[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]


 
                 STATUS OF THE ``BIG FOUR'' FOUR YEARS 
                        AFTER HURRICANE KATRINA 

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

                             FIELD 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

                               __________

                            AUGUST 21, 2009

                               __________

       Printed for the use of the Committee on Financial Services

                           Serial No. 111-71

                               ----------
                         U.S. GOVERNMENT PRINTING OFFICE 

53-251 PDF                       WASHINGTON : 2010 

For sale by the Superintendent of Documents, U.S. Government Printing 
Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; 
DC area (202) 512-1800 Fax: (202) 512-2104 Mail: Stop IDCC, 
Washington, DC 20402-0001 
















                 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

                              ----------                              
                                                                   Page
Hearing held on:
    August 21, 2009..............................................     1
Appendix:
    August 21, 2009..............................................    73

                               WITNESSES
                        Friday, August 21, 2009

Freeman, Yusef, Project Manager, McCormack Baron Salazar.........    55
Grauley, Jim, President and Chief Operating Officer, Columbia 
  Residential....................................................    46
Henriquez, Hon. Sandra Brooks, Assistant Secretary for Public and 
  Indian Housing, U.S. Department of Housing and Urban 
  Development....................................................     9
Johnigan, Donna, Vice President, B.W. Cooper Resident Council....    53
Johnson, Valerie S., former resident, Lafitte Public Housing 
  Development....................................................    51
Key, Keith B., Chief Executive Officer and President, KBK 
  Enterprises....................................................    52
Marshall, Jocquelyn, President, C.J. Peete Resident Council......    57
Mingo, Stephanie, former resident, St. Bernard Public Housing 
  Development....................................................    48
Nagin, Hon. C. Ray, Mayor, City of New Orleans...................     6
Patterson, Angela, Director, UNITY Welcome Home..................    38
Perry, James, Executive Director, Greater New Orleans Fair 
  Housing Action Center..........................................    32
Sinha, Anita, Senior Attorney, The Advancement Project...........    30
Tuggle, Laura, Southeast Louisiana Legal Services................    34
Whetten, Michelle, Vice President and Gulf Coast Director, 
  Enterprise Community Partners..................................    49
Wiggins, Cynthia, HANO Resident Advisory Board...................    36
Woods, Wayne, General Counsel, Housing Authority of the City of 
  New Orleans....................................................    11

                                APPENDIX

Prepared statements:
    Freeman, Yusef...............................................    74
    Henriquez, Hon. Sandra Brooks................................    78
    Marshall, Jocquelyn..........................................    86
    Mingo, Stephanie.............................................    91
    Nagin, Hon. C. Ray...........................................    94
    Patterson, Angela............................................    99
    Sinha, Anita.................................................   105
    Tuggle, Laura................................................   122
    Whetten, Michelle............................................   147
    Wiggins, Cynthia.............................................   154

              Additional Material Submitted for the Record

Waters, Hon. Maxine:
    Written statement of Samuel L. Jackson, Mayday New Orleans...   162


                       STATUS OF THE ``BIG FOUR''
                            FOUR YEARS AFTER
                           HURRICANE KATRINA

                              ----------                              


                        Friday, August 21, 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 10:25 a.m., in 
the Lawless Memorial Chapel, Dillard University, 2601 Gentilly, 
New Orleans, Louisiana, Hon. Maxine Waters [chairwoman of the 
subcommittee] presiding.
    Present: Representatives Waters, Cleaver, and Cao.
    Chairwoman Waters. Good morning, ladies and gentlemen. 
Today is our second day at Dillard University's beautiful 
Lawless Chapel. Again, I would like to extend my thanks and 
appreciation to President Hughes for allowing us to use this 
space for a second day.
    And with that, I would like to ask President Hughes if she 
would come forward and share with us her thoughts about our 
visit here and the University, or anything else she would like 
to talk about.
    Ms. Hughes. Good morning.
    Chairwoman Waters. Good morning.
    Ms. Hughes. I am so pleased for this second day and I base 
that on the fact that yesterday was so substantive. I listened 
to so many people who were pleased with the information and who 
learned as much as I did, because I did not understand all of 
the complexities involved in the topic. So we have the 
privilege of having a second day so that we can listen to 
another topic.
    Let me just say thank you, the Honorable Chairwoman Waters, 
for coming to Dillard University now for 4 days, and presenting 
issues that are so critical and so important to the entire 
community. I also want to thank the Honorable Emanuel Cleaver, 
who remained here and who yesterday was very insightful as 
well. Now I know why your son, the alumni from Dillard, was so 
successful. You did a good job.
    Mr. Cleaver. Thank you.
    Ms. Hughes. To the Honorable Joseph Cao, you have become an 
ally to Dillard University and that is very, very important to 
us as well.
    I want to thank the entire community for coming to Dillard 
University, because Dillard enjoys opening its doors for the 
community as well. We are now in a position to do that because 
we are almost finished with the total restoration of this 
university. Every single building has almost been restored and 
certainly you can tell that this one is now up to par. And so I 
invite the community to use this space as they need to for 
these kinds of activities and other appropriate activities.
    I want to welcome other politicians who are here as well 
and I would like to have them stand so they can be recognized. 
Would all of our elected officials stand to be recognized, 
please?
    [members of the audience rise]
    Chairwoman Waters. I do not know if everyone heard the 
President welcoming all of the elected officials. She asked 
that you all stand, please stand.
    Thank you very much.
    Ms. Hughes. Thank you. Have a good session.
    Chairwoman Waters. Thank you very much, President Hughes. 
We are so appreciative for your generosity and we are delighted 
to be back at Dillard and let me just say you have done a 
wonderful job. This building is beautiful and we feel very, 
very fortunate to be able to be here. And even though we do not 
solicit applause in these hearings, I would like to ask the 
audience to please applaud President Hughes for the wonderful 
job that she is doing here at Dillard.
    Thank you so very much.
    [applause]
    Chairwoman Waters. Ladies and gentlemen, today is our 
second hearing in Dillard University's beautiful Lawless 
Chapel. We are here today to talk about the status of the ``Big 
Four'' 4 years after Hurricane Katrina.
    Now, I would like to give a special thanks to my colleague 
Representative Emanuel Cleaver for joining me again today. And 
I must share with you that we are on break from the House of 
Representatives for the month of August. Many of our members 
are traveling all over the world. They are in Afghanistan, they 
are in Africa, they are just all over the world. But some of 
our members decided that even if they took a few days to do 
international work, that they were going to spend time on the 
domestic agenda. So in addition to the work that Congressman 
Cleaver is doing in his own home district, he thought it was 
important enough to take time out to be here in New Orleans to 
follow up on the work that we have been doing on the 
subcommittee that I chair, the Subcommittee on Housing and 
Community Opportunity, on which he serves. And so I would like 
to thank him again for his commitment, and thank him for 
closing out yesterday's hearing, and of course for the 
attention that he has paid to this issue, Hurricane Katrina and 
New Orleans and the rest of the Gulf Coast. I know when we 
return to Washington, he is going to want to tell Congressman 
Green and all of the other members of the subcommittee about 
what took place here.
    Now remember, Congressman Green was with us yesterday, but 
he had to get back to Houston, Texas. He could not be here 
today, but he is very much involved in this oversight and 
follow-through that we are doing.
    I am also pleased that we are joined by Representative Cao, 
who represents this district. And without objection, Mr. Cao 
will be considered a member of the subcommittee for the 
duration of this hearing. I would like to thank him for his 
quick response to our request to be a part of this hearing and 
I would like to thank him for saying to us that not only would 
he be present, but he too is interested in the subject of the 
two day hearing; first of all, that which we talked about 
yesterday, the Road Home Program, and of course, that which we 
will be talking about today, the ``Big Four.'' So thank you, 
Representative Cao.
    Further, I believe that there are several members of the 
Louisiana State Legislature, some who stood a moment ago when 
President Hughes asked elected officials to stand. And I thank 
you for being in attendance today.
    Again, today's hearing will focus on the status of the 
``Big Four'' 4 years after Hurricane Katrina. Yesterday, we 
focused on the Road Home Program and I believe that yesterday's 
hearing generated the possibility of some real solutions that 
Mr. Cleaver, Mr. Green, and I can work on when we return to 
Washington. And I am hoping for a similar result for today's 
hearing.
    Commonly referred to as the ``Big Four''--B.W. Cooper, C.J. 
Peete, Lafitte and St. Bernard--were the largest public housing 
developments in New Orleans with over 4,500 units. While some 
of these units sustained severe damage as a result of Hurricane 
Katrina, most emerged from the storm with minimal damage, that 
we think could have been repaired. Unfortunately, the decision 
was made to demolish all of these units. Let me be clear, I 
have always opposed the demolition of public housing and the 
``Big Four'' was no exception. Nationally, we have lost over 
200,000 units to demolition. This is why Chairman Barney Frank 
and I are asking for a one-year moratorium on all demolition of 
public housing nationwide.
    I believe that the demolitions here in New Orleans were 
especially problematic for several reasons.
    First, many former residents of those developments were 
dispersed around the country and were flat out excluded from 
the decision-making process. HUD did not know where most of 
these people were and claimed they did not want to return. I 
knew that this was not true, because I traveled to cities such 
as Houston and met with displaced public housing residents. 
They all told me the same thing: They wanted to come back to 
their homes.
    Second, following Katrina, the number of homeless people in 
the City doubled from 6,000 to 12,000. At the same time, rents 
rose sharply. In fact, today, rents are over 50 percent higher 
than they were before the storm. In light of this crisis in 
affordable housing, tearing down a major source of housing for 
low-income families just did not make good sense to me.
    Third, the redevelopment plan that had been submitted by 
HANO and HUD are troubling. Essentially, HUD was going to 
demolish 4,500 units of public housing and build back 600, 
about an 85 percent reduction in the number of units. Yes, 
these units would be part of mixed-income developments, but tax 
credit units and market rate units are unaffordable to 
extremely-low-income families who predominantly live in public 
housing. It seemed that the strategy was to only allow a 
limited number of families to return and then to send the 
others to the suburbs with vouchers in a city which had lost a 
significant amount of its rental housing.
    That is why I opposed the demolitions. Now as we all know, 
the demolitions have taken place. Construction is currently 
underway and I am concerned about what is being built back. 
These developments simply do not have enough public housing 
units. I am also concerned about some of the occupancy policies 
that the private developers of these properties are 
implementing. These policies, such as work requirements for all 
adult household members, serve to further limit the ability of 
residents to move to the new developments.
    Lastly, I am concerned that some developments might not get 
built at all. Problems in the tax credit market are affecting 
the redevelopment of affordable housing nationwide. It seems 
that B.W. Cooper and Lafitte in particular are challenged as a 
result of tax credit issues. I am very much interested to hear 
the impact of these challenges on the development of these 
properties.
    I look forward to hearing the witnesses' views on this very 
important program. And now I would like to recognize Mr. 
Cleaver for his opening statement.
    Mr. Cleaver. Thank you, Madam Chairwoman.
    Let me again thank you for the vision that you have to try 
to make right one of the tragedies of our lifetime. This of 
course was devastating to the people of New Orleans, but in 
addition to that, this may represent one of our most 
embarrassing moments for the Federal Government in its modern 
history, the fact that we have been unable to rebuild one of 
our own communities.
    I took great pride in being a part of the vote to send $14 
billion to this community. I was troubled to learn that one 
company walked away with almost $1 billion of the $14 billion, 
and that should trouble every taxpayer in this country.
    The truth of the matter is we have the opportunity to still 
get this thing right and hopefully we will secure from the 
panelists today additional information that can be used when we 
go to Washington to try to restructure the way in which the 
Federal Government is doing business here in New Orleans.
    Yesterday, and I do not know if she is still here, a woman 
spoke with me for about 5 minutes and it haunted me all night 
last night. She told me, while we were standing out in the 
hallway, that her mother had to leave during Katrina and when 
she heard about the Road Home, the mother became excited, 
wanting to finally make it home. But because the road home was 
filled with obstacles, she made it home, but she was in a 
casket. She began to weep out in the hallway yesterday over the 
fact that the only thing her 80-something-year-old mother 
wanted while she remained on this planet was to come home, to 
come to New Orleans. That is all she wanted, nothing 
extravagant. She just wanted to come home and she came home in 
a casket.
    There are probably people all around the country who tried 
to come home. Many of them have been hijacked on the road home 
and I think that it is the responsibility of all of us to do 
whatever we can do to change things. We are hoping to make some 
adjustments, Mr. Mayor, in the legislation so that HUD will 
have an easier time doing what they need to do. And hopefully 
we can say we are moving into a new day and that one day 
Chairwoman Waters will bring us back to say that the road home 
indeed worked, that people did come home.
    But let me just finally say this, and this is a little 
problematic for me to even say, but some of the testimony we 
have heard and some of the things that were told us in our 
listening session yesterday morning, there have been some bad 
people doing some bad stuff. And I think we have a 
responsibility to try to correct it, because right now, the 
road home is a road not taken.
    Thank you very much, Madam Chairwoman. I yield back the 
balance of my time.
    Chairwoman Waters. Thank you. I now recognize 
Representative Cao for his opening statement.
    Mr. Cao. Thank you, Madam Chairwoman. I would like to thank 
my distinguished colleagues--
    Chairwoman Waters. Would you speak up so they can hear you 
way in the back?
    Mr. Cao. Thank you very much.
    First of all, I would like to thank you, Madam Chairwoman, 
for taking a leadership role in the Congress in regards to the 
housing issue here in New Orleans. I would like to thank 
Congressman Cleaver for spending his recess here in our great 
City. And I would like to thank Dr. Hughes for her generosity 
and for the friendship that we have been able to establish in 
the last several months in working together in order to bring 
this City back and to push the whole recovery process forward.
    For the last 8 months, we have worked very hard with the 
State leadership as well as City leadership to address the 
housing issues of our people here in the great City of New 
Orleans. I understand some of the positions that they took, 
obviously in facing an issue that was unprecedented. Many of 
the leadership of the City wanted to rebuild in a way that can 
provide the people with the best possible environment in order 
for the people of this great City to live and to raise their 
children. Obviously, there are issues in any recovery process 
and in any decisions that members of leadership have to make.
    And I applaud your leadership in trying to look at some of 
these problems and trying to look at some of these issues and I 
hope that we, as members of Congress, can work together in 
order to address the housing needs of this City and hopefully 
through our concerted effort, we can push forward this whole 
recovery process in this region.
    Thank you very much.
    Chairwoman Waters. Thank you very much, Congressman.
    I am now going to call on our first panel: The Honorable C. 
Ray Nagin, Mayor of the City of Los Angeles; the Honorable 
Sandra Brooks Henriquez--
    Mayor Nagin. You just gave me a new job.
    Chairwoman Waters. What did I say?
    [laughter]
    Mayor Nagin. Please do not do that.
    Chairwoman Waters. It means that I am thinking about home.
    The Honorable C. Ray Nagin, Mayor, City of New Orleans; the 
Honorable Sandra Brooks Henriquez, Assistant Secretary for 
Public and Indian Housing, U.S. Department of Housing and Urban 
Development; and Mr. Wayne Woods, General Counsel, Housing 
Authority of the City of New Orleans.
    With that, let us start with the Honorable C. Ray Nagin, 
the Mayor, who has been through every step, every inch, every 
problem, every success, all that has to do with Katrina and 
everything that has happened since. Thank you for being here 
today, Mayor Nagin. We welcome your testimony.

  STATEMENT OF THE HONORABLE C. RAY NAGIN, MAYOR, CITY OF NEW 
                            ORLEANS

    Mayor Nagin. Well, thank you to the Honorable Chairwoman 
Maxine Waters, to the members of the subcommittee, to 
Congressman Cleaver, and Congressman Cao. I want to thank you 
for this opportunity to address you today, and for your 
persistence in making sure that the struggles and the 
challenges that New Orleans faces stay on the national stage, 
if you will, and it does not go away.
    Congresswoman Waters, you have been here from the 
beginning, you have seen all of our challenges and struggles 
and you have been working tirelessly, and we in New Orleans, 
all of our citizens thank you so much for everything that you 
have done.
    I want to go really quick and touch on a couple of key 
areas, as you asked me to. First, let me tell you a little bit 
about where New Orleans is in its progress in the recovery and 
then I will talk to you a little bit about the ``Big Four.''
    Madam Chairwoman and members of the subcommittee, the City 
of New Orleans has gone through a lot. We are facing our--
coming up on the fourth year anniversary of Hurricane Katrina 
this August 29th. Our recovery strategy is working, but I must 
be very blunt with you and let you know that the dollars that 
you approved many years ago are just starting to flow to the 
City of New Orleans.
    When you talk about the $14 billion that was allocated, a 
lot of that went to the Road Home Program, most of it went to 
hurricane protection, but out of that $14 billion, only about 
$411 million was allocated to the City of New Orleans for 
disaster recovery--that is it. And we had a $14 billion need.
    But in spite of all that, we have been able to move, press 
ahead, and make progress. Our population sits at about 80 
percent of our pre-Katrina numbers and our citizens continue to 
come home. As a matter of fact, it was recently announced that 
New Orleans was the fastest growing city in America for cities 
above 100,000 people. So we continue to be amazed at the 
resiliency and the dedication and the determination of our 
citizens.
    We are directly managing about $1.2 billion in recovery 
projects and most of that is FEMA related repairs that the City 
is managing directly. About $640 million of that is street 
repairs.
    My staff informed me that there was some talk yesterday 
about us sitting on $200 million. Let me see if I can clear 
that up. I do not know which $200 million they are talking 
about, but I will let you know what we are dealing with. The 
State, in its wisdom, our State legislators, we knew we had 
shortfalls, significant shortfalls in FEMA funding, so they set 
up for us a $200 million revolving fund that was designed to be 
gap financing until FEMA caught up with what it really cost for 
us to do repairs. We have that fund, we have been using it, and 
right now it is at about 70 to 75 percent of those dollars are 
appropriated, and as a matter of fact, if FEMA continues to 
stay where they are today, we will run out of that pot of money 
by November.
    I do not know if they were talking about the $411 million 
that we got from the disaster CDBG money. But 93 percent of the 
projects that we have sent up to the State have been approved 
or are either in the final approval stages and most of those 
projects are moving forward.
    So I am not sure. If there is some money sitting around, it 
is not sitting around at the City level.
    We have made progress with bringing back our performing 
arts, the Mahalia Jackson Theatre for Performing Arts has been 
brought back on line. We recently announced a big deal with 
Nickelodeon. They are coming to New Orleans with a company 
called Southern Star to revitalize the Six Flags site that has 
been shuttered since Hurricane Katrina. We have had successful 
Sugar Bowls, Super Bowls, Essence, Mardi Gras--you name it, our 
economy continues to improve.
    Our unemployment rate is among the lowest in the country, 
if you can believe that. New Orleans has been also named as the 
fifth best city in America to get a job. Business Week has 
voted us as one of the best cities to ride out the national 
recession.
    But we still have our challenges, so I am not going to 
totally say that everything is peachy keen. We have many, many 
challenges in our City as it relates to crime fighting, as it 
relates to post-Katrina stress that is still in our community 
that is manifesting itself in suicides, attempted suicides in a 
number of cases that our police officers deal with.
    Let me turn my attention to the ``Big Four.'' You know, we 
had many tough decisions to make after Hurricane Katrina. Most 
of those public housing developments were in a state of 
disrepair before Katrina and then we had some flooding that 
occurred, and we had some delays in repairs. So the decision 
was made to move forward to try and create a better model. But 
we put some conditions before we would allow HUD to move 
forward with the demolitions and the major redevelopment of 
those units.
    First, we said we would like to see a mixed-income model 
that basically would not concentrate any demographic or any 
income level in any one particular area of the City, but we 
wanted to make sure that all public housing residents were 
properly taken care of.
    Before we would allow them to move forward, we wanted 
verification of full funding of the tenant protection program, 
which we got.
    We wanted evidence that the 4,500 units would either be 
rebuilt or there would be Section 8 vouchers or vouchers 
associated with those tenants so that every tenant would be 
taken care of.
    We wanted documentation of their redevelopment financing 
plan, which we were able to get.
    And we wanted executed development contracts to make sure 
that they were ready to move forward and we got those.
    And then finally, we also made it a requirement that we 
wanted to see a memorandum of understanding with the resident 
councils to make sure that the residents had some input in 
these developments and we were able to obtain that.
    Now what is our long-term vision for the ``Big Four'' and 
for all public housing? We want to make sure that every 
resident who was here before Katrina has affordable housing 
that is better than what they had pre-Katrina. We want to make 
sure that HANO would have, as it moves forward, low vacancy 
rates, that they would maintain up-to-date waiting lists, that 
they would have timely response for maintenance. We want to 
make sure that all of the renovations and reconstruction were 
completed on a timely basis and we wanted a reasonable budget 
sufficient in the future for appropriate maintenance. And 
finally, we wanted to make sure that this development or this 
housing authority was returned to local control so that the 
citizens could have more input on what goes on in the future.
    Let me close by talking to you a little bit about the 
affordable housing situation in New Orleans as it exists today. 
Hurricane Katrina damaged or destroyed more than 57,000 rental 
units in the City of New Orleans, 75 percent of those were 
affordable to citizens earning 80 percent of the area median 
income. Shortly after the storm, the Federal Government 
increased the amount it would pay for vouchers. This had the 
effect of pushing rents up in the community when supply was 
down. We saw a 46 percent increase in rents from the year 2005 
to the year 2008. In addition to that, we also see in the City 
of New Orleans a percentage of renters who spend more than 30 
percent of their income on housing costs, increased more than 
30 percent, from 48 percent to 54 percent.
    We have focused on making sure that more affordable units 
come into the marketplace, we have invested over $26 million to 
leverage 1,700 affordable units that are either on line or 
coming on line. And if everything continues with the current 
trend, by 2011, 2012, we should have 36,000 affordable units 
back in the City of New Orleans. That will take us, you know, 
pretty close to what we had pre-Katrina, which is a little 
ahead of the population trends that we are seeing today.
    Another big need that we see in the community--and you 
talked about this yesterday--is there are many citizens in our 
community who did not receive enough from the Road Home Program 
or the insurance companies, so there are gaps that they need 
filled. We put together a program where we have put out in the 
community forgivable gap loans of $35,000 to help primarily 
senior citizens and disabled people, to see if they could fill 
those gaps.
    Our goal in this renewal of New Orleans is to hopefully get 
to an environment where New Orleans can have a homeownership 
rate that is closer to the national average. So we are putting 
as many resources as we can, Madam Chairwoman, into helping 
those homeowners to complete their repairs. Also to have a very 
aggressive soft second program that allows young people to 
become homeowners or anyone in the community to become 
homeowners. It is a $65,000 program where you can have a soft 
second to help you become a homeowner.
    Madam Chairwoman, I want to thank you for coming to New 
Orleans once again. The ``Big Four'' are a big part of our 
history and the fabric of our community and from what we gather 
from HUD and HANO is that those projects are moving forward. We 
have one development that has some financing issues, but the 
others seem to be moving forward and we want to keep this 
momentum going and hopefully we will have better housing for 
all of our citizens.
    Thank you.
    [The prepared statement of Mayor Nagin can be found on page 
94 of the appendix.]
    Chairwoman Waters. Thank you very much, Mr. Mayor.
    Now, we will hear from the Honorable Sandra Brooks 
Henriquez, Assistant Secretary for Public and Indian Housing, 
U.S. Department of Housing and Urban Development.

