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


                   THE FUTURE OF HOUSING IN AMERICA:
                     OVERSIGHT OF HUD'S PUBLIC AND
                        INDIAN HOUSING PROGRAMS

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

                                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

                               __________

                             JULY 10, 2015

                               __________

       Printed for the use of the Committee on Financial Services

                           Serial No. 114-40
                           
                           
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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
FRANK GUINTA, New Hampshire
SCOTT TIPTON, Colorado
ROGER WILLIAMS, Texas
BRUCE POLIQUIN, Maine
MIA LOVE, Utah
FRENCH HILL, Arkansas
TOM EMMER, Minnesota

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

                 BLAINE LUETKEMEYER, Missouri, Chairman

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

                              ----------                              
                                                                   Page
Hearing held on:
    July 10, 2015................................................     1
Appendix:
    July 10, 2015................................................    25

                               WITNESSES
                         Friday, July 10, 2015

Castro Ramirez, Lourdes, Principal Deputy Assistant Secretary, 
  Office of Public and Indian Housing, U.S. Department of Housing 
  and Urban Development (HUD)....................................     3
Garcia-Diaz, Daniel, Director, Financial Markets and Community 
  Investment, U.S. Government Accountability Office (GAO)........     5

                                APPENDIX

Prepared statements:
    Castro Ramirez, Lourdes......................................    26
    Garcia-Diaz, Daniel..........................................    36

              Additional Material Submitted for the Record

Kildee, Hon. Daniel:
    Written responses to questions for the record submitted to 
      Daniel Garcia-Diaz.........................................    65

 
                   THE FUTURE OF HOUSING IN AMERICA:
                     OVERSIGHT OF HUD'S PUBLIC AND
                        INDIAN HOUSING PROGRAMS

                              ----------                              


                         Friday, July 10, 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 10 a.m., in 
room 2128, Rayburn House Office Building, Hon. Blaine 
Luetkemeyer [chairman of the subcommittee] presiding.
    Members present: Representatives Luetkemeyer, Westmoreland, 
Royce, Garrett, Pearce, Posey, Barr, Rothfus, Williams; 
Cleaver, Velazquez, Green, Moore, Ellison, Beatty, and Kildee.
    Ex officio present: Representative Waters.
    Chairman Luetkemeyer. The Subcommittee on Housing and 
Insurance will come to order.
    Without objection, the Chair is authorized to declare a 
recess of the subcommittee at any time.
    Today's hearing is entitled, ``The Future of Housing in 
America: Oversight of HUD's Public and Indian Housing 
Programs.''
    Before I begin, I would like to thank the witnesses for 
appearing before the subcommittee today. We look forward to 
your testimony.
    And just as a sidenote, a housekeeping note: We expect 
votes sometime between 10:15 and 10:30, so we will have to 
recess for a period of time to go vote. And hopefully, we can 
get as much done as we can between now and then. We will come 
back after that if there are further questions or if we haven't 
gone through the substantive issues of the day.
    So, with that, I recognize myself for 3 minutes to give an 
opening statement.
    Since Fiscal Year 2002, the Federal Government has given 
more than $550 billion to HUD. Sixty percent of annual funding 
goes to the Office of Public and Indian Housing. The Section 8 
budget alone has increased 71 percent between Fiscal Years 2002 
and 2013.
    Unfortunately for HUD, success isn't measured in the number 
of Federal programs or in dollars spent, and I have heard no 
indication from anyone that the growing need is anywhere close 
to being met.
    Today we will hear from the lady in charge of managing the 
$26 billion annual budget and 1,300 employees. Ms. Lourdes 
Castro Ramirez isn't a stranger to reform. She led the San 
Antonio Housing Authority, a Moving to Work (MTW) agency, and 
during her tenure, instituted a number of innovative changes 
that undoubtedly made the agency more efficient while providing 
new opportunities to residents.
    Ms. Castro Ramirez, you are now in a position to allow 
other housing authorities and advocates to innovate and improve 
the services they deliver. It is my sincere hope that 
throughout your tenure, you champion the flexibility and 
innovation that will help pave the way for more efficient and 
modernized housing programs across the Nation.
    We will also hear from Daniel Garcia-Diaz of the Government 
Accountability Office. Mr. Garcia-Diaz has extensive knowledge 
of HUD's housing programs and will testify on the progress HUD 
has made on previous GAO recommendations. It is my hope that we 
will hear that HUD has acted on these recommendations.
    We spend a lot of time discussing the need for reform in 
our Nation's housing programs. It is particularly important 
that this year, which marks the 50th anniversary of HUD's 
creation, we take time to understand what is and isn't working 
and how success is measured in each office at the Department.
    As I have stated in the past, the status quo isn't good 
enough. The reality is that the funding situation isn't going 
to get better. Despite even the best attempts, asking for more 
Federal dollars isn't the solution. It is time to roll up our 
sleeves and work together to build a stronger Office of Public 
and Indian Housing and a better HUD.
    I thank both witnesses for appearing today. I look forward 
to a productive hearing.
    And with that, I yield 5 minutes to the ranking member of 
the subcommittee, the gentleman from Missouri, Mr. Cleaver, for 
an opening statement.
    Mr. Cleaver. Thank you, Mr. Chairman.
    And thank you very much to the witnesses. I think this 
subcommittee is perhaps one of the most active subcommittees in 
the House, certainly within the Financial Services Committee. 
So I appreciate all of the attention that you have given and 
are giving to the issues of housing.
    I will keep my remarks under 3 minutes because of the 
change in the schedule today and the voting.
    I wanted to just emphasize the important work that HUD does 
as it relates to Public and Indian Housing programs.
    Since 1937, HUD has been in the business of trying to help 
the lowest-income Americans receive affordable and sanitary 
housing. And, although this Department was created as a result 
of what happened in the Depression, the truth of the matter is 
the Great Recession has already led to widespread losses in 
terms of housing and wealth in this country. People all over 
the country are still trying to recover from what happened 
during the Great Recession.
    About 2.3 million individuals now live in over 1.1 million 
units of public housing. And I always like to try to do this, 
because I think there are a lot of misconceptions and 
misinformation. There are almost 1 million children living in 
public housing--almost 1 million in this country living in 
public housing. Thirty-one percent of these households are led 
by the elderly, and 21 percent of the non-elderly are disabled. 
So about 52 percent of the individuals living in public housing 
either are elderly citizens, need some assistance, or they are 
disabled and need some assistance. And then, we have all of 
these children.
    So, contrary to what is thrown out here, that public 
housing is for healthy people who just want to lay up and watch 
big-screen TVs, which I don't know where you buy them, living 
in public housing, but that kind of thing has to be eliminated.
    The average length of time for families living in public 
housing, the non-elderly, disabled, is 6.8 years. I think that 
we have to do everything we can to help them. And I think the 
housing choice voucher program is one of the ways in which we 
can do that, and hopefully we can get into that a little more.
    I yield back the balance of my time.
    Chairman Luetkemeyer. I thank the gentleman.
    With that, we will go to our witnesses.
    We welcome you to the subcommittee.
    A quick tutorial on our lighting system there in front of 
you: you have 5 minutes to give your remarks. When you get to 
yellow, you have 1 minute left. Red means stop or close your 
remarks as quickly as possible. That same system will work 
whenever we are asking our questions here.
    So, with that, we welcome Ms. Lourdes Castro Ramirez, the 
Principal Deputy Assistant Secretary for the Office of Public 
and Indian Housing at HUD, to the subcommittee. You are now 
recognized for 5 minutes for your testimony.

