[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]



 
                    LEGISLATIVE PROPOSALS TO REFORM
                   THE HOUSING CHOICE VOUCHER PROGRAM

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

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                         INSURANCE, HOUSING AND
                         COMMUNITY OPPORTUNITY

                                 OF THE

                    COMMITTEE ON FINANCIAL SERVICES

                     U.S. HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                             JUNE 23, 2011

                               __________

       Printed for the use of the Committee on Financial Services

                           Serial No. 112-40




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                 HOUSE COMMITTEE ON FINANCIAL SERVICES

                   SPENCER BACHUS, Alabama, Chairman

JEB HENSARLING, Texas, Vice          BARNEY FRANK, Massachusetts, 
    Chairman                             Ranking Member
PETER T. KING, New York              MAXINE WATERS, California
EDWARD R. ROYCE, California          CAROLYN B. MALONEY, New York
FRANK D. LUCAS, Oklahoma             LUIS V. GUTIERREZ, Illinois
RON PAUL, Texas                      NYDIA M. VELAZQUEZ, New York
DONALD A. MANZULLO, Illinois         MELVIN L. WATT, North Carolina
WALTER B. JONES, North Carolina      GARY L. ACKERMAN, New York
JUDY BIGGERT, Illinois               BRAD SHERMAN, California
GARY G. MILLER, California           GREGORY W. MEEKS, New York
SHELLEY MOORE CAPITO, West Virginia  MICHAEL E. CAPUANO, Massachusetts
SCOTT GARRETT, New Jersey            RUBEN HINOJOSA, Texas
RANDY NEUGEBAUER, Texas              WM. LACY CLAY, Missouri
PATRICK T. McHENRY, North Carolina   CAROLYN McCARTHY, New York
JOHN CAMPBELL, California            JOE BACA, California
MICHELE BACHMANN, Minnesota          STEPHEN F. LYNCH, Massachusetts
THADDEUS G. McCOTTER, Michigan       BRAD MILLER, North Carolina
KEVIN McCARTHY, California           DAVID SCOTT, Georgia
STEVAN PEARCE, New Mexico            AL GREEN, Texas
BILL POSEY, Florida                  EMANUEL CLEAVER, Missouri
MICHAEL G. FITZPATRICK,              GWEN MOORE, Wisconsin
    Pennsylvania                     KEITH ELLISON, Minnesota
LYNN A. WESTMORELAND, Georgia        ED PERLMUTTER, Colorado
BLAINE LUETKEMEYER, Missouri         JOE DONNELLY, Indiana
BILL HUIZENGA, Michigan              ANDRE CARSON, Indiana
SEAN P. DUFFY, Wisconsin             JAMES A. HIMES, Connecticut
NAN A. S. HAYWORTH, New York         GARY C. PETERS, Michigan
JAMES B. RENACCI, Ohio               JOHN C. CARNEY, Jr., Delaware
ROBERT HURT, Virginia
ROBERT J. DOLD, Illinois
DAVID SCHWEIKERT, Arizona
MICHAEL G. GRIMM, New York
FRANCISCO ``QUICO'' CANSECO, Texas
STEVE STIVERS, Ohio
STEPHEN LEE FINCHER, Tennessee

                   Larry C. Lavender, Chief of Staff
      Subcommittee on Insurance, Housing and Community Opportunity

                    JUDY BIGGERT, Illinois, Chairman

ROBERT HURT, Virginia, Vice          LUIS V. GUTIERREZ, Illinois, 
    Chairman                             Ranking Member
GARY G. MILLER, California           MAXINE WATERS, California
SHELLEY MOORE CAPITO, West Virginia  NYDIA M. VELAZQUEZ, New York
SCOTT GARRETT, New Jersey            EMANUEL CLEAVER, Missouri
PATRICK T. McHENRY, North Carolina   WM. LACY CLAY, Missouri
LYNN A. WESTMORELAND, Georgia        MELVIN L. WATT, North Carolina
SEAN P. DUFFY, Wisconsin             BRAD SHERMAN, California
ROBERT J. DOLD, Illinois             MICHAEL E. CAPUANO, Massachusetts
STEVE STIVERS, Ohio


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on:
    June 23, 2011................................................     1
Appendix:
    June 23, 2011................................................    39

                               WITNESSES
                        Thursday, June 23, 2011

Bazzie, Tony G., Executive Director, Raleigh County Housing 
  Authority, Beckley, West Virginia, on behalf of the National 
  Association of Housing and Redevelopment Officials (NAHRO).....    15
Couch, Linda, Senior Vice President for Policy, The National Low 
  Income Housing Coalition (NLIHC), Washington, D.C..............    17
Graham, Roberta, Vice President, Housing Choice Voucher Services, 
  Quadel Consulting, Washington, D.C.............................    19
Gunsolley, Tory, President/Chief Executive Officer, Housing 
  Authority of the City of Houston, Texas, on behalf of the 
  Council of Large Public Housing Authorities (CLPHA)............    21
Henriquez, Hon. Sandra B., Assistant Secretary, Office of Public 
  and Indian Housing, U.S. Department of Housing and Urban 
  Development....................................................     4
Hiebert, P. Curtis, Chief Executive Officer, Keene, New Hampshire 
  Housing Authority, on behalf of the Public Housing Authorities 
  Directors Association (PHADA)..................................    22
Sanchez, Alex, Executive Director, Housing Authority of the 
  County of Santa Clara, California, on behalf of the National 
  Leased Housing Association (NLHA)..............................    24
Sard, Barbara, Vice President for Housing Policy, Center on 
  Budget and Policy Priorities, Washington, D.C..................    26

                                APPENDIX

Prepared statements:
    Bazzie, Tony G...............................................    40
    Couch, Linda.................................................    53
    Graham, Roberta..............................................    62
    Gunsolley, Tory..............................................    73
    Henriquez, Hon. Sandra B.....................................    80
    Hiebert, P. Curtis...........................................    86
    Sanchez, Alex,...............................................    96
    Sard, Barbara................................................   103

              Additional Material Submitted for the Record

Biggert, Hon. Judy:
    Written statement of the Housing Authority of the County of 
      San Bernardino.............................................   120
    Written statement of the American Association of Service 
      Coordinators and the National Housing Conference...........   124
    Written statement of the Chicago Rehab Network...............   126
    Written statement of the Council for Affordable and Rural 
      Housing, et al.............................................   127
    Written statement of the National Affordable Housing 
      Management Association.....................................   129
    Written statement of the National Multi Housing Council and 
      the National Apartment Association.........................   134
    Written statement of Stewards of Affordable Housing for the 
      Future.....................................................   136
Bazzie, Tony:
    Additional information provided for the record...............   138


                    LEGISLATIVE PROPOSALS TO REFORM
                   THE HOUSING CHOICE VOUCHER PROGRAM

                              ----------                              


                        Thursday, June 23, 2011

             U.S. House of Representatives,
                 Subcommittee on Insurance, Housing
                         and Community Opportunity,
                           Committee on Financial Services,
                                                   Washington, D.C.
    The subcommittee met, pursuant to notice, at 9:31 a.m., in 
room 2128, Rayburn House Office Building, Hon. Judy Biggert 
[chairwoman of the subcommittee] presiding.
    Members present: Representatives Biggert, Miller of 
California, Capito, Duffy; Gutierrez, Waters, Cleaver, Sherman, 
and Capuano.
    Also present: Representative Green.
    Chairwoman Biggert. This hearing of the Subcommittee on 
Insurance, Housing and Community Opportunity of the Committee 
on Financial Services will come to order.
    We will begin with our opening statements. Without 
objection, all members' opening statements will be made a part 
of the record. And I recognize myself for such time as I may 
consume.
    Good morning, and welcome to today's hearing to examine 
legislative proposals to reform the Housing Choice Voucher 
Program.
    Section 8 is an important program created in the 1970s to 
provide rental assistance as an alternative to public housing 
for low-income families, especially veterans, people with 
disabilities, the elderly, and single parents. It is the 
Nation's largest low-income housing assistance program, 
providing assistance to around two million families.
    Section 8 vouchers are tenant-based as well as project-
based subsidies that low-income families use in the private 
market to lower their rental cost to 30 percent of their 
income. However, during the past decade, the program's costs 
have grown by almost 80 percent and consume over 61 percent of 
HUD's budget.
    In 2002, Section 8 appropriations were $15.6 billion. In 
Fiscal Year 2011, they amounted to $27.6 billion. That rate of 
growth is unsustainable.
    The legislative discussion draft that we will examine today 
to address these escalating costs reduces bureaucratic 
inefficiencies, burdens, and requirements in the Section 8 
Program so Federal resources can be more effectively used to 
help those most in need. It also enhances the Family Self-
Sufficiency Program so more families can gain the skills they 
need to transition from government assistance to independence.
    I would appreciate hearing from today's witnesses about the 
Moving to Work Program (MTW) and how to address the long 
waiting list. I look forward to our discussions about ways to 
cut red tape in Section 8, reduce costs, and better meet the 
needs of struggling families. These are especially important 
goals given the limited Federal resources at hand.
    I look forward to working with my colleagues on both sides 
of the aisle to achieve commonsense reforms, and achieve the 
Section 8 program for local public housing authorities, housing 
owners and managers, taxpayers and families in need.
    With that, I recognize Ranking Member Gutierrez for an 
opening statement.
    Mr. Gutierrez. Good morning. And I would like to thank our 
witnesses for being here today. We are here to discuss the 
Housing Choice Voucher Program and the discussion draft 
circulated by the Majority of the Section 8 Savings Act, 
otherwise known as SESA.
    I commend the chairwoman for raising this very important 
topic, and for placing Section 8 reform on the subcommittee's 
agenda. It is unfortunate we have been unable to get Section 8 
reform passed in previous sessions of Congress, although we 
have come close on several occasions. I wish the lady Godspeed 
in getting it done this year.
    I am a strong supporter of Section 8 housing assistance and 
focusing our resources on what we can do to expand the 
availability of affordable housing, and by doing so expand the 
avenues available to families to enter the middle class and 
build strong, stable communities.
    Making safe, clean, affordable housing an obtainable goal 
for more Americans is not a threat to our economy. It is 
actually the backbone of our economy. So I welcome the 
discussion on how to make affordable housing programs better 
and stronger.
    I think that we can agree that is a starting point we can 
build upon in the coming months. In the spirit of 
collaboration, Madam Chairwoman, I would like to see the 
subcommittee work together on this, both to make sure that we 
can come to an agreement that properly addresses the issue and 
an agreement that most effectively serves those in need of a 
place to call home.
    I would like to share a little background of myself to put 
in context the issue of affordable housing availability to 
demonstrate the importance of HUD's rental assistance programs.
    A little known fact about me is that I started grassroots 
organizing community advocacy in affordable housing 
opportunities in the City of Chicago in the 1980s. Through my 
work with Bickerdike Redevelopment Corporation, I experienced 
firsthand the wealth of contributions affordable housing rental 
units offered to extremely low-income communities where 
families were earning significantly less than 30 percent of the 
area's medium income.
    I worked to bridge the disparity that existed in the lack 
of affordable, safe, and decent housing options to people with 
disabilities, senior citizens, homeless people, and severely 
low-income families. Today, I see these programs continuing to 
work for my constituents back home, especially during these 
very tough economic times.
    These programs are critical now more than ever. We must be 
diligent in our effort in Congress to reform voucher 
legislation so that we can continue to provide this very 
important assistance.
    I look forward to the testimonies and comments on this 
matter. And I thank the chairwoman.
    Chairwoman Biggert. The gentleman yields back.
    The gentleman from California, Mr. Miller, is recognized 
for 4 minutes.
    Mr. Miller of California. I want to thank Chairwoman 
Biggert for convening this hearing today on Section 8, 
something we have been working on for quite a few years.
    Our subcommittee has been examining this issue for quite 
some time. It is important to move forward with legislation--
administrative burdens on PHA so they can make sure low-income 
residents have safe, decent, and affordable housing.
    There is no question that we are asking the PHAs to do more 
with less Federal resources, particularly at this time of 
significant budget constraints. It is important to find a way 
to make programmatic changes that will increase efficiencies 
without impacting quality.
    The bill before us today, which reduces administrative 
burdens with respect to inspections of units, simplifies 
procedures of determining tenant contributions, reduces the 
recertification of certain residents, and targets those most in 
need, to save taxpayers $1 billion over 5 years.
    The bill takes an approach that I have supported. Rather 
than a one-size-fits-all approach and bureaucratic red tape, we 
should give the PHAs the flexibility to meet the unique 
challenges they face while making them accountable for results 
for the residents they serve.
    While this bill is an excellent step to alleviate the 
administrative burdens on PHAs while maintaining access to 
affordable housing, I believe it misses a key tool we already 
have in existence to further that important goal.
    Specifically, I believe any bill our subcommittee passes 
with Section 8 reform must include the expansion of the Moving 
to Work Program. This Program allows PHAs to have the 
flexibility they need to be innovative in servicing residents, 
increasing homeownership opportunity, and helping residents 
become employed and self-sufficient.
    HUD recently released a report about the program and found 
that the agencies that had the Moving to Work designation are 
reducing cost without negatively impacting the residents, and 
encouraging self-sufficiency through rent reform and services.
    There are currently only 35 PHAs in the country with Move 
to Work designations. This is 1 percent of all the housing 
authorities in the United States. I have long advocated for 
increasing this number so that more PHAs may have the 
opportunity to design strategies that work in their 
communities.
    In my district, the Housing Authority of the County of San 
Bernardino (HACSB) has moved the Moving Work Program to good 
status. Because they have MTW, HACSB has been able to implement 
a number of the reforms contemplated in the discussion draft we 
are considering today. They have had a positive result with the 
community.
    In addition to those things contemplated in the discussion 
draft, the MTW status has allowed HACSB to promote self-
sufficiency among assisted families, achieve programmatic 
efficiencies, reduce costs, and increase housing choices for 
low-income households.
    I would like to submit for the record testimony of Susan 
Benner, executive director of the Housing Authority of San 
Bernardino County, which outlines how flexibility has helped 
HACSB better serve their community--
    Chairwoman Biggert. Without objection, it is so ordered.
    Mr. Miller of California. The PHA should be allowed to 
become MTW. And I hope that the chairwoman will work with me as 
this legislation moves forward to include the expansion of the 
MTW program in the Section 8 legislation.
    I do look forward to hearing the testimony today from our 
witness. I know you are very well-informed, and I have quite a 
few questions I would like to ask you.
    And I yield back my time.
    Chairwoman Biggert. The gentleman yields back.
    We will now turn to our first panel, consisting of the 
Honorable Sandra B. Henriquez, Assistant Secretary, Office of 
Public and Indian Housing, U.S. Department of Housing and Urban 
Development.
    Welcome, Assistant Secretary, and as usual, you will have 5 
minutes for your opening statement, and then we will ask you 
questions. You may proceed.

