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

                          AFFORDABLE HOUSING NEEDS IN
                          THE CITY OF HOUSTON: UNIQUE
                          CHALLENGES AND OPPORTUNITIES

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

                                 FIELD HEARING

                                   BEFORE THE

                                SUBCOMMITTEE ON
                       HOUSING AND COMMUNITY OPPORTUNITY

                                     OF THE

                        COMMITTEE ON FINANCIAL SERVICES

                         U.S. HOUSE OF REPRESENTATIVES

                           ONE HUNDRED TENTH CONGRESS

                                 FIRST SESSION

                                   __________

                                OCTOBER 29, 2007

                                   __________

           Printed for the use of the Committee on Financial Services

                               Serial No. 110-76

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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             STEVEN C. LaTOURETTE, Ohio
    GREGORY W. MEEKS, New York           DONALD A. MANZULLO, Illinois
    DENNIS MOORE, Kansas                 WALTER B. JONES, Jr., North
    MICHAEL E. CAPUANO, Massachusetts        Carolina
    RUBEN HINOJOSA, Texas                JUDY BIGGERT, Illinois
    WM. LACY CLAY, Missouri              CHRISTOPHER SHAYS, Connecticut
    CAROLYN McCARTHY, New York           GARY G. MILLER, California
    JOE BACA, California                 SHELLEY MOORE CAPITO, West
    STEPHEN F. LYNCH, Massachusetts          Virginia
    BRAD MILLER, North Carolina          TOM FEENEY, Florida
    DAVID SCOTT, Georgia                 JEB HENSARLING, Texas
    AL GREEN, Texas                      SCOTT GARRETT, New Jersey
    EMANUEL CLEAVER, Missouri            GINNY BROWN-WAITE, Florida
    MELISSA L. BEAN, Illinois            J. GRESHAM BARRETT, South Carolina
    GWEN MOORE, Wisconsin,               JIM GERLACH, Pennsylvania
    LINCOLN DAVIS, Tennessee             STEVAN PEARCE, New Mexico
    ALBIO SIRES, New Jersey              RANDY NEUGEBAUER, Texas
    PAUL W. HODES, New Hampshire         TOM PRICE, Georgia
    KEITH ELLISON, Minnesota             GEOFF DAVIS, Kentucky
    RON KLEIN, Florida                   PATRICK T. McHENRY, North Carolina
    TIM MAHONEY, Florida                 JOHN CAMPBELL, California
    CHARLES A. WILSON, Ohio              ADAM PUTNAM, Florida
    ED PERLMUTTER, Colorado              MICHELE BACHMANN, Minnesota
    CHRISTOPHER S. MURPHY, Connecticut   PETER J. ROSKAM, Illinois
    JOE DONNELLY, Indiana                THADDEUS G. McCOTTER, Michigan
    ROBERT WEXLER, Florida               KEVIN McCARTHY, California
    JIM MARSHALL, Georgia
    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         SHELLEY MOORE CAPITO, West
    JULIA CARSON, Indiana                    Virginia
    STEPHEN F. LYNCH, Massachusetts      STEVAN PEARCE, New Mexico
    EMANUEL CLEAVER, Missouri            PETER T. KING, New York
    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                THADDEUS G. McCOTTER, Michigan
    BARNEY FRANK, Massachusetts          KEVIN McCARTHY, California

                                C O N T E N T S

                                  ----------
                                                                       Page
    Hearing held on:
        October 29, 2007.............................................     1
    Appendix:
        October 29, 2007.............................................    43

                                   WITNESSES
                            Monday, October 29, 2007

    Allison, Horace, Senior Vice President, Housing Authority of the
      City of Houston................................................    14
    Bustamante, Daniel, Executive Director, Greater Houston Fair
      Housing Center.................................................    34
    Celli, Richard S., Director, City of Houston Housing and
      Community Development Department...............................    13
    Gerber, Michael, Executive Director, Texas Department of Housing
      and Community Affairs..........................................    11
    Henneberger, John, Co-Director, Texas Low Income Housing
      Information Service............................................    26
    Junor, Debra, Member, Texas Tenants' Union.......................    31
    McElroy, Toni, President, Texas ACORN............................    33
    Muhammad, Robert, Chief Executive Officer, ACTION Community
      Development Corporation........................................    29
    Ozdinec, Milan, Deputy Assistant Secretary for Public Housing and
      Voucher Programs, U.S. Department of Housing and Urban
      Development....................................................     9
    Quan, Gordon, Founding Partner, Quan, Burdette and Perez, on
      behalf of the National Coalition for Asian Pacific American
      Community Development..........................................    36

                                    APPENDIX

    Prepared statements:
        Bustamante, Daniel...........................................    44
        Celli, Richard S.............................................    57
        Gerber, Michael..............................................    60
        Henneberger, John............................................    71
        Junor, Debra.................................................    93
        Lopez, Manuel................................................   101
        McElroy, Toni................................................   104
        Muhammad, Robert.............................................   110
        Ozdinec, Milan...............................................   114

                          AFFORDABLE HOUSING NEEDS IN
                          THE CITY OF HOUSTON: UNIQUE
                          CHALLENGES AND OPPORTUNITIES

