[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]



 
                         OVERVIEW OF THE FAMILY

                        SELF	SUFFICIENCY PROGRAM

=======================================================================

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                         HOUSING AND INSURANCE

                                 OF THE

                    COMMITTEE ON FINANCIAL SERVICES

                     U.S. HOUSE OF REPRESENTATIVES

                     ONE HUNDRED FIFTEENTH CONGRESS

                             FIRST SESSION

                               __________

                           SEPTEMBER 27, 2017

                               __________

       Printed for the use of the Committee on Financial Services

                           Serial No. 115-42
                           
                           
                           
                           
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]                  





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                 HOUSE COMMITTEE ON FINANCIAL SERVICES              
                 
                 

                    JEB HENSARLING, Texas, Chairman

PATRICK T. McHENRY, North Carolina,  MAXINE WATERS, California, Ranking 
    Vice Chairman                        Member
PETER T. KING, New York              CAROLYN B. MALONEY, New York
EDWARD R. ROYCE, California          NYDIA M. VELAZQUEZ, New York
FRANK D. LUCAS, Oklahoma             BRAD SHERMAN, California
STEVAN PEARCE, New Mexico            GREGORY W. MEEKS, New York
BILL POSEY, Florida                  MICHAEL E. CAPUANO, Massachusetts
BLAINE LUETKEMEYER, Missouri         WM. LACY CLAY, Missouri
BILL HUIZENGA, Michigan              STEPHEN F. LYNCH, Massachusetts
SEAN P. DUFFY, Wisconsin             DAVID SCOTT, Georgia
STEVE STIVERS, Ohio                  AL GREEN, Texas
RANDY HULTGREN, Illinois             EMANUEL CLEAVER, Missouri
DENNIS A. ROSS, Florida              GWEN MOORE, Wisconsin
ROBERT PITTENGER, North Carolina     KEITH ELLISON, Minnesota
ANN WAGNER, Missouri                 ED PERLMUTTER, Colorado
ANDY BARR, Kentucky                  JAMES A. HIMES, Connecticut
KEITH J. ROTHFUS, Pennsylvania       BILL FOSTER, Illinois
LUKE MESSER, Indiana                 DANIEL T. KILDEE, Michigan
SCOTT TIPTON, Colorado               JOHN K. DELANEY, Maryland
ROGER WILLIAMS, Texas                KYRSTEN SINEMA, Arizona
BRUCE POLIQUIN, Maine                JOYCE BEATTY, Ohio
MIA LOVE, Utah                       DENNY HECK, Washington
FRENCH HILL, Arkansas                JUAN VARGAS, California
TOM EMMER, Minnesota                 JOSH GOTTHEIMER, New Jersey
LEE M. ZELDIN, New York              VICENTE GONZALEZ, Texas
DAVID A. TROTT, Michigan             CHARLIE CRIST, Florida
BARRY LOUDERMILK, Georgia            RUBEN KIHUEN, Nevada
ALEXANDER X. MOONEY, West Virginia
THOMAS MacARTHUR, New Jersey
WARREN DAVIDSON, Ohio
TED BUDD, North Carolina
DAVID KUSTOFF, Tennessee
CLAUDIA TENNEY, New York
TREY HOLLINGSWORTH, Indiana

                  Kirsten Sutton Mork, Staff Director
                 Subcommittee on Housing and Insurance

                   SEAN P. DUFFY, Wisconsin, Chairman

DENNIS A. ROSS, Florida, Vice        EMANUEL CLEAVER, Missouri, Ranking 
    Chairman                             Member
EDWARD R. ROYCE, California          NYDIA M. VELAZQUEZ, New York
STEVAN PEARCE, New Mexico            MICHAEL E. CAPUANO, Massachusetts
BILL POSEY, Florida                  WM. LACY CLAY, Missouri
BLAINE LUETKEMEYER, Missouri         BRAD SHERMAN, California
STEVE STIVERS, Ohio                  STEPHEN F. LYNCH, Massachusetts
RANDY HULTGREN, Illinois             JOYCE BEATTY, Ohio
KEITH J. ROTHFUS, Pennsylvania       DANIEL T. KILDEE, Michigan
LEE M. ZELDIN, New York              JOHN K. DELANEY, Maryland
DAVID A. TROTT, Michigan             RUBEN KIHUEN, Nevada
THOMAS MacARTHUR, New Jersey
TED BUDD, North Carolina
                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on:
    September 27, 2017...........................................     1
Appendix:
    September 27, 2017...........................................    27

                               WITNESSES
                     Wednesday, September 27, 2017

Gornstein, Aaron, President and CEO, Preservation of Affordable 
  Housing........................................................     4
Lubell, Jeffrey, Director of Housing and Community Initiatives, 
  Abt Associates.................................................     5
Riva, Sherry, Executive Director, Compass Working Capital........    10
Siglin, Kristin, Senior Vice President, Policy, Housing 
  Partnership Network............................................     9
Spann, Stacy L., Executive Director, Housing Opportunities 
  Commission of Montgomery County................................     7

                                APPENDIX

Prepared statements:
    Gornstein, Aaron.............................................    28
    Lubell, Jeffrey..............................................    32
    Riva, Sherry.................................................    39
    Siglin, Kristin..............................................    50
    Spann, Stacy L...............................................    55


