[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]
DEPARTMENTS OF TRANSPORTATION, AND HOUSING AND URBAN DEVELOPMENT, AND
RELATED AGENCIES APPROPRIATIONS FOR 2020
_______________________________________________________________________
HEARINGS
BEFORE A
SUBCOMMITTEE OF THE
COMMITTEE ON APPROPRIATIONS
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTEENTH CONGRESS
FIRST SESSION
___________________________________
SUBCOMMITTEE ON THE DEPARTMENTS OF TRANSPORTATION, AND HOUSING AND
URBAN DEVELOPMENT, AND RELATED AGENCIES
DAVID E. PRICE, North Carolina, Chairman
MIKE QUIGLEY, Illinois MARIO DIAZ-BALART, Florida
KATHERINE M. CLARK, Massachusetts STEVE WOMACK, Arkansas
BONNIE WATSON COLEMAN, New Jersey JOHN H. RUTHERFORD, Florida
BRENDA L. LAWRENCE, Michigan WILL HURD, Texas
NORMA J. TORRES, California
PETE AGUILAR, California
NOTE: Under committee rules, Mrs. Lowey, as chairwoman of the full
committee, and Ms. Granger, as ranking minority member of the full
committee, are authorized to sit as members of all subcommittees.
Joseph Carlile, Winnie Chang, Josephine Eckert, Angela Ohm,
Sarah Puro, Rebecca Salay, and Gladys Barcena
Subcommittee Staff
___________________________________
PART 5
Page
HUD's Management of Housing Contracts During the Shutdown.......... 1
Stakeholder Perspectives: Fair Housing.............................77
Stakeholder Perspectives: Affordalble Housing Production.......... 99
Stakeholder Perspectives: Passenger Rail Development............. 129
Stakeholder Perspectives: Building Resilient Communities......... 159
Member's Day......................................................189
Department of Housing and Urban Development.......................209
Department of Transportation......................................249
___________________________________
Printed for the use of the Committee on Appropriations
U.S. GOVERNMENT PUBLISHING OFFICE
37-628 WASHINGTON : 2019
COMMITTEE ON APPROPRIATIONS
NITA M. LOWEY, New York, Chairwoman
MARCY KAPTUR, Ohio KAY GRANGER, Texas
PETER J. VISCLOSKY, Indiana HAROLD ROGERS, Kentucky
JOSE� E. SERRANO, New York ROBERT B. ADERHOLT, Alabama
ROSA L. DELAURO, Connecticut MICHAEL K. SIMPSON, Idaho
DAVID E. PRICE, North Carolina JOHN R. CARTER, Texas
LUCILLE ROYBAL-ALLARD, California KEN CALVERT, California
SANFORD D. BISHOP, JR., Georgia TOM COLE, Oklahoma
BARBARA LEE, California MARIO DIAZ-BALART, Florida
BETTY MCCOLLUM, Minnesota TOM GRAVES, Georgia
TIM RYAN, Ohio STEVE WOMACK, Arkansas
C. A. DUTCH RUPPERSBERGER, Maryland JEFF FORTENBERRY, Nebraska
DEBBIE WASSERMAN SCHULTZ, Florida CHUCK FLEISCHMANN, Tennessee
HENRY CUELLAR, Texas JAIME HERRERA BEUTLER, Washington
CHELLIE PINGREE, Maine DAVID P. JOYCE, Ohio
MIKE QUIGLEY, Illinois ANDY HARRIS, Maryland
DEREK KILMER, Washington MARTHA ROBY, Alabama
MATT CARTWRIGHT, Pennsylvania MARK E. AMODEI, Nevada
GRACE MENG, New York CHRIS STEWART, Utah
MARK POCAN, Wisconsin STEVEN M. PALAZZO, Mississippi
KATHERINE M. CLARK, Massachusetts DAN NEWHOUSE, Washington
PETE AGUILAR, California JOHN R. MOOLENAAR, Michigan
LOIS FRANKEL, Florida JOHN H. RUTHERFORD, Florida
CHERI BUSTOS, Illinois WILL HURD, Texas
BONNIE WATSON COLEMAN, New Jersey
BRENDA L. LAWRENCE, Michigan
NORMA J. TORRES, California
CHARLIE CRIST, Florida
ANN KIRKPATRICK, Arizona
ED CASE, Hawaii
SHALANDA YOUNG, Clerk and Staff Director
(II)
DEPARTMENT OF TRANSPORTATION, HUD, AND RELATED AGENCIES APPROPRIATIONS
FOR 2020
----------
Tuesday, February 12, 2019.
OVERSIGHT HEARING: THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENTS
MANAGEMENT OF HOUSING CONTRACTS DURING THE SHUTDOWN
WITNESSES
IRV DENNIS, CHIEF FINANCIAL OFFICER, U.S. DEPARTMENT OF HOUSING AND
URBAN DEVELOPMENT
BRIAN MONTGOMERY, ACTING DEPUTY SECRETARY, FHA COMMISSIONER AND
ASSISTANT SECRETARY FOR HOUSING, U.S. DEPARTMENT OF HOUSING AND
URBAN DEVELOPMENT
Mr. Price. The subcommittee will come to order.
Welcome to the first Transportation, Housing and Urban
Development hearing of 2019.
Today we will be conducting oversight of HUD's management
during the recent government shutdown, with a focus on nearly
1,200 expired housing contracts that put tens of thousands of
tenants at risk.
I am pleased to have Brian Montgomery, the Acting Deputy
Secretary of HUD, and Irv Dennis, the Department's Chief
Financial Officer, here to testify this afternoon.
Thank you for being here. We look forward to your
testimony.
Before I make a brief opening statement about the subject
matter of the hearing, I do want to say how pleased I am that
Mr. Diaz-Balart and I will again be working as partners in
running this subcommittee, more or less, doing the best we can
in a cooperative fashion. And that was the way it was when Mr.
Diaz-Balart was chairman, and I certainly intend to operate in
the same way. We plan to be collegial and cooperative, to work
through our differences, and to produce a good fiscal 2020 HUD
bill that will garner strong bipartisan support.
I also want to introduce the new subcommittee members on
the Democratic side of the dais: Representative Bonnie Watson
Coleman of New Jersey; Representative Norma Torres of
California; and still to come, Representative Brenda Lawrence
of Michigan. These are great new members. They are going to
bring valuable perspectives to the subcommittee, and we are
excited to have them join our returning members on Team T-HUD,
we will call it.
Now let's return to the business before us this afternoon.
The recent presidentially induced government shutdown,
which lasted 35 days, was one of the worst blunders in American
political history. Probably wouldn't get much disagreement on
that. It was self-inflicted, damaging, and counterproductive. I
don't believe anybody in this room wanted it. Unfortunately,
the President did, and it took more than a month before he even
allowed even a temporary solution to be put in place.
Unfortunately, HUD was a major casualty of the President's
recklessness. Shutdowns hinder or halt essential government
functions, and agencies like HUD are left with a skeleton staff
to cope with the fallout. And every indication is that this
time the damage was especially severe.
Serious questions have emerged about the Department's
management of the lapse of appropriations, including the degree
to which the shutdown was anticipated and whether adequate
preparations were made in the weeks that preceded it.
Many housing contracts were allowed to expire, putting tens
of thousands of tenants at risk, in the Project-Based Rental
Assistance Program and the 202 and 811 housing programs for the
elderly and disabled respectively.
Approximately 650 of these contracts expired in December,
many of them before the lapse in appropriations occurred. The
shutdown then greatly complicated the task of curtailing the
damage. That is unacceptable. The Department should have seen
this coming, but senior leadership failed to take necessary
action.
HUD's options were further limited by the fact that the
Department had imprudently spent approximately $400 million in
advance appropriations at the beginning of the fiscal year.
Now, this money is flexible. It is designed to accommodate
housing contracts, since they operate on a calendar year basis
rather than a Federal fiscal year. HUD could have used the
advance appropriations during the shutdown to renew expiring
contracts, but the money had already been spent.
Compounding the problem was the Department's haphazard
communication with stakeholders, including tenants, housing
providers, and, I have to say, the Congress.
HUD expected landlords and nonprofit groups to tap into
their funding reserves, their own reserves, to keep contracts
afloat, but the Department failed to issue timely instructions.
We heard numerous reports from landlords who had not received
guidance.
Meanwhile, this subcommittee got wind of the difficulties
and requested basic information from the Department about the
number of expiring contracts and affected properties. HUD had
already shared this information with outside stakeholders but
refused to provide Congress with the same information for
nearly a week despite frequent inquiries.
So this, too, is unacceptable. This Appropriations
Committee expects HUD to comply with legitimate oversight
requests, and I hope we will receive assurances from our
witnesses today that this kind of episode won't be repeated. We
need a better understanding of what went wrong and why it went
wrong. Just as important, we need to know what HUD is doing to
ensure similar problems don't recur.
The subcommittee is prepared to be a partner with HUD. If
there are certain adjustments in the way the Department's
funding is working, we need to know that. We want to be
helpful. But we also need for HUD to provide an honest
assessment of what happened and how it can improve.
So, again, I look forward to hearing from our witnesses
this afternoon.
I would like to recognize our ranking member, Mr. Diaz-
Balart, for his opening statement.
Mr. Diaz-Balart. Mr. Chairman, thank you very much.
I, again, first, would like to start to also welcome the
new members of the subcommittee. So, Mr. Chairman, you already
mentioned the new Democrats, and we are joined by, I think,
among the best Members that the Congress has: Mr. Womack, Mr.
Rutherford, and Mr. Hurd.
Frankly, I am thrilled that you are part of this
subcommittee.
Mr. Chairman, you will find them to be, frankly, phenomenal
members of this committee.
I might be a little biased, but I really think that this
subcommittee plays a special, significant role to our Nation.
And so I am thrilled to be on the subcommittee with all of you.
Now, let me start by first congratulating you, Mr.
Chairman, for your chairmanship. Don't get me wrong, I would
much rather--I liked it when you were ranking member better.
But, on a serious note, look, I have had the privilege to
serve on the subcommittee with Mr. Price for 4 years now. And
he is fair. It has been a partnership. And we not only have
gotten to, I think, work and like each other but trust each
other, and that is the most important thing.
And I have also gained a special appreciation for the
chairman for his dedication to not only public service but,
frankly, Mr. Chairman, your deep understanding of the
individual and sometimes very complex programs of the
jurisdiction of your subcommittee.
So I look forward to continue working with you, again, not
only working with you but collaborating with you, and we are
going to have a good time together, Mr. Chairman.
And I would just note, a lot of the times, it is, in
essence, you know, chairman versus ranking member in the
negotiations, and that has not been our experience. It has been
House negotiating as one in the subcommittee to deal with the
important issues.
And so, again, I look forward to continue working, Mr.
Chairman. And congratulations.
I want to welcome our witnesses today.
Acting Deputy Secretary Montgomery, you know, you stepped
into your role--again, the second in command at HUD--4 weeks
into the shutdown, in difficult times. That was not an easy
assignment, but I know you took on this role with, again, deep
understanding of HUD's mission and operations.
And you also serve as Assistant Secretary for Housing and
FHA Commissioner, and so you are serving double duty, managing
the day-to-day operations of HUD while overseeing a trillion-
dollar housing portfolio--something that a lot of us obviously
care deeply about. So that is quite a responsibility, sir, and
thank you for what you are doing and your service.
And, Mr. Dennis, I know you had an entire career in the
private sector before you came to serve here at HUD as CFO.
Thank you for agreeing to do that. I appreciate that you
combine, again, a private-sector perspective, which is so
helpful, with a commitment to HUD's mission and its workforce.
Thank you both for your service.
I look forward to a hearing about how you dealt with this
extremely challenging time and keeping HUD programs running
across the country as best as you possibly could during the
shutdown.
I would also like to thank the professional staff at HUD
who were called to duty during the shutdown. And, again, I
don't think staff gets enough credit. Even as they missed two
paychecks, they worked to make sure that programs across the
country continued to serve the neediest among us. Your efforts
and theirs, gentlemen, ensured that no tenants were evicted
during the 35-day shutdown.
We have an opportunity today to look at lessons learned
from, again, this experience and explore how to move forward
and improve HUD's systems and processes.
Chairman Price and I share the goal of helping HUD meet its
mission, to serve our most vulnerable citizens, including the
elderly, the disabled, and our heroes, our veterans. So I hope
today's hearing will be a beginning of a conversation with you
and other senior leaders at HUD on how to best do that. And so
I look forward to our dialogue today.
I thank the chairman.
Mr. Chairman, I yield back.
Mr. Price. Thank you very much.
And we will now turn to the statement from our witnesses.
Mr. Montgomery, I understand you have a full written
statement for the record. We will include that. You are
recognized for 5 minutes.
Mr. Montgomery. Thank you.
Chairman Price, Ranking Member Diaz-Balart, and members of
the subcommittee, thank you for welcoming me today to discuss
the most recent lapse in appropriations and how HUD performed
during this weeks-long interruption to our normal operations.
And to those new members of the subcommittee, I would like
to say welcome. Secretary Carson and the rest of HUD's senior
leadership team looks forward to working with you.
I am pleased to be joined today by our Chief Financial
Officer, Irv Dennis. Irv came to HUD in January of 2018 after
considerable private-sector experience. With 37 years of
accounting and audit work under his belt, ultimately as a
partner with the global firm of Ernst & Young, Irv brings a
vast well of knowledge to HUD as we seek to improve the
agency's financial management and accounting practices--in
short, to be better stewards of the taxpayer dollars.
Today I would like to offer you a brief summary of HUD's
operations during the most recent government shutdown.
I am proud to report that, despite the furlough of close to
97 percent of our dedicated workforce, HUD continued to support
activities that impact the health and safety of the individuals
and families that we serve.
For example, we continued to make payments to 3,200 public
housing authorities during the shutdown; we continued to make
contract payments to private owners participating in our
Project-Based Rental Assistance Program; and we continued to
renew expiring Section 8 contracts during the shutdown.
In cases where payments could not be made, our team worked
with owners to find interim solutions, such as accessing
property reserves, in order to ensure that residents were not
impacted. We understood the vulnerability of those families who
were concerned that, through no fault of their own, they would
be at risk because of expired contracts.
In contrast to some of the predictions you may have read in
the media, there were no evictions of our residents in any of
our properties as a result of the shutdown. Zero.
On the single-family side, we continued to make certain
families could secure FHA-ensured mortgages so they could
purchase a home or refinance an existing mortgage.
In the area of disaster recovery, while our ability to
review pending long-term disaster recovery action plans was
suspended during the shutdown, we took the necessary steps to
ensure that Puerto Rico could access the obligated $1.5 billion
in Community Development Block Grant disaster recovery funds
for which an action plan had already been approved.
We continued and are continuing to provide needed technical
assistance to our grantees in the development and execution of
the recovery programs. I can assure this subcommittee that the
shutdown did not materially alter the long-term recovery of our
grantees.
Specifically in the case of Puerto Rico, we moved heaven
and earth to make sure the financial systems were in place to
allow the Commonwealth to draw upon their already-approved
funds. In fact, just last week, Secretary Carson and I met with
Governor Ricardo Rossello to confirm that HUD's work during the
shutdown allowed Puerto Rico to proceed with its initial draw
as early as February 4, 2019. I am pleased to announce this
occurred on February 8. Again, we did what needed to be done.
Finally, we were in daily contact with your staff to make
certain we were as transparent as could be during a very
difficult period.
And we accomplished this all with just 3 to 5 percent of
our staff, using IT systems that are in desperate need of
modernization.
HUD employees from multiple program offices, none of them
being paid during the shutdown, moved mountains to make sure
that our critical and legally permissible activities continued
to function even though most of our agency could not.
Irv's team and the Office of the Chief Financial Officer
played a role that cannot be overstated, which is one of the
many reasons I am pleased to appear with him today. We can all
be immensely proud of their public service.
Again, thank you for the opportunity to tell the story
before this subcommittee. Irv and I will be pleased to answer
any of your questions.
[The information follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Price. Thank you.
Let me, before we start the questioning, just say that we
plan to continue the ground rules that have been in effect on
this subcommittee for some time. We will have 5-minute segments
for questions and answers, the standard 5-minute rounds. We
will alternate sides between the parties. We will recognize
members in order of seniority as they were seated at the
beginning of the hearing, and then those who come in after the
beginning will be recognized later.
We ask all members to be mindful of your time. It is not 5
minutes for the question and then the answer is another 5. The
idea is to have the question and the answer both within the 5-
minute period. So you need to allow our witnesses time to
answer within your 5-minute turn.
If there are no questions about that, we are familiar with
the procedure, and I will go ahead with the first question.
We, of course, faced a huge challenge, as everyone
acknowledges, when it organized on January 3. In fact, as soon
as was possible, that very day, we passed legislation on the
floor of the House to reopen the government. And we knew the
harm that a shutdown can cause and was already causing.
The effects are widespread. We anticipated that there would
be severe consequences for many, many Federal agencies and the
people they serve, including this agency, HUD. And there was a
risk of people being evicted. Thankfully, they were not
evicted, as Mr. Montgomery just said, but we came very close.
It was a real possibility. And that is a shocking realization
and one that is at the heart of our inquiry today.
MULTIFAMILY CONTRACTS
So let me ask you, Mr. Montgomery--and, Mr. Dennis, chime
in as needed--when did you know there was a problem with the
renewal of expiring multifamily contracts--that is, that there
could be a problem with respect to not only a shutdown but a
CR? When did you realize that this could pose a problem and you
would need to deal with it well in advance?
Mr. Montgomery. Thank you, Mr. Chairman.
To pull back the curtain a little, we have contracts
expiring every day. Contracts are expiring as we sit in this
room today. We have 23,000 of them. We renew them on an ongoing
basis.
I would add, it is a very paper-centric process, using
antiquated technology, largely driven by wet signatures on
paper documents. So it is a very time-consuming process we hope
to fix through some upgrades in technology that are long
overdue.
We began preparing for this shutdown, again, not knowing if
it would ever occur, much less how long it would happen, weeks,
if not months, before it happened.
Mr. Price. How far? How many weeks or months? That is what
I am asking.
Mr. Montgomery. Mr. Chairman, I know we had some
discussions in November. You know, we frequently assess things,
including the shutdown plans. Thankfully, the last one was 5
years ago. And, by and large, that was the blueprint, that
contingency plan developed during the previous administration.
But, again, you never really know a shutdown happens until it
happens.
Mr. Price. There is a 4 months' notice--is that right?--a 4
months' notice period. So would you not have known for--the
contracts expiring at the end of year, let's say, would you not
have known in--or had the notice period beginning in September?
Mr. Montgomery. Well, again, the contracts expire on a
ongoing basis. The overwhelming of them, sir, out of the 23,000
contracts, almost 21,500 of them were paid up through February,
over 94 percent of them. The percentage of contracts that
expired in December was about 550. We had another 500 or so
expire in January.
Again, we typically, since that process happens all through
the month, we, many times, spend the next couple of weeks of
the following month getting caught up on the previous month,
again, largely due because of the antiquated process that is
currently used.
Mr. Price. So, in September, though, September, that is the
4-month advance notice date, right?
Mr. Montgomery. Well, sir, but, again, we didn't know in
September that there was going to be a shutdown.
Mr. Price. Well, that is part of my question. You had some
pretty good clues, didn't you, that there would at least be a
continuing resolution?
Mr. Montgomery. Well, sir, I would say there have been a
lot of CRs, and it is a difficult place to be in to administer
a----
Mr. Price. All the more reason to anticipate. I mean, we
worked on a--we had very good bill ready to go in September. I
firmly believe that if we had been here 1 more week before we
adjourned to go campaign we would have had that bill on deck,
ready for the new fiscal year. But we didn't. And we certainly
never doubted that the bill was in jeopardy.
I am asking, could you not anticipate in September that
there might be a problem with these December contracts?
Mr. Montgomery. Well, sir, I will reiterate that every
month we have contracts expire. We typically spend into the
next month to get caught up, which is what we did here, evening
during a shutdown--which, by the way, we had never renewed
contracts during any government shutdown. We are told by our
long-term HUD staff that it had never happened, despite the
fact that they had expired in previous shutdowns.
Mr. Price. All the more reason to anticipate a shutdown is
coming and get as much of this cleared up as you possibly can
in terms of----
Mr. Montgomery. Yes, sir. No objections, sir.
Mr. Price. All right.
And so how long did it take you to get a handle on the
magnitude of this problem?
Our staff were informed that HUD might have failed to
review 1,150 multifamily housing contracts on January 4 and
received confirmation of that from HUD.
CONGRESS-HUD COMMUNICATION
On January 9, Mr. Montgomery, I think you participated in a
call with stakeholders where you provided additional details
about the renewal problems. Those stakeholders then reached out
to committee staff with this information.
Our staff then called HUD to confirm these details and were
told that HUD could not confirm it but that the information
was, quote, ``probably accurate.''
Surely you can see why that would be frustrating.
Mr. Montgomery. And, sir----
Mr. Price. It is concerning we wouldn't hear about this, or
that we would hear about an issue this important only after
outside groups were told.
Mr. Montgomery. Well, sir, I will apologize for any
miscommunication. I am fairly certain that Mr. Dennis' staff
spoke with the committee staff on January 4. My first call was
to housing advocates for the following week, I believe, started
on January the 11.
I would say, could communication improve if there is a
future shutdown? Absolutely. But, sir, I would just ask you to
understand we had less than 3 percent of our staff trying to
run an agency and it was pretty long days for everybody.
Mr. Price. Well, we will return to this.
Mr. Diaz-Balart.
Mr. Diaz-Balart. Thank you, Mr. Chairman.
CONTRACT RENEWALS
Mr. Montgomery, so we hear that there were approximately
1,200 contracts expired during the shutdown. How many of those
contracts were you able to ultimately get signed during the
shutdown? Any idea?
Mr. Montgomery. Well, it is a lengthy process. And, again,
I just want to keep reiterating this point. It is an
antiquated, slow process that is long overdue for
modernization. And, unfortunately, this episode pulled back the
curtain on that.
So, again, we started renewing those contracts by recalling
staff, something that had not been done during previous
shutdowns. There was 550, another 650 or so in January. I am
pleased to report that, as of today, all of them----
Mr. Diaz-Balart. Well, that was going to be my followup.
How many of those remain?
Mr. Montgomery [continuing]. All the ones for December and
January have been authorized for renewal.
Mr. Diaz-Balart. So you don't have any remaining that
expired that are still expired today, as far as you know?
Mr. Montgomery. Well, I just want to make sure I am clear
on the point, that they have been authorized for renewal,
which, by and large, means all that is left to be done is to
execute a signature----
Mr. Diaz-Balart. Right.
Mr. Montgomery [continuing]. Typically now by the owner.
So the total of 1,175 for December, January, and February
have now been authorized for renewal. And that actually
happened yesterday.
Mr. Diaz-Balart. That is great to hear. And that is an
impressive number, by the way. And, particularly, again, we are
talking about a shutdown situation, so that is amazing.
Let me talk to you a little bit about during normal time,
not shutdown times, as you run this program. I understand that,
again, project-based, elderly, and disabled contracts, again,
they can periodically expire. And so can you provide us with
some of the reasons, normally, that you may not be able to
immediately renew contracts that on the verge of expiration or
that have already been expired? I am not talking about a
shutdown situation; I am talking about the regular order of
business.
Mr. Montgomery. Well, again, we have some 23,000 contracts
all together. About 18,000 are Project-Based Rental Assistance.
Another 5,000 are what we call PRAC (Project Rental Assistance
Contract) renewals, which are essentially for Section 202 and
811, the elderly and persons with disabilities programs.
There are different pots of money, sir, but, regardless,
they all require a contract. So, as I mentioned before, that is
a process that is ongoing, happens every day, all day. And,
again, it is very time-consuming. And we have been working with
our CIO (Chief Information Officer), as a result of lessons
learned during the shutdown, to greatly modernize that process.
Mr. Diaz-Balart. So, during the shutdown--and, again, to
say you were understaffed during that time is an
understatement, obviously--can you walk us through the steps
that HUD took to, for example, communicate with the private
owners whose contract had expired during the shutdown? How were
you able to do that? Or were you able to do that at all?
HUD COMMUNICATION WITH PROPERTY OWNERS
Mr. Montgomery. Well, as has been the practice in previous
shutdowns--which, thankfully, they are not very frequent--we
sent out notices to owners. This time, I elected to personally
call some housing stakeholders, some advocates. I thought that
they should hear directly from me with an update. I didn't
realize until later that might be an issue, but, again, I stand
by what I did.
So, again, we typically don't face off directly to tenants.
That is simply done through the landlords and through the
property owners.
Mr. Diaz-Balart. Right.
You mentioned a little bit in your opening statement that
certain owners could borrow from their reserves, right, if
their contracts had expired? Can you just very briefly kind of
explain to me how that works?
Mr. Montgomery. Yes, sir. So owners are aware that they
can, if they have to, pull down some of those, what are called,
replacement for reserves. I suspect the ones we talked with
anticipated, you know, that a shutdown was occurring there just
days before it happened, but we officially put out a couple of
notices, one on January the 4th and one on January the 9th,
reaching out to property owners, advising them of the current
situation.
Mr. Diaz-Balart. And let me ask you then also, do you know
how many staff did you have to recall to HUD headquarters and
to the field to do the work of, again, dealing with all these
issues?
HUD STAFFING DURING SHUTDOWN
Mr. Montgomery. So approximately 15 staff in the
headquarters were working on it. We ultimately recalled
another--a total of 50 out in the field. Because, you know,
again, these contracts could have been in any number of
places--in a field office, in our Fort Worth office, could have
been with the owner, could have been with the headquarters
staff.
Mr. Diaz-Balart. I have to tell you that I am super-pleased
to hear that you managed this shutdown--and it was a lengthy
shutdown--without any evictions, obviously, which would have
been horrendous, which I think says a lot to the skills and the
ability and commitment of your team, frankly.
And I am running out of time, and if we get another round I
want to kind of touch a little bit about that. Because that
obviously is a huge priority for this subcommittee, and it
obviously was a huge priority for you. And, again, that part, I
think all of us have to say, job well done.
Mr. Montgomery. Thank you.
Mr. Diaz-Balart. I yield back, Mr. Chairman.
Mr. Price. Mrs. Watson Coleman.
Mrs. Watson Coleman. Thank you, Mr. Chairman.
Mr. Montgomery, I am new to this subcommittee, so I am
listening and learning. So I might ask you some very
fundamental questions.
Mr. Montgomery. Yes, ma'am.
EXPIRING CONTRACTS
Mrs. Watson Coleman. Of the 1,250, or the 1,150, or the
1,200 contracts that were expired during this shutdown, were
these contracts with owners of properties? And did these
represent multiple tenants, or were these contracts per tenant,
per owner?
Mr. Montgomery. So these are contracts basically per
property, with a combination of what we call Project-Based
Rental Assistance and then the Section 202 elderly program and
then the section 811 program for persons with disabilities.
Mrs. Watson Coleman. So the 1,200, or the----
Mr. Montgomery. 1,175.
Mrs. Watson Coleman [continuing]. 1,175 represents
contracts which expired over the spectrum.
Mr. Montgomery. January--excuse me, December and January.
HUD PROGRAMS
Mrs. Watson Coleman. But over different programs.
Mr. Montgomery. Yes, ma'am.
Mrs. Watson Coleman. What is 811?
Mr. Montgomery. That is a program for housing for persons
with disabilities.
Mrs. Watson Coleman. Okay. And the 202 is for?
Mr. Montgomery. For the elderly.
Mrs. Watson Coleman. For the elderly.
Mr. Montgomery. Yes, ma'am.
Mrs. Watson Coleman. And so there are Section 8 housing
programs for individuals that are renting an entire house,
right?
Mr. Montgomery. Well, most of these are for multifamily
properties that are owned by--the project-based are owned by
private owners, unlike the traditional public housing.
Mrs. Watson Coleman. Okay. And what about the public
housing contracts? Were those affected here as well?
Mr. Montgomery. They have a different pot of money. They
had access to more funds than we had. They were largely paid up
through February during the shutdown.
Mrs. Watson Coleman. When you talk about reserves, what
kind of landlord are you talking about?
Mr. Montgomery. So it depends on the program. If the
project has FHA insurance, they are required to have reserves.
Of those that don't, most of the owners keep reserves anyway
for rainy-day funds. And for 202 and 811, they are required to
have reserves.
Mrs. Watson Coleman. These are the rentals, all rentals we
are talking about?
Mr. Montgomery. Yes, Congresswoman. Yes, they are.
Mrs. Watson Coleman. All right.
So you said that all the contracts that had expired are
brought up to date and only need a signature now.
Mr. Montgomery. The category is ``authorized for renewal.''
And, right now, we are--actually made a decision a couple of
days ago to accept PDF signatures. We put our heads together
and realized we don't want to rely on not knowing what is going
to happen Friday on U.S. mail or FedEx, so we are accepting PDF
signatures.
Mrs. Watson Coleman. So how long will it be before those
people affected by those contracts actually receive the money
that they would have gotten over that period of shutdown?
CONTRACT RENEWALS
Mr. Montgomery. Well, we have already--well, 100 percent of
them are authorized for renewal. About half of them actually
have all the signatures. They should be receiving those funds
imminently, if they haven't already. And our goal is to wrap
all this up by Friday so that, again, not knowing what is going
to happen Friday, we can have them all buttoned up.
Mrs. Watson Coleman. So, during this shutdown, was there
any--because I get the impression that everything went well,
from your presentation. If that is so, that is great.
But is there any situation over this shutdown where, if you
had had the advance appropriations of $400 million unspent or
some other pot of money, you would have actually had the
occasion to use it then, during that shutdown?
ADVANCED APPROPRIATIONS
Mr. Montgomery. Without passing judgment, I would just say
it is difficult to administer a Cabinet agency under continuing
resolution after continuing resolution. The last one, we had
all of 2 weeks to expend those funds, again, not knowing what
was going to happen, whether or not there was going to be
another shutdown.
So that makes it very difficult, given we have a thousand
different allotments--excuse me, we have about 85 different
allotments and about a thousand different accounts, and every
time we have a CR, we have to do that process all over again.
And, Irv, you might want to add something to that.
Mr. Dennis. Yeah. You know, operating under a CR is
extraordinarily difficult. The money that is appropriated on
the first day of the CR is not available immediately for
obligation. We have funds controls that go in place.
It is really a five-step process. There are 83 allotments.
It finds itself down to a thousand accounts. And through those
five processes, there are multiple levels of review and
control. And it could take up to 1\1/2\ to 3 weeks for money to
get from CR to obligation.
Mrs. Watson Coleman. Can I ask a question just for
clarification? The $400 million that is defined as advance
appropriations, what is that intended for?
Mr. Dennis. So the advance funds--and this gets to an issue
that we have been focused on since I have been there and even
prior, is the technology side of our business. The advance
funds are used to bridge us from one year to the next.
So the end of the fiscal year is September 30. Due to our
poor and antiquated technology, we shut down the systems for
2\1/2\ weeks to close our prior year's books. Historically,
these advance funds are used to bridge that period.
We do not use these advance funds to anticipate a shutdown.
They are pretty much used in the first quarter, first month or
two.
You know, I would say, during the CR, you know, we had 2
weeks to take the appropriated money, go through the steps of
obligation. And this is Christmastime, it is holiday time. We
were very focused on making sure that January and February's
funds were allocated so there wouldn't be any----
Mrs. Watson Coleman. Mr. Dennis, I am sorry. I am brand-
new, and my time long ago expired.
I yield back.
Mr. Dennis. Okay.
Mrs. Watson Coleman. Thank you, Mr. Chairman.
Mr. Price. Thank you.
Mr. Womack.
Mr. Womack. Thank you, Mr. Chairman. Congratulations, by
the way.
Mr. Price. Thank you.
Mr. Womack. In a previous life, I served on this
subcommittee. I am back. So, warning to everybody.
To the gentlemen today, thank you. I mean, from what I have
heard, it is not like we didn't have a shutdown, because we
did, but it seems to me, based on the discussion that has
happened here today already, that HUD did a masterful job in
saving a lot of heartache out there, a lot of hardship out
there. And that is a credit to the leadership of the
organization, and I commend the Secretary and everybody on
down.
I will come to you, Mr. Dennis, here in just a minute.
But how long could this successful handling of kind of a
crisis situation actually have gone before we start seeing the
ill effects of a shutdown that I am quite surprised maybe
didn't happen?
EFFECTS OF A LONG-TERM SHUTDOWN
Mr. Montgomery. Well, obviously, during a shutdown, you
can't obligate funds you don't have. We don't want to,
obviously, get over the line of the Antideficiency Act.
If the question is when would we have reached a state of
where things would have gotten a little out of control--I don't
want to put words in your mouth, Congressman, but is that your
question?
Mr. Womack. I think that is about the right way to put it,
yes.
Mr. Montgomery. Okay. March 1, things would have gotten
much more difficult.
Mr. Womack. What have you been doing since we reopened the
government, knowing that we have another cliff that we could
possibly step off into, to continue the professional work and
the activity that involved so many moving parts during the day?
You mentioned you have 23,000 contracts that you deal with.
I did a little quick Arkansas math. That is about 100 a day
that you are dealing with, maybe more, maybe less on given
days.
So what have you been doing to prepare for what could
happen if an agreement were not to be reached by the end of the
week?
Mr. Montgomery. So we find ourselves in a unique period. We
just worked through the longest shutdown in government history.
We came out of that for 21 days. We are spending that period to
get caught up from the shutdown, to conduct regular business
that we would during a 21-day period, and also try to prepare
for the next shutdown, which may or may not happen and, if it
does, could be of unknown length.
So it has been an extremely busy, you know, 50, 60 days
now, whatever, since the last shutdown. And we are moving
heaven and earth, staff working overtime, to get all these
contracts fully executed and get the funds obligated.
I can assure you, we are moving every possible way to try
to get this complicated and antiquated issue resolved, not
knowing what is going to happen Friday.
Mr. Womack. Quick question about modernization, because
that is a subject for a more advanced discussion, short of
having to talk about shutdowns.
What would modernization do, from the IT perspective, that
would allow you a better--not that we ever want to be experts
at handling a government shutdown, because we don't like those
and we shouldn't have to go through those. But what would
modernization do, for example, in the past shutdown, that would
have made life a little easier for you and the people you
represent?
IT MODERNIZATION
Mr. Montgomery. That is an easy question, sir. Thank you.
Knowing the status of the contracts at any moment in time,
knowing where they are and where they are in the process, would
greatly improve our situation any day of the week, with or
without a shutdown. And we did not have that capability and
still do not have it.
The system that we use is early-1990s technology. It is
called TRACS. And while it performs okay, it is almost 30-year-
old technology.
Mr. Womack. Mr. Dennis, quickly, a question for you.
Mr. Dennis. Sir.
Mr. Womack. Thirty-six-year distinguished career at Ernst.
Tell me your frustration in dealing with the--you have to have
some frustration, do you not?
Mr. Dennis. I have actually very much enjoyed this last
year. We have retirement at our firm at an early age, and I
wanted to do public service and give back. So I have not been
frustrated. I actually have enjoyed it.
But there are differences. And I would say the two key
differences, when people ask me this question, is: When you
want to get something done and progress and modernize, you
know, I do not have control of resources. You know, I can't
control people like you want to control in the private sector,
and I don't control funds like you do in the private sector.
And I will tell you that probably the biggest frustration
that we have at HUD is the technology. When you look at our
technology--I had our team put together a matrix of all the
systems and how they interface--it is old, it is antiquated, it
is clumsy. It doesn't interface well. It is hard to move
information from point A to point B. Sometimes that is a manual
process; sometimes it is on an Excel spreadsheet. Very dated
stuff.
And the number-one thing we need is to improve that
technology. It would help with everything that the Acting
Deputy Secretary just talked about, and that is just in that
program. We could eliminate a lot of overtime.
And I think, generally, when I look at HUD per se, I look
at the infrastructure and I look at the operations, and our
operations are now starting to take over our infrastructure.
And when you look at the number of employees 30 years ago, we
were close to 16,000, 17,000; today we are around 7,000. When
you look at the funds that went through the operations 35 years
ago, it was about $5 or $7, $8 billion; today we are over $50
billion.
So we have the same infrastructure of technology doing the
much more complicated stuff with half the people. So, to me, it
is a very mildly risky environment. And, you know, I think the
way that the team pulled together and did what we needed to do
in the CR was a yeoman's effort on everyone's part.
Mr. Womack. Really appreciate the work.
Mr. Chairman, I know my time has way since expired. Thank
you so much.
Mr. Price. Thank you.
Mrs. Torres.
Mrs. Torres. Thank you, Mr. Chairman.
And I am, too, new to this subcommittee.
I don't expect you to have a crystal ball to try to, you
know, figure out what the White House is going to do and when
the next shutdown is going to come, if and when. Nobody here
wants to see that, obviously. I think you have heard that from
both sides of the aisle here. But we do expect you to do the
best under the circumstances.
I am looking forward to reading your proposal on new
technology, since you are operating under a 30-year-old TRACS
program. I can understand how frustrating that must be not only
for you but for your employees.
On the issue of employees, your guidance states that, you
know, you are to determine, you know, who is going to come to
work based on health and safety issues that may come across
that employee. So how did you determine, when it comes to
housing issues, you know, who is a priority to come to work,
who would be exempted?
EXEMPTED EMPLOYEES
Mr. Montgomery. Well, there was a contingency plan that was
in place at HUD that was used during the previous
administration, and that was the basis of what we used this
time.
Mrs. Torres. So you haven't updated that?
Mr. Montgomery. Well, we have updated it now.
Mrs. Torres. Okay.
Mr. Montgomery. We have what we are calling version 2.0,
lessons learned from the last 34 days. So we have made a fair
number of revisions to that plan.
Mrs. Torres. Is that made available for us to review?
Mr. Montgomery. It absolutely will be available as soon as
it is finalized.
Mrs. Torres. And when I look at domestic violence
shelters--which, as a former 911 dispatcher, I am very keen to
the needs of shelters and ensuring that they have funding
available for domestic violence victims to be relocated and
moved away from their abusers, not just the female or male
victim but also the children involved in that family unit.
Were those employees that work that program required to
come to work?
Mr. Montgomery. So, as I understand NOFAs (Notice of
Funding Availability), notice of funding availabilities, those
are not permitted activities because they require the
allocation of funds during a government shutdown.
Mrs. Torres. So that is not a public safety issue?
Mr. Montgomery. Well, it absolutely is. We still have to
have the funding.
What we did, though, is we did recall staff to come in and
be prepared to announce those grants as soon as the shutdown
ended, which we did the day after it ended.
Mrs. Torres. Can you walk me through the question on
advance appropriations funding? Because I don't think that I am
clear on your answer.
You had this funding available, but you spent it very early
on in the fiscal year. You say that you need that for bridge
funding. So how is the bridge funding made up later on? And did
you have any CR funds go unused?
ADVANCED APPROPRIATIONS
Mr. Dennis. So the advance funds are used, as you say and
as we discussed earlier, early in the year; they are bridges
from one fiscal year to the next. It is my understanding those
advanced funds are not made up during that calendar year. They
are not made up with subsequent CRs. They are used and then not
available.
Mrs. Torres. So they are really not bridge funding. I mean,
if you were utilizing it as part of your budget, why is it not
just part of your budget?
Mr. Dennis. It is the way the money is appropriated to us.
Mrs. Torres. So is that a recommendation to change? Because
if you are holding, you know, landlords accountable for having
a reserve, where is your responsibility for a reserve?
Mr. Dennis. I think you are bringing up a good point, that
it would be very helpful through the appropriation process if
we had a little more flexibility within the funding side.
We have some flexibility in the S&E (Salaries and
Expenses), but on the program side we do not. And once the
funds are appropriated for that particular program, it is
there. You know, once the money is appropriated, there is not a
lot of flexibility to move around once we run into these
situations.
And we have had some conversations with your committee
staff on the S&E funds for creating a little more flexibility
as we go forward. And we hope that our financial controls--and
we can prove to you that we are improving our financial
controls----
Mrs. Torres. In the last 3 seconds, did you have any CR
funds go unused, yes or no?
Mr. Dennis. We had--the answer is yes, but it wasn't a full
month's worth of appropriations for those programs.
Mrs. Torres. Okay.
I yield back.
Mr. Price. Thank you.
Mr. Rutherford.
Mr. Rutherford. Thank you, Mr. Chairman.
Mr. Dennis, you are the Chief Financial Officer. Can you
tell me, under your rental assistance program, you have about
3,200 public housing authorities who receive payments. You have
2,300 contracts that we have talked about, all expiring every
day.
Of those public housing authorities, how many of those did
not receive payment during this time?
HUD PAYMENTS DURING SHUTDOWN
Mr. Dennis. January and February, I think zero. I think
most everyone received payments.
Mr. Montgomery. And, yes, sir, just to split hairs, the
public housing authorities are different than the 23,000
contracts.
Mr. Rutherford. Okay. So that is in addition to the 23,000
contracts?
Mr. Montgomery. Yes, sir. And those were paid up through
February, the public housing authorities.
Mr. Rutherford. And then all 23,000 contracts, of those,
can you tell me how many did not get paid?
Mr. Montgomery. Well, there are 18,000 that are project-
based, 5,000 that are PRAC renewals. We advance paid 21,500 of
them out of the 23,000 roughly. And there were some that are
what we call suspension. This happens all the time, nothing to
do with the shutdown.
Mr. Rutherford. Right.
Mr. Montgomery. So the 1,175, when you boil the number
down, that is the amount that I referenced earlier that----
Mr. Rutherford. And so those people that are doing business
with you, no one was harmed financially. Is that----
Mr. Montgomery. Well, I would hope not. I mean, again, it
is difficult on owners, certainly on tenants. I don't think
they would want to go through this again.
Mr. Rutherford. Right. No, I understand that. Nobody wants
to go through this again.
What about the Federal Housing Administration mortgages?
Were any of those delayed or refused because of this shutdown?
Mr. Montgomery. Well, thankfully, we were able to continue
to process--because lenders do a good bit of that--the FHA
forward mortgages. The reverse mortgages, however, ran out of
commitment authority, so we can could not process or endorse
any reverse mortgages. So we are getting caught up on those as
well.
CDBG-DR
Mr. Rutherford. And all of the CDBG money for Puerto Rico
that was obligated, that was all accessible and ready for them
as well, right?
Mr. Montgomery. Well, on the $1.5 billion, we were still
working through, since those funds have been allocated, through
the grant agreement. That has been finalized, as I mentioned
before. Puerto Rico drew down the first amount Friday evening,
$45,000 out of the $1.5 billion.
Mr. Rutherford. Right.
So all of the angst that we heard in the media about the
catastrophic hit that was about to take place in HUD, can you
tell me how many tenants were actually evicted during that
time?
Mr. Montgomery. Sir, we are told that none were evicted as
a result of the shutdown.
Mr. Rutherford. Right.
HUD COMMUNICATION
Mr. Montgomery. But I do want to say, just a lesson learned
here, that there are could absolutely be better communication
between all parties. And there was no intent on my part to not
better communicate, but getting those contracts resolved was
our highest priority. So we will endeavor to improve
communications, with or without a shutdown.
Mr. Rutherford. Right.
And during your normal business processes, you have these
lapses in the contracts all the time. Is that correct?
CONTRACT RENEWALS
Mr. Montgomery. That is correct, sir. Contracts renew every
day, and we typically use a good bit of the next month to get
caught up from the previous, because they come in all until the
end of the month. And it is an ongoing, everyday process.
Mr. Rutherford. Okay. And now, as of now, the 1,175
contracts that had expired through January, those are all back
in place, correct?
Mr. Montgomery. Well, sir, the category they are in right
now is authorized for renewal, which happened this morning.
About half of those still require the actual signatures. But,
as I mentioned before, we are going to accept PDF signatures,
which we were told are permitted.
Mr. Rutherford. Okay.
Mr. Montgomery. So we are working to get all those done by
midnight just----
Mr. Rutherford. But even with those, nobody missed a
payment and nobody was put on the street. Not a single man,
woman, or child was put on the street because of this----
Mr. Montgomery. Well, we are not aware of any that happened
as a result of the shutdown relative to the contract issues. I
don't want to say--we all worked hard to make sure that didn't
happen. We were focused on that every day that we were working
through this.
Mr. Rutherford. I think as you said--and I will close with
this. I think, as you said, that 3 to 5 percent of your
personnel, they did move heaven and earth. So thank you all.
Mr. Montgomery. Well, and, by and large, that was career
staff. Some of them are here with us today. They deserve the
vast majority of that credit, and Irv's team in particular.
Mr. Rutherford. Thank you.
I yield back, Mr. Chairman.
Mr. Price. Thank you.
Ms. Clark.
Ms. Clark. Thank you, Mr. Chairman. Nice to be back with
the subcommittee.
Welcome to our new members.
And, of course, all our thoughts are with Mike Quigley as
he goes through this sad time.
Thank you. Thank you for being here.
I sort of want to go back to the line of questions that my
colleague Congresswoman Torres started. It is my understanding
that HUD's contingency plan for shutdowns, a lapse in
appropriation, calls for HUD to continue performance functions
that are necessary to prevent an imminent threat to the safety
of human life. Is that correct?
HUD SHUTDOWN PROTOCOL
Mr. Montgomery. That is correct, but there still has to be
funding allocated for us to do that. Otherwise, we might find
ourselves in an Antideficiency Act violation.
Ms. Clark. So is it not really correct in a shutdown? Like,
how do you make those decisions? If that is your contingency
plan, then it is also subject to funding levels when it
involves safety of human life?
Mr. Montgomery. It is my understanding, again, to be able--
we still have to have the funds to be permitted to be used,
which is one reason why there are reserve funds that we require
some--if it has FHA insurance, on 202s and 811s, they have
those funds for situations like this when they have to access
those reserve accounts.
Ms. Clark. So is it your testimony that you have 3 percent
of the workers who are still working, not furloughed, because
they are there because of an imminent threat to human life, and
then--but somehow domestic violence does not get covered. And
is that decision--how was that decision made, to eliminate that
from the category that is in your own contingency plan?
CONTINUUM OF CARE GRANTS
Mr. Montgomery. I don't know that we eliminated it. The
issue, as I understand it--and I am happy to research this more
when this is over--that we didn't have the funds to allocate
just yet. However, we knew we would at some point. So, so that
we could be ready when the shutdown ended, that is the staff
that we recalled to work on the Continuum of Care NOFA grants,
to be prepared to announce them when the shutdown ended, which
we did the day after the shutdown ended. And then we announced
another one a week or so later, another NOFA grant.
Ms. Clark. So were there any other situations where a real
safety to human life is threatened where you would have said,
well, we have to wait until after the shutdown? Or was it only
domestic violence that fell into that category of----
Mr. Montgomery. Well, again----
Ms. Clark [continuing]. Not having the funding? Because if
it is an emergency, sort of the essence of it is, we realize
you are in a shutdown and don't have access to regular funding,
but this is an emergency situation.
Mr. Montgomery. Absolutely. So many of these nonprofits and
organizations get money from us every year, so they, by and
large, would have funds from the previous year. Again, this
would have been access to future funds, again, which we
announced, you know, the day after the shutdown ended.
Ms. Clark. But isn't that the emergency nature of that
exception in the shutdown, about protecting human life? I don't
understand why domestic violence decided to get pushed out of
that emergency planning.
Mr. Montgomery. It is not that we pushed it out of the
emergency planning; I just can't allocate funds that I don't
have. And, again, we wanted to be ready to go when it ended,
and we did it the next day. I totally understand where you are
coming from, but, again, I can't allocate funds that I don't
have.
Ms. Clark. That is why we have emergency contingency plans
when human life is at stake, as it was for many cases, you
know, cases that we have heard of.
Another thing that we heard of was that domestic violence
shelters attempting to secure HUD funding were locked out of
the system. But that, again, is part of your contingency plan.
It specifically says they will be able, in a shutdown, to
access homeless assistance grants. So why were they not able to
access that?
Mr. Montgomery. So some of those groups that we heard from
had password issues. Some of them had other issues just
accessing the system. A lot of that is done through field
office staff that was furloughed. So, working with our CIO in
headquarters when we heard about this, we developed a
workaround solution that allowed us to work through those
problems from headquarters.
So, again, when we heard about them, we acted, we created a
solution, and, as I am told, eliminated the problems, the few
that had problems accessing the system.
Ms. Clark. Do you think, when we see your report on lessons
learned, that protecting people whose lives are at risk because
of domestic violence will be back at the top of needing
protection in the very unfortunate event that we ever go
through another government shutdown?
Mr. Montgomery. Well, they are absolutely a priority for
HUD, I can assure you, every day of the week.
Ms. Clark. Well, it seems like, if they are supposed to get
funding in an emergency when life is threatened, and yet you
say they weren't able to access that because there wasn't
funding, that there is a breakdown in the system in how we are
addressing these very real needs of the people in this
situation in HUD properties.
Mr. Montgomery. It is a convergence, obviously, of the CR,
one funding cycle ending, another one beginning, and what we
are permitted to do during a shutdown.
Ms. Clark. Thank you.
Mr. Price. Thank you.
Mr. Hurd.
Mr. Hurd. Thank you, Chairman.
HUD EMPLOYEES
Gentlemen, thank you for being here.
Have all of your employees, especially the 3 to 5 percent
that worked their tails off to make sure everybody was
protected, been made whole with their pay?
Mr. Montgomery. Well, the good news, all of them were paid
by the 31st. That was the last pay period in the previous
calendar year and the first one this calendar year. We are
absolutely working through ways that we can show our gratitude
to the staff that worked without pay for 34 days.
Mr. Hurd. Leave, pay, any----
Mr. Montgomery. Any combination----
Mr. Hurd [continuing]. Issue with healthcare, all of that
has been sorted out?
Mr. Montgomery. It is my understanding, yes. But, again, to
show the gratitude for the staff that did that work, working
through ways that we can show that gratitude in ways that they
would appreciate.
Mr. Hurd. Good copy.
IT MODERNIZATION
You talked about the manual processing of the TRACS system.
Had this not been a manual process, the difficulty on the 3 to
5 percent that were running the show, it would have been a lot
easier for them to understand where contracts were. Is that
correct to understand that?
Mr. Montgomery. It could have been nearly instantaneous----
Mr. Hurd. Gotcha.
Mr. Montgomery [continuing]. To track those contracts.
Mr. Hurd. And who is responsible within HUD on automating
the TRACS system? Who has operational control of that project?
Mr. Montgomery. By the way, I would say to my previous
answer, assuming we had the funding, obviously.
Mr. Hurd. Sure.
Mr. Dennis. Well, it is a joint effort between--a
collaborative effort between all of the programs, the CIO, CFO.
And one of the things that I did when I came----
Mr. Hurd. Gotcha. I heard what I wanted to hear, the CIO's
role, all right?
Mr. Dennis. Okay.
Mr. Hurd. And, Mr. Dennis, you said that there is no
flexibility on the program side. Would you not consider the MGT
Act that Congress passed last year--it is a piece of
legislation from a dashing young Congressman from Texas--that
was supported by this committee, would that not be considered
flexibility within the program side?
Mr. Dennis. I am going to have to--I don't know the answer
to that. I am not familiar with that.
Mr. Hurd. MGT was designed to have working capital, if you
modernize your infrastructure, your IT infrastructure, the
money that you save could be put into a working capital fund.
And I see on your Fitara score card, which you went from a D in
November of 2015 to a C+ in December, that you only got a C on
MGT, which means you had plans on creating an MGT fund, but you
hadn't.
Mr. Dennis. Yeah. So thank you for clarifying the word
capital fund. That is an area that we may be able to create
some flexibility. One of the things that we are doing in the IT
funds is really geared towards maintenance. And to the extent
there are funds that roll over from 1 year to the next, we are
hopeful that we can go through a reprogramming exercise and
develop----
Mr. Hurd. The answer is not may, it can, and that is why it
was designed to do that. And I see on your software licensing
on MGT--on your Fitara score card is an F, meaning that you do
not know all the programs that are being used on your system.
Now, Mr. Montgomery, you have been on the job for less than
a month. Is that correct?
Mr. Montgomery. Well, I have been FHA commissioner since
June 2018. I took over as acting deputy secretary a week before
the shutdown ended.
Mr. Hurd. Gotcha. Other agencies have saved billions of
dollars on understanding the software licensing, which could
then go into the MGT fund, which could then be used as rollover
funds to work on the TRACS system. So I would be interested in
your plans on how you plan to get control over the software
licensing, because that can drive modernization in so much of
your program, as well as how you plan to use MGT for the
modernization of the TRACS system.
Mr. Dennis. Thank you. We will absolutely take a look at
that and come back to you with our thoughts. But, you know, I
have spent time with your team talking about our finance
transformation plan, which includes IT modernization. We are
working very closely with our CIO and administration and the
programs to make that a holistic approach. It is, you know, it
can't be understated or overstated how antiquated these IT
systems are for us. So any ideas that you have to allocate
money and help us find money is much appreciated.
[Mr. Dennis responded for the record:]
The Office of the Chief Information Officer (OCIO), and in
particular the Chief Technology Officer (CTO), manages the acquisition
of software licenses at the agency. The CTO has instituted a software
inventory process, which includes validation and verification of all
Agency licenses. The CTO has begun to consolidate and optimize software
licenses in use by multiple Program Offices. The initial effort has
already begun to realize some cost savings by allowing HUD to remove
software that is no longer required to meet its mission. CTO is also
working to acquire an IT Service Management (ITSM) solution that
provides automated software asset management capabilities that will
significantly improve our ability to manage software license
requirements and costs and software compliance requirements.
OCIO is also working with GAS's Assisted Acquisitions office to
explore quicker and more efficient ways to acquire software licenses.
In the past, OCIO has had to complete individual procurement actions
for each software purchase or renewal. The new approach is for a
blanket purchase agreement in which all IT assets (licenses, hardware,
supplies and warranties) will be procured and centrally tracked. Our
current IT assets will then slowly transition to this vehicle.
TRACS is a legacy application residing on HUD's IBM Mainframe
platform and using COBOL code that is over 30 years old. The CTO's
recent assessment of HUD's systems determined that TRACS functionality
closely aligns to HUD's overall subsidy management and enterprise
financial management capabilities. Therefore, we are incorporating
TRACS system requirements into our Enterprise Subsidies Management
Program, which has been established to modernize HUD's subsidies
programs to include business process, financial management, and
technology. This will transform and ultimately optimize the utilization
of $35 billion in housing subsidies, which include both Tenant-Based
Rental Assistance (TRRA) and Project-Based Rental Assistance (PBRA).
HUD is already using the Technology Modernization Fund provided by
the MGT for a $20 million project to migrate other critical systems off
HUD's Unisys mainframe. That project will transition from on-premise
physical hardware to a cloud virtual machine environment. It will
consolidate and modernize the existing infrastructure, which will
substantially reduce costs for software licenses, operations, and end
user support. The TRACS modernization, as part of the broader
subsidies/financial management effort will instead use available
resources in HUD's appropriate IT Fund. The initiative will embrace an
agile methodology with six-month deliverables and identify potential
cost savings for reinvestment, similar to the Unisys TMF project.
Mr. Hurd. Well you have taken the first step in empowering
your CIO, making sure that person reports directly to Mr.
Montgomery and actually having a permanent CIO. Many other
agencies haven't even taken these basic steps in order to
modernize that enterprise. And it is going to increase
efficiencies, which I am glad we have talked almost through
everybody's question.
With that, I yield back, Mr. Chairman.
Mr. Price. Thank you.
Mr. Aguilar.
Mr. Aguilar. Thank you, Mr. Chairman. It is good to be back
in this subcommittee. I still remain the low person on the
totum pole, so we have got to figure out how that worked. And
just nice to follow the dashing young man from Texas walking
through procurement and IT with us.
PUERTO RICO DISASTER FUNDING
Mr. Dennis, I wanted to ask you about Puerto Rico. Can you
clarify your position on CDBG disaster funding (CDBG-DR)? HUD's
contingency plan for the shutdown, as we have discussed, but it
specifically mentioned appropriating in the fiscal year 2018 to
be disbursed during the shutdown. HUD delayed the disbursement
of funds to Puerto Rico because the agency required additional
documents outlining how Puerto Rico will spend the disaster
funding.
On February 9, HUD published a notice stating the agency
will take 60 days instead of 40 days it would normally take to
review Puerto Rico's application.
So my question is, what is the delay? Shouldn't we be
working to review this more quickly and disburse these funds?
Mr. Montgomery. Do you want me--that is probably more my
area, sir. So the $1.5 billion I referenced earlier, we were
able to work on that action plan. In those funds, Puerto Rico
was able to draw down on February 4, that is the $1.5 billion.
And they did make the first draw Friday evening of $45,000. The
$8.2 billion, and this is all unmet need category, that is this
tranche of money, I believe, sir, that you are probably
referring to.
We will be putting out a notice shortly regarding that
action plan. We discussed this with Governor Rossello when he
was in last week, and we communicate with his staff regularly.
And we are hopeful then to get that action plan finalized and
get the grant agreement signed. And we have been communicating
this with his staff as recently as Friday.
Mr. Aguilar. I appreciate that you are having those
discussions with them. What are the delays?
Mr. Montgomery. Well, sir, I am not sure that there is a
delay right now. Again, and it is not just Puerto Rico, I know
your question is directed at that. There is obviously
California, Georgia, North Carolina, Texas, and other States in
there. We have made the first tranche of unmet need a priority,
which is why we did the $1.5 billion first.
Puerto Rico, along with other states, we are reviewing
their action plans as we speak, and hopefully getting closer to
a solution on those as well.
Mr. Aguilar. How would you describe their action plan
compared to the other States that you mentioned, Georgia,
California?
Mr. Montgomery. Well, certainly the damage was more
profound in Puerto Rico, no doubt about that. Texas, Florida,
and Georgia had significant damage, as did some communities in
California. There is no doubt Puerto Rico's was significant.
The damage was devastating.
Mr. Aguilar. I guess my comments would be--I appreciate the
clarification. My comment would be, these individuals, when we
speak with them, they know that Members of Congress advocate,
and that is what we all do. They don't feel that they have the
ear of folks here. They feel like they have been left behind.
That they are U.S. citizens, but they aren't receiving the
funds and the care and the advocacy, quite honestly, that other
individuals, other communities receive.
So I would just like to ask that you be sensitive to that.
We don't need to treat them any differently. Let's move on
these action plans and let's give them the help that they need
so those communities can rebuild, just like Georgia, Texas,
Florida, California, the States that you mentioned.
Mr. Montgomery. I will absolutely commit to doing that
better, sir, where I haven't. I will be very mindful of that
going forward.
FHA LOANS
Mr. Aguilar. I appreciate it, sir. Mr. Montgomery, again,
for you. The FHA handbook, mortgages can be made to
nonpermanent residents if the application is authorized to
work--if the applicant, I am sorry, is authorized to work in
the U.S. and has a history of status renewals. As you might
know, Deferred Action for Childhood Arrivals, the DACA program,
allows some undocumented immigrants to work in the United
States.
In many cases, DACA recipients have renewed their status at
least once, if not multiple times. These hardworking young men
and women pay taxes and have undergone vetting process to
participate in the DACA program. In December, an article was
published that revealed HUD advised lenders to stop lending to
FHA-backed loans to DACA recipients.
According to the article, HUD shared this information with
lenders over the phone and at conferences, however, the agency
has not put out any policy in writing. There is 700,000 DACA
recipients living in the United States who I said pay taxes and
contribute to our economy. Many want to become homeowners, and
more are working to attain that goal in the future.
To your knowledge, has HUD issued any type of policy
surrounding DACA recipients' eligibility for FHA-backed home
loans?
Mr. Montgomery. Sir, I can tell you, at my level I am also
the FHA commissioner. The policy has been unchanged for many
years. The current policy was developed in 2003 and it was
codified into the new FHA handbook in 2015 in the previous
administration. That policy is exactly what we are following
today, sir.
Mr. Aguilar. So it would surprise you if HUD staff or
individuals were advising lenders of that, not to--not to work
with DACA recipients?
Mr. Montgomery. I am not aware of--I have heard some
accusations of that, sir, it hasn't come from me.
Mr. Aguilar. Sure.
Mr. Montgomery. But, again, I can't speak for all my staff,
but I do know we haven't changed that policy dating back 15
years or so.
Mr. Aguilar. Okay. Well, we can make sure that you have
that article as well that goes into some specifics, but I
appreciate your answer. Thank you.
Thank you, Mr. Chairman.
HUD CONTRACT MANAGEMENT DURING THE SHUTDOWN
Mr. Price. Thank you. Well, gentlemen, let me return to the
subject with which we started, namely, the contract expirations
and the way in which that--that they were handled and the kind
of conclusions you have drawn, looking back on this as to how
this went and how the process might be improved in the future.
As I understand it, as we said initially, there was a
failure to renew some 1150 contracts that came to light about
two weeks into the shutdown in early January. And those
contracts were about half December contracts, half January
contracts. And the question is, were those expirations
appropriately anticipated and dealt with in the best possible
way?
Mr. Montgomery, I appreciate your comments about
communication, we do, of course, need to pay attention to that,
and I appreciate your acknowledgement of that. In looking over
this episode, we don't find much about this in the shutdown
plans that HUD developed. In fact, the level of detail is much
less than we have seen from other agencies. And then, as others
have raised, there are questions I think that maybe we could
nail down a little further about sources of funding that might
have been used had they been available to deal with this
situation into this shutdown. For example, the advanced
funding. The advanced appropriations.
In retrospect, might that have been handled differently?
And might that have been available to bridge some of these
gaps? Had that not be been spent, those $400 million not been
spent earlier.
And then the question was raised about the CR funds. The CR
funds, of course, had expired on the 21st. We understand that
something like a billion of those funds, a billion dollars of
those funds, were allowed to expire. Might that have been
applied to some of these contract renewals at an earlier point?
So you see what concerns us here. We, of course, are
grateful that worse consequences didn't materialize, but it was
a fairly close call, and there are plenty of alarm bells going
off about what this might look like in the future. So you see
what we are looking for here. And as you are looking toward the
future and whether some of this might be corrected, we would
like to have your reflections on that. We all need to
understand it going forward.
Mr. Montgomery. Absolutely. Mr. Chairman, and while I hope
we never go through one again, it was certainly a big learning
process for all of us. And we carefully documented, we have
carefully updated our contingency plan as we see fit. And, you
know, again, these happen so infrequently that it is hard to
gauge.
First off, are they actually going to happen until they
happen? And then, secondly, when they do happen, how long are
they going to last? The last one in 2013 was a matter of days.
I think you have to go back to 1995, 1996, to find one that
lasted as long as this one.
So our principle driving and guiding principle, sir, was we
didn't want people to suffer as a result of this. So there were
different--between reserve accounts--replacement for reserve
accounts, some either with the owners, some with HUD, through
other funds--sources of funds, the housing certificate. We had
the funds to get those contracts renewed, the 1175 for December
and January.
Mr. Price. Yes, but you were scrambling. You were piecing
together funds from various sources. And I asked you about two
particular sources of funds that weren't available for you, for
the reasons I stated. What is your retrospective assessment of
that?
Mr. Montgomery. So on the $400 million, again, with the
technology limitations we have and the gap between fiscal
years, we literally, and this began a number of years ago, have
to shut down the system--for 2\1/2\ weeks to change over. It is
that $400 million that is used every year to do that. So I
don't know specifically when those funds were gone, but they
were long gone, I am told, before the shutdown happened.
Mr. Dennis. The other thing I would add is, you are right,
some of that money from the CR was there, it wasn't quite a
full month. And we are looking at a--it would require a change
of a business process to get those allocated quicker, and also
a different technology. It is a very decentralized process, it
requires coordination and communication with the landlords and
our folks. It is not centrally controlled out of headquarters.
But, you know, as we learned, and as we go through finance
transformation, IT modernization, we will take a look and see
if there is a more efficient and a quicker way to allocate
those funds. But I would say in the 2 weeks that we had or even
in anticipation before, which is your question, it is very
difficult to do that in a CR environment with our systems and
our processes the way they are.
Mr. Price. Well, I appreciate that and we will await the
results of those considerations. We have asked--our staff has
asked that you provide more detail and future shutdown plans to
address contract renewals. It really was not sufficiently
detailed. Whatever your judgment about the kind of steps you
took to meet these needs.
Mr. Montgomery. And I will apologize for that.
Mr. Price. You need to articulate much more precisely what
kind of activities will and will not be performed.
Mr. Montgomery. Absolutely. Yes, sir, we absolutely will.
And I apologize for that miscommunication and lack of it.
Mr. Price. And this is a question of planning also and
making quite explicit what is going on be done in various
contingencies.
Mr. Montgomery. Absolutely, sir.
[Mr. Montgomery responeded for the record:]
Per OMB Circular A-11, contingency plans are living documents that
are updated on an on-going basis, at the very least every two years.
This year draft contingency plan revisions are due to OMB by August 1.
In the short CR window following the lapse ending January 25, HUD
worked diligently to in corporate the lessons learned into a draft plan
before the expiration of the CR. As the full year bill was enacted, HUD
incorporated the lessons learned into the full revision of the
contingency plan planned for this summer. Beginning in April, HUD will
work across all offices to revisit the issues identified during the
shutdown and propose corresponding updates to the contingency plan
where appropriate. HUD will work internally with legal counsel to
review proposed updated and the resulting draft plan will be submitted
to OMB for review in late July. HUD and OMB will resolve any areas
which need further review and a final updated contingency plan is
expected to be posted publicly by mid-September.
Mr. Price. Thank you. Mr. Diaz-Balart.
DISASTER FUNDING
Mr. Diaz-Balart. Thank you very much Mr. Chairman.
Actually, Mr. Aguilar just reminded me, speaking about
CDBG-DR. One of the things that I am really proud of is that I
worked with the chairman to provide funding not only for
recovery, but also for mitigation, long-term mitigation. And
just--I don't expect you to have the answer to this one now,
but if I could just throw your way is--so obviously our States
are awaiting anxiously for Federal Register notification for
the disaster mitigation program. And if you could, again, I
don't expect you to have it now, but if you get back to me
about the status of the notifications of the CDBG-DR Mitigation
funds, when you can, it would be helpful.
Mr. Montgomery. And I am happy to do that now or we can do
it afterwards.
Mr. Diaz-Balart. I mean, if you have--you don't need to
give it to me now, but--so let me go to other questions, but I
would love it if you can get that to me.
Mr. Montgomery. Absolutely sir.
[Mr. Montgomery responded for the record:]
HUD anticipates publishing the notice by May 1.
CONTRACT RENEWALS
Mr. Diaz-Balart. Mr. Dennis, let me--obviously, the issue
about--if you can give me some more details about how you
worked to find the available funds to renew the contracts,
because, you know, which accounts did you scrub, which programs
presented the greatest challenges you worked to find the
available funds to renew these contracts. And also you
mentioned about the issue of the Antideficiency Act violations,
how were you able to ensure that you weren't running into that?
Mr. Dennis. So the first part of your question as it
relates to the funds. You know, I would say we did a relatively
normal process, only on an accelerated basis. You know, we did
scrub prior year funding that was available. That is an
exercise we go through every once in awhile. We did that during
the two weeks and before.
So, again, we accelerated what I would call a normal
process, that money is carried over from prior years and if we
were able to use it, we did. PBRA was probably a little more
challenging, but all programs have their challenges. PBRA
probably, just because of the decentralized nature of it, and
the process manual and having to reach out to the landlords on
the other side of the contract.
Antideficiency is--again, 37 years in public accounting, I
understand controls, I am passionate about them. And we have
a--the Appropriations Law staff is within the CFO shop at HUD,
as you know. We work very closely with the programs. Any time
we want to make a modification to a contingency plan or do
something different with funds, we go through that process.
I love his precision. He is very precise. He is good. And
if there is--on the contingency plan, once we go through the
process internally between the program lawyers, our--the
Appropriations Law lawyers, and then General Counsel obviously
goes through OMB review as well at that point. So we are very
conscious of that, making sure that we did not have any ADA
(Anti Deficiency Act) violations or tried not to.
