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


                   THE FUTURE OF HOUSING IN AMERICA:
                     50 YEARS OF HUD AND ITS IMPACT
                       ON FEDERAL HOUSING POLICY

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

                                 HEARING

                               BEFORE THE

                    COMMITTEE ON FINANCIAL SERVICES

                     U.S. HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                            OCTOBER 22, 2015

                               __________

       Printed for the use of the Committee on Financial Services

                           Serial No. 114-57
                           
                           
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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
                            
                            
                            
                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on:
    October 22, 2015.............................................     1
Appendix:
    October 22, 2015.............................................    53

                               WITNESSES
                       Thursday, October 22, 2015

Briggs, Xavier, Vice President, Economic Opportunity, the Ford 
  Foundation.....................................................    10
Cabrera, Orlando J., Of Counsel, Squire Patton Boggs; and former 
  Assistant Secretary for Public and Indian Housing, U.S. 
  Department of Housing and Urban Development....................     5
Glover, Renee Lewis, Founding and Managing Member, the Catalyst 
  Group, LLC.....................................................     7
Husock, Howard, Vice President, Research and Publications, the 
  Manhattan Institute............................................     8

                                APPENDIX

Prepared statements:
    Velazquez, Hon. Nydia........................................    54
    Briggs, Xavier...............................................    55
    Cabrera, Orlando J...........................................    63
    Glover, Renee Lewis,.........................................    70
    Husock, Howard...............................................    81

              Additional Material Submitted for the Record

Luetkemeyer, Hon. Blaine:
    Written statement of the National Multifamily Housing Council 
      and the National Apartment Association.....................    86
    Letter from representatives of the real estate industry, 
      dated October 20, 2015.....................................    91
Kildee, Hon. Daniel:
    Written responses to questions for the record submitted to 
      Xavier Briggs..............................................    93

 
                   THE FUTURE OF HOUSING IN AMERICA:
                    50 YEARS OF HUD AND ITS IMPACT
                       ON FEDERAL HOUSING POLICY

                              ----------                              


                       Thursday, October 22, 2015

             U.S. House of Representatives,
                   Committee on Financial Services,
                                                   Washington, D.C.
    The committee met, pursuant to notice, at 10:05 a.m., in 
room 2128, Rayburn House Office Building, Hon. Jeb Hensarling 
[chairman of the committee] presiding.
    Members present: Representatives Hensarling, Royce, Lucas, 
Garrett, Neugebauer, Pearce, Posey, Fitzpatrick, Luetkemeyer, 
Huizenga, Duffy, Stivers, Stutzman, Mulvaney, Hultgren, Ross, 
Pittenger, Barr, Rothfus, Schweikert, Tipton, Williams, 
Poliquin, Love, Hill, Emmer; Waters, Maloney, Velazquez, 
Sherman, Hinojosa, Clay, Scott, Green, Cleaver, Ellison, Himes, 
Carney, Foster, Kildee, Murphy, Delaney, Sinema, Beatty, and 
Vargas.
    Chairman Hensarling. The Financial Services Committee will 
come to order. Without objection, the Chair is authorized to 
declare a recess of the committee at any time.
    Today's hearing is entitled, ``The Future of Housing in 
America: 50 Years of HUD and Its Impact on Federal Housing 
Policy.''
    I now recognize myself for 3 minutes to give an opening 
statement.
    In launching the war on poverty, President Johnson told us 
its purpose was, ``not only to relieve the symptoms of poverty, 
but to cure it and, above all, to prevent it.'' One of the 
chief weapons of this war was to be the Department of Housing 
and Urban Development, a Cabinet-level agency President Johnson 
signed into law 50 years ago this month.
    In its history, HUD has clearly achieved good. It has made 
commendable progress to aggressively fight immoral and illegal 
racial discrimination in housing. It has proven vital to many 
of our low-income elderly and disabled citizens and has 
undoubtedly made poverty more tolerable.
    But it has also dramatically failed to meet President 
Johnson's noble aspirations, much less deliver any measurable 
results. In fact, poverty levels are largely unchanged since 
HUD's creation. With some notable exceptions, HUD's public 
housing projects are typically any city's most despairing 
places where generations of poverty-stricken families are 
warehoused and sealed off from the best schools, the best job 
opportunities, and the safest neighborhoods.
    It is simply not enough to marginally improve the lives of 
the able-bodied poor through perpetual government dependency; a 
caring and compassionate society must always have a ladder of 
opportunity on which everyone can climb.
    Thus, our collective goal cannot be limited to helping 
people tolerate poverty; it must be to help them escape 
poverty. And whether I have met them at the Salvation Army 
women's shelter, Habitat for Humanity homes, or the Jubilee 
Center in my native Dallas, I know that is the aspiration of 
our low-income brothers and sisters.
    We must help find ways for them to provide for their 
families, to conquer generational cycles of dependency, and to 
have the opportunity to enjoy the dignity of meaningful work. 
Most importantly, they must have a chance to enjoy a quality 
not measured in dollars and cents: the pursuit of happiness.
    We can no longer measure success by taxpayer dollars 
expended and new HUD programs launched. Measuring success based 
on how many Americans are standing in line for welfare checks 
versus earning growing paychecks is a sure sign that the system 
has failed.
    And now is also the time to acknowledge this fundamental 
truth: There can be no real progress in the cause of affordable 
housing without recognizing that government policies are often 
the impediment: first, by making housing more expensive, up to 
30 percent according to some studies, due to regulatory and 
zoning restrictions; second, by shrinking paychecks and harming 
economic growth through poor policies; and third, by denying 
educational choice for families to escape failing schools and 
improve themselves.
    This hearing will be the first in a series on the future of 
housing in America where we will investigate questions that 
ought to matter to all Members concerned for the dignity and 
well-being of the poor among us. What are the precise problems 
HUD is trying to solve? Why doesn't it seem to work? How should 
we measure success? And what should we be doing in the 21st 
Century?
    A decent society has a moral responsibility to help make 
affordable housing accessible for the elderly, the disabled, 
those who cannot provide for their dependents, and those who 
find themselves in hard times and in need of a second chance. 
The question here is not, should we honor that commitment, but 
how do we best honor that commitment in the 21st Century, and 
can we work together on a bipartisan basis to do that?
    I now recognize the ranking member for 5 minutes.
    Ms. Waters. Thank you very much, Mr. Chairman.
    I would like to thank you and our witnesses for being here 
today.
    Mr. Chairman and Members, I just returned from a homeless 
program. I was there this morning with a few of my colleagues, 
including Mr. Cleaver and Mr. Green. We visited N Street 
Village, a homeless service provider, which is just footsteps 
from the halls of our Capitol.
    As this hearing seeks to examine the effectiveness of HUD 
programs over the last 50 years, I thought it would be 
important to help make the connection between what we have 
talked about here in the committee and what HUD is doing to 
support providers like N Street Village, which are working on 
the front lines of our Nation's effort to end homelessness.
    This morning, we spoke with women struggling to find work 
and fighting to overcome addiction, physical and mental 
illness, and abusive situations. What we saw today is how HUD 
programs directly touch and impact the lives of America's most 
vulnerable.
    We also saw the opposite of the many assertions we have 
heard about dysfunction and ineffectiveness at this agency, a 
rather ironic charge given productivity levels here in 
Congress.
    Mr. Chairman, in the wake of a foreclosure crisis that 
pushed as many as 11 million families out of their homes, a 
fully funded HUD is needed now more than ever before. This is 
an agency that, in addition to reducing veterans' homelessness 
across the Nation by 33 percent, currently supports 1.2 million 
affordable housing units for low-income families through the 
HOME program, including almost 500,000 units for first-time 
home buyers in rural and urban communities alike.
    This is an agency that over the last 50 years has provided 
housing assistance to tens of millions of families, 35 million 
in the last 20 years alone. This is an agency which has ensured 
that 44 million families have access to the American Dream by 
ensuring they have mortgages that they can actually afford.
    Without question, HUD is the backbone of our Nation's 
safety net.
    Today, many of our Members have provided examples of HUD at 
work in their districts. These pictures demonstrate the 
transformative ability of HUD programs, particularly the 
Neighborhood Stabilization Program, which has infused over $7 
billion into local communities to rehabilitate foreclosed homes 
and breathe new life into distressed neighborhoods in every 
corner of this great Nation.
    However, this good work continues to be misunderstood or 
undermined by harmful cuts to these programs. And so I think it 
is time for us to truly focus on the good that HUD has done and 
commit ourselves to dealing with problems such as homelessness 
that really can be addressed.
    In addition to the visit that we made this morning, last 
week I was at Vermont Village, a project that has been 
developed in my district in partnership with the private 
sector.
    We had Chase Bank involved. We had a private developer. We 
had the County of L.A. We had another nonprofit. We had 
Enterprise. They all came together and built a wonderful unit, 
and it is serving homeless veterans. And the veterans were 
there, some in their wheelchairs. They were so proud of all of 
these opportunities that are being provided with the help and 
direction of HUD.
    And so what I wish, Mr. Chairman, is that we could focus in 
a bipartisan way on what we can do from this committee in 
support of HUD to provide housing and home opportunities for 
the least of these. I believe that it is possible.
    In Los Angeles, homelessness has risen 12 percent. We have 
declared a state of emergency. The County and the City are 
coming together and combining resources, but they need help 
from us. And so I appreciate this hearing, but I appreciate 
that we should actually put more focus on what we can do for 
the homeless and for the least of these in providing a basic 
safety net for those who need our help so badly.
    I will yield back the balance of my time.
    Chairman Hensarling. The gentlelady yields back.
    The Chair now recognizes the gentleman from Missouri, Mr. 
Luetkemeyer, chairman of our Housing and Insurance 
Subcommittee, for 2 minutes.
    Mr. Luetkemeyer. Thank you, Mr. Chairman.
    The Nation's housing system is struggling and, in some 
instances, failing. Since 2002, the Federal Government has 
thrown more than $550 billion at HUD. Still, Los Angeles has 
seen a 12 percent increase in homelessness over the past year. 
In New York City alone, there are roughly 122,000 families on 
the Section 8 wait list.
    When the City of St. Louis opened its wait list in 2007, 
the housing authority received more than 27,000 applications in 
one week. It was not until late April that St. Louis County 
opened its wait list again for the first time since 2010.
    While we continue to see the need to grow and opportunities 
stall, we experienced a dramatic increase in Federal policies 
that drive up the cost of housing and impose an onslaught of 
red tape, keeping people in the private sector out of 
affordable housing. Our failed housing policies make no sense.
    Since HUD Secretary Castro has spent the last year talking 
about all he will do to reform housing, to date we have seen 
very little in the matter of dramatic advances in HUD's ability 
to serve, and no new metrics by which HUD can measure success. 
One has to wonder if there is any success to report at all.
    The time to talk about what is needed is over. It is time 
to reject political rhetoric and push ourselves to do something 
to help people in need.
    I recently introduced H.R. 3700, the Housing Opportunity 
Through Modernization Act. This bill is composed of 
noncontroversial provisions which aim to clear out the 
regulatory underbrush. Yesterday's subcommittee hearing showed 
that there is a tremendous bipartisan support for that effort.
    I hope we can continue the collaboration in bringing bolder 
changes that are needed to HUD. Let us work together to create 
opportunity and choice in housing.
    Mr. Chairman, with that, I yield back.
    Chairman Hensarling. The gentleman yields back.
    We will now turn to our witnesses. Today, we welcome the 
testimony of the Honorable Orlando Cabrera, who is today of 
counsel to Squire Patton Boggs. He previously served as the 
president of an affordable housing developer, and was HUD's 
Assistant Secretary for Public and Indian Housing. He is a 
graduate of the University of Michigan and the University of 
Wisconsin Madison.
    Ms. Renee Glover is the founder and managing member of the 
Catalyst Group. She previously served as the president and 
chief executive officer of the Atlanta Housing Authority for 
almost 20 years. She is also Chair of Habitat for Humanity 
International, and has worked as an attorney in private 
practice. Ms. Glover holds degrees from Boston, Yale, and Fisk 
Universities.
    Mr. Howard Husock is the vice president of research and 
publications at the Manhattan Institute. He previously served 
as a director at Harvard University's Kennedy School of 
Government, and has authored numerous publications relating to 
the non-profit sector and on U.S. housing and urban policy. Mr. 
Husock is a graduate of Boston University.
    Finally, Dr. Xavier Briggs is the vice president of 
economic opportunity at the Ford Foundation. Dr. Briggs also 
holds an appointment as professor of sociology and planning at 
MIT, and previously served as an Associate Director in the 
White House Office of Management and Budget, as well as in 
HUD's Office of Policy Development and Research. Dr. Briggs is 
a graduate of Columbia, Harvard, and Stanford Universities.
    For those who have not testified before, each of you will 
be recognized for 5 minutes to give an oral presentation of 
your testimony. And without objection, each of your written 
statements will be made a part of the record.
    Mr. Cabrera, you are now recognized for a summary of your 
testimony.

  STATEMENT OF ORLANDO J. CABRERA, OF COUNSEL, SQUIRE PATTON 
  BOGGS; AND FORMER ASSISTANT SECRETARY FOR PUBLIC AND INDIAN 
   HOUSING, U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

    Mr. Cabrera. Good morning, Mr. Chairman, and thank you. 
Thank you, Chairman Hensarling, Ranking Member Waters, and 
members of the committee for inviting me to testify. I 
approached this a bit differently knowing who was going to be 
on this panel. The folks to my left are all people I know or 
know of. Two of them in particular are both professional and 
personal friends and they speak to issues that I think are 
critically important, but in which I have less experience.
    For example, Renee ran a housing authority, Xavier was a 
policy-driven person at HUD entirely, and Mr. Husock knows a 
lot more about markets.
    I decided that I would bore everybody and go inside 
baseball, and inside baseball means to focus on metrics.
    The overarching theme of this testimony is not so much 
focused on HUD's past or previous impact. Over the decades, HUD 
and its many arms have undoubtedly impacted housing policy in 
both positive and negative ways. If we know that HUD has 
impacted Federal policy unevenly, and it has, I propose that 
there is a value in exploring how we can achieve better future 
housing policy outcomes.
    Better serving all Americans, but particularly the elderly, 
the disabled, very low-income, and low-income Americans should 
always remain at the core of our Nation's housing policy. 
Moving towards a legislative policy that is relevant to our 
current century, not the 20th Century, would be a great step in 
helping HUD evolve.
    Change is inevitable for HUD. Its personnel is aging and 
many are retiring. Important institutional memory has been lost 
already. Similarly, its current infrastructure is also aging, 
making it harder still to capture important and relevant data.
    Many believe that one way to improve HUD's impact would be 
to begin new programs or housing solutions or do away with 
them. Perhaps. But my starting point would be a bit different. 
I believe that the way to improve HUD's impact is through the 
more adept and intensive use of technology.
    More specifically, a critical area at HUD that deserves 
focus, careful design, and investment is information 
technology. Providing HUD with the appropriate tools that 
relate to our century's housing policy model and needs will 
produce better outcomes for residents and taxpayers.
    There are three essential steps to improving outcomes: 
define your desired result; know more about how to measure that 
result; and do what needs to be done faster and better than was 
previously the case.
    In HUD's case, the first step should be to decide that HUD 
needs to break away from the silo organizational mold that HUD 
uses currently, into a more fluid and flexible organization. 
HUD has always depended on silos out of statutory and 
operational necessity. Though silos were probably appropriately 
designed organizational components decades ago, those silos are 
now impediments to improving HUD's capacity to more effectively 
serve our Nation.
    Essentially, HUD has four basic rules: HUD allocates 
resources; HUD insures financial products; HUD regulates 
certain stakeholders; and HUD is charged with policing and 
prosecuting fair housing violations. That is a relatively 
narrow set of tasks which is currently bundled in a far more 
expansive organizational setting at HUD.
    HUD's organization and activities should be integrated into 
an information technology platform that allows it to more 
effectively perform those four basic roles in a more seamless 
manner than is currently the case.
    Secondly, the American taxpayer would benefit if HUD 
developed more relevant metrics than those currently being 
used. More specifically, Congress should begin by first 
providing HUD with the tools that HUD needs to capture not just 
better and relevant data, but complex, fluid data that can lead 
to defining better outcomes for very low-income and low-income 
Americans.
    Integrating technology would, for example, allow us to 
improve people's lives by measuring and determining better 
educational achievements, health care services, and other 
important services in a more dynamic way than is currently 
possible. That would mean better outcomes for residents and 
better efficiencies for the Federal Government.
    HUD desperately needs the appropriate tools to obtain 
usable, scalable, sharable, and relevant information that all 
of HUD's stakeholders can use. Providing HUD with the right 
data tools and maintaining those tools will go further towards 
creating a more efficient system than nearly any other 
investment.
    I believe that it would be time well worth the effort to 
match desired housing policy outcomes in a new century with the 
new century's information technology tools needed to 
appropriately achieve those outcomes.
    Thank you again for your invitation to testify. I am happy 
to answer any questions you may have.
    [The prepared statement of Mr. Cabrera can be found on page 
63 of the appendix.]
    Chairman Hensarling. Thank you.
    Ms. Glover, you are now recognized for your testimony.