STATEMENT OF LOURDES CASTRO RAMIREZ, PRINCIPAL DEPUTY ASSISTANT 
SECRETARY, OFFICE OF PUBLIC AND INDIAN HOUSING, U.S. DEPARTMENT 
             OF HOUSING AND URBAN DEVELOPMENT (HUD)

    Ms. Castro Ramirez. Thank you, Chairman Luetkemeyer and 
Ranking Member Cleaver, for inviting me to testify this morning 
about what has been my life's work: providing quality 
affordable housing for our Nation's most vulnerable citizens 
and supporting families and their efforts to improve their 
circumstances.
    HUD serves 4.6 million households through its rental 
assistance programs, with 3.3 million of them either living in 
public housing or participating in the housing choice voucher 
program. As the Principal Deputy Assistant Secretary for the 
Office of Public and Indian Housing, I oversee the public 
housing and housing choice voucher programs as well as the 
Office of Native American Programs, which provides affordable 
housing funds to 556 federally-recognized tribes.
    The vast majority of the 3.3 million households served are 
elderly or disabled or families with children. In fact, elderly 
or disabled adults represent 51 percent of all households, and 
families with children represent 38 percent.
    Rental assistance programs--
    Chairman Luetkemeyer. Ms. Ramirez, can you pull the 
microphone around so they can hear you a little better? Thank 
you. We are being recorded here, and they are having a little 
difficulty picking up your words.
    Thank you very much.
    Ms. Castro Ramirez. Okay.
    Rental assistance programs help improve lives by providing 
access to higher-quality housing, reducing homelessness, 
fostering stability, and making it possible for families with 
children to focus on improving their future.
    I am deeply committed to working with Secretary Castro and 
the HUD team to move forward a bold agenda that includes 
expanding housing opportunities; promoting economic self-
sufficiency; reducing family, youth, and veteran homelessness; 
bridging the digital divide; and improving health and 
educational outcomes for our residents.
    We also want to expand housing opportunities for the nearly 
13.7 million low-income households who are not receiving 
housing assistance and are paying more than half of their 
income on rent, live in substandard housing, or both. Despite a 
96 percent occupancy rate in public housing and a 98 percent 
utilization level in the house choice voucher program, HUD is 
only able to serve one in four income-eligible households.
    Since 1965, HUD has increased the number of households 
receiving housing assistance from 600,000 to 4.6 million. In 
the Indian Housing Block Grant Program, over the life of that 
program, grant recipients have built, acquired, or rehabbed 113 
housing units.
    Without providing this assistance, studies have shown that 
there would be a dramatic increase in homelessness and in the 
number of extremely-low-income families. The roof that we 
provide is making a difference in addressing the consequences 
of poverty by providing access to decent, safe, and affordable 
housing and promoting economic mobility.
    It is important to note that a growing number, 42 percent, 
of adults that are receiving rental assistance have a job and 
earn wages.
    Whether it is through the expansion of workforce 
development programs like the Family Self-Sufficiency Program 
and Jobs Plus, providing critical housing for veterans through 
the HUD-VASH program, or creating public-private investments 
through the Rental Assistance Demonstration and Choice 
Neighborhoods program, HUD is providing millions with stability 
and a better future.
    HUD's rental assistance programs have been significantly 
underfunded for several years. I know firsthand, as the former 
executive director of the San Antonio Housing Authority, just 
how difficult it is for public housing agencies to develop and 
preserve an adequate supply of affordable housing. Despite 
these funding limitations, HUD, in partnership with public 
housing agencies and Native American communities, is doing its 
best to responsibly manage and maximize scarce resources to 
provide good housing, build strong neighborhoods, and promote 
opportunities.
    The funding levels in the Fiscal Year 2016 housing 
appropriations bill would make serving even our current program 
participants much more difficult. Let me give you an example. 
Compared to the President's budget, the House bill would serve 
roughly 100,000 fewer families in the housing choice voucher 
program. Not only does the House bill fail to provide funding 
to help restore vouchers lost to sequestration, the funding 
level is also insufficient to renew the 28,000 existing 
vouchers.
    In summary, all of our work to expand access to higher-
quality affordable housing, create and preserve that housing, 
and to connect residents to jobs and educational opportunities 
is about one simple thing: providing more families with an 
opportunity to share in the American Dream.
    We appreciate the invitation to discuss HUD's rental 
assistance programs with our colleagues from the Government 
Accountability Office. I thank you for the invitation, and I 
look forward to the conversation.
    [The prepared statement of Ms. Castro Ramirez can be found 
on page 26 of the appendix.]
    Chairman Luetkemeyer. Thank you, Ms. Ramirez.
    I now recognize Mr. Garcia-Diaz, the Director of Financial 
Markets and Community Investment at GAO, for 5 minutes.

 STATEMENT OF DANIEL GARCIA-DIAZ, DIRECTOR, FINANCIAL MARKETS 
AND COMMUNITY INVESTMENT, U.S. GOVERNMENT ACCOUNTABILITY OFFICE 
                             (GAO)

