[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]


                        BUILT TO LAST: EXAMINING
                         HOUSING RESILIENCE IN
                       THE FACE OF CLIMATE CHANGE

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

                                HEARING

                               BEFORE THE

                        SUBCOMMITTEE ON HOUSING,
                         COMMUNITY DEVELOPMENT,
                             AND INSURANCE

                                 OF THE

                    COMMITTEE ON FINANCIAL SERVICES

                     U.S. HOUSE OF REPRESENTATIVES

                    ONE HUNDRED SEVENTEENTH CONGRESS

                             FIRST SESSION

                               __________

                              MAY 4, 2021

                               __________

       Printed for the use of the Committee on Financial Services

                           Serial No. 117-21
                           
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]	

                                __________
                               

                    U.S. GOVERNMENT PUBLISHING OFFICE                    
44-836 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             FRANK D. LUCAS, Oklahoma
GREGORY W. MEEKS, New York           BILL POSEY, Florida
DAVID SCOTT, Georgia                 BLAINE LUETKEMEYER, Missouri
AL GREEN, Texas                      BILL HUIZENGA, Michigan
EMANUEL CLEAVER, Missouri            STEVE STIVERS, Ohio
ED PERLMUTTER, Colorado              ANN WAGNER, Missouri
JIM A. HIMES, Connecticut            ANDY BARR, Kentucky
BILL FOSTER, Illinois                ROGER WILLIAMS, Texas
JOYCE BEATTY, Ohio                   FRENCH HILL, Arkansas
JUAN VARGAS, California              TOM EMMER, Minnesota
JOSH GOTTHEIMER, New Jersey          LEE M. ZELDIN, New York
VICENTE GONZALEZ, Texas              BARRY LOUDERMILK, Georgia
AL LAWSON, Florida                   ALEXANDER X. MOONEY, West Virginia
MICHAEL SAN NICOLAS, Guam            WARREN DAVIDSON, Ohio
CINDY AXNE, Iowa                     TED BUDD, North Carolina
SEAN CASTEN, Illinois                DAVID KUSTOFF, Tennessee
AYANNA PRESSLEY, Massachusetts       TREY HOLLINGSWORTH, Indiana
RITCHIE TORRES, New York             ANTHONY GONZALEZ, Ohio
STEPHEN F. LYNCH, Massachusetts      JOHN ROSE, Tennessee
ALMA ADAMS, North Carolina           BRYAN STEIL, Wisconsin
RASHIDA TLAIB, Michigan              LANCE GOODEN, Texas
MADELEINE DEAN, Pennsylvania         WILLIAM TIMMONS, South Carolina
ALEXANDRIA OCASIO-CORTEZ, New York   VAN TAYLOR, Texas
JESUS ``CHUY'' GARCIA, Illinois
SYLVIA GARCIA, Texas
NIKEMA WILLIAMS, Georgia
JAKE AUCHINCLOSS, Massachusetts

                   Charla Ouertatani, Staff Director
                  Subcommittee on Housing, Community 
                       Development, and Insurance

                  EMANUEL CLEAVER, Missouri, Chairman

NYDIA M. VELAZQUEZ, New York         STEVE STIVERS, Ohio, Ranking 
BRAD SHERMAN, California                 Member
JOYCE BEATTY, Ohio                   LANCE GOODEN, Texas
AL GREEN, Texas                      BILL POSEY, Florida
VICENTE GONZALEZ, Texas              BILL HUIZENGA, Michigan
CAROLYN B. MALONEY, New York         LEE M. ZELDIN, New York
JUAN VARGAS, California              TREY HOLLINGSWORTH, Indiana
AL LAWSON, Florida                   BRYAN STEIL, Wisconsin, Vice 
CINDY AXNE, Iowa                         Ranking Member
RITCHIE TORRES, New York             JOHN ROSE, Tennessee
                                     VAN TAYLOR, Texas
                            
                            
                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on:
    May 4, 2021..................................................     1
Appendix:
    May 4, 2021..................................................    39

                               WITNESSES
                          Tuesday, May 4, 2021

Ellis, Rodney, Commissioner, Harris County, Texas................     4
Ellis, Stephen, President, Taxpayers for Common Sense............    10
Godreau-Aubert, Ariadna M., Executive Director, Ayuda Legal 
  Puerto Rico....................................................     5
Mais, Andrew N., Commissioner, Connecticut Department of 
  Insurance, on behalf of the National Association of Insurance 
  Commissioners (NAIC)...........................................     7
Poticha, Shelley, Chief Climate Strategist, Natural Resources 
  Defense Council (NRDC).........................................     9

