[Senate Hearing 110-979]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 110-979
 
AFFORDABLE HOUSING OPPORTUNITIES: REFORMING THE HOUSING VOUCHER PROGRAM 

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

                                HEARING

                               before the

                            SUBCOMMITTEE ON
           HOUSING, TRANSPORTATION, AND COMMUNITY DEVELOPMENT

                                 OF THE

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

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                                   ON

 EFFORTS TO REFORM THE HOUSING VOUCHER PROGRAM, INCLUDING S. 2684, THE 
                SECTION EIGHT VOUCHER REFORM ACT (SEVRA)


                               __________

                       WEDNESDAY, APRIL 16, 2008

                               __________

  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                  ELIZABETH DOLE, North Carolina
ROBERT P. CASEY, Pennsylvania        MEL MARTINEZ, Florida
JON TESTER, Montana                  BOB CORKER, Tennessee

                      Shawn Maher, Staff Director
        William D. Duhnke, Republican Staff Director and Counsel

                    Jennifer Fogel-Bublick, Counsel

                       Dawn Ratliff, Chief Clerk
                      Shelvin Simmons, IT Director
                          Jim Crowell, Editor

                                 ------                                

   Subcommittee on Housing, Transportation, and Community Development

                 CHARLES E. SCHUMER, New York, Chairman
                   MIKE CRAPO, Idaho, Ranking Member
DANIEL K. AKAKA, Hawaii              ELIZABETH DOLE, North Carolina
ROBERT P. CASEY, Pennsylvania        MEL MARTINEZ, Florida
JACK REED, Rhode Island              WAYNE ALLARD, Colorado
THOMAS R. CARPER, Delaware           MICHAEL B. ENZI, Wyoming
SHERROD BROWN, Ohio                  CHUCK HAGEL, Nebraska
JON TESTER, Montana
ROBERT MENENDEZ, New Jersey

                     David Stoopler, Staff Director
              Gregg A. Richard, Republican Staff Director













                            C O N T E N T S

                              ----------                              

                       WEDNESDAY, APRIL 16, 2008

                                                                   Page

Opening statement of Chairman Schumer............................     1

Opening statements, comments, or prepared statements of:
    Senator Crapo................................................     2
    Senator Obama
        Prepared statement.......................................    20

                               WITNESSES

Shaun Donovan, Commissioner, New York City Department of Housing 
  Preservation and Development...................................     4
    Prepared statement...........................................    22
Curt Hiebert, Chief Executive Officer, Keene Housing Authority of 
  New Hampshire and Senior Vice President of the Public Housing 
  Authorities Directors' Association.............................     6
    Prepared statement...........................................    28
Barbara Sard, Director of Housing Policy, Center on Budget and 
  Policy Priorities..............................................     8
    Prepared statement...........................................    37
George Moses, Secretary, Housing Alliance of Pennsylvania, 
  representing the National Low Income Housing Coalition.........    10
    Prepared statement...........................................    62
Jack Murray, Edgewood Management Corporation, representing the 
  National Affordable Housing Management Association and the 
  National Leased Housing Association............................    12
    Prepared statement...........................................    75

              Additional Material Supplied for the Record

Letters and list of support for S. 2684, the Section Eight 
  Voucher Reform Act (SEVRA).....................................    82
Prepared statement of Roy A. Bernardi, Deputy Secretary, 
  Department of Housing and Urban Development....................   128


AFFORDABLE HOUSING OPPORTUNITIES: REFORMING THE HOUSING VOUCHER PROGRAM

                              ----------                              


                       WEDNESDAY, APRIL 16, 2008

                           U.S. Senate,    
   Subcommittee on Housing, Transportation,
                         and Community Development,
          Committee on Banking, Housing, and Urban Affairs,
                                                    Washington, DC.
    The subcommittee met at 2 p.m., in room SD-538, Dirksen 
Senate Office Building, Hon. Charles E. Schumer (Chairman of 
the Subcommittee) presiding.

        OPENING STATEMENT OF CHAIRMAN CHARLES E. SCHUMER

    Chairman Schumer. The hearing will come to order. And 
because we have a vote coming up shortly, we are going to try 
to move as quickly as we can.
    First, I want to thank our witnesses. I want to thank 
Senator Crapo for being here. And we are here to talk about 
reforming the Section 8 voucher program.
    The Section 8 Voucher Reform Act, which Senator Dodd and I 
introduced with several of our colleagues last month, has been 
endorsed by all of the major groups involved in the Section 8 
voucher program. Owners, tenants, and voucher administrators 
all stand to benefit from the improvement that this bill makes 
to the program.
    The Section 8 program is one of this nation's most 
important affordable housing programs, serving around 2 million 
households each year. Studies have shown that Section 8 program 
reduces homelessness, overcrowding, and frequent apartment 
moves. The stable affordable housing afforded by the Section 8 
program helps families move to neighborhoods where there is 
less concentration of poverty, which often means better 
schools, lower crime rates, and more opportunities for economic 
advancement.
    So, despite these obvious successes during the last several 
year, HUD action and changes in the formula for funding Section 
8 have undermined the program, making it more difficult to 
administer. As costs escalated earlier this decade, Congress 
made changes to the Section 8 funding formula that attempted to 
control costs in the program. The changes enacted created an 
inefficient system, where some agencies were given funds they 
could not legally use, while others were left with too little 
funding to serve even those families already on the voucher.
    The Center on Budget and Policy Priorities estimates that 
150,000 vouchers were lost, as public housing authorities 
scrambled to adapt funding formulas that changed every fiscal 
year. With a reasonable and efficient formula, 150,000 
additional families could be assisted. In Fiscal Years 2007 and 
2008, Congress reversed the formula changes and again began 
funding public housing authorities based on the actual costs of 
running their programs. Although the restoration of the earlier 
funding formula does allow PHAs to offer additional vouchers, 
it doesn't address the costs and administrative issues still 
affecting the Section 8 program.
    The bill before the subcommittee today addresses the 
challenges faced by Section 8 in a number of ways. The bill, 
first, stabilizes funding. The bill establishes a stable 
funding formula that ensures PHAs will receive funding to cover 
all of the vouchers in use. To help control rising costs, 
agencies are encouraged to lower the cost per voucher in the 
new funding formula, helping create efficiencies in the 
program. It encourages employment. The bill provides a 
standardized earning disregard each year, and provides other 
incentives for families to increase earning in savings. 
Additional earnings by tenants will reduce voucher costs for 
the government.
    It ensures the housing is safe, decent, and adequate. It 
requires effective voucher administration, biannual assessments 
of local voucher programs to ensure they're operating 
efficiently, and also requires fair market rents to be set 
based on smaller geographic areas so that in large metropolitan 
areas tenants have the opportunity to live in all of the areas' 
communities. It encourages housing development and preserves 
affordable housing. It streamlines the requirements and does 
many other good things.
    Before I conclude, I would also like to take a moment to 
address the Moving-to-Work program. I know this has been a 
source of some controversy in the past. While administrators 
feel that the flexibility that the program provides will help 
them control costs, tenants are concerned that the many 
protections provided in abrogated rules and restrictions will 
be lost. In New York, we have organized a series of roundtable 
meetings involving tenants, owners and administrators to 
develop an agreement on the provisions for this bill that all 
sides could support. The continuation of the Moving-to-Work 
program is an important part of the agreement, so I look 
forward to working with Chairman Dodd, Ranking Member Shelby, 
Ranking Member Crapo, and the rest of my colleagues on the 
committee to find a compromise that continues the program but 
creates a new degree of evaluation and accountability.
    I'm now going to turn things over to Senator Crapo, but 
first I would first like to ask unanimous consent that a list 
of supporters and letters of support from a number of 
interested groups be entered into the record.
    Without objection.
    Chairman Schumer. I would also like to thank our witnesses 
again for appearing, and turn it over to Senator Crapo.

