[Senate Hearing 111-468]
[From the U.S. Government Publishing Office]




                                                        S. Hrg. 111-468


MODERNIZING AFFORDABLE HOUSING FOR SENIORS AND PEOPLE WITH DISABILITIES

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

                                HEARING

                               before the

                            SUBCOMMITTEE ON
           HOUSING, TRANSPORTATION, AND COMMUNITY DEVELOPMENT

                                 of the

                              COMMITTEE ON
                   BANKING,HOUSING,AND URBAN AFFAIRS
                          UNITED STATES SENATE

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                                   ON

   EXAMINING THE MODERNIZATION OF AFFORDABLE HOUSING FOR SENIORS AND 
                        PEOPLE WITH DISABILITIES

                               __________

                            OCTOBER 29, 2009

                               __________

  Printed for the use of the Committee on Banking, Housing, and Urban 
                                Affairs


      Available at: http: //www.access.gpo.gov /congress /senate/
                            senate05sh.html



                  U.S. GOVERNMENT PRINTING OFFICE
56-763 PDF                WASHINGTON : 2010
-----------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Printing 
Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; DC 
area (202) 512-1800 Fax: (202) 512-2104  Mail: Stop IDCC, Washington, DC 
20402-0001







            COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS

               CHRISTOPHER J. DODD, Connecticut, Chairman

TIM JOHNSON, South Dakota            RICHARD C. SHELBY, Alabama
JACK REED, Rhode Island              ROBERT F. BENNETT, Utah
CHARLES E. SCHUMER, New York         JIM BUNNING, Kentucky
EVAN BAYH, Indiana                   MIKE CRAPO, Idaho
ROBERT MENENDEZ, New Jersey          BOB CORKER, Tennessee
DANIEL K. AKAKA, Hawaii              JIM DeMINT, South Carolina
SHERROD BROWN, Ohio                  DAVID VITTER, Louisiana
JON TESTER, Montana                  MIKE JOHANNS, Nebraska
HERB KOHL, Wisconsin                 KAY BAILEY HUTCHISON, Texas
MARK R. WARNER, Virginia             JUDD GREGG, New Hampshire
JEFF MERKLEY, Oregon
MICHAEL F. BENNET, Colorado

                    Edward Silverman, Staff Director

              William D. Duhnke, Republican Staff Director

                       Dawn Ratliff, Chief Clerk

                      Devin Hartley, Hearing Clerk

                      Shelvin Simmons, IT Director

                          Jim Crowell, Editor

                                 ______

   Subcommittee on Housing, Transportation, and Community Development

                 ROBERT MENENDEZ, New Jersey, Chairman

           DAVID VITTER, Louisiana, Ranking Republican Member

TIM JOHNSON, South Dakota            KAY BAILEY HUTCHISON, Texas
JACK REED, Rhode Island              MIKE CRAPO, Idaho
CHARLES E. SCHUMER, New York         BOB CORKER, Tennessee
DANIEL K. AKAKA, Hawaii              JIM DeMINT, South Carolina
SHERROD BROWN, Ohio                  MIKE JOHANNS, Nebraska
JOHN TESTER, Montana                 JUDD GREGG, New Hampshire
HERB KOHL, Wisconsin
MARK R. WARNER, Virginia
JEFF MERKLEY, Oregon

                Michael Passante, Transit Staff Director

               Harold J. Connolly, Housing Staff Director

              Travis M. Johnson, Republican Staff Director

                 Beth Cooper, Professional Staff Member

                  Hillary Swab,  Legislative Assistant

               Sarah Novascone, Republican Chief Counsel

                                  (ii)








                            C O N T E N T S

                              ----------                              

                       THURSDAY, OCTOBER 29, 2009

                                                                   Page

Opening statement of Chairman Menendez...........................     1

Opening statements, comments, or prepared statements of:
    Senator Dodd.................................................     2
    Senator Johanns..............................................     3
    Senator Kohl.................................................     5

                               WITNESSES

Christopher Murphy, Representative from the State of Connecticut.     6
    Prepared statement...........................................    27
Ann O'Hara, Housing Advisor, Consortium for Citizens with 
  Disabilities Housing Task Force................................    10
    Prepared statement...........................................    28
Michelle Norris, Senior Vice President for Development and 
  Acquisition of National Church Residences, on behalf of 
  American Association of Homes and Services for the Aging.......    11
    Prepared statement...........................................    32
    Responses to written questions of:
        Senator Vitter...........................................    50
Toby Halliday, Vice President for Public Policy, National Housing 
  Trust..........................................................    13
    Prepared statement...........................................    41
J. Michael Jones, Parent, Brick, New Jersey......................    14
    Prepared statement...........................................    44
Sheila Crowley, President and CEO, National Low Income Housing 
  Coalition......................................................    16
    Prepared statement...........................................    46

              Additional Material Supplied for the Record

Statement for the Record on behalf of: American Association of 
  People with Disabilities; Concrete Change; Disability Rights 
  Education and Defense Fund; Equal Rights Center; National 
  Spinal Cord Injury Association; National Fair Housing Alliance; 
  National Multiple Sclerosis Society; Paralyzed Veterans of 
  America; and United Spinal Association.........................    52
Prepared Statement of Cassie James Holdsworth on behalf of Adapt 
  Housing Policy Committee--Edited by Madeleine McMahon..........    52

                                 (iii)

 
MODERNIZING AFFORDABLE HOUSING FOR SENIORS AND PEOPLE WITH DISABILITIES

                              ----------                              


                       THURSDAY, OCTOBER 29, 2009

                                       U.S. Senate,
    Subcommittee on Housing, Transportation, and Community 
                                               Development,
          Committee on Banking, Housing, and Urban Affairs,
                                                    Washington, DC.
    The Subcommittee met at 10:30 a.m., in room 538, Dirksen 
Senate Office Building, Robert Menendez (Chairman of the 
Subcommittee) presiding.

         OPENING STATEMENT OF CHAIRMAN ROBERT MENENDEZ

    Chairman Menendez. Good morning. The Subcommittee will come 
to order.
    Today, we are here to further explore the many housing 
issues facing the elderly and people with disabilities in the 
current financial crisis. The effects of this crisis on the 
lives of those who need our assistance the most is a concern to 
all of us. Senator Kohl, for one, has introduced the Supportive 
Housing for the Elderly Act, that would expand HUD's Section 
202 Program to allow seniors to remain safely in their homes, 
and I have introduced, and have the pleasure of having Senator 
Johanns as a cosponsor with me, the Frank Melville Supportive 
Housing Investment Act to revise requirements for supportive 
housing to help people with disabilities live independently. 
These bills are a start, but we are here today to hear how the 
recent financial crisis has affected the availability and 
demand for affordable housing, what those on the front line 
believe the trends and the need will be in the future, and what 
more we can do to help.
    We are all aware that local communities faced with the 
credit crisis, the mortgage crisis, housing and jobs crisis are 
dealing with a precipitous reduction in their tax base, and 
consequently are contemplating cuts in services across the 
board. Obviously, those cuts have an adverse impact on the 
elderly and disabled, who already are struggling to maintain a 
decent standard of living. I would hope that our panelists 
today will provide some insights on the availability of public 
housing, prospects for availability in the foreseeable future, 
whether there is a gaping hole in the already badly frayed 
safety net when it comes to housing in parts of the country 
that have been hard hit during this economic downturn.
    We would like to get an idea about how we can preserve 
existing housing and any reforms that might be necessary to 
increase the rate at which we can build additional 811 units 
for those with disabilities. There are many families of seniors 
and those with disabilities who are waiting for the answers. I 
have heard from many of them in my home State of New Jersey as 
I have traveled the State and we believe that there is a real 
need to respond to the needs of families, particularly as their 
children come into adult years and need a place to sustain 
themselves and call home.
    This hearing is about them. Let us keep that in mind as we 
proceed. It goes to the heart of the notion of community, each 
of us working together for the betterment of all of us.
    With that, I am happy to recognize the distinguished 
Chairman of the full Committee who is very passionate about 
this issue and I know wants to, in addition to his opening 
statement, welcome his colleague from Connecticut. Senator 
Dodd.

           STATEMENT OF CHAIRMAN CHRISTOPHER J. DODD

    Chairman Dodd. Thank you very much, Mr. Chairman. I know I 
am stepping a bit out of order here. I was going back and 
forth. My apologies to Mike Johanns.
    First, let me thank you, Mr. Chairman, for doing this. As 
all of our colleagues know, Bob Menendez lost his mom a few 
days ago, and so we once again want to express our condolences 
to you and your family, as well.
    I also want to thank Chris Murphy for coming. He gives me 
credit occasionally when he does something really well. He 
acknowledges that he was an intern in my office.
    [Laughter.]
    Chairman Dodd. When things go bad, I am not sure----
    [Laughter.]
    Chairman Dodd. But he is doing a fabulous job as a member 
of the House of Representatives and brings a lot of wealth, 
obviously doing a tremendous amount of work on this issue, 
among other things. And so it is truly an honor to have 
Congressman Murphy come before the Committee on the subject 
matter. He brings a great deal of knowledge and expertise to 
it.
    I just have a few opening comments, if I may, Mr. Chairman, 
and then will defer. I certainly thank you, as I said a moment 
ago, for holding this hearing on affordable housing programs 
for the elderly and persons with disabilities. They face, 
obviously, these groups face tremendous challenges when it 
comes to housing, as we all know.
    And again, repeating data I am sure all of us in this room 
are aware of, the senior population is growing tremendously. 
Between the year 2000 and 2030, the number of persons over 65--
and as I look around this dais, I think all of us hope these 
numbers hold here--will grow from 35 million to 71.5 million.
    The Bipartisan Commission on Affordable Housing and Health 
Facility Needs for Seniors in the 21st Century estimated that 
in 2002, an additional 730,000 units of affordable housing will 
be needed by the year 2020. In addition to needing new units, 
we face the challenge of preserving existing affordable 
housing, particularly housing with access to supportive 
services and public transportation that, of course, seniors 
need to remain and live independent lives.
    A recent study found that the Federal subsidies of nearly 
two-thirds of the affordable senior apartments were more than a 
half-a-mile from public transit in 20 metropolitan areas it 
surveyed and are set to expire within 5 years. I would invite 
my colleagues, and I think several of you are cosponsors of 
this, the bill I have introduced called the Livable Communities 
Act, which we have introduced this August. It will help 
communities better assess their housing and transportation 
needs.
    People with disabilities also face great affordable housing 
needs. It is estimated that more than 1.3 million households 
with disabilities are currently facing the worst case housing 
needs, paying more than 50 percent of their income toward rent. 
That is a stunning number.
    Last week, Diane Randall--and I know Congressman Murphy 
knows Diane well, she is a remarkable individual, she heads up 
Connecticut's Partnership for Strong Communities--shared some 
statistics on the housing needs of persons with disabilities in 
our State in testimony before this very Committee. She stated 
that in Connecticut, renting a modest one-bedroom apartment 
would cost more than 116 percent of the income of a person with 
disabilities receiving Supplemental Security Income, SSI. More 
than 116 percent--that is an incredible number, an untenable, 
obviously, situation.
    Given these needs, it is critical for our Federal 
assistance programs to be up to the challenges, and so I thank 
you, Mr. Chairman, for your focusing on this. We kind of talk 
about these issues. We have big hearings on housing, and we 
cover a lot of ground, obviously. But to focus specifically on 
this need, I think is tremendously worthwhile, and I would be 
remiss if I didn't mention, as well, the tremendous work done 
by Herb Kohl in this area and his focus on seniors and the 
elderly, and so this is a major concern. We are happy to have 
you on the Committee, as well. Working with us is a great 
complement on these issues.
    Again, I want to thank Chris Murphy. We are going to name 
this, if we can--the work we are working on--the Frank Melville 
Supportive Housing Investment Act, which he is here to discuss, 
and I am totally supportive of that effort. It is a wonderful 
tribute. He was a transformational figure in affordable housing 
policy in our State and across the country. He was the original 
Chair, Mr. Chairman, of the Melville Charitable Trust and a 
guiding force behind its mission to fund efforts to identify 
and eliminate the root cause of homelessness in the United 
States. I thank Chris Murphy for leading the charge on that in 
the House and we will pick up the mantle over here, as well, 
and hopefully get this done.
    I thank you, Mr. Chairman.
    Chairman Menendez. Thank you, Senator Dodd.
    Senator Johanns.

               STATEMENT OF SENATOR MIKE JOHANNS

    Senator Johanns. Senator Menendez, let me just start out 
and tell you how much I appreciate your leadership on this. I 
also want to express that my thoughts and prayers are with you 
during this difficult time.
    I want to speak for just a minute or two on S. 1481. I am 
very, very proud to be a cosponsor, and I think the lead 
Republican on that effort. This very important legislation will 
bolster our efforts to move toward community integration for 
people with disabilities. I have long believed that we as a 
society must shake the stereotypes that stigmatize this very 
courageous population.
    In my home State of Nebraska, I as Governor led a major 
reform effort. We successfully helped many deserving people who 
deal with mental illness move from antiquated State 
institutions to community-based care. Today, many of them are 
living in apartments. They go to work every day. They are proud 
to be productive members of society instead of being residents 
of a State institution.
    But there are things that are missing, and we recognize 
that. So what more can we do? We can invest in integrated 
housing options.
    In Nebraska, we have a Nebraska Housing-Related Assistance 
Program. It uses State funds to provide rental assistance for 
very low-income persons with serious mental illness. The 
assistance provides rental payments, utility payments, makes 
security deposits, and other help. As of 2009, I am very proud 
to report on behalf of my State that the program is now serving 
about 1,000 individuals. It marks another big step toward 
enabling this very deserving population to gain independence 
and be a part of their communities.
    Nebraska's experience demonstrates how a flexible rental 
assistance program can be an invaluable tool in promoting 
affordable housing. S. 1481 creates a project-based rental 
assistance demonstration program that I think builds on the 
success of a number of States, one of which is Nebraska. Our 
experience back home demonstrates the value of public-private 
partnerships in meeting the important needs that are there for 
people with disabilities.
    For the past decade, interestingly enough, there has been 
Federal authority for nonprofit sponsors to use grants and 
project-based assistance to partner with for-profit developers 
to integrate rental assistance into larger developments. 
Unfortunately, the results have been underwhelming, as we know. 
Fewer than five projects have been completed since 2000. It 
just hasn't worked very well.
    This bill, S. 1481, would authorize changes to the 811 
Capital Advance Program and a new demonstration program. It 
literally builds on the successes of what has happened in the 
State laboratories--Nebraska, Louisiana, North Carolina. I 
think it will help jump-start this integration effort.
    Failure to reform Section 811 would be a genuine failure by 
Washington to help its citizens who are most in need. 
Currently, the program is building fewer than 1,000 units per 
year, nowhere close to the scale of the unmet need in all of 
our States and States across the country.
    So what I would like to say, just to wrap up, is that I 
just think this is the right step at the right time, a step in 
the right direction. Congressman, I thank you for your 
leadership on the House side. It is my hope that here on the 
Senate side, we can pick up the mantle here and move this 
forward and celebrate the day that this becomes law.
    Thank you very much.
    Chairman Menendez. Thank you, Senator. Thank you for 
joining me as the lead Republican on the legislation. It is 
worthy of a bipartisan effort, and with the Chairman's 
assistance, we are going to make this happen.
    With that, our distinguished colleague has worked a lot on 
the issues on seniors and housing, and for those of us who are 
looking at the horizon saying it is good work that you do, 
Herb, so that we can be ready when we get there. Thanks so 
much. Senator Kohl.

                 STATEMENT OF SENATOR HERB KOHL

    Senator Kohl. Thank you very much, Senator Menendez. You 
are also in my thoughts and prayers, as well as all of your 
colleagues in the Senate.
    We appreciate your being here at this hearing this morning. 
HUD's Senior Disabled Housing Programs, also known as the 
Section 202 and 811 programs, are often coupled together, not 
only because they are the only two developmental grant programs 
of their kind, but more importantly because they address 
traditionally underserved populations, providing accessible, 
safe, and affordable housing for both the disabled and the 
elderly so they can live independently as well as in dignity.
    There are currently over 300,000 seniors living in 6,000 
Section 202 units across the country. Unfortunately, this 
program is not able to address the growing demand. For every 
available unit, there are 10 seniors waiting. Even worse, some 
developments are at risk for being replaced by high-priced 
condos and apartments. As a result, many of the seniors 
participating in the Section 202 program could become homeless 
or overwhelm other Federal aid programs.
    Earlier this year, Senator Schumer and I introduced S. 118, 
a bill to modernize and improve Section 202 housing for seniors 
across our country. The Section 202 program provides capital 
grants to enable the development of supportive housing 
exclusively for the very low-income elderly population. 
Additionally, the program provides rental subsidies and grants 
to fund supportive services for seniors. Over one-third of the 
Section 202 population is considered disabled enough to be at 
risk for being put in a nursing home. By reducing the need for 
costly nursing home stays, access to supportive services saves 
both seniors and the Government money.
    Modernizing the elderly housing program will promote the 
construction of new senior housing facilities as well as 
preserve and improve existing developments. Many of the older 
properties are in need of rehabilitation and increased access 
to supportive services. This legislation will help expedite the 
conversion of houses to assisted living facilities and reduce 
other impediments for older properties to obtain the 
renovations they desperately need.
    We look forward to the testimony of the witnesses here 
today, and I ask unanimous consent to insert a letter of 
support for our bill from the Elderly Housing Coalition into 
the record.
    Chairman Menendez. Without objection.
    Senator Kohl. Thank you so much.
    Chairman Menendez. Thank you, Senator Kohl.
    Our first witness, we are very pleased to welcome our 
colleague from the House, Congressman Christopher Murphy. You 
may have gotten the best introduction you could get already 
from the Chairman. If you survived your time in his office as 
an intern, you can do anything.
    [Laughter.]
    Chairman Dodd. He was a star.
    [Laughter.]
    Chairman Menendez. Congressman Murphy is currently serving 
his second term representing Connecticut's Fifth District. He 
serves on the Energy and Commerce Committee, the Committee on 
Oversight and Government Reform. Prior to his service in the 
U.S. House of Representatives, he served for 8 years in the 
Connecticut General Assembly. He is the House sponsor of 
legislation that we have spoken about here that we are 
sponsoring in the Senate to modernize the Section 811 program 
for housing for people with disabilities.
    We welcome you, Congressman, and look forward to your 
testimony.

