[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]
LEGISLATIVE PROPOSALS TO
PRESERVE PUBLIC HOUSING
=======================================================================
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
__________
APRIL 28, 2010
__________
Printed for the use of the Committee on Financial Services
Serial No. 111-128
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57-746 WASHINGTON : 2010
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HOUSE COMMITTEE ON FINANCIAL SERVICES
BARNEY FRANK, Massachusetts, Chairman
PAUL E. KANJORSKI, Pennsylvania SPENCER BACHUS, Alabama
MAXINE WATERS, California MICHAEL N. CASTLE, Delaware
CAROLYN B. MALONEY, New York PETER T. KING, New York
LUIS V. GUTIERREZ, Illinois EDWARD R. ROYCE, California
NYDIA M. VELAZQUEZ, New York FRANK D. LUCAS, Oklahoma
MELVIN L. WATT, North Carolina RON PAUL, Texas
GARY L. ACKERMAN, New York DONALD A. MANZULLO, Illinois
BRAD SHERMAN, California WALTER B. JONES, Jr., North
GREGORY W. MEEKS, New York Carolina
DENNIS MOORE, Kansas JUDY BIGGERT, Illinois
MICHAEL E. CAPUANO, Massachusetts GARY G. MILLER, California
RUBEN HINOJOSA, Texas SHELLEY MOORE CAPITO, West
WM. LACY CLAY, Missouri Virginia
CAROLYN McCARTHY, New York JEB HENSARLING, Texas
JOE BACA, California SCOTT GARRETT, New Jersey
STEPHEN F. LYNCH, Massachusetts J. GRESHAM BARRETT, South Carolina
BRAD MILLER, North Carolina JIM GERLACH, Pennsylvania
DAVID SCOTT, Georgia RANDY NEUGEBAUER, Texas
AL GREEN, Texas TOM PRICE, Georgia
EMANUEL CLEAVER, Missouri PATRICK T. McHENRY, North Carolina
MELISSA L. BEAN, Illinois JOHN CAMPBELL, California
GWEN MOORE, Wisconsin ADAM PUTNAM, Florida
PAUL W. HODES, New Hampshire MICHELE BACHMANN, Minnesota
KEITH ELLISON, Minnesota KENNY MARCHANT, Texas
RON KLEIN, Florida THADDEUS G. McCOTTER, Michigan
CHARLES A. WILSON, Ohio KEVIN McCARTHY, California
ED PERLMUTTER, Colorado BILL POSEY, Florida
JOE DONNELLY, Indiana LYNN JENKINS, Kansas
BILL FOSTER, Illinois CHRISTOPHER LEE, New York
ANDRE CARSON, Indiana ERIK PAULSEN, Minnesota
JACKIE SPEIER, California LEONARD LANCE, New Jersey
TRAVIS CHILDERS, Mississippi
WALT MINNICK, Idaho
JOHN ADLER, New Jersey
MARY JO KILROY, Ohio
STEVE DRIEHAUS, Ohio
SUZANNE KOSMAS, Florida
ALAN GRAYSON, Florida
JIM HIMES, Connecticut
GARY PETERS, Michigan
DAN MAFFEI, New York
Jeanne M. Roslanowick, Staff Director and Chief Counsel
Subcommittee on Housing and Community Opportunity
MAXINE WATERS, California, Chairwoman
NYDIA M. VELAZQUEZ, New York SHELLEY MOORE CAPITO, West
STEPHEN F. LYNCH, Massachusetts Virginia
EMANUEL CLEAVER, Missouri THADDEUS G. McCOTTER, Michigan
AL GREEN, Texas JUDY BIGGERT, Illinois
WM. LACY CLAY, Missouri GARY G. MILLER, California
KEITH ELLISON, Minnesota RANDY NEUGEBAUER, Texas
JOE DONNELLY, Indiana WALTER B. JONES, Jr., North
MICHAEL E. CAPUANO, Massachusetts Carolina
PAUL E. KANJORSKI, Pennsylvania ADAM PUTNAM, Florida
LUIS V. GUTIERREZ, Illinois KENNY MARCHANT, Texas
STEVE DRIEHAUS, Ohio LYNN JENKINS, Kansas
MARY JO KILROY, Ohio CHRISTOPHER LEE, New York
JIM HIMES, Connecticut
DAN MAFFEI, New York
C O N T E N T S
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Page
Hearing held on:
April 28, 2010............................................... 1
Appendix:
April 28, 2010............................................... 41
WITNESSES
Wednesday, April 28, 2010
Henriquez, Hon. Sandra B., Assistant Secretary for Public and
Indian Housing, U.S. Department of Housing and Urban
Development.................................................... 4
Kinard, Keith D., Executive Director, Newark Housing Authority,
on behalf of the Council of Large Public Housing Authorities... 18
Oakley, Deirdre A., Associate Professor, Department of Sociology,
Georgia State University....................................... 20
O'Leary, Anthony, Vice President, Housing, the Public Housing
Authorities Directors Association.............................. 22
Puma, Joseph, Public Housing Resident, on behalf of National
People's Action................................................ 24
Purnell, Frederick S., Sr., Executive Director, Wilmington
Housing Authority, on behalf of the National Association of
Housing and Redevelopment Officials (NAHRO).................... 26
Rammler, David, Staff Attorney and Director of Government
Relations, National Housing Law Project........................ 27
Williams, Leonard, Commissioner, Buffalo Metropolitan Housing
Authority, on behalf of the National Low Income Housing
Coalition...................................................... 29
APPENDIX
Prepared statements:
Henriquez, Hon. Sandra B..................................... 42
Kinard, Keith D.............................................. 48
Oakley, Deirdre A............................................ 56
O'Leary, Anthony............................................. 65
Puma, Joseph................................................. 74
Purnell, Frederick S., Sr.................................... 78
Rammler, David............................................... 93
Williams, Leonard............................................ 100
Additional Material Submitted for the Record
Puma, Joseph:
Written statement of National People's Action................ 110
LEGISLATIVE PROPOSALS TO
PRESERVE PUBLIC HOUSING
----------
Wednesday, April 28, 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 10:09 a.m., in
room 2128, Rayburn House Office Building, Hon. Maxine Waters
[chairwoman of the subcommittee] presiding.
Members present: Representatives Waters, Cleaver, Green,
Ellison, Donnelly, Driehaus; Capito, Marchant, and Jenkins.
Also present: Representative Castle.
Chairwoman Waters. Good morning. This hearing of the
Subcommittee on Housing and Community Opportunity will come to
order.
I would like to thank Ranking Member Capito and the other
members of the Subcommittee on Housing and Community
Opportunity for joining me today for this hearing on
legislative proposals to preserve public housing.
The public housing program is facing a crisis. After years
of chronic underfunding, many public housing units are in a
state of disrepair. HUD estimates that the current backlog of
deferred repairs amounts to $24.6 billion, and that is why I
fought to include $4 billion in the stimulus bill for public
housing and capital repairs. Unfortunately, given the massive
amount of funding needed by the program, this funding, however
essential, was only a drop in the bucket.
Perhaps in response to this funding crisis, some public
housing agencies have decided to get out of the public housing
business. Current Federal law provides three avenues for
agencies to eliminate public housing: demolition; disposition;
or conversion to vouchers. I am concerned about all of these
actions, especially because there is no Federal law to require
the one-for-one replacement of lost units.
Due to the lack of a one-for-one replacement requirement,
over 200,000 public housing units have been permanently lost
since 1995. The City of Atlanta has demolished all of its
25,000 public housing units. The San Diego Housing Commission
has converted its entire stock of 1,366 public housing units to
tenant-based vouchers. And I am hearing more and more reports
of public housing agencies wanting to leave the program and
serve families with vouchers.
I am concerned about the use of vouchers to replace public
housing for several reasons. First, public housing is more
effective than vouchers at serving low-income families in areas
with a limited supply of affordable housing, low participation
rates in the voucher program, and high rates of gentrification.
Second, public housing serves a population of people who
cannot be served well with vouchers. Public housing is
generally home to the hard-to-house families who have certain
challenges that prevent them from renting a unit in the private
rental market. For these people, public housing is their
housing of last resort.
Finally, public housing is always there. There are always
ebbs and flows in the private rental market, which is why we
cannot rely entirely on it to serve our most vulnerable
populations. That is why Chairman Frank and I have drafted
legislation to preserve our public housing stock.
My draft bill, the Public Housing One-for-One Replacement
and Tenant Protection Act, would require the one-for-one
replacement of all demolished, disposed, or converted public
housing units, and provide essential protections for tenants in
these properties.
Mr. Frank's draft bill, the Public Housing Preservation and
Rehabilitation Act, would provide public housing agencies with
the financial tools they need to achieve one-for-one
replacement and repair units before they are too far gone.
Both of these proposals are long overdue. The
Administration has its own proposal to preserve public housing,
which will be the focus of a separate hearing next month. I am
pleased that we have an Administration that has taken the
crisis in public housing seriously. And I look forward to
working with them on preserving this valuable resource.
I am eager to hear the testimony of our witnesses today,
and I would now like to recognize our subcommittee's ranking
member to make an opening statement. Mrs. Capito?
Mrs. Capito. Thank you, Madam Chairwoman, and thank you for
holding this hearing on public housing in general, and
specifically on the two draft bills offered by Chairman Frank
and Chairwoman Waters to reform public housing units.
The issues surrounding public housing are complex, and have
generated lively discussions over the years that center on how
best to address the needs of low-income families.
According to an article written by Howard Husock, with the
Manhattan Institute, entitled, ``Public Housing and Rental
Subsidies,'' Federal operating subsidies for public housing
have risen from $6.5 million in 1969 to $4.4 billion by 2009.
Mr. Husock points out that about 1.1 million households
currently inhabit federally-financed public housing, down from
a peak of 1.4 households in 1991.
The Federal Government began funding the production of
housing for low-income families, or public housing, during the
Great Depression. While well-intended, most people agree that
large public housing projects have done little to promote a
better life for low-income families seeking assistance.
Instead, public housing developments have become, in some
cases, places that were characteristics of large concentrations
of poverty, high crime, and poor academic achievement.
The Section 8 Voucher Program and the HOPE VI Program both
were established as an answer to the public housing model that
turned into cities of despair. As we have come to grips with
the failure of the public housing model, hundreds of thousands
of public housing units have been demolished. While I recognize
that there is a general concern, and I share the concern over
the loss of these units, implementing policies such as one-for-
one replacement and bans on the demolition of dilapidated
public housing only force us, I believe, to repeat some of the
mistakes of the past.
These housing units should be an opportunity to better
oneself, not trap individuals into a troubling situation.
Congress should, instead, seek innovative solutions that
promote public/private partnerships to housing, and that do not
include a hefty price tag for the taxpayer.
Chairwoman Waters, I look forward to hearing our witnesses
today, and to working with you to find new cost-effective
solutions that will allow us to help those in need. I yield
back.
Chairwoman Waters. Thank you very much. Mr. Cleaver, for 2
minutes.
Mr. Cleaver. Thank you, Madam Chairwoman. I agree 100
percent with Ms. Capito, that we made some monumental mistakes
with public housing. There is absolutely no way to look at it
but that we made mistakes.
I lived in public housing until I was almost 13 years old,
and my father eventually bought a house outside the Black
community where we lived, and where all the Black people lived,
and then had it moved to that community. And it created a level
of pride that I cannot articulate.
But I also understand that there is a very serious need for
low-income housing. In 1937, when public housing came into
existence, we had about 128 million Americans who lived below
the poverty guidelines. Today, we have 309 million. And so, if
you look at percentages, we have a much greater need for public
housing today than we did in 1937.
One of the things we have to do is to make sure that there
is always safe, affordable housing. One of the problems, when
people live in dirty, dilapidated, decrepit housing, is that
they are subjected to things that people don't even imagine,
like eating lead paint off the walls, and doing enormous damage
to their capacity to learn later on in life. And then,
eventually becoming the stereotype, because of where they have
come from.
So, I think that we need to really look at this issue, try
to avoid mistakes, learn by the mistakes of the past, and then
continue a program that has served our Nation well. I yield
back, Madam Chairwoman.
Chairwoman Waters. Thank you very much. Mr. Donnelly?
[No response.]
Chairwoman Waters. And I think Mr. Driehaus is there.
Mr. Driehaus. Thank you, Madam Chairwoman. I just want to
say thank you for holding this hearing and the hearing next
month. Obviously, public housing is a challenge for all of our
communities, and certainly there have been mistakes made in the
past.