    Mr. Garcia-Diaz. Thank you.
    Chairman Luetkemeyer, Ranking Member Cleaver, and members 
of the subcommittee, thank you for the opportunity to discuss 
GAO's work on programs administered by HUD's Office of Public 
and Indian Housing (PIH).
    PIH administers several programs including housing choice 
vouchers, public housing, and Indian Housing Block Grants, that 
assist the Nation's poorest and most vulnerable households in 
obtaining safe, decent, affordable housing. PIH also operates 
programs designed to help assisted households become more 
economically independent through programs such as Moving to 
Work and Family Self-Sufficiency.
    My opening statement is based primarily on reports GAO 
issued from 2012 through 2014 and will be limited to three 
areas: first, HUD's performance assessment of the MTW program; 
second, opportunities for greater efficiencies in the voucher 
program; and third, general observations on key challenges 
faced by PIH.
    The MTW program provides selected PHAs regulatory 
flexibilities to design and test new models for administering 
their public housing and voucher programs. Because MTW agencies 
are testing new ideas to improve agency and tenant outcomes, 
robust assessment is necessary to determine the relative 
success of different program models.
    However, in our April 2012 report on MTW, we identified a 
number of weaknesses that limited HUD's ability to determine 
outcomes in light of the program's objectives, including a lack 
of performance indicators and inconsistent information reported 
by individual MTW agencies.
    We are happy to report that HUD has implemented three of 
our four recommendations addressing these weaknesses. For 
example, in May 2013, HUD revised its reporting policies to 
require MTW agencies to disclose quantifiable, outcome-oriented 
information on their activities. In 2013, HUD established 
standard measures that correlate with the program's statutory 
objectives. In addition, HUD has recently provided us with 
information on the steps it will take to identify lessons 
learned in a more rigorous fashion. We are currently reviewing 
this information.
    I now turn to PIH's largest program, the housing choice 
vouchers.
    In our 2012 report, we found that improved information on 
the level of subsidy reserves that PHA should maintain could 
aid budget decisions and reduce the need for new appropriations 
or be used more effectively to assist additional households. 
Unused subsidy funding can accumulate in reserve accounts when 
PHAs are not able to spend all the funding they receive in a 
given year. HUD has requested the authority to offset and in 
some cases redistribute excess reserves, but HUD has not 
developed specific or consistent criteria defining what 
constitute excess reserves and how it would redistribute 
funding among PHAs, as we recommended in our 2012 report. I 
have received recent information that HUD is starting to take 
action on that recommendation.
    Another area for potential efficiencies involves 
streamlining the administration of the voucher program. We 
recommended in our 2012 report that HUD consider proposing to 
Congress options for streamlining the program's administrative 
requirements. HUD has implemented our recommendation. 
Specifically, HUD proposed a number of statutory changes in its 
recent budget request. After receiving authorization in 2014, 
HUD published a proposed rule in January of this year that 
would permit, among other things, PHAs to conduct streamlined 
reexaminations of families with fixed income. HUD expects to 
publish a final rule by the end of the year.
    I would like to conclude by briefly mentioning three 
ongoing challenges that PIH will have to continue to manage.
    First, improper payments. Public housing and vouchers are 
among the programs at risk of having improper payments. We have 
noted that HUD has significantly reduced improper payments 
since 2000. Further reductions will require sustained 
management attention.
    Second, preservation of public housing units. A 2010 report 
estimated $26 billion in capital needs for public housing. HUD 
has multiple efforts under way that may help address these 
needs. Continued HUD oversight of implementation of 
preservation efforts will be critical to its success.
    Finally, PHA monitoring. Work conducted by GAO and the IG 
have identified issues with the effectiveness of HUD's tools 
for monitoring PHAs. The large number of PHAs nationwide and 
the significant physical and financial challenges some of them 
face highlight the importance of effective HUD oversight.
    This concludes my opening remarks. I would be glad to 
answer any questions you may have.
    [The prepared statement of Mr. Garcia-Diaz can be found on 
page 36 of the appendix.]
    Chairman Luetkemeyer. We thank Mr. Garcia-Diaz for his 
testimony.
    And, without objection, the written statements of both 
witnesses will be made a part of the record as well.
    Let me begin by recognizing myself for 5 minutes for 
questioning.
    Ms. Castro Ramirez, as I understand it, the overwhelming 
majority of PIH funding is spent through formula grants. Yet, 
you have a staff of more than 1,300. What do these 1,300 
employees do if the bulk of your budget is billed out through 
formula grants?
    Ms. Castro Ramirez. Thank you, Mr. Chairman, for the 
question.
    As it relates to the Office of Public and Indian Housing 
and the responsibility that we have to manage a $26 billion 
budget with 1,300 staff members, as we all know, we are 
entrusted to ensure that these dollars are spent to enhance and 
provide adequate housing. And so the employees who work in the 
Office of Public and Indian Housing are responsible for 
ensuring that the regulatory requirements, statutory 
requirements of these programs are being monitored. They are 
also responsible for ensuring that we are tracking performance.
    And they are also responsible for providing adequate 
technical assistance and oversight in the field level. We have 
a number of field offices across the United States that work 
closely with PHAs and also with Native American communities to 
ensure that the local needs, the local housing needs, of their 
citizens and residents of those communities are appropriately 
addressed.
    Chairman Luetkemeyer. Okay. You said you are tracking 
performance. Do you have some metrics to show or that you are 
following to show success for your programs?
    Ms. Castro Ramirez. Yes, we do have some metrics, Mr. 
Chairman.
    One metric is our occupancy rate in public housing. Since 
this Administration, since President Obama's Administration, 
occupancy in public housing has increased significantly. Six 
years ago, it was at about 90 percent. We are now at 96 
percent.
    Another measurement of performance is how well public 
housing agencies are spending their dollars to serve families 
from the waiting list. As I indicated in my testimony, 98 
percent of housing choice voucher dollars are being used.
    Chairman Luetkemeyer. Mr. Garcia-Diaz, you are the ones who 
sort of look over everybody's shoulders, make sure things are 
being done right. And I am sure you have some ideas. Do you 
believe 1,300 employees are necessary to oversee this program 
when a lot of it is done on a contract basis?
    Mr. Garcia-Diaz. While the funding of the programs is 
formula-based, extensive oversight is required of the 
individual PHAs. There are over 3,300 of them of varying size 
and complexity. I can't comment if 1,300 is exactly the right 
number or not, but that is the kind of assessment that we would 
hope HUD would be doing.
    As these programs are changing and evolving through things 
like MTW, we would hope that HUD is looking at their structure, 
their organizational structure, to make sure that it is 
responsive to the current program needs and make any changes 
that they need to.
    Chairman Luetkemeyer. Okay. I guess the question is, are 
they being well-managed and are they being well-run? Are those 
1,300, are they doing their job, or do we have some waste 
there?
    Mr. Garcia-Diaz. Again, we haven't looked at that 
particular issue.
    Chairman Luetkemeyer. Okay.
    With regards to the number of vouchers that go unused, it 
looks like we have stagnated between the 92 percent range to 
the 90 percent range. Why do you believe that is so, Mr. 
Garcia-Diaz?
    Mr. Garcia-Diaz. Was it regarding the public housing--
    Mr. Luetkemeyer. Yes.
    Mr. Garcia-Diaz. --occupancy--
    Chairman Luetkemeyer. Yes. Section 8.
    Mr. Garcia-Diaz. --or Section 8?
    Chairman Luetkemeyer. The Section 8 tenant-based voucher 
programs from 2011 to the present have stagnated in the 90 
percent to 92 percent range.
    Mr. Garcia-Diaz. Okay. There is a variety of reasons that 
could explain why not all the funding in the Section 8 programs 
gets utilized. And it could be partly the PHA and their ability 
to manage the program to their optimal occupancy rate. That 
requires PHAs to manage attrition in the program. And so, 
depending on how effectively they manage that process, you 
could have a situation where they don't utilize all of the 
funding for that program.
    Chairman Luetkemeyer. Ms. Ramirez, what do you think is the 
reason for that?
    Ms. Castro Ramirez. There are several reasons. In addition 