                STATEMENT OF SENATOR MIKE CRAPO

    Senator Crapo. Thank you very much, Mr. Chairman. I 
appreciate the opportunity to work with you and to help find 
ways to improve Section 8 housing voucher programs.
    I would like to see the Section 8 voucher rental assistance 
program be in better position to provide the long-term 
assistance to those who are without other options. I hear a lot 
of frustration from the public housing authorities in Idaho 
about the fact that they don't have the flexibility to move 
families toward self-sufficiency and provide help where it is 
most desperately needed. These public housing authorities do an 
amazing job with scarce resources, an I believe is important to 
understand that one size does not fit all, and that a local 
community should be able to adjust the dollars in programs to 
deal with local situations.
    I also appreciate your attention, Mr. Chairman, to the 
Moving-to-Work program. This is a very popular program in 
Idaho, and I intend to push--to expand the number of public 
housing authorities who are able to participate in the Moving-
to-Work program. Moving-to-Work provides the flexibility for 
housing authorities to adjust to their local conditions, and to 
make the Federal programs work more effectively and efficiently 
in their own communities.
    The stated intent was for four goals to be met by 
encouraging the design and implementation of innovative local 
strategies, to reduce costs and achieve greater effectiveness 
in housing programs, to increase housing choices for families, 
to move families toward self-sufficiency while protecting 
extremely low- or fixed-income families or the elderly, and to 
allow for flexibility in funding and programs.
    Senator Sununu has been a strong champion of expanding the 
number of public housing authorities able to participate in the 
Moving-to-Work program, and I appreciate the fact that he's 
here today to talk about this issue and introduce Curt Hiebert, 
who is the CEO of the Keene New Hampshire Housing Authority.
    And, finally, I think it's important to recognize that, 
although there is a lot of support for reforming the Section 8 
voucher program to serve more low-income families, there has 
been some disagreement over the best way to achieve this.
    At this time, I would like to insert into the record HUD's 
written statement; for the record, S. 2664.
    Chairman Schumer. Without objection.
    Senator Crapo. And I want to thank our witnesses for coming 
here today and also for your involvement in this important 
issue.
    Chairman Schumer. Well, thank you.
    I will introduce the four other witnesses, but I will first 
turn it over to Senator Sununu to introduce Mr. Hiebert.
    Senator Sununu. I thank you very much, Senator Schumer, 
Senator Crapo. It is a real pleasure to be here to introduce a 
good friend, Curt Hiebert, who has been a true leader in 
affordable housing, but has been the CEO of the Keene Housing 
Authority for 20 years. He's been active in the affordable 
housing area for much longer than that, longer than I'm sure he 
wants me to relay in any real detail, but he's been just a 
stand-up advocate for doing the right thing, for making sure 
that the ideals you both spoke about--flexibility, innovation 
at the local level, serving tenants--are all priorities, not 
just in his housing authority in Keene but across the State of 
New Hampshire and across the country.
    Curt has participated at a senior level in the National 
Association of Housing Directors, PHADA, who I know has 
testified before this committee before on a range of issues. 
The Moving-to-Work program in particular is a great area of 
expertise for Curt. He has had great success in designing and 
innovating and moving the work program in New Hampshire, and 
has worked very hard on making sure that the goal of 
accountability remains even as we give more flexibility and 
ability to innovate to housing authorities and housing 
directors across the country. Moving-to-Work, I think, has 
great potential because it really does allow different 
solutions to be tailored to local needs, local tenants, local 
economy, local housing situation, and I think it's absolutely 
imperative that the committee find a way to strengthen and 
expand Moving-to-Work.
    I'm pleased to have Curt here to be able to testify not 
just on his experience with Moving-to-Work but also his 
experience with the Section 8 voucher program and other housing 
initiatives in New Hampshire that I think the Members of this 
Committee and the Senate can learn a great deal from.
    Thank you very much for being here, Curt. Thank you, 
Senator Schumer and Senator Crapo.
    Chairman Schumer. Thank you, Senator Sununu.
    Let me introduce our other four guests.
    Shaun Donovan was appointed Commissioner of the New York 
City Department of Housing Preservation and Development in 
March 2004. As Commissioner, Mr. Donovan manages the largest 
municipal developer of affordable housing in the nation, and 
oversees the fourth-largest Section 8 voucher program in the 
country with 27,000 vouchers under management.
    Barbara Sard has been the Center's Director, the Center on 
Budget and Policy Priorities, Director of Housing Policies 
since 1997. Her work focuses on low-income housing policy, 
particularly housing voucher programs and admissions to 
subsidized housing.
    George Moses is the Secretary of the Housing Alliance of 
Pennsylvania and Chairman of the Board of the National Low-
Income Housing Coalition. Mr. Moses has been active in 
advocating for housing policy for the last decade.
    And, finally, Jack Murray is President and Chief Executive 
Officer of Edgewood Management Corporation. He has over 30 
years' experience in the field of property management, and 
oversees a portfolio of over 24,000 units that include private-
market and federally assisted housing.
    Each of your statements, guests, will be read into the 
record. We are going to try to limit you to 5 minutes each so 
we can finish the opening statements before the vote, then 
break for the vote and come back and ask questions.
    So, Commissioner Donovan, you may proceed.