STATEMENT OF RENEE LEWIS GLOVER, FOUNDING AND MANAGING MEMBER, 
                    THE CATALYST GROUP, LLC

    Ms. Glover. Thank you. Chairman Hensarling and Ranking 
Member Waters, thank you for the opportunity to speak with you.
    I think it is very important when you think about the issue 
of housing to remember that America is a nation of immigrants, 
so new people will continue to come and new challenges are 
going to arise. And poverty is not a static condition; it is 
also a function of what happens in the economy and in the 
larger social setting.
    So I think when you look at how we are making progress, we 
have to put it into the context of what is going on in history 
and also in the economy, because we made great progress over 
the years. And I think if we take an objective measure of the 
programs that have been implemented to date, we will see that 
many of the families who have been assisted have gone on, have 
made progress, and are contributing to our country.
    But for the Great Recession--we cannot underestimate the 
impact that it had on the housing programs and how families are 
faring.
    And I think it is now universally accepted that there is 
income disparity, and so that has implications in terms of what 
type of investment we need to make to have a strong America.
    One of the things that I have enjoyed with serving Habitat 
for Humanity is that we have observed that not only here in 
America, but all over the world, housing is at the center of 
everything that is needed to have a great society. It is the 
center of great education outcomes, health outcomes, healthy 
families, and healthy children, and there are no great nations 
without great communities.
    So the question is, what should we be doing as a country to 
rebuild, because there is no question that America is the 
greatest nation in the world. But how do we help everyone in 
the country achieve the American Dream?
    And Dr. Martin Luther King challenges us to build the 
beloved community here on earth. And that means all of us are 
God's hands, feet, and heart to build the society. So when you 
think about that, we cannot afford to leave one child behind. 
And the question is, how do we go about doing it?
    In my written testimony, I mention that there have been 
several big ideas that have been put forth and have been 
implemented successfully. But no program is perfect because 
human beings are doing the implementation. So the question is, 
can we lift out the lessons learned and best practices to see 
what has worked and then do more of what has worked and less of 
the things that haven't worked?
    So what are the things that we have learned? Well, first of 
all, we know that every American needs a decent home and a 
great community.
    Second, we know that home ownership, where feasible, builds 
stability and helps build wealth.
    And we have also learned that government must be a part of 
the solution. But the question is, how do you go about doing 
that?
    And so we have learned that providing mobility and choice 
is important, that ending concentrated poverty is important, 
and I think the HOPE VI program and the Promise Neighborhood, 
Promise Zones programs have shown that with people coming 
together and connecting the dots, we can make a huge 
difference.
    I am sure that in all of your different localities, you 
have seen that with a small investment and working in public/
private partnerships and leveraging private resources and 
creating environments where the foundation community, the 
families themselves and the larger community come together, we 
can create additional communities of opportunity.
    We have also learned that the Section 8 voucher, if it is 
implemented appropriately, can provide access to communities of 
opportunity. And that is because the families who are using 
these resources want better lives for themselves and their 
children. I know that with 100 percent certainty.
    The other thing is we need to incent innovation. And I 
think we have seen that the Moving to Work (MTW) deregulation 
program has been very effective in incenting innovation and 
creativity and leverage. And so, I would simply say, let us 
continue to invest in our families and in our country, and 
working together, there is nothing that we can't do.
    I appreciate the time and thank you for the opportunity.
    [The prepared statement of Ms. Glover can be found on page 
70 of the appendix.]
    Chairman Hensarling. Mr. Husock, you are now recognized for 
your testimony.

   STATEMENT OF HOWARD HUSOCK, VICE PRESIDENT, RESEARCH AND 
             PUBLICATIONS, THE MANHATTAN INSTITUTE

    Mr. Husock. Thank you, Chairman Hensarling and Ranking 
Member Waters, for the invitation.
    As we reflect on the 50th anniversary of the founding of 
HUD, the chairman is quite correct that President Johnson 
focused his hopes on uplifting the poor. That should mean 
helping as many of those of low income as practical, ensuring 
that low-income housing is in good condition, and helping the 
poor move up toward the middle class.
    On these counts, HUD's housing assistance today is falling 
short. There is little doubt, of course, that HUD does serve 
the poor, often the very poor. Half of households living in one 
or more of the one-million-plus public housing apartments or 
two-million-plus housing choice voucher units earn less than 
$10,000 a year. Many are not, however, moving up the economic 
ladder.
    HUD data shows that the median tenure in public and 
subsidized housing is more than 9 years, 4 years longer than 
the time limit for cash public assistance. In New York City, 
that figure is 17 years.
    Put it this way: The face of HUD is the face of long-term 
poverty in the United States. In part, that is a result of the 
way that we have structured the rules of the system. And I hope 
to offer some suggestions that will have some bipartisan appeal 
to improve that situation.
    First, a little bit more background. Both public housing 
and voucher tenants who work hard to increase their income face 
what amount to high marginal tax rates. Unlike private market 
tenants who sign a lease at a fixed rent, tenants in HUD's 
affordable housing must pay rent equal to 30 percent of their 
income. That means the more they earn, the higher their rent.
    Just as bad, our subsidized housing system often consigns 
the poor to live in the sort of conditions that public housing 
was specifically designed to replace. In New York City, for 
instance, a 2014 report by the City's Community Service Society 
noted mounting resident outcry about elevator breakdowns, water 
leaks, and untreated mold, and said that the housing authority 
should qualify as the City's largest and worst landlord. A 2010 
report by Abt Associates found that the public housing system's 
capital needs as a whole topped $21 billion.
    It is fortunate then that there are important green chutes 
of reform among local housing authorities, chutes which the 
Congress and HUD should strongly encourage.
    As Renee Glover mentioned, Moving to Work, a waiver program 
that has been, to date, limited to just a few localities, 
allows the flexibility authorities need.
    A 2014 report by Abt Associates found that 20 of 34 Moving 
to Work authorities changed their rent rules to encourage self-
sufficiency. Eleven have adopted work requirements, and eight 
have adopted time limits for some new tenants, all with the 
goal of encouraging upward mobility.
    In San Bernardino, California, the housing authority, in 
explaining why it has asked for short-term assistance, 
emphasizes twin goals: making room for families who qualify for 
aid and have faced long waiting lists; and helping current 
tenants outgrow the need for help. Self-sufficiency should be 
the goal, it says.
    Incomes among those admitted to the authority under time 
limits have risen by more than 12 percent, employment by more 
than 17 percent. I know that in Atlanta, work participation 
went from under 20 percent to over 60 percent.
    Spreading a Moving to Work approach through all or at least 
many of the 3,000-plus public housing authorities would help 
align our housing policy with our overall social policy.
    There are other imaginative innovations going on. In New 
York, Mayor Bill DeBlasio has announced plans to begin to lease 
underused public housing open land for new private apartment 
construction with ground lease payments available to fund the 
system's desperate maintenance backlog.
    The fledgling HUD Rental Assistance Demonstration program 
can be a means through which authorities avoid being penalized 
when they save money. That happens when they reduce operating 
costs and find their subsidy is reduced the next year.
    A guaranteed fixed-per-unit HUD annual payment can be used 
as a bond payment guarantee that can bring in private 
investment capital to do such things as upgrade antiquated 
heating systems that hemorrhage money.
    At its 50th anniversary, it is time for HUD to think about 
how it can become not just a funder of housing, but an agency 
that can enable and encourage some of the reforms that I have 
discussed. At the same time, it must never forsake its fair 
housing mission to ensure that any household that can afford a 
home or a rental unit not be turned away on the basis of race 
or ethnicity.
    It should also begin to encourage experimentation with new 
housing forums. One of the core ways to make housing affordable 
is to have more units in the same amount of land: density. And 
HUD can encourage experimentation.
    In short, the time is right for HUD to encourage upward 
mobility and to foster it and to adjust its rules so that it 
does so.
    Thank you very much.
    [The prepared statement of Mr. Husock can be found on page 
81 of the appendix.]
    Chairman Hensarling. And Dr. Briggs, you are now recognized 
for your testimony.