                                APPENDIX

Prepared statements:
    Ellis, Rodney................................................    40
    Ellis, Stephen...............................................    49
    Godreau-Aubert, Ariadna M....................................    55
    Mais, Andrew N...............................................    67
    Poticha, Shelley.............................................    73

              Additional Material Submitted for the Record

Stivers, Hon. Steve:
    Written statement of the BuildStrong Coalition...............    91
    Written statement of the Reinsurance Association of America 
      (RAA)......................................................    95
Ellis, Rodney:
    Letter from the City of Houston Housing & Community 
      Development Department.....................................   119

 
                        BUILT TO LAST: EXAMINING
                         HOUSING RESILIENCE IN
                       THE FACE OF CLIMATE CHANGE

                              ----------                              


                          Tuesday, May 4, 2021

             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 12:04 p.m., 
via Webex, Hon. Emanuel Cleaver [chairman of the subcommittee] 
presiding.
    Members present: Representatives Cleaver, Velazquez, 
Sherman, Beatty, Green, Gonzalez of Texas, Maloney, Vargas, 
Lawson, Axne, Torres; Stivers, Posey, Huizenga, Zeldin, Steil, 
and Taylor.
    Ex officio present: Representative Waters.
    Chairman Cleaver. 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.
    As a reminder, I ask all Members to keep themselves muted 
when they are not being recognized by the Chair. The staff has 
been instructed not to mute Members, except when a Member is 
not being recognized by the Chair and there is inadvertent 
background noise. Members are also reminded that they may only 
participate in one remote proceeding at a time. If you are 
participating today, please keep your camera on. And if you 
choose to attend a different remote proceeding, please turn 
your camera off.
    Today's hearing is entitled, ``Built to Last: Examining 
Housing Resilience in the Face of Climate Change.''
    I now recognize myself for 4 minutes to give an opening 
statement.
    Today, we will examine the effects of climate change on 
America's housing infrastructure, and within the jurisdiction 
of this subcommittee, the role of the Federal Government in 
mitigating, responding to, and recovering from weather events.
    Climate change is the biggest existential crisis of our 
time. Scientific data demonstrates that the average global 
temperature is trending upward, and that more record-setting or 
near-record-temperatures are likely on the horizon.
    According to the National Oceanic and Atmospheric 
Administration (NOAA), last year was the second-warmest year on 
record, behind 2016, and 10 of the warmest years on record have 
occurred since 2005. Rising global temperatures associated with 
widespread changes in weather patterns and scientific studies 
indicate that extreme weather events such as heat waves and 
large storms are likely to become more frequent or more intense 
with human-induced climate change.
    The Federal Government estimates the occurrence and costs 
of weather and climate disasters, and last year set a new 
annual record for disasters, with 22 weather or climate 
disasters in the United States, exceeding $1 billion in losses.
    And 2020 was the 6th consecutive year in which 10-or-more 
billion-dollar disasters have impacted the United States. As 
people in every State and Territory in the United States remain 
concerned about climate change impacts, the impetus is on 
Federal policymakers to be diligent in supporting resilient and 
prepared communities and to prioritize areas that are most 
vulnerable to climate risk, including low-income neighborhoods 
and communities of color. We will talk more about that when we 
get into the question-and-answer period.
    I would now like to recognize the ranking member of the 
subcommittee, the gentleman from Ohio, Mr. Stivers, for 5 
minutes.
    But before I do, I want to just thank Ranking Member 
Stivers for the opportunity to work with him over the past few 
years. He has been on this committee since he was elected to 
Congress. I have enjoyed working with him, and I would like to 
thank him for his civility and his decency. I wish him much 
success in his new job. And we hope that you will remember us 
