    [House Hearing, 114 Congress]
    [From the U.S. Government Publishing Office]

                       THE FUTURE OF HOUSING IN AMERICA:
                     A BETTER WAY TO INCREASE EFFICIENCIES
                        FOR HOUSING VOUCHERS AND CREATE
                            UPWARD ECONOMIC MOBILITY

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

                                     HEARING

                                   BEFORE THE

                                SUBCOMMITTEE ON
                             HOUSING AND INSURANCE

                                     OF THE

                        COMMITTEE ON FINANCIAL SERVICES

                         U.S. HOUSE OF REPRESENTATIVES

                        ONE HUNDRED FOURTEENTH CONGRESS

                                 SECOND SESSION

                                   __________

                               SEPTEMBER 21, 2016

                                   __________

           Printed for the use of the Committee on Financial Services

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                               Serial No. 114-101

                     HOUSE COMMITTEE ON FINANCIAL SERVICES

                        JEB HENSARLING, Texas, Chairman

    PATRICK T. McHENRY, North Carolina,  MAXINE WATERS, California, Ranking
        Vice Chairman                        Member
    PETER T. KING, New York              CAROLYN B. MALONEY, New York
    EDWARD R. ROYCE, California          NYDIA M. VELAZQUEZ, New York
    FRANK D. LUCAS, Oklahoma             BRAD SHERMAN, California
    SCOTT GARRETT, New Jersey            GREGORY W. MEEKS, New York
    RANDY NEUGEBAUER, Texas              MICHAEL E. CAPUANO, Massachusetts
    STEVAN PEARCE, New Mexico            RUBEN HINOJOSA, Texas
    BILL POSEY, Florida                  WM. LACY CLAY, Missouri
    MICHAEL G. FITZPATRICK,              STEPHEN F. LYNCH, Massachusetts
        Pennsylvania                     DAVID SCOTT, Georgia
    LYNN A. WESTMORELAND, Georgia        AL GREEN, Texas
    BLAINE LUETKEMEYER, Missouri         EMANUEL CLEAVER, Missouri
    BILL HUIZENGA, Michigan              GWEN MOORE, Wisconsin
    SEAN P. DUFFY, Wisconsin             KEITH ELLISON, Minnesota
    ROBERT HURT, Virginia                ED PERLMUTTER, Colorado
    STEVE STIVERS, Ohio                  JAMES A. HIMES, Connecticut
    STEPHEN LEE FINCHER, Tennessee       JOHN C. CARNEY, Jr., Delaware
    MARLIN A. STUTZMAN, Indiana          TERRI A. SEWELL, Alabama
    MICK MULVANEY, South Carolina        BILL FOSTER, Illinois
    RANDY HULTGREN, Illinois             DANIEL T. KILDEE, Michigan
    DENNIS A. ROSS, Florida              PATRICK MURPHY, Florida
    ROBERT PITTENGER, North Carolina     JOHN K. DELANEY, Maryland
    ANN WAGNER, Missouri                 KYRSTEN SINEMA, Arizona
    ANDY BARR, Kentucky                  JOYCE BEATTY, Ohio
    KEITH J. ROTHFUS, Pennsylvania       DENNY HECK, Washington
    LUKE MESSER, Indiana                 JUAN VARGAS, California
    DAVID SCHWEIKERT, Arizona
    FRANK GUINTA, New Hampshire
    SCOTT TIPTON, Colorado
    ROGER WILLIAMS, Texas
    BRUCE POLIQUIN, Maine
    MIA LOVE, Utah
    FRENCH HILL, Arkansas
    TOM EMMER, Minnesota

                         Shannon McGahn, Staff Director
                        James H. Clinger, Chief Counsel
                     Subcommittee on Housing and Insurance

                     BLAINE LUETKEMEYER, Missouri, Chairman

    LYNN A. WESTMORELAND, Georgia, Vice  EMANUEL CLEAVER, Missouri, Ranking
        Chairman                             Member
    EDWARD R. ROYCE, California          NYDIA M. VELAZQUEZ, New York
    SCOTT GARRETT, New Jersey            MICHAEL E. CAPUANO, Massachusetts
    STEVAN PEARCE, New Mexico            WM. LACY CLAY, Missouri
    BILL POSEY, Florida                  AL GREEN, Texas
    ROBERT HURT, Virginia                GWEN MOORE, Wisconsin
    STEVE STIVERS, Ohio                  KEITH ELLISON, Minnesota
    DENNIS A. ROSS, Florida              JOYCE BEATTY, Ohio
    ANDY BARR, Kentucky                  DANIEL T. KILDEE, Michigan
    KEITH J. ROTHFUS, Pennsylvania
    ROGER WILLIAMS, Texas

                               C O N T E N T S

                                  ----------
                                                                       Page
    Hearing held on:
        September 21, 2016...........................................     1
    Appendix:
        September 21, 2016...........................................    37

                                   WITNESSES
                         Wednesday, September 21, 2016

    Blom, Dominique, Deputy Assistant Secretary, Office of Public
      Housing Investments, U.S. Department of Housing and Urban
      Development....................................................     4
    Lovell, Cheryl, Executive Director, the St. Louis Housing
      Authority......................................................    10
    Sard, Barbara, Vice President, Housing Policy, the Center on
      Budget and Policy Priorities (CBPP)............................     5
    Thrope, Deborah, Staff Attorney, the National Housing Law Project
      (NHLP).........................................................     7
    Young, Ailrick, Executive Director, the Laurel Housing Authority.     9

                                    APPENDIX

    Prepared statements:
        Blom, Dominique..............................................    38
        Lovell, Cheryl...............................................    47
        Sard, Barbara................................................    55
        Thrope, Deborah..............................................    70
        Young, Ailrick...............................................    83

                  Additional Material Submitted for the Record

    Waters, Hon. Maxine:
        Written statement of the Council of Large Public Housing
          Authorities................................................    91
        Written statement of the National Low Income Housing
          Coalition..................................................    94

                       THE FUTURE OF HOUSING IN AMERICA:
                     A BETTER WAY TO INCREASE EFFICIENCIES
                        FOR HOUSING VOUCHERS AND CREATE
                            UPWARD ECONOMIC MOBILITY

                                  ----------

                         Wednesday, September 21, 2016

                 U.S. House of Representatives,
                                Subcommittee on Housing
                                         and Insurance,
                               Committee on Financial Services,
                                                       Washington, D.C.
        The subcommittee met, pursuant to notice, at 10:01 a.m., in
    room 2128, Rayburn House Office Building, Hon. Blaine
    Luetkemeyer [chairman of the subcommittee] presiding.
        Members present: Representatives Luetkemeyer, Royce,
    Garrett, Pearce, Posey, Ross, Barr, Rothfus, Williams; Cleaver,
    Velazquez, Capuano, Clay, Ellison, Beatty, and Kildee.
        Ex officio present: Representatives Hensarling and Waters.
        Also present: Representative Palazzo.
        Chairman Luetkemeyer. The Subcommittee on Housing and
    Insurance will come to order. Without objection, the Chair can
    call a recess of the subcommittee at any time.
        Today's hearing is entitled, ``The Future of Housing in
    America: A Better Way to Increase Efficiencies for Housing
    Vouchers and Create Upward Economic Mobility.''
        Before we begin, I would like to thank the witnesses for
    appearing before the subcommittee today. I look forward to your
    testimony.
        I now recognize myself for 3 minutes to give an opening
    statement.
        Today's hearing serves as another opportunity for this
    subcommittee to look at the state of housing in our Nation and
    to examine potential changes to Federal housing programs that
    would maximize the investment of taxpayer funds and serve more
    families in a smarter way.
        Too often, the regulatory regime surrounding public housing
    authorities (PHAs) has the ultimate effect of stifling
    opportunities for tenants. Rules preventing flexibility and
    modernization for PHAs mean more work and fewer served. Archaic
    rules surrounding housing vouchers limit the ability of
    residents to pursue financial independence.
        All of this, combined with a budget situation that is not
    improving, means that we need to think differently about the
    way we administer housing programs.
        With H.R. 3700, the Housing Opportunity Through
    Modernization Act, this subcommittee worked together because we
    shared a similar vision. We looked at the programs and
    processes of HUD and the Rural Housing Service to see where we
    could enact commonsense reforms and make both Departments work
    better for the American people. Together, and with incredible
    support from housing industry leaders, residents, and
    advocates, we made meaningful strides to raise up those in need
    and give more Americans the opportunity, as I always say, to
    have not just a place to live but a place to have a life.
        That is also the objective of the Speaker's Task Force on
    Poverty. Speaker Ryan has charged each of us with developing
    policy solutions that foster independence and freedom and allow
    for a better way.
        Today, we will hear from a panel of witnesses who will
    offer ideas for reform of rules impacting public housing
    authorities and the Housing Choice Voucher Program, among
    others. We will also discuss the Administration's housing
    choice voucher mobility demonstration program.
        It is my hope that the spirit that fostered H.R. 3700
    continues to lead us to more collaborative reforms. We can and
    should continue to push for meaningful change that creates
    upward economic mobility and better stewardship of taxpayer
    dollars.
        We have a distinguished panel with us today, including
    Cheryl Lovell, executive director of the St. Louis Housing
    Authority. This committee is always glad to see and hear from
    fellow Missourians.
        My colleagues and I look forward to each of your
    testimonies.
        The Chair now recognizes the ranking member of the
    subcommittee, the gentleman from Missouri, Mr. Cleaver, for 5
    minutes for an opening statement.
        Mr. Cleaver. Thank you, Mr. Chairman, and members of the
    subcommittee.
        I would also like to take this opportunity to welcome those
    of you who are here to provide us with information. We have an
    opportunity today to take a very close look at the Section 8
    Housing Choice Voucher Program as well as discuss and perhaps
    receive some suggestions from you on the best ways to increase
    and enhance the portability process for residents who rely on
    these vouchers.
        Everyone here knows the importance of housing choice
    vouchers in our overall public housing strategy. Administered
    by the public housing authorities, these vouchers enable low-
    income individuals to live in private-market rental units by
    providing funding that makes up the difference of the amount
    the individual can afford and the rental payment itself.
    Currently, about 2.2 million Americans rely on this program.
        These vouchers go to some of our most vulnerable
    populations: extremely low-income families; seniors; and the
    disabled. All parents want the best outcome for their children,
    whether they are poor or rich, and providing a child with a
    safe, reliable home is vital to their growth, just as helping
    children access educational opportunity is vital to their
    overall success and well-being.
        By improving upon the portability process, we will help
    families move to areas with lower rates of poverty. A number of
    our witnesses have cited a 2015 study by Harvard Professor Raj
    Chetty which finds that moving to a lower-poverty neighborhood
    significantly improves college attendance rates and earnings
    for children who were young when their families moved.
        Though we have some conflict on some parts of this program,
    I think that you, as witnesses, can provide us with valuable
    information about HUD's more recent actions on this issue,
    including the President's Fiscal Year 2017 funding request for
    a mobility demonstration program, which I hope we can get
    through. I think it is critically important for us to
    demonstrate this program so that when we come back next year we
    will be able to put programs like this into play.
        Last year, this committee was able to push past the
    paralyzing partisan divide, due to the leadership of our
    chairman, and we passed a long-needed overhaul of many of our
    public housing policies. And without the support of many in
    this room today, H.R. 3700 would not have been possible.
        So I want to thank all of you who helped make it possible,
    and we need your help now.
        I yield back, Mr. Chairman.
        Chairman Luetkemeyer. I thank the gentleman.
        Today, we welcome the testimony of Ms. Dominique Blom,
    Deputy Assistant Secretary of the Office of Public Housing
    Investments, U.S. Department of Housing and Urban Development;
    Ms. Barbara Sard, vice president of housing policy at the
    Center on Budget Policies and Priorities; Ms. Deborah Thrope,
    staff attorney at the National Housing Law Project; Mr. Ailrick
    Young, executive director of the Laurel Housing Authority in
    Laurel, Mississippi; and Ms. Cheryl Lovell, the executive
    director of the St. Louis Housing Authority in St. Louis,
    Missouri.
        Each of you will be recognized for 5 minutes to give an
    oral presentation of your testimony, and without objection,
    your written statements will be made a part of the record.
        Before we turn to questioning, I would like to extend a
    special welcome to my fellow Missourian on today's panel, and
    yield to the gentleman from St. Louis, Mr. Clay, for an
    introduction.
        Without objection, the gentleman from Missouri is
    recognized.
        Mr. Clay. I thank you, Mr. Chairman. And just very briefly,
    I want to introduce my constituent, who has advanced the cause
    of quality, affordable housing for thousands of low- and
    moderate-income residents in St. Louis.
        Ms. Cheryl Lovell, the executive director of the St. Louis
    Housing Authority, became the executive director just about the
    same time that I was first elected to Congress. Some of the
    members of the subcommittee may recall that for many years
    prior to that, the St. Louis Housing Authority was considered a
    symbol of dysfunction, despair, and decline.
        Today, that is no longer the case, and much of that
    improvement is because of Cheryl's tenacity and commitment to
    doing things right. During her tenure, the HUD rating score for
    the St. Louis Housing Authority has risen from a dismal 14 to
    an admirable 92.
        During the last 16 years, the St. Louis Housing Authority
    has developed over 2,200 new rental units, of which over 1,000
    units are public housing; and they have used public and private
    partnerships, leveraging $200 million in public money with $325
    million of private funds, for a total development portfolio of
    $525 million in completed projects.
        Cheryl has also worked closely with my staff and I to make
    Section 8 work better for more low-income citizens and to also
    leverage other HUD support, such as HOPE VI grants, which has
    helped to transform shameful public housing failures into
    attractive and welcoming housing where citizens can live in
    dignity.
        I am pleased to welcome her here, Mr. Chairman, and I thank
    you for the opportunity to introduce her. I yield back.
        Chairman Luetkemeyer. I thank the gentleman.
        Ms. Lovell, as you can see, you have a very passionate
    advocate in Mr. Clay for housing issues, and we certainly are
    excited to have him on the committee, and he has done a
    fantastic job for you.
        With that, Ms. Blom, you are recognized for 5 minutes.

