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


 
 ENSURING SAFE AND EFFECTIVE HOUSING PROGRAMS IN THE WAKE OF DISASTERS

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

                                HEARING

                               before the

                     COMMITTEE ON HOMELAND SECURITY

                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                               __________

                            JANUARY 29, 2008

                               __________

                           Serial No. 110-91

                               __________

       Printed for the use of the Committee on Homeland Security

                                     
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                     COMMITTEE ON HOMELAND SECURITY

               Bennie G. Thompson, Mississippi, Chairman

Loretta Sanchez, California          Peter T. King, New York
Edward J. Markey, Massachusetts      Lamar Smith, Texas
Norman D. Dicks, Washington          Christopher Shays, Connecticut
Jane Harman, California              Mark E. Souder, Indiana
Peter A. DeFazio, Oregon             Tom Davis, Virginia
Nita M. Lowey, New York              Daniel E. Lungren, California
Eleanor Holmes Norton, District of   Mike Rogers, Alabama
Columbia                             David G. Reichert, Washington
Zoe Lofgren, California              Michael T. McCaul, Texas
Sheila Jackson Lee, Texas            Charles W. Dent, Pennsylvania
Donna M. Christensen, U.S. Virgin    Ginny Brown-Waite, Florida
Islands                              Gus M. Bilirakis, Florida
Bob Etheridge, North Carolina        David Davis, Tennessee
James R. Langevin, Rhode Island      Paul C. Broun, Georgia
Henry Cuellar, Texas                 Vacancy
Christopher P. Carney, Pennsylvania
Yvette D. Clarke, New York
Al Green, Texas
Ed Perlmutter, Colorado
Bill Pascrell, Jr., New Jersey

       Jessica Herrera-Flanigan, Staff Director & General Counsel

                        Todd Gee, Chief Counsel

                     Michael Twinchek, Chief Clerk

                Robert O'Connor, Minority Staff Director

                                  (II)


                            C O N T E N T S

                              ----------                              
                                                                   Page

                               Statements

The Honorable Bennie G. Thompson, a Representative in Congress 
  From the State of Mississippi, and Chairman, Committee on 
  Homeland Security:
  Oral Statement.................................................     1
  Prepared Statement.............................................     2
The Honorable Peter T. King, a Representative in Congress From 
  the State of New York, and Ranking Member, Committee on 
  Homeland Security..............................................     3
The Honorable Sheila Jackson Lee, a Representative in Congress 
  From the State of Texas:
  Prepared Statement.............................................    13

                               Witnesses

Mr. Carlos J. Castillo, Assistant Administrator, Disaster 
  Assistance Directorate, Federal Emergency Management Agency, 
  Department of Homeland Security:
  Oral Statement.................................................    15
  Prepared Statement.............................................    17
Dr. Henry Falk, MD, MPH, Director, Coordinating Center for 
  Environmental Health and Injury Prevention, Centers for Disease 
  Control and Prevention, Department of Health and Human 
  Services:
  Oral Statement.................................................    24
  Prepared Statement.............................................    26
Mr. Nelson R. Bregon, General Deputy Assistant Secretary, Office 
  of Community Planning and Development, Department of Housing 
  and Urban Development:
  Oral Statement.................................................    28
  Prepared Statement.............................................    30
Mr. David F. Tipson, Interim Director, Community Development 
  Project, Lawyers' Committee for Civil Rights Under Law:
  Oral Statement.................................................    32
  Prepared Statement.............................................    33
Mr. Michael G. Gerber, Executive Director, Texas Department of 
  Housing and Community Affairs:
  Oral Statement.................................................    45
  Prepared Statement.............................................    47

                             For the Record

DeRosa, Christopher, Submitted by Chairman Bennie G. Thompson:
  E-mail, February 27, 2007......................................     5
DeRosa, Christopher, Submitted by Chairman Bennie G. Thompson:
  E-mail, June 1, 2007...........................................     9
Chairman Bennie G. Thompson, and Honorable Henry A. Waxman, a 
  Representative in Congress From the State of California, and 
  Chairman, Committee on Oversight and Government Reform:
  Letter, April 19, 2007.........................................    11
Honorable Alcee L. Hastings, a Representative in Congress From 
  the State of Florida, Submitted by Honorable Mark E. Souder:
  Letter, August 7, 2007.........................................    12
Honorable Mark E. Souder, a Representative in Congress From the 
  State of Indiana:
  News Article...................................................    57


 ENSURING SAFE AND EFFECTIVE HOUSING PROGRAMS IN THE WAKE OF DISASTERS

                              ----------                              


                       Tuesday, January 29, 2008

                     U.S. House of Representatives,
                            Committee on Homeland Security,
                                                    Washington, DC.
    The committee met, pursuant to call, at 2:06 p.m., in Room 
311, Cannon House Office Building, Hon. Bennie G. Thompson 
[Chairman of the committee] presiding.
    Present: Representatives Thompson, Sanchez, Dicks, Norton, 
Jackson Lee, Christensen, Etheridge, Cuellar, Carney, Clarke, 
Green, Pascrell, King, Souder, and Davis of Tennessee.
    Chairman Thompson. The Committee on Homeland Security will 
come to order.
    Good afternoon.
    First, on behalf of Members of our committee, let me 
welcome our panel.
    The purpose of this hearing is to examine the broad range 
of issues surrounding how our Nation provides housing for 
disaster victims. Specifically, this hearing will provide 
Members of the committee with the opportunity to discuss the 
unprecedented challenges facing Federal, State and local 
governments in their efforts to house the victims of Hurricanes 
Katrina and Rita, access to safety and effectiveness of current 
emergency housing programs, and examining the plans being 
developed to ensure that our Nation will better prepare to meet 
the future housing needs of disaster victims.
    Nearly 2\1/2\ years after Hurricanes Katrina and Rita 
struck, the people along the Gulf Coast are still coping with 
its aftermath and struggling to recover. In order for our 
Nation to truly be resilient, the lessons we have learned from 
this catastrophe cannot be ignored.
    One of the most striking lessons we learned was this 
country was ill-prepared to provide emergency housing to 
victims of a major catastrophe. To house the number of 
individuals who lost their homes during Katrina and Rita, FEMA 
was forced to immediately purchase thousands of travel 
trailers. By the time the dust settled, FEMA had purchased over 
100,000 of these units.
    However, as months and years passed, it became clear that 
travel trailers may not have been the best option. As early as 
April 2006, concerns were raised publicly about high levels of 
formaldehyde in many of the travel trailers provided by FEMA. 
Medical experts have stated that the negative health effects 
from prolonged exposure to high levels of formaldehyde can 
range anywhere from respiratory irritation to cancer.
    After pressure from Congress, health experts and community 
organizations, FEMA announced that they would enter into an 
agreement with the CDC to test the trailers for formaldehyde 
and to study what associated health impacts may have been 
encountered. However, it was not until December 21, 2007, that 
the CDC actually began testing formaldehyde levels in travel 
trailers and mobile home. That is over a year-and-a-half after 
first reports of high formaldehyde surfaced. This delay is 
unacceptable. I look forward to getting a clear explanation 
from both FEMA and CDC as to why testing was delayed so long.
    Even more troubling is a recent discovery that FEMA 
directed the CDC to not investigate or communicate the health 
effects associated with prolonged exposure to formaldehyde. The 
committee recently came into possession of internal CDC e-mails 
which show that, despite the efforts of CDC professionals to 
bring these health risks to the public's attention, those 
concerns were thwarted by CDC leadership for roughly 8 months. 
I hope that our witnesses can shed some light on this issue by 
explaining why FEMA directed the CDC to exclude discussion of 
the long-term health risk and why the CDC complied.
    In addition, while I am pleased that the testing of air 
quality has finally commenced, I worry that the damage may have 
already been done. I look forward to hearing about FEMA and the 
CDC's plan to monitor and treat the long-term health effects of 
people who have lived in FEMA trailers or mobile homes in the 
Gulf.
    While we can't turn back the clock to prevent this debacle, 
we can make certain that this problem will not be encountered 
on future disasters. That is why I, along with some of my 
colleagues on this committee, introduced the Safe and Healthy 
Emergency Housing Act to protect disaster victims by requiring 
that any emergency housing units provided by FEMA meet HUD 
regulations limiting formaldehyde emissions.
    Finally, in the aftermath of Hurricanes Katrina and Rita, 
Congress allocated billions of dollars through the Community 
Development Block Grant program to the Gulf Coast States to 
address the housing and infrastructure needs. I look forward to 
hearing how the funding is being allocated by HUD and how 
effective the States have been in using the money to help the 
victims of these disasters. Specifically, I am interested in 
learning why HUD has yet again waived the low-income 
regulations associated with the Community Development Block 
Grant program so that the State of Mississippi approved a 
diversion of nearly $600 million intended for housing relief to 
go to a port improvement project.
    I want to thank the witnesses again for their testimony.
    [The statement of Chairman Thompson follows:]

           Prepared Statement of Chairman Bennie G. Thompson

    This hearing will provide Members of the committee with the 
opportunity to discuss the unprecedented challenges facing Federal, 
State, and local governments in their efforts to house the victims of 
Hurricanes Katrina and Rita, assess the safety and effectiveness of 
current emergency housing programs, and examine the plans being 
developed to ensure that our Nation will be better prepared to meet the 
future housing needs of disaster victims.
    Nearly 2\1/2\ years after Hurricanes Katrina and Rita struck, the 
people along the Gulf Coast are still coping with its aftermath and 
struggling to recover.
    In order for our Nation to truly be resilient, the lessons we have 
learned from this catastrophe cannot be ignored.
    One of the most striking lessons we learned was that this country 
was ill-prepared to provide emergency housing to victims of a major 
catastrophe. To house the number of individuals who lost their homes 
during Katrina and Rita, FEMA was forced to immediately purchase 
thousands of travel trailers.
    By the time the dust settled, FEMA had purchased over 100,000 of 
these units.
    However, as months and years passed, it became clear that travel 
trailers may not have been the best option. As early as April 2006, 
concerns were raised publicly about high levels of formaldehyde in many 
of the travel trailers provided by FEMA.
    Medical experts have stated that the negative health effects from 
prolonged exposure to high levels of formaldehyde can range anywhere 
from respiratory irritation to cancer.
    After pressure from Congress, health experts and community 
organizations, FEMA announced that they would enter into an agreement 
with the CDC to test the trailers for formaldehyde, and to study what 
associated health impacts may have been encountered.
    However, it was not until December 21, 2007, that the CDC actually 
began testing formaldehyde levels in travel trailers and mobile homes.
    That is over a year-and-a-half after the first reports of high 
formaldehyde surfaced.
    This delay is unacceptable. I look forward to getting a clear 
explanation from both FEMA and CDC as to why testing was delayed for so 
long.
    Even more troubling is a recent discovery that FEMA directed the 
CDC to not investigate, or communicate, the health effects associated 
with prolonged exposure to formaldehyde.
    The committee recently came into possession of internal CDC emails 
which show that despite the efforts of CDC professionals to bring these 
health risks to the public's attention, these concerns were thwarted by 
CDC leadership for roughly 8 months.
    I hope that our witnesses can shed some light on this issue by 
explaining why FEMA directed the CDC to exclude discussion of the long-
term health risks, and why the CDC complied.
    In addition, while I am pleased that the testing of the air quality 
has finally commenced, I worry that the damage may have already been 
done.
    I look forward to hearing about FEMA and the CDC's plans to monitor 
and treat the long-term health effects of people who have lived in FEMA 
trailers or mobile homes in the Gulf.
    While we can't turn back the clock to prevent this debacle, we can 
make certain that this problem will not be encountered during future 
disasters.
    That is why I, along with some of my colleagues on this committee, 
introduced the Safe and Healthy Emergency Housing Act to protect 
disaster victims by requiring that any emergency housing units provided 
by FEMA meet HUD regulations limiting formaldehyde emissions.
    Finally, in the aftermath of Hurricanes Katrina and Rita, Congress 
allocated billions of dollars through the Community Development Block 
Grant Program (CDBG) to the Gulf Coast States, to address housing and 
infrastructure needs.
    I look forward to hearing how that funding is being allocated by 
HUD and how effective the States have been in using that money to help 
victims of those disasters.
    Specifically, I am interested in learning why HUD has yet again 
waived the low-income regulations associated with the CDBG program for 
the State of Mississippi and approved a diversion of nearly $600 
million intended for housing relief to a port improvement project.

    Chairman Thompson. The Chair now recognizes the Ranking 
minority Member of the committee, the gentleman from New York, 
Mr. King, for any opening statement he may have.
    Mr. King. Thank you, Mr. Chairman. Thank you for yielding. 
Thank you for calling the hearing.
    Mr. Chairman, at the outset of today's hearing it is 
important to note that a number of the issues that you have 
outlined in your opening statement I believe also are 
traceable, at least in part, to the fact that there is such a 
multiplicity of jurisdictions in the Congress. There have been 
at least three other committees and subcommittees in the House 
of Representatives that have held nearly a half-dozen hearings 
on disaster housing over the last several years. This, again, 
to me, underscores the point that we have to be doing much more 
to consolidate jurisdiction in one committee, ideally this 
committee. That certainly is in keeping with the congressional 
charter. So we have to, I think, dedicate ourselves to doing 
more to get that jurisdiction consolidated so that the 
duplications we see here, the lack of consistency, can be 
better addressed.
    Also, Mr. Chairman, I would like to take this opportunity 
not to start off the year on an unharmonious note but to 
underscore the fact that we have learned on our side that you 
do not intend to pursue an authorization bill this year. Since 
this is the first hearing of the year, I think it is 
appropriate to make our point clear at this time that we think 
that is a serious mistake for the committee. We think it is a 
serious mistake, as we attempt to consolidate our position in 
the House, your decision not to pursue an authorization bill. 
We had one in 2005. We had one in 2006. We had one in 2007. We 
think it would be a serious mistake not to do it this year.
    We realize that there are crowded schedules. Certainly we 
faced that in 2006, where we addressed a lot of issues but 
still did find time to do the authorization bill. Whether or 
not the Senate does it--I don't think we should be just 
concerned by what the Senate does. I think we have a message to 
send to Members of our own body here in the House.
    That is why I would ask you to reconsider that, as the year 
goes along. As you recall, last year in 2007 when you were the 
Chairman and did a fine job as Chairman, we actually worked 
very well together on an authorization bill. My memory is that 
it passed either on a voice vote or by a unanimous vote. I 
thought it sent a very strong and clear message to the House. 
So I would urge you to reconsider that as we go forward this 
year.
    With that, I look forward to the hearing today. I yield 
back.
    Chairman Thompson. Thank you very much. I assure the 
Ranking Member that, as we go forward, time permitting, we will 
have a discussion, and you might be pleasantly surprised.
    Mr. King. I look forward to such discussions with the 
Chairman.
    Chairman Thompson. Before we introduce our panel, I would 
like to ask unanimous consent to submit four documents for the 
record.
    The first is an e-mail from Dr. Chris De Rosa, a former 
director of toxicology at CDC, to high-ranking CDC officials, 
citing concerns about a February 2007 health consultation 
prepared at the request of FEMA.
    The second document is a June 2007 e-mail from Dr. De Rosa, 
again raising concerns regarding the lack of discussion about 
long-term health risks.
    The third document is CDC's October 2007 updated health 
consultation.* This report addressed many of Dr. De Rosa's 
concerns, but it has been given very little attention in public 
health settings when discussing the health risk of formaldehyde 
exposure.
---------------------------------------------------------------------------
    * Due to volume, document has been retained in committee files.
---------------------------------------------------------------------------
    The fourth document is a letter I sent, along with Chairman 
Waxman of the House Committee on Oversight and Government 
Reform, to FEMA in April 2007, raising concerns about the 
health risks posed to individuals who choose to purchase travel 
trailers.
    [The information follows:]

    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Mr. King. Mr. Chairman, reserving the right to object. I am 
not going to object; obviously there is no need to start off a 
hearing on that note.
    But I just would ask--obviously this has been mainly 
handled at the staff level, but I believe we were first 
notified of your intentions to do this last evening. This 
hearing has been in preparation for many weeks now. I just 
would ask, to the extent it can be done in the future, that we 
be given more notice on these issues. Obviously these documents 
go back quite a few months. I would ask for, in the interest of 
having a more coherent hearing and for us to be able to prepare 
better for it, that we receive, whenever possible, more 
adequate notice in the future.
    With that, I withdraw my reservation.
    Mr. Souder. Mr. Chairman.
    Chairman Thompson. Yes.
    Mr. Souder. Oh, I am sorry. Do you want to respond to Mr. 
King first?
    Chairman Thompson. Sounds like a reasonable request. I 
would say to the Ranking Member, as soon as we get the 
documents and if it is deemed that we will use them in a 
hearing, we will be more than happy to provide them.
    Mr. Souder. Mr. Chairman.
    Chairman Thompson. Yes.
    Mr. Souder. Reserving the right to object, which I won't; 
this is a controversial opinion, not necessarily a mainstream 
opinion even, and would like the opportunity to insert, after 
the hearing, additional items into the record.
    Chairman Thompson. Without objection. Please, if you 
provide the information, get it to us, we will include it.
    [The information follows:]

                Letter From Honorable Alcee L. Hastings
                                                    August 7, 2007.
The Honorable David Paulison,
Director of the Federal Emergency Management Agency, 500 C Street SW, 
        Washington, DC 20472.

    Dear Director Paulison: I write to thank you and the Federal 
Emergency Management Agency (FEMA) for your efforts to address the 
recent formaldehyde-related health concerns for individuals residing in 
the FEMA travel trailers in the Gulf States.
    I appreciate FEMA's efforts to swiftly facilitate public health and 
safety Nation-wide. FEMA has taken significant steps to raise awareness 
and address this problem such as conducting a study on air quality 
conditions in the FEMA-purchased housing units, providing outreach on 
formaldehyde to the occupants of each FEMA travel trailer, and setting 
up a Toll-Free Help Line to serve affected individuals. Importantly, 
FEMA has decided to temporarily suspend the installation, sale, 
transfer or donation of travel trailers or park model recreational 
vehicles currently in its inventory, including 500 in my State of 
Florida.
    I am thankful that out of the 20,000 units that were utilized 
across the State of Florida for all the storms that required a housing 
mission from 2004-2005 (Charley, Frances, Ivan, Jeanne, Dennis and 
Wilma), it appears that there was only one incident relating to 
formaldehyde health concerns. However, I remain concerned about the 
future health problems this substance might pose to individuals living 
in these travel trailers.
    Unfortunately, the national concerns over the air quality in FEMA 
travel trailers arise during the middle of an actively predicted 
hurricane season. As you know, by law, FEMA can not sell mobile homes 
if they are to be located in floodways or in coastal high hazard areas 
unless they meet the specific criteria under 44 CFR part 9, Floodplain 
Management and Protection of Wetlands, and the regulations under 44 CFR 
part 10, Environmental Considerations.
    Since significant portions of my district and several other areas 
in Florida are located in floodways, no other temporary housing 
solution exists beyond using travel trailers. To that end, I 
respectfully request that FEMA conduct its investigation of the travel 
trailers or park model recreational vehicles thoroughly and 
expeditiously so the travel trailers may become available for future 
Florida disasters. I would also appreciate a detailed report on the 
status of such trailers in Florida and FEMA's preparedness to supply 
Floridians with safe trailers should they become needed in the future.
    Thank you for considering this very important request. Please do 
not hesitate to contact me should you have any questions or wish to 
discuss this any further. I look forward to your expeditious response.
            Sincerely,
                                         Alcee L. Hastings,
                                                Member of Congress.

    Chairman Thompson. At this point, statements submitted by 
other Members of the committee will also be included for the 
record.
           Prepared Statement of Honorable Sheila Jackson Lee
    I thank Chairman Thompson and Ranking Member King for agreeing to 
convene this extremely important hearing on the issue of ensuring that 
safe and effective housing programs in the wake of disasters are 
provided in an expeditious manner. In October of 2007, the Texas State 
Auditor released an audit report on hurricane recovery funds 
administered by the Texas Department of Housing and Community Affairs 
(TDHCA) and the Office of Rural Community Affairs. This report found 
that TDHCA had expended only $1.1 million of the Community Development 
Block Grants (CDBG) despite the fact that Congress had appropriated and 
HUD had awarded Texas $74.5 million in May of 2006 and an additional 
$428.6 million in October 2006. This $1.1 million expended by the Texas 
is only \1/4\ of 1 percent that we in Congress had worked hard to 
appropriate. I was very concerned by this audit report and media 
reports which detailed problems with the distribution of Federal funds 
to hurricane victims in my home city of Houston, I thank Chairman 
Thompson for agreeing to my request that a hearing be held 
investigating this issue. As we have commenced the 3-year anniversary 
of one of the most devastating hurricanes in our Nation's history and 
reflect upon the Federal Government's untimely response, I think it is 
a very appropriate time to critically re-examine our response and re-
evaluate how she should adequately prepare for future disasters.
    I welcome our distinguished panel, Mr. Carlos Castillo, Assistant 
Administrator for the Disaster Assistance Directorate of FEMA; Dr. 
Henry Falk, Director of Coordinating Center for Environmental Health 
and Injury Prevention, Center for Disease Control and Prevention, 
Department of Health and Human Services; Mr. Nelson Bregon, General 
Deputy Assistant Secretary, Office of Community Planning and 
Development, Department of Housing and Urban Development; Mr. David 
Tipson, Interim Director, Community Development, Project Lawyers' 
Committee for Civil Rights Under Law; and Mr. Michael Gerber, Executive 
Director, Texas Department of Housing and Community Affairs.
    I look forward to the insightful testimonies from the witnesses 
about important issues regarding safe and effective housing programs 
for disaster victims. We need to hear from them because we cannot only 
rely on private solutions to public harms. The government should not 
abrogate its responsibility over the general welfare of its citizens, 
and all levels of government (Federal, State, and local) must do a 
better job of coordinating and ensuing that relief is delivered in a 
timely and efficient manner.
    The consequences of Hurricanes Katrina and Rita caused 
extraordinary damage; they were without precedent in recent American 
history. The magnitude of the hurricanes' actual impact was rivaled 
only by the catastrophic failure of the Federal Government to 
adequately respond to the resulting suffering in a manner befitting our 
great Nation. Although our past disaster prevention, preparedness, and 
relief mechanisms and agencies are woefully inadequately, this hearing 
will confront the unprecedented challenges facing Federal, State, and 
local governments in their efforts to house the victims of Hurricanes 
Katrina and Rita, and evaluate the safety and effectiveness of current 
emergency housing programs.
    In May 2006, the State of Texas received only $74.5 million in 
Community Development Block Grant (CDBG) funds appropriated by 
Congress, but received an additional $428.6 million in April 2007. In 
addition, Texas decided to allot $40.3 million for housing, which 
sustained most of the damage, and $30.2 million allotted for 
infrastructure. The State of Texas directs its funds to repair and 
restoration, unlike neighbors Louisiana and Mississippi, which 
channeled the funds they received to individual and family 
compensation. Although I understand that Texas chose a repair and 
restoration method in order to prevent fraud, waste, abuse, and a 
duplication of benefits, the staggering delays are intolerable. About 
18 months had passed since Texans received the initial $74.5 million in 
CDBG grants, and 6 months had passed since Texans received an 
additional $428.6 million, when the Texas State Auditor's office 
revealed that only $1.1 million of the $500 million had been spent on 
rebuilding homes. This represents less than \1/4\ of 1 percent.
    The communities hardest hit by the 2005 hurricanes did not receive 
proportionate shares of the allotment. Helena Saunders from Sabine Pass 
(where the storm made landfall) recently appeared on CNN complaining of 
not receiving assistance after her application for State aid was 
submitted in December 2006. Although Texas asserts that at least $12 
million in relief has been set aside for Sabine Pass, I would like to 
know how many of these funds have been spent. The impediments 
identified by Texas include regulations restricting a duplication of 
benefits, historic preservation, environmental studies, and building in 
floodplains.
    Hurricane Rita devastated Texas and Louisiana in September 2005. 
This storm caused an estimated $9.4 billion in damages, and thousands 
of properties in Texas were destroyed. The State of Texas, according to 
an audit, has received nearly $500 million in Federal funds for housing 
and infrastructure repair, and, according to reports, only $1.1 
million, or less than \1/4\ of 1 percent, has been spent on rebuilding 
homes. Thousands of Texans affected by Hurricane Rita are still waiting 
for this money to be distributed by the State.
    According to media reports, the audit indicates that a significant 
portion of the funds spent was used to cover administrative costs, 
rather than to serve the victims of these natural disasters. The people 
of Texas are not receiving the funds they desperately need. Of the 
4,300 Texan applicants for housing assistance, only 13 had received 
homes as of September 2007.
    Mr. Chairman, it is critical that this committee investigate the 
expenditure of these Federal funds, and establish the reasons why the 
funds have not been spent. Today's hearing must investigate these 
issues, which are of the utmost importance. Due to the severity of 
Hurricanes Katrina and Rita, there are an unprecedented number of 
individuals still requiring housing. FEMA is determining how many 
operational [sic].
    Section 403 of the Robert T. Stafford Disaster Relief and Emergency 
Assistance Act authorized FEMA to provide temporary housing and other 
assistance during the response and recovery phases of a disaster. To 
date, over 730,000 households have received $2.5 billion in rental 
assistance, and as of January 11, 2008, there are 40,865 families still 
living in temporary housing units such as travel trailers or mobile 
homes. Although FEMA has provided over $7.7 billion to over 1.4 million 
households through the Individuals and Households Program, it is 
obviously irregular that numerous inhabitants of these shelters have 
exhibited a ``set of unique symptoms.'' Dr. Needle, a pediatrician in 
the St. Louis, Mississippi region, noticed in April 2006 that many of 
these symptoms were shown in children living in FEMA travel trailers.
    Consequently, the Sierra Club began testing for levels of 
formaldehyde in 2006, and found that 94% of the tests in Mississippi 
and 83% in Alabama and Louisiana were over OSHA's standards. After 
incessant scrutiny from Congress and the media, FEMA committed to test 
formaldehyde levels in travel trailers beginning in Fall 2007; however, 
FEMA postponed action by canceling all tests until finally relenting in 
December 2007, over 18 months after the concerning tests conducted by 
the Sierra Club.
    Mr. Chairman, there is a blatant ongoing alternative housing crisis 
in the Gulf. Formaldehyde can be toxic, allergenic, and carcinogenic, 
and the citizens of America who are compelled to a state of Government 
dependency due to the aftermath of a natural disaster should not be 
involuntarily eligible for inhumane housing conditions. FEMA's rush to 
manufacture the housing units produced and delivered unsafe and 
hazardous units. This prompted over 500 Gulf Coast residents to file a 
lawsuit against FEMA and the trailer manufacturers.
    Those of us in Louisiana's neighboring State of Texas have 
experienced the impact of Hurricane Katrina as we continue to provide 
assistance for the thousands of our neighbors who were displaced. In my 
home district in Houston, homelessness remains a significant problem. 
Houston's homeless population increased to approximately 14,000 in 
2005, before Hurricanes Katrina and Rita, and hurricane evacuees 
remaining in the Houston area could result in the homeless population 
increasing by some 23,000.
    Mr. Chairman, across the States hit by Hurricanes Katrina and Rita, 
there are men, women, and children who lost everything to flood waters 
and storm winds. I have been proud to stand up on their behalf here in 
Congress countless times over the past few years, but I find it 
inexcusable that these housing problems persist. We must work together 
to speed up the process of housing assistance.
    Thank you, Mr. Chairman. I look forward to the testimony of today's 
distinguished panel, and I hope to hear of progress from TDHCA in 
particular and DHS more generally. I yield back the balance of my time.

    Chairman Thompson. Now I welcome our panel.
    We are pleased to have the assistant administrator for 
disaster assistance from FEMA, Mr. Carlos Castillo, here to 
testify. Mr. Castillo came to FEMA in July 2007 after more than 
25 years as a firefighter and local emergency manager.
    The second witness is Dr. Henry Falk. Dr. Falk is director 
of the Coordinating Center for Environmental Health and Injury 
Prevention at the Centers for Disease Control and Prevention.
    Our third witness is Mr. Nelson Bregon. Mr. Bregon is the 
general deputy assistant secretary for the Office of Community 
Planning and Development within the Department of Housing and 
Urban Development.
    Our fourth witness is Mr. Michael Gerber, who is executive 
director of the Texas Department of Housing and Community 
Affairs.
    Our fifth witness is Mr. David Tipson. Mr. Tipson is an 
interim director of the Community Development Project for the 
Lawyers' Committee for Civil Rights Under Law.
    Without objection, the witnesses' full statement will be 
inserted in the record.
    Now I ask Mr. Castillo to summarize his statement for 5 
minutes.