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

    Ms. Henriquez. Thank you, Chairwoman Biggert, Ranking 
Member Gutierrez, and members of the subcommittee for inviting 
me to testify this morning on the Section 8 Savings Act 
discussion draft.
    As you know HUD's three major rental programs--the Housing 
Choice Voucher Program, the Project-Based Section 8 Program, 
and the Public Housing Program--serve over four million low-
income families nationwide. The annual median income of these 
families in HUD-assisted housing is $10,200 per year, and over 
half of those individuals or families are seniors or disabled 
individuals.
    HUD is committed to ensuring that our housing assistance 
programs become more efficient, cost-effective, and easier to 
operate for both the housing providers and the families that we 
serve. For these reasons, several changes were included in the 
Department's Fiscal Year 2012 budget request.
    The changes we proposed would do the following: modify the 
frequency of recertification of income for families on fixed 
incomes; revise the elderly and disabled standard deductions to 
make it easier to calculate rent; create a definition of 
extremely low income to increase access to housing assistance 
programs for working poor families in rural areas; authorize 
housing authorities to approve rents up to 120 percent of the 
fair market rent for families with disabilities instead of 
waiting for HUD approval; and allow HUD to undertake a rent 
policy demonstration in order to test various rent structures 
to promote self-sufficiency, to increase income, and to reduce 
administrative burdens on public housing authorities and 
residents.
    Taken together, these changes would save over $1 billion 
over the next 5 years in our 3 largest rental assistance 
programs. And many of these provisions, as you know, are 
included in the draft of SESA.
    I would like to briefly discuss some of these provisions 
and additional modifications to SESA that would strengthen the 
legislation and ensure that our programs are working 
effectively for housing authorities, multifamily owners, and 
for our residents. SESA includes many provisions that will 
streamline the administrative burden for housing authorities 
and landlords while improving access to safe, decent, and 
affordable housing.
    For example, the bill allows for biannual housing 
inspections instead of annual ones, and allows housing 
authorities to use inspection certification from other State or 
Federal housing assistance programs to meet inspection 
requirements. These changes will provide housing authorities 
with the flexibility to concentrate their inspection resources 
on those units that are in poorer condition.
    In addition, SESA would reform the current income and rent 
calculation system by allowing housing authorities to defer 
their income reexamination for families with fixed incomes for 
up to 3 years.
    The draft also allows housing authorities to utilize income 
data collected from other Federal means-tested programs to 
determine a family's income. This will encourage information 
sharing between housing authorities and other Federal and State 
assistance providers, and reduce staff time in determining 
eligibility and income.
    It is important to note that unit inspections, income 
verification, and tenant eligibility are some of the most time-
consuming and costly elements of running the Housing Choice 
Voucher Program, which is currently conducting an in-depth time 
and motion study to determine the cost necessary to run an HCV 
program effectively and efficiently.
    The results of this study will not only provide 
justification to establish a viable and supported fee formula, 
but will allow HUD to analyze all aspects of the voucher 
administration program in order to further reduce and simplify 
administrative responsibilities.
    While the results from the study will not be available for 
some time, it is clear that the streamlining provisions in SESA 
for inspections and income determinations will reduce 
administrative burden and allow housing authorities to direct 
their resources to better serve families.
    While it is important for us to get a better picture of the 
cost of running this program, it is also important that funding 
for vouchers remains stable and consistent. SESA establishes a 
minimum reserve amount at a housing authority that they would 
hold for their voucher program at 6 percent of funding.
    And as a way to ensure adequate funding for existing 
vouchers, HUD has proposed language that would allow us to 
offset funding against any reserves and then reallocate excess 
amount to high-performing PHAs. Combined with the minimum 
reserve provision in SESA, offsetting reallocation authority 
will help to ensure that housing authorities do not build up 
excess reserves, and will assist additional families.
    I want to quickly touch on the provisions in the draft bill 
in the Family Self-Sufficiency Program. The Family Self-
Sufficiency Program is available to our tenants in public 
housing and our voucher program, but not to tenants in our 
multifamily properties.
    SESA expands the program to these tenants, and in addition, 
the bill proposes to merge public housing and the HCV Family 
Self-Sufficiency Program, cutting back on duplicative 
administrative requirements for housing authorities that 
operate both programs.
    One additional change would streamline administration of 
these programs to create a single funding stream for self-
sufficiency service coordination.
    Chairwoman Biggert, you have been a strong supporter of the 
Family Self-Sufficiency Program, and I want to commend you for 
your leadership on these programs. You recognize just how 
important these programs are in helping families become more 
self-sufficient, decreasing the need for rental assistance.
    Lastly, in order for HUD and PHAs to be effective and 
successful housing providers, the right tools need to be in 
place to ensure that we can respond to the needs of local 
communities. SESA includes language that would allow housing 
authorities to provide Project-Based Voucher contracts for 20 
years instead of 15 years. This is an important housing 
preservation tool.
    We believe that this provision, in addition to other 
changes in the Project-Based Voucher Program, will enable 
housing officials to increase access to housing opportunities 
based on the need in their communities, and promote the 
development of mixed-income housing while reducing or 
eliminating administrative red tape in the program. HUD is 
committed to ensuring that our programs can operate in a manner 
that works well for our housing providers, for multifamily 
owners, for our housing authorities, and for our residents.
    We believe that SESA will help reduce administrative 
burdens to those operators and to residents, to expand self-
sufficiency opportunities for families we serve. And I look 
forward to answering any of your questions. Thank you.
    [The prepared statement of Assistant Secretary Henriquez 
can be found on page 80 of the appendix.]
    Chairwoman Biggert. Thank you very much for your testimony, 
and now we will proceed with our questions. We will try and 
limit ourselves to 5 minutes each. And I will start with my 5 
minutes.
    Let me turn to the Family Self-Sufficiency Program. First 
of all, do you think it is an effective program?
    Ms. Henriquez. Yes, I do.
    Chairwoman Biggert. Okay.
    Ms. Henriquez. I think it needs to be expanded and to 
increase its effectiveness.
    Chairwoman Biggert. And do you think then that it should be 
expanded to programs that it has not included right now?
    Ms. Henriquez. Yes, I do, Chairwoman Biggert. There are 
about 1,000 housing authorities that run both programs, have 
self-sufficiency programs for its voucher and public housing 
residents.
    We want to expand it to our multifamily residents as well. 
And we really want to encourage more housing authorities that 
run these programs to increase--
    Chairwoman Biggert. I know that when Ms. Waters was 
chairwoman of this subcommittee and I was the ranking member, 
we went down to New Orleans after Hurricane Katrina. And there 
was a public housing development there that the residents 
wanted to go back into.
    And I think that most of them had been there so, so long 
that it would have been nice to have the self-sufficiency 
stuff. That maybe they could have had the coordinator to help 
them move on. It seemed like it was just a stall of time there 
that nothing had happened.
    But how do we address the long waiting list for such 
programs?
    Ms. Henriquez. I think the issue is our long waiting list 
for people to move into public housing agencies, as well as 
both their public housing program and their voucher program. 
Once people have moved into those programs they are--those 
self-sufficiency programs are available to them. Again, we 
would like to have the expansion to more housing authorities 
and of course the multifamily portfolio as well.
    The issue of the wait on waiting lists is really an issue 
of demand and supply and demand. And one of the reasons we are 
very anxious to make sure we have a consistent and stable 
funding source for the voucher program is so that more families 
can avail themselves of affordable housing that is needed, 
number one, and then be able to push the paid-in programs like 
the FSS.
    Chairwoman Biggert. When there is a long waiting list, and 
you know it comes up that somebody is next in line and 
eligible, what has happened to them? Let us say, how long is 
the waiting list? And what happens to the people who are trying 
to be in the program?
    Ms. Henriquez. That is a good question. Having run a 
housing authority, I can tell you that sometimes in Boston we 
would have as many as 100 families a week applying, new 
families applying for the affordability offered by our program.
    Waiting lists and the length of those waiting lists varies 
by locality, by jurisdiction. It depends on what other 
affordable housing is available in that particular community or 
jurisdiction. It is not uncommon, however, for people to be on 
waiting lists for many years waiting for an opportunity for 
that affordability.
    And what happens in the meantime, I think, is people do 
struggle. I think people do try to figure out how to hold on 
for as long as possible. It may mean that families double up 
with other family members. It may mean that they are living in 
less than safe and decent circumstances while they are waiting.
    People will do a variety of things. And as you know, a 
number of people will fall out of shelter and into homelessness 
either in shelters or on the street, which is unfortunate.
    I do think that we find more and more people staying 
longer, which is why self-sufficiency is so important. And to 
get public housing and other affordable programs to be the 
platform they were originally meant to be, which is to move in, 
get financially stable, create a basket of services around 
families who then can build on their educational opportunities 
and their economic development and get into the workplace, 
stabilize their income and self-sufficiency.
    As they increase income, money is set aside so those 
families can take that once they have reached their goals and 
move to homeownership, move to a different sort of rental 
setting where the subsidy is not necessary, but really make 
decisions for themselves and their families where we all 
probably take them for granted. And I would say about 20 
percent of the participants in the FSS program currently do 
move onto homeownership.
    Chairwoman Biggert. Thank you, and just one other quick 
question.
    One provision that you suggest for inclusion in SESA is in 
your testimony is language authorizing the PHAs to approve 
rents up to 120 percent of the fair market value, rents for 
families with disabilities, instead of waiting for HUD HQ 
approval. Why is this important for the PHAs?
    Ms. Henriquez. I think it is more important for the 
residents who need that kind of flexibility and a much more 
timely decision on the SMRs and the waiver to go to 120 
percent. Otherwise you then--a disabled family would find a 
unit, negotiate the rent as best they could, would send it to 
the housing authority who then sends it into local HUD office, 
sends it into headquarters and then you might end up losing 
that unit.
    And so it is--to streamline this really means that at the 
local level, a quicker decision can facilitate that family 
being housed more quickly, more appropriately, and not losing 
any unit.
    Chairwoman Biggert. Thank you. I yield back my time I do 
not have.
    The gentleman from Illinois?
    Mr. Gutierrez. I would like to ask you about--I do not see 
anything in the discussion draft about utility payments. Could 
you talk a little bit about how you see us moving forward in 
terms of the inclusion? Because it seems to me that it is one 
of the largest parts of housing. That is, how do you pay to 
keep your apartment warm and keep the electricity on?
    Ms. Henriquez. I will tell you a little bit and then I 
would probably want to get back to you with more complete 
information. In the voucher program right now, a family's 
household rent is based on, as you know, their income. And if 
utilities are included or need to be paid separately rather, as 
it happens mostly in the voucher program--
    Mr. Gutierrez. I guess I just do not see it in the 
discussion draft, any mention of it. And it was in the bill 
last year. I am with--
    Ms. Henriquez. I do not see it there so I--we would be 
willing to work with the committee about getting some language 
in there, as long as it meets the parameters of the program.
    We have to figure out ways in which we need to do a better 
job in doing utility allowances and what those schedules mean 
and how to implement them more quickly for the families who 
need to pay the utility separately. But we would like to work 
with the committee about that.
    Mr. Gutierrez. Another area that I would just like to get 
your thoughts--so give me your thoughts on how you deal with 
keeping units safe from criminal elements.
    Ms. Henriquez. I am going to hearken back to my days as 
executive director of the Boston Housing Authority.
    First of all, every housing authority, a housing provider 
goes through a screening process, an application process with 
residents, applicants. They then are screened, background 
checks, checks just in terms of landlord/tenant references, 
etc., acceptance of mitigation--savings of mitigation should 
there have been a problem in the past which may affect one's 
ability to be a successful tenant and abide by the lease. Go 
through all of that process, then make an offer to a family to 
be housed.
    So that is one way of trying to make sure that going in, 
the resident community is a stable community. And that the 
neighborhood is not unduly influenced by negative effects of 
crime and things against public safety.
    I would go further to say, however, that when a public 
housing community or voucher residents are out in a 
neighborhood in a community, that it is incumbent upon the 
public safety officers in that jurisdiction to provide security 
as they would to any other non-subsidized resident in a 
neighborhood.
    Mr. Gutierrez. Because the time has gone out.
    And I guess that is the point I would like to be able to 
discuss further because it seems to me that as, especially in 
those units that--in multiple-unit complexes that the standard 
should be as high as necessary in order to keep the population 
as safe as possible. And that we should look at what is within 
the confines of the law in the private sector so that we are 
not using a lesser standard.
    Because I think your experience and my experience is 
probably the same, is that you have many more people who need 
and qualify for the units than the units that are available. 
And should not at some point we take into consideration just 
how it is that family has dealt with the challenges in raising 
young men and women, and within their own responsibility as 
American citizens and adults who want to join a program.
    What do you think about that?
    Ms. Henriquez. I would agree with you. And I do believe 
that housing providers provide an incredibly high bar for 
people to, in terms of eligibility and screening. I think that 
is appropriate.
    I think that is the standard that public housing providers 
and multifamily owners provide that is consistent in the 
marketplace with those who provide housing that is not 
subsidized. So there is that consistency.
    We all want good communities. We all want safe communities 
for residents, regardless of their economic levels. And housing 
authorities and other providers have the opportunity to use 
their funds both to enhance public safety--
    Mr. Gutierrez. And because of my time--so I want to work 
with you on that.
    Ms. Henriquez. I will look forward to that.
    Mr. Gutierrez. Here is the specific issue. Just because you 
are low and moderate income, you should not be kind of denied 
the same access to safety. When you get a housing unit, that 
housing unit should be considered within the management, the 
