Thank you, Madam Chairwoman. I will forego any
opening comments and have questions later.
Thank you.
Chairwoman Waters. All right. The Chair will extend
additional minutes for those members who are present in the
room at this time.
We had originally talked about 10 minutes on each side, and
if the ranking member would like, we could expand the gentleman
from California's time--
Mr. Miller. May I finish my comments? That would be great.
Chairwoman Waters. Yes, you may.
Mr. Miller. Thank you, very much.
Let's see. I think I know where I'm at.
We should encourage PHA's to operate in an efficient, cost-
effective manner to serve the maximum number of low income
tenants. For example, eligible PHA's should have the chance to
be innovative in their efforts to move families toward self-
sufficiency.
Further, we must address the long list of those waiting for
Section 8 vouchers. The average length of time that families
spend on the waiting list for subsidized housing in the United
States is more than 2 years. In cities like Los Angeles, the
waiting list is 10 years.
How can we justify a situation where one person is given
unlimited Federal housing assistance while another, who might
have greater needs, is on the waiting list and forced to fend
for themselves for almost 10 years?
The answer is not to allow this program to continue to grow
out of control. Rather, we must reform the program so that
participants can transition to self-sufficiency within a
reasonable period of time, giving more families the ability to
benefit from our Nation's temporary helping hand.
I believe we have worked in a positive, bipartisan manner
thus far, and I look forward to working with my colleagues on
both sides of the aisle on a bill that truly reforms the
program.
As we move forward, we must remain mindful that it is not
feasible for the Federal Government to continue to increase
funding for the program without enacting meaningful reforms.
With this goal in mind, we must seek bipartisan ways to make
existing housing programs work better and remain available for
those in need.
I yield back the balance of my time. Thank you.
Chairwoman Waters. Thank you.
The gentleman from Texas, Mr. Al Green, is recognized for 2
minutes for an opening statement.
Mr. Green. Thank you, Madam Chairwoman. And I thank you for
hosting this hearing. It is important. Once again, you have
demonstrated your desire to make sure that every person has a
place to call home.
Madam Chairwoman, I believe that H.R. 543 is going to prove
to be a very important piece of legislation. It will change the
funding formula such that the money divided among housing
agencies will be fairly divided, such that some will not be
shortchanged while others are over-compensated.
It will preserve the income targeting provisions, the 75
percent/30 percent provisions, but it also will have
flexibility such that in areas where incomes are unusually low,
we will be allowed to use the Federal poverty line, which in
some cases may cause additional families to have opportunities,
who are indeed still within poverty guidelines.
It will streamline the inspection requirements and cause
more landlords to lease. It will expand the existing authority
from 30 to 40 for the moving to work agencies. And it will
permit a voucher, and this may be most important, to be used
for down payment by a first-time home buyer.
We want to give everybody an opportunity to experience the
American dream of homeownership.
Madam Chairwoman, I am so honored that you have brought
this piece of legislation to our attention, and I believe that
it will help many persons who otherwise would not have an
opportunity to have a place to call home.
I yield back the balance of my time.
Chairwoman Waters. Thank you.
And the gentleman from Connecticut, Mr. Shays, is
recognized for 2 minutes.
Mr. Shays. Two minutes? Thank you.
Chairwoman Waters. Yes.
Mr. Shays. Thank you, Madam Chairwoman.
First, let me congratulate you on this opportunity to chair
what I think is an important committee for Congress, and I know
you're going to do a terrific job.
Chairwoman Waters. Thank you.
Mr. Shays. And I'd like to just say to members that we on
this side of the aisle have argued for years that we don't want
people living in public housing being warehoused, and we've
argued that we should participate in the market, and Section 8
vouchers enable you to participate in the market.
The challenge now is that it has become quite expensive
because, in a sense, you don't own the property, and so we're
having to pay for inflation, whereas when we used to own public
housing, we didn't have to deal with the inflation aspect of
housing as much.
And so it's just a recognition, I think, on our side of the
aisle. We have to recognize that costs will continue to go up.
But our choice was to put people in a place where others
might live who have income and have resources and have a young
child, for instance, grow up in a unit that's not public
housing, but in a unit where he might see someone, like in the
case of where I live, go to UBS to work and get in his BMW to
drive in to work instead of driving to make sales of drugs.
Bottom line, I believe in Section 8 vouchers. I think we
need reform. And I'm happy that we're looking at this issue.
Thank you.
Chairwoman Waters. Thank you, very much.
I yield to the gentleman from New Jersey, Mr. Sires, 2
minutes.
Mr. Sires. Thank you, Madam Chairwoman.
Congratulations for holding this hearing. I'm looking
forward to working with you on this issue.
Mr. Assistant Secretary, I am a former mayor, and a former
speaker of the New Jersey Assembly, and I have to tell you that
the housing issue, whether it's Section 8 or any other issue,
is probably the number one issue facing people of poor means in
American today.
It just seems that they have no place to live. It seems to
me that we haven't done anything lately regarding senior
housing, or the disabled. And reforms are great, and all of
these directions are great, but only if it leads to more
opportunity. It just seems that with all of these reforms, we
have less and less ability to give people housing.
Just yesterday I received a call from one of the citizens
in my district, Jersey City. They have to lay off 34 people
because of all the cuts.
People talk about drugs and housing. People talk about the
insecurity in housing. But yet we cut the funding for all those
places to make it secure.
I don't know whether the intention is to turn it over to
the local municipality or the State, but that seems to be the
direction we're going. In New Jersey, it got so bad that I, as
speaker, had to institute our own Section 8 program.
The cuts here, the decisions here, impact not only New
Jersey or other States, but the local level.
So I will urge you, you know, reforms are great, but if
we're going to cut the ability for people to have housing, I
mean, I am not for reform. We have to provide--the Federal
Government, in my opinion, has a role in providing housing for
the most needy and seniors.
Thank you, Madam Chairwoman.
Chairwoman Waters. Thank you, very much.
I yield to the gentleman from Connecticut, Mr. Murphy, 2
minutes, for an opening statement.
Mr. Murphy. Thank you, Madam Chairwoman.
As the sole representative of the second row this morning,
it's a great honor to be able to serve on this committee with
you, a freshman member.
Mr. Shays. If the gentleman would yield, we'd let him sit
in the first row over here.
[Laughter]
Mr. Murphy. I'm finding it very comfortable on this row,
Mr. Shays.
Madam Chairwoman, coming from Connecticut, we have great
successes and great challenges in the area of housing policy,
and it was why I asked to serve with you on this committee.
We have successes in partnering Section 8 vouchers with
social services in our support of housing units, and I look
forward to a conversation about how the Federal Government can
help States that are doing supporting housing well continue to
do that.
But we have challenges with homeownership. In one of the
richest States in the Nation, we have some of the lowest rates
of homeownership, and so what I think is so productive about
the discussion when it comes to Section 8 reform is the means
that we can use Section 8 as a pathway to homeownership. That,
in Connecticut, would mean so much to many of our low income
citizens.
But more than that, it is an honor to be able to serve on
this committee, and I look forward to the work that we'll do on
this issue and others.
Chairwoman Waters. Thank you, very much.
We will now call our witnesses.
For the first panel, I think we have one witness, the
Honorable Orlando J. Cabrera, Assistant Secretary of Public and
Indian Housing, U.S. Department of Housing and Urban
Development.
Welcome, Mr. Cabrera.
STATEMENT OF THE HONORABLE ORLANDO J. CABRERA, ASSISTANT
SECRETARY, PUBLIC AND INDIAN HOUSING, DEPARTMENT OF HOUSING AND
URBAN DEVELOPMENT
Mr. Cabrera. Thank you, Madam Chairwoman.
Good morning, Madam Chairwoman, Ranking Member Biggert, and
members of the committee. Thank you for inviting me to speak
today.
I wanted to start by apologizing. I am getting over the
flu. I'm not contagious, but I might struggle a little bit
sometimes with my voice, so I'll take a break from time to
time, if it's okay with you.
Chairwoman Waters. Excuse me. If I may, we do not have your
written statement. You will be recognized for 5 minutes, and
we'd like to have you follow up with a written statement to us.
Mr. Cabrera. Yes, Madam Chairwoman, we will submit a
written statement. I believe I spoke to one of your staff, and
I think we'll get that to you within 30 days, if that's
acceptable to you.
Chairwoman Waters. 30 days?
Mr. Cabrera. Yes, please.
Chairwoman Waters. I need it before then.
Mr. Cabrera. Okay.
Chairwoman Waters. Could you get it to us in 10 days?
Mr. Cabrera. Yes, Madam Chairwoman.
Chairwoman Waters. Thank you. I think that's sufficient.
Mr. Cabrera. My name is Orlando Cabrera, and I'm Assistant
Secretary for Public and Indian Housing at the Department of
Housing and Urban Development.
As you know, our portfolio includes a housing choice
voucher program, which is the focus of this statement. In
recent years, we have seen many positive outcomes in the HCV
program. Budget based allocation of vouchers has provided
predictability for public housing authorities.
We have used tools that help us assure that we are serving
those whom Congress intended to serve. Improper payments have
been reduced significantly, down to $1.2 billion from $3.5
billion annually, resulting in HUD's removal from the
Government Accountability Office's high-risk list of government
programs.
But we also see areas that could make the housing choice
voucher program even more resilient and vital. We would like to
suggest that the platform for assuring that vitality is the
continued route towards simplification and away from
regulation. The vast majority of public housing authorities are
good stewards of Federal funds. HUD believes it is good policy
to encourage and incentivize that good stewardship in the HCV
program.
If the central theme is simplification, then we would
suggest that this committee, as authorizers, craft and pass
language that mirrors the budget based allocation set forth in
appropriations law in recent years.
The budget based system works. PHA's have noted that the
predictability of funding has helped them administer their
program. It allows the PHA's to maximize the number of families
that they can help in their communities.
We would also suggest simplifying rent calculations
compared to what the current methodology is. The current one-
size-fits-all for income and rent we suggest should be
revisited. It is very costly to administer and it encourages
the under-reporting of income.
One stakeholder group has published a chart that could not
better illustrate the complex labyrinth that is rent-setting.
I'd like to show that to you momentarily. This is the
methodology for rent-setting in Section 8. It is extremely
cumbersome.
Local PHA's--oh, I'm sorry, and Madam Chairwoman, we're
willing to have more copies of these delivered to the committee
for their review.
Local PHA's--
Chairwoman Waters. Without objection, they will be
submitted for the record.
Mr. Cabrera. Thank you, Madam Chairwoman.
Local PHA's know their markets better than we do here in
Washington. We should let them use the information they know
about their communities to better serve the voucher holders
they serve.
We would suggest simplifying the definition of income for
purposes of calculation and then give PHA's a parameter of
rent-setting tools, like flat rent, income-tiered rent, rent
based upon percentage of income as determined by the PHA,
current Housing Act rent calculation if the PHA elects, but
always providing a safe harbor for the elderly and the
disabled.
Performance standards should be established that can
independently verify how well PHA's are utilizing Federal funds
in order to assure adequate oversight of PHA's.
We would encourage focus on four essential pillars:
effective utilization of funds, financial solvency of the PHA,
physical condition of the units, and timely and accurate
financial and data reporting.
We would ask that you consider deregulating small PHA's,
PHA's with a cumulative total of less than 500 public housing
units and/or vouchers, by allowing them fungibility with both
Section 8 and Section 9 money. They still would need to meet
performance standards and report data.
Provide those PHA's statutory relief, and allow them the
fungibility so they can work those funds to the fullest extent
for the benefit of their communities.
Our sense is that there is some support for asset testing,
as well. We agree that asset testing would be a useful tool to
assure that Federal funds are going to those who Congress
intended to serve.
We agree that biennial, as opposed to annual, income
certifications and unit inspections, would reduce
administrative costs and be helpful, but would suggest that,
with certain exceptions, relying on initial and then not
conducting subsequent income certifications would work well for
the elderly and disabled population.
In conclusion, we would suggest that simplification is the
route to greater effectiveness of the housing choice voucher
program, not merely regulation.
Thank you for your invitation.
I will be happy to answer any questions.
[The prepared statement of Assistant Secretary Cabrera can
be found on page 68 of the appendix.]
Chairwoman Waters. Thank you.
The Chair yields herself 5 minutes for questions.
Mr. Cabrera, as a result of the updated voucher formula for
2007, and the structure that is contained in this bill, should
the bill prevent the recapture of pre-2007 program reserves at
least through 2008, if not permanently?
Mr. Cabrera. I don't believe that we have proposed the
recapture of the undesignated fund balances, and we have no
intent of proposing the recapture of those undesignated fund
balances.
Chairwoman Waters. Is the proposed permanent 2 percent
reserve level high enough to run the voucher program
responsibly?
Mr. Cabrera. I would answer the question in a different way
than a fixed number.
One of the issues is, what's the appropriate reserve for
the agency that is in question? A reserve number for the New
York City housing authority may not be the one that would apply
to a smaller one or a different large city, so I would say that
in some cases, I'm sure a 2 percent reserve would be fine, but
in some cases, you may need a greater or a lesser reserve than
that.
Chairwoman Waters. Thank you, very much.
That's all that I have by way of questions, and I would
yield to the ranking member, Ms. Biggert, 5 minutes for
questions.
Mrs. Biggert. Thank you.
The President's fiscal year 2008 budget proposes to
eliminate the cap on the number of families each PHA is allowed
to assist in order to assist at least 180,000 additional
families.
Could you explain the current difficulties with the cap and
how it affects PHA's that may have funding reserves but are
currently unable to spend them?
Mr. Cabrera. The undesignated fund balance is an amount of
money that most PHA's have, 200 out of 2,400, and it is split
into two parts.
One is that which is outside of the cap and can still be
used, and that which is, or might be, within a cap. Every PHA
is different. There is no uniform rule. And so for those that
are now, that have hit their cap in terms of the ability to
issue more vouchers, by having the cap there, we are impeding
them from moving forward and leasing more.
Removing the cap would give them the flexibility to lease
more, but it would also impose on them, as we would want to
impose on them, the obligation to be good, responsible
financial stewards of Federal funds. And so they would be able
to determine for themselves to what extent they would lease
more beyond that cap.
Mrs. Biggert. But aren't they the ones that really have
been good stewards and have gotten, you know, all the vouchers
out to all those that they can, and so it seems like right now
we are penalizing them, and particularly with this continuing
resolution, where they have lost their funding because they've
had the reserves while they're waiting to be able to not have
that cap limitation?
Mr. Cabrera. The cap is impeding the ability of many very
good performers from reaching further.
Mrs. Biggert. Okay.
Then in recent years, Congress has changed the way that the
voucher program is funded, moving from a formula that was based
on the number of units that a PHA was under contract was HUD at
their current per-unit cost to a dollar-based formula
established by the number of units under the lease on a given
date, adjusted by the inflation formula.
What further improvement could be made?
Mr. Cabrera. The biggest improvement that could be made is
providing PHA's with predictability.
Re-benchmarking every year is going to, I think, impose an
enormous burden on PHA's, and also open some real issues with
respect to how vouchers are used and utilized, such that, for
example, we may be put in a position where the over/under-
payments that we have just been taken off the high-risk list
for at HUD, that that might become an issue again.
Our suggestion would be that there would be a baseline and
every 3 years, triennially, the re-benchmarking would be
revisited based upon that baseline. It would be a periodic
thing.
That way, PHA's could plan, they could understand, they
would understand that number is not immutable, it changes with
time, depending upon what needs might be, and I think it
addresses well the needs of particular PHA's.
