[Senate Hearing 110-930]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 110-930
 
       TWO YEARS AFTER THE STORM: HOUSING NEEDS IN THE GULF COAST 

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

                                HEARING

                               before the

                              COMMITTEE ON
                   BANKING,HOUSING,AND URBAN AFFAIRS
                          UNITED STATES SENATE

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                                   ON

   THE CURRENT HOUSING NEEDS IN THE GULF COAST, HOW LOCAL, STATE AND 
  FEDERAL EFFORTS ARE ASSISTING IN MEETING THE MOST PRESSING HOUSING 
   NEEDS, AND WHAT CAN BE DONE TO JUMP-START HOUSING DEVELOPMENT AND 
 ASSIST PEOPLE DISPLACED AS A RESULT OF THE 2005 HURRICANES RETURN TO 
                           THEIR COMMUNITIES


                               __________

                      TUESDAY, SEPTEMBER 25, 2007

                               __________

  Printed for the use of the Committee on Banking, Housing, and Urban 
                                Affairs


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                            senate05sh.html

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            COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS

               CHRISTOPHER J. DODD, Connecticut, Chairman
TIM JOHNSON, South Dakota            RICHARD C. SHELBY, Alabama
JACK REED, Rhode Island              ROBERT F. BENNETT, Utah
CHARLES E. SCHUMER, New York         WAYNE ALLARD, Colorado
EVAN BAYH, Indiana                   MICHAEL B. ENZI, Wyoming
THOMAS R. CARPER, Delaware           CHUCK HAGEL, Nebraska
ROBERT MENENDEZ, New Jersey          JIM BUNNING, Kentucky
DANIEL K. AKAKA, Hawaii              MIKE CRAPO, Idaho
SHERROD BROWN, Ohio                  JOHN E. SUNUNU, New Hampshire
ROBERT P. CASEY, Pennsylvania        ELIZABETH DOLE, North Carolina
JON TESTER, Montana                  MEL MARTINEZ, Florida

                      Shawn Maher, Staff Director
        William D. Duhnke, Republican Staff Director and Counsel
   Joseph R. Kolinski, Chief Clerk and Computer Systems Administrator
                          Jim Crowell, Editor















                            C O N T E N T S

                              ----------                              

                      TUESDAY, SEPTEMBER 25, 2007

                                                                   Page

Opening statement of Senator Reed................................     1
    Prepared statement...........................................    34

Opening statements, comments, or prepared statements of:
    Senator Shelby...............................................     1
    Senator Menendez.............................................     3

                               WITNESSES

Mary L. Landrieu, U.S. Senator from the State of Louisiana.......     2
    Prepared statement...........................................    35
Orlando J. Cabrera, Assistant Secretary for Public and Indian 
  Housing, Department of Housing and Urban Development...........     6
    Prepared statement...........................................    45
James Perry, Executive Director, Greater New Orleans Fair Housing 
  Action Center..................................................    18
    Prepared statement...........................................    50
Alan Brown, Vice President of Operations and Chief Operating 
  Officer, United Methodist Senior Services of Mississippi, Inc..    20
    Prepared statement...........................................    59
James R. Kelly, Chief Executive Officer, Providence Community 
  Housing and Catholic Charities.................................    21
    Prepared statement...........................................    76
Emelda Paul, President, Lafitte Resident Council.................    23
    Prepared statement...........................................    79
Amy Liu, Deputy Director of the Metropolitan Policy Program, The 
  Brookings Institution..........................................    24
    Prepared statement...........................................    81
Edgar Bright, President, Standard Mortgage Corporation, on behalf 
  of the Mortgage Bankers Association............................    26
    Prepared statement...........................................    99

              Additional Material Supplied for the Record

Prepared statement from Kalima Rose, Director, Louisiana 
  Initiative, PolicyLink.........................................   107
Letter submitted to Senator Landrieu from Mark A. Studdert, 
  General Deputy Assistant Secretary for Congressional and 
  Intergovernmental Relations, Department of Housing and Urban 
  Development....................................................   126
Letter submitted to Senator Landrieu and Alphonso Jackson, 
  Secretary, Department of Housing and Urban Development, from 
  Milton J. Bailey, President, Louisiana Housing Finance Agency..   127
Letter submitted to Alphonso Jackson, Secretary, Department of 
  Housing and Urban Development, from Senator Landrieu...........   129
Letter submitted to Senator Landrieu and Chairman Dodd from C. 
  Ray Nagin, Mayor of New Orleans, Louisiana.....................   131
Prepared statement from Judith A. Browne-Dianis, Esq., Co-
  Director, Advancement Project..................................   133
Prepared statement from Amnesty International USA................   144
Prepared statement from the National Multi Housing Council and 
  the National Apartment Association.............................   152
Prepared statement from Zack Carter, Community Organizer, Alabama 
  Arise..........................................................   159
The Washington Post, ``Return to New Orleans; Residents should go 
  home to new and better public housing,'' editorial dated April 
  30, 2007.......................................................   181
The New York Times, ``In Divided New Orleans,'' editorial dated 
  May 15, 2007...................................................   181
The Washington Post, ``Home Sweet Home; New Orleans public 
  housing residents deserve better than what they had before 
  Hurricane Katrina,'' editorial dated August 27, 2007...........   182
S. 1668, Gulf Coast Recovery Act of 2007, section-by-section.....   184


       TWO YEARS AFTER THE STORM: HOUSING NEEDS IN THE GULF COAST

                              ----------                              


                      TUESDAY, SEPTEMBER 25, 2007

                                       U.S. Senate,
          Committee on Banking, Housing, and Urban Affairs,
                                                    Washington, DC.
    The Committee met at 9:34 a.m., in room SD-538, Dirksen 
Senate Office Building, Senator Jack Reed, presiding.

             OPENING STATEMENT OF SENATOR JACK REED

    Senator Reed. I would like to call the hearing to order. I 
want to welcome everyone to this important hearing on housing 
needs in the Gulf Coast and extend my appreciation to all the 
witnesses who have taken time out of their busy schedules to 
come to Washington, D.C., to be before us today.
    I want to also recognize my colleague Senator Mary Landrieu 
who is testifying this morning and acknowledge her efforts to 
secure resources and assistance for her constituents and all 
the Gulf Coast residents. She has been a stalwart in this 
effort, and she continues to do that. Her dedication to 
rebuilding these areas devastated by Hurricanes Katrina, Rita, 
and Wilma are impressive, and I know she is here fighting every 
day to make sure that the people of Louisiana and the Gulf 
Coast have an ability to rebuild their communities.
    We are here this morning because, although 2 years have 
elapsed since these hurricanes, unfortunately there is still 
much to be done, and we want to focus on what we can do to 
accelerate the reconstruction and do it in a way that will 
benefit the people of the communities that were devastated by 
these storms.
    I have a much longer statement which I would like to 
include in the record, because I do think it is important to 
hear not only from my colleague, the Ranking Member, Senator 
Shelby, but particularly Senator Landrieu. I would also note 
that Congressman Bill Jefferson is here. Welcome, Congressman. 
Thank you.
    Senator Shelby.

         OPENING STATEMENT OF SENATOR RICHARD C. SHELBY

    Senator Shelby. Thank you, Chairman Reed.
    It has been over 2 years since Hurricane Katrina made 
landfall, leaving behind a trail of unimaginable destruction 
and loss. Before we begin a discussion of the continuing needs 
of Katrina survivors, however, I would like to once again 
remember the nearly 2,000 individuals who lost their lives 
here. I believe that we can honor their memory in part by 
ensuring that the Gulf area is rebuilt not as it was, but as it 
should be.
    In these last 2 years, Congress has appropriated over $100 
billion to rebuild what Katrina destroyed. That is a 
significant amount of money. Clearly, the question is not a 
matter of funding in some instances but, rather, a question of 
why is it taking so long to get the funding to those who need 
it.
    I hope that today's hearing will provide an opportunity to 
examine how well the post-Katrina rebuilding effort is being 
conducted. Is it being fairly done? Is it being officially 
done? Is it reaching those people who really need it?
    While much of the focus since Katrina has been on New 
Orleans, I think it is also important to remember that Katrina 
also caused significant damage in Mississippi, my State of 
Alabama, and also Florida. A great deal of the damage done in 
these States occurred in many rural areas and small towns, and 
we are concerned that some of these smaller areas lack the 
capacity to fully tap the funding that Congress has provided 
for their needs. They should not be overlooked, and they should 
not be forgotten.
    For instance, over a third of the homes damaged in Mobile 
County, Alabama, were located in the unincorporated, often 
rural areas of the county. Congress tasked HUD with overseeing 
the development and implementation of each State's plan to 
address housing needs resulting from Katrina. I look forward 
here today to hearing how HUD is monitoring each State's 
efforts to address the specific and at times unmet needs of 
these smaller and sometimes isolated communities, such as in my 
State of Alabama.
    I want to welcome all of today's witnesses and thank them 
for their appearance at the hearing, and while leadership here 
in Washington is vital to the success of the Gulf Region, the 
most important leadership is always and will be at the local 
level.
    I want to thank and recognize those Alabamians who have 
traveled here today and who are in the audience for their 
continuing efforts to help bring back some semblance of 
building like it was and should be to southern Alabama.
    Thank you, Mr. Chairman.
    Senator Reed. Thank you, Senator Shelby.
    I would now like to recognize Senator Landrieu, and your 
full statement will be made part of the record, as well as any 
of the other statements of the witnesses today and members of 
the panel.
    Senator Landrieu.

 STATEMENT OF MARY L. LANDRIEU, U.S. SENATOR FROM THE STATE OF 
                           LOUISIANA

    Senator Landrieu. Thank you, Mr. Chairman, and I will try 
to summarize my remarks in the time allotted to me, and I 
really appreciate the opportunity to testify this morning on 
behalf of a great effort that is underway not only in our State 
but, as Senator Shelby said, throughout the Gulf Coast.
    Senator Reed. Could I ask you for a moment--I am the Acting 
Chairman, and it is really acting this morning.
    Senator Menendez, do you have a statement before we 
recognize Senator Landrieu? Forgive me, Senator Landrieu.
    Senator Landrieu. No, go ahead. Senator, go right ahead.

          OPENING STATEMENT OF SENATOR ROBERT MENENDEZ

    Senator Menendez. I will be brief, Mr. Chair.
    First of all, let me thank you and the Ranking Member for 
holding the hearing. I think it is incredibly important, and I 
just want to make some brief remarks on this.
    You know, here we are almost 2 years after the storm has 
hit discussing housing needs and the recovery effort along the 
Gulf Coast, so that even the nature of the hearing troubles me 
in some respects. Why 2 years later we are still discussing the 
type of needs that exist today somewhat is baffling to me.
    So my real question today that I look forward to hearing 
is: Why hasn't the region recovered? What hasn't been done? 
What needs to be done? And what is the most effective, 
efficient way to get it done?
    Recent data indicates that homelessness in New Orleans, for 
example, has almost doubled. Two years later, we should have 
been able to put a roof over almost everyone's head. This 
summer, 82,000 people were still in trailers despite findings 
that many trailers contained a toxic chemical. We always talk 
about safe housing in this Committee, and now we need to stand 
by that commitment.
    Currently, there are 7,300 public housing units in New 
Orleans, but less than 2,000 are being rented. And now, as I 
understand it--and I look forward to the Assistant Secretary's 
testimony--HUD has plans to demolish public housing buildings 
and replace them with fewer units. So that means we have either 
empty or destroyed apartments. Why aren't we using all of our 
available resources to provide affordable housing?
    Mr. Chairman, 1.3 million people were driven from their 
homes. Fellow Americans were forced to leave not only their 
hometowns, but often to cross State lines to find a place to 
stay. I know New Jersey became a second home to many traveling 
from the Gulf Coast, but I saw it in their eyes when I talked 
to them that they long to go home. The sum of the population in 
New Orleans was only 66 percent of its pre-Katrina levels. It 
seems to me we are just over halfway there, and that is not 
acceptable.
    And let me close, Mr. Chairman--and I ask for the rest of 
my statement to be included in the record--by saying I have to 
be honest with you, if I lived in Louisiana, I would want 
Senator Landrieu to be my Senator because she does not lose a 
moment. As a matter of fact, sometimes when I am trying to 
catch the train to a vote, I decide whether or not I want to 
step in the same compartment with her.
    [Laughter.]
    Senator Menendez. Because undoubtedly she will use the 
time, as I am sure she feels passionately about, to advocate 
for the reconstruction of her State and the people who have 
been displaced. And she just does an amazing job of it, and I 
just wanted to recognize her service.
    Thank you, Mr. Chairman.
    Senator Reed. Thank you, Senator Menendez, and, again, I am 
sorry for not recognizing you immediately.
    Senator Landrieu, please continue.
    Senator Landrieu. Well, I thank Senator Menendez for those 
remarks, and I thank him for his care and concern and for 
coming down and visiting and all of you on the panel this 
morning for focusing your ongoing efforts to help us recover in 
New Orleans, in the region, and in the Gulf Coast.
    I will try to be brief, but let me also acknowledge 
Representative Maxine Waters, Congressman Bill Jefferson, 
Congressman Barney Frank, and Congressman Richard Baker, 
Republicans and Democrats who have put their shoulders to the 
wheel to try to push and got a bill out of the House. This is a 
companion bill, if you will, in the Senate. I think there are 
some provisions of this bill that are slightly stronger, but 
both bills are moving in the right direction to find a balanced 
approach to solving some of the great housing challenges that, 
Senator Menendez, you so aptly pointed out.
    No. 2, let me begin by saying the scope of this disaster 
has still not been fully grasped, I think, here in Washington. 
We lost 275,000 housing units between just Mississippi and 
Louisiana alone. And, Senator Shelby, I am sorry that I cannot 
give off the top of my head those lost in Alabama, which was a 
thousand or so, and in Texas as well. But 275,000 housing units 
were destroyed between Mississippi and Louisiana.
    Habitat for Humanity, which is probably the most aggressive 
nonprofit, community-based, stepped-up rebuilding homes, has 
built less than a thousand homes in 2 years. We cannot do this 
with all of the great work even of Habitat for Humanity and the 
foundations and nonprofit organizations. The Government must 
take an extraordinary, strong, and bold effort to push housing 
and to create housing and to provide opportunity, and to do it 
with partners like faith-based organizations and nonprofits and 
the community. But it is going to take more, is what I am 
saying, than just volunteers coming down to rebuild homes. And 
in large measure, this bill helps to find the pathway forward.
    Just to recap Orleans' situation--and this is just one 
parish in the Gulf Coast, one parish--there were 80,000 owner-
occupied units, 100,000 rental units. Of the 100,000 rental 
units, 15,000 were public housing, including Section 8 of about 
5,000, and there were 20,000 vacant rental units in New Orleans 
the day before the storm hit.
    I am sorry I do not have those details for St. Bernard 
Parish, for Jefferson Parish, for the counties in Mississippi. 
But the overwhelming numbers are what I am trying to convey 
here.
    In response to the devastation of hundreds of thousands of 
homes and businesses, the Federal Government has done a couple 
of big things. One, we have sent to date $13 billion for levee 
construction, and we just passed a WERDA bill yesterday to try 
to shore up levees and flood protection. We have passed $15 
billion in community development block grants to try to give 
help to homeowners, primarily, and infrastructure, which would 
make sense. And we have provided billions of dollars in GO 
Zones for the redevelopment of business and housing.
    But there is a piece that is missing, and this is the 
piece. This is the housing piece for public housing and for 
renters, for people who choose not to be homeowners or cannot 
be homeowners, for people who would like to find a market-based 
rent but cannot afford it because their income is too low or 
because they are disabled or because they are elderly or 
because they are very, very, very sick. We have got to push 
forward a public housing bill, and this is the bill. It came 
out of the House. This is a companion bill in the Senate. There 
is some urgency about getting this bill passed.
    No. 2, in the devastation of these public housing units, 
some of them were not in very good shape. Some of them were 
very high crime areas, and some of the units were quite 
dilapidated. Some people wanted to say let's just demolish them 
and start all over again. Other people said let's just renovate 
them and basically get back to where we were.
    This bill is a middle-of-the-road approach. This says we 
are not going to demolish all of the housing units, but it also 
says we are not just going to throw a little bit of paint on 
the walls, put a few light bulbs in, and have people living in 
the same sort of squalid conditions that many of these housing 
units represented before the storm. And I cannot thank the 
Congressmen and Congresswoman Maxine Waters enough for trying 
to push forward a middle-road approach with Catholic Charities, 
with the faith-based organizations, with the tenant groups that 
will say we are going to have a phased redevelopment. We have 
to give people a right to return. We have to give people a 
right to make choices about whether they come back. But we want 
to make it a better place. We want to not only build housing 
and build units, but have some mixed-income units. We want to 
provide wrap-around services. We want to provide, instead of 
just an apartment, perhaps daycare, perhaps help for senior 
citizens.
    That is basically, Mr. Chairman, what this bill does. I can 
answer a lot of questions about it, but I am hoping that HUD 
will testify to this this morning. There was a notice that came 
out Friday that has me a little concerned. I am hoping they can 
clarify it. But I am hoping, because we have considered HUD a 
partner in this, that they are committed to this middle-of-the-
road redevelopment approach to try to provide urgent help for 
renters. Again, 80,000 homeowners in New Orleans, but 100,000 
renters. And while the community development block grant has 
gone to the Road Home Program trying to help homeowners get 
back--and we have still got a lot of challenges and work there, 
Senator Menendez--we have got to push forward a bill that 
expands Section 8, that gives some help to redevelopment of 
these rental units in a way that helps us rebuild a better city 
and better region.
    I am happy to include help for Mississippi. I am happy to 
include help for Alabama. The Senator can direct us, the 
Ranking Member, about how he would like us to help Alabama. 
This is not meant to be just a Louisiana bill, nor just a New 
Orleans bill. But I ask this Committee to work with us to help 
us get literally tens of thousands of people back. They were 
not homeowners. We hope to encourage homeownership. But as we 
work toward greater homeownership in Orleans Parish and other 
places, we need to find places--affordable, decent--where 
people can rent and live and get out of the trailers, 
particularly those with formaldehyde in the trailers.
    I am happy to answer any questions, but I think that that 
would suffice. I am going to stay here to listen to the panel. 
And, again, I thank my colleagues from the House for their 
great advocacy, and let's try to push this bill through, get to 
a markup, Mr. Acting Chairman, and thank you very much.
    Senator Reed. Senator Shelby.
    Senator Shelby. Senator Landrieu, we have talked about this 
on many occasions, and I know that Louisiana and Mississippi 
took the brunt of the damage here. But in my State of Alabama, 
and Mobile County, as I mentioned in my opening statement, we 
have got some rural areas that have more than been overlooked 
here. Of course, I will address that to the HUD Secretary in a 
few minutes.
    In any supplemental bill, the one you are advocating and 
others that we passed, I hope that you would be able to sit 
down with me and Senator Sessions and tailor our needs, which 
are small compared to yours but are very important to a 
population of our constituents in Mobile County, Alabama----
    Senator Landrieu. Absolutely, and I will give you my full 
commitment. As you know, we have worked well together on 
revenue sharing for Louisiana and Alabama on coastal issues, 
and I look forward to it. The needs are, you know, different 
but they are equally important, and I am happy to include 
anything for Alabama and Mississippi in this bill.
    Senator Shelby. Thank you.
    Thank you, Mr. Chairman.
    Senator Reed. Thank you, Senator Shelby.
    Senator Landrieu, I would invite you to join the panel at 
the dais, and we would also like to welcome Orlando Cabrera, 
the Assistant Secretary for Public and Indian Housing at HUD. 
Mr. Secretary, thank you for joining us today, and we look 
forward to your testimony.