Mr. Diaz-Balart. Well, I appreciate that. Every member of
the Appropriations Committee hates CRs, and obviously,
shutdowns. And I think one of the issues we have had--there are
so many new people in Congress, try to explain to folks just
how damaging CRs are, not only shutdowns, but CRs are. And so I
think you all kind of hit on that today, which I think is
important for frankly other Members to hear as well.
But, you know, again, you just talked about--Mr. Dennis,
you have extensive private sector experience. So what--tell me
a little bit about some of the lessons learned from this
experience, which is unique, obviously?
SHUTDOWN LESSONS LEARNED
And, you know, are there some processes and improvements
that HUD could make when it comes to, you know, project-based
contracts, and just kind of an open-ended question, but again,
you know, your experience. I want to tap into that.
Mr. Dennis. Yeah, so--again, I constantly get asked the
question, observe the difference between private and public
sector. And I don't want to--you know, I have been through and
have led a lot of crisis management through my 37 years, and I
don't want to put this in a category of crisis, although some
may suggest 3 percent of your workforce doing critical duty
could be in that category.
And what I observed through this 2-week CR was great
management by a great leadership team. You need calmness, which
happened. You need coordination amongst all of the leadership,
which happened. And you needed great communication within HUD.
And I appreciate--you know, we maybe need a little bit better
communication with you folks, and we can talk about that.
But I thought the team did a great job getting through it.
The lessons learned from HUD specifically is, again, just a--
not so much learned, but just another indication and awareness
that our IT systems need to be improved. We did learn some from
process stuff that we may be able to take a look back at future
potential CRs. I think we learned that if we had a little more
flexibility in how we can maybe use some of the program money,
that would have been helpful to us.
So, you know, I think there are lessons learned that we can
certainly share with you and maybe work together to get some of
the flexibility that would help us do our jobs better and more
efficient.
Mr. Diaz-Balart. Thank you. Thank you, Mr. Chairman.
HUD EMPLOYEE EXEMPTION
Mr. Price. Mrs. Watson Coleman.
Mrs. Watson Coleman. Thank you, Mr. Chairman. I would just
like to have some clarification on a line of questioning that
Congresswoman Clark endeavored upon, and it has to do with
exempting employees, including those who are performing
emergency work involving the safety of the human life or the
protection of property or performing certain other types of
accepted work.
How do you determine who that is and what functions are
they doing that constitute health and safety under your
definition?
Mr. Montgomery. So, again, those plans are developed and
used infrequently and, you know, there is--it is a constant
flow of program dollars between when NOFA grants are made, when
old funding runs out, when new funding is made. In terms of
what actually is used for health and safety, again, it is not
like there is a moment in time where that organization will run
out of money, in this case in January.
Mrs. Watson Coleman. Okay. I think my question is more
like, who--what types of programs are covered under that? For
instance, my colleague presented for your consideration
homeless programs, homelessness programs, especially in the
dead of winter, and domestic violence programs involving
protecting women and their children, moving them, paying for
things that are actually life safety, taking them out of very
violent situations. Do those not constitute accepted employee
functioning under this definition?
Mr. Montgomery. Well, you know, again, this was for a new
notice of funding availability going from that point forward.
We fund these organizations every year, whether it is domestic
violence, homeless shelters, you name it.
Mrs. Watson Coleman. I am sorry, Mr. Montgomery, you are
confusing me. I just want to know, did those functions--those
kind of programs, particularly sheltering the homelessness
under--especially in bad weather like we have had, and domestic
violence programs, do those people working to ensure that those
programs are running, do they fall into that category? That is
a yes or a no.
Mr. Montgomery. Some staff are permitted to work on
preparing those NOFAs, but again, Congresswoman, I can't make
an announcement for funding I do not have. I think that is the
core issue here.
Mrs. Watson Coleman. I am sorry. That is a really--another
good point. This seems to be directed at an emergency
situation, the health and safety of somebody or some building
or whatever, is in peril in proximity. What does that mean you
got to have funding?
EMERGENCY PROGRAM FUNDING
Mr. Montgomery. Well the Antideficiency Act prohibits me or
any government employee from obligating funds they do not have.
And if I don't have the funds for the NOFA, then I can't
announce the notice of those funds being available.
Mrs. Watson Coleman. Did you say NOFA?
Mr. Montgomery. I am sorry, ma'am. Notice of funding
availability, NOFA.
Mrs. Watson Coleman. So should there be a fund available
for such situations since they are not anticipated, they just
occur. How do you deal with that?
Mr. Montgomery. Well, that is probably a question probably
more within this body, but we are certainly open to having
those discussions with you. Again, we receive the funds as they
are allocated.
Mrs. Watson Coleman. But you ask for what you need, too.
Mr. Montgomery. Yes. Well, we get those funds every year,
and Congress gives them to us.
Mrs. Watson Coleman. But you don't have any such things as
emergency funds for that purpose per se, right?
Mr. Montgomery. I am not aware of any emergency funds under
the program. Congresswoman, I will be happy to look into that
though.
[Mr. Montgomery responded for the record]
The NOFA and formula grant processes are what HUD uses to provide
funding to organizations for service to the homeless and domestic
violence victims. In HUD's programs, offices do not have emergency
funds or the authority to fund organizations in any other way.
However, 2017 grant agreements for providers across the nation were
in place during the shutdown. HUD is not aware of any programs
suspending or terminating services during the shutdown. There were
staff and TA services working to ensure that those programs were
running.
Mrs. Watson Coleman. Thank you, Mr. Montgomery.
Thank you, Mr. Chairman.
Mr. Price. Thank you.
Mr. Rutherford.
DOMESTIC VIOLENCE PROGRAMS
Mr. Rutherford. Thank you, Mr. Chairman.
Mr. Montgomery, I think what might be a little confusing
here, the domestic violence in housing and technical assistance
initiative that the money is provided for, $2.3 million at one
time, is to actually work with four different organizations,
the District Alliance for Safe Housing in Washington DC, the
National Network in Domestic Violence in Washington DC, the
National Resource Center for Domestic Violence in Harrisburg,
Pennsylvania, and the Training Development Associates from
Laurinburg, North Carolina, and slash, Collaborative Solutions
in Birmingham, Alabama.
Now, those four grant recipients of this domestic violence
program, they are actually working to develop policy. How to
improve a policy. How to ID promising practices around the
country. Sort of a best practice initiative. And strengthening
collaboration with community stakeholders. This is a planning
function, correct? This is not someone who is like the police
or providing protection to a domestic violence victim. Is that
correct?
Mr. Montgomery. Congressman, I would have to look into
that. I have been in the acting deputy secretary role for just
about 3 weeks, and so if I could get back to you on that
question, I would be happy to.
Mr. Rutherford. Let me know because I am sitting here a
little confused myself. Are you actually--is HUD actually
entering into agreements where they are taking on the
responsibility of protecting domestic violence individuals, or
are they developing policies where they will collaborate with
the stakeholders in the community like police and others who
are--you know, domestic violence shelters and those kind of
things. Now, let me know because my----
Mr. Montgomery. I will, Congressman.
Mr. Rutherford. Because my understanding it looks more like
a planning process than, you know, where I am responding to the
scene of a domestic violence call.
Mr. Montgomery. I would be happy to look into that, sir. I
don't know the exact specific answer.
Mrs. Watson Coleman. It is about shelter and shelter--they
are protecting.
Mr. Montgomery. We will look into this and get back to the
committee.
[Mr. Montgomery responded for the record:]
Those grants were awarded by HUD, DOJ and HHS to the grantees named
by Rep. Rutherford to form a consortium that will work with DV
providers and homeless service providers to improve policies, identify
promising practices and strengthen collaborations. This consortium does
not police or directly provide protection to a domestic violence
victim.
Mr. Rutherford. Let me know. Thank you.
Mr. Montgomery. I apologize. That I just came under my
purview a few weeks ago.
Mr. Rutherford. That is fine.
With that, Mr. Chairman, I yield back.
Mr. Price. Thank you. Mrs. Torres.
Mrs. Torres. We fund shelters. We fund emergency housing
programs. My initial question was about the shelters that we
fund for domestic violence victims. Within those shelters they
have programs, housing programs, sometimes they have to get an
emergency voucher to get them from their abuser into a new
location. Sometimes they have to pay utility bills. So those
programs is what I was referring to. They were at risk.
There is no place to send a victim of a domestic violence
if they don't have the funding. Should they have a mechanism of
reserves, maybe--but, remember, that shelters depend on the
Federal Government for 80 percent of their funding, 80 percent.
So there are no reserves, sir. You are the reserve. And when we
choose to shut down and refuse entry to workers that
specifically work to fund those programs, people's lives are at
risk.
Now, I want you to look forward and I want to figure out
how we can fix this. I pray to God that, you know, this
President would not shut down the government once again, but
who knows what he will do if he doesn't get his way. But the
grownups in the room here have to figure out how we are going
to deal with victims and how we are going to house people that
have severe disabilities and prevent them from being evicted.
So you say so far you have heard of no evictions.
I say we have--I have heard from my housing authorities in
the district that I represent, and the confidence that
landlords no longer have in the Federal Government is a cost of
doing business, and not just a cost of doing business, it is a
cost of protecting a victim of violence. Now, that is not on
you, that is on President Trump shutdown. I am not saying that
is on you.
What is on you is a policy that I hope to get real soon on
how we can be better at this. And as the first lady would say,
we need to be best.
So I yield back.
Mr. Montgomery. And I will absolutely commit to working
with you, Congresswoman, and this committee on how we can avoid
this should there be any future shutdowns. Thank you.
Mr. Price. Mr. Hurd.
Mr. Hurd. Thanks again, Mr. Chairman. The San Antonio
Housing Authority provides assistance to about 65,000 people,
half of those are kids under 18. How did HUD ensure that the
vulnerable families that need a HUD voucher was able to get
that to make their rent payment?
HOUSING CHOICE VOUCHERS
Mr. Montgomery. So, as I mentioned previously, the public
and Indian housing program, separate from the PBRA that I run,
they were paid up through February. All those public and
housing authorities were paid up through February.
Mr. Hurd. So if----
Mr. Montgomery. That is the housing choice vouchers----
Mr. Hurd. And going into a--you know, speaking like my
friend, Mrs. Torres, was talking about looking forward, if the
government were to shut down this weekend, how does it impact
those people that need those payments?
Mr. Montgomery. They would be paid up through April.
Mr. Hurd. Because of the----
Mr. Montgomery. The funding that we got during the CR we
are in right now.
Mr. Hurd. Good copy. I appreciate that. Thank you, Mr.
Chairman, I yield back.
DOMESTIC VIOLENCE PROGRAMS
Mr. Price. Thank you. Ms. Clark.
Ms. Clark. Thank you, Mr. Chairman. Just going back again
to this domestic violence issue. There are emergency transfers
for Section 8 and homelessness assistant grants. I understand
that funding was out, very difficult for people to access,
maybe the people were furloughed who could help with the
passwords, et cetera. What we have heard reports of is because
they were blocked and these were true emergencies, some
domestic violence organizations actually took out loans to
provide the money to find alternative housing.
Is there a plan in HUD to reimburse those organizations for
those costs?
Mr. Montgomery. Yes. It is my understanding they will
absolutely be reimbursed.
Ms. Clark. Great. Thank you. Back to your testimony that
there are zero evictions, and I understand you are putting some
qualifiers around that, but to the best of your knowledge there
are zero evictions, but there are definitely reports that while
not technically an eviction, we do have landlords who are not
renewing Section 8 housing leases because of the experience of
the shutdown. So while different, the practical effect is the
same. Tenants are forced to leave their housing.
LOSS OF HOUSING
Do you have account of how many situations that has
happened with? How many landlords have decided not to renew
because of the shutdown?
Mr. Montgomery. Congresswoman, we don't have those, but I
would say that with or without a government shutdown, it is
always a problem regarding preservation and owners that want to
opt-out for reasons, increased property value. So preservation
with or without a shutdown is always a problem that we
confront.
Ms. Clark. It is, but I think you can agree that the
shutdown definitely accelerated that in certain cases. Are you
trying----
Mr. Montgomery. I wouldn't disagree.
Ms. Clark. Are you trying to get a handle on how many that
may be? Are you--or just don't have that information yet or you
are not counting?
Mr. Montgomery. We don't have the information yet because
we are using this three-week period to get caught up from the
last one, get the funds allocated today, and prepare for
another one. But we certainly had discussions about those
topics.
Ms. Clark. Yeah. Speaking of that. Having met with HUD
employees in my home State of Massachusetts and having dealt
with the many talented people who devote their careers to
public service, I am struck, Mr. Dennis, by you coming into
public service after a career in private sector, and your
comments on the dire staffing needs of HUD.
And I know from speaking to employees in my district that
they are concerned that what was a problem before the shutdown
is now accelerated. We can't have a month-long furlough with
all the grants and other deadlines that people need to make to
get the housing needs met in our communities without having a
ripple effect across the system.
So can you tell me in the administration's budget what
staffing level increases you are requesting to meet these very
real needs?
HUD STAFFING
Mr. Dennis. I don't have the numbers off the top of my
head, but we can certainly get them for you and we are very
focused on getting the right head count in our--at HUD.
Ms. Clark. Okay. Great.
Mr. Dennis. I am be happy to supply that information for
you.
Ms. Clark. We will look forward to that. Thank you very
much.
[Mr. Dennis responded for the record:]
HUD's staffing levels have declined over the last four decades from
a high of almost 18,000 FTEs in 1977 to fewer than 7,600 FTEs in FY
2018, while its budget authority has steadily increased from just under
$30 billion to more than $50 billion. This trend has resulted in fewer
staff to manage and monitor compliance on an increasing number of
grants, PHAs, and other programs. To mitigate these risks and reverse
the decades-old trend of declining staff, the HUD 2020 Budget allocates
$1.6 billion toward salaries and expenses (S&E). This funding will
provide HUD the resources to increase its staffing to nearly 7,800
employees, which includes the Office of the Inspector General. Using
workforce succession strategies, the Department intends to execute this
increase to ensure that additional staffing results in the right people
allocated to the right jobs, providing the biggest impact toward
achieving HUD's priorities.
Mr. Price. Thank you. Let me turn to CDBG-DR funding to a
very different, but I think quite pertinent questions that I
would like to raise as we enter our final round of questioning
here.
DISASTER FUNDING
Mr. Montgomery, I will address this to you. In your
testimony you used the rather striking phrase, move heaven and
earth, in the case of Puerto Rico. I certainly hope that is
true, and appreciate your emphasizing the--that is exactly the
approach that needs to be taken in that very dire situation.
Now, we have heard lately in the press that the White
House, and in particular the OMB director, Mick Mulvaney,
former OMB director, that they are considering syphoning money
away from Puerto Rico recovery efforts to help fund border wall
construction. That clearly would circumvent the wheel of the
Congress and probably violates both appropriations law and the
separation of powers.
But I wonder what your view of that would be? Does HUD have
the authority to divert funding from grantees that have
received CDBG-DR allocations? And have you or anyone else, in
HUD, that you know of, had conversations with the White House
or OMB about redirecting funding from Puerto Rico, California,
other grantees, to the President's wall project?
Mr. Montgomery. Discussions that we have obviously with
White House staff, we typically can keep private, but I would
say there is no discussion about syphoning money away from
disaster recovery, and it is my understanding that would
require Congress to do that. So there has been no discussion of
that topic, sir.
Mr. Price. And your understanding is that that would be in
violation of appropriations law?
Mr. Montgomery. It is certainly my understanding, Mr.
Chairman, yes.
DISASTER RECOVERY EFFORTS
Mr. Price. Well, we share that understanding. Now, let me
turn to the State action plans and something I hope you can
clear up. I am referring now back to the shutdown contingency
plan back in December, and a couple of apparently contradictory
items here. Maybe you can respond right off the bat, maybe you
will need to come back to us.
But on page 8 there is statement to the effect that the
Office of Community Planning and Development will continue
disaster recovery assistance programs funded through multi-year
appropriations. That is into a shutdown period. The disaster
funding included in the Bipartisan Budget Act is available
until expended and contained $10 million for salaries and
expenses to administer the CDBG-DR program. But on that same
page, the Department asserts that the review of consolidated
plans or action plans is not an accepted activity.
Now, that appears, on the face of it, to be a direct
contradiction. And the Department in fact did suspend review of
CDBG-DR action plans and amendments during the shutdown. So it
is not just a hypothetical problem.
So given the fact that no-year funding, no-year funding has
been provided for disaster recovery efforts, and the
contingency plan states that HUD would continue these programs,
why did you suspend review of the action plans? Why didn't the
Department use the $10 million provided for salaries and
expenses to continue to review plans and plan amendments?
Mr. Montgomery. Mr. Chairman, I will give you a brief
answer and then commit to responding with a more detailed one.
There are several pots of money, as you mentioned, there is no-
year money, and then there some staff that are called term
staff. I do know this, I understand that we are prohibited from
working on any sort of consolidation plans during a shutdown.
Funds that have been obligated, for example, with Puerto
Rico, we were permitted to work on those funds that we were
working to get available and allocated to Puerto Rico. Irv and
I and a set of confirmed appointees were able to work on that.
So I apologize, again, for giving a short answer, but I
will commit to getting a more detailed response to you
following this hearing.
[Mr. Montgomery responded for the record:]
In accordance with its contingency plan, HUD limited its activities
during the lapse in appropriations and did its best to make difficult
but prudent choices to minimize the number of staff it recalled. The
Department, in consultation with OMB, ultimately chose to extend the
disaster action plan and plan amendment review timeline. On January 9,
2019, HUD published a notice announcing that the Secretary found good
cause to waive the statutory 60-day review deadline and issued an
alternative requirement for review of pending action plans and plan
amendments.
HUD deemed this extension of the plan review timeline necessary,
given the lapse in appropriations, because review of CDBG-Disaster
Recovery (CDBG-DR) action plans and plan amendments requires the work
of HUD staff from a number of offices, not just the Office of Community
Planning and Development (CPD). Plan review includes staff from the
Offices of General Counsel, Fair Housing and Equal Opportunity, Public
and Indian Housing, Housing, and Policy Development and Research.
Using the no-year disaster appropriations set-aside for salaries
and expenses (S&E) during a lapse for all necessary HUD staff as
mentioned above would have been inappropriate. The permanent HUD
employees that would have been needed to perform this work during the
lapse are paid from HUD's regular, annual S&E appropriations and
switching funding sources to pay them during a lapse and switching it
back after the lapse would have be inconsistent with GAO appropriations
law guidance. These no-year S&E funds were used to keep term employees
working on CDBG-DR activities during the lapse, but they could not
complete reviews on their own given the absence of necessary employees
from CPD and other HUD offices.
Mr. Price. I appreciate that. That too is possibly an item
for future attention--clarification.
Mr. Montgomery. Yes, sir. And there are various pots of
money, some employees are treated under different categories,
and we will definitely work to clear that up.
Mr. Price. So related to that, when do you plan on
announcing the resumption of these plan and plan amendment
reviews? What should we----
Mr. Montgomery. That is imminent, sir, probably within
several days.
Mr. Price. Several days?
Mr. Montgomery. Yes, sir.
Mr. Price. All right.
Mr. Montgomery. And I can probably by the end of the week
have a much better idea of the specific day.
Mr. Price. Have you communicated that to grantees and other
interested parties?
Mr. Montgomery. We have constant communication with those
states. They do know that something is imminent, but again,
sir, I think by the end of the week we will have a better idea
of the exact date. We are working very hard, again, like a lot
of things, to get caught up on that as well.
Mr. Price. All right. Thank you.
Mr. Diaz-Balart.
Mr. Diaz-Balart. Mr. Chairman, I will be brief. Actually, I
was going to touch on exactly the same issue that you just did
about--now, I understand that, you know, time and time again
you said you can't allocate funds that you don't have.
So I think it is a pretty strong consensus, bipartisan
consensus, at least among appropriators, and I think among many
that--I don't care what you want to call it, CRs. And you can
put names to the CRs. Is it this person's CR. Or is it this
person's CR? Or is it the Schumer shutdown or the last long
shutdown. The reality is CRs are frankly very detrimental and
shutdowns are beyond that. And so I just hope more people
understand that. Clearly, the Appropriations Committee
understands that.
But my understanding is that the impact communities from
the storms were able to draw down funds because the funds were
already available. And I know that Florida, for example, was
able to continue drawing on funding allocations for Hurricane
Irma and long-term recovery.
DISASTER MITIGATION EFFORTS
So I would just also--and I kind of asked about that to
you, sir, about the CDBG-DR, the mitigation funds. Do you want
to--where is that in--and, again, I didn't think you were going
to be ready for that at this----
Mr. Montgomery. Maybe in my----
Mr. Diaz-Balart. Exactly. I know, exactly. But, again, if
you want to touch a little bit on that, and if not, if you can
get back to me on that.
Mr. Montgomery. Sure. I will just provide a brief update.
Our first priority was on met need, obviously. HUD is more the
long-term supplemental funding mechanism. We have had
discussions with FEMA, you know, they are more the resiliency
and mitigation experts. And really the mitigation funds, this
is the first time they have been allocated separately. To be
forward looking, I think that was a great move by Congress. And
now----
Mr. Diaz-Balart. And we know that was this subcommittee, by
the way.
Mr. Montgomery. Absolutely.
Mr. Diaz-Balart. It wasn't the Senate, it wasn't the--it
was this subcommittee, right?
Mr. Montgomery. But it is the first time we have done it,
and we don't want it to necessarily look like traditionally
what HUD does, nor do we want it to look exactly like what FEMA
does. So in our discussions with them, sort of the hybrid
approach, making sure it does its intended purpose.
Mr. Diaz-Balart. Thank you. Look, and Mr. Chairman, let me
thank you. I think it has been a very important hearing, a very
fruitful hearing. But I do want to end by thanking you all.
And, you know, the folks that were working under very difficult
circumstances, weren't getting paid, doing some really
important jobs. And, again, I would hope that non-appropriators
would listen to what we have heard today and what those of us
that kind of have a little bit better understanding as to the
potential impacts. Not only the shutdowns, which are obviously
disasters, but even the CRs that you mentioned time and time
again.
But, again, I just want to thank you. And if you could,
just know that--and I think I can speak for everybody, how
grateful we are to all of you, but also those folks that you
called up who worked awfully hard under difficult
circumstances, not getting paid, and frankly not knowing when
they could get paid.
So just--again, thank you all for what you do, and
hopefully you will not have to ever deal with that
circumstance. It is something that none of us should ever have
to deal with.
But, again, Mr. Chairman, thank you for this hearing. I
yield back.
Mr. Price. Thank you. And let me underscore that we see
from our discussion here today the kind of circumstances that
we are dealing with, that shutdowns are terrible, CRs are only
slightly less so. And the kind of anticipation, planning,
contingency planning that is required is very demanding, and
you shouldn't have to go through this again. And, of course, we
will do everything in our power to make certain that you don't.
I do want to thank you for being here today. I thank you
for the preparation that went into this, the participation,
your answers. I thank the people behind you, the staff members
that back you up, the HUD staff that has been professional and
dedicated and under a good deal of duress.
So we do acknowledge that and thank you for your good work,
and we will hopefully now be free to, as you say, wrap up
unfinished business, but then look down toward the writing of a
new bill and dealing with any kind of challenges that need
work, and prepare to learn from our experiences and chart a
positive course going forward.
I think we will have a number of questions probably to
submit to you for the record, and so we will do that within a
very short period of time.
Please work with OMB to return the information for the
record, and 30 days is the deadline we ask you to meet, 30 days
from Friday. And so then we will be able to publish the
transcript of today's hearing and make an informed decision as
we look toward 2020.
Mr. Diaz-Balart, any final comments?
Mr. Diaz-Balart. Thank you. Mr. Chairman.
Mr. Price. If not, then we thank you, and this hearing is
adjourned.
Mr. Montgomery. Thank you, Mr. Chairman. Thank you, ranking
member.
[Material submitted for inclusion in the record follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Wednesday, February 27, 2019.
STAKEHOLDER PERSPECTIVES: FAIR HOUSING
WITNESSES
CLAUDIA L. ARANDA, SENIOR RESEARCH ASSOCIATE, DIRECTOR OF FIELD
OPERATIONS, URBAN INSTITUTE
KEENYA ROBERTSON, PRESIDENT AND CEO, HOUSING OPPORTUNITIES PROJECT FOR
EXCELLENCE, INC.
Mr. Price [presiding]. The hearing will come to order. Good
morning. Welcome, everyone, to our second Transportation, HUD
Subcommittee hearing of the year. Today we are going to examine
fair housing, a critical component of our ongoing national
effort to combat discrimination and ensure equal opportunity
for all of our citizens.
Last year we celebrated the 50th anniversary of the Fair
Housing Act, one of the three key civil rights acts of the
1960s. It outlawed discrimination on the basis of race,
national origin, religion, sex, familial status, or disability.
This and other landmark laws, including the other civil rights
acts and the Americans with Disabilities Act, have bolstered
and expanded fair housing protections for millions of people,
whether it is someone seeking a mortgage, renting an apartment,
or living in federally-assisted housing.
These laws promote equal rights and economic opportunity,
but the Fair Housing Act goes one step further. It requires the
Department of Housing and Urban Development and its State and
local grantees affirmatively to further the goals of the act.
In other words, there is an expectation that communities must
proactively combat discrimination to overcome historic patterns
of segregation and to foster inclusive communities.
HUD has placed renewed focus on enforcing this aspect of
the Fair Housing Act until the current administration
indefinitely suspended the affirmatively furthering fair
housing rule that was promulgated in 2015. To say the least,
that is concerning. HUD has an obligation to receive and
investigate fair housing complaints, issue grants to State and
local government as well as nonprofit organizations to help
enforce our fair housing laws, and to assist communities as
they seek to comply with the Fair Housing Act. These activities
support what should be a bedrock Federal commitment to fair
housing.
Unfortunately, we have seen some troubling signs in the
last 2 years that this commitment is waning at HUD
headquarters. In addition to suspending the affirmative
responsibility rule, the affirmatively furthering fair housing
rule, the number of high-profile Secretary-initiated fair
housing complaints intended to address systemic discrimination,
such as banks being less likely to approve African-Americans
and Hispanics for mortgages, those have dropped precipitously.
The disparate impact rule that sought to ensure lenders and
landlords were held accountable for discriminatory outcomes,
whether the discrimination was intentional or not, that is
being reassessed reportedly by HUD. Guidance for the equal
access rule, which laid out protections for LGBT individuals
has been removed from the HUD website.
HUD has yet to distribute fair housing enforcement grants
despite having received funding for this purpose in the Fiscal
Year 2018 THUD bill enacted last April. As a result, local
organizations that work with vulnerable populations are feeling
pinched. There are also reports that HUD's staffing levels and
internal capacity are inadequate when it comes enforcing our
fair housing laws.
Finally, we need to come to terms with new and emerging
trends in housing discrimination. Who faces discrimination
today? What is being done about it? How has technology made it
easier or harder to enforce fair housing laws? How can HUD
improve their oversight, and how can this subcommittee be an
active partner in this effort?
To help us examine these questions, I am pleased to have
two expert witnesses join us today. Claudia Aranda is a senior
research associate, director of field operations, at the Urban
Institute where she conducts research on the housing market and
housing discrimination. She has supervised numerous empirical
studies about differential treatment in the rental housing
market, including some work on behalf of HUD. We are also
excited to have Keenya Robertson with us this morning all the
way from Miami, Florida, Mr. Ranking Member. She is president
and CEO of the Housing Opportunities Project for Excellence, a
private, nonprofit fair housing organization. Prior to her work
with HOPE, Ms. Robertson worked as an attorney fighting on
behalf of people with disabilities and other vulnerable
populations in Georgia, Arkansas, and Mississippi.
Both witnesses will provide us with valuable insight and
perspectives about fair housing. We expect this hearing will
help us inform our subcommittee's work as we engage with HUD
officials on this issue in the months ahead, and eventually
draft a Fiscal Year appropriations bill. So we really do
appreciate your both being here. We look forward to your
testimony.
Now I would like to recognize our distinguished ranking
member, Mr. Diaz-Balart, for any statement he might have.
Mr. Diaz-Balart. Mr. Chairman, thank you very much. I also
would like to welcome our witnesses today, and I thank Chairman
Price for holding this important hearing. Mr. Chairman, I will
be brief in my opening remarks, one hopes, so that we can get
right to the witness testimony and questions.
I do want to first welcome Ms. Robertson. Thank you for
making the trip from sunny, warm southern Florida. Look, anyone
who lives, works, or visits the southern part of the State of
Florida quickly understands that it is not only one of the most
dynamic places in the country, but it is also a very diverse
part of the country. So, again, I look forward to listening to
your testimony. Thanks for being here.
Ms. Aranda, I also look forward to hearing from you today.
I know HUD and, frankly, the wider community has benefitted and
continues to benefit from your research. So I, again, look
forward to hearing from both of you. The research, I believe,
leads to improved policies. Frankly, there are few areas as
important as our common goal of eliminating discrimination and
expand opportunities. We value your perspective and look
forward to your testimony.
Chairman Price and I have worked very closely together to
make sure that housing opportunities are available to
vulnerable populations, and I am proud of what we have been
able to do together with our bills, particularly within the
last past 2 years to expand opportunities for veterans, for the
disabled, and families with children.
I have made it a priority, by the way, during my service in
Congress and before that, my service in the Florida
legislature, to ensure that nothing stands in the way of
housing opportunities. To expand opportunities, we need to work
together and remove barriers, and the Fair Housing law, I
believe, is a key component of this work.
And so it has been over 50 years since passage of the Fair
Housing Act. Much progress has been made, but we obviously know
that there is yet important work that has to take place. And
so, again, I look forward to your testimony. Thank you for
being here. And with that, Mr. Chairman, I yield back.
Mr. Price. Thank you. Now let's turn first to Ms. Aranda,
if that is all right, for her testimony. You are recognized for
5 minutes. We are happy, of course, to print a longer statement
in the record. But if you could shoot for 5 minutes for an oral
statement, and then we will have plenty of time for our
discussion. So Ms. Aranda.
Ms. Aranda. Chairman Price, and Ranking Member Diaz-Balart,
and other members of the subcommittee, thank you so much for
this opportunity to discuss the importance of housing
discrimination, its forms and its prevalence, and to highlight
lessons from the past decade of paired testing research
conducted by me and my colleagues at the Urban Institute, a
nonpartisan research organization based here in Washington, DC.
My name is Claudia Aranda, and I am a research associate at
Urban. The views I express today are my own and should not be
attributed to the Urban Institute, its trustees, or its
funders.
Since the late 1980s, Urban has conducted numerous housing
discrimination studies funded by the Department of Housing and
Urban Development, including the 1989, 2000, and 2012 studies
on racial and ethnic discrimination in rental and sales markets
nationwide. Over the past decade, we have also conducted a
national study on people with disabilities, those who are deaf
or hard of hearing, and people who use wheelchairs, and pilot
studies on families with children, sexual orientation, gender
status, and Housing Choice voucher holders.
The paired testing research we have conducted since 2010
shows that the discrimination that persists today in 2019 is
harder to detect than it once was, but the barriers confronted
by home seekers increase the time and cost of their search for
housing, and further limit the choice that in many metropolitan
areas is already constrained by the challenge of reaching
landlords and finding available affordable housing.
Our research confirms that for many Americans, the promise
of the Fair Housing Act has not yet been realized, even more
than 50 years after its passage. As the director of field
operations since 2010, I have overseen the completion of over
14,000 paired tests in over 44 metropolitan areas. In a paired
test, 2 people are assigned fictitious identities and
qualifications. They are comparable in every way except for the
characteristic being tested, such as race or ethnicity. When
the almost identical home seekers receive unequal treatment
from landlords and real estate agents, paired testing
essentially catches discrimination in the act.
When the Federal Fair Housing Act was passed in 1968,
African-American families were routinely and explicitly denied
homes and apartments in white neighborhoods. The findings from
the first HUD-funded studies of the 1970s and 80s showed
discriminatory practices against minorities that further
perpetuated high levels of segregation and limited access to
opportunity-rich neighborhoods. In 2012, the most recent
nationwide study on race and ethnicity, showed that although
the most blatant forms of housing discrimination may be less
common, such as when a landlord refuses to meet with a
potential renter, minority home seekers still faced
discriminatory practices, even when they are well qualified as
renters and home buyers. Landlords and real estate agents
recommend and show fewer available apartments and homes to
African-Americans, Latinos, and Asian-Americans compared to
equally-qualified whites.
The discrimination studies we have conducted on other
groups, some of which are also explicitly protected by the Fair
Housing Act, also experienced differential treatment, including
people with disabilities, transgender people, gay men, and
voucher holders. It is also important to note that our testing
studies may underestimate the level of discrimination against
any particular group because testers were well qualified for
the housing they sought, and tests were done in response to
publicly-listed advertisements. For housing that is not
advertised, discrimination is likely more overt and more
prevalent as fair housing organizations may confirm in smaller
scale enforcement testing. Additionally, our studies capture
the discriminatory treatment that can occur during the initial
inquiry and information gathering phase, but not during the
final stage of a rental or sales transaction.
Paired testing is a powerful tool for detecting and
documenting discrimination, but it does not fully explain or
begin to address the longstanding patterns of residential
segregation and economic disparities seen in communities across
the country. In order to overcome ongoing housing
discrimination and the legacy of past exclusionary land use and
zoning policies, a multipronged strategy is needed, one that
includes that vigorous enforcement of anti-discrimination
protections as well as proactive testing to uncover otherwise
undetected forms of differential treatment, public education
and outreach to residents about housing rights and
opportunities and incentives to encourage affordable
development and neighborhood reinvestment.
As rental and sales markets continue to change and as
attitudes towards residential diversity continue to evolve,
policymakers and fair housing practitioners will continue to
need reliable evidence, not only on the forms incidents and
targets of discrimination, but also in other factors that may
contribute to segregation and disparities in neighborhoods,
such as information gaps, local regulatory policies,
stereotypes, and fear.
Taken together, these efforts and other recommendations I
outline in my written testimony can help grow and sustain
inclusive high-opportunity communities that give residents
access to good schools, jobs, transportation, and other
services.
Thank you again for this opportunity to share highlights
from our research. I look forward to answering any questions
you may have.
Mr. Price. Thank you very much. Ms. Robertson.
Ms. Robertson. Good morning. I am, again, Keenya Robertson,
president and CEO of Housing Opportunities Project for
Excellence, or HOPE, a private, nonprofit fair housing
organization serving Miami-Dade as well as Broward Counties. I
also serve as chair of the board of directors of the National
Fair Housing Alliance, the only national organization solely
dedicated to ending housing discrimination.
Thank you, Chairman Price, for this opportunity. Your
stalwart support of fair housing enforcement has not gone
unnoticed, and I thank this committee for putting fair housing
on the agenda today. I am also grateful to our congressman and
ranking member, Mario Diaz-Balart, for his support of efficient
fair housing enforcement and equal housing opportunity.
I would like to talk to you today about community-based
perspectives on the Nation's enforcement of the Federal Fair
Housing Act, and to express concerns regarding the resources
that the major players have to combat housing discrimination.
Enforcement of the Fair Housing Act in the United States is
carried out through a combination of efforts by U.S. HUD, DOJ,
local and State civil rights and human rights agencies, and
private nonprofit fair housing groups. Fair housing assistance
programs, or FHAPS, are State and local agencies that operating
under a memorandum of understanding with HUD to process
complaints of housing discrimination. It allows HUD to be more
efficient and far reaching.
HUD's Fair Housing Initiative Program, or FHIP, is the only
Federal funding for groups like mine, private, nonprofit fair
housing groups, to carry out fair housing education and
enforcement throughout the country. FHIP has three major
components. Those components are education and outreach,
enforcement, which allows testing complaint intake.
Organizations like mine do direct advocacy on behalf of the
individuals who call us, and we also conciliate, take cases to
mediation, and other processes that get to resolution. The Fair
Housing Organizations Initiative allows for new organizations
as well as expansion of existing programs.
The FHIP Program is made available through the notice of
funding availability, or the NOFA. Over several years we have
watched the deterioration of the process. You have delays in
release of the NOFA itself, award decisions, grant award
negotiation, timing of payments to grantees. All of this has
caused serious damage to long-established organizations, often
the only entities serving their areas. As a small agency, we
serve two major metropolitan areas.
Many have been forced to take out lines of credit to
complete existing work, to continue paying their employees, and
to maintain basic operations, and some have even been forced to
close their doors for a period of time. In fiscal year 2017, we
were awarded a new 3-year enforcement grant. We successfully
negotiated the terms in December of 2017. However, we were
offered a start date of April 2018. We pushed and pushed and
got a March 1st start date.
For 2 months, we had to operate and maintain staff and
their benefits with very previous cash reserves. During our 2-
month funding gap we received a complaint from an expectant
mother. She lived in a low-income tax credit property with her
two other small children. Her lease was not being renewed for
failure to provide truthful information on her rental
application. What this meant was she failed to disclose her
pregnancy on the application, provide an ultrasound picture of
her unborn child, and a doctor's letter estimating the time of
birth of the child.
In order to save her housing, a Federal lawsuit was filed.
News coverage of the case resulted in other residents coming
forward. Three families joined the lawsuit. Two of them had
already lost their housing, and one came from another property
where the same discriminatory rule was being enforced.
We also received a complaint from a gentleman who had
recently moved from the property. When he returned from the
hospital after having open heart surgery, he went to the
leasing office to request a live-in aide. Despite providing
documentation and being asked to show his surgical scar to the
assistant property manager in the leasing office, his request
was denied.
We are able to successfully resolve cases like this with
significant changes in policies. These properties, they were
for women, for families with children, and residents with
disabilities. This may not have been accomplished had we been
forced to lay off our staff or close our doors during that
funding gap.
HUD's Office of Fair Housing and Equal Opportunity is
experiencing a shortage of staff that affects all aspects of
its work, but, most importantly, the administration of its
program and timely investigation of complaints. FHEO needs the
adequate human resources and additional resources to assist in
the development of increasingly complex investigations.
FHIP organizations like ours need increased funding. Large
areas served by small agencies like ours need adequate funding
to serve our actual service areas, and those FHAP organizations
need increased funding to maintain their staff and to conduct
thorough investigations. We have submitted further detail in
the written testimony, and I look forward to any questions that
you may have. Thank you for this opportunity.
Mr. Price. Thank you, Ms. Robertson. We do want to get to
your comments about FHIP and how they operate and how they are
funded in due course. I want to first ask you, though, for a
little more direct commentary on some of the trends we have
seen at HUD during this administration that affect our
capacities to enforce fair housing and equal opportunity.
These look like troubling signs to me, and I would like to
know what your assessment is in terms of what their impact
might be. The affirmatively further fair housing rule has been
suspended. The disparate impact rule is being reassessed, that
standard of judgment. Guidance on the treatment of LGBTQ
individuals have been removed from the website Number of
Secretary-initiated complaints addressing systemic
discrimination has been scaled back to just one, I believe.
So whichever you see as most impactful and whichever you
would focus on, I want to ask you both about those moves and
how they might affect your work and fair housing overall. So,
Ms. Robertson, I will start with you. These trends or others
you might want to highlight, how have they affected your
ability to carry out your mission of advancing fair housing?
What particularly should we be focused on?
Ms. Robertson. Thank you, Chairman Price. I think
everything that you mentioned impacts our work directly,
indirectly, and holistically. I can start with disparate
impact. I am very concerned that a legal doctrine acknowledged
by the United States Supreme Court that has bene in effect for
over 40 years. I was in the room during oral arguments during
the Inclusive Communities case, and even Justice Scalia
acknowledged that the Court has acknowledged the doctrine of
disparate impact and its applicability to the Fair Housing Act.
I think that one of the most important approaches to
disparate impact is commonsensical. I am going to use domestic
violence victims for example. You have unintended consequences,
for example, with a nuisance ordinance and also rules of a
housing provider regarding criminal activity. Women happen to
be the most common victims of domestic violence in that if you
had rules that people out of housing or subjected them to fines
or other penalties, you would have a disproportionate impact on
women when those rules are enforced against them as victims.
The unintended consequence would be the displacement of women
from housing when you do not put the appropriate protections in
place.
Where disparate impact is concerned, I can speak to south
Florida and some of the work we have been able to do with
regard occupancy restrictions. Some apply to affordable housing
and then also high-end housing on Key Biscayne, on the water.
Occupancy restrictions that limit residences to less than 2
persons per bedroom have a disparate impact on families with
children.
For example, we examined the policies of the fifth largest
affordable housing developer in Florida, representing about
7,500 housing units. They had less than 2 persons per bedroom
allowed in some of their units, and we looked at the policies
across the entire State. An example would be a three-bedroom
unit that did not allow more than 4 people. So a family of five
or a family of six would be put out completely of housing
availability at these affordable housing properties. You would
also have families, for example, we had a mother who had two
daughters who was forced into a larger, more expensive unit as
opposed to allowing her daughters to share a bedroom. She was
required to get a 3-bedroom unit.
Shall I continue? Thank you.
Mr. Price. Those appear to be almost textbook cases of
disparate impact.
Ms. Robertson. Absolutely. And you also saw this with
regard to another property management company that had over a
dozen between Miami and Broward Counties where we were able to
eliminate those policies and make sure that a reasonable
standard of at least 2 persons per bedroom was the occupancy
restriction.
So doing away with the rule, cutting back the rule, scaling
back the rule would eliminate the ability for us to do work
like this and have that type of impact in our investigations.
These were systemic investigations where we got multiple
properties. We had statewide impact, actually one of the cases
that was a Secretary-initiated complaint. Our jurisdiction is
only Miami-Dade and Broward, so to reach the rest of the
properties throughout the State, there was a HUD Secretary-
initiated complaint that made that property management company
take a look at its policies throughout the State and change
them.
Mr. Price. Thank you. That gets into another controversial
area. And my time has expired, so, Ms. Aranda, we will wait for
the next round to let you elaborate. What I do want to ask you
is the impact as you see it of these changes and overall if you
have seen any, it is early I know to say this, but have you
seen changes in discrimination trends in the last year and a
half. But let's wait on that.
I will turn to Mr. Diaz-Balart for his questions.
Mr. Diaz-Balart. Mr. Chairman, thank you very much. Ms.
Robertson, so your organization is charged with raising public
awareness on fair housing issues and also helping clients, as
you mentioned, with allegations of discrimination when they
arise. So how do you work with your organization to balance
these two priorities, outreach and compliance?
Ms. Robertson. In each of our offices we have an education
and outreach coordinator, one assigned to each county. In
Miami-Dade and Broward, each office has an investigations
coordinator, and then we also have one person who coordinates
all intake of complaints. So being able to maintain that staff
is critical.
These are not individuals that you find out in the market.
From an employer's perspective, I can get an accountant. I can
get someone to help with me human resources. But individuals
who conduct fair housing investigations, we invest a lot of
time, training, dollars into those staff members. By
maintaining them, we are able to continue our programs and also
hit the ground running as soon as we receive new funding
awards.
And I think that the big difference between just simple,
sterile complaint intake and investigating of a process and
filing a complaint, we are advocates on behalf of the residents
who call us. I am just going to pull an example from Hialeah.
We had a young man who is 9 years old, came to this country
from Cuba with his mother and his father. Their grandfather had
a 3-bedroom, 2-bathroom mobile home in a mobile home park. The
policy of the housing provider was to use the children's report
cards, specifically their conduct grade, to make decisions on
whether or not the family was going to be allowed to stay.
We were able to get enough outrage from community and get
the local news investigator to chase folks through the parking
lot asking about the policy, and essentially shamed them,
educated them about what was wrong that shamed them into
changing policies.
Mr. Diaz-Balart. And you work with local community
organizations as well, right?
Ms. Robertson. Absolutely.
Mr. Diaz-Balart. And so do you work with also faith-based
organizations?
Ms. Robertson. Absolutely. Every type of organization that
we can get our foot in the door with, we do. Our housing
counseling agencies allow us to teach first-time home buyers
how to spot discrimination. With regard to religious
organizations, we would speak to them specifically about fair
housing, but also issues that affect folks who are
discriminated against on the basis of religion. We get to
schools to talk to families with children.
Working with community organizations that are service-based
allow us to, say, get to 10 counselors, but those 10 counselors
each have access to, like, 70 folks. So one of the cases that I
mentioned with regard to the occupancy restrictions was
referred to us. Their client was referred to us from one of
their counselors. Now, while we can't reach 700 or 7,000
clients, just getting to those counselors alone allows us to
get to folks.
Mr. Diaz-Balart. And, Ms. Aranda, so if you could give us
your assessment of HUD's Fair Housing Initiative Program, FHIP,
you know, and also what makes for an effective grantee?
Ms. Aranda. What makes for an effective grantee as a FHIP
agency?
Mr. Diaz-Balart. Yeah.
Ms. Aranda. So, you know, just to clarify my perspective on
this issue, we have in order to be able to do all this work
over the last decade have worked closely with FHIP
organizations. We have worked closely with Mr. Robertson. We
wouldn't have been able to do this work out the FHIP
organizations.
And the housing discrimination studies, because we have had
to do so many tests to be able to generate these estimates have
required some of the fair housing organizations to do 200, 400,
in some cases 600, paired tests in the course of a year in
addition to all of the other important work that they are
doing. And so that is certainly very challenging work that we
ask them to do.
But one of the things that we talk about across all of the
reports that we have completed over the last decade, and
actually consisting in reports in previous years when we have
completed the national discrimination studies, is the
importance that we see in ongoing enforcement work, ongoing
outreach and education, the work that many of the FHIPs do in
so many of the communities across the country that without
them, that wouldn't be accomplished.
And so I talk about in my written testimony, but certainly
there is a lot more detail that we include in the reports about
the importance of those functions. And that without them,
obviously our fair housing laws would go unenforced without
that important work.
Mr. Diaz-Balart. Thank you, Mr. Chairman. My time is up.
Mr. Price. Thank you. Mrs. Watson Coleman?
Mrs. Watson Coleman. Thank you, Mr. Chairman, and thank you
for your testimony, both of you. My very first job in life was
working for the Division on Civil Rights in the State of New
Jersey. My very supervisory position was to be the chief of the
Bureau of Rooming and Board. I mean, the chief of housing
discrimination complaints, so somewhat familiar. I want to
understand, you do complaints. You do conciliation conferences.
Where is your enforcement authority, and what happens if a
person doesn't cooperate?
Ms. Robertson. So unlike the organization or the agency
that you led, our role is a little bit different. We are able
to initiate our own complaints. So we are actually complainants
and plaintiffs in appropriate actions. Sometimes we are simply
referring victims, and depending on the role that we took in an
investigation, we actually become a party.
Mrs. Watson Coleman. To whom do you refer these complaints?
Is there a division on civil rights that enforces the law
against discrimination?
Ms. Robertson. Well, for HOPE, we have different avenues,
and if there is a victim of discrimination involved, it is
actually their choice, but we offer to them the different
choices. For example, Miami-Dade County has a human rights
division that accepts complaints as does Broward County. The
difference between the two is Broward County receives funds
directly from HUD to investigate. We can file them directly
with HUD, which we have done, particularly when there is HUD
funding involved. We think we can be more impactful with making
change. And then we have nonprofit cooperating attorneys. The
Florida Justice Institute and the Disability Independence Group
are tow private nonprofit law firms that we refer clients to as
well.
Mrs. Watson Coleman. And so the consequences of a landlord
or realtor or person who is selling a home who does not comply
with the findings of discrimination, what are they?
Ms. Robertson. Will you repeat the question for me?
Mrs. Watson Coleman. What are the consequences of not
getting someone to do the right thing?
Ms. Robertson. Well, it is going to depend. It will depend.
I mean, if the investigator or the investigative agency finds
cause, usually what would follow would be a lawsuit. Everything
that we have actually initiated that is based on our
investigations has ended in settlement. We have been able to
come out with resolutions that change policies that remedy the
victims, and also put in place best practices that avoid
closure of housing opportunity and eliminate discriminatory
practices.
Mrs. Watson Coleman. So the reexamination of the disparate
act is like putting a damper on looking at policies in place
that are supposed to be neutral on their face, but have a
disparate impact. Patterns and practices are harder to
investigate and deal with without this authority?
Ms. Robertson. Absolutely, yes.
Mrs. Watson Coleman. Okay. When I was in the Division on
Civil Rights back in 19----
[Laughter.]
Mrs. Watson Coleman [continuing]. The best way to determine
whether or not someone was being discriminated against was this
pair testing, and that is what you do now. But you also
mentioned that discrimination is harder to detect. So I want to
know something about that, but I also want to know to what
extent do you hold referred complaints of realtors who are
doing the targeting into communities based upon race, and
ethnicity, and other issues, and low income? I would like to
hear from both of you if I have that----
Ms. Aranda. Thank you for the question, Congresswoman. And
I can say a little bit more about what we have seen most
recently in our work on the paired testing methodology, and
that when the paired testing methodology was first used by
civil rights organizations in the 60s and 70s, that the
treatment was much more overt, right? So a landlord might to
say to you we don't rent to black people, right? So you knew in
that moment that you were discriminated against, whereas now
what we see if that a landlord may tell somebody, sorry, that
apartment has been rented, and then later that afternoon the
second tester in the pair will be offered an appointment to
view that apartment, right?
So without that direct comparison, and that is the power of
the methodology, you wouldn't know that discrimination was
happening. And so that is the benefit of what you see.
The role that we play is as a research organization, so our
testing is designed to be able to look at systematic
differences. And so we wouldn't actually take action on any
particular outcome. And so I am happy to let Mrs. Robertson say
more about that.
Mrs. Watson Coleman. My time is up, and perhaps we can get
to this a little bit later. Thank you.
Mr. Price. Thank you. Thank you. We will ask you to defer
and pick this up on the next round. Mr. Rutherford.
Mr. Rutherford. Thank you, Mr. Chairman. And thank you both
for being here this morning. Ms. Robertson, in your testimony
you referenced the challenges in some of the delays in funding
and what that does to the operation. When did these delays
actually start, and have they had a major impact on HOPE?
Ms. Robertson. Absolutely. I can trace delays back to, if I
just go through our funding cycles. We received a Fiscal Year
2010 enforcement grant that was a 3-year grant. Typically in
the grant cycle, April would be the notice of fund availability
release, and before September 30 you would receive notice. Our
Fiscal Year 2010 grant actually didn't begin until May of the
following year. We had a 6-month funding gap during that time
period.
This is a competitive process, so unlike the government
agencies, the local private agencies don't receive ongoing
consistent funding. This is competitive based. But when we
successfully get a grant, we should be able to hit the ground
running with the dollars. When you lose staff during funding
cuts, you have to start all over again with training them with
regard to testing. We conduct testing. It is a very specific
process, and then every new test coordinator has to get its
whole new tester pool to be able to conduct its investigations.
Mr. Rutherford. Well, you know, I used to run a very large
law enforcement organization, and I know losing those knowledge
skills and abilities of those investigators, you don't just
hire somebody and start, you know, where you left off. It takes
a long time to ramp that up. Is everyone on the same grant
cycle or do some FHIPs have longer periods where they are not
funded than others? Are you all----
Ms. Robertson. No, it is different, so my answer would be
affirmative to the latter part of your question. So, for
example, the Fair Housing Center in Atlanta, their 3 years
ended on January 31st, I believe. Right now the Fiscal Year
2019 awards have not even been announced. They don't know if
they are going to get funding. And then once they do find out
they are going to get funding--I am claiming it for them--they
have got to negotiate the grant.
And in the meantime there is no telling whether or not they
are going to be able to maintain all of the staff members that
they currently have. Staff morale is very important. When you
are cutting back on benefits, when you are not able to provide
cost of living increases because the dollar amounts have not
increased, it becomes difficult.
Mr. Rutherford. So let me ask this in light of all that. Do
you have other sources, and I think I already know the answer
to this having listened to you. Do you have other sources of
income, like private funding and other things, that will help
you get over those gaps? You mentioned earlier you have to lay
people off.
Ms. Robertson. Right. I have currently 3 staff members who
are on part-time schedules right now. But what we do is
traditional nonprofit fundraising and resource development. We
do consulting work for some of the housing authorities, and we
are also fair housing planning consultants to some of the
jurisdictions. When we talk about affirmative furthering fair
housing, one piece of that is accomplished through funding fair
housing organizations. And some of our local jurisdictions
provide some funding as there are cuts in CDBG and other funds.
For example, our funding has been cut. When I joined HOPE
in 1998, we had $200,000 in funding from Miami-Dade County. We
don't receive a dime any longer. We had $50,000, I believe,
from Miami Beach and from City of Miami. We are down to $10,000
from each of those organizations and $20.
Mr. Rutherford. So is that at the heart of your request? In
your conclusion in your testimony, in your written testimony,
you talked about the need to hire an additional, I think it was
almost 300 individuals at the FHEO.
Ms. Robertson. Yes, sir.
Mr. Rutherford. And I would assume that would be to help
mitigate and eliminate some of these gaps?
Ms. Robertson. Right, to replace retirees, to make certain
that programs are running efficiently. Also to make certain
that when you look at the significant backlog of its own
complaints, for HUD to be able to investigate and process its
own complaints to resolution.
Mr. Rutherford. Thank you. I see my time has expired, Mr.
Chairman. I yield back.
Mr. Price. Thank you. Mr. Aguilar.
Mr. Aguilar. Thank you, Mr. Chairman. Ms. Aranda, I wanted
to dive back into the paired testing discussion in your
testimony. Can you go into more detail about the experience
that immigrants with limited English-speaking abilities face
and what were their experiences, and what guidance can the
committee provide to HUD to make housing more accessible to
these populations?
Ms. Aranda. Thank you for the question, and I just wanted
to point out that so far we actually haven't done any paired
testing studies that focus on immigrants or individuals with
limited English capacity. That is certainly one of the groups
that we identify as potentially being a group that we would
focus on in future work and that we would certainly recommend
would be the subject of future work. But we haven't included
those groups so far.
Mr. Aguilar. What types of work can we do with HUD in order
to kind of dive deeper into the outcomes that you found with
paired testing?
Ms. Aranda. So one of the things that I think is important
to just note is that these studies that we have done over the
last decade beyond the national studies have been these pilot
studies, have also been exploratory studies that have been
really important first steps for HUD to take looking at
families with children, looking at voucher holders. Our study
on LGT community was actually 2 distinct studies. So it was a
pilot study focused on same-sex couples, but then also it was
an exploratory study looking at discrimination against
transgender people.
And so I think that we learned many things from that work,
but there are certainly many opportunities to be able to push
forward in that work in the study focused on transgender people
to be able to take some of those lessons, some of the initial
challenges that we faced in thinking about the safety concerns
for our testers and worrying about whether we needed to have
particular protocols in place to make sure that they had clear
procedures in case something happened to them in the course of
a test or they felt threatened in the course of a test.
And we work closely with advocacy organizations, with LGBT
organizations to develop these protocols and procedures. And so
the fact that there has been so much learning that has happened
in the course of this work, and then to be able to take that
and take the next step to be able to do a pilot study, to
develop estimates of discrimination in particular regions and
across the country, would, I think, be a very important
opportunity for further learning and for the Department to
take, and similarly to be able to do that based on what we have
learned from voucher holders, that voucher holders suffer
discrimination that when they are looking for housing in places
that have higher opportunities, that are low-poverty areas,
they face even more discrimination.
So the issue of whether it is really the case that voucher
holders, although in theory they should be able to take their
vouchers anywhere to be able to find housing, just the
challenge that it takes. We had to review many ads, hundreds of
thousands of ads, to be able to do the testing in the five
places where we conducted the study. And it took us on average
39 ads to find that seemed that it might be affordable for
someone with a voucher. In some places, it took more work than
that to be able to find an ad.
So just the level of effort that the housing search itself
takes is something that we have continued to see across all of
these studies. But particularly when we were looking in the
part of the market that would be affordable to a voucher
holder, that is something that was definitely underscored for
us of just the amount of effort, time that it takes. And then
ultimately, given the particular parameters of the voucher
search, of how long voucher holders are given, the fact that
they may end up in a neighborhood, they may end up in housing
that is not what they might want to try to be in. It is not
near good schools. It is not in a community with other services
that they might want, but they are put in a position where they
have to take what they have found because other housing with
more opportunities is not available to them. So I think these
have been important lessons, but they have also been important
first steps that have been taken.
Mr. Aguilar. Thank you. Thank you, Madam Chairman.
Mr. Price. Ms. Clark.
Ms. Clark. Thank you, Mr. Chairman, and thank you for both
your testimony today. Mrs. Robertson, I would like to go back
to some of the discussion of the guidance that was issued on
local nuisance ordinances. And studies have shown us that
domestic violence is the leading cause of homelessness for
women and children. According to a survey by the National
Center for Children and Poverty, 80 percent of women with
children experiencing homelessness are identified as survivors
of domestic violence.
So we have this sort of perfect storm forming with the
nuisance laws that we have seen and also the difficulty that
both of you have testified to around familial status. And that
is one of the most prevailing forms of discrimination that we
see. With the guidance that HUD has issued around nuisance
ordinances, have you seen that being used by local governments
and housing providers, and has it resulted in change that has
been positive for domestic violence survivors?
Ms. Robertson. In Broward County, they added the specific
protection for victims of domestic violence and stalking to its
local ordinance that is substantially equivalent to the Fair
Housing Act. I think that the training that is done with regard
to survivors of domestic violence and current victims specific
to the Violence Against Women Act and the requirements of
properties that are federally subsidized have been quite
effective in getting those changes.
I don't know that it was specifically the HUD guidance and
their reading of it, but I do believe that the work on the
ground that is done by fair housing organizations to train
housing providers with regard to their responsibilities to make
them aware of guidance and to also talk to them about best
practices in protecting victims. Another piece that I believe
fair housing organizations are able to address, for example, we
had a familial status and disability-related complaint at a
project-based Section 8 property in Miami Gardens. This are
fully-subsidized units throughout the property. But in just a
review of all of their rules, we were able to identify their
lack of protection for victims of domestic violence.
So I think that really what all of it ties back to for me
is the education and outreach that is important. That is most
important to raise awareness of victims of their rights, but
also housing providers about their responsibilities. And that
is what really translates itself into change. So in resolving a
complaint we are able to make certain that they put those
policies in place, that they train their employees, et cetera.
So I think that is what it really looks like when you start
to see change. It is that awareness that education and outreach
initiatives are part of or that they affect as well as taking a
look at holistically everything that limits housing opportunity
in the rules of the housing provider to address those things.
Ms. Clark. Great. Thank you. Do you have anything to add?
[Nonverbal response.]
Ms. Clark. Okay. I had a question for you. There has been a
lack of Secretary-initiated complaints coming out of this
Administration, and it has been an effective tool that has been
used by prior Administrations to combat systemic
discrimination, both Republican and Democratic administrations.
One example is in 2015, an agreement between HUD and the
Wisconsin-based Associated Bank where the bank paid $200
million in settlement for denying mortgage loans to African-
Americans. How do you see HUD's lack of these Secretary-
initiated cases as impacting the work of fair housing across
the country?
Ms. Aranda. I think it is certainly like disparate impact,
like the AFFH rule. I think it is an important tool, and we
certainly agree and include in our reports recommendations for
very vigorous enforcement. And so I think it is another
important tool.
Ms. Clark. Thank you. Thank you, Mr. Chairman.
Mr. Price. Thank you. Ms. Aranda, I am going to pick up
right where you left off and where we left off in the first
round because I would like to give you the chance to comment on
the various trends we have seen in HUD over the last 2 years
and if you can detect direct impacts. And then maybe a little
more broadly what kind of changes you have seen in
discrimination trends, however you would account for them, and
these new forms of discrimination that we have heard about, and
what is required to deal with those.
Ms. Aranda. No. Thank you for the question and the
opportunity to return to your first question where I think
everything that you named--AFFH, disparate impact, the LGBT
guidance--all of those key issues and tools being really
important in being able to combat ongoing discrimination, but
also to address the effects of past discrimination, past
exclusionary policies.
And so I did want to say a little bit more about the
implementation of the AFFH rule because we have included in our
all of our reports the recommendation of the fact that
jurisdictions across the country, in order to be able to combat
the past effects of these exclusionary practices, need to be
able to approach it very holistically. And so it doesn't
include just enforcement based on complaints that come in. It
is not just about doing additional outreach, and we certainly
recommend the increased outreach not only to housing providers
about the law because we have seen over time the impact that
litigation and then the education that becomes sort of
compulsory afterwards, that that seems to have played a role in
decreasing the level of discrimination, certainly the overt
discrimination.
So in terms of the AFFH rule, that the initial
implementation and the lessons that we have seen from the
initial cohort of jurisdictions that actually began to
implement this new planning process, that they benefited from
not only some of the specific guidance, but also some of the
technical assistance that was provided as part of the
implementation of the rule, and what that led them to do as far
as community outreach, community engagement, and really
reflecting diverse communities, the communities that Mrs.
Robertson talked that she works with in Miami, to have them
reflected in the planning processes and the thinking about what
can be done in a particular jurisdiction to not only combat
what continues to happen, but what has happened in the past,
the levels of segregation that we have continued to see in
communities across the country.
These are hard things to combat. And so the fact that this
planning process really has given in the initial implementation
of the rule a path for communities to be able to follow. And I
think we began to see, however limited a time frame we have, we
began to see the impact of some of that.
But to your question about what discrimination continues to
look like in these sort of emerging forms, one of the issues
that I think is really important is related to what we have
continued to see and that I mentioned about the challenge of
the housing search process. And all of the different modes in
which home seekers may be communicating with landlords, may be
communicating with housing providers, the different ways that
they may receive information. So we have certainly seen as
prospective renters looking for housing, that they may be
initially emailing in response to an ad that is posted online,
but then they may receive a message from a prospective landlord
saying, why don't you text me, and then I will send the link to
the updated posting. And the landlord may call the prospective
renter and then may say, why don't you fill out this form
online.
And so all the different ways that people are receiving
information or not receiving responses then to their requests,
all the ways that they may be looking for information, that the
housing search process is much more complicated. And all of
these different modes provide opportunities for landlords to
limit the response, to limit information based on what they are
able to learn about a particular person based on what
information may be available to them, and some kind of a credit
screening or background check. And one of the things that we
have seen over time is apartment complexes that may not even
make an appointment with you until you go through an initial
screening process. So just the different challenges that we
have continued to see in getting access to information.
Mr. Price. Thank you. Mr. Diaz-Balart.
Mr. Diaz-Balart. Mr. Chairman, thank you very much. When I
think of, you know, obviously the issue of discrimination,
which is such an important issue, you know, I always think back
about how fortunate we are to have a Secretary of HUD, somebody
who's history and life is an example to all of us as to how to
move forward despite all of one's challenges.
Let me kind of go into an issue that obviously much of
HUD's fair housing work is delegated to the States and local
levels to the fair housing assistance programs. Now, I know
that neither of you work directly with this particular program,
but your work touches some of the same issues and challenges,
frankly, faced by FHAP organizations. So while I have you here,
and I want to take advantage of it, could you, both of us, give
us your views on how well that program works? What are some of
the challenges faced by these organizations as they carry out
their mandates? It may be a little unfair to kind of ask you to
do that, but I am going to take advantage of having both of
you.
Ms. Robertson. Yeah, we actually work closely with those
programs. We work in partnership with HUD as well as our local
FHAP agencies. I was just in Tampa yesterday conducting a
training for recipients of Federal funding along with the City
of Tampa, who happens to be a fair housing assistance program.
I believe that the same funding issues exist for FHAP
organizations. I believe that the time that they invest in
their investigations and bringing their complaints to
resolution require increased funding. In order to be efficient
they also require adequate staffing in order to conduct their
investigations timely and thoroughly. And also for them to be
able to conduct any type of outreach or marketing to let their
communities know that they are a resource for individuals to
file complaints, you know, for them to know who they are and
what they do. And we certainly include that in the work that we
do.
And that is why the partnerships are so very important
because we all work together to make the most efficient and
impactful use of what we consider to be limited funds.
Mr. Diaz-Balart. And, Ms. Aranda, do you want to comment on
that as well?
Ms. Aranda. So we don't work directly with FHAPs and
haven't in our work, but certainly in looking at complaint data
overall continue to see the important role that they play and
that they play in enforcement.
Mr. Diaz-Balart. And so, Ms. Robertson, you were talking
about this, I don't know if it is more a challenge in fair
housing, you know, access to folks with personal disabilities,
but you were also talking about families with children. Is that
something that you are seeing more of?
Ms. Robertson. I think it has been a consistent issue.
While disability has overtaken race in many instances as the
most common form of discrimination----
Mr. Diaz-Balart. That is an interesting statement you just
made.
Ms. Robertson. Oh yeah, but as you look at the work that
HOPE has done and even some of the litigation that we have been
involved in, the discrimination against families with children
is quite prevalent. It comes in different forms. And we already
talked about disparate impact with regard to rules, but there
are also just discriminatory rules period. We have seen, and I
want to add to Ms. Clark's questions regarding realtors.
For example, we received a complaint from a realtor who was
seeking housing for her client, a rental property. And when
contacting a listing agent, MLS and in the text exchange was
told, the owner doesn't want any children. And we also received
another complaint out of Bell Harbor. There was a gentleman
looking for a unit to rent, and the realtors when you called
them up, we do testing as well. We do responsive testing to
complaints, and we substantiated the fact that the realtors
were enforcing the no children rule. And they felt that because
it was the owner's desire not to have children, it was okay as
a real estate professional to enforce that particular desire of
the owner.
We have no children allowed on the second floor for safety
reasons, pregnant women evicted, and then rules and regulations
that don't allow children's things to be present on a property,
that don't allow them to play in common areas, parking lot, on
your balcony or anywhere that anybody can see you. The
requiring of report cards for children as like character
references or background checks for kids is something that has
also been seen not just in that example that I gave. There was
a case that came out of Palm Beach County as well.
So families with children I believe experience, and also
different terms and conditions, pools that they can't use or
restrictive hours where the pool is only open Monday through
Friday 9 to 5 when the kids are at school in their after-school
programs, that sort of thing. So the effect of discrimination
on families with children I think is definitely more prevalent
than people realize and takes effect in many different forms
that we have to continue to attack.
Mr. Diaz-Balart. Thank you, Mr. Chairman.
Mr. Price. Thank you. Mr. Rutherford.
Mr. Rutherford. Thank you, Mr. Chair. Ms. Aranda, when we
were talking about the difficulty with the folks with vouchers,
and in your testimony it talks about extending the Search
Assistance Program from 60 to 120 days. And I am not familiar
with this, quite frankly. So is that a rule that FHAP passes
down and all of the assistance programs follow that rule? How
does that work?
Ms. Aranda. So the search times, and this is part of the
rule for Housing Choice Vouchers. Those are the particular
vouchers that we were looking at, and so that is the time frame
that is then required and it has to sort of be enforced by the
housing authorities. If they are a part of particular different
kinds of programs, there may be some leniency that they are
able to apply.
But essentially, and you may know already, that in so many
places there are very long wait lists for people trying to get
a voucher. Some of those wait lists, many of them have
essentially been closed for a very long time because there
haven't been new vouchers to be able to issue. And so if you
are able to get access to a voucher, you have this particular
window of time to be able to use it. If you can't use it, then
you lose it. And so it is the issue then of as I described the
challenge of finding housing that meets their needs.
Mr. Rutherford. Can't we simply change the rule?
Ms. Aranda. So the rule can certainly be changed.
Mr. Rutherford. Let's change it. [Laughter.]
It doesn't take a law, right? I mean, it doesn't take an
act of Congress to change that, does it?
Ms. Aranda. And I think that is right, and I think there
are other rules related to the Voucher Program that also could
provide tremendous support to voucher holders to be able to use
their voucher in the way that it is intended. And one of the
things that we talk about in the report is certainly to be able
to provide housing search assistance. There are public housing
authorities that struggle to be able to provide a list to
people, but it is the issue of continuing to expand outreach to
landlords as well, to be able to provide better sort of service
and support to them so that that is a way of also bringing them
into the program.