when you enter into the land of great wealth, opportunity, 
mansions, and expensive cars.
    So, Ranking Member Stivers, you are now recognized for 5 
minutes.
    Mr. Stivers. Thank you, Chairman Cleaver. I appreciate you 
calling this hearing today, and I appreciate the chance to chat 
with you. As you noted, on a personal note, it is a bittersweet 
moment for me, because this is my last hearing as the ranking 
member of this subcommittee before I leave Congress in a couple 
of weeks.
    And as I reflect on my time in Congress, I am proud of the 
work we have done together, and there is a lot more to be done. 
So, I hope that all of you will continue to work on.
    It is been an honor to work with you, Mr. Chairman, and the 
members of both the Majority and the Minority, I have enjoyed 
working with everybody. And the good news is I am just taking 
another job; I am not dying. So, I will still be around, and I 
plan to be in Washington a decent amount. And I still care 
about these issues.
    Getting back to the topic of today's hearing on resiliency, 
I think it is important that we tackle the issue of making our 
housing stock as resilient as we can from natural perils. And I 
think it is really interesting to note that Congress has 
enacted two 5-year reauthorizations of the National Flood 
Insurance Program (NFIP) since 1994, only two, once in 2004 and 
once in 2012. There have been 16 short-term extensions since 
2017. And I hope my colleagues will work in a bipartisan manner 
to actually get something done.
    I know, last year, we negotiated a bipartisan bill that 
came out of this committee but didn't advance. And so, I am 
hopeful that you will continue the bipartisan efforts around 
resiliency. And the big part of that in this committee is the 
National Flood Insurance Program.
    There is a lot we need to do, that I plan to talk to our 
witnesses about. We need to do a better job on the mapping--3D 
mapping is an imperative if we are going to figure out how to 
deal with resiliency, and we have to figure out how to deal 
with claims that are filed multiple times on the same property.
    And I think there will be some ways to deal with that. I 
think mitigation is so important, and the mitigation efforts 
are really as important as what you do inside the Flood 
Insurance Program itself. So, I hope my colleagues will keep 
these issues in mind. There is a lot to do moving forward, and 
I look forward to being an outside ally that you can count on 
to continue to make things work and to move things forward.
    I look forward to hearing from our witnesses today, Mr. 
Chairman. Thank you for your civility, thanks for your great 
partnership, and I look forward to working with you from the 
private sector--maybe I will be wearing a better suit, but I 
look forward to working with you on an ongoing basis.
    Chairman Cleaver. Thank you.
    Mr. Stivers. I yield back.
    Chairman Cleaver. Thank you, General Stivers. The Chair of 
the full Financial Services Committee, Chairwoman Waters, is 
not here at the moment. But I want to make sure all Members 
know that whenever she arrives, after the speaker who may be 
recognized at that moment, I will recognize the chairwoman for 
such time as she may consume.
    And now, let's get on with the introduction of those who 
are going to be with us today as witnesses. Let me give 
Congressman Al Green the opportunity to introduce our first 
witness.
    Mr. Green. Thank you, Mr. Chairman. I greatly appreciate 
this opportunity. Our first witness is a former City Council 
person who went on to be a State senator, who is now a county 
commissioner, and who is very well-learned and knowledgeable 
about these issues associated with Community Development Block 
Grant Disaster Recovery (CDBG-DR). I am honored to introduce 
and present to everyone, Commissioner Rodney Ellis.
    Mr. Rodney Ellis. Thank you, Congressman Green.
    Chairman Cleaver. Yes. Let me introduce all of the 
witnesses, and then we will move toward the questions and 
answers after the chairwoman comes in.
    We have also with us today: Ariadna M. Godreau-Aubert, 
executive director of Ayuda Legal Puerto Rico; Commissioner 
Andrew N. Mais of the Connecticut Department of Insurance, 
testifying on behalf of the National Association of Insurance 
Commissioners; Shelley Poticha, chief climate strategist for 
the Natural Resources Defense Council; and Stephen Ellis, 
president of Taxpayers for Common Sense.
    We will proceed with the statements, beginning with 
Commissioner Rodney Ellis.