    STATEMENT OF DOMINIQUE BLOM, DEPUTY ASSISTANT SECRETARY, OFFICE
     OF PUBLIC HOUSING INVESTMENTS, U.S. DEPARTMENT OF HOUSING AND
                           URBAN DEVELOPMENT

        Ms. Blom. Thank you. Good morning.
        Chairman Luetkemeyer, Ranking Member Cleaver, and members
    of the subcommittee, thank you for allowing me this opportunity
    to discuss how HUD is working to make its housing programs more
    efficient while expanding economic mobility for Americans who
    count on us. I am Dominique Blom, the Deputy Assistant
    Secretary for the Office of Public Housing Investments at HUD.
        The Housing Choice Voucher Program, which the committee has
    asked specifically about, is one of HUD's most important
    initiatives in this ongoing effort. HUD provides direct housing
    assistance to 2.3 million households living in public housing
    and the project-based rental housing program, and supports
    another 2.2 million Americans who are elderly, disabled, and
    families with children through housing choice vouchers. This
    support is vital to helping these citizens keep a roof over
    their head.
        In fact, without housing choice vouchers, much of the
    progress we have made as part of President Obama's Opening
    Doors plan to end homelessness in our Nation, implemented in
    partnership with the Congress, would not have been possible.
    HUD is a principal partner in fulfilling the President's vision
    of a Nation in which everyone has a secure home. That is why we
    have stepped up our work through efforts like the Family
    Unification Program to help end youth homelessness, especially
    among Americans who are involved in the foster care system,
    many of whom are often at greatest risk of becoming homeless.
        In addition to helping more Americans secure a stable home,
    HUD is also working to ensure that more of the families we
    support live in neighborhoods of opportunity, and housing
    choice vouchers are a central part of this effort. As our
    Moving to Opportunities demonstration has shown, mothers who
    use their vouchers to move to safer, low-poverty neighborhoods
    experience a host of health benefits, including a 50 percent
    lower rate of diabetes and a 42 percent reduction in severe
    obesity, and the youngest children of these mothers have higher
    rates of college attendance and 31 percent higher earnings as a
    result of their move.
        We look forward to working with the members of the
    committee to make this program even more effective in the
    future.
        Further, HUD continues our efforts to expand the Moving to
    Work (MTW) demonstration. For 20 years, the MTW initiative has
    given public housing authorities greater flexibility to invest
    in innovation and use Federal resources in a smarter way for
    the families that they serve. By expanding this important
    effort to 100 more public housing authorities, HUD will learn
    from new policy interventions and apply that knowledge to our
    entire housing authority portfolio, to include simplifying the
    administration of housing assistance programs.
        The MTW expansion will help us build on other actions HUD
    has undertaken to reduce Administration requirements for PHAs
    across the Nation. HUD held a multiyear review of existing
    requirements, resulting in a streamlining rule to make
    administration of a number of PHA programs more efficient amid
    reduced funding.
        And HUD believes our new rules support the progress we
    anticipate as a result of two important bills enacted in the
    past year by Congress, namely the Fixing America's Surface
    Transportation Act and the Housing Opportunities Through
    Modernization Act.
        Within its existing authority, HUD is working to streamline
    and create more efficiencies so that we deliver for the people
    who count on us directly while also strengthening our Nation as
    a whole. We look forward to working with this committee and
    with your colleagues in Congress to continue the important
    progress we have already achieved.
        Thank you, and I would be happy to answer any questions.
        [The prepared statement of Ms. Blom can be found on page 38
    of the appendix.]
        Chairman Luetkemeyer. Thank you, Ms. Blom.
        Ms. Sard, you are recognized for 5 minutes.

    STATEMENT OF BARBARA SARD, VICE PRESIDENT, HOUSING POLICY, THE
             CENTER ON BUDGET AND POLICY PRIORITIES (CBPP)

        Ms. Sard. Thank you, Chairman Luetkemeyer, Ranking Member
    Cleaver, and members of the subcommittee. I am Barbara Sard,
    vice president for housing policy at the Center on Budget and
    Policy Priorities. Thank you for giving me the opportunity to
    testify this morning, and particular thanks to the two of you
    and your staff and the members of this committee for your
    leadership and persistence in enacting H.R. 3700, the first
    comprehensive reform of the low-income housing programs in
    nearly 2 decades.
        The recent report of the Speaker's Task Force on Poverty,
    Opportunity, and Upward Mobility recommends in part that we
    should enhance the portability of housing vouchers and reform
    the fragmented system of thousands of public housing agencies.
    We agree with those recommendations and we think they form the
    foundation for a new stage of bipartisan work to improve the
    low-income housing programs.
        These recommendations are based on a strong body of
    evidence that the chairman referred to, and Ms. Blom referred
    to, which shows that growing up in safe, low-poverty
    neighborhoods can improve results for adults and children,
    including, most notably, an increase in earnings among young
    adults of, on average, $3,500 per year--very significant
    impacts.
        Unfortunately, only a small share of families now use
    vouchers in low-poverty areas--just one in eight of the
    families with children served by the program--though the
    program is effective for poor African-American and Hispanic
    families with vouchers, who are nearly twice as likely as other
    poor minority children to grow up in low-poverty neighborhoods.
    Yet, we have 343,000 children in families with vouchers living
    in extremely poor neighborhoods today, and we need to do better
    to help those children and others like them to have a better
    chance at a better life.
        One of the major barriers to families making such moves to
    opportunity is the fragmented system of voucher administration,
    as the Speaker's Task Force noted. More than 1,500 housing
    authorities administer vouchers in metropolitan areas. In most
    of these areas, one agency administers the program in the
    central city, and one or more agencies serve the surrounding
    suburban communities. In many cases, a lot more agencies
    surround the central city.
        For families, this fragmentation means that they are less
    likely to get useful advice about opportunities that other
    communities offer and more likely to have trouble using their
    voucher to find housing because they don't get information
    about landlords who will rent to them, and moving to another
    housing authority's jurisdiction requires them to deal with yet
    another bureaucracy whose staff may not be very welcoming to
    what they consider outsiders.
        For Federal taxpayers, this fragmentation increases costs
    of Federal oversight and of local agency administration, as the
    U.S. Government Accountability Office has found. Federal
    policymakers can help solve this problem.
        As Mr. Cleaver mentioned, one opportunity in front of you
    is to agree with the Senate and fund the regional housing
    mobility demonstration that the Administration proposed. This
    is a very important start.
        But this modest demonstration is not enough. Encouraging
    housing authorities to consolidate or form a consortia enables
    them to retain their identity and their individual boards of
    directors, which I am sure you appreciate is very politically
    important, but they still get to combine their administrative
    functions and create economies of scale and efficiencies.
    Helping them do this ought to be a goal of Federal policy.
        But few agencies are going to take this step unless it
    really pays for them to do it, if it really creates
    efficiencies. And currently, policy doesn't do that.
        The key here is to enable agencies that form a consortia to
    have a single funding contract with HUD. It has been more than
    2 years since HUD proposed a rule change to allow that to
    happen, and HUD has not followed through.
        Congress can expedite these changes by directing HUD to
    permit consortia to have a single voucher funding contract
    without delay.
        It is also important to modify administrative fee policy to
    remove disincentives to form consortia and encourage greater
    use of vouchers in high-opportunity areas. My testimony
    includes other recommendations that will facilitate consortia.
        But one thing Congress should not do is advance or enact
    the small agency reform bill.
        Thank you.
        [The prepared statement of Ms. Sard can be found on page 55
    of the appendix.]
        Chairman Luetkemeyer. Thank you, Ms. Sard.
        Ms. Thrope, you are recognized for 5 minutes.

       STATEMENT OF DEBORAH THROPE, STAFF ATTORNEY, THE NATIONAL
                       HOUSING LAW PROJECT (NHLP)