                         OVERVIEW OF THE FAMILY



                        SELF-SUFFICIENCY PROGRAM

                              ----------                              


                     Wednesday, September 27, 2017

             U.S. House of Representatives,
                            Subcommittee on Housing
                                     and Insurance,
                           Committee on Financial Services,
                                                   Washington, D.C.
    The subcommittee met, pursuant to notice, at 3:03 p.m., in 
room 2128, Rayburn House Office Building, Hon. Sean P. Duffy 
[chairman of the subcommittee] presiding.
    Members present: Representatives Duffy, Ross, Posey, 
Luetkemeyer, Stivers, Rothfus, Zeldin, Trott, MacArthur, Budd; 
Cleaver, Beatty, Kildee, Kihuen, and Gonzalez.
    Chairman Duffy. The Subcommittee on Housing 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 the subcommittee may 
participate in today's hearing for the purposes of making an 
opening statement and questioning the witnesses.
    Today's hearing is entitled, ``An Overview of the Family 
Self-Sufficiency Program.''
    The Chair now recognizes himself for 5 minutes for an 
opening statement. I want to welcome our witnesses, our 
members, and our audience here today for our Housing and 
Insurance Subcommittee hearing on the Family Self-Sufficiency 
Program (FSS).
    As we start to look at how to reform the housing finance 
system--we are going to do that this fall--we also want to look 
at programs that help those who cannot afford to purchase a 
home and to utilize programs such as the the Family Self-
Sufficiency Program to reduce our dependency on welfare 
assistance and rental assistance that is provided by the 
Government.
    We are joined by five great witnesses, each of whom work in 
a capacity with this program, and we are looking forward to 
their insightful commentary and the advice they have for this 
subcommittee.
    The Family Self-Sufficiency Program is focused on helping 
families who are in public housing, Housing Choice Voucher 
Program participants, residents of HUD-assisted housing, and 
residents of the Project-Based Rental Assistance Programs.
    The goal is to utilize a number of services coordinated 
through the program to help families with individual training 
to increase their employability and become less dependent on 
government assistance. These services can include basic 
education, childcare, transportation, education, job training, 
employment counseling, financial literacy training, mental 
health referrals, and home ownership counseling.
    While receiving these services, an interest-bearing escrow 
account is established for the family that can be used for any 
purpose once the family graduates from the program. The Family 
Self-Sufficiency Program is administered by the public housing 
authorities who work with a program coordinator committee that 
identifies partners, both public and private, for the operation 
of the program.
    Partners may include workforce investment boards, local 
governments, and local departments of health, just to give a 
few examples. These families generally enter into a 5-year 
contract of participation that incorporates individual training 
and a service plan. The service plan serves as a guideline of 
goals and steps the family must make in order to graduate from 
this program.
    Through a Family Self-Sufficiency coordinator, they receive 
supportive services needed to achieve economic self-
sufficiency, increase their employability and income, and move 
towards independence from the public housing system and towards 
home ownership.
    In addition to the help families receive in supportive 
services, an interest-bearing account is set up. The difference 
between the initial rent and the increased rent due to 
increased income goes into to the escrow account each month.
    The escrow account can then be accessed by the family for 
any reason once the program is completed. So here you have a 
family who has gone through a program. They have the training. 
They are self-sufficient, and they have a pot of money that 
they can potentially use to put down on a house. Or they can 
get a new or a used car that can effectively get them to work. 
It is a program that actually makes a lot of sense.
    So for the program to be completed, these families must 
comply with the lease, be welfare-free for 12 consecutive 
months, and the head of the family must seek and maintain 
employment.
    There are a lot of conversations we have about the programs 
that come through this committee and how effectively they work, 
but I think this is one where you look at providing people 
services and moving them from dependence to independence, and 
giving them that hand up that they need to get there makes a 
lot of sense.
    And again, I look forward to hearing from this panel on how 
we can take a new look at the program. What are the bright 
spots of the program? How is it working well? And what can we 
do differently to maybe make some tweaks or changes to the 
program so we can help a few more people?
    If it works for some, maybe we expand that small number and 
be able to grow it to a much larger number. So how do we take 
lessons learned, good and bad, and make improvements that can 
help more people? I am grateful for your participation, and I 
look forward to your testimony.
    And with that, I now recognize the ranking member of the 
subcommittee, the gentleman from Missouri, Mr. Cleaver, for 5 
minutes.
    Mr. Cleaver. Thank you, Mr. Chairman. My mother actually 
enrolled in Midwestern University when we were still living in 
public housing. I think I was in the sixth grade when she 
enrolled in Midwestern to pursue her degree in early childhood 
and elementary education. Everyone can't do that and is not 
going to be expected to do that.
    And so I would have to declare that I think that the Center 
On Budget and Policy Priorities was absolutely right when they 
proclaimed this program as HUD's best-kept secret for promoting 
employment and asset growth. I was mayor--to fast forward--of 
Kansas City when George H.W. Bush signed this into law in 1990.
    There was obviously going to be some apprehension about the 
program, but overall I think that individuals who have 
successfully completed the program after 5 years of 
participation, and they receive the funds to use for various 
jobs or housing needs, prove this program to be successful.
    I welcome the opportunity to hear from those of you who are 
kind enough to come in and provide us with testimony about the 
program. We are still waiting on some results of a 
comprehensive national assessment, individual experience in 
administrating and participation in the program.
    And I know that my longtime friend and colleague, Senator 
Roy Blunt, has introduced a bill over in the Senate, the Family 
Self-Sufficiency Act. And this bill, if approved, would make 
important improvements to the program including the merging of 
housing choice vouchers, the FSS program and Public Housing, 
FSS program into--into one, expanding the scope of supportive 
services and allowing project-based rental assistance residents 
to be eligible.
    I plan to introduce a House version of that same bill 
shortly. Senator Blunt and I have had conversations about this 
bill, and both of us are committed to trying to get a bill to 
the President's desk.
    So Mr. Chairman, thank you for holding the hearing. I know 
this is not one of the more sexy issues to come up before the 
committee. I noticed the empty seats and people are not--
there's no popcorn or anything.
    I know we will try not to put you to sleep so we would--I 
am going to ask that all of you witnesses to please put an 
extra ounce of energy into your responses as we move through 
this hearing. Thank you so much.
    Thank you, Mr. Chairman.
    Chairman Duffy. The gentleman yields back. I'm looking 
forward toward a popcorn-filled, exciting hearing today.
    So with that, let us welcome our witnesses. First, we have 
Mr. Aaron Gornstein, the president and CEO of Preservation of 
Affordable Housing. And our next witness is Mr. Jeffrey Lubell, 
director of housing and community initiatives at Abt 
Associates.
    We then have Mr. Stacy Spann, executive director of the 
Housing Opportunities Commission of Montgomery County. And then 
we have our fourth witness, Ms. Kristin Siglin, senior vice 
president of policy at the Housing Partnership Network. And 
finally, last but not least, we have Sherry Riva, founder and 
executive director of Compass Working Capital.
    In a moment the witnesses are going to be recognized for 5 
minutes each to give an oral presentation of their testimony. 
And without objection, the witnesses' written testimony will be 
made a part of the record.
    Once the witnesses have finished their presentation, each 
member of the subcommittee will have 5 minutes within which to 
ask our panel questions.
    And so with that, Mr. Gornstein, I now recognize you for 5 
minutes.

 STATEMENT OF AARON GORNSTEIN, PRESIDENT AND CEO, PRESERVATION 
                     OF AFFORDABLE HOUSING

    Mr. Gornstein. Good afternoon, Chairman Duffy, Ranking 
Member Cleaver, and distinguished members of the subcommittee. 
Thank you for the opportunity to testify regarding the Family 
Self-Sufficiency Program, or FSS. I am Aaron Gornstein, and I 
serve as the CEO of Preservation of Affordable Housing, or 
POAH.
    We are a private, nonprofit organization whose mission is 
to preserve and create affordable homes that support economic 
security. Since its founding in 2001, POAH has preserved or 
built more than 9,000 apartments in 9 States and the District 
of Columbia.
    We believe that access to affordable housing is a crucial 
step in overcoming the challenge of poverty. But we also know 
that stable housing is only one part of the solution. POAH is 
committed to using our housing as a platform for the delivery 
of support services like onsite after-school programs to boost 
educational achievement, budgeting programs to maintain 
tenancies, and job training to help residents increase their 
earnings.
    That is why POAH was one of the first private owners of 
HUD-assisted housing to adopt FSS. Last year we launched the 
program at 4 sites, and then expanded to 7 this year with 1,100 
eligible households. As the ranking member may know, we just 
launched at Hawthorne Apartments in Independence, Missouri, for 
example.
    After 18 months, the program's early results are very 
encouraging. We have enrolled 30 percent of our eligible 
households, which is 6 times the national average.
    At one of our original sites, 65 percent of the target 
households are engaged and working towards earnings and savings 
goals. We have already seen an average increase in earned 
income of 14 percent. The percentage of participating 
households who are employed has increased by 19 percent. And we 
have had three households graduate from the program by reaching 
their self-sufficiency goals and ending receipt of TANF 
assistance.
    We attribute this early success to three key factors. 
First, our program is implemented by very committed and well-
trained property managers and a highly effective service 
partner, Compass Working Capital. And you will hear from Sherry 
towards the end of this panel.
    Second, we use a site-based service model allowing 
participants to access financial coaching, workshops, and other 
resources where they live. And third, the HUD staff have been 
fully committed to making the program successful. We also 
appreciate Secretary Carson's personal interest in the FSS 
program.
    Finally, I want to suggest a few recommendations. First, we 
are hopeful that Congress will create permanent authority for 
FSS in privately owned assisted properties. The lack of 
permanent authority means that owners face the risk that their 
program may lapse in any year, leaving them unable to deliver 
on the commitments they have made to participating families.
    And second, we encourage Congress to clarify that the 
escrow incentive should stay in place until a resident reaches 
80 percent of area median income, rather than the current 50 
percent cutoff. The current limitation prevents the program 
from helping some residents climb the last few rungs on the 
ladder to economic security.
    POAH strongly supports S.1344, which Congressman Cleaver 
mentioned, a bipartisan bill introduced by Senators Blunt, 
Reed, Scott, and Menendez, because it responds to the 
opportunities I have mentioned and makes a number of other 
important improvements to strengthen the program. And we 
certainly hope the House will introduce legislation that 
mirrors those important provisions.
    In conclusion I reiterate POAH's conviction that the FSS 
program is a very promising tool that private owners can use to 
help residents increase earnings, grow savings, and reduce 
dependency on public assistance.
    We would be pleased to work with the subcommittee on any 
improvements and enhancements to the program, and I thank you 
for giving me the opportunity to testify.
    [The prepared statement of Mr. Gornstein can be found on 
page 28 of the appendix.]
    Chairman Duffy. Thank you, Mr. Gornstein.
    The Chair now recognizes Mr. Lubell for 5 minutes.

