[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]
HOUSING IN AMERICA: OVERSIGHT
OF THE U.S. DEPARTMENT OF
HOUSING AND URBAN DEVELOPMENT
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON FINANCIAL SERVICES
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTEENTH CONGRESS
FIRST SESSION
__________
MAY 21, 2019
__________
Printed for the use of the Committee on Financial Services
Serial No. 116-27
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
___________
U.S. GOVERNMENT PUBLISHING OFFICE
37-929 PDF WASHINGTON : 2020
HOUSE COMMITTEE ON FINANCIAL SERVICES
MAXINE WATERS, California, Chairwoman
CAROLYN B. MALONEY, New York PATRICK McHENRY, North Carolina,
NYDIA M. VELAZQUEZ, New York Ranking Member
BRAD SHERMAN, California PETER T. KING, New York
GREGORY W. MEEKS, New York FRANK D. LUCAS, Oklahoma
WM. LACY CLAY, Missouri BILL POSEY, Florida
DAVID SCOTT, Georgia BLAINE LUETKEMEYER, Missouri
AL GREEN, Texas BILL HUIZENGA, Michigan
EMANUEL CLEAVER, Missouri SEAN P. DUFFY, Wisconsin
ED PERLMUTTER, Colorado STEVE STIVERS, Ohio
JIM A. HIMES, Connecticut ANN WAGNER, Missouri
BILL FOSTER, Illinois ANDY BARR, Kentucky
JOYCE BEATTY, Ohio SCOTT TIPTON, Colorado
DENNY HECK, Washington ROGER WILLIAMS, Texas
JUAN VARGAS, California FRENCH HILL, Arkansas
JOSH GOTTHEIMER, New Jersey TOM EMMER, Minnesota
VICENTE GONZALEZ, Texas LEE M. ZELDIN, New York
AL LAWSON, Florida BARRY LOUDERMILK, Georgia
MICHAEL SAN NICOLAS, Guam ALEXANDER X. MOONEY, West Virginia
RASHIDA TLAIB, Michigan WARREN DAVIDSON, Ohio
KATIE PORTER, California TED BUDD, North Carolina
CINDY AXNE, Iowa DAVID KUSTOFF, Tennessee
SEAN CASTEN, Illinois TREY HOLLINGSWORTH, Indiana
AYANNA PRESSLEY, Massachusetts ANTHONY GONZALEZ, Ohio
BEN McADAMS, Utah JOHN ROSE, Tennessee
ALEXANDRIA OCASIO-CORTEZ, New York BRYAN STEIL, Wisconsin
JENNIFER WEXTON, Virginia LANCE GOODEN, Texas
STEPHEN F. LYNCH, Massachusetts DENVER RIGGLEMAN, Virginia
TULSI GABBARD, Hawaii
ALMA ADAMS, North Carolina
MADELEINE DEAN, Pennsylvania
JESUS ``CHUY'' GARCIA, Illinois
SYLVIA GARCIA, Texas
DEAN PHILLIPS, Minnesota
Charla Ouertatani, Staff Director
C O N T E N T S
----------
Page
Hearing held on:
May 21, 2019................................................. 1
Appendix:
May 21, 2019................................................. 65
WITNESSES
Tuesday, May 21, 2019
Carson, Hon. Dr. Benjamin S., Sr., Secretary, U.S. Department of
Housing and Urban Development.................................. 4
APPENDIX
Prepared statements:
Beatty, Hon. Joyce........................................... 66
Carson, Hon. Dr. Benjamin S.................................. 67
Additional Material Submitted for the Record
Waters, Hon. Maxine:
Written statement of the Cedar Band of Paiutes' CBC Mortgage
Agency (the ``Chenoa Fund'')............................... 77
New York Times article entitled, ``What Will It Cost to Fix
New York's Public Housing?'', dated July 2, 2018........... 98
Tlaib, Hon. Rashida:
Detroit Free Press article entitled, ``Controversial
surveillance program coming to Detroit public housing,''
dated November 9, 2018..................................... 100
Carson, Hon. Dr. Benjamin S., Sr.:
Written responses to questions for the record submitted by
Chairwoman Waters.......................................... 105
Written responses to questions for the record submitted by
Representative Beatty...................................... 136
Written responses to questions for the record submitted by
Representative Foster...................................... 138
Written responses to questions for the record submitted by
Representative Chuy Garcia................................. 140
Written responses to questions for the record submitted by
Representative Hill........................................ 142
Written responses to questions for the record submitted by
Representative Maloney..................................... 143
Written responses to questions for the record submitted by
Representative McAdams..................................... 144
HOUSING IN AMERICA: OVERSIGHT
OF THE U.S. DEPARTMENT OF
HOUSING AND URBAN DEVELOPMENT
----------
Tuesday, May 21, 2019
U.S. House of Representatives,
Committee on Financial Services,
Washington, D.C.
The committee met, pursuant to notice, at 10:05 a.m., in
room 2128, Rayburn House Office Building, Hon. Maxine Waters
[chairwoman of the committee] presiding.
Members present: Representatives Waters, Maloney,
Velazquez, Sherman, Meeks, Clay, Scott, Green, Cleaver, Foster,
Beatty, Vargas, Gottheimer, Gonzalez of Texas, Lawson, Tlaib,
Porter, Axne, Casten, Pressley, McAdams, Ocasio-Cortez, Wexton,
Lynch, Adams, Dean, Garcia of Illinois, Garcia of Texas,
Phillips; McHenry, Wagner, Posey, Luetkemeyer, Duffy, Stivers,
Barr, Tipton, Williams, Hill, Emmer, Zeldin, Loudermilk,
Mooney, Davidson, Kustoff, Hollingsworth, Gonzalez of Ohio,
Rose, Steil, Gooden, and Riggleman.
Chairwoman Waters. The Financial Services Committee will
come to order.
Thank you for your patience, Mr. Secretary. We were just
working out how we are going to proceed today. We have a
classified briefing that is extremely important that will be
called about 1:00 or 1:30, and we are not sure how long it is
going to last. If it lasts beyond an hour, we will come back,
and we will relieve you if you are prepared to go. We will not
ask you to stay beyond 1 hour. If it is over in 1 hour, we will
come back, and we will continue with the hearing. Otherwise, we
will let you know, and you can make a decision.
Is that understood by everybody? Thank you very much.
Today's hearing is entitled, ``Housing in America:
Oversight of the United States Department of Housing and Urban
Development.''
Without objection, the Chair is authorized to declare a
recess of the committee at any time.
I now recognize myself for 4 minutes to give an opening
statement.
Today, this committee convenes for a hearing to conduct
oversight over the United States Department of Housing and
Urban Development (HUD). Our sole witness is Dr. Benjamin
Carson, the Trump Administration's HUD Secretary. I am very
concerned about Secretary Carson's actions in leading HUD.
Specifically, under his leadership, HUD has put forth an
outrageous plan that would triple rent for the lowest-income
households and put 1.7 million Americans at risk of eviction
and homelessness at a time when we are in the midst of a
national homelessness and housing affordability crisis.
His most recent proposed budget would cut HUD funding by 18
percent. That budget proposal includes the elimination of new
funding for the National Housing Trust Fund and the Capital
Magnet Fund, essential programs that are in place to increase
the supply of affordable housing. As I have said before, what
we need is a real investment in affordable housing programs,
not senseless budget cuts.
Under Secretary Carson's leadership, HUD has diminished and
compromised fair housing protections. Secretary Carson has
halted the implementation of HUD's Affirmatively Furthering
Fair Housing rule, which is an important rule finalized by the
Obama Administration that provides communities with greater
clarity on how to help break down residential segregation and
barriers to fair housing opportunities.
I am also concerned by the reports about delays in disaster
recovery funds reaching Puerto Rico and delays in the HUD
Office of the Inspector General inquiry into the matter due to
a lack of timely cooperation by HUD.
I was also very troubled by Secretary Carson's recent cruel
proposal to terminate housing benefits for families that
include individuals with mixed immigration statuses. Of course,
existing law prevents Federal housing programs from subsidizing
individuals with ineligible immigration status. Prorated rental
assistance allows mixed immigration status families to remain
together while exclusively subsidizing only those family
members with eligible status. The Trump Administration proposal
puts mixed status families at risk of being evicted, separated,
and left homeless.
Secretary Carson, across the board, these actions are
inconsistent with HUD's mission. Instead of helping the hard-
working Americans and vulnerable families that the agency is in
place to serve, the Trump Administration is actively causing
harm, and striving to make housing less available, affordable,
and fair. Today, you will face some tough questions about your
leadership decisions and mismanagement of the agency.
The Chair now recognizes the ranking member of the
committee, the gentleman from North Carolina, Mr. McHenry, for
5 minutes for an opening statement.
Mr. McHenry. Thank you, Chairwoman Waters.
And thank you, Secretary Carson. Thank you for your service
to the American people and our government.
HUD was created more than 50 years ago by President Lyndon
Johnson who intended the new agency to be a major tool in
combating poverty, rebuilding our cities, and making housing
more affordable for all.
To that end, HUD is involved in several programs, including
Federal public and Indian housing efforts, community planning
and development initiatives, fair housing and equal opportunity
enforcement, FHA mortgage insurance, Ginnie Mae securitization
of federally guaranteed mortgages, and, more recently, disaster
recovery efforts, yet HUD also finds itself at a crossroads. It
must meet the 21st Century expectations of the American people
in a 20th Century framework with 19th Century technology. This
is not a recipe for success.
Instead of looking for easy answers to complex problems,
Secretary Carson did what Dr. Carson has done countless times
before while he was a surgeon. He rolled up his sleeves and set
to work to find things, no matter how big the challenge, and
there have been challenges.
He has implemented reforms to reduce fraud and abuse in how
we finance mortgages through FHA and Ginnie Mae. He reversed a
decade-long trend by once again hiring a Chief Financial
Officer for HUD to protect taxpayers and combat wasteful
spending.
HUD also stood up for housing when it filed suit in 2018
against the New York City Housing Authority for routinely and
flagrantly failing to uphold its legal obligations under the
Fair Housing Act of 1937. Until HUD stepped in, the New York
City Housing Authority put real people in harm's way, serious
harm's way, and then repeatedly misled HUD about its
wrongdoings.
He also took the fight against housing discrimination into
the 21st Century by scrutinizing digital ads that may have
violated the Fair Housing Act and were modern day efforts at
redlining.
Additionally, Secretary Carson has worked to promote the
private-public partnership model of advancing social and
economic prosperity for all Americans by chairing the
interagency White House Opportunity and Revitalization Council,
which works to help distressed communities stimulate
development and entrepreneurship through new tools like
Opportunity Zones. Opportunity zones are a welcome addition in
our Tax Code and are having impacts in our communities but will
have a much stronger impact in the coming decades.
I applaud Secretary Carson for his efforts to bring much-
needed reform to the agency, including modernizing old
programs, updating regulations, and knocking down barriers to
individual local investment.
Last week, I sent a letter to Secretary Carson urging his
swift movement on several pending regulations, finalizing new
rules that reflect modern realities on topics like
Affirmatively Furthering Fair Housing and disparate impact will
go a long way to helping local communities and consumers. I
welcome you finalizing those rules in a timely manner.
The path to reform isn't always smooth. I think there are
reasonable questions regarding how HUD communicates information
and how it handles the unprecedented amount of disaster aid it
administers. I look forward to hearing the Secretary's response
to those questions in particular.
Like many other Federal programs, we must recognize that
housing in the 21st Century is a partnership between Federal,
State, and local governments, one that needs to be
collaborative for it to be successful. We must do our part to
achieve bipartisan results, to help those who are homeless get
in sustainable housing. We must do our part to modernize the
Federal footprint with changes in law, and the Executive Branch
must do its part in changes to regulation to meet these
challenges.
As Secretary Carson has said, we must leverage outside
public and private investment in addition to Federal funds to
meet our housing challenges. I concur, and I expect a
modernized HUD to lead the way towards the future.
And, with that, I yield back the balance of my time.
Chairwoman Waters. Thank you.
The Chair now recognizes the Chair of our Subcommittee on
Housing, Community Development, and Insurance, Mr. Clay, for 1
minute.
Mr. Clay. Thank you, Madam Chairwoman, and as we mark the
51-year passage of the Fair Housing Act, there is still much
work to be done to promote and ensure fair housing in America.
In fact, as I noted in recent conversations, residents in my
district in the community of Wellston, Missouri, are facing the
prospect of dislocation and upheaval.
Although we have had conversations, I want to make it clear
for the record that I fully expect HUD to follow through on any
and all commitments made and work with my staff and me to
ensure that the residents have access to affordable housing. I
hope that we can find a solution, such as a grand family
development or usage of Section 202 housing, and I stand at the
ready to work with HUD.
And, with that, Madam Chairwoman, I yield back.
Chairwoman Waters. Thank you.
I want to welcome to the committee our witness, Dr.
Benjamin S. Carson, Sr., the Secretary of Housing and Urban
Development. He has served in his current position since 2017.
Mr. Carson has testified before the committee on previous
occasions, and I do not believe he needs further introduction.
Without objection, your written statement will be made a
part of the record.
Secretary Carson, you are now recognized for 5 minutes to
present your oral testimony.
STATEMENT OF THE HONORABLE DR. BENJAMIN S. CARSON, SR.,
SECRETARY, U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Secretary Carson. Thank you, Chairwoman Waters, Ranking
Member McHenry, and members of the committee. Thank you for the
opportunity to appear before you today to discuss housing in
America.
Let me begin with fair housing. In so many ways, we can't
consider our housing markets healthy unless those markets are
also fair. In today's interconnected electronic world,
discrimination can take less obvious forms. That is why I
initiated an investigation into Facebook and, 2 months ago,
charged Facebook with violating the Fair Housing Act by using
its social media platform to encourage, enable, and cause
housing discrimination. Using a computer to limit a person's
housing choices is just as discriminatory as slamming a door in
someone's face.
This year, HUD is also placing a special focus on
protecting the rights of individuals to feel safe and secure in
their homes, free from sexual harassment.
Turning to housing finance, HUD oversees $1.4 trillion in
Federal Housing Administration mortgage insurance and more than
$2 trillion in Ginnie Mae mortgage-backed securities.
Considering HUD's critical role in supporting affordable and
sustainable mortgage finance, it is essential that housing
finance reform efforts take a comprehensive view of the
marketplace.
President Trump recently signed a memorandum directing
Secretary Mnuchin and myself to develop a housing finance
reform plan. Our plan will ensure that FHA and Ginnie Mae
assume primary responsibility for providing housing finance
support to low- and moderate-income families that cannot be
fulfilled through traditional underwriting.
In some of our housing markets, we are also struggling
against the strong headwinds of disaster. In the time I have
been Secretary of HUD, this nation has experienced several
major disasters. In response, President Trump has signed into
law critical emergency funding to support long-term recovery
and directed HUD to allocate these resources among the hardest-
hit States. HUD has fully allocated approximately $7.4 billion
through our CDBG-DR program. This money can be used today to
help rebuild homes, restore businesses, and repair or replace
damaged infrastructure. In addition, we have reviewed and
approved State and territorial action plans for another $10
billion. Recovering from a major disaster is never easy. I want
to assure this committee that HUD is doing everything we can to
help every grantee accelerate the pace of recovery.
No discussion of housing would be complete without
discussing the absence of housing. Homelessness continues to be
a vexing problem in this country, but I am encouraged to report
to you that homelessness is not an intractable problem. As a
nation, we have managed to cut veterans' homelessness in half
since 2010. Homelessness among families with children is down
nearly 30 percent, and chronic homelessness is down more than
16 percent.
Another area where I believe we can make a difference is
ensuring that HUD-assisted housing is decent, safe, and
healthy. Shortly after I took office, I ordered a wholesale
reexamination of how the Department conducts inspections of
public housing as well as private housing under Section 8
contracts, and we are moving quickly to prevent carbon monoxide
poisoning in HUD-assisted housing.
Regrettably, there is currently no universal Federal
requirement that carbon monoxide detectors be installed in all
HUD-assisted housing. That is wrong. Whether through regulation
or legislation, it is our intention to require working carbon
monoxide detectors in HUD-assisted housing, whether State or
local law requires it or not. And to assist public housing
authorities (PHAs) with the purchase and installation of carbon
monoxide detectors, HUD is providing $5 million for this simple
life-saving device.
Finally, let me turn to something that is rather obvious to
all of us. In many parts of our country, there is an affordable
housing crisis. The Federal Government cannot solve this
problem alone. Let me tell you about a few things we are doing
at HUD to find a solution.
To date, our rental assistance demonstration has preserved
nearly 114,000 units of public housing and generated more than
$7 billion in construction activity to revitalize these units
or replace them altogether. We are also very excited at the
potential for up to $100 billion in capital investment in
Opportunity Zones made possible by the tax reform spearheaded
by President Trump. And HUD is proposing a new rule to ensure
taxpayer-supported housing supports those who are legally
entitled to it. Given the overwhelming demand for our programs,
the law requires that we devote ourselves to legal residents
who have been waiting, some for many years, to access
affordable housing.
Before I conclude, I want to thank the many Members from
both parties who have taken the time to meet with me during the
past 2 years and who are working every day to find common
ground in support of safe, decent, and affordable housing. The
work isn't easy, but nothing worthwhile ever is. Thank you.
[The prepared statement of Secretary Carson can be found on
page 67 of the appendix.]
Chairwoman Waters. Thank you very much. I now recognize
myself for 5 minutes for questions.
On April 25, 2018, you unveiled a proposal that would
triple rents for the lowest-income HUD residents. Previously,
when you testified before this committee, I explained to you
what your proposal would mean for a low-income HUD-assisted
senior in my district named Larry. He would see an increase in
his rent of around $80, and because he lives on a fixed income
of just $1,015, this would be devastating for him.
You demonstrated that you did not fully understand the
impact of your proposal when you responded to my question by
saying that you did not think it was a ``typical situation.''
But according to the Center on Budget and Policy Priorities,
the average rent increase for seniors under your proposal would
be $83 or a 30-percent increase.
Dr. Carson, we are currently experiencing an affordable
housing crisis. But again this year, you proposed the same rent
increases in HUD's 2020 budget request. I cannot understand why
you would make a family choose between eating or staying
housed. Do you understand the impacts of your proposal, and do
you continue to defend it?
Secretary Carson. Well, first of all, thank you for the
work that you have done on behalf of poor people in our
country.
As far as our proposal is concerned, we are talking about
increasing rent for the people who pay the minimum rent, and we
have protected the elderly and the disabled, hold them
completely harmless in that regard. People who pay $25 to $50 a
month have been asked to contribute more in order to help
sustain the program and, also, to encourage them to go out and
seek employment.
We are talking about work-able people. We are not talking
about people who have to take care of others or have young
children. We are talking about people who have perfectly
healthy bodies and have opportunities available to them--
Chairwoman Waters. Before you continue on, Mr. Secretary,
have you determined for those for whom you are asking an
increase what their income is and where the money would come
from? Are these people on fixed incomes, some of them?
Secretary Carson. We have made a provision, a hardship
provision for anybody who is incapable of doing that, but--
Chairwoman Waters. What about people on fixed incomes? Are
they asked to pay an increase in rent?
Secretary Carson. We have made provisions for anybody who
cannot meet the income that we have asked for, but we have
also--this is part of a comprehensive program. The rent
proposal is to start the discussion. We need to have a
discussion with lawmakers on what to do because we have so many
perverse incentives in place. For instance, if you make more
money, you have to report that, so your rent can go up. That is
a ridiculous thing--
Chairwoman Waters. Okay. Mr. Secretary, the example that I
gave was a senior, not a work-able household, and I am really
concerned about that because people on fixed incomes don't have
any money for an increase. They can't afford an increase, and I
would like to know exactly what you are doing with people on
fixed incomes.
Secretary Carson. As I said before, the elderly and the
disabled are completely protected in the plan that we are
proposing.
Chairwoman Waters. So they are exempted from any increase?
Secretary Carson. They have no increase.
