[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]
A FUTURE WITHOUT PUBLIC HOUSING?
EXAMINING THE TRUMP ADMINISTRATION'S
EFFORTS TO ELIMINATE PUBLIC HOUSING
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON HOUSING,
COMMUNITY DEVELOPMENT,
AND INSURANCE
OF THE
COMMITTEE ON FINANCIAL SERVICES
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTEENTH CONGRESS
SECOND SESSION
__________
FEBRUARY 5, 2020
__________
Printed for the use of the Committee on Financial Services
Serial No. 116-82
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
______
U.S. GOVERNMENT PUBLISHING OFFICE
42-806 PDF WASHINGTON : 2021
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 ANN WAGNER, Missouri
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 STEVE STIVERS, Ohio
ED PERLMUTTER, Colorado ANDY BARR, Kentucky
JIM A. HIMES, Connecticut SCOTT TIPTON, Colorado
BILL FOSTER, Illinois ROGER WILLIAMS, Texas
JOYCE BEATTY, Ohio FRENCH HILL, Arkansas
DENNY HECK, Washington TOM EMMER, Minnesota
JUAN VARGAS, California LEE M. ZELDIN, New York
JOSH GOTTHEIMER, New Jersey BARRY LOUDERMILK, Georgia
VICENTE GONZALEZ, Texas ALEXANDER X. MOONEY, West Virginia
AL LAWSON, Florida WARREN DAVIDSON, Ohio
MICHAEL SAN NICOLAS, Guam TED BUDD, North Carolina
RASHIDA TLAIB, Michigan DAVID KUSTOFF, Tennessee
KATIE PORTER, California TREY HOLLINGSWORTH, Indiana
CINDY AXNE, Iowa ANTHONY GONZALEZ, Ohio
SEAN CASTEN, Illinois JOHN ROSE, Tennessee
AYANNA PRESSLEY, Massachusetts BRYAN STEIL, Wisconsin
BEN McADAMS, Utah LANCE GOODEN, Texas
ALEXANDRIA OCASIO-CORTEZ, New York DENVER RIGGLEMAN, Virginia
JENNIFER WEXTON, Virginia WILLIAM TIMMONS, South Carolina
STEPHEN F. LYNCH, Massachusetts VAN TAYLOR, Texas
TULSI GABBARD, Hawaii
ALMA ADAMS, North Carolina
MADELEINE DEAN, Pennsylvania
JESUS ``CHUY'' GARCIA, Illinois
SYLVIA GARCIA, Texas
DEAN PHILLIPS, Minnesota
Charla Ouertatani, Staff Director
Subcommittee on Housing, Community
Development, and Insurance
WM. LACY CLAY, Missouri, Chairman
NYDIA M. VELAZQUEZ, New York STEVE STIVERS, Ohio, Ranking
EMANUEL CLEAVER, Missouri Member
BRAD SHERMAN, California BLAINE LUETKEMEYER, Missouri
JOYCE BEATTY, Ohio BILL HUIZENGA, Michigan
AL GREEN, Texas SCOTT TIPTON, Colorado
VICENTE GONZALEZ, Texas LEE M. ZELDIN, New York
CAROLYN B. MALONEY, New York DAVID KUSTOFF, Tennessee
DENNY HECK, Washington ANTHONY GONZALEZ, Ohio
JUAN VARGAS, California JOHN ROSE, Tennessee
AL LAWSON, Florida BRYAN STEIL, Wisconsin
RASHIDA TLAIB, Michigan LANCE GOODEN, Texas, Vice Ranking
CINDY AXNE, Iowa Member
C O N T E N T S
----------
Page
Hearing held on:
February 5, 2020............................................. 1
Appendix:
February 5, 2020............................................. 37
WITNESSES
Wednesday, February 5, 2020
Collins, Bobby R., Executive Director, Housing Authority of the
City of Shreveport, Louisiana.................................. 7
Gass, Ann Brennan, Director, Strategic Housing Initiatives,
Housing Authority of the City of Austin (HACA)................. 5
Jones, Eugene, Jr., President and Chief Executive Officer,
Atlanta Housing Authority...................................... 12
Popkin, Susan J., Director, Urban Institute's Host Initiative,
and Institute Fellow at the Metropolitan Housing and
Commmunities Policy Center..................................... 8
Walz, Katherine, Vice President, Advocacy, Shriver Center on
Poverty Law.................................................... 10
APPENDIX
Prepared statements:
Collins, Bobby R............................................. 38
Gass, Ann Brennan............................................ 43
Jones, Eugene, Jr............................................ 54
Popkin, Susan J.............................................. 59
Walz, Katherine.............................................. 70
A FUTURE WITHOUT PUBLIC HOUSING?
EXAMINING THE TRUMP ADMINISTRATION'S
EFFORTS TO ELIMINATE PUBLIC HOUSING
----------
Wednesday, February 5, 2020
U.S. House of Representatives,
Subcommittee on Housing,
Community Development,
and Insurance,
Committee on Financial Services,
Washington, D.C.
The subcommittee met, pursuant to notice, at 2:03 p.m., in
room 2128, Rayburn House Office Building, Hon. William Lacy
Clay [chairman of the subcommittee] presiding.
Members present: Representatives Clay, Velazquez, Beatty,
Heck, Vargas, Lawson, Tlaib, Axne; Stivers, Luetkemeyer,
Huizenga, Tipton, Zeldin, Kustoff, Gonzalez of Ohio, Rose,
Steil, and Gooden.
Ex officio present: Representative Waters.
Also present: Representative Garcia of Illinois.
Chairman Clay. The Subcommittee on Housing, Community
Development, and Insurance will come to order. Without
objection, the Chair is authorized to declare a recess of the
subcommittee at any time. Also, without objection, members of
the full Financial Services Committee who are not members of
this subcommittee are authorized to participate in today's
hearing.
Today's hearing is entitled, ``A Future Without Public
Housing? Examining the Trump Administration's Efforts to
Eliminate Public Housing.''
I now recognize myself for 4 minutes for an opening
statement.
It is no secret that since taking office, President Trump,
along with his chosen operator, Secretary Ben Carson, has been
on a mission to end public housing as we know it. This
Administration has taken decisive steps to get rid of public
housing, laying out a blueprint for a future without any. In
every single budget request the Trump Administration has put
out, it has proposed massive spending cuts to programs that
allow public housing authorities to address their most pressing
capital needs and rehabilitate their housing stock.
Thankfully, Congress has largely ignored these requests,
but that has not stopped this Administration from finding other
ways to eliminate public housing using the euphemistic term,
``repositioning.'' This Administration is pushing PAJs to
eliminate their public housing altogether and replace it with
vouchers or other forms of assistance. Advocates and academics
say that public housing cannot and should not be replaced
because the benefits of public housing cannot be fully
replicated in other forms of assistance.
For example, public housing is more likely to be accessible
to people with disabilities than apartments that are available
to Housing Choice voucher holders. Additionally, landmark
participation in the Housing Choice voucher program is
generally voluntary, and households with vouchers often face
challenges finding landlords who will accept them.
However, despite the importance of public housing, funding
for the public housing program has decreased significantly over
the past few decades. In 2018, funding for the Capital Fund had
fallen 36 percent since the year 2000. While Congress recently
increased funding for public housing in Fiscal Years 2018 and
2019, overall funding for the program is still 17 percent lower
than the Fiscal Year 2010 funding level.
As a result of this chronic underfunding, there is an
estimated $70 billion backlog in needed capital repairs to fix
tenants' homes due to substandard and unsafe conditions and
more than 10,000 public housing homes are lost each year, due
to disrepair. We cannot afford to lose any of these units,
given the fact that our country is facing an affordable housing
crisis. According to the National Low Income Housing Coalition,
there is a shortage of 7 million homes that are affordable and
available to America's poorest families.
In my district, Missouri's 1st District, which I represent,
there are just 3 affordable homes available for every 10 of the
lowest-income renter households. Because of this shortage, most
of these families are spending over half of their earnings on
rent each month. Severe housing cost burdens can have negative
consequences for families' physical and mental well-being.
These households forego healthy food or delay healthcare or
medications to pay the rent. In the worst cases, they become
homeless.
That is why I'm working on legislation now to address
evictions and stop homelessness, and I am pleased to join
Chairwoman Waters' Housing is Infrastructure Act of 2019, which
would invest a total of $100 billion into our affordable
housing infrastructure, including $70 billion for public
housing. I am hopeful that we will learn from this conversation
the ways in which we can ensure that America is inspired to
reinvest in public housing, one of the best investments in our
nation's history.
At this time, I recognize the ranking member of the
subcommittee, Mr. Stivers of Ohio.
Mr. Stivers. Thank you, Chairman Clay. I appreciate you
calling this hearing today. I think it is important that we
explore the challenges confronting our public housing stock,
specifically, the million units that are directly owned and
managed by over 3,000 public housing agencies across the
country. A majority of the households served by these folks are
elderly or disabled. Many of these individuals are not able to
work, and about 38 percent of them have children.
These Americans rely on a Federal safety net to keep them
off the streets. And Members on both sides of the aisle are
committed to preserving that safety net. We have thousands of
public housing authorities, serving a diverse range of
communities across the country. Some are well-managed, and some
are not. But unfortunately, it has clearly been demonstrated
that much of the public housing stock is failing HUD's mandate
to be decent and safe and sanitary, even to the point of
endangering residents.
Now that the decent and safe standard is the cornerstone of
public policy, I should mention that I think that's an
incomplete standard. That is because federally-assisted housing
should be more than about just putting a roof over people's
heads. It should be about improving outcomes for residents,
based on their individual needs and aspirations. The old model
concentrated poverty in large, costly buildings that were
intentionally isolated from their surrounding communities, and
in some cases, even kept our neighborhoods segregated.
Residents continue to struggle with that legacy, and we
need to ask ourselves, how do we smartly invest in public
housing so that we achieve our public policy goals for the
future? If you propose to double down on the old model with
significant sums of money, I think you will encounter
bipartisan resistance from a lot of Members who worry that that
will not actually result in better outcomes from that model. A
better model would be to prioritize investment in models that
work or demonstrate promise.
That being said, I do believe we should encourage
innovation and innovative ways to finance this transition from
the existing public housing stock, including HUD's current
Rental Assistance Demonstration (RAD) program. In my
neighborhood of Columbus, Ohio, the Columbus Metropolitan
Housing Authority has basically run its entire portfolio of
public housing through the RAD program. And now, they serve
more people. They serve more disabled people. They serve more
veterans. They serve more elderly people. And they do not have
problems with needs for unmet capital because they have
accessed and leveraged private capital. They use HUD as a
partner, not as a dependent; they are not dependent on HUD
anymore, or a sole dependent on HUD.
I think it is important to recognize that we have to look
at this in a holistic way, and I am glad we are talking about
this. I think this is one part of what we have to deal with.
The memo that the Majority put forward for today's hearing made
some important points about the flaws of the Housing Choice
voucher program, namely that in competitive markets it can take
an individual sometimes days before they find a suitable place
to live. But that does not disprove that a more market-based
model empowers residents to choose a home in a community in
which they want to live, without concentrating poverty.
Instead, I think it begs the question of why there is a
shortage of properties participating in the housing market in
the first place. A shortage of the housing supply is a key
contributor to this problem and that is an issue that our
committee is focused on. But there are other, I think,
programmatic deficiencies that are keeping quality properties
out of the program. And I think it is worth exploring ways we
can fix that, like H.R. 1122, the Housing Choice Voucher
Mobility Demonstration Act, that is championed by my colleague,
Emanuel Cleaver, who is the co-Chair of the Public Housing
Caucus.
