[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]
THE SECTION 8 VOUCHER REFORM ACT
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON
HOUSING AND COMMUNITY OPPORTUNITY
OF THE
COMMITTEE ON FINANCIAL SERVICES
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED ELEVENTH CONGRESS
FIRST SESSION
__________
JUNE 4, 2009
__________
Printed for the use of the Committee on Financial Services
Serial No. 111-40
----------
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HOUSE COMMITTEE ON FINANCIAL SERVICES
BARNEY FRANK, Massachusetts, Chairman
PAUL E. KANJORSKI, Pennsylvania SPENCER BACHUS, Alabama
MAXINE WATERS, California MICHAEL N. CASTLE, Delaware
CAROLYN B. MALONEY, New York PETER T. KING, New York
LUIS V. GUTIERREZ, Illinois EDWARD R. ROYCE, California
NYDIA M. VELAZQUEZ, New York FRANK D. LUCAS, Oklahoma
MELVIN L. WATT, North Carolina RON PAUL, Texas
GARY L. ACKERMAN, New York DONALD A. MANZULLO, Illinois
BRAD SHERMAN, California WALTER B. JONES, Jr., North
GREGORY W. MEEKS, New York Carolina
DENNIS MOORE, Kansas JUDY BIGGERT, Illinois
MICHAEL E. CAPUANO, Massachusetts GARY G. MILLER, California
RUBEN HINOJOSA, Texas SHELLEY MOORE CAPITO, West
WM. LACY CLAY, Missouri Virginia
CAROLYN McCARTHY, New York JEB HENSARLING, Texas
JOE BACA, California SCOTT GARRETT, New Jersey
STEPHEN F. LYNCH, Massachusetts J. GRESHAM BARRETT, South Carolina
BRAD MILLER, North Carolina JIM GERLACH, Pennsylvania
DAVID SCOTT, Georgia RANDY NEUGEBAUER, Texas
AL GREEN, Texas TOM PRICE, Georgia
EMANUEL CLEAVER, Missouri PATRICK T. McHENRY, North Carolina
MELISSA L. BEAN, Illinois JOHN CAMPBELL, California
GWEN MOORE, Wisconsin ADAM PUTNAM, Florida
PAUL W. HODES, New Hampshire MICHELE BACHMANN, Minnesota
KEITH ELLISON, Minnesota KENNY MARCHANT, Texas
RON KLEIN, Florida THADDEUS G. McCOTTER, Michigan
CHARLES A. WILSON, Ohio KEVIN McCARTHY, California
ED PERLMUTTER, Colorado BILL POSEY, Florida
JOE DONNELLY, Indiana LYNN JENKINS, Kansas
BILL FOSTER, Illinois CHRISTOPHER LEE, New York
ANDRE CARSON, Indiana ERIK PAULSEN, Minnesota
JACKIE SPEIER, California LEONARD LANCE, New Jersey
TRAVIS CHILDERS, Mississippi
WALT MINNICK, Idaho
JOHN ADLER, New Jersey
MARY JO KILROY, Ohio
STEVE DRIEHAUS, Ohio
SUZANNE KOSMAS, Florida
ALAN GRAYSON, Florida
JIM HIMES, Connecticut
GARY PETERS, Michigan
DAN MAFFEI, New York
Jeanne M. Roslanowick, Staff Director and Chief Counsel
Subcommittee on Housing and Community Opportunity
MAXINE WATERS, California, Chairwoman
NYDIA M. VELAZQUEZ, New York SHELLEY MOORE CAPITO, West
STEPHEN F. LYNCH, Massachusetts Virginia
EMANUEL CLEAVER, Missouri THADDEUS G. McCOTTER, Michigan
AL GREEN, Texas JUDY BIGGERT, Illinois
WM. LACY CLAY, Missouri GARY G. MILLER, California
KEITH ELLISON, Minnesota RANDY NEUGEBAUER, Texas
JOE DONNELLY, Indiana WALTER B. JONES, Jr., North
MICHAEL E. CAPUANO, Massachusetts Carolina
PAUL E. KANJORSKI, Pennsylvania ADAM PUTNAM, Florida
LUIS V. GUTIERREZ, Illinois KENNY MARCHANT, Texas
STEVE DRIEHAUS, Ohio LYNN JENKINS, Kansas
MARY JO KILROY, Ohio CHRISTOPHER LEE, New York
JIM HIMES, Connecticut
DAN MAFFEI, New York
C O N T E N T S
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Page
Hearing held on:
June 4, 2009................................................. 1
Appendix:
June 4, 2009................................................. 49
WITNESSES
Thursday, June 4, 2009
Bazzie, Tony, Executive Director, Raleigh County Housing
Authority...................................................... 32
Couch, Linda M., Deputy Director, the National Low Income Housing
Coalition...................................................... 6
Fischer, Will, Senior Policy Analyst, Center on Budget and Policy
Priorities..................................................... 7
Hiebert, P. Curtis, President, the Public Housing Authorities
Directors Association.......................................... 29
Houghton, Ted, Executive Director, Supportive Housing Network of
New York....................................................... 13
Montiel, Rudolf C., P.E., President and CEO, the Housing
Authority of the City of Los Angeles........................... 28
Newsome, Karen, Vice President, WinnResidential, on behalf of the
National Affordable Housing Management Association (NAHMA)..... 37
Robinson, Gloria J., Tenant Organizer, Organizing Neighborhood
Equity DC (ONE DC), and Housing Choice Voucher Recipient....... 11
Roman, Nan, President and Chief Executive Officer, National
Alliance to End Homelessness................................... 9
Rooker, Renee, President, National Association of Housing and
Redevelopment Officials........................................ 33
Zaterman, Sunia, Executive Director, Council of Large Public
Housing Authorities (CLPHA).................................... 35
APPENDIX
Prepared statements:
Bazzie, Tony................................................. 50
Couch, Linda M............................................... 60
Fischer, Will................................................ 70
Hiebert, P. Curtis........................................... 86
Houghton, Ted................................................ 96
Montiel, Rudolf C............................................ 102
Newsome, Karen............................................... 106
Robinson, Gloria J........................................... 113
Roman, Nan................................................... 116
Rooker, Renee................................................ 120
Zaterman, Sunia.............................................. 136
Additional Material Submitted for the Record
Waters, Hon. Maxine:
Letter to Chairwoman Waters and Chairman Frank from various
undersigned organizations.................................. 143
Letter from the California Housing Partnership Corporation
and various undersigned organizations...................... 149
Written statement of the National Leased Housing Association. 151
THE SECTION 8 VOUCHER REFORM ACT
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Thursday, June 4, 2009
U.S. House of Representatives,
Subcommittee on Housing and
Community Opportunity,
Committee on Financial Services,
Washington, D.C.
The subcommittee met, pursuant to notice, at 10:06 a.m., in
room 2128, Rayburn House Office Building, Hon. Maxine Waters
[chairwoman of the subcommittee] presiding.
Members present: Representatives Waters, Velazquez, Lynch,
Cleaver, Green, Clay, Ellison, Driehaus, Himes, Maffei; Capito,
Biggert, Putnam, Jenkins, and Lee.
Chairwoman Waters. This hearing of the Subcommittee on
Housing and Community Opportunity will come to order. Good
morning, ladies and gentlemen.
I would like to thank our ranking member, Shelley Moore
Capito, and other members of the Subcommittee On Housing and
Community Opportunity for joining me for our second hearing on
the Section 8 Voucher Reform Act (SEVRA).
At our first hearing, we were joined by HUD Secretary Shaun
Donovan, who testified about the need for this legislation and
its importance in protecting the continued viability of the
Section 8 Program which provides housing assistance for 2
million low-income families nationwide.
Today, we will hear from residents, housing advocates,
housing authorities, and the housing managers who deal with
this Program on a day-to-day basis, and will be directly
affected by this legislation.
This is legislation that has broad support, including the
support of 72 housing and redevelopment stakeholders in
California, and the California Housing Partnership. These
groups have sent a letter of support, which I would ask
unanimous consent to enter into the record.
It also has broad bipartisan support, passing the House in
2007 on a vote of 333 to 83.
Over the years, the Section 8 Program, which pays the
difference between 30 percent of a tenant's income and the fair
market rent, has become increasingly complicated for residents
and the PHAs that administer the Program. Residents must
routinely re-verify their income, through a time-consuming,
error-prone process.
As we will hear from Ms. Robinson, the inspections process,
although well-intended, can actually prevent a tenant from
leasing a unit if it needs minor repairs.
The proposed bill would simplify these processes by
streamlining the rent determination process requiring
certifications less often, and improving inspections by
allowing PHAs to perform some repairs.
The proposed bill also addresses the funding formula for
the Section 8 Program. Because of a drastic Bush Administration
change to how vouchers were funded, over 150,000 vouchers were
lost. I agree with the assessment of Secretary Donovan, who
testified that the changes to the funding formula contributed
to a slide in funding utilization.
In fact, in order to make up for lost funding, PHAs limited
services to residents and even began to restrict or deny moves
to higher-cost areas.
While the Democratic Congress has corrected this funding
formula, the Program has still not achieved the same leasing
levels as it had before the formula change.
In short, the voucher program serves fewer people today
than it did in 2004. Last year, only 90 percent of authorized
vouchers were under lease. In 2004, 96 percent of vouchers were
under lease.
The legislation before us would establish a sustainable and
transparent formula that would stop the reductions in voucher
use and actually increase the number of families assisted
through the program.
The draft we will be discussing today does not include the
Moving To Work Program, which allows about 30 PHAs to waive
most of the rules that govern public housing and Section 8.
As I stated in our first hearing, Chairman Frank and I have
agreed that there will be a Moving To Work component to this
bill,
I would like to reiterate the concerns I have about the
Moving To Work Program:
First, I'm deeply concerned about the imposition of time
limits and work requirements by Moving To Work agencies.
Second, I'm aware that there has been a substantial decrease--
by one estimate 24,000 vouchers have gone unused--in the number
of vouchers issued by Moving To Work agencies. Finally, there
has never been a thorough evaluation of the Moving To Work
Program.
So I look forward to hearing from our witnesses on these
very important issues, and I would now like to recognize
Ranking Member Capito for her opening statement.
Mrs. Capito. Thank you, Madam Chairwoman.
I would like to yield to my colleague, Ms. Biggert, because
she has time constraints, let her make her statement first, and
then make mine second. Thank you.
Chairwoman Waters. Without objection.
Mrs. Biggert. Thank you very much, Ranking Member Capito,
and thank you, Madam Chairwoman, for holding this hearing
today. I would also like to thank all of the witnesses. And
many of them worked on this with us in the last draft, in the
last passage of this bill, and I think that, so they bring real
expertise, and hopefully, we can get the Senate to move a bill
this year, after we finish this one.
There seems to be something that happens in that rarified
air over in the Senate that sometimes the bills just sit there,
and I think this is a very important bill, this is a very
important hearing, and I hope that we will be able to do it
expeditiously, and then the Senate will take it up.
I thank you for talking about the Moving To Work, because I
do think that is a very important component of this bill for
those who are able to move expeditiously, and hopefully we will
be able to work out something that will be of benefit to all of
us.
And I would also like to thank you for having the family
self-sufficiency bill that I worked on early on in this bill.
So again, thank you very much for holding this hearing, and
I look forward to the witnesses.
I yield back.
Chairwoman Waters. Thank you very much.
Mr. Lynch.
Mr. Lynch. Thank you, Madam Chairwoman. I appreciate you
holding this hearing, and all your good work on this issue.
As someone who grew up in Section 8 housing, project-based
Section 8 housing--I lived there for 15 years with my mom and
dad when I was growing up--I understand how important this
program is to a lot of families, especially now. In tough
economic times, when people may have been able to rent in the
private market or maybe they were forced out of their homes
because of foreclosure, this is becoming a more important
program to a lot of families.
The Section 8 Housing Choice Voucher Program provides
monthly rental assistance to about 2 million low-income
households every year. Nearly 2,500 public housing agencies
administer the program at the local level across the country.
During the past two sessions of Congress, under the great
leadership of Chairwoman Waters, this committee has completed a
great deal of work on this issue, and I'm pleased to help in
the effort to bridge those efforts to this Section 8 Voucher
Reform Act of 2009.
As we know from our past work, however, the Section 8
Program has encountered structural inefficiencies and
challenges that do affect the ability of public health
authorities to effectively administer the Program.
We know, from a 2003 HUD quality control study, that there
have been high error rates in the subsidy calculations. A study
released in 2004 also found that 40 percent of the subsidies
were erroneously calculated. These high error rates are not
acceptable, and formulas must be simplified to avoid those
errors.
We have also heard from public housing authorities that
many times there are not sufficient staff and resources to
perform inspections to certify Section 8 housing stock.
Especially in the Northeast, in my area, notably in the
district of Boston, where the housing stock is older than in
many parts of the country, additional inspections are necessary
to ensure tenant safety and proper allocation of Federal
resources.
The Section 8 Voucher Reform Act of 2009 addresses a lot of
these issues, and it puts in place needed reforms to this
essential program that play an important part in our
communities.
I look forward to the testimony from all of our witnesses
on both panels, and I thank you for the courtesy, Madam
Chairwoman, and I yield back the balance of my time.
Chairwoman Waters. Thank you.
Ranking Member Capito.
Mrs. Capito. Thank you, Madam Chairwoman, and thank you for
holding this hearing on the Section 8 Voucher Program, as you
said in your opening statement, the second hearing on this
subject following Secretary Donovan's appearance before the
committee.
We're going to hear from witnesses who interact with this
program every single day, and I look forward to their
assessment of the program, and ways in which we can make
improvements.
As has been stated before, this program is already, the
Federal housing voucher program, assistance program, is helping
approximately 2 million low-income families and individuals
each year, administered by 2,500 public housing authorities.
The Section 8 Program provides families and individuals
with the flexibility to choose where they want to live and
tailor their housing to their needs, rather than being
designated to public housing, and the freedom and mobility of
this program, I think, are two of the key benefits.
But the Section 8 Program does face, I believe, significant
challenges.
The program already consumes over 40 percent of HUD's
budget and it is overly complex and burdensome to administer.
This program is in need of some fundamental reform that revises
the funding formula, reduces the administrative cost,
simplifies the rent calculation, and levels the playing field
for those working families in rural America.
We have tried to reform this program since the 108th
Congress, and it is my hope we will be successful this time.
