[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]
BUILT TO LAST: EXAMINING
HOUSING RESILIENCE IN
THE FACE OF CLIMATE CHANGE
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON HOUSING,
COMMUNITY DEVELOPMENT,
AND INSURANCE
OF THE
COMMITTEE ON FINANCIAL SERVICES
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTEENTH CONGRESS
FIRST SESSION
__________
MAY 4, 2021
__________
Printed for the use of the Committee on Financial Services
Serial No. 117-21
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
__________
U.S. GOVERNMENT PUBLISHING OFFICE
44-836 PDF WASHINGTON : 2021
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HOUSE COMMITTEE ON FINANCIAL SERVICES
MAXINE WATERS, California, Chairwoman
CAROLYN B. MALONEY, New York PATRICK McHENRY, North Carolina,
NYDIA M. VELAZQUEZ, New York Ranking Member
BRAD SHERMAN, California FRANK D. LUCAS, Oklahoma
GREGORY W. MEEKS, New York BILL POSEY, Florida
DAVID SCOTT, Georgia BLAINE LUETKEMEYER, Missouri
AL GREEN, Texas BILL HUIZENGA, Michigan
EMANUEL CLEAVER, Missouri STEVE STIVERS, Ohio
ED PERLMUTTER, Colorado ANN WAGNER, Missouri
JIM A. HIMES, Connecticut ANDY BARR, Kentucky
BILL FOSTER, Illinois ROGER WILLIAMS, Texas
JOYCE BEATTY, Ohio FRENCH HILL, Arkansas
JUAN VARGAS, California TOM EMMER, Minnesota
JOSH GOTTHEIMER, New Jersey LEE M. ZELDIN, New York
VICENTE GONZALEZ, Texas BARRY LOUDERMILK, Georgia
AL LAWSON, Florida ALEXANDER X. MOONEY, West Virginia
MICHAEL SAN NICOLAS, Guam WARREN DAVIDSON, Ohio
CINDY AXNE, Iowa TED BUDD, North Carolina
SEAN CASTEN, Illinois DAVID KUSTOFF, Tennessee
AYANNA PRESSLEY, Massachusetts TREY HOLLINGSWORTH, Indiana
RITCHIE TORRES, New York ANTHONY GONZALEZ, Ohio
STEPHEN F. LYNCH, Massachusetts JOHN ROSE, Tennessee
ALMA ADAMS, North Carolina BRYAN STEIL, Wisconsin
RASHIDA TLAIB, Michigan LANCE GOODEN, Texas
MADELEINE DEAN, Pennsylvania WILLIAM TIMMONS, South Carolina
ALEXANDRIA OCASIO-CORTEZ, New York VAN TAYLOR, Texas
JESUS ``CHUY'' GARCIA, Illinois
SYLVIA GARCIA, Texas
NIKEMA WILLIAMS, Georgia
JAKE AUCHINCLOSS, Massachusetts
Charla Ouertatani, Staff Director
Subcommittee on Housing, Community
Development, and Insurance
EMANUEL CLEAVER, Missouri, Chairman
NYDIA M. VELAZQUEZ, New York STEVE STIVERS, Ohio, Ranking
BRAD SHERMAN, California Member
JOYCE BEATTY, Ohio LANCE GOODEN, Texas
AL GREEN, Texas BILL POSEY, Florida
VICENTE GONZALEZ, Texas BILL HUIZENGA, Michigan
CAROLYN B. MALONEY, New York LEE M. ZELDIN, New York
JUAN VARGAS, California TREY HOLLINGSWORTH, Indiana
AL LAWSON, Florida BRYAN STEIL, Wisconsin, Vice
CINDY AXNE, Iowa Ranking Member
RITCHIE TORRES, New York JOHN ROSE, Tennessee
VAN TAYLOR, Texas
C O N T E N T S
----------
Page
Hearing held on:
May 4, 2021.................................................. 1
Appendix:
May 4, 2021.................................................. 39
WITNESSES
Tuesday, May 4, 2021
Ellis, Rodney, Commissioner, Harris County, Texas................ 4
Ellis, Stephen, President, Taxpayers for Common Sense............ 10
Godreau-Aubert, Ariadna M., Executive Director, Ayuda Legal
Puerto Rico.................................................... 5
Mais, Andrew N., Commissioner, Connecticut Department of
Insurance, on behalf of the National Association of Insurance
Commissioners (NAIC)........................................... 7
Poticha, Shelley, Chief Climate Strategist, Natural Resources
Defense Council (NRDC)......................................... 9
APPENDIX
Prepared statements:
Ellis, Rodney................................................ 40
Ellis, Stephen............................................... 49
Godreau-Aubert, Ariadna M.................................... 55
Mais, Andrew N............................................... 67
Poticha, Shelley............................................. 73
Additional Material Submitted for the Record
Stivers, Hon. Steve:
Written statement of the BuildStrong Coalition............... 91
Written statement of the Reinsurance Association of America
(RAA)...................................................... 95
Ellis, Rodney:
Letter from the City of Houston Housing & Community
Development Department..................................... 119
BUILT TO LAST: EXAMINING
HOUSING RESILIENCE IN
THE FACE OF CLIMATE CHANGE
----------
Tuesday, May 4, 2021
U.S. House of Representatives,
Subcommittee on Housing,
Community Development,
and Insurance,
Committee on Financial Services,
Washington, D.C.
The subcommittee met, pursuant to notice, at 12:04 p.m.,
via Webex, Hon. Emanuel Cleaver [chairman of the subcommittee]
presiding.
Members present: Representatives Cleaver, Velazquez,
Sherman, Beatty, Green, Gonzalez of Texas, Maloney, Vargas,
Lawson, Axne, Torres; Stivers, Posey, Huizenga, Zeldin, Steil,
and Taylor.
Ex officio present: Representative Waters.
Chairman Cleaver. The Subcommittee on Housing, Community
Development, and Insurance will come to order. Without
objection, the Chair is authorized to declare a recess of the
subcommittee at any time. Also, without objection, members of
the full Financial Services Committee who are not members of
this subcommittee are authorized to participate in today's
hearing.
As a reminder, I ask all Members to keep themselves muted
when they are not being recognized by the Chair. The staff has
been instructed not to mute Members, except when a Member is
not being recognized by the Chair and there is inadvertent
background noise. Members are also reminded that they may only
participate in one remote proceeding at a time. If you are
participating today, please keep your camera on. And if you
choose to attend a different remote proceeding, please turn
your camera off.
Today's hearing is entitled, ``Built to Last: Examining
Housing Resilience in the Face of Climate Change.''
I now recognize myself for 4 minutes to give an opening
statement.
Today, we will examine the effects of climate change on
America's housing infrastructure, and within the jurisdiction
of this subcommittee, the role of the Federal Government in
mitigating, responding to, and recovering from weather events.
Climate change is the biggest existential crisis of our
time. Scientific data demonstrates that the average global
temperature is trending upward, and that more record-setting or
near-record-temperatures are likely on the horizon.
According to the National Oceanic and Atmospheric
Administration (NOAA), last year was the second-warmest year on
record, behind 2016, and 10 of the warmest years on record have
occurred since 2005. Rising global temperatures associated with
widespread changes in weather patterns and scientific studies
indicate that extreme weather events such as heat waves and
large storms are likely to become more frequent or more intense
with human-induced climate change.
The Federal Government estimates the occurrence and costs
of weather and climate disasters, and last year set a new
annual record for disasters, with 22 weather or climate
disasters in the United States, exceeding $1 billion in losses.
And 2020 was the 6th consecutive year in which 10-or-more
billion-dollar disasters have impacted the United States. As
people in every State and Territory in the United States remain
concerned about climate change impacts, the impetus is on
Federal policymakers to be diligent in supporting resilient and
prepared communities and to prioritize areas that are most
vulnerable to climate risk, including low-income neighborhoods
and communities of color. We will talk more about that when we
get into the question-and-answer period.
I would now like to recognize the ranking member of the
subcommittee, the gentleman from Ohio, Mr. Stivers, for 5
minutes.
But before I do, I want to just thank Ranking Member
Stivers for the opportunity to work with him over the past few
years. He has been on this committee since he was elected to
Congress. I have enjoyed working with him, and I would like to
thank him for his civility and his decency. I wish him much
success in his new job. And we hope that you will remember us
when you enter into the land of great wealth, opportunity,
mansions, and expensive cars.
So, Ranking Member Stivers, you are now recognized for 5
minutes.
Mr. Stivers. Thank you, Chairman Cleaver. I appreciate you
calling this hearing today, and I appreciate the chance to chat
with you. As you noted, on a personal note, it is a bittersweet
moment for me, because this is my last hearing as the ranking
member of this subcommittee before I leave Congress in a couple
of weeks.
And as I reflect on my time in Congress, I am proud of the
work we have done together, and there is a lot more to be done.
So, I hope that all of you will continue to work on.
It is been an honor to work with you, Mr. Chairman, and the
members of both the Majority and the Minority, I have enjoyed
working with everybody. And the good news is I am just taking
another job; I am not dying. So, I will still be around, and I
plan to be in Washington a decent amount. And I still care
about these issues.
Getting back to the topic of today's hearing on resiliency,
I think it is important that we tackle the issue of making our
housing stock as resilient as we can from natural perils. And I
think it is really interesting to note that Congress has
enacted two 5-year reauthorizations of the National Flood
Insurance Program (NFIP) since 1994, only two, once in 2004 and
once in 2012. There have been 16 short-term extensions since
2017. And I hope my colleagues will work in a bipartisan manner
to actually get something done.
I know, last year, we negotiated a bipartisan bill that
came out of this committee but didn't advance. And so, I am
hopeful that you will continue the bipartisan efforts around
resiliency. And the big part of that in this committee is the
National Flood Insurance Program.
There is a lot we need to do, that I plan to talk to our
witnesses about. We need to do a better job on the mapping--3D
mapping is an imperative if we are going to figure out how to
deal with resiliency, and we have to figure out how to deal
with claims that are filed multiple times on the same property.
And I think there will be some ways to deal with that. I
think mitigation is so important, and the mitigation efforts
are really as important as what you do inside the Flood
Insurance Program itself. So, I hope my colleagues will keep
these issues in mind. There is a lot to do moving forward, and
I look forward to being an outside ally that you can count on
to continue to make things work and to move things forward.
I look forward to hearing from our witnesses today, Mr.
Chairman. Thank you for your civility, thanks for your great
partnership, and I look forward to working with you from the
private sector--maybe I will be wearing a better suit, but I
look forward to working with you on an ongoing basis.
Chairman Cleaver. Thank you.
Mr. Stivers. I yield back.
Chairman Cleaver. Thank you, General Stivers. The Chair of
the full Financial Services Committee, Chairwoman Waters, is
not here at the moment. But I want to make sure all Members
know that whenever she arrives, after the speaker who may be
recognized at that moment, I will recognize the chairwoman for
such time as she may consume.
And now, let's get on with the introduction of those who
are going to be with us today as witnesses. Let me give
Congressman Al Green the opportunity to introduce our first
witness.
Mr. Green. Thank you, Mr. Chairman. I greatly appreciate
this opportunity. Our first witness is a former City Council
person who went on to be a State senator, who is now a county
commissioner, and who is very well-learned and knowledgeable
about these issues associated with Community Development Block
Grant Disaster Recovery (CDBG-DR). I am honored to introduce
and present to everyone, Commissioner Rodney Ellis.
Mr. Rodney Ellis. Thank you, Congressman Green.
Chairman Cleaver. Yes. Let me introduce all of the
witnesses, and then we will move toward the questions and
answers after the chairwoman comes in.
We have also with us today: Ariadna M. Godreau-Aubert,
executive director of Ayuda Legal Puerto Rico; Commissioner
Andrew N. Mais of the Connecticut Department of Insurance,
testifying on behalf of the National Association of Insurance
Commissioners; Shelley Poticha, chief climate strategist for
the Natural Resources Defense Council; and Stephen Ellis,
president of Taxpayers for Common Sense.
We will proceed with the statements, beginning with
Commissioner Rodney Ellis.
STATEMENT OF RODNEY ELLIS, COMMISSIONER, HARRIS COUNTY, TEXAS
Mr. Rodney Ellis. Thank you, Chairman Cleaver, Ranking
Member Stivers, and distinguished members of the subcommittee.