STATEMENT OF JEFFREY LUBELL, DIRECTOR OF HOUSING AND COMMUNITY 
                  INITIATIVES, ABT ASSOCIATES

    Mr. Lubell. Thank you. Good afternoon, Chairman Duffy, 
Ranking Member Cleaver, and distinguished members of the 
subcommittee. Thank you for the opportunity to testify 
regarding the FSS program.
    My name is Jeff Lubell, and I am the director of housing 
and community initiatives at Abt Associates. We are a mission-
driven research and consulting firm based in Cambridge, 
Massachusetts, that conducts program evaluations, performs 
research, and provides technical assistance and consulting 
services on a wide range of social programs.
    I have been researching and writing about FSS for about 20 
years. Count me in the camp who opens up the popcorn when 
something new comes out about FSS. And Ranking Member Cleaver, 
I appreciate the metaphor there.
    I would like to cover three main things: first, to just 
elaborate a little bit more on how the program works; second, 
to summarize what we know from research about FSS; and third, 
to quickly identify some of the steps that HUD has taken in 
recent years to improve the program.
    So as has been mentioned, FSS was signed into law by the 
first President Bush. It has enjoyed a long history of 
bipartisan support over the years. It has three main pieces. 
One is stable, affordable housing. You need that to be able to 
focus on getting and keeping a job but that is not enough.
    The second piece is case management or coaching to help 
participating families achieve their career and financial 
goals. And here I just want to emphasize that this is a very 
cost-effective approach. It is not about duplicating services. 
It is about linking families up to services that exist in the 
community.
    The third part is a financial incentive for families to 
increase their earnings in the form of an escrow account that 
grows as their earnings grow. Basically, everybody in 
subsidized housing pays 30 percent of their income for rent.
    But if you are in this program, an amount that is equal to 
the increase in rent that is attributable to the increase in 
earnings goes into this escrow account. And you get that money 
if and only if you succeed in graduating from the program or if 
you qualify for an interim disbursement, like if your car 
breaks down and you need help getting it repaired so you can 
get to work.
    This is important because it helps people get used to 
paying higher rent, which is an important part of ultimately 
transitioning to private market housing. To graduate, you have 
to achieve the goals that you set out, and you have to become 
employed, and you have to get off of welfare assistance. All of 
those things, I think, are things that we would all support.
    On balance, the research evidence is positive. HUD has 
funded two national studies that examined the growth of 
earnings of FSS participants over time, and both found that 
earnings grew substantially.
    The most recent study found that after 4 years, about a 
quarter of the families who graduated from FSS, their annual 
earnings had increased from an average of $20,000 in 2006 to 
$33,000 in 2009. That is a $13,000 increase, and it was not a 
particularly strong period for the economy. And they had about 
$5,294 on average in their escrow accounts.
    Another quarter were still enrolled in the program and had 
experienced meaningful gains in earnings and hours worked and 
had escrow balances of about $3,500. They hadn't graduated 
because the program is a 5-year program with an opportunity for 
2 years of extension, so that is partly what is going on there.
    There were families who were no longer in the program. We 
can talk about that. It doesn't work for everyone, but it works 
for a large share of people.
    Unfortunately, there was no control group for this study, 
and that is really important. You need a comparison group in 
order to be able to say something definitive.
    HUD has commissioned a randomized control trial. The early 
2-year results from that trial are expected later this year or 
early next year. But remember, FSS is a 5-year program. Those 
early results are only going to cover 2 years. So we are not 
going to have long-term outcomes for many, many years to come, 
but stay tuned. It is going to be an important study.
    Now, there have been a number of local evaluations. One of 
them is something that we just conducted of the Compass Working 
Capital programs in Cambridge, and Lynn, Massachusetts, that 
they administer in partnership with the housing authorities. 
And that looked at results after 40 months and were generally 
very positive.
    Specifically, when we compared the results for FSS 
participants against the comparison, we saw that the Compass 
FSS participants had earned $6,305 more. Their annual earnings 
had increased by $6,000. That is about 30 percent. And their 
annual welfare income had declined by $500.
    They also had improved credit scores. They had reduced debt 
levels, and reduced credit card and derogatory debt. I can talk 
more about it, but I am running out of time, and there are 
other studies I am happy to talk about, including one in New 
York City.
    I just want to emphasize quickly before I stop that HUD is 
really investing in trying to make this program better. We 
worked with them to develop a guidebook of promising practices 
based on the experiences of a number of FSS practitioners 
around the country. That came out along with an online 
training.
    We are also working with them on a system for measuring 
performance, a performance measurement system that is very 
close to coming out. It is nearly done and that will help 
ensure that local programs are accountable for their results.
    I look forward to the opportunity to answer any questions 
that you may have. Thank you.
    [The prepared statement of Mr. Lubell can be found on page 
32 of the appendix.]
    Chairman Duffy. Thank you, Mr. Lubell.
    Mr. Spann, you are now recognized for 5 minutes.

   STATEMENT OF STACY L. SPANN, EXECUTIVE DIRECTOR, HOUSING 
         OPPORTUNITIES COMMISSION OF MONTGOMERY COUNTY

    Mr. Spann. Good afternoon, Chairman Duffy, Ranking Member 
Cleaver, and members of the subcommittee. Thank you for the 
opportunity to testify.
    My name is Stacy Spann, and I am the executive director of 
the Housing Opportunities Commission (HOC) of Montgomery 
County, in Montgomery County, Maryland.
    Our housing commission is the largest provider of high-
quality, amenity-rich, affordable housing to low- and moderate-
income households in our county. And as a designated public 
housing agency, we are serving approximately 13,800 households 
through all of our housing programs, including administration 
of the voucher program as well as other Section 8 programs.
    We also operate non-Federal affordable housing programs as 
well as finance and develop affordable housing units throughout 
our county. In our role as housers, we take great pride in the 
enrichment of programs and supportive services we are providing 
to connect our customers and helping folks reach their fullest 
potential.
    HOC is delivering robust workforce and education 
programming for adults and youth, including our Fatherhood 
Initiative, a suite of educational opportunities for adults and 
youth, we call HOC Academy. And in addition to HUD's FSS 
program, we are working hard to transform lives by providing 
career development support.
    The participants that we are working with are receiving 
comprehensive case management and service connections that 
support them in gaining and improving employment through one-
on-one assessments, goal-setting, referrals, skills training, 
and education.
    Since HOC's FSS program began in 1993, we have graduated 
938 participants from the program, and it has actually evolved 
significantly since we began. In 2015, we had a shift in 
leadership and took the opportunity to examine our program, 
look inward, and really figure out how we could administer the 
program better.
    We wanted to ensure that enrolling customers in our FSS 
program and guiding them through the process was not just pro 
forma. We are not interested in simply checking the box and 
tallying the numbers. We took a step back and asked ourselves, 
what are we doing to help our customers achieve progress?
    Are we requiring people to take meaningful strides toward 
self-sufficiency in order to graduate? And we understand that 
making a decision to change your life is difficult.
    As an agency, what we wanted to do was be certain that we 
are giving our customers our best effort to do this, this 
personal and extremely deep work. If participants were 
graduating only to find that they were accessing emergency 
rental assistance programs or facing eviction just a few months 
later, then we are clearly not doing our jobs.
    So in taking the time, we actually decided to re-tool the 
program in its entirety. And in fact, the case managers are now 
the persons who are responsible for working with families from 
the start to the end. And when they are coming up for 
recertification, our folks are actually doing that work as 
well.
    Unfortunately, we lost some individuals, but what we gained 
was real quality in the group of individuals that we are 
working with. We reopened our program, and just last week, on 
the 21st, we celebrated our gradation.
    And there we were celebrating the accomplishments of 63 FSS 
graduates. Where 52 percent of those graduates were unemployed 
at enrollment, 100 percent were employed by graduation, having 
at least 12 consecutive months of employment.
    And as a group, the average earned income of the 
participants quadrupled from $8,000, a little over, to about 
$37,393 annually. So that is a huge increase, but we have more 
work to do.
    Through our mortgage programs, our own homeownership 
initiatives, we are able to support families. And while our 
graduates are accomplishing much, it is little as compared to 
their peer group in Montgomery County where the average income 
is over $100,000. That gap is significant. So we have miles to 
go.
    I wanted to take, in my last seconds, an opportunity to 
thank you and say, while this is difficult and challenging 
work, authorities, agencies who are doing the work should not 
be penalized when they take a step back and really examine how 
they are meeting the customers' needs.
    And so if there are any improvements to be made, certainly 
I am happy to work with this august group on the panel, as well 
as those at HUD.
    The improvement ought to be that every single family can't 
do the same work, the same way. Every single family is not 
engaged the same way. And unfortunately, there is no one-size-
fits-all in this program. Thank you very much.
    [The prepared statement of Mr. Spann can be found on page 
55 of the appendix.]
    Mr. Ross [presiding]. Thank you, Mr. Spann.
    Ms. Siglin, you are now recognized for 5 minutes for your 
opening statement.