But as we move forward and think about the balance that we
need to strike between preservation of units, construction of
new units, and how the voucher program ties into that, I think
answering the very tough questions is critically important for
this committee.
So, I applaud you for having the hearing, and I look
forward to working with you on the legislation.
Chairwoman Waters. Thank you very much. I am pleased to
welcome our first distinguished guest. Our first witness will
be the Honorable Sandra Henriquez, Assistant Secretary for
Public and Indian Housing, United States Department of Housing
and Urban Development. Thank you for appearing before the
committee today. And, without objection, your written statement
will be made a part of the record.
You will now be recognized for 5 minutes to summarize your
testimony.
STATEMENT OF THE HONORABLE SANDRA B. HENRIQUEZ, ASSISTANT
SECRETARY FOR PUBLIC AND INDIAN HOUSING, U.S. DEPARTMENT OF
HOUSING AND URBAN DEVELOPMENT
Ms. Henriquez. Thank you. Good morning, Chairwoman Waters,
Ranking Member Capito, and members of the committee. And thank
you for this opportunity to appear before you to talk about
HUD's vision for the preservation of affordable housing.
Like you, Chairwoman Waters, I have dedicated my entire
career to developing, managing, and preserving affordable
housing. And, for me, the goal has always been to provide a
unit that families can be proud to invite friends to, to raise
a family in, and a real place to call home.
So, for me, providing rental assistance to those families
is, by far, the Department's single most important purpose.
Public and assisted housing is a critically important resource
for 4.6 million families today. Many of these families,
including 70 percent of the public housing residents, have
extremely low incomes. And although that number of families
served seems impressive, the reality is that the demand for
safe, decent, affordable housing far exceeds the supply.
With much of the federally-assisted housing portfolio more
than 30 years old, we are losing units at an alarming rate. And
since the 1990's, we have lost over 150,000 public housing
units, primarily as a result of deterioration. Public housing
authorities have had little choice but to either demolish or
dispose of units that were unsalvageable. And today, through
redevelopment, demolition, disposition, and conversion to
Section 8 vouchers, we lose more than 10,000 public housing
units every year.
The public housing program in particular is wrestling with
a very old physical stock, and a backlog of unmet capital needs
that may exceed $20 billion. The capital needs of our Nation's
affordable federally-assisted housing stock too are
substantial, and are too urgent for us to continue in this
model.
Given the current fiscal environment, it's clear that the
Federal Governmental loan will not be able to provide the funds
needed to bring properties up-to-date and to preserve them for
future generations. We must identify new funding streams for
public and assisted housing.
In addition to finding new resources to recapitalize the
inventory, we must also establish ground rules for the
redevelopment of public housing. This Administration believes
that one-for-one replacement should be the default position.
You have seen it in our Choice Neighborhoods legislation, and
you will see it echoed in the Transforming Rental Assistance
bill that we hope to get before you in the next few weeks.
Chairwoman Waters, you know these issues all too well. On
behalf of the Department, I want to thank you for your passion
and your vision and your leadership on affordable housing
preservation.
I also want to acknowledge your legislation to support
preservation by revising the laws governing public housing
demolition and disposition. The Department supports the intent
of the Public Housing One-for-One Replacement and Tenant
Protection Act of 2010 to stem the loss of public housing, and
to protect the voice of tenants in local land use and
development decisions.
Responsibly, the bill recognizes that some public housing
developments are obsolete, and must be reconfigured, even to
the point of fewer units on site, and that some sites are
simply not suitable for housing. We support the bill's solution
in these cases to allow off-site development to fulfill that
requirement.
We note that the bill would also allow public housing units
to be funded through other means, such as project-based
assistance. And, as I will discuss later in my testimony, I
believe that the goals of public housing can be met without
relying on traditional funding resources.
However, housing authorities will not necessarily have the
resources to fund the amount of housing production envisioned
by the bill. In that regard, the bill hearkens back to the
early 1990's, where distressed housing remained vacant or,
worse yet, housed low-income families, largely because housing
authorities had insufficient resources to replace the units on
a one-for-one basis.
I would also like to recognize the many contributions to
affordable housing preservation made by Chairman Frank, who
most recently introduced the Housing Preservation and
Rehabilitation Act of 2010. The driving force behind both
pieces of legislation is a strong desire to have a true,
permanent, public, and assisted housing preservation strategy.
And of course, as great as the capital needs are, we know
that the depth of human need is even greater. Countless
residents still remain trapped in neighborhoods of concentrated
poverty, because moving means giving up their subsidy. These
families not only lack mobility, they lack the opportunity to
choose where and how they want to live.
And so, today we face a choice of our own. We can approach
these challenges piecemeal, as we have for decades, or we can
deal with them now, together, in a comprehensive way to put our
rental assistance programs on a more sustainable footing for
years to come.
Now is the moment to reverse permanently the long-term
decline in the Nation's public and assisted housing portfolio,
and help move HUD's rental housing programs into the housing
market mainstream. And to address these issues, HUD proposes to
launch an ambitious multi-year preservation effort called
``Transforming Rental Assistance.'' It would preserve public
and assisted housing for the long term by providing a subsidy
stream similar to project-based vouchers and project-based
Section 8. It would allow housing agencies to obtain more
private financing than existing public housing subsidies do.
And by providing a reliable funding stream, and placing
participating properties on a sustainable footing from both a
physical and a financial standpoint, owners will be able to
leverage private financing to address immediate and long-term
capital needs, freeing them from the need for separate and
annual capital subsidies.
In the 2011 budget, the phase of TRA will provide $350
million to preserve approximately 300,000 units of public and
assisted housing, increase administrative efficiency, leverage
private capital, and enhance housing choice for residents. With
this request, we expect to leverage approximately $7.5 billion
in other State, local, public, and private capital investment--
$290 million will be used to fill the gap between operating and
capital funds otherwise available for converting properties to
the first-year costs of the new contracts.
We have proposed also using $50 million in services to
expand families' housing choices and supporting informed
decisions by residents who choose to move, including resources
to encourage landlords in a broad range of communities to
participate in the Housing Choice Voucher Program.
In closing, TRA reflects HUD's commitment to preserving
affordable housing with a reliable, property-based, long-term
rental assistance subsidy, supporting affordable housing
reinvestment, neighborhood revitalization efforts, and bringing
enhanced opportunity and choice to residents.
I hope that as we move through this process, we can count
on your support in advancing what we believe is a real
breakthrough in public and assisted housing preservation
efforts.
Thank you again, and I welcome any questions you may have
at this time.
[The prepared statement of Assistant Secretary Henriquez
can be found on page 42 of the appendix.]
Chairwoman Waters. Thank you very much. I would like to
make sure I have the numbers right here. The capital fund is
the fund that you fund the capital cost for public housing out
of, is that right?
Ms. Henriquez. That's correct.
Chairwoman Waters. And what is that fund, presently? How
much is that? Is that $2.45 billion?
Ms. Henriquez. In the 2011 budget, it's proposed at $2.044
billion, I believe, or thereabouts.
Chairwoman Waters. That's 2011. What is it for 2010?
Ms. Henriquez. Oh, I'm sorry. That is correct, $2.45
billion, thank you.
Chairwoman Waters. 2.45--
Ms. Henriquez. Yes, right.
Chairwoman Waters. --is what we're operating under now, is
that correct?
Ms. Henriquez. That's correct, in 2010.
Chairwoman Waters. And the request for funding year 2011 is
2.044?
Ms. Henriquez. That's correct.
Chairwoman Waters. So that's a reduction.
Ms. Henriquez. Yes.
Chairwoman Waters. Tell me about that.
Ms. Henriquez. The change in the amount was tied to the $4
billion that was granted by the Congress toward housing
authorities to use under the stimulus package. And, indeed,
that money was used in addition to ongoing capital needs for
those housing authorities.
The Department made--and the President's budget made--hard
decisions about what to fund, and how to fund it. And so the
issue for HUD was to fully fund its Rental Assistance Program.
And, subsequently, other programs across the HUD Department
took some cuts.
Chairwoman Waters. So what we are hearing is that you share
my concerns and Mr. Frank's concerns about preservation of
public housing, and understand that we need money in order to
revitalize or to renovate, to--I don't even know if we are
talking about expansion. But yet we have a reduction in the
capital fund that would accomplish that. Is that right?
Ms. Henriquez. I guess I would characterize it a little bit
differently there. What we are looking for is that moving to a
stabilized funding system, such as the transformation of rental
assistance, would get us out of the mode of having to rely on
annual appropriations that have been uneven over the past
several decades, in order to get capital improvements done by
housing authorities and multi-family owners.
Chairwoman Waters. How do you do one-for-one replacement if
you have decreasing amounts in the capital fund?
Ms. Henriquez. One-for-one replacement, I think, is really
not a capital item as it is--capital, I think of as preserving
the existing units in which people live, or bringing back some
units that have yet not been demolished and are salvageable and
able to get back into re-occupancy.
The capital program, as it is currently constituted, really
is not situated to develop and produce new units. Other
mechanisms are needed to do that.
Chairwoman Waters. If you had your choice, how much money
would you recommend for the capital fund if you had any amount
that you could get from this Congress? What is needed?
Ms. Henriquez. I don't even begin to know how to answer
that question.
[laughter]
Ms. Henriquez. Well, let me try to address it in this way.
We believe--and I think you have echoed this as well--that the
program, the unmet capital needs for just public housing--we're
not talking about the other assisted housing stock--exceeds $20
billion. And that is a stake-in-the-ground number today.
Moving forward, as properties continue to age, and as
obsolescence continues to increase, I think those numbers will
continue to increase as well, unless there is some definitive
program that stems the tide, that creates enough capital
infusion at this present time, so that we don't lose more
units.
Chairwoman Waters. Okay. Let me just say that I was curious
about your comments about the backlog of public housing capital
repairs. And it seems that the Administration has decided that
it will not seek appropriations to address this backlog. Is
that an accurate assessment? I think we have gone over that,
basically, in that is an accurate assessment. Is that right?
Ms. Henriquez. I do not believe that is an accurate
assessment, that--we really are looking for this transformation
of rental assistance as a way to infuse the capital programs
and leverage other dollars to really address the capital needs
of the portfolio--
Chairwoman Waters. Okay, you talked about transforming the
Rental Assistance Program. But wouldn't that also require
additional appropriations?
Ms. Henriquez. What we have asked for in the 2011 budget,
the first phase, is this $350 million, $290 million of which
would be the conversion of 300,000 units, both of public
housing and assisted housing.
We believe doing that, on its own, would leverage $7.5
billion of capital money outside of the annual appropriation
from the Federal Government.
Chairwoman Waters. Okay. Well, it seems that the
Administration is committed to some amount of reinvestment in
public housing, but the amount appears to be significantly less
than the $24.6 billion backlog.
With that, let me go to Mrs. Capito.
Mrs. Capito. Thank you, Madam Chairwoman. I would like to
thank the witness. I would like to talk a little deeper about
the current appropriated funds for the capital fund. You
mentioned that it was $2.45 billion.
How much of that is actually out the door at HUD, and how
much do you have in a backlog of funds at HUD that have yet to
be appropriated to the housing authorities?
Ms. Henriquez. [No response.]
Mrs. Capito. It's my understanding that you're running a--
you can't get the money out the door at HUD to sufficiently--
convince me that greater funds is going to be--what I'm
wondering is, do you have a backlog at HUD of money that hasn't
gone out the door for this--in this capital fund?
Ms. Henriquez. That question--I am not sure of how much
money sits still to be drawn down by housing authorities.
Mrs. Capito. Right.
Ms. Henriquez. The allocations have gone out, people know
what their capital needs are. But it's a reimbursement and a
draw-down program.
If I can use as an example, the stimulus money, $3 billion
was issued to housing authorities. And within approximately 30
days of that money becoming available from the Congress to HUD,
that $3 billion was allocated to all of the housing authorities
by formula, much like we do our capital fund.
So, getting the money out has not been a problem. In
addition, housing authorities obligated that money within the
timeframe that was allocated by the bill. And so, there is
clearly an ability for housing authorities to use the money, to
use it expeditiously. They have planned for it, and they put it
to good use as soon as they get their contracts in place, and
the work is awarded.
Mrs. Capito. So, in the stimulus bill, there was a
timeframe that was allotted that it had to be obligated and
used. And if it wasn't, it would go back, probably, into the
formula, I would imagine.