Chairwoman Waters. They are exempted from any increase. Is
that correct?
Secretary Carson. We have protected them from any increase.
Chairwoman Waters. Okay. Continue with your explanation.
Secretary Carson. And as I was saying, if you make more
money, you are penalized for that. If you bring another income-
producing person into your environment, you are penalized for
that. You have to report that so your rent can be raised. Don't
even think about getting married. You will probably lose all of
your subsidies altogether.
These kinds of things have been in our system for a long
time. This is all part of a comprehensive plan in order to
change that scenario--
Chairwoman Waters. I hate to keep interrupting you, but I
just got another fact. The average rent increase for a
household headed by a person with a disability is a 26-percent
increase. Are you saying this is incorrect?
Secretary Carson. I am saying that we have protected the
elderly and the disabled from increases.
Chairwoman Waters. I really don't know what that means.
Secretary Carson. That means they are not going to be
increased.
But the other thing that I hope you just heard me say is
that this is to start the conversation about something that is
a chronic, persistent problem. We have to come up with better,
more efficient ways so that we don't leave people in situations
where they become--
Chairwoman Waters. Thank you.
My time has expired. We can have a discussion all we want
about rate increases but if they are not affordable, if they
are seniors, if they are on disability, the discussion does
them no good, and I am very concerned about that.
And, with that, the gentleman from North Carolina, Ranking
Member McHenry, is recognized for 5 minutes.
Mr. McHenry. Thank you, Secretary Carson. During your time
at HUD, you have been willing to take on a few tough fights,
and I want to speak to the example of the suit that, under your
direction and leadership, HUD filed against the New York City
Housing Authority, which is the largest housing authority in
America. It is the largest housing authority not just in the
United States but in North America. And your lawsuit was about
the deplorable conditions of its housing units, and your
accusation and HUD's accusation was that the New York Housing
Authority was in substantial default under the 1937 Housing
Act, allowing for dangerously high levels of lead paint,
unsanitary conditions, rats, mice, nonfunctioning heat in
winter, and widespread recurring mold.
In short, things were so bad in so many New York City
Housing Authority units that at least 19 children were found to
have elevated blood lead levels. Some residents were sleeping
with their gas ovens on for heat, and 83 percent of inspected
units contained a condition that could pose a health hazard to
a tenant.
This was covered up for years, so bad that the U.S.
Attorney for the Southern District of New York said that their
failure to provide decent, safe, and sanitary housing is simply
unacceptable and illegal. You sued the New York City Housing
Authority, and then, in January of this year, they voluntarily
entered into a consent decree with HUD. So can you walk us
through that and the steps that are being taken going forward
so that we can keep children and those who are in these units
safe and healthy?
Secretary Carson. Yes. We are very concerned, particularly
about the lead situation and the number of children who have
been affected. You know, lead poisoning for a child is
devastating, not only acutely, but it has a lifelong impact.
And not only does it decrease their abilities, but it is very
costly to society in terms of their potential.
But in the case of the New York City Housing Authority
(NYCHA), they had been prevaricating about what they were doing
during their inspections, covering it up completely, and in
addition to that, allowing mold to fester which was causing a
lot of problems with asthma, which has a very substantial
medical cost to it as well, not having up protective barriers
where they needed to be, trip hazards, elevators that weren't
working. I mean, it was a total disaster.
And in situations like that in the past, HUD has frequently
taken places into receivership. I have not taken any place into
receivership since I have been here--because in looking over
the history of that, it has not turned out particularly well in
all cases--and decided that we really would work with the City.
The mayor and myself, who come from very different
political places, decided we would put aside the political
differences and concentrate on the people and what could be
done in order to help the people of NYCHA. We decided to put a
monitor, a Federal monitor who has much experience, on that
case. We put in measurements that have to be met and times when
they have to be met, and we are proceeding along that line. A
CEO is in the process of being selected now. And we are going
to keep a very close eye on it, and we are going to hold them
to the metrics that have been put in place because, again, no
one deserves to live in that setting.
Mr. McHenry. Well, thank you for speaking to the humanity
involved, not the physical structures but actually speaking to
the people who inhabit these places, who deserve to live in a
healthy, safe place.
I want to raise Opportunity Zones, and I know other people
will have questions about Opportunity Zones and your leadership
under the White House Opportunity Revitalization Council, but
my time is cut short. I thank you for your testimony. Thanks
for your leadership and your service to our country.
I yield back.
Secretary Carson. Thank you.
Chairwoman Waters. The gentlewoman from New York, Mrs.
Maloney, who is also the Chair of our Subcommittee on Investor
Protection, Entrepreneurship, and Capital Markets, is
recognized for 5 minutes.
Mrs. Maloney. Thank you, Madam Chairwoman.
Mr. Secretary, the ``D'' in HUD does not stand for
``deportation.'' I am afraid that a recent proposal of yours
will bring nothing but despair to thousands of American
families by throwing children out of their homes. Simply put,
we cannot create affordable housing for Americans by throwing
other Americans out into the street with no place to go.
I am very proud to represent Queensbridge Houses, which is
the largest public housing complex in the entire country, along
with many other public housing complexes. So I have been
working with public housing tenants since 1981, standing up for
tenants' rights, fighting against spending cuts, and exposing
and ending corrupt mob contracts.
But your plan to create vacancies by making 55,000 American
children homeless is among the most damaging proposals I have
ever seen in public policy, and, quite frankly, I find it
despicable. You know that the current laws already prohibit
Federal housing programs from subsidizing undocumented
immigrants. Individuals who are not eligible for housing
assistance do not receive subsidies.
By evicting mixed status households, you will rip apart
families and will be throwing children onto the street. And
where will the 55,000 children go? Where will they live? What
agency will care for their health and education? Is your plan
to have ICE put 55,000 more children in cages on the border?
Really. Not in my district and not on my watch. This is a
horrible plan.
New York City now spends more than $600 million per year to
support 8,200 children in foster care and $4.5 billion more
every year to tackle homelessness. Have you considered how you
would support the newly homeless families and children? Will
they be going to foster care? What is your plan?
Secretary Carson. First of all, thank you for the work that
you have done on behalf of the people, and I appreciated our
visit in New York.
Mrs. Maloney. Thank you.
Secretary Carson. As far as what we are doing with housing,
the law that has been provided through Congress states very
specifically that the Secretary of HUD may not provide housing
assistance to people who are here illegally. It also states
specifically that the Secretary has the duty to end assistance
if he finds that someone is violating that, so we are following
the law. I would also point out to you--
Mrs. Maloney. But may I respond? By law, we already--I
agree with you, you don't provide subsidies to people who are
here illegally, but these children were born here in America,
and even if their families are illegal--it is a mixed family in
terms of legality--the children are legal. So you could have a
situation where the parents are deported and they leave the
children, who are American citizens, here. Who is going to take
care of these children? Do you have a plan to take care of
these 55,000 children, which is HUD's number that came forward
with that they project could be hurt by this plan? Do you have
a plan for how to take care of these children, yes or no?
Secretary Carson. A couple of things here. First of all,
there are hundreds of thousands of children as well as elderly
and disabled people on the waiting list who are legal American
citizens.
Mrs. Maloney. But Mr. Secretary, these children are legal
American citizens. They were born in America. They are legal
citizens.
Secretary Carson. As I was saying, there are hundreds of
thousands, if not millions, who are waiting on the list. Do you
suggest that we prioritize people who are illegal--
Mrs. Maloney. You are going to pick one American citizen
over another? Again, these children are American citizens. They
are legal. And what is your plan to take care of them?
Secretary Carson. Well, if you read the rule carefully, you
will see that it provides a 6-month deferral on request if they
have not found another place to live, and that can be renewed 2
times for a total of 18 months, which is plenty of time for
Congress to engage in comprehensive immigration reform so that
this becomes a moot point, as does the DACA situation and a
hundred other things.
Mrs. Maloney. How in the world can you put forward a plan
that could lead to making 55,000 children homeless?
Chairwoman Waters. The gentlelady's time has expired.
The gentlewoman from Missouri, Mrs. Wagner, is recognized
for 5 minutes.
Mrs. Wagner. Thank you, Madam Chairwoman.
And I thank Secretary Carson for his testimony today and
for his service.
Would you like a minute, sir, any more time to respond?
Secretary Carson. Yes. Thank you very much. The fact of the
matter is Congress has a responsibility for making the laws
that govern this, and they have the ability to change that. And
if, in fact, you want to explain to the American citizens who
have been on the wait list for several years in your district
in New York why we should continue to support families who are
not here legally, I would be happy to join you in helping to
explain that to them.
Mrs. Wagner. Thank you. And I am glad you could finish your
answer.
Congressman Al Green and I have written and worked on
legislation that addresses major challenges facing the disaster
relief funding process at HUD. According to numerous IG reports
and a hearing that the Financial Services Committee's Oversight
and Investigations Subcommittee held in March, major issues
have been identified with the Community Development Block Grant
Disaster Recovery Program.
Some of the difficulties identified are the potential
duplication of benefits, slow disbursement of disaster-related
funding, and delays in funding for low- and moderate-income
citizens. While HUD has become a primary provider of disaster
recovery, this program is not codified in statute. HUD uses
more than 60 Federal Register Notices to issue clarifying
guidance, waivers, and alternative requirements to oversee at
least 113 active disaster recovery grants, which totaled more
than $47 billion as of last year.
Codifying the CDBG-DR program would provide a framework for
future disasters, reduce the overreliance on Federal Register
Notices for each disaster, and speed delivery of disaster
assistance to grantees and disaster victims. Codification
provides proper controls that protect against waste, fraud, and
abuse.
Mr. Secretary, are you aware of these challenges within the
CDBG-DR program, and how are you making sure these funds are
directed toward the Americans who need it the most?
Secretary Carson. Thank you very much for that question and
for the visits that we have had to discuss this and other
matters.
I actually very much agree with the whole concept of
appropriate codification. You and Congressman Green have been
working on this, I know, with some others, and the big
advantage, of course, is you start out on second base instead
of starting out from home.
And there are a lot of things that are done consistently
all the time, and you can get those things codified and done
quickly so that you can decrease the amount of time. I am in
agreement with that, and we are very happy to work with you. We
are already making some progress in that area, and I think we
can do this, because one of the things that has concerned me is
the amount of time it takes to get grants out.
Mrs. Wagner. Right.
Secretary Carson. And I have asked every office at HUD to
look at their own internal procedures and see what they can do
to speed it up. If you have 10 offices and 9 of them get things
done quickly and one of them takes 6 months, the whole thing
takes 6 months.
Mrs. Wagner. There has to be coordination between HUD, SBA,
FEMA, and State agencies all talking to each other to make sure
there are not procurement issues. I look forward to working and
continuing my work with Congressman Green to bring this to the
Floor. So I thank you for your support and for your commitment
to this.
Quickly moving on, the world's largest Catholic healthcare
system, Ascension, is headquartered in the St. Louis region.
Ascension is implementing a comprehensive organizational
response to trafficking survivors at its hospitals.
Unfortunately, Ascension can only establish these programs
where emergency housing is available. I understand that the
continuum of care fiscal year 2018 competition focus included
$50 million for housing services for domestic violence and
trafficking survivors.
Will HUD extend this program and ensure that projects,
including housing for trafficking survivors, are--or are there
more permanent ways that HUD can address transitional housing
needs for trafficking survivors, sir?
Secretary Carson. Well, trafficking is obviously
horrendous, and there is a lot more of it going on these days,
and we definitely need to take care of that, and that was a
very good program. It turns out that you all have funded that
for the 2019 season, so yes, it will be continued.
Mrs. Wagner. Wonderful. I am glad to hear that.
My time has expired. I yield back.
Chairwoman Waters. Thank you very much.
The gentlewoman from New York, Ms. Velazquez, is recognized
for 5 minutes.
Ms. Velazquez. Thank you, Madam Chairwoman.
Secretary Carson, in defending HUD's recently proposed
immigration rule, you released the following statement: ``There
is an affordable housing crisis in this country, and we need to
make certain our scarce public resources help those who are
legally entitled to it.''
Mr. Secretary, do you know how many people are on the
waiting list for public housing and Section 8 vouchers?
Secretary Carson. In your district, you mean?
Ms. Velazquez. No, no, no. Nationwide.
Secretary Carson. There are hundreds of thousands.
Ms. Velazquez. No. There are 4.4 million people, by the
way. So do you know how many units would open up as a result of
the proposed rule, how many units with that proposed rule?
Secretary Carson. Probably at least 32,000.
Ms. Velazquez. Twenty-five to 35 units--so you are going to
put children on the streets to open up 25,000 to 35,000 units,
and these are American children. Where are they going to go?
They will go into the shelter system. They will become homeless
children. Those are American children.
So the question is not, where are they going to go? The
question to you, sir, is, why, if you recognize that there is a
housing crisis in our nation, that there are 4.4 million people
on a waiting list, why did you request $9.6 billion less for
HUD's budget for Fiscal Year 2020, including zeroing out the
capital fund and requesting $350 million less for the Section 8
program? Do you understand why this sounds like you are talking
from both sides of your mouth?
Your regional director in New York, Ms. Lynne Patton, has
been spending nights living in public housing, but apparently,
she forgot to talk to you because this budget request doesn't
reconcile what she is seeing on the ground. And I found that
people come here and talk about this situation of public
housing in New York, and you have not been here when we have
been advocating for increasing the capital fund so that we
could make repairs and we can address the issue of mold.
In fact, when you went to the hearings, confirmation
hearings on the Senate side, you said that as a doctor, you
will want to take care of the children in public housing, the
health of children in public housing. Sir, this budget is
shameful. It is immoral. It fails American citizens just for
the sake of scoring political points.
So did you have any conversations about this proposed rule
with the staff of the White House, including Senior Advisor
Stephen Miller or Acting White House Chief of Staff Mick
Mulvaney? Did you?
Secretary Carson. We have conversations all the time about
many of our policies.
Ms. Velazquez. And did you consult with any national
affordable housing organizations, tenant rights, or immigration
groups?
Secretary Carson. We have such conversations with such
groups all the time.
Ms. Velazquez. Did you have conversations with the largest
public housing authority in the nation, New York. Did you?
Secretary Carson. I think what is important is, what are we
going to do about the problem? That itself would make a lot
more sense.
Ms. Velazquez. Reclaiming my time, don't sit there, sir,
and talk about the national conversation. We need to have a
national conversation about homelessness in our nation, about
the disrepair of public housing in our nation. Do you know what
it takes? It takes money. It takes the budget. You have created
this crisis by the disinvestment that has taken place in public
housing in our nation.
Secretary Carson. We have a very substantial affordable
housing crisis, and there are two ways to approach it: Continue
to throw money at it, which has been done for a long time
without solving the problem; or ask yourself, why do you have
that problem of escalating crisis? I can say more about that.
Ms. Velazquez. I yield back the balance of my time.
Chairwoman Waters. The gentleman from Florida, Mr. Posey,
is recognized for 5 minutes.
Mr. Posey. Thank you, Madam Chairwoman.
Mr. Secretary, they continue to ask the questions and not
allow you time to answer them. That is pretty selfish, pretty
bad behavior. So, if you want any time to answer, then you just
give me a thumbs up, and I will yield time for that.
Secretary Carson. Thank you. I appreciate that. It does
seem a little silly to have a hearing where you are asked a lot
of questions, and you can't answer them. It seems more like a
platform for--
Ms. Velazquez. Would the gentleman yield?
Mr. Posey. No.
Ms. Velazquez. You call me selfish for fighting for the
children in America? Shame on you.
Mr. Posey. Madam Chairwoman, order, please.
Chairwoman Waters. Order.
Mr. Posey. Dr. Carson has my time.
Secretary Carson. In terms of the affordable housing
crisis, we have to ask ourselves, why is there an affordable
housing crisis in a country like ours? There are so many
regulatory issues and zoning restrictions that add to the cost.
For a new construction single-family home now, we are
talking 25 to 27 percent. For multifamily construction, we are
talking 32.1 percent, up to 42 percent in a quarter of cases.
Unless we begin to tackle the things that are driving these
prices, we are just chasing our tails by just saying we have to
throw more money at it.
We have to analyze these things carefully. We have to use
our brains. We have to think logically rather than just
emotionally if we are going to solve these problems, and they
can be solved if we work together, rather than making
everything into a political platform and trying to score
points.
Mr. Posey. Well stated, Mr. Secretary, and I am saddened to
see you come here only to be bullied and berated for not
breaking the law, actually. And I don't know if they were
suggesting that you should separate these children from their
families as a way to comply. I don't know if that is their
suggestion, but it is off-the-wall thinking, and I respect you
for following the law.
All of us here should be impressed that HUD's 2020 budget
request continues the Federal goal to prevent and end
homelessness by seeking nearly $2.6 billion to support
thousands of local housing and service programs assisting the
homeless.
And while a lot of the people up here do a lot of talking,
you have actually been doing a lot of work, and you have
actually been accomplishing things. And I want you to know that
a lot of people do recognize that and appreciate it. Your list
of accomplishments is extraordinary, just like the track record
of your personal life, and we are pleased that you have chosen
to dedicate your clearly superior intellect and desire to help
other people in a position that you are. I just can't imagine
that you are willing to put yourself and your family through
this, but we are so grateful that you are willing to do that.
Secretary Carson. Thank you.
Mr. Posey. Mr. Secretary, I have been a vocal supporter of
easing restrictions on FHA loans for condominiums, and I have
written you a letter before with Mr. Cleaver from the other
side. Could you give us an update on where that is?
Secretary Carson. Yes. The condominium issue is a sticky
issue. It is very complex, fraught with risk, and we have been
doing a very in-depth analysis working with it, have submitted
new rules for it that have gone over to OMB, and we expect to
have the final rules on condominiums out by this fall.
Mr. Posey. That is great. Thank you, sir.
Also, we recently discussed your recent proposed rules
issued under Section 3 of the HUD Act of 1968. I just wonder if
you could share with us the important improvements you have
made?
Secretary Carson. Yes. Section 3 is an extremely important
part of the Housing Act because it requires that if you are
getting HUD money, that you have to hire, train, or give
contracts to the low-income people in the area. It has been
largely ignored because it is so encumbered with regulatory
requirements that nobody wants to use it. So we have done an
in-depth analysis of it, removed a lot of those encumbrances,
added incentives, and the new rules for Section 3 will be
coming out this summer.
Mr. Posey. Excellent. Well, again, my time is about to
expire, Mr. Secretary, but again, I want to thank you for your
service and express that I am embarrassed by the way you are
treated in this committee.
Secretary Carson. Thank you.
Mr. Posey. I yield back.
Chairwoman Waters. Thank you very much.
Let me remind you, Members will refrain from impugning the
personal motives of other Members.
The gentleman from California, Mr. Sherman, is recognized
for 5 minutes.
Mr. Sherman. Madam Chairwoman, the Member controls their 5
minutes. The witness controls the 5-minute opening statement,
and many of our witnesses have an outstanding bully pulpit
outside this room. To then turn and say to Members that they
don't control even their 5 minutes is a denigration of our role
as members of this committee.
As to affordable housing, the witness does point out that
there are barriers to the creation of more rental units, and we
need many, many hundreds of thousands built. We need to keep
interest rates low. Zoning in most cities makes it impossible
to build rental housing in neighborhoods where people are not
poor.
And we can say we don't discriminate against poor people.
We just discriminate against people who don't want to live 6
families to the acre or 4 families to the acre. You cannot
build affordable rental housing 6 families to the acre.
And we also have the fiscalization of land use planning
where cities are financed often based on the money they can get
from commercial development, and they fight in my State over
who can prevent housing from being built on certain empty
acreage. If they can only get an auto dealer there, they get
the sales tax. So the fiscalization of land use planning also
keeps cities from allowing rental housing to be built.
I know Mrs. Maloney is not here, but, Mr. Secretary, I want
to thank you for being perhaps the only person in your
Administration to support comprehensive immigration reform,
reform which would have provided and which would provide legal
status for the families that Mrs. Maloney from New York is
concerned about.
