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


 
                   THE FUTURE OF HOUSING IN AMERICA:
                       INCREASING PRIVATE SECTOR.
                  PARTICIPATION IN AFFORDABLE HOUSING

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

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                         HOUSING AND INSURANCE

                                 OF THE

                    COMMITTEE ON FINANCIAL SERVICES

                     U.S. HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             APRIL 16, 2015

                               __________

       Printed for the use of the Committee on Financial Services

                           Serial No. 114-14

                 
                 
                 
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                 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
ROBERT DOLD, Illinois
FRANK GUINTA, New Hampshire
SCOTT TIPTON, Colorado
ROGER WILLIAMS, Texas
BRUCE POLIQUIN, Maine
MIA LOVE, Utah
FRENCH HILL, Arkansas

                     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
ROBERT HURT, Virginia                AL GREEN, Texas
STEVE STIVERS, Ohio                  GWEN MOORE, Wisconsin
DENNIS A. ROSS, Florida              KEITH ELLISON, Minnesota
ANDY BARR, Kentucky                  JOYCE BEATTY, Ohio
KEITH J. ROTHFUS, Pennsylvania       DANIEL T. KILDEE, Michigan
ROBERT DOLD, Illinois
ROGER WILLIAMS, Texas
                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on:
    April 16, 2015...............................................     1
Appendix:
    April 16, 2015...............................................    41

                               WITNESSES
                        Thursday, April 16, 2015

Crowley, Sheila, President and Chief Executive Officer, National 
  Low Income Housing Coalition...................................     9
Evans, James M., Director, Quadel Consulting.....................     7
Fennell, Brad, Senior Vice President, WC Smith...................     5
Todman, Adrianne, Executive Director, District of Columbia 
  Housing Authority..............................................     3

                                APPENDIX

Prepared statements:
    Crowley, Sheila..............................................    42
    Evans, James M...............................................    51
    Fennell, Brad................................................    57
    Todman, Adrianne.............................................    66

              Additional Material Submitted for the Record

Luetkemeyer, Hon. Blaine:
    Written statement of the Council of Large Public Housing 
      Authorities (CLPHA)........................................    75
    Written statement of Hon. Patrick J. Tiberi, a Representative 
      in Congress from the State of Ohio.........................    79
Waters, Hon. Maxine:
    Written statement of CSH.....................................    82


                   THE FUTURE OF HOUSING IN AMERICA:
                       INCREASING PRIVATE SECTOR.
                  PARTICIPATION IN AFFORDABLE HOUSING

                              ----------                              


                        Thursday, April 16, 2015

             U.S. House of Representatives,
                            Subcommittee on Housing
                                     and Insurance,
                           Committee on Financial Services,
                                                   Washington, D.C.
    The subcommittee met, pursuant to notice, at 9:19 a.m., in 
room 2175, Rayburn House Office Building, Hon. Blaine 
Luetkemeyer [chairman of the subcommittee] presiding.
    Members present: Representatives Luetkemeyer, Garrett, 
Pearce, Stivers, Ross, Barr, Rothfus, Dold, Williams; Cleaver, 
Velazquez, Capuano, Clay, Green, Ellison, Beatty, and Kildee.
    Ex officio present: Representatives Hensarling and Waters.
    Chairman Luetkemeyer. The Subcommittee on Housing and 
Insurance will come to order.
    Today's hearing is entitled, ``The Future of Housing in 
America: Increasing Private Sector Participation in Affordable 
Housing.''
    Before we begin, I would like to thank the witnesses for 
traveling to 2175 Rayburn for today's hearing. The audio-visual 
system in the Financial Services Committee's main hearing room 
is being replaced and the room is being updated to meet the 
requirements of the Americans with Disabilities Act, so I want 
to thank you all for your patience as we beg and borrow hearing 
room space for the next several months. I stopped by there this 
morning and they are making progress, but around here progress 
is at a snail's pace.
    So with that, I recognize myself for 3 minutes for an 
opening statement.
    I want to start today by looking at some facts. Since 
Fiscal Year 2002 the Federal Government has thrown more than 
$550 billion at HUD. There are roughly 122,000 families on 
Section 8 wait lists in New York City alone.
    In late February, St. Louis County, Missouri, opened its 
wait list for the first time since 2010. When the City of St. 
Louis opened its wait list in 2007, the housing authority got 
more than 27,000 applicants in 1 week.
    Countless other cities across the Nation find themselves in 
more dire situations, where proverbial wait lists for wait 
lists run years long. Given this, it may be surprising that the 
Department of Housing and Urban Development's Section 8 budget 
increased by 71 percent between Fiscal Years 2002 and 2013, yet 
I have heard no one indicate that more of the need is being 
met.
    These aren't signs of successful programs; they are signs 
that reform is desperately needed, that a status quo isn't good 
enough. The reality is that the funding situation isn't going 
to get better, and despite even the best of attempts, simply 
asking for more Federal dollars isn't going to work.
    We need to look at innovative ways to do more with less, 
including increased private sector participation in public and 
affordable housing. And while private capital may not work in 
every instance, it is essential that we examine the track 
record of demonstration projects like Moving to Work, and the 
Rental Demonstration Assistance Program, and public-private 
partnerships so we can serve more people in need with the 
limited resources at our disposal.
    In today's hearing we will hear from witnesses who have 
firsthand experience in forging partnerships that benefit 
communities in need. These are some of the many people and 
organizations striving to make a difference. We need to provide 
them with greater flexibility to meet the growing demand they 
face.
    My sincere hope is that members of this committee can work 
for positive results in public and affordable housing.
    And that we can work together to discuss reasonable reforms 
to HUD. The Department will turn 50 this year, and I think it 
is fair to say that it has at least a mixed record with few, if 
any, metrics to measure success. Despite trillions of dollars 
in funding and countless programs, too many Americans remain in 
need of housing assistance.
    This is an issue of great importance and one on which I 
hope we can work with members of this committee in the coming 
months.
    I want to thank our witnesses for appearing today. We look 
forward to your testimony.
    With that, I yield 5 minutes to the ranking member of the 
subcommittee, Mr. Cleaver. And for those of you who are not 
aware, there was a wonderful article in today's Roll Call about 
the temperament and attitude and the work ethic of Mr. Cleaver, 
which is excellent, and I commend him for his being 
acknowledged in such a way.
    Mr. Cleaver?
    Mr. Cleaver. Thank you, Mr. Chairman. I may not take the 
entire 5 minutes.
    I, too, would like to thank those of you who come here to 
give of your time and talent to help this committee as it 
struggles with issues that are extremely important to the 
people in this country.
    This hearing will cover a crucially important topic: the 
need for safe and affordable housing for our country's most 
vulnerable populations. This is especially topical given the 
shift in the housing market away from homeownership towards 
reliance on the rental market, following years of economic 
decline. As we are all aware, low-income Americans rely rather 
heavily on the rental market, a market that is currently 
falling short of affordable units.
    We, the elected leaders of the United States Congress, of 
the most powerful nation on this planet, have a duty to take 
care of our most vulnerable. This is not about the makers 
versus the takers. This is about reforming and investing in our 
social programs, expanding access to affordable housing, and 
ensuring our most vulnerable, especially our children, do not 
go to sleep at night in an unsafe and unsanitary environment. 
There are poor children in urban, suburban, and rural areas 
that I represent, and I will never turn my back on any of them.
    It would be impossible to discuss the topic of affordable 
housing without highlighting the integral role played by the 
Federal Government. There are a number of Federal housing 
programs that work to invest and produce affordable housing 
units by leveraging private dollars.
    Although I don't have enough time to go into detail on the 
programs, many of which I have actually orchestrated in Kansas 
City during my 8 years as mayor, I do think I would list a few. 
First, the HOME Investment Partnerships Program--Washington 
gives an acronym to everything, so the HOME Program--is a block 
grant program used by States and local governments to create 
affordable housing.
    And since 1992, over 1 million units of housing have been 
produced with HOME funds. This figure includes nearly 485,000 
homes for new homebuyers, more than 225,000 owner-occupied 
homes, and approximately 450,000 rental housing apartments.
    According to HUD, one dollar of HOME funding leverages an 
additional $4.17 in non-HOME funding.
    Second, I have not been shy in my support of the National 
Housing Trust Fund, created in 2008 with the passage of the 
Housing and Economic Development Recovery Act. This program is 
a block grant that prioritizes housing for extremely low-income 
families, and I applaud Director Watts' decision to make this 
fund available.
    I yield back the balance of my time.
    Chairman Luetkemeyer. I thank the gentleman.
    With that, let me introduce the panel today: Ms. Adrianne 
Todman, executive director, District of Columbia Housing 
Authority; Mr. Brad Fennell, senior vice president, WC Smith; 
Mr. James Evans, director, Quadel Consulting; and Ms. Sheila 
Crowley, president and chief executive officer, National Low 
Income Housing Coalition.
    Each of you will be recognized for 5 minutes to give your 
oral testimony.
    Just a quick primer on the lights in front of you: the 
green light means go; the yellow light means you have 1 minute 
left, so start thinking about wrapping up or seeing how you can 
curtail things because we want to try and stay within the 5 
minutes; and when the red light goes on, I have a gavel.
    I know that our committee members are normally used to 
having a clock on our own seats, so we are going to have to be 
watching those lights, as well, to watch for whenever we have 
our questions that we have, sort of wrapping up our own 
questions.
    So with that, Ms. Todman, you are recognized for 5 minutes.

 STATEMENT OF ADRIANNE TODMAN, EXECUTIVE DIRECTOR, DISTRICT OF 
                   COLUMBIA HOUSING AUTHORITY

    Ms. Todman. Good morning, Chairman Luetkemeyer, Ranking 
Member Cleaver, and members of the Housing and Insurance 
Subcommittee. I am Adrianne Todman, executive director of the 
D.C. Housing Authority (DCHA), and I am pleased to be here 
today to provide information and insight on affordable housing 
innovation undertaken here in D.C.
    My expertise in this area builds on 25 years of experience 
at both the Federal and local levels of government. I began my 
professional career here in this building as a legislative 
assistant and, after 4 years, moved over to a public policy 
position at HUD, where I had the great privilege of working to 
help shape the HOPE VI program during its early years, and 
working and learning from some of the country's greatest minds 
on community development.
    I now have the responsibility of implementing many of the 
programs and rules I worked on at the Federal level. And in 
doing so, I can recognize that the best of intentions are too 
often unnecessarily bogged down by burdensome processes, 
limiting our ability to shape programs with locally-driven 
solutions. DCHA is very fortunate to be a Moving to Work 
agency, which allows us to effectively shape our response to 
local issues.
    Our housing authority cannot fulfill its mission alone. Our 
success requires the support of this Congress, HUD, our local 
leadership, our clients, and the private sector. Without our 
private sector partners, we would be unable to achieve our core 
mission.
    My housing authority houses more than 50,000 low-income 
families here in the Nation's capital. Twenty thousand of those 
families live in public housing, and the remainder will use a 
voucher in the rental market system.
    For those families who live in the private rental units, we 
rely on our local landlords to provide affordable housing, and 
we work with over 3,000 landlords at this point. Additionally, 
DCHA works very closely with many private and nonprofit 
developers to create affordable units for low-income families 
in the private development projects. Through project-based 
partnerships, we have created almost 2,000 units throughout the 
district and in neighborhoods that now are less affordable to 
moderate-income families.
    Our traditional public housing developments represent the 
backbone of affordable housing here in D.C. We have 8,300 units 
of public housing for low- and moderate-income households. This 
housing stock is a precious resource both locally and 
nationally.
    While my colleagues across the country would love to 
receive 100 percent of the funding level that is promised to 
us, we know that we cannot wait for the priorities of our 
funders to change. This is why we must explore private-driven 
solutions to preserve these units.
    Today, in addition to the Choice program, the successor 
program to HOPE VI, HUD has created a new tool, the Rental 
Assistance Program. I support this program and fully intend to 
use it.
    At DCHA we have analyzed our need and we have determined 
that DCHA will need more than $1 billion in additional funding 
to bring our entire stock up to a 20-year viability. We work 
aggressively on our redevelopment and modernization pipeline, 
but with a process that is very sensitive to our resident 
concerns.
    Our work has been vital to economic development, but, very 
importantly, the preservation of low-income affordable units 
from neighborhoods like Capitol Hill to Columbia Heights. Over 
the years, we have done this work always with a sensitivity to 
the families impacted. We have a robust process prior to 
redevelopment, and we also protect our deals to protect the 
public asset into the future.
    Finally, our work with the private and nonprofit sectors 
includes our work to help families achieve their full potential 
and improve their economic situation. As a Moving to Work 
agency, we are able to use those funds to actually provide 
services to our residents and to be able to provide grants to 
private sector partners to achieve their service goals.
    I would like to conclude with some recommendations on ways 
that my colleagues and I can receive help.
    First, the approval process: The existing mixed finance 
approval process at HUD is very complex and lengthy. It 
typically takes several months to get approvals. We need to 
work with HUD and develop a more streamlined process.
    Our repositioning: Over the past couple of years, the 
approval process for a demo-dispo has become ever more curious. 
Though the statute states that HUD shall approve a demo-dispo 
application if the PHA certifies to certain items, right now 
HUD is requiring far more justification rules that we have to 
follow.
    Underutilized tools: Both the Section 30 and the Capital 
Fund Financing Program are tools that housing authorities are 
not using to their full capacity, given a number of different 
issues. One with Section 30 is that it has not been fully 
implemented by HUD. And with the Capital Fund Financing 
Program, it only works if our capital fund is more fully 
funded.
    But most importantly, we need to be able to find local 
solutions to local problems. DCHA is very fortunate to be a 
Moving to Work agency, and this has provided us the ability to 
shape our programs to respond to local needs, and we encourage 
that flexibility for other agencies across the country.
    That concludes my testimony. It is clear to me, given my 
experience, that the appropriate level of public investment, a 
business environment that welcomes private sector involvement, 
and the ability to apply local solutions to local problems, 
housing authorities will be able to maximize our ability to 
preserve and create low-income housing throughout the country.
    Thank you for inviting me to testify today.
    [The prepared statement of Ms. Todman can be found on page 
66 of the appendix.]
    Chairman Luetkemeyer. Thank you, Ms. Todman.
    Mr. Fennell, you have 5 minutes.