Mrs. Biggert. Does the current draft, does it revert back
to a unit based formula, then?
Mr. Cabrera. No, that would be a budget based formula where
you would be re-benchmarking triennially, every 3 years, is
what we would probably recommend most strongly.
Mrs. Biggert. Okay. Thank you. I yield back.
Chairwoman Waters. Okay. Thank you, very much.
Before yielding to Mr. Lynch, I'd just like to be sure of
what you said about the reserves or the--
Mr. Cabrera. Undesignated fund balance?
Chairwoman Waters. Yes.
Mr. Cabrera. Yes.
Chairwoman Waters. Did you say that you absolutely support
PHA's being able to hold onto their reserves and to spend
them--
Mr. Cabrera. We do. We've included that, Madam Chairwoman,
in our financial audit.
As I recall, we have a footnote that says that the
undesignated fund balances belong to the PHA's.
Chairwoman Waters. All right.
Mr. Cabrera. Now, as a matter of policy, that is what we
believe.
Chairwoman Waters. Thank you, very much.
Mr. Lynch, 5 minutes.
Mr. Lynch. Thank you, Madam Chairwoman.
Under Secretary, again, thank you for coming.
Mr. Cabrera. Mr. Lynch, thank you for the promotion.
Mr. Lynch. I'm sorry, Mr. Under Secretary, yes.
You know, if I listen to my housing tenants in my
district--again, I think I have 22,000 families who are
classified as extremely low income, and I have 13,000 who
qualify under very low income, according to ho HUD standards--
they feel, and the advocates for these tenants feel that
there's been a real retrenchment over the last 7 years
regarding national housing policy, some would even say
abandonment.
We've seen it in this committee, and you heard from the
ranking member, who's talking about the millions of dollars
that will not be there for folks in her district, as well, who
live in public housing.
It just seems that right now, and for the last 7 years,
we've been operating the public housing systems in the United
States as housing of last resort, the nowhere-else-to-go
housing.
You have to realize, at least what I see broadly happening
here, is we have, you know, 46 million people without health
care, so that at any point, a family could be put in a
disastrous, catastrophic situation that would require them to
go to housing of last resort, or there's no job security, so we
see people constantly being tossed out of work and then they
have to get on a list for public housing, and also there's no
retirement security, no pension security in this country
anymore for a lot of people, so we see a lot of seniors getting
stuck at the end of their working lives.
And it's just troubling to see the development of our
disinvestment in our public housing projects.
Again, with those numbers that I talked about with the very
low and extremely low in my district, I still have the highest
private--well, it's the third highest in the country--the
rental markets, the private rental markets.
So there's really no other opportunity for them to move
into private housing. And yet HUD itself defines affordability
as spending no more than 30 percent of income on housing, and
in my district, half of the extremely low income households are
paying greater than 50 percent, so they're well beyond what the
guidelines would be. And 20 percent of the very low income
housing are in the same boat.
My first question relates to the average rent burden for
these voucher holders. Are the numbers we see in my district
common to those across the country, and what can we do about
that?
And my second question relates to the goal of
decentralizing concentrations of poverty. When we have the
situation where folks are struggling, just like when I lived in
the housing projects, folks were struggling, it just seems that
it builds upon itself, you know, a feeling of some level of
despair. The jobs aren't there. You know, it's just a very
difficult situation.
I have places in my district, Dorchester, Roxbury, the City
of Brock--those are in Boston but also in Brockton--where
gentrification and increasing rents are really concentrating
people in very poor areas. And, you know, at the same time, we
have a deficit of over 10,000 rental units that are needed for
extremely low income families.
I just want to know if you're doing anything that helps
this situation to give families an opportunity to maybe
diversify rather than being all together and generally in areas
where the job opportunities are not there?
Can we get people out of those developments and give some
of those families a chance to move out, decrease the pressure
in those areas, and connect these people with the jobs that
will get them out of those situations and just ease the
suffering in some of these developments?
Mr. Cabrera. First, you need to know something that will
illustrate for you why I'm answering this in a particular way.
I'm from Boston. I grew up in Allston, just west of you.
But the thing is, we moved to Florida, so I rediscovered R in
the alphabet.
Mr. Lynch. I have not.
Mr. Cabrera. I know. I noticed that.
Mr. Lynch. Sometimes we have an interpreter up here.
Mr. Cabrera. I still remember. I don't need interpreters.
So the next thing is that I grew up near Fidelis Way, so
I'm familiar with the stresses of Boston.
The third thing is that in Allston-Brighton, as you know,
as you drive up Comm Ave, you have all those brownstones, used
to be where my friends lived, and they used to be walkups, and
they used to--I remember when my father, the rent went up from
$180 a month to $200 a month, and I remember him going to our
landlord, who lived on the second floor, and they had this
pitched--they were two very close friends, and they had these
pitched battle.
So--
Chairwoman Waters. The gentleman's time has expired.
I yield 5 minutes for questioning to the gentleman from
California, Mr. Miller.
Mr. Miller. Thank you, Madam Chairwoman.
I just think this program is growing out of control, and
it's not efficient, and yet the basic need of reform, we have
about 10 million households out there in different need of
housing assistance, and they're on a wait list of a minimum of
2 years, in the Los Angeles area 10 years.
And can we justify a situation where one person is given
unlimited Federal housing assistance while another one is put
on a wait list, who might have a greater need?
Mr. Cabrera. Well, one of the ways to address that,
Congressman, is that--and we're beginning to explore this--is
to start looking at the wait lists and using the tools that we
use in order to verify income when folks get the voucher, to
basically, periodically, move folks off the wait list who would
not otherwise qualify at that point in time, and that would
thin out the wait list to assure that the people on it actually
qualify for the voucher.
Mr. Miller. We placed limits on TANIF in 1996. Do you think
we should impose the same limit requirements on those who
receive Section 8 vouchers?
Mr. Cabrera. I don't recall the limits on TANIF from 1996,
Congressman. I'd like to request your indulgence and ask--
Mr. Miller. Do you think we should impose time limits on
vouchers?
Mr. Cabrera. Oh, time limits. Oh.
I think that the PHA's should have--I understand the
question, and I apologize--the PHA's should have the
flexibility to decide for themselves if they want to impose
time limits, yes.
Mr. Miller. I thought that when I introduced a bill 2 years
ago, trying to go in that direction.
Moving to work, currently we only allow about 32 of the
PHA's out of the 3,000 to get involved in the move to work
program. Could you give us your observation on the move to work
program?
Mr. Cabrera. Moving to work is a program that allows the
funging, the combination of Section 8 money, housing choice
voucher money, and Section 9 money, operating fund and other
funds, and it gives them the ability to use the whole pool of
money to address housing needs in the community in whatever way
they really want, as long as it's within the contract of MTW.
So my view of that is, it's worked for the most part
extraordinarily well--
Mr. Miller. Are we serving more families on that move to
work program?
Mr. Cabrera. I think more families are being served, and I
think, coming back to your first point, not only that, but we
have more efficient PHA's being run.
Mr. Miller. In the current system, PHA's are forced to skip
low income working families who have been on a waiting list for
years in order to meet the existing targeting requirements that
we face out there.
Do you think Congress should change the current targeting
requirements, and if you do, how would we go about doing that?
Mr. Cabrera. I think that, on the Section 8 side, the
targeting is 75 percent of vouchers for folks at 30 percent of
AMI and below, while on the public housing side the target is
40 percent of units for folks at 30 percent of AMI and below.
I think that there--I can certainly understand that certain
stakeholders would feel extremely committed to the idea of
keeping the 75 percent number. I do believe it impedes a PHA's
ability to fully function. I think giving some flexibility--I'm
not saying a set number, but some kind of criteria, maybe a
tiered criteria, maybe a set of options--would better serve
people.
I think at the end of the day, you're still serving the
same demographic, but you are serving them in a more flexible
way.
One of the reasons that we're married to this particular
demographic is simply the standards set by Congress. The 30
percent of AMI is not regulatory, it's statutory.
And so therefore, one of the things we should begin talking
about is maybe it's not 30, maybe it's 40 percent of--
Mr. Miller. So allowing more flexibility for PHA's based on
their local needs--
Mr. Cabrera. Without question.
Mr. Miller.--local determination?
Mr. Cabrera. Without question.
Mr. Miller. Yes.
Portability. We've discussed that in the past, and there's
been some debate, because it's cumbersome for the housing
authority.
Sometimes a housing authority will have a person move to an
area that really costs them two vouchers, based on the cost of
that area.
Do you think Congress should limit portability moves to
issues such as job, medical, and education, and do you think it
should be even limited to an area that's within the same cost
range?
Mr. Cabrera. I think portability is an issue that we need
to visit. Portability, I think, is as much an issue of the
reimbursement as it is the fact that there is portability. I
think one of the things that would be helpful is looking at
ways for the PHA that is carrying the burden to be more quickly
reimbursed for having gone out and done the port, but at the
end of the day, I would worry about restricting PHA's too much
on portability on the one hand. Certainly, having wide open
portability or imposing that on PHA's really is putting them in
an uncomfortable position.
Mr. Miller. But some kind of justification?
Mr. Cabrera. Yes.
Mr. Miller. Okay. Thank you.
I yield back.
Chairwoman Waters. The gentleman's time has expired.
Mr. Cleaver, for 5 minutes.
Mr. Cleaver. Thank you. Thank you, Madam Chairwoman.
Mr. Cabrera, I was outside. I may have missed. Hopefully,
you didn't address this in your opening statement.
My first question is, do you believe that we are currently
operating with sufficient Section 8 certificates?
Mr. Cabrera. Vouchers, you mean?
Mr. Cleaver. Yes. The voucher is certified, so I call them
certificates.
Mr. Cabrera. Congressman, we have proposed the budget that
we always propose. That is what we believe, is that we are
funded appropriately for the voucher program, yes.
The voucher program has increased in funding every year
since, well, since its inception--
Mr. Cleaver. I know, since 1974.
Mr. Cabrera. Yes.
Mr. Cleaver. That's not my question, though. Let me ask it
another way.
Is HUD satisfied that there are sufficient vouchers to
handle the people who need housing, the poor who are in need of
housing?
Mr. Cabrera. The President's budget is $16 billion for
fiscal year 2008, and assuming we remove the caps and assuming
that we--
Mr. Cleaver. Okay, I'm sorry--
Mr. Cabrera.--the answer is yes, I think we can do it well.
Sure.
Mr. Cleaver. Okay. Sometimes I'm not as articulate as I
should be, so I'll try it again.
Is HUD satisfied that there are sufficient dollars
available in the budget to provide sufficient housing for the
poor and that we don't need any additional vouchers?
Mr. Cabrera. Okay.
Congressman, respectfully, I have answered the question,
and with the assumptions that I gave you, that is the answer.
Mr. Cleaver. Respectfully, you haven't. I mean, very
respectfully, you haven't.
And if you could just say we don't have sufficient dollars
or we think--
Mr. Cabrera. The answer is not a yes or no question. We
have made a proposal within the concept of appropriation, we
have provided the parameters upon which we can expand Section
8--
Mr. Cleaver. So you don't need any additional dollars for
vouchers?
Mr. Cabrera. Assuming that we get the caps removed, the
answer is that--we are getting additional dollars for vouchers.
Assuming the caps were removed and those things that have been
proposed are put in place--
Mr. Cleaver. Enough to sufficiently house people who need
them?
Mr. Cabrera. In accordance with the budget that's been
proposed, yes.
Mr. Cleaver. Okay. You made up your mind before you left
that you weren't going to answer that question, before you left
the HUD building, so that's fine. Maybe you'll answer this one.
Is there any way we can address the problem that many of
us--I've served as a mayor, as well--have to deal with: if we
concentrate the Section 8 housing in one area, it's generally
because the amount of money for each unit is insufficient to
move them into other neighborhoods that may be more socio-
economically upscale, so consequently, we always end up placing
the Section 8 certificates in the same neighborhood, because
that's the amount of money per voucher that will allow us to
secure housing.
So is there a way that we can actually accomplish the
spreading out of Section 8 that would be supported by HUD in
terms of raising the amount that each voucher is worth?
Mr. Cabrera. The answer--well, I'm not sure of the
question, but I'm going to try to answer it.
Section 8 has two components to it. One is the tenant-based
rental assistance program.
Mr. Cleaver. Yes.
Mr. Cabrera. That is a voucher held by a person, and they
can go anywhere they want.
So the fact that folks are concentrated or not concentrated
is a function of whether the landlord will or will not accept
the tenant-based rental assistance.
Mr. Cleaver. Except that the landlord will not accept a
voucher in Hollywood, and so therefore everybody lives in
another section of the community.
Mr. Cabrera. Right.
Mr. Cleaver. And so how do we talk about dispersing the
residents all over a community when only one section of the
community will have landlords who will accept the voucher?
Mr. Cabrera. I would say, Congressman, that I don't--you
know, the idea that Congress would impose on landlords the
obligation to accept all vouchers, I think that--that's what I
think you're saying, and I'm not so sure that--
Mr. Cleaver. That's not what I said. I said what can HUD
do?
Chairwoman Waters. The gentleman's time has expired.
Mr. Cleaver. Thank you.
Chairwoman Waters. The gentleman from Connecticut, Mr.
Shays.
Mr. Shays. I'd be happy to yield a second.
Mrs. Biggert. Thank you so much. Well, a little more than a
second, but I did want to clarify just one thing about the
questioning before.
I was talking about the draft legislation, not what is
currently being done on the unit versus the budget.
And as you mentioned, the appropriators have made changes
to the Section 8 program that moves us from the unit based to a
budget based program.
But I think that HUD, and you have indicated that you have
a concern about the draft proposal that we're working on that
takes us back to the unit based pricing.
Can you explain your concerns and how you think that this
draft proposal does that, takes us back to the unit-based?
Mr. Cabrera. The draft proposal--
Mr. Shays. In 20 seconds.
Mr. Cabrera. In 20 seconds, the draft proposal does go back
to a unit based system.
It basically says every year you fill out and add to the
number, the dollar number, the units that are out. That's a
huge difference from where we are right now.
Mrs. Biggert. Okay.
Mr. Shays. Thank you.
When you were in dialogue with Mr. Lynch, you guys started
to wax eloquent about Massachusetts, and that happens all the
time, and you never answered his question.
But it was--I'm being serious.
Mr. Cabrera. I can continue if you'd like.
Mr. Shays. No. I want to know afterwards, the rest of the
story.
Mr. Cabrera. Sure.
Mr. Shays. But what I would like to know now is, the bottom
line is, and this is a serious problem, aside from the fact
that Section 8 consumes so much of HUD's budget, we're really
finding a lot of families who are having to pay more than 30
percent.
I'd like a short answer to the question, are you trying to
identify towns where this is a common practice, where they're
simply, you know, seeing that happen, number one, and number
two, if you are, are you trying to identify the tenants?
Mr. Cabrera. Where someone is paying more than 30 percent
of their income?
Mr. Shays. Yes.
Mr. Cabrera. No, there is no current effort that I know of
where we are undertaking some survey of who's inside or outside
the band of affordability.
And that would happen by market. That's--that is--that's a
very different issue than--
Mr. Shays. Okay.
But the issue is that some tenants are ending up paying,
and I'd like to know if this is endemic in certain parts of the
country, and if it's the practice of the housing authority
that's allowing this to happen.
Secondly, another concern I have is that it's my
understanding that in some cities they're really not paying the
fair market rate, they're really pushing the landlords to much
lower, and I guess we should say that's good if they get a good
deal.
Is that a case that's happening?