STATEMENT OF CHRISTOPHER MURPHY, REPRESENTATIVE FROM THE STATE 
                         OF CONNECTICUT

    Mr. Murphy. Thank you very much, Chairman Menendez, 
Chairman Dodd, Senator Kohl, Senator Johanns. It is especially 
exciting to be here to testify in front of you, Mr. Chairman, 
and in front of Senator Dodd.
    Of course, I only learned good habits in your office. There 
is no question about that. But I also know that my advocacy for 
this issue and my advocacy for the people that are assisted by 
these programs is a direct result of the fact that I learned to 
care about public service through not only my work for Senator 
Dodd, but through the inspiration that he gave many of us to 
join this field and to join this calling, and so for that, I am 
thankful.
    Chairman Menendez, as the main House proponent of the 
legislation that reauthorizes Section 811, it is a pleasure to 
be here. At the outset, let me thank you for your efforts here 
in the Senate. I think that the legislation that we have 
introduced both in the House and the Senate to revitalize this 
very important program, which provides housing for people with 
both physical and mental disabilities, is going to provide 
thousands of more housing units, permanent supportive housing 
across the Nation, and will ensure that the very low-income 
disabled population will have safe and affordable places to 
live.
    As the experts on the next panel are going to tell you and 
as Senator Johanns has also pointed out, HUD's 811 program 
isn't currently doing enough to meet this enormous demand of 
nonelderly disabled. There are approximately 1.3 million 
nonelderly disabled households with what HUD defines as worst-
case needs, meaning that they are very low income, they pay 
more than 50 percent of their income in rent, and they live in 
substandard housing.
    While the need is obviously great, only a trickle of 
affordable units come online each year throughout the country, 
and as we heard in testimony before the House Financial 
Services Committee, even a small supportive housing project can 
take sometimes almost 8 years to complete. By all accounts, 
this program has become overly bureaucratic and has not adapted 
to complement the good and innovative work that hundreds of 
organizations across the country that are trying desperately to 
provide quality permanent supportive housing to combat the 
unrelenting housing crisis faced by millions of low-income 
individuals with disabilities.
    In Connecticut, we offer a pretty good example of how 
improvements to the program can complement the work that is 
already being done by State Governments and housing advocacy 
organizations, and Senator Dodd referenced this in his opening 
remarks. In Connecticut, these partnerships have led to a 
commitment to create about 10,000 new units of permanent 
supportive housing over the next 10 years. By using the Low-
Income Housing Tax Credit with a State-provided set-aside for 
rental assistance, we have been able to secure permanent 
supportive housing for disabled, severely low-income 
Connecticut residents, and the same financing mechanism has 
been used with the same type of successful results in North 
Carolina, Louisiana, and several other States, with tremendous 
results.
    This approach, which is really a new public-private 
partnership leveraging existing tax credits for expanded use, 
is included on a national scale in both the Chairman's 
legislation, S. 1481, the Frank Melville Supportive Housing 
Act, and the House legislation, H.R. 1675, which passed the 
House in July.
    This approach, Mr. Chairman, of public-private partnerships 
will derive more units of permanent supportive housing using 
the same funding that we have today--more bang for our buck. 
Currently, the average capital cost of an 811 project is about 
$100,000 per unit plus a monthly rental payment equal to about 
$6,000 a year. Under our legislation, the capital investment is 
wiped out because the units are being built through existing 
credits and programs, and because they are already affordable 
units, the rental subsidy will actually be less than the $6,000 
a year average.
    As you know, Mr. Chairman, Members of the Committee, we 
fund this change by using funds currently set aside for the 811 
mainstream vouchers. HUD has done a less than adequate job in 
ensuring that these vouchers run now through the 811 program 
are used to support people with disabilities. They don't 
monitor or track them today. And while there is a great need 
for mainstream vouchers generally, these funds would be better 
used to ensure that 811-eligible individuals have access to 
permanent supportive housing.
    Beyond this change, Mr. Chairman, the legislation also 
allows States and State housing agencies to do much of the 
bureaucratic paperwork involved in these applications, which 
will greatly expedite the applications process. There are but a 
few, I believe, of these refinements. These are just a few of 
the refinements that are outlined in these two bills that will 
make the 811 program more efficient, less bureaucratic, using 
Federal dollars in a way that produces truly permanent 
supportive housing units across this country.
    To add just a few words to those already offered by Senator 
Dodd about Frank Melville, whose name is attached to this 
legislation, Frank Melville and his wife, who is still with us, 
Allen, live in the Northwest corner of Connecticut. The 
Melville Charitable Trust has founded housing advocacy and 
homelessness projects and programs across both the Northeast 
and this country, and the bill that we are introducing today, I 
don't think could be possible without the fact that the 
Melvilles have decided to use their family's resources in order 
to combat the issue of homelessness.
    Mr. Chairman, thank you so much for your generous attention 
to this issue and I look forward to working with this Committee 
to pass this bill in complement with the House measure.
    Chairman Menendez. Thank you very much, Congressman Murphy. 
Thank you for your leadership in the House. I don't know if any 
Members have any questions.
    Chairman Dodd. I was just going to raise one, if I could, 
and Congressman Murphy highlighted this, as well. There was a 
project in Windham, Connecticut, Mr. Chairman--the community 
actually where I was born, Windham, Connecticut--where they 
have been very successful in linking up people with 
disabilities and jobs. And again, this is always a hard 
question. But the key to that was the transportation issue. 
There were other factors, but the transportation was so 
critical to linking it together.
    I just wonder from your perspective, Chris, on the 
importance of affordable housing and integrated in the 
community and particularly with stressing the access to public 
transportation. I don't know if you have any additional 
thoughts on that at all. I don't know if you are familiar with 
that Windham project. It was a pilot project.
    Mr. Murphy. It is a critical component of supportive 
housing, in particular. What makes supportive housing work, as 
you know, Chairman Dodd, is that it is not just the house, but 
it is the support services that come along with it to make sure 
that that individual not only has the medical wrap-around 
services that they need, but also have the job skills and the 
connection to jobs to keep them a sustainable and productive 
member of the community.
    And so as I understand it, some of the most successful 
supportive housing programs that have been built have these 
wrap-around services that include transportation links, which 
obviously speaks to the importance of building new supportive 
housing units along existing transportation lines, but also 
speaks to the need to make sure that you have these wrap-around 
services that can include links to job sites.
    And right now, the problem is that States are spending so 
much money just building the supportive housing sites that they 
have very little money left over to try to provide those 
supportive services, transportation being a key component of 
it. The idea behind this legislation is that by better 
leveraging some of the capital costs, we can provide States 
with some greater flexibility to build in some of those 
supports, including transportation.
    Chairman Dodd. It is just a great concept, and I commend 
both you, Chairman, and Senator Johanns on this, as well, on 
that public-private partnership idea. But the things we are 
looking at, today, basically, support disability is income 
replacement, in which case if you get income replacement, there 
are real restrictions under Medicaid for people to actually 
then work. You have real ceilings on how much you can do. And 
to the extent that we can break through that and come up with 
alternative ideas where people with disabilities or elderly who 
want to continue--as most do want to continue working, even 
with the disability they have, to be productive--and obviously 
it is a great source of relief, obviously, financially, that 
people have alternatives. And so these support services, it is 
not just a feel good thing, there is really a real cost savings 
involved in this, as well.
    So I think it is a terrific idea and I commend you, Mr. 
Chairman and Senator Johanns and others for championing this. 
As Chairman of the Committee, I will make sure we find the time 
to get this up on our calendar here. I can't predict what will 
happen on the floor, but to move this along. I think it 
complements so much the other things we are trying to do. 
Despite the battles and disputes over health care and other 
issues, these are the pieces that make all of that work at some 
point.
    Chairman Menendez. Senator Dodd, I appreciate your 
question, and in our next panel, one of the things we are going 
to explore, it is not just the question of the lack of actual 
affordable housing units, but it is also getting the right 
supportive services as a mix in there. I know that Chairman 
Dodd has a unique opportunity here, not only as the Chairman of 
the full Committee, but as a senior member of the Health, 
Education, and Labor Committee, to help us meld this together. 
And so we have got a great ally in the Chairman.
    If there are no other questions, thank you, Congressman 
Murphy, again. We look forward to working with you to make this 
passage a reality.
    Mr. Murphy. Thank you very much.
    Chairman Menendez. Thank you.
    Let me, as Congressman Murphy leaves, let me call up the 
witnesses to the second panel. Our first witness on the second 
panel, and if you will all start moving up, Ann O'Hara is a 
cofounder and Associate Director of the Technical Assistance 
Collaborative, Inc., a Boston-based nonprofit organization. She 
has had over 25 years' experience in the development and 
administration of affordable housing programs at the national, 
State, and local level.
    Our next witness is Michelle Norris. She is a Senior Vice 
President for Development and Acquisition of National Church 
Residences and will be speaking on behalf of the American 
Association of Homes and Services for the Aging. Ms. Norris is 
also the Immediate Past President of the National Affordable 
Housing Management Association.
    Our third witness is Toby Halliday. He is the Vice 
President of Public Policy for the National Housing Trust. He 
has worked with nonprofit groups in both urban and rural 
communities, providing technical and financing assistance on 
affordable housing and other community development projects.
    Our fourth witness is Michael Jones, a constituent from the 
great State of New Jersey, from Brick, New Jersey, and he is 
the father of an adult son with a mental disability, and we 
appreciate you, Mr. Jones, coming to share some of the 
challenges that you and your family have had as representative 
of many others.
    And our fifth witness is Sheila Crowley, who is the 
President and CEO of the National Low Income Housing Coalition, 
which is dedicated to ending the affordable housing crisis in 
America.
    We welcome you all and look forward to your testimony. We 
would ask you to summarize your testimony for about 5 minutes 
or so. Your full statement is going to be included in the 
record and then we will have some time for some exchanges.
    Ms. O'Hara, would you like to start?

   STATEMENT OF ANN O'HARA, HOUSING ADVISOR, CONSORTIUM FOR 
         CITIZENS WITH DISABILITIES HOUSING TASK FORCE

    Ms. O'Hara. Thank you so much, Senator Menendez, Senator 
Johanns, Senator Kohl. I am so happy to be here today. I am not 
only testifying on behalf of the Technical Assistance 
Collaborative, but here to testify for the Consortium for 
Citizens with Disabilities Housing Task Force. We would like to 
thank you and the Committee for your leadership on housing, 
including passing the HEARTH Act and the National Housing Trust 
Fund.
    In addition to S. 1481, we want to recommend quick action 
on S. 118 and S. 1731, Senator Reed's proposal for an immediate 
infusion of $1 billion for the Housing Trust Fund.
    I am here today to strongly support S. 1481, the Frank 
Melville Supportive Housing Investment Act, which will 
modernize and reinvigorate HUD's Section 811 program. The CCD 
Housing Task Force, which includes many national disability 
organizations, believes that this legislation is essential to 
improve and revitalize 811, an important HUD program which you 
have already heard produces less than 1,000 units of new 
housing per year. The program is inefficient, it is outdated, 
it is plagued with red tape, and it doesn't reflect the desire 
of most people with disabilities to live independently in 
integrated housing.
    The legislation is important because the need for 
supportive housing has never been greater. Hundreds of 
thousands of nonelderly people with disabilities today remain 
unnecessarily in high-cost nursing homes and State 
institutions, or are stuck in substandard board-and-care homes 
that are segregated, or remain at home with aging parents who 
themselves are in their 70s and 80s. Meanwhile, State 
Government is struggling to meet the mandate of the Supreme 
Court's Olmstead decision and reduce the reliance on these 
expensive facility-based models.
    The data on this is overwhelming. There are over 400,000 
nonelderly people with disabilities today living in nursing 
homes, including 16,000 people under the age of 30. Most of 
these people could live in permanent supportive housing.
    New Jersey must create 1,065 new units of permanent 
supportive housing during the next 5 years for people with 
mental illness and has another 2,300 people with developmental 
disabilities who are living in State facilities, waiting to 
move to the community, and 22,000 adults who are living at home 
with aging parents.
    A recent Olmstead case in New York covers 4,300 people just 
in New York City with mental illness who are living in adult 
care homes that the judge deemed to be more restrictive and 
institutional than psychiatric hospitals. These examples are 
the tip of the iceberg of the problem, and 811 is a really 
important solution to this crisis.
    As you have heard, the bill will eliminate the bureaucracy 
that plagues this program, help nonprofits create more 
integrated housing opportunities that people with disabilities 
strongly prefer. The demonstration program could create 2,500 
to 3,000 more units a year than we are getting now without 
increasing the appropriation for 811. It leverages Low-Income 
Housing Tax Credits and HOME funds, reduces 811 outlays for 
capital, and reduces the time that it takes to get new units 
created.
    We are really indebted to the States of Nebraska, North 
Carolina, and Louisiana for pioneering these cost-effective 
models included in the demonstration, which create small set-
asides of 811 units in larger affordable housing properties 
that we produce every year without a lot of delay that we see 
in 811. Just in those three States, they have developed over 
3,500 new integrated supportive housing units in the last 
couple of years.
    This legislation also resolves a longstanding problem with 
the 811 mainstream voucher program. There are 14,000 tenant-
based vouchers in that program. They are paid for with 811 
money, but they are administered by housing authorities as 
Section 8 vouchers. They are not being tracked adequately. They 
are rarely used for supportive housing. This bill resolves all 
those problems by moving those vouchers permanently to the 
Section 8 program.
    Finally, supportive housing is not just the right solution 
for people, and I know we all believe that here today, but it 
is also the most cost effective solution. For example, a recent 
study in Columbus, Ohio, shows a 40 percent savings in public 
mental health services for people living in Section 811 
housing. Another study in the Journal of Health and Social 
Policy found that the average expenditure of a person receiving 
Medicaid services in the community was $44,000 less than 
institutional care.
    Thank you so much for this hearing today and we look 
forward to working with all of you to make this legislation a 
reality and to honor the memory of Frank Melville.
    Chairman Menendez. Thank you very much.
    Ms. Norris.

    STATEMENT OF MICHELLE NORRIS, SENIOR VICE PRESIDENT FOR 
 DEVELOPMENT AND ACQUISITION OF NATIONAL CHURCH RESIDENCES, ON 
 BEHALF OF AMERICAN ASSOCIATION OF HOMES AND SERVICES FOR THE 
                             AGING

    Ms. Norris. Good morning, Chairman Menendez, Chairman Kohl, 
Senator. I appreciate this opportunity.
    My name is Michelle Norris, and I am with National Church 
Residences, but I am speaking on behalf of AAHSA, the American 
Association for Housing and Services for the Aging, a national 
association representing nonprofit providers that have a 
continuum of aging service. That includes adult daycare, home 
health, community services, senior housing, assisted living 
facilities, continuing care retirement communities and nursing 
homes. AAHSA also has State associations in each of your 
States.
    NCR has been involved with AAHSA for 30 years, and our CEO 
is currently Chairman of AAHSA.
    NCR has the privilege of being a very significant 
affordable housing provider for seniors. We have done a 
spectrum of programs from the 202 loan program to the 202 PRAC, 
to tax credits, to preserving 202s with the tax credits.
    We also have a very large health care division in our Ohio 
area that allows us a unique perspective on costs and benefits 
that allow for all levels of care in housing and health care.
    As an example of some of our experience, we do have quite a 
few projects in New Jersey. We have 4 202 loan programs. We 
have six PRACs. We have an acquisition 202, and we actually fee 
manage a project in Brick.
    In Wisconsin, we have actually purchased a few projects we 
have from both nonprofits and for profits.
    I apologize, we have nothing in Nebraska, but we love the 
State anyway.
    Chairman Menendez. I see you did your homework, though.
    Ms. Norris. I commend you all for your efforts on this 
bill. This bill is full of technical fixes and policy 
initiatives that will bring the 202 program into the 21st 
Century. It provides much needed flexibility and innovation to 
help the 202 program become more relevant to the aging in place 
issues we are facing.
    My written testimony describes a lot of these provisions in 
detail and why they are so important. So I will not take time 
right now to go into those. However, I want to talk a little 
bit about the overview of why it is important.
    I suspect you have heard the term, the tsunami of aging 
that is on its way. In Columbus, Ohio, there was a report 
recently, and the headline said: The aging population is going 
to cripple our budget. Half of our State budget will go to 
Medicaid by 2020.
    The article continues to say that Ohio is getting older and 
more expensive, and I suspect the same is true for your States.
    Never before in our 50-year history of this program has the 
202 program been so relevant as it is today. NCR sees all 
levels of housing from independent to assisted living, to 
higher care. So we are in the unique position to say that 
housing like the 202 program, coupled with home-based services, 
is cheaper for the Government and provides higher satisfaction 
to the residents.
    I believe this is a point that has been overlooked in the 
health care debate right now. As an example, in Ohio, 
affordable housing costs the Government $25 a day. You can add 
a dollar a day for a service coordinator. You can $25 for 
meals. That still is $50, $55 a day.
    If you go to assisted living, it costs $100 a day. If you 
go to dementia care, it is $200 a day. If you go to a Medicaid 
bed, it is more than that, and Medicare is $450 a day.
    So it does not take long to figure out that housing is the 
solution. It is the first building block to creating cheaper, 
more effective and more compassionate aging in place programs. 
That is why this legislation is important. It will make it 
easier and more efficient to build and to preserve that very 
first building block. It can reduce costs in Medicaid and in 
Medicare.
    As a really great example, here in Ohio, we were the first 
Ohio property to create the Affordable Assisted Living 
Conversion Program, and the bill discusses that program and 
tries to make it even better. In that program, we were able to 
take a HUD 202 building and convert it with a grant so that it 
was eligible for an assisted living facility.
    Then we worked with our State agency to allow a Medicaid 
waiver so that we now have a rental subsidy for the residents 
and a service subsidy to provide higher level of care. It is an 
amazing opportunity, and this bill will make that not just one 
example but multiple people doing it.
    The need for affordable supportive senior housing 
development and preservation is undeniable and critical. We are 
excited that Congress believes these topics warrant future 
discussion, and I urge you to move this bill forward, to 
increase the efficiency of the program that will help the 
residents today and those for the future.
    Thank you.
    Chairman Menendez. Thank you.
    Mr. Halliday.

 STATEMENT OF TOBY HALLIDAY, VICE PRESIDENT FOR PUBLIC POLICY, 
                     NATIONAL HOUSING TRUST

    Mr. Halliday. Chairman Menendez, Senator Kohl, Senator 
Johanns, and Members of the Subcommittee, thank you for holding 
this hearing today and for the opportunity to testify in 
support of S. 118, the Section 202 Supportive Housing for the 
Elderly Act of 2009.
    My name is Toby Halliday, and I am the Vice President for 
Federal Policy for the National Housing Trust. Over the past 
decade, the Trust has helped to save and improve more than 
22,000 affordable rental apartments in over 40 States.
    I also serve as the Chair of the National Preservation 
Working Group, which is a coalition of 36 nonprofit 
organizations supporting affordable rental housing. The members 
of the Preservation Working Group strongly support a balanced 
national housing policy that includes decent, affordable rental 
housing and support legislation to protect and revitalize 
affordable housing for seniors.
    As Senator Dodd indicated in his opening statement, the 
needs of America's lower income seniors are great, and they are 
expected to grow. The population of Americans aged 65 and older 
is expected to double between the year 2000 and 2030. Harvard's 
Joint Center for Housing Studies recently found that among 
seniors who rent 2.5 million, about 53 percent, already pay 
more than 30 percent of their income for housing and 1.4 
million pay more than 50 percent.
    This year, the HUD Section 202 Supportive Housing for the 
Elderly Program will celebrate its 50th birthday. Since 1959, 
the 202 program has led to the creation of over 400,000 
affordable rental apartments for low income seniors around the 
Country. This housing serves nearly every community in the 
Nation, including nearly 12,000 in New Jersey and 2,400 in 
Nebraska, as shown in Attachment A of my testimony.
    But many 202 properties are 40 years old or older, in need 
of repair and improvements, and are stretched to meet the needs 
of their increasingly frail residents. Under the current 
Section 202 law, the redevelopment and preservation of existing 
properties can be time-consuming and cumbersome. S. 118, 
sponsored by Senator Kohl and Senator Schumer, would simplify, 
streamline, and modernize procedures to improve and preserve 
these properties, encourage broader participation by 
developers, lenders, and investors, and create needed 
construction jobs.
    The Trust strongly endorses the provisions of S. 118 that 
would streamline procedures for recapitalization, require 
tenant notice and participation, and require that approved 
rehabilitation ensure the long-term viability of the property.
    We also support the proposal to provide new resources to 
protect current and future residents from rent increases needed 
to pay for necessary recapitalization.
    The bill should clarify that such assistance is to be made 
available for all currently unassisted units in the program 
when a property is refinanced and rehabilitated. Without such a 
provision, properties are at greater risk of conversion and 
many units would face unacceptable rent increase for current 
residents. In Wisconsin, for example, there are nearly 5,000 
unassisted units in older 202 properties that are at risk of 
conversion or significant rent increases.
    The Trust also supports a provision for existing nonprofit 
owners to retain reasonable proceeds from the sale or 
refinancing of these properties even when current owners may 
lack the desire, especially where current owners may lack the 
desire, or capacity to continue long-term stewardship. Although 
we share the concern that excessive proceeds to owners can 
raise the cost of this housing, we believe a reasonable 
incentive is needed to preserve these properties by encouraging 
the transfer to new ownership.
    The National Housing Trust urges the earliest possible 
consideration of this bill, and thank you, Mr. Chairman, for 
your leadership in holding this hearing. Thank you.
    Chairman Menendez. Thank you very much.
    Mr. Jones.