 STATEMENT OF RODNEY ELLIS, COMMISSIONER, HARRIS COUNTY, TEXAS

    Mr. Rodney Ellis. Thank you, Chairman Cleaver, Ranking 
Member Stivers, and distinguished members of the subcommittee. 
And thank you, Congressman Al Green, for your friendship over 
many years. I am proud to testify today.
    My name is Rodney Ellis, and I represent about 1.1 million 
people in the third largest county in the country. The City of 
Houston is the County Seat of Harris County. We have a total 
population of about 4.6 million people in our County.
    Harris County residents have long dealt with flooding and 
natural disasters due to our location near the Gulf of Mexico, 
and our flat topography that barely rises above sea level, 
however, climate change is now adding a new level of urgency by 
increasing the frequency of extreme weather events.
    In 2017, Hurricane Harvey devastated this region. This 
hurricane dropped more than 50 inches of rain in some parts of 
Houston, causing more than 100 deaths, and resulting in $125 
billion worth of damage in the Gulf Coast region.
    Our residents are still dealing with the impacts of 
Hurricane Harvey. According to a University of Houston study, 
nearly 20 percent of the residents who were displaced by the 
storm are still in temporary housing. Natural disasters, such 
as Harvey, exacerbate pre-existing structural inequalities.
    A study by Rice University and the University of Pittsburgh 
found that between 1999 and 2013, natural disasters increased 
Houston's racial wealth gap by $87,000. Time and time again, 
the poorest neighborhoods in Harris County are the hardest-hit 
during storms, floods, and other natural disasters, but they 
receive the least amount of resources to recover, rebuild, and 
build resiliency against the next flood.
    The Federal cost-benefit ratio of flood standards for 
mitigation projects are based on property values rather than 
historical impact and ability to recover, which means low-
income, oftentimes Black and Hispanic communities, like the 
Fifth Ward, where Congressman Mickey Leland and Congresswoman 
Barbara Jordan hailed from, have been passed over for Federal 
funding for years, despite extreme flood protection in the 
area.
    This creates a cycle where those in higher-income 
neighborhoods get access to funding for new projects, while 
certain neighborhoods continue to suffer from disinvestment. By 
prioritizing property over people, areas of high-income values 
and fewer people are often selected over areas with larger 
populations living in expensive homes, even if they are at 
higher risk of flooding and greater damage, to protect people 
in those communities.
    The State of Texas received $4.2 billion from the 
Department of Housing and Urban Development's Community Block 
Grant Mitigation Fund, which is administered by the State 
through our General Land Office, to address infrastructure and 
build and implement structural and non-structural projects, 
programs, and partnerships that reduce the risk and impacts of 
future natural disasters.
    Although my County is very grateful for the sizable Federal 
investments, there are significant shortcomings in the 
administration of these programs, both at our level, on the 
State level, and the Federal level.
    In the CDBG Disaster Recovery Programs, an Urban Institute 
report found that implementation challenges and slow timelines 
are a problem. On average, programs took about 4.7 years to 
complete across all activity types, and 3.8 years to complete 
across housing activities.
    This is reflected in several-year delays at the General 
Land Office (GLO) in Texas of disbursement of funds to Harris 
County. The slow response from the State's GLO to allocate and 
disburse funds means that communities are desperately waiting 
for help to rebuild their homes and lives years after Hurricane 
Harvey.
    Reducing the risk of harm from future floods requires bold 
control of infrastructure, policies, and regulations. Following 
Harvey, we successfully advocated on the County level for 
equity guidelines on how we disbursed flood infrastructure and 
recovery projects. We passed a $2.5 billion bond package, which 
was approved by our voters in 2018. When we prioritize the most 
vulnerable, our investments create a big impact and bring more 
benefits to more people.
    As my written testimony has outlined, there are many 
challenges on the road to full recovery from Hurricane Harvey, 
and preparing for future storms that we know will come more 
frequently. But there are steps that this subcommittee and HUD 
can take to support communities like Harris County, and all 
across our country.
    The Texas Government General Land Office needs more 
oversight, and so do we. It is a good thing for you to come 
back and ask, what are we doing with the money you gave us, to 
provide more transparent, comprehensive information on the way 
that the money is being disbursed through the CDBG Block Grant.
    Mr. Chairman, I would like to submit a letter for the 
record as well from our Housing Office. And I will be more than 
happy to answer any questions. Thank you.
    Chairman Cleaver. Without objection, it is so ordered.
    [The prepared statement of Commissioner Rodney Ellis can be 
found on page 40 of the appendix.]
    Chairman Cleaver. Thank you, Commissioner Ellis.
    The Chair now recognizes Ms. Ariadna Godreau-Aubert for an 
oral presentation of your testimony.