And thank you, Congressman Al Green, for your friendship over
many years. I am proud to testify today.
My name is Rodney Ellis, and I represent about 1.1 million
people in the third largest county in the country. The City of
Houston is the County Seat of Harris County. We have a total
population of about 4.6 million people in our County.
Harris County residents have long dealt with flooding and
natural disasters due to our location near the Gulf of Mexico,
and our flat topography that barely rises above sea level,
however, climate change is now adding a new level of urgency by
increasing the frequency of extreme weather events.
In 2017, Hurricane Harvey devastated this region. This
hurricane dropped more than 50 inches of rain in some parts of
Houston, causing more than 100 deaths, and resulting in $125
billion worth of damage in the Gulf Coast region.
Our residents are still dealing with the impacts of
Hurricane Harvey. According to a University of Houston study,
nearly 20 percent of the residents who were displaced by the
storm are still in temporary housing. Natural disasters, such
as Harvey, exacerbate pre-existing structural inequalities.
A study by Rice University and the University of Pittsburgh
found that between 1999 and 2013, natural disasters increased
Houston's racial wealth gap by $87,000. Time and time again,
the poorest neighborhoods in Harris County are the hardest-hit
during storms, floods, and other natural disasters, but they
receive the least amount of resources to recover, rebuild, and
build resiliency against the next flood.
The Federal cost-benefit ratio of flood standards for
mitigation projects are based on property values rather than
historical impact and ability to recover, which means low-
income, oftentimes Black and Hispanic communities, like the
Fifth Ward, where Congressman Mickey Leland and Congresswoman
Barbara Jordan hailed from, have been passed over for Federal
funding for years, despite extreme flood protection in the
area.
This creates a cycle where those in higher-income
neighborhoods get access to funding for new projects, while
certain neighborhoods continue to suffer from disinvestment. By
prioritizing property over people, areas of high-income values
and fewer people are often selected over areas with larger
populations living in expensive homes, even if they are at
higher risk of flooding and greater damage, to protect people
in those communities.
The State of Texas received $4.2 billion from the
Department of Housing and Urban Development's Community Block
Grant Mitigation Fund, which is administered by the State
through our General Land Office, to address infrastructure and
build and implement structural and non-structural projects,
programs, and partnerships that reduce the risk and impacts of
future natural disasters.
Although my County is very grateful for the sizable Federal
investments, there are significant shortcomings in the
administration of these programs, both at our level, on the
State level, and the Federal level.
In the CDBG Disaster Recovery Programs, an Urban Institute
report found that implementation challenges and slow timelines
are a problem. On average, programs took about 4.7 years to
complete across all activity types, and 3.8 years to complete
across housing activities.
This is reflected in several-year delays at the General
Land Office (GLO) in Texas of disbursement of funds to Harris
County. The slow response from the State's GLO to allocate and
disburse funds means that communities are desperately waiting
for help to rebuild their homes and lives years after Hurricane
Harvey.
Reducing the risk of harm from future floods requires bold
control of infrastructure, policies, and regulations. Following
Harvey, we successfully advocated on the County level for
equity guidelines on how we disbursed flood infrastructure and
recovery projects. We passed a $2.5 billion bond package, which
was approved by our voters in 2018. When we prioritize the most
vulnerable, our investments create a big impact and bring more
benefits to more people.
As my written testimony has outlined, there are many
challenges on the road to full recovery from Hurricane Harvey,
and preparing for future storms that we know will come more
frequently. But there are steps that this subcommittee and HUD
can take to support communities like Harris County, and all
across our country.
The Texas Government General Land Office needs more
oversight, and so do we. It is a good thing for you to come
back and ask, what are we doing with the money you gave us, to
provide more transparent, comprehensive information on the way
that the money is being disbursed through the CDBG Block Grant.
Mr. Chairman, I would like to submit a letter for the
record as well from our Housing Office. And I will be more than
happy to answer any questions. Thank you.
Chairman Cleaver. Without objection, it is so ordered.
[The prepared statement of Commissioner Rodney Ellis can be
found on page 40 of the appendix.]
Chairman Cleaver. Thank you, Commissioner Ellis.
The Chair now recognizes Ms. Ariadna Godreau-Aubert for an
oral presentation of your testimony.
STATEMENT OF ARIADNA M. GODREAU-AUBERT, EXECUTIVE DIRECTOR,
AYUDA LEGAL PUERTO RICO
Ms. Godreau-Aubert. Chairman Cleaver, Ranking Member
Stivers, and members of this subcommittee, thank you for the
invitation to testify. I am Ariadna Godreau-Aubert, founder and
director of Ayuda Legal Puerto Rico.
Since 2017, we have led legal support and advocacy efforts
around disaster recovery on the Island. Almost 4 years of
disasters bring us closer to a climate, housing, and
infrastructure crisis that threatens the possibility of life in
Puerto Rico--12 percent of the population has left in a decade,
and 24 percent of our people live in high- to high-medium-risk
zones, so addressing effective disaster planning and response
in affordable or resilient houses is urgent.
Families who were not able to access FEMA, who were turned
down or neglected--Tu Hogar Renace, a Sheltering and Temporary
Essential Power (STEP) Program, was brought in to repair,
rebuild, and relocate the CDBG-DR Program administered by our
local Department of Housing. Between July 2019 and January
2020, 27,000 families applied, and as of today, only 900 houses
have been repaired, and 45 have been rebuilt.
A new hurricane season starts in 26 days. We need disaster
assistance to arrive quickly. We need guidelines to ensure
coherent planning, equitable access to funds, displacement
minimization and participation. We need flexibility.
Disaster assistance should not be a blind bet on possible
outcomes, but a strategy towards sustainable recovery, and
Federal and local governments share the responsibility to lead
survivors to resiliency. We need CDBG-DR to be permanently
authorized. The wait for allocation notices is excruciating;
mitigation funds destined to Puerto Rico were made available
almost 24 months after the appropriation.
Permanent authorization could also deter political actions
to relay funds, such as those experienced by Puerto Rico, and
that were grounded on a complete disregard for the lives of 3
million people on the Island. Permanent authorization could
pave the way for agility, for modern policies, and it could
provide a core set of guidelines to stop what is happening in
Puerto Rico where significant restrictions are locally imposed.
Title clearance should never be a condition for disaster
assistance. Half of the people in Puerto Rico lack a formal
title. While local laws do not require a deed, and Federal
disaster regulations provide a broad definition of ownership,
FEMA's incorrect interpretation excluded 77,000 families from
receiving assistance.
Ayuda Legal drafted an alternative title declaration, and
we advocated for FEMA to stop barring assistance, and we won,
but it was too late. FEMA's reluctance to notify applicants
about their right to appeal and use of declaration, placed on
the backs of nonprofits the responsibility to let survivors
know about these rights. And we couldn't do it.
Later, the local Department of Housing decided to require
titles to repair, rebuild, or relocate using CDBG-DR funds.
Thousands of applications were transferred to an unnecessary,
big, and costly title clearance program, delaying evaluations
for months and even years. Eventually, we attained an Executive
Order waiving title requirement to repair and rebuild, yet, the
Department of Housing requires title to relocate.
With $1.1 million disbursed, only 2 titles have been
registered. Proof of title has been an obstacle in California
and North Carolina, as well, where recovery processes would
benefit from clear and inclusive definitions of ownership.
Title issues will not be solved by disaster programs or legal
aid; they require policy changes at local levels.
Guidelines could also prevent displacements; despite
mitigation funds, our CDBG-DR plan has an across-the-board
prohibition to rebuild in flood zones. These families in flood
zones are only able to relocate. These relocations are never
voluntary. Four years after our disaster, our low-income
families without a safe dwelling would have no choice but to
relocate if the alternative is to receive no aid at all.
We need sensible relocation policies that account for the
needs, wants, and human rights of communities. Relocation
should never be the first option. We need mitigation and anti-
displacement policies. Mitigation can be effective, save funds,
and address climate change; yet, wrongly applied mitigation may
also displace and worsen inequitable development.
Lastly, participation is essential for the success of
recovery. Sustainable solutions require acknowledging the power
and agency of local stakeholders. Regional civilian oversight
committees facilitated by independent individuals, never
Department of Housing staff, must be promoted, and coherent and
participatory planning is equally essential.
One of the biggest obstacles for needs assessments and
resilient housing infrastructure is that CDBG-DR planning
programs have barely started, hardcore guidelines should
instruct grantees to publish timelines, to publish progress
reports, and to prioritize participatory planning.
A just recovery is not only needed, but it is possible.
Thank you.
[The prepared statement of Ms. Godreau-Aubert can be found
on page 55 of the appendix.]
Chairman Cleaver. Thank you very much. Next, we will hear
from Mr. Andrew Mais, commissioner of insurance for the State
of Connecticut, who is testifying on behalf of the National
Association of Insurance Commissioners. You are now recognized
for 5 minutes.
STATEMENT OF ANDREW N. MAIS, COMMISSIONER, CONNECTICUT
DEPARTMENT OF INSURANCE, ON BEHALF OF THE NATIONAL ASSOCIATION
OF INSURANCE COMMISSIONERS (NAIC)
Mr. Mais. Chairman Cleaver, Chairwoman Waters, Ranking
Member Stivers, and members of the subcommittee, thank you for
the invitation to testify today; and thank you, Mr. Chairman,
for speaking to our NAIC recently.
We do appreciate the subcommittee's efforts to focus on
disaster risk reduction and resilience. Perhaps no sector is
more attuned to and focused on disaster preparedness, and
directly aware of its value, than the insurance sectors. State
insurance regulators recognize that natural disasters take a
considerable financial and emotional toll on Americans every
year.
Climate risk contributes directly to a growing coverage gap
between what the insurance industry can cover while balancing
availability, and affordability in what is required. It is
estimated that on a global basis, the insurance industry's
share of natural disaster losses is only 36 percent of the
total required, so mitigation is critical to help close that
gap. We are working to find solutions to managing the
catastrophic risk exposure in our respective States and,
through the NAIC, have been engaged in those efforts for
decades.
I serve as a member of the NAIC's Climate and Resiliency
Task Force, and we are focused on five areas: pre-disaster
mitigation; solvency; climate risk disclosure; innovation; and
technology.
As part of those efforts, insurance regulators are
participating in multi-agency stakeholder educational efforts
on pre-disaster mitigation related to climate risk and
incentivizing insurer recognition of enhanced building codes in
underwriting and in pricing.
In March, the NAIC hosted a building code and mitigation
workshop with State insurance departments, FEMA, insurance
industry representatives, and consumer groups. Risk reduction
and mitigation to protect consumers and reduce the losses paid
by insurers are otherwise absorbed through Federal spending,
which helps to maintain solvent insurance markets while keeping
rates more affordable.
State insurance regulators were examining the potential
solvency impact of insurers' exposure to climate-related risk,
and we may consider enhancements to our regulator solvency tool
to analyze and address and ensure its potential financial
exposure to the physical and to the transition impacts of
climate change. We are also focusing on climate risk disclosure
and considering modifications to our existing at NAIC Climate
Risk Survey to promote uniformity in reporting requirements.
In addition, we are considering innovative solutions to
climate risk and resiliency directed at reducing, managing, and
mitigating climate risks while closing insurance gaps in
coverage for consumers.
And finally, we have established a workstream focused on
the increasing use of technology to better assess and evaluate
climate risk exposure, think of predictive modeling tools, for
example.
The NAIC Center for Insurance and Policy Research has also
been active in researching various aspects of resiliency. We
recently held an event in coordination with the Insurance
Institute for Business & Home Safety on the insurance
implications of severe convective storms. And that included a
live demonstration of the importance of building resilience
standards.
State insurance regulators also have a collaborative
relationship with FEMA, and we are jointly hosting resilience
roundtables across the country on resilience priorities before,
during, and after disaster events. Some States have formed a
Regional Resilience Working Group with FEMA that is focusing on
lessons learned from 2020, in advance of the upcoming hurricane
season.
Further, we have established a FEMA-NAIC Advisory Group to
coordinate resilience activities between State regulators and
FEMA, and we, the NAIC and FEMA, are also working on a regional
earthquake training exercise.