 STATEMENT OF THE HONORABLE SANDRA BROOKS HENRIQUEZ, ASSISTANT 
  SECRETARY FOR PUBLIC AND INDIAN HOUSING, U.S. DEPARTMENT OF 
                 HOUSING AND URBAN DEVELOPMENT

    Ms. Henriquez. Thank you and good morning.
    Chairwoman Waters. Could you speak directly into the 
microphone so that they can hear you in the back?
    Ms. Henriquez. I hope this is better.
    Chairwoman Waters. That is better.
    Ms. Henriquez. Thank you. Thank you and good morning, 
Chairwoman Waters, Mr. Cleaver, Mr. Cao.
    Chairwoman Waters. Straight into it.
    Ms. Henriquez. I am honored to be with you today and to be 
here on behalf of the Department of Housing and Urban 
Development.
    I want to discuss the progress we have made over the last 6 
months and share HUD's vision for creating sustainable, 
inclusive, and prosperous communities to provide affordable 
housing choices for New Orleans' low-income residents and offer 
greater economic and educational opportunities and to help New 
Orleans move from recovery to revitalization.
    Prior to Katrina, the Housing Authority of New Orleans, 
which has been under HUD receivership administrative control 
since 2002, was already transforming conventional public 
housing to mixed-income developments. At the time Katrina 
struck, there were 7,379 public housing units, of which 5,146 
were occupied.
    Since the hurricane, HUD and HANO have committed to provide 
housing for all public housing residents and Housing Choice 
Voucher holders wanting to return to New Orleans, and we have 
prepared a redevelopment plan for the ``Big Four'' to 
facilitate that return.
    The redeveloped ``Big Four'' will encompass over 4,000 
mixed-income units and the initial phases will result in 2,170 
new units, including public housing, affordable rental, 
affordable homeownership, and market rate rental units.
    These initial phases use tax credit equity, CDBG funds, 
bonds, HOPE VI, HANO capital, and other funds. And HUD also 
obtained additional funding from FEMA and HANO contributed more 
money through the Section 901 extension and worked diligently 
to leverage resources through the Louisiana Housing Tax Credit 
Program and the Louisiana Recovery Plan's Piggyback Program, to 
maximize the number of affordable housing units developed.
    Phase I construction is now underway at both St. Bernard 
and C.J. Peete and by December 2010, Phase I construction will 
be complete, along with the homeownership units, for a total of 
948 new units. 1,326 units at St. Bernard will be complete in 
2012 and 510 units at C.J. Peete will be complete by the end of 
2011.
    Both Lafitte and B.W. Cooper have experienced delays, 
primarily because of the equity market downturn last fall. 
Construction on the first sub-phase of Lafitte, or 134 units, 
will begin immediately following next week's closing. Phase I 
infrastructure work began at B.W. Cooper in January 2009 and is 
projected to close later this year, producing 410 units. At all 
``Big Four'' sites, former public housing residents of both 
complexes will receive first preference for the public housing 
units there.
    Due to the delays that have affected Lafitte and Cooper, 
the placed in service date of December 31, 2010, poses a 
significant challenge. The Administration supports a 
legislative change to extend the placed in service deadline to 
December 31, 2012, and find an appropriate budget offset. We 
will work with Congress to ensure that these projects can be 
completed as planned.
    Beyond the ``Big Four,'' HANO, in partnership with HUD and 
the State of Louisiana, will produce more than 7,600 hard 
housing units with 6,320 of those units serving 1,174 more low-
income families at the end of the redevelopment process than 
were served prior to Katrina.
    Chairman Waters, I want to make clear HUD's commitment to 
creating affordable housing opportunities for low-income 
families. HUD is equally committed to ensuring that these 
initiatives, and all Federal housing programs, are administered 
in a way that affirmatively furthers fair housing and equal 
housing opportunity in New Orleans and across this Nation.
    Within days of the President's inauguration, the 
Administration, along with HUD, acted quickly to ensure that 
families receiving assistance under the Disaster Housing 
Assistance Program, or DHAP, would be given additional time to 
transition to permanent housing solutions before DHAP came to 
an end.
    So with our Administration partners, we announced the 
Transitional Closeout Plan for DHAP families. This program 
provided rental assistance and additional time to transition 
families off temporary housing and into permanent housing. 
Altogether, nearly 350 public housing agencies across the 
country assisted in serving more than 31,000 displaced 
families.
    As part of this effort, public housing agencies have issued 
more than 11,000 vouchers under an $80 million special 
appropriation from Congress, of which 4,200 have been issued by 
HANO to DHAP families here in New Orleans. HUD and FEMA have 
also agreed to provide 2 months of additional transitional 
rental assistance to families in the HCV pipeline. This 
assistance ends October 31, 2009.
    By the end of December 2009, we expect that this number of 
vouchers should go from just under 9,000 pre-Katrina to about 
15,000, including 4,400 vouchers to replace units demolished as 
part of the ``Big Four'' redevelopment. In summary, there are 
now significantly more assisted housing opportunities for low-
income families in New Orleans than existed pre-Katrina.
    I want to be clear, public housing transformation is still 
a top priority for HUD. But housing surrounded by disinvestment 
and failing schools has virtually no chance of success.
    Choice Neighborhoods, which more than doubled this year's 
funding under HOPE VI to $250 million, will expand upon the 
legacy HOPE VI built by leaders like you, Congresswoman Waters, 
by broadening the range of activities eligible for funding and 
fostering better coordination between housing, schools, and 
other supportive services.
    In addition, we are investing $150 million in our 
Sustainable Communities Initiative that will bring together 
transportation and housing planning at the local level to 
reduce costs and increase opportunities for working families 
who spend nearly 60 percent of their budget on housing and 
transportation.
    We are incredibly excited to start this work and New 
Orleans would certainly benefit from such a program.
    I hope it is clear to every single person in this room 
today that HUD is committed to working with you to make this 
community whole again--to changing the game on the ground by 
cutting through bureaucratic red tape and by making a strong, 
inclusive community the foundation of our revitalization 
efforts.
    Thank you for this opportunity to speak with you today. I 
look forward to your questions.
    [The prepared statement of Assistant Secretary Henriquez 
can be found on page 78 of the appendix.]
    Chairwoman Waters. Thank you very much.
    Mr. Wayne Woods, General Counsel, Housing Authority of the 
City of New Orleans.