to what Mr. Garcia-Diaz mentioned, I would specifically stress 
that not providing sufficient funding to housing agencies to 
administer the housing choice voucher has decreased and 
impacted their ability to deliver this program appropriately.
    As an example, in the last few years the administrative 
fee, which supports the housing agencies' ability to be able to 
use those vouchers, has been cut by about 25 percent. In some 
cases, we have received requests from housing agencies that are 
administering the housing choice voucher program that they can 
no longer manage or administer the program because there is not 
sufficient funding.
    Chairman Luetkemeyer. Thank you. I see my time is up.
    With that, I will recognize the ranking member for 5 
minutes, the distinguished gentleman from Missouri, Mr. 
Cleaver.
    Mr. Cleaver. Thank you, Mr. Chairman.
    And thank you. I failed to thank you in my opening 
comments, but thank you for being here.
    I was on the city council in 1990 and elected to mayor in 
1991, and President Bush--and it is little discussed--President 
Bush, the first, promoted and eventually signed into law one of 
the best-kept secrets of HUD, I think. It is called the Family 
Self-Sufficiency Program. It is, I think, very creative. It 
allows for the promotion of employment, and it asks that 
expansion for residents.
    But maybe it would be of some help if you shared just an 
overview of the program, because, since I have been on this 
committee, which is 11 years, I am not sure we have ever talked 
about it, and I guess one of the reasons is because it works 
well. So would you, Ms. Ramirez, please?
    Ms. Castro Ramirez. Yes. Thank you, Representative Cleaver, 
for the question regarding the Family Self-Sufficiency Program.
    The Family Self-Sufficiency Program is a program that has 
been proven to improve the economic standing and opportunities 
for the families that we serve both in public housing and the 
housing choice voucher program. Specifically, one of the key 
elements of the Family Self-Sufficiency Program is for public 
housing staff to work closely with participants to develop a 5-
year plan that leads to employment, educational opportunities, 
and, in many cases, to homeownership.
    Let me share with you two important performance figures or 
metrics. In the first year of participating in the Family Self-
Sufficiency Program, 71 percent of adults who participate show 
an increase in their income. Another important metric is we are 
monitoring homeownership rate at the end of the FSS program, 
and, in 2014, 11 percent of FSS graduates, those that have 
completed the program, moved into homeownership, became 
homeowners.
    Mr. Cleaver. And after the 5 years, what happens to the 
money that they have been paying for the increased rental rate?
    Ms. Castro Ramirez. Yes. So, during the course of the 5-
year program, families, as their incomes increase, there is an 
escrow that is set aside that allows for families to be able to 
save those dollars for homeownership, for education, or for 
expenses related to the goals that they want to achieve.
    Mr. Cleaver. So they are able to collect that money that--
    Ms. Castro Ramirez. Yes.
    Mr. Cleaver. --they have actually been paying?
    I am not sure how many people are aware that I had to 
appoint the housing authority, as mayor, and became extremely 
supportive of this program, because my residents, my citizens, 
were involved in the program and they were praising it.
    And I just think--you know, I was in a parade on Saturday. 
And one person, as I was walking down the street, only one 
person out of maybe 3,000 wouldn't take my candy. And I focused 
the rest of the day on this one person. Now, 2,999 took it; I 
focused on one. And I think it is a human characteristic that 
maybe we can't move, but we tend to go to the negative. And the 
programs that are functioning, I think, like this program, many 
of the Members may not even know about it because that is not 
what humans do. So I appreciate that explanation of the 
program.
    And I yield back the balance of my time.
    Chairman Luetkemeyer. The gentleman yields back.
    With that, we go to the distinguished gentleman from 
Georgia, the vice chairman of the subcommittee, Mr. 
Westmoreland, for 5 minutes.
    Mr. Westmoreland. Thank you, Mr. Chairman.
    Ms. Ramirez, are you familiar with the Small Housing 
Authority Reform Program proposal, the SHARP?
    Ms. Castro Ramirez. Yes, I am somewhat familiar with it.
    Mr. Westmoreland. We have met with all of our--well, 90 
percent of our housing authorities in the district, and they 
are very concerned. Most of my authorities are of the smaller 
type--35, 50, 70 units. And they are very concerned about some 
of the regulations and requirements that are put on them.
    Is there anything that you can think of that HUD could do 
administratively, some things out of this proposal, that could 
be put into effect immediately?
    Ms. Castro Ramirez. Yes, Representative. Thank you very 
much for the question.
    I am keenly aware that many of the housing agencies that 
participate in and administer these programs are small housing 
authorities. And so our Department is focused on greater 
efficiency and also identifying opportunities for flexibility 
and reducing administrative burden.
    Three examples that I would provide of the efforts: First, 
in the President's budget, there is language that would enable 
PHAs to be able to have flexibility and fungibility in the use 
of their capital funds and their operating funds, up to 30 
percent. So, greater flexibility in terms of the use of those 
dollars.
    Second, we are finalizing a streamlining rule that will 
enable small PHAs and also large PHAs to exercise some 
additional flexibilities, such as moving to triannual 
certifications.
    And lastly, the physical needs assessment, we are in the 
process of developing a proposed rule to exempt small PHAs.
    Mr. Westmoreland. Thank you. Because I think if you will go 
and especially if you want to come visit some in my district, 
you will find that these are very well-kept, very well-managed, 
residents love them, but they are under a tremendous amount of 
pressure on some of the things that they have to do.
    Let me ask you again, you came from the San Antonio Public 
Housing Authority, which is a Moving to Work authority, is that 
correct?
    Ms. Castro Ramirez. That is correct.
    Mr. Westmoreland. Do you think that the San Antonio 
benefited from the Moving to Work status?
    Ms. Castro Ramirez. Yes, I think it did benefit.
    Mr. Westmoreland. So you and I both are fans of Moving to 
Work.
    As a former director with the Moving to Work status, would 
you ever want to relinquish that Moving to Work status and go 
back to just a normal public housing authority?
    Ms. Castro Ramirez. I think that the Moving to Work program 
provides greater flexibility and enables PHAs to address local 
needs and to be innovative in the way that they address local 
affordable housing needs.
    There is also responsibility associated with being an MTW 
agency, including ensuring that the families who are being 
housed continue to be--that MTW agencies are doing their best 
to substantially serve the same number of families.
    So the flexibilities that are afforded through MTW--one of 
the reasons why we are so focused on improving monitoring and 
evaluation, as mentioned by GAO, is because we believe that 
those innovative practices that are taking place within the MTW 
agencies are practices and policies that could be scaled up.
    But, in order for us to be able to identify those policies 
that are working, we need more data, more evaluation. And, in 
fact, our Office of Policy Development and Research is in the 
process of undertaking a comprehensive study that would enable 
us to identify some of those best practices.
    Mr. Westmoreland. Most of us who have visited our public 
housing authorities (PHAs) and are lucky enough to have some of 
the Moving to Work authorities in our district have seen the 
tremendous progress that they have made. And we are trying to 
encourage that, but it seems like HUD kind of pushes back on 
us, when we want to help people. And we really don't understand 
that. So hopefully, we can work together and make some of this 
move a little bit faster.
    I yield back.
    Chairman Luetkemeyer. The gentleman's time has expired.
    With that, we go to the gentlelady from California, the 
distinguished ranking member of the full Financial Services 
Committee, Ms. Waters.
    Ms. Waters. Thank you very much.
    I would like to continue this conversation about Moving to 
Work programs. And let me just say that I think that probably 
every Member of Congress and certainly members of this 
committee would like to see people working, we would like to 
see them independent, we would like to see them earning money 
and being able to live where they want to live.
    So when we talk about Moving to Work, those of us who 
question it are not opposed to people becoming independent and 
being able to make choices in their lives. But we don't 
understand this Moving to Work program. There are currently 39 
Moving to Work agencies with 430 units, or 13 percent of the 
total stock, and, after 20 years, there is nothing to show for 
it.
    So we find that, supposedly, we are told that in these 