STATEMENT OF ORLANDO J. CABRERA, ASSISTANT SECRETARY FOR PUBLIC 
AND INDIAN HOUSING, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

    Mr. Cabrera. Thank you. Good morning, Mr. Chairman, Ranking 
Member Shelby, and Members of the Committee. Thank you for 
inviting us to testify before you today.
    Mr. Chairman, I ask that my statement be accepted for the 
record.
    Senator Reed. Without objection.
    Mr. Cabrera. In my previous role as Executive Director of 
Florida Housing, we dealt with recovery efforts after having 
been struck by five hurricanes in a 13-month period. Despite 
that experience, Katrina has taught me that when it comes to 
the ferociousness of hurricanes, frequency pales in comparison 
to intensity.
    My personal experience with hurricane recovery extends well 
beyond my time with Florida Housing or Katrina, Rita, and 
Wilma. My wife and I were displaced from our home by Hurricane 
Andrew for 4 months. Our house was severely damaged. 
Comparatively, though, I feel fortunate today. Compared to 
those in New Orleans particularly, I was displaced by living 
with family in my own city, which, however dysfunctional the 
place at the time, still essentially found ways to provide its 
residents with basic services that New Orleans, for example, 
largely through no fault of its own, cannot provide. Our school 
system was still largely intact. Water and sewer infrastructure 
mostly worked. Public safety was in place, and medical services 
were available. Dade County still had a rough foundation upon 
which to rebuild. Even with that rudimentary foundation, our 
community was in tatters and did not resemble itself for years 
afterward.
    In New Orleans, as an example, that foundation is 
considerably more washed away than it was in Dade County. 
Hurricane Andrew caused what at the time I considered to be 
unfathomable damage, but the aftermath was not such that our 
city was flooded for weeks and its population displaced, 
scattered about, two-thirds of it, overnight.
    In comparison, the experience of Katrina's effect on 
Mississippi was more akin to Andrew than that of New Orleans. 
Now, 15 years after the beginning of those horrid days for our 
family, much of our efforts on the Gulf Coast are affected by 
those experiences of so long ago.
    Nothing, though, not even the previous years' many 
hurricanes, could have prepared us for the hurricanes of 2005. 
HUD's role in a catastrophe is always one that begins where 
emergency operations end and the efforts to return the 
community to some variation of normalcy begin.
    Congress has asked HUD to do a lot, and HUD has. 
Essentially, our task--and I mean the collective sense of 
``our''--is to rebuild a geographical area roughly the size of 
Denmark and simultaneously rebuild a core city of the country 
roughly the size of Copenhagen. But the challenges are 
different in Mississippi than they are in Louisiana, and for 
different reasons. In Mississippi, Katrina was a hurricane, 
while in New Orleans it was something more than a hurricane--a 
hurricane followed by inundation. That kind of catastrophe can 
only be addressed by time. For those most affected, 
understandably time moves too slowly. For those of us committed 
to rebuilding, our sense is that time moves altogether too 
fast. But the tangible results are deliberate and slow.
    Given that premise, the core truth about recovery remains 
unchanged. Recovery is remarkably hard, thankless work for 
whoever undertakes it. To a degree, it should be thankless. 
Communities should rightly expect and receive help from all 
quarters--Federal, State, and local governments. HUD has 
certainly attempted to do its part in meeting those 
expectations during these last 2 years, and the one thing we 
all learned is that recovery never happens quickly enough.
    We have a lot to report regarding the last 2 years during 
which we have facilitated the availability of billions of 
dollars to the Gulf Coast States, made housing available to 
tens of thousands of Gulf Coast residents, created tools that 
help Americans affected by natural disasters find housing, and 
housed tens of thousands of public housing residents, Section 8 
voucher holders, and other tenants whose housing is funded, 
directly or indirectly, by Federal dollars that HUD 
administers.
    Secretary Jackson has executed 120 regulatory waivers. It 
has made it easier for those that operate HUD programs to 
perform their jobs and more seamlessly provide housing. So what 
will that mean?
    For the Housing Authority of New Orleans, for example--it 
is known as HANO--it has meant bringing home over half of the 
city's public housing residents. It will also mean 5,100 new 
affordable units, 1,000 new affordable homes ready for 
homeownership, and 3,000 more tenant-based voucher holders 
available to residents of New Orleans. For coastal Mississippi 
and Alabama, it has meant helping PHAs rebuild damaged housing, 
which, to their fullest ability, they have done. In both cases, 
it meant assuring those who lived in public housing that they 
will have a first opportunity to return to housing that is 
provided by their respective public housing authorities.
    We have reached out to former public housing tenants all 
over the country consistently over the last 2 years, offered to 
pay off remaining lease payments if they elected to go home, 
offered to pay for moving expenses, and help resituate them in 
New Orleans by providing social services, a social net.
    Beyond public housing, it has come to mean helping 
thousands of storm victims by providing resources that have 
helped them find and maintain homes. It has meant providing the 
States that have received funds from Congress with the 
flexibility to shape their own recovery plans and perform.
    Similarly, it has meant that recovery and facilitating 
recovery is a predominant focus above anything else. HUD's role 
has been and will continue to be to facilitate success and even 
catalyze success wherever possible. Regardless of HUD's actions 
and unquestionable commitment to help recovery, nothing that 
has been done or could be done would address the ultimate truth 
that those of us in Government dealing with recovery--whether 
Federal, State, or local--know. We know that those folks want 
to be home, want their lives back as they knew them, their 
schools and hospitals back, and, most of all, their communities 
back.
    HUD's commitment has been to make that aspiration of return 
to normalcy as likely as possible by executing upon the 
President's and Congress' commitment to recovery. HUD will 
continue to perform its part in the recovery efforts.
    Thank you for this opportunity to address the Committee. I 
stand ready to answer any questions you may have.
    Senator Reed. Thank you very much, Mr. Secretary, and let 
me begin by saying that just recently--it was alluded to by 
Senator Menendez--HUD announced the demolition of four public 
housing units in New Orleans. And I understand that one of 
those units, Lafitte, the plan is to replace all the public 
housing units with scattered-site, mixed-income developments. 
But do you intend on a one-for-one replacement with the other 
three units?
    Mr. Cabrera. I think the issue is, Is it going to be one-
for-one replacement of public housing or one-for-one 
replacement of affordable housing? We are committed to one-for-
one replacement of affordable housing. When we talk about 
public housing, what we are talking about is a particular 
nature of the financing of operations going forward. If the 
issue is to serve a particular demographic--and in this case, 
the demographic is basically zero to 60 percent of area median 
income, or zero to 30 percent of area median income--there are 
lots of tools to do that with. That includes Lafitte. That 
includes the three others.
    I will clarify, though. On Friday, what was issued was a 
permit. Nothing has been knocked down. It is the first step in 
the process that started 18 months ago.
    Senator Reed. On public housing, let me go back to the 
initial point, which is that affordability is often in the eye 
of the beholder and the wallet of the payer. For many public 
housing tenants, their income is 30 percent of the area median 
income or below that. So if you are talking about affordable 
housing which is within the grasp of people who are making 60 
percent of median income, that might be way beyond the ability 
of a lot of public housing tenants. What are those people going 
to do?
    Mr. Cabrera. I think, first of all, when you are talking 
about the nature of the vehicle that is financing these units, 
when you have units that are financed under Section 42 of the 
Internal Revenue Code, if someone is holding a tenant-based 
voucher--they have tenant-based rental assistance--and they 
present it to a landlord, it has to be accepted. So they really 
will be subsidized. The issue is the nature of what is going to 
be subsidizing those units. That is the point of tenant-based 
rental assistance, is to give people access to that 
marketplace.
    Now, what is being built are 5,100 units. What I think we 
all--and I include HUD in ``we.'' What we all forget is, prior 
to the hurricane, there were, I think, 2,700 units off-line in 
New Orleans, mostly because of housing quality standard 
problems. And so the issue here becomes trying to replace units 
with the most tenable way to operate them. So that is how 
essentially----
    Senator Reed. Well, I just want to clarify my 
understanding. Are you telling me that if you are a public 
housing tenant now, the unit was destroyed, there is not 
another unit that is either public housing or--public housing 
available for you, that you have the right to a voucher which 
will allow you to go into any rental place in New Orleans and 
the Federal Government will pick up the tab if you go to the--
--
    Mr. Cabrera. What we are saying is if you were a public 
housing resident the day before the storm and you want to come 
home--and let's think theoretically and assume that all of 
these units are up and they are available--you will be given 
the first opportunity to return. You will have a voucher, and 
you can utilize it at those units, assuming you have complied 
with Federal law, yes. On top of which there are ACC units that 
are going to be reconstructed.
    Senator Reed. Well, I am going to allow my colleagues to 
ask questions. I might reserve the right to ask an additional 
question to follow up. It seems to me that you have already 
admitted that you are not going to, in the other three units, 
provide one-for-one replacement of public housing units. But 
somehow everybody is going to have a place to reside after you 
finish.
    Mr. Cabrera. I think, Mr. Chairman, the reason that this is 
something of an issue is because we presume that public housing 
is the only form of affordable housing. Public housing 
authorities, as a general rule, have been property managers, 
not developers. Public housing authorities all over the country 
are beginning to change that because the assets are 70 years 
old. They have to change that. So at the end of the day, what 
you build back using the various subsidy pools that are out 
there, the idea would be to serve that same population using 
the various tools that are out there, not just one. And the 
reason is because of the obsolescence of those properties. 
Those properties are challenged, to say the least.
    Senator Reed. Senator Shelby.
    Senator Shelby. Thank you. Thank you, Senator Reed.
    Mr. Secretary, the HUD oversight of State CDBG plans, that 
is my subject here. Congress tasked, as you well know, HUD with 
approving and overseeing the design and implementation of each 
State's--including my State of Alabama's--long-term housing 
recovery plan. I believe one reason for giving HUD this 
responsibility was to ensure that Federal resources went to 
those most in need. Do you agree with that?
    Mr. Cabrera. Oh, absolutely, Senator.
    Senator Shelby. OK. Could you share with the Committee here 
today, and what you do not have before you today, would you 
share for the record with me and the Committee, what 
requirements HUD placed on State plans in terms of targeting 
funds to those families most impacted, whether they are in a 
small city, a large city, a rural area, or what? Did HUD, in 
other words, include in its discussions with State governments 
the need to specifically address the problems of, for example, 
unincorporated and rural areas, such as Mobile County, 
Alabama--which is a large county, but you have the city of 
Mobile, you have a number of other cities. You have the town of 
Bayou la Batre. But a lot of people in those areas that were 
heavily impacted have not been--their needs have not been 
addressed. I met with some of them this morning, and we are 
looking for fairness in the distribution of the program. Go 
ahead, sir.
    Mr. Cabrera. Senator, I am going to ask to be indulged, if 
the Chair would allow, to have someone from CPD speak more 
specifically to your issue.
    Senator Shelby. That would be good.
    Mr. Cabrera. Before I do, though, I would like to 
distinguish a couple of things.
    The first one is Alabama received two different tranches of 
CDBG, one in 2004 and one in 2005. And in that sense, in the 
2004 tranche, Alabama and Florida were kindred spirits because 
we were in the same tranche, and my good friend Bob Strickland, 
who runs Alabama Housing, we had a lot of chats about what it 
is we would need from that. And the thing that I think defined 
both is providing the State with the necessary flexibility to 
define for itself what it needs, and that is articulated on the 
consolidated plan of the State.
    Now, that is where I will end my part of the answer only 
because I have no further knowledge. So I am going to ask Bob 
to come up----
    Senator Shelby. Have him come up. But you do have an 
interest in implementing and overseeing that these plans are 
carried out fairly, do you not?
    Mr. Cabrera. The plans submitted by the various States are 
essentially accepted pursuant to the parameter provided in the 
Act.
    Senator Shelby. Absolutely.
    Mr. Cabrera. And, thereafter, I would say this: that in 
most cases and in most States, what you will see is that the 
entitlement areas are provided some particular latitude just 
because of size, and the non-entitlement areas are treated 
differently, and mostly through State devices because they are 
smaller. And by that I am alluding to your issue that you 
raised, rightfully, the issue of capacity.
    Senator Shelby. Also fairness.
    Mr. Cabrera. And fairness, but that, again, would be a 
determination of the States and its prerogative. So I respect 
the issue you raise, but I would like Bob to--Bob knows more 
than me.
    Senator Shelby. Let him address it.
    Mr. Duncan. Hi, my name is Robert Duncan. I am Grant 
Coordinator for Gulf Coast Recovery for CPD.
    Senator Shelby. And that includes my State of Alabama.
    Mr. Duncan. It sure does, and I have been to Bayou La Batre 
four times.
    Senator Shelby. What about some other areas?
    Mr. Duncan. I have been all through----
    Senator Shelby. There are some unincorporated areas that 
have been impacted by this and whose needs have not been 
addressed.
    Mr. Duncan. I spent 3 hours with the county building 
inspector driving through Mobile County looking at every 
damaged structure.
    Senator Shelby. OK. Go ahead.
    Mr. Duncan. A small point of clarification, and that is, 
HUD does not have disapproval authority of the plans submitted 
by the States. And our authority is limited to assuring that 
the broad requirements of the program are met, including 
overall benefit to low- and moderate-income people; and with 
the second supplemental that was passed, that 19 percent went 
for lower-income rental.
    The State of Alabama has received just under $100 million 
from the two supplementals: $20 million out of the first 
supplemental is for housing generally, and $4 million out of 
the second supplemental is for housing for renters.
    I know that the State has developed plans for Bayou La 
Batre and is doing housing projects in Bayou La Batre.
    Senator Shelby. We know that, but what about the other 
areas around there that are unmet and obviously overlooked, 
according to some constituents I met with?
    Mr. Duncan. When we get the plans, the plans are not so 
specific as to identify each potential recipient of the 
benefits. We approve broad-brush proposals, and if there is no 
discrimination--location is not necessarily a basis for 
discrimination, and so we are not talking about that type of 
compliance responsibility.
    Senator Shelby. But what I am talking about----
    Mr. Duncan. The State has ultimate responsibility for how 
it decides to allocate money.
    Senator Shelby. The State is running the program, the 
Governor's office and other State agencies.
    Mr. Duncan. That is correct.
    Senator Shelby. Now, how much money is left unexpended in 
this program for the State of Alabama right now?
    Mr. Duncan. Right now the unexpended balance is about $86 
million.
    Senator Shelby. $86 million. So they have some money in the 
States. Is this money that is obligated and unexpended, or is 
it----
    Mr. Duncan. It is obligated from HUD to the State but not--
--
    Senator Shelby. From the State to a specific----
    Mr. Duncan. Identified for particular program areas, but 
not necessarily obligated or expended.
    Senator Shelby. So the State will expend this $86 million 
you are talking about.
    Mr. Duncan. That is correct.
    Senator Shelby. And so these unmet needs, the people--and 
some of them are in this room today--should, and we will help, 
get in touch with the State, who is administering this program, 
to try their best to make sure they are not overlooked and 
unfairly treated. Is that fair?
    Mr. Duncan. That is correct. The State has only spent $4 
million out of the $20 million originally set aside for housing 
out of the first supplemental. They have spent none of the 
money for the renters. That does not mean that they have not 
proceeded with projects, but they have not expended the money.
    Senator Shelby. OK. So you think there is money to be spent 
in an area that could be overlooked.
    Mr. Duncan. It appears that there is money available, but I 
am not in a position to say that I know the program is designed 
to provide grants to those individuals.
    Senator Shelby. We will find out about that.
    Thank you, Mr. Chairman.
    Senator Reed. Thank you very much.
    Senator Menendez.
    Senator Menendez. Thank you, Mr. Chairman.
    Mr. Secretary, let me ask you a couple questions. First of 
all, this summer, 82,000 people were still in trailers--
trailers that in many instances had formaldehyde, a toxic 
chemical. I saw in a HUD press release that beginning in 
January of next year, HUD is going to work with FEMA, 