STATEMENT OF WAYNE WOODS, GENERAL COUNSEL, HOUSING AUTHORITY OF 
                    THE CITY OF NEW ORLEANS

    Mr. Woods. Good morning.
    Chairwoman Waters. Good morning.
    Mr. Woods. Honorable Chairwoman Maxine Waters, Congressman 
Cleaver, and Congressman Cao, again, my name is Wayne Woods and 
I am general counsel and chief operating officer for 
communication and intergovernmental affairs for the Housing 
Authority of New Orleans. Thank you for allowing HANO to appear 
before you today.
    As you no doubt know, HANO's work is critical to the 
recovery of the City of New Orleans. Because we help the less 
fortunate residents of our City with affordable housing, we 
probably have more direct contact with people on a daily basis 
than any other public agency in the City of New Orleans. What 
we have learned is simple. We have made progress since Katrina, 
but we recognize much work remains to be done.
    Before Katrina, HANO had 5,146 occupied public housing 
units. We currently have 2,254 affordable housing units 
occupied. A large part of our strategy, however, in serving the 
residents of our City is by the redevelopment of B.W. Cooper, 
C.J. Peete, Lafitte, and St. Bernard, the ``Big Four.'' Allow 
me to give you a brief synopsis of those developments to date.
    At B.W. Cooper, there were 1,550 units, of which 963 were 
occupied before the storm. KBK Enterprises and its development 
partner, the B.W. Cooper Resident Management Corporation, are 
redeveloping the site. Phase I demolition work has been 
completed, public infrastructure work is about 40 percent 
finished, and construction will begin as soon as the financial 
closing takes place. Cooper will cost about $225 million with 
Phase I at $138 million. Phase I will include 410 units. The 
first units are expected to be available in spring 2010 with 
Phase I completed by April 2011. Once the entire Cooper site is 
completed, there will be 740 units.
    At C.J. Peete, we originally had 1,403 units. When Katrina 
struck, only 144 units were occupied at the time. Central City 
Partners LLC, comprised of McCormack Baron Salazar, KAI Design 
and Build and the New Orleans Neighborhood Development 
Collaborative, is developing this site. Peete, which is now 
called Harmony Oaks, will cost about $183 million to develop. 
Peete will have 460 units when completed in December 2010 and 
the first units are slated for occupancy before the end of this 
year.
    At Lafitte, we had 896 units, with 865 occupied just before 
Katrina. The developer, Providence Enterprises Orleans LLC, 
will offer affordable and market rate housing at a cost of $400 
million. The community is being developed in phases. The first 
sub-phase will see 134 on-site affordable rental units by 
December 2010 and 47 on-site affordable homeownership units by 
March of 2011. Work has already been completed on 10 off-site 
homeownership units. The cost of the entire Phase I of the 
development, which will include 812 units, is $246 million.
    At St. Bernard, we had 1,464 units before the storm with 
963 occupied. Columbia Residential is developing that site. It 
is expected to cost $190 million for on-site development. Phase 
I alone will cost $138 million and will see 466 units. Of these 
units, 83 are expected to be completed by the end of this year 
with the rest of Phase I by December 2010.
    HANO's role in the redevelopment of the ``Big Four'' is 
very important. The success of each of the developments hinges 
upon our effectively exercising our role. HANO has the 
responsibility for planning, coordinating, and implementing the 
redevelopment of the site. In fact, HANO is a developer partner 
on each of the development scenes. HANO has worked with HUD and 
the State to identify capital funding that could be leveraged 
to provide total funds necessary for each project and HANO 
itself has committed more than $100 million of its own funding 
to the development.
    Because of the unprecedented amount of dollars that are 
being expended by HANO, we have an excellent opportunity to 
financially impact the lives of our citizens and our residents 
who were part of our communities before the storm. As such, 
HANO is committed to providing employment opportunities for its 
residents and resident-owned businesses. Each developer is 
required to provide a Section 3 plan for each project and 
submit monthly reports detailing the status of Section 3 
employment and outreach efforts. HANO has also assigned project 
managers to each site to monitor compliance.
    In order to re-occupy the units, HANO has adhered to HUD's 
PIH Notice 2007-3. Among other things, the requirements give 
families living at the site at the time of Katrina the first 
preference to return. Additional site-specific re-occupancy 
criteria were developed with residents, HANO, investors, and 
the lenders. Selection and occupancy criterias were discussed 
with residents in open meetings and with investors and lenders 
during the financing negotiations.
    Now on the selection of the ``Big Four'' developments, our 
developments can only be a success if we have strong 
development partners. To select the developers for Cooper, 
Peete, and St. Bernard, HANO issued a request for 
qualifications in October of 2006. Proposals were received in 
January of 2007 and then HANO conducted a ranking. The HANO 
Board voted in March of 2007 to begin negotiations with the 
highest ranked respondents.
    HANO received an unsolicited proposal from Providence 
Enterprises to redevelop Lafitte in conjunction with 
Providence's other planned projects in the surrounding 
neighborhood. HANO requested HUD approval of a non-competitive 
procurement and on August 2006, HUD granted such approval.
    In closing, Congresswoman and the other Members on the 
dais, these are challenging times for our City and for our 
residents. HANO's leaders realize and understand that. As 
affordable housing advocates, we understand the intricacies in 
providing effective housing options to our low-income 
residents. Particularly for the last 4 years, we have been on 
the front line in providing service for the most vulnerable of 
our citizens. We are proud of our work and are passionate about 
what we do. But we recognize again that more still needs to be 
done. We are committed to the members of our community and look 
forward to continuing our advocacy with them in the future.
    On behalf of the leadership of HANO, I thank you for your 
time.
    Chairwoman Waters. Thank you very much. I will recognize 
myself for 5 minutes to begin the questioning of this panel. 
Let me thank the panel for coming.
    Mr. Mayor, I was particularly drawn to the program that you 
identified, the $35,000 gap program for forgivable loans.
    Mayor Nagin. Yes.
    Chairwoman Waters. Could you tell us a little bit more 
about that? How does it work?
    Mayor Nagin. Congresswoman, what we did is we started to 
get some feedback from citizens and from people in the 
community that the Road Home Program was just insufficient. We 
were hearing there were gaps of anywhere from $30,000 to 
$50,000 per household. We were getting this from people who 
were working in the community with a lot of volunteer help 
trying to get a lot more of our citizens in their houses.
    To make a long story short, we took $10 million of CDBG 
money and we set up this program. We put together a lottery 
process, we advertised it to our citizens and we were, to be 
quite frank, blown away by the response. With the $10 million, 
we could only help about 300 families. The response--on the day 
of the lottery, there were 6,000 people who had signed up and 
this was just for senior citizens and people who had 
disabilities. That told us that we needed to expand this 
program. So we now have another $10 million that we are getting 
ready to put out on the street for that same group and we have 
another allotment of disaster CDBG dollars that we will open it 
up to working families, not necessarily senior citizens or 
people with disabilities, the same program. And we should go 
out pretty soon with that.
    Chairwoman Waters. That is very good to know because that 
was the center of the discussion yesterday about the gap, that 
the assessments that had been done for repairs, the amount of 
repairs exceeded sometimes the value of the house, the way the 
houses were valued, etc.
    Mayor Nagin. Yes.
    Chairwoman Waters. So there needs to be some discussion 
about what you are doing and what we are advocating perhaps 
could be done further to assist these homeowners who find 
themselves in a situation where they got much less than they 
expected from the Road Home Program and many of them are left 
with incomplete repairs and still needing to find ways by which 
to complete their homes. So we will talk about that a little 
bit later.
    Mayor Nagin. Yes.
    Chairwoman Waters. About the ``Big Four,'' I recognize, as 
was said yesterday by our representative here from HUD that 
public housing residents deserve good secure living situations 
and housing. We all agree with that. And of course, some of the 
reasons for demolition had to do with updating housing, making 
sure that the living conditions were quality living conditions 
with expanded kitchen and bathroom opportunities--we recognize 
all of that, and I think we all agree to that.
    But what we are still concerned about is the fact that 
public housing residents were evacuated from this City and 
placed in or led to other cities, whether it was Houston or 
Austin, Texas; Atlanta; other places. And many of them who 
wanted to return, of course, could not return by virtue of the 
fact that they had lived in public housing and the public 
housing decisions were not made very early on. They did not 
know what was going to happen to them and they were not told 
that they were going to be demolished.
    Lafitte, for example, I think everybody agreed only had 
damage up to the first floor or first two floors at the most.
    Mayor Nagin. Right.
    Chairwoman Waters. And many of the residents felt that it 
certainly could have been rehabbed and since Lafitte was 
talking about phased redevelopment, they could have brought the 
people back and then in phased redevelopment, the people would 
have been in their homes, the new development could have 
started, then they could have taken over or been moved into new 
developments and we had hoped to have one-for-one replacement, 
and that did not take place.
    Mayor Nagin. Right.
    Chairwoman Waters. So many of them are still wanting to 
come back. Some have gotten settled and they just do not think 
there are going to be any real possibilities because the number 
of units that will be replaced on the footprint will be 
decidedly smaller than what they were prior to their leaving. 
And there is all this talk about scattered housing and other 
opportunities.
    Mr. Mayor, what do you think is going to happen for those 
people who still want to come back and who may have lived in 
one of these developments and have not been contacted, have not 
been told what is going to happen to them? What can they expect 
and what do you think should happen?
    Mayor Nagin. Well, you know, Madam Chairwoman, you know, I 
think about this whole odyssey, I do not know what to describe 
it as, you know, now. Right after Katrina, if you had been 
President of the United States, we probably could have gotten a 
better result and we probably would not have demolished 
Lafitte. But unfortunately, you were not President, and I had a 
President at the time who was pretty determined to do 
demolition. And we were faced with the difficult task of 
allowing those developments to just sit or to try and come up 
with a compromise position that at least moved things forward 
and made sure that every tenant had a tenant protection voucher 
that protected them until the units were redeveloped in New 
Orleans. And that is pretty much what happened.
    Now what will happen to those residents? Our residents are 
very smart. You know, most people when we were dispersed over 
44 different States, our folks started moving closer and closer 
back to New Orleans and they are now concentrated in Texas and 
Baton Rouge and throughout the State. And they are coming back 
to this City. And one of the things that kind of gives me some 
comfort is the number of affordable housing units that are 
being built in the City as we speak. If we continue the current 
trend, there will be a place for those residents to come back 
and monitor up close and personal the development of these 
public housing developments that we refer to as the ``Big 
Four.''
    It is not a perfect solution, but at the time when you had 
the biggest bank in the world, being the U.S. government, 
headed up by the former President, that was the best deal that 
we could get.
    Chairwoman Waters. Thank you very much.
    Ms. Henriquez, I know that this is a new Administration and 
we have great hopes for philosophical changes and actual 
implementation of different kind of policies that would 
certainly better benefit those people who are in need of some 
assistance from their government. And I know that HUD and 
Secretary Donovan stepped into this with all that had happened 
and you have to make some decisions about what you do and how 
you do it. So we recognize all of that.
    But what I am wondering is this, in your role of providing 
public housing to residents who need it, have you taken a look 
at whether or not there is a real database that is being 
maintained of all of those residents who lived in this public 
housing and we know where they are right now?
    Ms. Henriquez. Someone in the audience just answered the 
question.
    Chairwoman Waters. But I want you to answer it.
    Ms. Henriquez. I know. As I--I am new to this process and I 
am learning more and more and I met with a group of resident 
leaders last evening as well as with members of the HANO staff 
yesterday afternoon and I do believe that we do know where a 
number of people are. But I think that there may be indeed 
folks that we do not know and we are waiting to hear from. 
There have been a number of letters sent out, sometimes as many 
as seven letters to household members who we think are 
eligible, for example, for a tenant protection voucher, who we 
have not heard from. We have done phone calls, we have done a 
number of things. And I had asked which staff is doing it along 
with consultants, to identify what we have done to outreach to 
every single household that we have not yet heard from. And 
that information is being compiled family by family. I think we 
are getting there, but there is an opportunity as these 
hearings go on, as other articles become more and more 
prevalent in the newspapers and in the media that if there are 
families anywhere in the Nation who were displaced because of 
Katrina and who want to come back to New Orleans, that they 
should reach out and contact the HANO staff. And we will try 
and figure out if we have lost people or not and how to get 
them reintegrated into the system that is available here.
    Chairwoman Waters. Ms. Henriquez, I have always been 
concerned about the database of residents who were evacuated. I 
have always been concerned that we have systems and operations 
that could keep up with those people and who would communicate 
with them and at some point in time offer them the ability to 
return either on the footprint or in some subsidized housing. 
And we will have to keep talking about that. I believe that 
Secretary Donovan is committed to that.
    But I need to know whether or not you have personnel who 
are dedicated to doing that kind of work and whether or not in 
future hearings that we probably will have in Washington, you 
will be able to describe to us exactly how it is working.
    Ms. Henriquez. I will reiterate the Secretary's commitment, 
the commitment of all of us at HUD, that we should not lose 
families, we should know where they all are, and indeed extend 
the invitation that if they want to come back home, they should 
be able to do that.
    Mr. Woods. Madam Chairwoman, if I may, I may be able to 
answer and illuminate some of the efforts that have been made 
to contact folks and I also have some--
    Chairwoman Waters. Excuse me one second. I am going to get 
to you because I know that is part of what you have been doing. 
But HUD now has some oversight responsibility and management 
responsibility.
    Ms. Henriquez. That is right.
    Chairwoman Waters. And I just want to make sure that 
stepping into this and trying to get a handle on all of this, 
that this is something that is being dealt with. And then I 
will talk a little bit with you about how you are doing this. 
But they need to supervise it, they need to manage it, oversee 
it in some way. Because still, as I understand it, this housing 
authority is under the jurisdiction and supervision of HUD; is 
that right?
    Ms. Henriquez. Yes.
    Chairwoman Waters. Okay, so that is why I am dealing with 
this first.
    Ms. Henriquez. Madam Chairwoman, you are absolutely 
correct, HUD is the administrative receiver and so it is 
incumbent upon HUD for us to provide the leadership and the 
oversight that you have just spoken about.
    I have been handed a note and I need to go and actually 
sort of touch and see it, but as I understand it, 73 percent of 
the pre-Katrina families, who had a relationship with the 
Housing Authority of New Orleans, have been located and 
accounted for. And of those, about 2,800 are here in New 
Orleans. But I will commit to you that we will find out where 
people are and figure out a good successful monitoring system. 
And again, try to identify as many families as possible whom we 
have not yet been able to either identify or we have not yet 
heard from, and be able to tell you in which category they 
fall.
    Chairwoman Waters. In addition to that responsibility, HUD 
has the responsibility for overseeing the redevelopment of 
these ``Big Four'' housing units. By now, I am sure you have 
looked at whatever the contractual arrangements are with the 
developers, you understand the financing problems that are 
being experienced at least by one or some, you know that there 
were timeframes developed and I want you, if you will, to give 
me an assessment of whether or not these developments are 
moving in a way that they will meet the deadline or the 
timeframes that have been developed for them, whether or not 
the financing is real, are there more problems than we know 
about and whether or not we are going to realize the 
fulfillment of the development of the ``Big Four,'' even though 
it is not as extensive as I would have wanted it in terms of my 
one-for-one replacement and what you do on the footprint as 
well as off the footprint.
    Where are we with all of this? Is this real? Is it 
happening? And is it going to get done? What have you 
discovered in the short time that you have been there?
    Ms. Henriquez. From what I have seen thus far, I am 
confident that what is going on at the two developments that 
are under construction will meet the timeframes and the 
deliverables as designed and as planned.
    As I said in my testimony, there is a concern about the 
placed in service dates. We are working through those issues 
with all of the relevant parties and will need to work with 
Congress about some extensions on the placed in service dates, 
because right now, even if you were to close today, the 
construction window on that placed in service by December 2010 
is too narrow to do a competent, quality construction job and 
deliver the product as designed and as promised. So we will 
need to move that and work through those issues on the tax 
credit side.
    As I have looked at the plans, as I understand them at this 
point, they make sense to me, having done similar development 
work in my professional life at the Boston Housing Authority. I 
think the plans are solid, I think the financing is solid. I 
hope that the market rebounds so the equity amounts will be 
higher, so that we can make sure that we can get to a final 
product at least by the time we are saying, if not faster, more 
quickly. And that would be my goal, to make sure that we keep 
this moving and I will be looking to see with staff here and 
with the City and with the developers, looking at reports, 
following up, coming to see more often actually what is going 
on on the ground, and to touch it and to look at it myself.
    Chairwoman Waters. Finally, I believe that all of the 
contractual arrangements include a commitment to what I suppose 
would be guidelines or law in HUD that talk about the 
employment of residents in the developments. Now let us just 
start with demolition. How many residents were employed to do 
demolition?
    Ms. Henriquez. I do not know that and I am being handed a 
piece of paper, because I do not know that.
    Chairwoman Waters. I am sorry, I cannot--you would have 
that information?
    Ms. Henriquez. Yes.
    Chairwoman Waters. Okay, for your oversight, you are not 
focused on that yet, you do not have it.
    Ms. Henriquez. I do not have that information. However, you 
do know that there is Section 3 which requires resident 
employment?
    Chairwoman Waters. Yes.
    Ms. Henriquez. And a number of the Assistant Secretaries, 
starting with and including John Trasvina, the Assistant 
Secretary for Fair Housing and Equal Opportunity, he and I and 
the Assistant Secretary for Community Planning & Development, 
Mercedes Marquez, have formed an internal task force to make 
sure that the focus on Section 3 across all of HUD's programs 
is not just on the books, but that it is real and that there 
are deliverables and that there are goals. And we will make 
sure from top to bottom that we reinforce that with housing 
authorities, with cities, whoever spends and receives Federal 
funds.
    But in the moment here, at HANO, I do not have that 
specific information.
    Chairwoman Waters. I appreciate that, and I know, again, 
that Secretary Donovan is supportive of the residents having 
these opportunities as kind of required by law. And we have one 
member of my committee, Ms. Velazquez from New York, who is 
working on additional legislation to make sure that happens.
    But for now, what I am going to ask Mr. Woods to do is to 
help fill in the gaps about the implementation of the 
contracts. While HUD is committed to making sure for the future 
that this is done, these commitments were part of the 
contracts, as I understand it, and so some work has already 
started, been done. Demolition has taken place. How many 
residents received jobs in the work that has already been 
completed?
    Mr. Woods. Thank you very much. And let me apologize first 
if I breached protocol, but I--
    Chairwoman Waters. Oh, no, no, no, no problem.
    Mr. Woods. I just wanted to make sure that we had the 
correct information that was part of the record.
    Chairwoman Waters. Sure.
    Mr. Woods. Again, HANO is very committed to making sure 
that all of our residents have as many job opportunities as 
they can at the site. As a native of the City, I would prefer 
that there would be 100 percent of those jobs at the site to 
be--
    Chairwoman Waters. I just want to know how many got jobs.
    Mr. Woods. Absolutely.
    With regard to the C.J. Peete development, we had a--there 
is a construction training program at the development. There 
has been a total of 20 graduates of the program who have been 
hired by the developer--a total of 43 residents.
    Chairwoman Waters. Okay, let us hear Mr. Wood, let us hear 
what he has to say. He is going to give us some real numbers. 
How many people got jobs at C.J. Peete?
    Mr. Woods. We had 20 who were part of the--who were hired 
by the developer, they were graduates of the--
    Chairwoman Waters. They are still in the training program?
    Mr. Woods. No, they are graduates of the training program.
    Chairwoman Waters. They graduated and they all got jobs?
    Mr. Woods. That is correct.
    Chairwoman Waters. Twenty three.
    Mr. Woods. Twenty.
    Chairwoman Waters. Twenty, okay.
    Mr. Woods. There has been a total of 43 residents who have 
been hired in connection with redevelopment at that site, at 
C.J. Peete.
    Chairwoman Waters. At C.J. Peete, you had 20 who went 
through the training program, or 23, and 20 got hired and you 
have some more who received jobs also?
    Mr. Woods. That is correct.
    Chairwoman Waters. How many more, 20 more?
    Mr. Woods. It was 20 who graduated from the program and 
were hired by the developer and there are a total of 43 
residents who have been hired, so that would be an additional 
23.
    Chairwoman Waters. And could you give me some examples of 
what kind of jobs they got?
    Mr. Woods. Well, they would have gotten, through the 
construction training program--
    [audience disruption]
    Chairwoman Waters. Excuse me, let us hear what Mr. Woods 
has to say just for a minute. Let us hear what he has to say.
    Mr. Woods. Through the construction training program, 
again, that was developed by the developers, they were trained 
in journeyman type activities. So what would happen is they 
would get, you know, basic jobs, not necessarily licensed 
electricians or plumbing jobs, but they would get basic jobs 
and the hope would be that on the job site, they would get 
additional training and additional experience so that they can 
move on and do additional--
    Chairwoman Waters. So the 23--the first 20 who were in 
training programs, they were assistants to electricians and 
plumbers and those kinds of jobs?
    Mr. Woods. Right, those folks had no experience in 
construction at all.
    Chairwoman Waters. Okay. And the other 20?
    Mr. Woods. The other 23 would have been folks who would 
have already had some construction training, would have put in 
job applications and would have been hired at the site.
    Chairwoman Waters. And at C.J. Peete, are these 43 still 
working now?
    Mr. Woods. I believe so. I do not know for sure, but I do 
believe so.
    Chairwoman Waters. All right, and let us go on to the other 
developments.
    Mr. Woods. And if I can, the jobs were in the areas of 
masonry, painting, and sheetrocking work.
    Chairwoman Waters. Thank you.
    Mr. Woods. With regard to B.W. Cooper, there have been 15 
residents who have been hired by the demolition and 
infrastructure contracts and additional Section 3 residents 
will be hired when construction begins.
    Chairwoman Waters. This is at Cooper?
    Mr. Woods. This is at Cooper; yes, ma'am.
    Chairwoman Waters. How many employees are on the job 
totally with the construction company?
    Mr. Woods. I am sorry?
    Chairwoman Waters. The construction company has employed 
totally, non-residents and residents, how many, so I can find 
out what percentage that 15 represents--
    Mr. Woods. I do not--
    Chairwoman Waters.  --of all the jobs.
    Mr. Woods. I do not have that information, that probably 
can be garnered from the developer at the site, I know that 
they are prepared and have presentations to do so.
    With regard to St. Bernard, I understand that there are 600 
residents who had been identified as potential job hires.
    Chairwoman Waters. What does that mean, identified?
    Mr. Woods. They have been identified, they have gone 
through either the application process or--been part of the 
application process to begin working for the site. Again, the 
developer--
    Chairwoman Waters. Has all of the demolition been done at 
St. Bernard?
    Mr. Woods. Demolition has been completed at St. Bernard and 
we are actually in construction now.
    Chairwoman Waters. So how many residents worked during the 
demolition period?
    Mr. Woods. I do not have that for St. Bernard or for--
again, that would be information that the developers would have 
and I do not have the current Section 3 employment.
    Chairwoman Waters. Okay, I understand. Go right ahead. Of 
course, Lafitte has not been demolished, is that right?
    Mr. Woods. Well, Lafitte has been partially demolished. As 
you recall, there are 94 units that are still standing at the 
site.
    Chairwoman Waters. That is right. And how many residents 
worked on that portion of the work, the demolition, for 
example, of Lafitte?
    Mr. Woods. Again, for Lafitte, I do not have that. Again, 
that can come from the developer himself.
    Chairwoman Waters. Okay. All right, now you wanted very 
much to add to the information from Ms. Henriquez about the 
database and how you maintain that database and how you are 
able to keep up with the residents.
    Mr. Woods. Right. The database is actually maintained by 
HUD and the PIC system and so--
    Chairwoman Waters. Oh, that is maintained by HUD?
    Mr. Woods. It is maintained by HUD. I have the data of the 
actual percentages of folks that we have been able to contact.
    In addition to that, what we have done is every time that 
we have had any type of major initiative, we have advertised, 
not only here in New Orleans and in papers across the State, 
but we also advertised obviously in Houston, Atlanta, Dallas, 
Memphis, Jackson, and other places where we know that our 
residents are living. So for instance, we are now about to open 
up the Section 8 waiting list. We will have advertisements that 
I think began appearing today in the paper, or begin appearing, 
excuse me, August 23rd. So that folks who are interested in 
being part of the Section 8 waiting list, there is a period 
from September 6th to the 12th when they will be able to apply 
to our waiting list. And so we hope that will open up very 
soon.
    And we did the same process for our public housing waiting 
list, which we just completed that process.
    So our goal has been to try to contact as many of the 
residents as we possibly can, wherever they are. We can only go 
by the addresses that we have, and as Secretary Henriquez said, 
there are several times that we have sent out several letters 
and continue to mail out letters to those folks.
    I think that the important part, particularly for those who 
have not maybe come back yet or for those who have not 
transitioned from DHAP to the traditional Section 8 voucher 
program, we are now starting to deal with our hardest to house, 
folks who may miss appointments or folks who may not respond to 
mail, so what we have to do and be focused on, I believe at 
this point, is to do even more intrusive case management for 
those folks that we are dealing with now because we have to 
take an extra step. For instance, one of the things that we are 
doing in the Section 8 program is we have an actual mobile 
outreach unit. So if we are not getting responses from folks, 
if we are mailing out and they are missing appointments or not 
coming in or not submitting information, we are dispatching 
folks to their residences. And we have to do this, particularly 
I think, for our elderly and our disabled population.
    So I think that we are trying to figure out a way to make 
sure that we are actually touching everyone as much as we 
possibly can.
    Chairwoman Waters. Thank you very much.
    And I would like to thank my colleagues for indulging me 
with this length of time that I have taken on this questioning. 
And Mr. Cleaver, I am going to turn it over to you.
    Mr. Cleaver. Thank you, Madam Chairwoman.
    Mr. Mayor, thank you again for being here.
    Yesterday, we learned that the Secretary is at least trying 
to figure out how to make some adjustments in the Neighborhood 
Stabilization Program so that the City residents can benefit, 
because many of the residents here did not suffer from 
foreclosure, which is what the program is aimed at correcting.
    Mayor Nagin. Right.
    Mr. Cleaver. Or ministering to, but because of the flood. 
So I think that is going to happen, that was testimony we 
received yesterday from HUD. And so that would grant you I 
think some additional ability to make an impact in the 
neighborhood.
    Is there anything that we can do legislatively that would 
help you as you continue to try to rebuild the City?
    Mayor Nagin. Congressman, the biggest thing--you know, now 
the State of Louisiana has asked me to join them in lobbying 
Congress and the Administration to have more flexibility with 
the unspent dollars that they still have at the State level.
    All of the recovery dollars flowed from the Federal 
Government to the State and then to the City, and as I stated 
earlier, we got $411 million out of $14 billion. It is my 
understanding that there may be as much as $3 billion that is 
still unspent and they are going to come to the Congress and 
ask for some flexibility and waivers. And on top of that, there 
is another $1.2 billion in hazard mitigation dollars that I 
have not seen a report on how that has been spent.
    Before you grant those waivers, I would ask you to make 
sure that the dollars that Congress originally intended to come 
to New Orleans come to New Orleans expeditiously. And the 
formula that everybody agreed to way back when, when we were 
lobbying for this money, is that New Orleans received 57 
percent of the State's damage, damaged buildings and damaged 
residences during Hurricanes Katrina and Rita, and therefore, 
that should be the percentage that should come to this City. I 
just have not seen that, Congressman.
    So before you issue any waivers, make sure that there is a 
hard core rule that those dollars have to be spent in the most 
devastated areas.
    Mr. Cleaver. Would you give us an estimate of what 
percentage you may have gotten?
    Mayor Nagin. You know, it is hard to really say because a 
lot of the money that came down was spent in State-controlled 
assets that reside in New Orleans and I do not have those 
numbers. So maybe you can get them because I have been asking 
for them for a long time.
    Mr. Cleaver. I will get those numbers.
    As a former mayor, I said then and I will continue to say 
now, one of the biggest mistakes that was made was sending the 
money to the governor. That was a mistake.
    Mayor Nagin. Amen.
    Mr. Cleaver. And I think we need to reverse that.
    Mayor Nagin. I think what most people do not understand is 
that when you send money from the Federal to the State, a city 
can only go as fast as the State's approval process. And last 
year, mid-year, was the first time we got approval on any of 
that disaster CDBG money. And then after you get approval, you 
have to go through the environmental studies, which take 
anywhere from 4 to 6 months. So we can only move as fast as the 
State will allow us to move. And that has just been a real 
challenge with this recovery.
    Mr. Cleaver. Yes, I am troubled by it. I learned yesterday 
that a sizeable portion of the money went to some chicken 
factory here in the State. I am not asking you to respond to 
that, I will try to find out more about it when we get back to 
Washington.
    Mr. Woods, thank you for being here. We approved just under 
a billion dollars in a stimulus package and a large portion of 
those stimulus dollars, a sizeable portion, was allocated for 
PHAs. What is--do you know what amount your PHA has received?
    Mr. Woods. Just a little over $34 million.
    Mr. Cleaver. Now will the $34 million be used to augment 
the work that has gone on, or will the $34 million be used to 
do--we have a little different world here in New Orleans than 
in Kansas City, Missouri, where we are using the PHA allocation 
to do weatherization, we are hiring people from the PHAs, they 
get trained, they are trained in auditing and then 
weatherization. But with money having already been spent and 
being spent to rehab the PHAs as a result of Katrina, does the 
$34 million you received have flexibility so that you can 
perform some additional rehab work on properties, or do you 
have to use it for weatherization?
    Mr. Woods. No, we are actually doing a whole bunch of 
things at different sites. What we did was we had a meeting in 
consultation with our resident advisory board to determine 
where that total $34 million was going to be spent. So we are 
spending a significant portion at the Guste development, we are 
spending a significant portion at our scattered sites, and we 
are spending a significant portion also at the Iberville 
development. So all of the $34 million is being allocated to 
developments that are not part of the ``Big Four,'' but are 
being allocated at the other sites that we either manage or own 
or are managed by someone else.
    Now what we have done, for instance, at Iberville, we spent 
about $3.4 million, allocated $3.4 million at Iberville to do 
some upgrades and cosmetic work to the exterior and interior of 
the units. What we have done at Iberville, in collaboration 
with the Urban League, is we have been able to hire 35 
residents at Iberville to actually perform the work.
    And we are hoping from that program that we have instituted 
there, that those residents would be able to again obtain some 
job skills and take those jobs skills hopefully on the market. 
So that work is continuing right now, going on right now as we 
speak.
    Mr. Cleaver. So, Ms. Henriquez, was a waiver required? 
Because the legislation, as I remember it, does not--has not 
been allocated to do some of the things that Mr. Woods just 
discussed. I am not mad about it, I am just--I just want to 
know was a waiver required?
    Ms. Henriquez. No, the round of the $34 million that he is 
talking about comes out of the first traunch of the $3 billion 
or the $4 billion that was set aside for public housing 
authorities. It was delivered by formula, so housing 
authorities could use it as capital money and, therefore, they 
could use it for gap financing or they could use it as well, as 
described by Mr. Woods, to do repairs consistent with an 
ongoing program that was laid out by a particular housing 
authority, as he has described it here.
    Mr. Cleaver. Did you develop a training component? One of 
the things that we are trying to do, as you know, is--I think 
we are going to have an industrial revolution that many of us 
missed out on or our parents and grandparents missed out on at 
the turn of the 20th Century. This revolution will not be an 
industrial revolution as such, but will be a green revolution. 
And if we do not have green collar job training, I think we are 
going to miss out again. So I am wondering if there is in place 
green collar job training, because if we are going to make 
green the new--the rehabbed units, the ``Big Four,'' or the 
others for that matter, we are going to have to have people who 
do it.
    In many of the cities, we are having green collar job 
training and those who complete it are certified as green 
collar job specialists--I am sorry, as weatherization 
specialists. And then some of them are even opening up their 
own companies to do this kind of work.
    So I am not concerned yet, but I may be concerned after you 
answer.
    Mr. Woods. Well, I will answer in two fashions. First of 
all, with regard to the stimulus dollars, we cannot use those--
that funding is only available for capital outlays. So what 
HANO has done is the actual training that we are providing to 
those residents is coming out of HANO's funds and that 
training, albeit it is not a green training, it is a basic 
training for those residents who did not have or were not 
employed at the time that we started this program. And again, 
that is why we brought on the Urban League to assist us with 
that training.
    Now overall, there is a weatherization issue all across the 
State and the Louisiana Housing Finance Agency is actually the 
entity that is administering the weatherization dollars for the 
State that the State has received. I could speak about that as 
the chairman of the board of the LHFA, but that is a whole 
separate entity.
    But what we have tried to do, and even in our development 
plan, is to be green in everything that we are doing right now, 
particularly what we are doing at Guste and other developments, 
is to make sure that we are doing green building, because we do 
have to figure out a way to bring electricity bills down, we do 
have to figure out a way particularly even for our scattered 
sites to bring down the cost of electricity bills and utility 
bills. So that is part of what we have done in our needs 
assessment, part of what we are focused on.
    Mr. Cleaver. Let me just say--and I am glad that you are 
doing that--let me suggest that you work with HUD to develop an 
application to the Labor Department and we have a Secretary 
there who I think is very sensitive to this issue. In fact, she 
received the Kennedy Award for the work she did in energy 
conservation in California. And the reason I am saying this is 
we need to have certified auditors, energy auditors, and 
certified weatherization specialists because if we do not, we 
are not going to be able to produce the kind of workforce and 
deliver the jobs that the President stipulated when he put 
forth the stimulus package.
    And I am not talking about HUD dollars, I am now talking 
about energy, which was $60 billion in the stimulus package, 
$60 billion. And many of the cities have opened up through 
metropolitan community college systems job training and 
creating the opportunity for the jobs because of all of the 
green work that is taken place with the stimulus package.
    Ms. Henriquez. Mr. Cleaver, you are absolutely correct. And 
that was also an agreement between the two Secretaries of HUD 
and the Department of Energy, to begin to get housing 
authorities access to weatherization dollars, to figure out 
other kinds of partnerships to really work across and out of 
our silos across the Federal Government. And this is a prime 
example of that.
    Mr. Cleaver. So you do not need any help from us, you are 
already moving in that direction?
    Ms. Henriquez. We are already talking and moving in that 
direction.
    Mr. Cleaver. So when we come back, you are going to have 
green collar job training coming.
    I will yield back the balance of my time, Madam Chairwoman.
    Chairwoman Waters. Thank you very much.
    Mr. Cao.
    Mr. Cao. Thank you, Madam Chairwoman.
    Mr. Mayor, I have one question concerning the loan gap that 
was implemented by the City. This is the first time that I 
heard of it and I just wonder whether or not you adequately 
conveyed this program to the public so that every elderly, 
every person who is disabled in the City has access to this 
program.
    Mayor Nagin. Well, it was a new program, Congressman, and 
we did some advertising and the response was so overwhelming 
that we had to go back and find some more dollars to put into 
the program. Simultaneously, we are talking to the State about 
some of their excess funds, to really do it in a much bigger 
way. But this is a very new program that we are just rolling 
out.
    Mr. Cao. Okay. And my next question is, first of all to 
you, Mr. Mayor, and then secondly, to Secretary Henriquez. One 
of the decisions, at least based on my understanding of the 
decision that was made by the City, in connection with mixed-
income housing was to improve the quality of life for the 
residents. Has there been a study that has been done, maybe 
even a survey, to keep track of whether or not residents feel 
better or feel happier with respect to the mixed-income units, 
whether or not the number of crime incidents--has that been 
kept in these mixed-income housing units versus what it was 
before?
    Mayor Nagin. I do not have that study. I know there have 
been many studies, attitudinal studies, on our residents but I 
am not sure there has been one focused primarily on public 
housing residents.
    Mr. Cao. Madam Secretary, is there, at the national level, 
a study that has been done to compare the traditional housing 
project versus the mixed-income projects that is being done in 
the City of New Orleans?
    Ms. Henriquez. There have been some studies that have 
generally focused in large part on the effect on the economy, 
and then secondly on growing the economic development and self-
sufficiency of residents. I do not have them specifically but I 
certainly will look at the body of work and I can get that 
information to you.
    Mr. Cao. Thank you.
    And my question to Mr. Woods, you stated that at the 
Lafitte housing project there are 94 units that have not been 
demolished, is that correct?
    Mr. Woods. That is correct.
    Mr. Cao. And are they ready--can people live in those units 
or what has to be done?
    Mr. Woods. Well, actually at this point, they are slated 
for demolition. We have a notice to proceed that has been 
issued to the demolition contractor. But we have done 
previously, a couple of years ago, studies to determine the 
feasibleness of reopening those units.
    Now as you may know, those units were built back in the 
1940's, they are brick masonry buildings. The plumbing in the 
buildings currently have a diverter system. To explain a 
diverter system, if you were married and your wife was taking a 
bath, you could not brush your teeth at the same time because 
the water could not move from the tub to the sink.
    Likewise the energy systems at those buildings were built 
to accommodate 1940's energy needs. So to include an air 
conditioner and a cell phone plug-in and a computer and other 
electronic items that we currently have today would overload 
the system.
    Now we estimate at this point that if we were able to maybe 
gut and rehab the units, it would cost somewhere in the 
neighborhood of about $400,000 to do so, per unit. However, it 
is much cheaper to demolish the units and rebuild the units. I 
think that they are absolutely beautiful buildings, I have a 
lot of memories at that site during Mardi Gras. However, based 
on the cost analysis that we have been able to get to date, and 
again, that study was maybe about 2 or 3 years ago, it would 
cost again, $400,000 per unit to just rehab to bring them up to 
standards.
    And then the other piece is that those buildings, if you 
look at them, the stairwells are small, the bedroom sizes are 
small, they do not accommodate the type of furnishings that are 
currently being sold and that our residents are buying. And so 
in order to be able to have what I consider to be a liveable 
space, it would require us to rehab those units to an extent 
that we would have to expand the size of the units.
    You know, so those are the challenges that are facing us 
and at this point it is just not economically feasible to rehab 
those units to make them liveable.
    Mr. Cao. And in addition to your position at HANO, you also 
sit on the board of the Louisiana Housing Finance Authority, is 
that correct?
    Mr. Woods. That is correct.
    Mr. Cao. What are some of the finance-related obstacles in 
these projects being completed?
    Mr. Woods. Well, as has been previously stated, again the 
placed in service date is a big obstacle. If the placed in 
service date is not extended, we are going to have potential 
issues with some investors. Right now, the placed in service 
date is December 31, 2010. What we are concerned about is 
whether or not we will be able to complete construction by that 
time.
    The other thing that we are concerned about is also on the 
exchange program under TCAP. Congress or the Treasury has 
opined that GO Zone credits are not eligible for the exchange 
program. Right now, credits are trading somewhere in the 
neighborhood of 59 cents to 63 cents on the dollar. Under the 
exchange program, those credits could be exchanged for about 80 
cents on the dollar and it would allow additional funding in 
order to complete development.
    So I think those are the two largest obstacles that are 
facing us right now for the completion. And that is not just 
necessarily for the ``Big Four,'' but that is for a lot of the 
affordable housing units across the State.
    Mr. Cao. Mr. Mayor, you also stated that there--or at least 
every time when I talk to the State, the State blames it on the 
City; every time I talk to the City, the City blames it on the 
State.
    Is there a system of dialogue where you all can communicate 
to see who is doing what and when so that there is no finger 
pointing?
    Mayor Nagin. We talk all the time and we make progress at 
times and at times we do not make as much progress. This is an 
enormous undertaking. The City by itself is managing over 300 
individual recovery projects. That is before we start talking 
about the community disaster money that is coming down. We talk 
to them, but the rules at it relates to community disaster 
dollars, there is just so many things you have to go through. 
And everybody wants to move the money out fast, but the reality 
is that it does not move fast in its current form. So there is 
lots of frustration on both sides.
    Mr. Cao. And I recently--if you would allow me just one 
more question, Madam Chairwoman--I recently spoke with the 
State in connection with its Small Rental Program. I know there 
were issues with respect to that particular program, to allow 
small and local contractors to be more involved. And we 
proposed and we basically asked them to revise that particular 
program to allow more small contractors, more local contractors 
in this program. Based on your understanding of the program, 
has the request been implemented?
    Mayor Nagin. I could not speak on that particular program. 
All I know is they allocated about $700 million to the program 
and I think $690 million is unspent. So I do not know where 
that program is going or what is the direction.
    My frustration, Congressman, is that the City of New 
Orleans can only move as fast as the State moves because of the 
way the Federal laws are set up. And I am really concerned 
about the $3 billion that is sitting up there. I do not know 
how they are going to spend that any time soon and at some 
point in time, you as a Congressperson, and the Administration 
facing a huge deficit, is probably going to ask for that money 
back. And that would be an absolute tragedy--absolute tragedy.
    So if I could ask anything of this panel is to try and 
figure out a way to help us to reduce some of the rules 
associated with spending this money so that it can get to the 
street and do some good for more people.
    Mr. Cao. Thank you, Madam Chairwoman. I yield back the 
balance of my time.
    Chairwoman Waters. Thank you very much. I would like to 
thank this panel for your participation. Let me just wrap up by 
saying that you have probably seen--or you have already 
testified to in some shape, form or fashion about the numbers 
and the way the units will be replaced and who they will be 
available for. This is an outline, a demonstration of that, 
that was published in the Times Picayune, who clearly--and this 
clearly identifies that, for example, at B.W. Cooper that had 
1,546 units, even though 441 of them were unoccupied, basically 
what happened over the years, it appears that when units became 
vacant or they were not repaired or what-have-you, you just 
took them off the market. And so 441 at B.W. Cooper were 
unoccupied.
    But look at this, in the planned units, only 143 are set 
aside for public housing residents. At C.J. Peete, it is very 
interesting in that of the 867 units over the years somebody 
allowed 723 of those to go unoccupied, for whatever reason, at 
C.J. Peete. And it looks as if only 193 units will be available 
for public housing, people who meet that criteria, for public 
housing, for a total replacement out of the 867 units, 460 
units altogether, but again, only 193 for public housing.
    At Lafitte, they appear to do better with only 31 
unoccupied, a total of 896, and they plan on putting back in 
812 but only 176 of those will be for people who meet the 
qualifications for public housing. But look at this number, 392 
of those will be for the tax credit units, which means that 
most people who lived in public housing will not be eligible 
for those. You understand? They have to be subsidized further I 
suppose with the Choice vouchers or Section 8. And then you 
have 244 of those that are going to be sold under the 
homeownership portion of that.
    And at St. Bernard, of 1,436 units, 473 were going 
unoccupied. You are only going to restore 466 in total with 157 
of those only being for those who are eligible under the 
criteria for public housing with 160 of those for the tax 
credit units that will require a subsidy for those who do not 
make the required amount of income. And of course another 149 
of those at market rate.
    So I understand thoroughly, and Mr. Cleaver, who was a 
mayor of a city understands, that you have the responsibility 
for land use planning, the City does, I understand that.
    Chairwoman Waters. I understand that, but you know, as 
Members of Congress trying to carry out the intent of the 
public policy that has been developed about how we are going to 
deal with those people who cannot afford, who do not have the 
salary, who do not have the money to pay for market rate 
rental, we have the responsibility to make sure that the public 
policy is implemented to provide these units. I am worried 
about where these scattered units are and we will talk with you 
more about that and we will talk with the developers and all 
that. But this looks like what the City has been accused of.
    And let me just say this, because I do not know, but the 
City has been accused--and perhaps because the former Secretary 
Mr. Jackson said it, he said--you know what he said, he said 
something like this: That they were not interested in 
maintaining the public housing units for poor people as we knew 
them, in essence that the City was going to be less poor and 
less black. Is that what he said?
    So even though the goals of perhaps thinning out the public 
housing units so that they are more liveable perhaps, all of 
those goals may be commendable. But you cannot help but wonder 
whether or not these policies are going to do precisely what 
Mr. Jackson intended them to do.
    Yes, ma'am?
    Ms. Henriquez. If I might.
    Chairwoman Waters. Yes.
    Ms. Henriquez. I am not going to offer an opinion on a 
former Administration. I can only tell you about this 
Administration, of which I am a part.
    Chairwoman Waters. I am sorry, you are not going to offer 
an opinion about what?
    Ms. Henriquez. On the former Administration.
    Chairwoman Waters. No, please do not, you do not have to do 
that.
    [laughter]
    Ms. Henriquez. I can offer an opinion and tell you about 
this Administration, of which I am a part.
    Chairwoman Waters. Sure.
    Ms. Henriquez. This Secretary and this Administration are 
committed to increasing and improving the numbers on affordable 
rental housing. Homeownership is important, but not everyone 
wants to be or can be or should be a homeowner. And so it is 
our--we see it as our responsibility to create as many 
affordable housing rental opportunities as possible in the 
marketplace--not just here in New Orleans, but across this 
Nation.
    To that end, I have not seen the numbers from which you 
were quoting; however, I will say that there are a variety of 
affordable housing types based on how they are funded in a 
redevelopment opportunity, such as with the ``Big Four.'' And 
there are ACC or public housing units that come back with 
public housing subsidies where the rent for the occupant family 
is based on a percentage of their income. There are also tax 
credit units which are affordable which may or may not meet the 
income levels of affordability for some public housing 
residents--
    Chairwoman Waters. They will not, based on the formula that 
I have seen.
    Ms. Henriquez.  --however, Section 8 vouchers can be--which 
the family will have, could then create affordable living 
spaces in those redeveloped units in the tax credit. So that 
when we look at the totality of where public housing level rent 
at 30 percent of your income, with or without a Section 8 
voucher attached to you or to the unit, about a third of all 
those units of the more than 7,600 we talked about, when all is 
said and done, will come back as deeply affordable units at the 
``Big Four'' and across this City. That is just what is going 
on with what is being developed through HUD's formula, not what 
else might be developed by other developers who have access to 
affordable tax credits and so on.
    Chairwoman Waters. I appreciate that very much. And as I 
said, I am going to certainly dismiss this panel, but let me 
tell you what it means when you have less units in public 
housing, which may or may not be good, and when folks who are 
part of a community are given vouchers to go distances from 
where they have community connections and support. They 
oftentimes find themselves in communities where they are not 
wanted, they oftentimes find themselves in a community where 
they have no transportation even if they are trying to get 
trained and look for jobs. They oftentimes find themselves 
alienated, isolated, and what you intend to do in maybe putting 
them in maybe nicer four walls is creating all kinds of other 
pressures and stresses.
    So, you know, we have to keep that in mind and we are going 
to have to follow this very closely. Again, this is already 
done and we are not blaming this Administration certainly, but 
we are concerned. And we have to follow this to make sure.
    And lastly, Mr. Mayor, the homeless problem, as it is in 
Los Angeles, is a problem here. And the Section 8 vouchers that 
are going to become available, are they available to the 
homeless also?
    Mr. Woods. They would be available, anyone can apply and so 
they would be available--
    Chairwoman Waters. But they would not necessarily get the 
newspaper that you are talking about advertising in.
    Mr. Woods. Right.
    Chairwoman Waters. Does a mobile van go to under the 
bridges where the homeless are?
    Mr. Woods. We have not started that outreach.
    Chairwoman Waters. But it could happen, they could do that.
    Thank you all so very much. You have been so patient and I 
appreciate your cooperation, and again we will continue to work 
with you.
    Let us take the next panel so we can--what we really need 
to do is we need to learn as much as we can about what they are 
doing or what they have not done so that we can correct it. So 
bear with me, bear with me for awhile.
    Thank you all very much.
    Ladies and gentlemen, we are going to move right into the 
second panel, so I am going to invite those panelists to come 
to the seats that are provided. For panel number two, we have: 
Ms. Anita Sinha, senior attorney, The Advancement Project; Mr. 
James Perry, executive director, Greater New Orleans Fair 
Housing Action Center; Ms. Laura Tuggle, Southeast Louisiana 
Legal Services; Ms. Cynthia Wiggins, HANO Resident Advisory 
Board; and Ms. Angela Patterson, director, UNITY Welcome Home.
    For those who are exiting the room, please do it quietly. 
Others, please take your seats, the panel is in place. And let 
me apologize, I spent a little bit more time than was allocated 
because it was important for us to query those who have 
responsibility for this redevelopment, to try and understand 
exactly what has been done and what they are doing and what 
kind of oversight they have.
    So I am going to ask each of you, most of whom I have met, 
I have worked with and it is so good to see you all again. Ms. 
Wiggins, I came looking for you yesterday over at the park. I 
do not know what happened, I may have missed a meeting but I 
thank you all for being here and we are going to get started 
right away. We are going to hold you each to your 5 minutes.
    So let us begin with Ms. Anita Sinha, the senior attorney 
for The Advancement Project.