Lastly, I think it is fitting that one of our witnesses
authored a book on public housing reforms in Chicago that was
entitled, I believe, ``No Simple Solutions.'' There are no
simple solutions, and I know that we want to listen to the
folks in the field. These are difficult problems that we are
trying to solve. They require creative and innovative and
collaborative approaches. So I'm looking forward, Mr. Chairman,
to hearing from the witnesses today. I appreciate them being
here. And I ask unanimous consent to submit some testimony for
the record from our Full Committee Ranking Member, Mr. McHenry.
Chairman Clay. Without objection, it is so ordered.
Mr. Stivers. Thank you. I yield back.
Chairman Clay. And I thank the ranking member for his
comments.
We have been joined by the gentlewoman from California, the
chairwoman of the Full Committee, Chairwoman Waters, who is
recognized for one minute.
Chairwoman Waters. Thank you very much, Mr. Chairman. I
have long been an advocate, as you know, for public housing,
and I'm so deeply troubled by the actions of the Trump
Administration to dismantle the program under the direction of
Secretary Carson. HUD has made it clear that it wants to
eliminate public housing by proposing extreme budget cuts and
pushing public housing agencies to convert their units into
vouchers.
I oppose these efforts and will continue to fight to
preserve the homes of public housing residents. That's why I
introduced my bill, HR 5187, the Housing is Infrastructure Act
of 2019, to provide over $100 billion in new funding for
affordable housing, including $70 billion to fully address the
public housing capital backlog. Let's be clear: Affordable
housing is infrastructure. As the House moves closer to
considering an infrastructure package, we cannot forget
America's affordable housing needs.
Let me just say, Mr. Chairman, I know that you've worked so
much in St. Louis, particularly Wellston, and I know that you
have achieved some success in getting, I think, new units
there. I'm from St. Louis also, so I know all about Wellston,
and I'm very pleased if something positive is going on there.
But I still have problems with the HUD Secretary, as you know.
Chairman Clay. Yes. And I thank the chairwoman for her
comments. What we were able to achieve in Wellston was because
it was a community-wide effort. We had input from stakeholders,
from tenants, from advocates of those tenants, and from local
government, as well as our U.S. Senator, Roy Blunt. Because we
worked together with the local housing authority, with the
regional HUD office, and with the U.S. Department of Housing
and Urban Development, we were able to get a success story. And
we think it could be a way for the nation to move forward in
that manner. So, thank you for your interest.
At this time, we will welcome the testimony of our
witnesses. Joining us, we have: Ann Gass, director of strategic
housing initiatives for the Housing Authority of the City of
Austin; Bobby Collins, executive director of the Housing
Authority of the City of Shreveport, Louisiana; Susan Popkin,
who is a senior fellow at the Urban Institute; Kate Walz, vice
president of advocacy at the Shriver Center on Poverty Law; and
rounding us out is someone with whom I am familiar, Eugene
Jones, Jr., president and chief executive officer of the
Atlanta Housing Authority. Welcome to you all.
Let me remind you that your oral testimony will be limited
to 5 minutes. And without objection, your written statements
will be made a part of the record.
Ms. Gass, you are now recognized for 5 minutes to give an
oral presentation of your testimony.
STATEMENT OF ANN BRENNAN GASS, DIRECTOR, STRATEGIC HOUSING
INITIATIVES, HOUSING AUTHORITY OF THE CITY OF AUSTIN (HACA)
Ms. Gass. Chairman Clay, Ranking Member Stivers, and
members of the subcommittee, thank you for the opportunity to
testify on behalf of the Housing Authority of the City of
Austin, also known as HACA.
My name is Ann Gass, and I am the director of strategic
housing initiatives for HACA. I've been with the agency for
almost 20 years and have served in a variety of roles
throughout the organization. For the last 4 years, I've served
as the director of strategic housing initiatives, overseeing
the conversion to HUD's Rental Assistance Demonstration program
or RAD.
The Housing Authority of the City of Austin has been around
as long as public housing has been around. Home to some of the
oldest public housing in the country, the first of which was
built in the 1930s, HACA has continued to innovate and adapt,
and to maintain and improve 1,839 units of public housing, as
well as over 6,000 Housing Choice and other rental assistance
vouchers. Maintaining our housing assets is crucial, as the
demand for affordable housing continues to increase.
The latest projections are that Austin will need 60,000
units over the next 10 years to keep up with demand. HACA alone
has more than 10,000 individuals on our public housing,
Project-Based Rental Assistance, and Housing Choice voucher
waiting lists. These HUD programs remain at risk, subject to
elimination or reduction. The Rental Assistance Demonstration
program or RAD seeks to address some of the volatility and
history of inadequate funding.
Since 2012, HUD has overseen the conversation of almost
130,000 public housing units under this demonstration, which
addresses the backlogs of capital needs by allowing Public
Housing Authorities or PHAs to leverage their aging, yet
valuable, assets to make much-needed capital improvements. RAD
allows the private market to invest and make reasonable
returns, while helping to fund these needs and to improve the
look and feel of these assets.
It also allowed us to go a step further and increase the
supply of affordable housing by combining RAD with other
affordable housing tools that have been around for many years,
like the Low-Income Housing Tax Credit and the Section 18
Disposition program. One of the primary reasons HACA chose to
pursue RAD is that the old public housing funding platform has
failed our residents in its inadequacy and inconsistency of
funding.
Public housing subsidy comes from two sources: operating
funds; and capital funds. Operating funds are meant to fund
operations, salaries, maintenance, and insurance. Capital funds
are meant to cover capital needs. When RAD came to being in
2012, there was a more than $26 billion backlog of capital
repairs in public housing nationwide, which has continued to
grow. This backlog demonstrates how underfunded capital funds
have been for decades now.
The operating funds were also underfunded through routine
prorations, meaning whatever it cost a PHA to operate a
property was prorated, 85 percent, 90 percent, not enough to
properly run an apartment complex. This instability ultimately
impacted the most vulnerable participants in the program, the
people we are meant to serve, the reason that everyone at HACA
and PHAs across the country come to work each day: the
residents.
RAD has allowed us to improve their quality of life in
countless ways. In the properties we've rehabbed, residents now
enjoy all new appliances, flooring, paint, kitchens, and
bathrooms. We've been able to add new amenities to many units
that most of us take for granted: air conditioning;
dishwashers; garbage disposals; and even washers and dryers.
These modern amenities that are given in many market-rate
complexes are new to our public housing residents and we would
not have been able to do it without RAD.
We chose RAD not to devolve ourselves of public housing,
but to reinforce our ability to work towards our mission and
serve our residents, the same residents we served under the
public housing program. I must acknowledge that the RAD
conversion is by no means perfect or easy for residents or
staff. In fact, this is likely the hardest thing HACA has
undertaken in 80 years.
The task has been made easier working with an outstanding
team of professionals at HUD, people like Tom Davis and Greg
Byrne, who are among the strongest I've worked with. Removed
from politics and with significant experience and knowledge of
the inner workings of HUD, Tom and his team at HUD's Office of
Recapitalization have been creative, forward-thinking, and
solutions-oriented. Their help navigating this program has been
invaluable.
Now, as we look back at more than 1,700 units we've
converted to RAD, with fewer than 100 to go, we can quantify
the impact RAD has had: $80 million invested in the local
economy through construction projects, $35 million in reserves
set aside for future capital repair needs; almost 500 units
rehabilitated and brought up to modern standards; 118 units,
some built as many as 80 years ago with no central air or
handicap accessibility or modern amenities, have been
demolished to be replaced by 276 brand new, mixed-income units
that have brought much-needed affordable housing units to
Austin. And most importantly, a better quality of life for
hundreds of families in Austin.
Thank you for your efforts to support housing authorities
across the country. It's been an honor to represent the Housing
Authority of the City of Austin and to discuss our efforts to
improve and increase affordable housing in Austin. Thank you.
[The prepared statement of Ms. Gass can be found on page 43
of the appendix.]
Chairman Clay. Thank you. Mr. Collins, you are now
recognized for 5 minutes.
STATEMENT OF BOBBY R. COLLINS, EXECUTIVE DIRECTOR, HOUSING
AUTHORITY OF THE CITY OF SHREVEPORT, LOUISIANA
Mr. Collins. Good afternoon, Chairman Clay, Ranking Member
Stivers, and members of the subcommittee. I am Bobby Collins,
the executive director of the Housing Authority of the City of
Shreveport, and the Housing Authority of the City of Winnfield,
both in Louisiana. Thank you for the opportunity to appear
before you to discuss the vital importance and preservation of
affordable and public housing.
As you know, public housing has served as a vital resource
for the working poor for nearly a century. In this same
tradition, many public housing units are coupled with self-
sufficiency programs and have income rules that encourage wage
growth for residents by allowing flat rent. As this stock has
aged, Federal funding for capital improvements has not kept
pace.
The latest estimates suggest the current national backlog
of unmet capital to be $70 billion. While other sources are
available to affordable housing at large, each of these sources
are scarce, often competitive, and outside capital is
unavailable to public housing programs because of restrictions
placed in the annual contributions contract and the declaration
of trust.
Recognizing this challenge, the Obama Administration
developed the Rental Assistance Demonstration program, a
voluntary program aimed at preserving public housing as an
affordable housing resource by converting existing capital
funds and operating subsidies to a Project-Based Section 8
platform. Although this does not introduce additional funding
from HUD, it does remove these restrictions, allowing former
public housing sites to access private and public financing
resources available to other affordable housing providers.
This has represented more than $7.95 billion in affordable
housing investment. Similarly, the Obama Administration created
the Choice Neighborhoods Initiative, which developed both a
framework and a limited competitive stream for comprehensive
neighborhood redevelopment for low-income communities that
include dilapidated or obsolete public or assisted housing
sites.
Through this program, successful grantees are provided
grant funds to redevelop mixed-income communities and housing
with either project-based vouchers or public housing
replacement units mixed in with units for other income or
subsidy types. Through this program, residents receive targeted
case management services, are engaged through the planning and
the implementation process, and are guaranteed a right of
return.
These programs have been fully embraced by the current
Administration, along with the introduction and expansion of
other repositioning tools, such as Section 18 and streamlined,
voluntary conversion. While these programs remain voluntary,
the Administration has strongly encouraged housing authorities
to pursue repositioning, with RAD being the predominant
alternative.
While RAD is an effective and necessary tool, it does have
flaws. RAD largely relies on equity from Low-Income Housing Tax
Credit programs as a source of outside capital, which can be
limited, competitive, very complex, and can vary from State to
State. And because of the inherent complex nature of layered
financing, many smaller housing authorities that lack in-house
development and finance capacity are left at a stark
disadvantage and have become all too reliant on for-profit
developers and HUD for assistance.
While these programs can certainly be improved, they are a
much better alternative than continuing to watch our public
housing decline and disappear with no action while waiting on
adequate funding from public housing through capital funds and
operating subsidies. The most effective means of addressing the
backlog of unmet needs for public housing programs is to
provide adequate funding to stabilize and preserve existing
public housing properties, as proposed by Chairwoman Waters in
HR 5187, the Housing is Infrastructure Act of 2019, and its
companion measure introduced by Senator Harris in the United
State Senate.
This would place housing authorities in a better position
to serve their communities, meet their affordable housing
needs, and focus more of their time on the creation of new
affordable housing opportunities and resources. Additionally,
as more families are transitioned to the Housing Choice Voucher
program as a result of RAD and streamlined, voluntary
conversions, it is increasingly important to permanently
stabilize the funding of the administrative fees used to
properly administer the program.
Currently, PHAs receive only 80 cents on the dollar for
their administrative fees. This proration has been below 70
cents on a dollar in recent years. This greatly impairs the
ability to plan and properly administer the HCV program. Absent
these sweeping actions, however, Congress can continue to
refine and develop asset repositioning programs and tools,
including the RAD program, in order to ensure that they are
more dynamic, that they allow local agencies to make local
decisions, and that they provide additional financial resources
to ensure the successful preservation of all affordable housing
resources through technical assistance and grants.