As to somewhat more mundane matters, the FHA has specific
mortgage requirements, servicing requirements--I am talking
about mortgage servicing--some of which are antiquated. In your
ongoing efforts to make the FHA program more attractive to
lenders, what is HUD doing do better align FHA servicing
requirements to those of GSEs?
Secretary Carson. Well, one of the things that we are doing
is working with the Justice Department on the False Claims Act,
which has driven away quite a few of the lenders who are
concerned about nonmaterial mistakes and the consequences for
them, and that will open up a lot more borrowing options for
people.
Mr. Sherman. Do you see a need for legislation for us to
somewhat correct the False Claims Act, or can this be done
administratively?
Secretary Carson. We are going to try to do it at the
administrative level, but I appreciate the implication that you
would help us if legislation is needed.
Mr. Sherman. Okay. The Rental Assistance Demonstration
program (RAD) focuses on public housing authorities. The
program allows public housing authorities to convert housing
properties at risk of obsolescence into project-based vouchers
under Section 8. Are you familiar with the RAD program, and do
you think it is effective?
Secretary Carson. I am very familiar with it. It is a
spectacular program. Already, we have been able to convert well
over 100,000 units and contribute $7 billion towards capital
needs. It is one of the most spectacular programs, and one of
the things that would help us tremendously legislatively is to
lift the cap on RAD. Right now, it is at 455,000 units. There
are so many places across the country that are requesting it,
and there is absolutely no reason that it shouldn't be lifted.
It has already been demonstrated to be extremely effective.
Mr. Sherman. Thank you, and we should look at that.
Now, the FHA is concerned about people having down
payments. Some get assistance from their families. Some get
assistance from government entities. And the differentiation in
default rates is, like, 0.2 percent between whether you get aid
from the government, a government entity, or a family member,
and yet you are being pretty restrictive on the government
entity aid. And this particularly affects some Indian Tribes,
who are being told that they can only make loans or provide
rental assistance in their own geographic area, which can be a
small reservation. Can you look at this?
Secretary Carson. Yes. We are in the process of looking at
that. As you know, there has been a 90-day delay on that, and
we are, in fact, looking at it, but it is also in litigation,
so I am not really free to talk too much about it.
Chairwoman Waters. Thank you very much.
The gentleman from Missouri, Mr. Luetkemeyer, is recognized
for 5 minutes.
Mr. Luetkemeyer. Thank you, Madam Chairwoman.
I am over here, Dr. Carson. Thank you, Dr. Carson.
Dr. Carson, one of the areas this committee has examined at
length in this Congress is a lack of affordable housing in this
country. A main cause for the shortage of affordable housing is
the regulatory burdens that increase the cost of the mortgage,
which you described a minute ago, actually for some types of
housing, 32 to 40 percent.
One pending rule HUD should be focused on that affects the
affordability of housing is the impending Current Expected
Credit Loss accounting standard, or CECL. This accounting
standard requires banks to incur the full loss of a loan at the
moment it is originated. I have heard concerns about CECL from
numerous industries including regional banks, credit unions,
REALTORS, and home builders.
Many of these concerns stem around housing affordability.
According to the National Association of Home Builders, who
have testified in this committee twice over the last 4 or 5
months, an increase in the cost of a house by $1,000 prices
100,000 people out of a home.
My question to you this morning is, have you looked at the
effects of CECL and what they could have on the ability of
someone to afford a home?
Secretary Carson. Yes, we have. It is difficult when you
are trying to project out into the future risks of that nature,
and we are in the process of studying that very carefully. We
don't want to make a mistake on that.
Mr. Luetkemeyer. Are you coming up with a study on the
effect of the individuals, the number of folks, the effect on,
you know, that you are having to reserve and what kind of
reaction you have to come up with to increase those reserves?
Secretary Carson. All of those parameters are being looked
at.
Mr. Luetkemeyer. So, if you have to increase your reserves,
what is the source of income for you?
Secretary Carson. Excuse me?
Mr. Luetkemeyer. I said, if you have to increase your
reserves, what is the source of income by which you would be
able to do that?
Secretary Carson. Where would the money come from to be
able to do that?
Mr. Luetkemeyer. Right.
Secretary Carson. I am not sure.
Mr. Luetkemeyer. You would have to increase your guarantee
fees, perhaps?
Secretary Carson. That is one suggestion.
Mr. Luetkemeyer. Okay. If that happens, that increases the
cost of the loan, which home builders say keeps people from
having access to the loan, right?
Secretary Carson. Yes. You have to look at all the possible
sources and model it out to see what the long-term effect is.
Mr. Luetkemeyer. And this is going to affect the GSEs as
well. Have you been looking at that effect? Have you talked to
Freddie Mac and Fannie Mae to see how this is going to impact
them in any sort of coordination with all of these other
government agencies that it may or may not impact?
Secretary Carson. Well, we do talk about that. I will be at
an FHA meeting this afternoon, actually. I am sure that topic
will come up.
Mr. Luetkemeyer. Interesting. So are they monitoring this?
Are you aware of it? Are they--
Secretary Carson. I'm sorry?
Mr. Luetkemeyer. Are they monitoring it? Are you aware if
they are monitoring this or coming up with studies to look at
the costs that they may incur, what they may do to react to
this?
Secretary Carson. I am not sure what you mean.
Mr. Luetkemeyer. Okay. Well, in your communications with
them, are they looking at how to increase the reserves? Are
they going to borrow money from the Treasury? Are they going to
increase the guarantee fees? Have you discussed that at all
with them, or is that part of the meeting this afternoon?
Secretary Carson. They are looking at, how do they backstop
themselves. Right now, in conservatorship, they don't have to
worry about that. If they come out of conservatorship, that
becomes a very different question about where that money comes
from, and there are multiple discussions about where it would
come from.
Mr. Luetkemeyer. Okay. One of the questions that you were
talking about or answering a while ago was with regards to the
cost drivers for affordable housing, and I guess my question to
you is, how much authority do you have at HUD, if any, with the
ability to waive certain rules and regulations or change
certain rules and regulations or suspend certain rules and
regulations? Are there certain rules and regulations that you
have the ability to do that with, or are your hands pretty well
tied, and Congress has to be the one to change the way that
this all works?
Secretary Carson. The vast majority of the regulations are
done at a local level, so we can't change those. What we can do
is try to incentivize people at the local level to begin to
look at some of these rules and to address them, and they get
preference points when they do that, and a lot of people are
actually starting to realize that and do that.
A lot of these regulations have been on the books for 10,
20, 50, 100 years. They have nothing to do with what is going
on now. The density requirements frequently don't take into
account some of the new modern building techniques.
And, as far as the whole affordability issue is concerned,
in addition to financial issues, we have to look at modern
technologies that have come to the fore. And I can continue
that at some point.
Mr. Luetkemeyer. My time has expired. Thank you very much
for your service, sir.
Chairwoman Waters. The gentleman from Missouri, Mr. Clay,
who is also the Chair of our Subcommittee on Housing, Community
Development, and Insurance, is recognized for 5 minutes.
Mr. Clay. Thank you, Madam Chairwoman.
And, Mr. Secretary, let's discuss the Wellston, Missouri,
Housing Authority, which HUD has had in receivership for the
last 22 years, and as you are aware, there is a planned
demolition of a number of units, which will displace tenants,
uproot lives, and cause utter confusion in those lives.
Children will be forced to change schools, and some parents
will have drastic changes to their life and work schedules.
As you know, we are looking at several options, which we
have discussed, including the grand families concept and
Section 202 housing. Could you please walk us through a
displacement such as this and tell us, what does HUD do to
serve the affordable housing needs of these residents and
ensure that they have access to safe, affordable, and modern
housing?
Secretary Carson. Thank you for that question. And thank
you for the times that we have had a chance to discuss this and
to visit in your district, where the people seem to like you
very much.
Certainly, we are very concerned about any time people have
to be displaced, which is why we have Tenant Protection
Vouchers. Not only do we provide those, but we provide
relocation services to help those individuals to be able to
adjust. And in some cases, they end up finding places that they
like considerably better, and they don't even want to come back
after the problem has been rectified. But we do want to give
them those choices.
We also have been working very vigorously with the Housing
Choice Vouchers to make them more palatable because there are
many places where landlords won't accept them. And we have done
some studies to find out why they won't accept them. Some of
them are really quite interesting.
For instance, in San Diego, there was great resistance. And
then the City guaranteed all the landlords that they would
repair any damage that was done, because the landlords were
afraid that these Section 8 people would destroy their
property. It cost the city almost nothing because people were
not destroying their property. They weren't going to destroy
their property. They have been waiting for a long time to get
this voucher; they are not going to do that. But sometimes you
have to fight the perception, and that was done. But there are
lots of other things that impact that.
But we look very carefully at how we can make sure that
those people are taken care of who are displaced.
Mr. Clay. And speaking of that, St. Louis County government
is considering an ordinance that will prohibit source-of-income
discrimination as far as housing vouchers are concerned, which
I think will address it at the local level.
Can you give us some examples of public-private
partnerships that could work for a community like Wellston, or
have you given that any thought?
Secretary Carson. I think there are many of them around the
country. Purpose Built Communities like East Lake outside of
Atlanta, which, as some people here probably know, was one of
the worst places in terms of crime, in terms of poverty, with
schools performing at the lowest level in the State. And
through the public-private partnerships, building of mixed-
income housing, bringing in grocery stores, places for
employment, they were able to convert that neighborhood
completely.
I went to one of the charter schools that they put in, a
high school. I was met by five students playing a harp. The
things that they had available were absolutely outstanding.
Those schools achieve at the highest levels in the State now,
better than many of the private schools.
So, can it be done? Absolutely. It needs to be done in a
holistic manner. Do we have the ability to do that in this
country? We absolutely do. We will never get it done if we
fight each other, but if we recognize the problem and begin to
work with each other, everybody has good ideas.
Chairwoman Waters. Will the gentleman yield, Mr. Clay? Do I
hear a commitment to Wellston?
Mr. Clay. We were getting to that.
Chairwoman Waters. The gentleman is committing to helping
to do--
Mr. Clay. I will ask the question.
Chairwoman Waters. Thank you.
Mr. Clay. Go right ahead.
Secretary Carson. Of course, we are going to be very
interested in Wellston, and, of course, we are going to be
interested in helping there.
Mr. Clay. And you are committed, HUD is committed to
working with us in that community to make sure that--
Secretary Carson. And we want to continue to work with you
on that, absolutely.
Mr. Clay. I appreciate it.
My time has expired, and I yield back, Madam Chairwoman.
Thank you.
Chairwoman Waters. Thank you very much.
The gentleman from Wisconsin, Mr. Duffy, is recognized for
5 minutes.
Mr. Duffy. Thank you, Madam Chairwoman.
Welcome, Dr. Carson. I imagine, as--I almost said a former
doctor, but as a doctor, you probably prefer to deal with the
root causes of someone's health problem as opposed to just the
symptom of the problem.
Secretary Carson. Absolutely.
Mr. Duffy. And so you are somewhat getting bludgeoned by my
colleagues about your rule on noncitizens and your rule that
actually follows the law that was passed by Congress, but I
would note that it seems like, in the last several months, we
have 50,000 illegals coming across our border every month. And
when there is an open border and people continue to flood into
our country, you are going to have more problems of illegal
parents and maybe U.S. citizen children.
And so maybe instead of bludgeoning you as the Secretary of
HUD, maybe the Congress should actually deal with securing the
southern border, recognizing it is a crisis, and take
responsibility ourselves, which I would encourage my friends
across the aisle to put up the mirror and say: Maybe we have to
deal with this problem; maybe it is not Dr. Carson's fault.
Secretary Carson. That makes far too much sense.
Mr. Duffy. I would agree with that.
So, maybe just in regard to your rule, you are basically
saying, ``I am going to follow the law, and I am going to let
U.S. citizens take a priority in housing that comes from HUD.''
Is that right?
Secretary Carson. That is correct. Although, I am open. I
am not a hard nose. So, if someone can tell me how to follow
the law and still take care of their issue, I am all ears. I am
ready to hear it.
Mr. Duffy. So, in the way you structured this rule to
actually follow the law that was passed by Congress, did you
give some extra time for the Congress to act and maybe change
the law?
Secretary Carson. Yes. They can have a 6-month deferral,
and they can renew that twice. So that is 18 months, which
should be plenty of time if Congress was actually interested in
solving the problem.
Mr. Duffy. And, again, I just want to put a period on the
point that this problem is getting worse, and this is not
compassion. I was just at the border. And to look at what is
happening to families and the journey and the sexual assaults
and the indentured servitude of people who come up through
cartels and have to work for the cartels once they get here,
this is not compassion. What you experienced is not compassion.
But I applaud you because I believe, as an American citizen, we
should put Americans first.
Secretary Carson. Absolutely. And if we are not going to be
a nation of laws, what happens if we say, ``We can ignore this
one, we don't like this one, but this one we will do.'' Where
does that lead in the long run? To nothing but chaos.
Mr. Duffy. To chaos. I want to pivot, because you had
mentioned maybe one of the pathways forward is to look at the
cost of housing. Why has it become so unaffordable? Again, we
are looking at the symptom of increased cost.
Why don't we look at the root cause? And you mentioned I
think regulation and zoning that can drive up the cost of
housing. Are there any examples where you have local
governments that have actually tried to address their zoning
rules and their regulations and maybe allow for more
development of multifamily structures that can drive down
prices but also improve the stock?
Secretary Carson. Yes, there are several cities who have
engaged in that. They have come to recognize one very important
thing: A lot of these barriers are caused by ``NIMBYism,''
``not in my back yard-ism.'' And I actually understand that,
because the most valuable thing that most people have is their
home.
And they have in their mind the model of the 1960s and
1970s, where the government would come in and build these
massive structures with no forethought, no holistic planning,
leave, and they would deteriorate, and nobody wants that around
them. But, of course, we have to get the message out that the
government doesn't do that anymore. Now we do public-private
partnerships. We do things that match the community because we
want nurses and policemen and firemen and teachers to be able
to live in the same community where they work. That doesn't
decrease the value; I think that increases the value of the
community.
Mr. Duffy. But with a little restructuring on zoning and
rules, we can actually lower the cost of housing, right?
Secretary Carson. Absolutely.
Mr. Duffy. I wanted to get to Puerto Rico. My time is
almost up, but I know that you have allowed for what, $1.5
billion, $1.8 billion in disaster relief to go to Puerto Rico.
You have some strings attached, which I agree with. And any
objections from the Puerto Ricans thus far in how you
structured the money?
Secretary Carson. None whatsoever. The Governor and I have
been working together. And they have $1.5 billion immediately
available to them, of which they have used $250,000.
Mr. Duffy. $250 million or $250,000?
Secretary Carson. $250,000.
Mr. Duffy. I yield back.
Chairwoman Waters. The gentleman from Georgia, Mr. Scott,
is recognized for 5 minutes.
Mr. Scott. Thank you very much, Madam Chairwoman.
Dr. Carson, over here. It's good to have you back again.
Secretary Carson. Thank you.
Mr. Scott. Dr. Carson, are you familiar with own-to-option
mortgage programs?
Secretary Carson. In general, yes.
Mr. Scott. In general. Well, the National Urban Institute
has recognized this as an excellent way to move people into
home ownership. Have you reviewed this? How receptive are you
to it?
Secretary Carson. I am very receptive to the idea,
recognizing that home ownership is the principal mechanism of
wealth accumulation in this country. The average renter has a
net worth of $5,000; the average homeowner $200,000. That is a
fortyfold increase. So we are looking at multiple ways,
including renter-to-ownership models, to increase home
ownership, particularly amongst some of the demographics that
have fallen behind.
Mr. Scott. That is very good, and I encourage you to
continue that as well.
Now, let me go to a project you had mentioned some time ago
as being one of your real projects that you can take some
authorship in. It is called EnVision Centers. Could you tell us
about that? I have spoken with some of the public housing
authorities in my district down in Georgia, like East Point
Housing Authority and many others, and they seem to be very
excited about this. Tell us a little more about that, will you?
Secretary Carson. Yes. Well, the idea comes from the Bible.
Proverbs 29.
Mr. Scott. Hold on. It comes from the Bible?
Secretary Carson. From the Bible.
Mr. Scott. Very good.
Secretary Carson. Proverbs 29:18 says, ``Without a vision,
the people perish.'' So we said, ``We will call these Vision
Centers.''
But then we thought everybody would think they were getting
glasses, so we called them EnVision Centers.
But it is a place where we can bring together all of the
various services that are available to move people towards
self-sufficiency. So, instead of them going to 17 different
places, they can get all of these services under one roof. We
had the first demonstration of 17 cities, and 13 of them have
opened already. Some of them are doing extremely well.
And, this is just a model, which I think is going to
explode very soon, and we are going to have a lot of these.
Mr. Scott. Let me ask you this now: You mentioned when you
made that announcement last April, I believe, you did say, as
you just mentioned, 13 centers opened, but, to our available
knowledge that has come to us, only 3 have opened, not 13, so
there is some discrepancy there. Are you aware of that?
Secretary Carson. There may be. But there was actually an
article in OAN this week that details the 13 that are open.
Mr. Scott. Okay. That is good. EnVision Centers. I hope you
continue that. Folks in Georgia in my district are very excited
about it, and so I look forward to working with you.
Now, tell me and give me a very good update and let me know
because the last time you were here, you and I had a very
spirited conversation about your desire--or it wasn't your
desire. It was, as you said in your statement, somebody said
that we ought to zero out the Community Development Block Grant
Program.
After you and I talked, tell me, are we secure with that
program, or do you and I have to go to battle once more on
that?
Secretary Carson. I don't think we ever have to go to
battle, regardless of whether we agree or not.
Mr. Scott. Well, let me tell you, if you all move 1 inch to
zero out the most effective program that cities and States and
counties use to lift themselves up and be the cities and towns
that they need, yes, we will go to battle. I am asking you,
will we have to go to battle? Are you all still planning to
zero out the budget for the CDBG program, yes or no?
Secretary Carson. Let me just say I don't think we ever
need to go to battle, regardless of anything.
Having said that, as I have said before, the CDBG program
has been helpful in many cases.
Mr. Scott. No. I know my time is short, but have you moved
away from zeroing out the budget, yes or no?
Secretary Carson. It is not a yes-or-no question.
Mr. Scott. Yes, it is.
Secretary Carson. You just want to make it into a battle.
It doesn't need to be a battle.
Mr. Scott. No, I want a yes-or-no answer. Are you going to
do it, or are you not? Apparently, you all still have that on
the table.
Chairwoman Waters. Mr. Scott, your question was not
answered.
Mr. Barr, the gentleman from Kentucky, is recognized for 5
minutes.
Mr. Barr. Thank you, Madam Chairwoman.
And, Mr. Secretary, thanks for being back in front of our
committee. And I think you are doing a great job. I appreciate
the good work that you are doing, despite some of the criticism
that you are receiving here today. And I applaud you and this
Administration for breaking from the tired old past, the old
ways of doing things where you just threw money at welfare
programs and expected to cure poverty.
Well, we know after $20 trillion since the war on poverty
was declared in 1964, that didn't work, but what is working is
the Trump economy. What is working is tax cuts and
deregulation. We have the lowest unemployment in 50 years. We
have the lowest unemployment among African Americans, and
Hispanic Americans in 50 years of all time for those
categories.
We see wages rising faster today than we did since before
the Great Recession. We are seeing jobs being created, more
people getting off of food stamps, more people moving into
self-sufficiency. So Opportunity Zones and these policies are
producing growth and lifting people out of poverty and away
from government dependency, and I applaud you for that.
Secretary Carson, I want to thank you for taking the time
to come to Kentucky and visit St. James Place and the Hope
Center and the work that the people are doing there, the
nonprofit community, the faith-based groups that are working
with people who are recovering from addiction. And as we
discussed on your visit, the opioid crisis has hit Kentucky
very hard. This issue has had a tragic impact on countless
families across our State and across the country.