  STATEMENT OF ANITA SINHA, SENIOR ATTORNEY, THE ADVANCEMENT 
                            PROJECT

    Ms. Sinha. Good afternoon.
    Chairwoman Waters. Good afternoon.
    Ms. Sinha. My name is Anita Sinha, and I am a senior 
attorney at The Advancement Project. I direct a--
    Chairwoman Waters. Speak right up as much as you can so 
they can hear you in the back.
    Ms. Sinha. I direct our post-Katrina project which since 
August 29, 2005, has helped residents fight for just 
reconstruction in New Orleans.
    I am also counsel on Anderson v. Jackson, a class action 
lawsuit that continues to pursue justice for displaced public 
housing residents of the ``Big Four.''
    The 4-year anniversary of Hurricane Katrina is imminent. 
The economic crisis plaguing our country has reared its head in 
New Orleans where the rates of foreclosures, empty and blighted 
properties, and homelessness are staggering.
    I am both honored and dismayed to be testifying today. 
Honored because this hearing is a very strong statement that 
you, Ms. Waters, and the subcommittee know that the people who 
continue to suffer greatly since Katrina are not forgotten. I 
am dismayed though because over 4,500 public housing units have 
been destroyed and big questions about redevelopment and re-
occupancy loom large.
    There are presently less than 2,500 public housing units in 
New Orleans, and even these units are at risk. We are deeply 
concerned about reported plans to demolish the Iberville 
development. Essential repairs and maintenance in Iberville 
have gone unattended and we fear that this is yet another 
example of disinvestment as a way to justify demolition. There 
is no justification for demolishing Iberville, especially 
before public housing units have been built on the ``Big 
Four.''
    We are also concerned about the 94 units at Lafitte that 
HUD and HANO have spent million of dollars, about $29,000 per 
unit to repair. I think the previous panel testified on these 
94 units and Mr. Woods was talking about the cost to rehab or 
something. But these units have been rehabbed, they have spent 
millions of dollars on them and they sit vacant, and as Mr. 
Woods testified, are slated for demolition. These units should 
not be demolished. In fact, there should be a moratorium on any 
further demolition of public housing in New Orleans.
    As for the ``Big Four,'' we are concerned that families 
most in need of housing will be left out or left for last. The 
initial disposition plan for the ``Big Four'' was to rebuild 
only a fraction, as you mentioned, Ms. Waters, about 15 
percent, of the original public housing units. That was bad 
enough, but now we are concerned that the current state of the 
market will mean even less housing will be rebuilt. 
Particularly of concern is what construction is financed past 
phase I of the building on each site. For example, we really 
would like to know whether Lafitte developers still can do one-
for-one replacement.
    The other issue concerning reconstruction is whether 
building a partial number of public housing units to market 
based units is part of the initial phase of constructing the 
``Big Four'' sites. We know that phase I is being completed or 
has been completed, but we still do not know how many are 
apportioned to public housing as opposed to how many public 
housing is being left for later phases of redevelopment. We do 
not think the public housing families should be the last to get 
home and we would like to see their homes be built sooner than 
they already are.
    We are also concerned about re-occupancy rules. We believe 
that residents of at least one of the sites, the site of St. 
Bernard, are being subjected to illegal work requirements. HUD 
regulations do allow for work preferences, which is giving 
admission preferences to households where one family member is 
working. But the law does not permit work requirements. It is 
our understanding that the residents of St. Bernard have been 
told by Columbia Residential that all adult household members 
must have full time employment. And that is not what the law 
says. Columbia also claims to its residents that HUD has 
granted waivers to the developers so they can set such rules. 
We have not been able to verify whether this is true.
    The other issue is credit and extensive background checks. 
These checks have been reported as ways to keep families out of 
public housing. Now is the time to move obstacles out of the 
way, not impose new hurdles in the path of displaced residents.
    The last issue I would like to raise here is whether 
employment opportunities from the redevelopment of the ``Big 
Four'' are going to public housing residents as you know is 
required by Section 3 of the 1968 HUD Act.
    Each of the ``Big Four'' sites are subject to Section 3. 
Part of HANO, HUD, and the developers' duties under Section 3 
is to track the jobs given to residents. As Mr. Woods and Ms. 
Henriquez testimony just showed, this tracking is not 
happening. But the law says they must be tracking Section 3 
jobs. Anecdotally, we know that jobs are not going to 
residents. So we respectfully urge the subcommittee to closely 
monitor Section 3 compliance, including receiving regular 
updates from the new internal task force that Ms. Henriquez 
just testified about.
    I respectfully direct the subcommittee to my written 
statement for further details on what was read in my testimony.
    Thank you.
    [The prepared statement of Ms. Sinha can be found on page 
105 of the appendix.]
    Chairwoman Waters. Thank you very much.
    Mr. Perry, it is good to see you again.

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

    Mr. Perry. Same here, thank you.
    Thank you, Congresswoman; thank you, Congressman Cleaver, 
for the opportunity to testify. Of course, I run the Fair 
Housing Action Center here in New Orleans, and before I get 
into my substantive testimony, I wanted to offer two things.
    One is a thank you for the hearing yesterday about Road 
Home issues. My organization is the plaintiff in the lawsuit 
against the Road Home organization in taking on this basic 
issue of making payouts based on the value of homes rather than 
the cost to repair homes. So it was very important to us that 
you addressed that issue yesterday.
    Second is that in the last panel, one of the questions that 
you raised was about the data tracking residents who formerly 
resided in public housing. In one of our lawsuits against the 
housing authority in 2007, they were required to turn over 
information about where residents were. And when we got the 
list that they provided to us, many times they sent surveys and 
information to addresses that were pre-Katrina addresses. In 
fact, some of the addresses on the list were the addresses of 
the public housing developments that were, of course, vacant. 
So I can tell you that accounted for about 30 percent of the 
mailouts, the survey that they provided to us in the course of 
that litigation.
    I am hopeful that the new Administration is working hard to 
make sure that those lists are clean and accurate, but at least 
during our experience in 2007 under the prior Administration, 
those lists were far from accurate and far from reliable.
    The thing that I want to focus on in my testimony is what 
happens in the aftermath of demolition of public housing. You 
know there is so much work and so much discussion around mixed-
income housing about whether or not it works, but with a 
typical mixed-income development, what happens of course is 
that the majority of the units and so the majority of residents 
cannot return. In New Orleans, an example of that was the 
former St. Thomas development where there had been 1,500 
families. Only 246 units are reserved for low-income residents 
at the new development, so there is a question about what 
happens to the remaining more than 1,200 families, where did 
they go? For the most part, they get Section 8 vouchers, 
Housing Choice vouchers.
    And so the fundamental issue, I think, during the time when 
we are rebuilding housing and making sure there are enough 
units--and there is a question about whether or not that is 
being done effectively--is are people able to use the units--I 
am sorry, the vouchers.
    Well, just yesterday, my organization released a study 
where we sent testers to apartment complexes and to small 
landlords all across the City and inquired whether or not they 
would allow a renter to use a voucher. What we found was 82 
percent of the time, landlords refused to accept Section 8 and 
Housing Choice vouchers. So the thing that is supposed to 
bridge the gap right now for people who do not have public 
housing to rely on is the Housing Choice voucher. But what 
happens if landlords will not take the voucher?
    Now this is a huge and very difficult issue. And it also 
becomes racialized because 99 percent of people in the City of 
New Orleans who rely on Section 8 and Housing Choice vouchers 
are African American. So when landlords refuse to take vouchers 
82 percent of the time, it has a disparate discriminatory 
effect on African-American voucher holders.
    In addition, we interviewed landlords and asked them well, 
why did you not take the voucher, what was your reasoning for 
denying folks based on the voucher? Sometimes we got very clear 
racial comments. For instance, people said, we do not want 
these people with dreadlocks living in our complex. I will read 
you one quote that is extremely disturbing, from a landlord. He 
said, ``I won't take vouchers until black ministers start 
teaching morals and ethics to their own so that they stop 
having litters of pups like animals and they are not milking 
the system.'' And he refused to take the voucher based on that.
    Now of course, generally people who live in public housing 
and have vouchers have to have jobs. For the most part, people 
work, right? Unless you are elderly or disabled, people work. 
So these are generally unfair stereotypes and untrue 
stereotypes about folks.
    The second thing that landlords said consistently was that 
they were frustrated with their own dealings with the Housing 
Authority of New Orleans. Consistently they would make 
agreements to take voucher holders in the past and what would 
happen is that they would go 2, 3, sometimes 4 or 5 months and 
never receive a payment. We talked to one landlord who said 
that right now he is owed more than $5,000 by the Housing 
Authority of New Orleans because they have not paid on valid 
contracts. There is another large scale landlord who is owed 
$25,000 by the Housing Authority of New Orleans. They also 
talked about basic issues of folks just not answering the phone 
and being discourteous.
    And all of these things work to make it such that people do 
not want to work with the Housing Authority and do not want to 
rely on the voucher program.
    So we are unclear about what is going to happen with hard 
unit public housing. But in the meantime, we are relying on 
vouchers and if vouchers cannot be used 82 percent of the time, 
then New Orleans renters in New Orleans are going to be in a 
very difficult position.
    So I encourage and implore you and the subcommittee to look 
at this issue and to consider it very heavily as you promulgate 
legislation on these issues.
    Thank you.
    Chairwoman Waters. Thank you very much.
    Ms. Tuggle.

 STATEMENT OF LAURA TUGGLE, SOUTHEAST LOUISIANA LEGAL SERVICES

    Ms. Tuggle. Good afternoon. Thank you, Chairwoman Waters 
and Mr. Cleaver, for allowing me to come here today to testify 
about remaining affordable housing needs almost 4 years after 
Katrina. I especially also want to thank you for your 
leadership in bringing recovery funds to our area.
    I work at the Legal Aid office, which is called Southeast 
Louisiana Legal Services. Most of our service area was severely 
devastated by Katrina and the elderly, disabled, and low-income 
families that we serve on a daily basis are still struggling to 
try to obtain decent housing that they can afford. I know this 
committee's interest and continued support will make a 
difference in that daily struggle.
    While tremendous resources have come our way, we still have 
such a long way to go. We all understand that the tax credit 
deals are in crisis, but even the tax credit deals that were 
planned were only going to repair a fraction of what we lost, 
only about 40 percent of our pre-Katrina affordable housing 
stock.
    There is also the looming end of the Disaster Housing 
Assistance Program, or DHAP, at the end of this month for most 
families. And the lack of affordable rental units, including 
public housing that is actually ready now is extremely 
troubling. Post-Katrina, we all know homelessness has doubled. 
We are also faced with other non-``Big Four'' sites, such as 
Iberville and the Florida site that may be on the chopping 
block.
    Frankly, for many folks, the road home is still under 
construction, full of potholes, and the bridge is out. For 
many, it has been a road to nowhere.
    We are bracing ourselves here for the end of DHAP. 
Thankfully, we have been allocated voucher funding to provide 
permanent housing assistance to about half of the families 
locally. But the conversion process has gone extremely slow and 
additional extensions have been necessary, at least two so far. 
Of about the 9,000 DHAP families in New Orleans, only about 
half have been eligible for a voucher. That leaves us about 
3,900 families who may have remaining unmet housing needs. Of 
course, 850 of them are elderly and disabled families who have 
been either denied vouchers or whose file is still in limbo. 
While HANO and HUD have worked very hard to reach these 
families, additional efforts are needed. We cannot afford folks 
falling through the cracks and we can certainly not afford any 
increase in homelessness.
    Despite voucher funding for DHAP and extensions, 
significant housing needs still exist, particularly for low-
income families with incomes between 50 to 80 percent of area 
median income. Unlike other HUD programs, the income limit for 
vouchers is only 50 percent of AMI. Because of the high rents 
that pervade our City, many of our workforce families on DHAP 
will still face significant affordability gaps when the program 
ends in just a few days.
    The situation is even bleaker for homeowners who are on 
DHAP with incomes at these levels. Take Clarence, who is an 
outreach worker at UNITY, getting people off the street every 
day. He is worried that in a few days, he is going to have to 
join them. He cannot get a voucher due to his income, his rent 
is $995 a month, the mortgage on his Katrina-damaged home is 
$935, and his income is only $1,800 a month.
    There is a possible safety net for families like Clarence. 
The LRA has allocated $5 million in CDBG funds for up to 12 
months of temporary rent assistance. Unfortunately, the service 
delivery system to administer this program is simply not ready. 
If DHAP were extended for 2 more months for everyone, there 
would be time for this program to kick in. Additionally, our 
City is poised to get $7.5 million in homeless prevention funds 
under the stimulus, which should be hitting the street sometime 
in October. Our recommendations regarding DHAP are:
    To extend it for everyone to allow a smoother landing as 
new resources become available;
    To review all prior denials and withdrawn status of elderly 
and disabled families on DHAP for possible voucher eligibility; 
and
    To prioritize vouchers to families who moved out of FEMA 
trailers when they were being pressured earlier this year.
    Another huge problem is the current status of the HUD 
multi-family stock, which we never hear talked about. This 
stock of privately owned properties had a direct HUD subsidy 
and provided thousands of deeply affordable units. Also, these 
units had families in them with similar incomes as those in 
public housing.
    As of September of last year, HUD reported 3,314 units of 
this multi-family stock was closed. Of that amount, 96 percent 
had Section 8 project based contracts. Those contracts had been 
suspended since Katrina. Many of the deals on the multi-family 
side that were hoping to reopen are plagued with the same 
financing gaps as public housing. Our community could wind up 
permanently losing not only thousands of public housing units 
but thousands of HUD assisted multi-family units. In addition 
to the 3,300 units above, there are another 1,500 units that 
have been lost from prepayments.
    We would like to recommend in regard to multi-family stock 
that:
    Any suspended project based Section 8 contracts be 
transferred to other deeply affordable properties if that site 
cannot reopen; and
    Tenant protection vouchers for all prepaid multi-family 
sites be issued.
    We need to get a report made to this committee from HUD on 
the status of all multi-family housing and a report on the 
issuance of tenant protection vouchers to 1,500 families.
    Thank you.
    [The prepared statement of Ms. Tuggle can be found on page 
122 of the appendix.]
    Chairwoman Waters. Thank you very much.
    Ms. Wiggins, thank you. Again, I was at the park yesterday 
looking for you, but I want to thank you for all your work, all 
that leadership that you have provided to public housing 
residents, and I look forward to talking with you.