safety of the community of people. There should not be a lesser 
standard. Thank you.
    Ms. Henriquez. We agree.
    Chairwoman Biggert. The gentleman yields back.
    Mr. Gutierrez, this bill does actually address the utility 
data in Section 12. It has for HUD to collect and publish the 
utility consumption data to assist in the establishment of a 
tenant-paid utility allowance by public housing agencies. So 
you might take a look at that.
    The gentleman from California, Mr. Miller, is recognized 
for 5 minutes.
    Mr. Miller of California. You stated the percentage of 
individuals on Section 8 who move on to homeownership. What 
percentage was that?
    Ms. Henriquez. We calculated about 20 percent of people who 
have participated in FSS.
    Mr. Miller of California. Twenty percent are able to move 
onto homeownership. I know the problem I have always had with 
the program is that the time people have to wait to be serviced 
to get on the program. And that is an extensive length of time.
    Mr. Gutierrez talked about the safety issue, and the longer 
people are in that situation the more difficult their life can 
be in many ways. And that is why I have always supported the 
Move to Work Program because it has been proven to work.
    In fact, in August 2010, in a report on Moving to Work, HUD 
stated, ``Most MTW agencies have actually served substantially 
more families than they would have been able to serve without 
MTW by streamlining operations and using accumulated funds to 
administer new assisted housing units.''
    Do you agree or disagree with that statement?
    Ms. Henriquez. I do agree with that statement.
    Mr. Miller of California. So if we are really trying to 
help people who are in a very difficult situation, 
understanding the long waiting list of people who are in need 
of help. If we implemented these reforms, and in fact we have 
done that in my County of San Bernardino and it has proven very 
successful, do you think we can actually do a better job 
helping people who need assistance?
    Ms. Henriquez. I would answer your question this way. I do 
believe that the MTW program is unique. I think we need to do--
and I do believe what was written in the report.
    We are, however, doing an evaluation, having a contractor 
come in to evaluate the merits of the program to make sure that 
indeed all of the things that those MTW agencies are working 
towards and that they are delivering on are indeed. We have the 
facts, we have the data to support all that agency-by-agency.
    Mr. Miller of California. What benefits are you seeing in 
MTW that you have personally noticing do you think is working?
    Ms. Henriquez. I did not run an MTW agency, unfortunately--
    Mr. Miller of California. But you have seen the results--
    Ms. Henriquez. I would see, for example, in some agencies 
there has been the use of their funding to create sort of a 
mini voucher program for supportive services because they are 
really helping stabilize and transition housing for a number of 
individuals.
    Mr. Miller of California. Which is very important.
    Ms. Henriquez. Which is very important.
    I have seen that they have--the housing authorities have 
created baskets of services around families at particular 
developments so that they could move those families more 
quickly into self-sufficiency.
    Mr. Miller of California. So people are being moved off of 
the waiting list into a situation where they are bettering 
themselves. Then they are being moved onto a better life at the 
end.
    Do you believe that the MTW program helps PHAs do more with 
less? Because we are stuck in a situation in this government 
where we have less. Like it or not, there are just less 
available dollars out there.
    Ms. Henriquez. I can not equivocally say that I think that 
they do more with less. I think that they are able to do more 
with the money they currently have, and to reach more people 
more effectively in the community.
    I would be remiss if I did not suggest as well, though, 
that there are non-MTW agencies who also are able to do similar 
programs. They do not have quite the flexibility on the 
funding, but are able to use resources in a way and partner 
with other agencies at their local levels to effect a kind of 
change as well for the residents who live in those program 
areas.
    Mr. Miller of California. But the benefit I see in the 
flexibility is it allows the individual agencies to deal with 
the issues of their community, because not every community has 
identical issues. They vary dramatically.
    Some are critical of the Moving to Work Program. One 
concern, and I think you started to address it, is a lack of 
data captured in demonstration HUD has administered over the 
last 10 years. How would you change the demonstration to 
effectively assemble the needed data to understand whether 
Moving to Work is helping families move toward self-
sufficiency?
    Ms. Henriquez. There are a couple of things.
    One is as new agencies come into the program, we have been 
asking for them to identify in their proposal what changes they 
propose to take in this new flexibility, and then to give us 
baseline data; they must set up their own evaluation tools so 
we know going in what they look like in the current model. And 
as they move through and implement fully their MTW flexibility, 
what that data proves and shows us moving forward.
    So we have a body of evidence of what the changes are so 
that for both those who support MTW and those who do not, we 
will have consistent data to look at and make sure we are all 
on the right track. And if we need them to work together to 
figure this out in a better way, we can do that.
    Mr. Miller of California. So data is pretty much available, 
it is just a matter of accumulating it on how an agency 
effectively worked prior to and after the MTW implementation. 
Thank you.
    I yield back.
    Chairwoman Biggert. The gentleman yields back.
    The gentlelady from California, Ms. Waters, is recognized 
for 5 minutes.
    Ms. Waters. Thank you very much, Madam Chairwoman, for 
holding this hearing.
    Ms. Henriquez, as you know the public housing program is 
facing what I believe is a serious crisis. Public housing is 
underfunded, and as a result units are falling into disrepair, 
putting the health and safety of residents at risk.
    Demolishing units and providing vouchers is not the answer. 
I have long been a champion of one-for-one replacement as that 
is the only way to preserve units, protect families and ensure 
provision of much needed hard units of portable housing in our 
communities.
    Can you tell me what steps the Department has taken to 
address this crisis in public housing? And describe what 
resources you need in order to preserve this stock?
    Ms. Henriquez. Thank you, Ms. Waters, for the question. As 
you know, the public housing program is a 75-year-old program. 
That is an incredible investment on the Federal Government 
side, and preservation of that resource is critical. It is a 
resource for millions of families in the past, and should be 
preserved moving forward.
    I would say that while one-for-one replacement is important 
to have hard units, that does not always work in every 
community. And we need to figure out and have as many 
opportunities to make sure that we have affordable housing in a 
community based on the need of that community.
    But I would say, however, that you will see one-for-one 
replacement language in our Choice Neighborhoods Initiative. 
You will see it as we move in our rental assistance 
demonstration while indeed we are looking forward to one-for-
one replacement.
    We really are looking for in those markets that can handle 
it we will do so. There are sometimes markets that do not 
afford the ability for one-for-one. And it is the affordability 
and the preservation of that affordability for families who 
need it is our utmost concern.
    To the extent that we look to our rental assistance 
demonstration to preserve for the longer term, the existing 
housing stock to put it on a stable financial footing, to put 
it on a stable physical condition footing by doing capital 
improvement and therefore preserving as much as possible that 
stock moving forward.
    Ms. Waters. Thank you very much.
    While you are here I want to ask, are you familiar with the 
recent discrimination suit that was filed against two 
California cities, the Cities of Palmdale and Lancaster?
    Ms. Henriquez. I am not, unfortunately.
    Ms. Waters. Would you take a look at the discrimination 
suit that was filed against Palmdale and Lancaster? We have 
been hearing about the harassment of Section 8 tenants for 
quite some time now. And Los Angeles County sheriffs have been 
used to--basically, they are a part of the harassment. It seems 
as if L.A. County shares this understanding that they are being 
called out by city officials to basically ask tenants if they 
are Section 8, to arrest them, and on and on and on.
    And I think HUD should be aware of this. It should find out 
what your role is in protecting Section 8 tenants. Would you 
please take a look at that?
    Ms. Henriquez. I will do so, and we will get back to you.
    Chairwoman Biggert. Thank you very much.
    I now recognize the gentleman from Texas, Mr. Green. I 
would just like to add that he is on the full committee and not 
on the subcommittee, but I think he has better attendance than 
most of the members of this subcommittee.
    So we are really glad that you are here. You are recognized 
for 5 minutes.
    Mr. Green. Thank you. Thank you, Madam Chairwoman. And I 
thank the ranking member and the witnesses as well. And thank 
you for your testimony.
    I would like, if I may, to explore something that seems to 
be occurring that I do not have empirical evidence to support, 
the changing face of those who are in need of public housing. 
As you know, with the downturn in the economy, many persons who 
were homeowners are finding themselves in need of housing that 
they cannot afford.
    And you may have addressed this. But can you just give some 
commentary on the changing--when I say the changing face, I am 
obviously talking about the economic status of persons who at 
one time were working and had a home that they were paying for, 
never thought that they would need assistance, and now they 
find themselves in need.
    Are you finding--are the numbers supporting a large group 
of folks who are finding themselves in this position? Or is 
this just something that appears to be taking place, but there 
is no empirical evidence to support it?
    Ms. Henriquez. I do not have empirical information or 
evidence to support that specifically. What I can tell you is 
that what we have seen over time given the financial conditions 
of the country at this point is that people are staying longer 
in affordable housing units. It is more difficult for people to 
move in and to move out and move up because of the 
affordability issue.
    We also see that the waiting lists are getting longer. More 
people are applying because they need the affordability, given 
the change in their economic circumstances.
    Mr. Green. And are you finding that you have people who do 
have some assets, but they do not have enough assets to afford 
housing without some assistance?
    Ms. Henriquez. Yes. I would say that has been a constant.
    Mr. Green. And is the asset base--typically, we like to 
think that the people who are the neediest are getting the 
public housing, and that is what I want to be the case. But 
when we start to look at the asset base of persons, you can 
find that there are people who have some assets who need help 
too.
    And it seems that group is expanding rather than 
contracting because you have persons who had assets who lost 
their homes, they have been foreclosed on and now they need 
public housing. I call it public housing, affordable housing. 
That is the class of people that I am talking about. Any 
thoughts on this, please?
    Ms. Henriquez. I guess I would say initially that indeed 
meeting with housing authorities are generally structured 
chronologically. And so therefore the first people who have 
applied, been on the list the longest, move through the system 
and get housed. And traditionally in most locations it has been 
folks who are the poorest who have applied early on and remain 
on that list.
    And so the folks now come onto the list who find themselves 
as former homeowners who now move and find their circumstances 
change and need the affordability, you will find that they will 
be at the lower--the longest or at the bottom of those waiting 
lists, waiting their turn to move up and through the system as 
well.
    Mr. Green. What about veterans? Are you finding more 
veterans applying for affordable housing? Or is there any way 
to quantify the number of veterans applying?
    Ms. Henriquez. Veterans are applying both to the regular 
both Section 8 and to the public housing program. However, I 
would say that given the vast voucher program that has been in 
effect for a number of years, we are seeing more and more 
veterans housed through that Section 8 Program than in probably 
our regular public housing or Housing Choice Voucher Program.
    Mr. Green. Are we finding that we have the vast program and 
veterans are taking advantage of it, but that because there may 
not be enough, they are also seeking other opportunities or 
other help?
    Ms. Henriquez. I would say that whether it is veterans or 
other folks who need the affordability, people tend to then 
apply in as many different places as possible, whether they are 
applying to the multifamily program or to a public housing 
authority for a voucher program or public housing program. And 
people are trying to maximize their names on waiting lists so 
that they can afford themselves the affordability.
    Mr. Green. My time has expired. Thank you.
    I yield back.
    Chairwoman Biggert. The gentleman yields back.
    I would like to thank the witness for being here today. And 
the Chair notes that some members may have additional questions 
for this witness that they may wish to submit in writing. 
Without objection, the hearing record will remain open for 30 
days for members to submit written questions to this witness 
and to place her responses in the record.
    Again, thank you so much for being here today. And we will 
proceed to our second panel.
    While we are making the change, I would ask unanimous 
consent that the following letters or statements be inserted in 
the hearing record: a June 21, 2011, letter from the American 
Association of Service Coordinators and the National Housing 
Conference; a June 21, 2011, letter from the Chicago Rehab 
Network; a June 21, 2011, letter from the Stewards of 
Affordable Housing for the Future; a National Affordable 
Housing Management Association written statement on SESA; a 
June 23, 2011, industry letter in support of SESA; a June 23, 
2011, Housing Authority of the County of San Bernardino, 
California, statement on SESA; a June 23, 2011, National Multi 
Housing Council/NAA letter; and a statement from a number of 
housing groups, which are listed.
    Thank you. Without objection, it is so ordered.
    Welcome to the second panel, and we will start with Mrs. 
Capito from West Virginia will do the first introduction.
    Mrs. Capito. Thank you. Thank you, Madam Chairwoman, and 
thank you for holding this hearing.
    I want to welcome my friend Tony Bazzie back to the 
committee. He has testified before our committee before. Tony 
is executive director of the Raleigh County Housing Authority, 
a position which he has held for just a short period of time, 
as in 31 years.
    So I think we have a real expert here. He has seen the 
highs, the lows, the ups and downs and the all arounds of 
housing. And he serves his six counties very well. He has also 
participated with the National Association of Housing and 
Redevelopment Officials. Tony has been a great source of 
guidance for me and for those of us in the State and housing 
issues.
    It is always a pleasure to work with you, Tony. And welcome 
back to the committee.
    Chairwoman Biggert. Thank you, Mrs. Capito.
    Our second panelist is Ms. Linda Couch, senior vice 
president for Policy for the National Low Income Housing 
Coalition. Welcome.
    Third, is Ms. Roberta Graham, vice president, housing 
choice voucher services, Quadel Consulting. Welcome.
    Fourth, Mr. Tony Gunsolley, president and CEO, Housing 
Authority of the City of Houston, on behalf of the Council of 
Large Public Housing Authorities.
    Fifth, Mr. P. Curtis Hiebert, chief executive officer, 
Keene Housing Authority, on behalf of the Public Housing 
Authorities Directors Association. Welcome.
    Sixth, Mr. Alex Sanchez, executive director, Housing 
Authority of Santa Clara, California, on behalf of the National 
Leased Housing Association.
    And last, but not least, Ms. Barbara Sard, vice president 
for housing policy, Center on Budget and Policy Priorities.
    Welcome, all of you. And as you know, each of you will have 
5 minutes to give your opening statement. All written 
statements will be included in the record.
    And we will start with Mr. Bazzie for 5 minutes. You are 
recognized.