I look forward to working with Chairwoman Waters to improve
the Section 8 Program for Americans living in both urban and
rural areas. Today's witnesses will give us valuable input on
how to best reshape this program.
I would also like to introduce a gentleman on the second
panel, from West Virginia, Mr. Tony Bazzie, who is a friend of
mine, and he has been working with the public housing authority
in Raleigh County for 29 years, so I think, I know he has seen
it inside and out, so I look forward to hearing his experience
and his unique perspective on the second panel, and I welcome
the other panelists, as well.
Thank you.
Chairwoman Waters. Thank you very much.
Mr. Cleaver.
Mr. Cleaver. Thank you, Madam Chairwoman, and Ranking
Member Capito.
And I apologize. At 10:30, I will have to go get another
meeting started, and I will rush back to this committee,
because this is a very personal issue with me.
As did my colleague, Mr. Lynch, I, too, lived in public
housing, and in those tough days when my mother, father, 3
sisters, and I lived in public housing, I never thought the day
would come when I would actually be in charge of public
housing, but when I became Mayor of Kansas City, I walked into
a buzzsaw, because our housing authority was in receivership,
and I had to work to get that taken care of, and having lived
there, I understood a lot of the problems that the people
faced.
And it pains me that we failed in the 109th and 110th
Congresses to do the Section 8 reform. I agree with my
colleague that we did our part under the leadership of
Chairwoman Waters to get legislation from this subcommittee
through the full committee to the House Floor and over to the
Senate, where all good legislation goes to die.
And we hopefully will be able to do this reform, because
it's more needed now than ever.
I just read yesterday that the foreclosure rate is not
dropping, that people are continuing to lose their homes, and
when you look at all of the GM and Chrysler workers, not the
CEOs, the workers who will lose their jobs, which means that in
many instances, they will lose their homes, we're going to need
to make sure that this program is inclusive and that the reform
will allow us to address the housing needs that we have in this
country.
I was hurt over the fact that the President, for the last 4
years, zeroed out the public housing, because we already had a
terribly underfunded program, and now we have to restore not
only the units, but some credibility to the program.
And so I appreciate this hearing. We have not only 2
million people who are currently using the program who
desperately need to see this reform, but I think the people who
are going to be lined up at public housing doors, local public
housing authority doors, trying to get vouchers.
So, Madam Chairwoman, thank you very much for all the work
that you have done on this issue, and I stand ready to be of
continuous support to you. Thank you.
Chairwoman Waters. Thank you very much.
Mr. Maffei?
Mr. Maffei. No statement.
Chairwoman Waters. No statement?
Then we will go right to our panel. And I am very pleased
to welcome our distinguished first panel.
Our first witness will be Ms. Linda Couch, deputy director,
National Low Income Housing Coalition.
Our second witness will be Mr. William Fischer, senior
policy analyst, Center On Budget and Policy Priorities.
Our third witness will be Ms. Nan Roman, president and
chief executive officer, National Alliance to End Homelessness.
Our fourth witness will be Ms. Gloria Robinson, a Section 8
voucher holder, from Washington, D.C., who will be testifying
on behalf of the National People's Action.
And our fifth witness will be Mr. Ted Houghton, executive
director, Supportive Housing Network of New York. Mr. Houghton,
we were told by Ms. Velazquez that, if she were present, she
would want to introduce you. She's not here yet, so please feel
welcome.
I would like to thank you all for appearing before the
subcommittee today, and without objection, your written
statements will be made a part of the record.
You will each be recognized for a 5-minute summary of your
testimony.
We will start with our first witness.
STATEMENT OF LINDA M. COUCH, DEPUTY DIRECTOR, THE NATIONAL LOW
INCOME HOUSING COALITION
Ms. Couch. Chairwoman Waters, Ranking Member Capito, and
members of the subcommittee, thank you for the opportunity to
testify today on draft legislation to stabilize and expand the
Section 8 housing choice voucher program.
The National Low Income Housing Coalition does not
represent any sector of the housing industry. Rather, we work
on behalf of and with low-income people who need safe, decent,
and affordable housing, especially those with the most serious
housing problems.
On behalf of the Coalition, I would like to thank you for
your work on the draft bill, which is testament to the
subcommittee's commitment to the Nation's housing programs for
the lowest-income people.
Nationally, more than 70 percent of extremely-low-income
renters, those with incomes below 30 percent of area median,
pay more than half of their incomes toward rent.
Our analysis of the latest American community survey data
finds that half of the 9 million renter households in the
United States spent a stunning 80 percent or more of their
incomes on housing in 2007.
The voucher program, which targets 75 percent of its
assistance to extremely poor households, addresses these most
significant housing affordability challenges.
We applaud the bill's authorization of 150,000 new
vouchers. At least this many are needed. Vouchers can prevent
homelessness and allow severely cost-burdened families to
rebalance their lives with affordable housing.
We hope that the voucher program can be doubled in size, to
serve 4 million families over the next 10 years, and that the
number of authorized vouchers in the bill can be increased as
the legislation moves forward.
We also congratulate the subcommittee on developing a bill
that simultaneously achieves several important rent-setting
policy goals, assuring tenants will have affordable rents,
simplifying public housing agencies' administrative burdens,
and encouraging increased earned income, among others.
Affordable rent is one of the voucher program's most basic
benefits. Without affordable rents for each household, vouchers
would quickly lose their ability to correct the significant and
severe housing cost burdens faced by the Nation's lowest-income
households lucky enough to access them.
The Coalition, however, does not support the ability
provided in the bill that allows housing agencies to establish
alternative rent structures for public housing residents, even
though the bill includes a provision requiring the new rent
structure not to result in rents higher than a household would
pay under the normal rent structure. This sounds like double
work for agencies that are asking for less paperwork.
It is our firm belief that the innumerable benefits the
Brooke Amendment has brought to low-income people with housing
assistance should continue to be guarded with great fervor.
We commend the bill's several provisions that expand the
ability of voucher holders to live in neighborhoods of their
choosing by improving how fair market rents are set, directing
HUD to improve the portability of vouchers, and allowing higher
payment standards where a high rate of voucher concentration
exists.
The bill would also provide important protections for
tenants in other federally-assisted housing programs, improve
the inspection process for voucher units, and encourage the
expansion of the family self-sufficiency program.
The draft bill provides significant efficiencies for the
voucher and public housing programs without compromising on
which income groups are served or how deep their subsidies are.
We do not believe that providing greater flexibilities from
the program's core goals by expanding and extending the
existing Moving To Work demonstration program to more housing
agencies should be included in this bill as it moves forward.
Such flexibilities are not a correct counterbalance to the
ongoing and historic underfunding of public housing. Increased
funding for public housing and vouchers is among the
Coalition's highest priorities.
We are certain that some agencies have used Moving To
Work's flexibilities to provide more housing to more people in
more communities. We are equally certain that some agencies
have done quite the opposite.
Federal housing policy should not gamble on most agencies
doing the right thing.
We feel it is the responsibility of Federal housing policy
to ensure to the greatest extent practical that Federal housing
programs will do the right thing. Without such assurances, the
Coalition worries that future funding for vouchers and public
housing will be jeopardized.
Given the lack of thorough evaluation and several scathing
HUD Inspector General reports on agencies' use of Moving To
Work's flexibilities, we believe Moving To Work should not be
expanded or extended until we can assess what has occurred,
move forward with the good, and leave behind that which has
harmed residents with time limits, fewer housing options, and
unaffordable rents.
Thank you for considering our views on these issues. We
look forward to working with you all to improve and expand
HUD's affordable housing programs.
[The prepared statement of Ms. Couch can be found on page
60 of the appendix.]
Chairwoman Waters. Thank you very much.
Mr. Fischer.
STATEMENT OF WILL FISCHER, SENIOR POLICY ANALYST, CENTER ON
BUDGET AND POLICY PRIORITIES
Mr. Fischer. Madam Chairwoman, Ranking Member Capito, and
members of the subcommittee, I am Will Fischer, senior policy
analyst with the Center on Budget and Policy Priorities. It's a
privilege to testify before you today.
The main point of my testimony is to commend the committee
for considering SEVRA and to emphasize the important benefits
that the bill would provide for housing agencies, for private
owners, but particularly for the low-income families who
receive housing assistance or are on waiting lists around the
country.
I also want to urge caution concerning any expansion of the
Moving To Work demonstration.
First, I will talk some about the benefits of the bill.
Overall, it is a package of important, timely, carefully
crafted improvements that would strengthen and update the
housing voucher program, which is already a highly effective
form of housing assistance. SEVRA's most important provisions
would establish a stable, fair, efficient voucher funding
system, and this is important because, as the Chair noted, the
program has come out of a period of instability in funding
policy from 2003 to 2006.
Appropriations legislation changed the voucher funding
policy every year, and this led to the decline, to close to
150,000 vouchers being taken out of use.
The improvements that Congress made in 2007 and in 2008
restored about a third of those vouchers to use, and there's a
graph on Page 3 of my testimony, my written testimony, that
shows that trend. SEVRA would build on that with the
improvements to funding policy, and put more vouchers to use
serving needy families.
Importantly, SEVRA's renewal funding provisions would do
this without increasing costs. They would provide a series of
tools and incentives for housing agencies to serve as many
families as possible with the resources that are provided to
them.
SEVRA's funding provisions are important under any
circumstances, but they take on particular urgency during this
period of an economic downturn, when rising poverty and
unemployment are increasing homelessness and the need for
housing assistance.
The sooner that SEVRA is enacted, the sooner it will extend
voucher assistance to more people who would otherwise be
homeless or at risk of homelessness.
Another improvement in SEVRA would be the provisions which
simplify the rules for setting tenant rent payments, although
we share some of Linda's concerns about the provisions allowing
alternative rent structures in public housing.
Other key improvements in the bill would streamline the
housing inspection system, strengthen work incentives, and
allow expanded use of project-based vouchers. And project-based
vouchers, because they can be tied to particular buildings, can
be used to preserve and develop affordable housing.
The bill's project-based voucher provisions could be
strengthened further by allowing some public housing
developments to be converted to project-based vouchers to
support their revitalization.
I will turn now to our concerns about Moving To Work.
The Moving To Work demonstration is intended to support
experimentation with housing policies by allowing housing
agencies to operate their programs without regard to many
Federal statutes or regulations.
The demonstration has allowed some housing agencies to test
innovative and promising policies, but at the same time, it
does allow many harsh measures, as has been mentioned,
including sharp increases in tenant rents and time limits on
assistance, even for working poor families who cannot afford
housing without help.
Importantly, the demonstration has not been subject to any
rigorous evaluation, so it's simply not known what the effects
of these measures have been, and there also has not been any
adequate monitoring of people after they leave the program in
situations where you have rent increases and time limits.
In addition, there's the issue that Moving To Work allows
housing agencies to shift funds around and to accumulate very
large reserves in ways that are prohibited for other housing
agencies.
Close to $1 billion just from 2005 to 2008 has been
diverted out of the voucher program, either for other purposes
or into large reserves, and that is money that could have been
used to assist tens of thousands of families.
As a result, those families went without assistance, even
though Congress had provided money specifically for that
purpose.
If an expansion of Moving To Work is included in the bill,
it's important that it be of limited scope, that it have strong
tenant protections, rigorous evaluation and transparency
requirements, and that it have strict prohibitions on the
diversion of voucher funds.
Thank you for the opportunity to testify, and I would be
pleased to take any questions from the committee.
[The prepared statement of Mr. Fischer can be found on page
70 of the appendix.]
Chairwoman Waters. Thank you very much.
Ms. Roman.
STATEMENT OF NAN ROMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER,
NATIONAL ALLIANCE TO END HOMELESSNESS
Ms. Roman. Chairwoman Waters, Ranking Member Capito, and
members of the subcommittee, I am honored that you have invited
the National Alliance to End Homelessness to testify before you
today.
Section 8 is probably the most important government
resource to prevent and end homelessness. If we had an adequate
supply of Section 8 vouchers, there would be virtually no
homelessness in our Nation, and the Alliance commends the work
that the committee has done to stabilize, simplify, and expand
the program.
With respect to the connection between housing and
homelessness, people's lack of housing is what defines them as
homeless. However, their need for housing plays out in
different ways.
About 80 percent of individuals, and well over 90 percent
of homeless families, are homeless for economic reasons. If
they had affordable housing, while they might still be poor,
they would not be homeless.
Research has consistently shown that a Section 8 voucher
allows virtually everyone to exit homelessness and never become
homeless again.
The remainder of homeless people need permanent, supportive
housing. This includes people with disabilities, about 50,000
veterans, and the increasing number of elderly homeless people.
Tenant and project-based Section 8 have proven to be effective
in providing permanent, supportive housing.
In terms of preventing homelessness, Section 8 is also
effective. There is a much larger pool of extremely poor people
and doubled-up people from which the homeless population
emerges. Some 16 million people live at half of the poverty
level, and as many as 10 million live below the poverty level
and are doubled up. Only a handful of these people would become
homeless if they had affordable housing.
In summary, housing is the key intervention in ending and
preventing homelessness, and Section 8 is the linchpin to
providing that housing.
It is for this reason that we're so grateful to the
subcommittee for its work to stabilize the Section 8 housing
choice voucher program. The draft SEVRA bill improves Section 8
in several ways that will specifically help to end
homelessness.
It makes the program more reliable. Landlords, developers,
and tenants must have confidence in the Section 8 Program, in
how it operates and in what resources it can deliver.
By settling basic questions of funding distribution in ways
that incentivize full utilization of authorized vouchers, SEVRA
accomplishes this goal. This will encourage landlord
participation, sometimes a challenge in housing homeless
people, and it will increase the number of families who are
assisted.
Project-based Section 8 is essential for the creation of
permanent, supportive housing for disabled and elderly homeless
people, including veterans. SEVRA takes a much-improved
approach to project basing, and this will have a positive
impact on communities' efforts to end homelessness among people
with special needs.
SEVRA's simplification of rent calculations and inspections
makes an important contribution, as well. This simplification
will encourage more landlords to participate and make the
program easier for tenants to understand.
To maximize the impact of the Section 8 Voucher Program, we
offer the following suggestions:
Distributing scarce resources across a wide variety of
eligible populations has little impact, while tightly targeting
distribution can drive toward solutions. Section 8 is a rich
resource, and it should be targeted to those who need it most
in order to maximize its impact. In particular, targeting to
people with mental illness, veterans, and families with
children in foster care should be retained.