   STATEMENT OF CYNTHIA WIGGINS, HANO RESIDENT ADVISORY BOARD

    Ms. Wiggins. Good morning, Congressman Cleaver and 
Congresswoman Waters. On behalf of the Citywide Tenant 
Association, we want to thank you for this opportunity to 
present before you today. We also especially want to thank 
Congresswoman Waters for her commitment and her dedication to 
ensuring that the rights of low-income families and public 
housing families were not being violated after Hurricane 
Katrina.
    In my written testimony, we presented information on all of 
the public housing sites and not just the ``Big Four.'' Since 
Secretary Donovan's swearing-in, we have been afforded the 
opportunity to sit at the table and have conversations with the 
housing authority with respect to the redevelopment that is 
taking place at each of the public housing sites. So the 
information that we provided in the written testimony is 
information that we actually know is going on.
    However, we do have some concerns with respect to the 
Lafitte redevelopment and the lack of funding that has been 
awarded to the B.W. Cooper housing development. It is our 
opinion that HUD needs to allocate additional money for the 
redevelopment at B.W. Cooper and I am certain Donna Johnigan 
will speak to that following me.
    In my written testimony, we talked about the Section 8 
program, and while the Section 8 program has truly assisted 
families here in New Orleans, we do believe that the 
discrimination that Mr. Perry is talking about is real and it 
is prevalent. Residents who are moving from subsidized housing 
such as public housing are feeling threatened with homelessness 
because of the utility costs, because of the enormous amount of 
security deposit that is being asked for. They are feeling 
threatened because landlords, those who choose to manipulate 
the program, have placed them in leases that they cannot get 
out of, some of them to the extent that they have threatened 
the residents to get out because they were complaining about 
the conditions that they were living in. We have some concerns 
about the water bills that residents have been forced to carry 
and take on water bills that were not their water bills. We 
have residents who have been asked to pay utilities that were 
not their utilities, where construction work was taking place 
at their unit prior to moving in, and that utility cost was 
passed on to them when they went to have the lights turned on.
    While the Section 8 program is certainly a good program, we 
are of the opinion that it is not for low-income families. It 
is really for the working poor. And our elderly residents are 
suffering, some of them are living in houses without utilities, 
being very quiet about it because their living arrangement is 
in jeopardy. When the lights are turned off, the housing 
authority or the landlord is required to report it and then 
cancel the Section 8 voucher. That is a great concern for us 
and we have seen an enormous increase in our elderly residents 
having no utilities and struggling with paying high light bills 
and water bills.
    Also, we want to make a recommendation to this committee 
with respect to these lease agreements that our residents are 
being forced to enter into. It is our opinion that the housing 
authority should develop a lease, a lease that protects the 
resident as well as the landlord, where there is a standard 
lease that they can enter into and we do not have all of these 
different lease arrangements.
    We are also asking that HUD would mandate that there is a 
limit on security deposits and base that security deposit on 
the unit size. We have a lot of our residents who cannot come 
up with $1,800. We have residents who have been evicted or have 
been asked to leave by a landlord and the landlord would 
literally fight them to the bitter end to keep from giving them 
their security deposits even though they are turning the unit 
back over.
    We believe that there has to be some kind of control in 
place where residents can go and file grievances not just with 
Mr. Perry's office but for the housing authority about the 
violations that are occurring with these landlords. Some of 
these houses are substandard, some of the conditions are awful, 
and we have residents in here today who will testify that some 
of these houses are in deplorable condition and it is worse 
than the units that we were living in when we were in public 
housing.
    We also want to say that the traditional public housing, 
there are some old and outdated standards there that must be 
changed. They must be changed because they do not conform to 
today's standards. This housing authority does not conduct 
market studies with utilities. The utility allowance is not 
enough and it is not enough because the utility cost is going 
up every year and there is never a market study done to make 
the necessary adjustments. So persons who have to pay 
utilities, their rent can be offset through those utility 
adjustments.
    We also have some concerns about some of the issues within 
the housing authority admission and continued occupancy policy, 
but the only way that we can address those issues is if the 
regulations are changed.
    Under the tax credit program, we believe that Congress 
should mandate that HUD and the PHAs and the developers all 
enter into an agreement that the tax credit ACC units and the 
project based units incorporate the same standards for 
occupancy. We have a difference in the occupancy standards and 
we believe that you guys need to ensure that you do not have a 
separation of what each developer is actually doing.
    Again, we want to thank you.
    Chairwoman Waters. Thank you very much. Thank you for being 
here.
    Ms. Wiggins. May I say one last thing?
    Chairwoman Waters. Yes.
    Ms. Wiggins. At the request of Elisha, we also believe that 
HUD should be removed from the agency and that we bring in an 
executive monitor to oversee the housing authority.
    [The prepared statement of Ms. Wiggins can be found on page 
154 of the appendix.]
    Chairwoman Waters. Thank you very much.
    Ms. Patterson, I know of your work. Please tell us what you 
came today to testify about.

  STATEMENT OF ANGELA PATTERSON, DIRECTOR, UNITY WELCOME HOME

    Ms. Patterson. Chairwoman Waters, Congressman Cleaver, and 
the other members of the subcommittee, we thank you for 
inviting me to testify today on behalf of UNITY of Greater New 
Orleans. And by the way, if I might digress for a moment, I do 
not know, Madam Chairwoman, if you recall a moment when Martha 
Kegel and myself were in Washington, D.C., advocating for the 
recovery vouchers for the persons who were most vulnerable in 
our community. And it was a very, very dark moment for us 
because it did not look as though the vouchers were going to be 
passed. And we met you in the hallways of Congress and you 
said, ``That's not going to happen.'' And it passed. And we so 
much thank you for your leadership and your support.
    Chairwoman Waters. You are welcome.
    Ms. Patterson. UNITY is a nonprofit organization and HUD-
designated lead agency for an award-winning collaborative of 60 
nonprofit and governmental agencies providing housing and 
services for the homeless. Our mission is to coordinate 
community partnerships to prevent, reduce, and end homelessness 
in New Orleans and the neighboring Jefferson Parish. In 
addition to raising and distributing funds to support our 
member organizations' work, UNITY conducts homeless outreach on 
the streets and, very importantly, in abandoned buildings and 
rehabs supportive housing apartment buildings in partnership 
with the New York based organization Common Ground Institute, 
which helps the public locate affordable housing and advocates 
for public policy to prevent and reduce homelessness.
    While thousands of homes in the New Orleans area have been 
repaired since the levees broke, often with the help of caring 
volunteers from across the Nation, the extent of the 
devastation here remains simply overwhelming. There is still so 
much more to be done to rebuild our community.
    Four years later, the effects of the levee failures are 
most keenly felt by New Orleanians who are its most vulnerable 
residents. For many New Orleanians with limited means, 
especially the elderly, those with physical or mental 
disabilities or those who are struggling to raise a family on 
the minimum wage, the struggle for a decent place to live 
continues.
    Although New Orleans currently stands at only 74 percent of 
its pre-Katrina population, homelessness has nearly doubled 
since Katrina, from 6,300 homeless persons on any given day 
before the hurricane, to a current estimate of 11,500 people 
meeting the HUD definition of homelessness. That is, people who 
are living and trying to live a human life in abandoned 
buildings, people living in cars and on the street, those 
living in homeless facilities who are stuck there and cannot 
get out, and those who are being evicted or discharged from 
institutions who have nowhere else to go. Six thousand people 
are currently estimated to be living in New Orlean's more than 
65,000 abandoned buildings, while about 5,500 others are living 
in other deplorable homeless situations. During the course of 
2008, the UNITY network of organizations provided services and/
or housing to 18,875 unduplicated homeless people, including 
4,667 homeless children.
    Last year, UNITY and its member organizations and 
government partners successfully rehoused in the course of one 
year 457 people into permanent housing. Those people had 
formerly been living in large, squalid homeless camps in the 
middle of downtown New Orleans. We are looking at people in 
abandoned buildings. These people are the sickest of the sick 
and the work that is being done by the nine measly workers of 
the outreach team, these very, very committed and fearless 
people, is both dangerous and difficult going into these 65,888 
abandoned properties. This work that is being done in these 
abandoned buildings is unprecedented anywhere in America. 
Abandoned buildings dwellers are living in the midst of 
crumbling ceilings and walls, mold all over the place, living 
with a bucket beside them where they have to use the bathroom. 
There is no electricity, no sewage, no running water in these 
places, and this is how people are being forced to live in the 
richest country in the world.
    We are so grateful to Congress for granting last year the 
request of UNITY, the Louisiana Supportive Housing Coalition 
and the Louisiana Recovery Authority for the 3,000 Hurricane 
Recovery permanent supportive housing vouchers which were meant 
for people with disabilities in hurricane devastated areas of 
Louisiana. And we are especially grateful to you, Congresswoman 
Waters, for the important role that you played in that effort, 
as well as to Senator Mary Landrieu, the House leadership, the 
Louisiana delegation, and the Mayor and City Council of New 
Orleans.
    Of the 3,000 PSH vouchers, 752 are being targeted to the 
New Orleans homeless. What we need is:
    $5 million to implement a robust City-wide campaign to 
search for and rescue the thousands of vulnerable people living 
in the City's 65,000 abandoned buildings;
    $35 million for 700 additional shelter plus care vouchers 
designated for the New Orleans disabled and elderly homeless, 
especially those living in those abandoned buildings; and
    $100 million to create housing stock for the poorest and 
most vulnerable which is needed to fill the anticipated gaps in 
financing, which is the goal of the New Orleans/Jefferson--
    Chairwoman Waters. Ms. Patterson, I am going to have to 
bring you to a close and for one very, very good reason. Mr. 
Cleaver has to catch a plane and so we are going to yield to 
him the time to ask some questions before he leaves.
    Thank you very much.
    Ms. Patterson. Thank you.
    [The prepared statement of Ms. Patterson can be found on 
page 99 of the appendix.]
    Mr. Cleaver. Thank you, Madam Chairwoman. I apologize that 
I need to be in Kansas City by 7:00 tonight. I have just two 
questions.
    Ms. Wiggins, I am not sure, but were you suggesting that a 
receivership is where you would suggest the PHA be placed?
    Ms. Wiggins. We are asking that HUD is removed and an 
executive monitor is put in place. And the reason for that is 
because if we have an issue, it is HUD where we get our 
redress. There is no place for us to get it because HUD is 
actually managing the housing authority at this point. So we 
are asking that they are removed and an executive monitor is 
put in place, so when there are issues that the residents are 
having, that we can go to HUD to get it. That is what we are 
asking for.
    Mr. Cleaver. I mean, Federal legislation of course places 
housing authorities under HUD, that is Federal legislation.
    Ms. Wiggins. They can appoint an executive monitor instead 
of a HUD employee.
    Mr. Cleaver. No, sometimes courts will appoint a receiver, 
which I do not think you want.
    Ms. Wiggins. No.
    Mr. Cleaver. But I do not think you can remove HUD.
    Ms. Sinha. The legislation says that if HUD has been a 
receiver of a public housing authority for more than 3 years, 
they shall then be removed. Meaning that if they have done it 
for more than 3 years and something is going on that has not 
been improved for more than 2 years. So there is a provision of 
law that says that there is a time limit when HUD is supposed 
to be receivership and when they are supposed to move it on. So 
the law actually says that HUD should move on after a certain 
point. And my understanding is that HUD has been a receiver of 
HANO since 2002.
    Mr. Cleaver. So you are saying that you want the public 
housing authority, which means the board, a board, to now 
assume the leadership as opposed to the Federal Department of 
Housing and Urban Development.
    Ms. Sinha. Yes.
    Mr. Perry. One of the things that has frustrated so many 
people in this City is that administrators from outside of New 
Orleans have been making decisions about housing for New 
Orleanians. And we just think that is simply unfair.
    One of the things that happened in the course of the 
demolition process was that there was a memorandum which the 
Mayor submitted which said that in order to demolish you have 
to agree to allow there to be at least a three-person board and 
that three-person board would have a HUD representative, it 
would have a public housing representative and a representative 
of the Mayor. And the Administration has not been willing to do 
that so far.
    Mr. Cleaver. Excuse me. I hate to interrupt you, but most 
housing authorities are appointed by the mayor and there is a 
makeup of course with--there is supposed to be a residential 
member and then probably the others are appointed maybe through 
some formula, it depends on the City. So I am trying to get a 
picture, you are saying the 2 years are over, Ms. Tuggle, and 
so you believe that now is the time for the housing authority--
meaning the legal unit that supervises the housing authority--
be appointed and assume that role or are you saying that we 
need to have a court-appointed receiver?
    Ms. Wiggins. No, a citizen board.
    Ms. Tuggle. The residents that I speak with would prefer to 
have local control, as their number one choice.
    Mr. Cleaver. We use the term public housing authority, PHA, 
but that is not accurate, the authority is the board. And so 
you are saying that is what you want?
    Ms. Wiggins. We want a citizen board put back in place. 
That is what we are asking for.
    Mr. Cleaver. Is there unanimity, Ms. Sinha?
    Ms. Sinha. Anita.
    Mr. Cleaver. Everybody is in favor of that?
    Ms. Sinha. Yes.
    Mr. Cleaver. I am not mad about it, I mean I appointed the 
board when I was mayor and the residents generally prefer that 
because they could touch me and they can touch the housing 
authority as opposed to Federal--thank you and I appreciate 
that and again, I apologize for having to leave.
    Chairwoman Waters. Thank you so very much for spending time 
with us, Mr. Cleaver, please get your plane, get back to the 
district, I know that your constituents are waiting on you.
    Let me just say to this panel that I am familiar with all 
of you because of your advocacy. You have been on the front 
lines in all of the ways that you have continued to describe 
here today. I have worked so closely with The Advancement 
Project. We have done everything from, you know, tour and visit 
the ``Big Four'' units where women were busy scrubbing up mold, 
to march in Washington, D.C. And the testimony that has been 
provided by The Advancement Project has helped to educate me 
about what was taking place.
    Mr. Perry, I thank you for your work and this business of 
Section 8 discrimination is going to have to be dealt with in 
some shape or form. We have fair housing laws but those laws do 
not reach into the Section 8 problem that you are describing. 
Not only are you vividly describing for us discrimination based 
on the fact that people just do not want to take Section 8 and 
they have all these myths about who Section 8 people are. You 
just told us that there was some outright racial discrimination 
that was described very vividly to you, and we really have to 
see what we can do to make the civil rights laws extend into 
this Section 8 problem.
    Ms. Tuggle, Ms. Wiggins, Ms. Patterson, all of the talk 
about Section 8 that you have shared with us today helps me to 
understand that it is time for a revitalization of the policies 
that oversee and implement Section 8. This business about the 
deposits that are required of people who certainly cannot 
afford it is such a deterrent and such an obstacle to being 
able to just get into a place. And I have also been made aware 
before I came here today of another city where it appears that 
some landlords have been very, very good at keeping people's 
deposits. As I understand it, not only do they come up with 
pictures to show damage, but sometimes there is longstanding 
damage that there has been an attempt to get the landlords to 
correct that have not been corrected, and then we do not have 
anybody advocating that the tenants get their deposit back, 
based on the fact that damage has been there and not been taken 
care of by the landlord. So I am focused on this and I am 
certainly going to deal with this.
    The lease problem had been brought to our attention when I 
went over to Dallas, I believe it was, and you are absolutely 
correct and I like the recommendation about what to do about 
this. Our tenants from public housing were confronted with 
having to sign leases that they could not get out of, and 
should not be put in that position of being in a lease that you 
cannot get out of, for a lot of reasons. And it seems to me 
that the housing authority or HUD or somebody needs to talk 
about what is a reasonable lease for public housing tenants or 
other tenants so they are not left with a big legal problem 
confronting them that they have to negotiate all by themselves 
on these leases.
    So I am going to take a look at the revitalization of all 
of Section 8 dealing with these problems, including the 
problems of the cost of rising utility bills that people are 
confronted with.
    So what you have done today is to help me and the staff 
focus on what we need to do further in dealing with Section 8 
and public housing and all of the issues that you bring before 
us.
    The homeless problem in America indeed, Ms. Patterson, is 
shameful, all over America, including Los Angeles. What has 
happened here in New Orleans is unconscionable and you are 
absolutely right, the consistent figures that we get about the 
doubling of the homelessness, and it has been described about 
people living under bridges and in cars, but you painted a 
picture today about these abandoned buildings and the 
conditions under which people are living, which must be dealt 
with.
    The question that I asked of the last panel about whether 
or not the availability of this new Section 8 would be made 
available also to the homeless was not clearly answered for me, 
but we will pursue that, because as I said, and I do not know 
if he understood or not, he talked about publicizing it and 
putting it in the local newspapers. When you are homeless and 
you have no money, you are not going to spend your money on a 
newspaper to see whether or not the housing authority has some 
new policies or practices. So I am going to pursue whether or 
not the mobile unit that was somewhat described will be moving 
around into those areas, and all of the other problems 
associated with Section 8.
    Thank you so much for being here today. Do not leave. We 
have with us, as you know, the Representative for this area, 
Mr. Cao, who would like to raise some questions with you I am 
sure. In doing his job of representing, he is confronted with 
these problems every day. While we are in Washington, you are 
coming home to them and you must have a lot of thoughts about 
them. So I yield time to Mr. Cao.
    Mr. Cao. Thank you, Madam Chairwoman.
    This is a question to the whole panel. As you know, there 
is not just one type of person or situation that creates 
homelessness. If you could advise the City and some of the 
developers and officials here about the best way to address the 
needs of this population, what are some of the suggestions you 
would offer. And I would like to begin with Ms. Sinha.
    Ms. Sinha. Let me repeat the question so I understand it. 
What--
    Mr. Cao. What would you advise the City leaders, the 
developers and officials with respect to how can we cope with 
the situation of homelessness when we know that there is not 
just one type of person or situation that would create this 
situation?
    Ms. Sinha. I think the theme that comes to mind--and this 
is very hard when you have rules and regulations governing this 
world--but is flexibility. We are in a place, both in terms of 
our current economic crisis but also the fact that we are 
dealing with the problem of people who have been displaced 
moving from home to home, city to city, for the past 4 years. 
And to then have them have this mound of requirements in order 
to get their foot into the door and a roof over their head is 
completely--it is inhumane.
    If you have credit checks, for example, you are required to 
have a credit card.
    Mr. Cao. If you would keep your answer please--
    Ms. Sinha. Yes, okay. So I would say barriers such as 
credit checks, barriers such as criminal background checks, the 
homeless population are exposed to a lot of criminalization, 
are two huge problems. The employment requirement is also a 
huge problem. So flexibility in those kinds of requirements are 
needed in this situation.
    Mr. Cao. Mr. Perry?
    Mr. Perry. Thank you. I would offer a few things. The first 
is that oftentimes right now, people criminalize renters. It is 
this idea that it is so much better to be a homeowner. And of 
course it is great to have homeowners and we need them, but not 
all people will be homeowners. So you have to be open to the 
idea of folks being renters.
    The second is that a lot of times when people do create 
programs for renters, they do not focus on people who are 
extremely low income. And so you have to target funding for 
folks who are extremely low income.
    The third is the issue that has been raised today and that 
is that you have to realize that a lot of times people who are 
homeless are not going to be able to go through the typical 
application process. So you have to seek people out who are 
homeless and make sure that they can navigate, and you have to 
streamline frankly the application process.
    And then the last thing, the support for nongovernment 
entities that actually get out in the community and do a lot of 
the work. So a group like UNITY, for instance, if fully funded, 
can put a huge dent in the homeless problem here in the City of 
New Orleans, but oftentimes nongovernmental organizations are 
struggling just to stay alive and so it is very difficult to 
then at the same time work in the homeless problem in the City.
    Mr. Cao. Ms. Tuggle?
    Ms. Tuggle. Thank you. I would make a couple of 
recommendations. One would be even with the permanent 
supportive housing vouchers that have come down, some of those 
are already--were already in the works and some of that housing 
came on line without the vouchers and now there is a swap-out 
going on. And we have already encountered so many homeless 
clients and other disabled clients who have been denied 
admission to the PSH units that are subsidized with the 
vouchers. And it is to the point now where we are getting ready 
to write a fellowship proposal to find an attorney to just 
focus on some of the admission issues with that population and 
some other advocacy issues.
    We have had developers tell us that they will not consider 
any reasonable accommodation if someone happens to have a 
record of an arrest, even if it is somewhat of a minor arrest. 
We have had some developers tell us one bad unit will ruin the 
entire property.
    So one thing that would be important is for the developers, 
landlords, to get more training about fair housing so there 
could be more vigorous enforcement of a lot of the issues that 
arise.
    Additionally, we would suggest that developers be flexible 
when working with residents on security deposits. You know, 
even developers that only charge $500--I say only because we 
are used to now, unfortunately, seeing $1,300 and $1,400 
deposits--that you let folks pay that out over time. It is a 
huge barrier.
    And one last thing that I would mention that often keeps 
folks out of housing, there is this idea--and I am not sure 
exactly where it comes from--that the utility bill can only be 
in the head of household's name. And while that is desirable, 
many folks after Katrina had sky high--I am sure you have heard 
about the sky high energy bills that ran forever and they were 
never shut off. And that has been a huge problem with being 
able to have people get back into housing.
    Mr. Cao. Ms. Wiggins, Ms. Patterson, if you could keep your 
answers brief, I would appreciate it.
    Ms. Wiggins. Mine is going to be really brief.
    I think that there should be--I would recommend a waiver to 
some of the requirements that people have to meet when they 
come into public housing or subsidized housing.
    I would also recommend that there is a waiver for utilities 
for a reasonable period of time, because a lot of times they 
are coming from the street and they are homeless and they do 
not have income. Those who do have incomes, their family 
members are holding it, so there should be some provisions put 
in place to allow for a waiver for a period of time so they can 
adjust to having that responsibility.
    And also, I think there needs to be a support resource 
center put in place where these families can go to to get 
clothing, furniture, and the necessary things they need to 
survive in those units.
    Mr. Cao. Ms. Patterson?
    Ms. Patterson. Thank you for proposing this question. 
Actually, it is contained in the recommendations of UNITY and I 
will be very brief with the three major recommendations.
    First of all, $5 million is needed to implement a robust 
outreach program. We have nine workers, there is no way in the 
world that of the two workers of those nine, who are presently 
going into abandoned buildings and finding the sickest of the 
sick, that this work can continue to be effectively done. So we 
need more money to beef-up the outreach team.
    We need $35 million to provide for 700 additional shelter 
plus care vouchers which is for the sick, the disabled, and the 
elderly homeless.
    And then to create housing stock for the poorest and most 
vulnerable persons, another $100 million is needed.
    Mr. Cao. Thank you, Madam Chairwoman. I yield back the 
balance of my time.
    Chairwoman Waters. Well, let me thank all of you for your 
patience, for the time that you have spent here today, for the 
testimony you have afforded us and the concerns that you have 
caused us to focus on.
    And let me just wrap this up by saying we have some of the 
developers who are going to come next. Ms. Sinha, you have been 
focused on the policies that are developed by some of the 
developers, or the developers. I have been talking with my 
staff about why does government allow developers to make public 
policy to begin with. But in addition to that, as I understand 
it, this is not a move-to-work situation, which means that they 
do not get to develop those kind of policies anywhere that 
relates to the criteria. So I will be taking a very, very, very 
close look at that.
    Thank you all very much.
    I would now like to invite our third panel to come forward: 
Mr. Jim Grauley, president and chief operating officer, 
Columbia Residential; Ms. Stephanie Mingo, former resident, St. 
Bernard Public Housing Development; Ms. Michelle Whetten, vice 
president and Gulf Coast director, Enterprise Community 
Partners; Ms. Valerie Johnson, former resident, Lafitte Public 
Housing Development; Mr. Keith B. Key, chief executive officer 
and president, KBK Enterprises; Ms. Donna Johnigan, vice 
president, B.W. Cooper Resident Council; Mr. Yusef Freeman, 
project manager, McCormack Baron Salazar; and Ms. Jocquelyn 
Marshall, president, C.J. Peete Resident Council.
    Thank you all for your patience. Thank you for coming here 
today to share your testimony with us. And we are going to 
start with Mr. Jim Grauley, president and chief operating 
officer, Columbia Residential.
    Am I pronouncing your name correctly?
    Mr. Grauley. It is ``Grauley.''
    Chairwoman Waters. Thank you. Will you begin the testimony 
for us?
    We have a pretty large panel, so we are going to hold you 
to your time limits so that we will have an opportunity to 
raise some questions that need to be dealt with. Thank you.