Mr. Rutherford. You mentioned in the paired testing that
you find the discrimination, but you don't really necessarily
know why they are doing what they are doing. And I think that
is a very good question to ask because they are property
owners. They have concerns. They want to protect against, for
example, it was mentioned earlier, the number of people that
can sleep in a room and that sort of thing. That is reasonable
to me because you don't want human trafficking. You don't want
other things that could be going on in a rental property that
someone owns.
What are we doing about looking into those circumstances
sometimes? That is evaluated, too, right, the property owners'
concerns?
Ms. Aranda. So this is an issue that we feel there is a lot
more learning to do, and there has been some recent work that
does do some interviews of landlords to better understand the
challenge. You may know that the Secretary also launched in
response actually to our findings on the voucher study,
launched a landlord task force that has had some initial
meetings around the country and encourage landlords to come and
talk about their experiences, so the experiences that some
report of having concerns about receiving payments on time from
a particular housing authority, the issue what screening they
are able to do of voucher holders.
So I think that that is something that we have started to
learn a little bit more, but on the whole the methodology
doesn't really allow us to learn more about that. I think that
would be an important next step.
Mr. Rutherford. I also appreciate your intent to, you know,
go out and actually proactively search for landlords that would
be willing to take vouchers. I know we did the same thing with
felons coming out of prison. We went to businesses and asked,
you know, would you consider, and gave them all the information
on why it really is a good idea to hire this convicted felon.
And so I see my time is up, and thank you very much for what
you are doing. I yield back.
Mr. Price. Thank you, and I am going to turn the gavel over
to Ms. Torres. It is her turn to question, and I have another
hearing I meant to check in on.
Mrs. Torres [presiding]. Thank you, Mr. Chairman, and good
morning. I am bouncing back and forth in between meetings, so I
apologize if I ask something that has previously been covered,
maybe not exactly to the extent that I am interested in hearing
a response.
You should know that in 2005, I had a devastating fire. I
lost everything that I owned. I checked into a hotel with
nothing but the clothes that I had on. My oldest son had no
shirt on, and my youngest son didn't have shoes on. Everything
was lost completely. At 3 a.m. checking into a hotel, little
did I know what I would experience in trying to house myself
and my children.
When landlords refer to teenage sons as ``how many of those
do you have,'' at first I was shocked because I thought, like,
what are they referring to, and then I realized he's talking
about a human being. I said, oh, you are talking about the
young man that is with me. I have three of those. And add a pet
to that liability, it is impossible. It is impossible. So we
lived in a hotel for several months, and then we had to pay
almost double what the house, the rental would have been
because of the liabilities that I had.
So discrimination is real. Discrimination is very, very
difficult to prove. For us it was a terrible experience, not
just trying to deal with landlords, but trying to deal with
school districts that all of a sudden because I did not have a
permanent residence, my children did not belong in that same
school district. So all of those things are very difficult. It
is no wonder why we have a homelessness epidemic. It is no
wonder why so many people are sleeping in the streets every
single night.
So of the complaints that you receive and of the complaints
that you have filed with Secretary Carson's office, what are
you getting back? Are you getting responses? I mean, what is
happening there?
Ms. Robertson. I most recently was talking about a
complaint that we filed that was actually received from a
realtor regarding another realtor. We had also filed, I don't
believe this was with Secretary Carson, but Region 4, HUD's
office, with a project-based Section 8 property. What you end
up getting is your intake. Fair housing agencies are able to
put together complaints that are concise and guaranteed to be
jurisdictional so that they are efficiently and quickly
processed by HUD. We can help victims put theirs together that
way as well. That assists HUD also in weeding through
allegations.
You receive back their words of what they believe your
complaint is and how it fits into what a fair housing violation
may be or that which is jurisdictional under the act for them
to investigate. There you are assigned to an investigator, and
then you are also offered the opportunity to conciliate or
negotiate the resolution of the complaint. Both parties have to
agree.
Mrs. Torres. But for a person with disabilities, for
example, that may need some accommodations, right, a wider door
maybe, it doesn't have to be changing the entire facade of a
building.
Ms. Robertson. What does that one look like?
Mrs. Torres. What does that one look like?
Ms. Robertson. So immediate needs, an earlier example was a
woman whose lease wasn't going to be renewed. That is an
emergency situation. We actually work with private, nonprofit
cooperating attorneys. You can file a lawsuit and a HUD
complaint at the same time. So if we have the immediate need of
preserving housing, acquiring housing, or an accommodation
because sometimes for a person needing a reasonable
accommodation or even a modification, life could be at risk as
well as health, and other safety issues come into play.
So I was describing to you an administrative process, you
know.
Mrs. Torres. Right.
Ms. Robertson. So we are able to take on different
approaches in terms of the people we serve to get them
immediate assistance when something is on fire, so to speak.
HUD, they do offer the availability of immediate action. We
have not utilized that because you are still going through a
process. For me, I am a real person on the ground dealing with
a real issue and a family that has got to stay right now. So
whoever can get help to them the quickest, that is the
connection we are making.
Mrs. Torres. My time is up, but I would love to follow up
with you more on this issue.
Ms. Robertson. Absolutely.
Mrs. Torres. I am going to now turn it over to Ranking
Member Diaz-Balart.
Mr. Diaz-Balart. Madam Chairman, thank you. I actually
don't have any more questions, but I do want to take the
opportunity to thank both of you for being here. I think your
testimony has been, frankly, very helpful to us, and I look
forward to continuing to working with you. Thank you for being
here and thanks for your testimony. Very helpful. Thank you,
Madam Chairwoman.
Mrs. Torres. Congressman Rutherford? No? Okay. Great. And I
think I am okay. I am not going to keep you here any longer,
but I would again like to follow up with you. Thank you so much
to the both of you for your testimony. This is a critical
issue. I am afraid that once you being to negotiate as a victim
of housing discrimination, the only way to negotiate is your
rights away. And you are on the front lines of ensuring that
that doesn't happen, and I appreciate your work very much.
And with that, the hearing is now adjourned. And I get to
do this. [Laughter.]
Thursday, March 7, 2019.
STAKEHOLDER PERSPECTIVES: AFFORDABLE HOUSING PRODUCTION
WITNESSES
SCOTT FARMER, EXECUTIVE DIRECTOR, NORTH CAROLINA HOUSING FINANCE AGENCY
ELLEN LURIE HOFFMAN, FEDERAL POLICY DIRECTOR, NATIONAL HOUSING TRUST
ANTHONY SCOTT, CHIEF EXECUTIVE OFFICER, DURHAM HOUSING AUTHORITY
Mr. Price. Good morning. The hearing will come to order.
Thanks for being here, everyone. We look forward to a
productive discussion on Affordable Housing Production, a very
timely topic.
I don't think it is an understatement to say there is a
housing crisis in our country. Many of the people affected by
this crisis are the most vulnerable among us, seniors, the
disabled, low-income families with children, veterans. But
increasingly, middle-income families, also, are being squeezed.
Studies from HUD and other sources indicate that more and
more families are struggling to pay rent. The cost for housing,
for transportation, for medicine and education keep increasing.
Amazingly, only one in four people at this moment, one in
four, eligible for Federal rental assistance can receive it
because of funding constraints. Now, we sometimes talk about
funding constraints like they are written in the stars,
actually they are not. It is a political failing. It is a
matter of political judgment. It is a matter of political
priority setting.
At a time when housing should be a front-burner issue we
seem to be falling further behind. It is not a reality any of
us should be comfortable with; in fact, it should force us to
ask tough questions about our values and priorities.
There are numerous factors that contribute to this crisis,
aging housing stock, rising rents, low vacancy rates, onerous
local zoning requirements, high unemployment in areas of
persistent poverty. The list goes on and on as all of you know.
We know the crisis spans geographic boundaries, both urban
and rural areas are suffering from an acute lack of affordable
housing. Meanwhile, producing and preserving these units has
become nearly impossible without government subsidies.
At the Federal level, this means flexible grant programs
like HOME and CDBG, which can act as gap funding. It also means
categorical programs like 202 for the elderly, 811 for people
with disabilities, and transformational grants, like Choice
Neighborhoods.
Other Federal funding streams for public housing and
project-based rental assistance to ensure millions of America
have a safe, decent place to call home.
On the tax side of the ledger, the low-income housing tax
credit remains an absolutely essential source of private equity
for new, affordable housing.
Unfortunately, the Trump administration's budget request
for the previous two fiscal years have been draconian, entirely
eliminating many of these categories of funding. But I am proud
that this subcommittee under the leadership of then Chairman,
Mario Diaz-Balart, rejected those cuts on a bipartisan basis,
and after last year's enactment of the Bipartisan Budget
Agreement to lift the spending gaps, we made some progress to
boost funding for some of these housing programs, including new
production, for example, under 202 and 811 for the first time
since 2011.
We must build on this progress. The consequences of failing
to reach consensus on the budget this year would be dire. At
least 10,000 units of public housing each are lost, private
properties utilize other Federal funding streams to maintain
affordability are increasingly vulnerable. Without an influx of
new resources and capital we won't make a dent in our national
affordable housing crisis.
Of course addressing this challenge isn't just about the
production of a unit, it is also about preserving our existing
stock that would otherwise fall into disrepair, or no longer
remain affordable.
How do we balance production and preservation? What Federal
funding steams and tools are most useful? How should Congress
prioritize investment in housing programs and make it easier
for housing providers to use them?
These are some of the questions I hope we can explore
today. And we have a panel that is well equipped to help us
with these questions.
Our slate of witnesses this morning includes Scott Farmer,
the Executive Director of the North Carolina Housing Finance
Agency; Ellen Lurie Hoffman, the Federal Policy Director of the
National Housing Trust; and Anthony Scott, the Chief Executive
Officer of the Durham North Carolina Housing Authority.
Each of these witnesses brings a unique perspective on
affordable housing production and preservation. I realize the
representation of North Carolina is a bit robust.
Mr. Diaz-Balart. How did that happen?
Mr. Price. Well, I don't know. We had a Miami witness last
week, you will remember. So we are happy to have robust
representation, and believe me, I am sure our other witness can
more than hold her own.
But these gentlemen are here for a reason. They are both
accomplished at what they do. They both have a story to tell,
and they have quite different perspectives; and not contrasting
but complementary perspectives on the questions that we are
raising here today. And so I wanted them both here, but I
assure you we will be inviting witnesses from any and all
states who can help us out in future hearings, in any way.
Thank you all for being here this morning. I would like to
recognize our Ranking Member for his opening statement.
Mr. Diaz-Balart. Mr. Chairman, first, let me thank you for
holding this hearing. And on a serious note, the Chairman has
put together a great list of witnesses. Not only for this
hearing, but others also.
And Mr. Chairman, on a serious note, I want to thank you
for doing that. The fact that they happen to be slightly heavy
in one part of the country, doesn't diminish the fact that you,
Mr. Chairman, have done a great job, and have been very fair.
So, I appreciate that.
Let me first welcome our witnesses. Your appearance today
here will offer us frankly three unique perspectives on the
challenges of preserving and expanding affordable housing
opportunities for the people of this country.
This work often happens in the communities back home, and
so again, this is going to be very, very important for us to
hear from you as we prepare our work for the FY 2020 Budget.
And Mr. Scott, as Public Housing Authority Director you
know you are a little bit unique. Right? You are not only a HUD
customer, but you are also a steward of HUD's resources, and so
we appreciate what you bring to the table today.
And Mr. Farmer, your perspective as the State Housing
Finance Agency is important for us to hear today. Each of the
State's Financing Agencies across the country is tasked with
leveraging millions, or frankly, potentially even billions of
dollars in housing tax credits, and bonds with the objective of
ensuring that families have affordable housing options.
Ms. Hoffman, we also look forward to hearing your views as
a representative of a national organization with the goal of
bringing, frankly, really complicated pieces together with a
unique focus on affordable housing preservation.
And so, thank you all for being here today. We look forward
to your testimony in this engagement.
As I have engaged with HUD's budget and programs over the
years, I have been struck by the fact that, as I have said
before, that the vast majority of HUD resources are deployed to
outside organizations, outside of HUD.
This includes public housing authorities, state and local
governments, non-profits and countless private organizations,
again including for for-profit entities. It is also important
to note that HUD resources often work in conjunction with tax
credits, bonds, and private equity.
So, when we evaluate HUD programs we should look at them as
part of a really network that involves decision-makers from
many sectors, government, nongovernmental, non-profit and for-
profit.
In recent years, when the Chairman and I have considered
the HUD budget, we first have to evaluate what it takes to just
preserve the housing options for the nearly 5 million
households that receive housing assistance.
And as the Chairman and I note every year, just to keep
pace with inflation we, in essence, have to just add about a
billion dollars each year, just to keep up; that is not new
people that is just to keep up. And it is a challenge. It is a
challenge to do so.
We have been in the fortunate position in the last 2 years
in particular to provide targeted increases for programs for
the disabled veterans, and the elderly, and recent increases in
CDBG and HOME.
Now I, however, appreciate the significant investments to
preserve or expand affordable housing units are really only
possible through tax credits and bonds. Often in conjunction
with HUD programs such as Section 8, project-based rental
systems, and home improvement partnerships.
So, again, I look forward to learning how these resources,
and these financial tools are deployed at the community level,
hearing about the important work that you all do. And I thank
you for being here. And I thank the Chairman for putting
together such a great panel.
Thank you, Mr. Chairman. I yield back.
Mr. Price. Thank you. All right. Let us begin. And Mr.
Farmer, we will start with you, and you will be followed by Ms.
Hoffman, and then Mr. Scott.
Our procedure is to ask you to speak for 5 minutes, and we
understand you may have a longer statement that we will put in
the record, and we will do that immediately following your oral
statement. But that will let us proceed quickly to questions
and to the exchange we want to have. Now, Mr. Farmer?
Mr. Farmer. Let me try that again. Chairman Price, Ranking
Member Diaz-Balart, and honorable members of the subcommittee,
my name is Scott Farmer, and I am the executive director of the
North Carolina Housing Finance Agency.
Thank you for the opportunity to share how state housing
finance agencies use Federal resources to leverage private
market resources to create and preserve affordable housing.
Among these programs are the HOME Investment Partnerships
Program, Community Development Block Grant Program, the
National Housing Trust Fund, tax exempt housing bonds, and the
low-income housing tax credit.
Nationally, State Housing Finance Agency have used these
and other resources to deliver more than $450 billion in
financing to purchase, build or rehabilitate more 7 million
homes and apartments.
Housing build strong communities, support families and
drives our Nation's economy. Housing contributes to social
mobility, educational attainment, and health care access and
outcomes, these and other benefits and largely unrealized in
the face of a nationwide affordable housing shortage, which is
most-acutely felt by low-income households as housing cost
outpace wages.
Construction costs have risen dramatically since the Great
Recession while Federal housing production resources have
stagnated, or in the case of HOME and CDBG, declined.
While recent increases are a positive step the 2019 HOME
appropriation is still 32 percent below the 2010 levels.
The housing shortage affects both homeowners and renters.
Many credit-worthy homebuyers are priced out, particularly
first-time homebuyers, who have struggled to obtain affordable
mortgages and save for a down payment.
Renters fare no better. Affordable apartments are scarce
with nearly half of the U.S. renters paying more than 30
percent of their income for housing.
In North Carolina only affordable home is available for
every eight low-income families. Back-to-back hurricanes have
exacerbated this situation hitting areas with already extreme
housing shortages and older housing stock.
The housing loss to these devastating storms cannot be
easily replaced. Decades-old home valued at $40,000 costs far
more to replace in 2019 dollars. Recognizing there is no single
solution, our Agency employs a range of resources to address
the needs.
Our Agency sells mortgage revenue bonds or MRBs to finance
low-cost mortgages and down payment assistance for low-income,
first-time homebuyers. Nationally, MRBs have helped more 3
million low-income buyers. We also invest HOME funds in
community-based homeownership programs, such as Habitat for
Humanity.
HOME is an important resource for Habitat affiliates
nationwide. HOME funds are also to rehabilitate existing homes,
stabilize communities and yield significant health savings by
keeping low-income seniors, veterans, and disabled homeowners
in their homes, and avoiding costly institutionalized care.
CDBG funds can also be used to make critical home repairs as
well as for infrastructure cost and single-family developments.
HOME is critical for making housing credit developments
feasible in rural communities where rents are not high enough
to cover building costs and replay loans.
In urban markets HOME allows for rents that are affordable
to lower-income households. Housing bonds used in conjunction
with housing credits have produced nearly 1 million units of
affordable housing to low-income families nationwide.
In 2018 our Agency awarded more 300 million in tax exempt
bonds for housing credit apartments, more than doubling the
affordable units financed by housing credits alone.
CDBG is also an important tool for housing credit
developments, as they can be used for eligible infrastructure
costs.
Federal funding is vital to the work of Housing Finance
Agencies, expanding housing credits and increasing other
Federal funding sources, would allow us to leverage private
market resources to address the most urgent housing needs to
our most vulnerable citizens.
Given the impact that housing has on local state and
national economies, and its influence on education and health
care outcomes, preserving and expanding successful programs
promises to deliver exceptional return on investment, our
Agency is proud of what has been accomplished for North
Carolina, and its citizens through the use of housing credits,
bonds and HOME.
We thank Congress for entrusting us with these resources,
and pledge to continue investing them with efficiency and
innovation to meet our State's housing needs.
Thank you for the opportunity to share our story.
Mr. Price. Thank you very much. Ms. Hoffman.
Ms. Hoffman. Good morning, Chairman Price, Ranking Member
Diaz-Balart, and distinguished members of the committee. Thank
you for the opportunity to testify today.
I am Ellen Lurie Hoffman, Federal Policy Director at the
National Housing Trust.
NHT is a National non-profit organization dedicated to
preserving and improving affordable rental housing, which we
pursue through real estate development, rehabilitation, finance
and policy advocacy. NHT has saved more than 36,000 affordable
homes in all 50 states leveraging more than $1.2 million in
financing.
I will limit my remarks today to the need to preserve the
Nation's affordable rental housing stock, or the late knowledge
that meeting our National housing needs will require both
preserving and building affordable housing.
First, I would like to tell the story of one property of
one property that NHT preserved as affordable. Friendship Court
is home to 150 low-income families in Charlottesville,
Virginia. In 2001 NHT acquired the property partnership with
Piedmont Housing Alliance, a regional non-profit housing
provider, amid strong concerns that its 150 apartments with
project-based rental assistance would be lost to market rate
conversion.
Today we are redeveloping Friendship Court using low-income
housing tax credits and local resources to maintain long-term
affordability and improve the property.
The redevelopment plan was designed in collaboration with
residents and the community and will expand the property onto
currently-vacant land, and add 200 new units of affordable and
workforce housing, creating and economic ladder for residents.
Located just blocks away from Charlottesville's Downtown
Pedestrian Mall, residents will benefit from robust job
opportunities nearby.
Without preservation it would undoubtedly have been
converted to market rate housing, becoming out of reach to low-
income families as luxury condominiums and hotels have sprouted
up nearby.
Friendship Court is home to the Martin family, comprised of
a single mother and six children who were able to escape
homelessness by moving to this poverty where they benefit from
onsite educational and recreational resources.
The story of Friendship Court's successful preservation and
the residents who benefit from it is far from unique. As rent
levels climb and income stagnate, our Nation faces a rental
housing affordability crisis, 11 million renter households pay
more half their incomes for housing.
Federal housing assistance serves just 25 percent of very
low-income renter households. The gap between supply and demand
for affordable rental units for very, very low-income household
is around 11 million. This shortfall could become much worse
because subsidized units with expiring housing assistance are
at risk of shifting to market rate. Affordability restrictions
on 533,000 low income housing tax credit units, 425,000 project
based Section 8 units, and 142,000 other subsidized units are
set to expire within the next 10 years placing over 1 million
households at risk of losing their affordable homes.
Current levels of new affordable multifamily construction
roughly 100,000 annually will replace only about half of what
is at risk of loss in the coming years. Falling far short of
meeting rising demand.
Preservation ensures that a property's housing subsidy and
rent restrictions remain in place ensuring long term
affordability. Often accomplished by mission driven developers,
preservation usually involves financial recapitalization and
physical renovation of a property.
The high cost of land, labor and materials all present
barriers to building more affordable housing. New construction
projects financed with housing credits have per unit total
development costs that are nearly $60,000 higher than rehab
projects. In contrast, preserving affordable housing costs 30
to 50 percent less than redeveloping new units.
Rising rents in hot markets increase incentives for owners
to opt out of housing programs. When properties become
affordable, just as neighborhoods improve, residents may be
displaced, missing out on the enhanced access to jobs, schools
and transit that comes with economic growth. Preservation
enables residents to benefit from these opportunities.
New construction of affordable housing often faces a
lengthy, local regulatory approval process and community
opposition. But preservation promotes equitable development in
high cost areas.
NIMBY opposition doesn't occur when existing properties
already familiar to community members are preserved as
affordable. Preserving affordable housing can catalyze the
revitalization of a distressed community reversing years of
neglect and sparking public, private investment. Everywhere
preservation protects the billions of tax payer dollars already
invested in affordable housing, maximizing he efficient use of
resources.
As described in my written statement, we asked Congress to
fully support Federal preservation tools including Project
Based Rental Assistance, the HOME Program, housing credits, RAD
and the Community Development Financial Institution Fund, as
well as the Family Self-sufficiency Program which helps
residents build assets and become economically mobile. Thank
you for the opportunity.
Mr. Price. Thank you for a very persuasive case for
preservation strategy. We appreciate your testimony. Mr. Scott.
Mr. Scott. Chairman Price, Ranking Member Diaz-Balart, and
members of this subcommittee, my name is Anthony Scott and I am
the Chief Executive officer of the Durham Housing Authority in
Durham, North Carolina.
I am here today representing the Council of Large Public
Housing Authorities which is a national nonprofit membership
organization. CLPHA members manage almost half of the Nation's
public housing and nearly one quarter of the Section 8 housing
choice voucher program.
CLPHA appreciates the subcommittee holding this hearing
looking at one of the most challenging, frustrating and
critical issues confronting our Nation today. That is
maximizing affordable housing production and combating the
critical housing shortage and housing instability facing our
Nation's most vulnerable and disadvantaged citizens.
Among housing authorities, we often face year's long
waiting list of families desperate for housing. When waiting
lists opens to families for unit's that come available,
thousands and tens of thousands of applications flood in. Often
times public housing is the last reasonable option before
homelessness.
The Administration record over the past 2 years is not
encouraging since budgets in proposals have been to eliminate,
zero out, drastically reduce funding for most affordable
housing programs. We are not hopeful that the soon to be
released 2020 budget proposal will be an improvement.
I want to touch upon some programs that we believe have and
can make real differences in people's lives. The public housing
capital funds. The capital needs backlog was estimated by HUD
at $26 billion 10 years ago. Current estimates by industry
stakeholders place that number at over $50 billion today. While
the boost in capital funding provided by Congress in both FY
'18 and FY '19 was a significant amount by most accounts and
gratefully received by housing authorities, it is still wholly
inadequate when compared against the annual accrual and backlog
need.
Housing Choice Vouchers. The Housing Choice Voucher Program
is an essential component providing much needed rental
assistance to the countries low income resident. The challenge
to voucher utilization is finding available housing. Vouchers
are important in addressing affordability, mobility and access
to high opportunity areas. However, landlords must be willing
to accept vouchers along with other Federal requirements it
entails.
The Choice Neighborhoods Initiative. Over 25 years ago when
HOPE 6 was first established, the program received funding in
the $5 to $600 million range to revitalize public housing
communities including producing affordable housing. Today we
are fortunate to muster $150 million for a successor of the
Choice Neighborhoods Initiative and that amount would not be
possible without the heroic efforts of Chairman Price, a
staunch supporter and defender of the program. As a national
program, CNI has tremendous potential that is lacking
sufficient resources, that is funds, to meet the need.
Rental Assistance Demonstration and the Low Income Housing
Tax Credit Program. RAD allows housing authorities to leverage
private capital in order to tackle the backlog in public
housing. However, the arbitrary unit cap under the program
creates artificial limits on unit conversions, interferes with
long term portfolio planning, impedes the allotment of
timeframes for additional funding sources, constrains and
prohibits developing a pipeline and hinders full portfolio
conversion over multiple years. What is now needed is a
complete elimination of the RAD cap at 455,000 units.
Moving to Work. The 20 plus year Moving to Work program has
served as a laboratory for innovation and flexibility and
program administration and utilization of program funding to
meet local needs. Many of its innovations have been adopted
into legislative and regulatory forms for all public housing.
Congress authorized an expansion of an additional 100 housing
authorities. We would like to see the expansion program have
the same flexibilities as their original 39 housing
authorities.
Further, given the successes created by MTW, we urge
Congress to allow selected and targeted flexibilities for
housing authorities short of full MTW status through a defined
statutory process.
Transforming and preserving public housing. We believe
Congress should take the steps necessary to enact statutory
changes to promote and enable sustainable operation in support
of the long term affordability of this portfolio. We have a
rare opportunity with modest targeted investments leveraging
private sector funding, partnerships and expertise where needed
to develop and implement a strategic plan to improve and secure
this critical public infrastructure once and for all.
The plan could foster deregulation, local control and more
flexible use of Federal, state, and local resource. It could
be--it could enable public housing providers to connect
residents to jobs, healthcare, educational opportunities to
better improve life outcomes for them and their families.
And finally, infrastructure. The Administration and
Congress had signaled that restoration of the Nation's
infrastructure is critical to our Nation's economic vitality,
health and safety. A significant Federal investment in
affordable housing infrastructure should be a top priority. And
CLPHA urges Congress to provide at least $20 billion in funding
to housing authorities for new, affordable housing and
infrastructure projects. Thank you for the opportunity to
testify today.
Mr. Price. Thank you. And thanks to all of you. You really
followed very closely the request we made of you to identify
the funding streams very concisely and helpfully I think as we
look at this budget. These are not necessarily interchangeable.
One size doesn't fit all. And the combinations that you put
together as you put these projects together look very complex
but there are patterns here that we need to understand and we
certainly need to understand what the critical components are.
And we are going to I am sure ask you in various ways to
elaborate on that.
I will start with you, Ms. Lurie Hoffman. You, as I have
said made a very convincing case for preservation as a cost
effective way to preserve housing but also to maintain the
overall stock of affordable housing, much more efficient way
when we can do it than when relying on new production.
I want to ask you to elaborate a bit on the funding
streams. How do housing providers mix the different funding
streams and the tax credits to engage in preservation
particularly?
The Project Based Rental Assistance, the HOME program of
course factor into these efforts and I wonder if maybe you can
give an example but help us understand a little bit better how
these pieces come together.
Ms. Hoffman. Sure, thank you, Mr. Chairman. So, you know,
when I try to explain the financing of the preservation of
affordable housing to congressional staff, many of whom I
recognize behind you, we often times--I often talk about a
layer cake. And Project Based Rental Assistance is sort of the
base of the cake. In many cases its affordably--subsidized
housing that has had long term contracts where it is privately
owned housing, private owners own the multifamily affordable
housing and they receive a contract, a long term contract from
HUD to keep the property--the units affordable to residents who
pay no more than 30 percent of their income for rent and are
meeting eligibility requirements according to their incomes.
In order--when that property is under risk of losing its
affordability, then the PBRA is able to leverage investment,
usually the Low Income Housing Tax Credit is needed to keep the
property affordable as you pointed out. And that can be done
with either the 9 percent of the 4 percent Low Income Housing
Tax Credit without getting into the weeds of that. But often
the housing credit alone is not enough to cover the cost of
recapitalizing a property, bringing it up to current physical
standards and ensuring the long term affordability. So other
sources of financing like the HOME program are needed as gap
financing to meet the overall costs. And in addition, often
times there is local sources, state and local governments have
their own resources that they can help to continue to fill
remaining gaps and private lending as well. So I know our real
estate development team puts together extremely complicated
packages. Often times the project based assistance is the basis
that the consistent flow of funding from the Federal Government
for project based rental assistance is critically important to
give lenders and private investors the security knowing that
they have a stable source to cover the basic rents.
Mr. Price. Thank you. That is very helpful. Let me turn to
you, Mr. Scott. I expected you to come in this morning as a
strong defender of RAD and sure enough, you did just that. Both
as an association spokesman but also reflecting I am sure on
your experience in Durham where you are undertaking large scale
RAD conversation.
Wonder if you could help us understand the potential of
that program to address the housing goals that we are dealing
with here today? Maybe some indication of how this looks to you
from the standpoint of your local position.
And also, how do we deal with some of the apprehensions
that people have had about RAD or how have you dealt with them?
You know, is the overall--we know the reasons for having
diverse communities so that they are not all at the same income
level, but at the same time, we don't want to displace people
of--at the lowest income levels. We don't want to have an
overall lesser supply of housing.
How does RAD work to, you know, realize its potential, its
virtues but also avoid some of the possible pitfalls?
Mr. Scott. Correct. I think that a lot of the questions
around the RAD program and its pitfalls largely through my
experience both being at the Baltimore Housing Authority and to
a lesser extent at Durham, had been with misinformation and not
understanding how the program works. When you look at the law
of the RAD program, it has a lot of protections built into it.
One of the chief issues that bubbled up early on in the
process in Baltimore was that there is no way that you could
get private sector investment in a public housing community and
they not want to kick out the existing residents. And we
stressed that in the law it states that that housing will be--
remain permanently affordable, that the housing authority has
to have an ownership interest in that development over time,
and that there is 1 for 1 replacement. And that replacement is
on a bedroom for bedroom size. Not just a unit. Like you can't
replace a 3 bedroom until with a 1 bedroom unit. You need to do
a bedroom for bedroom replacement of any units that you happen
to tear down if that is part of your plan.
So I think for us, we spent a lot of time trying to educate
the advocates that felt like this was really a land grip or an
opportunity to take public housing units and turn them into
market rate housing. And we did a lot of encouraging for those
advocates to read the law and understand what it says. There is
a provision that says that if people are still going to pay 30
percent of their income towards rent. So a lot of the same
characteristics of the public housing program are in fact
reflected in the RAD program.
On the extremely plus side, for housing authorities, what
you see is an opportunity to shift to a more stable funding
platform via the Section 8 program versus the Section 9 program
which is how public housing is traditionally funded. And you
also have flexibilities in how you can leverage those
properties to create a greater financial stability of that
development long term.
At the end of the day what the housing authorities are most
interested in doing is trying to create financial stability for
these public housing communities over the long haul. So one of
the challenges as we talked about early on is that we have
severely underfunded both on the operations side as well as the
capital side and that leads to ongoing deterioration of our
public housing units.
And through the RAD program, we create the opportunity for
greater stability over the long term so that those units can be
properly maintained and not in dealing with units being the
kinds of conditions that we see now.
Mr. Price. Thank you, very much. Mr. Diaz-Balart.
Mr. Diaz-Balart. Mr. Chairman, thank you. Let me stay on
the RAD motif if I may. So, Mr. Scott, you have been talking
about it. What are the critical needs that you are trying to
address through the RAD program? And what specific improvements
are you hoping to make to your PHA's properties using RAD? I
mean, how does that specifically work?
Mr. Scott. So we have two key approaches for us. Overall,
what our goal is to replace our existing public housing
communities with mixed income developments and the mixed income
again is an aim at trying to create greater financial stability
over the long term.
We also though had some properties in which we are doing
renovations of those buildings. And we typically are using 4
percent tax credits as the primary financing vehicle for that
along with bank financing and if we still find there is a gap,
we are looking to the local support for that such as the city
of Durham which has been a phenomenal partner for us in North
Carolina.
When you look at the capital needs that we have had and I
can give you some vey practical examples. So we are doing a
renovation of two different developments that totals 336 units.
The renovation costs for those units are well over $100,000.
We are looking at a different approach for our downtown
properties where we have 447 units on over 50 acres, they're
scattered, and we are doing a more robust, redevelopment of
those sites. And so we are able to take that development
because 50 acres and 447 units, that's a very low density and
we are turning that into 2500 units including the replacement
of the existing RAD properties, the existing public housing
units into RAD units. As well as adding an additional workforce
housing units and market rate units as well.
So by utilizing a RAD program, we're leveraging a property
that is in a significant state of disrepair to properties that
are adding 74 percent of which are affordable housing, 26
percent are market. We are also including over 270,000 square
feet of retail commercial space.
So we are able to leverage a property that is at a severe
disadvantage to becoming quite an advantage for the Durham
community.
Mr. Diaz-Balart. And you mentioned one of the partnerships.
Can you elaborate a little bit about on what are some of the
partnerships, you know, who are some of those partners that you
deal with on these type of projects?
Mr. Scott. In terms of development partners or just
financial partners?
Mr. Diaz-Balart. Both actually.
Mr. Scott. Right. So with our development plan, we are
engaging private sector and in some cases nonprofit sector
development partners that the developments that we have done
thus far, the renovation work that we are doing, we are
actually self-doing the renovation by our own organization. But
for the new construction redevelopment that we are doing, we so
far have engaged two partners. One is a for profit entity that
is--has properties nationwide. The other is a fairly local
partner who has properties in--who has done work in North
Carolina, in Virginia and others.
So each of these larger scale developments where we are
going to need stronger financial partners with greater
development expertise, we bring them in as partners to work
with us on the development of these new communities.
Mr. Diaz-Balart. Great. And I heard you talking about the
RAD caps and it might, I don't have a lot of time but if you
have other suggestions like that, again to improve, you know,
breaking down red tape and, you know, the administrative
burdens we would like to get those from you.
I think it would be helpful.
Mr. Scott. Well, one of the things that we feel very
strongly about because we are doing a portfolio wide
conversion, that is that our entire portfolio is going to be
converted under the RAD program. The way that the RAD program
works currently, there are time limits and time constraints.
Our objective is to be able to look at all of our portfolios at
one time. By doing so, we can leverage other development
opportunities because we can place other units with another
developer and that allows us to diversify our housing. The way
RAD is structured currently, it makes it very difficult to do
that because of the various time constraints. So, we end up
finding ourselves in a position where we can't fully leverage
opportunities throughout the larger Durham community.
Mr. Price. You know, get us as much specific information.
And, Mr. Farmer, I don't have a lot of time, but it would be
great if you could describe how the RAD program, how it factors
into your financing programs, and, you know, the ones sponsored
by your agency.
Mr. Farmer. Thank you very much. The RAD program we have
worked with, over half a dozen housing authorities across our
state in various ways with the RAD program, including the
Durham Housing Authority. I think one of the benefits of the
program is it has allowed them to sort of tailor it based on
their abilities and their needs. Some of the housing
authorities have handled the work directly themselves. Others
have worked with for-profit or nonprofit partners who have the
tax credit experience.
In our state, we have encouraged the use of 4 percent with
tax exempt bonds, primarily because we are already so far over-
subscribed on the 9 percent housing credit. It is a better
tool. It ensures that, you know, they don't run into those
timeframe issues with the 4 percent credits that they would
with the 9 percent, and it is a better pathway and they can
have more units done. One particular housing authority was able
to do I think it was 10 properties under 1 bond issue to get
the work going over a period of 2 to 3 years. We have had other
small housing authorities where they only had three properties,
but they were able to work with a for-profit development
partner who had the tax credit experience. They packaged those
together. It recast and refinanced those properties. They were
able to get the much needed rehab and get the units back online
and up to an upgraded condition.
We have tried to work closely with our housing authorities
in our state, So there is over a hundred housing authorities in
North Carolina. We had a meeting a little bit over a year ago
with a group of about 10 of those, just so that we identify and
know what is coming down the pipe. That helps us from a
planning standpoint.
To sort of piggyback on one of the things that Ellen
mentioned is, she mentioned layer cake. We always sort of refer
to it as lasagna financing. None of this happens--none of these
funding sources work on their own. So, you really have to
figure out how do you better leverage all of these different
resources off of each other to have the best outcome and have
the most efficient use of all of those resources. I think the
partnerships and the communication that we have in our state is
the reason why the RAD program has worked so well. And I hope
it will continue to work well in years to come.
Mr. Price. Thank you. Ms. Clark.
Ms. Clark. Thank you, Mr. Chairman, and thank you to the
panel for being here. I am a fan of both lasagna and layer
cake, so I am excited. In my district in the city of Cambridge,
they are also applying RAD to their entire portfolio. And I
wanted to follow up a little bit on the ranking member's
questions on what we can do to help remove some of the barriers
for success.
You mentioned, Mr. Scott, time limits and constraints that
can work against these large-scale projects and throw off the
timing of taking advantage of private development projects. Are
there other areas where you think, as Congress, we can help
improve this program and leverage greater funding?
Mr. Scott. Well, I think, you know, Scott had mentioned the
9 percent program. That is such a critical component for us to
be able to look at redevelopment of public housing. And for
many of us, it would be great if there is an effort around
looking at perhaps some particular financing in the 9 percent
realm that would allow housing authorities who are pursuing
RAD, particularly if there is a comprehensive approach to RAD,
and having some 9 percent funding being set aside that would
allow us to leverage those opportunities.
When I talk about leveraging, when we look at our plan for
our downtown properties, 52 percent of our financing for that
is normal bank financing, but 31, 32 percent of that is
actually utilizing either 9 percent or 4 percent tax credits.
Fifteen percent of that is going to be localized funding. So,
our city is stepping up there. They are calling for a housing
bond in order to support our redevelopment efforts. And a small
fraction, about 2 percent or so of that, is the housing
authority putting in the meager resources that we have, which
includes the land and funds that we have in reserves for the
properties, et cetera. So, it really is the lasagna, layer
cake, or perhaps parfait to use a Shrek reference----
Ms. Clark. To add a new desert.
Mr. Scott [continuing]. Is all a part of the struggle we
have in trying to pull it together, the financing package, to
make these deals successful.
Ms. Clark. Yeah. And just to follow up on the ranking
member, if there are more detailed suggestions, we would love
to work with you on how we can be helpful in making sure this
program really is creating those partnerships.
I have a question for Ms. Hoffman. I have been looking at
the extensive research of Raj Chetty on social mobilization and
really how much outcomes for children are determined by their
environment and where they are. Could you speak a little bit to
how preservation can be a tool to give low-income families a
better shot at economic mobility?
Ms. Hoffman. Absolutely. Thank you. As I mentioned in my
opening statement, preservation can be a way to help low-income
families live in high opportunity areas, as long as the housing
is not lost when neighborhoods improve. The Urban Institute did
a study a few years ago and they found that for project-based
rental assistance, the portfolio of properties with project-
based rental assistance, 43 percent of them are located in low
poverty areas. Now, that was not always necessarily the case
when the properties were originally built, but that is where we
are today. And just by maintaining that housing in those
communities, we enable residents to benefit from changes in
their communities. Like our property in Charlottesville that I
mentioned in our opening statement, Charlottesville was, I
think, a strong community when we purchased the property in
2001, but over the past 18 years, it has gotten more and more
gentrified. It obviously has terrific educational and job
opportunities. By keeping that property affordable, we let
those residents stay there and be able to benefit from the
improvements.
We have also preserved quite a few properties here in
Washington, DC, in neighborhoods that were really transitional
when we first purchased the properties and kept the subsidies
in place. Now, you know, many of us can't afford to live in
those neighborhoods. And there has been improvements in the
schools, to jobs, there is access to the transit.
So, you know, obviously we need to both build and preserve
housing, but if we can hang on to what we have in areas as they
improve and not lose them to being a converted--there is
obviously so much pressure right now to convert any affordable
rental housing to market rate housing because there is a huge
demand across every income level of the population for more
rental housing. But if we can maintain what we have as
affordable, then we can ensure that people who have been in
those properties for a long time can benefit from the changes
that are going on and can have access to the improvements.
Ms. Clark. Thank you, Mr. Chairman.
Mr. Price. Thank you. Mr. Womack.
Mr. Womack. Thank you, Mr. Chairman. Not lost on me is the
fact that this Carolina-centric panel and the timing of this
hearing in advance of the real heat of March Madness, so I
appreciate them being there. They will probably be a little
preoccupied here in a few weeks. And maybe the most important
question for Mr. Scott is when is Zion coming back?
Mr. Scott. Soon, I hope.
Mr. Womack. I know that to be the case. So, I am a former
mayor. And I have worked on some housing projects, mainly of
the 202 variety, which there seems to be an on--as the
population ages, obviously there is going to be a lot more need
for that type of housing, not so much on the 811, but
interested in it. So, when we were working with the two
specific projects that I had some interest in, the city came to
the table as a partner, primarily with good site locations,
which I know scores pretty well when they are ranked and
competing for these dollars.
So, what is the role of a municipal or a county government
to better leverage, that word has come up a couple of times in
the testimony today, to better leverage the Federal resources,
so that we have got a real true partnership going on here to
address these needs? It is not just our responsibility here. It
is also the responsibility of the local population to help
address its needs as well. So, how do we do that? How do we
leverage these resources and what is the role of the local
government?
You had mentioned--yeah, you can go first. You had
mentioned the Durham connection and how good they were with it.
So, what are they doing?
Mr. Scott. So, there are I would probably say three
categories in what our city is doing. First and foremost, they
have been looking at land that is city-owned that could be used
for housing. And they have asked us in our more comprehensive
planning to look at some sites that we could use to develop
housing on. And two of those sites are included in our downtown
planning.
Secondly, they have been instrumental in bringing together
various departments, such as the Community Development
Department, the Office of Workforce and Economic Development,
the Neighborhood Improvement Services, so that we can look at
how we are not just focused on bricks and mortar, but we are
focused on how we can help our families in public housing move
up and hopefully out of public housing by giving them
opportunities to connect with various social services,
opportunities to connect with jobs. Those are important
components that are necessary.
It is very similar to what you will see in the written
testimony where we talk about the ability for housing
authorities at the Federal level to connect with Departments of
Labor, Department of Education, Health and Human Services, et
cetera. Well, we are doing that at a local level and most
housing authorities are. It would be great if we can get that
same sort of initiative at the Federal level where those
departments are working more closely together so that it is not
just about the bricks and mortar. It is truly about the
families that are there, and hopefully we can create
environments, create support surrounding those families, so
that they are able to move out of public housing as a long-term
goal and other families who are desperately in need of that
housing can move in.
The third thing is that our city in particular is stepping
up in advocating for funding. So, in our efforts over the
last--in my tenure in the Durham Housing Authority, the city
has contributed literally millions of dollars to our efforts
for affordable housing. Also, more recently, our mayor has just
announced a request for a bond of $95 million and 68 million of
that is to support our overall long-term plan for redeveloping
our public housing.
Mr. Price. In order for this program to be more of the
layer cake or the lasagna, and not necessarily the tossed
salad, are there things that we are doing from a Federal
resource standpoint that we should do a little less of and a
little more of something else?
Mr. Farmer. I will be happy to chime in on that. I think
from the Federal level, I would say from the programs that we
work with is those that are the most flexible are the most
useful. It allows the states, who then work with the local
governments and the developers in those communities, to figure
out how those resources best match up with the type of
development you are trying to do. For example, the HOME program
is extremely flexible in what it can be used for and we use it
on the different types of properties. However, there are
strings attached to those dollars that make it more difficult
to use in rehab properties, for example, or preservation
properties than it is for new construction.
There is also some timing issues related to some of the
rules and regulations that prohibit or make it difficult to use
on single family units or on smaller properties where timing
and funding are critical. They are necessary. And a lot of
those rules, such as the environmental review processes, Davis-
Bacon, are important factors to have and include with the
Federal funding, but they don't work well on a small-scale
property where it may be four units in a small town in a rural
part of the state where the environmental review costs add 20
to 25 percent to the overall cost of the project.
If I may, to your question about the local government, I
would also highlight that whether it is a large community or a
small rural community, the best thing that they can do is be
advocates for affordable housing. Developers want to go where
they are wanted. So, by identifying land, sometimes it is
removing some of the impediments, streamlining the permitting
and review processes, primarily with the housing credit
program, because there is a timeline. Once those properties are
funded, they have basically 24 months to place in service. So,
anything that the local governments can do to help streamline
and identify sites, find the land, approach the developers. If
you want the housing, the best thing to do is make it
accessible and make it an easy process for them.
Mr. Womack. Thank you very much, Mr. Chairman.
Mr. Price. Thank you. Ms. Torres.
Ms. Torres. Thank you, Mr. Chairman, for holding this
hearing today. Affordable housing is something that all of our
communities are absolutely struggling to build and certainly
many of our taxpayers and voters are supporting bond measures
and opportunities to ensure that there is a local matching
funding mechanism to ensure that those funds are there
available to build affordable housing.
In many communities, the cost of construction has led
builders to only build high-cost housing, limiting access to
inventory for most Americans. In 2017, in San Bernardino
County, there were 65,000 extremely low-income households with
only 13,000 available units, the deficit of 52,000 units. And
this is according to a study by the Urban Institute Housing
Assistance Matters Imitative.
So, the lack of real wage growth to keep pace with the cost
of living has increased the number of people who are now
considered a cost burden when it comes to housing. The Harvard
Joint Center for Housing studies concluded that a 56.7 percent
share of renter households in the Riverside, San Bernardino,
Ontario metro area, which is the area that I represent, are
cost burdened and a 30.6 percent are severely cost burdened,
paying more than 50 percent of the income on housing.
During the meltdown of the economy and the foreclosure
crisis, the area that I represent was one of the hardest areas
that was hit. Housing credits, developers were not utilizing
housing credits and were shying away from them, you know,
because there wasn't enough money available.
So, how are the housing credits now being--is that in
popular demand once again as it was previously in the nineties,
for example? Can anyone speak to that?
Mr. Price. Scott can answer that one.
Mr. Farmer. I will take a shot at that one. Yes, the
housing credits are in high demand. There was a lull
immediately after the crash as many of the primary investors
were banks, large insurance companies, and others, who sort of
had to take a step back and see where they were going to be,
but I would say that the market is extremely strong now. Prices
have stabilized and so we are in a really good place. I think
there is plenty of demand. From a development standpoint, you
know, we--our applications, we are still receiving four
applications for every award that we can make. So I think the--
--
Ms. Torres. I just don't want to hang my hat on just that,
knowing, you know, that that is a vulnerable place.
Regarding the environmental review process, I was a local
mayor, too. And, unfortunately, a developer built homes in an
area on a hillside area where, 10 years later, 2 of the 30-some
units that were built in that area fell. So, we have to make
sure that we are holding folks to high standards, so that when
cities and taxpayers invest money in building this
infrastructure, it is not for a short period of time.
On the issue of manufactured homes, I see that as an option
for the affordable housing portfolio. Have you or any of you
explored affordable housing production through manufactured
housing? And if not, what are some of the barriers?
Mr. Scott. Not in Durham, but when I was head of the
Richmond Redevelopment Housing Authority in Virginia, we
actually did do a modular home development. And for us, we
looked at the cost. We looked at the efficiencies. And this was
pre-crash, right? So, the timing wasn't the best in terms of
where we were as we launched it, but we looked at it as a
viable opportunity in Virginia.
And it really is one of those things where you have to look
at it on a location-by-location basis to see if you have a
manufacturer that is nearby. For us, we had two that were
within about 3 hours' drive of where we were looking to build,
so that made it something that made a lot of sense.
And the other thing is that having the right contractors
who is the middle man between the manufacturer and what has to
be done on site. But I think it is definitely a viable way to
look at doing affordable housing but it also depends on who the
manufacturers are nearby.
Ms. Torres. Okay, thank you. I yield back.
Mr. Price. Thank you. Mr. Aguilar.
Mr. Aguilar. Thank you, Mr. Chairman. I wanted to ask the
panel a question homelessness and, again, getting a little bit
more geographically diverse with some West Coast examples. Over
130,000 of my fellow Californians are experiencing homelessness
or unstable conditions in shelters, in dilapidated trailers and
garages, in overcrowded rooms and closets and hallways.
Homelessness is an issue across this country.
This question is for Mr. Scott and Mr. Farmer. What role do
Homeless Assistance Grants play in helping reduce the homeless
populations in your regions? Are there policy recommendations
do you think Congress should give to HUD, so local housing
authorities can have more flexibility to maximize those
dollars, specific to Homelessness Assistance Grants?
Mr. Scott. So, for us, we have a strong partnership with
our local homeless organizations in Durham, so there is a
coalition of homeless providers, and what we have done is we
have targeted our voucher program to work with our homeless
providers. So, we have a certain number of vouchers that are
dedicated just to dealing with the homeless population, and
those providers will provide the wraparound services for that
homeless family to make sure that they are able to stay and
maintain that housing, and they are required to do that for at
least a year. We have seen a very low recidivism rate based on
that model.
Similarly, we did something like that in Richmond as well
when I was there. We actually provided a set-aside of units in
our public housing community, and we have a similar program in
Durham.
I think the voucher program is one of the best options
around that, in addition to perhaps--in our--from our
perspective, we have set aside some units. The key is making
sure they are the wraparound services, so that those homeless
families will--are able to maintain and keep their housing over
the long haul.
And I should point out that I spent 14 years in Southern
California, so a little of Southern California is being
represented out of North Carolina, too.
Mr. Aguilar. Appreciate it. Mr. Farmer.
Mr. Farmer. Yes, and I will add to that. The--within our
housing credit program, we have had what we refer to as the
Targeting and Key Program, which we have set aside 10 percent
of all of our units within housing credit developments,
beginning in 2003, for persons with disability or formerly
homeless. And with that, we work with our State Department of
Health and Human Services, and they work with those clients to
provide the services. They also are providing the rental
assistance for those units through our agency. So, it is--
basically, we will have--we have rental assistance available
until they are able to qualify either for Section 8 voucher or
some other type of assistance, as the bridge financing was the
design behind it.
Since 2003, we have housed over 5,800 folks with
disabilities or formerly homeless in those units.
We also work very closely with our homeless advocates
across the state, whether it be the rehab of existing shelters
or the development of transitional housing over the years. So,
it is an important piece, but, you know, I am stressing that
the rental assistance is really the key piece in helping those
folks to get over that hump and to bridge that to other
resources.
Mr. Aguilar. Thank you. I appreciate it. Ms. Lurie Hoffman,
my colleague, Ms. Torres, asked some questions about low-income
housing. According to the National Low Income Housing Coalition
in California, California has a shortage of over a million
rental units that are affordable and available to extreme low-
income renters, even for households making 100 percent of area
median income. This coalition reports that there are only 85
units available for every 100 renters.
At the national level, you know, we tend to see that the
most important and effective--you know, what are some of the
most effective ways to incentivize? You have mentioned a few in
your testimony. Can you elaborate on those to address,
specifically, the low- and moderate-income households?
Ms. Hoffman. Sure. You know, I talked in my oral statement
about preservation and, obviously, we think it is critically
important that we just preserve all of the affordable housing
we have, but that is not going to produce more units to address
the folks who are not being served. And Chairman Price
mentioned, you know, I think it comes down to what the
priorities are for funding and use of the tax code to
incentivize the production of more affordable housing.
I mean, I think at the end of the day, we need more
resources. Those resources from the Federal Government are
leveraged, as has been mentioned several times here, but, you
know, the Affordable Housing Credit Improvement Act, which
would expand the low-income housing tax credit with a 50
percent increase in the allocations in every state, is a very
strong bipartisan bill in the last Congress. We expect it to be
reintroduced in both the House and the Senate any day now, and
I think it is critically important to be able to both preserve
and build more housing.
It is the--we have talked a lot about the Low Income
Housing Tax Credit today. I would echo Scott in saying that it
is a flexible program that allows states and communities to
identify what their most pressing needs are, and to target the
resources to what the affordable housing needs. Every
community, every state is different, but there is a need for
affordable housing everywhere in this country, whether it is in
urban, rural, or suburban areas.
So, I mean, we think that that is a top priority that the
Federal Government really needs to embrace.
And then, of course, more funds for rental assistance. You
know, we have not--the project-based rental assistance program
at its inception was a construction--involved new construction.
We have not funded that in many, many years, and we are just
trying to hang on to enough resources to renew the existing
contracts. And I recognize that that has a big price tag and it
takes up a lot of the HUD budget, but if we were able to think,
you know, forward in this country and provide more rental
assistance that we can see how it is leveraging so much more
private investment to help really tackle the problem of
affordable housing. We need state and local governments to
help, too, with the zoning restrictions, but, I mean, those are
the big things.
Mr. Price. Thank you. Thank you very much. Mr. Quigley?
Mr. Quigley. Thank you, Mr. Chairman. So, I want you to
think small. Chicago, like a lot of other municipalities, is
experimenting with tiny homes, small homes, largely between 100
and 400 square feet that have electricity and internal
kitchens, but they share plumbing. It is an alternative to
shelter housing and can be permanent supportive housing for the
homeless, which provides safe, secure, and private structures.
I did talk about this directly with Secretary Carson, about
this possibility. He expressed some enthusiasm, but we have yet
to see any progress at that point in time. If you could, share
your experience to the extent you have it with us, and your
thoughts on this possibility?
Mr. Farmer. As luck would have it, we have funded two
small, supportive housing developments that are utilizing the
tiny house model. Neither of those have started construction
yet. Our funding--we provided that funding in the last 2 years,
and it is primarily the seed funding that would then allow them
to go forward and try and identify additional resources.
As you mentioned, I think it is a great option, or a
potential option, for homeless, formerly homeless. One of the
properties is designed for veterans, formerly homeless
veterans. The other is supportive housing for persons with
disabilities, as sort of that next step of housing.
Our agency's approach has long been to--there is a
continuum of housing and there is a continuum of ways that you
can do this. There is no one right way or wrong way. So, we are
anxious to see how this model works. I don't know that we will
be doing hundreds of tiny home communities across North
Carolina, but I certainly think it is an opportunity and an
option that may work well in some communities and for certain
populations, and we are anxious to see the results.
Mr. Scott. We are exploring tiny houses. We have some
interested folks in Durham that are looking to do that. So, our
role would be to look at our availability for land to provide
for folks to build the tiny houses on, and it is similar to
what Scott said, a focus being on veterans and homeless.
Mr. Quigley. Another alternate----
Mr. Hoffman. That is my area of expert----
Mr. Quigley. I am sorry.
Ms. Hoffman. So, I was just going to say I know you look
like you were looking for me, and we have not explored tiny
houses. Although we are very supportive of any efforts to
create energy efficient housing as--and I believe that is part
of the model.
Mr. Quigley. And also thinking small and in terms of
compared to larger units, single-room occupancy hotels. Chicago
is losing them, has been losing them for some time. I was
always taught that this is, you know, what has always been one
level above homeless, and your thoughts of where this country
is trending with this kind of supportive housing. Anyone?
Mr. Scott. We have no experience with that. Only when I was
in Southern California did we kind of look at SROs.
Mr. Farmer. We have not seen much interest or appetite in
single-room occupancy in the last few years. I think the--it
seems to be that from the development community side that it is
a more difficult--it is more of a transitional model. So,
therefore, you have higher turnover rates within those units.
And so they have looked to, even our supportive housing
programs, they have looked to use the more integrative
supportive housing model, where it would be units within an
existing property and provide services in a more permanent
setting as opposed to the single-room occupancy. But that is
certainly a tool that many local governments are still funding,
those type of developments on a smaller scale. But as I said
before, you know, there is a continuum of housing and all of
these tools work. Some work better in certain cases and with
certain programs than others.
Mr. Quigley. Yeah. I do not see a lot of development in
that area. I am just trying to keep what we have because,
again, if they are not there, they are in a shelter. So,
extraordinarily important for us.
Any other thoughts? Thank you very much. I yield back.
Thank you, Mr. Chairman.
Mr. Price. Thank you. Let me just underscore what we heard
over the last few exchanges about state and local cooperation.
It strikes me that this is a very, very important topic, and it
is not just a topic for us. It is a topic, if I may say so, for
the associations of housing authorities, for the associations
of county commissions, of city councils.
The story Mr. Scott tells of the cooperation between the
housing authority and the city, and the way the city has filled
some of the gaps. Unfortunately, that is not replicated
everywhere, and there is a good reason for the way housing
authorities are governed with their separate boards and so
forth, but we all know that can also be an obstacle to the kind
of cooperation that we need across jurisdictional boundaries.
So, I really think we need to underscore that, that these
cooperative arrangements need to be considered a very high
priority, and all of our cities and counties in--the major
cities and counties in North Carolina are facing these housing
challenges. It is the main issue in municipal elections by far,
and so we need to do some new things, and certainly integrating
the housing authorities into the effort and vice versa with our
municipal governments is critical.
Mr. Farmer, I want to give you a chance to say a little bit
more about the particular challenge of rural housing, and you
began to talk about that. You could be a little more explicit
about the distinctive approach that needs to be taken there,
what your experience is. And then I want to ask you to reflect
on something you and I both heard at a round table a couple of
weeks ago for people serving people with disabilities. This
really caught my attention and I am sure it caught your
attention.
We heard about the backlog of need, both for the group
homes and for vouchers for people with disabilities to live in
rental units. Thousands, thousands on the waiting list, and yet
we also heard that 200 available units were unoccupied, not
claimed And why was that? A lack of supportive services,
supportive services that involve funding from state agencies
and Medicaid that, of course, is not in the purview of this
subcommittee, but that got my attention, as I am sure it did
yours.
The situation illustrates an important point.
Even as we increase housing, we need to ensure that,
especially for the disabled, of course, but to some extent, for
other populations as well. There needs to be a corresponding
increase in services, be it workforce training or wraparound
services for the disabled or whatever it is.
So, I will start with you, Mr. Farmer, but anyone who wants
to comment on that, we, of course are mainly about housing
here, but housing is also about other things.
Mr. Farmer. Thank you. I will tackle the first question
there on the rural housing. Our state is a very diverse state
in terms of population, and the urban versus rural conversation
we have often. We make sure that our resources that are
distributed across all of those communities and counties--our
North Carolina Rural Center, we met with them earlier this
year, and they had done a tour of 80 counties across the state
that they work with, and in all 80 counties, affordable housing
was in one of their top priorities. So, it absolutely is an
issue in--across North Carolina.
As I mentioned in my opening remarks, for every one unit,
there is eight families waiting for that unit. So, we have a
great shortage of affordable housing. The differences are in
the rural communities, part of it is they have an aging housing
stock and an extremely--and which is of lower quality and less
availability, and many of those communities were hit by the
hurricanes, Matthew and then Florence. So, we lost a
significant number of units to that in those communities.
They also are seeing, while there is a decrease in
population, the cost of the housing has not gone down. The
cost, in fact, have increased. So, if you are in a lower
income, small community that has a need for 40 units or 48
units of housing, you cannot generate the rents from the cost
of that property, even with the housing credits, without then
also having some level of rental assistance or additional
subsidies.
In our state, we are very fortunate. We do have what is
called the Workforce Housing Loan Program, which is a state-
funded appropriation that allows us to put additional resources
into those rural properties to help lower those rents to make
them affordable, but, again, that only goes so far.
We also are still a fast-growing state. We were just--the
Raleigh area was just ranked as one of the fastest--top 10
rated cities in the country, which brings more and more folks
to North Carolina, which pushes more and more folks out into
those more rural areas to find affordable housing. So, we are
just stretched as thin as we can go.
As mentioned earlier, it is a--really is a resources game.
I realize the challenges that Congress has in trying to balance
out, you know, just--just as you mentioned, Ranking Member,
just to fund where we need to be would increase by a billion
dollars a year just to keep up with the rising cost of the
rental assistance programs and the other programs that we
operate in. And that is not even talking about trying to meet
the additional needs.
And so it is a challenge that we all face, but it is--at
the end of the day, it comes down to the resources available.
To your----
Mr. Price. Let me defer the answers. I will give any of you
who wish a chance to respond on the services issue, but my time
has expired. I will turn to the--I'll turn--no. We will come
back to it. I will turn to the ranking member.
Mr. Diaz-Balart. Thank you, Mr. Chairman. Let me talk a
little bit about--you know, you just mentioned, Mr. Farmer,
about how, again, growth, right? Growth is a factor there. And
so, obviously, high-growth neighborhoods can provide also
economic opportunities, right, and for families, but then their
families can be at risk of getting priced out, and then--as you
were mentioning, and obviously something that we do not want to
see. So, how do you--particularly, for example, when you are
dealing with project-based contracts, right, that they expire
and then, obviously, owners might be tempted to convert their
properties to market rates.
And so, let me go to you, Ms. Hoffman. What, you know, what
strategies would you recommend to maintain those properties
affordable? And you talked a little bit about that in your
opening statement, but if you want to elaborate a little bit
more on that.
Ms. Hoffman. Well, traditionally, the owner community that
has been--that has participated in project-based rental
assistance has been very stable. We always worry about opt-outs
because they have the, you know, legal opportunity to opt out.
I will say that having the consistent flow of funding is really
important, and, for example, you know, the shutdown, the
government shutdown that we recently had, where hundreds of
contracts were not renewed, is something that really scared us
in the affordable housing community because, first of all,
those property--there were properties whose contracts were not
being renewed that--where the owners really just had to cover
their expenses for an indefinite period of time. And high
capacity, nonprofit owners, like the National Housing Trust,
have reserves and resources that we can bring to bear, but some
owners are not--do not have the same resources to bring, and we
also did not know how long the shutdown was going to go on for.
So, obviously, we want to avoid that from happening again,
and, you know, the whole process where--which we have fallen
into with continuing resolutions. And I know, as appropriators,
that you both really do not, or all of you, do not want to
see--would like to get back to a normal order of business. But
renewing the contracts in a timely way, and giving owners the
reassurance that this funding is going to be there and that
their rental assistance is going to be provided on time and is
going to be consistently funded is critically important just to
reassure them that this is a good way to make their livelihood.
And then, you know, from there, it is just a question of
putting together--if--when properties need recapitalization,
when owners decide to recommit, they need to be able to put
together the layer cake of resources to preserve them. And that
gets back, again, to Federal resources, like the Low-Income
Housing Tax Credit and the HOME program, and then state and
local governments bringing in their own, and lenders. But it
all sort of rests on the stability of the rental assistance, I
think, at the base, and if people do not feel like maybe that
is so stable as it used to be, that that puts everything else
into jeopardy.
Mr. Diaz-Balart. Let me go--change a little bit to, so,
obviously when you have strong economic growth that you have
now, but also prices go up. And so, Mr. Farmer, you mentioned
how and then people moved to more rural areas, but That is
again, a lot of times were less opportunities or et cetera. So,
how do you keep people or how do you afford to have affordable
housing in areas where you have an economy That is booming,
people moving in, prices going up? Is there a way to keep
affordable housing in areas like that? And how do you do that?
Mr. Farmer. That is the challenge.
Mr. Diaz-Balart. What tools do you have and what do you do?
Mr. Farmer. Well, it is again, identifying the resources
that are available and a lot of this happens at the local
level. And you know, I will use Durham and both Raleigh as
examples where they have taken the approach of identifying land
within their own portfolios. Land cost is one of the biggest
drivers and can be one of the biggest costs of any type of
development. So, if they can bring--if they can sell land, or
if they have land that they will lease--long-term lease, 50
year lease, hundred year lease for this purpose, it lowers that
total development cost. The construction costs are pretty
consistent. Whether you are building in urban settings or rural
settings, that cost is not going to vary nearly as much as the
land and infrastructure. So, that is one important tool I would
say for sure. The other is just stacking these other resources
and you recognizing you are going to have to pay more on the
front end and bring those additional subsidies so that you can
keep those rents low to keep the housing available for the
school teachers; for the firefighters; for the police force.
Mr. Diaz-Balart. Right and there goes the lasagna or layer
cake that you both have talked about before. Thank you, Mr.
Chairman.
Mr. Price. Mr. Aguilar.
Mr. Aguilar. Thank you, Mr. Chairman. Ms. Hoffman, you were
just talking about stability and certainty with respect to the
CRs. I wanted to ask you a little bit about the Government shut
down as well. We just hit the longest Government shutdown in
history and during that time period, project based rental
assistance contracts expired forcing owners in some cases to
scramble to make the needed repairs and cover payments. I have
serious concerns about how this is going to discourage owners
from partnering with Government in the future. What impact do
you believe the shutdown a will have on future landlord
participation in this space and what do you think we can do to
repair that relationship?
Ms. Hoffman. Yeah, we are very concerned about that. We
were very concerned to at the time. Also, I would say that the
lack of communication from HUD during the shutdown and the fact
that we had been reassured that HUD would be able to continue
renewing contracts through the month of January and then all of
a sudden after the holidays, they told us they had not renewed
several weeks of contracts, hundreds of contracts in December
and could not renew anymore in January was quite alarming and
it was hard to get a consistent information from the leadership
at HUD. And we know that it was an unusual situation. It was a
CR that led into a shutdown that went on much longer than
anyone probably expected. But we are very, very concerned about
that having a shadow over owners who are thinking about whether
they want to continue to participate in the program. And I
mean, I think my message to Congress would be to just continue
providing the funding; do what you can in a bipartisan way to
try to get the budget process to work more smoothly and also to
ask HUD for information. And I know this subcommittee has asked
for quite a bit of information about what actually happened
during the shutdown from HUD and I think that one thing we all
learned is that there is a bit of a lack of transparency on the
contract renewal process and how funds are allocated. And it
would be helpful to have more information about how that works.
And also, at the hearing that the subcommittee had a few weeks
ago, the representatives from HUD pointed to a need for
improving the information technology systems at the Department
and we would certainly support that and there probably needs to
be an investment in that as well, so that the whole process is
done in a smoother and more state-of-the-art way. But the
investment is the most important thing that is going to keep
owners feeling comfortable that this is how they want to do
business and not be tempted to convert the properties to market
rate.
Mr. Aguilar. And I thank you. Mr. Scott, Mr. Farmer, on how
the shutdown impacted your work, if at all?
Mr. Farmer. Yeah, from our standpoint, it did not directly
impact any of the funding sources we had, but it had a
tremendous effects on some of our partners and the work that
they were doing. Whether it was waiting for multifamily
approvals for loans that were being underwritten by HUD or may
have had project-based contracts attached to them, to single
family home buyers who were waiting for IRS paperwork to be
approved and released. We had many loan closings that were
delayed for 30 days or more in people's lives were sitting in
storage units waiting to move into homes. So it--in the other
example I will share is that we had some of our housing
counseling organizations who relied on some of the HUD grants
and other funding that they had to shut down for a period of
time. So they were not able to help their clients that were
going through foreclosure counseling or a home buying
counseling. They had to shut down their operations or work
without pay for a period of time. So, our agency faired very
well, but our partners struggled through the shutdown for sure.
Mr. Aguilar. Mr. Scott, similar.
Mr. Scott. Well, one of the challenges that housing
authorities always have is a landlord participation in a
voucher program. And for those landlords that were on the
program, there was a lot of concern. We got a lot of calls. We
posted messages saying--giving them updates as we understood
them and largely trying to allay their fears. It would stop us
from being able to provide payments because one of the strong
selling points of the voucher program is that on the first of
the month their money is in the bank. And having that sort of
shadow over the heads was something that was a little bit
trying. And for those who are on the outside sort of deciding
rather they would like to participate in a program, this was
something that definitely a sort of set us back a bit. The
other issue is that, like Scott mentioned, we had several
things that were in the works that sat at HUD headquarters or
sat at HUD field offices that were literally delayed by that
timeframe. We had some loans that we are looking at. We had
some approvals for a project with Habitat that we are trying,
we have been trying to get off the ground for well over a year.
And so those delays have impacted us in being able to move
projects along timely.
Mr. Aguilar. Thank you so much. Appreciate it. Thank you,
Mr. Chairman.
Mr. Price. Thank you. We will have one final round,
although the noon hour has approached. If you will bear with
us, I think both Mr. Diaz-Balart, Mr. Aguilar, and I have some
final questions. I do want to return to the question of
wraparound services and the way that affects your ability to
place and keep people in affordable housing. And the way it may
be an independent factor in creating some of the shortfall we
are talking about if even if units become available, the
services are not there to enable people to occupy them. That is
clearly a major, major frustration that we need to address. And
it is not totally, of course, a Federal issue. So I would
welcome anybody else comment on that?