STATEMENT OF TONY G. BAZZIE, EXECUTIVE DIRECTOR, RALEIGH COUNTY 
  HOUSING AUTHORITY, BECKLEY, WEST VIRGINIA, ON BEHALF OF THE 
  NATIONAL ASSOCIATION OF HOUSING AND REDEVELOPMENT OFFICIALS 
                            (NAHRO)

    Mr. Bazzie. Chairwoman Biggert, Ranking Member Gutierrez, 
and members of the subcommittee, my name is Tony Bazzie, and I 
am the executive director of the Raleigh County Housing 
Authority in Beckley, West Virginia. My agency assists nearly 
1,300 families in a 6-county area in southern and central West 
Virginia.
    I am here today representing the National Association of 
Housing and Redevelopment Officials, one of the oldest and 
largest housing advocacy organizations. We are pleased to be 
called upon again to express our views. I was honored to be 
asked by Representative Capito, the distinguished member of 
this committee, to testify on the same subject in 2009.
    Speaking for housing authorities in West Virginia, and on 
behalf of my colleagues nationwide, the need to support 
responsible reform of the Section 8 Voucher Program is even 
more important today than it was when I was here 2 years ago. 
The work of my authority and others and our efforts to support 
those in need have been greatly impacted by recent spending 
reductions.
    The net effect of this administrative fee reduction has 
forced me to lay off 3 of my staff members--which in a housing 
authority of my size is 25 percent of my staff--which 
significantly undermines my agency's ability to fulfill the 
mission of this program, which is to serve very low- and 
extremely low-income families with housing needs. Simply put, 
fewer staff means fewer people can be served.
    NAHRO proposes using all existing funding sources to help 
stabilize the voucher program. Taking into account an estimated 
proration in administrative fees of 83 percent in calendar year 
2011, and resultant staff layoffs that are occurring across the 
country, NAHRO is estimating that approximately 87,000 fewer 
families will be served by the voucher program in the next 12 
months if the current situation remains unchanged, which would 
be the largest drop in voucher-assisted families in the 
shortest period of time in the program's history.
    I realize the funding issues are not within the purview of 
this subcommittee, but authorizing responsible legislation to 
reduce the administrative cost and lessen the administrative 
burdens in the voucher program can prevent fewer of these 
families from losing their vouchers in today's appropriations 
environment. It is crucial to act on a reform bill now.
    In response to some of the questions in your invitation 
letter, with the permission of the Chair, I ask that the 
results of NAHRO's administrative fee survey as well as the 
chart showing the historic relationship between admin fee 
prorations and national voucher lease up rates be entered into 
the record of this hearing.
    Chairwoman Biggert. Without objection, it is so ordered.
    Mr. Bazzie. Thank you.
    Changes with respect to property inspections, utility 
allowances, and rent calculation are contained in the draft you 
are now considering, as they were in previous drafts of SEVRA. 
In this regard, I want to thank you again, Representative 
Capito, for your many efforts to improve the voucher program 
through reforms.
    Specifically a Capito amendment to the SEVRA bill approved 
by the Financial Services Committee in the previous Congress 
required HUD to share utility costs with housing authorities, 
and allow them to use these estimated utility costs as standard 
allowances, a greatly time-consuming effort. I hope this or 
similar language that is adapted to current circumstances will 
again be included in any bill you adopt.
    In my written statement, I refer to a NAHRO-supported 
compromise version of SEVRA dated December 1, 2010, and I have 
attached our support letter to my written statement. That bill, 
while not perfect, accomplished much in the way of reform, 
including a provision authorizing a responsible renewal funding 
formula.
    My written testimony highlights a number of other 
provisions in the December bill, including the modification of 
income targeting for extremely low-income households, a 
provision which gives housing authorities the option to conduct 
inspections every 2 years rather than annually, and the option 
to commence a lease and contract following an initial 
inspection.
    Given the support for that bill at that time, NAHRO 
strongly encourages the subcommittee to approve language that 
reads as much as possible like the December 2010 version of 
SEVRA. Having said that, we applaud you for developing a 
discussion draft which promotes reforms, including the 
restoration of maximized leasing and keeps in place much of 
what we found positive in the December version of SEVRA.
    NAHRO is, however, deeply concerned that the discussion 
draft eliminates comprehensive language to stabilize the 
voucher renewal funding formula, which was found in the 
December bill and in previous SEVRA provisions. It is important 
that comprehensive changes to the funding formula be included 
going forward in order to bring stability to a program that has 
been extremely difficult to manage due to the uncertainty of 
annual appropriations.
    The discussion draft you are now considering contains many 
provisions NAHRO could support, including, but not limited to 
the chairwoman's own FSS legislation which we know, Chairwoman 
Biggert, you care about deeply.
    We stand ready to work with you to alleviate any 
differences we may have, and perfect that which we can agree 
upon in SESA. We also hope you will work with us to encourage 
any and all regulatory reforms that HUD can do now to maximize 
program efficiency. Thank you.
    [The prepared statement of Mr. Bazzie can be found on page 
40 of the appendix.]
    Chairwoman Biggert. I thank the witness.
    And Ms. Couch, you are recognized for 5 minutes.

STATEMENT OF LINDA COUCH, SENIOR VICE PRESIDENT FOR POLICY, THE 
NATIONAL LOW INCOME HOUSING COALITION (NLIHC), WASHINGTON, D.C.