   STATEMENT OF CARLOS J. CASTILLO, ASSISTANT ADMINISTRATOR, 
 DISASTER ASSISTANCE DIRECTORATE, FEDERAL EMERGENCY MANAGEMENT 
            AGENCY, DEPARTMENT OF HOMELAND SECURITY

    Mr. Castillo. Thank you. Good afternoon, Chairman Thompson, 
Ranking Member King and Members of the committee. I am Carlos 
Castillo, the assistant administrator for disaster assistance 
in FEMA. I have proudly served in this role since July 2007. I 
am pleased to be here today to discuss our continued efforts to 
provide assistance to those residents and communities still 
faced with difficult challenges as a result of the 2005 
hurricane season.
    In light of recent news developments, I would like to 
address and clarify FEMA's role and actions concerning testing 
for manufactured housing. First, I would like to begin by 
addressing some issues that have arisen.
    I want to be very clear about this: The health and safety 
of disaster victims is our top priority at all times. At no 
time did FEMA ever, or would FEMA ever, condone misleading 
anyone in connection with the health and safety of the people 
we are dedicated to helping. Any and all allegations that FEMA 
ignored or manipulated formaldehyde-related research are 
unfounded and false. Such activities are completely contrary to 
our mission and our commitment to victims of disaster.
    When FEMA first began to receive reports about formaldehyde 
concerns from occupants of travel trailers, the agency 
responded immediately to each one. However, as the number of 
complaints began to increase, the agency started to realize the 
potential scope of the problem. Since that time, FEMA has 
developed and is implementing a multifaceted approach that 
focuses on helping occupants move to more appropriate housing.
    While nearly 2\1/2\ years have passed since the devastation 
of Hurricanes Katrina and Rita, FEMA continues to aggressively 
honor the administration's commitment to help rebuild the Gulf 
Coast.
    We have faced innumerable challenges along the way, 
challenges that have tested capabilities and, in many cases, 
have served as an impetus to shape and improve how we deliver 
assistance.
    In response to Hurricanes Katrina and Rita, FEMA conducted 
the largest temporary housing operation in the history of this 
Nation, providing temporary housing units at peak to more than 
143,000 families across the Gulf Coast. While most of these 
families have transitioned to self-sufficiency, we continue to 
support the remaining more than 43,000 households in temporary 
housing units as they find and transition into longer-term and 
more stable housing solutions.
    I have submitted my written testimony for the record, and 
it outlines a number of FEMA programs aimed at assisting Gulf 
Coast communities and disaster victims. I will summarize them 
briefly.
    First, the Gulf Coast housing strategy action plans. We are 
committed to providing suitable, long-term housing solutions to 
families impacted by these hurricanes. Led by FEMA's Gulf Coast 
Recovery Office, GCRO, FEMA continues to work with applicants 
to ensure they have access to any and every available housing 
resource that can help speed their recovery.
    We are pleased that nearly 70 percent of the households 
that received temporary housing units following Hurricanes 
Katrina and Rita have now moved out of these units and back 
into some form of permanent housing. The work of transitioning 
the remaining residents present many challenges as we try to 
balance available resources with the support needs of the 
families that reach beyond basic housing but are often just as 
critical to an individual's ability to return to self-
sufficiency.
    On July 26, 2007, FEMA and Housing and Urban Development 
executed an interagency agreement establishing the Disaster 
Housing Assistance Program, a temporary housing rental 
assistance and case management program for eligible individuals 
and households displaced by Hurricanes Katrina and Rita. The 
program is currently being administered through HUD's existing 
infrastructure of public housing agencies. Ultimately, over 
40,000 eligible households displaced by the 2005 Gulf Coast 
hurricanes will continue to have their rent paid through this 
partnership with HUD.
    Recognizing that mobile homes and trailers are not ideal 
housing solutions, Congress provided $400 million for FEMA to 
conduct an Alternative Housing Pilot Program to identify and 
evaluate alternatives to travel trailers and mobile homes. The 
project includes state-of-the-art engineering standards 
designed to maximize energy efficiency with environmentally 
sound materials. Once tested and proven, these alternatives 
could potentially be used in response to future disasters. 
After a competitive process, pilot projects in Alabama, 
Mississippi, Louisiana and Texas were selected grant awards.
    In September 2006, FEMA established a Joint Housing 
Solutions Group, whose purpose is to develop a systematic 
process to evaluate and rate various disaster housing options, 
identify viable alternatives to travel trailers and 
manufactured homes, and recommend improvements for conducting 
housing operations. After the issuance of the July 31, 2007, 
interim direction suspending the use of travel trailers and 
park models, FEMA tasked this Joint Housing Solutions Group to 
identify and evaluate potentially viable forms of alternative 
housing on an accelerated timeline.
    I am aware that the Chairman has introduced legislation, 
the Safe and Healthy Emergency Housing Act of 2007, which 
requires FEMA-provided housing to comply with HUD regulations. 
I am pleased to report that all manufactured housing, also 
known as mobile homes, purchased by FEMA before and after 
Hurricane Katrina met the regulatory standards enforced by HUD. 
While HUD does not regulate formaldehyde emission levels of 
construction materials for park models or travel trailers, FEMA 
has incorporated this HUD standard for construction materials 
for any purchases of temporary housing units. We will continue 
to meet with Federal agencies, industry leaders and health 
experts to incorporate measures into all units purchased by 
FEMA to ensure safe and secure housing.
    In summary, our recovery efforts continue. FEMA has learned 
from our experiences. We have a commitment to disaster victims 
that has never wavered. We are looking ahead. We have embraced 
a new philosophy.
    Thank you for the opportunity to testify. I would be 
pleased to answer any questions you may have.
    [The statement of Mr. Castillo follows:]

                 Prepared Statement Carlos J. Castillo
                            January 29, 2008

    Good morning Chairman Thompson, Ranking Member King, and Members of 
the committee. I am Carlos J. Castillo, the Assistant Administrator of 
the Disaster Assistance Directorate in the Department of Homeland 
Security's Federal Emergency Management Agency. I have proudly served 
in this role since July 2007. I am pleased to be here today to 
represent the Department and FEMA, and to discuss our continued efforts 
to provide assistance to those residents and communities still faced 
with difficult challenges as a result of the 2005 hurricane season.
    While nearly 2\1/2\ years have passed since the devastation of 
Hurricanes Katrina and Rita, FEMA continues to aggressively honor the 
administration's commitment to help rebuild the Gulf Coast. We have 
faced innumerable challenges along the way, challenges that have tested 
capabilities and, in many cases, have served as an impetus to reshape 
and improve how we deliver assistance.
    FEMA remains committed to confront each and every challenge that 
remains. I want to make clear that FEMA and our Federal, State, local 
government partners and private sector and voluntary agency partners, 
as well as Congress, have provided an unprecedented level of support 
and assistance to the people and communities of the Gulf Coast. Our 
sheltering and housing programs have reached and assisted millions of 
disaster victims, and provided or facilitated the means for hundreds of 
thousands of displaced evacuees to successfully find and move into 
long-term housing.
    Over $7.7 billion has been provided to more than 1.4 million 
households through FEMA's Individual and Households Program (IHP). This 
includes nearly $5.6 billion in Housing Assistance, and over $2.1 
billion in Other Needs Assistance. Nearly $2.5 billion of rental 
assistance has been distributed to over 730,000 households. FEMA has 
provided over $437 million in home repair payments, helping make more 
than 185,000 homes habitable across the Gulf Region following Katrina 
and Rita. In addition, FEMA has provided more than $345 million to over 
34,000 households to assist them toward the purchase of replacement 
housing.
    In response to Hurricanes Katrina and Rita, FEMA conducted the 
largest temporary housing operation in the history of the country, 
providing temporary housing units, at peak, to more than 143,000 
families across the Gulf Coast. While most of these families have 
transitioned to self-sufficiency, we continue to support the remaining 
43,864 households in temporary housing units as they find and 
transition into longer-term and more stable housing solutions.
    In my testimony today, I will be discussing a number of our 
programs aimed at assisting Gulf Coast communities and disaster 
victims. Specifically, these programs include our Gulf Coast Housing 
Strategy and Action Plans, the Disaster Housing Assistance Program, the 
Alternative Housing Pilot Program, our Joint Housing Solutions Group, 
formaldehyde testing and our mitigation assistance efforts which are 
being used to help Gulf Coast applicants rebuild and recover.

       FORWARD PROGRESS--GULF COAST HOUSING STRATEGY ACTION PLANS

    FEMA is committed to providing suitable long-term housing solutions 
to families impacted by Hurricanes Katrina and Rita who still reside in 
temporary housing units. While helping disaster victims find housing is 
among FEMA's top priorities in any disaster, FEMA has recognized that 
temporary disaster housing units should only be used as a last resort. 
FEMA only provides temporary housing units to eligible disaster 
applicants when no other housing resources, such as apartments, are 
available within reasonable proximity of the affected household's home, 
and when the victim specifically requests such assistance. Temporary 
housing units allow households to remain in or near their home 
communities, where they can reconnect with friends and family, return 
to their jobs and their children can return to their schools. Most 
often, these units are placed on the site of the household's damaged or 
destroyed dwelling, allowing the victims to protect their property and 
supervise the rebuilding of their homes. This form of temporary housing 
has proven enormously successful in many smaller-scale disasters, where 
the duration of occupation typically does not extend beyond 18 months. 
However, while many forms of traditional manufactured housing may prove 
invaluable to disaster victims anticipating a short occupation period, 
they were never designed for long-term occupation.
    Led by FEMA's Gulf Coast Recovery Office (GCRO), FEMA continues to 
work with remaining temporary housing occupants to ensure they have 
access to any and every available housing resource that can help speed 
their recovery. We are pleased that nearly 70 percent of the households 
that received temporary housing units following hurricanes Katrina and 
Rita have now moved out of those units and back into some form of 
permanent housing. The work of transitioning the remaining residents 
presents many challenges as we try to balance available resources with 
support needs of the families that reach beyond basic housing, but are 
often just as critical to the individuals' ability to return to self-
sufficiency. FEMA has been and continues to work aggressively with 
Federal partners as well as the States, local governments, and 
voluntary organizations to transition the remaining residents in FEMA 
temporary housing to more permanent, long-term housing, and to 
facilitate the support of other needs whenever possible. The FEMA GCRO 
developed a formal housing strategy in early 2007 to ensure a 
comprehensive approach to transitioning occupants to more suitable 
long-term housing and closing travel trailer group sites.
    To support the Gulf Coast Housing Strategy, each FEMA Transitional 
Recovery Office (TRO) developed a Housing Action Plan to detail 
specific goals, metrics, and tools for accomplishing this mission. Over 
the past several months, the FEMA GCRO and the TROs have refined the 
strategy and action plans based on new policy tools, ideas, and more 
targeted goals and metrics. The FEMA GCRO prepares detailed weekly 
progress reports to monitor and report progress in each State.
    FEMA developed job-specific training for our housing caseworkers to 
assist them in communicating with applicants. All FEMA field 
caseworkers in the Gulf Coast region have received this new training. 
FEMA also is implementing a Quality Assurance/Quality Control (QA/QC) 
process to ensure that our field staff are working and communicating 
effectively.
    In November 2007, FEMA announced plans to close group, industrial, 
and commercial housing sites in Louisiana and Mississippi. While our 
intention is to close these sites as families are transitioned into 
permanent housing, it is not, nor has it been, our intention to evict 
any individual or family currently living in a housing unit provided by 
FEMA or leave them homeless. The closure dates of all group and 
commercial sites have been communicated to all local governmental 
agencies, the States, and media for awareness and preparation. FEMA 
also keeps occupants informed by distributing a newsletter advising 
them of the dates that will affect them and informing them of 
activities regarding the mobile home and travel trailer sites. All 
sites that FEMA has closed thus far were due to parish or county 
mandates, landlord requests, or lease expiration dates. The group site 
closures are consistent with the goals and objectives that we 
established in our Gulf Coast Housing Strategy and Action Plans. The 
FEMA GCRO is working to close the travel trailer group sites by June 1, 
2008, the official start of the 2008 hurricane season. The site 
closures are scheduled after considering the heavily impacted and 
damaged areas, the availability of rental resources, and the ability to 
convert FEMA sites into donated mobile home sites. The sites in heavily 
impacted areas are scheduled to close last, in late spring 2008. Sites 
that are in areas with minimal or no rental resources are also not 
scheduled to close until the final months of this closure process.
    FEMA applicants living in our group sites are provided housing case 
managers who work with each occupant directly. Sixty days prior to the 
date of a site closure, notices are provided to each occupant, and case 
managers begin to work extensively with the applicants to assist and 
ensure that each family locates and secures suitable alternate housing. 
As more housing resources continue to become available along the Gulf 
Coast, we are working to relocate households out of group sites and 
into safer, more suitable long-term housing, such as apartments. FEMA 
field staff is working each day to find additional rental units and 
other housing resources into which families may relocate. Based on our 
current projections, there should be adequate rental stock available to 
accommodate households moving out of group sites as part of our closure 
efforts.
    Applicants are provided with the following options and are subject 
to some conditions:
   Rental units such as a house, apartment, or condo anywhere 
        in the United States, provided the landlord signs up for direct 
        payments through the contract with Corporate Lodging 
        Consultants (CLC), FEMA's agent in securing rental properties.
   FEMA caseworkers will provide the applicant with specific 
        rental units for consideration.
   The rent must be within 150 percent of Fair Market Rent 
        (FMR) to be fully reimbursed by FEMA. If the rental amount is 
        over the 150 percent of FMR, the applicant is responsible for 
        difference.
   Rental housing with direct subsidy payments to the 
        applicant.
   These payments are only made if the applicant has remaining 
        funds under their maximum grant allocation ($26,200 for 
        Hurricane Katrina) for the Individuals and Households Program 
        (IHP).
   Individuals who transition to rental units, and receive 
        rental assistance either from CLC or FEMA directly, will 
        subsequently be transitioned to the Disaster Housing Assistance 
        Program (DHAP), which I will address in more detail later in my 
        testimony.
   Reimbursements to cover relocations greater than 50 miles 
        from the applicant's current residence if the applicant's 
        assistance is below the maximum Individual and Households 
        Program grant amount.
   If the applicant is unable to find adequate housing, the 
        applicant can be relocated to a mobile home located in a 
        commercial site, if available.
    With these resources, and in partnership with their assigned 
housing caseworker, the majority of individuals and households are able 
to secure adequate housing options in or in close proximity to the 
areas they are from or wish to move. FEMA will continue to provide 
housing to all eligible applicants with a continued need for housing, 
and case managers will continue to work with applicants until the 
applicant finds alternate housing.
    Applicants who are ineligible for FEMA housing assistance and are 
located in sites that are closing are provided with 30 days of hotel 
assistance so that they can secure alternate housing. Their case 
managers continue to work with these individuals and families through 
referrals of rental resources and referrals to Voluntary Agency 
Liaisons for assistance. The liaisons work in-depth with the ineligible 
applicants and their contacts with non-profit organizations and State 
programs.
    FEMA is also actively working to increase the rental resources that 
are provided to the applicants in the affected sites that are closing 
by utilizing the following resources:
   HUD's National Housing Locator System;
   Internet sites;
   Newspaper classified ads;
   Realtor associations;
   Real estate magazines;
   Local governments and agencies, such as City Halls and 
        Chambers of Commerce;
   Word of mouth;
   Landlord housing fairs.
    Affordable housing, particularly rental units, is limited in many 
areas along the Gulf Coast. However, FEMA has taken steps to increase 
the amount of available rental units and reduce the other barriers that 
may slow the process for an applicant. FEMA redefined the current 
Corporate Lodging Consultants (CLC) contract on August 24, 2007 to 
improve landlord participation and the expanding the universe of rental 
properties by adding lease provisions to include the following:
   Authorizing payment of rental assistance above the current 
        Fair Market Rate;
   Payment to landlords for utilities if included in the rent 
        payment;
   Payment to landlords for repairs to property damage made by 
        disaster applicants;
   Payment of security deposits, and processing fees for 
        background checks required by some landlords; and,
   Assistance with locating furniture and other necessities to 
        meet basic living needs.
    In addition, in October 2007, FEMA reinstituted and expanded a 
reimbursement program that provides relocation assistance to disaster 
victims displaced by Hurricanes Katrina and Rita. This program 
reimburses relocation expenses up to $4,000 for applicants returning to 
their pre-disaster States. For those families that are already living 
in their pre-disaster State in FEMA-provided temporary housing, FEMA 
will pay moving expenses to a FEMA-funded rental resource anywhere in 
the continental United States, if the new location is greater than 50 
miles from the applicant's current location in the State. Relocation 
assistance is limited to travel costs, furniture transportation 
expenses, and moving services, and is subject to the overall maximum 
amount of assistance that applicants can receive under the IHP program.

                  DISASTER HOUSING ASSISTANCE PROGRAM

    One of our biggest challenges has been, and continues to be, 
helping families displaced by Hurricanes Katrina and Rita transition to 
secure long-term housing. While progress has been slow, it has also 
been steady, aided in no small measure by our ability to effectively 
marshal and focus the resources, efforts and expertise of the Federal 
and voluntary communities on the persistent needs of those for whom 
recovery remains a continuing challenge. The Department of Housing and 
Urban Development (HUD), with its recognized expertise in providing 
long-term housing programs, has been a particularly important partner.
    On July 26, 2007, FEMA and HUD executed an Interagency Agreement 
(IAA) establishing the Disaster Housing Assistance Program (DHAP), a 
temporary housing rental assistance and case management program for 
eligible individuals and households displaced by Hurricanes Katrina and 
Rita. The program is currently being administered through HUD's 
existing infrastructure of Public Housing Agencies (PHAs). Local PHAs 
were awarded grants to provide rent subsidies to eligible individuals 
and households for a period not to exceed 15 months beginning December 
1, 2007 and ending March 1, 2009. The designated PHAs will also provide 
case management services, which will include a needs assessment and 
individual development plan (IDP) for each family. The objective of the 
case management services is to promote self-sufficiency for the 
participating individuals and households. Ultimately, over 40,000 
eligible residents displaced by the 2005 Gulf Coast hurricanes will 
continue to have their rent paid through this partnership with HUD.
    Since this partnership began, HUD and FEMA have been working 
together to transfer information about tenants and their housing 
situation to ensure that the transition from one agency to another is 
as smooth as possible. In addition, HUD and PHAs have been aggressively 
reaching out to families eligible for assistance, sending letters, 
knocking on doors and calling households to verify information and 
ensure that no individual falls through the cracks. HUD has also 
deployed staff members to those cities where the largest numbers of 
displaced families are currently living.
    This is the first time the Federal Government has ever carried out 
such a program. As you may imagine, there are many challenges 
associated with such a transition. Understanding and clarifying the 
authorities of each agency, ensuring the right mix of skills and 
expertise to manage the caseload, and exchanging large amounts of 
complex data have been among the challenges that FEMA and HUD have 
faced and resolved, and both agencies are committed to continue to work 
together to make this new program work.

                   ALTERNATIVE HOUSING PILOT PROGRAM

    Recognizing that mobile homes and trailers are not ideal housing 
solutions, Congress provided $400 million for FEMA to conduct an 
Alternative Housing Pilot Program (AHPP) to identify and evaluate 
alternatives to travel trailers and mobile homes. The projects include 
state-of-the-art engineering standards, designed to maximize energy 
efficiency with environmentally sound materials. Once tested and 
proven, these alternatives could potentially be used in response to 
future disasters. The AHPP sites will also include recreational areas 
for both children and adults, community spaces, and support services 
for disaster-affected households.
    After a competitive process, pilot projects in Alabama, 
Mississippi, Louisiana and Texas were selected for grant awards. 
Consistent with other Federal grants, following their selection, 
applicant States were required to provide additional supporting 
information, including detailed project and budget information, prior 
to award of the grant funds. In April 2007, FEMA awarded $275,427,730 
to the State of Mississippi for the Park Model and Mississippi Cottage 
project. Mississippi is in the process of installing these units and 
has already begun moving families into the new housing alternatives. As 
of January 9, 2008, Mississippi has a total of 1,301 units installed 
and 1,195 of those units are occupied.
    In August 2007, FEMA awarded $15,667,293 to the State of Alabama 
for the city of Bayou La Batre project. In September, 2007, FEMA 
awarded $74,542,370 to the State of Louisiana to fund the Louisiana 
Katrina Cottage and Carpet Cottage project. In December, 2007 FEMA 
awarded $16,471,725 to the State of Texas for the Heston Homes project. 
FEMA expects a total of 4,160 units as a result of these projects. The 
expected total production of units is as follows: Texas: 60; 
Mississippi: 3,500; Louisiana: 500; Alabama: 100.
    We look forward to learning from these pilot projects, and are 
hopeful they will provide valuable and viable housing options for use 
in future disasters.

                     JOINT HOUSING SOLUTIONS GROUP

    In September, 2006, FEMA established the Joint Housing Solutions 
Group, whose purpose is to develop a systematic process to evaluate and 
rate various disaster housing options, identify viable alternatives to 
travel trailers and manufactured homes, and recommend improvements for 
conducting disaster housing operations. After the issuance of FEMA's 
July 31, 2007 Interim Direction suspending the use of travel trailers 
and park models, FEMA tasked the Joint Housing Solutions Group to 
identify and evaluate potentially viable forms of alternative housing 
on an accelerated timeline. The Joint Housing Solutions Group 
identified several promising forms of alternative housing that FEMA may 
pilot test in field conditions in future disasters. In the mean time, 
the Joint Housing Solutions Group will continue to identify and assess 
the relative merits of additional prospective forms of alternative 
housing.

                          FORMALDEHYDE TESTING

    FEMA's top priority is the safety of disaster victims, particularly 
those occupying temporary disaster housing. As you know, FEMA has been 
taking positive steps to address concerns regarding formaldehyde and 
the air quality in these temporary housing units.
    Formaldehyde is a biological compound frequently encountered in the 
environment as a product of combustion or other common chemical 
reactions. It is also present in low levels in the human body as a by-
product of biological processes. At higher levels in air, especially 
indoors, formaldehyde can be irritating to the respiratory system, and 
the International Agency for Research on Cancer has determined that 
formaldehyde may reasonably be anticipated to be a human carcinogen. 
Although scientists have studied the health effects of formaldehyde 
exposure for over 30 years, no Federal agency has yet determined a safe 
or unsafe level in residential indoor air. Even in ``occupational'' 
settings, estimates of ``safe'' levels are widely divergent.
    FEMA field staff became aware of the first reported concerns of 
formaldehyde by a Gulf Coast travel trailer occupant in March 2006. 
FEMA continued to monitor the number of formaldehyde reports, and in 
May 2006 as they began to increase, indicating that the concerns might 
not be isolated occurrences, FEMA began consulting with the 
Environmental Protection Agency (EPA), the Agency for Toxic Substances 
and Disease Registry (ATSDR) within the Department of Health and Human 
Services (HHS) and the mobile home industry to gather information about 
the presence and effects of formaldehyde.
    We also began widespread distribution of information to travel 
trailer occupants across the Gulf Coast identifying potential sources 
of formaldehyde. Flyers with information about mitigation techniques, 
such as proper ventilation, were distributed to all travel trailer 
occupants in July 2006.
    In September 2006, FEMA modified an interagency agreement with the 
EPA to begin testing for formaldehyde in travel trailers. The EPA 
testing involved collecting air samples from a sample of new, unused 
travel trailers during the months of September and October at a staging 
area in Baton Rouge, LA. Test results were then forwarded to ATSDR in 
November 2006 for evaluation. These results showed that ventilation 
could reduce the formaldehyde levels in trailers. In February 2007, the 
results of the testing performed by the EPA, with initial analysis by 
ATSDR, were released, and information and guidance based on the results 
of the study were provided to the residents of the travel trailers.
    In July 2007, FEMA distributed a formaldehyde and housing fact 
sheet to the occupants of every FEMA trailer across the Gulf Coast 
(70,000 flyers), as well as throughout the rest of the country. The 
fact sheet provided basic information about formaldehyde, including 
possible medical effects, ventilation techniques, and contact 
information for assistance. FEMA also set up call centers for 
applicants living on group/commercial or private sites who have 
concerns, questions or request information about formaldehyde. In 
October 2007, ATSDR released its subsequent analysis of the results, 
including clarifications of its initial analyses.
    Secretary Chertoff and Administrator Paulison have each made it 
clear that anyone who wants to move out of their temporary housing unit 
because of formaldehyde concerns will be offered alternative housing. 
Every person who has called FEMA's formaldehyde call centers with 
concerns has been offered an immediate move to a hotel or motel until 
alternative housing is located. Three hundred forty-six applicants have 
accepted the offer of a hotel/motel. As of early January 2008, all of 
the 4,609 applicants who requested alternate housing have been offered 
alternative housing options. Of those, 2,252 have moved to another 
housing option. Five hundred fifty-seven applicants have refused all 
housing alternatives. (Note: Data as of December 28, 2007.) FEMA 
continues to provide case management services to remaining applicants 
while they make final decisions about their relocation alternatives.
    In addition to providing alternative housing to applicants, FEMA 
asked the DHS Office of Health Affairs (OHA) and the Chief Medical 
Officer to work with CDC to determine the best scientifically valid 
approach to address this issue. In August 2007, FEMA and CDC entered 
into an Inter-Agency Agreement to initiate and complete testing 
occupied units and to provide technical assistance and public health 
guidance to FEMA to evaluate the indoor environmental air quality in 
temporary housing units and the associated health effects to residents. 
Though the process has been time-consuming, it was imperative that 
testing be conducted appropriately and intelligently so that it will 
yield scientifically valid and accurate results.
    The testing, to have originally begun in early November, was 
temporarily delayed to provide FEMA an opportunity to coordinate with 
CDC and other Federal entities, on the development of procedures and 
guidance for providing meaningful, risk-informed results to trailer 
residents and the public. This protocol was necessary to have a basis 
to explain to the occupants what the test results mean. FEMA wanted to 
make sure that the results of that testing will help occupants make 
informed decisions about their health concerns and permanent housing 
needs. CDC began indoor air sampling in December 2007 to determine 
formaldehyde levels inside a representative sample of 500 occupied 
trailers in Mississippi and Louisiana. We expect to have the results in 
February 2008.
    I am aware that the Chairman has introduced legislation, ``The Safe 
and Healthy Emergency Housing Act of 2007,'' which requires housing 
provided by FEMA to comply with HUD regulations. I am pleased to let 
you know that all manufactured housing (also known as ``mobile homes'') 
purchased by FEMA before and after Hurricane Katrina met the regulatory 
standards enforced by HUD. While HUD does not regulate formaldehyde 
emission levels of construction materials for park models or travel 
trailers, FEMA has incorporated this HUD standard for construction 
materials for any new purchases of temporary housing units. FEMA has 
met and will continue to meet with Federal agencies, industry leaders 
and health experts to incorporate measures into all units purchased by 
FEMA to ensure safe and secure housing. We are currently purchasing 
accessible park models which exceed HUD construction material standards 
and each unit includes a valid emissions certificate provided by an 
approved testing entity.

                               MITIGATION

    FEMA has also worked with States and local communities to help them 
rebuild smarter, safer and stronger. As the region rebuilds, it must do 
so in a way that makes it less vulnerable to damage from future hazard 
events. FEMA's Hazard Mitigation Grant Program (HMGP) provides funds to 
State and local governments to help them implement long-term hazard 
mitigation measures following a major disaster declaration. The 
mitigation measures are designed to reduce the loss of life and 
property in future disaster events, and reduce the costs to citizens, 
communities, States and the Federal Government in responding to and 
recovering from future events. Individual States are responsible for 
managing their HMGP funds, and it is up to each State to determine what 
their mitigation priorities will be. However, HMGP funds may be used to 
flood-proof or elevate existing properties, acquire and relocate homes 
from hazard-prone areas, and implement minor flood control measures, 
among other eligible activities.
    The HMGP is one of the best institutional measures available to 
help ensure that when the next disaster hits the Gulf Coast, States and 
local communities have taken action to reduce their vulnerabilities. 
The administration and the Department are committed to ensuring this 
happens. In October 2007, the Office of Management and Budget (OMB) 
granted a waiver, requested by FEMA, from requirements of OMB Circular 
A-87, which pertain to pre-award costs of HMGP grants. This waiver 
permits FEMA to establish a limited exception for retroactive approvals 
of post-disaster HMGP grants for properties damaged by Hurricanes 
Katrina and Rita in Mississippi and Louisiana, where mitigation work 
has already begun or been completed. Such retroactive approvals 
normally would be prohibited by Federal requirements. The limited 
exception will allow the costs of such actions to count toward the 
States' required non-Federal match under the HMGP or, in some cases, 
will allow property owners to be partially reimbursed for mitigation 
actions taken while repairing or rebuilding. Eligible activities 
include structural elevation, mitigation reconstruction, retrofitting 
the structure for hazard protection, and demolition of a damaged 
residential or commercial structure where prospective open space 
acquisition or mitigation reconstruction is proposed; however, each 
State will determine to what extent they will implement the authorities 
provided by FEMA under the limited exception.
    In Louisiana, $1.47 billion is available under the HMGP for 
Hurricanes Katrina and Rita. As of January 2, 2008, FEMA has obligated 
over $77.2 million in Federal funds for HMGP projects and State 
management costs in Louisiana, and FEMA is currently reviewing an 
additional $18.9 million in applications submitted by the State. 
Louisiana has until March 1, 2008 to submit applications for the 
remaining HMGP funds. In late December 2007, Louisiana requested an 
extension of this deadline and FEMA is currently reviewing this 
request.
    In Mississippi, $433 million is available under the HMGP for 
Hurricane Katrina. As of January 2, 2008, FEMA has received 
applications totaling $49 million, and has obligated $41.1 million in 
HMGP funds to Mississippi. FEMA is currently reviewing applications for 
$7.4 million. Mississippi has until March 2, 2008 to submit 
applications for the remaining $384 million. Mississippi has submitted 
a preliminary request to extend this deadline and is compiling 
additional information to support this request. FEMA will review this 
request when the supporting information is provided.
    FEMA's Transitional Recovery offices are also working with Alabama 
and Texas to implement mitigation projects. Seventy-one million dollars 
are available in Alabama for HMGP, of which $18.1 million has been 
obligated and $37 million in additional applications are currently in 
review. Alabama has until February 24, 2008 to submit additional 
applications and FEMA is currently reviewing a request from the State 
of Alabama to extend this deadline. One hundred three million dollars 
are available in Texas for HMGP as a result of Hurricane Rita. Texas 
has submitted applications for the full amount of funding available 
and, as of January 2, 2008, $67.1 million has been obligated.
    Through October 2007, the National Flood Insurance Program (NFIP) 
has paid out over $16.6 billion in NFIP claims in the Gulf Coast, 
including $13.4 billion on over 187,000 claims in Louisiana alone. Over 
99 percent of all claims filed have been closed.
    Through both the HMGP and the NFIP, the Gulf Coast is getting 
assistance to enable States, communities and property owners to rebuild 
safer and stronger and to take steps to reduce their vulnerability to 
future hazards.

                                SUMMARY

    In summary, our recovery efforts continue. FEMA and our State 
partners have been confronted by a number of unanticipated challenges 
and obstacles, yet FEMA remains committed to utilizing the new 
resources and authorities provided by Congress to assist communities 
and victims of this disaster to effect a full recovery. That said, we 
still have much work to do. Nevertheless, we expect and look forward to 
continued close collaboration and cooperation with Congress, as well as 
with our Federal, State and local government and private sector and 
voluntary agency partners. Thank you for the opportunity to testify. I 
would be pleased to answer any questions you may have.

    Chairman Thompson. Thank you for your testimony.
    I now recognize Dr. Falk to summarize his statement for 5 
minutes.

