[Congressional Record (Bound Edition), Volume 152 (2006), Part 6]
[Extensions of Remarks]
[Pages 8546-8547]
[From the U.S. Government Publishing Office, www.gpo.gov]




           SUPPORT FOR THE COMMUNITY DEVELOPMENT BLOCK GRANT

                                 ______
                                 

                          HON. SANDER M. LEVIN

                              of michigan

                    in the house of representatives

                        Wednesday, May 17, 2006

  Mr. LEVIN. Mr. Speaker, I rise to speak in support of a program that 
makes an enormous difference in the lives of all our constituents: the 
Community Development Block Grant, or CDBG, program.

  The CDBG program provides direct federal funding to local governments 
to make needed investments that improve the quality of life in our 
communities. These funds are used to prevent homelessness, reduce 
infant deaths, and provide youth enrichment programs. They are used to 
rehabilitate housing, to reconstruct residential streets, to help fund 
domestic violence shelters, to provide seniors with snow removal and 
lawn care assistance, and to fund important economic development 
initiatives.

  The President has again demonstrated that his budget priorities are 
upside down and out of step with our communities' needs by proposing a 
20 percent cut in formula funding to CDBG entitlement communities. But 
as the distinguished Ranking Member of the Appropriations Committee, 
Representative Obey, has pointed out, just looking at this year's 
proposal doesn't tell the whole story.

  The CDBG program is just one of many important domestic priorities 
that have been subject to a bizarre pattern in which, year after year, 
the President proposes draconian cuts, then Congress restores some of 
the funding and declares victory. However, the effect of this is that 
after several years, the draconian cuts are imposed. Since 2001, the 
CDBG program has already been cut by more than 22 percent in real 
dollars.

  Yet the President wants to reduce these vital resources to our local 
communities even further. According to a Congressional Research Service 
analysis that I requested, the CDBG entitlement communities in my 
district would stand to lose $2.25 million next year if the President's 
proposed funding cuts are adopted.

  As bad as these numbers sound, it is important to remember that there 
are real people behind them. During the April recess, two cities in my 
district, Warren and Southfield, Michigan, were kind enough to show me 
the impact that CDBG funds have had in their communities.

  They have used these CDBG resources to make a real difference in the 
lives of countless families. I was particularly impressed by the 
housing rehabilitation programs that represent the largest CDBG-funded 
program in both communities. These efforts, along with CDBG-funded 
investments in local parks and roads, have helped maintain vibrant 
neighborhoods in both cities. I ask that summaries of these programs be 
included in the record, but I want to share with my colleagues just one 
example of the powerful difference that CDBG funds have meant to 
individual families.

  Through its Residential Rehabilitation Loan Program, the City of 
Warren was able to help Michelle Amburgy and her son. I quote:

       Michelle Amburgy is a single mother employed by a catering 
     service. When her furnace stopped working before Christmas 
     and she and her son were living without heat, Ms. Amburgy did 
     not have the resources to purchase a new furnace. She says 
     she, ``. . . tried everywhere to get money for a furnace . . 
     .'' and was unable to find a program to help her. Luckily the 
     application she submitted to the City of Warren for a 
     rehabilitation loan was being processed and according to her, 
     ``. . . the City put a rush on it . . .'' in order to get a 
     new furnace so she and her son could have heat. In addition 
     to the furnace, various other improvements were done to her 
     home, including an update of the electrical and plumbing 
     systems which she says were definitely needed but she, ``. . 
     . never would have been able to afford on my own''.

  I hope that the House will remember Ms. Amburgy and her son, and the 
thousands of other families touched by the CDBG program when we 
consider funding for the CDBG program in the coming weeks.