    STATEMENT OF SHAUN DONOVAN, COMMISSIONER, NEW YORK CITY 
       DEPARTMENT OF HOUSING PRESERVATION AND DEVELOPMENT

    Mr. Donovan. Good afternoon, Chairman Schumer, Ranking 
Member Crapo, and members of the Committee. I'm Shaun Donovan, 
Commissioner of the New York City Department of Housing 
Preservation and Development. HPD is the largest municipal 
developer of affordable housing in the nation, and also 
administers the fourth-largest Section 8 program in the 
country. Together with the New York City Housing Authority, 
whose program is the largest in the country, we administer 
vouchers for over 112,000 families in the five boroughs.
    Section 8 is integral to our affordable housing efforts in 
New York, so I'm very happy to be here to testify on S. 2684, 
the Section 8 Voucher Reform Act. I think I speak for the 
entire affordable housing community when I say ``thank you'' 
for taking up this critical and complicated program for review. 
We are in the fifth year of Mayor Bloomberg's New Housing 
Marketplace Plan, a 10-year $7.5 billion dollar plan to create 
affordable housing for over 500,000 New Yorkers. Since Mayor 
Bloomberg came to office, the city has funded over 88,000 units 
of affordable housing, including the 70,000 units started under 
the New Housing Marketplace Plan. Of course, we couldn't have 
had such success without the partnership of the Federal 
Government and the unflagging advocacy of Senator Schumer and 
our great congressional delegation.
    Unfortunately, the last few years have not been good ones 
for our Section 8 program. Yearly changes in the way Section 8 
voucher funding is allocated to HUD to PHAs has made 
administering a Section 8 program very challenging. Funding 
uncertainty, combined with large increases in our enhanced 
voucher program, have led to large swings in the size of HPD's 
program. At this point, we're utilizing about 93 percent of 
authorized vouchers when only 2 years ago we were using city 
funds to supplement our program because we were at 102 percent 
utilization.
    SEVRA's greatest result, therefore, will be restoring 
predictability to the way in which Section 8 funds are awarded. 
Under SEVRA, a PHA's voucher funding will be based on actual 
costs in the preceding year. In a much-needed reversal, PHAs 
would now be able to count on the fact that vouchers leased 
this year will be renewed next year. Predictability will allow 
PHAs to maximize use of limited resources, an imperative in a 
market such as New York City's, with a 3 percent vacancy rate.
    In tight markets such as New York City's, project-based 
vouchers could be an important tool for increasing the supply 
of affordable housing, but there are barriers within the 
current structure to making the program work.
    This bill makes three critical changes to the program. 
First, it allows 40 percent of units in a project in tight 
market areas to be project-based rather than the current 25 
percent. This is important because finding buildings in which 
to project-base vouchers in New York City is a significant 
obstacle to success. Second, your bill allows project basing in 
cooperatives and buildings with elevators. And, third, it 
changes the initial contract term to 15 years so that the 
project-based contract runs concurrently with the Low-Income 
Housing Tax Credit compliance period.
    The bill also provides common sense administrative 
flexibilities that cash-strapped housing authorities will 
benefit from. Sixty-two percent of HPD's Section 8 families are 
on a fixed income. By changing the requirement for income 
certifications for this population to once every 3 years from 
once every year, we will be able to save on administrative 
costs. In 2007 alone, HPD performed over 43,000 inspections on 
Section 8 units. With the passage of SEVRA, our inspection 
workload will decline considerably because we will be able use 
to inspections already performed that are equivalent to the 
voucher program inspection standards. This administrative 
streamlining will allow PHAs to make more efficient use of lean 
budgets.
    There are many other provisions in SEVRA that we believe 
will make the Section 8 program more effective, but in the 
interest of time I will submit them for the record.
    There is one thing not in the Senate Bill, however, that I 
hope will be added, and that is the Housing Innovation Program, 
or HIP, the House bill's name for the current Moving-to-Work 
program. New York City is not a Moving-to-Work site, but we 
believe we are a good candidate for an updated version of the 
program, one which balances the need for PHA flexibility and 
tenant protections.
    In September and October of last year, as Senator Schumer 
mentioned, HPD and NYCHA held roundtables with representatives 
from the Section 8 tenant advocacy and owner communities. The 
full recommendations of that group, which the committee very 
generously considered when drafting this bill, are submitted 
for the record. The group agreed that designating New York City 
as a HIP-lite site would give us much needed budget 
flexibility. NYCHA has an operating shortfall of $195 million 
in 2008 and last month had a reduction in force of 427 
employees. The budgetary fungibility that HIP-lite allows would 
permit NYCHA to spend money where it is needed most and balance 
priorities. However, flexibility mustn't come at the expense of 
tenants; and we believe that tenant protections, such as 
organizing participation and hearing rights, need to be 
codified in the HIP provisions, should they be added to the 
bill.
    Thank you for the opportunity to testify before you today. 
I'm happy to answer any questions you have.
    Chairman Schumer. Thank you, Commissioner.
    Mr. Hiebert.

   STATEMENT OF CURT HIEBERT, CHIEF EXECUTIVE OFFICER, KEENE 
HOUSING AUTHORITY OF NEW HAMPSHIRE AND SENIOR VICE PRESIDENT OF 
     THE PUBLIC HOUSING AUTHORITIES DIRECTOR'S ASSOCIATION