According to the National Institute on Drug Abuse, every
day, more than 130 people in the United States are dying as a
result of opioid overdoses, not just pills but heroin and
Fentanyl as well. Last Congress, as you know, we passed H.R. 6
to help combat the opioid epidemic, and included in this
legislation was a bill that I introduced, the CAREER Act. When
fully implemented by your agency, this legislation will create
a pilot program to help individuals in their recovery from
substance abuse disorder to secure stable transitional housing
and job training.
And I want to thank you and HUD for taking the first step
towards implementation of this program with the publication of
a funding formula in March. That said, as I indicated, 130
deaths a day. We have to move these pilots forward as
expeditiously as possible. Is it possible for HUD to move
forward with this pilot in this fiscal year?
Secretary Carson. Yes. We are already moving forward with
it, recognizing, as you said, that this is a national tragedy.
And we need to actually stop and look at, how do we integrate
the various agencies, Federal, State, and local agencies, in
order to take care of this, because it is a national problem?
And what people need to recognize about opioids is you can get
hooked on them in a matter of a week or two, but the changes
that occur in the brain frequently take 12 to 18 months to
correct.
So, unless you are involved in an ongoing program, you are
probably not going to be successful; you are going to have
relapses. And then that continues to drive up the cost. So we
really need to have a much more comprehensive way that we look
at it. The CAREER program is going to help us do that.
Mr. Barr. Thank you for your leadership and for working
with us to move that program forward as quickly as possible so
that we can save lives and move folks out of recovery and into
long-term jobs and an addiction-free life.
Just yesterday, sir, HUD rescinded its May 2017 carport
letters that did not go through the proper administrative
process to begin with and required alternative construction
approval for all homes that were built carport-ready. I want to
thank you for this because that policy proposed a costly and
time-consuming hurdle for the production of manufactured homes
that negatively impacted consumers and forced many
manufacturers to stop offering these carport-ready homes.
We talked about affordable housing. Overregulation from HUD
in the past has been an impediment to affordable housing,
particularly manufactured housing. But we still see that this
Manufactured Housing Consensus Committee (MHCC), this advisory
committee, has put forward a lot of recommendations like this,
and HUD still has not finalized more than 100 recommendations
by the MHCC, some going back a decade. What can be done to
change the internal processes at HUD so that more of these
recommendations are more promptly adopted?
Secretary Carson. Well, we have beefed up the division that
is working on manufactured housing recently so that they are
not just sort of treading water; they are able to really make
forward progress right now.
But, on the whole concept of affordable housing,
manufactured housing is a critical part of that. About 10
percent of single-family housing units are manufactured housing
units. The technology has increased dramatically so that it is
better than site-built housing in many cases.
Mr. Barr. Thanks for your attention to that, sir.
I yield back.
Chairwoman Waters. The gentleman from Texas, Mr. Green, who
is also the Chair of our Subcommittee on Oversight and
Investigations, is recognized for 5 minutes.
Mr. Green. Thank you, Madam Chairwoman. I thank the ranking
member as well. I thank the witness for appearing today. And I
would like to also thank Mrs. Wagner. She initially called to
my attention this CDBG-DR program, the possibility of getting
something done. And she and I have worked together to try to
perfect it to the extent that it can be perfected. So I am
grateful to her. I am also grateful to our staffs for working
on this. While she and I presented concepts, the staff actually
worked together to make sure that our ideals were achieved to
the extent that they can be.
So let's just talk for just a moment about the time that
you mentioned earlier with the CDBG-DR disaster relief. For
edification purposes for persons who may be listening and not
privy to information about this, this program is something that
comes into being after we have had a disaster, and we currently
reinvent the wheel each and every time. We don't always have
the institutional knowledge available to us. People move on.
And we sometimes have to not only reinvent the wheel; we have
to reinvent some of the various components. It would be a good
thing, in my opinion, to codify this program.
Can you speak briefly to the timeline and how the timeline
could be benefited by codification?
Secretary Carson. Yes. There is no question that,
particularly early on, after a disaster, some of the
coordination that has to occur between small business, FEMA,
and HUD is duplicative. And there are ways that we can
streamline that process.
And then some of the basic things that have to be done in
order to get the grant money out is absolutely the same thing
over and over again. And that is what I meant when I said, if
we can get those things codified, we can start out on second
base on our way home rather than having to go completely around
the whole thing.
So what you are talking about makes 100 percent sense, and
I am 100 percent in agreement with it, and we are going to be
continuing to work with your group to make sure it gets done.
Mr. Green. Thank you for the announcement of support.
Let's move on to H.R. 123, which is the FHA Additional
Credit Pilot Program. There are many people who are first-time
home buyers who have thin credit, but they do pay utilities--
light bill, gas bill, water bill, phone bill--and they do this
religiously. They are not late. But these things are not always
scored. It can be done on an individual case-by-case basis.
This is important not only to the person who may be able to
purchase a home, but it is also important to the rest of us
because, when that home is purchased, washers and dryers and
curtains and other things are purchased that will impact the
economy. I am hopeful that you will be able to support the FHA
Additional Credit Pilot Program. It doesn't mean that other
credit options that are scored will cease to be scored. This is
not a substitute; it is in addition to.
Would you comment, please, on this program and the
possibility of your supporting it?
Secretary Carson. Well, there is no question that some
people come with a very thin credit record, and they are placed
at a very significant disadvantage. And I was recently looking
at a study in which they looked at how a person paid their rent
and how often they paid on time, how often they paid late, and
they factored that into the credit rating. And in most cases,
it actually improved their credit score and made it better. So
we are doing some more in-depth looking at that.
The FHA Commissioner and I have been talking about this,
alternative credit scores, again, recognizing that it has to be
done in a responsible way because you remember, before the
housing crisis, people were going through some things that
weren't quite legitimate and put a lot of people into houses
that they could not afford. And as a result of that, they lost
their house, they lost their credit, and they lost their future
opportunities. We certainly don't want to get into that
situation.
So we will study it carefully, but I am very open to that
alternative credit, and I appreciate your working on that.
Mr. Green. I thank you, and I look forward to our continued
work to bring these two programs to fruition.
Thank you, Madam Chairwoman.
Chairwoman Waters. The gentleman from Colorado, Mr. Tipton,
is recognized for 5 minutes.
Mr. Tipton. Thank you, Madam Chairwoman.
And, Mr. Secretary, thank you for being here, and I
appreciate the comments you have made so far today.
I did want to bring up some local issues for us in
Colorado. I had the opportunity to be able to visit with some
of our local housing authorities. And in Colorado, they have
been indicating that it seems HUD has a one-size-fits-all
approach to its guidelines.
One program I have heard to be particularly challenging for
some of the smaller housing authorities is the Real Estate
Assessment Center (REAC) program. They have been suggesting
that the inspection guidelines are stringent and difficult to
be able to meet, especially in physical inspection demand by
the staff, who need to be able to visit multiple scattered
sites.
The GAO recently released a list of recommendations to be
able to improve the Physical Inspection Program process and
oversight for the inspectors. Has your Department reviewed some
of these recommendations and considered including them into the
execution of the program?
Secretary Carson. Yes. This is an area that has really
captured my interest because I was so interested when I came in
and found people getting passing REAC scores in places that I
wouldn't want a dog to live in and vice versa. It just made
absolutely no sense, and it was so inconsistent.
So we are doing a top-to-bottom analysis of the whole REAC
scoring process, changing it. We have moved out some of the
inspectors who had questionable character and brought in
another host of inspectors. But we are also looking at the way
that we do the procurement of the inspectors. Before, you would
take the lowest bidder always, and sometimes you get what you
pay for. So you obviously have to be cognizant of that.
Mr. Tipton. Great. Thank you for that. And I would like to
be able to get your opinion just in regards to regulations,
their flexibility. Do you think you have enough flexibility to
be able to accommodate large and small operators as well as
urban and rural areas?
Secretary Carson. Well, we always would like more
flexibility. There is no question about that. It gives us a lot
more ability to move quickly and to be able to do things. But
we will manage with what we have.
Mr. Tipton. And I appreciate that. That is really one of
the challenges. We obviously have legislators from urban areas
who also represent a rural area. And so some of the distinct
differences between being able to accommodate and to be able to
be responsive to be able to meet those needs, I think is very
important.
I have heard from some of my constituents that programs
like the housing authority scoring system don't account for
important considerations like individual market conditions.
Have you given any thought to making it a more geographically
driven approach to some of the regulations?
Secretary Carson. I am always in favor of local control and
not heavy-handed Federal bureaucracy. So, if you have some
specific suggestions about things that we should be doing to
make that even more available, I am very happy to work with you
on that.
Mr. Tipton. Thank you. And we will follow up with you on
that. We are trying, like you, to be able to have it locally
driven as best we can to be able to meet those needs at home,
and so we will be happy to reach out to you and your office.
And, Mr. Secretary, just one last question: One worry that
we have heard on the board in Colorado is that, at all areas of
government, we are seeing Federal dollars that are allocated
for State distribution that do not make it out of the
metropolitan areas into the rural areas. A lot of the grants
that will go to our States, unfortunately, sometimes stay just
in the large metropolitan areas.
Do you see a better way to make sure that we are reaching
all of the constituents and not discarding people who live in
rural America?
Secretary Carson. Well, thank you for mentioning that. One
of the reasons the Opportunity Zones were left up to the
Governors in each of the States is so that they could target
some of the rural areas. As a result of that, about 40 percent
of the Opportunity Zones are in rural areas. So I think that is
going to be a tremendous help. Manufactured housing is also a
big item in rural areas, twice as much as you find them in
suburban and urban areas.
So anything that we can do to enhance the manufactured
housing industry is going to be helpful for the housing
situation in rural areas.
Mr. Tipton. Great. Thank you again for being here.
I am out of time. I yield back.
Chairwoman Waters. The gentleman from Missouri, Mr.
Cleaver, who is also the Chair of our Subcommittee on National
Security, International Development, and Monetary Policy, is
recognized for 5 minutes.
Mr. Cleaver. Thank you very much.
Thank you for being here, Mr. Secretary. I am glad you
brought up the Opportunity Zone because that is kind of where I
wanted to hang out for a few minutes. I have gone through the
last iteration from the Treasury Department's rulemaking
period, and I am assuming that there are going to be some
additional rules coming out. What they are calling it so far is
general rules.
I have read everything that comes out on Opportunity Zones,
and so my concern is, right now, I am not sure--well, let me
ask it this way: What is HUD's role going to be? Treasury seems
to be doing the rulemaking. And since there is no application
process, how will HUD fit into all this?
Secretary Carson. Well, 35 million Americans live in
Opportunity Zones, and 2.4 million HUD-assisted individuals
live in Opportunity Zones. The household income in Opportunity
Zones is about 37 percent below the State levels. High school
graduation level, 22 percent don't graduate in Opportunity
Zones versus 13 percent statewide.
So what we are talking about are the people that HUD has a
tendency to serve are in Opportunity Zones. That is the reason
that HUD has been selected to Chair the Opportunity and
Revitalization Council, which consists of 16 Federal agencies
and Federal/State agencies, so they can focus their attention
on the Opportunity Zones and remove the barriers quickly,
rather than having them go hither, thither, and yon. And so,
obviously, HUD will be playing a very significant role.
Mr. Cleaver. But the regulatory responsibility will remain
with Treasury?
Secretary Carson. Well, remember, all the regulations come
from a variety of different agencies. That is why we have 16
different ones. And we will be able to coordinate and focus
their attention and remove the regulations quickly that need to
be removed. Some regulations are important; we recognize that.
Mr. Cleaver. So if an Opportunity Zone fund is presented
with an investment to capital gains taxes of a place in this
fund, does a NOFA come from HUD or--
Secretary Carson. No. If you are talking about a tax issue,
that would be Treasury.
Mr. Cleaver. So that the actual monitoring of it--this is a
question--would be at the end of the year? If you don't apply,
you go in, and then you actually deal with it during the tax
season.
So I am just hoping that there is not a situation where
opportunity funds are supposed to invest at least 90 percent of
the money into the project, and let's say something goes awry.
It is not going to be known until the end of the year, is that
right?
Secretary Carson. In terms of the financial consequences,
perhaps. But we have an Executive Director who has an office,
so that we can get real-time feedback all the time so the
program can be changed as we roll it out.
Mr. Cleaver. Okay. That is the part I was not familiar
with. Will the Director be in HUD or--
Secretary Carson. The office is in HUD. Scott Turner is his
name.
Mr. Cleaver. Okay. Do you have any idea when the final
regulations--when it first came out, we had a two-pager, and
they were saying this is going to be the least regulated
project. And then we got 2 or 3 weeks ago something that looked
pretty thick. And so I am assuming that the final would be
extremely thick or much thicker.
Secretary Carson. Most of the regulations have been put
forward already in the first two tranches. The last tranche
should be relatively small. And I think the rules are pretty
well set out at this point. And a lot of money is coming in; a
lot of activity is occurring.
Mr. Cleaver. Yes. Thank you, Mr. Secretary.
Chairwoman Waters. Thank you very much, sir.
The gentleman from Texas, Mr. Williams, is recognized for 5
minutes.
Mr. Williams. Thank you, Madam Chairwoman.
And thank you, Secretary Carson, for being here today. In
2015, you wrote an op-ed entitled, ``Experimenting With Failed
Socialism Again'' about the previous Administration's
Affirmatively Furthering Fair Housing Rule. Under your
leadership, HUD has committed to reexamining this rule.
I want to thank you for being a strong capitalist, first of
all, and for your service to this country. So can you elaborate
on why a more socialist heavy-handed government approach to
fair housing would fail low-income individuals and minorities?
Secretary Carson. Yes. Well, one of the reasons that I took
this job is because I was very concerned about what was
happening, particularly to a lot of disadvantaged people in our
society, in that we collectively, the government, are actually
keeping people mired in poverty and dependency because we keep
going down the same track, whether Republicans or Democrats.
And so we want to find ways that we can liberate people
from those kinds of things, and all of our policies are really
aimed at doing that. Affirmatively Furthering Fair Housing, do
I want to do that? Of course, I want to do that. But there was
a system in place, an assessment tool, that basically just gave
you statistics, and created a big screen with purple dots and
pink dots and green and yellow, if you move some of the pink
ones here and the yellow ones here. I am not sure that that
actually solves the problem.
Why do you have segregation in housing? It is not because
George Wallace is standing at the door blocking people; it is
because people can only afford to live in certain places. So
what we really need to do is ask ourselves, how do we liberate
people from that? That is why we have been spending so much
time and effort on looking at housing choice vouchers and how
to make them more palatable. That is why we have been looking
at ways to decrease the regulatory cost so that it is possible
to build another place, so we can build places like East Lake
and Purpose Built Communities.
That is why when we concentrate on community development,
we concentrate not only on the houses, but on the schools, on
grocery stores, on transportation, on all of the things that
allow people to thrive and move up. And that is why we try to
create programs that enable people to become self-sufficient.
That is why we provide the services and the information about
the services because it doesn't do good to have services people
don't know about.
Mr. Williams. Opportunities are a good thing. There has
been a lot of talk about the proposed rule that would prevent
noncitizens from receiving taxpayer-funded Federal housing
assistance. We have talked already about that today.
On May 15th, you received a letter from 12 Democrats that
stated the following, ``The Administration's approach to this
proposed rulemaking runs counter to the goals of providing
housing assistance to the most vulnerable Americans.''
I personally totally disagree with that. I define a
``vulnerable American'' as a legal citizen who is not receiving
any benefits at the cost of someone who is in the country
illegally.
So, Secretary Carson, because of your knowledge of the wait
list for these affected programs, I want to give you the
opportunity to justify this move of putting the needs of
American citizens first.
Secretary Carson. Well, it seems only logical that tax-
paying American citizens should be taken care of first. It is
just like when you get on an airplane and they make the
announcement: In case of an emergency, oxygen masks will drop
down; put yours on first, and then help your neighbor.
It is the same concept. And it is not that we are cruel or
mean-hearted; it is that we are logical. This is common sense;
you take care of your own first.
And it is also common sense that you ask yourself, why are
you having all of these kinds of problems? And the answer to
that is because we won't deal with the underlying problem. And
until we are willing, collectively, both Democrats and
Republicans, to sit down and solve the problem, we are going to
continue to have these problems crop up continually. And why
would we be fighting the symptoms when we can get to the root
cause of the problem?
Mr. Williams. Quickly, have illegal immigrants been able to
exploit the hole in HUD's regulations, and are you confident
that you will be able to fix this issue?
Secretary Carson. I think that we can fix this. We now have
the SAVE system through DHS, which allows us to identify people
quickly. This was not the case when this rule was put in place.
Mr. Williams. Thanks for your testimony.
Chairwoman Waters. The gentleman from California, Mr.
Vargas, is recognized for 5 minutes.
Mr. Vargas. Thank you very much, Madam Chairwoman.
And thank you, Dr. Carson, for being here. I appreciate it.
I do want to continue the questioning of my friend from Texas.
One of the things that wasn't mentioned here, and I am a little
bit surprised you haven't mentioned it, is actually if a person
is undocumented in a household, the aid is prorated. So the
person who is undocumented actually doesn't get any subsidy. It
is the child. It is the American citizen child who is, in fact,
helped.
That is one of the things that wasn't mentioned here, and I
thought it would have been up to now because, again, the law as
it currently stands and the rules say this, that those children
that are American citizens, they are helped, again, by
Americans, even though I would go, of course, and extend it
further. As a Christian, I don't make the difference between
someone who is undocumented or not. But the rules as they are
today say: No, we only take care of the child. That has not
been brought up in all of this conversation. It should have
been. My understanding is that is the rule today. Sir, am I
incorrect about that?
Secretary Carson. You are not incorrect. And, also,
interestingly enough, prorating, how do you prorate a roof over
somebody's head?
Mr. Vargas. By the number of people who are in there. You
are taking care of the child, and you do, in fact, prorate it
against anyone who is ineligible because of their legal status
or for some other reason. But the child is an American citizen.
And those 55,000 children are going to be somehow thrown
out into the street or something else. In fact, your agency
itself, you guys determined, your analysts, that it was going
to be more expensive to the Federal Government if this rule
goes forward. That is not our determination. My understanding
is that is your determination.
Secretary Carson. It is our determination. I thank you for
making that point because the reason it would be more expensive
is because the people who are on the waiting list are even more
needy than the ones who are in there. So, yes, we do need to
take care of them.
But, as I mentioned before, I would love to be able to take
care of everybody, but we have to do this within the framework
of the law. And if people don't like the law, they should
change it.
Mr. Vargas. Well, we do have a rule, actually, and it takes
care of it today. I have to say you did quote and I appreciate
it, Proverbs 18:17, and I believe there is a second part to
that. I believe--
Secretary Carson. 29:18.
Mr. Vargas. 29:18. I believe the second part says something
like: And those who--where there is no vision, people perish,
but happy is the man who follows the law for he is joyful.
Something like that. There is also Proverbs--Proverbs 29 is one
of my favorites. Also 7, I believe, goes something like: The
righteous care about justice for the poor, but the wicked have
no such concern.
Now, I don't believe you are wicked in any way. In fact, I
think you are trying to figure out how to propose something to
push reform--
Secretary Carson. Trying very hard.
Mr. Vargas. --and I don't necessarily disagree with that.
And I don't believe that this rule could have come from you. I
was there in 2013 when you spoke at the National Prayer
Breakfast. I go every Thursday to the Prayer Breakfast, and I
was the national co-Chair for 1 year. I don't think you are
mean-spirited at all. I disagree with some of your policies.
But I have to say, taking these 55,000 children and putting
them on the street I do think is mean-spirited. I don't think
it is your nature. I hope you review that.
Secretary Carson. It is not my nature to want to put
anybody out on the street, and that is why we provided the 18-
month period.
Mr. Vargas. Well, I hope and pray that you re-think that.
Again, I don't agree with all your policies, but I certainly
know we challenge your view of humanity and that you have been
a good person and tried to do the right thing. I hope you
review that.