Mr. Cabrera. In most cities, the problem is that the way
the fair market rents are being--this is one of the things I
was trying to say earlier.
The way fair market rent is calculated now, it is
essentially a data collection, and it's 2 years old.
Mr. Shays. Okay. Let me leave it with that.
Mr. Cabrera. And it's 2 years behind the times.
Mr. Shays. Okay.
The last point, the GAO removed from high-risk series the
FHA and the rental property. Len Wolfson didn't ask me to ask
this question, but it seems to me you should be congratulated,
so let's assume he did his job and asked me to ask that
question.
Mr. Cabrera. Thank you, Congressman.
Mr. Shays. And by the way, he does a great job for you.
Mr. Cabrera. Thank you, very much.
Mr. Shays. So tell me about it, about being removed.
Was it a long effort? Do you want to talk about it, or are
you just--
Mr. Cabrera. It was an effort of years and countless people
who did wonderful work at HUD, and absolutely had nothing to do
with me, and I couldn't be more proud of them. They did a
terrific job.
Mr. Shays. Great. Ms. Biggert, would you like any more of
my time?
Mrs. Biggert. Thank you, Mr. Shays, I would.
I still am concerned about this issue.
Could you explain your concerns about going back to the
unit base?
Mr. Cabrera. In broader than 20 seconds?
Mrs. Biggert. Yes.
Mr. Cabrera. The unit based system will, it's not a
geometric progression, but it's a much faster progression if
you do a unit based system, because there are issues of how
vouchers are issued annually.
So you will have a situation where there is no regulator,
not in a legal perspective, but in a financial one, on what or
how vouchers are issued, and if there is one, there isn't a
very solid one.
This is what the problem was before. That's where you saw
the very much more vertical increase in Section 8 budgeting.
With budget based Section 8, with that, what you had was a
situation where PHA's were given money based on a baseline with
an annual adjustment factor, with a couple of other factors,
and they were told, ``Here is your budget, serve the folks that
you need to serve within your budget.''
So one of the things that they were also told there,
though, regrettably, in my view, is that, ``Oh, incidentally,
we're going to cap a portion of this. We're going to cap your
undesignated fund balances and you can't exceed the issuance of
vouchers if you hit that cap.''
And if that's removed, I think it gives quite a bit of
leeway for particular PHA's to move forward and house more
people.
Chairwoman Waters. The gentleman's time has expired.
Mr. Green of Texas, 5 minutes.
Mr. Green. Thank you, Madam Chairwoman.
Sir, thank you for appearing today.
Mr. Cabrera. Thank you.
Mr. Green. Under your formula, would any agencies receive a
cut?
Mr. Cabrera. Under the appropriation formula?
The issue is not cut or increase in terms of a cut. The
issue is the distribution of money going to various PHA's,
depending upon how their vouchers were utilized.
Mr. Green. Would any agency receive less than the previous
year?
Mr. Cabrera. Congressman, the answer is yes.
Mr. Green. And would you kindly give some indication as to
how your proposal would address first-time homeowners using
vouchers as a down payment?
Mr. Cabrera. We don't have a proposal, Congressman, but in
SEVRA, first of all, Section 8 has been used for homeowner
assistance for the last 5 years, 10 years, so once the
commitment is made, they have 10 years worth of Section 8
vouchers which they can use to redeem mortgage payments.
This codifies that policy, as I recall, that was previously
in an appropriations act.
Mr. Green. With reference to persons who are in exceedingly
low income areas, how do you propose addressing persons who are
in these very low income areas, and because they are making--
they are using 30 percent of their local median income, you
still would miss persons who are working full-time and may be
below the poverty line.
How would you address those persons?
Mr. Cabrera. The 30 percent of income is a statutory thing.
That is, the purpose of Section 8 is to defray the cost
between fair market rent and what the person can pay.
So that's just part of how the voucher works.
Mr. Green. With reference to the Federal poverty line, do
you see a means by which that can be incorporated?
Mr. Cabrera. The poverty line, I saw that language in the
Act, and I thought, ``I need to think more about that,'' and
I'm happy to answer that question later, but it's a relatively
new proposal, and I'm trying to figure out in my head, which is
going to take me a little bit, what the implication of that is.
And if you'll indulge me, I'm happy to talk about that or
respond to you in writing as to what the effect of that would
be.
Mr. Green. Please, if you would.
Mr. Cabrera. I'll be happy to.
Mr. Green. Madam Chairwoman, I'll yield back.
Chairwoman Waters. Thank you, very much.
Ms. Capito.
Ms. Capito. Thank you, Madam Chairwoman.
Chairwoman Waters. Five minutes.
I will yield time to the ranking member, if she still has
additional questions.
Mrs. Biggert. Thank you, very much.
I just have one quick question, and then I'll yield back to
the gentlelady.
Re-benchmarking every year, and I think you've talked about
3 years, is there any middle ground, or could you--
Mr. Cabrera. Two?
Mrs. Biggert. Well, that would be one, two, three, but do
you think that is enough time?
Mr. Cabrera. Yes. No, I think re-benchmarking every 3 years
would work.
Re-benching annually I think, and I'm not presuming to
speak on behalf of those organizations that represent PHA's,
but my sense of life is that they will tell you that would, to
a large degree, create some rather significant stress in the
PHA community.
Mrs. Biggert. Thank you. I yield back.
Ms. Capito. Thank you.
I'd like to ask a couple of questions.
We hear a lot about the waiting list and the length of the
waiting list, and the immovability of the waiting list.
What kind of measures is HUD doing or helping to assist
with the PHA's to move or weave through these waiting lists to
make sure that they're verifiable, that they're still active,
and that they are an accurate representation of those who are
still in need?
Mr. Cabrera. Congresswoman, the waiting lists are very
static, and what we're trying to do now is use a tool that we
use when the voucher is administered to verify income, to
assure that the voucher holder is within the income bandwidth
on the waiting list to make sure that periodically the waiting
list is checked, to assure that people who are on the waiting
list still qualify for vouchers.
Ms. Capito. I have another two areas of concern with
housing in general and some Section 8 issues.
One involves the elderly. I mean, I represent West
Virginia, and we have one of the most elderly populations in
the country.
And we have a real challenge finding the ability for our
elderly to find sufficient housing that's not only affordable,
but is safe and accessible for the elderly.
What kind of initiatives are, either through this program
or other programs, are you pursuing in a rural kind of setting?
Mr. Cabrera. Vouchers for the elderly are under a different
section, Section 811, but at the end of the day, elders are a
huge component of all vouchers.
Frankly, we've just undertaken those things that Congress
has told us to do with respect to housing the elderly using
vouchers.
One of the things we did do is to try to consolidate the
effort between HHS, Health and Human Services, and us, to make
us more like a one-stop shop, so that we can port all of these
services together.
One of the issues with elders is services, and so we're
making pretty significant efforts in trying to package that or
create that package.
Ms. Capito. Okay. My final question is on the substandard
quality of some housing that is either, (a), uninhabitable, or
is being lived in and still doesn't meet up to your biennial or
annual inspections.
I think we learned during the Katrina hearings that, I
can't remember the exact percent, Madam Chairwoman, but it was
very high, a lot of the units that were not being--that were
uninhabitable, and I think we're having that across the
country.
What's the solution to that? I mean, you know, we talked
about one-on-one replacement, we talked about, in this new
bill, we've talked about biennial inspections instead of annual
inspections.
What's your perception of that?
Mr. Cabrera. In the case of New Orleans, most of that issue
with respect to housing quality, as I recall the testimony, was
with respect to the public housing units. This is on Section 8.
So really, when we talk about Section 8, we're talking
about the private market, and there the housing quality
inspection is actually pretty good.
The issue, though, is twofold.
Number one, funding inspections is key, and that is
something that we would encourage.
The second thing, though, is uniformity of inspection.
Very often, what winds up happening is that if we do have
inspections, we find things that are just, not just--it's not
that they're innocuous, it's that they're inapplicable to a
housing setting.
The best example I can give you--this is someone who
recently spoke to me; this happened 4 days ago.
There was a landlord, and they were very brave. They said,
``I have a unit. I take the Section 8 voucher. You need to know
the ceiling fan was off of the ceiling, the electrical box door
was torn off, an outside outlet had live exposed wire, and the
inspector cited me for not having 6 inches of caulking on my
kitchen window, but nothing else.''
Chairwoman Waters. The gentlelady's time has expired. Thank
you.
Mr. Clay of Missouri, 5 minutes.
Mr. Clay. Thank you, Madam Chairwoman.
Welcome to the subcommittee, Mr. Cabrera.
Mr. Cabrera. Thank you.
Mr. Clay. You know, the Section 8 Voucher Act will
eliminate some of the stranglehold that the Administration put
on the Section 8 program in 2004.
The program will return to funding a set number of vouchers
rather than providing a lump sum that mostly resulted in
drastically decreasing the numbers of vouchers funded.
This Act will target vouchers to extremely low income
families, increase tenant protections, and have quality
inspections of both rental and privately owned assisted
housing.
And the proposal does much more than this. I say that
because I represent St. Louis, and we are finding a
disproportionate percentage of privately owned assisted housing
contaminated with lead paint.
When housing is inspected, I wanted to know, does HUD
inspect for the presence of lead contamination in the home, and
still allow tenants to move into the units?
And as you are aware, lead is a very serious health hazard,
especially to children.
Just what is HUD's policy in regard to that when they find
lead present in a unit?
Mr. Cabrera. Congressman, I'm going to ask that you let me
ask my staff. I don't know whether on the sheets, the checklist
that they use for inspections, lead is on there.
May I be excused for just a minute?
Mr. Clay. Sure. Sure. Please.
Mr. Cabrera. HUD does not require it on the checklist. The
landlords are required to check for lead on their properties,
particularly when the property is older than 1978.
I think there's a disclosure, as I recall, in most leases.
There is a provision, though, where if a child has an elevated,
I don't know what the standard is, but an elevated level of
lead, then they have to be moved out of the unit.
Mr. Clay. I see. And as you are aware, a lot of the local
communities have lead ordinances which require inspection.
I would really love to see HUD put in place some kind of
coordination with those local communities or States in order to
protect these young children who inevitably are exposed to
lead.
I would really, really like to hear more on that from your
agency.
Let me ask you about a question that Representative Green
also asked, about homeownership. Has there been any movement or
decision by your agency to increase the number of tenants who
are actually using their Section 8 vouchers for mortgage down
payment or to pay that mortgage?
I heard you say earlier that right now there are about
5,000 homeowners nationally. Are there any plans to expand on
that program?
Mr. Cabrera. That program exists now, and to the extent
that it can be fully utilized, we're great proponents of
homeownership. We will continue to keep promoting
homeownership.
Mr. Clay. Okay. And so you would be willing to--
Mr. Cabrera. I would be willing--
Mr. Clay.--look at another opportunity, another--
Mr. Cabrera. The issue with the Section 8 voucher and
homeownership is simple.
It's fitting the value of the property that someone might
be able to buy and anything else they can get in terms of
trying to buy that property and the voucher. That's a financing
issue.
But wherever the opportunity comes up, we're happy to
promote it.
Mr. Clay. Thank you for that response.
What has been your agency's overall reaction to this
proposed law?
Mr. Cabrera. Well, it's much of what I noted in my opening
statement, Congressman.
It's basically that we believe we should stay on a budget
based system. We believe that the issue is simplification more
than anything else. We believe that PHA's are good stewards of
their money, and that they know their markets better than we
know their markets, and so therefore, we need some rent
flexibility and some flexibility with respect to how income is
certified.
We believe that with all of those tools, I think everybody
wants just a better business model, and that's what we're
proposing, is a better business model to get and to serve more
people.
Mr. Clay. Thank you for your response.
I yield back.
Chairwoman Waters. The gentleman's time has expired.
Mr. Sires from New Jersey.
Mr. Sires. Thank you, Madam Chairwoman.
Mr. Assistant Secretary, do you have a breakdown of the
people who get Section 8--say seniors, veterans--do you have
any, of the total?
Mr. Cabrera. Congressman, every quarter, we report to
Congress on exactly what that breakdown is. We're happy to
provide you a copy of that.
Mr. Sires. Would you?
I guess I am looking for a way to make the Section 8
program more senior friendly, more disabled friendly, and more
veteran friendly. We're obviously going to get more veterans.
What recommendations would you give this body that would make
that possible, in your eyes?
I know that Section 8 is broad, and I saw the formula that
you put up. I can see it from here.
But what recommendations would you give us to make it more
friendly for those folks?
Mr. Cabrera. For the veterans?
Mr. Sires. Veterans, seniors, and disabled.
Mr. Cabrera. I think on the elderly side, what I noted
earlier, about packaging things in a particular way is
important, and this also would apply to folks who are disabled.
The issues, housing folks who are elderly and housing folks
who are disabled, are similar in many ways, mostly have to do
with not just the housing but the services package that comes
with it.
So trying to coordinate what is done with someone who is a
voucher holder with all of the other things that they might
receive I think has value. I think it would work well.
For example, someone who is elderly, they typically are
receiving Social Security, up to a certain amount, or they're
getting Medicare help, and there's a package of services that
they're getting.
And coordinating that with the unit that they're in, so
that the unit, for example, lends itself to the services that
they might need is something that has value, and we're working,
and we've been working on, for quite a while.
On the veterans' side, we--yesterday we opened the--this is
a broader issue, but we've just started a housing locator 2
weeks ago at HUD, and so we're opening the housing locator to
all veterans, period.
That means when they come home, they can look for a place
to live if they need one, and the locator will provide whether
or not it's a Section 8, it's a landlord that accepts Section 8
or if it's a public housing unit or if it's just a market unit.
Beyond that, the issue on Section 8 is a budget based
issue, so a lot of that would probably need to be worked within
the concept of the budget of Section 8.
Mr. Sires. Do you recommend that, if you're a veteran or a
senior, that it be weighted a little more than the rest of the
components of the formula?
Mr. Cabrera. I think as a senior, you're getting vouchers
under a different program already, so that's a given.
VASH is the program for homeless veterans, and it's a pilot
program, and it's been around since 1991, so that's a discrete
program.
My sense of life is that there would be considerable stress
about--from a lot of quarters--about the fact that there are a
lot of families who need housing.
I'm not sure that--I think when issues, in terms of
vouchers or anything else, start falling into areas of set-
aside, that people tend to react pretty strongly.
Mr. Sires. Thank you.
Thank you, Madam Chairwoman.
Chairwoman Waters. Thank you, very much.
Mr. Murphy of Connecticut.
Mr. Murphy. Thank you, Madam Chairwoman.
I wanted to return for a moment to the subject that Mr.
Lynch and Mr. Shays, I believe, brought up, although I was out
of the room when you may have answered his questions, and it's
obviously a parochial concern that you understand, being
originally from Massachusetts and Connecticut.
Obviously, we have one of the highest costs of living in
the Nation, but we also have some of the greatest disparities
of wealth. We have some very poor people living in our cities
with some relatively--some very high housing costs where we
have, as Mr. Lynch said, people paying 50 percent of their
income in housing.
And I guess I want to understand, when you talk about
flexibility for PHA's in trying to maybe deal with some of the
nuances geographically, that sounds to me, coming from
Connecticut, as a means to spread, to have a PHA spread
vouchers out to fewer people, maybe understanding that the
amount they need might be more, so that fewer people might end
up getting served in Connecticut and more people might get
served somewhere else.
And so I guess my question is, as we're trying to address
the sort of higher cost of living areas, is it a matter of just
giving flexibility to PHA's or is this a matter of increasing
the sort of end strength of the money that we put into the
program?