But--and so, I guess maybe the presumption I am dealing
with--and must be erroneous--that there isn't a current backlog
of $20 billion in the HUD capital fund where maybe it is
obligated but it hasn't--since it's in a reimbursement formula,
it hasn't been actually been sent off to the--
Ms. Henriquez. No, I think there is probably a little bit
of a disconnect.
When we talk about $20 billion in unmet need, it's what is
out there that should be fixed, that needs to be fixed, but
there is no money to fix it. So HUD is not sitting on $20
billion worth of money yet to expend to get to housing
authorities.
Mrs. Capito. Okay. Then when did you do your capital needs
assessment to get to the $20 billion figure?
Ms. Henriquez. It's an accrual number that has been
building up over time, and we are currently in the midst of
doing a capital needs assessment--
Mrs. Capito. Good.
Ms. Henriquez. --which we expect will be done, probably, in
the next 3 to 4 months, which will really tie down that number.
And, in addition, we are moving forward to do individual
property or physical needs assessments, which would fine-tune
at each housing authority, each development, what the actual
capital needs are, property by property.
Mrs. Capito. Yes. Well, I would like to highlight my public
housing authority in Kanawha County, Charleston, West Virginia,
where I live. They have done some very creative things with
replacing dilapidated housing with making families and the
dwellings, the new dwellings for the public housing units, very
attractive. They are building green, and they are spreading
them out through the city, which I think is much, much better.
They are also highlighting seniors and disabled folks, to make
sure everybody has access, disability access, to the units. So,
I would like to highlight that.
One of the problems, I think, when the units came down that
they were replacing, is there was a high incidence of
unoccupied units, because they were either undesirable--what is
the--across-the-board do you have a figure you look at that you
think--is it 20 percent, or is it--is that too high--that are
unoccupied public housing units that are available but are not
occupied?
Ms. Henriquez. Okay, I'm being handed a note.
Mrs. Capito. Yes.
Ms. Henriquez. At this point, I don't know what that
percentage is, or the vacancy rate. We can get you that
information.
Mrs. Capito. Yes.
Ms. Henriquez. I do believe that, having practiced and run
a housing authority for 13 years, if I had vacant units, they
were in several different kinds of conditions.
There were vacant units through the normal course of
turnover that, with my regular ongoing maintenance staff, we
would put back online and reoccupy.
There were then a number of units that needed a greater
level of renovation in order to get back into the marketplace.
And those, I would either--if I had the opportunity to put them
on through maintenance, extraordinary maintenance funds, I
would do that. If I had capital, I would do that. If not, I
would have to make really difficult decisions.
Do I replace a roof or do I put a unit back online? And
maybe the choice was to replace the roof and forego the unit,
because without the roof, I would lose units that would be then
uninhabitable because they would not be watertight. Those are
the kinds of decisions housing authorities make every single
day because the capital fund has not kept pace.
And that's why we believe, under the transformation of
rental assistance, that over time, housing authorities could
take the streamlined subsidy source and do with it what they
cannot do now with the public housing operating subsidy, and
that is really go into the commercial marketplace, leverage
other kinds of equity, and be able to then really get a handle
on not just the capital needs, but really doing the kinds of
things you have talked about with your housing authority,
really trying to go green, doing some retrofits, making it
more--have more market or curb appeal--
Mrs. Capito. Right.
Ms. Henriquez. --blending it better back into the rest of
the housing stock within the rest of the community, so that it
might be almost indistinguishable from other housing, other
types of affordable housing or market housing that's on the
landscape.
Mrs. Capito. Okay. If I could just--I know my time is up.
You're going to get me the vacancy rate. And then also, if you
could, check back into the--because I have conflicting
information--on what kind of backlogging you might have in the
Capital Reserve Fund that remains unspent. Thank you.
Ms. Henriquez. Okay.
Chairwoman Waters. Thank you. Mr. Cleaver?
Mr. Cleaver. Thank you, Madam Chairwoman. Ms. Henriquez?
Ms. Henriquez. Yes?
Mr. Cleaver. Would you agree with me that since the Housing
Act of 1937, we have had few defeats in domestic policy to
match the defeats we have experienced in public housing?
Ms. Henriquez. I would agree.
Mr. Cleaver. Then would you agree that maybe instead of
reducing the amount of funding for public housing, we ought to
set forth the principles of reform for public housing, so that
we can spend our dollars more wisely?
Because one of the problems I think you may agree with is
that in many of the public housing developments around the
country we have not had the money to maintain the units at a
higher level. Therefore, we witness a decline. And then, in
many instances, say, ``Well, we tried.''
Do you agree that if we used more money to maintain and
upgrade public housing, some of the issues that we are raising
today would not be in existence?
Ms. Henriquez. I do believe, as a former practitioner, that
if indeed the amount of funding required to adequately maintain
the public housing portfolio had kept pace with the need, we
would not be here, having this discussion. That has not been
the reality.
And if I look historically at the reality, it seems to me
that we are probably going to repeat the past. So the issue is,
how do you get enough money into the portfolio at a particular
point in time, so that we are not always having the
conversations or that housing authorities are not making what I
would consider Hobson's choices about roofs versus units back
online, what's to be--what's distressed, what you let go, and
what you have to convert out of the portfolio.
Again, I come back to how do we think about a program,
which is why I will tell you, quite frankly, that in my housing
authority days in Boston, I really did try and dream more
expansively of a subsidy or some sort of program that would
provide sufficient subsidies that I could be the best possible
landlord for my portfolio, and how I could get enough money
into my portfolio to operate to make the kinds of good
decisions that my colleagues, who were doing other types of
assisted housing in the real estate marketplace, were able to
make.
Because I was not able to refinance my property and
leverage the equity, and the value of that property, to make it
work for me--more importantly, to work for the residents who
lived in those properties, I didn't have the tools necessarily
readily available, nor sufficient dollars to leverage enough
money so that I could transform those properties to really have
a level of comfort and liveability to--a standard that I
described to my staff is, would I want my grandparents to live
there, or my favorite aunt and uncle? That's the standard.
And I think this transformation of rental assistance
provides the mechanisms to get both a sustainable subsidy and
to be able to have housing authorities and other owners
leverage into the marketplace private dollars to accomplish
that kind of work.
Mr. Cleaver. Yes, I think you also answered just then the
question raised by the chairwoman about if you had a chance to
put money in, what would you do. I think you just kind of
answered it. You didn't put a figure on it.
But I headed a housing authority. I didn't run it. I was
mayor, and I appointed the housing authority, and then fired
people when things went bad. We were able to get the first HOPE
VI project in the country in Kansas City.
And so, I am concerned about why we would want to move to
acquiring Section 8 properties, or changing some of the public
housing into Section 8, and the same with HOPE VI. What is the
advantage there?
Ms. Henriquez. First of all, there has never been--and
there still isn't--enough opportunity, enough resources to
transform--HOPE VI-like transform--developments around the
Nation that need that kind of transformation. Not every
property does, but there are still a number of properties that
do.
And again, I keep coming back to the TRA, because rather
than having to think about wholesale redevelopment in that way,
some properties, a majority of properties, really just need a
level of capital infusion to continue to operate in the best
possible way.
This is not an opportunity to take one away from the other.
In fact, we have a Choice Neighborhoods bill which really
advances and builds on HOPE VI. This is an opportunity for us
not to pit a Section 8 Program against a public housing program
against any other form of affordable or assisted housing. It
really is to meld them all into as much of a uniform program as
possible, and move the entire portfolio forward, so that we
have affordable housing, a broad continuum of affordable
housing, to service the people who need it, and hopefully to
think about expansion at some point moving forward.
Mr. Cleaver. Thank you.
Chairwoman Waters. Thank you very much. Mr. Marchant?
Mr. Marchant. Thank you, Madam Chairwoman. In Dallas, where
I represent, several years ago a judge made the decision that
our public housing was too concentrated in areas of the city
that were not desirable areas of the City, and we got into a
very large circle. It wasn't a nice part of the City because
there were public housing there, and then it just--and they
seemed to be bouncing off of each other.
So--and Alphonso Jackson was the chairman of our public
housing authority. And the judge ordered, and Dallas began to
implement a program of destroying, tearing--emptying out,
destroying, tearing down, selling the land to private
developers, and then issuing vouchers to the tenants to go back
into those same units, sometimes in the same part of town, but
usually in other parts of the town.
And then, a proliferation of just individual housing units,
where people could go to any of the suburbs with that housing
voucher in hand, and disperse into the entire greater Dallas
area. That seems to be the program that the public--in my
area--seems to be most behind. And it--because it gives a lot
of choice to the person who has a voucher in their hand. It
gives them the opportunity to pick the neighborhood, the school
district. They have--and, frankly, the vouchers are very
generous in our area, so that it is not as limiting.
Wouldn't it be prudent or--in our area, it would be more
prudent to take--this is my opinion--those units, the money
that's fixing the roof, to not fix the roof, but to take that
unit, take that money, and give it to a family who can then
take that voucher out into a community that they would like to
live in, and then take those properties, allow developers to
come into those properties, own those properties, and then
convert that to a voucher program?
In my mind, the public housing authority function in our
area at some point, in my opinion, will become just a place
where people come to get their vouchers. Is that theory all
over the United States, or just in our area?
Ms. Henriquez. I think that theory is in some places around
the United States. I would say that this is not an either/or,
and we're not looking to say one solution is better than
another solution.
There is so much unmet need that we need to figure out both
how to stabilize what we have, and then figure out if there are
other opportunities and other ways to make affordable housing,
whether it's through vouchers or it's through actual hard
units, whatever it is, and have the freedom of a housing agency
in its locality be able to be what I would consider a major
player to help shape the affordable housing marketplace in that
community.
Vouchers work in some places; they don't work well in
others. It depends on a variety of market conditions. And, in
addition, it depends on how many landlords are willing to enter
into that program. Under TRA, we have proposed this $50 million
in the first year of the $350 million in the 2011 budget to
really help residents make informed choices if they want to
take a voucher and move from a converted property, and to ask
and get other landlords, and to encourage a broad segment of
landlords in suburban areas in neighboring communities to
participate in the program, again, to provide greater
opportunities for people with vouchers to use.
But that's not the only solution. We also need to make
neighborhoods and communities strong, so that people can choose
whether they're going to stay in their community because--so
they can make choices the way the rest of us make choices on
family, on jobs, on educational opportunities, and so on.
Mr. Marchant. And I guess my point would be there are many
opportunities for private developers to come into those same
communities, into those same units, and preserve them, restore
them, preserve them, manage them, own them, take on the capital
costs, and then let the same people stay there, but the
government not be--have the capital investment in them, or be a
capital investment partner. They might provide the land or the
shell, and then the funds to finance it.
Chairwoman Waters. Thank you very much. Mr. Green?
Mr. Green. Thank you, Madam Chairwoman, and thank you,
Madam Assistant Secretary, for being with us today.
As an aside, you indicated that you worked in Boston. Is
this correct?
Ms. Henriquez. Yes, sir.
Mr. Green. Are you familiar with the Organization for New
Equality? Ambassador Charles Stith was--
Ms. Henriquez. And Reverend Joe Washington?
Mr. Green. Yes.
Ms. Henriquez. Yes.
Mr. Green. Yes, I--
Ms. Henriquez. Reverend Stith, who used to be my pastor at
Union United Methodist Church.
Mr. Green. I had the preeminent privilege of serving on the
board and found it to be a very helpful organization in the
area of housing.
Thank you for your service.
Ms. Henriquez. Thank you.
Mr. Green. And I would like to start with the actual number
of persons who need assistance. It is somewhat difficult to
ascertain the actual number, or get the empirical evidence,
because we have many housing agencies that actually have a cut-
off point. And once you get to the cut-off point, other persons
are not put on a list such that you know actually how many
people are waiting.
How do you deal with this notion that the cut-off point
exists but we know that there are just thousands of persons who
are trying to get on a list? I get calls from persons who tell
me that, ``I can't get on a list, I have been waiting for some
long period of time to try to just get on the list, so that I
can wait a long period of time to get some help.'' How do we
deal with that?
Ms. Henriquez. I think that's a very good question, and I
don't have a good answer for you. A lot of housing authorities
will close their waiting lists, because the wait, in terms of
the turnover and the available units, begins to be 5 or 10
years long.
And philosophically, a number of housing authorities
believe that is just a very long time. Circumstances change,
and finding people after a long period of time is more
difficult and not helpful. And, therefore, they try to--they
close a list, they try to exhaust that list, and then reopen it
to try and refresh it and take new names and new positions.