I do want to ask about DACA recipients also. My
understanding has been that DACA recipients have been eligible
for FHA loans, and, in fact, I want to quote you, to make sure
this quote is correct.
I asked around after I read the story, and that is that
DACA recipients were being denied FHA loans by HUD
instructions. No one was aware of any changes that have been
made to the policy whatsoever. I am sure we have plenty of DACA
recipients who have FHA loans. So are you familiar with any
changes? Have you made any changes?
Secretary Carson. No. The same policy has been in place
since 2003, which was reaffirmed in 2015 by the previous
Administration. And we have not made any changes to that
whatsoever.
Mr. Vargas. Thank you. I hope that that becomes clear out
there in the community.
Again, I thank you for being here. Again, we disagree on
some issues, but I appreciate your openness also towards
comprehensive immigration reform.
Secretary Carson. Thank you for being able to disagree
without being disagreeable.
Mr. Vargas. Thank you.
Chairwoman Waters. The gentleman from Arkansas, Mr. Hill,
is recognized for 5 minutes.
Mr. Hill. Thank you, Chairwoman Waters.
Mr. Secretary, it's good to have you back before the
committee.
Secretary Carson. Thank you.
Mr. Hill. I am very pleased you made your second trip back
to the Second Congressional District in Arkansas. We
appreciated you coming to our State's Fair Lending and Fair
Housing Conference, and I heard a lot of positive remarks about
your comments.
And we want to have you back as we explore the Opportunity
Zones with Senator Scott down in the district. And what is
interesting is one of the Opportunity Zones also abuts one of
our Historically Black Colleges and Universities (HBCUs),
Philander Smith College, and to me that is a really interesting
opportunity because not only has the President asked you to
work on the Opportunity Zone issue, he has also empowered the
HBCU executive order to try to maximize all Federal resources
to enhance the position of our Historically Black Colleges and
Universities. So this could be a really interesting
opportunity.
When you were in Little Rock 2 years ago, you visited with
Our House, which is a housing homeless holistic approach. We
don't separate sort of the moral from the economic there, to
paraphrase Arthur Brooks. It is a holistic approach to
education and healthcare and childcare as well as getting
people lifted up and getting back to a productive life. And
they were very interested in potentially being an EnVision
Center partner to a local public housing authority.
Will there be another cohort where public housing
authorities can offer proposals for partnership?
Secretary Carson. Yes. We have a real operator in place now
when it comes to spreading those programs. So the initial
cohort was really to gain some information on how to do this
and make it work effectively. So, yes, that will be happening.
Mr. Hill. Good. Another area I have also listened to in my
district relates to our local public housing authorities and
their certification of landowners for use in Section 8
vouchers. And one of my City Council members, Doris Wright, and
I toured an apartment complex that, while it also has a good
mentorship program with a local church that helps with
childcare and mentoring the residents there, the conditions are
just deplorable, meaning the physical conditions.
Can you follow up maybe in writing with what the standards
are that a city council, a local city council should hold the
local public housing authority to on certifying that a
landowner is qualified for receiving a Section 8 voucher?
Secretary Carson. I think we can get that information to
you, no question about it. But we do trust to some degree the
landowners to be reasonable people and have some concern for
the people. And we do have some degree of oversight. But there
are legal remedies for people who abuse the tenants as well.
Mr. Hill. Yes. This was a pretty rough--and I am not
passing judgment either. I am not a lawyer. I am not a HUD
inspector. But when you do a cruise through this particular
complex and look at some of the conditions of the units, one
might question whether or not they are eligible for Section 8
money.
We have had a lot of talk about overcrowding today and
issues, and we passed legislation here in the Congress. I was
shocked when I first came to the Congress that New York, a big
city with a big demand for public housing, I think had a
waiting list and something like 500,000 units, and yet there
were tens of thousands of units that people were occupying who
were making too much money to be qualified to be in public
housing. And so Congress in the last couple of years reacted. I
think President Trump signed that into law.
Are we doing a better job of making sure if you are earning
too much money, that you have opportunities elsewhere to live
so that we can make room for some on these long waiting lists?
Secretary Carson. Well, we are trying to create an
environment where people feel freer to exit the supported
housing. And, it is sort of a catch-22, because we have also
gotten into a situation where, when people begin to climb the
ladder, we pull the ladder out from underneath them. And then
everybody else is watching that and they say: I am not climbing
that ladder.
So we have to be a little careful about the way that we do
that, allowing people to exit in a way that they will be able
to continue climbing that ladder and that they feel comfortable
going out there. And those are the kind of programs that we
have to be creating.
Mr. Hill. Thank you, Mr. Secretary.
I yield back.
Chairwoman Waters. Thank you very much.
The gentlewoman from Ohio, Mrs. Beatty, who is also the
Chair of our Subcommittee on Diversity and Inclusion, is
recognized for 5 minutes.
Mrs. Beatty. Thank you, Madam Chairwoman.
Mr. Secretary, I have several questions, and because of our
5-minute time period, I am going to try to get through them at
rapid speed. As you know, you were here before, and I am going
to ask you the same question that I have asked every one of
your colleagues. And I am very hopeful that you can give me a
yes on this.
Are you familiar with OMWI and what it is?
Secretary Carson. With whom?
Mrs. Beatty. OMWI.
Secretary Carson. Amway?
Mrs. Beatty. OMWI. Come on, Mr. Secretary. Now, I asked you
this when you were here last year, and you asked me to be nice
to you, and you turned to your staff. OMWI. And you have an
OMWI Director. And we wrote you a letter about it. OMWI, the
Office of Minority and Women Inclusion. Do you have an OMWI
Director? Do you work with the OMWI Director?
Secretary Carson. Well, of course, we have an Office of--
Mrs. Beatty. OMWI. Not Amway, OMWI. Do you know who that
person is?
Secretary Carson. We have--
Mrs. Beatty. Do you know who that person is?
Secretary Carson. I cannot give you the name.
Mrs. Beatty. Okay. Would you do me a favor, would you find
out, and would you send me a note back so we don't ever have to
repeat this again?
Secretary Carson. We can send you a note on that.
Mrs. Beatty. Okay, thank you. I had a lot of individuals
from my district, a group of people who are here today in the
audience who have questions about FSS. Are you familiar with
that program?
Secretary Carson. Family Self-Sufficiency?
Mrs. Beatty. Yes.
Secretary Carson. Yes.
Mrs. Beatty. So one of the questions is, what measures are
instituted to ensure public housing residents have fair and
equal access to FSS?
Secretary Carson. Well, anybody who comes and applies for
it or asks for it, unless there is any particular reason to
deny it--the problem is not so much that people are denied
access to it as that we don't have enough people asking for it.
Mrs. Beatty. Okay. So the next part, I represent Columbus,
Ohio, and I am very proud of my public housing authority. And I
meet with them on a regular basis. As you know, I have spent
more than 20-some years working in public housing and
relocation.
One of the things that my president and CEO asked me to ask
you about is increased funding for FSS, to allow them to grow
the program to serve more families, both in public housing and
in Section 8. It is my understanding that much of the money
goes for staffing versus service. So I would like to ask you if
you would look into that to see what we could do with that
program.
And I can also tell you and, Madam Chairwoman, I would like
to enter this document into the record, it is about my
district. All politics are local. We have an outstanding FSS
program, where we have had successful graduates; we have had in
individual financial counseling some 116 people.
Chairwoman Waters. Without objection, it is so ordered.
Mrs. Beatty. Thank you.
The other question is, now that you have had more time to
think, on the CDBG, my colleague Congressman Scott asked you
about those funds. Have you had more time to think that you
would certainly not cut those funds, or is that something you
want us to get an answer from after you consult with your team?
Secretary Carson. I have an answer for it. I wasn't given
an opportunity to finish it. First of all, let me just say with
Columbus, there is a tremendous job with transitional housing.
Mrs. Beatty. Thank you.
Secretary Carson. One of the best in the country.
As far as CDBG, as I was saying, it has done a lot of good
things. The problem is that the formula is sometimes
inappropriate. For instance, it says to give this money to this
group if the houses were built before 1940. Well, a lot of
those houses are million dollar mansions.
Mrs. Beatty. Okay. And I hate to interrupt you, but my time
is running, and I have just one more question I want to ask.
Secretary Carson. So the program needs to be modified.
Mrs. Beatty. Okay, thank you. Also, I was talking with some
friends and colleagues. As we look at the number of teens who
are couch surfing, the number of single moms, would you be
interested in having a dialogue with community leaders?
I have talked to people who run programs like Susan
Taylor's program, like public housing, and they feel we should
be doing more creative things in helping our young folks in the
housing areas, which helps them with their entire lifestyle.
Would you be interested in doing something like that?
Secretary Carson. We are very interested in that. I had an
opportunity to do some of that with Senator Collins in Maine
recently. It is an area that needs attention. And Jean Lin Pao
is the person who heads up the Office of Small and
Disadvantaged Business Utilization.
Mrs. Beatty. Thank you.
Chairwoman Waters. The gentleman from Tennessee, Mr.
Kustoff, is recognized for 5 minutes.
Mr. Kustoff. Thank you, Madam Chairwoman, and thank you,
Mr. Secretary, for coming today. You have had a number of
members thank you for coming to their district. I also thank
you for coming to Memphis and to west Tennessee--
Secretary Carson. Absolutely.
Mr. Kustoff. --last year.
I have met with constituents who have an interest in
strengthening the low-income housing tax credit. And in the
last Congress, I think there was a bill, the Affordable Housing
Credit. The tax credit, in my opinion, it is a vital source for
affordable housing.
You have stated in the past that HUD has taken steps to
streamline projects that utilize this particular tax credit.
Can you expand on that, Secretary Carson?
Secretary Carson. Well, the low-income housing tax credit
(LIHTC), is probably responsible for the largest number of new
affordable housing in the country, so obviously we are
interested in it. Traditionally, it has about an $8 billion
budget that has been provided to Treasury for that program.
Utilizing that along with the RAD program, along with the
monies that will be coming through Opportunity Zones, provides
us with an unprecedented opportunity, not only to create
affordable housing, but really to expend the economic
opportunities and business opportunities which then have a
domino effect in terms of creating other economic activity
around them.
Mr. Kustoff. Thank you, Mr. Secretary.
Last Congress, when the Affordable Housing Credit
Improvement Act was introduced, it seemed to have pretty good
bipartisan support. One of the provisions in the bill would
have created a 4 percent credit rate, permanent rate, and
further credit expansion. What are your thoughts on a permanent
4 percent credit rate?
Secretary Carson. For individuals or for communities?
Mr. Kustoff. For both.
Secretary Carson. Well, obviously we want to expand credit
in a responsible way as much as we possibly can, being
cognizant of the fact that when we do it inappropriately, we
actually aren't doing people any favors. We are actually making
their lives more difficult when that happens.
So any ideas that you have for appropriate expansion of
credit, we are always going to be in the market for doing that.
Our FHA Commissioner, Brian Montgomery, is very open to that
concept as well.
Mr. Kustoff. Thank you, Mr. Secretary.
There have been a number of questions today asked about
community development block grants, and in my district and in
Memphis and west Tennessee, these block grants in the past have
been used successfully. Given the CDBG program was put into
place during the Ford Administration, we could probably look at
modernizing the program to some extent.
What are your thoughts about modernizing CDBG to better
incentivize, if you will, in streamlining permitting processes
and other policies that may create barriers to the development
projects?
Secretary Carson. Sure. There are about 1,210 communities
now that benefit from the CDBG program, and they are the only
ones. I think it really should be a much more competitive
program. I think there are a lot of things that could be done
so that we really target the low- and moderate-income people
the way it was supposed to be done. It has been just abused,
quite frankly. I would be very open to modernizing it and
working with Congress to get that done.
Mr. Kustoff. If I could, as it relates to the funding
portion and what is known as Formula B which is, in part, based
on data from pre-1940 housing, I know that there are some
communities that benefit from Formula B, and there are some
that obviously are harmed by it.
Would HUD consider looking at Formula B and maybe
modernizing it or better utilizing it for other communities to
tap into that formula?
Secretary Carson. Absolutely, and I think a lot of other
communities would be absolutely delighted. And it is not that I
am against the concept of why it was created. We are more
against what it has become.
Mr. Kustoff. Thank you, Mr. Secretary.
Thank you, Madam Chairwoman. I yield back my time.
Chairwoman Waters. The gentlewoman from Michigan, Ms.
Tlaib, is recognized for 5 minutes.
Ms. Tlaib. Thank you, Madam Chairwoman.
Thank you, Secretary Carson, for coming before this
committee. I am not sure if you remember the first time we met,
but it was in the gymnasium of Southwestern High School, our
alma mater. I was excited that you took the time to come and
speak to the young people there. You walked the same hallways I
did, that those very young people did. You grew up in the same
challenged neighborhoods.
Secretary Carson, instead of helping the very community you
grew up in, you have decided to dial back on protections and
resources that help those in need, that stop housing
discrimination. This is happening while measures are being put
in place to criminalize and surveil those very residents that
we serve.
And, Secretary Carson, I commend you, I commend HUD in
recently suing Facebook for the use of racial--facial; it
should be called racial--facial recognition technology. When
asked about this lawsuit, you stated that, ``using a computer
to limit a person's housing choices can be just as
discriminatory as slamming a door in someone's face.''
Yes or no, did you benefit from Section 8 housing?
Secretary Carson. Did I what?
Ms. Tlaib. Benefit from Section 8 housing.
Secretary Carson. No, I did not.
Ms. Tlaib. You didn't. Okay. I do have quotes from the
past, I think, when you were running for President of the
United States that you did claim that you did receive some sort
of voucher for Section 8 housing.
Secretary Carson. I never claimed that. Other people--
Ms. Tlaib. That is okay.
Secretary Carson. Other people claimed that, not me.
Ms. Tlaib. Oh, I understand. I apologize.
Would you be okay with facial recognition technology being
used by law enforcement and other agencies in the neighborhoods
that you grew up in, including public housing?
Secretary Carson. I think we obviously have to adjust with
the technology as it is rapidly advancing. It can be abused,
and of course, that is one of our jobs to make sure it is not.
Ms. Tlaib. So, Secretary Carson, are you aware of Project
Greenlight in Detroit?
Secretary Carson. Where the mayor is putting up the lights
to deter crime?
Ms. Tlaib. Well, in Detroit, Project Greenlight enables the
police to identify and track residents captured on hundreds of
private and public cameras. The same surveillance has since
expanded to include lower-income housing.
Are you aware that the Detroit Housing Commission that
receives funding from HUD is currently moving towards using
Project Greenlight's facial recognition technology for public
housing?
Secretary Carson. I think the project has done some great
good. The mayor has told me that it has solved a lot of the
crime problems and brought it down. It doesn't mean that we
don't have to be very careful about how that technology is used
in the future.
Ms. Tlaib. So you don't oppose the use of it?
Secretary Carson. I am not saying--I oppose the
inappropriate use of it.
Ms. Tlaib. Okay. Well, currently, my colleague,
Representative Pressley, and I are introducing a bill that bans
the use of real-time facial recognition technology in
federally- funded housing, and I hope that maybe your
Department can take a look at it and maybe help us move that
forward so there is no abuse and intentional discrimination
towards those of color.
Secretary Carson, the neighborhood that you grew up in, the
one that really believed in you and I before anyone else did,
is very much hurting because they have been feeling left
behind. I believe 71 percent of them, especially in the State
of Michigan, spend more than half of their income on housing
costs and utilities. The conditions in HUD housing are getting
worse with the continued decrease in funding, while backlogs
for affordable housing grow.
That day at Southwestern High School, do you remember what
you told us?
Secretary Carson. I don't remember now.
Ms. Tlaib. You said something pretty spectacular, and it
was very inspiring. You said that no matter if you are poor,
you can succeed.
This seems very hard for our people, Secretary Carson,
today, because the same programs that helped you and I are
being scaled back. It is your turn to give back, for you to
remember where you came from, and use your experience of
growing up poor in Detroit.
Lastly, you keep saying we are a nation of laws. I hope,
Secretary Carson, that you and my colleagues who agreed with
you in that statement would also apply that to the President of
the United States.
Madam Chairwoman, I ask unanimous consent for this article
entitled, ``Controversial surveillance program coming to
Detroit public housing'' to be submitted for the record. And I
yield back the balance of my time.
Thank you, Mr. Secretary.
Chairwoman Waters. Without objection, it is so ordered.
The gentleman from New York, Mr. Zeldin, is recognized for
5 minutes.
Mr. Zeldin. Thank you, Madam Chairwoman. And thank you, Mr.
Secretary, for your service, past, present, and future, to our
country.
First, before I ask a question, I just want to point out,
the reason why you wouldn't recognize the term ``OMWI'' in HUD
is that HUD doesn't have an OMWI. The Dodd-Frank Act doesn't
require an OMWI. There are other agencies that have it. As you
point out, you have the Office of Small and Disadvantaged
Business Utilization, which seeks to accomplish many of the
same goals, but it's a pretty unfair question to ask you who
the director is of an entity that obviously doesn't exist
within HUD. So, my apologies on behalf of my colleague.
Secretary Carson. Thank you for clarifying that.
Mr. Zeldin. In my district, I talk to potential homeowners
and the REALTORS and lenders who serve them, and one thing I
hear over and over again is how otherwise credit-worthy, hard-
working families can't get into a new home because they aren't
liquid enough to make that big down payment even though they
can otherwise afford to pay a mortgage.
That is why the FHA loan is so essential to Long Island
families looking to purchase a new home that will help them
build their own version of the American Dream, and most
importantly, help them stay on Long Island. These are middle-
class people with good jobs and good credit scores, but maybe
they aren't liquid enough to put up a large down payment in a
region with some of the highest real estate values in the
nation.
Over the past several years, we have seen traditional
lenders like banks, which are subject to stringent capital
requirements and are well regulated, flee FHA lending as a
result of the use of the False Claims Act to pursue them for
allegedly ``defective'' loans. The False Claims Act was passed
by the Lincoln Administration to prevent horse theft and other
fraud during the Civil War, but a century and a half later, it
is being exploited by frivolous lawyers, and these unfair
lawsuits are scaring lenders out of the FHA market.
Overzealous enforcement of the law by the previous
Administration encourages bad behavior instead of reining it
in. A misplaced comma or a staple on a stack of mortgage
paperwork should not be grounds for a massive lawsuit against
an honest lender who is helping someone get an FHA loan. For
many reasons, these lawsuits or just the threat of these
lawsuits have negative ramifications for FHA and Ginnie Mae and
are hurting access to affordable housing in my district and
nationwide.
What are you doing to bring traditional lenders back into
this important program?
Secretary Carson. Well, thank you for that question. And
thank you for the work that you are doing in your district in
New York, and I have enjoyed our visits in the past.
We have been working very closely with the Office of the
Attorney General and with the Justice Department because we
recognize that they also have issues, and they want to make
sure that people don't get away with things. But the problem is
that it has been much too difficult to sort out what is the
defect and what is not.
So we have reexamined the defect taxonomy and finding ways
that we can clarify for everybody easily and bring this into
the digital realm so that it is not just somebody sitting
behind a desk. It makes it much easier if we use technology,
IT, to just get rid of a lot of the immaterial mistakes and not
have them count toward any untoward action for that person.
Mr. Zeldin. Thank you for your work on this issue. It's
very important for my district, and I know that you and your
team are laser focused on it, which really is something that my
constituents are grateful for.
Something that is very personal to us is the issue of
veterans' homelessness, and I want to thank you for your
personal efforts on this particular issue. It is a huge
challenge, and any veterans who raises their hand willing to
lay down their life in defense of our freedoms and liberties
should have food on their table, a roof over their head, and
shoes on their feet. And anything that you can do, and really,
working with this committee, working with the chairwoman, the
ranking member, and working with you as well, if we can pursue
any new victories during this Congress to help get our
veterans--just like we really want to get as a goal, really
want to get every American off of the streets. The one that
certainly is most personal is when that person goes, deploys
into combat and they come home, and they are on the street,
which is outrageous.