supposedly, to transition eligible families out of these 
trailers and into rental housing in the private market.
    Two questions. One, what is that program going to look 
like? And, two, why wait until January when we have people 
languishing in trailers that they should not be in?
    Mr. Cabrera. The trailer issue overall is an issue outside 
of my bandwidth. That is a FEMA issue, so forgive my inability 
to answer that question.
    Senator Menendez. But I have a HUD release here----
    Mr. Cabrera. Senator, I am trying to go to the rest of it.
    Senator Menendez. OK.
    Mr. Cabrera. Which is the transitioning of people in 
trailers out of trailers. So if you have broad categories of 
population, what HUD was doing with respect to both the KDHAP 
program, the Katrina Disaster Housing Assistance Program, and 
the Disaster Voucher Program was essentially serve those people 
who were being served by HUD as Congress denoted, so, just 
roughly speaking, public housing, Section 8, Section 202. So 
that has gone on for some time.
    Now, FEMA and HUD have entered into an interagency 
agreement. That happened within the last month, as I recall, 
and in that agreement, it has to dovetail with the 
Appropriations Act. The ability to convert from the Disaster 
Relief Fund into basically the Disaster Housing Assistance 
Program--which will be still funded by the Disaster Relief Fund 
but administered by HUD--will take time because there is an 
entire population of people who are being brought into the 
program who are not served by HUD and were not served by HUD 
prior to the hurricane. Those folks are largely in trailers, 
and those trailers, I think the mission would be to move them 
out of trailers and find them housing wherever they can.
    What are the tools we are using? Well, soon after the 
hurricane, one of the things that we did was we created 
something called the National Housing Locator, and the locator 
essentially is a broad data base that allows people to find 
housing wherever they can. The challenge will be, frankly, 
candidly, that in many cases--and this is mostly in 
Mississippi. In many cases, those trailers exist where people 
work and where they want to maintain their lives. But there is 
inadequate housing there, and that is really where our struggle 
is going--that is really where the rubber is going to hit the 
road for us.
    Senator Menendez. Well, I have to be honest with you. I 
appreciate your answer, but if I was languishing in one of 
those trailers, having listened to your answer, it seems to me 
that our Government is failing those people, whether it is at 
the FEMA end or the ability to move earlier on the HUD end to 
wait for a process. We have had a lot of supplementals, 
appropriations, we have continuing resolutions coming up. It 
seems to me we should not have to wait for people to have 
whatever it is that you need to have the wherewithal to move 
them out. It is unacceptable that we have fellow Americans 
living in trailers that have toxic chemicals in them and that 
we find that acceptable as a country. It is unacceptable.
    Let me ask you this: We had 7,300 public housing units in 
New Orleans; 5,100 of them were occupied before the hurricane; 
less than 2,000 are now rented. Now, in addition to that, from 
my understanding of your testimony and from what HUD has put 
out there, there is not going to be--you are going to demolish 
four large public housing developments and rebuild them with 
mixed-income housing, eventually fewer public housing units. So 
I look at this, and I say to myself--and I also heard you--did 
you not say in your opening statement that HUD has reached out 
for displaced residents across the landscape of the country to 
say if you want to come back, we want to help you do that?
    Mr. Cabrera. Constantly.
    Senator Menendez. Well, if I am a displaced resident in New 
Jersey--in Perth Amboy, New Jersey, where many of them ended 
up--and I want to go back to New Orleans, and I hear 82,000 are 
in trailers, I hear that only 2,000 of the 5,000 units that 
were existing before are rentable, I hear that HUD is going to 
demolish four of the major public housing projects and replace 
them with far less units, how do I think--I mean, these people 
are not stupid. How do they think that, in fact, you are going 
to be able to--that your offer is not hollow? Because at the 
end of the day, where do the units add up?
    Mr. Cabrera. Well, one reason that they would think that 
they are not hollow is because 400 of them are vacant as we sit 
here today, and we have been trying to get people into them. 
And they will not come home, and that if after going----
    Senator Menendez. Then why are we waiting----
    Mr. Cabrera. Senator, if I might finish----
    Senator Menendez. Then why are we waiting--I am happy to 
let you finish, but let me ask you----
    Mr. Cabrera. After trying to pay for their social----
    Senator Menendez. Mr. Secretary? Mr. Secretary?
    Mr. Cabrera [continuing].--Relocating them, paying off 
their leases, they will not----
    Senator Menendez. Mr. Secretary, I get to ask the 
questions. You get to answer them.
    Mr. Cabrera. I am trying to answer.
    Senator Menendez. OK, but let me just give you the follow-
up question to it, because you took a long time in your first 
answer. Of the 82,000 people in trailers, you are going to tell 
me there is not a fair number of those who would qualify to put 
them in those units that you say right now----
    Mr. Cabrera. The folks in trailers are folks who do not 
qualify for HUD assistance. That is what I was trying to----
    Senator Menendez. You have determined all of them do not 
qualify for HUD assistance?
    Mr. Cabrera. According to----
    Senator Menendez. If I would go to New Orleans and talk to 
those 82,000 people, I would find that none of them would 
qualify for your assistance?
    Mr. Cabrera. According to data that FEMA has, those people 
do not qualify for Federal assistance. That was the distinction 
between the two programs.
    What we have done at HUD is taken on a program that 
essentially is serving folks who HUD would typically not serve. 
That is who is in those trailers. Those are folks who were 
either above income or uninsured, or folks who were above 
income and insured but inadequately insured. There are any 
number of categories that fit from a demographic into those 
82,000, but the one distinguishing characteristic is they do 
not qualify----
    Senator Menendez. How do you reconcile the rise of 
homelessness in New Orleans with your units being vacant in 
public housing? Explain that to me.
    Mr. Cabrera. Senator, I cannot. I do not--I cannot----
    Senator Menendez. Well, those people would qualify for 
public housing, would they not?
    Mr. Cabrera. Well, I think that the reason that I cannot do 
it is because I do not know enough about the issue of 
homelessness in New Orleans as I sit here today, post-storm, 
with everything going on. So I cannot answer the question 
honestly.
    Senator Menendez. Well, it seems to me that we need Senator 
Landrieu's legislation.
    Thank you, Mr. Chairman.
    Senator Reed. Thank you, Senator Menendez.
    Senator Landrieu.
    Senator Landrieu. Thank you so much.
    I would like to focus again on the bill before us, the 
subject of this hearing. Mr. Secretary, do you all support this 
bill? And if so, why do you support it? And if not, why not, 
specifically? What sections are you not supporting?
    Mr. Cabrera. Senator Landrieu, there are parts of the bill 
that we do support. There are parts of the bill that we 
absolutely do not. And the parts----
    Senator Landrieu. OK. Could you please elaborate the parts 
that you do support?
    Mr. Cabrera. The issues that most cause angst have to do 
with----
    Senator Landrieu. No. I am talking about what you do 
support.
    Mr. Cabrera. You know, I think I am going to do what I did 
before and allow Dominique Blom to come up and speak to that 
issue. But what we do support most generally is anything that 
would facilitate reconstruction of housing generally.
    Senator Landrieu. Because I am under the impression, given 
the testimony that Secretary Jackson has given to me--and I am 
extremely disappointed he could not be here to represent the 
Department this morning--that HUD is supporting the bill, that 
HUD supported the bill when it moved out of the House and that 
HUD is supporting this bill. So if you all are not, we would 
like to have a specific letter from you all about what you are 
not supporting.
    But, again, let's hear the testimony. What do you support 
in the bill and specifically what you do not and why?
    Mr. Cabrera. Senator, may I have a moment very quickly?
    [Pause.]
    Senator, I am going to have a response to you on the 
official on support or non-support. I know that we do not 
support the bill. I am trying to get clarity in terms of our 
own facts. But the thing----
    Senator Landrieu. But the reason this is disturbing to me--
and I hope the panel can understand, and I am going to try to 
be patient. This gentleman is the Assistant Secretary of HUD. 
He is in charge of public housing. If he does not know why or 
why not he is supporting this bill, why he has to ask for 
staff, you can see how far we have to go. Now let me just----
    Mr. Cabrera. No, Senator Landrieu. I am trying to figure 
out----
    Senator Landrieu. Hold on. Let me just say one----
    Mr. Cabrera [continuing].--If you have received the views 
letter. That is all I am trying to find out.
    Senator Landrieu. I am operating for a year and a half--a 
year and a half operating--with the Congressmen on both sides 
of the aisle. This is not just a Democratic bill. This came out 
of the House with broad bipartisan support, Republicans and 
Democrats, with the idea that HUD was supporting our efforts. 
Now to be told, A, you do not know or no is not----
    Mr. Cabrera. No, Senator. I did not say I did not know. As 
I noted, I was trying to get you an answer with respect to 
whether we have articulated why we do not support the bill. If 
you will give me just a moment, the person who can answer that 
question for me is behind me.
    Senator Landrieu. Please.
    Mr. Cabrera. A views letter has been prepared that is 
supposed to have been issued. It will be issued, evidently, as 
I understand it, tomorrow. I can tell you preliminarily what it 
is that causes us consternation in the bill.
    The first issue and the foremost issue is the issue of one-
to-one replacement. One-to-one replacement of public housing is 
both--it seems to us to be contrary to what has been the 
legislative intent of public housing for a while, but it seems 
to us to limit the ability to build affordable housing in a way 
that----
    Senator Landrieu. OK. I understand. I do not mean to 
interrupt you. But, Mr. Chairman, this is important. There is a 
one-to-one housing requirement for 5,000 units. But let me 
repeat the facts. There were 7,000 units before the storm, 
2,000 were vacant, and there were 7,000 people on a waiting 
list. So the compromise for a one-to-one replacement of 5,000 
we think is a generous compromise.
    Mr. Cabrera. There----
    Senator Landrieu. First of all--let me finish. We are not 
asking for one-to-one compromise for 14,000 units, which you 
might argue 5,000 were there, 2,000 were vacant, 7,000. So just 
add the 5,000 and the 7,000 is 13,000.
    Mr. Cabrera. Right.
    Senator Landrieu. We could in this bill have a 13,000-unit 
requirement for one to one, but we are trying to find a middle 
road and get enough units back for people, because it is 
workforce housing as well. All low-income people are not 
disabled and unable to work. Many of them are working. Many. 
And our restaurants and businesses need people.
    So I am perplexed and I think that Congresswoman Waters and 
Congressman Baker and Congressman Jefferson will be very 
perplexed, after a year and a half, to think that you all are 
not supporting this bill.
    Let me just clarify----
    Mr. Cabrera. Well, I am trying to----
    Senator Landrieu. Hold on. One more----
    Mr. Cabrera [continuing]. Tell you what I support----
    Senator Landrieu. I just want to clarify one more thing. 
This letter that came out yesterday says that absent the 
disposition approval granted by HUD, these projects would not 
be able to meet the LHFA carryover requirement. I am going to 
put this in the record. And this is the reason that you are 
using for going ahead with the demolition--not permit, but the 
movement toward demolition.
    I want to say for the record, Mr. Chairman and Mr. Ranking 
Member, the LHFA wants me to say this, Louisiana Housing 
Finance Agency: They are not requiring you to move. You are 
moving on your own volition. And I am going to put this in the 
record. They disagree strongly with you saying that you are 
moving because of them.
    Number two, for the record, you say that you have to move 
forward because we do not have an extension of the tax credits, 
but you have not requested of this Committee, which is your 
authorizing Committee, you have not requested of your 
Appropriations Committee, which I sit on, any extension.
    So I just want to state for the record that no one in 
Louisiana is pushing you to do this, that you are doing it on 
your own, and I am actually shocked that after a year and a 
half you all are not even supporting the compromise bill. And I 
have more questions, but I do not want to take up any more 
time.
    Thank you, Mr. Chairman.
    Mr. Cabrera. Mr. Chairman, may I answer?
    Senator Reed. Yes, you may.
    Mr. Cabrera. OK. First of all, the elements of the bill 
that we support are: We support the idea of surveying the 
residents. We think that that is a terrific idea.
    We support the idea of replacing 5,100 units with 
affordable units. The issue is what is going to be the nature 
of trying to operate those units after they are constructed.
    We support the idea of 3,000 vouchers which would otherwise 
be issued.
    And the last issue is I think one of the things that is 
somewhat misunderstood is the process of HANO moving toward 
getting a demolition and disposition permit began 18 months 
ago. I can tell you just personally, I had no earthly clue that 
the court would render a decision last week. And, in fact, I 
was in Washington State when it happened. So that is something 
that happens as a matter of course.
    When we issued it--this is not an issue of an extension. 
There are issues that we could bring to this Committee for 
extension, but we cannot bring to this Committee issues of 
extension when we are trying to preserve into HANO's baseline 
the capacity to issue another $30 million worth of vouchers 
going forward. That is really what we were trying to 
accomplish.
    So while I respect, Senator, that you have issues with the 
way that we have proceeded, the one thing you need to know is 
this--you know, I cannot help happenstance. This was going to 
be issued on Friday because it was going to be issued on 
Friday.
    Senator Reed. Mr. Secretary, I can anticipate the written 
questions directed to you, and we hope you respond because I 
think the line of questioning has exposed more questions than 
answers, and we will continue this discussion.
    Senator Shelby.
    Senator Shelby. I just want to continue to focus on my 
State of Alabama for just a minute.
    Mr. Cabrera. Yes, sir.
    Senator Shelby. We all know that Louisiana has taken a 
tremendous hit. We know Mississippi has. And we have in the 
southern part of Mobile County taken a hit, as you well know. 
And my interest, parochial interest, is in Alabama, although I 
want to help where I can to rebuild what we can in a prudent 
manner--in a prudent manner--in New Orleans and the Louisiana 
area, too. But I hope we will not send money down the drain in 
Louisiana, Mississippi, Alabama, Florida, or anywhere, because 
I recognize your responsibility at HUD and I think you have an 
overall responsibility to the taxpayers, to the people. And we 
want to make sure that all this is done fairly.
    Mr. Cabrera. Thank you, Senator.
    Senator Shelby. Thank you, Mr. Chairman.
    Senator Reed. Well, I join the Ranking Member in his wish 
that we do things fairly, but it strikes me from listening--I 
am going to get more engrossed in the details--that the numbers 
just do not seem to add up. The number of units you are 
proposing to replace are much less than the number of people 
that are out there, not just in public housing, but on waiting 
lists to get in public housing. And I appreciate your 
testimony, and we will continue the inquiry by written 
questions, Mr. Secretary. Thank you very much.
    Mr. Cabrera. Thank you, Senator.
    Senator Reed. Now let me call forward the next panel. We 
thank them for traveling from Louisiana and Mississippi to be 
with us here today. We certainly appreciate their testimony.
    Senator Landrieu. Mr. Chairman, as they are assembling, can 
I just also thank them? I am going to stay as long as I can for 
the testimony, but each of these individuals has worked 
tirelessly representing many, many people and constituency 
groups, trying to help come to terms with how we would move in 
a positive direction to redevelop, to rebuild, to provide 
better housing for people, and to help, you know, our 
constituents. And I just want to thank them, and I hope maybe 
they can shed some light on the benefits of this bill and what 
it will do to help.
    Senator Reed. Well, thank you very much, Senator Landrieu, 
and let me quickly introduce the panel and make a couple of 
administrative announcements and then ask them for their 
comments.
    We are joined this morning by Amy Liu, who is the Deputy 
Director of the Metropolitan Policy Program at the Brookings 
Institution. We are joined by James Kelly, who is the CEO of 
Providence Community Housing and Catholic Charities. We are 
also joined by James Perry, the Executive Director of the 
Greater New Orleans Fair Housing Action Center; Mr. Alan Brown, 
who is Vice President of Operations and COO of the United 
Methodist Senior Services of Mississippi; Emelda Paul, 
President of the Lafitte Resident Council; and Mr. Edgar 
Bright, who is President of the Standard Mortgage Corporation, 
representing the Mortgage Bankers Association.
    Before hearing your testimony, we have a number of written 
statements that have been submitted by others. I want to make 
sure they are part of the record. Your statements will all be 
made part of the record, so you do not have to read them. I 
want to urge the panelists to stay within the 4-minute 
boundary. We have a large panel, and we want to leave time for 
questions.
    Again, thank you very much for joining us. The record will 
remain open for at least one week, so you may get additional 
written questions from the panel or any Members of the Banking 
Committee. And now I will recognize you, Mr. Perry, for your 
comments. Mr. Perry, please.

