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

                             H.R. 476, THE HOUSING
                              FAIRNESS ACT OF 2009

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

                                    HEARING

                                   BEFORE THE

                                SUBCOMMITTEE ON
                       HOUSING AND COMMUNITY OPPORTUNITY

                                     OF THE

                        COMMITTEE ON FINANCIAL SERVICES

                         U.S. HOUSE OF REPRESENTATIVES

                         ONE HUNDRED ELEVENTH CONGRESS

                                 SECOND SESSION

                                   __________

                                JANUARY 20, 2010

                                   __________

           Printed for the use of the Committee on Financial Services

                               Serial No. 111-96

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                     HOUSE COMMITTEE ON FINANCIAL SERVICES

                     BARNEY FRANK, Massachusetts, Chairman

    PAUL E. KANJORSKI, Pennsylvania      SPENCER BACHUS, Alabama
    MAXINE WATERS, California            MICHAEL N. CASTLE, Delaware
    CAROLYN B. MALONEY, New York         PETER T. KING, New York
    LUIS V. GUTIERREZ, Illinois          EDWARD R. ROYCE, California
    NYDIA M. VELAZQUEZ, New York         FRANK D. LUCAS, Oklahoma
    MELVIN L. WATT, North Carolina       RON PAUL, Texas
    GARY L. ACKERMAN, New York           DONALD A. MANZULLO, Illinois
    BRAD SHERMAN, California             WALTER B. JONES, Jr., North
    GREGORY W. MEEKS, New York               Carolina
    DENNIS MOORE, Kansas                 JUDY BIGGERT, Illinois
    MICHAEL E. CAPUANO, Massachusetts    GARY G. MILLER, California
    RUBEN HINOJOSA, Texas                SHELLEY MOORE CAPITO, West
    WM. LACY CLAY, Missouri                  Virginia
    CAROLYN McCARTHY, New York           JEB HENSARLING, Texas
    JOE BACA, California                 SCOTT GARRETT, New Jersey
    STEPHEN F. LYNCH, Massachusetts      J. GRESHAM BARRETT, South Carolina
    BRAD MILLER, North Carolina          JIM GERLACH, Pennsylvania
    DAVID SCOTT, Georgia                 RANDY NEUGEBAUER, Texas
    AL GREEN, Texas                      TOM PRICE, Georgia
    EMANUEL CLEAVER, Missouri            PATRICK T. McHENRY, North Carolina
    MELISSA L. BEAN, Illinois            JOHN CAMPBELL, California
    GWEN MOORE, Wisconsin                ADAM PUTNAM, Florida
    PAUL W. HODES, New Hampshire         MICHELE BACHMANN, Minnesota
    KEITH ELLISON, Minnesota             KENNY MARCHANT, Texas
    RON KLEIN, Florida                   THADDEUS G. McCOTTER, Michigan
    CHARLES A. WILSON, Ohio              KEVIN McCARTHY, California
    ED PERLMUTTER, Colorado              BILL POSEY, Florida
    JOE DONNELLY, Indiana                LYNN JENKINS, Kansas
    BILL FOSTER, Illinois                CHRISTOPHER LEE, New York
    ANDRE CARSON, Indiana                ERIK PAULSEN, Minnesota
    JACKIE SPEIER, California            LEONARD LANCE, New Jersey
    TRAVIS CHILDERS, Mississippi
    WALT MINNICK, Idaho
    JOHN ADLER, New Jersey
    MARY JO KILROY, Ohio
    STEVE DRIEHAUS, Ohio
    SUZANNE KOSMAS, Florida
    ALAN GRAYSON, Florida
    JIM HIMES, Connecticut
    GARY PETERS, Michigan
    DAN MAFFEI, New York

            Jeanne M. Roslanowick, Staff Director and Chief Counsel
               Subcommittee on Housing and Community Opportunity

                     MAXINE WATERS, California, Chairwoman

    NYDIA M. VELAZQUEZ, New York         SHELLEY MOORE CAPITO, West
    STEPHEN F. LYNCH, Massachusetts          Virginia
    EMANUEL CLEAVER, Missouri            THADDEUS G. McCOTTER, Michigan
    AL GREEN, Texas                      JUDY BIGGERT, Illinois
    WM. LACY CLAY, Missouri              GARY G. MILLER, California
    KEITH ELLISON, Minnesota             RANDY NEUGEBAUER, Texas
    JOE DONNELLY, Indiana                WALTER B. JONES, Jr., North
    MICHAEL E. CAPUANO, Massachusetts        Carolina
    PAUL E. KANJORSKI, Pennsylvania      ADAM PUTNAM, Florida
    LUIS V. GUTIERREZ, Illinois          KENNY MARCHANT, Texas
    STEVE DRIEHAUS, Ohio                 LYNN JENKINS, Kansas
    MARY JO KILROY, Ohio                 CHRISTOPHER LEE, New York
    JIM HIMES, Connecticut
    DAN MAFFEI, New York

                                C O N T E N T S

                                  ----------
                                                                       Page
    Hearing held on:
        January 20, 2010.............................................     1
    Appendix:
        January 20, 2010.............................................    31

                                   WITNESSES
                          Wednesday, January 20, 2010

    Berenbaum, David, Chief Program Officer, National Community
      Reinvestment Coalition (NCRC)..................................    19
    Delgado, Jeanne McGlynn, Vice President, Business Operations &
      Risk Management Policy, National Multi Housing Council/National
      Apartment Association..........................................    20
    Gilmore, Brian, Clinical Professor & Staff Attorney, Howard
      University School of Law, Fair Housing Clinic..................    22
    Proll, Leslie M., Director, Washington Office, NAACP Legal
      Defense & Educational Fund, Inc./Co-Chair of the Leadership
      Conference on Civil Rights Fair Housing Task Force.............    17
    Smith, Shanna L., President and Chief Executive Officer, National
      Fair Housing Alliance..........................................    15
    Trasvina, Hon. John D., Assistant Secretary for Fair Housing and
      Equal Opportunity, U.S. Department of Housing and Urban
      Development....................................................     5

                                    APPENDIX

    Prepared statements:
        Berenbaum, David.............................................    32
        Delgado, Jeanne McGlynn......................................    63
        Gilmore, Brian...............................................    70
        Proll, Leslie M..............................................    76
        Smith, Shanna L..............................................    96
        Trasvina, Hon. John D........................................   110

                  Additional Material Submitted for the Record

    Green, Hon. Al:
        Letter from Shanna L. Smith, President and CEO, the National
          Fair Housing Alliance (NFHA), dated January 19, 2010.......   119