I hope the foregoing information has shed some light on the
current status of the public housing program and ignites a
fruitful conversation and subsequent action to address this
great need. I appreciate the opportunity to appear before this
subcommittee, and I look forward to answering any questions you
may have.
[The prepared statement of Mr. Collins can be found on page
38 of the appendix.]
Chairman Clay. I thank the gentleman for his testimony.
At this time, we will recognize Dr. Popkin for 5 minutes.
STATEMENT OF SUSAN J. POPKIN, DIRECTOR OF THE URBAN INSTITUTE'S
HOST INITIATIVE, AND INSTITUTE FELLOW AT THE METROPOLITAN
HOUSING AND COMMMUNITIES POLICY CENTER
Ms. Popkin. Chairman Clay and Ranking Member Stivers, thank
you for inviting me to testify today. The views I express today
are my own and should not be attributed to the Urban Institute,
its trustees or its funders. I'm honored to summarize the
evidence and research on the role and future of public housing
in the United States.
First, public housing provides stability for more than 1
million, extremely-low-income households. The majority of these
households are older adults or people with disabilities. The
rest are families with children. Next, I will speak to the
deteriorating state of the nation's public housing stock. And,
finally, I'll address the need to strengthen the policy tools
that can ensure public housing is preserved for the future.
The United States is facing the worst affordable housing
crisis in a generation, with more households competing for an
increasingly limited supply of rental housing. Three-quarters
of low-income renters, those with incomes under $15,000, are
severely cost-burdened and pay more than half of their income
for housing, and the shortage of low-cost units continues to
grow.
Public housing plays a critical role in the rental housing
market, serving some of the lowest-income Americans. Public
housing is the oldest housing subsidy program. Other major
programs include Housing Choice Vouchers and Project-Based
Rental Assistance. Together, these programs serve only 20
percent of those who are eligible. But housing assistance is
not an entitlement in the United States and the supply of
housing subsidies is not large enough to meet the growing need.
Despite its important role, our nation's public housing
program faces an uncertain future. Most public housing in the
United States is at least 40 years old, built before 1975, and
needs major capital repairs to keep it operational. The cost
for these repairs is in the billions. Decades of funding cuts,
poor management, and weak oversight from HUD have left many
housing authorities to face the hard reality that they may not
be able to keep their buildings open.
More recently, the current Administration has repeatedly
proposed substantial cuts to the public housing operating and
capital funds. And while Congress ultimately increased these
funds, these resources are not enough to address the need. RAD
has helped fund repairs and revitalization, but the program
requires strengthening to ensure that the funds are adequate
and that resident protections are consistently enforced.
Unfortunately, HUD has encouraged housing agencies to
remove projects from the public housing inventory. The Section
18 Demolition and Disposition Program and voluntary conversions
do not require replacing lost public housing subsidies. They
also include few protections for tenant rights. Continued
underfunding of the public housing program will cause more
developments to deteriorate. Housing agencies will have little
choice but to demolish or sell them. This has already occurred
with more than 200,000 public housing units since the 1990s.
Evidence from our research shows that the current
implementation of Section 18 is likely to lead to a significant
loss of public housing inventory.
Finally, preserving public housing will require more
resources and stronger policy tools. The RAD program, while
controversial, can transform public housing and preserve units
by converting them to Project-Based Section 8 contracts. Our
recent evaluation of RAD showed generally encouraging results.
Housing authorities have leveraged billions of dollars in
private loans, tax credits, and other non-public housing funds
to address capital needs.
However, current law caps per-unit RAD subsidies too low to
adequately fund all the renovations needed at many properties.
In particular, properties with large capital backlogs or those
in locations where attracting private capital is difficult
means RAD leaves some major needs unaddressed. Plus, RAD
includes substantial tenant protections that other programs
lack, including the right to return, a Choice mobility option
that allows tenants to move with a voucher after a year or two.
The Choice Neighborhoods Initiative launched in 2009 is
intended to address the shortcomings of the Hope 6 program. It
is aimed at severely distressed properties, but has only
provided grants for a modest number of properties thus far. We
are currently evaluating the program's impact on residents and
the surrounding neighborhoods.
In conclusion, public housing provides safe, stable housing
for some of the most vulnerable Americans, including an
increasing number of older adults. Preserving this resource is
especially important in light of the current and unprecedented
shortage of affordable housing. However, underfunding, poor
management, and weak oversight have left the nation's public
housing stock at risk.
Our current policy tools need strengthening if we are to
avoid losing more deeply subsidized units. Thank you for the
opportunity to share these insights with you today, and I look
forward to your questions.
[The prepared statement of Ms. Popkin can be found on page
59 of the appendix.]
Chairman Clay. Thank you for your testimony.
Ms. Walz, you are now recognized for 5 minutes.
STATEMENT OF KATHERINE WALZ, VICE PRESIDENT OF ADVOCACY,
SHRIVER CENTER ON POVERTY LAW
Ms. Walz. Chairman Clay, Ranking Member Stivers, and
members of the subcommittee, thank you for the opportunity to
testify today on the topic of the nation's critically vital
supply of public housing. I'm the vice president of advocacy at
the Shriver Center on Poverty Law, a national nonprofit law and
policy organization based in Chicago.
For the past 18 years, I have represented thousands of
public housing residents fighting to save their homes and
communities and seeking to improve their living conditions.
Most importantly, they seek a say in any decision to be made
about their futures.
In 2016, public housing residents, who lived in two-family
developments operated by the Alexander County Housing Authority
in Cairo, Illinois, reached out to my office for assistance.
They were experiencing deplorable housing conditions, including
pervasive mold and a severe rat and mouse infestation. HUD took
over the housing authority in 2016, placing it into
administrative receivership. However, HUD's administrative
receivership did not improve the housing conditions.
Indeed, in 2017, HUD announced it would close the
developments and issue Housing Choice vouchers. This outcome
meant not only that the families would lose their homes, but
that other families in Cairo in need of and eligible for public
housing would have no opportunity to secure it. As was
documented in a July 24, 2018, report from HUD's Office of
Inspector General (OIG), HUD appeared ill-prepared to do much
more than move the public housing to demolition.
At the time OIG issued its report, approximately 50 other
public housing authorities around the country were also
designated as troubled. In November of 2018, HUD's Office of
Public and Indian Housing sent a letter to PHAs outlining the
agency's efforts to convert public housing or reposition it to
other forms of assistance such as vouchers, impacting more than
200,000 public housing units throughout the country.
These repositioning efforts are deeply troubling, as they
appear to come with pressure from HUD staff to move public
housing developments into demolition or disposition before
other options, including preservation, are considered, and as
well, there is no consideration of the needs of the existing
residents and the surrounding community.
One example of a housing authority pressured by HUD to
demolish came from Wellston, Missouri. The Wellston Housing
Authority was in HUD receivership for more than 20 years.
Shortly after exiting receivership, HUD staff actively pushed
for the housing authority to demolish all 201 units of public
housing. Even though the community was in desperate need of
affordable housing, and HUD's 2 decades-long receivership
should have stabilized the housing authority, only after
zealous advocacy by the tenants, their advocates, local
officials, and Representative Clay and his staff did HUD agree
to a plan that provides for a partial redevelopment of the
affordable housing and project basing of the tenant-based
vouchers. But not all housing developments and tenants have
such champions. Nor does this victory signal a change in HUD's
national repositioning policy.
So, what policies are needed to save this nation's
important supply of public housing? First, H.R. 3160, the
Public Housing Tenant Protection and Reinvestment Act of 2020
is a promising start. It would require one-for-one replacement
of demolished or disposed public housing units. It would
protect tenants through the process, including through
relocation. And it would devise a system to allow housing
authorities to attract private investment to rehabilitate
public housing, which has long been underfunded by the Public
Housing Capital Fund program.
Any effort to strengthen HUD's oversight of distressed
public housing properties is also a priority, especially where
HUD is taking a property into administrative receivership. The
focus there should be on preservation, not disposition or
demolition. And for the improvement of that housing, the
Averting Crises in Housing Assistance Act is a promising start
to that effort.
Finally, there must be a commitment to address the dire
backlog of public housing capital funds, which housing
authorities rely upon to preserve and maintain public housing.
HR 5187, the Housing is Infrastructure Act of 2019, could fully
address that backlog. Thank you.
[The prepared statement of Ms. Walz can be found on page 70
of the appendix.]
Chairman Clay. I thank the witness for her testimony, and
we will now hear from Mr. Jones for 5 minutes.
STATEMENT OF EUGENE JONES, JR., PRESIDENT AND CHIEF EXECUTIVE
OFFICER, ATLANTA HOUSING AUTHORITY
Mr. Jones. Thank you to this subcommittee for this
wonderful opportunity. My statement will be brief. My name is
Eugene Jones. I'm a 35-year veteran of public housing
leadership, as a member of a HUD team sent to rescue and turn
around ailing public housing authorities around this country. I
am currently the president and CEO of the Atlanta Housing
Authority, and for the last 5 years, I was the CEO of the
Chicago Housing Authority, the nation's second-largest.
It is this body of experience that informs my remarks
today. I have seen all sides of the coin. What happens when
there is full investment in public housing, what happens when
there is not, and what happens when you view public housing as
an asset, and what happens when it is seen as a warehouse, or
worse, as a blight, viewing these questions both in terms of
impact on the individuals and on communities.
While I will reference a variety of communities and
experiences, there is no question that Chicago's public housing
presents the most complete case study of building, the fall,
and the resurrection of public housing, its residents, and
communities in which they live. I'm going to take a different
tactic based on my colleagues because I agree, in most cases,
about the lack of funding and so forth for all these years,
these 3 decades of lack of funding, however, it takes a
different view of how to manage, how to create, and how to keep
the housing that you have existing, based on the limited
resources.
It provides a way in which you have to use your different
skill sets in order to work public/private partnerships to make
the best of a bad situation. I have been blessed, or I have
been lucky to work at housing authorities that have a funding
mechanism that I can create, and I can maintain and acquire
housing.
I've always said across this country, I think every housing
authority should be Moving to Work (MTW), because it provides
flexibility for my colleagues. It allows the smaller housing
authorities, as well as the medium-sized and the large, to
anticipate, to direct, and to assist in these public/private
partnerships for flexibility in their funding that they get
from HUD. It is grants. It comes in a bundle. You have
fundability and you can provide the same amount of housing, but
you can leverage those dollars and create better housing.
And also, with MTW, you can provide an opportunity to be
innovative. In Chicago, we did three libraries, which had
public housing on top of the libraries, to benefit the whole
community. And it was a resounding success because we were able
to be very innovative by using the State resources, using the
City resources, and using the HUD resources that we received,
and all of the other public/private partnerships and
philanthropic agencies, so that we can pool our resources
together and come up with a strategy that's best for our
community.
I think it would be good if we worked much better with
other agencies like the VA, Transportation, and HHS, because
we're all in this together, and say, how can we meld or fund
our different aspects of what we provide in housing,
transportation, education, and health? And how can we manage
that in a holistic approach and provide a better housing
situation for our communities?
Let us not forget that we're here as executive directors,
CEOs, everyone who's on this panel, we are trying to protect
the residents' rights. We're trying to protect the residents'
well-being and the quality of life. I think with the resources
that we have--I think they're limited, but I think with the
resources that we do have, we can manage those resources to the
best that we can and get the best product for our residents.
And that is the end of my presentation. Thank you.
[The prepared statement of Mr. Jones can be found on page
54 of the appendix.]
Chairman Clay. I thank the gentleman, and I thank all of
our witnesses for their testimony. We now recognize the
gentlewoman from California, the Chair of the Full Committee,
Chairwoman Waters, for 5 minutes.
Chairwoman Waters. Thank you very much. I really appreciate
your having this hearing. This is extraordinarily important,
and I am very concerned about what is happening with public
housing in this country. I am very worried about demolition of
units and the non-replacement of units.
