[Senate Hearing 115-197]
[From the U.S. Government Publishing Office]
S. Hrg. 115-197
OVERSIGHT OF HUD
=======================================================================
HEARING
before the
COMMITTEE ON
BANKING,HOUSING,AND URBAN AFFAIRS
UNITED STATES SENATE
ONE HUNDRED FIFTEENTH CONGRESS
SECOND SESSION
ON
EXAMINING THE OPERATIONS AND ACTIVITIES UNDERTAKEN BY HUD THIS CONGRESS
AND THE AGENCY'S FY2019 BUDGET PROPOSAL, AND TO HIGHLIGHT REGULATORY
EFFORTS THE AGENCY PLANS TO TAKE IN 2018 AND BEYOND
__________
MARCH 22, 2018
__________
Printed for the use of the Committee on Banking, Housing, and Urban
Affairs
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Available at: http: //www.govinfo.gov/
______
U.S. GOVERNMENT PUBLISHING OFFICE
29-552 PDF WASHINGTON : 2018
COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS
MIKE CRAPO, Idaho, Chairman
RICHARD C. SHELBY, Alabama SHERROD BROWN, Ohio
BOB CORKER, Tennessee JACK REED, Rhode Island
PATRICK J. TOOMEY, Pennsylvania ROBERT MENENDEZ, New Jersey
DEAN HELLER, Nevada JON TESTER, Montana
TIM SCOTT, South Carolina MARK R. WARNER, Virginia
BEN SASSE, Nebraska ELIZABETH WARREN, Massachusetts
TOM COTTON, Arkansas HEIDI HEITKAMP, North Dakota
MIKE ROUNDS, South Dakota JOE DONNELLY, Indiana
DAVID PERDUE, Georgia BRIAN SCHATZ, Hawaii
THOM TILLIS, North Carolina CHRIS VAN HOLLEN, Maryland
JOHN KENNEDY, Louisiana CATHERINE CORTEZ MASTO, Nevada
JERRY MORAN, Kansas DOUG JONES, Alabama
Gregg Richard, Staff Director
Mark Powden, Democratic Staff Director
Elad Roisman, Chief Counsel
Matt Jones, Counsel
Elisha Tuku, Democratic Chief Counsel
Beth Cooper, Democratic Professional Staff Member
Erin Barry, Democratic Professional Staff Member
Megan Cheney, Democratic Professional Staff Member
Dawn Ratliff, Chief Clerk
Cameron Ricker, Deputy Clerk
James Guiliano, Hearing Clerk
Shelvin Simmons, IT Director
Jim Crowell, Editor
(ii)
C O N T E N T S
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THURSDAY, MARCH 22, 2018
Page
Opening statement of Chairman Crapo.............................. 1
Prepared statement........................................... 39
Opening statements, comments, or prepared statements of:
Senator Brown................................................ 2
Prepared statement....................................... 39
WITNESS
Benjamin S. Carson, Secretary, Department of Housing and Urban
Development.................................................... 4
Prepared statement........................................... 40
Responses to written questions of:
Senator Brown............................................ 44
Senator Scott............................................ 104
Senator Kennedy.......................................... 109
Senator Menendez......................................... 112
Senator Warner........................................... 118
Senator Heitkamp......................................... 121
Senator Schatz........................................... 126
Senator Cortez Masto..................................... 130
Additional Material Supplied for the Record
Letter to Secretary Benjamin S. Carson from Senator Tim Scott.... 147
Josh Siegel, Washington Times, ``HUD Tells States To Consider Sea
Level Rise When Rebuilding From Storms'', article dated
February 7, 2018............................................... 149
(iii)
OVERSIGHT OF HUD
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THURSDAY, MARCH 22, 2018
U.S. Senate,
Committee on Banking, Housing, and Urban Affairs,
Washington, DC.
The Committee met at 10:01 a.m., in room SD-538, Dirksen
Senate Office Building, Hon. Mike Crapo, Chairman of the
Committee, presiding.
OPENING STATEMENT OF CHAIRMAN MIKE CRAPO
Chairman Crapo. This hearing will come to order.
Today, the Committee will receive testimony from Dr. Ben
Carson, the seventeenth Secretary of Housing and Urban
Development. Welcome back, Mr. Secretary.
Secretary Carson. Thank you.
Chairman Crapo. Over the past year, Secretary Carson has
made significant strides in his efforts to make HUD programs
more effective and efficient.
He has embarked upon a multi-month listening tour,
traveling across the country to develop a deeper understanding
of the effect that HUD policies have on affordable housing
practitioners and families who are the most vulnerable.
Not long after returning from the tour, Secretary Carson
took on a major leadership role in coordinating hurricane
relief efforts in Texas, Florida, Puerto Rico, and the U.S.
Virgin Islands, providing both immediate and long-term relief
to thousands of families who have been displaced from their
homes and are without electricity. That work continues.
As a nominee just over a year ago, Secretary Carson
testified before this Committee about the importance of
revisiting our Nation's housing programs to ensure that
families who are struggling in America have the best
opportunity to climb the economic and social ladder, to break
intergenerational cycles of poverty, and to become self-
sufficient.
Secretary Carson has also stressed the importance of
aligning regulatory requirements in ways that incentivize
landlord participation in HUD programs, eliminate undue burden
on program participants, enhance workforce mobility, and
maximize the percentage of HUD dollars that go straight to the
families that need it.
I could not agree more with these goals, and I thank
Secretary Carson and his team for working with this Committee
to achieve these objectives.
Last week, by voting 67 to 31 to pass the Economic Growth,
Regulatory Relief, and Consumer Protection Act, the Senate took
a decisive step forward in addressing these same issues.
A lot of the debate on the floor last week highlighted how
the legislation right-sizes regulations for community banks and
credit unions to promote economic development and lending, but
the bill also makes important improvements to housing programs.
It provides critical regulatory relief to over 1,000 small
rural public housing agencies, making it easier for them to
develop new projects and coordinate with their neighbors, and
it ensures that more of their budgets go straight to families,
rather than legal paperwork.
The bill makes it less expensive for nonprofits like
Habitat for Humanity to build homes in underserved communities.
It makes a greater number of families eligible for HUD's
Family Self-Sufficiency Program and enhances the program so
that it can offer new additional services to participants.
It permits renters to stay in their homes for at least 90
days after their home is foreclosed upon, and it permanently
extends the amount of time a servicemember may stay in his or
her home after returning from military service to 1 year before
the home may be foreclosed upon.
We hope this bill will be signed into law.
Today, I look forward to hearing about more opportunities
for us to keep moving forward, working together to modernize
and improve our housing programs.
Senator Brown.
OPENING STATEMENT OF SENATOR SHERROD BROWN
Senator Brown. Thank you, Mr. Chairman, and welcome, Mr.
Secretary. Glad you are here.
Secretary Carson. Thank you.
Senator Brown. HUD plays a critical role in the success of
our housing market, our communities, our families, our goals as
a Nation. So it is disturbing, extremely disturbing to read
about one controversy after another at your Department--ethics
lawyers ignored, procurement guidelines scoffed at,
whistleblowers facing retaliation, antidiscrimination efforts
downgraded, key positions filled based on patronage rather than
competence. It goes on and on and on and on.
Instead of taking responsibility, Mr. Secretary, you seem
to want to blame others. Your wife picked out the furniture
without knowing the price. Your spokesman said something but
not you. You should not be blamed for not listening to your
ethics lawyers. The press is unfair. It goes on and on and on
and on. Blaming others seems to be the order of the day in the
swamp.
I think you need to take responsibility and get things
right. HUD's mission is too important to do otherwise, and
getting things right means fighting for the funding needed to
help more people in this country get a roof over their head.
Despite the importance of affordable housing, it is
increasingly out of reach. A quarter of all renters today pay
over half their incomes for housing, including 400,000
households in Ohio alone.
Homelessness increased last year in the eighth year of an
economic expansion. Repeat that. Homelessness increased while
you were Secretary of HUD in the eighth year of an economic
expansion beginning with auto rescue with President Obama
setting the course of that economic expansion.
Earlier this week, one of our great Ohio housing advocates
described the affordable housing crisis as an, quote, ``all
hands on deck'' situation, but HUD chose to go AWOL instead.
Rather than making new investments in affordable housing in our
communities, the budget proposal--there is no debate in this.
The budget proposal adds to the ranks of the homeless.
Three months ago, the Administration was entirely
unconcerned about the deficit when it chose to add more than a
trillion dollars to our national debt over the next decade. Say
that again. When this Congress passed the tax cut that went, as
we know, overwhelmingly to the wealthiest people in our
country, it added a trillion dollars to the deficit, did not
seem to be much interest from you, the members of the Cabinet,
the President, or members of this body in the majority about
the national debt increase over the next decade.
But, all of a sudden, Secretary Carson and your colleagues,
you have discovered--you have rediscovered grave concerns about
the budget deficit, such that it is time to charge extremely
poor people significantly higher rents. It is outrageous.
The top 1 percent of the country--and you and most members
of the President's Cabinet are among that top 1 percent--the
top 1 percent of this country will eventually get 83 percent of
the benefits of the trillion-dollar tax cut. Then you and this
Administration think it is OK to charge poor people more for
their rent.
To reduce the deficit that this tax cut for millionaires
and corporations will create, HUD proposes that some of the
poorest households in this country must pay an increase of as
much as $1,800 a year in rent. That is just shameful. All told,
HUD wants to charge an estimated $2 billion in higher rents to
low-income families through what you all call rent reforms.
The Administration claims its cuts will recognize a greater
role for State and local governments in the private sector. You
always say that, but Federal assistance, you know reaches only
one out of every four eligible families. State and local
governments are already strapped for cash. Go anywhere in the
country and ask them that. We know they do not have the
capacity to take on those evicted by Federal cuts without
raising taxes on working families.
Last year, Secretary Carson, you reassured the public that
HUD's budget cuts--you said it in this Committee. HUD's budget
cuts would be offset in the Administration's infrastructure
package. I have no idea if you pushed the Administration
infrastructure package to live up to your promise, but I do
know the President's proposal included--did not include funding
for housing and community development despite your assurances,
quote, ``housing is part of the infrastructure in this country,
and it will be treated as such.'' That is shameful too.
There is on funding for capital spending for public
housing, despite a backlog of needed repairs of tens of
billions of dollars. Under your leadership, Secretary Carson,
HUD has decided a wobbly chair in a private D.C. dining room
requires the urgent attention of no fewer than 16 staffers and
thousands--thousands of taxpayer dollars.
Unsafe and unsanitary conditions in public housing that
puts working families and children at risk? Not our problem,
you say; let them use vouchers. Sounds rather 19th century,
doesn't it? Excuse me. Eighteenth century.
But there is a problem. You are already underfunding
Section 8 accounts. You cannot say everybody in public housing
must shift to Section 8 and then not provide the money for it
to happen.
This budget is an embarrassment, but it and the news out of
the Administration of late seem all--the Department of late
seem all too common in this Administration.
Thank you, Mr. Chairman.
Chairman Crapo. Secretary Carson, we now turn to you. You
can make your opening remarks, and then we will follow that
with questions from the Committee. Please proceed.
STATEMENT OF BENJAMIN S. CARSON, SECRETARY, DEPARTMENT OF
HOUSING AND URBAN DEVELOPMENT
Secretary Carson. Thank you.
Chairman Crapo, Ranking Member Brown, and Members of this
Committee, thank you for inviting me here today to discuss the
work we do at the Department of Housing and Urban Development
and my plans for fulfilling our mission with fidelity to our
congressional mandate and the best interest of the American
people.
The President's 2019 budget proposes more than $41 billion
for HUD, a 1.4 percent increase over last year's request. We
believe this is sufficient to effectively administer our core
programs, continuing needed assistance to those individuals and
families whom we currently serve, our most vulnerable
populations, especially the elderly and persons living with
disabilities.
In addition, the requested level of funding for the Housing
Choice Voucher program will continue to support the same number
of households as we currently serve and should not result in a
termination of any housing vouchers.
HUD's budget would also make a significant investment to
continue the fight to end homelessness. Our budget proposes a
record $2.4 billion to support thousands of local homeless
assistance programs across our country.
As a doctor for many years, I am all too familiar with the
effects of lead exposure and a developing brain. As a result,
we are requesting $145 million to ensure that homes are free of
lead-based paint hazards and other dangerous contaminants,
especially for families with small children.
I also recognize that we need to do a better job respecting
that the funds we spend ultimately belong to the public.
Consequently, I have directed HUD's new Chief Financial
Officer, Irv Dennis, to design and implement a transformation
plan and lead an internal task force within HUD to combat
waste, fraud, and abuse. Irv has more than 36 years of private
sector experience and is the perfect person to bring that kind
of business acumen to the task.
Mr. Chairman, in spite of the billions of dollars we spent
as a Nation trying to keep pace with the capital needs of our
public housing stock, it has not worked. In fact, we are
falling further and further behind.
This budget recognizes that we need another way. HUD is
proposing to pivot from the current financially unsustainable
public housing model and working with public housing authority
seek a new way to propose and preserve affordable housing that
so many families need.
We are asking for the authority to give local public
housing authorities the flexibility to use their operating
funds to support their capital needs, and we are proposing to
convert many more distressed public housing units to a project-
based Section 8 financing model through the Rental Assistance
Demonstration, or RAD.
To date, RAD has stimulated more than $5 billion in private
investment to preserve this housing. Simply put, RAD is
working.
The budget proposes to open the door wider and allow more
public housing authorities to participate in this innovative
approach.
HUD is also supporting sustainable home ownership through
the programs at the Federal Housing Administration. Building
household wealth through home ownership remains a keystone to
helping Americans climb the economic ladder of success.
That is why we have taken several steps to ensure FHA can
continue to be a reliable source of mortgage financing in years
to come.
I am also here today to repeat a request that you have
heard from us for many years now and from several
Administrations. We absolutely need to invest in FHA's
information systems. FHA is built on a mainframe that is over
four decades old. Staff at our home ownership centers still
work on paper case files, creating inefficiencies and posing
numerous quality control issues.