The other problem with how to try and quantify the need is
really tied to the way in which programs work, not just on the
public housing side, but on virtually every assisted program I
have known. People can come apply either for a housing
authority at a central location, but people apply at multiple
places.
So, you could apply at the housing authority for its
Section 8 Voucher Program, you can apply for its public housing
program. You apply all over the place to try and maximize your
opportunities to get up on the list, and we don't--
Mr. Green. Permit me to ask this question. Would it be
helpful--and I have been giving some thought to the legislation
to do this--but would it be helpful if you had some means by
which you could understand the list, and know the number on the
list, but also know the number of persons who would like to be
on the list? Would it be helpful in acquiring the empirical
evidence necessary to make the argument that we have a problem
that may be greater than we actually realize? Would that be
helpful in any way?
Ms. Henriquez. I think the data, hard data, is always
helpful. I think that would tell us sort of the breadth of the
problem. I would caution, I think, that the breadth of the
problem as defined today might change tomorrow. And so, it
could always be somewhat of a shifting number. But I think it
would not be unhelpful.
Mr. Green. Okay, thank you. Moving to another area,
literally, Louisiana became everybody's congressional
district--New Orleans, especially--after Hurricane Katrina. I
was with the chairwoman when we went to New Orleans and we
looked at a number of projects there. And they have made some
strides, and they have constructed new, they have demolished
some of the things, some of the projects that were
unacceptable. And there was a promise made of one-for-one
replacement in New Orleans.
I know that this is something that you have inherited. You
may not be privy to the intelligence as it relates to this
particular promise that was made. But my belief is that the
promise was one that was made under the last Administration for
one-for-one replacement in New Orleans.
And my question is, if you know--and I'm not trying to--
this is not a ``gotcha'' moment--but if you know, what is the
status of one-for-one replacement in New Orleans?
Ms. Henriquez. I have to say honestly that I do not know. I
will ask those questions. It is something I am just hearing at
this point for the first time, so I would like to be able to
get that information for you.
Mr. Green. Okay. I would welcome your sending the
information to me and other members of the committee, as well.
I have a desire to know this, because the people are of concern
to me. I have an affinity for the City, because I was born
there. And it would be very helpful. I get many inquiries about
housing in New Orleans, and it would be very helpful if you
could share this intelligence with me.
Madam Chairwoman, I thank you for the time. I yield back.
Chairwoman Waters. You are certainly welcome. Mr. Driehaus?
Mr. Driehaus. Thank you, Madam Chairwoman. I just have a
couple of questions as to how the one-to-one replacement would
work. I don't argue with it in principle. I believe it makes a
lot of sense. But I guess my question is to the legislation and
the unintended consequences of some of the restrictions in the
legislation.
I will give you an example. In a neighborhood I represented
as a State representative, there was a one-for-one replacement
restriction on site for housing property. Over the 15 or 20
years of that development, the neighborhood changed rather
dramatically during that time, yet the covenant was still in
place. By the time they wanted to redevelop the site, many of
the units were already vacant. The neighborhood actually wanted
to make it an owner-occupancy site for moderate-income
families, because there had been so much low-income housing in
the community that it really had tipped the balance into low-
income housing.
And so, what we wanted to do was create a variety of
housing, and allow opportunities for people to move into owner-
occupied housing. We were prohibited from doing so, because of
the one-for-one replacement requirement on the site. And that's
really my concern here. When I look at the legislation, and I
see that one-third of it has to be on site, circumstances
change with regard to the site and the surrounding areas.
Do you believe that the restrictions in the draft are
appropriate? Or do you see some unintended consequences
associated with that?
And on the flip side, I noticed that the remaining housing
we're trying to place into areas of low concentration. Again, a
noble goal. But the cost associated with that is very high. And
when you look at metropolitan housing authorities, are we
giving them the resources necessary to allow them to actually
do that? Because the costs are quite high if you're going out
to these low-poverty areas and trying to find replacement
units.
So, I guess what I'm asking is, is it better for us to be
less restrictive when it comes to how a metropolitan housing
authority deals with the one-to-one replacement issue than the
restrictive nature that I see in the language?
Ms. Henriquez. I don't mean to seem to be sidestepping your
question, but the bill is as proposed by Ms. Waters. And so the
one-third and the--with the--I would prefer that be a
conversation that maybe you all work out.
We do understand unintended consequences, we do understand
cost issues. All of those I think are really worthy issues to
be discussed. I think, as I have said before in my testimony,
the intent of the legislation is really something that we, as
an Administration, support. The specifics and the details we
probably need to have more conversation.
Mr. Driehaus. And I am happy to have those conversations
with the chairman. I guess what I'm asking--and again, I'm not
suggesting that we don't have the one-for-one replacement.
I am just asking whether or not it helps the Administration
and the metropolitan housing authorities--and perhaps this is
best left for the next panel--as to should we be more
restrictive or less restrictive when it comes to the actual
placement of the units, or should we allow that flexibility up
to the housing authority and up to HUD?
Ms. Henriquez. [No response.]
Mr. Driehaus. And with that, I will yield back, Madam
Chairwoman.
Ms. Henriquez. Thank you.
Chairwoman Waters. If the gentleman will yield, before we
go to our next panel, I want to make sure that our members
understand rental transformation.
As I understand it, the value of the units would increase
through this--with this $350 million that you are requesting.
And, as it has been explained to me, if you have a unit, say,
that's worth $600, with the increased appropriation that unit
may somehow become a $1,200 unit, and you could use that money
to revitalize or renovate public housing and--or fix up that
unit, or that unit now becomes valuable to the private market.
And as you look at how you get more investors, you could
mortgage this property.
And I am wondering--and my real concern is--is this a move
toward privatization? I think Mr. Marchant was asking a
question about privatization in a little bit different way. I
have some concerns about privatization that are probably
different from his. Can you straighten us out? Can you clear
this up?
Ms. Henriquez. I will certainly try. This is not a move
toward privatization. The ownership stays with the public
entity. We believe that housing authorities will continue with
their public mission. We don't see a change in the demographics
of people served. Therefore, rent will still be at 30 percent
under the Brooke Amendment, as they are now.
The real crux of this program and this transformation is to
preserve the property for the longer term, to use the value of
the property in the marketplace, to preserve it for the longer
term, to really embed market principles--and by that I don't
mean private sector, I mean indeed how that property operates,
how it looks, how it performs and responds to the residents who
live there, and how it fits better into the community in which
it's located.
Chairwoman Waters. If you mortgage that property, and you
default on that mortgage, what happens to the property?
Ms. Henriquez. We are talking about that, how we minimize
risk, how we look at FHA insurance or other kinds of government
backing so that we don't default.
I will tell you that, given the work that housing
authorities have done in the past and using these financing
techniques, the default rate of housing authorities has been
zero.
Chairwoman Waters. But the fact of the matter is, if you
default on that housing, if you mortgage it, you lose it,
right?
Ms. Henriquez. I'm sorry, would you repeat that, please?
Chairwoman Waters. If you default on mortgage property, you
lose it. The investor repossesses the property. That's
basically what happens in the market.
Ms. Henriquez. In this instance, if there were to be a
default, HUD is in the first position so we don't see this
property going into private hands at all. People stay in place,
the ownership stays in place, in terms of it being publicly
owned.
Chairwoman Waters. I don't see how that works.
Mr. Marchant, I know that you were interested in the
privatization issue. If I may, with unanimous consent, I would
grant you another minute or so, so that you could pursue your
question that was not completely answered about allowing the
private sector to take over public housing in some way that you
envision.
Mr. Marchant. Thank you. My question was, if the government
owns the existing housing, in many instances, the underlying
asset is the land, and the zoning, in many instances, is very
valuable.
And my question was, are there programs where HUD, the
owner, the government, comes in and says, ``We are going to
contribute the land, and maybe even the shell of the
buildings,'' and then the developer comes in in a joint
venture, and puts the capital up to revitalize those, and then
manages it, and then returns part of the profits or the cash
flow, and we stay in ownership, and there is no capital outlay
necessary?
But the developer then has some very significant
constraints on them as to who they can rent to, income levels,
etc., etc. And this has worked in some instances. It could
provide a solution for the capital. It could bring private
capital in. But owning the land, you could do it on a 99-year
lease. Owning the land, you don't give up the kind of
ownership, and you really have the control. And that can be a
controlling factor in the mortgage, too.
Ms. Henriquez. What you have described, in a sense, is the
HOPE VI model, or the mixed finance models that housing
authorities have been using for about a decade now.
Mr. Marchant. Okay, very good. Thank you.
Chairwoman Waters. All right, thank you very much. I ask
unanimous consent that Representative Castle be considered a
member of the committee for the duration of this hearing. And,
without objection, Mr. Castle?
Mr. Castle. I have no questions at this time, Madam
Chairwoman, but thank you for the opportunity.
Chairwoman Waters. Thank you. They told me you would be
here for the second panel, but then I was told that you were
here now. All right, thank you very much.
With that, we thank you for being with us today. And the
Chair notes that some members may have additional questions for
this witness that they may wish to submit in writing. Without
objection, the hearing record will remain open for 30 days for
members to submit written questions to this witness, and to
place her responses in the record.
This panel is now dismissed, and I will call up our
distinguished second panel. Thank you very much.
Ms. Henriquez. Thank you, Madam Chairwoman.
Chairwoman Waters. I am pleased to welcome our
distinguished second panel.
Our first witness will be Mr. Keith Kinard, executive
director, Newark Housing Authority, on behalf of the Council of
Large Public Housing Authorities.
Our second witness will be Ms. Deirdre Oakley, associate
professor, department of sociology, Georgia State University.
Our third witness will be Mr. Anthony O'Leary, executive
director, Akron Metropolitan Housing Authority, on behalf of
the Public Housing Authorities Directors Association.
Our fourth witness will be Mr. Joseph Puma, public housing
resident, on behalf of National People's Action.
I am going to ask Mr. Castle if he would like to introduce
our fifth witness.
Mr. Castle. Thank you, Madam Chairwoman, I would. And I
have the pleasure of introducing my friend, Frederick S.
Purnell, Sr.--I have never known him as anything but Fred, but
that's his full name--who is the executive director of the
Wilmington Housing Authority, which is Delaware's largest
housing agency.
Fred has completed several major housing projects in his 10
years at WHA, including the new Village of East Lakes,
Delaware's only HOPE VI project. He previously served at the
Philadelphia Housing Authority. And presently, Fred serves as
the president of the mid-Atlantic region of the National
Association of Housing and Redevelopment Officials--NAHRO--and
on the board of directors of Delaware NAHRO and the Challenge
program.
He has been a very great influence on housing in Delaware.
We welcome Fred here, and I apologize because I probably won't
be here when he testifies, due to other scheduling conflicts.
But thank you, Madam Chairwoman, for the opportunity of
introducing Fred.
Chairwoman Waters. You are welcome. Our sixth witness will
be Mr. David Rammler, staff attorney and director of government
relations, National Housing Law Project.
And our final witness will be Mr. Leonard Williams,
commissioner, Buffalo Metropolitan Housing Authority, on behalf
of the National Low Income Housing Coalition.
Without objection, your written statements will be made a
part of the record. You will now be recognized for 5 minutes.
And we will start with our first witness, Mr. Kinard.
STATEMENT OF KEITH D. KINARD, EXECUTIVE DIRECTOR, NEWARK
HOUSING AUTHORITY, ON BEHALF OF THE COUNCIL OF LARGE PUBLIC
HOUSING AUTHORITIES
Mr. Kinard. Good morning. Madam Chairwoman, Ranking Member
Capito, and members of the subcommittee, my name is Keith
Kinard. I am the executive director of the Newark Housing
Authority in Newark, New Jersey, and a board member of the
Council of Large Public Housing Authorities.
My written testimony contains specific recommendations that
the Council for Large Public Housing Authorities has regarding
the draft legislation. But today, I want to speak as a
practitioner who has made some difficult choices regarding
public housing preservation and redevelopment. I would like to
tell you the tale of two developments: Felix Fuld; and Seth
Boyden.
Felix is approved for demolition, currently. It has 286
units. It has physical needs of over $41 million. It has high
poverty, high crime, and high operating and repair costs. In
December 2007, I met with all the residents of Felix Fuld to
share the results of a working group, which included all the
resident leaders. When I said that the Newark Housing Authority
wanted to submit a demolition application for Felix, the
residents actually applauded.