     STATEMENT OF XAVIER BRIGGS, VICE PRESIDENT, ECONOMIC 
                OPPORTUNITY, THE FORD FOUNDATION

    Mr. Briggs. Thank you, Chairman Hensarling, Ranking Member 
Waters, and members of the committee.
    In light of HUD's 50th anniversary, I would like to begin 
by putting policy goals briefly into some historical 
perspective.
    The earliest goal of Federal housing policy was to help 
meet the needs of factory workers and their families when 
America entered the First World War. When public housing came 
along, there were additional goals. The official ones 
emphasized upgrading slums and providing stable, low rents to 
workers who had been affected by the Great Depression. But the 
large-scale construction that the public housing program 
required also served the interests of the building industry and 
organized labor.
    The same mix of public and private purposes was true for 
FHA mortgage insurance, which has benefited millions of 
families as well as the real estate industry.
    When HUD was created, it inherited this mix of public and 
private purposes, but the economic and social contexts for 
Federal housing policy has begun to shift in very significant 
ways. First, after several decades of economic growth and 
broadly shared prosperity in America, cities in many parts of 
the country were hit with large-scale disinvestment and 
joblessness.
    And second, migration patterns had transformed the racial 
and economic makeup of cities profoundly. In this context, and 
particularly after widespread civil unrest, media accounts and 
major works of scholarly research began to ask whether well-
intended housing policies were solving problems or making them 
worse.
    Lesson one is that these sweeping changes in America meant 
that HUD and its congressional overseers began to grapple with 
fundamental questions about the proper goals of Federal housing 
policy and, by many measures, began to swim against the tide of 
larger economic and social trends virtually from day one.
    Lesson two is that we have been set back at a great human 
and fiscal cost by our inability to agree enough on the goals 
of Federal policy, let alone the most effective means of 
achieving those goals. Without agreement, we lack adequate 
commitment. And without that commitment, we struggle to make 
more progress.
    Fast forward 50 years from the founding of HUD and this 
lack of agreement on fundamental goals manifests in several 
powerful ways. First, Federal housing assistance produces 
enormous benefits, as you have heard. But we are not focusing 
enough resources or reform on the biggest problem: the 
structural gap between income and housing costs at the base of 
the American economy, especially for the lowest-income 
households.
    The biggest drivers of this gap by far are local housing 
costs and tenant incomes, not HUD's operating capacity or 
practices. As wages stagnated after the 1970s, especially for 
those earning below the median, and as an older stock of 
affordable units was demolished or converted and land prices 
climbed significantly in many local markets, millions of the 
lowest-income households in America came to face back-breaking 
rents, homelessness, or endless commutes to find affordable 
housing.
    Those two driving factors--along with a policy decision in 
recent years to add new vouchers to combat homelessness, 
especially among veterans--explain why the total costs of the 
voucher program, to cite one example, have grown. It is very 
much a function of our strategy since the 1970s to rely 
primarily on the private rental market to meet the housing 
needs of those who cannot afford decent housing.
    It is also increasingly clear that the costs of this quiet 
crisis of unaffordable housing show up in children's health, 
emotional development, and educational achievement, as well as 
adults' health, mental health, and employment. So we pay 
severely, both through government spending on health, criminal 
justice, and other sectors, and also through lost productivity 
and well-being.
    Second, several of the most important levers for affecting 
the structural affordability gap lie outside HUD's budget and 
authority. The Tax Code is the most obvious example. It helps 
to modestly expand the supply of affordable rental housing, 
most directly through the low-income housing tax credit, but it 
also structures the rewards of work, for example through the 
earned income tax credit, and it targets most Federal housing 
aid, through the mortgage interest tax reduction, to the middle 
class and the affluent rather than the very low-income 
households who face the most unaffordable costs.
    Third, housing assistance has not been designed or funded 
to act as a cure-all for poverty. In other words, housing 
affordability is a necessary, but not a sufficient, condition 
to produce economic mobility and self-reliance.
    Fourth and finally, we will exacerbate the challenges we 
face if we seek to expand housing assistance only within the 
limited geography that contains most affordable housing now. 
That is, we will deepen the problems associated with 
geographically concentrated poverty if we don't take deliberate 
steps toward greater inclusion.
    In closing, it is vital to make housing policy a force for 
self-reliance and economic mobility. To accomplish this, four 
things need to happen. First, we need to go beyond the HUD 
budget for leverage. Second, for HUD and other agencies, it is 
vital to make our housing delivery system as efficient and 
well-targeted as possible. Third, it is crucial that we support 
effective pro-work housing policy for households that are not 
elderly or disabled. Fourth and finally, we should make 
inclusionary housing a full and integral part of the larger 
agenda of Federal housing policy to help States and localities 
encourage more balanced development and mitigate harmful 
segregation.
    Thank you again for the opportunity to testify.
    [The prepared statement of Dr. Briggs can be found on page 
55 of the appendix.]
    Chairman Hensarling. The Chair now recognizes himself for 5 
minutes.
    Ms. Glover, on page seven of your testimony with respect to 
work, you mention for non-elderly, able-bodied adults, it 
``restores dignity and has proven to be a positive game changer 
for families and their children.''
    Specifically, you mention in your testimony the Moving to 
Work demonstration project and you say that it ``has had 
transformational impacts and proven very effective.''
    Would you elaborate on your views, please?
    Ms. Glover. Yes, thank you. When we adopted the work 
requirement for non-elderly, able-bodied families, we did this 
in consultation with the residents who were affected by those 
policy changes. And what we consistently heard is that the 
requirement was the additional boost coupled with an investment 
when we had the deregulation agreement and we also were 
operating under the HOPE IV grant.
    We were able to invest in long-term counseling and coaching 
to help families rebuild their resiliency, change their 
mindsets, and deal with the actual family problems that they 
were confronting.
    And in terms of families' self-worth, we heard consistently 
from each of the families that work restored dignity and 
respect, and it also gave them the ability to have more 
mobility and more control over their lives.
    And so when I talk about game-changing impacts, this really 
was transformational for the families. And all of the research 
that has been done shows that not only do the families start 
out working, but if they lost their jobs, they have been able 
to go back into the workforce and find new jobs and they have 
resiliency.
    And so the work success has been greater than 90 percent 
with the appropriate support and the right policies.
    In terms of Moving to Work being transformational, it 
allowed agencies in their local communities and certainly in 
Atlanta working with the local players to design programs that 
work. All real estate is local and it is very hard for anyone 
in a central location to devise the solutions for very 
different geographies.
    Chairman Hensarling. I think I heard all of the witnesses 
speak laudably of work programs, but specifically with respect 
to the Moving to Work program. Just a show of hands, would each 
of you advocate expanding that current HUD program? Just a show 
of hands.
    Thank you.
    Mr. Husock, you actually had some data with respect to at 
least one of the Moving to Work programs, in San Bernardino, 
where incomes rose 12 percent and employment rose by 17 
percent. Have you looked at other Moving to Work programs? Is 
the data similar?
    Mr. Husock. I have not, but the Abt Associates report that 
I cite refers to a number of other programs with similar 
results. And as Renee Glover knows well, in Atlanta the work 
participation rate was about 18 percent when the work 
requirement began and rose to over 60 percent.
    I believe that is correct, Renee?
    Ms. Glover. That is correct.
    Chairman Hensarling. Also, again, I will note that all four 
witnesses raised their hand to the Moving to Work question of 
expansion.
    You mention, Mr. Husock, in your testimony about the, and I 
don't know your exact phrase, but essentially punitive marginal 
rates for those who expand their employment opportunities. So 
what public policy might that suggest?
    Mr. Husock. I think within the Moving to Work framework, 
and remember there is nothing mandatory in Moving to Work, I 
think that is the most important thing to understand, it gives 
flexibility to local housing authorities based on their 
understanding of local conditions.
    But in terms of that specific question, right now if I am 
leasing a unit in a public housing authority, my rent goes up 
as my income goes up. That is a counterproductive approach.
    And so I think the right way to do that, to repair that, is 
either to allow under Moving to Work authorities to set fixed 
rents; you sign a lease just like you do in the private market. 
Or to have--I know in some authorities, they have set so-called 
income bands, that is, within a certain framework your rent 
will not go up until you earn a good deal more. That would be 
second best.
    Chairman Hensarling. The time of the Chair has expired.
    The Chair now recognizes the ranking member for 5 minutes.
    Ms. Waters. Thank you very much, Mr. Chairman.
    First of all, let me make sure that the record reflects 
that those of us on this side of the aisle, as I am sure on 
that side of the aisle, all believe in work. We believe that it 
is important for people to have jobs. We also agree that it 
gives a sense of dignity and pride to work.
    Many of us started working when we were 12 and 13 years 
old. I, for example, started working at age 13 in a segregated 
restaurant; I cleaned tables where I couldn't eat. So let us be 
clear about the value of work and what we think about it. 
Because we do not want people to leave with the impression that 
somehow there is a difference in what we think about work. We 
think that is very important.
    Secondly, we need to get some facts on the record. How many 
of you believe that HUD is important, it has done credible work 
in providing housing opportunities, even though you may 
disagree about how to do it better? How many agree that it has 
in 50 years been important? Okay, so let us all agree on that.
    How many agree that even with new technology and some of 
the reset of the recommendations that you may have about not 
increasing the rent, that if we are to deal with the unhoused 
population in this country, we are going to have to spend 
credible resources in order to do it? How many people would 
agree with that? Okay. Thank you very much.
    Now, let us move to the discussion about Moving to Work. 
Who can tell me what percentage of public housing tenants are 
physically disabled, mentally disabled, and incapable of being 
put on jobs? What percentage of public housing tenants in 
America fall into the senior, too old to go to work, too 
disabled to go to work, too mentally incapacitated to go to 
work? Who knows that information?
    Mr. Briggs?
    Mr. Briggs. Thank you, Ranking Member Waters. The answer is 
a majority of housing-assisted households, particularly those 
on vouchers and public housing, face those barriers to work. 
They are either elderly or they are disabled. I have spent a 
good deal of time with these households and also the work ready 
and the working, many of them working poor, but working hard, 
and as you said, everyone believes in the pride and the dignity 
that comes with work. They are struggling to make ends meet, 
they are juggling an awful lot.
    But it is extremely important, whether you are looking at 
Moving to Work, whether you are looking at Moving to 
Opportunity or other important efforts that HUD has launched 
over the years, not to be confused about what is attainable for 
a given population.
    Ms. Waters. Okay. I hate to cut you off, but I only have so 
much time. So one thing that we must agree on is that there are 
tenants in public housing, no matter what you do with Move to 
Work or anything else, who can't live anyplace else but in 
subsidized housing, such as public housing, when we talk about 
seniors who are too old to work, when we talk about the 
disabled, when we talk about the mentally incompetent.
    When we went to this program, this homeless program today, 
most of the women were 60 to 75 years old. And they are not 
going to get hired by anybody, particularly in this market that 
we have where people who are graduating from college can't find 
jobs. Nobody is going to hire them. How many people really 
understand that, that you have people who fall in this age 
range who are not going to get any jobs?
    How many people understand that this population that we are 
talking about is something that we have to recognize is a 
population that we are going to have to deal with and subsidize 
whether we like it or not?
    Now, having said that, how many of you have the statistics 
on Move to Work programs that can tell me exactly how many 
people who have gotten job training and have moved on to a job? 
Where is the data? Where are the stats? Who has that 
information in this country?
    Yes, ma'am, Ms. Glover?
    Ms. Glover. There have been a number of studies done by 
economists and universities. And I will commit to this 
committee to reach out to the various networks. I think one of 
the problems is that the research has been done, but it is all 
over the country in different databases or whatever.
    And I think it would be magnificent if this committee could 
have that information through a central funnel. Because I think 
that you will see that the policies that have allowed for 
innovation at the local level has yielded tremendously positive 
results and--
    Ms. Waters. But the point is, we don't have the data, we 
don't have the information. Nobody knows. People talk about how 
great Moving to Work is, but nobody can tell me exactly what 
has been accomplished. We don't have the information.
    I yield back.
    Ms. Glover. I will get it to the committee.
    Chairman Hensarling. The time of the gentlelady has 
expired.
    The Chair now recognizes the gentleman from Missouri, Mr. 
Luetkemeyer, chairman of our Housing and Insurance 
Subcommittee.
    Mr. Luetkemeyer. Thank you, Mr. Chairman.
    And I welcome the individuals testifying today.
    Mr. Cabrera, you had some interesting comments a while ago 
with regards to trying to have a different model for HUD to be 
able to deliver services and provide and support housing in 
this country.
    One of the problems that Secretary Castro talks about, and 
you mentioned as well, is use of technology. They need more 
funds to be able to do that, to do the simplest things such as 
certifying some of the individuals to be able to do certain 
things and different groups to be able to do certain things.
    So, that is certainly an area that we need to consider, and 
I appreciate you pointing it out.
    You also talk about how they need to be thinking outside 
the box and redo their model. Can you elaborate a little bit 
more on that and give us some ideas and what kind of costs you 
are talking about?
    And is this something that HUD can restructure themselves 
or do we legislatively have to make the changes?
    Mr. Cabrera. Absolutely, I would like to pick up where we 
just left off on MTW as an example.
    Mr. Luetkemeyer. Sure.
    Mr. Cabrera. I think the stress over MTW has to do with, I 
hate to say this sometimes, but has to do in part with its name 
and in part with when it was passed. MTW, from the perspective 
I had, really had to do with maximum local flexibility. And in 
terms of innovation, I think that is always a good thing, 
particularly with high-performing housing authorities. Housing 
authorities are State-chartered entities, not just local 
entities. They are created by States.
    They are created for the purpose of being property 
managers, for the most part. That is what they have been since 
their inception. Almost until very, very recently, the last 
decade, those housing authorities that are more forward-
looking, that have been more transformational, they tend to be 
MTWs and the reason that they tend to be MTWs is because they 
align their local concerns first as opposed to Federal 
concerns. That is why MTW has value.
    I am sure that if you were to ask the--I think we are up to 
36 or 39--MTW jurisdictions, their statistics on who it is that 
has been moved to work, they would tell you, but they would 
also tell you, in their own plans, people who should not be 
working are not being compelled to do anything. Folks who are 
elderly or disabled aren't being compelled because that is 
generally the case in most low-income housing plans in most 
jurisdictions.
    What this is really about has as much to do with how it is 
housing authorities operate, have them be bigger market 
participants than they currently are, as anything else. Housing 
authorities traditionally were not that. Housing authorities 
were essentially these trapped, real estate, property 
management concerns that had a very restrictive environment. 
When you un-trap it, they do some pretty remarkable things.
    The other thing I would add is I think one of the things 
that people might be missing has to do with competition. There 
has to be a more competitive environment in order to improve 
results and outcomes and make it a more efficient process. So 
much of what we are facing right now in terms of the debate 
over, because I think Xavier got it right, the debate is 
holding up progress.
    But there are some places nobody debates, there are some 
things nobody debates.
    One of those things is that we have to do this better. And 
doing things better necessarily means better and more 
competitive settings. So those are just two quick examples. I 
am trying to make sure you can ask whatever you want of 
somebody else.
    Mr. Luetkemeyer. Yes, thank you. That's interesting.
    Last week, I had the opportunity to talk to some housing 
folks in Great Britain. They have a unique system there, where 
17 percent of the people are on public housing. And because 
they can no longer afford to support that level of people on 
public housing, they are trying to find a way to move some of 
them off of the public housing rolls into their own home, and 
figure out a way if they can come up--and this obviously 
doesn't work with the elderly or disabled, but it does work for 
the folks who are gainfully employed or can be gainfully 
employed.
    And so they get into the public/private partnerships and 
some of the rent money, the subsidy goes toward the purchase 
of, the lease purchase of the property. What do you think about 
something like that? Is it feasible here in this country? It 
doesn't solve all the problems, but I think there is a group of 
people that this may help. What do you think?
    Mr. Cabrera. The British conversion of public housing to a 
public/private model depends upon essentially creating 
inclusionary areas that are thereafter sold and taxed in order 
to fund what we here call down payment assistance. I think from 
a market perspective, a lot of market participants would 
struggle with that.
    The second thing I would say that would need to be worked 
out is financing of something like that. It would be a very 
difficult thing to finance.
    The British system has worked marvelously for Britain 
because they work under a different real estate regimen than 
the United States. We are both common law, we are both heavily 
statutory, but the way that property is owned in Britain is 
very different than the way it is owned in the United States, 
in many cases.
    It is a very difficult question to answer. But certainly, 
you see little pieces of that, right, in some parts of the 
United States. In California, there are inclusionary--
    Mr. Luetkemeyer. I see we are out of time.
    I appreciate your response, and I look forward to the 
discussion.
    Thank you, Mr. Chairman.
    Chairman Hensarling. The time of the gentleman has expired.
    The Chair now recognizes the gentlelady from New York, Mrs. 
Maloney, ranking member of our Capital Markets Subcommittee.
    Mrs. Maloney. I thank the gentleman for yielding and for 
calling this hearing.
    And I thank all of the panelists for your work in this 
important area. And congratulations to HUD at 50. They have 
played an incredible role in the great City that I am 
privileged to represent, New York, and I would say the whole 
country in building and maintaining affordable housing.
    But I am distressed about the future because there is no 
funding, there is really no Federal program and housing is so 
expensive it is hard for a city or a State to go forward with 