  STATEMENT OF KRISTIN SIGLIN, SENIOR VICE PRESIDENT, POLICY, 
                  HOUSING PARTNERSHIP NETWORK

    Ms. Siglin. Good afternoon. I am Kristen Siglin, senior 
vice president of policy at the Housing Partnership Network 
(HPN), a business collaborative of nearly a hundred nonprofits 
that develop and finance affordable housing and community 
development projects in all 50 States.
    HPN members work together on businesses that make them more 
efficient and effective at delivering affordable housing. For 
example, HPN members together own a property and casualty 
insurance company that insures their apartments.
    HPN members also work together on public policy and learn 
from each other, which is what leads me to FSS. In 2014, two 
HPN members, Preservation of Affordable Housing, which you 
already heard from, and the Caleb Group, approached me and said 
that they wanted to offer FSS to their residents.
    At the time, FSS could only be administered by housing 
authorities for public housing residents, or voucher holders. 
But FSS is a very intuitive model that makes a lot of sense. It 
combines the three elements you have heard of: stable, 
affordable housing; financial coaching; and an escrow account 
to help the residents build assets.
    So in 2015 the appropriations committee, with some support 
from members of this committee, agreed to open up the FSS 
program to Project-Based Rental Assistance. When the law was 
changed, these HPN members, who had already been thinking about 
this and wanting to do this asset building work with their 
residents, got to work.
    And you have already heard from POAH, so I will talk about 
the other HPN member, the Caleb Group, which actually worked 
with Compass Working Capital on the coaching piece of the 
project.
    The Caleb Group owns 2,000 units of affordable housing in 
four States: Massachusetts; Connecticut; New Hampshire; and 
Maine. And their first FSS projects were in Willimantic, 
Connecticut, and another one in Gloucester, Massachusetts.
    And the residents have not completed their 5 years yet, yet 
of the 34 families who have began the program, already 5 of 
them have graduated. Four of those families created escrow, and 
the average escrow was $8,543. So that is significant.
    Three of them used that escrow to buy a home. The CEO of 
the Caleb Group, Debbie Nutter, e-mailed me and said, ``The 
major point is how satisfying it is to show folks how they can 
make the leap.'' That is what she wanted me to tell you.
    There are two important points to make about FSS. One is 
that the program is voluntary. Housing authorities and project-
based owners choose to offer it or not, and residents choose to 
participate or not. And I think this aspect, that it is a 
coalition of the willing, makes it an effective program.
    The other thing is it is very small in the universe of HUD 
programs. According to the latest figures from HUD, there are 
72,000 families currently enrolled in FSS. So if if you find 
this model appealing, there is something you can do to help: 
Introduce and pass legislation similar to the Senate 
legislation introduced by Senator Roy Blunt of Missouri and 
Senator Jack Reed of Rhode Island. To us, the most important 
part of the Blunt-Reed bill is making permanent that extension 
of the program to privately owned rent projects with rental 
assistance, because currently, private nonprofits are not 
eligible to compete for the service coordinator dollars that 
housing authorities use to run the program; that money is all 
spoken for. So our members do private fundraising, as Aaron 
Gornstein did.
    It is hard to convince members to open an FSS program when 
they want to be able to do it--it is a 5-year program. You need 
to offer that escrow every year. So it would be very helpful if 
you all permanently authorized the extension of FSS to project-
based rental assistance.
    In conclusion, I would like to commend this subcommittee 
for shining a light on this program. If new housing providers 
can offer FSS for the residents, we can continue to amass 
evidence on what works to help residents to achieve more 
success.
    This is a voluntary program that could become a model for 
using the power of stable, affordable housing, to help families 
achieve their dreams. It would be very impressive in a time of 
partisan division over so many issues for this subcommittee to 
come together around improvements and expansion of a program 
that makes a great deal of common sense and gives families a 
tangible path to hope and opportunity.
    Thanks for inviting me.
    [The prepared statement of Ms. Siglin can be found on page 
50 of the appendix.]
    Mr. Ross. Thank you, Ms. Siglin.
    Ms. Riva, you are now recognized for 5 minutes.