   STATEMENT OF BRAD FENNELL, SENIOR VICE PRESIDENT, WC SMITH

    Mr. Fennell. Good morning. My name is Brad Fennell, and I 
am the senior vice president at WC Smith. I am here this 
morning to share the successes and challenges that we faced 
while developing Sheridan Station, a transit-oriented, mixed-
income development one block from the Anacostia Metro in 
Washington, D.C.
    WC Smith in 2007 partnered on this project with the D.C. 
Housing Authority. Due to its overall size and complexity, the 
development was financed and constructed in three phases, with 
the last of the units delivering this summer.
    There is extreme demand for high-quality, well-managed 
affordable housing. The results we have seen at Sheridan 
demonstrate the severe shortage of affordable housing options. 
For context, when we delivered phase one we had over 1,700 
names registered, enabling us to pre-lease units as we 
completed construction.
    But Sheridan Station is not just an affordable development. 
It is also an environmentally friendly project.
    It was the first multifamily building in D.C. to be awarded 
LEED platinum for its superior energy performance. The building 
features a solar array that produces 60 percent of the 
building's common area electricity, as well as a rain garden, 
energy-star appliances, and underground rainwater cisterns that 
collect storm water runoff.
    While Sheridan Station replaces affordable housing, it is 
not recreating the dilapidated housing of the past. It is set 
apart by high-quality finishes, community amenities, and 
resident support.
    More significantly, the combination of rental and 
homeownership units contains a true mix of incomes, and also 
attracts a diversity of residents. Incomes at Sheridan run from 
as low as $5,000 a year to $230,000 a year.
    When complete, Sheridan Station will provide a total of 327 
housing units. The rental units utilize private equity derived 
from the Housing Tax Credit fund, where incomes are capped at 
60 percent. But 110 of the rental units in this project are 
further subsidized with Section 8 annual contribution 
contracts, providing housing for the neediest in our City.
    The $20 million in HOPE VI funds has been key to the 
success of this project. The funding allowed the development to 
move forward while filling a gap in financing.
    While the Federal subsidy was a driving factor, it is 
important to point out that the development team leveraged 
$5.65 in other private and local sources for every dollar of 
Federal spending. Also, the money was structured as a loan, so 
the Federal subsidy is repaid at a very low interest rate.
    By leveraging private investment, the Housing Tax Credit 
was critical to providing affordable homes to many more 
families than the HOPE VI funds could have provided on its own. 
The affordable apartments that it financed complemented the 
deeply targeted HUD-funded apartments and the market-rate homes 
to make Sheridan Station a truly mixed-income community.
    As the success at Sheridan Station shows, the private 
sector is equipped to provide affordable housing, and our 
region and many other areas in the country are in critical need 
of additional units. Continued public investment, whether it is 
more ACC, more project-based vouchers, more capital funds, or 
more HOPE VI-like programs, will help fill the gap between the 
market-rate costs and subsidized rent and will encourage 
developers like us to create more housing.
    Developing affordable housing is not without challenges, 
and increased funding is the single biggest impediment. But 
there are other areas that would enhance the private sector 
involvement.
    One is relaxing the 60 percent income limit imposed by the 
housing credit unit. A better approach would be to allow a 
blend of incomes with a cap of 80 percent AMI as long as the 
building average is below 60 percent.
    The floating tax credit rate is another challenge. This 
rate is published monthly by the IRS and it helps to determine 
the amount of cash equity a project sees from an investor. This 
rate has been near historic lows, starving new projects of 
equity.
    The project equity amount is often not known until the 
month of closing, which makes it difficult. A way to solve this 
problem would be to set aside a constant rate of 4 percent and 
9 percent, rather than to have them float monthly.
    The development community is wary of uncertain delays, both 
of which add significantly to the cost of a project, so 
streamlining the public agency award and approval process is a 
must.
    An additional limiting factor is the scarcity of the 
housing credit resources. Many developments each year cannot 
get credits they need. Making more credits available would 
produce more units like we have at Sheridan Station.
    Another challenge is that the Section 8 ACC rent subsidy 
from HUD doesn't take the apartment size into account. The 
current monthly subsidy is a flat $425 for a studio or a three-
bedroom.
    The subsidy limit creates disincentives to build larger 
units. At Sheridan Station the two-bedroom units currently rent 
for $1,295, so the subsidy covers less than half the cost of 
the rent.
    Lastly, a portion of this project was covered by the 
Federal Davis-Bacon wage scale and classified as commercial 
heavy highway, despite being entirely residential midrise. This 
added a 5 percent premium, equaling $1 million in construction 
costs.
    Affordable residential projects with wood frame 
construction should be classified as residential under the 
Davis-Bacon wage scale act. This will stretch the overall 
effectiveness of any public subsidy.
    Members of Congress, staff, and others here today, thank 
you for this opportunity to testify at this hearing. We at WC 
Smith are very proud of our accomplishments at Sheridan Station 
and hope that we have been able to share some helpful 
information today.
    Thank you.
    [The prepared statement of Mr. Fennell can be found on page 
57 of the appendix.]
    Chairman Luetkemeyer. Thank you, Mr. Fennell.
    Mr. Evans, you have 5 minutes.

    STATEMENT OF JAMES M. EVANS, DIRECTOR, QUADEL CONSULTING

    Mr. Evans. Chairman Luetkemeyer, Ranking Member Cleaver, 
and subcommittee members, thank you for the opportunity to 
testify on the very important topic of increasing private 
sector participation in affordable housing.
    My name is Jim Evans, and for the past 23 years I have 
worked in the field of affordable housing. And for the past 11 
years I have worked for Quadel Consulting. Formed in 1978, 
Quadel provides consulting, training, and direct management of 
affordable housing programs.
    My testimony is based upon my experiences and focuses on 
the national need for more affordable housing production and 
preservation, as well as strategies to increase private sector 
participation. To assure private sector participation, the 
national housing policy must be consistent and adequately 
funded. Any changes to the national policy should be based on 
private market principles that are designed to foster cost-
effectiveness and innovation.
    For many years, the Housing Choice Voucher Program has 
accounted for the largest part of the HUD budget. 
Unfortunately, funding and program requirements have not kept 
pace with the market. To continue serving low-income families 
on the program within the resources available, housing agencies 
have been forced to take actions that have caused some private 
sector players to discontinue participation in the program or 
decide not to accept an otherwise qualified tenant with a 
housing choice voucher.
    Another challenge is the inconsistency between program 
requirements. For example, the statutory maximum term of a 
project-based voucher contract is 15 years. However, an FHA-
insured loan requires that units remain affordable during the 
term of that loan, which could be as long as 40 years.
    The inability to easily layer affordable housing finance 
programs with subsidy programs discourages private investment. 
To fix this problem, it is recommended that there be 
flexibility to allow the term of the subsidy contract to be the 
same as that of the loan program.
    One tool that is being used to identify affordable housing 
innovation is the Moving to Work demonstration, or MTW. Since 
its authorization in 1996, participating agencies have found 
new, better, and more cost-effective ways to deliver assisted 
housing services. In fact, many of the MTW innovations have 
become national policy.
    It is also important to note that despite criticism to the 
contrary, MTW both protects and benefits residents as it helps 
housing authorities make programmatic investments where they 
are most needed.
    To build on the demonstration's success, it is recommended 
that MTW either be expanded or more of the innovations be built 
into the current programs. As well, it is important to find 
more ways to promote fair housing and maximize the value of the 
Section 8 subsidy by providing agencies the flexibility they 
need to expand access to private sector housing opportunities 
in their communities that are within the reach of voucher 
holders.
    Next, I would like to acknowledge the importance of the Low 
Income Housing Tax Credit program. Tax credits have been the 
workhorse of affordable housing development and preservation 
since the 1980s.
    Congress can strengthen and enhance the contributions of 
the private sector by continuing to support and expand the use 
of housing credits for affordable housing development and 
preservation.
    The Rental Assistance Demonstration, or RAD, is HUD's 
program to introduce private investment into public housing and 
has experienced some early successes. One current challenge to 
the RAD program is access to 9 percent tax credits. Some of the 
public housing portfolio is in desperate need of investment, 
and 9 percent credits are the only financing tool that will 
make a RAD conversion viable.
    To attract private investment and reposition the projects 
with the greatest need of investment, it is recommended that a 
special allocation of 9 percent credits, separate from the 
regular allocations, be created to specifically address the 
conversion of public housing units.
    And while RAD is an important tool for preserving public 
housing, it may not be the best option for all agencies. The 
current formula for managing public housing assets is broken. 
The combination of tenant rent and an underfunded operating 
subsidy and capital fund program cannot meet the operational 
needs of an aging public housing inventory.
    PHAs are authorized to mortgage their public housing and 
real estate to secure private sector financing through Section 
30. While this flexibility has not been used often, it is 
gaining in popularity and it opens new avenues for private 
investment while at the same time making sure to protect the 
rights of tenants.
    To assure more use of this option, the approval process 
should be simplified. As well, the lessons learned from MTW 
should be used to authorize PHAs to combine Federal funds to 
preserve existing housing.
    Another important part of the national affordable housing 
strategy includes the Section 8 project-based assistance 
portfolio. Since the early 1990s, Congress authorized the use 
of private sector model to manage and oversee the 
administration of the program. Because these units are owned by 
the private sector and there is debt on all or most of these 
properties, it is essential that Congress ensure an adequate 
and uninterrupted process for payments.
    My testimony can be summarized into three overarching 
themes. First, the role of the private sector is essential to 
preserve affordable housing. Second, the government must offer 
adequately funded programs to encourage private sector 
participation and innovation. And third, our efforts must 
respect the rights and benefits of program residents and 
participants.
    For more than 37 years Quadel Consulting has been proud to 
work in the field of affordable housing. We look forward to 
working with your committee on legislative initiatives designed 
to enhance the availability and preservation of affordable 
housing.
    Thank you, Mr. Chairman, and subcommittee members.
    [The prepared statement of Mr. Evans can be found on page 
51 of the appendix.]
    Chairman Luetkemeyer. Thank you, Mr. Evans.
    Ms. Crowley, you are now recognized for 5 minutes.