I have to admit that it was not the reaction that I
expected at that time. However, the residents knew that Felix
was completely broken. I made them a promise then that they
would be going somewhere better, and that they would be either
in public housing or a Section 8 voucher. But, in any event,
they would definitely be better off.
The questions I heard that night were, ``How soon can I
leave,'' and, ``Can I have a voucher today?'' I had to tell the
residents, ``No, we have to wait for HUD to approve the
application.'' This bill, unfortunately, seems to lengthen that
process, not shorten it, which is not what the residents wanted
to hear.
Yes, change is hard, and there were tears shed that evening
about having to move on and having to move out of Felix. But I
have kept my promise, and today, people are in better
situations. After meeting with housing counselors and going
through all the implications of their choices, 51 percent of
the residents have been relocated to other public housing, and
38 percent have vouchers.
Because of the way relocation vouchers are disbursed, in
addition to serving everyone at Felix Fuld, I am now serving
over 100 new families from the waiting list. I am actually
serving more families today by getting demolition approved at
Felix. And this bill also looks like it would change that.
The sad part is I don't have the money today to build back
a new Felix. The development gaps are simply too big, and I am
not even proposing at this time to replace these units on a
one-for-one basis. The preservation bill would help to close
some of this gap. However, it does not go far enough.
The one-for-one bill, if passed, would further reduce any
chance of Felix ever being rebuilt. I would like to build 286
replacement housing units. I believe that most of my colleagues
would agree with me, that would be the wise choice. I believe
that, instead of saying, ``You should build in areas of low
poverty,'' we should say that high poverty neighborhoods are
exactly the ones that need the most transformation and Federal
investment.
So, I am left deciding what to do about Seth Boyden, the
second development in this tale. It has only 220 of the 506
units currently occupied. It also has at least the same level
and types of problems of Felix Fuld. The only real choices at
Seth right now are short-term approaches to keep the units
online a little bit longer, or demolish and someday rebuild.
The residents at Seth currently ask me when they will get
the opportunity to move to something better, like the residents
of Felix. I want to promise these residents something better.
But if the one-for-one bill passes, I probably wouldn't get
approved by HUD to move forward, and we would be stuck with
Band-Aid approaches.
I have capital needs of over $500 million currently for my
entire portfolio. I believe that, without major modifications,
or some large new source of Federal funding, this bill will
negatively impact the residents that it is currently seeking to
protect.
My main concerns are: first, without adequate funding, the
one-for-one replacement requirement results in public housing
residents being stuck in decrepit units, and housing
authorities being unable to adequately fix or redevelop them;
second, the retroactivity to 2005 will have negative impacts on
those places that are already built and planned developments in
the future; third, imposing public housing rules and
requirements on private owners for particular groups of
residents will be confusing, and result in fewer units being
made available to residents; and fourth, the requirements about
location and replacement of housing will make redevelopment
impossible in many jurisdictions.
Chairwoman Waters and members of the subcommittee, I
welcome the opportunity to show you these two developments. I
admire your commitment to public housing residents, and I know
we share the same goal of helping them. I welcome any questions
that you may have, and I thank you for this opportunity to
testify.
[The prepared statement of Mr. Kinard can be found on page
48 of the appendix.]
Chairwoman Waters. Thank you very much.
Ms. Oakley?
STATEMENT OF DEIRDRE A. OAKLEY, ASSOCIATE PROFESSOR, DEPARTMENT
OF SOCIOLOGY, GEORGIA STATE UNIVERSITY
Ms. Oakley. Chairwoman Waters, Ranking Member Capito, and
subcommittee members, thank you for the opportunity to provide
testimony on legislative proposals to preserve public housing.
We are currently in the process of conducting a
longitudinal study of public housing relocation in Atlanta. As
you and members of the committee may know, the Atlanta Housing
Authority has eliminated its remaining project-based family
public housing, as well as two public housing senior high-rises
under current Section 8 regulations. Since 2007, almost 10,000
public housing residents have been relocated, and over 3,000
units are currently in some phase of demolition. There are
currently no plans for replacement housing.
Atlanta may be the first city to eliminate all of its
project-based public housing, but other cities such as New
Orleans are not far behind. Without the implementation of the
proposed legislation to preserve public housing, the shortage
of low-income housing, as recently documented by the National
Low Income Housing Coalition, will only get worse.
We also hope that the proposed legislation will help
prevent the unnecessary demolition of public housing senior
high-rises, and subsequent displacement of senior residents.
Most cities are renovating, rather than eliminating this
housing. In Atlanta, the two senior high-rises earmarked for
demolition, Palmer and Roosevelt Houses, are not in high-
poverty neighborhoods, and the buildings are not in bad shape.
We have found that the relocation process for seniors is
especially difficult and stressful, and many feel isolated in
their new locations. In addition, only 29 percent of the
seniors we interviewed prior to relocation expressed a desire
to move. Twelve seniors in our study have died since moving,
compared to only two in our comparison non-relocating senior
high-rise site.
Henceforth, I will briefly summarize some of the other
analyses we have made of the Public Housing One-for-One
Replacement and Tenant Protection Act of 2010.
The importance of one-for-one replacement: The case of
Atlanta clearly demonstrates the crucial need to preserve
public housing, and to replace demolished units. Prior to
relocation, we asked residents why they moved into public
housing in the first place. Fifty-eight percent of them said
that they entered public housing because it was the only
affordable option. Another 36 percent said that they entered
public housing because of some kind of hardship.
In addition, 18 percent of the families, and 22 percent of
the seniors reported that public housing was an improvement
over their previous housing situation. These findings suggest
that public housing serves as an important source of low-income
housing when no other options are available. Now that public
housing has been eliminated in Atlanta, this safety net is
gone.
One potential challenge to one-for-one, however, will be
compliance, particularly for PHAs that have already demolished
units within the last 5 years. Some of the land on which public
housing was located may have already been sold or subject to
land swap. For example, current plans for Palmer and Roosevelt
Houses are to land-swap them. This means that the proposed on-
site rebuilding of at least one-third of the units cannot be
met.
Maintaining the rights of relocated public housing
residents, even if they are relocated with a voucher: Requiring
more detailed provisions in the legislation concerning tenant
participation is essential. In Atlanta, each public housing
community's resident association was disbanded upon relocation
and subsequent demolition. Thus, these former public housing
residents residing in voucher housing have no comparable
organization.
Yet, a post-move resident association could serve as a
much-needed source of support. For example, while the majority
of the residents in our study who qualified for a voucher liked
their new homes, the increase in living expenses have added an
unanticipated financial strain. Much of the increased living
costs have to do with utility payments. This is particularly
bad in Atlanta, because landlords typically pass on water and
sewage costs to residents.
Residents also support a loss of many of the informal
supports they received in public housing, which has created
further financial strain. This puts many residents in a
precarious position. If they get behind on their utilities,
they will lose their voucher. A post-relocation residents
association could facilitate a dialogue with the housing
authority on these issues, as well as serve as a mechanism for
maintaining information supports and distributing information
on assistance.
Lastly, fair housing: The fact that public housing has
frequently been located in poor, racially segregated
neighborhoods is frequently cited as a reason for tearing it
down. The question then becomes whether or not relocated
residents with vouchers and/or replacement end up in lower-
poverty, racially integrated neighborhoods. The answer has been
repeatedly a resounding ``no.''
Research, including ours, has consistently shown that,
while the former public housing residents relocated with
vouchers end up in neighborhoods that are less poor, these
neighborhoods are still poor, and they are still very racially
segregated. In fact, in our study we find evidence of
geographic clustering in segregated neighborhoods. Yet, despite
this finding, fair housing cases around the country have been
dismissed--for example, in both Atlanta and New Orleans.
Thank you for your time.
[The prepared statement of Ms. Oakley can be found on page
56 of the appendix.]
Mr. Cleaver. [presiding] Mr. O'Leary?
STATEMENT OF ANTHONY O'LEARY, VICE PRESIDENT, HOUSING, THE
PUBLIC HOUSING AUTHORITIES DIRECTORS ASSOCIATION
Mr. O'Leary. Thank you, Chairwoman Waters, and Ranking
Member Capito. My name is Anthony O'Leary, and I am director of
the Akron Metropolitan Housing Authority in northeastern Ohio.
I am here today speaking on behalf of the Public Housing
Authorities Directors Association, which is a membership
organization founded in 1979. We serve 1,900 housing
authorities throughout the country that range from very small
authorities with a single building, all the way up to members
like New York City and Los Angeles, the largest housing
authorities in the country.
My housing authority in Akron, Ohio, serves over 20,000
residents through our various assisted housing programs, and
over my 17 years there, we have done numerous redevelopment
projects, and relocated hundreds of residents throughout this
process.
Having said that, I can tell you our housing authority is a
high performer. We are 99 percent occupied at all times. We
recently earned the highest score in the country on our
inspections. But despite the attractiveness of our property,
two out of three applicants who apply for housing initially
request a voucher. And also, when we do redevelopment, that
percentage rises. Roughly 80 percent of the clients living in
public housing request a voucher at the time that we are
redeveloping a project.
I think, similar to what others have expressed here today,
that really reflects the desire of public housing residents to
have a choice about where they live. And they make those
choices on the same basis that all of us do. It has to do with
schools, it has to do with family, it has to do, perhaps, with
the part of town that they are originally from.
I think one point that is frequently lost in this argument
is that most people who enter public housing have to accept the
oldest available unit at the time of their admission. And
oftentimes, they end up in a neighborhood that, really, they
are not comfortable with. As a result, when opportunities rise
for them to move, they seize those opportunities.
So, in terms of this legislation, our association and most
of our members, I think, would certainly agree that one-for-one
replacement is an idea that we can support. I think the issue
is how we actually go about that process. And, at the end of
the day, we would certainly like to see the maximum opportunity
for choice on the part of the residents when we're doing
redevelopment efforts.
I think--and this was addressed earlier--since 1937, all of
our communities have changed dramatically. And oftentimes, the
very poor areas where public housing was located are no longer
viable. We need maximum flexibility, as a housing authority, to
decide where to redevelop housing.
We certainly know from the last decade, that mixed housing
finance opportunities create better housing choices and better
housing environments for a family, and we think that we ought
to pursue those options to the maximum extent.
But this choice of one-for-one or this choice of
redevelopment, I personally resent the fact that, as a housing
authority, we're put into that position. And I think, rather
than argue against the rights of residents, what we're really
saying is that we need adequate funding to be able to address
the needs of residents. And, again, we want to respect
residents' rights both to live where they choose to live, in
terms of their right to return and right for continued
occupancy. Most housing authority directors I know are clearly
in support of that.
We do suggest that, if this bill were to go forward, that
the right to check backgrounds on people since they left does
need to be done. Because, oftentimes, it may take 3 or 4 years
to redevelop a property. And we are not talking about
retroactively screening people out for lease violations that
occurred 3 years ago, but rather simply making sure that they
meet the program standards today.
The other issue that I would certainly underscore that has
been stated again many times today is that, given the lack of
sufficient public resources, private investment dollars are
absolutely critical to redevelop our housing stock. This bill
potentially complicates our ability to secure that private
capital. So, again, we urge maximum flexibility in doing so.
Lastly, I would suggest that relocation, or well-managed
relocation programs, are really the best way to protect the
rights of residents. Again, I don't know of a housing authority
director in the country who is seeking to reduce a person's
housing choices. We all have long waiting lists. We all would
like more units, to be able to serve more families in our
communities.
But rather than put in arbitrary limits as to where you can
locate housing and whether you replace one-for-one or not, I
think the challenge to us should really be to demonstrate that
we have taken into account the needs of residents, and that
we're appropriately relocating them to housing that does meet
their needs. Thank you very much.
[The prepared statement of Mr. O'Leary can be found on page
65 of the appendix.]
Mr. Cleaver. Thank you.
Our fourth witness will be Mr. Joseph Puma, a public
housing resident, on behalf of National People's Action.
Mr. Puma?
STATEMENT OF JOSEPH PUMA, PUBLIC HOUSING RESIDENT, ON BEHALF OF
NATIONAL PEOPLE'S ACTION
Mr. Puma. Good morning. Thank you, Chairwoman Waters,
Ranking Member Capito, and members of the committee, for
inviting me to speak today about the need for America's public
housing and the reforms necessary to make sure America's public
housing is furthering the goal of providing all Americans with
their human right to housing.