Mr. Chairman and Members of this Committee, last year was
one of the most destructive in our Nation's history in terms of
natural disasters, with three devastating hurricanes and
destructive wildfires and mudslides in California. HUD is
already supporting the long-term recovery that is taking shape
in Texas, Florida, Puerto Rico, and the U.S. Virgin Islands.
Clearly, we have a lot of work ahead of us.
Since last September, Congress has appropriated more than
$35 billion through HUD's Community Development Block Grant
Disaster Recovery program. We have allocated the $7.4 billion
appropriated in September and soon will be allocating another
$28 billion.
Nearly every program office at HUD has staff working on
disaster recovery, many of whom have volunteered to travel to
disaster-stricken areas and serve on the front lines. My
prayers are always with those who are still struggling to
recovery. We will continue to stand with them throughout the
recovery process.
Chairman Crapo, before I conclude, I want to take a moment
to comment you and your colleagues from both sides of the aisle
for your work on S.2155, the Economic Growth Regulatory Relief
and Consumer Protection Act. This legislation contains a number
of common-sense housing provisions, including regulatory relief
for small rural PHAs, streamlining the HUD's Family Self-
Sufficiency Program and important protections for veterans with
federally backed mortgages.
In closing, Mr. Chairman, HUD's essential mission is to
provide safe, fair, and affordable housing for the American
people. Our mission also supports opportunity and self-
sufficiency so that families can move toward economic
independence.
I am eager to work with Congress and all the Members of
this Committee to achieve what I believe are our common goals
to better serve our fellow Americans.
Thank you.
Chairman Crapo. Thank you, Mr. Secretary, and again, we
appreciate your being here with us today.
I assure you there is strong support for the commitment you
have made to improving and strengthening affordable housing in
America, and we appreciate the efforts that the agency is
putting into it.
I also appreciate your comments with regard to the recent
legislation we passed in the Senate, Senate Bill 2155, and that
is where I am going to focus my questions.
Secretary Carson. OK.
Chairman Crapo. S.2155 would streamline regulatory
requirements for small public housing agencies operating in
rural areas, including simplified calculations for utility
consumption in public housing, relaxed inspection requirements,
exemptions from environmental review requirements, and shared
waiting lists.
The feedback I have received from the small public housing
authorities is that these reforms would benefit residents,
local housing authorities, and other sponsors of public housing
and housing choice voucher programs.
First of all, do you agree with that analysis, and could
you explain how this would help?
Secretary Carson. Yes, I do agree with them very strongly.
I mean, these are common-sense solutions and take into account
the differences between small PHAs and the large ones, and now
they can focus their attention on actually services for the
people as opposed to filling out endless forms, and I am sure
they are extremely grateful for this.
Chairman Crapo. Well, thank you, and just one more question
on that bill. S.2155 would also enhance HUD's Family Self-
Sufficiency Program by expanding it to more HUD-assisted
families and enabling current participants to obtain job
training, education, and child care services as they save up to
achieve financial independence. Can you talk about how these
provisions will help the families receiving housing assistance
and help them to achieve economic stability and mobility?
Secretary Carson. Yes. Well, this is exactly what we need
to be doing. Obviously, by amalgamating the programs, the self-
sufficiency programs for both the public housing and the
Section 8 program, a lot of efficiency and savings has
occurred, and we can move people toward better education, jobs,
decreasing debt, increasing savings, and really making them
much more a part of the American dream. So that is why I am
such a strong supporter of self-sufficiency acts.
And in the past, one of the things that we have been guilty
of--and I say ``we'' collectively as Government--is we tend to
pull the support from people when they being to climb the
ladder of self-sufficiency, and we are acutely aware of that
and work with you all to make sure that we are not sending the
wrong messages to people.
Chairman Crapo. Thank you.
And now I want to turn to one of our next very high
priorities in the Committee, housing finance reform. We are now
approaching a full decade since Fannie and Freddie were taken
into conservatorship. Finding a comprehensive solution to our
housing finance system remains a top priority for me for the
remainder of this Congress, and I think for all of us.
Can you speak to the role HUD has played and will continue
to play in exploring opportunities for housing finance reform?
Secretary Carson. Well, you know, HUD obviously is the home
of FHA and Ginnie Mae. FHA has a portfolio of $1.2 trillion;
Ginnie Mae, $1.9 trillion. So you are talking over $3 trillion.
So, obviously, it is a very important player in the whole
discussion about finance reform.
Also, FHA has been the one who has really concentrated on
first-time home buyers, on minorities, and people who
frequently have not benefited as much from the private sector
lending facilities, and we must continue that strong component
if we want these people to be able to realize the American
dream itself.
Also, in terms of making sure that fair housing practices
prevail throughout our system, that is something that we are
very, very much concentrated on, and making sure that we
maintain the financial stability of the system with such things
as the mandated 2 percent capital ratio, and things have been
done to make sure that we maintain that, against popular
demand.
Chairman Crapo. Thank you very much.
Senator Brown.
Senator Brown. You testify--you began your testimony by
saying your--this year's request is 1.4 percent above last
year's request, and it is--and I need a yes-or-no answer here
because I have a lot of things I want to cover, but it is a 14
percent cut from fiscal year 2017 enacted level, right?
Secretary Carson. Yes.
Senator Brown. OK. Thank you for that. I think it is
important to put that out there and not to mislead by saying it
is a 1.4 percent increase from a proposal that was ignored by
this Congress last year.
One of your proposals would charge mandatory minimum rents.
What is the annual income of a typical family that would be
affected by this policy change?
Secretary Carson. Most of these families are obviously
distressed. I think the number that you are probably looking
for is about $9,870.
Senator Brown. It is actually less. I am not looking for
any number. I just want the facts. It is less than that.
How much would they be charged under your policy?
Secretary Carson. The charge is going to be 30 percent of
the income, and for those who are work-able, do not have any
things that are impinging upon them, 35 percent of gross.
Senator Brown. Does not that strike you as fairly
remarkable in the era of tax cuts that have gone to upper
income people in a bigger deficit that--you say $9,000. Our
numbers are that the income is less than that, but if it is
$3,000 or $9,000, that you are charging that group of people as
much as $1,800, and that is a version that CBPP says was, a
leaked version, as much as $1,800, so that somebody is making
3-, 4-, 5-, 6-, 7-, 8-, $9,000 a year, and you are charging
them $1,800 more for their rent? Is that what you became
Secretary of HUD to want to do?
Secretary Carson. One of the things that I think is very
important is that we be realistic about our budgets. We are----
Senator Brown. Really about a budget after you all
supported this tax cut, blowing a hole in the Federal budget,
and you want to make up for it by charging somebody making
$5,000 a year, $150 extra a month. You call that realistic.
Secretary Carson. Last Friday----
Senator Brown. Others would call it cruel.
Secretary Carson. Last Friday, for the first time, we
passed a $21 trillion threshold in terms of the national debt.
If we----
Senator Brown. And that is----
Secretary Carson. If we continue to accumulate debt at that
rate----
Senator Brown. Nice try. I do not need the lecture, Mr.
Secretary. I understand that, but I wish you had said that
several months ago when this Congress passed a tax cut that
went to you and the President's Cabinet and people in the top 1
percent that are getting millions of dollars in a tax cut. Now
it is time to talk about the budget deficit? Maybe you should
have thought a little ahead as you plan to cut funding for low-
income people.
Do not forget one out of four people in this country who
rent spend 50 percent or more of their income in for housing.
One thing happens in their lives, and it is just a downward
spiral. You know that. OK.
A couple other questions. 5,200 Ohioans died from drug
overdoses in the 12 months measured by the most recent CDC
report, a 36 percent increase from August to August, what we
have. That number probably understates the death. You
apparently hired a 24-year-old campaign worker, with no
relevant experience, to work on this issue at HUD. Is that
true?
Secretary Carson. There was someone who was hired. I
generally do not get involved with lower level----
Senator Brown. OK. So you do not get involved in table
selection. Your wife does, even though she is not a Federal
employee. You do not get involved in ethics issues because----
Secretary Carson. If you are going to be throwing out these
kind of charges, you should give me an opportunity to answer
them.
Senator Brown. I will after I am finished with the last
question.
Last June, you hired a Chief Information Officer, Johnson
Joy, who resigned this week. Why did you choose him, and why
did he resign after only 9 months on the job?
Secretary Carson. He had a tremendous amount of experience
and technological advancement, and we needed to make a very
significant transformation.
I lost confidence in his ability to lead.
Senator Brown. Mr. Joy apparently used a contractor to a
contractor to hire a friend, Naved Jafry, who wildly
exaggerated his resume. Do you think it would be better to
advertise and compete for these jobs rather than hiring cronies
through a subcontractor in the future as you move forward?
Secretary Carson. I do not hire cronies and subcontractors.
I do not do that.
Senator Brown. Well, HUD seems to under your leadership.
Why did Mr. Jafry and Mr. Joy leave only this week after
this story hit the media? Is that the first you knew about it?
Secretary Carson. As soon as I found out about the
problems, we dealt with them.
Senator Brown. Does it bother you that you do not know
these things are going on in your agency until the media writes
about them?
Secretary Carson. I do not think that that is a fair
characterization.
Senator Brown. Well, it just was with these two. You just
said you found out about it, and these were pretty high-profile
political people. You found out about it, and then you fired
them.
Secretary Carson. One was high profile; one was not. And
when we find out about it, we dealt with it.
Senator Brown. Mr. Secretary, as you remember, I voted to
confirm you. Four other Democrats on this Committee voted to
confirm you. I am not sure I made the right decision.
Thank you.
Chairman Crapo. Senator Shelby.
Senator Shelby. Thank you, Mr. Secretary. A little
different tone now.
Secretary Carson. Thank you.
Senator Shelby. You have been here a year, about a year as
Secretary now, more or less. What are some of the things that
you have gotten your arms around? What are some of the
accomplishments in a year? A year is not a long time. I know
that.
Secretary Carson. Right.
Senator Shelby. What are just some of the positive things?
Secretary Carson. Well, there has been a multitude of
things. One of the firs things I was hit with was the demand
that we proceed with the 25-basis-point reduction and the
insurance premium, and that had been put in place by the
Administration that was leaving, without, I think, a lot of
thought and----
Senator Shelby. That would save people a lot of money,
would it not?
Secretary Carson. Yeah. And they thought it would allow
more people to be able to purchase homes.
We thought it was done inappropriately and said, ``Hold on.
Let us look at this.''
Senator Shelby. OK.
Secretary Carson. If we have to maintain that 2 percent
capital ratio, we maintained a 2.09. If we had gone with the
25-basis-point reduction, we would have ended up with a 1.76,
and we would have had to come to the Treasury to borrow money
like we did in 2013, and this whole hearing would have been
about that and tables.
Senator Shelby. As you look forward now, what are still--
you have been here 1 year, been there 1 year now. What are
still your biggest challenges? I know there are a lot of them
in the HUD.
Secretary Carson. Homelessness is a big one.
Senator Shelby. Senator Brown mentioned homelessness a few
minutes ago.
Secretary Carson. Right.
Senator Shelby. But is not there some connection to our
challenges in our community of mental health of all of our
people and homelessness? I know in my hometown of Tuscaloosa,
Alabama, a lot of the homeless--maybe not everywhere--are
deeply challenged with mental health.
Secretary Carson. Absolutely. That is a huge----
Senator Shelby. Is there a connection?
Secretary Carson. That is as huge problem throughout our
country.
You know, we made a mistake about 30 years ago with some of
our rulings to take these people out of a setting where they
could be easily taken care of, and we have an obligation, I
think, to take care of those people.
Senator Shelby. What are some of your other challenges that
you are trying to get your arms around?
Secretary Carson. Well, we have the Superfund problem going
on in various places around the country, dilapidated housing in
many places. We have----
Senator Shelby. Expand on dilapidated housing because I see
it everywhere. I see it in Birmingham. I see it in Atlanta. I
see it in Chicago. I see it everywhere.
Secretary Carson. Yeah. For instance, in Cairo, there was
just horrible oversight there by the housing authority, and
these places are totally uninhabitable. We had to come in and
find a way to house those people in a relatively quick manner.
There are other places. You look at what is happening
NYCHA. There are issues going on all over the country. We are
trying to address them. We are looking at why did these things
happen in the first place. We have had to get rid of dozens of
inspectors who have consistently been providing inappropriate
scoring.
There are a number of other underlying issues that have to
be taken care of in order to create the right kind of platform
so that we do not have these problems.
Senator Shelby. What do you expect to accomplish, you hope
if everything worked out for you, say, in another year? What
would you hope to get your hands around?
Secretary Carson. Well, I want us to, first of all, get
systems in place and the kinds of operating controls in place
at HUD so that we do not have things being done in an
inappropriate way.
You know, this whole furniture issue is an example of that.
We are putting in controls so that that does not happen while I
am here or after I leave. I think that is vitally important,
and it will save taxpayer money that way as well.
I also want us to change the image from that of just trying
to get more people into a program and to one where we actually
provide people with a ladder to be able to escape, and we are
working through the EnVision Centers concept because there is a
lot of need in our country, and there is also a lot of
resources, a lot of people who actually are compassionate. But
the two generally are not juxtaposed.
We are going to juxtapose those, and I think that is going
to make an extremely big difference.
We are also enhancing Section 3. It has been on the books
for 50 years. We are going to put some teeth into it so that we
can increase the workforce and also give people the kind of
skills which will allow them to escape dependency. It is really
about empowering our people, and yes, we need more affordable
housing. We need to look at creative ways in which to create
affordable housing, but we also need to be looking at ways to
move people out of affordable housing in a positive sense and
making more room for others so that we do not have these long
waiting lists. We need to look at it from both ends.
Senator Shelby. Thank you, Doctor.
Thank you, Mr. Chairman.
Chairman Crapo. Thank you.
Senator Menendez.
Senator Menendez. Welcome, Mr. Secretary.