STATEMENT OF HENRY FALK, MD, MPH, DIRECTOR, COORDINATING CENTER 
  FOR ENVIRONMENTAL HEALTH AND INJURY PREVENTION, CENTERS FOR 
DISEASE CONTROL AND PREVENTION, DEPARTMENT OF HEALTH AND HUMAN 
                            SERVICES

    Dr. Falk. Good afternoon, Chairman Thompson, Ranking Member 
King and other distinguished Members of the committee. My name 
is Henry Falk, and I very much appreciate the opportunity to 
testify and provide an update on the CDC activities related to 
evaluating formaldehyde exposure and health concerns in travel 
trailers and mobile homes. We are very much committed to doing 
this work and committed to doing it very openly and 
transparently.
    CDC is currently completing the field work on study of 
formaldehyde levels in approximately 500 travel trailers and 
mobile homes. As you know, we briefed congressional staff, the 
public and others before the field work began in early 
December. We hope to do the same as soon as the results are 
ready, to brief everybody, do it very openly, in late February, 
if all goes well. We will similarly provide a detailed briefing 
to this committee and others.
    In addition to the study on the occupied trailers, this is 
one of a number of studies that are detailed in a written 
statement. I will try not to go into all of those right now, 
but I will be happy to answer questions on all of them. We are 
also looking at unoccupied trailers and engage in studies--in 
developing studies to look at the health of children who have 
been exposed to formaldehyde. All of this is in response to a 
letter from Administrator Paulison to Dr. Gerberding on July 
13, 2007, requesting assistance and joint effort working on 
this.
    In view of much of the public discussion over the past day, 
I want to recognize that this hearing takes place in the 
context of that earlier work. I would like to comment on this, 
express my willingness today and in follow-up to this hearing 
to help the committee address the full range of issues related 
to this.
    I have worked at CDC and ATSDR for 36 years. Any time there 
are questions raised about the independence of our work, this 
is a great concern to me. So I would like to address briefly 
this prior ATSDR health consultation, as I will refer it to, 
and recognize, you know, that there were issues related to 
that, talk about the key lessons that we have learned and the 
important steps going forward. I think that the lessons learned 
are certainly reflected in work that we are currently doing.
    Very briefly, that work relates to a request that came 
through the Office of General Counsel at FEMA to staff 
scientists at CDC requesting an evaluation of data that had 
been collected by another agency in 96 unoccupied trailers. 
There was a report that was--health consultations released in 
early February. There were clarifications given afterwards and 
then ultimately a revised health consultation issued in 
October. I would like to contrast in terms of my own 
understanding of this situation between what we are doing 
currently to the prior health consultation.
    The current effort resulted from a letter, a request from 
Administrator Paulison to Dr. Gerberding for assistance. It 
engaged senior staff. It asked for a broad look at the issues, 
involved CDC design of studies, involved briefings and, I 
trust, transparency in what we are doing. The prior effort 
resulted from what I think was a narrowly construed request 
from Office of General Counsel to nonsupervisory staff which 
persisted in a narrow context for sometime later on. It engaged 
senior staff and involved some of the correspondence which you 
had noted. Attempts were made to correct any misimpressions 
related to that. But I think it is very different than the 
current effort.
    I would like to say what we have learned from that prior 
ATSDR consultation that we are utilizing in the current effort. 
We are fully cooperating with all congressional inquiries. We 
have looked at our own internal efforts within the agency, in 
terms of management of clearance procedures and supervisory 
procedures.
    We were concerned about direct requests from Office of 
General Counsel to staff, and I wrote to Administrator Paulison 
about that. I felt those kinds of requests should go through 
CDC general counsel.
    We have undertaken affirmative outreach to the community, 
Congress and the public and others on all the work that we are 
doing, and feel that we must maintain a broad view of our 
responsibilities and address the holistic concerns.
    So I hope that we have reasserted the kind of important 
role the CDC ATSDR can play in designing and executing studies 
in an open and transparent way and applying this experience in 
our current effort. We have only one interest going forward, 
and that is to do the best possible job, working closely with 
you, the public and the travel trailer residents in a very open 
and transparent way, doing whatever we can to evaluate the 
formaldehyde exposures and help people in decision-making and 
prevent any potential for health concerns.
    Thank you.
    [The statement of Dr. Falk follows:]

               Prepared Statement of Henry Falk, MD, MPH
                            January 29, 2008

                              INTRODUCTION

    Good afternoon Chairman Thompson and other distinguished Members of 
the committee. Thank you for the opportunity to provide an update on 
the Centers for Disease Control and Prevention (CDC) activities 
evaluating health concerns related to trailers and mobile homes used by 
the Federal Emergency Management Agency (FEMA) as temporary housing.

                               BACKGROUND

    FEMA officially requested CDC assistance in answering questions 
related to indoor air quality of the trailers and mobile homes, and the 
health of the occupants of those temporary housing units, in a letter 
to CDC Director Dr. Julie Gerberding dated July 13, 2007. Following 
discussions with FEMA and the Department of Homeland Security, CDC 
identified four areas for its work: (1) Expert panel review; (2) indoor 
air quality assessments (for occupied and unoccupied travel trailers 
and manufactured housing (mobile homes)); (3) child health study; and, 
(4) health communication.
    Much of the on-going health concern that residents of FEMA-provided 
temporary housing units have communicated to FEMA relates to possible 
formaldehyde exposure. Formaldehyde is a colorless, flammable gas that 
has a distinct, pungent smell. It is used in the production of 
fertilizer, paper, plywood, and urea-formaldehyde resins. It also is 
used as a preservative in some foods and in many products used around 
the house. Low levels of formaldehyde can cause irritation of the eyes, 
nose, throat, and skin. The International Agency for Research on Cancer 
has determined that formaldehyde may reasonably be anticipated to be a 
carcinogen.

                          EXPERT PANEL REVIEW

    On September 18, 2007, CDC convened an independent panel of experts 
to obtain the best scientific knowledge about indoor air quality in 
travel trailers and mobile homes used by FEMA as emergency temporary 
housing. The panel members looked at issues related to, but not limited 
to, formaldehyde, and individually provided scientific input to CDC in 
the design of the indoor air quality assessments and the child health 
study.
    The expert panel provided a draft report to CDC on October 19, 
2007. CDC reviewed the draft and requested clarification of certain 
comments and recommendations contained in the report. CDC received a 
final version of the report on December 3, 2007, a summary of which is 
posted on the CDC Web site at: http://www.cdc.gov/nceh/ehhe/
trailerstudy/pdfs/FEMAExpertPanelSummary.pdf.
    CDC will reconvene the expert panel later this year to discuss the 
results of the indoor air quality assessments and the revised child 
health study protocol.
    Two major recommendations in the panel report are:
   Travel trailers were not designed for long-term housing for 
        families and efforts should be made to limit the use of these 
        units to short-term emergency housing only.
   CDC should use similar methodologies in each of the sampling 
        plans for occupied and unoccupied travel trailers and mobile 
        homes, and for the children's health study. The report also 
        provides support for the evaluation of indoor air quality in 
        travel trailers and mobile homes used by FEMA as temporary 
        housing and guidance on epidemiological issues for the 
        children's health study.

                     INDOOR AIR QUALITY ASSESSMENTS

    In discussions with FEMA, CDC identified two important issues with 
respect to air quality--and formaldehyde levels--in travel trailers and 
mobile homes. First, there is a need to understand what air quality 
issues exist under actual living conditions in the units; and second, 
it is important to identify practical means of reducing indoor air 
levels of formaldehyde. To address these issues, CDC determined that it 
would be necessary to test both occupied and unoccupied units.
Occupied Units
    CDC's testing of occupied units involves a representative sample of 
approximately 500 occupied travel trailers and mobile homes in 
Mississippi and Louisiana purchased by FEMA to provide temporary 
housing. These tests will determine formaldehyde levels under actual 
living conditions. The temporary housing units that were tested are 
representative of the various manufacturers and models being used in 
substantial numbers in the two States.
    CDC originally had a contract in place that could have resulted in 
testing in early November. On review of the testing plan, however, a 
joint interagency panel determined that before testing should be done, 
there needed to be an understanding of how various results could be 
interpreted and actions that would need to be taken based on these 
results. These analyses were completed during the month of November, a 
new contract was awarded on December 11, 2007, and field work began on 
December 21, 2007.
    In addition to collecting formaldehyde samples, there was also a 
brief questionnaire and a walk-through of the units to identify other 
visible problems such as mold.
    As of January 23, 2008, CDC completed sampling of occupied units. 
The contractor is expected to provide CDC a database, which will 
include formaldehyde levels, the week of February 4, 2008. Participants 
will be notified of their results in person by approximately 25 teams 
that will include representatives from both the Department of Health 
and Human Services (HHS) and FEMA. The notification visits are expected 
to begin the week of February 18 and be completed as expeditiously as 
possible, within approximately 3 weeks or less. In addition, CDC plans 
to offer informational sessions at which the public, including 
residents of units that were not tested, will have the opportunity to 
ask questions about CDC's findings.
Unoccupied Units
    CDC is assessing formaldehyde levels across different models and 
classes of unoccupied travel trailers and mobile homes used by FEMA as 
temporary housing. The purpose of this sampling is to identify the 
factors that may predict high exposure scenarios inside the units, and 
to investigate cost-effective solutions to reduce the formaldehyde 
concentrations. Components of travel trailers and mobile homes are 
being tested for off-gassing of formaldehyde. FEMA is providing the 
units to be tested.
    CDC began initial field work to assist in protocol development in 
late July, 2007. From September 25-27, CDC sampled more than 50 
unoccupied travel trailers and mobile homes stored in Mississippi to 
determine the range of formaldehyde levels in the various units. CDC 
collected samples of travel trailer and mobile home components from 
November 14-16 for testing at Lawrence Berkeley National Laboratory 
under an interagency agreement. In addition, CDC is working with NASA 
to evaluate photocatalytic oxidation air cleaning technologies. Other 
potential methods will also be tested, including ventilation and 
treatment of the travel trailers.

                      CHILD HEALTH INVESTIGATIONS

    The possibility of health effects associated with living in FEMA-
provided travel trailers and mobile homes was first brought to the 
public's attention by pediatricians in Mississippi and Louisiana who 
observed respiratory and skin symptoms in their patients that they 
thought might be associated with living in the trailers. Investigating 
the possible relationship between residing in these units and 
children's health is an important component of CDC's overall 
investigation.
    The goal of the children's health investigations is to determine if 
there is an association between living in a FEMA-provided travel 
trailer or mobile home in a storm damaged region of the U.S. Gulf 
Coast, and adverse health effects such as respiratory illness and 
dermal reactions in children. Below are descriptions of two health 
investigations, one well underway, and the other in development:
   A chart review of medical records of children who were 
        treated for respiratory illness, skin conditions, or 
        gastrointestinal illnesses in Hancock County, Mississippi. 
        Field work was conducted in November 2007 with all pediatric 
        health care providers in the county. Data analysis and follow-
        up interviews are currently being conducted. Analysis is 
        expected to be completed in February 2008.
   A cohort study of children who lived in trailers in areas of 
        Texas, Louisiana, Mississippi, and Alabama, and were affected 
        by Hurricanes Katrina and Rita. Children will be recruited from 
        FEMA aid lists. Participating children will be followed for 
        approximately 5 years. CDC is currently preparing a protocol 
        for the study and expects to apply for Institutional Review 
        Board (IRB) approval in February 2008.

                          HEALTH COMMUNICATION

    The goal of CDC's health communication program is to provide 
residents with information to help them make decisions on where to 
live, and how to reduce risks. CDC has worked closely with FEMA to 
develop key messages and communications strategies related to FEMA-
provided trailers and mobile homes and health concerns of residents.
    Teams of communication specialists from CDC have spent time in 
Louisiana and Mississippi meeting with focus groups comprised of 
residents, community leaders, and health care providers to identify the 
particular health information needs of residents living in FEMA-
provided travel trailers and mobile homes.
    The teams also worked with members of the community to develop the 
best means of reaching this specific segment of the public. The teams 
learned that, while television often is a useful way of disseminating 
health guidance, many of the people most in need of the information do 
not have televisions. Community suggestions led to the use of other 
mechanisms through which information could reach the largest number of 
temporary housing residents.
    CDC has developed a series of printed materials, in multiple 
languages, aimed at residents and health care providers. Materials 
provide information on formaldehyde as well as other indoor air quality 
issues, and help residents assess their level of risk and how to reduce 
it. CDC also has developed messages for radio and other audio 
distribution. These materials are available online at http://
www.cdc.gov/nceh/ehhe/trailerstudy/default.htm.
    In addition, as noted above, residents whose units were tested will 
be notified of their results by a team comprised of representatives 
from HHS and FEMA. And, CDC continues to respond to inquiries from the 
public and the news media about health concerns related to FEMA 
provided travel trailers and mobile homes.

                               CONCLUSION

    CDC has responded to a request from FEMA for assistance in 
assessing health concerns related to travel trailers and mobile homes 
used as temporary housing. CDC began work in July 2007, following 
receipt of the request, and devised a multiple-part approach to assess 
actual exposures, determine if feasible methods exist to reduce 
formaldehyde levels, develop knowledge and understanding of health 
effects in vulnerable populations, and provide residents and health 
care providers with health information to recognize and reduce health 
effects potentially related to indoor air quality issues.
    It is important to note that formaldehyde is not the only potential 
health issue related to living in temporary housing units. Other 
potential health issues relate to mold and moisture, safety concerns, 
mental health issues, and disruption of day-to-day lives. CDC has 
attempted to consider the range of health issues to ensure that we do 
not focus entirely on formaldehyde and overlook other issues that are 
important to public health.
    We agree with FEMA that the long-term goal is to move displaced 
residents into more permanent housing instead of travel trailers. CDC's 
goal is to help residents reduce risks to their health until then, and 
protect their health during the process of relocating to permanent 
housing.
    Thank you for the opportunity to provide this testimony on CDC's 
activities related to health concerns and FEMA temporary housing units. 
I would be happy to answer any questions you may have.

    Chairman Thompson. Thank you for your testimony.
    I now recognize Mr. Bregon to summarize his statement for 5 
minutes.

    STATEMENT OF NELSON R. BREGON, GENERAL DEPUTY ASSISTANT 
   SECRETARY, OFFICE OF COMMUNITY PLANNING AND DEVELOPMENT, 
          DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

    Mr. Bregon. Good afternoon, Chairman Thompson, Ranking 
Member King, distinguished Members of this committee. My name 
is Nelson Bregon. I am the general deputy assistant secretary 
in the Office of Community Planning and Development with the 
Department of Housing and Urban Development.
    I will specifically discuss how the five States in the Gulf 
Coast are addressing their housing needs and the programs they 
have proposed to ensure safe and effective housing for 
residents impacted by Hurricanes Katrina, Rita and Wilma.
    In response to the disasters, the President signed three 
supplemental spending under the CDBG funds. The first CDBG 
supplemental provided $11.5 billion, and this supplemental 
appropriation was signed on December 30, 2005. Within 1 month, 
Secretary Jackson allocated these funds based on the areas of 
highest needs and with the greatest concentration of 
destruction. In June 2006, the President signed the second CDBG 
supplemental, providing an additional $5.2 billion. Secretary 
Jackson again promptly allocated these funds to the affected 
States. The third supplemental, most recent, was signed in 
November 2007, and this supplemental provided an additional $3 
billion, specifically for the State of Louisiana's Road Home 
homeowner assistance program.
    To date, almost $20 billion has been appropriated for CDBG 
grants to assist the States of Alabama, Florida, Louisiana, 
Mississippi and Texas, the five Gulf States impacted by 
Hurricanes Katrina, Rita and Wilma. Of these amounts, States 
have proposed housing programs totaling about $15 billion, or 
approximately 75 percent of the total amount appropriated. In a 
little over 2 years since the first supplemental 
appropriations, the States have expended over $8.3 billion of 
CDBG recovery activities, and over $7.5 billion of which has 
been for housing assistance activities.
    The first two CDBG supplemental appropriations acts passed 
by Congress were very clear in their intent and extraordinary 
in the flexibility provided to the States, far beyond the 
traditional nature of such supplemental block grants funding. 
Congress directed HUD that we shall waive all regulations and 
statutes which act as barriers for the implementation of the 
Governors' proposed action plans. Only four areas could not be 
waived by the Secretary. These were fair housing, 
environmental, civil rights and Davis-Bacon labor standards.
    HUD's primary role was to provide technical assistance on 
the Federal program requirements and thereafter monitor the use 
of funds, but not to dictate uses of funds or the amounts to be 
set aside for each individual activity unless otherwise 
specified by Congress. The eligible States would have complete 
flexibility in determining the design, establishing funding 
levels and carrying out activities to achieve their goals. This 
approach has allowed each of the five States to tailor its 
recovery programs to best address the needs of the citizens of 
its State.
    The State of Louisiana and Mississippi elected to implement 
a homeowner compensation program. The compensation model 
provides eligible homeowners with a grant for uncompensated 
property losses to the primary residents. In consideration for 
such assistance, homeowners would agree to covenants on their 
property that would require any new or rehabilitated structure 
to meet modern building codes and FEMA requirements. 
Mississippi has assisted over 15,000 homeowners, and the State 
of Louisiana has assisted over 93,000 homeowners under these 
compensation programs.
    As stated previously, each State was given the flexibility 
to adopt its own recovery plans. The States of Alabama and 
Florida went with more conventional--implementing a more 
traditional, conventional program. They distributed the moneys 
to the local units of government, and these units of local 
government then did the housing rehabilitation or 
infrastructure projects.
    The State of Texas, from the first $74.5 million that they 
received from the first supplemental, they decided to undertake 
a housing rehabilitation through its councils of governments. 
That program would assist approximately 452 homeowners. From 
the larger second CDBG supplemental of $428 million, the State 
of Texas is running its primary homeowner housing 
rehabilitation assistance program. Under this program, Texas 
proposes to assist an additional 15,000 lower-income 
homeowners.
    One factor influencing the choice of whether a State does a 
compensation program or a rehabilitation program is the trade-
off between time constraints of the environmental review 
requirement versus greater control of the undertaking. The 
State of Texas decided to have a greater control over its 
program and decided to do a rehabilitation program, which 
entails the State working directly with homeowners through its 
local units of government doing housing inspections, doing 
specifications, contracting with local contractors, looking at 
the inspection, approving the certificate of occupancy, which 
is more time-consuming. However, it is a program that provides 
more accountability.
    Chairman Thompson. We will get on with your testimony 
during questions.
    Mr. Bregon. Yes, sir. Well, I will open it for questions 
then, and we will submit our written testimony. I thank you.
    [The statement of Mr. Bregon follows:]

                 Prepared Statement of Nelson R. Bregon
                            January 29, 2008

    Chairman Thompson, Ranking Member King, distinguished Members of 
the committee: I am Nelson Bregon, the General Deputy Assistant 
Secretary for the Office of Community Planning and Development at the 
U.S. Department of Housing and Urban Development. On behalf of 
Secretary Alphonso Jackson, I am honored to have the opportunity to 
discuss the results and experiences the Gulf Coast States have had in 
addressing their disaster recovery needs through the Community 
Development Block Grant (CDBG) program. I will specifically discuss how 
they are addressing their housing needs and the programs they have 
proposed to ensure safe and effective housing for residents impacted by 
hurricanes Katrina, Rita, and Wilma.
    In response to the disasters, the President signed three 
supplemental spending bills in which CDBG funds were appropriated. The 
first CDBG supplemental provided $11.5 billion in CDBG disaster 
recovery funding on December 30, 2005. Within 1 month, Secretary 
Jackson allocated these funds based on areas of highest need and with 
greatest concentration of destruction. In June 2006, the President 
signed the second CDBG supplemental providing an additional $5.2 
billion and Secretary Jackson promptly allocated these funds to the 
affected States. The third supplemental was signed in November 2007, 
providing an additional $3 billion specifically for the State of 
Louisiana's ``Road Home'' homeowner assistance program.
    To date a total of $19.673 billion has been appropriated for 
Community Development Block Grants to the five Gulf States impacted by 
hurricanes Katrina, Rita, and Wilma. Of this amount, States have 
proposed housing programs totaling over $14.8 billion, or 75.3 percent 
of the amounts appropriated. In a little over 2 years since the first 
supplemental appropriation, the States have expended over $8.3 billion 
for CDBG recovery activities, over $7.5 billion of which has been for 
housing assistance activities.
    The first two CDBG supplemental appropriations acts passed by 
Congress were clear in their intent and extraordinary in the 
flexibility provided to the States, far beyond the traditional nature 
of such supplemental block grant funding. Congress directed that HUD 
shall waive all regulations or statutes which act as a barrier to 
implementation of the Governor's plan. Only four areas could not be 
waived: Fair housing, environmental, civil rights and the Davis-Bacon 
Act's related prevailing wage requirement. HUD's primary role was to 
provide technical assistance on the Federal program requirements and 
monitor the use of funds, but not dictate uses of funds or the amounts 
to be set aside for each activity unless otherwise specified by 
Congress. The eligible States would have complete flexibility in 
determining design, establishing funding levels, and carrying out the 
activities to achieve their goals. This approach has allowed each of 
the five States to tailor their recovery programs to best address the 
needs of the citizens of their States.
    The States of Louisiana and Mississippi elected to implement a 
homeowner compensation program as the primary model. The compensation 
model provides eligible homeowners with a grant for uncompensated 
property losses to their primary residence. In consideration for 
assistance, homeowners would agree to covenants on their property that 
would require any new or rehabilitated structure to meet new building 
code requirements and FEMA elevation requirements if applicable. The 
goal of the compensation model was to ensure that any rebuilt 
properties would be safe from future hurricanes. Mississippi has 
assisted over 15,000 homeowners and the Louisiana Road Home program has 
assisted approximately 93,000 homeowners.
    As I stated previously, each State was given flexibility to adopt 
their own recovery plans. The States of Alabama and Florida are 
implementing more traditional CDBG housing programs by a method of 
distribution to local governments for housing activities with 
jurisdictions in Alabama and Florida undertaking different combinations 
of housing rehabilitation, relocation, and reconstruction. The State of 
Texas is undertaking rehabilitation through its council of governments 
with funds from the first supplemental and will assist approximately 
452 homeowners. Texas' primary homeowner assistance program is a 
housing rehabilitation program. This program is being funded through 
the second CDBG supplemental as there were not enough funds for that 
scale of a program originally. Texas proposes to assist approximately 
15,000 lower income homeowners.
    One factor influencing the choice of the compensation program model 
over the housing rehabilitation model was the lack of an environmental 
review requirement on individual home sites. The environmental 
requirement was one of the four statutory areas that the supplemental 
appropriations did not allow the Secretary to waive. A housing 
rehabilitation program requires a site-specific environmental review. 
Other factors influencing program design choices were the additional 
operational requirements a housing rehabilitation program would 
require, such as work write-ups and specifications, progress payments 
and inspections. Upon completion of these programs, HUD expects to 
undertake a study of the results of these different approaches.
    Homeowner assistance is not the only housing need in the Gulf 
Coast. There is also a need for renters assistance. Louisiana, 
Mississippi, and Texas have all identified renter assistance programs 
as well as assistance for public housing. These programs are 
financially more complicated because multiple sources of funding and 
ownership take longer to implement compared to the homeownership model. 
Both Louisiana and Mississippi have completed their small renter 
program design and have solicited applications and should be able to 
demonstrate visible progress in the near future. Approximately $1.9 
billion has been programmed for affordable rental and assisted housing.
    With regard to new construction housing assistance, an additional 
hurdle exists when locating projects to areas not currently served by 
existing water and sewer facilities. Mississippi proposes to relocate 
such facilities and new housing north of Interstate 10 away from flood 
hazard areas. Housing contingent upon these improvements require a 
longer-term planning and execution in order to complete engineering and 
facility construction.
    Thank you for the opportunity to testify before you today. We look 
forward to working with Congress on which recovery strategies work best 
to ensure safe and effective housing recovery. I welcome your 
questions.

    Chairman Thompson. Thank you.
    We will now hear now from Mr. Tipson and then to Mr. Gerber 
for a statement for 5 minutes.

   STATEMENT OF DAVID F. TIPSON, INTERIM DIRECTOR, COMMUNITY 
DEVELOPMENT PROJECT, LAWYERS' COMMITTEE FOR CIVIL RIGHTS UNDER 
                              LAW

    Mr. Tipson. Good afternoon. I am David Tipson, an attorney 
with the Lawyers' Committee for Civil Rights Under Law. I would 
like to thank Chairman Thompson, Ranking Member King and the 
Members of the committee for holding this important hearing on 
post-disaster housing programs and for allowing the Lawyers' 
Committee to testify.
    The Lawyers' Committee is a nonpartisan, nonprofit, civil 
rights legal organization that has been in existence for nearly 
45 years. The Lawyers' Committee and its local affiliate, the 
Mississippi Center for Justice, have organized volunteer 
attorneys from around the country and held over 50 free legal 
clinics to provide assistance to thousands of individuals in 
Mississippi unable to access the FEMA benefits to which they 
were entitled.
    Hurricane Katrina damaged or destroyed over 85,000 housing 
units in Mississippi. Homes owned and rented by families of low 
and moderate income suffered a significant and disproportionate 
share of the devastation. Today, many of these low-income 
families remain in FEMA trailers with nowhere to go. There are 
13,022 Mississippi households currently in FEMA temporary 
housing programs, of which 11,641 are in travel trailers. These 
figures represent approximately 35,000 displaced individuals, 
as of January 16. The sheer loss of affordable housing caused 
by Hurricane Katrina threatens to create an entire new homeless 
population in Mississippi.
    This committee is already familiar with many of the 
problems in FEMA's administration of emergency housing programs 
on the Gulf Coast. We thank the Chairman for his bill to 
require that temporary housing units comply with HUD standards 
for formaldehyde emissions. My testimony will focus, therefore, 
on two recent issues.
    First, I want to discuss FEMA's failure of coordination 
with local governments. In the last 9 months, FEMA's ability to 
provide direct housing assistance to hurricane survivors has 
been compromised by the actions of local jurisdictions. 
Beginning in May 2007, the cities of Pascagoula, Gulfport, 
Ocean Springs and Bay St. Louis have taken local action to 
eliminate FEMA trailer parks and even single FEMA trailers on 
private property. Even though FEMA has committed to providing 
direct housing assistance through March 2009, these local 
governments have refused to extend local permits accordingly. 
At the same time, local jurisdictions continue to receive 
financial assistance from FEMA through its public assistance 
program.
    These local governments often cite a need for trailer 
residents to become self-sufficient. The reality is that most 
residents could have no greater incentive to move than a FEMA 
trailer itself. Cramped, uncomfortable, toxic with formaldehyde 
and utterly vulnerable to the next hurricane, FEMA trailers are 
places that people live only when they have nowhere to go.
    FEMA was not prepared for this foreseeable set of 
circumstances and has failed to take proactive steps to address 
this growing problem.
    The second issue I want to discuss is the rocky transition 
to the Disaster Housing Assistance Program, or DHAP, 
administered by HUD. This fall, FEMA began transferring 
responsibility for rental assistance for Katrina victims to HUD 
under DHAP. The program is scheduled to begin assisting FEMA 
trailer residents this month.
    From the beginning, the transition from FEMA rental 
assistance to DHAP has been troubled. In a shocking number of 
cases, HUD officials discovered that FEMA's data on eligible 
households are outdated, incomplete, inaccurate or just missing 
altogether. We have heard accounts of landlords receiving DHAP 
subsidy checks from tenants who had moved. Many landlords who 
are willing to accept checks from FEMA-eligible households are 
not willing to participate in DHAP. Many families who are 
receiving FEMA rental assistance find that their current 
apartment will not pass DHAP's inspection requirement.
    At the same time, landlords who initially agree to 
participate in the program are becoming frustrated with late 
rent checks and other bureaucratic hassles. Tragically, many 
families who found an acceptable apartment, convinced the 
landlord to participate in the program and successfully entered 
DHAP are now receiving notices to vacate from their landlords 
because the local housing authority was late with January rent.
    This gives rise to a particularly unfortunate situation. If 
the landlord is unwilling to release a family from the original 
lease, the family will become ineligible for further DHAP 
assistance. One woman came to our workshop whose landlord 
decided not to participate but also refuses to let her out of 
her lease, which has onerous early termination penalties. As a 
result, she cannot move to a different rental property, and 
this woman is now at risk of losing her assistance, her only 
means of paying for housing.
    One of the reasons landlords are wary of participating in 
DHAP is inherent in the structure of DHAP itself. Beginning 1 
month from now, rental assistance provided by DHAP will be 
reduced by $50 each month until it is eliminated altogether. 
This reduction schedule treats rental assistance as a form of 
dependence from which recipients need to be gradually weaned 
and bears no relation to the financial realities of Katrina 
survivors living in disaster areas.
    In conclusion, we urge FEMA and Congress to explore ways to 
address the shortcomings identified in this testimony.
    Mr. Chairman and Members of the committee, thank you, 
again, for the opportunity to testify. I look forward to 
answering any questions.
    [The statement of Mr. Tipson follows:]

                 Prepared Statement of David F. Tipson
                            January 29, 2008

                            I. INTRODUCTION

    Good afternoon. I am David Tipson, a community-development attorney 
with the Lawyers' Committee for Civil Rights Under Law (``Lawyers' 
Committee''). I would first like to thank Chairman Thompson, Ranking 
Member King, and the Members of the committee for holding this 
important hearing on post-disaster housing programs and, in particular, 
for providing the Lawyers' Committee with the opportunity to 
participate.
    The Lawyers' Committee is a nonpartisan, nonprofit civil rights 
legal organization that has been in existence for over 40 years. It was 
formed in 1963 at the request of President John F. Kennedy to involve 
the private bar in providing legal services to address racial 
discrimination. The mission of the Lawyers' Committee is to secure, 
through the rule of law, equal justice under the law. For 45 years, the 
Lawyers' Committee has advanced racial and gender equality through a 
highly effective and comprehensive program involving educational 
opportunities, fair employment and business opportunities, community 
development, fair housing, environmental justice, and meaningful 
participation in the electoral process.
    The ongoing humanitarian crisis on the Gulf Coast we call Hurricane 
Katrina is well into its third year. Since the day the storm made 
landfall, the Lawyers' Committee and its local affiliate, the 
Mississippi Center for Justice, have organized volunteer attorneys from 
around the country and held over 30 free legal clinics to provide 
assistance to thousands of individuals unable to access the FEMA 
housing benefits to which they are entitled. Over the last 2\1/2\ 
years, we have observed first-hand the struggles--and the suffering--of 
thousands on the Gulf Coast. I am honored to provide this testimony on 
behalf of my fellow citizens on the Mississippi Gulf Coast whose needs 
for adequate housing assistance remain unmet. In fact, it is our belief 
that the situation for low-income residents of Mississippi is only 
getting more desperate and frightening. Although my remarks concern the 
situation in Mississippi, the problems I will describe are shared 
across the region affected by Hurricanes Katrina and Rita. By sharing 
the experiences of Mississippi residents with you, I hope to encourage 
a renewed commitment to the improvement of FEMA programs not only for 
the Gulf Coast, but for victims of future disasters as well.
    The committee is already familiar with many of the problems in 
FEMA's administration of emergency housing programs on the Gulf Coast. 
(Indeed, Chairman Thompson has introduced a bill to require emergency 
housing provided by FEMA to meet the health standards and formaldehyde-
emission levels set by the Department of Housing and Urban Development 
[HUD] for permanent, manufactured housing). This testimony will focus, 
therefore, on two recently observed issues: the failure of coordination 
with local governments and the rocky transition to the Disaster Housing 
Assistance Program administered by HUD. Before I begin a discussion of 
these issues, however, I want to review the devastating impact of 
Hurricane Katrina in Mississippi on low-income families.