    Mr. Hiebert. Thank you, Mr. Chairman, Ranking Member. I'm 
Curt Hiebert. I'm CEO of the Keene New Hampshire Housing 
Authority, and I do appreciate this opportunity to discuss this 
legislation with you. My testimony is in support of this bill, 
and I urge you to support it as well. I would also like to 
thank Senator Sununu for his most gracious introduction.
    I'm here representing the Keene Housing Authority, but I 
also have the honor of serving as a Senior Vice President of 
the Public Housing Authority Directors Association, which 
represents over 1,900 Housing Authorities across the United 
States. I participated over the past several years in 
developing industry rent reform proposals and positions, and 
have participated in discussions of many provisions in the 
Housing Innovation Program contained in the House version of 
SEVRA.
    The Keene Housing Authority was one of the original 24 
Housing Authorities that were designated as Moving-to-Work 
demonstration sites, and we continue to operate all of our 
public housing in Section 8 under that program. The flexibility 
that was granted under that program has made some dramatic 
differences in our community, which I will itemize later. Our 
participation in this program has allowed us to work better 
with our community and with our residents and to provide a 
program that serves the neediest of our region, providing 
stability to those on fixed incomes and yet providing a system 
that encourages families to move toward self-reliance. This 
bill, as it stands now, misses an opportunity to authorize and 
modestly expand this program, which is an innovation engine for 
the public housing and Section 8 programs.
    SEVRA does contain a large number of detailed provisions, 
many of which are very attractive to housing sponsors, tenants 
and participants, but there are a couple of items that are also 
missing. Some of the needed and welcomed provisions, the rent 
and income provisions, allowing biannual inspections, and the 
FSS fee entitlement and Housing Choice Voucher program, and 
enshrining a rational renewal and administrative fee funding 
system that has been dealt with chaotically in the past through 
appropriations and regulation interpretation.
    However, the Senate version of SEVRA also includes some 
problematic provisions. Imposing a permanent cap on vouchers in 
use of 103 percent of the sponsor's authorized units. Though 
absorption of incoming portable tenant-based vouchers is an 
acceptable solution to a long-standing problem, the method 
described is cumbersome and needs refining. And authority for 
the Secretary of HUD to redefine the basis for voucher 
administrative fees is a problem.
    Most importantly, though, there are two omissions: The 
Senate bill does not include authority to establish alternative 
rent structures and assisted housing; and the Senate bill, as 
has been mentioned several times, does not include permanent 
authorization of the Moving-to-Work demonstration. Although 
ongoing discussions of problematic provisions in the Senate 
version are important--and we expect to resolve a number of 
these concerns--the omissions are particularly troubling.
    The discussions that produced the provisions of the Housing 
Innovation Program and the House SEVRA bill involve significant 
give and take on the part of a number of stakeholder 
communities, and these provisions should form the foundation 
for MTW or HIP authorization. These provisions should provide 
for, one, a modest expansion of the number of agencies under an 
MTW or HIP agreement; assurance that newly participating 
agencies will reflect the diversity among local housing 
authorities as to size and location; and a new status called 
``HIP-lite,'' which provides funding but not policy 
flexibility.
    Also important is an application of a number of tenant 
protections to participates at MTW or HIP participating 
agencies, elimination of the uncertainties about the--by the 30 
current participants concerning the future of their MTW status.
    To give you an example, the MTW program in Keene and many 
of the other participating housing authorities have had some 
strikingly successful changes in their communities. In 1999, 47 
percent of the heads of household in the families of the Keene 
Housing Authority were working full time. Last year, 65 percent 
were working full time. In that same period of time, average 
income for families increased by over 30 percent. In part, this 
was because our system did not discourage increase in income 
but actually rewarded it. Our system of rent steps and the 
vital service coordination that we provide does not penalize 
rises in income, but instead our program encourages job skills, 
education, financial competency, and ambition.
    At the same time, those neediest are protected by our 
Safety Net provisions in our program. The key is our program 
would not work everywhere--the program that works in Keene 
would not necessarily work in other communities--but the 
flexibility contained in Moving-to-Work, we were able to make a 
program that is good for our residents and our stakeholders. 
Other communities and housing authorities should have the same 
opportunity.
    Please make sure that a provision in SEVRA is for the 
Moving-to-Work or HIP program that would, one, make the program 
work; two, grandfather the existing MTW agencies that are in 
compliance with their agreements; three, modestly increase the 
number of agencies; and, four, ad an effective and easily 
administered mechanism to evaluate the program.
    Thank you very much for this opportunity, and I will be 
glad to answer any questions.
    Chairman Schumer. Thank you, Mr. Hiebert.
    Ms. Sard.

 STATEMENT OF BARBARA SARD, DIRECTOR OF HOUSING POLICY, CENTER 
                ON BUDGET AND POLICY PRIORITIES

    Ms. Sard. Thank you, Chairman. My name is Barbara Sard. I'm 
the Director of Housing Policy at the Center on Budget and 
Policy Priorities. My testimony today first will briefly review 
why the Section 8 Voucher Reform Act enjoys unusually broad 
support, and then will address why it is important for the 
Banking Committee to approve S. 2684 promptly so that final 
legislation may be enacted this year.
    As the chairman mentioned in his opening remarks, SEVRA, as 
passed by the House and as introduced recently in the Senate, 
is supported by a full spectrum of organizations that represent 
stakeholders in the Section 8 Housing Choice Voucher program. 
Unfortunately, as a member of that housing advocacy community, 
I can confess that such unity in our community is rare, and I 
think we should applaud the fact that this is such a common 
sense bill that it has appealed to such a broad range of 
stakeholders.
    There are many provisions in the bill, but to make them 
kind of simple to understand, I have put them into three 
categories: The first is common sense reforms to reduce 
administrative burdens for everyone. For example, changes to 
the rules governing inspections and rent policies will benefit 
owners, families, and public housing agencies alike by reducing 
the frequency of required actions, and allowing Housing 
Authorities to rely on inspections or income verifications 
performed by other agencies, and simplifying the Rules for 
setting tenant rents. Changes to portability policies, the 
rules that allow someone to take a voucher from one community 
and use it to live in another, will substantially reduce the 
administrative cost was such moves. And SEVRA accomplishes such 
increased efficiency while retaining key tenant protections, 
which is a measure of the balance in the bill.
    In addition, SEVRA makes a number of changes that will 
support work. As the Ranking Member mentioned, increased self-
sufficiency is one of his goals, and I think this bill goes a 
long way to address these goals. It has a new earnings 
disregard, and other aspects of the rent policy also create a 
financial incentive for families to work, and the changes in 
the Family Self-Sufficiency program in terms of how 
administrative fees are allocated and how the funding policy 
works better with FSS will make it much easier and create an 
incentive for more agencies to have FSS programs.
    Second, SEVRA will update key policies in the program which 
haven't been comprehensively addressed in the last 10 years. 
There are many examples of this, but just a few. The bill takes 
advantage of new data sources to produce fair-market rent 
figures for smaller areas that can be more accurate and, 
thereby, be more efficient in the allocation of funds. SEVRA 
uses new rent and income information that agencies already 
submit to HUD to report on rent burdens, and recent data 
indicate that rent burdens in the program have gotten 
excessively high.
    And SEVRA will also update the Rules that govern the 
project-based voucher program that was addressed by Congress in 
2000, but, as Mr. Donovan mentioned, some changes are needed to 
better coordinate the program with the low-income housing tax 
credit, work better for supportive housing for the homeless, et 
cetera.
    But perhaps most importantly, SEVRA creates new flexibility 
for all agencies. It will help vouchers be a Preservation tool 
for housing that is privately owned and being lost. It will 
help respond to the current foreclosure crisis by creating 
mechanisms for housing agencies to help tenants in buildings 
where the owners are financially troubled and have been 
struggling to make utility payments.
    And perhaps most importantly, it will help the program 
better respond to growing housing needs. Escalating 
foreclosures and the softening economy are exacerbating the 
need for rental assistance, and the utilization of already 
authorized vouchers has been substantially decreased. In 2007, 
we were using only 91 percent of the vouchers that Congress has 
authorized; in 2004, we were using 98 percent. Many agencies 
are doing better in this last year because of funding 
improvements which Congress made in 2007 and 2008, but to 
continue those improvements, they need a permanent change in 
authorizing law.
    On Moving-to-Work, you have heard people talk about a 
modest expansion; I want to underscore that. Already under the 
House provision, one-third of assisted families can be in 
Moving-to-Work agencies. That is far more than is needed to 
learn new lessons from local experimentation and, as Mr. 
Donovan and Mr. Hiebert mentioned, protecting tenants from 
overly harsh changes in policy while those changes are being 
made, and we learn through an improved evaluation method are 
also vital.
    Thank you very much, and I look forward to answering any 
questions.
    Chairman Schumer. I think we only have about 3 minutes left 
to the vote, so we are going to break, and we will come back as 
soon as possible and hear from Mr. Moses and Mr. Murray and ask 
questions. So, the hearing is temporarily in recess until we 
return.
    [Recess.]
    Chairman Schumer. The hearing will come to order.
    And, Mr. Moses, your entire statement will be read into the 
record, and you may proceed.