Mr. Secretary, in an interview with the New York Times last
May after visiting low-income housing in Ohio, you cautioned
against making such housing, quote, ``a comfortable setting
that would make anybody want to stay.'' ``I will just stay
here, and they will take care of me,'' was your quote.
Now, apparently, your aversion to comforts and extravagance
do not flow to your office. In response to news reports that
you had ordered a $31,000 dining room set, a HUD spokesman told
CNN in February, quote, ``Mrs. Carson and the Secretary had no
awareness that the table was being purchased.''
Now, when you were asked this Tuesday in the House, you
replied that you do not intend to be responsible for what
anyone else said, which is an extraordinary statement because
every one of us is responsible for what our spokespeople say.
If he was wrong, he or you should have had the record set
straight.
Given what your spokesperson had said and the lack of any
correction from HUD, your post to Facebook on March the 5th can
only be read to indicate that you had no prior knowledge of the
furniture selection. You said, quote, ``I was surprised as
anyone to find out that a $31,000 dining room set had been
ordered.''
But in a chain of emails dating back to August of last
year, staff at the Department refer to the furniture set,
quote, ``The Secretary and Mrs. Carson picked it out.''
So let me ask you: Why did you mislead the American public,
the taxpayers that fund the Department's activities and tell
them you were not aware of this purchase when it is
indisputable that you and your wife were involved in selecting
this particular furniture set?
Secretary Carson. Well, it is not indisputable. I wrote in
the post on the 5th what my involvement was. It says there very
clearly what the involvement was. So for----
Senator Menendez. All those emails of your staff were
wrong? Your spokesperson was wrong? I mean, it is unbelievable.
Secretary Carson. All what emails? Tell me what the email
said.
Senator Menendez. The emails go back to August 2017. Staff
at the Department refer to the furniture set that, quote, ``the
Secretary and Mrs. Carson picked out.'' Did they make that up?
Secretary Carson. No. But I indicated that in the posting
that we were involved because they asked us to be involved to
pick something and that I thought the pricing was too high.
But here is the bottom line. The bottom line is that the
furniture is not at HUD, and there is no charge to the American
people, to the taxpayer, and we have put----
Senator Menendez. But only because the issues were raised,
Mr. Secretary.
Secretary Carson. And we have put special--or I have asked
the CFO to put in place what we need to make sure that this
does not happen again.
Senator Menendez. Let me go to a different set of
questions. January 5th, 2018, is it true that the Department
issued a notice effectively delaying implementation of the
affirmatively furthering fair housing rule, a long overdue rule
to help communities address persistent racial segregation, and
meet their obligations on the Fair Housing Act?
Secretary Carson. It is----
Senator Menendez. Is it just simply true? Yes or no.
Secretary Carson. It is true to say that we have been asked
by dozens of municipalities to hold off on that because it was
costing them between 100- and $800,000----
Senator Menendez. Has it been--has it been--so yes?
Secretary Carson. ----and to hire people----
Senator Menendez. Yes, it has been delayed?
Secretary Carson. ----and they were not able to comply with
it.
Senator Menendez. Yes, it has been delayed; is that
correct?
Secretary Carson. Yes.
Senator Menendez. That is not a false statement.
Now, is it true that the Department's fiscal 2019 budget
requested $3.5 million less than 2017 enacted levels for fair
housing programs?
Secretary Carson. I think----
Senator Menendez. Just simply a yes or no. Is that a
factually correct statement?
Secretary Carson. It is not a simple yes or no.
Senator Menendez. Whether there is $3.5 million less?
Secretary Carson. No. What----
Senator Menendez. I think it does not take a brain surgeon
to understand whether there is $3.5 million less in the budget
or not.
Secretary Carson. What is important is what are we
attempting to do.
Would it be possible to actually talk about some of the
actual principles of what we are trying to do?
Senator Menendez. Is it true that--I would like you to
answer my questions since you are rarely here before the
Committee on housing issues. This is, I think, the first
time since your nomination.
So is it true that the Department is considering changes to
is mission statement? I read that in March 7th, the Department
confirmed that it is considering changes to its mission
statement, including to remove references to inclusive
communities and communities free from discrimination.
Secretary Carson. It is not at all unusual when a new
Secretary comes in to change the mission statement and----
Senator Menendez. Do you intend to take those, those
statements?
Secretary Carson. And we have, at the senior staff level,
discussed changing it. The first iteration is the one that you
have read from. The next iteration was after we have gotten
input from all the staff, all 7,000 people who work at HUD.
That was my instruction.
That it got out and became a news story, that was not the
intention.
Senator Menendez. Well, look, let me close by saying
mission statements may not be policy directives, but in this
case, you have established your pattern and a practice of
suggesting that HUD intends to reverse course and ignore its
statutory obligations to end housing discrimination and promote
inclusive communities.
Secretary Carson. But I think----
Senator Menendez. And that is not something that many of us
are going to stand by and----
Secretary Carson. I am not going to stand by it either when
characterized that way. That is not at all what we are doing.
Senator Menendez. Well, we will see what the end result is,
Mr. Secretary.
Chairman Crapo. Senator Scott.
Senator Scott. Thank you, Mr. Chairman.
Secretary, thank you for being here this morning.
Secretary Carson. Thank you.
Senator Scott. I am not sure that you realized that you
signed up to be a human pinata, for it has been a bit
challenging this morning, and part of it has been around the
issue of the table. Folks are seeing that as an opportunity to
delve into some important questions, important issues as well,
as opposed to the focus and the attention that you have given
to HUD and self-sufficiency.
So I would love for you to have an opportunity to answer
the question about the table on record, and as it relates to
the overall spending that you have seen or that you have
authorized in HUD around refurbishing, refurnishing,
decorating.
Secretary Carson. Thank you.
Senator Scott. Please put that to rest for us.
Secretary Carson. Thank you.
You know, the initial stories talked about extravagant
taste of my wife in decorating my office. We spent a total of
less than $3,500 decorating my office, considerably less than
the historical norm.
The second story, it is not a table. It is 17 pieces of
furniture that we were asked to replace because it could no
longer be repaired after multiple attempts to repair it.
The bottom line is that table has not materialized, and
there is no cost to the people, none whatsoever, not even a
penalty cost for whoever ordered it, initially ordering it.
Also, we have taken advantage of the opportunity to put in
place controls to make sure that this process is done
correctly, and even though I was not aware of the $5,000
requirement, I still take responsibility for it as the head of
the agency. And I take responsibility for fixing it.
Senator Scott. Good.
Secretary Carson. And we have done that.
Senator Scott. Thank you.
Let us talk about HUD and the responsibilities of HUD for a
few minutes, as I have a few minutes left.
You were kind enough to start a listening tour around this
country to understand and appreciate the severity of the
problem of housing.
Secretary Carson. Yes.
Senator Scott. You were born and lived in poverty. I lived
in a single-parent household and understand the fragile nature
of housing for those folks who are living close to the edge and
frankly sometimes under the edge.
Secretary Carson. Absolutely.
Senator Scott. You spent some time in Spartanburg, South
Carolina, looking at the benefits of the historic preservation
tax credit and the power of making housing more affordable.
Part of the legislation that you mentioned, 2155, is my
Family Self-Sufficiency Act. That has a pathway to a better
future, when you talk about the importance of legislation like
the Family Self-Sufficiency Act as well as our conversation
yesterday around the Opportunity Zones and the opportunity for
us to leverage private capital with public dollars and do
something significant for those folks living in public-assisted
housing today.
Secretary Carson. Well, thank you so much, first of all,
for the tremendous effort that you have put in to family self-
sufficiency, with the right attitude, because these people are
resources for this country, and we need to be thinking about
how do we develop people, not spending so much time talking
about objects and houses. Houses are an important part of the
development of a person and giving them the kind of foundation
that they need.
I am absolutely thrilled with the public-private
partnerships and some of the things that I saw in South
Carolina with you, how you are able to convert a place that was
previously a refuge for drug addicts and people who were
selling drugs and all kinds of criminal activity, prostitution,
et cetera, and change that to a flourishing community, and the
big key being by bringing the private sector into the equation,
they now have an interest in the maintenance of that facility.
There are a number of different types of family self-
sufficiency programs. One of the ones that we are proposing now
would take part of the monthly subsidy and put it into an
escrow account, and you are very familiar with that concept.
And that escrow is tied to that particular unit, and all the
routine maintenance for that unit comes out of that escrow. So
if the screen always needs to be replaced, that is coming out
of that. Light bulbs. If you are always calling the plumber,
that is coming out of that. But if you learn to lift a lid and
fix that plunger yourself, it is growing, and if you leave
public support within a number of years, you get that entire
amount for a down payment because, as you know, that is one of
the major impediments for poor people being able to buy a home.
They may be able to maintain it, but they would never be able
to get it in the first place.
And they have also learned how to think like a homeowner,
and that really is what these self-sufficiency programs are
about, getting them to the point where they are able to
accumulate savings, where they are able to take advantage of
educational opportunities, where they are able to get the
training that they need, where we are able to provide day care
for a lot of the young women so that they can get their GED,
their associate's degree, their bachelor's degree, learn to be
self-sufficient, more importantly teach that to their children,
so we can break these cycles of poverty that have plagued our
country.
Senator Scott. Thank you, sir.
I will just close and wrap it up, Mr. Chairman, with just a
few thoughts.
First, I really appreciate your panoramic view of the whole
person and looking for ways to move folks toward self-
sufficiency. I think as we continue to focus on the actual job
of the HUD Secretary that we will be surprised and pleased with
the outcome.
The distractions that we have seen in the news is not
helpful whatsoever. I appreciate you taking responsibility,
number one, as you just did.
Number two, I appreciate the fact that you have set
internal controls so it will not be repeated.
And number three, I hope that all that leads us back to
what we should be focused on is the incredible human potential
that resides in so many places that only needs home and
opportunity and a pathway carved forward so that they can make
the decision to move forward because I know that they want to,
and they will, if given the opportunity.
The rest of the sideshow should be stopped and moved out of
the way so that folks can see their best and brightest days
ahead of them.
Thank you.
Secretary Carson. I thank you, sir. That is very
encouraging.
Chairman Crapo. Senator Jones.
Senator Jones. Thank you, Mr. Chairman, and thank you, Mr.
Secretary, for being here.
I would like to talk a little bit about the--as I
understand it--and you correct me if I am wrong here, but the
Department's budget proposal is to eliminate funds for
community development block grants, and much in my State, I
think, has been impacted a lot by those block grants,
particularly with regard to sewers.
We have some serious, serious issues in Alabama,
particularly in the Black Belt with sanitation and sewer
systems that are outdated. Raw sewage is being--backing up into
homes. I know that is not the case for everyone, but it is a
serious problem in Alabama.
So I have not seen in the President's proposal certain
infrastructure dollars available for a sewer project, so how
would you address in the housing context an issue for sewer if
you plan on doing away with the block grant, Community
Development Block Grant proposal.
Secretary Carson. Thank you for that question, and
congratulations on your election.
Senator Jones. Thank you.
Secretary Carson. First of all, CDBG has had a very
positive impact in many areas of the country. There also have
been problems with directing the funds to the people who are
supposed to be impacted, which are the low-income individuals.
There are other mechanisms for taking care of it, but I
will tell you that there are billions of dollars in the CDBG
pipeline already. It is going to take more than a year to
disburse those funds, number one.
Number two, through programs like the Opportunity Zones,
which I hope you are becoming familiar with, it will be
possible to address many of the same types of issues while at
the same time encouraging tremendous input of private capital
into those zones.
Senator Jones. On that real quick, I mean--and I appreciate
the fact that you have got money in there. We need some, and I
would invite you to come to Alabama to see some of this.
But, look, I am all in favor of the Opportunity Zones. I
think that is a great idea, but do you really expect a New York
investor or somebody to invest money in one of the poorest
counties in Alabama to help with their sewers? Do you really
think that that is something that an investor is going to do?
Secretary Carson. When it is incorporated into a much
larger project, when you incorporate the whole area, very
frequently you have to deal with the infrastructure problems as
well. You have to deal with the housing problems as well. So
all of them are interconnected.
Senator Jones. I hope you are right. I really question
whether or not we are going to get that kind of private
investment in the areas that are impacted most in poor rural
America, but be that as it may, I am hoping that--I think
Congress will continue to fund those grants.
The other thing, I want to follow up with Senator Shelby's
question about the dilapidated housing that is apparently a
problem that you have recognized. Senator Shelby has seen it. I
have seen it. But, again, the Administration proposed to
eliminate the housing capital fund that repairs this public
housing. It is aging.
In Alabama, we have $50 million that usually comes in, and
those funds are also desperately needed. How are you going to
make up that difference to address the very needs that you
yourself talked about a few minutes ago in your answer to
Senator Shelby?
Secretary Carson. Well, one of the things that I have
noticed is that we are not building a lot of public housing
anymore. There is a good reason for that. It generally tends to
fall into disrepair, simply because there is not the local
interest in it.
By converting these to public-private partnership
opportunities, through things like the RAD program, which has
been extremely successful, 88,000 units have already been
revamped that way. We have 30,000 more scheduled for this year.
We have a waiting list of 86,000. Those things have been
working very, very effectively. That coupled with monies that
will be brought in through the Opportunity Zones, I think will
take care of a lot of issues.
We are looking at unleashing probably in excess of $2
trillion. Those are major, major changes.
Senator Jones. Well, I hope you are right. I question
whether or not there is going to be that kind of investment in
these housing projects. They do not make a lot of money. There
is not that much of a return of represented people that have
been in those projects, of represented people who have owned a
couple of those, but we will see. We hope you are right, but I
also hope that the Congress will once again come back and find
a different route and continue to fund that program as well as
the development block grants.
Secretary Carson. Thank you.
Senator Jones. I appreciate your efforts.
And the one thing I would say finally--and I know my time
is up, but I do appreciate the fact that--despite all the
distractions, I do appreciate the fact that you are focusing on
trying to lift people up. I think that is a good thing. I just
do not want to ignore the fact that people, despite all the
efforts to lift them up, they just cannot quite make it, and
there is a lot of people in my State, that despite their
efforts and their desire and their heart and they are trying
like hell, but they just cannot quite make it. And we need to
be there for those people continually.