  STATEMENT OF ARIADNA M. GODREAU-AUBERT, EXECUTIVE DIRECTOR, 
                    AYUDA LEGAL PUERTO RICO

    Ms. Godreau-Aubert. Chairman Cleaver, Ranking Member 
Stivers, and members of this subcommittee, thank you for the 
invitation to testify. I am Ariadna Godreau-Aubert, founder and 
director of Ayuda Legal Puerto Rico.
    Since 2017, we have led legal support and advocacy efforts 
around disaster recovery on the Island. Almost 4 years of 
disasters bring us closer to a climate, housing, and 
infrastructure crisis that threatens the possibility of life in 
Puerto Rico--12 percent of the population has left in a decade, 
and 24 percent of our people live in high- to high-medium-risk 
zones, so addressing effective disaster planning and response 
in affordable or resilient houses is urgent.
    Families who were not able to access FEMA, who were turned 
down or neglected--Tu Hogar Renace, a Sheltering and Temporary 
Essential Power (STEP) Program, was brought in to repair, 
rebuild, and relocate the CDBG-DR Program administered by our 
local Department of Housing. Between July 2019 and January 
2020, 27,000 families applied, and as of today, only 900 houses 
have been repaired, and 45 have been rebuilt.
    A new hurricane season starts in 26 days. We need disaster 
assistance to arrive quickly. We need guidelines to ensure 
coherent planning, equitable access to funds, displacement 
minimization and participation. We need flexibility.
    Disaster assistance should not be a blind bet on possible 
outcomes, but a strategy towards sustainable recovery, and 
Federal and local governments share the responsibility to lead 
survivors to resiliency. We need CDBG-DR to be permanently 
authorized. The wait for allocation notices is excruciating; 
mitigation funds destined to Puerto Rico were made available 
almost 24 months after the appropriation.
    Permanent authorization could also deter political actions 
to relay funds, such as those experienced by Puerto Rico, and 
that were grounded on a complete disregard for the lives of 3 
million people on the Island. Permanent authorization could 
pave the way for agility, for modern policies, and it could 
provide a core set of guidelines to stop what is happening in 
Puerto Rico where significant restrictions are locally imposed.
    Title clearance should never be a condition for disaster 
assistance. Half of the people in Puerto Rico lack a formal 
title. While local laws do not require a deed, and Federal 
disaster regulations provide a broad definition of ownership, 
FEMA's incorrect interpretation excluded 77,000 families from 
receiving assistance.
    Ayuda Legal drafted an alternative title declaration, and 
we advocated for FEMA to stop barring assistance, and we won, 
but it was too late. FEMA's reluctance to notify applicants 
about their right to appeal and use of declaration, placed on 
the backs of nonprofits the responsibility to let survivors 
know about these rights. And we couldn't do it.
    Later, the local Department of Housing decided to require 
titles to repair, rebuild, or relocate using CDBG-DR funds. 
Thousands of applications were transferred to an unnecessary, 
big, and costly title clearance program, delaying evaluations 
for months and even years. Eventually, we attained an Executive 
Order waiving title requirement to repair and rebuild, yet, the 
Department of Housing requires title to relocate.
    With $1.1 million disbursed, only 2 titles have been 
registered. Proof of title has been an obstacle in California 
and North Carolina, as well, where recovery processes would 
benefit from clear and inclusive definitions of ownership. 
Title issues will not be solved by disaster programs or legal 
aid; they require policy changes at local levels.
    Guidelines could also prevent displacements; despite 
mitigation funds, our CDBG-DR plan has an across-the-board 
prohibition to rebuild in flood zones. These families in flood 
zones are only able to relocate. These relocations are never 
voluntary. Four years after our disaster, our low-income 
families without a safe dwelling would have no choice but to 
relocate if the alternative is to receive no aid at all.
    We need sensible relocation policies that account for the 
needs, wants, and human rights of communities. Relocation 
should never be the first option. We need mitigation and anti-
displacement policies. Mitigation can be effective, save funds, 
and address climate change; yet, wrongly applied mitigation may 
also displace and worsen inequitable development.
    Lastly, participation is essential for the success of 
recovery. Sustainable solutions require acknowledging the power 
and agency of local stakeholders. Regional civilian oversight 
committees facilitated by independent individuals, never 
Department of Housing staff, must be promoted, and coherent and 
participatory planning is equally essential.
    One of the biggest obstacles for needs assessments and 
resilient housing infrastructure is that CDBG-DR planning 
programs have barely started, hardcore guidelines should 
instruct grantees to publish timelines, to publish progress 
reports, and to prioritize participatory planning.
    A just recovery is not only needed, but it is possible. 
Thank you.
    [The prepared statement of Ms. Godreau-Aubert can be found 
on page 55 of the appendix.]
    Chairman Cleaver. Thank you very much. Next, we will hear 
from Mr. Andrew Mais, commissioner of insurance for the State 
of Connecticut, who is testifying on behalf of the National 
Association of Insurance Commissioners. You are now recognized 
for 5 minutes.