   STATEMENT OF JAMES PERRY, EXECUTIVE DIRECTOR, GREATER NEW 
               ORLEANS FAIR HOUSING ACTION CENTER

    Mr. Perry. Thank you very much.
    Senator Reed, Ranking Member Shelby, and members of the 
Committee, thank you for the opportunity to testify on the 
impact of Senate Bill 1668. I am James Perry, Executive 
Director of the Greater New Orleans Fair Housing Action Center. 
I am also President of the Louisiana Housing Alliance, a 
Statewide coalition of more than 100 housing organizations. I 
am here today to testify on behalf of the National Low Income 
Housing Coalition.
    My full testimony, of course, has been provided to you. But 
I want to touch upon a few facts and issues that provide why 
this bill is so important to the Gulf Coast States. The first 
is simply about public housing. We simply do not have enough 
affordable housing in New Orleans, in Mississippi, in 
Louisiana, and along the Gulf Coast. If left to its own 
devices, as you have seen from HUD's testimony, they simply 
would not provide enough affordable housing for our residents.
    I want to touch briefly on the Assistant Secretary's 
comment that FEMA trailer residents would not qualify for 
public housing. Well, our stats show that about 20 percent of 
FEMA trailer residents would qualify for public housing. And so 
when he says that he cannot find people, we think that he is, 
frankly, wrong.
    The second issue is that when it comes to public housing in 
New Orleans, as has already been noted by Senator Landrieu, we 
had a huge need for more public housing before the storm. And 
HUD comes forward after the storm and says we are going to 
demolish all of the public housing in spite of this.
    Well, we need more public housing now.
    The goal of replacing one-for-one of the public housing 
units that existed in the city before the storm is impeccable. 
It is so important. It is essential to make sure that the city 
is able to come back and to return to its prior status and to 
exceed that prior status that once existed.
    The second thing that I want to comment on are the fair 
housing provisions in the bill. We applaud the inclusion of 
these provisions in the bill. Since the storm, our organization 
has done a few investigations into housing discrimination in 
the metropolitan area.
    When we investigated housing discrimination against 
African-Americans, we found that African-Americans experienced 
discrimination in 57.5 percent of their transactions. 57.5 
percent of the time that they would attempt to find housing 
they would be denied because of their race.
    In one investigation we found discriminatory advertisements 
on the Internet. Two examples of those ads: ``I would love to 
house a single mom with one child. I am not racist, but whites 
only.'' Another ad read ``Not to sound racist, but to make 
things more understandable for our younger children, we would 
like to house white children.''
    The issue of housing discrimination presents a huge problem 
when we attempt to rebuild housing opportunities for people in 
the Gulf Coast. The Greater New Orleans Fair Housing Action 
Center, the Mississippi Fair Housing Center, the Houston Fair 
Housing Center, and the Mobile Fair Housing Center have been on 
the front of ensuring fair and equitable housing opportunities 
in the Gulf Coast but we need your help and Senate Bill 1668 
will provide that assistance.
    And then finally, with regard to the Road Home program, the 
program, of course, is not perfect. And there has been a lot of 
debate about whose fault or what has caused the shortfall in 
the amount of money necessary to get homeowners back into 
housing. But what I would submit to you is that it does not 
really matter whose fault it is. The bottom line issue is that 
we need enough money to get homeowners back into their houses.
    Senate Bill 1668 goes a long way in making sure that people 
can get back into their houses through the Road Home program, 
through provision of one-for-one replacement in public housing, 
through the provision of vouchers, and through the protection 
of fair housing rights.
    We urge you to move forward on this bill.
    Thank you very much.
    Senator Reed. Thank you very much, Mr. Perry.
    Mr. Brown, please. Welcome.

STATEMENT OF ALAN BROWN, VICE PRESIDENT OF OPERATIONS AND COO, 
     UNITED METHODIST SENIOR SERVICES OF MISSISSIPPI, INC.

    Mr. Brown. Thank you, Senator Reed, Ranking Member Shelby, 
members of the Committee. I am Alan Brown, the Chief Operating 
Officer of Mississippi Methodist Senior Services.
    We have 11 campuses across the State of Mississippi, 
serving 1,800 seniors on a daily basis. Our organization has 
been serving seniors for over 40 years and we were the first in 
the State of Mississippi to offer HUD housing for seniors.
    We are also a member of the American Association of Homes 
and Services for the Aging, a 5,700 member association 
representing not-for-profit providers throughout the world of 
senior care.
    On August 29th, 2005, five of our campuses were damaged by 
Hurricane Katrina, none more so than our Seashore Retirement 
Community in Biloxi. That campus consisted of 124 market rate 
apartments, 42 assisted living units, a 65-unit HUD 202 project 
with project-based Section 8 rent subsidies.
    Our HUD building, Gulf Oaks, sustained significant wind 
damage, as well as a tidal surge of two feet on the first 
floor. 55 residents refused to leave the campus and rode out 
the storm with the campus executive director, who would not 
leave them. We were able to evacuate them 2 days later and 
provide housing on other campuses in North Mississippi.
    We had good insurance, but there was still a $1 million gap 
between our insurance proceeds and what was needed to repair 
the building. We contacted HUD and asked for help. We were told 
HUD would not loan the property any more money for repairs. HUD 
would not allow us to borrow money from other sources. HUD 
would not forgive the existing debt. And HUD would not allow us 
to prepay the Section 202 mortgage. In a sense, we were stuck.
    Our FEMA request for help was denied because were deemed a 
nonessential service. We contacted AAHSA for help and learned 
of a provision in the 2006 appropriations legislation, Section 
318, which allowed for the relocation of Section 8 contracts 
from nonviable damaged HUD buildings. We thought this was 
tailor-made for us. On March 31st, 2006 we notified the 
Mississippi HUD office that we would be requesting a Section 
318 transfer and provided them the preliminary information.
    About this time, we received an unsolicited offer from a 
local developer to purchase the entire campus and accepted, 
contingent upon our being able to get a HUD release of the 
property. This would allow us to have the funds to relocate the 
entire campus off the coast to a safer area and rebuild the HUD 
building at no additional cost to HUD.
    On July 5th, 2006 we submitted our formal Section 318 
request and asked HUD about how to begin. Weeks passed and we 
got no response from HUD. Once we inquired and were told they 
were not sure whose desk it was on. Senator Thad Cochran's 
staff and AAHSA intervened and made repeated inquiries to HUD 
on our behalf and were assured it was in process.
    On October 2nd, 2006, almost 3 months after the formal 
request, we received a letter from HUD saying our Section 318 
had been denied. We were given a list of things that would have 
to be done for the request to be considered. These items had 
never been communicated to us before or were not economically 
feasible or could not be encompassed for many months. We were 
in jeopardy of losing the sale of the entire property and our 
business interruption coverage was exhausted.
    But we wanted to make one last effort to try to save the 65 
subsidized housing units. We learned that we had a pre-1984 HUD 
202 contract that could actually be prepaid with 30 days' 
notice and without HUD approval. We asked HUD for approval to 
transfer the Section 8 rent subsidies to a new building. They 
called us back the next day and said that could be done. As we 
got closer to the sale, we asked HUD about how we completed 
that process. They said they never agreed to that.
    HUD essentially forced us to give up our Section 8 contract 
to complete the sale of the campus. HUD had done what the 
hurricane had not able to do, permanently displace those 
residents that had ridden out the storm in their homes.
    We asked today for your support of Senate Bill 1668. There 
are several provisions within this legislation that would 
benefit seniors and the not-for-profit housing providers that 
serve them. Our residents and assisted housing providers will 
certainly fall victim to the same impenetrable barriers like 
confusing procedures, unclear goals, and ineffective policies 
when the next disaster strikes.
    In closing, I want you to know that Mississippi Methodist 
Senior Services remains committed to continuing our 40-year-old 
mission of serving older adults in the spirit of Christian love 
and providing housing to senior adults regardless of their 
financial standing.
    I sincerely appreciate the efforts of the Jackson, 
Mississippi HUD office and Senator Cochran's staff. And I want 
to thank you for giving me the opportunity to be here today and 
share our story.
    Senator Reed. Thank you very much, Mr. Brown.
    Mr. Kelly, please.

STATEMENT OF JAMES R. KELLY, CEO, PROVIDENCE COMMUNITY HOUSING 
                     AND CATHOLIC CHARITIES

    Mr. Kelly. I would like to thank Senator Reed, Ranking 
Member Shelby, Senator Landrieu, the members of the Committee 
for the opportunity to be here today.
    In the past 24 months Catholic Charities has delivered 120 
million pounds of food and water, provided counseling and 
information to half a million people, and through our emergency 
service centers, delivered millions of dollars in direct 
assistance to families in need.
    Shortly after the storm, a group of nonprofits came 
together to form Providence with the mission of bringing home 
20,000 victims of Katrina. In partnership with Catholic 
Charities and 13,000 volunteers, we have gutted and cleaned out 
1,100 homes and 800 apartments. Now we are assisting these low-
income seniors and people with disabilities to navigate a 
severely underfunded Road Home program. We often front the 
seniors the money for the essential and critical home repairs.
    Recently Providence and UJAMAA CDC, one of our community 
collaborators, finished renovating a flooded building and will 
soon welcome 43 displaced seniors back to their Treme 
community.
    Since the hurricane, we have been attempting to reopen 901 
HUD Section 202 apartments for low income seniors. 
Complications are 135 percent increase in construction, 
tripling in cost of insurance, and the requirement to finance 
the original owners' defaulted mortgage payments which date 
back to March 2006. As we spend an inordinate amount of time 
and effort working through these archaic policies, thousands of 
our seniors wait in trailers or in overpriced and overcrowded 
apartments wondering if they will get to return to their 
children and their grandchildren.
    Last summer Providence and Enterprise Community Partners 
were asked by HUD to oversee the redevelopment of the Lafitte 
public housing complex. From the very beginning, we have worked 
closely with the residents to plan a vibrant mixed-income 
community that is equitable, affordable, and sustainable. The 
cornerstone of our rebuilding effort began with the absolute 
opportunity for the 865 families to return as soon as possible, 
the one-for-one replacement of all 900 units, and critically 
needed resident participation in the home building and 
community service planning. In addition to the replacement of 
the 900 apartments, we will build 600 new homes for working 
families.
    We have also successfully advocated for phased 
redevelopment, the repair of temporary units for those who need 
to come home right now, while also along for the building of 
new homes and apartments on the remaining site. We have raised 
$2.5 million and are now offering former residents counseling, 
direct assistance, and case management in New Orleans, Baton 
Rouge, and Houston.
    We thank you for this sound legislation before us today. We 
are humbled that the principles that are the foundation of our 
Lafitte redevelopments plans are key components of the public 
housing section of the bill, most especially the replacement of 
public housing units and/or vouchers for residents.
    To ensure the success of these new vibrant mixed-income 
communities, we would ask you to increase the number of 
project-based onsite Section 8 vouchers and the funding for 
soft second home mortgages available to residents.
    With over 20,000 severely damaged homes and apartments, we 
are grateful that the legislation also assists our working and 
middle-class families. We are delighted that the bill addresses 
the need for full funding the Road Home program, provides 4,500 
permanent and supportive housing vouchers for the disabled and 
the homeless, and extends disaster vouchers through June of 
2008.
    We expect the rebuilding to take 10 years, the 300th 
anniversary of New Orleans. We sincerely appreciate all of the 
resources Congress and the Administration have provided. In the 
future, however, we will need more Go Zone tax credits, 
additional funding for soft seconds, and last timeline 
extensions due to the complexities of mixing Federal, State, 
and local funds and regulations into one gigantic gumbo.
    Katrina has taught us that to be successful will take a 
spirit of humility and collaboration. We pray for God's grace 
and God's speed in the passing of this legislation.
    Please know of our prayers of gratitude to this Committee, 
to Senator Landrieu, and to its staff for all you have done and 
will do to bring home the good and brave people of Louisiana 
and the Gulf Coast.
    Thank you.
    Senator Reed. Thank you, Mr. Kelly.
    Ms. Paul, please.