Last, but certainly not least, State insurance regulators
recognize the pivotal role that flood insurance plays in
preparedness and recovery. We urge Congress to pass a long-term
NFIP reauthorization before it expires on September 30th, to
provide certainty for policyholders. Reauthorization
legislation should focus on ways to encourage investment in
flood mitigation, and ensure consumers have access to multiple
options for flood insurance products, and to help facilitate
greater growth in the private flood insurance market as a
complement to the NFIP.
And in conclusion, State insurance regulators share your
support for investing in prevention and preparedness to help
minimize the impact of natural catastrophes and economic loss,
and pre-event disaster planning, effective mitigation, and
rational building codes are crucial parts of the solution.
Thank you for the opportunity to testify today. And I would
be pleased to answer your questions.
[The prepared statement of Mr. Mais can be found on page 67
of the appendix.]
Chairman Cleaver. Thank you, Mr. Mais.
The Chair now recognizes Ms. Shelley Poticha, the chief
climate strategist at the National Resources Defense Council
(NRDC).
STATEMENT OF SHELLEY POTICHA, CHIEF CLIMATE STRATEGIST, NATURAL
RESOURCES DEFENSE COUNCIL (NRDC)
Ms. Poticha. Good afternoon, everybody. Chairman Cleaver,
Chairwoman Waters, Ranking Member Stivers, and members of the
subcommittee, thank you for the opportunity to testify today
about housing and climate resilience.
My name is Shelly Poticha, and I am the chief climate
strategist for NRDC, the Natural Resources Defense Council.
NRDC is an international nonprofit environmental organization
working to protect the world's natural resources, improve
public health, and ensure a safe and sustainable environment
for all.
The impacts of climate change--extreme heat, powerful
storms, and sea level rise--are already impossible to ignore.
We now, quite undeniably, live in a rapidly-changing world that
will profoundly impact our nation and our society. Over the
last several years, we have seen record-breaking hurricanes,
floods, wildfires, and other climate-fueled disasters that have
devastated communities and caused untold suffering for millions
of Americans.
The impacts of climate change are here and they will
continue to grow in severity and frequency, even under the most
optimistic climate mitigation scenarios. Faced with this
reality, we must prepare for a dramatically different future
and ensure that we protect the people and communities who are
most vulnerable. We must also think about how we make decisions
and who is involved in making those decisions.
The complex and daunting challenges posed by climate change
already exacerbate the intergenerational harms of racial and
economic inequality. The people who bear the greatest burdens
of climate change are too often also locked out of the
decision-making that will shape the future of their
communities.
I want to bring to the subcommittee's attention three
actions to address issues at the intersection of equity,
housing, and climate resilience that could form the basis of a
new Federal direction.
First, support community-led development and fund community
ownership; community-led development that is both equitable and
sustainable is an approach that can be successfully employed,
and it is critical to building lasting change. This approach,
sometimes known as low carbon resilient development, brings
together traditionally separate goals: reducing emissions;
becoming more resilient to climate change; and economic and
social development.
Projects coming out of the Strong, Prosperous, and
Resilient Communities Challenge (SPARCC), use this approach,
and have been creative with and by community leaders. They
promote equitable transit, housing, and green infrastructure;
they safeguard against displacement caused by gentrification;
and they stimulate local microeconomies. SPARCC can provide a
model for a more resilient future.
Second, in addition to fully funding CDBG, which targets
historically disadvantaged communities of color with vital
resources and technical assistance, Congress also needs to
permanently establish, in statute, the Community Development
Block Grant Disaster Recovery Program (CDBG-DR), and use it to
model community-led, low-carbon development.
Because CDBG-DR is not permanently established in statute,
each new authorization and appropriation requires HUD to go
through a lengthy and time-consuming process of drafting and
approving a new set of regulations. The result is, at best, a
month-long delay between qualifying disasters and delivery of
assistance. Why not embed the principles of community-led, low
carbon resilient development into a permanent CDBG-DR, and
raise the bar for recovery going forward?
Finally, reform the National Flood Insurance Program
(NFIP). I urge the committee to quickly move forward to reform
the National Flood Insurance Program. Much more than an
insurance program, NFIP serves as a critical source of
information for individuals and communities about flood history
and flood risks. The right reforms could allow NFIP to be a
lynchpin in our efforts to cope with the growing problems of
flooding and sea-level rise that result from climate change.
But currently, it is a liability. We need an NFIP that
provides low- and moderate-income people with affordable
coverage, expands access to flood mitigation and relocation
assistance, and grants homeowners, home buyers, and renters a
right to know the flood history and risks associated with their
current or prospective home.
President Biden's American Jobs Plan will create good-
paying jobs, and build, preserve, and retrofit millions of
homes to be more affordable and resilient. These are important
steps toward building a more just, equitable, and climate-
resilient future, and your committee can take it even further
and make it sure to be the direction going forward.
I thank you for the opportunity to speak before the
subcommittee today.
[The prepared statement of Ms. Poticha can be found on page
73 of the appendix.]
Chairman Cleaver. Thank you, Ms. Poticha.
And finally, we will hear from Stephen Ellis, the president
of Taxpayers for Common Sense. Mr. Ellis, you have 5 minutes.
STATEMENT OF STEPHEN ELLIS, PRESIDENT, TAXPAYERS FOR COMMON
SENSE (TCS)
Mr. Stephen Ellis. Thank you. Good afternoon, Chairwoman
Waters, Chairman Cleaver, Ranking Member Stivers, and members
of the subcommittee. I am Steve Ellis from the Taxpayers for
Common Sense (TCS), a national nonpartisan budget watchdog.
Thank you for inviting me.
TCS has worked on disaster-related issues on behalf of
taxpayers for our entire, more than 25 years, of existence. And
I have been involved in flooding issues dating back to my days
as a young Coast Guard Officer dealing with the aftermath of
the Great Midwest Flood of 1993.
These are critical issues for taxpayers, and the country
needs smart public policy that protects people and property.
The Congressional Budget Office estimates that hurricane winds
and storm-related responses cost the U.S. economy $54 billion
annually, including $34 billion in expected annual economic
loss to the residential sector.
The expected annual cost to Federal taxpayers is estimated
to be $17 billion. From Agriculture, to Defense, to
Transportation, climate change impacts our entire Federal
budget, but no area of spending so directly mirrors the
escalating climate change crisis as disaster spending. On a
cost-adjusted basis, billion-dollar disasters in the U.S. have
increased from 2.9 per year, at an average cost of $17.8
billion in the 1980s, to 16.2 disasters per year, at an average
annual cost of $121.4 billion from 2016 to 2020.
The Congressional Budget Office puts it rather succinctly:
``Climate change increases Federal budget deficits, and that
investment by the government or others in various types of
mitigation or adaptation efforts could reduce the cost of
climate change.''
One other truism of disasters is that they have a
disproportionate impact on poor and minority populations. In
many cases, these individuals don't have savings to rely on
while they rebuild, they may have lost their transportation to
work, and their place of business may have been destroyed as
well. Because of historically discriminatory policies or a need
for lower housing costs, these individuals are often situated
in less desirable, more vulnerable, high-risk areas.
They may not be able to repay loans made available after
disasters, or provide sufficient funds of their own to tap
Federal programs. There are roughly 5 million NFIP policies,
but there are well over 100 million housing units in the United
States. More people need to purchase flood insurance. After
2016's extraordinarily heavy rainfall event in Baton Rouge, the
average homeowner with flood insurance coverage received
$86,500 to rebuild their home. The average person without flood
insurance received only $9,100 in disaster assistance.
Programs such as CDBG-DR should take into account the needs
of disadvantaged populations and ensure that they have access
to the benefits, but also the tools to mitigate, adapt, and
prespond to future disaster events, to make them less costly
and impactful. While it varies by situation and peril, we know
that every dollar spent on mitigation can save as much as $6 or
more in post-disaster response.
Regardless of need, NFIP has subsidized rates since its
inception 50 years ago. More than 25 percent of properties in
the Program pay subsidized or grandfathered rates. NFIP has
helped fuel a development boom in high-risk areas simply by
making it more affordable to take on flood risks, and housing
does not occur in a vacuum; as areas develop, infrastructure
follows with roads, bridges, water, electric, and sewer, and
all of these intensify along with residential development.
The NFIP has exacerbated exposure to climate change. At the
same time, it is negatively impacted by it, as storms increased
in frequency, as sea levels rise, this increases the cost of
the Program, and it also increases demand for CDBG-DR. The best
way to reduce the rate for flood insurance for property owners
and taxpayers is to reduce the risk.
It is not about artificial caps that hide the real risks to
people, but about finding ways to fund mitigation either at the
property or the community level. If a property owner is unable
to afford the premium, means-tested assistance outside the rate
structure should be provided.
FEMA's new Risk Rating 2.0 promises to better price actual
risks for properties by incorporating more data and flood
variables to determine actual risks for properties. In theory,
this will reduce some of the cross-subsidies that have plagued
the program. CDBG-DR is supposed to supplement existing
disaster-related authorities. Specifically, these funds are for
long-term recovery, including restoration of infrastructure and
housing, and economic revitalization, but also future disaster
mitigation activities.
Since 1992, nearly $90 billion has been appropriated to the
Program. While there is some program direction, in reality
there is a great deal of leeway granted to HUD and the
implementing States and communities. Flexibility is an
important part of the program, but stability and predictability
are also critical to successfully meeting program goals.
TCS supports the committee's efforts to statutorily
authorize the CDBG program. Climate change, its impacts, NFIP
and CDBG-DR are critical issues, not just for their budget and
taxpayer impacts, but for society as a whole. Federal policies
must promote realistic and responsible solutions to climate
change, including targeting investments that lift innovative
solutions and reflect the needs and experiences of low-income
and minority communities.
The goal must be to develop risk management and mitigation
strategies to enable communities, infrastructure, and
industries to become more resilient, face less risk, and better
adapt to future mitigation costs and damages of climate change.
Thank you for very much for the opportunity to testify, and
I am happy to answer any questions you may have.
[The prepared statement of Mr. Stephen Ellis can be found
on page 49 of the appendix.]
Chairman Cleaver. Thank you, Mr. Ellis, for your testimony.
The Chair now recognizes the Chair of the full Financial
Services Committee, Chairwoman Maxine Waters of California.
Chairwoman Waters. Thank you very much, Chairman Cleaver,
for convening this hearing on the need to improve the
resiliency of our country's housing infrastructure in the face
of climate change.
In recent years, the United States has experienced more
frequent and intense natural disasters attributable to climate
change, displacing tens of thousands of people and costing
hundreds of billions of dollars in damage. I have been working
across Congresses, now with Members on both sides of the aisle,
to reform the National Flood Insurance Program.
And I am looking forward to passing further reforms, as
well as making a significant investment in our nation's
affordable housing stock, by passing the Housing is
Infrastructure Act, as part of President Biden's American Job
Plan.
So, I want to thank you so very much for the attention you
are giving to this issue. And I yield back the balance of my
time.
Chairman Cleaver. Thank you, Madam Chairwoman.
We will now begin with questions, and I will kick off the
questioning.
Mr. Ellis, you have experience in a number of offices
throughout your career in Austin, the Capital, and then in
Houston, and in Harris County. Will you give me your opinion of
the response to those disasters that you have witnessed from
FEMA and HUD, and do you think that there are times in which
their requirements and regulations collide?
Mr. Rodney Ellis. Thank you, Mr. Chairman. The biggest
challenge that I have seen has been that HUD money is tied to
low- to moderate-income (LMI) households, but most other
Federal money that we get related to disasters has a cost-
benefit ratio in it. So on our level, even after Hurricane
Harvey, we passed a record bond issue; we try to address some
of our own problems, and we leverage it with money from you all
on the Federal level.
And when we go to FEMA, when we go to the Army Corps of
Engineers, they are generally following a cost-benefit ratio
analysis. I can understand why one would say we ought to
protect, in the case of Houston, our port and our medical
center are downtown, but even in my rural communities and
counties I talked to around the country, the cost-benefit of
racial language is such a big problem.
That means in Houston, we spend all of our time chasing
Federal dollars, most of it from mitigation, that has a cost-
benefit ratio language in it. So even when you give us money
through HUD to rebuild these communities, they are the ones
that flood first. There are some rules, that when it comes
through our General Land Office, is limiting the size of
bedrooms, so in the neighborhood I grew up in, it is a two-
bedroom home, five people in it, one bathroom, and they
expanded it over time. If that house get flooded, under GLO's
rules, they would say, if there are only two people left in the
house, you can't go back and do a three-bedroom home, you can
only build a two-bedroom home.