Moving to Work programs that people are employing work 
requirements, time limits, higher rent requirements, et cetera, 
et cetera. But Moving to Work agencies in 2014 shifted to other 
purposes or left unspent $590 million of their voucher subsidy 
funds, which they could have used to support 63,000 additional 
vouchers. And they used 81 percent of their total appropriated 
voucher funds for vouchers, meaning they spent 19 percent on 
other things, including reserves, on and on and on.
    So why don't we know the results of Moving to Work 
programs? Who can tell us about the success of them in real 
numbers? How many people were trained, were given jobs? How 
many people transitioned out of public housing into market-rate 
housing? What is going on with voucher programs?
    It sounds good. Moving to Work sounds excellent. And for 
people who think that everybody in public housing is worthless 
and don't want to work--and they can get up and they can pound 
their fist and talk about this great Moving to Work program. It 
sounds good. But what is it, Ms. Ramirez? Tell me about Moving 
to Work and the success of it.
    Ms. Castro Ramirez. Thank you, Representative Waters, for 
the question regarding Moving to Work.
    In the President's budget, our Department is proposing a 
modest increase in the number of MTW agencies by 15 new MTW 
agencies that would have to be high-performing agencies. And 
one of the reasons why we are proposing a very modest increase 
is because we agree with the statements that you have made, 
that it is very important for us to be able to have good 
performance information, good metrics that demonstrate the 
positive impact and also that demonstrate the policies that 
have not worked to ensure that as the Moving to Work 
demonstration and designation grows, we are very mindful about 
the policies that are being implemented.
    I would just share, in my experience, in San Antonio, as a 
Moving to Work agency, we did not have time limits. The focus 
there was about partnering with agencies to bring in workforce 
development and education programs. And we did develop very 
specific metrics. And I think one of the challenges in terms of 
macro information is that each agency has developed very 
specific plans to their local need--
    Ms. Waters. Okay. And I am going to interrupt you for a 
moment because--
    Ms. Castro Ramirez. Yes.
    Ms. Waters. --I only have a short period of time left.
    Ms. Castro Ramirez. Thank you.
    Ms. Waters. But why don't you take the Moving to Work 
programs now and start demanding the information, come up with 
some standards, so that you could get some credible 
information, instead of expanding on Moving to Work that has 
not proven or shown what they can do?
    I know a lot about this. I created programs in South 
Central Los Angeles that I actually wrote using Wagner-Peyser 
moneys and Project Bill in Nickerson Gardens, Jordan Downs, and 
all those public housing programs. I know what can be done. But 
I just don't see Moving to Work doing any of that.
    And why are you expanding? Take the ones that are already 
in existence and get that information from them.
    Ms. Castro Ramirez. I completely agree. And we are in 
discussions with all 39 agencies currently to make several 
improvements to existing agreements, or agreements as we move 
to execute new agreements.
    And one of the elements that is under discussion with all 
39 is improving monitoring and evaluation, ensuring also that 
agencies clearly understand the responsibility of continuing to 
substantially serve the same number of families.
    So that is well under way, and we look forward to following 
up with your office with some additional information on that.
    Ms. Waters. Thank you.
    Chairman Luetkemeyer. The gentlelady's time has expired.
    With that, we will go to the gentleman from New Mexico, Mr. 
Pearce, for 5 minutes.
    Mr. Pearce. Thank you, Mr. Chairman.
    I thank both of the witnesses for being here and for your 
work on improving housing for those who need it.
    I appreciated your comments, Ms. Ramirez, and your 
testimony.
    I think that I actually sense a feeling of excitement, 
really, for the opportunity to reform some of the programs. 
When we began work on NAHASDA 3 years ago, HUD was pretty 
resistant to some reforms in HUD, and then they got supportive 
because they realized that these would actually be productive, 
that they were reforms that made sense.
    Likewise, many of the Indian tribes, the housing 
authorities were resistant, but then they began to say: But we 
need to find the efficiencies. Sometimes we have corruption; we 
need to get rid of that. And we began to have very 
straightforward conversations.
    So, I am actually approaching this piece of the housing 
with some anticipation that you all, no matter what happens on 
the legislation, there are things I think you all can do 
internally, and I would encourage that.
    So I would like to kind of drill down in one specific area, 
if we can. And I am not trying to catch you in a corner or 
anything, but do you have a rough cost for Indian housing per 
square foot nationwide? Is that something that you all work on? 
Because the numbers I get in our district are very high, $200 
to $300 a foot, when BIA or some agency is in charge of getting 
the houses built. Do you have any figures like that nationwide?
    Ms. Castro Ramirez. I don't have those figures with me, but 
I can definitely follow up with--
    Mr. Pearce. Is $200 kind of out of the range? Is that 
abnormally high, or is that something that you see 
occasionally? Do you have a figure, the cost per square foot on 
the housing?
    Ms. Castro Ramirez. Specific to Native American 
communities?
    Mr. Pearce. I am just talking about Native American housing 
right now. That is the total focus.
    Ms. Castro Ramirez. I would have to follow up with you in 
terms of what the specific--
    Mr. Pearce. Okay. Let's just begin the discussion that I 
think I have seen those numbers and you would be far better--it 
looks like you might have a note coming up, so if you need to 
read that, that is fine.
    But, again, my point is that I have just been going to the 
Indian tribes and saying, look, why are you waiting on 
Washington? Just build your own. Why don't you get it set up to 
where private banks can come on and lend money on the 
reservation? It is actually much simpler than what you would 
think. And so we need longer-term leases, because banks don't 
want to build a house on a property that might not be there 
next year.
    So, many of the tribes are now doing that. They are asking 
us to come in. The ones in New Mexico are saying, you all come 
help us write our mortgage rules. Because we would be happy to 
do it. We just weren't aware there was a problem.
    And if we can get it to where more people can get private 
financing, we don't have to wait for government financing. A 
lot of the Indians are making very good money. And they would 
rather live on the tribal lands, but they can't get the loan. 
And so they stay in the town, they build a community there, and 
then the fabric of the tribes begins to break down.
    So that is the first thing, to see if we can't ease those 
rules. And you all could do that. We have suggested this in our 
legislation, in that pilot program, that you all, frankly, I 
think, could get that done internally.
    The second piece is that the tribe should be the first 
repossessing agent, because they don't want banks repossessing 
property that is on the tribal grounds. I said, look, you know 
who culturally wouldn't fit in that neighborhood and who would. 
And they are, again, very receptive to that.
    So this year I visited a tribe in New Mexico that is 
building their own houses, and they are using tribal labor. 
There are actually a couple that are doing this, and one tribe 
is at $57 a foot. So if you all could figure out how to get 
past the bureaucracy that is driving this thing towards $200 a 
foot back into the $57 per foot--another tribe had $48 a foot--
we could start building 4 and 5 times the houses. And I think 
that is what we are after.
    So I will give you the last minute to--so tribal-owned 
institutions, you all need to be backing them up, make sure 
they are not building junk houses, because you know how that 
would work. But, anyway, comment, if you would?
    Ms. Castro Ramirez. Yes.
    First, Representative Pearce, let me thank you for 
introducing the reauthorization of NAHASDA, the Native American 
Housing Self-Determination Act. For the last 18 years, this 
specific Act has empowered Native American communities to 
ensure that they are deciding and determining how best to 
address the needs within Indian country, and there is 
tremendous work that has been done.
    As it relates to the specific information on the cost per 
unit, we will follow up and look forward to visiting with you 
on this.
    Mr. Pearce. Just count us in as a partner.
    I yield back my time.
    Ms. Castro Ramirez. Thank you.
    Chairman Luetkemeyer. The gentleman's time has expired.
    We do have votes that have been called. I am going to try 
and squeeze in two more people, if we can, before we have to 
recess.
    With that, I recognize the gentlelady from New York, Ms. 
Velazquez, for 5 minutes.