   STATEMENT OF GEORGE MOSES, SECRETARY, HOUSING ALLIANCE OF 
  PENNSYLVANIA, REPRESENTING THE NATIONAL LOW INCOME HOUSING 
                           COALITION

    Mr. Moses. Chairman Schumer, Ranking Member Crapo, and 
other members of the subcommittee, thank you for inviting me to 
testify here before you today on proposals to reform the 
Housing Choice Voucher program.
    I am George Moses. I am Chair of the Board of Directors for 
the National Low-Income Housing Coalition, which I'm 
representing here today. I'm also on the Board of Directors of 
the Housing Alliance of Pennsylvania.
    I lived in project-based Section 8 properties between 1990 
and 2006. I was elected Chair of the National Low-Income 
Housing Coalition in 2006, and I am the first tenant 
representative to serve in that role.
    The National Low-Income Housing Coalition strongly supports 
the Housing Choice Voucher program, and we are pleased that the 
subcommittee is having hearings on this critical program. We 
are particularly pleased that the bill adopts virtually all of 
the recommendations that came from the 2005 voucher summit 
sponsored by the National Low-Income Housing Coalition, 
including recommendations on income targeting, funding, 
inspections, portability, rent simplifications, project-basing 
vouchers, and enhanced vouchers.
    My written testimony provides comments on these and other 
aspects of the Section 8 Voucher Reform Act, S. 2684. During 
this time, I would like to highlight a couple of the points.
    We are, of course, pleased that the bill fixes the voucher 
funding distribution system. In 2004, HUD declared the voucher 
program broken and then proceeded to break it. This bill would 
correct those actions which prevented 150,000 families with 
children, people with disabilities, senior citizens, and others 
from becoming housed in a safe, decent, affordable way. This 
bill would restore reliability and credibility to the voucher 
program.
    The bill encourages increased income and provides much 
needed simplification to rent-setting policies, things that 
residents and housing agencies have long sought. These 
important reforms are done while maintaining the broad standard 
that tenants claim no more than 30 percent of their adjusted 
income for their housing. It is critical that the rents be 
connected to the incomes of the individual households so that 
one basic principal of assisted housing is preserved: 
Affordability.
    Mobility is another cornerstone of the voucher program. 
Vouchers should not lock families into certain neighborhoods or 
communities. The current system for porting vouchers from one 
administration's agencies geographical area to another is 
broken and is in need of urgent repair for the sake of both 
tenants and administrative agencies. With some safeguards for 
lack of funding, S. 2684 would require receiving agencies to 
absorb incoming vouchers. The phasing in of this requirement is 
prudent and would hopefully result in a reliable long-term 
portability mechanism.
    The inclusion of 20,000 new vouchers a year for the next 5 
years is also welcome. However, the broad improvements of this 
bill should allow for a much larger expansion of the voucher 
program. The National Low-Income Housing Coalition supports 
100,000 new vouchers a year for the next 5 years at such a 
level new vouchers could significantly impact the nation's 
housing crisis. And we say this because most of the PHAs across 
the country waiting for Section 8 vouchers are closed; 
therefore, many tenants cannot get a voucher.
    Finally, we are glad that S. 2684 does not provide for an 
expansion of the Moving-to-Work program. The failure of HUD to 
establish a program with an adequate data collection system has 
meant that no one, neither HUD, Congress, the HUD Inspector 
General, or tenants living in the projects subject to the 
Moving-to-Work accesses the effectiveness of the program at 
meeting its goals of reducing costs, promoting tenant self-
sufficiency, increasing tenants' housing choices.
    But what we do know about the program is troublesome. For 
example, the Housing Authority of the city of Pittsburgh, my 
home town, was found by the HUD Inspector General to have 
stockpiled more than 81 million of HUD funding during the first 
4 years of its Moving-to-Work status, all completely legal 
under the Moving-to-Work Rules. Meanwhile, the Pittsburgh 
Housing Authority Agency did not modernize its 6,700 public 
housing units and failed to serve 3,000 families waiting for 
vouchers. HUD's Real Estate Assessment Center at the time said 
30 percent of Pittsburgh's developments had a physical 
inspection score below 70 out of a possible 100. According to 
the HUD's Inspector General, the relaxation of the requirements 
under Moving-to-Work allowed the housing authority to plan and 
execute a minimal modernization plan without penalty. The only 
thing that the community and the residents wanted from this 
Moving-to-Work program was an evaluation, tell us what you did, 
who you serve, how many people improve lives with this, and we 
never got that information.
    Again, we believe that S. 2684 is an extremely important 
bill, and we urge swift enactment. We would also like you to 
take up the National Affordable Housing Trust Fund Act of 2008, 
S. 2523. This legislation would create an off-budget housing 
trust fund to produce and preserve housing for our nation's 
lowest-income people. The bill was introduced in December, and 
we hope that it will move quickly forward. We urge all Senators 
to join Senators Schumer, Reed, and Menendez of this 
subcommittee in cosponsoring this legislation.
    Again, I thank you for giving me the opportunity to testify 
before you today, and I will be available for questions.
    Chairman Schumer. Thank you, Mr. Moses.
    Mr. Murray.