Secretary Carson. I agree. We do need to be there for them,
but that is part of the reason that we are embarking upon the
EnVision Center project because we want to put the resources in
place conveniently for them to be able to get there.
The reason that you are successful, the reason I am
successful is because there were things in our environment,
there were people in our environment that helped us along the
way. Nobody makes it on their own.
Senator Jones. We can agree on that one.
Thank you, Mr. Chairman.
Chairman Crapo. Senator Tillis.
Senator Tillis. Thank you, Mr. Chairman.
Doctor, Secretary Carson, welcome to the Committee.
Secretary Carson. Thank you.
Senator Tillis. When we met in my office before your
confirmation, I talked a little bit about how I thought you
could be a change agent in the Department and what was going to
be critical is fairly quickly get in there and identify
programs that are working and double down on them and identify
programs that are not, returning the value, and take the tough
political position that we can put this money to a better and
higher purpose.
I, for one, think that the discussion about reducing your
resources right now is premature. I think you need--probably
need what you have and maybe some more, and what progress have
you made in terms of really looking at the Department and
trying to really effect change so that we know that we are
getting the best value and having the best impact on the people
who need it?
Secretary Carson. Well, thank you for asking that question.
We have made an enormous amount of progress: first of all,
in terms of stabilizing the Mutual Mortgage Insurance Fund; in
terms of stopping the hemorrhaging coming from mortgage
program; stopping the endorsement of PACE loans, which were
putting the taxpayers at risk; stopping the churning that was
going on with veterans and strengthening, you know, the HUD-
VASH program and other homelessness programs. This is one of
the reasons that we have asked for more for homelessness than
we ever did before.
But looking at the actual numbers for the programs--there
is over 7,000 programs--we are looking at the ones that
actually work, evidence-based changes.
And then looking internally, this is the first time that we
have had a CFO in years, and what happens when you do not have
a CFO in a large organization? You develop multiple little
siloes, every one of which thinks that they are doing things
the correct way. Well, we are bringing that all under one dome
and assigning responsibilities, and I think that is making a
very large difference. It is ruffling a few feathers in some
places, but people do not like change. That is OK because it is
change for the good. It is going to work in the long run.
Senator Tillis. Mr. Secretary, I did not plan to speak
about it, but Senator Jones prompted a thought, and it has to
do--I think it is very important for you to hold the line on
identifying as many people that you can lift up and out of any
reliance, mainly because that will provide you ultimately with
more resources for those, as Senator Jones has correctly
stated. It may not. So I think that we always have to
constantly make sure that we have got that balance right so
that we can have that impact that actually changes the
trajectory of somebody's life, and when you do that, then you
can start really focusing on those who have unique
circumstances that maybe with additional resources, they too
can be lifted out of their circumstances.
Secretary Carson. Yes.
Senator Tillis. I think it is very important, as somebody
who was in those circumstances, and actually, it relates to my
next question.
About a month ago, I was in Nashville, where I spent my
junior high and high school years, and I went--rode always to a
trip down Memory Lane and go to the places I lived. I lived in
a trailer park there, and I went to Sugar Cane Lane, which was
the trailer park I lived in, and I took a picture of the
trailer. And it made me think about manufactured housing, and
it made me think about people who--when I--I ended up having to
live there. I moved out of the trailer park. I moved back,
bought my own. I lived there with my family first.
I do not think that most people recognize that the
regulatory burden that we place on the citizens of the United
States hit the poorest among us the hardest.
Secretary Carson. Mm-hmm.
Senator Tillis. And if you are buying a mobile home and you
are buying manufactured housing and you have got to go through
the morass of regulations that we have today, there is no doubt
that you are creating a higher price point.
Secretary Carson. Absolutely.
Senator Tillis. My case, it could be the difference between
a single wide and a single wide with a bump-out.
But what are you doing--and that is more of blade levels.
You may not be able to answer the question specifically, but it
is one example of regulatory streamlining and regulatory relief
that I think we need to focus on, and there are a number of
others. Can you shed some light on that?
Secretary Carson. I am glad you brought that up.
Manufactured housing accounts for 10 percent of single-
family dwellings, 22 million households. So it is substantial,
and it is actually a potential solution for some of the housing
issues, particularly in rural areas.
If you look at the progress that has been made in
manufactured housing recently, it is amazing. In fact, a lot of
the housing, you would not be able to distinguish from site-
built housing, and yet the pricing is better.
But the regulations are ridiculous. So we have put a
moratorium on that. We are inspecting from top to bottom all of
those regulations right now and getting rid of a lot of them
because I think this is an area where we can take advantage.
Senator Tillis. Thank you, Mr. Chairman.
Chairman Crapo. Thank you.
Senator Van Hollen.
Senator Van Hollen. Welcome, Mr. Secretary.
Secretary Carson. Thank you.
Senator Van Hollen. I want to go back to the question asked
by the Ranking Member at the beginning regarding the overall
budget priorities because, as you agreed, the proposal that was
put forward was a 14 percent cut from what had actually been
provided the year before, and it does go to the question of
priorities.
Are you pleased with what you have seen of the current
budget proposal working its way through the Congress on a
bipartisan basis in terms of the numbers for HUD?
Secretary Carson. It could be improved. There is no
question that it could be improved, but we will work with what
we have. And we recognize that the whole budgetary process is
not a simple one.
Senator Van Hollen. Right.
Secretary Carson. We make proposals. It is actually
Congress who actually establishes what the budget is.
Senator Van Hollen. In terms----
Secretary Carson. And whatever that budget is, we will work
with it.
Senator Van Hollen. I understand that.
But in terms of the overall levels for HUD, it is
substantially more than you asked for. Are you pleased with the
increase that was provided by the Congress?
Secretary Carson. I am happy that we will be able to do
even more----
Senator Van Hollen. Right. You will be able to do more.
Secretary Carson. ----more effectively and more
efficiently.
Senator Van Hollen. So I was just reading a tweet from the
President of the United States this morning, where he was
praising the funds for the Defense Department and military,
which has bipartisan support here. He says he got the most ever
for the military, and in fact, Congress has been really working
on a bipartisan basis. Then he goes on to say had to waste
money on Democratic giveaways. You do not believe that the
budget here for HUD is a giveaway, do you?
Secretary Carson. I would not use those terms, but I would
point out, by the year 2048, everything we take in will be used
to service the debt, and there will not be any money for any
program.
Senator Van Hollen. And, Mr. Secretary, I have been talking
about the dangers of the debt for a very long time, and I think
the Ranking Member pointed out that----
Secretary Carson. Well, you are an ally, then.
Senator Van Hollen. ----the President just signed something
that added over $1.5 trillion to the debt.
CDBG, because you zero that out, right? You zeroed that out
2 years in a row in your proposal. The Congress has restored
those fundings. I know there is a number of projects that are
still working their way through the pipeline, but that is an
oversubscribed problem--program. The demand for that, I can say
in the State of Maryland, is much larger than the resources
provided.
And it is interesting that when we provided hurricane
relief, a huge amount of that money went in the form of CDBG,
did it not?
Secretary Carson. Well, remember, with hurricane relief,
you are talking about CDBG-DR; a completely different program,
by the way.
Senator Van Hollen. But one of the benefits of that program
is that the money is flexible and can go to local jurisdictions
for needs.
But let me--I want to ask you a particular----
Secretary Carson. No, that is not true. DR, it is very
targeted.
Senator Van Hollen. But I actually have--and I am also
looking now at the regulations that you had that went through
that accompanied the monies for hurricane relief, and there is
actually something I thought was a good policy in there, which
is that you say that we should not be using these Federal funds
to rebuild in areas where you have flood plains, and it is
important to take into account continued sea level rise. Can
you explain to the Committee why that is important to have
there as part of the regulations?
Secretary Carson. Yeah, because it really does not make any
sense to create the circumstances for the same thing to occur
once again. And that includes also looking at things like
building materials, and perhaps instead of just using drywall
and creating the same problem if you have a flood, using some
of the aquaphobic materials, which repel water, so that you do
not have that problem again.
Senator Van Hollen. I appreciate that.
I just, Mr. Chairman, would like to put in the record, an
article, Washington Times, ``HUD Tells States To Consider Sea
Level Rise When Rebuilding From Storms.''
Chairman Crapo. Without objection.
Senator Van Hollen. And I think this was a good policy. I
hope you will talk to the President about it because one of the
first things the President did was reverse an executive order
from the previous Administration that applied that common-sense
principle governmentwide. I mean, the same goes for Federal
funds through HUD or transportation. It does not make sense to
invest taxpayer dollars in places where it will not go.
So, Mr. Chairman, as we consider the flood reform
legislation, I really hope we will focus on this, and I
appreciate the Secretary's testimony.
The last thing I will say--and Senator Menendez mentioned
this--I hope you will go back, as you look at that HUD mission
statement--the omission, at least in the current draft of
inclusive communities free of discrimination, I think the
concern here is that some of the policy positions that you and
the Administration have taken, including your early opposition
to the new rental--the provisions put forward by the previous
Administration to try and prevent the concentration of poverty
and segregation and the use of vouchers, that sent a signal.
And when you see the proposed change in mission statement on
top of that, it is troubling. So I just wanted to flag it.
Secretary Carson. I will take that----
Senator Van Hollen. It is not just a question of words. It
is real concerns about actions out there suggesting a real
production of mission.
Secretary Carson. I appreciate that, sir, and that is, in
fact, the reason that I wanted input from all 7,000 of our
employees, did not necessarily want input from all the news
media, but we got it, anyway.
Senator Van Hollen. Thank you, Mr. Secretary.
Chairman Crapo. Thank you.
Senator Cortez Masto.
Senator Cortez Masto. Thank you, Mr. Chair.
Welcome back----
Secretary Carson. Thank you.
Senator Cortez Masto. ----Secretary Carson.
And I am going to harp on the same thing because it is a
crisis in this country, particularly in Nevada, which is
affordable housing crisis.
Nearly every community in this Nation has an affordable
rental housing crisis, and it is worse in Nevada. Families
earning $30,000 a year are unable to find an affordable home.
For every 100 extremely low-income families, there are only 15
affordable apartments.
High rents are driving thousands into homelessness. Our
waiting lists for public housing and Section 8 are in tens of
thousands, with families waiting years for help, yet this is
the second year in a row that this Administration planned to
eviscerate the already inadequate funding that we provide for
affordable housing.
Thank goodness, Congress is the one that provides the
funding and saw the need to ensure that we are shoring up those
resources for affordable housing.
But what I would like to know, now that you have those
resources, what is your plan to help us address the affordable
housing crisis in this country?
Secretary Carson. You know, one of the things that has
really impressed me as I have traveled around the country are
places like Liberty Square--you may be familiar with that in
Miami, one of the notoriously horrible public housing sites--
that through the public-private partnerships is going from 700
units to 1,600 and developing a complete holistic community.
Those are the kinds of things that I like.
You look at East Lake in Atlanta, one of the most crime-
ridden places, with schools that were failing, and now one of
the two top charter schools and a neighborhood that is
flourishing and trying to keep people from the outside from
coming in and taking over.
Senator Cortez Masto. Thank you.
And, Secretary Carson, I do not mean to interrupt. I only
have so much time. I am talking about affordable housing, not
just Section 8. I am talking about housing for individuals that
want to rent a home because they cannot afford to purchase it,
and they cannot even afford the rents. So what are you doing?
What is----
Secretary Carson. Sure. Those are affordable housings that
I just talked to you about.
Senator Cortez Masto. Right. And there is workforce housing
that we need in this country that is not affordable as well.
So talk to me about what HUD is specifically doing, what
programs. What are you doing to address this need in our
communities and working with our State and local communities?
Secretary Carson. One of the things that I think has been
quite effective is our push to enhance Section 3 and make it
more than just a suggestion.
Senator Cortez Masto. What do you mean by a push to
enhance?
Secretary Carson. Well, Section 3 has been on the books for
50 years, has been seldom used because it is easy for people to
find excuses not to use it. So we are tightening that up to
make it--and use it, and for example, I was in Chicago
recently. An entire building was being redeveloped by Section 3
workers. They were incredibly proud of the work they were
doing, but more importantly, they were gaining skills which
allowed them to the move out, which made room for others.
Senator Cortez Masto. So besides Section 3 housing and a
push to enhance it, what else are you doing?
Secretary Carson. Well, we are trying to increase the
number of units that are dealt with through the RAD program--
this has proved to be incredibly effective--other types of
public-private partnerships, especially going to be enhanced
through the Opportunity Zone, with an enormous amount of
infusion of private capital into these distressed areas.
Senator Cortez Masto. OK. So can I get a commitment from
you that you will work with us on addressing affordable housing
and specifically identify the programs within HUD and within
your agencies that are geared toward addressing this issue?
Secretary Carson. I would be more than happy to do that.
That is what we are trying to do.
Senator Cortez Masto. Thank you.
When you appeared before this Committee prior to your
confirmation, you promised me that you would make sure that
lesbian, gay, bisexual, and transgender people were not faced
with discrimination.
At your confirmation hearing on January 12th, in response
to a question from Ranking Member Brown about some of the
concerning comments you have made about LGBTQ people, you
assured this Committee saying, quote, ``I would enforce all the
laws of the land, and I believe that all Americans, regardless
of the new things that you mentioned, should be protected by
the law.'' But instead, you have continued to undercut
provisions, HUD's efforts to end discrimination.
On July 6th, 2017, I along with 28 other Senators sent a
letter to the Department requesting that you reinstate
resources that were on your agency's website that protect LGBTQ
people from housing discrimination, and I still have not
received a response. What has been the delay? Is it normal for
your agency to take nearly 9 months to respond to 28 U.S.
Senators?
Secretary Carson. Well, first of all, we have finally got a
General Council in December. I do not know that you can have it
both ways.