Secretary Carson. I understand.
Mr. Zeldin. So I thank you for your work on the veterans'
homelessness issue. I appreciate that HUD and the DOJ are
working together, because regulatory clarity on the issue that
we just discussed is essential here so we can make sure bad
government policy isn't putting up roadblocks to hard-working
American families who are pursuing the dream of home ownership.
And I yield back.
Secretary Carson. Thank you.
Chairwoman Waters. The gentleman from Utah, Mr. McAdams, is
recognized for 5 minutes.
Mr. McAdams. Thank you, Madam Chairwoman.
Secretary Carson, thank you for being here today. Mr.
Secretary, would you generally agree that policymakers make
better policy decisions when they consider all data and facts
before making the decision?
Secretary Carson. Yes.
Mr. McAdams. And would you also agree that it is important
for policymakers to be transparent and hear from interested
persons who may be affected by a particular policy?
Secretary Carson. Yes.
Mr. McAdams. In fact, I am happy to hear that. It is even
in HUD's policy statement, 24 CFR Sec. 10.1, so it is great to
hear these answers from you, and I agree.
Mr. Secretary, in my home State of Utah, housing prices
continue to climb dramatically, as in many places around the
country, and our area is facing a shortage of thousands of
homes. Just for reference, the median sale price of a new home
in Salt Lake County in 2018 was up 61 percent from the median
price in 2010. Three other Wasatch Front counties have had
similar rates of increase. And since 2010, new households in
Utah have outnumbered new housing units, so that is new
households created have outnumbered new housing units by over
40,000, which explains a lot of the cost increases of housing.
Because of this, HUD's mission of supporting affordable
housing access and affordable housing development is vitally
important to me and to my constituents. So I want to
specifically ask you about a recent HUD action that may make it
harder for low- and moderate-income individuals to be able to
purchase a home.
Mr. Secretary, last month, FHA issued a mortgage letter
claiming to clarify documentation requirements for loans
originated that have down payment assistance from governmental
entities. That mortgagee letter, however, issued new
requirements for a number of entities, many of whom had been
originating mortgages for years and suddenly were no longer
able to do so. The result of this is that low- and moderate-
income individuals in my district and in many districts around
the country may no longer be able to purchase a home with no
longer having access to some of these programs.
And I understand that this policy is currently under
litigation, so I respect that you probably can't discuss the
details of this litigation, but I want to talk to you a little
about the process, which I think you can discuss.
Mr. Secretary, what formal process and public comment
period did HUD or FHA undertake before FHA issued this
mortgagee letter?
Secretary Carson. I am not aware of a public process.
Mr. McAdams. That is absolutely correct. There was no
public process.
Mr. Secretary, HUD previously announced that it would
address governmental down payment assistance programs through a
rulemaking in both the 2018 spring and fall regulatory agendas.
What changed at HUD to warrant a decision not to advance
rulemaking and instead to just issue this guidance through a
mortgagee letter?
Secretary Carson. I think it was the feeling of those
involved that it was creating damage to people and that they
wanted them to understand what the parameters of being able to
offer this kind of assistance were and that it should be done
within one's own jurisdiction. That it tended to metastasize
outside of one's jurisdiction is when the problems began to
occur.
Mr. McAdams. But again, I would go back to HUD's policy
statement that policymakers make better decisions when they
consider all data and facts before making a decision and that
it would be important to include policymakers and other
interested persons before adopting a particular policy. And
that is why I think I was disappointed, especially with the
negative impacts, understanding that there may be rational
reasons for looking at this, but the negative impacts of
proceeding with the mortgagee letter before doing a formal
rulemaking as had been previously promised.
Secretary Carson. Your point is well taken.
Mr. McAdams. Thank you, Mr. Secretary.
It is also my understanding that the mortgagee letter may
negatively affect tribal government entities more than it would
affect other housing finance agencies. Do you have any evidence
that these DPA loans are performing worse than other DPA loans?
Secretary Carson. I am not familiar with the data that was
used.
Mr. McAdams. I think that is because there is no data. HUD
does not collect taxpayer IDs that differentiate between a
tribal HFA and a nontribal HFA.
So, Mr. Secretary, I appreciate the role that you must play
in protecting taxpayers and the MMIF, but if you do not
currently collect the appropriate data to judge the success of
a DPA program, then perhaps we should collect that data before
moving forward with this policy.
I yield back.
Secretary Carson. I agree with you, actually.
Mr. McAdams. Thank you. If you do agree, I hope that maybe
we can revisit this and look at engaging the public in the
process before continuing. Thank you.
Chairwoman Waters. Thank you.
The gentleman from Ohio, Mr. Gonzalez, is recognized for 5
minutes.
Mr. Gonzalez of Ohio. Thank you, Madam Chairwoman.
Thank you, Dr. Carson, for being here and for your
attention and for all your service to the country.
I want to start by first commending you for taking on
Facebook and uncovering what I think most Americans, if they
knew the details of, would be sickened by.
Could you just briefly sort of describe what you found and
kind of give an update as to the status of the investigation?
Secretary Carson. Well, as you know, it is in Federal court
now, so I can't say too much, but I will say, in general, that
they are able to collect enormous amounts of information about
people, and people have no idea that it is being collected.
The real problem is when you use that information to
discriminate against people, to either deny information to them
or to send information only to selected groups of people based
on the various demographic data that you collect. And this is
just going to become a progressive problem if we don't nip it
in the bud. So, I see this as something that is going to be
very important in our society.
Mr. Gonzalez of Ohio. Absolutely. Would it be fair to say
that what you found was essentially that if you are somebody--
let's say you are a REALTOR and you want to target ads on
Facebook, that you could essentially completely lock out
individuals based on race, gender, ZIP Code, basically anything
you want using the data and tools that Facebook provides?
Secretary Carson. Correct.
Mr. Gonzalez of Ohio. I would consider that, quite frankly,
some of the most aggressive redlining this country has ever
seen. It is redlining in the digital age.
Secretary Carson. Technical redlining.
Mr. Gonzalez of Ohio. Technical redlining in the digital
age. And I, again, want to commend you for your work in
cracking down on this abusive practice.
Secretary Carson. Thank you.
Mr. Gonzalez of Ohio. You sort of alluded to, in your first
response, that this problem is going to become more profound,
and I agree with you, as more of our lives move to the digital
realm. Could you talk a little bit about any discussions that
you have had internally or investigations that you are
undertaking or thinking of undertaking with respect to Twitter
and Google and sort of additional platform security?
Secretary Carson. Well, we have been in contact with them
and asked for certain information from them and reserve the
right to pursue it further, depending on what the
investigations show.
Mr. Gonzalez of Ohio. Great. And I look forward to
following that because, again, I think it is incredibly
important.
There was a point when we thought that these platforms were
essentially going to be liberation technologies, and it wasn't
that long ago, and I think what we have seen over time is that,
in the wrong hands, bad actors can use them for very nefarious
methods.
Secretary Carson. Absolutely.
Mr. Gonzalez of Ohio. And again, I commend you for it.
Last question, and I will just kind of turn it over to you.
Is there anything that you want to share with the committee
that you haven't quite had a chance to with respect to the
ongoing work at HUD?
Secretary Carson. Yes. I share from my heart my concern
about our country. We have a very strong country, and the only
people who can bring us down are ourselves if we continue to
allow ourselves to be made into enemies instead of being able
to use our collective abilities and talents to focus on the
problems that we have and to solve those problems. These are
things that we are capable of doing. This is America. It is a
great nation.
And you look back at the early part of our country, a lot
of people are critical of us. They said you have the Fords and
the Kelloggs and the Rockefellers and the Vanderbilts and all
of these people with all of this money, and then you have all
the poor people. You can't have a government like that. You
have to have an overarching government that equitably
distributes everything.
What they didn't realize is that those people that I just
named in our country, instead of just being greedy and passing
money down from one generation to the next, what they did is
built the transcontinental railroad and the seaports and the
textile mills and the factories that allowed us to have the
most dynamic middle class the world has ever known, which
rapidly propelled us to the pinnacle of the world.
They didn't stop there. They built schools and universities
and libraries and museums and things that really helped to
create the American Dream. And it is about providing
opportunities for our fellow citizens, because our most
precious resource is our people. And if we develop our people,
we will be successful.
Mr. Gonzalez of Ohio. Thank you, and I yield back.
Chairwoman Waters. The gentlewoman from New York, Ms.
Ocasio-Cortez, is recognized for 5 minutes.
Ms. Ocasio-Cortez. Thank you, Madam Chairwoman. And thank
you, Secretary Carson, for joining us today.
Secretary Carson, in December 2017, you delivered a keynote
at the Manhattan Institute where you stated, ``The war on
poverty sometimes conflicted with the war on drugs, which often
dealt harshly with nonviolent offenders, taking men away from
their families and disproportionately affecting minority
communities.''
Are these your words?
Secretary Carson. Yes.
Ms. Ocasio-Cortez. Do you acknowledge that the war on drugs
disproportionately impacted black communities and communities
of color despite marijuana and other drug use levels being
comparable to white communities?
Secretary Carson. Traditionally, that has been the case.
Ms. Ocasio-Cortez. And are you also aware that when a
formerly incarcerated person is homeless, there is a 60 percent
chance that they will be rearrested, but if that same person
has access to housing, the percentage drops to 29 percent?
Secretary Carson. Housing is one of the factors that is
beneficial in preventing recidivism.
Ms. Ocasio-Cortez. I am concerned here that the war on
drugs has not been solely limited to incarceration and that the
negative impact of the war on drugs has not been limited to
incarceration, but also, we have legislative rippling effects
that also seem to have been codified in our housing system.
Are you aware of HUD's one-strike rule which evicts tenants
for a single incidence of criminal activity, no matter how
minor, with no holistic review?
Secretary Carson. There is the ability of local
jurisdictions to alter that rule.
Ms. Ocasio-Cortez. But federally, this provision still
persists, correct?
Secretary Carson. As far as I know, it is still intact.
Ms. Ocasio-Cortez. And so a person could be stopped and
frisked and be found in possession of a small amount of
marijuana, and then be evicted or have their entire family
evicted from public housing?
Secretary Carson. That is a possibility.
Ms. Ocasio-Cortez. Are you aware that owners of public
housing authorities can subject tenants to tests for alcohol
and drugs?
Secretary Carson. They can require that, yes.
Ms. Ocasio-Cortez. And I see here that we also have no-
fault policies where an entire family can be evicted for the
criminal activity of a guest of the household, even without the
knowledge of anyone in that household. Are you aware of that
provision as well?
Secretary Carson. The use of such activity is extremely
limited, if ever used.
Ms. Ocasio-Cortez. But they are still codified in Federal
law, correct?
Secretary Carson. Is it on the Federal books? As far as I
know, it has been on the books for many, many years.
Ms. Ocasio-Cortez. Do you support reversing some of these
provisions?
Secretary Carson. Which provisions?
Ms. Ocasio-Cortez. Say the no-fault policy.
Secretary Carson. I can talk about that in individual
cases, if you have an example that you want to talk about.
Ms. Ocasio-Cortez. Like, say, would you support being able
to move some of these policies over to a more holistic review?
You, yourself, asked for a case-by-case consideration. Should
that case-by-case consideration be codified in Federal law
instead of having blanket one-strike or no-fault policies?
Secretary Carson. I am always in favor of more flexibility.
Ms. Ocasio-Cortez. Well, I am happy to hear that, Secretary
Carson.
I would also like to highlight, there has been much talk
about the issue with NYCHA and public housing. And it is
horrifying the conditions that are happening in NYCHA. It is
horrifying that people are living through winter without heat,
opening their ovens to try to make sure that they are able to
sleep through the night.
But I think it is important to note that this is not about
throwing more money to the problem; this is about throwing the
money at the problem. NYCHA and public housing across the
country has been starved by Members of Congress for over 15
years, and that deficit has built up for many, many years,
which has led to, in New York City alone, a $32 billion price
tag to make sure that we get people basic heat, hot water, and
so on.
And I don't think, no matter what policy changes we make,
that you can take food away from a child and then not
understand why they can't or don't eat. And I think that is
exactly what is happening with our public housing program.
Madam Chairwoman, I would like to seek unanimous consent to
submit to the record a New York Times article on what it would
take to fix New York's public housing.
Chairwoman Waters. Without objection, it is so ordered.
Ms. Ocasio-Cortez. Thank you very much. And I would also
like to note that the provisions that we wanted to reverse,
including one-strike and no-fault policies, are being
introduced in our bill on the Fair Chance at Housing Act.
Thank you very much.
Chairwoman Waters. The gentleman from Tennessee, Mr. Rose,
is recognized for 5 minutes.
Mr. Rose. Thank you, Chairwoman Waters.
And thank you, Secretary Carson, for being with us today
and for your frank testimony today. I can't help but
acknowledge your great personal life story, as I begin today,
and know that you came up under very tough circumstances. And
through the leadership of folks like your mother, you were able
to overcome those circumstances.
I am wondering, though, as you have now had a couple of
years in government service as Secretary of Housing and Urban
Development, do you find the challenges of serving in this way
to be tougher than those that you experienced as a neurosurgeon
very successfully tackling many problems?
Secretary Carson. Well, I can tell you as a neurosurgeon,
the operating room was a haven. You could go in there and get
away from all the problems of the world. But one of the great
things about medicine is you are able to intervene in people's
lives and give them a second chance.
And despite the difficulties of this job and the attacks
and criticism, there is an opportunity to change people's
lives, to change the trajectory of our nation, to change the
way that we do things, to go from just taking care of people to
actually setting people on a trajectory towards success.
Mr. Rose. You talked earlier about the situation where, due
to planned improvements in public housing, sometimes people are
displaced, and how very often they find that after they have
moved on, they find a better solution. I wonder if there are
any lessons that you may have learned or the Department may
have learned from seeing that, that might help guide us toward
helping people move beyond public housing?
Secretary Carson. Well, the key thing that I have seen is
when we develop communities in a holistic way, it almost
doesn't matter where they are. You provide the sustenance
through what people need in order to develop.
One of the things I learned from the HUD-Veterans Affairs
Supportive Housing (HUD-VASH) program--that is for veterans and
veteran homelessness. HUD provides the housing, and the VA
provides the wraparound services. It doesn't work when we just
give them housing. It doesn't work when we just give them
wraparound services. But when we put both together, we have a
tremendous impact in terms of getting those veterans back to
being self-sufficient again. That is the same policy that I
want to use today for the people who are being assisted in
housing.
Mr. Rose. In Tennessee, we have a very successful housing
finance agency, the Tennessee Housing Development Agency
(THDA). Because THDA is highly integrated into local
communities and has staff who understand both national programs
and State-run programs, they are able to have great success in
prudently and affordably housing folks in the 6th District in
Tennessee. In general, they do not utilize a one-size-fits-all
approach. Instead, they tailor their work to best help the
individual constituent.
I tend to think that local problems often require local
solutions. In fact, they usually do. The housing issues in
Memphis are not the same as the ones in Nashville, just like
the issues in New York City are not the same as for my
constituents in the 6th District of Tennessee. For example,
manufactured housing may not make sense in Manhattan, but it is
a significant or an integral part of rural housing in
Tennessee.
How can we best leverage these State finance agencies in
trying to address the affordable housing shortage in our
country?
Secretary Carson. Well, I think we just have to keep an
open mind, as you said, recognizing that the needs are going to
be different in every different district. We also need to
concentrate on modernizing our building techniques.
And on June 1st through June 5th, there will actually be a
showcase of new housing techniques on the National Mall. I
invite all of you to come to it. 3D printed housing,
manufactured housing, all kinds of new techniques and
materials, some of which cost considerably less than what we
are doing now. Integrating those kinds of things into our
housing policy, I think is going to be something that will help
us out tremendously.
Mr. Rose. Do you share my view that local problems require
local solutions, and as a country, we need to take
responsibility at the community and local level, rather than
simply solving every problem by spending more and more Federal
dollars?
Secretary Carson. I not only share it, but I
enthusiastically endorse it. It has to be all of us working
together, not pointing fingers at each other, but working
together.
Mr. Rose. Thank you, and I yield back.
Chairwoman Waters. Thank you.
The gentlewoman from North Carolina, Ms. Adams, is
recognized for 5 minutes.
Ms. Adams. Thank you, Madam Chairwoman. And thank you,
Secretary Carson, for being here today.
We have had some discussion today about the choice
vouchers, and many public housing agencies have wait lists. In
my district in Charlotte, North Carolina, in Mecklenburg, we
have more than 30,000 people who are on the wait list for a
housing choice voucher. That includes women and children and
families, people with disabilities, seniors, young people, and
the list goes on.
If you can just give me a yes or no to this because I have
a couple of other questions, do you believe that the Federal
Government is dedicating enough funding and resources to ensure
that individuals who are most in need of housing can access an
affordable place to live?
Secretary Carson. Would I love to be able to give a lot
more? Of course.
Ms. Adams. Okay. Thank you.
So given the severe shortage of public housing and Federal
rental assistance, why did the budget request for Fiscal Year
2020 zero out programs like CDBG, the Public Housing Capital
Fund, and HOME, and you only asked for $8.7 billion less than
2019?
Secretary Carson. Because we have to make tough choices in
a budget because we have a $22 billion deficit--debt, and we
have children and grandchildren and people who will be coming
after that who will be responsible for that, so real compassion
includes them as well.
Ms. Adams. Okay. So when we talk about the housing choice
vouchers, was there any reason that you didn't ask for more
funding for that?
Secretary Carson. For exactly the same reason. Would I love
to be able to have enough for everybody to have one? That would
be great.
Ms. Adams. Okay. Let me ask this question in terms of the
vouchers. In 2016, we had 127 people in Charlotte who received
the voucher, and 45 of those vouchers expired. So that means
that individuals who were searching for housing, they were
doing that for 120 days, as I understand, it is 4 months, and
so they are going to have to give them back. They have been
turned away because landlords and property managers don't want
to rent to folks with Section 8 vouchers. And so I think that
there may be some income source discrimination. I think that is
unfair and that it is just plain and simple that that is
unfair.
So given this data, do you believe that we need a Federal
law prohibiting this income discrimination?
Secretary Carson. I think we certainly need to be looking
at what are the impediments for people to accept those
vouchers, and that is exactly what we are doing right now. If
we go through that process and it is still a problem, maybe a
Federal law may be necessary.
Ms. Adams. Okay. What about in terms of the folks who are
having to give them back? Is there a way to extend the
timeframe? I mean, 4 months obviously is not enough in some
cases.
Secretary Carson. There are hardship exemptions in
existence which can be utilized in those situations.
Ms. Adams. Okay. Since we--I have a few more minutes. Since
you have rolled back the Affirmatively Furthering Fair Housing
rule, what specific actions is HUD currently taking to ensure
its guarantees are fulfilling their fair housing obligations to
tackle segregation and housing discrimination?
Secretary Carson. Well, when I took office, there were 602
discriminatory actions. We are down to about 100 now. We have
gone through all of those. And in addition to taking care of
the new ones that have come in, we get about 8,000 a year, so
we have been extremely active in pursuing those. And I have
made it very clear to all the organizations, if anybody knows
of discriminatory activity that is going on that we are not
already addressing, please let us know.
Ms. Adams. Okay. Have you received any complaints at this
point?
Secretary Carson. Like I said, we get about 8,000 a year,
and we deal with them as they come in.
Ms. Adams. Okay. Do you know about how many you have
resolved?
Secretary Carson. The resolution is about 80 percent.
Ms. Adams. Okay. Thank you.
Madam Chairwoman, I yield back.
Chairwoman Waters. The gentleman from Wisconsin, Mr. Steil,
is recognized for 5 minutes.
Mr. Steil. Thank you, Chairwoman Waters.
And thank you, Secretary Carson, for coming today. I want
to talk to you about Opportunity Zones. In southeast Wisconsin,
we have a handful of Opportunity Zones, in particular in the
Cities of Janesville, Racine, and Kenosha. There is a lot of
opportunity in these Opportunity Zones, and people are quite
excited about the possibilities that they bring to bring
rejuvenation into these cities.