 STATEMENT OF SHERRY RIVA, EXECUTIVE DIRECTOR, COMPASS WORKING 
                            CAPITAL

    Ms. Riva. Good afternoon, Chairman Duffy, Ranking Member 
Cleaver, and members of the subcommittee, and thank you for the 
opportunity to testify today about the Family Self-Sufficiency 
Program.
    My name is Sherry Riva, and I am the founder and executive 
director of Compass Working Capital. We are a nonprofit 
financial services organization headquartered in Boston, 
Massachusetts.
    I am here today to share my deep support for the FSS 
program and my thoughts on ways in which Congress can take 
action to expand the scope and impact of the program around the 
country.
    There are three key points I would like you to remember 
from my testimony today. First, the FSS program empowers low-
income American families to transform their own lives. It 
provides opportunities for working families to save for and 
invest in themselves, in their children, and in their futures.
    Second, as you heard from Jeff Lubell, the FSS program is a 
promising, evidence-based model that has enjoyed strong 
bipartisan support since it was introduced in the 1990s. FSS 
promotes work, it helps people build savings, and it creates 
the conditions for families to move themselves up and out of 
poverty. It is ripe for expansion and for greater public-
private partnership.
    And finally, the most important action this subcommittee 
can take is to introduce legislation that mirrors the 
provisions of the Family Self-Sufficiency Act, the bill that 
was recently introduced in the Senate.
    Let me just briefly take a step back and tell you more 
about Compass, how we do this work, and why we chose to focus 
on the FSS program as a tool to achieve our mission.
    We are not housers at Compass. Our mission at Compass is to 
help low-income families build assets and financial 
capabilities as a pathway out of poverty. Our work is grounded 
in two core fundamental beliefs. First, poverty is not just an 
income problem. It is a wealth problem. All people need and 
deserve access to opportunities to save for and invest in 
themselves and in their families.
    And the second belief is this: Low-income families have 
hopes and dreams for themselves, their children, and their 
futures, as all of us do. And our experience at Compass is that 
families want to work, they are working, and they want to get 
ahead.
    And our job, our first job at Compass is to tap into these 
deeply held aspirations and invest in families' abilities to 
transform their own lives. So at Compass we saw in the FSS 
program an incredibly powerful tool to help low-income American 
families who live in subsidized housing to escape poverty and 
to access broader economic opportunity. And that is why we have 
dedicated ourselves for the last 7 years to expanding the scope 
and impact of this program around the country.
    The Compass FSS program builds on the fundamental 
components of the FSS program, which is affordable housing, 
service coordination, and access to this escrow account, which 
my follow witnesses have discussed. And we combine that core 
model with robust financial coaching and education to drive 
even stronger outcomes for participants.
    We partner with public housing authorities and affordable 
owners in Massachusetts, Connecticut, and Rhode Island. And 
building on our success in New England, in late 2016 we 
launched a national network to support mission-aligned partners 
in other parts of the country to unpack that power of this 
wealth-building model in their own communities.
    Our initial partners in the national network are in Maine, 
Missouri, Mississippi, and Illinois, and we field new inquiries 
from housing partners around the country every single week.
    The best way though to hear and understand the power of the 
FSS program is to share a story. So I am going to, in closing, 
take a moment to tell you about Tanya Febrillet, who is a 
graduate of our FSS program in Lynn.
    When Tanya enrolled in our program she had been receiving 
housing assistance for 4 years. She was working full-time, 
raising her two kids, but she had bigger dreams, including 
owning her own home.
    At the time, Tanya believed that owning a home--and these 
are her words not mine--``wasn't for families like mine, a 
single, low-income mother who came from a family where no one 
had ever been a homeowner.''
    The FSS program was just what Tanya needed to achieve her 
dreams. After she joined FSS, she started working with a 
financial coach. She increased her income by nearly $8,000, 
improved her credit score by 140 points, saved about $3,000 in 
her escrow account, and became a homeowner. She graduated in 
2015 and became a homeowner, the first person in her family to 
do so.
    The truth is, and the most important thing to say today is 
that there are so many more families like Tanya's that we can 
and should be reaching in this program.
    By bundling affordable housing assistance, support for 
families, and a savings account, FSS is a fundamentally strong 
program, and we believe it can be even stronger and help more 
families escape poverty and achieve their dreams. Thank you.
    [The prepared statement of Ms. Riva can be found on page 39 
of the appendix.]
    Mr. Ross. Thank you, and I thank the witnesses for their 
testimony.
    I will now recognize myself for 5 minutes for questions. In 
my area of central Florida, we have a significant need for 
affordable housing. In fact, in the Tampa Bay area we have over 
13,000 applicants on a waiting list for affordable housing.
    Affordable housing not only has to be affordable, but it 
also has to be available. And FSS has been probably one of the 
more premier programs because not only does it allow them to 
develop, over time of course, their home ownership, but it 
instills in them a sense of dignity, a sense of dignity in 
family, a sense of dignity in success of what they have been 
able to accomplish, achieve, and own.
    And so for that reason, the Tampa Bay Housing Authority 
went back to HUD and asked them if they could expand the 
program. And I was told that unfortunately HUD informed them 
they were not allowed to do so and provided little explanation 
for that.
    My first question is, have any of you experienced similar 
situations with HUD in trying to expand the FSS programs? Who 
would like to start?
    Yes, sir, Mr. Lubell?
    Mr. Lubell. Yes. If I may? My understanding is that any 
housing authority that wants to expand its program is 
absolutely free to do so. In order to do that, they simply have 
to revise their FSS action plan and submit it to HUD. The 
question is whether they can get funding for the FSS 
coordinators that run the program, which is different from 
being able to operate the program.
    So there are two things. They could expand it very easily 
by submitting the revised action plan. But the problem is, that 
funding has been level for many years and their first priority 
has generally been provided to the agencies that are currently 
running it so that they can continue to serve people throughout 
the course of their 5-year period.
    So in order to provide additional funding for more agencies 
there would need to be an overall lift of the cap in funding 
provided. I know that is not your job. You are the 
authorizers--
    Mr. Ross. Right.
    Mr. Lubell. --but I am just explaining, I think, what the 
issue might be.
    Mr. Ross. I appreciate that. Anyone else?
    Mr. Spann?
    Mr. Spann. Sure. I certainly agree with, Mr. Lubell. It is 
completely that. I would also add, though, that there is a 
funding formula. And so the challenge becomes, again, the 
number of persons who are registered participants versus 
quality of actual engagement.
    The truth of the matter is, we opted for quality of 
engagement so that once someone actually ascends and graduates 
from our program, that individual is able to support his or her 
family--
    Mr. Ross. I think that is the point there. If we are 
looking at scoring this for increased funding and to make sure 
that we can afford to do this, we have to look at the outcomes. 
And Mr. Spann, I think you hit on that in that funding formula.
    And I guess the question would be, at what point do we see 
the rate of return to HUD with regard to the participation in 
the program as these participants move on? And I guess the best 
way to quantify that is, what is the success rate?
    I know you talked about having some 923 graduates in your 
program, or 938 graduates so far. How does that compare to 
those who have not made it? If you were to ratio this, is it a 
70 percent success rate, 50 percent, or can you quantify that?
    Mr. Spann. It is generally going to be somewhere in the 30 
percent rate of success, maybe a little higher than--
    Mr. Ross. 30 percent?
    Mr. Spann. Around 30 percent.
    Mr. Ross. Okay.
    Mr. Spann. But again, our program is different from other 
programs. So there is no--this sort of comparative thing is 
important. It is helpful, however--
    Mr. Ross. And do most of them want to help themselves? In 
other words, I would think that the first step to success is 
wanting to help yourself, and, I guess that could also be an 
impediment if they don't. And that would impair your ability to 
be successful.
    Mr. Spann. I don't think this is really a question of 
whether or not individuals and families want to help 
themselves. I think every single customer we serve wants to 
help himself, herself, or her family. The issue is that life is 
happening while they are doing this.
    Mr. Ross. Right. And Ms. Riva, I think you mentioned that 
that becomes a scenario for Compass. You teach these life 
skills. You teach the financial planning. You teach the ability 
to see the success of their incremental savings and create the 
escrow accounts.
    And I am not suggesting that they don't want to be 
successful. I understand the outside influences, but it 
requires a good coach. It requires a good counselor.
    And I guess, Ms. Riva, you mentioned in your testimony 
that, ``You should include individualized, client-driven 
financial coaching and education to help participants chart and 
follow a path, to reach their financeable goals, and become 
more financially secure.''
    I am hurrying, because I am running out of time here. Is 
your program in addition to or greater than what is being 
required of FSS?
    Ms. Riva. In the Compass model, coaches are essentially 
taking the place of coordinators and integrating this coaching-
driven model. But there is no reason why a public housing 
authority can't integrate coaching and education. It could be 
through community partnerships--
    Mr. Ross. And even hereafter, even after they have had 
their escrow invested, bought their homes, is their follow up 
such as--
    Ms. Riva. Yes.
    Mr. Ross. --see how that is the important thing.
    Ms. Riva. Yes.
    Mr. Ross. Okay. Thank you. I see my time has expired, and 
now I will recognize Mr. Kihuen for 5 minutes for questioning.
    Mr. Kihuen. Thank you, Mr. Chairman, and thank you, Ranking 
Member Cleaver. And thank you all for being here to testify and 
for being here as witnesses. Just 2 weeks ago, there was an 
article published in one of our local newspapers talking about 
the success of the Family Self-Sufficiency Program that was run 
by the Southern Nevada Housing Authority.
    Taquana Edwards is quoted saying that she, ``loves paying 
her bills on time,'' which is a sentiment that sounds funny 
until you live in a situation where paying bills becomes a 