                             H.R. 476, THE HOUSING
                              FAIRNESS ACT OF 2009

                                  ----------

                          Wednesday, January 20, 2010

                 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 10:15 a.m., in
    room 2128, Rayburn House Office Building, Hon. Maxine Waters
    [chairwoman of the subcommittee] presiding.
        Members present: Representatives Waters, Velazquez,
    Cleaver, Green, Donnelly, Kanjorski, Himes; Capito, Marchant,
    Jenkins, and Lee.
        Also present: Representative Garrett.
        Chairwoman Waters. This hearing of the Subcommittee on
    Housing and Community Opportunity will come to order.
        I would like to thank the ranking member and other members
    of the Subcommittee on Housing and Community Opportunity for
    joining me today for this hearing on H.R. 476, the Housing
    Fairness Act of 2009. Today's hearing will examine Congressman
    Al Green's very important legislation to enhance efforts to
    combat housing discrimination.
        Despite our progress in achieving greater civil rights over
    the past 40 years, the trend of depriving certain communities
    of access to fair housing continues today. Mr. Green's bill
    allows us to finally assess the rampant rates of housing
    discrimination, and will fully fund and establish a Federal
    program to process fair housing violations.
        Today, we will hear from witnesses about the ongoing
    disparities in housing, and the challenges with addressing
    housing discrimination. The witnesses will also discuss how
    H.R. 476 will help them to address these challenges.
        According to a Department of Housing and Urban Development
    report released last year, more Americans are reporting
    incidents of housing discrimination than ever before, with
    disability and race as the leading reasons for filing a
    complaint.
        Despite the growing number of fair housing violations, a
    much greater number of violations go unreported. The National
    Fair Housing Alliance estimates that approximately 4 million
    fair housing violations occur each year, yet less than 31,000
    fair housing complaints were actually filed in 2008, which was
    the highest total number of complaints ever filed in history.
        Furthermore, of those housing violations that were
    reported, private, nonprofit fair housing groups processed
    approximately 20,000 complaints, which was 66 percent of the
    total complaint load. Meanwhile, HUD processed a mere 2,100
    complaints, State and local agencies processed 8,429, and the
    Department of Justice filed 33 fair housing cases. It is clear
    that Federal agencies have either been unable or unwilling to
    effectively identify and address the issue of housing
    discrimination.
        Little has been done to ensure fair and equal access to
    housing among minority populations. We know that high rates of
    racial steering continue to impact African-American and Latino
    communities. Furthermore, a HUD study found that Asian
    Americans and Pacific Islanders also face significant level of
    discrimination when they search for housing in large
    metropolitan areas nationwide. Much more must be done to
    protect the fair housing rights of all of our communities.
        The Federal Fair Housing Initiatives Program (FHIP) was
    established to provide grants to fair housing centers to
    enforce housing laws and educate consumers. However, FHIP has
    never been fully funded. Thus, it is no wonder that so many
    fair housing violations were allowed to occur each year. That
    is why Mr. Green's bill is so crucial.
        H.R. 476 would authorize $20 million annually for HUD to
    administer a nationwide testing program to measure housing
    discrimination, increase funding of the FHIP program to $52
    million annually for 5 years, and require HUD to implement a
    competitive matching grant program for nonprofits to study the
    causes and effects of housing discrimination. The benefits of
    H.R. 476 would be tremendous in preventing millions of fair
    housing violations from taking place in our neediest
    communities.
        In closing, I look forward to hearing from our two panels
    of witnesses on their assessment of H.R. 476, to help further
    fair housing and combat housing discrimination.
        I would now like to recognize our subcommittee's ranking
    member to make an opening statement. Ms. Capito?
        Mrs. Capito. Thank you. I would like to thank the
    chairwoman for the hearing today, and Representative Green for
    his hard work on this issue.
        I would like to enter my statement into the record rather
    than giving it, in the interests of time. But I would also like
    to ask unanimous consent that Congressman Garrett be allowed to
    sit in on the committee. And he is going to make an opening
    statement as well.
        Chairwoman Waters. Thank you very much. I would now like to
    recognize--without objection, it is so ordered.
        Mrs. Capito. Thank you.
        Mr. Garrett. Did the ranking member have a statement that
    she was--
        Mrs. Capito. I yield the rest of my time to you.
        Mr. Garrett. Oh, okay. I thank you for yielding, and I
    thank you for the opportunity to be here. And I also first and
    foremost want to commend Representative Green on offering this
    very important legislation, and I look forward to the
    discussion that ensues.
        But I also want to formally express my concern regarding
    another housing issue that we should be considering as well,
    and that is the bailout of Fannie Mae and Freddie Mac. You
    know, it was just on Christmas Eve when the Obama
    Administration and the Treasury Department expanded and
    extended the bailouts of Fannie Mae and Freddie Mac, and they
    approved a multi-million-dollar compensation package for their
    executives. And the CBO, as we sit here, is currently
    projecting losses of over $400 billion for those entities.
        So when all is said and done, when you think about it and
    we are considering where all this money is going to, the
    bailout of these firms will probably be more expensive than
    what we spent on TARP.
        Now, since Fannie and Freddie were bailed out, we have had
    here in this committee room exactly one full committee hearing
    on the subject, and exactly one subcommittee hearing on this
    issue. Some people have said that this committee therefore has
    been negligent in its oversight responsibilities on this very
    important topic.
        And shortly thereafter, on December 30th, Ranking Member
    Bachus and I wrote a letter to the chairman simply asking him
    to hold a hearing on this issue. Unfortunately, he has not yet
    responded to that request.
        I understand that this topic may cause discomfort to some
    Members of Congress, considering the role that they played in
    shielding the GSEs from any meaningful regulatory scrutiny in
    the period leading up to their collapse. Nonetheless, we should
    not let mistakes of the past prevent us from carrying out our
    oversight responsibilities now going forward.
        I also asked the chairman--the chairman has announced a
    hearing on executive compensation, and that is set for this
    Friday. But apparently, he still refuses the request from
    Ranking Member Bachus to have the heads of Fannie and Freddie
    come to that very important hearing.
        The chairman has also stated, ``The public, having provided
    significant support for the purposes of restoring trust and
    confidence in our country's financial system, rightfully
    insists that large bonuses such as these awarded by
    institutions receiving public funds at a time of serious
    economic downturn should not continue.'' And I agree.
        So in conclusion, as I have heard from many of my
    constituents back home, it is really unacceptable that this
    committee not respond appropriately. And so, once again, I will
    call on the chairman to hold a hearing on this Administration's
    expanded bailout of Fannie Mae and Freddie Mac, and their
    approval of millions of dollars of taxpayers' dollars to
    bonuses to their executives, an issue overarching the issue of
    housing and fairness to the American taxpayer and to the
    American buyer of homes as well.
        And with that, I yield back.
        Chairwoman Waters. Thank you very much.
        Mr. Green, for 5 minutes.
        Mr. Green. Thank you, Madam Chairwoman. And I thank the
    Ranking Member as well. I would also like to thank the many
    Members of Congress who have been working on fair housing
    issues before 1968, at the time of Dr. King's demise, since
    1968, and in fact, during that year of 1968 because that is
    when the first laws were promulgated. And many have also worked
    since that time.
        As you know, the Fair Housing Act was amended in 1974 to
    include sex discrimination. It was amended in 1988 to deal with
    discrimination based upon family status, familial status. And
    these Members I salute and I thank for what they have done to
    help make this piece of legislation much better than it was at
    the time it was initially developed.
        I would like to mention HUD, because HUD has played an
    important role in this. HUD acquires intelligence and empirical
    evidence such that we can draw conclusions. I would like to
    note that HUD has data indicating that in 2008, 10,552 housing
    discrimination complaints were received. And this was the
    highest number ever received in 2008. It is also interesting to
    note that this was the third year in a row that there were more
    than 10,000 complaints received.
        We should not assume that all of these complaints have been
    based upon color. The truth of the matter is that only 2
    percent were based upon color. This bill could easily be called
    the Disability Fairness Act because 44 percent of those
    discriminated against were persons with disabilities.
        And I would add also that it could easily be called the
    Familial Status Act, because 16 percent of those discriminated
    against were persons who had children, possibly, and could not
    get a place to live because they happened to have a child.
        This bill is very inclusive in terms of how it impacts
    discrimination in housing. And I would hope that persons would
    embrace the notion that we are helping all persons by helping
    the persons who are so designated by the legislation. When you
    help one person, you prevent discrimination against other
    people. It is important for us to remember that this bill is
    very inclusive in terms of how it deals with discrimination.
        It is estimated that about 4 million violations occur each
    year, and 44 percent of these violations were handled by HUD.
    And the question becomes, ultimately, what can we do, working
    with HUD and NGOs, to ensure housing fairness?
        My belief is that we can increase the amount that we spend
    on education. Education is important. Many persons who are
    working in this marketplace, in the housing market, would do
    and behave differently if educated properly. We have to ensure
    that persons understand what the rules are, and my belief is
    that a good number of them will adhere to the rules,
    understanding what they are.
        We should also increase the testing and the enforcement of
    the rules once we find that there are persons who have violated
    the rules. Testing is the best way known to us to acquire the
    empirical evidence of discrimination actually taking place such
    that we can have an actionable means by which we can address
    the discrimination.
        We must do more testing, and we have to publish the fact
    that testing takes place. Testing can also act as a deterrent
    to prevent others from behaving improperly once it is known
    that testing is actually taking place.
        What is testing? Simply put, you send persons out, all
    equally qualified. And if you have some persons who are
    consistently rejected--perhaps a person who is disabled--then
    you can sense that you have a problem with a person with a
    disability as it relates to this particular piece of property.
    Testing really does work. We should do more testing.
        We can also increase the funding for not-for-profit housing
    organizations to engage in investigations, and to also help us
    to understand the real reasons for this discrimination. If we
    don't acquire the empirical evidence to properly make the case
    for why this is happening, it makes it difficult to continue to
    enforce the laws and to develop the proper regulations to
    address the problem.
        We would like to see NGOs have the opportunity to
    promulgate, if you will, testing not only to determine what
    happened but why it is happening. I would also add that we
    should acquire the empirical evidence to understand how all of
    this impacts economic stability.
        There is a body of evidence indicating that economic
    stability was impacted by virtue of the behavior of persons in
    the subprime market in terms of the way they steered persons
    into these loans. I would hope that we could examine this as
    well.
        Thank you, Madam Chairwoman, and I yield back the balance
    of my time.
        Chairwoman Waters. Thank you very much. There are no other
    members desiring to give opening statements at this point.
    Without objection, Representative Garrett will be considered a
    member of the subcommittee for the duration of this hearing.
        At this time, I will introduce our first witness panel. I
    am pleased to welcome our distinguished first panel. Our first
    witness will be the Honorable John Trasvina, Assistant
    Secretary for Fair Housing and Equal Opportunity, U.S.
    Department of Housing and Urban Development.
        Thank you for appearing before the subcommittee today. And
    without objection, your written statement will be made a part
    of the record.
        You will now be recognized for a 5-minute summary of your
    testimony.

        STATEMENT OF THE HONORABLE JOHN D. TRASVINA, ASSISTANT
        SECRETARY FOR FAIR HOUSING AND EQUAL OPPORTUNITY, U.S.
              DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

