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


                   THE FUTURE OF HOUSING IN AMERICA:
                      FEDERAL HOUSING REFORMS THAT
                      CREATE HOUSING OPPORTUNITY

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

                                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

                               __________

                            OCTOBER 21, 2015

                               __________

       Printed for the use of the Committee on Financial Services

                           Serial No. 114-56
                           
                           
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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:
    October 21, 2015.............................................     1
Appendix:
    October 21, 2015.............................................    29

                               WITNESSES
                      Wednesday, October 21, 2015

The witnesses presented no oral testimony at this hearing. Due to 
  time constraints, the Members gave opening statements and 
  proceeded directly to questioning the witnesses. All of the 
  written statements that the witnesses submitted can be accessed 
  in the Appendix (see below)....................................

                                APPENDIX

Prepared statements:
    Bradley-Geary, Heather, Lead Developer, Supportive Housing, 
      The Vecino Group...........................................    30
    Burns, Laura, Board Member, National Leased Housing 
      Association................................................    32
    Craig, Evelyn E., President and CEO, reStart, Inc............    36
    Fischer, Will, Senior Policy Analyst, Center on Budget and 
      Policy Priorities..........................................    38
    Gawrilow, Hilary Swab, Director, Federal Policy, Corporation 
      for Supportive Housing.....................................    47
    Kelly, Kevin, 2014 Chairman of the Board, National 
      Association of Home Builders...............................    50
    Merritt, Stephen W., Executive Director, Norwood Housing 
      Authority, and President, National Association of Housing 
      and Redevelopment Officials (NAHRO)........................    57
    Polychron, Chris, 2015 President, National Association of 
      REALTORS..................................................    62

              Additional Material Submitted for the Record

Luetkemeyer, Hon. Blaine:
    Letter from the Corporation for Supportive Housing, dated 
      October 21, 2015...........................................    78
    Letter from the Housing Assistance Council, dated October 20, 
      2015.......................................................    80
    Letter from the National Multifamily Housing Council and the 
      National Apartment Association, dated October 20, 2015.....    81
    Letter from representatives of the real estate industry, 
      dated October 20, 2015.....................................    83

 
                   THE FUTURE OF HOUSING IN AMERICA:
                      FEDERAL HOUSING REFORMS THAT
                       CREATE HOUSING OPPORTUNITY