        Ms. Thrope. Thank you.
        Good morning, Chairman Luetkemeyer, Ranking Member Cleaver,
    and distinguished members of the subcommittee. Thank you for
    the opportunity to testify today on increasing efficiencies for
    housing vouchers and creating upward mobility.
        I am here on behalf of the National Housing Law Project, a
    private, nonprofit organization that provides legal and
    technical assistance to local housing advocates, tenant
    leaders, and public officials nationwide. NHLP hosts the
    National Housing Justice Network, a vast field network of over
    1,000 community-level housing advocates and tenant leaders. Our
    work with local advocates who deal with the day-to-day problems
    and opportunities presented by implementation of housing laws
    informs NHLP's policy advocacy, including the views that I am
    going to express today.
        The Housing Choice Voucher Program has great potential to
    provide housing choice and mobility to families nationwide. The
    cornerstone of the voucher program is the opportunity to move
    to neighborhoods with high-performing schools, medical
    services, quality jobs, and other amenities.
        And yet, an increasing number of poor families live in
    areas of highly concentrated poverty where over 40 percent of
    residents are low-income. Even families who are lucky enough to
    receive a Section 8 voucher remain segregated in low-rent,
    high-poverty neighborhoods.
        There are several reasons for this. Some voucher tenants
    choose to live in lower-income neighborhoods to be near
    friends, family, a local church, medical care, or other support
    networks.
        That is why vouchers are only part of the multifaceted
    national approach to address housing instability and
    homelessness. National housing policy must also consider the
    preservation of affordable housing and community investment and
    revitalization.
        In addition, for the families who wish to move to more
    economically diverse neighborhoods with a voucher, housing
    choice is limited. Voucher tenants across the country report
    that they cannot use their voucher in the private rental market
    and often end up returning to high-poverty areas with or
    without their voucher, because if they can't use their voucher,
    they have to give it back. And this is true even for families
    who have spent sometimes 10 to 15 years on the voucher wait
    list.
        In order to maximize the effectiveness of the voucher
    program, policymakers must prioritize eliminating the barriers
    families face when they try to use their voucher in that
    private market.
        First, in many places the value of a voucher does not
    reflect market rent, making it difficult, if not impossible,
    for families to find a place they can afford. The value of a
    voucher is primarily based on fair market rents, or FMRs.
        When HUD sets the FMR below market, the maximum assistance
    level for a voucher tenant is so low that families are
    effectively barred from many neighborhoods, and particularly
    areas of opportunity. If HUD revised its FMR methodology,
    voucher families would experience greater housing choice and
    mobility.
        Second, voucher families may find there is a shortage of
    landlords willing to rent to assisted families. In San Diego,
    for example, there are reportedly enough vouchers to end
    veteran homelessness, although not enough landlords willing to
    take them. It is important to implement policies to incentivize
    and increase levels of landlord participation.
        Third, mobility counseling is an essential component of the
    voucher program because it educates families about the
    advantages of moving to higher-opportunity areas and provides
    the support and resources to complete a successful housing
    search. We therefore fully support the Administration's
    proposal for a new housing choice voucher mobility
    demonstration.
        Last, there are nearly 4,000 PHAs administering public
    housing and/or Section 8 vouchers in this country. This
    structure creates real challenges for tenants and can greatly
    restrict mobility because: one, it is inefficient and confusing
    for tenants who have to apply to a number of different wait
    lists in one metro area; and two, it creates portability
    problems when tenants have to jump through administrative hoops
    to move to the jurisdiction of another PHA.
        To resolve the issues that arise when tenants face
    jurisdictional boundaries, Congress should enact policies that
    will encourage PHAs to form consortia, such as the provision in
    H.R. 4816 that allows agencies participating in a consortium to
    fully merge reporting applications.
        While the Small Public Housing Agency Opportunity Act, or
    H.R. 4816, includes this important provision regarding
    consortia, parts of the bill run the risk of negatively
    impacting voucher families. The bill essentially calls for the
    deregulation of small PHAs by allowing full funding
    flexibility. As we have seen through the Moving to Work
    demonstration program, though, financial flexibility can lead
    to a significant reduction in the number of families served by
    Federal dollars.
        H.R. 4816 also includes a rent demonstration that could
    cause extreme financial hardship to many tenants. A tiered rent
    system, gross rents, and unlimited minimum rents will likely
    harm the most vulnerable families.
        My written testimony includes a number of additional ways
    that this bill could negatively impact tenants.
        Congress can and should take steps to eliminate barriers to
    improve housing choice and mobility for voucher families. Thank
    you.
        [The prepared statement of Ms. Thrope can be found on page
    70 of the appendix.]
        Chairman Luetkemeyer. Thank you.
        With that, we recognize Mr. Young for 5 minutes.

      STATEMENT OF AILRICK YOUNG, EXECUTIVE DIRECTOR, THE LAUREL
                           HOUSING AUTHORITY

        Mr. Young. Good morning, Chairman Luetkemeyer, Ranking
    Member Cleaver, and members of the Housing Subcommittee. Thank
    you for the opportunity to appear before you this morning.
        My name is Ailrick Young and I am the executive director of
    the housing authority of the city of Laurel, Mississippi.
    Although this testimony is representative of my own personal
    experience, I am also here representing my colleagues at public
    housing agencies across the country who have shared in my
    experiences.
        I want to thank the subcommittee for your work on passing
    the Housing Opportunity Through Modernization Act. I also want
    to thank Congressman Palazzo for introducing and sponsoring the
    Small Public Housing Agency Opportunity Act of 2016, H.R. 4816.
    He and his staff have been invaluable assets to small housing
    authorities and to the affordable housing community in general.
        H.R. 4816 can offer solutions to allow small agencies to,
    among other things, increase efficiencies for housing choice
    vouchers, create upward economic mobility, and offer better
    housing solutions for their communities. The bill strives to
    find the appropriate balance between responsible government
    oversight and additional flexibilities to make sure agencies
    are able to responsibly provide safe and decent housing.
        H.R. 4816 is designed to assure the long-term viability and
    effectiveness of small agencies and the portfolios they manage.
    The bill encourages flexibility and enables smaller agencies
    managing fewer than 550 units of federally-assisted housing to
    explore innovative approaches to determining tenant rents while
    reducing administrative burdens unique to smaller agencies.
        It accomplishes this by streamlining reporting and other
    regulatory burdens. Many of the burdensome reporting
    requirements not only take valuable time away from staff who
    could be meeting the needs of those whom we serve, but many of
    the reporting requirements are not even required for HUD's
    multifamily program.
        If adopted, H.R. 4816 would also increase HUD's efficiency
    through more manageable and appropriate oversight. Smaller
    agencies typically perform well on all of HUD's assessments and
    tend to still superbly carry out their mission to provide
    affordable housing. Small agencies like Laurel need the
    flexibilities provided in H.R. 4816 in order to cope with this
    harsh reality and to continue to provide high-quality, safe,
    and affordable housing in our communities.
        I understand that you are also looking at regionalization
    of housing--of the Housing Choice Voucher Program. I believe
    that mandatory consolidation of agencies is a bad idea.
    Creating voluntary programs where agencies can choose to work
    together and where they can receive regulatory flexibilities
    that make this cooperation easier and feasible is a worthy
    goal.
        Although the Laurel Housing Authority is a small agency
    without vouchers, our jurisdiction is included in a larger
    regional voucher program. Being local, the public housing
    residents of the community of Laurel can easily assess our
    agency services, while voucher holders and applicants do not
    have the same level of access.
        This is critical to eligible families who are looking to
    receive housing assistance. Many of our residents have
    children, they are trying to hold down a job, are elderly, or
    do not have access to their own transportation. Easy access to
    our agency significantly increases their ability to apply for
    housing, interview for a unit, or interact with staff at our
    agency.
        I thank you for the work to help us serve our residents
    better, and I stand ready, with my affordable housing peers,
    NAHRO, and PHADA, to assist you as best we can in moving
    responsible small agency reforms like H.R. 4816 forward. I am
    happy to answer any questions that you may have.
        Thank you.
        [The prepared statement of Mr. Young can be found on page
    83 of the appendix.]
        Chairman Luetkemeyer. Thank you, Mr. Young.
        And Ms. Lovell, you are recognized for 5 minutes. Welcome.