I am not yet convinced that RAD is an answer. We see the
problems that we have with RAD now, and when we talk about the
eventuality perhaps of public housing being in the control or
in the hands of the private sector, that they will maintain
affordable units, I do not trust all of this yet.
Let me ask Mr. Collins about RAD. Many of our legislators
here have basically concluded that maybe RAD is something that
we have to have because of the need that you guys have for
upgrading and securing the properties that you manage. But are
you convinced that RAD can be used in order to rehabilitate and
renovate and do all of that without some of the issues that I
have seen up on the screen here today, where people were not
properly supported in getting moved out of their unit; there
was no assurance that they would have decent housing, whether
that's temporary or permanent; et cetera; et cetera? Tell me
what you think about RAD to this point, and how you think it
could be made better or why we should embrace it?
Mr. Collins. That is a great question, Chairwoman. And I
would just respond by saying that so far, what we have seen in
these conversions--let me say that RAD is an excellent tool in
the toolbox. It is not an answer to all of our problems in
public housing, but we are glad to have it in the toolbox.
I will say that there is a RAD rider, we have not seen how
it works so far, to make sure that the units remain affordable
after conversion. And so, again, it has not been tested yet,
but it is pretty strong, and it is there. And my appreciation
is it supersedes any mortgages or liens, so that would help
assure that they remain affordable.
In terms of the relocation, there is some very strong
language in there to protect the tenants. Now, I cannot speak
to how well folks are adhering to it, but there is some very
strong language in there to make sure the tenants are
protected. There are funds provided to make that the relocation
costs are covered.
I cannot speak to the adequacy of some of the units they
are relocated to with other housing authorities.
Chairwoman Waters. If I may just interrupt you for a
moment?
Mr. Collins. Yes, ma'am.
Chairwoman Waters. Who enforces the so-called rules of RAD
to ensure that everything that is in the law about how RAD is
to be operated--and I am looking here: received uninhabitable,
temporary housing; permanently evicted from their homes;
prohibited from organizing public housing authority. Who
enforces that?
Mr. Collins. Yes, ma'am. I would just say that in preparing
for this testimony, I did read the JO Report that came out in
2018, and I think even in that report, HUD acknowledges that
there is some work to be done to make sure that those things
are in place. I cannot speak to it directly. I am not in place
to do that, but I think even they acknowledge there is some
work to be done to make sure that those things that we need to
have addressed, are addressed.
Chairwoman Waters. The other thing that worries me is that
RAD may be utilized to basically get rid of public housing in
the future, that the final answer would be in the private
sector. Banks, hedge funds, and private equity people would end
up owning public housing and it could be converted into private
housing. What do you think about my conclusion that that is a
possibility?
Mr. Collins. Yes, ma'am. I can just say that the RAD rider
also says that in the event of foreclosure, those kinds of
things, and, again, we have not seen how those teeth are going
to work down the road, but it is there. It says that a housing
authority must maintain control. If not, then I think it goes
next to a public entity. But it is in there.
And like I said, they have even acknowledged that those
teeth have not been tested, but--
Chairwoman Waters. But if you create the debt and you can't
repay it to the entity that has invested in it, to whom does it
belong?
Mr. Collins. There are foreclosure potentials. And the only
thing I can say is that I see it in there, and I am not that
expert to speak to it. But I see the language in there saying
that that affordability rider will supersede any mortgage liens
to the owner. So, that is all I can speak to. And I appreciate
the concern.
Chairwoman Waters. Thank you very much. I am very, very
concerned, and very suspicious. Thank you.
I yield back.
Chairman Clay. And I thank the chairwoman for her
questions.
At this time, I recognize the ranking member of the
subcommittee, the gentleman from Ohio, Mr. Stivers, for 5
minutes.
Mr. Stivers. Thank you. I appreciate all of your testimony.
And with all due respect to the academics on the panel, I am
going to focus my questions to the practitioners, who have
actually used the models, and so the three of you, Ms. Gass,
Mr. Collins, and Mr. Jones.
I would like to talk to you about the RAD program. I think
you all have given really important testimony. I think the RAD
program is a great tool in your toolbox, to quote Mr. Collins.
I do not think it is necessarily something we should mandate. I
think you need to figure out what is right for you. But there
are really important riders, to address Chairwoman Waters'
question, in there that protect public housing usage even under
the RAD program.
So I actually think it is a great way to leverage private
capital. I care less about who owns these projects, and more
about taking care of the tenants and making sure we improve
outcomes to deal with the aspirations, hopes, goals, and dreams
to transition these people's lives.
As I said in my opening statement, I care less about just
putting a roof over somebody's head. I want to improve their
lives, and I think you do, too. So could the three of you maybe
in turn talk about both the pros and the cons of the RAD
program? And, frankly, I care more about what can we do to make
it work better, to the extent there are issues with the RAD
program.
The Obama Administration came up with it. I think it has
been a good innovation. It leverages private capital. But what
can we do to make that program work better? Do you want to
start, Ms. Gass? And if you do not have any suggested
improvements, that is okay, too. But if you could just tell us
if you think it generally is effective, and, again, if there
are things we can do better. That is what I think this hearing
is all about: How do we improve the outcomes for the people who
depend on public housing in this country? Thank you, Ms. Gass.
Ms. Gass. I will echo Mr. Collins' statement that RAD is
not an appropriate tool for every housing authority. But it has
been great for Austin.
I will also say that the RAD statute does require that
housing authorities retain control of the property, and in
Austin, we have gone so far as to retain ownership of the
property through a ground lease. So, we understand the concerns
that control of the site be maintained through the housing
authorities, the housing authorities that have a mission to
serve the residents that we are all here to serve today.
As far as improvements to the RAD program, I think that
additional funding is something that we have to consider.
Mr. Stivers. Okay.
Ms. Gass. The most recent revision to the RAD notice offers
$100 in additional rent per unit for properties in Opportunity
Zones, and that is a great step in the right direction in
that--
Mr. Stivers. I would guess most of the properties that all
of you own are in Opportunity Zones?
Ms. Gass. I can tell you that of our 18 public housing
properties, only one was in an Opportunity Zone.
Mr. Stivers. Really? I am surprised by that. Okay.
Ms. Gass. Yes. And we had already finished our conversion,
so we missed the boat on that. However, it was a positive step
for additional funding, and I think that if smaller housing
authorities are going to be able to do it, and other housing
authorities have not been able to, additional funding is going
to have to be part of it.
Other than that, the only struggles that we have had have
been on the programmatic, and our struggle is in moving from
Section 9 of the Act to Section 8 of the Act.
Mr. Stivers. Yes.
Ms. Gass. We have worked through that. But I will say that
the Multifamily Office at HUD that we work with for the
Project-Based Rental Assistance program has been open to
talking about those concerns, and working through those with
us.
Mr. Stivers. If you want to detail those in writing to the
committee, we would love to hear about that.
Ms. Gass. Absolutely.
Mr. Stivers. Thank you.
Ms. Gass. I would be happy to do that. The other thing I
will say is that resident protections in this program are key,
and we have to make sure that those are strong and
strengthened. At the Housing Authority of the City of Austin,
we made sure that residents were involved in every part of the
process and that they were fully protected through relocation.
Mr. Stivers. And to the extent any of the issues with
temporary relocation are issues any of you have seen, I think
Republicans and Democrats would like to work on those issues,
but I did not hear any of the actual housing authority people
talk about it.
Ms. Gass. We made a considerable point to protect our
residents throughout the process.
Mr. Stivers. Thank you. And I only have 52 seconds, so if
either Mr. Collins or Mr. Jones want to--Mr. Jones, do you have
any ideas for improvement?
Mr. Jones. I just think that there is not a one-size-fits-
all solution. I think it just depends on the community, the
neighborhood, and so forth. I think there is a lack of
understanding of the RAD program, especially when it comes to
the housing authorities explaining it to the residents, the
pros and the cons, because not every property needs a RAD.
Mr. Stivers. Right.
Mr. Jones. Every property needs some assistance when it
comes to capital improvements and so forth, but there are other
options. I think RAD is a good option, but it should not be the
only option that you use.
Mr. Stivers. I agree.
Mr. Jones. I think the parameters in the RAD program are
great. I think housing authorities should seriously look at it,
but they should look at it in a way in which they understand
the program, the outcomes, and the end results.
Mr. Stivers. Thank you. Mr. Collins, I had hoped to give
you a little more time. My time is out, but maybe somebody will
yield me more time for you to talk about that, because I really
care about what you have to say, too. And I do want to hear
from the academics who have studied this. If you want to submit
anything in writing, I would love to hear your ideas for
improving the RAD program. I yield back, Mr. Chairman.
Chairman Clay. The gentleman yields back. I will now
recognize myself for 5 minutes.
I want to start with Ms. Walz. From your work and your
background with the Wellston Community in St. Louis, could you
talk about some of the implications of the current situation,
and how a lack of funding very likely contributed to the
conditions there? And you know the history of that housing
authority being in receivership for 25 years with HUD. Go
ahead?
Ms. Walz. Thank you, Chairman Clay. You are likely the
expert on Wellston, but my office did support Legal Services of
Eastern Missouri in their representation of the public housing
residents who lived there.
Chairman Clay. Thank you for that.
Ms. Walz. And what we saw and what we observed on that site
and in similar, small, public housing authorities around the
country is they have years' worth of deferred maintenance, due
to insufficient capital funds. And as a result of that,
residents are suffering. And so, both in Wellston and in the
Alexander County Housing Authority case that I mentioned prior
to that, they were dealing with severe housing conditions,
where at that point it did appear, at least for Alexander
County, that demolition was the only option.
What is the ideal scenario, both for the Wellston's of the
world, of which there are many, and the Alexander Counties of
the world, of which there are many, that are likely not
eligible for RAD because they cannot access that private
capital due to their conditions, due to their size, due to
their financial situation, is to find another alternative
there. It may start with increasing the capital fund program.
It's also to shift HUD's priority here. Both with Alexander
County and with Wellston and with other housing authorities we
have seen in the Midwest, HUD's priority appears to be to
demolish those developments.
And I think what gets lost in the conversation often is
it's not just that the public housing residents there lose
their homes, but all of the families in need in that community
will not be able to access affordable housing. The public
housing families will receive Housing Choice vouchers. That is
true. But everyone else in need in that community is without an
available option.
Chairman Clay. Thank you for that, which takes me to my
next question. Dr. Popkin, can you discuss a little bit of the
history of the Ida B. Wells Housing Development in Chicago,
which was torn down? I am interested in what happened to the
people who used to live there. Where did they relocate, and did
they have an option of coming back once rebuilding occurred?
Ms. Popkin. That is research we did 10 years ago now, in
the early days of the Chicago Housing Authority. We tracked
some of the residents from Ida Wells. It was a different
program. It did not have the same tenant protection. I think
the tenant protections in RAD and Choice Neighborhood are
reactions to what happened under Hope 6. And I remember when
Choice Neighborhoods came in, that was one of the problems. But
because there had been litigation in Chicago, the Chicago
Housing Authority was obligated to track the residents, and we
were actually hired by the MacArthur Foundation to track what
happened.
The majority of residents did not return. Most of them took
Housing Choice vouchers and moved to other areas of the City.
It took a very long time for the development to be rebuilt.
More people have returned over time. From some recent research
we have, done we can see that. And most of the ones that we
surveyed, the majority ended up in places where they felt they
were safer and better off. That said, they came from some of
the most miserable housing conditions they could have been
living in. But in answer to your question, there was not enough
housing for them to return to, either. So, it was a different
scenario.
Chairwoman Waters. Will the gentleman yield, Mr. Chairman?
He still has some time.
Chairman Clay. No, I was going to go to Mr. Jones.
Chairwoman Waters. Oh, okay.
Chairman Clay. He was over the Chicago Housing Authority.
