[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
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
U.S. GOVERNMENT PUBLISHING OFFICE
97-152 PDF WASHINGTON: 2016
________________________________________________________________________________________
For sale by the Superintendent of Documents, U.S. Government Publishing Office,
http://bookstore.gpo.gov. For more information, contact the GPO Customer Contact Center,
U.S. Government Publishing Office. Phone 202-512-1800, or 866-512-1800 (toll-free).
E-mail, [email protected].
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
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]