Mr. Cabrera. No, I think it's a matter of the flexibility
in the PHA's.
I don't think that it follows that it would be fewer people
at all.
I think one of the issues that is faced by most PHA's is
that they administer. The cost of administering the whole
income certification process, the whole rent-setting process is
enormous for them.
And I think on the one hand--I mean that from an
administrative perspective.
I really wasn't addressing that issue. I was trying to say,
for PHA's, first of all, PHA's know far better and can tell you
more acutely what their economics are than we can.
The fair market rent standards that are used for the
payment standard in the Section 8 program are 2 years behind
today. That's the way it's designed, statutorily. They know
their markets more recently, they know the data in their
markets more recently than that.
And so what we're trying to say is, let them use the data
locally that they have to set these standards. I'm not saying
don't look at them. I'm just saying give them the flexibility
to use an alternative set of data in order to make these calls.
And in terms of income certification, currently what we
have is income with any number of deductions and additions and
things that affect income in so many different ways, in so many
permutations, one way on one day, one way on another. Trying to
simplify what that is would be enormously helpful to PHA's.
So most of the issue I was really addressing was the
administration of the housing choice voucher program by PHA's.
Mr. Murphy. And for a moment, I just want to turn to the
issue of supportive housing, which is a major topic in
Connecticut. We're beginning to do it very well, to try to
partner some essentially State-funded social programs with some
federally funded social programs with Section 8 vouchers.
And this is maybe by means of just educating me on what our
Federal Government is doing to help partner with States'
efforts to try to put together Section 8 vouchers with some
critical social services that hopefully are eventually going to
lead, be part and parcel of our effort to move towards
homeownership, move towards some type of income growth for
these individuals, to just talk for a moment about what the
Federal Government may be able to do to help a State like
Connecticut on supportive housing issues.
Mr. Cabrera. Again, just reiterating what I noted earlier,
we're very much in agreement that, to the extent--so much of
that has to do with accessibility to the overall menu of
subsidy available to a person.
And so one of the things that we've been focused on is
trying to create a spate of options for someone who needs
supportive housing, whomever they might be, so they don't have
to go to the various windows, that you go to one place.
And that is the single biggest effort that we're taking in
that regard.
Mr. Murphy. And that would be within that voucher?
Mr. Cabrera. It would be within the entire spate of--no,
not within the voucher. It would be within the--remember, these
are different subsidies, so it can't be within the voucher.
But to coordinate, for example, with HHS or with any other
component out there that is the provider of that service,
that's really--it's an issue of essentially everybody
integrating with one an other in order to make sure that
whomever the recipient is of the subsidy, they're getting what
they should be getting, they're getting what is offered to
them, and they're aware of it. That's a big issue, is
awareness.
Mr. Murphy. Thank you.
Chairwoman Waters. The gentleman's time has expired.
Mr. Ellison for 5 minutes.
Mr. Ellison. Madam Chairwoman, thank you.
Thank you for coming today. I just have a few questions,
but I don't have much time.
Currently, the policy of HUD with regard to verifying
whether or not the units have lead in them is such that HUD
relies on landlords to find out whether there's the presence of
lead; is that correct?
Mr. Cabrera. That's Federal law, yes.
Mr. Ellison. Yes. Well, let me ask you this.
Given that landlords sometimes--you know, the Federal
Government can't really adequately know whether landlords are
doing this all the time, and given the high risk and the
serious danger lead presents to developing children, what are
your views on whether HUD should have a role on verifying
whether there's presence of lead in the units, in Section 8
units?
Mr. Cabrera. The--first of all, all the lead issues at HUD
are in another office. I'll answer your question, nonetheless.
But that isn't within PIH.
We essentially will do what Congress tells us to do. At the
end of the day, the Act itself says that the landlord has that
responsibility.
Mr. Ellison. Yes, I'm aware of that. And the way I framed
the question to you was not what does the Act say.
Mr. Cabrera. Right.
Mr. Ellison. I told you what I understood it to say.
Mr. Cabrera. Right.
Mr. Ellison. I'm asking you your views on protecting
children, and between the landlord and HUD, you know, what's
your view on the relative power to make sure that we have lead-
safe homes for those kids?
Mr. Cabrera. There are limits to what HUD can do because of
the Act, and so therefore, that's why I'm answering in that
particular way.
Mr. Ellison. Yes, but I am asking you in terms of looking
toward the future and protecting children, as a professional at
HUD, what are your views on the relative ability between the
landlord and HUD to make sure we have kids in a lead-safe
environment?
Mr. Cabrera. Congressman, I'm happy to have that
conversation with you some other time, but right now, I really
can't, not because of any other reason, than I really, I
haven't really thought about it.
Mr. Ellison. Okay. You know, that's a fair answer.
Mr. Cabrera. It's not that I haven't thought about lead
generally. I have concerns about lead.
But I'm talking about thought in the context of Federal
laws--
Mr. Ellison. I appreciate you saying that you haven't
thought about it. That's a fair answer. Because, I mean, I'm--
Mr. Cabrera. It's not that I've thought less.
Mr. Ellison. Right.
Mr. Cabrera. It's that I'm happy to think with you on it,
but I'd have to go back, look at where we are in terms of the
Federal law, give you an idea from a policy position, which at
this point in time--
Mr. Ellison. Yes. Well, let me just tell you--
Mr. Cabrera.--very difficult for me to do.
Mr. Ellison.--I'm presently thinking about what we can do
to protect kids from toxic substances like lead.
Mr. Cabrera. Yes.
Mr. Ellison. I'm trying to think creatively on what more we
could do, since it is so detrimental to our children, and I
just thought, as a person in your position, you might have some
thoughts you could share.
Mr. Cabrera. And I would be happy to have those thoughts
with you, if you'd like to meet--
Mr. Ellison. Well, I'm here. Could you share with us now?
Mr. Cabrera. As I said, I can't do that right now. I'd have
to actually think about it first.
Mr. Ellison. Okay. Well, we'll get together on that.
Mr. Cabrera. That would be great.
Mr. Ellison. My next question has to do with the adequacy
of the Section 8 program.
I know that in Minneapolis, where I'm from, you know, we
have long waiting lists.
What are your views on the adequacy of the program to
fulfill the housing needs of people around the country?
Mr. Cabrera. The waiting list issue, we--actually, I had an
earlier question on this.
One of the things we'd like to do is to provide greater
tools to--waiting lists are very static. We'd like to provide
tools that would give the public housing authority the ability
to monitor that waiting list periodically.
So one of the issues that I think we would come up with
there is to get a better idea of who is on the waiting list,
how long, and whether they even qualify for the voucher at
certain points in time.
The second issue on waiting lists has to do with
essentially what each PHA wants.
Waiting lists really are developed according to the local
prerogative of that PHA, so it's largely administered by them.
Mr. Ellison. Do you recommend that we just have more
Section 8 vouchers to sort of reduce these waiting lists?
Mr. Cabrera. No, not in the way that you've just framed the
question, I would not. We are pretty committed to a budget-
based system, because it works.
Mr. Ellison. Yes, but I mean, isn't the real issue housing
people?
Mr. Cabrera. The real issue is running an effective program
using Federal dollars to house as many people as you can within
a budget.
Mr. Ellison. Yes, but the real issue, the reason the
program exists, is because there are people who are without
housing who need it, right?
Mr. Cabrera. I think issues can be framed in a variety of
ways. That would be the way I would frame this issue.
Mr. Ellison. So in terms of me asking you is the number of
Section 8 vouchers adequate to meet the housing needs of poor
Americans, you're just not willing to say yes or no?
Mr. Cabrera. No, actually, I answered earlier, given the
budget that we proposed in 2008, assuming--
Mr. Ellison. But without regard to the budget, without
regard to the budget--
Mr. Cabrera. Oh, just generally?
Mr. Ellison. Yes.
Mr. Cabrera. No, I think it is adequate.
Mr. Ellison. You think it is adequate?
Mr. Cabrera. Yes.
Mr. Ellison. Okay.
Let me ask you this. One of the things about our public
housing in Minneapolis again is that just maintenance, the
ability to maintain and keep the property up.
Have you thought about whether or not the HUD appropriation
to help public housing meets just the physical plant needs of
public housing is adequate?
Chairwoman Waters. The gentleman's time has expired, and I
would like to ask the gentleman if it is okay for him to
respond to you in writing on that last question.
Mr. Ellison. Certainly, Madam Chairwoman.
Chairwoman Waters. Thank you. Certainly, you will do that,
Mr. Assistant Secretary.
Mr. Cabrera. I will be happy to do it, Madam Chairwoman.
Chairwoman Waters. Thank you, very much.
With that, we have completed the first panel.
We would like to thank you, Mr. Cabrera, for being here
today, and we look forward to getting your written testimony
for the record.
Mr. Cabrera. Absolutely. Thank you, Madam Chairwoman, and
members of the committee.
Chairwoman Waters. I will call up the second panel. Thank
you very much.
For our second panel, we have: Mr. Saul Ramirez, executive
director of the National Association of Housing and
Redevelopment Officials; Mr. Curt Hiebert, executive director,
Keene, New Hampshire Authority, on behalf of the Public Housing
Authorities Directors Association; Ms. Suniz Zaterman,
executive director, Council of Large Public Housing
Authorities; Mr. John E. Day, president, DuPage Housing
Authority; and Mr. Richard Godfrey, executive director, Rhode
Island Housing.
Welcome. Let us get a proper introduction for Mr. Day from
our ranking member.
Mrs. Biggert. Thank you, Madam Chairwoman.
I just wanted to welcome Mr. John Day to the committee.
He's traveled to Washington from the windy city, Chicago, and
he is a housing leader in my southwest suburban Congressional
district, and for over 2 decades has helped thousands of my
constituents and thousands of others throughout Illinois secure
safe and affordable housing.
He's the president of the DuPage Housing Authority in the
district and he's served in this capacity since 1995. He's also
executive director of another nearby housing authority, Kendall
County Housing Authority, and he sits on the legislative board
of the Public Housing Authorities Directors Association, PHADA,
where he has served for 2 years.
In addition, he has worked for the Illinois Housing
Development Authority and was involved in the administration of
low income housing tax credit programs, and he is a past
president of the Northern Illinois Council of Housing
Authorities, and NAHRO, the Illinois Chapter.
I'm delighted that he is here today.
Chairwoman Waters. Thank you.
Without objection, your written statements will be made a
part of the record. You will each be recognized for a 5-minute
summary of your testimony.
With that, we will start with Mr. Ramirez for 5 minutes.
STATEMENT OF SAUL N. RAMIREZ, JR., EXECUTIVE DIRECTOR, NATIONAL
ASSOCIATION OF HOUSING AND REDEVELOPMENT OFFICIALS (NAHRO)
Mr. Ramirez. Thank you very much, Madam Chairwoman, Ranking
Member Biggert, and the rest of the members of the committee.
We appreciate the opportunity to be here, and on behalf of
the 22,000 agency and individual members that NAHRO represents,
many of them agencies since 1933, as one of the Nation's oldest
and largest not-for-profits representing officials that operate
and produce affordable housing the redevelopment, it is indeed
our pleasure to be here and speak to these comments.
I will keep my comments even shorter than the 5 minutes to
move the discussion along, to say that we appreciate it being
entered into the record in its entirety.
We're here to express our support for SEVRA.
It does several things that are important for stabilizing a
program that for the last 3 years was thrown into a series of
gyrations that have caused an imbalance of funding amongst
agencies, some getting more than they can spend, others getting
less than they need in order to meet the needs that they have
out there.
We also believe that instituting this 12-month formula as
it was under the House Resolution 20, that it does stabilize
the program further.
At this time, unfortunately, HUD has not put this into
effect yet, and is still funding in many ways under the
current, and the former amounts that were there before. We have
seen as a result of the current funding formula that still has
not transitioned itself to what was authorized by Congress a
loss of over 150,000 vouchers as a result of this imbalance
that was created with this formula.
We also believe that SEVRA, under its--under what's being
proposed does create an adequate way of reallocating resources
for housing agencies. It allows with the reintroduction of
maximized leasing the opportunity for agencies to be able to
meet their demands.
It further addresses the challenges of administering the
program and allows agencies to be able to not just deal with
the day-to-day challenges but also deal with very specific
challenges within their communities, such as the hard to house
and others, that was eliminated through appropriations in prior
years.
It does go forward to creating additional rent simplicity
and allow for household recertifications that are much more
effective for our operations as providers of affordable
housing.
It also creates additional flexibility in housing, and
quality inspections.
And as to the effective date of this law, should it move
forward, we would recommend that if we were able to get this
going and get it through, that it take effect January 1st of
2008 in its entirety.
There are other topics in SEVRA that we have addressed in
our written testimony, such as the additional reforms that HUD
can do now. It's great to hear that they still want to create
additional reforms, but yet to date, 7 years later, many of
them have not been put into effect, which they could have.
We've submitted those for the record as well.
We look forward to getting that done as soon as possible,
to create greater flexibility.
The moving to work program. We appreciate that SEVRA has
addressed it. Our priorities are to take care of those that are
existing now, to make this a permanent legislation through
those that are existing, and work to expand it to create
greater flexibility for those who want to pursue it.
And finally, on public housing reform, we have some
additional recommendations that we've made to help improve
SEVRA that we would hope that the committee would take into
consideration as we move forward, and finally say that our goal
here is not just to maintain the program, but to work on
building the program to allow for additional housing program to
occur in our Nation, one that is sorely lacking, as there are
more people in our Nation now who need housing than ever before
and are not being met by these challenges.
And with that, Madam Chairwoman, again, thank you for
having the National Association of Housing and Redevelopment
Officials here before you, and I will be pleased to answer any
questions you may have for me.
Thank you.
[The prepared statement of Mr. Ramirez can be found on page
107 of the appendix.]
Chairwoman Waters. Thank you, very much.
Mr. Curt, is that Hiebert of Hiebert?
Mr. Hiebert. Yes, it is, Madam Chairwoman.
Chairwoman Waters. Mr. Hiebert, executive director, Keene,
New Hampshire Authority.
STATEMENT OF P. CURTIS HIEBERT, EXECUTIVE DIRECTOR, KEENE, NEW
HAMPSHIRE AUTHORITY, AND VICE PRESIDENT FOR LEGISLATION, THE
PUBLIC HOUSING AUTHORITIES DIRECTORS ASSOCIATION
Mr. Hiebert. Chairwoman Waters, Ranking Member Biggert, and
committee members, my name is Curt Hiebert.
And I congratulate you. It took my wife 6 months to get my
name correct.
I'm executive director of the Keene--
Mr. Shays. Before or after you were married, sir?
[Laughter]
Mr. Hiebert. We were only on a first-name basis before we
were married.
[Laughter]
Mr. Hiebert. I'm executive director of the Keene Housing
Authority in Keene, New Hampshire, and also vice president of
PHADA, which is the Public Housing Authorities Directors
Association, and I'm here to speak on behalf of the PHADA
members.
Our association was founded in 1979 and represents over
1,800 housing authority chief administrative officers.
We're grateful that this subcommittee is interested in
pursuing this bill. It is a wonderful reform initiative that
started during the last Congress and remains a matter that all
of us are interested in.
The draft bill language that PHADA has reviewed reflects
significant improvements over the bill reported last year, and
in general, we support the legislation.
We're especially pleased with the treatment of assets, the
treatment of base housing allowance income, and other
provisions, including the Section 8 inspections provisions, the
simplification of the medical deduction, elimination of imputed
income from assets, and the other things are very attractive
changes.