Could you comment on what you are working on at HUD in
supporting qualified opportunity fund investments in housing?
Secretary Carson. Yes. We actually have a lot of components
that are working on this. For instance, when it comes to
economic empowerment and development, the Commerce Department
is spearheading the activity. When it comes to
entrepreneurship, Small Business is spearheading the activity.
When it comes to education and workforce development, both the
Labor Department and Education Department. When it comes to
safe communities and environmental concerns, the Department of
Justice is spearheading that. And when it comes to assessment
of what is going on and measurement, the Council of Economic
Advisers is spearheading that. So we have a number of different
spearheads tackling the problem.
Mr. Steil. I appreciate that. And I would ask you, if your
schedule permits, sometime to come to southeast Wisconsin and
explore firsthand what opportunities these Opportunity Zones
present to some of the communities in the area that I have been
privileged of being a voice for.
Secretary Carson. I would love to. I have been there
before, Racine in particular, at SC Johnson. Good things are
going on there.
Mr. Steil. We would love to have you back.
I want to shift gears in my limited time and talk about
State and local barriers to development. And so, Secretary
Carson, many of my colleagues seem to believe that the answer
to our housing is simply in the amount of money we spend, but I
think we are coming to a bipartisan consensus and it is
emerging. And we are recognizing also the role of State and
local barriers to development, in particular, those that are
restricting access to housing.
Strict land use laws in places in particular like New York
and San Francisco and Los Angeles are making it hard to deliver
affordable housing, and this is pricing low-income families out
of their neighborhoods. It makes it hard for the striving young
people to move to a place where jobs are actually plentiful.
Can you talk about the high regulatory cost and how it is
making it harder for HUD and local housing authorities to serve
those in need?
Secretary Carson. Yes. Well, when you look at zoning
regulations, for instance, you take a place like Los Angeles,
70 to 80 percent of the land is zoned for single-family housing
with a certain amount of property. And then you throw on top of
that all of the regulatory barriers, including recently, the
need for some solar input. Are you kidding me? So this just
piles up, and that is why you see people who make $50,000,
$60,000, $70,000 a year living on the street in tents.
This can be resolved, but it needs to be resolved with
Federal, State, and local authorities. I understand that Mayor
Garcetti has recently begun to look at allowing accessory
dwelling units, which will certainly help the situation. Those
are the kinds of things, though, that we have to be looking at.
As I said before, we can solve this problem. Don't make it
political. Let's just use what we have and solve it.
Mr. Steil. I appreciate those comments. It is an incredibly
important topic, and we need to continue to look at the local
aspect of these land zoning rules that are driving up the cost
of housing in very particular communities in the United States.
And I appreciate your time today.
I yield back. Thank you.
Secretary Carson. Thank you.
Chairwoman Waters. Thank you.
The gentleman from New Jersey, Mr. Gottheimer, is
recognized for 5 minutes.
Mr. Gottheimer. Thank you, Chairwoman Waters. And thank
you, Mr. Secretary, for being here today.
Secretary Carson. Thank you.
Mr. Gottheimer. One of the issues that I am particularly
focused on is the tightening of the credit box. I know that you
and my colleagues on both sides of the aisle, we all agree that
we need to expand access to credit in a responsible manner so
that those who deserve to be in a home can be. We also know
that HUD plays a critical role in getting people in homes.
Secretary Carson, in your opinion, what is the biggest
factor that has caused the credit box to shrink, and what is
HUD doing to combat it?
Secretary Carson. Fear, I think. Risk. Fear of risk and
looking at things that have happened historically.
What are we doing about it? We are trying to expand the
number of people who will give credit by alleviating some of
their anxiety. I just mentioned what we are doing with the
False Claims Act so that we can bring more people who can
provide credit into the market.
Mr. Gottheimer. Are you seeing a shift?
Secretary Carson. I think it is starting to shift,
absolutely. It is going to take a while for people to trust
what is going on, but they will see, over the course of time,
that we are consistent.
Mr. Gottheimer. Thank you. And also, I was hoping to ask
you about a specific extension of credit and expanding--you
started to talk about this in a previous answer, so just one
level down on Federal housing authority loans, right, which you
have covered.
In your testimony specifically, you said that you have
noticed a greater number of borrowers looking for FHA loans
with higher debt and lower credit scores, and HUD is using
closer scrutiny before issuing these mortgages to mitigate
risk. How is HUD currently working to strike a balance between
promoting access to credit via FHA loans and managing risk?
Secretary Carson. Well, we are trying to look at data, and
using that rather than just using ideology when it comes to
issuing credit. That really comes from my days in medicine
where evidence made a lot of difference, and that is the
difference between the fact that at the last turn of the
century, before 2000, the average age of death was in the 50s.
In 2000, it was approaching the 80s. The main difference is
that the medical profession began to use evidence in their
policy, and it made a huge difference in our longevity.
Mr. Gottheimer. And when you said closer scrutiny in your
testimony, is that using the data? How are you using the data
differently? How has that process changed, if you don't mind me
asking?
Secretary Carson. Well, you look at things--you look at
best practices. You look at things that have worked in some
areas, and you say, why is that working? You try to dissect
that out, and then you see if you can make that more broadly
applicable.
Mr. Gottheimer. Great. And I thank you very much for your
time today.
Thank you. I yield back.
Chairwoman Waters. The gentleman from Texas, Mr. Gooden, is
recognized for 5 minutes.
Mr. Gooden. Thank you, Madam Chairwoman.
And thank you, Secretary Carson. Is there anything you
haven't talked about today you would like to discuss?
Secretary Carson. Oh, boy. That opens up a big box. But I
will tell you, the thing that I am most concerned about is the
affordability of housing. We have more than 8 million families
in the United States who pay more than 50 percent of their
income for housing, and we need to really focus a lot of
attention on that and get this problem solved.
Mr. Gooden. Do you think spending more money will solve
that problem?
Secretary Carson. Spending more money is not the solution.
Again, getting to the etiology of the price increases and what
can we do that will enable us to build more housing, more
affordable housing.
Mr. Gooden. Several of my colleagues have mentioned you
have been inaccessible. Have you met with leadership of this
committee and with my colleagues across the aisle to discuss
their ideas?
Secretary Carson. I have tried. The chairwoman has not had
time to meet with me, but I have met with several other members
and we have made some good progress.
Mr. Gooden. Well, I would encourage those discussions to
continue. And I thank you for your work and the hard work you
have done at your organization and for what is to come.
Thank you. I yield back.
Chairwoman Waters. Thank you.
The gentlewoman from Virginia, Ms. Wexton, is recognized
for 5 minutes.
Ms. Wexton. Thank you, Madam Chairwoman.
And thank you, Secretary Carson, for joining us here today.
As you may be aware, the House last week passed the Equality
Act, which includes a lot of broad protections for the LGBTQ
community. But for our purposes, one of the things I am most
pleased about is that we are explicitly including the LGBTQ
community as part of the Fair Housing Act's nondiscrimination
protections.
Do you agree with this inclusion?
Secretary Carson. Well, I certainly agree with
nondiscrimination and with being fair to every single
individual in our society.
Ms. Wexton. So you would approve of the inclusion of the
LGBTQ community as a part of the Fair Housing Act's protections
explicitly protecting them from discrimination in housing?
Secretary Carson. If you want to include them as one of the
protected classes, I think that is something that Congress will
be responsible for.
Ms. Wexton. Very good. And I guess one of your
responsibilities would have to do with the rulemaking and the
rules for HUD and inclusion within HUD. Is that correct?
Secretary Carson. And our responsibility is to make sure
everybody is treated fairly.
Ms. Wexton. In March 2017, your agency removed links to key
resource documents informing emergency shelters on best
practices for serving transgender people facing homelessness,
and you withdrew a proposed policy that would have required
HUD-funded emergency shelters to post notices to residents to
inform them of their rights to be free of anti-LGBTQ
discrimination under HUD regulations, right?
Secretary Carson. We are creating a situation where there
is more local jurisdictional control.
Ms. Wexton. But you removed that guidance from the site,
and it has not been replaced?
Secretary Carson. That is correct.
Ms. Wexton. Okay. And last month, while you were testifying
before the House Appropriations Committee about HUD's
withdrawal of these guidance documents, you said that they were
not needed and that the equal access rule was in place. Is that
correct?
Secretary Carson. The rules from 2012 and 2016 adequately
provide for fairness for all communities.
Ms. Wexton. So those rules are still in place?
Secretary Carson. Yes. They have not been removed.
Ms. Wexton. Okay. And you also stated, ``We have not made
any attempt to change them.'' Is that correct?
Secretary Carson. We have not changed any of the rules.
Ms. Wexton. And that was the case when you testified in
Appropriations. Is that still the case today?
Secretary Carson. It is still the case today.
Ms. Wexton. Okay. And can you assure this committee that
you will not make any--that HUD does not have any current or
future plans to eliminate the equal access rule in rulemaking?
Secretary Carson. I am not going to say what we will do in
the future about anything. We don't know what we are going to
do in the future.
Ms. Wexton. Are you currently anticipating doing that?
Secretary Carson. I am not currently anticipating changing
the rule.
Ms. Wexton. Well, what has your agency done to ensure that
the equal access rule is implemented and that recipients of HUD
funding are aware of their responsibilities under the equal
access rule?
Secretary Carson. We have left the rules up from 2012 and
2016, and we have made it very clear that we will continue to
enforce fairness for everyone. And when something is brought to
our attention that is not fair, we will deal with it.
Ms. Wexton. So you are not being proactive; you are just
going to be reactive on this issue?
Secretary Carson. We are being very proactive in terms of
making sure that discrimination is not occurring.
Ms. Wexton. But, Secretary Carson--
Secretary Carson. As I told you--
Ms. Wexton. --you just testified that you took down the
guidance, right, and it has not been--
Secretary Carson. The guidance was not necessary. The
guidance was providing a lot of regulatory input, a Federal
thumb on everything, as opposed to allowing local jurisdictions
to make their rules based on the 2012 and the 2016 rules.
Ms. Wexton. So you don't think it is appropriate for HUD to
do that at the national level?
Secretary Carson. Not on that issue, no.
Ms. Wexton. Okay. So you have removed the guidance. You
testified that you have no plans to eliminate the equal access
rule, but you are also not proactively enforcing it. You are
waiting for complaints to filter their way up to HUD, and then
you will deal with it. Is that what you are saying?
Secretary Carson. No. One of the things that I am saying is
if you want to do something different about the definition of
gender, that is a congressional duty.
Ms. Wexton. Thank you. I have no further questions. I will
yield back.
Chairwoman Waters. The gentleman from Virginia, Mr.
Riggleman, is recognized for 5 minutes.
Mr. Riggleman. Thank you, Madam Chairwoman and Ranking
Member McHenry.
Secretary Carson, I appreciate you taking the time to
answer all of our questions today. Having escaped poverty and
lived in public housing, you certainly bring an important
perspective to many of the housing challenges we are facing
today, and we are grateful to have you here.
In your June 28th testimony before the Financial Services
Committee, you mentioned the issue of the FHA having to deal
with what you called very archaic IT. Just last Thursday, HUD
received a Federal Information Technology Innovation Award for
advancements in data analytics and digital transformation, with
which I am a little bit familiar.
Secretary Carson. Thank you.
Mr. Riggleman. Could you expound on some of the things HUD
has been working on over the last year to modernize old IT
systems? And in your opinion, what specific things still need
to be done in order to bring HUD's IT programs up to date?
Secretary Carson. Well, still, a lot of our platforms are
40 years old, so technology has been left behind. But what we
have done is been able to create a dashboard that gives us
real-time information about where our grant money is and how it
is being spent. And this allows us to provide more flexibility
to the various jurisdictions. So that is something that I am
very excited about.
In FHA, thanks to Congress, we have been able to at least
start updating our information technology platforms. It is
going to take quite a bit more, but we are getting there. And
that is the important thing, because we don't want to fall
behind all the other servicers, and that puts a lot of taxpayer
money at risk, but it also makes us inefficient. And that is
something that we want to change as quickly as possible.
Mr. Riggleman. Thank you. Because I think, 40 years ago, I
was playing pong. So I am glad that you say there are some
advancements going on here. So thank you for that.
And another topic I would like to address are Opportunity
Zones, and the reason is because I have the biggest district in
Virginia. It is actually bigger than six States. It is bigger
than New Jersey. And we have the most--even though we have one
of the 11 districts, I think we have 18 percent of the
Opportunity Zones throughout the entire State. They were
created under the Tax Cuts and Jobs Act of 2017 to stimulate
economic growth and job creation.
Could you discuss some of the things HUD is doing to
incentivize, as far as incentivizing economic growth in low-
income communities through Opportunity Zones? And are the
criteria for designating Opportunity Zones changing or
expanding in the future?
Secretary Carson. Yes. We are providing preference points
for people who were willing to go into Opportunity Zones. And
you can buy something there. You can build something there. You
can invest in something there. There are a number of mechanisms
that you can utilize.
We are also providing expertise, people who can help people
create programs that will attract other resources into the area
and ways to partner with entities that already exist within the
Opportunity Zone.
Mr. Riggleman. And as everybody knows already, I am very
supportive of Opportunity Zones, especially with the Fifth
District of Virginia having so many. And we don't have a lot of
time, but I think I have one more question here. And I thank
you again very much for answering these questions.
Over the last several years, we have seen a dramatic
increase in natural disasters. In my district particularly, we
have been affected by multiple hurricanes and flooding. In your
opinion, how would you rate HUD's response to the most recent
disasters?
Secretary Carson. Well, we have had an unprecedented number
of disasters since I became the HUD Secretary. I hope I haven't
caused them. But the fact of the matter is I think the response
has been good. I am never satisfied with it. That is why I am
always asking, is there something else we can be doing to get
these funds out faster? But I do recognize that HUD is the
long-term entity when it comes to a disaster. SBA, FEMA, and
the Army Corps of Engineers are the short-term responders.
Having said that, I still want to speed the process up.
So the whole concept of codification in certain arenas is a
good concept. Taking out unnecessary steps is a very good
concept. And I would personally like to get it down to when you
have a disaster, in 6 months you will have everything you need.
Mr. Riggleman. Thank you, Secretary Carson, very much.
I yield back.
Chairwoman Waters. The gentlewoman from California, Ms.
Porter, is recognized for 5 minutes.
Ms. Porter. Good afternoon, Dr. Carson. Are you in favor of
or opposed to adjusting the interest curtailment penalty
schedule for FHA loans that are in default?
Secretary Carson. I don't know that I can say broadly. I
think you--
Ms. Porter. Well, I am asking you to state specifically.
Secretary Carson. I think you have to look at specific
cases. In some cases, I might be in favor of it; in some cases,
I might not.
Ms. Porter. Okay. Do you know what the interest rate
curtailment schedule is at FHA and how it is different from the
GSEs?
Secretary Carson. Well, we tend to try to maintain a lower
interest rate at FHA because we are trying--
Ms. Porter. I am not asking you about the interest rate,
sir. I am asking you about debenture interest curtailment
penalties.
Secretary Carson. Please explain.
Ms. Porter. So FHA uses different servicing and conveyance
procedures than the GSEs do. And the result is that the cost of
mortgage servicing at FHA for a nonperforming mortgage is 3
times the cost of doing the equivalent servicing at the GSEs
for a nonperforming loan.
That tripling of cost in servicing then has the effect of
reducing the credit availability to the American people,
because when you drive up servicing costs, then servicers
overlay with cost overlays, and it makes the loans more
expensive for the very homeowners that FHA is designed to
serve.
So my question I am trying to drive at here is, why is FHA,
to use a term that I think we can both understand, lousy at
servicing mortgages?
Secretary Carson. Okay. I have not had any discussions
about that particular issue, but I will look it up, and find
out what is going on.
Ms. Porter. So, as you look it up, I would also like you to
get back to me, if you don't mind, to explain the disparity in
REO rates. Do you know what an REO is?
Secretary Carson. An Oreo?
Ms. Porter. No, not an Oreo, an REO. REO.
Secretary Carson. Real estate.
Ms. Porter. What does the ``O'' stand for?
Secretary Carson. Organization.
Ms. Porter. Owned, real estate owned. That is what happens
when a property goes to foreclosure, we call it an REO. And FHA
loans have much higher REOs, that is, they go to foreclosure
rather than to loss mitigation or to nonforeclosure
alternatives, like short sales, than comparable loans at the
GSEs.
So I would like to know why we are having more foreclosures
that end in people losing their homes, with stains to their
credit and disruptions to their communities and their
neighborhoods, at FHA than we are at the GSEs.
Secretary Carson. I would be extremely happy, if you would
like, to have you work with the people who do that.
Ms. Porter. Well, Dr. Carson, respectfully, that was my day
job before I came to Congress. So now it is my job to ask you
to work with the people.
Secretary Carson. I am talking about the people at HUD who
do that. I would be happy to--
Ms. Porter. I have spent a decade working with the people
at HUD on this problem. So what I would like you to do is to
take this back to FHA and to ask the folks at FHA, because,
since 2007, I have been writing about the problems in FHA's
servicing. I am a huge fan of FHA. I am a believer in their
mission, and I am a champion for them. Are you?
Secretary Carson. Of course, I believe in the mission of
FHA.
Ms. Porter. Are you a champion for the institution, the
organization?
Secretary Carson. Very much so.
Ms. Porter. Okay. So let me make sure you understand. When
a loan--the most common outcome for an FHA loan that goes into
default is REO. There is a conveyance process. Are you familiar
with this?
Secretary Carson. I know about the conveyance process.
Ms. Porter. So let me ask you about conveyance. What
actions is HUD taking to change the conveyance process at FHA
to address the loss recovery differential between FHA loans and
GSE loans?
Secretary Carson. Well, again, you are getting way down in
the weeds here.
Ms. Porter. Because real American people are out of their
houses. So they are literally in the weeds when they are
foreclosed on.
Secretary Carson. Understood. And I am very happy to put
you in contact with the people who deal with that. If I got
down in the weeds on every issue, I wouldn't get very far.
Ms. Porter. Okay. I appreciate that, but this has been a
problem for years. The Urban Institute issued a major report on
this, and I will be happy to send you a copy.
Secretary Carson. I appreciate you bringing it to my
attention.
Ms. Porter. I want to make sure you--let me ask you this:
Given these problems, the outcome is that FHA is the leading
cause of blighted homes in the United States. What can you do
about that? Do you understand the relationship between the
blight and the servicing problems?
Secretary Carson. Well, I understand that blight is a huge
problem and that--
Ms. Porter. And that it comes from your agency's inaction
on servicing.
Secretary Carson. I am not sure that I am willing to accept
that FHA is the cause of all the blight that we have.
Ms. Porter. I hope you feel differently after you read the
report. Thank you.
Chairwoman Waters. The gentleman from Illinois, Mr. Garcia,
is now recognized for 5 minutes.
Mr. Garcia of Illinois. Thank you, Madam Chairwoman.
And, Secretary Carson, thank you for being here with us
today and engaging us in conversations about HUD. I want to
begin with a proposal pending before this committee known as
the Safe Housing for Families Act. It recognizes and seeks to
take action in the aftermath of 13 deaths that have occurred in
federally subsidized housing since 2003, including as recently
as February when Anthony and Gwendolyn Fleming died of carbon
monoxide poisoning at Hickory Hollow Cooperative, a HUD-
subsidized housing complex in Wayne, Michigan, near to your
childhood home. The Flemings' deaths were the third and fourth
deaths to occur this year. Since April, as you know, HUD has
been developing a rule to put an end to these preventable
deaths by requiring CO2 detectors in public housing, but it
could be many months before that rule is finalized, as the
process goes.
On Friday, a story ran on NBC News' website in which a HUD
spokesperson is quoted as saying, ``Congress can fix this by
passing legislation requiring carbon monoxide detectors for
those living in HUD housing units where detectors are needed.''