    Ms. Couch. Thank you. I would like to thank Chairwoman 
Biggert, Ranking Member Gutierrez, and the other members of the 
subcommittee and the full committee for the opportunity to 
testify on the discussion draft of the Section 8 Savings Act. 
We greatly appreciate your work to improve HUD's housing 
program.
    The National Low Income Housing Coalition is dedicated 
solely to achieving socially just public policy that assures 
people with the lowest incomes in the United States have 
affordable and decent homes. The Coalition strongly supports 
the Housing Choice Voucher Program because of the stability it 
provides to households and to communities.
    The voucher program's income targeting standards make it 
the most deeply targeted of HUD's large housing assistance 
program. Vouchers are needed in places like Illinois, where 76 
percent of extremely low-income renter households pay more than 
half of their incomes on housing. That is where the need is, 
and that is where the gap of homes is.
    Nationally, when affordable and available units are 
compared to the number of extremely low-income households, the 
Coalition finds a shortage of six million homes. In Illinois, 
for every 100 extremely low-income households, there are only 
32 affordable and available homes.
    Simply put, if our programs are not targeting extremely 
low-income households, they are not meeting our community's 
pervasive and most acute housing affordability problems. 
Indeed, the Coalition believes that a significant expansion of 
the voucher program and capitalization of the National Housing 
Trust Fund, both of which are targeted to the lowest-income 
households, are the primary vehicles through which the United 
States can and will end homelessness.
    You asked about areas that could be streamlined while 
maintaining proper program oversight. We are very interested in 
achieving this critical balance. The Coalition believes that 
there is a point at which reducing administrative tasks will 
undermine our understanding of and appreciation for the 
programs, as well as Congress' and HUD's ability to exercise 
their oversight.
    We applaud the draft bill's streamlining and simplification 
of rent settings, and its encouragement of increased earned 
income while maintaining the core benefits of these programs to 
assisted households, rent set to the Brooke Standard, which 
ensures each household's rent is always affordable.
    While the draft bill's language on leasing rates and 
reserves is helpful, the Coalition urges the subcommittee to 
codify that voucher renewal funding will be based on leasing 
and cost data from the previous calendar year with adjustments, 
rather than rely on annual appropriations bills for such 
directives.
    The Coalition also thinks it would be useful to agencies 
and tenants if HUD had the authority to offset and reallocate 
excess reserves as it saw fit. The history of SESA is based on 
the need for a predictable and sufficient funding allocation, 
and adding such provisions would help SESA achieve these 
longstanding goals.
    The Coalition hopes that additional provisions to support 
the project-based vouchers will also be added, including 
authorizing an additional 5 percent of vouchers are vouchers 
fund for project basing and units housing homeless families, 
for supportive housing for persons of disabilities or for units 
in tight rental markets.
    We also very much appreciate that the discussion draft does 
not expand the Moving to Work demonstration to additional 
agencies or make it permanent.
    To this end, we could consider the rent policy 
demonstration outlined in the draft bill if it included certain 
parameters. These might include a strong evaluation component, 
prohibiting rent burdens that are de facto time limits, and 
limiting the demonstration to the smallest number of families 
and for the shortest timeframe necessary to test various rent 
structures.
    What impact has the Moving to Work Program had on 
participating public housing authorities? To be brief, we do 
not know. For now, we have anecdotal reports based on anecdotal 
reports.
    HUD's recent report on Moving to Work was criticized 
sharply by the Low Income Housing Coalition. Before we expand 
the Moving to Work demonstration, we must learn its lessons.
    Notable for this hearing, all of the rent simplification 
measures touted in this report as used by MTW agencies would be 
achieved for all PHAs for the passage of SESA. These include 
reducing rent recertification frequency for fixed-income 
households, eliminating or simplifying the earned income 
disregard, ignoring some or all of the asset income, and 
replacing medical deductions with a standard deduction.
    We support the SESA draft, and we look forward to working 
with you on it. Thank you for considering our comments.
    [The prepared statement of Ms. Couch can be found on page 
53 of the appendix.]
    Chairwoman Biggert. Thank you very much.
    Ms. Graham, you are recognized for 5 minutes.

  STATEMENT OF ROBERTA GRAHAM, VICE PRESIDENT, HOUSING CHOICE 
     VOUCHER SERVICES, QUADEL CONSULTING, WASHINGTON, D.C.

    Ms. Graham. Thank you. Chairwoman Biggert, Ranking Member 
Gutierrez, and other distinguished members of the panel, I am 
Roberta Graham, vice president for housing choice voucher 
services at Quadel Consulting Corporation.
    Quadel is a private company that for over 30 years has 
provided private management, consulting, and training to the 
housing community. Since 1984, Quadel has managed front-line 
operations for 29 PHA programs. We currently operate five 
Housing Choice Voucher Programs and conduct training on the 
voucher program throughout the country.
    I appreciate the opportunity to testify today, and thank 
you for taking a thorough look at the Housing Choice Voucher 
Program and how to simplify burdensome and complex statutory 
and regulatory requirements.
    This year, administrative fees, the funding used to manage 
and operate the voucher program, were cut by Congress. And HUD 
is determined that administrative fees will be funded at an 83 
percent proration for the year.
    The effects of this cut are compounded by the fact that 
fees were funded at a much higher proration for the first 5 
months of 2011, when an appropriations bill was not yet in 
place. This means that for the remainder of Fiscal Year 2011 
administrative fees will be significantly lower than 
anticipated.
    In light of significant cuts in administrative fees and the 
downward pressure on domestic discretionary funding, regulatory 
relief is now needed to ensure that the voucher program can be 
effectively operated.
    Chairwoman Biggert, we applaud your efforts to streamline 
this program and the intent of your legislation, the Section 8 
Savings Act, or SESA. And we look forward to working with you 
to ensure that your legislation achieves your objectives.
    In my written testimony, I detail exact procedures and 
administrative requirements in many voucher programs functions. 
In this statement, I will focus on our recommendations in the 
areas that are most burdensome.
    Thirty-five percent of the administrative fees in our 
program are spent on income reexaminations, the most expensive 
of any function. An analysis of 2 of our sites shows that 
almost 30 percent of tenants are on a fixed income. Your draft 
bill would require re-exams of those on fixed incomes every 3 
years, a great improvement to the current annual requirement.
    Recalculating and re-verifying the incomes of households 
with fixed incomes is a significant administrative burden that 
results in very little change in assistance payments and tenant 
contribution.
    We are concerned that as drafted, some HUD regulatory 
requirements would still exist that could lessen the desired 
relief. However, we look forward to working with you on this 
language.
    We urge you to look at moving to a biannual re-exam for all 
residents unless there is a significant change in family 
income. We found that only one third of assistance payments 
change from year-to-year. So for two-thirds of residents, there 
is no real need to do a full reexamination of income.
    At one Quadel-managed site, 12 percent of the 
administrative fee is spent on interim reexaminations. While 
SESA attempts to limit the interim reexaminations, we urge the 
committee to go further and eliminate interims unless there is 
going to be a significant change in assistance payments.
    An analysis of one of our programs shows that 17 percent of 
our administrative fees are spent on inspections, the second 
most costly function.
    Your draft legislation proposes biannual inspections for 
all units, and allows for an alternative inspection conducted 
within the past year to suffice. For the most part, this 
schedule will result in cost savings to PHAs, and will speed up 
the process of approving units and encouraging more private 
landlords to participate in the program.
    We recommend tying reduction in inspection frequency to 
documented history of good quality housing. One proposal would 
be to inspect all units every 2 years when there are no prior 
deficiency.
    In addition, the determination of income and the 
verification process is incredibly complex. Income definitions 
are used for admissions and annual re-exams and interim re-exam 
functions. The total is nearly 55 percent of program costs.
    By streamlining the definitions in the way income is 
computed, we would find cost savings in all three of these 
functions. We strongly support the proposed elimination of the 
requirement to verify and report excluded income.
    We urge you to eliminate the need to verify and calculate 
income from assets, which at two of our sites resulted in less 
than $1.00 in decreased assistance payments per resident per 
year.
    In addition, we urge you to further streamline the income 
allowances so that standard and not individualized allowances 
are used. This would significantly reduce administrative cost.
    We also urge the committee to consider simplifying rents by 
moving to a tiered rent structure based on income. This would 
do away with the need to calculate adjusted income, assets, and 
deductions, creating a significant administrative relief. While 
there is some concern that this would increase rent burdens, we 
believe this would also decrease rents to some families and 
incentivize employment.
    In closing, we are pleased the committee is seriously 
looking at voucher administrative reform. At a time when 
administrative fees are being cut, Congress must also provide 
regulatory relief.
    We look forward to working with you on this issue, and I am 
happy to answer any questions. Thank you.
    [The prepared statement of Ms. Graham can be found on page 
62 of the appendix.]
    Chairwoman Biggert. Thank you very much.
    Mr. Gunsolley, you are recognized for 5 minutes.

STATEMENT OF TORY GUNSOLLEY, PRESIDENT/CHIEF EXECUTIVE OFFICER, 
 HOUSING AUTHORITY OF THE CITY OF HOUSTON, TEXAS, ON BEHALF OF 
    THE COUNCIL OF LARGE PUBLIC HOUSING AUTHORITIES (CLPHA)

    Mr. Gunsolley. Thank you. Chairwoman Biggert, Ranking 
Member Gutierrez, and members of the subcommittee, my name is 
Tory Gunsolley, and I am the president and CEO at the Houston 
Housing Authority, which serves over 55,000 Houstonians through 
16,000 vouchers and 5,300 apartments.
    I am testifying today on behalf of the Council of Large 
Public Housing Authorities, known as CLPHA, whose members 
manage almost half of the Nation's public housing and 
administer over one quarter of the Housing Choice Voucher 
Program. We thank the subcommittee for holding this hearing, 
and this opportunity to comment on the Section 8 Savings Act of 
2011, SESA.
    Madam Chairwoman, PHAs are swimming in paperwork. The 
Houston Housing Authority alone has over 5,600 linear feet of 
voucher program files. That is over a mile of files. This bill 
will help reduce that stack.
    Before turning to some specifics, generally, CLPHA is 
pleased that SESA retains much of what is good in SEVRA, 
eliminates some of what was problematic, and is a good 
foundation for improving what was needed in SEVRA. In my 
testimony today, I will touch on the highlights of our written 
recommendations.
    First, we were quite surprised that SESA did not retain the 
provisions from SEVRA which would have provided predictability 
and stability in the voucher renewal funding formula. Not 
knowing the funding formula creates great uncertainty and 
causes inefficiency systemwide. CLPHA strongly recommends that 
the SEVRA renewal funding language be included in SESA.
    We were pleased that SESA retained protection of some 
reserve HAP funds. We, of course, prefer that public housing 
authorities retain 100 percent of the reserves, but we 
appreciate 6 percent.
    However, we would also recommend allowing additional 
reserves for PHAs that have defined plans which require higher 
reserve levels to increase leasing. CLPHA has long advocated 
eliminating the authorized vouchers cap on leasing, and we are 
pleased that SESA takes a step in that direction.
    Project basing vouchers is a great tool that more PHAs and 
their partners should use. However, the current regulations 
offer no incentive to do so, and actually creates additional 
burdens.
    We urge including the language from SEVRA which allows PHAs 
to project base vouchers in their own buildings without going 
through a competitive process. Also, increasing the percentage 
and the number of vouchers that may be project based in 
individual buildings would be helpful.
    We also urge restoring the site-based waiting list for 
project based projects. Currently, PHAs must send out thousands 
of letters and spend hundreds of hours of staff time that is an 
unnecessary administrative burden.
    Turning to administrative fees, a name that is somewhat 
pedestrian and unimaginative, and certainly not fitting of the 
role it plays in the voucher program. A detailed listing of the 
many activities funded by the fees are listed in my written 
testimony. But suffice it to say, without admin fees the 
voucher program would cease to exist.
    In Houston, our admin fees are used to perform more than 
35,000 inspections, 20,000 reviews of family income, and 25,000 
rent calculations annually. Changing the frequency and length 
of those items will allow us to be more efficient as these are 
some of the most staff intensive and costly activities paid for 
by admin fees.
    SESA makes good progress in reducing the administrative 
burdens with its increase in the asset cap, and less frequent 
inspections and interim certification. It is worth noting that 
these similar innovations were started and tested for years at 
MTW agencies.
    These MTW agencies get to ask themselves questions like, 
what are the most profound needs in my community and how can we 
address them? Instead of asking themselves, what do we need to 
do to be a high performer on CMAP?
    This fundamental shift in thinking allows MTW agencies to 
solve problems more efficiently and rapidly than most non-MTW 
agencies could even imagine. I would love to have MTW in 
Houston. While SEVRA included an expansion of MTW, we are 
hopeful that as SESA develops, a path for the expansion of MTW 
will be included.
    CLPHA also supports converting public housing to project-
based vouchers or contracts. While not the subject of today's 
hearing, we believe that a conversion option with a loan 
guarantee like FHA could be a way to maintain long-term use 
restriction on the property. And in the rare but unfortunate 
event of a mortgage default, prevent the loss of this important 
public housing asset.
    In closing, while we work to improve the Housing Choice 
Voucher Program, there is still an urgent need to preserve and 
increase the supply of actual housing units specifically 
dedicated to those most in need. We look forward to working 
with you and HUD on making additional improvements to the 
Housing Choice Voucher Program and perfecting this legislation. 
Thank you for the opportunity to testify.
    [The prepared statement of Mr. Gunsolley can be found on 
page 73 of the appendix.]
    Chairwoman Biggert. Thank you very much.
    I would now recognize Mr. Hiebert for 5 minutes.