There are a couple of items which we have some concerns
about and would be glad to work with the committee to seek to
rectify them. One of them is the effect of the rent reforms on
public housing. We did some analysis of figures coming back
from the Office--the Budget Office, and did an analysis and an
estimation that these could potentially cause between $100- to
$200 million loss of revenue to public housing authorities, so
we think this bears some extra scrutiny and would be glad to
work with you on that.
Another thing that we would like to see that was not in the
draft is what was retained in the bill last year, which was the
moving to work, and I would like to echo some of the things
that were said by Mr. Ramirez.
We would like to see the permanence of the program. We
would like to see it expanded. We would like to see an
evaluation portion put into that to be able to analyze some of
the things that have been done very innovatively by some
housing authorities.
I'm speaking on a non-biased basis, having been an MTW
agency since 1999.
But we would like to see this not continue to be such an
exclusive club with just less than 1 percent of the housing
authorities involved with the flexibility that's enabled by
moving to work, but instead increased, and would be glad to
work with you on that language, as well.
We also, PHADA supports the Section 8 provisions that
return the program's funding allocation system to a unit and
cost basis with provisions for modest reserves, allowances that
help agencies recover utilization loss since 2003, and help
agencies absorb local housing market availability.
I'll be glad to answer any questions that you may have, and
again, PHADA is glad to support the efforts of this
subcommittee in working on this bill.
[The prepared statement of Mr. Hiebert can be found on page
98 of the appendix.]
Chairwoman Waters. Thank you, very much.
Now, I must ask Ms. Zaterman, is it Sunia or Sunia?
Ms. Zaterman. It's neither. It's Sunia.
Chairwoman Waters. Sunia.
Ms. Zaterman. Even simpler.
Chairwoman Waters. Ms. Zaterman, executive director of the
Council of Large Public Housing Authorities.
STATEMENT OF SUNIA ZATERMAN, EXECUTIVE DIRECTOR, COUNCIL OF
LARGE PUBLIC HOUSING AUTHORITIES
Ms. Zaterman. Yes. Thank you, Madam Chairwoman, Ranking
Member Biggert, and members of the subcommittee.
My name is Sunia Zaterman, and I'm the executive director
of the Council of Large Public Housing Authorities. We'd like
to thank you for the opportunity to present CLPHA's views on
the SEVRA bill. CLPHA represents 60 of the large public housing
authorities in the country, and on any given day, our members
are serving more than a million households. They manage almost
half of the Nation's public housing stock and administer 30
percent of the Section 8 housing assistance program, and we
estimate there are likely to be another million households
waiting behind those households trying to get in.
We welcome this new Congress and your renewed emphasis on
the central importance of preserving, protecting, and expanding
affordable housing opportunities. Public housing authorities
are facing unprecedented budget and program challenges,
primarily the issue of inadequate resources.
Over the past 6 years, we have lived with the
implementation of Administration policies and funding levels
that are essentially death by a thousand cuts, forcing housing
authorities to struggle to keep their doors open while
continuing to serve community needs.
Despite a very difficult budget and regulatory environment
over the past 6 years, housing authorities such as Boston,
Atlanta, the District of Columbia, and a long list of others,
have utilized tools like Hope VI and the moving to work program
to greatly improve their public housing infrastructure and the
delivery and administration of local housing programs.
We believe SEVRA marks a significant step forward in
simplifying the administration and funding of the Section 8
voucher program. We support the provisions requiring
inspections every 2 years and allowing authorities to rely on
other governmental inspections. We welcome administrative
changes to rent-setting and income determination, making it
easier, without impacting funding levels.
Given that public housing is currently operating at an
historic low of 83 percent of operating need, and the
Administration proposes in their fiscal year 2008 funding to
fund public housing at 80 percent of operating need, we are
very concerned that these rent simplification provisions could
lead to further reductions in operating funds and could have
the unintended effect of serving fewer families.
We appreciate that these concerns have been taken into
account and understand that the bill's costs are significantly
lower than the CBO's estimates from last year.
We remain committed to working with the subcommittee to
realize rent simplification without exacerbating the chronic
underfunding of public housing programs. We are pleased that
the subcommittee has introduced a formula that will be more
accurate by using leasing and cost data from the preceding
calendar year, thereby removing a 2-year lag in funding.
We must move back to a unit-based funding system. The bill
indicates that unspent voucher funds will be recaptured on
December 31, 2007. CLPHA recommends delaying the recapture of
unspent voucher funds until the end of calendar year 2008.
HUD has yet to tell PHA's how much money they will receive
under a new 12-month formula, and PHA's are very concerned
about implementing aggressive lease-up plans without knowing
how much money will be available to cover new voucher
obligations.
A 1-year delay would give PHA's enough time to increase
leasing, spend down fund balances, and align their programs to
the new formula, and ultimately serve more low income families.
CLPHA strongly endorses the subcommittee's inclusion of a
1-month reserve for the first year of the formula. An adequate
and stable reserve allows housing authorities to mitigate and
protect against funding risks in a program that is driven by a
number of market factors completely outside the control of the
PHA.
We strongly encourage the subcommittee to allow PHA's to
maintain a 1-month reserve during each year of the program. For
a program of this size and scale, a 1-week reserve is simply
too small. While the bill does not yet include--the revised
bill does not yet include a moving to work section, we are
hopeful that the final version of the bill will include a
provision to permanently authorize and expand the program.
MTW is our laboratory for innovation, and more PHA's should
have access to these tools. A review of the current MTW sites
shows that they have raised the standard of housing services,
used program flexibility to create jobs, added affordable
housing stock, served more households, and helped families
build savings.
They have also shown that they can operate and manage in a
way that's accountable without needless and time-consuming HUD
bureaucratic measures that add costs but add no value.
The concerns about tenant protections, targeting and
rigorous evaluation, should be addressed in the MTW provision.
That is why we have submitted suggested language to address
these concerns.
Thank you very much for the opportunity to testify and we
look forward to your questions.
[The prepared statement of Ms. Zaterman can be found on
page 155 of the appendix.]
Chairwoman Waters. Thank you, very much.
Mr. John E. Day.
STATEMENT OF JOHN E. DAY, PRESIDENT, DuPAGE HOUSING AUTHORITY
AND EXECUTIVE DIRECTOR, KENDALL HOUSING AUTHORITY
Mr. Day. Chairwoman Waters, Ranking Member Biggert, and
members of the committee, I would like to thank you for this
opportunity to address you today.
And thank you, Mrs. Biggert, for the wonderful introduction
you gave me.
My name is John Day. I'm president of the DuPage Housing
Authority, the DHA, and also the executive director of the
Kendall Housing Authority, the KHA. Both of these are suburban
Chicago countywide housing authorities which administer only a
housing choice voucher program.
Currently, due to portability, the DHA is administering
about 2,900 vouchers while Kendall is at 200. The authorized
cap for DuPage is 2,571 and 160 for the KHA.
Among various programs that we participate in are family
self-sufficiency, homeownership, development and preservation
of affordable housing, and an employment program through a
business incubator in our offices.
Overall, the proposed legislation has many positive items
for a PHA and I support its passage.
There are a few areas I would like to discuss further.
In terms of operations, there are some very positive things
with respect to inspections, being able to pay for units that
had failures of non-life-threatening reasons will allow a PHA
greater flexibility in helping to minimize the disruption of
voucher holders' lives. Some even end up having to rent two
units while the repairs are being performed, and only one unit
can be subsidized at a time.
This last year, the DHA performed nearly 4,500 inspections.
1,146 of those failed due to non-life-threatening violations.
242 of those were new move-ins whose lives were disrupted. This
can also be used as a tool to recruit new landlords.
As for biennial inspections, last year 65 percent of the
DuPage Housing Authority units passed on their first time. Our
inspection staff knows who the good landlords are and who are
the ones who need more work.
There's also a check and balance with respect to
administrative reviews on this, so I believe this is very
helpful.
As for income reviews, last year interim recertifications
was a substantial part of what we had to do. We did over 2,000,
almost half of our total income reviews. The majority of these
were for reductions. This will significantly reduce the
paperwork that is involved that we have to deal with.
About 42 percent of our households are on a fixed income.
The vast majority are either elderly or disabled.
By having reviews of their income once every 3 years, the
net result will be reduction of administrative
responsibilities, about a 14 percent saving in staff, overall
staff time.
I keep mentioning administrative relief to PHA's. There is
concern in the public housing industry, in talking to others in
the field, that if you reduce some of the efforts we have to
make, there's the possibility there will be a reduction in fees
to follow.
I would say that if we free up staff time, as I hope this
legislation will, it will allow us to do other efforts and
initiatives that we wish to do, those being working more on
portability and also increasing our outreach to landlords.
The DHA is one of those housing authorities that will lose
money because of the continuing resolution. We have unspent
balances which we would like to do. However, before we can do
this, we need to know that we can go over our cap. We have
people on a waiting list, we're pulling names off a waiting
list constantly. We want to use our funds up, but the question
is, can we go over that cap?
The last item I'd like to talk about is portability.
Mrs. Biggert will join me in saying DuPage County is a
desirable place to live. Since 2003, we've had people port into
DuPage County with their vouchers from 38 other States and from
30 other housing authorities within Illinois. Just last year,
we had 509 total ports into DuPage County, while we had 188
porting outs.
To put it in perspective, about one out of every five
voucher users in DuPage and Kendall Counties are ports from
another county.
Now, as I understand, there's a proposed amendment which
would require absorbing all incoming portable vouchers. The
problem we have with this is, because, as you can see from the
large number of ports in we have, we would never pull anyone
from our waiting list, and I don't think that's fair to the
residents of DuPage County, just continuing having the ports.
Now, if a PHA absorbs incoming portable vouchers and
receives funding for those new voucher holders in next year's
allocation, I think this solution, or this problem would be
overcome.
In closing, I ask for your consideration of one additional
item.
When the legislation is approved, and I'm optimistic about
that, please leave the program alone for 3 years so PHA's can
truly make it work. I am confident you will be pleased with the
results.
I would also like to extend my appreciation to Arthur
Donner, who is sitting behind me, the chairman of the DuPage
Housing Authority Board of Commissioners, for joining me today.
Thank you again for this opportunity, and I'll be glad to
address any questions.
[The prepared statement of Mr. Day can be found on page 86
of the appendix.]
Chairwoman Waters. Thank you, very much.
Mr. Richard Godfrey, Rhode Island Housing.
STATEMENT OF RICHARD GODFREY, EXECUTIVE DIRECTOR, RHODE ISLAND
HOUSING, ON BEHALF OF THE NATIONAL COUNCIL OF STATE HOUSING
AGENCIES
Mr. Godfrey. Thank you, Madam Chairwoman, and Ranking
Member Biggert.
I also want to thank you, Madam Chairwoman, for joining
NCSHA at our town hall meeting earlier this week to talk about
housing issues, and also for meeting with my counterpart from
California, Terry Parker, and our executive director, Barbara
Thompson, so that we can explore housing reform going forward.
I also had the opportunity this week to speak to my two
Congressmen, Congressman Kennedy and Congressman Langevin, and
they are extremely supportive of the efforts that you are
taking and the direction of this bill.
I also yesterday spoke with the heads of our two largest
public housing authorities, Providence and Newport, and they
are very supportive of the direction of this bill.
I have submitted detailed testimony that addresses the
direction of the Act, but I do want to address a couple of
questions which were raised today by various Congressmen.
And with all due respect to my good friend, Orlando
Cabrera, I can tell you that there are not enough vouchers in
America today, and going to a budget based formula instead of a
unit based formula has reduced the number of vouchers in Rhode
Island by 20 percent over the past 2 years.
There have also been some questions raised about the
validity of waiting lists. Well, we opened our waiting list 3
years ago, and the last time we did that was 10 years ago, and
10 years ago people camped out for 5 nights just to get on the
waiting list for a voucher.
Three years ago, we thought we had a better system. We had
an open application period and then we moved to a stratified
lottery where we pre-screened the residents and then drew a
lottery, so our least fortunate wouldn't have to get in line.
Notwithstanding that new system, people camped out again,
because they were so desperate for a unit. And when all was
said and done, people who applied are having to wait 10 years
for a voucher.
And I spoke to the people who were on line, and there were
young women with children, there were grandparents, and it's
very hard to tell them, ``You know, you need housing today, but
the earliest I can get to you is 10 years from now.''
And unfortunately, immediately after we went through that
waiting list system, you went to a budget based formula. That
budget based formula pushed that waiting list from 10 years to
15 years.
So the people I took onto the list in 2005 are going to
have to wait until 2019 before they can get a housing unit.
Those women with children, those children will be grown, and
those grandmothers will not likely be with us anymore.
We then talk about moving to work. Well, you need a place
to move to. In Rhode Island, we have people who are living in
shelters and going to work. The average wage earner in Rhode
Island earns $10 an hour. If you work 40 hours a week at $10 an
hour, you would have to pay 60 percent of your income for the
average rent in Rhode Island.
HUD's formula, they call it fair market, but it is neither
fair nor market. We need flexibility, but for too long,
flexibility has meant there's nothing left to cut, and we can't
have that anymore.
We need flexibility, but we also have to have new programs,
new programs to have an affordably housed America, so that when
I walk the waiting lines and I talk to people, I don't have to
say, ``Gee, I'd love to help you, but it has to be 2019.''
Madam Chairwoman, I want to thank you and I want to thank
Chairman Frank for moving so quickly in bringing a new vitality
and hope to housing in America.
For too long, we have been on the defensive, and we've had
cuts and hurtful regulations.
But in speaking to my delegation this week and in speaking
to my counterparts across the country, there is a new hope.
It's been a long, cold winter in Washington, and I'm not
just referring to the weather. There is a warm breeze coming. I
hope it blooms into housing for all Americans.
Thank you, very much.
[The prepared statement of Mr. Godfrey can be found on page
92 of the appendix.]
Chairwoman Waters. Thank you very, very much.
I will yield to myself 5 minutes for questioning.
Let me just say to all of the panelists, I was talking with
some of the staff back here about unit base versus what you
guys are all complaining about, and I'm going to pay special
attention.
They tell me we have something of a hybrid that is being
proposed in the bill.
Everybody is shaking their heads like, ``Well, tell me
about this hybrid that I don't really, really understand at
this point,'' that I'm going to pay very special attention to.
Let me start with Mr. Ramirez.
Mr. Ramirez. In brief, the formula that's being proposed in
SEVRA goes a long way to rectifying a simply dollar based
program where you're really capped at a dollar amount and
unable to reach the number of families that you could with
those dollars.
And again, the current distribution formula has shown to
prove, or the one that was in effect for the last year has
shown to prove to be very ineffective and creating a
substantial imbalance.
SEVRA goes a long way to recalibrating and establishing
with this 12-month view a fair distribution of those dollars,
still sensitive to the budget, but recognizing that we're
trying to reach more families to serve.
Chairwoman Waters. But am I to understand that's not good
enough?
Mr. Ramirez. Well, certainly it does not go as far as the
legislation prior to it being amended several years ago, which
was a completely unit based system that allowed for full
funding on those bases, but it does go a long way to bringing
some stability and also maintaining some rigor on the funding
side.
Chairwoman Waters. Thank you.
Ms. Zaterman.
Ms. Zaterman. I just want to add, prior to 2004, when we
moved to what was essentially a snapshot formula, housing
authorities had a contract with HUD. It identified how many
vouchers they had.
And they understood that within the fair market rent and
payment standard constraints, that every one of those vouchers
would be funded, and at that time, housing authorities were
utilizing 97 percent of those vouchers, meaning 97 percent of
that allocation was out on the street being used by housing
authorities and households who were eligible.