        Mr. Trasvina. Good morning, Chairwoman Waters, and thank
    you, members of the subcommittee. I am pleased to appear before
    you today on behalf of HUD to discuss our support of and
    recommendations for H.R. 476, the Housing Fairness Act of 2009,
    and the Department's fair housing enforcement program and
    priorities.
        And Congressman Green, in particular, I would like to thank
    you for your tremendous support of fair housing and the fair
    housing initiatives program, and for proposing H.R. 476.
        Thank you, members, for this opportunity to discuss the
    Department's work with private, nonprofit fair housing
    organizations. They are crucial to our mission to create and
    support fair and equitable communities.
        Last year, as was noted, more than 10,000 fair housing
    complaints were filed with the Department, continuing an
    historical high level. However, we know that the number of
    complaints is not a full measure of the extent of
    discrimination.
        Our studies show that even in this day and age, African
    Americans and Hispanics and Asian Americans suffer
    discrimination at least 1 in 5 times that they seek housing.
    Our work and the work of FHIP agencies remains critical.
        The number of cases does not reflect their severity,
    either. One current HUD case has been brought against a trailer
    park owner in Alabama who turned off the water and forced out a
    White family because he objected to the African-American
    boyfriend of one of the tenants. When asked how to get the
    water back on, he responded, ``Lose the Black boyfriend.''
        In addition, he told our investigator that no Federal law
    would tell him who he had to rent to. Well, today your landlord
    cannot tell you who you date, and we vigorously enforce Fair
    Housing Act protections.
        In order to realize fair housing and equal opportunity, we
    need to go farther than we have before and work to create truly
    open and integrated communities. That means not only continuing
    to address specific acts of discrimination, but also using fair
    housing laws to strengthen neighborhoods.
        One way we are doing this is by fulfilling the Fair Housing
    Act's mandate to affirmatively further fair housing. HUD has
    not always ensured that our money is spent in ways that fulfill
    this obligation.
        In this new day, however, there is a Department-wide
    commitment to incorporate our mandate to affirmatively further
    fair housing and to all of our work so that we can fulfill our
    shared goal of truly integrated and balanced living patterns.
    To that end, the Department is revising these regulations.
        In July, the Department held a listening conference in
    which more than 600 people participated, in person and by phone
    and Web across the country. There, fair housing and civil
    rights groups, mayors, and county and State officials all
    voiced their desire for HUD to amend its regulations to provide
    more concrete, specific information and assistance about how to
    develop a meaningful plan for affirmatively furthering fair
    housing.
        Efforts to affirmatively further fair housing are
    incomplete without ensuring that the public has a means of
    redress when their rights are violated. That is why the Fair
    Housing Act complaints are one of our top priorities.
        Individual victims of housing discrimination have an
    immediate need for HUD's fair housing services. The Department
    and its State and local partners in the Fair Housing Assistance
    Program provide these victims with a fair, objective, and free
    investigation of complaints.
        Over the last decade, the Department has become more adept
    at investigating housing discrimination. The number of cases
    completed by the Department and our State and local partners
    has increased by 65 percent, while the length of investigations
    has decreased.
        However, speed must not come at the expense of accuracy.
    Discrimination victims are not served by a piece of paper
    saying they have a good case filed with the government. They
    want action. At the same time, complainants and respondents
    want and deserve the right outcome, not simply a quick one.
        Thirty-eight percent of our complaints closed last year
    resulted in a determination on the merits, or a conciliation or
    settlement agreement. This produced $8.155 million in monetary
    relief, as well as public interest provisions such as fair
    housing training and affirmative marketing.
        Today, as the scourge of housing discrimination continues,
    sometimes in old forms, sometimes in new, we must engage a
    variety of strategies to end these practices, and the FHIP
    program is central to this effort.
        Through the Fair Housing Initiative Program, fair housing
    organizations assist the Department in combating housing
    discrimination. These organizations investigate and resolve
    allegations brought to them by victims of housing
    discrimination, but they do so in a way that is different and
    complimentary to our work.
        FHIP grantees are the Nation's experts in testing, and the
    results of these tests often become key evidence in a housing
    discrimination complaint. A recent major settlement on rental
    design and construction and access for people with disabilities
    was made possible in part by the work of HUD-funded tests.
        You have invited me here today to discuss our fair housing
    strategy and H.R. 476. If enacted, it would provide much-needed
    support for fair housing efforts across the country through
    increased testing for violations, enforcement against those who
    have violated fair housing laws, and study of the causes and
    effects of discrimination.
        The first section of the bill requires HUD to conduct a
    nationwide testing program to detect, document, and measure
    housing discrimination across the country. We fully support
    this proposal. Housing discrimination today is often more
    subtle, and a consumer is not well-positioned to make
    meaningful comparisons of treatment.
        Pair testing, however, is ideally suited to uncover such
    abuses. The $20 million nationwide testing program envisioned
    by this bill would lead not only to greater enforcement
    efforts, but also would deter discrimination.
        On the whole, H.R. 476 is consistent with the priorities
    the Department places on fair housing enforcement, and the
    tools provided by H.R. 476 will advance the Department's
    enforcement of the Nation's fair housing laws in the 21st
    Century.
        This week, as the Nation celebrates the birthday of Dr.
    Martin Luther King, we continue to carry out his dream to end
    housing discrimination. H.R. 476, if enacted, will enhance this
    further, and we look forward to working with the subcommittee
    on this important legislation.
        Thank you.
        [The prepared statement of Assistant Secretary Trasvina can
    be found on page 110 of the appendix.]
        Chairwoman Waters. Thank you very much for your testimony.
    I would like to begin the question period with you.
        If you will, would you please recount for us what happened
    in St. Bernard Parish in New Orleans? As I can recall, there
    were multiple laws developed by the local city council
    basically to keep minorities out of St. Bernard Parish. And
    they defied HUD. They defied the courts. This went on for such
    a long period of time.
        Now, I understand that it may be resolved at this point.
    But tell us what happened there.
        Mr. Trasvina. After Hurricane Katrina, the local government
    there enacted a number of ordinances which had the effect of
    making it difficult to rent to newcomers to the community. One
    ordinance would have required individuals who were prospective
    tenants to be blood relatives of those who already had lived in
    St. Bernard Parish.
        That was subject to litigation. It was struck down. Since
    that time, there have been other ordinances that have been
    proposed. We have worked with the fair housing organizations in
    the New Orleans area that have sued over a number of
    ordinances.
        Since that time, in recent months, we have met with the
    president of the council and other local officials there. So we
    have looked at individual potential acts of discrimination,
    also working with the jurisdiction to try to move forward on--
    away from that type of restriction because as you note, it was
    designed to limit the ability of people to rent in St. Bernard
    Parish.
        Chairwoman Waters. So do they still have an ordinance
    against multi-family development in St. Bernard Parish?
        Mr. Trasvina. There continue to be restrictions on renting,
    including requiring particular licenses in order to be able to
    rent out your home. And these licenses are restricted based
    upon--you can't have more than one rental being made available
    within a certain number of feet of another. There are pending
    discrimination complaints now with us, so we continue to
    investigate.
        Chairwoman Waters. Are we continuing to--do they get
    Federal funding in any way in St. Bernard Parish?
        Mr. Trasvina. We are looking at that very closely, and that
    is--
        Chairwoman Waters. This has been going on a long time,
    hasn't it?
        Mr. Trasvina. That is correct. The--
        Chairwoman Waters. So how much longer is it going to go on?
        Mr. Trasvina. The litigation, of which we are not a part,
    is continuing. The decision about funding and our expressions
    of where St. Bernard Parish needs to be is ongoing.
        Chairwoman Waters. Let me back up. As I understand it, one
    of the remedies or ways of dealing with discrimination is to
    discontinue Federal funding. Is that right?
        Mr. Trasvina. That is correct.
        Chairwoman Waters. And as far as I know, Katrina took
    place, what, almost 5 years ago? How long has it been?
        Mr. Trasvina. I believe it has been 4\1/2\ years.
        Chairwoman Waters. How long have you been involved--
        Mr. Trasvina. 4\1/2\ years ago.
        Chairwoman Waters. 4\1/2\ years ago.
        Mr. Trasvina. Yes.
        Chairwoman Waters. And this case or these cases have been
    going on for 4\1/2\ years?
        Mr. Trasvina. No. They haven't been going on for 4\1/2\
    years. Some of the initial litigation has been successful. So
    there have been a series of ordinances. The most recent
    ordinance was upheld, but we are working with St. Bernard
    Parish to ascertain the impact of the most recent ordinance.
        Chairwoman Waters. Do you want to tell me what you have
    done to stop discrimination in St. Bernard Parish?
        Mr. Trasvina. We have--
        Chairwoman Waters. What has HUD done?
        Mr. Trasvina. HUD has worked with the parish to evolve
    these ordinances away from the original ordinances. We are now
    examining the particular complaints that we have. We do not
    have a determination on the current ordinance right now.
        Chairwoman Waters. I don't know what you just said. But
    anyhow, you have not been successful yet in helping to contain
    the local city council in its efforts to prevent minorities
    from living in St. Bernard Parish. You just have not been
    successful.
        Mr. Trasvina. That is correct. We are not yet there, where
    we need to be. And--
        Chairwoman Waters. So how can we have any faith in your
    ability to deal with discrimination if you have been working on
    these cases for such a long time and they have been in
    defiance, I think, of the U.S. District Court on these
    discrimination ordinances. But you have not been able to do
    anything. Is that right? Up until this point, you have not been
    able to turn around any of that?
        Mr. Trasvina. We have not pulled the funding from St.
    Bernard Parish. That is correct.
        Chairwoman Waters. When are you going to do it?
        Mr. Trasvina. We continue to work on that. And as we
    resolve the complaints, the jurisdiction will have the
    opportunity to make its changes before we pull funding. Our
    goal is not necessarily to pull funding. Our goal is to make
    sure that they are not discriminating.
        Chairwoman Waters. But you haven't done that very well,
    have you?
        Let me turn to Ms. Capito for 5 minutes.
        Mrs. Capito. Thank you. I would like to ask a question
    about the Fair Housing Initiative Program, where you have
    nonprofits that get grants to do testing and other--how many
    nonprofits are currently being funded under this program?
        Mr. Trasvina. About 98.
        Mrs. Capito. 98 across the country?
        Mr. Trasvina. No.
        Mrs. Capito. Is ACORN one of those organizations?
        Mr. Trasvina. No. ACORN is not receiving funding currently.
        Mrs. Capito. How do you evaluate the effectiveness of your
    grantees at this point, the 98 that are receiving grants?
    Because this bill would expand the funding to these
    organizations, with the ability to fund even more organizations
    quite a bit. What kind of evaluation do you have of the 98 that
    are receiving the funds now as to their effectiveness?
        Mr. Trasvina. They go through a funding competition at the
    front end, where we have a technical assessment panel looking
    at their ability and effectiveness in fair housing and their
    ability to perform what they plan to do.
        On the back end, we have government monitors who review
    particular cases that they handle, review their effectiveness.
    I would say that overall, without talking about anyone in
    particular, overall, the cases that come from the FHIPs to us
    result in a one-fifth higher level of discrimination than other
    cases.
        They are effective in bringing us cases where there is
    discrimination, so they are effective in discerning it. Also,
    they are effective in educating communities about what their
    rights and responsibilities are.
        Mrs. Capito. Do you also monitor aggrieved persons who are
    subject to unfair housing practices, that maybe their own
    claims through Federal court on their own, or maybe through a
    State or local entity? How do those numbers compare with the
    number of cases that come through HUD, or with the help of one
    of these, what do you call them, FHIPs? Am I saying that right?
        Mr. Trasvina. Yes. The FHIPs.
        Mrs. Capito. Yes.
        Mr. Trasvina. Yes. Well, the FHIPs have a different process
    than we do. Oftentimes, the FHIPs get information directly, and
    they work informally because they are there locally in the
    community. They work informally with the person who feels they
    have been discriminated against and the prospective landlord or
    homeowner and conciliate their cases.
        Mrs. Capito. So the cases might not reach the point of
    either litigation or anything of that nature, but would be
    worked out at the local level without HUD's direct involvement.
    Is that correct?
        Mr. Trasvina. That is correct. And in fact, Congresswoman,
    many of our cases, about a third of our cases, are conciliated
    prior to any particular finding. The statute requires that
    every step of the way, conciliation is attempted.
        Mrs. Capito. What is the biggest reason for housing
    discrimination, in your opinion? Why are people discriminated