                                  ----------

                            Monday, October 29, 2007

                 U.S. House of Representatives,
                            Subcommittee on Housing and
                                 Community Opportunity,
                               Committee on Financial Services,
                                                       Washington, D.C.
        The subcommittee met, pursuant to notice, at Houston
    Baptist University, Belin Chapel, 7502 Fondren Road, Houston,
    Texas, Hon. Maxine Waters [chairwoman of the subcommittee]
    presiding.
        Members present: Representatives Waters and Green.
        Also present: Representative Jackson Lee.
        Chairwoman Waters. Good morning, ladies and gentlemen. I'd
    like to start by thanking President Robert Sloan and the
    Houston Baptist University for allowing us to use this
    wonderful space for today's hearing on ``Affordable Housing
    Needs in the City of Houston: Unique Challenges and
    Opportunities.'' It's a beautiful campus. This is a beautiful
    auditorium. And let's just give the president a round of
    applause to thank him. Where are you, President Sloan? There he
    is, in the back. Thank you so very, very much.
        Mr. Sloan. Thank you.
        Chairwoman Waters. I'd also like to thank Congressman Al
    Green for inviting me here today. And upon learning about this
    hearing that was being held by the subcommittee that I chair
    and where Mr. Green serves, your other Congressperson of the
    area, Ms. Sheila Jackson Lee, said, ``I would like to
    participate.'' Let's thank her for being here.
        I'm very pleased to hold today's hearing for several
    reasons. First, as I said, Representative Green asked me to.
    And whenever he makes a request, I do my best to comply. That
    is because Representative Green is simply the most committed
    member of my subcommittee. We have many scheduling commitments
    as Members of Congress. Representative Green, for example,
    serves on the critical Homeland Security Committee as well as
    facing the demands of the full Financial Services Committee
    which has been extraordinarily active this season due to recent
    events in the economy and the leadership of our chairman,
    Chairman Barney Frank. Yet as we prepared for this hearing, my
    staff confirmed what I had already suspected, namely that Mr.
    Green is the only member of the subcommittee to have attended
    every single one of our hearings this session. He has perfect
    attendance.
        Mr. Green. Thank you.
        Chairwoman Waters. And he deserves much more than just a
    gold star for attendance. Representative Green is a consistent
    voice for the poorest, most vulnerable residents of Houston,
    Harris County, and the Nation when it comes to Federal housing
    policy decisions, whether they take place within our
    subcommittee, at the full committee level, or even on the Floor
    of the House itself. In the subcommittee, I can always count on
    him. Indeed, he ably stepped in for me as chair recently when
    my own multiple committee assignments forced me to miss a
    portion of one of our subcommittee's hearings on homelessness.
    At the full committee, during consideration of our Section 8
    voucher reform bill, Representative Green offered a successful
    amendment to authorize desperately needed additional housing
    vouchers in recognition that we need to do more than just
    improve existing Federal housing programs. We need to expand
    them after many, many years of neglect. Finally, earlier this
    month, Representative Green spoke eloquently on the House Floor
    in support of the National Affordable Housing Trust Fund Act,
    whose passage by the full House stands as perhaps our
    committee's proudest accomplishment this year.
        Representative Green is also an innovative legislator in
    his own right. I look forward to hearing from all of the
    witnesses today about the potential impact of a bill that he
    has introduced, H.R. 2629, the Housing Fairness Act of 2007,
    which would reinvigorate the Department of Housing and Urban
    Development's enforcement of the Nation's fair housing laws. He
    is also the lead sponsor of H.R. 3329, the Homes for Heroes
    Act, which would devote substantial new resources to the
    housing and supportive services needs of America's veterans, an
    absolute necessity in these times, as we all know.
        Now, before I highlight additional reasons why this hearing
    is so timely and appropriate, I would like to acknowledge
    Representative Jackson Lee. While I do not have her serving on
    the Housing Subcommittee, she has many accomplishments that she
    can be proud of, because in addition to the work that she does
    on the Judiciary Committee--where I serve with her--she is
    serving on three of the most influential committees in the
    Congress of the United States. Again, in addition to the
    Judiciary Committee, she is on the Homeland Security Committee
    and the Foreign Affairs Committee. So I'm very pleased that
    she's been able to join us today. And she has worked with
    Representative Green as they have both been extraordinary
    advocates on behalf of the victims of Hurricanes Katrina and
    Rita and the housing of the Houston region which has been so
    affected. They have both been staunch allies in the fight to
    push for my legislation, H.R. 1227, which is known as the Gulf
    Coast Hurricane Housing Recovery Act of 2007, through the
    House.
        Again, I'm pleased to hold this hearing because the
    affordable housing needs in Houston are quite unique. As the
    Nation's fourth largest city and one of the fastest growing,
    Houston boasts one of the most diverse populations in the
    Nation. As the title of the hearing suggests, Houston's
    circumstances provide for both challenges and opportunities. On
    one hand, as one who comes from Los Angeles where the median
    home price is $529,000, the housing costs in Houston seem
    downright reasonable. It is nearly $400,000 less than that to
    purchase a median home here. I think the median here is about
    what, Mr. Green, $156,000?
        Mr. Green. $154,900.
        Chairwoman Waters. $154,900. That seems awfully reasonable
    to those of us who come from California. However, when we look
    at the number of people who have very low incomes, and are just
    barely making it, that can be very high. People are paying more
    than 30 percent of that income for housing. These costs, as
    well as flexible zoning environments, make development of
    additional affordable housing here perhaps more feasible than
    in some of the major metropolitan areas. On the other hand,
    reasonable does not necessarily mean affordable, nor can
    affordable housing be developed anywhere no matter the economic
    and regulatory climate without the resources to do it.
        Nearly one-third of Houston homeowners and over half of all
    renters in the Houston metropolitan area again, as I indicated,
    spend more than 30 percent of monthly pretax income on all
    housing costs making them housing cost burdened as defined by
    the Department of Housing and Urban Development. Fully a
    quarter of renters pay more than 50 percent of their income in
    rent unsustainable for households over the long term. And as in
    every community in the country, working no longer guarantees
    being able to afford housing in Houston. The National Low
    Income Housing Coalition estimates that in order to afford a
    reasonable two-bedroom apartment here, a renter would have to
    earn $14.77 an hour, more than 2\1/2\ times the minimum wage.
        Also, like most communities in the Nation, the Federal
    housing resources available in Houston don't come close to
    meeting the need. Across the country, only one out of four
    households eligible for Federal housing assistance receive it.
    Here, this manifests itself in waiting lists numbering in the
    thousands for the Houston Housing Authority Section 8 vouchers
    and public housing units. Houston's booming growth is now
    threatened by the recent crisis in the subprime mortgage
    market. The foreclosure rates here are not among the highest in
    the Nation, but they are still significant. And this market
    experienced double-digit drops in both home prices and housing
    starts last month.
        Added to these challenges, of course, is the continued
    impact of Gulf Coast hurricanes. The nearly 200,000 evacuees
    who initially came to Houston constituted the equivalent of the
    entire City of Shreveport, one of the Nation's 100 largest
    cities, suddenly being dropped in Houston's lap. Nearly half of
    the evacuees remain here. The generosity shown by the City and
    its residents has been extraordinary.
        Representatives Green, Jackson Lee, and I have just had the
    opportunity to observe some of the excellent work that has been
    done here, but, of course, there have been bumps in the road
    along with the successes. I'm sure that we will hear about both
    today. I want to assure you that as chair of the Housing and
    Community Opportunity Subcommittee, I am indeed committed to
    helping Houston meet all of its affordable housing needs, both
    those that existed before Hurricanes Katrina and Rita and
    additional ones that have been created by the hurricanes.
        Not only am I committed because of the wonderful advocacy
    of Mr. Green and Ms. Lee and others, as you know, my husband is
    from Houston. And so I have to honor him and his family also.
    Not only do I have to work for Los Angeles and California, but
    I have to work for Houston and Texas, also. So with that, I
    want to recognize Representative Green for his opening
    statement.
        Mr. Green. Thank you, Madam Chairwoman. Friends, this is
    indeed a great occasion, because today the Congress of the
    United States of America via its Housing Subcommittee has
    convened in Houston, Texas. It is historical. And I am so
    honored, I cannot tell you what a preeminent privilege it is.
    In fact, it is a superlative pleasure and a splendiferous honor
    to be seated next to the Honorable Maxine Waters, the
    preeminent authority. The preeminent authority, that's right.
    Give her a big Texas-size welcome. If you love Maxine Waters
    and you know it, you ought to stand up and show it. Give her
    the kind of welcome that she merits for bringing this committee
    to Houston, Texas. Give it to her.
        Friends, in the United States Congress, the Congressional
    Black Caucus, with its 43 members, is considered the conscience
    of the United States Congress. I would have you know that the
    Honorable Maxine Waters is considered the conscience of the
    conscience of the United States Congress. Maxine Waters.
        By way of some information that is of benefit to you that
    will, of course, coincide with much of what we'll talk about
    today, I need to share the following: There was an effort to
    raise the minimum wage in this country. It took 10 years to get
    it done. Throughout the entirety of the 10-year period, the
    Honorable Maxine Waters was at the very forefront of that
    movement. She was a part of the movement to raise the minimum
    wage, and I say thank God that this Congress has now raised the
    minimum wage to $5.85 an hour. It's not what it should be, but
    thank God it isn't what it was. We have raised the minimum
    wage.
        It's important to talk about this minimum wage because,
    when we talk about affordable housing, people who are among the
    least, the last, and the lost need affordable housing too. And
    they need to be able to have the dignity of earning an income
    so that they can pay their own way. No one wants to be on
    welfare. Every person wants to say farewell to welfare. A
    decent day's wage for a decent day's work is a means by which
    people can say farewell to welfare. She has been a part of that
    effort to help people get that decent day's wage.
        But more importantly--and as important as it is, I will say
    more importantly, this Housing Trust Fund that she mentioned,
    friends, it is unheard of in the annals of U.S. history to have
    an Affordable Housing Trust Fund dedicated to the preservation
    of affordable housing, to the construction of affordable
    housing, to the renovation of affordable housing, dedicated to
    maintaining a sufficient stock of affordable housing to meet
    the needs of those in this country who do not have affordable
    housing. This Affordable Housing Trust Fund will be funded with
    money from the GSE, Fannie Mae and Freddie Mac, about $700
    million annually, and money from FHA, about $300 million. This
    is a significant number. We're talking about approximately $1
    billion annually for affordable housing. And it is something
    that we can thank the Honorable Maxine Waters for. I will also
    tell you that I have been so blessed to serve on a committee
    with her and to serve on a committee that is also under the
    leadership of the Honorable Barney Frank. And when my
    subcommittee chair and my full committee chair are working in
    sync and harmony, if you will, it really makes it easy for us
    to get some of the things done that you want to have us do. So
    I'm very appreciative that she has come today and she is here
    to hear from us and understand what our needs are here in
    Houston, Texas, and we do have some needs.
        I also want to say to you that I'm honored to have the
    Honorable Sheila Jackson Lee here with us as well. She and I
    are working together on a good number of projects, not only in
    Congress but also here locally, that while they may not seem to
    relate to the congressional effort, we are elected to help in
    any way that we can, and we do so. And I ask that you give her
    an expression of appreciation, as well.
        Finally, before I give you just a bit of statistical
    information--and I don't want to overwhelm you because we have
    capable, confident, qualified experts who will impart this
    information to you, but I do want say this finally before I go
    to this information. When Katrina hit Louisiana, it was
    necessary for Members of Congress to go there. I know of at
    least five occasions wherein the Honorable Maxine Waters went.
    But I want to tell you about one mall incident, just a brief
    vignette, to give you some understanding of how she relates to
    people.
        We had a lady who wanted us to go and see how her home had
    been flooded, and it was a consensus that we didn't have enough
    time, that it was just really not available for us at that time
    to do this. I want you to know that when she overheard that
    conversation, she stepped up and said, ``We will go, we will
    see, and we will hear.'' No one in her world is above the law,
    and thank God in her world no one is beneath the law. Every
    person merits consideration of the law.
        With reference to my City of Houston, Texas, we define
    affordable housing at the national level as spending no more
    than 30 percent of your income, your gross income, on housing.
    I regret to inform you that in our City, we have many persons
    who are exceeding that and exceeding 50 percent, but also when
    you add housing and transportation into the equation, we find
    that the average family is spending about 56 percent of their
    income on housing and transportation. Now, if you're spending
    50 percent of your income on housing and transportation, that
    doesn't leave a lot for the necessities of life other than
    housing--clothing, food, and some of the other amenities that
    you need to live, as well. So we're here today to hear from the
    experts and ask that they would give us the insight that we
    need so that we can go back to the Congress of the United
    States and be efficacious in the effort to make sure that the
    needs of all persons in this country are met with reference to
    housing. Every person ought to have a place to call home. We
    are here to meet these needs.
        Finally, we have people who are homeless in Houston, Texas,
    and the statistical information is quite shocking. For fear
    that I may not recite it all absolutely correctly, I'd like to
    just read to you some of this information: At any point in
    Houston, Texas, we have about 12,000 to 14,000 people who are
    experiencing homelessness. And in this group of people who are
    experiencing homelessness, about 11 percent are there because
    of domestic violence; about 24 percent are there because they
    have been incarcerated and they are back trying to make their
    way through life; about 28 percent of them are veterans; 55
    percent have some mental health issues; 57 percent have had
    some sort of history of substance abuse; 59 percent lost their
    housing because they lost their job; and 66 percent have no
    income at all. These numbers don't add up to 100 percent
    because many of the persons will fall into multiple classes. We
    have persons who have no jobs, who have substance abuse, who
    may have some mental concerns that should be addressed.
        So as we look to acquire our intelligence on housing, we
    want to remember that we have the homeless, we have those who
    are working and still cannot afford housing, and then, of
    course, we have those who want to buy homes and would like to
    have the opportunity to have a home and not get caught up in a
    subprime market or, even worse, a predatory market such that
    they find themselves only expending capital, not acquiring
    equity and not building wealth.
        I want to thank you again, Congresswoman, for convening
    this hearing in Houston, Texas. I think I speak for all of
    Houston when I say we will be eternally grateful that Houston
    is now going to be a part of the focus, if you will, of the
    housing issues in the United States of America. Thank you.
        Chairwoman Waters. Thank you. Thank you, Congressman, for
    that opening statement. We have such an appreciation for his
    passion, and we just love his vocabulary. Okay. Without
    objection, Ms. Jackson Lee will be considered a member of the
    subcommittee for the duration of this hearing. And with that, I
    recognize Ms. Lee for her opening statement also.
        Ms. Jackson Lee. Thank you, Madam Chairwoman. And, again,
    let me offer a deeply appreciated welcome on behalf of all of
    the citizens of Houston in every congressional district that we
    have the privilege of sending to the United States Congress. I
    might leave off the concept that there was a change in 2007. I
    won't be pointed in that. But that allowed Maxine Waters to
    become the chairwoman of this subcommittee. You can see what a
    difference a day makes in terms of the focus and the compassion
    and passion. And so I thank her for her presence today, and it
    is a delight to be able to work with my colleague. The smartest
    thing that our Caucus could have done is to appoint Congressman
    Al Green to the Financial Services Committee. We applaud that
    act, and out of that was generated a great opportunity for
    Houston.
        I ask unanimous consent to put my entire statement into the
    record, but I'll make these very brief points. Without a doubt,
    I believe that when you think of our Constitution and our
    beginning language in the Declaration of Independence, we all
    are created equal with certain inalienable rights of life and
    liberty and the pursuit of happiness. Although education and
    housing may not have been directly mentioned, I don't know
    about you, but I think that the quality of life of all of us is
    dependent upon good education, good healthcare, and good
    housing.
        So I make these very brief points: One, we are looking
    forward to this trust fund so that we can have a commitment to
    affordable housing in this community and certainly across the
    Nation. I encourage you to support this legislation. And even
    though you may be in the State of Texas, call Senators across
    the Nation. Particularly call our Senators and ask them to
    support this very important legislation. And I will give you a
    reason why: If you look at low-income owners who experience
    severe costs and, therefore, block them out of the market,
    you'll find among the 31,886 owner households with income below
    30 percent of the area median income in 2000, almost half, 49
    percent, spent more than 50 percent of their gross income on
    housing costs and another 17 percent more than--more than 30
    percent of their gross income. Disabled persons receiving SSI
    benefits are particularly vulnerable to affordability concerns.
    And so the most vulnerable people--for example, the fair market
    rent for a one bedroom apartment in Houston is $633, which
    exceeds by 5 percent the average monthly SSI benefits of $603.
    So there are enormous costs for those who are seeking
    affordable housing.
        Let me move to another point that I think is very important
    and close to Chairwoman Waters' heart and, of course, knowing
    the Fifth Ward area, many of our older areas in Houston and
    particularly areas in my district, she knows the number of
    seniors who also suffer from the inadequate housing. I'm
    grateful to the leadership of Congressman Green, who has worked
    with me on these issues. But a couple of years ago, the City of
    Houston suffered a number of challenges that required audits
    and required the elimination of certain programs. One of them
    happened to be the rehabilitation program of senior housing. In
    actuality, the senior housing repair and rehabilitation was
    actually stopped. When we recognized that seniors would suffer,
    we brought together the Department's Director and Secretary of
    the U.S. Department of Housing and Urban Development with a
    goal of restarting the program. An agreement was reached where
    the City would expend local funds and be reimbursed by HUD. The
    program was restarted with new contractors and procedures.
        Now, the home repair program for our seniors seems of
    little consequence to City officials even though the repair of
    senior's homes is a priority in the consolidated plan pursued
    by HUD. Seniors continue to wait on a list. So we hope, as we
    move through this hearing and further our interest, that we'll
    be able to correct that problem.
        My last point is just an example. Just last week, a senior
    who had been on a waiting list expecting repairs came before
    the City Council after being told that her property--that she
    lived in the floodplain. The City staff who misread the
    regulation had denied this woman home repairs because she lives
    in the floodplain. Fortunately, Council Member Jarvis Johnson
    called my office and we were able to connect the Council Office
    with the HUD official who cited the chapter and verse of the
    exemption that allowed repairs of this nature without regard to
    the flood zone. So as we look for housing, we must include all
    of those in our community--the disabled, the seniors, those who
    need affordable housing.
        And, Madam Chairwoman, I am so grateful for both you and
    Congressman Green, because as I look as the representatives of
    the homeless here in this auditorium--I took it upon myself to
    drive around Houston late at night--12 to 2 in the morning--
    just to see the second city that most of us don't see. The
    enormous amount of homeless persons really begs for our action.
    And so as I look to the State and look to the City and County,
    I am grateful of your presence here but also of the leadership
    of the chairwoman. And I'd like to, in a moment of personal
    privilege, thank Mr. Guy Rankin, who is not here, Madam
    Chairwoman, but who wanted to offer his appreciation to you
    from the Harris County Housing Authority for their DHAP program
    and also to acknowledge the work that they are doing. I thank
    you very much. I look forward to this hearing, and I yield back
    my time.
        Chairwoman Waters. Thank you very much. I think that we
    have some of the elected officials from the Houston area that
    entered the room, so if you would like to make an introduction,
    Mr. Green.
        Mr. Green. I'm most appreciative, Madam Chairwoman. We have
    with us this morning an outstanding elected official, public
    servant, if you will, the Honorable Adrian Garcia, who is a
    member of the Houston City Council. Adrian Garcia. I'd like to
    also just acknowledge that our veterans have united and decided
    to be here today as a unit. And we are honored to have a group
    of veterans who are here. Veterans, would you just stand so
    that we can see? Any veterans, of course, but these are
    veterans who have united. They are here, and we must serve
    them. They have served us well.
        There are many institutions that were available to assist
    when Katrina hit, but I will tell you that one that is in the
    18th Congressional District, and I'm sorry that I can't move
    them into the 9th Congressional District, but the Sheikh
    Community Center is represented today by the Honorable Delord
    Parker. Would you give him an expression of appreciation?
        For the record, I would like to introduce a document, and
    if there are others with documents that you would like to have
    become a part of the record, I believe the chairwoman will
    announce at some point that the record will remain open for
    members. And if you'll give it to me, I will submit it into the
    record for you.
        But we have from the Honorable Gladys House--who needs no
    introduction, but for edification purposes, I will tell you
    that she's with historic Freedman's Town and Allen Parkway
    Village--a document titled ``Affordable Housing Needs in
    Houston, Unique Challenges and Opportunities.'' Madam
    Chairwoman, I beg that have we have unanimous consent to place
    this into the record as well as any other documents that I may
    receive.
        Chairwoman Waters. Without objection, it is so ordered.
        Mr. Green. Thank you, Madam Chairwoman.
        Chairwoman Waters. Mr. Green, I want to remind the veterans
    of H.R. 3329, the Homes for Heroes Act, that has been
    introduced by Mr. Green. One of America's shames is the number
    of homeless veterans that we have on our streets all over
    America. And not only will my subcommittee make this a
    priority, we're saying to all of the presidential candidates on
    both sides of the aisle that they better make that a part of
    their platforms as they campaign to lead this country. So thank
    you so very much for being here. Thank you.
        With that, I'd like to introduce our first panel: Mr. Milan
    Ozdinec, Deputy Assistant Secretary for Public Housing and
    Voucher Programs, U.S. Department of Housing and Urban
    Development; Mr. Michael Gerber, executive director, Texas
    Department of Housing and Community Affairs; and Mr. Richard S.
    Celli, director, City of Houston Housing and Community
    Development Department. I'd like to thank all of you for
    appearing for the subcommittee today, and without objection,
    your written statements will be made a part of the record. You
    will now each be recognized for a 5-minute summary of your
    testimony.
        We will start with Mr. Ozdinec.