So, some low-income households decide, I will live with the
mold. In the case of my parents, because of discrimination,
they had to move into a poor Black neighborhood to get a
Federal guarantee. So, the only wealth that my 99-year-old
father had to pass on to, in my case, my sister, was his home.
And that is a real challenge.
We appealed it to HUD, the previous HUD administration
denied it, and the City of Houston decided to take local funds
to make up for that extra bedroom for many of those low-income
communities. But that is a big problem.
We are hoping, with help from you, and maybe with the new
leadership at HUD, that we can get that changed. But the cost-
benefit ratio, I can't stress enough, is the biggest challenge
I see.
Chairman Cleaver. Why did HUD deny it? What was the
rationale that they gave you?
Mr. Rodney Ellis. The best analysis that I can come up with
is, they were thinking if you have a limited amount of money,
you could spread it out to more households. When we talked to
them, that was their rationale. So we said, we will take other
Federal money to make up for it. I know those low-end
communities.
Mr. Chairman, some of them haven't gone to Board review.
And also, like my dad's, if he flooded, he would just live with
the mold instead of giving up that extra bedroom and bathroom,
because that is his only wealth to pass on.
So, it has been a big problem. And HUD told me they hadn't
seen that anywhere else in the country. They have not required
it. I just think that the Land Office was trying to be
protective, but sometimes we in government want to offer more
help than people are willing to take.
Chairman Cleaver. Thank you for being here with us.
Mr. Stivers, the ranking member from Ohio, is now
recognized for 5 minutes.
Mr. Stivers. Thank you, Mr. Chairman.
First, I would like to request unanimous consent to enter
into the record three statements: one from the Manufactured
Housing Institute; one from the National Association of Mutual
Insurance Companies; and one from the Reinsurers Association of
America.
Chairman Cleaver. Without objection, it is so ordered.
Mr. Stivers. Thank you. And my first question is about
mitigation. I think we will be in a much better position, going
forward, if we can do something about mitigation.
I want to ask you, Mr. Ellis, if you can go into a little
depth; you talked a little bit about mitigation, but it seems
to me that there is little incentive for mitigation efforts
because the Federal share of these disasters has gone up. Back
in 1955 during Hurricane Diane, the Federal Government only
covered about 6 percent of the disaster's total costs. As part
of Superstorm Sandy, the Federal Government's exposure was 77
percent.
So, it seems like there is little incentive to enact
mitigation. What can we do to focus on mitigation so that we
can reduce the exposure before these disasters strike, Mr.
Ellis?
Mr. Stephen Ellis. I am assuming that is me, as you said,
``Mr. Ellis.''
Mr. Stivers. Yes. That is you.
Mr. Stephen Ellis. Okay, I'm just making sure. You are
absolutely right, Congressman, that their Federal share of
disasters has grown dramatically, and it is even more recent
than--you mentioned Diane. As recently as Hurricane Hugo in
1989, less than 30 percent of the total cost was borne by the
Federal Government. So, it has skyrocketed in recent decades.
And certainly, part of it is having an enticement of
pricing. And we get into this about flood insurance,
particularly, and about artificially lowering rates; it serves
as a disincentive to mitigation. And we recognize that even if
you have a lower rate, the flood doesn't think you are on a
different floodplain. It floods you just like what your real
rate would be.
Essentially, you want to make sure that people have
incentives to mitigate, and that there are opportunities and
instructions for mitigation as well. And so, those are really
critical elements, but if you flood with cash, then you need to
make sure you are directing that cash in appropriate ways.
Mr. Stivers. Thank you. And one follow-up question, Mr.
Ellis. The National Flood Insurance Program statute requires
that FEMA set premiums based on the risks involved, but the
National Flood Insurance Program still uses the same rating
methods they have used for the last 50 years. I know that FEMA
is doing something to address this, and I am curious as to what
kind of technology should they use, whether it is 3D mapping or
other things as they address the real risks involved to charge
actuarially sound premiums?
Mr. Stephen Ellis. Thank you, Congressman Stivers. Yes, it
is true that FEMA is using basically the same methodology that
they have always used on NFIP, but they are doing, as I
mentioned in my testimony, Risk Rating 2.0, trying to take in
increased data. I think that everybody on the panel and on the
committee can agree that the mapping needs to address--needs to
be better, and needs to use better technologies, and more up-
to-date technologies.
And then, we need to communicate that risk to people,
because right now there are many cases where people don't
really even recognize the level of risk that they face. That is
one tool of risk communication, and we have seen States like
North Carolina, for instance, that have gone leaps and bounds
beyond what FEMA has been able to do to provide that
information to homeowners, where they can understand not just
their relative risks, but their future risks from storm events,
even as they are occurring.
Mr. Stivers. And one follow-up question, one of the biggest
problems in the National Flood Insurance Program is the
multiple-claim properties. How should we deal with properties
that have had three or four claims? What should we do to move
forward to what appears to be one of the biggest problems in
the system?
Mr. Stephen Ellis. It is interesting to me, Congressman,
that they seem to keep coming up with different terms. There is
Repetitive Loss Properties, then Severe Repetitive Loss
Properties, Extreme Repetitive Loss Properties. Clearly, this
is an issue that has to be dealt with, and in some cases--
Congressman Blumenauer back in 2004 was mentioned on the
reauthorization at that time. He had the, ``Two Strikes and
You're out of the Taxpayer Pocket'' Act.
And he was basically trying to put more pressure on
property owners to mitigate, or basically to communities to do
buyouts and relocation in a structured and thoughtful manner.
Mr. Stivers. Thank you. I yield back, Mr. Chairman. Maybe
we will do a second round. I have lots more questions, but
thanks for the time. I yield back.
Chairman Cleaver. Thank you, Mr. Stivers.
The Chair now recognizes Chairwoman Waters for 5 minutes.
Chairwoman Waters. Thank you very much, Mr. Chairman. I do
appreciate that.
I am going to direct my question to my old, long-time
friend, Commissioner Ellis, politician par excellence, thank
you for being here today.
I heard what you voiced your concern about, and that sounds
as if it is just bureaucracy with a lack of understanding about
how to treat the support that they give to families and their
homes following a hurricane or a disaster, and that is kind of
bureaucracy at its worst. But I want to ask you a little bit
about what I experienced after Hurricane Katrina. I worked to
hold St. Bernard Parish accountable and ensure Federal housing
funds would not be used to enact a discriminatory policy that
prohibited the construction of multi-family housing post-
Katrina.
Policies such as Blood Relative Ordinance--I don't know if
you have ever heard of this--prevented St. Bernard Parish
homeowners from renting to anyone who was not a blood relative.
In the aftermath of the various disasters and weather events in
Texas, how has Harris County worked to present a disparate
impact on communities of color that are seeking to rebuild and
recover from natural disasters?
Yours didn't sound like, necessarily, discrimination; it
just sounded as if it was ill-informed individuals who handle
the policy following a disaster. Have you seen any signs of
direct discrimination?
Mr. Rodney Ellis. Chairwoman Waters, thank you for the
question, and for your years of leadership.
I went to Xavier in New Orleans, so I am well familiar with
some of those schemes that were going on in Louisiana. In
Texas, at the end of the day, that smaller bedroom policy has
had a disparate impact on communities of color. I don't think
the intent had anything to do with someone being Black or
Brown, but the effect has because it has been those
neighborhoods that had done it the most.
I would encourage you all in Congress to make sure you give
us the oversight, ask the hard questions. I think HUD sent all
kinds of smoke signals to the State saying, ditch that idea,
but they didn't want to step in and make them do it. Just the
respect, I guess, for local control, which I am for, other
than, ``I am all for States' rights until the State is wrong.''
I have a problem with that. But it would be well worth looking
into what we do.
And so much of what we do on the mitigation front, despite
all of the great money that comes from HUD, most of the money
in our region, for mitigation, to rebuild, to protect housing
investment has come through FEMA, the Corps of Engineers, and
we all spend our time with our money chasing other Federal
dollars for that cost-benefit ratio.
So, how we get rid of it? My colleagues at the county
level, on all sides of the aisle, tell me we ought to ditch it,
protect your downtown, the airport, but just recognizing more
than somebody's wealthy home. The house I live in now, instead
of the house I came out of, but just providing [inaudible].
Chairwoman Waters. Thank you so much. I am very pleased
that Congressman Cleaver has taken such a leadership on these
kinds of issues. I will do everything that I can to support
him, and we really want to do it right. And this is a moment in
history where we have an opportunity to do it right. So, thank
you so very much for being here today.
And, Chairman Cleaver, I yield back the balance of my time.
Chairman Cleaver. Thank you, Madam Chairwoman.
The gentleman from Florida, Mr. Posey, is now recognized
for 5 minutes.
Mr. Posey. Thank you, Mr. Chairman,
Mr. Ellis, can you please tell us what your research shows
about the role of building codes in achieving flood and storm
resilience, and how these measures are being adopted, the best
way they are being adopted by various States?
Mr. Stephen Ellis. Sure. Thank you very much, Congressman.
Building codes are critical to, basically to resilience,
and so, having resilient housing. And it is something that,
while it is a State issue, and it is something that needs to be
determined at the State level, and use strings from the Federal
Government, as far as encouraging stronger building codes,
encouraging better building back after a disaster. And so,
nobody has to take the Federal dollars if they don't want to.
But that is critical because taxpayers are investing in
these areas, and so you want to make sure that all of those
investments are protected, and that all of those people are
protected. We are not doing anybody any favors if we are
subsidizing construction that isn't actually going to be
protective when inevitable disaster strikes them.
Mr. Posey. Okay. Also, Mr. Ellis, our Federal response to
flooding is scattered over several agencies, the Army Corps of
Engineers, FEMA, NRCS, and during disasters, even HUD. Do you
believe we could benefit from a cross-cut flood mitigation
budget that allows Congress to see how the different agencies
contribute to flood solutions, and pick the best responses and
pare back on the less-effective programs?
Mr. Stephen Ellis. Congressman Posey, I am all about more
data being available, and being able to understand how the $4
trillion is being spent across the whole Federal budget.
Certainly in this area where it is very critical, and we
throw a lot of money post-disaster, it is really important to
understand how those funds are being allocated. And we do have
different stages of disaster response.
Have a disaster relief fund that kicks in right after a
disaster. You have the Corps, once they get that they have
additional funds, right, immediately, and then they often get
more funds and supplementals, and then similarly to HUD. And
so, understanding how that money is being allocated increases
the confidence of the taxpayers that their money is being spent
wisely. And that is critical because we are appropriating such
huge sums. So, I think something like that would be a
tremendous asset, Congressman Posey.
Mr. Posey. Thank you very much.
Commissioner Ellis, what have been the flood mitigation
projects, all the promise of preventing flood damages? And so
adapting properties to reduce flood damages, building flood
control projects, and even moving people out of harm's way can
all help. Please tell us how Harris County approaches the flood
mitigation, and share with us how we could encourage others to
maybe do the same thing?
Mr. Rodney Ellis. Thank you, Congressman. We have done two
things in Harris County that I think the rest of the nation
should look at. One, with the money we put up, we did come up
with equity guidelines on how we are going to spend the money,
but it is challenging to follow them because we can't attract
as much Federal matchup as we would like to.
The other thing we did was we probably passed the strictest
building standards in the country. My county engineer says they
are the strictest, but I was in Florida at a conference and a
colleague challenged me on that. We called it Atlas 14. But you
have to build them higher. Now that we know, a 500-year flood--
I am 67, and I have lived through three 500-year floods in the
last 10 years, but it does drive up the costs of construction,
but it was the right thing to do.
And then, we tied funding to partners of the city, and
surrounding counties to adopting the same build expanders. And
so far, most of them have done that with strong bipartisan
support.
Mr. Posey. Smart. Thank you.
Mr. Mais, you represent our State insurance commissioners.
Can you assess for us how an enlarged role for private flood
insurance regulated by the States could improve our nation's
flood insurance, and how we should resolve the repetitive loss
of properties in moving to an enlarged private flood insurance
presence compared to the NFIP?