  STATEMENT OF SHEILA CROWLEY, PRESIDENT AND CHIEF EXECUTIVE 
         OFFICER, NATIONAL LOW INCOME HOUSING COALITION

    Ms. Crowley. Thank you, Chairman Luetkemeyer and Ranking 
Member Cleaver. Thank you very much for the opportunity to 
testify today.
    I am Sheila Crowley, the president and CEO of the National 
Low Income Housing Coalition.
    First, I would like to bring greetings from Empower 
Missouri, formerly the Missouri Association for Social Welfare. 
They are our State coalition partner in Missouri.
    I am going to emphasize three points in my oral testimony. 
First, we have a severe shortage of rental housing that 
extremely low-income households can afford. Affordability means 
paying no more than 30 percent of your income for your housing.
    And in housing policy, low income is defined as income 
between 50 and 80 percent of the area median income; very low 
income is between 31 and 50 percent; and extremely low income 
is income at 30 percent of the area median income or less.
    Table one compares 30 percent of national median family 
income to the Federal poverty level for a family of four. And 
what you can see is that the 30 percent AMI is now below the 
poverty level substantially for a family of four, and it is 
getting worse as time goes on. This shows you how poor 
extremely low-income families are.
    Figure one is a graph that compares the number of renter 
households in these income groups to the number of housing 
units renting at prices they can afford. So the column on the 
left are units; the column on the right are households.
    And you will see that there is a surplus of housing 
affordable to the very low-income and low-income households, 
and there is a shortage of housing that is affordable to 
extremely low-income households.
    We have also added another category at the very bottom that 
we call deeply low-income. These are households with incomes at 
or below 15 percent of the area median income. And for a one-
person household, 15 percent of the median family income is 
$6,909 a year. This is even less than the Federal supplemental 
security income payment for one person in 2015, which is 
$8,796.
    The shortage for extremely low-income households is even 
worse because many of the units affordable for lower-income 
groups are occupied by higher-income households. Nationally, 
there are 10.3 million extremely low-income renter households 
and 3.2 million homes that are available and affordable to 
them, so the real shortage is 7.1 million units.
    The first consequence, of course, is that poor people spend 
much more than they can afford for their housing. Seventy-five 
percent of extremely low-income households spend more than half 
of their income for their housing and are at high risk of not 
being able to pay the rent and eventually becoming homeless.
    Despite gains in recent years in addressing homelessness, 
the number of homeless people remains alarmingly high, 
especially among families with children. In New York City 
alone, there are 25,000 homeless children today.
    To solve this problem, we have to invest in more housing 
that is affordable to people at the lower end. That will create 
the ability for people to afford housing at that end and free 
up housing at the higher end.
    There are numerous opportunities for the private for-profit 
sector to be involved, but only in the context of public-
private partnerships. Without a public commitment, there is no 
motivation for private investment.
    The data on the housing shortage and the years-long waiting 
list for Federal housing assistance are evidence that there is 
a market for rental housing that extremely low-income families 
can afford. If there were a profit to be made creating and 
operating this housing, somebody would have done so by now. 
There is a mismatch in what it costs to build and operate 
rental housing that these families can afford and what it is 
that they can pay.
    It is possible to end homelessness and the shortage of 
affordable rental housing in America without costing the 
Federal Government one additional dollar. We simply need to use 
our existing Federal housing subsidies more efficiently and 
effectively.
    Representative Ellison's Common Sense Housing Investment 
Act would make modest changes to the mortgage interest 
deductions to give tax breaks to moderate and low-income 
homeowners and generate billions of dollars of new revenue for 
affordable rental housing for extremely low-income households.
    One of the programs that he would fund is the National 
Housing Trust Fund. As the committee knows, the trust fund 
received its first funds in 2016 through the GSEs. It will 
serve as an incentive to bring other resources to the 
development of rental housing for extremely low-income people 
for at least two reasons.
    First, its deep income targeting. There is no other Federal 
program that provides new money to support rental development 
targeted to extremely low-income households.
    Second, the National Housing Trust Fund's flexibility. It 
provides capital grants or loans that can be coupled with other 
sources of funding and used for a range of costs associated 
with construction of multifamily properties. Projects will be 
designed based on local market conditions, local priorities, 
and local resources.
    Thank you very much, and I look forward to your questions.
    [The prepared statement of Dr. Crowley can be found on page 
42 of the appendix.]
    Chairman Luetkemeyer. Thank you, Ms. Crowley.
    With that, we will begin our questions. I am going to defer 
my questions to the very end.
    And to that end, we will begin with Mr. Rothfus from 
Pennsylvania. He is recognized for 5 minutes.
    Mr. Rothfus. Thank you, Mr. Chairman.
    Mr. Evans and Ms. Todman, you both mentioned expanding the 
Moving to Work program in your testimony, and I am interested 
in exploring this program a little bit further.
    In Pennsylvania the housing authorities participating in 
the demonstration are the City of Pittsburgh Housing Authority 
and the Philadelphia Housing Authority, two of the big cities 
in our State. In your experience, do smaller housing 
authorities in the suburbs or rural areas elsewhere across the 
country participate in the program with success?
    Ms. Todman?
    Ms. Todman. Is the question whether or not there are 
smaller--
    Mr. Rothfus. Yes. Are those in the suburbs or the rural 
areas, the smaller ones, participating in the program with some 
success?
    Ms. Todman. No, there certainly are. There are 39 housing 
authorities that represent almost every size of agency within 
the full housing authority industry. And the concept of Moving 
to Work isn't unique to things that urban area housing 
authorities need.
    And there are two basic concepts. One is the ability to 
receive our funds from HUD and to be able to use those funds in 
a way that best addresses things that are happening on the 
ground. Here in D.C., we do use some of our funds on the 
Housing Assistance Program (HAP) program to help support our 
public housing program because it is underfunded.
    The second piece that I think is also equally needed for a 
smaller housing authority is the ability to re-regulate when 
necessary when you look at HUD rules. As somebody who used to 
work at HUD, I know that there are many regulations that 
sometimes get in the way of progress, and so we are able to 
look at those rules and re-regulate them in a way that it is a 
better construct on the ground.
    So I think that it is a program that is equally valuable to 
larger and smaller housing authorities.
    Mr. Rothfus. Mr. Evans?
    Mr. Evans. I agree with Ms. Todman. And going back to the 
original question, whether the MTW program should be expanded, 
it should either be expanded or the innovations that have been 
learned from MTW should be applied more broadly to the existing 
programs.
    Mr. Rothfus. Are there components or aspects of the program 
that make it more attractive to a larger housing authority 
versus a small housing authority--either of you?
    Ms. Todman. When I speak to my colleagues who represent 
smaller housing authorities, there is a sense that perhaps as a 
smaller housing authority they don't need it as much. But I 
think that after we have sat down and explained to them the 
merits of it and the capacity to really, truly be able to 
exercise some more control over their funding buckets, there is 
a little bit more awareness about the effect upside.
    So we have fewer smaller housing authorities, but I don't 
think that is because it is less of a tool in rural and--
    Mr. Rothfus. But given that education effort for the 
smaller housing authorities, do you think they would be more 
eager--
    Ms. Todman. Yes.
    Mr. Rothfus. --to participate?
    Ms. Todman. Yes I do.
    Mr. Rothfus. Could either of you--Mr. Evans or Ms. Todman--
give me some examples of the successful, innovative ideas that 
Moving to Work housing authorities have implemented to best 
serve the local population's needs? And could a non-Moving to 
Work authority do those kinds of things?
    Ms. Todman. Do you want me to go first? Okay.
    Some of the ways we have used our flexibility here in D.C. 
have been directly to help our clients find affordable housing. 
One very basic thing is, for many of you who live in the 
District of Columbia, it is not cheap. It is hard to find 
affordable units.
    And so one of the things that we have done is we have 
increased our payment standard even above that of what HUD 
would allow, to 130 percent. And by doing so, we have been able 
to move our clients into additional areas of D.C. that even 6 
or 7 years ago were inaccessible. So that is one way.
    Another is that we have been able to, as I mentioned, which 
is huge for us--we have 8,000 public housing units and with the 
funding the way it is, I have an option of either moving some 
funds into my public housing program or shutting down the 
units. And so we have opted to move funding into our public 
housing program.
    Mr. Rothfus. Mr. Evans, I noticed your background and the 
service you have given to the country. Thank you for that.
    Are any of your clients you work with doing innovative work 
with the veterans population that you could speak to?
    Mr. Evans. Yes. A number of our clients are working either 
through the VASH program, the Veterans Affordable Supportive 
Housing program, or also creating--just in creating affordable 
housing, and they have local preferences that are targeted to 
veterans and returning warriors.
    Mr. Rothfus. Great. Thank you.
    Ms. Todman, I want to talk a little bit--although I think I 
am going to be running out of time shortly. You mentioned a 
discussion of some of the assisted living space work that you 
are doing. Could you talk more about that project and what 
other housing authorities across the country may have had 
success with when serving the needs of seniors and disabled 
individuals who may not necessarily be taking part in a job-
creating program and other activities designed to help able-
bodied folks achieve economic independence?
    Ms. Todman. Sure. There are a few of us who have done this 
because apparently it is really hard, which is what we 
discovered trying to blend the assisted living rules with the 
rules of public housing. So we are the only ones here in this 
region who have a truly low-income assisted living site, and we 
were able to do it with some components of Moving to Work.
    It is only 14 beds. We are using it as a model to learn how 
to do this to scale. But our seniors and the persons who live 
there love it.
    Mr. Rothfus. Thank you, Mr. Chairman.
    Chairman Luetkemeyer. Thank you.
    With that, we will go to the distinguished ranking member 
from Missouri, Mr. Cleaver.
    Mr. Cleaver. Thank you, Mr. Chairman.
    First of all, Ms. Crowley, thank you so much. I have been 
on this committee for 10 years, and as soon as you got out of 
college it was probably my first year on the committee. You 
have been coming before this committee for those 10 years. I 
think you were probably 18 at the time when you first showed 
up.
    But thank you for all of your commitment of your knowledge 
to us.
    Ms. Crowley. Thank you, sir.
    As a former mayor, I know--and every mayor in the country 
knows--there is hardly any partisanship in municipal 
governments. Nobody has a Republican pothole and a Democratic 
way of fixing that pothole. Everybody just works together.
    So we wanted and still want--any city you go to, no matter 
who the mayor is, they want public-private partnership. That is 
the goal. Every day you wake up you want that kind of 
partnership because you want to use the expertise of the 
private sector, which they have, and efficiencies.
    It helps all of the taxpayers because if we get public-
private partnership we don't have to go out and issue bonds or 
otherwise go into municipal debt. So everybody wants it.
    I guess my question to you is, my experience has been that 
the public sector has been less than enthusiastic about 
becoming involved in affordable housing, which I understand. 
They are in business. They are trying to make a profit.
    So do you think that we could have a private market 
exclusive of Federal involvement--financial involvement?
    Ms. Crowley. For rental housing for low-income people?
    Mr. Cleaver. Yes, for--
    Ms. Crowley. No.
    Mr. Cleaver. Yes, for affordable housing.
    Ms. Crowley. No. There is just no evidence that there is a 
willingness to do that, nor why would there be? If you are in 
business to turn a profit--even a modest profit--your customers 
have to be able to afford your product, and if what it costs 
you to build and produce and deliver your product is more than 
your customers can afford, then you are not going to do that.
    And so there are several things we could do. One is if 
people made more money there would be a greater market, and it 
certainly would be better if low-income people were able to 
improve their incomes. It is really alarming how much the 
income has stagnated when you look at the comparison between 
the poverty level and the ELI level over the last 15 years.
    Obviously, if people had more money they could do that, so 
there are plenty of things that the Congress could do to 
address that.
    But in the immediate, very near future, we have kids who 
are sleeping in shelters and in cars and in places where 
children should not be sleeping, and they can't wait for us to 
fix that. They need for us to put money into housing now and 
get them into safe, decent, and affordable homes.
    And that is a public responsibility. The private sector 
can't do that without a public investment.
    Mr. Cleaver. Thank you. That is my experience.
    Let me ask Ms. Todman, being here in Washington, D.C., you 
are closer to this than probably any other director of a PHA or 
Federal housing program. Are there impediments to public-
private partnership--PPPs, or P to the third power--here in 
Washington? I am wondering, is there something that the Federal 
Government can do that would encourage greater private 
participation?
    Ms. Todman. Thank you for that question. In D.C., we are 
often challenged by very high rents. And back to the point you 