      City of Warren Residential Rehabilitation Loan Program--CDBG

       The City of Warren has spent over $14,370,000 of the 
     Community Development Block Grant (CDBG) funding it has 
     received since 1982 on an owner occupied rehabilitation loan 
     program, which has assisted over 1,000 households. The low or 
     deferred interest loans are offered to eligible households 
     for necessary home improvements, including the correction of 
     dangerous structural defects and the elimination of unhealthy 
     living conditions. The program provides households who may 
     otherwise not be able to improve their homes and living 
     conditions with a means for doing so. For example, Michelle 
     Amburgy is a single mother employed by a catering service. 
     When her furnace stopped working before Christmas and she and 
     her son were living without heat, Ms. Amburgy did not have 
     the resources to purchase a new furnace. She says she, ``. . 
     . tried everywhere to get money for a furnace . . .'' and was 
     unable to find a program to help her. Luckily the application 
     she submitted to the City of Warren for a rehabilitation loan 
     was being processed and according to her, ``. . . the City 
     put a rush on it . . .'' in order to get a new furnace so she 
     and her son could have heat. In addition to the furnace, 
     various other improvements were done to her home, including 
     an update of the electrical and plumbing systems which she 
     says were definitely needed but she, ``. . . never would have 
     been able to afford on my own''.

       In order to qualify for the program, the household must 
     meet the definition of low or moderate income which is 
     adjusted based upon household size. For instance, the total 
     income for a household of two would have to

[[Page 8547]]

     be below $27,950 in order to be considered low income. If the 
     household qualifies as low income, payments on the loan are 
     deferred and no interest is charged. The total income for a 
     moderate income household of two would have to be below 
     $44,750. If the household is determined to be moderate 
     income, monthly payments on the loan are due at a 4 percent 
     interest rate. All loan payments and loan payoffs are placed 
     into a revolving account used to fund future rehabilitation 
     loans.

       The rehabilitation loan program not only provides funding 
     needed to make home repairs, it also provides expertise and 
     guidance through the home improvement process. The City's 
     inspectors perform a thorough inspection of the home and 
     determine all items which must be corrected in order to bring 
     the home into compliance with current housing codes, which 
     may include updating electrical, plumbing and heating 
     systems. This work must be addressed through the program. The 
     homeowner, in consultation with City staff, may also identify 
     other items which should be done in order to improve the 
     condition of the property. This may include the installation 
     of new windows, roofing, and modest kitchen and bath updates. 
     The City oversees the preparation of specifications, the bid 
     process and the actual rehabilitation to ensure that the 
     appropriate work is being done by qualified individuals.

       Arthur and Gloria Huard are a retired couple living in 
     Warren. Mr. and Mrs. Huard were faced with a leaking roof 
     that was causing structural damage to a portion of their 
     home. Mrs. Huard says that she and her husband are living on 
     a fixed income and, ``. . . didn't have the money to pay . . 
     .'' for a new roof and the necessary repairs to the home. She 
     and her husband received a rehabilitation loan from the City 
     of Warren which funded a roof and repair of the structural 
     damage. They were also able to have new windows installed and 
     their bathroom updated, including the replacement of flooring 
     which had been sinking. Mr. and Mrs. Huard were relieved to 
     have the work done and she says that they were, ``. . . very 
     pleased . . .'' with the work and that, ``. . . the men that 
     worked were very nice and helpful''. Mrs. Huard says that the 
     pension and social security they receive must go to pay 
     medical bills for her ailing husband and she's relieved that 
     the loan funds do not have to be repaid to the City until 
     they sell their home because they are retired senior 
     citizens.

       Many different types of households are assisted with the 
     City of Warren's CDBG funded loan program. Of the 62 
     households receiving loans within the past two years, 22 were 
     female head of household/not elderly, 19 were female head of 
     household/elderly, 7 were elderly/not female head of 
     household and 14 were classified as ``other''. For example, 
     Kevin and Kelly Sorlien are a young couple with three 
     children of their own. In addition, the Sorlien's also have 
     custody of Kelly's teenage sister and are responsible for her 
     care. Mr. Sorlien works full-time and Mrs. Sorlien takes care 
     of the children and has picked up a part-time job to help 
     support the family. The Sorlien's needed some improvements 
     done to their home and Mrs. Sorlien says they couldn't afford 
     to do them on their own. They applied for a rehabilitation 
     loan through the City because she says that, ``. . . the 
     interest rates were lower with the City's loan . . .'' than 
     they would have been able to get had they gone elsewhere for 
     a loan. With the City's loan, the Sorlien's were able to get 
     a new roof and siding and updates elsewhere in the home. Mrs. 
     Sorlien says that she, ``. . . loves the way my house turned 
     out . . .'' and was happy that the City was able to make this 
     program available to her family.