Further, given the extensive unmet need for affordable
housing among very poor people, we can see no situation in
which it would be reasonable to waive or raise income
eligibility. Income targeting should be retained.
In the recovery legislation, Congress recently passed the
Homelessness Prevention and Rapid Rehousing Program, HPRP, to
ameliorate recession-related homelessness. This Program
provides short- to moderate-term rent assistance to people who
are threatened with homelessness, or who are homeless.
HPRP should work well for a lot of people. However, there
are some people who need longer-term assistance, such as people
with disabilities, and we need to figure out how to make a
linkage between HPRP and Section 8.
The Housing Trust Fund is a key piece of legislation to
develop affordable housing. We thank you very much for creating
it. However, to reach the target population of that program,
operating subsidies will be required. When the Trust Fund is
resourced, it is also going to be important to consider how
Section 8 can best be linked with it.
Section 8 should be a vehicle for exiting homelessness, not
a vehicle for entering homelessness. A small percentage of
people become homeless while receiving Section 8. The reasons
tend to be administrative. PHAs should be given the resources
to solve such problems before eviction, and in particular, we
recommend that PHAs report their termination rates on a regular
basis, including whether or not people terminated end up
homeless.
On behalf of the board of directors of the National
Alliance to End Homelessness, we support your efforts to try to
improve the Section 8 Program. We hope that they will
eventually lead to an adequate supply of Section 8 vouchers to
meet the needs of all people who need them.
Thank you very much.
[The prepared statement of Ms. Roman can be found on page
116 of the appendix.]
Chairwoman Waters. Thank you.
Ms. Robinson.
STATEMENT OF GLORIA J. ROBINSON, TENANT ORGANIZER, ORGANIZING
NEIGHBORHOOD EQUITY DC (ONE DC), AND HOUSING CHOICE VOUCHER
RECIPIENT
Ms. Robinson. Thank you, Chairwoman Waters, Ranking Member
Capito, and members of the committee for inviting me to testify
on the draft of SEVRA.
My name is Gloria Robinson, and I work for Organizing
Neighborhood Equity, or ONE DC, which is a member of the
National People's Action Network. I am also a housing choice
voucher holder.
In the past year, there has been a great deal of dialogue
about the ailing economy, the housing and mortgage crisis, and
its devastating effects on middle-class America.
I'm pleased to be a part of a dialogue that addresses
another population, a population that often seems to exist
beneath the radar screens of lawmakers and politicians. This is
a population for which little has changed as a result of the
economic downturn and the mortgage and foreclosure crisis.
Many of us were poor, living in substandard housing, or
homeless way before this conversation began to take place. I
was part of this population.
In 1994, I entered a transitional housing program, and was
placed on the waiting list for subsidized housing. Fifteen
years later, I have still yet to receive the letter informing
me that my name had reached the top of that list.
The D.C. Housing Authority has over 26,000 households
waiting. That number is growing steadily.
Without the 750,000 vouchers proposed by SEVRA over the
next 5 years, they will continue to wait. They will wait in
substandard housing, and they will wait on the streets. Some of
them will die waiting for decent, affordable housing. It is
essential that SEVRA gets introduced and passed through the
House with this provision in place.
I became a housing choice voucher holder in June of 2008,
not because of any movement on the waiting list, but because
there was an opt-out at the project-based subsidized property
where I was renting.
Over 2,000 affordable housing units have been lost in
Washington, D.C., since 2000, and the rent burden carried by
thousands of low-income tenants continues to grow. For this
reason, I applaud the proposal to increase the number of
vouchers made available, and the continued funding for the
current housing choice vouchers.
I'm concerned about the sometimes prohibitive background
checks required of voucher applicants. For example, outstanding
or delinquent student loans would negatively affect an
applicant's credit score. These debts may be decades old, but
their negative impact is current.
Generally, low-income people are going to have weaker
credit histories, because the reality is that it's more
expensive to be poor in this country. For that reason, an
applicant's credit history shouldn't be considered when they
apply for a voucher, unless there is overwhelming evidence that
they will not be able to pay rent.
D.C.'s Housing Authority requires criminal background
checks for all household members over the age of 18. I would
like to see SEVRA include language that limits criminal
background checks to certain felonies that have occurred within
the past 2 years.
I don't know if it's still the case now, but the Chicago
Housing Authority used to only screen for drug offenses and
violent crimes, such as rape or murder.
Although there is a law in D.C. that is supposed to protect
tenants from being discriminated against based on the source of
income, I was told on more than one occasion that the property
did not accept vouchers.
There needs to be a provision added to SEVRA that expressly
prohibits discrimination based on source of income at the
national level. There also needs to be a mechanism put in place
to enforce this provision.
I am happy that SEVRA addresses the issue of inspections,
especially failed inspections that result in delayed lease-ups
where there are no life-threatening reasons for the failure.
When I located an apartment and was approved on August 2nd,
7 weeks later, the inspections were done, and the unit failed,
the first time, for one bedroom window that had been painted
shut, and the second time for a shower pole missing in the
master bathroom--not life-threatening issues. Each time the
unit failed, it went to the end of the inspection list.
While housing authorities should withhold rents from
landlords who don't make necessary repairs within 30 days, non-
life-threatening issues should not delay the occupancy of an
otherwise habitable unit.
I was finally able to lease up and move in on November 3,
2008, after sitting in overflowing waiting rooms every week,
sometimes from 7:30 a.m. to 3:00 p.m.
Every employed housing authority client doesn't have the
luxury or flexibility to spend 6 to 8 hours away from their
jobs every week, without seriously jeopardizing their
employment status.
Finally, I agree with Secretary Donovan's opinion on the
Moving To Work Program.
Because housing authorities were not required to collect
any data, there is no empirical evidence to show that the
program has been effective. Extensive data needs to be
collected, and that data thoroughly analyzed before the program
is expanded.
Thank you for the opportunity to submit this testimony on
behalf of SEVRA.
[The prepared statement of Ms. Robinson can be found on
page 113 of the appendix.]
Chairwoman Waters. Thank you.
Mr. Ted Houghton.
STATEMENT OF TED HOUGHTON, EXECUTIVE DIRECTOR, SUPPORTIVE
HOUSING NETWORK OF NEW YORK
Mr. Houghton. Thank you, Madam Chairwoman, Ranking Member
Capito, and members of the subcommittee. I am glad to be here.
I want to say that the Supportive Housing Network, which
represents 180 nonprofit providers and developers of supportive
housing across New York State supports all of these comments
that our national advocacy partners and Ms. Robinson have made.
There is an awful lot of consensus on this bill. You guys
have done a terrific job of listening to people and crafting a
very strong bill that not only provides additional resources,
but also makes some very smart decisions and makes some
efficiencies and gets some incentives in there that are going
to really help this program along.
But I can't help but emphasize that the most important
thing here is that we're going to get more vouchers. There is
such a great need both in urban areas and in rural areas for
more housing assistance.
We have 34,000 people living in homeless shelters each
night in New York City right now. It's one of the highest
levels ever. And we really have not been able to address that,
because we don't have the long-term rental assistance available
to us in the numbers that we need.
Not only that, but if we can get these vouchers, we will be
able to not only create housing stability for the families who
need them, but it will also create community stability,
neighborhood stability, as we are able to maintain housing in
good condition.
And that's going to also help create jobs in maintaining
this housing. It also creates housing stability. That helps
people concentrate on getting jobs.
We use the supportive housing network, and our partners in
government use the Section 8 Program as a means to leverage
other resources to build supportive housing for people with
special needs, and the Section 8 Program is one of the most
important sources of that. There's just not nearly enough
shelter-plus-care vouchers under the McKinney Program to build
the amount of supportive housing that we need in New York City.
We are about to open up our 40,000th unit of housing in New
York State for people with special needs. We're very proud of
that. But we could be doing much more if we had the ongoing
rent subsidies to serve the extremely-low-income people who
live in our residences.
A person on SSI in New York State gets $8,000 a year. You
cannot fund housing and the ongoing need to maintain that
housing and pay for oil and heat and all those other things
with that level of money. You need to have Section 8 in
addition to that.
We use that, in New York City, we take tenant-based Section
8s and we put them in supportive housing. What happens, though,
is that there is so much administrative burden in inspections
and certifications.
And try to inspect an apartment or get a signature on a
certification from a mentally ill tenant who is paranoid, who
has had all sorts of troubles working with authorities over the
years. It's very difficult. And sometimes what happens is, we
lose the Section 8, but we continue to keep the tenant, and we
end up paying for that.
Because of late Section 8, our members are losing millions
of dollars a year because we rent to people, they apply for
Section 8, and then we wait as long as 11 months, maybe 18
months, before that Section 8 certificate comes through.
And so what happens is that we lose money and we still
serve the people, but the buildings struggle to maintain
themselves.
There are a lot of great things in this bill. We're very
happy about it. What we would like to see is improvements in
the prioritization, so that we're not just stuck with homeless
prioritization, but we're also able to prioritize people who
are just about on the edge of homelessness, and get them, and
we can hook that up with HPRP and will be able to do that, and
also to work with the project basing.
What happens is, there's a disincentive for localities to
project-base because if they give out a Section 8 to a tenant-
based, they know that they will just have to pay for that one
tenant-based Section 8. If you do a project-based, the person
is allowed to move in a year, and they go to the front of the
line and get a tenant-based. Then the next person comes in, and
they move a year later, and they get another tenant-based. So
you start generating more and more.
So if we could create a national pool of tenant-based, to
help people moving on from supportive housing that is project-
based, I think that would be a very helpful thing, because then
we would be able to project-base more and help people move on
to independence.
Thank you very much. I think that I have used up my time.
I'm open to any questions.
[The prepared statement of Mr. Houghton can be found on
page 96 of the appendix.]
Chairwoman Waters. Thank you very much for your testimony.
I will now recognize myself for 5 minutes for questions.
I want to talk a little bit about Moving To Work, because,
as you can imagine, this becomes kind of a hot political issue.
There are members who believe that somehow the Moving To
Work Program will make you, if you're in it, more deserving,
that somehow, if we have rules that dictate your life in some
way, that this is what you deserve to have happen in exchange
for being able to receive government support or live in public
housing.
Ms. Couch, in your testimony, you state that Moving To Work
should not be expanded unless there is a thorough evaluation of
existing sites.
Could you explain how Moving To Work has had a negative
impact on residents and communities? How can Moving To Work be
reformed so that residents are protected from harmful policies,
such as time limits or work requirements? I mean, would you
give me your thoughts on this?
Ms. Couch. Sure. Thank you for the question. And it is
truly an honor to be here today to testify before you.
I wish I could tell you a lot more about the Moving To Work
Program, but the truth is, we don't know very much. We don't
know very much about the residents going into Moving To Work
Programs and the housing agencies participating in the
demonstration, and we don't know very much about what has
happened to them at a national level.
Our concerns, I think, are your concerns that you have
expressed, that there is some data that show that resident rent
burdens have increased from pre-Moving To Work participation to
participating in the Moving To Work Program after a few years,
because housing authorities in the Moving To Work are given the
ability to divorce rents from incomes, and the Brooke
Amendment, which housing residents have today, says that rents
have to be about 30 percent of a resident's income.
With the ability of Moving To Work to divorce rents from
income, rents can be what housing agencies think might be a
good deal, and it seems to us frequently that the Moving To
Work aspect of the program is simply ratcheting up rents in
such a way that people would be compelled to get higher earning
jobs, but when they can't find those higher earning jobs, their
public housing or their voucher assistance becomes unaffordable
to them.
Some of the more troubling aspects of Moving To Work, from
our perspective, are the ability to change the income targeting
of the program. The public housing, in particular the voucher
program, are deeply income targeted.
Under Moving To Work, housing agencies can allow 90 percent
of their assistance to serve residents up to 60 percent of area
median, and in many, many communities across the country, you
would be hard-pressed to find severely cost-burdened residents
at 60 percent of area median income, which is precisely why the
public housing and voucher programs are targeted so deeply. So
income targeting, we think, must be maintained at least at
today's current standards.
And again, as I said in our testimony, the ability of
residents to know that in a Federal housing safety net program
like public housing or the voucher program, their rents will be
affordable, is critical, and we must have national standards
that ensure affordable rents. Time limits, work requirements,
other social policies or the contracts associated with the
Moving To Work Program we think are troublesome.
We do think that there have been some goods, some
flexibilities that have allowed more supportive services in
Moving To Work agencies, but we just don't know, and we think
it would be quite troubling to expand the Moving To Work
Program to more agencies until we have a solid sense of what
has been demonstrated, so we can really move forward with what
has worked and leave behind that which has harmed not just
housing residents, but the health and the financial health and
the physical health of the housing stock.
Chairwoman Waters. Thank you very much.
Ms. Robinson, I wanted to talk with you or get you to
answer some questions about background checks.
Ms. Robinson. Sure.
Chairwoman Waters. Now, Ms. Robinson, politically here in
the House of Representatives, we have members who say we must
keep all criminals out of public housing, we must have these
background checks so that we can make sure that these bad
people don't move into public housing.
But you're saying that there are people who would otherwise
be eligible, and you alluded to the fact that there may be
people who are excluded because they have been in trouble, they
were not felonies, they were more minor crimes.
Can you talk a little bit about that?
Ms. Robinson. Yes, absolutely.
Except for the more serious crimes, the drug offenses--and
even with the drug offenses, if an applicant is completing some
sort of treatment program and really trying to get well, they
should have the opportunity, if there's a need for assisted
housing.
In cases where applicants or members of their family who
are over 18 have served their time and completed their
sentences, their families and they should not be prohibited
from getting the assistance for housing.
If they do, then essentially, they're back on the streets,
which opens up the door for more criminal activity.
So I believe that within the 2-year period, you know, if
there is no significant criminal activity, then they should be
able to receive the assistance as any other low-income person.
Chairwoman Waters. Thank you.
Ms. Capito, for questions.
Mrs. Capito. Thank you, Madam Chairwoman.
I would first like to ask unanimous consent to enter into
the record the National Multi-Housing Council's comments on the
proposed Section--
Chairwoman Waters. Without objection, it is so ordered.
Mrs. Capito. Thank you.
This is a question for whomever wants to answer on the
panel.
In recent years, Congress changed the way the voucher
program was funded, moving from a formula-based on the number
of units that a PHA has under contract with HUD at their
current per-unit cost, to a dollar-based formula established by
the number of units under lease on a given date adjusted by an
inflation formula.