    STATEMENT OF J. MICHAEL JONES, PARENT, BRICK, NEW JERSEY

    Mr. Jones. Senator Menendez, I am too sorry about your 
loss.
    I would like to talk to you as a father of someone with a 
psychiatric disability, and I appreciate the invitation to 
provide this testimony on behalf of two out of every five 
families in the United States who are affected by mental 
illness.
    Today, I will share some of my son's experiences in 
obtaining and living in several different types of supportive 
housing.
    Michael was first diagnosed when he was 16, with a mental 
illness. He was ill a lot longer than that, but one key thing I 
learned is that those who contract mental illnesses seem to be 
stuck where they are struck, as a saying we use.
    The knowledge of when one began to be ill would be helpful 
for those trying to provide services or tailor services to 
their needs. Another thing I found is that many times those 
providing services or providing information or giving 
directions, which are not followed by the consumer, do not 
really seem to be able to empathize with the person that is 
receiving the services, and they label them as noncompliant or 
nonresponsive when it may simply be that they have a bad memory 
because of their illness.
    Michael always wanted to be on his own but had no financial 
means or living skills to do that. So, as soon after graduation 
from high school as he could, he left to live with a friend, 
but that ended up in crisis and him being back into the State 
hospital for the second time.
    After this hospitalization, he was released to a group home 
for chemical abusers as well as being mentally ill. He did 
pretty well for a while, but eventually he started trying to 
leave that facility. And he finally did, but he left to live 
with his girlfriend who was pregnant.
    My wife took the couple to apply for Section 8 housing in 
May of 2006, and our son was informed after a few months that 
he was eligible, but he never heard anything further.
    The day treatment program he and his girlfriend attended 
referred them to their supportive housing office, and this 
office provided them with a listing of several apartment 
complexes who had no vacancies at the time.
    They were still living with the girlfriend's parent, 
mother, when the baby was born in November. However, there was 
a fire in their apartment the day before the baby was to come 
home, and so they were essentially homeless and went to live 
with relatives.
    Because the couple, well, the family now was homeless, the 
supportive housing office was able to get them into an 
apartment in about 2 months. The new family was provided 
support to get the lease established, some deposit payments and 
transportation to obtain utilities. Their case manager also 
picked out furniture for the house and delivered it before they 
moved in.
    They initially were visited by their case manager several 
times a week, but this soon slowed to only periodically.
    As you might guess, my son had a very difficult time 
adjusting to the routine of daily life and family life, and he 
also had no ability to manage his finances. In less than a 
year, our son and girlfriend split up. He then briefly came 
back home to live with us.
    But during this timeframe, the New Jersey Division of 
Mental Health Services program called Residential Intensive 
Support Teams, RIST, which had developed to primarily provide 
intensive supported housing for those leaving the State 
hospitals, was expanded in Ocean County to provide housing for 
those in the community at risk of being homeless and also 
needing more intensive services. Our son was referred and 
selected to participate. So he has been pretty lucky.
    A major difference between this program and supported 
housing is that RIST initially holds the lease and acts as the 
representative payee for social security benefits, and it 
provides intensive life skill training. This is beneficial 
because some clients of the service may need to be hospitalized 
periodically or have real problems managing their finances, as 
my son does, and spending. This way, the clients do not lose 
their homes, and someone is there to help keep their benefits 
and affairs straight as possible while they are in the 
hospital.
    This program does constantly strive to empower consumers to 
relocate to less restrictive living arrangements. However, in 
the case of my son, his income is SSI and SSDI. That is going 
to be a little difficult, I imagine.
    He moved into his apartment to live on his own in early 
2008, and he started a new day program. RIST provided evening 
life skills groups for their clients at the apartment complex 
where he particularly lived, and Michael volunteered to help 
others to learn from his experience on how to use the public 
transportation system.
    It did not take him long, however, to make new friends and 
start his first loud party. He ran up his electric, cable bills 
and telephone bills very quickly, and he had no one to take up 
the slack of paying for food and quickly found that food stamps 
were not enough. He started selling things he owned, or stole, 
to buy food and then drugs.
    This past summer, when he was hospitalized again, he got to 
the point of deciding that living on his own was not really 
appropriate for him yet, and he needed to get into a long-term 
drug rehab program and back into the structure of group home.
    The hospital case manager found there were no long-term 
rehab programs available. So he made the correct decision to go 
back to the State hospital for treatment and so that he could 
also get into a group home again. He is now back in that 
original MICA group home that he was in before.
    In his initial attempts, he was not really ready for 
supported housing because he never really learned the skills 
and habits needed to live independently. His girlfriend, whose 
mental illness hit her much later in life, however, has 
continued to do very well in supported housing, as do many.
    The lesson here is that providers of supported housing must 
understand that those with mental illnesses may require much 
more than periodic support. Providers may need to provide very 
intensive case management to guide and reinforce living skill 
development, at least for a year, perhaps longer.
    That concludes my testimony. Thank you.
    Chairman Menendez. Thank you very much, Mr. Jones. Thanks 
for sharing your story and insights. We appreciate it.
    Ms. Crowley.

 STATEMENT OF SHEILA CROWLEY, PRESIDENT AND CEO, NATIONAL LOW 
                    INCOME HOUSING COALITION

    Ms. Crowley. Chairman Menendez, Senator Kohl, Senator 
Johanns, thank you very much for inviting me to testify today.
    I am Sheila Crowley. I am the President of the National Low 
Income Housing Coalition, and we strongly support both the 
Section 202 and 811 programs and the concept of providing 
supportive housing for vulnerable people, and we very much 
support the 2 bills that are under consideration today.
    Each year, the National Low Income Housing Coalition 
examines what rental housing costs and what low income people 
earn, and then we document the degree to which low income 
people really cannot compete in the private rental market. We 
do that in every jurisdiction in the Country.
    So, for example, Out of Reach 2009 tells that in Hudson 
County, New Jersey, where 69 percent of the residents are 
renters, in order to be able to afford a modest 2-bedroom 
apartment, the household has to earn $42,760 a year.
    There is no place in the Country where somebody whose 
annual income is the equivalent of the full-time minimum wage 
can afford the rent on even a one-bedroom apartment, using the 
standard of spending no more than 30 percent of household 
income on their homes.
    So, if low wage workers have a tough time affording the 
most basic home, elderly and disabled people, especially those 
who depend on SSI for their income, have it much worse. The 
fair market rent in Hudson County, New Jersey, for an 
efficiency, for example, is $889 a month. Yet, 30 percent of 
monthly SSI income in New Jersey is $212.
    In Nebraska, the 30 percent of SSI income is $202 a month. 
The FMR, fair market rent, on an efficiency in Omaha is $534 a 
month. You can see there is just a significant gap.
    At the end of 2008, there were 6.3 million adults receiving 
SSI in the United States, 4.3 million were blind or disabled 
adults between 18 and 64, 1.2 million were adults 65 years of 
age or older, and then there were another 830,000 who were 
blind and disabled and were 65 years of age or older.
    SSI recipients are among the very poorest people in our 
Country, and, in the absence of housing assistance in any form 
or some form, they cannot afford to live in any community. So 
these are precisely the people who the 202 and 811 programs can 
best serve.
    There are approximately 300,000 units of 202 housing now, 
with just a third having the rent assistance that makes them 
affordable to the lowest income people. We have approximately 
30,000 units of Section 811 housing, another 14,000 Section 811 
vouchers. Many SSI recipients receive other forms of Federal 
Housing Assistance through public housing, project-based 
Section 8 and vouchers, et cetera. But, nonetheless, demand far 
exceeds the supply.
    A significant number of low income elderly people have 
serious housing cost burdens: There are 26.6 million households 
in the United States with 1 or more members who are 65 years of 
age or older; 16 percent of senior households are extremely low 
income, and 74 percent of these households pay more than 30 
percent of their income for their housing; 51 percent or 2.1 
million households, which is the key number here, of extremely 
low income senior households pay more than half of their income 
for their housing.
    So when a poor elderly person has to spend more than half 
of her income, it means she scrimps on food, on medicine, on 
heat and other basic needs. These are the elderly people most 
at risk of becoming homeless, and living hand to mouth that way 
hastens the day when an elderly person can no longer live on 
her own and will require more expensive institutional care.
    I want to echo the comments of Michelle Norris, that 
affordable housing policy is health care policy, and we have to 
think of those two together.
    Enactment of S. 1481 and S. 118 are important steps for 
Congress to take up as soon as possible.
    We also urge the Committee to look at policies for the 
preservation of the rest of the affordable housing stock.
    We also would urge you to look at the Section 8 Voucher 
Reform Act that will modernize the voucher program. With the 
promises that come with several, we will see a much more 
efficient and effective use of the voucher program.
    Finally, we ask the Committee to move quickly on funding 
for the National Housing Trust Fund. At least 75 percent of the 
National Housing Trust Fund units must be affordable to 
extremely low income people. We envision that many of those 
units will be available to seniors and people with 
disabilities.
    I would like to just make a quick note on the National 
Housing Trust Fund in recognition of Frank Melville as well. 
The Melville Charitable Trust has supported the campaign to 
establish the National Housing Trust Fund for many, many years, 
and without their support enactment of that bill last year 
would not have been possible. It would be a great honor of 
Frank Melville if we were to get the program funded and moving 
this year.
    Congress has done a lot already this year on low income 
housing policy, and we would see this as the first year of the 
111th Congress to be quite historic if we could build on the 
existing accomplishments by getting these two bills passed, 
getting SEVRA passed and getting the trust fund under way.
    Thank you very much.
    Chairman Menendez. Thank you.
    Thank you all for your testimony. You have made the best 
use of it. Not only have you focused on the subject of the 
hearing, but you have included a few other advocacies as well. 
So we appreciate it.
    Since there are only three of us, I think we will do some 
7-minute rounds, make sure we can get all of our questions in, 
and then we will go from there. I will start off on the 
questions.
    I want to ask the panel, our bill to reform 811 combines 
other sources of financing with Section 811 funds to build 
homes for people with disabilities. What do you think that will 
do in terms of changing or affecting the rate at which we can 
build such homes?
    Ms. O'Hara.
    Ms. O'Hara. With the existing 811 appropriations, Senator, 
we could quadruple the number of units produced, just in the 
811 program, in the first year that the program is operational. 
So we could go from 1,000 units or less--this year, we actually 
only funded 930--to as many as 4,000 in the first year. It is a 
substantial increase without an increase in any funding.
    Chairman Menendez. Just for the purposes of the record, 
why?
    Ms. O'Hara. It is actually pretty simple, but I do not know 
why we did not think of it a long time ago.
    Chairman Menendez. I know the answer, but I want you to 
give it to me.
    Ms. O'Hara. We produce hundreds of thousands of units of 
rental housing every year that is affordable to people at 50 or 
60 percent of area median income, through the tax credit and 
home program. So what the demonstration program does in 811 is 
simply start from that point and say, what does it cost to take 
a unit that is already produced at 50 percent of median income 
and make it affordable to someone on SSI, the average income 
there being 18 percent of median?
    What has happened, for example, in North Carolina is that 
they have found that that cost of reducing that rent in a new 
unit, integrated in an affordable housing development, is less 
than $300 a unit a month. Now that would not necessarily be the 
cost in New York City, for example, where the cost would be 
somewhat higher. But I think the point is that the cost of the 
unit under the demonstration is much less than the cost of, for 
example, issuing a voucher.
    Then we are not putting any capital into that unit at all, 
under 811, because the capital is already being paid for with 
tax credits, home funds. The new National Housing Trust Fund is 
a perfect vehicle for this program as well.
    Chairman Menendez. Thank you.
    What benefits would the Project Rental Assistance Contract 
Demonstration Program created by the Section 811 Reform Bill 
have for people with disabilities? Anybody have a view on that?
    Ms. Crowley? Ms. O'Hara?
    Ms. Crowley. Well, I think that one of the intentions is to 
offer people with disabilities a wider range of choices of 
places to live and to have the opportunity to live in more 
integrated settings.
    As Mr. Jones described, the needs of people with 
disabilities, they are certainly not monolithic. There is a 
great range of abilities. There is a great range of different 
kinds of services that people require.
    If we limit ourselves to certain models and then try to get 
all disabled people to fit into our model, we will not succeed. 
So this offers alternative models that will be able to fit the 
wide range of people who are looking for housing.
    Chairman Menendez. Any other observations, Ms. O'Hara.
    Ms. O'Hara. I think that we have in 29 States right now 
grants called Money Follows the Person, which are designed to 
help people move out of restrictive settings such as nursing 
homes. One of the major barriers to people doing that, aside 
from the affordability, is also that people need accessible 
housing. They need housing with special features.
    Those units are produced every year in the tax credit 
program, but they rarely go to people who actually have 
mobility impairments or other special needs because the rents 
are too high. So, by taking the PRAC and applying it to those 
accessible units, we will see people who really need a unit 
with an accessible bathroom, an accessible kitchen, a visitable 
entrance. They will have much more access to those units that 
we are already producing but that we are not getting to the 
right people.
    Chairman Menendez. Let me ask you, with reference to the 
supportive services--and Mr. Jones's testimony I think was very 
elucidating on some of the challenges--how can we better 
integrate the social services that are so badly needed into the 
existing program so that parents of adult children with some 
form of disability or children of elderly parents can breathe a 
little easier? What are we looking at?
    Maybe there are models out there that are successful, if 
anyone wants to share any of those.
    Ms. O'Hara. Well, I could start by talking again about the 
bill. One of the things that happens now with the 811 program 
is that it is a very locally driven process, where a nonprofit 
gets the funds to build the housing, and there is very little 
connection to State policy in terms of who is going to live in 
those units.
    What the demonstration program does is connect the people 
who have the highest needs based on the States' Medicaid and 
mental health policies and requires that in order to get that 
funding the State must commit to making sure that those 
services are available.
    So I think by offering a model like that, we are basically 
creating a new mechanism, a better mechanism, to hold a State 
mental health system, a State developmental disability system, 
accountable for following those people on a permanent basis 
rather than just until they think that they are doing well in 
housing and then do not need the help anymore.
    Chairman Menendez. Mr. Halliday, did you want to? I am 
sorry, I thought I saw a your hand.
    Anyone else? Yes, Ms. Crowley.
    Ms. Crowley. Well, I think that there is a lot of talk 
about services in housing programs, and there is a great range 
in the depth and the quality of those programs.
    My own experience working at the community level is that 
the folks with the most serious problems need the most skilled 
service workers, the most skilled clinicians to assist them 
during that. Often, it is the case they end up with some of the 
least skilled people who are working with the very poorest 
folks. So part of what will make sure that those programs work 
as best as they can is the resources are there to be able to 
hire highly trained, experienced people to provide those 
services.
    You cannot do it on the cheap. So the more we can figure 
out how to integrate funding that will support that, the better 
those services will be.
    Chairman Menendez. Well, I hope the demonstration project, 
as you suggest, Ms. O'Hara, drives, incentivizes the State and 
also creates accountability from the State as well.
    Well, thank you all.
    With that, Senator Johanns.
    Senator Johanns. Thank you, Mr. Chairman. Again, thank you 
very much for putting together this very important hearing.
    In just listening to the witnesses, there are so many good 
things I hope that can come out of this hearing, and I thank 
you all for being here.
    Let me, if I might, explore a little bit of a different 
angle that I would like just some information on. I think, Ms. 
Crowley, you might be the best person to start with, but if 
there is anyone else that has knowledge in this area, jump 
right in.
    You talked about how our SSI recipients are some of the 
poorest people in our Nation, and I do not disagree with that a 
bit. What about the SSI program? Is there something about the 
SSI program, maybe is a better way of asking it, that literally 
causes people to be forever locked into that position?
    For example, if a recipient of SSI were on the program, 
could a family member financially help them? Could they help 
with rent or whatever? Are there income limits?
    I am not an expert here. Walk me through some of the 
challenges you face on SSI.
    Ms. Crowley. Well, I will do my best. It has been many 
years since I actively worked with people on SSI, and some 
folks may have a little bit more details, but in general, SSI 
is an income program. It is an income maintenance program for 
the people who have no other resources whatsoever. So the folks 
who are--the elderly people who are on SSI are people who never 
had covered employment under Social Security and so either they 
never worked or their work was so minimal that they don't get 
the entire Social Security benefit or any Social Security 
benefit. So that is for the elderly portion.
    For the people with disabilities who get SSI, they are 
people who have very severe disabilities. It is not easy to get 
SSI. My experience is that the SSI application process takes a 
long time. Almost everybody I ever worked with, you had to 
appeal it more than once in order to get that through. So there 
has to be a finding of very serious disability that inhibits 
your ability to earn income, i.e., that inhibits your ability 
to work.
    Because it is a means tested program, there are very--any 
income that you get, that income--there is a little bit of a 
disregard, I think it is a $65 disregard, but then if you earn 
income, your benefits are reduced by the same amount. There 
is--and actually, I don't know what the current rules are 
around what your parents can do to assist you, but it is not 
much. Maybe Michelle can answer that.
    Senator Johanns. Michelle, do you----
    Ms. Norris. Well, first of all, I just--one of the things I 
was kind of struck by is this discussion we keep having about 
the 811 and the 202 program. One of the realities is that as we 
talk about the aging population is the number of disabled aging 
that will also be coming into our future.
    Ms. Crowley. That is right.
    Ms. Norris. They will also double, as well. They are 
projected to double. So we are going to be looking at a lot of 
folks who are coming in through the SSI program going into 
elderly disabled. So this whole issue really is a blended thing 
that we should be looking at in collaboration.
    Ability to get help from family members is allowed, but 
there are certain rules, and I am not sure we have really gone 
through and digested all the technical things on that. You 
probably know a lot more than we do on that, so I will defer to 
you on some of the technical craziness that I am sure is out 
there.
    But in the end, there is also the reality that as these 
folks become the elder disabled, they may not have necessarily 
somebody local. A lot of times, we are finding the parents are 
behind, especially in Ohio, and their kids have gone off to 
more exciting places like California, Nebraska, perhaps.
    [Laughter.]
    Chairman Menendez. I would put Nebraska right at the top of 
that list, but that is a bias on my part.
    [Laughter.]
    Ms. Norris. But it is possible to help, but what we find is 
it is not that those families necessarily have a lot of 
resources of their own to help in augmenting what they need.
    Senator Johanns. Mr. Jones, do you have experience here?
    Mr. Jones. Yes, sir, I do. Medicaid is predicated on 
getting SSI, at least in New Jersey, and it is a $2,000 limit 
on any amount of money you can have at one time unless you are 
trying to purchase a car or something like that. Families can 
provide goods or services, but not money, because that adds to 
the means.
    In New Jersey, we have a workability program set up so that 
as you work and you pay down your SSI, you are still able to 
keep your Medicaid by paying your insurance. Thirty dollars, I 
think, is the maximum that you will ever have to pay. I don't 
think anybody has had to pay that yet. But you are allowed to 
work and make up to about $62,000 a year now and keep Medicaid 
for your insurance. That is the big thing. That is a good part 
of it.
    Senator Johanns. The reason I asked this line of 
questioning, Mr. Chairman, I am kind of looking ahead here. I 
think this makes so much sense that ultimately, we can get this 
done, the purpose of the hearing today. But as I was working on 
mental health reform as the Governor, and as I worked with 
consumers and they would talk me through what they were going 
through with SSI or disability or whatever, I must admit, it 
just seemed hopelessly complex. I don't know how anybody could 
get through the system. And you are right. They would tell me 
all the time, oh, you always get turned down the first go at 
it. You have got to be persistent to get SSI.
    But I am wondering if there is a point at which where we 
dive deep and ask ourselves, is this system serving disabled 
citizens the way it should, and I am going to guess that we 
will find a dozen other ways of improving this system in some 
ways where we don't add to the cost, where maybe there is a son 
or daughter who has the ability to help but literally is 
limited by the rules, or maybe there is a parent who wants to 
help, but again is limited by the rules.
    Therefore, instead of this family living in, or this person 
living in such terrible poverty, really, because you almost 
have to with SSI, is there something that we can do to improve 
that situation? Now, that is not going to work for everybody, I 
appreciate that, but I think it is worth a look.
    I mean, look at how much is going to happen here, and it is 
not because we are doubling or tripling the budget. We are just 
doing it better. I guess what I would like to think about, Mr. 
Chairman, is there a way to look at some of these arcane rules 
I think that are out there and is that a next step for us? 
Thank you.
    Chairman Menendez. Thank you very much. Good point.
    Senator Kohl.
    Senator Kohl. Thank you, Mr. Chairman.
    Ms. Crowley, what are the main challenges facing the 
Section 202 program as you see its existence today?
    Ms. Crowley. I think that the program has been around for 
some time and so many of the units are aging and need attention 
in terms of rehabilitation and those kinds of things so that 
they can be kept in good shape and be able to be used for the 
next generation. So a major challenge is the preservation of 
the existing units and this bill does a great deal to help with 
that.
    The bill also will streamline the process so that it may be 
easier to develop new units so that we can get more done with 
the money that we have.
    And the thing that is critical to look at is how to help 
people who are living in the housing remain in that housing and 
be able to live out their lives in a graceful and dignified 
manner and avoid the expense and the indignity of 
institutionalization. And so adding the ability to expand 
service coordination or incentivizing service coordination, 
having service workers who are there, I think is an important 
step, although I would repeat that it is absolutely critical 
that those be people with the level of skill needed to address 
the concerns of the clients that they have.
    Senator Kohl. How do you see S. 118 addressing some of 
these problems?
    Ms. Crowley. I am going to let my buddy next to me, Toby, 
answer that question, and only because I know that he can 
answer it better than I can because he is the developer, and 
that will be a better----
    Senator Kohl. Good. Go ahead, Toby.
    Mr. Halliday. Thank you. Well, as Sheila mentioned, I think 
the biggest challenges here are not just the way the program 
works from day to day, but there are many aging buildings. 
There are many aging residents of these buildings. Some of them 
moved in the day the buildings opened, 20, 30, 40 years ago. 
And there are aging owners, as well. Many of these nonprofit 
organizations that own these buildings were very committed and 
good at what they did when they got into this operation 20, 30, 
40 years ago, but the standards of property management have 
changed, best practices have changed. And, of course, the 
boards of these organizations have changed. The staff has 
changed. So not all of them are able to maintain the property 
in the condition that they themselves would like to.
    So some of the things that we are most excited about in S. 
118 are easing the ability to transfer some of these 
properties, easing the ability to refinance some of these 
properties and make badly needed improvements, not just to 
bring them up to date, keep them up to code, but to meet the 
changing needs of an elderly population that is itself aging in 
place and bring in new rental assistance.
    As I mentioned, in Wisconsin alone, there are nearly 5,000 
of these units that were built during a previous incarnation of 
the 202 program, where there was no rental assistance to the 
units when they were originally created: a large number in 
Wisconsin, but a huge number around the country of these units 
where either the current residents will face significant cost 
increases, and many of these residents obviously are not in a 
situation where they can absorb that. Or, the cost to make 
these is essential to make these improvements will cause the 
conversion of these properties to some other use, which would 
be equally terrible for not just current residents but future 
residents.
    So those are some of the things that we see as particularly 
helpful in S. 118.
    Senator Kohl. Thank you.
    Ms. Norris, just to go on with this line of questions, what 
is the current need in Section 202 for supportive services and 
how would S. 118 help provide supportive services for seniors?
    Ms. Norris. Well, gosh, I so much want to finish the rest 
of that question. I am so sorry you asked me this one. Can I 
put a plug in for the other one, though?
    Senator Kohl. Sure.
    Ms. Norris. The preservation, absolutely. There is--in the 
bill, I would say every issue that I say is one of these 
technical fixes, I have experience with our own organization 
buying or preserving or assuming somebody else's building that 
has been problematic and these fixes would have helped every 
one of those. So I can actually tell you, because we have 
preserved over 5,000 units in the last 5 years, that it really 
does--it will make a difference. So I do really agree with that 
part of the preservation piece of this bill.
    The supportive services side, HUD does have a great 
program, and I will refer to Jan Monks here, who is one of the 
leaders of a group called American Association for Service 
Coordinators, AASC, right, which is a service coordinator 
program that HUD has put in place and funded for years. It is a 
terrific program, a great first building block on housing to 
try to bring in services, coordinate services.
    This bill will also take and go one step further, which is 
with this assisted living conversion program, they are going to 
try to allow--it will allow us to not have a licensed building. 
In other words, you would be able to bring in--and instead of 
having to go through all the capital costs to convert something 
to a licensed building and all the extra operating costs to 
have 24/7 nurse aid, et cetera, it basically enhances the 
service delivery so you can tag in with what the States are 
trying to do. The States are already driving a lot of 
innovative ideas because they are the ones that are really 
getting forced into this because they can't afford the service 
programs anymore on Medicaid and Medicare.
    So this allows some of those flexibilities that will allow 
you to actually take the energy that the States are doing and 
make it work in these buildings that they can't get it to work 
in right now.
    Senator Kohl. Thank you. Thank you very much, Mr. Chairman.
    Chairman Menendez. Thank you, Senator Kohl.
    I just have one or two final questions, and you know, along 
the lines of what Senator Kohl was asking, it is obvious that 
it is, in a sense, cheaper to preserve housing that we have 
than to try to build new, although we want to build new ones. 
So the question is, is there something beyond what we do in 
both of these bills in the Section 811 and 202 that would 
enhance that? Is there anything we have missed here?
    I mean, I have heard some of you talk about the National 
Trust Fund and others. I understand that. But specifically, is 
there anything that we have missed that would enhance the 
possibility of preserving further existing housing for either 
seniors or disabled along the way that we should be thinking 
about, being certainly open? Mr. Halliday.
    Mr. Halliday. Well, let me just start by saying that there 
are a number of things that this Committee can do and some of 
the bills that some of the members of the panel have been 
advocating for have been mentioned earlier. But I would say 
that the existing project-based Section 8 program, the majority 
of people who live in those units are, of course, elderly and 
disabled. So strengthening the entire affordable housing 
program for low-income residents will help seniors, will help 
disabled residents, and we have been working closely with 
Senator Schumer, Senator Dodd, other Members, to try to move a 
bill that would enhance the ability of nonprofits and other 
mission-oriented organizations to preserve the whole range of 
assisted--of rental assisted properties, and also working with 
Chairman Frank on the House side. So we would urge this 
Committee's consideration of that legislation. So that would be 
one part of a more comprehensive solution.
    Chairman Menendez. Anybody else?
    Ms. O'Hara. Senator, this is a problem that we are just 
beginning to learn about, so what I know is anecdotal. But back 
in the early 1990s, when we started building 811s, we built 
quite large facilities in some parts of the country. I had a 
call the other day from someone in California who has a 
facility that is 20 units, and the State of California is now 
implementing policies where they want to see more community 
integration and less concentration of people and so there is a 
real catch-22 there around whether this 20-unit facility is 
actually going to be viable if the State changes its policies 
and doesn't want to see 20 people with the same disability 
placed in this facility.
    So I think we do need to look--we need perhaps to study 
some of these older 811 properties that may actually be, I call 
them white elephants, because they are very facility-oriented. 
They are very facility-based. Given the move to community 
integration, we may have a problem on our hands 5 or 10 years 
from now in having some properties that are not consistent with 
community integration policies.
    Chairman Menendez. Let me ask you one other question. With 
reference to the approach we take in the 811 reform bill, where 
we-keeping the funding with housing for people with serious 
disabilities versus diverting it to vouchers that may not be 
for people with serious disabilities, is that something that 
you view as the right policy?
    Ms. O'Hara. We strongly support using vouchers for people 
with disabilities. Some housing authorities around the country 
are doing an extraordinary job using their Housing Choice 
voucher programs to meet the needs of people with pretty 
serious disabilities, particularly people with mental 
illnesses, and we have to applaud that.
    I think where we have a problem is that not all housing 
authorities see that as their mission. So the voucher program 
is definitely a solution. It is not necessarily a solution for 
supportive housing in every community the way 811 might be, but 
I think we need to keep--we are not going to solve this problem 
by just using 811 resources. We are going to have to tap into 
vouchers and we are going to have to look at how housing 
authorities are deploying their resources.
    I just learned in a meeting yesterday that a housing 
authority in Maryland, that I won't name, only 5 percent of 
their tenants who are on the voucher program are on SSI, just 5 
percent, and we know that the need proportionately is much 
greater than that. So I think we need to do a better job of 
opening up the voucher program as well as improving the Section 
811 program.
    Chairman Menendez. Finally, is there anyone with any 
suggestions how we can simplify HUD's 450 pages of Section 811 
guidance rules and regulations? There has got to be a better 
way.
    Ms. Crowley. I can't answer that, but I am very confident 
that the team at HUD that we have there now, if they can do it, 
they will, because it is a really exceptional group of people 
who are running the agency these days.
    Chairman Menendez. I don't disagree with you. Sometimes, 
however, even institutional change, even with a new culture, 
takes time. Four-hundred-and-fifty pages is just beyond my 
comprehension of how we move and what we need in the days 
ahead.
    Well, thank you all for your testimony. It has been very 
helpful in developing where we want to go from here.
    The record will remain open for two additional days for any 
Members who have any questions that they may want to ask and 
did not have the opportunity to come to the hearing to do so. 
If you receive questions, we would ask you to answer them as 
expeditiously as possible.
    On behalf of all of us, thank you very much for your 
testimony.
    With that, the hearing is adjourned.
    [Whereupon, at 11:54 a.m., the hearing was adjourned.]
    [Prepared statements, responses to written questions, and 
additional material supplied for the record follow:]
PREPARED STATEMENT OF REPRESENTATIVE CHRISTOPHER MURPHY FROM THE STATE 
                             OF CONNECTICUT
    Chairman Menendez, Ranking Member Vitter, and Members of the 
Subcommittee, it's my pleasure to be before you today to speak to an 
issue of tremendous importance to elderly and disabled Americans.
    As the main House proponent of legislation to reauthorize HUD's 
Section 811 program, it is a pleasure to be here to add my voice to why 
action to modernize the program is so greatly needed. At the outset, 
let me thank Chairman Menendez for his efforts here in the Senate. I 
believe the legislation that we have both introduced to revitalize this 
important program will result in the production of hundreds of 
thousands more units of permanent supportive housing across the Nation 
and will ensure that America's very low-income disabled population will 
have safe and affordable places to live.
    As the experts on the next panel will tell you, HUD's 811 program 
is not currently doing enough to meet the enormous demand. There are 
approximately 1.3 million nonelderly disabled households with what HUD 
defines as ``worst case needs''--meaning they are very low income, pay 
more than 50 percent of their income in rent and they live in 
substandard housing. While the need is obviously great, only a trickle 
of affordable units come on line each year and as we heard in testimony 
before the House Financial Services Committee, even a small supportive 
housing project can take up to 8 years to complete.
    By all accounts, the program is overly bureaucratic and has not 
been adapted to compliment the good, innovative work of hundreds of 
organizations across the country that are trying desperately to provide 
quality, permanent supportive housing to combat the unrelenting housing 
crisis faced by millions of extremely low-income individuals with 
disabilities.
    My home State of Connecticut offers a good example of how 
improvements to the program will complement the work already being done 
by State Governments and housing advocacy organizations. In Connecticut 
these partnerships have led to a commitment to create 10,000 units of 
permanent supportive housing over the next 10 years. By using the Low 
Income Housing Tax Credit with a State provided set-aside for rental 
assistance, we have been able to secure permanent supportive housing 
for disabled, severely low-income Connecticut residents. This same 
financing mechanism has been used in States like North Carolina and 
Louisiana to tremendous results.
    This approach, a public-private partnership leveraging existing tax 
credits for expanded use, is included, on a national scale, in both the 
Chairman's legislation, S. 1481, the Frank Melville Supportive Housing 
Investment Act, and my legislation, H.R. 1675 which passed the House in 
July.
    This approach, Mr. Chairman, of public-private partnerships, will 
derive more units of permanent supportive housing using the same 
funding we use today--more bang for our buck. Currently, the average 
capital cost of an 811 project is about $100,000 per unit plus a 
monthly rental payment equal to about $6,000 a year. Under our 
legislation, the capital investment is wiped out because the units are 
being built through existing credits and programs and because they are 
already affordable units, the rent subsidy will be less than the $6,000 
a year average.
    As you know, Mr. Chairman, we fund this change by using the funds 
currently set aside for 811 Mainstream Vouchers. HUD has done a less 
than adequate job in ensuring these vouchers are used to support people 
with disabilities--they don't monitor or track them--and while there is 
a great need for Mainstream Vouchers generally, these funds would be 
better used to ensure that 811 eligible individuals have access to 
permanent supportive housing.
    Beyond this change, Mr. Chairman, the legislation also allows 
States and State housing agencies to do much of the bureaucratic 
paperwork involved in these applications, which will greatly expedite 
the applications process. These are but a few, I believe, of the 
refinements outlined in the two bills that will make the 811 program 
more efficient and less bureaucratic using Federal dollars in a way 
that produces truly produces permanent supportive housing.
    Mr. Chairman, I know you will hear from the next panel, what we 
heard across the Capital last year and earlier this year. The Section 
811 program is worth preserving but must be reformed if we hope to meet 
its overwhelming demand.
    Thank you Mr. Chairman for your generous allotment of time and I am 
happy to any questions your or the other Members of the Committee may 
have.
                                 ______
                                 