their own plans. Specifically in public housing in New York, 
there are over 900,000 people on a waiting list to get into 
public housing. There is no money for new housing. The money 
for maintenance is being cut back dramatically.
    One of you testified that the public housing authority was 
the worst landlord in the country, but that is because they 
don't have the money to maintain the housing.
    I think it was Mr. Husock who mentioned the program that 
Mayor DeBlasio has come forward to take vacant land or land 
within the housing project--the tenants there say they need 
that land for playgrounds and for fresh air--and lease it. And 
the proposal is that half of the money would go to market rate 
to maintain the modernization and the running of the housing 
authority because they are running at a deficit, and the other 
half would be ``affordable.''
    But the tenants in the public housing in my district tell 
me that it is not affordable to them. It is really a higher 
income than they could ever afford to be in.
    So I don't see the future. And even that is not a 
sustainable program. Once all the land is leased, you don't 
have the money to maintain the affordable housing that is right 
there in public housing, which has been a huge success in New 
York in assisting low-income households.
    The only Federal program that is out there now is the 
Housing Trust Fund, and even that is a limited one. And the 
first funding awards will be focused on creating affordable 
housing. But what we are confronting in New York and probably 
in the rest of the country, and I am going to address my 
question to Mr. Briggs, is that we can't even afford or the 
money is not there to maintain the housing that is already 
there so that you do have the broken elevators and everything 
else.
    And so, where are we going?
    Now, the tenants are afraid that if they take their 
playground land and put it into affordable housing that they 
can't afford to live in, then the next step would be what 
happened in Chicago. You tear down the public housing to build 
or you start renting the vacant units to market rate. And where 
is your very important housing goal of the Fair Housing Act 
which is responsible for enforcing and Congress in creating and 
has been a positive thing?
    So I am really concerned about this. And I think the Ford 
Foundation, I am going to publicly ask you to do a study and a 
report on where do we go. It is not maintainable, it is not 
feasible. And the tenants are very afraid. They don't want them 
to take their open land, but then they think their apartments 
are next. It is on the water, and it is beautiful housing. They 
think their apartments will be next, and they will say, well, 
we will rent your apartment out at market rate to sustain the 
system.
    And right now all of the money coming for maintenance in 
public housing is Federal money now, it is all Federal money, 
very little from the city and States. Their budgets are 
starved. So we face a real crisis for affordable housing.
    One of the most popular programs in Congress has always 
been the 202 affordable housing program for seniors. There is 
now no new money for new starts. All of the money in that 
program is now just going to maintenance. So all of the Federal 
housing programs are not creating new housing, they are going 
to maintaining the system that exists, but not doing it at an 
appropriate level because there is not enough money to pay for 
the repairs that need to take place to modernize it.
    So it is a crisis. I would like to congratulate HUD on 50 
years of not only providing affordable housing, but really 
economic development, I would say, in this great country, 
across this country. But I am concerned about the future 
because there is no funding on a Federal level.
    I know that the chairlady would support additional funds 
and I believe many Democrats, but given the reality of the 
makeup of Congress it is not going to be there. So it is a 
crisis. And I am asking really for the Ford Foundation and 
other foundations to look into what do we do as a Nation for 
affordable housing when all of the existing programs are not 
being funded to go forward?
    Chairman Hensarling. The time of the gentlelady has 
expired.
    The Chair now recognizes the gentleman from New Jersey, Mr. 
Garrett, chairman of our Capital Markets Subcommittee.
    Mr. Garrett. Thank you, Mr. Chairman, for scheduling this 
very important hearing.
    One of the goals of this hearing is to examine the extent 
to which HUD has improved access to affordable housing while 
reducing poverty, and potential housing innovations designed to 
encourage self-sufficiency.
    So I am going to begin, Mr. Chairman, maybe with this 
comment that may surprise you, that I am going to agree with 
our ranking member on a couple of points. The ranking member 
made a comment as to how hard it is for even college graduates 
to get a job. And she is absolutely right. After 7 years under 
the Obama Administration and their economic policies, it is 
still hard for a young person to go through 4 or 6 or 8 years 
of college and come out and get a job. And still today, she is 
absolutely right, and it is deplorable that young people cannot 
find work in this environment.
    And it is therefore hard for seniors to get a job as well. 
And I would look forward to working with the ranking member to 
try to reverse a number of these economic policies that have 
had a devastating impact on both seniors and college graduates.
    The second point that I agree with the ranking member on is 
the dearth of data on this matter. Now, that is a little bit 
confusing because someone pointed out that in a press release 
of the ranking member, she says that numerous studies have 
highlighted that Moving to Work demonstration programs have 
shortcomings. So I am not exactly sure whether she agrees that 
there is a dearth of data or there is data.
    But let us take it from what the panelists have said. Ms. 
Glover has said there is no coordination of the data that is 
out there.
    Is that your basic--
    Ms. Glover. Yes, the data is there, it is really funneling 
it into policies.
    Mr. Garrett. Right. And I really do appreciate the fact 
that you are willing to go out and try to bring all that data 
together so that at the next hearing on this, both the ranking 
member and I would have a compilation on that.
    But shouldn't the agency that is responsible for doing this 
have already collected the data? Hasn't the Moving to Work 
program--Mr. Husock, you are nodding your head. How long has 
this program been put in place, the Moving to Work?
    Mr. Husock. Since 1998.
    Mr. Garrett. Since 1998, so it has been in place that long, 
but we are still sitting here without a compilation of all the 
data. Why is that?
    Mr. Husock. Congressman, it is because, as a general rule, 
what MTW means is that you are exempt from the Housing Act of 
1937. And so therefore, by virtue of that, what HUD has said 
is, you are released from all of these things that you are 
responsible to us for, including reporting data.
    Mr. Garrett. But there are studies out there, right?
    Mr. Husock. Yes, but the studies are, how might I put this, 
they are somewhat--they bend one way or the other, how about 
that?
    Mr. Garrett. Should the public be concerned that we have a 
Federal agency that is allowing money to be spent and has 
absolutely no data to support whether those programs are 
working or not? If there are studies out there that are bent 
one way or bent another way, shouldn't the public be concerned 
that their government really isn't spending the money the most 
effective way?
    I think they are, because that goes to another point of the 
ranking member that I agree with as well. She says the 
majority--or actually, Mr. Briggs, you answered this question 
for her. Her question was, what is the percentage of people in 
public housing who are disabled, who are senior citizens, who 
can't work, and you said the majority of the people. And I 
think the rest of the panel agreed.
    But if we are a country of finite resources, you all agree 
there is not unlimited dollars to pay for all these programs, 
right? If we are a country of finite resources, don't we really 
want to make sure that those limited resources actually get to 
the people who need it the most: the disabled, the senior 
citizen, the person who can't work because of this disastrous 
economy that we are in right now because of this 
Administration? So shouldn't the limited dollars actually go to 
those people most in need?
    Ms. Glover, you seem to be ready.
    Ms. Glover. Yes, well, I wanted to--
    Mr. Garrett. Yes?
    Ms. Glover. --refine the answer.
    Mr. Garrett. Okay.
    Ms. Glover. The data, in terms of the traditional measures, 
whatever the conditions are that are set forth in the Moving to 
Work agreements, has been gathered by the Department. Over and 
above that, because of the transformational impact, agencies 
have gone out to professionals, either economists or colleges 
and universities and those who look at the work, to 
independently validate and verify the--
    Mr. Garrett. I get that, and what the validation would 
show, studies or anything else aside, is that the actual 
agencies that are running these programs and even more every 
day are actually asking to be put into that program.
    Isn't that correct, Mr. Husock, that more people want to be 
into these programs?
    Ms. Glover. Oh, absolutely. And so the reason that HUD may 
not have the research and studies is that is over and above the 
requirements. But the required data that is needed to validate 
is indeed--
    Mr. Garrett. Thank you, Mr. Chairman. I think that is 
really all the data we need, is that more people want to be in 
these programs than before.
    Thank you.
    Chairman Hensarling. The time of the gentleman has expired.
    The Chair now recognizes the gentlelady from New York, Ms. 
Velazquez.
    Ms. Velazquez. Thank you, Mr. Chairman.
    And to all the panelists, welcome to la-la land. We suffer 
here in Washington from amnesia. For people to say that things 
are so bad under this Administration, they are quick to forget 
that at the height of the economic crisis, we were losing 
roughly 800,000 jobs a month. Obama wasn't in the White House 
back then.
    The other day in my committee, the Small Business 
Committee, they talked about the highest numbers of regulations 
issued by any Administration, this one. Well, I put out a 
report on analysis conducted by The Washington which that 
concluded that the highest numbers of regulations put out by 
any Administration was under George W. Bush.
    Oh, my Lord.
    Anyway, so let us talk about housing.
    Mr. Cabrera, many housing authorities, including NYCHA, New 
York City housing plan to use an expanded RAD program to 
finance public housing repairs. However, we still do not know 
the impact of RAD on residents. And HUD has not indicated 
whether they will pursue an optional final RAD evaluation that 
will include a resident survey.
    Do you think it is necessary to fully understand the impact 
RAD has on tenants before rushing to expand the program?
    Mr. Cabrera. I don't think that the purpose of RAD--I think 
the purpose of RAD is focused upon the properties more than 
anything else. And the reason for that is because, in the case 
of New York for example, there are--
    Ms. Velazquez. But who lives in those properties?
    Mr. Cabrera. Residents.
    Ms. Velazquez. And the program is to serve who? The 
tenants, residents, right?
    Mr. Cabrera. Residents, but--
    Ms. Velazquez. So you don't think that it is important for 
us to know or to have any input from those who are going to be 
subjected to this program?
    Mr. Cabrera. I think it is more important to take--let us 
see, there are 153,000 units online for NYCHA right now out of 
190,000. And trying to figure out how to put the remaining 
37,000 or 40,000 units back online to serve those residents, it 
seems to me, would be the higher priority. That is what NYCHA 
is trying to do.
    Ms. Velazquez. But that has to be coupled--those are not 
RAD units, sir.
    Mr. Cabrera. No, no, that is not it. Public housing units, 
190,000. They have approximately 153,000 units online, if I 
recall correctly. Just my recollection.
    Ms. Velazquez. Yes.
    Mr. Cabrera. It is 10 years old now, but it is rough.
    Ms. Velazquez. Have there been any studies conducted to 
show RAD or MTW will generate the billions needed from the 
private sector? In New York, we have a $17 billion backlog of 
needed repairs and improvements. Has there been any study?
    Mr. Cabrera. RAD was just enacted out of appropriations in 
late 2012. There would be no study because they are really just 
now starting. RAD is just now going, they just increased it to 
185,000 units, and for some of those units, it makes sense to 
refinance and convert, and for others, it doesn't. There would 
be no study.
    Ms. Velazquez. So before we embark on that journey of 
expanding RAD, shouldn't we know what it will accomplish, in 
terms of the numbers and the resources that it will bring from 
the private sector, before we expand it?
    Mr. Cabrera. I think at the end of the day, we already know 
when the private sector will get in to finance or not, and they 
will get in to finance when underwriting the deal makes sense. 
In the case of New York, some of those deals are not going to 
make sense, which is why New York is going through the exercise 
that it is going through.
    But in other parts of the country, it is indispensable to 
go through RAD, because they can't otherwise keep the units.
    Ms. Velazquez. I am not saying not to expand or not go into 
it. What I want to make sure is that the public assets are not 
privatized. Because once they are privatized, we are going to 
lose them.
    Mr. Briggs, the Housing Trust Fund, which should see its 
first funding award next year, is the only Federal program 
focused on creating affordable housing for extremely low-income 
households. Why is this an important piece of Federal housing 
policy today?
    Mr. Briggs. It is extremely important, ma'am, for two 
reasons. One, the source of revenue, mainly Fannie Mae and 
Freddie Mac. In other words, it looks beyond the appropriations 
envelope which has been insufficient for years and years now to 
meet these needs.
    And number two, because of the targeting you mentioned. 
Without Federal capital, as Mr. Cabrera said, to make these 
financings work, they do not pencil out, they will not happen.
    Ms. Velazquez. Thank you.
    I yield back.
    Chairman Hensarling. The time of the gentlelady has 
expired.
    The Chair now recognizes the gentleman from Texas, Mr. 
Neugebauer, chairman of our Financial Institutions 
Subcommittee.
    Mr. Neugebauer. Thank you, Mr. Chairman.
    I want to go back to Mr. Cabrera for just a minute and talk 
about these data and the metrics. We have been talking about 
Moving to Work and there is not data in one place. And Ms. 
Glover makes a great point there.
    But if you are an agency and you are going to do pilot 
programs, doesn't it make sense for you to measure the success 
of those programs?
    Mr. Cabrera. As a pilot program for services, absolutely, 
yes.
    Mr. Neugebauer. Does anybody disagree that if you are an 
agency or a company or anybody that is doing a pilot program, 
that you should measure the success of that program so that you 
can determine whether--because the word ``pilot,'' to me, 
means, let us try this on a limited basis and see if it works 
on a larger basis.
    Mr. Briggs, would you agree or disagree with that?
    Mr. Briggs. I would strongly agree with that, sir. However, 
as a long-time evaluator and a funder of evaluation--
    Mr. Neugebauer. I'm sorry, I don't have time for a lot of 
elaboration. But I think I--
    Mr. Briggs. No, sir, but I wanted to explain myself.
    Mr. Neugebauer. The point I wanted to be on the record here 
is that we need--if we are going to have HUD expand its 
mission, I am a little perplexed by some of my colleagues who 
don't want to do these programs because of the limited 
resources.
    The whole purpose of doing these programs, RAD, whether it 
is Moving to Work, I think Mr. Husock mentioned looking at 
ground leases and thinking outside the box, is that we are 
trying to expand the resources coming into housing for American 
families. But you can't do that if you don't think outside the 
box.
    But if you are going to think outside the box, it does make 
sense to me, and maybe it is just the old accountant in me, 
that if we are going to try these things we need to be able to 
measure their success.
    Ms. Glover, one of the things that I think you said on page 
10 of your written testimony is that after a period of 
transition of larger agencies to Moving to Work and the 
deregulations of smaller agencies is accomplished, the public 
housing side of HUD should reposition itself to become an asset 
manager and work with its various customers to agree on a set, 
desired outcome based on congressional mandates.
    What do you mean that HUD should become an asset manager?
    Ms. Glover. What I mean is looking at the impact that the 
investments that are being made by HUD is having on the 
families, the communities, and the cities. And so that is the 
skill set. And one of the things that Mr. Cabrera talked about 
are the systems in order to do that.
    And so when you gather the data, if you can imagine with 
over 3,000 housing authorities, there is a lot of data coming 
in consistently. And so taking the time to streamline the 
systems, agree on outcomes.
    I think one of the problems is that too many of the 
regulations are so prescriptive that you are measuring too many 
things. So if you can simplify it to identify the 5 or 10 
things that you want to achieve through a program, and then 
bring that data in, then all of this discussion about impact, 
data, and all of that will be at the fingertips and you can 
push a button and be able to roll up all of that data. So a 
good asset manager will be able to have that data readily 
available to inform the policymakers.
    Mr. Neugebauer. Go back to the Moving to Work. One of the 
things that we hear from folks is bringing more capital to the 
table. In your experience with Moving to Work, were you able to 
attract private sector capital with some aspects of that 
program?
    Ms. Glover. Absolutely. And I want to just take 2 minutes 
on the RAD demonstration. The way the additional capital comes 
in for underwriting purposes is that you took the operating 
subsidy and the capital funds, which basically made an 
underwritable rent that could then be used to go to the private 
market because the private investors are going to want to know 
if debt is raised that there is sufficient rent to cover not 
only the operating costs, but the debt cost.
    And by doing public/private partnerships you are able to 
attract other resources because the foundations will typically 
play their other resources. And so these are complicated deals, 
but through leverage and looking at things in creative ways, it 
can attract additional resources to the programs.
    Mr. Neugebauer. Thank you, ma'am.
    Chairman Hensarling. The time of the gentleman has expired.
    The Chair now recognizes the gentleman from Missouri, Mr. 
Cleaver, ranking member of our Housing and Insurance 
Subcommittee.
    Mr. Cleaver. Thank you, Mr. Chairman.
    I was interested in the conversation for a lot of reasons. 
One, when the question came about when the program started, I 
turned to Mr. Green immediately and said it was approved in 
1996. I know because I was mayor and ran the HUD housing 
authority. Or more accurately, I appointed the board that ran 
the housing authority.
    The program was actually implemented in 1998. The problem, 
and I think we are debating issues that are not the problem, 
from my perspective, is that this program is more of a 
deregulatory program than it is a Moving to Work program.
    I think HUD made a mistake frankly in trying to bill it as 
something else. Deregulation of requirements in the voucher 
program is what made, in some quarters, the Moving to Work 
program attractive. And I think the Moving to Work program, 
which started as a demonstration project, can be massaged and 
developed into a program that is workable.
    And keep in mind, I think it is important to understand 
this, that the Moving to Work dollars actually takes money out 
of the voucher program and sends it elsewhere. And so it 
creates some problems.
    One of the assumptions is that private investment or 
investors are waiting to become part of this program. I would 
like for any of you to address the issue of private investment 
and how they are standing in line to invest in the program.
    Mr. Cabrera?
    Mr. Cabrera. Congressman, it is good to see you, as always. 
Moving to Work does not take Section 8 dollars and move them 
somewhere else.
    Mr. Cleaver. Voucher? Yes, yes.
    Mr. Cabrera. Moving to Work removes the division between 
Section 8 of the Housing Act of 1937 and Section 9 of the 
Housing Act of 1937 to allow fungibility, if that is what you 
mean by taking money.
    Mr. Cleaver. That is exactly what I mean.
    Mr. Cabrera. That is a very different issue. It just 
becomes one big pool, not two or actually three divided pools. 
So that is the one. It is not so much a correction, it is that 
it is not a pool, it is a pooling. And that pooling allows for, 
it actually is part of my answer, that pooling allows for the 
leveraging of capital in order to undertake many of the 
developments that MTW jurisdictions undertake.
    And a person who did that marvelously is sitting to my 
left. So I am going to let her answer.
    Mr. Cleaver. But before--I would like anybody to answer, 