                       II. THE IMPACT OF KATRINA

    Most Americans have emblazoned in their memory an image of a 
category five hurricane roaring across the Gulf Coast of Louisiana, 
Mississippi and Alabama, hurling casinos in the air, crumbling century-
old buildings, and devastating thousands of homes--and even more 
lives--under a massive tidal surge. When Katrina made landfall, it 
instantly became the worst natural disaster in over 200 years.
    Katrina drove a massive wall of water over barrier islands and into 
the Mississippi Gulf Coast. With heights approaching 28 feet in some 
places, this storm surge, along with catastrophic winds, damaged or 
destroyed over 85,000 housing units.\1\ Homes owned by families of low- 
and moderate-income suffered a significant and disproportionate share 
of the devastation. Sixty-five percent of the housing units damaged by 
the storm surge in Harrison, Hancock, and Jackson Counties were 
occupied by households earning less than the U.S. median income 
level.\2\ In East Biloxi, about 95 percent of households earned below 
Federal median income before Katrina, and 87 percent of these 
households suffered extensive or catastrophic damage.\3\ Over 40 
percent of the households in water-front census blocks in Gulfport and 
Biloxi had incomes below 80 percent of the area median income.\4\
---------------------------------------------------------------------------
    \1\ Reilly Morse, ``Environmental Justice Through the Eye of 
Katrina,'' citing Richard D. Knabb, Jamie R. Rhome, and Daniel P. 
Brown, ``Tropical Cyclone Report: Hurricane Katrina'' (December 20, 
2005), 8-9, http://www.nhc.noaa.gov/pdf/TCR-AL122005_Katrina.pdf.
    \2\ Governor's Commission Report on Recovery, Rebuilding and 
Renewal (December 31, 2005), 54.
    \3\ Governor's Commission Report, 54.
    \4\ Morse, 29.
---------------------------------------------------------------------------
    Low-income renters were hit especially hard. According to a July, 
2006 HUD/FEMA damage report, 52 percent of rental housing stock (37,105 
out of 71,616) damaged by the hurricane was rented to persons of very 
low income (less than 50 percent of area median income).\5\ Within this 
segment, about one-third of the units (11,914 out of 37,105) were 
severely damaged or destroyed. The Mississippi Regional Housing 
Authority for Region VIII reported that 80 percent of subsidized 
housing in coastal Mississippi was damaged or completely destroyed.\6\
---------------------------------------------------------------------------
    \5\ FEMA Housing Unit Damage Estimates, July 12, 2007, p. 6.
    \6\ Michael Kunzelman, ``Unhabitable Habitats: Tenants Living in 
Squalor,'' SunHerald (Biloxi), April 16, 2006, A19.
---------------------------------------------------------------------------
    Today many of these low-income families remain in FEMA trailers or 
other emergency shelter with nowhere to go.\7\ The State of Mississippi 
also has 13,022 households currently in FEMA temporary housing 
programs, of which 11,641 (or 89 percent) are still occupying travel 
trailers. These figures cumulatively represent approximately 35,159 
displaced individuals as of January 16, 2008.\8\ Of those receiving 
Direct Housing Assistance (i.e., trailers), 81 percent of households 
report low to moderate incomes (80 percent below the Area Median 
Income), yet only 1.3 percent of those who still remain in trailers 
ever received Federal housing assistance prior to Katrina.\9\ Nearly 
half (47 percent) of this population were renters prior to the storm 
and 36 percent of these residents are over the age of 60 and/or have a 
disability.\10\
---------------------------------------------------------------------------
    \7\ For a first-hand look at the housing crisis through the eyes of 
FEMA trailer residents, please view a short documentary prepared by the 
Lawyers' Committee at http://www.lawyerscommittee.org/2005website/home/
katrina3.mp4.
    \8\ FEMA, Mississippi 1604, GCRO, IA Global Report No. 23.0, Report 
Date: 01/16/08: http://www.fema.gov/pdf/hazard/hurricane/2005katrina/
ms_iag.pdf: Note: The aggregate number reported uses FEMA's 
standardized formula of: [No. of households x 2.7 (average MS household 
size) = total aggregate population].
    \9\ Ibid.
    \10\ Ibid.
---------------------------------------------------------------------------
    Ninety-three percent of the 1,381 households receiving rental 
subsidy assistance report low to moderate incomes. FEMA also reports 
that 88 percent currently receiving subsidies were renters prior to 
Katrina. That stated, only 7 percent received any Federal housing 
assistance prior to the 2005 disaster. Eleven percent of these 
households include elderly and/or persons with disabilities.\11\
---------------------------------------------------------------------------
    \11\ Ibid.
---------------------------------------------------------------------------
    The sheer loss of affordable housing caused by Hurricane Katrina 
threatens to create an entire new homeless population in Mississippi, 
one of the poorest States in the Nation. In addition to causing 
emotional and physical devastation, the storm left behind myriad legal 
hurdles for Katrina survivors. Over the last 2\1/2\ years, the Lawyers' 
Committee has organized dozens of legal assistance workshops for the 
seemingly endless needs of individuals who did not receive the FEMA 
assistance to which they were entitled. Again and again we saw examples 
where FEMA: (1) Undercompensated storm victims and then threatened them 
to return the little they received; (2) misapplied its own rules and 
sought recoupment from individuals for its errors; (3) wrote checks 
from the wrong account; and (4) failed to inform recipients of 
substantive restrictions on the use of the funds. All of these mistakes 
resulted in devastating recoupment actions against terrified 
individuals whose only mistake was to rely on the competency of FEMA. 
These residents were punished for FEMA's failures to apply and 
communicate its own rules.
    The inability to communicate rules and policies clearly, poor 
management of information, bureaucratic rigidity, passivity to local 
conditions, and assistance programs poorly tailored to the needs of 
disaster victims are themes we have observed repeatedly in FEMA's post-
Katrina response. Attorneys at the Lawyers' Committee discussed these 
issues in an article entitled ``The Continuing Storm: How Disaster 
Recovery Excludes Those Most in Need,'' which is attached to this 
testimony.\12\ In order to help decipher many of the confusing and 
conflicting messages from FEMA, the Lawyers' Committee produced ``Your 
Risks, Your Rights,'' a document that has been distributed to hundreds 
of residents. In the process of preparing this document, we discovered 
for ourselves the complete absence of clarity surrounding basic 
questions about FEMA's programs and policies. These themes have also 
surfaced in the rocky and, for many residents, traumatic, transition 
from FEMA assistance to the Disaster Housing Assistance Program 
administered by HUD.
---------------------------------------------------------------------------
    \12\ Miller, Trisha B., and Jonathan P. Hooks. The Continuing 
Storm, How Disaster Recovery Excludes Those Most in Need. California 
Western Law Review. Vol 43. 2006.
---------------------------------------------------------------------------
                        III. TRANSITION TO DHAP

     This fall, FEMA began transferring responsibility for rental 
assistance for Katrina victims to HUD under the Disaster Housing 
Assistance Program or DHAP. Under the program, local public housing 
authorities are supposed to provide rental subsidies to the landlords 
of eligible households. The program was also scheduled to begin 
assisting FEMA trailer residents this month.\13\
---------------------------------------------------------------------------
    \13\ Department of Housing and Urban Development. ``Disaster 
Housing Assistance Program (DHAP): Fact Sheet: HUD to administer 
Continued Rental Housing Assistance For Residents Affected by Gulf 
Coast Hurricanes.'' October 24, 2007. http://www.hud.gov/news/dhap.cfm.
---------------------------------------------------------------------------
    From the beginning, the transition from FEMA rental assistance to 
DHAP has been troubled. In a shocking number of cases, HUD officials 
discovered that FEMA's data on eligible households was outdated, 
incomplete, inaccurate, or just missing altogether. We have heard 
accounts of landlords receiving DHAP subsidy checks for tenants who 
have moved. Many landlords who were willing to accept checks from FEMA 
are not willing to participate in DHAP. Many families who were 
receiving FEMA rental assistance find that their current apartment will 
not pass DHAP's inspection requirement. At the same time, landlords who 
initially agreed to participate in the program are becoming frustrated 
with late rent checks and other bureaucratic hassles. Tragically, many 
families who successfully entered the DHAP program, found an acceptable 
apartment, and convinced a landlord to participate are now receiving 
notices to vacate because the local housing authority was late with 
January rent. A photocopy of one such notice is attached to this 
testimony.
    As a result, an increasing number of households who have been 
recipients of FEMA rental assistance are facing 30-day notices to 
vacate their apartments unless they are able to pay the entire (above) 
market-rate rent for the same apartment in the same complex. These 
families are now on the brink of homelessness, with no other affordable 
housing alternatives.
    I would like to offer the true story of a person I will call Helen 
to illustrate the harrowing ordeals that have accompanied the 
transition to DHAP for many storm survivors. Helen's landlord alerted 
her to his decision not to participate in DHAP on November 8 and told 
her that, after November 14, she would be responsible for paying her 
rent. Helen's lease expires in April, and she cannot afford to pay rent 
without the assistance. Recently, Helen received a letter from HUD 
saying that her landlord had elected not to participate in DHAP and 
that, if she wished to participate, she must get out of her current 
lease and relocate to a unit with a participating landlord. It also 
stated that DHAP could not void a binding lease, and, if she had 
entered into a binding lease, she would be ineligible for assistance.'' 
This is precisely Helen's situation; her landlord refuses to release 
her from the lease, which has onerous early termination penalties. As a 
result, she cannot move to a different rental property. Helen is now at 
risk of losing her assistance, her only means of paying for housing, 
because of an uncooperative landlord and a rigid and opaque DHAP 
policy.
    One of the reasons landlords are wary of participating in DHAP is 
inherent in the structure of DHAP itself. Beginning 1 month from now, 
rental assistance provided by DHAP will be reduced by $50 each month 
until it is eliminated altogether.\14\ This reduction schedule treats 
rental assistance as a form of dependence from which recipients need to 
be gradually weaned and bears no relation to the financial realities of 
Katrina survivors living in disaster areas. Given the extreme 
difficulty of finding apartments--let alone inspection-ready apartments 
with cooperative landlords--we are concerned that many families 
experienced financial setbacks in having to relocate to new areas far 
from employment opportunities. Landlords are understandably skeptical 
that many families will not be able to keep up with the subsidy 
reductions. Since DHAP is undergoing continual modification to 
accommodate the realities of Federal administration, we recommend other 
adjustments to accommodate families whose financial situations do not 
correspond to DHAP's linear reduction program.
---------------------------------------------------------------------------
    \14\ Ibid.
---------------------------------------------------------------------------
    In future disasters, it is critical that HUD is engaged immediately 
to assist in providing long-term housing assistance for survivors--
preferably through its existing housing voucher programs. As we have 
seen, a Federal disaster management agency is ill equipped for the 
challenges of providing housing assistance on an extended basis. 
Moreover, for disaster survivors with nerves already worn thin, the 
difficulties of a mid-crisis transition between Federal assistance 
programs are manifest.
    It remains unclear how DHAP will affect those living in FEMA 
trailers, since there is a significant gap between the need for 
affordable housing and availability of housing. Many housing advocates 
still do not understand how trailer residents should begin the 
transition to DHAP. This question has particular urgency for FEMA 
trailer residents living in cities that have acted to prohibit FEMA 
trailers within their jurisdictions.

                     IV. FEMA AND LOCAL GOVERNMENT

    As described above, the problem of finding alternate, affordable 
housing is particularly severe for low-income households currently 
surviving with FEMA assistance. In the last 9 months, however, FEMA's 
ability to provide direct housing assistance to Hurricane survivors has 
been compromised by the actions of local jurisdictions along the 
Mississippi Gulf Coast. Affordable rental housing is largely 
unavailable on today's Gulf Coast. When faced with the choice of 
homelessness or living in toxic trailers, trailer residents have no 
choice but to provide some form of shelter for themselves and their 
families.
    Beginning in May 2007, however, the Cities of Pascagoula, Gulfport, 
Ocean Springs, and Bay St. Louis have taken local action to eliminate 
FEMA trailer parks and even single FEMA trailers on private property. 
Even though FEMA has committed to providing direct housing assistance 
through its trailers and mobile units through March 2009, these local 
governments have refused to extend local permits accordingly. Moreover, 
these local governments continue to receive financial assistance from 
FEMA through its Public Assistance Program. The Lawyers' Committee 
represents residents of three trailer parks in Pascagoula in an appeal 
of that city's decision.\15\
---------------------------------------------------------------------------
    \15\ Mitchell, et al v. City of Pascagoula, No. 2007-00125 filed in 
the Circuit Court of Jackson County.
---------------------------------------------------------------------------
    When pushing to expel FEMA trailers from their jurisdictions, these 
local governments often cite a need for trailer residents to become 
self-sufficient without any explanation of how they can achieve this 
goal. The reality is that most residents could have no greater 
incentive to move than the FEMA trailer itself. Cramped, uncomfortable, 
toxic with formaldehyde, and utterly vulnerable to the next hurricane, 
FEMA trailers are places that people live only when they have nowhere 
else to go.
    I want to share the story of a man named Harold to illustrate the 
effects of such local government actions on people. Harold is an 
African-American man of 57 years, who is hearing impaired. Back Bay 
Mission, one of the Lawyers' Committee's local partners, has been 
assisting Harold for several years. He has been on a fixed income from 
SSI for over 10 years and he lost his rental home and all of his 
possessions in the storm. After being temporarily homeless for a few 
months, Harold received a FEMA trailer located on a commercial site in 
Biloxi, MS.
    In December, 2007 Back Bay Mission was contacted by FEMA and was 
told that Harold needed to be informed that he would no longer be able 
to reside in his trailer in Biloxi as the site was scheduled for 
closure in mid-January. On December 28, 2007 FEMA informed Back Bay 
Mission caseworkers that they would be moving Harold's trailer within 5 
to 7 days (if not sooner) from the East Biloxi site to another site in 
Gulfport.
    Without notice of a specific date or time, Harold's trailer was 
moved a week later to the Gulfport site. Almost immediately, Back Bay 
Mission was further informed to instruct Harold that he was to place 
all utilities (electricity and water) for the trailer at its new 
location in his name, and further, that he must do so within 1 week or 
face removal of his trailer.
    In order for Harold to place the utilities in his name, he must pay 
deposits for those connections: $150.00 for electricity and $90.00 for 
water. When questioned by caseworkers as to why FEMA was discontinuing 
utility assistance, the FEMA worker replied that as trailer parks get 
shut down and clients move to either another trailer or a rental paid 
for by FEMA, clients must pay for deposits and any other expenses 
associated with the transition.
    Harold is presently not able to meet these demands on his own. Due 
to the temporary loss of SSI payments, he lacks resources for even 
basic necessities of life. He has been displaced yet again by the move 
from his informal support network in East Biloxi (his home) to Gulfport 
and lacks a car or funds for public transportation. In order to stay on 
top of his situation, Harold visits Back Bay Mission at least two to 
three times a week, walking to East Biloxi from Gulfport, leaving his 
house at 6 a.m. to get to Back Bay Mission by 9 a.m.
    Harold's story is one of thousands. The testimony of other trailer 
residents can be viewed on the Lawyers' Committee's Web site: http://
www.lawyerscommittee.org/2005website/home/katrina3.mp4.
    Local government closures of FEMA trailer parks have thwarted 
FEMA's ability to guide a strategic and comprehensive recovery program 
along the Mississippi Gulf Coast. Rather than provide the coordinated 
leadership we expect from a Federal agency, FEMA has scrambled to adapt 
its programs to the dictates of municipalities. See, for example, an 
October 2007 news release entitled, ``FEMA Temporary Housing Sites 
Closing; Meeting Local Deadlines,'' in which FEMA lists cooperation 
with local governments as a top priority and in which the role of the 
Federal disaster agency appears to be reduced to accommodating local 
officials.\16\ ``We want to help [local governments] accomplish what 
they feel is best for their residents,'' the release states.\17\
---------------------------------------------------------------------------
    \16\ http://www.fema.gov/news/newsrelease.fema?id=41376.
    \17\ Ibid.
---------------------------------------------------------------------------
    Attached to this testimony is a notice from FEMA announcing that 
three more trailer parks will close by March 31.\18\ The only guidance 
for trailer residents in this notice is a promise of assistance with 
finding rental resources and a reference to the relocation assistance 
program scheduled to end in exactly 1 month. With each locally driven 
trailer-park closure, FEMA has had to expend its limited resources to 
relocate families and even trailers from one place to another. In some 
cases, families who continue to remain eligible for FEMA assistance 
fall out of the system altogether during these transitions. FEMA was 
not prepared for this foreseeable set of circumstances and has failed 
to take proactive steps to address this growing problem.
---------------------------------------------------------------------------
    \18\ http://www.fema.gov/news/
newsrelease.fema?published=1&id=42363.
---------------------------------------------------------------------------
    At the same time, local governments have not welcomed alternative 
housing solutions to FEMA trailers even as they prohibit these trailers 
within their jurisdictions. Instead, we have seen local governments 
place hurdles--and sometimes barriers--to housing solutions that would 
provide an alternative to FEMA trailers. For example, 2,777 Mississippi 
Alternative Housing Program (MAHP) units, a.k.a. Katrina or Mississippi 
Cottages, sit in pastures throughout South Mississippi unable to be 
placed in service or in any manner become occupied by those who require 
more permanent, safe and healthy homes. A major reason for this 
situation is that local governments have often resisted the placement 
of these cottages.\19\ Local government reception of affordable housing 
has been similarly cold.
---------------------------------------------------------------------------
    \19\ J.R. Welsh, ``Council Fights Katrina Cottages,'' SunHerald, 
Oct. 27, 2007.
---------------------------------------------------------------------------
    On the Gulf Coast, FEMA needs to demonstrate leadership by 
proposing forward-thinking strategies for providing direct housing 
assistance to all those who require it through March 2009. FEMA 
representatives need to work closely and proactively with local 
officials to alleviate many of the concerns that lead to trailer 
prohibitions before these decisions are made. When local governments 
cannot be persuaded, FEMA must identify alternative sites in commercial 
trailer parks or nearby jurisdictions so that trailer residents can 
continue to live near existing jobs and social networks. Such 
continuity represents the only possible avenue to the self-sufficiency 
that we all want to see for trailer residents.
    In future disasters, local governments that benefit from 
participation in FEMA's National Flood Insurance Program and receive 
funds through FEMA's Public Assistance Program must be held accountable 
for their part in facilitating emergency housing for disaster victims. 
We encourage FEMA to work with local governments on emergency-housing 
contingency plans before disasters occur. These plans could be adopted 
in conjunction with local floodplain management standards required by 
the National Flood Insurance Program. In any case, FEMA must avoid 
locating emergency housing pursuant to local temporary use permits 
entirely subject to local discretion. Such permits must have reasonable 
renewal provisions correlated to the magnitude of the disaster and the 
pace of recovery.
    Local cooperation in emergency housing programs must be tied to the 
receipt of funds through FEMA's Public Assistance Program. Local 
governments that wish to prohibit FEMA trailers and trailer parks 
within their jurisdiction must take proactive steps to facilitate 
alternative housing opportunities. Many of the towns that accept FEMA 
Public Assistance are not embracing the construction of affordable 
housing and the permanent placement of Mississippi Cottages under the 
Mississippi Alternative Housing Program.

                        V. RELOCATION ASSISTANCE

    Another problem is that FEMA's Relocation Assistance Program will 
end shortly despite the magnitude of the Katrina disaster or the 
unavailability of housing on the Gulf Coast. Currently, FEMA provides 
up to $4,000 of actual costs for eligible displaced people moving back 
to the Gulf Coast. This allows families to afford reasonable travel and 
moving expenses, often a significant barrier to returning home. 
However, the new relocation assistance policy was announced only last 
fall and is slated to end 1 month from today. FEMA's Disaster 
Assistance Directorates on relocation assistance have stated that the 
deadline may be extended ``when it is determined that doing so would be 
in the public interest.''\20\
---------------------------------------------------------------------------
    \20\ FEMA Disaster Assistance Directorate, Issued July 21, 2008.
---------------------------------------------------------------------------
    Currently thousands of former Gulf Coast residents are unable to 
return home even though they would like to. A major barrier for these 
families is the lack of affordable housing. Many working poor, elderly, 
disabled, and middle-class families trying to return to the Gulf Coast 
will not be able to return without relocation assistance. We urge FEMA 
to extend the availability of such assistance past February 29, 2008. 
Any extension should be open-ended, dependant upon the availability of 
housing, and widely publicized.

                             VI. CONCLUSION

    We urge FEMA and Congress to explore ways to address the 
shortcomings identified in this testimony, because the problems and 
missteps of our post-Katrina housing-assistance programs have real 
consequences. By way of conclusion, I would like to share some 
statistics from Back Bay Mission. In 2007, Back Bay Mission's Emergency 
Assistance Program recorded 2,488 visits from members of households 
located in the lower three counties of MS. Through this program, a 
total of 5,235 residents were served through assistance in paying rent/
mortgage payments, utilities, prescription medications, transportation, 
and incidentals. Back Bay Mission has witnessed a 58 percent increase 
from 2006 in the number of individuals served through this program. The 
average median income of households served in 2007 was $338.00/month, 
with over 30 percent of those reporting fixed-incomes, almost half of 
whom had never sought assistance from BBM prior to 2007. Similarly Back 
Bay Mission's Home at Last Program reported no vacancies in apartments 
and lengthy waiting lists for 2007. In addition, the year-end report 
revealed a 35 percent increase in the number of homeless persons served 
through outreach (by providing tents, sleeping bags, bus passes, 
clothes, shoes, and hygiene items) from 2006 to 2007.\21\ For these 
newly impoverished and homeless individuals, the worst of Hurricane 
Katrina has yet to come.
---------------------------------------------------------------------------
    \21\ These statistics are kept by Back Bay Mission, Biloxi, 
Mississippi.
---------------------------------------------------------------------------
    Mr. Chairman and Members of the committee, thank you again for the 
opportunity to testify on this important subject. I look forward to 
answering any questions from the committee.

                                Exhibits

   30-day notice from property manager.
   J.R. Welsh, ``Council Fights Katrina Cottages,'' SunHerald, 
        Oct. 27, 2007.
   ``FEMA closing three trailer parks,'' SunHerald, Jan. 23, 
        2008.
   FEMA Press Release: ``FEMA Temporary Housing Sites Closing; 
        Meeting Local Deadlines.''

        
        
        
        
        
        
        
        
        
        
        
        
        
        

    Chairman Thompson. Thank you very much.
    Mr. Gerber, obviously we have been looking forward to your 
testimony. Please.

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

    Mr. Gerber. Thank you, Mr. Chairman and Ranking Member 
King.
    I would also like to acknowledge Congressman Cuellar and 
Congressman Green and certainly Congresswoman Jackson Lee for 
their leadership in trying to secure funds for the State of 
Texas to help those survivors of Hurricane Katrina who are 
living in Texas as well as those who are dealing with the 
physical destruction of Hurricane Rita.
    My name is Michael Gerber. I am the executive director of 
the Texas Department of Housing and Community Affairs. TDHCA 
has been designated by Governor Rick Perry as the lead agency 
in Texas responsible for Hurricane Rita recovery. Thank you for 
inviting me to update you on these efforts.
    I would like to start by saying that TDHCA is clearly not a 
first-responder agency. Rather, we are Texas's lead agency 
responsible for affordable housing, community and energy 
assistance programs. The disaster recovery program was assigned 
to TDHCA by the Governor because local communities and 
officials identified housing as the overwhelming need after 
Hurricanes Rita and Katrina impacted Texas.
    With the first allotment in the federally appropriated 
funds made available to Texas in May 2006, which was $74.5 
million, we worked closely with and listened to local elected 
officials, community leaders and faith-based organizations. We 
clearly heard the message that, because the funds were so 
limited, local governments wanted to be directly involved with 
the distributions so they could maximize these dollars.
    TDHCA utilized local councils of government, which are 
organizations made up of local elected officials and key staff 
that serve as regional planning boards. There are three 
councils of government in southeast Texas that we contracted 
with in July 2006 for the distribution $40.3 million in housing 
funds, which came from the $74.5 million appropriation.
    These councils of government are responsible for 
identifying and qualifying eligible families for help and then 
hiring contractors to make emergency repairs or rebuild a home 
or replace a manufactured home. The balance of the $74.5 
million is being used for infrastructure repairs throughout 
southeast Texas, including fixing water and wastewater systems.
    Given the funds available at the time, we believe that 
working through the councils of government would allow local 
governments to weigh the needs of all the residents of the 
region and provide the greatest impact. In all instances, the 
intended beneficiaries of these funds are the lowest-income 
Texans, those that are well below the 80 percent of the median 
family income. We have given priority to seniors and persons 
with disabilities and other vulnerable populations.
    It is important to note that Texas identified over $2 
billion in need in the region from both Hurricane Rita direct-
hit damage and Hurricane Katrina needs with the flood of over 
400,000 evacuees that Texas welcomed with open arms. That is 
why we also welcomed the second appropriation of funds by 
Congress, which raised our total allocation of disaster funds 
from $74.5 million to a total of $503 million. That gave the 
State about $0.25 on every dollar of documented need. However, 
that second round of funding, $428.6 million, was not fully 
available to Texas until just 10 months ago.
    The State has had to make tough choices about how to help 
communities recover. Again, after much discussion with local 
officials, community groups and faith-based organizations, we 
chose to continue on the path of assisting individuals and 
communities by focusing on recovery of the tax base and 
people's lives by focusing on actual housing and infrastructure 
construction.
    Building a home, repairing a home and replacing a 
manufactured housing unit takes a greater amount of time than 
qualifying someone and issuing a check to cover their storm 
damage. Again, Texas chose, because we have limited funds, to 
do a rebuilding program and not a compensation program, which 
other States have opted to do because of their more generous 
allocations from the Department of Housing and Urban 
Development.
    Also, because of limited funds available, we had to tell 
people who had already rebuilt that we were going to assign 
first priority to those who could not rebuild without 
Government help.
    The decision to undertake a rebuilding program caused us to 
move more slowly than we had wished in qualifying residents and 
ensuring that they were eligible for the program. Qualifying 
residents has been a challenging process, but you should know 
that the State of Texas has added no additional requirements. 
The factors causing many of the delays--environmental 
clearances, historic preservation requirements, floodplain 
requirements, and duplication of benefit restrictions--are all 
requirements of Federal law or HUD rules. We have received 
tremendous assistance from Assistant Secretary Bregon and his 
staff to navigate some of those issues.
    I expect that we will have all housing funds from that 
first round of $74.5 million distributed and homes built by 
Labor Day. Most of the work we are doing are full rebuilds of 
homes, and we expect that for the $40.3 million in housing 
funds, we will rebuild or replace about 500 homes. For critical 
infrastructure in round one, again, mostly water and wastewater 
repair projects, these projects will be completed and all funds 
drawn down by October.
    For the second round of funds, the $428.6 million that we 
received with the authority to draw down on in April 2007, 
TDHCA has awarded all of this $428.6 million. It took some time 
because several of the programs were competitively run. They 
required communities to submit applications and to be judged on 
the number of low-income persons who could benefit or be 
helped.
    In the case of the homeowner assistance program, for which 
$222 million has been dedicated, TDHCA used a competitive bid 
process to select a group of contractors to help the State to 
expedite the delivery of funds to qualified homeowners and to 
build homes and make repairs. We expect the second pot of 
money, since we have navigated the minefields on first round, 
to move more quickly.
    In the interest of time, let me say that we certainly 
welcome the committee exploring the capacity of first 
responders to a major disaster and asking tough questions about 
who should have ultimate responsibility for the inevitable 
longer-term recovery.
    In Texas, we have done some things very well. When you look 
back at our program, I believe that you will find strong 
accountability and controls that the assistant secretary 
alluded to and no instances of the widespread fraud, waste and 
abuse that have plagued other disaster recovery programs as has 
been reported in the press. You will also find our program 
actually built homes and repaired infrastructure for those whom 
the program was intended: our lowest-income Texans, seniors, 
persons with a disability, and the very poor.
    I thank you for this opportunity and would be pleased to 
respond to any questions.
    [The statement of Mr. Gerber follows:]

                Prepared Statement of Michael G. Gerber
                            January 29, 2008