                    PREPARED STATEMENT OF ANN O'HARA
Housing Advisor, Consortium for Citizens with Disabilities Housing Task 
                                 Force
                            October 29, 2009
Introduction
    My name is Ann O'Hara and I am the Associate Director of the 
Technical Assistance Collaborative (TAC), a national nonprofit 
organization whose mission is to advance evidenced based and promising 
policies and practices in affordable housing and community based 
supportive services for people with the most significant and long-term 
disabilities. On behalf of TAC and the Consortium for Citizens with 
Disabilities (CCD), I am pleased to provide testimony on S. 1481--the 
Frank Melville Supportive Housing Investment Act of 2009--which will 
enact important new policies and reforms to U.S. Department of Housing 
and Urban Development (HUD) Section 811 Supportive Housing for Persons 
with Disabilities program (Section 811).
    The Consortium for Citizens with Disabilities (CCD) is a coalition 
of national disability organizations working together to advocate for 
national public policy that ensures the self determination, 
independence, empowerment, integration and inclusion of children and 
adults with disabilities in all aspects of society. The CCD has 
established a Housing Task Force to focus on the housing needs of 
people with disabilities, including those with very low incomes--the 
group with the highest incidence of ``worst case'' housing needs in the 
United States. Among the organizations in the CCD Housing Task Force 
are the National Alliance on Mental Illness, The Arc of the United 
States, United Cerebral Palsy, Lutheran Services in America, the 
American Network of Community Options and Resources (ANCOR), the 
National Disability Rights Network, The Bazelon Center for Mental 
Health Law, United Spinal Association, United Jewish Communities, and 
the American Association of People with Disabilities.
    TAC and the CCD Housing Task Force would like to thank the 
Subcommittee for your leadership on critical affordable housing issues 
over the past year, including legislation that protects renters in 
foreclosure, the new Homeless Prevention Rapid Re-Housing Program 
included in ARRA, and the HEARTH Act. In addition to S. 1481, we urge 
the Congress to provide $1 billion in funding for the National Housing 
Trust Fund as proposed by Senator Reed in S 1731, and recommend passage 
of the Section 8 Reform Act (SEVRA). Both these programs are also 
vitally important to people with disabilities with very low incomes.
Section 811 Reforms Essential
    The Section 811 program is the only HUD program solely dedicated to 
creating permanent, affordable, and accessible housing linked with 
voluntary community-based services and supports that people with most 
significant and long term disabilities want and need in order to live 
as independently as possible in the community. The CCD Housing Task 
Force strongly supports S. 1481--legislation that is essential to 
revitalize and improve the Section 811 program. This innovative 
legislation can expand the creation of new Section 811 units by 300-400 
percent per year without any increase in Section 811 appropriations.
    Unfortunately, despite the fact that Section 811 has historically 
been an important Federal resource to help people with disabilities 
achieve the goal of community integration, the program has many 
problems and now produces less than 1,000 new units each year. The 
program is inefficient, plagued with bureaucratic ``red tape,'' and 
rarely leverages financing from other Federal and State affordable 
housing programs. Most importantly, the housing produced by Section 811 
during recent years often does not reflect the housing needs and 
housing preferences of many people with disabilities. This 
legislation--which will inaugurate a new era in the Section 811 
program--is extremely important for the disability community because 
its enactment will signal a renewed Federal commitment to address the 
enormous and unrelenting housing crisis faced by millions of extremely 
low income people with disabilities. This crisis is documented in the 
TAC/CCD Housing Task Force biannual Priced Out study, which compares 
HUD Fair Market Rents for modest rental housing to the income of 
nonelderly adults with disabilities who rely on Federal Supplemental 
Security Income (SSI) for all their basic needs.
Disability Income and Housing Affordability
    Priced Out in 2008 \1\ documents that the national average income 
of an individual receiving SSI was only $668 per month ($8,016 per 
year)--equal to only 18 percent of Median Income for a single person 
household. The average monthly one-bedroom HUD Fair Market rent in 2008 
was $749--which is 112 percent of the entire monthly income of a single 
individual receiving SSI. HUD's studio/efficient unit Fair Market rent 
in 2008 was $663--only $5 less than an individual's SSI payment. In 
2008, one bedroom Fair Market Rents ranged from a high of 198 percent 
of SSI in Hawaii to 70 percent of SSI in North Dakota--the most 
affordable State.
---------------------------------------------------------------------------
     \1\ Priced Out in 2008. Technical Assistance Collaborative Inc. 
and Consortium for Citizens with Disabilities Housing Task Force. April 
2009.
---------------------------------------------------------------------------
    Over 4.2 million nonelderly adults relied on Federal SSI in 2008. 
Unfortunately, recent HUD Worst Case Needs reports to Congress--which 
assesses the needs of very low income renters--used a flawed 
methodology which undercounted the needs of people with disabilities. 
\2\ TAC/CCD responded by doing its own study authored by Katherine 
Nelson, a highly respected former HUD researcher who developed HUD's 
Worst Case needs reports until 2003. Our study \3\ found that between 
1.3 and 1.4 million very low income nonelderly disabled households 
without children were paying more than 50 percent of their income 
towards housing costs. \4\ These simple statistics begin to illustrate 
the housing crisis which confronts people with disabilities in every 
State in the Nation.
---------------------------------------------------------------------------
     \2\ HUD Policy Development and Research officials concur that 
their methodology understates the housing needs of people with 
disabilities.
     \3\ The Hidden Housing Crisis: Worst Case Housing Needs of People 
With Disabilities.
     \4\ The CCD study used data from two sources in its study. The 
first source, the Annual Housing Survey (AHS) is the data source which 
HUD has used for many years to estimate Worst Case needs. The CCD study 
also took advantage of more accurate and detailed data now available 
from the American Community Survey. HUD has not yet taken advantage of 
the American Community Survey data to produce Worst Case estimates. As 
a result, HUD did not accept the CCD study's estimates. However, HUD 
did agree that their initial estimates regarding people with 
disabilities were flawed. HUD recently released a new--and much higher 
estimate--on their Web site.
---------------------------------------------------------------------------
Critical Permanent Supportive Housing Needs
    Unfortunately, this crisis is further illuminated through data on 
the number of people with disabilities living in restrictive settings 
including public institutions, nursing homes, and segregated Adult Care 
facilities as well as adults with disabilities who remain at home with 
aging parents. Because these individuals are not considered renters 
they are typically not counted in any Federal estimates of Worst Case 
housing needs. They do, however, provide the most compelling evidence 
of the critical need for a robust and reinvigorated Section 811 
program:

    In 2007, there were 412,324 nonelderly disabled adults 
        between the ages of 31-64 residing in Medicaid-funded 
        institutions. An additional 16,000 were age 30 or under; \5\
---------------------------------------------------------------------------
     \5\ Nursing Home Data Compendium complied in 2008 for the Center 
for Medicare and Medicaid Services by Thompson/Medstat.

    As the outcome of recent Olmstead litigation, the State of 
        New Jersey is required to 1,065 new units of permanent 
        supportive housing in the community during the next 5 years for 
        people with mental illness who are institutionalized or at-risk 
        of institutionalization. New Jersey also has 2,300 individuals 
        with developmental disabilities living in State facilities 
        waiting to move into the community; \6\
---------------------------------------------------------------------------
     \6\ The Arc of New Jersey and the Bazelon Center for Mental Health 
Law.

    The State of Illinois has an estimated 12,000 people with 
        mental illness currently living in expensive nursing home beds 
        primarily because there is no permanent supportive housing 
        available in the community; \7\
---------------------------------------------------------------------------
     \7\ Study: Supportive Housing Saves Illinois Tax Dollars by Carla 
Johnson, Associated Press.

    The State of North Carolina has more than 5,000 adults with 
        disabilities living in restrictive Adult Care Homes rather than 
        in integrated supportive housing in the community; \8\
---------------------------------------------------------------------------
     \8\ Unpublished Study of North Carolina's Adult Care Homes.

    In August of 2009, a Federal judge in New York ruled that 
        4,300 adults with serious mental illness in New York City were 
        living unnecessarily in expensive and segregated Adult Care 
        Homes that were even more restrictive and institutional than 
        psychiatric hospitals; \9\
---------------------------------------------------------------------------
     \9\ Bazelon Center for Mental Health Law.

    The City and County of San Francisco are under a court 
        order to create 500 new units of permanent supportive housing 
        to replace the ``beds'' in the Government-owned Laguna Honda 
---------------------------------------------------------------------------
        nursing home;

    The State of Alabama currently spends more than $900 
        million on high cost institutional long-term care (71 percent 
        of its total long-term care expenditures), which could be 
        significantly reduced if more permanent supportive housing 
        units were created.

    In 2004, there were 711,000 people with intellectual or 
        developmental disabilities living with aging parents/caregivers 
        (one of whom is over 65). \10\ This data included 22,734 
        individuals in New Jersey and 10,110 people in Louisiana.
---------------------------------------------------------------------------
     \10\ The State of the States in Developmental Disabilities--2005. 
David Braddock, Richard Hemp and Mary C. Rizzolo, et al. Coleman 
Institute for Cognitive Disabilities, University of Colorado.