major point of stress.
    So I just have two questions, and I think anybody can 
answer these. First, why don't more people participate in the 
FSS program? And second, do you think that many more people 
would participate if agencies and owners had access to 
increased funding to hire more coordinators in order to open 
enrollment?
    Ms. Riva. I would be happy to start answering that 
question. So the first question is one of the reasons more 
families don't participate is limited coordinator dollars so 
that naturally, the FSS Coordinator Grant naturally keeps the 
program small.
    At Compass, with our public housing authority partners and 
our nonprofit housing partners, we have actually leveraged 
philanthropic investment to prove that families want to work 
and they want to get ahead, which is how we have gotten to 
enrollment rates as high as 65 percent at some of the 
properties where we are working in partnership with POAH. It's 
really important to emphasize that low enrollment rates are not 
a reflection of families' desire to move forward.
    And then the second thing I would emphasize is the outreach 
and marketing in the program is something historically we have 
felt could always be strengthened, and to be marketing to 
people's hopes and aspirations, not to compliance, and not to 
the rules of the program because people are afraid, they are 
already afraid.
    And so a lot of the work we have done with Compass that we 
are sharing with PHAs through our national network is leading 
with aspiration and watching how that drives enrollment in the 
program.
    Mr. Gornstein. Can I just add to that? I think what we have 
seen and why we have a higher enrollment rate is the engagement 
of our property management staff on the site, the entire team, 
not just the property management staff, but the maintenance.
    In fact, the maintenance staff have helped in recruitment 
of families. Those are the people who are interacting with 
these families every single day. They know them best.
    And then when you combine that with the financial coaching, 
it is very powerful in terms of really trying to recruit 
families into the program and then sustaining them going 
forward. And I think having some additional funding over time 
could certainly help get more organizations more actively 
involved and really scale up the program. And that is what we 
need to do in the months and years ahead.
    Ms. Siglin. And I would like to just add that POAH raised 
private funds. They used some retained earnings from other 
parts of their rental portfolio and raised private 
philanthropic money to pay for the coordinator. Not all 
organizations can do that.
    So as so many improvements have been made in recent years 
in FSS, if we really want to scale it up, you have to look at 
the funding. Thank you.
    Mr. Kihuen. Thank you, Mr. Chairman. I yield back the 
remainder of my time.
    Mr. Ross. Thank you. The Chair now recognizes the gentleman 
from Michigan, Mr. Trott.
    Mr. Trott. Thank you, Mr. Chairman.
    I appreciate all of you being here. My research indicates 
that the appropriation is about $75 million a year. And just so 
I understand the program--and frankly, I don't know a whole lot 
about it, so I sure appreciate you being here--is the $75 
million largely used for grants for the coordinators and then 
also then also to fund the escrow? Anyone can answer my 
questions; they are general questions.
    Mr. Lubell. It is used entirely to fund the coordinators. 
The escrow is funded separately out of the normal subsidy 
formula for the three main rental systems programs.
    Mr. Trott. Okay. And someone mentioned that roughly 72,000 
people a year participate. How many people graduate, would you 
say, annually?
    Mr. Lubell. It is around 30 percent of program participants 
who end up graduating. But I want to emphasize--
    Mr. Trott. It is a multi-year--
    Mr. Lubell. It is a 5-to 7-year program, so--
    Mr. Trott. Right.
    Mr. Lubell. --if you looked at any given cohort, roughly 30 
percent graduate, but I want to emphasize a couple of things. 
One is that even if you don't graduate, people can benefit from 
the program because they are getting coaching. They are finding 
jobs.
    Keep in mind that unlike other programs, if you decide, for 
example, to move in with a boyfriend and you are no longer on 
public housing, you have to leave the program because you have 
to be in subsidized housing.
    Mr. Trott. Right.
    Mr. Lubell. So some people who don't graduate actually have 
positive outcomes today. Some have negative. I don't want to 
say this program works for everyone.
    Mr. Trott. Right.
    Mr. Lubell. And I do think that some emphasis on improving 
graduation rates would be good, but that responds to your 
questions.
    Mr. Trott. Great. And that does respond. Kind of along the 
same lines, the benefits of the program, independent of 
graduating and getting escrow, someone mentioned, help them 
make that leap, I think it was Ms. Siglin?
    What is the biggest challenge, if you could each--is it 
transportation, housing, increase in salary, life? What would 
you say the--
    Mr. Spann. I think it is the entirety of it. It is all of 
that and then some. We are meeting--so we are a housing 
authority. We are housers every single day and so we are 
meeting folks where they are to provide that service, and it is 
an entire continuum. This isn't--while there are beginning and 
end points, it is a continuum that, frankly, has steps.
    And I think the rigor of just life itself in addition to 
something else is quite a bit. The other part is you have to 
remember these are customers who are essentially laying their 
souls bare to a confidant.
    Mr. Trott. Right.
    Mr. Spann. And that is incredibly personal work. Most of 
America doesn't do that work. So doing that over a 5-year 
period is incredibly difficult. And a 30 percent graduation 
rate really is substantial given, frankly, the very small 
resource allotment to it.
    Mr. Trott. I appreciate that. Thank you.
    Ms. Riva, you just told the story about Tanya, I believe, 
and her dream to own a home. Have any of you worked with the 
private sector in terms of mortgage lenders and to help 
facilitate and make that goal more attainable? Is that part of 
what you--
    Ms. Riva. Absolutely, yes.
    Mr. Trott. So they would be clearly independent of this 
program--
    Ms. Riva. Yes.
    Mr. Trott. --but that would be the logical step for some of 
these folks, right?
    Ms. Riva. Absolutely. And the original statute for FSS 
really positions it as a program designed to take advantage of 
those partnerships in the community. And so in the markets that 
we are in, we are always working with affordable mortgage 
providers, building those relationships with banks around their 
CRA commitments.
    And I just want to mention on graduation, I think it is 
important. We are an earlier program at Compass, but we are 
tracking closer to 75 percent of our clients are graduating. 
And I also wanted to mention the HUD data as among graduates, 
36 percent do exit subsidized housing. So I think that it is an 
important piece.
    Mr. Trott. Yes.
    Ms. Riva. Not all families get to that point at the same 
moment, and exiting isn't right for everybody at 5 years, but 
families are making progress on that path to financial 
security.
    Mr. Trott. Great.
    Ms. Riva. It's just important to point out those statistics 
as well.
    Mr. Trott. And maybe another dumb question here, but $75 
million, how many coordinators are there, if you had to 
estimate? And how big is the caseload for a coordinator?
    Mr. Lubell. HUD has a standard that the caseload should be 
at least 50 per full-time coordinator--
    Mr. Trott. Okay.
    Mr. Lubell. --although the first coordinator can be 25 
because they have other responsibilities like running the 
program. Some agencies routinely have higher caseloads and are 
trying to be more efficient. And I would say compared with 
other programs, this program is pretty efficient in terms of 
the number of people who are being served per coordinator.
    Mr. Trott. I am almost out of time, so I have to ask one 
last question. Any concerns regarding fraud and abuse in the 
program, maybe coordinators that really don't have the 
families' best interest and any concerns that we should be 
focused on to try and improve the integrity of the program?
    Mr. Lubell. Not that we are aware. Not that I am aware of.
    Mr. Trott. Okay. I am out of time. I yield back, Mr. 
Chairman.
    And my one other comment is, it would be interesting to 
have a coordinator here testifying. That would be a great 
addition to the panel. Thank you again for being here.
    Mr. Ross. Thank you. And the gentleman yields back.
    The Chair now recognizes the gentleman from Texas, Mr. 
Gonzalez, for 5 minutes.
    Mr. Gonzalez. Thank you, Mr. Chairman.
    This is for Mr. Spann. Mr. Spann, in Montgomery County, 
Maryland, a person needs to earn more than $33 an hour just to 
be able to afford to rent a two-bedroom apartment in that fair 
market rate. That means that someone earning minimum wage would 
have to work 145 hours a week--more than 3 times the minimum 
wage you mentioned in your testimony.
    While the average annual earned income of $37,393 by your 
clients is a tremendous personal milestone, that is a far cry 
from full economic self-sufficiency, especially in an area 
where the median income for a family of 4 is $110,304.
    Based on this data, it is clear that families need better 
job opportunities that pay much more than the minimum wage to 
become self-sufficient. How can the FSS program help improve 
employment prospects beyond minimum wage positions?
    Mr. Spann. Thank you. So further in the testimony and, 
frankly, even prior to that, we talk about the actual continuum 
itself. And so this is not simply a matter of financial 
coaching. This is not simply a matter of finding someone a 
minimum wage job.
    It also includes a great deal of workforce training in 
addition to educational opportunities. And this is about how we 
meet a family who is a participant in FSS with the entire 
basket of HOC services.
    And so for us, that is exactly the mission: How do we close 
the gap between that livable wage in Montgomery County and what 
some of our graduates are making? And that is the average 
number that you are getting. So we do have some graduates who, 
frankly, are at a higher level.
    But the fact of the matter is, average, many of them are 
right there. And so what we have seen in tremendous success is 
attaching folks to those educational opportunities that then 
help for career advancement, but also allow for career 
advancement, offering summer opportunities to not just the high 
school students, but those college students of families who are 
participants in not just FSS, but all of our programs, and 
making sure we have linkages with partners who are committed to 
this work.
    Many of these folks are working with Compass. We happen not 
to be working with Compass. But we have actually found 
partnerships throughout the Montgomery County Government and in 
the nonprofit sector in Maryland.
    And so let me just offer you one of the best testaments of 
how successful this program can be, is that this audience is 
not filled with participants because they are at work.
    Mr. Gonzalez. Fair enough. Thank you very much.
    I yield back.
    Mr. Ross. The gentleman yields back.
    The Chair now recognizes the gentleman from Pennsylvania, 
Mr. Rothfus, for 5 minutes.