Mr. Farmer. Yeah, I apologize. It was not--I was going to
get to that question previously. Yeah, I was surprised to hear
the same remarks about the unused units. What I can tell you is
we are not a service provider, but we do partner with our State
Department of Health and Human Services and with many of the
managed care organizations who are responsible for providing
the services. And what I can tell you is services are critical
to the success of keeping people in housing. That is one of the
big challenges that we are facing right now with our targeting
programs and also with our community living programs where we
are housing persons with disabilities, trying to move them out
of institutional settings into integrated settings is they are
able to get into the housing, but maintaining that services and
maintaining them through that first year is critical. I cannot
answer the question as to whether or not it is simply a
resources question for services. I know that in conversations
that we have had in meetings that I have attended, one of the
challenges is that they are facing in that industry and is in
many others is finding qualified workers, enough qualified
workers, be able to provide the services. So, you face that
challenge of constant turnover. These are private sector
companies, but the having enough qualified workforce to be able
to work across the state in all these communities is going to
continue to be a challenge. There has got to be better ways.
Again, we do not provide the services, but we make sure that
those units are available and we do know for a fact that
services are critical to maintaining that housing long-term.
Mr. Price. Ms. Hoffman, excuse me.
Ms. Hoffman. Yes. I would like to add something about
services, not so much for the homeless folks transitioning out
of homeless, but as a way to help people in properties with
project-based rental assistance and other forms to be able to
become more economically mobile so that they can then move out
at the other end. And either become homeowners or move into
market rate housing. And that is just by pointing to the family
Self-Sufficiency Program, which has been around for a long time
for residents with voucher, with housing choice vouchers or in
public housing, but was recently permanently authorized for
properties with project-based rental assistance. And we think
it is a terrific program, which helps residents both develop
job skills and learn about financial literacy. The way that it
works is they sign a 5-year contract and agree to participate.
They set goals for themselves and they receive job training and
the support that they need to learn how to manage their
finances. And as their incomes rise there, instead of having
their rent go up as it would normally be the case in assisted
housing, the additional earnings are put into an escrow account
and as long as they participate in the program at the end they
receive the resources from the escrow account and they can use
it to achieve some of the goals, whether it is down payment on
a home or paying for education for someone in the family. It
has been a highly successful program. It has just been--it was
authorized as you I am sure know on an annual basis through the
appropriations bill. And there were a couple of nonprofit
developers, owners who have used the program very successfully
and we had great results. We are excited and think that a lot
more owners will come in and participate in FSS now that it is
permanently authorized. We do think that there is no funding
currently for resident service coordinators for properties with
project-based rental assistance and we hope that the
Appropriations Committee will consider a modest appropriation
to support that so, that we can--because currently, private
owners have to do their own fundraising to pay for service
coordinators. Given the success of the program and how
important it is so that people are cycling into housing--
assisted housing when they need it, but then are able to move
out. We hope that the Committee and Congress will consider an
increase in the appropriation for service coordinators to help
meet some of the additional need now for those properties with
project-based rental assistance. And I have a lot more details
in my written statement about that.
Mr. Price. Thank you. That is very helpful.
Mr. Aguilar. And I think that the supportive services is
the key for us to be able to see our families be at their
greatest level of success. When you look at some of the things
that we are doing when we talked about our downtown development
plan is $566 million, but 430 of that is actually a
construction and we are working with the city's Office of
Workforce and Economic Development, Durham Technical College,
as well as the Community Development Department to make sure
that we are going to provide folks and an on ramp to be able to
access those jobs. Because as Scott mentioned, there are a lot
of jobs in the triangle, but we are having a difficult time
having qualified people actually be able to get access to those
jobs. The supportive services will help keep them on track and
help support them in maintaining their stability and getting
and maintaining those jobs. Similar with the light rail project
as proposed for Durham, there are millions and millions of
dollars of jobs that will be associated with that. So when it
gets passed and we are working with Go Triangle to see that we
can have the residents of public housing make sure that they
have job opportunities there. Also with--there is a weird sort
of quirk with the RAD Program. With RAD, you are no longer
eligible for FSS in Ross in Jobs Plus. So, if you convert to
RAD those supportive programs go away and that actually does a
lot more harm than good. And we think that is something that
the Congress should look at when it comes to those programs and
supporting housing authorities that are converting to the RAD
program.
Mr. Price. Thank you for flagging that letter item. Well,
our time is expired. I am going to take another minute. I think
the answer to this will be short, not that I want to predispose
you in any way, but maybe this is in the department of
connecting the dots that are already pretty obvious, but the
basic situation we are facing here is awaiting the President's
budget. It is going to be before us soon. And we hope that past
is prologue, but if it goes the same way it has gone in the
last 2 years, we could anticipate some critical items being
eliminated. CDBG, Home Choice Neighborhoods, just as quickly as
possible. What would be the effect of that on the kind of
programs you have described here today? We have put those items
back in on a bipartisan basis here, but I just want to ask you
to make sure for the record, what be your disposition toward
this round of a budgeting?
Ms. Hoffman. I am just going to--you did not mention rental
assistance, but I will say it would be quickly devastating. The
rent reforms that the Administration has proposed for the last
two years would raise according to the Center on Budget and
Policy Priorities raise rents by more than $2 billion on nearly
1.8 million low income families. And there is much more
analysis, but the rent reforms that have been proposed in
association with the budget would increase the rents--
effectively increased rents on the lowest income Americans. It
is unclear what the objective of that is, but we think it would
be devastating.
Mr. Price. Thank you.
Mr. Farmer. Okay. I would echo those and the loss of the
Home and CDBG program would force the housing credit to serve
higher incomes and that range rather than the lower income
families that we are able to serve by utilizing those
resources. We pride ourselves on doing more with less, but
there is, without question, we would have less production of
additional affordable units in our state.
Mr. Scott. Well, in short, with an average rent of $238 in
our public housing communities, we would see clearly an
increase in homelessness. We would have to cut staff. We would
see a loss of public housing units. It really comes down to
being just at sample based on what has occurred, what has been
proposed over the last two years as we have done an analysis of
how it will impact our housing authority. We do not see how we
could, in any way, shape or form continue to function near the
levels that we are now.
Mr. Price. Thank you, Mr. Diaz-Balart.
Mr. Diaz-Balart. Mr. Chairman, thank you. Let me just throw
kind of a bit of an open-ended question about the 9 percent tax
credit versus a 4 percent tax credit. And if you can just
describe for us a little bit of the difference, different uses
of the 9 percent versus the 4 percent. And what are the
relative advantages or disadvantages of both of those? Why a
developer would choose one program over the other and also, if
you also can, so I get a bit of an open-ended question about
that, but also how does CDBG funding factor in, into the actual
how you deal with your tax credit programs. And so I do not
know who wants to take a stab at that.
Mr. Farmer. I will take the first shot at that. The primary
difference between the 4 percent and the 9 percent is really
the amount of the tax credit equity generated. One is, they
refer to it as a 70 percent credit and 30 percent credit. That
is almost how it balances out in terms of the equity side. On a
typical tax credit, a 9 percent deal, the private market
investment will generate between 60 and 70 percent or covers
between 60 and 70 percent of the cost of that property. For the
bonds, it is going to get you 20 to 30 percent. So you are
going to have--one is going to carry more debt or have to carry
more debt or find other subsidy sources to make those work.
From a competitive standpoint in our state at least, and it is
not true in all states, some states have a higher demand for
their bonds and they do for their nine percents, but in North
Carolina, we have less demand for the tax exempt bonds and 4
percent credits. So, we have tried to encourage and many of our
local governments are realizing that now and they are putting
more of their resources towards the bond program to assure they
have a better opportunity rather than it being a 1 in 4 shot,
basically if they can piece the deal together and fill in that
funding gap, they will be able to get that deal in the upcoming
cycle. To your question of CDBG funds, CDBG is one of the
sources that local governments often use as a gap filler for
housing credit properties. It can cover those eligible costs.
The easiest way to describe it is everything up until the time
you started to go vertical. So, any of the site and
infrastructure work bringing water and sewer, road
improvements, sidewalks, things like that. So, it is a critical
resource that sometimes the local governments will use that so
that it does not become part of the project development cost to
help lower their overall costs. So it is a critical resource
both in the urban areas as well as in our small cities. They
are able to tap into that resource at the state level as well.
Mr. Scott. And I would concur with that. It means the
difference between the 4 and the 9 is additional gap that is
needed to be filled.
Mr. Diaz-Balart. Mr. Chairman, changing the subject a
little bit going to what Mr. Aguilar was talking about, and I
think we have a lot of new Members of Congress and the House
and the shutdown I think hopefully illustrated a little bit of
why the appropriators always think that shutdowns are horrible.
I do not know if the rest of Congress understood that before. I
am hoping they do it now.
Mr. Price. We have got a good lesson.
Mr. Diaz-Balart. Right. Now, but what I am not sure is if
folks understand the difficulties with the CR, which you all
have talked about, have pointed out from time-to-time. And I
just bring that up, Mr. Chairman, because I think we kind of
assume as appropriators or whatever.
But I am not quite sure if they do and particularly with so
many numbers--new members and it is just kind of wanted to put
that out there as food for thought that one of the things that
we might want to consider doing. Really more of a full
subcommittee issue than a full committee issue than a
subcommittee issue, but we should try to educate our--
particularly so many new Members of the House as to why CRs, I
think shutdowns and maybe people understand, but I do not think
people understand that that CRs can be very detrimental, and
some may have a better understanding about why that is bad for
defense, but I do not know folks--our colleagues frankly, have
any ideas to how problematic they can be, Mr. Chairman.
Mr. Price. I appreciate those and we need to know a lot of
what it was said here in response to the question about the
shutdown applies at least to a major degree to a CR as well.
And to an environment of CRs where the uncertainty is great.
Mr. Diaz-Balart. And Mr. Chairman, I will just wind up by
saying despite what some of our colleagues were saying about
having it to a group that is too heavy on North Carolina, I
will tell you this has been a great, great, great panel. Thank
you all for being here. I think this has been very informative,
very positive and I thank you, Mr. Chairman for having this
hearing.
Mr. Price. Especially appreciate that observation because
I----
Mr. Diaz-Balart. I am always here to backup the Chairman.
Mr. Price. All right. I also am very appreciative and I do
not think I have seen a panel that I can recall where the
testimony was as complimentary as it has been this morning. You
have filled in our knowledge on lots of areas and I think the
length of the hearing and the tenor of the questions does
indicate that. So, we are very grateful to you. The committee
staff will be in touch with you after we conclude regarding any
questions anyone has for the record that you might be asked to
submit an elaboration for. And we would ask if you do get those
requests, that you return any response to the committee within
30 days, so we can be able to publish the transcript of today's
hearing. Any further comments? If not, we do really appreciate
everything that you have brought to us. We will try to reflect
on it as we prepare the next year's bill and with that our
subcommittee is adjourned. Thank you.
Tuesday, March 12, 2019.
STAKEHOLDER PERSPECTIVES: PASSENGER RAIL DEVELOPMENT
WITNESSES
STEPHEN GARDNER, SENIOR EXECUTIVE VICE PRESIDENT, COMMERCIAL, MARKETING
AND STRATEGY, AMTRAK
DJ MITCHELL, ASSISTANT VICE PRESIDENT, PASSENGER OPERATIONS, BNSF
RAILWAY
JASON ORTHNER, RAIL DIVISION DIRECTOR, NORTH CAROLINA DEPARTMENT OF
TRANSPORTATION
Mr. Price. Good morning, everyone. The subcommittee will
come to order.
Today we are going to hear testimony from a diverse group
of witnesses about passenger rail development.
Joining us are Jason Orthner, the Rail Division Director of
North Carolina Department of Transportation; Stephen Gardner
the Senior Executive Vice President of Commercial Marketing and
Strategy, Amtrak; and DJ Mitchell, the Assistant Vice President
of Passenger Operations, BNSF Railway. Thanks to each of you
for being here.
Inner city passenger rail moves millions of Americans every
year, and it serves as an economic engine for our rural and
urban communities. Rail service when running smoothly offers
passengers an extremely attractive travel option, compared to
car and aviation alternatives, especially over short and medium
distances.
While Amtrak provides the majority of passenger rail
service in the U.S. numerous States have stepped up with their
own funding and equipment to support specific routes and to
improve service and frequency.
Meanwhile, much of the track utilized by passenger trains
outside the Washington to Boston Northeast Corridor, are owned
by freight railroads, which must balance their operational
needs with accommodating passenger service.
We are interested to hear about the challenges and
opportunities facing all of our rail stakeholders, including
investment priorities, ongoing PTC implementation, that is
train control implementation, and the future of inner city
passenger rail.
The rail ecosystem is complex, and the various industry and
government entities operating within this system must work
together in order to achieve growth for the future.
In the last three fiscal years this subcommittee has
provided more than $1.6 billion in funding for inner city
passenger and freight rate improvements, through various grant
programs, authorized by the FAST Act. This amount is in
addition to our annual appropriation for Amtrak which just shy
of $2 billion in the 2018 and 2019 fiscal years.
These incremental investments build upon more than $10
billion allocated for high speed and inner city passenger rail
in the Recovery Act, and the fiscal 2010 Appropriations Bill.
Unfortunately, we faced a major gap in our commitment to rail
during the intervening years, but I do believe we are on a
stronger footing now. States like North Carolina and Washington
State, for example, have used Recovery Act dollars and
subsequent DOT grants on several major projects to improve
track, to separate at-grade crossings, to expand stations, and
to purchase signals and other equipment.
These investments in passenger rail not only improve
service, they help improve freight bottlenecks, they improve
safety in congested corridors, and they contribute to economic
growth. These and other success stories provide us with a
useful roadmap, but if we want to accelerate this progress and
replicate we are clearly going to need more funding, properly
targeted.
Maintenance needs to continue to grow particularly in the
aging Northeast Corridor, and establishing new passenger rail
corridors in the Southeast, Midwest and Gulf Coast, and other
regions will require major commitment from Congress.
At the same time we need to ensure that low-interest loans
and other innovative tools supplied by USDOT, such as private
activity bonds which Brightline has employed to build passenger
rail in Florida, remain viable for rail projects as a key
source of financing.
And finally, we need better coordination and cooperation
between, among, Amtrak, the States, and their freight rail
partners, particularly as freight and passenger traffic
continues to grow.
So, we have high hopes for this hearing. We want to
facilitate these working relationships and help inform our
subcommittee as we shift our attention to drafting the Fiscal
2020 Appropriations Bill.
Now, before going further I want to recognize our
distinguished Ranking Member, my friend Mr. Diaz-Balart, for
his opening statement.
Mr. Diaz-Balart. Mr. Chairman, Mr. Price, again, thank you
for calling this hearing and giving our members a chance to
discuss passenger rail, which is so critical to our Nation's
economy, and to the wellbeing of our citizens.
I would like to welcome our distinguished witnesses, and
thank you, the three of you for appearing in front of us today.
The three of you oversee major portions of our Nation's rail,
transportation network, together your organizations are
responsible for the moving of millions of passengers, and
billions of dollars of commodities and products.
And Mr. Gardner you appeared before the subcommittee just
last year, and we look forward to hearing from you again,
Amtrak has a unique status.
As you know, Mr. Chairman, as a private corporation with a
mandate to serve the public, a very unique situation, we are of
course are interested in hearing about how you deploy the
resources made available by the subcommittee, but also we are
interested in hearing about your vision for the future, and
what you see in the future for passenger rail in our country.
Mr. Orthner, I look forward to hearing your perspectives as
a transportation leader, from the chairman's State. Your
perspective from North Carolina is important to us, not only
because you are from the chairman's state, but that is not to
be underestimated either, undervalued, but for obvious reasons.
Look, you have overseen some significant growth in passenger
rail service in years, and the last number of years.
And Mr. Mitchell, your perspective from BNSF can help us
understand that close, very unique relationship between freight
and rail. The role of freight rail is obviously huge to our
economy, to our country, and that is less obvious, but
critically important is that role in housing passenger rail on
your lines.
And so I look forward to learning how we ensure that both
freight passenger rails can thrive in the future, and to make
sure that our economy continues to grow.
And so again, the chairman and I have been fortunate in
this friendship and partnership, to actually make some
strategic investments in infrastructure, in our inner city
communities' bills, particularly the last two years, rail
investment has been a key part of this, with historic new
funding for the Northeast Corridor, a state of good repair Mr.
Chairman, repair grants, and consolidated rail infrastructure
safety grants, however, the investment in Federal dollars is
just one piece of the puzzle.
Linking the Federal resources to innovation and with public
and private partnerships will be a key to building our future,
our real infrastructure for the next generation.
I look forward to hearing from each of you on these
challenges. Mr. Chairman, thank you for putting together I
think a great hearing. And I yield back.
Mr. Price. Thank you very much. All right, we will get on
with our witnesses. We will as each of you to speak for 5
minutes, to give your oral testimony for 5 minutes. Your fuller
statements will all be included in the record.
Let us start with Mr. Orthner, followed by Mr. Gardner, and
then Mr. Mitchell. Mr. Orthner, you are recognized.
Mr. Orthner. Good morning. And thank you, Chairman Price;
and Ranking Member Diaz-Balart, and all the members of this
committee for holding this hearing to discuss passenger rail as
an important component of our national transportation system.
My name is Jason Orthner, and I serve as the Rail Division
Director for the North Carolina Department of Transportation.
Our Department actively supports the health of the rail system
through a number of freight passenger and rail safety programs.
These include programs to boost the conflicts between
highways and rail, modernize and improve tracks and signals,
facilitate rail access for new and expanding industries and
educate the public and law enforcement on rail safety.
We also support a successful inner city passenger rail
system with service extending into neighboring states and
beyond. We have 16 passenger stations located in large cities
in small towns from populations of 6,000 to over 800,000.
These stations serve as access points for our national
transportation system, and are also centers of economic growth
in the communities they serve. Our state is one of the fastest-
growing in the nation and is anticipated to add 2.4 million
residents by 2038. Much of this growth is anticipated to occur
along work orders near stations.
As highways and airports become more congested and more
difficult and costly to expand, investing in effective and
productive transportation along a separate network will
increase mobility between rural and urban centers, maintain
highway capacity and allow for economic expansion.
North Carolina is one of 18 states that support passenger
rail service with a focus in providing safe, efficient and
frequent service for business leisure and other travel needs.
Nationwide state-supported services represented an important 48
percent of Amtrak ridership in fiscal year 2018, carrying 15
million passengers and contributing over 800 million to support
Amtrak's bottom line.
As the established partner of the class 1 railroads, Amtrak
has certain unique rights and access privileges to the freight
rail network at the Federal level. Our relationship with Amtrak
is important to us or ensuring individual corridor development
projects, and we continue to rely on them, to operate the
states-sponsored passenger services.
Our relationships with our freight rail partners are very
important to us, including Class 1 in short lines, having a
healthy freight rail system is critical to providing cost-
effective transportation as well as the growth and development
of manufacturing, agriculture and international trade.
Federal funding opportunities to increase both freight and
network capacity, including development of separate high volume
freight and passenger corridors, in certain areas, will also
help to address the critical of long-term performance.
Until 2010 our state had limited access to significant
Federal funding to support the growth of or rail system. That
year we received 545 million in our funds for the Piedmont
Improvement Program, which significantly accelerated planned
improvements to our tracks, signals, stations and trains.
The program also improves the freight rail system, through
the elimination of 40 at-grade crossings and modernized signals
and tracks. The funding created a revolutionary change to our
rail infrastructure, and has resulted in increased ridership
through multiple additional train frequencies.
North Carolina completed this program on time, and within
budget and stands ready to begin the next phase of system
expansion.
North Carolina is partnering with other southeast states to
develop the Southeast Corridor, stretching from Washington, DC,
through Virginia and North Carolina to South Carolina, Georgia,
Tennessee and Florida. Several other corridors are identified
across the Nation to serve the significant transportation needs
of rapidly-growing regions. On the North Carolina/Virginia
portion of the Corridor, a Federal Record of Decision was
completed in 2017 to create a critical new link from Raleigh to
Richmond, which will allow additional train frequencies,
significantly reduce travel times, and enhance connectivity and
reliability of the service.
As an incremental step towards developing this corridor,
North Carolina is leveraging state transportation dollars for
current Federal discretionary grant opportunities.
These proposals involve construction of safety and freight
projects with immediate benefits such as grade separations,
cross enclosures, and sidings. However, the full project, like
many across this country cannot be constructed at current
Federal fund levels.
Existing discretionary grant programs are very helpful for
maintaining current services; however, a consistent funding
program that can be relied on without evolving criteria for
project eligibility will allow new interstate rail
infrastructure programs to be established for continued growth.
State-supported services need Federal funding capital to
support both infrastructure expansion, and equipment
modernization. In addition, there are opportunities to acquire
strategies corridors as where it would share lower-volume
lines.
Funding is needed to preserve these corridors, and
assembling new rail corridors is often infeasible.
In summary, North Carolina and many other states are making
significant investments in passenger rail to create an
efficient and effective transportation system, but the current
level of investment cannot match the opportunity for growth
without consistent and widespread federal funding.
Thank you very much for the opportunity to speak with you
today, and I would be pleased to answer any questions you may
have. Thank you.
Mr. Price. Thank you very much. Mr. Gardner.
Mr. Gardner. Good morning, Chairman Price, and Ranking
Member Diaz-Balart. Thank you for holding this hearing today,
and let me also thank my fellow witnesses for their
partnerships with Amtrak.
Before I begin, it is with sadness that I must note the
recent passing of our Former President and CEO, Joe Boardman.
Mr. Boardman was a frequent visitor to this subcommittee and
left an indelible mark on Amtrak. He was an impassioned
advocate for passenger rail and we owe him a tremendous
gratitude for all he did for our company.
I also thank you and your staff for your hard work on the
FY 2019 appropriations bill. We greatly appreciate the strong
funding levels for Amtrak, and the FRA grants, and we look
forward to working with you on next year's bill.
In fact, we will be transmitting our FY 2020 legislative
and grant request shortly, after we have time to study the
administration's recent budget proposal.
Despite significant challenges last year, we made strong
progress on many important fronts. We reduced our operating
loss to historic levels.
Finally, through strong partnerships across the Nation with
states like North Carolina, we have added destinations and
additional daily frequencies, including another Piedmont in
your state, Mr. Chairman.
While we are proud of the accomplishments to date, we know
we have much more to do. We are working hard to improve and
expand our system. To do this, we continue to need your help in
addressing two of our most immediate challenges: our aging
assets and our relationship with our host railroads.
As the subcommittee knows, the lack of reliable capital
funding over our history has meant that many of our bridges,
tunnels, and passenger cars have become outdated and aged
beyond their useful life. In this era of perpetual highway
congestion and serious environmental concerns we encourage the
subcommittee's continued investment in our assets, and
additional funding to Amtrak and the states to improve our
network through projects like the Southeast High Speed Rail
Corridor. Whether it is Portal Bridge or the replacement of our
coach fleet, failure to advance our critical capital projects
places our current system at risk.
Our other major immediate challenge is the performance of
our host railroads. Unfortunately, today some host railroads
are simply disregarding the Federal law that grants Amtrak
preference rights over freight, since there is no reinforcement
of this requirement. Since 2018, for instance, Amtrak trains
were delayed 1.2 million minutes by freight trains. Of our 15
long-distance trains, only 1 service was on time more than 70
percent last year. When Amtrak trains are routinely delayed by
freight trains we disappoint our customers and increase our
costs making us more dependent on your funding.
Surely, this is not what Congress intended and we
appreciate actions like the subcommittee's requirement in the
fiscal year 2019 bill that our IG update our study on the cost
of host railroad delays to Amtrak. Looking ahead to fiscal year
2020, we seek your continued support for further actions and
incentives that could help us achieve better on-time
performance as well as expansions of service with our host
railroads.
We strongly support investments in our host railroads'
infrastructure to improve both our systems. But we must find a
better way to fairly determine what those investments should
be, and after making them, ensure that we all reap the promised
benefits.
Lastly, let me raise some critical longer-term
opportunities and challenges. We believe the time has come to
modernize and expand our network in order to serve more people
across America. We are busy developing a plan and vision that
we hope to share with Congress in the coming months as we turn
to the reauthorization of the FAST Act. As our owner, the
Federal Government sets the overall vision, funding levels,
policies, and rules for Amtrak, and the time is upon us as we
approach 50 years of age to ask fundamental questions about the
future role of Amtrak in the Nation's transportation system,
and how limited Federal resources should be invested to support
services across the Nation.
For the vast number of our customers and your constituents,
we believe we can do even more to provide them with better
transportation options. And as part of reauthorization,
Congress will need to grapple with how our network should
respond to the changing landscape and demographics of the
Nation and the evolving needs of our riders.
These are difficult questions, but prudence requires that
we face them together. I can commit to you that Amtrak will
always work hard to provide a safe, high-quality transportation
alternative in the most cost-effective manner, consistent with
our mission. However, we will need your help going forward to
better define our goals for the modern era and to fund their
achievement. Thank you for the opportunity to testify today and
I look forward to answering any of your questions.
Mr. Price. Thank you. Mr. Mitchell, we will turn to you.
Mr. Mitchell. Good morning, Chairman Price, Ranking Member
Diaz-Balart, and members of the subcommittee. I am DJ Mitchell,
head of BNSF Railways Passenger Operations Group for the most
part of the last 20 years. I appreciate the opportunity to
testify before the subcommittee regarding the perspective of
the stakeholders on passenger rail development in the United
States.
Almost 10 years ago, then BNSF CEO, Matt Rose, testified
before this committee about the interface between passenger and
freight rail service operating on predominantly freight rail
lines. What has changed since that time?
Passenger train costs, at least on BNSF, have remained
relatively constant. However, in 2018, BNSF set an all-time
record freight volume record. Today, we operate about 1,500
trains a day, including 254 passenger trains. To meet
increasing freight demand BNSF has made more than $40 billion
in capital investments in our railroad since 2009.
Creating and preserving network capacity is very important
to us. New track and facility construction increases capacity
as does the proper maintenance of existing facilities. In
recognizing this, we have made significant investments in both.
At BNSF, we often speak of a ``virtuous cycle,'' wherein we
are able to serve our customers, grow our business, and earn
returns sufficient to reinvest in our network. That is in the
best interest of the country, the supply chain upon which every
community in America depends, and in the best interest of the
passenger services which operate over us.
In addition to BNSF's annual investments in capacity and
maintaining our railroad of very good repair, there has been
public investment in BNSF network in places where state-
sponsored Amtrak corridor and commuter services operate, such
as the San Joaquin Valley, the Pacific Northwest, the Los
Angeles Basin, and between Chicago and Galesburg, Illinois.
In each case, and others not mentioned, state and local
communities have availed themselves of the funding tools under
the FAST Act, the TIGER/BUILD Program, and other Federal grant
and aid programs to improve passenger service reliability and
expand passenger service without adversely impacting freight
capacity and operations.
None of these public investments happened by accident. They
have been the project of BNSF's careful planning completed in
close cooperation with commuter agencies and the state DOT's
that sponsor Amtrak state-supported services, as well as Amtrak
itself. In each case, this work has been guided by BNSF's
longstanding passenger rail principles which we submit with my
testimony today. These are the principles that BNSF applies
when considering whether or not it can accommodate requests for
new or additional commuter or state-supported corridor service.
Safety is always our first consideration. That said,
regarding our passenger principles, our first principle among
equals is the principle that no proposed passenger service will
degrade BNSF freight service, negatively affect BNSF's freight
customers, or BNSF's ability to provide them with service. This
means that BNSF must be provided the present and future
capacity that the proposed passenger service will take from the
freight network before such service is started.
Going back for a moment to the matter of safety, we are
proud of our safety record. Our safety culture and practices
have reduced both train accident and employee injury rates by
40 percent or more since 2000. But we always seek continuous
improvement and we believe that technologies will provide the
next gear for achieving additional safety improvements. One of
those technologies now in service is positive train control or
PTC. BNSF has fully deployed the required PTC facilities and
equipment on our network. It is interoperable with Amtrak and
is present on all Amtrak and commuter lines hosted by BNSF that
were mandated by the Federal Government.
So, with respect to my opening question, what has changed
and what is the same? Freight volumes are up; public sponsors
of passenger service on BNSF's network have martialed public
investment and reached agreements with us to initiate expanded
service consistent with the passenger principles. And what
hasn't changed? Amtrak's long-distance trains: they have
priority access, but find themselves operating in a capacity
constrained, highly variable operating environment with little
ability to help mitigate reliability and capacity constraints
that impact their service.
What can be done about this situation? Amtrak and BNSF work
closely on this matter almost every day and while we may have
differences about certain elements of how long-distance trains
are scheduled, we most likely agree that the subcommittee's
inquiry into whether Federal programs can make a difference is
important. We are open to that conversation and a larger
discussion about how the role of passenger rail service plays
in service transportation, if the Congress wishes to engage in
the same. I appreciate the opportunity to testify today and
would be happy to answer any questions. Thank you.
Mr. Price. Thank you very much. Thanks all of you for
useful opening statements and we will now proceed with
questions. I want to refer in beginning to North Carolina's
expanded passenger rail service. Glad to have the man who is
presiding over that at the moment with us, but I intend to use
this as a window onto the situation nationally; the challenges
and the opportunities we face nationally.
One example of expanding passenger rail service Mr. Orthner
has already referred to, the Raleigh to Richmond route which is
absolutely essential to the eventual establishment of a
Washington to Atlanta regional corridor. Restoring Gulf Coast
service, we also hear a lot about that. These will come with
significant up-front costs, way before the revenue starts to
come in through ticket sales or whatever the revenue stream
looks like.
Now, unlike aviation, unlike highway funding, there has not
been a stable, predictable funding source for passenger rail. I
am very proud of the work this subcommittee has done on a
bipartisan basis to change this trend, investing $1.62 billion
in 3 grant programs over the last 3 fiscal years. On the other
hand, I am well aware of how unique the Recovery Act influx of
support was, in retrospect. We certainly made good use of it in
North Carolina. Mr. Orthner can testify to that, but there has
been a fall-off in funding since then.
So, we face a real challenge in restoring that kind of
Federal role. Or, I don't know if ``restoring'' is the right
word, because the Recovery Act was a one-time investment which
did a lot of good, but maintaining that, of course, is a huge
challenge.
So, Mr. Orthner, we will start with you. I want each of you
to respond. Can you speak to the complex mix of Federal
programs North Carolina is tapped into or is exploring to
support projects like the Southeast Corridor? You might refer
to our past experience, but mainly we want to look forward.
Mr. Orthner. Yes, Mr. Chairman, thank you for that
question. We at North Carolina have been very innovative with
funding over many years. I will explain a few of the programs
that we have tapped into and kind of give some context for
each.
Everybody should be familiar with the Section 130 funding
which supports grade crossing safety, hazard elimination. That
has been a program that we have been a part of for many, many
years improving our grade crossing safety, upgrading devices;
we have also used the funding to close a significant number of
crossings.
That funding source was sort of the instigator many, many
years ago when we started what was called the Sealed Corridor
Program, which we comprehensively looked at grade crossings in
corridors to look at ways to address safety. We have driven
down crossing collisions 82 percent since 1988 and we have
closed over 300 crossings since that time as well. So that
funding source has been important to us.
We have used congestion mitigation air quality for funding
through FHWA for a number of projects and initiatives. It is a
funding source that actually is supporting the operation of
some of our services right now, in addition to modernizing some
of our equipment.
We have also historically used FHWA enhancement funds. That
source hasn't been around for a while, but that was a source
that we used for a number of station projects. We basically,
from the late 1990s to the mid-2000s, worked with communities
all throughout the state to use that funding source to upgrade
historic stations where the communities can be very proud of
them.
More recently, we have used TIGER funding sources to
support Charlotte Gateway Station and Raleigh Union Station.
Those have been some of our larger funding opportunities
through those programs as well as some grade separations. Blue
Ridge Road, which is one of our most complex grade crossings in
the State, also has received TIGER funding as well as some
other freight projects.
And even more recently, the Consolidated Rail
Infrastructure and Safety initiative, Millbrook Road is a grade
crossing along with the Sealed Corridor that has received some
funding under that program, and out of that actually was one of
the catalysts for getting started on that Sealed Corridor. And
of course, we mentioned ARA Funds that supported the Piedmont
Improvement Program as our largest, single funding opportunity.
That gives you the mix, kind of, of what we have used in
the past. Our state is very aggressive when it comes to
pursuing grant opportunities and we will continue to do so.
Thank you.
Mr. Price. Thank you. We will pick up with our other
witnesses on the next round, but thank you. That is a useful
lining out of the menu of options that we have drawn on. Mr.
Diaz-Balart.
Mr. Diaz-Balart. Thank you, Mr. Chairman. The Chicago
CREATE Partnership brought Federal and local interests together
with the railroad industry to really make improvements to
increase efficiency in passenger and freight rail in the
Chicago area. Something that Mr. Quigley, as you remember, Mr.
Chairman, always talked about and we actually spoke about it in
some of the hearings.
Mr. Mitchell, I understand that there is potential for
another partnership like that dealing with the Fort Worth
region to the North Texas Moves Program, I believe. Can you
describe the status of that project and the role that BNSF is
doing to bringing that project potentially forward? What
specific improvements would you expect to take place if that
actually moves forward?
Mr. Mitchell. Thank you, Congressman. I would like to
explain our role and then the status of the project.
The role that we have played is identifying the best
combination possible of public and private investments to
facilitate the movement of railroad trains, I will be more
specific in a moment, through the metropolitan area.
The metroplex Dallas-Forth Worth is very important to the
railroad. Service from the Pacific Northwest, from California,
from Chicago headed for the Gulf States and for Houston and the
ports, all come through that part of Texas.
It is capacity constrained. We have the ability to build
out capacity on property we own, like the Madill subdivision
going north into Oklahoma. We have the ability to build out
capacity going south toward Houston. But the center of the
metropolitan area, the property is owned by the public
agencies. So we have been working closely with the Metropolitan
Area Planning Council as well as DART and Trinity-Metro to
identify a series of projects that will benefit all of us;
benefit the growth of passenger service, that is really needed
in the metropolitan area, as well as facilitate the movement of
our trains through the metropolitan area.
We have modeled that operation using the modeling tools
that we have at our company at no cost to the public. A group
of projects have now been identified, one for the eastern part
of the metropolitan area, one for the western part of the
metropolitan area. And now it is time that those grant
applications are prepared and submitted.
It is a program of projects, not unlike CREATE. I happen to
be the chairman of the Chicago Planning Group which oversees
the CREATE implementation; very similar to Chicago. In fact,
there is a management improvement initiative as part of the
grant application as well as a number of capital investments
that we will carry forward, not in 1 year, not in 2 years, but
probably 3, and we just have to go forward now.
Mr. Diaz-Balart. Thank you. Mr. Gardner, what improvements
would you expect to see to Amtrak's operations because of the
CREATE project? And also what potential do you see in this
North Texas project?
Mr. Gardner. Thank you, Congressman. We have already been
experiencing some of the benefits of CREATE. The program, as my
colleague here mentioned, is a program of projects, so not all
of the projects benefit Amtrak service directly, but many do,
and we are proud to have supported the program and worked
closely with our colleagues to advance the programs
incrementally.
I would note that there is still a lot left to accomplish
in CREATE; we are not nearly done. And even when CREATE is
completed, we won't yet have the kind of dedicated
infrastructure for an entrance to Chicago for passenger rail
that I think is essential in the long term, but there is no
question that CREATE has created a credible improvement in
terms of the interface between the freight railroads, Metro,
the main commuter provider, and Amtrak on a number of key
locations.
Mr. Diaz-Balart. It is a good example to potentially look
at for other places.
Mr. Gardner. It is, it is.
Mr. Diaz-Balart. Yes.
Mr. Gardner. Absolutely, and the situation in Texas
similarly. Texas is an incredibly important state in the
Nation, one of obviously of our fastest growing and largest
population centers. It is a place also which has remarkably
little Amtrak service, given its population. You have got the
fourth and fifth largest cities in Houston and Dallas-Fort
Worth in terms of metropolitan areas, 13 million people, and
yet no inner-city passenger services connecting the two cities
even though we have got reasonable trip time possibility and a
relatively manageable distance.
So, in the long term, these are exactly the sort of markets
where we think Amtrak needs to be playing a bigger role and we
need to be developing that role and those possibilities, like
our colleagues in North Carolina have and, like Mr. Mitchell
mentioned, together with the freight host railroads and the
commuter providers.
Mr. Diaz-Balart. Thank you. I yield back, Mr. Chairman.
Mr. Price. Mrs. Watson Coleman.
Mrs. Watson Coleman. Thank you, Mr. Chairman, Mr. Ranking
Member, for holding this hearing and thank you for your
testimony, all of which is very interesting to me, but I have
about three questions for Mr. Gardner that I would like to get
through really quickly.
Mr. Gardner, as you certainly know, Amtrak is critical to
my district. Since my district is between New York and
Philadelphia, Amtrak connects the people and the businesses in
my district to those to major cities and the broader region
both through Amtrak service and the commuter lines that run on
Amtrak-owned lines. So, I appreciate your testimony about the
importance of maintaining, repairing, and enhancing the
Northeast Corridor, especially the construction of a new Portal
Bridge and the new Hudson River tunnels as part of the Gateway
Project.
The Deputy Transportation Secretary, Jeffrey Rosen,
dismissed the Gateway Project as a local responsibility. So, it
is just so unfortunate he would even think that. So, could you
elaborate on why the Gateway Project is critical to Amtrak's
operations, and what the consequences of Amtrak would be if the
Gateway Project is not completed? Question number one.
In the last two appropriations bills, Congress has
appropriated $650 million each year to provide for Amtrak's
Northeast Corridor. Yet, I have heard concerns that the Federal
Railroad Administration has been slow to provide the money to
Amtrak. Could you update this committee on the status of Amtrak
receiving this critical money? Question number two.
And finally, under the administration's proposed 2020
budget, Amtrak's Northeast Corridor funding would be cut by
about 50 percent. How would such a cut impact Amtrak's ability
to do important projects in the Gateway Project area? Thank
you.
Mr. Gardner. Thank you. I will take those in order. So,
just to put the Northeast Corridor first in context in the
overall system of Amtrak, we are roughly 31\1/2\ million riders
last year, and about 17 million of those used the Northeast
Corridor, both in our Northeast Corridor services and
passengers who ride on long-distance trains and traverse the
Corridor. At the center of this, and really the center of the
rail--passenger rail network in North America is New York's
Penn Station, and access to New York Penn Station to the south
and west is provided on a piece of railroad we call the
Highline from Newark, New Jersey, into New York City Penn
Station. And this piece of railroad relies on a series of
infrastructure roughly dating from 1910. And we have two
critical projects in our phase one of the Gateway Program,
which, basically, is to rebuild that infrastructure to modern
standards, and, in the process, create additional capacity over
time.
The loss of this infrastructure, even for a day, has huge
potential impacts. There are 450 trains a day. We have 2,200
trains a day on the Corridor, 450 of which travel between
Newark, NJ, and New York's Penn Station, roughly 250,000 trips
a day. And the Portal Bridge is an old swing-span bridge. It
occasionally has trouble closing, and when that occurs, we have
very serious delays. We have trains on 2-minute headways on
this part of the railroad, and we can have massive delays that
come.
So, the Northeast Corridor Commission, of which Amtrak is a
member, as well as the states and DOT, has estimated the loss
of infrastructure here as--causes, essentially, $100 million of
productivity and disruption expense. And if we do not proceed
down the path of ultimately replacing these assets, we are
going to be facing reliability risks. We will have more delays
and, ultimately, we will have to take these assets out of
service to replace them. And the question is will we have
adequate additional infrastructure to keep the 450 trains a day
going? So, that is the criticality. It is essential to the
entire Corridor, and as such, it is essential to the whole
region and, therefore, our entire system and Nation.
As for the authorized--excuse me, the appropriated funds,
we have received those from the USDOT. So, we do have dollars
available provided by this committee, which we are very
thankful for. They are--some of which are being spent on
Gateway activities, but many of our big activities are,
essentially, being held in abeyance at the moment. We cannot
commence with the major construction until we have completed
the full funding package with USDOT and our state partners.
So, we are ready with the dollars you have provided us, but
we need the other pieces of the puzzle to be in place for us to
be able to make our significant investments, Portal Bridge
being sort of the clearest, which is ready to go, fully
designed, fully permitted.
Mrs. Watson Coleman. Fifty percent cut.
Mr. Gardner. Yep, and in terms of--we are still just
looking. We have only seen the very high level budget
documents, but any significant reduction in funding to Amtrak's
Northeast Corridor Network or the National Network poses
substantial risks to our current project. So, we have been
relying on the additional funding of this committee as provided
to make good progress towards addressing the state of good
repair on some of these major projects. And certainly, in our
request you will see us continue--or ask for that continued
level of support. It is essential for us to keep making
progress. Thank you.
Mrs. Watson Coleman. Thank you. Thank you, Mr. Gardner.
Thank you, Mr. Chairman.
Mr. Price. Thank you. Mr. Rutherford. Thank you. Thank you.
Mr. Rutherford, now.
Mr. Rutherford. Thank you, Mr. Chairman. Mr. Gardner, what
we have talked a little bit this morning about, the conflict
between freight and passenger service and the impact that it
has had on the passenger service, and I know on the freight
side, there has been a response to their lack of on-time
service as well. This whole movement of precision railroading
that they are implementing now, do you see that able to bring
any relief to this conflict between freight and passenger?
Mr. Gardner. Thank you, Congressman. That is a good
question. Obviously, as the operating model is evolving on the
freight side, we see both sort of risk and opportunity. I will
say that CSX, certainly a major proponent here of precision
scheduled railroading, has achieved very significant
improvements in the handling of our trains recently, and we are
very thankful for that. It is the same railroad. We have the
same trains, and yet, year over year, we have seen a 55 percent
reduction in their freight train interference delays.
Mr. Rutherford. Fifty-five?
Mr. Gardner. Fifty-five percent. So, a very significant
delay reduction. Seventy-five percent of our auto train
passengers are now on time this year, which is 18 percent
better than last year, and 65 percent of our Silver Meteor
customers are on time, which is 19 points better than last
year. So, we have seen significant improvement. And I think
this goes to show that, with focus and commitment, which we
have received from the new leadership team at CSX, that
improvement is, in fact, possible.
Now, these numbers are not where we ideally would want them
to be, obviously, but we have seen sustained improvement and
focus. Whether that is attributable to the change in operating
philosophy or just the focus, you know, I think that could be
debated, but we do see with scheduled railroading sort of as a
model, I mean, frankly, the freight railroad operating in a--
more similar to passenger railroad. Obviously, we operate on a
schedule all the time, and punctuality and reliability are core
to our product. And if freight railroad operations start to
look a little bit more like our own trains, and we are all
operating on schedule, then we have a better chance of staying
out of each other's way and optimizing the capacity.
Mr. Rutherford. And I would also ask Mr. Mitchell, do you
both see opportunities, also, for relieving some of the
conflict through--and I do not know if it has any direct impact
or not, but the Positive Train Control innovations is--does
that enhance any of that scheduling?
Mr. Mitchell. Congressman, in direct answer to your
question, probably not, but let me explore the question, the
broader question you are actually asking. I like to think often
about our factory, the railroad. It is outdoors, okay? It
rains. It storms. It is winter. There is snow. Things happen
out there. Sometimes it takes longer to get to--through what
you are doing than you would have expected, whether you are
riding a freight train or loading passengers at some station,
and sometimes mistakes are made by everybody, right?
We understand at BNSF our responsibilities with respect to
priority and preference, and I assure you that we take those
responsibilities very seriously. But priority and preference do
not necessarily equate to on-time performance. Let me give you
an analogy.
You need an ambulance, downtown Washington, DC, you are
going to Georgetown Hospital. You go down Pennsylvania Avenue,
get on M Street, turn right onto Wisconsin, and up Wisconsin to
Reservoir, turn left, and you are at Georgetown.
Now, that trip, at 4 o'clock in the afternoon, on a Friday
afternoon, is certainly going to be different than at 7 o'clock
in the morning on a Sunday. It is certainly going to be
different if you have a bright, sunny day or if the District of
Columbia is blessed with 1 or 2 inches of snow. Things change,
and you look at it, and you say, how do you respond to those
changes in condition? There are a couple thoughts here.
Irrespective of preference or priority, passenger train
schedules, the timetable that is written by Amtrak and that we
review and approve, must take into account the operating
realities that they face and the physical capabilities of the
railroad over which they will be operating. Writing a timetable
is a very, very important part of the question you are asking.
Mr. Rutherford. In the 5 seconds I have got left, Mr.
Orthner, you mentioned closing 300 at-grade crossings. How do
you do that? I mean, do you actually shut roads down or are you
building bridges over or what? How is that happening?
Mr. Orthner. So, we do--thank you, Congressman. We do it--
we do it through a variety of methods of--primarily, we do a
study in partnership with the community of where we are looking
at these crossing closures or other types of improvements, and
we develop near-term, mid-term, and long-range plans. And then
from that, we develop what crossings we will improve, which
crossings we will close, and which crossings we will grade
separate.
More recently, we have had our state Transportation
Investments Law has allowed us to actually kind of jump start
that a little bit by recognizing the importance of separating
the highway and the rail network.
Mr. Rutherford. Okay.
Mr. Orthner. And so, it is----
Mr. Rutherford. My time is up, but thank you very much. I
submit time has expired. I yield back.
Mr. Price. Thank you. Ms. Torres.
Ms. Torres. Thank you, Mr. Chairman, and thank you to our
guests for being here. I want to focus on rail safety. I
represent California's 35th Congressional District. Southern
California is home to--we have 21 million people and it has 7
counties, just to get you familiar with the area.
In my district alone, I have six freight corridors, okay?
Of those freight corridors, 50 percent of the Nation's goods
that come through our ports of entry comes through the port of
L.A. and Long Beach. Seventy-seven percent of that enters 48
states through my district. We are the heart of the logistics
industry. So, rail safety is really important.
This year, February 19 of this year, there was a report.
FRA submitted the National Strategy to Prevent Trespassing on
Rail Property Report to Congress. It identified 10 areas,
critical areas. The top three, two of them are in my
congressional district. The top 4 of the 10 are in Southern
California. I think it is somewhat irresponsible to say that
this is a local issue. I think that we have to--because 48
States are benefitting from what comes through my district. I
think 48 states need to focus on rail safety and the number of
people that are dying as a result of illegal crossings through
railroad.
So, and that report found that there was an increase of 18
percent. Is that correct? In fatalities? Eighteen percent from
725 in 2012 to 855 in 2017. How can we work together to ensure
that it--that we have adequate public safety announcements in
the community, that we do not leave it to our local police
departments to oversee this issue, public safety issue? They
simply do not have the resources to uphold public safety with
those crossing areas. So, I think that there is more that we
could do together, and I want you to just talk about that.
Mr. Mitchell. Where would you like to start?
Ms. Torres. With the BNSF.
Mr. Mitchell. Yes, ma'am.
Public safety is, obviously, very important to us and
everyone else. We are actually talking about people out there,
and, like you say, they do get injured, they do get killed at
grade crossings.
Ms. Torres. They do not know the extent of the speed that
these trains are going through.
Mr. Mitchell. Yes, ma'am. Yes, ma'am.
Ms. Torres. They do not get it. So, there has to be a
campaign to teach the public about train safety.
Mr. Mitchell. We actually have such a campaign. It is
called--
Ms. Torres. Not in my district, sir.
Mr. Mitchell. Well, let me talk a little bit about that,
okay? We have a systemwide campaign called Operation Lifesaver,
where we go into communities and talk about the things you are
very worried about, all right? We invite local officials,
whether it be police or mayors, whoever, on our trains. It is
called Officer on the Train, and we will go down a particular
corridor and let everyone see what we are seeing, what our
engineers and crews are seeing. We worked very closely with
both state and local officials in southern California on
various grade separations. The biggest one, most recently, is
Rosencrans/Marquardt, which after the CUPC has approved it,
obviously, that project is now going forward as it is now
funded.
So, there is a combination of things. There is the work
that must be done with the community in talking to people,
whether it be in old folks' homes or schools or in the
community meetings, where you basically bring the facts to them
and say trains run faster than you think they are going to be
running. You need to stay off the railroad. You stay off the
right of way.
There are physical improvements that can be done. The grade
separations with a proper overpass, with sidewalks and such,
also very, very important, and we supported those going forward
in Southern California. I think there are only--I think there
only three or four grade separations necessary between Los
Angeles and Fullerton today. Now, I am not exactly sure that
that is of interest, but you go out to San Bernardino, there is
a whole series of grade separations that are being built.
Ms. Torres. I do not represent Los Angeles or Fullerton. I
represent from Pomona to San Bernardino and--
Mr. Mitchell. Yes, ma'am. That is the San Gabriel line. We
are one line south of that.
Ms. Torres. No, it is the Inland Empire Line.
Mr. Mitchell. Yeah. So, there is a program and we have it.
Ms. Torres. I am going to yield back, but I want to say
that I have not seen your program. And taking a mayor and local
police department on a ride along is not enough to stop what is
happening in my community and I yield back.
Mr. Mitchell. What I will----
Mr. Price. Go ahead.
Mr. Mitchell. What I will be glad to do----
Mr. Price. Go ahead and finish your thought.
Mr. Mitchell. Okay. What I will be glad to do is prepare a
summary of the programs that are available, and our staff will
get them to you.
Ms. Torres. Thank you.
Mr. Mitchell. Yes, ma'am.
Mr. Price. All right. Mr. Hurd.
Mr. Hurd. Thank you, Mr. Chairman. Mr. Gardner, I know
you--my district is home to five rail lines in Texas. I am sure
you are familiar with them. The Sunset Limited runs from Los
Angeles to New Orleans, and along the way, it makes two stops
in my district, Alpine and San Antonio. One of the complaints
that I hear is that it stops too infrequently, it stops too
quickly, as well.
My question is a broader question. I know this would take
more than 5 minutes to have a complete conversation, what needs
to happen, you know, in order to increase those kinds of stops?
I know it takes 6 hours to go from Houston to San Antonio. I
know you have mentioned Dallas and Houston. San Antonio, my
hometown, the seventh largest city in the country, and we
already have rail between Houston and Dallas. I would love to
go see Mr. Aguilar in California on the rail, but I cannot
spend an hour on the train--or a day on the train, excuse me.
So, what needs to happen in order to see that increase in
passenger rail traffic between a place like Houston and San
Antonio?
Mr. Gardner. Well, thank you, Congressman. It is--I would
say this is a very good example of your--your city is an
excellent example of a place where we are underserving,
frankly, major population centers with relatively poor and
infrequent service. The Sunset Limited, the train that operates
on that route, is only a triweekly train. We operate it, you
know, once every other day. Basically, in each direction, there
is one train. It is frequently significantly delayed. And we
face real challenges as we look forward about how to make a
train like that functional and really provide utility and value
for the investment because there is no question that there are
strong markets there. There is no question that we have got
connections, both to the East to that--it would be very
important to Houston, and also to Austin and Dallas that are
prime markets in the sort of modern 21st century.
Mr. Hurd. So, is it the lack of rail because----
Mr. Gardner. No.
Mr. Hurd [continuing]. You cannot be on enough because of
the freight issue? Is it consumer demand? It is just not built
in? This is not the Northeast Corridor? What are some of those
macro issues at this point?
Mr. Gardner. Yep. So, I say there are three issues. So, one
is, at least for this service, to have a frequent trip time
competitive, reliable service, we would need a state partner in
the state of Texas. We would need a willing host railroad, who
would be working with us to create the kind of capacity and
performance to permit reliable trip times.
Reliable trip times, typically, require higher speeds, not
high speeds, necessarily. And we certainly were able to achieve
that at 79 or 90 or 110 miles an hour, but the faster the
better, typically. There is a cost-benefit to be considered.
But as we look forward to the network, this is exactly the
question we want to ask Congress and to talk to Congress about,
is what do we do with a train like the Sunset Limited that is
clearly offering sort of marginal service today, could do a lot
more for the communities, but will require dedicated
investment, reliable funding, and a partnership with the
freight railroads to achieve better outcomes?
Mr. Hurd. And, you know, Jacksonville was cancelled or a
discontinued, and so what thoughts go into discontinuing stops,
you know, based on current demand and current activity?
Mr. Mitchell. So I think you are referring to the Sunset
East Portion which we suspended after the hurricane. We are in
the process of working diligently with the three Gulf Coast
States to restore service to Mobile, New Orleans to Mobile, two
round trips a day is our goal there. And those decisions about
the future of the network I mean ultimately rely on both State
partners and Federal funding. We think we have a pretty clear
picture of the type of communities that can benefit from
intercity service. And what we need is a roadmap going forward
and partnerships to achieve it.
Mr. Hurd. Mr. Mitchell, in my remaining 30 seconds, I know
BNSF announced $400 million in upgrades to critical rail assets
in Texas. One of that is the Eagle Pass Boarder Gateway to
handle growth in Mexico. I just welcome your thoughts on what
kind of that expansion is going to ultimately look like.
Mr. Mitchell. Congressman, I actually do not know the
details on that, I will be more than happy to get back to you
on it.
Mr. Hurd. Okay. Thank you. Mr. Chairman, I yield back.
Mr. Price. Thank you. Mr. Aguilar.
Mr. Aguilar. Thank you, Mr. Chairman, Mr. Ranking Member.
Mr. Gardner, couple questions for you about an issue that has
happened just south of my district.
In November Amtrak announced that it would close its call
center located in Riverside, California that employed 500
people. Constituents were in Ms. Torrez' district, my district,
Mr. Panetta's district, Mr. Ruiz, and scattered throughout some
of the region.
We received a letter from a family in which the mother and
father of two girls were both employed by Amtrak. The father of
the family was an employee of Amtrak for 18 years and worked in
the call center that closed last month.
Amtrak employees were told that the call center's closure
would have a chance to go over their employment options, and an
Amtrak spokesperson said in public, here was the quote ``No
employee will be laid off as a result of outsourcing.'' In
December 2018 my colleague, Mark Takano, and I sent a letter to
Amtrak to express our concerns about the decision to close the
call center in Riverside and award jobs to a third-party
contractor. Amtrak responded that payment for separation was
provided to retirement eligible employees and some non-
retirement eligible employees.
Can you give us a status update, and was there a
miscommunication between the spokesperson and the management
level? I hate to be so parochial about this, but this does give
me kind of--this does give me a glimpse into the operations of
the organization and that you are asking us to give you more
guidance, and I would like to understand this operational
piece.
Mr. Gardner. Sure. Thank you. As you mentioned, we did
consolidate our call center into a single facility in
Philadelphia. And as part of that we engaged each of our
employees to discuss the options that they could pursue.
Our commitment was that any employee who wanted to move to
become an employee at the new facility would do so. And we have
in fact had I do believe 93 folks decide to move. We have given
them generous relocation allowances, and in fact extra time
beyond what we negotiated with the Union to make that
transition. So not everyone has moved, some are still in the
process, but many have selected to move.
We worked with all the other employees to figure out good
solutions and pathways for them. 212 employees of the facility
chose to pursue other positions, to exercise their rights and
pursue other positions.
Mr. Aguilar. Within the organization?
Mr. Gardner. Within the organization, that is right. Yep.
We did have a number of folks who retired, roughly about 80
folks who took retirement at the time. We also had a number of
people who elected, even though they were operating their
positions elsewhere in the company or who did not make the
move, who decided to take our, essentially our package to
resign from the company. So they chose at that point to
voluntarily separate from the company and receive our severance
package at the time.
So we have been working with each of these employees to
find a path forward that met their needs. We certainly
understand that this is never done without difficulty, and we
do firmly support all of our employees and try to find good
paths for every employee.
Having said that, the rationale for reducing the call
center into a single facility is very strong. We had
approximately 20, 25 years ago had 80 million calls to our call
centers, and now our calls are only 9 million in 2018. We have
had a dramatic drop in the number of calls and a huge shift to
online and mobile purchasing. And in fact call volumes have
already dropped 13 percent this year. So we continue to adapt
to the evolving needs of our customers, and that means that we
need to adjust our workforce to make sure that we have got the
right level of folks to meet our callings over time.
Mr. Aguilar. Was any job outsourced though, or were they
kept in-house? Do you do any call center operations by a third-
party vendor, or are they all internal?
Mr. Gardner. We do have an outside vendor who supports us
in peak periods. So we have got staff in Philadelphia that can
handle the normal call volume and our normal load. There are--
we have an addition support that is available to us when we
have disruption or delays or additional call volumes beyond the
normal amount. And, you know, this means that we are trying to
efficiently staff, which is consistent with our mission from
progress, to use your funds as wisely as we can and operate
with good business judgment. But we need to create additional
capacity to handle those times when we have more calls than
expected.
But again, all of the folks who worked for us at this
facility, we worked to find them opportunities at the company
so that they could continue to work for Amtrak, either in a
different role or come to the call center.
Mr. Aguilar. You gave four categories: decided to move,
pursue opportunities within the organization, retirement, and
took the package. I would argue, and take the package, that is
over 100 people, I would argue, were laid off. If you took a
package they were laid off. And I think that goes against what
the spokesperson said. So I just think that you need to tighten
up some of the communication side of how this was rolled out.
Thank you, Mr. Chairman.
Mr. Price. Thank you. Mr. Quigley.
Mr. Quigley. Thank you. Mr. Gardner, Union Station, which
is in Chicago, center of the Universe, also something Amtrak
owns. Ideally how is that station constructed? You know I hear
about other cities, the fact that the trains run through and it
is not as cumbersome as the situation is now. But there are
plans for improvements. Can you detail just exactly what you
have in store and what the ideal is and how we can help you?
Mr. Gardner. Sure. Thank you, Congressman, appreciate that.
And it is a great station, you will not get any arguments from
me. It is a great place, and we have been investing a lot to
make it better, still a lot of work to do.
We got two simultaneous efforts under way. One is our
Master Development Process, which is associated right now with
building a new building, a million and a half square feet over
our parking garage, with a commercial developer, partnership
there.
We will take some of those funds and turn them into
improvements in our Head House. So we will be reactivating the
former Harvey Restaurant space and creating a new entrance on
Clinton Street, a new accessible entrance which will help to
drive both activity in the station but particularly help
passengers both for Amtrak and Metra in terms of their access
and egress to the station, and reactive a portion of the Head
House.
The concourse is considerably more difficult because, as
you know, there once was a grand building there. That building
was demolished well before Amtrak was involved and a tower was
put up, and we were sort of in the basement. We have been
working together with the city and Metra on roughly 13 projects
to improve access and operations at the concourse level where
all the passengers are, and board trains and platforms.
We are through the initial phase of some of that design,
and we weighed funding, frankly, in partnership with Metra to
advance many of those significant projects. Some of the funds
that we were able to gain from our recent redevelopment efforts
could be available for that work. And we are working with
Metra, for instance, to apply for a Federal/State Partnership
Grant coming up shortly here to begin some work in the
concourse.
But you are right, the lack of run-through tracks does
create some issues. I would say the biggest challenge is that
you have incredible amount of people cordoned into a relatively
small space, again driven by the overbuild that occurred a long
time ago. But we are working hard to make the station more
accessible, a much more pleasant place to be with higher
amenities and more efficient for passengers entering and
exiting.
Mr. Quigley. It is interesting, we talked, when we talk
about our freight friends about opportunities to get straight
into Chicago on passenger. I have witnessed the Amtrak trains
whizzing through Michigan at 140 miles an hour, then they go
through Northwest Indiana and everything slows down, they get
pushed to the side. And it is not the only example. Is this
just capacity, or is this techniques, plans, designs, other
strategies to alleviate that bottleneck service?
Mr. Gardner. Well I think it is a combination and it
differs from carrier to carrier. I would say we have an
excellent partnership with BNSF generally. We have our
differences but have had a long and fruitful relationship, and
appreciate the care in which BNSF brings to our business.
But you are right, we have had significant issues, for
instance in the Michigan port, the Wolverine service. We have
seen significant delays associated with the portion of the
railroad which is owned by Norfolk Southern, which is the
entrance, essentially, from Indiana into Chicago. 270,000
customers, 55 percent of our passengers on this train arrive 41
minutes late in 2018, driven by the delays on this section of
the route. It is only 13 percent of the route but it's driving
a very significant portion in delays. And other customers are
arriving 65 minutes late.
Mr. Quigley. I took this once and they had me up with the
engineer, and apparently everybody in freight knew about it so
they got out of the way. And we got into the first stop in
Michigan early and there was almost no one there because the
train had not been on time. People were throwing their cups
from coffee shops, saying ``Oh, my God, the train is on time.''
So, look, it is a complicated issue. Let us talk about it
because I do not think we can put a member of Congress on every
Amtrak train running through there, maybe cardboard cutouts
would work. But we will talk further. I appreciate your
efforts. Thank you.
Mr. Price. Thank you. Ms. Clark.
Ms. Clark. Thank you, Mr. Chairman, Mr. Ranking Member, and
to all the witnesses, we appreciate you being here.
Mr. Gardner, I want to go back to the Northeast Corridor.
There is an estimated backlog of $40 billion in repairs, $15
billion for the Hudson Tunnel, $4.3 billion to replace the
Baltimore and Potomac Tunnel built in 1873, $1.6 billion to
replace the two-track Susquehanna River Bridge. My
understanding is that you have gotten about $650 million for
the Northeast Corridor.
How are you planning to tackle this huge backlog?
Mr. Gardner. Well, Congresswoman, thank you. It is a good
and daunting question for us we struggle with every day. I will
say again that the committee's support, the subommittee's
support has been fantastic over these last two years in
particular in terms of increasing public resources directly to
Amtrak and the FRA Grants. But there's a massive amount left to
do.
And frankly, it is Amtrak's view that the only way to do
this in the long term is to establish a dedicated reliable
multi-year source of funding for this program and for other
intercity passenger rail projects around the country. Because
to your point, how do we undertake a 10-year, $13 billion
project if we rely on annual funding for that project. We have
to let a contract for, say, four and a half billion dollars
worth of civil work for internal construction. We cannot sign
the contract unless we know we can provide the full funds for
it. And as it relates to industry and passenger rail, we do not
have the ability to make those kind of commitments.
So if you look across the Northeast Corridor at our big
projects, you have mentioned really four critical ones, we are
looking, in the next 20 years, at needing to expand. Between
the States, Amtrak, and the Federal government is $40 billion.
And I think the committee and subcommittee is doing an
excellent job beginning the pathway by providing these dollars.
But much more will be needed, and they will be needed over a
sustained period of time.
So we will certainly in our, let's say, request, you will
hear this from us, and we look forward to working with both you
and the authorizers to try and establish a way to address it on
a longer term basis.
Ms. Clark. Can you just tell me the $13 billion figure you
reference? What does that represent?
Mr. Gardner. That is roughly the cost of the Hudson Tunnel
Project.
Ms. Clark. Okay. Yes.
Mr. Gardner. Yeah.
Ms. Clark. All right. Thank you. Mr. Mitchell, I want to
talk a little bit about positive train control.
Mr. Mitchell. Yes, ma'am.
Ms. Clark. I know you have done some good work. But we have
four railroads that are fully implemented is my understanding,
and 33 that have either demonstrated meeting or exceeding the
criteria for an alternative schedule. But as of December, only
16 percent of the 233 host tenant relationships had achieved
the PTC interoperability. What do you see, what is your status
working with the approximately 30 railroads that we need to get
on board to get interoperability--sorry I struggle with that
word--and what are the primary challenges that you are facing?
Mr. Mitchell. Thank you, Congresswoman. The BNSF has
invested about $2 billion in deploying PTC to date. It is a
very complex system, and from time to time it is very
challenging. We have committed to its use and its further
development. Today we have completed all mandated installations
operating over 1,000 PTC protected trains a day on 88
subdivisions in 11,500 miles of track covering 80 percent of
our freight volume.
Interoperability, we have been working with our partners,
whether it be the short lines or Amtrak or the commuter rail
agencies, all to work out interoperability. In Los Angeles we
are fully interoperable with the Southern California Regional
Rail Authority, the MetroLink folks. Other places are not as
complex because you do not have to interface them.
But every day, every day I take a look, personally, at how
we're doing on the passenger side with respect to PTC
compliance. I receive a series of reports looking at whether or
not they are any exceptions in Chicago, Minneapolis, Seattle,
and Los Angeles. In Los Angeles and Minneapolis and Seattle it
is rare that I ever see an exception. Sometimes in Chicago
there is one, Chicago is a little bigger, it was deployed last,
and they are still going, we are still going through some
teething opportunities, to say the least.
But we are working toward that. And I am confident that
with time and the work of the entire industry, whether it be in
Chicago with all the freight railroads working through the
create process, or under the create process, or in individual
locations like Los Angeles or Texas where there is more than
one freight runner involved, we will get there. It is simply
hard, that's all.
Ms. Clark. Thank you, Mr. Chairman.
Mr. Price. Thank you. I want to ask Mr. Gardner, then Mr.
Mitchell, to build on the answer Mr. Orthner gave us in the
first round regarding the kind of funding streams we are
talking about, the complex mix of Federal programs we have
tapped into and will need to tape into if we expand passenger
rail service in the way that we need to do so given the demand
in this country, and particularly the demand to build out these
regional routes.
So starting with you, Mr. Gardner, assuming for the moment
more generous funding than we have right now, I wonder what you
would identify. If you could do this pretty quickly, identify
as the top one or two priorities for each of your services, the
Northeast Corridor for example, the State supported routes, and
the long distance routes. And what kind of priorities do you
have and what kind of funding would you need, and what kind of
new tools might you need in order to bring this to fruition.
Mr. Gardner. Thank you, Mr. Chairman. So for the Northeast
Corridor, our priorities are, I think, what you already know,
which is our Gateway Program, our Baltimore Potomac Tunnel, our
East River Tunnel rehab, our Susquehanna River Bridge. Those
are our major assets that are all, Portal Bridge, are all in
the state of readiness with environmental work done and getting
ready to move to construction. So we have a huge need there.
The tools that you have been funding I think are good. They
need, as I said, some reliability to them over multiple years.
And we still struggle a little bit with RRIF and TIFIA and how
to use the loan programs as well as they might be deployed.
There I think there could be continued work. But in general the
programs are good if we have the sufficient resources.
I will say there is a challenge amongst all these programs
with the various flow downs. Each of the programs has their own
set of requirements, and some of those requirements are in
conflict with one another occasionally. We have been working
with the Department of Transportation to fix this, but this
continues as an effort I think to improve and streamline the
programs.
On the state-supported network, let me mention two things.
First, I think corridors like the Southeast High-Speed Rail
Corridor and other similar high-speed city corridors that today
have very little service but have lots of population of the
right distance are absolutely the place to focus.
And we think the work that Mr. Orthner and North Carolina
has done has been fantastic along with Virginia, and we have I
think huge opportunities in expanding and improving the entire
route from building on what is already done for the Piedmont
portion from Raleigh to Richmond, and to Washington.
Similarly, we have got markets we don't serve today, like I
mentioned Houston and Dallas, Las Vegas, L.A., are perfect
examples, of 3.5 million air trips, we have no service there at
all today.
And there, I think that the Crissy process and the RRIF
loans, and additional funding there again, and maybe letters of
intent, which gives us some reliability over time, will be
important ways to partner between Amtrak and the States and the
Federal Government.
But Amtrak is a willing investor we want to partner with
our states and use our resources to grow and improve these
services. Additionally, we need more equipment, we already have
an RFP out on the street to get new lighter-weight equipment
for these types of service growths.
Lastly, long distance, our focus is on two areas, one we do
need to--we aim to achieve PTC across our entire network, that
is a real focus for us, we think every passenger train deserves
positive train control implementation, we want to achieve that.
And second, we need to start really seriously dealing with
refleeting issues and long distance.
As we look ahead we have got our base equipment, and our
bi-level is 40 years old, and needs to be retired and replaced,
and that remains a major issue for us.