      STATEMENT OF MILAN OZDINEC, DEPUTY ASSISTANT SECRETARY FOR
    PUBLIC HOUSING AND VOUCHER PROGRAMS, U.S. DEPARTMENT OF HOUSING
                         AND URBAN DEVELOPMENT

        Mr. Ozdinec. Thank you, Madam Chairwoman. Good morning. My
    name is Milan Ozdinec, and I am the Deputy Assistant Secretary
    for the Office of Public Housing and Voucher Programs at HUD. I
    wish to thank Chairwoman Waters, Congressman Green, and
    Congresswoman Jackson Lee for inviting me here this morning to
    appear before the subcommittee. Specifically, you requested
    that I describe the Department's new Disaster Housing
    Assistance Program and its implementation, including here in
    the City of Houston, thus far.
        The Administration recognizes the need to continue
    assistance to Gulf Coast residents who remain displaced by
    Hurricanes Katrina and Rita, many of whom are currently
    residing here in the Houston area. The Disaster Housing
    Assistance Program, or DHAP for short, is a new demonstration
    program that will ultimately provide tenant-based rental
    assistance to approximately 44,000 families. DHAP commenced
    case management on September 1, 2007. The first rental
    assistance payments under DHAP will begin December 1, 2007.
        The DHAP is a temporary housing assistance program, and its
    overall objective is to help families ultimately transition
    back to permanent housing and economic self-sufficiency by
    March 1, 2009. HUD is indeed responsible for the design,
    implementation, and operation of DHAP. We welcome this
    opportunity, Madam Chairwoman. Housing families in need is one
    of our core missions. We are also in a unique position to help.
    As you know, we have at our disposal a national network of some
    2,400 housing agencies that administer HUD's Housing Choice
    Voucher Program. We have proven to have the experience and
    expertise at the local level to effectively administer tenant-
    based rental assistance. These PHAs know their local housing
    markets and already work with owners in the private rental unit
    market. Housing authorities are involved in providing
    assistance to families. Housing families is their bread and
    butter. It's what they do.
        DHAP may be a new program, but tenant-based housing
    assistance has already proven to be a highly effective
    mechanism for assisting displaced families. Shortly after
    Hurricane Katrina, HUD developed and implemented the KDHAP
    program to assist displaced families who were previously
    assisted by HUD. Then in December of 2005, the Congress
    appropriated an additional $390 million directly to HUD to
    assist thousands of additional families displaced by Hurricane
    Katrina--displaced who were previously HUD assisted or homeless
    through the disaster voucher program. To date, over 33,000
    families have received rental assistance through these two
    programs. HUD is once again calling upon our public housing
    authorities to provide assistance to eligible families under
    DHAP. Since the vast majority of these families are already
    housed, our PHAs will make rental assistance payments on behalf
    of these families. These families may remain in their current
    unit or, in some cases if they choose, they can find another
    unit and move. In those cases where a family must move, the PHA
    will provide housing search assistance.
        Implementation of DHAP is well under way. We have published
    operating requirements, contracts, grant agreements, and case
    management procedures, including software development. We held
    meetings with PHAs, landlords, and advocacy groups both here in
    Houston and in other areas around the Gulf. We have provided
    onsite technical assistance at PHA offices, broadcast
    interactive Web casts, and established a DHAP referral call
    center with a toll free number.
        On August 11, 2007, FEMA referred to HUD 28,582 eligible
    families for DHAP. Since then, we have executed 336 grant
    agreements with PHAs that cover over 26,000 of those families.
    Here in Houston, we have one of the largest concentrations of
    DHAP families. We have executed two grant agreements, one with
    the Housing Authority of the City of Houston, and one with the
    Housing Authority of Harris County, to serve approximately
    9,000 families. By way of contrast, Madam Chairwoman, through
    the entire State of California, we only have 143 eligible
    families for DHAP. With respect to the challenges and concerns
    we face in regard to implementing DHAP, our biggest concern is
    the nature of the transition from FEMA to HUD and all of the
    complexities associated with it. For instance, this complexity
    resulted in HUD concerns that the transitions would not be
    seamless for all families. Therefore, it was decided to delay
    the complete transition to DHAP from November 1, 2007, to
    December 1, 2007.
        Madam Chairwoman, members of the subcommittee, I cannot say
    enough about the tremendous response and effort put forward by
    our PHAs throughout the country. Without their dedication and
    commitment, DHAP would not be possible. I especially would like
    to commend both the Housing Authority of the City of Houston
    and the Harris County Housing Authority for their exceptional
    work on DHAP. All new programs have growing pains. Our PHAs,
    through their hard work and perseverance, have been able to
    ramp up this program and provide case management operations
    within 30 days of signing an agreement with FEMA.
        Madam Chairwoman, I wish again to express our enthusiasm
    for being able to help. We believe that HUD, using our local
    PHA infrastructure, can effectively and efficiently deliver
    assistance. The expertise is already on the ground to link case
    management services and housing assistance in order to provide
    a comprehensive response to help families recover from a
    disaster. In conclusion, and on behalf of the Secretary, Madam
    Chairwoman, again, I want to thank you for affording HUD the
    opportunity to discuss DHAP with you and the subcommittee in
    its implementation here in Houston and around the country. I
    would be happy to respond to any questions that you might have.
        [The prepared statement of Mr. Ozdinec can be found on page
    114 of the appendix.]
        Chairwoman Waters. Thank you very much.
        Mr. Gerber.

        STATEMENT OF MICHAEL GERBER, EXECUTIVE DIRECTOR, TEXAS
              DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS

        Mr. Gerber. Good morning, Madam Chairwoman, Congressman
    Green, and Congresswoman Sheila Jackson Lee. My name is Michael
    Gerber, and I am the executive director of the Texas Department
    of Housing and Community Affairs in Austin. I'd like to thank
    you for the opportunity to appear before you today. Madam
    Chairwoman, before I start, for those of us who have lived with
    a natural disaster in Texas for the last 2 years, our hearts
    and thoughts certainly go out to the people in Southern
    California who are dealing with the effects of these horrific
    fires.
        Chairwoman Waters. Thank you.
        Mr. Gerber. My department, TDHCA, is the lead State agency
    to assist low-income Texans in finding safe, decent, and
    affordable housing. Without you and your colleagues in
    Congress, we couldn't do our jobs. And we'd like to thank you
    for all that you do to help provide a better standard of living
    for low-income Texans. We also want to join in thanking you for
    your efforts in passing the new Housing Trust Fund legislation
    that will help even more low-income Texans and other persons of
    low income across the country to have greater access to
    affordable housing.
        The National Housing Trust Fund would enable our State to
    have another tool in order to target lower-income Texans,
    especially those at 30 percent and below. And we will certainly
    take you up on your request to be in touch with our members of
    the Senate to make them aware of the benefits of the Housing
    Trust Fund nationally and here in Texas. Thankfully, our State
    legislature has also received the word about the benefits of
    the Housing Trust Fund. And thanks to the efforts of a number
    of folks in this room, our State legislature in the last
    legislative session approved an almost 60 percent increase in
    our own State housing trust fund.
        Even with all that help, we know that we're still not
    reaching the need that's out there. So what exactly are we
    doing? With the Federal funds available, we've allocated at
    TDHCA more than $680 million for low-income Texans during the
    2007 fiscal year that just concluded. With those funds, we
    rehabilitated seniors and single head-of-household homes in
    rural Texas allowing families to stay in their community while
    repairing their homes to a decent standard.
        We used private activity bonds to place a record level of
    assisted and low interest rate unassisted mortgages helping
    those people who are ready to take the next step in the housing
    continuum of home ownership. These are safe, traditional
    mortgages that provide real security rather than people going
    to higher interest rate loans to gain homeownership.
        Locally, through our Texas First time Homebuyer Program, we
    have been able to help more than 1,500 families here in the
    Houston area achieve the American Dream of homeownership. TDHCA
    offers the lowest interest rates of any State agency and we
    have a very safe and traditional mortgage product that's firmed
    up by conventional underwriting. You'll find no exotic ARMs or
    balloon mortgages through TDHCA.
        We also work with the Department of Energy Weatherization
    Program that not only saves energy but helps a family afford to
    heat here in Texas and cool--cooling's very important--a home
    without making choices between food and electricity.
        And, of course, the public-private partnership of the Low
    Income Housing Tax Credit Program has had a tremendous impact
    in creating additional affordable house or rehabbing existing
    housing and improving the quality of life for the residents in
    those communities. For instance, here in the Houston area
    alone, we have placed more than 26,000 units of affordable
    housing since the program's inception in 1986. We have built
    more than 250,000 units around the State. So it's a great
    record of accomplishments, but clearly we need to do more. We
    also make sure that every dollar spent is utilized for its
    maximum impact.
        And as a responsible steward of these valuable but limited
    Treasury Funds, we closely monitor these units for compliance
    with all State and Federal regulations. Once the units are
    placed in service, we make sure that the residents and the
    taxpayers get the full benefit of the program. This past year,
    our State legislature gave us the power to levy financial
    penalties up to $1,000 a day against those developers who are
    not keeping their commitments. That's $1,000 a day per
    violation. Accordingly, we'll make sure that those few bad
    actors are firmly removed from the program and that a clear
    message is sent industry-wide that TDHCA will not tolerate
    slumlords. Our ultimate concern is always for the safety and
    welfare of our low-income tenants, and we are proud here in the
    Houston area to be partnered so closely with the City of
    Houston and Harris County in that regard.
        I also wanted to share with you this morning the active
    work we've done in leading Texas' disaster recovery efforts
    stemming from Katrina and Rita. While we appreciate the efforts
    of the entire Congress in assisting Texans, I would be remiss
    if I did not thank you, Madam Chairwoman, along with
    Congressman Al Green, Congresswoman Jackson Lee, Congressman
    Ruben Hinojosa, and Congressman Kevin Brady. So many other
    members of the Texas delegation have been key in making sure
    that we have some resources to assist Texans in need.
        We expect with the dollars we receive, we will serve more
    than 8,000 Texans here in Southeast Texas, including Harris
    County. Shortly after Congress appropriated the funds, Texas
    Governor Rick Perry designated TDHCA as the lead agency for
    administering the funds that Congress has given to help us.
        In May of 2006, we received our first allocation of funds.
    That was $74.5 million, which was split almost evenly between
    housing and infrastructure. The second allocation of funds came
    earlier this year, and it totaled $428.6 million. We're working
    very ambitiously to get those dollars out. Governor Perry
    designated that $60 million specifically would be designated
    for Houston, Harris County, to meet the needs of Katrina
    evacuees. Houston will be using its $40 million of that $60
    million for law enforcement overtime and public safety issues
    associated with the influx of close to 200,000 Katrina
    evacuees. And the City will also be using part of the funds to
    rehabilitate many multifamily developments that are called home
    by Katrina evacuees to ensure that they will have safe and
    decent, affordable housing options. The remaining $20 million
    will be used by Harris County for a myriad of social services
    assistance programs for evacuees, such as crisis counseling and
    medical services. The remainder of the funds are being used
    primarily throughout Southeast Texas to meet the physical
    devastation that has been suffered throughout the 22-county
    area surrounding Houston and heading mostly east.
        But, again, we will continue to report to you and make sure
    those funds are used wisely. We are so grateful that you have
    taken the time to come to Houston, Representative Waters, to
    see this situation here firsthand. We welcome any questions.
        [The prepared statement of Mr. Gerber can be found on page
    60 of the appendix.]
        Chairwoman Waters. Thank you.
        Mr. Celli.

       STATEMENT OF RICHARD S. CELLI, DIRECTOR, CITY OF HOUSTON
              HOUSING AND COMMUNITY DEVELOPMENT DEPARTMENT

        Mr. Celli. Thank you very much for the opportunity to
    appear before you today and present brief remarks relating to
    the unique challenges and opportunities in the City of Houston.
        Two factors create increasing demand for affordable housing
    in Houston: New households forming due to immigration or
    population growth; and pent-up demand for homeless persons or
    low-income households who are enduring substandard housing
    conditions by two or more families sharing one roof.
        According to the 2000 census, about 9,000 households per
    year will be moved into Houston. In addition, 65,000 households
    were reported as overcrowded in the 2000 census and
    approximately 12,000 individuals in the City of Houston are
    currently homeless. Total demand for affordable housing must
    include some accounting for these underserved households. As
    Congressman Green mentioned in his opening remarks, the
    homeless population is a unique and severe problem in the City
    of Houston. We work diligently as a city. We meet every 2 weeks
    as a city, leaders within the city community, to try and solve
    the homeless issue, but we need more dollars.
        Due to the low incomes earned by many Houston households,
    the overwhelming majority of housing units will have to be
    affordable rental units, with less than 10 percent affordable
    single family home units. The under 50 percent of area median
    income, small family submarket is the most underserved in the
    Houston market. Over 27,000 families are rent-burdened, meaning
    that they spend more than 30 percent of their monthly income on
    housing.
        The demand for affordable housing is staggering. My staff
    estimates that, including new arrivals and underserved current
    residents, 2,000 households per year will demand affordable
    housing products. Of these, 1,300 households are projected to
    have incomes below 30 percent of area median income, and 700
    households are projected to fall in the 30 to 60 percent area
    median income. In addition, the Katrina evacuees currently
    living in Houston and benefiting from re-extended housing
    vouchers will eventually need to find housing on their own.
    This will increase our demand further.
        Historically, Houston City programs have invested about $54
    million per year in housing. The City of Houston has worked
    diligently to leverage all available resources, using low
    income housing tax credits, HOME funds, and requiring developer
    equity in outside debt in many multifamily transactions. The
    City of Houston has encouraged private investment in
    redeveloping historic neighborhoods via the Houston Hope
    Program by granting downpayment assistance to low-income
    families purchasing their first home, thus reducing the
    mortgage risk to lenders.
        Houston, like all major cities, works hard to meet the
    needs of its citizens. Meeting all the demands for housing
    would cost approximately $100 million a year. To close this
    gap, additional resources are needed. I assure you, as director
    of housing and community development, I could easily invest 3
    times my current allocation of HOME funds every year and still
    not meet the needs of deserving Houstonians.
        Enactment of the National Housing Trust Fund Act of 2007
    and the related Expanding American Homeownership Act of 2007
    would help the City of Houston by providing more funds to
    benefit low- to moderate-income families both directly and
    indirectly. As a participating jurisdiction, Houston would
    receive some portion of the trust funds intended to create
    150,000 units of affordable housing nationwide each year. The
    requirement that such housing be primarily targeted for
    families with AMI below 30 percent would help those families
    here who have the greatest demonstrated need for housing
    assistance. Restructuring of the FHA program to reduce the need
    for private market subsidy of subprime lending would provide
    some benefit to Houston even though our housing stock is priced
    very affordably. Any product that provides lower cost
    alternatives for low-income households who qualify for
    mortgages is a good product. I applaud the Representatives'
    study of the needs of everyday households and welcome your
    interest in Houston. Thank you very much for having me.
        [The prepared statement of Mr. Celli can be found on page
    57 of the appendix.]
        Chairwoman Waters. Thank you very much. And while I failed
    to announce Mr. Allison, I'd like to call on him now. Mr.
    Horace Allison is a senior vice president of the Housing
    Authority of the City of Houston. I thank you for being here.