  STATEMENT OF JACK MURRAY, EDGEWOOD MANAGEMENT CORPORATION, 
    REPRESENTING THE NATIONAL AFFORDABLE HOUSING MANAGEMENT 
    ASSOCIATION AND THE NATIONAL LEASED HOUSING ASSOCIATION

    Mr. Murray. Thank you, Chairman Schumer; and thank you, 
Ranking Member Crapo for the time that you are giving us on 
these issues. My name is Jack Murray. I'm here representing two 
very good trade associations: The National Affordable Housing 
Management Association and the National Leased Housing 
Management Association. The National Leased Housing Association 
represents interests of owners and developers and lenders and 
managing agents, and has over 500 organizational members that 
all work with Section 8, both project-based and vouchers, 
across the nation. National Affordable Housing Management 
Association is a trade association which represents multifamily 
property managers and owners whose mission is to provide 
quality affordable rental housing. Likewise, NAHMA is the voice 
in Washington for 20 regional affordable housing management 
associations.
    We commend both of you for your leadership, and thank you 
and the committee members for your valuable work addressing the 
nation's need for affordable rental housing. We are pleased and 
honored to present our views on the Section 8 Voucher Reform 
Act, SEVRA.
    The Section 8 program has long served as America's primary 
rental subsidy program, and we believe it has been largely 
successful in achieving the goal of assuring decent, safe, and 
affordable housing for low-Income families and the elderly. We 
do not believe that the Housing Choice Voucher program is in 
need of a major overhaul, but are convinced that it can be 
improved upon with the changes outlined in the SEVRA 
legislation. The bill has the broad support of so many national 
housing organizations as outlined in the attached letter to the 
committee. The groups include the National Multihousing 
Council, the National Association of Realtors, Home Builders, 
National Apartment Association--we could go on and on.
    Our testimony will focus on three particular interests to 
NAHMA and National Leased Housing: Inspections.
    The success of the voucher program is dependent on the 
willingness of owners and landlords to accept voucher tenants. 
These organizations have worked over the years to convince the 
professional apartment managers to participate in the voucher 
program, and many have; but there are a number of program 
requirements that give landlords pause, particularly with 
regard to the inspection standards. Renting to a voucher holder 
should not cost a landlord more than what it does to rent to an 
unsubsidized resident, but it often does due to the duplicative 
inspection standards. Before a Section 8 voucher holder can 
rent a specific apartment, the administering agency must first 
inspect the unit and confirm it complies with Housing Quality 
Standards. Such unit-by-unit inspections cause intolerable 
delays and do not necessarily satisfy HUD's objective of 
protecting residents since many of these properties already 
inspect other Federal programs.
    And I would depart from my testimony to say this really is 
needed in the cities like D.C. and New York City and other 
places because of the tight market there. If they've got a 
choice of a person coming in with a check in their hand or 
person coming in with a voucher, they're going to take the 
check every time because they don't know when they are going to 
be able to move into the voucher holder until after an 
inspection.
    Delays caused by the initial inspections and related 
processing delays cause apartments to remain vacant. The 
apartment industry relies on seamless turnover to meet its 
overhead costs, and the financial implications of such delays 
are enough to deter many owners from participating in the 
program. NAHMA and National Lease Housing strongly support 
SEVRA's provisions that address current redundancy in Federal 
inspection programs by permitting housing agencies to approve 
the lease-up of apartments that have recently been inspected by 
FHA, home or the low-Income housing tax credit program. The 
residents were provided much-needed housing sooner, and the 
owners are not losing income due to delayed move-ins. Under the 
bill, housing agencies will continue to inspect the units but 
will do so within 30 days after the tenant moves in. Further, 
SEVRA recognizes that minor repairs can be made after the 
tenant moves in, a provision supported by our organizations.
    SEVRA also permits housing agencies the discretion to 
inspect apartments occupied by ongoing voucher residents every 
other year instead of annually. We support that provision for 
professional landlords but recommend that small apartment 
properties, maybe 20 units or less that are not generally 
professionally managed, might be inspected every year.
    NAHMA and National Leased Housing are especially pleased 
that SEVRA incorporates Senator Menendez's legislation 1218, 
Limited English Proficiency, which allows HUD to better serve 
persons with limited English proficiency by providing technical 
assistance to recipients of Federal funds. HUD's Limited 
English Proficiency guidelines became effective on March 2007. 
The guideline states that recipients of HUD funding, including 
affordable housing providers, have an obligation to provide 
translated documents and oral interpretation services to all 
the many different languages that are in that area. 
Unfortunately, HUD provided no additional funding to provide 
the offset of the cost of providing those services. Another 
major concern with the guidance was HUD's failure to identify a 
specific list of documents housing providers would be expected 
to translate.
    Last summer, a coalition of multifamily housing 
representatives and civil rights advocates proposed the LEP 
language which is included in SEVRA. Our compromise addresses 
the cost and the vagueness. SEVRA's LEP language is strongly 
supported by NAHMA and National Leased Housing.
    Project-based vouchers, if I can just finish up. Our 
members are actively involved in the operation and development 
of affordable rental housing. We are particularly pleased that 
SEVRA would provide flexibility and consistency with regard to 
use of vouchers with low-Income housing, particularly expanding 
the contracts from 10 years to 15 years, and allowing the 
housing agencies to move from 20 percent to 25 percent is 
project-based. All of these things help both the landlord and 
the residents.
    At the request of a property owner, they would also allow a 
PHA to provide existing residents with project-based vouchers 
in lieu of enhanced vouchers when owner opts out of any 
federally subsidized program. This option will protect the 
residents while ensuring that the actual units are preserved as 
affordable.
    Conclusion: Affordable housing is sorely lacking in 
America. According to Harvard, 35 million households spend 30 
percent. . . .
    Chairman Schumer. You know you could finish your sentence 
or so.
    Mr. Murray. Oh, that's OK, you know where I'm going.
    Chairman Schumer. Thank you. We do, indeed. And thank you 
for your excellent testimony, Mr. Murray, all the testimony was 
very good.
    I'm going to defer to Senator Crapo who has another 
appointment to which he must go, and then I will ask my 
questions. So, Senator Crapo, take as much time as you need.
    Senator Crapo. Well, thank you very much, Mr. Chairman, for 
your kind accommodation. I just have one question.
    As I indicated in my opening remarks, I'm very interested 