    against? Is it race? Is it age? Disability?
        Mr. Trasvina. The single largest cases come in the
    disability area. In terms of the reason why, oftentimes it is
    education, people not knowing what their obligations are under
    the Fair Housing Act as well as not knowing what their rights
    are.
        Mrs. Capito. So most of the discrimination would be
    somebody, say, who might be wheelchair-bound, or something of
    that nature, not having access? Is that what you are saying?
        Mr. Trasvina. It could be the failure of a landlord or
    housing provider to have a reasonable accommodation for that
    individual, for example, yes.
        Mrs. Capito. Okay. Thank you.
        Mr. Trasvina. Thank you.
        Chairwoman Waters. Ms. Velazquez?
        Ms. Velazquez. Thank you, Madam Chairwoman. Mr. Trasvina,
    thank you for everything you do--
        Mr. Trasvina. Good morning.
        Ms. Velazquez. --in keeping people informed as to their
    rights. But I believe that, given the outcomes that we have
    seen with this housing crisis, there is a long way to go. And
    we cannot wait until we achieve housing stabilization to get
    people really educated as to their rights.
        In New York City, during the height of the subprime market,
    Black borrowers were 5 times more likely than White borrowers
    to enter into a high-cost loan. For Hispanics, the percentage
    was 3\1/2\ times higher than White borrowers.
        Can you talk to us about what type of efforts, outreach
    efforts, are in place now to ensure that minorities and those
    with limited English proficiency are better informed about
    their rights when it comes to housing rights? And I just would
    like your opinion as to how do you expect H.R. 476 will help
    address these issues?
        Mr. Trasvina. Yes, Congresswoman Velazquez. Since I came on
    board in May, we conducted a language assessment of all of our
    offices around the country to determine what languages HUD
    speaks. And since that time, we have translated about a dozen
    key HUD documents, not just in fair housing but in other parts
    of HUD. We have translated two dozen documents into a dozen
    different languages to make ourselves better accessible to
    individuals and to community groups.
        Ms. Velazquez. It is not only about languages, but it is
    also about enforcement and oversight. So can you talk to us
    about that?
        Mr. Trasvina. Yes. That is correct. In terms of other types
    of efforts, we work collaboratively with the Department of
    Justice, with the civil rights division, the Federal Trade
    Commission, so that the authority over lending, the authority
    over fair housing, exists in other parts of the government. So
    we work collaboratively with them.
        About 5 percent of our cases come in the area of lending
    discrimination. And last year, we obtained over $2 million in
    individual relief for victims of lending discrimination.
        Moving forward on H.R. 476, what is already, I think, of
    critical importance is the role that the FHIP agencies play in
    reaching communities that, frankly, the government is less able
    to do. For example, with the Asian-American community, only 1
    percent of our cases come from the Asian-American community.
        We rely on our partners within the community to reach out.
    Because of historic distrust and a lack of trust of government
    agencies, they are an important bridge to those communities for
    enforcement and also for education.
        Ms. Velazquez. What additional resources and/or
    partnerships are needed to provide greater outreach to limited
    English proficiency communities to prevent housing
    discrimination?
        Mr. Trasvina. Certainly, the ability to reach beyond the
    fair housing community into the other trusted institutions
    within communities would benefit us. We have to go beyond just
    going more than 50 percent of the way. We need to go 90 percent
    of the way there. And that is why we are increasing our
    efforts.
        One of the things that we just announced at Tennessee State
    University this Monday was a university partnership so that we
    will be training the next generation of fair housing activists
    and those who can take the message out, not only for themselves
    as new renters, but also to the families. And those
    particularly in the generation of the first college graduates,
    they often take the message back to the community.
        Ms. Velazquez. Thank you. Thank you, Madam Chairwoman.
        Chairwoman Waters. You are welcome.
        Mr. Marchant?
        Mr. Marchant. Does your agency monitor the number of
    private lawsuits that have been filed as a result of perceived
    discrimination nationwide or State by State?
        Mr. Trasvina. Not State by State. But we monitor those
    cases, yes.
        Mr. Marchant. So how many private actions would you
    estimate there are across the Nation right now?
        Mr. Trasvina. I don't know whether we have that number. But
    I think what is key, though, is not so much that they are the
    actions. Some can go straight into Federal court. But most of
    them are resolved informally. So as I said earlier, a third of
    our cases are conciliated; many, many cases by the fair housing
    groups are brought informally. They often do not result in
    actual Federal court litigation.
        Mr. Marchant. So most of the cases that you investigate and
    handle have not gone to the stage of litigation yet?
        Mr. Trasvina. That is correct.
        Mr. Marchant. Do you have a--what is the penalty if a
    person is found guilty of discrimination? What is the typical
    penalty?
        Mr. Trasvina. The penalty can vary. It is in the thousands
    of dollars for individual violations. But really, the key is
    getting damages for the individual victims of discrimination,
    fair housing training, and fines.
        Mr. Marchant. What would be the desired result of the
    nationwide testing?
        Mr. Trasvina. The desired result of nationwide testing
    would be twofold. One is to get a better sense as to how much
    discrimination is out there. The testing is unique in its
    ability to really reflect what is going on in a real-life
    situation.
        Surveys don't do it. Looking at the enforcement patterns
    doesn't do it. But testing does do it because it sends out two
    trained individuals going out at pretty much the same time. The
    only characteristic being different is what you are testing
    for, whether it is gender or race or disability, and being able
    to get back information about an environment where there may be
    discrimination.
        It also helps us in terms of enforcement. So the goal of
    testing would be to get an assessment of where we are, what
    progress we have made, and also possible enforcement actions.
        Mr. Marchant. What would be the budget of the Fair Housing
    and Equal Opportunity Division of HUD? What is your operating
    budget?
        Mr. Trasvina. Our budget, for the FHIP and the FHAP
    program, it is $50 million. And then we have 600 staff around
    the country.
        Mr. Marchant. So this $50 million--the $20 million would be
    outside of that $50 million?
        Mr. Trasvina. That is correct.
        Mr. Marchant. And then how much is this bill increasing--so
    it is increasing at $2 million. From $50 million to $52 million
    is what this bill increases your budget?
        Mr. Trasvina. Those are the FHIP grants, the grants out to
    the fair housing organizations.
        Mr. Marchant. Okay. So $5 million?
        Mr. Trasvina. Yes.
        Mr. Marchant. Okay. And your purpose for doing that would
    be to target--would you have a target discrimination that you
    are looking for, or this would just be a test that would be
    neutral, and you would be looking for the sources of
    discrimination?
        Mr. Trasvina. This would allow us to use the expertise of
    fair housing organizations in a much better way. For example,
    you go from the State of Louisiana up to the State of Idaho,
    and everywhere north and everywhere west, you have the same
    number of FHIP organizations as the States of Ohio and
    Michigan.
        We are missing vast parts of the country with the amount of
    resources we have with the FHIP grantees right now. So this
    would enable us to have the same level of quick understanding
    of what is going on in communities, both in terms of education
    and enforcement, in vast parts of the country that we currently
    have in only a few States.
        Mr. Marchant. Thank you, Madam Chairwoman.
        Chairwoman Waters. Mr. Green?
        Mr. Green. Thank you, Madam Chairwoman. And thank you for
    your testimony today, sir. Let me ask quickly a series of
    questions.
        One, is it true that the best way to acquire empirical
    evidence of this type of invidious discrimination is testing?
        Mr. Trasvina. Testing is both well-accepted by the courts--
        Mr. Green. Is it true that this is--
        Mr. Trasvina. It is--
        Mr. Green. But I need to go on, so I need for you to just
    answer yes or no, if you would. I am sorry. I have a lot that I
    have to cover.
        Mr. Trasvina. Yes.
        Mr. Green. Is it true that this is the best way to acquire
    the actual evidence of what happened?
        Mr. Trasvina. Yes.
        Mr. Green. And is it true that those who would perpetrate
    these kinds of dastardly deeds, who would want to perpetuate
    discrimination, isn't it true that they fear testing?
        Mr. Trasvina. That is correct. A greater amount of testing
    will produce greater enforcement.
        Mr. Green. In fact, testing is the thing that they fear the
    most because they know that they will be caught red-handed if
    they are tested. And they fear testing. True?
        Mr. Trasvina. I would say that, yes.
        Mr. Green. And isn't it true that if we really are serious
    about ending this kind of ugly behavior, we should invest in
    testing?
        Mr. Trasvina. We do need testing, yes. We are very
    supportive of the testing program.
        Mr. Green. And isn't it true that testing not only benefits
    persons of color, but it also benefits veterans because many of
    them are among those persons who are disabled and among those
    persons who are being discriminated against when they are
    trying to get housing in a fair way? Isn't it true that it will
    benefit veterans?
        Mr. Trasvina. Yes.
        Mr. Green. Isn't it true that this legislation, while it
    does increase funding, isn't it true that if we are serious
    about it, we would invest as much as we can so that we can move
    as expeditiously as we can because of situations like the one
    that was called to our attention by our chairwoman, wherein we
    are moving on it but we haven't moved as expeditiously as we
    can move, and we need more help to move through these programs.
        Is this true, that you need more help?
        Mr. Trasvina. Yes. We need more resources and we need more
    help.
        Mr. Green. Now, finally, let me ask you this. With
    reference to pre-application testing, you have a good number of
    programs in place. Let's talk about post-application testing.
    Do you do any post-application testing? Post-application
    meaning after you have applied for a loan, after you have
    started that process of applying for the loan.
        Mr. Trasvina. Right now, we do not. The problem is that
    there are other laws that restrict testing in that area. Every
    actual loan application must be a bona fide loan application,
    and testing by its nature is a test.
        Mr. Green. And isn't it true that you have anecdotal
    evidence of discrimination taking place in the post-application
    process?
        Mr. Trasvina. Yes. And that is why--we would also look and
    want to work with you on this bill--
        Mr. Green. And isn't it true--
        Mr. Trasvina. --to make it easier for us to do post-
    application testing.
        Mr. Green. Yes, sir. You really answered my question. But
    just to continue, to make sure that I have it for the record,
    isn't it true that it would be of great benefit to have
    empirical evidence of the invidious discrimination that takes
    place in post-application testing?
        Mr. Trasvina. Yes, it would, Congressman.
        Mr. Green. And, now, let's talk just briefly about
    children. We don't talk a lot about how this has impacted the
    ability of parents to acquire a place to call home for their
    children. There are people in this country who will
    discriminate against you because you have a child and you want
    a place to stay. Is this true?
        Mr. Trasvina. Yes.
        Mr. Green. And isn't it true that this testing is going to
    help children have a place to call home because with this
    testing, we can cause persons to know that they will be
    punished if they discriminate against children? True?
        Mr. Trasvina. It will help us eradicate the familial
    discrimination.
        Mr. Green. And the final thing is this. Would it not be
    helpful to publish the fact that testing is taking place?
    Wouldn't it be helpful for you to have the ability to say to
    the world, we have caught some folks. We are looking for
    others. Testing is taking place in this country. Would that act
    as a deterrent?
        Mr. Trasvina. It certainly would after the testing is done.
    Prior to the testing being done, it probably would hurt the
    results of the test. But yes, certainly afterwards.
        Mr. Green. Thank you. And Madam Chairwoman, if I may, I
    would like to submit for the record a letter in support of this
    legislation from the National Fair Housing Alliance. And I
    would ask that it be done without objection.
        Chairwoman Waters. Without objection, it is so ordered.
        Mr. Green. Thank you, Madam Chairwoman. And I will yield
    back the balance of my time. You have been very gracious.
        Chairwoman Waters. Thank you very much.
        Mr. Donnelly?
        Mr. Donnelly. No, thank you.
        Chairwoman Waters. If there are no other questions from the
    members of the panel, I would like to thank this witness for
    his testimony. And we have 30 additional days for members to
    submit questions. Thank you very much.
        Mr. Trasvina. Thank you.
        Chairwoman Waters. I would now like to call on the second
    panel.
        Our first witness will be Ms. Shanna Smith, president and
    CEO of the National Fair Housing Alliance.
        Our second witness will be Ms. Leslie Proll, director of
    the Washington office, NAACP Legal Defense and Educational
    Fund, Incorporated, and co-chair of the Leadership Conference
    on Civil Rights Fair Housing Task Force.
        Our third witness will be Mr. David Berenbaum, chief
    program officer, National Community Reinvestment Coalition.
        Our fourth witness will be Ms. Jeanne McGlynn Delgado, vice
    president, business and risk management policy, the National
    Multi Housing Council, and here on behalf of the National
    Apartment Association.
        And our fifth witness will be Professor Brian Gilmore,
    director, Fair Housing Clinic, Howard University School of Law.
        Without objection, your written statements will be made a
    part of the record. You will now be recognized for a 5-minute
    summary of your testimony. And we will start with our very
    first witness, Ms. Shanna Smith.