    Mr. Rothfus. Thank you, Mr. Chairman.
    My first question is for Ms. Riva. This subcommittee has 
been looking at a number of HUD programs and considering their 
effectiveness and uniqueness. As I looked at this program, I 
wondered whether the goals of FSS could be achieved absent the 
program. Could you please talk about whether housing 
authorities would be able to deliver the FSS-type services and 
outcomes without the program?
    Ms. Riva. Thank you for your question. As I mentioned in my 
oral testimony, we think what is unique about the bundle that 
FSS provides is the combination of affordable housing, one-on-
one support and service coordination for residents, and the 
savings account. And where we sit at Compass in the asset 
building space is a belief that assets and wealth really matter 
in helping families move forward.
    So there are other programs and other important programs 
that HUD runs that support residents and need to stay in place. 
What is unique about FSS is this bundle of promoting work, 
promoting savings, and providing support one-on-one to 
residents to help them to do that.
    It is unique among anti-poverty programs in this Nation and 
it is actually the largest asset-building program we have for 
low-income families in the United States.
    Mr. Rothfus. So is the asset-building part that is unique, 
for example, and maybe anybody on the panel can address this, 
too? The synergies that this program might have with, for 
example, the Moving to Work program, can anybody speak to that?
    Mr. Lubell. Yes, I can speak to that. Thank you for your 
question. One of the nice things about FSS is that it is open 
to all housing authorities. And it is really one of the only 
ways to provide a financial incentive for families to increase 
their earnings that is available to them. And so that is one of 
the important things.
    The Moving to Work program gives greater flexibility to 
adapt program rules, and there have been a number of agencies 
that have taken advantage of that to really experiment with 
different approaches including variations on the FSS program.
    Cambridge, which is one of the agencies where Ms. Riva 
works, has experimented with a different model that they think 
can allow them to expand FSS to a much larger group of people
    The Portland Housing Authority in Oregon is doing something 
similar. So while I think the nice thing about MTW is it gives 
the flexibility, but it is only available to a smaller number 
of agencies, so FSS is an important thing that is available to 
everyone.
    Mr. Rothfus. Thank you. And if I could say with--go ahead--
    Mr. Gornstein. I was just going to say that we view FSS as 
a component in broader program offerings under we call a 
Financial Opportunity Center. And that is what we launched in 
Independence, Missouri, where you have FSS, you have a college 
savings program, you have job training employment, you have 
educational programs, various other social services programs, 
childcare, and it really helps to get people engaged by having 
that financial incentive in FSS.
    But they are taking advantage of a broad array of programs. 
So we don't view FSS in isolation of the broader array of 
offerings and opportunities that may be available for low-
income families.
    Mr. Rothfus. If I could go back to Mr. Lubell for a minute, 
I want to talk a little bit about self-sufficiency as a goal. 
When I speak with public housing advocates, I often ask them 
what their metric for success is, and I happen to believe that 
self-sufficiency should be the chief metric that we try to 
meet, at least for able-bodied adults.
    I think that this is the moral approach, and I worry that 
we are failing the American people when we create the 
conditions that allow multiple generations of a family to 
remain in poverty and dependency.
    Naturally, a program like FSS seems like it could be an 
attractive way to meet this goal of self-sufficiency. Though 
the program is still being studied, I understand that it has 
already demonstrated some outcomes that are positive on net. If 
the program proves effective, should we consider making 
participation mandatory for all able-bodied adults?
    Mr. Lubell. It is an excellent question, and it is one that 
may be difficult to answer in 1 minute as you might expect. But 
I would say a few things about that.
    First of all, I would agree that there is very strong early 
evidence from FSS of success. We just completed an evaluation 
that found earnings, gains, and improvements in credit scores, 
reductions in debt, and a lot of positive outcomes.
    But I should stress that FSS in the way it is set up and 
the way it is funded is funded to work with people who 
volunteer to be in the program. These are more motivated 
people.
    So if you were to expand it to other people who are not 
necessarily motivated, the question I would ask is, what would 
that do to FSS in terms of the number of people who would be 
served, in terms of the type of program model that we need to 
reach those people?
    And I would say that if we made it mandatory and we did not 
substantially increase the funding so we could provide 
coordinators to deal with the thousands and millions of 
additional people who are joining, then we would actually 
dilute the effectiveness of the program rather than improve it.
    So I would just urge the committee if they are thinking 
about that to think about the implications both for the amount 
of funding that is really needed to make the program work, but 
also the service model.
    You might not be able to serve 50 families. You might be 
able to serve 20 families with a coordinator, because you are 
going to have to work with them a lot more intensely. And so I 
would say we just don't have experience with that right now.
    What we have experience with is a program that is designed 
to help people who want to move ahead get ahead. And we could 
serve a lot more people today even with that same model if we 
really sort of promoted the program more and provided a little 
more money. So I hope that is a helpful answer to your 
question.
    Mr. Rothfus. That is great.
    I yield back. Thank you.
    Mr. Trott [presiding]. The gentlewoman from Ohio is 
recognized for 5 minutes.
    Mrs. Beatty. Thank you, Mr. Chairman, and thank you to our 
ranking member, and let me just say to all the panelists today 
how much I appreciate you being here, not only for your 
expertise in the area, because it is always great to have 
people who have actually worked in and lived what we are 
talking about versus just speculating on it, but more 
importantly than that, this has been a great committee hearing. 
It took us a little time to get here, but the interesting thing 
is we appear to all be somewhat on the same page, and that is 
very comforting when you can sit here and nod your head with 
some of the questions on the other side of the aisle.
    So I wanted to interject that for the record so we can 
remember that when we have other housing programs that come or 
maybe we should just bring you all back on whatever the topics 
are.
    [laughter]
    I am a long-time public housing person, some 20 years as a 
consultant, and oftentimes we don't give enough attention to 
the smaller programs.
    But one of the things I can remember from my early years in 
working in public housing is we always talked about the 
ultimate goal being self-sufficiency or being self-reliant. And 
being able to have a program like this is very welcoming 
because, certainly, my time in public housing was long before 
when President Bush initiated this program.
    But I am big on partnerships because, obviously, we aren't 
in a position it appears to double the funding that you could 
get, but I think you can grow programs and grow your expertise 
in a lot of ways.
    And so one of the things I was reading, because I am from 
Columbus, Ohio, is that our Metropolitan Housing Authority 
talked about some of the partnerships with Fifth Third Bank, 
with Catholic Social Services, and even Sherwin Williams Paint 
stores.
    So I guess I wanted, Mr. Spann or Ms. Riva, to get your 
opinion about how partnerships would work? Very briefly, 
because then I have one other question. Either one of you can 
start.
    Mr. Spann. Sure. The partnerships are absolutely key, and 
for us, this is about us being as an agency a member of a 
vibrant, functioning community, and so are the folks we serve. 
And as a consequence of that, our partners in other business 
for the housing authority are also our partners as we go on to 
support folks as they work through the FSS continuum.
    So it is incredibly vital to what we do. And the truth of 
the matter is we would not be able to connect people 
responsibly to housing or a career or even education pathways 
without them.
    Mrs. Beatty. And don't you think that it is important that 
corporate America sees or gets a truer picture of how 
individuals who live in public housing might be economically 
deprived, but it doesn't mean that they are challenged 
academically or in the world of work if given an opportunity?
    I am going to take your nod as a ``yes,'' and I am going to 
go to the next question for anyone to answer. We talked a lot 
about outcomes and metrics and how we can be more accountable. 
And I am in full support of that because the ultimate goal I 
think that you have is the same as it is for me.
    So can anyone tell me how you are evaluating the outcomes? 
I have read some of the studies. That study that talks about 
credit rate, scores going up, talking about savings going up.
    Is that the only one, or are there other ways that you 
monitor, evaluate? Because that is what my colleagues are going 
to ask me when we start talking about this program and others. 
How do you prove that it is working?
    Ms. Riva. I am happy--
    Mrs. Beatty. You get 10 seconds apiece if everybody--
    Ms. Riva. Yes, so 10 seconds for Compass. So we are--our 
discipline around data collection we think it is really 
important in doing this work. And we look at our outcomes 
across five main measures, changes in earnings, changes in 
credit score. And debt credit is a tool that is a piece of 
economic mobility.
    Access to quality financial products, which is where banks 
are coming in, increases in savings, and then a fifth is a 
qualitative measure which is people's overall sense of 
confidence and well-being. It really matters to keep marching 
forward on that path to economic opportunity.
    That is how we do it at Compass. I think historically, at 
HUD, outcomes have focused primarily around graduation, home 
ownership rate, and exit rates. And in the last year or two, 
working particularly with Abt, HUD is looking at and 
introducing stronger performance-based measures, which we are 
excited about and think will also help to improve the program.
    Mrs. Beatty. Thank you.
    Mr. Trott. The gentleman from Missouri, Mr. Luetkemeyer, is 
recognized for 5 minutes.
    Mr. Luetkemeyer. Thank you, Mr. Chairman.
    Just a few quick questions here. How do the individuals 
qualify for the program? Do they come to you? Do you recruit 
them? Put an ad in the newspaper? Do the folks who manage the 
facilities go down the road and knock on doors? Or how does 
this all work?
    Mr. Spann. It is sort of a ``yes-and'' for us.
    Mr. Luetkemeyer. I'm sorry?
    Mr. Spann. Yes, and more.
    Mr. Luetkemeyer. Okay.
    Mr. Spann. Absolutely it is. So it is voluntary. The 
program is voluntary.
    Mr. Luetkemeyer. Right.