     STATEMENT OF CHERYL LOVELL, EXECUTIVE DIRECTOR, THE ST. LOUIS
                           HOUSING AUTHORITY

        Ms. Lovell. Good morning, Chairman Luetkemeyer, Ranking
    Member Cleaver, and other members of the Housing and Insurance
    Subcommittee.
        First, I want to thank Congressman Clay for his
    introduction. I have worked with his office for many years and
    we have been able to accomplish a lot in our area, with the
    assistance of Congressman Clay's office.
        My name is Cheryl Lovell and I am the executive director of
    the St. Louis Housing Authority. I am pleased to be here today
    to provide you information and insight on the proposed
    demonstration program for mobility counseling for families
    using housing choice vouchers. The demonstration program would
    allow public housing agencies to collaborate on initiatives to
    assist low-income families using existing vouchers to move to
    areas of opportunity.
        The government structure in St. Louis is relatively unique.
    The City of St. Louis is a city that is not in a county. The
    City is surrounded by St. Louis County, which contains almost
    90 municipalities.
        St. Louis County has a separate housing authority.
    Together, the housing authorities serve almost 13,000 families
    in the Housing Choice Voucher Program. Approximately 95 percent
    of these families are African-American, and the average income
    for families is about $12,500 a year. The families served are
    about half elderly and disabled and the other half families
    with children, mostly single parents.
        For many years, the St. Louis Housing Authority and the
    Housing Authority of St. Louis County have allowed voucher
    holders to rent units in each other's jurisdiction without
    using the portability process. The jurisdictional sharing
    process allows families a broader choice of units in the
    metropolitan area.
        Despite the efforts of both housing authorities, the
    housing choice voucher units are largely concentrated in areas
    of minority population or poverty. To address the concentration
    of voucher utilization, the St. Louis Housing Authority and the
    Housing Authority of St. Louis County are collaborating to
    design and implement a small mobility counseling program.
        The program focuses on moving families to areas with a
    concentration of poverty of less than 10 percent. Participation
    in the program is voluntary and open to all new or existing
    clients of both housing authorities. Our program is funded by a
    small, one-time grant which supports the program for 12 to 14
    months. Our hope is that during the design phase, additional
    funding can be identified to continue and expand the program.
        The St. Louis metropolitan area is one of the most
    segregated cities in the country and the poverty rate of
    African-Americans is nearly 3 times higher than the poverty
    rate of the remaining population. While the current program is
    early in the development stage and will initially serve a
    limited number of families, both agencies view the program as
    critical to their missions.
        Providing families with extra services they may need to
    take advantage of areas of greater opportunity is a small step
    towards addressing historic segregation, and will provide
    participating families with a path to potentially break the
    cycle of poverty. Like St. Louis, many older urban areas remain
    segregated. As economic disparity tends to follow patterns of
    segregation, housing choice voucher families in many areas live
    in neighborhoods with a high concentration of poverty.
        Creation of a demonstration program will evaluate the
    effectiveness and efficiency of regional mobility programs and
    will provide an opportunity for HUD and their partnering
    housing authorities to develop innovative solutions to move
    families to areas of higher opportunity. A demonstration
    program also allows HUD to determine which solutions provide
    the best outcome and develop best practices.
        The results of a demonstration program could assist other
    housing authorities to develop and implement mobility programs.
    We hope that the results of the demonstration program will
    provide insight on how to increase the number and size of
    programs in areas where voucher holders are highly concentrated
    and areas of poverty.
        It is important to note that the award of demonstration
    program need not be equally distributed across the regions of
    the country but should focus on the areas with the greatest
    need and the strongest proposals for a mobility program.
        Funding of a demonstration program is important, as housing
    authorities currently lack resources to create such programs.
    Administrative fees for Housing Choice Voucher Programs have
    not been fully funded for several years. As have most housing
    authorities nationwide, both the St. Louis Housing Authority
    and the Housing Authority of St. Louis County have undertaken
    significant cost-cutting measures, including significant
    reductions in staff, to continue to operate their program.
        The proposed funding levels of the administrative fee does
    not provide sufficient resources to provide staff necessary to
    create the mobility counseling program. Funding of a
    demonstration program would provide the necessary resources to
    initially design and implement programs and potentially
    identify additional resources to maintain a program.
        Given the potential benefit that moving to a low-poverty
    area can have for a family, providing the authorization funding
    to a mobility demonstration program is a positive step toward
    finding solutions to persistent issues with segregation. It has
    been 50 years since the Fair Housing Act was enacted. The low-
    income families are often stuck in neighborhoods that offer
    little opportunity to change their lives.
        While mobility counseling programs should not replace
    programs that revitalize existing neighborhoods to generate new
    economic opportunities, a mobility demonstration program could
    assist in developing solutions that offer families choices.
        Thank you for inviting me to testify.
        [The prepared statement of Ms. Lovell can be found on page
    47 of the appendix.]
        Chairman Luetkemeyer. Thank you, Ms. Lovell.
        With that, I recognize myself for questions.
        Ms. Blom, as we were going through the discussion here it
    appeared that most of the witnesses addressed the
    Administration's mobility demonstration program, and I didn't
    really catch from your testimony whether you approve,
    disapprove, support, or don't support it. Can you give me a
    definitive answer on whether you do or do not support the
    mobility demonstration program?
        Ms. Blom. Unequivocally, the Department does support the
    mobility demonstration program. The Administration has sought,
    as part of its Fiscal Year 2017 budget, to include $15 million
    for this mobility demonstration: $12 million of that would go
    directly to PHAs that work as part of the mobility
    demonstration; and $3 million of that would be used for an
    evaluation of the program.
        Chairman Luetkemeyer. Perfect. Thank you very much.
        Ms. Sard, you began the discussion--at least during your
    discussion you made the comment with regards to consolidation
    and forming consortiums as a way to address some issues and
    problems. Can you discuss the difference between a
    consolidation and a consortium, what problems you have, and if
    you have already analyzed it, whether you are going to save any
    money by doing this? Very quickly.
        Ms. Sard. We think that consolidation would be ideal to
    reduce the number of agencies and expand agencies' borders so
    families could move freely about the region--
        Chairman Luetkemeyer. Are you going to save any money doing
    that?
        Ms. Sard. I'm sorry?
        Chairman Luetkemeyer. Will you save any money doing that?
        Ms. Sard. We expect that you would. Right--
        Chairman Luetkemeyer. Have you done an analysis of how
    much?
        Ms. Sard. We estimate that there is now about $40 million
    in additional administrative fees that is paid to agencies
    because they are small, so some of that could be saved and
    that--
        Chairman Luetkemeyer. Do you have a percentage of that? 10
    percent? 20 percent?
        Ms. Sard. That is a small percentage of the overall amount,
    but it is really important to make that change because it is a
    disincentive now to do the right thing, which is to consolidate
    or form consortia.
        Chairman Luetkemeyer. All right. Very good. I want to be
    able to get Mr. Young's and Ms. Lovell's opinions on that.
        You kind of addressed it, Mr. Young, in your testimony,
    saying you didn't approve of the consolidation, but kind of
    alluded to maybe a consortium of working together on certain
    issues. Would you like to explain that just a little bit,
    please?
        Mr. Young. Yes, sir, Mr. Chairman. I think in most cases
    when we have local input and involvement in these changes, for
    example, it works better. There are instances where as
    governmental entities overlap and they consolidate and the
    housing authorities consolidate, as well, but it works better
    when that is worked at the local level and they worked out
    whether or not certain services that they can share. When it is
    mandated, I think if it is mandated it will not work as well as
    allowing agencies and governmental entities--
        Chairman Luetkemeyer. Okay. Do you share with other PHAs
    any sort of consortium-type things that would help you right
    now that you can point to as a way that you are working
    together on certain things?
        Mr. Young. Yes, sir, Mr. Chairman. We share as far as
    procurement.
        Chairman Luetkemeyer. Okay. Very good.
        Ms. Lovell, would you like to address that question? You
    have some experience, apparently, because you work together,
    both the city and the county. Tell us your experiences on that
    and whether you would agree or disagree with Ms. Sard here on
    consolidation versus consortium.
        Ms. Lovell. We work together but the agencies remain
    independent. The consolidation and consortium issue really is
    mostly directed at very small housing authorities, and our two
    housing authorities are actually quite large, so we don't
    really have a lot of issues in common because of the two large
    housing authorities.
        The sharing of jurisdiction does create a lot of
    efficiencies between our two agencies because the formal
    portability process is very cumbersome and very time-consuming.
        Chairman Luetkemeyer. Okay.
        With regards to Mr. Palazzo's bill, just a kind of quick
    question for a couple of you with regards to the rules and
    regulations he is trying to streamline, can you give us an
    example, Mr. Young, of some of the rules and regulations that
    he is trying to streamline that would be cost savings that
    would--either with monies that you are going to have to spend
    to comply with or people you are going to have to hire? What
    would be your--a quick synopsis? I have about 30 seconds.
        Mr. Young. A good example would be the provision in the
    bill for us to have a inspection every 3 years. Currently, that
    inspection is once a year.
        Chairman Luetkemeyer. Let me stop you right there.
        Ms. Blom, do you have any problem with something like that?
        Ms. Blom. From the Department's perspective, we believe
    that any kind of streamlining measures should be applicable to
    both large and small agencies, specifically with regard to the
    inspection protocol. We do believe that the current requirement
    of a 2-year inspection is the most appropriate interval for
    doing inspections.
        Chairman Luetkemeyer. It is kind of interesting because
    this is the Financial Services Committee--and I will make my
    remarks brief here--this is the Financial Services Committee
    and we just passed recently--and Mr. Barr, I think, is the
    gentleman that passed it--with regards to streamlining an
    examination process. And those banks that are not problem
    shops, that have clean records, that are small, they went to a
    longer inspection period--or examination period. So I am kind
    of curious here that that doesn't seem to translate from one
    industry to another.
        I appreciate your comments, but I am over my time.
        With that, let me recognize the ranking member of the full
    Financial Services Committee, the gentlelady from California,
    Ms. Waters, for 5 minutes.
        Ms. Waters. Thank you very much, Mr. Chairman. I have a
    commitment to be at an event where I am speaking this morning.
        But I really did have to stay here because I, as you--
    perhaps you know this, that at one time I represented six
    public housing authorities in Los Angeles when I was in the
    State legislature, and I am originally from St. Louis and have
    family who live in Pruitt-Igoe and Vaughan. And, of course,
    when I was young in St. Louis, most of my friends lived in Carr
    Square Village. That was about the only public housing that was
    offered way back then. So I pay a lot of attention to public
    housing.
        Mr. Young, you have come before us this day to advocate for
    less rules and regulations to operate your public housing and
    Section 8 Housing Choice Voucher Programs. Specifically, you
    are advocating for H.R. 4816, the Small Public Housing Agency
    Opportunity Act.
        Mr. Young, I recall a very serious letter of findings from
    HUD's Office of Fair Housing and Equal Opportunity from March
    2014 outlining civil rights violations that occurred as a
    result of egregious actions taken by the Laurel Housing
    Authority via your rental assistance demonstration application,
    which uncovered that 27 African-American households were
    evicted from a public housing development without due process
    and administrative grievance procedures to which they were
    rightfully entitled under existing law and regulations.
        I have been following this issue. I sent a letter to the
    HUD Secretary expressing my serious concerns about this conduct
    and the well-being of the wrongfully evicted tenants.
        My staff got very much involved with this. We sought out
    some of the low-income housing advocates who tried to do
    something about locating all of these African-Americans who had
    been evicted. And to date, I understand that HUD has uncovered
    even more concerns with your housing authority and that all of
    these issues are still outstanding today.
        So here you are, Mr. Young, to advocate for less rules and
    regulations despite the fact that you cannot even follow the
    basic rules protecting the rights and due process of your
    public housing residents. Your testimony suggests that the
    level of oversight and regulatory requirements applied to small
    PHAs is unnecessary and that scaling these back now will allow
    you to better serve residents. But it seems to me that
    loosening oversight and regulations, many of which serve as key
    protections for tenants, will only ensure that serious
    violations of tenant rights, such as those that occurred in
    your agency, will happen more often and go unreported.
        HUD advocated that exceptional measures needed to be taken
    to provide emergency relief for the 27 affected households. Has
    that been done, Mr. Young? Did these households receive
    emergency relief or were they welcomed back into the housing
    authority? What have you done since this incident to mitigate
    the egregious lapses in your housing authority to ensure this
    would never happen again?
        Mr. Young?
        Mr. Young. Yes, ma'am.
        Congresswoman, all of the affected people have been allowed
    to move back or their situations have been addressed. To this
    date, HUD has not provided us any final information regarding
    that incident.
        Ms. Waters. Excuse me. Let me just stop you here. Was it
    your responsibility or HUD's responsibility to go out and find
    these people and get them back? Because they have not been
    returned, is that right?
        Mr. Young. Yes, ma'am. We did contact all of those
    residents, and those who wanted to come back to the housing
    authority, all of them were allowed to if they wished--