      STATEMENT OF SHANNA L. SMITH, PRESIDENT AND CHIEF EXECUTIVE
                OFFICER, NATIONAL FAIR HOUSING ALLIANCE

        Ms. Smith. Thank you, Chairwoman Waters, and thank you,
    Ranking Member Capito, for inviting me to speak about H.R. 476.
    And I would like to thank Representative Al Green for
    introducing the legislation.
        I have spent my entire career working in fair housing, both
    in enforcement and education, and education from the standpoint
    of teaching people how to recognize and report discrimination,
    but also working with the industry to teach them how to comply
    with the laws.
        The National Fair Housing Alliance is made up the private,
    nonprofit fair housing centers in the United States. There are
    fewer than 100. There are none, for example, in West Virginia,
    and there are other States that have no private fair housing
    groups.
        The private fair housing group, for example, in Toledo,
    Ohio, serves that metropolitan area. It doesn't serve the whole
    State of Ohio. These are locally-based organizations.
        I am here today to provide strong support for H.R. 476. And
    I am optimistic because the Fair Housing Act has always enjoyed
    great bipartisan support. After Dr. King was assassinated,
    President Johnson went to Senators Mondale and Brooke and said,
    ``You had been pushing this legislation,'' and within 7 days,
    the first Fair Housing Act was passed. And as Representative
    Green pointed out, we have had amendments to the law and have
    always enjoyed great bipartisan support.
        This legislation currently will improve both enforcement
    and education efforts surrounding discrimination in housing, in
    the rental market, in the sales market, in the lending markets,
    and in the homeowners insurance markets. It will provide sorely
    needed funding for nationwide systemic enforcement.
        One of the reasons systemic enforcement is critical is
    because there are so few fair housing centers in the United
    States. It has been since 1991 when the disability amendment
    became effective under the 1988 amendments. And the National
    Fair Housing Alliance really didn't look at design and
    construction cases because we were relying on the Department of
    Justice, HUD, and other local groups to see that issue.
        But 2 years ago, we decided to look at it because we kept
    seeing the largest builders still building properties that were
    inaccessible to people who use wheelchairs, to people with
    mobility issues. And we filed a lawsuit, along with our fair
    housing groups, in Napa Valley, in Marin, California, in
    Atlanta, Georgia, and in Melbourne, Florida, against the 5th
    largest builder in the United States, the A.G. Spanos
    Companies.
        We resolved that case recently. And what I think is unique
    about the way we resolve cases, it is not just about money. It
    is not just about damages. While this case, design and
    construction case, settled for around $15 million, it included
    the Spanos Companies modifying and retrofitting 82 apartment
    buildings that they had built since 1991.
        It also includes a $4.6 million retrofit fund. They had 123
    buildings they built, and not all of them could be retrofitted.
    So we were able to include a fund where we can make grants to
    people who currently live in homes or currently live in
    apartments anywhere in the United States that are inaccessible.
        And then the beauty of the settlement is we are working
    very closely with the Spanos Companies so this kind of mistake
    doesn't happen ever again. And we are providing expertise and
    expert information about their future developments.
        We had the same kind of partners resolve in administrative
    complaints with State Farm Insurance Company, Nationwide, and
    Allstate Insurance Company. So the goal of the private fair
    housing movement is not just to be combative, but to develop
    partnerships so discrimination doesn't continue. With systemic
    investigations, we are able to fill the gap in the United
    States where is no fair housing enforcement.
        Kansas doesn't have a fair housing center any more. There
    are other States that have no private fair housing centers. And
    I would just like to say that the increase in the FHIP funding
    is critical because right now, each fair housing center can get
    a maximum of $275,000.
        When you look at L.A., Houston, Dallas, New York, Atlanta,
    Chicago, San Francisco--you know, $275,000 is a drop in the
    bucket. So we do have to increase the funding, but we have to
    be wise about how we use that, and figure out how to proportion
    the money according to the geographic population being served.
        And finally, education is critical. In the area of
    education, we have supported multinational media campaigns.
    State Farm supported us in creating the first campaign that
    promotes residential integration. All the other campaigns have
    been teaching people how to recognize and report
    discrimination, which is absolutely necessary.
        But we also wanted to have a partner campaign saying, why
    is it good that we live together? Because, after all, people
    learn to live together by actually living together. And we see
    in the mortgage lending crisis the problem of our inability to
    investigate beyond the pre-application stage.
        And so we would recommend that this piece of legislation
    also include language that would allow private fair housing
    groups, through approval with the Department of Justice--
    because I don't think this privilege of doing these
    investigations should be done willy-nilly--but approval of the
    Justice Department to allow us to do full application testing,
    create profiles in the credit bureau system, and not face risk
    of a felony charge by the U.S. Attorney because we have created
    these profiles and we are testing through the whole process.
        So we are testing underwriting. We are testing the
    appraisal practices. We are testing the private insurance
    companies. And my time is up, but that is one of the other
    things I think we need in this piece of legislation. Thank you.
        [The prepared statement of Ms. Smith can be found on page
    96 of the appendix.]
        Chairwoman Waters. Thank you very much.
        Ms. Leslie Proll?

      STATEMENT OF LESLIE M. PROLL, DIRECTOR, WASHINGTON OFFICE,
     NAACP LEGAL DEFENSE & EDUCATIONAL FUND, INC./CO-CHAIR OF THE
     LEADERSHIP CONFERENCE ON CIVIL RIGHTS FAIR HOUSING TASK FORCE

        Ms. Proll. Chairwoman Waters, Ranking Member Capito, thank
    you for allowing the NAACP Legal Defense Fund to testify today.
    We are the Nation's oldest civil rights legal organization.
    Since Thurgood Marshall argued Shelley v. Kraemer, which
    outlawed racially restrictive covenants, we have fought against
    housing discrimination.
        Sixty years after Shelley and 40 years after passage of the
    Fair Housing Act, our Nation remains largely segregated by
    race. The impact of housing discrimination on racial isolation
    and concentrated poverty is just as powerful today as it was
    when lawyers told the Supreme Court in Shelley that: ``The
    effects of discrimination permeate the community and exert a
    baneful influence upon the economic, social, moral, and
    physical well-being of all persons, White and Black, young and
    old, rich and poor.''
        We are pleased to testify here today in support of H.R. 476
    for several reasons. First, the bill recognizes the unique role
    of private fair housing organizations. These organizations are
    the mainstay of the fair housing movement. They are on the
    ground collecting information over time and monitoring housing
    patterns in their own communities.
        Their local leadership, continuity, and familiarity with
    the local housing industry ensured that incidents of housing
    discrimination, systemic issues, and problematic trends are
    identified and redressed. And frankly, their onsite capacity
    for civil rights monitoring and enforcement is unparalleled.
        We also support an enhanced role for testing in fair
    housing enforcement. As civil rights litigators, we cannot
    overstate the importance of testing in identifying
    discrimination, and courts have recognized this for 30 years.
        Discrimination in the 21st Century is more subtle and more
    sophisticated, and testing is absolutely necessary to detect
    it. A key component of this testing program is its systemic
    nature. We must confront the structural discrimination
    underlying our housing patterns. We can no longer be satisfied
    with fair housing enforcement on a case-by-case basis. That
    approach is similar to trying to desegregate schools one
    student at a time.
        The systemic approach is consistent with the government's
    longstanding tradition of focusing on large-scale forms of
    discrimination that otherwise will not be redressed. This is
    more costly, complicated, and protracted, but it is precisely
    the type of investigation in which the government should bring
    to bear its extraordinary resources.
        The government can uncover far-reaching discrimination in a
    manner that cannot be accomplished through the budgets of fair
    housing organizations, civil rights organizations such as my
    own, or private attorneys. And the program, as Congressman
    Green said, can have a deterrent impact on the housing industry
    as well.
        A nationwide testing program comes at an opportune time. In
    the past decade, we have lamented the lax enforcement of fair
    housing laws by the government. The number of race cases
    decreased despite no drop in discrimination, and the Justice
    Department's own testing program was severely underutilized.
        The new testing program should test across the housing
    industry. A program focused only on rental testing will not
    address all the segregative forces at work. More sales testing
    needs to be conducted. From 2000 to 2008, the Civil Rights
    Division filed no cases based on sales tests, despite the fact
    it was designed in part to challenge sales discrimination.
        We are pleased by the Civil Rights Division announcement of
    an aggressive campaign against redlining. But the government
    should also adopt measures for undertaking testing in lending.
    Fair lending principles should be included in all remedial
    legislation and policy initiatives to address the financial
    crisis. And data on race and ethnicity should be collected when
    implementing foreclosure relief programs, and made publicly
    available so that programs could be monitored for compliance
    with fair housing laws.
        Finally, we applaud the provision of grants to study the
    causes of discrimination and segregation, and to evaluate their
    effects on education in particular. At the Legal Defense Fund,
    we recognize the deep structural role that residential
    segregation plays in perpetuating inequality in our Nation's
    schools.
        The racial makeup of neighborhoods is the most important
    determinant of the racial composition of the schools within
    them. With the increasing rarity of court-ordered desegregation
    and judicial limits on voluntary integration programs,
    students' educational fates are dependent upon where they live.
        In conclusion, persistent housing discrimination, which
    continues to plague our Nation decades after it was outlawed,
    imposes high societal costs. Congress should do everything
    within its power to ensure that the Federal fair housing laws
    are enforced strongly and fully.
        Now is the time for a new approach to redressing and
    eradicating housing discrimination. With H.R. 476, we are off
    to a very good start. Thank you.
        [The prepared statement of Ms. Proll can be found on page
    76 of the appendix.]
        Chairwoman Waters. Thank you very much.
        Mr. David Berenbaum?