    Ten years ago, the U.S. Supreme Court handed down its landmark 
Olmstead decision affirming the civil rights of persons with the most 
serious and long-term disabilities to live in the most integrated 
setting possible that meets their needs. Across the United States 
today, people with disabilities and their families and advocates, as 
well as State human services agencies, and community-based service 
providers are struggling--unsuccessfully--to create the permanent 
supportive housing envisioned by the Olmstead decision. The sole 
purpose of the Section 811 program is to create this kind of housing--
deeply affordable and accessible permanent rental housing linked with 
community-based services and supports that people with disabilities 
want. It is the only Federal program authorized to achieve this 
critically important Federal housing policy objective. That is why 
there is such an urgent need to enact S. 1481.
Section 811 Is Cost Effective
    Permanent supportive housing created through Section 811 is 
extremely cost effective. It has been well documented in numerous 
studies that people living in permanent supportive housing cost the 
Government less than institutional care or other inappropriate 
settings. For example:

    A recent study published in the Journal of Health and 
        Social Policy found that the average total public expenditure 
        for a person with a significant and long term disability 
        receiving Medicaid Home and Community Based Services waiver 
        services (who must meet the eligibility criteria for 
        institutionalization) was about $44,000 less per year than for 
        a person receiving institutional services; \11\
---------------------------------------------------------------------------
     \11\ M. Kitchener, et al., ``Institutional and Community-Based 
Long-Term Care: A Comparative Estimate of Public Costs'' Journal of 
Health and Social Policy, 22, no. 2 (2006): 31-50.

    A 2009 cost study of 96 people with serious and persistent 
        mental illness living in various Section 811-properties in 
        Columbus Ohio found that the cost of providing mental health 
        services to individuals living in Section 811 housing was 40 
        percent less than the cost of services \12\ for those same 
        individuals during the year just prior to moving in ($13,942 
        one year prior to Section 811 housing vs. $8,039 during the 
        first year living in Section 811 housing). These costs--and 
        cost savings--were virtually identical to savings achieved for 
        157 homeless individuals with mental illness in Columbus who 
        received housing through the HUD McKinney-Vento Shelter Plus 
        Care program; \13\
---------------------------------------------------------------------------
     \12\ Mental health services, alcohol and drug services and the 
costs of in-patient hospitalization.
     \13\ Susan Weaver, Executive Director, Community Housing Network, 
Columbus, Ohio.

    A cost study of people with severe mobility impairments who 
        moved from a nursing home to a new Section 811 project in 
        Allentown, PA, in 2004 found that the cost of Medicaid services 
        per individual was reduced from $70,000 to only $28,000 per 
        year. \14\
---------------------------------------------------------------------------
     \14\ Center for Outcome Analysis, 2004.

    A recent supportive housing study in Illinois published by 
        the Associated Press found that supportive housing provided 
        through programs such as Section 811 saved Illinois taxpayers 
        nearly $2,500 for each resident served. This study included 10 
        nonelderly adults with mental illness who lived in nursing 
---------------------------------------------------------------------------
        homes as well as people with mental illness who were homeless.

    Current Federal, State, and local efforts to achieve the promise of 
community integration envisioned in the Americans with Disabilities Act 
are stalled because of the critical shortage of affordable and 
accessible supportive housing. Important Medicaid reforms to expand 
self-directed services, promote rehabilitation and recovery for people 
with disabilities, and control facility-based Medicaid long-term care 
costs (almost $60 billion for institutional care in 2007) \15\ cannot 
succeed unless programs such as Section 811 are revitalized and 
reformed to respond to this important Federal and State policy 
priority.
---------------------------------------------------------------------------
     \15\ Source: CMS 64 data, Center for Medicaid and State 
Operations, Division of Financial Operations, September 26, 2008.
---------------------------------------------------------------------------
Summary of S. 1481
    S. 1481 will ``fast-track'' and create a sustainable ``pipeline'' 
of thousands of new permanent supportive housing units every year 
through the following new Section 811 policies:
1. Authorizing a new and innovative Section 811 Project Rental 
        Assistance Contract (PRAC) Demonstration Program
    This policy is designed to include integrated supportive housing 
units within rental housing complexes financed with Federal Low Income 
Housing Tax Credit (LIHTC), HOME, or other capital programs. Successful 
models of this approach have been implemented in the States of North 
Carolina (more than 2,000 units created) and Louisiana (more than 700 
units committed). Through this integrated development model, the 
typical property has between 5-10 percent of the units set-aside as 
permanent supportive housing. These results can be replicated 
nationally through a new Section 811 PRAC Demonstration program which 
will provide the essential rental subsidy needed to reduce rents to 
SSI-affordability levels for a small percentage (up to 25 percent of 
the total) of units in new or rehabilitated affordable rental housing 
developments. Several other States have already expressed serious 
interest in this innovative and integrated model. This policy will help 
ensure that a significant percentage of the hundreds of thousands units 
routinely created every year through the LIHTC and HOME programs are 
dedicated to providing supportive housing for people most in need of 
housing assistance. S. 1481 provides that PRAC Demonstration funding be 
linked with Medicaid and other State supportive services policies/
funding streams to ensure the availability of supportive services for 
Section 811 tenants.
2. Reforming the existing Section 811 Capital Advance/PRAC program
    These reforms will help leverage other capital funding for Section 
811 production and reduce barriers to ``mixed-finance'' Section 811 
projects created through mission-driven nonprofit developers. These 
reforms will also increase the number of units created each year 
through the current 811 production program and will help nonprofit 
Section 811 sponsors to create integrated housing properties that 
include units for people with disabilities as well as units for other 
households that need affordable housing. For example, nonprofit 
organizations creating new affordable rental housing developments would 
be able to use Section 811 Capital and PRAC funding to create a set-
aside of supportive housing units in a property financed with HOME or 
National Housing Trust Fund resources.
3. Shifting fiscal responsibility for the Section 811-funded Mainstream 
        Housing Choice Voucher program to the Section 8 budget
    The Mainstream Voucher program converts precious Section 811 
appropriation funding into Section 8 Housing Choice Voucher funding 
which HUD provides primarily to Public Housing Agencies (PHAs). These 
811 funds pay for approximately 14,000 Section 8 Housing Choice 
Vouchers that may--or may not--be assisting people with disabilities. 
This ill-conceived approach initiated by HUD in 1997 has been a failed 
policy since its inception. Although funded and renewed from 811 
appropriations, these Mainstream Housing Choice Vouchers have almost 
never been used to create new permanent supportive housing units, are 
not targeted to people with the most serious and long-term 
disabilities, and--because of poor HUD oversight and monitoring--may be 
assisting nondisabled households. These vouchers now cost over $85 
million every year--more than one-third of the entire Section 811 
appropriation. While the Mainstream Voucher program certainly helped 
thousands of very low income people with disabilities obtain decent and 
affordable housing, we must emphasize that this program did not 
accomplish anything that the Section 8 Housing Choice Voucher cannot 
do. It is clear that there is only one good solution to fix this 
troubled program. S. 1481 will enact policies that will: (1) continue 
to permanently set-aside these rental subsidies for people with 
disabilities as Congress intended; and (2) authorize that these 
vouchers be permanently funded through the Housing Choice Voucher 
program.
4. Streamlining Section 811 processing requirements and removing out-
        dated regulatory barriers.
    The Section 811 statute has remained virtually unchanged for the 
past 16 years--and the bureaucracy that surrounds the program reflects 
the ``staff intensive'' way that HUD did business many years ago. The 
program has an excessive amount of bureaucratic ``red tape'' and 
processing requirements which have created multiyear delays in project 
development. Currently, Section 811 units cannot be combined with other 
affordable rental housing development, a barrier which has suppressed 
program innovation and fostered segregated rather than integrated 
housing opportunities. It is extremely important that when S. 1481 is 
enacted, Congress send a powerful message to HUD that the 450+ pages of 
Section 811 guidance, rules, and regulations be completely replaced by 
a reasonable set of regulations and policies that promote more 
efficient and effective housing development practices.
Conclusion
    The CCD is confident that this new legislation will work. At least 
8-10 State Housing Agencies have already expressed interest in the PRAC 
Demonstration program model. Nonprofits that have worked with the 
Section 811 program for years have also expressed their support for the 
improvements that S. 1481 includes. In fact, most existing Section 811 
program sponsors have declined to apply for new Section 811 projects in 
recent years--not because the housing is not needed but because the 
program is so difficult to work with. In the last few Section 811 
competitions HUD has received less than 150 Section 811 applications 
per year--a fraction of the demand 10 years ago.
    Time is running out on the Section 811 program while the need to 
create new permanent supportive housing units has never been greater. 
In FY2008, only 930 new Section 811 units were awarded and without this 
legislation, that number of new units could soon fall below that level. 
Enacting S. 1481 is also critical because the basic Section 811 model--
which for 30+ years has produced small group homes and single 
population independently living facilities--no longer responds to the 
housing needs and choices of most people with disabilities who prefer 
to live in housing that is truly integrated within local communities.
    By enacting S. 1481, Congress can ensure that a reinvigorated 
Section 811 program is ready to create as many as 3,000 or more new 
permanent supportive housing units every year--without any increase in 
current appropriations levels. The removal of many bureaucratic 
barriers which cause protracted delays in the Section 811 development 
process will also produce these new units more efficiently. Shifting 
renewal costs associated with the seriously flawed 811-funded 
Mainstream Housing Choice Voucher program--which has drained funding 
away from essential permanent supportive housing production since 
1997--is also long-overdue.
    Finally, enacting S. 1481 is important because it honors a very 
humble man--Frank Melville--who was the first Chair of the Melville 
Charitable Trust and whose commitment to people with disabilities and 
people who are homeless led to the creation of more than 100,000 units 
of affordable housing for people with disabilities. It is only fitting 
that the next 100,000 units produced should be financed by legislation 
that bears his name. TAC and the CCD Housing Task Force look forward to 
working with Congress and with Section 811 stakeholders across the 
Nation to ensure that this essential and critically needed legislation 
is enacted as soon as possible.
                                 ______
                                 