Mr. Mais. Thank you, Congressman. I appreciate the
opportunity to discuss this. And, by the way, if I could also
say that mitigation--just to throw my two cents in here--is
something that we, as State insurance regulators, are very
concerned with, and we are very supportive of. It is a bit like
my father used to tell me, you have to fix the roof before it
starts raining.
But we do think there is a huge, a significant role for
private flood insurance, and at the NAIC, we have been
collecting data and the role of private flood insurance has
been increasing. We do look forward to working with Congress to
enable an even greater role for private flood insurance.
And one way to do that, for instance, with the NFIP, if you
enable people to leave without losing their subsidies, so they
can test the market, or that they are able to get and
[inaudible] bring this proposal on the development fund for
time that they left the NFIP. All of this will help improve the
attractiveness of private flood insurance, and I think,
overall, reduce the cost of insurance.
Mr. Posey. Thank you so much. My time has expired. And I
yield back, Mr. Chairman.
Chairman Cleaver. Thank you.
The gentlewoman from New York, Ms. Velazquez, is now
recognized for 5 minutes.
Ms. Velazquez. Thank you, Mr. Chairman. And thank you for
this timely hearing.
Ms. Godreau-Aubert, I would like to address my first
question to you. Puerto Rico's CDBG-DR Action Plan has an
across-the-board prohibition for rebuilding in flood zones.
What type of problem does this present to LMI communities? What
alternatives are there? And what would a sensible relocation
plan look like?
Ms. Godreau-Aubert. Thank you, Congresswoman Velazquez, for
the chance to answer this question.
Different from other jurisdictions, Puerto Rico is an
island. So the impact of climate change, sea level rise has a
very direct impact on the people living, particularly in flood
zones, in coastal zones. These communities, for several
historic reasons, going back to slavery, are low-income and
Black communities which are deeply affected by across-the-board
prohibitions.
We are talking about 250,000 homes that are in flood zones
in Puerto Rico. Relocation is not possible within the geography
of Puerto Rico. If we don't have a sensible relocation policy
that, for example, includes an inventory of available housing,
that eliminates the discrimination against people with formal
titles, which is almost half of the population, and that also
accounts for climate migration, not only in the short term, but
also in the long run of the island.
Ms. Velazquez. Thank you. And Ms. Godreau-Aubert, as you
mentioned in your testimony and your previous answer, 69
percent of the inhabitants of Puerto Rico are homeowners, yet
many lack formal titles here, which makes it more difficult for
them to access FEMA aid. How was your organization able to help
homeowners overcome their lack of a formal title?
Ms. Godreau-Aubert. FEMA denied approximately 77,000
applications of families in Puerto Rico, and neglected
assistance snowballs and grows exponentially. What we are
seeing right now is that constant discrimination against people
with formal title, once again, hinders the rights of Black,
low-income communities, which, because of access to justice,
because of cultural patterns, and because the process is very
complex and slow, are not able to access assistance.
As I said in my--
Ms. Velazquez. Let me ask you, what other steps can FEMA
and HUD take to help make it easier for home owners without
formal titles to have their claims recognized?
Ms. Godreau-Aubert. FEMA regulations already state the
definition of owners that does not require registry or a title
deed. We need HUD and CDBG-DR programs to adopt this kind of
definition.
Ms. Velazquez. Okay. Thank you.
Mr. Mais, since 2017, we have reauthorized the National
Flood Insurance Program a total of 16 times on a short-term
basis. I have called for reauthorizing the program for as long
as 10 years. As you know, the Program is once again set to
expire at the end of September. Can you explain why a long-term
reauthorization of the NFIP, on a bipartisan basis, is so
important?
Mr. Mais. Thank you, Congresswoman.
And let me just say here, I am going to go back to the idea
of a mitigation plan, because what this does is it enables
people--this is what insurance is all about--we are going to
pay some now so that we can be sure if something happens, we
are covered. That is the way we, as insurance regulators, look
at various insurance programs, including the NFIP.
The NFIP, as you mentioned, has had a number of short-term
reauthorizations. I am a homeowner, and I actually am a
homeowner with an NFIP policy, and it makes it difficult to
plan. You just don't know what is going to happen, how long
this is going to be in place, and who should go after this.
So that reliance on short-term authorizations, or
reauthorizations, I think has created a tremendous amount of
uncertainty for consumers. And that includes businesses that
rely on flood insurance. And you also have to--or certainly we
keep in mind the fact--I have been in this business for a
while, and people don't understand that flood insurance
policies take effect after 30 days. It is hard enough
convincing people to get the policies. Thank you.
Ms. Velazquez. Thank you, Mr. Chairman. I yield back.
Chairman Cleaver. The gentlewoman yields back.
The gentleman from Wisconsin, Mr. Steil, is now recognized
for 5 minutes.
Mr. Steil. Thank you very much, Mr. Chairman. I appreciate
you holding today's hearing.
I have to say, though, I look forward to the Majority
allowing us to be back in person. Across-the-board in D.C., we
are spending money like drunken sailors, pretty darn
inefficiently. We can't even do it in person. And so, I hope
the Majority brings us back in person. I am excited to talk
about today's topic as well, albeit virtually.
So, let's dive in with the short amount of time. There has
been a lot of discussion surrounding the National Flood
Insurance Program reauthorization, and how are we going to
really ultimately keep rates in check. I am sympathetic to
homeowners who are concerned about their ability to bear higher
rates. And really, to me, that is why it is important when we
are looking at how we do this.
Now that we are talking about lowering risks, we heard Mr.
Mais talk about his support of mitigation funding, possibly
private flood insurance. I have seen some people's write-ups
here in their formal testimony, who support that as well, which
brings me to a pretty significant concern in the draft of the
NFIP reauthorization that is attached to today's hearing.
As I read this, it puts in place a 9-percent increased cap,
and in my reading of this, that applies to all property,
including second homes and severe, repetitive loss. And so, my
concern is that someone in Janesville, Wisconsin, is going to
be on the hook to subsidize somebody's second home on the
ocean, or some fancy pants vacation home, and we are putting
taxpayers in Kenosha, or Janesville, or Racine on the hook for
this. That is one.
And then two, when you set a flat cap of 9 percent, one of
my concerns is that we are going to discourage homeowners from
taking steps to mitigate themselves from high-risk properties,
in particular.
And so, Steve Ellis, if I can address a question to you in
particular, as it relates to a 9-percent cap for fancy pants,
second homes on the ocean--and I am not talking about people
who are struggling to get by; we are talking about people who
are buying second properties. Do you think that there is a
moral hazard being created by this draft legislation as
currently written?
Mr. Stephen Ellis. Absolutely, Congressman, I think that is
one of the issues that is true in flood insurance, regardless,
is that there are some moral hazard issues and not pricing risk
appropriately, and having subsidies that are already in the
program.
And I talk in my written testimony about tremendous cross-
subsidies that exist where you have people in--and I can't say
specifically in Janesville or Racine, but these are counties
with lower property values and lower deciles, actually the five
bottom deciles are actually subsidizing properties in the top
two deciles, and that is documented by the Government
Accountability Office. And having a 9-percent cap, which has
it, from what the cap was under the previous legislation, which
is 18 percent, is going to discourage some of the mitigation
activities, and is also going to stifle the private market,
which will be better for taxpayers to move some of this risk
off of the taxpayers and into the private sector, which is
eager to take on that risk, in many cases.
Mr. Steil. Yes. We have some beautiful property in the
State of Wisconsin. And I encourage you to come on up to our
State. But I can tell you, it is not the pricey property that
you are going to get in oceanfront, second homes in California,
along the coast, just from a cost standpoint.
So, I am concerned about putting Wisconsin taxpayers on the
hook for these second homes, along the coast for people who
should otherwise be able to bear that burden on their second
property.
To shift gears slightly, we are talking about the moral
hazard, if we can, Mr. Ellis. If we go back and just kind of
look over history, we see a significant shift of this risk to
the Federal Government. In my research, with Hurricane Diane in
1955, the Federal Government came in with about 6 percent of
the total cost; now you get up to Katrina, and you get to 50
percent; in 2008, the Federal Government gets up to 69 percent;
Superstorm Sandy in 2012, we are up to 77 percent. We can see
where the trend line is going here.
Can you share a little bit of your view here as to the
moral hazard of, we are putting all of this burden on the
Federal Government, what that does from a mitigation standpoint
at the individual, at the local, and at the State level?
Mr. Stephen Ellis. Everybody has to have skin in the game,
Congressman. And if you don't have that, then it is a
disincentive to actually do the mitigation, to do the hard
work. And we would certainly want to see States and communities
prepare for these inevitable disasters. We know they are going
to occur, and we should have a sliding scale of disaster
assistance, in our opinion. And then also have strings that are
trying to encourage States and localities to have their plans
in place and be ready to go right after the disaster ends.
Mr. Steil. I appreciate your feedback.
Mr. Chairman, I appreciate you having this hearing. I look
forward for all of us to be, hopefully, in person discussing
these important topics in the near future. And with that, I
will yield back.
Chairman Cleaver. Thank you, Mr. Steil.
The gentleman from California, Mr. Sherman, is now
recognized for 5 minutes.
Mr. Sherman. Thank you. I guess I am here just to epitomize
beachfront property in California. I think Mr. Steil has a
point that the Federal Government is absorbing more and more of
the costs of natural disasters. But if he thinks that is going
to change, I have been here for a long time, and I have never
seen more than a handful of Members vote against a disaster
relief bill.
I have seen some of the most conservative, wouldn't-pay-a-
penny-for-anything libertarians vote for disaster bills. And
so, it is in our interest to make sure that uninsured losses
are kept at a minimum, because whatever uninsured losses there
are--if it happens to just one or two people, they are going to
absorb the cost--but if it is a natural disaster that is in the
headlines, I don't think even the gentleman from Wisconsin is
going to walk to the House Floor and vote against the disaster
relief bill.
We have given local control on all of the most important
issues affecting housing. We now have a circumstance where, in
my city, it seems to cost about $700,000 to build an apartment
unit. We have building standards, where, if the building is not
resilient, it is as, as Mr. Steil points out, going to be the
Federal Government bearing the cost.
And then finally, there is one area that I think is
significant enough that we should override local control, and
that is the need to have recharging stations available,
particularly to those who live in apartment buildings. We can't
get people to buy electric cars if they can't recharge them at
home, and ``home'' for everybody is not a single-family house
with a three-car garage.
For an awful lot of Americans, it is a carport where the
landlord hasn't put in an electric charging station. So at
least if every apartment building and everything you paid for
parking structures at work have recharging, we might get to the
President's objective of electric cars.
I have a question for Mr. Mais. Most flood insurance
policies are, of course, underwritten by the NFIP. There are
more than 5 million property holders nationwide, and the NFIP
is the nation's largest single-line insurance with nearly $1.3
trillion in coverage. Unless reauthorized by Congress by
September 30th of this year, the authority to provide new flood
insurance will expire. And the NFIP's authority to borrow from
the Treasury will be cut from $30 billion to $1 billion.
Over 20,000 communities across the country participate in
the NFIP, and over 5 million policyholders rely on it. Can you
explain what happens to those communities and families who
would no longer have access to the National Flood Insurance
Program? And how would this lapse affect the communities in
which they live?
Mr. Mais. Thank you, Congressman. It is difficult for me to
project what will happen across the nation, but I can tell you
what we have heard over the past few years, as the NFIP has
been up or been close to not being reauthorized. And we go back
to that issue of uncertainty. People do need the certainty that
they will have the insurance coverage to protect what will be,
in many cases, their single most important asset. This is what
they are going to be passing down to their children.
And there is no doubt that there is a growing private
market over the past. In 2019, for instance, we had $526
million in direct written premium in the private market, which
is up $100 million from the year before, and the earned premium
was less than that, which means the market is growing. I think
that is just taking stock.
But what that tells us compared to the fact that the NFIP
had approximately, at its current rates, almost $3.5 billion of
earned premium in 2018, is that it does represent a significant
portion of the market. And that is why we are asking for that
long-term reauthorization.
Mr. Sherman. Thank you. The final comment I want to make
is, you can argue for this kind of flood insurance program, or
that kind of flood insurance program, but what you can't argue
is that doing it before the last minute is better for the
country. We don't want to take people into July and August not
knowing what their situation is, especially if they are trying
to sell their home. And I yield back.
Chairman Cleaver. Thank you, Mr. Sherman.