 STATEMENT OF EMELDA PAUL, PRESIDENT, LAFITTE RESIDENT COUNCIL

    Ms. Paul. Thank you for the opportunity to speak to you 
today. My name is Emelda Paul. I was a 30-year resident at the 
Lafitte and I am the President of the Lafitte Resident Council.
    I am here because I want our people, our families, to 
return home to New Orleans. I want to thank Congress for 
creating this legislation, which will improve our housing and 
make our community better. We cannot wait any longer. The 
longer the situation drags out, the harder it will be for our 
people to come home.
    To make Lafitte a stronger community and a better place, I 
believe that there are several commitments that must be made. 
Every resident should be able to come home. Every unit that was 
taken down should be replaced with a unit that would be 
affordable to the residents. Counseling should be available to 
those who need it. And most importantly, redevelopment groups 
should work with the residents, like Providence has with us 
from the very beginning. They have listened to our needs and 
asked questions, like how many bedrooms do we need? What kind 
of assistance or help do we need? Do we need child care, job 
counseling, or supportive services?
    When I see and hear some of these people who are fighting 
the redevelopment, I ask myself who the heck are these people? 
And where were they when we really needed them? They are saying 
we should save the buildings. They are talking about bricks and 
mortar. We are talking about people's lives. We are the ones 
who have to live there under these conditions. I cannot say for 
sure how many, but I can say there are a lot of people who 
think like me who want something better than what they had.
    I have been back to Lafitte, and from what I have seen I do 
not want to go back there anymore. I do not want to live like 
that anymore. I am living in the new Fischer Senior Village in 
New Orleans now. It is nice, clean, and safe. When I go from my 
apartment at Fisher to see my old apartment at Lafitte, it is 
very depressing. When you get up close to the building you see 
that the ground is sinking. I had mold in my bedroom way before 
Katrina. And now I have mold growing up the walls on both 
sides. If people are going to come back, I want to see them 
coming back to something decent, something healthy, and 
something safe. I took photos of the flooding and what I saw 
from the window of my apartment after Katrina.
    People are under a lot of stress and want to come home. 
They want to come home to a new Lafitte with new apartments and 
new homes. They want something better for their families. So 
why can't we allow those who want to come home to come home now 
and also take down and rebuild the site in the meantime? While 
we are sitting here bickering about what should be done, the 
people are the ones who are suffering. Some of them are dying.
    I think there are about 200 to 250 individuals, families, 
who want to come back right now. And probably 100 to 200 would 
want to come back in a couple of years because they are happy 
where they are living now. They have a decent apartment, their 
kids are in school, they have jobs and medical care where they 
are. They have to give something to come back to that is better 
than before, something that includes an emphasis on children 
like good schools, safe places to play, and medical care.
    I like the idea of phasing and I know that more and more 
people are excited about it. People can come home in apartments 
temporarily and participate in the planning of the 
redevelopment. We want new larger apartments for our children 
and our grandchildren where we can move around.
    People want to come home but we cannot have people living 
in the same condition they were living in before Katrina. We 
need and want up to date kitchen and bathrooms. We are tired of 
the patch jobs on the buildings from the 1940's. If we bring 
people back, we want to make sure they have a safe environment. 
We want a new Jerusalem. The time is now. We have got to bring 
our residents home and build something better here for our 
children and grandchildren.
    Thank you.
    Senator Reed. Thank you very much, Ms. Paul.
    Ms. Liu.

   STATEMENT OF AMY LIU, DEPUTY DIRECTOR OF THE METROPOLITAN 
           POLICY PROGRAM, THE BROOKINGS INSTITUTION

    Ms. Liu. Good morning, Chairman, members of the Committee. 
I am pleased to be here before you this morning and pretty much 
appreciate your invitation.
    The purpose of my testimony is to provide an overview of 
the state of recovery of Greater New Orleans since Hurricane 
Katrina. The overview draws a wide array of data that we at 
Brookings have been collecting since the storm in 2005.
    I apologize, Senator Shelby, I do not have data on the 
State of Alabama.
    But my hope is that this basic baseline picture will give 
you important context as you consider legislation to provide 
affordable housing in the region and any future legislation 
aimed to improve the future of the Gulf Coast.
    So here is what we know about who lives in New Orleans, who 
has yet to move back, and the extent of the housing market 2 
years after Katrina.
    First, how many people are back in the city? Two years 
after the storm, the best and most reliable population 
estimates indicate that the city of New Orleans has recovered 
68 percent of its pre-storm households, which is a big jump 
from about a year ago when just half of the residents had 
returned.
    However, the city now makes up less than one-third of the 
region's population. So that means there is enormous growth and 
shift out to the suburbs. Post-Katrina, almost all of the 
surrounding parishes, except for St. Bernard, have reached or 
exceeded the number of households they had before the storm.
    Second, who is living in the city now? The latest detail 
that we have on the details of who is living in New Orleans is 
for 2006, which is 1 year after Hurricane Katrina but I think 
the data is still revealing. The population living in New 
Orleans is now more educated, it is less poor by 6 percentage 
points less poor, and it consists of fewer renters than in 
2000.
    Further, there are dramatically fewer households with 
children today. That share has dropped from 30 percent before 
the storm to just 17 percent today.
    Yes, the city is also more white but the city remains a 
majority black community. Approximately 58 percent of the 
city's population is still African-American.
    Third, who has yet to return to the city? Approximately 
197,000 residents remain displaced or have not returned to New 
Orleans 1 year after Katrina. Of these displaced, 70 percent 
are African-American and 38 percent live below poverty. So many 
of these low income African-American families remain widely 
dispersed across the Nation. The Census data does confirm that 
in 2006 many former black and lower income New Orleanians were 
still most likely to still live in Houston, Dallas, the Atlanta 
metropolitan areas, and other parts of the South in the U.S. In 
contrast, former white and wealthier households mostly stayed 
nearby, mostly relocated somewhere else in New Orleans area.
    Fourth, on housing, the main concern here is that the cost 
of housing and rent levels have escalated 2 years after 
Katrina. Home prices have definitely jumped up in St. Tammany 
and Jefferson Parishes and the less impacted parts of New 
Orleans. Fair market rents in the region have risen an 
astounding 45 percent in the last 2 years. And meanwhile, the 
demand for housing assistance remains high. We have talked 
about that today. 180,000 households, for instance, have 
applied for the Road Home program and as of August only 22 
percent of those have been served.
    Fifth, I just want to say on the economy the New Orleans 
region has recovered the vast majority of its job base and 
labor force. But the real challenge there is that for two key 
sectors, health and education and leisure and hospitality, they 
are still missing one-quarter the pre-Katrina workers which is 
making it hard to recover the schools, the health care 
services, and the level of tourism.
    In closing, what I want to do is point to just some of the 
implications of these trends for Federal housing and other 
efforts. First, I think the strategies to boost the supply of 
affordable housing are still critical to help soften home and 
rent prices, and that is why the Senate bill is so critical.
    On the private sector side, I do want to say that the data 
shows that just one-quarter of the new housing units that are 
being built in the New Orleans region is dedicated multifamily 
housing. So with very new hard units, one other thing the 
Federal Government can do is to aggressively recruit existing 
apartment owners to accept Federal housing vouchers. One of the 
things we have to realize is giving families a voucher does not 
guarantee them housing.
    Second, Federal leaders should consider making affordable 
housing available not just in the city but also in the job 
centers in the suburbs. Much of the data again point to the 
explosive population growth and job growth in the suburbs, and 
as well an increasing number of low-income families and 
Hispanics that are now emerging there.
    Third, given the many low-income African-American families 
that are still in the diaspora, we must not forget them. We 
must give them affordable housing options and perhaps 
affordable housing in those far-flung destinations.
    I want to close with the fact that it is clear that a 
strong Federal, State and local partnership is still very much 
due to address the outstanding challenges in the Gulf Coast. I 
want to say that future recovery efforts must go beyond just 
the focus on speed, which tends to be the conversation. We need 
to focus on the quality of recovery.
    Prior to the storm, New Orleans was plagued with high 
concentrations of poverty, a stagnant economy with a weak 
workforce, and a region that was growing in unsustainable ways. 
No doubt the city has enormous assets. But future Federal 
investment and taxpayer dollars must not rebuild the exact same 
city and metropolitan area. It must rebuild a greater New 
Orleans that rebounds from Katrina as a better version of 
itself: safer, economically robust, with mixed-income 
neighborhoods and opportunities for all residents.
    So once again, thank you for the opportunity to appear 
before you today.
    Senator Reed. Thank you, Ms. Liu.
    Mr. Bright, please.