    Mr. Spann. So persons are choosing to be a part of it. They 
are doing so--
    Mr. Luetkemeyer. Do you sort of pre-screen them, though, 
when somebody comes in and say, hey, I heard about this great 
program. I would like to try and qualify for it. And you sit 
down and you work through an application on it? And do some 
people not qualify?
    Mr. Spann. What we work through is an assessment.
    Mr. Luetkemeyer. Okay, an assessment.
    Mr. Spann. And so that assessment is really to determine 
where people are in their own journey. But are folks 
disqualified as a consequence of something other than being out 
of compliance in another program? No.
    If an individual is out of compliance in, say, the voucher 
program or the public housing program, then certainly it is 
possible that person might not be able to participate. However, 
generally you won't have persons who are out of compliance 
volunteering themselves.
    Mr. Luetkemeyer. Okay.
    Mr. Gornstein. We also do a combination of one-on-one 
outreach with each of our residents, group workshops, 
information sessions. When people move in we go over the 
importance of the program and hope that they consider it. So at 
all different touch points, recertification, all--
    Mr. Luetkemeyer. When do you recertify, once a year?
    Mr. Gornstein. Yes.
    Mr. Luetkemeyer. Okay. What happens if an individual--you 
said they just moved in, what happens if the person moves away? 
Are they able to keep this program? Does it follow them or do 
they have to move to a facility that has a coordinator?
    Mr. Gornstein. As long as they are in compliance with the 
program they can take their escrow amount with them. And if 
they move into another assisted property or public housing 
where there is an FSS program they can continue it there. I 
believe that is the case. If you want to clarify that?
    Mr. Lubell. Yes, it is more or less correct, but if they 
leave subsidized housing they are no longer in the program. And 
that is one of the things that is tied to being in the program 
and people do leave subsidized housing for a range of reasons.
    Mr. Luetkemeyer. Right, but if they went to another 
facility that they would qualify for they could--
    Mr. Lubell. Yes.
    Mr. Luetkemeyer. --continue the program and they--
    Mr. Lubell. They could continue.
    Mr. Luetkemeyer. As long as that facility had a 
coordinator, I assume? Or the coordinator from the past 
facility would be eligible or able to take them on and continue 
with them if they move from different cities, right, for 
instance?
    Ms. Siglin. One of the things that has happened with the 
recent expansion of FSS to project-based rental assistance is 
public housing projects are converting under the RAD program to 
become project-based Section 8. So when that happens, the 
residents are protected now that FSS has been temporarily 
expanded to project-based. So the resident who is accumulating 
escrow in public housing can continue to do so.
    Mr. Luetkemeyer. If you look at the recent flooding, you 
have people who perhaps were in a situation where their 
facility was flooded out and they have to go someplace else. 
So, my question is, if those folks could continue on in some 
other facility?
    Is there some sort of oversight or accountability for the 
funds, the $75 million roughly? Do you have an auditor come in 
and double-check to make sure that whomever you are designating 
as the coordinator, that they are doing their job? What sort of 
oversight is there?
    Mr. Gornstein. We are self-funding the program and so we 
are not eligible for the coordinator funds. So we are not being 
audited in that sense from HUD. However--
    Mr. Luetkemeyer. So you have your own self-coordinated 
funder, or self-funded coordinator?
    Mr. Gornstein. Self-funded, correct. However, we have plans 
of actions approved by HUD and then we have regular reporting 
to HUD with regard to each family and the escrow accounts. So 
there is significant oversight by HUD, even though we are not 
getting direct funding from them.
    Mr. Luetkemeyer. How often do you report to them, once a 
month, once a quarter, once a year?
    Mr. Gornstein. I believe it is quarterly.
    Mr. Lubell. Yes. And HUD is also in the process of adopting 
a performance measurement system, so all housing authority FSS 
programs that are funded by HUD will be assessed on a series of 
metrics. That is what we do--
    Mr. Luetkemeyer. Is that a cost-benefit analysis? Is that 
what you are talking about?
    Mr. Lubell. I'm sorry?
    Mr. Luetkemeyer. Is it a cost-benefit analysis?
    Mr. Lubell. No. It is an analysis that looks at outcomes. 
It looks at the extent to which families' earnings have gone up 
relative to other families in the same housing authority.
    Mr. Luetkemeyer. Okay.
    Mr. Lubell. It looks at the graduation rate and it looks at 
the number of people who are being served.
    Mr. Luetkemeyer. So a while ago when you were in your 
opening statement, or maybe you were responding to somebody 
else here, you made a statement that because the program hasn't 
been in place long enough and you haven't had a baseline to 
compare against, you are not sure how effective it is.
    But it would appear that you are doing great, I would 
assume? That is your conclusion that--
    Mr. Lubell. Who is doing great? I'm sorry?
    Mr. Luetkemeyer. The folks involved in the program--there 
seems to be a substantial graduation rate from it, which is 
great, but there--you made a comment I think to the effect that 
you didn't have a baseline to compare or a control group--
    Mr. Lubell. Oh, I'm sorry.
    Mr. Luetkemeyer. --to compare against. Is that--
    Mr. Lubell. Yes. Let me clarify.
    Mr. Luetkemeyer. And maybe I am not--
    Mr. Lubell. I apologize if I was--the program has been 
around for 25 years, so we have a lot of data.
    Mr. Luetkemeyer. Right.
    Mr. Lubell. And the issue was that the particular 
evaluation--HUD's first two program evaluations tracked 
families over time, but they did not have a comparison group to 
compare them to and therefore were not able to make a 
definitive statement about the impact of a program.
    The most recent study that we did of Compass, for example, 
did have a comparison group. We were able to compare the 
outcomes against the comparison group and therefore be able to 
say something meaningful about the program's positive impact.
    Mr. Luetkemeyer. My time has expired. I yield back.
    Mr. Trott. Thank you. The gentleman yields back.
    The Chair now recognizes the gentleman from Missouri, Mr. 
Cleaver, for 5 minutes.
    Mr. Cleaver. Thank you. Let me first of all, again, thank 
all of you for being here.
    Mr. Spann, we did try to get two of your residents to be 
here today, but we were delighted that they could not come 
because they couldn't take off work.
    And let me also just say, as a former resident of public 
housing, and as a mayor who appointed the housing authority and 
had oversight of it, and Independence is in my district, as is 
Marshall and Kansas City where this program has worked, this is 
a good program and it is working well.
    One of my regrets is that we want this program and other 
things like it to be incentives to the residents, but it also 
ought to be an incentive for us to invest more money in the 
program.
    You hear a lot about programs that don't work, but I have 
not heard a single Member here today make a negative comment 
about the workability of this program. I have experientially 
seen it work.
    All of you have, and my hope, my goal, would be to somehow 
convince this committee and maybe even the Secretary that when 
we have a program like this introduced by somebody who was from 
a different party than me, I could care less whether he was a 
member of the Oakland Raiders. All I want is a program to work.
    And this is working, and I am going to support it and give 
President Bush the credit for the wisdom for putting it in 
place.
    Now, one of the things that I would--I had a lot of 
questions that I wanted to ask you, and some of them I already 
knew the answer to, but I wanted to get you on record. But 
somebody was asked a question about fraud and abuse, and we 
are, obviously--I guess we are the oversight committee so 
people we are supposed to be concerned about that.
    But to my knowledge, as of today at 10 minutes after 4:00, 
that has not been, there has not been any Federal investigation 
or charge against the program for any kind of fraud or abuse. 
Am I wrong?
    Mr. Lubell. I don't think any of us are aware of any such 
investigation, sir.
    Mr. Cleaver. Yes. I know the answer, but the point I am 
trying to make is why in the world don't we celebrate this 
program by saying, look, if we can get 30 or 35 percent success 
and invest more money to bring it up to 60 percent, why not do 
it and just sing hallelujah or whatever you sing at church?
    But this is a program to celebrate. And I am hoping that 
all of you feel good about the fact that that it has been 
successful and you played a role.
    Somebody mentioned the Fatherhood Initiative. Mr. Spann, 
can you just go into a little detail on that, please?
    Mr. Spann. Certainly. The Department of Health and Human 
Services has a father initiative, a grant. We are maybe one of 
two housing authorities to apply for and receive that funding, 
and what we have decided to do is include it in our suite of 
HOC Academy and resident services, along with partnering with 
the FSS program so that there are fathers who are identified 
and supported.
    And again, we are matching them as quickly and as 
deliberately as we can to workforce opportunities, to workforce 
readiness opportunities, educational opportunities and the like 
so that we have fathers supported in our community who are 
present in their children's lives and active and so forth.
    Mr. Cleaver. Let me close out by saying I would argue that 
the success numbers are higher than what we officially report. 
And the reason for this is that proximity breeds imitation.
    Somebody in a neighborhood that is rundown paints their 
home, and you look up the next Saturday and people down the 
street are painting their home. The same thing happens in 
public housing. I saw it. I know what happens.
    Or somebody decides to get married. We don't consider that 
a success, in spite of the fact that they get married, they go 
on and have a successful marriage and raise children and work 
and so forth. So I think the success rate is actually higher 
than we report, than the data would report.
    So let me thank you all very much for your testimony, and I 
appreciate the fact that our Chair put this on the agenda.
    Mr. Trott. The gentleman's time has expired.
    I don't believe there are any more Members who have 
questions, and we have a vote series coming up shortly, so I 
think that is part of the reason. But I want to thank everyone 
again for being here.
    And I have to agree with Mrs. Beatty. I believe that this 
hearing has been particularly productive and informative. And I 
also want to thank all of you for everything you do in your 
communities. You clearly make a big difference, and we 
appreciate it.
    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.
    Without objection, this hearing is adjourned.
    [Whereupon, at 4:18 p.m., the hearing was adjourned.]

                            A P P E N D I X



                           September 27, 2017
                           
                           
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