Currently, we have an average of 90 percent utilization.
In 2004, Congress said, ``You have a snapshot. We're going
to look at a 3-month period of what you were leasing in this 3-
month period and your funding is based on that amount.
``Regardless of who's on your waiting list and what you
need in your community, you are only going to get this amount
of money. You decide how many households you are going to
serve.''
What this does is move us back to more accurate leasing
data instead of a very isolated short period of time, but it
does not get us all the way back to a unit based system that
says the Federal Government has said, ``You can serve X number
of households in your communities and we will provide the
funding in order to do that,'' and that is really our goal.
Chairwoman Waters. Got it. All right.
Mr. Godfrey, it has been implied that your waiting lists
may not be really what you think they are, that there are
people on the waiting lists, names that you have, who are
perhaps not eligible, you need more income verification,
perhaps they have dropped off, and they don't require your
assistance anymore.
How good are your waiting lists?
Mr. Godfrey. How good can a waiting list be if it's 7 years
old? And that's part of the problem.
When we talk about years on the waiting list, that takes
into account all of the checking that comes down the line.
In fact, that actually understates the length of time,
because as a person moves to the top of that waiting list, we
start the screening early for eligibility, so that means we
sift off those who are no longer income-eligible.
But what the 10-year waiting list means, or the 15-year
waiting list means is, if you're on the bottom of that list,
it's going to take you 10 years to find an apartment.
So yes, there are a lot of people on there who, when the
time comes, may or may not have been qualified 7 years ago, but
it takes 10 years to get from the bottom of the list to even
being considered for an apartment, and then the tragedy is,
because of the FMR's in Rhode Island, it takes that person 6 to
9 months, and we've been having people turn them back because
they can't find a landlord who will take the voucher at the
FMR. It's just too low.
Chairwoman Waters. Thank you, very much.
Ms. Biggert.
Mrs. Biggert. Thank you, Madam Chairwoman.
Mr. Day, what would it mean if you, with the HUD budget
calling for removing the voucher cap so that the unspent
balances can be used for the vouchers that you have above the
cap, but right now, we have the CR, which is really going to
take away that pool of money that you have reserved for those
people that are capped so that you can't give them out?
Mr. Day. Yes. I'm sorry, the--
Mrs. Biggert. Could you explain how this policy, number
one, without removing the cap, will help you better anticipate
costs and improve services, but also what does it mean with the
CR now that has said that that money has to be returned?
Mr. Day. The CR calls for us to return approximately
$950,000. That's equating to between 100 and 110 vouchers less
we will be able to help people
We won't necessarily have to put people out in the street,
but what it means is it's going to be longer for people coming
off of our waiting list because we don't have that pool of
funds.
Mrs. Biggert. How many people do you have on the waiting
list?
Mr. Day. Right now, approximately 1,100, but we have not
taken names on our waiting list since 2002.
Mrs. Biggert. 2002?
Mr. Day. Yes.
Mrs. Biggert. So that means that those people that you
could serve if the cap were limited right now, you would be
able to give them the vouchers, but you can't do that, and then
the pool of money will be gone.
How long would it then take you to get back a reserve to be
able to--or you'd have to increase your numbers then to get the
funding for 2008?
Mr. Day. My estimation is close to a year.
We have a turnover in our program of approximately 1
percent a month. In addition, something I'll add, something I
was notified of yesterday, and it was not discussed earlier, on
absorption of portability.
I was notified yesterday that a neighboring housing
authority absorbed 78 of our ports. We now have to make up
those numbers, also, and I have to do that, in our position,
also losing additional money, so I'm kind of getting it from
both sides.
Mrs. Biggert. Okay.
How about the moving to work housing, would you like to be
included in that?
Mr. Day. I'd like to be the first person in line. Thank
you.
Mrs. Biggert. Okay.
And why aren't you now? Is it because it's a smaller public
housing, or just that there were so many, just so many housing
authorities that could be in it?
Mr. Day. Initially, and Mr. Hiebert can better answer that,
because he is one, I believe it was in 1998 or 1997, that HUD
offered this as a demonstration program. We did not make
application at that time.
I've watched it since then. I've been very impressed with a
lot of the results and abilities to help eliminate a lot of the
obstacles in helping to provide quality services to our
clients.
Mrs. Biggert. Okay.
Maybe, Mr. Hiebert, you could tell me a little bit more
about that.
Mr. Hiebert. Yes, thank you.
It was originally authorized in a bill in 1996, the
Secretary was authorized to engage up to 30 housing
authorities. I believe two were added since that point and a
couple have left and done different programs.
But there have been slots available right now that aren't
being used, but we would like to see more of them added.
Some of the things that have happened, for instance, just
quickly, since 1999, in 1999, 47 percent of the families in my
family housing were working full-time. Now 65 percent are.
Income has increased by almost 30 percent in our families
because we have policies that don't discourage it.
We consistently have right around 105 to 108 percent
utilization of Section 8 because of the flexibility allowed.
I'm not saying that to promote the policies of Keene
Housing Authority, but what I'm promoting is the fact that we
were able to recognize our local conditions, our local
demographics, our own waiting list, our own employment
situation, and everything about our community. Other
communities should have that ability, as well.
Mrs. Biggert. What would happen if you leased up over your
cap?
Mr. Hiebert. We would serve more people and that would be
the only consequence.
Mrs. Biggert. Mr. Day?
Mr. Day. If you keep the cap in place and I lease up above
that, I have to pay for that out of our administrative fees.
Mrs. Biggert. Okay. Thank you.
I yield back.
Chairwoman Waters. Thank you, very much.
Let's see. Who do we have next here?
Mr. Cleaver.
Mr. Cleaver. Thank you, Madam Chairwoman.
Mr. Ramirez and I have worked together over the years. It's
good to see you.
Mr. Ramirez. Good to see you, too, sir.
Mr. Cleaver. Frankly, you answered all the questions that I
asked the under secretary a few minutes ago, so I appreciate it
very much.
The only remaining issue for me is the issue of scattered
site housing with the Section 8 vouchers.
Do any of you have any recommendations on how we solve the
problem of having vouchers actually only allow us to move into
the poorest neighborhoods and then the demands from the public
is, you know, ``It's okay, we don't mind having Section 8 in
our community, but we want them scattered out.''
And you can't scatter them because the vouchers won't allow
you to move into property outside of the lowest income, the
lowest property area of a community.
Mr. Hiebert. I have a brief answer to that one, and it's
under the moving to work flexibility.
Our contract is directly with our participants, and not
with the landlords. They are allowed to choose where they want
to go. There aren't restrictions on the units that they may
choose.
And if they want to be closer to where they work or where
their kids go to school, they have the ability to do that and
the freedom to do that under our program.
Mr. Cleaver. But do you have--Mr. Ramirez.
Mr. Ramirez. I would go one step further in the interim,
and that is that it's a matter of dedicated resources, in
trying to reach as many people that are served.
Currently, the vouchers can only go so far within the
community, and as you move into other parts of the community
that cost more to rent, that the subsidy cannot go deep enough
to be able to house--
Mr. Cleaver. Yes.
Mr. Ramirez.--families that can be served there.
So it's, one, a question of resources, and two, I've seen
many an agency around the country through our membership really
get quite aggressive in trying to attract landlords throughout
the entire community, and as a result, it has produced some
fruit, but it's really a question of resources and having a
community make the difficult choice of do we serve more in
pockets of the community that can house more or do we serve
fewer and spread those families throughout?
So it does come down to resources being--
Mr. Cleaver. Resources.
Mr. Ramirez. Yes, sir.
Mr. Cleaver. Thank you.
I yield back the balance of my time.
Chairwoman Waters. Thank you, very much.
Mr. Shays.
Mr. Shays. Thank you, Madam Chairwoman.
I'm wrestling with the fact that as I listen to people
being on the waiting list for 5, 10, or 15 years, it sounds
more like they're trying to join a golf course or get a boating
dock space.
If they're so desperate to be in housing now, describe to
me where they're living, and am I to assume that after 5 or 10
years, they still qualify for public housing?
Mr. Godfrey. You can't say one thing over another.
Many of the people are living in overcrowded conditions or
substandard conditions. We have people who are working full-
time, and living in homeless shelters.
So there are a lot of conditions that people are living in
that are not suitable.
Or they could be paying 60, 70, or 80 percent of their
income for rent, which is more often the case. They're paying
an extremely high amount.
And over the course of the waiting list, there are many
people who do move off, who no longer qualify, who have a more
stable situation.
But there are others, especially the elderly or the
disabled, or the homeless veteran, whose opportunity for
increasing their income does not come along, so they remain on
the list forever, because their income is relatively static and
will be for the foreseeable future.
Mr. Shays. The Administration has continually tried to get
rid of Hope VI grants because they say people aren't using
them, and they've actually been a Godsend in more expensive
parts of the country, because frankly, you can attract all
income levels, and you can rebuild an area.
And I literally have young men and young kids who live in
housing facilities that--I used UBS employees, but these kids
literally have at these housing units a pool, a workout room,
and if they go to the workout room, they're not listening to
young men and women talk about drug deals. They're talking
about how they made money in some deal that was legal.
And what I wrestle with is that when we decided to go to
vouchers, we lost ownership, and so we just see as inflation
goes up, and so big surprise, that half of HUD's budget are
Section 8 vouchers.
So what is--isn't there logic in getting housing
authorities to own, in essence, so many units at a commercial
site, and we buy into it, and then when one unit clears, maybe
a rental person goes in, and then next time a rental person
leaves, it's someone under public housing.
Wouldn't that be a better formula than what we have now?
Mr. Ramirez. May I?
Mr. Shays. Sure.
Mr. Ramirez. Quickly on two points.
One, there's a constant misperception that's being promoted
by some that this program has eaten up the HUD budget and that
somehow it's spiraling out of control in cost.
And I would be glad to submit the GAO report that was put
out recently that shows that year after year, adjusting for
inflation, the Section 8 program has only grown by 4 percent.
And so--
Mr. Shays. That's counterintuitive to me.
I mean, adjusted for inflation, my units in Stamford could
go up 10 percent. That's inflation.
Mr. Ramirez. And the market, under the Section 8 program,
would reflect that your increases in rent may have gone up 10
percent, but in Laredo, Texas, they went down 20 percent, and
so it adjusts for the markets throughout the Nation.
Mr. Shays. Well, what happens is, we get less units. That's
the bottom line.
Mr. Ramirez. Well--
Mr. Shays. I'm just making the point, though. So you made a
point, and I accept, and I'll look into it.
Mr. Ramirez. We'll submit it for the record, if you'd like.
Mr. Shays. But I get to this issue of by not owning, we are
like the person who is a renter all their life. They don't
enjoy the--shouldn't the taxpayer enjoy being--you get my
point.
Ms. Zaterman. If I could just--
Mr. Ramirez. On the Hope VI, I'll let Ms. Zaterman speak to
the Hope VI.
Ms. Zaterman. Thank you.
I think the point that you're raising is very critical. We
need to move back to a balanced housing policy that addresses
both the demand and the supply side.
And we've invested a great deal in the voucher program.
It's a very successful program that addresses affordability,
but it also has to be responsive to an inflated market.
When we own units, we can control costs, and now we are at
a point, the average unit cost for public housing is
significantly less than it is to pay for a voucher.
And so we would like to see, partly because we've had
significant cuts, but it also is a way to control costs and
control the property, and I think it's very important that we
look both through Hope VI, through perhaps targeted tax credit
programs for public housing, and through the moving to work,
where we can actually produce additional units, where we can
control those costs over time.
Mr. Shays. Thank you.
Chairwoman Waters. The gentleman's time has expired.
Mr. Clay.
Mr. Clay. Thank you, Madam Chairwoman.
In reading testimony, I noticed a difference of opinion on
the moving to work program, and Ms. Zaterman favors inclusion
of the moving to work program in the legislation.
Can you make the case for MTW?
Ms. Zaterman. Well, I can make the case. I can go back to
1998 when the Public Housing Reform Bill was passed and there
was a bipartisan consensus that public housing had been saddled
with unreasonable and burdensome regulations that did not add
value.
The whole moving to work notion is to say, in a local
market, I have to live in my local market, I have to be
responsive to my customers, my residents, and my local elected
officials, and let me have a plan that responds to that.
If I have too much public housing and not enough vouchers,
I can fix the mix. If I need more supply and I need less
vouchers, less tenant base, I can fix the mix. If I have a hot
employment market, I can target training dollars. If I have a
slow employment market, I can target dollars to provide self-
sufficiency. If I have a big senior population, I can provide
supportive services.
Today, I can only spend my dollar the way HUD tells me I
can do it, in a very prescribed, and often not very responsive,
way.
I believe--I know there's concern about the program. I
believe there is a way to balance those concerns by having
tenant protections, by keeping targeting provisions to ensure
that very low income households are served, and that housing
authorities are accountable, both to their residents and to
their local community, and still provide the flexibility that
they need to operate within their local markets.
Mr. Clay. So in actuality, the working relationship is not
really there between HUD and the housing authority, nor is the
flexibility to allow a fluid program?
Ms. Zaterman. I couldn't agree more.
Mr. Clay. Yes, Mr. Ramirez.
Mr. Ramirez. I would just add that on the flexibility side,
that we had the assistant secretary earlier talk a great deal
about creating flexibility and pushing for flexibility.
There are things regulatorily that HUD can do now that they
could have done 7 years ago to relieve that burden and create
greater flexibility, and allow agencies to do more to serve low
income families, seniors, and disabled in our Nation, and that
has not happened to date, to the level that it's talked about.
And the words are much more rhetorical than the actions
that come out of those words.
Mr. Clay. So the words sound good, but in actuality, they
don't apply?
Mr. Ramirez. That is--
Mr. Clay. Thank you. Thank you for that response.
I represent, as I stated earlier, the City of St. Louis,
and on any given day in our public schools, about 20 percent of
the student population happens to be homeless.
Do we, through the voucher program and the long waiting
lists, do we contribute to that homelessness, and what do your
agencies do when it comes across your desk, when you see that?
Perhaps we can start with Mr. Godfrey.
Mr. Godfrey. You're absolutely right. We have children who
live in the shelters and they are on our waiting list, but they
go to school every day from the shelter.
One of the items which would help turn the voucher into a
production program is to allow greater flexibility in terms of
the project-basing.
That way, we can work with our housing authorities to build
more units, and bring all of the resources together, whether
they're tax credits, or HOMF, and build new units.
And we have housing authorities, Providence Housing and
Newport Housing Authority, who are willing to work with us, but
as soon as they set aside project based units, it counts
against them in their SEMAP score, and they lost those units.
So they can't participate in linking those units to
production and to production of units which may provide the
direct services that people need or in areas that are not
deeply concentrated pockets of poverty.
If we're going to increase housing opportunities in the
suburbs, then we need to be able to offer production so that we
can have affordable housing there.
And so the flexibility to not count project based units
against you would help a lot.
Mr. Clay. Along those same lines, and perhaps you can take
us there, Mr. Ramirez, or anyone else on the panel, has the
replacement of units on a one-to-one basis kept abreast with
the new development as it replaces public housing units, and
Section 8 voucher units?
Mr. Godfrey. I am pleased to say that in our Hope VI
development--we have one Hope VI development in Newport, and as
a State requirement, we required one for one, which was not an
easy task to accomplish, but working with HUD, working with the
local authority, we did it. We agreed to it up front.
And so far, we have replaced 400 units out of the 500 units
of public housing in this development, and we're very proud of
that record.