My name is Joseph Puma. I am a lifelong public housing
resident and advocate for public housing in New York. If it
weren't for our public housing apartment, my mother would not
have been able to provide for me and stay in our community when
she became a struggling, working, single parent. And if it
weren't for that upbringing in public housing, I would not have
been able to become a first-generation college graduate,
earning a degree from Yale University.
I have worked for the past several years for the New York
City Office of Management and Budget, and I serve on the board
of Good Old Lower East Side, a neighborhood preservation and
eviction prevention organization. I am here today representing
National People's Action.
National People's Action, or NPA, is a network of community
organizations from across the country that work to advance a
national, economic, and racial justice agenda. NPA has over 200
organizers working to unite everyday people in cities, towns,
and rural communities throughout the United States.
I would like to first address the Public Housing
Preservation and Rehabilitation Act of 2010, as proposed by
Congressman Frank. In particular, I would like to state our
support for section IV, which would lift the restrictions on
using operating and capital funding for new public housing
construction. Removing any barriers to meeting the enormous
need for affordable housing is extremely welcome.
I would like to focus my testimony today on the Public
Housing One-for-One Replacement and Tenant Protection Act of
2010, which will go a long way towards repairing the damage I
will refer to, and offer our suggestions for improving this
excellent bill.
I would like to thank you, Chairwoman Waters, for
introducing this legislation, and for consistently standing
with us as we fight for our homes.
Regarding one-for-one replacement, since the inception of
HOPE VI, over 155,000 units of America's public housing have
been destroyed, with only 50,000 new units built to replace
them. That represents hundreds of thousands of people
displaced, and many left homeless. There are over a million
families on waiting lists for a unit or a voucher, and who
knows how many more, with many waiting lists closed and not
accepting more families.
The big bank-driven great recession and the record
foreclosure crisis add even more urgency, and remind us again
that we cannot rely on the market alone to provide for our
basic human right to housing.
This bill proposes to require one-for-one and like-for-like
replacement of hard housing units retroactively, and on a
forward-going basis. Currently, the bill requires that units be
replaced going back to 2005. We suggest that the date be moved
back to 2000, because even then we will not be able to replace
all of the units lost, or build all of the units needed, but it
will help us move closer to that goal.
On the subject of location of replacement units and the
right to return, the bill recognizes the wisdom of allowing
residents to return to their communities by requiring that an
allocation of at least one-third of the replacement units be
located on or very near the original housing site. We would
suggest that instead of a threshold number of one-third, the
public housing agency be required to survey current residents,
and determine what the percentage of residents is who would
like to return.
Regarding maintaining the rights of public housing
residents, I am very glad to see that the rights of residents
will be maintained if they move from public housing to other
forms of subsidized housing. The regulations codified under CFR
section 964, for example, have been essential for ensuring that
residents are able to have a real stake in the success of their
housing.
On the topic of fair housing, for too long, the process of
relocation under demolition or disposition has been able to
skirt the law of the land by avoiding fair housing and civil
rights laws. NPA is gratified that this bill seeks to close
this loophole.
NPA would recommend adding another consideration to this
assessment: a racial justice impact assessment, or RJIA. For 40
years, before undertaking any project, developers have been
required to submit an environmental impact statement to outline
the impact such development will have on the environment. It's
time that a similar process was put in place to take into
account the impact development and displacement decisions have
on families and communities, and in particular, on families of
color. An RJIA would be required as part of the planning before
any demolition, disposition, or construction of new housing
units, and also applied to plans for using Section 8 vouchers.
Finally, before I close my remarks, I would like to briefly
refer to HUD's plan, Transforming Rental Assistance, or TRA. I
realize that this is not the subject of the hearing today. But
since TRA will have such a massive impact on the lives of
public housing residents, I feel I need to at least mention it.
I would like to include in my written testimony NPA's
position paper that outlines the provisions that we feel must
be included before any proposal to so radically transform
America's social housing system should be allowed to proceed.
And I respectfully request that it be included in the record.
And in closing, I would like to thank you again for
inviting me to testify this morning, and I welcome any
questions you may have.
[The prepared statement of Mr. Puma can be found on page 74
of the appendix.]
Mr. Cleaver. Thank you very much. Mr. Purnell is our fifth
witness. He is the executive director of the Wilmington Housing
Authority on behalf of the National Association of Housing and
Redevelopment Officials.
Mr. Purnell?
STATEMENT OF FREDERICK S. PURNELL, SR., EXECUTIVE DIRECTOR,
WILMINGTON HOUSING AUTHORITY, ON BEHALF OF THE NATIONAL
ASSOCIATION OF HOUSING AND REDEVELOPMENT OFFICIALS (NAHRO)
Mr. Purnell. Good morning, Chairwoman Waters, Ranking
Member Capito, and members of the subcommittee. Thank you for
the opportunity to testify on behalf of the National
Association of Housing and Redevelopment Officials. I would
also like to thank Congressman Castle for his kind words of
introduction. My name is Frederick Purnell. I am the executive
director of the Wilmington Housing Authority in Wilmington,
Delaware. I am also proud to say that I am a proud former
resident of public housing.
The bills we are discussing here today underscore the
subcommittee's commitment to long-term viability of this
inventory, and the health and well-being of the low-income
families, seniors, and disabled clients who call this housing
home. With that said, NAHRO agrees that the time has come to
find new ways to preserve our Nation's irreplaceable public
housing stock.
Let me also say that NAHRO believes that the current
discussion regarding the conversion of public housing
assistance to either Section 8 project-based vouchers or a form
of project-based contracts under Section 8 represents a
positive step towards preserving public housing. We look
forward to the opportunity to provide testimony on this
important topic at a later date.
Let me first turn my attention to the Public Housing One-
for-One Replacement and Tenant Protection Act. NAHRO recognizes
and appreciates the intent of this legislation to both stem the
loss of public housing units, and ensure the long-term
viability of decent, safe, and affordable housing. Based on our
initial review of the bill, we offer the following
observations.
NAHRO believes that national housing policy must ensure
that there is no net loss of hard, affordable housing units
when public housing units are taken offline. However, as long
as all residents moved out of public housing are adequately
housed in hard units or with rental assistance, a national one-
for-one replacement policy should not require that each
replacement unit be specifically located on or near the site of
the original units, nor should it require that the replacement
unit be owned by the public housing agency whose unit went
offline. This expanded conceptualization, articulated further
in my written statement, would allow for redistribution within
our Nation's affordable public housing stock, which could also
address shifting population trends, and would better position
the affordable housing industry to meet the needs of the
Nation.
The draft bill includes a subsection that would, as we read
it, give any affected person the right to bring a civil rights
suit under section 1983 to enforcement section 18. NAHRO
believes this subsection is unwise, and that it would more
broadly subject PHAs and individual PHA staff and possibly
commissioners to costly litigation that would adversely impact
authorities' limited resources.
Finally, a concurrently written provision contained in the
bill applies to any unit demolished or disposed of after
January 1, 2005. This presents difficulty, in that many of the
subject partials may have already been redeveloped in other
ways.
Turning to the Public Housing Preservation and
Rehabilitation Act of 2010, NAHRO applauds your insight and
creativity in crafting a bill that promises to empower public
housing authorities in connection with the rehabilitation of
their properties. Our initial reactions are as follows.
Section two of the bill facilitates the leverages of other
assistance, and notably, would authorize capital loan fund
guarantees. A full faith and credit guarantee will make lending
against public housing assets and funding streams palatable,
and would open up a significant new opportunity for
recapitalization.
The bill provides public housing agencies of all sizes with
energy conservation incentives, and does not limit the ability
to receive these incentives only to those with energy
performance contracts. We are pleased to see that this language
mirrors a similar provision in NAHRO's proposal for small
agency reform.
Section three of the proposed bill would authorize grants
in lieu of tax credits. This is a positive development, in that
it is a direct grant approach, and would create new
preservation opportunities for NAHRO's many small agency
members.
Section four of the proposed legislation enables greater
flexibility for the use of capital fund dollars, and repeals
the Faircloth Amendment. NAHRO strongly supports this action.
The bill would also authorize public housing authorities to
use capital funds to assist other non-Federal units in their
jurisdiction where federally-assisted housing has otherwise
been sufficiently maintained. This will be enormously helpful
in several States, particularly smaller States like Delaware,
where housing authorities work hand-in-hand with very skilled,
nonprofit professionals to deliver affordable housing
throughout the community.
This concludes my statement, and I will be happy to answer
any questions you may have. And thank you again for the
opportunity to present our views.
[The prepared statement of Mr. Purnell can be found on page
78 of the appendix.]
Mr. Cleaver. Thank you.
The sixth witness is Mr. David Rammler, staff attorney and
director of government relations for the National Housing Law
Project.
Mr. Rammler?
STATEMENT OF DAVID RAMMLER, STAFF ATTORNEY AND DIRECTOR OF
GOVERNMENT RELATIONS, NATIONAL HOUSING LAW PROJECT
Mr. Rammler. Thank you, Chairwoman Waters, Ranking Member
Capito, and members of the subcommittee. Thank you for the
opportunity to present testimony here on behalf of the National
Housing Law Project, a nonprofit national housing rights
program which has been in existence since 1968.
Our comments were forged in consultation with members of
the Housing Justice Network, 700 housing attorneys and
advocates across the country who work daily within their
communities and in your communities to build housing which
serves the needs of low-income people. These are legal services
attorneys and civil rights attorneys.
One-for-one replacement and tenant protection are two
critical issues. Since the suspension of one-for-one
replacement in 1995 and its repeal in 1998, we have heard today
of the dramatic loss of housing which has occurred. In a 2007
report to Congress, HUD found that for every 100 extremely low-
income households, there were only 40 affordable, unassisted
units. And for every 100 very low-income rental households,
there were only 77 units available.
So, we are not talking about public housing as the only
solution, and we agree that Section 8 vouchers and other
programs are part of the solution. But public housing is a
critical piece of this puzzle.
We support the general principles which underlie this bill,
and think it will produce an improvement in the housing
situation. We support: stricter preconditions before demolition
or disposition is allowed; replacement housing, which is
comparable to public housing and affordable to the lowest-
income families; that residents have a right to return without
re-screening; that there be an active and effective role for
residents in the designing and creation of the resulting
housing; and that the operation of the entire project be
consistent with the housing authority's duties to affirmatively
further fair housing and the resident's right to enforce the
law.
Beyond that, we have a number of specific recommendations
which are dealt with in detail in our written statement. They
include that the one-for-one replacement requirement should
state that replacement units are rental units. That is not in
the current draft. That the location of on-site replacement
units should be expanded to include replacement units in the
neighborhood, and should anticipate that more than one-third of
the residents may wish to return to the former site within that
neighborhood.
Additionally, we should eliminate the requirement that
replacement units be built within the jurisdiction of the
public housing agency and in areas of low concentration of
poverty. Rather, units should be built outside the original
site where necessary, and should be provided in a manner which
furthers economic and educational opportunities for residents.
Temporary relocation and multiple moves should be minimized
and, if possible, eliminated by making off-site replacement
housing available prior to the relocation of residents.
Replacement units should maintain essential rights applicable
to current public housing residents, including: rent set at 30
percent of the family's adjusted income; of rent targeting, as
currently exists with 40 percent of new admitees being at 30
percent of area median income or below; and that if the housing
is project-based, that figure is 75 percent.
Victims of domestic violence should not suffer
discrimination, and applicants who are denied admission should
have the right to review by an impartial hearing officer who is
not the person who made the decision to deny them, nor a
subordinate of that person.
Replacement units should have the same number of bedrooms
as those slated for demolition or disposition, unless a market
analysis shows the need for a greater number of bedrooms. The
current bill says that number would be based on the waiting
list requirements.
Finally, we believe that mobility counseling, in addition
to relocation counseling, should be available to displaced
residents who wish to voluntarily move to low-poverty and non-
racially concentrated neighborhoods throughout the metropolitan
area. Mobility programs should include: one-for-one housing
counseling; search assistance and post-move counseling; active
landlord recruitment incentives; use of exception rents;
community tours and comprehensive community introduction to
local schools, shopping, transportation, religious and health
resources; and credit repair and other training and educational
sessions.
Thank you for this opportunity. We are very encouraged that
many policies that the National Housing Law Project supports
have been included in this discussion draft. We look forward to
working with you and your staff to continue improving this
draft.
[The prepared statement of Mr. Rammler can be found on page
93 of the appendix.]
Mr. Cleaver. Thank you, Mr. Rammler.