Mr. Price. Thank you very much. We are going to extend our
time here just a bit to let you answer. If additional funding
is provided to support expansions of the sort we are
anticipating here today. Is there any particular thing we
should hear from the host railroads. What kind of role would
you expect to play? Is the current level of cooperation
adequate? And what obstacles stand in the way of granting
Amtrak priority access? And would those obstacles, how would we
deal with those going forward?
Mr. Mitchell. Mr. Chairman, right now our role to address
your original question is not to decide what source of public
funding ought to be used and what set of improvements. That is
a public responsibility.
Ours is to do two things, one is to work in very close
cooperation with the public agencies, to make sure that the
program of projects make sense, that it stands on its own, it
can do what the public thinks it ought to do, and it describes
all the improvements necessary to be successful on its own, as
well as protect the interest of the freight services.
We model operations, we do that with each one of our
partners, whether it be in Southern California, or Illinois, or
any place else, frankly.
Once that project is finished we hand it over, we tell
people, you can look at it, you can question it, it is an open
book. Once that is done, it is up to the public to decide how
they want to proceed with the implementation of the program or
projects.
On time performance and assuring that the service that is
proposed can be carried out is a really difficult question,
because there is an awful tendency to say, I want to do this
very cheaply, I can get in the door, and there are tracks out
there, I am going to run the train, because there are tracks
out there.
Depending on the level of service you are going to operate,
depending on the reliability you wish, you could basically look
at the Pacific Northwest as a perfect example of what was done
correctly by the Washington State Department of Transportation.
A $400-plus million ARA project implemented over a couple
years within budget and on-time as far as we are concerned, has
brought the reliability that they wanted to buy with the
improvements they put in place, and whether it be the civil
system or the bottlenecks we had down toward Tacoma, and then
all those problems are gone away.
Now, are we problem free? The answer is no. I will go back
to what I said earlier about writing a proper schedule.
We are in the throes of beginning to write a really good
schedule for that service. We have done so in the Valley in
cooperation with the Amtrak and the State, and the joint powers
authority were tomorrow, very soon, like maybe in May, we will
have what we call a clock phased schedule, simple to
understand, simple to dispatch, simple to control, and oh, by
the way, is probably a very much improved scheduled from a
passenger point of view.
We hope those kinds of things, when you match that schedule
with the capability of the railroad, you are going to get good
on-time performance.
Mr. Price. Thank you, sir. Mr. Diaz-Balart.
Mr. Diaz-Balart. Thank you, Mr. Chairman. In your
testimony, Mr. Gardner, you mentioned the need to update
Amtrak's national network to serve the cities and the states
where the populations are increasing. And obviously there is
congestion and more congestion. What would your criteria be for
adding to Amtrak's network? You know, how would you determine
what cities should be served in these new routes, and you know,
could you just, simply just add routes to the current network
and continue to operate the existing long distance routes as
well?
Mr. Gardner. Thank you. Good question. So, we are in the
middle of working on a proposal we hope to share with Congress
later in the year which would, I think, outline what we think
are viable corridors for additional service. And the basic sort
of criteria is pretty straightforward and well known.
We look at population size, we look at the distance between
major cities and intermediate towns and cities between them. We
look at the existence of current railroad infrastructure and
its condition, and its capacity.
And we look at existing transportation service today.
Whether that is highway, air, bus what the current market is,
and what the conditions are in those markets. So, do we have
high levels of congestion, and all of those things. We
basically have a big matrix we are working on, we will be able
to sort of share with you what we think these city pairs are,
and the different elements.
Certainly, as my colleague said, this will be an open book,
the data will be what it is in terms of where it is, but the
Nation has added 118 million people since Amtrak was formed in
1971, and yet our network looks remarkably similar, and what
has happened is we have seen tremendous growth in the South,
the Southeast, the Southwest, the Mountain West and the West,
and our network has to adapt to those changing demands.
So, we do believe there is absolutely a role for long
distance trains as well, and the question is sort of; what are
the best tools to meet these different needs?
In some cases we would be better served I believe by having
corridor service connecting major cities. Most of our long
distance passengers are not traveling long distance. In fact,
only 8 percent are going end to end. The vast majority of our
riders are travelling less than 600 or less than 300 miles on
our long distance trains.
But those trains, because they are strung over 2,000 miles
in some cases, have tendency to be late, and may show up at
your town in the middle of the night, at the wrong time.
Mr. Diaz-Balart. And those were not taking, that doing the
long distance but they are not taking the entire route. I mean,
are they commuters or not commuters? What are they?
Mr. Gardner. They are not commuters but they are using the
train to make primarily discretionary trips that are not
typically business trips. There are some business trips, but
they are going to visit friends and family, they are going to
access. I mean a perfect example is in North Carolina we have
got, you know, folks who are taking the train from New York to
points in North Carolina.
And they could do that by driving, or flying, but they
chose the passenger rail option. Very few are, for instance,
taking the train from New York to New Orleans, because that is
roughly a two-day trip, and it is quite expensive in order to
do it.
And so we see the sweet spot for rail, and it is sort of
400-mile corridors or less, where we can offer a reliable
product that is essentially several times competitive with
driving.
We have an opportunity to help take drivers off the road,
and give them an alternative that they don't have today, and
many of those markets served long distance today are just
inadequately served. There aren't enough trains, and they are
not reliable enough, and then they are trip-time competitive
enough. We would like to make them better.
Mr. Diaz-Balart. Let me go to you, Mr. Orthner. You have
opportunities and challenges, right? Because you are in a
growth state, so how do you decide about, you know, where your
priorities are when you are looking at expanding, potentially
expanding, passenger rail service?
Mr. Orthner. Excellent question, Congressman. So, the
states, I will just say first and foremost, the states are
required by the Federal administration to develop a state rail
plan. And so we set our priorities kind of around that plan,
which engages all the communities throughout the state, and
considers a lot of different factors, you know, in developing
the services.
So, you know, we obviously, when we look at these types of
corridors for passenger rail development, we are looking at
volumes of passengers where communities that are struggling
with congestion can take advantage of an alternate system to
utilize.
Of course that is also in the constrained funding
environment, too, we can only invest, you know, right where
strategically we get the most benefit cost.
So, that is generally what we are--that is kind of the
criteria that we follow right now, and as I have mentioned
before, and Mr. Gardner mentioned, you know, the Southeast
Corridor is kind of that corridor that we are looking at as
sort of the location of great investment.
We did that with the Piedmont Improvement Program, we would
like to continue to do that with this line of work.
Mr. Diaz-Balart. Thank you, Mr. Chairman. My time is up. I
yield back.
Mr. Price. Thank you. I want to turn, as we must, to the
current budget submission from our President, and ask you,
each, in turn to comment on the implications of those kinds of
budget numbers for the work you do. I think it is fair to say
the budget, once again, targets Amtrak, proposing a $455
million cut, compared that is to the bill Congress just
enacted.
And also, I will also ask you to comment on the
administration's proposal that the states would take over
increasingly the cost and the responsibilities of Amtrak's 15
long distance routes.
So I will just ask each of you briefly to reflect on the
implications of this budget proposal. Starting with you, Mr.
Orthner. North Carolina is served by four long distance routes
that all originated in New York, they go south to New Orleans,
Savannah and Miami. What kind of challenges would you face in
trying to take over these routes?
Mr. Orthner. Thank you, Mr. Chairman. Very briefly,
obviously this is an unidentified budget item for the state to
take on such a service that would be number one. Number two, it
would create a new paradigm where we, again, would have to work
with multiple states.
This isn't just true for us, but I am sure it would happen
across the Nation, where some states would want to participate
and perhaps some, maybe to a lesser extent. So that would kind
of challenge certain states that weren't planning to invest
that way. And so those are the two major challenges I see.
Thank you, Mr. Chairman.
Mr. Price. Mr. Gardner for large parts of the country
including many rural communities, long distance service is the
only available the inner city passengers realize, as you have
just stressed. So, how would this change impact Amtrak's long
distance service in these communities? I am asking that, but of
course would welcome comments as well on the overall budget
impact.
Mr. Gardner. Thank you. Well, as you know, we have just
received the document as well, and I haven't been able to
really see the details yet, and so we are looking to understand
better the administration's proposal here.
But our view is that the--I mean to Mr. Orthner's point,
the long distance network has been proposed at various times to
be funded by the various states, I think that poses some
obvious coordination challenges, and there are a core set of
long distance routes which we think make sense in the future of
the network, and for which Federal support will be necessary.
There are a number of routes which we do think have
opportunities for expanded corridor service, and of course we
today have, through the Section 209--a strong partnership with
the states to support and fund corridor services, many
corridors today exist on long distance routes, so there are
opportunities to have corridors today that are served by long
distance trains instead of by corridor trains.
But strong partnership would to exist between the states
and the Federal Government and Amtrak to support that.
Certainly, it would be a big transition to start adding those
services, and I think it would appropriate for Congress to the
reauthorization, and through the activities at the subcommittee
to look at the right partnership between the Federal Government
and the states, as part of the modernization of the network,
because there clearly are interests that are both local and
intrastate, and national, that would be served by such an
improvement.
Mr. Price. Quickly, any observations on the overall impact
of a cut of this magnitude?
Mr. Gardner. Well, certainly, we prepare to request the
full $1.8 billion authorized by the FAST Act, that is the
maximum we are permitted to request from your subcommittee, but
we will include a long list of things that we think are worthy
of additional funding, so we see really no shortage of things
that require continued Federal investment, and partnerships
with our states.
So, you can be sure we will be asking for the full
authorized amount, and we think it is essential for us to
continue the progress we have been making on the network.
Mr. Price. Thank you. Mr. Mitchell, from an operational
perspective. How would this proposal affect the host railroads?
Again, I am asking about the dollars, I am also asking about
the increased state responsibilities. I would assume it is
easier to work with one centralized entity, like Amtrak, than
multiple different states. But then, again, I am not sure what
the extent of your experience is and how you would evaluate
this.
Mr. Mitchell. Mr. Chairman, the question before everyone
with respect to the budget is really one that is a public
debate, not ours; our responsibility is to take what the public
wants to do and try to implement what they want to as best we
can.
I have touched several times on two or three central ideas
here. One is, good schedules are really important; the second
is, you have got to match what you want to do with the
capabilities of railroad, both the operating capabilities and
the physical capabilities.
And thirdly, we look at the passengers principles as the
guidance here, so if change is to occur we are going to apply
the passengers principles, because while we certainly want to
accommodate to the extent possible that the needs of the riding
public, we have obligations as well to all of our freight
customers.
We have got to balance those so that both are successful,
and where we will turn to is our passenger principles, and look
at any change that comes forth, whether it be from Amtrak,
whether the states, and we have very good relationship with all
the states we work with on passenger service, and see what they
have to say. And then we will go through the same process we
always do, we will take a look at it, understand it, discuss
it, and try to do the best thing.
Mr. Price. I appreciate that approach, however, when we
consider the kind of constraints that your roads, and Amtrak
are both facing, the need for deconflicting the service in
these large metropolitan areas especially, the investment is
enormous, that is required.
I am not asking you to become a budget expert but I am
asking you to reflect on the kind of investment that is going
to be required to--you know, this isn't just a matter of your
or Amtrak's goodwill, or the kind of pressure you can muster.
You know, these are genuinely difficult issues, and it
seems to me that the kind of investments we are talking about
here, are inevitably a part of easing those pressures, and
making possible win-win solutions especially in these congested
urban areas.
So, I am asking you to comment on that and the kind of
Federal investment you would give priority to as you survey
this scene, and think what it is going to take to make it work
going forward.
Mr. Mitchell. Mr. Chairman, several people have mentioned
today the importance of a continuing source of funding, the
importance of sufficient funding to match whatever the public
wants to do. So, if the public says, I want two or three round
trips a day between city pairs that means something to us. We
will apply the passenger principles and there will be a cost.
If the passengers group says, we want to have on-time
performance 100 percent of the time, there is a cost. There are
cost implications every time you look at this question, and our
responsibility is to make sure that all parties understand what
those cost implications are, so they can make a well-reasoned
decision.
That is the role we play. We understand that these are
expense initiatives, you look at California, you look at
Washington State, you even look at Illinois, they have invested
sizable amounts of money over the last 20-some or maybe 30
years, over $2 billion have been invested of public monies in
our properties to support passenger rail operations.
That kind of opportunity is going to be part and parcel of
the discussion that you are now suggesting we are now to have.
We certainly would be present to help that discussion, but at
the end of the day it is a public decision as to how you want
to shape ground transport policy in the United States.
Mr. Price. We understand where the buck stops as regards
Federal funding. No question about that. But we are attempting
to sort this through with good, honest input from the various
stakeholders. And you have all three contributed to that today.
We appreciate your being here, appreciate candor as to the
challenges we face.
And amid all the talk of difficulties and challenges, there
is a vision here. There is a picture going forward of increased
reliance of on passenger rail, increased demand, increased
ability of Amtrak and other railroad partners to meet this
challenge. So there is an excitement about this too, and we
would overcome the difficulties, at the same time we want to be
realistic about what it is going to take to get there.
Mr. Diaz-Balart.
Mr. Diaz-Balart. Very briefly, Mr. Chairman, I want to
thank you for I think a very good hearing. I thank the
witnesses in particular for I think a very good hearing. If
history is any guide, Mr. Chairman, we will obviously look at
the President's budget request with great respect, but then we
will fulfill our constitutional duties.
And we will do it, particularly how this committee has done
it, this subcommittee has done it I think in a very responsible
way, in a cooperative way. I look forward to continuing working
with you Mr. Chairman, and the members of the subcommittee.
I think as long as we get an allocation that allows us to
do that I think we will, hopefully, be able to put a bill
together that we and the country will be very pleased, very
proud of, and I will once again, remind everyone, what you and
I have said multiple times, that while there are lot of
conversations about infrastructure bills, and we are hoping
that some infrastructure bill happens, in the meantime, Mr.
Chairman, this is the infrastructure bill and so, again, I
thank each and every one of you for testimony, I look forward
to continue working throughout the subcommittee, and with your
leadership, Mr. Chairman.
Mr. Price. Thank you. I want to remind the witnesses in
closing that our staff is going to be in contact with you and
your organizations regarding any questions that members might
submit for the record. We would appreciate you returning
information for the record to the committee within 30 days from
Friday. And that will let us publish in a timely way the
transcript of today's hearings.
With that, Thank you very much. And the subcommittee is
adjourned.
Wednesday, March 13, 2019.
STAKEHOLDER PERSPECTIVES: BUILDING RESILIENT COMMUNITIES
WITNESSES
LAURA LIGHTBODY, PROJECT DIRECTOR, FLOOD-PREPARED COMMUNITIES, PEW
CHARITABLE TRUSTS
FRANKLIN MOON PH.D., PROFESSOR, CIVIL AND ENVIRONMENTAL ENGINEERING,
RUTGERS UNIVERSITY
JENNIFER RAITT, DIRECTOR OF PLANNING AND COMMUNITY DEVELOPMENT, TOWN OF
ARLINGTON, MA
CAROL HADDOCK, DIRECTOR, HOUSTON PUBLIC WORKS
Mr. Price. The subcommittee will come to order. Good
morning everyone. I am pleased to have this opportunity to hold
a hearing on how we can plan, design and build resilient
communities.
After several years of increasingly severe weather events
in my home State of North Carolina and around the country, and
after tens of billions of dollars appropriated for disaster
relief and emergency programs, much of it coming though this
subcommittee, we must become more intentional about applying
the concepts of mitigation and resiliency into our Federal
Housing and Transportation programs across the board.
We also need to identify ways we can support these efforts
at the State and local level. Joining us here this morning are
several experts in this field with both research and on-the-
ground experience. Laura Lightbody, the Project Director for--
the Project Director of Flood Prepated Communities, Pew
Charitable Trust; Franklin Moon, Dr. Moon, Professor of Civil
and Environmental Engineering at Rutgers University; Jennifer
Raitt, the Director, Planning and Community Development for the
town of Arlington, Massachusetts; and Carol Haddock, the
Director of Public Works for the city of Houston, Texas. Thank
you all for being here this morning.
Each year, in addition to supplemental appropriations for
disaster relief, this subcommittee appropriates billions of
dollars for annual programs at the U.S. Department of
Transportation, and the Department of Housing and Urban
Development. These include highway and transit grants to States
and local agencies and the Community Development Block Grant
for municipalities among others.
I think we all know that we have come a long way with
respect to disaster relief. I am a veteran of these discussions
by virtue of the disasters we have had in North Carolina over
the years. And I remember very well the discussions we had
after the Katrina disaster, trying to preserve the concept of
mitigation, and preserve a dedicated flow of funds to apply to
limit the possibilities of future damage and future disasters.
Those debates, I think, have been moving in a positive
direction, partly because we have had such repeated experience
with disaster.
So it is not the debate it once was when it comes to FEMA,
or when it comes to CDBG disaster relief, or other funding. It
is not the debate it once was as to whether we should build
back more resiliently, or whether we should mitigate against
future disasters.
So we have come a long way. But now the question arises,
and really is overdue for consideration, what about the base
programs? Why aren't we building smarter from the start, moving
toward a proactive posture when it comes to strategic and
capital and operations planning at the DOT and HUD agencies?
We have taken some steps in this direction. The MAP-21
highway reauthorization for 2012 required States and localities
to incorporate assets management into their long range plan.
Meanwhile several modest pilot programs to assist States and
our grantees with resiliency planning are now winding down.
Separately, in 2015, the Obama administration promulgated
the Federal Flood Risk Management Standard which encouraged
Federal agencies and, by extension, State and local entities
that rely on Federal funding, to consider current and future
risks when taxpayer dollars are used to build or rebuild near
flood plains. This effort shows some initial promise, but
President Trump repealed it. He repealed the FFRMS in August of
2017, ironically, just a few days before Hurricane Harvey made
landfall. This reversal just defies explanation. It is just--I
don't know of any good explanation.
The aversion of the administration to the scientific
reality of climate change, if that's partly what is going on,
that shouldn't impede sensible efforts to encourage resiliency
and strengthen our local communities. So despite some setbacks
of the Federal levels, some towns and cities have stepped up
their own comprehensive resiliency plans, as we'll learn here
this morning. There is some interesting action at the State and
local level, but the progress remains quite uneven. The high
quality data necessary to inform these efforts can be difficult
to obtain. Furthermore, cost-benefit analyses used by
governments sometimes fail to account for the long-term
benefits of incorporating resiliency from the start of a
budget.
Finally, we need to understand that building resilient
communities isn't about just storm proofing. It is also a
potential catalyst for job creation, economic development,
sustainable growth and the wise stewardship of taxpayer
dollars. We want to make sure the Federal Government is an
active partner in these efforts.
So we're excited to have this panel before us today. We
expect a robust discussion, and we appreciate your being here.
Before we move to our witnesses, let me recognize or
distinguished ranking member, Mr. Diaz-Balart, for his opening
statement.
Mr. Diaz-Balart. Mr. Chairman, I thank you for this
hearing. I, by the way, am also excited about this panel that
is before us today. This is now the fourth hearing in 3 weeks
where we have had a chance to hear from stakeholders. They are
doing important work in the area that this subcommittee has
responsibility for.
Now, there are a few topics that are more important to this
subcommittee than building obviously stronger communities. But
I am particularly pleased, Mr. Chairman, that our witnesses
bring this perspective from both transportation and housing
from the local level, where these programs are not only
implemented, but frankly, where the impact is felt. And from
the perspective of research organizations that can look across
government programs to offer ideas. And again, some good ideas
that we can hopefully adopt.
As you know, Chairman Price and I have been busy for the
last couple of years on this committee. First, we made
significant infrastructure investments through the regular
appropriations process through our bill. The 2-year budget deal
allowed us to make some frankly selected investments in our
Nation's infrastructure, $20 billion, by the way, over 2 years.
That is why both of us have talked about, from time to time,
how this truly is the infrastructure bill. There are great
theories and ideas out there. We hope that there is some other
bipartisan infrastructure bill. But what we do know is that the
work that we have done has, in essence, been the infrastructure
bill for the last number of years.
So on top of the regular spending, I think we have done
some important work beyond those specific investments, and that
is to make our communities more resilient.
As a response to the storms in 2017, Harvey, Irma and
Maria, we provided $35 billion through the Community
Development Block Grant DR program to help devastated
communities obviously recover from those storms. But with this
chairmanship that we have, with the chairman, myself and our
staffs, by the way, we set aside nearly $16 billion for a new
mitigation program to help communities, again, make smart
investments that I am confident that it is not only going to
help save money in the future, but potentially save lives.
We initiated this new mitigation program right here in this
subcommittee, in the House. We were able to convince the full
committee, the House, and, obviously, the Senate joined along.
And we are pleased at having done that.
Investments in resiliency are equally important, not only
as we consider housing programs, but also transportation and
infrastructure. Both of these programs are important and are
playing an important role in recovery after those storms in the
past 2 years. But this is key, we want to ensure that those
transportation dollars are allocated with an eye towards
reducing future costs. That is what we have told our
colleagues, that is what we are committed to do. This topic of
disaster recovery and resiliency hits close to home, as the
chairman said, for him, but also for me.
Our State saw devastation yet again last year with
Hurricane Michael and Florence. So it is our duty to be a
Federal partner, not only in the near term as our communities
work to recover, but also in the long-term so that our
communities have the tools they need to thrive, and to recover,
and to rebuild for years to come. But we also need to
understand how the range of Federal programs fit together so
that programs under the jurisdiction of this subcommittee work
successfully.
It is our job also to support smart decisions where the
vast majority of Federal resources are deployed and that is
obviously at the State and at the local level. Your testimony
today will help support--we hope, maybe not--the decisions that
we have made in the last few years, again, saving taxpayer
dollars over the long term. We are very serious about making
sure that that money is spent in an accountable fashion. It is
well spent, it is not just thrown away; again, something that
this subcommittee started and this subcommittee has a lot of
ownership in. So I look forward to hearing from you and thank
you for being here.
Mr. Chairman, I think this is going to be a very
interesting subcommittee hearing. Thank you, sir. I yield back.
Mr. Price. Thank you. We will ready for our witnesses. We
will recognize each of you for 5 minutes for your oral
presentation. We will be happy to include your full statement
in the record. And then what will follow will be 5 minute
segments of questions. Let me remind everybody that the 5
minutes is supposed to include both the question and the
answer, if everybody can keep that in mind with members in turn
from both sides of the aisle posing questions to you as they
wish.
So let's start with Ms. Lightbody and then we will hear
from Professor Moon, then Ms. Raitt, and then Ms. Haddock, in
that order, if that is satisfactory with you.
Ms. Lightbody.
Ms. Lightbody. Chairman Price, Ranking Member Diaz-Balart,
and members of the subcommittee, thank you for your invitation
and time dedicated to discussing ways that we can help the
Congress support a more resilient infrastructure. As you said,
my name is Laura Lightbody, I oversee the Pew Charitable Trusts
flood-prepared communities initiative aimed at reducing the
impact of flood-related disasters on the U.S. economy,
communities, and environment, by improving public policy. I
will start by presenting further data on increasing risk and
costs of natural disasters followed by policy recommendations
Pew offers to this committee.
Why do we focus on flooding? It is the most pervasive
natural disaster affecting all 50 States, both inland and
coastal. It respects neither jurisdictional boundaries, nor
political affiliations. In the last 10 years, flood-related
disasters have accounted for nearly three-quarters of all
Presidential disaster declarations. It is also the most costly
of natural disasters. The Nation--to the Nation, it has cost
$800 billion since 2000. As communities and cities have
expanded over time, the natural landscape has been replaced by
impervious services, like roads and parking lots, homes and
buildings, increasing the likelihood of flooding leading to
more lives lost, higher costs incurred, and more structures
destroyed.
Last fall, Hurricane Florence ravaged the Carolinas with
over 30 inches of rain, 28 wastewater treatment plants, 40
hospitals, 1,200 roads, and dozens of homes and schools were
impacted, causing ripple effects throughout the community.
These events, and the resulting devastation are becoming all
too familiar. The challenge before this subcommittee is how to
make these much-needed investments in infrastructure, while
insuring these assets are not washed away by the next major
flood.
Today, the majority of financial burden of these disasters
falls to the Federal Government, the costs are immense. Some
additional numbers: Since 2000, FEMA's public assistance
program has obligated $80 billion to disasters; the Federal
Highway Administration's emergency relief program, nearly $15
billion; HUD's CDBG-DR program, $64 billion for natural
disasters and supplemental funding. Yet in the face of these
enormous and mounting costs, the Nation has underestimated risk
and underinvested in activities that reduce losses and provide
long-term savings. As you pointed out, mitigation.
Mitigation can take on many forms uniquely suited to serve
community needs: acquisition of flood prone homes, limiting the
extent of impervious surfaces, elevating utilities, restoring
wetlands, and most significantly, not putting people and
buildings in harm's way in the first place.
Research shows every dollar invested in such activities
saves society $6 in avoided losses. Yet, perhaps most alarming,
according to a 2016 GAO report, of the $277 billion that the
Federal Government has spent on disasters over a 10-year
period, FEMA spent less than $600 million towards mitigation.
That is less than it costs to build the National stadium here
in Washington, DC.
The good news is that this subcommittee has an opportunity
to change that dichotomy by building on areas that the good
work that has already been done. In this area, Pew offers three
recommendations for your consideration: One, plan with the
future in mind, invest in mitigation, both DOT and HUD have the
untapped potential to guide risk reduction measures before the
next disaster strikes. This could be done at DOT by including
mitigation as merit criteria for BUILD grants, requiring HUD
CDBG-DR grantees to incorporate mitigation into their
applications. Most significantly, dedicating resources
specifically towards predisaster mitigation within the Federal
Highway administration Program.
Two, build and invest smarter. A new poll released today by
the Pew Charitable Trusts demonstrates that more than three-
quarters of Americans support a requirement that Federally
funded infrastructure be constructed to better withstand the
impacts of flooding.
However, we lack such policy today. We operate under
standards developed in the 1970s that don't account for
tomorrow's risks, such as sea level rise and extreme weather.
Pew recommends that all Federal dollars invested in
infrastructure come with a requirement to account for future
risks.
Lastly, invest in and value the role of nature in reducing
risk. We recommend dedicating specific funding toward green
infrastructure, wetlands and parks that can provide self
sustaining flood defenses that also support ecosystem
restoration and community amenities.
In closing, communities around the country are eager to
become less vulnerable to natural disasters, but lack the
tools, in some cases, resources and guidance to do so. The Pew
Charitable Trusts looks forward to working with this
subcommittee to find solutions to these important issues. Thank
you.
Mr. Price. Thank you very much. Dr. Moon.
Mr. Moon. Chairman Price, Ranking Member Diaz-Balart,
members of the subcommittee, it is a pleasure to be here today.
I am really happy to be able to talk and share some thoughts on
transportation infrastructure resilience. My name is Franklin
Moon, I am a professor of civil engineering at Rutgers
University. And I am here on behalf of the Center for Advanced
Infrastructure and Transportation, U.S. DOT, University
Transportation Center, that is focused on addressing some of
the challenges associated with our transportation systems.
This focus is not accidental, but it grows out of
challenges inherent within our region. We are at the heart of
the Northeast corridor, and our local region, while
geographically small, is home to roughly 10 percent of U.S.
population. It is also home to diverse and dense transportation
infrastructure that includes some of the oldest and most
heavily utilized in the country. Like many of you, we find
ourselves on the front lines of the new and emerging threats
related to extreme weather events.
Before I discuss some areas where I believe continued
attention is needed, I think it is important to provide some
context. So first, it must be said that our transportation
infrastructure system remains a wonder of the world. But if we
are honest, it only comes into our collective consciousness
when there is a failure or disruption. It is an important part
of every one of our lives, it is an engine and key
transformative driver behind our ever-expanding and evolving
economy, and it has largely been taken for granted.
Perhaps this is understandable when you consider how
reliable our transportation systems are on a daily basis, but
it is not without consequences. The slow relentless and
inevitable degradation of our transportation infrastructure was
left unchecked for too long. For example, as of 2017, over
54,000 bridges were classified as structurally deficient and
one out of every 5 miles of highway pavement were in poor
condition.
At the same time, these systems now facing new threats,
particularly associated with extreme weather. The resulting
disruptions, whether they are due to the slow march of
deterioration or more acute events, can cause large economic
damages and severe cascading impacts on other infrastructure
systems and the communities that they serve.
Over the last decade or so this vulnerability has attracted
significant attention and progress has been made. But the fact
that we are sitting here discussing the need to improve
infrastructure resilience means that more needs to be done. And
in particular, there are three areas that I would like to bring
to your attention.
First is the development of a uniform resilience metric for
transportation infrastructure. The old adage of what gets
measured is what gets improved applies well here. The higher
level guidance documents that are available from Federal
highway and others all point to the need to operationalize
resilience. We believe one of that most effective ways to do
this is to develop a sound uniformed means of measuring
resilience, as imperfect as that may be.
I mentioned previously that today there are over 54,000
structurally deficient bridges; well, in 2008 there were over
72,000 structurally deficient bridges. I can tell you this,
because this metric is uniformly tracked. I can also tell you
that the reason it has dropped by nearly 25 percent is that
every State, county and municipality that owns bridges is
actively engaged in minimizing this number because it is
tracked.
To date, there is no accepted and uniformed means of
measuring the resilience of our transportation infrastructure
systems, and we see this as a key barrier to operationalizing
the focus on resiliency.
The second item in the collection of performance data, so
to better understand the many interrelated factors that lead to
both good and poor performance, as well as the associated
consequences, it is necessary to measure and track our
infrastructure system perform when they are under stress.
Historically, this has been done in qualitative low resolution
manner in the weeks and months that follow an event. Today,
driven by advances in sensing technology, engineers now have
the ability to monitor critical infrastructure in real-time
during events.
We also have the ability to efficiently capture dense 3D
data of entire communities, both before and after events
through the use of remote sensing, technologies deployed on
vehicles, on drones, even on satellites. Such data carries
important information about what works and what doesn't work.
And it will help ensure that we learn all the lessons available
from future events.
The final item, and perhaps the most important, is our role
as universities and, in fact, all of our roles in trying to
attract the best and brightest to STEM fields. As I am sure you
are all aware, this is not a need that is unique to
transportation infrastructure, but rather, a national challenge
across many domains.
In addition, our role at universities needs to continue to
expand beyond traditional undergraduate and graduate students
with a focus on non traditional aid students, as well as
current training current workforce in the use of emerging
technologies and paradigms that have proven to improve
resilience.
In closing, I would, again, like to thank you for the
opportunity to share some of our perspectives. And I look
forward to this discussion. Thank you.
Mr. Price. Thank you very much.
Ms. Raitt.
Ms. Raitt. Good morning. On behalf of the American Planning
Association, APA, thank you Chairman Price and Ranking Member
Diaz-Balart for holding this hearing on a subject so vital to
the health and prosperity of our Nation's communities. Thank
you, Representative Clark, who represents the town of
Arlington, Massachusetts, for her support and leadership.
Today's hearing could not be timelier. Recent events have
demonstrated the critical challenge we face to improve the
resiliency of our communities in the face of hazards, extreme
weather and a changing climate. APA and planners across the
country are committed to creating just, healthy, and prosperous
communities that expand opportunities for all. Safer and more
resilient communities are central to that vision. I am the
Director of Planning and Community development for the town of
Arlington. The town has been a leader in working to address
climate change and environmental goals. The town is also
working through a regional partnership to address resiliency.
In 2015, the Metropolitan Area Planning Council, Metro Mayors
Coalition, formed the climate preparedness task force to
facilitate coordination among 15 municipalities, State and
Federal agencies. The task force has increased to municipal
capacity to address and assess vulnerabilities, bolster
coordination, enhance awareness of infrastructure resilience,
and worked on ensuring the data for flooding and extreme heat
is consistent and shared.
Municipalities have performed vulnerability assessments
through technical assistance. These regional collaborations are
an important model. They strengthen relationships, build
capacity and identify priority actions.
As the task force works on these issues, funding and
support from Federal agencies is more critical than ever. This
includes coordination efforts among agencies, as well as grant
and financing to enhance resilience in critical public
infrastructure. Massachusetts provides planning grant funds for
communities to engage in vulnerability planning. Arlington
received one of these grants which allowed us to examine
strengths and vulnerabilities, while prioritizing resilience-
building actions. The top priority identified was to address
storm water overflow, which has recently and historically
caused significant damage to homes, businesses and other
properties. The town leveraged this planning process, and
received a grant to develop and implement ecologically
sensitive flood management measures. These planning and action
grants illustrate the importance of local planning that
addresses and mitigates the effects of new conditions, flooding
in Arlington's case, and raise the profile of a need to tailor
future land use policy to protect critical infrastructure.
As the Massachusetts experience suggests, communities
across the country are focusing on resilience planning as a way
for preparing for future shocks and stresses. True resiliency
policy is comprehensive, and does not seek simply to harden
infrastructure or rebuild, following disaster, but aims to
address social, physical and economic systems together.
Resiliency planning demands that we answer two critical
questions: One, how do we adapt to recurring events? And, how
do we recover better and stronger from events so that the next
and subsequent events are less damaging? The answers to these
questions should inform how Federal infrastructure housing and
community development are made.
Federal infrastructure programs are an essential part of
advancing local and regional resiliency. The funding programs
under the jurisdiction of this subcommittee are among the most
important and proven Federal resources for communities. While
we are proud to advocate for more Federal housing and
transportation resources, we know that the Nation needs both
more and better investments. Competitive grant programs could
do more to increase the importance of resiliency, and integrate
these efforts.
Finally, the support following a disaster through CDBG-DR
represents an opportunity for improving integration with the
resiliency-led approach to recovery. FEMA and HUD can improve
the coordination between their required plans with funds
prioritized using resiliency focus, emphasizing alignment with
local planning.
There is a growing recognition that Federal disaster
recovery funds should not be used simply to build back to the
status quo, but rather, to build back in a much more resilient
way using innovative approaches if possible. While resiliency
plans will be crafted and implemented locally, there is an
essential partnership between communities and the Federal
Government.
Improving the coordination of Federal investments with
local resiliency plans will heighten the impact of these
efforts while avoiding inefficiency and compounding future
losses. Thank you, again, for the support of these critical
tools. APA is proud to support continued funding for these
essential programs, and we urge you to reject proposals to
slash the funding and to boost the resources instead that are
available to continuing to advance resiliency and expanding
opportunities and equity.
Thank you, again, for this opportunity to testify. I look
forward to your questions.
[The information follows:]
Mr. Price. Thank you very much. Ms. Haddock.
Ms. Haddock. Good morning. Chairman Price, Ranking Member
Diaz-Balart, and members of the Appropriations Subcommittee.
Thank you for the opportunity to discuss infrastructure for
resilient communities. My name is Carol Haddock, and I am the
Director of Houston Public Works, the department that is
responsible for Houston's public streets, drainage, water and
wastewater infrastructure, as well as permitting inspection of
development for more than 2.3 million Houstonians. In this
role, I am also in the midst of recovery from Hurricane Harvey.
Houston has a significant flooding history, but we are
committed to build Houston forward towards a resilient
community that will be ready to withstand the next storm,
because we all know there will be a next storm. However, we
still face significant challenges and resiliency today.
I also currently serve on the board of direction of the
American Society of Civil Engineers, ASCE, and I am a licensed
professional engineer in the State of Texas. ASCE appreciates
the opportunity to discuss the state of our Nation's
infrastructure, and how we need to insure more resilient and
sustainable infrastructure when rebuilding these vital assets.
Every 4 years since 1998, ASCE has prepared a rating of our
Nation's infrastructure in our infrastructure report card. In
the 2017 report card our Nation's cumulative grade was a D-
plus. Poor grades reflect an underinvestment in our
infrastructure and a lack of thoughtful planning for the future
and its impacts on our infrastructure network.
Decades ago, and even a century ago in some cases, we built
our current day infrastructure networks. But with any
infrastructure investment, time and the elephants have taken
their toll. As our Nation looks to rebuild, we urge for
thoughtful leadership for the future. ASCE believes that all
infrastructure programs and projects supported by
infrastructure investment legislation must meet the following
fundamental criteria: Investments must provide substantial
long-term benefits to the public and the economy; project costs
must be considered over the entire lifespan, including design
building and operating and maintaining that infrastructure;
projects should be built to be sustainable and resilient and
Federal investments should leverage, not replace, State, local
and private investment and infrastructure.
It is through this framework that ASCE urges lawmakers to
support the following: We should build and rebuild resiliently.
ASCE's 2017 infrastructure report card emphasizes the
importance of preparing for the future by ensuring our
infrastructure is more resilient and sustainable. For every
dollar spent on mitigation during rebuilding, the Nation can
save $6 by avoiding future disaster costs.
We should support the Federal Flood Risk Management
Standards. ASCE supported the Federal Flood Risk Management
Standards previously that considered mitigated flood disaster
risk for federally funded development in flood-prone areas. And
ASCE believes that the FFRMS is a fiscally responsible,
commonsense approach to mitigating flood disaster risks and
should be a part of any sustainable agency and organizational
planning.
We urge Congress to develop a Federal flood risk standard
to safeguard our Nation's infrastructure, protect businesses
and communities and conserve taxpayer resources. We support the
appropriate use of lifecycle cost analysis or, LCCA. ASCE
believes that infrastructure project owners should consider the
total lifecycle cost when funding new projects, including the
maintenance in operation until the end of its serviceable life.
It is an unfortunate reality that minimizing the upfront
investment can result in infrastructure that falls short in
resilience and can cost more to maintain in the long term.
Support standards and codes. Responsible design and
construction are essential to important quality of life, assure
safety and durability, and to minimize the vulnerability of our
Nation's infrastructure. ASCE supports the development,
adoption and enforcement of a national model building code.
Disaster-resilient communities, with safe and sustainable
buildings, can be achieved through design using performance
base codes and construction practices in concert with the code
administration program that ensures compliance.
And we support research and development. Increased
investment, while clearly needed, must be matched with a robust
R&D program that can lead to new approaches, materials and
technologies to ensure our infrastructure is more resilient and
sustainable.
ASCE supports R&D programs coupled with demonstration and
commercialization programs, such as Houston's partnership with
the nonprofit, Accelerate H2O, to create the Nation's first
water technology hub for municipal water innovation and
emergency response.
ASCE thanks the committee for holding this hearing on a
topic that affects quality of life, economic prosperity and
livelihood of every American. ASCE and its 150,000 members look
forward to working with the U.S. House Committee on
Appropriations to improve America's infrastructure so that
every family, community and business can thrive. Thank you.
Mr. Price. Thank you very much. I want to thank all of you
for your statements. Very, very substantive and helpful, and
very well-timed. Nobody was more than 5 seconds off. That is
pretty impressive, something I don't think members of this body
can come close to matching, so thank you.
I also am grateful, Ms. Haddock, that you brought in the
perspectives of the American Society of Civil Engineers, as
well as your experience with the city of Houston, just as Ms.
Raitt did with the American Planning Association. Those
national perspectives are helpful and complement your local
experience.
All right. Well, let's turn to our questions. The examples
we have, the good examples, I would say, from Houston and
Arlington, two very different communities, but still here for a
reason this morning. Because you have taken a proactive
approach to resiliency in Houston, of course, in the aftermath
of a horrible disaster. But in both communities looking
forward, this isn't happening everywhere. In many, many
communities, large and small, infrastructure is still being
built without integrating future risk. So my question is, how
do we induce other States and cities to build resiliency into
their federally assisted infrastructure projects, including
both transportation and housing? We welcome input from any
panelists on this, but I will start with Ms. Lightbody and Ms.
Haddock in referencing transportation in particular.
MAP-21 required at grantees include resiliency planning in
asset management in planning documents, but not in specific
projects. Should we, with FHWA and FDA appropriations, or
authorizations, should we include requirements for resiliency
in the specific project proposals that are funded by the base
program? If you can address that specific question, but
anything more generally you would like it say about the
question I posed.
Ms. Lightbody, I will start with you.
Ms. Lightbody. It is clear when you look around with the
communities that we have here, and communities that are
presented around the country, that there is a desire to
undertake more mitigation. If you are able to use
appropriations from this subcommittee to drive and encourage
more committees, and give them the incentive and ability to
undertake mitigation, that would be a good use of Federal
dollars. You could incorporate that into the programs you
mentioned. There are other programs that could be incorporated
into, but making it a required selection criteria, so that
communities have the opportunity to use mitigation will drive
more mitigation.
The programs that do exist at the Federal level have an
overdemand for mitigation. There is not enough money on the
table for communities to undertake mitigation. Certainly within
the transportation sector, the money at HUD, the $16 billion
that this subcommittee was able to afford, was a great first
step, but we need to institutionalize that, make regular,
sustained investments in mitigation.
Mr. Price. Ms. Haddock.
Ms. Haddock. So in some ways, the answer to that question
you are raising is a yes. We certainly, from a local
stakeholder point of view, if the programs require that that be
addressed up front the resiliency in each individual project,
then it will be included. It is a pretty straightforward answer
to that question.
But I will say that a lot of the way that the funding comes
to us that it does not necessarily currently encourage the
lifecycle analysis or the things that would drive us to a
resilient answer. And so, we are looking at the upfront costs,
but we need to be looking at the full investment costs
throughout the lifecycle of that infrastructure. And if we do
so, we will be driven to more resilient solutions, because we
will pick solutions that reduce the future damage, the future
recovery, and hopefully, the future operations and maintenance
costs as well.
Mr. Price. Ms. Raitt, let me turn to you and turn to HUD.
What could HUD do to encourage recipients of Federal funds to
include resiliency requirements of federally supported
projects? Basically, the same question as I posed regarding
DOT.
Ms. Raitt. I think the primary thing that could happen from
the standpoint of we are an entitlement community in Arlington,
Massachusetts. I think one of the primary issues is really in
the criteria and the selection of projects. Thinking about the
connection of those investments in relationship to data that
has been collected, having good participation, and having
really a smart regulatory process to back that up, that would
then make for directing better investments. So the planning
piece is really the underpinning to all of these programs.
Without that good planning, none of these investments make
tremendous amount of sense.
So we want to make sure that planning is really integrated
into that process, and that the resulting criteria is also put
in effect and then directed to local municipalities who receive
entitlement or other types of funds from HUD.
Mr. Price. And the way to achieve this, you are saying, is
through explicit requirements for these programs?
Ms. Raitt. Explicit requirements in the grant programs, as
well as directing criteria to applicants--to grantees rather of
those grant funds.
Mr. Price. Thank you. Mr. Diaz-Balart.
Mr. Diaz-Balart. Thank you, Mr. Chairman.
The timing is right for many reasons. It is good that you
all are here, because as you know, HUD is in the process of
developing the new guidance for the new mitigation program. And
as you know, new mitigation has been eligible for CDBG-DR, but
there has never been a chunk of money that is actually
dedicated for this. And so it is something that the chairman
and I worked hard on, and we have a lot of interest in making
sure that it is done right and that it succeeds.
So we expect the details of that program to be announced
later this spring by HUD. And obviously, the public will have
an opportunity to comment.
So really to the four of you, if you were in a position to
advise HUD as they are now developing these guidelines, what
would you suggest?
Ms. Lightbody. I can speak broadly to that. If you are
going to invest in mitigation, it should do three things.
Mr. Diaz-Balart. Which we are, which we are. The money is
there but----
Ms. Lightbody. It should do three things: reduce risk;
increase safety; reduce damage and property to infrastructure,
with the ultimate goal of making us all more resilient. That
can look like more traditional mitigation mechanisms that we
are more accustomed to, like elevation, redirecting roads,
buyouts, building codes and standards. It can also be
complemented with green or nature-based solutions
infrastructure; preserving or restoring flood plains, letting
rivers do what rivers want to do, which is absorb floodwaters;
increasing more green spaces. So we would recommend that there
is an incorporation of green and gray infrastructure into the
mitigation requirements that HUD uses through CDBG-DR.
Mr. Diaz-Balart. Anyone else want to take a stab at it?
Ms. Raitt. Just, again, to emphasize the importance of
focusing on vulnerable populations, low-mod income households
in particular. I think there is a real opportunity with HUD to
direct more resources towards affordable housing, which can
really be a catalyst for economically viable, sustainable
development patterns, and energy efficiency can be increased as
well. So, I think that that should be one of the things for HUD
to think about in their new criteria, as well as thinking about
transit-oriented development and other lead or other types of
criteria to encourage better sustainable design of new
buildings and structures. That would go a long way.
And then, again, overemphasizing the issue of planning as
part of any process before those decisions and investments are
made.
Ms. Haddock. So Houston is also an entitlement community,
and we have both housing challenges when it comes to recovery
from Harvey and infrastructure challenges. On our housing side,
we are 18 months post disaster, and we still have people that
are not back in their homes yet. We have many multifamily
complexes that are still recovering, our last count is over a
couple of hundred that are still in the process that are
repairing.
My recovery is slow, and so my advice on the mitigation
side to the HUD is that we need to be thoughtful, but we also
need to be diligent, and we need to get things on the ground in
a manner that they can be quickly in use, and that our
communities that are still recovering are back in resilient and
safer facilities, so that next time around, they will not be
displaced, they will not be going through the life-changing
event that they have gone through this time.
And so one of the things this time, but the other thing is
in particular is that we don't look at one piece of resilience,
that as my colleague, Ms. Raitt here said, that we look at
access to transit, that we look at access to schools, that we
look at access to grocery stores, that we look at access to
medical. That all of those things must play in as we look at
redeveloping our communities and building back better than we
were before the storm.
Mr. Diaz-Balart. Let me go do a little follow-up on that.
Because one of the issues, for example, in communities that I
represent is their sewer system has been devastated. How do
you--I am assuming you mentioned that, I think, in your opening
statement about Houston having that issue as well. So how do
you make sewer systems----
Ms. Haddock. More resilient?
Mr. Diaz-Balart. Yeah. By definition, they are underground,
right? So how do you make those resilient from storms and
flooding?
Ms. Haddock. It is the pipes underground, but it is also
the treatment facilities and the transmission facilities.
During Hurricane Harvey--Houston is unusual, we have 39
wastewater treatment plants, we have almost 6,000 miles of
collection systems. We have nearly 400 lift stations. And of
the 39 treatment plants, we had 17 of them that were severely
impacted, nine of them were submerged at the height of the
storm. So how do you make those more resilient? Sometimes the
answer is, they shouldn't be where they are today. But to move
a wastewater treatment facility may take 10 years, it may take
longer to build the infrastructure to serve those areas better.
So what do we do today? We are in the process of doing a
very active citywide assessment of the condition of our pipes,
point repairs, replacements. Things that keep minimizing water
from into our wastewater system. But we also have to partner
with our communities. Most of our blockages, most of our
overflows are actually caused by grease and debris in our
system, not from storm water that is getting in.
And so, it is a partnership with our community, and it is
also active operations and maintenance that we have to do--
today's technology has completely changed the way that we can
evaluate our wastewater system, compared to just 10 years ago.
Mr. Price. Thank you very much.
Mr. Aguilar.
Mr. Aguilar. Thank you, Mr. Chairman and Mr. Ranking
member.
This first question is for you, Dr. Moon. In 2018, more
than 8,000 wildfires burned 1.8 million acres of land, and more
than 24 structures in California. Years ago, California's fire
season lasted a few months. Now fires blaze throughout the year
at varying degrees of intensity. What types of programs do you
think Congress should develop to help mitigate the consequences
of wildfires?
Mr. Moon. So I haven't actually done a lot of thinking or
work in the area of wildfires. The one thing I will say is that
when we talk about resilience, we cannot talk simply about
floods. There is a lot of other reasons that we need resilient
infrastructure. Earthquakes are a big one, wildfires, but also
other hazards. If you look at, for example, why transportation
infrastructure fails, bridges and roads, et cetera, 50 percent
of bridges fail because of hydraulic reasons, flood, scour, et
cetera. That means 50 percent fail for other reasons as well.
And if we are disrupting our transportation infrastructure, it
doesn't necessarily matter why that occurred, but we need to be
able to minimize the potential for that disruption, minimize
the duration of that disruption, and, certainly, minimize the
impact on the surrounding communities. So I know I didn't
directly answer your question, but I don't necessarily feel
comfortable discussing wildfires.
Mr. Aguilar. Ms. Lightbody, some of these are connected as
well, right? Floods often follow wildfires. When we talk about
flood preparedness, do you think it is helpful if we start in
those communities that are susceptible to wildfires as well as
we start to have these conversations?
Ms. Lightbody. Certainly looking at a multihazard approach
across the country is critical. There are communities that
grapple with fire, flood, drought, and excessive heat all in
the same season. And so, figuring out ways that we can plan for
all of those hazards. And part of that starts with thinking
about the future in terms of where we put things. We know now
much better than we did 30 or 40 years ago our risks and our
understanding of risk.
And so, let's be smarter about, in the future, where we are
going to put and build more stuff, because that means more
people and more assets are in harm's way, whether they are
closer to the fire line or they are closer to the flood line.
Mr. Aguilar. Ms. Haddock, when we talk about grading, and
Dr. Moon, you as well, when we talking about grading, analyzing
the types of infrastructure that we have, can we do a better
job in tracking--clearly, we are talking about measuring as
well, but when we track, can we use GIS software? Can we use
software that is available to track our infrastructure, grade
it? So taking what you do already and making that a little bit
more real for folks in kind of a map form to say, these are the
bridges and roads we travel on every day, and this is the grade
that they have. Is that something we should look at as well?
Ms. Haddock. Absolutely, yeah. One of things that we as
engineers do often is make things very complicated to
understand. And so one of the things we can do a much better
job of is how we display that to the public.
Mr. Aguilar. You are talking to the wrong crowd. That is
usually our line, is making things difficult.
Ms. Haddock. We are good at that. We are good at that. I
did actually have one comment about your wildfires. Back in
2011, Texas had a number of wildfires, and shortly after that,
we had a really good rainstorm that literally changed the pH of
our drinking water. And it literally shut our drinking water
plant down for about 4 days. So everything is interrelated when
it comes to all of these things. And it is something that we
have to think of and plan for in our resilience.
As far as GIS, the city of Houston has been an early
adopter. We have all of our infrastructure in GIS. But it is
not just the condition, it is also the capacity of all of these
things that we have to weigh in on. And I want it make sure my
colleague here has an opportunity to----
Mr. Moon. I think you are sort of right on target with this
point, in that today we have so much data, and yet, that data
is inaccessible to so many, it is sort of impenetrable. And so,
coming up with ways to visualize and display that in such a way
that it does hit home, and we didn't forget about the value of
our transportation infrastructure in our everyday lives.
The one thing I would point out that is a big success in
this area is a system called InfoBridge, which is put together
by the Federal Highway administration through the Long-Term
Bridge Performance Program. And that is sort of a very slick
data visualization tool that is open to the public; they can go
in there, they can map all of the bridges, see their ages, if
they are over water, et cetera. They are definitely moving in
that direction. And I think anything we can do to get these
issues out in front of the citizens would be a great thing.
Mr. Aguilar. I appreciate it. Thank you, Mr. Chairman.
Mr. Price. Thank you.
Mr. Rutherford.
Mr. Rutherford. Thank you, Mr. Chairman. And thank you
panel for being here this morning. I represent northeast
Florida, three coastal counties: Nassau, Duval, and St. Johns,
which happens to house the oldest city in America in St.
Augustine. And there are amazing historic structures there in
St. Augustine that are really in danger.
Ms. Lightbody, when I read that 85 percent of our disaster
funding, since 2000, has gone toward flooding mitigation, I
wasn't surprised at all by that. We have seen the effect of sea
level rise in and the impact it is having throughout any
district. I also have the St. Johns River, which is also a
major tributary throughout my entire district.
So having seen that damage, can you talk a little bit, Ms.
Lightbody, about what percentage of post disaster funding is
actually being used to mitigate future damages and build
resiliency into these systems? In fact, I just joined the
American flooding--or the American Flood Caucus, because I am
so concerned about this. So can you talk about what we are
doing to build resiliency around some of these areas? And then,
the follow-up to that would be, I don't know if you have any
familiarity with the National Flood Insurance Plan, but are we
creating some of these problems by offering insurance that no
one else will offer, in areas where we have severe repetitive
flooding? And do you see an issue there?
Ms. Lightbody. How much time do you have? I will try to be
quick. Two big questions, knowing what we do know about costs
that the Federal government has put forward towards disasters,
when you look back from 2005 to 2014, the Federal government
spent about $277 billion on disaster recovery. Of that, FEMA,
which is one of the only agencies that has a specific program
for predisaster mitigation, $600 million over a 10-year period.
That is a drop in the bucket when you divide that up between
all of these communities that need predisaster mitigation.
So this subcommittee has an opportunity to set aside
specific resources towards predisaster, not after the disaster
happens, that--we need that, but if these communities are able
to plan and do projects in advance of that knowing their risks,
that will make a big difference. We know it saves money, every
dollar invested in mitigation saves at least 6 in the long run,
so it makes a lot of sense from a fiscal steward perspective.
Mr. Rutherford. Thank you for that.
What about the flood insurance?
Ms. Lightbody. The flood insurance program offers flood
insurance to roughly 5 million people across the country, that
is coastal, but it is also inland, a lot of inland communities.
Florida has a lot of those policyholders. And in some cases, we
are offering subsidized rates and sending a signal to risky
areas that the price signal is not sending the right message to
these areas, that we know are flood risk areas. So we have to
couple the flood insurance program with mitigation, with
disaster cost, because no matter how much someone has
mitigated, they are still going to get disaster money and fix a
lot of these programs so we take a holistic approach to
planning and mitigation, but also recovery and relief.
Mr. Rutherford. Thank you very much. I see my time has
almost expired. I yield back.
Mr. Price. Thank you.
Mr. Hurd. I am sorry, we now have the arrival of Ms. Clark,
I will turn to her and resume the rotation.
Ms. Clark. Thank you, Chairman Price. And thanks to all the
witnesses. I am especially glad to have Ms. Raitt here with us
today from one of my communities of Arlington. And I wanted you
to talk a little bit about today, we have the unusual situation
that we don't have counties in Massachusetts, but we need to
work together. And there have been tremendous efforts, I think,
on regionalizing what we are able to do with the Metropolitan
Area Planning Council, Metro Mayors Coalition, are some of the
examples, Mystic River Watershed. And I wonder if you could
touch on how the region is working together on its resiliency
efforts.
Ms. Raitt. Thank you. I think it is really important to
emphasize actually the regional connection, because localities
cannot do this on their own. There is no way that a
municipality individual jurisdiction can plan for these things
in a bubble. It all has to happen in a partnership within a
region, and, of course, as an echo of the State and State
policy. And that is what we actually have in Massachusetts,
which is extraordinarily helpful, whereby we have funding that
is directed from the State to local jurisdictions, and then
also regional entities. MAPC is a regional planning agency for
metro Boston, which is serving 101 communities in and around
Boston. They are actually nine regional planning agencies in
Massachusetts. And each one of these agencies has a
responsibility to help their communities work on and address
these types of issues. I think, in terms of addressing these
particular issues with resiliency, the critical piece is where
there are shared resources and trans relational, sort of,
boundaries where things overlap.
So that might mean things, such as the Amelia Earhart Dam,
and other dams, where there are critical infrastructure and
repaired and require a significant Federal and possibly State
investment in order to achieve more resilient dam
infrastructure, so that you cannot just address what is going
on now with flooding, but in the bigger picture, long-term, if
there is sea level rise and storm surge, need to really shore
up that infrastructure.
The other area where regions can work together is really to
find other critical resources and infrastructure that they can
advocate for together to leverage additional resources, whether
that is additional public resources or private resources to
also firm up those efforts.
So you mentioned the Mystic River Watershed Association,
there are many other nonprofit organizations that can also play
a partnership role in this and that is also important.
Ms. Clark. Can you think of the specific ways that we here
in Congress, through the Federal government, can better support
the regional efforts?
Ms. Raitt. I think the primary way is actually through
encouraging and requiring planning, that any--behind any
process, any investment----
Ms. Clark. Does that mean funding planning as well?
Ms. Raitt. Funding for planning, but also requiring that
communities are planning for these types of events. Even with
hazard mitigation, that it is directly tied to vulnerability
assessments, and then good strong data, as well as good
community engagement, to understand and direct better and
improve outcomes. So I do think that that is where the Federal
government can play a very key role. It is not only encouraging
those partnerships, that web of partnerships that happens at
the local, regional State level, but also, the partnerships
that happen across Federal agencies, which can also come
through funding resources that eventually make it to the local
level.
Ms. Clark. You mentioned sea rise. Two of my coastal
communities, Revere and Winthrop, are very much concerned with
flooding and the need for seawalls and expanding. We have a lot
of marshland and groundwater, low-lying areas in my district as
well, two 100 coastal storms in the last year. And we--as we
look at these events across the country, we find great economic
and racial disparities in Federal disaster aid and recovery
from vulnerable families is often much more difficult in low-
income and rental neighborhoods, than in more affluent and
homeownership.
With 45 seconds left, I wonder if anyone on the panel would
like to talk about how we can begin to address this? We will go
with you, Ms. Raitt.
Ms. Raitt. I think the primary way is to actually address
this through incentives, and then, again, to ensure that any
commitment of investments that are made has to go towards
directing them to shore up those systems and infrastructure,
that it directly affect vulnerable populations. What you are
specifically speaking to could be hundreds of thousands of
people who are currently living in a zone where they are
susceptible to sea level rise, flooding, and other extreme
hazards and weather conditions. And we need to really address
that, in future moving forward, with any resiliency effort that
is integrated into Federal funding to ensure that housing has
that incorporated sustainable housing and other types of
efforts addresses these needs. And that means that requires
pretty significant investment, but it also requires incentives,
incentivizing private entities to also incorporate these
things, not just public, but private entities, who house the
people we are talking about in these zones.
Ms. Clark. Thank you, Mr. Chairman.
Mr. Price. Thank you. Mr. Hurd.
Mr. Hurd. Thank you, chairman.
Dr. Moon, you talked about inaccessibility of data. I spend
a lot of time thinking about data and how technology can be
used to make better decisions on that data. And one of the
things that I found that we can do better in the Federal
government is making sure certain data sets are made open to
academia, industry, whoever in order to make informed decisions
on it. Is there types of data that the Federal government has
that you wish was open and people should have access to?
Mr. Moon. In the realm of transportation infrastructure, I
can't think of any. The primary data source, which is the, say,
the National Bridge Inventory in the case of bridges, is open,
it has been open for decades. One of the challenges with it
historically has been that it was such a large database, it was
provided in a format that was really inaccessible to a lot of
people. And I mentioned earlier that now with Federal highways
new InfoBridge web-based software is now open and really
accessible. So people can go on there, take a look at local
communities, age of bridge in their counties, States, et
cetera. So they can really get access to all of that
information.
Mr. Hurd. One of the things that actually made that happen
is the Data Acts. Nobody talks about when Congress does things
that work, making sure data is in an accessible, machine-
readable format so that you don't have these problems.
Did any other panelists have any opinions? Ms. Haddock?
Ms. Haddock. I want to say, first off, actually I was born
and raised in your district.
Mr. Hurd. Awesome.
Ms. Haddock. I graduated Uvalde High School.
Mr. Hurd. Oh, very cool.
Ms. Haddock. But I also will say that one of the challenges
we face in infrastructure, is that much of our infrastructure
was built before the electronic age. And so we don't have good
data on much of our infrastructure, whether it be federally
built infrastructure, or locally built infrastructure.
Sometimes we are in the field literally locating lines that
were built 50, 60 years ago during construction.
Mr. Hurd. Do you know of any initiatives that is trying to
go back and figure that out?
Ms. Haddock. So a lot of the environmental enforcement
things that are being done actually do force us into that. It
is a good thing, it is a good thing in those particular cases,
but it is also a competition for that limited space in our
right-of-way to have all this infrastructure. And so a lot of
infrastructure we are putting in today has the technology built
into it for exactly where it is, but the infrastructure that
was built even just 30, 40 years ago, we are having--research
and development new technologies is creating ways for us to
find that, and locate it, and geocode it, and have it
electronically, but that is expensive.
We have 6,000 miles of waterline, 6,000 miles of wastewater
line. When you begin to add those up, it is a massive effort to
create those in electronic, very specific use to be able to get
that data.
Mr. Hurd. What would you like to see happen to help with
that?
Ms. Haddock. I think that as we invest in recovery, that
part of the resilience can be funded through that, including
those things in how we reinvest. That is not just about
replacing, that it is about creating those auxiliary upgrades
at the same time as we are reinvesting those. That way, when we
come through the end, we actually have a good baseline.
Mr. Hurd. So would CDBG grants be able--could you use some
of that for that type of activity? And in my final minute,
answer that specific question, but also, after your experience
with Hurricane Harvey, how can the Federal government better
implement this program, CDBG, especially when it comes to
recurring natural disasters and how to be prepared for those in
the future?
Ms. Haddock. So I do think that through the planning side,
that we can certainly incorporate that through the existing
CDBG rules, but there is always competition between gathering
data versus actual improvements on the ground that benefit
people immediately. And, so, you are going to have that
competition of how we prioritize the funding.
As far as advice that I would give, is that infrastructure
and housing need to be planned in an integrated fashion. That
we can't plan infrastructure and plan housing separately. That
the planning needs to be done together, so that the resilient
solutions address all of the components of the people that are
living there and the infrastructure that serves them
simultaneously.
Mr. Hurd. Thank you.
I yield back, Mr. Chairman.
Mr. Price. Thank you very much. Ms. Watson Coleman.
Mrs. Watson Coleman. Thank you, Mr. Chairman. And thank all
the witnesses for being here today and sharing their
information.
With the constantly increasing risk of severe weather, we
know it is very important than ever that our infrastructure
will be resilient. In particular, Dr. Moon, it is good to see
you here. Thank you for being here. It is great to learn more
about some of the critical work that is being done at Rutgers,
which just so happens to be in the backyard of my district.
Could you elaborate on how the DOT's funding through the
University Transportation Center Program supports the Center
for Advanced Infrastructure and Transportation work?
Mr. Moon. Sure. The U.S. DOT there is a bunch of other
funding sources, too, but let me talk about just a few programs
that I think sort of are illustrative in nature. So there is
one graduate training program, called C2R2, Coastal Climate
Risk & Resilience. And it is a very unique program in that we
are bringing students and faculty from social science,
environmental science, climatology, public policy and
engineering together. And these students take classes together,
they go visit communities on the Jersey shore. And so, one of
challenges with infrastructure resilience is it is such a multi
disciplinary problem. There is so many perspectives, and a
program like that really provides graduates that have depth in
their field, but also an understanding of some of the breadth.
We do a lot with remote sensing. A colleague of mine has
been to Corpus Christi to document with high resolution 3-D
data the damage after Hurricane Harvey, we have been to
Florida. He has done 600 miles of coastal communities in New
Jersey. And that data is being used for everything from future
planning, mitigation strategies, but also things that were sort
of a surprise, like optimizing where you put debris fields
immediately after some of these events, so that we can sort of
get these communities back up and running.
There is a lot of others. We do things with resilience of
bridge supply chain, and there is also quite a bit of training
that gets done through the Center, thousands of individuals in
the current workforce come in for training on emerging
technologies and techniques and things.
Mrs. Watson Coleman. Good to know. What are some of the
examples of how the research done at the center has translated
into real world benefits?
Mr. Moon. So one--I will just point out a project that I
was sort of closely related--or involved in. A State Department
transportation came to Rutgers and said, ``You know, we have
all these structurally deficient bridges, and we need to
replace them, and we have funding for 15, 20 percent of these.
And we have no real basis at this point to prioritize them.''
And it was an opportunity, as I mentioned in my opening remark,
to develop sort of a uniformed resilience metric and say, ``You
know, even if the money is not there to enhance resilience of
the infrastructure, it can prioritize some of the replacements
that are going to be done anyways, so that the ones that have
the biggest impact on reducing, say, the consequences of these
extreme events, that they get done first.'' And so, that is one
of things that has been implemented.
Mrs. Watson Coleman. Is there anything that you can think
of that the Federal government can do to better support your
research?
Mr. Moon. Well, I mean, there is always more funding,
right? I am a faculty member, I think I am supposed to say
that.
To be honest, I do a lot of work with the Federal Highway
administration, as well as with our local State, and even some
counties. And there is a big focus on this area. This is not
lost on them. And so, even if there aren't sort of dedicated
programs, if you are in the field of civil engineering or
structural engineering, this is probably the hottest topic, and
so it has really gotten a lot of people's attention.
Mrs. Watson Coleman. Thank you very much.
I yield back. Thank you, Mr. Chairman.
Mr. Price. Thank you.
We have heard Ms. Haddock express her and the ASCE's strong
support for the Federal Flood Risk Management Standards. Dr.
Moon and Ms. Lightbody, I would like to ask you to address that
more specifically, maybe starting with Dr. Moon.
The Obama administration updated the FFRMS in 2015. The
idea was to leverage the latest scientific research to provide
additional safety in areas at risk of flooding beyond the 100-
year flood plain, and it would have been a catalyst for cities
and counties to be serious about planning around water events.
The FFRMS placed a strong emphasis on using flood plains
and natural systems to absorb floodwaters and mitigate the
impact of powerful storms. The Trump administration now has
repealed the FFRMS. And ironically, they did so in the weeks
just before Hurricanes Harvey, Irma and Maria.
So I would like for you to address a couple of questions,
if you will. Was this the right approach, or what would you say
about this approach, its strengths and weaknesses, to
addressing flood risk and Federal infrastructure projects? And
now that it has been repealed, what is your recommendation? Do
we simply try to restore it? Or what do we do to ensure that
Federal assets located in flood plains are built more
resiliently? Dr. Moon, we will start with you.
Mr. Moon. So this is a little outside of my area, but the
one thing I will say is that I am a big believer in research, I
am a big believer in the scientific method, and if that is what
was behind and driving this policy, then, I think, it is
certainly not a good development that we are not increasing
standards for building, you know, Federal assets in these
regions. I mean, it is clear that floods are increasing, and we
certainly don't want to be actively putting new structures and
systems in harm's way. Beyond that, I really don't really want
to comment on some of the specifics.
Mr. Price. Ms. Lightbody.
Ms. Lightbody. You are correct, it was repealed 10 days
before Hurricane Harvey, it certainly appeared to be a
shortsighted decision by this administration. I think there are
efforts now to understand was that the right approach? And now
that we have a clean slate, let's take on a new approach. In
the absence of modernized flood standards, we continue to put
thousands of assets like utilities, roads, hospitals in harm's
way. To put it simply, we use Federal and local dollars to map
where we think it is going to flood, then we use Federal
dollars to build things in those areas like schools and water
treatment plans and roads. And then we use Federal dollars when
it floods to rebuild those exact same facilities. We have to
stop doing that, we have to stop putting buildings and assets
and people in harm's way. And we are operating under a policy
that is now 40 years old.
Communities like Houston, Nashville, Tennessee, they have
all gone above and beyond what the Federal government now has
for building flood plain regulations. And so, this committee--
subcommittee can take this on by requiring that DOT and HUD
assets have these regulations and standards around them.
You can take an approach that asks all agencies to do this,
or you could take an agency-by-agency approach. The Department
of Defense has embraced this just last year. FEMA, in some
ways, and HUD in some ways, is already doing this. The
Department of Transportation needs to take this on.
Mr. Price. Ms. Haddock, you look like you are ready to
speak.
Ms. Haddock. I would love to add to this discussion, so
Houston stepped out, along with Harris County, immediately
after the storm. We have had flood plains that we regulated,
too, and exceeded the Federal standards since 1981. However, of
the 90,000 structures that are in the 100-year flood plain, 80
percent of them were built before 1980. So the cycle that we
are in of a little bit of flooding, repair it, it is still in
the flood plain. So we adopted an adaptive approach, we
actually said we know that our rainfall totals will be updated,
the draft Atlas 14 by NOAA had been put out, and that our
current 100-year before Harvey was actually--the 500-year
before Harvey was going to become our new 100-year when the new
rainfall totals came out.