                 PREPARED STATEMENT OF MICHELLE NORRIS
   Senior Vice President for Development and Acquisition of National 
   Church Residences, on behalf of American Association of Homes and 
                         Services for the Aging
                            October 29, 2009
Introduction
    Good morning Chairman Menendez, Ranking Member Vitter, Senator 
Kohl, and Members of the Committee. My name is Michelle Norris and I am 
pleased to be here today, representing the American Association of 
Homes and Services for the Aging. The members of the American 
Association of Homes and Services for the Aging (www.aahsa.org) serve 
as many as 2 million people every day through mission-driven, not-for-
profit organizations dedicated to providing the services people need, 
when they need them, in the place they call home. Our 5,700 members 
offer the continuum of aging services: adult day services, home health, 
community services, senior housing, assisted living residences, 
continuing care retirement communities, and nursing homes. AAHSA's 
commitment is to create the future of aging services through quality 
people can trust.
    I am also the Senior Vice-President for Development and 
Acquisitions of National Church Residences (NCR). National Church 
Residences, a Columbus, Ohio-based nonprofit organization, was founded 
in 1961 and is one of the largest developers of affordable senior 
housing in the United States. NCR is also a founding member of Stewards 
of Affordable Housing for the Future (SAHF), an organization comprised 
of nine national nonprofit housing providers, seven of which are 
members of AAHSA as well, dedicated to the preservation of existing 
affordable housing communities. NCR owns and/or manages over 20,000 
affordable senior and family housing units in 300 properties in 27 
States and Puerto Rico. Our portfolio is diverse in the financing 
programs we use and the populations we serve, including supportive 
housing for the homeless, assisted living communities, and five health 
care facilities in Ohio. NCR continues to be an active developer doing 
both new construction and preservation of affordable housing. A 
significant majority of NCR's portfolio Section 202s including many 
located in States represented by the Members of this Committee and the 
Senators who have cosponsored S. 118.
    On behalf of AAHSA, NCR, my staff and the residents and families we 
serve, I would like to thank you for holding a hearing on this 
important issue. I especially would like to thank Senator Kohl and 
Senator Schumer for introducing S. 118 on the first day of this 
Congress. This legislation is sorely needed if affordable senior 
housing is to survive into the future.
Overview of Elderly Housing Crisis
    It should come as no surprise that there is an affordable housing 
crisis in our country. This problem is particularly acute among the 
elderly living on low or moderate incomes. In 2006, AARP released an 
update of its Section 202 study and found that, on average, there were 
ten seniors waiting for each Section 202 unit that became available. 
Generally stated, the major contributing factors to the elderly housing 
crisis are the unnecessary loss of federally subsidized housing units, 
the lack of significant affordable housing production of new units, an 
elderly population boom, a national policy that has favored vouchers 
instead of production as the solution to the affordable housing crisis, 
escalating rental costs, and a lack of predictability for social 
services funding. In addition to these factors, our Nation's seniors 
have not been immune to the recession and to the subprime and predatory 
lending rehabilitation scams.
    Despite the estimates of the Congressionally mandated Commission on 
Affordable Housing and Health Facility Needs for Seniors in the 21st 
Century that we will need an additional 730,000 units of assisted 
housing in 2020, the Section 202 program has been level funded, 
building fewer and fewer units each year. For the past several years 
AAHSA has urged Congress to provide enough funding for the Section 202 
program to develop at least 10,000 units per year. In the FY09 NOFA, 
HUD has announced funding for only 3,130 new units. The NOFA includes 
as well the authority to delegate the processing of mixed finance 
transactions to State housing finance agencies for the first time. The 
delegation, pursuant to the authority provided in last year's Housing 
and Economic Recovery Act, along with HUD's welcome efforts to make it 
easier to combine HUD's programs with the low income housing tax credit 
program, may make it possible to build additional senior housing units 
in combination with the 202 units.
    For fiscal year 2010, Congress finally is poised to provide an 
increase in funding for the Section 202 program and for that we thank 
you. However, even with a more generous funding of the 202 new 
construction program, the Joint Center on Housing indicates that we 
have lost two units of affordable housing for each one that we've 
built. These units are being converted to market rate, or demolished to 
free the property for other uses. We are still losing ground.
    You have asked me to address the positives and negatives of the 
Section 202 program and what the Congress can do to build on the 
strengths and correct the weaknesses. Simply put, the Section 202 
program is the most successful Federal housing production program 
enacted by the Congress. It has stood the test time--now 50 years--and 
has offered opportunities for not for profits to carry out their 
missions to provide affordable supportive housing for the Nation's most 
vulnerable seniors.
    S. 118 provides an opportunity for the Congress to build on the 
program's successes and strengths so that housing providers can develop 
financially sound developments and preserve existing properties that 
the Federal Government has spent billions of dollars constructing over 
a 40-year period. It is unlikely that we will address the affordable 
housing crisis through significant funding increases given the severe 
constraints that the Federal Government is under. What we can do is to 
address the opportunities and obligations that we see before us by 
increasing the efficiency and effectiveness of the current 202 new 
construction program, plus aggressively preserving the existing housing 
stock. The AAHSA membership and the NCR leadership team are pleased 
with the provisions of S. 118 which streamline and improve the new 
development program, encourage the refinancing and preservation of the 
202 program and place a renewed emphasis on providing supportive 
services in 202 housing so that seniors can age in place. Please allow 
me to use the rest of this testimony to highlight some of the very 
specific improvements that are created by S. 118 first in new 
construction, then in preservation and finally in various other means 
including increased service provision.
Title I--New Development
Realistic Development Cost Limits
    A 2005 HUD report on construction costs indices for Section 202 and 
811 housing included an overall finding that the factors and approach 
that HUD uses for establishing development cost limits ``do not 
accurately reflect current actual development costs'' for the surveyed 
projects or for the typical private funded construction. HUD itself had 
commissioned the report because they suspected the inadequacy, and 
unreasonableness, of their cost limits. As a result of the study, the 
limits have been raised--but they are still not sufficient to meet 
costs in most areas. In the case of NCR, I can tell you that the 
current development cost limits frequently do not work and are often 
irrelevant compared to the market place. Even with the increased 
limits, sponsors are still forced to seek additional funding, which 
significantly lengthens the total development timeframes. As a last 
resort, we have had to seek amendment funding from HUD which causes 
penalty points on subsequent grant requests in future NOFA rounds. It's 
a catch 22 which ends up denying funding to experienced sponsors who 
have been unable to find gap financing. Several of the provisions of S. 
118 address this capital funding process and amounts.
Adequate PRAC Allocations
    In addition to shortfalls in the capital amounts, the initial 
operating budget for a new building is also based on a HUD formula to 
create the initial rental subsidy amount. These initial Project Rental 
Assistance (PRAC) allocations for new development are chronically under 
funded, leaving developers to limit the scope of the project's services 
or staffing. Because the new Section 202 PRAC properties are not 
eligible for the rent increases in the first year, the operating 
deficit can be devastating to the properties. I commend HUD for 
recently revising their policy to now permit PRAC increases for 
projects before projects open. This has helped alleviate the 
operational funding problems in many new projects, but not all. One 
significant place where inadequate initial PRAC funding has had the 
most detrimental impact is on the ability of projects to fund a service 
coordinator. In order to be competitive, providers have not included a 
service coordinator in their application for fear that the PRAC amounts 
would be too high and noncompetitive. Projects are always trying to 
catch up through rent increases in the future but success is case by 
case and unpredictable at best. We are pleased that Section 101 of the 
bill requires HUD to approve PRAC increases sufficient to cover 
reasonable project cost increases including service coordinators and 
supportive services costs. It also provides for increases to cover 
emergencies such as energy, insurance or tax increases that are out of 
the control of the sponsor.
Service Coordination
    In addition to providing sufficient PRAC to cover service 
coordination, S. 118 will establish nonmonetary incentives for 
employing a service coordinator. The 202 program is called the 
``Supportive Housing Program for the Elderly'', but the selection 
criteria have never included the extent to which the applicant ensures 
that there will be a service coordinator for the property. Section 102 
of S. 118 will add service coordination as a selection criterion. NCR 
believes each property should have a service coordinator so that the 
seniors can learn about and link to community based supportive services 
which will assist seniors to remain independent for as long as possible 
and to age in place.
Proper Use of Owner Deposits
    Under the current Section 202 statute, the owner is required to 
establish an escrow account for new projects to be held for 
unanticipated operating short falls during the first 3 years. HUD has 
implemented an unwritten policy to require nonprofit owners to use this 
deposit virtually in every instance to cover both operating and 
development short falls caused by the originally under funded capital 
advance and PRAC amounts. Organizations such as NCR rely on the return 
of some or all of those deposits to meet other housing mission needs, 
including overhead for staff and preliminary work to develop new 
projects and increase our supportive services component in existing 
properties. However, the deposits are rarely returned because HUD 
considers them part of the project from the start. S. 118 tackles this 
problem head on in Section 104.
Flexibility To Work With Local Boards
    Many of you may be familiar with Plymouth Congregational Church 
here in Washington, DC. This is an active, vibrant church at North 
Capitol and Riggs Road in Northeast. Retirement Housing Foundation 
(RHF), a national nonprofit based in California, worked closely with 
Reverend Hagler and his congregation to get this project built. I urge 
you to visit this property and talk to those involved about the 
importance of partnership and the role of development experts to help a 
community realize its dream of taking on a new mission to serve low-
income seniors live in safe, decent housing with dignity. Because of 
the need for active community partnerships such as this to support the 
property and residents, AAHSA members are committed to continuing the 
involvement of local boards, on an advisory or governing level.
    Unfortunately, experience has shown that often local board members 
tend to be very active at the beginning of a project and often include 
many of the individuals and local politicians that were instrumental in 
getting a project approved. The simple fact is that over time it is 
difficult to maintain an active local board involved in the major 
decisions. Many national nonprofits in AAHSA's membership have to 
retain a high degree of control over these small owner boards to make 
certain that they remain consistent with the terms laid out in the by-
laws and execute the necessary business of the property. This is not to 
say that we no longer want to work with local communities--this is 
vital to our success and an integral part of our mission. S. 118 allows 
a degree of flexibility for larger organizations that have difficulty 
maintaining active board participation in some areas.
Title II--Preservation
    Title II of S. 118 will further the preservation of senior housing, 
one of the most important Federal housing policies Congress can endorse 
and facilitate. Preservation of existing housing can be done at a 
fraction of costs of new construction and it helps retain the best HUD 
properties in prime locations with access to transportation and 
services. We are encouraged that the current Administration is focused 
and committed to a national policy of preservation. Secretary Donovan 
stated at a June hearing on preservation before the House Financial 
Services Committee that ``HUD needs to be a leader and a partner in 
preserving critical housing resources. Too often it seems that HUD 
policies and practices get in the way of preservation efforts instead 
of supporting them. That is going to change.'' S. 118 will equip HUD 
with many new tools and clear authority to preserve affordable senior 
housing.
    It is a fact that many elderly housing facilities have ``aged'' and 
need modernization and/or retrofitting and refinancing in order to 
accommodate supportive services to aging residents, assure quality of 
life, and accessibility. These projects could be preserved for an 
additional 30 years with the infusion of private dollars far less than 
the cost of new construction. In addition, if these facilities are 
allowed to disappear, it is unlikely that many communities will support 
large scale affordable housing of the size that currently exists in the 
Section 202 portfolio. We estimate that new construction costs in our 
202 portfolio are approximately $100,000 per unit, yet NCR's 
preservation projects only need $45,000 per unit in renovation. When we 
acquire a property and rehab that property, the total cost of 
preservation instead of allowing an owner to ``opt out,'' the total 
preservation cost can be approximately $70,000 compared to $100,000 per 
unit for new construction.
    The provisions in Title II of S. 118 are essential to the 
successful preservation of existing housing. To many, these changes 
appear very detailed and technical. Yet I can assure you that each of 
these can be critical to the success (or failure) of real preservation 
efforts. The changes will go a long way towards navigating the various 
legal and regulatory requirements involved in today's preservation 
transactions. However, many of the provisions simply require HUD to do 
what it already has the discretion to do, but haven't in the past. That 
may change but providing legislative authority guarantees that the 
policies will survive any change in Administrations. In the end, even 
the best of tools won't produce large scale preservation results. 
However, this bill will definitely equip and encourage HUD to take the 
active leadership that it must take in order to make preserve the 
Nation's irreplaceable senior housing stock.
Use of Unexpended Amounts To Provide Equity
    Christian Church Homes of Northern California, another AAHSA 
member, has attempted to purchase troubled 202 and 236 properties from 
other not-for-profit, single asset owners that were no longer 
interested in pursuing affordable housing. HUD denied their requests to 
purchase the properties at a price above the outstanding indebtedness, 
thus denying the selling not-for-profit any equity, which they planned 
to use to further their mission. I can personally confirm that NCR has 
had very similar experiences in other areas of the country. Though 
there may need to be appropriate limitations on the amount of equity 
permitted and on how that equity may be expended, without the ability 
to pay some equity, these owners can simply wait out the terms of their 
mortgages and these properties may not be preserved. I am aware of many 
situations where paying a seller any price above the existing debt may 
make the preservation less feasible, but where the payment of some 
equity is feasible, it should be permitted. S. 118 addresses the issue 
of appropriate equity payments.
    Unfortunately, over the last 5-10 years, there have been many 
situations where the preservation of properties was made difficult or 
impossible by HUD's out-of-date and contradictory regulations, 
processing delays and absence of clear policy at both the local offices 
and at headquarters. This legislation along with the new leadership we 
have seen at HUD will ease this confusion and lack of direction.
The Senior Preservation Rental Contract
    Another complication in the efforts to preserve communities is 
unique to the oldest cohort of Section 202 properties. These projects, 
built between 1969 and 1974 are often the most in need of substantial 
rehabilitation in order to be preserved for another 30-40 years. 
Unfortunately any attempt to refinance these projects and do the 
necessary work means that the existing residents, who are paying rent 
amounts that often are far below market, will face rent increases that 
they cannot afford after any refinancing and rehabilitation. There is 
no rental assistance available to ease the burden and prevent 
displacement. Preservation entities are faced with a decision to either 
evict those least able to pay or to not do the necessary rehabilitation 
to the property. Neither of these options is an acceptable answer for 
our Nation!
    The creation of a senior preservation rental contract would permit 
owners to actively preserve properties while protecting the homes of 
existing and future low-income seniors. To give you an idea of the 
magnitude of this exposure, there were 292 properties built during this 
period comprising 45,000 to 50,000 units. While some have full or 
partial Section 8 or Rent Supplement Assistance, most do not. Section 
205 of S. 118 would establish a new project based rental assistance 
contract for unassisted residents upon refinancing. I would 
respectfully request that this provision be made retroactive to address 
the very few projects from this generation of 202s that have been 
refinanced to date. The impact of not having rental assistance is 
devastating as is described in one of our Ohio case studies, Kirby 
Manor, attached to this testimony.
Excess Use of Proceeds
    Another example of complicated 202 preservation occurred in 
California. NCR had three Section 202 properties in California which we 
refinanced and rehabilitated. We'd requested permission to use the $2 
million in excess proceeds to create a housing trust fund for new 
development. HUD denied this request and required NCR to put the funds 
into each project's reserves for replacement, which were already fully 
funded. This essentially locked the funds into each individual project 
instead of allowing the funds to be distributed (within HUD approved 
parameters) ``as needed'' across a portfolio of affordable projects. 
Others can give more graphic examples of the flawed HUD policy that 
requires the passage of legislation to permit not-for-profit sponsors 
to use excess proceeds to further their housing and supportive services 
mission. S. 118 will correct HUD's policy.
Waiver of Flexible Subsidy Loan Repayment
    In April, 2006, NCR acquired a property in Asheville, NC, in order 
to preserve the property as affordable. The property had an existing 
flexible subsidy loan, which could not be paid off as part of the 
refinancing and financial restructuring. NCR requested consideration 
that would allow the loan to be assumed into the new ownership. It took 
HUD almost 8 months to inform us that they would only allow 75 percent 
of ``flex sub'' loan to be assumed and they required 25 percent of the 
loan to be paid off. NCR applied for, and was awarded, State HOME 
funds--which was then used to pay off the required amount of the 
flexible subsidy loan. Essentially, NCR used local HOME funds to pay 
down the flex sub loan in lieu of using the HOME funds to do more 
rehab. There are countless other examples of HUD's refusal to permit 
forgiveness of flexible subsidy loans that make preservation deals 
unworkable. S. 118 will correct this HUD policy that inhibits 
preservation.
Title III--Assisted Living Conversion Program
    Affordable assisted living is an option almost completely 
unavailable for low and very low-income seniors. Assisted living costs 
range from $1,742 to $5,197 per month in the United States with the 
average assisted living resident paying $2,968 per month. \1\ To meet 
the needs of the very low income frail elderly, the Section 202 program 
includes an Assisted Living Conversion Program (ALCP) to fund the 
rehabilitation of existing properties to serve frail seniors that need 
assisted living services. NCR has been awarded three ALCP grants in 
Ohio over the last couple of years. We are delighted to have received 
these grants and have been working with the leadership at the Columbus 
HUD office and the Ohio Dept of Aging to create the first affordable 
assisted living models in the State. We are dedicated to implementing 
each of the projects; however, we also realize that as currently 
designed, they are more complicated and expensive than necessary. For 
instance, although HUD does not provide funding for direct services or 
licensure, by law the current ALCP program is only open to those 
buildings able to become licensed under their State's assisted living 
statute. This requirement can be extremely expensive to comply with and 
has left the program underutilized. It almost guarantees that the only 
States where ALCP grants will work are those with Medicaid waiver 
programs. As well it locks all the residents into services that are 
required as part of the assisted living license. To encourage less 
costly and more ``flexible housing plus services'' models, S. 118 
amends the definition of eligible assisted living under the Assisted 
Living Conversion Program. The amended definition will permit 
nonlicensed properties as eligible grantees that provide supportive 
services of the resident's choice either directly or through a licensed 
or certified third party. I believe that this legislation will increase 
the availability of assisted living services to very low-income elderly 
so that they can age in place with dignity; and that S. 118 will allow 
more facilities to convert to a model that allows higher level of care 
with higher resident satisfaction at lower cost to the Government.
---------------------------------------------------------------------------
     \1\ MetLife, ``Market Survey of Assisted Living Costs 2005.''
---------------------------------------------------------------------------
Conclusion
    The need for affordable, supportive, senior housing development and 
preservation is undeniable and urgent. I am grateful to have an 
opportunity to appear before the Subcommittee in support of S. 118. 
AAHSA members and my colleagues at NCR have been actively involved in 
these issues throughout the country and have testified before this and 
other committees on the very problems that I discussed today. We are 
excited that Congress believes that these topics warrant a national 
policy discussion. Today you will have a chance to take a positive step 
in the furtherance of a goal and mission that we all support. I urge 
you to support S. 118 in order to increase the efficiency of the 
Section 202 program and to help the residents that the program serves 
today and those it will serve in the future.
    For your consideration, I have attached two case studies which 
serve as the poster children for Title II of this legislation. I am 
pleased to report that many of the problems from these case studies are 
addressed in S. 118. In addition, I am including a listing of all the 
preservation projects that NCR has completed or is in the process of 
completing since 2002.
A Preservation Case Study: Kirby Manor in Cleveland, Ohio
    Kirby Manor, is a pre-1974 Section 202 development with no rental 
subsidy. None of the existing seniors were eligible for enhanced 
vouchers. The rehab needs were substantial, but the residents could not 
afford to pay for the increased rent that additional debt would 
trigger. None could bear the burden of higher rents; none wanted to 
move; and as a mission-oriented purchaser, NCR did not want to displace 
the residents. NCR's experience with the preservation of this project 
is illustrative of the typical issues that developers experience. Our 
goal at Kirby Manor was to preserve the property and keep residents in 
place. Our plan was to refinance the project using tax credits, 
reconfigure the existing efficiencies, converting them into one bedroom 
units and to construct additional units. Most of the 202 units were 
efficiencies of 287 square feet, a portion were studios of 345 square 
feet and the remaining were small one-bedrooms of 439 square feet. The 
project as it stood was unattractive and unmarketable as compared with 
the West Cleveland neighborhood where new, subsidized, more desirable 
housing had been built for a younger population. Although the sponsor 
and owner of the project had maintained the project in excellent 
condition, all of the building's original plumbing, mechanical and HVAC 
systems were nearing the end of their life expectancy. Only a 
significant recapitalization would provide sufficient resources to 
preserve the property.
    NCR submitted a waiver request to HUD to request the subordination 
of the existing Section 202 loan and received an allocation of 9 
percent tax credits which provided approximately $8,400,000 in equity. 
In addition, Kirby received a commitment of $1,000,000 in HOME funds 
from the City of Cleveland; and, a commitment of $450,000 from the Ohio 
Housing Finance Agency as subordinated debt. The new first mortgage was 
a HUD 221(d)(4) insured loan of $4.467 million at 6.5 percent interest. 
Because enhanced vouchers were not available to these residents, NCR 
funded a $1,000,000 reserve from the equity generated in the 
refinancing to cover the increased rents for seniors as long as they 
remained. Once those residents pass away or leave there will be no 
deeply targeted subsidy to allow us to house the lowest income seniors. 
The rents will revert to tax credit levels and the poor seniors in that 
community will end up on a waiting list for Section 202/8 or Section 
202 PRAC communities. If there were a senior preservation rental 
assistance program, NCR would be able to house other low-income seniors 
in those units.
    The project redesign included the reduction of the number of units 
from 202 to 147 units and the conversion of units from efficiencies and 
one-bedroom units into renovated and newly constructed one- and two-
bedroom units. After countless hours of negotiations, legal opinions 
and waivers, this project was completed. If the statutory changes 
included in S. 118 were enacted, then projects like Kirby Manor could 
be accomplished comparatively quickly and with little aggravation. 
Kirby Manor would be the norm instead of one in a hundred, and 
preservation of the Section 202 would be enhanced to prevent the loss 
of affordable housing just as the senior population is exploding.
A Preservation Case Study: Viewpoint Apartments, Sandusky, Ohio
    Viewpoint Apartments is another early generation Section 202 
property in Sandusky, Ohio, that NCR tackled. It had been developed and 
owned by the Kiwanis. The property had a number of efficiencies that 
were no longer marketable and thus experiencing a high vacancy rate. 
The project was only 50 percent subsidized and the rest of the units 
were unsubsidized and ineligible for enhanced vouchers. NCR applied for 
permission to reconfigure the existing units, changing them into one 
bedrooms and requested HUD's permission to subordinate the original 202 
loan. HUD initially determined that rather than allow the 
reconfiguration they'd disallow the change under a strict ``one for 
one'' replacement policy in spite of the proven limited demand for 
efficiencies in the Ohio market. HUD also denied our request to 
subordinate the existing 202 loan or to allow the assumption of the old 
loan into the new financing structure. The good news is that after 
months of painful HUD processing, NCR was able to eventually close on 
the refinancing and provide a $7,000,000 update and facility 
transformation to this valuable Sandusky community. However, NCR truly 
believes that it should not be this hard and that HUD should serve as a 
proactive partner trying to do whatever it takes to preserve these 
precious community assets. These are extraordinarily complex 
transactions, but we're hopeful that with this legislation and the 
leadership at HUD, the next ones will not be as difficult.



                  PREPARED STATEMENT OF TOBY HALLIDAY
        Vice President for Public Policy, National Housing Trust
                            October 29, 2009
    Subcommittee Chairman Menendez, Ranking Member Vitter, and Members 
of the Subcommittee, thank you for the opportunity to testify today in 
support of S. 118, the Section 202 Supportive Housing for the Elderly 
Act of 2009. My name is Toby Halliday, and I am Vice President for 
Federal Policy for the National Housing Trust. Over the past decade, 
the Trust has helped save and improve more than 22,000 affordable 
rental apartments in over 40 States. The vast majority of these 
apartments have HUD subsidized mortgages or project-based rental 
assistance contracts.
    I also serve as the chair of the National Preservation Working 
Group, a coalition of 36 nonprofit organizations supporting affordable 
rental housing. The members of the Preservation Working Group strongly 
support a balanced housing policy that includes quality rental housing 
and support legislation to protect and revitalize affordable rental 
housing for seniors.
    The needs of America's lower-income seniors are great, and those 
needs will grow. The population of Americans age 65 and older is 
expected to double between 2000 and 2030. According to the Federal 
Interagency Forum on Aging-Related Statistics, more than 13 million 
older Americans--35 percent--have low incomes (less than 200 percent of 
poverty) (Older Americans 2008: Key Indicators of Well-Being, http://
www.agingstats.gov).
    Harvard's Joint Center for Housing Studies recently found that 
among seniors who rent, 2.5 million (53 percent) pay more than 30 
percent of their incomes for housing, and 1.4 million pay more than 50 
percent. ``These households [are] without sufficient resources to pay 
for rent and utilities as well as for food, medicine, and other 
necessities. Indeed, the basic SSI payment of $623 a month is only 
enough to cover a rent of $191 a month--far below the FMR [fair market 
rent] for an efficiency apartment, let alone one with a separate 
bedroom'' (``America's Rental Housing: The Key to a Balanced National 
Policy'' (Joint Center for Housing Studies, Harvard University, 2008, 
p. 17)).
    Due to the recession that now grips our economy and the mortgage 
crisis that precipitated it, legislation to preserve and revitalize 
affordable rental housing, including housing for seniors and the 
disabled, is needed today more than ever. Many 202 properties are 40 
years old or older, in need of repair and improvements, and are 
stretched to meet the expanding needs of their aging residents. Because 
of their age, many of these properties also require significant 
alternations to meet current standards and the needs of an increasingly 
elderly population. At the same time, many cash-strapped States and 
local Governments are reducing assistance to needy families. All of 
this leads to a heightened risk of homelessness. Protecting taxpayers' 
investments in existing 202 properties is critical to meeting this 
challenge.
    This year the HUD Section 202 Supportive Housing for the Elderly 
Program celebrates its 50th birthday. Since 1959 the 202 program has 
led to the creation of approximately 300,000 affordable rental 
apartments for low-income seniors around the country. Many of these 
properties could benefit from refinancing opportunities to recapitalize 
and better serve the needs of aging seniors for many more years. This 
housing serves nearly every community in the Nation. The Trust has 
identified approximately 400,000 Section 202/811 Apartments, some 
without rental assistance, as shown in Attachment A of my testimony.
    But under the current Section 202 law, the development and 
preservation of existing communities can be time consuming and 
administratively complex. S. 118, sponsored by Senator Kohl and 
cosponsored by Senators Brown, Casey, Durbin, Landrieu, Leahy, Levin, 
Nelson, Schumer, and Stabenow, would simplify, streamline, and 
modernize procedures to improve and preserve these properties, 
encourage broader participation by not-for-profit developers, private 
lenders, investors, and State and local funding agencies, and result in 
the creation of needed construction jobs.
    Key provisions of S. 118 would:

    Modernize and streamline processing for new Section 202 
        awards;

    Streamline rules and procedures for recapitalization and 
        funding for supportive services;

    Add a requirement that the rehabilitation ensure long term 
        viability of the property;

    Authorize new resources to protect residents from rent 
        increases needed to pay for necessary recapitalization;

    Require tenant notice and participation prior to the 
        approval of a prepayment;

    Expand access to supportive services;

    Create a National Senior Housing Clearinghouse to help 
        prospective residents find affordable senior housing and 
        determine what services are available.

    Some controversy exists over whether to loosen restrictions on the 
ability of existing nonprofit owners to retain proceeds from the sale 
or refinancing of their property. Current restrictions discourage the 
sale of some 202 properties by sponsors, especially some owners of 
individual properties, that lack the capacity for best long-term care 
of their properties and service to their residents. The Trust believes 
that a reasonable incentive is needed to foster the transfer of 
properties to owners with the desire and the ability to ensure the 
long-term viability of these properties and meet the needs of 
residents.
    A recent report released by the AARP, Reconnecting America, and the 
National Housing Trust highlights the importance of existing affordable 
housing near rail and high-frequency bus transit and the need to 
preserve 202 housing near public transportation. Findings from the 
report include:

    Transit-connected affordable housing, including Section 202 
        housing, provides access to community resources for seniors, 
        who occupy the majority of these apartments.

    Preserving affordable housing near transit is of critical 
        importance for maintaining independence and preserving livable 
        communities for older Americans.

    Transit-connected affordable is increasingly at risk of 
        conversion to nonaffordable uses, presenting at threat to 
        current and potential future occupants.

    Federal, State, and local Governments should emphasize the 
        preservation of affordable housing near transit.

    The AARP report states, in part:

        Of the more than 250,000 federally subsidized apartments with 
        rental assistance contracts within one half mile of ``quality 
        transit'' (and approximately 200,000 within one quarter mile) 
        in 20 metropolitan regions across the country, more than 70 
        percent are covered by Federal contracts that will expire over 
        the next 5 years. This finding raises concern considering the 
        vital role affordable housing and affordable transportation 
        options play in achieving livable communities, particularly in 
        respect to the needs of older Americans (``Preserving 
        Affordability and Access in Livable Communities: Subsidized 
        Housing Opportunities Near Transit and the 50+ Population'', 
        AARP Public Policy Institute, September 2009, p. 7, emphasis 
        added).

    Thank you for holding this hearing on this important legislation. 
The National Housing Trust urges the earliest possible consideration of 
this bill. Thank you.