The gentleman from Texas, Mr. Taylor, is now recognized for
5 minutes.
Mr. Taylor. Thank you, Mr. Chairman. And I will echo my
colleague from Wisconsin's 1st District that I wish we were
meeting in person, particularly because I would get the chance
to greet in person my good friend and colleague from the Texas
Senate, Commissioner Ellis. It is great to see you here with us
today. I appreciate your insights and your expertise.
I wanted to go into something that I learned about in the
State legislature, this thing called actuarial soundness. So,
if you charge less than what you need to make a product,
eventually you go out of business, unless the government kicks
in some money.
I think I heard the number, $90 billion. Let's see, who
said that, that would be the Republican expert. Can you speak
to the--over what period of time has the Federal Government
kicked in $90 billion into the flood program?
Mr. Stephen Ellis. Sure, Congressman Taylor. The $90
billion is the Community Development Block Grant Disaster
Recovery Program. And that chipped in after Hurricane Andrew
and a couple of other storms, Omar and Ike in 1992, so
basically, from 1993 forward has been that $90 billion.
Mr. Taylor. So are we charging an actuarially sound flood
insurance premium at the present time?
Mr. Stephen Ellis. No, sir. The flood insurance program is
created to have built-in subsidies. If your structure was built
before the flood insurance rate map, or before the program was
created, then you have a subsidized rate. If the zones change
because of climate change or whatever, or a development nearby,
and you shift from being a lower-risk zone to a higher-risk
zone, you get to keep your rate.
The fact that the Program can borrow from the Federal
Government also is a significant subsidy, particularly
considering that it is underwater, and it has borrowed almost
$40 billion from the taxpayer, to date. So, it is not an
actuarially sound program. You could argue that was not the
intent initially, but we are in a different place than we were
in 1968. We have much better technology and soundness, and we
need to be developing and improving the program so it is not as
much of a burden on taxpayers.
Mr. Taylor. And I guess that is what I would ultimately
drive for, trying to create an actuarially sound program that
stands on its own, and that is in the interest of the
taxpayers, and is also in the interest of the rate payers. When
you set up an actuarially unsound program, eventually the
taxpayers get tired of paying for that, and they end up
ditching the ratepayers on the side of the road. And I don't
want to see that happen. I want to see a program that is
functional. But I think, mathematically, we set it up to be
non-functional, and I think that is going to take some work to
really work through that.
Ms. Godreau-Aubert, just on Puerto Rico, when I hear about
people owning properties without a clear title, my heart goes
out to those people. That is a really tough spot to be in. And
as a former State legislator, I kind of think, gee, that is
something that the Puerto Rico legislature should fix.
Do you need a Congressman from Texas to go and fix this for
you? I would hope that you guys were working on that in Puerto
Rico and you can ultimately solve this problem.
Ms. Godreau-Aubert. Hopefully, in fact, we used the example
from Texas to develop the sworn statement and to make the
lobbying process for the CDBG-DR alternative title declaration.
What we need is basic clear guidelines stating and mandating
local governments not to require formal titles. As I said, it
is basically a waste of disaster aid funds to be using this
money to try to push title clearance processes that may last
for years and have no results.
Mr. Taylor. And I guess my concern is that if the Federal
Government makes it easier for people without clear title to
get access, then it disincentivizes your legislature from
fixing this problem, which is obviously bigger than this,
right? This is one piece of a much bigger problem, because
there is the transfer issue, there are property and casualty
insurance issues, there are lending issues. And not having
clear title is a very small piece, unfortunately. It is
obviously enormous that the people have this problem.
And I am not in any way--as I said, I am very sympathetic
to this problem, but I worry that if we fix this particular
piece of it, okay, we don't have to worry about it. But really,
I think it is incumbent on the legislature in Puerto Rico to
actually go ahead and fix this. And I appreciate you following
Texas' example.
Mr. Ellis, it was great to see you.
Mr. Chairman, I yield back.
Chairman Cleaver. Thank you. The gentlewoman from Ohio,
Mrs. Beatty, is now recognized for 5 minutes.
Mrs. Beatty. Thank you, Mr. Chairman. I am glad to be here,
and glad to see everyone on Zoom. And like my colleague,
Congressman Steil, and I believe Congressman Taylor, I, too,
would like for us all to be in the room. So maybe if everyone
gets vaccinated, that would be helpful for our leadership to
move us back into that. I am a big proponent of the vaccination
for a whole lot of reasons, mostly based on data and
statistics.
But with that said, let me thank all of our witnesses for
being here today and providing their testimony.
My first question is for you, Commissioner Ellis. And thank
you for being here, and it's nice to see you again. I saw you
in the last Congress as you came before our Oversight and
Investigations Subcommittee.
We have heard about some of the devastation that has
happened across the country. And we know over the last years,
we have seen record-breaking floods, and fires, and hurricanes,
of untold suffering. And we know that affects the least of us
the most. We know that there is a national shortage already of
an estimated 7 million affordable rental homes for extremely
low-income renters across this country.
And the lack of affordable housing disproportionately
affects communities of color. The shortage is greatly
exacerbated when we have any one of these natural disasters.
For example, after the devastation brought by Hurricane
Katrina, the housing authorities of New Orleans reported having
close to 2,000 public housing units for low income people, and
that was 3,000 less than what they had expected prior to the
hurricane. That is why I strongly support Congressman Green's
priority for one-for-one replacement of affordable housing
units in his CDBG-DR proposal.
Commissioner Ellis, can you briefly describe for us any
issues that Harris County has had with replacing affordable
housing units after Hurricane Harvey?
Mr. Rodney Ellis. Thank you, Congresswoman, and it's good
to see you again.
We have had tremendous problems. Congressman Taylor and I
were in the legislature together in Texas, and Texas even had a
rule for low-income housing credits, when Congressman Taylor
and I were there, that your State senator and your State house
member had to sign off, and you would get credits towards
getting low-income housing credits if they signed the letter.
And on the Senate side, with Congressman Taylor's support,
we got rid of that. But on the House side, we couldn't. And it
is a big problem because of the, ``not in my backyard (NIMBY)''
issue. In fact, since I am no longer in the State Legislature,
I can admit, sometimes I would write a letter opposing low-
income housing credits, and then call the department head and
say, you don't have to put your name on the ballot, put it in.
And if they put that into law, you couldn't stop it, but it is
a big problem, because of that issue and the fact that most of
us around the country rely on the Federal Government, or
incentives by virtue of the Federal Government to do affordable
housing.
George Floyd is from the Cuney Homes right across from
Congressman Green's alma mater, Texas Southern University. It
initially was not built for Blacks, it was for Whites only, and
it is the oldest housing project in Houston. We have to face
issues on what we do there. You can't even have central air in
it because it is just so old.
But then the challenge is that plenty of developers want to
take it down. My mentor, Congressman Leland, put in Federal
legislation with, back then, Congressman Frost out of Dallas,
and Congressman Taylor, to block developers from taking over
affordable housing near downtown. But it is always a challenge
because of the NIMBY issue.
I hope that in addition to the legislation you made
reference to, Congressman Green and Chairwoman Waters,
obviously, and you, Mr. Chairman, as well have advocated, you
ought to put some incentives in that and get us to help on the
local level. When I was on the city council, we put up some
money, about $20 million every 5 years in the capital
improvement program. I am hoping my county does that as well.
As one of your colleagues made a reference to earlier, it
is all their money, but it is not fair for us to always put it
on you. We ought to take some of that heat for affordable
housing as [inaudible].
Mrs. Beatty. I am going to stop you, because I think my
clock is running down.
And I want to ask our witness, Ms. Poticha, can you briefly
explain the economic effects of a natural disaster on low-
income communities, as opposed to a beach town field, and this
is reflected on the [inaudible].
Ms. Poticha. Should I continue to answer, or--
Chairman Cleaver. Yes. Please proceed, Ms. Poticha, with
the answer.
Ms. Poticha. Okay, great. The economic implications of
disasters on low-income households are profound. Most low-
income households actually live in rental housing, so they are
at the whim of the apartment building owner, or the owner of
the home to retrofit these units. And, we really do need to get
much more proactive in the way that we think about addressing
climate change and the impacts on low-income households.
Mrs. Beatty. Thank you. And thank you, Mr. Chairman. I
yield back.
Chairman Cleaver. The gentleman from Texas, Mr. Green, is
now recognized for 5 minutes.
Mr. Green. Thank you very much, Mr. Chairman. You have
absolutely hit a home run with this hearing.
I am also very grateful to Mrs. Wagner, because she and I
have worked together on the CDBG-DR Disaster Relief bill, and
the CDBG-DR bill is something that we hope to get passed again.
We passed it in the House in the last session.
I thank you, Mrs. Beatty, for your very kind words. I
always appreciate being in hearings with you, and you spoke
quite well. I can compliment you for your many, your many ways
that you get things done. Thank you.
Now, let me talk quickly about a couple of things. The
first is, I have a commissioner in Fort Bend County who has
called something to my attention, and he has indicated to me
that in Fort Bend County, they have levees.
These are FEMA-certified levees, Mr. Chairman, and he
indicates that these levees protect them from flooding, and it
is his position, and I tend to agree with him, that if these
levees are protecting from flooding, and they are certified by
FEMA, he believes that the cost for the flood insurance should
be reduced, because the risk is being reduced by the levees,
and the cost should be directly proportional to the risk. If
the risk goes down, then the cost should go down.
So I am going to ask, Ms. Poticha, would you please give
some comments on this?
Ms. Poticha. I think that these are very good questions,
Congressman. And we should be modulating the cost and the
insurance coverage based on actual risk. I think often, we have
really underestimated the risk. We hear now all the time about
hundred-year flood zones and we are having floods in those
areas every 5 to 8 years.
So we have to not only update our information and make sure
that it actually takes into account the risk of much more
extreme and more frequent storms, but we also need to
understand that the old ways that we have been looking at this
are just not working anymore. Even in an area that might be
protected by a levee, we have seen those levees fail. So, we
should be really focused on the actual risks to the community
and ensure that it is protected.
Mr. Green. Thank you very much. Let me do this, Mr.
Chairman. I am going to offer for the record, a document, a
communique from this commission, Commissioner Ken DeMerchant,
who has some additional 12, 13 points that I think would be
worthy of our consideration. So, I would like to place this in
the record. And I would like to continue with another issue,
understanding that--
Chairman Cleaver. Without objection, it is so ordered.
Mr. Green. --there will be more that we will do and talk
about as it relates to the issue that he has called to our
attention.
Right now, Commissioner Ellis, you have had some concerns
with reference to the CDBG-DR funds getting to you. HUD has
recommended that we change the system. The HUD OIG has
indicated that we codify the process so that we don't reinvent
the wheel every time there is a disaster. And I would like to
get your response in terms of how codification could be of
great benefit to the recipients of the funds, if you would?
Mr. Rodney Ellis. Congressman, thank you. I think it would
be helpful as long as there is appropriate congressional
oversight of what we do, and making sure that in any guidelines
that are codified, the equity is replete as part of the
process. And equity has to be more than just a six-letter word.
Obviously, on my level we would prefer if you do a direct
allocation to us so we don't have to argue about the
administrative costs with our State partners, but the key is
guidelines that have equity.
And I will close with this: When HUD was created, LBJ
wanted the direct allocation, cities and counties wanted the
block grant approach, but oftentimes they have not, we have not
been as equitable in how we spend the money. The HUD money was
directed for the most vulnerable among us. That is why it was
created.
Mr. Green. Just as a quick follow-up, I am sure you are
concerned about the timely manner in which the funds are
received. That has been a problem, I think. And I agree with
you, direct allocation would work. We are attempting to put
together a means by which that can take place, and I believe
that it is doable. We have done it before. Hopefully, we can
put this into some sort of codified language and make it
permanent.
Finally, with reference to my next opportunity to talk
about this, I will yield back my time today. Thank you very
much.
Chairman Cleaver. Thank you, Mr. Green.
The gentlewoman from New York, Mrs. Maloney, is now
recognized for 5 minutes.
Mrs. Maloney. Thank you, Mr. Chairman. And thank you all
for your testimony on this very important topic. This hearing
touches on the intersection of two crises which are being felt
acutely in my City of New York: the climate crisis; and the
affordable housing crisis. Climate change is one of the single
most pressing threats facing New Yorkers, this country, and the
global community, and our most vulnerable communities are
bearing the brunt of the consequences.