So the county and city both took flood plain regulations
and adopted 2 feet elevation above the 500-year as a baseline
so that as we made repairs, as we had structures that were
substantially damaged as new development came in, that it would
be protected above those levels.
But we still have thousands of structures that had 1, 2, 4,
6 inches of water in them, that under the current flood
insurance program, will be repaired and will be left there to
flood again.
Mr. Price. Mr. Diaz-Balart.
Mr. Diaz-Balart. Thank you, Mr. Chairman. Last year, DOT
inspector general reviewed the highway emergency response
program, and they recommended that the DOT needs to improve in
two main areas. One, the IG found that DOT's guidance to States
on their highway ER program lacks information on how States can
incorporate resiliency into their projects. Secondly, IG said
that DOT does not have a good idea of what resiliency programs
are being made by States. It also noted that there is a lack of
information of best practices on resiliency, resiliency
activities that could be shared among States.
Dr. Moon, you mentioned, in your testimony, the fact that
there is no accepted and uniformed means of measuring
resiliency in our transportation infrastructure. This is
something that Congressman Cuellar, who is an appropriator, not
on this subcommittee now, has been working on frankly before he
got to Congress. And I was doing that as well, going back to
State legislative years like in the 1700s. So how do you then
deal with--how do you deal with these issues, when, in fact,
there aren't even standards per se to be followed? Any ideas,
or any suggestions?
And again, as I mentioned before, I don't want to beat a
dead horse, but the chairman and I have put a lot of work and a
lot emphasis, and frankly a lot of skin in making sure that we
have all this money for the first time. My concern is,
precisely, because of some of the things you talked about, but
also the IG has said, this money will be put out there, and
then we won't really have an idea of if it is working. How do
you deal with that?
Mr. Moon. Well, I think you cannot get around the need for
some metric that can be developed. And this is not an easy
thing. Right? That metric has to take into account the likely
performance of individual infrastructure systems. It has to
take into account the performance of the network and the
redundancy of the network. It has to take into account the
preparedness of the agencies that are tasked with operating
those pieces infrastructure, and then responding to emergency
events.
I think the other challenge that we have is those metrics
have to be formulated based on the data that we have, not the
data that we want. And in the case of bridges, the data that we
have dates back to the 1970s after the Silver Bridge collapse.
They said this is the type of data we want to take on bridges.
And resilience was not really a major focus at that point.
Mr. Diaz-Balart. Are there communities--usually, the
State--State and locals, and particularly the States, are the
ones that kind of develop that are most innovative. We saw that
after Hurricane Andrew in the State of Florida, I think, pretty
much recognizes as a leader on, you know, storms unfortunately.
But they have done a really good job.
Are there States, local communities that we should look to
that are doing some of the things that you mention that have
some metrics that are real, or is somebody developing these?
Has someone already done it that we can kind of, like,
plagiarize and copy?
Mr. Moon. Yeah, I mean, I think there are a lot of attempts
out there. This is not something that nobody said, Hey, I think
we should do this. I think lots of people have done it. The
problem is, that they do things differently. And so, I think
there needs to be an approach of bringing some of these things
together and deciding, you know, what are we going to go have
to standard B. Now, the reality I mentioned before what gets
measured is what gets improved. It is very important what goes
into that measure----
Mr. Diaz-Balart. Absolutely.
Mr. Moon [continuing]. Because if you formulate it
incorrectly, then we still aren't going, at the end of the day,
have a more resilient infrastructure, and I think that is
really one of the big challenges.
Mr. Diaz-Balart. Does anybody have any ideas as to how we
can do that? Because it is very difficult, it is very
complicated, and it is very technical, and, frankly, it can be
controversial because you can tweak it. Right?
Mr. Moon. Yeah. And there can be some winners and losers.
Mr. Diaz-Balart. There always are. There always are. So are
you all doing that in Houston?
Ms. Haddock. So we are working to include sustainability
and resilience in all the projects that we develop. The
American Society of Civil Engineers was actually part of the
group that developed the Envision rating system, which is very
similar to the lead rating system for buildings, it is for
infrastructure, but it is focused on sustainability, but
sustainability and resilience really are hand in hand.
So there are some measures out there for infrastructure
that help create that base case of what is resilient, what is
not. But I will say that we are seeing, at least in Houston,
that our partners in the State are actively engaging us in
resilience discussions on projects and looking for us to
partner in addressing flooding at the same time that they are
addressing transportation and partnership. So the discussions
are happening at the base level.
Mr. Diaz-Balart. Thank you, chairman.
Mr. Price. Thank you.
Ms. Clark.
Ms. Clark. Thank you, Mr. Chairman. I want to go back to
Arlington. We have had a hearing in the last couple of weeks
where we talked about the issue of layered funding for a
variety of sources. And we used a lot of pre lunchtime words
that I know are difficult to deal with when you are getting
hungry, layered cake, lasagna, whichever food you want, but I
wondered if you could share with us some examples that you have
used of how you used Federal funding to leverage it, used it in
conjunction with State and local dollars for mitigation
purposes?
Ms. Raitt. Sure. That is a great question. And I think the
way that that layered cake or some other food group, the way
that approach works is that it actually works through having a
plan that identifies the ideas that these different programs
can work together, and otherwise, if you don't have the plan
behind that process, there is not a lot of good integration of
different funding sources.
So that is really critical. So one example of that is
actually through the consolidated plan process, which any
Federal grant subgrantee has to go through in order to get
access to CDBG home funds and other types of funds. And a lot
of communities are engaged in that process right now, including
Arlington, actually with it is regional consortium. I think
that through that consolidated plan process, that can actually
set the stage for those layered, sort of, financing situations.
In Arlington, what we have done is married CDBG with local
Community Preservation Act dollars, which is basically a local
tax that we have in Massachusetts which can go towards these
types of initiatives, and then also, the State funding that we
have received through the Municipal Vulnerability Preparedness
Grant Program that the State offers.
That helps us to address things like flood storage, flood
mitigation, and that is what we are doing actually on the Mill
Brook Corridor. There are other examples of the ways in which
those funds come together that also leverages in kind support,
I would say, from the Mystic River Watershed Association, who
also cares very deeply about these issues. So there can be a
combination of resources that I do think that that is key to
doing a lot of the things that we are talking about. But the
underpinning, again, of that is making sure that it is actually
codified in a planning process. Otherwise you have a lot of
redundancy, redundancy in data collection, different types of
evaluation and criteria and metrics, and not enough clarity in
terms of how these different programs operate and intersect
across the different agencies. So that is really critical and
that could be some area where HUD reforms, and even DOT reforms
could be helpful.
Ms. Clark. Great. Thank you very much.
I yield back.
Mr. Price. Thank you. I want to return to some of the
signals being sent by the current administration, but before I
do that, I do want to return to the discussion Ms. Lightbody
encouraged us to have about dedicated funding for mitigation.
We, of course, have post disaster mitigation as a feature of
FEMA programs, which is increasingly, I think, accepted and
valued. And now, with the CDBG funding, we have CDBG-DR
funding, we have the mitigation funding distinguished, and we
are awaiting the guidelines on that in North Carolina and
elsewhere to firm that program up.
Ms. Lightbody, you cited, in addition, the need for
predisaster mitigation. Of course, that is mainly what we are
talking about here today. As you know, there is a dedicated
funding stream in the homeland security bill for predisaster
mitigation projects. I take it that is what you are referring
to in saying that we needed to increase that support. But
wouldn't you agree that even if we tripled or quadrupled that
funding stream, the impact would be less than mainly what we
have talked about here today, that that is building mitigation
into all of these funding streams, or as any of them are
feasible, with both HUD and DOT. And I don't know, has anybody
done a study of the direct predisaster mitigation grants and
what kind of--what does their distribution look like? Is there
anything like a kind of cost-benefit standard that has been
applied to those? And what would it mean to double and triple
that funding? We can ask that question, even if it is in
another bill. But I wonder if you just elaborate a little
further, I am sure you are not saying one or the other. But how
would you describe that dedicated approach to mitigation
projects as opposed to kind of broader strategy of
incorporating mitigation into virtually everything we do?
Ms. Lightbody. Certainly. An approach that incorporates
both would be the strongest. Working with limited Federal
resources, if you are going to invest money, knowing the
savings that mitigation returns, it makes a lot of sense to
dedicate them specifically towards predisaster mitigation. At
the same time, building in resiliency and mitigation
requirements to existing programs, so that communities are
forced to incorporate mitigation into the grants and proposals
that they put forward.
States like Florida, actually, serve as a very good
example. The emergency management division after Hurricane
Matthew did an assessment of mitigation proposals projects that
were put in place, 40 mitigation projects cost $19 million;
avoided losses savings, $81 million. So we know it works and
that is happening--Raleigh is undergoing a project right now.
That is happening at a State and local approach right now in
terms of trying to document the savings and avoided losses.
Mr. Price. Excuse me, the Florida program you are talking
about was post disaster mitigation?
Ms. Lightbody. So the study was done after Hurricane
Matthew looking at what they have done before Hurricane
Matthew.
Mr. Price. Yes, yes, but it was undertaken after the
disaster?
Ms. Lightbody. The study was undertaken, the mitigation
activities were taken before.
Mr. Price. Before the disaster?
Ms. Lightbody. Yes.
Mr. Price. Have any of the think tanks involved in this
area or the researchers actually assessed the range of pre
disaster mitigation projects, and how well that money has been
spent, how efficiently?
Ms. Lightbody. Because of the nature of tracking, it has
been difficult to do. I think there is an effort to look more
closely at what money Federal dollars are going towards
predisaster mitigation. The easiest place that if you are able
to do that, is within FEMA, because of a dedicated funding
stream. And so, as these dollars get spent from HUD, it is
important that we are able to track and understand where they
are going and what the savings are as a result.
Mr. Price. Absolutely. I think we can certainly agree to
that, that as we get into mitigation as a more and more
prominent feature of CDBG funding, DR funding, we absolutely
need to couple with that an assessment of where these dollars
are going and how we can spend them most efficiently.
These guidelines will help from HUD, but then, we need to
assess where the money is going and how well the States are
doing with this after the fact.
I will return to my other question on the next round.
Ms. Clark.
Ms. Clark. I am going to pass. Back to our ranking member.
Mr. Price. Sorry, Mr. Diaz-Balart.
Mr. Diaz-Balart. No problem, Mr. Chairman.
Actually, Mr. Chairman, on that issue, because I actually
had a question about that, but on the Florida--and I mentioned
before that Florida, again, because of unfortunately, because a
lot of experience in it, has really done a remarkable job, and
this loss avoidance assessment, which now they do after each
major disaster has--I think, has been pretty amazing.
And so the question really is, Ms. Lightbody, you mentioned
that, and how I think it has--it looks like it has done a
really good job in kind of getting information, but are other
States--you sort of mentioned that that maybe some other
communities--are other States doing similar assessments? Are
they real? Are they usable? You know, can they be used, and are
they available? Does anybody know, because I don't?
Ms. Lightbody. They are happening at different levels, some
at the State level, some at the community level. And some of it
depends on funding, if there is funding available, more
resource communities are able to undertake it. There are also
Federal ways to drive that to incorporate that into funding
that goes out the door.
Mr. Diaz-Balart. Incentivizing it, to incentivize States or
communities to do the same thing that Florida, in essence, is
doing?
Ms. Lightbody. Right, right, right. And it is hard to say
who is doing it right, because what works in Florida doesn't
necessarily work in Massachusetts.
Mr. Diaz-Balart. Or California fires?
Ms. Lightbody. Exactly, exactly.
Ms. Haddock. So I will say in Houston, our partner in the
Harris County flood control district does the majority of our
buyouts, which are both post and predisaster mitigation
activities. And they do, after every major flood, actually
publish the loss avoidance based on predicted losses from
previous events that would have impacted those structures.
Those are even within the city of Houston that those are
published as well. So in that particular regard, we do have
local numbers on that.
Mr. Diaz-Balart. I do think, and going back to, I think, my
original question, which is since HUD is now in the process of
developing the guidelines for this new, frankly, substantial
chunk of money that is out there, if you all have any other
specific recommendations. I am in touch with them, we are in
touch with them, trying to make sure that those guidelines are
good. So we have to make sure the States can access them, but
we don't want that money to be wasted. So it would be really
helpful if you all have any other ideas, as to what you think
HUD should be doing as far as guidelines, please let us know,
please let us know. Because I think that is--again, the
chairman and I have a lot of interest to make sure the money is
well spent. It is a substantial amount of money, as you know.
That would be greatly appreciated.
Ms. Haddock. I know that Houston has provided specific
comments along the way, and we will certainly do so during the
public comment period, but I will make sure they come directly
to you as well.
Mr. Diaz-Balart. If you get it to the chairman or to me,
that would be helpful.
Ms. Haddock. The thing that I would say is that a lot of
the current FEMA programs, the only thing that is available to
people locally in Houston become things--one of the post and
predisaster mitigation that is happening, I won't say a lot, is
we have 40 homes that are being elevated, they are literally
being raised up above the flood plain. Well, we have thousands
of homes that are in this similar type situation.
Mr. Diaz-Balart. That is really expensive.
Ms. Haddock. And we are spending for 40 homes, we are $12
million in, that is 40 homes. It would actually be less
expensive to build the exact same size, new homes today's
standards, but using the criteria, the elevation is the only
one that meets. And so, we don't want to deny that to our
residents who are seeking to become resilient, but it is not
the most efficient use of Federal dollars.
Mr. Diaz-Balart. Again, any specific recommendations would
be very helpful, and to get it to us, directly to us, would be
very helpful.
Thank you, Mr. Chairman.
Mr. Price. Ms. Haddock, I wanted to ask you in a moment to
comment on the pilot program that I understand you are still
carrying out under FHWA, on resilience and durability to
extreme weather. But I want to back off initially--stand back
from that and look at the bigger picture in terms of that kind
of pilot program and others under DOT and HUD under this
administration.
The DOT has removed references to climate change from their
website, and publications where they address resiliency. FHWA,
as I understand it, has not renewed funding for pilot projects
that help cities and regions planned for climate effects and
build resiliency. HUD had the Sustainable Communities
Initiative during the Obama administration. That, as I
understand, has been discontinued. That provided grants to
support communities in integrating their housing
transportation, infrastructure, and environmental goals.
So any of you who are familiar with this and care to
respond, I wonder what signals we are sending to the agencies--
what signals the agencies are sending to cities, regions,
States, that are looking to build resiliency into their
planning and projects? And then, what actual support? It is
partly a matter of the signals you are sending, it is partly a
matter of the actual support you are offering. And I would
appreciate your comments on one or both of those from your
experience.
Ms. Raitt. So with the Sustainable Communities Program that
was operated up until, I think, 2012, 2013, it was actually
very extraordinarily effective in greater Boston, and one that
actually set forth a vision in terms of climate adaptations for
the entire region, and then led directly to local planning
initiatives that then could be carried out, both at the local
level, and at, sort of, the subregional level, if you will.
So that--without that program and without that sort of
interagency relationship between EPA, DOT, and HUD, it really
is challenging, again, to marry these different programs and to
be able to carry out that local work ultimately. Without having
that interagency partnership and relationship, it is
challenging. So, I think, any new program moving forward should
find a way to encourage that interagency collaboration and
those partnerships, and also ensure that the criteria around
resiliency is aligned, so that you are not talking about
different versions of resiliency, but you are talking about a
version of resiliency which addresses a lot of the things that
we have been talking about here this morning. And then, also,
really puts in the forefront equity, and particularly social
equity directed at vulnerable populations again, where you know
that the greatest level of investment and infrastructure will
affect future generations, I think, is critically important.
So without that Sustainable Communities Program and some of
the other things that you are talking about, it is challenging
to operate without that particular program, but I think moving
forward, there is a way within which it can be integrated into
future Federal policy and the programs, of course, through
criteria and other requirements.
Mr. Price. Thank you.
Any other comments?
Ms. Haddock. So I will say that, to some degree, the data
is coming past the policy in the sense that we now have
rainfall records that are increasing the amount of rainfall,
and driving us to design to criteria that the data is just
driving us there, whether or not we agree with the policy
implications. And as civil engineers, we have an obligation to
not only plan for future growth and future demand and all those
things, but the future environment.
So we have an obligation to consider those things as we
move into the planning and the design for infrastructure. And
so resilience has to be part of that, looking at the changing
climate and the impacts to whether it is sea level rise. In
Houston's case, we are more concerned about water supply and
the changing rainfall patterns, more so than the amount of
rain, because it is going to be about the same, but we are
going to get it very differently. So we have to look at all
those things as we look at where our infrastructure is, how it
is built, and how it is going to serve our future populations.
Mr. Price. Of course, you are free to look at the data,
analyze the data, make the projections?
Ms. Haddock. Absolutely.
Mr. Price. Apply for support on that basis?
Ms. Haddock. Absolutely.
Mr. Price. Any other comments?
Ms. Lightbody. One way to--one of the major ways that the
Federal government can account for future risk is by updating
the flood risk management standards. We have to stop building
things in the flood plain that are based on old data and old
policy made 40 years ago. And so whether that is an agency
approach, or a Federal wide approach, that is prudent policy so
that we do not continue to put these homes that are costing
millions of dollars to retrofit now. Let's not put those homes
there in the first place now that we understand our risk.
Mr. Price. Thank you. Since we are wrapping up here, Ms.
Haddock, let me ask you briefly to comment on the pilot program
I understand you still have underway on resilience and
durability to extreme weather the experience with this FHWA
pilot project, how you expect it to help Houston address
resiliency in the future. What you would say about FHWA's
guidance and resources as you have undertaken this, how can it
be improved? Anything we should know about that?
Ms. Haddock. So I do have a whole team that works with FHWA
activities and stuff along the way. So I don't want to get too
far afield, kind of like my colleague over here, but what I
will say is that as we look forward to doing each of these
things, we make sure that we are using the best information
that we have available today, and that in a lot of cases, that
we are trying to things we haven't it tried in the past. And
seeing if they work, that we are basically laying out whether
it is applied research and development, or whether it is--you
know, pilot programs are fantastic for local governments,
because they give us the opportunity to take risk on that is--
that we are adverse to on a daily basis. In general, we do not
like to implement things that are not tried and true, and
somebody else has proven for us. So these pilot programs are
absolutely critical to our ability to try things, and to create
innovation, and to create forward moving investments that may
not happen without the implementation of pilot projects on the
ground.
Mr. Price. Thank you. If you want to submit more specific
information about this particular project, feel free to do
that.
Ms. Haddock. Absolutely.
Mr. Price. We will be happy to receive that. Mr. Diaz-
Balart.
Mr. Diaz-Balart. Thank you, Mr. Chairman.
Mr. Price. All right. I think we are ready to wrap up. We
had a good hearing, I think, a very useful hearing about an
important topic that is clearly relevant to everything we do,
it works for every program we are funding. We need to think
about the implications of today's hearings for that.
The committee staff is going to be in touch with you, your
organizations, regarding any questions for the record. We would
ask you to return any information for the record within 30 days
from Friday, that is. And that will let us publish the
transcript of today's hearing in a timely fashion.
Any final comments? Mr. Diaz-Balart?
If not, thanks to all of you, and we will hope to be in
touch as we continue our process here. And the committee is
adjourned.
Tuesday, March 26, 2019.
MEMBER'S DAY HEARING
Mr. Price. Good morning. The subcommittee will come to
order. The Transportation, Housing, and Urban Development
Subcommittee funds programs that affect every city, county, and
state in the country, from roads and bridges, to housing for
the elderly and disabled, to recover from natural disasters.
The programs in this bill protect vulnerable populations and
rebuild America's infrastructure. Today is our day to hear
testimony from our colleagues, from members on the programs in
this bill. We will use this information to guide the
subcommittee as we assemble our Fiscal 2020 Bill.
Now, let me--before we begin with our first colleague, I
recognize Ranking Member Diaz-Balart, for his comments.
Mr. Diaz-Balart. Mr. Chairman, thank you. This is
important, that we listen to our colleagues. One of the reasons
that we are here is to help our colleagues. So, I look forward
to it. I yield back, Mr. Chairman.
Mr. Price. All right. Let us proceed. Our first guest is
Representative Tom Malinowski. We ask you, Congressman, to--we
are going to recognize you for 5 minutes, ask you to put any--
and we will put any further statement that you have, or any
attached materials, in the record. You are recognized for 5
minutes.
STATEMENT OF HON. TOM MALINOWSKI, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF NEW JERSEY
Mr. Malinowski. Thank you so much, Chairman Price, Ranking
Member Diaz-Balart; appreciate the opportunity to testify. I
look forward to building some things with you this year. I am
here, today, on behalf of the seventh district of New Jersey,
to advocate for a budget that invests in transportation and
infrastructure, in particular, public transportation.
Our infrastructure in America, once the envy of the world,
is losing its battle, as I think we all know, against time,
growth, weather, and wear, and no state suffers more from
underinvestment in infrastructure than New Jersey, where twice
as many of us use public transportation, as the national
average.
To get to and from New York, 200,000 of us still depend on
just two rail tracks across an old bridge called the Portal
Bridge, and through the Hudson River Tunnel, two structures
that were a marvel in 1910, when they were built, but are
crumbling today. Virtually all passenger rail traffic moving up
and down the Northeast Corridor depends on these two tracks. If
we fail to repair this vital transportation corridor in time,
we will deal a crippling blow to the economy of my region, and
to the country.
Even a partial shutdown of the tunnels would disrupt not
just passenger rail, but car and truck traffic up and down the
east coast, making commutes virtually impossible for tens of
thousands of people, diminishing property values, driving away
businesses in one of the most economically vital areas in the
country. Congress has recognized that. That is why, in the last
2 years, in this Congress and the last Congress, we have
appropriated extra funding to Amtrak's Northeast Corridor, with
the clear understanding that this should enable construction of
the Gateway Project, which is designed to repair this critical
transportation link.
The first stage of that project, the replacement of the
Portal Bridge, is shovel ready. The environmental review has
been completed. All of the funds necessary to complete it have
already been provided by the Congress. The only roadblock is a
political one. The Department of Transportation has refused to
issue grants for the project because it says that New Jersey
has not committed its share of the funding, even though New
Jersey has, in fact, committed $600 billion, its share of the
funding. I can only conclude that this process, because of the
controversy, for some reason, that has come to surround the
Gateway Project, has become politicized in the Department of
Transportation.
One of the Nation's most pressing infrastructure projects
should not be stuck languishing on a desk at the Department of
Transportation. Yet, that is where things stand today. I do not
believe there is much prospect of that changing in the coming
months, and that is why I believe the responsibility is on our
shoulders, to ensure that the Gateway Project, which is so
vital to the region and the country, is not only funded, but
built.
Last year, Congress sent a signal that this is what we
intended. It is imperative that we do no less this year.
Indeed, a new Congress should do more, using every legislative
mechanism at our disposal, to get this project off the ground.
That is why I am requesting robust funding for two vital
programs that will provide the necessary resources for Gateway
to be built, the Capital Investment Grant, Grants Program, and
the Amtrak Northeast Corridor.
I am also submitting language requests; one, to ensure that
the funding we are appropriating is, in fact, being put to use,
and to make it harder for the Department of Transportation to
continue making excuses. Another request would make it easier
for New Jersey, and other States, to finance its portion of the
Gateway Project, or other States financing their portion of
similar projects, by allowing states to use Federal
transportation loans towards their share of jointly funded
infrastructure projects. That language is in this year's budget
for only one year. We should extend that. To say that a State
taking out Federal transportation loans is not putting up its
share of the cost of that project is like saying that you and I
are not paying for our house, if we take out a mortgage on our
house. It is ridiculous, and Congress needs to make that
absolutely clear.
So, in sum, these funding and language requests will help
us get closer to what I believe is our shared goal, ensuring no
catastrophic loss to this vital transportation link, and
allowing the Northeast region to continue to drive economic
growth for the United States, as a whole. Thank you very much.
Mr. Price. Thank you, Mr. Malinowski. Let me just clarify.
The Portal Bridge is the first stage in a multifaceted project,
or projects, among projects. You say New Jersey has committed
its share, and that share is how much, and what would the
total--what are the total cost projections, as of this moment?
Mr. Malinowski. Governor Murphy has committed $600 million
worth of Series A Bonds that would fund the full share, the
full expected state share of the project; that, on top of funds
that we have already appropriated to the Northeast Corridor. Of
course, we do not have the year mark authority, but I think it
is understood, within Amtrak, that this funding is to be set
aside for the Gateway Project because Amtrak cannot survive if
we allow the Tunnel and the Portal Bridge to fail. Indeed, the
Portal Bridge is the first stage. This is a bridge that was
opened in 1910. It is a swing bridge that opens on a--on, kind
of, a pivot, whenever boats pass, and it is so rickety that,
when it swings back into place, they often, now, have to send
out a guy with a sledge hammer to hammer it back into place, as
stranded rail passengers wait. It is the main source of delays,
right now, in the Northeast Corridor, and, of course, a delay
there affects rail traffic all the way up and down the
corridor.
The tunnel is the next stage, and, of course, a longer-term
effort. That is not yet fully ready to go because we are
waiting for the environmental review to be released by the
Department of Transportation. The Portal Bridge is shovel
ready, permitted, reviewed. The only obstacle is they are not
releasing the grants.
Mr. Price. Thank you. Mr. Diaz-Balart.
Mr. Diaz-Balart. Just know that there is no light between
the Chairman and I on the importance of that, of those
projects, and of what has to happen, and, so, we will continue
to work with you.
Mr. Malinowski. Thank you, sir. I look forward to the
subcommittee, maybe, some point, visiting the Gateway Project.
It is a fascinating ride through that tunnel when the lights
are on, and you, actually, see what a piece of infrastructure
that old looks like, and thank you for your understanding and
your support.
Mr. Price. Thank you. We will next call our colleague, Mr.
Visclosky. Welcome to the subcommittee. You are recognized for
5 minutes, Mr. Visclosky; happy to have you submit any
lengthier materials for the record.
STATEMENT OF HON. PETER J. VISCLOSKY, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF INDIANA
Mr. Visclosky. Mr. Chairman, my statement is in the record.
I appreciate the opportunity to appear before yourself, Mr.
Diaz-Balart, and I am, simply, here to make three points. One
is to profoundly thank both of you, as well as members of the
committee and the staff, for your work on the Capital
Investment Grant Program. For 3 years running, 2017, 2018, and
2019, you have not only restored, but invested monies in these
accounts that are important to the gentleman who just spoke
before me, and others across this nation, including a vital
redevelopment project in my district. I thank you for that.
I also understand that, while FTA has monies in their
account for fiscal year 2019, we are waiting for the obligation
of funds at this point in time, and would certainly ask for
sufficient Congressional oversight, as far as their activities,
or lack thereof, and, finally, would ask the subcommittee to
continue in the vein they have been in, to include language, to
ensure that the prerogatives of the Congress and our committee,
under article I, are abided by the administration, in these
accounts, and the will of the people are abided by. Again, I
cannot thank you enough. I know you will do your best. I want
you to know I appreciate it.
Mr. Price. Thank you very much. Mr. Diaz-Balart.
Mr. Diaz-Balart. Mr. Chairman, I, actually, just want to
thank the gentleman for his leadership. Your leadership has
been, frankly, not only aggressive, but exceedingly effective.
I want to thank you for the way that you have always, not only
brought issues, but solutions to those issues. It is a
privilege to work with you, and, again, the Chairman and I look
forward to continuing to helping in any way we can. I know I
can speak for the chairman, even though I, obviously, should
not, but, again, there is no light between us, and I just want
to thank you for your leadership, sir. I yield back.
Mr. Price. I agree with my colleague, as you would expect,
in expressing gratitude for your leadership on our Defense
Subcommittee, the vital work you do there. We are honored that
you have broken away to speak with us, this morning, about
needs closer to home, in terms of your own district. Would you
like to take just a second to elaborate on the district
relevance of what you have just told us?
Mr. Visclosky. On the district relevance, I described the
First Congressional District as, this school year, having over
73,000 less children in school than in 1970, which gives you a
sense of the magnitude of the job loss and the hopelessness of
people who have just moved because they do not see the
advantage. We are contiguous to Chicago. We are on the largest
body of fresh water in the world. We have every East-West
freight line for interstates, but we are stuck.
If we connect to the economy of Chicago, whose economy is
larger than Sweden's, we can prosper. We have the South Shore
South End Railroad. It is very effective. It is very slow. Our
intent is to expand service and was pleased that they received
a medium-high rating for the expansion portion of the project
in this year's budget and would anticipate that we will make
progress on what is called a double tracking, to reduce travel
times and increase the number of trains on the East-West leg.
That would connect us, and, just to give you an example, in
Michigan City, which is the Eastern Terminus, by and large of
my district, it takes an hour and 40 minutes to get on the
train to Downtown Chicago. The completion of this project will
reduce that to, about, 57 minutes.
You are now part of that economy, and all of the quality of
life that Michigan City holds. Gary, IN, and that is the city
of my birth; I live in Gary, today. It was recently described,
in an economist article, as a post-industrial Hell; their
words, not mine. The neighborhood I live in, in Gary, if you
can get to Chicago, with the changes in this mass transit, in
40 minutes or less, you begin to regrow that great city's
economy and gives hope to its people. Critically important, and
I would point out, we have all the non-Federal share for 50
percent. The State of Indiana has contributed, our Regional
Development Authority, and 16 of our 20 local communities, in a
completely bipartisan fashion. It is a beautiful thing, Mr.
Chairman.
Mr. Price. Thank you. You are very convincing, and we
appreciate your testimony.
Mr. Visclosky. Thank you. I would just, parenthetically,
add that our colleague has a choice as to where he would want
to spend his time this morning. That would be either on the
Defense Subcommittee or on yours, and I see he has made the
right choice. Thank you very much.
Mr. Price. All right. Thank you, and, now, we will call
forward Representative Max Rose.
STATEMENT OF HON. MAX ROSE, A REPRESENTATIVE IN CONGRESS FROM
THE STATE OF NEW YORK
Mr. Rose. That is what I am talking about. Chairman Price,
it is good to see you. Thank you for your continued leadership.
Ranking Member Diaz-Balart, I do not believe I have, actually,
formally met you. So, nice to meet you, and thank you for your
leadership, as well. Mr. Aguilar, you are the man. So, I
appreciate the opportunity to come here, before you, today,
because, quite frankly, my district, Staten Island, South
Brooklyn is dealing with a commuting nightmare. It is dealing
with overall with some of the worst traffic in the country, our
commute average is 69 minutes per day; 69 minutes. Can you
honestly imagine that? Two hours spent less with your family, 2
hours spent less pursuing leisure.
Our buses just never show up, and overall we have
collapsing infrastructure. My district also leads New York City
in terms of private car commuting as a consequence of our
failed infrastructure on Staten Island and South Brooklyn,
whereas 22 percent of Manhattanites commute by car every day,
on Staten Island it is 68 percent. That is just a massive
economic burden as well.
My constituents would just love the opportunity to use
public transportation. They just do not have it. Now, no one
sent me here to complain, so we are coming to you with some
real options for things that we can do.
First, it is one-way tolling on the Verrazano Bridge needs
to be repealed. The Verrazano is the only bridge in the Nation
whose tolling is controlled by a Federal mandate.
This mandate was put in place 30 years ago, and the reasons
for doing so have been addressed by modern technology. It is
about time Federal law catches up.
Two-way tolling would generate millions of dollars in
additional revenue for New York State MTA, which has a critical
funding deficit, and this creates an opportunity for us to
leverage two-way tolling into increased state and local
investment, particularly in south Brooklyn, and Staten Island,
both of which are in need of additional buses.
If you all want to chip in and help for us to pay for the
additional cameras, for the E-Z Pass System that would be much
appreciated since we would have had those cameras, had one-way
tolling not been in place in the first place.
You know, it is only poetic justice that we deal with this
through this committee because one-way tolling was originally
imposed through a THUD appropriations bill.
Next my district needs substantial improvements to our
major highways, the Staten Island and Westshore Expressways.
Tens of thousands of cars use these expressways each day to get
to work, from New Jersey into Brooklyn, and we can do this, do
critical programs like the Surface Transportation Block Grant.
Continued support for capital investment grants is also
critical for improving access to public transit. Thousands of
my constituents, as I said, don't have a public option near
their home, we need additional ferry services. Staten Island is
an island, South Brooklyn right on the water as well. We are
prime for so much ferry service to the rest of New York City,
and even to New Jersey.
We also, though, have to look at some other options for bus
rapid transit. We have North Shore bus rapid transit plan that
is going through an environmental review right now. Staten
Island Light Rail projects as well, particularly on the West
Shore as well as going into New Jersey.
Study show that these projects can have commuting time, and
we need this community's assistance finishing the studies for
these plans.
Now, I am aware that planning and implementing public
transportation projects, requires coordination between the
Federal Government and state and local agencies.
More than anything requires that this committee appropriate
sufficient funding to making sure that the necessary resources
are available and are used effectively.
Therefore, I ask the committee members to include in their
report language, prioritizing projects in regions with long
commute times. I think America as a whole is going through a
rising commuting nightmare as more and more jobs concentrate in
urban city cores.
In my conversations with many members of this committee, I
have been encouraged by your desire to effect real change in
the way that America and Americans move around. We all came
here to make people's lives better, and I have shared with many
of you the sentiment that there is no better way to do that
than to ensure that people get to and from work quickly, and
reliably, and can spend more time at home with their families.
Thank you for the opportunity to speak with you today. And
I will look forward to working with you all going forward.
Mr. Price. Thank you very much, Mr. Rose, for your
testimony. Mr. Diaz-Balart.
Mr. Diaz-Balart. I actually, just also want to thank you
for your testimony. And we look forward to working with you.
Mr. Rose. Thank you very much.
Mr. Price. Now, we welcome, Representative Steve Watkins.
Glad to have you, sir.
STATEMENT OF HON. STEVEN C. WATKINS JR., A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF KANSAS
Mr. Watkins. Thank you, Mr. Chairman. And thank you Mr.
Diaz-Balart, and thank you Mr. Aguilar.
I come here today to draw your attention to Highway 69, it
is a major route that extends through a large section of my
district. I am in eastern Kansas, and this Highway 69 stretches
from north to south connecting Kansas City, which is in our
northeast corner down to our southeast corner.
I am an engineer by schooling and by trade, I have
overseeing millions and millions of dollars of construction in
several countries, and I note through visually observing as
well as talking with our state officials that this highway is
in disrepair.
And it is not just a matter of the surface and subsurface
layers cracking, but we are also experiencing an increase in
volume. Traffic accidents are on the rise, and they are far
above the rates of state-wide averages and national averages.
What we have got is a two-lane highway with several, actually
three freeway corridors that intersect along Highway 69.
And as the subcommittee drafts their fiscal year 2020
appropriations bill, I respectfully ask that you include a
request for the Department of Transportation to conduct a study
on the safety of Highway 69.
The safety of American highways is essential and valuable.
There is no doubt on the return on investment proper safety
plans and maintenance of our highways is a direct investment in
American ingenuity and quality of life, failing to do so
results in slower economic growth, hazards and even deadly
driving conditions.
Thank you for the opportunity to speak with you today. And
I encourage you to lead the effort in rebuilding America's
infrastructure. Thank you, sir.
Mr. Price. Thank you, Mr. Watkins. I wonder if you could
elaborate. We will get your full statement on the record, but
we have a couple of minutes here. I wonder if you could
elaborate a bit on the state's part in this, and the level of
state concern and state effort.
Mr. Watkins. Sure. Most of what I have participated in, and
I have had privy to has been, I have actually driven by private
citizens leading the effort and holding hearings in meetings in
conjunction with the Kansas Department of Transportation. Now
there has been improvements made on the highway, and not all
parts are as dangerous as I have described.
Now I can provide a report that clearly answers your
question, but efforts to this point have largely been civilian
driven.
Mr. Price. All right. Thank you. Mr. Diaz-Balart.
Mr. Diaz-Balart. Mr. Chairman, really on a point of
personal privilege. Because I just, you know, want to thank you
for stepping up today. We look forward with you. But also, I
would be remiss if I didn't thank you for your selfless service
to the country.
Mr. Watkins. Thank you.
Mr. Diaz-Balart. You are doing it now, and you have been
doing it all your life, and as well as your family. So I just
wanted to take the opportunity to thank you for that, and it is
not something that we do not cherish and admire. So, thank you,
sir.
Mr. Watkins. You are welcome, sir.
Mr. Price. Thank you.
Mr. Watkins. Thank you.
Mr. Price. We are going next to the witness stand. Our
Representative Gil Cisneros, welcome.
STATEMENT OF HON. GILBERT RAY CISNEROS JR., A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA
Mr. Cisneros. Thank you, sir. Chairman Price, Ranking
Member Diaz-Balart, Mr. Aguilar, members of the House
Appropriations Subcommittee on Transportation Housing and Urban
Development, thank you for allowing me this opportunity to
provide input on the fiscal year 2020 appropriations process,
on behalf of the residents of the California's 39th
Congressional District.
I am here today to encourage you to once again reject, on a
bipartisan basis, the damaging cuts to transportation and
housing funding proposed in the President's Fiscal Year 2020
budget request.
My district is one of many across this nation that relies
on federal funding for local infrastructure projects to fund
housing programs and advance our economy. Today, I want to
highlight just a few examples of the programs in the 39th that
deserve your attention.
Among the many highway funding streams under your
jurisdiction, I urge you to provide increased funding for the
INFRA Discretionary Grant Program. My district is home to a
major trade corridor along California State Routes 57 and 60.
Stakeholders in my district have been working to advance the
57/60 Confluence Chokepoint Relief Project for over a decade.
This month, I sent a bipartisan letter with nine of my
regional colleagues in support of the community's second
application for an INFRA grant after their application was
rejected last year.
I have met with local officials who highlighted that in the
past year, the total cost of the project has increased due to
the delayed start date and recent changes in trade policies.
Strong funding levels for the INFRA Grant Program will ensure
this project is competitive and completed.
Additionally, I urge you to provide strong funding levels
for the Low or No Emission Vehicle Program under the Federal
Transit Administration.
I have heard from transit entities across my district who
are working to meet the statewide goal of reaching 100 percent
zero-emission bus fleets by 2040.
The so-called Low-No bus program will help transit systems
in my district transition their fleets to the lowest polluting
and most energy-efficient vehicles.
Further, I hope that you ensure robust funding for rail
infrastructure programs, including BUILD Transportation grants
and the Transit Oriented Development, TOD Pilot Program.
The city of Placentia in my district is proceeding with
site planning and has secured local and state funding for a new
MetroLink station.
Federal funds through BUILD and TOD programming will ensure
the timely completion of this project and associated economic
development plans.
Regarding housing programs, I am extremely troubled that
the President has proposed to eliminate key housing and
community development programs, like the Community Development
Block Grant program, CDBG.
Since being sworn into office, I have met with
representatives in every city in my district. In every single
meeting, mayors, council members, Democrats and Republicans
urge me to fight for increased funding for CDBG.
Our cities need these funds to improve the quality of life
for vulnerable populations. Chino Hills uses these funds to
support the House of Ruth, which serves domestic violence
survivors who need shelter. Walnut uses these funds to support
home renovations for special needs family members.
Contrary to the President's budget, these programs are not
low value, and I hope you will reject this proposal.
Finally, as a former Navy officer, I am outraged that the
President has not requested funding for HUD-VASH in his budget
request. It is deeply troubling to see my fellow veterans
unable to find safe, comfortable housing.
We owe it to them to do whatever we can to support local
efforts to finally end veterans' homelessness. I stand with my
colleagues calling for a return to the fiscal year 2017 funding
level of HUD-VASH, to 47 million.
Thank you again for your time and consideration. I know you
have a tough job ahead of you given the constraints of the
Budget Control Act. I hope you will keep these stories in mind
as you craft the Fiscal Year 2020 Transportation, Housing and
Urban Development Appropriations Acts.
Thank you very much.
Mr. Price. Thank you, Mr. Cisneros. We welcome you to this
institution, and to this committee, and we appreciate your
testimony. I can assure you that this subcommittee has a
history of an independent and largely bipartisan scrutiny of
these budget items. Many of which you have mentioned. The CBDG
of course ranks very high, so does VASH. We appreciate your
concern about these matters, and we will tend to them. We
intend to look at those very carefully.
Let me turn to Mr. Diaz-Balart for any questions he has.
Mr. Diaz-Balart. Mr. Chairman, I just want to echo your
words and I wholeheartedly agree. And thank you for coming in
front of us today. I yield back.
Mr. Cisneros. Thank you very much for the time.
Mr. Aguilar. Mr. Chairman.
Mr. Price. Thank you.
Mr. Aguilar. Mr. Chairman?
Mr. Price. Oh. I am sorry. I recognize Mr. Aguilar.
Mr. Aguilar. No, I just wanted to say briefly to Mr.
Cisneros, and other members who are new to Congress who are
testifying, this is the group under the leadership of Ranking
Member Diaz-Balart when he was Chairman, and Mr. Price is
Chairman now, has done exactly what they have both said, is to
push back on priorities that are important for our communities
and our regions.
A lot of the programs that you mentioned were protected and
saved under the leadership of both of these two individuals. I
also want to speak a little bit to the region that Mr. Cisneros
represents. Much like some of our Florida colleagues, a lot of
our regions are interconnected, and so people may live in my
district and work in Mr. Cisneros district, or live in his
district, and drive through my district. We are all connected,
and a lot of these priorities that he has talked about are not
parochial and have broad support within regions because of the
interconnectedness that we have in Southern California.
So, I thank you for bringing these priorities forward, Mr.
Cisneros.
Thank you, Mr. Chairman.
Mr. Price. Thank you.
Mr. Cisneros. Thank you.
Mr. Price. Thank you, Mr. Cisneros. Now, we call on
Representative Adriano Espaillat. Glad to have you, sir.
Mr. Espaillat. Thank you, Mr. Chairman.
Mr. Price. We recognize you for 5 minutes, and we will put
any additional materials you wish in the record.
STATEMENT OF HON. ADRIANO ESPAILLAT, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF NEW YORK
Mr. Espaillat. Thank you, Mr. Chairman; Mr. Ranking Member.
I want to first start by thanking the Ranking Member, last year
he helped out in some housing-related matters, with Lake View
Housing Complex, and it proved to be very successful. So,
bipartisanship sometimes does work.
First, I want to thank you, Mr. Chairman, members of the
committee, for allowing me to testify this morning. My full
written testimony was already submitted, but I wanted to take a
few moments of your time to highlight the specific areas of
interest and concern that I have.
The first item that I want to speak about is the capital
investment grants. These grants are vital to the growth or
modernization of our local transportation systems. I know this
program has bipartisan support, but I want to add my voice to
the consistent leaders on this issue, Congressman Blumenauer
and Congresswoman Walorski.
The Second Avenue subway is slowly but surely making its
way uptown in New York's 13th congressional district. This is a
century-long endeavor in the city of New York, and it requires
city, state and federal funding, including CIG funding which is
part of the new STARTs program.
And I support this type of funding and my constituents
direly need the extension of the Second Avenue subway, and when
you are in New York, and you don't take a cab because it is no
longer practical to do that, because this becomes a permanent
parking lot, and you have to take the train, I hope you take
the Second Avenue subway, and you get to where you are going on
time.
So, we need the moneys for this. As a new member of the
Transportation and Infrastructure Committee, and the only
member representing New York City, it is extremely important to
my constituents and to all New Yorkers, that the CIG and New
Starts Program continues to receive bipartisan support. For
that reason I urge the committee to reject the administration's
proposed cuts to the program, and maintain funding at current
levels.
Now, I know from both sides of the aisle, many of our
colleagues have projects that will surely benefit from New
Starts, and I am optimistic and hopeful that we will keep the
funding.
The MTA, that is the larger, broader subsystem, not just
the Second Avenue Subway. It is like your brake pads, you can't
expect to run your car 100,000 miles with the same brake pads,
you are either going to have an accident, or you are going to
have a major, major mechanical, auto-mechanic bill coming up
with your front end.
So, the MTA system continues to have great needs, and I am
hopeful that this committee would advocate for the funding of
subway systems in New York City. The economy in many ways, the
financial district is joined at the hip with our subway system.
New York City's economy is really relying on fast and reliable
public transportation, and not to have it will hurt, not only
New York City, but the rest of the country as well. So, I hope
that you invest wisely in our New York City public
transportation system.
Furthermore, I would be remiss if I did not urge in the
strongest term the importance of funding GATEWAY, the GATEWAY
Project especially, and especially the replacement of the
Hudson Tunnel, so it is a regional need, the Northeast Corridor
is very fragile.
In fact, I think it is a national public security problem
there, to have such a fragile corridor of the country in the
way that it is, and I suggest and encourage funding for a new
way.
And finally, Mr. Chairman, and Mr. Ranking Member, I think
that transportation and infrastructure is not just roads,
bridges and tunnels, and that is a traditional, so like,
description of it, but it also involves things like public
housing.
I know the Ranking Member is very aware of that, and that
is something that is very dear and near to him.
Public housing is part of our infrastructure network, and
we must invest in NYCHA, the New York City Public Housing
Authority, 440,000 people living in NYCHA buildings. That is
bigger than many cities, small cities, even mid-sized cities in
the country.
And we have all seen it in the news, the dire conditions
faced by many of these families, so we have to invest in
capital improvements for our public housing, not just in New
York City, but across the country.
We are the landlords, the Federal Government is the actual
landlord, and we must have full responsibility in having a save
and human conditions for many of the families that live in
public housing. With that I end, Mr. Chairman. I know there are
other matters such as housing voucher programs that I support,
as well as other block grants, community development block
grants that I also support, but I think these are major
initiatives and I hope I find the support in this committee.
Thank you so much.
Mr. Price. Thank you, Representative. We are fortunate
enough, I think to have Transportation and Housing under the
same roof, so to speak, in the appropriations process, for many
of the reasons that you state. And you won't find disagreement
here with the notion that housing and community development is
also part of our country's needed infrastructure and
development crying out at this moment for investment. We
appreciate your testimony.
Mr. Diaz-Balart.
Mr. Diaz-Balart. Mr. Chairman, very briefly. This is a
member who has been exceedingly effective and persuasive, and I
want to thank you for your involvement, your direct
involvement.
You know, just to note that this subcommittee, whether it
is the chairman or the ranking member, or whether it is the
staff and their teams, we frankly work as partners, in absolute
trust. That is one of the reasons that I think not only have we
been able to do important things, but it will hopefully
continue to do important things, and just know that, and again,
if I may be so bold to even speak for the chairman, but we work
together, and to make sure that we fulfill the priorities of
the country, and I personally want to thank you for just being
hands-on as you are and your staff.
And so I know that I can speak for the Chairman and our
staffs, to thank you for your involvement, and we look forward
to working with you and the chairman on that.
Actually, I can pretty much use that also as my closing
statement. I yield back. Thank you.
Mr. Espaillat. Thank you.
Mr. Price. Thank you, Mr. Espaillat. Next we will hear from
a colleague, Jeff Van Drew. Welcome, sir.
STATMENT OF HON. JEFFERSON VAN DREW, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF NEW JERSEY
Mr. Van Drew. Thank you. Thank you. It is good to be here.
Chairman Price, Ranking Member Diaz-Balart, and members of the
Transportation Housing and Urban Development Subcommittee, I
thank you for the opportunity that you have given me today, to
speak on behalf of the over 1,400 men and women at the William
J. Hughes Technical Center in Atlantic City. They keep our sky
safe, and I am deeply proud to represent them in Congress.
I represent New Jersey's Second Congressional District
which encompasses a large swath of the State's land mass, and
is known for its biodiversity, beaches, fisheries and tourism-
based economy.
The Tech Center is the Federation Aviation Administration's
National Scientific test base for the research, development,
test and evaluation of air transportation systems. The
research, testing and prototype development conducted by Tech
Center staff help shape the future of the Nation's air
transportation system. In short, it is the Nation's premiere
Air Transportation System Federal Laboratory.
The Technical Center has a number of unique laboratories
engaged in research that contribute to aviation system
development, air traffic management laboratories, simulation
facilities, a human factor's laboratory, the next-gen
integration and evaluation capability, a cockpit simulation
facility, a fleet of specially instrumented, in-flight test
aircraft.
The world's largest full-scale aviation fire test facility.
A chemistry laboratory for analyzing the toxicity of materials
involved in a fire, surveillance laboratories, a full-scale
aircraft structural test, evaluation and research facility. The
national airport pavement testing facility and an unmanned
aircraft systems research and development simulation
laboratory.
The Tech Center is the heart of an aviation cluster that is
unparalleled. A lot of work at the Tech Center is done in
partnership with the academic, private and public entities such
as NASA, the Department of Defense, Department of Homeland
Security, U.S. Marshalls, and the U.S. Coast Guard. I hope the
subcommittee supports robust funding for the Tech Center
laboratory facility, laboratory sustainment, next-gen, and
operations planning. The next-gen support portfolio and fire
research, and safety, among others.
Finally, I oppose the administration's attempt to require
Tech Center employees to fork out more of their own money for
their retirement plans.
Public service is a calling for the Tech Center employees.
They are proud to contribute to their safety, security, and
competitiveness of their country. And oftentimes they give up a
much more substantial salary that could have commended in the
private sector.
When the government breaks its commitment, it sends an
unmistakable signal.
The recent 35-day Government shutdown, the longest in our
Nation's history really hurt morale at the Tech Center as 971
employees were furloughed, and 449 were asked to work without
pay.
Critical projects were significantly delayed. Tech Center
employees, like many Federal employees, simply do not trust the
Federal Government to keep its end of the bargain anymore and
may choose to take their expertise elsewhere.
I implore the subcommittee to reject these onerous cuts to
Tech Center workers. And again, I ask the subcommittee's
support robust funding for all programs and operations at the
William J. Hughes Technical Center.
I thank the subcommittee for its time, and look forward to
working with all of you to ensure the safety of our skies.
Thank you.
Mr. Price. Thank you, Mr. Van Drew. We welcome you to the
Congress, and to this subcommittee, and we appreciate your
testimony. Your region, New York, New Jersey metropolitan
region and beyond, have been well represented here this
morning, and we appreciate the chance to learn more about the
work at the Tech Center, I have been here long enough to
remember very fondly, Bill Hughes.
Mr. Van Drew. Yes.
Mr. Price. And the good work he did. And we appreciate your
championing of the Tech Center's work, and its employees.
Mr. Van Drew. And I will continue to do so. And Bill Hughes
is doing well.
Mr. Price. Good, good to know. Mr. Diaz-Balart?
Mr. Diaz-Balart. Mr. Chairman, and you spoke very well for
me. And so I will yield back. Thank you so much.
Mr. Price. Thank you very much. We appreciate your
testimony.
Mr. Van Drew. Thank you so much.
Mr. Price. Ms. Jackson Lee? It is a pleasure to welcome you
to the subcommittee, and we will put your full statement, and
any material you want to place on the record, but we will
recognize you for 5 minutes.
STATEMENT OF HON. SHEILA JACKSON LEE, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF TEXAS
Ms. Jackson Lee. Mr. Chairman, thank you. Ranking Member,
thank you; and thank you for the work of this committee. It is
sort of the backbone of local communities, and they are eager
to see the committee's work.
Let me first of all frame some issues that may seem to be
authorizing commentary, but I know in the midst of your great
work and understanding of how dependent our various agencies
that deal with Transportation-HUD issues, are on the Federal
Government.
As relates to transit, I would hope that we would be able
to overall fund the program at the authorized level or more,
and not at the proposed administration budget.
I am shocked at the administration's budget because they
had a commitment to do an infrastructure bill, which obviously
is going to take some dollars. Increasing the flexibility where
possible so local government, meaning local government, not
state governments, can flex funds to local priorities allowing
for increased funding of transit projects with highway category
funds.
That flexibility will allow local transit entities would be
very helpful. Allow flexibility of utilizing funds remaining in
the full funding grant agreement so we can use funds for
supporting enhancements that were not included in the FFGAs.
So, to look at that language would be very helpful.
I am a strong supporter of ensuring the recovery of the
Virgin Islands and Puerto Rico. I want to emphasize that. I do
have, actually the appropriation's process to look at the $300
million that was given in resilience, and whatever has not been
used by Puerto Rico and the Virgin Islands, to go back to those
particular entities, like those impacted by Hurricane Harvey,
and asses their needs as well. We understand the commitment
that had to be made to Puerto Rico additionally.
Secondarily, I am hoping for an increased amount of funding
for bike safety. I will be introducing legislations regarding
incentives for states to focus on bike safety. I have one of
the highest numbers of bike death in the Nation down in Houston
and down in Texas, and it is a transportation dollars
incentivizing them to get States to really turn their focus.
It is not just bike trail, which I support wholeheartedly,
and gave the first $6 million to my community, way back, to
establish this massive bike trail system that they have. But it
is bike safety that is crucial.
I support 1.25 billion for transportation investment TIGER
grants, they are the lifeline of local communities. I support
$2.5 billion for New Starts, Texas, but let me just say Houston
is about 20 years behind, because we had some distractions in
getting funding early on though many of us oppose it. This is
going to help the efforts that we have.
I support $120 million for the FTA providing grants to the
state and local governments. I support $2.3 billion for the
Amtrak Passenger Rail, I have always been a support of that
Amtrak service that is crucial East Coast.
I support $3.1 billion for capital assistance for high
speed rail. We are engaged in the process of high-speed rail
going from Houston to San Antonio, to Dallas. We are using
certainly private funds to a certain extent, but the Federal,
State and local partnership is vital to this program, and it is
going to be an economic engine for many rural communities which
I think is important.
I represent the airport and so the $3.4 billion in airport
improvement, that is where I think we need the greatest
investment in tarmac reconstruction safety and security is
crucial.
As it relates to HUD, again, my district faces the largest,
or let me just say, a huge number of homeless. I interact with
them, pass them in huge numbers in Downtown Houston. We have
tent cities in Downtown Houston made by the homeless, but more
importantly we have our veterans, of course, that are engaged.
So, $3.5 billion for community block grants, the homelessness
of working people is also, the unhoused, it is vital that we
begin to build housing across America, and be partners to that.
And so I support the $120 million for housing for the
elderly, which is crucial. I would even like to see that
increased. And I support the $1.6 billion for the home
investment partnership program, there is so many people that
are designed to be in homes. They are working Americans.
Now, there is a different issue on the credit score. I
happen to think if you are a working American, and you can show
that you pay your--that the normal bills that you need to be
able to get your down payment and get a house.
I support the idea of home investment. I support $21.5
billion for tenant-based rental assistance, too many people
being evicted, $42.5 million for Fair Housing Initiative, we
still have the unfortunate circumstances of discrimination
against immigrant, against the LGBTQ community, against
elderly, against the disabled and against minorities.
I support $500 million for HUD VASH programs. Again, that
is homeless veterans. Many in my district, $90 million for
housing counseling assistance, $160 million for lead poisoning,
I think that is a good--I would like to see that increased. I
think we are finding more lead than we might believe in places
where we would not believe that we are finding it.
There are a lot of people living in homes that they are
renting, and that are very old, in communities like mine that
have lead.
Finally, I support $360 million for housing opportunities
for person living with AIDS, this was something that I
supported way before I came to the United States Congress, and
I will tell you that it is a, I will use the term blessing, for
individuals living with HIV/AIDS.
Finally, let say that I thank both of you for the service
that give, count us as partners in this work. You have a vital
committee for vital lifesaving programs for the American
people. I yield back.
Mr. Price. Thank you, Ms. Jackson Lee. We certainly agree
as to the vitality of this committee and the work we do, and we
appreciate your advocacy over this broad range of programs. It
reminds us of how much work we have to do. We appreciate you
being here. Mr. Diaz-Balart.
Mr. Diaz-Balart. Mr. Chairman, I have had the privilege to
work on a number of different areas, and so I want to also just
join your words. Thank her for being here. But she understands
the importance of the subcommittee. And just know that the
subcommittee is committed to a lot of the issues that you just
mentioned.
So I want to thank you. Thank you, Mr. Chairman.
Ms. Jackson Lee. Thank you.
Mr. Price. I believe, Ms. Jackson Lee----
Ms. Jackson Lee. Thank you for the time.
Mr. Price. Thank you. And we appreciate your being here.
And I believe Ms. Jackson Lee is the last of our witnesses. Are
there any others coming forward? If not, any closing comments,
Mr. Diaz-Balart?
Mr. Diaz-Balart. Mr. Chairman, I want to thank you for
holding this hearing, again, this is an important step to
putting together a crucial piece of legislation that is always
challenging. But again, I look forward to working with you with
the staff, and with all the members that have testified in this
subcommittee to putting together a great bill that we can all
be proud of.
Thank you, Mr. Chairman.
Mr. Price. Thank you. We have had an interesting range of
members today, and some real challenges put before us. So, we
appreciate that input from veteran members, and also from some
of our newest members, and all in between.
With that the subcommittee will adjourn.
[Material submitted for inclusion in the record follows:]
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Wednesday, April 3, 2019.
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
WITNESS
HON. BENJAMIN S. CARSON, M.D., SECRETARY, DEPARTMENT OF HOUSING AND
URBAN DEVELOPMENT
Mr. Price. The hearing will come to order.
We would like this morning to welcome our Secretary, Mr.
Secretary, from the Department of Housing and Urban
Development, Dr. Ben Carson, to our annual budget hearing. So
welcome back. We are glad to see you, Mr. Secretary.
Across the country, communities are grappling with an
affordable housing crisis. Many of the people affected by this
crisis are the most vulnerable among us: seniors, the disabled,
low-income families with children, and veterans. Studies from
HUD and other sources indicate that more and more families are
struggling to pay rent.
The Department's most recent worst case housing needs
report to Congress identified more than 8 million renters who
spend more than half of their current income on rent, live in
severely substandard conditions, or both. Yet today, just one--
excuse me, one in four families eligible for Federal housing
assistance gets the help they need. That is 25 percent.
So at a time when housing should be a front-burner issue
right up there with education and healthcare in terms of basic
human well-being, it seems to be actually falling further
behind.
As I have said before, this isn't a reality written in the
stars somehow; this is a political failing. It represents a
political failing, and it can be changed. For many years,
nearly all of HUD's affordable housing and community
development programs have been underfunded compared to
demonstrated need. We know from both personal testimony and
available research that HUD programs make a positive difference
in the lives of millions of people. They can transform
struggling communities, improve health and education outcomes,
especially for children, reduce homelessness, and support self-
sufficiency and human dignity.
That is why it is disappointing that the Department for the
third year in a row has put forward a budget request that is
wholly inadequate for the task at hand. Sometimes we say the
third time is the charm. I don't think so in this case. HUD's
request includes about $39.7 billion in total budgetary
resources. That is $9.7 billion less than fiscal 2019 enacted.
It is a cut of 20 percent.
Mr. Secretary, you propose in your budget to eliminate
community development block grants. Eliminate. Eliminate the
home program, the public housing capital fund, choice
neighborhoods, special vouchers for homeless veterans. That
list goes on, and I haven't even mentioned the numerous
reductions in the request.
On that front, it appears that your budget request could
leave core housing assistance programs such as Section 8
vouchers without adequate funding to continue serving all
existing tenants. This could put thousands of families at risk
of becoming homeless.
These sweeping program eliminations and reductions are not
only unacceptable but also unrealistic. It is exhibit A of this
administration's draconian approach to budgeting, and it
utterly fails to consider the stark human cost it would impose
on our fellow citizens. And by the way, none of this would
ever, ever balance the budget. But it would disinvest in our
communities. I would call that the worst of both worlds.
I would also like to register my serious concerns with the
Department's so-called rent reforms, which would essentially
shift HUD program costs on to residents. These proposals were
rejected on a bipartisan basis last year. I expect the same
will occur this year.
In addition, during the last 2 fiscal years under the
leadership of Mr. Diaz-Balart, this subcommittee provided
significant new targeted resources for HUD programs to assist
the disabled, the elderly, the Native Americans, so we need
more clarity about when this funding will be awarded.
Finally, we need to hear directly from you, Mr. Secretary,
on a host of other topics, including the Department's actions
to improve housing quality standards, to enforce our Nation's
fair housing laws, and to administer disaster recovery funding
to assist States and territories hit by recent natural
disasters.
The current state of housing in America should force us to
ask tough questions about our national priorities. Those who
live in federally assisted housing are not second-class
citizens. They, in fact, are our neighbors, working parents,
seniors, the disabled, and young children. They are seeking
stability and opportunity in their lives just like the rest of
us. They deserve a place in our communities; indeed, they are
often serving our communities. Unfortunately, this budget
proposal would make our affordable housing crisis even worse,
and it would relegate vulnerable people to an even more tenuous
and marginalized existence within our society.
So, Mr. Secretary, HUD and its dedicated employees have a
challenging and vital mission. I look forward to working with
you to ensure that you have the resources you need to carry it
out.
I would now like to recognize my good friend and the
ranking member of the subcommittee, Mr. Diaz-Balart.
Mr. Diaz-Balart. Thank you very much, Mr. Chairman.
Secretary Carson, welcome back to the subcommittee. It is
always good to see you, my friend.
I would like to start by thanking you for always making
sure that our lines of communication are open, are direct,
honest and, frankly, very productive. I have now had the chance
to work with you directly for over 2 years, and I continue to
be impressed, continue to be impressed with your dedication to
making sure that HUD's programs are run as effective as
possible. The budget caps deal of fiscal year 28 and 29 set
up--really set us up to make some significant investments to
improve our communities and enable economic growth. When we
made decisions for that bill, Chairman Price and I worked
together as a team to ensure that housing programs were
included, frankly, as infrastructure investments, which a big
part of them are, and as a result, we increased funding for
CDBG, home, tribal grants and other HUD programs that leverage
affordable housing production.
Now, we made these investments while working to ensure that
rental assistance programs could continue to serve those in
need. We have placed a lot of responsibility, Mr. Secretary, on
your shoulders as you work to carry out these new, frankly,
sometimes large investments in our communities. Much of this
investment is carried out in the State and local level, and we
appreciate that your relationships, sir, with governors,
mayors, and community organizations has, frankly, been key and
is key in getting that job done.
Look, I have seen this commitment firsthand, Mr. Secretary,
as we traveled together in Miami and we heard from local
community leaders. Your attention to the local needs and local
solution has, and I will tell you this sincerely, has really
been felt by my constituents, and I want to thank you for that.
We also appreciate that you have an enormous
responsibility. As you work to carry out the over $35 billion
in CDBG disaster recovery dollars that we provided for
Hurricanes Harvey, Irma, and Maria in 2017, and the additional
down payment of $1.7 billion for Hurricanes Michael and
Florence and the California wildfires, among other disasters,
just to name some, right?
Obviously, we want to make sure that these funds get out to
our communities so that they can rebuild in a way that reduces
the impact of future storms; that is the goal. If we do this
right, and you know because you are committed to it, we must do
it right. The human and financial cost of future hurricanes,
wildfires, and other disasters will be reduced, and our
investments will bring value to the tax dollar.
I want to thank you and your team for all you are doing in
Florida--in and for Florida, Texas, Puerto Rico, and elsewhere
to carry out the CDBG-DR program. There is a lot of work in
front of us, and again, I want to thank you for your commitment
and your hard work. Obviously, we know that you face
constraints when you put together your budget request. That is
just reality.
Just like last year, we are unlikely to agree on all of the
things that you have put forward, like eliminating, you know,
CDBG or home and public housing capital funds. Everyone knows
that our job in this committee has always been to review
proposals by whatever administration happens to be in place,
and then put together a bill that this committee believes is
the best and that we can actually--that can actually become
law. So I appreciate that.
As we have restored these programs in the past, Mr.
Secretary, you have carried them out in good faith and ensured
that they continue to serve the intended purpose that Congress
has put forth. I am also very pleased to see that you have
placed a priority on homeless programs with a request of $2.6
billion, with a continued emphasis on performance-based
requirements. That is something that I think is key.
This program, along with VASH vouchers, veteran vouchers,
has been a huge success in Miami, as you know. You helped
celebrate, you went down there to help us celebrate a major
milestone when we effectively ended homelessness for veterans
in Miami-Dade County.
You know, this was a remarkable achievement, helping a
group of people that, frankly, deserve it potentially more than
just about anybody. And I thank you, Mr. Secretary, and I thank
you and your staff for your dedication to those individuals and
to this issue.
I am also pleased to see a major emphasis on lead and
healthy homes with a historic high request of $290 million.
This investment reflects your deep understanding of the
connection between housing and health.
Mr. Secretary, your personal story is an inspiration. It is
an inspiration to everyone in this country. You came from
humble beginnings. You worked against all odds to become a
world-known and respected surgeon, and now, with your service
at HUD, you continue to show deep, deep commitment to helping
others climb the ladder of opportunity and help those who need
it most.
I want to thank you for your service, Mr. Secretary. I look
forward to your testimony, and I look forward to continuing
working with you in an effective and, frankly, in a positive
way. So thank you again for being here.
Mr. Chairman, I yield back.
Mr. Price. Thank you.
We are happy to have with us this morning the chairman and
ranking member of the full committee, and so for opening
statements, I will turn first to Mrs. Lowey.
The Chairwoman. Thank you, Mr. Chairman.
And welcome. It is a pleasure to have you with us today.
And I would really like to thank Chairman Price and Ranking
Member Diaz-Balart for holding this very important hearing.
Mr. Secretary, your budget is very similar to last year's
request, which this committee rejected on a bipartisan basis.
This year, your proposal contains even deeper cuts and would
greatly reduce public housing and end most community
development block grants. It would lead to more people
struggling to find affordable housing and more people falling
into homelessness. And, in fact, as I was hearing my good
friend Mr. Diaz-Balart talking about this, I thought maybe we
were talking about two different people, because I certainly
have a different analysis.
Let me give you a couple of examples. Community development
block grants, which make successful investments in community
development, such as affordable housing, antipoverty programs,
home investment partnerships, which provides affordable housing
for low and very low-income Americans, the primary source of
funding for the development, financing, and modernization of
public housing. I must tell you, I visit public housing on a
regular basis. I couldn't believe that we are cutting back on
funds to upgrade public housing.
And some of the dramatic increases in your request would
cause great suffering and harm, including cuts of $63 million
for housing for people suffering from HIV and AIDS, $198
million for tenant-based housing, $34 million for housing
assistance for the elderly, $27 million for housing assistance
for the disabled. Frankly, I don't see any justification for
these harsh cuts.
This administration often makes the argument that it has no
choice but to cut even the most critical programs to reduce the
deficit. But, my friends, let's remember, the Republican tax
bill alone will add $1.9 trillion to deficits from 2018 to
2027, and there is no honest reconciliation of the two.
Let me be clear, these cuts do not exist in a vacuum. If
enacted, they would cost taxpayers even more than current
investments in the very types of assistance you propose to
eliminate or severely cut.
Housing, in my judgment, is really the foundation on which
the rest of a life is built. It is nearly impossible to go to
school, get a job, raise a family, or age in place without
having a stable place to live. These investments play a big
role in empowering hardworking families, giving children a good
start in life, and providing economic opportunity for all
Americans.
I do hope, and I welcome you, I do hope you will take these
concerns seriously. I look forward to a productive discussion
today, and thank you again for appearing before us.
Mr. Price. Thank you, Madam Chairman.
Ms. Granger.
Ms. Granger. Thank you, Chairman Price, for holding this
hearing.
Welcome, Secretary Carson. Your stewardship of the
Department of Housing and Urban Development is important to all
our communities. When I was mayor, I saw firsthand the
importance of housing assistance for our most vulnerable
citizens, including the elderly, the disabled, and our
veterans, and we want to work with you to ensure that the
programs you oversee are as effective as possible, while
protecting the taxpayer, but also, to respond to those who
badly need housing help.
The HUD budget request for fiscal year 2020 propose some
cuts that are concerning to members on both sides of the aisle
in this subcommittee. The proposal to eliminate community
development block grants could be particularly harmful because
the program provides a critical resource for local decision
makers to build affordable housing and generate economic
development.