      STATEMENT OF HORACE ALLISON, SENIOR VICE PRESIDENT, HOUSING
                    AUTHORITY OF THE CITY OF HOUSTON

        Mr. Allison. Thank you. Welcome to Houston. Chairwoman
    Waters, Congresswoman Lee, and Congressman Green, I want to
    thank you for your tireless efforts in support of affordable
    housing. On behalf of the resident population that we serve, we
    want to thank you for convening this hearing here in Houston.
        The Houston Housing Authority operates about 4,000 units of
    public housing and currently runs a voucher program of about
    15,000 units. We have a waiting list of over 42,000 families
    for those two programs. We opened our waiting list last
    December and it was only open for 14 days. And to give you a
    magnitude of the need, we ended up with 30,000 people in 14
    days wanting to get on the waiting list. This does not include
    people who may have not had the opportunity to or who may need
    housing assistance but who elected not to.
        There's a vast need for affordable housing in Houston. Our
    current utilization rate is 99 percent for the Public Housing
    Program, and 98 percent for the voucher program. In our voucher
    program, we only have a turnover of about 120 units a month,
    which means if you look at that 30,000 waiting list, it will be
    a long time before those families can be served. Hence the need
    for additional vouchers in the City of Houston. The families
    that we serve, typically their income is about $10,000 per
    year, whereas the median income for the City of Houston is
    $61,000 a year.
        How we've been trying to address some of these issues--the
    Housing Authority, several years ago, embarked with HUD's
    participation on the Hope VI program to develop additional
    affordable housing. We received $56 million in Federal funding
    in which we turned around and leveraged into $110 million. We
    did that in partnership with both the private sector, the
    public sector, and the City and State and local entities so
    that we could leverage those funds. Out of that, we created
    over 1,000 units of affordable housing. Rental, multifamily
    rental, single family rental, homeownership opportunities for
    families, inclusive of historic rental and homeownership, and
    the provision of social and community services. The effort
    revived a formerly neglected neighborhood in the near west end
    of Houston. It was done with the help and in partnership with
    various City leaders and departments.
        Mayor Bill White of the City of Houston has formed a joint
    task force comprised of the Housing Authority, Houston Housing
    Finance, and Housing and Community Development to address the
    affordable housing needs here in Houston. It's on the front
    page. In Katrina and Rita, as you're aware, the Gulf Coast was
    devastated. But Houston welcomed the evacuees into the City of
    Houston. Working with the City, working with the County, we
    processed over 60,000 families during a 4-month period of time
    in helping them find shelters, moving from the shelters into
    homes or into multifamily units. It took some 80 of our key
    staff people working 12- to 14-hour days, 7 days a week, for
    over 6 weeks, to address this need. The impact on our current
    program was felt, however, knowing the need for maintaining the
    existence of affordable housing in Houston, we prevailed, and
    our current programs are functioning well.
        Currently under the KDHAP DVP and DHAP program, we manage
    about 1,500 DVP vouchers and we're working on 2,400 DHAP
    vouchers. Our concern when this program ends is the need to
    address those who will not be assisted, i.e., the elderly and/
    or the disabled. There will be a need for additional vouchers
    to address these families.
        Some of the challenges that the Housing Authority faces
    are: this vast waiting list, as I said earlier, 42,000
    families; shortfall in the availability of development funding;
    and operating subsidies at only 80 to 85 percent. And just
    imagine if your household was only receiving 82 percent of what
    you thought would be needed, you can feel the impact of that as
    well as the Housing Authority. So there's an increased need for
    public housing units in the City of Houston. A city of our size
    should have upwards of 10,000 public housing units, and we only
    have 4,000. There's a need for additional funding and support
    to adequately support healthcare, education, and employment,
    and provide supportive services, needs from HUD, simplification
    of the rules and regulations so that Housing Authorities can be
    more proactive in addressing housing needs, reforming the
    adjusted income definition, and something as simple as--for the
    seniors and the elderly, just something as simple as having the
    elderly to be able to provide medical information through a
    copy as opposed to having to go to the doctor to obtain a
    certified copy.
        Chairman, Chairwoman, and committee members, we want to
    thank you for coming to Houston. We want to recognize again
    your tireless efforts in support of affordable housing in
    Houston. And we want to make sure that you're aware that the
    Houston Housing Authority and others in the City are doing
    their best to deliver and create additional affordable housing
    opportunities as we move forward. Thank you.
        Chairwoman Waters. Thank you all very much for your
    testimony. I recognize myself for 5 minutes for questions. I
    think I'll start with Mr. Gerber.
        You mentioned that this legislature provided a 60 percent
    increase in the State housing trust fund. Could you tell me
    what that puts the funding level at and just discuss a bit
    about the mechanism for funding the State trust fund as well as
    the targeted requirements. And I think it was you that I talked
    to earlier. You asked me about the City of Los Angeles housing
    trust fund. I gave you a wrong figure. It's $100 million for
    the City of Los Angeles. I think I was talking with you about
    that. So tell me about yours.
        Mr. Gerber. Sure. I wish I could say ours was anywhere near
    a $100 million. We have historically received about $7 million
    a year from the legislature. Thanks to the efforts of folks in
    this room, it was increased by $5 million. The $7 million that
    has been available remains largely limited to something called
    our bootstrap program. That's--
        Chairwoman Waters. This is for the entire State?
        Mr. Gerber. For the entire State.
        Chairwoman Waters. $7 million?
        Mr. Gerber. $7 million--$12 million. $12 million is the
    total.
        Chairwoman Waters. $12 million is the total?
        Mr. Gerber. $12 million now. It was $7 million, but now it
    has gone up by $5 million.
        Chairwoman Waters. Provided by the legislature.
        Mr. Gerber. The $5 million. And that's the only money.
        Chairwoman Waters. Did you put any of your CDBG money in
    too?
        Mr. Gerber. No, ma'am.
        Chairwoman Waters. No CDBG.
        Mr. Gerber. No CDBG.
        Chairwoman Waters. Do you have any money that's coming from
    the developers to support this fund in any way?
        Mr. Gerber. No, ma'am. That's the only money.
        Chairwoman Waters. So this is the total amount of your
    statewide housing trust fund?
        Mr. Gerber. That's correct. And the $7 million, a little
    over, is largely used again for the bootstrap program, which is
    a self-help, sweat equity program largely done in the Colonias
    along the U.S.-Mexico border.
        Chairwoman Waters. Largely on what?
        Mr. Gerber. Largely sponsoring homes in the Colonias, which
    are areas along the U.S.-Mexico border, that have just
    tremendous needs. It's a sweat equity, Habitat for Humanity-
    like construction program, and we have had tremendous success
    down there using those very limited resources. The $5 million,
    though, that the State legislature has put in, we're trying to
    do a number of very innovative things. And we actually have
    several notices of funding availability out for those funds.
    Our hope is that we can prove that a little bit of housing
    trust fund money can go a long way. And there are opportunities
    to increase home ownership through production in senior
    housing, multi-family housing. There are a variety of different
    homeownership program options that might be available,
    additional programs to provide barrier removable for the
    disabled community and accessibility benefits for the disabled
    community. That has certainly been a key thing.
        We're also using some of those funds for gap financing for
    disaster victims who are not able to quite get into a safe and
    affordable repaired home or new home because they just don't
    have enough money in the current benefit that we have in our
    CDBG program for disaster recovery. So that gap--that missing
    gap is also--we have about $1 million that is going into
    meeting that, those gap financing needs for those folks in
    Southeast Texas as well.
        Chairwoman Waters. Just give me the total amount of State
    assistance for housing for Houston. Tell me basically that in
    addition to your housing trust fund, whether CDBG or HOME
    funds, or any other funds or tax credits, give me an idea of
    what the State does to assist housing in the Greater Houston
    area, in Harris County.
        Mr. Gerber. Sure. Thanks again to our tax credit program,
    which is $42 million statewide, roughly 25 percent of that goes
    here into the Greater Houston area for affordable housing. So
    that's putting real multifamily housing units on the ground,
    either new construction or rehabilitation. In terms of the home
    program--
        Chairwoman Waters. Wait. So going to both nonprofit and
    for-profit developers?
        Mr. Gerber. Yes, ma'am. That's correct. The HOME program,
    the City of Houston is a participating jurisdiction, so they
    receive a direct award of HOME funds. And that gets
    administered by Mr. Celli.
        Chairwoman Waters. That's from the State?
        Mr. Gerber. From the Federal Government.
        Chairwoman Waters. From the Federal--so that is CDBG
    through the State to the local?
        Mr. Gerber. That's the HOME program. The HOME program,
    which can be used for a myriad of purposes, including tenant-
    based rental assistance, homebuyer assistance, or owner-
    occupied rehab. We at the State level manage a pot of about $45
    million in home funds, but it's for largely the rural parts of
    the State, the nonparticipating jurisdictions that aren't big
    enough or sophisticated enough to manage their program on their
    own. Large cities like Houston, of course, have that ability,
    so they receive a direct allocation from HUD for the HOME
    program.
        Our other big program that we have are certainly the first-
    time homebuyer program. We do a tremendous amount of business
    here in the Houston area, not just in Harris County, but in the
    surrounding counties which have large, booming suburbs. I'm
    very pleased that just with our last issuance of first-time
    homebuyer funds, $16 million got used within 30 minutes to
    provide mortgages for families here in the Houston area, first-
    time homebuyer mortgages here in the Houston area. So that's
    another program. And right at the moment, we have $120 million
    in funds available for folks here in Houston as well as
    Statewide.
        Chairwoman Waters. What would say is the poorest area of--
    and maybe the Mayor would like to--the absolute neediest,
    poorest area of the Houston area in your City, say, Mr. Celli?
        Mr. Celli. We have several neighborhoods, Congresswoman,
    that we're focusing on with Houston Hope--the Settegast area on
    the near north side of Houston, Acres Home, and Sunnyside.
    Those are the areas that we're focusing our attention with the
    Houston Hope foreclosure program where we're trying to create
    affordable housing and redevelop these neighborhoods.
        Chairwoman Waters. So what do you do as the City and the
    State combined to try to work together and target funding to
    some of the neediest areas? And how is that realized? What can
    you tell me about a combination of HOME funds, Housing Trust
    Funds, CDBG, and other funds that you've directed? What
    percentages do you put into the poorest areas?
        Mr. Celli. Primarily we work with the State, with the low
    income housing tax credit program. We try and leverage those
    funds to do multifamily projects. Lately we've been focusing
    our efforts on the homeless. We've done just one project that
    we--that just scored number one in the State of Texas, an SRO
    right on the Gulf Freeway in Houston, right as you come in from
    Hobby Airport, where they were awarded low income tax credits.
    And partnered with our dollars two to one, we're going to
    credit about 175 brand new units of single room occupancy.
        Chairwoman Waters. So are you focusing on permanent housing
    for the homeless or basically still emergency shelters?
        Mr. Celli. Still emergency shelters. We have a desperate
    need for permanent housing for the homeless. We've spent our
    initial efforts with rapid rehousing, but with--after the rapid
    rehousing, we need to create some permanent housing in the City
    of Houston along with the commensurate programs to get people
    back on their feet, some support programs. Those cost money,
    and there is a lot of money involved in that.
        Chairwoman Waters. That will be a focus of our committee to
    try and get permanent housing for the homeless. We think that
    this vicious cycle of emergency shelters and people lined up
    has to stop.
        Mr. Celli. We applaud that.
        Chairwoman Waters. Thank you. So we'll be looking forward
    to the efforts put forth here and see what we can do to provide
    some assistance.
        To Mr. Allison, that waiting list that you have is typical
    of what's happening all over the country. And the only way to
    deal with that is what we're attempting to do through the
    Housing Trust Fund, the National Housing Trust Fund, that will
    present some new opportunities for people who need housing.
    Hopefully, as Mr. Green described, through the resources that
    we will get from the GSEs, Fannie Mae and Freddie Mac, and
    Federal Home Loan, we'll be able to make some new money
    available for the creation of new housing units.
        As we look at our public housing, we have to figure out how
    to expand those opportunities and give people some choices. And
    as we look at Hope VI projects, we have to make sure that we
    don't eliminate housing as been done with some of the Hope VI
    projects where they redesigned these projects so that they look
    beautiful and they're wonderful, but they don't tell us what
    happened to the people who get lost after they redevelop the
    housing projects and they reduce the size of those projects. So
    we're going to look out for public housing and for expanded
    opportunities for people who really do need that assistance.
        With that, I'm going to turn to Mr. Green for his
    questions.
        Mr. Green. Thank you, Madam Chairwoman. And I thank the
    members of the panel for being here today. Your testimony has
    been very enlightening.
        Let me start by just asking if we have any persons in the
    audience who are with NGOs or some sort of 501(c)3, some sort
    of entity that is trying to assist with housing? If you are,
    would you raise your hand so that I can just get some sense?
        Okay. We have a lot of people here who are working with
    housing. And this is important. So I would like to ask each
    member of the panel, as tersely as you can, to tell us about
    some of the products that are available for these NGOs so that
    they can benefit from much of what may not be published widely.
    I understand that you have problems in terms of getting your
    information out. You don't have big budgets to PR your
    products. So let's talk about some of the products that you
    have that they can benefit from. And friends, this would be a
    good time for you to take out your pen and your paper. Because
    one of the things that we want to do in Congress is make sure
    that what we know and, to a limited extent some of what we
    don't know, you have an opportunity to know.
        So let me start with you, Mr. Allison. Tell me some of the
    things that NGOs are doing that can be of benefit to them.
        Mr. Allison. We have been partnering with other entities in
    the development of affordable housing.
        Mr. Green. Say that again.
        Mr. Allison. We have been partnering with other entities in
    the development of affordable housing. We don't have an open
    RFP process, but any organization that desires to partner with
    the Housing Authority or trying to obtain assistance through
    the Housing Authority to develop affordable housing is welcome
    to come in. We will sit down with them and evaluate their
    project or their proposal and work with them to try to see if
    we can go forward. We do have some limited capital moneys that
    we are investing, whether it be with a nonprofit or a private
    developer, but that is our process.
        Mr. Green. Are you currently working with not-for-profits
    in developing products right now?
        Mr. Allison. No, we are not partnered directly with a not-
    for-profit.
        Mr. Green. If you have one that will perform some outreach,
    you would be amenable to working with a not-for-profit--
        Mr. Allison. Absolutely.
        Mr. Green. --to develop a product?
        Mr. Allison. Absolutely.
        Mr. Green. All right. Thank you very much. Now, Mr. Celli,
    in giving your explanation, if you would, tell us about the low
    income tax credit just briefly, because we have a lot of NGOs
    that can benefit from that kind of intelligence in terms of how
    that can work to develop affordable housing.
        Mr. Celli. Well, a low income housing tax credit is the
    best way to create quality affordable multifamily housing for
    low income individuals as well as seniors. It basically
    provides a Class A property with Class C rents. No other
    vehicle can leverage dollars the way that does, and we like to
    use our Federal dollars in partnership to leverage the low
    income housing tax credits.
        Generally, we can do that sometimes two and sometimes three
    to one. So what that really relates to, it costs about $100,000
    to build a multifamily apartment unit that's a quality,
    livable, decent place for people to live, but it only debt
    service about $30,000 of that cost. So low income housing tax
    credits, along with our dollars, can bring down that
    affordability for our senior citizens as well as for our low-
    income individuals.
        Mr. Green. For further explanation, that low income tax
    credit means that there is a tax certificate that is made
    available to someone that we'll call a developer. Is that a
    fair statement?
        Mr. Celli. Yes, it is. And then it's sold to investors.