    STATEMENT OF EDGAR BRIGHT, PRESIDENT, STANDARD MORTGAGE 
                          CORPORATION

    Mr. Bright. Thank you, Senator Reed, and Ranking Member 
Shelby, and Senator Landrieu and Congressman Jefferson, for 
inviting me to testify today on behalf of the Mortgage Bankers 
Association on some of the challenges we still face in 
Louisiana two years after Hurricanes Katrina and Rita.
    I would like to relate to you my personal story as a 
lifelong resident of New Orleans and a business owner in that 
great city. After the storm our homes and our headquarters were 
flooded. This is a picture. My house was two blocks behind that 
pearow and the school where my three kids attend was one block 
to the right of where that pearow is. And that was one week 
after the storm.
    After the storm our homes and our headquarters were flooded 
and we could not return to our building for six weeks. We moved 
temporarily to Baton Rouge while some of my staff pulled all 
essential data and files from our headquarters. We instituted 
forbearance for payments on all loans in the Katrina area. This 
caused major capital shortage for us. We borrowed significant 
funds to make investor payments and meet payroll. We also made 
sure our customers had access to their loan and insurance 
information and reassigned 75 percent of our staff to process 
the paperwork.
    The industry and our regulators also responded. The entire 
industry instituted broad forbearance and began to try to 
contact customers who had been evacuated and were now across 
the country. The mortgage industry created a working group made 
up of lenders, servicers and their trade associations to help 
work on public and private sector problems and solutions. An 
industry practice was established that forbearance in the worst 
impacted areas should continue and be revisited every 90 days. 
This was a watershed event and it helped avoid mass 
foreclosures.
    Congress and the President put the region on the path to 
recovery by providing emergency funding for the CDBG program. 
Despite efficiency issues in dispersing funds, lenders and 
homeowners see that the money is on its way even if it is 
coming slowly.
    While implementation of this program has not been at the 
pace we would all like to see, it is important to remember the 
enormous task at hand. Establishing a whole new rebuilding 
program under crisis conditions is unprecedented.
    Now one of the greatest challenges we face is the 
conveyance of FHA properties. FHA current policy says payment 
of an insurance claim will only occur when it takes title to a 
property as a result of foreclosure. To convey a property and 
receive insurance benefits, however, FHA requires a property to 
be fixed up so it can be sold again. We are a small company and 
cannot afford to rebuild all of the damaged properties in their 
hurricane area.
    Right now these properties sit vacant, blighted properties 
seen block after block deteriorate neighborhoods and hinder the 
rebuilding effort.
    There are important lessons for future action which I 
discuss at length in my written testimony. The National 
Environmental Policy Act, or NEPA, hamstrung the States in how 
they could design their grant distribution program. The 
President should be able to activate NEPA exemptions for the 
purpose of rebuilding pre-existing housing.
    Second, Federal agencies are not permitted to give 
recipients of Federal assistance duplicate benefits. While in 
theory this makes sense, in practice it is causing deficiencies 
for individuals and businesses.
    Third, valuations and appraisals of damage properties are 
often conducted numerous times by numerous agencies. There 
should be some mechanism to share this information.
    Last, MBA recommends prohibiting FHA from adding 
requirements that are above and beyond those determined 
acceptable by EPA and the appropriate State environmental 
agency in the production of affordable rental housing. EPA and 
the States are well qualified to determine environmental 
standards so it only delays critical production when HUD also 
adds requirements.
    The mortgage industry responded admirably to the many 
challenges of Katrina and Rita, despite significant cost. We 
will do all we can to ensure that the region is rebuilt better 
than ever. We have shown our willingness to sacrifice but that 
will not be enough. This is a national problem and the national 
solutions need to continue to ensure that the region returns 
better than it ever was.
    Thank you for allowing me to testify.
    Senator Reed. Thank you very much, Mr. Bright.
    I want to thank all the panelists for the excellent and 
concise testimony.
    I understand Senator Landrieu has to depart so I would 
yield my time initially to Senator Landrieu.
    Senator Landrieu. Thank you.
    Just one question and, unfortunately, I have a press 
conference with another Senator in just a few minutes that I am 
obligated to go, but I look forward to working with all of you.
    Thank you for your extraordinary testimony and your hard 
work to explain a very difficult and unprecedented problem and 
solutions to the problem.
    My one question to you, Mr. Kelly, would be why do you 
think that this bill or something like it is so important to 
pass? And what, in your view, will happen if something like 
this does not pass?
    Mr. Kelly. Senator, I think in your remarks you summed it 
up very well. This is not about an either/or proposition. This 
is about not a compromise. This is about a right ground 
solution.
    I have worked with the homeless. I have worked with the 
poor my whole life. I have worked with the working poor. If we 
do not do this, we do not bring people. If you do not bring 
back the elderly, you do not bring back child care. If you do 
not bring back elderly, they are a certain critical element of 
every community. If you do not bring back children, you do not 
bring back your future workforce.
    Why would we not want to bring back the working poor? Those 
are the people who care for our folks in nursing homes. Those 
are the people who care for our children in child care. They 
are the people who work in the dry cleaners and the 
restaurants. The working poor are a part of who we, as a 
Nation, are. They are a part of our economy, as well as people 
that we love and we respect and we work with every day.
    If we do not pass a bill like this, then we are showing a 
lack of leadership. That is what we are being criticized for. 
We are being criticized for a lack of leadership. And people 
are looking for leadership. People want to come home. We have 
the highest percentage of natives of any State in the union. It 
is about faith, it is about family, it is about food, and even 
with the Saints' disappointing loss, it is about football.
    But it is critical. People want to come home. It is a part 
of the fabric of who New Orleans is. When you say to somebody 
what is the first question you ask? How's your mamma and them?
    We are a community that is very unique. But if we do not 
allow our whole community to come home, then shame on us.
    Senator Reed. Senator Shelby, please.
    Senator Shelby. Mr. Kelly, we all want to help the people 
of New Orleans. I think that is a common thread. But we want to 
be smart in what we do. We want you to be smart in what you do.
    I am not a native of New Orleans but I love New Orleans. We 
would like for the Saints to do better. We hope for them, 
because we are from the South.
    Mr. Kelly. What about LSU?
    Senator Shelby. Well, we are a little nervous about LSU 
because they play the University of Alabama. We have got their 
former coach but we need their players, too.
    But as far as New Orleans is concerned, I think we--and I 
speak for myself--we want to do everything we can to make you 
whole.
    The Port of New Orleans is very, very important--that is 
why New Orleans, among other things exists--to America. We 
realize that. We think families are very important to all of 
us, as you alluded to. But we have got to be prudent in what 
you do. And I hope you will not build in the flood-prone areas. 
I mean, that is just something that I would not want the people 
in my State to do. But you have tough geography there and I 
realize that.
    I want to direct my next question and pick up on what Ms. 
Liu testified to. I guess are there, in the city of New 
Orleans, vacant apartments that if we had vouchers could a lot 
of the poor people, working people, can they get some of those 
apartments? Or of the apartments in the greater--in the 
metropolitan area?
    In other words, here are the vacancies now that are ready 
to be rented. And would that help alleviate some of the 
shortage, if we had a voucher system?
    Ms. Liu. First of all, I know that there has been a high 
number of rental units that remain damaged, almost as many as 
the homeowner units. So I think that----
    Senator Shelby. So they are not ready for occupancy then, 
if they are damaged?
    Ms. Liu. I think there are some and I think there are some 
in the larger region. My only concern is there is a lot of 
emphasis on vouchers for families and yet there is not a 
discussion or aggressive solution about where these vouchers 
are going to be used. And are we working with the private 
sector to ensure that such housing does exist?
    Senator Shelby. Sure.
    Ms. Liu. I think in the interim if the private sector, if 
most of the apartments that are available are in the New 
Orleans region but in the surrounding parishes, I think we 
should reach out to those apartment owners as well.
    Senator Shelby. I think you should.
    Mr. Kelly, do you have a comment?
    Mr. Kelly. Yes, sir. We deal with this in case management 
all the time, trying to find apartments for folks. The No. 1 
issue was referred to, 45 percent increase in rents. So how 
does the working poor afford a 45 percent increase in rent?
    Senator Shelby. That is tough.
    Mr. Kelly. We do have Go Zone credits that are now being 
put into use. But to rebuild and redevelop a former apartment 
complex is not happening overnight, especially with the 
construction and the insurance issues. But that will happen but 
it will not be enough for the amount of units that were 
destroyed.
    Senator Shelby. Mr. Bright, you mentioned you are in the 
mortgage business and you know a lot about housing and finance. 
In your testimony, and correct me if I am wrong, you suggested 
that FHA should pay claims on properties that were damaged by 
Katrina that are currently not in habitable condition. As FHA 
currently--you know what the law is. FHA does not currently 
factor into its FHA premiums catastrophic events. In other 
words, they do not have flood insurance in the FHA premium. But 
I believe everybody ought to have flood insurance who is in a 
flood-prone zone.
    If I understand your proposal, this would have FHA insure 
lenders against a risk which the lender did not pay a premium 
for.
    So I guess the question that I would ask, should FHA pay 
these claims, do you believe that FHA should raise its premiums 
to offset the additional risk--because there is risk here--of 
providing catastrophe insurance? Or should be lenders be 
covered by this risk at the expense of the taxpayer?
    In other words, FHA was never--we never contemplated the 
Federal Housing Administration to do this, to cover these. I 
understand what you are talking about. We are very interested 
here in the Senate in a meaningful comprehensive flood 
insurance program, which I think we have not had and has not 
been required and implemented well.
    Do you want to comment on that?
    Mr. Bright. Sure. There is a lot in that question. I will 
try to be concise.
    Specifically, there is a technicality in the FHA contract. 
These houses, there are about 8,000 homes we think, that are 
people that were flooded but not in a flood zone area. So 
therefore we, as the lender, would not have charged them flood 
insurance because they would have said we were gouging them----
    Senator Shelby. They were not in it, but they should have 
been if we had had a good program.
    Mr. Bright. Right. I mean 99 percent of the people have 
flood insurance. These are people that did not have flood 
insurance because they were outside of the flood zone and they 
flooded anyway. So that is specifically what this would cover.
    Let me also say if they got a Fannie Mae loan or a Freddie 
Mac loan, this would not have been an issue for them. So that 
is one reason why the FHA program is not as popular as the 
Fannie loans and the Freddie loans.
    So when you all fix, when you modernize the FHA, I believe 
you should address this issue.
    Senator Shelby. Well, I hope we are going to address it--
flood insurance--in a meaningful way because I have been, 
myself, very concerned about our flood insurance program, the 
inadequacies of it, the role that leaving out areas that are 
flood-prone and we pay for it in the long run, do we not?
    Mr. Bright. I would also like to say the FHA is a great 
program, as is the Fannie and Freddie program. Those loans you 
still can get funding for that. There is no problem with all of 
the subprime that you hear about. Those loans work just fine. 
And in our area that is something that is working.
    Senator Shelby. Thank you. Thank you, Mr. Chairman.
    Senator Reed. Thank you, Senator Shelby.
    I want to thank all of the witnesses for their excellent 
testimony, insightful and articulate.
    Mr. Perry, I think you have given HUD a reason to go back 
to those trailers and see how many people really are qualified 
for housing. Thank you for all of your good work there.
    Mr. Brown, it was kind of frightening to listen to your 
tale of woe about how you could not find support, particularly 
from HUD, to do what your faith-based mission was, to help 
house these seniors. But thank you for your persistence and 
your efforts.
    Ms. Paul, thank you for your leadership at Lafitte. I used 
to say Lafayette, but I am from Rhode Island.
    Ms. Paul. It is Lafitte.
    Senator Reed. It is Lafitte. I know. I stand corrected.
    Mr. Bright, thank you.
    Let me start questioning with Ms. Liu. Your analysis, and 
this is sort of a simpleminded approach, but the price of 
rental property has gone up 42 percent. If we are not replacing 
one-for-one destroyed housing, that price is not likely to come 
down but to go up. Is that simple economics? Is that fair?
    Ms. Liu. Yes, we have a real chicken and egg problem right 
now in terms of making sure that we are, as we are trying to 
immediately provide affordable housing for many of these 
residents, that the construction for rental property is just 
really lagging. Again, we have spent the first 2 years focusing 
a lot on homeowners and single-family homes.
    Again, if you look at the data, even with one-for-one, 
multifamily units are not going up as a small share of the 
total pie. And because of the insurance costs and other things, 
there is a lot of concerns that tax credits are not being used.
    So I think every resource that we have to expand the supply 
of rental units is really critical right now.
    Senator Reed. And the policies, I discern from the 
Assistant Secretary's comments, are not designed to accelerate 
the production of housing. They are not talking about a one-
for-one replacement. They are talking about tax credit programs 
which you suggest in your analysis might not induce the market 
to provide the rental housing because of other factors like 
insurance costs? Is that a fair point?
    Ms. Liu. That is fair.
    Senator Reed. They are also talking about vouchers. But 
without units, vouchers is a piece of paper in your pocket but 
not a roof over your head.
    Is this a strategy simply to look like you are doing 
something but end up not doing anything at all?
    Ms. Liu. Well, I appreciate their spirit of not wanting to 
maybe re-create the concentrated poverty that was there in the 
city before, but I think we have to be very pragmatic in the 
short term about whether or not we are creating enough units 
for families to come home. And whether I think we should--this 
is a 10-year recovery effort.
    So I think in the short term what is the quickest way we 
can get some hard units on the ground. If that is public 
housing, let us do it that way. And over time, let the other 
options that he raised occur over time.
    Senator Reed. Thank you.
    Mr. Kelly, your project specifically made the commitment 
for one-for-one replacement. That was not at the suggestion of 
HUD. I think that was at your insistence. Is that correct?
    Mr. Kelly. Yes, sir. We have been at this since 1727.
    Senator Reed. Longer than HUD.
    I go back. I am trying to sort out the Secretary's 
testimony. The suggestions, I think, is that we are going to do 
it by tax credits. Even if those tax credits are taken up, you 
need a second subsidy which is the voucher for the public 
housing individuals.
    So you basically have two subsidies which may, in fact, per 
unit per family be more expensive than creating a public 
housing--a one-for-one public housing approach. Is that . . .
    Mr. Kelly. I think the tax credits are being used to fund 
the capital and I think you really have to separate those two 
eggs. But the issue is we have to make sure that it is 
affordability. The tax credits can be geared at 60 percent 
below. In public housing, you are dealing with a lot of people 
at 30 percent. And that is the issue on affordability. Tax 
credits do not solve the problem.
    Senator Reed. Right. That is the point I was trying to 
reach with the Secretary, and my understanding is not as 
expensive as his, but if you have a tax credit regime that sets 
up of affordability levels at 60 percent of median income, than 
they do not have to serve anyone below that, I think. Is that 
correct? I am trying to figure out the program. Maybe Ms. Liu?
    Mr. Perry. I think that is correct, that people who are at 
30 percent may not get served. The ultimate problem is that 
public housing is being demolished now and we have to move 
quickly. That is what this bill provides us, an opportunity to 
move.
    Senator Reed. Again, there are lots of regulations and 
laws, et cetera. But on the streets of New Orleans, if formerly 
resided in public housing, that unit is demolished, you cannot 
get into public housing. You may get a voucher. But that 
voucher does not allow you to go to any rental property in the 
city of New Orleans, walk up to the door and say here, you have 
got to put me. Is that fair?
    Mr. Perry. I would agree. I can provide you a referral list 
of folks who have called our office and said well, I have a 
voucher. But everywhere I go they say that they do not take 
vouchers. And so I still cannot find a place to live, even 
though I have a voucher.
    Senator Reed. Even if those places take vouchers, there is 
a certain amount of money that they expect to be paid also. Is 
that correct? Or am I missing the point totally?
    Mr. Perry. Right, that is true. The tenant has to pay a 
portion of the rent, as well.
    Senator Reed. And for many public housing people that is 
literally beyond their grasp; is that correct?
    Mr. Perry. That is correct.
    Mr. Kelly. It gets more complicated when you get into the 
issue of utilities. So if it is a 30 percent income, but then 
you have got the utilities on top.
    I think one of the things that should be emphasized is 
under the public housing the ACC do not provide enough revenue 
to operate units successfully. That is part of why we have 
public housing in the disarray that it is. We really need to 
have many more project-based Section 8 vouchers so that these 
redevelopments can be done successfully and will last into the 
future.
    Ms. Liu. I was just going to echo that because I do think, 
and other folks on the panel and in the audience will probably 
know this, I know that the value of the housing vouchers have 
gone up to meet the increase in cost in that housing market. So 
in some ways that is a help.
    But if the tax credits are moving faster, if the developers 
are moving faster on breaking ground, the more we have project-
based vouchers to tie with these tax credits the better off we 
will be. I know that we need to continue to push on expanding 
that.
    Senator Reed. So essentially what I think you are 
suggesting is that we have a coherent strategy where it is not 
just tax credits to any developer, and then I related to that 
might give a voucher to a person. They have to be coordinated 
together, which I presume you are doing in Lafitte?
    Mr. Kelly. Yes, sir.
    Ms. Paul. Yes.
    Senator Reed. And that has to be the plan going forward for 
the other public housing units that are being demolished and 
replaced in some version.
    Is that the approach you have heard this morning from the 
Secretary, Mr. Kelly?
    Mr. Kelly. I think--I do not want to speak on behalf of the 
Secretary. I think Lafitte is a model of what the public 
housing redevelopments should and can be. It is about allowing 
people the right to come on.
    Senator Reed. Thank you all very, very much.
    We will keep the record open for a week. This has been 
extremely informative. Thank you for traveling all the way up 
here to Washington. And thank you for your good work every day 
to help people, our neighbors, who need your help.
    I understand we have some ladies and gentlemen who were 
evacuees for Katrina who are here in the audience. Thank you 
for being here today, I guess, in picking up Mr. Kelly and Mr. 
Paul, seeing them bearing witness.
    Thank you.
    [Whereupon, at 11:15 a.m., the hearing was adjourned.]
    [Prepared statements and additional material supplied for 
the record follow:]
                PREPARED STATEMENT OF SENATOR JACK REED
    I want to welcome everyone to this important hearing on housing 
needs in the Gulf Coast, and extend my appreciation to the witnesses 
who have taken time out of their busy schedules to come to Washington, 
DC to be before us today. I want to also recognize my colleague Senator 
Landrieu, who is testifying this morning, and acknowledge her efforts 
to secure resources and assistance for her constituents and all Gulf 
Coast residents. Her dedication to rebuilding the areas devastated by 
hurricanes Katrina, Rita, and Wilma are impressive, and I know she is 
here fighting every day to make sure families can return to their 
communities.
    We are here this morning because although two years have elapsed 
since hurricanes Katrina, Wilma, and Rita hit shore, unfortunately, 
there is still much to be done to rebuild devastated areas and help 
people return home.
    The hurricanes of 2005 destroyed or significantly damaged over 
305,000 homes, and caused some level of damage to tens of thousands of 
others. Of the homes most damaged, over a third were occupied by 
renters. Two-thirds of the most damaged homes were in Louisiana. After 
the hurricanes, over 1.3 million Americans were scattered throughout 
the country, relying on friends, family, and others to meet their 
short-term housing needs. Longer-term housing needs have been met by 
the federal, state, and local governments, private non-profits, public 
housing agencies, and private landlords and property owners.
    Congress quickly responded after the storms to provide needed funds 
to help communities clean-up and recover, and to provide housing 
assistance to those displaced. However, anyone with a television can 
recount the horrors of watching the bungled recovery efforts in New 
Orleans. While those days seem long past, there are still many families 
who have been left stranded and unable to return to their communities. 
We are here today to explore how we can work together to help people 
return home.
    While more residents return every day, and old businesses open 
their doors, communities are still struggling to recover. New Orleans, 
the hardest hit area, has climbed back to 66% of its pre-storm 
population. Unfortunately, as we would suspect, those with low-incomes, 
minorities, renters, and families with children have been the least 
likely to return. Many of these families have no resources to move once 
again, and many have no homes to return to.
    With supplemental CDBG funds provided by Congress, the states 
affected by the storms have established grant programs to assist 
homeowners in rebuilding their destroyed homes, and in turn, their 
communities. In Louisiana, over 180,000 families have applied for funds 
through the State's ``Road Home'' program, with over 50,000 receiving 
grants to rebuild so far. And in Mississippi, almost 14,000 homeowners 
have received rebuilding funds. These programs have helped to jump 
start housing development throughout the Gulf Coast.
    There has been a major gap, however, in ensuring that there is 
adequate, affordable rental housing in the devastated areas. While GO-
Zone tax credits have been allocated, and other plans are in place to 
rebuild some portion of the rental housing, the plans of HUD and the 
states leave low-income renters with significantly fewer options than 
before the storms. As I understand it, HUD expects to demolish much of 
the public housing in New Orleans and only replace about forty percent 
of it.
    While I believe that redevelopment must move forward and must 
result in healthy, vibrant, mixed-income communities, I am concerned 
that low-income families--including many children, people with 
disabilities, and seniors, will have no homes to return to if 
affordable housing is not replaced.
    In fact, affordable housing in New Orleans and throughout the Gulf 
has become even more elusive. Rents have increased by 40% and 
homelessness has doubled, despite the significant population decrease.
    Chairman Dodd and Senator Landrieu have introduced a bill, the Gulf 
Coast Housing Recovery Act, which would help ensure that families of 
all income levels can return to their communities, and I applaud their 
efforts. Their bill seeks to ensure that affordable housing is replaced 
in flexible and sensible ways--with resident and community input, in 
mixed-income communities, and through a variety of housing options.
    I know there are still serious housing problems throughout the Gulf 
Coast, and I look forward to hearing from our witnesses on what 
challenges remain and how we can work to build healthier and stronger 
communities in the devastated areas.
                                 ______
                                 