Has this change proven to be more cost-effective, and what
further improvements would you recommend be made?
Will anyone take that?
Mr. Fischer?
Mr. Fischer. I think the change has, certainly the cost of
vouchers has fallen during this period. The average cost of a
voucher, I think it hasn't necessarily been reflecting
increased efficiency.
In a lot of cases, housing agencies have ratcheted down the
cost of vouchers, in some cases excessively, so they don't
cover rents in an adequate range of areas.
And I think that the changes in the formula, the way they
have been done, and particularly the fact that they have--the
formulas have changed, or did change significantly from year to
year during this period from 2003 to 2006, made it difficult
for housing agencies to manage their program, and contributed
to a really big loss in the number of vouchers that were in
use.
Agencies took those vouchers out of use, in some cases
because they didn't have enough funding to cover them in the
current year, but sometimes also because they didn't know how
much funding they would receive the next year.
I think SEVRA, what SEVRA does is it builds on that system,
it builds on the change that you mentioned. It sticks with a
system that's not--it provides funding based on the vouchers in
use in the previous year, but it doesn't actually, on an
ongoing basis, fund every voucher at its current cost.
But it builds on that by establishing a stable funding
system year after year, and creating a series of incentives for
agencies to use more vouchers. It allows reserves that let them
plan their programs better.
And I think it really does start from the change that you
were talking about going to a dollar-based system, then improve
on its strengths, and strengthen it in a way that will make the
program work better going forward.
Mr. Houghton. And if I can add--
Mrs. Capito. Yes.
Mr. Houghton. --that uncertainty is a big cause for a lot
of the delays in payments, because the PHA is wondering how
much Section 8--
Mrs. Capito. Let me just clarify. Uncertainty as to what's
going to be coming down the pike?
Mr. Houghton. Yes.
Mrs. Capito. Okay.
Mr. Houghton. Yes. Because you don't know how much you're
going to get this year, and so you don't know whether you can
release enough tenant-based Section 8s to cover our
developments and make sure that they're running well. And so
that has been very important for us, if we can get that change
in there.
Mrs. Capito. Okay. I have a question that, we're talking
about redoing the rent calculations and the problems of income
verifications that everybody has, and the reason this kind of
caught my attention is, certainly we have learned through the
subprime lending debacle that the income verification was
either: (a) non-existent; or (b) extremely inadequate.
What kind of improvements can be made for income
verifications? Do you think we address that, that this is
addressed in this bill, and is that sort of a moving target, I
think, that presents more difficulties in, I don't know, in
this day and time?
Ms. Couch. Well, I think that this is a great question for
the public housing agency administrators, as well, but I would
just say that the bill's simplification of rents is going to
help a lot, but it's my understanding that what is in place to
certify incomes could work well if the housing authority staff
had enough funding and enough staff to implement what's there
as far as certifying incomes.
It's extremely important that we have an accurate
understanding of what incomes are, and it's my sense that what
is in place now works, but we just have to make sure we comply
with what is in place.
Mrs. Capito. I think some of the studies that were out
showed that, and it was a rather large percent, maybe 30
percent, under or over--
Ms. Couch. Right, and I think that's because there are
inconsistencies with how the rules that exist are implemented.
Mrs. Capito.Does anyone else want to--
Mr. Houghton. I would say that the--a lot of Section 8s are
now used to support tax credit projects, where the income
verifications are very strict, and so we're able to do it well
there.
I think with the additional administrative fees that are,
the administrative costs that are covered under SEVRA, we will
be able to do a better job at the PHAs, as well.
Mr. Fischer. I think that's absolutely right, that the
administrative funding in SEVRA would give PHAs more ability to
manage their programs well, including income verification.
There are also several provisions in SEVRA that make it
both simpler, the system simpler so it's easier to verify, and
there are also things that directly help with verification, and
one example of that is that the bill allows housing agencies to
rely on verifications from other public assistance programs, so
a housing agency could set up a system with a food stamp agency
that would let them avoid duplicating all the work that the
food stamp agency does, and that, I think, could help a lot.
Mrs. Capito. Okay. One final question. And this is sort of
at the 30,000-foot level.
Ms. Couch, in your written statement, you mentioned that
you hoped the voucher program could be doubled in size to serve
4 million families over the next 10 years.
What effect do you think that could have, doubling the size
of that, on other discretionary programs? I mean, it's like
putting air in a balloon. You only have so much. And we have
other great programs under HUD's jurisdiction, the homeless
program being one, disabled housing, elderly, and others.
Do you have a comment on that?
Ms. Couch. Well, we think it would greatly increase the
cost of the Section 8 voucher program over the years, but we do
think that we do need to put significant new resources into new
vouchers.
Unless and until we do that, we will not address our
Nation's homelessness problems, we will not address the number
of families of all types living with severe housing cost
burdens.
As you well know, housing programs are not an entitlement,
and it's estimated only 1 in 4 families eligible for them
actually receive them.
We would like to see a rebalancing of where we put our
resources, and the Nation has long supported financially
people's ability to enter into homeownership, and we would like
to see a commitment at the national level to also support
people's ability to rent homes that are affordable to them.
So I guess what I'm saying is that we would anticipate that
a doubling of the voucher program would greatly increase the
cost of the voucher program to the Federal Government, but we
think that the society's benefits to those costs would greatly
outweigh them.
Ms. Roman. If I could just add one thing to that, I think
one of the lessons from the homelessness field is that there
are a lot of costs associated with not housing people.
There are increased health care costs, there are education
costs, there are law enforcement costs and corrections costs,
and the costs of unemployment.
So while that might not be within the HUD budget, I think
that we have to look at cost offsets in other programs when we
talk about housing people.
Housing stability seems to be a necessary bedrock upon
which a lot of other things rest, and if you don't have it, you
pay in other ways.
Mr. Houghton. I'm sorry--
Mrs. Capito. Go ahead.
Mr. Houghton. To add onto Nan Roman, in New York City, we
discovered, and this is 10 years ago, a homeless mentally ill
person costs $40,000 a year, because of their use of emergency
rooms, shelters, and all those other things. And once you place
them into supportive housing, it reduces it so much that it
pays for almost all of the cost.
And we have gotten very good at targeting the housing to
the most needy, and really been much more cost effective.
So I think this is a very good investment. It will rise,
but I think the costs that you spend on homelessness dwarf any
increase that would happen in the Section 8 Program.
Mrs. Capito. Thank you.
Chairwoman Waters. Thank you very much.
Ms. Velazquez.
Ms. Velazquez. Thank you, Madam Chairwoman.
Ms. Couch, I heard what you were saying about your concern
regarding the changes to the Moving To Work Program, and one of
them is the lack of data and evaluation.
Can you tell us what are some of the critical resident
protections that must be included in any program expansion?
Ms. Couch. Well, we would start with income targeting. We
think at least the current income targeting standards must be
maintained.
The current rent structures, we think that giving
flexibility to divorce rents from incomes for households or for
tiers of households is a mistake that could lead to harm to
residents.
We think an important protection would be an inability of
housing authorities to impose time limits. I think the HUD data
show that most people who can move out of the housing
assistance programs when they're able to, and those who don't
would be the ones most likely to be harmed under time limits.
We also think that there has to be a strong evaluation
component and that the data have to be evaluated regularly, you
know, at 2 years, at 4 years, at--you know, so that we can not
just collect that data, but evaluate it, so that HUD could have
the authority and Congress could step in to make sure that
those housing agencies which are obviously harming residents or
harming the physical or financial health of their own housing
agencies would be directed to change their policies because the
demonstration wasn't working in the best interests--
Ms. Velazquez. Thank you.
If any of the other members of the panel would like to
comment, I would like to ask you where and how should we focus
our evaluation efforts regarding the Moving To Work Program,
since we know that there is such a strong push to allow more
housing authorities to participate?
Ms. Robinson?
Ms. Robinson. Yes. My concern with the Moving To Work
Program is the quality of work that participants would have the
ability to get.
With employment rates being in the double digits, I'm
concerned that folks won't be able to find work that preserves
some human dignity, you know. If people are going to be forced
to work in order to receive housing assistance, where are they
going to work? Will they be sweeping streets?
You know, I'm just concerned with any measure that makes it
mandatory that you work in a climate of unemployment. And
that's my comment.
Ms. Velazquez. Mr. Fischer?
Mr. Fischer. I think I agree with both of the comments that
we heard before.
I think it's also very important in order to have adequate
tenant protections in Moving To Work, in order to avoid
exposing tenants to unnecessary risk to limit the scope of any
expansion. I think Moving To Work's purpose should be research,
it shouldn't be something that's just meant to give general
flexibility to agencies.
If there are statutes or regulations that are too
burdensome or too complex, it's something that Congress should
look at nationally and see if there are ways to improve that,
and SEVRA does that in a whole range of areas.
But the purpose of Moving To Work should be targeted on
testing particular policies and should only be expanded to
cover a limited number of agencies to do that.
Ms. Velazquez. And how do we measure success?
Mr. Fischer. Well, I mean, I think that the--I will give
you an example of something where experimentation might make
sense, is rent policy. I think that there are a lot of ideas
out there about changes that could be made to rent policy.
I think it would be important to narrow the scope and look
at things that protect the lowest-income tenants and make sure
that you're not putting people out on the streets because
you're charging excessive rents.
But there is some experimentation that could be done that
would be effective, and I think that if the Moving To Work
demonstration should only allow experimentation on rents, it
should be focused on that.
It should be just the relatively small number of agencies
that would be needed to do that, and it should have controlled
experimental evaluation so that you have--so that you don't go
through, like you have with the current demonstration, where 10
years later, or 13 years later, you don't know what exactly
happened.
Ms. Velazquez. Thank you.
Mr. Houghton, you spoke about homelessness that is on the
rise due to the economic downturn. And in this draft, we have
an appropriation for 150,000 incremental vouchers.
Given the circumstances that we are facing today in our
Nation, are the proposed levels sufficient, and if not, what is
an appropriate level to have a real impact?
Mr. Houghton. Well, I think Nan Roman could speak to the
national level, but I think in general, New York State often
gets about 10 percent of housing assistance because of need and
population, and so that would be about 15,000 vouchers a year,
and we could use that very, very quickly. We have 125,000
people on the waiting list for Section 8, and we have 34,000
people in the shelters, as I said.
When you talk about the number of people who are homeless
each night, you're not capturing the entire group of people.
Five percent of all people living under the poverty line in New
York City are going to end up in the shelter at one time during
the course of a year. So it goes on. There's shifting through.
And so when you have those homeless episodes again and
again, especially when you're hitting children with this, you
have these long-term effects that really end up costing in
educational attainment, in employment prospects, in health, and
all those things cost us in all these other different systems.
This investment is really what we need to do.
So I think that if you took a look at the total cost of
what homelessness does, you could very well justify a much
larger investment, and I could certainly find the people to get
these vouchers to them. So, if you can do that.
Ms. Velazquez. Thank you. Thank you.
Chairwoman Waters. Thank you very much.
Mr. Lee?
Mr. Lee. Thank you.
Just a few brief questions.
I am one of the newer Members here in Congress, and I have
tried to learn as much as I can about this program, and I know
in two of my counties, it is very much needed. In fact, there
is a 5-year backlog in terms of a wait period.
The part that I'm troubled with, because it is a very good
program, I have heard a lot of positives, the other issue,
though, is the reality of the fact that we have limited dollars
and the fact that this program has continued to take an
inordinate amount of the entire HUD budget, and eventually, you
know, we're going to run out of dollars. Look at our current
fiscal situation.
So my concern is making sure we use these dollars most
effectively. The little research that I have done shows that,
on average, an individual who is in this program is in it for
up to 8 years, an 8-year average, while you have other people
who are waiting 4 or 5 years to get in, and that, to me, is a
concern. How do you equitably try to incentivize individuals
to--because this was supposed to be a helping hand to get them
out of trouble, but ultimately, it's not a long-term solution.
It's to ultimately let them be self-sufficient.
I would be interested to hear any ideas on ways to promote
or ultimately move people off this, so that you can--those in
need can get on, because right now, on an 8-year average, that
means only 12 percent of the people are getting out of this
program a year, which is a fairly small number.
Does anybody have a comment on any concepts or ideas?
Mr. Houghton. We serve an awful lot of people who are on
SSI and SSD, supplemental security income for people with
disabilities, and that, as I said, is about $8,000 a year,
about almost $700 a month.
They're not going to get off that. They're disabled. And
it's not enough to pay for the rent.
And so getting them Section 8 and having them on, it's
akin, I think the corollary might be health care reform. We're
trying to figure out ways to reduce emergency room spending by
increasing primary care.
And this is the same thing. We're trying to get--we're
willing to make the investment in subsidizing the rent for this
group in order to reduce the amount of spending, and it is an
inordinate amount of spending that we spend on emergency
shelter, on repeated detoxes, and psychiatric hospitalizations,
and all the other costs that are going.
Now, that's one part of the population, but the fact is
that we are targeting, I think, better and better, within the
housing world, because we have been able to use data and really
be able to figure out who needs it and be able to track
income--
Mr. Lee. I agree, those individuals, that data can be
separated out, but again, that might skew the numbers somewhat,
but on average, you have people there for 8 years.
What other way--to do this in a way that incentivizes
people to ultimately be self-sufficient, are there any concepts
or ideas for those individuals who have been on it for a long
time?
Mr. Houghton. In supportive housing, which has services
attached, our average is about 5\1/2\ years, and then people
move on to independence, where they probably take a Section 8
with them, but they're not using the services in the level that
they were. So there is some independence and there is some
lowering of cost.
But I'll give it over to--
Mr. Fischer. I'm not familiar with the 8-year average. The
numbers I had heard you know, either median or average, were
move in the 3- to 5-year range for the voucher program.
But I think regardless, it's important to have, as you're
saying, incentives, ways to encourage people to increase their
income to a point where they don't need housing assistance
anymore.
And this bill does some really important things to do that.
The rent provisions would provide a new earnings incentive that
would--an earnings deduction that would count less of earned
income towards the rent, so there would be a little bit more of
a--less of a rent increase when your earnings go up.