Perhaps you have some light you can shed?
Chairwoman Waters. Well, can he please include Cabrini-
Greens with what happened with that?
Chairman Clay. Yes, for sure.
Mr. Jones. Let me talk briefly on both of those
developments.
Chairman Clay. Talk about both of them.
Mr. Jones. Now, they are mixed-income developments. They
are successful developments--one is in Brownsville, and
Cabrini-Greens is in downtown Chicago. They have mixed incomes.
They have great developments. In Brownsville, there's a
Mariano's. Everything is community development working very
well with the aldermen in those communities and so forth. So it
is coming about. Less crime. People are working. And it is just
a great community.
Chairman Clay. What happened to the residents?
Mr. Jones. The residents? As Dr. Popkin stated, it took so
long for them to rebuild the development that people who had
vouchers, if they had children and so forth, they chose another
place, and they are going to stay there, because they are more
comfortable there.
Some of them do move back, but the majority of them do not
move back, but they are all welcome. And in Chicago, they know
where every one of those residents are to this day.
Chairman Clay. I thank you all for your responses.
I now recognize the gentleman from Missouri, Mr.
Luetkemeyer, for 5 minutes.
Mr. Luetkemeyer. Thank you, Mr. Chairman. It has been an
interesting discussion today. I appreciate everybody being here
and the discussion. We have kind of centered on RAD for a
little while here. And as I go through and look at some of the
information and questions here, Mr. Collins, I think you made
the comment a while ago, and I think, Mr. Jones, you followed
up, I believe, with something similar to that, with pointing
out a problem with regards to small housing units versus big
housing units in the RAD program. Would either one of you like
to elaborate on that just a little bit?
Mr. Collins. The point that I was making, actually, in my
testimony is that larger housing authorities have the advantage
of having in-house development folks and financial folks or
being able to retain consultants. Eighty percent of the housing
authorities in this nation do not have that kind of money to go
out and get consultants or do not have that type of expertise
in-house.
And so, that leaves them depending on the developers, which
is kind of a fox watching the henhouse thing. And it leaves
them dependent on developers and HUD to a limited degree. So, I
just think we need to strengthen their ability to analyze their
deals and have some objective input before they make some of
these decisions to convert because they just do not have those
resources, as the large housing authorities do.
Mr. Luetkemeyer. Very good. I know, in looking at this
situation, there are several ways of going about helping people
afford housing. One of them is the RAD program. Another one is
the voucher. And another one is housing credits to build low-
income housing. What would be the preference? What do you think
is the best way to do this? Mr. Jones? Ms. Gass? You all are in
the business as well.
Mr. Jones. I think you need all different approaches if you
can.
Mr. Luetkemeyer. All different approaches?
Mr. Jones. It just depends on how large your community is,
how small it is, and so forth, and what you can afford and who
can you attract to develop some of these properties that we
have. Not all of the properties that are vacant are buildable.
But what do you do with those? And when are they buildable, can
you make it a financial development that will strengthen the
community and its surrounding community?
Once we build public housing, we have to make sure that the
public housing not only is a seamless transition in the
neighborhood, but that it fits in within the neighborhood. And
so if you look at the RAD program, as my colleague had stated,
it is difficult because a lot of them don't have the
experience, like larger housing authorities do because they
have a development staff that can understand how to do these
RAD deals.
I think one of the things that we did in Chicago is we
helped some of the smaller housing authorities that were coming
to Chicago, and we would sit there, and we would sit, and we
would talk about what a RAD deal would mean, what a tax credit
deal would do, and just building self-development. So we are
trying to help our smaller agencies, as well as we trying to
build up the capacity so that they can make better-informed
decisions.
Mr. Luetkemeyer. Is one of the requirements with the RAD
program to have a mixed-used structure there or does it
continue to just exist, just continue to be all apartments, and
just switch ownership and improve the building?
Mr. Jones. The housing authority has a fiduciary
responsibility to make sure that development still continues to
work.
Mr. Luetkemeyer. Right.
Mr. Jones. And it provides the quality-of-life issues that
we determine that we wanted to change it to a RAD development.
Mr. Luetkemeyer. I used to Chair this subcommittee a couple
of sessions ago, and we took a field trip down to New Orleans
and saw the rebuild of New Orleans after Hurricane Katrina, and
a lot of the new communities that they have actually built
there. The way they have done this is to go in and actually
have mixed-use structures, so that you have apartments, condos,
and businesses all in the same building. And you basically
build back a community there. It seemed to be very successful.
I was wondering what your thoughts would be on that?
Mr. Jones. I was there before and after Hurricane Katrina.
I was responsible for moving our staff, and finding our
residents and relocating them to Houston, Dallas, and also
Atlanta. And so, we had mixed-income developments. And the sad
thing about it is, we had a big One Desire Project and a couple
of Hope 6 sites that were devastated by the hurricane.
And after the hurricane, they did look at the same model
that we had before the hurricane came to do mixed-income
financed developments there, and they worked very well.
Mr. Luetkemeyer. Ms. Gass, I have 30 seconds to go here,
can you give me some quick responses to the questions I asked
Mr. Jones?
Ms. Gass. Certainly. I think for Austin, one of the
benefits of RAD was that we were able to address the needs of
the property, based on the property. So we have a property
where we have completely demolished 156 units, and we are
rebuilding in its place 400 units. It is a low-density area. It
is right next to downtown. It is a great place to do that.
We have had other properties where we have been able to
make improvements throughout the years and they had fewer
needs. And so, I think that flexibility in RAD is something
that is good. In the property that I mentioned with the 400
units, we are also expanding resident service areas, so we can
provide workforce development, education, job training,
financial literacy courses, and digital literacy courses. And
RAD enabled us to do that by adding additional space for
services, as well as some retail. So, some mixed use.
Mr. Luetkemeyer. Thank you very much.
Chairman Clay. And I just wanted to point out to my fellow
Missourian that after the tornado that devastated the City of
Joplin, HUD, as well as other Federal agencies, came together
and stood that town up pretty quickly because they focused on
how to get them back going, just to make you aware.
Mr. Luetkemeyer. Right. Thank you.
Chairman Clay. Thank you.
I now recognize the gentlewoman from New York, who also
happens to be the Chair of the House Committee on Small
Business, Ms. Velazquez, for 5 minutes.
Ms. Velazquez. Thank you, Mr. Chairman, and Mr. Ranking
Member, for holding this important hearing.
Director Gass, in your opening testimony you mentioned the
potential capital benefits of RAD, such as new carpet, air
conditioning, and appliances; however, RAD is only a one-time
capital infusion. How are you intending to make additional
repairs next time they are needed or when the 20-year PNA
expires?
Ms. Gass. Thank you for your question, Congresswoman. In
addition to the $80 million that we have been able to put in as
a resource now into physical repairs, we have $35 million that
is now set aside in a reserve for a placement account that is
set aside exclusively to address the capital needs of these
properties. It was done through a capital needs assessment, so
we had to forecast out 20 years to make sure that we had the
funds to address all of those capital needs.
If, at the expiration of the 20 years, a recapitalization
is necessary, we are able to do that to address capital needs
going forward. But to have the $35 million set aside for 20
years is an attractive thing for us. We never had the resources
to be able to address the capital needs in that way.
Ms. Velazquez. Okay. And, Directors Gass and Collins, I
understand both of your PHAs are utilizing the RAD program.
Would either of your PHAs be using the RAD program if we were
fully funding the Capital Fund in the way that is needed?
Mr. Collins. No, ma'am. There would be no need. This is to
address deferred capital needs, and if it was fully funded,
there would be no need. So, no.
Ms. Velazquez. Thank you.
Ms. Gass?
Ms. Gass. By and large, I agree. The one thing that RAD has
given us the opportunity to do that I do not think would be
allowed under the scenario that you are talking about is that
we have been able to leverage Low-Income Housing Tax Credits
with our RAD conversion. And so, again, the example that I used
before, being able to go from 156 to 400 units, that was
because we had the additional subsidy that came in in the form
of tax credits, and that has allowed us to add affordable
units, not subsidized units, but affordable units. So, I think
that has been a big benefit to Austin.
Ms. Velazquez. But if Congress decided to fully fund the
capital program--I do not see how we should make every effort
not to go into the private sector and work out this type of
financing, where we might be compromising tenant protections.
Just this week, the City, an online newspaper in New York,
discussed what is happening in the only RAD development that
exists in New York City, and that is in Congressman Meeks'
district. And it is talking about how the private developer is
moving to evict for nonpayment or late payment of rent.
The fact that today residents of a public housing
development in New York could go to the website and check the
status of repairs, closed tickets, and so forth, yet this
private developer is not required to have a website where those
residents can check and have any type of information, Dr.
Popkin, what are your thoughts? Would programs like RAD be
necessary if the Capital Fund was fully funded?
Ms. Popkin. I would agree with my housing authority
colleagues here on the panel, no. It was an attempt to find the
funding that has been deferred for so long.
I think, however, one provision of RAD that I think is
worth preserving is the Choice Mobility voucher option that
people in the current public housing program do not have access
to.
Ms. Velazquez. Okay. So, Dr. Popkin, how will converting
from public housing to Section 8 affect the long-term
affordability of public housing projects? What protections has
HUD put in place to ensure a converted property remains
affordable?
Ms. Popkin. The RAD program currently requires that the
rents be kept the same as public housing--that the leases be
renewed after 16 years and kept affordable. Beyond that, there
are not any. I think Mr. Collins was saying there is no
guarantee if there is a foreclosure, and we do not know. We are
currently evaluating the program, but it is still in the early
days.
Ms. Velazquez. Thank you.
Ms. Walz, what additional protections are needed to ensure
RAD is living up to its goal in preserving affordable housing?
Given HUD's spotty track record in ensuring tenant protections
and rights during RAD conversions, how can Congress make sure
these rights and protections are being enforced?
Chairman Clay. The gentlewoman's time has expired, but I am
going to allow the witness to answer. Please respond.
Ms. Velazquez. Thank you so much.
Ms. Walz. Thank you. There are protections within the
public housing program, some of which are in the red program,
but more could be there, including that there is a Right to
Construct, a resident organization, democratically elected, and
that they are a way for the residents to come together
collectively to represent their interests.
There should be sufficient monitoring of the programs,
particularly where relocation is involved. That is where we see
tenants fall through the cracks the most. There needs to be
assurance and monitoring that the same size units or the units
that the residents need are actually rebuilt or redeveloped,
and if these are accessible units, they continue to be
accessible units. Those types of protections and monitoring, I
think could greatly improve the RAD program and make it work
for residents.
Ms. Velazquez. Thank you.
I yield back.
Chairman Clay. Thank you.
The gentleman from Colorado, Mr. Tipton, is recognized for
5 minutes.
Mr. Tipton. Thank you, Mr. Chairman. And I come at this
from a slightly different view than what we have here on the
panel. You point to very important issues in a lot of our
metropolitan areas.
I happen to represent rural Colorado. And rural America is
often forgotten in this conversation. On a per capita basis,
often when you look into our communities, which typically have
lower incomes, we probably, on a per capita basis, have a
bigger problem on that per capita basis than a lot of our urban
neighbors do.
I frequently talk to a lot of the hardworking folks in our
district, and just given some of the challenges that we face
there, in terms of property costs, in terms of some of the
rules and regulations, not from the Federal Government, but are
compounded at the city, the county, and the State level. We're
seeing increasing costs that address a number of the concerns,
actually, as a cost driver that we're pointing at in terms of
some of the funding.
I toured one facility that was building affordable housing
in Glenwood Springs. The cost is $380,000 per unit. Where I
come from, that is expensive. And it is going to be labeled as
affordable housing to be able to actually achieve that. And so
I think, through those regulatory processes, something that we
do need to be able to define is if we are going to be able to
get some of those costs down.