             PREPARED STATEMENT OF SENATOR MARY L. LANDRIEU
    Chairman Reed, Ranking Member Shelby and Members of the Committee,
    Mr. Chairman, we can easily lose sight of the nature of this 
tragedy in statistics, when we are really talking about people, and 
homes, and neighborhoods. To begin, I would like to tell the story of 
two such people from my state.
    Gloria Williams and her twin sister Bobbie Jennings are 60 years 
old. They both lived in public housing in New Orleans before the 
hurricane struck. Gloria and Bobbie started working early in life. They 
picked cotton, strawberries, and snap peas in rural Louisiana. ``We 
were raised to work,'' they have said. They moved to New Orleans when 
their father drowned, their mother was later killed. They eventually 
both had careers as Certified Nursing Assistants, working in nursing 
homes for many years. They fed people, cleaned people, bathed people 
and cared for people. They raised families and had grandchildren. And 
like 25 percent of households in New Orleans, neither owned a car. But 
their years of hard, physical work took their toll, and now at 60 they 
both have serious physical ailments. Ms. Jennings had back surgery and 
suffers from high blood pressure. Ms. Williams has heart and lung 
problems, high blood pressure and blood clots that keep her from 
standing for very long. Their only source of income is their $600 a 
month disability check. Neither one has any pension. They tried to 
relocate to California, but the 3,000-mile distance from their family 
was too great. They've moved into a relative's damaged home in Slidell. 
The only thing they want out of this life is a little dignity and 
recognition for having toiled all their lives, as good citizens and 
good neighbors. For them, that recognition would be to allow them to 
return home to New Orleans. Mr. Chairman, these are the kind of people 
that God put us on earth to help. As the Bible reminds us ``Whatever 
you did for the least of My brothers and sisters, you did for Me.''
    Mr. Chairman, I am pleased to be here today to discuss housing 
needs in the Gulf Coast, and in particular, S. 1668, the ``Gulf Coast 
Housing Recovery Act'' introduced by Chairman Dodd and myself. Let me 
take this opportunity to again thank Chairman Dodd for generous advice 
and guidance in crafting this legislation and to Ranking Member Shelby 
for his work alongside the Louisiana Congressional delegation on the 
numerous Gulf Coast recovery-related issues. I would also like to thank 
Congresswoman Maxine Waters and House Banking Chairman Barney Frank for 
showing such initiative on this vital subject for the Gulf Coast. Their 
early leadership on this subject speaks volumes about their compassion 
for the suffering of the people of the Gulf Coast. We will not forget 
their efforts.
    Our ability to rebuild homes and communities will determine the 
success of overall long-term recovery efforts in the region. To 
illustrate the interconnectedness of our problems consider this, in 
Louisiana alone we had over 18,000 businesses destroyed. Yet time and 
time again, I am told that the biggest hurdle to business growth in New 
Orleans is the absence of affordable housing. Louisiana also had 875 
schools destroyed. Again, teachers cannot come back to school and teach 
our children if they do not have a roof over their heads. Housing is 
where recovery must start!
    The official title for this hearing ``Two Years After the Storm: 
Housing Needs in the Gulf Coast'' suggests that there was only one 
storm that hit the Gulf Coast in 2005. In fact, the Gulf Coast was hit 
by three storms in 2005: Katrina, Rita and Wilma. Katrina struck the 
Gulf Coast on August 29, 2005, which was damaging enough to my state. 
If that was enough though, in New Orleans there were also 28 separate 
Federal levee failures which flooded 12,000 acres--or 80 percent of the 
city--following Katrina. Then one month later, Hurricane Rita made 
landfall in southwestern Louisiana and southeast Texas with winds in 
excess of 115 mph and a significant storm surge. In terms of the impact 
of Hurricanes Katrina and Rita, and the failure of the Federal levees 
on housing in my state, we had more than 200,000 homes damaged or 
destroyed. These properties run the gamut from single-family homes to 
multi-family homes to rental units. However, owner-occupied and rental 
housing were not the only types of housing damaged by the storms. There 
were over 7,000 public housing units damaged in the New Orleans area 
alone with more than 5,000 public housing residents displaced.
    Furthermore, according to a January 2005 study by UNITY of Greater 
New Orleans, a collaborative of 70 nonprofit and government agencies in 
Orleans and Jefferson Parishes, there were 6,300 homeless in the New 
Orleans area. As a result of Hurricane Katrina and the levee breaks, in 
January 2007, the homeless population had almost doubled to an 
estimated 12,000 homeless, though only 60 percent of the city's general 
population had returned. These homeless residents are living in 
abandoned housing, on the streets, in cars or in housing designated for 
the homeless. The number is steadily increasing because the 
extraordinarily high cost of development has added to the challenges of 
rebuilding affordable rental housing along the Gulf Coast which has 
significantly reduced the number of deeply affordable rental units. For 
example, according to a June 2007 report by PolicyLink, a national 
research institute, rents have increased in the area by as much as 40 
to 200 percent since the storms, leaving few apartments affordable to 
families making less than the area median income. All of these factors 
are creating an affordable housing crisis in the area but especially in 
New Orleans. As I mentioned above, this crisis threatens our recovery 
as, before the storm these residents of affordable housing were 
essential to our workforces in the tourism, hospitality, and service 
sectors which, as you know, are the lifeblood of the New Orleans 
economy. In fact, New Orleans employers are seeking to fill 15,000 
hospitality industry jobs, 10,000 public health/hospital industry jobs, 
and almost 10,000 construction jobs. We cannot fill these jobs without 
affordable housing for these vital workers.
    Given the ongoing housing needs in the southern part of my state, 
as well as all across the Gulf Coast, I was pleased that H.R. 1227, the 
``Gulf Coast Hurricane Housing Recovery Act'' passed the House of 
Representatives on March 21, 2007. This legislation, introduced by 
Representative Waters and Representative Frank, addresses many of the 
major housing-related problems in my state, especially as they relate 
to public housing, rental housing, and those who were made homeless by 
the storms. When this legislation was received in the Senate, I begin 
working closely with Chairman Dodd to review H.R. 1227 for ways to 
strengthen this important legislation. To further this goal, we 
consulted with all relevant stakeholders, including public housing 
residents, community leaders, nonprofits, developers, and Federal/
State/local officials on areas where the House-passed legislation might 
require adjustments or improvements.
    The legislation we are discussing today, S. 1668, the ``Gulf Coast 
Housing Recovery Act'' is the product of these months of intensive 
consultations. As a testament to the comprehensive, yet balanced 
approach in this bill, I note that S. 1668 is supported by at least 43 
national organizations, 34 Gulf Coast organizations, in addition to the 
State of Louisiana and the City of New Orleans. This legislation, the 
Senate companion to H.R. 1227, is similar to the House-passed bill in 
some places; in others it really improves upon what was included in the 
House bill. For example, there were an estimated 18,000 distressed 
properties in New Orleans before the storm, but as a result of Katrina 
and the subsequent levee breaks, there are now at least 32,000 such 
properties. Distressed properties like this need a clear title and to 
be brought up to code, then they can be returned to the housing market 
rather than sitting idle or blighted. The New Orleans Redevelopment 
Authority (NORA) has the power to address this particular issue but 
lacks sufficient funding. To these ends, H.R. 1227 included $15 million 
for NORA to carry out a pilot program to purchase and bundle 
properties, then sell them for redevelopment. After talking to 
Representative Richard Baker, who championed this provision on the 
House side, we were able to include $25 million for NORA in S. 1668 so 
they can ``hit the ground running'' with this program. In addition to 
this funding, we also added an additional $25 million in the Senate 
bill for other redevelopment authorities in Katrina/Rita declared areas 
in Louisiana to carry out similar programs.
    Another important provision that we retained in S. 1668 from the 
House-passed legislation was an authorization of funding for 4,500 
units of supportive housing for the elderly, the disabled, and the 
homeless--the most fragile of our population. 3,000 of these vouchers 
would be reserved for Louisiana, with the rest going to other impacted 
Gulf Coast states. I note that the Senate has already passed this 
particular proposal. It was included as a floor amendment that I 
offered as part of H.R. 4939, the Emergency Supplemental which was 
enacted last summer. However, much to my chagrin, and to those working 
on this issue in my State, this important provision was taken out by 
the House of Representatives in final negotiations on the Supplemental. 
As a member of the Senate Appropriations Committee, I plan to work 
closely with this Committee and my colleague Senator Patty Murray, 
Chairman of the Transportation, HUD Appropriations Subcommittee to 
secure this funding in the next Emergency Supplemental. Chairman Murray 
recently committed to me on the Senate floor to work to include this 
particular funding in the Supplemental. The authorization in this bill 
has been essential to push this issue forward and gamer additional 
Senate/House support for these efforts.
    Furthermore, before Hurricane Katrina, at approximately 40 percent, 
New Orleans had one of the lowest homeownership levels of any 
metropolitan area in the country. As we rebuild this vibrant city, in 
my opinion, increasing homeownership should be one of the tenets of the 
redevelopment process. It is essential to return residents to public 
housing, rental units, and other affordable housing but in order to 
truly spur long-term recovery and economic development; we should also 
create homeownership opportunities for these families. With this in 
mind, S. 1668 includes an additional $5 million for NORA to provide 
soft-second mortgages and directs the Federal Housing Administration to 
convey foreclosed/distressed properties to NORA for affordable resale 
to these low-to-moderate income residents. These provisions are 
important steps towards not just returning displaced residents home but 
giving them the chance to own that home.
    Following Katrina and Rita, there has been a great deal of emphasis 
placed on rebuilding Gulf Coast owner-occupied and rental housing, as 
there should be. The recovery of public housing, however, is one area 
that has not received much national press even though public housing 
residents have the same right to return home and rebuild as homeowners 
or renters. Prior to Katrina, the Housing Authority of New Orleans 
(HANO) operated 7,379 public housing units, 5,146 of which were 
occupied. As you may know, HANO has long been a troubled agency and has 
been plagued by mismanagement. This in part, has contributed to the 
poor condition of some public housing in New Orleans and the negative 
stereotype that many in the area have of public housing. It should be 
noted however that despite that negative perception, before Katrina 
almost 85 percent of these public housing residents were employed and 
many of them are now employed in other cities, with children in school 
there. Some former public housing residents are settled in these other 
cities and do not want to return to New Orleans. That is their choice, 
however, many other residents do want to come home and participate in 
the recovery of their communities.
    H.R. 1227 provides the process and means for returning these New 
Orleans public housing residents home. The House-passed bill includes a 
resident study to find out which residents want to stay where they are, 
which residents want to come back to public housing in New Orleans, and 
which residents would like to return to New Orleans with rental or 
Section 8 assistance. This study would guide redevelopment plans of 
public housing in New Orleans and the Department of Housing & Urban 
Development supports this provision. In fact, I understand that after 
both H.R. 1227 and S. 1668 were introduced, HANO started conducting a 
study modeled on the provision in the legislation. H.R. 1227 also 
specifies that HANO shall not demolish the 7,379 public housing units 
unless there is a plan in place to provide for one-for-one replacement 
of the disposed units. This particular provision ensures that all 
public housing residents who want to return can do so--to either public 
housing or other affordable units.
    S. 1668 retains these provisions but strengthens them in a few 
important ways. For example, just as in H.R. 1227, our bill sets out 
that all 5,146 pre-Katrina occupied units shall be replaced with hard 
units--which can be public housing, affordable housing, or vouchers 
tied to affordable units. However, unlike the House bill, for the 
remaining units, the Senate bill allows HANO to replace these units 
with hard units or with project-based vouchers tied to units in low-
income neighborhoods/areas undergoing revitalization. This is because 
some residents want to return to public housing, but there are others 
who would like to transition to other types of units. Our bill would 
set out this `menu of options' for both residents and developers alike, 
allowing them to work hand-in-hand to rebuild public housing. And we 
worked closely with developers in the area who have already committed 
to responsible replacement of public housing, such as Providence 
Community Housing who is testifying today, to ensure that our bill will 
move development forward, while still providing sufficient guarantees 
for resident participation/input. Just as important, however, is that 
S. 1668 ensures that affordable housing will not be lost at a time when 
it is most needed.
    In closing, let me reiterate that this bill addresses one of the 
most fundamental needs following a disaster: the need to return home. 
Whether residents live in million dollar mansions, rental housing, or 
public housing they all share the same desire to return to their 
communities, and in particular, their own homes. The House of 
Representatives has done its part to help these public housing 
residents, renters and homeless individuals so now it is up to the 
Senate, and this Committee, to act upon this legislation. I look 
forward to working closely with Chairman Dodd, Ranking Member Shelby, 
and the other members of the committee to hopefully reach an agreement 
on moving S. 1668 forward to the full Senate for consideration.
    Mr. Chairman, this concludes my prepared statement. I ask unanimous 
consent to include a list of organizations supporting S. 1668 in the 
Record, along letters of support from both the State of Louisiana and 
the City of New Orleans. At this time, I would be pleased to respond to 
any questions that you or other members of the Committee may have on 
this issue.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

   Return to New Orleans; Residents Should Go Home to New and Better 
                             Public Housing

              The Washington Post, Monday, April 30, 2007

                               Editorial

    Twenty months after Hurricane Katrina, public housing 
residents of New Orleans remain scattered across the country. 
Many want to go home. They should be able to. But returning to 
the same squalid and dangerous housing projects that were 
isolated cauldrons of dysfunction and pathology is neither just 
nor humane. Katrina changed everything in the Crescent City, 
and its public housing must change, too. That's what the U.S. 
Department of Housing and Urban Development is trying to make 
happen. But a lawsuit filed by the Advancement Project, a 
Washington-based civil rights organization, against federal, 
state and city officials is holding things up.
    New Orleans public housing before Hurricane Katrina was 
gripped by drug and gang activity, making the projects among 
the most dangerous areas in the city. Corruption and 
mismanagement led the federal government to take over the 
Housing Authority of New Orleans in 2002. HUD was in the 
process of redoing some of the public housing in the mode of 
HOPE VI developments that favor townhouse design and mixed-
income residences over brick apartment buildings that warehouse 
the poor. Then Katrina hit.
    The Advancement Project lawsuit claims ``defendants' 
inaction and needless delay in repairing and reopening New 
Orleans' public housing development are based on racial animus 
and a clear intention to prohibit the return of many low-income 
African-American families.'' It demands a halt to HUD's planned 
demolition of troubled projects and a right of return for 
everyone to their old apartments in public housing. 
Unfortunately, comments by HUD Secretary Alphonso Jackson (New 
Orleans ``is not going to be as black as it was for a long 
time, if ever again''), Rep. Richard H. Baker (R-La.) (``We 
finally cleaned up public housing in New Orleans. We couldn't 
do it, but God did'') and New Orleans City Council President 
Oliver Thomas (``We don't need soap-opera watchers all day'') 
served to fuel the conspiracy theories underpinning the 
lawsuit. They also roiled long-troubled racial waters in New 
Orleans.
    Judge Ivan Lemelle pushed aside the racial charges and 
denied an injunction against razing the housing projects. But a 
jury trial is set for Nov. 26, and Judge Lemelle has ordered 
the Advancement Project and HUD to try to settle before then. 
At stake is the transformation of four public housing projects 
built in the 1940s--C.J. Peete, St. Bernard, B.W. Cooper and 
Lafitte--from fortresses of concentrated poverty into mixed-
income communities. The nonprofit developers of Lafitte, for 
instance, are doing just about everything the Advancement 
Project says it wants--and what a House bill making its way to 
the Senate would mandate--while at the same time following 
through on HUD's vision for renewed, reconnected and 
revitalized public housing that no longer isolates the poor.
    Enterprise Community Partners has committed to a one-for-
one replacement of public housing units at Lafitte and to a 
right of return for former Lafitte residents. The developer has 
traveled to Houston and Baton Rouge to get residents' input. By 
renovating some of the units at one end of the project while 
tearing down and building the New Orleans-style homes on the 
other end, Enterprise would make it possible for former Lafitte 
tenants to return to New Orleans now. But everything is on 
hold; no one can get started until the Advancement Project's 
trial concludes.
    The problem is compounded by a July 1 deadline for 
developers to spend 10 percent of a project's total development 
cost using Gulf Opportunity Zone low-income tax credits or risk 
losing them. In that case, everyone loses. Considering that 
many of its objectives are being met, the Advancement Project 
should take yes for an answer and let demolition begin. The 
displaced people of New Orleans have waited long enough to go 
home. If they can go home to apartments better than the ones 
they fled, that should be applauded, not denounced in court.
                                ------                                


                         In Divided New Orleans

               The New York Times, Tuesday, May 15, 2007

                               Editorial

    When President Bush spoke to the nation soon after 
Hurricane Katrina, he was resolute that the city would be 
rebuilt. ``We will do what it takes,'' he said. We--the 
federal, state and city governments; elected officials and the 
citizens who hire them--have failed spectacularly. Homes and 
schools remain empty or imaginary; evacuees and survivors wait 
in cramped trailers, unable to return or rebuild. A huge 
silence still hangs over the Lower Ninth Ward, a place every 
American should see, to witness firsthand how truckloads of 
promises have filled New Orleans's vast devastation with 
nothing.
    That the Lower Ninth is overwhelmingly black is not 
irrelevant. African-Americans were the predominant and poorest 
members of this city before the storm, they bore the worst of 
it and have the farthest journey back to stability. A study 
issued last week by the Kaiser Family Foundation, based on 
interviews last fall with residents of Orleans, Jefferson, 
Plaquemines and St. Bernard parishes, maps the outlines of a 
sharp racial divide.
    In Orleans Parish, twice as many African-Americans as 
whites said their lives were still ``very'' or ``somewhat'' 
disrupted. Seventy-two percent of blacks said they had problems 
getting health care, compared with 32 percent of whites. Blacks 
were more likely to say that their financial status, physical 
and mental health, and job security had worsened since the 
storm. And they expressed considerably more anxiety than whites 
about the sturdiness of the rebuilt levees, the danger from 
future Katrinas and the prospect of living without enough money 
or health care, or a decent, affordable home.
    There was a consensus about broad categories of the 
recovery: solid majorities thought there had been at least some 
progress in restoring basic services, reopening schools and 
business and fixing levees. But in three vital areas--
rebuilding neighborhoods, controlling crime and increasing the 
supply of affordable housing--most agreed that there had been 
no progress or ``not too much.''
    Even with the constant trickle of bad news, you can find 
minimal improvements. Thousands of building permits have been 
issued. A crisis was recently averted when the Bush 
administration extended temporary housing assistance for tens 
of thousands of displaced families. Some government housing 
subsidies that were to expire at the end of August will 
continue until March 2009.
    It is also encouraging that administration of the housing 
program will shift from the Federal Emergency Management Agency 
to the Department of Housing and Urban Development, which has 
always been the logical choice, given its experience in housing 
needy families. Other positive signs include the halting 
progress toward a workable redevelopment plan, and a recent 
finding that the city's population had grown to above half of 
its level before the storm.
    The Kaiser survey even found signs of hope when it tested 
for resilience in a proud city. Sixty-nine percent of 
respondents said they were optimistic about New Orleans's 
future. And only 11 percent said they planned to leave.
    Their faith must not be betrayed. Residents in the survey 
were keenly aware that their city's fitful recovery would be 
devastated if the levees failed again. They put strong levees 
above all other priorities, including fighting crime and even 
basic services like electricity and water. And yet National 
Geographic has reported that an engineer has found signs that 
levees were poorly rebuilt and are already eroding. There is no 
room for error here.
                                ------                                