Our final witness will be Mr. Leonard Williams,
commissioner, Buffalo Metropolitan Housing Authority on behalf
of the National Low Income Housing Coalition.
Mr. Williams?
STATEMENT OF LEONARD WILLIAMS, COMMISSIONER, BUFFALO
METROPOLITAN HOUSING AUTHORITY, ON BEHALF OF THE NATIONAL LOW
INCOME HOUSING COALITION
Mr. Williams. Congressman Cleaver, Ranking Member Capito,
and members of the subcommittee, I would like to thank you for
this opportunity to testify on the efforts to preserve public
housing. My name is Leonard Williams. I am a resident of the
Kenfield Homes, a public housing development in Buffalo, New
York.
Mr. Cleaver. Mr. Williams?
Mr. Williams. Yes?
Mr. Cleaver. Yes, would--
Mr. Williams. Is that better?
Mr. Cleaver. Yes, thank you.
Mr. Williams. Thank you, sir. I am also a member of the
board of directors of the National Low Income Housing
Coalition, which I am representing here today. I would
specifically like to thank Chairwoman Maxine Waters and
Chairman Barney Frank for their consistent and outspoken
leadership in preserving public housing.
For every 100 extremely low-income homes in the United
States, there are just 37 rental homes that are affordable and
available to them. It is precisely because of this lack of
affordable housing for extremely low-income households that
Federal housing policy must focus on preserving the federally-
subsidized units we currently have, also increasing new
production through programs like the National Housing Trust
Fund.
How current residents fare and the availability of housing
for future tenants should be the focus of any redevelopment of
distressed stock. About 5\1/2\ years ago, the resident advisory
board of Buffalo was able to work with our housing authority
and cancel plans to demolish approximately 180 units. Buffalo's
plan was to only replace 120 units, and only 40 of them being
affordable to public housing residents. Buffalo has a shortage
of almost 40,000 units that are unaffordable to extremely low-
income families. That Buffalo's housing authority could
consider contributing to this shortage is unconscionable.
Unfortunately, many housing agencies have jettisoned more
than 100,000 public housing units through a demo/dispo process
since 2000. We support the Public Housing One-for-One
Replacement and Tenant Protection Act. We are very pleased that
the bill has a strong one-for-one provision. We strongly
support a significant increase in the number of housing choice
vouchers. But to increase housing choice voucher program while
we continue to hemorrhage affordable subsidized hard units is
quite unproductive.
We thank the chairwoman for her continued leadership in the
right to return of all residents. We think the provision to ask
residents if they want to return to the original site or
neighborhood could be made more meaningful if it was linked to
the rebuilding requirement. We suggest that the developers be
required to rebuild on site or in neighborhoods at least one-
third of the present housing units, and include as many as
required to house all of the residents who express a desire to
return to the neighborhood.
For residents who will permanently relocate offsite, we
would also support a requirement that HUD limit the time the
relocation units--all offsite relocation units--are available
prior to occupancy. That would allow residents to move only
once.
We are also pleased to support Chairman Frank's draft of
Public Housing Preservation Act. For extremely low-income
seniors, the ability to age in place is more often a fantasy
because of exorbitant prices.
The Coalition has approached HUD's bold transforming rental
initial proposal with optimism. We stand united with the issues
raised by the resident engagement initiative for which I have
participated in. We have met twice with HUD Secretary Donovan
to discuss specific resident questions and positions on TRA. It
is the hope of the coalition that the HUD proposal, when
announced in detail, will address the questions raised by that
group.
Thank you for this opportunity, and I stand ready to answer
any questions you might have.
[The prepared statement of Mr. Williams can be found on
page 100 of the appendix.]
Mr. Cleaver. Thank you very much. And there is no need to
be nervous in here. There are only about one million people
watching on C-SPAN.
[laughter]
Mr. Cleaver. So all should relax. I didn't get this chance
to ask Secretary Henriquez this question, but I think Mr.
Kinard and Mr. O'Leary may be able to respond.
Are there requirements right now for you to submit any
documentation on demolished units in your public housing with
HUD? Are there reporting requirements on that?
And the reason I am asking that question, I want to know if
there--if we have any idea, nationally, how many units have
been demolished or no longer available.
Mr. O'Leary. Yes. When you demolish units you are required
to submit an application to HUD. And after that is approved,
that data should be in a system someplace. And, of course, then
the corresponding budget amount that housing authorities
receive following that disposition or demolition changes, and
there is a reconciliation process we go through annually with
the HUD field offices, to make sure the number count that we
have on a local basis squares with what they have.
And then funding eventually is adjusted up or down, based
on your either increase or decrease in public housing units. So
we do report that information.
Mr. Cleaver. All right.
Mr. Kinard. And there is a fairly accurate account of that
information.
Mr. Cleaver. Yes. I will try to find the answer to this
question, but I would like to know how many units have been
demolished over the last decade, for example. But I'm not sure
that any of you could answer that--well, can anyone answer that
question?
[No response.]
Mr. Cleaver. Okay, Ms. Henriquez, I hate to call you back
to the mound.
[laughter]
Ms. Henriquez. May I just stand right here?
Mr. Cleaver. Yes.
Ms. Henriquez. As you were speaking and asking the
question, I am sending it over to a staff member who oversees
the special applications center, which is called the SAC, where
those demolition disposition applications come in, and we will
get the information. How far back do you want to go?
Mr. Cleaver. Just the last decade.
Ms. Henriquez. The last decade?
Mr. Cleaver. Yes.
Ms. Henriquez. Okay. I will do that, and we will provide
that information.
Mr. Cleaver. All right. Thank you very kindly.
Ms. Henriquez. You are welcome.
Mr. Cleaver. And thank all of you, please. Mr. Puma, are
you a current resident?
Mr. Puma. Yes.
Mr. Cleaver. The statistics show that when individuals
leave public housing, they don't move far from public housing.
And you are an example.
I guess the question is the concentration of public
housing, and is it all related to the fact that if we begin to
move a great distance from public housing to build new units,
the land cost is prohibitive? We get a certain amount of money
for land acquisition, and that money is woefully inadequate if
we're talking about real scattered site housing. Am I accurate?
Mr. Puma. That would seem to be the case to me. I wouldn't
be able to speak on land costs. But just coming from New York
City, land is very scarce in New York City. So I imagine that
there may be some barriers, in terms of the cost of land,
certainly.
Mr. Cleaver. Now, do all of you agree that the tenants,
when they leave public housing, relocate near public housing?
Mr. O'Leary. They tend to, yes.
Mr. Cleaver. And--
Mr. Rammler. Excuse me. I would say that's true, except in
a certain small number of communities that have real mobility
programs. Baltimore is an example that has a real mobility
program, and has had some success with permanent relocation in
areas and communities surrounding Baltimore of greater
opportunity for educational and employment opportunities.
And so there are some case examples. But you're right, on a
broad scale.
Mr. Cleaver. Yes. If we are going to begin to demolish more
public housing, and then people are staying right there anyway,
my experience in living in public housing and in serving as
mayor over a PHA, the housing around public housing is usually
inferior to the housing of public housing.
And so, we are taking people out of public housing, or they
are leaving public housing, and going into inferior, decrepit,
dilapidated housing. Do all of you agree? Does anyone disagree?
Ms. Oakley?
Ms. Oakley. Yes, I would say, from our study, we have found
that residents really are locating quite close. I think the
mean distance is 3 miles. But the actual quality of the housing
is very, very nice. The public housing wasn't really in that
bad a shape to begin with. But where they are moving is much,
much nicer. It just happens that they are still in poor areas.
The areas are just not quite as poor as the public housing.
But I have been in some really nice apartments. And I think
that one thing that the Atlanta Housing Authority has done a
very good job on is making sure that residents who get
vouchers--so I'm not talking about the people who didn't get
vouchers--but the people who do get vouchers end up in high-
quality housing.
Mr. Cleaver. Of course, we have been reducing the number of
vouchers every year.
Ms. Oakley. Right. That's a huge problem.
Mr. Cleaver. And Mr. Rammler, Mr. Williams, you agree with
Ms. Oakley?
Mr. Kinard. Well, I would also add that with each
demolition--at least with most demolitions--you end up with
more vouchers than residents that are prepared to take them. So
again, in our instances--in Newark--of demolition, we have
ended up with upwards of 100 vouchers in addition, so we
started serving additional families on the waiting list. And a
vast majority of the families took other public housing. The
next largest category are vouchers.
But again, we end up serving families who have been waiting
for many years on the waiting list, as a result of the
additional vouchers that HUD allocates.
Mr. Cleaver. Mr. O'Leary?
Mr. O'Leary. Thank you. Our experience is similar to what
you described. Our public housing is in very good condition.
Yet, when we redevelop or do a HOPE VI project--and we have
done two--interesting. A lot--probably 80 percent of the
previous residents chose to accept a voucher, moved into older
housing. And while it was decent, safe, and sanitary, it was
50- to 60-year-old housing versus the opportunity to move into
a new HOPE VI unit that cost over $200,000 a unit to develop.
And when we talked with those residents, again, it came
down to them having a choice, and the point that I mentioned in
my testimony. When they were first admitted to public housing,
they simply took what was available, which simply wasn't their
geographical preference.
So, I think my point, on behalf of our members in PHADA, at
least, would be that situation varies widely, and it would
probably be a little bit different community by community,
based on both the residents' desires and also the nature of the
housing stock in that community.
But at least in the Midwest, where I'm most familiar, most
people prefer a single family home to an apartment, which would
be very different, obviously, than Boston or New York. And, as
a result, they will seek to move to any house that is
available, as long as it's fairly decent, as opposed to living
in multi-family housing.
Mr. Cleaver. Thank you. The gentleman from Texas, Mr.
Marchant.
Mr. Marchant. Thank you, Mr. Chairman. Mr. Kinard, you have
expressed concern that Chairwoman's Waters's legislation--the
requirement that one-third of the pre-existing units be
constructed in the same location. Is this provision too
restrictive?
Mr. Kinard. I believe that it is. I think that we need the
local flexibility. Every instance is obviously different. But
when you look at the requirement of having to place one-third
of the units back on that particular property, first and
foremost, we don't know how many families truly want to come
back to that property.
Secondly, generally, when we're talking about these sites,
we are talking about highly vacant sites. So, to start with a
number of, for instance, 506 in one of my examples, of those
506 hard units, only 302 were actually occupied. So, if we
start talking about one-third, we're talking one-third of 506
or one-third of 302? What is the real need?
And I would also add that there is an inherent conflict
between fair housing. In other words, moving families to places
where it's deconcentrated, racial make-up is mixed and diverse,
etc., and actually concentrating those families back in the
low-poverty areas, where a lot of these sites already reside.
If we're truly talking about choice and providing choice, that
becomes very, very difficult. Because a lot of times, placing
those one-third households back where it was before strikes
right in the face of fair housing. We are resegregating and
reconcentrating.
Mr. Marchant. So, at the very least, you would suggest that
there be some waiver or some variance provision in the bill
that allows a local housing authority to make their case, like
you have?
Mr. Kinard. I absolutely think that it's necessary in order
to get proper financing, in order to make it work. I think, at
the very least, a waiver--I really think that it just shouldn't
be there, the one-third provision shouldn't be there, and we
should really be looking at this on a localized basis. Some
housing authorities may want to put 50 percent back, you may
need to do that, while other housing authorities truly need
that flexibility on a site-by-site basis.
Mr. Marchant. Mr. O'Leary, you just used the figure of
$200,000 per unit. And that has been the experience that we
have had in our area.
Being in the development community before I got here, we
were amazed that we could put units in the ground, brand new,
2- and 3-bedroom units, 800 square feet, for $50,000 to $60,000
a unit, and 2 blocks down, the Dallas Housing Authority was
putting in what we felt were fairly inferior units, and you
look in the newspaper and those units would be--the cost of
those units was $200,000 each. And it has always amazed me, and
the development community, that the cost of those units are so
high.
Mr. O'Leary. Well, we have seen similar experiences.
Although, I would say that the units we have built have been,
again, generally superior to other new units built in the area.
But included in that cost are an awful lot of indirect
costs and public process costs, which--most of which I think is
worthwhile. But when you begin to plan one of these projects--
and it may take 2 to 3 years to plan it--and you hold public
meetings and oftentimes, you have to replace 60- or 70-year-old
infrastructure--that takes money. There is just an awful lot of
process time that goes into it. It's not uncommon to redraw the
plans for--the HOPE VI project, for example, a couple of times,
because you're constantly going through drafting the plan,
submitting it to HUD, residents--involvement of residents, and
oftentimes, there are good suggestions that come out of those
processes. But at the end of the day, it adds cost.