As we look to building back better, we must do so with a
focus on climate justice and climate resiliency. For New York
City, that means investing in a green future for New York
City's public housing.
To celebrate Earth Day this year, I gathered with climate
activists and New York City Housing Authority (NYCHA) residents
to discuss efforts to invest in climate solutions while also
addressing our affordable housing crisis. The Green New Deal
for public housing introduced by my colleague, Ms. Ocasio-
Cortez, would help us achieve this by investing up to $180
billion over 10 years in sustainable retrofits that target
urgent maintenance repairs, improvements to residents' health
and safety, and the elimination of carbon emissions.
It also provides funding to electrify all buildings, add
solar panels, and secure renewable energy sources for all
public housing energy needs. In short, it will make Federal
housing cleaner, safer, and greener.
Ms. Poticha, do you believe that the Federal Government
should include carbon reduction and climate resiliency when we
invest in affordable housing?
Ms. Poticha. Thank you Congresswoman. I appreciate the
question. And I really appreciate your vision for a more
comprehensive set of solutions, because what we know--the
science tells us that even if we go full bore on making our
communities as resilient as possible, we are still going to be
facing the impacts of climate change, and affordable housing is
so essential to be a key role in our response, because these
are the people who are the most vulnerable. They are the most
vulnerable to harm when their home doesn't have tight windows,
air comes in, moisture builds, they get asthma, and they are
sent to the hospital.
But they are also more vulnerable due to an inability to
have a really stable home, so the more that we can connect
climate resilience and affordable housing as one issue that
really, I think, is the place that we should be.
Mrs. Maloney. As a follow-up, will the failure to invest in
climate resiliency lead to the loss of more housing units,
contributing to the affordable housing crisis in our nation?
Ms. Poticha. Absolutely. Thank you very much. I think that
what we have seen of the community is housing that has not been
kept up to standards. These are the most vulnerable households
to an extreme weather event, or hurricane, or a big wind event,
and if we start to lose those housing units, we are starting to
really see a catastrophe in our communities.
Mrs. Maloney. And in your written statement, you mentioned
two action items we can take to address equity housing and
climate resiliency: one, supporting community-led development;
and two, funding community ownership. I recently introduced the
Affordable Housing Preservation Act with Representative Omar,
and the legislation will establish a $200 million grant program
run by HUD that would support nonprofits in their efforts to
create and preserve affordable housing options by developing
cooperatives for low-income homeowners.
This legislation seems to align with your prescription of
supporting community-led development and funding community
ownership. Can you elaborate on how these two principles are
important for addressing climate equity and housing?
Ms. Poticha. Yes. Thank you for that question. Community-
led development and funding community ownership really help
ensure that communities can continue to reverse the legacy of
disinvestment and segregation from our policies, and instead,
allow people to lead the response in their own way. They want
the agency to be able to design their futures.
Mrs. Maloney. Thank you. My time has expired. I yield back.
Thank you so much, Mr. Chairman, for calling this important
hearing. And to all of the panelists, thank you.
Chairman Cleaver. Thank you, Mrs. Maloney.
Mr. Vargas of California, you are now recognized for 5
minutes.
Mr. Vargas. Thank you very much, Mr. Chairman. First, I
want to thank you for holding this hearing. I think it is been
an excellent hearing and very provocative in many ways.
I also want to thank, and I would be remiss if I didn't
thank General Stivers for his service, both to the Military and
to the Congress. You really are an asset and we will miss you
deeply. Everyone respects you deeply. Thank you.
I also would like to meet in person. And I again would echo
the same remarks as Mrs. Beatty, get vaccinated. Mr. Taylor,
tell your colleagues, please, get vaccinated so we can meet in
person again. I think it is important, and it is also science.
And since I mentioned science, it is interesting--for many
years, I have argued the point of climate change with my
colleagues on the Republican side, and I would always,
unfortunately, get to the point where they would make the point
about cows flatulating, and how that also is climate change.
Well, the reality is that it is not climate change, it is
an existential threat, and we have to do something about it.
And I think that now we are all taking it seriously--I hope we
are, and that we are going to do something about it. There is
also something else that came up here that I think we have to
take seriously, which is not building in areas that we know are
going to be prone to flooding and also fires. Fires haven't
been mentioned. Here in California, we are building more and
more in fire-prone areas, and it just does not make sense.
So, those are moral hazards when we allow people to do--and
I heard the testimony that in Puerto Rico and other places, it
is very poor people who are oftentimes in these floodplains.
And that is true, but also you have along the coast here in
California, as was mentioned, some very expensive homes that
should not have been built right along the coast.
In fact, oftentimes when I was on the coast, Commissioner,
I would vote against building the rock walls and all of these
other things, and these things that would prevent the houses
from falling into the ocean, because the reality is that the
cliffs erode, and that is how we get the sand to replenish our
beaches, so some of these things are just natural.
But I do want to ask, because I think it is an important
thing, why do we continue to allow the building in these
dangerous places? I think a lot of us would agree that it is
important not to do that. And it is controversial because on
both sides, there is reason to be against it or in favor of it.
Ms. Poticha, why don't I ask you that? Why do we allow
that, or should we?
Ms. Poticha. Thank you, Congressman Vargas. That is a
really great question. And it is probably the central conundrum
of this issue.
We have a tradition in the U.S. of local control, and
letting communities make their own decisions, and yet often the
science is telling us that the way that we built in the past is
not going to do us very well going forward. So, we really do
need to create incentives to move people out of harm's way, and
make them more resilient.
And I applaud your experiences on the California Coastal
Commission. I think it is a very challenging issue. And maybe
the only real way to do that is through creating a carrot that
is so sweet and tasty that it promulgates change.
Mr. Vargas. Okay. Commissioner Ellis, I don't know you, but
you are very well-respected, obviously, by everybody. That is a
tough question. How about you? I know that you know a lot of
places that, I imagine, people don't want to move, but they
probably should. What should we do?
Mr. Rodney Ellis. Congressman, I think it is a lack of
political will to do it. And obviously, if we talk about
neighborhoods where they have more money, it is more affluent,
with political clout, it is even more difficult, a separate
issue. But we run highways through neighborhoods and take out
poor areas all the time.
Mr. Vargas. Yes.
Mr. Rodney Ellis. There ought to be some equity there when
we do it, and there ought to be some consequences. The carrot
approach does work, but at some point you have to have a little
bit of a stick. And by the way, I represent the energy capital
of the world, and I know if we want to remain the energy
capital, that means we have to diversify.
Mr. Vargas. Sure.
Mr. Rodney Ellis. And the resources [inaudible] but, look,
it is a lack of political will, and we ought to stop it and we
have to take control.
Mr. Vargas. Would anyone else like to comment in my last 35
seconds?
Ms. Godreau-Aubert. Certainly. Thank you for the question,
Mr. Vargas.
In Puerto Rico, we are not asking for people to live in
risk zones. What we are saying is that relocation should never
be the first option. To clarify, the scope of CDBG-DR, if you
are a person living in a flood zone and you don't have a formal
title, circumstance is that usually come together, they have no
options, no incentives, no aid under CDBG-DR because of locally
imposed guidelines.
What we are saying is that mitigation is often unequal. So,
we are promoting tourism, hotel buildings, and at the same time
we are to saying to people, you can't live there. So, we are
asking for equitable mitigation and sensible relocation and
incentives policy.
Mr. Vargas. Thank you very much.
Mr. Stivers. Would the gentleman--I know the gentleman is
almost out of time. Would the gentleman yield for one second?
Mr. Vargas. I am out of time. But I will certainly yield to
you, General, of course.
Mr. Stivers. I would just ask, since you are the third
Member who has brought it up, that the Members of the Majority
go to the chairwoman and ask her to survey to see who has been
vaccinated. I don't think that any Members on either side of
the aisle on this committee have not been vaccinated.
And maybe we can meet in person again, if the chairwoman
would be willing to survey the Members to see who has been
vaccinated. I believe the Members on either side of the aisle
have in fact been vaccinated. So after having that come up a
couple of times, I figured I would just put in that plug. It is
the last--
Mr. Vargas. Will you come back for it, General?
Mr. Stivers. --time I can say something like that. I yield
back to the gentleman.
Mr. Vargas. Thank you very much. I yield back.
Chairman Cleaver. I will deliver those comments, Mr.
Stivers, to the chairwoman.
The gentleman from Florida, Mr. Lawson, is now recognized
for 5 minutes.
Mr. Lawson. Thank you, Mr. Chairman. And thank you for
holding this hearing.
My question is going to be for the whole panel, for each
one of them to comment on it. In 2018, the Trump Administration
did not activate the FEMA Disaster Housing Assistance Program
after Hurricanes Harvey, Irma, and Maria. The program provided
direct rental assistance and case management for lower-income
residents displaced by the disaster.
Sixty percent of fire victims were denied FEMA assistance
monthly--after Harvey, just 26 percent of the people who
applied for FEMA's small business administrative assistance had
been approved, according to a December 2017 survey. Navigating
assistance can be hard for anyone, but especially for
impoverished victims of a storm.
Should the FEMA Disaster Housing Assistance Program be
activated? And how can the government improve the approval rate
for low-income residents who have been negatively impacted by
the natural disasters? And that is for the whole panel. Does
anyone on the panel want to respond?
Mr. Rodney Ellis. If I may, this is Rodney Ellis out of
Houston, Harris County. I think, yes, it should be activated. I
think as much as you can do to encourage direct allocations to
those local communities so we don't have to fight with our
State partners over administrative fees--who should administer
it. And I think it would be wise to call us back in, and
explain what we do. Give us some deadlines, and if we don't
meet them, ask us to explain why.
Mr. Stephen Ellis. Congressman Lawson, just to respond to
your question, I am not super familiar with the program, but I
would say that when an affected governor goes to the President
and asks for a major disaster declaration, and it releases the
DRF funds, other programs in FEMA should be tapped. That is
something that would make sense to me.
But then also, I think that this is an area where, when you
talk about the approval rate and working with people, these are
people who, in the best of times, are going to have,
potentially, some difficulty applying for funds. And when you
put a disaster on top of it, it is a much more challenging
situation, and so I think that that is also a place where the
Federal Government has to step beyond and try to provide
assistance to people to apply for these funds and work through
them.
And lastly, just one thing that is kind of my separate
little axe to grind, and I will be very brief, is that when you
have an aviation disaster, we have a commission that goes and
looks at what happened, analyzes it, and comes out with a
report. We have major disasters, tens of billions of Federal
dollars, and there is no after-action, sort of review of this.
What should we learn? What should we apply? How can we make
sure that when another--like after Rita, you had Harvey. What
did we learn to make sure that we don't have that similar
situation and would do better responding to disaster the next
time around?
Ms. Poticha. Congressman, this is Shelley Poticha from the
Natural Resources Defense Council. And, yes, we should put
forth, unlock housing assistance, rental assistance. And let me
just put a little bit of data to the question. The impact on
wealth inequality in natural disasters is profound. Black
households lose an average of $27,000 in wealth after a natural
disaster, Hispanic households are estimated to lose $29,000 per
household, and at the same time, White households gained
$126,000 in wealth. And that really affects renters more than
homeowners. So, we have to put people at the center of this
response and center racial equity.
Ms. Godreau-Aubert. I think that open data is also a big
part of this process. One of you already said that knowing and
learning about the mistakes from the past could be incredibly
useful. In our case, learning reasons for denials, basis for
denials was extremely hard. And we have to present several
Freedom of Information Act (FOIA) requests just to realize that
ownership, or the lack of an official address were some
reasons.
Also, we think that in the aftermath of a disaster,
requesting people to access that application only using the
internet, or only using a telephone when there is no light and
no telephones--
Mr. Lawson. Mr. Chairman, I yield back. But this is a big
issue, especially in Florida, where we have a lot of
hurricanes, and something needs to be done about that. I agree
with Mr. Ellis, and everyone who has spoken on this. But this
is a big issue that we need to resolve. We do it for everybody
else, but we don't do it for people in need, losing all of
their income and everything else because of these hurricanes.
With that, I yield back, Mr. Chairman.
Chairman Cleaver. Thank you, Mr. Lawson.