                              ----------                              


                      Wednesday, October 21, 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 2:01 p.m., in 
room 2128, Rayburn House Office Building, Hon. Blaine 
Luetkemeyer [chairman of the subcommittee] presiding.
    Members present: Representatives Luetkemeyer, Pearce, Ross, 
Barr, Rothfus, Williams; Cleaver, Capuano, Clay, Green, 
Ellison, Beatty, and Kildee.
    Also present: Representatives Sherman and Carney.
    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. 
And unfortunately, they just called votes, so we may call a 
recess here in about 5 or 6 minutes. As a matter of fact, they 
have already called votes, and we are down to 12 minutes left 
in the vote.
    I think what we are going to do is, myself and Mr. Cleaver, 
the ranking member of the subcommittee, will give our opening 
statements. We will then recess. We have 4 votes, which will 
probably take about 40, 45 minutes. Then, we will come back, 
and at that time we will begin the discussion, and we can begin 
the questions.
    So with that, let me just continue on. Today's hearing is 
entitled, ``The Future of Housing in America: Federal Housing 
Reforms That Create Housing Opportunity.'' Before we begin, I 
would like to thank the witnesses for appearing before the 
subcommittee today. We look forward to your insightful 
comments. I now recognize myself for 3 minutes to give an 
opening statement.
    This panel represents a diverse cross section of the 
housing community. We have a REALTOR, a home builder, a 
nonprofit executive, a public housing authority director, a 
witness who specializes in affordable housing development, and 
housing policy experts. There is a common bond that links these 
individuals: the mission to provide housing to Americans and to 
provide the foundation for better lives and build better 
communities. Many of these witnesses share another commonalty, 
the desire to see changes in Federal programs so they can more 
easily serve the families in need. That is why this committee 
solicits organizations like the ones represented today for 
ideas on how to cut red tape, and replace it with opportunity.
    I am proud to have introduced H.R. 3700, the Housing 
Opportunity Through Modernization Act of 2015. I will be the 
first to point out that this legislation won't necessarily 
change the world. It won't end homelessness overnight, or meet 
the overwhelming need for affordable housing, but it is a first 
step in a long journey to reforming our housing system. We have 
to take a first step before we can get a second step. Right? 
This bill came to be because of the input provided by many of 
you, and I thank you for your participation.
    My legislation doesn't include everything I want. I 
recognize that it doesn't include everything the minority 
wants, or that housing advocates want. But it does represent an 
opportunity to show that despite rhetoric and what goes on 
around here daily, Congress can work together, and in 
collaboration with a diverse group of stakeholders, to foster a 
positive change.
    Also, I want to point out that Chairman Hensarling has 
asked for additional ideas in the fight against poverty and for 
a reformed housing system. I know the chairman wants to hear 
ideas from different points of view in different parts of the 
country. This is another opportunity to make your voice heard 
and participate in the process, and I encourage you to take 
advantage of it.
    Tomorrow morning, the full Financial Services Committee 
will hold a hearing to examine 50 years of HUD, and the impact 
the Department has had on our Nation. Fifty years later, too 
many Americans are in need, with too few resources to be had. 
We are past the time to act. It is my hope that the spirit of 
bipartisanship will last long enough, after H.R. 3700 has been 
signed into law, that we can all work together to discuss 
additional reforms to HUD and the Rural Housing Service.
    The status quo is no longer good enough. The majority of 
provisions in H.R. 3700 were agreed to years ago by advocacy 
and interested groups, and it is time Congress put these 
changes on the President's desk. I want to again thank the 
witnesses for appearing today, and we look forward to your 
discussion.
    With that, I recognize the gentleman from Missouri, the 
ranking member of the subcommittee, Mr. Cleaver, for 5 minutes 
for an opening statement.
    Mr. Cleaver. Thank you, Mr. Chairman. I appreciate the 
panel giving us your time, and in the spirit of trying to get 
there in time to vote, I won't take the full 5 minutes.
    I would like to associate myself with the comments of the 
chairman of the subcommittee. Political compromising means 
keeping your shirt on and still getting something off your 
chest, and I think that is what we have been able to do is to 
work through knotty problems, and we believe that we will 
reform, and HUD will perform.
    The way in which we have dealt with this legislation, I 
think, is a style that we need to use to get a lot of things 
done. Congressman Luetkemeyer and I don't think concurrently, 
but we do think collaboratively, and I think that is one of the 
benefits of us working together on this bill. And I do have a 
few remaining questions on the bill, but I do think that we 
will be able to work those things out, and I am grateful for 
this hearing and the opportunity to move forward on H.R. 3700.
    Thank you, Mr. Chairman. I yield back the rest of my time.
    Chairman Luetkemeyer. I thank the gentleman.
    It took two men from the ``Show Me'' State to show 
everybody that we can get things done and work together, and we 
are more than happy to do that.
    Again, we apologize to the distinguished panel of witnesses 
today. They schedule votes whenever they feel it is necessary, 
and as a result we have a duty that we are supposed to take 
care of, which is to go vote and take care of some of the 
business of the country, and of our citizens.
    So with that, we will recess until such time as the votes 
are concluded. Thank you.
    [recess]
    Chairman Luetkemeyer. Okay. I appreciate your indulgence. 
Sorry for the interruption, but we are back, and we will try 
and expedite this as quickly as possible. To do so, we are 
going to forego the oral testimony of all of the witnesses. 
Your written testimony was all handed out. We have read it 
already, and we are going to go straight to the questions. So I 
have a few comments to make, and then introductions, and then 
Mr. Cleaver has an introduction, and we will go right to 
questions.
    Today, we welcome the testimony of Ms. Laura Burns, board 
member of the National Leased Housing Association; Ms. Heather 
Bradley-Geary, lead developer for supportive housing, The 
Vecino Group; Ms. Evelyn Craig, president and CEO of reStart, 
Incorporated; Mr. Chris Polychron, 2015 president, National 
Association of REALTORS; Mr. Stephen Merritt, Norwood Housing 
Authority, on behalf of the National Association of Housing and 
Redevelopment Officials; Mr. Kevin Kelly, 2014 chairman of the 
board, National Association of Home Builders; Mr. Will Fischer, 
senior policy analyst, Center on Budget and Policy Priorities; 
and Ms. Hilary Swab Gawrilow, director of Federal policy, 
Cooperation for Supportive Housing. I apologize if I 
mispronounced any of your names. With a name like 
``Luetkemeyer,'' that happens to me regularly, and so my 
apologies. It never seems to bother me, but if it does you, I 
certainly apologize.
    Given the large number of witnesses, the ranking member and 
I have agreed to waive oral statements from the witnesses, 
meaning we are going to move directly into the questions.
    And without objection, your full written statements will be 
made a part of the record.
    Before turning to questions, I want to extend a special 
welcome to two Missourians on today's panel. Ms. Heather 
Bradley-Geary has long been an advocate for Missourians in 
need, and has dedicated her career to fighting homelessness, 
and ensuring that those in need, particularly children, have 
supporting housing options they need.
    Heather, thank you for being here today, and we look 
forward to your testimony. And now I turn to Mr. Cleaver to 
introduce Ms. Evie Craig, our other witness from Missouri.
    Mr. Cleaver. Thank you, Mr. Chairman. I take great pleasure 
in introducing Evie Craig from the State's largest City, Kansas 
City. Ms. Craig, as the chairman mentioned, is the executive 
director of reStart, Inc., which is an interfaith ministry 
serving homeless men, women, youth, and families in the urban 
center of Kansas City. She has been in this position for 13 
years, and I am very pleased that she has been there for 13 
years. We have been able to work together.
    She has grown reStart's annual budget from $1.3 million in 
2004, to $7.17 million in 2015, which also points out the 
severity of the issue of homelessness. And she serves on the 
Jackson County Mental Health Commission, the executive 
committee of the Greater Kansas City Regional Task Force on 
Homelessness, and is the local Chair of the 100,000 Homes 
Campaign to provide housing for vulnerable individuals and 
families, among her other distinguished accomplishments. Ms. 
Craig, we are pleased to have you here. Thank you, Mr. 
Chairman.
    Chairman Luetkemeyer. Thank you. And with that, I recognize 
myself for 5 minutes to begin the questioning.
    Obviously, all of you seem to be supportive of H.R. 3700, 
and I thank you for that. We have worked diligently to try and 
work with all the parties to come to an agreement on something 
that we can all find some support for, and along the way, we 
thank each of you for your help in getting to where we have 
gotten with this piece of legislation.
    I recognize there is more work to be done, and with that, I 
would like to ask what other things you would like to see in 
the bill, or any things you would like to, in particular, point 
out that are important to you? Let me start with Ms. Burns.
    Ms. Burns. Thank you, Chairman Luetkemeyer, Ranking Member 
Cleaver, and distinguished members of the subcommittee. My name 
is Laura Burns, and I am here on behalf of the National Leased 
Housing Association. I am also a national affordable housing 
developer with 14 properties in Missouri and 2,000 units, so I 
am proud to own properties in your great State.
    Chairman Luetkemeyer. And that is a great decision, I can 
tell you.
    Ms. Burns. Some of the things that we think are really 
important in this bill that are really helpful, the steps might 
seem small to some but they seem quite material to us. The 
inspection standards changes that is included in the bill is 
very important to us.
    Our company provides housing through project-based 
contracts, through housing choice vouchers, through project 
voucher contracts, and through tenant vouchers. And some of the 
changes that are proposed in both the inspection standards, the 
recertification of fixed-income residents being allowed every 3 
years, and the increased flexibility to the project-based 
voucher program will make a big difference.
    We have a property, for instance, in St. Louis with a 
housing choice voucher contract, and some of the program 
changes that are included here would have really made a 
difference to how efficiently this property operated over the 
years. We are in year 12 of our contract and have experienced 
many of the things that this bill looks to address, including 
significant delays in occupancy as a result of inspections; 30 
days is very normal. Sometimes, we see as long as 90 days 
before a new resident can move in.
    Site-based waiting lists are really important when the list 
is so long, and the rent increase process of having certainty 
in how the program is going to work when you marry that with 
the low income housing tax credit program, those are really 
helpful to our industry and to doing future deals.
    Chairman Luetkemeyer. Thank you. Ms. Bradley-Geary?
    Ms. Bradley-Geary. Thank you. I agree with Ms. Burns. There 
are a lot of great things in H.R. 3700, but I want to focus 
specifically on the Family Unification Program (FUP) vouchers, 
which has a horrible acronym, so I apologize. These are 
vouchers for our young adults who are leaving foster care, and 
I stand before you with three hats. I am a supportive housing 
developer who does a lot of development for young people who 
are aging out of foster care.
    I am also a foster care parent. Both of my kids are adopted 