STATEMENT OF P. CURTIS HIEBERT, CHIEF EXECUTIVE OFFICER, KEENE, 
   NEW HAMPSHIRE HOUSING AUTHORITY, ON BEHALF OF THE PUBLIC 
       HOUSING AUTHORITIES DIRECTORS ASSOCIATION (PHADA)

    Mr. Hiebert. Thank you very much. Chairwoman Biggert, 
Ranking Member Gutierez, and subcommittee members, I appreciate 
this opportunity to offer testimony concerning the Section 8 
Savings Act of 2011 on behalf of the Public Housing Authorities 
Directors Association. I am Curt Hiebert, PHADA's immediate 
past president and the chief executive officer of the Keene, 
New Hampshire Housing Authority.
    PHADA was founded in 1979 and represents over 1,900 housing 
authority chief administrative officers. A significant 
proportion of PHADA members administer small and medium-sized 
agencies that operate a mixture of assisted housing programs.
    Some operate public housing, some the Housing Choice 
Voucher Program, and many operate both programs. And a number 
of members operate assisted housing financed with HOME, CDBG, 
LIHTC, Department of Agriculture, and other non-Federal 
support.
    The Keene Housing Authority was one of the original 24 
Moving to Work demonstration sites, and continues to operate 
its entire public housing and Section 8 programs under that 
program. MTW has made dramatic differences in our community. 
Our participation in MTW has allowed us, our residents and our 
community together, to develop a program that provides for the 
neediest of our region, providing stability to those on fixed 
incomes and a system that encourages families to move toward 
self-reliance.
    In 1999, 47 percent of the heads of household at the KHA 
were working full time. Last year, 64 percent were working full 
time. In that same period of time, average income for 
residents' families housing increased by 30 percent.
    In part, this was because our system does not discourage 
increases in income, but actually rewards it. Our system of 
rent steps does not penalize rises in income, but instead our 
program encourages the acquisition of job skills, education, 
financial competency, and ambition. At the same time, though, 
the neediest of our programs and our residents are protected by 
our safety net provisions.
    Our program will not work everywhere. But the key is that 
by utilizing the flexibility contained in MTW, we were able to 
make a program that is good for Keene, New Hampshire, our 
residents, and our stakeholders.
    Concerning SESA, as with the past Section 8 bills, we 
believe that SESA includes elements helpful to housing 
authorities, but also includes some problematic elements. 
However, the change in the budget environment that has occurred 
in the past few years, we believe that new fiscal constraints 
radically shift the issues authorizing legislation such as SESA 
must address.
    Also, we urge that expectations that any cost savings will 
be extensive or immediate must be curbed. It will take a lot of 
time for these things to take effect.
    While deregulation, local flexibility and reductions in 
administrative overhead have been attractive alternatives in 
the past, they have become almost necessities. They directly 
affect the preservation of the inventory of deeply assisted 
housing programs, as well as the survival of and maintenance of 
capacities at local housing authorities.
    Federal interests in maintaining affordable housing 
initiatives, initiatives in States and localities drives 
PHADA's efforts to simplify and reform housing programs with an 
eye to cost reduction and revenue generation. In addition to 
elements of SESA, PHADA urges the committee to consider PHADA's 
and NAHRO's Small Housing Authority Reform Proposal called 
SHARP, an expansion of the Moving to Work demonstration for 
inclusion in authorizing legislation.
    PHADA supports discretion for housing authorities to be in 
short-term housing assistance while owners complete repairs to 
non-life-threatening HQS deficiencies. We also support a number 
of proposed provisions that offer housing authorities 
opportunities to reduce administrative overhead and deliver 
housing assistance more efficiently and effectively.
    There were also some questions posed by the subcommittee 
regarding, for instance, the use of administrative fees to 
operate the voucher program. The Housing Choice Voucher Program 
is administratively very complex. Programs, program sponsors 
and the jurisdictions they serve are diverse, and their uses of 
administrative fees for program operations reflect this 
complexity and diversity.
    And we applaud HUD's efforts to engage associates to 
conduct a time and motion study. That should help provide us 
all with some information.
    Moving to Work has many impacts on all of us, and we really 
believe that opportunities such as the Moving to Work actions 
in Chicago, where they use their MTW discretion to renovate or 
replace over 17,000 public housing units, should be applauded.
    And we would also encourage, in closing, that speaking 
personally and on behalf of PHADA, we thank you for remaining 
engaged in reforming assisted housing programs. This is a 
complex task in the best of times.
    Reforms that include simplification, deregulation, and 
local flexibility have become critical to agencies that may 
experience severe funding constraints in the immediate future. 
Thank you very much for including us in the discussion.
    [The prepared statement of Mr. Hiebert can be found on page 
86 of the appendix.]
    Chairwoman Biggert. Thank you so much.
    Mr. Sanchez, you are recognized for 5 minutes.

    STATEMENT OF ALEX SANCHEZ, EXECUTIVE DIRECTOR, HOUSING 
 AUTHORITY OF THE COUNTY OF SANTA CLARA, CALIFORNIA, ON BEHALF 
       OF THE NATIONAL LEASED HOUSING ASSOCIATION (NLHA)

    Mr. Sanchez. Good morning. Chairwoman Biggert, Ranking 
Member Gutierrez, and distinguished members of the 
subcommittee, my name is Alex Sanchez, and I am the executive 
director of the Housing Authority of the County of Santa Clara/
Silicon Valley's Housing Services Agency. I am here today on 
behalf of the National Leased Housing Association as its 
president-elect.
    National Leased Housing's nearly 500 member organizations 
are primarily involved in the Section 8 housing programs, both 
project-based and tenant-based, along with the housing tax 
credit program. And they provide or administer housing for over 
three million households.
    We believe the Section 8 program has been successful in 
ensuring decent, safe, and affordable housing for low-income 
families and the elderly. However, as with most government 
programs, the longer they are in existence, the more rules and 
regulations are imposed that are often illogical, imposed at a 
cost.
    Overall, we believe the draft SESA legislation is a serious 
attempt to further streamline the Section 8 program beyond the 
reforms achieved in 1990s by the Quality Housing and Work 
Responsibility Act or QHWRA.
    My written statement goes into detail in a review of 
various provisions of the draft SESA legislation. There are a 
few items I would like to highlight briefly in my remarks 
today, including touching on the fact that in addition to 
running California's third largest Section 8 program with 
17,000 vouchers in 13 cities in a county of over 2 million, my 
agency participates in a Moving to Work demonstration program, 
and has had good results for streamlining the Section 8 
administration.
    We are very encouraged by the draft SESA provisions that 
would streamline the process for calculating income and rent. 
Such provisions would reduce the administrative burdens on PHAs 
and participating property owners, while not increasing the 
rent burden on residents.
    National Leased Housing strongly supports SESA provisions 
that make important reforms to the proper inspection process, 
including addressing a redundancy that exists in Federal 
inspection requirements. We also support the ability of PHAs to 
inspect properties every other year instead of annually.
    We are also pleased the SESA discussion draft includes a 
number of provisions to make the Project-Based Voucher Program 
more flexible, cost-effective, and responsive to community 
needs. National Leased Housing's members are deeply involved in 
the preservation and rehabilitation of the older rental housing 
stock in the country.
    It is important that the scarce tools available to 
accomplish this preservation are as flexible as possible. To 
that end, we have made some specific cost-neutral suggestions 
to streamline the process of converting tenant production and 
enhance vouchers to project-based assistance.
    We applaud the recognition of SESA in the self-sufficiency 
program that can be brought into other housing programs. A 
number of our PHA members have run successful programs for 
years and can share with the committee their successes upon 
request.
    Of course, the downside to the FSS program is that it can 
only work if there are sufficient social services in the 
community that can be accessed by the participants, with 
sufficient resources to hire someone to coordinate them. Too 
often, these resources are extremely limited.
    National Leased Housing has long supported the Moving to 
Work Program, and the agency I head has been an MTW 
participating agency for 3\1/2\ years. Our agency serves one of 
the most expensive to live in the country. MTW allows us to 
make better use of limited Federal funds to meet the unique set 
of affordable housing needs and circumstances in our community.
    MTW has allowed us to dramatically streamline our Section 8 
voucher program administration. For example, we conduct tenant 
re-exams every 2 or 3 years instead of every year, and we 
conduct housing quality inspections every 3 years instead of 
annually. These and other approved administrative efficiencies 
have translated into staff time savings valued at over $2 
million, and other program cost savings of over $800,000 with 
no detrimental effects on the program and its participants to 
date.
    MTW has enabled us to shift these resources from things 
like one-size-fits-all annual tenant re-exams to over leasing 
the housing Section 8 program, providing more staff time to 
assist tenants and property owners, preserving existing 
affordable housing, taking advantage of rare opportunities to 
buy land well below market, collaborating with local 
governments and service providers to create successful direct 
voucher referral programs to better serve those who have been 
chronically homeless, and expanding modest but very effective 
resident services.
    In conclusion, the National Leased Housing Association 
supports the goals of SESA. We appreciate the opportunity to 
express our views. And we stand ready to work with the 
subcommittee on the Section 8 Program and other critical 
housing issues. Thank you.
    [The prepared statement of Mr. Sanchez can be found on page 
96 of the appendix.]
    Chairwoman Biggert. Thank you.
    And Ms. Sard, you are recognized for 5 minutes.

 STATEMENT OF BARBARA SARD, VICE PRESIDENT FOR HOUSING POLICY, 
    CENTER ON BUDGET AND POLICY PRIORITIES, WASHINGTON, D.C.