in the Moving-to-Work program. I would like to see my state, 
Idaho, have the opportunity to participate in this program. But 
as I look at the numbers, it kind of looks daunting. Right now, 
there are about 30 Moving-to-Work programs authorized, and 
about 20 of those, I think, are actually in effect and 
operating. Just to give you some statistics--and these are 
rough, at least as to the national numbers--there is about 2 
million vouchers in the country; in Idaho there is 6,500. There 
is about 3,000 agencies in the country; in Idaho, there is 
five.
    So, as I look at trying to get two or three of my agencies 
access to the Moving-to-Work program with those kind of 
statistics, it becomes evident that I want to see a big 
expansion of the opportunity to get into the Moving-to-Work 
program.
    So, really, the question I have is, if the housing 
authority already operates a successful family self-sufficiency 
program and has a satisfactory or higher CEMAP rating for the 
previous 3 years, then one would assume that that Housing 
Authority is able to meet their and their community's and HUD's 
expectations. Why shouldn't we provide an avenue for these 
housing authorities to be given the discretion to elect to move 
into the Moving-to-Work program and then tailor the Section 8 
programs to the local needs as opposed to the less flexible 
requirements that they otherwise deal with? In other words, why 
shouldn't we just open this up?
    I throw that out to the whole panel.
    Mr. Hiebert. I would be glad to jump on that, Senator. Part 
of it is the balance that you need to maintain. Part of it is 
accountability of HUD being able to administer varying 
programs. You're preaching to the choir, if you're talking to 
me about expansion of this program. I think it's--the future of 
public housing and Section 8 is that exact flexibility that 
you're talking about.
    A lot of things that have been done in 1999 and 2000 in the 
Moving-to-Work program, some of them have already been 
initiated in the general program because they proved not to be 
effective.
    There is concern that, if some innovations are administered 
and they don't turn out to be good, you don't want them 
replicated. However, I think that the accountability, if it is 
there, it should be expanded to as many housing authorities as 
possible. And in the original HIP, in the House bill, there is 
a suggestion that the distribution be equitable geographically 
and size of housing authorities, both.
    Senator Crapo. Thank you.
    Ms. Sard.
    Ms. Sard. Just to add to that, the important thing in 
authorizing law, I think, is to take advantage of the lessons 
learned and spread them to everyone and not make it a 
privileged few; and to do that, we need to, yes, allow 
experimentation, but to do it in a way that we can actually 
learn something and make reasoned conclusions about what works 
and what ought to be expanded. And in order to do that, the 
experiment can't be too large, or managing the gathering of 
data and the assessing of it becomes expensive and unwieldy.
    And if we give in again, as we did in the first stage of 
MTW, and say, ``Well, it's just going to be too expensive and 
too difficult to learn anything from this, so let's just let 
people do it,'' we will end up in the same bind where agencies 
that should be allowed to benefit from flexibility and new 
lessons won't get that opportunity. So, I think that, in order 
to achieve your goal, we have to take this in measured steps.
    I would add that the House bill does not necessarily give 
preference to high-performing agencies to be selected for MTW, 
and that is a change that, if the Senate wanted to consider--
there may be differences of opinion on that on the panel, but 
I, for one, would support it, so I think that's important.
    But I think it's important to recognize that the changes 
that SEVRA would make would increase flexibility across the 
board for agencies. So, while I appreciate your concern for 
MTW, I think it's really important to recognize a lot of the 
goal you're seeking is achieved by enacting SEVRA.
    Senator Crapo. Well, thank you.
    Mr. Chairman, from what I hear, I'm going to continue to 
advocate for ways to get Idaho agencies to have the flexibility 
to be involved, but maybe what we will need is an earmark in 
the bill to designate the Idaho agencies as part of the study. 
How would that work?
    Chairman Schumer. I, for one, have nothing against earmarks 
as long as they are public, debated, and honorable.
    Senator Crapo. I agree with you.
    Chairman Schumer. OK.
    Mr. Moses. Mr. Chairman, if I might----
    Chairman Schumer. Yes, Mr. Moses.
    Mr. Moses. To come back and answer Senate Crapo's question, 
we are not just only talking about self-sufficiency in those 
programs. We are talking about an ability to change rent 
standards. Example. In Pittsburgh, we just learned through, 
unbeknownst to publications, that they were raising the rent to 
the minimal rent to $150, and we went to the public housing 
communities, and we asked, did you know these changes were 
taking place? And they said no, we were never conferred, talked 
about it, doing it like this.
    And as you said in your opening statement, sir, this could 
not be just as all housing authorities can be judged to be the 
same because there are so many of them, and they do things so 
differently across the country.
    So, in looking at this, we must be able to look at what's 
done, ask for a good evaluation, as Ms. Sard said about 
collecting data and information, that we can then make a good 
determination on what's good and what's bad because, in 
Pittsburgh, when we asked for that sort of evaluation, we were 
told, ``Well, it's not in the rules, so we don't have to do 
it.''
    Senator Crapo. Thank you very much. I appreciate all these 
perspectives.
    And again, thank you, Mr. Chairman, for allowing me to do 
this, and I apologize I will have to slip out.
    Chairman Schumer. No problem. Thank you, Senator Crapo, for 
coming to this hearing, and now I will go on with my questions.
    First. Mr. Murray, as you say in your testimony, the 
success of the voucher program is dependent on landlord 
participation. What are the largest barriers to landlord 
participation, and are we moving in the right direction with 
the Section 8 Voucher Reform Act?
    Mr. Murray. Yes, sir. Yes, sir, I think we are moving in 
the right direction with this.
    Chairman Schumer. Mr. Moses was moving in the right 
direction with pushing the button for you.
    Mr. Murray. Yes, absolutely, yes, sir.
    Getting these inspections so that you don't have to hold up 
the move-in of a resident so that the vacancy is kept less will 
help a number of properties, but will also help the owner to 
want to take these vouchers because, right now, many of them 
don't want to because they don't know when the inspection's 
coming or what the problems are going to be, and this helps get 
beyond that. I think that's very good.
    Chairman Schumer. Good.
    Mr. Donovan, I'm troubled by your testimony that 
congressional interference with the voucher funding formula has 
led to a decrease in the number of families being served. How 
many more families in New York City could have been served over 
the past few years if the funding formula had been stable and 
predictable? And will the reform act help stabilize funding so 
you can serve those additional families?
    Mr. Donovan. Currently, I would estimate that roughly 
10,000 more families could be served, if we had not had the 
uncertainty and the ups and downs that we have had over the 