from the foster care system in Missouri, and I am also a social 
worker. So, as you know, we have 23,000 kids, young adults who 
leave foster care every year. One in five of those are going to 
become homeless if we don't do something to stop that.
    Chairman Luetkemeyer. Is there anything that we can do or 
change, do something different to--
    Ms. Bradley-Geary. I believe--
    Chairman Luetkemeyer. --improve it or--we are taking a 
first step here. What is the next step we need to take?
    Ms. Bradley-Geary. Absolutely. I believe you have added the 
language in the bill that we are asking for, and that is to up 
the time from 18 to 36 months if the voucher is eligible for 
the youth, and then also to up the age from 21 to 24 for our 
youth who are aging out of foster care to be eligible for those 
vouchers.
    Chairman Luetkemeyer. What is the reason for jumping the 
age from 21 to 24?
    Ms. Bradley-Geary. A lot of our kids leave the foster care 
system, and they still need the support up to age 24--I will 
use myself as an example. I had a safety net as a child that my 
parents were there when I was making bad decisions. These youth 
do not have a safety net. If we up the age to 24, we are able 
to catch a lot of those youth in those 3 years who do not have 
a safety net, so that allows us to give them that.
    Chairman Luetkemeyer. How many kids are we talking about 
here who utilize this, that you anticipate utilizing it, how 
many kids do you anticipate utilizing these vouchers?
    Ms. Bradley-Geary. Using the vouchers? In Missouri alone, 
our estimates come in at about 1,800 kids who are aging out, 
about one-fifth of those, so that would be 374 youth who would 
be eligible for those, and that is just Missouri.
    Chairman Luetkemeyer. This is a very important issue to me 
because I think that this is an area where we can actually make 
a difference.
    Ms. Bradley-Geary. Absolutely.
    Chairman Luetkemeyer. I see I am about timed out. Let me 
stop here and I will--
    Ms. Bradley-Geary. Thank you.
    Chairman Luetkemeyer. --thank you for your testimony. I now 
recognize the gentleman from Missouri, Mr. Cleaver, the ranking 
member of the subcommittee, for 5 minutes.
    Mr. Cleaver. Thank you. I know many, if not almost 
everybody on the panel, and I appreciate all the work that you 
all have done over the years, but I want to send this question 
to Ms. Craig and Ms. Gawrilow.
    I can see in your facial expression how much you wish you 
were still here and sitting up here. But your advocates for 
foster care youth and you championed for changes to help 
improve housing services for young adults, and Ms. Craig, you 
were saying in your statement that more than 800 young adults 
aged out of the foster care system in Jackson County. How has 
the family unification program in our proposed bill been 
helpful in addressing the needs of our foster youth?
    Ms. Craig. I'm sorry, did you want me to answer first, 
Congressman?
    Mr. Cleaver. Yes.
    Ms. Craig. I wanted to say, though, the Royals do play 
today.
    Mr. Cleaver. Yes. Oh, my goodness.
    Ms. Craig. So we are up against some very--
    Mr. Cleaver. We need to get out of here.
    Ms. Craig. --important--just saying. This happened to me 24 
hours ago at the city council testifying before the mayor's 
legislative committee, so it brought good luck, so we can only 
hope, right. So sorry.
    Presently, there are lots of barriers to young adults, and 
specifically young adults in foster care, getting access to 
these housing resources, and transition age is a very, very, 
important time because we are looking at young people who 
haven't had some normal developmental supports, and 
developmental growth is critical to successful adulthood.
    So this opportunity to have stable housing, and I think one 
of the provisions that I understand is--this may seem like a 
technicality, but it is huge in the life of a young adult--the 
opportunity to get access to a housing voucher 90 days before 
you are out of the system. That means, ta-da, it is amazing 
that you can get services and housing simultaneously for a 90-
day period while you wait on that cusp of being independent.
    That is the kind of support that many people get from their 
families or extended families, and a lot of the young people 
that we work with don't have that. They do, as we see, fall not 
only into homelessness but don't graduate from high school, or 
46 percent are unemployed by the age of 24, and what really we 
end up saying to them is, quite frankly, if you wait long 
enough and you are homeless long enough, we will get you 
housing just in time to die.
    We need to be able to use our Federal housing resources to 
get young people into housing in order to live their life to 
its fullest potential, and that is where I really feel very 
strongly that this bill, it may seem regulatory in nature, I 
don't know, but I see it as having the capacity to have an 
amazing impact on the future of our country because these young 
people have that opportunity, but only if they can get some of 
these resources.
    And I think what is for all of us, and we have been talking 
a little bit as we are here, we work in the world, some of us, 
of the red tape and the regulations, and there are things that 
no one--never by intent did anyone mean to put a barrier in 
front of a young child exiting foster care, but it is there 
nonetheless because of the inability of agencies to work 
together or us to be able to provide the resources. So I think 
the flexibility that has been added into the language around 
FUP has the possibility to be really simply transformational.
    Mr. Cleaver. Thank you. Ms. Gawrilow?
    Ms. Gawrilow. Yes, thank you. I would just like to kind of 
echo what Evelyn was saying, but I also think--I agree that 
aligning the transition plans that youth have when they are 
aging out of foster care, they are supposed to have a 
transition plan for 90 days prior to when they leave care, and 
this would align that, the resources with the plans that they 
have, and make sure that the voucher can be built into the plan 
so they are not having a lapse in housing.
    The other thing that I think is really important is the 
guidance between HUD and HHS and having them work together to 
help housing authorities work with their local child welfare 
agencies to improve referral processes, to improve access to 
supportive services for the young adults who are receiving 
these vouchers.
    So I do think the changes contemplated are really 
important, and I think that they will provide that housing 
stability and right away as opposed to what Evelyn was saying 
is when young adults fall into homelessness after leaving care 
and then they come back into stable housing situations.
    Mr. Cleaver. Thank you. I yield back, Mr. Chairman.
    Chairman Luetkemeyer. I thank the gentleman. We are looking 
to put that in the bill. We thank you for that suggestion, and 
we also are looking to add the--my sharp staff who keep talking 
in both ears at the same time, so unfortunately, I can only 
hear out of one at a time, but we are looking to do that as 
well. So we thank you for those suggestions, and keep them 
coming.
    With that, we go to the gentleman from Texas, Mr. Williams, 
for 5 minutes.
    Mr. Williams. Thank you, Mr. Chairman, and also thank you 
to the witnesses today for being here. I appreciate seeing you. 
The Section 8 housing voucher concept can be one of the most 
successful public/private initiatives, but as with many other 
government programs, it has started to sag under the weight of 
too many burdensome and duplicative requirements. The Housing 
Modernization Act will make important changes that will improve 
the program for all stakeholders.
    My question will be to you, Mr. Merritt, what do you think 
are the most critical problems facing the assistive housing 
portfolio and how will the proposed legislation make 
improvements?
    Mr. Merritt. Thank you. I just want to speak to that. This 
is a great bill for us, and it is a start to fix some of those 
problems that you bring up, Mr. Congressman. A couple of 
things: increasing the percentage of the limitation on the 
voucher program for project-based vouching will be critically 
important to us to help populations who are underserved now, 
such as persons with intellectual disabilities, which I have 
done a project in my hometown on.
    There is a whole population out there of young people aging 
up over 22 who are in need of housing with supportive services, 
and the project-based voucher extension would allow us to serve 
more of those individuals who will need help for a long time. 
It also, the idea of triannual rent redeterminations will take 
away some of the administrative burden that we would have 
having to renew rents every year for people who are on fixed 
incomes. The rent doesn't change. We are doing recertifications 
for rent that might change $2 or $3 either way, and that is 
really a waste of a lot of time and effort that could be used 
for other more productive issues.
    The other is the fair market rent issue is becoming a 
problem, and by allowing us to raise the percentage of fair 
market rent that we are able to up to 120 percent would be very 
important, particularly in high-income areas, high-rental areas 
like where I am in the Boston area.
    Mr. Williams. Thank you.
    Mr. Kelly, steps have already been taken to eliminate 
duplicative inspections through the budget process for assisted 
housing funded with multiple subsidies, and H.R. 3700 further 
streamlines the effort by permitting immediate tenant occupancy 
if the unit has been inspected under the Federal housing 
program with the same stringent standards.
    Would you help us understand the financing challenges 
associated with affordable housing, and does this mean that in 
order for affordable housing to exist and/or be developed, an 
owner must find multiple sources of capital to develop these 
properties?
    Mr. Kelly. Thank you, Congressman. I am representing the 
National Association of Home Builders, but I am a builder/
developer, I own and operate some 5,000-plus units of 
affordable housing, and I have developed over 11,000 units. 
Securing financing for affordable housing is an extraordinary 
challenge and becoming more so each and every day. I use both 
Section 8 project-based assistance. The vouchers are critically 
important in the development of new properties, primarily the 
low income housing tax credit where State housing finance 
agencies, their communities decide to target lower-income 
families below 50 percent of median income, so those vouchers 
make it critically important in order to secure the financing.
    Those transactions also have a multiple number of financing 
sources besides the debt, the tax credits, often funds from the 
Federal Home Loan Banks, or home funding, but again, often, if 
the targeting is such to very-low-income families, the vouchers 
are critically important in order to make the transaction 
feasible.
    Mr. Williams. Thank you. Mr. Chairman, I yield back my 
time.
    Chairman Luetkemeyer. The gentleman yields back his time. 
With that, we go to the gentleman from Texas, Mr. Green, for 5 
minutes.
    Mr. Green. Thank you, Mr. Chairman, and may I please take a 
moment of my time to thank you and the ranking member for 
working together on this piece of legislation. I think it is 
exceedingly important, Mr. Chairman, and it has bipartisan 
support.
    This is one of those times when I think we can say that we 
are working together for the good of our country, and I 
appreciate you very much. And I thank you, also, Mr. Ranking 
Member. You have been a real friend to those who are in need of 
housing in this country, and I appreciate both of you.
    Mr. Chairman, if I may say this, I also would like to speak 
on behalf of 420 Members of Congress. That is the number who 
voted for the Homes for Heros Act in the 113th Congress, and I 
am proud that you have made Section 403 of this legislation, 
you have dedicated it to the Homes for Heroes legislation. The 
Homes for Heroes legislation would place a person in HUD whose 
job it is to look out for veterans. This person would help us 
to prevent persons from becoming homeless, veterans and their 
families, and also to provide some relief for those who may be 
homeless.
    We believe that those who are willing to risk their lives 
for this country merit the very best that we can offer, and I 