        Ms. Waters. How many of the 27 are back?
        Mr. Young. It is less than half a dozen, if I am not
    mistaken.
        Ms. Waters. It is my understanding that none of them are
    back. And so what I am going to do is I am going to get with
    HUD and I am coming to Laurel because when I tell you some of
    my family was in Pruitt-Igoe and in Vaughan, I am serious about
    public housing and the way tenants are treated. And I don't
    know that justice has been done in this case and why you did
    what you did.
        Why did you evict them?
        Mr. Young. Ma'am, those who were evicted, were evicted
    because they violated the rules.
        Ms. Waters. There was no proof. When HUD went down there
    and they took a look at what you had done, you had no
    documentation and no proof that violations had been made,
    particularly some of the accusations about drugs.
        They searched houses. They found nothing. What documents
    and what proof do you have?
        Mr. Young. When HUD came in and did their assessment, they
    asked for files that did not contain the documentation
    regarding those cases.
        Ms. Waters. So since 2014--
        Chairman Luetkemeyer. The gentlelady's time has expired.
        Ms. Waters. Thank you, Mr. Chairman.
        I will be coming to Laurel. Thank you.
        Chairman Luetkemeyer. Mr. Young, if you would like to
    respond to that, if you have anything else to add to that, we
    will give you another 30 seconds to respond if you so wish.
        Mr. Young. Yes, I would like to respond, Mr. Chairman.
        Chairman Luetkemeyer. Yes, sir. Proceed.
        Mr. Young. Regarding that, HUD did come in and do an
    investigation regarding our RAD project, in which some of our
    residents were evicted due to a violation of our housing
    authority's rules that happened to coincide with this ongoing
    RAD project. The files that HUD looked into regarding the
    allegation did not contain the documentation that would have
    shown that due process was allowed to everyone involved. And
    when we tried to provide those documents to HUD, they went
    ahead and made their decision without the benefit of the
    additional documentation. But the documentation does exist.
        Thank you, Mr. Chairman.
        Chairman Luetkemeyer. Thank you, Mr. Young.
        The gentleman from New Mexico, Mr. Pearce, is recognized
    for 5 minutes.
        Mr. Pearce. Thank you, Mr. Chairman.
        And I thank each one of you for being here today.
        Ms. Blom, what is the cost of the program? What is the
    overall administrative cost of all the housing programs,
    basically? I am just looking for the big line figure. So the
    budget is, what, $21 billion or $22 billion? About what percent
    of that is used up in administrative costs?
        Ms. Blom. With regard to the Housing Choice Voucher
    Program--
        Mr. Pearce. I am looking for the top-line number. Just the
    basic administrative cost for all the housing programs as a
    percent of the program budget.
        Ms. Blom. I will need to consult with experts back at HUD
    to be able to give you that exact figure--
        Mr. Pearce. Thirty-something percent? Does about 33 percent
    sound right? $7 billion or $8 billion?
        Ms. Blom. I think for the variety of different programs
    there are different administrative costs associated with them.
        For the Housing Choice Voucher Program, which is about half
    of HUD's budget, housing authorities do receive an
    administrative fee for that. For the Public Housing Program,
    housing authorities are able to use a portion of their
    operating fund and capital fund to cover administrative costs.
        So each of the different programs has a different level of
    administrative costs and we can break that down for you as well
    as sum that up.
        Mr. Pearce. You talked about streamlining in your
    presentation. Have you succeeded in streamlining? Do you feel
    that your efforts there are paying off?
        Ms. Blom. I am happy to report that in April the Department
    published a rule which became effective, that streamlined
    programs for the Housing Choice Voucher Program as well as the
    Public Housing Program--
        Mr. Pearce. And about how much do you think, with that
    report, are you saving and able to redirect? The reason I bring
    it up is, you say that you are short of funds, and almost
    always when I get to looking, administration takes up a big
    amount of the cost.
        And so if you are short of funds it seems like you would be
    measuring and saying, okay, we just freed up $30 million, $10
    million, whatever the numbers happen to be. So do you have a
    kind of a top-line figure on how much you have saved by
    streamlining and able to redirect into better direction of the
    funding?
        Ms. Blom. The streamlining measures just went into effect
    in April so it is too early to tell to provide a monetary
    figure on the amount of savings that have been incurred to
    date.
        Mr. Pearce. So give me one example of a streamlined figure.
    Tell me--streamline action, tell me one thing you have done.
        Ms. Blom. Right. One example of streamlining is that
    housing authorities now only need to inspect units every 2
    years instead of every 1 year. And in addition to that, when
    they--if there are other funding programs that assist that
    unit--for instance, a low-income housing tax credit program--
    the housing authority can rely on the inspection process that
    has occurred with the low-income housing program--
        Mr. Pearce. And you didn't do any projections on how much
    that was going to save when you implemented it? That would be a
    normal business practice: Okay, we are going to stop this and
    it is going to save us so many dollars. You did not do those
    projections?
        Ms. Blom. I will check to see if--
        Mr. Pearce. Okay.
        Ms. Blom. --the Department has done that.
        Mr. Pearce. So when I look at your overall--your statement
    says that targeted long-term housing assistance can be
    important for ending homelessness. So as we consider the 2.2
    million people in one set of the programs and 2.3 million in
    another set that you referred to, if we were going to be able
    to do a search of the names that compose that 2.2 million, 2.3
    million people, 4.5 million total, how static are those names?
        In other words, are they actually moving into prosperity?
    Are they moving out of housing? Is it a very static group of
    people that you are dealing with?
        Ms. Blom. About half of the population is elderly or
    disabled, and that--
        Mr. Pearce. So they are going to be very static.
        Ms. Blom. Exactly.
        Mr. Pearce. What about the other 50 percent?
        Ms. Blom. For the other 50 percent, it varies among housing
    authorities. Some families with children tend to stay for some
    time but there is also turnover in that population.
        Mr. Pearce. But you don't have an average? Like if I go to
    V.A. and ask them, what is the wait time, they can give me a
    wait time nationwide: ``Roughly 51 days. In your area, it might
    be a little higher.'' So do you have that nationwide figure of
    the mobility of these programs?
        Ms. Blom. I seem to recall that it was a 7-year period, but
    again, I will confirm that and we will provide that information
    to you.
        Mr. Pearce. Just an observation from up here: If your
    greatest objective is to move people into better living
    conditions it seems like that might be the one number that you
    would like to advertise.
        Ms. Lovell, you had mentioned also in your report that the
    choice program moving people to areas of higher opportunity, of
    course, we have a hope that is going to actually improve their
    status in life. Do you have any results for those 6,500
    families that you work with through the choice program? Are
    they actually improving?
        You have figures in here on what their average income is,
    but do they improve when they move to an area of better
    opportunity?
        Ms. Lovell. Our demonstration program actually has not
    started yet. It was just recently funded so we don't have any
    information on--
        Mr. Pearce. It says in your report you have 6,500 people
    receiving assistance through the Housing Choice Voucher
    Program, and in the front of it you say you are going to
    measure the effectiveness of regional mobility programs. So you
    have 6,500 people but they haven't started receiving
    assistance?
        Ms. Lovell. No. What I am saying is the mobility counseling
    program was just recently funded so we don't know the effect of
    moving to a higher-income--
        Mr. Pearce. All right.
        Mr. Chairman, I yield back. Thank you.
        Chairman Luetkemeyer. The gentleman's time has expired.
        With that, we will recognize the gentleman from Missouri,
    the ranking member of the subcommittee, Mr. Cleaver.
        Mr. Cleaver. Thank you, Mr. Chairman.
        My children believe that I just take every opportunity I
    can to quote Robert Frost, and that is probably accurate. I try
    to camouflage it but it doesn't work. Robert Frost said, ``Two
    roads diverged in a woods, I took the one less traveled by, and
    that has made all the difference.''
        When I think about my years and growing up in public
    housing there were two men--boys--who grew--spent at least 7
    years in public housing, and we were--our parents were able to
    move. We are the only two who graduated from college, and most
    of them didn't graduate from high school.
        The point I want to make is I think it is critically
    important that we pay attention to Professor Chetty's comments,
    and I also think that it is important to run this mobility
    demonstration program as well as the consortia.
        But I want to concentrate--Ms. Blom, we have been concerned
    about housing on this committee, but we have also become
    concerned about the homeless, particularly after the economic
    collapse in 2008. Are there ways that programs like the voucher
    program are effective in reducing homelessness?
        Ms. Blom. Thank you very much for the question.
        The voucher program has proven to be very successful in
    reducing homelessness. There was a recent study that has been
    published that the voucher program is extremely effective, and
    reducing homelessness is one of the most effective ways of
    having people have stable housing once they have become
    homeless.
        The Department also has several programs within the public
    housing voucher program that target the homeless. One is the
    VASH Program, so that is veterans who are receiving vouchers
    and providing supports from the Veterans Administration; and
    then secondly, the Family Unification Program that is now
    targeting foster youth, and once they become adults, providing
    them with a voucher to prevent homelessness. And we currently
    have a demonstration that we are currently initiating to
    provide those individuals with support through the Family Self-
    Sufficiency Program.
        So we do currently use the voucher program as a very
    successful tool for preventing and ending homelessness.
        Mr. Cleaver. But it is just a demonstration.
        Ms. Blom. In two areas--with regard to the Family
    Unification Program, we are starting that demonstration. Just a
    couple of months ago, we started to identify housing
    authorities that are interested in this, and we have already
    seen improvements to that thanks to HOTMA, which allowed for an
    extension of the vouchers from 18 months to 36 months.
        I would say the VASH Program is beyond a demonstration and
    has proven to be effective. And the study that was recently
    released also, too, I think has proven that vouchers in and of
    themselves are an extremely effective way of ending
    homelessness.
        Mr. Cleaver. Thank you.
        Mr. Young and Ms. Thrope, the two of you may be the most
    likely responders to this inquiry, but I represent three rural
    areas outside of Kansas City, the urban area--Saline and
    Lafayette Counties--and we do have public housing there, maybe
    per capita more than we have in Kansas City or St. Louis. But
    if we are able to increase mobility and coordination, do you
    think that will help these communities thrive or the public
    housing programs there?
        And I wondered about the--when HUD will finalize the rule.
    Maybe I have to get that from you, Ms. Blom, but in the rural
    areas how valuable would a consortia? If we were able to pool
    housing authorities from across counties and so forth, would
    that be of some help?
        Mr. Young. As far as in Mississippi, and it is a rural
    area, some of the housing authorities are 30, 40 miles away. So
    if you consolidate housing authorities from that great a
    distance I think you lose some resources, local resources and
    what have you, of people being on the ground.
        It is a little bit different, I think, in urban areas. It
    may work better. I just don't think that you would have the
    same level of customer service, support; you have people
    driving greater distances if you consolidate in the rural
    areas.
        Chairman Luetkemeyer. The gentleman's time has expired.
        The gentleman from Florida, Mr. Posey, is recognized for 5
    minutes.
        Mr. Posey. Thank you very much, Mr. Chairman.
        Deputy Secretary Blom, I am going to read you a list of
    just some of the recent developing HUD requirements for all
    public housing agencies: smoke-free protocol; community service
    certification; stricter Section 8 employment rules; Violence
    Against Women Act updates; conflicted instructions of the use
    of applicant's criminal records; restrictions on the use of
    demolition and disposition tools; the costly Green Physical
    Needs Assessment; rollout of small area fair market rents; and
    ambitious assessment of fair housing tools.
        These are just some; that is not all of them.
        These may be well-intentioned ideas, but do they really
    come with any funding? Each of these requirements will entail
    communications with residents, training for staff, and updates
    to local policies and procedures. And, of course, that takes
    time and money.
        If HUD doesn't provide the money and small agencies don't
    have the extra time to do this work, what do you suggest? Which
    of these is the highest priority? Which can be ignored? When is
    enough regulation enough?
        Ms. Blom. Thank you very much for that list of variety of
    different HUD programs. I think some of them are voluntary in
    nature, some of them are not in effect yet, and some of them
    are required.
        Housing authorities do receive funding from the Department,
    thanks to Congress, to support their administrative activities.
    I think the Department certainly realizes that there are a
    number of requirements that housing authorities currently face,
    and the Department has looked at that seriously and reduced the
    burden for the housing authorities.
        In April, the Department published a rule that would reduce
    burden for housing authorities. In addition to that, the
    Department is very eager to implement the time-reducing burdens
    associated with the FAST Act as well as with HOTMA, and we are
    focusing our attention on that so that we can, again, reduce
    burden and reduce cost for housing authorities.
        Mr. Posey. Tell me some of the burdens you have reduced.
        Ms. Blom. Some of the burdens that have reduced as a result
    of our current regulation is that the inspections only need to
    be done every 2 years instead of every 1, and that housing
    authorities can use protocols of other programs instead of
    having to inspect them themselves. Also, with regard to
    families who are on fixed incomes, the recertification of those
    incomes can now be done only every 3 years instead of on a more
    frequent basis.
        Mr. Posey. Do you expect to change any of the ones that I
    mentioned?
        Ms. Blom. Specifically with regard to the Physical Needs
    Assessment, the Department has not implemented that provision.
    And if it were to implement that provision, we would not make
    that a requirement for small PHAs.
        With regard to demolitions and dispositions, we are looking
    to provide more flexibilities to housing authorities on that