    STATEMENT OF JIM GRAULEY, PRESIDENT AND CHIEF OPERATING 
                 OFFICER, COLUMBIA RESIDENTIAL

    Mr. Grauley. Good afternoon, Madam Chairwoman, Congressman 
Cao. My name is Jim Grauley, and I am the president and chief 
operating officer of Columbia Residential. I would like to 
thank you and the members of the Subcommittee on Housing and 
Community Opportunity for affording me the opportunity to 
address the subcommittee regarding the status of the ``Big 
Four.'' It is my honor to speak to you today representing our 
development team.
    Hurricane Katrina and the broken levees that followed 
devastated the City and the region. Included in the destruction 
was the St. Bernard housing project, which was deluged under 
several feet of water. These homes and the entire surrounding 
neighborhood were destroyed and the citizens were scattered 
across the Nation. This was an immense human tragedy as well as 
an unprecedented destruction within an American City. Madam 
Chairwoman, in this context, we began the daunting task of 
rebuilding the St. Bernard community and it is well underway 
for the affected families and the broader community.
    My company, Columbia Residential, was invited to New 
Orleans as a development partner for the redevelopment of St. 
Bernard. Building on the vision of HANO, the City and our 
partner, the Bayou District Foundation, we have launched the 
redevelopment of the surrounding area. Columbia Residential is 
a leader in the revitalization of housing--of distressed 
housing neighborhoods in several cities across the country. It 
is our experience and success in these other communities that 
made Columbia Residential the right partner to work for the 
Bayou District Foundation and the Housing Authority of New 
Orleans.
    Columbia builds and manages healthy mixed-income 
communities comprising over 4,500 units of housing, which are 
known for setting the standard of design quality and responsive 
management in their communities. Fully half of the families in 
these communities are public housing and former public housing 
families, either in the redeveloped sites or within off-site 
replacement housing. Over 1,000 of these units are apartments 
for low-income seniors in public housing assisted units. We 
serve also hundreds of families with special needs, 
disabilities, or who are transitioning from homelessness 
working with partners providing social services.
    I am pleased today to report that thanks to the incredible 
efforts of our partners at HANO, HUD, the State of Louisiana, 
the City, financial partners, and the resident partners, we 
were able to close phase I of the development late last year. 
As of today, construction is 30 percent complete on phase I of 
Columbia Park at the Bayou District, which includes the first 
466 new homes.
    Ten new city blocks with new infrastructure are now in 
place and are filling with new homes. A community center and 
first apartment and townhome units will be available later this 
year. Phase I will be completed by late 2010 with resident 
move-ins ongoing and continuing into 2011.
    I would like to pause, given the discussion about Section 
3. We take very seriously our Section 3 compliance and 
reporting and outreach efforts. We report that regularly to 
HANO. But it was not characterized correctly in the prior 
testimony.
    During demolition at the St. Bernard site, we had 17 
Section 3 workers, 8 of whom were residents. As of today, on 
the new construction, we have 50 Section 3 workers who have 
been hired by our contractors and suppliers and by the general 
contractor, and 12 of those are former residents. We take this 
seriously and we are at an early point and we will continue 
those efforts. Those numbers represent more than 70 percent of 
all the new jobs created at the site.
    Columbia Parc is a mixed-income community with multiple 
phases of development, 157 units in phase I and at least one-
third of the units in subsequent phases, are set aside as 
public housing units specifically for returning families. We 
are pleased at the early response at this stage.
    Let me skip ahead just for time. We are principally a real 
estate developer and our communities serve people and families. 
We have made a sincere effort to firmly understand the unique 
circumstances in New Orleans and be sensitive to the pain and 
incredible challenges faced by families affected by the 
upheaval over the past couple of years.
    With the assistance of former St. Bernard residents, HANO, 
and a variety of outreach mechanisms, we have identified more 
than 900 affected St. Bernard families who have traveled to 
other communities around New Orleans and across the country. 
After extensive outreach and a widely advertised application 
period, thus far, more than 400 families have expressed an 
interest in returning to the site. As of today, 276 former St. 
Bernard households have made application and been qualified by 
HANO for the initial site-based waiting list for the 
development. The opportunity to return will continue to be open 
to all former residents and this outreach on our part will 
continue.
    Kingsley House, a leading provider of social services to 
families in southeast Louisiana, is our partner who provides an 
array of services to returning former residents. They are 
working with families on an individual basis to prepare and 
succeed in returning to the community.
    Madam Chairwoman, I believe it is important that we say to 
you that throughout the life of this project and our 
involvement, priority for occupancy will be given to former 
residents of the St. Bernard community, particularly those who 
are elderly or disabled.
    Madam Chairwoman, we are well on our way through the first 
phase of building a healthy community that will transform an 
important area of New Orleans. We continue to learn daily as 
we, HANO, and Kingsley House work with resident families. We 
learn more ways that we can assist and provide services that 
will help make a return possible for as many families as 
possible.
    Chairwoman Waters. Thank you very much.
    Ms. Mingo.

  STATEMENT OF STEPHANIE MINGO, FORMER RESIDENT, ST. BERNARD 
                   PUBLIC HOUSING DEVELOPMENT

    Ms. Mingo. My name is Stephanie Mingo. I want to thank you 
for allowing me to speak today. My heart kind of hurts me right 
now.
    I just want to talk about other residents. Every resident 
of public housing, just like every New Orleanian, has a right 
to return. Planning at the ``Big Four'' should be reflected on 
this. Currently, they do not. Public housing residents are 
being denied the right by HANO and the development.
    Columbia plans to bring 150 homes for public housing 
residents at the former St. Bernard, excluding at least 90 
percent of the former residents. We should be rebuilding 1,500 
units of public housing at St. Bernard, not 150. If they do 
one-third of public housing, one-half of Section 8, and one-
third of tax credit, then it would take care of the low income. 
But why is two-thirds of St. Bernard being developed on purpose 
for the people who did not live there before Katrina?
    Finally, the rules and regulations or eligibility 
requirements at the redevelopment of the ``Big Four'' are being 
designed to exclude low-income New Orleanians, especially 
public housing residents.
    I have been working on Section 3 a whole lot, I have 
something written down, but I want to clarify something. I have 
to write letters to the development. HANO and the developments 
are not complying with Section 3 requirements. They claim to 
be, but we have yet to see hard data provided for what they 
said.
    Section 3 was created so that impacted communities will 
benefit from redevelopment. In other words, as a resident of 
St. Bernard, I do not see my constituency benefitting from the 
jobs and the contracts produced so far. I have attempted to 
contact HANO's Chairwoman Diane Johnson and HUD staff members, 
including Stacy Hanson, the Director of HUD's Economic 
Opportunity Division, and Marvelle Robinson, the field office 
director for HUD in New Orleans about my concern. I have yet to 
hear from any of them. I have copies of my June 14th letter 
sent to them, and if this committee would like it, I will 
provide it for you.
    I feel this committee should force HANO to release all data 
of hiring and contracts to be published so that we can get to 
the bottom of this quickly.
    Iberville, stimulus money is being used to fix up some part 
of Iberville. As much as we appreciate it, we need much more 
than a fresh coat of paint or new lightbulbs. We need to have 
all the unoccupied units fixed up and rented out so what 
happened to St. Bernard, Lafitte, C.J. Peete, and B.W. Cooper 
will not happen in Iberville. This is also a security issue. If 
you occupy those developments, you would not have to worry 
about crime--neighbors can watch out for each other, is what I 
am trying to say, if they were occupied.
    Having them board-up apartments increases crime and reduces 
the community's ability to keep on one another's space. We need 
our utilities permanently upgraded. The needs of Iberville 
should never be used as an excuse to demolish or redevelop it 
along the lines of the ``Big Four.'' We need a reinvestment in 
Iberville as it once was.
    As for Lafitte, I believe the remaining 100 apartments 
should be reopened and reoccupied by residents immediately. 
Across the City and across the Nation, we should implement a 
moratorium on the demolition of public housing.
    To conclude, we need a one-for-one replacement of public 
housing that was demolished after Katrina. This means building 
more than 5,000 units of public housing in New Orleans. 
Vouchers have failed us. They do not secure quality housing and 
they do not provide tenants with a home. Vouchers might be a 
part of a housing strategy but only true public housing can 
reduce the rent price in our City.
    And one more thing I would like to say, I probably have 
more names of public housing residents than Mr. Grauley. Me and 
a lot of other residents have worked on the ground every single 
day. I have a job, I have been working 13 years where I am at. 
I mean, do not get me wrong, I want something new and I like 
something new, because I deserve something new, but the way 
that St. Bernard is coming up, it is no better than what it was 
before. We cannot talk to the developer. We are shut out. If we 
say something that they do not like--and this is the God's 
honest truth--we are shut out. We have at least 10 people--he 
was right, because I give him the benefit of the doubt, he 
might be right, eight people working on the ground. We had our 
own--I forgot the word I am looking for--but we had our own job 
fair, we had 150 people come out. We went out on the street to 
deliver the applications, then we did a re-check on the 
applications. They said we had to go to HANO, I just saw HANO 
at a meeting. HANO said we have to go back to Columbia. We did 
our own diagram and wanted our own builder, they denied that. 
My heart is still hurting. Thank you for listening.
    [The prepared statement of Ms. Mingo and other material 
referred to can be found on page 91 of the appendix.]
    Chairwoman Waters. Thank you, and without objection, your 
letter and your list will be submitted for the record and I 
will take that and we will review that.
    Ms. Whetten.

 STATEMENT OF MICHELLE WHETTEN, VICE PRESIDENT AND GULF COAST 
            DIRECTOR, ENTERPRISE COMMUNITY PARTNERS

    Ms. Whetten. Thank you, Chairwoman Waters and Congressman 
Cao, for holding this important hearing. My name is Michelle 
Whetten and I am vice president and Gulf Coast director for 
Enterprise Community Partners.
    To date, Enterprise has invested over $100 million in 
grants, loans, and equity with 1,450 homes completed and 3,000 
in some stage of construction or development in Louisiana and 
Mississippi.
    Our most ambitious project in this effort has been the 
redevelopment and revitalization of the historic Treme/Lafitte 
neighborhood on and around the site of the Lafitte public 
housing development.
    Before creating a plan for Lafitte, Providence and 
Enterprise engaged a local community organizing group to help 
us locate nearly 600 of the nearly 865 Lafitte households who 
had evacuated to cities across the country. With a team of 
architects and planners, we held a series of charrettes both in 
New Orleans and in Houston, where residents were involved in 
the design process and articulated a vision for what the new 
community would look like. And our site plan today reflects 
very closely that vision of the residents.
    The 27-acre parcel of the Lafitte site and the scattered 
site properties involved in the redevelopment do allow us to 
accomplish two important goals: to honor our commitment for a 
one-for-one replacement standard; and to deconcentrate an area 
of poverty. And I would like to correct--the information that 
was presented from the Times Picayune was inaccurate. In our 
first major redevelopment phase, which includes 568 rental 
units, only 40 of those are low income tax credit only units. A 
full 387 units are project based Section 8 and the balance are 
ACC, which means that 528 of our first units will be affordable 
to the typical public housing occupant.
    With the Housing Authority of New Orleans and our local 
partner Providence, we will break ground on the first phase of 
the new development next week. This development will meet 
Enterprise's nationally recognized green community standards. 
And while we look forward to getting construction underway, we 
would be the first to acknowledge that it has taken far too 
long to get to this point.
    Although we were awarded CDBG funds and tax credits in 2006 
for this development, demolition was not completed until 
October 2008. And that timing coincided with the dramatic 
decline in the credit market that I am sure you are all too 
familiar with.
    While the stimulus act provided several important and 
helpful programs to address the problems with the low income 
housing tax credit market, Gulf Opportunity Zone loans and 
housing tax credits have been determined by Treasury to not be 
included in the important tax credit exchange program and the 
current deadline of December 2010 for placement of these 
credits in service is causing a major point of risk and 
disincentive for investors to purchase credits in the GO Zone. 
And I think it is important to note that a majority of the 
affordable rental housing that was to be redeveloped following 
Katrina in Louisiana and Mississippi in particular depended on 
these GO Zone tax credits to be constructed. So we believe that 
extending that placed in service date and allowing the exchange 
program to apply to these credits would allow the majority of 
those units to be finished, which currently there is 
approximately 6,800 units in Louisiana and Mississippi at risk 
of not being developed.
    We maintain a database of former residents that is 
regularly updated and verified through letters, surveys, and 
monthly meetings and we provide residents updates on the 
progress of the development and solicit their input on 
important issues such as selection of a property management 
company and other activities. As construction gets underway, we 
will provide clear instructions to residents on the process for 
applying to live in the community, the new community.
    With $2.5 million in in-kind services provided by Catholic 
Charities USA to former Lafitte residents in New Orleans, 
Houston, and Baton Rouge, and other philanthropic support, over 
450 former Lafitte resident families have been assisted with 
finding stable housing and addressing basic needs after being 
displaced by Hurricane Katrina.
    And Catholic Charities in January of this year reopened the 
Sojourner Truth Community Center adjacent to the Lafitte site, 
where families and residents can access a variety of programs.
    We are grateful for the leadership of Chairwoman Waters and 
others in Congress for keeping a spotlight on the ongoing 
recovery needs of the Gulf Coast. Four years following the most 
devastating disaster in our country's history, the long-term 
recovery of the region, particularly for the region's lowest 
income and most vulnerable residents, is far from complete.
    So we would ask again that Congress take action to extend 
the placed in service deadline 2 years and consider the tax 
credit exchange program so that these units can get built.
    Thank you.
    [The prepared statement of Ms. Whetten can be found on page 
147 of the appendix.]
    Chairwoman Waters. Thank you.
    Ms. Johnson.

   STATEMENT OF VALERIE S. JOHNSON, FORMER RESIDENT, LAFITTE 
                   PUBLIC HOUSING DEVELOPMENT

    Ms. Johnson. Thank you. My name is Valerie Johnson, and I 
am a former Lafitte resident. Thank you for taking time out of 
your busy schedule to hear from the ``Big Four'' and what 
relates to their future.
    I had to do a little change on my agenda, where I said the 
current status of public housing in New Orleans appears to be 
on the fast track. I changed it. Right now I am looking forward 
to the building. In the process, I have been afforded the 
opportunity to be a part of the planning process from the 
beginning as it relates to:
    The type of housing we will live in;
    Saving of the oak trees;
    Monthly meetings since its inception; and
    Working in concert with Providence and other social service 
entities at Sojourner Truth Community Center addressing the 
needs of residents and identifying resources to support these 
needs.
    We are looking forward to the groundbreaking in the 
upcoming week at the Lafitte public housing development.
    The Section 8 program offers little or no support as it 
relates to assisting residents making conscious decisions in 
the application of the Section 8 program. Many residents and 
elderly and persons on fixed incomes are struggling to survive, 
making decisions on buying their medications, food, and other 
staples to sustain them or paying their utilities.
    There is little or no affordable housing for former 
residents and attaining a job with livable wages is virtually 
obsolete. The challenges may seem unreachable, but with the 
right support services in place, it could ease the stress of 
making dire consequences to survive.
    Many residents of public housing are currently spread 
throughout this country in strange lands with strange people. 
They want to come home, but where is their home that was 
promised 4 years ago?
    It is time to stop procrastinating and blame shifting and 
work in concert with social service agencies to reach goals 
that seem out of reach, and receive the residents of public 
housing back home in a land that is familiar to them and they 
call home.
    Chairwoman Waters. Thank you very much, Ms. Johnson.
    Mr. Key.

    STATEMENT OF KEITH B. KEY, CHIEF EXECUTIVE OFFICER AND 
                   PRESIDENT, KBK ENTERPRISES

    Mr. Key. Good afternoon and thank you for allowing me to 
come and speak about the B.W. Cooper project. My name is Keith 
Key, and I am the president and CEO of KBK Enterprises.
    Let me start by saying that it has been an honor for me to 
be involved in this project and an honor to work with our 
partners at the B.W. Cooper Resident Management Corporation. We 
were fortunate that they chose us to be the developer prior to 
even the submission of the RFP, which we all agreed to respond 
to together as a team. So we were proud to be selected by the 
residents before we were selected by HANO. So that is an honor 
for me just to be involved and trusted by the residents.
    Let me begin at least summarizing my response. The project 
is currently in the status where we have completed demolition, 
the infrastructure is approximately 40 percent complete, the 
drawings are complete, submitted, and approved by the City. We 
currently have a $22 million gap. That gap is the distance 
between us beginning construction and going vertical and 
completing the project moving forward. So we are working very 
diligently on filling that gap.
    Our current strategy for the gap is we have an application 
with the stimulus package with HUD for $10 million; we have a 
structure to reduce a portion of our reserve by $4 million; and 
we are seeking City, State, and Federal resources for another 
$8.2 million. That would close the gap on the project and allow 
us to move forward with our vertical construction.
    We have looked at a variety of proposals and options to 
pursue various support systems to encourage our investor to 
stay involved and continue to look at the rate and structure of 
our financing. One of the important issues that we would like 
for Congress to help with is the extension of the GO Zone 
credits. They currently have a closed and placed in service 
date by end of 2010. We would like to look at an extension to 
that.
    We would also like for Congress to help with the TCAP 
exchange program, in making that available to GO Zone credits 
as well. That would greatly enhance the capitalization of our 
project, which is currently at about 59 cents in credits versus 
the 80 cent plus that you would be able to have from the 
exchange program.
    We are also looking to work with the Louisiana Office of 
Community Development. We have supplied an application to 
provide project based vouchers at our site in contrast with the 
LIHTC program, the low income housing tax credits, so that 
would allow us to actually reduce our reserve and allow us to 
provide residents with access to Section 8 program vouchers, 
support their rent for lower income.
    The other key piece of our proposal I think that should be 
mentioned, in terms of occupancy, the first phase of the 
project is 410 units. We are expecting 173 of those units to be 
units that will be occupied by public housing residents, 
another 106 of those units would be in the phase two, totaling 
279 public housing units in phases one and two of the total 660 
units planned.
    We have also looked at the numbers of that 173 and 106, 20 
percent of those units would come from LIHTC units. We did a 
survey with the residents and the resident management 
corporation of looking at the residents and their income base 
and their income base stipulated that there are many of them 
who would be eligible for LIHTC rents. And so we estimated 
about 20 percent of those residents using LIHTC available units 
for their occupancy.
    One of the questions was asked about the information of how 
we would find residents and work with HUD and HANO to bring 
those residents back to the community. It is important to note 
that the resident management corporation has been by far not 
only a great relationship for us but they have maintained great 
relationships with the current residents. We have nearly 300 
residents on site today and they have done an incredible job of 
seeking and communicating with those residents who have left 
New Orleans and left B.W. Cooper. And they have developed a 
database that we are currently working to purge and refine so 
that we can make sure that those residents who are on their 
lists are identified and responded to.
    Lastly, the question regarding the occupancy and the rental 
terms that the residents would have to endure when leasing the 
property, those structures are actually going to be created in 
selection process with the resident management corporation and 
the residents. So our plan is to sit down with the residents 
and build a selection policy that would be amenable to both the 
residents, HANO, HUD, and our investors.
    Thank you.
    Chairwoman Waters. Thank you very much.
    Ms. Johnigan.