    Chairman Thompson, Ranking Member King, and Members of the 
committee: My name is Michael Gerber and I am Executive Director of the 
Texas Department of Housing and Community Affairs (TDHCA). TDHCA has 
been designated by Governor Rick Perry as the lead agency in Texas 
responsible for Hurricane Rita recovery. Thank you for inviting me to 
update you on these efforts.
    I would like to start by saying that TDHCA is clearly not a first-
responder agency. Rather, we are Texas' lead agency responsible for 
affordable housing, community and energy assistance programs, and 
colonia housing activities. The Department annually administers funds 
in excess of $400 million, the majority of which is derived from 
Federal grants, Federal tax credits, and mortgage revenue bond 
financing.
    Our enabling legislation allows the Governor to assign additional 
programs not contemplated in statute, which is how we became active in 
the disaster recovery business. The disaster recovery program was 
assigned to TDHCA because local communities and officials identified 
housing as the overwhelming need after Hurricanes Rita and Katrina 
impacted Texas.
    Primary among the missions TDHCA statutorily serves is to assist 
local communities in overcoming financial, social and environmental 
problems to help put housing on the ground. Another legislative charge 
is to contribute to the preservation, development and redevelopment of 
neighborhoods and communities.
    We have an excellent track record in accomplishing these goals and 
we like to think that is one of the reasons we were asked to take on 
the disaster recovery program that impacted individuals and entire 
neighborhoods throughout Southeast Texas.
    With the first allotment of federally appropriated funds, $74.5 
million, we worked closely with and listened to local elected 
officials, community leaders and faith-based organizations. We clearly 
heard the message that because the funds were so limited, local 
governments wanted to be directly involved with their distribution so 
that they could maximize these funds. TDHCA utilized local Councils of 
Government, organizations made up of local elected officials and key 
staff that serve as a regional planning board. There are three Councils 
of Government in Southeast Texas that we contracted with in July 2006 
for the distribution of $40.3 million in housing funds, which came from 
the $74.5 million appropriation.
    These Councils of Government are responsible for identifying and 
qualifying eligible families for help, and then hiring contractors to 
make emergency repairs or rebuild a home, or to replace a manufactured 
housing unit. The balance of the $74.5 million is being used for 
infrastructure repair throughout Southeast Texas, including fixing 
water and wastewater systems.
    Given the funds available at the time, we believed that working 
through the Councils of Government would allow local governments to 
weigh the needs of all the residents of the region and provide the 
greatest impact. In all instances, the intended beneficiaries of these 
funds are the lowest-income Texans, those at well below 80 percent Area 
Median Family Income, and we've given priority to seniors, persons with 
disabilities, and other vulnerable populations.
    This process took some time to get up and running because of the 
complexities of the Community Development Block Grant program, and the 
overriding desire to rebuild communities restoring both the region's 
tax base and people's lives--and to not just simply issue checks 
providing only temporary relief.
    It is important to note that Texas identified over $2 billion 
dollars in need in the region from both Hurricane Rita direct damage 
and Hurricane Katrina needs with the flood of over 400,000 evacuees 
that Texas welcomed with open arms. That is why we also welcomed the 
second appropriation of funds by Congress which raised our total 
allocation of disaster recovery funds from $74.5 million to $503 
million. That gave the State about 25 cents for every dollar of 
documented need. However, that second round of funding, $428.6 million, 
was not fully available to Texas until just 10 months ago.
    This is not to say that we are not grateful for the efforts of 
Congress to assist our communities with the funds we did receive. Our 
Texas congressional delegation did an outstanding job understanding the 
rebuilding needs of the region and securing these funds. However, the 
State still had to make tough choices about how to help communities 
recover.
    After much public discussion again with local officials, community 
groups and faith-based organizations, Texas chose to continue on the 
path of assisting individuals and communities by focusing on actual 
housing and infrastructure construction. Building a home, repairing a 
home, or replacing a manufactured housing unit takes a greater amount 
of time than qualifying someone and simply issuing a check to cover 
their storm damage. Again, Texas chose because of our limited funds to 
do a rebuilding program and not a compensation program that other 
States have opted to do because of their more generous allocations from 
HUD. Also, because of the limited funds available, we had to tell 
people who had already rebuilt that we were going to assign first 
priority to those who could not rebuild without Government assistance.
    The decision to undertake a rebuilding program caused us to move 
more slowly than we wished in qualifying residents and ensuring that 
they were eligible for the program. Qualifying residents has been a 
challenging process, but you should know that the State of Texas has 
added no additional requirements. The factors causing many of the 
delays--environmental clearance, historic preservation requirements, 
floodplain limitations, and duplication of benefits restrictions--are 
all requirements of Federal law or HUD rules. The only limitation Texas 
has regards the amount of funds an individual may receive so as to 
distribute disaster help as broadly as possible. I would also like to 
note that HUD is also an agency not typically in the disaster recovery 
business; yet, we have received tremendous technical assistance from 
career staff at HUD to navigate these complicated issues.
    I expect that we will have all housing funds from the first round 
of $74.5 million distributed and homes built by Labor Day. Most of the 
work we are doing are full rebuilds of homes, and we expect that for 
the $40.3 million in housing funds, we will rebuild or replace nearly 
550 homes. For critical infrastructure in round one--again, mostly 
water and wastewater repair projects--these projects will be completed 
and all funds drawn down by October.
    For the second round of funds--$428.6 million--Congress approved 
this appropriation in the summer of 2006. We received approval from HUD 
of our action plan on how to best use these funds for the second round 
in April 2007.
    TDHCA awarded all $428.6 million in funds by September 2007. It 
took some time because several of the programs were competitively run, 
and required communities to submit applications and to be judged on the 
number of low-income persons who would benefit or be helped. In the 
case of the Homeowner Assistance Program, for which $222 million has 
been dedicated, TDHCA used a competitive bid process to selected a 
group of contractors to help the State to expedite the delivery of 
funds to qualified homeowners and to build homes and make repairs.
    The contractor team has already been working on the delivery 
process and has held meetings in Southeast Texas to take over existing 
applications that remain unfunded from round one.
    On a separate track, we have also been working with FEMA as part of 
their alternative housing pilot program to look for new ways to assist 
disaster victims with alternatives to trailers. The program FEMA 
selected for Texas to work on involves the HESTON Group and will 
provide rapidly assembled housing that can be built and disassembled 
and stored quickly.
    Texas will use these funds from FEMA--$16 million--to relocate 
residents currently living in temporary housing, including trailers. 
Some of the models will ultimately be disassembled to determine how the 
program works for short-term disaster housing, but the vast majority of 
the homes will be used as part of a set of options for disaster victims 
to provide permanent, safe, and decent housing. We expect to have all 
of the pilot homes--approximately 150 to 180--built and deployed by the 
end of 2008.
    On a final note, we also know that starting over in a new community 
is difficult. That is why the State has dedicated $60 million of the 
$428.6 million in round two to the city of Houston and Harris County to 
assist and provide services for evacuees from Hurricane Katrina.
    For the entire disaster recovery program in Texas, we believe that 
we have turned the corner from the planning stage and have moved fully 
into building and reconstruction throughout the region. We expect that 
all funds--all $503 million--will be fully used within the next 2\1/2\ 
years.
    We welcome the committee exploring the capacity of first responders 
to a major disaster and asking tough questions about who should have 
ultimate responsibility for the inevitable longer-term recovery. In 
Texas, we have done some things very well. When you look back at our 
program, I believe you will find strong accountability and controls and 
no instances of the widespread fraud, waste and abuse that have plagued 
other disaster recovery programs as has been reported in the press. You 
will also find that our program actually built homes and repaired 
infrastructure for those whom the program was intended--our lowest-
income Texans, seniors, and persons with disabilities.
    Again, I thank you for this opportunity and I would be pleased to 
respond to any questions you may have.

                              Attachments

 Texas Department of Housing and Community Affairs--Rebuilding Texas: 
    Disaster Recovery from Hurricane Rita First Supplemental Update
                                timeline
   September 24, 2005.--Hurricane Rita makes landfall near 
        Sabine Pass approximately 1 month after Hurricane Katrina sends 
        400,000 evacuees into Texas.
   December 30, 2005.--Congress appropriates $11.5 billion in 
        Community Development Block Grant funds for disaster recovery. 
        Texas has identified more than $2 billion in needed assistance.
   February 2006.--HUD announces availability of $74.5 million 
        in CDBG funds for Texas from congressionally appropriated 
        funds.
   February-May 2006.--TDHCA produces draft plan and obtains 
        significant public comment on proposed State of Texas Action 
        Plan (application for CDBG funds) and holds public hearing 
        where the TDHCA Governing Board approves the plan representing 
        the comments of the public.
   May 2006.--Texas submits Action Plan; HUD approves Plan and 
        awards $74.5 million to Texas, some 9 months after hurricane 
        hits State but less than 4 months since funds made available.
   May-July 2006.--Office of Governor coordinates with TDHCA 
        and COGs to determine funding amounts for each community to be 
        represented by their COG based on most severe impacts.
   July 2006.--TDHCA Governing Board awards funds to Councils 
        of Governments (COGs) at first available meeting.
   August 2006.--Contracts are developed and signed and COGs 
        begin intake of applications and planning for other elements of 
        process.
   October 2007.--Intake completed having reached more than the 
        number of applicants who could be funded.
   November 2007-present.--Applicant certification process, 
        manufactured home replacement process, and, bid and 
        construction process for conventional homes.
   September 2008.--All construction, home replacement 
        projected to be complete.
                 status of housing funds--$40.3 million
Key Accomplishments
   Sixty-six percent (355 of 538 applicants) of eligible Texas 
        families have completed necessary paperwork to receive funding, 
        additional applicants are in process and nearing completion. 
        All applicants that have filed applications but have not yet 
        been approved will be forwarded to next round of funding.
   Eighty nine (89) homes have either been completed or are 
        near completion.
   Eighty eight (88) additional homes are ready to begin 
        construction.
   Bid packages are being developed for all additional 
        applications that have been approved.
Key Projection
   Eighty (80) homes will be completed/constructed in each 
        month between February 2008 and June 2008.

      INFRASTRUCTURE: STATUS OF INFRASTRUCTURE FUNDS--$30.2 MILLION
------------------------------------------------------------------------
                                                Amount Drawn    Projects
                               Current Budget      To Date      Awarded
------------------------------------------------------------------------
ETCOG........................      $2,049,997         $42,064         14
DETCOG.......................     $12,178,209      $3,372,108         88
SETRPC.......................     $12,450,000      $3,894,314         74
H-GAC........................      $3,616,156        $246,227         17
                              ------------------------------------------
      Totals.................     $30,294,362      $7,554,713        193
------------------------------------------------------------------------

 Texas Department of Housing and Community Affairs--Rebuilding Texas: 
    Disaster Recovery from Hurricane Rita Second Supplemental Update
                                timeline
   September 24, 2005.--Hurricane Rita makes landfall near 
        Sabine Pass while Texas is working to help over 400,000 
        refugees displaced from Hurricane Katrina.
   June 15, 2006.--Congress appropriates a second round of CDBG 
        funds for disaster recovery after Texas has identified $2 
        billion in need and received $74 million from the initial 
        funding.
   October 30, 2006.--HUD announces availability of $428.6 
        million for Texas.
   October through December 2006.--Governor Perry meets with 
        leaders of affected communities to determine how to divide 
        funds to help the largest number of impact people from both 
        Hurricanes Katrina and Rita.
   December 2006-January 2007.--Using a comprehensive plan 
        worked out with community leaders, TDHCA drafts an action plan 
        and holds public hearing throughout the region to solicit and 
        receives significant public comment on proposed State of Texas 
        Action Plan (application for CDBG funds).
   February 2007.--TDHCA Board approves plan and State submits 
        plan to HUD at it first available meeting after the public 
        comment is incorporated.
   April 2007.--HUD awards $428.6 million in Community 
        Development Block Grant funds to State of Texas for disaster 
        recovery to help Texans rebuild their homes which have gotten 
        worse with homes damaged in the fall of 2005 having been 
        subjected to almost 100 inches of additional rain.
   April-August 2007.--Working with experienced Federal 
        contracting attorneys at Vinson & Elkins, TDHCA issues a 
        Request for Proposals for third-party administrator to oversee 
        housing assistance program; collects and evaluates proposals; 
        and, selects top proposal and analyzes the submitted 
        information to determine the best proposal and conducts initial 
        clean-up of the top proposal to make certain they can perform 
        the work before making a recommendation.
   August 2007.--TDHCA Board approves the selection of the 
        nationally recognized ACS State and Local Solutions, Inc. team 
        that includes Katrina-experienced consultants Reznick Company 
        and Shaw Engineering, as the third-party administrator who will 
        manage $232 million in funds to repair or rebuild homes in the 
        region thereby assuring the money will go toward rebuilding 
        communities and providing safe affordable housing.
   August 2007.--TDHCA awards $6 million to Memorial Hermann 
        Baptist Orange Hospital to replace damaged equipment in Orange 
        County deemed by the community to be the most important medical 
        resource in the area.
   September 2007.--TDHCA Governing Board also award $82 
        million in rental housing stock restoration, the full amount 
        mandated in the application to rebuild safe affordable rental 
        housing for the communities.
   October 2007.--TDHCA awards $10 million to Hardin County for 
        timber and debris removal to help stop additional flooding that 
        has isolated neighborhoods and caused additional home loss 
        because of ``natural damming'' of the local rivers.
   October 2007.--TDHCA executes contract with city of Houston 
        for $40 million based on a plan to specifically help Hurricane 
        Katrina victims who are relocating to Texas.
   November 2007.--TDHCA executes contract with Harris County 
        for $20 million; total of $60 million for the city of Houston 
        and Harris County Public Service and Community Development 
        Program to provide much-needed support to Katrina refugees now 
        residing in Harris County.
   November 2007.--TDHCA awards $26 million in non-housing 
        (infrastructure) funding and prioritizes an additional $48.6 
        million amount of need in the region if funds become available.
   December 2007.--TDHCA awards $3.8 million to Bridge City to 
        repair water treatment facility and all funds are now awarded 
        to administrators under the second round of funding 8 months 
        after funding was made available to Texas.
   December 2007.--State and ACS reach an agreement on how to 
        protect Texans and still provide safe affordable housing to 
        victims of Hurricane Rita that have been waiting for 
        assistance. The contract allows for significant expediting of 
        approving existing applications that were collected but not 
        funded in Round 1 and calls for contracts with local builders 
        to provide cost-efficient reconstruction or manufactured home 
        replacement where necessary by local builders thereby assuring 
        a commitment to the home by the builder and helping the local 
        economy.
   December 2007.--All funds are allocated as State of Texas/
        TDHCA finalizes contract with ACS.

                            FUNDING BREAKDOWN
------------------------------------------------------------------------
                                                            Available
                       Activity                            Funding for
                                                            Activity
------------------------------------------------------------------------
Homeowner Assistance Program (``HAP'')................      $210,371,273
Sabine Pass Restoration Program (``SPRP'')............        12,000,000
Rental Housing Stock Restoration Program (``Rental'').        82,866,984
City of Houston and Harris County Public Service and          60,000,000
 Community Development Program (``Houston/Harris'')...
Restoration of Critical Infrastructure Program                42,000,000
 (Infrastructure).....................................
State Administration Funds (Used to Administer                21,433,592
 Funding).............................................
                                                       -----------------
      Total Plan Funding..............................       428,671,849
------------------------------------------------------------------------

      EXECUTION OF CONTRACT WITH ACS STATE & LOCAL SOLUTIONS, INC.

    TDHCA will partner with ACS State & Local Solutions, Inc., to 
administer the $222 million Housing Assistance Program and Sabine Pass 
Restoration Program. TDHCA executed terms of the contract in December 
2007 and chose ACS due to its extensive experience in disaster recovery 
work. The ACS Team includes nationally recognized Shaw Environmental & 
Infrastructure, Inc., and The Reznick Group. The Department will 
maintain close oversight of the ACS Team as terms of the contract as 
well as milestones are met.

 Texas Department of Housing and Community Affairs--Disaster Recovery 
  from 2005 Hurricanes Alternative Housing Pilot Program Update as of 

                            January 24, 2008
  EXECUTION OF THE GRANT AWARD FROM FEMA FOR THE ALTERNATIVE HOUSING 
                          PILOT PROGRAM (AHPP)

   The purpose of the AHPP is to demonstrate an alternative 
        housing solution to the FEMA trailer in the areas affected by 
        the 2005 hurricanes for a time period of 24 months. The Heston 
        Group was selected by pilot a pre-fabricated, panelized 
        solution which can be deployed quickly and built to accommodate 
        a diverse population.
   The Heston Group will be the administrator of the portion of 
        AHPP that relates to the private sites in East Texas as well as 
        providing the actual units to be distributed to applicants. The 
        Heston Group has extensive knowledge in the quick deployment of 
        the Heston Homes due to the work that they have done and 
        continue to do for the Department of Defense.
   TDHCA is working with The Harris County Housing Authority 
        (HCHA) to possibly appoint HCHA as administrator of the group 
        site portion of the AHPP; HCHA is capable of handling this task 
        due to their experience operating a large and complex Housing 
        Authority as well as numerous additional development 
        activities.
   It is anticipated that there will be up to 20 units for the 
        Harris County group site, and between 100-150 units in East 
        Texas on private sites.
   Once the sites have been established and units have been 
        deployed, the HCHA will own both the units and the land that 
        the group site is located on and the households participating 
        in the program in East Texas will own the units they receive 
        from the program.

------------------------------------------------------------------------
         AHPP Milestone               Start Date           End Date
------------------------------------------------------------------------
Using FEMA data, TDHCA            ..................  01/28/08
 identifies anticipated East
 Texas sites for Priority 1
 households and the eligible
 Priority 1 households for
 Harris County group site. TDHCA
 will provide anticipated East
 Texas sites to Heston Group for
 preliminary budget analysis.
TDHCA and Heston kick-off         ..................  01/30/08
 meeting in Austin to execute
 contract.
TDHCA, Heston, and Harris County  ..................  02/01/08
 kick-off meeting to discuss the
 program roll-out and schedule
 (including site selection,
 household selection procedures,
 and other program requirements).
TDHCA, FEMA, Heston, FEMA, and    ..................  Early February
 HUD AHPP kick-off meeting to                          2008
 discuss the program roll-out
 and schedule. TDHCA to provide
 draft selection procedures for
 Harris County and East Texas
 set-asides, and East Texas
 preliminary sites for FEMA
 approval.
TDHCA contacts all Priority 1     ..................  Mid-late February
 households in East Texas to                           2008
 determine if households agree
 to program. Once households
 agree, TDHCA will provide
 required information to FEMA to
 begin environmental clearances.
 Also, TDHCA executes contract
 with Harris County to
 administer the program.
Harris County deadline for final  ..................  Late February 2008
 group site selection and
 purchase. FEMA to start
 environmental review of site as
 soon as possible for selected
 Harris County site.
Harris County Lease sent to FEMA  ..................  03/18/08
 General Counsel for approval.
FEMA completes all Priority 1     ..................  03/28/08
 environmental and historical
 clearances for Harris County
 and East Texas Sites.
Groundbreaking for Harris County  ..................  Early April 2008
 and first East Texas homes.
Infrastructure complete for       ..................  06/30/08
 Harris County group site.
All East Texas and Harris County  ..................  08/01/08
 units are deployed and
 ownership transferred to
 households or Harris County.
All Harris County units leased    ..................  09/01/08
 up.
Harris County units demobilized   ..................  09/01/10
 and returned to storage.
AHPP period of performance ends.  ..................  12/31/11
------------------------------------------------------------------------

    Chairman Thompson. Thank you very much.
    I thank all the witnesses for their testimony.
    I remind each Member that he or she will have 5 minutes to 
question the witnesses. It is the intention of the Chair to do 
questions from the Chairman and Ranking Member before we 
adjourn for about 20 minutes for votes on the floor, and we 
will reconvene after that.
    Is that all right?
    Mr. King. Yes, sir.
    Chairman Thompson. Thank you very much.
    Mr. Castillo, please tell the committee whether or not FEMA 
asked for short-term and long-term health consequences relative 
to the issue of formaldehyde in the trailers.
    Mr. Castillo. Sir, when we first approached CDC, what we 
had asked for was what were the short-term implications of 
formaldehyde and what could be done to mitigate that. That is 
what the initial report was, and that was the initial request.
    Chairman Thompson. I will continue. Can you tell me why 
that came from the general counsel office and not the Disaster 
Assistance Directorate?
    Mr. Castillo. Sir, I don't know why that--where it came 
from at that point. Although, that was before I was there, but 
I really can't answer why it came----
    Chairman Thompson. Can you get it for us?
    Mr. Castillo. I will. I will. Yes, sir.
    Chairman Thompson. Just for the record, I would like to say 
FEMA Administrator Paulison was before this committee on May 
15, 2007. The question to him was relative to formaldehyde, and 
I quote, Mr. Paulison said that, ``We have been told that the 
formaldehyde does not present a health hazard.'' That was what 
we were told before this committee. Obviously, there is a 
difference of opinion at this point.
    So, is it your testimony before this committee that, based 
on what you received, that formaldehyde is a health hazard to 
the citizens who may live in them?
    Mr. Castillo. Yes, sir. I have to preface this by saying 
that FEMA is not a public health agency. We are an emergency 
management agency, and our role is to coordinate that 
assistance.
    But we went to the experts, and, yes, after we realized the 
magnitude and the scope of this problem--which, to be clear, 
when there was a report from a pediatrician, I believe in 
Mississippi, in the Gulf Coast, who noticed trends in his 
patients, the day after we learned of that, we reached out to 
our Office of Health Affairs in Department of Homeland Security 
and went to aggressively working toward resolving this issue.
    Chairman Thompson. Thank you.
    What I want you to do for the committee is to provide us 
with a time line from the initial point that FEMA was put on 
notice, officially, unofficially, about formaldehyde in 
trailers, and what you did do.
    Dr. Falk, can you provide the committee with any other 
additional information relative to formaldehyde in trailers?
    Dr. Falk. Certainly formaldehyde in trailers may be a 
health concern. I think ATSDR produces toxicology profiles, and 
they discuss acute risk levels, intermediate risk levels and 
long-term risk levels. So I think there are certainly 
understanding of those effects.
    I think, as I stated before, in terms of that initial 
consultation, the focus appeared to the people who worked on it 
to be on the mitigation factors and whether air conditioning 
and ventilation, in particular, seemed to be effective. I think 
that is what they focused on there. I don't think that was 
meant to be a definitive statement about the potential for 
long-term health effects.
    Chairman Thompson. Well----
    Mr. Dicks. Mr. Chairman, just briefly?
    Chairman Thompson. Go ahead.
    Mr. Dicks. This has been known for years and years and 
years, that formaldehyde in these trailers was a problem. This 
is not something new. I can remember back in the 1960's and the 
1970's, this was brought to our attention that this was a 
problem.
    Chairman Thompson. Dr. Falk, is it a problem?
    Dr. Falk. I think that is correct. I think perhaps many 
people did not perceive the protracted nature of length of stay 
in the trailers immediately and the depth of the issues related 
to Hurricane Katrina and the fact that there would be long-term 
stay in the trailers so that there was potential for long-term 
exposure.
    Chairman Thompson. Did the CDC say to FEMA that the long-
term health implications of staying in travel trailers is 
something that you should not even entertain for victims of any 
disaster?
    Dr. Falk. I think the difficult part for me and probably 
many looking at that original health consultation is that, as 
construed, the request narrowly responded to the mitigation 
issue, said it was not addressing the long-term issues, did not 
address them. It probably would have been a lot better, at that 
point, to have been very explicit. Unfortunately, it focused 
narrowly on the question at hand.
    Chairman Thompson. So are you saying FEMA didn't ask the 
right question?
    Dr. Falk. I am saying I think the people who worked on it, 
for whatever reason--and I can't speak to this totally, but 
that is the way it was interpreted and construed. They 
understood they were being asked about the impact of factors 
such as ventilation and air conditioning, and I think they 
didn't--they responded to interpreting the data that they were 
presented with on the effects of ventilation and air 
conditioning. I don't think they responded broadly to the broad 
questions in that initial effort. That led to some of the 
subsequent correspondence and revisions to highlight when they 
understood the limitations, the importance of----
    Chairman Thompson. I am out of time, and we might get 
another round in after this.
    Ranking Member King.
    Mr. King. Thank you, Mr. Chairman. I realize we are coming 
down to a vote, so I will cut my questions short.
    But, Dr. Falk, you said you had been with CDC for 36 years. 
From your perspective, did anyone at FEMA try to 
inappropriately influence the outcome of this report?
    Dr. Falk. As near as I can tell, there was a request to 
review this information, to look at the data, to analyze it, 
and the group that responded to that interpreted that, in such 
a fashion that they were, that they thought they were 
responding to the request that was presented to them. I don't 
see obvious manipulation or any attempt, you know, based on the 
requests as I see them. But, you know, I think it is really 
probably important for all of us to fully evaluate those 
questions and assure ourselves on that.
    But my understanding, as I look at this so far, would be 
that the request was interpreted in a way that it was fairly 
narrow. Don't forget, the group that had been handling this 
request, had been since the time of Hurricane Katrina reviewing 
many such requests to look at data from EPA related to chemical 
exposures post-Katrina, related to exposures through the 
debris, and I think they were in that mode, functioning that 
way, and so thought about the request in those kind of terms.
    Mr. King. I am not trying to influence your testimony at 
all, but, to me, it would be a very serious charge if FEMA was 
trying to inappropriately influence CDC. Do you believe it was 
inappropriate? Were they trying to influence it? Or was this an 
honest attempt to get an answer?
    Dr. Falk. I understand that would be a very serious charge. 
I can only say that, for me, I can look at this from the CDC 
perspective and what the CDC people did, and I think they were 
trying to, in their terms, respond to what they thought was a 
very specific request.
    I don't think I can speak, personally, to the intent of 
FEMA requests and so on. That would be for other colleagues to 
address. But that is how I view what the CDC people did.
    Mr. King. Mr. Castillo, let me ask you, did FEMA ever 
attempt to improperly influence the outcome of this report?
    Mr. Castillo. Sir, FEMA did not and would not attempt to 
unknowingly or knowingly influence the outcome of any report or 
any direction or any manipulation of scientific information.
    Mr. King. Did you ever receive any information that anyone 
at CDC was pushing back and thought there was improper 
influence coming from FEMA?
    Mr. Castillo. No, sir.
    Mr. King. There was never any complaint or any statement 
made back to FEMA by anyone at CDC that there was improper 
influence?
    Mr. Castillo. No, sir. This came up yesterday when we 
received the letter from another committee to look into 
looking--with other information included, was when we first 
heard of that, when I first heard of that. Although, as an 
agency, like I said, we are not--it is not our mission, it is 
not our purpose or our intent to ever try to influence, unduly 
or otherwise, any report.
    Mr. King. Thank you.
    Thank you, Mr. Chairman.
    Chairman Thompson. Thank you very much.
    Mr. Castillo, when people ask questions, if it is 
convenient to say ``I wasn't around,'' you do. When they ask 
another question, you answer it during that same time frame. So 
I want you to be mindful of the time frame that we are talking 
about.
    We are going to recess the meeting subject to the two 
votes, and we apologize to the witnesses. We will reconvene 
right after that. Thank you.
    [Recess.]
    Chairman Thompson. We would like to reconvene our hearing. 
At this point Mr. Souder of Indiana is recognized for 5 
minutes.
    Mr. Souder. Thank you, Mr. Chairman. I actually have two 
subjects I want to touch on. I hope I will have additional 
time. Let me just point out for the record so there is no 
question, in Elkhart County is where approximately 58 percent 
of the trailers are made in America. Joe Donnelly and I 
represent that district.
    I first wanted to briefly make a couple of comments about 
FEMA disaster declaration that failed to occur in my district. 
Mr. Castillo and I had a long conversation. I know I was a bit 
testy. I appreciate him putting up with that. But I feel very 
defensive for the people in my district. I briefly want to read 
into the record. The town of Nappanee had approximately 10 
percent of its town destroyed in a tornado, were twice denied 
by FEMA aid. This type of letter, which actually comes from a 
resident in a nearby bigger city says, Nappanee residents are 
proud, hard-working, self-sufficient, and God-fearing people 
who have not spent their lives learning to solicit Government 
funding. Besides that, there is not enough votes in Nappanee to 
interest those people who give out such freebies.
    Nothing new here, just 21st century America. The challenge 
that we have is in FEMA's denial to this small town; it was 
stated that they had sufficient resources. The fact is is that 
the town sustained $942,000 in expenses in a town of 5,000, of 
which they had $469,000 covered by insurance. FEMA's position 
in our discussion was that the State should pick this up. The 
State had never done this before. It was kind of a new 
challenge. But they put in $198,000, which left the town with 
$285,000. The community residents came together, but this has 
nothing to do with actually low-income people who lost their 
homes or who don't have services. That left the city short 
about $300,000 in this small town, plus the people not served. 
But the town people came together in the region and raised 
$600,000. Now had they sat back in the FEMA denial, it said 
that they had sufficient resources. This is a below-average-
income town. They have sufficient resources because they gave 
themselves and they insured themselves. I want to talk further 
at another point about how we deal with small towns.
    Ten percent of the homes were destroyed in southern 
California between Santa Barbara and Los Angeles, California, 
the statistics that you gave me and were in the news, that you 
had 3,000 homes compared to 300 destroyed in an area with 
possibly 15 million people that certainly had far more 
resources to take care of it than the people of Indiana or that 
community. Somehow we have in our policy, I believe, built in a 
prejudice that makes it very hard for small towns to meet FEMA 
emergency standards, particularly small towns that are 
aggressive and don't wait around for the Government to come in 
a couple days later and make assessments. It is a policy 
question in addition to I am just outraged to what happened to 
this town. It spread to Fort Wayne, to South Bend because 
nobody understands and they all have had FEMA declaration 
questions.
    We have lots of flooding in Indiana. We have occasional 
tornadoes. It is a huge challenge. While it is not the subject 
of today's hearing, it is indirectly related. Then ironically, 
this same town that has been hammered by the tornado, that had 
a downtown fire 2 weekends ago that is arson, is the No. 1 
manufacturer of the trailers that went to FEMA for Katrina. I 
sat through the Government Reform hearings. Quite frankly, they 
were extraordinary entertainment. But I was totally unimpressed 
with the science. It was all hoopla, all hat and no cowboy so 
to speak. There wasn't any science. The fact is is that I would 
like to insert into the record, Mr. Chairman, an article from 
Florida in the Palm Coast, if I may ask unanimous consent to do 
so.
    Chairman Thompson. Without objection.
    [The information follows:]

           News Article Submitted by Honorable Mark E. Souder

REP. HASTINGS URGES FEMA TO SPEED ITS HEALTH REVIEW OF TRAVEL TRAILERS 
                       USED AS EMERGENCY HOUSING

By Tyler Treadway, Thursday, August 16, 2007.
    With Tropical Storm Dean looming in the Atlantic Ocean, South 
Florida congressmen are getting involved in the effort to make the 
Federal Emergency Management Agency travel trailers available as 
emergency housing.
    U.S. Rep. Alcee Hastings sent a letter to FEMA Director David 
Paulison asking that the agency quickly complete its investigation of 
possible formaldehyde contamination of the trailers so they ``may 
become available for future Florida disasters.''
    Also, St. Lucie County Administrator Doug Anderson is asking U.S. 
Rep. Tim Mahoney, a Democrat from Palm Beach Gardens whose 16th 
Congressional District includes parts of St. Lucie, Martin, Charlotte, 
Glades, Hendry, Highlands, Martin, Okeechobee and Palm Beach counties, 
to get involved.
    FEMA announced earlier this month that it temporarily was 
suspending the deployment of travel trailers as emergency housing, 
citing possible health problems caused by excessive formaldehyde levels 
in units sent to the Gulf Coast for victims of Hurricane Katrina.
    Anderson said that Tuesday evening he asked Sherry McCorkle, 
Mahoney's district director at the congressman's Stuart office, to find 
out the status of the suspension and how it affects the roughly 220 
travel trailers FEMA has stored at the St. Lucie County Fairgrounds.
    ``We've been told that those trailers would have to tested for 
formaldehyde before they can be used in an emergency,'' Anderson said. 
``But we haven't been told who's going to test them and when. We've 
also been told that FEMA isn't going to allow any trailers to be 
brought in if there's an emergency. If that's the case, we've got a 
problem. After (hurricanes) Frances and Jeanne, those trailers were our 
salvation as far as temporary housing . . . There's a storm out there 
now (Tropical Storm Dean) that may not hit us, but there may be another 
one next week.''
    McCorkle said late Wednesday that Mahoney's office is ``working 
with FEMA to get (Anderson) an answer.''
    Hastings, a Democrat from Miramar in Palm Beach County, whose 23rd 
Congressional District includes parts of Martin, St. Lucie, Palm Beach, 
Broward and Hendry counties, noted in his Aug. 7 letter to Paulison 
that ``no other temporary housing solution exists beyond using travel 
trailers.''
    Aaron Walker, national spokesman for FEMA, said he was not sure of 
the timeline that the Federal Environmental Protection Agency and the 
Centers for Disease Control have set for testing the trailers, but he 
didn't expect the process to being sooner than the next 30 to 60 days.
    ``We recognize the time frame,'' Walker said, ``that we're in the 
middle of hurricane season. But we have to make sure the travel 
trailers are safe, and trailers in Florida are no more or no less safe 
than those in Louisiana and Mississippi.''