                 PREPARED STATEMENT OF J. MICHAEL JONES
                       Parent, Brick, New Jersey
                            October 29, 2009
    Chairman Menendez and Members of the Subcommittee--As the father of 
someone with psychiatric disabilities I appreciate your invitation to 
provide testimony to this Subcommittee on the behalf of the many 
families in the same situation. Also as a father I can tell you that 
about two out of every five families are affected by mental illnesses.
    Mr. Chairman, I thank you and this Subcommittee for your work to 
sustain, improve, and increase the number of units available for low-
income people with disabilities. As the only federally funded housing 
program aimed at providing low-income people with disabilities with 
affordable rental subsidies the Department of Housing and Urban 
Development's Section 811 program is very important to the recovery of 
many with mental illnesses. This program also provides people the 
opportunity to live independently within their own communities by 
providing affordable rental options. Today I will share some of my 
son's experiences as a mental health services consumer in obtaining and 
living in several types of supported housing.
    First I would like to provide you with a little history of my 
family's journey into mental illness, treatment, and recovery. My 28 
year old son, Michael, was diagnosed with Attention Deficit Hyperactive 
Disorder when he was four. When he started school the child study team 
determined that he also had learning disabilities. He was placed into 
special education, where he remained throughout elementary, middle, and 
high school. When he was a freshman in high school he was diagnosed 
with Depression, but he had other behavioral problems as well that 
periodically caused trouble in school. He was first hospitalized for 
treatment of mental illness when he deliberately cut himself on the 
cheek with a box cutter while in shop class. He was subsequently 
tentatively diagnosed with Schizoaffective Disorder, then Bipolar. 
Reevaluated in his senior year, he was found to have Schizophrenia 
shortly before he was first hospitalized in the State hospital. As you 
can imagine, high school was not enjoyable for him. He graduated in 
2000, although it was not with his classmates. He completed his senior 
year at a therapeutic academy for students with psychiatric disorders. 
His current diagnosis is again Schizoaffective Disorder with 
cooccurring substance abuse. His learning disabilities still limit what 
he is able to do if it involves concentration, reading comprehension, 
planning, or short term memory. For example, he cannot decipher even 
simple medical instructions.
    Mr. Chairman, as a father, the first response to a mental illness; 
after the shock of discovery, diagnosis, and denial is to learn all 
that you can to try and fix your child's problem. I started looking for 
that ``silver bullet'' that we all hope to find as a cure any major 
illness and found that there were none, but I did discover hope and 
support from other families and friends that had gone before us and 
that are going through this. As my family became increasingly involved 
in learning about what we could do, who we needed to know, and where we 
needed to go to help our son I discovered that there were many support 
systems besides the mental health systems that could be needed. In 
order to learn more about these and to help others I sought, and was 
selected, to be on the Ocean County Mental Health Board and the New 
Jersey State Planning Council as a family member. These two 
organizations have helped me learn about new programs and details of 
existing programs that could help my son and many other families.
    When I found out that the National Alliance on Mental Illness 
(NAMI) was founded by families supporting other families, educating 
each other and advocating for improved treatment and services I decided 
that I had found my support. NAMI is the Nation's largest nonprofit 
organization representing and advocating on behalf of persons living 
with chronic mental health challenges. Through over 1,100 chapters and 
affiliates in all 50 States and over 200,000 members, NAMI supports 
education, outreach, and advocacy on behalf of persons with 
schizophrenia, bipolar disorder, major depression, severe anxiety 
disorder, post-traumatic stress disorder (PTSD), and other chronic 
mental illnesses that affect children and adults.
    However, we didn't discover NAMI until 2002. I became very active 
in our local affiliate in 2003 and I am currently the President of 
NAMI-Ocean County. I was also elected to the NAMI New Jersey Board of 
Trustees and, because I'm a veteran, asked to be on the NAMI National 
Veterans Council where I support Veterans and their family with mental 
illnesses. I also became a teacher in the Family-to-Family Education 
Program where I learn from and facilitate support groups for families 
in crisis in their journeys to recovery.
    While I will talk about my son's experiences I have found that they 
are similar to many other families' situations. One key thing I have 
learned is that those who contract mental illnesses seem to be stuck 
developmentally at the level of maturity where they are when they get 
sick. The saying is, ``They are stuck where they are struck.'' The 
knowledge of when one gets ill should be helpful to those trying to 
tailor services to their needs. My son's mental maturity is such that 
he still reacts and thinks like a very young person much of the time. 
Another thing I have found is that many times those providing services, 
providing information, or giving directions, which are then not 
followed by the consumer, do not seem to be able to empathize and brand 
the consumer as noncompliant or nonresponsive when it is simply the 
inability to remember.
    Michael always wanted to be on his own, but had no financial means 
or living skills to do so. After graduation from high school he tried 
living with friends but ended up in crisis and in the State hospital 
again. By then we had learned that if he had no place to go upon being 
released he would likely be placed into a group home. He needed 
structure, but he also needed to be away from his family in order to 
develop skills for independence. We told his treatment team the day he 
arrived in the hospital that he could not come home after release. 
During this hospitalization he first admitted to taking substances 
other than prescribed medicine and started rehabilitation at another 
facility. He was quickly sent back when he became psychotic due to the 
treatment methods. After his hospitalization he was released to a group 
home for mentally ill chemical abusers (MICA). He did well for a while, 
but eventually started to try to find a way to leave. He finally did 
after almost 3 years. But he left to live with his girlfriend and her 
mother. His girlfriend was pregnant.
    My wife took the couple to apply for Section 8 housing in May of 
2006. Our son was informed after a few months that he was eligible, but 
he never heard anything further.
    The day-treatment program he and his girlfriend both attended 
referred them to their supported housing office. This office provided 
them with a listing of several apartment complexes where they could 
look. None had vacancies. They were still living with the girlfriend's 
mother when the baby was born, however there was a fire in the 
apartment the day before the baby was to come home, thus they all went 
to live with relatives. Because they were now homeless, the housing 
office was able to get them into an apartment in about 2 months. The 
new family was provided support to get the lease established and 
transportation to obtain utilities and deposit payments. The case 
manager also picked out and had furniture delivered before they moved 
in. They initially were visited by their case manager several times a 
week, but this soon slowed to only sporadic visits.
    My son discovered that their cable had pay-per-view movies and 
unwittingly ran up their bill to well over $400 the first month. In 
addition to having to adjust to living pretty much on his own, and to 
being a father he also had a very difficult time with the routine of 
daily life and had zero ability to manage finances.
    In less than a year our son and his girlfriend split up. He then 
briefly came back home to live with us. Shortly thereafter visitation 
and child support arrangements were made and he started having 
supervised visits with his daughter in our home. However, the first 
time he went to pick her up he was handed a note stating that his 
former girlfriend was leaving the county with his daughter when the 
lease was up. After the second visit by his daughter he suddenly packed 
up some things and left to live with friends.
    During this timeframe a New Jersey Division of Mental Health 
Services program called Residential Intensive Support Teams (RIST), 
originally established for providing intensive supported housing for 
those leaving the State hospitals, was expanded in Ocean County to 
provide housing for those at risk of becoming homeless and who also 
needed more intensive services. Our son was referred and selected to 
participate.
    A major difference between this program and supported housing is 
that RIST initially holds the lease and acts as the Representative 
Payee for social security benefits. This is beneficial because clients 
may need to be hospitalized periodically and/or have real problems 
managing finances and spending. This way the clients do not lose their 
homes and someone is there to help keep their benefits and affairs as 
straight as possible.
    The stated goals of RIST are to support and encourage the 
development of life skills required to sustain successful living in the 
community and to provide housing in a community setting environment 
which allow opportunities to learn the skills necessary for more 
independent living. Within this setting they provide each consumer with 
the maximum possible autonomy, independence, and self-determination. 
This program does constantly strive to empower consumers to relocate to 
less restrictive living arrangements.
    My son moved into the apartment to live on his own, a very nice 
second floor apartment that RIST had help him furnish, in early 2008; 
he started living skills training and a new day program. RIST provided 
evening ``life skills'' groups for the RIST supported clients in the 
apartment complex. Michael volunteered to help others to learn from his 
experience on how to use the bus system. He also had plans to become a 
peer support counselor, but never carried through.
    However it didn't take him long to make friends and to throw his 
first loud party. He ran up his electric, cable and telephone bills 
very quickly. His case manager tried to help by having his phone 
limited to the local exchange only and canceled his cable. At this 
point, he had no one to take up the slack in paying for food and 
quickly found that his food stamps didn't buy enough each month. He 
would eat lunch at his day program and would sometimes cook easy-to-
prepare meals, but would go for days with one meal a day at program. He 
started using money he obtained from selling things he either owned or 
stole to buy food and drugs.
    He got to the point of deciding, with his case manager, that living 
on his own was really not appropriate for him yet and that he needed go 
into the hospital to get into a long-term drug rehab program then back 
into a group home. The hospital case manager found that there were no 
long-term rehab programs available. He then made the correct decision 
to go to the State hospital again for treatment and so that he could 
get into a group home.
    At his initial attempts, Michael was not ready for supported 
housing. He had never developed the skills and habits needed to build 
on to start to live independently. His girlfriend, whose mental illness 
hit her much later in life, has continued to do very well in supported 
housing. While he was very fortunate to be afforded the opportunities 
and to have caring case workers he wasn't ready. I am very proud to say 
that he came to the realization, and knowing enough to talk it over 
with his case managers, he decided that he should to return to the MICA 
group home so he could learn and pursue skills he needs to live 
independently. The lesson here is that the providers of supported 
housing must understand that those with mental illnesses may require 
much more than periodic support. They may need very intensive case 
management to guide and reinforce living skill development for as long 
as a year, perhaps longer.
    Mr. Chairman, this concludes my formal testimony. I hope you are 
able to take our views into consideration as you conduct the important 
work of this Subcommittee. Again, I appreciate the opportunity to 
testify. I would be honored to answer any questions that you might 
have.
                                 ______
                                 
                  PREPARED STATEMENT OF SHEILA CROWLEY
  President and Chief Executive Officer, National Low Income Housing 
                               Coalition
                            October 29, 2009
    Chairman Menendez, Ranking Member Vitter, and Members of the 
Subcommittee, thank you for the opportunity to testify today on 
``Modernizing Affordable Housing for Seniors and People with 
Disabilities.''
    I am Sheila Crowley, President of the National Low Income Housing 
Coalition; our members include nonprofit housing providers, homeless 
service providers, fair housing organizations, State and local housing 
coalitions, public housing agencies, private developers and property 
owners, housing researchers, local and State Government agencies, 
faith-based organizations, residents of public and assisted housing and 
their organizations, and concerned citizens. The National Low Income 
Housing Coalition does not represent any sector of the housing 
industry. Rather, NLIHC works only on behalf of and with low income 
people who need safe, decent, and affordable housing, especially those 
with the most serious housing problems. NLIHC is entirely funded with 
private donations.
    The National Low Income Housing Coalition strongly supports the 
Section 202 and Section 811 programs, and the two bills under 
consideration today: S. 118 and S. 1481. We urge swift action on both 
bills.
Housing Needs
    One of NLIHC's most important functions is to analyze national 
datasets to better understand the housing circumstances of low income 
people in the United States and make the findings available to the 
public and policymakers. In our most well known research report, Out of 
Reach, we examine what rental housing costs and what low income people 
earn, and document the degree to which low income people cannot compete 
in the private rental market in every jurisdiction in the country.
    For example, Out of Reach 2009 tells us that in Hudson County, NJ, 
where 69 percent of the households are renters, to be able to afford to 
rent a modest two bedroom home, a household must earn $42,760 a year. 
In East Baton Rouge Parish, LA, with 38 percent of households renting, 
household income must be at least $31,520 a year to afford a two 
bedroom home at the fair market rent. Although it may seem that 
Louisiana is more affordable than New Jersey, the mean hourly wage of 
renters in Hudson County is $26.80, while the mean hourly wage for 
renters in East Baton Rouge is just $11.76. There is nowhere in the 
entire country where a full time worker earning the prevailing minimum 
wage can afford the rent on a one-bedroom rental home using the 
standard of spending no more than 30 percent of household income on 
housing. \1\
---------------------------------------------------------------------------
     \1\ Wardrip, K., Pelletiere, D., and Crowley, S. (2009, April). 
Out of Reach 2009. Washington, DC: National Low Income Housing 
Coalition.
---------------------------------------------------------------------------
    Low wage workers may have a tough time affording the most basic 
home, but elderly and disabled people who depend on SSI for income have 
it much worse. The fair market rent in Hudson County, NJ, for an 
efficiency unit is $989 a month. Thirty percent of monthly SSI income 
in New Jersey is $212. An SSI recipient in Louisiana can afford $202 a 
month for housing; yet the fair market rent for an efficiency in East 
Baton Rouge Parish is $627 a month. \2\ While some SSI recipients have 
additional income, it is an income program of last resort and benefit 
levels go down as income goes up.
---------------------------------------------------------------------------
     \2\ Ibid.
---------------------------------------------------------------------------
    According to the Social Security Administration, there were 
6,366,000 adults receiving SSI as of the end of 2008: 4,333,000 were 
blind or disabled adults between ages 18 and 64, 1,203,000 were adults 
65 of years or older, and 830,000 were blind or disabled and 65 years 
of age or older. \3\ SSI recipients are among the very poorest people 
in our country, and in the absence of housing assistance in some form, 
cannot afford to live in any community.
---------------------------------------------------------------------------
     \3\ Social Security Administration, 2009 Annual Report of the SSI 
Program, http://www.ssa.gov/OACT/ssir/SSI09/toc.html.
---------------------------------------------------------------------------
    These are precisely the people who the 202 and 811 programs can 
best serve. There are approximately 300,000 units of Section 202 
housing, but just one third have rent assistance attached to them, \4\ 
and thus are affordable for SSI recipients and other very poor elders. 
The approximately 30,000 units of Section 811 housing do have rent 
assistance attached and another 14,000 vouchers are part of the Section 
811 program.
---------------------------------------------------------------------------
     \4\ HUD, Office of Inspector General. (2008, October). HUD 
Management and Performance Challenges. http://www.hud.gov/offices/cfo/
reports/section4.pdf.
---------------------------------------------------------------------------
    Many adult SSI recipients receive other forms of Federal housing 
assistance. In 2005, 277,000 units of public and Section 8 project-
based housing were reserved for people 62 years of age and older. \5\ 
Nearly two-thirds of HUD's 1.1 million public housing units house 
senior citizens or people with disabilities. Three quarters of the 1.3 
million units of Section 8 project-based housing are headed by an 
elderly or disabled person. A third of the voucher program's 2 million 
households are senior citizens or people with disabilities. 
Nonetheless, demand far exceeds supply.
---------------------------------------------------------------------------
     \5\ Perl, L. (2008, September). Section 202 and Other HUD Rental 
Housing Programs for Low Income Elderly Residents. Washington, DC: 
Congressional Research Service. http://aging.senate.gov/crs/
aging17.pdf.
---------------------------------------------------------------------------
    When we examine data on housing cost burdens by age and income, we 
learn that a significant number of low income elderly people have 
serious housing problems. There are 26,600,000 households with one or 
more members 65 years of age or older, who make up 23 percent of all 
households in the U.S. Sixteen percent of senior households are 
extremely low income, with incomes of 30 percent of area median or 
less. Almost three quarters (74 percent) of extremely low income senior 
households pay more than 30 percent of their income for their homes; 51 
percent (2,100,000 households) spend more than half of their income. 
\6\ When a poor elderly person has to spend more than half of her 
income on her home, it means she goes without, scrimping on food, 
medicine, heat, and other basic needs. These are the elderly people who 
are most at risk of homelessness. Living hand to mouth hastens the day 
when an elderly person can no longer live on her own and require 
expensive institutional care. Providing housing assistance extends the 
time that an elderly person can live on her own, and is more cost 
effective than nursing homes.
---------------------------------------------------------------------------
     \6\ NLIHC tabulations of 2007 American Community Survey.
---------------------------------------------------------------------------
    The housing needs of elderly people today are readily apparent. The 
elderly population is only going to grow for the next two decades as 
the baby boomers reach 65. There will be more elderly people and they 
will make up a percentage of the population. With the demise of defined 
benefits pension programs and the loss of retirement savings in the 
current recession, elderly people in the future will likely have less 
income that elderly people today. We need to invest in housing choices 
for this population now.
How S. 118, the ``Section 202 Supportive Housing for the Elderly Act of 
        2009'' Will Help
    S. 118 will help more Section 202 units come on line more quickly, 
by ensuring that total development cost limitations supported by HUD 
would now be ``reasonable,'' reducing some of the time-consuming 
elements of the development process. The provision that Section 202 
sponsors could establish a preference for homeless seniors improves 
access to affordable housing for elderly people who are most in need.
    The bill will also preserve existing Section 202 properties through 
refinancing of their Section 8 loans and investment of savings into 
rehabilitation, supportive services, reconfiguration of obsolete unit 
types, and other needs. Owners will have sufficient resources to 
repair, rehabilitate and modernize their units. Moreover, when a 
refinancing does occur, the property's affordability period is extended 
for 20 years past the original mortgage maturity date, assuring that 
these units remain affordable and available to very low income seniors 
for another generation.
    The bill prohibits the HUD Secretary from accepting any refinancing 
or prepayment plan by a Section 202 sponsor if tenants have not been 
notified of the owner's request for approval of prepayment. Tenants 
should be given the opportunity to comment on the prepayment and any 
anticipated rehabilitation, and the owner should be required to take 
such comments into consideration. These provisions will be central to 
the successful preservation of existing homes, and will be further 
improved by including timelines for such participation.
    The bill includes several improvements that will support Section 
202 residents aging in place. Section 202 properties will be more 
likely to have service coordinators. For new Section 202 properties, 
HUD would encourage the inclusion of service coordinators in each 
property by adding the extent to which the Section 202 sponsor ensures 
there will be a service coordinator for the property as a new funding 
selection criterion. The bill will also allow Section 202 sponsors to 
build the cost of service coordinators into their Project Rental 
Assistance Contracts, stabilizing funding for these key staff members.
    The presence of service coordinators increases the time that frail 
and vulnerable older people can remain in their homes and prevents 
premature transition into more costly settings, such as nursing homes. 
A recent HUD study of service coordinators reports: ``The average 
length of occupancy was 6 months longer among residents of properties 
with HUD-funded service coordination compared with residents of similar 
development without service coordinators. By forestalling or preventing 
unnecessary institutionalization, service coordinator programs help to 
promote independent living, improve residents' quality of life, and 
ultimately save taxpayers' dollars.'' \7\
---------------------------------------------------------------------------
     \7\ HUD, Office of Policy Development and Research. (2008, 
December). Multifamily Property Managers' Satisfaction With Service 
Coordination.
---------------------------------------------------------------------------
    The bill amends HUD's Assisted Living Conversion Program (ALCP) so 
that more residents would have access to assisted living services. Very 
low income people, like Section 202 residents, cannot afford the cost 
of assisted living facilities. HUD's ALCP program provides grants to 
certain developments to convert some of their units to licensed 
assisted living units. Under the current program, each grantee's ALCP 
specific designated units must be licensed by the State's licensure 
board as meeting its assisted living standards, a cumbersome process. 
The bill allows ALCP grantees to provide assisted living services 
within a given property, thus greatly expand the numbers of residents 
that could participate in such services and the types of services 
provided within the property. Under the provisions of S. 118, residents 
can chose to participate in these services as they wish and as their 
needs change over time. This provision will give residents more choices 
of services like medication management, home-based health care, and 
personal care.
    The bill also includes a National Senior Housing Clearinghouse. The 
Clearinghouse will be a national repository to collect, process, 
assemble, and disseminate information regarding the availability of 
multifamily developments for elderly tenants. HUD is also directed to 
establish a toll-free number to provide the public with information on 
the availability of affordable senior housing. The Clearinghouse would 
greatly assist potential residents and their families in their search 
for affordable housing.
How S. 1481, the ``Frank Melville Supportive Housing Investment Act of 
        2009'' Will Help
    S. 1481 will authorize the new Project Rental Assistance 
Competitive Demonstration, which will facilitate mixed income housing 
by providing project based rental assistance alone, without capital 
grants. Developers will combine rental assistance with other capital 
sources, including the new National Housing Trust Fund. This 
demonstration will increase the number of 811 units available to 
residents in mixed income, multifamily developments. Poor people with 
disabilities will have much greater choice in the kind of housing in 
which they can live.
    The bill will modify the Capital Advance Program by requiring that 
units for people with disabilities are limited to 25 percent of total 
units in a property, increasing opportunities for residents to live in 
integrated settings. Tenant protections will also be increased as 
owners would be required to develop written tenant selection procedures 
and eligibility cannot be narrowed to a specific type of disability.
    By transferring mainstream tenant based vouchers to the Section 8 
program, HUD will be required to reissue all vouchers resulting in a 
higher number of vouchers available to eligible residents.
What Else Needs To Be Done
    Enactment of S. 1481 and S. 118 are important steps for Congress to 
take as soon as possible. We also urge preservation of other HUD 
assisted housing, which are home to many people with disabilities and 
senior citizens. We urge the Committee to support and enact policies 
that will help preserve and improve both the severely distressed and 
nonseverely distressed public housing, as well as the project-based 
affordable housing stock.
    We sincerely hope the Committee will soon take up Section 8 Voucher 
Reform legislation. Significant work has been undertaken by a wide 
range of stakeholders to also ``modernize'' the voucher program. With 
the reforms SEVRA promises, existing voucher resources will be used 
more effectively and efficiently to serve more people who languish on 
waiting lists for years.
    Finally, we ask the Committee to move quickly on funding for the 
National Housing Trust Fund. Senator Jack Reed has proposed to direct 
$1 billion from the sale of warrants on TARP funds to the initial 
capitalization of the NHTF. We thank Senator Menendez and others who 
have cosponsored S. 1731.
    With $1 billion, we estimate that 10,000 rental units will be 
produced or preserved. At least 75 percent of NHTF units must be 
affordable to extremely low income people and all must be affordable 
for very low income people (incomes at 50 percent of area median or 
less). We expect many NHTF units will become home to extremely low 
income elderly people and people with disabilities.
    Congress has made important strides this year in low income housing 
policy. Enactment of the Hearth Act and the Protecting Tenants in 
Foreclosure Act will have far reaching benefits for many needy 
Americans. The funds provided in the American Recovery and Reinvestment 
Act to prevent homelessness, to jumpstart the Low Income Housing Tax 
Credit, and to make capital investments in public and assisted housing 
are being put to good use.
    The first year of the 111th Congress will be historic for low 
income housing policy if these accomplishments are accompanied by S. 
1481, S. 118, SEVRA, and funding for the National Housing Trust Fund.
    Thank you for your consideration of my testimony.
        RESPONSES TO WRITTEN QUESTIONS OF SENATOR VITTER
                      FROM MICHELLE NORRIS

Q.1. Ms. Norris, S. 118, the Section 202 Supportive Housing for 
the Elderly Reform Legislation is designed to reform the HUD 
Section 202 program to enhance housing for the Nation's 
elderly. Are there any additional hurdles to building housing 
for the elderly that could be included in the legislation but 
haven't been for whatever reason?