made earlier, usually--other than Brad--other folks in the 
private sector are really in this game so that they can have 
something at the end of the day.
    And if the pockets of money that housing authorities have 
to do public-private partnerships isn't enough to hit those 
rents because, to Ms. Crowley's point, it is the public sector 
funds that actually allow our clients--our low-income clients 
to live in parts of town that have been changing over the past 
couple of years. But if we are not able to get to that rent 
level then it means that unit can't be supported and operated 
to service debt coverage.
    So one of the things that we have done to be able to hit 
those rent levels is using our Moving to Work flexibility to be 
able to subsidize what HUD would already suggest is our rent 
level. And by doing so, we are able to put affordable housing 
in parts of D.C. that would otherwise not be available.
    Mr. Cleaver. Thank you.
    Chairman Luetkemeyer. Thank you. The gentleman's time has 
expired.
    We will go to the gentleman from Illinois, Mr. Dold, for 5 
minutes.
    Mr. Dold. Thank you, Mr. Chairman.
    And I certainly want to thank you all for taking your time 
to be here today.
    Ms. Todman, I wanted to kind of build off what you had 
mentioned in your testimony: local solutions to local problems. 
I have to tell you that in--it goes well beyond housing when we 
look--and I am talking to people back in the district, they 
just think the government doesn't get it.
    They are looking for a little bit more local control. They 
want to be able to have the flexibility to solve problems 
because a one-size-fits-all mentality oftentimes doesn't work.
    So I was hoping you might be able to shed a little bit more 
light on local solutions to local problems. I can tell you that 
in the 112th Congress this subcommittee actually held a hearing 
on Moving to Work, where one witness from the Chicago Housing 
Authority, I would say more my hometown type area, said that 
the landscape of Chicago and the life trajectory of thousands 
of low-income families would not be the same without the local 
flexibility the Moving to Work program provides.
    Are there other initiatives or programs besides the Moving 
to Work program that you see could provide more local 
flexibility to change the lives of the families that you serve?
    Ms. Todman. Sure. Again, we have used our Moving to Work 
flexibility, and I think all my colleagues have, in three very 
important ways to help our clients.
    The first is, I spoke earlier about the ability to help one 
program feed the other, and here in D.C., many of you would be 
driving around more boarded-up public housing units but for 
Moving to Work and being able to use those funds more fungibly.
    The second is that our voucher program is extraordinarily 
complicated, and so we have been able to work with our 
landlords and our voucher participants to streamline some of 
the regulations that other non-Moving to Work agencies cannot. 
And so we have been able to get families, including veterans, 
housed more quickly, and been able to have families live in 
more higher-rent areas than just certain parts of the City.
    And then third, HUD does not fund us to do any type of 
social service work. And the average income of my clients is 
about $12,000. If we are ever going to be able to help those 
families achieve their potential, we need to invest in them. 
And we have been able to use our Moving to Work funds, and my 
colleagues as well, to make those investments in our youth and 
our work--our families who can work so that they can actually 
have some services.
    Mr. Dold. Let's build on that just for a second, because I 
think we all can share the goal that we want to make sure that 
folks who are in public housing are able to become self-
sufficient and move on. And I can tell you, in talking to our 
housing authorities, the wait list is a long wait list--in 
fact, it has been closed for several years, meaning that people 
who needed it or wanted it couldn't get on. So obviously there 
is a need to kind of think differently about how do we open it 
up and expand it.
    But on the idea of better linking the housing services with 
education, job training, and encouraging low-income individuals 
to become more independent, how do we get them--or what are the 
successes that we can point to to get them out of public 
housing and more self-sufficient?
    Ms. Todman. We have a very robust homeownership program 
where we have been able to partner with local banks and local 
public agencies to actually work with some of our low- and 
moderate-income clients. Just last month I had three of our 
public housing residents actually close on their homeownership 
units, which was very exciting for everybody involved.
    And so that is how we--it is very incremental. It is family 
by family. It moves slowly, but it happens.
    To your point about the waiting list, we have about 41,000 
people on our waiting list here in D.C., so the more we are 
able to help families who have achieved something other than 
public housing, the more we can help the families on that 
list--but without penalizing families who are not able to move 
out of public housing, because I have found that there is no 
rental market that they can afford but for the units that we 
have.
    Mr. Dold. I wanted to see if I could shift gears a little 
bit and talk about social impact bonds. Obviously, there is a 
need. We have a number of folks on a waiting list trying to 
attract private sector investment.
    Ms. Crowley, do you think that we might be able to use 
something like a social impact bond in public housing to 
attract private sector investment?
    Ms. Crowley. I think social impact bonds are a very 
interesting concept. They are very new in the field, and so we 
have a lot to learn about that.
    My understanding of them is that the private sector puts up 
money to deliver a particular kind of service, usually around 
outcome-based things like recidivism. And then if the service 
delivery is successful, the government pays for it, and then 
the service provider can pay back the private company.
    It seems a little complicated to do that. They are known as 
these pay-for-success kinds of ideas.
    I think we should be trying as many different things as we 
can, but I don't see that going to scale in a way that is going 
to address a problem of the magnitude that I have outlined 
here.
    Mr. Dold. Thank you.
    My time has expired, Mr. Chairman.
    Chairman Luetkemeyer. The gentleman's time has expired.
    With that, we will go to the gentlelady from New York, Ms. 
Velazquez--
    Ms. Velazquez. Thank you, Mr. Chairman.
    Chairman Luetkemeyer. --for 5 minutes.
    Ms. Velazquez. Ms. Crowley, do you have any opinion as to 
the risks that Moving to Work poses for public housing 
residents?
    Ms. Crowley. Moving to Work has a lot of risk for public 
housing residents because under the flexibility that Moving to 
Work provides housing authorities, many of the protections that 
tenants have, the things that make public housing a good option 
for many people, are possibly gone. And that includes the 
provisions that make the rents affordable.
    Rents can go up. Housing authorities would no longer have 
to serve extremely low-income households. They will, but they 
are not required to do that. There are all sorts of things that 
housing authorities can do or not do that may have a negative 
impact on tenants.
    I am not saying that there is any malevolence, but I do 
think that in the name of experimentation, we haven't really 
figured out how to determine whether a given action by a 
housing authority is helpful or harmful.
    Our major criticism of Moving to Work, besides the 
fundamental protections that are lost, is that we don't know 
what works. We haven't done any serious evaluation of it.
    I have read all the studies. They are descriptive. They 
say, ``This is what this housing authority did, this is what 
that housing authority did.''
    Some of those things sound good; some of those things sound 
scary. But in the absence of serious empirical evidence, I 
think we should proceed with caution.
    Ms. Velazquez. And in your opinion, what are better ways to 
address public housing capital needs?
    Ms. Crowley. I do think that there are some things about 
Moving to Work that should be looked at. The ability to merge 
the funds is something that we support under the stakeholder 
agreement, which is an agreement between HUD and the advocates 
and housing authorities.
    And that was something that Ms. Waters proposed a couple of 
years ago, to be able to merge the funds to give housing 
authorities more flexibility in how they use their funds. So 
that is certainly one option there.
    Ms. Velazquez. We hear that the housing authority in 
Chicago, as a result of implementation of Moving to Work, is 
serving a thousand less families through the Section 8 voucher 
program.
    Ms. Crowley. Chicago is the housing advocate's scariest 
nightmare about Moving to Work. They have a huge waiting list 
and they are sitting on millions and millions of dollars of 
reserves without providing assistance to people who need it. 
And it baffles me why HUD doesn't do something about that.
    Ms. Velazquez. Ms. Todman, Section 3 ensures that public 
housing residents benefit from job opportunities created by HUD 
funding. We all know that it hasn't met the full potential of 
the program.
    This obligation will be diminished as public housing units 
are converted under the Rental Assistance Demonstration (RAD). 
In your opinion, how can we preserve job opportunities for 
residents in RAD-converted properties absent full Section 3 
requirements?
    Ms. Todman. Thank you for that question. I am not clear 
that Section 3 would be diminished as properties move over to 
RAD, because the core of Section 3 is that when there is 
Federal funds that are being provided to a contractor or 
vendor, the Section 3 rules follow. And certainly if I am 
operating a site and I am awarded someone a contract, Section 3 
would apply.
    We have a very robust Section 3 program--
    Ms. Velazquez. Isn't it true that Section 3 will no longer 
apply to non-construction jobs at those projects?
    Ms. Todman. I have not heard that is the case, 
Congresswoman. Section 3 is not applicable just to public 
housing work. It is applicable to when a contract has been let, 
and that contract could be let in any housing forum. But I am--
    Ms. Velazquez. But we do know that we are having problems 
in getting public housing development which is getting Federal 
funds to get those contractors to hire residents from within 
public housing developments. So you can imagine the kind of 
oversight that you will have to have in place to make sure that 
this happens once those properties are converted into RAD.
    Ms. Todman. I think that becomes a--how firm the housing 
authority is on these matters. We are very, very fierce with 
our contractors in terms of what we expect the hiring and 
training to be for every level of contract. Not every housing 
authority applies it that way.
    Ms. Velazquez. And do you have a robust Section 3?
    Ms. Todman. We do.
    Chairman Luetkemeyer. Thank you. The gentlelady's time has 
expired.
    With that, we go to the gentleman from Texas, Mr. Williams, 
for 5 minutes.
    Mr. Williams. Thank you, Mr. Chairman.
    And I want to thank all the witnesses today for being here 
and for your testimony.
    Federal funding for HUD and the Section 8 voucher program 
has continued to increase dramatically over the last decade. We 
are hearing that.
    In fact, this year the President again requested an 
increase in funding for HUD to almost $50 billion, or 9 percent 
more than last year's enacted levels, as well as an increase in 
funding for Section 8 programs. As the voucher program 
continues to consume more and more of HUD's overall budget, 
Congress should take an active role in strengthening these 
programs and improve the taxpayers' investment.
    Now, I think most of my colleagues here know that I 
totally--I am a private sector person. I still have jobs. I 
employ people. And I believe totally in the private sector, and 
I am a strong believer that the private sector can always do it 
better.
    So the question of how we make these programs more 
efficient is fairly simple to me: Increase private sector 
participation in capital.
    Let me direct my questions to you, Ms. Crowley. Several 
critics of today's public housing programs often suggest 
appropriating more money. Do you believe that the current 
existing Federal housing programs work really well?
    Ms. Crowley. I think the Federal programs that we have 
provide essential housing services to very poor people, and in 
the absence of those programs there would be a great deal of 
suffering in this country. And so we have to take into 
consideration what it is that they do as we think about ways to 
improve them.
    Can they be improved? Absolutely. Any program can be 
improved. And there are good ideas being generated all the 
time, and I think Congress should help incentivize that and 
motivate people to do that.
    At the same time, the first principle has to be do no 
harm--make sure that the housing of people who rely on it now 
is not destabilized. Over time, we have lost a considerable 
amount of public and assisted housing under current rules, and 
we think that preserving it is of the utmost importance.
    Let me just address the question about the increase in the 
size of the voucher program. That is not because we are putting 
new vouchers out there. It is because we have lost public and 
assisted housing units--hard units. The residents who were in 
those units have received vouchers in order to prevent them 
from being totally displaced. And so, you are just transferring 
the money from one fund to the other.
    The other thing about the voucher program is that it is a 
market-based program. It is based on what rents are, and the 
rents go up every year. Because it is a public-private 
partnership, people use vouchers to rent housing in the private 
market, and the rents have to be based on what the market 
demands. And so even if you serve the same number of 
households, the cost will go up.
    Mr. Williams. Thank you. And the next question would be, do 
you have confidence that HUD or other mechanisms can maximize 
taxpayers' investments in public housing?
    Ms. Crowley. I have confidence that there is a great deal 
of wisdom at HUD and in housing authorities and in the private 
sector of people who know what they are doing and that, given 
the right motivations and the right tools, we can, in fact, do 
this well.
    Mr. Williams. Fresh ideas from the government side?
    Ms. Crowley. I'm sorry?
    Mr. Williams. Fresh ideas from the government side?
    Ms. Crowley. I think that we bring really good people to 
work at HUD, and we have people in this Administration who have 
good experience in the private sector.
    Mr. Williams. My final question is, do you believe it is 
possible to establish new policies to promote public-private 
partnerships to house and provide services for vulnerable 
populations?
    Ms. Crowley. To provide services within housing?