Senator Cortez Masto. What does that mean?
Secretary Carson. That means you cannot tell us to deal
with this complex legal issue and not give us the people that
we need to do it.
Senator Cortez Masto. A complex legal issue that was
already determined by legal counsel in the Administration prior
to you? You failed to make changes and then think that you need
to have a second look at it?
Secretary Carson. A complex legal issue that must take into
account the rights of all the constituents who are involved and
not just from one point of view.
Senator Cortez Masto. I am not sure I understand what you
are talking about, but I would appreciate a rapid, quick
response. Now that--are you saying that you still need legal
counsel before you can make a determination----
Secretary Carson. I am saying we----
Senator Cortez Masto. ----that you want to prohibit
discrimination?
Secretary Carson. We have spent a lot of time talking about
this issue since the General Counsel has been there, and I
think there is going to be something going back up very soon.
We have already got something going up about the homeless
children who are being affected.
This is an issue that we are truly concerned about, but it
has to be done----
Senator Cortez Masto. Well, you should be, and I think we
are all concerned about it.
Secretary Carson. ----the right way.
Senator Cortez Masto. Secretary Carson, I know my time is
up. I appreciate the Ranking Member and the Chair's indulgence.
Thank you.
Chairman Crapo. Senator Warren.
Senator Warren. Thank you, Mr. Chairman.
Fifty years ago, Congress passed the Fair Housing Act, but
housing discrimination is still a huge problem in this country.
According to a recent study, minority borrowers were more
likely to be denied a mortgage than similar white borrowers in
61 cities across this country.
Now, HUD is responsible for combating housing
discrimination, and during your confirmation process, I asked
you about your commitment to enforcing laws against housing
discrimination, despite whatever personal feelings you had
about those laws, and you said at that hearing, quote, ``I will
follow the law.'' And I remember hoping that that was true.
So, Secretary Carson, it has been a year now. Can you name
a few of the things you have done to reduce housing
discrimination in your time at HUD?
Secretary Carson. First of all, we are constantly involved
in lawsuits that we have brought against people for housing
discrimination.
Senator Warren. So are you saying you have initiated many
lawsuits over the past year on discrimination issues?
Secretary Carson. Yeah.
Senator Warren. Is that what you are saying?
Secretary Carson. That is an ongoing process, even to this
day.
Senator Warren. So you have initiated how many lawsuits
over the last year?
Secretary Carson. I cannot tell you how many. We can
certainly get someone to follow up with you on that.
Senator Warren. OK. Anything more?
Secretary Carson. I think those--that is obviously very
important.
The way I kind of look at it is--when I talk about fair----
Senator Warren. I am sorry. I am not asking you to get into
your description. I just want to know what you have done to
reduce--the specific things you have done to help reduce
housing discrimination, and you said you have initiated many
lawsuits, and you will get back to me on the exact number. And
I just want to know other specific things you have done.
Anything more?
Secretary Carson. Well, I would simply say that what we do
is to try to create a fair environment for all people in all of
our policies. So when we create a fair environment for
everybody----
Senator Warren. Secretary Carson, I will take that----
Secretary Carson. ----that means minorities as well.
Senator Warren. That is the question I am asking, though,
is dealing specifically with discrimination, which is the
problem.
Mr. Secretary, I wanted to give you a chance to make your
case because when I look at your track record at HUD, I just
see you heading in the wrong direction; that is, going
backwards.
And I want to give you one example. The Fair Housing Act
directed HUD to, quote, ``affirmatively further fair housing.''
That is the law, and in 2015, HUD implemented that mandate by
issuing a rule that required communities that asked for block
grants from HUD to analyze obstacles that minority residents
face and to propose plans to address them.
Civil rights groups and housing advocates at the time said
the rule would be an important tool for reducing segregation
and discrimination.
Then you took over, and you delayed the effective date of
that rule until at least 2020. You even said that HUD would not
even review whatever information cities had about
discrimination that they had already submitted to HUD.
So, Secretary Carson, do you think that delaying the 2015
HUD rule for several more years has helped reduce housing
discrimination?
Secretary Carson. I hope you will give me an opportunity to
answer that question.
Senator Warren. Well, I hope you will answer it.
Secretary Carson. OK. First of all, we were petitioned by
dozens and dozens of cities and municipalities to, in fact,
delay it because it cost between 100- and $800,000 to follow
the regulations that were put in place, and they had to hire
two or three people.
This is great if you have a lot of money. It is not good if
you do not.
Senator Warren. Excuse me, Secretary Carson. Let me just
remind you, this is a question about following the law. The law
clearly says affirmatively further fair housing. It does not
say cut back on that because you are concerned about compliance
cost, and I have to say I am very concerned that you pick
compliance costs as your answer, when how you had previously
described your real concern as, quote, ``that this was a failed
socialist experiment to try to reduce discrimination.''
Let me ask you about another example. The Obama
administration had issued a rule on housing vouchers that made
a critical change in how the value of a housing voucher was
calculated. It was called the Small Area Fair Market Rent Rule.
The Obama administration had collected mountains of data
showing that changing the calculation would reduce segregation
in metro areas.
But when you took over, you tried to delay the effective
date of the rule for another 2 years. So did you think that
delaying the effective date of this rule would reduce housing
discrimination?
Secretary Carson. Well, first of all, we did not delay it.
What we----
Senator Warren. You tried.
Secretary Carson. Let me tell you what we did. We said
those municipalities that are not ready to implement it,
because we had multiple people call, said, ``We cannot do
this,'' we said, ``You have another year to get ready.'' For
the ones who were ready to do it, we said, ``You can do it
right now or any time up until that year.'' So we did not delay
it. That was a mischaracterization.
Senator Warren. You know, I am sorry. The reports were that
you tried to delay it and got into some trouble on this.
Secretary Carson. Those were the reports. That is not the
facts.
Senator Warren. You know, Mr. Secretary, a lot of people
are criticizing you for spending tens of thousands of dollars
in taxpayer money on fancy furniture, and do not get me wrong.
I think scamming the taxpayers is a scandal. But the biggest
scandal of your tenure is your unwillingness to do your job and
enforce the laws that reduce housing discrimination and
segregation across this country.
Decades of housing discrimination have helped create an
enormous wealth gap between white and black families, and the
gap between white home ownership rates and black home ownership
rates is 30 percentage points, larger than it was back in 1968.
In 1968, the typical black family had one-sixth as much wealth
as the typical white family. Now it is one-tenth. We have gone
backwards since the Civil Rights era.
It is HUD's job to help end housing discrimination. That is
what the law said. You said you would enforce these laws. You
have not, and I think that is the scandal that should get you
fired.
Thank you, Mr. Chairman.
Secretary Carson. Well, I do not think that you have
characterized things in any way close to what is accurate, but
you are welcome to say whatever you want.
Senator Warren. I really resent that remark. I have asked
the question about how it is that delaying enforcement of rules
that were already in place, to delay--to help end housing
discrimination would help. I asked you to make your case----
Secretary Carson. And I explained to you----
Senator Warren. ----and all you can say is compliance costs
were high.
Secretary Carson. And I explained it to you.
Senator Warren. That does not explain how it is that you
were going to delay enforcement of those rules and that was
going to help end housing discrimination.
Secretary Carson. I think I explained it to you quite well
that with the Small Area Fair Markets----
Senator Warren. Well, we see that very----
Secretary Carson. ----that we could not tell people that
they could not do it.
Senator Warren. We see your--we see that very differently.
I would not describe it as quite well.
Secretary Carson. And we told them that they could go ahead
with that immediately. There is no delay if you are ready to do
it.
Senator Warren. You will not even look at the data that has
come into HUD. That is not a commitment to ending housing
discrimination.
Chairman Crapo. Senator Reed.
Senator Reed.
Senator Warren. I apologize for going over.
Senator Reed. Thank you, Mr. Chairman.
Mr. Secretary, in our several conversations before your
nomination and otherwise, I made the point about veterans
homelessness.
Secretary Carson. Yes.
Senator Reed. We owe a great deal to our veterans, and it
is, I think, discouraging to all of us when we see them without
adequate housing, and too many of them are in that situation.
The Interagency Council on Homelessness will be completing
a report soon, which we have requested. Could you update the
Committee on your efforts that you have taken directly to
address this issue of veterans homelessness?
Secretary Carson. Well, 1 percent of our population
protects the other 99 percent of us, and I think we owe a great
deal to our veterans.
And the HUD-VASH program has been responsible for a 47
percent reduction in homelessness for veterans. We will
continue to support that program and enhance it.
Also, many of our other homeless programs affect veterans.
We have asked for a record amount of money for homeless
programs this year, including the Continuum of Care Program,
which supports more than 7,000 different homeless programs,
many of which are affecting our veterans.
But the place where the biggest problems with veterans
homelessness are on the West Coast and in New York City, and it
is principally because the incomes are not rising as fast as
the property values. And because of some of the restrictive
regulations and zoning characteristics, that is a big problem,
which we are going to need a lot of help because we do not have
jurisdiction over the zoning.
Something needs to be done about that because a lot of
people have this idea that if you are bringing multifamily
housing in that you are going to bring in some kind of
dilapidated project. That is on longer the case, particularly
when it is done through public-private partnerships. These are
beautiful places, and we are going to need help obviously from
Congress and from local and State governments to be able to
help rectify that situation.
But across the rest of the country, not including the West
Coast and New York City, homelessness is actually going down,
and you have probably have read many of the reports that a
number of municipalities have declared victory when it comes to
homelessness for veterans.
Senator Reed. In fact, Mr. Secretary, I think in Rhode
Island a few years ago, thought we were at that moment, and in
fact, ironically and unfortunately, our homelessness population
of veterans is going up. And we are not alone. Because of our
small size, we are looking at estimates of about 89 homeless
veterans in 2016, but that is 95 now. That is just six or seven
men and women, but that is important to me.
The other issue--I am glad you put the emphasis on the HUD-
VASH program because, unfortunately, the President requested in
FY18 just $7 million of a $40 million program and nothing for
FY19.
Secretary Carson. Yes. The reason for that is because we
have adequate vouchers. They can be reissued.
We do need some authority from Congress to shift the
vouchers around, but we have adequate numbers. When we get to a
point where it is getting close, we will ask for more money.
Senator Reed. Well, you know, again, my concern is that it
is more than close, and particularly, you point out some of the
higher-price areas of the country where the--if you could
consider even increasing the voucher, that would make a
difference, but we have just too many veterans that are not
housed, to be sitting back and saying we do not need any
additional resources.
I think--I hope our omnibus, with Senator Collins' efforts
and my effort, but her efforts particularly, we will provide
$40 million for 5,100 new housing vouchers for veterans. With
the President's proposal, there would be zero, and we would
have some real problems.
The other issue is not so much the veterans population. It
is the chronically homeless, those people who consistently are
unable to be housed, despite efforts. Sometimes they qualify
for benefits, sometimes they receive benefits, but they just
cannot find themselves into a permanent stable living
arrangement. Any comments or thoughts to identify and address
these needs?
Secretary Carson. Well, first of all, we need to recognize
that it actually costs more to keep a person on the street than
it does to house a person, and that is the whole concept
between Housing First, which we appreciate and embrace.
But I add to it housing second and housing third, which
means housing second, you diagnose the reason that they are
there, and housing third, you do everything you can to fix it.
And that along with examining each of the homelessness
programs in terms of their effectiveness is what is making the
difference as we continue to drive it down.
And someone did make a comment that homeless had gone up on
the watch of this Administration. That .7 percent increase was
from the homelessness count in January of 2017, which was for
the year 2016, just to set the record straight.
Senator Reed. Well, again, we have to do all we can to keep
that record of decline, which I think it has been over the
years preceding 2017, accelerating, not decelerating, and that
is one of the reasons we funded the VASH housing, HUD voucher,
so----
Secretary Carson. And I appreciate your attention to that.
Senator Reed. Thank you, Mr. Secretary.
Thank you, Mr. Chairman.
Chairman Crapo. Thank you.
Senator Cotton.
Senator Cotton. Thank you, Mr. Chairman.
Thank you, Mr. Secretary. It is good to see you again.
Secretary Carson. Me too. Thanks.
Senator Cotton. I want to speak about Property Assessed
Clean Energy loans. We discussed this last year.
In June 2016, the Department of Housing and Urban
Development decided the Federal Housing Administration would
change its mortgage policy to start ensuring mortgages that had
a PACE lane. For those not familiar with it, PACE loans or PACE
lanes are collected through local taxing authorities. They did
not go through any kind of underwriting, and they had super
priority over mortgages. So that meant in default, the lender
who had installed, say, solar panels or new windows or
something, would be paid back before the mortgager or before
the taxpayer if that mortgage is insured by FHA.
There were horrible cases, instances of elderly widows
being scammed out of $50,000 on loan shark-level interest
rates, and we first discussed that back in April of 2017.
I want to show you a flier that we recently came to see. I
think it goes to show that these loans are placed in priority,
no money down, and clearly demonstrates, if you just look at
some of the language on this flier, that they are being
marketed toward people who had bad credit or who have no
credit, and designed to scam out homeowners and ultimately the
people from whom they borrow money or, in your case, the
taxpayer who insures their mortgages.
I mean, look at this. ``Have bad credit? No problem. What
qualifies is your property.''
These loans average $25,000, which means the taxpayer could
be on hook under the 2016 policy for up to $25,000, and I would
ask you to look at it and put out some new guidance, and I want
to thank you.
Secretary Carson. Absolutely.
Senator Cotton. Your decision in December, on December 5th,
you announced that FHA would no longer issue new mortgages on
properties that included these kind of PACE loans. I just want
to read briefly from the statement you issued at the time
because I found it very compelling: ``FHA can no longer
tolerate putting taxpayers at risk by allowing obligations like
these to be placed ahead of the mortgage itself ahead of
default. Assessments such as these are potentially dangerous
for our mutual mortgage insurance fund and may have serious
consequences on a consumer's ability to repay or when they
attempt to refinance their mortgage and sell their home.''