  Southfield Home Improvement Program (SHIP) CDBG Funded Residential 
                         Rehabilitation Program

       The City of Southfield, over the past 32 years, has spent 
     close to $7,000,000 of the Community Development Block Grant 
     (CDBG) funding on the Southfield Home Improvement Program 
     (SHIP). Since 1975, SHIP has assisted over 930 households. 
     The program is designed to assist low and moderate income 
     homeowners afford structural repairs to their home who may 
     not otherwise qualify for a bank loan.

       The loans we give range from small emergency repairs to 
     large scale structural problems. Although the average loan 
     amount is $15,000 it is not unusual to have a $25,000 loan on 
     one property which includes roof repair, plumbing, electrical 
     and new windows. The clients of SHIP range in income from 
     extremely low; those on fixed incomes due to age or 
     disability; and those families with moderate incomes who are 
     not classified as poverty stricken but don't have sufficient 
     income for amenities outside of basic living necessities.

       Sherry Crammer is a 59 year old widow of 16 years to a 
     Detroit police officer and has lived in her Southfield home 
     for 30 years. Her yearly income is $23,868 comprised 
     primarily of her husband's pension. As a result of poor 
     health issues, the homeowner incurred high medical bills and 
     credit card balances forcing her into bankruptcy. In the 
     early part of January 2006, the homeowner smelled a slight 
     burning odor coming from her furnace. Upon calling the gas 
     company, they red tagged the furnace after showing her the 
     plastic coating on the wires that were melting. The act of 
     `red tagging' means that the gas appliance is determined to 
     be a hazard and is not to be used until repaired or replaced. 
     The call from the homeowner was received by SHIP on a late 
     Friday afternoon. At 5 p.m. the Housing Inspector went to her 
     home to examine the crisis and to assist with the application 
     process. During this initial contact it was learned that she 
     had an unused wall space heater in a spare bedroom. The 
     Housing Inspector, with the help of some caring neighbors was 
     able to get the space heater running until a contractor quote 
     could be finalized that following Monday and a new furnace 
     installed. The homeowner was very grateful for all of the 
     personal attention and service. Before assistance from SHIP, 
     Mrs. Crammer had contemplated moving into a senior citizen 
     apartment. SHIP afforded her the opportunity to continue 
     living in the home she loved.

       The Andersons are a young couple who had in the past 2 
     years gotten married, bought a home in Southfield and started 
     their own landscaping business. The business was doing okay, 
     but there wasn't any extra money, most of the profits went 
     back into the business. The home needed a new roof as well as 
     electrical and plumbing repairs. With SHIP, the couple was 
     able to get a 3 percent interest loan that wouldn't require 
     monthly payments which would have added another strain to 
     their already tight budget. They will be able to defer 
     payment of the loan until the sale of their house. Without a 
     program like SHIP being available this couple would probably 
     not have qualified for a conventional loan and may have been 
     the target of predatory lenders.

       Mr. and Mrs. Willie Hunter are a family of seven. Their 
     income consists of a pension, supplemental security insurance 
     and child support. They just purchased their house a little 
     over a year ago and needed to make some improvements. 
     However, they quickly found out the house had more extensive 
     problems then their budget would permit them to fix, 
     including a leaking roof. In addition, while the Hunters were 
     in the process of replacing the kitchen floor, they 
     discovered under the linoleum and deteriorated subfloor that 
     they had structural floor framing problems. Application to 
     the Southfield Home Improvement Program addressed both of 
     these major issues for the Hunters. They are now able to sit 
     all together at the kitchen table to enjoy their meals under 
     a roof that doesn't leak.

       The focus of SHIP is ``make a difference in the life of a 
     family one house at a time''. Total home inspections are 
     performed to identify housing code violations as well as 
     abate any lead based paint hazards. The entire process is 
     coordinated by the equivalent of 1\1/2\ staff positions. 
     Staff prepares the specifications, reviews bids, communicates 
     with contractors and oversees the actual rehab work in 
     addition to processing the completed loan documents and 
     tracking an average of 800 active loans. The goal is to 
     complete 20-25 loans per year; making a difference one house 
     at a time.

       Note: Names have been changed to protect the privacy of 
     program participants.

                          ____________________