A.1. As a frequent applicant for new section 202 capital 
advances during the NOFA process, I believe that the 
legislation covers all the existing legislative hurdles that 
are impediments to building housing for the elderly. Although 
there may be impediments in the development process, such as 
NIMBYism, land costs, conflicting deadlines for various sources 
of funding, they can not be solved by changes in the 
legislative authorization. Increased costs, such as those that 
may be required to meet high land costs or NIMBY related 
setbacks or changed egress, are addressed by requiring that 
each capital advance be provided reasonable development costs. 
I also would suggest that administrative changes at HUD in 
their NOFA process and in coordination with other financing 
sources would remove hurdles. Finally, even if all the hurdles 
are removed, the only way to enhance housing opportunities for 
the Nation's low income elderly is to significantly increase 
the appropriation for the 202 program. Funding the development 
of 3,500-4,000 units a year across the country is simply 
insufficient to meet the growing demand.

Q.2. Are you aware of any cost estimates for this bill, S. 118? 
If so, what are they?

A.2. S. 118 has not been scored by CBO to my knowledge. 
However, H.R. 2930, a similar bill introduced and passed by the 
House in the last Congress was scored. Based on the House score 
there is direct spending of $94 million over a 5-year period. 
The majority of the costs, $88 million, was attributed to the 
Section 202 loan sale demonstration program called for in 
Section 205 of S. 118. During the 110th Congress, the House 
stripped the demonstration from the bill to eliminate the 
direct spending and passed the bill under suspension. The 
direct spending is the result of the loss of interest to the 
Federal Government when the loans are sold. However, my 
understanding is that HUD already has the authority to engage 
in such loan sales and therefore the provision may not be 
necessary if HUD were inclined to demonstrate the efficacy of 
loan sales and shifting of asset management to State agencies.

Q.3. What are the real world barriers to the new construction 
process for building housing for very low-income seniors? Are 
there any difficulties in gaining the necessary permits because 
of environmental reviews or other administrative decisions, or 
are the delays strictly related to underwriting practices?

A.3. Building housing for low income seniors sometimes suffers 
from the same kinds of community opposition to development of 
any affordable housing; however senior housing is typically 
more acceptable. When community opposition arises, it makes 
getting the necessary approvals for development difficult and 
time consuming. However, the Section 202 program is unique in 
that each sponsor typically has local participation and support 
from the start.
    Delays can also occur because the 202 program typically 
requires a number of funding sources to make the deals work and 
that takes time.
    In the past we (NCR) have had difficulty getting a variety 
of programmatic waivers granted by HUD headquarters for both 
new development and preservation deals. In preservation 
transactions or refinancing, we have had to ask for waivers to 
subordinate the original loan, to convert efficiencies to one 
bedrooms and a host of similar issues; therefore apropos your 
question, I would suggest that the administrative decisions and 
processes at HUD represent greater barriers to getting housing 
built or rehabilitated than the local regulatory barriers such 
as environmental reviews or zoning or other requirements 
typically thought of as barriers. Too often the delays occur 
because of frequent bureaucratic ``gotcha'' moments if not 
every little item was addressed or because there is no sense of 
partnership between HUD and the sponsors. Once an application 
is submitted, there is no give and take, just regulator vs. 
regulated.
              Additional Material Supplied for the Record
 STATEMENT FOR THE RECORD ON BEHALF OF: AMERICAN ASSOCIATION OF PEOPLE 
  WITH DISABILITIES; CONCRETE CHANGE; DISABILITY RIGHTS EDUCATION AND 
    DEFENSE FUND; EQUAL RIGHTS CENTER; NATIONAL SPINAL CORD INJURY 
    ASSOCIATION; NATIONAL FAIR HOUSING ALLIANCE; NATIONAL MULTIPLE 
  SCLEROSIS SOCIETY; PARALYZED VETERANS OF AMERICA; AND UNITED SPINAL 
                              ASSOCIATION
    These organizations, representing millions of Americans with 
disabilities, and their families, friends, and allies, appreciate the 
focus of this hearing on the need for more affordable housing. Many low 
income Americans with disabilities will benefit from the changes 
proposed to the Section 811 program in S. 1481. However, we would 
direct the Committee's attention to another related housing challenge 
that confronts thousands, if not millions, of people with disabilities 
every year. That challenge is finding housing that is not only 
affordable, but accessible.
    Under current law, when Federal financial assistance is used to 
create new single family houses or town houses, only 5 percent are 
required to meet accessibility standards that allow individuals with 
physical disabilities to visit or live in these houses. The remaining 
95 percent of Government-assisted new homes can be built with 
unnecessary architectural barriers. As a result, residents who acquire 
disabilities are forced to live in unsafe conditions, unable to use 
their bathrooms or exit their homes independently. They may face high 
renovation costs or long waiting lists for public funds to finance 
modifications. They may become socially isolated because architectural 
barriers prevent them from taking part in the gatherings that take 
place in the homes of their friends and extended family. Ultimately, 
they may be forced from their homes and into institutions because of 
this lack of basic accessibility in their housing.
    In a study published last year by the American Planning 
Association, researchers determined that, using different measures of 
disability, there was a 25 to 60 percent chance that a house built in 
2000 would at sometime during its useful life contain a resident with a 
severe, long-term mobility impairment. \1\ This Nation is not building 
homes to meet the needs of its people.
---------------------------------------------------------------------------
     \1\ ``Aging and Disability: Implications for the Housing Industry 
and Housing Policy in the United States'', Journal of the American 
Planning Association, Summer 2008.
---------------------------------------------------------------------------
    There is legislation that will address these dilemmas in a cost-
effective and practical way. H.R. 1408, the Inclusive Home Design Act 
(IHDA), sponsored by Congresswoman Jan Schakowsky, would require a 
basic level of architectural access in all federally assisted newly 
constructed housing. While leaving in place the existing requirement 
for extensive access in 5 percent, IHDA provides for fewer but 
important accessible features in the remaining 95 percent. This would 
ensure that all housing built with taxpayer monies enables a person 
with a physical disability to enter a home and use the bathroom on the 
main level. We estimate the cost of compliance to be less than $100 per 
home for homes built on concrete slabs and less than $600 per home for 
homes with a basement or crawl space.
    We urge the Senate to take up similar legislation, and to act 
quickly to address this important issue.
    Millions of taxpayer dollars have already been spent on efforts to 
stabilize the housing market. Many millions more in spending is being 
considered to strengthen and enhance housing opportunities for people 
of modest means. We ask Congress to ensure that all Americans can have 
access to all federally assisted housing.
                                 ______
                                 
   PREPARED STATEMENT OF CASSIE JAMES HOLDSWORTH ON BEHALF OF ADAPT 
         HOUSING POLICY COMMITTEE--EDITED BY MADELEINE McMAHON
    I am submitting this testimony on behalf of ADAPT and it's Housing 
Policy Committee. ADAPT is a nationwide grassroots organization of 
people with disabilities fighting to end the institutional bias that 
currently traps hundreds of thousands of elderly and people with 
disabilities in unwanted nursing home placements. ADAPT has been at the 
frontlines, advocating for accessible, affordable, integrated housing 
for ourselves and people trying to get out of institutions.
    We are people with disabilities. We are involved in transitioning 
people out of institutions. Many of us are advocates; others provide 
Medicaid waiver services as well as attendant services. In all of these 
efforts, it has been clear that the lack of accessible, affordable, 
integrated housing is a critical barrier that prevents our people from 
living the lives they want.
    ADAPT has been advocating for decades for integration of 811 
funding. Too much of 811's limited funding continues to go to group 
homes and other congregate settings. People are forced into these types 
of settings, with little control over their lives, simply because this 
is the type of housing that our funding is building. Given their 
preference, most people with disabilities would rather live in an 
integrated apartment, which is accessible and affordable, with 
neighbors that may or may not have a disability. We applaud efforts to 
refocus 811 to more integrated housing and away from congregate 
facilities.
    811 is in need of the reform S. 1481 suggests. People with 
disabilities do not want, and should not be forced, to live in 
segregated settings. The age of ``crip ghettos'' needs to end. 811 must 
be improved to allow people with any type of disability to live 
alongside their nondisabled peers.
    One area of concern we do have with S. 1481 is that Tenant 
Selection (D) Limitation of Occupancy (on p. 4) could be manipulated by 
providers. In 2009 disabled people face the biggest housing crisis 
ever. Years ago we were kicked out of 202 housing. No other population 
would withstand the propaganda and back room deals that led to the 
demise of the only stock of housing we had. Although allowing some 811 
funds to be used for vouchers helped, it was never enough to make up 
the loss of the 202 units which are now elderly only. ADAPT feels that 
giving the providers and landlords leeway to give a preference based on 
service need they themselves identify creates a slippery slope. We are 
viewed by some providers as a commodity and this kind of criteria, 
after all, is the vehicle that allows this to happen. When a consumer 
with a physical or cognitive disability (exercising self-determination 
or a desire to live as independently as possible for that individual) 
refuses a service the provider wants them to use and then their 
application for housing is turned down, that person could end up in a 
shelter or nursing home simply because they refused to play ``cash cow 
for the day.''
    We are the largest minority. We are people of every race, religion, 
gender, orientation, and age. If this systematic discrimination were 
brought to a swift end, people with disabilities would interact with 
nondisabled people in every setting. Let's face it, understanding is 
the only thing that can stop the discrimination and hate crimes that 
affect our community. And you thought you were just doing a housing 
bill.
    I applaud that you at least make the provider get permission to 
have such a preference. I suggest another preference that would be 
humane and less likely abused: that is that 10 percent of the units 
have a preference for people with disabilities who are in nursing homes 
or shelters regardless of a need for supportive services and that 
leaves at least 15 percent of the units for people who may or may not 
need the voluntary supports and services.
    RE: page 3 (1.) Use Restrictions (A) Term--It is good that capital 
advance is provided under subsection (d) (1) shall create housing 
targeted to low income people with disabilities and operate for no less 
than 40 years. This low income group of disabled people have found it 
very difficult to access affordable, accessible, integrated housing, 
due to the lack of construction or the gap in subsidy. It was like 
looking for a needle in a haystack and this will help to address those 
issues.
    (3) limitation on the use of funds. This goes a long way in helping 
eliminate this crisis and in time we may even have housing stock that 
meets the needs of People with Disabilities. I value the common sense 
approach of combining 811 with Existing Tax Credit buildings and 
allowing Home Funds, local, State, and Federal dollars and allowing 
Section 8 subsidy to fill the gap thus increasing the development 
outcomes to finally tackle this horrific shortage of available, 
affordable, accessible and integrated housing. This housing crisis may 
finally come to an end.
    We are pleased that S. 1481 sets out to require a minimum 
percentage of 811 funding be spent in integrated settings. We are 
pleased that Multifamily Projects limits to 25 percent the total number 
of units in a project funded with 811 funds. ADAPT strongly encourages 
that the percentage of 811 funding to be used in a project be no less 
than 25 percent.
    (4) Multifamily project--(A) Limitation (d)(1) Presently I do not 
see 25 percent of the aggregate as a problem especially since you can 
now develop up to 5,000 units in a year vs. less than 900 units in 
years past. S. 1481 creates real integration for us and gets rid of the 
``crip ghetto'' formula that has led to our isolation in the community.
    (B) Exception subsection (A)--ADAPT also supports S. 1481's 
elimination of the Secretary of HUD's ability to waive the maximum 
number of occupants of group homes and ``independent living 
facilities.'' We must add that this use of the term ``independent 
living facilities'' is an insult to an over 30-year-old movement by and 
for people with disabilities, a movement that promotes integration and 
rights for people with disabilities, not institutional living--as it is 
used here. Although we never support the building of such segregated 
facilities as group homes and other segregated, congregate living 
facilities, while the practice continues, it must be held in check and 
moved toward progressively smaller segregated facilities, and 
eventually into 100 percent integrated units. ADAPT strongly urges that 
the number of occupants in group homes should not exceed 4 individuals.
MFP--Money Follows the Person
    ADAPT is particularly concerned because of the need for timely 
action. Presently, the Centers for Medicare and Medicaid Services (CMS) 
is funding the Money Follows the Person (MFP) Demonstration program in 
over 30 States. MFP allows people to get the services they need to live 
in the community and move out of institutions. For MFP to be 
successful, all these thousands of individuals need housing. They don't 
want to move from a big institution to a smaller one; they want to move 
to their own home or apartment. These people do not want to live in 
group homes, board and care homes, or have services forced on them. 
They deserve to make their own decisions. They deserve to have real 
choices in their lives, as you do in yours. And, according to the 
Americans With Disabilities Act and the U.S. Supreme Court's Olmstead 
decision, they have a right to live in the most integrated setting. 
Section 811 and the Frank Melville Supportive Housing Investment Act of 
2009 need to meet the needs of the elderly and disabled community. The 
integrated 811 model would help make the MFP demonstration project a 
success.
    We implore the Subcommittee to understand that the other witnesses 
called to testify DO NOT speak for people with disabilities. Though 
they may have good intentions, they are not people with disabilities 
and they do not fully comprehend our needs and desires. Think about it, 
would your landlord be able to fully represent you? Nothing About Us 
Without Us! Please remember ADAPT when you hold your next hearing. We 
have our own voice.
    Many disabled people want to live in the neighborhoods of their 
family and friends. Part of the reason there is so much 
misunderstanding about disability and people with disabilities is that 
so many of us are forced into segregated environments from childhood. 
Nondisabled children and adults are denied the opportunity to know 
people with disabilities. Without this opportunity, we all suffer.
    Every American has the right to live in the heart of their 
community. If we end institutionalization, but do not stop segregation, 
my people will still be cash cows for providers who continue to speak 
for us but fail to tell you what we really want. Please give us real 
choices that will help us out of this housing crisis. People young and 
old are dreaming of a chance to live in the community with accessible, 
affordable, integrated housing. They want a chance to develop 
relationships with people of every age and walk of life.
    Hundreds of elderly and people with disabilites wanted to be at 
your hearing, but with only 2 days notice, it was not possible. Even if 
we had a week's notice our community needs time to get attendants to 
travel and figure out how to budget for travel. We do not have high 
paid lobbyists in Washington, DC. We have only our own voices, but 
these are loud voices!
    ADAPT and the hundreds of thousands of people trapped in nursing 
facilities will not give up this fight. On Behalf of ADAPT, help us 
free our people and stop the segregation. You have the power to make a 
difference and help people access their dream to live in the community 
in accessible, affordable, integrated housing.
    Page 5 (2) Tenant Protections (A) Lease: (B) Termination of Tenancy 
(i) and (ii)--Tenant Protections for the most part these protections 
seem like they were written with good intentions to avoid any 
discriminatory action on the part of the provider or landlord. ADAPT 
recommends a 30 day notice to be written by the tenant if they want to 
get out of the lease. Disabled people are just like everyone else. They 
may find this living situation does not suit them, they may want a 
support system in another area, or maybe they are going to purchase a 
house or get married; regardless, they should have the right to get out 
of a lease.
    ( C) Voluntary Participation in Services--Recommendation 
``Participation in service is not required.'' This is stronger and less 
likely to be abused. Refer to page 2 of this testimony. (6) 
Applicability of Home Program Cost Limitations--

  (A)  In General
  (B)  Waivers--
      (i) (ii)
        (I)
        (II)
        (III) (g) (1) (k) (h) (1)

    ADAPT understands a cap per unit for the sake of business planning 
and that shall not effect our 504 rights as alluded to on page (5) 
under (B) waivers (I), (II), (III).
    Repeal of Authority To Waiver Size Limitation--ADAPT thinks this is 
a great start. Providers will no longer use the Secretary's waiver to 
fill beds, and continue the status quo. It begins to chip away at the 
systematic segregation. Still ADAPT envisions a day when we go even 
further.
    Recommendation 1: that group homes are limited to (4) residents. We 
believe that it creates a more respectful environment, helps to prevent 
physical or mental abuse to residents, and would be easier to monitor 
504 and ADA compliance along with any service requirements or CMS 
regulations, (when waiver services are on-site). Most of all, it allows 
self-determination and hopefully tenant rights to establish rules and 
discuss problems that could emerge whenever unrelated people live 
together.
    Recommendation 2: Independent Living Facility is a term for Nursing 
Home or other institutional ownership. People do not live in 
Independent Living Centers which are run and controlled by people with 
disabilities! What we are talking about here are ICF's or Nursing Homes 
or State facilities, institutions that may have (24) residents living 
there are not IL's.
    Sec. 4. Project Rental Assistance Competitive Demonstration 
Program.
    (1) Authority--allowing project rental assistance for 60 months 
under demonstration project and the ability to renew goes along way in 
making these projects costs effective and filling the $300.00 or more 
gap in new and existing Tax Credit Buildings. Allowing the Section 8 
subsidy to 811 and combining other funds is also very pro-active. This 
formula is exactly what we asked Secretary Alfonso Jackson to encourage 
several years ago. We also wanted to hold a conference to let 
developers know we could combine funding for housing, but this 
legislation has taken us even further than we imagined by bringing the 
cost to a point where we could develop 5,000 per year and eventually 
tackle the shortage of housing for people with disabilities.
    (2) (B) 25 percent of the aggregate again assists in creating real 
integration for people with a disability, although we requested 50 
percent last year ADAPT had not envisioned the changes that will allow 
5,000 additional units in a year: 2,500 (2009); 5,000 (2010); 5,000 
(2011); and 5,000 (2012)!
    (C) Prohibition of Capital Advances. If the 811 has subsidy 
assistance provided under the demonstration project they most likely 
will not need a capital advance. Smaller nonprofit developers may need 
capital advances to build the housing we don't want to discourage such 
developers as they are often the real innovators. This Demonstration 
project along with combining funding is brilliant what ever took us so 
long in getting here! 2012 will bring a total of 17,500 units to people 
who have been waiting years and if we give a preference to people with 
disabilities in institutions at 10 percent imagine the impact for 
people forgotten and hidden behind walls. ADAPT's only concern is that 
this program continue beyond 2012 and ensures that we as a community 
will never again have to face a housing shortage like the one we have 
now.
    (D)Eligible Population--This legislation does the right thing by 
targeting people with disabilities who have the lowest incomes. These 
are the people with disabilities who have been forced into institutions 
simply because they could not access housing! It is only right that 
they be the population that benefits from the 811 combined funding and 
the demonstration program.
    Page 8 (3) (A)--Again this goes further than 811 ever has to 
promote integration for people with long term disabilities and 
recognizes our right to housing and community based services. ADAPT was 
the first group to demand a partnership between CMS and HUD. Again and 
again we have requested that housing providers work with Community 
Based Agencies, especially ones run and controlled by People with 
Disabilities or agencies that transition people out of Institutions and 
provide services so we don't go into institutions. Modernization of 811 
creates resources that will lead us to real community housing options. 
However, we recommend that we house people regardless of diagnosis. All 
people with disabilities face discrimination in housing and perceive a 
shortage of housing. People with disabilities are expected to accept 
any housing that comes their way and be grateful. People with 
Disabilities are often unfairly evicted. So whether it is mental 
health, developmental disability, physical disability, or sensory 
disability, we are all impacted. Most people with disabilities need 
some supports but often they would rather get them from someone outside 
of their housing or be sure that that service is really voluntary and 
not forced on them. Some have families and others may live alone or 
with a friend but all are crying out for an easier road to affordable, 
accessible, integrated housing.
    Cross Disability is the way to go. Allowing providers to give 
preferences by service needs could still be dangerous or 
discriminatory. If services are truly voluntary, that preference is not 
needed. Again, we suggest a preference be given to disabled people 
living in institutions or other restricted environments such as 
shelters regardless of service needs. Voluntary services could be very 
creative. I value Senator Dodd's testimony and thought: ``That guy gets 
it!'' He suggested that transportation be a supportive service. 
Although we have the right to public transportation, as we face 
problems related to our health or aging with a disability, a service 
like that might help us remain active in the community or even stay 
employed. Of course, we should always build housing near public 
transportation, but some rural areas have no accessible transportation 
and maybe an accessible van could be that voluntary service, the same 
as homemaker service or assistance with meal preparation. As long as 
these services are voluntary and not intrusive. I would like to thank 
Beth Cooper for her patience and advocacy in helping us be able to 
submit our testimony. Efforts like this hearing and passing proactive 
legislation like Modernizing 811 are the very tools to free our people. 
As long as you develop policy with us that is about us, you will find 
no one will fight harder for these changes. For the sake of emphasis I 
want to say: ``Nothing About Us Without Us.'' When policy is developed 
for people but not with people it often does not work. Thank you for 
working with us.