     STATEMENT OF DAVID BERENBAUM, CHIEF PROGRAM OFFICER, NATIONAL
                COMMUNITY REINVESTMENT COALITION (NCRC)

        Mr. Berenbaum. Thank you, Chairwoman Waters, Ranking Member
    Capito, and other members of the committee.
        The National Community Reinvestment Coalition is pleased to
    appear here to strongly endorse the Housing Fairness Act of
    2009, and to also testify regarding other aspects of the
    current mortgage crisis that our Nation is facing.
        In recent months, regulators, the White House, and Members
    of Congress alike have acknowledged that unfair, deceptive, or
    otherwise poor business practices by lenders and other mortgage
    finance-related institutions played a critical role in the
    current housing crisis.
        Also well-known is the fact that a disproportionate share
    of abusive, non-traditional, and high-cost lending have
    targeted financially vulnerable consumers, in particular
    African-American and Latino households and communities. Quite
    frankly, this has not been an equal opportunity recession.
        Study after study produced by the National Community
    Reinvestment Coalition, Federal regulators, and a host of other
    academic and not-for-profit organizations have documented
    disparities in lending in this Nation.
        It is a curious irony that a majority of the meaningful
    complaints that have been filed in the fair lending space
    against rating agencies; against lenders who redlined, clearly
    a stupid business practice; against in fact large national real
    estate affiliates; large, in fact, underwriters and others in
    this space, have been identified by private not-for-profit
    organizations or State attorneys general, not by the very
    regulators who were charged to police, in fact, our public
    needs in the space of fair housing.
        We strongly support this bill, Congressman Green, but urge,
    in fact, the committee to increase the amount of funds--$20
    million is a drop in the bucket. This is a national crisis. We
    either float or sink on what in fact is a changing demographic
    in this Nation.
        We are becoming more and more diverse, and businesses that
    do not meet the needs of African Americans, Latinos, families
    with children, and other members of our society are, frankly,
    not competing to position themselves in a profitable way as we
    move ahead into the future.
        Specifically, there are issues emerging every day. Today,
    FHA Commissioner David Stevens announced reforms to the FHA
    lending program. This is a very complex issue. But here is a
    fair lending issue right on top of the announcement--580 is an
    interesting number for the FICO credit score. It is an attempt
    to compromise on a very important issue to ensure appropriate
    capitalization and liquidity, access to credit in the
    marketplace. But look at all of the national lenders at this
    moment in time who in fact are using 620 and higher FICO
    scores.
        That has a disparate impact on the basis of race. And where
    have our fair lending regulators been? It is once again the
    private fair housing movement that is identifying this issue
    ahead of regulatory agencies and that paradigm has to change.
        I fully support the earlier testimony of the National Fair
    Housing Alliance, and also the NAACP Legal Defense Fund. This
    is serious stuff. The fair lending testing that the National
    Community Reinvestment Coalition has been doing with many of
    our fair housing members, in fact, is a very, very small
    amount.
        On top of that, we applaud the effort of corporations who
    are also doing self-testing. If we are going to change the per
    diem, if we are going to promote an open housing market, we as
    a nation have to live up to the aspirations that Dr. Martin
    Luther King saw and this Congress saw when they passed the
    Federal Fair Housing Act.
        Thank you.
        [The prepared statement of Mr. Berenbaum can be found on
    page 32 of the appendix.]
        Chairwoman Waters. Thank you very much.
        Ms. Delgado?

     STATEMENT OF JEANNE McGLYNN DELGADO, VICE PRESIDENT, BUSINESS
      OPERATIONS & RISK MANAGEMENT POLICY, NATIONAL MULTI HOUSING
                 COUNCIL/NATIONAL APARTMENT ASSOCIATION

        Ms. Delgado. Good morning. Chairwoman Waters, Ranking
    Member Capito, and distinguished members of the subcommittee,
    my name is Jeanne McGlynn Delgado, and I am the vice president,
    business operations and risk management policy at the National
    Multi Housing Council.
        This morning, I am here on behalf of two trade
    associations, my own and the National Apartment Association.
    Our combined memberships include apartment owners, developers,
    managers, builders, and lenders.
        It is a privilege to be here today, and I commend you,
    Chairwoman Waters, for your leadership in holding this hearing
    to discuss the various stakeholder perspectives on H.R. 476.
    And we commend Congressman Green for his leadership in Congress
    and his continued pursuit of equal opportunity for all.
        One in three Americans, or 117 million households, rent
    their homes. Housing discrimination in the rental market
    reduces the number of people who otherwise would lease an
    apartment. For the record, as advocates who are passionate
    about the benefits of renting, we would like to see the number
    of renter households in America grow, not decline. Simply put,
    housing discrimination makes bad business sense.
        However, with respect to the issue at hand, I am sure it
    will come as no surprise that the apartment industry does not
    exactly embrace additional testing as the best means to combat
    housing discrimination, at least not in its current form.
        While we support the goal of reducing housing
    discrimination, we believe the creation of a national testing
    program and a doubling of FHIP funds by itself is not enough to
    effect the desired change. Therefore, we offer the following
    observations and recommendations: first, we believe that before
    instituting another testing program, HUD should conduct a
    comprehensive review of the existing testing programs to
    measure their effectiveness, efficiencies, and fairness;
    second, after completion of this assessment, HUD should
    consider alternative approaches to current testing protocol;
    and third, HUD should expand its commitment to industry
    education and outreach efforts.
        We come to these recommendations with a strong belief that
    more of the same just doesn't work. There seems to be an
    underlying assumption that fair housing testing equals
    effective enforcement, and that simply increasing the number of
    complaints brought against property owners will eradicate
    housing discrimination.
        We disagree. There is no shortage of studies, reports, and
    analysis quantifying the level of discrimination in housing.
    However, we are unaware of any research that has measured the
    effectiveness of the federally-funded testing programs.
        So regardless of how we feel about testing in general,
    clearly, testing files contain valuable data and information
    that can help inform more effective, not to mention efficient,
    methods for identifying discriminatory practices and methods to
    enforce the law against such practices.
        While testing for housing discrimination appears fairly
    straightforward, tests and test results can vary widely. Let me
    share an example of the kinds of testing cases that can be
    studied.
        A testing program in 2006 in a county in Virginia involved
    testers making site visits to measure different treatment, with
    an inquiry for a one-bedroom apartment for a specific time
    period. The tests were designed to measure the treatment
    relative to the availability of the unit at the described time
    based on national origin or race.
        In the 50 tests conducted, none showed a difference in
    treatment. While you might think that is great for the
    apartment industry, it could easily have gone the other
    direction, as it did in the following similar testing
    situation.
        In a Maryland city, paired testers seeking a one-bedroom
    apartment were testing for different treatment based on
    national origin. In this scenario, a complaint was filed when
    the minority tester received a price quote that was higher than
    the White tester.
        After a lengthy and costly investigation, guest cards
    completed by both testers revealed evidence causing the
    complaint to be dismissed. While one tester sought a one-
    bedroom unit, the other tester actually requested a one-bedroom
    den unit, thus explaining the difference in price.
        A simple mistake made by the tester resulted in an unfair
    complaint of discrimination lodged against a housing provider
    with an otherwise excellent reputation with residents,
    employees, and in the community. Lessons can be learned from
    these unfortunate experiences. And as a result, the enforcement
    tools could be made more effective.
        These are just a few examples of how testing results can be
    inconsistent even when the strategy is fairly straightforward.
    The likelihood for errors and missteps increases in more
    complex situations.
        In these studies, we suggest that emphasis should be given
    to those complaints that were investigated and later dismissed
    with a finding of no reasonable cause. According to the HUD
    2008 annual report, in the 2,156 cases closed, of these, 44
    percent were dismissed for no reasonable cause. This is a
    significant number. Of course, not all of these involved
    testing, but it is a statistic that begs further review.
        Let me shift for a moment to what the existing tests and
    studies don't reveal, and that is the damage caused by an
    unfair complaint. Just as home-seekers can be victims when
    subjected to housing discrimination, property owners wrongly
    accused become victims, too.
        When a property owner, or specifically his or her staff, is
    wrongly accused of discrimination, the damage caused can be
    severe and long-lasting.
        [The prepared statement of Ms. Delgado can be found on page
    63 of the appendix.]
        Chairwoman Waters. Thank you very much, Ms. Delgado. Your
    time is up.
        Professor Brian Gilmore?