even people sitting out there or walking the halls. What I am 
interested in is somebody telling me about the private sector 
waiting to become involved.
    Mr. Cabrera. Oh, I'm sorry, I misunderstood your question. 
So what happens is, remember that when you have land that is 
public housing it is subject to a deed of trust unless it is 
converted out. And so therefore the public housing authority 
generally goes out and looks for private sector developers.
    Mr. Cleaver. Right.
    Mr. Cabrera. They do public/private partnerships. And yes, 
most MTWs, candidly beyond MTWs, these days a lot of housing 
authorities, MTW and not, are becoming not just property 
managers, which is what they traditionally were, but 
developers. They go out, and they partner with a developer, 
they develop units, using typically, as Howard said, the low-
income housing tax credit or the private activity bond 
operation. And they develop it, absolutely that is moving in 
that direction inexorably.
    Mr. Cleaver. You do understand that the low-income tax 
credits are becoming increasingly difficult to obtain?
    Mr. Cabrera. Oh, Congressman, I ran a housing finance 
agency. They have been difficult to obtain since 1996. They are 
a very competitive setting. But private activity bonds are--
private activity bonds generally are upon application because 
volume cap is basically flush everywhere.
    Mr. Cleaver. Yes.
    Mr. Cabrera. So there are options. The point is you have 
two options.
    Mr. Cleaver. Yes, we are together on that.
    Ms. Glover?
    Ms. Glover. In terms of what Mr. Cabrera was talking about, 
by eliminating the silos between the funding, an agency is able 
to devise a strategic plan and say, for example, like with the 
issues of homelessness, the support of housing, put the money 
in a pool, use that to attract a private sector development 
partner to go out to the market to either raise tax credits or 
private activity bonds so that the housing can be developed and 
supported.
    The key thing is that the amount of subsidy that is needed 
when added to the tenant rents has to be sufficient so that the 
debt service or other requirements can be serviced. And by 
having the flexibility of the money, that enables creativity on 
the ground as opposed to having to act strictly--
    Mr. Cleaver. My time has expired. I'm sorry.
    Thank you, Mr. Chairman.
    Chairman Hensarling. The time of the gentleman has expired.
    The Chair now recognizes the gentleman from Wisconsin, Mr. 
Duffy, chairman of our Oversight and Investigations 
Subcommittee.
    Mr. Duffy. Thank you, Mr. Chairman.
    And I appreciate the panel being here.
    I think oftentimes when you talk about HUD and poverty, 
there is an urban perspective or urban prism which we look 
through. I come from rural Wisconsin and this is the third year 
we are hosting a summit, a homelessness and hunger summit where 
we bring in all the players who help provide housing and food 
assistance to those who are in need, to talk about the bright 
spots of who is using the community and programs in the best 
way to help the most people out.
    I am honored this year that Secretary Castro is going to 
come. I think it is important that he sees a little different 
perspective on poverty. And we are honored that he is going to 
come and participate in our third annual event.
    But I hope as we have this conversation, we make sure we 
look at everybody who comes across these difficult problems in 
their life.
    I am not sure if the chairman gave this quote, but in 1964, 
President Johnson said, and we have heard this quite a bit, 
``We have declared unconditional war on poverty. Our objective 
is total victory. I believe that 30 years from now Americans 
will look back upon these 1960s as the time of the great 
American breakthrough toward the victory of prosperity over 
poverty.''
    Does anyone on the panel believe that we have actually met 
that objective, we have reached that victory?
    Mr. Briggs and Ms. Glover, we have?
    Mr. Briggs. Thank you, Mr. Duffy.
    Mr. Duffy. Yes.
    Mr. Briggs. Any skilled evaluator would recommend that we 
ask the ``but for'' question: But for HUD or other agencies for 
that matter, what would conditions on the ground be, what would 
the outcomes be?
    But if you ask the question, would poverty be worse and 
would the poverty rate be higher, but for HUD, the answer is 
unequivocally yes to both those questions.
    Mr. Duffy. I am going to reclaim my time because, first of 
all, I want to be clear. I agree with the mission, we have to 
help people out. And I agree with Ms. Waters, we want to, and I 
think the whole panel, our objective should be to put people 
back to work.
    I'm sorry, Ms. Glover, did you want to add something?
    Ms. Glover. I was just going to add that if you put 
everything in perspective, not only are the HUD programs 
operating in the larger economy, but there are things that 
happened to the economy as well. And there is no question that 
the great recession was a setback for many people. There are 
many more people living in poverty today than there were 
before.
    And so I think that if you try to keep everything static, 
it is not realistic that the larger impact of the economy is 
not going to pull some people down.
    I think the question is, it is a but for. And people have 
risen and they are coming, but we have new people coming into 
the economy. So the question is, can we adopt policies that are 
flexible enough that we can react and respond to the needs? And 
it is important that people are rising up.
    Now, the income gap is a huge challenge and we have to stay 
focused on building the middle class. That is absolutely the 
right focus. But HUD's programs have indeed helped. And I think 
the innovations of the last 50 years have been very impactful 
and we need to do more of those.
    Mr. Duffy. And I am going to give you some more time in one 
second, Ms. Glover.
    First of all, I don't think the mission of defeating 
poverty has been met; poverty still exists in our communities. 
And I think that was the mission of President Johnson.
    I get concerned because in our communities, I hear there 
are a lot of people who have disabilities, but there are 
disabilities that they can actually overcome if they get some 
assistance and some help. So not long-term disabled, but with 
some help, especially for mental illness, they can get out of 
the assistance of government and back into self-sustainability.
    And I think it is important that we make sure that we 
provide that assistance and help to them.
    I am not going to ask another question except to Ms. 
Glover. I have to tell you, your biography and all the great 
work that you have done in the Atlanta housing authority is 
absolutely amazing. I have about a minute left. Would you just 
kind of recap your story and the successes that you have had in 
Atlanta?
    Ms. Glover. In the short time I have, we were fortunate to 
be able to have great public/private partnerships in solving 
very deep issues. And we worked not only with private sector 
players, but with the residents, and the larger community. And 
it was really about a community coming together to solve 
problems where people were living in absolutely deplorable 
conditions.
    And so we have been able to help families move responsibly 
from those terrible places and actually redevelop mixed-income, 
mixed-use communities, supportive housing. We have had families 
invested in terms of changing mindsets, rebuilding lives, and 
building family resiliency.
    And so we are going to do more of that and that is 
continuing. And we have leveraged--we took $300 million and 
leveraged over $3 billion of economic impact and investment.
    Mr. Duffy. Not many people have the opportunity to take 
dysfunctional organizations and turn them into well-functioning 
organizations that actually help so many people. You are one of 
the bright spots, so thank you.
    I yield back.
    Chairman Hensarling. The time of the gentleman has expired.
    The Chair now recognizes the gentleman from Texas, Mr. 
Hinojosa.
    Mr. Hinojosa. Thank you, Chairman Hensarling and Ranking 
Member Waters, for holding this important hearing on HUD and 
its impact on Federal housing policy.
    I would also like to thank our panelists for testifying 
today.
    Housing programs under HUD are a lifeline for many of our 
children in low-income families, yet we have long waiting lists 
for HUD programs.
    As we celebrate HUD's 50th anniversary, I urge my 
colleagues on both sides of the aisle to work together to 
increase Federal investments in innovative programs that 
address housing and at the same time take a holistic approach 
at helping our disadvantaged citizens move up the economic 
ladder.
    My first question is for Ms. Renee Glover. As you know, 
there has been much talk about consolidating many of the rural 
housing programs currently under the United States Department 
of Agriculture into the Department of Housing and Urban 
Development. Given the difference in the populations and the 
geographic areas served by rural housing programs as compared 
to HUD programs, as well as the manner in which HUD and the 
USDA service their respective housing programs, do you think 
consolidation is a good idea?
    Ms. Glover. Let me say this. I am not familiar with the 
proposal, but the concern would be that resources are not lost 
if there is a consolidation. And I think what happens too often 
is that the consolidation occurs, but the resources that were 
being dedicated to that population aren't following the clients 
and customers who are being served.
    I think one of the big issues in terms of supporting 
families with mental disabilities is that as the State mental 
institutions were closed, the thesis was that the resources 
that were being dedicated there would follow the families and 
then there would be supportive housing developed in local 
communities to support those families to be successful.
    But what happened is that as those institutions were 
closed, the resources didn't follow, they were redirected to 
other resources and challenges. So I think the devil is always 
in the details.
    So I think that a thoughtful approach should be looked at, 
but also with the strong recommendation that the resources that 
are there not get lost in the consolidation.
    Mr. Hinojosa. Thank you.
    My next question is for Dr. Xavier Briggs. In 1970 we had 
300,000 surplus of low-cost rental units relative to the low-
income rental households. According to the national low-income 
housing, today there is a shortage of 7 million affordable 
rental units. What are the factors driving the shortages in 
affordable housing? What should the Federal Government be doing 
differently? And are market-based approaches working?
    Mr. Briggs. Thank you, Mr. Hinojosa. You have two main 
drivers, sir. You have the drivers holding down incomes and 
then you have the drivers driving up costs. In other words, 
this is a structural gap that was decades in the making; it 
didn't happen overnight.
    Mr. Hinojosa. That is right.
    Mr. Briggs. And there are significant forces operating on 
both the cost side of the equation and the income side of the 
equation.
    In brief, on the cost side of the problem or the gap, you 
have largely local land-use decisions and other factors making 
it expensive, in some jurisdictions impossible, to develop 
affordable housing or to preserve what we have. And we have 
seen a tremendous erosion of supply and that contributes to the 
numbers that you cited. That is on the cost side of the 
equation.
    On the income side of the equation, as the Members know 
quite well--this has been widely documented in the media--we 
have seen a lot of wage stagnation in this country. The minimum 
wage is stuck at a quite low level in inflation-adjusted terms. 
So we have had stagnant incomes, limited incomes, rising 
housing costs, that produces the kind of shortfall that you 
called off.
    One clear implication of that applies to Congress as a 
whole and not only this committee, with due respect. You don't 
want to fight a challenge like that or address a gap like that 
with one hand tied behind your back. You need to address both 
the income and the cost side of the equation or we won't be 
successful. We won't act in a way that is commensurate with the 
scale of the problem, which we are paying for in so many 
systems, health, education, and beyond.
    So, the Tax Code is implicated here. The minimum wage is 
implicated here. And yes, local regulations also are implicated 
in this gap between income, especially from wages, and housing 
costs on the bottom.
    Mr. Hinojosa. You have made some very good points and I 
wish we had more time to let me ask two more questions. But my 
time has expired. I yield back.
    Chairman Hensarling. The time of the gentleman has expired.
    The Chair now recognizes the gentleman from Pennsylvania, 
Mr. Fitzpatrick.
    Mr. Fitzpatrick. Thank you, Mr. Chairman, for calling this 
hearing.
    And I thank the witnesses for their testimony here today.
    I think it is important that after 50 years declaring the 
war on poverty and against homelessness and close to $2 
trillion spent, it is appropriate that we look back and ask, 
how are those dollars allocated and how are they spent?
    My first question is for Dr. Briggs. On page seven of your 
testimony--and by the way, your background is in urban 
planning, and I come from Bucks County, Pennsylvania. I have 
lived my entire life in Levittown, which is a community that 
was hyper-planned, some say; a lot of returning World War II 
and Korea veterans were able to obtain a house in that 
community based on the VA mortgage.
    But what I noticed growing up in that community was that in 
Levittown there seemed to be in the 1970s and 1980s more jobs 
than houses. And so, the community was doing well. And in my 
experience in looking back, communities that had more houses 
than jobs are those that are in trouble.
    You say on page seven of your testimony as part of your 
solution of making housing assistance a contributor to self-
reliance and economic self-sufficiency, there is a quote from 
your testimony: ``It is crucial that we support effective pro-
work housing policy for households that are not elderly or 
disabled.'' And you go on to mention that work has long been a 
prized and deeply felt goal and that ``Work provides income and 
dignity.'' And I agree with all of that.
    So my question to you, Dr. Briggs, is, would you support 
work requirements for non-elderly and non-disabled, able-bodied 
working individuals perhaps as a condition of the Section 8 
housing voucher?
    Mr. Briggs. Thank you. It really depends on how they are 
constructed. Sorry to offer what might be a complex answer and 
we want these things to be simple, but they are not.
    I don't think that an across-the-board work requirement 
would produce the effect that we want to see. There is a 
tremendous motivation to work, amongst the great majority of 
housing-assisted households. The question is, what jobs are 
available? Are we investing in skills? Are we investing in work 
supports like child care? And are there good, affordable 
housing alternatives available for households that obtain work 
and wish to move out?
    If you look at the number-one reason people leave housing 
assistance, it is because they get work. So the motivation is 
clearly there and we need to be extremely careful about across-
the-board requirements.
    Mr. Fitzpatrick. But do you support a requirement for work 
for able-bodied individuals?
    Mr. Briggs. The one answer I can give you is that it very 
much depends on how that is constructed. It depends on whether 
it comes with supports for child care, intensive skill 
investments, the kinds that we see in Jobs Plus.
    I also would agree with Mr. Husock that there are 
disincentives in rent policy now. And if we change those--as 
Jobs Plus did, and it was very rigorously evaluated and 
produced, as you probably know, with very significant effects--
that would be a very, very smart way to go and to support work 
by very poor households.
    Mr. Fitzpatrick. Mr. Cabrera, do you support work 
requirements?
    Mr. Cabrera. I am very much in the same place as Xavier. 
The reason is because here is what happens. If you wind up with 
work requirements and you have someone, and I will just come up 
with a common example, a single mother with more than one 
child, you have just essentially kept her from housing and they 
will wind up homeless. So you are going to be dealing with it 
as a Federal subsidy on the homeless side.
    I am not in favor of compelling that kind of activity 
generally. It is just it is something I hope we will work 
through, but it is very difficult for me to--
    Mr. Fitzpatrick. How about local flexibility, providing 
flexibility to State and county housing authorities, public 
housing agencies?
    And Ms. Glover was responding to a question from the 
ranking member earlier on that question of local flexibility 
where if you can tailor programs, federally funded programs to 
what is happening in a local community, should a local 
community be permitted to have some sort of work requirement as 
a condition preceding to getting a Section 8 certificate, 
especially for those communities where you have generational 
poverty and one generation after the other living in the same 
community on the same Section 8 housing certificate.
    Mr. Cabrera. That is extraordinarily rare, just so I say 
it. The concern I have is that compelling thing, we as a 
government compelling people to do things in that way is 
something I think I am just anathema to. So it is going to be 
really hard for me to say yes to that.
    Mr. Fitzpatrick. Ms. Glover, you were cut off earlier when 
you were responding to the ranking member's question and it had 
to do with providing local flexibility to housing authorities. 
You had some experience in Atlanta with that. Can you expand on 
that briefly?
    Ms. Glover. Yes. I think it is very important that the 
people on the ground and in the locality have the flexibility 
to do the problem-solving, because first, they understand the 
conditions, they are able to reach out to the other players.
    And on the work requirement, what we did with disabled and 
elderly persons is they were exempted from the requirement. But 
those families who were able-bodied, we work with the various 
civil society groups to do job training, counseling, child 
care. We had a whole network of some 60 organizations to 
support success. And I think if you provide those types of 
resources and the program is both job and/or education, you are 
building resiliency and the ability to be successful--
    Mr. Fitzpatrick. Thank you.
    Chairman Hensarling. The time of the gentleman has expired.
    The Chair now recognizes the gentleman from California, Mr. 
Sherman.
    Mr. Sherman. Mr. Chairman, thank you for holding this 
hearing today.
    We had an interesting subcommittee hearing yesterday on 
much the same subject. And I commend, for those of you looking 
for more material to read, to look at the transcript of that 
hearing.
    We dealt with flood insurance, which is important to me, 
even though I represent a city built in the desert in the midst 
of a drought, and H.R. 3700, which I think has come up in this 
hearing, has some excellent provisions to encourage 
condominiums.
    I own two suburban homes so I am a really bad advocate for 
it, but I am an advocate for multifamily housing. It is 
affordable, and our homeless problem can also be viewed as just 
a housing affordability problem. And we have to help our 
struggling families. It is more energy-efficient and even more 
energy-efficient than the housing itself is that multifamily 
housing is the first step toward a viable mass transit system. 
And it offers flexibility.
    Told by many that if you buy a place, you really shouldn't 
buy a place if you are not pretty certain you are going to be 
there for 4 or 5 years, a lot of people can't know where they 
are going to live 4 or 5 years from now. Every 2 years, people 
suggest that I stop living where I am living and find another 
line of work.
    [laughter]
    With this in mind, Mr. Cabrera, what can HUD do to 
encourage the private sector to expand its role in providing 
affordable housing? I refer to property owners, managers, 
developers. And are there regulations in place at HUD that 
discourage private participation in affordable housing?
    Mr. Cabrera. I think that the best step forward in terms of 
what HUD can do is to provide the market with as much certainty 
as it can have and to have reasonable standards that can be 
met.
    One example is actually cited in my written testimony and 
it is in the case of FHA. There is a program, an FHA program, a 
very useful program, their 223(f) program, it is a refinancing 
program. It helps reposition affordable housing deals that are 
already going to be impacting the Federal budget if they go 
sideways and helps them become healthier.
    And a couple of years ago, HUD revisited its underwriting 
guidelines, it increased the reserve requirements in the FHA 
program, the 223(f) program, by a multiple, I mean, several 
multiples. It was huge. And what it did was it killed deals. So 
today you have 50 percent fewer units being financed through 
the 223(f) program as there were just 24 months ago.
    And similarly, there are other places there that 
conversation pops up. It popped up in RAD. So they will make a 
rule, the rule negatively impacts the utilization of RAD, the 
rule in that case, again, had to do with operating reserves 
because what they make is a bureaucratic decision that isn't 
aligned with the marketplace and it is--
    Mr. Sherman. I am going to try to sneak in one more 