    Mr. Souder. That Representative Alcee Hastings says that he 
is concerned that this investigation is slowing down the 
potential to respond to Florida. Out of 20,000 of these 
trailers that went there, there was one complaint. The housing 
standard that was put into these trailers was HUD standard, .4 
formaldehyde, that in the study it has to go beyond just what 
happened in Katrina and Mississippi because there may be 
localized effects. But we have been assassinating an industry 
here and a question of whether formaldehyde can be used. 
Formaldehyde is actually in your body. You would die without 
formaldehyde. When we get into these debates, it is like 
formaldehyde is always wrong. We want to make sure people don't 
get sick in housing. We all share that. We also want to make 
sure that housing is affordable, that it can get there in 
emergencies and it is a tough balance. We have a .4. They are 
trying to look to how to build to the California standard, 
which is a little higher. But to say it has to be a zero 
tolerance is quite nonsensical, quite frankly. That we have to 
look at a broader question here beyond just Katrina. Why aren't 
the statistics coming in from Florida?
    Congressman Dicks raised this has been a long battle. Is it 
a long battle in regular housing? Formaldehyde is in regular 
housing. They are meeting the HUD standards for regular housing 
in these particular trailers that were made. So why aren't the 
employees at the companies getting sick? Somewhere around 1 in 
10 people in America have been in these trailers and either own 
them or have leased them in America. We don't have these kind 
of reports.
    Now, there is a question of length of time. Well, if there 
is a length of time in ventilation, that ought to be looked at 
beyond just what happened in Katrina here before an entire 
industry gets changed because, quite frankly, many seniors 
travel around in these trailers all over the country. There is 
no evidence that the question, bluntly put, is, has this been 
ripped up? Because the people that we had in front of us at 
Government Reform had multiple possible explanations beyond 
just the trailers. It also could be the season, the dampness, 
there was something else that interacted that wasn't 
fundamental to the percent of formaldehyde in a normal trailer 
that was aggravated in those situations. I would urge you to be 
very careful about the science here because thousands and 
thousands of people's jobs are dependent. Affordable housing is 
dependent. If you make these up, quite frankly, there are 
people who would like to make this type of housing more higher-
priced so that they can compete. Whenever you make these 
changes--also the question is, how else are you going to do 
this? How are you going to help people who are in an emergency 
if you don't have something?
    Now certainly there are legitimate questions about whether 
or not people were kept in them too long and all those kind of 
questions. But I urge you and the Centers for Disease Control 
to make sure that this is precise because it affects multiple 
categories, employees, people who live in emergency handling 
and affordable housing. Thank you.
    Chairman Thompson. Thank you very much. I don't think we 
need a response to that. The gentleman will obviously have 
additional time for questions. We now recognize the gentleman 
from Texas for 5 minutes, Mr. Green.
    Mr. Green. Thank you, Mr. Chairman. I thank the witnesses 
for testifying today. Let me start with Mr. Falk. Mr. Falk, 
sir, you indicated that there was a narrow question posed. Is 
that correct?
    Dr. Falk. I pointed out initially that that was the case. 
In the current effort, we are actually doing a number of----
    Mr. Green. You also indicated that because the question was 
narrow, the answer was designed to accommodate the question.
    Dr. Falk. I think the answer was designed to answer the 
question.
    Mr. Green. Yes. Well, is this one of those questions where 
a person knew or should have known that by asking a narrow 
question you would get a narrow answer?
    Dr. Falk. I think--the way I would phrase it in terms of 
the ATSDR folks, they are used to getting a number of very 
specific questions about mitigation efforts, a specific 
practice, for example, after Hurricane Katrina related to 
debris or what a specific set of--levels of chemicals in soil 
might mean. I think they, the people that dealt with this--
dealt with this problem as they have been dealing with problems 
and so they focused very specifically on the question at hand.
    Mr. Green. By focusing on the specific question at hand, 
they overlooked an entire universe of additional knowledge that 
would have been beneficial?
    Dr. Falk. I think--I would agree with you. I think the 
earlier one would have introduced the broad discussion about 
the potential for long-term effects. Maybe that would have 
advanced. I can't disagree with you on that. That did come up 
for a very full discussion when Admiral Paulson wrote to Dr. 
Gerberding.
    Mr. Green. Now let's talk about the person who received the 
question. Should that person, having received a question 
regarding what is a potential health hazard, should that person 
have known that this would necessitate a broader answer than 
the one that was accorded?
    Dr. Falk. I think they were focused on an issue that in 
their mind was unoccupied trailers. They saw this as a very 
specific question about practices and how that related to 
formaldehyde levels generically in trailers. I think they were 
very focused on specific mitigation efforts on things like the 
use of air conditioning and different ways of ventilating the 
trailers. I think they were trying to respond very specifically 
to those questions. That is how they construed the issue to 
them.
    Mr. Green. If I may, Doctor, how did they conclude that 
this was unoccupied, the trailer was unoccupied?
    Dr. Falk. The data that was given in that original ATSDR 
health consult was very clearly from 96 unoccupied trailers. 
The formaldehyde levels had been collected in those trailers by 
EPA. The data was then transferred from FEMA to ATSDR. Can you 
look at this data? It was very clearly identified as levels in 
unoccupied trailers. They had looked at it over multiple days 
and circumstances.
    Mr. Green. The recipient of the letter knew that the 
response was going to be one that would relate to persons who 
were living in trailers, trailers that were occupied. Is this 
correct?
    Dr. Falk. I am sure they had to have some sense that this 
kind of information would have been helpful to anybody wanting 
to address some issues in occupied trailers.
    Chairman Thompson. Would the gentleman yield?
    Mr. Green. Yes.
    Chairman Thompson. What purpose would getting this 
information for an unoccupied trailer, how would that help in 
this situation?
    Dr. Falk. Well, if, for example, one looks at the data in 
that original consult, the issue was, does air conditioning, 
turning the air conditioning on lower the formaldehyde levels? 
The other item that was tested was whether ventilation, opening 
windows, vents and so on. There actually was a very--there was 
a real difference. So the air conditioning did not lower the 
levels nearly as much as the opening of windows and the vents. 
So that is kind of useful information to know in terms of what 
kinds of practices actually change the formaldehyde levels. And 
so----
    Chairman Thompson. That is the short-term answer?
    Dr. Falk. I think that is for any term. The question was, 
will it lower, you know, formaldehyde levels? The issue in 
terms of long term is, can it lower levels sufficiently to be 
fully protective of long-term effects? This consult noted--it 
didn't actually speak to that. It spoke to the fact that they 
thought that the ventilation lowered the levels to the kind of 
a level that is related to acute effects in people who have 
been sensitized. They said they weren't addressing the long-
term impact.
    Chairman Thompson. Who said they weren't addressing the 
long-term impact?
    Dr. Falk. The people who wrote it. They said they weren't 
trying to establish a safe----
    Chairman Thompson. Just for the record, who are these 
people so we will be clear?
    Dr. Falk. These are the individuals at ATSDR who wrote the 
consult.
    Chairman Thompson. At CDC?
    Dr. Falk. Well, ATSDR is a very related agency to CDC.
    Chairman Thompson. We want to be sure the record is 
complete.
    Dr. Falk. It is the ATSDR health consultation exactly.
    Chairman Thompson. I have taken the gentleman's time. But I 
think the question is from CDC's standpoint, if you know there 
are potential health hazards for people who live in the 
trailers, is it not, from your perspective, the right thing to 
do is to tell FEMA even though you didn't ask us we want to 
make sure you are aware of the long-term health consequences of 
people living in trailers based on our review?
    Dr. Falk. I think you are absolutely correct. I think that 
was the reason that other senior scientists tried to correct 
that in letters to FEMA to identify that the issue of whether 
these were fully protective of long-term effects had not been 
addressed in that document. That is why it was reissued and 
tried to actually say that more explicitly.
    Chairman Thompson. So I guess the question now is, is FEMA 
in custody of this information?
    Dr. Falk. Well, there were two letters that were forwarded, 
one in late February and one I believe on March 17.
    Chairman Thompson. So it is to your recollection FEMA is in 
possession of these letters?
    Dr. Falk. They have been sent, yes.
    Chairman Thompson. Mr. Castillo, are you aware of these 
letters?
    Mr. Castillo. Yes, sir. Again, what the letters and what 
Dr. Falk is saying, having to do with whether there is any 
long-term effects, we are aware of that. When this came to our 
attention, as I said earlier, when it came to our attention 
following the trends that were noticed, we realized that this 
was an issue that needed to be addressed. That is when we began 
to take action. So we don't question whether there is a long-
term or a short-term effect. We understand, we have been told 
that there is potential harmful effects from being in 
formaldehyde, especially to people who are sensitive to it. So 
we don't question that. Once we realized that, we began with a 
24/7 call center for people who had concerns to--and the vast 
majority had questions that were referred to CDC--but the 
people who had concerns about being in the trailers were 
offered immediately either hotel or motel in the immediate or 
given other options so they can move out.
    Chairman Thompson. So how did you notify the people living 
in the trailers?
    Mr. Castillo. We have went out--hand-delivered flyers. 
There has been media announcements.
    Chairman Thompson. Every trailer?
    Mr. Castillo. Yes, sir, in the Gulf Coast. Through our Gulf 
Coast, through our transitional recovery offices that we have 
in every State. We went out to every trailer and handed out 
flyers, have posted them, have announcements on, I believe 
television but I know radio, that this is the process. These 
are the numbers to call. Now these folks know the number to 
call because that is the number they called to get in.
    Chairman Thompson. Thank you. If we have a disaster 
tomorrow, would we have people in these same trailers?
    Mr. Castillo. The people who are in there now?
    Chairman Thompson. No. Obviously not the people in there 
now. If we go to Ohio with the disaster.
    Mr. Castillo. Well, sir, the trailers, travel trailers, 
first of all, we have--in the direction from Secretary Chertoff 
and Administrator Paulson is that we will not use travel 
trailers.
    Chairman Thompson. What will we use? I am just trying----
    Mr. Castillo. I am sorry.
    Chairman Thompson. I am just trying to get to the point, if 
we have a problem with the trailers and FEMA is charged with 
temporary housing, shifting it to HUD at some point, what is 
the temporary housing plan if you have deemed travel trailers 
to be insufficient given their health consequences?
    Mr. Castillo. That is correct. In any case, travel trailers 
were a last resort. We looked to place people in temporary 
housing, in apartments that may be available, and depending on 
the magnitude that may be available locally, maybe a little 
further away. But the point is we looked to place them in 
temporary housing, meaning working toward a more permanent 
solutions, but apartments.
    Chairman Thompson. Thank you. The gentleman from Indiana, 
would you like to----
    Mr. Green. Mr. Chairman, if I may? Thank you. Sir, Mr. 
Castillo, were there children in these trailers?
    Mr. Castillo. Yes, sir.
    Mr. Green. Were these children in these trailers for 
months, some of them?
    Mr. Castillo. We are talking about the trailers that are 
currently in the Gulf Coast?
    Mr. Green. The trailers with the formaldehyde.
    Mr. Castillo. With families, yes.
    Mr. Green. Have the children been examined so as to 
ascertain whether or not there has been some adverse impact on 
the children?
    Mr. Castillo. Sir, I don't know. I don't know the answer to 
that at all.
    Mr. Green. We do not have a program in place to assist 
persons who have been in the trailers, a health--not a notice, 
not just a simple document saying you have been in this 
circumstance. But are we actually taking affirmative action to 
examine people, especially children?
    Mr. Castillo. Yes, sir. I will defer to my colleague from 
CDC. But there is the Help line that families can call if they 
have concerns that are then given direct information----
    Mr. Green. I understand. But sometimes people don't always 
call as promptly as they should. So, Doctor, would you care to 
please explain?
    Dr. Falk. Let me mention several things. First, that is a 
very important issue. Children. We recognize that it is a real 
concern. Very much keeping cognizant of that. One of the things 
we have----
    Mr. Green. Doctor, I am going to have to interrupt you 
because my time is almost up. So please now, I am not trying to 
be rude. Listen, do we have a program that involves the 
examination of children who were in these trailers? A program.
    Dr. Falk. There are two efforts under way. One is to 
evaluate what happened to children.
    Mr. Green. What does under way mean? Is that something you 
thought of just now? Or is it something that has been codified 
that is on-going?
    Dr. Falk. One is on-going and one is being planned to 
start----
    Mr. Green. How many children have been examined?
    Dr. Falk. We are--currently the effort is underway.
    Mr. Green. How many? How many children?
    Dr. Falk. We are actually reviewing the records of several 
hundred--we are reviewing the records of several hundred 
children who were treated by physicians in Hancock County, 
Mississippi to evaluate those records.
    Mr. Green. Were those children taken to the physician 
specifically because of the conditions in the trailers?
    Dr. Falk. Yes.
    Mr. Green. So you have several hundred children who have 
been examined?
    Dr. Falk. They have been examined in Mississippi, and we 
are reviewing the records to review the health effects that 
have been reported and to try to analyze that. That is well 
under way, and we hope to be able to report on that I believe 
in a coming month or 2.
    Mr. Green. Doctor, it seems to me that this would be a 
circumstance that would necessitate immediate action, if not 
sooner. To say that we are looking at records from children who 
were examined at some earlier time, it seems that we are not 
acting expeditiously, not to my satisfaction, given that we 
have children who have suffered under these conditions. Why is 
it taking so long?
    Dr. Falk. We also have worked on developing a protocol to 
look at a much larger number of children which hopefully can be 
under way in the near future. That is designed to actually look 
at these children over time for a period of maybe--of up to 5 
years to ascertain whether there were impacts from having been 
exposed or sensitized. That is a protocol that is being 
developed and hopefully will be under way in the near future.
    Mr. Green. Why is that protocol not in place? This is not 
something that happened within the last month. Does it take 
this amount of time to develop a protocol?
    Dr. Falk. A study protocol, yes. Because you want to be 
able to analyze that and be able to provide, you know, good 
information.
    Mr. Green. Thank you, Mr. Chairman. I will wait for the 
second round.
    Chairman Thompson. Thank you. The gentleman from Indiana.
    Mr. Souder. I appreciate the Chairman's indulgence. We 
clearly have two things occurring here and I am worried that 
they are overlapping. One is that serving the people in Katrina 
who clearly have felt there has been an inappropriate response 
certainly from the early days on. It has gotten involved in a 
very contentious question and needs to be an urgent question 
related to the Government. But then I was very disturbed to 
hear that based on assertions and lawsuits, not facts at this 
point on Katrina, that you are going to ban travel trailers for 
everybody else when in fact no evidence exists of similar 
phenomena. In Florida where out of 20,000, one case. These 
things are used all over the United States.
    I would also like to comment about that because--I 
mentioned that earlier to Mr. Falk. But then Mr. Bregon, my 
understanding is I mean, the trailers were built to .4. That is 
the HUD standard. What does this precisely mean? Does it mean 
that--you have formaldehyde in so-called site-built 
recreational vehicles, isn't formaldehyde fairly common in 
homes, and isn't there a standard?
    Mr. Bregon. The Department of Housing and Urban 
Development's Office of Housing has a division which is the 
insured housing. We have an office that insures prefabricated 
homes. So when we are talking about trailers and prefabricated 
homes or modular homes, they are two things. We do test for 
materials that are used in the construction of modular homes or 
prefabricated homes. But we do not test trailers or the ones 
being used by FEMA. Our studies indicate that the materials 
that are used in the modular homes that the Department of 
Housing and Urban Development regulates as part of its 
insurance programs, you are correct, sir. What we are looking 
at is .4.
    Mr. Souder. And .4, Dr. Falk, when you look at that, are 
you looking at variations? Because an isolated study in Katrina 
is one thing. But it is not like this is a known or an unknown 
quantity in housing.
    Dr. Falk. One of the studies that was addressed in my 
written testimony, and we would be able happy to provide 
additional information on that, is that in addition to the 
occupied trailers, we have several investigations under way to 
evaluate unoccupied trailers and understand as best we can 
where the formaldehyde comes from and what potential ways there 
are to mitigate that and understand where the source is and 
could that be done without--so, for example, you are looking at 
formaldehyde levels under different conditions in the 
unoccupied trailers. We are taking apart a significant numbers 
of trailers, looking at all the furnishings and trying to 
identify what are the specific low sides for the release of 
formaldehyde. We will also be working--planning to do this with 
NASA to look at some specific mitigation techniques that could 
actually address whether you could actually lower those 
formaldehyde levels in the trailers.
    So we are trying to look in a very thorough way as to 
whether specific aspects of the construction of the trailer 
that contribute to the formaldehyde and is there a way of 
mitigating that. That is separate from the study of the 
occupied trailers. I believe the recreational vehicle industry 
is aware of these. They have commented on those study 
protocols. So we are trying to actually pinpoint, see whether 
specific issues that could be addressed.
    Mr. Souder. Why do you believe this question never came up 
in an extensive way before Katrina?
    Dr. Falk. I think Katrina in my mind, in my time at CDC, 
and I am not a housing expert. But you know I was in Louisiana 
after Katrina, approximately 1 week later. The numbers of 
individuals displaced, the numbers of housing units that were 
needed are just so much larger, I think, than in previous----
    Mr. Souder. But wouldn't you have seen statistical 
anomalies with 20,000 in Florida? I mean, it is not like we 
haven't done thousands, tens of thousands of these and not 
noticed statistical anomalies.
    Dr. Falk. I think in terms of the questions that have been 
raised about long-term effects, you would notice the short-term 
effects. People would have nasal irritation, eye irritation, 
coughing, exacerbation of asthma. You would not notice if there 
was a potential for long-term effects, say cancer, in the long 
term. You would not be seeing anything. The issue is whether 
one can get the formaldehyde levels down to the point where 
people are not concerned about the long-term effects. So that 
is what we are actually trying to see, whether you can actually 
study the problem over the next several months and identify the 
source of the formaldehyde and if there is something remediable 
about that or fixable about that.
    Mr. Souder. Thank you. Mr. Chairman, thank you. I do want 
to point out that what we are talking about mostly in Katrina 
are short-term effects. They are also looking at long-term 
effects which would also affect the study lengths too. But the 
Katrina stories we heard over in Government Reform and the 
cases were mostly short-term because there were no long-term 
yet.
    Chairman Thompson. Thank you. The gentlelady from the 
Virgin Islands for 5 minutes.
    Mrs. Christensen. Thank you. Our colleague, Ms. Sheila 
Jackson Lee, has to leave for a meeting. So if it is all right, 
I will switch my time with her.
    Chairman Thompson. The gentlelady yields her time.
    Mrs. Christensen. Will I be able to reclaim her time?
    Chairman Thompson. Yes, which is a little further down.
    Ms. Jackson Lee. Mr. Chairman, let me thank you very much. 
I would like to answer a number of the points that my good 
friend from Indiana has made. I want to thank the Chairman for 
what I consider to be an enormously important hearing and to 
try to focus on the crux of why we are where we are.
    There is long-term damage on this question of formaldehyde 
because we have a situation where individuals are in trailers 
for now more than 3 years. That is the plight that we find 
ourselves in. I know that this has been offered into the 
record, but I do want to acknowledge Dr. Christopher DeRose--
DeRoss, who--it looks like it is Dr. DeRosa, who offered his 
concern February 27 about the formaldehyde situation and the 
lack of action by CDC. I think he is a whistleblower and I want 
to acknowledge that. Mr. Chairman, I also would like to hope 
that we will be able to view the video, the news video that 
really framed the crux of why we are here. The problem that we 
have is that the idea that Congress had to solve quick response 
to disaster housing is a complete failure, and HUD and FEMA are 
wrapped around this failure. Except for the fact that I will 
acknowledge that HUD, the language waived all its rules and I 
understand that and I appreciate it. But it obviously 
disconnected to the States; in particular, if I might, Texas 
and Mississippi.
    Mr. Gerber, let me thank you and all of your hard workers. 
I understand that you were implementing this program through 
your leadership in the State. But the State of Texas has 
failed. Plain and simple. I want to put on the record--and I am 
sorry that the Governor is not here because he made these 
determinations to have us--in a situation where we had $428 
million that was rendered to Texas, $210 in southeast Texas, 
$60 million in Houston, $42 million, critical infrastructure, 
$21 million to be used for administration. We spent $1 billion 
out.
    So let me go to Mr. Castillo and Mr. Bregon. You are the 
holders of this failure because Congress came and said, how do 
we help these people in the immediacy of their dilemma and 
their crisis? This is the face of people living in trailers now 
since 2005 who are not getting out of these trailers any time 
soon. Why? Because where is the oversight by the administration 
on the Governor of Texas? The Governor of Mississippi is now 
using his moneys for infrastructure building. So people are 
left homeless again. The reason why formaldehyde is an issue is 
because you have them in these trailers for longer than 6 
months, 7 months, 8 months. When Texas took the freedom of 
saying they will use the comm as opposed to direct 
compensation, why were there not benchmarks, that you begin to 
ask the Governors what are you doing with the money? Why hasn't 
the money been spent?
    Mr. Castillo, is this working? What can we do better to 
ensure that we do not have the collapse that we have now 
between the Federal Government and the State? Mr. Bregon, I 
would like you to answer as well.
    Formaldehyde is cancerous. This is the face of a person 
living in a cancerous condition, and there is no dispute of 
that. Mr. Castillo.
    Mr. Castillo. Congresswoman, I want to tell you from FEMA's 
perspective, we are doing everything we can to get people out 
of travel trailers and out of mobile homes into more permanent 
housing. I believe what you are referring to has to do with the 
CDBG funds that are used, and that is not something within 
our----
    Ms. Jackson Lee. Mr. Castillo, don't push the button. We 
formulate this process to move you and HUD together so that 
there could be a transition. Right. So my question is, what 
relationship do you have to HUD? You got these trailers there.
    Mr. Castillo. Yes.
    Ms. Jackson Lee. It doesn't mean because we created a 
pathway that you were supposed to drop the ball. Did you assess 
what was happening to people that were in your trailers as to 
whether or not they got out of your trailers after the money 
was distributed, after you transitioned to Mr. Bregon? Don't 
you think you had a responsibility, since these are FEMA 
trailers, to wonder where people are or whether or not you need 
to go move the trailer off of the land because people are out 
of the trailers?
    Mr. Castillo. The number of people that were transferred to 
HUD under the DHAP program were approximately 28,000 
households.
    Ms. Jackson Lee. Did they live in trailers?
    Mr. Castillo. Not all, no.
    Ms. Jackson Lee. Some did? Some are in your trailers?
    Mr. Castillo. Yes. But the trailer, as we move people out 
in the trailers, they ideally--and I believe there would be 
about 8,000 more families that were moved, transitioned from 
trailers, usually going from trailer to an apartment----
    Ms. Jackson Lee. I understand that. Do you have people 
living in trailers in southeast Texas, to your knowledge? The 
trailers that you put on the ground, are they your FEMA 
trailers?
    Mr. Castillo. Yes. They were purchased----
    Ms. Jackson Lee. Mr. Bregon, that is the question. Mr. 
Castillo. You still have people living in a trailer. We created 
the seam. The seam didn't work. My question is, why isn't FEMA, 
DHS connecting to ask, why are people still in trailers, based 
on the instructions of Congress? Mr. Bregon, again, people are 
in trailers in southeast Texas with a $428 million disbursement 
to the State of Texas. Where is the accountability in HUD? Why 
are these people in trailers that are subject to formaldehyde?
    Mr. Bregon. Thank you for your question, Congresswoman 
Jackson Lee. There are two different things we are talking 
about here. We are talking about the supplemental Community 
Development Block Grant, which the State of Texas received 
under the first appropriation supplemental appropriation, about 
$75 million, and the second supplemental appropriation which 
the State received, roughly about $423 million. That money is 
the money that Mr. Gerber's agency is working with for the 
homeowners' rehabilitation program.
    The trailers, the disaster housing assistance demonstration 
program is a separate program. That is a demonstration program 
in which FEMA came to HUD and said, HUD, you have an 
infrastructure of public housing authorities and partners in 
the private sector that can provide, identify----
    Ms. Jackson Lee. If I may, Mr. Bregon, you have people in 
trailers in southeast Texas with Federal funds. The question 
is--let me finish. The question is, the question is, where is 
HUD's oversight for the utilization of those funds? My 
understanding is that there are people in southeast Texas who 
are victims of Hurricane Rita. They are in FEMA trailers. FEMA 
transitioned to HUD because of Congress, wanted to quickly get 
someone who understood housing. The simple question I ask you 
is, why are people still in trailers as of 2008?
    Mr. Bregon. Yes, madam. The agreement we have with FEMA is 
that it is FEMA's responsibilities to get those families and 
individuals out of the trailers and then HUD takes over. So HUD 
is not in the business of relocating or finding people homes or 
units that are living in trailers. That is FEMA's 
responsibility.
    Ms. Jackson Lee. Didn't you give money to the State of 
Texas to be able to help these people's houses be 
rehabilitated? Then why are they still in the trailers in 2008? 
Did you have oversight over Texas and the Governor of the State 
of Texas, Governor Perry, to ask why the moneys have not been 
expended?
    Mr. Bregon. Yes, ma'am.
    Ms. Jackson Lee. What was Governor Perry's answer?
    Mr. Bregon. We have decided to run a rehabilitation program 
that takes a little longer than the compensation program 
question.
    Ms. Jackson Lee. That is the question. Should you have 
concerns that we now have individuals in trailers in 2008 and 
there is no movement? I don't know whether or not it is a 
staffing issue but no movement on the basis of a crisis that 
the State, that the Federal Government perceived. We perceived 
a crisis, we said, how do we make it work? FEMA and HUD got 
together and you relied on the State, which obviously is not 
concerned about the urgency of now. The Governor of the State 
of Texas, the Governor of the State of Mississippi is using his 
for infrastructure work and parties and whatever else can go 
on. But the question is, what is happening to the people who 
are still in trailers?
    Mr. Bregon. Now the State of Texas has moved forward with 
the first of the--of the $75 million they would show that they 
have dispersible $13 million, not the $1 million that I heard 
before. On the second supplement, my understanding is that 
there are a lot of cases in the pipeline that they will be 
processing shortly. Perhaps Mr. Gerber can give you a better 
update as to where they are. But, Madam, you are correct, there 
are still people residing in trailers that should not be 
residing in trailers. HUD's mission is to work with the State 
to make sure that homeowners or renters that are living in 
trailers will move to safe, sanitary, decent homes. We are 
working with the State on that. As it relates to the DHAP and 
FEMA, we need FEMA to work with us and get those folks out of 
trailers, and then we will find units that are safe, decent and 
sanitary under the HUD programs to ascertain that we are not 
moving these people from a trailer and putting them in a 
housing condition that perhaps could be worse than a trailer.
    So we are doing our due diligence and making sure that the 
landlords that participate with our DHAP programs have units 
that are decent, safe and sanitary.
    Ms. Jackson Lee. I thank the Chairman.
    Chairman Thompson. Thank you very much. Madam gentlelady, 
we will follow up with some more questions that have been 
raised along this issue.
    Ms. Jackson Lee. I will be back for that.
    Chairman Thompson. The gentleman from North Carolina, Mr. 
Etheridge.
    Mr. Etheridge. Thank you, Mr. Chairman, for holding this 
question. Let me just ask each of you just a yes or no because 
I think some of us represent areas that produce prefabs, 
modular homes. You are talking about travel trailers, correct?
    Mr. Castillo. Yes, sir.
    Dr. Falk. Yes.
    Mr. Etheridge. Travel trailers?
    Mr. Bregon. Yes.
    Mr. Etheridge. I want to make sure that is a part of the 
record because I think we sort of use that interchangeably and 
I think it is unfair to an industry if you don't get that on 
the record. Mr. Chairman, I think that is important.
    Mr. Castillo, let me ask you a question. North Carolina, a 
State that I happen to represent, is sort of known as a State 
that has for years been in the bulls-eye of major disasters 
from hurricanes. Unfortunately, with the drought for the last 
several years, some of the folks are making the analogy, we 
would like to have one just to get the water. That is not the 
point I want to make today. My point is this, should one strike 
our State, I am certain that our State responders, our local 
responders, they are ready to respond. They have practiced, 
they are ready, they have done a good job. They have done a lot 
of practice unfortunately. But based on the challenges 
following Hurricane Katrina and others and what I am hearing 
today, I am not totally convinced that FEMA is ready. My 
question to you is, is this whole issue of a major hit puts 
tremendous pressure on housing. You now have entered into an 
alternative housing pilot program. Can you share with this 
committee and with me what you are learning from this, what 
solutions have you found? Where will you be able to apply those 
should a major disaster hit? Is that now prepared? What have 
you learned?
    Please, quickly, so I can get to other questions.
    Mr. Castillo. Yes. I appreciate your comment on 
representing a State that is in the bulls-eye because I come 
from Florida and it perhaps gets hit as much as North Carolina 
if not more. Two things: No. 1, the alternative housing pilot 
program that I talked about earlier in my opening statement, 
the four States that have competed for and received funds that 
are building units that will hopefully be used in the future to 
replace travel trailers.
    Mr. Etheridge. Yeah. What have you learned?
    Mr. Castillo. Well, that is in the process.
    Mr. Etheridge. When will it be ready?
    Mr. Castillo. They are being evaluated over the next few 
months. We have also got the Joint Housing Solutions Group that 
is looking at a lot of other options as well.
    Mr. Etheridge. I am sorry, but I don't have a lot of time. 
What is the time line?
    Mr. Castillo. Joint Housing Solutions, probably within the 
next few months we will move to the next step of going----
    Mr. Etheridge. When will it be ready?
    Mr. Castillo. Sir, it is impossible. I don't know the 
answer to that.
    Mr. Etheridge. Can we get that information?
    Mr. Castillo. Yes, I will get that.
    Mr. Etheridge. Thank you. I don't mean to cut you off but I 
want to get some other questions in. Let me follow up with one 
additional question. In July 2006, FEMA produced a job hazard 
analysis that one, one, FEMA employees are the potential 
injuries associated with travel trailers. The analysis said, 
cancer was a concern and required FEMA employees to undergo 
formaldehyde awareness training. If FEMA knew that there was 
health risks associated with the use of travel trailers, why 
were they deployed? Why were the vulnerable displaced disaster 
victims not warned of the risk during 2006? What efforts did 
FEMA undertake to protect the health of travel trailer 
occupants? I mean that was 2 years ago now.
    Mr. Castillo. Sir, I am not familiar with the analysis that 