Chairwoman Waters. The gentleman's time has expired.
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.
I would like to thank you all for coming today, for
spending your time helping to educate us about what really goes
on in the real world, so that we can incorporate that into our
thinking and, thus, legislation.
Thank you, very much.
I will now call on the third panel.
This panel consists of: Ms. Sheila Crowley, president,
National Low Income Housing Coalition; Ms. Barbara Sard,
director of housing policy, Center on Budget and Policy
Priorities; Ms. Janet Charlton, president, Triton Advisors, on
behalf of National Leased Housing Association and National
Multihousing Council; Mr. Andrew Sperling, director of
government relations, National Association for the Mentally Ill
Consortium of Citizens with Disabilities; and Mr. Phil Tegeler,
executive director of the Poverty and Race Research Action
Council.
Welcome.
Thank you, very much.
Without objection, all members' opening statements will be
made a part of the record.
Let us begin with Ms. Crowley.
STATEMENT OF SHEILA CROWLEY, PRESIDENT, THE NATIONAL LOW INCOME
HOUSING COALITION
Ms. Crowley. Thank you very much, Madam Chairwoman, Ranking
Member Biggert, and members of the subcommittee, for the
opportunity to testify today about your legislation to
stabilize and strengthen the housing choice voucher program.
Let me begin by expressing our sincere appreciation to you
and the members of your staff who have done a really terrific
job of drafting sound legislation for this Congress, the bills
on the bipartisan legislation, H.R. 5443, introduced in the
last Congress, as well as the considerable work done over the
last 2 years by most of us testifying here today and many
others who have been wanting to protect and improve the voucher
program.
The thoughtful process in which you have developed this
legislation has produced a very good result, which will restore
the credibility and the predictability of the program.
And restoring the credibility and predictability of the
program is essential to getting to the solutions that have
been--to the questions that have been raised by many members of
the committee today, which is, what do we do about all the
people on the waiting lists?
We have to get the voucher program back to a state of good
functioning so that we can in fact begin to argue for
increasing vouchers, and that's the fundamental question. How
do we grow the program as opposed to reduce it, which has been
the effect of these policies over the last several years.
Just a quick thing about the scope of need.
Seventy-one percent of all extremely low income households
in the United States pay more than half of their income for
their rent. Those are households with incomes up to $16,860 in
Los Angeles and up to $21,720 in DuPage County.
These are people who are elderly, disabled, on fixed
incomes, and people in the low wage workforce; 71 percent pay
more than half of their income for their housing.
Those are the people on the waiting list. That's why
they're on the waiting list, because they cannot continue to
sustain that kind of cost for their housing.
Among the many positive attributes of this bill are that it
corrects the funding crisis that was created by HUD's snapshot
formula. It simplifies the process for determining rent for
each resident while incentivizing work and protecting elderly
and disabled people with high housing costs. It streamlines the
inspection process for owners who operate good properties.
It maintains the housing choice voucher program's income
targeting to serve those with the most serious needs while
adapting that to meet the needs of poor and rural communities.
It assures that all units of public housing that are lost
to demolition or opt out are replaced by vouchers, not just
those units that happened to be occupied at the time that they
were closed.
It provides for recapture of unused voucher funds so that
agencies that can use them are able to use them, and that we
can work on the mobility and family self-sufficiency objectives
of the program.
It helps tenants with good rent payments establish
themselves as good credit risks.
And it facilitates greater use of the project based
vouchers to support production of new rental housing.
A major improvement of the proposed legislation is that it
does not include the moving to work program. We strongly urge
that you not include that as you go forward.
Our friends in the public housing industry feel very
strongly, and quite genuinely, that they need the deregulation
from expanded moving to work in order to survive.
If you've been paying the slightest bit of attention, you
know that public housing as an institution has been under
serious assault in the last 6 years.
Systematic reduction of public housing funding streams has
left many public housing agencies depleted and unable to
maintain basic services and do even routine maintenance. This
is unacceptable.
The National Low Income Housing Coalition stands side by
side with our public housing partners to demand restoration of
sufficient funds for them to be able to do their jobs.
However, we see expanding moving to work to other public
housing agencies as an off-target response to the real problem
of Federal disinvestment in public housing.
Moving to work is a demonstration program. We do not
quarrel with promoting innovation and we think that should
happen, nor do we doubt that some moving to work sites have
shown very good results.
What we object to is the complete failure of HUD to do what
the legislation intended. That is, to evaluate the experiments
that moving to work PHA's have undertaken. In the absence of
evidence of effectiveness, how can Congress consider expanding
it?
At the very least, we urge the committee to hold a hearing
specifically on moving to work, hear from PHA directors and
tenants, from local officials and local housing advocates, from
the HUD inspector general, who has lots of things to say about
moving to work, and the researchers who have tried to assess
its effectiveness.
Form your own impressions of this program before
considering expanding it.
We oppose any expansion of moving to work until current
programs are properly evaluated and lessons learned are
incorporated into the expansion program.
We look forward to working with this committee as you
develop this bill for introduction, and support your efforts in
getting it through the House and Senate.
Thank you.
[The prepared statement of Ms. Crowley can be found on page
80 of the appendix.]
Chairwoman Waters. Thank you.
Ms. Barbara Sard.
STATEMENT OF BARBARA SARD, DIRECTOR OF HOUSING POLICY, CENTER
ON BUDGET AND POLICY PRIORITIES
Ms. Sard. Thank you, Madam Chairwoman, and Ranking Member
Biggert, for holding this very important hearing.
My name is Barbara Sard, and I am director of housing
policy at the Center on Budget and Policy Priorities.
Thank you very much for holding this very important hearing
on this extremely positive bill that will do a great deal to
respond to and fix the problems that have occurred in the last
several years, and many that had been in the program before
that.
What I would like to briefly address is some of the
questions that have arisen concerning the voucher funding
formula, briefly on rents, and then highlight some additional
changes that we hope you will include in the bill when it is
filed.
You have heard a great deal already today about the real
effects of the funding formula that was in use in the last 3
years. I think we're now in the position where we have to move
off of theory and look at what has occurred and how do we fix
the problems:
150,000 vouchers lost, $1.4 billion in unspent funds
accumulated in the last 2 years, and our analysis shows that
only one-third of that money is in reserve because it could not
be spent, because of the authorized cap issue. Two-thirds was
not spent and could have been.
Why wasn't it spent? That's the big question. And the
answer is that what has occurred in the last 3 years was a
system without the right incentives. It was an inefficient
distribution of money in which agencies got the same amount
regardless of how they performed. That isn't the way we ought
to run a government program.
The policy in SEVRA is comprehensive, it is multi-faceted,
and it is balanced to get at the efficient distribution of
money and the right incentives to control costs, while at the
same time responding to some of the needs that have been
expressed on the committee, that in areas of the country where
costs grow faster, you have to meet that need or you shrink the
number of vouchers, as Mr. Shays said, where you have
concentrations of vouchers and you want to expand where they
can be used, as Mr. Cleaver was mentioning. Those problems are
addressed by the formula in SEVRA.
There are a couple of issues that the members have raised
that I think are important to look at more closely.
In the 2007 funding resolution, it is true, as you said,
Representative Biggert, that about half of the agencies get
less than they would have under the old formula, but there's
the other half that get more, and that's always the case if we
don't have more money to spend.
And if you look at the fairness of the situation, the
agencies that got less this year are those that have large,
often very large reserves, and in every case that we have
looked at, the reserves far exceed--far, far, far exceeded,
like four times--the difference in funding, whereas the
agencies that got more money are those that have been cut each
year and were facing having to cut another 13,000 vouchers, if
the formula hadn't been changed.
But the important thing is that changing the formula is
only a piece of what needs to be done. This committee really
needs to make the voucher funding formula part of the permanent
authorizing statute, and to do it in a balanced way that
considers issues over time.
There are a few issues that you've raised that I'd like to
respond to.
One is this question of should the formula be re-
benchmarked annually, or every 2 years, or every 3 years?
And there's no magic answer to this. What I want to
emphasize is the interrelationship between the answer to that
question and other features of the policy.
If you do not re-benchmark annually, that means you're
going to fall behind what is really needed to pay for the
vouchers in use.
And Mr. Cabrera actually told you why that's the case, and
the answer is that the inflation factors that HUD uses are 2
years out of date.
So if you wait 2 years, you're inflating on out of date
data, and the inflation factors only look at rent costs in the
market, they don't look at tenant incomes.
So if you've had a change in a community because a factory
closes and you re-benchmark only every 2 years, you are doing
nothing to make up for that agency's added need for funding.
Well, you could do that if you wanted to, but then the
agency had better have a substantial reserve, or it is going to
have to cut at exactly the time it needs more money.
And one of the things that SEVRA does in a constrained
fiscal environment is avoid the old policy of having to spend
extra money to fund reserves.
It creates a mechanism where the agencies that need the
most money get it through a recycling process. That is the
cost-efficient way to do it.
And on the authorized cap issue, we are fully supportive of
agencies being able to serve as many needy people on the
waiting list as they can.
The hard question is what does exceeding the authorized cap
in one community do to another community? So maybe we can--
Chairwoman Waters. Unfortunately, we are going to have to
go to the Floor. There is a vote going on.
We have about 5 minutes to get up to the Floor, and I
understand it is a series of votes, and it's going to take us
anywhere from 30 to 45 minutes to get back.
I would like to say to you that if you need to take a
break, this would be the time to do it.
We would hope that those of you, certainly, who have not
testified, would stay.
We would hope that those of you who have would stay so that
we could ask some questions.
I will return. At least several of us will return to
complete the hearing with you.
It's unfortunate, but that is just the way it works.
So thank you, very much.
[Recess]
Chairwoman Waters. I would like to thank all of our
witnesses for their patience.
Unfortunately, we got into trouble on the Floor, and it
took much longer than we thought that it would take, but I do
appreciate your remaining here for this length of time.
I think that, where were we? We were moving to Ms.
Charlton.
You had completed your testimony, right, Ms. Sard?
Ms. Sard. Yes.
[The prepared statement of Ms. Sard can be found on page
127 of the appendix.]
Chairwoman Waters. So next we will have Ms. Janet Charlton,
president, Triton Advisors, on behalf of the National Leased
Housing Association.
STATEMENT OF JANET S. CHARLTON, PRESIDENT, TRITON ADVISORS,
INC., ON BEHALF OF THE NATIONAL LEASED HOUSING ASSOCIATION, THE
NATIONAL APARTMENT ASSOCIATION, AND THE NATIONAL MULTIHOUSING
COUNCIL
Ms. Charlton. Thank you, Chairwoman Waters.
My name is Janet Charlton, and I'm president of Triton
Advisors, based in Rockville, Maryland, and I'm here today on
behalf of three trade associations: The National Leased Housing
Association; the National Multihousing Council; and the
National Apartment Association.
These groups represent the Nation's leading players in
today's market rate and government assisted apartment industry.
Due to the timing, I think I will totally digress from our
prepared testimony. Obviously, since the members of the
committee have copies of that, I hope that if there are any
questions pertaining to anything that's in the written
testimony, that you would contact us.
And what I would like to do, basically, is focus on two
comments that I've heard made today.
Most of the day we've heard comments that, indeed, the
waiting lists for the Section 8 Voucher Program are
intolerable.
And we've also heard that, and I've been in this business
for quite a while, that HUD is somehow statutorily required to
have their fair market rents lag 2 years behind current times.
I've never seen that to be true, that they're statutorily
required to. That they lag 2 years behind, absolutely. That
they even sometimes lag 3 or 4 years behind, absolutely.
And what all of this has done is not allowed, not
incentivized the private sector to become more involved with
this program,
If there are waiting lists, doesn't it appear obvious that
that's due to the lack of product that's out there for these
people to use for their housing resource?
Some of the comments that are in this bill are terrific,
some of the provisions which would allow for decreasing some of
the administrative burden that not only taxes onto the PHA's
and certainly disincentivizes the owners, because it's much
move expensive for an owner to rent to a subsidized tenant than
it is to rent to a market rate tenant.
If a market rate tenant walks into a unit, they want to
take it, but they notice perhaps that, you know, there's a bump
in the door or there's a slash in the screen, they ask the
owner, ``Sure, I'll sign the lease, we'll have an addendum that
those will be fixed.''
We can't do that with subsidized residents. They have to
then go back to the PHA, and the PHA has to come and inspect.
They can't sign a lease until it's fixed.
And then once the lease is approved, he still has to go
through another burden of paperwork.
So what do you have there? You have a family who doesn't
have any housing. You have an owner that's there within a
vacant unit, not collecting any rent, and owners don't like to
do that. It doesn't incentivize them to even tolerate any of
the delays in the program.
So with the provisions in this bill that perhaps would
allow for PHA's to have the discretion, if indeed they knew the
owner, if they knew the property, if it's been inspected by
another program, to alleviate those inspections, you might see
more product coming on-line. I'm sure you would.
If, in conjunction with that, you get the department to
issue its fair market rents in a somewhat market coordinated
manner--if the market can keep up with itself, why can't HUD?
They have the same computers. They have the same access to
information. To allow this to go on and on and on has been
unforgivable.
There was no shortage of private participation in the
program when there was a project based portion to Section 8.
That's how these properties were built. The Section 8 project
based are indistinguishable from market rate properties.
The voucher program can and should be allowed to operate in
that exact same way, indistinguishable from market rate
tenants.
My final comment is--and again, there's a number of other
points in our testimony--in order for the Section 8 Voucher
Program to work as effectively as it can, some changes should
be recognized to tie the program closer to a low income housing
tax credit program.
It's the only new construction deal in town. It makes not
only new units available, but it preserves those units that
certain existing owners are considering opting out.
If you can increase the amount of project based Section 8
through attaching vouchers to these units, it will extend their
affordability, it certainly creates a larger resource than
what's available now, and you're bringing the private sector,
the private sector owners back into the game, because without
them, there's not really a game going on.
The residents are hurting, and we need to remember, at the
end of the day, we're housing people.
The last comment, when I heard these comments made about,
you know, the insufferable burdens that PHA's go through with
income certifications, you know, and the owners, the idea of
going to a 3-year certification for fixed income residents is
fabulous, because if I can only tell you the amount of fretting
that goes on in an elderly property when these folks know they
have to come up with their annual recert, and they've gotten a
little increase last year in their Social Security, and is that
going to put them over the top, are they going to have to
move--you can't believe the rumors that rifle through a
property when things like that happen.
And these people shouldn't have to fret about those things
in life. They have enough other things that they have to focus
on.
Chairwoman Waters. Thank you, very much.
Ms. Charlton. Thank you very much.
[The prepared statement of Ms. Charlton can be found on
page 74 of the appendix.]
Chairwoman Waters. Mr. Andrew Sperling.
STATEMENT OF ANDREW SPERLING, DIRECTOR OF LEGISLATIVE ADVOCACY,
NATIONAL ALLIANCE ON MENTAL ILLNESS, ON BEHALF OF THE
CONSORTIUM FOR CITIZENS WITH DISABILITIES HOUSING TASK FORCE
Mr. Sperling. Thank you, Chairwoman Waters, and members of
the subcommittee.
My name is Andrew Sperling, and I'm the director of
legislative advocacy for NAMI, the National Alliance on Mental
Illness. I'm here today representing the Consortium for
Citizens with Disabilities Housing Task Force. CCD is a
coalition of national disability organizations representing
both people with disabilities, their service providers, and
their families. Among our organizations are United Cerebral
Palsy, The Arc, United Spinal Association, Easter Seals,
Lutheran Services, NAMI, and others.