question.
    Mr. Cabrera. And it gets messy.
    Mr. Sherman. We need 300,000 or 400,000 new constructed 
apartments every year. Last year, we just got 255,000. That is 
up 37 percent from the year before, but it is still inadequate. 
In addition, we are losing 100,000 to 150,000 units to 
obsolescence and those are the units that are affordable.
    Are there any government programs that we can tweak here 
that would be helpful in getting some of these 150,000 units 
rehabilitated rather than withdrawn from service? And what else 
can we do to solve the supply crisis?
    Mr. Cabrera. The supply crisis, from a HUD perspective, can 
be helped simply by revisiting how it is HUD approaches all 
underwriting and facilitating responsible underwriting wherever 
it can without adding things that don't make sense in the 
marketplace.
    Now, I have to laud the prior Administration and the 
current Administration. Secretary Donovan did a terrific job of 
having that revisited and it improved. That isn't to say that 
it improved perfectly. It did not. And I think what happens is 
that just knowing HUD as I do, what you see is retrenchment, 
and that retrenchment causes static in the marketplace and it 
keeps good deals from happening.
    One of the things HUD can do is just learn how to get out 
of the way. You don't always need to be in the way. You need to 
be in the way when the taxpayer is at risk in an unreasonable 
way. But there is always going to be risk. If there isn't risk, 
there is a problem.
    Mr. Sherman. Thank you.
    Chairman Hensarling. The time of the gentleman has expired.
    The Chair now recognizes the gentleman from Kentucky, Mr. 
Barr.
    Mr. Barr. Thank you, Mr. Chairman.
    And I thank the witnesses for your testimony.
    I represent a congressional district in central Kentucky 
where the Lexington housing authority is one of those Moving to 
Work programs that has been a great success. Austin Simms, who 
runs that housing authority, does a great job and I think is a 
model for how the Moving to Work program offers that 
flexibility and fungibility of dollars. And they have made it 
work very, very well.
    I do want to revisit this issue of work requirements that 
my colleague Mr. Fitzpatrick was talking about, because I think 
that we need to look at work not as a punishment, but as a 
blessing that we want to celebrate, a road to self-sufficiency.
    And I noted, Mr. Cabrera and Mr. Briggs, your reticence to 
fully embrace universal work requirements as a condition of 
Section 8 or other public housing assistance. But I want to 
challenge you a little bit on that because it seems to me that 
if the concern is child care, or if the concern is job training 
as a necessary part of that, we could certainly offer that as 
part of modernization of a universal work requirement.
    So what is it that is holding you back from fully embracing 
a work requirement, not as a means of punishing beneficiaries, 
but as a means of recognizing that poor people in need of 
housing are not liabilities to be managed, but they are assets 
and they have tremendous potential if we offer them the 
blessing of work?
    Mr. Cabrera. Then I think I would answer in the following 
way: It shouldn't be a precondition of someone being housed. It 
should be structured in a different way such that it is not 
compelling someone to work, it is compelling someone to get in 
a position to find better work. That is a very different 
proposition.
    If the issue becomes, look, if you live here you need to 
improve the circumstances in which you are in in order to 
improve your economic circumstance for your family and for 
yourself, I think--I can't speak for my colleagues, but I am 
willing to bet my bottom dollar that they will all agree that 
would be the right way to go.
    What I am concerned about is having as a precondition, is 
you cannot live here unless you have a job. That, I think, is 
counterproductive.
    Mr. Barr. If I could just jump in there. What if it is not 
that, but for--and by the way, the Congressional Research 
Service is telling us here that non-elderly, non-disabled 
households account for a full 45 percent. So it is just not 
true, at least according to the Congressional Research Service, 
that all of the Section 8 beneficiaries out there, assisted-
housing individuals are elderly or disabled. There are plenty 
of non-elderly, non-disabled people out there who don't have 
wage income, but yet are receiving taxpayer assistance for 
housing.
    Any thoughts?
    Mr. Cabrera. The vast majority of the people who are 
already receiving a wage income and who are receiving, let us 
go by each pot, Section 8, work for a living, those people 
actually that is not the issue.
    I think if I am hearing this correctly, and I am asking to 
be corrected if I am not, you are concerned about those who 
aren't, who can work, but don't. And if that is the case, 
usually it has to do with whether it is we are willing to, as a 
Federal entity, help them put themselves in the best position 
and condition housing upon that. In that case, sure.
    Mr. Barr. And maybe if they are underemployed or need 
skills, maybe it shouldn't just be a work requirement, but a 
requirement that you are either working or that you are 
pursuing some kind of job training, and that as part of that 
assistance, there is some child care if that is needed.
    Mr. Cabrera. Absolutely. That is the biggest piece. In my 
experience, and again I am going to defer to Renee, but in my 
experience the biggest impediment for, and the person I have in 
mind is a single mother with children, is their children. The 
reason they have such a tough time going out there is because 
someone has to deal with their children.
    Mr. Barr. Absolutely.
    Mr. Cabrera. That is why I am saying the training and the 
child care is sensible.
    Mr. Barr. And that is perfectly reasonable; that makes 
sense.
    And Ms. Glover, I think to your testimony earlier, that is 
how you all did it successfully in Atlanta.
    Ms. Glover. That is correct.
    Mr. Barr. 1Mr. Briggs, did you have a--
    Mr. Briggs. Thank you, sir. Just briefly, so the effects of 
any such requirement would depend on a few things, actually 
quite straightforward to think about: conditions in the labor 
market; provision of work supports; and those other factors 
that directly affect families' or an adult's ability to get and 
to keep work, let alone to get ahead.
    There is a great deal that is appealing in principle about 
the compact, Congressman, that you are outlining.
    Sadly, I have to note that we have a history as a country 
of reneging on some part or another of that deal, either not 
funding the child care or not directing TANF funds, State TANF 
funds properly to job creation in order to improve labor market 
conditions.
    There is, I think you are right, sir, great bipartisan 
agreement that we should move in this direction. The question 
is how, and the different pieces of that compact do need to be 
in place.
    Mr. Barr. Thank you. My time has expired, but I would love 
to work with all of you on crafting that. Thank you very much.
    I yield back.
    Chairman Hensarling. The time of the gentleman has expired.
    The Chair now recognizes the gentleman from Missouri, Mr. 
Clay, ranking member of our Financial Institutions 
Subcommittee.
    Mr. Clay. Thank you, Mr. Chairman, and Ranking Member 
Waters, for conducting this hearing on the future of housing in 
America.
    Let me start with Mr. Briggs. And I would like to ask about 
the effectiveness and cost trends in the housing voucher 
program. President George W. Bush's Fiscal Year 2008 budget 
request said the Section 8 tenant-based rental assistance 
program is the Federal Government's foremost program for 
assisting low-income families to rent decent, safe, and 
sanitary housing in the private market.
    Based on an assessment of the program, this is one of the 
Department's and the Federal Government's most effective 
programs. This program has been recognized as a cost-effective 
means for delivering safe, decent, and sanitary housing to low-
income families, that in fact in nominal terms the average 
housing assistance payment per voucher rose from $7,553 in 2010 
to just $7,673 in 2014, an increase of only 1.6 percent. During 
the same period, rent and utility costs in the private market 
rose by 10.6 percent.
    If the purpose of today's hearing is to discuss the impact 
HUD has had on housing policy in reducing poverty over the past 
50 years, it seems that the Section 8 housing choice voucher 
program is something we should hold up and celebrate.
    Mr. Briggs, what recommendations do you have for how we 
might build on the success of this program?
    Mr. Briggs. Thank you, Mr. Clay. I have several 
recommendations for this committee. The first is to ensure that 
funding for the program is sustained as a floor. Congress, this 
is both sides of the aisle, have acted, as you are well aware, 
to cut veterans' homelessness. That was a direct result of 
adding incremental vouchers in the form of VASH as they are 
known. That is a direct indicator that this program is this 
country's number-one tool for preventing or ending homelessness 
on a very large scale.
    And as you have heard Orlando and other panelists 
underscore, we will pay the costs somewhere, we will pay them 
in health, we will pay them in jails, we will pay them in 
education systems, in some system if we don't address these 
needs. It is tremendously important to fully fund the program.
    There are flexibilities. There are connections between the 
vouchers and capital subsidies so the vouchers can help to 
ensure that the very lowest-income households can lease up in 
mixed-income dwellings. Those kinds of things should be 
encouraged, in my judgment, by Congress.
    HUD is on that road already. It needs the encouragement, 
and streamlining can be a part of that.
    Mr. Clay. This program is one of the government's most 
cost-effective programs. And your recommendation is that we 
continue to support it and fund it properly?
    Mr. Briggs. That is absolutely right, sir. And from the 
standpoint of national policy goals, expanding it would be the 
right thing to do. I would add, however, that the big costs in 
the program are not driven by HUD practices, but by local 
housing costs that HUD doesn't control directly and by tenant 
incomes which are a story about what is going on in the wider 
economy.
    So again, if we want to address this, we need HUD to be at 
its best, but we also need more than HUD. This program is 
extremely important and effective.
    Mr. Clay. Thank you for your response.
    Mr. Cabrera, you mentioned the 223(f) program. And a few 
years ago, you said HUD increased reserve requirements and it 
killed deals. What do you think, in the best of all worlds, 
should HUD do now to revise this program?
    Mr. Cabrera. The 223(f) programs, like all FHA programs, is 
an insurance program. There is a private lender that is lending 
the money that is being insured. They are the at-risk party, 
the initial at-risk party. And the Federal Government's 
responsibility is when the deal goes sideways.
    Have faith in the private market. The private market knows 
that deal as well as anybody. The person looking for the deal 
knows it. The idea that the private market would request or 
want or require rather one set of reserves and that HUD would, 
in order to get the insurance which would facilitate the deal, 
multiply that by 3, 4, or 5 times is a little bit out of 
kilter.
    Mr. Clay. Thank you for that. I think HUD needs to 
reevaluate what they have done.
    Mr. Cabrera. Yes, sir.
    Mr. Clay. Thank you, and I yield back.
    Chairman Hensarling. The time of the gentleman has expired.
    The Chair now recognizes the gentleman from North Carolina, 
Mr. Pittenger.
    Mr. Pittenger. Thank you, Mr. Chairman.
    And I thank each of you for being here with us today.
    I am reading from the HUD Inspector General's report that 
was a report from the period through 2014 up through this month 
in 2015. And in the report, they identify, I will just read to 
you, ``Public housing authorities provide public housing 
assistance to as many as 25,226 families whose income exceeded 
HUD's 2014 eligibility income limits.''
    Going on, they say, ``As a result, HUD did not assist as 
many low-income families in need of housing as it could have. 
We estimate that HUD will pay as much as $104 million over the 
next year for public housing units occupied by over-income 
families that otherwise could have been used to house eligible 
low-income families in need of housing assistance.''
    How do you respond to that, Mr. Cabrera?
    Mr. Cabrera. I struggle with that report. There are 
considerable inaccuracies in the report that I would love to 
have responded to. But the first one is it is 25,000 residents 
out of a pool of roughly 990,000. There are always going to be 
mistakes. Should we fix those mistakes? Absolutely, I am all 
for it. I think that addressing the issue pertinent, but I 
think it is important--
    Mr. Pittenger. Is that kind of glossed over? Can we fix 
mistakes?
    Mr. Cabrera. No, I don't think it is being glossed over. I 
think what has to happen is we have a system that encourages 
how we count income for public housing in very strange ways. 
And I don't question that there are people who are wrongly 
over-income in public housing.
    Mr. Pittenger. Let me give you some income amounts. Los 
Angeles, the member with the highest income earned, $132,224. 
New Bedford housing, the member with the highest income earned, 
$129,789.
    Mr. Cabrera. Right. But Congressman, under the Brooke 
amendment, 40 percent of public housing units have to be leased 
to people at 30 percent of area median income (AMI) and below. 
Everything else is really up to the housing authority. And to 
some degree, some of those folks are going to be outside of the 
bandwidth anyway.
    I am not encouraging this, I am not saying the result is 
good. I am saying it is not throwing the baby out with the 
bathwater--
    Mr. Pittenger. You are doing a good job trying to justify 
it.
    Mr. Cabrera. --it is, let us think about it as opposed to--
let us think about how to solve it as opposed to anything else.
    Mr. Pittenger. No, I think that is what we are about here 
today is reforming and not glossing over things.
    Mr. Cabrera. Right, I would never gloss over it.
    Mr. Pittenger. The American taxpayer really deserves 
accountability on these dollars.
    Mr. Cabrera. Yes.
    Mr. Pittenger. And by just assuming, well, these things are 
going to happen and it is part of the process, I think the 
American people are tired of that. I think they want real 
accountability inside of our government and we are not seeing 
that when we are showing right now that in New York alone there 
are 10,250 people who have over-income housing. Why isn't there 
accountability?
    Mr. Cabrera. I would rather--
    Mr. Pittenger. How do you have people living in housing who 
make $129,000?
    Mr. Cabrera. I would far rather that resource go to people 
who need it than people who don't. I agree with you.
    Mr. Pittenger. I think that is what we are about today. It 
is not the status quo that should be acceptable. I think what 
we are about is bringing reforms in here that make it so we are 
really helping the people who need the help. Nobody is saying 
we are going to take an eraser and erase it all. But what we do 
want to bring is real fiscal accountability back to our 
government and this is part of it.
    If people are abusing the system, and the American taxpayer 
is very tired of that, we need to eliminate the abuse.
    Mr. Cabrera. We agree.
    Mr. Pittenger. Ms. Glover, do you have any comments?
    Ms. Glover. No. My only observation is that we fix the 
problem and not just throw the baby out with the bathwater. And 
too often, problems are fixed where there aren't any. So target 
the correction to the offender and the problem as opposed to 
recasting the entire program.
    Mr. Pittenger. I think you sense from us our interest and 
our commitment to help those who really need the safety net. We 
have always been about that. But I think what we are as much 
about is making sure that the American taxpayer is protected 
and that we not just have a slush fund where there are 100-plus 
million dollars that could be given to people who actually have 
a need.
    Ms. Glover. I couldn't agree with you more.
    Mr. Pittenger. Mr. Husock, do you have a comment?
    Mr. Husock. Yes. The over-income is certainly a problem. 
And Moving to Work (MTW) gives local authorities the chance to 
suggest a time limit and that would address that situation 
quite possibly.
    I think it is just as much of a problem that we have such 
long-term tenancies.
    Mr. Pittenger. Absolutely.
    Mr. Husock. And I would address the committee's concern to 
that as well.
    Mr. Pittenger. I certainly agree.
    Thank you very much. My time has expired.
    Chairman Hensarling. The time of the gentleman has expired.
    The Chair now recognizes the gentleman from Georgia, Mr. 
Scott.
    Mr. Scott. Thank you very much, Mr. Chairman.
    The first thing I want to do is say hello to my good 
friend, Ms. Renee Glover. Your work in housing and your 
contributions to this Nation are just extraordinary and they 
are of a soaring magnitude. And we are very grateful for your 
work and your service. And I personally have enjoyed working 
with you, not only in my tour as Congressman, but as you know, 
I served in the State Senate.
    But before I get to this, I must respond a bit to what my 
ranking leader, Ms. Waters, said. There is this myth that we 
need to put to bed about people not wanting to work, and 
especially people who want to work so badly.
    I represent a district, as you know, Ms. Glover, in the 
State Senate before I got here for 20 years that had most of 
the housing projects in the City of Atlanta. And I knew then 
what the issue was. And that was helping people to get the 
jobs. Started that jobs fair there and it all blossomed up 
every year, as you recall. We worked with that.
    We worked with your formula of using your innovation in 
housing to leverage, for you knew that at the core of this is 
an economic issue. And each year we would do the jobs fair.
    And let me just tell you something, committee members. Last 
year, our jobs fair attracted 20,000 people. We were able to 
get jobs for 5,522 people, 98 percent of whom were African 
American, and most of whom were men. But two categories: 
African Americans and veterans.
    Now, the reason I mention that is these are the two most 
basic groups that are crying out to get help with jobs to help 
stay in their homes. And so there must be a structure, an 
infrastructure that is built, not only just to moan about this 
moving back to work program, yes, but we have to have something 
in there that provides the work, job fairs, other kinds of 
structures, to be able to make sure because people want to 
work. They are not out there not wanting to work.
    We have to research and get into these communities and 
build that structure in there to get the job opportunities to 
them.
    Now, Ms. Glover, Carver Homes and Techwood Homes, it is 
very important that I kind of set the stage for this because 
Carver Homes is located, because many people have been to 
Atlanta, but in order to show what you did, Carver Homes is 
right there where the Atlanta stadium is, the home of the 
Braves. Techwood is up where Georgia Tech is. So if you have 
been to Atlanta, you know where that is.
    Can you share for us a bit, Ms. Glover, how you have used 
this economic leverage and your input in getting jobs for 
people in the community and how that worked in the mixed-use 
projects that you did in Carver Homes and Techwood Homes?
    Ms. Glover. Thank you, sir. And let me return the 
compliment to you. You have been a magnificent public servant 
and an outstanding Congressman and Senator at the State level. 
And I, too, have enjoyed working with you and think the world 
of you. So thank you for all that you do.
    Mr. Scott. Thank you.
    Ms. Glover. In terms of our revitalization of those 
communities, we worked with the private sector, the foundation 
sector, the supportive services sector so that we could create 
communities of opportunity. And those communities were in 
terrible condition when we started in the 1990s. The workforce 
participation was at about 13 percent and people were 
desperately poor. And rather than the families being able to 
rebuild their lives, they were trapped structurally out of the 
mainstream.
    So in working with the families and working with the 
private sector, we were able to create a master plan that 
leveraged the human potential as well as the real estate 
potential. And we always say that all people are children of 
God with unlimited human potential, and so the work was 
directed to tap into that human potential.
    So it is at both ends, so it is working with the real 
estate and that leveraged typically 10 to one of the public 
dollars that were in either through the tax credit program, 
private activity bonds and tax credits, other affordable 
housing programs, to close the gap on the development.
    And it is a true economically integrated community that had 
market rate families, families who needed assistance, typically 
40 percent, and these are long-term affordable units and will 
always be as long as the ground lease is in effect, at least 60 
years, and then tax credit affordable units. And that was 
developed and it has been magnificent. We have also developed 
single-family homes.
    But we also worked with the neighborhood schools. So 
housing policy and education policy, too, are important because 