you mentioned. But when we became aware that it was a problem 
was when--I believe in May 2007, when there was the trend 
reported by the pediatrician that I spoke of earlier. The next 
day we employed the Office of Health Affairs of the DHS.
    Mr. Etheridge. I don't mean to cut you off because I want 
to get one more question. I am running out of time. Let me ask 
you to do this, go back and look at the record and if you would 
submit that in writing, I would be grateful for the 2006 
material and submit that in writing. That would be great.
    Chairman Thompson. If the gentleman would yield. We had 
asked for a time line similar to what you are asking that would 
reflect that information also for the committee.
    Mr. Etheridge. Thank you, Mr. Chairman. Dr. Falk, as you 
mentioned, the CDC has identified health risks associated with 
travel trailers. Do you believe the travel trailer occupants 
have a right to know about any and all potential health 
concerns? No. 2, do you think you should inform the occupants? 
We have talked about that already today. It bothers me as 
others have--and I think it is a concern because we are really 
talking about children and others in it. What would you like to 
say to them today? I would like to give you an opportunity just 
in the next minute, what would you like to say to them about 
where we are and what we are going to move to do to try to 
mitigate this problem?
    Dr. Falk. We have a very active program currently to 
provide information to occupants of trailers. One of the things 
that I have said on a number of occasions is that the issue of 
children is very important. Even though the formaldehyde level, 
a single formaldehyde level is helpful in understanding the 
risk, there are other issues that are much more--that can be 
much more important, such as whether children are in the 
trailers, elderly are in the trailers, people with chronic 
diseases are in the trailers, people with asthma, that one 
really has to pay attention to the need for alternative housing 
when there are high-risk or vulnerable individuals in the 
trailer. So we actually highlight that in the information we 
provide.
    Mr. Etheridge. Mr. Chairman, thank you. Let me just take 30 
seconds. I know you have indulged me so far. We had a 
substantial flood in North Carolina in 1999. FEMA came in. We 
had travel trailers. I really hope we can get the information 
because some of these people may have been affected. But to the 
credit of FEMA at that time, they moved from mitigation and we 
really helped people move into permanent housing. I recognize 
it was not at the level nor was the magnitude of it as big as 
Katrina and Rita. But the Rocky Mountain Project is a model for 
the country now. We really ought to look at some of the models 
that have been successful where we did move some people out. I 
don't know how long some were in the trailers or whether or not 
there was any lasting effect. I would hope we would go back and 
look at those if we have had people exposed for a long period 
of time because I think it would be appropriate.
    Mr. Souder. I have a parliamentary inquiry.
    Chairman Thompson. Sure. The gentleman from Indiana.
    Mr. Souder. I agree with Mr. Etheridge's question of why 
would FEMA employees be treated differently than the poor. I 
would like to supplement his question with, on what grounds did 
FEMA make that memorandum to their employees? Were there any 
facts?
    Chairman Thompson. Whether or not it has been circulated at 
all.
    Mr. Souder. One would be yes. If they circulated it, 
whether they had it with the FEMA families, why would they give 
it to them and not to the poor? But on the other hand, what 
made them make the decision in the first place? Because part of 
my question is, is did they have any facts when they 
distributed the FEMA employees? Certainly we shouldn't have a 
double standard.
    Chairman Thompson. Sure. Are you aware of the gentleman 
from North Carolina's reference to the standard for FEMA 
employees?
    Mr. Castillo. No, sir. As I mentioned, I am not aware of 
the memo that mentions the analysis of Mr. Etheridge.
    Chairman Thompson. We will have staff provide you with the 
referenced memo for your response.
    Mr. Castillo. Yes, sir.
    Chairman Thompson. I would also like to say that part of 
this hearing was due to a CNN story that ran on Texas and that 
Ms. Helen Sanders, Mr. Gerber, who I know you are intricately 
familiar with, and my understanding is, you will be--someone 
from your shop will be interviewing Ms. Sanders tomorrow?
    Mr. Gerber. Mr. Chairman, we have met many times with Ms. 
Sanders. She is someone who lives in a very small community of 
Sabine Pass, which is really out on kind of a barrier island 
but it sort of juts out of the Gulf of Mexico. It is where the 
storm came in. That town had waves of 10, 12 feet in that 
community. As a second pot of money, there are funds that are 
devoted exclusive to the redevelopment and repair of homes in 
Sabine Pass. Ms. Sanders is one of those families. She is 
living in a trailer and certainly there are a lot of other 
folks at Sabine Pass that we are concerned about as well.
    The challenge of that part of Texas is that you are going 
to have to go and elevate those homes 14 feet. There are many 
seniors who live there as well who have chosen it as a 
retirement community. There are many who have lived there for 
many years and have accessibility issues. So there are 
additional funds that are available to build accessibility 
features for those homes as well. I think--and the reason those 
funds were devoted to Sabine Pass is--and I am sorry Ms. 
Jackson Lee is not here to hear this--is that we worked very 
closely with the locals to identify how those dollars should be 
used. I think the Governor showed tremendous leadership by 
working with local elected leaders to ask them, how do you see 
the use of these funds having the greatest amount of impact? 
What they told us over and over again was they wanted us to get 
a start, understanding that there wasn't going to be sufficient 
funds in order to do the kind of rehabilitation and repair that 
is being done in all of the other different States.
    Chairman Thompson. But I am sure you can understand the 
patience of individuals who have been told help is on the way 
and being put off and put off. Part of what we are trying to do 
is establish some parameters so that citizens of this country 
who we have to help can have some general understanding as to 
when and how the help will come. I guess part of the question 
for me would be, has HUD established or FEMA established a 
reasonable time table by which they would like to move people 
from temporary housing to more permanent housing? Has there 
been some memo of understanding or agreement executed between 
the parties to that effect?
    Mr. Castillo. Sir, on FEMA's point, we have a date of May 
2008 to move everybody out in the Gulf Coast. Knowing that we 
are moving 1,000 families, 1,000 households a week, and that is 
our goal, that the Administrator wants to have people out of 
travel trailers and mobile homes prior to the hurricane season.
    Chairman Thompson. So that is just for this specific 
instance. But is there any policy that you try--framework that 
you try to operate from relative to--from transitional housing 
to permanent?
    Mr. Castillo. Well, we try to make that as short as 
possible. Putting Katrina aside for--Katrina, Rita aside for 
just a second, in the past maybe 2 or 3 months was the average 
that people would stay in a travel trailer or mobile home. You 
know, this has been a different story obviously because of the 
magnitude and scope of this disaster, especially Katrina. So 
our point--travel trailers and even mobile homes, manufactured 
housing is a last resort.
    Chairman Thompson. See, I would accept that if I could see 
the 200 percent effort being put forward to address many of the 
individuals who are still in temporary housing. My State, for 
instance, decided that $600 million of this housing money ought 
to go to a port facility rather than to the neediest of the 
people. So it tells me that 2\1/2\ years after Katrina here, we 
gave too much money to start with or the standard by which we 
have used to get people in housing is so high that we are just 
not doing our job. You have to be there to see the people who 
are still anxiously awaiting housing and it has not taken 
place. So I am trying to get a picture of a 2\1/2\-year lapse 
of time, Congress being more than generous in giving money yet 
help is not on the way. In the middle of this help, States 
decide to do other things with the money. That, for me, from a 
HUD perspective, to approve it when I can take you to 
Mississippi and show you a number of families who are still 
needy, who because of this diversion have to wait longer but 
yet still we approve it. I am real concerned about that because 
our resilience as a Nation is based on our ability to help our 
citizens. For this 2\1/2\-year period we have not done so. I 
think that is part of the reason that we are holding this 
hearing.
    Mr. Tipson, can you tell me whether or not the housing 
needs associated with this hurricane have been met 
satisfactorily or if there are still outstanding issues?
    Mr. Tipson. The housing issues in Mississippi absolutely 
have not been met. The $600 million diversion of funds from a 
housing program to an economic development project for the Port 
of Gulfport was inappropriate. It is not the position of the 
Lawyers Committee that HUD had no discretion to approve that 
plan. In fact, 50 percent of the CDBG funds were supposed to 
benefit low and moderate income people unless the State could 
show compelling need. To my knowledge, that need was never 
demonstrated by anyone in Mississippi and never evaluated by 
HUD.
    So I think that your concerns are absolutely justified. 
There certainly is a great need for the construction of more 
affordable housing, and many of the people who are in travel 
trailers today are not able to move into rental units because 
there simply is no affordable housing. There is nowhere for 
them to go.
    Chairman Thompson. Mr. Bregon, could you share with us 
HUD's justification for approving this?
    Mr. Bregon. Absolutely. Absolutely. First of all, the State 
of Mississippi received in its first supplemental appropriation 
about $5 billion. The second supplemental appropriation, they 
received roughly about $423 million. The State originally 
budgeted $3 billion for housing. The State came to the 
Department of Housing and Urban Development and submitted an 
amendment to the original plan, requesting that $600 million be 
reprogrammed from housing activities for an economic 
development project in the port. HUD looked at it. The original 
supplemental appropriation told HUD's Secretary that he could 
waive the 70 percent low-mod requirement, which is the CDBG 
requirement, down to 50 percent if the States asked. The five 
Gulf States asked that the 70 percent be waived down to 50 
percent, which is what the statute allowed. Furthermore, the 
law reads that if there is compelling need, the Secretary may 
reduce--or originally shall reduce less than 50 percent. 
Mississippi has never been given the authority to do less than 
50 percent as an economic development activity.
    Chairman Thompson. I understand. We have some other 
Members. But I think the point that I am trying to make is 
whether or not the unmet housing needs of Mississippi have been 
met with this HUD money or have rediverted moneys intended for 
housing to address that unmet need to another function.
    Mr. Bregon. According to the State, Mr. Chairman, the $3 
billion they budgeted was an overestimate and that they could 
do--meet all the housing needs in Mississippi with $600 million 
less. So the State has made that determination.
    Chairman Thompson. I understand. But now has HUD made a 
determination as to whether or not the State is correct?
    Mr. Bregon. HUD has told the State that we are very 
concerned with the provision of affordable and decent housing 
in the State of Mississippi. As a result, the Secretary met 
with Governor Barbour and there was an agreement that they 
would put in $100 million more into affordable housing than 
there was before the work force housing.
    Chairman Thompson. One hundred million dollars of State 
money or Federal money?
    Mr. Bregon. No, Federal money, sir.
    Chairman Thompson. So you are just shifting money around?
    Mr. Bregon. No. What the State was saying was, we can do 
what we need to do as it relates to housing for $600 million 
less. So the Secretary said, we are not too sure about that.
    Mr. Bregon. The State has certified to us that the moneys 
that have been budgeted but not expended, sir, so there is a 
difference between the State budgeting money or obligating 
money and expending money. So the State is spending money but 
perhaps not to the grade that we would all like to see in order 
to----
    Chairman Thompson. So you agree that housing needs at 
present have not been met----
    Mr. Bregon. Mr. Chairman, the Department of Housing and 
Urban Development is very concerned about the progress not only 
in Texas and Mississippi but Louisiana as well. We are very 
concerned, and we are working with the States. We are giving 
them all the technical assistance necessary. We are 
ascertaining that the moneys are being used properly and 
efficiently. Yes, we are very----
    Chairman Thompson. You are comfortable diverting housing 
funds, moneys intended for housing efforts to be diverted to 
other instances?
    Mr. Bregon. I would not use the word ``comfortable'', Mr. 
Chairman. No, we are not comfortable. We are not comfortable 
with the State reprogramming $600 million from housing to the 
port. We are not comfortable with it.
    It is an eligible activity. The State has told us that they 
can meet their housing needs with it because they overbudgeted 
the housing budget. We are telling them that we are not going 
to give them a waiver of the 50 percent low/moderate benefit on 
economic development.
    So we are holding the State accountable and responsible for 
our ascertaining that 50 percent or more of those jobs created 
in the port will go to low/moderate income residents. So there 
is a misconception here that we have waived a low/moderate 
benefit in economic development. We have not, sir.
    Chairman Thomson. Well, Mr. Tipson has just indicated that 
there are significant housing issues left to be resolved in the 
Gulf Coast region; and what I am trying to get is whether or 
not we are creating a bigger problem by diverting moneys 
originally intended for housing for those residents of the Gulf 
Coast for another purpose.
    Mr. Bregon. Well, it was the State that determined that 
what they needed was $3 billion. It wasn't HUD. So we were 
never in a position to say to the State we think that your 
housing needs are $3 billion. The State made that assessment 
themselves. We said, fine, if what you want is $3 billion out 
of the $5 plus billion that you have for housing, we agree with 
that.
    Now, the State came back to us, and they asked to reprogram 
$600 million because their housing need is not as great. But it 
is not--the money is there. They just haven't spent it. So what 
we need is for the State of Mississippi to start spending the 
$2.5 billion.
    Chairman Thompson. So your testimony is that my State has 
$2.5 billion, 2\1/2\ years after Katrina, for housing that is 
not spent.
    Mr. Bregon. That is correct, sir.
    Chairman Thompson. Have we cited them for that inaction?
    Mr. Bregon. We don't have the time limits requirement under 
the supplemental appropriation like we do in the regular CDBG 
program. What we tell communities, if you don't spend your 
money in a timely fashion, we will take the money away, we 
don't have that under this new supplemental.
    Chairman Thompson. If I have $2.5 billion sitting in the 
bank and we have people living in formaldehyde-laced temporary 
housing facilities that could go to permanent housing 
facilities, that is an embarrassment on everyone.
    Mr. Bregon. We show the State has disbursed--of the $5 
billion from the first supplemental, they have disbursed about 
$1.9 billion; and the majority of that money going to housing.
    Mr. Souder. I know other Members are waiting, but I do want 
to say that formaldehyde-laced was a tad strong. Formaldehyde 
is in all manufactured housing. Formaldehyde is in our body. 
What we are trying to determine is what level.
    I think we all agree that we need supplemental guidelines 
and timelines. My lands, how can it be sitting there? That 
earns cash for the State. That these people were never intended 
to be in these travel trailers. Regardless of whether I think 
they are going to get cancer from them or not, that wasn't the 
intent of the program.
    I agree with your general consent. My general concern is, 
in fact, many people live in mobile homes, many people use 
travel trailers and camp in them for a long period of time. 
Yes, we have evidence that people are sneezing and reacting in 
certain ways, but that is what we are studying, and you are 
going to panic people. I was just concerned about the language.
    Chairman Thompson. The gentleman is concerned, but we are 
hearing Dr. Falk's testimony that raises significant flags 
about long-term stays in travel trailers. I am talking about 
long-term stays, in this instance, somewhere over 2 years for 
people who should have been transitioned into other housing.
    When I hear my home State of Mississippi and other Members 
of this committee's home State of Texas, who have, 2 years 
after money has been graciously granted by Congress, still has 
the money sitting in the Treasury, and that is totally 
unacceptable.
    Mr. Souder. Mr. Chairman, one other comment. I know that 
this is kind of loose, and I apologize to other members, but 
that there, in fact, are different kinds of trailers in New 
Orleans and elsewhere, and some are small and some are larger. 
I am not defending--if you have a home, the purpose of the U.S. 
Congress is to get you back in a home. But we are comparing to 
some degree some that are short term with some that actually 
people live in year round all over the country, and it isn't 
necessarily uniform here what is going on in these regions.
    Chairman Thompson. I agree. But, again, I don't want our 
Government putting people into housing that has questionable 
health outcomes if we know that there are some questionable 
health outcome.
    Gentlelady from New York for 5 minutes.
    Ms. Clarke. Thank you very much, Mr. Chair.
    I just wanted to get a feedback from, in particular, our 
panelists, Mr. Castillo, Dr. Falk and Mr. Bregon. In sitting 
here, I didn't get a sense of urgency coming from your 
agencies. I've heard a lot of explanations or justifications 
for things that just seem that are bureaucratic inefficiencies. 
If in fact your agencies are actually collaborating with each 
other around this huge, huge issue, where is the genius that 
comes out of the fact that there are certain X factors that you 
know already and that someone needs to be held accountable for 
moving these people out? Who takes charge of a situation like 
that?
    I mean, how conceivable is it that we can compound a 
natural disaster with a humanitarian disaster and a health 
crisis? Has anyone looked at it from that perspective?
    Because, if that is the case, 2\1/2\ years in these very 
specific trailers that had this specific health effect should 
raise a flag that created a sense of urgency that has looked at 
other alternatives for housing for these people. Maybe it is 
not the current program that you have, but maybe it is now we 
have to look at what other resources we have around this Nation 
to prevent a humanitarian crisis from occurring. Because the 
setup is not in the current constructs that we have in place. 
That is really what concerns me. So I want to raise a couple of 
questions.
    Mr. Castillo, I understand that FEMA is providing 
caseworkers to residents who reside in the housing parks that 
are scheduled to be closed in order to help them find 
alternative long-term housing. Have you been able to evaluate 
this program's effectiveness and level of success?
    And I want to piggyback on what my colleague, Mr. Green, 
had raised about the issue of health status. Because if you 
already have caseworkers going out, why wouldn't we attach that 
health component that looks at the health status and treatment 
of the children?
    Mr. Castillo. You know you bring up some good points, 
Congresswoman.
    First, I have to say there is an urgency of our agency to 
get folks back on their feet, to get folks back into more 
permanent, safe, secure housing; and we have been working with 
our partners at CDC and HUD and the DHAP.
    This is somebody that is new. The amount of people that 
were left homeless overnight, basically, after Hurricanes 
Katrina and Rita had never been dealt with before.
    We are dealing also with the issue----
    Ms. Clarke. With all due respect--hold that thought--Mr. 
Castillo, it has been 2\1/2\ years. At some point, someone has 
to be saying, after 6 months, this is not moving; after a year, 
this is not moving. Let's start with a plan B and a plan C 
while we proceed down this road.
    I know that we are quite skilled. We have the expertise and 
the talent to multitask in this Nation. This should be the case 
when we are dealing with human beings. We should always be 
looking at, okay, perhaps this goes wrong; let's look at this.
    Why isn't someone saying, there are other areas of the 
country--perhaps they don't want to go there now, but it is 
better than them getting sick and us potentially having the 
liability of cancerous growths, of abnormalities in children 
because we are waiting for all these other logistics to fall 
into place.
    We understand you guys are working. But, obviously, 2\1/2\ 
years later, you have this health crisis looming. Why not do 
something different in the interim?
    Mr. Castillo. I believe we have, ma'am, and done different 
things and definitely done things that had never been done. 
Part of the problem--if we put ourselves in the place of a 
victim who is affected, who perhaps has--their home was 
destroyed or partially destroyed, wants to rebuild their 
property and has a travel trailer on their property. Now, the 
option is--and we have offered to relocate them anywhere in the 
United States, and they have refused. They want to stay where 
their community is, where their property is, so they can 
supervise the reconstruction. They can stay where their kids 
are comfortable, where their family is. That is part of what we 
are dealing with.
    So we are working to increase the available housing market. 
But, within our areas, I think we have thought of plan A, B, C 
and D and done that; and, knowing that, it is difficult for 
people because they don't want to leave.
    Ms. Clarke. Even when their health and their children's 
health may be compromised, you are saying they are sitting 
there? Because if that is the case then there is truly nothing 
we can do.
    But if all of these people have been made aware that their 
health could be compromised as a result of this and that this 
is our recommendation and they say, okay, thanks but no thanks. 
We will sit here. We will continue to inhale the formaldehyde 
that is causing us to be ill. That is one thing. I don't know 
how much we have made the case to these folks about their 
situation.
    Mr. Chairman, just a response about the caseworkers and 
whether they will be able to get us some valuable information 
or urge parents to get treatment for their children.
    Mr. Castillo. Yes, they can; and part of this, especially 
the approach through HUD, is that includes the DHAP program. 
That includes case management, is looking at not just moving a 
family from a travel trailer into a apartment or an apartment 
into a DHAP program, is looking at ways that they can, 
especially for work, jobs that can be found, and addressing 
needs that come up when they go out there and do the case 
management and get to know the families.
    Ms. Jackson Lee [presiding]. The gentlelady's time has 
expired. I thank the gentlelady.
    Just for record information, DHAP is the Disaster Housing 
Assistance Program, which is the bifurcated program that you 
were talking about.
    Thank you for your patience. The gentlelady from the Virgin 
Islands is recognized, Mrs. Christensen, 5 minutes.
    Mrs. Christensen. Thank you, Madam Chairwoman.
    Representing a district that has hurricanes where my 
residents have been in trailers for maybe as many as 10 years, 
I am very concerned about this whole--the whole issue that is 
before us this afternoon.
    I wanted to ask Mr. Bregon about the DHAP program, because 
you are very careful to make the distinction between the CDBG 
and this program. But as I read Mr. Tipson's testimony, he says 
that, from the beginning, that that transition from FEMA to 
DHAP has been troubled. There are people who successfully 
entered, but HUD failed to make payments of rent on time, and 
they are being forced to vacate. A case included where a woman 
who was renting, her landlord decided not to participate, and 
she is not receiving the kind of help she needs to be able to 
continue.
    Can you help us to understand what you are doing to 
improve? I would like to get another question in, so give me a 
minute answer.
    Mr. Bregon. Yes, ma'am.
    With the DHAP program, we inherited a program from FEMA and 
what we are saying to the landlords is we are the housing 
agency of the U.S.--of the U.S. Government. We must ascertain 
that the people that are being moved under this program are 
being moved to safe, decent and sanitary homes. So we are 
coming to some landlords inspecting the units. If these units 
are not safe----
    Mrs. Christensen. No, I am talking about your failure to 
pay rent on time that is causing people to----
    Mr. Bregon. We aren't paying rent to anyone. We had issues 
where the landlord was getting three, four checks from FEMA; 
and we are cleaning our books to make sure that we are not 
overpaying landlords. There were letters being sent out and 
coming back to HUD with ``return to sender, address unknown.'' 
So there were checks going to landlords that did not exist----
    Mrs. Christensen. What do you do when a person is being 
vacated on that basis? What does HUD do for that individual?
    Mr. Bregon. We work with that family to find--we have a 
national housing locator. We are working with over 2,400 public 
housing authorities in the country; and we are finding them 
safe, decent and sanitary homes. So it is not just that 
individual or this family is being thrown out into the street. 
What we are saying to the landlord is, your unit does not meet 
the minimum housing quality standards, so we are not going to 
send you a check from the Federal Government to house a family 
in a house that is infested with rodents or something like 
that. So we are finding places for these families in other 
decent, safe and sanitary units, madam.
    Mrs. Christensen. I am going to ask Mr. Tipson to comment 
on my question, but I want to get my other question out, and 
then it can be answered.
    My next question is to Dr. Falk, because there been a 
number of questions raised about CDC's response and slowness of 
response, the broadness of the response, and I am wondering 
about the ability of CDC to respond. Because I remember when 
there was an Office of Environmental Health and somehow it got 
disbanded. I understand now it is under the Office of Global 
Health. I am concerned that maybe CDC is not--in a time when 
issues of what is in our air and what is in our water are 
critical, that CDC does not have the proper office and kind of 
attention and staffing to really address these issues.
    So Mr. Tipson and then Dr. Falk, please.
    Mr. Tipson. With regard to DHAP, we certainly have seen 
that rent checks have been late. In fact, the notice that I 
included with my written testimony indicates that the property 
manager did not receive her January rent. So that is a problem. 
It is not just the inspection requirement. There are a number 
of issues; and, as Mr. Bregon indicated, many of them 
originated with FEMA with poor data.
    Mrs. Christensen. Dr. Falk.
    Dr. Falk. Yes. I think, as always, a very important issue 
in terms of the quality of experienced manpower and the ability 
to respond. There are funds that are at CDC now in terms of 
preparedness and emergency response. They actually help support 
a number of the emergency response activities, so that 
supplements the other parts of the budget. So that is----
    Mrs. Christensen. But it is under the Global Health, and I 
don't know how much funding CDC provides for Global Health, but 
it used to be just a small amount. So why is our environmental 
health office that is responsible for the United States 
environmental health under Global Health? That seems, it says 
to me, that it is not being given the kind of focus that is 
needed.
    Dr. Falk. I think in terms of--it is not my specific area 
at CDC, but the global health programs at CDC have increased, 
particularly increased issues surrounding HIV/AIDS, polio, 
malaria, you know, largely infectious disease----
    Mrs. Christensen. That has some nexus to environmental 
sometimes, but still----
    Dr. Falk. I think the environmental health portion of the 
global program is properly very small, a very small percentage 
of the total.
    Mrs. Christensen. Is there another office of environmental 
health outside global?
    Dr. Falk. There is what is called the National Center for 
Environmental Health, which is separate from Global Health, and 
that is the group that is responding currently. As I said, it 
does get support from--in this instance, we are getting support 
from FEMA to conduct these studies, but we also get support in 
that program in terrorist preparedness----
    Mrs. Christensen. Are you the director of that?
    Dr. Falk. I oversee that. The director of that office is 
Dr. Frumkin.
    Mrs. Christensen. Thank you, Madam Chairwoman.
    Ms. Jackson Lee. The gentlelady's time has expired.
    We have the opportunity to have a second round, and I yield 
myself 5 minutes.
    I think it is important to note that there is a sense of 
agreement around the table with Members. Because we do 
understand that in a disaster you have to move quickly and find 
the facilities that are available. That happens to be trailers.
    I still think we need further testing to answer the 
question of Mr. Souder, who has pointed out that we live with 
formaldehyde. I believe the Chairman of this committee is 
concerned as to how the toxicity has increased in light of the 
living conditions of people who are disaster victims for 
Hurricane Katrina and Rita, whether or not where they are 
placed, whether or not what they are doing inside the trailer 
may exacerbate.
    So our point is--the overriding point of this hearing is 
that we have unexpended dollars by States that were given these 
dollars in an emergency condition so that people in emergencies 
or in disaster could be given relief. So I would like to put on 
the record that I think we have a combination of people who are 
to be held accountable, and this seems to beg for legislation, 
either deadlines or time indicators of when you need to finish 
the work on a disaster. Meaning how you are supposed to help 
people who are in a disaster--3 years, Mr. Castillo, seems to 
be a little bit outrageous.
    Even as daunting as Hurricane Katrina and Rita were, we 
know the pitfalls that we saw in the first response. We are 
still living with that disaster, the conditions of New Orleans, 
people displaced. We understand that there are 5,000 people 
that cannot be found. I, frankly, believe there should be an 
effort to find them.
    But I would to, just like for the record, acknowledge that 
the Office of General Counsel may be at fault for short-cutting 
CDC's research. CDC, when Dr. De Rosa came up with this 
question about the circumstance of the formaldehyde, no 
response to his efforts; HUD and DHAP not looking closely in 
its housing dollars, at how these moneys were being utilized.
    Mr. Bregon, even though you are right, Congress wanted to 
give latitude because we were in a crisis. They told you to 
waive everything but civil rights, Davis-Bacon, environment and 
fair housing; and they are right. We thank you for conceding in 
essence because it was an emergency, but look where we are now.
    I would like to give Mr. Gerber an opportunity to answer 
the question, because we do have a 2007 audit that says that 
the State of Texas has only spent $1.1 million. He is not 
alone. I think Mississippi has a record of failure as it 
relates to not spending the dollars. You said $1.9 billion, but 
it is 3 years later. Louisiana, I don't have their numbers, but 
I understand there may be some challenges there.
    This is not a hearing to indict individual persons or 
States. This is a hearing as much for Congress to understand. 
Where did we fail? Where is the collapse? Where is the, if you 
will, the Achilles heel that caused us to be in this plight 
today?
    Again, I will put on the record that the Governor of the 
State of Texas was invited. He should have been here. Frankly, 
I believe the Governor of Mississippi should have been here. 
Because it is the Governors who called us, raising their 
voices, as they should, on behalf of their constituents in 
their States who were impacted in a dastardly way by this 
disaster that was unspeakable, that we had not experienced 
before where whole areas were wiped away. So we now have a 
situation where we have people still living in these 
conditions.
    What is your answer to this first question? Then you can 
explain why Texas is in the plight that it is in. I understand 
that you will be meeting with your board to be voting on 
spending caps to rebuild homes in southeastern Texas. I further 
understand that the local Southeastern Council of Government, 
the COGS, are opposed to these caps. First, we don't have 
people in homes, and then we are talking about not providing 
them homes.
    The other point I want to make, and I would like Mr. 
Castillo to speak to that, I want to congratulate FEMA. Because 
I think you initiated a best practices for disaster housing. 
You gave some grants out to a number of States so that people 
would not have to be in trailers.
    My understanding is there was a grant given in Texas, and I 
know we worked on this. But, again, you might want to respond 
as to what the States are doing with the disaster grants given 
them to design best practices. Because maybe we have a problem 
there, Mr. Castillo. We have given moneys out for best 
practices, and there has been no productivity.
    Congress wants to help. Congress wants to help the families 
that were shown in the CNN expose walking the streets of a 
community where they are suffering in a trailer, can't get any 
relief.
    Mr. Gerber.
    Mr. Gerber. Congresswoman Jackson Lee, there is a lot in 
that question. I think there is a couple of things that are 
important to remember. Texas didn't get that first supplemental 
until 9 months after--well, a little less than that--8 months 
after the storm hit.
    Ms. Jackson Lee. What date was that, sir?
    Mr. Gerber. Storm hit September, 2005; and it was May 2006 
that we were able to draw down on that first allotment of $74.5 
million.
    Ms. Jackson Lee. In a couple months it will be 2 years.
    Mr. Gerber. Keep in mind the other 80 percent of the money 
that came to the State of Texas--until just 10 months ago, that 
first pot of money, looking at 10 months, 8 months from the 