    through a notice process. And in addition to that, with regard
    to implementing the Moving to Work Program, providing 100
    additional agencies with flexibilities, the Department is on a
    very accelerated timeframe to be able to offer those Moving to
    Work flexibilities to agencies as quickly as possible.
        Mr. Posey. The Public Housing Capital Fund is down another
    $18 billion, and the operating fund is down $6 billion below
    the need. Should there be a point where the Department stops
    adding new demands on agencies that receive just partial
    funding?
        Ms. Blom. I think the Department is looking to reduce
    requirements where it can, and at the same time we have a
    responsibility to ensure that the laws that are on the books
    are enforced and that the Department puts an emphasis on that,
    as well.
        Mr. Posey. Do you think there is a point where there is
    just too much?
        Ms. Blom. Again, I think that through HOTMA, which we were
    very pleased to have enacted, we will provide a number of
    reductions of burden for housing authorities. And again, the
    Department is working as quickly as possible to be able to
    implement those. Some we have already implemented directly,
    such as the flexibility for the vouchers so that benefits can
    go to families.
        Mr. Posey. So we agree that there is way too much
    regulation? Do we agree on that already?
        Ms. Blom. Again, the Department implements requirements
    that are--
        Mr. Posey. If you agree we need to get rid of a bunch of
    them, then obviously we had too many. Do we agree on that?
        Ms. Blom. Again, I think the Department is doing its best--
        Mr. Posey. Can't you just say yes or no? Do you agree with
    it or not?
        Ms. Blom. I think the Department is doing the best--
        Mr. Posey. No, just say yes or no. Do you agree we had too
    many regulations?
        I hate this game. The bureaucrats come in here, and I ask
    you what time it is, and you describe a clock to me for 5
    minutes, but you won't tell me what doggone time it is.
        Do you agree that we had too much regulation and that is
    why we are removing regulations now? Yes or no, please. Just
    say yes or no.
        Ms. Blom. I think the Department is--
        Mr. Posey. Arrogant, petulent, and defiant.
        Mr. Chairman, my time is up. I am sorry I couldn't get a
    yes-or-no answer.
        Chairman Luetkemeyer. The gentleman's time has expired.
        With that, we go to the gentlelady from New York, Ms.
    Velazquez. She is recognized for 5 minutes.
        Ms. Velazquez. Thank you, Mr. Chairman.
        Ms. Thrope, I would like to discuss with you how HUD's
    proposed small area rule will work in New York City and other
    cities like New York with low vacancy. In fact, in New York it
    is expected that it will impact more than 55,000 voucher
    holders, and they might have to move or pay substantially more
    money in rent.
        Can you explain the problem of implementing HUD's small
    area proposal and the steps that you think HUD should take to
    limit its harm on individuals and families?
        Ms. Thrope. Great. Thank you, Representative Velazquez.
        First, I will explain a little bit about subsidy and
    assistance levels work in the voucher program. I talked a
    little bit about this earlier, but fair market rents are set by
    HUD and they are supposed to reflect average gross rent
    estimates in a given geographical area.
        HUD sets one FMR for what it calls metropolitan statistical
    areas, and these can actually be relatively large regions that
    encompass a fair number of cities and towns. So HUD's proposed
    small area FMR rule is specifically meant to address the
    problems that we have when we set FMRs based on large
    geographical regions, and it actually changed the way FMRs are
    calculated and uses zip code-level data, so much more granular-
    level data, when setting FMRs, which are what assistance levels
    are based on.
        So under HUD's proposed small area FMR, rule 31 housing
    authorities would be required to use small area FMRs, so the
    zip code-level rent data, in setting assistance levels, and
    other housing authorities would be able to opt in. And New York
    is one of the jurisdictions that would be impacted by small
    area FMRs.
        On the one hand, small area FMRs could actually help a lot
    of new voucher tenants entering the program because it
    increases the value of that voucher so it allows people to move
    to areas of higher opportunity and higher rent places. But
    unfortunately, for existing tenants it looks like small area
    FMRs, because a lot of existing tenants are in lower-income
    neighborhoods, could actually negative impact those tenants and
    cause rent increases and significant rent burdens.
        So we performed a rigorous data analysis of HUD's proposed
    small area FMRs and found that 78 percent of existing voucher
    holders could be negatively impacted by the small area FMR
    rule, and that amounts to over 400,000 voucher families in this
    country.
        Ms. Velazquez. What do you propose?
        Ms. Thrope. We propose first, an exception for low vacancy
    rate areas like New York, where if you increase the amount of
    rent a family has to pay they will absolutely, in most cases,
    be forced to move and so it could cause displacement. So a
    vacancy rate exception along with a provision that would hold
    all current tenants harmless from a small area FMR rule.
        Ms. Velazquez. Thank you.
        And, Ms. Sard, I have seen that the center has similar
    comments. If there is anything that you would like to add to
    what Ms. Thrope explained?
        Ms. Sard. Thank you, Congresswoman.
        We agree that the small area FMR change that HUD has
    proposed is a key policy change to help fulfill the goal that
    we have been talking about this morning of helping families
    with vouchers live in higher-opportunity areas.
        That said, we agree with what Ms. Thrope said about the
    importance of starting out the implementation with areas that
    aren't under such low vacancy/tight market pressure as New
    York. We also think it is important to target those areas where
    voucher use is concentrated in the poorest and most racially
    segregated neighborhoods.
        Ms. Velazquez. And I support that. Thank you so much.
        Ms. Blom, in August, Senator Schumer and I wrote a letter
    to Secretary Castro that was signed by the rest of the New York
    delegation. Neither Senator Schumer nor I have heard a
    response.
        So would you convey to Secretary Castro how important this
    issue is not only for New York but other cities across the
    country that will be negatively impact and that we expect a
    response back?
        Ms. Blom. Yes. Certainly.
        Ms. Velazquez. When does HUD expect to release the final
    rule?
        Ms. Blom. The final rule is still in process. We have taken
    into consideration strongly your recommendations, those of
    Senator Schumer, those of Ms. Thrope and Ms. Sard, as well as
    other comments that we received.
        Thanks to those comments, we are keenly aware of the issue
    of residents potentially being displaced, and while I can't
    speak to what the final rule says, I can assure everyone here
    that all of those comments have been taken into consideration
    and that we are mindful of that issue.
        Chairman Luetkemeyer. The gentlelady's time has expired.
        The gentleman from Pennsylvania, Mr. Rothfus, is recognized
    for 5 minutes.
        Mr. Rothfus. Thank you, Mr. Chairman.
        Ms. Lovell, I want to talk a little bit about this notion
    of success and housing programs. This committee has taken a
    look over the past couple of years at the last 50 years of HUD
    and considered what works and what doesn't. I have been
    surprised that there seems to be a divergent view of defining
    success.
        In your testimony you note that your housing authority has
    a public housing occupancy rate and voucher utilization rate of
    99 percent. Do you consider full occupancy to be the mark of a
    successful public housing program?
        Ms. Lovell. There are a number of marks that would indicate
    success. In the end, a public housing authority's business is a
    real estate business. It is a business that rents units, albeit
    to a very specific set of clients.
        But you would measure success the same way you would
    measure success with any real estate: Are the units rented? Is
    the maintenance being performed accordingly? Is the rent being
    collected? Is the physical condition of the property in good
    shape? Are your finances in good shape?
        Those are all measures of success of these programs.
        Mr. Rothfus. Apart from elderly and disabled individuals,
    what about able-bodied adults and looking at a metric and
    transitioning to independence? Should that be a consideration
    in determining whether a public housing authority is trying to
    help with this notion of upward mobility?
        Ms. Lovell. Certainly, upward mobility is the goal for all
    of our residents--
        Mr. Rothfus. It is a goal, but is it measured in any way?
        Ms. Lovell. Currently, it is not measured in any particular
    way. It is measured with an individual grant. If you get a
    grant for a specific program, for specific funding to do a jobs
    training program or a family self-sufficiency program, the
    goals of the program are and the success of your achievements
    with that grant funding are measured.
        But for the most part there is very little funding for
    housing authorities to implement job training-type programs
    unless it is through a special grant, so they rely on their
    partners in the community to serve their clients.
        Mr. Rothfus. Mr. Young, I want to touch on a couple of
    issues here: the political challenges associated with
    consolidated public housing authorities and the potential
    operational difficulties that could result, especially when
    mergers might be involuntary. Do you believe that consortia
    between existing public housing authorities could be a first
    step towards a more efficient voucher system, as opposed to
    consolidation?
        Mr. Young. Congressman, I do believe that it would be
    beneficial, but I think that it has to start with the
    individual housing authorities, as I have stated earlier,
    working together to see what areas administratively that could
    benefit the number of housing authorities involved.
        Mr. Rothfus. Are there steps that we can be taking to
    address barriers or disincentives that would prevent PHAs from
    forming consortia?
        Mr. Young. Some of the regulations that is mentioned, but
    some of it prevents this consortia, as you have mentioned, of
    being able to move forward. Some loosening of the regulation
    would allow for more consolidation.
        Mr. Rothfus. If I can touch on with Ms. Blom, again, the
    dichotomy between the larger housing authorities and the
    smaller ones, though there are many small and very small public
    housing authorities across the country, they are only
    responsible for administering a small percentage of units--
    roughly 6 percent. Many of these public housing authorities are
    regulated similarly to the large entities that manage thousands
    of units. Is that reasonable?
        Ms. Blom. I think from our perspective, we are looking at
    this from the families who are being served, and we believe
    that all of the families who are being served should have the
    ability to live in a place that is safe and decent for them. We
    believe that the Department should have the ability to be able
    to inspect units as needed to be able to ensure that families
    are living in safe environments.
        Mr. Rothfus. And there is a cost that goes with all of that
    when we are talking about scarce resources that we have. How
    much of HUD's resources and manpower are spent on regulating
    small public housing authorities? Do you know?
        Ms. Blom. I don't know that exact figure, but we have staff
    who are monitoring housing authorities based on a risk profile.
    Some of those are small agencies; some of them are larger
    agencies.
        Mr. Rothfus. I would be curious as to whether it is
    proportionate to their overall scale. We might want to follow
    up with you on that.
        So thank you. I yield back.
        Ms. Blom. Absolutely. We will do that.
        Chairman Luetkemeyer. The gentleman's time has expired.
        With that, we go to the gentleman from Massachusetts, Mr.
    Capuano, for 5 minutes.
        Mr. Capuano. Thank you, Mr. Chairman.
        And I thank the panel for being here.
        As far as I am concerned, the question of whether there are
    too many regulations or too few regulations is the wrong
    question. It is whether we have the right regulations versus
    the wrong regulations. And as far as I know, in everything I
    have ever done most of my time in public life has been trying
    to fine tune those regulations trying to figure out what works,
    and what doesn't work.
        Things change and you want to change a regulation; you try
    something, it doesn't work, you try something else. That is why
    I am here.
        I don't think you will find anybody on either side of the
    aisle, anybody here, anybody I know who thinks that public
    housing should be a permanent situation for anyone if we can
    help it.
        And, by the way, my measure of success for all public
    housing authorities--not just for them, for us--is to put you
    out of business. I wish I lived in a society where there is no
    need for HUD, no need for any housing authorities, no need for
    any think tanks who try to help us work this through. I wish
    everybody had a job that could pay them enough money to live in
    safe, decent, affordable housing everywhere in this country.
        I am not sure with--I am not so sure that is your job. It
    probably is more my job than it is your job, and we are trying
    to do it.
        So the truth is I love you all but I am trying to put you
    all out of business. And I actually think if you are doing your
    job you are trying to put yourselves out of business as well.
        All that being said, we are here for upward mobility. Can
    anybody guarantee you know how to do this? Do you have the
    magic elixir? Anybody?
        I am not sure. If I knew, I would do it. So would you. We
    are here to try to struggle how to figure that out.
        I guess for me--we are always trying new things--HUD is
    trying some new things. I love the idea of the small area FMRs,
    but I also understand the difficulties in transitioning to
    them.
        And I love it because I come from Boston. Cambridge costs a
    lot more money than some of the other towns in my area, and you
    can't move. Well, you can, but it is really difficult to move
    from one place to another, to get a job, to get transportation,
    to get more affordable housing, to be able to build yourself up
    so you can get off Section 8.
        And that is why I like the concept. They are trying to
    figure out some mobility issues. That's not easy to do. I
    respect HUD's problem.
        However, while we are struggling to do that, we need
    regulations that prohibit inappropriate activity both by
    tenants and by housing authorities. We need them, period.
        When we are doing it this is an experiment unless, as I
    said--I didn't hear anybody jump up and say, ``I have the
    answers.'' It is an experiment. We are going to try something
    new, try to open up maybe some--deregulate a few places to
    allow a little bit more mobility.
        Good idea. I don't know if it is going to work, but I think
    it is worth trying.
        Yet in my area, I don't think anybody would disagree that
    the people of Massachusetts are pretty open-minded, pretty
    supportive of the concept of public housing. We have some of
    the best housing authorities in the country. HUD has reached
    into Boston to grab an Assistant Secretary repeatedly.
        We had people trying the Move to Work Program. We have some
    questions about it, but we are trying it.
        Last year Congress allowed HUD--didn't require, allowed
    you--to take the MTW programs and merge them if you want, come
    up with some regionalization. And to be perfectly honest, one
    of the good and bad things in New England, we have a long