Secretary Carson, that legislation is before this committee
today. This is that public hearing. The Safe Housing for
Families Act would codify the rule so that you are developing
into law and would provide $10 million in funding over 10 years
to carry out the objective of stopping avoidable deaths like
the ones I mentioned. This is double the amount that HUD
announced yesterday would be made available.
Secretary Carson, would you support the Safe Housing for
Families Act?
Secretary Carson. As I mentioned to you in the past, I am
100 percent for getting this carbon monoxide issue settled, and
I appreciate your help in helping getting that done. And as
quickly as we can get it done, it is going to get done.
Mr. Garcia of Illinois. Great. Thank you, Mr. Secretary. I
accept your endorsement.
Changing gears and returning back to a topic we were
discussing previously, the mixed status rule, I would like to
share with you a story about Joyce Bell. She was raised in
Chicago and has always struggled to have clean, green, safe,
and affordable housing. She has experienced homelessness, and,
when not homeless, rented from slumlords. A landlord broke into
her home and turned off her electrical services. She has lived
in buildings that were foreclosed on, then taken over by banks,
and in homes with dangerous conditions.
She has been on the waiting list at the Chicago Housing
Authority for over 5 years. There is an estimated shortfall of
about 3.6 million affordable rental homes in this country, and
every day that HUD doesn't have the resources to fill that
shortfall, Joyce and many people like her suffer.
According to your agency's own analysis, implementing
replacing mixed status families under your proposal will
increase the Federal cost of subsidizing units. Can you explain
to Joyce why she should remain on the waiting list so that HUD
can pay more money to implement a rule it acknowledges is
unnecessary?
Secretary Carson. Well, the people who are on the waiting
list tend to have even greater needs than the ones who are not
on the waiting list, which sort of bolsters the point that
those are the people who perhaps should be getting the housing
assistance.
But I want to reemphasize the point that what we are doing
is following the law of the land. When we begin to pick and
choose which laws we are going to enforce, I think we lead to
Congress. And if Congress doesn't like the rule, they have the
power to change it.
Mr. Garcia of Illinois. Well, thank you for that. Let me
finish with this, Mr. Secretary. HUD's regulatory impact
analysis states that, ``Perhaps the likeliest scenario would be
that HUD would have to reduce the quantity and quality of
assisted housing in response to higher costs.''
I think my colleagues will have some follow-up questions on
that.
So, when you claim that evicting eligible children from
their homes will free up space for those on the waiting list
like Joyce, that simply isn't true. It is not consistent with
what your staff analysis, career staff at HUD have concluded.
Secretary Carson. Again, what they concluded is that the
reason that the costs would be higher is because the people are
more needy who are on the waiting list.
Mr. Garcia of Illinois. Thank you, Madam Chairwoman.
Chairwoman Waters. The gentlewoman from Texas, Ms. Garcia,
is recognized for 5 minutes.
Ms. Garcia of Texas. Thank you, Madam Chairwoman.
And first, I would like to say both to our witness and, in
fact, even to a couple of Members from both sides of the aisle
that I have found the word ``illegal'' to be very offensive,
and I wish that more people would just stop using that word. As
someone who has deeply held religious beliefs that we are all
God's children, I also have a firm belief that no human being
is illegal.
So, Madam Chairwoman, I would hope that, in the future, we
would discourage any testimony or any reference to that term.
It is offensive, and it is something that should just be, quite
frankly, stricken from the record.
In line with that, I do want to follow up, Mr. Secretary,
with some questions on the exchange that you had both with Mr.
Williams and Mr. Vargas. Could you just make it clear for the
record with a yes or no that, right now, as the law stands,
noncitizens are not eligible for public housing?
Secretary Carson. People who are not here legally. There is
a difference between a noncitizen--
Ms. Garcia of Texas. Sir, the question is noncitizens.
Secretary Carson. There are some noncitizens who are
eligible.
Ms. Garcia of Texas. There are some?
Secretary Carson. Yes.
Ms. Garcia of Texas. Could you tell me which program,
please?
Secretary Carson. If you are in the United States legally
and you are not a citizen, then you are a noncitizen, but that
doesn't make you illegal.
Ms. Garcia of Texas. Right. Because to me, sir, it is
really difficult for anyone in the capacity of a housing
authority official to determine who is here authorized or
unauthorized. There are so many different categories of
immigration law that I, frankly, do not see how anybody would
be able to determine at that level whether someone is here
legally or illegally.
But the point is really not about the legal or illegal. The
point is that they shouldn't even be called illegal. They are
either here unauthorized. There are so many people who are
brought here against their will, whether through human
trafficking, through drug cartels. They may have just had an
expiration of their visa.
But, again, that underscores my point. There is just no way
for someone to determine at a housing authority level that
anyone is illegal, because, in fact, isn't it true that you
prorate the rent now?
Secretary Carson. It is true that you cannot prorate a roof
over somebody's head.
Ms. Garcia of Texas. That is not the question I am asking,
sir. Do you not prorate the rent, that if there is someone
there that you think is unauthorized, that person does not get
that portion of the rent?
Secretary Carson. The concept of prorating makes no sense
in this context.
Ms. Garcia of Texas. But, sir, the question is, isn't that,
in fact, the process that you use now?
Secretary Carson. You may call it prorating, but it doesn't
make any sense, and that is not what it does.
Ms. Garcia of Texas. Well, what do you call it, sir?
Secretary Carson. I call it giving aid and assistance to
people who are here illegally.
Ms. Garcia of Texas. Well, it is interesting to me, because
your staff seems to call it prorating and everybody else does.
Let's go one on to another point about cost. Are you going
to be able to reimburse all these housing authorities if this
rule were put in place for the millions of dollars it is going
to cost to evict these children?
Secretary Carson. What fascinates me is how you can be so
interested in the symptoms without wanting to get to the root
cause of the problem.
Ms. Garcia of Texas. Sir, I am the one asking the
questions, with all due respect. There is about a $13 million
cost that I have come across, and it is an estimate, only an
estimate, in any of these evictions. Is HUD going to provide
any funding for the local authorities if this rule is put in
place?
Secretary Carson. All of HUD's current programs are in
place.
Ms. Garcia of Texas. All right. So you are going to shift
55,000 children from being with their families then to a
homeless status. What is going to happen with these children?
Have you thought this program through?
Secretary Carson. Well, maybe what will happen with them is
that you and Congress will do your job and solve the problem.
Ms. Garcia of Texas. Well, sir, it is your problem now, and
it is your solution to try to do this mixed status rule. I am
asking, have you thought this through? Again, this
Administration is attempting to separate children. Are you
going to keep track of them? Are you going to be able to put
them somewhere, or will they just be on the streets as little
urchins?
Secretary Carson. Well, as I mentioned multiple times, they
have a 6-month deferral that can be requested. That can be
renewed 2 times, which gives you 18 months.
Ms. Garcia of Texas. So I take it you have no plans of how
you are going to handle this.
Secretary Carson. They have 18 months, which is enough time
for Congress to engage in what is needed to be done to solve
the problem.
Ms. Garcia of Texas. Well, sir, I think it is your
responsibility because it is your rule. And I would hope that
this separation of children policy would be a little bit better
thought through, because the last one has been a total disaster
at the border.
Moving on quickly, I am concerned that you all have HUD
regulations that tell projects what they must have to make a
home environmentally sound, you know, hot water, cold water,
heating. But in the South, like in Texas and Houston, it is
really extremely hot, but it does not include air conditioning.
Why is air conditioning not as important as heating in New
York?
Secretary Carson. I think air conditioning is very
important.
Ms. Garcia of Texas. So why is it not included?
Secretary Carson. It is in the process of being worked on
right now.
Ms. Garcia of Texas. Well, please keep me posted on that,
sir. Thank you.
Chairwoman Waters. The gentlewoman from Massachusetts, Ms.
Pressley, is recognized for 5 minutes.
Ms. Pressley. Thank you, Madam Chairwoman.
Secretary Carson, I have waited a long time for this
moment, but the residents of my district, the Seventh
Congressional District of Massachusetts, have been waiting far
longer for your agency to do its job. Colleagues across the
aisle earlier were critical of the passion, many of them
outraged, that we had expressed on this side of the aisle. I
make no apologies for that. This matter is very, very personal.
Let me be clear: Housing is a fundamental human right, and
the displacement of families should be regarded as the public
health crisis that it is. Mr. Secretary, your pioneering work
in pediatric neurology is historic, and it is something to be
commended. And so it pains me that your gifted hands and mine
are doing the bidding and carrying the water of what I believe
to be one of the most morally bankrupt Presidents in our
nation's history.
Increasing rents, evicting families. You mentioned that the
operating room was a safe haven away from all the troubles of
the world. A safe haven, that is exactly what a home should be
and what every single person, in particular our children,
deserve.
Today, you are not here as a doctor or even as our surgeon
general, which I think might be better suited for your talents,
but as the official tasked with leading the agency overseeing
our nation's crumbling housing stock. And for that, I do
believe you are unqualified. You said this was not a political
matter, but it does seem that political views are being played
out in the policies that are being rolled out every single day.
When you imply that people are living in public housing either
because of a desire to be self-sufficient, questioning of work
ethic, when we are eliminating stock but not increasing
supply--people in the Massachusetts Seventh Congressional
District would have to work 84 hours to afford a decent one-
bedroom at fair market rent.
Doris Bunte was a former Massachusetts State Representative
in my district and was the first African-American woman to hold
the position of head of BHA, the first public housing tenant to
lead a public housing agency in a major city. She said being
poor is not a character flaw. I agree.
But, again, given your medical background, perhaps you
could weigh in on the health consequences of failing to invest
in safe housing. Mr. Secretary, since I am short on time here,
yes or no, is stable and safe housing a social determinant of
health?
Secretary Carson. It sounds like you have not been here and
heard most of my testimony.
Ms. Pressley. Please just answer the question, reclaiming
my time. Yes or no, is stable and safe housing a social
determinant of health?
Secretary Carson. There is no question that housing is an
important part of health.
Ms. Pressley. Yes or no?
Secretary Carson. No question that it is a part of heath.
Ms. Pressley. It is well documented that health problems
such as lead poisoning, asthma, and injuries from trips and
falls, especially amongst our senior population, can be linked
to substandard housing conditions. Combined, these conditions
result in billions of dollars a year in healthcare costs. Many
of those most at risk of developing these conditions reside in
public and federally assisted housing.
Yes or no, do you believe the substandard public housing
conditions pose a risk to tenants' physical, mental, and
emotional health if left unaddressed?
Secretary Carson. Yes or no, can you ask me some questions
yourself and stop reading--
Ms. Pressley. You don't get to dictate what my line of
questioning is. Reclaiming my time. You are a very smart man--
Secretary Carson. You can reclaim it all you want.
Ms. Pressley. --so you understand the question. Please
answer it. Yes or no, if left unaddressed, which I believe they
are unaddressed because this budget does not reflect the need,
do you believe the substandard public housing conditions pose a
risk to tenants' physical, mental, and emotional health?
Secretary Carson. You already know the answer to that.
Ms. Pressley. Yes or no?
Secretary Carson. You know the answer.
Ms. Pressley. Yes or no? I know the answer. Do you know the
answer? Yes or no?
Secretary Carson. Reclaiming my time.
Ms. Pressley. You don't get to do that.
Chairwoman Waters. The time belongs to the gentlelady.
Ms. Pressley. The evidence is clear that if we do not
invest the necessary funds today, we will pay the price in
people's health tomorrow. And what is this Administration's
response? Cuts, cuts to crucial funding like the Public Housing
Operating Fund and the Family Self-Sufficiency Program, Section
202 housing for the elderly, and Section 811 housing for
persons with disabilities, and even the complete elimination of
the Public Housing Capital Fund.
These policies are devoid of empathy and humanity, and you
have been talking in the abstract, but I want to get specific.
There is a Ms. Norcross, a mother and a grandmother, living in
Brighton in my district. She has raised her children and now
cares for her grandchildren in a property with thick mold on
the walls. Her son was recently hospitalized--look at the
pictures here--because of bone tumors in his arm and leg. He
needs surgery to save and improve his quality of life, but he
won't get it because the family must have a sanitary, stable
housing condition first. Their actual home literally poses a
risk of post-op injury and infection.
Her question to you is, what do they become? When you raise
children in these conditions, what can they become? So yes or
no, do Ms. Norcross and her family deserve to live in these
conditions because they are poor?
Secretary Carson. If you have listened to anything that I
have to say--
Ms. Pressley. Yes or no, do they deserve to live in these
conditions because they are poor?
Secretary Carson. --then you know very well--
Ms. Pressley. Would you let your grandmother live in public
housing? Would you let your grandmother live in public housing,
yes or no?
Secretary Carson. You know very well--
Ms. Pressley. Under your watch and at your helm, would you
allow your grandmother to live in public housing under these
conditions?
Secretary Carson. It would be very nice if you would stop--
Ms. Pressley. You stated--
Chairwoman Waters. The gentleman from Florida, Mr. Lawson,
is recognized for 5 minutes.
Mr. Lawson. Thank you, Madam Chairwoman. It is a great day
in America.
Dr. Carson, welcome to the committee. When I was 5 years
old, we lost everything we had, our house, everything, and we
moved a number of times, with 6 of us in the family. And my
father had to recover, and eventually, we built a house. And I
still own that house today after they are gone. So I do believe
that if people work hard enough, and they want to survive, they
can survive, sometimes without the government's help, because
there was no government help then.
But one of the things that I would like to do, as you said
earlier in your testimony--and I lived in all kind of
conditions--is to ask for the help from your Department to
develop housing IRAs. And I am going to give you a chance to
respond to that. And what I mean by that is to try to see if we
can move people out of public housing into home ownership, and
maybe a certain portion of the rent might go into the deferred
account where eventually they can get enough money to get a
down payment and be able to live in a home.
The other thing, with all the millennials that we have now,
is also to develop affordable, deductible, tax-deferred IRAs,
so as they are renting all of this time that they can also set
aside funds on a tax-deferred basis so they at one point will
be able to have home ownership.
And I really appreciated the opportunity when you came down
to Jacksonville with Senator Rubio and myself to meet at Eureka
Gardens on the conditions that we had down there with these
management companies and so forth, which cause a lot of
problems in a lot of public housing and is kind of hard to
regulate.
So, with those IRAs, I have been working on some
legislation on that. I probably have a long ways to go to get
the concept accepted, but I think it is something that we could
move forward with is to move people--and I am going to stop
right now where you can talk before my time runs out.
Secretary Carson. Well, thank you. And thank you for the
work that you have done on behalf of the people who,
particularly in the Jacksonville area, were suffering very
significantly.
And that is what we should be doing, looking for ways to
get those people into a different type of environment. And,
really, that is what this is all about. It is not about
ideology and who is evil and who is bad. It is about the people
themselves. And when we can actually focus on them, that is how
we are actually able to solve the problems.
That is why I was able to come to an agreement with Mayor
de Blasio in New York, even though we have very different views
on things, by focusing on the people. That is always going to
be the solution for the problems that we have here.
Mr. Lawson. How do you feel about the deferred IRAs for
housing?
Secretary Carson. I think that is a very excellent idea.
And we are trying to find better ways to expand that Family
Self-Sufficiency Program. One of the ways that I have been
talking about and suggesting is that people be able to take
part of their monthly subsidy and put it into an escrow that is
used specifically for the maintenance of their apartment. If
they don't have a lot of maintenance, it just continues to
grow. And then if they leave public housing within a certain
period of time, they get all that money that has accumulated
and can use it for a down payment, because there are a lot of
people who can keep their head above water, but they never will
be able to accumulate a down payment. And as I said earlier,
the key method of wealth accumulation in this country is home
ownership.
Mr. Lawson. And I want to thank you for all your hard work,
and I would like for your agency to work with us to try to see
if we can craft some legislation to bring before Congress
because I think this is a key thing we can do.
Secretary Carson. I would love to work with you on that.
Mr. Lawson. Okay. Thank you very much.
Madam Chairwoman, with that, I yield back.
Chairwoman Waters. Thank you.
The gentleman from Minnesota, Mr. Phillips, is recognized
for 5 minutes.
Mr. Phillips. Thank you, Madam Chairwoman.
And welcome, Mr. Secretary.
Secretary Carson. Thank you.
Mr. Phillips. One day in the distant future when you look
back and reflect on your work at HUD, what do you want your
legacy to be?
Secretary Carson. Well, I am frequently asked about my
legacy. And to be honest with you, I am not a legacy person.
But I would very much like to see the organization turn from
one that just takes care of people to one that sets people on a
trajectory of success.
Mr. Phillips. And in general terms, what is your philosophy
relative to the role of our Federal Government in providing
housing to the least advantaged in the country?
Secretary Carson. Well, I think we definitely have a
responsibility to take care of those who cannot take care of
themselves. So, the elderly, the disabled, those who simply
aren't able to do anything.
But I think we have a responsibility to help those who are
work-able to get on a trajectory of success where they begin to
believe in themselves. And, as I said before, the most
important resource that we have in this country is our people.
And we only have 330 million people. That is not a lot of
people compared to China that has 4 times that many, and India
with 4 times that many. We have to compete against them. We
will never be able to compete with them in the future if we
don't concentrate on developing our people.
Mr. Phillips. I would agree. And if I gave you a magic wand
right now and you could wave it and effect one policy change
that you think would lead us to that end, what might it be?
Secretary Carson. If I could do one thing with a magic
wand, I would make this country stop hating each other.
Mr. Phillips. Hear, hear. I would join you with that.
Secretary Carson. We would get a whole lot done.
Mr. Phillips. I will share the wand with you.
I do have a question about mortgage insurance premiums.
And, as you know, this is before you became Secretary, but the
Trump Administration suspended the proposed decrease by a
quarter point in the premium rate. And I am just curious, have
you considered that and your thoughts on it and why this
indefinite suspension continues?
Secretary Carson. Well, certainly when I first came, there
was a lot of pressure to lower the premium by 25 basis points.
And they said more people would be able to get mortgage
guarantees. But if we had done that, we would have ended up
with less than 2 percent, the capital ratio that is required by
Congress. It would have ended up at 1.7 percent.
Now, we are in reasonable shape, but we still have to be
very careful because we have a lot of things that impinge upon
the Mutual Mortgage Insurance Fund. So, it is done on a day-by-
day, week-by-week, month-by-month-basis, looking at the risks
and making adjustments as necessary.
Mr. Phillips. So, prospectively, a chance that it could be
reduced?
Secretary Carson. Always, absolutely.
Mr. Phillips. I hear votes. My last question is on your
position on establishing parity on mortgage insurance with the
private market. Your thoughts?
Secretary Carson. With the private market? We want to bring
as much private equity into the system as we possibly can.
Obviously, we need to have government backstops in order to
provide confidence in the market. But we need to enact policies
that encourage private capital to come in.
Mr. Phillips. Agreed. And your thoughts relative to the 78-
percent threshold that, when reached, no longer requires
mortgage insurance in the private market vis-a-vis FHA?
Secretary Carson. I can understand why people come up with
numbers like that. I think, again, we have to look at the risks
that are involved and what are the risks that we are looking to
mitigate against, and is there a one-size-that-fits-all model
where 78 percent is the magic number? I am not sure that there
is.
Mr. Phillips. What number might you select if you could
choose one?
Secretary Carson. Well, I think it depends on the
circumstances.
Mr. Phillips. All right. Thank you, sir.
I yield back.
Chairwoman Waters. Thank you very much.
I would like to thank Secretary Carson for his time today.
The conversation that we had earlier about taking a break is
not necessary now. We are going to go to our classified
briefing, and there is no need for you to remain.
The Chair notes that some Members may have additional
questions for this witness, 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 this witness and to place his responses in the record. The
Chair asks the Secretary to please respond as promply as you
are able to. Also, without objection, Members will have 5
legislative days to submit extraneous materials to the Chair
for inclusion in the record.
And, with that, this hearing is adjourned.
[Whereupon, at 1:35 p.m., the hearing was adjourned.]
A P P E N D I X
May 21, 2019