    Ms. Velazquez. Thank you, Mr. Chairman, and Mr. Ranking 
Member.
    I would like, Ms. Ramirez, to continue and to expand on the 
questions that were asked by Ms. Maxine Waters.
    In your submission of limited expansion of the MTW, the 
request does not, however, include the full set of protections 
contained in the 2012 stakeholder agreement. Why is that?
    Ms. Castro Ramirez. Yes, Representative Velazquez. Thank 
you for your question.
    The request to expand to 15 agencies does include some 
elements of the discussions that were contained in the 
stakeholder--
    Ms. Velazquez. But my question is, there was an agreement 
that was negotiated and committed to by HUD. Why wasn't that 
included in your request? And how, then, are you going to make 
sure that tenants will be protected from the unintended 
consequences of the Moving to Work program?
    Ms. Castro Ramirez. Yes, thank you for the follow-up 
question.
    So there are some inherent--
    Ms. Velazquez. I understand. Why some and not the full 
agreement? Because there is going to be a lack of credibility.
    Ms. Castro Ramirez. Right.
    So the protections--one of the statutory provisions in MTW 
is that an MTW agency that is participating in the 
demonstration must demonstrate that they are substantially 
serving the same number of families as they were prior to 
moving to MTW. And we believe that is an important element of 
ensuring that residents are protected and ensuring that those 
services continue.
    Ms. Velazquez. That doesn't answer my question. Okay. And I 
just would like to hear--people are frustrated, Members are 
frustrated, because you continue to ask for expansion of the 
program, and yet we don't know if tenants are being protected, 
if their rights have been violated.
    Mr. Garcia-Diaz, the GAO has found that HUD has not 
adequately monitored the performance of MTW agencies, and this 
lack of oversight often comes at the expense of residents. HUD 
has proposed a limited expansion of MTW but still has not 
provided Congress with any real data on the program. Can you 
please explain your findings and why a rigorous, standardized 
evaluation of MTW is so critical?
    Mr. Garcia-Diaz. Yes.
    So our work in the past has shown that, really, for the 
longest time this program has been operating with no systematic 
data on the statutory objectives of the program. MTW is not 
just about efficiency and cost-effectiveness, but it is also 
about improving work opportunities and housing choice.
    And we had recommendations that HUD develop standard 
definitions on how it defines these objectives so that it could 
be applied and that the agencies can collect consistent data 
and report it up.
    So, for the longest time, we have had a huge missed 
opportunity to find out what is going on with this program. 
And, now, recently, starting from 2013 and on, HUD has started 
to define terms, encourage a little more consistency in the 
data collection, and have amended contracts so that all the MTW 
agencies are collecting and reporting similar data to HUD that 
can be consolidated so that we can say something about the 
program.
    Ms. Velazquez. But, to this day, based on the facts, we 
cannot conclude that it is working.
    Mr. Garcia-Diaz. Until the data results come out--
    Ms. Velazquez. Thank you.
    Mr. Garcia-Diaz. --it is hard to judge on the effectiveness 
of the program.
    Ms. Velazquez. Thank you.
    Ms. Ramirez, conversions on the RAD would create 
construction and rehabilitation jobs subject to Section 3 
requirements. However, Section 3 has not been properly 
enforced. And I am concerned that inadequate oversight causes 
residents to miss out on job opportunities. What are HUD's 
specific plans to ensure that Section 3 is enforced, 
specifically as related to RAD?
    I have been working on Section 3 for almost 20 years, and 
for 20 years it has been a missed opportunity, a real disaster. 
So can you please--because when we deal with the backlog that 
exists in New York City with NYCHA in terms of repairs, this is 
a way to get able bodies to get jobs--and they are seeking 
jobs, because every week we do workshops trying to get 
residents to find jobs. But yet you don't have the proper 
mechanisms in place 20 years later.
    Chairman Luetkemeyer. The gentlelady's time has expired.
    With that, we go to the gentleman from California, Mr. 
Royce, for 5 minutes.
    Mr. Royce. Thank you, Mr. Chairman.
    And thank you very much to our witnesses here.
    And, Deputy Assistant Secretary Castro Ramirez, I would 
like to address an issue with you briefly that was touched on 
in your prepared testimony, and also Mr. Westmoreland brought 
this up.
    Your predecessor in your position made a public commitment 
at a February 2014 Moving to Work summit in support of 
extending for 10 years all MTW contracts for public housing 
authorities with rental assistance utilization rates of 90 
percent or higher.
    And specifically, last March, she wrote the housing 
authority of the County of San Bernardino, and I will quote 
from her letter: ``I am willing to extend your MTW agreement to 
the fiscal year ending in 2028, providing your HCV utilization 
level is at or above 90 percent.''
    And she continued in that letter: ``An amendment to the MTW 
agreement is being drafted for those agencies that are already 
demonstrating a high utilization level and will be provided as 
soon as possible.''
    This amendment hasn't materialized. And, in fact, rather 
than offering a contract extension last fall, the Department 
began to push more restrictive provisions for existing MTW 
agencies.
    So San Bernardino County has implemented a 5-year-term-
limit program for tenants, which has increased family incomes 
and helped many find gainful employment. And, in fact, in 
between April 2013 and September 2014, their MTW initiatives 
saw a 24.6 percent reduction of unemployed household heads and 
a 52.4 percent average income jump.
    The current uncertainty created by HUD threatens this 
success. Many of these 5-year contracts now extend beyond the 
scheduled 2018 MTW expiration date. San Bernardino does not 
know whether they will keep their program flexibility past 2018 
and whether they can fulfill current commitments to their 
tenant families.
    And, Deputy Assistant Secretary, can you explain, 
particularly since HUD committed to doing this 16 months ago, 
why MTW agencies like San Bernardino have not been granted an 
extension, provided they are well-run, their utilization 
exceeds 90 percent, and HUD is not disputing their funding 
formula?
    Ms. Castro Ramirez. Yes. In response to the question about 
the existing MTW discussions to extend agreements, I do want to 
point out that, as mentioned earlier by Representative Waters 
and Representative Velazquez, it is very important that, as we 
continue to both extend or expand the Moving to Work 
demonstration, we need to ensure that there is strong language 
about monitoring and evaluation and that MTW agencies are 
serving families and expanding housing opportunities.
    And the ongoing discussions that are happening with the 39 
agencies have enabled us to be able to identify four new things 
that are important in ensuring the success of MTW. One is that 
the discussions that we are having with the 39 agencies include 
updating administrative and legal requirements. The second is 
ensuring that there is a strong evaluation component. The third 
is addressing funding inequities that affect a few of the 
agencies.
    Mr. Royce. Right.
    Ms. Castro Ramirez. And, lastly, that there is strong 
language about how we are going to ensure that families are 
being served.
    Mr. Royce. But when could we expect to see an amendment to 
the current MTW agreement? That is the question for me. Because 
it doesn't make sense for HUD to let well-run agencies twist in 
the wind, and so my hope was that it could be resolved very 
expeditiously.
    Ms. Castro Ramirez. Our hope is that could also be 
achieved, Representative Royce. In fact, we have provided the 
draft contract language to all 39 agencies just in the last 2 
weeks.
    Mr. Royce. So maybe in a couple of months? What do you 
think?
    Ms. Castro Ramirez. We are hoping that can be done. We have 
provided the contract language that includes these four 
principles that I have just outlined for you.
    Mr. Royce. Okay. Let's hope it could be done very soon, and 
I appreciate your good efforts if it can be.
    And thank you so much.
    Chairman Luetkemeyer. The gentleman yields back.
    With that, we are going to go vote. We expect to be back in 
30 to 45 minutes. For those Members who haven't asked 
questions, we will be back. Hopefully, we will be back shortly.
    With that, the committee stands in recess, subject to the 
call of the Chair.
    [recess]
    Chairman Luetkemeyer. The subcommittee will reconvene. And 
I thank the witnesses for your indulgence.
    We expect a couple more Members here shortly, but in the 
meantime we will go to the gentleman from Texas, Mr. Williams, 
for 5 minutes.
    Mr. Williams. Thank you, Mr. Chairman.
    And I would like to say hello to a fellow Texan, Ms. 
Ramirez.
    It is nice to see you both. Thank you for being here.
    Ms. Ramirez, if you were able to create a program from 
scratch for public and assisted housing, what would it look 