        STATEMENT OF BRIAN GILMORE, CLINICAL PROFESSOR & STAFF
     ATTORNEY, HOWARD UNIVERSITY SCHOOL OF LAW, FAIR HOUSING CLINIC

        Mr. Gilmore. Thank you, Congresswoman Waters, and other
    members of the committee. I am from the Howard University
    School of Law Fair Housing Clinic and we have been in operation
    for 5 years. Our students go out in the community and they
    educate consumers about their housing and fair housing rights,
    about the law in the fair housing area, and in other aspects of
    fair housing.
        We fully support H.R. 476, the Housing Fairness Act, as it
    is in line with the kind of work we do on a daily basis. Our
    students have become testers. They have tested, and gone out
    and participated with other nonprofits and done tests, and they
    realize the importance.
        Right now, testing is the only credible evidence that we
    can have in a court case that might happen in the future, the
    only competent--as Judge Damon Keith stated many years ago--
    evidence that we have at the present time.
        I would definitely support what Mr. Berenbaum stated
    because as we started out as a fair housing clinic, what we
    have become now is a clinic that has other areas, and that area
    is the mortgage crisis. And people would not believe the volume
    of problems that we have.
        Almost all of the calls we receive on a daily basis--and
    there are tons of calls--involve mortgage problems, individuals
    who were given terrible loans. And these are individuals who
    have been gainfully employed for years, have good credit, and
    were somehow given a loan that is unbelievable.
        We get these on a daily basis. Almost all of these
    consumers are African American. If they are not African
    American, they are Latino. And this is just in one area of the
    country, the Washington metropolitan region. As Mr. Berenbaum
    stated, I think this is a serious crisis. I would hope that
    this bill would also be able to try to address that issue
    because this is a serious crisis.
        The homeownership rate for African Americans and Latinos
    was on the rise until a few years ago, and now it is
    plummeting. And they are losing valuable wealth, and everybody
    knows that wealth is opportunity and it dictates the future.
        I think that is the most important issue that we have seen
    at Howard University School of Law since we have been doing the
    clinic in the last 2 or 3 years. That issue has to be
    addressed.
        The reason why we definitely support this bill as well is
    because there are a few things out there that we--one thing out
    there we see that is a lot different. We conducted a survey of
    consumers, and the consumers, almost all of them, stated that
    they had been discriminated against, or they applied for an
    apartment and they didn't receive it.
        We just think that the landscape has changed and something
    has to be done in this area, the fair housing area. And we
    believe one thing that has not been mentioned by anyone here
    that I think this committee has to consider in the future is
    that the entire landscape, the way people get housing, has
    changed.
        You don't get an apartment now by reading a newspaper. You
    go online. You talk to somebody by e-mail. You don't even
    hardly meet this person. There are cases now where--I mean, the
    discrimination is electronic. You don't even hear about it
    because of the way it is done.
        And the way the law is arranged now, it is able to be done,
    through craigslist, the famous craigslist case. It is just the
    landscape has changed, and I think that this committee and, you
    know, the Congress overall, should take into account the way
    things are drastically changing.
        Congressman Garrett said, let's not make the mistakes of
    the past. I remember he said that in his comments. Let's not
    make the mistakes of the past. The 20th Century was about
    housing discrimination. We know that. I think it is time to
    make a new start, and that is what we try to do every day at
    the Howard University School of Law.
        And I thank you for the opportunity to testify.
        [The prepared statement of Professor Gilmore can be found
    on page 70 of the appendix.]
        Chairwoman Waters. Thank you very much. We will now proceed
    with our questions.
        Ms. Proll and Mr. Berenbaum both kind of alluded to or
    mentioned in their testimony something about the way the
    lending institutions dealt with lending as it relates to the
    foreclosure problem that we have.
        Now, recently there was a case brought against Wells Fargo.
    And I think it had to do with targeting certain communities for
    predatory lending and unfair products. Were either of you
    involved in that case?
        Ms. Proll. We were not, but we know the lawyers who were.
        Chairwoman Waters. And am I correct in assuming that it had
    to do with targeting communities for basically unfair lending
    practices?
        Ms. Proll. That is right. It is what we call reverse
    redlining. Rather than circling a red line around a community
    and not lending to that community, the line was circled around
    the community and the community was targeted for exorbitant
    rates, for everything that goes into and caused the foreclosure
    crisis.
        And the theory of the case is that the economic
    disadvantage that resulted to the Baltimore community was a
    direct result of Wells Fargo's lending practices.
        Chairwoman Waters. Will the Federal Fair Housing
    Initiatives Program be able to look at those kinds of
    discrimination practices along with testing, as it is presented
    here by Mr. Green?
        Mr. Berenbaum. There is no question that well-designed fair
    lending tests can probe any number of issues from, for example,
    the appropriateness of loans suggested to qualified consumers,
    to steering and other aspects of the current underwriting
    crisis.
        In fact, included in our testimony are summaries from three
    series of tests in the fair lending space that the National
    Community Reinvestment Coalition has been involved with. For
    example, when brokers were being sort of labeled as the cause
    of the financial crisis, with Fair Housing Initiatives Program
    support, we went out and tested brokers across the country and
    found that over 40 percent of the time, discrimination was a
    factor.
        When financial service corporations were in question, we
    did the same with a HUD FHIP grant, and reported out both to
    educate the industry and Congress and HUD and others to the
    issue, but also to bring, as appropriate, enforcement actions.
    That led to over 15 filings of redlining complaints against
    financial service corporations who were not regulated
    institutions by Federal agencies.
        Chairwoman Waters. Thank you very much.
        I would like to ask Mr. Gilmore from Howard University
    whether or not in the educating of the communities that your
    students go into about fair housing laws, whether or not they
    are picking up complaints and being able to file those
    complaints or get them to the Federal Fair Housing Initiatives
    Program?
        I take it that the school does not have a program. But in
    your educating of students in this area, they could be picking
    up complaints. What do they do with those complaints?
        Mr. Gilmore. Actually, the Howard University School of Law
    program was founded through a HUD grant, through the FHIP
    program. It was a special grant many years ago for establishing
    a law school clinic, fair housing clinic, at an HBCU. It was a
    very unique program.
        So we actually do--we are out in the community, and
    individuals come to us. We don't file the complaint, but we
    show the consumer how to file a complaint through the HUD
    system or, because we are in the District of Columbia, it is
    through the D.C. Office of Human Rights, which is like the HUD
    affiliate in Washington, D.C.
        And we will show them that process. And it is an online
    process, or they can call--for HUD, they will call the
    Philadelphia office. We would show them how to do that, and
    then they would take it from there, whether they wanted to file
    it or if they decided they didn't.
        And I will point out that one of the problems over the
    years has been, when we have heard from the public, is they
    have lost faith in the ability for the program to work for
    them. And a lot of people just--they get denied something, for
    whatever reason, and they just simply forget it. They just
    forget about it. They sort of walk away from it.
        And I think that is also what this is about, is restoring
    that faith in the Federal Government to take action in
    situations like this.
        Chairwoman Waters. Thank you very much.
        Ms. Capito?
        Mrs. Capito. Yes. Thank you.
        Ms. Delgado, we have heard a lot in the previous panel and
    the panel here, about the need for more education, I think on
    both sides of the fair housing issue, both in terms of the
    potential buyer or renter and also of the owner of the
    properties maybe not being aware of some of the issues that
    have to be dealt with in terms of equal access for, say,
    disabilities and things of that nature.
        Your organization obviously represents a vast number of
    owners and renters of properties. What kind of educational
    outreach do you do in terms of educating your members?
        Ms. Delgado. We do quite a bit. At every one of our
    conferences, we have held--in fact in the past several years--
    courses or forums specifically dedicated to educating on the
    requirements, the design and construction requirements, of the
    Fair Housing Act.
        Our other group, the National Apartment Association,
    through their local and State associations, they offer regular
    training programs and educational programs. Some of our larger
    members have their own training in-house to mandate that their
    employees and staff and builders go through all of those
    training courses.
        One of the pieces of information in the 2008 HUD report
    quantified the number of people who have gone through HUD's
    Accessibility FIRST training. And that is an area that we
    commend HUD for doing something like that because I think it is
    a recognition that the industry is in need of this very
    technical, detailed information about how to build correctly.
        We have a few observations and disagreements over how--the
    standards to which they are enforcing against. But overall, the
    educational component is very good, and we would be curious to
    see how the hotline, the HUD hotline, is used, what kind of
    information, what kind of questions they are getting, if that
    is informing their additional educational opportunities.
        So with the combination of those things, I think we try to
    do as much as we can in recognizing the need for that
    education.
        Mrs. Capito. Thank you.
        Ms. Smith, in terms of the answer that was just given from
    the one side of the housing equation, is there ever any
    collaborative efforts between the owners and the renters,
    between the potential owners--I mean, on the local level.
        You talked about you have 98, I think you said, local
    private fair housing organizations. Are there any kind of
    coalitions together to make sure that these issues are aired on
    both sides? Or do you find that there is a lack of--I mean--
    yes. Let me leave that question out there.
        Ms. Smith. When a complaint is filed, 99 percent of the
    complaints go to an administrative agency. There are very, very
    few lawsuits that are filed annually. I guess less than 10
    lawsuits, fair housing lawsuits, are filed annually.
        In the example that was given, it shouldn't have been a
    long investigation. The State, local, or HUD investigator
    should have been able to look at the test reports right away to
    see that different information was requested and dismiss a case
    like that.
        Testing, the courts and HUD and administrative agencies can
    look at that. And it takes away the issue of she said/I said.
        Mrs. Capito. Right.
        Ms. Smith. And it pulls in some objective information about
    availability. Private fair housing groups, in 9 out of 10 of
    the cases, develop a relationship with the apartment builder,
    the complex, the real estate company that has been
    investigated, to do training.
        The difficulty in the rental markets is you have high
    turnover of managers and supervisors and assistant managers. So
    you may not be in a situation where they know exactly what the
    law says when they are operating every day.
        But you also have situations where some owners have
    directed managers to discriminate. And we have cases in Alabama
    where those managers came forward, and the Fair Housing Act
    protected them, by being able to file a complaint without
    retaliation.
        I see much more cooperation between the private movement
    and the industry in training. They have the desire to follow
    the law. We have the desire to have them follow the law. And I
    think the California Apartment Association, in particular, has
    great training programs that they do on a local level.
        Mrs. Capito. Could I have one final question?