 Home Sweet Home; New Orleans Public Housing Residents Deserve Better 
              Than What They Had Before Hurricane Katrina

                  The Washington Post, August 27, 2007

                               Editorial

    Public Housing advocates are gearing up for a sit-in at the 
offices of the Housing Authority of New Orleans tomorrow. Their 
frustration is understandable. Two years after Hurricane 
Katrina scattered residents to communities outside the Crescent 
City, most have yet to return home. But the protesters' goal of 
getting the displaced back into their old units is wrong. While 
the historical significance of those structures is undeniable, 
so is their history of being forlorn concentrations of poverty.
    To tour the barracks-style apartment complexes of New 
Orleans is to see the best and worst of public housing. Because 
most of them were built in the 1940s, a walk into one of their 
cramped units is a walk back in time. For instance, residents 
can't run water in the bathtub and the bathroom sink at the 
same time. Warmth in the winter is provided by space heaters. 
For the most part, the old projects are cut off from the flow 
of the city because the city's streets don't go through them. 
Now, if you go to the redeveloped Fischer and St. Thomas 
complexes, you'll see the best in modern public housing. 
Warehousing of the poor and marginalizing them from the larger 
community are out. Modeled on HOPE VI developments, these are 
mixed-income neighborhoods of townhouses. The homes are 
spacious. The appliances are new. The sense of hopelessness 
that envelops Iberville, the one fully functioning old-style 
public housing project, is not present.
    The U.S. Department of Housing and Urban Development wants 
to bring four other old public housing estates into the modern 
era. But a lawsuit by the Advancement Project, a Washington-
based civil rights organization, has stopped HUD from doing so. 
The lawsuit accuses the agency of cleansing African Americans 
from New Orleans by keeping the four public housing projects 
shuttered. It demands a right of return for all New Orleans 
public housing residents, and it demands that those families go 
back to the units they fled on Aug. 29, 2005. Until the case 
goes to trial in November, those families will have to wait. 
This is unconscionable. Yes, they should return. But they 
should return to something much better than they left.
    At least one developer, Enterprise Community Partners, 
which has been chosen by HUD to redevelop the Lafitte project, 
has committed to providing a new public housing unit to every 
family that lived there before in what would become a mixed-
income community. A bill sponsored by Sens. Christopher J. Dodd 
(D-Conn.) and Mary Landrieu (D-La.) would make what Enterprise 
is voluntarily doing the law.
    Donna Davis, 52, has lived in the projects since she was 9. 
The pride in her two-story townhouse in the new Fischer complex 
was plainly evident as she toured a visitor around. When asked 
what she would say to people afraid of HUD's redevelopment 
plans, Ms. Davis looked to her own experience. ``We lived [in 
Fischer] and stayed there,'' she said. ``Now it's time for us 
to grow and open up . . . to see how good we can all live.'' If 
the Dodd-Landrieu bill passes, the Advancement Project should 
drop its lawsuit. Returning public housing residents deserve to 
have Ms. Davis's experience.
S. 1668 Gulf Coast Housing Recovery Act of 2007, Introduced by Senators 
                    Dodd and Landrieu, June 20, 2007


                           Section-by-Section


SEC. 1. TITLE

    Gulf Coast Housing Recovery Act of 2007

SEC. 2. LIMITATION ON USE OF AUTHORIZED AMOUNTS.

    No funds authorized may be used for lobbying.

              TITLE I--COMMUNITY DEVELOPMENT BLOCK GRANTS


SEC. 101. FLEXIBILITY OF FEDERAL FUNDS FOR ROAD HOME PROGRAM.

    Requires that FEMA transfer $1.17 billion of Hazard 
Mitigation Grant Program funds be transferred and allocated 
through the Road Home program, for mitigation activities.

SEC. 102 HOUSEHOLD ASSISTANCE PROGRAMS FUNDED WITH CDBG DISASTER 
                    ASSISTANCE.

    Requires each state receiving supplemental CDBG funds to 
report on the uses of disaster CDBG funds, including details on 
programs established, applications submitted, funds disbursed, 
average assistance amounts, and comprehensive data on who is 
being served. Reports must be submitted quarterly to Congress 
and made publicly available on the Internet.

SEC. 103 COMMUNITY DEVELOPMENT PILOT PROGRAM.

    Requires Louisiana to make available, from previously 
appropriated funds, $30 million for New Orleans, and $25 
million for other parishes to use for redevelopment pilot 
programs. Under the pilot programs, local redevelopment 
authorities will acquire, bundle, and redevelop land. 
Redevelopment must be consistent with city and neighborhood 
revitalization plans, original owners of land will have first 
priority to purchase housing once developed, and 25% of housing 
developed must be affordable to low-, very low- and extremely 
low-income households.

SEC. 104. ROAD HOME PROGRAM SHORTFALL.

    Authorizes such sums as necessary for the Road Home 
program, provided that the state of Louisiana provides $1 
billion for the program.

SEC. 105. ELIMINATION OF PROHIBITION OF USE FOR MATCH REQUIREMENTS.

    Allows states to use supplemental CDBG funds as a match for 
other federal programs.
    Eliminates repetitive environmental reviews so long as one 
federal environmental review is conducted.

SEC. 106. REIMBURSEMENT OF AMOUNTS USED FOR RENTAL HOUSING ASSISTANCE.

    Authorizes unused appropriated disaster funds to be used to 
reimburse cities or counties that used their own funds to house 
evacuees

                        TITLE II--PUBLIC HOUSING


SEC. 201. SURVEY OF PUBLIC HOUSING RESIDENTS.

    Requires HUD to contract with an independent research 
entity to conduct a survey of people who resided in New Orleans 
public housing as of August 28, 2005, to determine which and 
how many households wish to return to redeveloped New Orleans 
public housing, how many want to return to a temporary public 
housing unit in New Orleans while redevelopment is occurring, 
how many want to receive voucher assistance in New Orleans, and 
how many want to receive housing vouchers elsewhere. The survey 
must be completed 90 days after enactment.

SEC. 202. HOUSING FOR PREVIOUS RESIDENTS OF PUBLIC HOUSING.

    Requires that within 90 days of enactment, the Housing 
Authority of New Orleans (HANO) make available the greater of 
3000 public housing units, or the number of households who 
indicate in the survey that they want to return to public 
housing.
    In providing housing units, the housing authority must 
offer options of available units and must provide relocation 
assistance to residents wishing to return.

SEC. 203. REPLACEMENT OF PUBLIC HOUSING DWELLING UNITS.

    HANO may only demolish public housing pursuant to if there 
is a plan approved by HUD which ensures that there is resident 
input, a public hearing is conducted, resident services are 
provided, and replacement units will be made available.
    Any unit which will not reopen and was occupied on August 
28, 2005 must be replaced with another affordable unit--public 
housing, other affordable unit, or a voucher attached to a hard 
unit (project-based vouchers). Any unit which will not reopen 
and was vacant on August 28, 2005 must be replaced with either 
an affordable unit or a housing voucher.

SEC. 204. RESIDENT SUPPORT SERVICES.

    Where HANO is providing housing vouchers as replacement 
housing, it must: (1) provide mobility counseling; (2) conduct 
landlord outreach; and (3) work with developers to project-base 
assistance where possible.
    Every 6 months, HANO must report to Congress on where 
replacement units are located, including census tract data on 
poverty, rent burden data and demographic data.

SEC. 205. PUBLIC HOUSING IN KATRINA AND RITA DISASTER AREAS.

    For the 2 years after enactment, a public housing agency 
(PHA) in disaster areas may only demolish or dispose of public 
housing if there is a plan approved by HUD which ensures that 
there is resident input, a public hearing is conducted, 
resident services are provided, and replacement units will be 
made available.
    Any unit which will not reopen and was occupied on August 
28, 2005 must be replaced with another affordable unit--public 
housing, other affordable unit, or a voucher attached to a hard 
unit (project-based vouchers). Any unit which will not reopen 
and was vacant on August 28, 2005 must be replaced with either 
an affordable unit or a housing voucher.
    A PHA must use its best efforts to locate tenants displaced 
and provide those tenants with replacement units.

SEC. 206. REPORTS ON PROPOSED CONVERSION OF PUBLIC HOUSING UNITS.

    Within 15 days of enactment, HUD must submit to Congress a 
report on any plans it has to transfer ownership of public 
housing.

SEC. 207. AUTHORIZATION OF APPROPRIATIONS FOR REPAIR AND REHABILITATION 
                    FOR KATRINA AND RITA DISASTER AREAS.

    Authorizes such sums as are necessary to repair, 
rehabilitate, redevelop and replace public housing, as well as 
to provide relocation assistance and supportive services.

SEC. 208. EXISTING PUBLIC HOUSING REDEVELOPMENT.

    Clarifies that any agreement to demolish or dispose of 
public housing entered into prior to enactment can go forward 
so long as replacement housing is provided.

SEC. 209. REPORTS ON COMPLIANCE.

    Within 30 days of enactment, and each quarter thereafter, 
HUD must submit a detailed report to Congress on compliance 
with this title.

SEC. 210. INDEPENDENT ADMINISTRATION OF HOUSING AUTHORITY OF NEW 
                    ORLEANS.

    Requires HUD to petition for judicial receivership of HANO 
within 30- days of enactment. Any receiver must comply with 
this Act.

SEC. 211. DEFINITIONS.

    Title III--Disaster Voucher Program and Project-Based Assistance


SEC. 301. DISASTER VOUCHER PROGRAM.

    Authorizes such sums as are necessary to provide disaster 
vouchers for formerly HUD-assisted households through June 30, 
2008. Prior to October 31, 2007, HUD must work with FEMA and 
PHAs to identify households eligible for disaster housing 
vouchers.
    After June 30, 2008 disaster voucher holders who have not 
received tenant replacement vouchers shall receive Section 8 
housing vouchers. Any assistance is temporary and only 
continues so long as the receiving family is income eligible.

SEC. 302. TENANT REPLACEMENT VOUCHER FOR ALL LOST UNITS.

    Authorizes such sums as are necessary to replace all public 
and assisted housing which will not be replaced with 
replacement housing vouchers so there is no net loss of 
affordable housing. Requires HUD to issue replacement vouchers 
for any HUD-assisted housing not replaced by January 1, 2010.

SEC. 303. VOUCHER ASSISTANCE FOR HOUSEHOLDS RECEIVING FEMA ASSISTANCE.

    Requires FEMA to transfer administration and funding for 
rental assistance for evacuees to HUD beginning January 1, 
2008. Recipients of assistance will be required to pay 30 
percent of income as required with other HUD assistance, with a 
minimum rent of $100.
    Authorizes funds to provide rental assistance for 
households still living in FEMA trailers. Subject to funds, HUD 
is required to offer housing assistance to families in 
trailers.
    Any assistance provided is temporary and only continues so 
long as the household is income eligible.

SEC. 304. VOUCHER ASSISTANCE FOR SUPPORTIVE HOUSING.

    Authorizes appropriations for 5,500 supportive housing 
project-based vouchers from the homeless, seniors and people 
with disabilities.

SEC. 305. PROJECT BASING OF VOUCHERS.

    Allows housing agencies in affected areas to project-base 
more that 20 percent of their vouchers so long as the vouchers 
are used in mixed-income communities, are in low-poverty 
neighborhoods or neighborhoods undergoing revitalization.

SEC. 306. PRESERVATION OF PROJECT BASED HOUSING ASSISTANCE PAYMENTS 
                    CONTRACTS FOR DWELLING UNITS DAMAGED OR DESTROYED.

    Clarifies that HUD shall not terminate housing assistance 
payments contracts for multifamily housing due to destruction 
or damage as a result of the 2005 storms.
    Requires HUD to allow project-based assistance to be 
transferred from damaged/destroyed properties to other 
properties to preserve affordable housing.

SEC. 307. GAO STUDY OF WRONGFUL OR ERRONEOUS TERMINATION OF FEDERAL 
                    RENTAL HOUSING ASSISTANCE.

    Requires GAO to conduct a study of households that received 
FEMA rental assistance to determine if assistance was 
wrongfully or erroneously terminated and to submit a report no 
later than January 1, 2008.

              Title IV--Damages Arising From FEMA Actions


SEC. 401.

    Authorizes appropriations to reimburse landlords who 
contracted with FEMA to provide rental assistance to evacuees 
where those contracts were abrogated by FEMA.

                          TITLE V--FHA Housing


SEC. 501. TREATMENT OF NONCONVEYABLE PROPERTIES.

    Requires HUD to pay FHA insurance claims and take 
conveyance of damaged or destroyed properties notwithstanding 
normal requirements that the properties be habitable. Amounts 
paid out must be provided in advance through appropriations.

SEC. 502. FHA SINGLE-FAMILY INSURANCE.

    Requires that FHA use pre-hurricane creditworthiness in 
determining eligibility of an individual for FHA insurance.

SEC. 503. FHA-NEW ORLEANS HOMEOWNERSHIP OPPORTUNITIES INITIATIVE.

    Establishes an FHA-New Orleans Homeownership Opportunities 
Initiative to transfer homes held by HUD to the New Orleans 
Redevelopment Authority (NORA). Homes within HUD's control--
which have been abandoned, are vacant or have been foreclosed 
upon--will be given to NORA to use for redevelopment 
activities. NORA must make available for low-income homebuyers 
the number of homes conveyed to it by HUD (not necessarily in 
the same locations). NORA must sell homes to low-income 
households who agree to use the home as their primary residence 
for at least 5 years, or to sell only to low-income buyers 
within 5 years. NORA must set sales prices at affordable levels 
and any profits above redevelopment costs will go to HUD. NORA 
must provide for counseling for families; must inspect homes 
prior to sale; and must establish procedures to recapture funds 
where homes are not sold to low-income families, prices exceed 
development costs, and where homes are not used as primary 
residences for 5 years.
    The pilot terminates after 5 years, and at 3 years and 5 
years, NORA must submit a report to Congress on the 
implementation, status and execution of the pilot.

                   Title VI--Fair Housing Enforcement


SEC. 601. FAIR HOUSING INITIATIVES PROGRAM.

    Authorizes at least $5 million in fiscal years 2008 and 
2009 for fair housing activities in affected areas.

Title VII--Improved Distribution of Federal Hurricane Housing Funds for 
                            Hurricane Relief


SEC. 701. GAO STUDY OF IMPROVED DISTRIBUTION OF FEDERAL HOUSING FUNDS 
                    FOR HURRICANE RELIEF.

    Requires GAO to conduct a study on the most effective and 
efficient way to distribute housing assistance after hurricanes 
and other disasters, and to submit a report to Congress within 
6 months of enactment.

     Title VIII--Commending Americans for Their Rebuilding Efforts


SEC. 801. COMMENDING AMERICANS.

    Congress finds that many Americans, individuals, faith-
based organizations, non-profits and community organizations 
provided needed relief aid after the hurricanes and assistance 
in rebuilding efforts and commends Americans for this 
assistance.
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