        Mr. Green. Let's just make that clearer. When we say that
    it's sold to investors, that means that this developer will go
    out and find an investor who can benefit from a tax break?
        Mr. Celli. Yes, sir.
        Mr. Green. And he then will partner with him, and he'll
    receive moneys from the investor that he can couple--that the
    investor will benefit from the tax break, so he's willing to
    give the money to the developer to develop property?
        Mr. Celli. Yes, sir.
        Mr. Green. And when this property is developed, of course
    they all go to the bank. But it means that some not-for-profit
    or some entity we'll call a developer has had the opportunity
    now to build this low-income housing.
        And tell me if we have some NGOs that are participating in
    this process. Do we have some?
        Mr. Celli. Yes, we do.
        Mr. Green. Okay. Now for the benefit of those of you who
    are listening and you want to get into the business of helping
    to develop affordable housing, this low income tax credit is an
    excellent means by which you can get involved. It really
    provides money from the private sector by virtue of a tax break
    that is accorded. Is that a fair statement, Mr. Celli?
        Mr. Celli. Yes, it is.
        Mr. Green. All right. Do you have another product that you
    can tell us about briefly? Because my time is quickly passing.
        Mr. Celli. The City of Houston just provided $700,000 to 10
    different community development corporations to construct 10
    houses in the Houston Hope neighborhoods. Those are the
    neighborhoods that I mentioned earlier, like Sunnyside, Acres
    Home, Settegast, and Independence Heights. That's a single
    family program where we're encouraging new homes by community
    development corporations with our product. Along with that,
    we're coupling our down payment assistance program where for
    the homeowner, you can buy down the mortgage up to $30,000 in
    the Houston Hope neighborhoods.
        Mr. Green. And for additional information on these products
    and others that you may have, how would people access the
    intelligence?
        Mr. Celli. Call me. 713-868-8444.
        Mr. Green. Now, if you did not get that number, raise your
    hand--you need to repeat it.
        Mr. Celli. 713-868-8444. That's a direct line to my office.
        Mr. Green. Thank you, Mr. Celli.
        Mr. Gerber. In the interest of time, I'll just add on. The
    tax credit program, that is a very complex program. We were
    very pleased about 3 or 4 months ago to do a--actually less
    than that, an event with Congresswoman Jackson Lee, a workshop
    with members of the faith-based community who are interested in
    participating in that program. It is a very complex and
    challenging program that really is something that requires some
    degree of expertise. And many of the folks in this room have
    those skills. We would very much welcome a chance to do another
    workshop, maybe even partnered with the City of Houston and the
    County under your good offices. Let's try to piece that
    together to invite folks in this room to come together and
    learn in a, you know, full-day workshop, which is really what
    it takes to get, I think, a grounding of some of the benefits
    and the risks of going into this. Because building a 250-unit
    apartment complex is not something that one wants to go into
    lightly. There's a lot that is involved. So we welcome that
    chance. And, of course, we really value the leveraging that
    goes on with locals in order to make those tax credit deals
    work in places like Houston. So I would just focus really on
    that program.
        Mr. Green. Well, I want to thank you for volunteering and
    being accessible. I think we'll take you up on that offer and
    have that workshop. Absolutely. There's a competitive side to
    the low income tax credit program. Are you prepared to address
    that, or should I go to the next speaker?
        Mr. Gerber. Well, there are really two tax credit programs.
    There's a 4 percent tax credit program, and then there's the 9
    percent tax credit program. It's the 9 percent tax credit
    program that has the deepest subsidy and is the program that is
    the most competitive. And, you know, we're oversubscribed for
    those funds 3 to 1.
        In contrast, the 4 percent tax credits are generally
    layered with a bond transaction. And the Harris County, you
    know, Housing Finance Corporation of Southeast Texas has a
    finance corporation. All are bond issuers. The Texas Department
    of Housing and Community Affairs is a bond issuer. And then we
    will layer onto it 4 percent tax credits. There are plenty of
    those. It's based on the volume counts the State receives to be
    able to do an additional deeper targeting to make the economics
    of the deal work. So for both a bond transaction, layered with
    4 percent credits, or the 9 percent competitive program, I
    would propose that we do a workshop that would link both of
    those and talk about both of them. Because in many cases, in a
    City like Houston, a bond transaction makes a lot of sense at
    those 4 percents. You can make the economics of it work as you
    can with the 9.
        Mr. Green. Ms. Lucinda Daniels will contact you about it.
        Mr. Gerber. I'll look forward it.
        Mr. Green. Mr. Ozdinec, if you can respond quickly, because
    my time is very limited.
        Mr. Ozdinec. Sure, Congressman. As you know, the
    Department's annual budget is about $32 billion a year. A
    little more than half of that is the Housing Choice Voucher
    Program. That's the engine that drives the rental assistance
    market pretty much across the country. Our ambassadors to our
    programs are literally public housing authorities and our
    cities. All of our funds flow through the cities. But there are
    things that can be done, obviously, in the Section 8 program
    for the nongovernmental folks out here that do small-scale
    development. They can reach out to their Public Housing
    Authority. Each Public Housing Authority has the ability to
    project base their vouchers. To the extent that a Housing
    Authority is looking for properties or rental units in--
        Mr. Green. Let me just intercede quickly. Explain that
    term, ``project base.'' Many people may not understand exactly
    what that means. That's an important term.
        Mr. Ozdinec. I'll give you an example, a hypothetical. If a
    Housing Authority had 1,000 vouchers in their program, they
    could take the budget authority for up to 20 percent of that
    voucher program and solicit proposals from developers,
    nonprofit or otherwise, to provide rental units through the
    project-based program. And they would sign a 10-year contract
    with the Housing Authority to provide that unit for waiting
    list families for that period of time.
        That helps to support some of the deals that Mr. Gerber
    discussed. The 4 percent deals are tough to do, but often when
    there's project basing associated with it, it's the grease that
    makes the wheel run.
        Mr. Green. Thank you very much. Madam Chairwoman, I'd like
    to submit for the record a statement from Council Member Adrian
    Garcia. Without any objection, I offer it at this time.
        Chairwoman Waters. Without objection, it is so ordered.
    Thank you very much. Ms. Jackson Lee?
        Ms. Jackson Lee. Madam Chairwoman, thank you very much. And
    to all the witnesses, let me thank you for very instructive
    testimony. Might I just repeat, because I think we have already
    acknowledged the leadership of Chairwoman Waters, but let me
    repeat these numbers that are so striking.
        I want to pose a line of questioning that hopefully maybe
    will change attitudes: 30,000 people came on the waiting list
    in 14 days; 42,000 are waiting for Section 8 vouchers. I know
    we can do better here in Houston. We can do better. And I thank
    you for that instructive information, because we have to find a
    way to move toward a corrective action. And so let me just
    quickly--Mr. Ozdinec, let me quickly just refresh your memory.
    As you know, about a decade or so ago, there was a mindset that
    suggested that large structures such as Cabrini-Green in
    Chicago, and some others in Atlanta, were not the way to go in
    terms of public housing. Unfortunately, Houston got caught up
    in the overall umbrella where Houston was not high density. And
    so my question to you, listening to Mr. Allison and the crisis
    we have here, that's Section 8, but he also mentioned the need
    for public housing units. We have only 4,000. We've had 4,000
    for decades. We now are minimally needing 10,000. What
    policies, because of the policy that I've just enunciated--you
    worked in New Orleans, you worked in Chicago and Atlanta--can
    be altered to work with a city that really needs these public
    housing units?
        Mr. Ozdinec. Thank you. And I appreciate the question. The
    thing that I think is the most important lesson that we could
    have learned through the 1990's through the Hope VI program, if
    there's one very important lesson, is partnerships. Up until
    that point, Housing Authorities were doing public housing
    developments on their own through direct appropriations from
    Congress to build public housing projects. I think in the last
    decade, we've gotten housing authorities familiar with the
    terms that many of the people in this room are familiar with,
    the difference between a 9 percent and a 4 percent credit.
        What do I need to do to be a good partner to a private
    developer so I can participate as part of a development process
    where, for example, a 250-unit multifamily development can
    support perhaps 100 very-low-income families as part of the
    public housing program. We have, as part of that new
    development process, instituted ways for nonpublic housing
    authorities to own public housing through long-term rental
    assistance agreements and other mechanisms that are available
    to take what were traditionally operating subsidies to support
    market rate and tax credit units combined together to generate
    additional low rent public housing units in the context of a
    larger community.
        To the extent that housing authorities can take those tools
    that they've learned on financing, mixing incomes, mixing
    financing tools, partnering with developers who develop
    affordable public housing across the country, and being a good
    steward and a good partner for those sorts of deals, using
    their Section 8 program potentially to project base, those are
    all tools, I think, that we've learned through the 1990's. To
    the extent that the Congress decides to appropriate any
    additional development funds for the Department, my
    recommendation would be for those funds to be used very similar
    to the way we use the tax credit equity both on the 9 percent
    and the 4 percent credits; that developers submit proposals--
        Ms. Jackson Lee. I'm sorry. My time is limited.
        Mr. Ozdinec. I apologize.
        Ms. Jackson Lee. If you can wrap up.
        Mr. Ozdinec. Well, that's it. I mean, that would be my
    number one lesson, partnerships and a variety of funds being
    pulled together to create partners and stakeholders around
    affordable housing developments.
        Ms. Jackson Lee. I guess the question I would have is
    whether or not we have the ability through legislation or
    otherwise to go back to those underutilized communities that
    never had the density and let them build public housing. Is
    that a possibility?
        Mr. Ozdinec. If the money is there, Congresswoman, I think
    the answer is yes to that. I think the method of development
    now has changed from 30 years ago to something more akin to
    what you see in Atlanta and some parts of Chicago now.
        Ms. Jackson Lee. Thank you. Let me ask Mr. Celli on another
    issue that I'm very keen on and, Mr. Ozdinec, if you can
    respond to this as well, and that is the question of senior
    repair housing under your community development funding. It is
    in your consolidated plan. I understand the program is, if you
    will, suspended. The question is the ability to be able to
    address senior repair programs in a way that meets the needs in
    this community. And Mr. Ozdinec, if you can speak from a
    housing perspective--from HUD's perspective in the utilization
    of these funds, so what we call senior repair reconstruction,
    as to the viability of that. And why don't I go to you first
    and then Mr. Celli, please.
        Mr. Ozdinec. Thank you, Congresswoman. That is not my
    account, unfortunately.
        Ms. Jackson Lee. I understand.
        Mr. Ozdinec. But I met with your staff this morning, and I
    will definitely get them in contact with our Deputy Assistant
    Secretary who runs the CDBG program. We can have a conversation
    about that to ensure that your concerns are being met.
        Ms. Jackson Lee. Mr. Celli.
        Mr. Celli. We are in the process of going back and looking
    at about 1,800 homes that are required by us, by HUD, to go
    back and reinspect homes that we did senior repair to going
    back to 2001 through 2005. And we have to go back and reinspect
    those houses and fix them if they need to be fixed.
    Unfortunately, we have a waiting list of about 2,000
    individuals who are on that that are in need of repair work.
    And that list was created when Federal funds were cut off to
    the City of Houston in 2005. And so we're in the process--on
    that 2,000 waiting list, we're looking at, I believe, 200 of
    those houses right now. And we're beginning to try to whittle
    down that waiting list.
        Ms. Jackson Lee. So, Mr. Ozdinec, we can work with you to
    correct this seemingly heavy burden on the City of Houston,
    which is looking behind and not forward, the crisis of senior
    housing and disabled housing on rehab and reconstruction, maybe
    we can move along, because it really is at disaster proportions
    in terms of seniors and the disabled not being able to have
    home repair because the work that the City is now doing is work
    that is fix-up work, meaning going back to try and correct
    ills. And I know there should be a parallel track of them being
    able to fix the problems of the past and report to HUD but move
    forward on a program that is literally now stagnated and people
    are suffering.
        Mr. Ozdinec. Yes, ma'am.
        Ms. Jackson Lee. Thank you.
        Chairwoman Waters. Thank you very much. The Chair will
    grant herself an additional minute because, as we walked in, we
    were handed pictures from some of the citizens about homes that
    were built, developers that were contracted with by the Housing
    Authority, that are falling apart. Who is responsible for
    making these homeowners whole for these homes that have been
    paid for by HUD, I'm told?
        Mr. Allison. I would need to see the properties. The
    Houston Housing Authority is only responsible for homes in
    Houston. We are not responsible for homes in San Antonio.
        Chairwoman Waters. Well, without looking at these
    particular ones--I'll give you a copy of these, are you aware
    of this problem?
        Mr. Allison. No, I'm not aware that--of the problems with
    some homes that we have developed that are in disrepair. Not at
    all.
        Chairwoman Waters. All right. Are you going to stick around
    after the panel?
        Mr. Allison. Yes, ma'am.
        Chairwoman Waters. Very good, because I think we have some
    people here who will describe it in more detail to us. With
    that, I think--yes?
        Ms. Jackson Lee. May I read just two questions into the
    record--
        Chairwoman Waters. Yes, you may.
        Ms. Jackson Lee. --just very quickly? This is for the
    Secretary for HUD. Let me ask for a response to a series of
    letters that I have written regarding the Allen Parkway Village
    and the nonfulfillment of the Hope VI requirements that were
    agreed to in the reconstruction and rehab of Allen Parkway
    Village. The second one is the issue of HUD programs that may
    be applied in a discriminatory fashion as relates to low-income
    residents, particularly in the Fourth Ward area. And I'd
    appreciate it. We have a series of letters in to you on that
    issue.
        Mr. Ozdinec. I'll look into that, ma'am.
        Chairwoman Waters. They will be included in the record. The
    Chair notes that some members may have additional questions for
    this panel which they may wish to submit in writing. Without
    objection, the hearing record will remain open for 30 days for
    members to submit written questions to these witnesses and to
    place their responses in the record. This panel is now
    dismissed. I would like to welcome our second panel. Thank you
    very much. I will call on Mr. Green to introduce the second
    panel.
        Mr. Green. Thank you. And as you're coming forward, I will
    start the introductions because time is of the essence and we
    want to cover as much as possible. So panelists, if you would,
    kindly move forward as expeditiously as possible.
        Our first witness will be Mr. John Henneberger. He is the
    director of the Texas Low-Income Housing Information Service.
    This organization provides a great service in terms of
    statistical information. We are honored to have Mr. Henneberger
    with us.
        Our second witness is Mr. Robert Muhammad, the chief
    executive officer of ACTION CDC; they very much involved when
    the Katrina survivors were coming to the City and in need of a
    multiplicity of services. They were, of course, there to be of
    assistance.
        Our third witness is Ms. Debra Junor, a member of the Texas
    Tenants' Union. She, I believe, has testified in Washington,
    D.C. If not Ms. Junor herself, we've had a member of the
    organization to testify before us in Congress.
        Our fourth witness is Ms. Toni McElroy, the president of
    Texas ACORN. Texas ACORN has been to Washington many times on
    behalf of Katrina survivors, and we're honored to have Ms.
    McElroy with us today.
        Our fifth witness is Mr. Daniel Bustamante, the executive
    director of the Greater Houston Fair Housing Center, a long-
    time community activist and champion for persons who are
    suffering from homelessness.
        Our sixth witness is Mr. Gordon Quan, founding partner of
    Quan, Burdette and Perez, here today on behalf of the National
    Coalition of Asian Pacific American Community Development, also
    shown as CAPACD.
        And, finally, we have Mr. Manuel Lopez, the housing
    director of the Tejano Center for Community Concerns. I would
    add also that Mr. Quan is a former city council person--I
    neglected to say this--who chaired the Housing Committee for
    the City of Houston. And Mr. Lopez has been involved in this
    community for some time as well. I don't see him currently; but
    if he does arrive, of course we will hear from him. With this
    said, Madam Chairwoman, I yield back to you.
        Chairwoman Waters. Thank you very much. We will start with
    Mr. Henneberger. We will recognize you for 5 minutes.