time the storm hit, there was also 50 inches of rain that hit 
the southeast coast. We weren't talking any longer about 
emergency repair. We were then talking about a full-scale 
reconstruction of most of the houses down there.
    What became clear as we worked through these additional 
issues, we were trying to spread the money as broadly as we 
could. Because, again, working with locals and faith-based 
organizations and elected leaders down there, the goal was to 
try and spread those very limited funds as far as you can get 
it.
    Ms. Jackson Lee. Mr. Gerber, do you have empathy, sympathy 
for people living in trailers now going on 3 years, maybe even 
be 4 years?
    Mr. Gerber. I go down to southeast Texas several times----
    Ms. Jackson Lee. So you see their plight.
    Mr. Gerber. Yes, ma'am.
    Ms. Jackson Lee. This is the problem that I have. We gave a 
legislative fix that was broad--and I know Mr. Bregon. He is a 
stickler for details and accountability; and I am sure that, 
short of his humanitarian heart, he was not happy with some of 
the flexibility that was given. But they conceded to it. They 
did it so that we could respond to the urgency of the need. 
What you are saying is weather compounded it.
    But here is my question. Why didn't the Government go back 
to the drawing board and say, it is now 2 years; it is now 2 
years and 3 months; 2 years, 4 months. Let's get a different 
plan. Let's go back to direct compensation.
    That means that Mrs. Jones in the trailer would have the 
ability to go to her slab and do whatever she could with that 
amount of money because of the urgency. Why are you 
micromanaging disaster so that people are living in a disaster 
because of your inaction?
    Mr. Gerber. Ms. Jackson Lee, with all due respect, the 
folks we are dealing with really in many cases they are the 
poorest of the poor. It is requiring intensive casework that 
has required a tag-teaming effort of the State with locals and 
faith-based organizations just to reach, you know, these 
literally thousands and thousands of people who are in an area 
that is the size of----
    Ms. Jackson Lee. But what about the ones that are living in 
trailers? They are conspicuously living in trailers. You could 
get them. They are still in trailers.
    Mr. Gerber. They get priority. But the fact is we have to 
work through a very difficult maze of rules. You have 24 
different laws and sets of regulations that we have checklists 
on that you have to go through. Because if you don't go through 
the checklists, HUD doesn't want to draw down those funds.
    Ms. Jackson Lee. Let me quickly--since this is supposed to 
be problem solving, if you want to finish your sentence.
    Mr. Gerber. It is important to note that, as we have worked 
through the program, I think we really have turned the corner 
on----
    Ms. Jackson Lee. What about the spending caps? You go into 
the board to do a spending cap?
    Mr. Gerber. We knew that $40,000 was too little because of 
the population we are serving. We are raising it to between 
$60,000 and $75,000 per family.
    Ms. Jackson Lee. You are raising it up or cutting it back?
    Mr. Gerber. We are raising it up. Because these folks 
cannot take on any debt. We were trying to get seed money to 
replacement of a home----
    Ms. Jackson Lee. You should be complimented for that. But 
why couldn't that have been 10 months ago, as opposed to doing 
this now?
    The question is, we gave you the latitude--not you, the 
State. Obviously, you are implementing policies of your 
leadership. We gave the Governor of Mississippi, the Governor 
of Louisiana, the Governor of Texas the latitude to respond to 
this disaster. That was our reform process in order to move 
these dollars quickly. Frankly, it failed, because people are 
still in trailers.
    Mr. Bregon, if I might, and, Mr. Gerber, did you want to 
get one last--because I need to yield.
    Mr. Gerber. I know the Texas model is a far different beast 
from what has happened in Louisiana and Mississippi. I just beg 
the indulgence of the committee to see the comparison.
    We--there has not been any--we stuck to the plan, and we 
are rebuilding. We not cutting checks to people. At the end of 
the day I think you will be proud to see what we have put on 
the ground with none of the kinds of problems, $1.4 billion in 
waste.
    What we could have done with that money in Texas, you see 
it documented from GAO and other States, is a problem for those 
other States. But we don't have a program that is going to 
result in an addition to that kind of waste and abuse.
    Ms. Jackson Lee. Let me applaud you for, again, the 
accountability and intent. But it was not the intent of this 
Congress to have 3 years of people in trailers. No matter how 
detailed and perfect your process is, you didn't respond to 
urgency. Mr. Bregon, it didn't work.
    Mr. Bregon. Madam Chairwoman and to the lady from New York, 
I don't want you to leave this hearing thinking that there is 
not a sense of urgency with the Department of Housing and Urban 
Development. We have been working with these five States 24/7.
    Ms. Jackson Lee. What is the problem then?
    Mr. Bregon. The problem is the way they designed the 
programs and the way they disbursed other moneys. But I don't 
want to give you the impression that nothing is happening and 
we are sitting here like the Maytag man waiting for the phone 
to ring.
    Of the $20 billion approximately that have been authorized, 
over $8 billion have been spent by the States. So while we hear 
all kinds of bad stories about the lady that didn't get her 
voucher in time, but we are looking at 15,000 homeowners that 
have been assisted in Mississippi. We are looking at over 
90,000 individuals in Louisiana that have gotten their moneys 
and are rebuilding their lives.
    So when we go down the line, yes, there are some bad 
stories. But, by the same token, there are many success stories 
that we also have to look at. States are very concerned----
    Ms. Jackson Lee. But it could be done better, is that not 
correct?
    Mr. Bregon. Absolutely.
    Ms. Jackson Lee. The story of the one lost lamb, we are 
looking for the one lost lamb, because that is our 
responsibility.
    Mr. Castillo, this is my last question. I think the 
legislative fix should include your responsibility to track 
your trailers. You know they were temporary housing. The fact 
that people are still in your FEMA trailers in 2008, you should 
be held responsible for an inventory for asking the question, 
why is that the case?
    Mr. Castillo. Why is----
    Ms. Jackson Lee. FEMA should be held responsible, and I 
would ask you for your input about that, at least to be able to 
give you authority to ask your neighbors, HUD, the States, 
because you have transferred--because that is what we did. We 
said, well, HUD knows about housing. But they are your 
trailers. Your name is called when it says formaldehyde. So 
there should be some oversight on FEMA to ask the question why 
are victims still in trailers 3 years out, don't you think?
    Mr. Castillo. Yes, I would agree with you, Madam Chairman.
    Ms. Jackson Lee. So we need a legislative fix or can you 
all do that?
    Mr. Castillo. We take it very seriously. They are our 
responsibilities. Folks that we are providing assistance to 
that we have in trailers are our responsibilities, and we do 
take it seriously. We are doing our best and doing a lot, I 
believe, to move them back into more permanent housing.
    Ms. Jackson Lee. I thank my colleagues for their 
indulgence.
    I yield to the gentleman from Indiana, Mr. Souder.
    Mr. Souder. Thank you, and I thank the Chairwoman for her 
carefully measured statements at the beginning. Because I think 
it is important.
    Because it is very easy to just kind of overdramatize 
formaldehyde. It is not easy to be the defender of formaldehyde 
today. But, in fact, almost all of illegal narcotics has good 
benefits inside it, and we use it in certain ways, and other 
times it doesn't. What we really need to look at is what is a 
safe level. We are not likely to be banning the substance. 
There isn't an alternative substance for dealing with this type 
of thing.
    Dr. Falk, do you know that the .4 standard, is that what is 
in question here or because that is what went out in the 
trailers? Was it higher than .4? Are we going to analyze 
conditions how it got higher? Have you looked at that question 
at all yet?
    Dr. Falk. What we are working on for when we will present 
the results to people is to be able to interpret what those 
formaldehyde levels mean in terms of the levels within their 
trailers. These are levels for air that is collected in the 
trailers, not as a standard for manufactured housing where it 
is off-gassing from the particular materials that are used in 
the trailers.
    There is no standard for formaldehyde levels in the 
trailer. What we have tried to do is present what 
interpretation would be offered for a range of levels. These 
would be in the higher range and these are in the low range.
    Mr. Souder. What I am trying to understand in that answer 
is that, in effect, if I can extrapolate--tell me if I am 
wrong--if in a manufactured home it is a .4 and they used the 
same percentages, they are working in a trailer, are you 
suggesting that--in transferring this relationship, I am trying 
to see why you would measure the air in one and not the air in 
other things.
    Dr. Falk. For most of the agencies that deal with issues of 
formaldehyde in air, for example, for workers, NIOSH or OSHA, 
or for recommendations that may come from others like what are 
levels of concern, these are usually based on levels of 
formaldehyde in air. These are the levels you might see in 
urban settings or in homes or in outdoors. These are levels you 
might see in occupational settings. There are standards for a 
number of those settings such as occupational standards, but 
there are not settings for standards for residential travel 
trailers.
    Mr. Souder. I appreciate the detail. Because, basically, we 
are not proposing zero here. We are trying to decide, because 
we have those standards in the workplace, we have those 
standards all over, what is an acceptable level standard.
    Hopefully, out of today's hearing you will also see--one of 
the questions I keep raising is I actually know people who have 
lived in travel trailers, that whether they be migrant workers 
or others that--in mobile home parks that we have mobile home 
industry people who can't afford more often do that. This 
historically hasn't been questioned. We don't have a body of 
evidence that here other factors can aggravate. It could be 
weather, could be stress, could be certain people react 
differently.
    I think it is important when you do your study looking at 
the total exposure in the United States to be very careful how 
it is interpreted. It is not likely to be a zero tolerance 
level, that our body has formaldehyde in it and we would die 
without formaldehyde in it. It is easy to kind of villainize a 
substance when the real debate here is what level of that 
substance puts certain people at risk.
    In general, I think part of the challenge here is that many 
are so frustrated that people haven't been able to get back 
into their homes that it has exaggerated and overhyped a 
possible true risk. But we have several cross-currents going in 
today's hearing, and that is why I asked the question about the 
FEMA memo, is that even FEMA may have overreacted. Because they 
hear this. They hear people getting sick. They want to protect 
themselves. Well, then they ought to be protecting the poor 
just like they protect themselves.
    But the whole thing was an overreaction. We need a study. 
We need to basically understand, but we are not going to get, 
most likely, to a zero level.
    I also want to briefly comment, and then, if the Chairwoman 
wants to give additional time.
    I have been to New Orleans multiple times. Last time I was 
there, I sat through multiple briefings. It is a challenge. If 
you don't have jobs and then you put people in housing, how do 
you pay for housing? It is a complicated interrelationship.
    But I don't think anybody here or any taxpayers who put the 
literally billions into the region understand why people are 
still in trailers. You get down there, you realize it is very 
complicated, but some of this suggests really fundamental 
questions on how we deal with emergencies. Because this is 
years out. We have never put this level of emergency funding 
into a project. I would be interested in knowing what are the 
stumbling blocks to keep you from going faster, what are all 
these regulations that slow it down.
    I have a group from my district, Hope Crisis Network, with 
Kevin Cox, who goes in, and they have gone in to Mississippi 
and helped----
    Ms. Jackson Lee. I yield the gentleman an additional 2 
minutes.
    Mr. Souder [continuing]. Helped connect churches. From the 
beginning to end, they have been down there building houses. In 
fact, many of the faith-based groups decided not to touch the 
Government in the process, because they are getting the homes 
up, and it is discouraging to those of us who put all these 
dollars in to watch individuals and church people take time to 
go down to Mississippi, spend a week and go down later to 
rebuild, when we have put all this money out and we still don't 
see it from the Government side. That is partly the frustration 
you are hearing today, too.
    I thank the gentleman.
    Dr. Falk may have had additional comments.
    Ms. Jackson Lee. Dr. Falk, if you would answer the 
gentleman's question.
    Dr. Falk. Going back to the earlier part of your comments, 
what we try to say to people is that, at higher levels, there 
is a greater risk for long-term effects; at lower levels, 
presumably a lesser effect. That the higher levels should lead 
to greater urgency in thinking about relocating, that if there 
are children, elderly people who are sick or with asthma, that 
should be further reason for thinking of the urgency of 
relocation.
    So we are considering the levels. What we don't have is a 
formal standard to say, if you are above X or Y, you are, you 
know, in violation of something; if you are below, you are--but 
we do definitely try to point out that there is a gradation of 
levels and that the risks increase at the higher level. We try 
to put that in context for people.
    Ms. Jackson Lee. I thank the gentleman.
    The gentleman from Texas, Mr. Green, is recognized for 5 
minutes.
    Mr. Green. Thank you, Madam Chairwoman.
    Dr. Falk, let's talk for just a moment about Dr. De Rosa. 
Is that the way his name is pronounced?
    Dr. Falk. Yes.
    Mr. Green. Is he, in fact, the director of the Division of 
Toxicology, or was he at some time the director of the Division 
of Toxicology and Environmental Medicine, Agency for Toxic 
Substances and Disease Registry?
    Dr. Falk. Yes. That was his position, at it is stated 
there.
    Mr. Green. As a director, I assume that that means that he 
was a person in charge. Is that a fair statement?
    Dr. Falk. The people who worked on that ATSDR consultation 
were from his division, yes.
    Mr. Green. All right. I assume that a person in charge of 
the Division of Toxicology and Environmental Medicine, an 
agency for toxic substances, he should have some knowledge of 
toxic substances, wouldn't you agree?
    Dr. Falk. Yes.
    Mr. Green. All right. If this is true--and he indicates in 
his letter, the very first sentence, ``We should be very 
cautious about the use of the word `safe' in reference to 
formaldehyde.'' Do you agree with that sentence?
    Dr. Falk. Yes.
    Mr. Green. He goes on to say, ``since it is a carcinogen.'' 
Do you agree that formaldehyde is a carcinogen?
    Dr. Falk. Yes.
    Mr. Green. ``It is a matter of science policy that there is 
no safe level of exposure.'' Do you agree with that sentence?
    Dr. Falk. It is a matter of science policy to say that even 
a very minute amount of a carcinogen could potentially relate 
to the development of cancer. I mean, the risks would vary by 
the degree of level.
    Mr. Green. All right. Let me go on. Level, size of a 
person, babies might be more vulnerable than a 68" football 
player.
    ``In addition to cancer, formaldehyde''--this is the second 
paragraph--``has been shown to be a reproductive developmental 
toxin and is a skin sensitizer, as is evidenced by the reported 
symptoms of the children in the trailers in Mississippi.''
    Do you have a problem with that sentence?
    Dr. Falk. I think there is no question about the skin 
sensitizer. I think the issue of reproductive and development 
toxin, there would be many questions about that.
    Mr. Green. All right. Let's go on. He indicates that, 
``Overt symptoms will probably trigger sensitization in some 
portion to varying degrees in children.'' Do you have a problem 
in that sentence?
    Dr. Falk. No. I think when he says overt symptoms in people 
who are exposed to those higher levels that cause overt 
symptoms, there is a concern about sensitization.
    Mr. Green. Okay. Now, do we still have people living in 
trailers with formaldehyde?
    Dr. Falk. Yes.
    Mr. Green. Do we have children living in trailers with 
formaldehyde?
    Dr. Falk. Yes.
    Mr. Green. Notwithstanding this letter, we still have--
before I go on with that question, how long have they been in 
these trailers, some of them? Is it safe to say years?
    Dr. Falk. Several years.
    Mr. Green. Notwithstanding this letter and knowing that 
people have already been there for years, we are still going to 
have children stay in trailers with formaldehyde.
    Dr. Falk. We have been very explicit in the statements from 
CDC that we are totally behind the FEMA assertions that people 
should be moved out of the trailers, the travel trailers. We 
don't think this is the suitable long-term----
    Mr. Green. Let me just ask you this, Doctor. When you say 
``move,'' are you saying over some prolonged period of time, or 
are you saying immediately?
    Dr. Falk. We are saying they should be offered the 
alternative immediately. Let me explain----
    Mr. Green. Well, let me ask, rather than you explain. 
Should they have been moved within months?
    Dr. Falk. I think that would certainly be a good option. 
That would definitely be a wise idea. We are in a difficult 
situation----
    Mr. Green. Doctor, do you have grandchildren?
    Dr. Falk. Yes.
    Mr. Green. Would you want your grandchildren to stay in the 
trailer for years?
    Dr. Falk. No. I would say the same for----
    Mr. Green. Anybody else's grandchildren.
    Dr. Falk [continuing]. Anybody else's grandchildren. I 
understand. But sometimes we have to make these things as clear 
as we can. Doctor--perhaps I should go to the FEMA 
representative.
    Your position is that the kids are still in the trailer, 
because? Why are the kids still in the trailer?
    Mr. Castillo. We have families throughout the Gulf that are 
still in travel trailers or in trailers----
    Mr. Green. Why are they still in trailers?
    Mr. Castillo. The folks who are still in trailers, either--
there is a number of reasons why they are still in trailers.
    Mr. Green. Why? Give me the reasons.
    Mr. Castillo. Reasons they are there: They have it parked 
on their property and are waiting to rebuild their homes to get 
back in there, so instead of moving away, they stay in the 
trailers----
    Mr. Green. We have no other options?
    Mr. Castillo. Well, the options that we have offered 
include moving outside the area. Now, if they do have a concern 
and they express a concern to us that they do have a 
formaldehyde concern, then we give them the other options. The 
other options are immediately move out into a hotel or motel 
unless we can immediately place them in an apartment or rental 
property.
    Mr. Green. Here is my concern. At some point, these 
children may start to show symptoms that are detrimental to 
their long-term being. We are sitting on a time bomb, 
understanding that we are, and not taking affirmative action to 
do something about it.
    You have the CDC indicating to you that a good option would 
be to get them out within months. You choose to let them move 
if they so choose to move.
    Mr. Castillo. If I can just correct you, sir, it is not 
that we choose to let them move. We are still moving people 
out. The bottom line is we are moving to get as many people out 
as possible. The people who bring concerns are the ones who 
move to the top of the line, basically, who have those 
concerns. We place people in hotels and motels until we can get 
them more permanent housing.
    Mr. Green. Madam Chairwoman, thank you for the additional 
time, but I do want to go to Mr. Bregon.
    Sir, can HUD not accommodate the persons who are living in 
these trailers with formaldehyde? Can HUD not accommodate them?
    Mr. Bregon. Under the interagency agreement that we have 
with FEMA, it is their responsibility to move them out of the 
trailer and then we take over under the DHAP program.
    Now, we do have a referral system, so all of our clients 
that were either in public housing authorities or were in 
homeless facilities, we have taken care of our clients. The 
FEMA individuals are mostly homeowners or renters that are 
still either rehabbing their homes, as Mr. Castillo indicated, 
or still looking for units.
    We have been working with this universe and giving them the 
referrals as to what is available. In many instances, the 
market has been saturated to a point where there is no 
available units in that market. That is why Mr. Castillo 
indicates that, in many instances, we are telling families, 
``You cannot stay in this town, but there are facilities in the 
town down the road,'' and they say, ``Well, you know, my job is 
here. Why would I move to another town?''
    Mr. Green. But don't we have a duty, sir, to say to persons 
when we say this, ``Look, we will not allow you to stay in this 
trailer, we will not allow you to stay in this trailer, you 
must move out of this trailer; here are all of the options, the 
universe of options available, but you can't stay in this 
trailer''? Because Dr. De Rosa has given us fairly good 
indications that this can be detrimental to their health. 
Probably there are a lot of folk who would agree with it.
    Mr. Bregon. We don't have the authority. HUD doesn't have 
the authority to tell folks, because they are not HUD clients. 
They are FEMA clients.
    Mr. Green. So FEMA passes it to HUD, and HUD passes it to 
FEMA.
    Mr. Bregon. What we are telling you is what the agreement 
we have with FEMA is, and that is the agreement. You move them 
out of the trailer, and then we will take over. If the 
agreement were to have been, ``HUD, you move them out of the 
trailers,'' then we would have done that. But that is not my 
office that administers that program between FEMA and HUD. But 
my understanding is that that is the agreement that was 
executed, and that is what they are working on.
    Mr. Green. Somebody should suffer. Some heads really should 
roll for allowing this to go on and on and on. There comes a 
time when somebody has to step up and provide some leadership. 
If the agreement isn't adequate, if it doesn't provide what you 
need, then you should give someone the opportunity to help you 
amend it. Children should not continue to stay in these 
trailers. There is something dastardly about this. It is 
sinful.
    Mr. Bregon. I agree with you, Mr. Green. Remember, this 
agreement was just signed September 20, 2007. So this had been 
going on with FEMA for a long time before HUD got involved. 
HUD's Secretary told this body, we are willing to take on this 
responsibility if you give us the resources. That decision was 
made and--on December, 2007, where approximately $380 million 
were transferred to HUD to do this undertaking. So we are doing 
what we are supposed to do. I agree with you. I mean, this is a 
travesty.
    Mr. Green. It is.
    Thank you, Madam Chairwoman. I thank you for that comment.
    Ms. Jackson Lee. Mr. Green, I think you allowed Mr. Bregon 
to capture the essence of this hearing, and it is a travesty. I 
would like to join my colleagues on this committee in reaching 
out to the other jurisdictional committees to fix a completely 
broken, disastrous disaster response.
    I yield to the distinguished gentlewoman from New York for 
5 minutes.
    Thank you, Mr. Green.
    Ms. Clarke. Madam Chairwoman, I think this hearing has 
really highlighted some real heavy lifting that has to be done 
by our Government to really make whole the people of this 
region who seem to be just stuck right now, and I just hope 
that the representatives here will take what has been said, 
what they have heard and really try to get some traction done 
in their respective agencies.
    Because, clearly, I don't think any of us would want to be 
in the same predicament as these folks are who are living in 
these trailers right now. Knowing what we know, knowing how 
long they have been there, there has to be a solution.
    I know that, again, the talent, the expertise, the ability 
exists within, you know, the individuals who are here, within 
their respective agencies to get this done. I think the will 
has to supersede everything else at this point to just make it 
happen.
    I would just like to say that in closing, Madam Chairwoman.
    Ms. Jackson Lee. I thank the gentlelady for her insight, 
and certainly I will yield to the gentleman from Indiana. As a 
Member from New York, you know disaster. It seems that, 
although all is not completely well with New York, we do know 
that Congress moved quickly in order to help those victims. 
What is the breach that we have here with Hurricane Katrina and 
Rita?
    Before I close--and I thank the gentlelady. Is she yielding 
back?
    Ms. Clarke. Madam Chairwoman, you can have the balance of 
my time.
    Ms. Jackson Lee. Mr. Souder, I yield to the gentleman.
    Mr. Souder. I just want to ask Dr. Falk a question. Because 
a lot of life is managing risk, and nobody wants high risk. But 
aren't there carcinogens if I go eat fast food at McDonald's?
    Dr. Falk. There are carcinogens in multiple parts of 
society. We try to evaluate those risks and deal with the low 
risks and reduce the high risk.
    Mr. Souder. Isn't there in broccoli and natural foods as 
well?
    Dr. Falk. There are probably carcinogens in foods.
    Mr. Souder. As we look at cell phones and microwaves, life 
is managing risks, but we want to make sure that we don't put 
people who are vulnerable in high-risk situations ever, and we 
certainly don't keep them there a long time.
    But we have to have a balanced view about risk, and it is 
fine to say I am not going to have any carcinogens in my body, 
but that probably is not realistic, even in this room. 
Certainly secondhand smoke, however, puts it up to a different 
level, and that is what life is debating.
    Dr. Falk. When we try to speak to people about formaldehyde 
levels, we look, say, at a range from very low, zero, all the 
way 1,000 parts per billion or 1 part per million and above and 
try to emphasize the risks are greater at the higher levels, 
the risk for sensitization, the potential long-term risk for 
cancer, the risks for acute effects, and emphasize the urgency 
related to seeking alternative housing at the higher levels.
    Mr. Souder. Thank you.
    Ms. Jackson Lee. Let me thank the gentleman from Indiana.
    The gentleman from Texas is yielded an additional minute 
for a question.
    Mr. Green. Doctor, I just want to make sure I understand 
you. You are saying that a child eating a hamburger at 
McDonald's is exposed to the same level of carcinogen as a 
child in one of these trailers?
    Dr. Falk. No, I didn't say the same level----
    Mr. Green. But that is the indication, the way you allowed 
that to be explained.
    Doctor, listen, this is really serious. Let's not play with 
lives by talking about McDonald's hamburgers versus 
formaldehyde in trailers. Now you are a man of science. You are 
an honorable man. Don't allow your record to reflect that kind 
of insensitivity. This is your watch, Doctor. You ought to be 
concerned. Don't let that happen on your watch.
    Dr. Falk. Yes, and we are concerned; and I apologize if I 
left that impression.
    Mr. Green. Thank you, Doctor.
    Ms. Jackson Lee. I do thank the gentleman.
    Let me finish with two quick questions. I think we have 
just framed the dilemma. There is an agreement, an agreement 
that pushes one aspect onto FEMA and another aspect onto HUD. I 
would ask for the agreement to be submitted to this committee, 
and I would--if there are any other attending documents, I 
would ask that those come in as well.
    Let me quickly go to Mr. Castillo to now ask you to provide 
this committee with a report under the agreement as to the 
conditions and the presence of people--I'll go so far to 
indicate Mississippi, Louisiana and Texas--that are in trailers 
that are your trailers that come under the agreement that Mr. 
Bregon referred to. Meaning that Mr. Bregon has indicated there 
is an agreement you are supposed to get them out of the 
trailers and they go to him. Tell us who is left in the FEMA 
trailers, Texas, Mississippi and Louisiana? Because that frames 
the Department of Homeland Security's responsibility in 
disaster.
    Mr. Castillo. Just for clarification, you mean the numbers 
of folks still in trailers as opposed----
    Ms. Jackson Lee. Yes, sir, and you have the census ability, 
meaning the capability to decipher seniors and children. I know 
there are others in the mix. So if you would do that.
    Then if you would please tell me the status of your 
disaster best practices grants. You understand what I am 
saying, when you gave dollars for people to design something 
other than a trailer, did that not happen?
    Mr. Castillo. The alternative housing pilot program yes, 
ma'am, the status.
    Ms. Jackson Lee. Do you have anyone who has completed what 
they are supposed to be doing?
    Mr. Castillo. Not completely, but there has been progress.
    Ms. Jackson Lee. How long do you give that grant?
    Mr. Castillo. Mississippi has already installed 1,346 
units.
    Ms. Jackson Lee. This is under their grant?
    Mr. Castillo. Correct.
    Ms. Jackson Lee. When did they get the grant? How many from 
Texas?
    Mr. Castillo. Texas was recently signed. There are no units 
in place yet.
    Ms. Jackson Lee. You will give me a full explanation in 
writing why it was recently signed.
    Do you know when the grant was rendered?
    Mr. Castillo. Yes, I will provide all that in the status.
    Ms. Jackson Lee. My question will be that you will give us 
an inventory.
    I do want to acknowledge how responsive Director Paulson 
has been and FEMA has been. I think it is important to put that 
on the record. I know this is a difficult set of inquiry.
    I would like also to ask of FEMA to get a report to you of 
how much longer these persons will be in the trailer; and the 
reason why I ask you that is because, in essence, you have 
jurisdiction over them to date, Mr. Castillo.
    Mr. Castillo. Yes, ma'am.
    Ms. Jackson Lee. Mr. Gerber, you are a recipient, the State 
of Texas, of these dollars you have opted--as opposed to a 
compensation program you have opted, I assume, to a rehab and 
construction program. My question to you is to provide us, this 
committee, with the immediate benchmarks, immediate scheduling 
of when you expect to move the large numbers of individuals out 
of trailers and when you expect for construction to begin.
    The Sanders family may be an example, those who are still 
in trailers. I want to focus on the trailers in southeast 
Texas, when you expect, and what the process will be to begin 
construction as soon as possible. Is that possible to do?
    Mr. Gerber. Yes, ma'am, we can, again keeping in mind the 
process is really on a first-come, first-served basis. Folks 
with trailers certainly are getting priority, but there is 
17,000 other properties potentially could be eligible for those 
funds of which we expect----
    Ms. Jackson Lee. But if you make progress on those in 
trailers, you would be responding not only to those others. 
Because as the trailer people move you are able to go to the 
others--you understand what I am saying--as you move those 
people.
    My last point to you is what can we do to help you?
    Mr. Gerber. Would you like me to put that in writing or do 
you want me to answer it?
    Ms. Jackson Lee. Quickly, and put the rest in writing.
    Mr. Gerber. I think what the hearing has shown is that 
there is just a gap between where first response leaves off and 
where the longer term and who is responsible for that second 
response--HUD--not wanting to represent HUD, but HUD, much like 
us, is--we are a financing agency. We help to build affordable 
housing throughout the country. We are not--in the case of 
Texas, we are not necessarily tooled to be a disaster recovery 
agency. If we are and that is the desire of Congress and there 
is a program and funds associated with it, I think there is 
probably some middle role to be played.
    But I think it is fair to say that the Community 
Development Block Grant program is a program that communities 
use with great effectiveness when they have a long period of 
time to do planning. Works great for that. Sometimes it doesn't 
work so well in the disaster recovery arena.
    Ms. Jackson Lee. I think if you can expand on that in 
writing, but I think you have given us a very good response.
    I close on Dr. Falk. Would you concede that the time in the 
trailers contributes to the problem of children and seniors and 
people with respiratory illnesses and that 3 years contributes 
to the detriment of individuals being in trailers that might 
have formaldehyde?
    Dr. Falk. Yes. The answer is yes; and, as I said before, we 
have stated very firmly that it really is time for people to 
receive alternative housing.
    Ms. Jackson Lee. Let me thank everyone for their presence 
here today and thank all the witnesses. You have extended 
yourself in the terms of sharing with us. I don't think, and I 
will not hold this meeting to be an information meeting.
    I would like to thank Chairman Thompson and Ranking Member 
King, Mr. Souder. This is not an information meeting. This is a 
meeting to point out the dilemma of thousands who are living in 
trailers and that we have a crisis.
    Mr. Gerber is articulate and committed. He made a point. I 
believe that the CDBG dollars was the wrong vehicle. I think 
the moneys were helpful. But I think the Governor should have 
worked through the enforcement of Congress for a disaster-type 
agency that had the elements of housing, Red Cross, social 
service that was plugged in to address the question of urgency.
    For example, maybe they would have retained a builder that 
would go in and begin to build as quickly as possible a form of 
housing that could substitute for the trailer. None of this was 
done.
    I think we have a breach with FEMA not continuing to 
monitor and to assess those disaster victims in their trailers 
and to inventory those individuals and to monitor where they 
are. I think you also need to find the 5,000 people that are 
missing, for whatever reason it is.
    This is a hearing to fix us better, to make us better than 
we were and to be able to respond to the disasters that come 
upon us every single day. I look forward to this committee 
addressing this question legislatively, and I thank all of you 
for your presence here today.
    This meeting is now adjourned.
    [Whereupon, at 5:30 p.m., the committee was adjourned.]

                                 
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