I think, Ms. Gass, you pointed to some good leveraging of
dollars. To be able to expand in Austin from, I think you said
156 to 400-plus units that you were able to actually see
expand. But I would like to be able to get maybe just a sense
of, is RAD a good program that came in under the Obama
Administration and maybe needs some tweaks to be able to follow
through with? What are your thoughts? Would you label it as a
good program?
Ms. Gass. It has been very good for Austin.
Mr. Tipton. Okay. Mr. Jones, what is your sense?
Mr. Jones. It has been a very good program for the agencies
that I have worked with in Chicago. Atlanta is doing it right
now and some other places. Again, Congressman, I think it is
not one-size-fits-all.
They really have to look at the opportunity that they have
right now; it is just an alternative. It is not that you have
to do a RAD in these larger housing authorities because they do
have capital funding available to fix those elevators, fix
those chillers, and those types of big ticket items, and so
forth.
But I think, based on your portfolio, your physical needs
assessments, and so forth, it tells you what you need to do, in
what period of time, and how do you go over the next 5 to 10
years. But it is a good program.
Mr. Tipton. I think that is something--every one of us know
about the $23 trillion debt in the country. There are not a lot
of available resources that we are going to be able to dip
into. So what is your assessment maybe of the private-public
partnerships? Is this an opportunity to be able to create a
win-win?
Mr. Jones. Say that again, Congressman?
Mr. Tipton. With private-public partnerships in terms of
affordable housing, is that an opportunity to be able to create
a win-win, where we are not necessarily always using just
taxpayer dollars, but getting that private investment to come
in? Is that desirable?
Mr. Jones. Yes, absolutely.
Mr. Tipton. What do you think, Ms. Walz?
Ms. Walz. With sufficient tenant protections and with the
opportunity to ensure that all PHAs, not just medium-sized and
large PHAs or PHAs in metropolitan areas, are able to attract
that private capital. There needs to be some re-envisioning of
the RAD program, so that it is a bigger universe of PHAs that
are eligible and able to secure that private capital.
And I think just to your point about rural America,
Congressman, I will just say that the hard units are especially
critical in rural America, where it is very hard to use a
Housing Choice voucher. In Cairo, Illinois, it was about as
rural as you could get on the southern tip of Illinois;
residents had to move at least 50 miles to find a property
owner who would take their Housing Choice voucher.
Mr. Tipton. Yes, and frankly, in our district, part of it
is the regulatory ends of it, not in my backyard (NIMBY), to be
able to address that.
Mr. Jones, one other issue I would like to address is, and
it struck me when you talked about the holistic approach, we
have PHAs in my district and they deal with literacy training
for financial issues, healthcare, their costs, parental
guidance, and whatnot. Should we be looking at that whole
picture, in terms of getting people really to the point where
they will, hopefully, not need to have low-income assistance?
Mr. Jones. Absolutely. We need a holistic approach because
that adds to the success of any public housing in their city
and their jurisdiction and so forth. So if you piecemeal it,
and you do onesies and so forth, it is not going to get there.
Mr. Tipton. Right. Thank you.
Mr. Chairman, I yield back.
Chairman Clay. The gentleman yields back. I now recognize
the gentleman from Washington State, Mr. Heck, for 5 minutes.
Mr. Heck. Thank you, Mr. Chairman. Indeed, thank you for
holding this very, very, very important hearing.
I think I want to direct a question to Mr. Jones and Ms.
Gass, after using two words and then riffing a little bit on
each of them, and asking a question about that to you. The two
words are ``supply'' and ``ecosystem.''
Supply: This nation is suffering from a housing supply
crisis. By every objective measure, we are somewhere in the
range of 5 to 7 million or more housing units short of what is
needed to meet legitimate, 5 to 7 million. Now, that
circumstance is felt throughout communities in America, all of
America, but in varying degrees.
The reality is that if you want to buy an upper-end home,
you are probably going to get your need met. Just about
everywhere else within the range of housing unit availability,
there is a crunch to one degree or another. The crunch is
especially acute for what we would call starter homes for those
seeking to grasp the first rung of equity building.
Now, let me use the second word, ecosystem. This
circumstance of a housing supply shortage is felt throughout
the entire housing unit delivery ecosystem. Let me use the
example I did of starter units. If you have fewer starter units
available, and we do, that is measurable. Builders are not
building starter housing units, and what that means is if you
are trying to get out of renting and into home ownership, you
are having a tough time. Or if you are a Baby Boomer seeking to
downsize, you are having a tough time.
So if you cannot get that rung, what happens? More people
stay renting. If more people stay renting, occupancies go up.
If occupancies go up, what happens? Rents go up. Supply and
demand, pure and simple. More people become rent-burdened. More
people are in need of public subsidy. And frankly, even more
people become homeless because we have a housing supply crisis
and because the provision of housing units is an ecosystem.
That is the fact.
I think it should be noted the way in which this burdens
households. Not only are more and more people spending more
than 30 percent of their income on rent, but, in fact, in the
last 15 years, the single largest increase in household budgets
is not higher education, and it is not even healthcare; it is
housing costs.
And as I like to preach in this committee, I have three
other favorite words: pillow; blanket; and roof. If you don't
have a pillow to lay your head down on, a blanket to keep you
warm, and a roof over your head to keep the rain off of you,
then any other issue that may be confronting you in life, be it
unemployment or substance abuse or mental health, is not going
to be successfully addressed. So this is a national crisis, due
to lack of supply and how it reverberates throughout the
ecosystem.
Mr. Jones, how does the lack of affordable housing supply
impact your ability to serve your communities?
Mr. Jones. It is very difficult, and it is the cost--the
cost of developing mixed-income developments is an
extraordinary--it just goes over your head. As the Congressman
had stated, you have a total development cost of about $370,000
for one unit, maybe a one-bedroom, based on your locality. You
can take that same amount of money and probably build two homes
in a different area and get a 2-for-1, but that is not how we
work within the rules of the developments which we do.
Cost, cost, cost is always a burden with us. We have to
look at every type of financing opportunity, which is tax
credits, which is philanthropic dollars, which is historic tax
credits, new market tax credits. We have to be a financial
wizard when it comes to trying to finance some of these deals
and still, we cannot get the best bang for our buck.
When we look at replacing 500 units, and based on total
development costs and so forth, we may be able to do 275. And
so the difficult--
Mr. Heck. And the need is?
Mr. Jones. Right. It is 500. And so the difficulty is,
going back to those residents and saying, hey, look, I can only
build 375. I can't build the 500. And so I am left with over
100 units that I do not know what I am going to do about. So
now, I have to go to the next development and figure that out.
Mr. Heck. I see my time has expired. I apologize, Ms. Gass.
But let me close with this sentiment. I perceive the
discussion thus far in this committee to be, unfortunately, an
all-too-rare, but delightfully bipartisan tone and discussion.
Every Member in Congress is suffering from this problem in
their district. And it behooves us all to figure out ways to
help solve it and mitigate it because of the profound and
significant nature of it.
And thank you, Mr. Chairman. I yield back.
Chairman Clay. The gentleman from Washington yields back.
At this time, I recognize the gentleman from Tennessee, Mr.
Kustoff, for 5 minutes.
Mr. Kustoff. Thank you, Mr. Chairman.
And I thank the witnesses for appearing today. I think this
issue, like so many others, a lot of us, or at least I fly over
it at 30,000 feet. And so, it is good to hear from people on
the ground who deal with this day-in and day-out.
And with that, Mr. Jones, in my district, and I represent
part of Memphis and then a rural part of west Tennessee, we
have about 10,000 homes that are served through the Housing
Choice voucher program. From a real-world standpoint, can you
talk to me in real terms about how easy or how hard it is for
those individuals who participate in the program to, in fact,
find housing?
Mr. Jones. It is very, very hard to find the house or the
apartment or whatever your means of what you're trying to look
for, it is very hard to find those accommodations. Residents
are looking for quality-of-life issues. They are looking for
better schools, better neighborhoods, and so forth, and
opportunities for jobs.
The hard part is that a lot of these landlords will not
accept Section 8. That is number one. And number two, they
cannot find the quality unit that they are looking for because
it costs too much.
You have to understand on the Section 8 voucher program, we
have FMR, which is Fair Market Rents. We can only pay up to a
certain amount, 100 percent or 120 percent. Now, if you want to
live in a better neighborhood, the system will not allow you to
move into the north, which may be more prosperous and so forth.
And so, HUD will not allow you to go over a certain amount of
your FMR, unless you do reasonable accommodations and so forth.
There are so many parameters that fight against us, instead
of trying to help us house people. Because at the end of the
day, our business is to house individuals the best way we can,
give them the best quality unit, and so forth. And so, it is
just a matter of preference. A lot of residents have different
needs, different requirements, accessibility issues, aids, and
so forth when it comes to living conditions and so forth.
And, a lot of these homes have been built back in the 1950s
and 1940s and so forth. They do have accessibility issues. They
do not have ramps or those types of things, and that is always
an issue. When you have to turn back a voucher because you
cannot find adequate living conditions, that is really a sore
aspect of what we do when we try to do our job the best that we
can.
Mr. Kustoff. I thank you very much. If I could, along a
different line, as far as matrixes in your experience, does HUD
do a good job or an adequate job of tracking how individuals or
families, whether, in fact, they do, in fact, exit these
programs and, if not, do you have a solution?
Mr. Jones. Based on my experience, I think they do an
adequate job. The issue is that we have to feed that
information into HUD. And they do the matrixes on all the
information. And at local housing authorities, we do our own
matrix to make sure that we are fulfilling our HUD requirements
and our regulations and so forth.
As I always say, the proof is in the pudding. I think,
based on what we get from HUD and what we use locally, we merge
the two together and I think we can somehow come up with a good
explanation of where we should be at and where we should be
going.
Mr. Kustoff. Thank you. Thank you, Mr. Jones.
With that, Mr. Chairman, I yield back.
Chairman Clay. The gentleman yields back. I now recognize
the gentleman from Florida, Mr. Lawson, for 5 minutes.
Mr. Lawson. Thank you very much, Mr. Chairman, and
witnesses, welcome to the committee.
Mr. Jones, I know that you are very familiar with and have
worked for a long time on the housing situation in Atlanta. And
I would like to tell you that many years ago when I was
coaching at the college level, I spent a lot of time in those
housing complexes in Atlanta recruiting athletes, because you
had very good athletes in those areas.
The thing I would ask is, when the decisions are made that
they are not going to repair these housing complexes, but they
are going to tear them down and give vouchers to residents to
find another place to stay, what kind of effect does this have
on that community and whether they will be returning? And I
will start right here with Ms. Gass, and go down the line.
Ms. Gass. In Austin, we did give residents vouchers for
relocation and they were able to take those out in the private
market. And we provided a lot of assistance to help them. As
Mr. Jones said, it is not easy to use a voucher. We made sure
that every resident who got a voucher to use for relocation was
able to find a place that was adequate, decent, safe, and
sanitary, and met their family's needs.
I will say that most of the residents who relocated from
our housing projects have come back. The ones who have not,
although we did not like to lose them from the community from
which they came, we have to remember that when they were put in
place at that property, they were not given a choice of, would
you like to live at this property or this property? They were
told, we have an opening at this property, you can move here,
or you can move to the bottom of the list.
So getting that voucher and getting the choice to use it
wherever their family chose to use it was actually a good thing
for them. And when they found that place and they relocated and
they found a new school or they found a new church, a new
doctor, they were closer to their family and chose to stay
there, we would have loved to have had them back, but for their
family, that was the right choice. And I think one of the
things that makes RAD great is it does give residents more
choice and more control.
Mr. Lawson. Mr. Collins?
Mr. Collins. I just want to say when you talk about
demolition, I just want to make sure that we point out that at
that point, you have had to illustrate obsolescence to HUD,
which means that project would cost more than 60 percent of the
total development cost, which means it is in really bad shape.