        Chairwoman Waters. Yes.
        Mrs. Capito. Thanks. This is on a topic near and dear to
    your heart I wanted to ask about.
        Mr. Berenbaum, I believe that your organization has had
    some exposure to this mortgage fraud that is going on now, with
    people being contacted and being told, ``We are going to help
    you prevent your foreclosure.''
        Can you speak to that just generally, what your exposure
    has been? Is it on the rise? Are you able to detect what the
    issues are? Are there people getting caught being fraudulent?
    And that type of thing.
        Mr. Berenbaum. The National Community Reinvestment
    Coalition is a HUD-certified housing counseling intermediary,
    and over 150 of our member organizations are providing
    foreclosure prevention counseling across the country.
        In discussion with them and, frankly, from our own work in
    the space, we were seeing more and more for-profit foreclosure
    prevention firms opening their doors. Many were former mortgage
    professionals. Some were even not-for-profit staff opening
    doors. Some were lawyers. They really varied. Some were
    national advertisers. Some were local advertisers, radio or on
    the utility pole outside a door. Going door-to-door in Las
    Vegas, and so on.
        We decided, using our own resources, to begin a matched
    pair testing program where we looked at over 100 foreclosure
    prevention counseling for-profit providers. We are preparing to
    release that report at this time.
        But I can tell you what we saw was widespread
    misinformation, including statements such as, ``Don't pay your
    mortgage payment. Work with us. Pay our fee''--on average what
    was a $2,800 fee--``instead of paying your mortgage,'' when in
    fact all of those consumers, regardless of where they lived,
    could receive HUD counseling at no cost. And frankly, they
    would have received better advice, from what we were learning.
        We will share the report with you when we release it in
    early February.
        Chairwoman Waters. Thank you very much.
        We have been joined by Mr. Kanjorski. And without
    objection, Representative Kanjorski will be considered a member
    of the subcommittee for the duration of this hearing. Mr.
    Kanjorski?
        Mr. Kanjorski. Thank you very much, Madam Chairwoman.
        Maybe listening to the panel's testimony, am I making an
    incorrect judgment that we are actually progressing and doing a
    better job than we did, say, prior to the Fair Housing Act?
        Ms. Smith. I would say that--I have been doing this for 35
    years. And you are supposed to say, but you look so young.
        [laughter]
        Ms. Smith. And I see major progress in enforcement and
    education. However, we estimate that 4 million instances of
    discrimination occur annually, and fewer than 30,000 are
    reported.
        And when you look at where the private fair housing centers
    are located--in Ohio, Michigan, California, are where they are
    mostly concentrated--you see most of the cases coming from
    those areas. Then we have States that may have one fair housing
    center--for example, Richmond in Virginia--and other States
    that have no private fair housing centers--North and South
    Carolina, Idaho, Kansas, New Mexico.
        It is a huge gap, as Assistant Secretary John Trasvina
    testified. There is a huge gap in enforcement. So where there
    is effective, full service, nonprofit fair housing centers, you
    see integration. You see cooperation between the enforcement
    agencies and the industry. But where there isn't, you see this
    battle going on and people being denied housing every single
    day without any assistance.
        Lending discrimination is rampant, and it is not just the
    scam issues, which we are testing as well. But 2 years ago,
    when the credit crunch became tight, we did testing of banks.
    And we sent in Latinos, African Americans, and White testers to
    apply for a conventional mortgage loan. Everybody was offered
    some kind of a loan, but the Whites got the best loan--terms,
    conditions, interest rates--even though they were less
    qualified than the Latino and African-American testers.
        So in some parts, we are really improving in education and
    dialogue with the industry. But we have just touched the tip of
    the iceberg when we are talking about how this discrimination
    perpetuates segregation in our country.
        Mr. Kanjorski. Ms. Delgado, you brought out in your
    testimony some of the failures in the testing system. If you
    had your way, what would be the changes you would make now to
    have the Fair Housing Act better applied and to be more
    efficient and effective in its application? What would be your
    judgment?
        Ms. Delgado. Thank you for the question. Some of the
    suggestions we would make would be we think there should be a
    standard testing protocol. That is, to recognize that, as I
    said in my testimony, tests are done in various ways, and we
    are not sure that tests appear to recognize the reality of
    technological advances, for example, that have been made in the
    rental marketing practices.
        In an example, for a simple test of someone going in and
    seeking pricing on a one-bedroom unit--I just did this recently
    myself. I am in the market for a new place to live, and went
    shopping at one of my members' communities, and asked for some
    pricing.
        Well, it depended. You had to tell them--they had four or
    five options. Different square feet. Where the unit was
    located. When did you want to move in? Everyone doesn't move in
    on the first of the month these days, and that makes a
    difference in the pricing.
        So with a simple request of, I want to know how much it
    costs for a one-bedroom unit, it could be different for
    everybody who asks, and it could be different the very next
    day. So those kinds of things, I am not sure that those are
    recognized in various testing protocols.
        We think it would be helpful for the test results to be
    disclosed. When someone received a complaint, they should have
    more than just an anonymous alleged complaint which they have a
    hard time responding to.
        Another recommendation we would make: We think there should
    be some flexibility built into the system when, say, for
    example--especially in the more confusing areas of the laws.
    Someone might ask for an exception to a no-pets policy. Well,
    that is under reasonable accommodations provision of the Fair
    Housing Act.
        Not everyone is familiar with that. In fact, I think that
    was also reported in the HUD study, that people are unfamiliar
    with what those rights are. Why can't the tester prod the
    person, ask a few additional questions, remind them that these
    are their fair housing rights?
        I think if you just engage in a little education on both
    parts without what appears to us as mostly a ``gotcha'' game--
    because those are the easy things to check off--we think it
    would go a longer way to actually effecting the change that you
    are looking for.
        Mr. Kanjorski. Thank you very much.
        Chairwoman Waters. Thank you.
        Mr. Green?
        Mr. Green. Thank you.
        Ms. Delgado, I must move quickly, so please forgive me if I
    appear to be rude, crude, and unrefined. I am going to ask you
    a question. And so as not to entrap you, I am going to tell you
    before I ask you this question that I will ask you a follow-up
    question to ascertain whether or not the answer that you have
    given me is totally correct.
        The question is: Have you examined the protocols for
    testing promulgated by HUD? Have you examined them?
        Ms. Delgado. I have looked at them, but not in the detail
    that you would probably follow up in your question.
        Mr. Green. All right. If you have not fully examined them,
    why would you make contentions about protocols that you don't
    fully understand and you haven't fully examined? You see, you
    are doing what we call in court asking a question that hasn't
    been answered.
        The testing that is being done is not the type of informal
    questioning that you are talking about. These tests are
    performed with specific protocols that address the very
    concerns that you have called to our attention.
        So when you make these statements, you are misleading
    people. This concerns lives. This is about children. This is
    about veterans. This is about the American society that we live
    in and we want to make better. So I beg that you give more
    consideration to those protocols before you make comments such
    as what you have made.
        I would also commend to everyone, given that this is Dr.
    King's birthday celebration time in this week, read his letter
    from the Birmingham jail. Read his letter from the Birmingham
    jail and understand that Dr. King didn't go to jail to write a
    letter. That is not why he went to jail.
        He wrote the letter in response to prominent citizens who
    wrote him a letter. He wrote his letter responding to people
    who were saying, ``You are moving too fast.'' He wrote his
    letter in response to people who were saying, ``The time is not
    right to make this kind of change.''
        Read that letter from the Birmingham jail, and you will get
    a greater appreciation for why those who suffer want something
    to change right now. Those who are denied public housing need
    help right now, as well as those who are losing their place in
    the private housing market, too, simply because of who they
    are.
        Quickly, the professor from Howard. You are eminently
    correct. There is discrimination taking place online. In
    Houston, Texas, we had a candidate run for office, and she
    lost. For our purposes, we will say her name is ``Shaneney.''
    She lost. ``Shaneney'' lost. And she came forward and said,
    ``Look at me. I am Anglo. I should not have lost. Other Anglo
    candidates won who had different names.''
        Her contention--anecdotally, but I conclude that there is
    empirical evidence to support it--was that her name caused her
    to lose. When you apply online, if your name is ``Shaneney,''
    it may have an impact on whether you will get a place to stay.
        NAACP Legal Defense Fund, not only did you file and win
    Shelley v. Kraemer, but also Barrows v. Jackson. And if my
    information is correct, approximately 29 of 31 cases before the
    Supreme Court of the United States were won by the NAACP. You
    have paid dues, and you have made a difference in the lives of
    people in this country. People ought to take your testimony
    seriously because you are talking from years of experience in
    dealing with these issues.
        With the Alliance, I want to thank you for the last comment
    that you made about how we must do more in the area of testing
    with reference to lending. You used a term, I believe, ``full
    application testing.'' Absolutely, full application testing.
        And for our edification, let's take a quick survey. Let's
    test the panel here. How many of you would agree that we need
    to test to find out if there is discrimination in lending? If
    you agree, will you kindly extend a hand into the air?
        [show of hands]
        Mr. Green. Let the record reflect that all of the members
    of the panel are of the opinion that we should should test
    lending by way of the application process.
        And I would add that in doing this, we can also get into
    that predatory lending that has been called to our attention.
    We can get the empirical evidence of what is going on. If we
    really want to deal with this problem, testing is the way to do
    it. Dr. King did not want to manage racism and segregation. He
    didn't want to manage it. He wanted to eliminate it.
        Now, the question that we in Congress have to ask ourselves
    is this: Do we want to eliminate invidious discrimination
    against veterans, against people with children, against ethnic
    minorities? Or do we just want to manage it? That is the
    question that we have to deal with.
        Thank you, and I yield back the balance of my time.
        Chairwoman Waters. Thank you very much, Mr. Green.
        We have just been joined by Mr. Cleaver. Do you have any
    questions for this panel, Mr. Cleaver?
        Mr. Cleaver. I would just like to associate my comments
    with Reverend Green.
        Chairwoman Waters. Okay. Thank you.
        There are no more questions for this panel. Without
    objection, your written statements will be made a part of the
    record. The hearing record will remain open for 30 days for
    members to submit written questions to these witnesses and to
    place their responses in the record.
        This panel is dismissed, and we thank you so very much for
    being a part of this hearing today.
        Before we adjourn, the written statements of the following
    organizations will be made part of the record of this hearing:
    The National Fair Housing Alliance, and the National
    Association of Realtors. Without objection, it is so ordered.
        This hearing is adjourned. Thank you very much.
        [Whereupon, at 11:51 a.m., the hearing was adjourned.]

                                A P P E N D I X

                                January 10, 2010

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