Probably the most important provision is that it would
strengthen the family self-sufficiency program, which is a
program within both vouchers and the public housing program
that provides employment counseling to tenants and it also
gives a work incentive, where tenants, if they have--if they
are following a self-sufficiency plan that they come up with,
with their employment counselor, then their increases in
earnings will go into an escrow account that then they can use
for purchasing a home or starting a business or an education or
things along those lines. That provides both support and
incentives for people to increase their earnings, and SEVRA
would provide a dedicated source of administrative funding for
employment counselors under that, and would also provide a
better source of funding to cover these financial incentives,
and I think that really would go a long way towards furthering
the goals that you're talking about.
Ms. Robinson. Statistics have shown that in the D.C. area,
a resident would need to earn at least $21 an hour to afford a
one-bedroom market rent apartment.
So we would need better quality jobs to increase the
incomes of these Section 8 voucher holders.
Ms. Couch. And I would just like to chime in and say that
the data that I have seen show that about 54 percent of voucher
holders cycled out of the program within 5 years, and so it
would be good if we all got on the same page on the data.
But I would strongly agree with Will that the bill does
several things to encourage increased earned income of voucher
holders and of public housing residents.
And the gap today between what people are earning at the
lowest income levels and what rents are is so broad that you
will have to do what Ms. Robinson said, get those higher-paying
jobs and make them available, or we're going to continue to
have to subsidize people's rents if we want to bolster their
ability to have stable housing.
Mr. Lee. Thank you.
Chairwoman Waters. Thank you very much.
Mr. Driehaus?
Mr. Driehaus. Thank you, Madam Chairwoman.
I would like to continue the conversation that Congressman
Lee has initiated.
And I'm struck by the last figure, Ms. Couch, that you
give, about 54 percent of the people cycling off the program
within 5 years.
It's the 46 percent who stay longer than 5 years that
concern me, and it goes back to Ms. Robinson's comment about
the waiting list.
And, you know, the fact is that, the more people we have on
the program for a longer period of time, the longer that
waiting list becomes.
I think all of us believe very strongly in emergency
housing, and we believe very strongly in providing housing for
people with disabilities, for people who have lost their jobs.
But I think we have to have the courage to have a conversation,
a serious conversation, about dependency.
My background is in international development. We talk a
great deal about dependency, and creating dependent situations.
And that number, that 46 percent who are over there, over 5
years, that's a big number. That's no small number.
And so when we talk about Moving To Work, just not having
enough data for it, you know, that really doesn't make me very
comfortable, that we shouldn't be working on programs such as
that because there's not enough data.
Sometimes I feel as if we look at this equation, and we
think, well, there are a lot of people who need housing, so we
should provide more housing.
I look at the equation and say, there are a lot of people
in poverty. They need housing. So we should try to get them out
of poverty.
You know, and I think too often we look at our housing
program in the wrong way, in that rather than building the
capacity of individuals on the program, especially those prone
to long-term times on the program, we look at continuing and
expanding the number of vouchers.
So I would really like you to explore a little further, you
know, how we might do a better job of building the wealth of
families.
You know, we embarked initially on things like IDAs through
the Congress, individual development accounts, to help build
the wealth and build the capacity of families to achieve self-
sufficiency.
So I would like you to explore a little further with me how
we might do a better job of working with that 46 percent,
because that's a big number, in my mind.
Ms. Couch. My first response is that, let's say the number
is 54 percent are on for less than 5 years, and then we have
that balance of that 46 percent.
What Mr. Houghton is saying happens in New York, is also
the case nationally, that a large percentage of the people in
voucher assisted households are people who are elderly or
disabled and on fixed incomes, whose incomes won't be
increasing to the point that we can count on that they'll be
able to enter. And so I think that they take up a large
majority of that balance.
Mr. Driehaus. Do you know how much--and I'm with you there,
and I don't think any of us are talking--
Ms. Couch. Forty percent.
Mr. Driehaus. --about people with disabilities or who fall
into those situations.
Ms. Couch. Right.
Mr. Fischer. In the voucher program. It is closer to 30
percent in public housing.
In project-based Section 8, it is much higher, but it
varies. But it is a substantial--when you look at people who
are on for longer lengths of time, a lot of those people are
elderly or people with disabilities.
Mr. Houghton. I would say that also a large number of them
are children who are getting educations and growing up in a
stable environment.
The one thing that I think it's important to talk about
with Section 8 is that, while it may be framed as dependency,
it does not disincentivize work.
You pay 30 percent of your income, and the fact is, many,
many people are working who receive Section 8. I don't know if
you have statistics, but I know that, within our residences,
people who are struggling with disabilities, we have 25 to 40
percent of them are getting jobs of some kind.
The fact is, though, that it's very difficult for them to
live completely independently with the levels of income that
they're earning.
And we get into a problem of markets. The job market has
depressed wages and the housing market has made it very
difficult to build enough housing where it's needed.
When you try to build--I spend most of my time talking
about developing housing and representing nonprofit developers.
When you try to site buildings in an urban area, it takes years
to get all the approvals and zoning regulations and everything
like that.
And because of those pressures, housing has gotten much
more expensive, and at the same time, globalization and other
pressures have lowered wages, and so we have a very big gap
that we're trying to fill. Section 8, I think, is one of the
best, most efficient targeting of trying to address that gap.
Mr. Fischer. I think the other point to remember, or
another thing to be aware of in looking at these length of stay
numbers is that they vary enormously from one part of the
country to another, and in places like New York City, it tends
to be much longer, because you can be a person who is working
and climbing the ladder in New York City for a long time before
you can afford an apartment, or in a place like San Francisco,
whereas in places with lower housing costs, the costs tend to
be lower.
And as we heard, the majority of people who are not elderly
or not disabled in the voucher program do work. They do have
some kind of employment.
But I think what needs to be done is we need to look at
things to build their assets, build their--give them incentives
to work more.
And I mentioned this before, but I think it's important,
this family self-sufficiency program within the housing
assistance programs is one of the largest asset development
programs out there.
It's a major work incentive, and it just has been underused
so far because it hasn't had the resources, it hasn't had the
funding, and SEVRA would make enormous progress in changing
that.
Chairwoman Waters. Thank you very much.
Mr. Clay?
Mr. Clay. Thank you so much for holding the hearing, and
thank you all for being here.
Let me kind of follow up on Mr. Driehaus' line of
questioning, and what you just mentioned, Mr. Fischer, about
employment assistance, Section 3, and just what we should do,
or should that be part of this restructuring or new law that
would allow people who live in economically-socially
disadvantaged communities in Section 8 housing to seek and
capture gainful employment, especially when we do these
projects in these communities.
Just panel-wide, give me your impression of what you think
could make Section 3 more effective and how we could actually
connect the people who live in these communities with
meaningful employment opportunities.
I represent Missouri, and we have two different strategies
going now between Kansas City and St. Louis, and the whole
Section 3 issue. Kansas City seems to do it a little better
than St. Louis when it comes to employment opportunity.
So can I start with you, Ms. Couch, and get your impression
of how we can improve a program like Section 3, so that it
actually provides meaningful employment opportunities to
people?
Ms. Couch. Sure. The Section 3 Program could be a very
important way to help residents increase their earned income.
I would say off the cuff that the new HUD could do a better
job in clarifying and making very clear to housing agencies
what the rules are with Section 3, to make sure that everyone
is on the same page with educating resident advisory boards and
tenant councils about what they should be expecting as far as
Section 3 notices and what the work opportunities are.
You know, the Nation, I think, was very grateful for the
stimulus money for public housing that's pushing a lot of new
capital funds down to the local level, and that $4 billion in
new public housing capital funds I think is a great place to
test new mechanisms to make sure that housing agencies are
implementing Section 3, and that Section 8, or that public
housing tenants and low-income people get some of those jobs.
Mr. Clay. Thank you for that response.
Mr. Fischer, anything?
Mr. Fischer. Just on the issue of voucher holders and
Section 3, Ms. Velazquez has a bill that would do that, would
expand the Section 3 preferences to cover voucher holders. That
improves the ability of voucher holders to benefit from jobs
under Section 3, so that's sort of something that's going
forward and that there could be progress on.
Mr. Clay. And where do you think the disconnect is as far
as having an effective program and having something written on
a piece of paper and saying it's law but not really
implementing it? Where is the disconnect?
Mr. Fischer. Well, I think there has to be HUD enforcement,
HUD monitoring of it, in order to make sure that people really
are getting the jobs that they should be getting.
Mr. Clay. I see.
Ms. Roman, anything there?
Ms. Roman. Well, I'm not an expert on Section 3, but I will
say that people's need for training is an issue that comes up a
lot around Section 3. Also, there is a tremendous opportunity
moving forward with the Administration's goals around energy
and green construction, to create a highly trained new
workforce. And therefore, there is an opportunity to use
Section 3 and train Section 8 and public housing residents in
these new skills.
Mr. Clay. Okay. Thank you.
Ms. Robinson?
Ms. Robinson. I agree with Ms. Roman. There does need to be
training. But not only for the participants of Section 3, but
also for the local public housing authorities.
And then there ought to be some monitoring in effect to
make sure that the program is being implemented as established.
Mr. Clay. Thank you.
And Mr. Houghton.
Mr. Houghton. I would echo the connection Section 3 to
development.
The National Housing Trust Fund in addition to the Federal
stimulus money, the National Housing Trust Fund will also drive
development of housing and there are a lot of opportunities
that maybe we can try to focus, that we try to get jobs to
people like that.
In New York right now, we are struggling with an issue of
prevailing wages and affordable housing. My members build about
half their housing with prevailing wage, and we do a very good
job with that, and then we also do the other half with non-
prevailing wage. It's still very good money. It's better than
what our case managers get. But the fact is that it's--and the
end result is the same.
But there is talk now, there are two bills in the State
that are going to look at making all affordable housing
construction prevailing wage.
One of our concerns is that when we go into a community,
one of the things we're able to give in return for their
approval of our siting our building is that we will hire
locally, and in prevailing wage, that's not always possible,
because often the unions don't always hire from the minority
neighborhoods that we often--
Mr. Clay. Thank you. And I do understand. And thank you for
that response.
And before I close out, Madam Chairwoman, I don't know if
Section 3 fits on this legislation, but I'm really interested
in it, and hopefully we can shed some light and have a
discussion about that as a committee.
Chairwoman Waters. Thank you very much, Mr. Clay.
I will talk with you and work with you to see what we can
do to maybe include some more definitive ways by which we can
offer opportunities for work and be of assistance to the
housing authorities.
Mr. Clay. Thank you, Madam Chairwoman. I yield back.
Chairwoman Waters. You're welcome. Thank you very much.
The Chair notes that some members may have additional
questions for this panel, which they may wish to submit in
writing. Without objection, the hearing record will remain open
for 30 days for members to submit written questions to these
witnesses and to place their responses in the record.
This panel is now dismissed, and I would like to welcome
our second panel. Thank you very much.
Ladies and gentlemen, I get to introduce our first witness.
Mr. Rudy Montiel happens to be the executive director for the
Housing Authority of my City, the City of Los Angeles.
Since his appointment as executive director, at the end of
2004, Mr. Montiel's leadership has been instrumental in the
financial turnaround of the Housing Authority of the City of
Los Angeles.
Under his guidance, the housing authority has turned a $25
million operating loss at the end of 2004 into net operating
income in 2005.
Prior to coming to Los Angeles, he successfully led the
Housing Authority of the City of El Paso for 3 years.
His strong private sector experience includes engagements
with Fortune 500 companies such as General Motors, Delphi, and
the IT Group Shaw Companies.
He is a licensed professional engineer in Texas and sits on
the boards of the Housing Authority Insurance Group, the Public
Housing Authority Directors Association, the Council Of Large
Public Housing Authorities, and the Hispanic Engineers National
Achievement Awards Corporation.
I thank you for joining us today. Welcome, Mr. Montiel.
Mr. Montiel. Good morning.
Chairwoman Waters. Our second witness will be Mr. Tony
Bazzie, executive director of the Raleigh County Housing
Authority, which I will turn to my ranking member, Ms. Capito,
for an introduction.
Mrs. Capito. Thank you. I am very pleased that Mr. Bazzie
is joining us here today.
As I mentioned in my opening statement, he has been in this
field for 29 years, and I can personally attest that he is a
forceful advocate, as I see him and many others in the group
that he comes with every year to tell their story and to make
improvements and to serve as many people as possible with good
quality housing.
So thank you, Tony, for joining us, and I appreciate and
look forward to your comments. Thank you.
Chairwoman Waters. Thank you very much.
Our third witness will be Mr. Curt Hiebert, president of
the Public Housing Authorities Directors Association.
Our fourth witness will be Ms. Renee Rooker, president of
the National Association of Housing and Redevelopment
Officials.
Our fifth witness will be Ms. Sunia Zaterman, executive
director, Council of Large Public Housing Authorities.
And our sixth witness will be Ms. Karen Newsome, vice
president, WinnResidential, on behalf of the National
Affordable Housing Management Association.
Without objection, your written statements will be made a
part of the record. You will now be recognized for a 5-minute
of your testimony.
Mr. Montiel.
STATEMENT OF RUDOLF C. MONTIEL, P.E., PRESIDENT AND CEO, THE
HOUSING AUTHORITY OF THE CITY OF LOS ANGELES
Mr. Montiel. Good morning, Chairwoman Waters, and Ranking
Member Capito. My name is Rudolph Montiel, and I come to you
from Los Angeles, the Nation's second-largest city and the city
with the largest homeless population on any given night in this
country.
In 2004, L.A. was near receivership and close to
bankruptcy. Today, we are HUD-certified high-performance
Section 8. We have over 50,000 units, 100 percent leased up,
and this year we'll complete expending all of our net
restricted assets. We are running the program the way the
program should be run.
Over the last 3 to 4 years, we have experienced significant
innovation and development utilizing Section 8 funds.
We have instituted a permanent supportive housing program
in Los Angeles that has created over 700 units in close
partnership with the City of Los Angeles.
We have a homeless set-aside that today serves almost 9,100
families in Los Angeles, families and individuals.
And most importantly, we are embarking on a redevelopment
of Jordan Downs in Watts with one-to-one public housing
replacement for a 2,100 mixed-income unit development that will
be the start of redevelopment of public housing citywide.
But there is a price to pay for this success. The price is
that today we are fully utilized. Today, we cannot serve
additional homeless families. Today, we cannot serve additional
low-income working families. And, in order to be able to do
more, we need additional resources.
We need stable funding. We can no longer, as Secretary
Donovan said in one of his presentations, operate under a binge
and purge scenario for Section 8 funding. It needs to be
predictable. We need to know how many families we can serve
year-to-year.