So when you talk to a resident about moving out of a condition
of that nature, it is an easier conversation.
But there are plenty of meetings. They are informed the
whole way. They have relocation assistance. They have
relocation budgets. And so for most of them, it is just a
better opportunity for them, and it puts the housing authority
in a better situation because you are providing higher-quality
housing and you are able to better support that tenant.
Mr. Lawson. Dr. Popkin?
Ms. Popkin. The housing authority I have studied the most
is Chicago. People who moved out have ended up in better
housing in safer neighborhoods. I think that you asked the
question, what does it mean for the community as well, not just
for the people who moved out.
We know that because, as you said, the housing is obsolete.
And in the case of Chicago and a lot of cities, it is really
blighting the neighborhood around it. And we know that crime
went down in the communities where the housing was removed and
redeveloped.
I think the concern that I have, and a lot of people have
is, what does that mean for the housing prices in the
neighborhood, whether people will come back, and whether it is
going to spur gentrification? And I think we are studying
Choice neighborhoods and looking at that issue right now.
Mr. Lawson. Ms. Walz?
Ms. Walz. The tenants do receive notice under Section 18 if
there is a proposed demolition or disposition of the site, but
it is a foregone conclusion at that point. And so, the focus of
that notice and the meetings with residents is that you will be
moving. You will be receiving a Housing Choice voucher.
There is not a mandate on the type of relocation assistance
or support residents receive and that is an ongoing problem and
challenge. Oftentimes, it can be quite disruptive to the
residents and their families who have to move, potentially
change schools and employment, and are oftentimes on their own
looking for a landlord who would be willing, but not legally
required, in most cases, to rent to them with a Housing Choice
voucher. So, we do see that disruption.
I also note that it is particularly disruptive to seniors,
who may intend to age in place in these public housing units,
and moving into the Housing Choice voucher program is very hard
on them.
Mr. Lawson. I only have a few seconds.
Mr. Jones, what have you all done in the Simpson Road area?
Mr. Jones. It can be devastating, especially to the schools
that are in that community and so forth. They may close down
that elementary school or that middle school. That has a
devastating effect.
But also, I would like to remind you that in bigger housing
authorities, sometimes they may not accept a voucher. They may
go to another public housing site that accommodates their
various needs. So, there are options. They can stay on a public
housing site if there is a vacancy, which they choose, or they
can have a Housing Choice voucher.
Mr. Lawson. Okay. I yield back.
Chairman Clay. The gentleman yields back. The gentleman
from Tennessee, Mr. Rose, is recognized for 5 minutes.
Mr. Rose. Thank you, Chairman Clay, and thanks to Ranking
Member Stivers.
And thank you to the panelists for being here today and for
taking time to join us and share your wisdom with us.
When it comes to taxpayer dollars, we have a responsibility
to ensure that every dollar spent by the Federal Government is
used wisely, efficiently, and for its intended purpose. Once
again, though, I fear that today, we are here discussing how we
can solve our housing problems by throwing more money at them.
The Congressional Research Service has published estimates
that Congress has appropriated nearly $1.7 trillion to HUD
since its creation in 1965. Public housing currently occupies
some of the most expensive land in the nation, with
concentrations in cities on the east and west coasts. Current
stock is old and continues to age. More money may help
alleviate some of the issues that face public housing today,
but it will not fix many of the underlying problems.
Mr. Jones, both Republican and Democratic Administrations
have expressed the view that public housing is an outdated
model that, in many cases, concentrates poverty, is too
expensive, and can be subject to mismanagement and neglect. Do
you agree with those views?
Mr. Jones. I do.
Mr. Rose. What is it about the current public housing model
that lends itself to some of these issues?
Mr. Jones. There are numerous examples where public housing
does not work. I will agree with my colleagues, it is lack of
funding, lack of experience. Some of these housing agencies are
mismanaged.
Then, there are a lot of individuals going in and out of
housing. Different CEOs. There may be 5 CEOs in 5 years, and so
forth. That is always disruptive. And so, they miss their
motion, where they want to go, their mission. So, it is an
accumulation of a lot of things.
You have to have a good city, a partnership with your
colleagues there. They have to work with you. If they are not
working with you, then you have other community issues that you
have with the councilmen and aldermen and so forth.
So, it is everything. Being in charge of a housing
authority is a daunting task. We had to bring all elements of
the community, the city, the aldermen, the councilmen, the
Congressional staff, and so forth to talk about how do we do
this best, and how can we use the best resources and not waste
taxpayers' dollars? That is always a critical point. We want to
make sure that we protect them, but we also may stop doing what
we think we should do because we may be wasting taxpayers'
dollars.
Mr. Rose. I think we agree that we need smarter, more
innovative solutions than the ones we have largely been
discussing today. But there are some existing programs that
have shown promise, and I would like to drill down on those a
bit. The Moving to Work (MTW) demonstration program that was
created by Congress in 1996 to give HUD and local public
housing authorities the flexibility to test alternative
policies for providing housing assistance is one. These
alternative policies are intended to increase the cost-
effectiveness of assisted housing programs, promote self-
sufficiency, and increase housing choices for low-income
families.
Mr. Jones, what has your experience been with the MTW
program, and in your opinion, is it serving its intended
purpose?
Mr. Jones. I think the Chicago model is a great model that
everyone can use or take a look at. I am not saying that it is
the best model. I think it is a great model, and I think it
could be replicated in other places.
There are 39 MTW agencies right now. I think most of them
are doing well. It gives us an opportunity to have flexibility
and leverage our dollars. Developers, community, and so forth
look at MTW agencies to be very innovative and be a part of a
solution to provide more affordable housing and more
opportunities in their communities.
The Atlanta Housing Authority--I have just been there for
about 90 days and it is MTW, and they have done wonderful
things over the 20 years that they have been on MTW, less than
20 years, but they have done pretty successful things,
innovative things in Atlanta. And all of my other colleagues, I
have heard great things about what they have done in MTW.
Mr. Rose. I thank you, Mr. Chairman, and I yield back.
Chairman Clay. The gentleman yields back. I now recognize
the gentlewoman from Ohio, Mrs. Beatty, who is also the Chair
of our Subcommittee on Diversity and Inclusion, for 5 minutes.
Mrs. Beatty. Thank you so much, Mr. Chairman.
And thank you to all of the witnesses here. This has been
an interesting dialogue for me, because my early experiences
were with all public housing. Right out of college in Ohio, I
was one of those individuals who had to go in and do the
housing inspection for what you were allowed to have or not. I
did not like that very much, so I moved onto doing other things
with housing and then became a consultant, doing a lot of the
relocation work.
It's funny how history repeats itself, because then we were
relocating individuals out of public housing trying to get them
to Section 8 vouchers because HUD was going through a
transition for those properties, and the people got the checks
for renovating and had full ownership. And those businesspeople
made a lot of money. Then it transitioned, as you know--you are
all nodding, so I can stop. You know that story.
So here we are today, and I am struggling. I am struggling
because I do not believe that we are no longer living in a
society of poverty, that we are no longer free from economic
decay. While I wish all that was true, I do not believe it to
be so by 2021 or 2025.
My community is very much like yours, Ms. Gass. We are, as
the language goes, or your language goes, we are moving away
from public housing and RAD is the savior of all of this. So
help me understand, without RAD, what happens? We move people
into transition. We get rid of all of our public housing.
Yet, I know there will be people still coming up who need
public housing, because in Ohio we have thousands and thousands
and thousands of people who are on the wait list for Section 8.
And the transition has been, you wait, and you are so happy for
housing, to get into public housing, and to bring your family
with you.
Then I think, as we try to have our motto be, we want
people to become self-sufficient or self-reliant, that was the
language we used to use. And that meant you moved out of
housing. You moved into Section 8. And then, you got into
rentals on your own or home ownership.
So if we are taking away that foundation, we have a wait
list with Section 8. What happens next year, no more RAD, no
more public housing? Section 8 wait list all over the country,
what happens? What should I be advocating for? We just heard
how my colleague started on the other side about the land,
about the cost. What happens? What should I do?
Mr. Collins. I just want to say that in Shreveport,
Shreveport is a Choice community, which means we have a plan
grant and an implementation grant. And that is going to afford
us the opportunity to build almost 500 new units. And half of
those units will be affordable. They will have vouchers
attached to them that we still control.
Mrs. Beatty. We just will not call them public housing?
Mr. Collins. Yes, ma'am.
Mrs. Beatty. So we are really just changing the name, but
with people still in poverty, still moving up? We will be in
something; we just will not call it public housing.
Mr. Collins. Yes, ma'am. And I think that is what everybody
is trying to paint; the affordability component of it is not
going away, just the name is changing. We are doing those
things and leveraging those resources that are available to
make sure that we do not take away public housing, but make
sure that we can reinforce affordable housing for folks.
So, it will be a replacement of that housing. And that what
my appreciation is, of what the programs are designed to do.
And in Shreveport, we see them effectively working. We have RAD
conversions. We have Choice neighborhoods. We have our State
finance agency programs that are converting. But all of these
things are creating more affordable housing. That is still our
mission.
Mrs. Beatty. And we have that too, but what about the
smaller? There are only so many, like my public housing that
are the large public housing. So somebody help me understand,
what happens to the smaller public housing that does not have
all of that to help with the infrastructure? And if we keep
cutting money in HUD, to go back for some of the programs, like
Family Unification and other things that help, what happens to
this?
I am not concerned about the big public housing, because
they have the resources. I am concerned with the smaller ones,
like I am concerned with the people who find themselves at the
bottom. For the people who are at the top, it is easier to get
out of anything when you almost have your head above the water.
Mr. Collins. Can I just say, I think that is the challenge.
That it is hard to put our arms around it because it is so
dynamic from city-to-city, from organization-to-organization.
What works for one, may not work for another.
Mrs. Beatty. I am only concerned about the small, what
happens to them?
Mr. Collins. The small ones, we are going to have to
reinforce some of those programs to get them better assistance,
so that they can evaluate those tools and better leverage those
tools. So I agree with you, we need to do something to
reinforce--
Mrs. Beatty. I know my time is up, Mr. Chairman.
And please, let me know. I appreciate your work, Mr.
Collins, and everyone else. I am trying to help, not be against
you all.
Mr. Collins. No.
Mrs. Beatty. Because what we do know, for the least of us,
when we do not have the resources and we are not putting it
back in and you have people in programs who do not have it,
those are the individuals who lose. Thank you.
Chairman Clay. The gentlewoman yields back. I now recognize
the gentleman from Wisconsin, Mr. Steil, for 5 minutes.
Mr. Steil. Thank you very much. And I appreciate my
colleague from Ohio's remarks on the distinction between the
big cities and the small cities.
I may come back to you, Mr. Collins, in just a moment
because I want to follow up on that.
But I want to ask Mr. Jones a question first. I have family
who live in the City of Chicago, and my commute down from
Wisconsin as a kid would take me by Cabrini-Green. And so, I
saw it regularly, kind of this whole journey through the 1980s,
the 1990s, to what it is today, and the Marianos that is there
today. I've stopped there and picked up groceries, which might
not have been an opportunity presented to me about 20 to 30
years ago.
As you look at the evolution that Chicago saw in shifting
from the model that it had to the model it has today, and I
think maybe a lot of us in this room know, but I think it is
good for the record as we discuss the terminology here. Public
housing sometimes gets painted with a broad brush. When I am
thinking of public housing in the context that it is direct
management and ownership of housing units by publicly charted
entities funded by the Federal Government.
Sometimes, I see the term used more broadly to refer to all
rental-assistance programs, Section 8 housing vouchers, Housing
Choice vouchers. I am talking about public housing in the
traditional sense of the word, which I think is a key
distinction between the two. Can you just walk through a little
bit of where you saw that evolution in Chicago, as it played
out in safety, social, mobility, and the number of people
served?
