[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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