We need to reallocate resources in this country. If there
are areas of the country that are not using the resources, and
yet there are areas of the country that have desperate need,
then we should be able to reallocate those resources
nationally. In Los Angeles, when we open our wait list next
year, we expect fully 300,000 households to apply for Section 8
assistance.
And we need to provide flexibility when it comes to
converting tenant-based vouchers to project-based vouchers,
especially in redevelopment of public housing or in development
of permanent supportive housing or other affordable units.
I think it is widely accepted now that the project-based
voucher represents a hard unit.
We are also in support of MTW, and I prefer the name
housing innovations program, HIP, when it comes to
redevelopment and creation of new hard units, with a focus on
that, and not necessarily a focus on somehow disenfranchising
tenant protections. We believe that we should focus on
incentives to Moving To Work, and not so much exclusions or
requirements.
That is my testimony, and I again applaud your leadership
for bringing this very important hearing forth, and this very
good piece of legislation. Thank you.
[The prepared statement of Mr. Montiel can be found on page
102 of the appendix.]
Chairwoman Waters. Thank you very much.
Our next witness is Mr. Curt Hiebert.
STATEMENT OF P. CURTIS HIEBERT, PRESIDENT, THE PUBLIC HOUSING
AUTHORITIES DIRECTORS ASSOCIATION
Mr. Hiebert. Thank you, Chairwoman Waters, Ranking Member
Capito, and subcommittee members.
My name is Curt Hiebert and I am president of the Public
Housing Authority Directors Association, which, as another
acronym, I'll refer to as PHADA in the interest of time, as we
go on.
Our Association was founded in 1979 and represents over
1,900 housing authority chief administrative officers. A
significant proportion of PHADA members administer small or
medium-sized agencies that operate a mixture of assisted
housing programs.
Some operate public housing, some the housing choice
voucher program, many operate both programs, and a number of
members operate assisted, financed with HOME, CDBG, low-income
housing tax credits, Department of Agriculture, and other non-
Federal support.
We're very grateful that you're investing the committee's
resources to address this assisted housing reform initiative.
Many provisions contained in the draft bill are attractive to
PHADA and its members.
Some may reduce administrative requirements for program
sponsors, or program intrusiveness into participants' personal
affairs, such as reducing the frequency of housing choice
vouchers subsidized unit inspections, reducing the frequency of
some household income recertifications, and other things.
However, other provisions may have some significant cost or
revenue implications for housing authorities and some may
introduce new, more complex administrative requirements, such
as new asset eligibility standards may require new inquiries
into real estate ownership and its availability to applicants
and participants.
Of particular concern to us are provisions that may
diminish potential rent revenue in public housing when the
Congress faces significant budget challenges, which they shall.
The public housing program lacks cost-reducing mechanisms
that are available in various Section 8 Program components.
The bill, however, permanently restores the housing choice
voucher funding allocation protocol based on units in use and
actual cost.
The bill also establishes an administrative fee that is
based on vouchers in use.
Such funding mechanisms are critical to the program's
stability, permit sponsors to build HCV utilization, and
provide ways for program sponsors to accommodate local market
variability.
In the interest of full disclosure, Madam Chairwoman, as
you could probably tell from the horns I wear, and I am
carrying a pitchfork, the Keene Housing Authority is an MTW
agency, and has been since 1999.
While I applaud the intentions of the concerns about MTW, I
do have a couple comments about that portion of the bill.
Unlike the previously passed version of SEVRA, the proposed
bill does not yet include provisions concerning the housing
innovation program, HIP, or other permanent authorization for
Moving To Work.
We believe the committee should include HIP or another MTW
authorization provision as it considers a revised SEVRA bill.
We urge the committee to include provisions that: make the
MTW demonstration permanent; moderately expand the MTW program;
assure a robust evaluation process focused on the effects of
local flexibility on program participants and applicants; offer
reasonable protections for applicants, tenants, and
participants; and continue existing MTW agencies'
participation.
I agree with the sentiments of the previous panel, in that
tenant protections are vital, and the effects on our tenants
are vital, as well, and as a matter of fact, I don't think they
go far enough.
I think it is wrong to just insist on protecting our
tenants. They are not our children, and also, MTW is not just
an experiment.
I can speak from personal experience. What we were doing
was working with our community, working with our residents,
working with the people on our waiting list, to find problems
that were exigent in Keene, New Hampshire.
It's wonderful if we develop a program that may work in
Detroit or Kansas City or wherever, but the circumstances are
entirely different there.
The flexibility to allow dealing with local conditions,
demographics, employment circumstances, opportunities for
training, education, and everything else is vital for housing
authorities. It would be a mistake to make a ``one-size-fits-
all'' program again. I urge the continuation of the MTW
Program.
I do know that we have a very transparent process. We go
through a long process every year of saying what we're going to
be doing the following year.
There are public hearings. There are opportunities for our
stakeholders to be part of that entire process.
And at the end of every year, we report back to our
community, not only to HUD, but to our community, to our
residents, to our participants, to our waiting list. Okay, what
happened with last year's program? Did it work? Did it not?
In our case, we have actually increased the utilization of
Section 8. We now range between 105 and 110 percent
utilization. We house more people than we would under the
normal program.
Other MTW programs have used vouchers to support homeless
participants' transition to permanent housing in ways that
aren't permitted presently; have implemented homeownership
initiatives that enhance Section 8 ownership; and encourage
landlord participation in increased housing choice.
PHADA has participated in the development of the HIP
provision in the previous version of SEVRA passed by the House
during the last Congress, and we strongly urge the committee to
include a similar section in the version of SEVRA under
consideration.
SEVRA is a complex statute with many provisions that will
have unanticipated and anticipated outcomes. The bill includes
many provisions that PHADA has supported and it includes some
provisions that PHADA has opposed.
On balance, we believe that this bill represents a very
positive step for the Section 8 Program and for public housing.
However, we are concerned that the bill lacks authorization
and modest expansion of the MTW demonstration.
[The prepared statement of Mr. Hiebert can be found on page
86 of the appendix.]
Chairwoman Waters. Thank you very much.
Mr. Hiebert. Thank you.
Chairwoman Waters. Now, Mr. Bazzie.
STATEMENT OF TONY BAZZIE, EXECUTIVE DIRECTOR, RALEIGH COUNTY
HOUSING AUTHORITY
Mr. Bazzie. Thank you, Chairwoman Waters, Ranking Member
Capito, and members of the subcommittee.
My name is Tony Bazzie, and I have been the executive
director of the Raleigh County Housing Authority in Beckley,
West Virginia, for the past 29 years.
My agency assists nearly 1,300 families in a 6-county area
of our State. Due to the time constraints in addressing you
today, I certainly cannot touch upon a number of the topics
included in the draft legislation, so I would encourage you to
read the lengthier written testimony that has been submitted to
you.
I do thank the members of the subcommittee for all the work
that has been done thus far in the draft legislation, as it
seeks to bring about changes that will make the housing choice
voucher program more inviting to landlords, ease the
administrative burden on housing authorities, and better assist
low-income families in their quest for decent, safe, and
affordable housing.
For the most part, housing authorities in West Virginia are
small and medium-sized, but yet all are hopeful for the changes
that will ensure the continued viability of the voucher program
which assists families in every county in my State.
I and others in West Virginia support many of the proposed
changes, including one that will allow HUD-funded rental
assistance to begin from the date of the initial inspection, so
long as there are no life-threatening HQS violations.
One agency in West Virginia, the Charleston-Kanawha Housing
Authority, which is in your district, Ranking Member Capito,
has determined that, on average, 18 days elapse between the
initial failing inspection and a date that the unit does meet
HQS. Removing this obstacle, as this bill would, will provide
an incentive for more landlords to participate in the program,
in addition to getting families into units much sooner.
Likewise, I support the biennial inspection option as a
change that would be cost-efficient for many housing
authorities.
In West Virginia, a number of agencies administer the
program in multiple counties. My agency administers the voucher
program in 6 counties, with more than 3,350 square miles, a
geographic area larger than the States of Rhode Island and
Delaware combined.
The annual inspection process is a major program expense,
ranging from staff salaries to vehicle maintenance to postage
for mailing notification of inspection results.
While I do support the goal of trying to keep low-income
families from having to relocate as much as possible due to HQS
violations, I do not favor the provision in this bill whereby a
housing authority can use the abated HAP funds to make or cause
to be made repairs to a landlord's unit.
My agency and many others in West Virginia are ill-equipped
to administer such a provision, and in my opinion, this would
have the negative consequence of keeping landlords from
participating in the voucher program, as they would view this
as an intrusion into their private property.
The rent reform and simplified reporting provisions in
SEVRA are a welcome change that will encourage work on the part
of assisted households and relieve housing authority staff of
many verification and processing tasks.
For example, in 2008, again, the Charleston-Kanawha Housing
Authority conducted approximately 1,200 interim reviews in
addition to over 2,400 annual re-exams. Undoubtedly, many of
these interim adjustments would be eliminated through the
provisions that would no longer require examinations for
increases in earned income.
Also, the provision that allows for 3-year recertifications
for fixed-income households will provide much relief.
In recent years, the uncertainty of the renewal funding
process has made the management and operation of the voucher
program a difficult challenge. The goal of any housing
authority is to maximize its leasing to the baseline.
Unfortunately, with constant formula changes and delays in
the annual budget process, many agencies have been hesitant to
issue vouchers.
In closing, Madam Chairwoman, and Ranking Member Capito,
let me thank you again for your work.
However, I would caution that a number of the proposed
changes in this bill, such as increased deductions for earned
income, elderly and disabled, and child care, and applying HAP
dollars towards relocation, while they certainly will provide a
benefit to the families we serve, they will increase the
overall HAP costs and, as I'm sure you know, I know Ms. Capito
knows, there already exists a serious situation being
encountered by housing authorities in that net restricted
assets, which can be used to cover increasing and unfunded HAP
costs, are dwindling.
For example, my agency will be losing at least 26 families
per month for the next 6 months this year, just due to
inadequate funding in HAPs by the Federal Government.
Overall, I'm very confident that the proposed changes to
the program will make it more attractive to private property
owners and increase the available housing stock.
Reducing the reporting burdens and providing incentives for
work will make the program more accommodating to low-income
families.
I also trust the provisions related to administrative
simplification will produce more customer-oriented agencies
throughout the State.
[The prepared statement of Mr. Bazzie can be found on page
50 of the appendix.]
Chairwoman Waters. Thank you very much.
Ms. Renee Rooker, president, National Association of
Housing and Redevelopment Officials.
STATEMENT OF RENEE ROOKER, PRESIDENT, NATIONAL ASSOCIATION OF
HOUSING AND REDEVELOPMENT OFFICIALS
Ms. Rooker. Chairwoman Waters, Ranking Member Capito, and
members of the subcommittee, my name is Renee Rooker. I am the
executive director of the Walla Walla, Washington, Housing
Authority. I'm pleased to be here today in my capacity as
president of the National Association of Housing and
Redevelopment Officials, representing the Association's 23,000
agency and individual members.
NAHRO is the Nation's oldest and largest nonprofit
organization representing public housing authorities and
redevelopment agencies.
This year, we are celebrating our 75th anniversary. NAHRO
agency members administer more than 80 percent of the vouchers
under the Section 8 housing choice voucher program.
The need to advance voucher reform legislation in this
Congress is unquestionable. We applaud you for holding this
hearing today to move this process forward.
Madam Chairwoman, there is much about SEVRA, as it has
matured to date, that is extremely positive, including a sound
distributional funding formula, the ability to retain and use
unobligated fund balances, authorization to undertake maximized
leasing with funds available, a reallocation provision to
provide, among other things, funding to housing authorities
with high budget utilization rates and a need for additional
voucher assistance to increase leasing rates, and housing
quality standard inspection reforms.
My written testimony goes into greater detail on these and
other SEVRA reforms that we like and can support.
I would like to highlight this morning our more significant
comments on the current discussion draft of the legislation.
First, regarding the inspection of dwelling units, there is
much in the draft that we support.
I agree with my colleague, Mr. Bazzie, that it would be a
hindrance to the program to have housing authorities do the
repairs on owner units, and it would disincentivize landlords
from participating in the program.
With regard to income reviews and rent determinations,
NAHRO recognizes that efforts to address rent simplicity are
difficult. We applaud the effort in the discussion draft to
simplify some administrative elements in the rent and income
calculation process.
We do have some concerns, and we suggest that the Secretary
be given the discretionary authority to address increases in
rent for elderly or disabled families and for families with
dependent children whose rent has increased due to changes in
the allowable exclusions for medical or disability expenses, or
child care expenses enacted in this Act. I refer you to my
written testimony for further recommendations.
We appreciate that the draft bill demonstrates an
understanding that the rent and income provisions in SEVRA may
have an unintended and negative impact on housing authorities'
rent revenue and public housing program.
In this regard, we suggest that language be included in the
bill to compensate housing authorities, through increased
operating funds, the same year that they go into effect and
thereafter. Improvements to the portability feature of the
voucher program through regulation are welcome.
We support the provision on portability that provides
tenant mobility, reduces or eliminates interagency billing, and
gives the ability for local agencies to address their wait
list.
NAHRO has consistently recommended that the Secretary
administer funding for portability adjustments, primarily
through a central fund.
NAHRO continues to recommend that funding structured to
support the administrative functions necessary to help families
succeed and to enforce housing quality standards should be
stabilized by the Congress, and not left open to change by the
executive branch.
Additionally, we suggest modifying the Housing Act to
provide affirmatively that the same administrative fees shall
be paid with respect to housing authority-owned units assisted
by the program, as is paid to non-owned units.
Currently, housing authority-owned and operated units
receive 60 percent less in administrative fees than vouchers
leased in the private sector.
However, because housing authorities must contract out for
inspections of their units and for the rent reasonableness
determination, the case can be made that fees for housing
authority units exceeds non-owned units.
In closing, we understand the subcommittee is considering
the possible inclusion of language regarding the housing
innovation program in the version of SEVRA you intend to move
forward in this Congress.
NAHRO has long advocated for greater program flexibility
that brings innovation and expanded the Moving To Work
demonstration, and urges you to include provisions previously
contained in H.R. 1851.
This concludes my testimony, and NAHRO looks forward to
continuing to work with you and other members for the passage
of this important bill, and I would be happy to answer any
questions that you or the members have.
[The prepared statement of Ms. Rooker can be found on page
120 of the appendix.]