The other thing that adds cost is the whole notion of mixed
finance, and going to the private market using tax credits,
etc. There are considerable legal, accounting, and financial
advisory kinds of services that are necessary, because they're
very complex transactions. And at least within PHADA, I know
we're constantly talking about isn't there a simpler way,
perhaps, to finance some of these projects.
And I think the second bill that was talked about today
includes some tools I think would be helpful in that regard.
But there are tremendous administrative costs, architectural
fees, legal fees, as well as just the structuring of tax credit
projects that all go into that bottom line cost, as opposed
to--
Mr. Marchant. It seems to me it's the largest single
problem in going back and redeveloping housing on the same
site, is that its built-in cost is so prohibitive that you can
get a different product--as good a product--in another location
without the capital cost.
Mr. O'Leary. Well, I generally agree. I agree with Mr.
Kinard. I think that, again, it's a case-by-case basis, and
that's going to vary greatly by locality. In many communities,
that public housing site might be the only land available to
actually develop. In an area like Akron, where we have had
tremendous job losses and deterioration of the central city, a
very active city redevelopment program, we can generally find
land in a number of areas.
And, of course, what we try to do is to complement the
other public investment. And that may be on the site or it may
be on a different site. So, again, I would constantly
underscore the importance of having that flexibility to make
those decisions on a local basis, rather than having it
dictated. Thank you.
Chairwoman Waters. Mr. Green?
Mr. Green. Thank you, Madam Chairwoman. In a perfect world,
vouchers would be a perfect solution. As you well know, we do
not live in a perfect world. I have only been in Congress for
5-plus years, but I have, in this number of years, learned how
difficult it is to acquire vouchers.
It seems that the poor don't have a lot of folks walking
the halls of Congress for them. It is very difficult in times
of budget constraints to acquire help for poor people. I would
love to have vouchers for everyone who truly merit having
vouchers, but it just doesn't seem to work that way. And it is
not unusual for people who argue for vouchers when we are
talking about demolition to cease to have those arguments when
we try to acquire vouchers.
In a perfect world, vouchers would be a perfect solution. I
tend to see some salvation in some brick and mortar, something
that's there for people, notwithstanding difficult times,
notwithstanding the lack of a lobbying army. It seems that we
have someplace for somebody to live when we don't have the
vouchers available. And it has been said--I believe Congressman
Cleaver pointed it out--that we are receiving fewer and fewer
vouchers each year. In a perfect world, vouchers would be a
perfect solution. They don't seem to be the perfect solution in
this world.
One of the reasons it is so difficult to reform the
financial industry and deal with what we know are obvious
wrongs, is because they have lobbyists. They have people who
are here daily, and they are making efforts to influence the
process. The poor just don't have it. There are just a few
people who are out front, a part of the avant garde, to help
poor people. That's not a great commentary on any of us. But
it's the truth.
And at some point we have to understand that when we can't
do all that we should to help poor people, we ought to do all
that we can. Maintaining the current stock is almost an
imperative, if we are to continue to accommodate those who need
help. If we allow ourselves to slip into this notion that we
can just demolish and we will have vouchers available, we will
find, in time, that we have made a mistake.
Vouchers that are here today may be gone tomorrow. It is
much more difficult to eliminate the brick and mortar. Well, it
used to be; I'm not sure that it is going to continue to be,
given what I'm hearing, to some extent. My hope is that what
the Assistant Secretary said will continue to prevail, and that
is that we will look at a balanced approach to this, that we
will understand that there is a place for vouchers, there is a
place for brick and mortar.
And the notion that we have to have concentrated housing is
one that I don't buy into. I think we can have scattered
housing. I don't think we have to have all poor people living
in one place. I think you can have poor people and people of
means living together in the same complex.
But what I don't believe is appropriate is for us to allow,
because it's convenient and because we can come up with clever
schemes--which is how we got into this financial crisis, by the
way, clever schemes--clever methodologies by which we can now
finance what we know to be necessary housing, and put it at
risk. My hope is that we are not putting it at risk, and I hope
that we will continue to understand that there is a need, not
only for vouchers, but also for brick and mortar.
Madam Chairwoman, I see that I have used my time without
asking a question, but I do thank you. I yield back.
Chairwoman Waters. Thank you very much. Mr. Ellison?
Mr. Ellison. Good morning, Madam Chairwoman, and let me
thank you and the ranking member, colleagues, and panelists.
Today we will address the other housing crisis. Despite the
lack of media coverage and attention, our Nation's public
housing stock is depleting. Existing housing units face varying
levels of distress, and the possibility of conversion to market
rates. In such a scenario, very low-income households are at
risk of displacement.
In my district of Minneapolis, over 900 units of public
housing were lost due to HOPE VI redevelopment. This void was
not immediately filled, and many households never returned.
While updating public housing units is necessary for the safety
of tenants, displacement only creates an additional burden for
low-income and hard-to-house populations.
Chairman Frank and Chairwoman Waters have made the housing
needs of our Nation's most vulnerable households a top
priority. I applaud them for this. For this, I commend and
intend--I commend the intent of both proposals, and support
them both, and hope that we can begin to stabilize the public
housing sector. I look forward to learning more about the one-
to-one replacement and how it impacts the districts and the
constituencies of the panelists. And I appreciate that.
I was going to read this in the beginning, but I read it
now.
I only have time for one question, Mr. Kinard. And I
appreciate your candor in your written testimony and here
today. I guess my question to you is this, and maybe it is not
subject to easy answering. But I was born and raised in the
City of Detroit, and I moved at the age of my early twenties to
Minnesota to go to law school, stayed there ever since.
But one thing I remember about my hometown is that it
seemed like when it came to public housing, it--public housing
residents would applaud the demolition of public housing
because public housing was neglected for so long that it was a
bad place to live. But did it have to be that way?
And when we look at bills like the one-to-one--like
Chairwoman Waters' bill and Chairman Frank's bill, if we had
the money to maintain public housing, and make sure it was a--
that quality was high, that public safety was a top priority,
do you think that those residents would have still applauded?
I'm asking you sort of a hypothetical.
But, I'm interested, was it the fact of public housing, or
was it the condition that people had been forced to live in
because of the neglect of public housing? And I hand it back to
you.
Mr. Kinard. First of all, fantastic question. And I have
been in a number of scenarios where we have transformed public
housing, and the reaction was not applause. In fact, I have
been in the throwing chair scenario, too. So I have seen it
from a number of perspectives.
But I think you hit the nail on the head. Every member on
this panel, I would venture to guess, would agree with this
fact, that if the funding was there to actually deal with the
capital needs of public housing, which--I can tell you it's, I
believe, in excess of $20 million; I think it's somewhere
around $30 million, maybe even a little more. But if that
funding was there, we would happily, happily deal with our
issues, or create mixed-income communities, one way or the
other.
But the fact of the matter is, the residents applauded in
that particular setting, because the conditions of that site
were deplorable, were miserable, because we don't have the
funding to take care of it. The sad part is I have two or three
other communities that are equally--if not even more--
deplorable today that I can't even address in that nature, I
can't even speak to those residents.
So, yes. I think the residents, if they were living in
decent standard housing, they certainly would not applaud. They
would say, ``This is my home, I want to stay here.'' The fact
of the matter is the housing there was beyond anything that we
could be proud of and should be housing people in. And,
unfortunately, there is a number of communities out there in
that condition, and the capital funds simply are not there.
If those capital funds become available, then that, I
think--I think there is no need for this discussion any more.
Mr. Ellison. Well, all I will say, Mr. Kinard, is thank you
for your candor, again, and that of all the panelists. I
appreciate everything everybody said.
I will just make an offhanded comment. I believe that in
the year 2001, our U.S. military budget was in the order of
$290 billion. I think we are going to have a budgetary amount
in that category of about $708 billion. And we have generals
who say there is a lot of stuff we don't need. There are more
people in military bands than there are diplomats representing
the United States and making friends for this country.
And I think that $30 million is a rounding error when we
talk about what we spend on the weapons of war. If you add up
the top 50 military expenditures of countries around the world,
they are not as much as we spend when you add them all up
together. We don't need all that. We could use a little bit to
house America's poor. That's all I have to say.
Chairwoman Waters. Thank you very much. Members, I will ask
unanimous consent for me to make a few comments and raise a
couple of questions before I dismiss this panel.
First, I would like to thank the panelists for being here.
There has been a lot of discussion about the need for
resources, and we all know that. A lot of discussion about, I
suppose, the notification requirements and some relocation
problems that all get in the way of doing perhaps what some of
you would like to do but cannot do, because of the laws that
you are confronted with.
Let me just make a couple of things quite clear. One-for-
one replacement is an important concept that both the chairman
of this committee, the Financial Services Committee, and the
chairwoman of this subcommittee believe very strongly in, very
strongly in. And we know it has to be financed.
Perhaps you said it, but I didn't really hear, Mr. Kinard,
you say that you support one-for-one. You have to have the
money, you have to have the resources to do it. What I thought
I heard was that one-for-one is just impossible to do.
We heard some testimony here today about what happened in
Atlanta, and the fact that they got rid of their public
housing. They got their HOPE VI projects. We don't know what
happened to those people. We know that our homelessness keeps
increasing. We don't know whether or not there was anything
built in to the system that would absolutely protect against
those people not ending up in the street because they were
guaranteed the right of return.
So, when you look at this bill, and you see one-for-one
replacement, you see right of return, you see maintaining
rights of public housing residents, location of replacement
units, tenant notification, relocation and tenant protections,
fair housing, this is because not only of--Mr. Cleaver and I
kind of live this, coming out of the backgrounds that we come
out of, and our families having lived in public housing. For a
while in my district I had some of the biggest and maybe the
most notorious housing projects in the country that I worked
with. And so, I do understand a lot. I understand the
difficulty.
But I also know that, as you have identified, the--many of
the housing developments are in terrible disrepair. We have not
put the money in to keep them up. And that's something that we
really do have to understand. And I do.
I also understand that we have too many people--some of
them are elected officials--who really would like to get rid of
public housing. They would like to get rid of it. They don't
want the government to continue to be responsible for public
housing. They would like to privatize public housing.
We also know that we have a lot of people who think somehow
public housing is going to be free of problems. It will never
be free of problems. We have, in public housing, a lot of poor
people who have not either taken advantage of opportunity, they
have not had opportunity. And all of the problems that go along
with being very poor and coming out of certain situations are
there.
But I have always believed that we must have the services.
You are running little towns. You have to have the services in
public housing, in order to create a better quality of life for
everybody. And that means that we have to have the health
services, we have to have the anti-drug programs, we have to
have the literacy, we have to have all of that in this little
town, in order to make it work.
And so, some of us see our job as using our time and our
careers to fight for it, to try and get the resources, to make
sure that we are speaking up for the least of these, to make
sure that we are not emptying out public housing when we talk
about redevelopment, because we want to get rid of the problem
people simply.
We understand all of that, and we understand what many of
you go through. But the fact of the matter is, public housing
is not going to be privatized on my watch. It's just not going
to happen.
The fact of the matter is one-for-one replacement will be
pursued relentlessly by all of us who really work on behalf of
public housing tenants.
The right to return, again, the tenant notification--I
understand somebody said all of this notification is just too
much trouble. If it's too much trouble, you're in the wrong
business, because it has to be done.
Now, having said that, I appreciate all of you. I really,
really do. Many of you are doing some very, very tough work.
And many of you are staying in these careers because you
believe in what you do. And sometimes you get very disgusted,
and you don't get the support that you need from your cities,
you don't get the support you need sometimes from your boards.
And you certainly don't get all the support that you need from
the Congress of the United States. But we are going to keep
fighting for it. We are going to keep trying, day in and day
out.
I thank you. This panel is now dismissed. And do we have
any letters that we need to put into the record here?
[No response.]
Chairwoman Waters. Then the Chair notes that some members
may have additional questions for this panel, which they may
wish to submit in writing. Without objection, the hearing
record will remain open for 30 days for members to submit
written questions to these witnesses, and to place their
responses in the record.
Thank you again so very much for your time. This panel is
now dismissed. The committee is adjourned.
Mr. Purnell. Thank you, Madam Chairwoman.
[Whereupon, at 12:20 p.m., the hearing was adjourned.]
A P P E N D I X
April 28, 2010
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