The gentlewoman from Iowa, Mrs. Axne, is now recognized for
5 minutes.
Mrs. Axne. Thank you, Mr. Chairman. And thank you to the
witnesses for being here.
I am glad we are having this hearing actually, so that we
can better protect people's homes from disasters and climate
change, which of course my colleague just mentioned in his own
district, and we are seeing it here, of course, in Iowa.
The UN released a report earlier this year, finding that
natural disasters are occurring 3 times more often than they
were just 40 years ago. And in the last 2 years, boy, have I
seen homes in my district devastated by major flooding along
the Missouri River, and by a derecho that brought 140-mile-per-
hour winds here across Iowa and the Midwest. So, I tend to look
at resiliency in terms of a couple of categories: how we build
homes; and where we build them.
To start with how we build them, Ms. Poticha, can you talk
about some of the long-term benefits of using modern building
codes and methods?
Ms. Poticha. Thank you, Congresswoman. I appreciate that
question because we do want to see as a result of these
conversations, higher standards in the way that we build our
homes and buildings. And that is not only to make sure that,
say, the roof doesn't blow off when a big wind comes through,
but it is also to make sure that everyday living is healthier,
particularly for low-income households and renters.
We know that incidents of asthma are much higher in Black
and Brown low-income communities. When a building doesn't have
full enclosure, which actually also reduces energy use, and
helps us mitigate climate change, when we have water
infiltration, health incidents are much, much higher. So, there
are multiple wins when we start to think about improving our
building standards.
Mrs. Axne. Thank you for that. And I appreciate you
bringing up the health aspect of that. Do you possibly know how
much people could save just on energy efficiency improvements?
Ms. Poticha. Congresswoman, are you asking if they make
their home energy efficient, how much do they save?
Mrs. Axne. Correct. How much could the average family be
saving if we pushed for energy efficiency across this country
and individual's homes, any help with that?
Ms. Poticha. Thank you for that question. I think it varies
across the country, and I can get you much more detailed
information, but what we found is that households are saving up
to 20 percent of their monthly bills if they weatherize their
homes, which is a lot of money.
Mrs. Axne. That is a lot of money. Thank you for that. I
think it is pretty clear that there is a heck of a lot of room
for improvement there in helping American families reduce their
expenses through more energy-efficient homes.
I am wondering, Mr. Mais, are those improvements something
that is, or should be, included in insurance rates?
Mr. Mais. Thank you, Congresswoman. And yes, as insurance
regulators, we support whatever efforts can be made to
incentivize mitigation and to increase resilience, reduce the
damage that any catastrophe can cause. And this is something we
have been working on. As I mentioned, we had a recent workshop
with the Insurance Institute for Business & Home Safety (IBHS),
trying to look at cost-benefit metrics as we look at what it
takes to be able to have resilient housing.
It is important, I think, if we look at--forget Congress--I
think it is important for Congress to do what it can to
incentivize States, help FEMA to fully fund its mitigation
program, so take a homeowner, so a homeowner like myself, the
NAIC did a study, did a survey that was published at the
beginning of April, and they asked homeowners, just your
regular, average homeowners across the country; would they be
willing to invest their own money to protect against--to
mitigate any damages, to increase resiliency, and perhaps to
get a reduction in their insurance costs?
And if you take a look at it, you will be stunned at how
many homeowners wanted to do that. I think the need is there,
the understanding is there, and we, as insurance regulators,
are working with industry and working with academics to see
what we can do to ensure that these building codes are done as
strongly as possible to preserve the housing stock, and that
any savings are recognized by those households who actually
take advantage of resiliency measures.
Mrs. Axne. Thank you. And quickly, I want to get in here,
with my colleague, Mr. Lawson's, same kind of thinking there. I
have folks who are still waiting to make sure that they can get
their funding and get bought out in this district. Are there
ways that you all think we could better serve constituents
through FEMA?
Chairman Cleaver. Mr. Mais, the time is up, but go ahead
and respond.
Mr. Mais. Yes, if that was directed at me, I am perhaps not
the person to answer that as a State insurance regulator. That
is a Federal issue. It is an issue of Federal policy, and I
just don't feel it is within my purview as a State insurance
regulator to respond to it.
Mrs. Axne. Any other folks on the panel who would like to
respond?
Mr. Rodney Ellis. This is Rodney Ellis. Any additional
money that goes into the buyouts would be helpful. Voluntary
buyouts help to give the people a price that would incentivize
them to make a move.
Mrs. Axne. Thank you.
Chairman Cleaver. Thank you, Mrs. Axne.
The gentleman from New York, Mr. Torres, is now recognized
for 5 minutes.
Mr. Torres. Thank you, Mr. Chairman. The destruction of
property at the hands of climate change is as much a human
disaster as it is a natural disaster, decisions about the
design, construction, and siting often determine the extent of
the property damage caused by a climate event.
Take as an example, the varied impact of California's 2018
wildfires. In 2008, California established rigorous building
codes, and 51 percent of the properties built after 2008 went
undamaged during the wildfires. By contrast, only 18 percent of
the properties built before 2008 went undamaged.
Furthermore, according to a 2020 FEMA study, the adoption
of the International Building Code and the International
Residential Code saves $1.6 billion a year. Is there anyone on
the panel who knows what percentage of States and localities
have adjusted their building standards to meet the
International Building Code and the International Residential
Code?
Ms. Poticha. Congressman Torres, this is Shelley Poticha. I
would be happy to get back to you with that information. I
don't have it at my fingertips right now.
Mr. Torres. And should the government--now I have a policy
question--mandate adoption of the International Building Code
and the International Residential Code as a condition of
receiving Federal funds when it comes to the expenditure of
Federal funds on infrastructure, particularly housing?
Ms. Poticha. Are you directing that at me?
Mr. Torres. Yes.
Ms. Poticha. Okay. We need to get everyone to adopt these
more stringent codes, because not only is it essential to drive
down energy use in existing buildings, it is the most cost-
effective way of reducing climate pollution. And until we have
a common set of standards, and even the ability of some
jurisdictions to take further action beyond--I do work in San
Jose, which has adopted a very aggressive building code
standard, net zero, and we need to do this in order to meet our
climate challenge. I can't state how urgent this is.
Mr. Torres. And is there anything else that the government
can do to ensure the sustainable and equitable design,
construction, and siting of housing?
Ms. Poticha. I think that--
Mr. Stephen Ellis. May I respond? Oh, sorry.
Ms. Poticha. Please, go ahead, Steve.
Mr. Stephen Ellis. Congressman, I think that it really, if
you look at how much money is going out the door from the
Federal Government, there needs to be greater strings attached.
Essentially, the communities, and the homeowners, and the
States have to do their part as well, if they are expecting
Uncle Sam and citizens around the country to do their part.
I have no problem tying strings to Federal assistance, to
actually have stronger building codes, and build back in ways
that are more resilient and less vulnerable. I think that is a
critical area. And if a community or if an individual does not
want to do that, don't take the money.
Mr. Torres. But apart from the adoption of the
International Building Code, and the International Residential
Code, what strings should be attached to the expenditure of
Federal funds?
Mr. Stephen Ellis. Well, a lot of it comes down to planning
and being ready for these inevitable disasters. And the one
thing that you find is that if you already have a plan in place
of, okay, when the disaster occurs, we are going to buy out
these particular properties, or we are going to do this
particular mitigation action, you have an opportunity, a tragic
opportunity, but an opportunity, nonetheless, to remake your
community and make it less vulnerable.
So, we should have been requiring certain plans and
policies to be in place. And we should be rewarding communities
and States that do more, with more assistance, and trying to
drag along the laggards.
Ms. Poticha. If I could just build on that, I would also
say that communities need resources to engage with leaders in
the community to get ahead of a disaster and plan in a
proactive way. That is why I focus on community-led low carbon
development, because if you have an ability to get the
community engaged in order to prevent the damage that is likely
to happen, that can do a lot.
Mr. Torres. And then quickly, I don't know if I have time,
but if you could just--both HUD and FEMA have recovery funds
programs. What has been your experience with each of those
programs in terms of the ability to access the funds, and the
flexibility around the expenditure of those funds?
Commissioner, I will direct the question to you.
Mr. Rodney Ellis. Congressman, thank you. I was going to
say, on the International Building Codes, make sure that there
is flexibility. We got 50 inches of rain from Harvey in
Houston, and that may not be the case everywhere in the
country.
But, look, as much as you can give a direct allocation with
accountability, it helps. What we have run into in Houston is
us disagreeing with our State partners, and then sometimes, the
government actually wants extra money to balance that budget on
administrative fees. And then, we don't get administrative
fees, but we take it from low-income people, so we can
administer the program that somebody is looking over our
shoulder on. That is a great question.
Chairman Cleaver. Thank you, Mr. Torres.
The gentleman from Texas, Mr. Gonzalez, is now recognized
for 5 minutes.
Mr. Gonzalez of Texas. Thank you, Mr. Chairman.
My question is for Mr. Ellis. Mr. Ellis, the Fair Housing
Act (FHA) protects people from discrimination when they are
renting or buying a home, getting a mortgage, seeking housing
assistance, or engaging in other housing-related activities. In
the aftermath of disaster, several States have been sued over
their inequitable or discriminatory allocations of disaster
recovery funds, which were found to be in violation of the FHA.
For example, in 2014, the State of New Jersey settled for
$240 million after a HUD investigation found that Black and
Latinx residents were disproportionally denied recovery and
building assistance, and that the State had not conducted
sufficient outreach to communities of color, low-income people,
and people with limited English proficiency.
Mr. Ellis, how does Harris County work with the State of
Texas to ensure that fair housing planning and disaster
recovery planning go hand-in-hand?
Mr. Rodney Ellis. Congressman, thank you. It is a big
challenge. We have asked our legal department, we have tasked
them with making sure that they try and root out any vestiges
of discrimination. I mentioned earlier that in Texas, we still
have that requirement in State law that you give points based
on whether or not local officials sign off on putting housing
in certain neighborhoods.
So, it is a big problem, and a big issue there. I don't
think there is as much sensitivity on the State level as there
is in local communities. But look, I welcome the renewed
interest in fair housing on the Federal level, particularly
from the new Secretary of HUD. I think it is a good thing, even
for those of us who want to do the right thing, it is a
challenge in certain neighborhoods. And it is good when we can
say, ``You tell us we have to do it or we will get sued.''
Mr. Gonzalez of Texas. Yes. What does Harris County's
latest assessment of fair housing show are the biggest
impediments to fair housing, and where does the County work to
mitigate those issues in the administration of CDBG funds?
Mr. Rodney Ellis. Well, start with that requirement that
you have to get signoff from other elected officials. It is
also a big challenge for us in disputes with our State partners
on this one-bedroom, two-bedroom policy.
If you go in and a house had three bedrooms built, and
there are only two people left in it, it is the largest
investment that family has, and GLO is taking the position that
you can only go back with two bedrooms. The City of Houston
decided to put local dollars up to match it. We have not done
that at the County level.
We have to go back and appeal to HUD to overrule the GLO on
it. I mentioned earlier, when your colleagues asked, why were
they doing it--I think the chairwoman asked--I think it is
because they were worried there wouldn't be enough funds to go
around. But it is a big problem in Harris County and in other
areas.
Another big problem for us is protecting the investments
you all have given us in housing. We assume in our region that
we get about a billion dollars for the City of Houston, and a
billion dollars for the County for housing. We have assumed we
should get a comparable amount out of CDBG mitigation funds to
go and protect that housing. So, there are a lot of challenges
there. Any oversight you all give us, Congressman, and any
questions you all ask of HUD, and also of the GLO, will be
helpful.
Mr. Gonzalez of Texas. Thank you. And I yield back. Thank
you so much.
Chairman Cleaver. Thank you, Mr. Gonzalez. And let me thank
all of our witnesses for their testimony today. This has been a
very enlightening hearing.
The Chair notes that some Members may have additional
questions for this panel, which they may wish to submit in
writing. Without objection, the hearing record will remain open
for 5 legislative days for Members to submit written questions
to these witnesses and to place their responses in the record.
Also, without objection, Members will have 5 legislative days
to submit extraneous materials to the Chair for inclusion in
the record.
This hearing is now adjourned.
[Whereupon, at 2:07 p.m. the hearing was adjourned.]
A P P E N D I X
May 4, 2021
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