last few years.
    And I would just emphasize that this has been both ups and 
downs. As I mentioned in my testimony, because of the 
unpredictability and the changes in the formula over the last 
few years, we have actually gone from being underutilized to 
overutilized to underutilized in a very short period of time, 
and so that piece is incredibly important.
    What I would also mention about the formula as well is 
that, in some ways, the budget-based formula we have lived with 
over the last few years has been the worst of both worlds. It 
has gone to a budget-based system which was intended to 
encourage savings yet, on the other hand, has not allowed us to 
go above a hard cap on the number of vouchers utilized. And one 
of the very positive things about your bill would be to lift 
that cap.
    Just to be clear, any savings we could have achieved would 
not have allowed us, under the prior formula, to actually serve 
more families. What this would allow us to do and what it would 
give us is a real incentive for the kind of savings and 
efficiencies that I think were intended all along, but frankly, 
because of the flaws in the formula, were never able to be 
achieved----
    Chairman Schumer. Sounds like a free-market solution, to a 
government agency.
    Ms. Sard, do you want to comment on that? Are you the same 
Ms. Sard I went to law school with?
    Ms. Sard. I'm glad you remember that.
    Chairman Schumer. How do you like that.
    Ms. Sard. We were even in the first section in our first 
year.
    Chairman Schumer. Our contracts teacher just passed away--I 
just read it in the paper--but he was a great teacher.
    Ms. Sard. We analyzed data for agencies throughout New York 
State as well as for the states represented by other members of 
the Banking Committee, and New York is an unfortunate example 
of the typical pattern. In 2004, agencies in the state were 
using 98 percent of their authorized vouchers; by 2006, that 
had gone down to 87 percent, and it improved somewhat last 
year. And we estimate that, in New York State, nearly 27,000 
additional families could be served this year with the money 
that agencies have, but it's very risky for agencies to put 
those vouchers out on the street. It's risky for landlords to 
agree to accept them, unless Congress passes a law that makes 
clear that the funding policy will provide funds for those 
vouchers the next year.
    Chairman Schumer. Right.
    And let me just, you know, the statement the administration 
submitted said that PHAs in the present law are provided 
incentives to increase costs under the bill. They also say that 
we should rebenchmark every 3 years.
    Can you comment on this? And then Mr. Hiebert and Mr. 
Donovan as well.
    Ms. Sard. I think it is--perhaps they fail to understand 
how the bill would work because it's just false to say that 
costs would increase.
    It is important to look at--there are two types of costs in 
the voucher program. There is the cost of the program overall, 
and then there is the cost per voucher. The costs of the 
program overall remains absolutely within the control of 
Congress. The appropriators decide how much they are going to 
spend. If there is not enough to fully fund the program, then 
payments are prorated to the remaining agencies. So, that's 
just false.
    Chairman Schumer. Right.
    Ms. Sard. On the per-voucher cost, your bill creates a 
complex balance of different forces so that, on the one hand, 
it allows agencies to pay more in order for families to move to 
more expensive areas. It also, by fixing the fair market rents 
for smaller areas, would reduce some payments.
    And as Mr. Donovan said, by allowing agencies to go over 
the cap, it creates an incentive for agencies to keep each 
voucher costing less so they can serve more people. It creates 
the right balance of incentives in a complex program.
    Chairman Schumer. Right.
    Comments from Mr. Hiebert.
    Mr. Hiebert. Yes, Senator, I would agree with Barbara on 
that, but also I would like to add something. The additional 
flexibility under the Moving-to-Work program with our Section 
8, we were able to have utilization rates upwards of 108 to 110 
percent, to be able to serve up to 10 percent more people than 
otherwise would have been allowed.
    Also different populations that are not presently allowed 
under the Housing Choice Voucher program are available also 
under the MTW program.
    Mr. Donovan. Senator, one final point I would make on that 
as well, one of the key issues, I think, has been that there 
are programs, much as we might not like to admit it as people 
who manage voucher programs, there are programs around the 
country that are not being well managed. And currently, under a 
formula, or historically under a formula that used a 3-year-old 
or a 5-year-old benchmark for how budgets were set, there was 
really no incentive there from a funding basis to get out of 
that cycle of mismanagement.
    This funding formula would move to a system where, if you 
don't fully utilize your funds, they could be taken away, and 
that is both overall the potential for cost savings but, on an 
individual basis for those housing authorities, an incentive to 
better manage the program. I think something we could all agree 
is a positive thing.
    Chairman Schumer. One gets the feeling that much of the 
administration's view was motivated by spending the least 
amount of money possible, no matter how many fewer people are 
served, and no matter how less efficient the program is.
    Would either of you, Mr. Murray or Ms. Moses, disagree with 
what I have to say?
    Mr. Murray. I wish I could.
    Chairman Schumer. How about you, Mr. Moses?
    Mr. Moses. No comment.
    Chairman Schumer. No comment. OK.
    Finally, Mr. Donovan, HUD submitted a statement for today's 
hearing that says this bill would result ``in a more 
complicated and less effective program than we have today.''
    I take it you very much disagree with that, from your 
previous comments?
    Mr. Donovan. Well, I would go back to the discussion we had 
with Senator Crapo when he was here, and I think the important 
thing to recognize here is that, while we can discuss whether 
it's in HIP or HIP-lite, which we certainly support the 
availability of and the ability to do that. The fundamental 
purpose to this bill, and I think why there is such broad 
support across so many stakeholders, from owners to advocates, 
et cetera, as well as those of us who run the programs is that 
this bill does lead to fundamental simplification of the 
program. Administrative reforms, reforms around eligibility and 
rent setting, the inspection protocols, all of those things 
will lead to a simpler program to administer, to live with, if 
you're a resident, or to live with if you're an owner.
    So, I think that's why there is such broad support for many 
of these fundamental common sense reforms.
    Chairman Schumer. Anyone else, final comments?
    Well, then, I can assure all of you that Senator Dodd and I 
are going to try to move this legislation which seems to meet 
with your approval, whether you're a big authority or a small 
authority, whether you represent tenants or you represent the 
landlords. Seems to be pretty good. I would say to the 
administration, ``You're odd man out; better get with it.''
    Anyway, I thank everybody for being here.
    The hearing is adjourned.
    [Whereupon, at 3:27 p.m., the hearing was concluded.]
    [Prepared statements and additional material supplied for 
the record follow:]

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