like in 2015? And how would it differ from programs created 
back in the 1960s?
    Ms. Castro Ramirez. Thank you, Representative Williams, for 
the question.
    I would focus on strengthening the programs that are 
already in place. The housing choice voucher program, as we all 
know, serves 2.2 million households across America. And, 
recently, there was a study released that demonstrates that the 
housing choice voucher program is lifting families up. It is 
reducing homelessness. And so, I would ensure that rental 
assistance programs are at the core.
    I would also continue to invest in public housing. We know 
that just over a million households are served by the public 
housing program, but it is critically important to provide the 
capital funds that are necessary.
    And then the third element is invest in opportunities that 
create jobs, further job opportunities, education, and 
supportive services. I firmly believe that affordable housing 
is a platform to improve the lives of the families who are 
served, and I have seen firsthand that quality affordable 
housing coupled with services and resources enables families to 
do better.
    Mr. Williams. Thank you.
    And let me move on. As I was preparing for this hearing, I 
was given an article on what the Dallas Housing Authority, 
which neighbors the district I represent in Texas, was doing to 
change the model for how housing vouchers are currently being 
used by low-income families. And when I read that--I support 
new ideas and new concepts like they talk about; I am not so 
sure that this may be the answer.
    So my question to you, Ms. Ramirez, again--and it came out 
of The New York Times. In that article published on July 7th, 
entitled, ``Vouchers Help Families Move Far From Public 
Housing,'' it was reported that housing vouchers were created 
in the 1970s to help poor families and their children escape 
from public housing, but they largely failed to improve the 
prospects of their recipients. Many of the 2.2 million 
households that are receiving them at any given moment, 
particularly minorities, remain clustered in low-income 
neighborhoods in what amounts to virtual housing projects.
    So three questions, really quickly. Do you agree with the 
statement reported by The New York Times?
    Ms. Castro Ramirez. I agree with the fact that the housing 
choice voucher program provides families opportunities to 
access communities of opportunity.
    Mr. Williams. Second, to what extent does HUD measure how 
families and children escape public housing and improve their 
prospects?
    Ms. Castro Ramirez. We do have very specific measurements 
within our Family Self-Sufficiency Program and also within our 
Jobs Plus program.
    Within public housing and the Section 8 housing choice 
voucher program, while families and children are participating 
in the program, as we all know, we are required to ensure that 
adequate subsidy is being provided, and we track and ensure 
that families are being served through the rental assistance 
programs that we provide.
    Mr. Williams. Okay.
    And, lastly, do you believe that HUD has made progress in 
the last 20 years in improving the lives of families receiving 
housing assistance?
    Ms. Castro Ramirez. I do believe that HUD and specifically 
the Office of Public and Indian Housing has improved the lives 
of the families that we serve. As I stated at the beginning, we 
have increased rental housing assistance from 400,000 in 1965 
to 4.6 million in 2015.
    And, beyond that, we have also established some very 
important and innovative and interagency collaborative efforts, 
such as the partnership that we have with the VA that enables 
us to house veterans who are homeless. In fact, this is a 
priority for this Administration, and it is a priority for our 
Secretary and for our Department. And the progress that we are 
making is significant. There has been a drop of 33 percent in 
homelessness among veterans in the last 4 years.
    Mr. Williams. Thank you. If you haven't read that article, 
it is a good article to read. Thank you for your testimony.
    Mr. Chairman, I yield back.
    Chairman Luetkemeyer. I thank the gentleman for yielding 
back.
    And we go to the ranking member, Mr. Cleaver, for some 
follow-up. You are recognized for 5 minutes.
    Mr. Cleaver. Thank you, Mr. Chairman.
    Are we involved in any efforts to make improvements in the 
housing voucher program? And what are the deficits that you see 
now? Either of you, Mr. Garcia-Diaz or Ms. Ramirez?
    Ms. Castro Ramirez. Yes, Representative--
    Mr. Cleaver. Let me--I--
    Ms. Castro Ramirez. Yes.
    Mr. Cleaver. I have a rural county, Saline County. I was 
stunned to find out when the head of the economic development 
corporation there said that they had over 1,000 homeless people 
throughout 2 of the rural counties, Lafayette and Saline 
Counties, which means nothing here, but homelessness is still a 
very serious problem. And it is no longer just an urban 
problem.
    But the problem is we have very little effort in the rural 
parts of the country to deal with the homeless issue. And so, 
if you can tell me the deficits. I would also like to know 
about how we can expand these programs to the rural areas 
successfully.
    Ms. Castro Ramirez. Yes, Representative Cleaver.
    As it relates to the housing choice voucher improvements, 
there are a number of efficiencies and improvements that have 
been instituted, including being able to track information on 
units that are leased and ensuring that we are providing 
funding that is very close to what the utilization has been by 
producing more accurate data, more reports to the public 
housing agencies, and monitoring their utilization rate.
    In fact, two-thirds of the staff who are in PIH are out in 
the field, on the ground, working closely with PHAs to ensure 
that the housing choice voucher program is serving the needs of 
the jurisdictions that they serve.
    As it relates to rural housing and, more specifically, I 
would say, as it relates also maybe to Native American 
communities, one of the things that we are doing is, largely 
because of the recommendation from the GAO with regard to 
improvements, we have created a series of resources including a 
Web site that is very robust in speaking to best practices and 
opportunities for Native American communities to leverage their 
existing Federal resources to create more housing. We also have 
focused our training and technical assistance to build greater 
capacity, because we know that there is ongoing need for 
additional resources across Indian country.
    Mr. Garcia-Diaz. And I would add three areas that I would 
see where improvements could be made in the voucher program.
    One is certainly continued oversight of the PHAs to ensure 
that they are managing their programs as effectively as 
possible, that they are utilizing, using, as many of those 
vouchers as possible.
    The other area is administrative streamlining. I think 
there are a lot of opportunities there to turn a very 
complicated program into something that is a little more 
simple. And PHA staff can actually, rather than worry about 44 
income exclusions and deductions, they can look at how they can 
perhaps do outreach to landlords to help success rates for the 
voucher program. So, aside from the administrative 
efficiencies, I think there are potentially some positive 
spillover effects for the tenants.
    And then, finally, understanding how vouchers in a service-
rich environment, what kind of impact that might have on 
tenants, in particular to the FSS programs and other 
initiatives that may be happening under the MTW program. 
Voucher traditionally is one that has been viewed as being just 
housing, just rental assistance, but this combination of 
service coordinators or case management seems to have some 
potential to, in some cases, break the poverty cycle.
    Mr. Cleaver. I don't think we will have time for an answer, 
but one of the things that I have observed with the housing 
voucher program is you still end up essentially putting people 
in virtually the same area. I think when the program was 
started, there was this belief that you can have what we have 
euphemistically called scattered site housing. I am not sure 
that does it, because of the cost difference in the various 
parts of the community. I am not sure I know how to solve that 
problem.
    Thank you.
    Chairman Luetkemeyer. The gentleman yields back.
    With that, we go to the gentleman from Minnesota, Mr. 
Ellison, for 5 minutes.
    Mr. Ellison. Allow me to thank the Chair, and the ranking 
member, and the witnesses today.
    Mr. Garcia-Diaz, sir, I want to thank you and the GAO for 
doing some good reports about CDFIs. And the GAO did report, as 
you noted, it found that collateral restrictions--well, let me 
put it like this. Did the GAO report find that the collateral 
restrictions discouraged some non-depository CDFIs from joining 
the Federal Home Loan Bank?
    Mr. Garcia-Diaz. Yes, that is correct. We interviewed 
Federal Home Loan Bank officials and interviewed individual 
CDFIs and asked them about the range of challenges they face in 
not only becoming members of the Federal Home Loan Bank System, 
but also obtaining low-interest-rate advances to help finance 
some of the economic development activities that they 