Thank you again for that decision, Mr. Secretary. I want to
point out to you, though, that the Senate recently passed the
Economic Growth Regulatory Reform and Consumer Protection Act,
which included language from my bill that would subject these
scam loans to the Truth in Lending Act.
Secretary Carson. Absolutely.
Senator Cotton. In your opinion, does that represent a
positive step forward for these consumers and the taxpayer?
Secretary Carson. That is a huge step forward, and I just
want to thank you for taking the lead on this because it was
really you who brought this to my attention in the first place.
And we did act upon it, and I do appreciate the fact that there
is recognition that we actually do do some good things.
Senator Cotton. Thank you.
And I hope the House passes it and the President can sign
it into law in short order, so when vulnerable consumers are
targeted by these scam loans, they will at least know the true
terms that they are facing for the loans.
However, even if that is--does pass into law and the Truth
in Lending Act applies to these PACE loans, they would still
have priority over mortgages. So I assume that even if that
provision passes into law, you will continue with your December
2017 decision that the FHA will not insure loans----
Secretary Carson. Absolutely.
Senator Cotton. ----that have a PACE lien on them.
Secretary Carson. Without question.
Senator Cotton. Thank you very much.
Secretary Carson. Thank you.
Chairman Crapo. Senator Donnelly.
Senator Donnelly. Thank you, Mr. Chairman.
Good morning, Secretary Carson.
Senator Donnelly. Good morning.
Senator Donnelly. When you were nominated for this
position, you committed both in my office and before this
Committee to personally visit and provide full HUD resources to
assist East Chicago, Indiana, where the lives of more than 300
families, including many children, were at risk due to
significant lead and arsenic exposure. You did as you said. You
supported HUD's continued relocation efforts for those 300
families.
You joined me in August of last year to visit East Chicago
and in September awarded $4 million to the East Chicago Housing
Authority for the safety, security, and demolition of the
contaminated complex.
We are grateful for your attention, and we are grateful for
the commitments to the residents of East Chicago.
Secretary Carson. Thank you.
Senator Donnelly. Can I have your commitment that HUD will
continue to partner with East Chicago as demolition of the
housing complex is actually set to begin this month, followed
by a lengthy environmental cleanup and redevelopment effort,
that you will continue to be our partner in this effort?
Secretary Carson. We will not only continue to be your
partner with that, but this is an area, particularly
Superfunds, and the lead that we are concerned about across the
Nation, putting a great deal of emphasis on because it has huge
implications down the road in terms of the health of those,
particularly children, who are affected and also the cost of
dealing with the problems that they develop.
Senator Donnelly. Last week, the Senate passed S.2155, a
package crafted by Members of this Committee, including myself.
Section 312 requires HUD to report to Congress on its policies
and enforcement related to lead-based paint hazard prevention
and abatement.
The report also requires HUD to offer recommendations and
best practices for itself, for public housing agencies, and
landlords to ensure our housing policies fully protect the
health and safety of children.
This legislation is at the House now, but are you willing
to direct HUD staff to begin this review immediately and
instruct them to complete the report as soon as possible?
Secretary Carson. Yes, absolutely. And I appreciate your
leadership in this area.
Senator Donnelly. It is imperative that HUD updates its
lead-based paint policies, particularly in housing with young
children. We can never allow there to be another East Chicago
situation. The report we discussed a minute ago is intended to
require HUD to take a holistic look at your policies. It is not
intended to delay ongoing efforts in Congress to enact the
Lead-Safe Housing for Kids Act, to require additional lead-
based paint testing and risk assessments in federally
subsidized households with young children.
Senators Scott and Menendez on this Committee are also
cosponsors of this bipartisan bill.
As a medical doctor, do you believe visual assessments
alone are sufficient to identify the presence of lead-based
paint hazards to ensure the environmental safety and health of
our children?
Secretary Carson. I think there is a lot to be said by
visual inspections, but no, I do not think that is adequate.
And we are continuing to look at other things.
There is a multi-agency task force to look at environmental
problems, such as lead, and we have talked about that.
I actually would love to see universal screening for this.
Just make it part of the panel that we look at because
sometimes we think that this only affects people in a certain
area, but it affects people everywhere, everywhere there is
older housing, even in some of the most luxurious places in our
country. And the impact on those brains is going to be
significant.
So I again want to thank you for leading out on this.
Senator Donnelly. Thank you.
One more question. As you know, 80 percent of global RV
manufacturing occurs in my State, especially in the area of
Elkhart County, just down the road from where I happen to live.
As we have discussed many times, RVs are specifically
exempted from HUD's manufactured housing regulations. However,
due to technological industry advancements, the RV exemption
that was written by HUD in the 1980s is outdated and in
desperate need of update.
Later today, Secretary, you will receive a letter from me
and several other Senators urging HUD to finalize its proposed
rule from 2016 to properly exempt RVs from manufactured housing
regulations. When can we expect HUD to finally complete this
rulemaking?
Secretary Carson. As I mentioned earlier, probably before
you came in, we are conducting a top-to-bottom review of all
the regulations associated with manufactured housing. That will
include the regulations, putting RVs under the HUD's
jurisdiction.
Senator Donnelly. Thank you, Mr. Secretary, and thanks for
your work.
Secretary Carson. Thank you.
Senator Donnelly. Mr. Chairman.
Chairman Crapo. Thank you.
Senator Kennedy.
Senator Kennedy. Thank you, Mr. Chairman.
Mr. Secretary, how are you?
Secretary Carson. Doing well. Good to see you.
Senator Kennedy. Please give my best to your better half.
Secretary Carson. I will.
Senator Kennedy. I want to talk about two subjects. First,
of the flooding in Louisiana, you were very generous with your
time, you and Mrs. Carson. You came down and toured Louisiana.
Our flooding took place in the spring of 2016 in North
Louisiana, some in South Louisiana, and then in South Louisiana
in August of 2016, so let us call it 2 years ago.
The American taxpayer has generally given Louisiana $1.3
billion to help us recover. That the good news.
The Governor in my State appointed a committee to disburse
the money. We have had the money a long time. Thank you very
much. The Governor's committee has disbursed a grant total of
61 million bucks out of $1.3 billion to taxpayers.
Now, everybody else has got paid, including but not limited
to the contractors. But our taxpayers are not getting very
much, and I wish I could tell you it is going to get better.
They have set up a bureaucracy down there to rival anything we
have got in Washington, DC.
Here is my question. We are probably going to be getting
more money--thank you once again, American taxpayer--in CDBG
funds, about $800 million. You are in charge of that.
Secretary Carson. Right.
Senator Kennedy. I know you respect taxpayer money, unlike
some.
Would you ask your folks, please, to try to help us ensure
that that money is going to be spent on people----
Secretary Carson. Right.
Senator Kennedy. ----and not on consultants, not on
contractors, not on people's friends, but to the people who
flooded? Just a thought.
Secretary Carson. Absolutely.
Senator Kennedy. And please insist on that with this $800
million because the Governor keeps asking me and Senator
Cassidy, ``Give us more money. Get us some more money.'' And my
response has always been, ``John Bel, you know, the first
question I always get is `Well, how much of it have you spent
that we already gave you?' ''----
Secretary Carson. Right.
Senator Kennedy. ----``and I have to tell the truth.''
Secretary Carson. Well, you will be pleased to know that
with the advent of our CFO, one of the very first things that
we have begun to look at is the grant process, how the grants
are given, what the metrics and requirements are, particularly
in terms of dissemination, spending of the money. And it is
particularly for the reason that you just mentioned. So that is
something that you will be seeing the results of quite quickly.
Also, with disaster funding in general, we have cut a large
number of regulations in order to get money into people's hands
much faster, working with FEMA, working with SBA, working with
local State governments and officials. That is one of our prime
goals, and I think with the disasters that occurred last year,
we have already seen a vast improvement. And we are going to
continue to work on that to improve that.
Senator Kennedy. Well, I have Governor Edwards to get rid
of his committee and just take control of this thing himself
and put a select group of people in charge and call them in and
say, ``Start distributing this money to the real people who
were hurt.''
Secretary Carson. Right.
Senator Kennedy. And I have been in Government long enough
to know that if he brings in four or five of them, at least one
of them is going to say, ``Oh, Governor, it is really
complicated, and I need more money for administration.'' That
is the one you fire.
Secretary Carson. Right.
Senator Kennedy. And then the other four kind of realize
you are serious, and if you could help us on this CDBG money to
make sure that they have a plan to spend it, that the money is
going to actually be spent on people and not the consultants,
so we can try to help these poor folks.
Secretary Carson. Yeah. You and I are completely aligned on
that. We will be working very hard with you on that.
Senator Kennedy. Well, and thank you for your leadership.
Do not let them get you down.
Secretary Carson. They will try, but they will not. They
just encourage me.
Senator Kennedy. I understand.
Thank you, Mr. Chairman.
Chairman Crapo. Thank you, Senator Kennedy.
And Senator Brown has asked for another round for some more
personal--I mean another round for him to ask some more
questions.
[Laughter.]
Senator Brown. I am not sure who this ``they'' is that are
trying to keep him down.
But, Mr. Secretary, I thank you again for being here, and
I--yesterday--was with Secretary Shulkin in the Veterans
Committee, and I appreciate the efforts on HUD-VASH. I
appreciate the efforts on eliminating veterans homelessness
that began several years ago that, as you said, has made
progress.
I do not understand, though, when we know HUD-VASH works,
and we know we put more money in HUD-VASH, that Secretary
Shulkin had--I could not tell for sure--either not had
conversations with you or not been encouraged by you to
increase the budget nor you to him.
Secretary Carson. We had multiple conversations.
Senator Brown. Good. But why then is the HUD-VASH vouchers
not increasing when we know they work?
Secretary Carson. Again, it is because we base our requests
on what the requests are, what people need, and we have
adequate number of vouchers and an adequate number of vouchers
that can be reissued.
The biggest problem is that we do not have the authority to
move the vouchers from a place where there is access to a place
where they are needed. This is what we really need. We do not
need to just throw more money.
Senator Brown. Well, if that is the case, we will work with
you. I never heard that, but if that is the case, we will work
with you----
Secretary Carson. That is the case.
Senator Brown. ----on making that happen.
A couple of question. You say you want to promote self-
sufficiency by increasing the number of people who leave the
program with positive outcomes, an admirable approach. What do
you consider a positive outcome?
Secretary Carson. I consider a positive outcome not
requiring Government assistance.
Senator Brown. And that is how you measure the outcome for
families?
Secretary Carson. I would consider that a positive outcome.
Senator Brown. Do you measure negative outcomes too?
Secretary Carson. What do you mean by that?
Senator Brown. Well, do you measure an outcome that is not
positive? If you do not consider it positive, do you provide
measures for when they are not?
Secretary Carson. Well, yeah. In measuring the positive
outcomes, you automatically measure the negative outcomes.
Senator Brown. Well, do you break that down on how many
people will lose housing under your proposal for rent reforms?
Secretary Carson. Under our proposals, we do not anticipate
anybody losing houses, housing.
Senator Brown. So you increase $1,800 a year requirement
for housing; you do not think you will lose people who are
making 3- or $4,000 a year?
Secretary Carson. We do not because----
Senator Brown. Where is that money coming?
Secretary Carson. Because one of the other things we are
doing is instead of requiring an annual assessment of their
income, it is going to be moved to every 3 years because, in
the past, people hit that ceiling. They say, ``I do not want to
make any more money because it is going to cost my rent to go
up.'' That does not happen now, and that means that they are
more likely to get into a position where they are making more
money and where they are more likely to be able to get out of
the housing.
Senator Brown. Well, that is magical Presidential candidate
thinking. I just do not--somebody is making 3- or $4,000 a
year. They do not want to make more because their housing would
cost more, and I----
Secretary Carson. Well, 3- or $4,000, that is not the right
number by the----
Senator Brown. Well, you said 9,000. The number that was
leaked seemed closer to 3, but I will give you the 9. I just
cannot imagine in these calculations when people pay half their
rent, half their income in housing, that they are making that
calculation that way, and you base your numbers that way.
Secretary Carson. Well, you probably also know that that is
not the complete number. You probably know that.
Senator Brown. Well, it is a big part of the number.
Let me shift some here. You indicated to Senator Jones, the
reason for the poor repair of public housing is a lack of local
interest. So should local government maintain these Federal
assets? Is that what you are saying?
Secretary Carson. When I talk about local interest, I am
talking about private sector.
Senator Brown. So these people that are living----
Secretary Carson. Of course, the local government should be
involved as well, but the private sector----
Senator Brown. But these people that are living there just
are not keeping up their homes well enough. Do these very, very
low-income people who have money, often not enough money to
paint, not enough money to fix much of anything--it is kind of
blaming them, right?
Secretary Carson. No, not at all. Traditionally----
Senator Brown. Well, what is it? If they are not--who is
not keeping it up, then?
Secretary Carson. Traditionally, if you know much about
real estate, you know that whether it is a Government property
or not, when people are there who are renters and do not have
any particular dog in the fight that places tend to
deteriorate. You know that, don't you?
Senator Brown. They do not have a dog in the fight. They
also do not have money much to keep it up. I understand the law
of the commons and all that, but should not the Federal
Government be more of a partner? You mean, you are cutting the
budget to renovate, to keep up, to repair these homes. Is not
the real problem a lack of Federal support for these homes?
Secretary Carson. Well, in terms of capital funds, for
decades now, we have been putting billions of dollars into the
capital funds, and what has happened?
Senator Brown. So let us just pull out money. You have
acknowledged that HUD-VASH works better because we actually
fund it. You have acknowledged that more money means when--in
the response to the budget, I believe from Senator Van Hollen,
that there is more money in the budget. Well, you said, ``I
will be able to do more good things with that money,'' but you
are advocating a smaller budget when your assessment----
Secretary Carson. Well, I think you are a good man, and I
think you are going to understand what I am about to say. OK.
We have been putting a lot of money into these capital funds to
maintain these buildings, and the number that we need to
maintain it keeps going up. Therefore, what we need to do is
look for a different way. We need to look for a better way to
maintain and to redevelop these things.