Chairwoman Waters. Thank you very much.
The committee will stand in recess. We have about 5 minutes
to get to the Floor. We have a series of votes which are going
to take us about half-an-hour. I would suggest you stretch your
legs. We will be back as quickly as possible.
[recess]
Chairwoman Waters. The committee will come to order, and we
will resume our testimony from our witnesses. My page has been
turned, and I think we were--Ms. Zaterman. Okay.
STATEMENT OF SUNIA ZATERMAN, EXECUTIVE DIRECTOR, COUNCIL OF
LARGE PUBLIC HOUSING AUTHORITIES (CLPHA)
Ms. Zaterman. Chairwoman Waters, Ranking Member Capito, and
members of the subcommittee, my name is Sunia Zaterman, and I
am the executive director of the Council of Large Public
Housing Authorities, comprised of nearly 60 of the largest
public housing authorities in the country, in virtually every
major metropolitan area. These agencies serve over 1 million
households under the public housing and Section 8 programs.
We thank the subcommittee for holding this hearing, and the
opportunity to present CLPHA's views on the Section 8 Voucher
Reform Act.
In some respects, this hearing today has a deja vu quality
to it. As you well remember, this committee worked hard on the
passage of H.R. 1861, the 2007 version of SEVRA, and CLPHA
applauds the subcommittee for once again continuing with
efforts to reform and improve this much-needed program.
We are pleased that this bill will stabilize the funding of
voucher renewals. With a permanent statutory formula, PHAs will
be able to plan for the future, taking steps to increase
utilization, reduce costs, eliminate inefficiencies, and
improve service delivery.
An adequate and stable reserve is the bedrock of any well-
run enterprise. While we would prefer a higher level of
allowable reserves, for example, at least 1 month of funding,
we appreciate that the bill allows agencies to retain not less
than 5 percent of their allocation, allowing the Secretary to
determine when a higher amount is needed.
This provision could be especially helpful when renewal
funds must be pro-rated and agencies need more reserves to
maintain their program.
CLPHA recommends that reserve amounts be based on formula
eligibility rather than funding allocations, so that agencies
do not have to wait for HUD to determine their pro-ration
before knowing the amount of their allowable reserves, or
alternatively, the higher of the formula eligibility or funding
allocation.
We applaud the commitment to increase the supply of tenant-
based subsidies; 150,000 incremental vouchers annually for the
next 5 years is sorely needed to move families off waiting
lists and into decent, affordable housing.
The provision allowing agencies to lease more vouchers than
their specific authorized level is one we have sought for
years. We strongly support removing the authorized caps to
allow housing authorities to fully utilize their funding
allocation.
We are very pleased that the bill increases the cap on
project-based vouchers, and al lows PHAs to project base
vouchers in their own buildings without going through a
competitive process. This provision eliminates a significant,
unnecessary administrative burden.
Further, we urge greater flexibility in using project-based
vouchers to preserve and replace public housing that would not
be subject to this cap.
We appreciate the program simplification measures in SEVRA,
particularly those allowing biennial inspections and triennial
income recertification.
We commend the committee for taking important first steps
in rent reform. However, during the first year of
implementation of SEVRA's public housing rent reforms, housing
authorities may receive substantially less rental income than
anticipated by their operating fund formula allocation. We
believe that the Secretary should be directed to provide
funding adjustments in such cases.
Once again, we are concerned that the bill authorizes
agencies to take on the role of private landlords and make
repairs and pay for utilities in units where the actual
landlord is neglecting his or her duties.
Though understandably well-intentioned, these provisions
will open PHAs to many legal, administrative, and liability
issues. We recommend removing this language from the bill.
Expansion of Moving To Work is a high priority for us. H.R.
1861, renamed MTW the housing innovation program and expanded
it to 60 PHAs and another 20 PHAs granting funding fungibility,
in what was called HIP Lite. It also included provisions that
provided for rigorous program evaluation and strong tenant
protections.
While this bill does not yet include the MTW provisions of
HIP provisions, we are hopeful that it will included the HIP
provisions from H.R. 1851.
Adding HIP from the 2000 SEVRA is a well-reasoned approach,
as these provisions represent policies and principles that were
already vetted through a full airing of the issues, and they
were achieved through the consensus building amendment process
at the subcommittee, full committee, and House considered
levels.
Under HIP Lite, work requirements and time limits are
prohibited and rent reform initiatives are limited. What
remains under HIP Lite is the funding fungibility, flexibility,
and innovation that PHAs desperately need to undertake
redevelopment and expansion activities. We recommend that HIP
Lite be expanded.
We urge you also to consider a preservation proposal that
would allow the conversion of public housing subsidies to
project-based voucher assistance under Section 8.
In addition, we propose linking the award of project-based
vouchers for public housing preservation activities with the
award of low-income housing tax credits in order to facilitate
greater leveraging of resources and public housing.
In closing, we appreciate the subcommittee's dedication to
reshaping the voucher program through the initiatives included
in SEVRA. We look forward to continuing to work with you and
with HUD on refining these proposals for reform and developing
additional improvements.
Thank you again for the opportunity to testify.
[The prepared statement of Ms. Zaterman can be found on
page 136 of the appendix.]
Chairwoman Waters. Thank you.
Ms. Newsome.
STATEMENT OF KAREN NEWSOME, VICE PRESIDENT, WINNRESIDENTIAL, ON
BEHALF OF THE NATIONAL AFFORDABLE HOUSING MANAGEMENT
ASSOCIATION (NAHMA)
Ms. Newsome. Thank you, Chairwoman Waters, and good
afternoon, Ranking Member Capito, and members of this
distinguished subcommittee.
My name is Karen Newsome. I'm here on behalf of the
National Affordable Housing Management Association, NAHMA. I'm
also the vice president of administration for WinnResidential.
NAHMA strongly supports the Section 8 Housing Choice
Voucher Program, and we look forward to working with this
subcommittee to improve this program, as well as the project-
based Section 8 Programs administered by HUD's Office of
Housing.
My written statement has been submitted for the record, and
I would like to summarize that testimony by focusing on the
positive results that can be achieved by creating a more
efficient voucher inspection process, authorizing a limited
English proficiency technical assistance program at HUD, and
expanding the project-based and enhanced voucher programs.
I would also like to express NAHMA's strong support for
authorizing a stable voucher renewal funding formula and
providing 150,000 new incremental vouchers for each of Fiscal
Years 2010 through 2014.
And finally, I would like to thank Chairwoman Waters and
the subcommittee for the strong leadership you provided in
stabilizing the project-based Section 8 funding.
SEVRA proposes common-sense reforms to the inspection
requirements that will help expedite the lease-up process for
voucher holders.
NAHMA strongly supports provisions in SEVRA which will
permit housing authorities to approve lease-ups in properties
which pass inspections under a program with standards at least
as stringent as HQS, such as the home or tax credit program, to
provide residents with housing sooner and to reduce lost income
for owners, to allow minor repairs to be made after the tenant
moves into the apartment, and to give public housing agencies
the discretion to inspect units occupied by voucher holders
every other year, rather than annually, for the term of the HAP
contract.
The streamlined inspection process proposed in SEVRA would
remove a major obstacle for voucher holders in tight rental
markets.
NAHMA strongly supports Section 17 of the SEVRA draft,
which allows HUD to better serve persons with limited English
proficiency, LEP, by providing technical assistance to
recipients of Federal funds. In the last Congress, this
language was included in both the House and Senate versions of
SEVRA.
HUD's LEP guidance became effective on March 7, 2007. The
guidance states that recipients of HUD funding, including
affordable rental housing providers, have an obligation to
provide translated documents and oral interpretation services
to persons who have difficulty communicating and reading in the
English language.
Originally, HUD provided no additional funding for
affordable housing providers to offset the costs of providing
language services, nor did they identify a specific list of
documents housing providers would be expected to translate.
In the summer of 2007, a coalition of multi-family housing
representatives and civil rights advocates proposed the LEP
language which is included in language. Our compromise
addresses the cost and vagueness concerns raised by housing
providers, and it will provide greater assistance to our
residents and applicants with LEP.
NAHMA is especially interested in the provisions which
create a task force of industry and civil rights stakeholders
to identify vital documents, require HUD to translate the vital
documents within 6 months, create a HUD-administered 1-800
hotline to assist with oral interpretation needs, and
authorized appropriations.
In Fiscal Year 2008 and Fiscal Year 2009, Congress
appropriated funds for HUD to provide LEP technical assistance
and document translations. So far, HUD has used this funding to
translate the four multi-family model leases and other
important documents into 12 languages.
We appreciate HUD's progress, but we strongly believe the
authorization language is still necessary.
First, it reaffirms Congress's commitment to provide
consistency in the level of service for individuals with LEP,
but NAHMA is concerned by HUD's budget request to consolidate
the account. We fear eliminating the LEP line item will make it
more difficult to secure funding for future translations or to
update current translations as the documents change.
Project-based vouchers are an important tool for expanding
the supply of affordable housing, particularly when used for
the tax credit program. NAHMA welcomes the new project-based
preservation vouchers which will protect residents while
ensuring that actual units are preserved as affordable.
In July 2004, GAO released a report on the options for
protecting tenants in properties with expiring HUD mortgages,
noting that mortgages on more than 2,300 subsidized properties
will reach maturity through the year 2013.
In many instances, rents in these developments were kept
low by subsidizing the mortgage and limiting the rents that
could be charged, and on several occasions, NAHMA has called on
Congress to provide enhanced vouchers to tenants whose rent
would be unaffordable after the HUD mortgage reached maturity
when affordability requirements expire. We are pleased that the
SEVRA draft authorizes enhanced vouchers for low-income and
certain moderate-income tenants who live in properties with
expiring mortgages under the Section 221 and 236 Programs.
Thank you for allowing NAHMA to comment on the draft SEVRA
bill, and we look forward to working with you to improve what
works about the Section 8 Program and to reform the areas that
need attention.
Thank you.
[The prepared statement of Ms. Newsome can be found on page
106 of the appendix.]
Chairwoman Waters. Thank you very much.
I will now recognize myself for 5 minutes to raise a few
questions.
How many people feel--well, let me ask how the credit
reports work. If you have a tenant, or a would-be tenant
applying, and they meet all the criteria except for credit
reports, could they be denied Section 8 or rentals in public
housing? I mean, how does it work?
Mr. Montiel. In Los Angeles, they would not be denied that
assistance.
Furthermore, we would go on record, Madam Chairwoman,
indicating that we believe that minimum credit scores,
especially in a redevelopment right to return situation, don't
make sense, in the sense that if people have minimum credit
scores, or good credit scores, they probably would not require
our public housing assistance to begin with.
Chairwoman Waters. Does anyone feel differently about
credit scores?
[no response]
Chairwoman Waters. Okay. Mr. Montiel, you talked about a
different way of dealing with Moving To Work, and you talked
about incentives.
Can you give us some idea of what you were talking about?
Mr. Montiel. Indeed. And we have seen many aspects of that,
Chairwoman Waters, in our redevelopment efforts in Jordan
Downs.
Incentives could be things such as linking people to jobs,
for example, skilled trades jobs, to take advantage of massive
redevelopment efforts that will take place, but then, to keep
those people engaged with unions, so that they can move up, if
you will, the income ladder without necessarily leaving their
unit. They can go from a public housing unit, then it is a
workforce housing unit, and then it is a market rate unit, then
maybe even to homeownership, without ever having moved.
Incentives also become--
Chairwoman Waters. Would you pay initially, like union
initiation fees?
Mr. Montiel. Initiation fees, it could be things such as
helping a person who wants to become a carpenter but doesn't
have the GED and algebra skills, getting them the assistance,
so that they are then prepared to enter the job market in the
apprenticeship program.
Chairwoman Waters. And let me just ask, it has been brought
up several times that perhaps the role of the housing
authorities should not include, I guess hiring a workforce to
do repairs when the owners of our Section 8 units are not in
compliance, that this somehow creates, what, additional
responsibility?
Didn't we say something about limiting the liability or
making sure that you would not be held responsible for repairs
in some way? Does that not satisfy your concerns? Or is it
something else you would like to tell us about that?
Yes, Ms. Rooker?
Ms. Rooker. Chairwoman Waters, yes, in the bill it does
limit the liability issues to the housing authority. I'm not
clear that it even goes far enough.
But one is, it's the property that's owned by the landlord,
and in the experience in the Walla Walla Housing Authority,
landlords are not particularly in favor of other people
touching their property and abating those issues, and they want
to take ownership. It's their property. They want to maintain
it as they see fit.
Maybe we could have more discussion of how we can encourage
them to do that in some rental markets that are very tight, how
to do that, but it is private ownership that is so important,
and it is for them to deal with that, and I think there's other
incentives we could look at.
Chairwoman Waters. Another way of looking at this may be
that the owner who is in noncompliance could be asked, what
contractors, what handymen, what--who do they use, and then we
could--you could utilize those persons, because they're
familiar with the building or the units, etc., and then the
owner could be billed by the housing authority for that work,
or something like that?
Ms. Rooker. That may entail more legal aspects, so if the
owner didn't pay you, and you were already out that money, then
you'd have to go through a whole collection process.
But I think there are opportunities to further discuss this
in more detail, that there could become some resolution so that
there are more units opening up for families.
Chairwoman Waters. Despite the fact that we have a housing
shortage and we need units, do we have landlords who are
constantly in violation, who do not do the repairs, and who may
be troubled even in another way, that we attempt to do it, that
we could just exclude from the program?
Mr. Montiel. I think that's an approach that could possibly
work, Chairwoman Waters, and keep in mind that many, certainly
all the large urban areas--New York, Chicago, Los Angeles--have
very appropriate code enforcement areas, so that's one way of
tying it to having landlords meet their obligation for safe,
decent, and affordable housing, is many times just meeting the
strict code enforcement requirements of the city.
Ms. Rooker. And also, for example, in some rural areas, if
that housing is on the substandard side, landlords can make
more money renting to non-voucher holders, because they will
allow doubling-up in their units, especially with agricultural
workers, and they'll charge a rent per head.
So they don't want to make the repairs. Unless it's a court
enforcement issue within that particular community, they can
just make more money.
Chairwoman Waters. Lastly, are any of our housing
authorities dealing with the cities about their codes and code
enforcement, so as to eliminate your having to even get into
all of that?
Mr. Hiebert. Yes, Madam Chairwoman.