    Ms. Sard. Thank you. Thank you, Chairwoman Biggert, Ranking 
Member Gutierrez, and other members of the subcommittee for the 
opportunity to testify at this important hearing. We commend 
the subcommittee for moving forward with the Section 8 Savings 
Act.
    Some of the most important SESA provisions would first, 
simplify rules for tenant rent payments, reducing the number of 
individualized calculations and recertifications, while 
continuing to cap rents at 30 percent of the tenant's income. 
And second, would streamline housing quality inspections to 
encourage private owners to participate in the program.
    You have heard testimony from administrators of the program 
that these two sections alone will significantly reduce the 
administrative work for housing authorities and subsidized 
owners, and make the voucher program more owner-friendly. The 
Center on Budget and Policy Priorities estimates that these 
changes will result in several hundreds of millions of dollars 
of savings over 5 years, critically important at a time when 
Congress has reduced administrative fees in the voucher program 
and there is a risk of reduction in public housing operating 
subsidies.
    These and other sections of the bill, according to the 
Congressional Budget Office, will save more than $700 million 
over 5 years, primarily by allowing the programs to serve more 
working poor families. I do not need to explain to you how 
important it is at this time to enact constructive policy 
changes that also save money.
    We also commend the chairwoman for including in the bill 
provisions to expand and strengthen the Family Self-Sufficiency 
Program. The Center wrote a report 10 years ago about how this 
program is HUD's best-kept secret. And I am afraid that is 
still the case. We commend you for making it more visible.
    You asked at the start of this hearing what the committee 
could do to enable the programs to serve more families at this 
time of tight resources. That is the critical question and I 
commend you for it.
    I suggest that in addition to enacting the bill that you 
have proposed, which is a terrific bill and will stretch 
dollars, as we have all said, there are two other things that 
are really important.
    The first is to complete the provisions of the bill 
regarding the voucher renewal funding formula. Doing what 
authorizers do, and having the full policy in permanent law so 
that appropriators can just plug in the dollar figure, will 
create the stability and the incentives that agencies need to 
use their money most efficiently.
    Programs now are using only about 92 percent of their 
authorized vouchers. Before the renewal funding policy began to 
change every year they were using 97 percent. That is a 
difference of more than 100,000 vouchers. Creating a stable 
policy and giving HUD the ability to offset excess reserves in 
allocating money will stretch any amount of money the 
appropriators provide most effectively.
    The second thing I submit that the committee needs to do is 
to not make the Moving to Work demonstration permanent or 
expand it. And there are really two reasons for this.
    The first is, you have already heard from the witnesses 
today the differences of opinion on this controversial issue. 
The best thing about the draft bill in addition to the 
substance of it is that it is a consensus bill. Everyone 
believes that the provisions in the bill make sense and should 
be enacted.
    We cannot afford to jeopardize enactment of this bill with 
political controversy. Some members believe MTW expansion is 
important. Others disagree. Let us consider it as a separate 
bill.
    The second concern we submit about MTW is that our analysis 
suggests that it has reduced, not expanded, the number of 
families served. For every $100,000 that agencies receive for 
their public housing and voucher programs, ordinary agencies 
serve nearly 15 households while MTW agencies serve only 9 
households. That is a huge difference in a time of constrained 
resources, and only a slight amount of the difference is due to 
the difference in housing costs in these communities.
    So we thank you, and we urge your speedy action on this 
bill.
    [The prepared statement of Ms. Sard can be found on page 
103 of the appendix.]
    Chairwoman Biggert. Thank you.
    Now, we will turn to the questions, which each of us will 
ask within 5 minutes. And I will yield myself 5 minutes.
    And I guess I have to ask this question. In 2002, Section 8 
programs consumed 46 percent of HUD's annual budget. And by 
2011, it has consumed 61 percent.
    Are you all comfortable with the increasing portion of the 
overall HUD budget the Housing Choice Voucher consumes? Or do 
you have any ideas for those other than what we have already--
that has been talked about?
    And does such an increase suggest a design flaw within the 
program? Or do you know what other reasons would be?
    And further, what should Congress do to address the waiting 
list?
    Ms. Sard. If I may--
    Chairwoman Biggert. Sure.
    Ms. Sard. --jump in on this because I think that the 
statistics, while true about budget authority, also create a 
misimpression. So I wanted to just clarify before answering.
    First of all, the statistics involve not only the voucher 
program, but also the Project-Based Section 8 Program, and 
together these two programs serve more than three quarters of 
the families receiving HUD rental assistance. So this is a huge 
share of the families served, and not disproportionate to the 
budget.
    Second, the use of budget authority figures for these 
statistics really distorts what is going on, on the ground. If 
you look instead at outlays, which is what matters for purposes 
of the deficit, the outlays for the two Section 8 programs have 
been nearly steady over the last 9 years.
    In 2002, outlays were 52 percent of HUD total discretionary 
spending. The high point was 2004 when the outlays were 57 
percent. And in 2010, they were 55 percent.
    There are a lot of technical reasons, and we would be happy 
to explain all those. But the amount of budget authority has a 
lot to do with when there are rescissions and other technical 
things.
    And I have already answered the other question about what 
we think you can do to serve more families. So I will leave 
that--
    Chairwoman Biggert. Thank you.
    Anyone else, any comment on this?
    Ms. Couch?
    Ms. Couch. I will chime in on what to do about the waiting 
list. It is our perspective that the draft bill would really 
help squeeze every dollar's worth out of the voucher program 
and Congress' allocation for the voucher program.
    And it is our long-term hope that the bill will provide a 
lot of credibility in the voucher program and stability in the 
voucher program, and that at some point in the not too distant 
future, the voucher program in better fiscal times, which must 
be ahead of us, that we will be able to expand the voucher 
program.
    But if we do not bring these sort of stability mechanisms 
and credibility to the voucher program now, when we are in 
those better financial times, will not have the will and the 
wherewithal to go ahead and expand the voucher program.
    Chairwoman Biggert. Thank you.
    Anyone else care to comment on that?
    Mr. Gunsolley?
    Mr. Gunsolley. I just cannot emphasize enough how important 
it is to have that predictability of the funding formula as 
someone who runs this program. It is--you cannot spend 97 or 99 
percent of your money because the formula changes 6 months 
through the year. And you have to have much higher reserves 
than the 6 percent. And so I would definitely--we talked about 
it, but I would definitely urge its consideration.
    Chairwoman Biggert. Okay. And while you are up, could you 
explain why site-based waiting lists are an important tool for 
a PHA?
    Mr. Gunsolley. Sure. It is specifically in relation to the 
Project-Based Voucher Program. Currently, there are regulations 
that exist that would require a housing authority if it 
establishes a Project-Based Voucher Program to notify everybody 
on its main list. And every time that there is a preference, 
you have to mail out letters to everybody on the list.
    And so what has happened in the past, I have done these 
programs and you will have a nonprofit provider who wants to 
serve the homeless. And that is their only mission in life. And 
we give them some project-based vouchers. They want a 
preference for homeless.
    My main list does not have a preference for homeless. So 
now I need to mail out thousands of letters to see is there 
anybody who is already on the list who may qualify, when the 
nonprofit provider already has all the clientele that they 
need.
    So it is just a simple regulatory fix that would help make 
it more efficient.
    Chairwoman Biggert. Thank you.
    And I have time to ask Ms. Graham, I think you have really 
been so helpful in looking at the cost for the programs and how 
we can lower those. I appreciate that. Are there any more 
commonsense reforms that we should consider that you do not 
think that this bill has considered, or that you have not 
mentioned?
    Ms. Graham. Sorry. I think that those that are in the bill 
are the most significant in terms of administrative cost. And I 
think you have hit on them in the draft bill and we have 
addressed them in our written testimony.
    We would be happy to explore additional commonsense options 
or cost savings in the program with you.
    Chairwoman Biggert. If you find any, we would appreciate 
having them. Thank you very much.
    And my time has expired.
    We will go to the gentleman from Wisconsin, Mr. Duffy, for 
5 minutes.
    Mr. Duffy. Thank you, Madam Chairwoman.
    As we all sit here today, I think there is an agreement 
that this is a program that helps folks who are in need, and it 
is wonderful that we have a safety net in America which will 
help folks who fall upon hard times. We obviously want to 
streamline the program to make sure, again, we can squeeze 
every dollar out to help folks who are in need.
    But Ms. Couch, just to be clear, did I hear you say that if 
the economy recovers, we are going to hopefully have more money 
for the program to provide more vouchers?
    Ms. Couch. It is the Coalition's hope that the Nation 
focuses and puts resources toward affordable housing assistance 
as long as we have homelessness in the United States. HUD 
released a report 2 weeks ago that showed more than 600,000 
families remain homeless in the United States.
    And so until that ends, and until households are paying 
affordable amounts of their income towards housing costs, we 
certainly do believe that there should be some Federal 
investment in affordable housing programs. We see the voucher 
program working well today as helping the families today. But 
until we end homelessness in this country, we will fight for--
    Mr. Duffy. And I guess for me, I agree with you, HUD should 
have a safety net program. But I also think that as an economy 
expands, what we really want in this country is opportunity. We 
want to have a country where folks can go out and get a job.
    Ms. Couch. We agree. We would absolutely agree. So there 
are a couple of ways to attack the housing affordability 
shortage.
    One is to increase people's incomes enough and have 
people's incomes be enough to match the rents in the private 
market. And if that was the avenue that was going to work the 
best, then that would be the avenue we were taking.
    Right now--
    Mr. Duffy. Would you--
    Ms. Couch. --rents are completely out of whack.
    Mr. Duffy. --agree that we should have some form of a work 
requirement or an education requirement in the program to make 
sure that people are actually aggressively working to better 
themselves so they can get off public assistance and contribute 
to society?
    Ms. Couch. I would not say that the people on the voucher 
program or other HUD programs are not working. I would say that 
when they are working, and they do work, well the majority of 
them are actually elderly and disabled people. But for those 
who are work- eligible, it is that work does not pay enough. 
There is a wide gap between the minimum rent in Wisconsin and 
the $15 it costs an hour--
    Mr. Duffy. Right. So you would be okay, though, if we had a 
work requirement.
    Ms. Couch. No, we would oppose a work requirement.
    Mr. Duffy. Okay. So to be clear, some are working. But 
those who are not working or seeking work or getting an 
education, you would be fine if they stay on the program?
    Ms. Couch. This is our Federal housing safety net, and I 
think that we need parameters for how people live in there. But 
their ability to get housing assistance should not have to do 
with whether or not they are working or--
    Mr. Duffy. And I think that is a good point. If it is a 
safety net, is this a program that we should use as a 
transition? Because I think we are on the same page. We want to 
help people out.
    Ms. Couch. Right.
    Mr. Duffy. And we know people fall on hard times. They are 
our friends, our family members, our neighbors--
    Ms. Couch. Sure.
    Mr. Duffy. --and we want to have a system in place to help 
them.
    Ms. Couch. Right.
    Mr. Duffy. But is this a safety net that helps with the 
transition? Or can it be a lifestyle for folks?
    Ms. Couch. The issue right now is that it is not a safety 
net for very many people. Only one in four households are 
eligible for HUD housing--
    Mr. Duffy. That was not my question. Are you okay with it 
being a lifestyle, or a program for transition?
    Ms. Couch. I do not think it is a lifestyle. I think it is 
a safety net. I think people access it when they need it. And 
they cycle out of it when they do not need it anymore.
    Mr. Duffy. So would you be okay with a--
    Ms. Couch. The majority--
    Mr. Duffy. --time limit--
    Ms. Couch. --of households--
    Mr. Duffy. --on the program?
    Ms. Couch. Never. No. The majority of households--
    Mr. Duffy. So then it could be a lifestyle program, right?
    Ms. Couch. But it is not. When you look at the data that 
HUD has on its Web site, the majority of voucher households are 
in and out of the program within 5 years. And more than 50 
percent of the residents are elderly and disabled.
    Mr. Duffy. And if you remove the elderly and the disabled--
    Ms. Couch. Right.
    Mr. Duffy. --because there was a section--
    Ms. Couch. That is right. They are--sorry.
    Mr. Duffy. --and in the language we have a funding issue 
there.
    Ms. Couch. No, I am talking about the elderly and disabled 
people on the voucher program. So when you look at the people 
who participate in the voucher program, about half of them are 
elderly and disabled. And when you look at the length of stay 
data, most of them, more than half of them are out of the 
program within 5 years.
    Mr. Duffy. Excluding the disabled and the elderly--
    Ms. Couch. Right.
    Mr. Duffy. --if you have an able-bodied man or woman--
    Ms. Couch. Right.
    Mr. Duffy. --would you not agree that you could have a time 
limit on how long they could be on this program? Or that we 
should have some form of transition, whether it is a 
requirement to work or get an education?
    Ms. Couch. Right.
    Mr. Duffy. So people do not stay on the programs for a 
lifetime, and it truly becomes a safety net instead of a 
lifestyle?
    Ms. Couch. But to what end? If people leave--if people are 
forced out of the program into a housing market for which there 
is no housing affordable to them, these are the people who go 
back on the waiting list, who go into shelters, who become 
homeless--
    Mr. Duffy. Well--
    Ms. Couch. --who become--
    Mr. Duffy. --we also--
    Ms. Couch. --housing needs--
    Mr. Duffy. --do not you? If you continue to provide things 
for free and do not incentivize them to transition into the 
workforce, do we not see them potentially scam these programs 
not only for their lifetime, but it becomes generational. And 
that is my concern.
    Chairwoman Biggert. The gentleman's time has expired.
    The gentleman from Texas, Mr. Green, is recognized for 5 
minutes.
    Mr. Green. Thank you, Madam Chairwoman.
    I thank the witnesses, again, for their testimony. And 
while I would like to visit with all the witnesses, Mr. 
Gunsolley is from Houston, and I represent a good many of the 