Senator Brown. Well, perhaps, Mr. Secretary, but when a
better way is when one in four people renting in this country
spend more than half their--spend at least half their income on
housing, when one in four residents, homeowners and renters in
Cleveland, Ohio, not Cleveland, the county of Cuyahoga, which
has a lot of wealth too, a lot of middle-class people, a lot of
working families, a lot of everything, one out of four of those
people, of those residents--I am one of them--one out of four
of them spend more than half their--at least half their income.
How can you say that withdrawing--cutting the budget 14 percent
is going to make this a better situation when the Government
only--when vouchers and housing assistance is only about one-
fourth for those families?
Secretary Carson. Well, it probably would have been even
more than 14 percent if I had not made multiple trips to talk
to people.
We have to recognize that we are in a difficult situation.
I would love to work with you.
Senator Brown. With the Federal budget.
Secretary Carson. I have already been working with some of
the housing advocates. We are trying to find solutions. I do
not think----
Senator Brown. The difficult situation meaning the budget
deficit, is that what you mean?
Secretary Carson. Yeah.
Senator Brown. And did you speak up about this last year
when we blew a hole in----
Secretary Carson. I constantly speak up about it.
Senator Brown. Well, you spoke up about the budget deficit?
Secretary Carson. Yes, I did.
Senator Brown. Did you ask any members of the House or
Senate to vote no on the blow-a-hole-in-the-budget tax bill?
Secretary Carson. Not on this tax bill. I have not talked
to them, but it is----
Senator Brown. Well, that is the most recent one that blew
a huge hole in the Federal budget, and then now we are coming--
we have got to make up for it and----
Secretary Carson. Well, I hope you will join me in talking
to everybody you can about it because we are talking about the
future of our country. We are talking about our children and
our grandchildren.
Senator Brown. As we were last--as we were last fall when
we gave huge tax cuts to people like you and the Cabinet
member, the wealthiest 1 percent.
Secretary Carson. I did not get a tax cut.
Senator Brown. Well, you will----
Secretary Carson. No.
Senator Brown. ----under this.
Secretary Carson. I did not. I will not.
Senator Brown. Well, maybe----
Secretary Carson. My taxes are going up.
Senator Brown. We will see.
Secretary Carson. There is no question about it.
Senator Brown. I do not know about your taxes.
Secretary Carson. Big time.
Senator Brown. I will say it more precisely. Many in the
President's Cabinet, because the 1 percent--and lots of them
are well represented in the Cabinet--1 percent did really,
really well under this tax bill. You know that. That is fact,
and we have a hole in the budget. And Speaker Ryan says we have
got to go after Medicare. We have got to go after Medicaid. Why
is it the wealthy do better and better, but those who are
struggling, we take it out on them? We put the burdens on their
backs? And you are part of that, Mr. Secretary.
Secretary Carson. Well, is it a problem that more companies
are returning to our shores----
Senator Brown. Well, we will see.
Secretary Carson. ----from overseas?
Senator Brown. We will see how many do that.
Secretary Carson. Is it a problem that people are getting
bonuses that are helping them?
Senator Brown. I can answer. I can answer.
Secretary Carson. Is it a problem that a child----
Senator Brown. You asked it. I am sorry.
Mr. Secretary, I will take the--I can anecdote you with--I
can anecdote back to you on stories as well.
Secretary Carson. Those are not anecdotes. Those are facts.
Senator Brown. Well, so yes. So is an engineering that came
up to me that said his company, because of the tax bill, is
going to move engineers, going to move dozens of engineers from
Ohio to----
Secretary Carson. But the point is we do not need to fight
about this.
Senator Brown. Because of the tax bill.
Secretary Carson. We do not need to fight about that.
Senator Brown. We do not need to fight about it, but if you
are going to talk about the budget deficit and build your
budget on that and your reason for cutting spending on a whole
lot of low-income people, do not blame it on the Federal budget
when the Federal budget got worse because of what you--your
President--our President and your Cabinet was advocating in
this Congress.
Chairman Crapo. We are going to leave the debate over the
tax bill at that.
Senator Brown. Thank you, Mr. Chairman.
Thank you, Mr. Secretary.
Chairman Crapo. Senator Kennedy has asked for the last
word. I would ask him to please keep it brief.
Senator Kennedy. I will follow the Sherrod's lead there.
[Laughter.]
Senator Kennedy. Look, Senator Brown, as usual, made some
very salient points, but I want to--I want to thank you for
trying to help Americans know the dignity of being self-
sufficient.
Secretary Carson. Thank you.
Senator Kennedy. I do not think the American people get
enough credit, Mr. Secretary. We spend about a trillion dollars
a year, State and local social programs, and in our country, if
you are hungry, we feed you. If you are homeless, we house you.
If you are too poor to be sick, we pay for your doctor. A lot
of other countries would just let you die.
Secretary Carson. Right.
Senator Kennedy. But the problem is that so many of our
programs to help people have become parking lots, when they are
supposed to be bridges.
Secretary Carson. Mm-hmm.
Senator Kennedy. And it seems to me that we have become a
Government that automatically sees folks as victims, which can
breed dependency as opposed to potential workers.
Secretary Carson. Right.
Senator Kennedy. And I would strongly--I thank you for and
I strongly encourage you to continue the effort. So if somebody
needs a place to live, we ought to provide it, but if they are
between the ages of 18 and 65 and they are not disabled, then
we need to ask them to work 20 hours a week or go back to
school 20 hours a week or do community service 20 hours a week,
and I am not talking about a mother with a sick baby in her
arms. I am not talking about asking grandpa to leave the
nursing home.
And you have done a lot toward that, and I know a lot of
people say it makes you cold and heartless. And they say that--
my implication about the American people. We are spending a
trillion dollars, and I do not know. I just--I try to be a good
Methodist. I believe in free will, and I do not think our
people who need a hand up or want to stay there.
Secretary Carson. Right.
Senator Kennedy. And you have worked at that, and I know
some people have bashed you. And I just wanted to thank you for
it.
Secretary Carson. Well, thank you. I appreciate that, and,
you know, in the sermon of the Mount, Jesus said, ``Do not
worry about it when people say all kind of horrible things
about you. Just do the right thing.''
And that is what is driving us right now. I have been
blessed with a tremendous team, just wonderful people, and we
are going to get people out of poverty. And it is going to
change the paradigm in this country.
Senator Kennedy. I mean, to sum it up, I do not want to
take food stamps or affordable housing away from people in
need.
Secretary Carson. Sure.
Senator Kennedy. But I do want fewer people to need food
stamps and affordable housing, and I do not know a single
person--maybe there are some, but I do not know a single--and I
know a number. I do not know a single person who is dependent
on Government who really wants to be.
Secretary Carson. Right.
Senator Kennedy. And I am not talking about just, ``OK. Go
get a job.'' There are programs that have been set up--Kentucky
has a great one--where we will help you get a job. This
economy, thanks to those tax cuts, is doing great.
But, anyway, I am still doing 5 minutes better than Senator
Brown.
[Laughter.]
Senator Kennedy. I am going to wrap it up here.
Secretary Carson. Well, thank you, Senator.
And I just want to say that we the Government, maybe not
the current Government, but collectively, we are the ones who
created the situation of dependency, and I think we have a
responsibility to fix it.
Senator Kennedy. Thank you, sir.
Chairman Crapo. All right. With that, the hearing will
conclude. That concludes the questioning, and I want to once
again thank you, Secretary Carson for coming and reporting to
us and being here with us this morning.
Secretary Carson. Thank you.
Chairman Crapo. For Senators who wish to submit questions
for the record, those questions are due next Thursday, March
29th.
And, Mr. Secretary, I would ask that you respond to any
questions as soon as you possibly can.
Secretary Carson. Thank you.
Chairman Crapo. With that, this hearing is adjourned.
[Whereupon, at 11:51 a.m., the hearing was adjourned.]
[Prepared statements, responses to written questions, and
additional material supplied for the record follow:]
PREPARED STATEMENT OF CHAIRMAN MIKE CRAPO
Today, the Committee will receive testimony from Dr. Ben Carson,
the 17th Secretary of Housing and Urban Development.
Welcome back, Mr. Secretary.
Over the past year, Secretary Carson has made significant strides
in his efforts to make HUD programs more effective and efficient.
He has embarked upon a multi-month listening tour, traveling across
the country to develop a deeper understanding of the effect that HUD
policies have on affordable housing practitioners and families who are
the most vulnerable.
Not long after returning from the tour, Secretary Carson took on a
major leadership role in coordinating hurricane relief efforts in
Texas, Florida, Puerto Rico, and the U.S. Virgin Islands, providing
both immediate and long-term relief to thousands of families who have
been displaced from their homes and are without electricity. That work
continues.
As a nominee just over a year ago, Secretary Carson testified
before this Committee about the importance of revisiting our Nation's
housing programs to ensure that families who are struggling in America
have the best opportunity to climb the economic and social ladder, to
break intergenerational cycles of poverty, and to become self-
sufficient.
Secretary Carson has also stressed the importance of aligning
regulatory requirements in ways that: incentivize landlord
participation in HUD programs; eliminate undue burden on program
participants; enhance workforce mobility; and maximize the percentage
of HUD dollars that go straight to the families that need it.
I could not agree more with these goals, and I thank Secretary
Carson and his team for working with this Committee to achieve these
objectives.
Last week, by voting 67-31 to pass the Economic Growth, Regulatory
Relief, and Consumer Protection Act, the Senate took a decisive step
forward in addressing these same issues.
A lot of the debate on the floor last week highlighted how the
legislation right-sizes regulations for community banks and credit
unions to promote economic development and lending.
But the bill also makes important improvements to housing programs.
It provides critical regulatory relief to over one thousand small,
rural public housing agencies, making it easier for them to develop new
projects and coordinate with their neighbors, and it ensures that more
of their budgets go straight to families, rather than legal paperwork.
The bill makes it less expensive for nonprofits like Habitat for
Humanity to build homes in underserved communities.
It makes a greater number of families eligible for HUD's Family
Self-Sufficiency Program, and enhances the program so that it can offer
new, additional services to participants.
It permits renters to stay in their homes for at least 90 days
after their home is foreclosed upon, and it permanently extends the
amount of time a servicemember may stay in his or her home after
returning from military service to 1 year before the home may be
foreclosed upon.
We hope this bill will be signed into law as soon as possible.
Today, I look forward to hearing about more opportunities for us to
keep moving forward, working together to modernize and improve our
housing programs.
______
PREPARED STATEMENT OF SENATOR SHERROD BROWN
Thank you Chairman Crapo and welcome, Secretary Carson.
The Department of Housing and Urban Development, or HUD, plays a
critical role in the success of our housing market, our communities,
our families, and our goals as a Nation.
So it is extremely disturbing to read about one controversy after
another at the Department--ethics lawyers ignored, procurement
guidelines scoffed at, whistleblowers facing retaliation,
antidiscrimination efforts downgraded, key positions filled based on
patronage rather than competence--it goes on and on.
And instead of taking responsibility, Mr. Secretary, you seem to
want to blame others--your wife picked out the furniture without
knowing the price, your spokesman said something but not you, you
shouldn't be blamed for not listening to your ethics lawyers, the press
is unfair--it goes on and on.
I think you need to take responsibility and get things right. HUD's
mission is too important to do otherwise.
And getting things right means fighting for the funding needed to
help more people in this country get a roof over their head.
Despite the importance of affordable housing, it is increasingly
out of reach. A quarter of all renters today are paying over half their
incomes for housing, including 400,000 households in Ohio alone.
Homelessness increased last year--in the eighth year of an economic
expansion.
Earlier this week, one of our great Ohio housing advocates
described the affordable housing crisis as an ``all hands on deck''
situation.
But HUD wants to go AWOL instead. Rather than making new
investments in affordable housing and our communities, the budget
proposal would add to the ranks of the homeless.
Three months ago, the Administration was entirely unconcerned about
the deficit when it chose to add more than a trillion dollars to the
national debt over the next decade.
All of the sudden, Secretary Carson and his colleagues have
rediscovered their grave concerns about the deficit, such that they
want to charge extremely poor people significantly higher rents.
This is outrageous. The top 1 percent of the country will
eventually see 83 percent of the benefits of the trillion tax cut.
But to reduce the deficit that this tax cut for millionaires and
corporations will create, HUD is proposing that some of the poorest
households in the country must pay an increase of as much as $1,800 a
year in rent. All told, HUD wants to charge an estimated $2 billion in
higher rents to low-income families through rent ``reforms.''
The Administration claims its cuts will ``recognize a greater role
for State and local governments and the private sector.'' Federal
assistance reaches only 1 out of every 4 eligible families. State and
local governments are already strapped for cash. We know they do not
have the capacity to take on those evicted by Federal cuts without
raising taxes on working families.
Last year, Secretary Carson reassured the public that HUD's budget
cuts would be offset in the Administration's infrastructure package.
But the Administration's proposal did not include funding for housing
and community development, despite the Secretary's assurances that
``housing is part of the infrastructure of this country, and it will be
treated as such.''
There is no funding for capital spending for public housing,
despite a backlog of needed repairs of tens of billions of dollars.
Under your leadership, Secretary Carson, HUD has decided a wobbly
chair in a private D.C. dining room requires the urgent attention of no
fewer than 16 staffers and thousands of taxpayer dollars.
Unsafe and unsanitary conditions in public housing that put working
families and children at risk?
Not our problem, you say--let them use vouchers.
But there is a problem--you're already underfunding the Section 8
accounts. You can't say everybody in public housing must shift to
Section 8 and not provide the money for it to happen.
This budget is an embarrassment, but it and the news out of the
Department of late seem all too common in this Administration.
Thank you, Mr. Chairman
______
PREPARED STATEMENT OF BENJAMIN S. CARSON
Secretary, Department of Housing and Urban Development
March 22, 2018
Introduction
Chairman Crapo, Ranking Member Brown, and Members of this
Committee, thank you for inviting me here today to discuss the work we
do at the Department of Housing and Urban Development (HUD), and my
plans for fulfilling our mission with fidelity to our Congressional
mandate and the best interests of the American people.