we wanted to have great neighborhood schools because that 
attracts families through the neighborhood. And so it has been 
a very, very impactful and tremendous program.
    Mr. Scott. Thank you.
    Thank you, Ms. Glover.
    And thank you, Mr. Chairman, for giving me that extra 
minute.
    Chairman Hensarling. The time of the gentleman has 
definitely expired.
    The Chair now recognizes the gentleman from Illinois, Mr. 
Hultgren.
    Mr. Hultgren. Thank you, Mr. Chairman.
    Thank you all for being here to discuss a very important 
topic, something that absolutely impacts all of our 
constituents.
    And it is so clear to me that home ownership advances the 
American Dream, encourages responsible citizens, and promotes 
lasting community involvement, which is something we all want.
    I believe that the people in my district should have access 
to the financial tools they need to be able to invest in this 
worthwhile goal to provide a lasting home for their families 
and also to build their net worth. Federal housing policy 
should reflect our commitment to those Americans who include 
home ownership on their list of life and financial objectives.
    We should also hold agencies like the Department of Housing 
and Urban Development accountable to ensure that Federal 
housing programs are exceptional stewards of taxpayer dollars 
and meaningful mechanisms through which we can help people out 
of poverty.
    I am interested in exploring ways that we can more 
effectively serve seniors and low-income families in our 
communities. And I am grateful for this opportunity to be able 
to learn more from you all and the work that you have done.
    I want to address my first couple of questions to Mr. 
Husock, if that is okay. America is facing significant 
challenges when it comes to providing our citizens with 
affordable housing. The 5 years ending in 2014, the number of 
renter households was up by 4.7 million, while the number of 
homeowner households was down by almost 600,000.
    The United States is on the cusp of fundamental change in 
our housing dynamics as changing demographics in housing 
preferences drive more people away from the typical suburban 
house.
    I wonder if you could offer insight as to what can be done 
to prepare our Nation for a more balanced housing policy, one 
that recognizes the realities of the changing housing market 
that we are facing?
    Mr. Husock. Thank you so much. Of course, a lot of what is 
a local decision is beyond the reach of HUD. However, I know 
that under Secretary Kemp's leadership, there was a good deal 
of emphasis that has fallen by the wayside somewhat to call 
attention to local communities as to how they may adjust their 
zoning codes in a way to encourage balanced construction of 
different housing types so as to accommodate the range of needs 
that may go beyond and do go beyond, as you point out, a desire 
simply for single-family home ownership.
    So a lot of these decisions, most of these decisions are 
driven by local zoning and land-use decisions. However, HUD can 
use its good offices to set an example, suggest model zoning 
codes and to call attention to those efforts at the local level 
that have been effective.
    Mr. Hultgren. Let me ask you specifically, since 1986, the 
low-income housing tax credit program has leveraged Federal 
dollars with private investment to produce nearly 2.8 million 
affordable units. If we still need more affordable housing, how 
can LIHTC dollars be further leveraged to provide more 
affordable housing?
    Mr. Husock. I think as with public housing and housing 
first voucher units, we should consider making those units that 
are affordable under the LIHTC a short term in the nature of 
their assistance because we have long waiting and we have a 
limited supply.
    And so aligning our housing policy with our overall social 
policy we spend as much, if not more on housing choice voucher 
as we do on TANF today. And yet, the regulations regarding TANF 
dollars and housing choice voucher dollars are very different.
    So to make assistance short term and targeted is maybe the 
most practical way that we can accommodate more households.
    Mr. Hultgren. I have one last thing I want to address 
quickly with Mr. Cabrera. How have Section 202 capital advances 
affected the market for affordable, supportive housing for low-
income seniors? Has the cessation of funding for these advances 
discouraged investors from building affordable senior 
developments to add new units?
    Mr. Cabrera. The short answer to that is yes, it has 
discouraged the production of 202 units. Section 202 has 
traditionally been the engine that drives elderly housing. 
There is a bitter struggle within the portfolio itself, as FHA 
would tell you, because it is very difficult. In some rural 
areas where you have 202s, you have performance issues. It is 
simply you don't have enough people living there to support the 
debt service so that it keeps going if it is alone as opposed 
to a grant.
    But I think 202 or a vehicle like 202 is going to be an 
important conversation to have given that no one here is 
getting younger.
    Mr. Hultgren. I feel it.
    My time is almost done. I will yield back my last 10 
seconds.
    Chairman Hensarling. The gentleman yields back.
    The Chair now recognizes the gentleman from Texas, Mr. 
Green, ranking member of our Oversight and Investigations 
Subcommittee.
    Mr. Green. Thank you, Mr. Chairman.
    I thank the witnesses for appearing as well.
    And I think the ranking member for her support of HUD.
    Mr. Chairman, I will style this brief statement why I 
oppose cutting funds to HUD. I oppose cutting funds to HUD 
because I have before me an article from the Huffington Post, 
dated July 11, 2014. It reads, ``The $400 billion to create a 
fleet of F-35 Joint Strike Fighter jets, which as the Hill 
points out is 7 years behind schedule and chronically plagued 
with misfortunes and incompetencies, could have housed every 
homeless person in the U.S. with a $600,000 home.''
    I oppose cutting funds to HUD because we currently have a 
$38 billion gimmick to fund the military with a separate war 
account that has no cap on it. Spend as much as we like on war, 
but cap what we spend on peace in terms of homelessness.
    And why do I say peace? Because I know how we acquired HUD. 
HUD was not acquired easily. Unfortunately, and I don't condone 
what happened, but I can tell you the truth, the Watts riots 
influenced the creation of HUD: 6 days; 34 deaths; 1,032 
injured; 4,000 people arrested; and $40 million in property 
damage. HUD was not easily acquired.
    There had been an effort to do this for years in this 
country. And unfortunately, history records that the Watts 
riots influenced the creation of HUD.
    I know how we acquired the Fair Housing Act. It was after 
the demise of Dr. Martin Luther King that we were able to get 
the Fair Housing Act through Congress.
    So I am here to protect HUD. I am here to protect it 
because I know about the good that it has done, notwithstanding 
all of the cuts through the years. The intelligence indicates 
that in the last 20 years, HUD has provided housing assistance 
to more than 35 million individuals.
    The HUD HOME program has produced nearly 1.2 million 
affordable housing units, almost 500,000 units for first-time 
home buyers. The HOME program has assisted nearly 300,000 
tenants in obtaining direct rental assistance. CDBG has helped 
over 1.2 million low- and moderate-income persons.
    And I tell you, Mr. Chairman, that I oppose cutting HUD.
    I am here to hold back the rollback and that is what I see 
happening. There are people of good will, by the way, with the 
best of intentions, who would roll back to a time when people 
were unable to get assistance with rent, unable to acquire the 
holistic approach that we just witnessed this morning.
    I was with the Honorable Maxine Waters when we were over at 
this location right here in this City, that takes a holistic 
approach to dealing with housing issues, gets 25 percent of its 
funding from the Federal Government, has a $5 million a year 
budget. I want to protect that. I want to expand that. I would 
like to see that become pervasive. I would like to see it in my 
City.
    We cannot allow a program that has benefited Americans in 
times of need after a crisis, such as what happened in 2008, to 
be cut to the bone to the extent that it becomes ineffective.
    And I will yield back the balance of my time.
    Chairman Hensarling. The time of the gentleman has expired.
    The Chair now recognizes the gentleman from Arizona, Mr. 
Schweikert.
    Mr. Schweikert. Thank you, Mr. Chairman.
    And obviously, once again, I believe our collectively 
ultimate focus is actually not the agency, it is the people who 
need the services, and are we doing it the best way to touch 
the most lives for the maximum benefit.
    Mr. Briggs, you have actually a couple of times touched on 
what many of us have been fixated on and that is particularly 
in our higher-density areas within the country. We have sort of 
a two-pronged problem, both income, the ability to earn a 
living, but then the cost of housing.
    In land-use policy, what some people like to refer to as a 
model zoning code, a lot of our urban areas really do lack 
creativity and variability in both the way they regulate, but 
also the land use.
    What can we do as Federal policymakers to turn to those 
urban centers and say, you are boxing out the next opportunity 
for affordable housing, not because of money coming from us, 
but because of the regulatory costs, the zoning costs, the land 
use, and actually your NIMBY problem? What can we do policy-
wise?
    Mr. Briggs. Thank you, Congressman. I am so glad you asked 
this question and asked it the way you did. In many senses, 
many communities around the country are federalizing their 
costs. And we are not going to make the progress we need to as 
a Nation if we don't come at this in more creative ways.
    In my judgment, one of the best studies ever done of this 
was by the late housing economist, John Quigley. He looked over 
a 40-year period and showed very rigorously that we have seen 
the problem you underline, this structural gap I talked about 
earlier. And a principal driver of it is what economists call 
supply constraints and local land-use regulation is among the 
most important.
    I would suggest approaching this as a question of both 
rules and incentives because both have mattered historically. 
That is what the record shows. And encouraging through 
contingent Federal funding, for example, contingent 
investments, both streamlining and more inclusionary approaches 
are going to be crucial, in my judgment, to encouraging density 
and a greater flexibility of housing types, as Mr. Husock 
noted.
    Mr. Schweikert. And if you ever see a good article on it, 
will you send it our direction? Somewhere in my binder, I have 
one talking about how a housing unit built today, about 40 
percent of it ultimately is some form of regulation. Now, we 
like certain regulations, but I live in the desert and yet some 
of the regulations require certain types of construction 
materials that are absolutely inappropriate for my part of the 
country, but they are within the rule set.
    Mr. Briggs. Right.
    Mr. Schweikert. So somehow we are going to have to 
holistically break this down.
    Mr. Briggs. I have a 10-second response, if you will allow 
me. I think we will agree that regulations exist for a variety 
of reasons, to protect health and safety, to promote 
environmental sustainability, including--
    Mr. Schweikert. But it also creates barriers.
    Mr. Briggs. Absolutely, it is a mixed picture.
    Mr. Schweikert. Okay.
    Mr. Husock?
    And I prefer the words ``on ramp'' instead of ``off ramp.'' 
If right now you were designing income, job incentives those 
things, so let us just use this because it is something I am 
familiar with.
    I am in Section 8 housing. I am able to get that promotion 
in the job because I have been a consistent worker. We know 
there is a math problem, there is a disincentive problem where 
you make a certain income leap, all of a sudden much of that is 
lost over here in the change of your housing cost.
    Within seconds, can you share with me a conceptual approach 
of what you would do to incentivize accepting that extra work 
responsibility and the extra income without being punished on 
the other side so it is a reasonable on ramp?
    Mr. Husock. Fix the tenant's share at the outset of the 
lease and keep that for a fixed period of time, just the way 
typical renters in the private sector have a fixed-cost lease.
    Mr. Schweikert. Okay.
    Ms. Glover, everyone seems to love you. You have an amazing 
story here. One of the curiosities I have is knowing some of my 
housing projects in the Phoenix area are--rent credit, is also 
the discussion of incentivizing work, but the ability to manage 
that.
    Are you seeing discussions of reaching in and doing things 
more creatively, babysitting co-ops, a ride-sharing vehicle 
that is actually at the property, things that actually make the 
ability to go and work that job using sort of the modern 
sharing economy? Are you seeing that adoption anywhere?
    Ms. Glover. I think that is the power of local devolution 
that you can actually incent those types of things. The great 
news is that if you are not constrained in terms of what can be 
experimented with and investigated, I think there is a lot of 
opportunity.
    Mr. Schweikert. So that decentralization and rural changes 
from my housing density or housing rules to your creativity to 
incentivize folks to have a future.
    Ms. Glover. Absolutely. And one other quick observation on 
some of the local communities--
    Mr. Schweikert. Very quickly.
    Ms. Glover. --is that many localities are trying to 
subsidize their own budgets, so with the cuts of CDBG and HOME 
what you are seeing are impact fees and raising and higher fees 
because at the end of the day, we have to connect the dots 
because all of these things come together and have impact.
    Mr. Schweikert. Yes, that is the other side of the cost 
equation.
    Chairman Hensarling. The time of the gentleman has expired.
    The Chair now recognizes the gentleman from Minnesota, Mr. 
Ellison.
    Mr. Ellison. Let me thank the chairman and the ranking 
member. I appreciate having this hearing.
    My first question is a very quick question. Are the poor 
lazy? That is my question. Some of my colleagues made the point 
that we need work requirements. I have a panel up here and I 
would like to direct the panel's attention to the board.
    Under the voucher program, 49 percent of those folks are 
elderly or disabled, 33 percent of them have jobs in the 
voucher program, so you don't need to force them to work with a 
work requirement.
    And then you have another percentage of people who are if 
you are on TANF, you are a TANF recipient, then there is 
another under the voucher, 12 percent, who could be veterans, 
who could be people with a whole lot of different stories.
    I think the point here, though, is that saying that you 
can't have housing unless you have a job, at least for the 
voucher program, is probably poorly thought through.
    Public housing, same story. People are working and the ones 
who aren't working, the greater majority of them are elderly or 
disabled.
    And then, project-based rental assistance is the same story 
all over again.
    So Mr. Briggs, is a work requirement smart, is it right, is 
it necessary, does it help?
    Mr. Briggs. Congressman, thank you. In my judgment, it 
misses the point. If the idea is to make work pay and to ensure 
that there are work supports, given the ample evidence that 
there is a high level of motivation to work, as Members from 
both sides of the aisle have said, then let us focus on those 
things.
    As your data show, many of the assisted households are 
either not work-ready or aged out of working age or they are in 
fact attached to the labor market. So to some extent, one 
wonders about whether we are focused on the wrong issue.
    Mr. Ellison. Thank you. I will just move on from there.
    Can we get the next slide up, please?
    So here is the thing. I have asked for chart one to be 
shown on the screen.
    According to the Harvard Joint Center for Housing Studies' 
report, one in two households spend more than 30 percent of 
their gross income on rent and utilities, and one in four 
households pay more than 50 percent of their gross income for 
rent utilities.
    We currently have more than 11 million families who pay 
more than half of their income for housing and utilities. And 
we know that one in four families eligible for housing 
assistance receives it, only one in four. In my district, we 
have more than 10,000 low-income families on a waiting list.
    So I wonder, Mr. Briggs or any of the panelists, I would 
like to hear from Mr. Briggs first, when you consider the 
current HUD budget, what percentage of its funds go to help 
existing recipients of assistance? How does that percentage 
compare with funds available to help cost-burdened families 
receive vouchers or gain a slot in a subsidized home?
    Mr. Briggs. Mr. Ellison, as the data show, we have this 
tremendous gap. The blue line is coming down over the last 
several years. That, by the way, is because of the economic 
recovery. The underlying data analysis show that is about 
improvement in tenant incomes, which is a terrific thing, and a 
sign of how we can create more success.
    But only about one in four households who are eligible for 
housing assistance actually get it. And that is a huge problem.
    And again, we are paying costs; we are just paying them in 
other systems.
    Mr. Ellison. That brings me to the next slide.
    It is funny you should mention that. So here, this next 
slide, I think, is interesting because we spend more than $270 
billion a year on housing. We spend a lot of money on housing, 
just not too much of it goes to poor folks.
    This chart shows that the bulk of the investment benefits 
the most financially well-off because of all of the tax 
benefits for home ownership, the mortgage interest deduction, 
property tax deduction, capital gains exemption.
    In general, upper-income homeowners receive the greater 
benefit than do the low-income renters. And why is all this 
focus on trying to shrink the small pie we already have for 
low-income people trying to find a leg up in this system? Can 
anybody talk to me about this?
    Ma'am?
    Ms. Glover. In one of my recommendations, I recommended 
that in the context of overall tax reform, some thought be 
given to rebalancing home ownership and rent, but also 
directing the assistance to those with the greatest need.
    Mr. Ellison. Thank you.
    Ms. Glover. And we know we are in resource-constrained 
environments, but we need to direct it to where the greatest 
need is. And I think that is the rebalancing of the approach.
    Chairman Hensarling. The time of the gentleman has expired.
    The Chair now recognizes the gentleman from California, Mr. 
Royce, chairman of the House Foreign Affairs Committee.
    Mr. Royce. Thank you very much, Mr. Chairman.
    And I thank the witnesses here for joining us today.
    As Chairman Hensarling already mentioned, the Moving to 
Work program has largely been a success and also an initiative 
that the housing authority of the County of San Bernardino has 
pioneered to the benefit of many of my constituents.
    And I think the extension of preexisting MTW contracts at 
public housing authorities, including San Bernardino which has 
a rental assistance utilization rate of higher than 90 percent, 
has been significantly delayed. It still remains undone.
    Mr. Cabrera, let me ask you, what ramifications will the 
delay by HUD have on MTW housing authorities? And how is HUD 
gutting the original intent of the program, as you referenced 
in your testimony?
    Mr. Cabrera. Thank you, Mr. Chairman. I think that the real 
concern I have about HUD delaying is that eventually those 
contracts expire and what you have is a housing authority going 
back to the usual rubric, the Housing Act of 1937, and all of 
the impacts.
    San Bernardino County is currently developing in San 
Bernardino itself and they are redeveloping public housing, 
their own public housing. That is the kind of thing that will 
stall that effort. And that would be the case in San Bernardino 
County. That would be the case for the San Diego Housing 
Commission. That would be the case for Santa Clara.
    It is important that the flexibility that has been inherent 
in the MTW agreements that were drafted frankly from 1999, 
because it came into being in 1998, through roughly 2008, that 
it stay that way.
    If you take away that flexibility, you will take away the 
capacity of these housing authorities to do as much as they can 
do with respect to their properties and their tenants.
    Mr. Royce. I appreciate that.
    Changing gears, Mr. Husock, when you think about Fannie Mae 
and Freddie Mac and the central role they played in the 
financial crisis, do you ever ask yourself, if only they had 
listened? And I say that because, as you wrote in the pages of 
The Wall Street Journal in 2004, ``Federally chartered but 
privately owned, Fannie Mae, with a trillion dollars in assets, 
is not the riskless public service entity it represents itself 
to be.''
    And while you and I and then-Federal Reserve Chairman 
Greenspan and others cried loudly at that time of systemic risk 
regulation, I had a bill to regulate systemic risk there, and 
it called for higher capital and less leveraging, it was 100 to 
one leveraging, and scaled back GSEs. Sadly, those warnings 
fell on deaf ears here on Capitol Hill.