persons that he will be serving.
    I would like to compliment you and congratulate you on 
receiving your new station in life effective April 18th, I 
believe. And you have mentioned some things that we would like 
to work with you on. So my office will be contacting you about 
some of the issues that you have raised.
    I would like to help everybody on the panel, but since he 
happens to be in an area that I serve, I am extending this 
invitation to him to work with him closely on some of these 
issues.
    Let us talk for a moment about project-based vouchers. 
Would you again give some additional indication as to why it is 
good to have flexibility with the project-based vouchers versus 
the individual vouchers?
    Mr. Gunsolley. Sure. Thank you. And I look forward to 
working with you as well.
    Project-based vouchers really allow other groups and the 
housing authority to leverage the value of the voucher. Because 
you can commit it for 15 years, you can take that to a bank and 
turn it into capital money to be able to build new housing or 
substantially rehabilitate housing.
    I have used it in a number of different locations, and have 
worked closely with the nonprofit communities to do supportive 
housing, homeless housing, different niche groups that they are 
providing services, but the people also need a home. And so by 
doing the project-based voucher, it gives them kind of the 
missing piece.
    The SEVRA bill had some more freedoms that made it a little 
bit easier for this program to run. In the current regulations, 
it is a difficult program to administer, and the housing 
authority does not receive any additional administrative fees 
to do it. So a lot of housing authorities do not do it because 
they are not incentivized to do so.
    Mr. Green. And do you have some language that you have had 
an opportunity to review that you would like to share with us? 
You can share it by way of my office.
    Mr. Gunsolley. I certainly could. The old SEVRA language 
also had many good improvements in it. But I will send you 
something.
    Mr. Green. Are there others who are in accord with this 
gentleman? If so, would you raise your hands, just so that I 
can, for the record, see how many people are in accord with--it 
looks--would you raise your hands a little higher? Sorry to do 
this in such an elementary way. One, two, three, it looks like 
everybody is.
    So let us let the record reflect--unless I am mistaken. If 
someone is not, perhaps I should ask you to raise your hand. 
Okay. Let us let the record reflect that everyone seems to be 
in agreement that we can improve the language.
    And now, I will go to a lady who is asking that I give her 
some consideration. And I do not have my list before me. Is 
this going to be Ms. Sanchez?
    Yes, ma'am. Would you pull your microphone closer? Yes, 
ma'am?
    Ms. Sard. My name is Barbara Sard.
    Mr. Green. Okay. Ms. Sard. You wanted to give a response?
    Ms. Sard. I wanted to add to what Mr. Gunsolley said, that 
particularly in the current soft real estate market, housing 
authorities could use the project-based vouchers strategy to 
lock in the use of vouchers at properties at lower rents. And 
so it actually is one of the few tools available in a market-
based program to reduce costs.
    After all, the vouchers depend on private landlords being 
willing to rent. But by making a long-term deal, as an agency 
can, they actually can both lock in desirable locations for 
voucher users, and potentially lower rents.
    As the market recovers, the rents would not have to keep 
pace because there would be this long-term contract. So it 
would be a very savvy strategy and it is important to make it 
more useful now for housing authorities.
    Mr. Green. The advocacy agencies seem to be in agreement 
with this. Am I correct?
    Would you like to give a comment, ma'am? And I apologize 
for not calling your names. My vision is not such that I can 
read them from this angle.
    Ms. Couch. I can barely see my paper. The Low Income 
Housing Coalition supports adding back in provisions from 
earlier SEVRA drafts that would expand housing authorities' 
ability to project-based vouchers. The draft SESA bill would 
allow housing authorities to extend the project-based voucher 
contract from the current 15 years to 20 years.
    But earlier drafts of SEVRA, including the December draft, 
had several other provisions, including site-based waiting 
lists and this bump up for--a small bump up for people who--
serving people who are homeless, people with disabilities in 
tight rental markets. All of which the Low Income Housing 
Coalition would support including.
    Mr. Green. I thank all of you. And I would like to work 
with you to try to improve the language. There are no 
assurances that can be given, but we can say to you that we are 
willing to work with you to try to improve the language.
    Madam Chairwoman, I thank you for the opportunity to be 
heard this morning. And I will yield back the balance of my 
time.
    Chairwoman Biggert. Thank you.
    I think I have just a couple of quick questions. And if you 
both do or do not, then I will proceed.
    Mr. Green. I obviously yield to the Chair.
    Chairwoman Biggert. Okay.
    Oh. I am sorry, Mr. Cleaver. You are recognized for 5 
minutes.
    Mr. Cleaver. Thank you.
    I regret that the gentleman from Wisconsin left. I was 
trying to get his attention to remain in some way because I 
would like to have a colloquy with him.
    I am not sure how appropriate or significant it is to the 
legislation. But I am not sure the legislation deals with the 
worthiness or unworthiness of tenants. I am not sure. I missed 
that part if it is in here.
    And so, I think we have to disagree and question 
legislation. And that is why we have two parties, the Majority 
and the Minority parties. If we all thought alike, one of us 
would be unnecessary.
    So I think this is healthy and good debate. And our Chair 
happens to be one of the people who is most civil and 
bipartisan in how things are done. And I appreciate her, even 
in the Minority.
    My concern is, I lived in public housing. Maybe I am the 
only one in Congress who has. And I do not know one single 
family living in public housing who had public housing joy 
parties. I have never heard one single family say, ``I cannot 
wait until I can get into public housing.''
    There may be people who were there, some generational 
movement. The people in my class, Carla Cloer, Frank Anderson, 
Tony Nelson, maybe one more. Lou lived in the projects with me. 
None of them live in the projects today. Just in my class.
    None of them live in the projects today. None of them are 
angry because they do not live in the projects today. And so I 
think somehow there is some kind of misconception.
    We are talking about people who would not otherwise have 
shelter. And are there some people who do bad things in public 
housing? Yes. There are some people who do bad things in 
Beverly Hills.
    And so I just felt the need to--I would like for my 
colleague not to operate under the assumption that people are 
standing in line trying to get into public housing because they 
just want to be there. They are standing in line because there 
are not enough vouchers. They are standing in line because it 
is the only place they can go.
    Now, I could call out names. I would not do it because I do 
not know whether this is on C-SPAN or not, of people who live 
in public housing who, because of their own issues, are never 
going to be able to live on their own. And when you have the 
deinstitutionalization that we are having with State hospitals, 
you are going to find more and more people on the street.
    But it is pointless to deliver this sermon to the deacon 
board. So, I apologize. But it was cathartic; I had to do it.
    But this bill does have some cost savings to become 
relevant--
    Chairwoman Biggert. If the gentleman would yield for a 
moment, I think that was very appropriate for you 
to say that. Thank you.
    Mr. Cleaver. Thank you.
    Chairwoman Biggert. You may continue.
    Mr. Cleaver. The cost savings that are in this bill, and 
administrative savings, and it deals--and the reason we are 
having that is because of a rent simplification inspection and 
streamlining and other provisions of the bill. Do any or all of 
you agree that there are some cost savings in the legislation?
    Voices. Yes.
    Mr. Cleaver. And if somebody does not, you could help me 
see there is none.
    Ms. Graham?
    Ms. Graham. I would agree there are definitely cost savings 
in this bill. Our recommendations would be given the downward 
pressure on funding that additional cost savings measures be 
implemented. But there are definitely cost savings in this 
bill.
    Mr. Cleaver. Mr. Gunsolley?
    Mr. Gunsolley. I was just going to reiterate and expand on 
Ms. Graham's point that there are still regulations in place 
that may hamper the full effectiveness of some of these 
changes.
    Just because we might move to a biannual or a tri-annual, 
annual income exam does not mean I still have to meet with the 
person every year for other reasons. And so, I just would 
caution a rush to cut our administrative fees prospectively.
    Mr. Cleaver. Your statement actually confirms what I was 
saying about the cost savings. And I hate that that would take 
place. But as you know, the atmosphere we are in up here is 
different.
    I do have other statements, Madam Chairwoman, but I 
appreciate the opportunity. I know I went over, but thank you 
very kindly.
    Chairwoman Biggert. Thank you. And the gentleman yields 
back.
    I just have a couple of quick questions.
    Mr. Bazzie, you applauded Chairwoman Capito for her work on 
the utility allowances section of the discussion draft before 
us today. And she worked on the SEVRA last Congress. Can you 
explain why this language is helpful to program administrators 
such as yourself?
    Mr. Bazzie. Sure. The amendment that Mrs. Capito 
successfully got through last time allows HUD to provide 
housing authorities with utility information that they 
apparently must use themselves to determine fair market rents 
throughout the country.
    Housing authorities such as mine operating in a multi-
county area probably have to deal with over 100 different 
utility companies when you consider public service districts 
and small municipal water companies. To try to gather all that 
information on consumption, rates, apply it to four different 
types of structures such as single family, apartments, mobile 
homes, semi-detached, it is an arduous task to get, probably a 
good solid 2 weeks of work just to gather the information.
    And we feel like if HUD has this utility information 
available, to please provide it to us. Let us use what probably 
is more current and accurate information than what we gather 
that changes continuously.
    Chairwoman Biggert. Thank you.
    And then Mr. Hiebert, the PHAs are responsible for 
approving unit rents under the voucher program based on 
reasonable rents in the area. It might be hard to know what a 
reasonable rent is right now with the housing market. But in 
your experience, are the rents generally reflective of the 
market? Are they too low or too high?
    Mr. Hiebert. That would really depend on the area. And that 
really depends on the fair market rent in the particular 
district. It may differ, as a matter of fact, from community to 
community. And so, that is difficult to say.
    They will be--and our community happens to be fairly 
reasonable. The fair market rent adequately reflects the 40th 
percentile in our community. But I cannot speak for the entire 
country. There is a wide difference from region to region.
    Chairwoman Biggert. Thank you.
    Ms. Sard?
    Ms. Sard. I probably should resist this temptation, but 
given your question, I wanted to suggest that one thing that 
was in an earlier version of the bill that was taken out would 
provide an objective test of whether agencies are making the 
right decisions about determining that rents are reasonable.
    The current policy is that agencies have to have a 
procedure and the quality control report looks at whether they 
follow their procedure. It does not actually look at the 
results, are the rents reasonable?
    And so I think one important change that HUD could make for 
both the voucher program and the project-based program is to 
use current evidence to come up with national recommendations 
about what is a good, sound policy to follow for determining 
rent reasonableness. And then hopefully, future committees 
would not have to come back to this question because there 
would actually be objective evidence.
    Chairwoman Biggert. Thank you.
    Mr. Bazzie, would you like to respond to that?
    Mr. Bazzie. No. I just wanted to clarify my answer to your 
first question regarding the Capito amendment, regarding the 
allowances. That amendment did ask HUD to provide this 
information to housing authorities.
    I have been informed that HUD has since indicated that is 
not information that they do have available. So perhaps this 
committee can in some way determine if there is a better 
methodology that can be used if HUD in fact does not have this 
available.
    Chairwoman Biggert. Okay. Thank you for that clarification.
    Mr. Sherman, do you have a question?
    Mr. Sherman. Yes. I would like to talk about manufactured 
housing for a bit. What are the rules on using the voucher for 
manufactured housing? And what should they be?
    Ms. Sard. One of the changes that Congress made in 1998 was 
to change the policy that applies to the use of vouchers in 
manufactured housing or mobile homes.
    Since 1998, the voucher subsidy can only pay for helping 
someone afford to rent the land on which a mobile home sits if 
they are buying the mobile home through a commercial loan. And 
that is the most common practice that you are paying basically 
a consumer loan for the mobile home, but renting the land.
    And the subsidy is limited to 40 percent of what would 
otherwise be available. There had been a policy in earlier 
versions of SEVRA that would treat that kind of transaction, 
paying consumer loans to buy the home and renting the land, the 
same as any other rental, and apply the standard FMR and 
payment standard to it.
    Our understanding is that policy change is particularly 
important in the Congressman's district in California, as well 
as in places like Vermont and others. It will expand the supply 
of affordable housing that can be used with vouchers. My 
testimony explains this in more detail, and states our support 
for this change.
    Mr. Sherman. But if somebody--if a landlord owns the mobile 
home and wants to rent it, there is a dramatic difference in 
this program between--I have a voucher. I have to decide where 
to live. And the voucher is good for brick and mortar housing, 
but is not good for--
    Ms. Sard. So let me clarify.
    Mr. Sherman. Yes.
    Ms. Sard. If a landlord owns the mobile home and the land--
    Mr. Sherman. Right.
    Ms. Sard. --and rents the whole thing--
    Mr. Sherman. Right.
    Ms. Sard. --the package, you can use the voucher there.
    Mr. Sherman. Okay. That was--
    Ms. Sard. That works.
    Mr. Sherman. You gave me the sophisticated answer to my 
initially simple question.
    Ms. Sard. Right.
    Mr. Sherman. I yield back. Thank you.
    Chairwoman Biggert. The gentleman has yielded back.
    Mr. Cleaver, do you have a question? No?
    Okay. With that, let me thank the witnesses, and thank you 
for the written testimony. You have all been very thorough. We 
really appreciate it. And it has been very helpful for us as 
far as the draft legislation.
    And I would say that the Chair notes that some members may 
have additional questions for this panel, which they may wish 
to submit in writing. Without objection, the hearing record 
will remain open for 30 days for members to submit their 
written questions to these witnesses and to place their 
responses in the record.
    I very much appreciate you all being here. It has been a 
good hearing.
    And with that, this hearing is adjourned.
    [Whereupon, at 11:27 a.m., the hearing was adjourned.]


                            A P P E N D I X



                             June 23, 2011


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