     STATEMENT OF JOHN HENNEBERGER, CO-DIRECTOR, TEXAS LOW INCOME
                      HOUSING INFORMATION SERVICE

        Mr. Henneberger. Thank you, Madam Chairwoman, and members
    of the subcommittee. I want to thank you for the opportunity to
    be invited to testify today. I'm John Henneberger. I'm the
    director of an NGO that undertakes education, research, and
    advocacy concerning the low-income housing and community
    development needs of Texans. Madam Chairwoman, beyond the
    course of this hearing, I would urge the committee to help us
    shine the light on the problems and challenges that have been
    encountered with providing housing assistance to the 75,000
    Texas families who lost their homes or had their homes severely
    damaged by Hurricane Rita. We are coming to a train wreck
    regarding this program because of a lack of adequate funding
    and the fact that many of the poorest people who had their
    homes destroyed by Hurricane Rita in Texas stands not to be
    able to receive any housing assistance because of the shortage
    of available funds, but that is a topic for another day.
        And today I would like to first begin by talking to you
    about the current state of affordable housing in Houston, which
    I can best characterize as a worsening crisis. There are four
    trends that highlight the critical housing challenges that face
    Houston; first of all, the large share of Houston residents who
    rent rather than own. Madam Chairwoman, it is counterintuitive
    to those of us in Texas who are very proud of our independence
    and our ownership to find that we are 41st among the States in
    homeownership. And it is deeply distressing to find that
    Houston is 57th among the large U.S. cities in terms of
    homeownership. We are 22 percentage points below the national
    average of homeownership here in Houston. And we are 10 percent
    below the rate of homeownership of central cities in the United
    States.
        So Houston is a profoundly troubled city in terms of its
    extremely low rate of homeownership. Houston's rate of
    homeownership is lowest among all the major cities in the State
    of Texas. We also have a very large share of renters who pay
    too much of their income for rent and utilities--36 percent of
    all the renters in Houston have incomes below $20,000. And many
    of these, as I think you have already well summarized in
    statistical data, are severely rent-burdened; 140,000
    households in the City of Houston with severe rent burdens. I
    provided you 20 pages of testimony which provides you detailed
    statistics, so I won't go into all of the details here.
        The fourth characteristic trend in Houston is the shortage
    of rental housing to the low-income families who need that
    housing. And the City has, based on our estimates of the 2005
    American Community Survey, a deficit of 49,323 homes for
    extremely-low-income families, that is, families below 30
    percent of median family income. I provided you in my testimony
    a breakout by congressional district. And those congressional
    districts which represent the Greater Houston area have a
    deficit of 108,000 homes for families with incomes below 30
    percent of median family income. The crisis is truly
    astronomical.
        The fourth trend is the sizable gap between the
    homeownership of the City of Houston and its suburbs. This gap
    is 23 percent. The ratio of Houston homeowners to suburban
    homeowners is 23 percent lower in the City of Houston than it
    is in the suburbs. And this is in excess of national trends of
    major metropolitan areas and their suburbs.
        And, finally, government housing subsidies, as Ms. Jackson
    Lee has explored with a previous witness, in Houston are
    disgraceful. And the government housing, in essence, has to
    provide the safety net for the poorest families in most cities.
    In Houston, the rate is substantially below that of most of the
    rest of the country. Houston has the smallest number of per
    poverty population--smallest number of Section 8 units and
    public housing units per the number of people in poverty of any
    of the 20 largest cities in the country, with the exception of
    Detroit and Phoenix. We are well below the rate. We have only
    one Section 8 and public housing unit for every 22.5 persons in
    poverty in this town. That is that a disgracefully low rate.
    All of these make for a major affordable housing crisis in
    Houston. And then came Hurricanes Katrina and Rita, and things
    suddenly got a whole lot worse.
        I'll briefly summarize a few of the challenges that the
    City of Houston and the surrounding community have faced in
    meeting the housing needs of Katrina and Rita evacuees, first
    and foremost of which is that Texas has received grossly
    inadequate levels of funding for hurricane survivors for
    housing assistance. The total amount budgeted currently for
    assistance for Katrina evacuees in this City, which received by
    far the largest number of Katrina evacuees of any city in the
    country, is only $60 million.
        Now, of that $60 million, in our opinion, the City made a
    poor choice to spend a large portion of that money for
    additional policing and for reimbursement of various costs the
    City has incurred. We believe that if you only have $60
    million, the first people in line ought to be the people who
    were hurt and lost their homes. And the government ought to
    stand behind them. The housing programs, furthermore, that we
    have available, housing resources that we have available--the
    other housing resources we have available is largely limited to
    the Low Income Housing Tax Credit Program. And Texas did get an
    allocation from Congress of additional funds under the Low
    Income Housing Tax Credit Program. But the Tax Credit Program
    cannot serve people at the income levels of the average Katrina
    and Rita evacuee. They just cannot afford those rents. And, in
    fact, a recent market study by the Texas Department of Housing
    and Community Affairs has shown that Houston is actually
    overbuilt with tax credit units of 60 percent of median family
    income while we have 140,000 plus families below 30 percent of
    median family income who are paying more than 50 percent of
    their income for rent. Texas came together and submitted a plan
    for long-term housing recovery and submitted it to the
    President in 2006, which I've attached to my testimony.
    Unfortunately, those specific recommendations have largely not
    been provided for.
        I know my time is up, and I'll briefly--I'll move quickly
    to our specific recommendations from that letter. First of all,
    if Houston is going to make it, it's going to need substantial
    new Section 8 Housing Choice Vouchers, and I don't know exactly
    where they're going to come from given the budget situation the
    way it is. The combined organizations which looked at the Rita
    and Katrina problem estimated that Texas cities all together
    needed 36,000 incremental additional Section 8 vouchers in
    order to deal with the Katrina and Rita population that we've
    had.
        We need an additional, in our estimate, $97.5 million of
    low income housing tax credits, but only if we can get that
    coupled with a rules waiver which will allow the State issuing
    entity to permit the State to fund a portion of the apartments
    within each development at a higher level than the 9 percent
    credits. In other words, use the total cap of authority that
    Congress would give the State for low income housing tax
    credits but allow them to enhance the subsidy so we can get
    some units at the 40 percent of median family income rate,
    because we are only able effectively to generate at the upper
    50 percent and 60 percent of median family income rate with tax
    credits.
        Chairwoman Waters. Mr. Henneberger, is all of this in the
    attached testimony that you've given us?
        Mr. Henneberger. Yes, ma'am, it is. And I thank you very
    much for the opportunity to testify before you today.
        [The prepared statement of Mr. Henneberger can be found on
    page 71 of the appendix.]
        Chairwoman Waters. Thank you. And I'm hopeful that you will
    make sure that the plan that you alluded to that was presented
    to the President about how to fix some of this is not only made
    available to us but you will perhaps even, at the invitation of
    Mr. Green, come to Washington and work with us on that.
        Mr. Henneberger. Thank you.
        Chairwoman Waters. I appreciate it very much. And I'm
    sorry. We're going to have to move on in order to get to
    everybody's testimony in the time that we have been alloted.
    Mr. Muhammad.

     STATEMENT OF ROBERT MUHAMMAD, CHIEF EXECUTIVE OFFICER, ACTION
                   COMMUNITY DEVELOPMENT CORPORATION

        Mr. Muhammad. Chairwoman Waters, Representative Green and
    of course my own representative, Sheila Jackson Lee, I am
    Robert Muhammad. I'm the founder and CEO of ACTION Community
    Development Corporation. I would like the record to reflect,
    Madam Chairwoman, that I am being joined today by Ruqayya
    Gibson who is our executive director, and Sadiyah Evangelista,
    who is a board member and our general counsel for ACTION CDC.
        I hold a master's degree and I am currently beginning the
    dissertation phase in my Ph.D. work in the field of urban
    planning and environmental policy at Texas Southern University
    here in Houston. I have served as a student in the ministry and
    a community servant in Houston for over 20 years.
        ACTION CDC's mission is to empower low- and moderate-income
    individuals, families, and neighborhoods. Our motto is,
    ``Improving Our Nation One Neighborhood at a Time.''
        Houston-- Just some background, Madam Chairwoman. Houston
    is a nonzoned, low regulation, market-driven, developer-
    friendly city. Houston's cost of living is relatively low, as
    you noted, in comparison to California. When rental cost and
    unit availability are the variables used in determining housing
    affordability, one could reasonably conclude that there's no
    shortage of affordable housing stock in the City of Houston.
    However, a more thorough examination will reveal that there is
    a shortage of safe, hazard free, environmentally sound, energy-
    efficient, handicap accessible, senior citizen and family
    friendly affordable housing, conveniently located near transit,
    decent schools, and job centers.
        In Houston, for-profit developers would gladly build
    affordable housing if it was in their best interest. Land
    acquisition and carrying costs, predevelopment expense,
    construction, and marketing for sales and rental dictates that
    each project in its highest and best use results in the highest
    return on investment. Therefore, housing stock in Houston is
    built--or affordable housing stock in Houston is built by small
    for-profit developers or nonprofits or is the result of
    cyclical market forces that make housing units available
    because they cannot reasonably command market prices without
    major reinvestment and redevelopment.
        I just want to go through the challenges of meeting the
    housing needs of Katrina evacuees, and then I will, if time
    allows, tell you the projects that ACTION is working on in
    terms of building some housing. After Hurricane Katrina, ACTION
    CDC provided housing counseling to 1,400 Katrina families,
    financial recovery counseling to 1,120 families, case
    management services to 916 families, employment services to
    1,620 families, food services to 5,090 families, and
    transportation assistance to 2,050 families. We have provided
    $172,164 to families in unmet needs assistance from the long-
    term recovery committee of Houston, $85,000 in direct financial
    assistance, $240,000 in financial assistance through the
    American Red Cross. Our staff of eight hard-working case
    managers includes four Katrina evacuees.
        Now, according to a recent statistic, nearly 3 years after
    Hurricane Katrina, an estimated 100,000 survivors still reside
    in Houston and have no concrete plans to leave and return to
    New Orleans. Many are elders and they are losing hope,
    suffering from prolonged mental anguish and/or dying.
        Another challenge is that in assisting 30 percent of the
    survivors who are elderly or disabled, with meeting the long-
    term needs, the survivors who were able to live off of a $600
    disability check in New Orleans cannot do so in Houston due to
    our cost of living. And they cannot do so in New Orleans any
    longer because the cost of living there has doubled since the
    hurricane. According to a recent Zogby poll, a large number of
    survivors are currently employed, but 70 percent earn less than
    $25,000 per household. Many survivors that we have been engaged
    are living two and three families to a household, which
    contains 9 to 18 individuals per apartment. The constant
    instability in the FEMA housing program has had a negative
    effect on the mental health of survivors. For the past 2 years,
    ACTION CDC has made it our priority to assist the survivors
    with recovering and achieving self-sufficiency.
        The HUD-funded Disaster Housing Assistance Program
    administered jointly through the City of Houston and Harris
    County Housing Authorities will not help every survivor. There
    are an estimated 25,000 households in Houston not covered by
    DHAP, and at least 50 percent of those households need
    additional assistance. This is a complex situation, meeting
    housing and human needs, will most certainly require patient
    pragmatic, holistic case management. And funding to provide
    these services haves to be adequate and ongoing.
        In terms of tools that are needed to increase and preserve
    affordable housing and our position on the National Housing
    Trust Fund Act of 2007, H.R. 2895, let me say it like this to
    this distinguished panel subcommittee. Nonprofits in a
    nonzoned, low regulated, market-driven, developer-friendly city
    such as Houston are at a distinct disadvantage. Sometimes it
    feels like we're being asked to make brick without straw. In
    order to increase and preserve affordable housing, we request
    that you consider the following.
        Continued and increased access to funding, programs such as
    HOME and Community Development Grants are critical to
    nonprofits to be able to design, build, and manage quality
    affordable housing in the communities we serve. Operating funds
    for Certified Housing Development Organizations is equally, if
    not more, important because it frees the nonprofit to focus on
    project delivery versus a preoccupation with seeking funds to
    cover related overhead. Funds for staff, consultants, and
    quality training are important to building the internal
    capacity necessary for continual project success.
        Transparency and clarity of process has already been
    stated. Federal and State and City entities should simplify
    processes and documentation requirements.
        Land acquisition funds, nonprofits cannot build or preserve
    affordable housing stock if we cannot assemble parcels near job
    centers, transit, or in low-income areas that are going through
    gentrification. Land cost normally should not exceed 20 percent
    of one's total project cost. Nonprofits need gap land
    acquisition funding in order to build affordable projects that
    would otherwise be impossible under highest and best use
    analysis.
        Lastly, we need predevelopment funds. Nonprofits cannot
    properly assess the feasibility nor deliver affordable housing
    projects without competent, professional expertise. Private
    lenders will not participate in projects that are not packaged
    properly or fail to cash flow. ACTION predicts that energy
    usage and expense along with public safety will become major
    determinants of housing affordability in the future. Energy
    efficient ``green'' building and safety through design programs
    increase cost during the development phase. However, these
    predevelopment expenses increase development sustainability and
    property value over the life of the project.
        I close with this. ACTION CDC fully supports the National
    Housing Trust Fund of 2007 because it will provide increased
    funding and clear benchmarks for achievement. The addition of
    significant funds will be tremendous in its impact on
    underserved communities. In a major metropolis such as Houston,
    new and existing nonprofits need to be positioned to assist
    government in meeting our low-income population's needs. We see
    H.R. 2895 as a wise use of taxpayer funds. H.R. 2895 helps
    deconcentrate poverty by allowing nonprofits to offer quality
    workforce housing to middle class first responders, teachers,
    and other public employees. It is good for nonprofits because
    it has the potential to help create innovative affordable
    housing developments that are mixed income, mixed use,
    transportation oriented, environmentally sound, energy
    efficient, hazard mitigated, safe, handicapped accessible and
    financially feasible. May God bless you for your concern for
    the poor and less fortunate. On behalf of the Board and staff
    of ACTION CDC, thank you in advance for your invitation and
    consideration of our testimony.
        [The prepared statement of Mr. Muhammad can be found on
    page 110 of the appendix.]
        Chairwoman Waters. Thank you very much.
        I'd like to ask the other members of the panel to please
    summarize your testimony. We're going to try to wrap each of
    your presentations up in about 4 minutes. We allowed the first
    two to go far beyond the 5 minutes, because I know they have
    been waiting a long time to tell somebody about what is going
    on and what the needs are. I think they have done a pretty good
    job of kind of identifying what the needs are, so I'd like you
    to just add to it as quickly as you possibly can, and then
    we'll give the members an opportunity to ask some questions. We
    will then have to catch planes to go back to Washington to
    vote. Thank you very much.