    I think that we have a whole new frontier to discover 
around the intersection between housing and health care, and 
that as we have an aging population, the cost of providing care 
for people in nursing homes is going to be exorbitant and we 
are much better off if we bring health care to people in their 
homes and we figure out ways to pay for that through the health 
care system.
    People are working hard now to come up with innovations as 
to how to do that, and these are partnerships between the 
public and the private sectors.
    Mr. Williams. I appreciate your testimony.
    I yield back.
    Chairman Luetkemeyer. The gentleman yields back.
    Next, is the distinguished gentleman from Massachusetts, 
Mr. Capuano, for 5 minutes.
    Mr. Capuano. Thank you for that distinguishment, Mr. 
Chairman.
    Chairman Luetkemeyer. I recognize talent.
    Mr. Capuano. Mr. Fennell, if there were no government 
programs for affordable housing--no public housing, no tax 
credits, nothing, the government didn't do anything--would 
private money provide affordable housing for people?
    Mr. Fennell. I don't see how it could. Without a return on 
the investment, there would be no sense in making the 
investment.
    Mr. Capuano. Mr. Evans, would you disagree with that? Or 
would you agree?
    Mr. Evans. I agree with Mr. Fennell.
    Mr. Capuano. And I knew you would because I think everybody 
knows it, but I needed you to say it because if I say it it 
sounds like some left-wing conspiracy; if you say it, it is 
business saying it.
    There is no such thing as privately-funded affordable 
housing, period. It is all government-funded, either directly 
through housing authorities, or indirectly through tax policies 
or whatever items in partnership with private companies. So the 
government has to be involved with affordable housing.
    Therefore, the concept of private enterprise always doing 
everything better than government, in this instance, is an 
impossibility. I just wanted to start there.
    Ms. Todman, I know you have only been at the housing 
authority for a while, but you have been doing this for a long 
time. Have you ever been involved with an expiring use?
    Ms. Todman. Involved with what?
    Mr. Capuano. An expiring use.
    Ms. Todman. An expiring use? So are we--if we are talking 
opt-outs, yes, certainly the role that we play is when there is 
a--here in D.C., there are thousands of units that were 
privately-owned that opted out and HUD gave us the vouchers to 
provide to families.
    Mr. Capuano. Have you saved all of the units that were 
expiring--saved them for affordability?
    Ms. Todman. We saved the vouchers. The units themselves 
either flipped over into private rents or--
    Mr. Capuano. The vouchers move on. The vouchers stay, but 
people get displaced, and they get displaced out of their 
neighborhood and out of their lives.
    The reason I ask is because my fear is that depending on 
what we do with private-public partnership--and I saw that you 
have one program there that requires a 40-year agreement, 
another one to buy it back after 15 years, both decent 
programs. When expiring uses were first put together, no one 
ever thought that they would actually ever expire.
    And 40 years from now, I am not sure, but I will take a 
wild guess: There probably will still be poor people in 
Washington and in the rest of America. And so therefore, I 
actually like the idea of public-private relationships, but I 
also am deeply fearful of something that says, ``Let's do it 
today and not worry about tomorrow. Ninety-nine-year leases, 
let's buy it back 15 years from now.''
    Just in the last few years, has your agency seen the 
Federal assistance go down?
    Ms. Todman. In the public housing program?
    Mr. Capuano. In the public housing program for--because I 
remember we cut out all funding for police departments. Do you 
still have a police department in the housing authority?
    Ms. Todman. We do. It is half funded by the City, and the 
rest of the funds come from our Moving to Work--
    Mr. Capuano. You just shifted money from something else.
    Ms. Todman. We shifted it around, that is--
    Mr. Capuano. Everybody did. But you still have housing 
police, as we--as most agencies do.
    So when we cut that money out, the money didn't go to 
capital, it came away from capital. And have we not reduced the 
capital funding for public housing?
    Ms. Todman. The capital funding has gone down.
    Mr. Capuano. That is my problem with all these things is 
that it sounds great today, but there will be a tomorrow and 
there probably will be poor people who need assistance, and I 
just--I am always concerned that somehow the lighting of the 
candles at the private alter doesn't take that into account.
    Now, that doesn't mean the public doesn't have problems. Of 
course, we have problems. I am one of the chief critics of many 
things that HUD does.
    But that is what we do is try to get them to do things 
right and get them to--[Phone rings.] oh, there we go. That is 
appropriate.
    I guess the reason I ask is because I think this is an 
important hearing and I think this is an important subject, but 
I think it is a very delicate subject, as well, including with 
our private partners. Everybody understands private partners' 
need to make a profit. There is nothing wrong with that. It is 
American. It is a good thing to do.
    But there is a tough thing to do when you balance a social 
need to try to house all Americans who deserve housing. I don't 
think anyone would advocate that every American doesn't deserve 
to live in decent, affordable housing. That is the problem I 
have.
    All that being said, I guess I don't really have questions, 
per se, I just want to warn everyone--and I think everybody 
knows it, but I want to put words to it--we need to be a little 
careful when we talk about these public-private relationships 
when it comes to housing because there are social issues here 
that transcend it.
    I am not opposed to private funding at all, but I think 
that when we get into agreements, we need these agreements to 
be clear, unequivocal, and have an exit plan when it comes. 
Because whoever invests in it today, may sell it between now 
and then, and we will be dealing with somebody we have never 
met before.
    Ms. Crowley, I don't want it to look like I am 100 percent 
in favor of all things low-income. There is a proposal from 
your agency to cap the mortgage deduction at $500,000.
    Ms. Crowley. Yes, sir.
    Mr. Capuano. I don't know, but I guess I need to ask, you 
do realize that housing costs are different across the country, 
and that a $500,000 home in Omaha, Nebraska, is a castle, 
whereas a $500,000 home in my district is a very moderate home. 
I know you know that, but I hope you take that into 
consideration in your policy.
    Ms. Crowley. Can I reply?
    Chairman Luetkemeyer. Very quickly.
    Ms. Crowley. We actually can tell you the number of 
mortgages over $500,000 in every single county between 2011 and 
2013, and I can get you the numbers for your district.
    I have the numbers from Missouri, and in those 3 years, 1.1 
percent of the mortgages made in Missouri were for over 
$500,000. There are hotspots in the New York Metropolitan Area, 
the Washington Metropolitan Area, and the San Francisco Bay 
Area, Boston and Los Angeles secondarily, but in the rest of 
the country it is a non-issue.
    Chairman Luetkemeyer. Very good.
    I thank the gentleman. His time has expired.
    Now we go to the gentleman from Kentucky, Mr. Barr.
    Mr. Barr. Thank you, Mr. Chairman.
    And thank you, to the witnesses, for your testimony.
    Mr. Fennell, I am interested in your testimony, 
particularly your testimony about how the policy focus needs to 
be on uplifting the poor by integrating them into more income-
diverse and stable communities. Can you expand on that a little 
bit and how you would propose that Congress make some reforms 
to encourage more income-diverse communities?
    I know one of your suggestions in the written testimony is 
to make some changes to the Low Income Tax Credit, and I am 
very interested in that program and I do think that we can 
improve that program to incent private capital into the 
affordable housing space. So if you could just amplify--
    Mr. Fennell. Sure. As a practitioner, I can tell you that 
the Low Income Housing Tax Credit program has been very 
important to the stable of properties that we have been 
developing for the last 15 years, and I think that perhaps we 
take a more conscientious development approach overall, but the 
idea of trying to create policies that give flexibility down to 
the public housing authorities and to the local jurisdiction I 
think is the answer towards trying to solve community problems, 
and uplifting the poor really is a burden that falls on all of 
us to figure out how we can responsibly engage in community 
development and to look for opportunities that include all 
members of that community into the neighborhood.
    So whether it is creating healthier apartments, or whether 
it is locating a doctor's office on the ground floor of a 
building and trying to bring better health care facilities to a 
neighborhood, or whether it is trying to make sure that there 
are jobs and opportunities for work through either the 
construction process or even post-construction during the 
operation of the building, those are all ways in which we have 
tried to try to uplift the communities we work in.
    Mr. Barr. I think you also suggested raising the cap of the 
AMI?
    Mr. Fennell. Yes. So--
    Mr. Barr. And I also wanted you to address the floating tax 
credit rate and--
    Mr. Fennell. Sure. Ms. Todman talked a little bit about the 
different neighborhoods that we have been moving into 
throughout the City, in terms of introducing residents into 
higher rent.
    East of the river in Washington, D.C., you have a dynamic 
where we are trying to bring higher incomes into a neighborhood 
because there is such a concentration of poverty. So by 
allowing a little bit of flexibility going from a 60 to an 80 
percent cap, but keeping the 60 percent blended average for a 
project as a whole, you are enabling more income diversity and 
not turning people away.
    In terms of the floating rate, whether it is 9 percent or 4 
percent, the 9 percent did get fixed for a while, and we saw 
that was tremendously advantageous towards attracting more 
private capital. The issue is is that if you rely on a floating 
rate, you are never quite sure how much equity is going to be 
coming into your property, and so you are always balancing that 
pro forma to the very end, which creates risks and uncertainty.
    So by fixing the credit rate amount you can drive more 
capital and have more predictability and more certainty as you 
are working on pre-development and getting financing approved.
    Mr. Barr. Mr. Evans, could you speak a little bit about the 
Moving to Work demonstration program and what lessons have we 
learned from that?
    And if you could, for anyone, since our time is limited, 
when we talk about Moving to Work, could you talk a little bit 
about the possibility of reforms to Section 8 that would 
incentivize as a condition of receiving Section 8 assistance 
some encouragement for able-bodied people to actually work or 
demonstrate an effort to receive job training?
    Mr. Evans. I can speak specifically to a project that I 
have managed for the last 10 years, and it builds a little bit 
on what Mr. Fennell was just saying.
    We managed a program that required in order for a person to 
receive that voucher they had to go through a fairly robust 
pre-counseling training program, where they were provided 
information about jobs, credit, the things that are important 
to landlords, how to be a good neighbor, and just some really 
basic skills. We partnered with banks and other community 
organizations to bring in outside support so that people could 
open bank accounts and learn more about the schools and public 
education and how to educate your children. So those are things 
that were able to be done under an MTW-type program.
    Mr. Barr. Thank you.
    I yield back.
    Chairman Luetkemeyer. The gentleman yields back.
    With that, we go to the distinguished gentlelady from 
California, Ms. Waters, the ranking member of the full 
Financial Services Committee.
    Ms. Waters. Thank you very much, Mr. Chairman, for this 
hearing.
    And to our witnesses here today, thank you for being here.
    I am focused basically on how we can create more affordable 
housing for the many citizens of this country who cannot find 
places to rent. I am focused on homelessness not being dealt 
with in ways that would reduce it, but it is exploding in 
downtown Los Angeles and other places.
    And I am listening to the discussion about the private 
sector getting involved with low-income housing development 
opportunities.
    And before I came, Ms. Crowley, someone said that you had 
talked a little bit about the fact that the opportunities are 
there now. The need is great all over this country, and if the 
private sector wanted to be involved they certainly have a lot 
of opportunities to do so because we have people who work every 
day who cannot afford rentals.
    So I am not so sure what we are talking about when we talk 
about encouraging or doing something to eliminate public 
support and somehow it is going to be taken over--could be 
taken over by the private sector. I would encourage them to do 
that now.
    And on public housing, the RAD program, I am very, very 
suspicious that this is an effort to privatize public housing. 
I know that we have those who manage public housing who would 
say, ``We don't have money to renovate. We don't have money to 
provide the repairs and the renovations that are needed,'' et 
cetera, et cetera.
    But I think we need to rethink all of this. One of the 
reasons we have to protect public housing is because this is 
housing for the most vulnerable. This is housing for people who 
cannot access housing through our rental markets, et cetera, et 
cetera.
    And I am looking at CDBGs, for example, and I am looking at 
the ways that CDBG is spent in the cities--a little bit here, a 
little bit here, so politicians can make people believe they 
are doing something for them. We ought to consolidate that HOME 
money, that CDBG money, and put it all into housing and all 
into low-income housing. I think that would make a lot more 
sense than what is being done with a lot of that CDBG money 
now.
    So, I am paying a lot of attention to RAD. I am paying a 
lot of attention to what could happen with RAD.
    Of course, if we get the banks and funders involved, what 
are we going to do? We are going to forfeit. We are going to 
end up with debt.
    And then they can--they will end up taking it over and 
somehow we will walk away saying, ``Well, our hands are clean. 
We only tried to do the best for public housing. We just 
couldn't keep up the payments on the money that we borrowed,'' 
et cetera, et cetera. And I just really don't intend for that 
to happen on my watch, and I think we have to pay a lot of 
attention to that.
    Ms. Crowley, I know that you know, but you may not have 
thought about this--do you think that my idea of consolidating 