I'm here to deliver a message on behalf of the disability
community and the CCD Coalition with respect to the SEVRA
legislation, which we strongly support. Section 8 is an
absolutely critical resource for people with disabilities,
particularly people with disabilities who live on SSI and SSDI.
In a couple of weeks, we'll be presenting to this
subcommittee our Priced Out report for 2006. This will be the
fifth report we've done comparing SSI income levels to fair
market rents.
What we are finding is that a picture that we thought
couldn't get any worse, is actually finding a way to get worse.
The affordability gap between what a tenant, someone living
on SSI in the community, can afford to pay and fair market
rents for zero and one-bedroom apartments has actually doubled
since 1998.
SSI is now at 18.2 percent of median income and falling. In
order for someone living on SSI to rent a modest one-bedroom
apartment at the HUD fair market rent, on average, nationally,
that consumes 113 percent of their monthly income--113 percent
of their monthly income. For an efficiency, it's 101 percent.
People with disabilities who rely on SSI for their basic
needs, people with severe disabilities, are completely priced
out of the rental housing market. They must have rent
subsidies, and Section 8 is a program that has to meet their
need. It is the critical resource.
As a coalition, our CCD coalition supports SEVRA. There are
some long-overdue reforms to the Section 8 program that are
part of this. We supported the legislation last year, and we
look forward to supporting it again this year.
It would bring about a more effective funding formula. It
streamlines the process for rent determination, which is
absolutely critical for people with disabilities whose incomes
are static and not going up, because they're on disability
benefits, and maintains, very importantly, maintains the
extremely low income targeting for the Section 8 program.
Section 8 must remain targeted to those with extremely low
incomes, particularly people with disabilities.
A couple of other notes. I'd like to summarize my
testimony,
We support the project based reforms that were proposed
last year by your colleague, Ms. Velasquez from New York. We
believe that these reforms need to be a part of this
legislation. We would urge you to include those in the
legislation for this year.
CCD also has very strong reservations about any expansion
of the moving to work program. We recognize that this is now,
as you've heard the testimony today, there's lots of varying
opinions on this.
From the perspective of the disability community,
representing people living on SSI at 18 percent of median
income, allowing housing authorities the kind of flexibility to
increase the rent burden on people with disabilities, allowing
targeting of resources to higher income households, we believe
is a very dangerous policy to go down, and would actually
result in the Section 8 program serving fewer people with
disabilities.
I would urge this subcommittee not to include any kind of
expansion of moving to work in the legislation.
Finally, I want to note that there are now approximately
64,000 vouchers out there that Congress made a decision over
the years to target to non-elderly people with disabilities.
These are 50,000 vouchers that Congressman Rodney Frelinghuysen
from New Jersey, your colleague, placed in the appropriations
bill over a period of years.
There are also tenant-based rent subsidies funded under the
Section 811 program. There are approximately 14,000 of those.
We at CCD have a number of concerns about the way HUD has
tracked those vouchers to ensure that housing authorities
continue to target those vouchers to people with disabilities
upon turnover.
There was guidance that was put out in 2005. We want to try
and work with this subcommittee to make sure that housing
agencies that have those vouchers continue to target them to
people with disabilities upon turnover so those resources
aren't lost to the larger pool.
Thank you very much, Madam Chairwoman.
[The prepared statement of Mr. Sperling can be found on
page 143 of the appendix.]
Chairwoman Waters. Thank you, very much.
All right, let's see. Who is our last witness here?
Mr. Phil Tegeler.
STATEMENT OF PHILIP TEGELER, EXECUTIVE DIRECTOR, THE POVERTY &
RACE RESEARCH ACTION COUNCIL
Mr. Tegeler. Thank you, Chairwoman Waters.
I'm with the Poverty and Race Research Action Council.
We're a civil rights policy organization in Washington, D.C.
As several members of the committee have pointed out, a
central purpose of the Section 8 program is to give families a
meaningful choice to move to areas of lower poverty and higher
opportunity.
In this context, it is important to understand the damage
done to this program in recent years.
In our written testimony, we have included a consensus
statement of over 50 national, State, and local civil rights
and housing groups in support of Section 8 voucher reform.
Footnote 1 of our written statement lists some of the
restrictions to housing choice that have occurred under the
current Administration.
I'll briefly summarize those, because it's an important
context for this discussion:
Limits on exception rents that have limited the ability of
families to move out to higher rent, lower poverty areas in
recent years under HUD's administration of this program;
Cuts in mobility counseling all over the country. Small,
efficient mobility counseling programs in many highly
segregated metro areas closed down in the early years of this
Administration and not re-funded;
Financial disincentives to portability, the ability to move
across jurisdictional lines and into higher rent jurisdictions.
You've heard about that already;
In some cases, explicit restrictions on portability by HUD
on top of all of the bureaucratic barriers to moving across
city and town lines, as you've already heard.
We think the current draft bill begins to repair this
damage, but respectfully, it does not go far enough. We support
the new budget formula in the bill and especially the use of
reallocated funds for excess portability costs. This is a very
important provision and removes a major disincentive to
portability on the part of housing authorities.
But we urge the committee to go further in the following
ways:
First, to reform the portability system entirely to require
mandatory absorption of vouchers by receiving PHA's, eliminate
the billing procedures, make it a cleaner and easier process
for a family to move to a community of its choice;
Secondly, reinstate the exception payment standards system
so that families can move to higher rent areas, that there be a
tiered system within metropolitan areas of different rent
structures for different market, sub-markets within an area;
Reauthorize the mobility counseling program that assisted
families to find housing and move into housing outside the
usual neighborhoods that were described earlier;
Use deconcentration as a factor in the performance
assessment of PHA's, an explicit factor;
Encourage cooperation and regional administration of the
voucher program.
Now, some States have already started to do this.
Connecticut and Massachusetts are good examples of States that
are experimenting with regional administration of vouchers to
eliminate these border disputes and billing difficulties.
We recommend that the committee consider some pilot
programs and incentives for PHA's to get together and cooperate
more;
Finally, looking forward, and perhaps this is beyond the
scope of the present bill, but I think we need to ask what will
this Congress do to build on the Moving to Opportunity program?
What is the next Moving to Opportunity program going to
look like? What dramatic steps is Congress going to take to
help families move voluntarily to areas of greater employment
opportunity and better schools?
The answer is going to be found in the Section 8 Voucher
Program. It's the only housing program we have that offers this
opportunity, and it is up to Congress to press HUD to make it
more of a choice-driven program.
Thank you.
[The prepared statement of Mr. Tegeler can be found on page
149 of the appendix.]
Chairwoman Waters. Thank you, very much.
I do appreciate, again, the time that you have spent.
As you can see, our members are not here. Our ranking
member tried to remain, but she really had to catch a plane.
She just had no other choice.
But I think that, given the testimony that we have heard
today, we have learned a lot about not only your thinking, but
that of some of the others who testified before you.
So I'll just take all the time that I want to talk with
you, since everybody else is gone.
Let me just ask a few questions.
A lot has been said about portability here today, and I was
trying to focus on a discussion that I was involved in some
years ago about portability.
And it seems to me that the problem does not simply lie
with HUD or with the housing authorities, but it seems to me
that we had elected officials, some of them members of city
council, and others, who were adamantly opposed to portability
that would bring people into their communities that they
thought should not be there. It's called racism.
Are you familiar with that part of the argument, that there
are communities who do not wish to have Section 8 tenants in
their community?
Who would like to take that?
Mr. Tegeler. I'll start, Chairwoman Waters.
The beauty of the Section 8 voucher program is that there
is no city council or board of selectmen anywhere in the
country that has anything to say about whether families can
move into their towns.
And not only that, because it's a program that operates one
family at a time, there is a chance for real integration to
occur, there's not a huge zoning battle and a 4-hour meeting at
night about whether to rezone a parcel for a 20-unit
development.
The family has the right to move in, and the city or town
has no say in the matter, and that's the way the law is set up.
And frankly, in my experience in my past life as a civil
rights litigator, many towns are very happy with that
arrangement, because they don't want to have to decide, you
know, how many of these low income families are going to be
allowed into our community.
It's important that it not be something which is subject to
local control.
So that's my one feedback there.
Chairwoman Waters. How many--well, I guess you all
understand that the housing authority chiefs are appointed, are
they not? And who are they appointed by? Mayors. Who votes on
their confirmation? Members of city councils.
I saw some of this and the influence of that in a
particular area. Part of it was in my district.
Yes, Ms. Sard, you're trying to say something.
Ms. Sard. I think you're putting your finger on something
very important, very subtle and difficult to get at.
And while it is true that the Section 8 program has the
potential to be kind of integration by stealth, there is still
a lot that the administering agencies can do to promote it or
to hinder it.
The bill as drafted in the discussion draft goes very far
toward solving the new problems, the new hindrances to
portability that were created by the funding formula, but it
doesn't do anything to fix the problems that had been there
from 2004 and earlier.
And the truth is that this is a program that doesn't
accomplish as much as many of us would like to see to really
promote choice of where people can live.
There are several changes that could be added to the bill
that would really advance these goals.
One is the proposal that's been discussed, to require
housing agencies to absorb the vouchers that move in, using the
funds that are recycled within the bill to help pay for that.
And if you did that, then the issuing agencies wouldn't
have a disincentive to promoting portability, and the receiving
agencies might be encouraged, because they would get more
money. So that helps.
Chairwoman Waters. All right.
Ms. Sard. But that doesn't go far enough, either, and we
strongly recommend that you add to the performance assessment
section of the bill a specific requirement that performance be
assessed on achievement of deconcentration of poverty
objectives.
Chairwoman Waters. Very interesting. Okay.
Ms. Sard. And we have a proposal, proposed language that we
submitted to staff, which I'm happy to send again.
Chairwoman Waters. Okay. Very well.
I'm very interested in that, because I think you make a
good point.
The other thing that was brought to my attention today that
I'm very interested in, and you have to give me a better
feeling and understanding of, is are housing authorities
interested in building rental units?
Ms. Sard. A number of them are.
I think that the experience over the last 5 years with the
changes that Congress made in 2000 in the project based voucher
option has been one of the most positive and encouraging things
that has happened in the low income housing world.
And in order to encourage development, one of the things
that housing authorities can bring to the table is the vouchers
to project base to promote development.
Some of them have other authority with other money, some of
them don't, but that's a key thing that within this bill you
could do to promote that.
And in addition to the two provisions that people have
spoken in support of that are already in the bill, there is a
package of nine other changes to the project based voucher
section that have been worked on by a very broad-based group of
stakeholders that would make this aspect of the voucher program
work even more effectively to promote rental housing
development.
Chairwoman Waters. And that's coupled with low income
housing tax credits?
Ms. Sard. In part, not only.
Chairwoman Waters. Not only?
Ms. Sard. Not solely, but in part.
Chairwoman Waters. Okay.
Ms. Charlton. The important part of taking the project
based and attaching it to the property is the lending
community.
They're not going to be able to build new construction,
whether it be a housing authority, whether it be the private
developer, unless you have that subsidy attached to the
project. It can't leave with the resident, or you're not going
to find a strong lender that will do for you what you need
done.
Chairwoman Waters. Okay. We'll pay a lot of attention to
that.
The other thought that emerged here today was housing
authorities doing more to recruit and work with landlords.
I suppose each housing authority is different. I suppose
you don't have any real money in the budget to really do a lot
of outreach and training sessions and getting together and
incentivizing.
But what do you do? What do you do to get landlords
interested in wanting to be a part of our Section 8 program?
Ms. Sard. I'm happy to take that one.
Chairwoman Waters. Yes.
Ms. Sard. There are housing authorities that have worked
through this problem. HUD put out a publication, under the
Clinton Administration, that pulled together some of the best
ideas that housing authorities had come up with.
It does cost money, which raises the question of the
adequacy of the administrative fees.
One of the reforms in the discussion draft would be to
return the administrative fee in the program to a payment for
units leased.
Well, if agencies get paid for their success in leasing,
then they're going to do more to make sure they can lease. It's
just common sense.
And that has been one, in my opinion, it's been one of the
biggest reasons for the decline in voucher use over the last 3
years, is that agencies were no longer paid for performance,
and we have to go back to a pay for performance system.
Chairwoman Waters. Yes.
Ms. Crowley. Two comments on how to get landlords to be
more interested in the program.
First, in terms of an incentive, the places where housing
authorities operate efficiently, they get their inspections
done quickly, they get their payments out quickly, they are
good partners, are places where landlords are interested in
doing that.
So to the extent that housing authorities are incentivized
to be good partners as opposed to being somebody that the
landlord has to hassle in order to collect the rent, then that
obviously is an important thing to do.
The second thing is, getting back to your question about
the issue of not accepting voucher holders, whether it's moving
across the country or moving into the neighborhood, is the
ability to use rejection of a voucher holder as a tenant as a
proxy for rejecting a person for some other reason.
And there are a couple of States and a handful of
jurisdictions where it is illegal to reject a tenant on the
basis of their source of income.
There's no Federal protection along that line, and there
isn't, and in most places, there is no protection along that.
So one of the things that would be a very useful thing to
do, I think, is to really look at the fair housing community to
develop testing programs where you can begin to really
document, is this rejection of voucher holders based on their
voucher holders or is there something else going on?
And I think that would really give us--I mean, I have my
instincts, I have my anecdotes. But that would give us a lot of
really good data on which to develop future policy around how
to make the voucher program work better.
Chairwoman Waters. Yes.
Mr. Tegeler. Just briefly to follow up.
Some of the other recruitment tools that have been used in
the past, especially in high opportunity areas, some of the
better functioning mobility programs have sometimes used one-
time payments to landlords as an incentive device to recruit
them into the program.
Also, the idea has come up, which I think Barbara alluded
to, of performance incentives to PHA's, not just for their
lease-up rate, but for their lease-up rate in high opportunity,
low poverty areas, and reward PHA's financially for doing that.
Finally, and most importantly, it's the rent structure
that's most important in getting entry into high opportunity
communities, and as you know, the fair market rent system and
the way it's calculated, you know, goes to the mean in a
particular region, and the inner city rents pull down the
regional average, to the extent that in some metro areas, the
FMR won't even reach into some of the higher opportunity areas.
And we're not talking about, you know, single family
bedroom communities. These are lower poverty areas that have
lots and lots of rental housing.
And if you had a more realistic rent structure in these
metro areas, with tiers, as some States have done, of different
rent levels for different areas, you could gain more access and
successfully recruit landlords in those communities.
Chairwoman Waters. Well, you all have made it very, very
clear that it is absolutely unacceptable for HUD to use data
that's 2 years old to determine market rate of the value, so I
think we can do something about that.
I don't know if it's a tactic that's used in order to
reduce the number of participants or what, but I do think that
that's just too easy to conquer.
So we'll certainly take a look at that, also.
Yes, were you trying to say something, Ms. Sard?
Ms. Sard. I was just going to say that the excuses that HUD
has had in the past, whether right or wrong, no longer apply,
because starting in 2008, the data will be available from the
American Community Survey to do both the fair market rents and
the inflation factors on a much more current and local basis.
And if we did not only current but also more local, we
would address a number of these problems.
Chairwoman Waters. Well, I thank you all for your patience
and for being here today.
Some members may have some additional questions for the
panel, and they may submit it to you in writing, so without
objection, the hearing record will remain open for 30 days for
members to submit written questions to all of you, and to place
your responses in the record.
And with that, this hearing is adjourned.
[Whereupon, at 2:53 p.m., the hearing was adjourned.]
A P P E N D I X
March 9, 2007
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