think that we can do more. I think this legislation will help 
us to help our veterans who are in poverty, homeless, and those 
who may be falling into poverty and homelessness.
    I would also mention to you, Mr. Chairman, that I am 
concerned about people who are waiting in line for housing. 
Most of the housing authorities across this country have 
persons who are standing in very long lines to get help, and as 
you know, we have, as of late, seen news stories about persons 
who are over income and still receiving a housing subsidy, as 
it were.
    Perhaps they are paying the max that they can be required 
to pay, 80 percent of the AMI, but they are still over income. 
Some of them are over income by a wide margin. My concern is 
this: We have people who are standing in line who need this 
housing. Many have been in line for years literally, not 
figuratively, for years, and we have persons who are over 
income who are in public housing. The public perception is that 
as you move up, you move out. You move up, your income is 
better, and you move out. I am appreciative that you are 
attempting to address this issue in this piece of legislation.
    We cannot allow the perception to be that this benefit is 
for the greedy as well as the needy. It is not for the greedy. 
It is for needy people. And those who are standing in line are 
of concern to me. I want to make sure that they have the 
opportunity to benefit from good decent housing just as the 
people who are there currently are. And there is much more that 
we can do. I am not a person who believes that we have done all 
we can do, but I am a person who believes that we have to give 
some thought to those who are in line, those who need this 
housing.
    So I am appreciative that the legislation addresses this. 
There may be some tweaking to it. I am amenable to working with 
you, Mr. Chairman, and Mr. Ranking Member, but this is 
something that I think is of paramount importance. And finally, 
if I may say this as I close, across the length and breadth of 
our country, there are people who are working hard to help 
those who are homeless. People do a good job every day, and now 
I am talking about the housing authorities.
    I find that too often they take heat for things that they 
are trying their best to do properly and to do correctly, and I 
just want to say to them, please, continue to do the good work 
that you are doing. The criticism that you get is something 
that sort of comes with the job, but there are just so many who 
are doing a good job, public servants all, working hard for the 
persons who are in need of housing.
    With that said, Mr. Chairman, I thank you again, and I will 
yield back the balance of my time.
    Chairman Luetkemeyer. The gentleman yields back the balance 
of his time. Next, the gentleman from New Mexico, Mr. Pearce, 
is recognized for 5 minutes.
    Mr. Pearce. Thank you, Mr. Chairman. I find myself agreeing 
with Democrats frequently on many things, but now I am in the 
awkward position of finding myself agreeing with a Texan on 
some things, so I would agree with the gentleman as he said 
thanks to our ranking member and to our chairman for the work 
that they have done.
    We began this sort of reform work, I guess you would call 
it, with Native American housing about 3 years ago. One of the 
things that we found is that the reforms were fought by HUD 
more than anybody else. Is that something that you would sort 
of ring true, and just do a head shake because I have a couple 
of more questions. Head shakes up and down, or no, yes, no, 
yes. So yes, the agency is resistant to anything that makes the 
system work better, and we are not going to overcome that 
unless you all start calling your Members of Congress to go in 
and sit with them.
    Through lengthy processes, HUD actually began to see what 
we are doing, as not a threat, but as a benefit, but I suspect 
we are going to have to do the same thing here. And so as you 
bump up against those physical stops, those emotional stops 
inside the agency, just consider it worthwhile to get one of us 
to sit down, you come in, and I think anybody on either side of 
the aisle, anybody on the committee would be happy to sit and 
reason through with HUD the reasons for doing these.
    So again, I appreciate all your passions here working in 
your particular areas. My question for Mr. Kelly has to do with 
rural housing. Obviously, New Mexico is a very rural State; 50 
percent of the housing in my district is in manufactured 
housing, so we are always struggling to improve the lot. What 
are the biggest challenges that are being faced for rural 
housing right now? Your testimony has things about that, so--
    Mr. Kelly. Thank you, Congressman. I am a developer and 
owner of 515 rural housing developments. I own approximately 18 
developments. I have acquired those under the RD demonstration 
program. This bill talks about making that permanent. I think 
that would be an extraordinary positive step forward.
    It is an enormous challenge. There is an inventory of 
housing out there that the country and private owners have 
invested in that has the ability to be preserved and maintained 
for decades to come with utilizing the right programs. It is a 
challenge. The incomes in rural areas are often depressed, but 
nonetheless, there is, I think, that program has demonstrated 
that it can be done and it certainly should be done to meet 
those crying needs because you rarely find the private lending 
institutions, or for that matter, FHA providing assistance in 
those areas.
    Mr. Pearce. Does the 515 need to be expanded or can the 
agency do that by itself? Does this legislation need expansion 
or--
    Mr. Kelly. I believe the program should be expanded because 
of the size of the portfolio.
    Mr. Pearce. Can it be done by the agency or does it need to 
be done in legislation, in your opinion? You have much more 
experience than most on us on the committee.
    Mr. Kelly. I would say probably legislatively.
    Mr. Pearce. Okay. Ms. Craig, the--you have a passion there 
for helping people who need help, and then you have heard again 
the gentleman from Texas talk about moving up, moving out. How 
big a problem is this prioritization of need? In other words, 
do people languish in the housing who should be out and on 
their own?
    Ms. Craig. I can't speak to it in general overall in terms 
of individuals who are in housing authorities, but I certainly 
will say that I think anything that clarifies and simplifies 
and provides more options for getting people off the waiting 
list to--housing authorities have preferences, but because 
there is such a backlog, that ends up not having an impact on 
the waiting list, which is frustrating to everybody.
    And when we went through sequestration, we were finding 
that in Kansas City, an 8-year-old child previously might be 
waiting 4 years to get into public housing, and with 
sequestration, that same kid might be waiting 12 years until he 
would have his own family--
    Mr. Pearce. I have a couple more. I only have 23 seconds.
    Ms. Craig. Sorry.
    Mr. Pearce. Ms. Gawrilow, would you happen to have an 
opinion, or Ms. Burns, either one of you all have an opinion 
about this moving up and moving out, how bad is the problem, 
how much could we improve it?
    Ms. Gawrilow. Yes. One thing that I think could help people 
who are in assisted housing or families and households who are 
in assisted housing is looking at the Family Self-Sufficiency 
Program, which is an asset building and financial capacity 
program that resides in HUD, and PHAs administer this program, 
and to better connect families to that program and families who 
are maybe higher in need. So maybe connecting the HUD-VASH 
recipients with it. You can connect families who are receiving 
the FUP voucher, in particular youth who are receiving the FUP 
voucher. This may be a great tool to help them as an additional 
service to increase their access to programs and services to 
lead to independence later on.
    Mr. Pearce. Thank you, Mr. Chairman. I yield back.
    Chairman Luetkemeyer. The gentleman yields back. Next in 
line, the gentleman from Minnesota, Mr. Ellison, is recognized 
for 5 minutes.
    Mr. Ellison. I would like to thank the chairman and the 
ranking member for putting together this bill to improve how we 
provide affordable housing, affordable rental housing to 
extremely-low-income families, to help home buyers purchase a 
condo. This is great. I appreciate it. The goal of today's 
hearing is to examine how the Federal Government can better 
provide housing assistance in the 21st Century. In light of the 
fact that incomes remain too low for many workers to afford 
market rate housing, we need to invest more Federal funds to 
address the rental housing crisis.
    While I support many provisions in the bill considered 
today, the real answer is to--I am, in my opinion, quadruple 
our investments in rental housing for extremely-low-income 
families. I have asked for Chart 1 to be shown on screen.
    Mr. Fischer, this chart is from the Center for Budget and 
Policy Priorities. Can you explain what it says about our 
rental housing crisis?
    Mr. Fischer. Sure. And I will say first, I think it is 
really important to move forward with the targeted changes in 
this bill, which I think are well-designed and would deliver 
real benefits to low-income people, but it is true that the 
challenges go well beyond what this bill can address.
    This chart shows--the blue line there is the number of 
families with what HUD calls worst-case housing needs, which 
means they are very low-income families who pay more than half 
of their income for housing or live in severely substandard 
housing, and that has gone way up. It is up more than 30 
percent since before the recession.
    The red line is the number of families with rental 
assistance, which has pretty much been stagnant, so this shows 
that the number of families struggling to afford housing has 
gone way up, but the programs that are best positioned to 
address that need have very much been treading water.
    Mr. Ellison. Thanks a lot. I would like to point out that 
nationwide, we have more than 1.3 million homeless children. In 
my own district, in the City of Minneapolis, which is a pretty 
well-to-do town, we have about 4,000 kids every day going to 
school from a shelter.
    Anyway, Mr. Fischer, let me show you Chart 2. We spend more 
than $270 billion a year on housing, $270 billion in housing in 
America. But this chart shows that the bulk of the investment, 
well, it is for better-off families. Can you explain the 
financial benefits families receive and who receives the most 
generous housing assistance? Because some people would have us 
believe that it is the very poor who get all the housing 
assistance. Is that correct?
    Mr. Fischer. When you include tax expenditures along with 
direct rental subsidies, the bulk, close to three-quarters of 
Federal housing expenditures go towards homeownership, and the 
biggest share of that is for deductions like the property tax 
deduction, and especially the mortgage interest deduction that 
go predominantly to higher-income families, and that is what 
this chart here shows. About three-quarters of the benefits 
from those deductions go to families with incomes above 
$100,000 and more than a third go to families with incomes 
above $200,000.
    Mr. Ellison. Okay. So yes, so this is three, and when we 
think of who receives housing benefits, we don't realize that 
high-income families receive 4 times more housing benefits than 
do low-income families. What should we do to right-size housing 
assistance, and I know you are familiar with my bill, the 
Common Sense Housing Investment Act, I would welcome your 
reflections on it, and your reflections on this chart.
    Mr. Fischer. I think what this chart shows is that it is 
cause for concern. Low-income people are much more likely than 
higher-income people to deal with problems like eviction and 
homelessness, which are bad for everyone but especially bad for 
children, as you mentioned. And part of what drives that is 
that Federal housing resources are targeted heavily on higher-
income families who could afford housing without help.
    I think that the issues that your bill raises, like looking 
at reforms to the mortgage interest deduction that would keep a 
large mortgage interest benefit in place but reducing it some 
for higher-income households and expand it for middle-income 