the resources that are supposedly dedicated to helping low-
income CDBG and HOME and others that is being spent oftentimes 
to help local communities get a new fireplug or something--I 
don't know what they do with the money--but what do you think 
about consolidation of those resources?
    Ms. Crowley. Ms. Waters, you won't get any argument from 
me, Sheila Crowley, about that. I think that would be grand. I 
think that the more money we dedicate toward solving the 
housing problems of the very poor, the better off we will be.
    I am not going to tell you that is the official position of 
the National Low Income Housing Coalition. I suspect that your 
committee ranking member, a former mayor, would not be happy 
about giving up his CDBG resources.
    But I think that the more targeted, the more focused, the 
more specific we are about housing for this population with the 
resources that we have, the more likely we are to begin to turn 
the corner on it.
    Is CDBG going to be enough? No. But it is more than we have 
now.
    The problem with HOME--which is a great program--is that it 
is not deeply targeted. The tax credit is not deeply targeted. 
CDBG is hardly targeted at all. If you are going to do that, 
you have to figure out how to make the housing affordable to 
extremely low-income folks.
    Chairman Luetkemeyer. Thank you.
    The gentlelady's time has expired.
    With that, we go to the gentleman from New Mexico, Mr. 
Pearce, for 5 minutes.
    Mr. Pearce. Thank you, Mr. Chairman.
    And I thank each one of you. Sorry I missed your 
statements, and so my questions might be a little bit random.
    If they don't apply to you just--we will scoot it to the 
next one on the panel. How is that?
    Mr. Fennell, we are going to start with you, and this is a 
follow-up to Mr. Capuano. I really appreciate his viewpoint on 
life. We really began about the same, both from very blue class 
families, scraping just to make ends meet. He ended up a 
liberal Democrat, and I ended up a conservative Republican, to 
show you how unfair life is and random life is.
    But that statement that he left--I want to question that no 
privately-funded affordable housing exists without the 
government. So my question is, the first house my family had 
was $800 and it was about 800 square feet, so a dollar a square 
foot. That was back in the 1950s so it was a different time 
then, but still, that is pretty cheap housing.
    And we paid for that. Mom said they were paying like $19 a 
month to the bank.
    And then, our next house was $1,500. We doubled our 
propensity for wealth.
    Would those be examples of affordable housing funded by 
private sources, in your opinion, yes or no?
    Mr. Fennell. I'm sorry, I--
    Mr. Pearce. Would that $800 house or that $1,500 house--
that is not affordable housing?
    Mr. Fennell. That is affordable, but it doesn't exist--
    Mr. Pearce. That is affordable housing, so--and it was 
privately funded.
    So let the record reflect, Mr. Chairman, that there is at 
least one example in American history--I suspect it is a little 
bit broader, but I suspect we have a few people out there who 
are making their way along life's dreary pathway without 
government funding. That is not really--I just was going throw 
that in.
    My real question is, how much of the population stays long-
term in public housing, just roughly? We are not trying to 
prosecute anything here. Twenty percent? Fifteen percent? Ms. 
Crowley?
    Ms. Crowley. Over half of the population are elderly and 
disabled folks, so public housing is their home.
    Mr. Pearce. No, no. My question is how long--how many stay 
long-term? We had a little briefing earlier this morning where 
it said the average is 6 years, but how many stay--
    Ms. Crowley. If you look at the elderly and disabled folks, 
they are going to be there much longer because there is no 
place else for them to go.
    Mr. Pearce. So 20 years, 30 years--
    Ms. Crowley. But if you look at the non-elderly and non-
disabled folks they stay--the average, I think, is about 2 
years. I would have to look at the latest data, but it is 
certainly under 5 years for the non-elderly, non-disabled 
people.
    Mr. Pearce. That is getting way more complex than what I 
was looking for. I was just trying to get a rough feel.
    Mr. Evans, do you have any ideas about what percent of the 
people in public housing stay there for a very long time--20 
years, 30 years?
    Mr. Evans. I don't know.
    Mr. Pearce. Does anybody on the panel know that?
    Nobody?
    Ms. Todman. Yes. Our average tenant at the housing 
authority is about 10 to 12 years.
    Mr. Pearce. Okay.
    Ms. Todman. The ones who are on the higher end are the 
families Ms. Crowley spoke of, are seniors and disabled.
    Mr. Pearce. So would you have 10 percent maybe who are 
there long term? Because my question is why don't we, instead 
of paying rent for 45 years or 50 years or however long they 
are going to be there, why don't we take that segment of the 
population and simply let that stream of payments pay off the 
facility? It is going to be theirs. Let them own it.
    So what would be the shortcoming to that? You appear to 
be--
    Ms. Todman. Yes. The challenge that we would have in D.C. 
is the homeowner's ability to sustain the operation of it, 
because we are dealing with clients who make about $12,000 a 
year, on average, and that is--
    Mr. Pearce. But you are paying everything for them right 
now, so what is the difference if they own it and maybe we just 
don't have interest payments or whatever payments--
    Ms. Todman. But yes, the slight difference is that they pay 
30 percent of their income toward rent, and as a landlord we 
are responsible for the operating costs. And if you are a 
homeowner you are responsible for all of the operating costs no 
matter your income.
    So we certainly have homeowners who are low income who have 
achieved homeownership. But as a rule, I don't suspect most of 
our clients could sustain the operating costs of a house that 
they own. We hope that they achieve that, but as it is right 
now I don't think they could.
    Mr. Pearce. You don't think that if they owned the house 
that the operating costs would be less than paying the rent 
year after year after year--
    Ms. Todman. No. Because they still have utility bills, 
toilets still break, they still need--
    Mr. Pearce. They still have that, even in the rent. I am 
not trying to argue with you; I am just trying to find a way 
forward, whether we can make the dollars go further, because it 
appears like the system is just regenerating itself decade 
after decade, and it is time for us to redesign the whole 
system, in my opinion.
    Ms. Todman. I think there is a way for us to move forward, 
and I think it is moving those families into an income bracket 
that allows them to be self-sustaining. And that is hard work, 
but it is not impossible.
    Mr. Pearce. Yes, but that is going to occur somewhere after 
them owning their own home, moving people up the income stream. 
And that is one of--I see my time has expired--we will talk 
another time about this.
    Thank you, Mr. Chairman. I will yield back.
    Chairman Luetkemeyer. Thank you.
    The gentleman's time has expired.
    With that, we go to the distinguished gentleman from Texas, 
Mr. Green, for 5 minutes.
    Mr. Green. Thank you very much, Mr. Chairman.
    I thank the ranking member, as well.
    And I especially thank the witnesses for appearing today. 
Your testimony has been most informative. Thank you very much.
    If I may, I would like to talk about the HUD Jobs Plus 
pilot program. My trust is that someone will be familiar with 
it to some extent.
    But it is a program that has about $24 million in it over 
the next 4 years. It is to be tested in nine public housing 
authorities.
    And the centerpiece of the program, from my perch, is that 
it freezes rent. It freezes rent such that if you have a job 
that pays more, if you get a better job, your rent is frozen, 
which means you are now in a position to take that additional 
money and do other things to improve your life. In a sense, it 
provides an increase in salary.
    It takes what I perceive to be a holistic or nearly 
holistic approach. It provides job training; it provides 
counseling; assistance with acquiring additional education, a 
GED perhaps; and other aspects of it that will help the person 
do more than look for a job.
    Ms. Todman, are you familiar with the program?
    Ms. Todman. I am familiar, but we are not a Jobs Plus 
recipient.
    Mr. Green. But tell me about the concept--the concept of 
freezing rent, taking what I perceive to be a nearly holistic 
approach. Does that concept seem to benefit the person in the 
public housing authority?
    Ms. Todman. One of the things that we see, and some of my 
colleagues see, is a barrier to--
    Mr. Green. May I just ask one small question of you, 
kindly? If you could start with yes or no, it would be helpful, 
because sometimes when people finish I don't know whether they 
said yes or no. So does it appear to you that this will help 
people who are in public housing?
    Ms. Todman. Yes.
    Mr. Green. Okay. Thank you. Now, if you would continue?
    Ms. Todman. Oh, should I go--okay.
    Mr. Green. Yes, ma'am.
    Ms. Todman. In short, then, it would just--if someone's 
rent is frozen and they are able to earn more income and keep 
that income, it might actually be an incentive to some of our 
clients finding a better job, keeping a job. And so I think 
that it would work well. I think in the areas that have it it 
has worked well. And it would be an incentive in many ways.
    Mr. Green. Thank you very much.
    Ms. Crowley, would you kindly give your response to my 
question: Does it appear to be something that will be 
beneficial to the recipients?
    Ms. Crowley. Yes.
    Mr. Green. And then elaborate to the extent that you would 
like.
    Ms. Crowley. Yes. The concept of the earned income 
disregard is if you are participating in a certain program then 
the increase in rent that comes from increase in income doesn't 
occur, and so you are motivated to continue to earn more money. 
That is one of the features of the current system.
    The flip side of that, of course, is that if you lose your 
job then your rent can go down, and so you are not in danger of 
losing your home.
    I think all those programs make a lot of sense. I don't 
know how you take them to scale without additional resources.
    Mr. Green. That is an excellent point, if I may say so--
additional resources--and I plan to address that. But continue, 
please.
    Ms. Crowley. I just heard that the Houston Housing 
Authority is partnering with Home Builders Institute, which I 
think very highly of, for their Jobs Plus program. It is an 
organization that trains people for construction jobs, and so I 
think that will be a very promising program.
    Mr. Green. Mr. Evans, would you just kindly--because time 
is of the essence--do you think this benefits--as a matter of 
fact, just let me have you raise your hands, the two remaining 
witnesses. Do you think that this will benefit the recipients--
this type of program?
    Mr. Evans. Yes.
    Mr. Fennell. Yes.
    Mr. Green. All right. Now, let me go to, with my time that 
is remaining, what the President has requested.
    In his Fiscal Year 2016 budget he has requested $100 
million for this program: $100 million. That seems like a lot 
of money, except that on this committee we deal in billions.
    And I know that every penny counts. I want to make sure 
taxpayers get their money's worth for whatever we do.
    But the President is requesting $100 million for this 
program, which is an $85 million increase over Fiscal Year 
2015. Understandable.
    But this is the kind of program, it seems to me, that would 
receive some sort of bipartisan support because it allows the 
person to pull himself up by his bootstraps--we talk a lot 
about bootstraps. It allows the person to go from welfare to 
self-care. It allows the person to have some degree of control 
and autonomy that ordinarily does not exist because you are 
locked into a job, you are not incentivized to get another.
    I thank you for allowing me to go over, Mr. Chairman, and I 
yield back the balance of my time praying that the President's 
program will get the $100 million he has requested.
    Chairman Luetkemeyer. The gentleman's time has expired.
    With that, we go to the gentleman from Michigan, Mr. 
Kildee, for 5 minutes.
    Mr. Kildee. Thank you, Mr. Chairman.
    And I thank the witnesses for their presence and testimony.
    I arrived at the hearing a little bit late, so if some of 
this is redundant, I apologize for that. But I would like to 
follow up a bit on what the ranking member was referring to.
    I come from Flint, Michigan, and I represent Flint and 
Saginaw, Michigan, and some of you might be familiar with the 
story of those communities. It is not dissimilar from the story 
of a lot of older industrial communities that have had 
substantial population loss. So one of the things I would like 
to get some reaction to is the unique challenges that these 
places face in this regard.
    While we have growing income inequality in this country, 
people who work hard every day just have a hard time making 
ends meet and their wages just don't keep up with the cost of 
raising a family in this country, every panelist--at least most 
who responded--acknowledged that the private sector on its own 
would either not do it or would have a very difficult time 
providing quality affordable housing without some form of 
assistance from some form of subsidy. The metrics, the money 
just doesn't work.
    In the places that have had significant population loss, 
there is this additional hurdle. First of all, the programs 
like CDBG and HOME, as the ranking member mentioned, are not 
targeted to maximize their impact on markets, and the Federal 
Government continues to reduce its commitment in that space. 
And I wish the President had asked for significantly more money 
in his budget for CDBG and HOME.
    But at the time when we have growing income inequality, 
there clearly is no way for the private sector to fill the void 
to provide the kind of housing that every American deserves, 
and the Federal Government continues to reduce its support, at 
least in that space, these communities that have had population 
loss, they have this one really big hurdle to overcome that 
goes beyond that, and that is the presence of surplus, vacant, 
abandoned housing that not only reduces the quality of life in 
the communities that we are talking to, but it reduces overall 
tax revenues in those communities because it depresses property 
values. The single greatest source of revenue for most cities 
is based upon property values.
    And vacant, abandoned properties have a higher cost to 
communities than occupied housing. It costs more in local tax 
dollars to deal with an empty house than it does to deal with 
an occupied one. They are more likely to burn; they are more 
likely to be a source of crime; and they depress the value of 
everything around them.
    So here is the question: Confirm for me my conclusion that 
there is no market basis for private capital to come into a 