   STATEMENT OF DONNA JOHNIGAN, VICE PRESIDENT, B.W. COOPER 
                        RESIDENT COUNCIL

    Ms. Johnigan. To the Honorable Chairperson and 
Congresswoman Maxine Waters and other distinguished members of 
the subcommittee, and most importantly, to the thousands of 
public housing families of New Orleans who were impacted by 
Hurricanes Katrina and Rita.
    My name is Donna Johnigan, and I want to start my testimony 
by thanking you all for allowing me the opportunity to appear 
before this distinguished panel to express my personal 
observations and experiences since the devastation of 4 years 
ago.
    I am a life-long resident of New Orleans and have spent 4 
decades of my life living in New Orleans public housing and 
working to better the living conditions of public housing 
residents in New Orleans and nationally.
    I have served in numerous public housing resident advocacy 
positions over that period and served as one of the founders of 
an organization of mothers who have lost children to the 
senseless violence that plagues our youth in public housing 
communities across this Nation.
    Currently, I am the vice president of the board of 
directors of the B.W. Cooper Resident Management Corporation.
    B.W. Cooper RMC is a residential property management entity 
that contracts with the Housing Authority of New Orleans to 
manage the development I live in.
    We are one of only two such corporations in the City of New 
Orleans and the State of Louisiana, and have existed for over 
20 years, successfully demonstrating our capability to manage 
our lives and our communities.
    Unfortunately, my community and other public housing 
communities are not what they were once, in part because of 
Hurricanes Katrina and Rita, but also because of a housing 
authority that seems to be insensitive and out of touch with 
the realities of the uniqueness of our plight in New Orleans.
    As you know, thousands of public housing units were 
destroyed 5 years ago, and thousands of families were displaced 
as result.
    Since that time, there has been a major effort on the part 
of the Federal Government and the Housing Authority of New 
Orleans to rebuild our communities, and we welcome that effort. 
However, a great majority of families who were displaced will 
not benefit from this massive effort.
    Our communities are being rebuilt as mixed-income housing, 
with only a small number of units targeted to return as public 
housing units. And though it is claimed that a majority of 
units will be affordable, the term ``affordable,'' while 
appropriate in other cities, will not be affordable to or serve 
the majority of needy families in this City.
    ``Affordable'' includes families whose incomes are up to 60 
percent of median income for this City, when in reality, the 
majority of families who need affordable housing fall well 
below that and the national poverty level.
    We welcome the opportunity to live in a community that has 
diverse income levels, but that should not come at the expense 
of harshly impacting the families who need help and once made 
up our communities. At least 50 percent of units constructed in 
these communities should have been actual public housing.
    Also, there is a local and national effort for the Section 
8 voucher program to replace conventional public housing as the 
primary source for the provision of assisted housing. But in 
reality, Section 8 vouchers are not good for very-low-income 
families, because of the uncertainty of utility costs as an 
added burden, and the requirement that families receiving these 
instruments must find and convince a landlord to lease to them 
in a competitive market.
    Those requirements and others are burdensome to families 
who have never had to perform those tasks. And the housing 
authority staff is not informing families of all the 
consequences of selecting Housing Choice vouchers, which is 
inexcusable.
    Finally, the opportunities for resident management 
corporations to continue to manage in the future has been 
seriously eroded because of the move away from traditional 
public housing that they and we have experience in managing.
    At a time when government is asking us to take more 
responsibility for our communities, one of the instruments that 
allows us to do that is being systematically phased out. We are 
being left to compete with private market management companies.
    I have fought all my life to remove the image of the 
stereotypical public housing resident that the public holds in 
general. And I now find myself having to gear up again to fight 
for the rights of public housing residents to reclaim their 
communities.
    I am up for that fight.
    With the help of people like you, Congresswoman Waters, I 
am confident that we will again overcome the barriers that have 
arisen to prevent us from controlling our communities. And I am 
equally confident that we will eventually prevail in providing 
really affordable housing to the families who are relying on 
the government to help them return to their communities.
    Again, Congresswoman Waters, I want to thank you and your 
committee for coming to New Orleans to see and hear our stories 
firsthand.
    Chairwoman Waters. Thank you very much, Ms. Johnigan.
    Mr. Freeman.

 STATEMENT OF YUSEF FREEMAN, PROJECT MANAGER, MCCORMACK BARON 
                            SALAZAR

    Mr. Freeman. Madam Chairwoman, Congressman Cao, thank you 
for this opportunity to speak before you today. My name is 
Yusef Freeman and I am an employee of McCormack Baron Salazar 
and the project manager of the redevelopment of Harmony Oaks, 
formerly known as the C.J. Peete and Magnolia public housing 
development. In partnership with the New Orleans Neighborhood 
Development Collaborative, a local nonprofit organization, and 
KAI Design and Build, an MBE architecture firm, we were 
selected by the Housing Authority of New Orleans through a 
response for qualifications procurement as Central City 
Partners with Urban Strategies, to redevelop the former public 
housing site, provide community supportive services to the 
former residents of the site, improve educational opportunities 
in the neighborhood, develop sports and recreation facilities, 
and develop quality commercial services for the community.
    The mission of McCormack Baron Salazar is to rebuild 
neighborhoods in central cities across the United States that 
have deteriorated through decades of neglect and disinvestment. 
In partnership with communities, we bring vision, experience, 
and commitment to the challenge of community revitalization.
    When Hurricane Katrina struck, 144 families were still 
living at the C.J. Peete site. These families were displaced, 
many out-of-State. The buildings remained vacant until they 
were demolished in the spring of 2008.
    The new Harmony Oaks mixed-income community will include 
460 mixed-income rental units. Of those, 193 will be public 
housing units, 144 will be low income housing tax credit units, 
and 123 of those units will be market rate rental units. Public 
housing residents with vouchers will be eligible to use those 
vouchers in both the low income housing tax credit units and 
the market rate rental units.
    Three on-site historic buildings are being rehabilitated, 
including one residential building, the administration 
building, and the community center. In addition to the 
community center, which houses the computer lab, the site will 
include a swimming pool, fitness room, community space, an on-
site management building and each cluster of buildings will 
have tot lots and secured parking. The community center is 
currently run by the head of the C.J. Peete tenant's 
organization, Ms. Marshall, who will speak after me.
    Harmony Oaks was designed in partnership with the C.J. 
Peete Resident Council, HANO, and community stakeholders. A 
project steering committee that includes representatives from 
the resident council, HANO, State and local government, the 
school district, neighborhood faith community, and other 
community stakeholders continues to meet on a quarterly basis 
to contribute to the development of the site.
    The for-lease apartments are all designed with market rate 
features. There are no amenity distinctions between public 
housing, market rate and tax credit units. Each unit will 
feature high quality flooring, window treatments, central 
heating and cooling, wood kitchen cabinets, refrigerators, 
ceiling fans, microwaves, dishwashers, clothes washers and 
dryers, and security systems.
    Construction of the 460 rental unit phase began in February 
of this year and is approximately 22 percent complete, 57 slabs 
have been poured, 27 buildings are framed, 95 percent of the 
drainage and sewerage are constructed, and 50 percent of the 
water lines are complete.
    The cornerstone of the new community will be a Campus of 
Learners comprised of a new state-of-the-art elementary school, 
recreation center, and health clinic. McCormack Baron Salazar 
has committed $20 million of our allocation of new markets tax 
credits to the recovery school district for the redevelopment 
of the Woodson School that is located across the street from 
the Harmony Oaks site.
    Fifty homeownership units are being developed by the New 
Orleans Neighborhood Development Collaborative in the 
communities surrounding the Harmony Oaks site. Eight of these 
homes are currently under construction. NONDC is working with 
HANO and Urban Strategies to qualify low-income homebuyers to 
participate in the homeownership program. Public housing 
residents have the first right to these homeownership units.
    The development team procured Urban Strategies to 
coordinate community and supportive services for households who 
lived at the former C.J. Peete development. Urban Strategies is 
a not-for-profit corporation that is coordinating all the 
support programs that assist former C.J. Peete residents 
achieve self-sufficiency, including intensive case management, 
job training and placement, quality child care and schools, 
access to physical and mental health services, senior programs, 
and enrichment activities for children and youth. Urban 
Strategies case managers are working closely with the residents 
to access needed services, regardless of where they are 
currently residing in the country.
    CSS activities currently operating out of the C.J. Peete 
Community Center include case management, technology programs, 
social activities, tutoring, construction job training, health 
programs, and community-based programs built on local 
partnerships. Urban Strategies case workers are currently 
providing community supportive services to 485 former C.J. 
Peete residents.
    When complete, 193 of the 460 mixed-income units at Harmony 
Oaks will be public housing units. Public housing residents 
will also be eligible to use vouchers to rent market rate and 
tax credit units. All former residents interested in returning 
to the site will complete an application to the management 
company, McCormack Baron Ragan. To be admitted to a public 
housing unit, the applicant must meet all eligibility 
requirements for admission to public housing as established by 
HUD and HANO. Before an applicant is denied admission for any 
reason, they will be able to refute that denial.
    HANO adopted the re-occupancy policy under which residents 
of the former C.J. Peete public housing development and of 
other HANO-owned public housing developments, will have 
priority rights to admission to the public housing units in 
Harmony Oaks, subject to the previously mentioned eligibility 
requirements.
    In closing, in partnership with the C.J. Peete Resident 
Council, HANO, HUD, the Louisiana Housing Finance Agency, the 
Louisiana Office of Community Development, the City of New 
Orleans, Council member Stacy Head's office, the Ford 
Foundation, the Casey Foundation, LISC, Living Cities, the 
Greater New Orleans Foundation, and others, the development and 
community supportive services team have been successful in 
commencing construction and connecting residents to needed 
services.
    The last thing is to continue this success, further 
investment is needed to provide additional community supportive 
services. While Katrina was 4 years ago, the traumatic impact 
on residents is still at the forefront. More funds are needed 
to provide mental health services to families impacted by the 
storm. In addition, more resources are needed to sustain case 
management services--
    [The prepared statement of Mr. Freeman can be found on page 
74 of the appendix.]
    Chairwoman Waters. Thank you, Mr. Freeman.
    Ms. Marshall.