folks and generate some savings that could be used for other 
things, I think, is a sensible approach.
    Mr. Ellison. Thanks a lot.
    It looks like I am running out of time. Let me see if I can 
ask Mr. Polychron a question. Mr. Polychron, thank you for 
being here today. Allow me to ask you about marketing services 
agreements and control business arrangements. I read the 
REALTOR'S recent report, ``Definitive Analysis of Negative 
Game Changers Emerging in Real Estate.'' It is called the 
``Danger Report.'' It warns that many REALTORS are most likely 
in violation of TILA-RESPA rules regarding illegal kickbacks. 
When the title insurance agency is referred business through an 
affiliated business arrangement, where does the cost of the 
referral get absorbed? Who pays for it?
    Mr. Polychron. The Danger Report, as you may--and thank you 
for the question, sir, but the Danger Report was something for 
us to look forward that might happen. It isn't something that 
is actually happening. It is something that we are trying to 
prevent from happening. And marketing service agreements are 
certainly something that not only the DOJ looks at a lot but we 
have to be careful on how those are initiated. I can tell you 
that our association is constantly monitoring that to make sure 
that when we do any type of marketing service, that it is done 
properly.
    Mr. Ellison. Thank you, and I yield back the time that I 
don't have.
    Chairman Luetkemeyer. The gentleman is correct. His time 
has expired. With that, we go to the gentleman from 
Pennsylvania, Mr. Rothfus. He is recognized for 5 minutes.
    Mr. Rothfus. Thank you, Mr. Chairman. And I thank the panel 
for being with us this afternoon. I will address this first 
question to Mr. Kelly.
    In your written testimony, you note that it currently costs 
an apartment owner more to rent to a voucher holder than it 
does to rent to an unsubsidized resident. One of the reasons 
for this cost discrepancy is the program's burdensome and often 
duplicative inspections standards.
    Can you discuss some of the disincentives for renting to 
voucher holders?
    Mr. Kelly. Sure. The inspection process itself is one, 
certainly, sir. The uncertainty for a landowner or an apartment 
owner, when a prospective tenant approaches him with a 
certificate, or a voucher, and explains that their property has 
to be inspected by a public housing agency, they have to wait 
for that. The owner can't enter into the agreement at that 
point in time. It is subject to the inspection process.
    And, as I think has been indicated in some of the written 
testimony, those inspections can fail for such innocuous things 
as a torn screen. And those are the kinds of things that you 
don't keep secret in the private rental market. Owners know 
about it. They talk about it. So that is an example of the 
kinds of disincentives that are out there in the current 
administration of the program that dissuade private property 
owners from participating in the program.
    Mr. Rothfus. By consolidating inspection standards, is 
there any risk for increased fraud and abuse which would 
potentially place residents in unsafe housing?
    Mr. Kelly. I assume there may be, but I think, quite 
frankly, there is an expeditious process to follow up on the 
heels of that tenant being approved to live in that residence, 
and with an owner understanding that if in fact he has 
defrauded somebody, that will be caught relatively quickly, so 
I think it is extremely de minimis.
    Mr. Rothfus. Mr. Merritt, my district is home to many 
seniors living on fixed incomes, and some of these individuals 
receive housing assistance. As you know, H.R. 3700 permits 
income recertification for people living on fixed incomes every 
3 years as opposed to yearly.
    Clearly, this reform reduces burdens on residents by 
avoiding what can be a stressful and difficult yearly process. 
Can you comment on how this might impact housing providers and 
administrators?
    Mr. Merritt. I'm sorry, how it will protect, sir?
    Mr. Rothfus. How the moving from every 3 years on income 
certification to--I'm sorry, annual to every 3 years, can you 
comment on how this might impact housing providers and 
administrators?
    Mr. Merritt. Thank you for the question. The impact would 
be pretty immediate as to the decline--lower the workload for 
individuals and offices around the country. The caseload would 
go down, which would allow us to spend some time on other 
things that we have had to take time away from.
    And I would agree with you that the process of rent 
certification can be very stressful, particularly for seniors 
on an annual basis. I would also say they are also some of the 
most prepared when they do come into our office and it can be 
very easy, so the timeframe to do a residence, a senior 
residence rent calculation can take anywhere from 5 to 10 
minutes to an hour-and-a-half, depending on what their 
capabilities are and the medical deductions that are allowed 
and things.
    So, it is a burdensome administrative activity that would 
be reduced to every 3 years, and it wouldn't be--I would assume 
not every resident would come in on the same year. We would 
stagger it so it would reduce the monthly workload which frees 
up time that is actually not there anymore.
    Mr. Rothfus. Thank you. And I am wondering if maybe any 
panelists would want to comment on this: Section 109 of H.R. 
3700 creates flexibility of capital and operating fund amounts 
by allowing housing authorities in good standing to blend up to 
20 percent of their federally appropriated capital and 
operating funds. Does this create an incentive for public 
housing authorities to modernize their systems and operations 
so they can have greater flexibility and control moving 
forward?
    Mr. Merritt. I will answer that. Absolutely, affirmatively 
yes, it would help us to incentivize improving our systems. It 
allows us to have flexibility to spend that money either on a 
property issue that we are dealing with and may be short-
funded, or administratively in helping our offices maintain 
computer systems and things like that which come up every so 
often.
    So that would go both ways, that fungibility. It is an 
important tool to help complete capital projects that may need 
that little bit of extra cash that isn't available through the 
capital programs.
    Mr. Rothfus. I thank the chairman. I yield back.
    Chairman Luetkemeyer. The gentleman's time has expired. 
Next up is another gentleman from Missouri, the distinguished 
Mr. Clay. He is recognized for 5 minutes.
    Mr. Clay. Thank you, Mr. Chairman, and thank you, Mr. 
Cleaver also for conducting this hearing.
    Let me ask Mr. Polychron about HUD's 223f program. There 
has been a precipitous drop in the program, and it is because 
HUD changed the underwriting requirements 2 years ago. What has 
been the impact of HUD's underwriting changes to its multi-
family program?
    Mr. Polychron. Congressman, with your permission, I am 
going to defer that to Ms. Burns. I don't do rentals. I am 
being honest with you.
    Mr. Clay. I see.
    Mr. Polychron. It is you either do rentals when you are a 
REALTOR or you don't, and I am going to defer to Ms. Burns, 
with your permission.
    Mr. Clay. Ms. Burns, could you--
    Ms. Burns. Sure.
    Mr. Clay. --talk to me about what has been the impact on 
the program?
    Ms. Burns. It is hard to know specifically what could cause 
that drop, but we do know how complicated it is to put together 
a transaction and to make all the pieces work in an affordable 
housing transaction.
    Every piece of the underwriting matters, and what we 
understand is that the movement to a longer-term view of 
replacement reserve needs has created a more difficult program 
to underwrite, and our understanding is that the change could 
be made back to a 10- or even a 12-year replacement reserve 
window, and that would make it more affordable for the 
developer to put that property together and to be successful in 
that transaction.
    Mr. Clay. So it is really then--the rule change has 
dampened the ability to develop those properties.
    Ms. Burns. It requires a much larger investment on the 
front end, which means that you don't have enough money to 
afford to do something else that may be more important.
    Mr. Clay. Thank you for that response.
    Let me go to Mr. Kelly with the Home Builders. Are you 
familiar with the 223f program?
    Mr. Kelly. I am, sir, and I have done a number of 
developments utilizing the program. But as Ms. Burns said--and 
I have done them typically in conjunction with repositioning a 
property, utilizing also the low income housing tax credits.
    The challenge we face is when that kind--those reserves are 
required up front, additional capital reserves up front, it 
simply leaves often inadequate resources to rehabilitate the 
project to meet not only sort of my standards, because I know I 
am going to be holding on to it for a long time, the investor 
standards, and also, in many instances, to meet local code 
requirements that continue to raise the cost of housing, while 
well-intended, often outstrip the ability of particularly of 
affordable housing developments to meet and, therefore, render 
the development infeasible.
    Mr. Clay. Mr. Kelly, in the best of all worlds, what would 
be a reasonable modification of this rule? If you had it your 
way and could go into HUD and direct them to change this rule, 
what would be a reasonable modification of the rule?
    Mr. Kelly. Again, a reasonable amount of reserve for 
replacement up-front, but also earned, over time, as was 
traditionally done. Put it into the reserves over time, because 
it is that large, up front cash investment that renders the 
project infeasible.
    Obviously, every project is slightly different, and 
depending on its physical condition, its market, that amount 
may vary, but there ought to be greater flexibility, depending 
on the particular circumstances, and that doesn't exist at the 
moment.
    Mr. Clay. And it has really dampened the ability to provide 
affordable housing to larger amounts of the population. Is that 
right?
    Mr. Kelly. It does, sir.
    Mr. Clay. Thank you so much for your responses.
    Mr. Chairman, I have no other inquiries, so I yield back.
    Chairman Luetkemeyer. The gentleman yields back. Next, we 
go to the gentleman from Kentucky, Mr. Barr, who is recognized 
for 5 minutes.
    Mr. Barr. Thank you, Mr. Chairman, and thanks for your 
leadership in introducing H.R. 3700.
    And to our witnesses, I want to first address the issue of 
continuum-of-care grants in combatting homelessness, and I 
think I will direct my question to Ms. Bradley-Geary and Ms. 
Craig on this one and anybody else who might want to jump in on 
this.
    As I understand it, the continuum-of-care program provides 
that if a grant is not fully expended in 24 months, the money 
is recaptured by HUD unless the Secretary re-allocates it to 
another entity serving in the same geographic area.
    We have had a problem with this in Kentucky, my home State 
of Kentucky, where two metropolitan areas, Lexington in my 
congressional district, and Louisville, are receiving 
continuum-of-care dollars, but in Lexington in my congressional 
district, that money goes out the door pretty quickly and we 
exhaust that funding, but we have had a situation where 
Louisville has had a surplus of funds, and instead of allowing 
a reallocation of those dollars to Lexington, which has a 
significant homelessness need, the Department recaptures that.
    H.R. 3700 does attempt to address that issue, fortunately, 
by clarifying geographic area, and my question to you all is, 
do you think facilitating the convertibility of unspent funds, 
unspent grant monies between qualifying grantees would increase 
access to fighting homelessness?
    Ms. Bradley-Geary. I can address that, and yes, I do. The 
short answer is yes. I think as long as we leave that up to the 
continuum of care in the areas that you are serving. So the 
continuum of care, right, is the plan to end homelessness, and 
those are your boots on the ground in those communities, and so 
as long as there is input from that community about how those 
funds should be spent, yes, I think that would be in the best 
interest of the people we are serving.
    Mr. Barr. Our State office has said that even though you 
have unspent funds in one city, one hour away from another city 
in need, that Washington HUD wouldn't allow for the 