community and deal with the overhang of vacant and abandoned 
housing because there is no way to internalize the positive 
externalities of that kind of investment unless the community 
figures out how to deal with its entire inventory of housing 
and come up with a more homogenized economic model so that the 
value of housing that is supported by reducing the oversupply 
of vacant properties can somehow be internalized into that 
economic model.
    Does that make sense? Do you understand the point that I am 
trying to make? It is really an important one, and it is one 
that often is missed.
    Let me make it more clear: If we don't figure out a way to 
clear away the remnants of the past in these older communities, 
we can talk about all the subsidies we want to talk about, but 
we are not going to be able to get housing values to a place 
where the market is going to be attracted to come into 
communities and make private investment without the kind of 
subsidy that we can't even imagine putting together, even at 
the Federal level.
    Ms. Crowley, I wonder if you might comment?
    Ms. Crowley. So the question is, what do we do about vacant 
and abandoned properties? Is that the question?
    Mr. Kildee. That is the question, but the question assumes, 
though, as some have assumed, that somehow there is some 
private incentive to deal with that, and I just don't see it.
    So that leaves the Federal--State or Federal Government, 
because local governments can't do it. They are already 
stressed as a result of all the vacant property in their 
communities in the first place.
    Ms. Crowley. Right. What you do about ownership of those 
properties and those kinds of things, those are all local and 
State decisions. There is not much of a Federal role in solving 
that piece of it.
    But obviously, we invested during the foreclosure crisis in 
the Neighborhood Stabilization Program and other things that 
would put resources at the local level to try to prevent 
complete decimation of neighborhoods and dealing with blight 
that happened as a result of that.
    This program had mixed success because it was put together 
fairly quickly in the middle of the crisis, but that is the 
kind of program that I think it would take to do that.
    The notion that there is going to be a private investor who 
is going to drive into Flint and say, ``Oh, look at all this 
opportunity,'' seems a little far-fetched to me.
    Mr. Kildee. Yes. It is not going to happen. I agree with 
you.
    Thank you.
    Chairman Luetkemeyer. Thank you, gentleman from Michigan.
    Next up is the gentlelady from Ohio, Mrs. Beatty, for 5 
minutes.
    Mrs. Beatty. Thank you, Mr. Chairman.
    And thank you, Ranking Member Cleaver.
    And thank you to all our witnesses today, especially to 
someone who gets her hands dirty every day in doing the work in 
public housing.
    Thank you for being here, and thank you for what you do, 
and for also representing those who are the poorest amongst us.
    I have had a long history of some 25 years working with HUD 
and public housing as a consultant doing relocation work, so we 
have heard a lot today across the gamut.
    I found it very interesting that one of my colleagues this 
morning talked about being ``100 percent private'' and that he 
was private and doing it privately was the best way to do it. I 
come from the private sector and owning a business and working 
with public housing, but I also spent a lot of time, like my 
colleague, and I am sorry he is not here this morning, who is 
in government, whether he knows it or not, now.
    So I tend to think that we need to be creative with our 
public and private partnerships when we can.
    Mr. Kildee talked a lot about the President and the dollars 
that he has put into public housing and I certainly agree with 
him that I wish the President would have put even more money 
into it.
    Just this week, I had someone from Homeport in my district 
in Columbus, Ohio, to come in and talk about much of the data, 
so I won't repeat it, what you have all talked about--the 
number of--how we are increasing with those who are renting, 
how I know my colleagues on both sides of the aisle want people 
to be self-sufficient. But as I was having a dialogue with my 
ranking member, Congresswoman Waters, if you are disabled and 
you are a senior, to ask if they are going to be there 4 or 5 
years--if I am 70 years old and I am disabled or I am a senior, 
I might have to be there for 12 or 15 years.
    But I also want to take away the myth that those who are 
working towards self-sufficiency and self-reliance don't stay 
for 12 and 20 years on the norm. It is more like a 2- to 3- and 
not longer than a 5-year period.
    With all this said, I guess I would ask all of you to be 
creative--maybe you won't be quite as creative as Congresswoman 
Waters this morning, who is going with comingling everything 
for housing, but think about in many of our communities when we 
run out of money, and that is the common theme we have been 
hearing.
    So where private and nonprofits have used up all their 
Federal funding while attempting to revitalize and restore the 
neighborhoods and the communities, are there--what is our hope? 
What is it, as experts on either side, do you think we could 
do? And also, in that question, you can think about the 
project-based vouchers, because we are hearing the same thing, 
that we are running out of money. So on those, if we increase 
the cap would that be helpful?
    Ms. Todman. I am happy to start.
    Certainly on the project-based voucher side, we have been 
able to go into a lot of neighborhoods where we don't have any 
property and provide subsidy to units so that low-income 
families can live there, and we are all throughout the City, 
including some very high-rent areas.
    I would say in terms of how do we revitalize certain 
communities, there is a tool that we use called new market tax 
credits that is a powerful tool--very powerful. We were very 
fortunate to have a $50 million allocation recently, and we 
have been able to become community developers with our private 
sector partners and guaranteed jobs for some of my residents 
because of our investment in that community development 
project.
    So there are lots of different tools that may not sit in 
the housing basket.
    Mr. Evans. Yes. You asked specifically about raising the 
caps on project-based vouchers, and in my written testimony 
there is a recommendation there that that cap be evaluated and 
maybe raised to 35 or 40 percent of the total for project-based 
vouchers.
    But also, rather than looking at project-based vouchers 
based on the budget authority, look at those based upon the 
unit allocation, and there will be probably a slightly higher 
number of vouchers that could be made available for project 
basing.
    I also think that it is really important to remember that 
all of these matters of real estate are local issues, and there 
aren't one-size-fits-all solutions to national problems. As we 
heard from each of the different districts, there are different 
challenges, there are different things that face each 
community.
    And the programs that get retooled or that get reevaluated 
or created need to really focus on how to use the public 
investment to leverage private capital and private involvement.
    Chairman Luetkemeyer. Thank you. The gentlelady's time has 
expired.
    We will go to the gentleman from Ohio, Mr. Stivers, for 5 
minutes.
    Mr. Stivers. Thank you, Mr. Chairman, for holding this 
hearing.
    I would like to thank the witnesses for being here. And I 
am going to begin with some of the questions that the 
gentlelady from Ohio asked, as well, because she and I are 
working on some stuff that I think can help a lot of folks.
    But before I do that, I wanted to ask Ms. Crowley, in your 
testimony on page 3, you say there are 25,000 homeless children 
in New York City alone. Are you aware that the definition of 
homelessness under Housing and Urban Development leaves 
children out?
    Ms. Crowley. No, I wasn't. I think that it covers children 
who live in families, so it covers families. And the number of 
households in New York who are homeless is, I think, 60,000, 
and so 25 percent: the number of people is 60,000, and the 
number of those who are children is 25,000.
    Mr. Stivers. So the definition does exempt out anybody 
under 18, so if you are under 18 you are just not counted. It 
is--
    Ms. Crowley. They are counted. That is the official count, 
so they are counted.
    Mr. Stivers. Sorry, ma'am. We need to amend the definition. 
There is a bill out there. It is a bipartisan bill that I am 
the sponsor of, along with Mr. Loebsack of Iowa, to fix that.
    We have to fix that. If we are going to serve homeless 
children, we have to define the problem first.
    So I would ask you to take a look at that bill and we would 
appreciate your assistance in advocating for that bill because 
it is really important. Unless you can define the problem, you 
are never going to serve the population.
    My next question is for Ms. Todman.
    You note in your testimony that the D.C. Housing Authority 
works very closely with a lot of private and nonprofit 
developers to create affordable units for low-income families 
and development projects where, but for your public-private 
partnerships, these families couldn't even afford to live in 
the district. Do you think you would have been able to 
facilitate these public-private partnerships if you were not a 
Moving to Work agency?
    Ms. Todman. There are some deals that do not require our 
Moving to Work flexibility, but there are some deals where the 
rents are very high and our public housing subsidy is not able 
to meet the needs of the structure, and we have used our Moving 
to Work fungibility to make those deals work.
    Mr. Stivers. So for the majority of the housing finance 
agencies that are not Moving to Work, how can they achieve the 
same level of public-private partnerships, and is that another 
reason why we should expand the Moving to Work program?
    Ms. Todman. Certainly for those housing authorities in 
high-rent areas, I think an expansion is a very good thing to 
do. For those housing authorities in lower-income brackets, 
Moving to Work still works because it allows them to even 
sometimes make the deals work when we are working in the 
voucher program.
    Mr. Stivers. This is a general question for the entire 
witness panel: Does anybody on the panel believe that 
opportunities for vertical mobility are more readily available 
at Moving to Work public housing agencies than other housing 
authorities?
    Anybody want to take that?
    Ms. Todman. I will just say that at my housing authority, 
because we are not funded for--to help folks increase their 
incomes, we have used our block grant to work with service 
providers to provide that ability.
    Mr. Stivers. Yes. And in the 112th Congress, this 
subcommittee held a hearing, and one of the witnesses from the 
Chicago Metropolitan Housing Authority said the landscape of 
Chicago and the life trajectory of thousands of low-income 
families would not be the same without the flexibility that the 
Moving to Work program gave us.
    And I think that is the case regardless of what type of 
community you live in, and the Moving to Work program is, 
unfortunately, limited to just a few places, and I think it is 
really important that we provide that same flexibility to allow 
these families to be lifted out of poverty.
    The goal that all of us have is not that we give more 
housing assistance; it is that we ultimately lift people out of 
poverty. And that is the mission with which you all are 
charged.
    But Moving to Work helps these people get out of poverty 
because it serves the whole person. So Mrs. Beatty and I have a 
bill that would expand the Moving to Work program, and it is 
really important to help thousands of people around our country 
lift their lives out of poverty, and live the American dream.
    I appreciate everything you are all doing, and we are 
working to try to get you the resources and flexibility across 
the country that we need to actually lift these people out of 
poverty.
    Thank you, Mr. Chairman.
    Chairman Luetkemeyer. The gentleman's time has expired.
    With that, we go to the gentleman from Missouri, Mr. Clay, 
for 5 minutes.
    Mr. Clay. Thank you, Mr. Chairman.
    Let me thank the ranking member too, Mr. Cleaver, for both 
of you all conducting this hearing.
    And I thank the witnesses for being here.
    Let me ask Ms. Todman, to what extent have problems with 
private capital affected your ability to complete your 
redevelopment? It is my understanding that only about half of 
the Capper/Carrollsburg public housing units that were 
demolished during that award-winning redevelopment have been 
replaced, and many residents are still displaced. That HOPE VI 
grant was made in 2001 and the residents have been displaced 
for more than a decade now, since 2005.
    How much of that delay is due to problems with accessing 
private financing?
    Ms. Todman. Right. The time delay in Capper/Carrollsburg, 
some of it is because of what happened in 2008, when the market 
kind of tanked. It didn't tank as much here in D.C., but it 
certainly did.
    I will say that we have built more than half of the public 
housing units that were promised on that site, and the housing 
authority made that one-for-one commitment in 2001 before it 
was vogue. So we are now relying on the value of the land to 
bring back those public housing units.
    And for the residents who do not live there anymore, they 
are still afforded affordable housing through our existing 
public housing units or through the voucher program. So, they 
are housed.
    Mr. Clay. So even though D.C. didn't have as much of a 
negative impact during the recession economically, you also 
lost investors?
    Ms. Todman. Economically, it was harder for our development 
partners to make deals work, particularly given the level of 
subsidy that we were bringing to the table, because the HOPE VI 
grant had not expired, but the funds were gone and the public 
housing subsidy was so low.
    Mr. Clay. What lessons have you learned so that you don't 
have that same problem with Barry Farm?
    Ms. Todman. Yes. So Barry Farm is a different animal. One, 
the economic market in D.C. is much different than it was 10 
years ago, so we are relying on that.
    Also, there are certain protections that we are wrapping 
around our families in terms of their ability to return. But 
let me just say that when we are relocating our clients, our 
goal is to provide them affordable housing so even during that 
relocation they are properly housed.
    But we certainly are looking at the lessons learned in 
Capper/Carrollsburg in terms of speed, and just hope we don't 
hit another recession.
    Mr. Clay. Will Barry Farm be a mixed-income development?
    Ms. Todman. No. Barry Farm is currently a 100 percent 
public housing site of about 440 units.
    Mr. Clay. I am very familiar with it, but in the--
    Ms. Todman. Yes, the goal--the ultimate goal is to make it 
mixed income to the tune of 1,400 units, and we would have 
units there that are affordable to teachers, firemen, and other 
