[Congressional Record Volume 140, Number 48 (Thursday, April 28, 1994)]
[Extensions of Remarks]
[Page E]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: April 28, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                  IMPROVING PUBLIC HOUSING ACT OF 1994

                                 ______


                        HON. COLLIN C. PETERSON

                              of minnesota

                    in the house of representatives

                        Thursday, April 28, 1994

  Mr. PETERSON of Minnesota. Mr. Speaker, today I am introducing 
legislation that will make reforms that are desperately needed in 
public housing. These reforms will help stop the waste and 
mismanagement of public housing funds and improve the living conditions 
for residents living in public housing.
  The bill, H.R. 4304 would do three things: abolish the one-for-one 
replacement rule; allow public housing authorities to use their 
development funds for new construction if it costs the same or less to 
renovate; and require HUD to turn a troubled housing authority over to 
private management if it does not improve within 5 years.
  The one-for-one replacement rule requires that for every public 
housing unit that is demolished, a replacement unit must be built or a 
housing certificate must be issued. The intent of the law--to preserve 
the stock of low-income housing--is important. But the law causes 
problems.
  It's a catch 22. Housing authorities can't demolish buildings unless 
they can replace every unit, but there isn't enough development money 
to replace the units. As a result, many buildings remain vacant or 
mostly vacant for years. They become a hazard to the neighborhood, 
increasing urban blight, drugs and crime in and around public housing.
  Millions of Federal dollars are wasted on these vacant units. The HUD 
inspector general has reported that since 1987, the Cuyahoga, OH public 
housing authority [PHA] has received over $47 million in HUD operating 
subsidies for vacant units. The Newark, NJ PHA received over $17 
million in operating subsidies for several buildings that were sealed 
from 1985 through 1992.
  The bill targets a second Federal policy which wastes Federal 
dollars. According to the General Accounting Office and the HUD 
inspector general, funds for new construction are scarce and 
competitive, and PHAs can only use their modernization funds to 
renovate, not rebuild, buildings. Many times this forces PHAs to do 
what many times is the most expensive option--to renovate rather than 
rebuild. In the Desire project located in New Orleans, LA it would have 
saved the Government at least $14 million to build from scratch. Due to 
current Federal law, the city could only use HUD funds for renovations 
even though two independent contractors had advised against it because 
the project's original structure is weak and it was built on a former 
swamp and dump. There are other examples like this one at PHAs around 
the country.
  The third problem the bill addresses is troubled public housing 
authorities. Troubled housing authorities fail to renovate thousands of 
vacant units while tens of thousands of people languish on waiting 
lists. Many of these PHAs are plagued by mismanagement, poor oversight 
and revolving door leadership. These problems hurt public housing 
residents who continue to live in deplorable and unsafe housing.
  While troubled PHAs represented only 1 percent of all authorities, 
they control 20 percent of the Nation's public housing units. They 
receive over a quarter of the $6 billion dollars in operating subsidies 
and modernization funds HUD allocates every year. Currently there are 
105 PHAs that are on HUD's troubled list--18 in large cities.
  In a recent audit, the HUD IG found that HUD's attempts to improve 
management and stop financial waste at these PHAs were ineffective. The 
IG called for HUD to ``act more decisively and forcefully to remove PHA 
management when all else fails.''
  In the 13 years between 1979 and 1992, 10 PHAs in major cities were 
continuously troubled. In only two of these cases did HUD replace the 
management of the housing authority. PHAs should be given no more than 
5 years to show improvements. If the local management cannot turn the 
situation around in that amount of time, then HUD should turn the PHA 
over to private management.
  In introducing my bill today my hope is that we can make fundamental 
changes which both Federal taxpayers and public housing residents 
deserve.

                          ____________________