[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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                 HOUSE COMMITTEE ON FINANCIAL SERVICES

                 BARNEY FRANK, Massachusetts, Chairman

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

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

                 MAXINE WATERS, California, Chairwoman

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


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on:
    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.]


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