I also want to thank the Members of this Committee for your support
as HUD and other Federal agencies continue to work to ensure full
recovery of the States and territories impacted by last year's natural
disasters.
Accepting Our Challenge
The President's Fiscal Year 2019 Budget request lays out a vision
for a Federal Government that is efficient, effective, accountable, and
provides for a strong national defense and economy.
It also reflects the fact that we must better serve the American
people by tackling our staggering $20.6 trillion national debt. This
requires tough budgetary choices. Our children's and grandchildren's
futures depend on it.
At HUD, we believe the requested level of funding--$41.244
billion--is sufficient to effectively administer our core programs,
particularly as we are committed to running our programs more
efficiently, spending every tax dollar with which we are entrusted
wisely. I have directed HUD's new Chief Financial Officer, Irv Dennis,
a Certified Public Accountant with more than 36 years of experience, to
put the controls, systems, and processes in place to ensure we do just
that.
Even within this context of fiscal restraint, it is important to
note this year's Budget request represents a 1.4 percent increase over
last year's request.
Budget Highlights
The Budget proposal ensures that HUD continues to serve the most
vulnerable in our society--half of HUD-assisted households are elderly
or living with disabilities. Our budget anticipates the adoption of
forthcoming proposed legislative reforms and will not increase rent
payments for currently served elderly or disabled households. In
addition, the funding level for the Housing Voucher program would
support the same number of households as currently assisted and should
not result in the termination of any housing vouchers.
HUD's Budget also makes a significant investment in the fight
against homelessness. The Department's Point-in-Time count, conducted
in January 2017, indicated homelessness was on the rise for the first
time in a decade, primarily driven by high-cost housing markets along
the east and west coasts. Our Budget proposes spending $2.383 billion,
a $133 million increase over last year's request, and includes $40
million for rapid re-housing targeted to communities with high rates of
unsheltered homelessness.
Additionally, as a neurosurgeon, I am all too familiar with the
effects of lead exposure on the developing brain. As a result, we are
requesting $145 million to ensure that homes are free of lead-based
paint hazards and other dangerous contaminants, especially for families
with small children. This is an 11.5 percent increase over last year's
request.
Refocusing Our Efforts
The centerpiece of this year's Budget proposal is our promotion of
economic opportunity and self-sufficiency.
For too many years, we have measured the effectiveness of housing
and other antipoverty programs by the number of Americans participating
in them. With this Budget, we propose measuring success by the number
of people we help to exit the programs with positive outcomes. To help
transition the people HUD serves towards economic independence, we are
requesting $75 million for the Family Self-Sufficiency program and $10
million for Jobs Plus.
We are also requesting funding to evaluate the EnVision Center
Initiative, a demonstration that will leverage public-private
partnerships to connect individuals and families living in HUD-assisted
housing with job-training, education, health and wellness, and other
streamlined services that lead to self-sufficiency.
HUD is also beginning to pivot from the current, financially
unsustainable model of public housing and will be working with Public
Housing Authorities (PHAs) to find the best way to support assisted
families through other housing platforms. It was a difficult decision
to not request funding for capital improvements in Public Housing.
Instead, we've asked for PHAs to have the flexibility to use operating
funds for capital needs. This will allow PHAs to function more like
every other multifamily building owner in America. We also believe that
encouraging States and localities to bring more resources to the table
helps ensure that PHAs are empowered to make decisions at the local
level that best address the needs of their communities.
As part of the transformation of public housing, HUD is committed
to providing new strategies and enhancing existing tools so that PHAs
are provided with additional options to operate their portfolios. For
example, HUD is developing a streamlined process to allow PHAs to
convert public housing assistance to vouchers where this would save
taxpayer money and give families more choice in deciding where to live.
HUD is proposing to convert an expanded number of units in our
Nation's housing stock to project-based Section 8 ownership via the
Rental Assistance Demonstration (RAD). RAD is a program that multiplies
the impact of private and other investment in order to rehabilitate
aging affordable housing across the country. In order to stretch those
dollars further, HUD is requesting $100 million specifically for RAD
and supports lifting the cap on RAD units so more communities can
participate. To date, PHAs and their partners have raised $5 billion to
improve and recapitalize 88,000 public housing units at revenue neutral
rent levels. This would have taken decades to accomplish through
traditional public housing funding streams.
Rent Reform
HUD spent the past year examining its main rental programs--Housing
Choice Vouchers, Project-Based Rental Assistance, Public Housing,
Section 202 Supportive Housing for the Elderly, and Section 811
Supportive Housing for Persons with Disabilities--with the goals of
improving resident outcomes, decreasing administrative burdens, and
maximizing public investment.
As a result of this work, HUD's Budget proposal is based on a
legislative package to modernize and streamline existing rental
assistance programs. Our plan will simplify program administration,
encourage work and stable family formation, increase local control and
choice, promote fiscal sustainability, and protect currently assisted
elderly and disabled households from adverse impacts.
Features of the plan include establishing mandatory minimum rents;
simplifying rent calculations; increasing tenant rent contributions
while protecting the most vulnerable current tenants, primarily the
elderly and disabled; incentivizing work by limiting income
recertification for all households to once every 3 years; providing a
hardship exemption for tenants who are unable to pay their rents; and
giving PHAs and property owners the option to choose alternative rent
structures that work best for their communities.
Federal Housing Administration
HUD is also laying a better path to home ownership through programs
at the Federal Housing Administration (FHA). Building equity in a home
remains a critical component of helping Americans climb the economic
ladder of success. But we don't do the families we serve any favors if
we facilitate lending that is unsustainable--not to mention the
taxpayers who stand behind our $1.2 trillion book of business.
That is why we have taken several steps to ensure FHA can play a
viable role in mortgage lending for years to come. One of the first
actions the Trump administration took was to pull back the prior
Administration's proposed mortgage insurance premium decrease for FHA.
Our analysis shows this was the absolute right decision: had the
premium reduction gone forward, FHA would have found itself below its
statutory 2 percent minimum capital ratio requirement.
We also acted swiftly to improve the health of the Mutual Mortgage
Insurance (MMI) Fund by placing FHA's reverse mortgage program, the
Home Equity Conversion Mortgage (HECM) program, on a more financially
sound footing for new books of business. HECM has been a drain on the
MMI Fund, depleting it of $11.7 billion since 2009. We are monitoring
this program closely to determine what additional changes are
warranted, while simultaneously expecting to face continued losses due
to older, existing loans in the portfolio.
Another change we made recently involves protecting the taxpayers
who make FHA insurance possible. A few months ago, we made ineligible
for FHA insurance properties encumbered with Property Assessed Clean
Energy (PACE) obligations. Prior to this decision, PACE obligations had
effectively been given priority lien status over FHA-insured mortgages,
which presented unacceptable risks for taxpayers.
Managing our risk also involves operating a stable technology
platform for FHA. HUD can no longer defer this important investment.
FHA is built on a mainframe that is over four decades old. Staff at our
home ownership centers still work on paper case files, which not only
presents inefficiencies, but also poses numerous issues for quality
control.
That is why HUD has proposed up to $20 million to fund targeted
improvements in single-family Information Technology (IT) and allow FHA
to better interact with a modern financial system. To offset the cost
of this critical investment, the Budget proposes a modest fee of no
more than $25 per loan that would apply on a prospective basis and
expire after 4 years. It will take the cooperation of Government and
private sector lenders to make this needed investment, but I am certain
it is one that will lead to mutually beneficial outcomes.
Another important source of affordability for millions of Americans
is manufactured housing. Today, it accounts for about 10 percent of the
market, and an even greater share for those in rural areas. As the
agency that implements the Federal laws governing the quality, safety,
and affordability of manufactured housing, HUD has a key role to play
here. We have instituted a regulatory review of all manufactured
housing rules with an aim towards reducing undue burdens on production.
We must strike the right balance between ensuring the availability of
such homes and protecting the families who will reside in them.
Disaster Recovery
It is important to note the ongoing disaster recovery efforts
underway at HUD. Since last September, Congress has appropriated $35.4
billion in long-term disaster recovery funding under the Community
Development Block Grant--Disaster Recovery (CDBG-DR) program. The
initial amount of $7.4 billion has been fully allocated and related
guidance has been issued. The Department is now working to allocate the
$28 billion contained in the Bipartisan Budget Act and will allocate at
least one-third of that amount by April 10.
HUD has also provided ongoing relief to homeowners in the
Presidentially Declared Major Disaster Areas. This includes the
recently announced ``Disaster Standalone Partial Claim'', a new option
that covers up to 12 months of missed mortgage payments through an
interest-free second loan on the mortgage, payable only when the
borrower sells the home or refinances the mortgage. In addition, the
moratorium on foreclosure actions against insured borrowers in Puerto
Rico and the Virgin Islands has been extended until May 18, 2018. Other
resources, including forbearance and loan modification options,
continue to be available as well. HUD continues to provide technical
assistance to mainland PHAs and displaced residents.
Nearly every program office at HUD has staff working on disaster
recovery, many of whom have volunteered to travel to disaster-stricken
areas and serve on the front lines. My prayers are always with those
who are still struggling to recover.
HUD has a Government-wide mission to coordinate housing recovery,
not just for HUD-assisted households, but for all Americans who are
impacted by disasters. We continue to take this obligation seriously
and are committed to supporting the communities as they rebuild.
Conclusion
HUD is committed to safe, fair, and affordable housing for the
American people. It also acts as a stepping stone to opportunity and
self-sufficiency so that families can graduate from assisted housing to
economic independence. President Trump's proposed FY2019 Budget will
enable HUD to fill this role, now and in the future, through reforming
and refocusing our programs and necessitating careful stewardship of
taxpayer dollars.
I am eager to work with Congress and all the Members of this
Committee in achieving these worthy goals to better serve our fellow
Americans.
Additional Material Supplied for the Record
LETTER TO SECRETARY BENJAMIN S. CARSON
FROM SENATOR TIM SCOTT
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
HUD TELLS STATES TO CONSIDER SEA LEVEL RISE WHEN REBUILDING FROM STORMS
Washington Times, Wednesday, February 7, 2018
By Josh Siegel
The Department of Housing and Urban Development this week put out a
notice to states receiving federal funding to help recover from last
year's three major hurricanes to ``take into account'' sea level rise
when they build new structures in flood-prone areas.
The directive appears to mostly follow requirements established in
the Obama administration requiring federally funded infrastructure
projects to account for climate change and sea level rise when building
in areas that could be vulnerable to flooding.
But six months ago, before Hurricane Harvey hit Texas, the first of
the three major storms, President Trump, who is skeptical of the
impacts of climate change, rescinded the Federal Flood Risk Management
Standard, established by former President Barack Obama in 2015.
``When President Trump rescinded Obama's executive order, we feared
all of this federal disaster aid money, of which HUD is one of of the
biggest recipients, would go toward building exactly the way things
were before the hurricanes, which would have been throwing money at bad
decisions,'' said Rob Moore, a senior policy analyst at the Natural
Resources Defense Council. ``But HUD is doing the right thing here. It
will require projects they fund to be built with this additional margin
of safety to help ensure communities are rebuilding smarter and more
resilient against future hurricanes and flood events, which is exactly
what a responsible agency should be doing.''
HUD spokesman Brian Sullivan told the Washington Examiner that the
agency, by asking states to describe how they will ``take into account
continued sea level rise,'' is continuing its long-standing policy that
dates to when Hurricane Sandy devastated much of the East Coast in
2012.
Sullivan said the agency is not deliberately contradicting Trump's
elimination of the Obama-era building standard.
``This is an expression of what we have baked into disaster
recovery rules since Sandy, when we have asked grantees to consider
future flood risk and other natural hazards in the development of their
building plans,'' Sullivan said. ``It does not signal a departure from
really anything.''
The HUD notice to states, which became effective Tuesday, told them
how to spend the $7.4 billion in disaster recovery money Congress
approved after Hurricane Harvey.
Sullivan said $5 billion of that funding went to Texas.
HUD distributed another $1.5 billion to Puerto Rico and $243
million to the U.S. Virgin Islands, which were hit by both Hurricanes
Irma and Maria. The last $616 million goes to Florida for recovery from
Irma.
The notice says states must provide HUD with an explanation for how
their rebuilding plans will ``promote sound, sustainable long-term
recovery planning informed by a post-disaster evaluation of hazard
risk, especially construction standards and land-use decisions that
reflect responsible floodplain and wetland management and take into
account continued sea level rise, if applicable.''
It also says that all residential structures built with federal
funding in the 100-year flood plain, meaning there's a 1 percent chance
of a flood event in that area in a given year, must be elevated at
least two feet above the level at which flood water would be
anticipated to rise.
The White House did not respond to questions from the Washington
Examiner asking if it approved or knew about the language HUD used in
Tuesday's directive.
But in September, in the weeks after Hurricane Harvey, White House
homeland security adviser Tom Bossert indicated the Trump
administration, after responding to the storm and realizing the major
costs required to rebuild, was considering replacing Obama's 2015
standard with a new one that imposes similar requirements.
``At the time we rescinded [the 2015 standard], we did so in the
hope of expediting infrastructure development in this country, which I
think was a smart move, and the president did as well,'' Bossert said
at a Sept. 8 White House press briefing. ``But now we have to replace
it with thoughtful building standards and practices for the expenditure
of federal money that makes floodplain and risk mitigation sense. We
need to build back smarter and stronger.''
Experts say HUD, by asking states to consider sea-level rise when
rebuilding, is doing the right thing, even if it's not clear how or if
the directive reflects or contradicts Trump administration policy.
``The Obama policy was a smart, common-sense fiscal conservatism,''
said Eli Lehrer, president of the R Street Institute, a free-market
think tank in Washington. ``The Trump administration made a mistake
when they did away with it, but HUD is doing the absolute right thing
by bringing it back in this context.''