STATEMENT OF JOCQUELYN MARSHALL, PRESIDENT, C.J. PEETE RESIDENT 
                            COUNCIL

    Ms. Marshall. Good afternoon, Madam Chairwoman, invited 
guests. It is indeed an honor to testify before you all today 
on the status of the ``Big Four'' as well as the state of 
housing throughout the City of New Orleans.
    The status of public housing, including the ``Big Four,'' 
is bleak. The supply does not meet the demand.
    The families who were typically middle class before Katrina 
have fallen into a lower tax bracket because of their inability 
to find livable wage jobs and meet the high cost of rent in the 
current housing market. With the state of the economy and the 
housing market, it leaves all New Orleans residents with little 
hope that things will improve.
    As it relates to the redevelopment of C.J. Peete, initially 
there was apprehension. That apprehension was based upon what 
the demolition of public housing would mean to the state of 
affordable housing throughout the City of New Orleans. However, 
as it specifically related to C.J. Peete, we knew that 
demolition was inevitable but we did not agree with how HUD 
proceeded with their plan.
    To my surprise, redevelopment at C.J. Peete is proceeding 
very well. We have a very unique working relationship with the 
redevelopment team which consists of Central City Partners, 
C.J. Peete Resident Council, McCormack Baron Salazar, KAI 
Design and Build, NONDC and Urban Strategies, Inc., our 
community and social services contract administrator.
    What is unique about this project is that Urban Strategies 
works side-by-side with the resident council to provide 
technical assistance and support for the residents and resident 
leaders. Also, we have case managers onsite to address the 
needs of the many families that we serve.
    As it relates to the Section 8 program, it has been my 
experience that the Section 8 program basically creates 
disparity between low- to moderate-income families and market 
rate tenants. You are either too rich for public housing or too 
poor for market rate units. There has to be a balance across-
the-board.
    What housing challenges are facing former C.J. Peete 
residents and how should those challenges be addressed?
    I would like to break those challenges down into three 
categories, if I may. There will be current challenges that 
they will face. There will be challenges that they face trying 
to get back home. And there will also be challenges when they 
come back and reside at the new redeveloped sites.
    Their current challenges are the social needs--employment, 
literacy, transportation, affordable, quality early childhood 
education, locating services in the cities where they currently 
reside, lack of community schools, and limited healthcare.
    My recommendations are:
    Each redeveloped site in conjunction with a community 
center, needs a community social service component to address 
the needs of residents. Consequently, if we do not address the 
social element of everyone in the household and provide 
services at every site, we will be back where we were 10 years 
ago. Redevelopment should not be focused on bricks and mortar; 
the social elements must be addressed as well.
    Since the lack of employment opportunities is a real 
challenge for residents, the enforcement and oversight of the 
Section 3 hiring process is critical in assisting qualified 
low- to moderate-income individuals in gaining employment. We 
recognize the challenges each site faces in addressing the 
pressing needs of many families we serve. We have formed a 
collaboration with the other sites, beginning with a 
construction training program coordinated by the C.J. Peete 
team and community partners to proactively address the Section 
3 hiring process at each site. I recommend that all sites 
address redevelopment from the holistic approach by doing our 
part in addressing all of the issues to the greatest extent 
possible.
    The challenges that they will face coming home: Getting out 
of their current leases with landlords, relocation expenses, 
paying deposits.
    Currently, HANO will approve a family or individual to get 
out of a lease to return to public housing, but that does not 
typically--they do not typically approve it if you are a 
voucher recipient. I recommend that HUD, HANO or the developer 
pay an early termination fee to the landlord.
    Relocation expenses are only offered to residents returning 
to public housing sites. Therefore, I recommend that the fees 
be offered to anyone deemed having a right to return to the 
site, especially if in fact they are returning to that site. 
The rationale is each resident was involuntarily moved out, so 
each should be assisted in moving back in.
    The challenges that they will face when residing back in 
the sites: There will be no group to advocate on residents' 
behalf. There are outdated HUD regulations. Lack of male 
involvement in the family.
    I would recommend that each site needs a resident council 
or an advisory group made up of a diversified group of 
residents who reside in the community, to advocate on their 
behalf. There should be a set criteria that is developed with 
the current leadership, Legal Aid, HANO and the developer 
approved by HUD. There should be consistency across-the-board.
    Thank you.
    [The prepared statement of Ms. Marshall can be found on 
page 86 of the appendix.]
    Chairwoman Waters. Thank you very, very much.
    Let me thank again all of our panelists who have come today 
to share such important information with us. I am particularly 
proud of the public housing advocates, residents and former 
residents who have worked so hard, informed themselves so well 
and who are advocates on behalf of people who do not have fancy 
lobbyists working for them at the City, County, or Federal 
level.
    I am extremely impressed with your recommendations and will 
take them seriously and do everything that I can to try and 
right some wrongs and to prevent some wrongs from happening in 
the future as we look at how we rehabilitate and how we 
restructure Section 8.
    Let me start with Mr. Grauley, however. I want to ask each 
of the developers just quickly, you do not have to go into 
detail. As you penciled out your proposals and as they were 
accepted for development, do you now have all of the financing 
that you need, except for the tax credit part that I understand 
is not available because of the lack of investment because of 
the meltdown in our economy? But other than that, do you have 
all of your financing lined up?
    Mr. Grauley. We have all the financing for phase I, 466 
units. We have a commitment from the housing authority that is 
in place for the infrastructure for the remainder of the site. 
After that, there is not funding in place that we are aware of 
from HANO, but they have committed to see the whole thing 
through. We have made an application to the State of Louisiana 
and to HANO for phase two, it is a very strong application and 
our intention and what we believe will occur is we will roll 
immediately into phase two late in 2010 with our current 
application, that will allow us to continue build out.
    There is a lot of talk about how there are only so many 
units, but the focus and the numbers in the Times Picayune are 
focused on phase I. Our phase I is an extraordinary size, 466 
units, as the other developers--
    Chairwoman Waters. I am just interested in the financing 
right now. As you developed your proposal, had you anticipated 
the needed funding from HANO or from any other sources other 
than your traditional financing sources--well, that may be even 
traditional, but were you expecting any more money from HANO or 
HUD?
    Mr. Grauley. HANO was clear that they were committed to 
seeing the development through all phases.
    Chairwoman Waters. I am sorry, start that over again, I was 
a little startled by God's work.
    Mr. Grauley. HANO was clear that they were committed to 
seeing the development through all phases and they have stood 
by us on that. There was a significant traunch of funding for 
all the ``Big Four'' from the State of Louisiana and the CDBG 
program. Those funds have largely been used with the first 
phases of the ``Big Four'' and so having additional funds to 
fill that gap are important. Further, I do not think any of us 
anticipated, as my colleagues have referenced, seeing the tax 
credit market occurring as we have. We certainly--I would echo 
the request around the GO Zone credits. That enhanced our 
equity raise very substantially, we were able to close it in 
time. And having that come back in place would be very 
important to allow future phases to get the kind of pricing 
that would bring a lot more private funds in.
    Chairwoman Waters. So what you are basically telling me is, 
of course, you anticipated the cost and you organized your 
redevelopment based on real numbers that you submitted. But 
there are still some questions about some portions of that 
funding coming from other sources, such as the State, HANO, 
etc.
    Mr. Grauley. Yes. In our case, we do not have questions 
about phase two, our phase two does not use the State CDBG 
resources, but in subsequent phases after that, to get to the 
full build out of the site, which is very important, so we can 
replace all the units, there is a question about that.
    Chairwoman Waters. Okay. All right, what about Lafitte and 
Enterprise, except for the investment tax credits.
    Ms. Whetten. Right.
    Chairwoman Waters. Do you have all of your financing lined 
up?
    Ms. Whetten. For the first 568 rental units and 244 for 
sale units, we have the CDBG funds from the State of Louisiana 
through the piggyback program, and tax credits committed and we 
have HANO subsidy committed to complete those units. If there 
is one sort of gap in where we believe we need additional 
funds, it is for additional homeownership subsidy to make the 
for sale homes that we build more affordable to the residents 
wishing to buy a home.
    Now we have a committed investor for the first 137 rental 
units and we have, as I mentioned, the funds committed for the 
for-sale units, which is 47 in the first phase. We believe we 
have--we do have strong investor interest and believe we can 
sell the credits to complete the 568 units but for the placed 
in service extension.
    Chairwoman Waters. So you in no way, either Mr. Grauley or 
you, are looking to HUD for any more money?
    Ms. Whetten. As I said, we believe additional funds are 
necessary to make for sale homes affordable to the residents in 
Treme--
    Chairwoman Waters. Okay, and what about you, Mr. Grauley?
    Mr. Grauley. Not on phase I and phase two, Madam 
Chairwoman, but in additional phases, certainly we will be and 
HANO has committed to that.
    Chairwoman Waters. All right. Mr. Key?
    Mr. Key. Congresswoman, I am looking to HUD for help.
    Chairwoman Waters. You need some money.
    Mr. Key. Yes, we need $22 million.
    Chairwoman Waters. Okay. Mr. Freeman?
    Mr. Freeman. We have all of our funds for the original 
phase with the soft second program for homeownership. We are 
looking for additional funds for our homeownership phase and 
for additional funds for a commercial phase.
    Chairwoman Waters. Okay, what I have heard here today, 
developers, from residents and from our advocates is there 
should be more low-income units or units that people could 
qualify for, who only have--meet the criteria for public 
housing.
    So you have already designed your projects, you have 
penciled them out, you know what the costs are, but if you need 
more money to complete it and if you were asked in exchange for 
that money to modify your plans so that you could increase the 
number of low-income units, what would you do?
    Mr. Grauley. I believe we would like to look at that and 
consider that. We do believe in the mixed-income model and that 
was--
    Chairwoman Waters. No, I know all of that. I see your 
mixed-income model, I see what you have for public housing in 
essence, I see what you have for the tax credit units, I see 
what you have for homeownership. That is not my question. My 
question is that would you, could you modify your plans to 
accommodate more low-income housing opportunities, if you had 
to.
    Mr. Grauley. We could--yes, we certainly would consider it.
    Chairwoman Waters. What about Enterprise, could you do 
that?
    Ms. Whetten. In our first major development phase, the 568 
rental units, all but 40 are permanently affordable to 
households that could previously afford public housing rents.
    Chairwoman Waters. For Lafitte, I am looking at your 
planned units are 176 from the Times Picayune very graphic 
description of the total number of units that they had at 
Lafitte, the number that was unoccupied, the number that is 
planned in the blue section for the low income or the public 
housing criteria eligible, etc. What I want to know is if you 
are looking at the same thing I am looking at or if you 
understand the same thing I understand, would you increase that 
176?
    Ms. Whetten. I am not familiar with the numbers you are 
looking at and they do not match with anything in my 
understanding of what--
    Chairwoman Waters. Well, let me just ask it this way, if 
you need money from HUD and you were told by HUD the 
legislators will not let us do it unless you increase the 
numbers, what would you do?
    Ms. Whetten. Our commitment is to build 900 affordable, 
subsidized permanently affordable rental units in the full 
development.
    Chairwoman Waters. We know that, we know that, you told us 
that already, and we know that you have some units on the 
footprint and you have some that are in scattered housing.
    Ms. Whetten. Right, our first phase--
    Chairwoman Waters. We are talking about in the footprint, 
that is what I am talking about now. I am asking a question. I 
do not have any plans yet, I do not know anything. I am just 
wondering, since the residents tell me that they believe, as I 
do, that there should be one-for-one replacement, they do not 
necessarily believe that it should be a reduced number on the 
footprint and the rest of it in scattered housing, that maybe 
we should have more on the footprint. If you were asked to do 
that, based on the ability to help continue the funding, what 
would you do?
    Ms. Whetten. Our site plan was carefully designed based on 
the wishes of residents to de-densify the site and provide more 
single and double occupancy homes and apartments. Our 
commitment is one-for-one replacement and deconcentration of 
poverty, and we are doing that through scattered sites and on-
site development. Our on-site rental units are--our first phase 
is 568 and as I said, all but 40 are permanently affordable. So 
additional affordability if we had--
    Chairwoman Waters. Okay, you are not prepared to answer my 
question at this time.
    Let me move on to Mr. Key. What would you do, Mr. Key?
    Mr. Key. If we could make it economically affordable, we 
would definitely look at it.
    Chairwoman Waters. You would consider what I am proposing? 
And like I said, I am not proposing it now, I am wondering.
    Mr. Key. Sure.
    Chairwoman Waters. And I am trying to--because all of you 
respect the residents so much and you work with them so closely 
and you want their input. And their input to a person is there 
should be more onsite low-income units. And so what you are 
saying is you would consider that.
    Mr. Key. Yes, I would consider it.
    Chairwoman Waters. What about you, Mr. Freeman?
    Mr. Freeman. All 50 of our homeownership units that we need 
additional funds for are public housing replacement units.
    Chairwoman Waters. I beg your pardon?
    Mr. Freeman. All 50 of our homeownership units that we need 
additional funds for are public housing replacement units.
    Chairwoman Waters. Okay. I am certainly not talking about 
homeownership, and you know that.
    Mr. Freeman. Well, the answer to your original question of 
do we need additional funds for--
    Chairwoman Waters. No, no, no, no. That is not what I asked 
you. What I said was if you need additional funds to finish 
whatever you have to finish and if the requirement was, in 
exchange for the funding, that you have to maybe instead of 
having 50 homeownership units, maybe you have 25, and the other 
25 are converted now to low-income units. Could you do that?
    Mr. Freeman. On our current plan, we could not do that.
    Chairwoman Waters. That would be impossible for you to do?
    Mr. Freeman. Yes.
    Chairwoman Waters. Okay, so you would have to turn down the 
money if that was a requirement.
    Mr. Freeman. Right.
    Chairwoman Waters. Okay. That is all I wanted to know.
    Secondly, let me ask about the jobs. And I do not want to 
prolong this discussion on this and I want to be as clear as I 
can possibly be.
    You gave me a number, Mr. Grauley, that you had--of jobs, 
that had been realized in what, the demolition stage?
    Mr. Grauley. The demolition stage and the new construction 
stage.
    Chairwoman Waters. Okay, give me that again. On the 
demolition stage, how many residents did you hire and are they 
still hired, what happened to them? Did they transition to the 
new construction? What happened to those--what was it, 17?
    Mr. Grauley. That is right. We had--Section 3 requires that 
we report Section 3 hires against all new hires at the site. 
And in the demolition phase, we had 17 Section 3 hires. That 
was all of the new hires at the site, by our contractor.
    In the new construction phase, we have--our latest report 
to HANO is based on July and that was a total of 39 Section 3 
hires on the site by the site contractors and subcontractors. 
That number, as of today, has increased to 50, because as each 
new contractor comes on site, new trades, painting, drywall is 
just coming on site--
    Chairwoman Waters. Let me try and understand. The first 17 
that you hired, are they still working?
    Mr. Grauley. The demolition work is complete, so they are 
not working now.
    Chairwoman Waters. That is complete, so that 17 is not 
there now.
    Mr. Grauley. Not at this time, they were hired for 
demolition.
    Chairwoman Waters. Okay, so the 39 that you are referring 
to that you described as Section 3, they are now working on new 
construction, is that right?
    Mr. Grauley. Yes, they are. There are a couple who had been 
working and who are no longer working, one--
    Chairwoman Waters. I beg your pardon?
    Mr. Grauley. There are a couple of those who have been 
working and who are no longer working, but we reported them as 
part of the total.
    Chairwoman Waters. How many of the 39 are actually working 
today, have jobs?
    Mr. Grauley. Based on the numbers that I have, that would 
be 37.
    Chairwoman Waters. About 37?
    Mr. Grauley. It would be 37.
    Chairwoman Waters. And what about--what is this number 50 
that you referred to, what does that include?
    Mr. Grauley. We report this every month and it builds every 
month as we have more contractors on site, we have more trades 
on site, more opportunities. So 50 is as of August, the 39 is 
as of July. We reported to the community as part of your 
package in June that had a lower number than that. It is 
building as we go through.
    Chairwoman Waters. Is this report a report that is 
cumulative of all the people that you have hired or are these 
new hires?
    Mr. Grauley. It is both, Madam Chairwoman, it is--
    Chairwoman Waters. So the 17 who are no longer working 
there may be showing up in this 50 number, is that right?
    Mr. Grauley. There may be--
    Chairwoman Waters. It probably is. Okay, Mr. Key.
    Mr. Key. We just completed demolition, so we have not gone 
vertical yet, so our construction work has only been mainly 
demolition and beginning of infrastructure.
    Chairwoman Waters. How many people did you hire during 
demolition, residents?
    Mr. Key. We had 21 Section 3 employees.
    Chairwoman Waters. Twenty one residents.
    Mr. Key. Out of the 21, I do not know exactly how many were 
residents, it was about maybe 10 or 12 residents.
    Chairwoman Waters. About 10 or 12 residents. And those 10 
or 12 are still working or no longer working? Demolition is 
over.
    Mr. Key. Is done.
    Chairwoman Waters. So they are not working?
    Mr. Key. No.
    Chairwoman Waters. Are you in new construction?
    Mr. Key. We are not in construction yet.
    Chairwoman Waters. That is it.
    Mr. Key. Yes.
    Chairwoman Waters. All right. Mr. Freeman?
    Mr. Freeman. During demolition, we had 23 Section 3, that 
was 87 percent of all demolition staff on site. During 
construction, we are at 55 percent of new hires, which is 12 
Section 3. Overall, which includes community supportive 
services, we are at 79 percent, which is 58 Section 3 hires.
    Chairwoman Waters. What was that bottom line, 58?
    Mr. Freeman. Fifty eight, yes.
    Chairwoman Waters. Total, including the--
    Mr. Freeman. Community and support services.
    Chairwoman Waters.  --the 23, the ones on demolition?
    Mr. Freeman. It does include demolition.
    Chairwoman Waters. I beg your pardon?
    Mr. Freeman. It does include--
    Chairwoman Waters. And demolition is complete?
    Mr. Freeman. Demolition is complete.
    Chairwoman Waters. So 23 of the 58 are not working any 
more.
    Mr. Freeman. That may or may not be true. Some may be with 
some of the contractors.
    Chairwoman Waters. Well, tell me what is true.
    Mr. Freeman. I cannot tell you how many of the demolition 
were hired by--
    Chairwoman Waters. Okay. Well, we are going to have to get 
some oversight on these resident jobs and we are going to have 
to understand it a lot better.
    And our numbers have to be--yes, Ms. Marshall, what do you 
know? Maybe Ms. Marshall can help us out.
    Ms. Marshall. I do want to state as it relates to the 
demolition, we really did have to fight to get residents hired 
with the demolition process, because at first when that 
contractor came in there, there were no residents hired. We 
brought it to the attention of McCormack Baron Salazar and they 
addressed the situation and for many reasons that contractor 
was cut. So that issue was addressed, and as a result of that, 
we coordinated that construction training program.
    But there needs to be more enforcement with the contractors 
to have some kind of set rules in place that if they do not 
adhere to hiring Section 3 qualified individuals, you hold 
their money or something or the contract is cut.
    But as it relates to the C.J. Peete construction training 
program, we have had two training sessions thus far. Our next 
session is on September 28th. We have trained 33 individuals. 
Out of the 33, 22 new hires. We have exceeded the Section 3 
first hire mandate by 55 percent. Ten of the residents were 
C.J. Peete residents. We had three residents from B.W. Cooper. 
And when I stated that we are trying to coordinate with other 
sites, we recognize, we were awarded a whole big $20 million 
funding grant, so wherever we can help other residents at other 
sites, the goal is to train them and those developers hire them 
at that site. So those individuals--and we work very closely 
with B.W. Cooper and we are reaching out to other sites to send 
as many residents over so they can get those jobs on those 
sites as opposed to others.
    Chairwoman Waters. Thank you very much. This is a real bone 
of contention with me. I do not think that people who are 
unemployed should stand around and watch other people who come 
from every place else, working on their site where they used to 
live or where they are going to live, and not be hired. So that 
is a real problem that needs to be monitored and oversight 
needs to be done. And we will be talking about how we get that 
done.
    Now let me just move to this criteria that is being 
developed. How many of the developers have developed criteria 
that would require credit checks for people moving into these 
units?
    [Mr. Freeman raises his hand.]
    Chairwoman Waters. Why?
    Mr. Freeman. It is for all residents, not just public 
housing residents and it is--
    Chairwoman Waters. I do not care about all residents. All I 
want to know about is public housing residents right now.
    Mr. Freeman. It is just a check to make sure that folks are 
who they say they are and it is just another check to make sure 
that they are on the list properly with the housing authority.
    Chairwoman Waters. Well, if you are vetting to see if 
people are who they say they are, there are a lot of ways to do 
that. But one of the things I have a real problem with is 
people being denied because they have credit problems. If you 
are poor, you have credit problems. And I do not want people 
denied because they have credit problems. So what do you use 
this information for?
    Mr. Freeman. We do not deny residents because they have 
credit problems. If there are things on their credit that makes 
it hard for them to get utilities, they work with the case 
management in the community center, which works with them 
through those credit agencies and we work with them well before 
lease up to make sure that they are ready for occupancy and can 
get utilities in their name and they are ready to move into the 
units.
    Chairwoman Waters. It is great if you are helping people 
with utilities, but again, I am adamantly opposed to the 
refusal of rental units to people who have poor or weak credit.
    Let me also ask about this work requirement. You have work 
requirements, Mr. Grauley?
    Mr. Grauley. The documents that we have with HANO have a 
work requirement for head of household and co-head of household 
for all the residents of--
    Chairwoman Waters. This is not a move-to-work housing 
authority.
    Mr. Grauley. I am not aware that it is. But this was part 
of our application from the outset, it was part of what we 
reviewed with HANO and with HUD and part of what was adopted as 
part of the management plan, the regulatory and operating 
agreement, etc.
    Chairwoman Waters. That is being challenged in one of our 
advocacy groups that was here today. The Advancement Project is 
looking at this issue. And we will follow up on it.
    What about Enterprise, do you have credit requirements and/
or work requirements?
    Ms. Whetten. As I understand it, as mandated by HUD or HANO 
policy, credit checks are conducted only on applicants who have 
a prior history of rent payment issues with the Housing 
Authority of New Orleans. Beyond that, we do not conduct credit 
checks.
    And we do not have a work requirement.
    Chairwoman Waters. And the credit check is on residents who 
had previous problems with paying their rent?
    Ms. Whetten. That is my understanding, yes.
    Chairwoman Waters. Do you understand that even if there 
were residents who had previous problems paying their rent, 
unless they were evicted, they should be eligible?
    [no response]
    Chairwoman Waters. You do not know that either. Do not 
worry.
    Mr. Key?
    Mr. Key. As I mentioned earlier, we have yet to create 
our--
    Chairwoman Waters. I cannot hear you.
    Mr. Key. We have yet to create our structure for rental 
policy. We will be working with the residents, the investor, 
and HANO to do so.
    Chairwoman Waters. You are smart, Mr. Key. Work with the 
residents.
    Mr. Freeman?
    Mr. Freeman. We do not have a work requirement.
    Chairwoman Waters. Good.
    I reviewed some of the identified requirements and it 
appeared to be almost hearsay. Information that has been 
presented by somebody sometime somewhere about somebody's 
character. Do you have such loose requirements, Mr. Freeman?
    Mr. Freeman. Character? No.
    Chairwoman Waters. Run down your requirements for me.
    Mr. Freeman. We do not have those loose requirements.
    Chairwoman Waters. What requirements do you have?
    Mr. Freeman. We do have the same screening process that 
HANO requires.
    Chairwoman Waters. I do not know what it is. I want you to 
tell me.
    Mr. Freeman. To verify that they are eligible for public 
housing. We do criminal background checks.
    Chairwoman Waters. Okay. What else?
    Mr. Freeman. And the credit checks.
    Chairwoman Waters. Okay. Do you send people out to visit 
folks to view their living conditions before they can move in?
    Mr. Freeman. Yes, all residents do receive a home visit.
    Chairwoman Waters. Is this what the residents told you they 
wanted you to do?
    Mr. Freeman. This was in consultation with the residents 
and they did not object to it.
    Chairwoman Waters. I did not ask if they objected. I asked 
if they told you this is what they wanted.
    Mr. Freeman. That is my understanding, but I will let Ms. 
Marshall speak for herself.
    Chairwoman Waters. Ms. Marshall, is that part of the 
requirements that residents helped to develop, that there be 
home visits to determine whether or not people should get 
units?
    Ms. Marshall. Yes. That is something that we actually 
proposed to the resident council and we thought the residents 
were really going to have a fit with that. But it was presented 
to residents at our community meeting and to my surprise, you 
know, a few residents asked questions in regard to it, but we 
consult with legal every day basically and legal is at the 
table and one of the things I asked legal was if someone may be 
living somewhere and their living conditions are not up to par, 
legally can they deny that resident to return. And the answer 
is no, so I do not know--
    Chairwoman Waters. What do you know about this, Ms. 
Johnigan?
    Ms. Johnigan. About what--
    Chairwoman Waters. About what you guys--you said they 
developed their criteria in conjunction with the residents. Did 
you all require or are you going to require or have you 
required that there be a home visit before people can get a 
unit?
    Ms. Johnigan. Because we still have families on site, we go 
out to visit the home. That has been a part of our process, to 
look at it to make sure that the resident--that the work that 
we have done, that the residents are still living in safe and 
sanitary conditions.
    Chairwoman Waters. Did I not visit you at your home?
    Ms. Johnigan. Yes, you did.
    Chairwoman Waters. I was at your house. I understand how 
the residents--you are strong over there.
    Ms. Johnigan. Yes.
    Chairwoman Waters. I remember that.
    Ms. Johnigan. But I have a smaller apartment now.
    Chairwoman Waters. I thought they were expanding your 
apartment when I was there?
    Ms. Johnigan. I moved to a smaller apartment.
    Chairwoman Waters. Oh, I see, okay, all right. I remember, 
yes.
    Ms. Johnigan. But anyway, what we have to do is--that is a 
part of what we do, to make sure that the work we have done 
when we redid it, that our residents are keeping their 
apartments up to par. So that when something happens, it is 
nothing that we have done. Okay? So when we get ready to start, 
this is something that Mr. Key, and we were in a retreat 
yesterday talking about how we are going to go about putting 
the new lease together and what are the requirements going to 
be.
    Chairwoman Waters. Would you come up with a requirement 
that if someone's home has not been kept up in a way that you 
would want it to be kept up and thus they would be denied a 
unit?
    Ms. Johnigan. No, let me go back and tell you why it makes 
it so unique for the relationship that we have. We have told 
Mr. Key, they have been out there and looked, some of the 
apartments have people living in them we already know have one 
bedroom. So if you go in and you see different things here and 
there, that is because that one bedroom is still not 
comfortable enough for a person to live in. So when you go in, 
do not think that person cannot pick up, it is the fact that 
there is no closet space, no kitchen space, no bedroom space. 
So there are boxes in corners and things like that. Cleanliness 
means if you go in and there is a greasy stove that you can use 
without even lighting a match are things that are 
inappropriate. But no, when we talk about coming in, you have 
to look at the situation they are in now. Even under Section 8 
housing, if they go look, you have to look at the way that 
house is too.
    Chairwoman Waters. All right. I think I saw several 
instances where you talked about resident councils or advocates 
who are going to be a part of the development, who will truly 
have the opportunity to speak for the residents and be involved 
in decision-making. The formulation of the resident councils or 
resident involvement now should be just that. If it is not, is 
there something else we need to do in order to ensure that 
there are well organized resident councils and involvement? I 
think Ms. Mingo, you said nobody pays any attention to what you 
say anyway.
    Ms. Mingo. No.
    Chairwoman Waters. And that you do not feel as if you have 
the ability to influence these decisions. What do we need to do 
to strengthen the resident council?
    Ms. Mingo. First of all, the developer needs--they need to 
start building a relationship and stop ignoring and neglecting. 
I was one of the very first persons on the ground when they 
tore down the first brick in St. Bernard. They went straight 
non-stop because we were so strong trying to stop them. To my 
knowledge, and I was there, we never had any job training, we 
have no more than five residents working on that ground.
    If you ask Mr. Grauley or one of his colleagues a question 
when we are--I have so much anger in me with them, but when I 
go to their meetings to ask them to break it down--because some 
of the stuff they are talking about, really I do not understand 
it. So I try to break it down to the same level with me and a 
resident. But if you ask them and you make them angry--we have 
residents right now that was here with me at that meeting. They 
will walk out on you. And the whole meeting will be shut down. 
I went to the last meeting so I asked Mr. Grauley or one of his 
colleagues who is sitting four rows back to explain what 
straight public housing is and what tax credit public housing 
is. So first I asked a resident and she said well, she told me, 
he told me. I said no, they did not explain it the way for you 
to understand. So the next time we went to a meeting, they 
didn't explain it because I walked out, I was so mad. So it was 
a big old thing, but after I explained it some kind of way, 
they explained it the right way.
    And she got very angry because when they explained it, they 
said oh, no, there are 157 public housing residents, straight 
public housing residents can return. Columbia, they talked to 
probably one person who used to be on HANO's board, but people 
who are on the ground who are fighting that are not getting 
picked, they totally ignore. The only way we will get 
attention, we have to bring 50 and 60 people to get attention. 
And if you bring that, you are cut out, period.
    We do not have job training. When they demolished the 
buildings, everybody came running to me because they know we 
are out here, we were requesting jobs for them. We even went up 
to HANO building, all the people who sent them and when they 
went, they said oh, no, we have to put you on another site. I 
do not care what site you put them on. Like Ms. Jocquelyn was 
saying, as long as you are a public housing resident and you 
get on a site to help rebuild this. I never asked for a job 
with this because I do not want a job, I have a job. I do not 
want anybody to dictate to me, I will fight and say what comes 
from my heart.
    Chairwoman Waters. So from your point of view, Mr. Grauley 
is not all that he says he is, is that right?
    Ms. Mingo. No. I never--this my first time meeting Mr. 
Grauley--this is my first time seeing him.
    Chairwoman Waters. Okay.
    Ms. Mingo. This is my first time ever seeing him. You 
cannot hold a conversation with staff, because if you don't 
understand while they read through their list, they act like 
you are not even there.
    Chairwoman Waters. Do you have some people you want to 
report to him who have treated you in the fashion that you are 
describing? Do you have some names you want to give him so he 
can see if he can correct this?
    Ms. Mingo. Well, he can talk to Monica in the back. When 
you are sitting up in a meeting and you ask her a question, she 
[motions].
    Chairwoman Waters. Which one is she?
    Ms. Mingo. She rolls her eyes.
    Chairwoman Waters. Is she here?
    Ms. Mingo. Right there, yes.
    Chairwoman Waters. Really?
    Ms. Mingo. She will not talk to you. And there is another 
guy, I forgot his name. I tell you, I have so much anger. When 
you had a mother who died in Katrina because she wanted to come 
to St. Bernard--these people do not do any training. They say 
they have 50, you go count them. People across the street from 
public housing by the grocery store watch as others take jobs 
that rightfully belong to surrounding communities. Now I do not 
have a problem with the people who are working, but I do have a 
problem when St. Bernard residents come and ask you and beg for 
the crumbs, can we pick up a brick? When St. Bernard was down, 
public housing did not pick up any bricks. The only reason why 
I have two St. Joseph bricks is I went in and I got some St. 
Joseph bricks. And I can tell you a lot of other St. Bernard 
residents went up to save St. Joseph brick for remembering. St. 
Bernard is not like that and that is why what Jocquelyn was 
saying, that is good and I recommend her and I love her, but 
only if they can start by building a relationship and stop 
ignoring us, maybe me and the others, we would not be so angry. 
Because I know when I said my testimony, I know you can hear 
the anger in me. They do not tell you anything, they do not 
want to talk to you. We just had our own job fair, one of these 
guys, I do not know his name, but somebody in the audience 
knows his name.
    Chairwoman Waters. Okay, I get it. Now obviously you need 
to develop a relationship. No matter what you say, the only 
thing that is true is the fact that they do not feel, and Ms. 
Mingo does not feel, that you have the kind of working 
relationship that is respectful. So you all need to work that 
out.
    Let me ask Mr. Grauley, do you have any minority joint 
venture partners in your development? Minority partners in your 
development.
    Mr. Grauley. Well, we have--
    Chairwoman Waters. Minority partners.
    Mr. Cao. As part of the development team?
    Chairwoman Waters. Yes.
    Mr. Grauley. Columbia Residential is--
    Chairwoman Waters. I beg your pardon?
    Mr. Grauley. Columbia Residential is a minority-owned 
business, we have numerous contractors--
    Chairwoman Waters. No, no, I am not asking about the 
contractors now, those are the people that you employ. I am 
asking about your development company, do you have minority 
partners?
    Mr. Grauley. Yes, Columbia Residential is a--
    Chairwoman Waters. I beg your pardon?
    Mr. Grauley. Columbia Residential is a minority-owned 
business enterprise.
    Chairwoman Waters. Oh, it is?
    Mr. Grauley. Yes, it is, ma'am.
    Chairwoman Waters. And who are the minorities?
    Mr. Cao. Noel Khalil is the founder and chairman.
    Chairwoman Waters. Who is?
    Mr. Grauley. Noel Khalil is the founder and chairman and 
built the company over the past 17 years. He does not wear his 
minority status on his sleeve at all, but it is the truth about 
our company.
    Chairwoman Waters. We will check it out.
    What about Enterprise, do you have minority partners? 
Everybody at Enterprise is minority, right?
    Ms. Whetten. Well, obviously, that is not the case. No, if 
you are asking just the members of the development team, the 
co-developers, we do not.
    Chairwoman Waters. You do not. Mr. Key, obviously you are 
the CEO of the company. Did you joint venture with any other 
minorities?
    Mr. Key. No. We partnered with the BWCRMC, they are our 
partners.
    Chairwoman Waters. Okay, Mr. Freeman, what about you guys, 
McCormack Baron Salazar, do you have minority partners?
    Mr. Freeman. Tony Salazar is the minority partner in the 
firm and we partnered with KAI Design and Build.
    Chairwoman Waters. What is your partner?
    Mr. Freeman. KAI Design and Build.
    Chairwoman Waters. In St. Louis?
    Mr. Freeman. Yes, ma'am.
    Chairwoman Waters. Okay, we will check it all out and see 
what is happening with these developers.
    You have something you are just dying to say, Mr. Grauley. 
What is that?
    Mr. Grauley. I would just like to respond to Ms. Mingo. I 
appreciate the anger that she has, but the fact is that we do 
meet regularly, we do review with the resident council, who are 
the resident leaders, not represented right here. On a regular 
basis, we have met over the past 2 years as part of the design. 
There are a lot of questions that come up, and we try to 
respond to those. I have met Ms. Mingo, I met her first in July 
of last year at a meeting. We also have responded to her letter 
of June to the housing authority. And so I just wanted to set 
that straight. We take it very seriously and we are trying to 
work with the residents.
    There are concerns that are raised, there is not always 
agreement and obviously we would like to do better with that, 
but to state that we do not hear and to state that our staff is 
not trying to hear the concerns of residents, I just wanted to 
put that straight.
    Chairwoman Waters. As I said, you obviously need to develop 
a better working relationship. Ms. Mingo would not be here in a 
public meeting with these complaints and this kind of anger if 
she was happy, or if she was satisfied, or if she thought you 
had done your best. So it is on you to do what you can to 
develop a better relationship and have the people who work for 
you treat people respectfully and answer their questions and 
who do not snub or turn up their noses at them. That is just 
not acceptable and it leads to problems.
    So I hope you take her concerns seriously.
    Thank you all for being here today. You have helped me so 
much.
    And I guess I have some things I have to do here.
    Some members who have participated here with me 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.
    And before we adjourn, the written statement of Mr. Sam 
Jackson will be made a part of the record of this hearing.
    With that, I think I have complied with all that I must 
comply with. And this hearing is adjourned. Thank you so very, 
very much. Thank you for your participation.
    [Whereupon, at 2:25 p.m., the hearing was adjourned.]





















                            A P P E N D I X



                            August 21, 2009

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