moderate-income families.
    Mr. Clay. Okay. Although D.C. struggled in the housing 
crisis, impacting the DCHA's ability to rely on private 
capital, the D.C. market is still far stronger than much of the 
country. Do you believe that it is possible to replicate the 
work you are doing here in other parts of the country?
    Ms. Todman. Yes. I think we are able to do a lot of our 
work because of the value of our land, and if that value 
doesn't exist in other lower rental markets, it is probably 
more difficult for housing authorities to achieve that--more 
complex, more difficult, longer than we would have. So the 
strength of our market helps us a great deal in creating 
affordable housing.
    Mr. Clay. Okay. Then I think we need to export that lesson 
to St. Louis, because we have about 14,000 vacant lots owned by 
the City of St. Louis.
    Ms. Todman. Right. We are happy to help.
    Mr. Clay. Thank you so much.
    Ms. Crowley, most affordable housing projects in the 
current environment are not developed in isolation. They are 
usually part of broader initiatives to revitalize 
neighborhoods, which may include a need to integrate several 
layers of funding sources.
    Can you talk about some of the ways we can work to continue 
to harmonize the programs so that they, to the maximum extent 
possible, deliver the best affordable housing possible while 
also eliminating the difficulties that can sometimes arise in 
the process of layering different funding sources?
    Ms. Crowley. Sure. You are absolutely correct that the 
layering that happens in the development of these projects is 
extraordinary.
    On the one hand, we call it leveraging and we say it is a 
good thing. On the other hand, it creates extremely complex 
deals that require lots of expertise to put them together and 
to figure out how to blend funds that have different reporting 
requirements, different terms of affordability, all of those 
kinds of things.
    And it should be noted that having all of those things 
increased the cost of the projects, and so the more layers you 
have, the more costly the project is going to be.
    So certainly there is room to figure out how to make the 
rules more harmonized. I think in the tax credit program there 
has been an effort--I'm sorry.
    Mr. Clay. My time is up.
    Ms. Crowley. Okay. I'm sorry.
    Mr. Clay. Mr. Chairman, I yield back.
    Chairman Luetkemeyer. The gentleman's time has expired. I 
now recognize the gentleman from Minnesota, Mr. Ellison, for 5 
minutes.
    Mr. Ellison. I thank the chairman and the ranking member.
    Ms. Crowley, what is it that you were trying to say?
    Ms. Crowley. Recognizing that problem is one that the White 
House and HUD started to work on very early on in the Obama 
Administration and they have a working group between Treasury 
and HUD to try to solve some of those problems.
    Mr. Ellison. Ms. Crowley, what is the Common Sense Housing 
Investment Act, and do you support it? And if so, why?
    Ms. Crowley. The Common Sense Housing Investment Act is 
your bill that would make modest changes to the mortgage 
interest deductions and modernize it to bring it into the 21st 
Century, and in the process of doing so, would help a much 
greater number of low- and moderate-income homeowners who don't 
benefit from the mortgage interest deduction now and would also 
free up billions of dollars in revenue that could be devoted to 
solving the housing problems of the very poor.
    It is a brilliant bill, and we support it. And not only 
that, we organized organizations and State and local elected 
officials across the country in a campaign to support the bill. 
There are more than 2,000 now, and they are found in every 
single congressional district. So we have support for the bill 
from every district.
    Mr. Ellison. Do you think it has the potential to help 
people who are very low-income? The fact is that there are 
programs that help people who are working poor, but what are 
the problems and challenges of housing for people who are at 
the very low level of the income scale?
    Ms. Crowley. Do you mean extremely low-income?
    Mr. Ellison. Yes.
    Ms. Crowley. Okay. So that is the population for whom there 
is the greatest shortage, and that is the population to whom 
most of the funds in your bill would be directed towards trying 
to solve their housing problems and filling the void that 
exists now in the rental housing stock.
    The beauty of it is that not only would the bill create 
more money to be able to do housing that is affordable to the 
lowest-income people, you also make the tax code more fair and 
simpler, and provide tax benefits to low- and moderate-income 
homeowners who don't get a tax benefit now because their 
incomes are not high enough, or their mortgages are not high 
enough, or both, to benefit from the mortgage interest 
deduction.
    And so we would expand the number of homeowners who get a 
tax break for having a mortgage by 16 million under your 
proposal, and 100 percent of those are people with incomes 
under $100,000 a year who don't benefit from it now.
    Mr. Capuano has left, but he posed a question to me about 
it, to which I now have the answer. One of the things in your 
bill is that we would cap the size of the mortgage for which 
you could claim the deduction at $500,000. You can borrow more 
than that; you just don't get a subsidy above $500,000.
    In his district, 9.2 percent of the mortgages between 2011 
and 2013 were for over $500,000--less than 10 percent. Most 
people don't borrow that much money.
    Mr. Ellison. Yes. So there is this little school in my 
district called Jefferson Elementary. It is a wonderful school. 
The problem is that 40 percent of the kids who go there leave a 
shelter to go to school every day.
    That is not the only school like that. I bet you Ms. Todman 
has schools like that here in D.C., and they are all over the 
United States.
    What does it mean for a kid who is leaving a shelter to go 
to school to be able to get into some stable housing that might 
be provided for by investments in extremely low-income 
families?
    Ms. Crowley. I think it makes the difference between 
success and failure in a child's life. You only have to imagine 
what it would be like for you or for your children if you 
didn't have a stable home to go to every night and to be moving 
from place to place, living with uncertainty, never having a 
sense of anything that is your own. Even the best of shelters 
are not great places. I ran shelters. They are not good places 
for people to live.
    Mr. Ellison. Do the kids feel the stress of it?
    Ms. Crowley. Absolutely. Absolutely.
    Mr. Ellison. Could you talk about that a little bit?
    Ms. Crowley. The process of being displaced is stressful 
for every member of the family, and when Mom is unhappy and 
depressed and doesn't know where she is going to turn, and when 
Dad knows that he can't provide for the family, the kids feel 
that. They live that. They experience that. And all of that 
damages family well-being.
    Mr. Ellison. Thank you.
    I yield back the time I do not have.
    Chairman Luetkemeyer. The gentleman yields back.
    With that, I am the last questioner of the day here, and we 
are certainly--my colleagues have certainly discussed a lot of 
different things, and I think they have done a good job of 
going through the various areas that we wanted to explore 
today. And with that, my questions are kind of random, so bear 
with me because I want to try and fill in the blanks a little 
bit from what we didn't discuss or things that you brought up 
that sort of piqued my interest.
    Ms. Crowley, you had a slide and the second slide you had, 
on the bottom there you have--you said there are the low-income 
people and said a lot of their space--their units are occupied 
by high-income individuals. Did I hear you right on that?
    Ms. Crowley. If you look at the slide--and for folks in the 
audience, the Congressman has the hard copy--
    Chairman Luetkemeyer. Yes.
    Ms. Crowley. If you look at that, what it means is this--
the top band, the 19.6 million units, those are units that rent 
in the range that is affordable for people who earn between 50 
and 80 percent of area median income. But if you don't have to 
live within your income band, you can rent below that.
    And a large number of these units that are affordable at 30 
percent for this population are actually rented by much higher-
income people. And so there is the constant downward pressure 
on the units.
    Chairman Luetkemeyer. I guess my question is, are you 
saying that we should free up more lower-income housing units 
because there are a few people who are occupying them now who 
really can afford other things? That is my question.
    Ms. Crowley. We can't do that, because it is a free market. 
These are people who are renting based on what is there, and so 
these are higher-income people who don't pay more than 30 
percent of their income for their housing as a result of the 
way the market is set.
    Chairman Luetkemeyer. Very good.
    Mr. Evans and Mr. Fennell, the title of the hearing today 
references private sector participation, and so my first 
question, obviously, is are there enough private sector dollars 
out there to do the kind of investments we need to be able to 
move our projects along here, or are we hamstrung by the lack 
of availability of capital right now?
    Mr. Evans. I would just say, as an example, the number of 
tax credit applications per year that don't get funded are all 
backed by--they are applications that have funding or financing 
available to make those projects happen. So there are probably 
thousands of units that the money is there to create--
    Chairman Luetkemeyer. Okay. The capital is there, you 
believe. Okay.
    Does the current interest rate affect the availability of 
capital at all?
    Mr. Fennell. In the global sense, yes, it has some impact. 
But I don't think it is--
    Chairman Luetkemeyer. Normally, you would do the projects 
based on the availability of the cash flow, is that right? So 
the interest rate would play a part only to the extent that it 
has to be able to cash flow that cost of operation of the loan 
and the cost of operation of the facility. Is that roughly it?
    Mr. Fennell. Correct. It puts pressure on your pro forma. 
It puts pressure on your financing as you are trying to 
finalize--
    Chairman Luetkemeyer. But the interest rate doesn't 
generally hamstring the project because that is something that 
is normally figured in. I guess is one of the things I am 
trying to get to. Is that a fair statement?
    Mr. Fennell. Correct. It is one of the dynamics at work.
    Chairman Luetkemeyer. Okay. We are always looking for ways 
to try and stretch our dollars, and I think that is what we 
want to try and do here is find ways we can take existing 
dollars and do a better job of spending them.
    One of the things--I was at a meeting earlier this morning 
and somebody suggested that we consolidate. We have 5,000 
different housing authorities in the country. Is there a way we 
can consolidate those to have more--or an individual or group 
be able to manage more and therefore have less administrative 
costs and use those dollars then to plow back into our projects 
here? Is that possible?
    Ms. Todman, I am sure you have some ideas on that?
    Ms. Todman. I would be happy to run the housing authorities 
in suburban Maryland, but I am sure they wouldn't want me to. 
But having said that, we do have housing authorities that are 
smaller in nature that are creating locally derived 
consortiums, and working together to have some economies of 
scale, so that is happening.
    But I would suggest that they made that decision locally 
and it is working for them, and I would suggest that is 
probably where the decision-making on that should be.
    Chairman Luetkemeyer. Are there incentives that could be 
put in place that would speed that along?
    Ms. Todman. To the extent it is something that folks 
locally want to do, I am sure you can incentivize some smaller 
housing authorities to do that. Whether or not it is right for 
them is a different question.
    Chairman Luetkemeyer. Okay.
    I normally don't do this, but I would like to give all of 
you some homework today, if you don't mind. I think that you 
have been a fantastic panel and what I would like to do--I am 
sure each one of you has some ideas on making--this is a 
government program and we are dealing with government agencies 
here. I am sure there are ways that you see in your work, and 
then each one of you has a little different perspective here, a 
little different area you are working in, that can be made more 
flexible, that would help you be able to save money, and make 
us stretch our dollars.
    So if you wouldn't mind, I know some of you have 
suggestions in your testimony. I saw some of your suggestions.
    But if you have some ideas where, given the flexibility to 
be able to go between pots of money or be able to use monies 
differently or be able to have more flexibility with whatever--
not necessarily start a new program, not necessarily reinvent 
the wheel here, but take an idea that you can stretch the 
dollars out and not--and help more people with the same 
dollars. If you have ideas like that, would you be willing to 
just contact our committee and write a letter to us and give us 
those ideas? Because that is what we need to be able to do our 
job here, is to help more people be able to help you that way.
    The second thing I would ask is, I know that there are 
always a lot of ideas for pilot projects. I have tons of people 
come through my office every day, literally, and each one of 
them has an idea and say, ``If you would do this, we could 
restructure this over here and make it work, and it would be a 
way we can save money and do a better job with what we are 
doing.''
    The government is the last place you want to come to to 
have something be done efficiently and well. So if you would--
if you have ideas for pilot projects--and you guys live in the 
everyday world. You know what works and what doesn't work.
    If you have ideas like that, if you would include those in 
there--and obviously it is not something that is going to cost 
tons of money, but if it costs a little bit more money, that is 
fine because if you restructure something and you are able to 
get a huge cost benefit from just a few more dollars added to 
it, I don't have a problem with that. I would be certainly 
willing to take a look at that.
    But I think you guys know what works. You deal with these 
issues every day. And to me, that is what we need--that is why 
you are here. We want to listen to you.
    You have been a very good panel.
    So with that, I don't have any other questions.
    Ranking Member Cleaver, I believe we are ready to go.
    Without objection, I would like to submit for the record a 
statement from Representative Patrick Tiberi of Ohio.
    Without objection, it is so ordered
    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.
    With that, this hearing is adjourned.
    [Whereupon, at 11:21 a.m., the hearing was adjourned.]
                            A P P E N D I X



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