I second the remarks by Ranking Member Diaz-Balart talking
about disaster relief. HUD also plays an important role in
disaster recovery, and your work is particularly important to
communities in Texas after the devastation of Hurricane Harvey.
As it was stated, in the last Congress, we provided more than
$35 billion for long-term recovery from the 2017 disasters,
along with mitigation funding to strengthen communities to
withstand future storms and reduce the cost to rebuild. We want
to work with you to ensure that those resources get to the
communities, and they haven't yet, so that rebuilding can get
under way, and we hope to hear more about that today.
Mr. Secretary, thank you for your commitment in making
HUD's program as effective as possible so that your agency does
its part to lift people out of poverty and move them forward
toward opportunity. This is important to all of us. We look
forward to your testimony today.
And I yield back.
Mr. Price. Thank you, Ms. Granger.
And, Mr. Chairman, we are happy to hear from you now if you
could give us an oral summary of your testimony for 5 minutes
or so. We will put your full statement in the record. We again
welcome you.
Secretary Carson. Thank you.
Chairman Price, Ranking Member Diaz-Balart, and members of
the subcommittee, thank you for the opportunity to appear
before you today to discuss the President's proposed fiscal
year 2020 HUD budget.
This spending plan seeks $44.1 billion, an increase of 7
percent over last year's request. It also seeks a record amount
of funding to reduce lead-based paint hazards and other home
health and safety hazards. And this budget will continue
providing support for the nearly 5 million families HUD serves
through its rental assistance programs.
In short, this budget will support HUD's combined efforts
to provide safe, decent, and affordable housing for the
American people, while being good stewards of taxpayer money. I
would like to touch upon each of these areas individually.
This administration is requesting nearly $2.6 billion to
help local communities house and serve individuals and families
who are living in shelters or on the streets. This represents
an increase of nearly 3\1/2\ percent over last year's levels.
In my time in Washington, I have learned this is one area on
which we can all agree.
Preventing and ending homelessness remains a strategic goal
of this administration, and working with our local partners, we
are seeing a positive and measurable impact. HUD's fiscal year
2020 budget includes a request for $290 million for the Office
of Lead Hazard Control and Healthy Homes. This doubles the
investment this administration sought last year, and is $60
million higher than the funding enacted in fiscal year 2018.
As a doctor, it pained me that after treating a young
child, they often returned to a home that wasn't healthy. Quite
simply, you cannot be healthy if your home is sick.
This undeniable link between health and housing is also
driving an active campaign at HUD to overhaul our 20-year-old
inspection process. HUD will now provide advance notice of just
14 days before an inspection because it became clear to us that
too many PHAs and landlords were using the weeks and in many
cases months before their inspection to make quick fixes and
game the system.
These actions are part of a top to bottom review of our
inspections so we can be true to the promise of providing
housing that is decent, safe, and healthy to the millions of
families we serve.
Just last week, we instructed HUD inspectors to begin
evaluating all public housing and privately owned multifamily
properties under contract with HUD for the presence of a
working carbon monoxide detector. Additionally, in the coming
weeks, HUD will send notices to PHAs and multifamily owners
regarding the installation of carbon monoxide detectors. We
continue to pursue every possible way to ensure detectors are
present in units that need them.
Across our rental assistance programs, HUD has requested
sufficient funding to ensure that all currently served
households continue to receive assistance. The administration's
budget continues to support 4.7 million HUD-assisted households
by increasing rental assistance to $38 billion. This request
will allow HUD to maintain rent subsidies for our primary
housing programs, including our tenant and project-based
Section 8 programs.
The budget also proposes $644 million for the Section 202
program to support the rents of the elderly. In addition, the
request includes $157 million for the Section 811 program for
persons with disabilities.
While we are here to talk about the administration's
funding request, I would like to point out that not every
challenge can be simply solved by more financial resources. One
of my priorities as Secretary is to work with our Federal,
State, local and tribal partners on identifying and eliminating
regulatory barriers that unnecessarily increase the costs of
America's housing supply.
Despite low unemployment and strong economic growth, we
face stiff headwinds in our efforts to increase access to
affordable housing. This crisis is not only a Federal problem;
it is everybody's problem. The Nation's public housing stock is
experiencing a backlog of billions of dollars in capital needs.
Our budget again proposes to merge the public housing capital
fund and operating fund to give greater flexibility to PHAs to
pay for capital improvements.
Meanwhile, the budget expands HUD's rental assistance
demonstration. HUD is specifically requesting $100 million in
dedicated funding for the RAD program and that the statutory
cap on converting units be eliminated once and for all. To
date, RAD has placed more than 100,000 units of public housing
on a more sustainable funding platform. These are affordable
housing units that we may have lost forever if not for RAD.
To support HUD's fair housing mission, the budget proposes
$62.3 million to allow us to continue fighting housing
discrimination, increase awareness of people's rights, and
enhance economic opportunity. Advancing economic opportunity
for all is perhaps the fairest thing we can do.
I am proud to chair the White House Opportunity and
Revitalization Council to help breathe new life into long
forgotten corners of our country. While we can be very proud of
the economic growth we are experiencing, there are still
communities that have seen little or no investment in
generations. It is our intent to support over 8,700 opportunity
zones across the Nation, economically distressed places that
approximately 35 million Americans call home. We estimate these
opportunity zones will attract over $100 billion in private
investment to spur economic development and create jobs.
This kind of medicine is precisely what a doctor would
prescribe to help communities where too many now live in
poverty.
To conclude, this budget advances our key priorities,
including empowering HUD-assisted families to achieve self-
sufficiency. For generations, the idea of the Federal
Government providing housing assistance meant only one thing:
helping to pay the rent so families could have a roof over
their head.
However, we must also think about how we can help families
access financial programs, educational opportunities, and
higher paying jobs. In short, we must think beyond investing in
bricks and mortar and think about investing in people. This
budget does just that.
I look forward to your questions.
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Mr. Price. Thank you, Mr. Secretary. You are indeed
anticipating, I expect, a number of the questions that we are
going to have, including the account you gave of the safety of
public housing residents and the plans to strengthen your
inspection programs, which I want to get to. But first, I want
to turn to a matter that I think you can answer fairly briefly,
and I think it is important to get on the record, and it has to
do with the priorities this subcommittee has set, particularly
in the last 2 years, with respect to--with respect to certain
housing programs for the first time getting back into the
construction of some new affordable housing.
SECTION 202/811 VOUCHERS
In these past 2 years, in partnership with my friend, Mr.
Diaz-Balart, we have provided nearly a billion dollars in
targeted resources for housing programs. We provided $400
million for new Section 811 vouchers for people with
disabilities, $156 million for new construction for Section 202
housing for the elderly, $113 million for new construction for
housing with people with disabilities, and $200 million in
grants for travel housing, all of that by way of getting past
just a holding pattern to actually some much needed new
construction.
So I would like for you to tell us this morning, if you
will, exactly where we are on implementing these increases,
what is the status of the Notice of Funding Availabilities, the
NOFAs, for these programs, and when do you expect we will have
awards for new construction and new vouchers? I appreciate your
answering to your best ability orally and then providing any
remaining information for the record.
Secretary Carson. We will be happy to provide you the
detailed information on that. Those NOFAs should be out in this
quarter, and the appropriate documents present before the end
of the summer.
Mr. Price. So the NOFAs for 202 and 811 both out by June
30, you are saying?
Secretary Carson. Yes.
Mr. Price. All right. And then the NGOs, the others who may
want to apply for this would be able to do so midyear?
Secretary Carson. I would expect so. And I should also just
mention right here that, we have empaneled a task force at HUD
to look at all of the grant programs that we have and to cut
out as much unnecessary time as we can so we can get things
done much more efficiently.
There are some portions of the organization that work very
effectively and get things done in a matter of days and others
that seem to take months to do everything. That has disturbed
me quite significantly, and we are making great progress. I
think you are going to see some big changes there.
Mr. Price. All right. Well, we will look forward to getting
these programs going once again. They are very, very much
needed in our communities, and I can promise you, from North
Carolina, there are going to be lots of--lots of interest and
particularly in the new opportunities for elderly housing and
housing for people with disabilities.
PUBLIC HOUSING SAFETY
All right. Now let me turn to this really tragic issue of
deaths in public housing units and what we can do about the
safety and security of these units. The coverage of this has
stressed that HUD, up until now, has not required carbon
monoxide detectors in public housing, nor has this been a
regular object of inspection.
Since 2003, 11 tenants in public housing, that we know of,
have died from carbon monoxide poisoning, and this year, in a
very widely noted case, 26 public housing properties were
evacuated in South Carolina because of carbon monoxide leaks.
That also, by the way, bears witness to the difficulties with
our public housing maintenance and repair. But carbon monoxide
leaks, two tenants died as a result in South Carolina, and
these properties had all passed their most recent HUD
inspections.
Now, you have given us an account here of your intentions
going forward. Do you have any particular assessment of how
this happened and what is most important to fixing it? I mean,
I am thinking about a combination of new requirements and where
those requirements would apply, hopefully not just to public
housing, also to rental units. What kind of plans do you have
for integrating these matters into your regular inspection
schedule or for an expedited inspection schedule where there is
a perception of high risk? Could you just flesh out the plans
here? Because this does qualify as an emergency, I think.
Secretary Carson. Yes. Thank you for that question and for
your attention to this. It is something that disturbs us.
Obviously, my heart goes out to the families of those victims
that you mentioned. We have, as of last week, already included
in the REAC inspection carbon monoxide monitors, working carbon
monoxide monitors, and we are notifying not only the public
housing but to all the multifamily and housing that is
supported in any way by any of our programs.
Interestingly enough, most States already have regulations
regarding carbon monoxide monitoring; however, it is not always
enforced. And that is something that we are paying particular
attention to right now as well.
Mr. Price. This, from this day forward, is a part of what
is required of the managers of public housing.
Secretary Carson. This will be part of it, yes.
Mr. Price. Yes. And the inspection process is--it is fine,
I think, to integrate this into the regular inspection
schedules, but in situations of high risk, are there plans to
serve notice, to expedite inspections, to target inspections?
Secretary Carson. Well, as I said, as of last week, it is
already in process. And in addition to that, we will be working
with Members of Congress to put some real teeth into some
legislation requiring this, and also, looking at other areas.
There are multiple things that affect people's health, and I
want to be more proactive in this area, not wait until there is
a crisis like this to bring our attention to it.
Mr. Price. Good. Glad to hear you say that.
Mr. Diaz-Balart.
Mr. Diaz-Balart. Thank you, Mr. Chairman.
VOUCHERS FOR DISABLED VETERANS
Mr. Secretary, in our fiscal year 2018 and 2019 bills, this
committee placed a major priority on increasing support for
persons with disabilities. That was a key priority of Chairman
Frelinghuysen. As we are all aware, many of these disabled
people who face inadequate housing are veterans, and many of
them are obviously among the working poor. We provided nearly
$500 million for new vouchers for this program--for this
population, I should say, over the past 2 years. HUD has
allocated about $100 million for these new vouchers so far.
Any idea when you anticipate that the rest of those funds,
those vouchers will be released again to the communities?
Secretary Carson. Well, we have a number of people working
on that. Obviously, a very, very important initiative, the
disabled, the elderly, the veterans, and we appreciate the
support, the financial support that you have given and are
committed to utilizing that in the most effective and efficient
way and anticipate that, again, before the summer.
Mr. Diaz-Balart. That is good to hear. And obviously, stay
in touch with us, let us know how that is progressing.
Secretary Carson. Absolutely.
Mr. Diaz-Balart. That will be helpful. And obviously, we
know that these vouchers can be challenging to lease, frankly,
because of the unique needs of this community that we are
trying to serve, and so interesting if you know of any steps
that you might be taking to assist public housing authorities.
Secretary Carson. Well, we are providing technical
assistance to the public housing authorities because, as you
mentioned, they are not sometimes familiar with how to enact
these programs
Mr. Diaz-Balart. Correct, correct, absolutely.
Secretary Carson. And so we have devoted a lot of attention
to getting that information out to them
Mr. Diaz-Balart. Great. I look forward to, again, getting
further information and to working with you to make sure, if
there are any issues, any hiccups, to let us know.
Secretary Carson. Okay.
SECTION 811 VOUCHERS
Mr. Diaz-Balart. Also, we also provided over $110 million
for new disabled housing units over the last 2 years. Chairman
Price was especially instrumental in securing these new funds.
Again, those funds have not all been made available. Any idea
when you expect to send out your notice of funding availability
for availability for these new funds, these new units?
Secretary Carson. I am anticipating during the first half
of the year and certainly before the summer is over.
HOMELESS ASSISTANCE
Mr. Diaz-Balart. Good to hear that. Mr. Secretary, I
mentioned that I was pleased to see that in your budget request
it includes $2.6 billion for homeless assistance grants. The
idea of ending homelessness, you know, may have once seemed
kind of out of reach in a dream, but we are making real
progress towards this goal. And as you have noted, general
homelessness is down 13 percent since 2010, and veterans
homelessness is down 49 percent. I mentioned that in my opening
statement, part of that.
Your emphasis on reforms in the homeless programs through
the Housing First model and performance requirements for
grantees has no doubt contributed to some of these recent
positive trends in homelessness--the positive downward trends,
I should say, in homelessness.
I have seen firsthand the improvements brought by this
performance-based approach. Miami's programs have adapted to
this new model, and by the way, there were some growing pains,
but they are performing much better as a result.
Can you describe how your grantees are adapting their
programs to, again, a performance-based model?
Secretary Carson. Sure. Well, first of all, homelessness is
a problem that, I think, we have the ability to obliterate in
our lifetime. We have a very prosperous country, and it is
really a matter of getting people at all levels to concentrate
on this problem. It is not just a Federal problem, but getting
State and the local municipalities. And one thing that has
helped enormously is also getting the private sector involved.
Getting the faith-based communities and the nonprofits involved
has made a huge difference.
Now, a lot of these organizations have been very effective
with their programs, and they don't particularly all agree in
terms of the philosophy that they have. You know, some say
housing first only. Some say, no, we have to have requirements.
And there is a whole gamut. So rather than ferret that out and
say you are the best or you are the best, we have just said
let's see who is getting results. Evidence. And let's support
the programs where there is evidence that they are effectively
getting people out of a homeless situation, getting people to a
self-sufficient status, and making sure that the people who
cannot be self-sufficient are taking care of in the most
effective way.
Mr. Diaz-Balart. Thank you. Thank you, Mr. Chairman.
Mr. Price. Mrs. Lowey.
The Chairwoman. Thank you, Mr. Chair.
HUD INSPECTIONS
Millions of lives depend on HUD upholding its mandate of
decent, safe, and sanitary housing. According to GAO, HUD's
system of inspecting public housing is flawed. Media reports
indicate numerous properties that recently passed a HUD
inspection were uninhabitable or unsafe. GAO also recently made
14 recommendations to address these deficiencies, and as I hope
you know, HUD largely agreed with these recommendations.
However, the report also noted that your department doesn't
have sufficient resources to implement these recommendations,
yet the budget request would result in a reduction of funds to
carry out inspections. This amazes me.
Mr. Secretary, given the lower funding levels in the budget
request, how would you ensure that HUD-assisted housing is
safe?
Secretary Carson. Okay. Thank you. That is a very important
question. It is something that has been of great concern and
something which we have placed a lot of attention. You know,
when I came in and realized that people could get different
inspection scores within weeks from different inspectors, I
said there is something wrong with this system, so I ordered a
top to bottom reevaluation and revamping.
One of the things that you have seen as a result of that
recently as only a 14-day notice as opposed to the weeks and
months of notice that people used to get so it would allow them
to cover things up. Some have said that the number of people
who are living in squalor has increased since I have been here.
That is not the case at all. What has happened is that we have
exposed what is going on, and we are no longer allowing it to
be swept under the rug, so it can be dealt with full frontally.
Those are the kinds of things that are going to make a
difference. Can we use more inspectors? We probably can. Are we
training them better? Absolutely. Have we realized that when we
go with the least expensive inspectors on a contractual basis
that you get what you pay for? Yes, we have realized that. Are
we making appropriate changes? Absolutely. And are we hiring
more of our own inspectors? Yes, we are.
The Chairwoman. I just don't understand why you would ask
for a reduction of funds to carry out inspections. So you are
saying with the reduction of funds, you can do a better job and
respond to the evaluations? I'm a little puzzled.
Secretary Carson. No, I am not saying that. I am saying
that, you know, the budgetary process is a collaborative
effort, and whatever funding we have we will use efficiently
and effectively to take care of that problem.
The Chairwoman. Look, I visit public housing on a regular
basis. I am pleased that there are inspectors that are pointing
out deficiencies. I do hope you have the resources to improve,
to respond to these inspections, and that is why we are here,
to listen to you, to get your recommendations and, to the best
of our ability, to respond.
LEAD ABATEMENT
I want to mention one other thing which you addressed. You
mentioned the seriousness of lead in public housing. And it
seems to me you are giving with one hand, taking away with the
other. The net result is a step backward in our effort to
prevent childhood lead poisoning.
Why are you cutting funding to address this very serious
health risk?
And I would like to follow up on Chairman Price's question
about the execution of the Federal--of fiscal year 2018
appropriations. I understand the fiscal year 2018 lead notice
of funding availability is expected soon, but we are 6 months
past the end of fiscal year 2018.
Now, I want to say I go way back on this issue when I ran
the antipoverty program in New York State. This has been a
problem for a long time. We know it is a tremendous challenge.
Why did it take so long to get the funding into the field?
Secretary Carson. Well, first of all, let me just correct
the record. We are not asking for less money for lead. In fact,
we are asking for more, considerably more, twice as much as we
asked for last year. And I do recognize that that is a very
substantial challenge, but one that we can, in fact, overcome.
In terms of any new grants and programs that are delayed,
there are a number of reasons for that, one of which is making
sure that, in fact, the programs are done in the most effective
and efficient way. One is because we had a delay secondary to
the shutdown. And one is because there is inefficiencies in the
program. And as I mentioned before, we are looking at every
aspect of our agency right now in trying to cut down on those
inefficiencies.
The Chairwoman. My time is up, but if I may, Mr. Chairman,
I was just passed a statistic, which says you would modestly
increase the funding for the Office of Lead Hazard Control and
Healthy Homes by $11 million, while also eliminating $25
million in the public housing capital fund, which was
established to help public housing authorities tackle this
problem.
Thank you, Mr. Chairman.
Mr. Price. Thank you.
Ms. Granger.
CDBG-DR
Ms. Granger. Mr. Secretary, the GAO recently released a
report on the community development block grant disaster
recovery program and found that only a small amount of the
funds appropriated for Texas have made their ways to
communities and individuals. In fact, as of January, only $18
million of the $5.6 billion allocated for 2017 storms has been
spent.
Can you explain why there is such a low rate of
expenditures, and what can be done by HUD in the State of Texas
to speed up the funds getting to grantees? Businesses have been
closed, people have become homeless, communities are devastated
because they haven't had those funds.
Secretary Carson. The moneys have been appropriated. The
spending plans have been approved. We have left it up to them
in terms of the dissemination of those funds. In terms of the
mitigation money that is due, that will be finished by May 1.
Ms. Granger. The GAO recommends that a permanent
authorization for this program would be helpful. Do you agree
that the program needs to be authorized, and would that make it
faster for the programs to get to communities?
Secretary Carson. In terms of having a one-size-fits-all
solution, could that speed things up? The answer to that is
yes. Does it take into account the individual nature of all the
disasters? The answer to that is no. Is it possible for us to
work together to figure out a way that we can amalgamate the
two and come up with a better system? The answer to that is
yes. And are we willing to do that? The answer to that is yes.
Ms. Granger. Good. I will work with you further on that.
VOUCHER MOBILITY
Let me, while I have still got some time, the 2019
appropriations bill included a new program that provides
vouchers to families so they can move to neighborhoods with
greater economic opportunities. The committee worked in a very
bipartisan way and close with the authorizers to establish that
voucher program. What is the current status of the program? And
also, are there lessons that can be learned from this
demonstration project would benefit other HUD programs?
Secretary Carson. Sure. That program is moving along well.
In addition to that, what we have done is authorized a study of
why people, particularly in higher opportunity neighborhoods,
don't accept vouchers. We have discovered a lot of very
interesting things. We are in the process of removing a lot of
those barriers.
You know, for instance, in one large metropolitan area,
people didn't want to accept vouchers because they had the
impression that the tenants would destroy their property. And
the city then guaranteed all the landlords that they would take
care of any damage that the tenants would do, and consequently,
the resistance disappeared.
Now, it cost the city almost nothing because the tenants
were not destroying the property. This is a misperception that
people are going to come in and destroy property, particularly
after they have been waiting a long time to get a voucher. But
it means that we have to deal with perception as well as
reality when we come up with the solutions for these programs.
Ms. Granger. That is good news. In the community I am from,
I have lived in all my life, Forest, Texas, there were areas
that were very low income and they didn't have stores, they
didn't have businesses to work in. That has changed
significantly, and it hasn't moved people out of that
community, but it has allowed opportunities. And it is
fascinating to watch and really exciting to watch, having known
them so much and having lived in some of those communities. So
any way that we can be helpful----
Secretary Carson. And that is very useful, because what we
really want to do is we want to improve the communities that
have been neglected, as well as give people the opportunity to
move. We want to have choice in this.
Ms. Granger. Thank you very much.
Mr. Price. I thank you.
Mr. Quigley.
Mr. Quigley. Thank you, Mr. Chairman.
Thank you Dr. Carson for being here, and thank you for
coming to Chicago, and we appreciate your meeting with the
LGBTQ individuals, community in Chicago about the
nondiscrimination guidance.
Secretary Carson. Yes.
NONDISCRIMINATION GUIDANCE
Mr. Quigley. And I appreciate your listening. But I am
obviously very disappointed that HUD's decision communicated to
me versus via a March 6 letter from one of your deputies that
the Department will not be replacing the guidance it took down
shortly after you took over the helm at HUD. For the community,
this decision hurts.
Forty percent of homeless youth are LGBTQ. Put another way,
LGBTQ youth are 120 percent more likely to become homeless and
far more likely to be discriminated against at shelters. So
that is frustrating.
Despite this decision, a relevant HUD rule from 2012 and a
regulation from 2016, they remain in effect. So how will these
grantees comply with the regs without this guidance, sir?
Secretary Carson. Well, in fact, the guidance was pretty
much obliterated by the 2016 rule. I know we have gone back and
studied it very carefully and concluded that putting that
subregulatory guidance there actually confused the issue and
made a lot more regulations necessary, and we are trying to
simplify things. We have not removed the rules, we have not
changed the rules at all.
Mr. Quigley. Sir, you in Chicago asked the question about
the difficulty--for example, a front desk shelter worker who
were handed identification that doesn't match the presenting
gender of the bearer. The presenting gender of the bearer. That
was the question you asked, and I want to make sure I got it
right, and the response was that is why you need the guidance.
The grantees need this guidance to avoid the discrimination and
to make clear to them what the rules are. I mean, and there are
no inconsistencies there.
In addition to that, HUD missed, by almost 6 months, a
deadline that was in the appropriation report to review the
guidance you took down. So you didn't meet the deadline, and
you just simply decided not to put the guidance up. And if
anything is confusing, wouldn't working on the guidance help
resolve what you are saying is confusion?
Secretary Carson. Well, the agreement was that the
guidelines would be reviewed. It wasn't that they would be put
back up. And they were reviewed, and it was concluded that the
2016 rules obliterated the guidance that was there and confused
the issue. The rules stand as they are. We have not made any
attempt to change them.
Mr. Quigley. Well, and that has incredibly confused this
issue even further, sir, your answer today. So why don't we
start over.
Secretary Carson. Okay.
Mr. Quigley. Regardless of how HUD in D.C. views this,
across the country, people are being discriminated against, and
they are falling victim to crime and all the other issues that
come with being homeless and not being able to get into a
shelter. So despite the fact that I wholly disagree with you
that 2016 obliterates anything, there is still a lack of
guidance. So if all you are doing is drawing guidance from 2012
and trying to clarify 2016, doesn't it make sense to create new
guidance and post that so the grantees know and that the youth
of this country know that they have rights and that they can't
be discriminated against?
Secretary Carson. From my conversations with many legal
experts throughout government, my suspicion is that you would
probably dislike the subregulatory guidance that would be put
up and that this provides you with considerably more freedom.
Mr. Quigley. Are you suggesting that doing nothing provides
greater protection, by putting no guidance up on the website is
providing this----
Secretary Carson. I am suggesting that you might not like
the guidance--subregulatory guidance that was put up.
Mr. Quigley. And why is that? I am a glutton for
punishment.
Secretary Carson. Because you probably wouldn't agree with
it.
Mr. Quigley. Because it goes along with allowing people to
discriminate against LGBTQ youth?
Secretary Carson. The rules that are there allow people to
have a nondiscriminatory atmosphere, and that is what we are
trying to achieve.
Mr. Quigley. So if it says you can't have a discriminatory
atmosphere, why don't you have guidance that posts that and
instructs them not to discriminate?
Secretary Carson. The rules already say that.
Mr. Quigley. Well, where is the--even if we go around and
around, where is the guidance for that?
Secretary Carson. If you have a rule that tells you what to
do, you don't need more guidance on that.
Mr. Quigley. All right. We are all now more stupid than we
were when we came in the room today, sir. Thank you.
Mr. Price. Mr. Womack.
Mr. Womack. Thank you, Mr. Chairman.
Thank you, Mr. Secretary. Before I get to a couple of my
questions, just a note of personal privilege here this morning.
I was walked over this morning by my communications director,
Alexia Sikora, and she was telling me about her boyfriend's
cousin, a kid named Matthew Massone, who in 1986, at a very
young age, was riding his bicycle and was struck by a car and
critically injured. And it was your gifted hands that saved
that young man's life. He is a father of three today,
successful business owner, and----
Secretary Carson. Thank you. I appreciate that followup.
Mr. Womack. All the work you do in HUD is as good as it
is--
Secretary Carson. Thank you.
Mr. Womack [continuing]. Pales in comparison to the work
you have done in saving lives, and I thank you for that.
OPPORTUNITY ZONES
My State of Arkansas has 85 opportunity zones, many of
which are in my district. Given your dual role as chair of the
White House Opportunity and Revitalization Council and
Secretary of HUD, can you discuss how advancing economic
opportunity, such as through these opportunity zones, can help
leverage Federal dollars to fulfill the HUD mission?
Secretary Carson. Well, thank you. We are actually very
excited about the opportunity zone program because it provides
an opportunity for people to take unrealized capital gains, and
these would be invested somewhere anyway, and this encourages
them to be invested into economically neglected areas, deprived
areas.
This provides an opportunity to bring in an enormous amount
of capital. A conservative estimate would be $100 billion. And
that provides a lot of funding for many of the very programs
that we have been talking about today, in terms of building
affordable housing, in terms of general community development,
infrastructure, economic development. All the things that all
of these programs that we have had in place for many years are
doing, the opportunity zones will do in spades, like it is on
steroids, and therefore, we don't necessarily need to duplicate
all these things.
And I know that is going to be very difficult to wean
people off of some of the things that have been there before,
but we want to see real progress. We actually want to see these
communities that have been neglected move forward. We want to
give people opportunities who want to have real jobs, who want
to have training programs and apprenticeships, and integrate
all of this together, because if we develop those people in our
community, then we strengthen that community. If we strengthen
that community, we strengthen our Nation.
Mr. Womack. I agree. Good segue into my next question, and
that is the tendency for Federal programs to overlap from
agency to agency, whether you are dealing with homelessness,
with veterans, or trying to do something on finance with
Treasury. Can you give to this subcommittee an idea of the
obstacles you face with what I call stovepipe government and
the incredible obstacles that you run into from time to time in
overlapping of programs? Because leveraging precious resources
like we have is pretty important.
Secretary Carson. Well, you know, one of the reasons that
we established the Opportunity and Revitalization Council is
because you have all these agencies working at cross purposes,
and they get in each other's way. And, you know, by being able
to target our resources and our programs in a coordinated
fashion, it will be much more efficient and also makes it
possible for us to respond to problems as they come up very
effectively.
A lot of the regulations that exist, even in the Federal
Government--even though we have gotten rid of a lot of them,
there is still quite a few of them there--are old and really
don't correspond to anything that is going on today. And by
forcing everybody to take a look at those regulations at the
Federal level as well as at the local level, that is the reason
that we are able to speed things up. A lot of things are moving
a lot faster--I don't know if anybody has noticed--than they
ever have before in terms of being able to get things done.
That is only going to improve with this.
APPROPRIATIONS LIAISON DIVISION
Mr. Womack. Thank you. Very quickly, last question. Your
budget proposes shifting HUD's Appropriations Liaison Division
to the Office of Congressional Relations. The reason for that
move, and can you assure this subcommittee that we will still
have access to the information we need to do our important
function?
Secretary Carson. Yes. That will be essential. We will make
sure that that happens. But it is really to align ourselves
with all of the other Federal agencies where, in fact, that
alignment exists. We are sort of the one who is aberrant, the
way that we are doing it now, and we want to have--we want to
speak with one voice. We want to have everything being
consistent. And if we move it to the appropriate CIR, I think
that we will be able to achieve that.
Mr. Womack. Secretary, thank you so much.
Secretary Carson. Thank you.
Mr. Price. Mrs. Watson Coleman.
Mrs. Watson Coleman. Thank you, Mr. Chairman, and thank
you, Dr. Carson, for being there.
Let me first applaud for the things that I think are right
movement moving forward. I almost feel like this is a
delusional or a schizophrenic budget. One side does the good
stuff, and then on the right side, there is the really bad
stuff that is taking away from the good stuff.
HOUSING DISCRIMINATION
I applaud the decision to bring the case against Facebook
for the housing violations and to investigate Google and
Twitter, but I realize that there are other kinds of housing
discrimination issues that need to be investigated. And I
recognize that, under former President Obama, HUD Secretaries
used their Secretary-initiated complaints on the average of 10
times a year, and even under President Bush, they used their
complaints sometimes 5 times a year. However, this Facebook
investigation appears to be the only Secretary-initiated
complaint that you have issued. Could you explain to me why
there is such anemic action on your part?
Secretary Carson. Yes. I would be happy to explain not why
there is anemic action but why that is the case that we have
only had one Secretary-initiated, although we are following up
on several others. It is because our FHEO, the Office of Fair
Housing and Equal Opportunity, is very active in terms of
finding areas of discrimination and unfair housing practices
and are pursuing those things effectively. If you have an FHEO
that is doing that, you don't need to do a lot of Secretary-
initiated----
Mrs. Watson Coleman. Okay. Then perhaps we need to know
more specifically the numbers, the types of numbers of
complaints that are actually being investigated. I understand
that there is a cut to that particular program, Fair Housing
and Equal Opportunity, of $3,000,000.
As you know, segregated communities are a result of
discrimination against minorities and others throughout the
history, and simply combating the present-day intentional
discrimination does not undo segregation that has prevailed and
will not eliminate any time soon.
AFFIRMATIVELY FURTHERING FAIR HOUSING RULE
So it was apparent--it was particularly concerning to me
that you have suspended the Affirmatively Furthering Fair
Housing rule and are considering significant changes. I don't
know what the changes are, and I don't understand the rationale
behind doing something that has been a part of the fair housing
text. Could you explain?
Secretary Carson. Yes. Affirmatively Furthering Fair
Housing is something that I very much believe in. It is a part
of the Fair Housing Act. And the tool that was being used,
however, is a good statistical tool, and it shows you, yes,
there is segregation here, and there is less segregation here,
and it costs a lot of money to do that analysis and a lot of
manhours. I don't feel that I necessarily need a statistical
tool to tell me that. What I need are results. And you ask
yourself the question, why is that segregation there? The
reason is because--not because there are people like George
Wallace standing in the doorway saying, ``You can't come in
here.'' It is because of economics. It is because people can't
afford to live in other places. So what we have to do is we
have to deal with the affordable housing crisis, and we have to
be able to build affordable houses in all communities.
Mrs. Watson Coleman. Thank you. Reclaiming my time.
What is it you propose to do to ensure that these things
happen, and under what program now and with what funding are
you proposing that will actually realize this affirmative
furthering fair housing?
Secretary Carson. Say it five times. Okay. Now, what we can
do, recognizing that the real barrier to building affordable
housing lies largely at the local level because of the zoning
restrictions.
Mrs. Watson Coleman. So what is it that you think that you
are going to do under the Fair Housing Act to facilitate this
happening?
Secretary Carson. I am going to tell you.
Mrs. Watson Coleman. And I only have--I have another really
important question so I need you to, like----
Secretary Carson. Okay. We are going to give preference
points to people who actually look at those things that are
preventing the building of affordable housing. That is it in a
nutshell.
Mrs. Watson Coleman. Okay. One question. One statement.
NONDISCRIMINATION GUIDANCE
The statement: Mr. Quigley pursued this line of questioning
as it regards a rule and the interpretation or the guidance on
how to apply the rule. I don't think that you answered his
question, but you did say something very troubling to me, and
that was you wouldn't like what the outcome would be. And that
is--the only way I wouldn't like it is if it went against the
intent of the rule. So I would very much like, through the
chairman, an explanation of what it is we would be expecting so
that I can determine whether or not----
Secretary Carson. Okay.
Mrs. Watson Coleman [continuing]. That it is or is not
representative of what it should be.
Secretary Carson. Okay. I can tell you that this is an area
that many people disagree on. There is not just one group of
people who----
Mrs. Watson Coleman. It doesn't matter. I am talking about
the law. I don't care that people disagree that the LGBTQ
community should not be discriminated against. What I care
about is how we enforce the law to ensure that the LBTQ
community has access to good and affordable housing.
Secretary Carson. And the rules take care of that.
Mr. Price. I appreciate the gentlelady's request. If I may,
I will formalize it the sense of asking you to elaborate in
writing what----
Mrs. Watson Coleman. Thank you. I yield.
Mr. Price [continuing]. What your meaning was in response
to Mr. Quigley. I do think that would be helpful.
Secretary Carson. Okay.
Mr. Price. We appreciate that and now turn to Mr. Aguilar.
Mr. Aguilar. Thank you, Mr. Chairman.
Mr. Carson, I am going to return to an issue that I have
spoken to you directly about. We take, obviously, our
responsibility to ensure that Federal housing programs give
people an opportunity to achieve the American Dream, we take
that serious on this committee.
FHA LOAN LIMIT
I have talked with you about HUD's current FHA loan limit
policy that locks out consumers out of competitive FHA loan
programs, and large metropolitan statistical areas, MSAs, as we
call them, may be distorted because an MSA covers a large
geographic. For example, the San Bernardino-Riverside-Ontario
MSA where my district is located is 27,000 square miles. But
some cities are a little closer to and identify closer to Los
Angeles County.
And so, to be clear, the FHA loan limits in the San
Bernardino MSA are $300,000 less than the FHA loan limits in
Los Angeles/Orange County. Cities in my district like Upland
and Rancho Cucamonga have loan limits far below the median home
price, locking many potential homeowners out of the FHA market.
The fiscal year 2018 and 2019 appropriations language
directed HUD to study whether the county's geographic size
distorts the FHA loan limit, and our staff has been in touch
with your staff about this issue, and it sounds like a draft
could be available soon. Do you have an update on the timeline
for this report, and can you share any preliminary findings?
Secretary Carson. Well, first of all, as I am sure you
know, the loan limits are set by Congress, so we don't really
have the ability to change those at all. We are happy to work
with Congress on what they should be, taking into account all
the factors that you have just mentioned. I think they are very
legitimate issues.
And particularly in the high-cost areas, and you represent
several of those and some low-cost areas too. It makes it very
difficult to have a one-size-fits-all type of situation.
In terms of time limits, I would probably refer you to the
group that is working on that issue.
Mr. Aguilar. You mentioned policy guidance that you would
be happy to work with us on. Does your report mention specific
law changes or policy guidance that the Department would
accept?
Secretary Carson. I am sure it does.
Mr. Aguilar. Okay. I appreciate that.
UNDOCUMENTED IMMIGRANTS AND FHA LOANS
The next topic. According to the FHA handbook, mortgages
can be offered to nonpermanent residents if the applicant is
authorized to work in the U.S. and has a history of status
renewals. As you know and as I have mentioned to you, the
Deferred Action for Childhood Arrivals, the DACA program,
allows some undocumented immigrants to work in the U.S.
Additionally, in many cases, DACA recipients have renewed
their status at least once, if not more times. These
hardworking men and women pay taxes and have undergone a strict
vetting program within the DACA program. In December, an
article was published that revealed HUD had advised lenders to
stop lending FHA-backed loans to DACA recipients. According to
the article, HUD shared this information with lenders over the
phone and at conferences. However, the agency has not put any
policy in writing. Staff at your office has confirmed that the
policy has not changed, but I want lenders to have the clarity
on whether they can offer FHA-backed loans to DACA recipients.
To your knowledge, are DACA recipients eligible for FHA-
backed loans, and has HUD made any changes to existing policy
or interpretations?
Secretary Carson. Yeah. When I read that report, I inquired
of the appropriate people, including the FHA Commissioner, and
no one was aware of any changes that had been made to the
policy whatsoever. I am sure we have plenty of DACA recipients
who have FHA mortgages.
Mr. Aguilar. So it would surprise you if individuals went
to conferences and received those--if folks in the mortgage
industry went to----
Secretary Carson. Yes.
Mr. Aguilar [continuing]. Conferences and heard that
guidance or had it over the phone but not via email; it would
surprise you?
Secretary Carson. That would surprise me.
Mr. Aguilar. What would consequences be for individuals if
that was the case, if individuals were operating outside of the
guidance, out of the policy guidance, and engaging in that
behavior? What would be some consequences that you would want
to know?
Secretary Carson. Well, I would simply say that, I have
instructed everyone to follow the laws of the United States
with regard to DACA, with regard to anyone who is an immigrant
or potential immigrant to this country, and as long as you
continue to follow the laws, it will have my approval.
Mr. Aguilar. Is it possible someone outside of your
Department gave that guidance?
Secretary Carson. When you say ``is it possible,'' of
course, it is possible. Certainly no one who was authorized by
us.
Mr. Aguilar. I appreciate it. Thank you Mr. Secretary.
Thank you, Mr. Chairman.
Mr. Price. Thank you.
Mrs. Lawrence.
Mrs. Lawrence. Thank you.
Thank you, Mr. Carson, Dr. Carson, for being here. As a
native Detroiter like myself, born and raised and educated in
the city, affordable housing in the HUD budget is extremely
important to me, as you know. I was appalled to see some of the
massive cuts.
ENVISION CENTERS
Last June, you traveled to our hometown, Detroit, to launch
HUD's innovative EnVision Centers, one of your signature
initiatives, aimed at providing a one-stop shop for social
services. The center you visited in Detroit was one of 17 that
HUD planned to open across the country. However, it appears
that none of these centers are operational at this time. The
EnVision Centers are supposed to lever public-private
partnerships. In reality, individuals have stated that EnVision
Centers appear to be nothing more than rebranding work that is
already being done.
In 2017, you talked to these centers at an event at the
Boys and Girls Club in Detroit. However, leadership at that
club decided the program was not a good fit. They realized,
after due diligence to understand what resources were needed to
make it successful, they decided not to pursue it.
Secretary Carson, can you provide the committee with an
update on the status of these 17 EnVision Centers? And in
addition to that, an NBC News article cites a source close to
you indicating, and I quote, Secretary Carson is not happy
about the lack of progress being made in the EnVision Centers.
If individuals close to you say they are not pleased with
it, what is the point of continuing this initiative?
Secretary Carson. Well, the point in continuing the
initiative is that we want to get people out of poverty. We
want to use a lot of the resources that are already available
and make them accessible to people. This is something that we
learned from the HUD VASH program, where HUD provides the
housing; the VA provides the wraparound services.
Mrs. Lawrence. Do you have any centers up and running as of
today?
Secretary Carson. Well, Detroit is up and running, and this
summer, a large number of others will be opening.
Mrs. Lawrence. So----
Secretary Carson. They opened Detroit first because----
Mrs. Lawrence. Where is it being opened? Because it is not
at the center that you initially did the launch. So is it
somewhere else?
Secretary Carson. Excuse me?
Mrs. Lawrence. It is not at the Boys and Girls Club, so is
it at somewhere else----
Secretary Carson. Yes.
Mrs. Lawrence [continuing]. Because it is not--so you
picked another site.
Secretary Carson. Yes.
Mrs. Lawrence. Okay. Where?
Secretary Carson. It is--I don't remember the exact name.
It starts with a D, but it is actually--it used to be an old
high school, and it has been repurposed. It has places where
young people can train to operate businesses.
Mrs. Lawrence. Well, through the chair, if it is in my
city, I would really like to know where it is because I--from
my understanding----
Secretary Carson. We will get that information for you.
Mrs. Lawrence. So, in addition to the community, this
EnVision Center, how much money are we budgeting, because I
could not find it in the budget? How are you funding these
EnVision Centers?
Secretary Carson. Well, most of the funding comes from the
private entities around the centers. We purposely made it
something that wouldn't require a lot of Federal dollars
because we wanted the communities to own these centers. And it
takes time to put these things together. People who think that
you declare it and it just automatically pops up have very
little understanding of how things work.
Mrs. Lawrence. I have a lot of understanding. I was the
mayor, and I understand being a Member of Congress.
CDBG
I also want to put in here in 2018 and 2019, CDBG was
funded at $3.3 billion. In our shared hometown of Detroit, we
received $30 million for infrastructure. We know it can be used
for rehabilitation of homes, water mains, and sewers, streets,
but your budget states that devolving community and economic
development activities to the State and local governments
redirects prior Federal resources to a higher priority.
So your initiative or your budget is saying: Reduce the
amount of money that we give, even though it impacts these
things, and make it a local issue.
Those of us who have been in local government, there is no
money there. So it is a good concept. It is like the trickle-
down tax bill that we just went through. It is a good concept,
but it is not reality. And so can you please explain to me how
a higher priority than--what could be a higher priority than
providing vulnerable--valuable funding to low-income areas?
Secretary Carson. Well, first of all, the CDBG program is
outdated. It needs to be updated. There are 1,210 communities
through the country who get these grants through a formula. It
doesn't take into consideration the thousands of other
communities who need help, and it bases it on some criteria
that don't make sense. For instance, in some cases, you get
more money if you have houses that were built before 1940. And
there are a lot of very wealthy, well-maintained communities
that get three or four or five times as much as the poor
communities. So the program really needs to be revamped.
I am going to continue, you know, not to be particularly
supportive of it until Congress is willing to work with us to
revamp that program and make it actually effective and make it
relevant to the people who are low income for whom it was
targeted in the first place.
Mrs. Lawrence. That is like the debate on healthcare: We
don't like the plan we have, so we will cut off everyone from
healthcare until we get a new plan.
I disagree with your philosophy. Thank you, and I yield
back.
Mr. Price. Mrs. Torres.
Mrs. Torres. Thank you, Mr. Chairman.
And thank you, Secretary, for being here today. It was nice
to welcome you in my district. Pete and I both visited with
you.
Secretary Carson. I enjoyed that.
PROGRAM ELIMINATOR
Mrs. Torres. You know, I have to associate my comments with
some of the comments that have been said. I am deeply concerned
about eliminating the CDBG, the HOME Program and the Choice
Neighborhood Initiatives and the public housing capital. We
have three former mayors here.
I live in a nice house, but 90 percent of my home city
doesn't look like my street, the four homes on my street. It is
not unusual for me to sit there at night and hear gunshots. Not
a very safe neighborhood.
My home was built in 1926, but we don't get CDBG funding in
my community simply because we have, you know, old homes. It is
based on a formula, and it is poverty level, and these programs
are critically important for communities at risk such as the
community, you know, where I continue to live.
HOMELESSNESS
I am also concerned about a perception that homelessness
issues are down. In L.A. County alone, you know, the homeless
population has surged by 75 percent from 32,000 to 55,000
within the last 6 years. But in the last homeless count, it is
way beyond that. We need more funding for temporary shelters,
and we need--and our communities need funding to offset the
cost of affordable housing units. At the same time, we have to
hold housing authorities accountable for what they fail to do
in our communities, for example, discrimination against
disabled renters.
HOUSING DISCRIMINATION
Secretary Carson, a recent investigation by your Department
found that the city of Los Angeles continued to discriminate
against persons with disabilities and was not in compliance
with the Americans with Disability Act. Thank you for holding
them accountable, and thank you for doing that.
How widespread is the problem of housing discrimination
against people with disabilities, and what is your Department's
role in addressing this problem? Any additional resources--and
I don't want to just throw resources at an agency that is
failing to perform. This is the same housing authority that
received a willful violation for dealing with asbestos tiles in
housing units while children, babies were sleeping in cribs. So
it is not enough, you know, to say we are going to sue you to
come into compliance. We have to be strong about this.
Secretary Carson. I agree with you.
Well, first of all, I commend you on your attention to
homelessness and particularly in L.A. And L.A. County, where
the problem just continues to grow. Secondary to incredible
zoning restrictions, 80 percent of the land is zoned for single
family housing, and there are a multitude of other restrictions
that make housing so expensive that you have people who
actually have a job who can't afford housing there.
COMMUNITY DEVELOPMENT
Now, you know, there are two possible solutions. You can
just throw more money at it; or you can say, why is that
happening, and why is it getting worse, and is there anything
that we can do about those factors? And that is the tack that
we would rather take because, as much as we would like to throw
more money at it, we just don't have more money to throw at it.
One of the things that is very helpful is the Opportunity
Zones because a lot of money will be pouring into those, and a
lot of these distressed areas are in the Opportunity Zones:
380,000 public housing units, 340,000 PBRA units are in there.
A third of our RAD conversions are in Opportunity Zones. These
are places where a lot of the money that had been, you know,
previously obtained through CDBG and HOME and other programs
will be available through, you know, very large investments
that are made.
Mrs. Torres. But can I interrupt you for a minute and just
say that the city of Pomona, you know, where I live applied for
one of these grants. I get it. It was poorly written. We didn't
find out until, you know, 3 days before they actually submitted
their application. Cities like that that are in the red and
continuing to function in the red, there just isn't enough tax
base.
I mean, my constituents, my neighbors are living on minimum
wage. In L.A. County, it is nearly impossible to do that. You
are having to work two or three jobs. So these are working poor
people that just need a strap on their boot, right. Technical
assistance is critical for these communities.
But thank you for being here today, and thank you for your
interest, and I yield back.
Mr. Price. Thank you. As everyone knows, we are up against
a deadline in terms of the joint session that is going to
convene at 11, but we will go as far as we can with the second
round.
Mr. Secretary, we appreciate your sticking with us here,
and we will go as far as we can because your appearance is
important, and I think every member, as you have seen, has
pressing questions.
CDBG-DR
I will start off the second round with a very pressing
question both to my home State and I think to the country, that
is, the Community Development Block Grant disaster recovery
funds and where we are in getting those funds where they need
to be.
We were pleased, of course, that after the shutdown ended,
the Department began reviewing and approving State action plans
and amendments for the DR funding. However, the Federal
Register notice, as you know very well, governing the
mitigation funding for 2016 and 2017 disasters has not been
issued.
I hope the notice will take a comprehensive approach to
all-hazards mitigation. In my State, grantees are anxiously
awaiting the guidance so they can finalize the plans to
rebuild. The reports, unfortunately, that the White House may
have intervened to slow down the distribution of funds to
Puerto Rico, and the inspector general has recently opened an
investigation into the matter.
So, Mr. Secretary, I want to stress that these delays are
very harmful, of course, to the suffering of the people in
Puerto Rico but also constituents in my State along with
Florida, Texas, the Virgin Islands, Georgia, Missouri,
Louisiana, South Carolina, and West Virginia.
So I want to ask you, when we are going to have these--when
are we going to have this notice finalized? When will it be
finalized? When will grantees be able to put this funding to be
in the communities? When will HUD enter into grant agreements
with all grantees that have an approved action plan?
Secretary Carson. A filed Register notice will be out May
1st, by May 1st.
Mr. Price. May 1st you will have the much awaited notice?
Secretary Carson. Correct.
Mr. Price. All right. Good.
Secretary Carson. Which is actually a couple of months
ahead of when we had promised it was going to come.
Mr. Price. Well, you understand very well the pressure on
this and the reasons we are all feeling we need to get this
notice out and get this money flowing. We are talking about
disasters that go back to 2016 here----
Secretary Carson. Absolutely.
Mr. Price [continuing]. In some cases.
Now, about this matter of possible White House
intervention. To your knowledge, did you or anyone else at HUD
have conversations with the President or with the White House
or other senior administration officials about delaying or
diverting disaster funding for Puerto Rico?
Secretary Carson. No, but we have had conversations about
how to make sure that the money gets there and that it is used
in an appropriate way to really help the people of Puerto Rico.
I feel very strongly about that. And in fact, you know, $1.5
billion has already been assigned to Puerto Rico. All the
paperwork has been done. All the checkoffs have been done. And
as far as the second tranche of money for unmet needs, $8.2
billion is concerned; that too has already--the agreement has
already been approved.
Mr. Price. So this talk that the White House might actually
block or slow walk this funding, those reports are simply are
inaccurate?
Secretary Carson. I hope we can put an end to that rumor at
this stage. That simply is completely inaccurate as far as HUD
funding is concerned.
Mr. Price. Thank you.
Mr. Diaz-Balart.
Mr. Diaz-Balart. Thank you very much, Mr. Chairman.
Let me also stay on the CDBG-DR motif for second, Mr.
Secretary, and going back to Ranking Member Granger. Just one
of the things I would like to do is work with your staff to
figure out--you mentioned about how obviously you are willing
to figure out if there is a way to do it in a way that is with
flexibility but more formalized potentially.
Secretary Carson. That makes sense.
Mr. Diaz-Balart. So I would like to work with you on that.
Secretary Carson. Yes.
Mr. Diaz-Balart. So now let me--and again, as you know,
that is--if there seems to be a lot of interest in the
subcommittee because that whole CDBG-DR, the mitigation part of
it, which had been authorized but had never been funded until
now, and that is something that this subcommittee did, and I
think we are all very proud of.
Secretary Carson. Absolutely.
Mr. Diaz-Balart. But as you said many times, we have got to
make sure it is well spent.
HUD OPERATIONS AND THE FEDERAL BUDGET
Let me change the subject to CRs and the effect of CRs. We
have seen that, for example, a couple of--whether it was
defense and HHS, they were up and running with a full budget
year on October 1. Their programs are being executed with a lot
more certainty and I would probably add efficiency as a result.
I have heard, by the way, in the Defense Subcommittee from the
folks in the defense area that tell us how crucial it was----
Secretary Carson. Yeah.
Mr. Diaz-Balart [continuing]. To have that funding on time.
So could you describe how HUD has dealt with long-term CRs in
the past? How does that affect you? There are a lot of new
folks in Congress. They are wonderful people, but I don't know
if they may not understand how--you know, why there is a
problem with doing CRs. So what is the issue with CRs? How much
would it help you to have certainty and have the appropriations
bills done on time?
Secretary Carson. It is almost hard to describe how
wonderful it would be not to have to deal with CRs and if we
knew what our funding was going to be. And Chairman Price told
me when I was down in North Carolina we were just sort of that
far away to getting under the wire. We just missed it by a
couple of days. That broke my heart.
But, nevertheless, if there ever comes a time when people
can sit down and recognize the uncertainty that this causes and
how that has sort of a cascading effect, a domino effect, on
everything else and maybe become very, very serious about
getting these budgets out, getting them done, I think all of us
at every agency would be extremely grateful.
Mr. Diaz-Balart. And, Mr. Secretary, one of the things that
I always talk about too is that one thinks or should think, at
least, as to the impact on, you know, HUD, the departments, but
the impact on the private sector because again, a big part of
your money goes to local communities.
Secretary Carson. That is true.
Mr. Diaz-Balart. And, also, a lot of it goes to the private
sector. And so, you know, do you hear from the private sector
also with, you know, issues that this creates?
Secretary Carson. Oh, yeah. Well, they are always
wondering, you know, what is going to be the long-term impact
on them? Are they going to get their grants? What new things
are going to come up before the final budget is resolved? And,
of course, that impacts their planning, and their planning
affects their bottom line. So it is something that affects us
far beyond just the Federal Government.
Mr. Diaz-Balart. Well, you know, obviously, you know, if
the chairman is given an allocation and if we are allowed to do
our work, we will get it done, right, Mr. Chairman?
Mr. Price. Yes.
Mr. Diaz-Balart. If you let us get it done, we will get it
done.
Mr. Price. Yes, indeed, and I commend you for that very
forthright statement about the effect on you and your work if
we don't get it done.
Mr. Diaz-Balart. Yeah.
Mr. Price. We really do need to understand that all around
in this institution going forward, and I assure, you we plan to
get the work done. We are going to get an allocation. We are
going to do these bills in the late spring, early summer
timeframe and you know, work with our Senate colleagues to
bring them across the finish line.
Secretary Carson. Amen.
Mr. Price. Mr. Aguilar.
Mr. Aguilar. I didn't hear the ranking member yield back,
but I want to make sure he is okay.
Mr. Diaz-Balart. Mr. Chairman, if I would, you know, one of
things I have learned is that whether I yield back or not, if
the chairman recognizes you, you are recognized.
Mr. Aguilar. I will speak to the ranking member and to the
chairman on behalf of, I think, all the committee members to
say if they are given that top line number, if you gentlemen
are given that top line number, I feel confident that, under
your leadership, we can get this done and offer the Secretary
and the agencies the guidance that they--and the funding that
they need to serve our communities.
Mr. Secretary, you talked about some of the formulaic
programs, and we might disagree on, you know, CDBG a little bit
here and there. You had a lot of former mayors up on this dais
on both sides of the aisle----
Secretary Carson. I know.
CENSUS
Mr. Aguilar [continuing]. So that is difficult for you, but
a lot of these programs, CDBG, home investment partnership,
emergency solutions grants, they are all formulaic, and they
rely on proper counts. So can you--how important is the
accuracy of the Census to the work that the Department will do
in the next decade in order to make sure that we have
sustainable communities and strengthen housing for all
Americans?
Secretary Carson. Well, yeah. The Census count would be
very important in anything that is a formulaic manner. So in
terms of what we do, we are very much believers in evidence and
having accurate counts counts as a significant part of the
evidence. So I would give it a very high priority.
Mr. Aguilar. The evidence of an accurate count means you
count everybody. I don't think there is any dispute from an
evidentiary perspective that counting everyone means counting
everyone.
Secretary Carson. Yeah. That is what the census is.
Mr. Aguilar. That is what the census does. So efforts to
undermine that, you know, you think could be problematic in the
future to those revenue streams that provide key funding in our
communities. Is that fair? I don't want to put words in your
mouth.
Secretary Carson. Yeah. Well, I certainly am not aware of
anybody who is trying to curtail that, but----
Mr. Aguilar. Have you been to a Cabinet meeting? I will
move on.
CDBG-DR
Following up on the chairman's comment, Puerto Rico. You
mentioned $1.5 billion was out the door, an agreement approved
for $8 billion?
Secretary Carson. For the $8.2 billion for unmet needs,
yes.
Mr. Aguilar. For unmet needs. But that is not yet out the
door; it is just an agreement that is approved, right?
Secretary Carson. Correct.
Mr. Aguilar. According to OMB, I think they said $11.2
billion has been expended under all categories, but the
President tweeted that Puerto Rico got much more money than
Texas and Florida combined. Have you seen anything that would
lead you to say that Puerto Rico has received more money than
Texas and Florida combined?
Secretary Carson. Well, I know from HUD, Puerto Rico has
received about $20 billion, which is the largest grant that we
have ever given out in the history of HUD.
Mr. Aguilar. Received or----
Secretary Carson. Had that much allocated to them, yes.
Mr. Aguilar. Had that much allocated, okay. But not yet
received?
Secretary Carson. Correct.
Mr. Aguilar. Okay. How would that compare to Texas and
Florida?
Secretary Carson. They also have not received all of the
money for mitigation. That mitigation process again will be
finished by the end of this month.
Mr. Aguilar. Has Puerto Rico received more money than Texas
and Florida?
Secretary Carson. For this hurricane season, yes, they did.
Mr. Aguilar. I appreciate it. Thank you, Mr. Secretary.
I yield back, Mr. Chairman.
Mr. Price. Mr. Secretary, just to clarify, no mitigation
money has gone out the door?
Secretary Carson. Correct.
Mr. Price. All right. The money we are talking about is the
unmet needs DR funding.
Secretary Carson. That is correct.
Mr. Price. All right.
Well, welcome, Mr. Hurd. Just under the wire here, so
please.
Mr. Hurd. Thank you, thank you, Mr. Chairman. I appreciate
you saving the best for last, right?
Mr. Price. I didn't say that, but if you say so.
OPPORTUNITY ZONES
Mr. Hurd. Secretary Carson, it is a pleasure to have you
here. And in your opening remarks, you touched on two things
that are important, RAD and Opportunity Zones, and this budget
includes $100 million for RAD, which is going to prioritize
redevelopment for public housing projects in areas located
within Opportunity Zones. And could you expand on how HUD is
going to work with cities like San Antonio and El Paso in my
district to construct, you know, new units of affordable
housing in Opportunity Zones?
Secretary Carson. Yeah. We are actually going to be
providing preference points for grants when the project is in
an Opportunity Zone. We are going to also be providing
technical assistance for projects in Opportunity Zones in terms
of how to utilize what you have to get what you want because we
really see this as a major opportunity to revitalize the
neglected areas of our country, more so than anything that has
ever happened before. And some people will say: Well, we have
had enterprise zones. We have had other things before, and they
were flashes in the pan.
The difference here is that you have to have a long-term
investment. So your unrealized capital gains has to be invested
for 5 years before you get the first advantage, which would be
a 10 percent decrement in the capital gains on the original
investment. Two years further than that, you get an additional
5 percent. Ten years, you have to pay no capital gains on the
new money that was gained from the initial investment.
So that is a great inducement, but the biggest advantage,
of course, is that that money that would have been invested in
something else is invested in the areas that it is most needed
in.
Mr. Hurd. Sure. And look. I know the city of San Antonio
and the city of El Paso would love to be the gold star of this
kind of cooperation with HUD, and we will definitely need the
technical assistance and looking forward to working with you on
this.
RESIDENT DISPLACEMENT
And a related question on this. And the concern is how do
you prevent the displacement, you know, of low-income residents
in these zones once this investment goes in? How do we do that?
What is the strategy there?
Secretary Carson. Well, first of all, we will be
encouraging people to include inclusionary zoning. And also,
when you do, like, a RAD conversion, it is automatically a
long-term 30-year commitment to affordable housing. The same
thing with some of the other programs. So those things will be
emphasized in this process.
Mr. Hurd. That is helpful.
COLONIAS
And shifting gears for probably what will be my last
question, colonias. I have so many. I have more than--there are
more than 2,300 colonias in Texas, primarily along our border
with Mexico. I have over 820 miles. Over 400,000 Texans live in
colonias, and about half of these live without water and
sewage. El Paso County alone, which I represent part of, 80,000
people live in over 200 known colonias built on land that was
never zoned for residential use.
I am interested in increasing resource allocation to the
colonias in south and west Texas. What HUD programs would
ideally be--should we focus, and which specific appropriations
accounts can be addressed to enhance the activity that you all
do in colonias?
Secretary Carson. Well, I think the areas that you are
talking about do fit into Opportunity Zones, and so everything
that we just talked about, including replacement of those
inappropriate structures with something that is, you know,
decent, fair, and affordable would be a high priority.
Mr. Hurd. That is a good copy.
And, Mr. Chairman, I am going to submit for the record some
questions on MGT.
[The information follows:]
INFORMATION TECHNOLOGY
Mr. Hurd. This is Modernizing Government Technology Act,
which is important, and I ask senior leaders of the agencies
questions because making sure we have a digital infrastructure
that is going to be protect people's information but also
allows for better digital-facing services to the community and
some questions around MGT. And I would love, you know, how you
are going to use that to update some of the COBOL systems that
are currently in use.
Secretary Carson. That is a topic we love to talk about.
Mr. Hurd. IT procurement. I always say, when we hold that
parade for IT procurement, you know, I will make sure you are
invited, Mr. Secretary.
Thank you, Mr. Chairman. I yield back.
Mr. Price. Thank you.
And, with that, Secretary Carson, we want to thank you for
your time----
Secretary Carson. Thank you.
Mr. Price [continuing]. Your appearance today. The
committee staff will be in contact with you about any questions
for the record. Some you have heard in the course of the
discussion; others will be submitted. We would appreciate your
returning the information for the record to the committee
within 30 days.
Secretary Carson. Absolutely.
Mr. Price. Thirty days from Friday, we will be able to
publish the transcript of today's hearing.
Mr. Diaz-Balart, any final comments?
Mr. Diaz-Balart. Great hearing, Mr. Chairman. I appreciate
that. Thank you very much.
Mr. Price. Thank you. And, with that, the hearing is
adjourned.
Wednesday, April 10, 2019.
UNITED STATES DEPARTMENT OF TRANSPORTATION
WITNESS
HON. ELAINE L. CHAO, SECRETARY, U.S. DEPARTMENT OF TRANSPORTATION
Mr. Price. The hearing will come to order. We are going to
examine the fiscal 2020 budget request for the Department of
Transportation today, and we welcome to help us do that,
Secretary Elaine Chao. Welcome back. Thank you for joining us.
Repairing and improving our infrastructure remains one of
the top challenges facing our country. Our economy, quality of
life, and international competitiveness depend on robust
transportation networks that can accommodate the movement of
people and goods. Unfortunately, we aren't keeping pace with
the demand.
The American Society of Civil Engineers estimates that
there is a U.S. infrastructure funding gap of $2 trillion over
the next decade, and the U.S. economy is expected to lose
almost $4 trillion in GDP between now and 2025 if this
investment gap is not addressed.
And, by the way, infrastructure requires a broad view. What
does infrastructure mean? It includes related investments,
ranging from waterways and ports to drinking water systems,
affordable housing, the electric grid, trails and greenways,
and high speed broadband.
Regrettably, I don't think we can count on this
administration to be a serious partner in a major
infrastructure effort. I say that with regret. We are still
waiting for anything resembling a realistic plan. Right now, we
have a $200 billion placeholder in the budget request. But the
President has refused to engage substantively on this topic
other than a couple of sentences during the State of the Union
address, so Congress is going to need to step up, and I know
this subcommittee will continue to play its part.
Under the leadership of our friend, Mr. Diaz-Balart, we
appropriated more than $17 billion in new targeted
infrastructure investments over the last 2 fiscal years. It was
bipartisan. That was bipartisan, and the budget agreement that
made it possible was bipartisan. It let us bolster funding for
discretionary grants across all modes and to provide billions
more for transit, aviation, highway, and rail programs.
While these incremental investments are significant, they
don't constitute a massive infrastructure program. They are a
downpayment. That is the term Mr. Diaz-Balart used, and I think
that is accurate. They are a downpayment. We know there is much
more work to do, and we need another bipartisan budget
agreement to escape sequestration and to build on this
progress. Also, Congress must find a way to rightsize the
highway trust fund, and put our Nation on a more sustainable
fiscal path that provides certainty to States and localities
and other stakeholders.
Infrastructure investments cannot wait. Major projects, and
we are talking airports, highways, ports, and yes, we are
talking the gateway project in New York and New Jersey. They
only grow more expensive when needlessly delay necessary
repairs and improvements.
In short, we have every reason to be mindful of the cost of
not facing up to our infrastructure crisis. Why we should be
building runways and laying new rail; instead, it seems we are
struggling to potholes and repair aging bridges.
Now let's turn briefly to the Department's fiscal 2020
request. Secretary, we know you are requesting approximately
$83.7 billion in total budgetary resources. That is a 4 percent
reduction from last year's enacted level. For programs funded
through the highway trust fund, your request remains largely
consistent with FAST Act authorized levels.
However, on the discretionary side of the ledger, you seek
a $5 billion reduction, or that would be a cut of almost 20
percent. I am pleased to see you have requested funding for
BUILD and other grant programs. That is a positive change from
past requests, but the brunt of these funding reductions still
would fall upon programs that advance public transit, rail,
other intermodal projects that are critical to our Nation's
transportation future.
For example, you propose to cut Amtrak and force States to
pick up the cost of the national network service. You zero out
the Federal-State partnership rail grants, and your $1 billion
in proposed reductions for transit grants would almost
certainly result in construction delays for eligible projects.
I am also concerned that you propose cutting safety
programs, including a $9 million reduction to FAA aviation
safety office, and a $35 million reduction to the national
highway's safety administration's operations and research
activities account.
Overall, this budget is a far cry for what is necessary to
move our country forward, and it doesn't reflect the rhetoric
we hear from the Department about taking a safety-first
approach. Of course, budget hearings aren't just about the
numbers. They are also about oversight. We need to learn more
about how the Department is executing grants, and making use of
the funding that this subcommittee provided on a bipartisan
basis for the last 2 fiscal years.
We also need to hear directly from you, Madam Secretary,
about recent incidents, involving the Boeing Max 8 and the
FAA's certification and inspection processes. This subcommittee
is closely following the ongoing investigation, and we are
prepared to work with you to address and identify shortcomings.
We need full transparency.
At the same time, I believe the Boeing incident touches on
larger questions about whether DOT is fully prepared to oversee
and regulate increasingly complex technologies in this age of
automation. Whether it is autonomous vehicles, ships, aviation
systems, it is clear DOT has to undertake a massive effort to
recruit and retain staff who are qualified and knowledgeable
about automation and human behavior.
These technologies hold enormous potential to increase
efficiency and improve safety, but as we have seen recently, a
single accident can cause terrible loss of life, and result in
a crisis of confidence.
If the Department lacks the expertise to safely regulate
these emerging technologies, the results will be catastrophic,
not only for consumers and passengers, but also for the
businesses and the industries that drive innovation.
Finally, I would like to hear more about how DOT is working
with States, localities, and other grantees to improve
resiliency. Every year, DOT awards tens of billions of dollars
in competitive and formula grants, whether it is increasingly
severe flooding, or hurricanes, or wildfires. We need to take
an all-hazards approach and to ensure that our Federal dollars
support projects that can withstand future threats.
So Secretary Chao, we look forward to your testimony today,
and working with you to ensure that DOT has the resources it
needs to carry out its mission. And now I would like to
recognize our distinguished ranking member, Mr. Diaz-Balart of
Florida, for his opening statement.
Mr. Diaz-Balart. Mr. Chairman, thank you very much for
holding this hearing today. By the way, I also want to thank
you for holding what I believe are a great series of meetings
and hearings throughout this budget season. Thank you, and I
also thank the staff. They do so much incredible work. I think
our stakeholder meetings and hearings this year were, frankly,
a great complement to the regular budget hearing process, and I
know that the testimony that we have all heard in the past few
weeks will help us work together to draft a good bill for
fiscal year 2020. Madam Secretary, welcome back.
Secretary Chao. Thank you.
Mr. Diaz-Balart. It is a privilege and honor to have you
here once again.
I would like to begin, Madam Secretary, by thanking you and
your staff for your attention to the issues that are of
concerns to the members of this subcommittee. And what I found,
whether it is a big issue, a small issue, you and your staff
have always been exceedingly responsive and available and open
to us. And so for that, again, I want to thank you.
It is no small task to run a department with an annual--
with a responsibility for about $80 billion in mandatory and
discretionary resources, and over 58,000 employees. And again,
the country is lucky to have your service. So, again, thank you
for that.
Secretary Chao. Thank you.
Mr. Diaz-Balart. We are keenly interested, Madam Secretary,
in your plans to continue implementing the recent major
investments in our Nation's infrastructure. In the past 2
years, thanks to the budget caps deal, also thanks to, I think,
a very generous allocation from then the chairman,
Frelinghuysen, Chairman Frelinghuysen, we provided an
additional $20 billion to improve our Nation's infrastructure.
The vast majority of this funding went to DOT. And so I look
forward to discussing the progress you have made in getting
these funds out to local communities.