convertibility, and it just seems like a little bit of 
bureaucracy getting in the way of delivering the dollars where 
they need to go, so I appreciate your thoughts on that.
    To Mr. Merritt, I want to talk about Moving to Work. The 
Lexington housing authority, my district, is a Moving to Work 
jurisdiction, and it has been very successful in terms of the 
fungibility of dollars, but I want to address work requirements 
and time limits. My colleague and friend from Texas, Mr. Green, 
on the other side of the aisle, talked about the need for us to 
focus on these waiting lists, and I couldn't agree more.
    We need to not only focus on the beneficiaries of Section 8 
vouchers and trying to help them achieve self-sufficiency, but 
the many people who are waiting in line, and this is an over-
subscribed program, these Section 8 vouchers. I would want to 
see Section 8 modernized to the point where we could encourage 
work, encourage self-sufficiency, so that those who are 
deserving and waiting in line can get their opportunity at 
Section 8 housing.
    So my question to you is, the President has proposed--in 
the past, President Obama has proposed expanding Move to Work. 
Move to Work has worked in my congressional district, that 
flexibility to encourage work requirements and time limits. My 
question to you is, do you think it would be a good idea to 
maybe apply time limits and work requirements to Section 8 
nationwide?
    Mr. Merritt. I think the Moving to Work program is a great 
program for public housing authorities, and I know the director 
in your home district office, Mr. Simms, has done a great job 
at his authority. To apply it nationwide is a little bit 
dangerous because the Moving to Work program allows the local 
housing authority to deal with those issues locally, and that 
is what is really more important, and it needs to be addressed 
and is a valuable tool, but it needs to be done on the local 
level because what may work in Kentucky may not work in 
Massachusetts.
    Mr. Barr. If I can just jump in, I agree with you, and 
Austin has done a great job, and I agree with that local 
flexibility, but generally speaking, I think what we did in 
1996 in this country with welfare reform is we recognized that 
work is a blessing. Work is not a punishment. Work is a 
blessing. Work is an opportunity for people to achieve self-
esteem and a sense of value, and I think that it is not a local 
issue. I think it is a universal issue, work, work providing 
able-bodied people who receive taxpayer benefits in the form of 
a Section 8 voucher, to encourage work as an incentive of 
receiving this benefit is a way to get people the help that 
they need and then out of the system, and then open up those 
vacancies to all those people who are in waiting lines, and 
again, achieve that self-sufficiency.
    Mr. Merritt. I agree with you, and the Family Self-
Sufficiency Program is one that we run in my office as well, 
and it has helped many people on that track to work through 
educational opportunities. We had several young women become 
nurses or licensed practical nurses and be able to move off the 
program, and at the same time that they--even before they move 
off, the subsidy level for that voucher goes down because they 
are working more, they are paying more. So it is a valuable 
tool and there should be a way to incentivize that and help 
that system along. But the Family Self-Sufficiency Program is 
working out there in many jurisdictions. It is working very 
well.
    Mr. Barr. Thank you. My time has expired. I yield back.
    Chairman Luetkemeyer. The gentleman's time has expired. 
Next we have the gentlelady from Ohio, Ms. Beatty, who is 
recognized for 5 minutes.
    Mrs. Beatty. Thank you, Mr. Chairman, and Mr. Ranking 
Member, and thank you to all of the witnesses here today.
    First, let me start, Mr. Chairman, by echoing what some of 
my colleagues have already said, but I think, because of the 
tone of today's hearing, it is worth repeating, that it is a 
good day and a good feeling when we can have a bill that we can 
find so much good and bipartisan in and meet the standards of 
why we are here in creating housing opportunities.
    As someone who has spent a lot of time working in the 
housing areas, working with public housing, I commend all of 
you for the roles that you play in helping to create and 
sustain these opportunities that gets us to that self-
sufficiency.
    With that, before I go to my questions, let me also say 
what we are doing for those young foster care individuals. 
Recently, I had a number of them who appeared to be somewhat 
atypical who ended up in my office. They were all college 
students who had been homeless but found a way through some 
advocacy group or individual to get all their paperwork done 
and get into college. Well, at the first face value, you think, 
how wonderful. Here is a person who is going to college and 
great, and as the one gentleman looked at me and said 
everything is fine for the first 45 days of school, and then we 
read the notice that said people are going home for the 
holiday, and I didn't have a home to go to.
    And that just hit me right in the face, that I am thinking, 
here you are at one of the largest institutions in the country 
and you are matriculating and doing well. He said, but I ran 
out of couch surfing, and that was the first time I had heard 
that term, and so he said I am asking you as an advocate and a 
member of this committee to make sure that any opportunities 
you get, to help us have some of the same privileges that we do 
for veterans or pregnant teenagers because we are the future 
and we are doing well. So I thank everybody here for pushing 
with that.
    With that said, since I am on a roll, I should also say to 
you, Mr. Chairman, that I think that this bill contains a lot 
of stuff that I like and that I would be willing to put my 
signature on, so I want us to note that today. But also, 
earlier this month I joined 51 of my colleagues in sending a 
bipartisan letter to HUD Secretary Castro asking for changes to 
the process of financing condominiums and to ease other 
requirements like owner occupancy and delinquent condo 
association dues because I have heard from a lot of my 
stakeholders that such requirements and restrictions have made 
the FHA certification process daunting at times and especially 
for some of the smaller properties and those that don't have 
the elite management, contracts, or people to operate them.
    I think I read somewhere last week that the Federal Housing 
Administration is expected to issue rules by the end of the 
year that could make it easier for lenders to finance loans for 
condominiums, sales with government backing. So, Mr. Polychron, 
you stated in your testimony that FHA has a number of 
significant restrictions that prohibit many buyers from 
purchasing a condo despite the fact that condominiums often 
represent the most affordable options for first-time home 
buyers. This is important to me because I am seeing so many 
people in my district in condos.
    Mr. Polychron. Yes, Congresswoman, and thank you for the 
opportunity to speak on a subject that I do know something 
about.
    Mrs. Beatty. I thought you would like that question.
    Mr. Polychron. Seriously, I live in the small community of 
Hot Springs, Arkansas, and it says that we have, in the whole 
State of Arkansas, 54 condominium developments certified. I 
know in my own hometown, we have homeowners associations, or 
POAs, in excess of that number, but because of the 
certification process, which is 95 pages long and sometimes not 
only burdensome to finish or daunting, as you said, but 
expensive to hire--to get a certified financial statement done 
by a CPA, for instance, the 35 percent rule, and thank you, Mr. 
Chairman, for putting that in H.R. 3700, the 35 percent rule is 
a great start. We would like to see it at zero as far as 
occupancy. The last time we asked for a reduction, the HUD 
reduced it--or FHA from 51 to 50 percent. We hope we do better 
this time with your 35 percent suggestion.
    Condominiums are the lowest of the seriously delinquent 
rates of any of the FHA-insured mortgages. They are 4.9 
percent. The average is 6.96 percent, so we certainly think 
that they deserve merit in relaxing the requirements for 
condominium financing.
    Mrs. Beatty. Thank you. Thank you, Mr. Chairman.
    Chairman Luetkemeyer. I thank the gentlelady. With that, we 
go to the gentleman from Florida, Mr. Ross. He is recognized 
for 5 minutes.
    Mr. Ross. Thank you, Mr. Chairman, and I wish to add my 
name to the list of those who have thanked you and the ranking 
member for bringing this bill forward. I particularly like 
certain incentives in there, the incentive to give charitable 
organizations and nonprofits opportunities to invest in energy 
and water conservation and the remodification and building of 
housing. I think that is very, very important.
    I particularly like what my colleague from Kentucky, Mr. 
Barr, discussed with the Move to Work programs. Those are great 
incentives. I think it is important that a lot of this is 
temporary, but it has become multi-generational and we need to 
do all we can to make sure that we provide incentives, not only 
for good housing but also for the opportunities to gain dignity 
through work.
    Section 103 of this particular bill is of interest to me, 
and it has to do more with the modified means testing in terms 
of those who stay in the homes and whether they are 
overqualified financially to be in there. For example, my 
colleague from Florida, Representative Jolly and I have been 
focused on reducing waste and fraud within HUD and to ensure 
those who rightfully are in need of assistance are able to 
receive it.
    A recent HUD independent inspector general's report 
revealed that over 25,000 families currently in taxpayer-
supported housing exceeded the maximum allowable income 
threshold to qualify for federally-subsidized housing. In one 
instance, a New York family with an income of nearly $500,000 
is paying $1,574 a month to live in taxpayer-subsidized public 
housing.
    In another unfathomable incident, a family had personal 
assets of over $1 million while living off the backs of 
taxpayers. With an ever-growing waiting list for housing 
assistance for those truly in need, these incidences of waste, 
fraud, and abuse should be eliminated. Therefore, my first 
question is to Ms. Burns. What is your perspective regarding 
tenants who remain in public housing but have the financial 
means to afford nonsubsidized housing, thus opening up an 
opportunity for those who should be in line for that type of 
assistance?
    Ms. Burns. My expertise is in privately owned housing, not 
public housing, but I can respond this way. I think it is 
incredibly important to catch fraud and abuse. Just this 
morning, the National Leased Housing Association, myself and 
our executive director were meeting with HUD to talk about the 
EIV program.
    Mr. Ross. Right.
    Ms. Burns. And the way that program is working, we believe 
strongly that it is essential to catch fraud and to put teeth 
in when we catch residents who have misled us on their income 
and miscertified, that there be teeth rather than just a slap 
on the wrist and say please pay us back when you can.
    Mr. Ross. So would you support Section 103, that after 2 
years, if their income is in excess of 120 percent of area 
median income, to charge the tenant the fair market value for 
the housing?
    Ms. Burns. It seems to make sense to me. As I said, I am 
not a public housing person.
    Mr. Ross. I agree with you. Moving on. I have a good friend 
of mine from Florida who now lives in Atlanta, Georgia, who is 
head of a nonprofit organization called IMPACT! I don't know if 
any of you all have heard of that, but the IMPACT! Group 
provides housing for homeless veterans, amongst others, but 
they have a tremendous program that incentivizes the private 
sector to invest, and then they will assist not only in 
temporary housing but finding employment, taking part of their 
wages to invest in a deposit that eventually they move on to 
work.
    The company is in Gwinnett County, Georgia, and they are 
searching for more ways for private sector participation rather 
than depending on the Federal Government. And I will tell you, 
I think what has happened over the last few years in housing, 
being able to leverage private investment to create greater 