It's an ongoing conversation, in a lot of smaller to
medium-sized communities, about formulation of codes and how
they affect, and it really is an ongoing discussion,
particularly in areas such as our community, which is also a
college community, which we have the same problem with
landlords can very often make more money by renting to a number
of college kids instead of a family.
So we're constantly having conversations, both with groups
of landlords and with the city inspection group.
Chairwoman Waters. All right. Thank you very much.
Ms. Capito?
Mrs. Capito. Thank you.
Mr. Bazzie, in your statement, your verbal statement, you
mentioned that your PHA is going to be losing 26 families a
month. Could you expound on that, why that is, and just, I know
you gave a brief explanation, but I would like a fuller
explanation for that. And do you think that's a trend
nationwide?
Mr. Bazzie. I know that it is definitely a trend in West
Virginia, and I would expect that it's a national problem.
The funding that our housing authority received this year,
based on past numbers, has just not been adequate to cover our
increasing costs to house a family.
As a result, we're using what's called net restricted
assets, or money that had been in reserve for some time, to
cover those costs, and in my county, in my county housing
authority, our HAP costs are exceeding our funding by about
$100,000 a month now.
So we're able to use that net restricted asset to cover
those costs. However, come next month, that money is gone, and
if we continue to lease at our current leasing rate, by the end
of the year, we'll have a large 70-some thousand dollar
deficit.
So to not have that deficit, where we have no money in the
bank to pay landlords, we're going to have to start decreasing
the number of families who are receiving assistance by at least
28 per month, which comes out to about 150-some at the end of
the year, just to have enough HUD HAP money to pay landlords.
Mrs. Capito. How are you going to pick which 28 are the
ones that don't--
Mr. Bazzie. That's going to be the difficult question
towards the end of this year. We do have a certain amount of
attrition each month--
Mrs. Capito. Right.
Mr. Bazzie. --maybe 20, 25, sometimes more, sometimes less,
so come November or December, I don't know what we're going to
do to--are we going to have to decide who on our program must
come off? And that's a conference call I have scheduled with
HUD Baltimore come next week.
Mrs. Capito. What kind of notification do you have to give
of the non-renewal? Is it 30 days or 60 days? Thirty?
Mr. Bazzie. The notification for--
Mrs. Capito. Non-renewal of your voucher.
Mr. Bazzie. You know, because this has never been a problem
before, I'm not sure, but I would think that it is probably a
30-day notice, but we would definitely want to give a family as
much possible notice as we can.
Mrs. Capito. Right.
Mr. Bazzie. Because the rent from then on is up to them.
Mrs. Capito. You also mention in your written testimony
some issues concerning the utility allowances in rural areas.
Has that been a problem for you?
Mr. Bazzie. It is somewhat of a problem. The requirement is
that each year, housing authorities update their utility
allowances so that the family is not paying more than 30
percent of their income towards rent and utilities.
So for every--
Mrs. Capito. So utilities are included in that, right?
Mr. Bazzie. Yes.
Mrs. Capito. Okay.
Mr. Bazzie. So for every dwelling unit that is rented,
we'll make an individual determination of an estimated utility
cost.
In order to come up with that estimate, we have to contact
every utility company within our jurisdiction, and in a 6-
county area, that's hundreds, when you include all of the water
and sewer public service--
Mrs. Capito. Right.
Mr. Bazzie. --districts, gas.
HUD is already determining estimated utility costs for
every fair market area. They have to, in order to come up with
this fair market--
Mrs. Capito. Right.
Mr. Bazzie. So my suggestion in the written was that this
may be one area that SEVRA will explore, because it's not in
there now, is to allow housing authorities to use this HUD data
if they so desire.
Now, a smaller community, it may not be a problem. In West
Virginia, the average housing authority is covering three
counties. So it is very staff-intensive and time-consuming when
the information is already there.
Mrs. Capito. Okay. I would like to ask whoever wants to
answer this question, are any of your housing authorities or
the folks that you interact with daily, are you all receiving
any money from the stimulus package?
Could you just briefly tell me how much and what you're
using it for, just really quick, because I don't have much
time.
Mr. Montiel. $25 million in Los Angeles for rehab of vacant
units and for public safety cameras in public housing
developments.
Mr. Bazzie. In Raleigh County, approximately $100,000,
$120,000 we're going to receive, really just to make additional
repairs to our public housing units.
Mr. Hiebert. I'm extremely envious of the $25 million
figure. We got $400,000, which is used for roofs and siding
that we hadn't been able to do in the last 20 years.
Ms. Rooker. And in Walla Walla, we're getting $245,000,
we'll deal with energy upgrades.
Ms. Zaterman. Every one of our members is using their
stimulus money, a lot of the money focused on upgrades that
have been in their 5-year plans for more than 5 years.
Many housing authorities are using it to fill a credit gap
on deals that were stalled or the value of the tax credit
dropping, so they can move forward with expanding the supply of
affordable housing.
And many of them are very focused on green energy
efficiencies and upgrading properties, not just on reducing
energy conservation, but looking at the surrounding sites to
how they impact climate change.
Ms. Newsome. And the $2 billion in project-based Section 8
funding to fund the gap has helped all of the members of NAHMA.
Mrs. Capito. Thank you.
Chairwoman Waters. Thank you.
Mr. Cleaver?
Mr. Cleaver. Thank you, Madam Chairwoman.
I would like to focus on the rent structure. And this
probably is a question that I should have asked the Secretary
when he was here on this same subject a couple of weeks ago.
Where do we get the 30 percent of the adjusted income from?
I mean, do any of you know?
Ms. Rooker. The Brooke Amendment.
Mr. Cleaver. Yes, I know. But I mean, where did it come
from? I mean, what is it based on? How was it designed? Was it
just a figure that was just pulled out of the air?
Ms. Rooker. It was negotiated by Congress, and this is
where we're at today.
Mr. Cleaver. Well, you're not suggesting we did that
technically and that we actually thought deeply about it?
Ms. Zaterman. It began at 25 percent, and it has been
raised to 30 percent, so there has been a second look. We have
looked at the percentage before, and in terms of the
development.
Mr. Cleaver. Well, do you believe that--do any of you
believe that in this legislation, that maybe we ought to look
at a flat rate? Do any of you have difficulty with a flat rate?
Mr. Hiebert. I think that may be something that can be done
on a case-by-case basis in different areas, depending on their
local community and their residents and their waiting list. I
think that ought to be part of the discussion that they have,
and that's why we're recommending the housing innovations
program.
That's the sort of thing that they can take a look at,
rather than making one decision here, allowing that local
flexibility to be able to work it in a particular community or
region.
Ms. Zaterman. And Congressman Cleaver, I would like to add
also that if we look at the current MTW agencies, they submit
annual plans every year, and report on what they have
accomplished each year.
A number of housing authorities are looking at rent reform
policies, not just flat rents, but reducing the percentage of
the rent to income to 28 or 27 percent, and eliminating
deductions.
I think this is a very strong argument for the housing
innovations program, where you continue to have tenant
protections and a rigorous evaluation, because we need to look
at what the impact actually is on residents, both in the
incentives for work, the amount of disposable income available
for education expenses and transportation, work-related
expenses.
So this is really the time we should be looking at what
current MTW housing authorities are doing in rent policy,
because I think we will find some very interesting results, and
contrary to early testimony, they are required to report on
their activities and the outcome of their activities.
But we do currently have data that we can look at, and we
should expand our experimentation in this area.
Mr. Cleaver. So all of you would then support the
flexibility to modify the rent subsidy?
I mean, you talked about, Ms. Zaterman, the--you know,
someone who has to, you know, ride the bus each day and who has
to pay for child care, may need a greater level of help, and
maybe 30 percent is too high, compared to someone who works
around the corner, they walk around the corner, and they can
drop their kids off at Grandma's.
Ms. Zaterman. I think the other case is for households who
are increasing their income, that every additional dollar that
they earn goes into an increased rent payment.
The thinking behind flat rents for some housing authorities
who are interested in this is, it is an incentive for work, in
that your rent does not go up when your income goes up, and
that you can budget and plan in terms of your expenses and not
be subject to rent increases every time your income goes up.
Mr. Cleaver. Well, the previous HUD Secretary--well, not
the--Mr. Jackson had supported the flat rate, which caused me
to not want to support it, but the--that was not nice--but he
pushed that, and I just recently started looking more
thoroughly and deeply at it, and if we can achieve what a flat
rate would do by making adjustments, then that certainly ought
to be something that we would include in the legislation. I'm
assuming all of you would agree with that.
Mr. Montiel. Yes.
Mr. Bazzie. Mr. Montiel?
Mr. Montiel. Yes.
Mr. Bazzie. Yes.
Mr. Hiebert. Yes, I very strongly agree with that. Also,
Congressman, in the original legislation of MTW and also
contained in the new contracts, is public housing, and our
programs have often been referred to as a safety net.
We have to have a safety net within that safety net. Nobody
fits the entire mold of any program. So we do take into account
somebody who has different circumstances and can't afford
whatever innovative program is being tried. So that is
contained in every HIP or Moving To Work Program.
Mr. Cleaver. Ms. Rooker?
Ms. Rooker. I would agree, and just on the administrative
side, it's just very complicated to deal with rent
calculations, and, you know, error rates, all the exclusions,
and NAHRO has done some modeling and studies as to what those
exclusions cost and then where that percentage goes to be able
to react to this bill, and hopefully be informative.
Mr. Cleaver. Ms. Newsome?
Ms. Newsome. NAHMA would definitely welcome looking into
how rents are calculated. In our written testimony, we also
brought up the issue of the fact that many of our residents we
pay a check to, to live in our communities.
Mr. Cleaver. Thank you, Madam Chairwoman. I yield back.
Chairwoman Waters. Mr. Driehaus?
Mr. Driehaus. Thank you, Madam Chairwoman.
I would like to pursue a little further the issue of rent,
but from a different perspective, and that is rent
reasonableness. And I'm interested in your perspectives.
We talked a little bit about HIP and MTR and the
flexibility that local housing authorities might want or should
have with regard to those programs, but I also find, certainly
in Cincinnati, we have seen that there are restrictions placed
upon local housing authorities when it comes to rent
reasonableness studies.
And at times, it has caused a reconcentration of pockets of
poverty in neighborhoods, because we see certain neighborhoods
where the rents are so high and landlords are not willing to
accept vouchers, that they're essentially closed off.
And so where that rental reimbursement is rather
significant relative to the market rate, and where the greatest
profit margin exists, we see landlords flocking into those
neighborhoods, especially to purchase very affordable single-
family homes, and then, you know, an introduction of
significant numbers of vouchers into those neighborhoods,
thereby reconcentrating pockets of poverty.
You know, the idea initially of the voucher program was to
deconcentrate poverty, not to reconcentrate it. And I'm
interested in your perspectives in terms of the flexibility
given to local housing authorities when it comes to rent
reasonableness and whether or not you are limited in your
ability to achieve the objective of decentralizing poverty.
Mr. Hiebert, maybe you could offer some perspective?
Mr. Hiebert. Yes. The original intent was very good, to
make sure that program participants weren't overpaying for
housing.
Our program in Keene exactly went through that thought
process you were just talking about. It makes allowance for
somebody to make a choice, if they would like to live closer to
their school, where they're working, closer to public
transportation. For instance, if they did that, maybe they
wouldn't have to have a car, wouldn't have to pay for parking,
wouldn't need insurance.
And even the housing industry, in looking at the magic 30
percent figure, and looking at, for instance, if somebody is
qualified for a mortgage, goes beyond that, and looks at what
other debts do they have, do they have a car payment, do they
have insurance, and that sort of thing.
If somebody would like to pay a little bit more to get
closer to their school or work of whatever, or a nicer
neighborhood, they should be able to have that choice. That's
what it's all about.
So yes, I would certainly like to see that added
flexibility, which is not actually contained in the Section 8
Program now, but is during, again, in my mantra, in the Moving
To Work Program.
Mr. Driehaus. Mr. Montiel?
Mr. Montiel. Yes. I think your comments are very well
taken, and whether definitely would benefit from the
flexibility, as would the clients that we serve.
In Los Angeles, we have our council district of 15 in the
city that has 25 percent of our 50,000 vouchers, Councilman
Parks.
And whereas, I'm not one to advocate that everyone should
live in Brentwood, that would be great, but that's really not
what the program is designed for, it's obvious that, as you get
into better neighborhoods, you have a double bottom, or triple
bottom line, more jobs, better transportation, and better
schools.
So anything that we can do to help the families get into
situations where they can become more self-sufficient quicker,
I think is a good thing, and that flexibility would certainly
be welcome.
Mr. Driehaus. Do you feel that there are restrictions right
now placed upon you in terms of your ability to adjust
reimbursement rates in given neighborhoods?
Mr. Montiel. Absolutely. We have a maximum of 100 percent
that we can provide of the FMR for any particular neighborhood
in Los Angeles, and to go past 110 percent, you have to get HUD
approval.
I'll give you an example. Right next door in Santa Monica,
they have gotten a HUD waiver because their minimum is 147
percent of the FMR, just because of the markets.
So yes, right now, we have a cap of 110 without approval.
Mr. Driehaus. Ms. Rooker?
Ms. Rooker. One item that may be of assistance is that HUD
bases the fair market rent at 40 percent of the percentile
within your market. Some markets have been raised to the 50th.
And it used to be at the 50th.
And raising the amount of rental stock available within
your fair market rent and your payment standard, whether it
goes to 110, opens up what I think you're trying to achieve, is
deconcentration, so the more rental units.
But that has a cost to the program, and that's why HUD
decreased the fair market percentile to the 40th versus keeping
it at the 50th, which provides more rental options within your
community, and then you get deconcentration.
Mr. Driehaus. Thank you, Madam Chairwoman. I yield back the
balance of my time.
Chairwoman Waters. The Chair notes that some members may
have additional questions for this panel, which they may wish
to submit in writing. Without objection, the hearing record
will remain open for 30 days for members to submit written
questions to these witnesses and to place their responses in
the record.
Now, this panel is dismissed, but before we adjourn, the
written statements of the following organizations will be made
part of the record of this hearing: The National Leased Housing
Association; the Poverty and Race Research Action Council; and
the California Housing Partnership.
I would like to thank our witnesses for being here today,
for their patience while we had to go to vote. We appreciate
the work that you are doing.
And this hearing is now adjourned.
[Whereupon, at 1:08 p.m., the hearing was adjourned.]
A P P E N D I X
June 4, 2009
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