    And I don't say this to rehash history, although I think 
amnesia, as my colleague from New York mentioned earlier, is 
suffered on a bipartisan basis, but rather I hope that we might 
learn from the past.
    And specifically, I was hoping that you could comment 
briefly on the role the affordable housing goals had in the 
collapse of the GSEs and the potential impact of reopening the 
credit spigot with FHFA this year, calling for the Housing 
Trust Fund to be capitalized by Fannie and Freddie.
    Is there not a better way to accomplish the goals of home 
ownership within a market-based system than replaying this 
particular angle?
    Mr. Husock. Thank you, Congressman Royce. I am pleased that 
somebody dug out that 2004 article, and I am flattered that you 
mentioned it for the record.
    Mr. Royce. Oh, I have quoted you over the years. So, thank 
you.
    Mr. Husock. I appreciate that. I worry about the affordable 
housing goals, and I worried about them at the time, not 
because I did not think home ownership is a valuable asset for 
communities. I worry that if lenders are encouraged to make 
loans to non-credit-worthy individuals that their neighbors, 
their struggling neighbors who are making the payments on their 
own houses are going to see their values collapse when 
foreclosure strikes in their neighborhood.
    And we have seen in the wake of the financial crisis that 
is exactly what happened, and that poor and working-class 
neighborhoods were the most adversely affected by the 
affordable housing goals that have always been advanced in 
their name. That is my concern.
    And so, I think we would be remiss in continuing those 
affordable housing goals and in directing more funds to similar 
purposes.
    Mr. Royce. Thank you.
    Again, I thank these witnesses.
    And Mr. Chairman, thank you for this hearing.
    Chairman Hensarling. The time of the gentleman has expired.
    The Chair now recognizes the gentlelady from Utah, Mrs. 
Love.
    Mrs. Love. Thank you, Mr. Chairman.
    And thank you all for being here today.
    I am actually encouraged by what I have been hearing from 
the panel. And I hope that we wouldn't take these hearings for 
granted, that we can come out of this hearing with some good 
ideas on how we are going to help our fellow Americans.
    First of all, what I would like to focus on today is the 
bigger picture, and how HUD can play a part in ending inter-
generational poverty.
    I have heard a lot today about how certain well-intentioned 
policies and programs to combat poverty, to the defense of HUD, 
there are some places where it has helped. But I also believe 
that it has resulted in the creation of a bureaucratic and 
complex web of HUD programs that eventually, I think, entrench 
poverty and act as a barrier to upward mobility.
    So just very quickly, have any of you ever been to the 
State of Utah? Yes? Okay, it is a great State, right? Okay. My 
home State of Utah is actually unique in having adopted and 
focused specifically on inter-generational poverty. In fact, in 
2012 the Utah State legislature adopted the Inter-Generational 
Poverty Mitigations Act. And it is to help identify the 
barriers that trap families in inter-generational poverty and 
really find solutions to help families break out of those 
barriers and achieve a life of dignity and self-reliance.
    But it is also very important to note that before that 
Act--the Act is actually dealing with a broader perspective, 
and housing is a portion of that, and before that we realized 
that when we were working on housing stability and having 
people get into homes that it was necessary and important, but 
it was far from enough to actually end the cycle of inter-
generational poverty.
    Which one of the concerns that we have are people coming 
in, again, going into the same programs, instead of getting 
people completely out of these programs.
    So with that being said, one of the questions I have for 
you, Ms. Glover, is you actually mentioned that local 
governments have to have the flexibility to do what they need 
to in terms of helping out with housing. What are your thoughts 
about giving local government or what do you think we can do to 
give them more flexibility to deal with these problems on a 
local level?
    Ms. Glover. Thank you very much for the question. I think 
that is why there has been so much discussion about Moving to 
Work. It is an unfortunate name for a program that really is 
about eliminating the overregulation, if you will, of providing 
housing in a locality.
    Mrs. Love. Yes.
    Ms. Glover. And what it seeks to do is that it allows the 
local authority working with local players, local service 
providers, local foundations to solve the problem in that 
jurisdiction. Utah is very different than Georgia, California, 
and so on and so forth.
    Mrs. Love. That is right.
    Ms. Glover. And so I think in a responsible way, and if 
there are articulated and agreed outcomes and performance 
metrics, you can take the same dollars that are being allocated 
and put it into a pool, come up with a strategic plan, and then 
implement the things that are solving problems in that 
locality, be it homelessness, be it supportive housing needs, 
be it elderly housing. It also incents other players to come 
and participate because it also creates certainty.
    And I think one of the things that Mr. Cabrera talked about 
is investors want to know, well, what is the playing field 
going to be so that they aren't constantly reacting to 
changing--
    Mrs. Love. Thank you. I have two more questions I have to 
get to, in seconds.
    The other thing I wanted to say is, do you believe that HUD 
needs to interface with some other interventions to help break 
the cycle? I feel as if we are being a little too micro instead 
of macro, instead of looking at all the other pictures to try 
and see what we can do to make sure that poverty is something 
that we actually break, inter-generational poverty. I think it 
can be done.
    Mr. Cabrera. Like many Federal agencies, HUD handles data 
very haphazardly. And it is not because of HUD; it is because 
of their tools. I think given where we are, some serious 
thought has to be given to how you track certain outcomes that 
you want using data. And I think that goes toward, for example, 
the Inter-Generational Poverty Act.
    Mrs. Love. Yes. I would just like to mention that all of 
those programs are outcome-based also. And that is why Utah has 
done so well.
    Thank you.
    Chairman Hensarling. The time of the gentlelady has 
expired.
    The Chair now recognizes the gentleman from Arkansas, Mr. 
Hill.
    Mr. Hill. Thank you, Mr. Chairman.
    I thank you and the ranking member for convening this 
hearing.
    And I thank the panel for their patience, and for staying 
for such a long period of time.
    I want to thank Chairman Luetkemeyer for joining me in 
Little Rock and visiting our public housing authority and 
taking a tour of both elderly facilities as well as both old 
and new as well as hearing plans for some new RAD projects in 
Little Rock that I think will be quite, quite interesting and 
quite beneficial to the community.
    Also, in listening to the conversation this morning, I 
really do think we need to defend helping people and not defend 
the agency, not confuse the defense of 50 years of HUD versus 
the programs and ideas and concepts of helping people better 
their lives and getting out of poverty. So I want to associate 
myself with the gentleman from Arizona's comments in that 
regard.
    And also, just speaking to the ranking member's opening 
statement, I think about 16 percent of HUD residents are over 
62, was one of the things that she raised. And about 46 percent 
are actually working age.
    So I really do think this idea of getting our communities 
to work well to get people in public housing off with solutions 
for child care, transportation, getting to work is so very, 
very important, since 46 percent of people in public housing 
are of working age, not retired. I want to leave that concept 
here, floating around the room.
    Mr. Cabrera, my first question for you is, since 80 percent 
of HUD's budget is really distributed either through the 
formulas that go out to the public housing agencies or into the 
Section 8 program, if we got the technology investment you 
wanted, could we have fewer than 7,800 people working at HUD, 
do you think?
    Mr. Cabrera. I think you are going to have fewer than 7,800 
people working at HUD no matter what, over time.
    Mr. Hill. How would you see technology? At the public 
housing authority in Little Rock, one of their biggest 
complaints, and Ms. Glover may have a view on this as well, was 
just terrible back-office IT support for their mission.
    Mr. Cabrera. I think that is right. I think one of the 
problems is, look, whatever data HUD collects, it essentially 
is used to report to you and to the American people. That data 
is extremely uneven; sometimes, it is very, very good. So one 
that comes to mind, one data point that comes to mind that is 
very good is VMS data.
    Mr. Hill. What does that mean?
    Mr. Cabrera. VMS is voucher management system data. It 
gives you a very good picture month to month about utilization 
once the data is scrubbed. Why is that? Well, it is because 
over time we have put in tools in order to minimize the misuse, 
the fraudulent use of Section 8.
    So we have become very, very good at looking at VMS data to 
report back to Congress how that is going, mostly because 
Section 8 is the biggest pot, if you think about $19.7 billion 
and add another $9 billion, that is a lot of money.
    But at the end of the day, what it really means is that a 
lot of the other tools are left by the wayside. And one of the 
things, just as someone who developed and as someone who was in 
other parts of housing, that I think would be a worthwhile 
endeavor would be, what are the things that we want to know 
that housing is being used for positively across subsidy pools.
    So if I am thinking about someone who is elderly, there are 
points of contact. How are kids being educated?
    Mr. Hill. Those are very good examples.
    Ms. Glover, I appreciated the comment, and Mr. Briggs, too, 
on rents. All of you have addressed rents. Mr. Husock, as well. 
I think you all had good points, good comments.
    What about the individual savings accounts that are a part 
of HUD's program? Did you use those in Atlanta to help people 
have that fixed rent, qualify for the fixed rent, and then put 
money in savings so they are saving money for down payment 
assistance? That is part of the HUD program, I wondered if you 
took advantage of it?
    Ms. Glover. We did. And we were able to do it more 
powerfully with the Moving to Work deregulation because we were 
then able to partner with foundations and other organizations. 
And so, we didn't have to use the program that was prescribed 
by HUD; we were able to design it so that it worked with the 
people who had deep experience in working with those types of 
accounts.
    Mr. Hill. Thank you.
    Mr. Chairman, my time has expired.
    Chairman Hensarling. The gentleman yields back.
    The Chair now recognizes the gentleman from Pennsylvania, 
Mr. Rothfus.
    Mr. Rothfus. Thank you, Mr. Chairman.
    I thank the panel for joining us this afternoon, and for 
being here for a few hours to talk about the 50th anniversary 
of HUD.
    It is good to see you again, Mr. Cabrera.
    I would like to tell you a little bit about an organization 
in my district and get some feedback. This organization is 
called Hearth. It provides transitional housing services to 
victims of domestic violence, under the continuum of care 
program. It is a great organization that is truly saving lives 
in western Pennsylvania. In accordance with its mission, Hearth 
houses women seeking shelter from abusive relationships.
    Earlier this year, they were told by Allegheny County that 
by serving only women, they were in violation of HUD guidelines 
and would lose funding. In a subsequent conference call, HUD 
indicated that Hearth could continue serving women if the 
county agreed. Unfortunately, Hearth has found itself at an 
impasse and its funding for the 2016 Fiscal Year lapsed without 
a resolution.
    Based on your experience, is it that your sense that HUD 
rules allow agencies such as Hearth to serve sub-populations, 
including domestic violence victims?
    Mr. Cabrera. I think I am speechless. HUD has adopted all 
the concepts in VAWA for now a decade-plus, right, with 
reauthorization. Women are a special classification 
constitutionally. I am struggling to understand how that would 
be the determination on the one hand.
    On the other hand, as you well know, I am not terribly 
surprised. And I think that you are highlighting one of the 
problems, and that is there is a rigidity to policy decision-
making that causes those kinds of results, that really has to 
be revisited.
    Mr. Rothfus. Does it seem fair that Hearth would lose 
funding just for helping women?
    Mr. Cabrera. Unequivocally, no. But not knowing the greater 
facts, not knowing if there is something else, some other 
dynamic that I am unaware of, just on the facts that you have 
portrayed to me, I am struggling with that one.
    Mr. Rothfus. Thank you. In your testimony you argue that 
housing policy services and value to the taxpayer would improve 
if HUD encouraged more competition, not less.
    Can you give some examples of ways that the Federal 
Government can increase competition in the affordable housing 
sector?
    Mr. Cabrera. The best example I know is the one I just was 
involved with. So in the case, for example, of performance-
based contract administration, that is a very large contract, 
it roughly can be as high, on occasion, as an $845 million 
contract. HUD went out and undertook a NOFA. And in that NOFA, 
HUD added rules that are not supported in law and that killed 
the competition from one of the competitors most naturally to 
be a competitor, public housing authorities.
    And essentially, it culminated in a lawsuit. That lawsuit 
has been resolved. The plaintiffs, the public housing 
authorities and their instrumentalities, won that lawsuit. 
Thankfully, I was part of that team. And it is a great example 
of what HUD should not do.
    I think what happens is that there is this press to make a 
lot of people happy and HUD, in so doing, makes no one happy. 
And I think that one of the things that HUD needs to do better, 
I think it is also in my testimony, is it needs to listen 
better in terms of what it is trying to accomplish and who can 
take them there within the context of the Acts that govern HUD, 
in this case the Housing Act of 1937, FDCAA, and CICA.
    Mr. Rothfus. Mr. Husock, you have written extensively about 
the inherent flaws of HUD. In your testimony, you argue that at 
its core HUD was predicated on a deeply pessimistic view about 
American society that the new urban poor of the 1960s, the 
minority poor, would not be able to advance up the 
socioeconomic ladder as had their predecessors in poor city 
neighborhoods.
    As we look towards reforming HUD and improving the 
prospects of Americans who receive housing assistance, what are 
some of the programs or practices that follow from HUD's flawed 
pessimistic foundation? How can we put HUD on a more optimistic 
footing?
    Mr. Husock. Yes, and that is why I have been trying to be 
constructive in my testimony, whatever doubts I may have had 
about the original wisdom.
    I think that incentivizing work and self-improvement for 
those who are able-bodied and able to work or within HUD 
housing lies at the core. It would align our housing policy 
with our social policy as embodied by the Temporary Assistance 
to Needy Families program and the Welfare Reform Act of 1995.
    I think incentivizing work and making sure that people have 
the support they need, as Xavier Briggs and everybody on this 
panel have said, work incentives must be provided along with 
work supports. But incentivizing work and self-improvement, I 
think that would be the biggest change.
    Mr. Rothfus. I yield back.
    Chairman Hensarling. The time of the gentleman has expired.
    The Chair now recognizes the gentleman from Maine, Mr. 
Poliquin.
    Mr. Poliquin. Thank you very much, Mr. Chairman.
    I appreciate you scheduling this terrific and very 
important hearing.
    I thank all of the folks who are here to testify today.
    It is my opinion as a Member of Congress that there are a 
handful of really important things that we do in the Federal 
Government, one of which is to protect our country and protect 
our citizens. National security is of paramount importance.
    Then, we need to make sure we create the building blocks, 
the cornerstones for a stronger economy, one that grows, let 
the private sector grow, create jobs as you go along that path 
such that folks have more opportunities to life with paychecks 
and more freedom.
    I also think our Federal Government is in the business of 
compassion. We need to make sure that those who are unable to 
help themselves or those who need a hand up, that we help them.
    Now, I needn't remind everybody in this room, because we 
talk about this on a regular basis, that we have already paid 
our bills and we are $18 trillion in debt as a nation: $18 
trillion. And the annual debt service payments, the interest 
payments today on that debt is about $230 billion a year, about 
twice what we spend in veterans' benefits. So we are in one 
heck of a hole.
    Now, what that means to me as a Member of Congress, and I 
am sure to all of us public officials, is that we need to 
stretch every dollar as thin as we can because it is a limited 
resource and we are fiduciaries of taxpayer money.
    When I was State treasurer up in Maine, I sat on our public 
housing authority board. They have been doing stuff the same 
way forever. And I asked them a couple of questions at a board 
meeting that seemed to stump them, very simple questions. 
Number one, do we have a waiting list for families trying to 
come out of the cold? Now, Maine has long winters, and we have 
the oldest housing infrastructure in the country. Do we have a 
waiting list? And there was no good answer, but we pieced it 
together the best we could. There are about 6,000 families in 
the State of Maine looking to get out of the cold.
    And I asked them another question, what does it cost? What 
does it cost to build these affordable apartments, the 
subsidized apartments? And you would have thought that I 
mentioned that the world was flat; they just didn't have an 
answer. The board didn't know. The folks in the front office 
sort of knew, but never told the board.
    The bottom line is, we are spending about $300,000 for one-
bedroom apartments in Maine when the average price of a single-
family home on a quarter acre with three bedrooms, two baths, 
and a garage was half that price.
    Now, where is the compassion? We are in the business of 
helping people? How in the dickens can you help people come out 
of the cold, put a warm roof above their heads so they can 
raise their families, or elderly folks coming out of the cold? 
We are spending twice what we should be, I would argue 2 or 3 
times what you should do on public housing. Let us make that 
dollar stretch.
    Now, we changed the rules up in Maine. We gave developers 
incentives to drive down the costs of those units instead of 
just artificially and continuously approving cost overruns. We 
said, you don't need solar panels on the roof that never have a 
payback. And we drove down the cost of these units by about 35 
percent. By the time I left, it was still going down, and we 
helped hundreds more people. That is the compassion that we 
need to do with limited resources in this country.
    So my question to you, Mr. Cabrera is, as you have been in 
the development space, HUD is a big organization with a lot of 
moving parts. Do we have room at HUD within this bureaucracy to 
drive down the cost of public housing so we can help more 
people?
    Mr. Cabrera. HUD doesn't build public housing.
    Mr. Poliquin. But do we have incentives for those that do, 
that we can use to help stretch that dollar?
    Mr. Cabrera. You would be stunned at what has been done 
thus far. That is what asset management was for; it was to 
basically drive down the cost centers at public housing 
authorities.
    If I had to guess, the housing authority that you were on 
the board of was probably using the low-income housing tax 
credit.
    Mr. Poliquin. Somewhat, yes, but still a Section 8.
    Mr. Cabrera. So if that is the case, that is less a public 
housing issue and it is more a development issue.
    Mr. Poliquin. Do we have the data, Mr. Cabrera, to know 
what these units are costing us? Do we even have that data?
    Mr. Cabrera. Yes, there is data, it is just not from the 
Federal Government. It depends upon where you are. You can wind 
up in places where the per-unit cost is considerably less than 
$300,000. You can wind up in places where the per-unit cost is 
more. But keep in mind that those units generally serve people 
for 50 to 55 years.
    Mr. Poliquin. Let us all be mindful that we have to stretch 
these dollars and to help as many people as we can.
    Thank you all very much.
    Chairman Hensarling. The time of the gentleman has expired.
    There being no other Members in the queue, I would like to 
thank our witnesses for their testimony today. Thank you for 
your patience as well.
    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.
    This hearing stands adjourned.
    [Whereupon, at 12:57 p.m., the hearing was adjourned.]

                            A P P E N D I X



                            October 22, 2015
                            
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