housing with certain guarantees of Section 8 housings and other 
vouchers has been a great program in order to manage and 
maximize the amount of housing we have out there.
    Since it was established in 1992, the IMPACT! Group has 
grown over--such that over 90 percent of the families who 
graduate their program remain independent of assistance a year 
later. My question, Mr. Merritt, to you and to anyone else is 
that given our type, that Federal budget environment, let's 
face it, we have competing interest for Federal dollars, how 
can local and State housing agencies leverage their assets 
better and find other financial tools to incentivize the 
private sector to invest in these types of programs?
    Mr. Merritt. Being an administrator of a public housing 
agency, we look at that sort of through the eyes of the HUD 
regulations and other rental assistance demonstration or 
something that is under way and is a way to bring in private 
money into the public housing system, but it also needs the 
public investment as well because it has been invested in for a 
long time and there is investment there that needs to be 
protected, so the capital fund program to keep things in repair 
is important to local public housing agencies.
    Mr. Ross. And furthering tax incentives for the private 
sector to invest should be good as well, shouldn't it?
    Mr. Merritt. It should. Through the low income housing tax 
credit system is also very important.
    Mr. Ross. Thank you. And I yield back.
    Chairman Luetkemeyer. The gentleman yields back. With that, 
we go to the gentleman from Delaware, Mr. Carney. He is not a 
member of the committee, but he has a lot of great questions 
today and we look forward to his insights and the information 
he is going to glean for us.
    Mr. Carney, you are recognized for 5 minutes.
    Mr. Carney. Thank you, Mr. Chairman, and Ranking Member 
Cleaver. And Mr. Chairman, thank you for your kind remarks.
    Actually, I am here mainly to welcome to the Capitol one of 
my constituents, Kevin Kelly. Kevin and I have worked together 
over the years. He is a Delawarean, and he is the chairman of 
the NAHB and a real leader nationally. But he has been 
developing and working on housing projects for a long, long 
time. And a Delaware protege of one of the giants of affordable 
housing in our country, Leon Weiner. Welcome, Kevin. It is 
great to have you and your expertise here.
    But since I have a couple of minutes, I might ask a few 
questions. I had to pinch myself for a minute because there was 
so much agreement across the aisle here. I guess it is not 
surprising, frankly, given who the chairman and the ranking 
member of this subcommittee are, two people who are always 
looking to work together; and the comity that you bring to this 
committee is extraordinary.
    There has been a lot of discussion. What is interesting is 
we have common problems among our districts; and they all, many 
center around the lack of adequate resources and the scarce 
resources, and I wonder if, to start with you, Mr. Kelly, if 
you could tell us how we could more efficiently use Federal 
resources that are available? And I will ask Mr. Fischer and 
Mr. Merritt that question as well.
    Mr. Kelly. Thank you, Mr. Carney, for the kind words, and 
it has been a pleasure working with you over the years. I 
certainly applaud the initiative of the committee in this 
particular bill. We are competing in a world of very scarce 
resources.
    I think what H.R. 3700 does, is look at substance and 
results over process. Too many of our programs are burdened by 
process and not results. And I think this bill attempts to 
address many of those issues.
    Mr. Carney. I know there is some controversy over the 
Moving to Work Program, but it is and folks have indicated it 
works differently in different places. It has worked well in 
Delaware. It is not the be-all and end-all, but it seems to me 
it ought to be a piece to the point, Mr. Kelly, you are 
mentioning in terms of effectiveness.
    Mr. Kelly. I would agree. In looking at my privately owned 
Section 8 family portfolio, we run somewhere between 70 and 75 
percent of the families in our developments are working at any 
one time. These families are often underemployed, and face 
challenges in employment. But on average, our developments run, 
again, they are Section 8. These are people at or below 50 
percent of median income, but the vast majority of them are 
working. And that is a benefit, certainly.
    Mr. Carney. But I have the same problem frankly that I have 
heard from my colleagues on both sides of the aisle with 
respect to Section 8 waiting lists. They are just way too long. 
I go to a training session for mostly young women who are on 
TANF and one of their big complaints is that they can't get any 
housing assistance because they can't get a Section 8 voucher 
because folks aren't moving off of it.
    I guess part of it is we don't have enough of them. But it 
makes it extremely difficult for people who are moving up, we 
are trying to help. And give a hand up, to get that kind of 
assistance that they need.
    Mr. Kelly. Excuse me, sir. I didn't mean to interrupt. But 
I will tell you with our project-based elderly developments, 
the waiting list is approximately 5 years.
    From Chelton Apartments down at Wilton Route 40, to Main 
Towers in Newark, those waiting lists run about 5 years. They 
are closed at the moment. Our family developments are probably 
2 to 3 years at a minimum. Obviously for families in dire need, 
that is an impossible--
    Mr. Carney. Mr. Fischer, any solutions?
    Mr. Fischer. Yes, in terms of the points you just raised 
about helping people to move off of housing assistance and 
helping them move towards self-sufficiency, I think one way to 
do that, and it could be readily added to this bill that we are 
discussing today, would be improvements to the Family Self-
Sufficiency Program.
    Senators Reid and Blunt, in the Senate, have a good bill to 
do that, and it has bipartisan support in House bills as well 
in the past. You mentioned the Moving to Work demonstration. I 
think you are right that it is a highly controversial issue and 
one that has played out differently in different places. It has 
resulted in some useful innovation, but it has also had harmful 
effects like transfers of voucher funds that resulted in fewer 
families getting assistance and big increases in rents for the 
lowest-income families. So I think if there is an expansion of 
that it would be really important to make really fundamental 
reforms that would address some of those concerns. I know Ms. 
Waters has a proposal that would take steps in that direction.
    Mr. Carney. Thank you very much. Just with the 5 seconds, 
we are also experiencing an issue with continuum of care where 
the priority is being put into rapid rehousing, and it has very 
negatively affected transitional programs which are really, 
really important.
    Mr. Chairman, thanks so much for allowing me some time 
today.
    Chairman Luetkemeyer. Always a pleasure. I thank the 
gentleman for his questions. Mr. Sherman, you were the last 
individual to go through round number one here. Are you ready 
to ask questions? If so, you will be recognized, or we can wait 
if you are not quite ready. You are used to popping stuff right 
off the top of your head, so I don't think it will be a problem 
for you, but I wanted to give you time in case you do need 
that.
    Mr. Sherman. Thank you. Let me first ask the representative 
from the Home Builders, I believe that is Mr. Kelly.
    Chairman Luetkemeyer. Mr. Sherman is recognized for 5 
minutes.
    Mr. Sherman. Thank you. Mr. Kelly, I noticed in your 
testimony that you have discussed the flood plain management 
Executive Order and your concerns about how this would affect 
the cost and also the timeline of building new multi-family 
units. I particularly want to see multi-family units because 
the environmental footprint is so much less. The ability to 
then support rapid transit systems is there.
    I happen to live in a single-family detached house in my 
district, but I am an advocate for multi-family housing. Can 
you explain how this Executive Order will affect the timeline 
and the cost?
    Mr. Kelly. To be honest with you, we don't know. What we 
know is it creates enormous uncertainty. It has gone 
essentially from what has been the rule for decades of the 100-
year flood plain to essentially what is a 500-year flood plain. 
In addition, various agencies are given various discretions in 
evaluating a project to meet the provisions of this Executive 
Order.
    So I, as a developer, now have no idea whether or not a 
piece of land that I may be examining to use, whether it is 
urban and suburban or rural areas, would come under the 
restrictions of this Executive Order given its proximity to a 
body of water. Because at the moment, nobody does 500-year 
flood plains. Could I get an engineer to do it at some point in 
time? Yes. Then I would take that information to HUD. There are 
no standards by which the HUD field office can evaluate my 
request to build in that area.
    And so as a developer, the question is, first, why would I 
want to pursue it in the first place? And second, if I was 
crazy enough to do so, the question then becomes when, if ever, 
I will get an approval out of a HUD field office to make that 
determination. Uncertainty, uncertainty, uncertainty.
    Mr. Sherman. That certainly has to discourage the 
construction. I would point out that while I usually fight for 
my district, that was a nonparochial question because I 
represent a city built in a desert during a drought. So that 
one was for the rest of the country.
    But, Mr. Polychron, continuing my focus on multi-family 
housing, we have condos. It is a good way for people to get 
their first home. First-time home buyers, H.R. 3700 has some 
provisions designed to facilitate condo sales, and those 
include allowing mixed-use space, streamlining the 
recertification of condo projects, and changing the owner 
occupancy requirements.
    How is that going to let people buy multi-family housing, 
and how is it going to affect people who have never owned a 
home and want to own one?
    Mr. Polychron. Congressman Sherman, thank you for the 
question. I kind of answered the first two right before you got 
here, so if you would let me, I would like to go into the 25 
percent commercial rule which certainly is in H.R. 3700. And 
thank you for that, sir.
    Because if you think about, especially in urban areas where 
you have a beautiful, let's just call it a 200-unit building, 
and all of a sudden you want to have commercial space on the 
ground floor and maybe office space on the next two or three 
floors, if you have the 25 percent cap, you cannot do that 
building. So we certainly think this is a tremendous 
opportunity to expand housing for condominiums in that manner.
    The private transfer fees are something else that have 
prohibited additional opportunities in condominium financing. 
First, you should know that NAR is opposed to any equity 
stripping type private transfer that might exist. We have 
always opposed that.
    Mr. Sherman. And I have joined you in that often.
    Mr. Polychron. Certainly.
    Mr. Sherman. As have several here.
    Mr. Polychron. But if that transfer fee benefits or 
improves that development or that project, we certainly think 
it ought to be, as if FHFA, be allowed to be part of the 
process. So thank you for that opportunity.
    Mr. Sherman. We have seen a number of these ``live, work, 
shop'' developments, mixed-use. They make a lot of sense. It is 
the only chance somebody will have to cut their commuting time 
and their commuting environmental footprint. You could 
sometimes, if you are lucky, commute to work on the elevator.
    So I think it makes sense for us to modernize these rules 
and allow the mixed-use buildings. Do you have one last 
comment?
    Mr. Polychron. If you will allow me sir, the towncenter 
concept is what HUD has been promoting, and yet we restrict it 
by making the 25 percent rule, so hopefully we will get this 
passed, and certainly you will have our help.
    Mr. Sherman. I want to commend the author of H.R. 3700. I 
know there are some provisions on Section 8 that will still 
have to be worked out, and I look forward to working to get 
this bill on the Floor of the House. I yield back.
    Chairman Luetkemeyer. I thank the gentleman for his 
comments, and his time has expired.