         STATEMENT OF DEBRA JUNOR, MEMBER, TEXAS TENANTS' UNION

        Ms. Junor. Good morning, Congresswoman Waters, Congressman
    Green, Congresswoman Jackson Lee, and members of the committee.
    My name is Debra Junor, and I'm here of behalf of the Texas
    Tenants' Union, a nonprofit tenants' rights organization which
    empowers tenants through education and organizing to protect
    their rights, preserve their homes, improve their living
    conditions, and enhance the quality of life in their community.
    I am a former tenant of a HUD-assisted apartment complex, a
    former HUD-funded VISTA volunteer, and a former tenant
    organizer for the Texas Tenants' Union.
        The HUD properties I have worked in and will discuss today
    are privately-owned apartment complexes that either have HUD-
    insured loans or project-based Section 8 Housing Assistance
    Payments contracts, or both. In the 1960's and 1970's, HUD
    encouraged private developers to build affordable housing
    through low-interest HUD-insured loans. In exchange, the owners
    were required to keep rents affordable to low- and moderate-
    income people.
        In the late 1970's and early 1980's, HUD began providing
    additional subsidies to some of these developments and created
    new apartment complexes with the project Section 8 program.
    This program provided great affordability to low- and
    extremely-low-income people similar to the public housing or
    Section 8 voucher program.
        In the mid 1980's, some owners began paying off these HUD-
    insured loans which released them from the obligation to
    provide affordable housing. One of the first prepayments in the
    country occurred in Dallas, Texas, where the apartments were
    demolished and replaced with a 17-screen theater. At that time,
    there was no Federal program designed to keep the properties
    affordable and no protection at all for the residents.
        I'm going to skip a whole lot because of the 4 minutes. The
    Texas Tenants' Union participates in the Preservation Working
    Group, which has a number of recommendations:
        Provide adequate appropriations to renew Section 8
    contracts. HUD's failure to request appropriate appropriations
    is a huge threat to the success of preserving this housing. It
    is essential for Congress to fix this problem very soon. TTU is
    working with a property in South Texas now that is likely the
    casualty of this fiasco.
        Strengthen the mark-to-market program. Mark-to-market has
    generally been an effective tool for preserving and improving
    Section 8 housing; 134 properties in Texas are involved in this
    program, including nine in Houston. At least two dozen Houston
    properties could still benefit from mark-to-market
    restructuring in the reforms pending in H.R. 3965.
        Amend H.R. 3965 to direct HUD to fund the technical
    assistance programs to tenants. Expiring subsidies can have a
    drastic impact on residents. And tenants can play a critical
    role in determining the outcome of these properties. Please
    include the amendment that was submitted in the National
    Alliance of HUD Tenants testimony on mark-to-market last week.
        Enact a Federal first right of purchase. This could be a
    very useful tool in getting at-risk properties under new
    ownership willing to keep the subsidies in place.
        Ensure vouchers are provided for all families and units
    when properties are not preserved. Too many low-income families
    have fallen through the cracks as subsidized properties convert
    to market-rate housing.
        Empower tenants to enforce their rights when HUD
    enforcement is lacking.
        Provide HUD with the direction to save troubled properties
    and other at-risk housing through the enactment of H.R. 44. Our
    written testimony elaborates on the recommendations. Thank you
    for giving me the opportunity to testify on these issues.
        [The prepared statement of Ms. Junor can be found on page
    93 of the appendix.]
        Chairwoman Waters. Thank you so much, Ms. Junor.
        Ms. McElroy, thank you for being here. We are very much
    aware of the work of ACORN all over the country. You made your
    presence known in Washington.

           STATEMENT OF TONI McELROY, PRESIDENT, TEXAS ACORN

        Ms. McElroy. Okay. Thank you, Chairwoman Waters,
    Congressman Green, and Congresswoman Jackson Lee. Thank you.
    I'm glad to have the opportunity to testify today about the
    affordable housing needs of low-income residents in the City of
    Houston. I'd just like to skim over some of the challenges of
    affordable housing needs in this City as well as the challenges
    of low-income families to achieve and maintain homeownership,
    the lack of protection for renters, the remaining long-term
    housing needs of Katrina survivors which has been documented
    today, and finally some recommendations to enhance the
    availability of affordable housing.
        There's a shortage of affordable housing construction
    within the City. The developers are building affordable
    housing, but it's outside of the City limits. Many times they
    are putting minority residents, outside of the City of Houston
    where there's no public transportation, where there's no
    healthcare facilities, where there are few, if any, job
    centers. So our neighborhoods are being gentrified. And the
    infrastructure is being improved, but the traditional residents
    are gone, so we don't benefit from that at all.
        Third Ward is an example of such a community. Let me talk a
    little bit about our predatory lending and housing campaign. We
    have issued a report called ``Foreclosure Exposure'' which
    examines the Home Mortgage Disclosure Act data and talks about
    what's happening right here in Houston. African-Americans were
    issued 26 percent of all the high-cost home purchase loans in
    Houston in 2006, but only 6.7 percent of the prime home
    purchase loans. Latinos were issued 32.8 percent of those same
    high-cost loans originated here in Houston and 20 percent of
    the prime loans, which is greater than their--which is really
    out of whack. In contrast, Whites received 52.5 percent of the
    prime loans originated in Houston, 52.5, which is greater than
    their 30 percent share of the high-cost loans originated here.
        African-Americans represent 16.6 of the population in the
    metropolitan area, but they're getting a great number of the
    high-cost loans. Latinos in the Houston area represent about
    28.7 percent of the population. So the home loans, the
    mortgages that are being written are really bad predatory
    loans, and they're affecting minority buyers out of proportion
    of their population in Houston. Immigrant families are falling
    victims to a number of scams which we have worked on, including
    the contract for deeds.
        Also, it has been mentioned about the home repair program.
    ACORN members, along with Members of Congress, Congresswoman
    Jackson Lee have fought tooth and nail. We went to the City, we
    went to HUD, and there's still not enough money for senior home
    repairs. There has been a lot of improvement under Mayor White,
    but we need more dollars, especially Federal dollars, to get
    into the program to help seniors who are literally dying before
    their repairs can be made. So we're encouraged by the
    improvements, but we know that there is a need for more.
        There are few protections absolutely for renters, because
    Houston, as been alluded to, has such a high number of renters
    for a city this size. For a major city, most of the folks are
    renters. And there is no protection. ACORN members in other
    areas have gotten legislation, such as having landlords being
    licensed and being fined for not keeping up their properties.
    Something of that nature is needed right here, right now.
        And, of course, the housing needs for Katrina survivors,
    the rise in foreclosures, ACORN is--along with its sister
    organization, ACORN Housing, has been meeting with banks,
    mortgage companies, and services to try and get some relief for
    the almost 2 million families that could lose their home in
    foreclosure in the next few years. So we'd like to see a number
    of things happen, one of which is that the State of Texas
    should enhance enforcement and oversight of landlords, of which
    we have none now.
        [The prepared statement of Ms. McElroy can be found on page
    104 of the appendix.]
        Chairwoman Waters. Thank you very much, Ms. McElroy.
        We are going to have to move to Mr. Bustamante now. Thank
    you.

      STATEMENT OF DANIEL BUSTAMANTE, EXECUTIVE DIRECTOR, GREATER
                      HOUSTON FAIR HOUSING CENTER

        Thank you. Good morning to the honorable members of the
    subcommittee. My name is Daniel Bustamante, and I'm the
    executive director of the Greater Houston Fair Housing Center.
        I'm here today to testify before you about the fair housing
    needs and the state of fair housing in Houston, Texas. After
    hearing testimony today, all I have to say is that housing
    discrimination is alive and well in our City. It is a daily
    occurrence in the lives of thousands of families and children,
    Blacks, disabled individuals, Latinos, and other protected
    class members.
        Since the passage of the Federal Fair Housing Act in 1968,
    and its amendment in 1988, the issue of housing discrimination
    has continued to be prominent in the development of the City of
    Houston. Studies and surveys have consistently shown that
    housing discrimination against African-Americans and Hispanics
    continues unabated in our region. The influx of Hurricane
    Katrina evacuees exacerbated this historical housing
    discrimination problem and has been documented through testing.
        The area's demographics include an ever-growing immigrant
    population, with limited English proficiency, who are
    victimized daily by unscrupulous housing providers. The
    disabled in our region are in constant need of fair housing
    enforcement services, such as reasonable accommodations and
    modifications to ensure their rights to barrier-free living.
        Houston is the largest city in the south as well as the
    fourth largest city in the country. The use of racially
    restricted covenants to maintain segregated communities is not
    very far removed. The 1968 Civil Rights Act through the Fair
    Housing Act made housing discrimination practices illegal and
    created the protected classes that exist today. In spite of
    these laws, housing discrimination has continued throughout
    America and still occurs on a daily basis in the Houston area.
        In general, people move into better housing situations so
    they can improve their quality of life. The ability to access
    quality housing will impact access to quality education,
    employment opportunities, retail establishments, parks,
    churches, and other public services. Most people are totally
    unaware of their fair housing rights. Discriminatory practices
    in housing can be quite subtle and are unlikely to be detected
    by victims.
        The United States Census clearly shows segregation and the
    changing patterns in the ethnic and racial composition of
    Greater Houston's neighborhoods. Over the last 30 years, the
    primarily White communities have developed in areas towards the
    outskirts of the City of Houston and in the surrounding
    counties. In recent years, many of the historically minority
    low rent communities in the inner city have been redeveloped
    into high-rent mostly white communities.
        The metropolitan Houston area includes a large region with
    multiple counties, and the further away you get from the City
    of Houston into the surrounding counties, the less colored the
    community becomes and the more White it is. The City of
    Houston, for example, is a majority-minority community, but if
    you take the population surrounding Houston, it is primarily
    White. And what has been happening, and this has been
    documented by studies all the way from Harvard and a lot of
    other prominent universities that are quoted in my documents,
    Houston is still a segregated community. We have desegregated,
    but we have not really paid attention to what's going on in our
    community with discrimination.
        The 2007 Fair Housing Trends by the National Fair Housing
    Alliance indicates that the incidence of discrimination against
    African-Americans, Latinos, and Asian-Americans continues
    unabated. In Houston, the Housing Discrimination Study in the
    year 2000, which was conducted by HUD, found that African-
    Americans and Latinos were discriminated against 25 percent of
    the time when they went to rent homes and 19 percent of the
    time when they went to purchase them. These statistics continue
    to be very real.
        Our agency did a rental audit in 2001, and through testing,
    we found the following: 85 percent of families with children
    were discriminated against when they sought to rent; 80 percent
    of African-Americans were discriminated against when they
    sought to rent; and 65 percent of Hispanics were discriminated
    against when they sought to rent. These are very real figures
    that we have documented through independent testing that we
    have done.
        These figures continue to trouble us because we understand
    that people move for the right reasons. The disabled in our
    community, for instance, are being forced to file complaints,
    Federal complaints, to get such basic needs as accommodations
    and modifications for their living situation because of
    landlords' inability to comply with the law.
        Our City is experiencing a tremendous growth right now.
    Over 29 percent of our City is foreign born. 47 percent of the
    population over 5 years old speak a language other than
    English. This community is bringing new dynamics to our City,
    and they're very much being targeted by unscrupulous landlords.
    Families with children, for instance, represent a significant
    part of this tremendous growth. Single-parent families and two-
    parent homes with several children are very common in the City.
    Many families are denied their fair housing right when they
    seek to improve housing. Children are constantly made to suffer
    policies by landlords who don't tolerate children. They
    frequently take advantage of families through penalties and
    fines when they're trying to get them to move to larger units.
    I do want to address this panel about the Housing Fairness Act
    of 2007.
        [The prepared statement of Mr. Bustamante can be found on
    page 44 of the appendix.]
        Chairwoman Waters. We are going to have to move on to Mr.
    Quan. I'm so sorry. We're going to have to limit our time.
    Thank you very much.