These are significant bright spots for the last couple of
years, but, also, I think they are significant bright spots in
the budget request in front of us. We are never going to agree
on all of it, obviously. That is part of the process.
The request for FAA makes some, I think, key investments in
our air traffic control system, including an historically high
level request for facilities and equipment, and this is how we
move NextGen programs forward. And I know that the traveling
public will benefit from these very important investments in
that program--those programs, I should say.
Over the past 4 years, the chairman and I worked to ensure
that the FAA has the resources that it needs to operate a safe
and efficient air traffic control system. And these efforts
have been, as the chairman said, bipartisan, and it is really
been a partnership, and I am grateful for that partnership.
That commitment by this subcommittee, along with a 5-year
authorization past September, will put FAA on a path to further
modernize the system and address the challenges and
opportunities of unmanned aircraft systems, commercial space
launches, and other innovations in the sky. And again, every
day we seem to see a new innovation which is very, very
exciting.
I am also pleased, Madam Secretary, to see a request for $1
billion for BUILD, and $1 billion in discretionary funding for
INFRA grants, bringing that program to $2 billion when you also
combine it with the FAST Act levels for INFRA. Those programs
are key to relieving congestion, generating economic growth,
and, frankly, just improving the quality of life of people back
home of our communities.
This would be an understatement, right, Mr. Chairman, as
members of both sides of the aisle have spoken to me and others
about the importance of these programs to their communities. I
also hear from community leaders in Florida how important these
programs are to help in reducing congestion and to generate
economic growth.
Madam Secretary, I also want to thank you for your
willingness to travel and to go to see firsthand not only some
of those needs, but also some of the great things that are
happening around the country. It is particularly exciting to
see how communities come together to develop innovative ideas
as they plan to apply for these grants.
I am also similarly pleased with the administration's
request, budget request and transit programs, with, again, a
request for new starts in 2020. While we obviously think that
those numbers may or may not be adequate, and that is why we do
this process, right, your request to fund new starts in 2020 is
greatly appreciated.
I know that you and your staff are hard at work
implementing the transit program according to both the FAST Act
requirements, and direction provided in the fiscal year 2018
and 2019 THUD bills.
And finally, as the chairman mentioned, we are keeping a
close eye on the grounding of the Boeing 737 Max. We know that
you have been working countless hours on this issue and
appreciate any updates if you have any that you can provide for
us today.
Again, I want to thank the chairman, and I want to thank
you, Madam Secretary, for your appearance before us today, for
your willingness to work with us, for always being accessible,
and for your service to the country.
With that, I yield back, Mr. Chairman.
Mr. Price. Thank you. Let me now recognize for any opening
statement she may have, our full committee chair, Mrs. Lowey.
The Chairwoman. Thank you, Mr. Chairman, and welcome. I
really appreciate your appearing before us today.
In a speech less than 2 weeks ago, you outlined your
priorities for the Department of Transportation: first, safety;
second, rebuilding and refurbishing our country's
infrastructure; and third, preparing for the future. If a
budget reflects values, it seems the Trump administration does
not, unfortunately, share these priorities.
While the Department of Transportation's primary directive
is safety, your budget proposes FAA aviation safety cuts of $9
million, a 20 percent cut to the National Highway Safety
Administration vehicle safety programs such as those aimed at
increasing resiliency in crashes, and FRA railroad research and
development cuts of more than half. These dramatic decreases,
in my judgment, would seriously jeopardize safety.
Your budget requests also falls short on rebuilding and
refurbishing our country's infrastructure. By neglecting to
include even 1 cent for the Gateway project, the administration
is neglecting upgrades to its own assets as the aging and
crumbling Hudson Tunnel is owned by Amtrak.
Your claim that New York and New Jersey are aren't
committing enough funding for the project ignores Congressional
direction in the fiscal year 2019 spending bill that specified
that Federal loans, which do get repaid, count as local share
of funding.
Instead of paying attention to the urgent reality that an
unplanned closure of the Hudson Tunnel would be disastrous for
our economy, and disrupt the lives of hundreds of thousands of
daily commuters, your administration has made a political
decision that endangers the safety of travelers who pass
through that tunnel every day. When our current infrastructure
is in such desperate need of repair, preparing for the future
must mean ensuring continuity of service, and the sustained
safety of infrastructure right now.
Frankly, I am unimpressed by your budget request. Twice,
the administration has proposed cuts that would shortchange our
national infrastructure, and twice, Congress has responded by
passing responsible funding levels. Please, I hope you will do
better next time. I look forward to your testimony. Thank you
again for appearing before us.
Mr. Price. Madam Secretary, we recognize you and ask you if
you could limit your oral statement to 5 minutes. We will, of
course, put any materials you want in the record.
Secretary Chao. Thank you, Mr. Chairman.
Chairman Price, Ranking Member Diaz-Balart, full committee
Chairwoman Lowey, and members of the subcommittee, thank you
for the opportunity to meet today to discuss the President's
fiscal year 2020 budget request for the Department of
Transportation. Before I begin, let me emphasize that safety
is, indeed, always number one at the Department of
Transportation. And as I have said before, a good day is when
nothing bad happens.
On March 10, recently, 2019, there was a tragic crash in
Ethiopia, involving a U.S. manufactured aircraft. Our hearts go
out to the families and loved ones of all those who perished.
We all have a lot of important questions about this accident.
The Ethiopian Government is in charge of the accident
investigations, and the National Transportation Safety Board is
the U.S. representative in the investigations.
I have taken two key steps, actions, to help determine what
happened and what can be improved at the FAA. First, I have
asked the Department's inspector general to initiate an audit
on the activities that resulted in the March 8, 2017
certification of the Boeing 737 Max 8 involved in the accident.
Second, I have announced the formation of a special
advisory committee to provide independent, impartial advice on
ways to improve the FAA's safety oversight and certification
process.
At this point, the FAA is it awaiting Boeing's final
package of its software enhancement for the 737 Max. And once
FAA receives Boeing's proposal, it will be thoroughly reviewed
to ensure the solution has addressed all pertinent issues. Let
me emphasize that the FAA will not approve Boeing's proposed
changes until the FAA is satisfied that it is safe.
The Department's goal is to ensure public trust in aviation
safety and preserve the preeminence of the United States as the
gold standard in aviation safety. I look forward to working
with you and all stakeholders to help address the key questions
surrounding this tragedy.
Now, let me turn to the President's budget proposal for
fiscal year 2020, which continues to emphasize the importance
of addressing our Nation's infrastructure needs, using smart,
effective, and modern methods that provide results and maximize
our resources. The President's budget requests a total of $84
billion to support transportation programs in fiscal year 2020.
About 75 percent of this request fully funds surface
transportation for the fifth and final year of the FAST Act,
and FAA's authorized funding levels for AIP funding. These
programs support infrastructure improvements that are critical
to maintaining dependable transportation systems that support
our growing economy. The remaining $21.4 billion of the request
funds several high priority investments and reforms that will
strengthen our programs and make them more effective. In fact,
the Department's programs track closely to fiscal year 2019
enacted appropriations with a handful of exceptions.
For FAA, I am pleased to note that the President's budget
includes $1.4 billion for NextGen projects and activities. This
is the largest request in FAA's history. The budget includes
$203 million for unmanned aircraft initiatives; $1.6 million
for a new Office of Innovation; $65 million for commercial
space, safety, and operations. And while FAA's operations
account is less than the fiscal year 2017 enacted amount, it is
still approximately $113 million above fiscal year 2018 levels.
When evaluating the FAA funding levels, it is important to
take into account the timing of the President's budget, which
was developed before the omnibus bill was signed into law. The
President's budget continues to fund the Federal Highway
Administration at FAST Act levels. The President's budget also
redirects $2 billion in additional resources for the BUILD and
INFRA grant programs. It also uses $300 million of the
remaining funds for a new competitive bridge program.
For transit, the fiscal year 2020 funding level for CIG, as
has been mentioned, is $1.5 billion. This request fully funds
all existing projects for the first time, and reserves $500
million for new projects as they are ready to advance.
The budget funds Amtrak at $1.5 billion in total. Funding
for the Northeast Corridor is $325 million, which fully funds
Amtrak's needs based on traditional spending patterns. It also
increases funding available for rail infrastructure and safety
grants, and the project also proposes a new idea that would
provide $550 million in rail infrastructure grants to support
States in taking over responsibility for long haul services
over a five-year period.
Let me also mention that the MARAD budget request provides
$300 million to fully fund the Maritime Security Program for 60
ships, and an additional $205 million for a third new school
ship. This allows the Department to continue replacing the
aging training ships currently available at the State maritime
academies.
I look forward to working with all of you on these and
other transportation issues over the coming year.
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Mr. Price. Thank you, Madam Secretary. Well, let me launch
the questions with a focus, as we all might expect, on the
Boeing Max crashes. They resulted in 346 lives lost. We owe
these victims and their survivors, of course, not only our
condolences, but some answers as to what happened and why it
happened and how to prevent it from happening again.
In the time we have here this morning, I don't want to
focus on the details of the investigation, but I want to focus
on its broader implications for politics and policy as it is
unfolding, and based on what we know now. That is the focus I
know that you have as Secretary, so I want to focus on the
perspective you have in terms of your role, your
responsibility.
Let me start with the consecutive decisions, March 11 and
12, that the FAA issued, first, asserting there was no basis
for grounding the Max, and then later that the planes would be
grounded, would be taken from the air. These consecutive
decisions, I am afraid, calm public fears, they really raised a
lot of questions about the basis on which these decisions are
made, and what the third decision now is going to look like
when it comes, that is, to put these planes back in the air.
So I am asking you from your position as Secretary, how did
these decisions look to you in terms of process? Are there
lessons learned? With the benefit of hindsight, could or should
the FAA, perhaps, have taken a different approach? What can we
conclude in terms of the basic confidence we have in these
decisions, but beyond that, the process that they reflect? They
reflect the way we are organized to evaluate such tragedies and
to make very quick decisions. What are your reflections, and
what are the implications going forward?
Secretary Chao. Thank you for the questions. These are
important questions, and you are right in saying that the
relatives and families of those who perished, and also the
general flying public, deserve answers.
The FAA is a very fact-based organization, and when this
crash occurred the morning of March 10, 2019, the FAA saw no
basis upon which to ground these planes. They did issue what is
called a continued air worthiness notification to the
international community, basically putting everyone on notice
that they need to be reviewing the aircrafts; and then
subsequently, countries began to ground these planes.
But the FAA, again, is independent. It is a very technical
organization, it is data-driven, and they saw no data until the
morning of Wednesday, March 13. At which time they received, at
almost the same time as the Canadian Government, new
information from satellite tracking for the first 3 minutes of
the crash of Ethiopian Air 302, which seemed to parallel
similar patterns to in Indonesian Air, Lion Air 610. That was
the first piece of evidence that the FAA received that caused
them to review their previous decision.
Number 2: There was evidence on site, at the crash site,
which bore debris, that had similarities to what was found at
the crash site of Lion Air. Those two new pieces of evidence,
presented to a fact-based organization like the FAA, prompted
them to take immediate action, because it was based on facts,
not speculation, that they needed to ground the planes.
The more basic issue is, if we cannot specify why these
planes were grounded, what were the reasons for grounding these
737 Max 800s? What would be the reason for ungrounding them?
And so, again, the FAA was careful and fact-based in drawing
upon their decisions to take a very serious step.
Mr. Price. Thank you. Of course, the first decision does
raise larger issues about the consideration that might have
been given, or should have been given to the fact that there
had already been one crash, and that the manufacturer already
had corrective efforts underway to address the supposed causes
of that crash. And it also raises questions which I will return
to in the second round.
My time has expired, but it also raises questions about the
basic certification process and the confidence we have it in
the first place, and how it was that the 737 has gone through
eight iterations, eight iterations, a very different plane than
where it started, and in all those years, has never had a basic
certification examination; it has always been subject to this
more incremental, more limited kind of review. And so there,
too, I want to ask for your reflections. But I will wait until
the next round, and I will turn to my ranking member, Mr. Diaz-
Balart.
Mr. Diaz-Balart. Mr. Chairman, thank you very much.
Madam Secretary, one of the things I am very proud of in
the 2019 bill is the funding that we put in for the Port
Infrastructure Development program. That is an authorized
program that had never been funded before, and the chairman and
I, again, prioritized that. It is, in essence, to help the
seaports. These ports handle $6 billion per day. Think about
that, $6 billion per day in imports and exports, and supports
about a quarter of the U.S. GDP.
And so Madam Secretary, I have seen, and I know that you
placed a great priority on implementing this program, and I
appreciate the dedication and attention of the staff, your
staff, at the MARAD, the Maritime Administration, in planning
for this new funding.
A few questions, Madam Secretary. Can you provide an update
on your plans to release a Notice of Funding availability for
this program? Any idea when you expect those notices might be
released? Number one. And what benefits would you expect to see
from projects that successfully compete for this kind of
funding?
Secretary Chao. Well, we understand the will of Congress.
And this is obviously a very important program to the ranking
member, and we, of course, pay attention to it. In fact, I just
had a meeting yesterday to check on the status of this. We will
get out the NOFOs as quickly as we can, and it is not our
intention to dwaddle, to delay, or be slow in any way. We have
a lot of these NOFOs coming out. But this is obviously a
priority, and we want to get it out and get it awarded.
Mr. Diaz-Balart. And again, you and your staff have been
exceedingly, exceedingly responsive, and I mentioned this in
the opening statement, but I think it bears stating again, and
I want to thank you for that.
Obviously, port infrastructure is also an important
component of any multi-modal freight program, and we have seen
some important investments in ports through the BUILD and INFRA
program as well. And can you speak to us, or assure us, that
port infrastructure will continue to be a key component of also
these discretionary grant programs as well?
Secretary Chao. Well, we want to fund meritorious programs.
Mr. Diaz-Balart. Yeah.
Secretary Chao. And when projects are worthy, are well put
together, and are supported by the community, we will, of
course, consider them.
Mr. Diaz-Balart. Madam Secretary, lastly, on this issue,
obviously while we expand capacity and technology, we want to
make sure that it helps create jobs. And so, I just--I want to
work with you to make sure that those upgrades, those
infrastructure upgrades in the ports, you know, that we also
consider the folks that are working in the ports, those
hardworking labor folks who are there, to make sure we do as
much as we can, again, to increase jobs, good-paying jobs, and
I look forward to working with you on that as well.
And, again, I want to thank you for being exceedingly
accessible and aggressive in making sure that these issues are
going to be implemented well, which is something, as you know,
is a big concern of mine.
Secretary Chao. Thank you.
Mr. Diaz-Balart. The chairman and I continue to monitor
efforts to recover from hurricanes, and severe flooding,
including Irma, Michael in Florida, Matthew, et cetera. I
understand that there are specific authorities in the highway
program to build resiliency into planning and decision making.
I don't have a lot of time in this round, but Madam Secretary,
if you could describe some of your efforts in working with the
States to incorporate resiliency into highway projects, and are
there additional tools that maybe would be helpful to States to
help them build resiliency into their projects when they are
coming forward?
Secretary Chao. Well, as you mentioned, MAP-21 does provide
Federal Highways with the authority to consider extreme events
so that communities can recover, so that they will have the
resiliency with which to face these challenges.
Based on these authorities, the Federal Highway
Administration is actually working with the States and
metropolitan areas to assess infrastructure vulnerabilities and
also incorporate resiliency as part of all phases of
transportation planning and decision making, so it is very much
a value that we agree with as well. And in fact, FHWA, Federal
Highways, has supported over 40 resiliency pilot projects
across the country, and Federal Highways has initiated 11 State
and metropolitan pilot projects focused on making
transportation more durable, more resilient.
Lastly, Federal Highways is coordinating with the States
and local agencies to integrate resiliency considerations into
existing decision-making processes. Because it can conserve
time and energy over the life of roads and bridges, it is a
very positive value. This will save lives. It will reduce
service interruptions, and we will continue to work very hard
on implementing these initiatives.
Mr. Diaz-Balart. And I want to thank you for that. It is
obviously something, particularly for the chairman and I, for
obvious reasons, we are in States that are going to be
affected. This is something we obviously care a lot about, and
I want to thank you for, again, your leadership there.
I yield back, Mr. Chairman.
Mr. Price. Thank you.
Mrs. Lowey.
The Chairwoman. Thank you, Mr. Chairman. Thank you again
for appearing before us, Madam Secretary. Last year, this
committee provided an additional $14 million for the NTSA
program, for a pilot program to address impaired driving, and
for a paid media campaign regarding highway rail grade crossing
safety. If you can tell me about the pilot funds and how is the
Department using these funds, I think this could be very
important.
And what is the Department doing to let States know about
the availability of funds to eliminate grade crossings? I
checked, and I see that the committee provided $2.7 billion
from the general fund that can be used by States to make safety
improvements at grade railroad crossings. And I have been told
that the States want to address these safety hazards, but don't
know what funds they can use.
So, again, can you tell me, what is the Department doing to
let the States know about the availability of funds to
eliminate grade crossings?
Secretary Chao. Grade crossing fatalities should be all of
our concerns, because 94 percent of all rail-related fatalities
occur at grade crossings. This is a huge emphasis and focus
area for the Department. We have done so many things to alert
the public as well as State and local authorities as to what
resources are available. Summits have been held; forums have
been held with basically the public; we continue to fund the--
oh, gosh. I was just at the meeting, Operation Lifesavers. We
still continue to fund them, and we have a million for, as you
all know, the highway rail grade crossing; and we also have, by
Federal Highways, about $245 million that is also dedicated to
improving safety as well.
NHTSA and FRA have worked together to relaunch one of their
advertising spots, and it is called ``Stop. Trains Can't.'' So
grade crossing accidents, and also the second--the first part
of yours that you mentioned was impaired driving, but clearly,
grade crossings is very important. We continue to focus on
that, and, hopefully, will continue to improve.
Also in fiscal year 2019, the media budget for the campaign
is $5.3 million, and we will continue to run these
internationally. It always is disturbing when someone doesn't
know what resources are available. We try all the time to let
States and localities and the public know what resources are
available. We will have to double our efforts.
The Chairwoman. Thank you. And perhaps we can work together
on it, because if there is money available and the States don't
know it, and we look at the lives that have been lost, I think
there is more we can do.
Drunk driving is another issue that I have been really
working on. It is a very important issue for me over the years,
including the national .08 BAC standard which saves several
hundred lives each year. But even with the progress we have
made, drunk driving is still the leading cause of highway
deaths, with nearly 11,000 fatalities a year. In fact, motor
vehicles is still high, as a result of the population, than
they were in 2009. To see that these fatalities are still going
up in number is just amazing to me. Do we have basic research
on impaired driving? What is the Department doing to focus on
drunk driving, in 33 seconds?
Secretary Chao. I know that you are very concerned about
this, and the DADSS program works to address this issue. So the
issue becomes how do we save these lives? How do we prevent
these tragedies? I think your staff and my staff, we have
talked a lot about continuing to work along that route, and
there are obviously breathalyzer devices, and instruments that
will, upon touch, fail to turn on the ignition. These are all
elements that we are working on.
The Chairwoman. Thank you. I look forward to following up
with you. I appreciate it.
Mr. Price. Thank you.
Mr. Womack.
Mr. Womack. Thank you, Mr. Chairman, and thank you, Madam
Secretary, for your testimony this morning.
I am going to throw kind of a softball out there for you.
And I know you will be preaching somewhat to the choir here
when you answer this question, but yesterday it became apparent
that my friends on the other side of the aisle were not going
to be producing any kind of a budget resolution. Indeed, had a
caps proposal that was pulled from the floor, and deemed into
the rule yesterday. And it signals to me the very prospect that
in just a few months, when we are winding down this fiscal
year, and, indeed, beginning to plan as we are now for funding
on October 1, that we could have another cliff that we are
staring right down the nose at, and I want to know--well-
chronicled are the impacts of delayed funding, CRs, threats of
shutdowns, and those kind of things on the national security of
this country, but I want to know from your perch at
Transportation, what does a financial cliff like we could be on
here do to the Department of Transportation and the agencies
under your purview?
Secretary Chao. Well, it would obviously create problems.
So many of the Department's activities were able to proceed,
especially in the safety arena, without interruption during the
last government shutdown, because we had separately and
independently funded resources that were able to keep the
Department going. So if we did not have that, that obviously
would have an impact.
Mr. Womack. So your message back to this committee is for
us to be getting our work finished and getting a product out
signed by the President well in advance of October 1, so that
you can adequately plan and carry out the mission that you have
been challenged to carry out?
Secretary Chao. It is never my job to tell the committee
what to do, but clearly, that would be ideal.
Mr. Womack. We give you that opportunity here today.
The President's budget moves away from the discretionary
highway infrastructure program, and instead, puts more of the
emphasis on the INFRA and BUILD grants that you talked about in
your testimony this morning. Can you help me understand how
that will impact States like mine where there is a lot of rural
territory? How does it affect rural areas?
Secretary Chao. Well, for the preceding 8 years before this
administration came into place, a large amount of resources
were going into the urban areas. So I don't think rural America
is looking for a handout. They are looking for just their fair
share. They are looking for equity. They are looking for
justice. And so in this administration, we are trying to look
at the needs of rural America and trying not to forget them in
our analysis as to what the infrastructure needs are. In fact,
rural America has a disproportionately high rate of accidents
on their roads, and so, we do need to address that issue.
Mr. Womack. Well, that will be welcome news to places that
I represent.
I have got a quick question about infrastructure. Can you
describe how your Department's 2020 budget aligns with the
administration and Congress' goal to get an infrastructure
package across the finish line?
Secretary Chao. Well, the administration submitted a
proposal last February 12, 2018, hoping for bipartisan effort
on an infrastructure initiative going forward. We strongly
believe that infrastructure is one area where we really should
have consensus, and this proposal of addressing our Nation's
infrastructure should really be bipartisan.
Obviously, there were not enough votes, and the House has a
new majority. We look forward to working with the new chairman
on seeing what the committee's ideas are. The good news is,
everything's on the table, and we look forward to working on a
bipartisan basis with the new majority.
Mr. Womack. You began your remarks this morning by talking
about your mission always begins with safety, and I commend you
for that. Too often, we look at infrastructure programs as a
jobs program, and sometimes we look at infrastructure as we
should, from a budgetary standpoint that deferred maintenance
always costs more, and adds to the total bill, but clearly,
safety is one of the key reasons why we need an infrastructure
bill, correct?
Secretary Chao. Yes.
Mr. Womack. I yield back.
Mr. Price. Ms. Clark.
Ms. Clark. Thank you, Mr. Chairman, and thank you, Madam
Secretary, for being with us today.
I want to go back to a line of questions raised by both the
chairman and the ranking member and give you a chance to
expand, if you wanted to, on resiliency, and if you can expand
a little bit more on what the Department's doing to support
resiliency in transportation projects. I understand some 40-odd
projects in 11 States. It sounds like progress, but maybe not
where we need to be, and how can this committee help support
that work?
Secretary Chao. Well, we are very open to receiving
suggestions and ideas, and so, if you have specific concerns,
or ideas, we welcome them. Pilot projects are basically test
projects, so they are done on a small scale by definition, and
we see how they go, what the results are, and then we kind of
fine-tune based on that. You know all of this.
Ms. Clark. Yeah.
Secretary Chao. So we look forward to working with you if
there are some special concerns that you think we are not
covering.
Ms. Clark. Do you see sort of unmet needs the States are
asking for in any particular area around resiliency and
building that into projects?
Secretary Chao. I am sure that there are many questions,
and there are issues that may not be captured fully by these
pilot projects. I think FHWA has always been very open to
working with the States when setting up these pilot projects
that hopefully are comprehensive enough that the results can be
shared with others, so it is a best practice kind of thing.
Ms. Clark. Speaking of resiliency, we know that climate
change is one of the major drivers of our concern about this,
and the transportation sector is one of the biggest emitters of
greenhouse gas. What is U.S. Department of Transportation doing
to lower emissions from transportation sources?
Secretary Chao. Well, I think there are a number of ways.
We incorporate--I mean, it is incorporated in a lot of the
funding requests, and clearly, we have--it might be a
difference of opinion as to how to do it, but we have
initiatives that are ongoing throughout the Department on that.
Ms. Clark. Okay. Returning to a topic we have discussed in
your last appearances before here, which is sexual assault at
the U.S. Merchant Marine Academy. There was a report that we,
Congress, directed the Maritime Administrator to submit by
April 1, with recommendations on the status of the
implementations for the IG's recommendations. Can you give us
an update on both the status of that report, and the status of
implementation of the IG's recommendations?
Secretary Chao. Well, as I have said many times, the
Department has zero tolerance for sexual harassment or assault
of any kind. And the Maritime Administration has been
instructed to have a very careful and close focus and attention
on this area. I have been up there. Numerous other DOT
officials have been up there in addition to the frequent visits
by the administrator. There is now a new team at the Merchant
Marine Academy.
Ms. Clark. Do you think they understand the urgency around
the situation?
Secretary Chao. I certainly hope so. I don't think it has
been lack of effort on our part. I think there is a real sense
of urgency.
And so, you mentioned the IG investigation. I think we are
on target.
Ms. Clark. And what about the status of that report? Have
you----
Secretary Chao. I think we are going to be on target in
terms of complying--because the Academy, Kings Point, concurs
with all the recommendations. They are now in the process of
complying with them.
Ms. Clark. Okay. And specifically, the report that was----
Secretary Chao. We are a little bit late.
Ms. Clark. You think we will see it----
Secretary Chao. Oh, yeah.
Ms. Clark [continuing]. Within the month of April?
Secretary Chao. Yes.
Ms. Clark. Okay. Great. Thank you very much.
I yield back.
Mr. Price. Mr. Rutherford.
Mr. Rutherford. Thank you, Mr. Chairman.
Madam Secretary, it is great to see you again, and on
behalf of Jacksonville and the JTA, I want to thank you for
coming down and announcing the recent BUILD grant. And I am
glad to see that there is continued robust funding for BUILD in
the budget.
You know, Jacksonville is now going to be far ahead in
their autonomous vehicle operations in this project, and I
think it really showcases how a city can rethink their
mobility. And one of the concerns that I have is as we move
this new technology forward, it is going to be even more
important that we maintain a close relationship with DOT so
that we get that guidance on these emerging and innovative
technologies. And I know there is $19.2 million in this budget
just for autonomous vehicle emerging technologies. Can you talk
about that a little bit?
Secretary Chao. We actually have a lot of funding. It is
not even a matter of funding. It is a matter of leadership. And
the Department has to take the leadership in this area where
there is such rapid change in new and emerging technologies.
And I have always said that the Department needs to address
legitimate public concerns about safety, security, and privacy
of these new and emerging technologies without hampering
innovation.
Mr. Rutherford. Right.
Secretary Chao. We are also particularly concerned about
the State-by-State patchwork of regulations. That is why we
have come out with two documents. One is a Vision for Safety
2.0, which came out in September 2017. It was very quickly
thereafter revised and updated with Automated Driving Systems
3.0.
Mr. Rutherford. In Florida, and in Jacksonville
particularly, we share that concern with you. That is why I
wanted to bring that up.
In northeast Florida, we are on the JAXPORT, which
continues to grow and has a deep dredge project going on right
now, as you know, for the larger Panamax ships when they start
coming. But my district is also home to a much smaller port,
the Port of Fernandina. As you know, the Marine Highway Program
gives smaller ports like the Port of Fernandina opportunity to
get cargo off of our congested highways, and get it onto our
marine highways. I was a little concerned to see that this
program wasn't funded in this budget and that it had been
zeroed out. Can you talk about that, how that happened, or why
that happened?
Secretary Chao. I don't think so. I might be wrong, but I
don't think so. In fact, it is our expectation that we are
going to be announcing a new Notice of Funding opportunity,
which should be coming out later this year. So that could be
previous year's monies, but just the other day, we announced
$6.79 million worth of grants to three awardees.
Mr. Rutherford. This is the American Marine Highway
program? Well, good. I will have my staff follow up with you,
if you don't mind.
Secretary Chao. Of course.
Mr. Rutherford. We have an application in right now. Well,
I don't think we have the application in yet, but it is on its
way. So thank you. I am very glad, very glad to hear that.
Secretary Chao. Thank you for providing that for us.
Mr. Rutherford. We had heard otherwise.
Now, also, with JAXPORT, as you know, we are one of the
main ports for transporting cargo between the United States and
Puerto Rico. And the Jones Act plays a major role in keeping
those shipments consistent, reliable, and economical, not to
mention the relationship that it builds between Puerto Rico and
my city in Jacksonville. But do you have any sense that the
Jones Act is in jeopardy? You know, two of our main Jones Act
movers, Crowley and TOTE, they are truly on the cutting edge of
maritime shipping, with the newest LNG vessels having come out.
Can you talk a little bit about whether the Jones Act is in
danger?
Secretary Chao. You know, periodically, the Jones Act is
always blamed and criticized, and there are attempts to get rid
of it. And I have been in this government service now for such
a long time. It comes up. And this has come up, for example, in
Puerto Rico.
Mr. Rutherford. Uh-huh.
Secretary Chao. But the problem with distribution of cargos
is not the problem, due to the Jones Act, the vessels or the
high cost. Rather, it was due to the lack of warehouses and the
devastation of the roads, so that once the cargos were unloaded
in Puerto Rico, they could not be distributed.
Mr. Rutherford. Exactly. And that is why I wanted to bring
this up, because I think a lot of people misunderstand. Listen,
TOTE and Crowley had tens of thousands of units, container
units, in San Juan as soon as that port was open. They are the
first responder for Puerto Rico. And even with the waiver that
was given some 8 days, I think it was, later, there was only
one vessel, one foreign vessel that ever left an American port
that sailed into San Juan. So the Jones Act had absolutely no
impact----
Secretary Chao. Right.
Mr. Rutherford [continuing]. On the recovery going on in
Puerto Rico. I just want to point that out, and I am sorry. I
am over my time. I yield back. Thank you.
Mr. Price. Thank you. Mrs. Watson Coleman.
Mrs. Watson Coleman. Thank you, Mr. Chairman, and good day
to you, Madam Secretary. It is good to have you.
Secretary Chao. Thank you.
Mrs. Watson Coleman. I hail from New Jersey, so you can
kind of figure what I am going to ask.
As you know, the rail connections between New York and New
Jersey rely on infrastructure that is about a century old, and
in desperate need of repair or replacement. Yet, the
administration has repeatedly taken steps to prevent the
Gateway project from moving forward.
First, the program sponsors for the Hudson Tunnel project
submitted the environmental impact statement to the Department
over 14 months ago. The average length of time for a final
decision is roughly 5 months, yet the Department has still not
approved the environmental impact statement, and it prevents
work on the Hudson Tunnel project from moving forward.
So my first question to you: What is causing this delay
now, and when will the Department issue its decision?
Secretary Chao. Well, a project has to be ready to be able
to receive funding.
Mrs. Watson Coleman. I am asking about the impact
statement. The environmental impact statement.
Secretary Chao. The impact statement has not--I hate to
tell you. These impact statements take a very long time, which
is why we have been trying to speed them up. But the impact
statement is not ready. But even if it were, this project is
not ready.
Mrs. Watson Coleman. Madam Secretary.
Secretary Chao. Yes.
Mrs. Watson Coleman. The information I have--and tell me
that I am incorrect--is that it takes roughly 5 months to get
an environmental impact study----
Secretary Chao. No, that is not correct. Not at all.
Mrs. Watson Coleman. What is the average?
Secretary Chao. Oh, my gosh. You would be shocked to learn
how much--how long it would take. It takes quite a long time.
Mrs. Watson Coleman. Such as?
Secretary Chao. Well, I just recently, last year, in
August, went to Alaska and gave the final permitting process
approval on behalf of the Interior Department to the Sterling
Highway. That took 37 years. That is part of what our problem
is. We are trying to speed up the process.
Mrs. Watson Coleman. Yeah, but the impact statement doesn't
have to take that long?
Secretary Chao. No. It is not 5 months. Our goal is to have
that.
Mrs. Watson Coleman. May I specifically ask you----
Secretary Chao. Yes.
Mrs. Watson Coleman [continuing]. To tell me, if it is
through the chairman, would be just fine. I would like to
understand where we are in the process----
Secretary Chao. Of course.
Mrs. Watson Coleman [continuing]. And what you think we
should reasonably expect in terms of a timeframe when we will
have the impact statement.
Secretary Chao. Well, we have--the Federal Transit
Administration----
Mrs. Watson Coleman. Yeah.
Secretary Chao [continuing]. Has been in deep discussions
with New York and New Jersey and all the stakeholders many
times. I think they know what the real situation is.
Mrs. Watson Coleman. I would like to hear it from you.
Secretary Chao. Okay. Of course. Sure.
Mrs. Watson Coleman. Thank you so much.
Over the past couple of THUD bills, Congress has provided
over $1 billion in funding for Amtrak's Northeast Corridor
account, intending to allow Amtrak to fund upgrades, included
those related to this Gateway project. Yet, it is my
understanding the FRA has included language in its work plan
with Amtrak, blocking Amtrak from using funds for major gateway
projects. Is that correct?
Secretary Chao. No, it is not correct. I am not aware of
any such discussions.
Mrs. Watson Coleman. All right. I need to follow up on that
question, but I need to follow up on the information that I
have, and then I will send to you, through the chairman, my
understanding.
When you became the Secretary in 2017, FTA rated the Portal
Bridge replacement project as medium high. Then the Department
lowered the rating to medium low, claiming that the State had
not agreed to put up enough of its own money. Our Governor,
Governor Murphy, then authorized $600 million in economic
development bonds addressing this problem, yet somehow, the FTA
still rates the project medium low. Why is this?
Secretary Chao. Well, that rating is done by career
officials. I don't get involved in that, and the FTA has rated
the Hudson Tunnel as medium low, so it is not eligible to----
Mrs. Watson Coleman. It said it had to do with the--whether
or not there was sufficient funds from our side for this
project, so then the Governor issues the $600 million which,
therefore, I think addresses that issue. To whom should I be
asking why is it still rated medium low?
Secretary Chao. When did the $600 million occur?
Mrs. Watson Coleman. Within the last 6 months. Enough time
for it to be communicated to whomever.
Secretary Chao. Because we have been in discussion with the
Governor as well, but I will be more than glad to take another
look.
Mrs. Watson Coleman. Would you? Thank you very much.
My last question is the Congress appropriated $250 million
for Federal-State partnerships for State of Good Repair for
fiscal year 2018 in March of last year, but the FRA did not
issue a Notice of Funding Opportunity until November and did
not close these applications until last month, a year after
Congress initially passed the funding.
When would we expect FRA to make a decision on these
applications? And will FRA move more quickly to disburse the
$400 million in State of Good Repair money appropriated in
February of 2019, Madam Secretary, and is this an issue of not
enough personnel resources?
Thank you, Mr. Chairman.
Secretary Chao. You know, a lot of these grants used to be
earmarked, so they were disbursed very quickly. Now, there are
these competitive programs, so we have had to stand up a whole
new infrastructure, which is now in the policy shop. It is not
actually in Highways or Transit. A lot of the grants processing
now is in Policy. So we now have a different process, and it
takes a long time. It was much easier the old way.
Mrs. Watson Coleman. Thank you. Thank you, Mr. Chairman,
and Madam Secretary, thank you for your efficiencies. I just
would like to see that the outcomes become more time-sensitive
and more time ready.
Secretary Chao. That is our goal as well. Thank you.
Mr. Price. Thank you.
Mr. Hurd.
Mr. Hurd. Thank you, Mr. Chairman.
And Madam Secretary, you said in previous remarks about how
rural America kind of has a disproportionate number of
fatalities on the road. That is true in the Permian Basin. Two
percent of the population of Texas, but 10 percent of all the
traffic fatalities, that means every 36 hours, there is a
fatality on the road in the Permian Basin.
And the residents of the Permian Basin thank you for your
help with the BUILD grant, $25 million from the Department of
Transportation, $25 million from the great State of Texas to
address this. And you know, my question on the BUILD grant,
INFRA grant, these are competitive grants. How do we make sure
that resources aren't spread too thin? How do we make sure that
communities like the Permian Basin are able to continue to be
competitive?
Secretary Chao. That is an excellent question. We basically
have about $1.5 billion for the BUILD grants and about $10.5
billion to $11 billion of requests. So basically, one in 10
projects actually get awarded, you know, the needed resources.
And so we do try to see whether we can have greater State and
local, and also private sector participation, because that does
help the dollars stretch further. And then we, of course, you
know, want to make sure that there is adequate attention being
given to rural America.
But for the Permian Basin, it is a top priority of ours.
This administration, you know, understands very, very well the
importance of energy independence, and we want to ensure that
America is energy sufficient.
Mr. Hurd. Well, you are welcome to the Permian Basin
anytime. Love to get you out----
Secretary Chao. I actually am interested.
Mr. Hurd [continuing]. To see some of those roads, and I
will take you to get some breakfast tacos as well.
You are known for improving and turning around a number of
organizations, and one of the things that I have spent my time
in Congress dealing with is a topic that is not sexy, IT
procurement, and part of that is making sure that we have
efficient digital infrastructure to protect the information
that we have, and make sure that we are providing good digital
facing services. And that is why I was proud of the Modernizing
Government Technology Act, which is making sure that we have--
CIOs have the tools they need in order to modernize their
technology.
And my question is, are you aware, or has the Department of
Transportation established one of these information technology
working capital funds as authorized by MGT? If so, why, why
not? Or do you think you need additional authorities to
establish that?
Secretary Chao. You know, this is such an important area,
field, but it is also very complicated. I know, Congressman,
that you are a real expert in this area, given your background
and experience, and I think for a lot of other people, you
know, it is a constant struggle.
We know that there are infractions. Cybersecurity is a huge
issue, and I don't--I mean, we work on it all the time. But
clearly, we could use your advice and use your, you know,
expertise and guidance as well, because it is all--we are
always trying to kind of keep up.
Mr. Hurd. I would welcome on the record, or for the record,
kind of the plans, the CIO's plans for an MGT fund.
Secretary Chao. That is not very good.
Mr. Hurd. I think that is the first step to do that.
And also, in the FITARA scorecard, this is--you know, I
would call it digital hygiene scorecard. DOT received an F when
it comes to CIO authority enhancements, and one of the first
steps to do is to make sure that the Federal CIO was reporting
directly to the Director or the Secretary or the Deputy
Secretary that would show, as in the private sector, that
cybersecurity and those issues are C-Suite issues.
And have you had the chance to coordinate with the CIO to
understand why some of the low grades on the FITARA scorecard?
Secretary Chao. It is a continual concern. In the
Appropriations Act of 2019, Congress provided a total of $320
million for this critical initiative. The IG recently released
their findings, and the CIO's office has agreed with all 12 of
the recommendations made. We hope to implement these
recommendations shortly.
Mr. Hurd. That is a good copy. And when you come in the
Permian Basin, while we are having breakfast tacos, I would
love to talk more about how the Department can be prepared in
the future for, you know, UAVs, autonomous vehicles, commercial
space flight. How do we make sure that various agencies are
prepared for that, because I don't think when these agencies
got started, we ever thought that that would be a reality, and
I am looking forward to those conversations. And Mr. Chairman,
I yield back.
Secretary Chao. May I just add--I just remembered one
thing. My able staff here. On the Permian Basin, the Department
expects to issue the NOFO later this spring, and we hope to
grant awards before the end of the year.
Mr. Hurd. Thank you.
Mr. Aguilar. Mr. Chairman, just a point of clarification.
Is the gentleman from Texas offering breakfast tacos to the
committee? That is a fair and relevant question.
Mr. Hurd. I will take that under advisement.
Mr. Diaz-Balart. Mr. Chairman, there is a bipartisan
concern on that issue.
Mr. Price. All right. Mrs. Torres.
Mrs. Torres. Mrs. Lawrence.
Mr. Price. The procedure has been to go in order in which
people were when we gaveled in.
Mrs. Torres. Thank you, Mr. Chairman, and thank you
Secretary Chao, for being here. We really appreciate your
expertise on these issues.
I represent the 35th Congressional District. We are the
heart of the freight system in the country. We have six freight
corridors that split my district in every direction. We are, in
essence, an inland port. Rail safety, as it relates to
pedestrian fatalities, is a growing problem. Of the top 10
identified most critical crossings, two of them are in my
district; four of them are in the region. So we have to--I want
to tell you that we have to do more to ensure that we are not
just doing PSAs and forgetting about this issue.
Secretary Chao. No, not at all. Not at all.
Mrs. Torres. We have to invest in this infrastructure.
Currently, we have no scientific data or impairment
standards. There is no reliable methodology to determine
impairment when it comes to drunk driving. We need to invest in
ensuring that, you know, we get some data in order for us to be
able to write policies on this issue. Why isn't there more
being done to devote actual resources to have some research
done on this issue?
The other thing that I am very concerned about is in 2015,
the FAST Act authorized small auto manufacturers to produce and
sell up to 325 replica cars, each in the U.S. and 5,000
worldwide. NHTSA has still not issued regulations. So it is now
2019. When can we expect those regulations? Or for you to begin
that process to ensure that these small manufacturers are able
to begin building? And I hope that we can do that this year.
When I first met you when you first came, you know, and
took this position, I talked to you about the highway of
things. I talked to you about leveraging Federal dollars with
private dollars. We should be digging once. We should be doing
one environmental impact report to ensure that we are
maximizing resources. I call this the highway of things. If we
are going to create more opportunities to build infrastructure,
we need to ensure that we are working with our private partners
to ensure that transmission lines for broadband, or electrical
lines, or maybe purple lines, water lines, are also part of the
infrastructure as we build more highways, highway lanes, or
anything that we are building.
I would like to hear from you as to what sort of programs
can we move forward to ensure that we provide that technical
assistance for public and private entities to come to the table
before they put a shovel in the ground, and not after?
Secretary Chao. We encourage that all the time.
Mrs. Torres. I did a bill on it. We need to fund it, but I
did a small bill, a small pilot program on this issue.
Secretary Chao. The Federal Highways Administration, they
try to be the convener, but a lot of this is State and local as
well, and it was part of our infrastructure proposal that we
also take a look at this. We will just have to continue to work
on it.
I don't want to--I am not switching topics, but let me go
back to the grade crossings. I was Deputy Secretary before, 27
years ago, so I know how important this issue is. It is not
just ad campaigns, but it is an awareness, and also, it is
actual physical infrastructure, which again, we have about $250
million in Federal Highways that is working on this. And we do
so much that is not known, and so that is part of our
challenge.
Mrs. Torres. Maybe it isn't working, what we are doing, so
we need to try something else.
Secretary Chao. We need--yes. Absolutely. We need to get
the news out. It was Congresswoman--I think--gosh. It was
Congresswoman Clark who asked about, you know, what are State
and local--or was that actually Chairman Lowey who said that,
you know, what happens if States don't know that their
resources are available.
But this is a constant challenge letting stakeholders and
the public know how much we can do if we partner together. So
this is another one.
Let me assure you that grade crossing was among my top
priorities when I came back to the Department 27 years later.
We have a wonderful FRA administrator, Ron Batory, and every
single Tuesday when we have a staff meeting, he reports on the
stats, and we report on every single one of these fatalities.
So we are very concerned about that. On the highway issue, we
want to work on that with you as well.
Mrs. Torres. I hope so. My time has expired. A great
concern for the region is that we are applying for these grants
and not receiving them, so I will follow up with you at some
point on that.
Thank you, Mr. Chairman.
Secretary Chao. Mr. Chairman, may I just add something? As
you can begin to see, there are so many grants, and so every
single one of the members' requests are reasonable. We are
under tremendous pressure, and that is our job. We are not
complaining, and every one of these requests are reasonable,
but there are 361 of them just in the FAA reauthorization
alone, and all of them have to come out within 30 days, 60
days, 90 days. We are really trying, but some of the deadlines
are a little bit unrealistic, and that is what we are trying to
deal with as well. Let me assure you, we are--pedal to the
metal. We are moving ahead.
Mr. Price. All right. Well, it is--every one of these
queries is important to the member and to the district----
Secretary Chao. Yes, of course.
Mr. Price [continuing]. Involved, and so we appreciate your
understanding that, and we will do our best, of course, to make
the deadlines realizable.
Mr. Aguilar.
Mr. Aguilar. Thank you, Mr. Chairman. Thank you, Madam
Secretary. Good to see you again.
My district in southern California is in a severe air
quality non-attainment area. San Bernadino County, the region
that I represent in Congress, has some of the worst air quality
in the country. The American Lung Association gave the county
an F for our ozone pollution. However, there are some good
signs. Our region is working strategically with the State of
California and with industry, and are poised to deliver the
first zero emission passenger rail service that will provide
more frequent service in an environmentally friendly way.
San Bernadino County, the MPO for our region, the
transportation authority, is analyzing hydrogen fuel cells as a
potential system. The FRA must approve the use of this
technology when operating on mixed freight and passenger lines.
What are your thoughts on the use of this technology to deliver
passenger rail service, and are there opportunities to pilot
this type of technology within DOT more broadly?
Secretary Chao. This is an issue that you care about, and
as I mentioned, we are very responsive. We try to be very
responsive to what members' concerns are. This is an issue that
we have discussed, and there is a NOFO coming out. There is a
grant program, and we hope to get the Notice of Funding
Opportunity out pretty quickly.
Mr. Aguilar. You know, this isn't about funding. This is
about, you know, administrative review. FRA would be
responsible when operating on a mixed line to approve the use
of this rail technology. And, so, that is the question. This is
actually funded. They have received Federal funding in the
past. This is complemented extensively with local funding.
San Bernadino County residents have taxed themselves, just
like many communities in California have, in order to deliver
transportation and transit improvements, and this is one of
those projects. So this has received also State greenhouse gas
emissions dollars.
So the question is, what is the thought process? What do
you feel FRA should look at when approving new technologies
that could deliver a low or no emissions technologies in
combination with our rail service?
Secretary Chao. Thank you for restating the question. You
have asked me two questions so far, and I haven't done very
well on either one of them. I am not up to date on that, so let
me go back and ask the FRA about that.
Mr. Aguilar. Sure. We are happy to work with you and your
team on it.
Secretary Chao. Thank you.
Mr. Aguilar. And I appreciate your willingness in my office
to talk about the non-attainment and air quality issues within
our region.
My district is right next to Mrs. Torres' region, and I
spoke with you before that the State of California has sought
and received Federal waiver to enact stricter air quality
standards than Federal regulations. However, pollution, as we
know, is caused by many things, including trains, planes, and
our port traffic, so State and localities don't have much
control over some of those sources.
The Alternative Fuels for General Aviation program is
funded within your Department, and it helps find cleaner fuel
for planes with less lead and less pollution. Your budget
proposes to cut the program, to completely zero it out.
Additionally, you proposed to cut the research, engineering,
and development account under FAA by 50 percent, reducing it
from $74 million to $31 million. Can you talk to me broadly
about the Department's strategy to working to improve and
continue to be a leader in testing research in fuels
alternative, particularly replacing unleaded aviation fuels and
more broadly, in the research and development space?
Secretary Chao. Let me get back to you on that. I would not
be the best person to talk about that----
Mr. Aguilar. Sure.
Secretary Chao [continuing]. And so if you wouldn't mind.
Mr. Aguilar. We understand budgets are about, you know,
priorities, but making sure that we retain our position as a
leader in this, I think, is important for the committee and has
been a priority in the past, and in a bipartisan way as well.
So I appreciate--we will continue the conversation and the
dialogue, and I appreciate your willingness to have those
discussions with me and my staff.
Secretary Chao. Thank you.
Mr. Aguilar. Thank you, Mr. Chairman.
Secretary Chao. Mr. Chairman, I found out the answer to a
previous question about the Gateway issue. The $600 million by
the New Jersey Governor, it is not yet committed. So I just
wanted to answer that, but Congresswoman Clark is not here
right now.
Mr. Price. All right. I am sure that will be communicated--
--
Secretary Chao. Thank you.
Mr. Price [continuing]. And we will make an appropriate
adjustment in the record.
Mrs. Lawrence.
Mrs. Lawrence. Thank you, Madam Secretary, for being here.
The State of Michigan is a leader in the development of
vehicle to everything communications, and the Department of
Transportation has been an important partner in helping to
develop this life-saving technology. Secretary, as you know,
the future of auto safety and surface transportation is about
connectivity, and an important piece of that is preserving the
entire 5.9 safety spectrum ban for vehicle to everything
services. Can you update the subcommittee on how the Department
of Transportation is working with FCC to assure that the
spectrum that supports these services are protected?
Secretary Chao. Well, this is a very, very contentious and
important issue. There are stakeholders with very fixed
positions. What I am concerned about, obviously, is preserving
the spectrum for vehicle-to-vehicle technologies, so it is our
intent to try to continue to make that point, and to hold our
ground.
Mrs. Lawrence. Okay. So the FCC, is that the opposition, or
is this just different voices?
Secretary Chao. No. It is all different stakeholders
groups, because we still represent basically the auto, you
know, the car--the public safety.
Mrs. Lawrence. Yes.
Secretary Chao. The cars.
Mrs. Lawrence. Right.
Secretary Chao. And so there are many, many other
stakeholders with different ideas about how to use that
spectrum. I mean, they range from aerospace, public utilities--
--
Mrs. Lawrence. Yes.
Secretary Chao [continuing]. And all these other groups.
Mrs. Lawrence. Well, I want you to know that is an area
that I will be continuously in contact with the Department, and
as we move in this discussion so critical to auto connectivity,
that that is something that I will be working real closely with
you on.
Secretary Chao. Right.
Mrs. Lawrence. The TIGER grants, which we now call a bill,
has proven to be a successful cost-saving, cost-effective
program. Cities in my district have told me how difficult it is
to prepare large projects, and often ask for help securing
money to assist in the initial stages of projects. But again,
Congress allows DOT to use up to $15 million for planning
grants in the fiscal year 2019 bill. Will you commit to
awarding planning grants this time around?
I was also disappointed by what appeared to be an
overemphasis on rural projects, the vast majority of grant
programs have a rule set aside, which I believe is important.
The administration took it to the extreme by awarding 311 of
the $500 million available in fiscal year 2017, and $1 billion
of the $1.5 billion available to rural projects. Your tilt, it
appears, towards rural projects, discounts the significant
needs of urban communities, like those in my district.
Can you please comment on the awarding of the grants and
your direction, and which allows more than $450 million of the
rural projects, and no more than $450 million for urban
projects? Can you talk to me about that?
Secretary Chao. It is not our intent to overlook anyone,
but obviously, there are not enough resources. And in the
previous eight years prior to our coming in, the emphasis was
very much on urban projects, so, in fact, rural America was
really overlooked. We are just trying to address some of those
projects which have been so delayed that have been waiting to
be funded, and so we are now making sure that they are not
overlooked.
Mrs. Lawrence. So we are at the point where we need to have
a balance, and so, I can understand the neglect, possibly,
years ago, but I am confronted with now seeing over a majority
of the funds going toward the rural areas, and I am looking for
a balance.
Secretary Chao. I am too. You know, we are looking for
meritorious projects, where they occur and where the need is
greatest. I think we can work together because obviously, when
things are not funded in the last eight years, there is a
greater need because they have not been funded or they have
been pushed back, so we have been trying to address those. But
we always are looking for meritorious projects that really
deserve to be funded.
Mrs. Lawrence. Well, if we continue to just address rural,
we are going to have an even greater problem.
Secretary Chao. Yeah. I don't think we will.
Mrs. Lawrence. Okay.
Secretary Chao. You know, I think the appropriators also
made it quite clear that they would like a balance.
Mr. Price. We, indeed, make it clear. In fact, this year's
bill, this subcommittee wrote in a 50/50 required balance----
Mrs. Lawrence. Yes.
Mr. Price [continuing]. Between rural and urban, and that
pretty clearly expressed our view on the subject.
Mrs. Lawrence. Yes.
Secretary Chao. I also----
Mrs. Lawrence. Thank you.
Secretary Chao. Thank you. I made a mistake. It was not
Congresswoman Clark. It was Congresswoman Coleman.
Mr. Price. Yes.
Secretary Chao. Thank you.
Mr. Price. All right. Thank you. Let's go another round
here, and let me pick up on the issues I was raising, that the
air tragedies raise, and as I signaled, I want to ask you about
the way we certify these crashes, particularly a craft like the
737 that is now the Max 8. And I am told that, actually, there
have been 12 different models over 52 years.
The original--well, the Max 8 is 25 feet longer, it is
37,000 pounds heavier, and it has double the range of the first
model. You might say it, at some point, should have been
treated as a new aircraft and subject to a more extensive
certification process. At least that is the question, I think,
this situation raises as we learn more about this aircraft and
the changes that were and weren't made at each iteration, and
the kind of reasoning that went into that, perhaps the
preference of the airlines, perhaps cost savings, perhaps a
desire to have a less extensive certification process.
Whatever they were, you have ended up with a very different
aircraft, and it seems to me that we might want to reflect on
this process. Shouldn't, at some point, the FAA have looked at
this aircraft's certification anew? If the FAA required
manufacturers to seek a type certificate instead of an amended
certificate, might the outcome of the process been any
different? Might this plane be more airworthy at this point?
Now, so that is the important question. I wonder what your
reflections are at this time. Both of these levels of
certification are subject to ODA, that is, the post 2009
delegation of certain examination responsibilities to industry.
That has also been much discussed in this context. Has any of
this prompted you to reflect on how ODA currently operates?
Secretary Chao. You have asked some really, really
important questions, and that is why these are important
questions which need to have answers, and that is why I have
asked for two investigations.
One is the audit by the IG on the certification of these
two aircraft. The 737800: the process began on January 27,
2012, and the certification occurred on March 8, 2017. And for
the Max 900, the certification process began in January of
2013, and ended on February 12. The previous FAA administrator
left on January 8, 2018.
I think the ODA process is one that is being discussed a
great deal, and it is very technical. It really should be a
process that the FAA should explain, which they are trying to,
with Members of Congress, and also international accreditation
bodies.
But let me make it very clear that the ODA is not a self-
certification process, and it is a process by which--that is
not it. I actually have a piece of paper. If you could just
give me one second because I anticipated this, and I was hoping
to answer--give a very full explanation on that.
Basically, it is not a certification process. It is not a
self-certification process. This form of delegation has been
part of the FAA since it was formed in 1958, and it allows the
FAA to focus on safety-critical issues. The FAA sets the
standards that all manufacturers must meet, and the ODAs, they
are called the Organization Designation Authority,
authorization. The ODAs are audited on an annual basis, and the
FAA is involved when new, novel, and high-risk design features
are contemplated.
But having said all of that, we always need to improve. The
FAA itself acknowledges that they need to improve, and we all
have to learn. And so, the special committee that I have set up
hopefully will address some of these issues, and certainly the
audit by the investigators, by the IG investigators, will also
address these questions as well.
Mr. Price. Well, I am glad you feel that way, because I
certainly feel that way from what we are learning in the
context of these two tragedies. No, it is not self-
certification, but it clearly----
Secretary Chao. Yeah.
Mr. Price [continuing]. Clearly is it a process that
requires a certain FAA capacity, certain trained personnel. It
requires vigorous oversight. It requires discerning judgment
about what is delegated and what isn't, what is done in-house,
and it requires, I would say, critical judgment about how
this--the way this is working right now, and the extent to
which aircraft are not being subject to the most thorough going
kind of examination, even when there are major new components
in the planes.
Underneath this, are there potentials for conflicts of
interest with respect to industry's role here? Are there
possibilities that employees will be subject to the pressures
in carrying out this role? Many, many questions which I would
suggest, at the administrator's level, and at the Secretary's
level, so----
Secretary Chao. Well, these questions have been discussed,
and we obviously don't have answers. I think we need to see
what is learned from the investigations--and I am not here to
defend anybody, you know. I am concerned about safety. That is
the number one concern that I have, and we want to get answers.
We want to understand fully what happened, and how do we
prevent it from happening again.
Mr. Price. Thank you.
Mr. Diaz-Balart.
Mr. Diaz-Balart. Thank you, Mr. Chairman.
Madam Secretary, I have two separate issues. Let me start--
and this is not a question, but first, thanking you for the
work that you have done and your staff on the Tamiami Trail
project in southern Florida. That is vital for the health of
the Everglades, and the Everglades is the lifeblood of Florida.
And so this is a huge project, a priority for the entire
Florida delegation, and DOT's partnership with the State of
Florida and the National Park Service has been, frankly, key,
key in the success of the first phase of this project which
will be completed in May, I am glad to say. And so obviously,
the State of Florida is committed to completing this project
and has applied for Federal land grants to begin work on the
second and final phase, and I would just ask you that you would
keep me informed of the status of this project as it moves
along.
Secretary Chao. Of course.
Mr. Diaz-Balart. Also, if there is anything that you need
from us, or from the State, you know, just keep me informed is
what I would ask. And again, you have been great at doing that
every step of the way.
Now, let me just throw something else at you. Switching to
a different--you know, you have so many different issues,
right, that you have to deal with, you know, and you get
questions from all sides on. Let me focus you on the
Competitive Highway Bridge program for a second.
Secretary Chao. Yes.
Mr. Diaz-Balart. I am pleased to see that you have expanded
the eligibility criteria in your request for $300 million for a
competitive bridge program. I am very pleased with that. All
States with rural bridges will have a shot at this program now,
which I think is hugely important, Madam Secretary, and I thank
you for that.
I represent a district that is urban and rural, and I have
seen the challenges of rural bridge infrastructure in my State,
and even in my district, the district that I represent. A State
of Good Repair in a rural, you know, rural bridges is critical
for the safety of our economy and obviously also everyday
agriculture products that are produced in the district I
represent rely on safe roads and bridges. So you have gotten a
lot of questions about what that balance is. I will tell you
that I am thrilled about how you have put this forward.
Secretary Chao. Thank you.
Mr. Diaz-Balart. I am exceedingly pleased with how you put
this proposal forward. And so what are your specific goals for
this platform, and how might, for example, a State like
Florida, the State Department of Transportation in Florida
begin to plan for this program if you have had an opportunity
to think about that yet?
Secretary Chao. Well, we have already begun work on this
because there was a Notice of Funding Opportunity in December
2018. The program received 56 grant applications, and with at
least one application from each of the 25 eligible States. The
pool of applicable grantees requested more than $730 million
from a pool of funds of only 225. Federal Highways is carefully
reviewing all these applications, and hopefully, the awarding
of these grants will occur in the first half of this year.
Mr. Diaz-Balart. Great. That is great news, and again, just
want to again commend you for, I think, a very well-thought out
proposal.
On that, Mr. Chairman, I just want to end, you know, that
when you hear time and time again about all these programs, you
always have a lot more needs, and frankly, a lot more
applications than you do funding.
Mr. Chairman, that is something that you are going to,
unfortunately, get to experience firsthand really soon from the
members of the subcommittee and members of the full committee
and Members of Congress. That is always the case, right? There
is always a lot more requests than funding.
But Madam Secretary, I want to thank you for your service.
I want to thank you for appearing here today, and more
importantly, well, not more importantly, equally as important,
your sensitivity, obviously, to the victims of these horrible
air crashes, to the issue of safety in general, and what I was
going to say also is for always being accessible. Your
leadership is greatly appreciated, and I want to thank you for
your service to the country.
I yield back, Mr. Chairman.
Secretary Chao. Thank you.
Mr. Price. Thank you.
Mr. Rutherford.
Mr. Rutherford. Thank you, Mr. Chairman.
Madam Secretary, this is probably out of left field, but I
want to talk a little bit about the Ready Reserve Force ships.
You know, just by its name, Reserves, you know, they don't
really get the focus, especially when economic times are tough,
and budgets are being squeezed.
You know, the last time we got new ships through MARAD for
the Ready Reserve Force was, like, 1980--well, it was in the
1980s, so they are, like, 40 years old. I am really concerned
about whether our Reserves, and they are there to ensure that
our military has a surge lift capacity. And whether it be for
domestic reasons like hurricanes, or it could be foreign for
military wars, but it is a capacity that when you need it, it
is absolutely critical.
And so--but I know how Reserves often don't get looked at
like they should, and MARAD just took a really huge cut in
their budget, and I want to make sure. Can you tell me, are you
satisfied that the Ready Reserve ships have the maintenance
capacity, because some of these ships----
Secretary Chao. I don't know that the MARAD budget has been
cut. MARAD had the best budget it has had in years because they
have a Secretary who finally understands maritime issues.
Mr. Rutherford. Okay.
Secretary Chao. But anyway, I understand your issues. The
RF is very important. When we first came in, the per ship
reimbursement was, like, 3.7. We got that up to 5 million, and
MARAD is basically a ship manager----
Mr. Rutherford. Right. Right.
Secretary Chao [continuing]. So this program is actually in
the Navy's program.
Mr. Rutherford. Yeah. The Navy reimburses you for managing,
right. But what I want to make sure is you are getting your
fair share to take care of that program.
Secretary Chao. They are very important. Obviously some
people would love to see the numbers grow, to have a larger
Ready Reserve Force, and I think this is the steady State that
I think everyone has agreed upon.
Mr. Rutherford. I would just like to see a more
modernized--I mean, we have some steam engines that are still
out there, and there is some question about whether the Coast
Guard is actually going to certify that ship.
Secretary Chao. On March--you know, one of my first
responsibilities was to visit the Ready Reserve fleet in
Beaumont, Texas. It was March of 2017. Having been the Deputy
Maritime Administrator, I am very sensitive----
Mr. Rutherford. Okay.
Secretary Chao [continuing]. To all these issues, and also,
internal discussions about where these issues should go.
Mr. Rutherford. Very good. Well, I thank you, and we will
follow up on the other issues. Thank you very much.
Secretary Chao. Thank you very much.
Mr. Rutherford. I yield back.
Mr. Price. Thank you.
All right. Madam Secretary, we appreciate your forbearance
here with the late start, and now, if you will, one final round
of questions.
I want to pick up on the theme that has been present in a
lot of the questioning today, including the questioning about
the Max 8 tragedies, that is, automated systems. Automated
systems and what it takes to understand them, and to make them
safe, and what the Department's responsibility is as these
technologies emerge across various transportation modes.
It includes aviation, of course, as we learned from the Max
8. It includes cars, trucks, trains, even ships. So it is a
dramatic shift, and it does pose challenges, as you have said,
to safety, which has always got to be the number one focus at
the Department. You have got to have a workforce that can
review and analyze increasingly complex technologically based
systems. Without this capability, you simply can't do your job.
So I want to ask you a couple of things: One, about
personnel and skill sets. What do you need to assess and verify
automated systems? And to what extent do you think you are on
top of that challenge? And secondly, the research component.
What kind of--what can you tell us about the research you are
conducting now about how people interact with automated
systems? How do operators know when technology is failing and
requires human intervention? That is clearly a major factor, or
it seems that it might likely be in these crashes.
Are you doing research? Is the FAA doing research about how
technology notifies pilots that they need to take over flight
operations, and how pilots react to such notifications? What
does that technology need to look like in order to do what it
is supposed to do?
Of course, you could ask the same about trains and cars,
but you see where I am going. I really do think the challenge
to the research agenda, to our understanding, and then also,
the personnel challenge that goes along with this in terms of
how we handle these matters, is quite acute.
Secretary Chao. There are so many issues here that you are
addressing that I share your concern about. Let me try to go
through them one by one.
On the whole issue about personnel and the rapid change
of--the rate of--the pace of change in technology, let me say
that the FAA is an extremely professional organization. They
are a proud organization of very competent professionals, and
they are exempt from the personnel compensation rules that the
rest of the Federal Government has to comply with.
So I do believe that they have the capability, and that if
they don't, that they have the capability and the flexibility
to go outside to get the people and the skill sets that they
need.
On the second issue about research. The Department has
about $1 billion spent on research, and a large part of that is
through the FAA. So they are studying and evaluating, always
trying to improve safety for the world, literally, on all these
issues that you talk about.
And then these larger global issues, the Office of the
Secretary and the FAA have met non-stop ever since March 10. We
meet in the morning. We meet at night. We have senior
management leadership teams of both the FAA and the Office of
the Secretary addressing this issue.
For the Office of the Secretary, for me personally, my
responsibility is to, once again, reassure the public and
restore their confidence in flying. So it is to reassure the
confidence of the flying public and the safety of these
aircraft.
And number two, the United States has always been the gold
standard for safety, aviation safety, throughout the world, and
that is why the acting FAA administrator is right now in
Singapore attending a conference with other international
authorities to update them, and to discuss with them on
aviation safety standards.
We are very much concerned with what you have discussed and
said much more eloquently than I, because I have been very
conscious of the time that is allotted to me. But these are all
the issues that we will take a look at, and that is why I have
launched two investigations, because I think we do need to get
answers, and we can always improve.
Mr. Price. Yes. And it does apply, of course, to all modes
of transportation.
Secretary Chao. Absolutely.
Mr. Price. I am sure you would agree, and if you want to
submit any additional material, particularly on the--how this
has influenced the research agenda we would appreciate seeing
that.
It is quite disconcerting to hear these reports that the--
one of the ways in which these new models of the 737 were not
modified, or were not modified sufficiently perhaps, is in the
warning system and how the warning system worked, and then how
complicated it was for the pilots to take corrective action,
and, you know, more complex, perhaps, than it needed to be, but
based on what? Based on a desire just to not have to make major
new investments? Based on any kind of research findings as to
what worked and what doesn't work?
Secretary Chao. I hope not. That would be unacceptable.
Mr. Price. That is the sort of thing we need to get to the
bottom of. I am sure you agree. Mr. Diaz-Balart.
Mr. Diaz-Balart. Thank you, Mr. Chairman. You know, heck, I
had such great what it sounded like a closing statement in my
last question, and I don't want to ruin that. But on a serious
note, again, I do want to comment a little bit about what Mr.
Rutherford talked about and, you know, MARAD and the Reserve
ships, and I do want to thank you for your leadership, Madam
Secretary. I think this subcommittee, if there is something--
among the things that we can be very proud of in the last
number of years is that emphasis that we have done there, and
as you know, we have tried to make up for many years of,
frankly, neglect, and I think we have done a great job there.
And I want to thank you Madam Secretary, but, in particular, I
want to thank Mr. Rutherford for his leadership.
We talked about ports already, and as I am so proud of
being on this subcommittee. I love being on this subcommittee,
and as I think a lot of folks saw today, these issues are a lot
more complex than people think, right. When you talk about
ports, you know, my legislative director and my chief of staff
always like to talk about how ports are a lot more than just
like some big crane there. There are complex entities, and
there are so many parts----
Secretary Chao. Engines of economic growth.
Mr. Diaz-Balart. Absolutely, absolutely, engines of
economic growth. But, Mr. Chairman, this being our last
hearing, I want to verify that this is our last hearing, I do
think, Mr. Chairman, that you have put together a number of
really, really helpful and important hearings and meetings. I
think this is going to make our jobs a lot better.
Madam Secretary, again, thank you, as I mentioned before, I
think for being the last hearing, it is a very important one, a
crucial one, and I think you have added a lot to this
conversation. And, Mr. Chairman, again, I thank you and you
have your work cut out for you, and know that this subcommittee
obviously is looking forward and me in particular is looking
forward to working with you as you deal with, again, a lot of
important challenges, but there is no more--there is no better
subcommittee, there is no better committee to serve on in
Congress than this one here, so thank you. I yield back, Mr.
Chairman.
Mr. Price. Thank you. I associate myself with your remarks
as we say around here. We look forward to working with you, and
we also, of course, want to take on the challenges that our
subcommittee poses. It is one of the best places to be in this
institution and work on things that really matter to our
communities.
Secretary Chao, thank you. I appreciate your being here
today giving us your time, and in answering a wide array of
queries. The committee staff will be in contact with your staff
regarding any questions for the record. If you would return
this information for the record within 30 days, that is 30 days
from next Wednesday, we will be able to publish the transcript
of today's hearing, and that will be helpful to us.
So I think this is the final, final comments for Mr. Diaz-
Balart. Assuming that, I will thank everyone again for a good
hearing under somewhat harried circumstances and call the
meeting adjourned.
Secretary Chao. Thank you.
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