Mr. Jones. Well, I think the model in Chicago worked
because of the MTW status and the plan for transformation.
Because we were on a fast clip to either acquire, build, or
provide housing shortage vouchers or project-based rental
assistance to get to those 25,000 units that they tore down
over the last 10 years or so.
And so, for that transformation and to put all of those
resources together, HUD invested about $2 billion in that plan
for transformation. To get it from where it was, those high
rises, and so forth, that were crime-ridden, maintenance was
poor, there was no job opportunities, there was no camaraderie,
there were no neighborhoods.
And they were isolated from all the other parts of the City
of Chicago. The Chicago Housing Authority was the second-
largest City in the State of Illinois, but they were so
isolated from railroad tracks and other sites and so forth. And
so when they broke down those barriers, then they became a
seamless transition, so they fit into the neighborhood.
When you go down State Street and so forth in Chicago, you
could never tell that this used to be Taylor Homes or anything
else that was associated with public housing. It is a mixed-
income development on both sides of the streets and so forth.
And so that model does work, and it still works today with the
Cabrini. Ida B. Wells has transformed to another development.
All of the other different things that they have done over
there are just amazing.
Mr. Steil. I appreciate your comments. I also think it is
interesting that the Brown Line of Chicago does not stop at
Division; there is probably some history of which I am unaware,
but that is clearly an issue when that was the traditional
Cabrini-Green that it was, that residents who lived there did
not have access to the mainstream Chicago public transit area
that I am not an expert in.
Let me shift back over to Mr. Collins, if I can. While we
are talking public housing, I want to just shift gears a little
bit and discuss a little more broadly affordable housing
solutions that might help families provide a platform for that
social mobility. Specifically, I want to focus on how Federal
financial assistance and Federal policies impact public housing
authorities in small and mid-sized cities.
In particular, in my district, in the City of Racine, we
have large areas of poverty, but without traditional public
housing. But areas that have a lot of Federal assistance. When
I have listened to your testimony today, I think a lot about
how there are parallels between areas where you have worked,
and the City of Racine in my district.
We have heard a lot about what works and does not work well
in big cities. Can I just give you another minute to discuss
some of the lessons that you have learned from your experience
working in smaller cities?
Mr. Collins. I think in smaller cities and smaller housing
authorities, of course, we are all used to adapting to change.
I think you find that there is more of a reluctance to adapt to
change. And so we just need to do a better job of educating
those housing professionals in rural America on what their
options are and making them feel more confident that they can
leverage these programs, et cetera.
I just find that housing is so dynamic. You have these
large agencies, and that is where policy seems to be focused.
And I think that we need to kind of categorize this a little
bit better, so that we can shift some of the policies and
tailor it a little bit more to some of the smaller agencies and
what some of their concerns are.
Mr. Steil. I appreciate your comment, and I think it is
really important that we stay focused in on the distinction
between some of the problems that exist and some of our large
urban areas and some of the struggles that we have in some of
our smaller and midsize cities. I appreciate you being here.
And I yield back.
Chairman Clay. The gentleman yields back. I now recognize
the gentlewoman from Michigan, Ms. Tlaib, for 5 minutes.
Ms. Tlaib. Thank you, Mr. Chairman.
Thank you all so much for being here. One of the things in
my district is many of the housing justice advocates have been
focused on formulas, right? For years, we have been focusing on
trying to increase funding and so forth and we do both. But
right now is more and more, well, how do you define affordable
housing? Is AMI working? Is this a form of legalized
speculation, right?
So these structures and these formulas that are in place
right now are not really translating into, I think, real
affordable housing. It may have at the beginning, but somehow
it has been, I use strong words like ``hijacked'' by the
industry, to be able to move towards something much more
lucrative, much more for profit, where others are left out.
And so, it cannot just be about funding anymore. I think
there has been kind of an awakening among the housing justice
community in that effort in saying, look, we have to look at it
in a way that isn't going to stick, isn't going to be
sustainable. In vulnerable communities like mine--13 District
strong is the 3rd-poorest Congressional district. We have, I
think, throughout Wayne County, the 12 communities, we have a
shortage of about 36,000 affordable housing units for
extremely-low-income renters.
And HUD is talking about, I think, eliminating about
125,000 units by 2020. We know that's not going to work. One of
the things that has really been discussed, other than the
approach of RAD, which some are thinking could be a legalized
form of speculation, and I want to hear from you all about
this, and when I say legalized speculation, is basically these
for-profit, these kinds of so-called developers that get little
fancy names. Whatever. These folks want to come in and make
money on the backs of--allow us to subsidize and so forth. Make
money on the backs of the public and the poor and then later be
able to just keep it and own it and we see it over and over
again in Detroit all the time.
But one of the things that we have been talking about is,
instead of only using Section 8 housing vouchers for rental,
expanding it to use for home ownership. And yes, there is only
a small portion of this. Can you all talk about that, because
it is bizarre for me that we have not actually really dug
deeper into, how do we increase home ownership and create
economic stability for a family? We do it for the developer.
They get to own it with our money, but we cannot give it to a
mother and say here, we are going to give this to you and you
are going to take it.
And so I really think it is critically important that we
start thinking about, why can't we expand and say, look, here
is a Section 8 voucher. Go become a homeowner. We are going to
help you. Think just how bizarre that we do not see it that
way. Instead, we want them to be renters forever, which is
instability. We have to fight continually to keep it affordable
for them, where we can actually get them into a home. So I want
to hear from you all, what are you doing to push HUD towards
expanding Section 8 vouchers towards home ownership?
Mr. Jones. Congresswoman, I was in the Detroit Housing
Commission from 2007 to 2012, and we rebuilt a bunch of those
Hope 6 sites at Old Herman Gardens. You have Emerald Springs on
the Eastside and so forth. Home ownership, HUD has a program, a
Section 8 program of rent-to-own. And so we specify because a
rent-to-own is they are able to rent a unit and not become
renters for life, but also use that rent money that they are
paying for to pay down on eventually a house. And so, we have
been supporting that.
And I know my colleagues who have a Section 8 program, we
do, do the rent-to-own program and it has been very successful.
In Chicago, we probably had about 600 people who have turned
from a Family Self-Sufficiency program to a Rent-to-Own program
to home ownership. The same thing in Atlanta. And so, a lot of
our colleagues have been doing that. It has been small, and we
want to increase it, but it takes time to mature a resident and
a family to come through the program to build their credit back
and so forth.
And we always encourage home ownership. If we can do it all
day, every day, we would do it more often. And I am pretty sure
my colleagues can agree with me on that.
Mr. Collins. I would just say, he is right on point. That
is most of the time getting them to the point where they are
able to purchase and qualify for mortgages. We have actually
bought 10 lots. We are going to build houses at cost to make
sure that the voucher can go as far as it can with
affordability for those families that we do get ready. But we
are handymen, who can only work with the tools that are in our
toolbox. Those tools are limited. So, that is how I see it.
Ms. Tlaib. Thank you, Mr. Chairman. And I would like to
submit questions for the record. I have some follow-up
questions about qualifying for mortgages and so forth. Thank
you so much.
Chairman Clay. The gentlewoman's time has expired. I now
recognize the gentleman from Ohio, Mr. Gonzalez, for 5 minutes.
Mr. Gonzalez of Ohio. Thank you, Mr. Chairman, for holding
this hearing.
And thank you to the witnesses for participating today. For
those who work directly in this industry, I think you have some
of the most difficult jobs in the country, frankly. As Mr. Heck
articulated, I think quite well, there is a housing supply
crisis. We do not have anywhere near the number of homes being
built today. And, of course, it has been true for generations
of Americans that having access to affordable starter homes
that you can own and build equity is something that allows
families to build wealth, generational wealth, and really get
off on the right footing.
That being said, and I heard Ms. Tlaib mention it as well,
home ownership is a key pillar. It is odd to me that there is a
big push towards more public housing defined in the narrow
sense that Mr. Steil defined it as because, of course, you do
not own those. Those are owned by housing authorities. And so,
I think if our goal is home ownership, to promote more spending
on items that by their very nature do not lead to home
ownership of that specific unit, I think, is misguided.
I guess my first question would be to Mr. Jones. I think
you have obviously been around different cities and have seen
different programs work, some better than others. I would like
you to speak specifically about how we can get sort of more out
of the RAD program. What can we do to make sure that the RAD
program or other programs would be more successful when it
comes to encouraging the end of homelessness, but also home
ownership?
Mr. Jones. I think the way that occurs, the RAD program to
expand a little bit, is to listen to the people who are at this
table, who run these housing agencies, to look at some of the
pitfalls from it. RAD is not turned over tomorrow. If you
submit a RAD application, it takes a while. And the cumbersome
nature of the paperwork and so forth. But once it is done, then
the action starts. I think it is more of a mentor--
Mr. Gonzalez of Ohio. How long does that paperwork
typically take?
Mr. Jones. It just depends.
Mr. Gonzalez of Ohio. Yes.
Mr. Jones. Sometimes you may not submit that right piece of
paper and you have to start all over again or you have to amend
it and so forth.
Mr. Gonzalez of Ohio. Yes.
Mr. Jones. HUD does work with you diligently because they
know it is a matter of urgency that you are doing something
with RAD because everything is financed, and everything is
ready to close, so there is a matter of urgency. But how can we
streamline it and make it quicker? To make it very appropriate,
looking at the guidelines. Does it actually fit your needs? And
if it does not, what is your alternative?
And listening to the lay people who do this work every day,
I think that will start the better suggestions about how we can
improve that program. How we can get more invested in it. The
issue is that a lot of agencies do not understand the RAD
program. They do not have the capacity to do it, and then they
lean themselves over our trade association, NARA, PHADA, and
CLPHA They do a tremendous job, but to be there right next to
them, holding that executive director's hand to show them the
pluses and minuses of the program is much needed also.
Mr. Gonzalez of Ohio. Yes. And it sounds like HUD could do
a better job in that regard as well. Would you agree?
Mr. Jones. Yes.
Mr. Gonzalez of Ohio. From both a streamlining, but also
working with the agencies themselves?
Mr. Jones. They have been working diligently, but it is not
perfect.
Mr. Gonzalez of Ohio. Right. Absolutely. And then just
shifting gears a little bit, in Ohio, where I am from, we have
two cities that are participating in HUD's Envision Center
Demonstration program, that is designed to streamline
government services and help more Americans become self-
sufficient, sort of what we were just talking about. Do you or
anybody on the panel have any feedback on this program to date
and what else we can do on that front? Mr. Collins?
Mr. Collins. I think we are pretty close, based on the
Secretary's office, to being designated an Envision Center, but
the only thing I would add is it does not come with funding
right now. You have to pool sources for funding. So I would
think that at some point, it may need to be looked at to figure
out how you can appropriately fund the mission of the Envision
Center.
Mr. Gonzalez of Ohio. Great. And with that, I want to thank
the panel again. You all are doing incredible work.
And I yield back.
Chairman Clay. The gentleman from Ohio yields back. I want
to thank Mr. Gonzalez for your line of questioning and your
participation in this hearing, as well as thank the entire
panel for your participation today to help inform us, the
policymakers. I think this has been quite an eye-opening
experience for us to get your testimony on the record in order
for us to advise the agency of how they could move forward more
efficiently and more proficiently on this issue. So, thank you
all very much.
And I would like to thank our witnesses, again, for your
testimony.
The Chair notes that some Members may have additional
questions for this panel, which they may wish to submit in
writing. Without objection, the hearing record will remain open
for 5 legislative days for Members to submit written questions
to these witnesses and to place their responses in the record.
Also, without objection, Members will have 5 legislative days
to submit extraneous materials to the Chair for inclusion in
the record.
This hearing is adjourned.
[Whereupon, at 3:59 p.m., the hearing was adjourned.]
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A P P E N D I X
February 5, 2020