undertake.
    And one of the key challenges to obtaining advances was 
that CDFIs didn't have the eligible collateral. They tend not 
to hold mortgage-related assets. They hold small-business 
loans, for instance. And so non-depository CDFIs are not 
subject to the same exception that some smaller banks enjoy 
under the Federal Home Loan Bank System.
    Mr. Ellison. What good for community development could come 
if CDFIs were allowed to pledge non-mortgage collateral?
    Mr. Garcia-Diaz. In theory, it should expand their capacity 
to lend for the CDFI purposes of community development. And the 
Federal Home Loan Bank advances are a good source of capital 
financing assistance for these institutions.
    Mr. Ellison. So, me and my Republican colleague Steve 
Stivers of Ohio have a bill called the Small Business and 
Community Investment Expansion Act of 2015, and we are looking 
for cosponsors. Thank you.
    Anyway, Ms. Ramirez, thanks for your excellent work, and I 
am glad to have a chance to talk to you about affordable 
housing. I know, in my own district, we have a lot of problems. 
I am sure you are not surprised.
    Experts say that about 80 percent of families earning below 
$30,000 a year pay more than half their income in housing. 
There is a shortage of more than 7 million affordable rental 
homes in low-income. Nationwide, only one in four eligible 
families receive housing assistance. And in my own town of 
Minneapolis-Saint Paul area, there are more than 14,000 
families waiting for housing assistance.
    Can you talk about the critical role that HUD's Public and 
Indian Housing plays in providing affordable rental housing for 
the lowest-income Americans?
    Ms. Castro Ramirez. Thank you very much, Representative 
Ellison, for your question about the importance of continuing 
to preserve and expand affordable housing.
    As it relates to the Office of Public and Indian Housing, 
one of our core goals and priorities is to ensure the 
preservation of existing resources, because, as you pointed 
out, there is a growing need. In fact, at this point in time, 
we are only able to serve one in four income-eligible 
households.
    Beyond the core public housing and housing choice voucher 
programs, many investments also have occurred in the 
redevelopment and creation of mixed-income communities by 
public housing agencies in partnership with HUD and other 
public and private developers or partners. Specifically, I 
think that it is important for us to continue to invest in the 
Choice Neighborhoods initiative that has demonstrated 
successful models to redevelop and attract private investment.
    Mr. Ellison. Thank you, ma'am.
    And I just would like to ask you to offer your views on 
this issue. Sometimes in this body we talk in terms of cultures 
of dependency and how HUD programs and programs like it create 
dependency and thereby somehow harm low-income people. But my 
experience has been that, when people get an opportunity for 
some housing assistance, that puts them in a position to really 
move on to more self-dependence, independence.
    Do you have any views on this issue?
    Ms. Castro Ramirez. Representative Ellison, I completely 
agree with you.
    I started my work in public housing working at Imperial 
Courts in South L.A., leading a program called the Jobs Plus 
National Demonstration Program. And I saw firsthand that 
families desire and are working to improve their lives, and, if 
appropriately supported and provided with the resources, they 
will take advantage of that.
    And, in fact, the Jobs Plus National Demonstration Program, 
which ran over 5 years, is an evidence-based program that 
demonstrated that investing in families, providing greater 
opportunities to jobs, and creating a community that supports 
work has an impact in improving the quality of life and the 
trajectory for families.
    So I think it is important to acknowledge that the housing 
programs that we provide are not being just simply delivered to 
families; families are actively engaged in improving their 
lives.
    Mr. Ellison. I have to yield back now, but I want to thank 
you both for being awesome public servants.
    Ms. Castro Ramirez. Thank you.
    Chairman Luetkemeyer. The gentleman's time has expired.
    With that, I will wrap up the questions for today.
    And I want to just mention that, Ms. Ramirez, you have your 
son with you this afternoon--
    Ms. Castro Ramirez. Yes.
    Chairman Luetkemeyer. --Jorge. Is that right?
    You are a student at the University of Boulder; is that 
right? I have a daughter who lives in Denver--it is a great 
place out west, right? Very good. Well, welcome.
    Ms. Castro Ramirez. Thank you.
    Chairman Luetkemeyer. And I didn't realize that until now.
    I have a couple of questions. Ms. Ramirez, to start with 
you, I know that in one of the documents with regard to some of 
the planning that you were doing, you intended to raise or 
proposed to raise the minimum rent from what was $50 up to 
$135.
    Can you expand on that a little bit--why were you going to 
do that, how you were going to structure that?
    Ms. Castro Ramirez. Currently, there is a study that is 
under way that involves five Moving to Work agencies that will 
enable them to test out various rent reforms, including whether 
or not raising the minimum rent would improve and save funds 
but also not impact families.
    Our current policy is--we are at a $50 minimum of rent, but 
local jurisdictions and PHAs, based on the needs, based on the 
population they are serving, establish whether it needs to be 
adjusted downward.
    I think one of the things that is important to point out, 
Chairman Luetkemeyer, is that in the programs that we 
administer, both the housing choice voucher program and the 
public housing program, families are contributing to the cost 
of rent. Thirty percent of their income goes towards rent. And 
so I just want to reemphasize that there is a 30 percent 
requirement.
    Chairman Luetkemeyer. Okay.
    One more question for you, and then we will get to Mr. 
Garcia-Diaz here. Very quickly, what is HUD's perspective on 
the stakeholder agreement on Moving to Work that was created in 
2012 by then-Secretary Donovan with regard to public housing 
authorities and advocacy groups?
    Ms. Castro Ramirez. Our current proposal is, as I mentioned 
earlier, we are working and in discussions with the 39 MTW 
agencies to improve the agreements moving forward. We also have 
in the President's budget a request for a modest increase in 
the number of MTW agencies--
    Chairman Luetkemeyer. Can you specifically direct your 
comments to the stakeholder agreement?
    Ms. Castro Ramirez. I think one of the important aspects of 
the stakeholder agreement was ensuring that there is proper 
evaluation and monitoring. And so those elements are included 
and embedded in the extension agreement--
    Chairman Luetkemeyer. Does HUD still support the 
stakeholder agreement, is the question.
    Ms. Castro Ramirez. We have adopted and included elements 
of the stakeholder agreement in our existing discussions with 
the 39 MTW agencies.
    Chairman Luetkemeyer. Okay. That really doesn't answer it.
    Mr. Garcia-Diaz, as a GAO oversight specialist here, with 
regards to the PIH, specifically that group, can you point out 
the weaknesses that we need to be concerned about as a 
committee?
    Mr. Garcia-Diaz. For PIH, the three areas I would focus on 
would be monitoring and oversight of the public housing 
agencies, modernization and streamlining, and performance 
measurement and evaluation. HUD needs to ensure that they are 
providing the support and oversight to ensure that funds are 
being used appropriately, that the programs at the local level 
are as effective as possible.
    The other area is modernization and streamlining. A lot of 
these programs are essentially legacy programs, either coming 
from the Great Depression or from the 1960s or the 1970s--
    Chairman Luetkemeyer. How do you streamline?
    Mr. Garcia-Diaz. And then streamlining.
    Chairman Luetkemeyer. Give me an example.
    Mr. Garcia-Diaz. Of streamlining?
    Chairman Luetkemeyer. Yes.
    Mr. Garcia-Diaz. Opportunities exist for streamlining in 
how it is administered. So, in the intake process, there are a 
lot of requirements in documenting people's incomes, and that 
takes a lot of time. In fact, a lot of those things take up 
almost half of the time of the PHAs, which is time that 
detracts from other things that might provide immediate 
supports to the tenant.
    Chairman Luetkemeyer. Okay. Very good.
    I was curious whether we had in report form some of your 
comments here. Do you have a study on that, or have you had a 
report out that we could look at?
    Mr. Garcia-Diaz. Yes. And I can send you the references.
    Chairman Luetkemeyer. Okay. Because I think it is important 
that we look at that.
    With that, I am out of time here, so let me be respectful 
of everybody else's time and move on. I would like to thank the 
witnesses for being here today.
    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 11:58 a.m., the hearing was adjourned.]

                            A P P E N D I X


                             July 10, 2015
                             
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