    tradition, hundreds of years, of local government--small local
    governments. We don't have big places.
        Boston is one of the geographically smallest cities in
    America. If we were the size of Houston we would be 4 million
    people. But we chose that. Not a problem. Good, bad, or
    indifferent. It has good parts, and it has bad parts. But it
    makes these kinds of things problematic.
        Yet, after Congress allowed it my Boston Housing Authority
    and my Cambridge Housing Authority, two of the best in the
    country, asked HUD to be able to regionalize for the purposes
    of trying some of these things out. Two good agencies, area
    where everybody knows that our income differences and
    inequalities in Boston are huge--we are struggling with that.
    Mobility might help it.
        And yet HUD basically did not just say no, it just said,
    ``We are not accepting applications.'' They had the support of
    the smartest people in the country that you say you listen to
    on a regular basis. Yet, Ms. Blom, you said, ``No, we are not
    taking applications now. We know better than you what to do.''
        What the heck are you thinking? Let them try it with some
    and experiment so you can learn from their experience. Why
    wouldn't you let that happen?
        Ms. Blom. Thank you very much for the question.
        The letter that did come to us from the Cambridge Housing
    Authority and the Boston Housing Authority I personally thought
    was intriguing. They had a very interesting proposal. I have
    spoken to staff at the Boston Housing Authority asking for a
    little bit more information on exactly what types of MTW
    flexibilities would they be seeking in order to create a
    regional program among those two agencies.
        You are absolutely correct that the letter that was sent
    back to the executive directors of those agencies did say that
    the Department is not quite ready at this moment to be able to
    accept applications for that. We are currently diligently
    working on setting up the framework for expanding the MTW
    Program to add an additional 100 agencies, and as part of that
    expansion we will be testing the regionalization, as well.
        Chairman Luetkemeyer. The gentleman's time has expired.
        The gentleman from Texas, Mr. Williams, is recognized for 5
    minutes.
        Mr. Williams. Thank you, Mr. Chairman.
        First of all, Mr. Young, you are a veteran, aren't you?
        Mr. Young. Yes, Congressman.
        Mr. Williams. I don't think anybody has said thank you
    today. We appreciate your service.
        Mr. Young. Thank you.
        Mr. Williams. Yes, sir.
        My first question to you, Mr. Young, is this: In your
    testimony you say HUD's implementation of portability is more
    complicated and burdensome than it needs to be. What changes
    would you suggest to HUD that would increase portability
    outcomes?
        Mr. Young. As I said earlier, we don't have a voucher
    program. What I hear from my peers is that the system is
    complicated and if we are allowed to figure out ways to work
    together, that we can do that.
        I probably have to get with my peers and provide some
    better answer for you on that, Congressman.
        Mr. Williams. If you would do that, it is--the problem is
    that big government sometimes gets in the way.
        How should HUD streamline its portability administration?
    Do you have an idea about that?
        Mr. Young. I need to provide you some information, get back
    with you on that.
        Mr. Williams. If you would do that, it would be great.
    Okay.
        Another question is, what changes need to be made that
    would incentivize PHAs to voluntarily collaborate on voucher
    administration?
        Mr. Young. Again--
        Mr. Williams. Okay.
        Mr. Young. --personally we--
        Mr. Williams. Would you get that to me?
        Mr. Young. Yes, Congressman.
        Mr. Williams. That would be great.
        Ms. Blom, a question to you. It has been suggested this
    morning that consolidation and regionalization of voucher
    administrations or a public housing agency would potentially
    harm local rural communities where the local leadership could
    become disengaged or residents are at a disadvantage to have
    reasonable access to housing officials.
        I am from Texas, and I represent a large rural population
    in the State of Texas, and this is something I would obviously
    be concerned about. So could regionalization or consolidation
    of voucher administrations place rural areas at a disadvantage,
    in your opinion?
        Ms. Blom. From the Department's perspective, the
    regionalization or the consolidation or consortiums are
    activities that housing authorities should be able to decide on
    their own if they want to go forward with that type of
    cooperation among those agencies. The Department is not
    requiring agencies to do such. Instead, we believe that
    agencies should make those decisions on their own. Some have
    and some haven't, at this point.
        Mr. Williams. So they might know better than you all?
        Ms. Blom. Right. And again, the Department wants to be able
    to facilitate that kind of regionalization and cooperation
    where agencies want to do it, but the Department is not
    mandating it.
        Mr. Williams. Okay. Another question would be how could
    some of these perceived disadvantages that I am talking about
    be addressed?
        Ms. Blom. Can you speak a little bit more about the types
    of disadvantages?
        Mr. Williams. The perception is that rural populations
    could have a problem, and if that is a disadvantage, how could
    we address that and make sure it doesn't happen?
        Ms. Blom. Again, I think from the Department's perspective,
    we do not want to regulate those smaller agencies and force
    them to do consolidation. If there are barriers there for
    consolidation where agencies want to do that, we are ready to
    provide them with advice. But the Department at this point is
    not seeking to ask smaller housing authorities to consolidate.
        Mr. Williams. New ideas, flexibility you would listen to?
        Ms. Blom. Excuse me?
        Mr. Williams. New ideas, flexibility from your rural areas
    you would listen to?
        Ms. Blom. I am having a hard time hearing your question.
        Mr. Williams. You are talking about flexibility and the
    rural areas have to have flexibility to have their own
    programs, and so forth. You support that.
        Ms. Blom. Yes, we do.
        Mr. Williams. Okay. All right.
        Thank you, Mr. Chairman. I yield back.
        Chairman Luetkemeyer. The gentleman yields back.
        With that, the gentleman from Minnesota, Mr. Ellison, is
    recognized for 5 minutes.
        Mr. Ellison. Let me thank the chairman and the ranking
    member.
        I am glad we are holding this hearing on the affordable
    housing crisis. To me, it is perhaps one of the most important
    things that Congress could be doing at this moment.
        On this screen are some quotes from Matthew Desmond. He is
    the author of a great book I recommend to everyone here. The
    book is called, ``Evicted: Poverty and Profit in the American
    City.''
        And I will just say that according to Desmond, the majority
    of low-income renting families spend half of their income on
    housing; one in four families spend 70 percent of their income
    on housing--rent and utilities. And for those families,
    eviction is more likely the result of an inevitability than
    personal responsibility.
        It is a huge moral issue and deserves a solution. You can't
    fix it unless you fix housing.
        So I just wanted to sort of frame my comments in light of
    this.
        Let me just start with my--there is some other stuff up
    there. It just sort of lays out rental assistance program and
    how much our programs that exist now don't even reach the
    people who need them. And I definitely appreciate every one of
    my colleagues, Republican and Democrat, who believe that we
    need to have more efficiency, more flexibility, more
    creativity. I am all in with that. Fine, let's try it.
        But I cannot escape the fact that we simply don't have
    enough low-income housing. We don't have the units.
        Now, would one of you all like to challenge me on that? Do
    we have enough units or we simply not have them?
        Because in Minneapolis, where I am from, between public
    housing and Section 8, we may have a waiting list of about
    15,000 people. And so could somebody--why am I wrong?
        You got it.
        Ms. Sard. You are absolutely right. Thank--
        Mr. Ellison. See?
        Ms. Sard. --you for putting up our chart.
        And it is correct that only one out of four families
    eligible for Federal rental assistance programs receives help
    from any of them. It is a problem that has been getting
    dramatically worse over the last 15 years, at the same time
    that the number of households assisted has been static.
        Mr. Ellison. Right. Now, Ms. Sard, let me ask you just a
    general question: If you were 9 years old and homeless, how
    easy would it be to complete your homework assignment?
        Ms. Sard. Obviously, it would be much more difficult.
        Mr. Ellison. If you were on drugs and trying to get clean,
    what if you were living under a bridge and didn't have anywhere
    to live? Would it be easy to get clean on the street?
        Ms. Sard. No.
        Mr. Ellison. How about even holding a job? Homeless people
    have jobs. A lot of people don't know homeless people work
    every day. But how tough is it to keep that job or get it when
    you don't have an address?
        Ms. Sard. It is hard for homeless people who don't have an
    address. It is also hard for the millions of families who don't
    have a stable address, who are moving from house to house of
    people who will help them out temporarily.
        Mr. Ellison. Now, I only have 2 minutes left, and I have 1
    minute where I have to ask a question. I am going to use my
    next minute to ask you all this question: Do you think there is
    a lot of discrimination against people on Section 8?
        Ms. Sard. Unfortunately, we know less than we should know
    about that question. I believe the Department is doing a study
    now about that discrimination.
        We also know that in jurisdictions that have passed State
    or local laws to prohibit that discrimination, those laws help,
    but they are not well enough enforced. And that is actually one
    of the things that I would hope the regional mobility
    demonstration would focus on.
        Mr. Ellison. I wish we could just really kind of get
    together with landlords to tell them that a Section 8 tenant is
    not going to be a bad tenant necessarily. Some are, but other
    tenants who pay full rent are bad tenants, too.
        And I think that because of the way the program is
    administered people kind of think--they look down on Section 8
    and public housing, but the truth is when they say there is
    about $28 billion in unmet maintenance needs for public
    housing. And when Congress went great guns, when we did the
    most we did about $4 billion with the stimulus package.
        We are not doing what we are supposed to do in here.
        By the way, do you know how much the mortgage interest
    deduction program costs? $70 billion. Do you know how much
    HUD's total budget is? A lot less.
        We spend up to about over $100 billion on middle- and
    upper-income people giving them government money for housing.
    Government money. Okay, maybe welfare for upper-income people
    like me, but we don't do nearly as much for people who
    desperately need housing and don't have the same level of
    option.
        Are you all as mad about this as I am? Do you guys see this
    as an issue? No? Yes?
        Ms. Sard. Yes.
        Mr. Ellison. Okay, thank you.
        So let me just wrap up by saying this. Now, I am trying to
    help people, with a lot of my colleagues, and I would like to
    ask, Ms. Blom, if you could answer this question. Ms. Blom, I
    am interested in the power of--oh, man.
        Chairman Luetkemeyer. Do you want to wrap it up?
        Mr. Ellison. Yes. I am interested in the power of rent
    reporting pilot for the HUD assisted attendance. Do you
    understand what I am asking you?
        Chairman Luetkemeyer. Okay.
        Ms. Blom. I think it is an intriguing idea. We would like
    to talk with you further about that concept and see if it is an
    idea that we can promote in the future.
        Mr. Ellison. Okay. We will do that.
        Ms. Blom. Thank you.
        Chairman Luetkemeyer. The gentleman's time has expired.
        The gentleman from Kentucky, Mr. Barr, is recognized for 5
    minutes.
        Mr. Barr. Thank you, Mr. Chairman. Thank you for your
    leadership and for the ranking member, my friend, Mr. Cleaver
    from Missouri, thank you for your joint leadership in holding
    this important hearing.
        And I want to compliment and thank all of the witnesses
    here on our panel for your dedication to helping our fellow
    Americans who are struggling and who, as Ms. Sard just pointed
    out, need help.
        To Ms. Sard's testimony that only one in four families in
    need or who are eligible for Section 8 housing is actually
    getting those vouchers, I wanted to direct my initial question
    to Ms. Blom and the Department of Housing and Urban
    Development.
        My understanding is that the total budget, annual budget
    for Section 8 vouchers, is about $21 billion-plus annually. Is
    that about right?
        Ms. Blom. That is right.
        Mr. Barr. So we spend $21 billion on Section 8 vouchers but
    only one out of four eligible families get them. Is that
    correct?
        Ms. Blom. I need to double-check that figure, but there
    certainly is more of a need than funding that is available.
        Mr. Barr. Okay.
        Now, I think Ms. Sard's testimony was about one out of
    four. So one out of four eligible families gets an allocation
    of what we spend annually on Section 8 vouchers, which is a
    little over $21 billion annually.
        Ms. Sard. Or any other Federal rental assistance.
        Mr. Barr. Thank you.
        So, Ms. Blom, my question is this: I have read and I
    understand that a full one-third of HUD's annual budget of $21
    billion for Section 8 vouchers is spent on administrative
    expenses, not on actually housing low-income Americans. Is that
    an accurate figure?
        Ms. Blom. My belief is that there is much more funding
    going directly to housing payments than the administrative fee
    that housing authorities receive and that the budget does set
    aside a certain amount of money directly for housing assistance
    payments versus funding that goes to--
        Mr. Barr. Is that number an accurate number?
        Anyone, is that an accurate number?
        Ms. Sard. The Congress provides for administrative fees to
    administer the voucher program about 8 percent of the total
    funding--8 percent.
        Mr. Barr. Okay. So of $21 billion, how much is not actually
    spent on rental payments to landlords?
        Ms. Sard. I believe this year it is on the order of $1.6
    billion.
        Mr. Barr. Okay. So--
        Ms. Blom. That is correct.
        Mr. Barr. So all of this administrative expense, okay, and
    not sheltering people who actually are eligible--my question is
    this: Do we agree that these administrative expenses are too
    high? Are they too high?
        Ms. Blom. The Department administered an administrative fee
    study which actually showed that the administrative fees that
    housing authorities receive is less than what it costs to run
    an effective Housing Choice Voucher Program. As a result of
    that, the Department has requested as part of the 2017 budget
    an increased amount of funds for administrative fees so that
    housing authorities receive the funding that they need to be
    able to properly administer the housing choice voucher--
        Mr. Barr. Well, someone disagrees with the statistics that
    you are offering. There is some analysis out there that says a
    full one-third of all Federal dollars spent on the Section 8
    program is spent on administration and overhead.
        Would you at least stipulate and agree that would be too
    much, it would be too high, it would be excessive?
        Ms. Blom. One-third is certainly too much.
        Mr. Barr. Okay.
        Let's talk about how we can get a little bit of