    I am going to do a quick second round of questions here, 
and I will begin with myself. I will follow up with you, Mr. 
Polychron, with regards to condos and home ownership. I just 
had a conversation last week with a housing authority owner in 
England, and he had a little bit of a different problem there. 
They have almost--he used the figure of 15 to 17 percent, 
public housing. And they are trying to over the last number of 
years shift a lot of that public housing to the private sector, 
in other words, allow people who are in their homes to find a 
way to own the home.
    I think in your testimony, Mr. Polychron, you indicate that 
the average condo cost, national average is 27 percent less 
than what a home is. So it seems to me it would follow that it 
would be a logical way for people to get into that first home 
and be able to get them to perhaps be able to rent it and then 
be able to get into some sort of a lease/purchase arrangement 
to be able to own property to allow some inflation in it to 
then be able to move on to another one. It seemed like a 
natural progression. I know that the English have figured out a 
way to get this done.
    I am wondering if you have any comments on something like 
that. I would like to work with you to come up with some ideas. 
This isn't in this bill, but I think it is something we need to 
take a look at it somewhere down the road. I know we have tried 
to enhance FHA's ability to expand and to begin to loan more 
money and look more favorably on condos, and I would like your 
thoughts on it.
    Mr. Polychron. They moved it from 234 to 203B years ago in 
order to expand financing in condominiums. Yet we haven't had 
any relaxation of the rule since just a little bit in 2012. If 
you look at it from another perspective, it is 27 percent 
cheaper in condominium pricing as far as single-family homes. 
But also, that a downpayment, which people sometimes have to 
save for 3 or 4 years to make, becomes less of a burden when 
you do condominium financing versus single-family home. So 
that, too, would add to it.
    We know that not only first-time home buyers, but seniors 
who are downsizing and going into condo financing, their 
permanent home so they can use FHA, but only 4.2 percent of the 
portfolio is being used for condominiums at this time. It is 
certainly a market that we would love to work with to expand 
that number.
    Chairman Luetkemeyer. I appreciate your comments. I know 
you also had a comment in your testimony with regards to 
electronic filing system being improved for the certification 
process?
    Mr. Polychron. Yes. It just doesn't make sense, especially 
in a smaller community where you don't have a manager running 
that development, to where you have to submit totally from 
scratch again every 2 years. And it is really an 18-month 
process because it takes 6 months to get it approved. So 
basically, we would like to see the 2-year extended to perhaps 
3 or 4 years--that doesn't sound right--whatever we could get.
    Chairman Luetkemeyer. You have a wish list. That is fine.
    Mr. Polychron. But seriously, it is such a burden and cost 
as well to get that done. And what happens is that it is so 
time-consuming that the small HOA or POA just says, oh, to heck 
with it, there is a 60 percent decline rate anyway. I won't 
take the time to do it.
    Chairman Luetkemeyer. One of the problems is it is mainly 
done, and HUD for their FHA program is looking for some more 
money for the electronic across-the-board, electronic 
opportunities, and that hasn't been forthcoming, so it is a 
problem. I recognize it. But I appreciated the comment that you 
made.
    I am going to stop right there. The gentleman from 
Delaware, do you have any follow-up? I will recognize you for 5 
minutes.
    Mr. Carney. Thank you, Mr. Chairman. I actually do have a 
quick follow-up question. I mentioned at the very end the 
Continuum of Care grant and the priority or bias if you will 
towards what they call rapid permanent rehousing. Is there 
anybody on the panel who could--apparently there is a priority 
given in States for permanent housing, and the effect on my 
little State of Delaware has been to end up defunding very 
important transitional housing programs, where somebody who is 
homeless, has some of the issues that homeless folks do with 
drug addiction and substance abuse and family issues, comes 
into transitional housing, kind of gets things sorted out, and 
then kind of moves to the next step.
    The bias now is to the development of get somebody in a 
home permanently and then work on those--or allow them to work 
on those problems. The effect is a funding one, right, 
ultimately; but I would just be interested in anybody who has a 
perspective on that?
    Ms. Craig. I am a past Chair of the Continuum of Care in 
Jackson County and have reallocated transitional programs to 
rapid rehousing and also operate transitional housing programs. 
I am not familiar with Delaware's operation, so when you said 
``defunded,'' I am not sure if that meant the continuum did not 
put that program in either Tier 1, where they would be funded, 
or if there was a reallocation process whereby voluntarily the 
program, as I had in one of my transitional programs, opted to 
reallocate from a transitional program into a rapid rehousing 
program.
    Mr. Carney. The effect of the scoring process meant that 
the transitional program lost $300,000 of support that they 
were getting, Ministry of Caring--Kevin knows our folks very 
well--to a program. It was doing great work.
    Again, we are talking about a world of scarce resources, 
and they have to go somewhere, and they went to a place where 
there was more permanent housing. It didn't have any of the 
transitional substance abuse programs that go along with it.
    So some of that happens at the local level where they have 
the committee, but they argue that priority is coming down from 
the Fed on that. And I see somebody--I can't read your name.
    Ms. Bradley-Geary. It is Heather Bradley-Geary. Sorry. I 
feel very passionate about this subject.
    Mr. Carney. So do I.
    Ms. Bradley-Geary. Yes. And we have different feelings on 
the passion of it. Transitional housing, although I am not 
saying the program isn't great because it probably is, but the 
data does not support transitional housing.
    So a long time ago, HUD had transitional housing as one of 
their funding priorities, that somebody could be in housing for 
24 months, but then they move on, as you are saying. The data 
does not support it. It does not work.
    Mr. Carney. This goes back to the question that we had 
before about Moving to Work. Maybe it doesn't work everywhere, 
but there are places where things work differently.
    We like to think we are different in Delaware. We are. We 
are a small State. We are a manageable State, and in that sense 
we can count the people, okay, and where they have gone and 
whatever. We are that small. We are one district. I am it. I am 
the one guy we get down here or the one person that we get down 
here. And so, the effect has been some significant problems for 
some of the most effective programs that we have in dealing 
with homeless populations.
    Ms. Gawrilow. Sir, if I may?
    Mr. Carney. Sure. Jump in, particularly if you are on my 
side of the question.
    Ms. Gawrilow. I might have a different view as well. But 
HUD has been pushing COCs, Continuum of Cares, to do increased 
rapid rehousing, for multiple populations, because there simply 
aren't enough resources, there are not enough beds in emergency 
shelters, there is not enough supported housing for higher-need 
populations.
    And what has happened is then a conversion to rapid 
rehousing programs, and as Heather said, HUD right now has done 
a study on the differences of comparing transitional housing 
outcomes, rapid rehousing outcomes, and permanent subsidies for 
homeless families, and the outcomes between transitional 
housing and permanent subsidies for families, it is incredible. 
The difference in the outcomes, the well-being outcomes for the 
families, is so much better in permanent housing than in the 
transitional housing and it is cheaper.
    And that kind of--HUD has been rethinking this, but that is 
not to say that there aren't--different markets are going to 
need different, have different housing needs. And permanent 
supportive housing doesn't mean a person has to stay there 
permanently. Ideally, they would not. They would address their 
underlying issues and then eventually be able to move on to an 
independent living situation. But the housing--
    Mr. Carney. My time is way up.
    Ms. Gawrilow. Sorry.
    Chairman Luetkemeyer. Go ahead and finish.
    Ms. Gawrilow. Oh, I was just going to say, the housing is 
supposed to be made permanent so people who are in crisis come 
in and get the supportive services they need, and that system 
is going to be so much cheaper, to the emergency health 
systems, to the criminal justice, the jail system, and to detox 
centers.
    Ms. Craig. May I just say one more thing? I am so sorry. 
Continuum of Care has been brought up a lot lately, and this is 
a time of major changes, and you have probably read that 
Continuum of Care was unheard of before in many times in many 
places that programs were being defunded.
    So I think everybody over the past 3 years is really trying 
to figure out how this is going to work nationwide as well as 
within our communities. So we all are trying to do a much 
better job of prioritizing, communicating within our 
communities, doing it well in advance of the NOFA, which you 
should not when the funding comes down.
    So I will say there certainly have been probably any number 
of cases where that hasn't been handled appropriately. It is 
correct that per capita there almost is nothing more expensive 
short of group homes than transitional housing. It is very 
appropriate for certain populations, very appropriate in many 
ways.
    We would have sat here 10 years ago and what you would have 
heard is that HUD's preference was for transitional housing 
over permanent housing. I happened to raise $4 million to 
renovate 24 units of family transitional housing 8 years ago 
because I thought that was a good idea. Luckily, now I am able 
to use them for vets. So my point is, it goes back to that 
larger question about prioritization.
    And so let me just share with you very quickly, in one year 
in the two traditional HUD transitional family programs I 
operated, I had 88 families enter. Of those 88 families, 56 
were not street or shelter homeless. They came from living with 
their families. Well, doubled up is not comfortable--I 
understand that--but it isn't the same. And I also would say 
when I have folks who are trying to get vouchers from the 
Housing Authority come to my program and want homeless letters, 
they are living with their family. And I understand that is 
uncomfortable, but I can't give you a homeless letter.
    But I asked my staff, of those 56 families who came from 
living with family or friends, did we ask them if they had 
other resources that we could exercise with them so they didn't 
have to come into shelter, and we could make sure that we were 
prioritizing those spaces for families who were in fact street 
and shelter homeless because there aren't enough resources. We 
all are--
    Mr. Carney. Mr. Chairman, thank you so much. I am way over, 
and I am not even on the committee. God bless you.
    Ms. Craig. Sorry.
    Chairman Luetkemeyer. That is okay. That was a great 
question and was a great answer, and I appreciate your passion.
    With that, Mr. Cleaver has waived a second round of 
questioning, so with that we would like to thank our witnesses 
for their testimony today. We certainly appreciate your 
expertise, your advice, your counsel, and your passion for all 
of these issues and for all the help that you have given us in 
developing the bill, for your ideas of improving the bill 
today.
    And we want to continue to work with each of you and your 
groups that you represent to try and continue to make this the 
best bill and the best opportunity we have to pass something. 
It is going to make a difference in the lives of a lot of 
people.
    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.
    [Whereupon, at 4:18 p.m., the hearing was adjourned.]

                            A P P E N D I X



                            October 21, 2015
                            
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