    STATEMENT OF GORDON QUAN, FOUNDING PARTNER, QUAN, BURDETTE AND
     PEREZ, ON BEHALF OF THE NATIONAL COALITION FOR ASIAN PACIFIC
                     AMERICAN COMMUNITY DEVELOPMENT

        Mr. Quan. Thank you, Chairwoman Waters, Congresswoman
    Jackson Lee, and Congressman Green. My name is Gordon Quan, and
    I am here representing the National Coalition of Asian Pacific
    Community Development, as well as the Asian Chamber of
    Commerce, our largest Asian business group in the Houston area.
    You have copies of my testimony, so I'll go straight to the
    items that have not possibly been covered.
        Houston, as you see, has a very unique situation. You asked
    the question, Ms. Waters, as to what areas are in greatest
    need. And the mayor has designated seven areas of development
    that we need to be looking at. We have this mixed blessing of
    tax-delinquent properties that we can redevelop into affordable
    housing in the future. What I propose is greater cooperation
    between government agencies, both Federal, State, and local, to
    earmark funds to these different areas, and also a public-
    private partnership that looks at working with CDCs and
    developers. As has been said by the panel previously, this City
    has been long an area for private development, where developers
    have really taken a major role in the City. Unleash that power.
    Work with nonprofits and see how we can develop communities,
    not just low income but multi--mixed income communities where
    we have middle income and higher income homes. We don't want to
    stigmatize areas of the City as ghettos. In 10 years, nobody
    will want to live in those areas, and we've wasted our time. So
    how do we look at developing long-term neighborhoods that will
    have a lasting effect.
        Another thing you talked about was homelessness. In our
    City, we did a poll to indicate that 12- to 14,000 individuals
    every night are homeless. What we have found is that 35 percent
    of those individuals have mental or physical ailments that do
    not allow them to live independently in our City, and 55
    percent need a structured environment where they can receive
    the counseling that they need to get back on their feet, so it
    is only 10 percent that are left in shelters. So while we're
    looking at sheltering, we're not looking at the long-term
    benefits. How do we get these people off this treadmill, not
    just a bandage approach? Permanent housing is the answer.
    Unfortunately, we have been producing very few permanent
    housing units.
        Mr. Celli talked about this one project, 175 units. That's
    great. But we need 7,000 units if we're really going to address
    our needs. So we're talking about project-based tax credits. We
    talked about housing vouchers. Those are things that we need
    because, otherwise, these projects are not feasible because
    there's very low income, so no bank will finance these
    projects.
        We also need to be building capacity. There are only two
    organizations in Houston that really develop SROs, the Housing
    Corporation of Houston and the New Hope Housing. We need at
    least five or six of these corporations. We need to have more
    people who know how to do that. Catholic Charities, the
    women's--so many groups would like to do it, and they don't
    know how. We need to instruct them.
        Education is the third point I want to reach, because I
    know I'm running out of time. As mentioned by Mr. Bustamante,
    we have a changing demographic in Houston, and many new
    immigrants don't know about homeownership. I know there are
    programs that have been raised up, but I look at the Vietnamese
    community where we have had condominiums that have been
    foreclosed upon because people didn't know their obligations to
    maintain within that common structure. We've had, as Ms.
    McElroy talked about, deed--contract for deed. So many
    immigrants are coming who don't know how to purchase homes in
    our community, not to mention subprime lending, which we all
    know about, and first-time homebuyer programs, which many
    people don't know about.
        Finally, I'd like to just hit upon the Fair Housing Act.
    One of things we're trying to develop in this community is
    senior housing specifically geared towards certain communities
    where there are special needs, such as the Vietnamese
    community. We're going to be having a ground breaking this
    afternoon for the Golden Bamboo Village, which will work with
    the Vietnamese community. But we want to make sure the Fair
    Housing Act does not inadvertently discriminate against
    organizations that seek to meet special needs groups that are
    not otherwise being enforced. So I thank you for this time, but
    I know my time is up. I'm available to answer any questions you
    have. Thank you.
        Chairwoman Waters. Thank you very much.
        A big round of applause for this panel. I'm going to kind
    of forego what would be our traditional questions to say, we
    get it. We get it. We understand. And all that has been
    mentioned from this panel about funding, adequate funding for
    housing survivors, and the extreme shortage of government-
    subsidized housing, the mark-to-market program we just heard,
    we're going to insist that all of those owners of those
    buildings be paid and be paid on time, and that they be paid
    fair market value for the rents. And we're working on that,
    including moneys to help, you know, fix up some of those
    places.
        For the predatory lending, we have a big bill that we are
    putting together. We know that there are people who should be
    given prime loans but have been forced into the subprime
    market. That market has collapsed because of all of the
    reasons, greed mostly, that have taken place out there. And
    we're now focused on trying to save some of these homes from
    foreclosure. Housing discrimination is one of the shames of
    this country, and we have to continue to work on it. I'm so
    pleased that Mr. Green has presented us with legislation to
    deal with housing discrimination in America and fair housing.
    We understand what is going on. You have adequately described
    the gentrification that is going on, and you are absolutely
    right. The need for 7,000 units--I'm absolutely shocked at the
    fact that there are only 4,000 public housing units here. I
    hear what you're saying about the seven areas that have been
    identified, the tax delinquent properties.
        And I want to thank you all for reinforcing what we've
    already come to understand, but we came here to have you
    document what is going on at the invitation of Mr. Green. I
    will yield time to Mr. Green and ask him to keep his comments
    and his questions to a minimum so that we can get out on time.
    Thank you very much.
        Mr. Green. Thank you. I will be brief, but I do want to
    thank you, Mr. Bustamante. In your testimony, you mentioned the
    Housing Fairness Act of 2007. And just for edification
    purposes, friends, we can end discrimination in housing in this
    country. We really can. We can. The most efficacious tool that
    we have available to us is something known as testing. Testing
    works. When we can send our persons equally qualified of
    different ethnicities or different stations in life, we can
    find out who is performing this dastardly kind of behavior, and
    we can catch them. We can catch them. But it takes not only an
    act of Congress to do this; it takes a Congress willing to act.
    That is what it takes.
        And I assure you that this committee chaired by
    Congresswoman Waters is willing to act. I have been very
    grateful and benefited from her help with this Housing Fairness
    Act. I just want to tell you that in that Act, we have $20
    million annually from HUD--for HUD to administer nationwide
    testing. We also have in that Act a requirement that HUD
    presents a report to Congress on testing every 2 years--every 2
    years--so that we can track what's happening as a result of
    what we are doing. And we have other means by which NGOs can
    get involved, and the NGOs can go out and do the testing and
    bring lawsuits. The NGOs can test and also litigate to make
    sure that, when we catch them, we can punish them. That must
    happen.
        And finally, to Ms. McElroy from ACORN. You mentioned
    contracts for deed. Let me just share this with you. Some of
    them are contracts for misdeeds. Many people find themselves
    having made a long history of payments only to have what they
    thought would be their home taken from them when they're right
    near the point where they can purchase. So I share your
    concern, and I assure you that is something that I will be
    working with you and others on in the Congress of the United
    States to see if we can make some corrections. I want to only
    echo what the Congresswoman had said, ``From time to time it's
    good to say amen.'' This is one of those days when we should
    say, ``A woman, a woman, a woman.'' Thank you.
        Chairwoman Waters. Thank you very much. Now Ms. Jackson
    Lee.
        Ms. Jackson Lee. Madam Chairwoman, let me thank you and
    Congressman Green. And let me--because of the great panel--Mr.
    Henneberger, Mr. Muhammad, Ms. Junor, Ms. McElroy, Mr.
    Bustamante, and Mr. Quan, and I know Mr. Lopez was detained--
    let me champion and thank Congresswoman Waters for recognizing
    that we live in a diverse America. All of the amendments that
    have been discriminatory relating to housing and immigrants
    have been fought back by this chairwoman. And we have joined
    her with Chairman Frank and Congressman Green, and we will
    continue to do that.
        Let me quickly do a few thank you's, and acknowledge the
    presence of Mr. Love of the Coalition of the Homeless. I hope
    he has been inspired today. I would also like to thank, in his
    absence, Chad Bogany and Gerald Womack. Both of them are
    leaders in the real estate area and they have fought these
    issues of discriminatory housing. And we thank them. I want to
    acknowledge Gladys House as well and just put on the record in
    particular that the Gregory School received HUD-earmarked
    dollars and the project is yet to be finished. We recognize
    that.
        Let me quickly just say not only do we get it, Ms. McElroy
    and ACORN, I can't thank you enough. We're going to reignite
    the battle on senior housing, particularly on the reverse
    mortgages that Congressman Green--we'll all be working, but
    also on the senior repair, which does not make sense. I want to
    make sure that we reignite that fight. And I do want to put
    into the record that we--Mr. Henneberger, if you would share
    with us additional legislative fixes to help us, if you will--
    and I'm going to get you to put it in the record, but to help
    us overcome what has happened to Houston where they only have
    4,000 public housing units when they should have more. I know
    that you can think about it collectively.
        And then would you also note that we--your point about
    segregated housing. What we want to do, and I think what we
    heard, people think the Third Ward is segregated, or the Fifth
    Ward. But we want to come out and fix it up. We don't mind our
    seniors and low incomes coming in, but let's have them have
    beautiful properties. Let's get ACTION CDC to take up this
    project that HUD has said where they can joint venture on the
    Section 8. Let's let the CDCs build these facilities for
    Section 8. I'd like to develop it, but let's get the CDCs to do
    it.
        I close, Madam Chairwoman with this: We are champions of
    what our cities do. All we do is take back the message of our
    cities. And so when you hear the term Houston HOPE, we champion
    it. We think, in fact, that we have a wonderful effort because
    it has Houston HOPE. But I want to put into the record, Edith
    Salaville, 87 years old, at Weinburg & Delanore on the front
    page of The Houston Chronicle. Her inherited property by a
    historic civil rights leader in our community and she, I think
    was a granddaughter, fell behind in property taxes after she
    lost her senior exemption.
        She was foreclosed on, an 87-year-old woman who lived in
    this property under the pretense we can get these houses and
    put them in Houston HOPE. We must have restraint and oversight
    federally of a program that builds itself on foreclosures which
    might catch up the elderly and the disabled. We want Houston
    HOPE, but we want it to work in a nondiscriminatory fashion.
        And so I am grateful for the presence of all of you here
    today. And, again, I thank you, Madam Chairwoman, and
    Congressman Green. I thank you for allowing me to participate
    in this outstanding hearing. With that, I yield back.
        Chairwoman Waters. Thank you very much. I'd like to thank
    both Congressman Green and Congresswoman Jackson Lee for their
    great advocacy and the time and attention that they put into
    their work in Washington, D.C. I know there are days when many
    of you have felt that there's no help coming, that Washington
    is not doing what it should do. But I want to tell you that we
    do have the gavel now, and it is going to make a difference. We
    are going to use our power to correct some of these ills that
    have existed for far too long. Again, I'm so pleased that Al
    Green is on that committee doing such a great job. He is a
    workhorse. He has a fabulous work ethic. And so I'm delighted
    to be here. The Chair notes that some members may have
    additional questions for this panel which they may wish to
    submit in writing. And 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 understand that there are some other things that
    should be submitted for the record, and without objection, Mr.
    Green first.
        Mr. Green. We have these photographs, and I would ask that
    the parties submitting the photographs give us a narrative that
    will be placed in the record as well, if there are no
    objections.
        Chairwoman Waters. Yes. And also do you have any other
    documents to submit, Ms. Lee?
        Ms. Jackson Lee. Yes, Madam Chairwoman. I'll read it
    because I have written on it. Just simply to announce again,
    the Harris County Housing Authority that developed the disaster
    housing process that may become a national model for disaster
    housing assistance. And if there is anyone from Harris County
    Housing, just raise their hand. I'm just putting that statement
    in the record. Thank you very much.
        Chairwoman Waters. Thank you very much. And I would also
    like to submit for the record the written statements of the
    Houston Center For Independent Living and historic Freedman's
    Town and Allen Parkway Village as well as that of Mr. Malaika
    Adan will be made part of the record. And if the young lady in
    the back who submitted these being would raise her hand--oh,
    I'm sorry--in the front, will raise your hand, and make sure we
    get a narrative to go along with those pictures so that we can
    put that in the record and have an opportunity to address what
    you brought to our attention, I would appreciate it very much.
        I'd like to thank all of you for being here. This is a
    fantastic turnout for rather short notice to be here today. And
    we really do appreciate it. You bring to us the support that we
    need to be able to move forward. This hearing is adjourned.
    Thank you very much.
        [Whereupon, the hearing was adjourned.]

                                A P P E N D I X

                                October 29, 2007

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