    administrative efficiency here. The consolidation idea, I would
    applaud anyone who is considering the ideas.
        Mr. Young, I am very sympathetic to the small public
    housing authorities and the agencies that have to deal with a
    lot of the administrative compliance costs, but I do believe
    economies of scale is a policy objective. I applaud a
    demonstration project.
        Can anyone speak to the idea of encouraging greater
    competition for these scarce Section 8 voucher allocations so
    that we reward public housing agencies, and maybe even non-
    public authorities, maybe some private institutions, some
    dioceses, some not-for-profit organizations who actually
    deliver results in delivering efficiency and more units for
    less cost?
        Is that a concept that any of you are open to?
        Ms. Sard. If I may, sir, we at CBPP have supported the idea
    of a demonstration of competition. It actually was once 20
    years ago recommended by Senate Republican appropriators for
    HUD to look into it and HUD rejected it at the time.
        But vouchers are different from public housing. Public
    housing is, by design, publicly owned on publicly-owned land.
    The administration of rental assistance can be much more
    flexible, and we ought to be looking for the best performance
    for the money.
        Mr. Barr. Well, amen to that. And I would encourage
    everybody on this committee to consider a competition so that
    we deliver more units and less cost.
        Thank you. I yield back.
        Chairman Luetkemeyer. The gentleman's time has expired.
        With that, the gentleman from Missouri, Mr. Clay, is
    recognized for 5 minutes.
        Mr. Clay. Thank you, Mr. Chairman.
        And I thank Ranking Member Cleaver, both of you, for
    holding this informative hearing.
        Let me start with Ms. Lovell. In your testimony, you state
    that St. Louis is one of the most segregated cities in the
    country and that economic disparity tends to follow the
    patterns of segregation. You also note that an important first
    step to a successful mobility counseling program is to dispel
    stigma and myths about the HCV Program among landlords and
    communities.
        Can you talk a little bit more about how structural
    discrimination can limit the mobility of voucher holders and
    other households, and can neighborhoods block landlords from
    getting established in these neighborhoods?
        Ms. Lovell. Thank you for the question. When Congressman
    Ellison was talking I--yes, there is a huge stigma against
    Section 8 voucher holders for--a lot of landlords won't accept
    them because they believe that somehow voucher holders are less
    reliable tenants. In fact, there are bad tenants everywhere.
        No matter how much you pay in rent you can be a good or a
    bad tenant, and the vast majority of Section 8 voucher holders
    are families who are just like everybody else, just want to
    have a decent place to live, and a roof over their head and a
    safe neighborhood in which to raise their children.
        There is a structural--there are many neighborhoods that
    are very opposed to not only Section 8 but even any rental
    housing. In St. Louis a couple of years ago, there was a big
    demonstration against an elderly development that was located
    in--I am not sure--in your district in South County, which to
    me just spoke to the stigma of not only affordable assisted
    housing but also the racial stigma that still exists in our
    community.
        Mr. Clay. Yes. Thank you for that response.
        Mr. Young, in follow up to Ms. Waters' questions, you
    indicated that some rules were violated. Were other tenants
    complaining about violations or was this an initiative by your
    housing authority? What specifically were the rules violated?
        Mr. Young. I am sorry, Mr. Chairman. I didn't say that
    rules were violated. I said that HUD accused us of rule
    violation of the residents dealing with our RAD demonstration
    project.
        And since, we have tried to provide HUD with the
    information and the documentation that would dispute their
    allegations but have yet to resolve the issue with them. But
    there is proof that exists that all of the affected residents
    had the opportunity to exercise their due process.
        Mr. Clay. Wait a minute now. Were they evicted?
        Mr. Young. Yes, sir.
        Mr. Clay. And they were evicted because of--
        Mr. Young. Of violation of the housing authority's
    policies.
        Mr. Clay. Okay, specifically what kind of violation?
        Mr. Young. Some of them may have dealt with--may--I
    believe, as Congresswoman Waters mentioned earlier, with drug
    violations. Some of them were just normal violations of the
    policy regarding guests, or a number of various violations.
        Mr. Clay. In the case of drug violations, were any criminal
    charges filed and were any drugs found?
        Mr. Young. To be honest, it has been--this has been over a
    2-year process and, to be honest, I probably need to review the
    files. There were various reasons and various different cases
    that HUD looked into.
        Mr. Clay. That gives me pause and concern when you put
    these struggling families out and then it makes their situation
    that much more difficult, that much more challenging. Where is
    the compassion for the people who need a roof over their head?
        Mr. Young. Congressman, I totally agree with you. We have a
    number of different levels that we go through before we evict
    any residents. That is a serious matter with us when you are
    evicting a family and they have to find somewhere else to stay.
    And usually we do not go to that point unless it gets to a
    situation where it is affecting the safety and well-being of
    the other families in a development.
        Mr. Clay. All right. I yield--
        Chairman Luetkemeyer. The gentleman's time has expired.
        Next, the gentleman from California, Mr. Royce, is
    recognized for 5 minutes.
        Mr. Royce. Thank you very much, Mr. Chairman.
        And thank you, witnesses, for joining us today.
        The cost of the Housing Choice Voucher Program consists
    really of two parts, right? You have the payments to owners to
    cover the difference between a tenant's contribution and the
    rent, and then you have the administrative fees paid to
    participating housing authorities. And logic would dictate that
    reducing the resources extended on one would free up resources
    for the other, but the pool of these resources that they are
    drawn from, that is not infinite.
        So the housing authorities in my district are unable to
    accept applicants to Section 8 wait lists, they tell me,
    because the administrative costs are rising.
        And I would like to ask Ms. Sard, you pointed to housing
    authority consolidation and also HUD shuttering poorly run or
    poorly performing, I guess I should say, housing authorities as
    a way to increase that efficiency. And I was going to ask you,
    how will that alleviate the wait for these families in need?
        Ms. Sard. I want the committee to be clear that today's
    consortia rules don't create the kinds of efficiencies that
    they potentially could, and that makes them less attractive to
    PHAs and less useful to families. So we need changes--
        Mr. Royce. We need to reform that.
        Ms. Sard. I think the key thing is to allow the agencies
    that agree to form a consortia to have a single funding
    contract with HUD. That means instead of each of them doing all
    the paperwork and HUD doing all the paperwork on the reporting,
    that saves time.
        It saves time on maintenance of waiting lists. Right now,
    each individual housing authority maintains their own waiting
    list. Families often apply to as many as they can in an area to
    maximize their chances of getting assistance, as they should,
    but--
        Mr. Royce. On economies of scale--
        Ms. Sard. --that is a waste of resources.
        Mr. Royce. Right, right. Are you suggesting city-wide we
    could do this, or county-wide as the most--
        Ms. Sard. It is going to vary in the area. There are a lot
    of parts of the country that have county-wide authorities.
    Mississippi, in fact, is a leader in having regional housing
    authorities as a strategy to work in rural areas.
        Mr. Royce. That we should--
        Ms. Sard. It is going to vary.
        Mr. Royce. We should pursue that.
        The second issue, you speak of efficiency here. I am
    encouraged by HUD's Moving to Work contract renewals and the
    expansion of that pilot program, and I will just tell you I
    have talked at length to the board of supervisors through that
    local payment standards.
        The housing authority, for example, of San Bernardino
    County in my district oversaw a reduction per unit cost from
    $730 to $652 in addition to a 9 percent decrease in residents
    living in the two highest-poverty areas. So that is kind of a
    win-win. We are spending more efficiently there while moving
    residents closer to better opportunities, which is why the
    board really likes the program.
        Ms. Blom, how has the Moving to Work contributed to
    economic mobility and efficiency in public housing? What
    characteristics can be replicated in other affordable housing
    programs so authorities like San Bernardino's can expand their
    success?
        And I will just share with you that I have expressed my
    feelings about this to Secretary Castro many times. I am glad
    to see HUD making progress, albeit slowly.
        And with that, I will go to your answer.
        Ms. Blom. Thank you very much.
        The Moving to Work demonstration that currently has 39
    agencies participating, including San Bernardino, have been
    leading the way on reducing administrative costs and providing
    more housing choice and self-sufficiency options to families.
    We used that as one of the pieces of information to help inform
    the streamlining rule that we published in April.
        But going forward, with regard to the 100-PHA expansion on
    MTW, we are going to be rigorously studying the policy areas
    for that expansion so that we can better utilize that research
    to be able to make changes and simplify and reduce burden to
    housing authorities. So I appreciate your support--
        Mr. Royce. A quick response on Ms. Sard's comments, too.
    Were you in concurrence with some of her suggestions on--
        Ms. Blom. I think with regard to consortium the Department
    believes that this is a vehicle that housing authorities should
    voluntary choose to do and that we are looking to provide
    guidance on consortium beyond just the voucher program but also
    on public housing, and we need to look at that in a unified
    way.
        Mr. Royce. Thank you very much.
        Thank you, Mr. Chairman.
        Chairman Luetkemeyer. The gentleman's time has expired.
        The gentlelady from Ohio, Mrs. Beatty, is recognized for 5
    minutes.
        Mrs. Beatty. Thank you, Mr. Chairman, and Mr. Ranking
    Member.
        And thank you to all of our witnesses here today.
        Let me just start by saying this is very dear to me. I have
    over 20 years of experience with working with public housing
    authorities and doing relocation work, so let me just tell you
    I know the difficulties, I know the funding fiasco, I know the
    issues that many of my people have living in poverty. And I see
    it as our role, your role, and especially those who are hands-
    on running public authorities, that you have a special
    obligation.
        We come here, we quote articles from Harvard and how well
    people are doing and they are moving out of poverty and what
    they are doing with their Section 8 vouchers, and we know the
    real reality. We know, as Congressman Ellison just said, in
    most of our communities we have long, long wait lists for them
    to get a Section 8 voucher. People wait what seems like to them
    a lifetime.
        So for the record I want to say I want more information,
    Mr. Young, about what is happening. I am appalled sitting here
    hearing from my colleagues and learning that earlier some 27
    people were evicted and--or put out of facilities where you
    have responsibilities of leadership and administration and it
    was 2 years ago; 2 years ago is not like it was 20 years ago.
        Coming here, there is an expectation that we will get
    information from you all, and that is something that you are
    going to hear a lot more about, and I want responses to what
    happened to those folks, where are they, what are we doing.
    Because this is what makes it bad for us when we come here
    trying to help individuals be more self-reliant, to be self-
    sufficient, all the terminology that we have used for over the
    last 40 years that we want people to move out of poverty.
        So you get where I am coming from.
        So let me get to my questions, Mr. Chairman.
        First, I want to also say some thank you's. I am from the
    great State of Ohio, and Ms. Blom, just to let you know, I have
    worked for 15 years with the Columbus Metropolitan Housing
    Authority and our $30 million Choice Neighborhood
    Implementation Grant is converting a public housing portfolio
    through rental assistance demonstration.
        And we were very sensitive when we went into a public
    housing entity, Mr. Young. I know what it is like, that you get
    people in there who have all kind of issues because they
    haven't had the opportunities that many of us have had, and
    especially people who look like us, or me.
        So I want to thank you for the dollars and saying to us not
    to displace anyone. If they need treatment, they get treatment.
    We brought in mental health counselors; we brought in drug
    counselors; we did financial literacy.
        So with all that said, Ms. Blom, in your testimony you
    discuss the problems with prioritizing subset populations for
    housing assistance absent targeting funding. Could you briefly
    expand on that or tell us why that is a problem and what it
    means for at-risk individuals in need of housing assistance?
        Ms. Blom. Thank you very much, and thank you for your
    support of the Choice Neighborhoods Program. The Columbus
    Housing Authority has done a phenomenal job of creating new
    housing in Columbus to support low-income families.
        With regard to your question--I'm sorry, remind me again
    what your question was?
        Mrs. Beatty. In your testimony, you discussed the problem
    with prioritizing subset populations for housing assistance
    absent of targeted funding.
        Ms. Blom. Thank you very much for that reminder.
        The housing authorities have the ability to establish the
    preferences for families who are on their waiting list. And
    depending on the locality, some jurisdictions may want to
    provide preferences for homeless; some may want to provide
    preferences for homeless youth; some may want to provide
    preferences to veterans, or to women who have been a victim of
    domestic violence.
        I think from the Department's point of view, we want to
    allow housing authorities and jurisdictions to have the ability
    to decide what is the most important policy objective for their
    jurisdiction and to allow housing authorities to have that
    flexibility.
        Mrs. Beatty. Okay. Thank you.
        I yield back my 1 second.
        Chairman Luetkemeyer. The gentlelady's time has expired.
        With that, we are at the end of the hearing, and we want to
    thank all our witnesses today for your testimony and for taking
    time out of your schedules to be here to answer our questions
    and to inform us. Your expertise and your insights are very
    important to us and we certainly appreciate everything that
    everybody has said.
        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 5 legislative days for Members to submit written questions
    to these witnesses and to place their responses in the record.
    Also, without objection, Members will have 5 legislative days
    to submit extraneous materials to the Chair for inclusion in
    the record.
        And with that, this hearing is adjourned.
        [Whereupon, at 11:54 a.m., the hearing was adjourned.]

                                A P P E N D I X

                               September 21, 2016

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