    STATEMENT OF ANDREW N. MAIS, COMMISSIONER, CONNECTICUT 
DEPARTMENT OF INSURANCE, ON BEHALF OF THE NATIONAL ASSOCIATION 
               OF INSURANCE COMMISSIONERS (NAIC)

    Mr. Mais. Chairman Cleaver, Chairwoman Waters, Ranking 
Member Stivers, and members of the subcommittee, thank you for 
the invitation to testify today; and thank you, Mr. Chairman, 
for speaking to our NAIC recently.
    We do appreciate the subcommittee's efforts to focus on 
disaster risk reduction and resilience. Perhaps no sector is 
more attuned to and focused on disaster preparedness, and 
directly aware of its value, than the insurance sectors. State 
insurance regulators recognize that natural disasters take a 
considerable financial and emotional toll on Americans every 
year.
    Climate risk contributes directly to a growing coverage gap 
between what the insurance industry can cover while balancing 
availability, and affordability in what is required. It is 
estimated that on a global basis, the insurance industry's 
share of natural disaster losses is only 36 percent of the 
total required, so mitigation is critical to help close that 
gap. We are working to find solutions to managing the 
catastrophic risk exposure in our respective States and, 
through the NAIC, have been engaged in those efforts for 
decades.
    I serve as a member of the NAIC's Climate and Resiliency 
Task Force, and we are focused on five areas: pre-disaster 
mitigation; solvency; climate risk disclosure; innovation; and 
technology.
    As part of those efforts, insurance regulators are 
participating in multi-agency stakeholder educational efforts 
on pre-disaster mitigation related to climate risk and 
incentivizing insurer recognition of enhanced building codes in 
underwriting and in pricing.
    In March, the NAIC hosted a building code and mitigation 
workshop with State insurance departments, FEMA, insurance 
industry representatives, and consumer groups. Risk reduction 
and mitigation to protect consumers and reduce the losses paid 
by insurers are otherwise absorbed through Federal spending, 
which helps to maintain solvent insurance markets while keeping 
rates more affordable.
    State insurance regulators were examining the potential 
solvency impact of insurers' exposure to climate-related risk, 
and we may consider enhancements to our regulator solvency tool 
to analyze and address and ensure its potential financial 
exposure to the physical and to the transition impacts of 
climate change. We are also focusing on climate risk disclosure 
and considering modifications to our existing at NAIC Climate 
Risk Survey to promote uniformity in reporting requirements.
    In addition, we are considering innovative solutions to 
climate risk and resiliency directed at reducing, managing, and 
mitigating climate risks while closing insurance gaps in 
coverage for consumers.
    And finally, we have established a workstream focused on 
the increasing use of technology to better assess and evaluate 
climate risk exposure, think of predictive modeling tools, for 
example.
    The NAIC Center for Insurance and Policy Research has also 
been active in researching various aspects of resiliency. We 
recently held an event in coordination with the Insurance 
Institute for Business & Home Safety on the insurance 
implications of severe convective storms. And that included a 
live demonstration of the importance of building resilience 
standards.
    State insurance regulators also have a collaborative 
relationship with FEMA, and we are jointly hosting resilience 
roundtables across the country on resilience priorities before, 
during, and after disaster events. Some States have formed a 
Regional Resilience Working Group with FEMA that is focusing on 
lessons learned from 2020, in advance of the upcoming hurricane 
season.
    Further, we have established a FEMA-NAIC Advisory Group to 
coordinate resilience activities between State regulators and 
FEMA, and we, the NAIC and FEMA, are also working on a regional 
earthquake training exercise.
    Last, but certainly not least, State insurance regulators 
recognize the pivotal role that flood insurance plays in 
preparedness and recovery. We urge Congress to pass a long-term 
NFIP reauthorization before it expires on September 30th, to 
provide certainty for policyholders. Reauthorization 
legislation should focus on ways to encourage investment in 
flood mitigation, and ensure consumers have access to multiple 
options for flood insurance products, and to help facilitate 
greater growth in the private flood insurance market as a 
complement to the NFIP.
    And in conclusion, State insurance regulators share your 
support for investing in prevention and preparedness to help 
minimize the impact of natural catastrophes and economic loss, 
and pre-event disaster planning, effective mitigation, and 
rational building codes are crucial parts of the solution.
    Thank you for the opportunity to testify today. And I would 
be pleased to answer your questions.
    [The prepared statement of Mr. Mais can be found on page 67 
of the appendix.]
    Chairman Cleaver. Thank you, Mr. Mais.
    The Chair now recognizes Ms. Shelley Poticha, the chief 
climate strategist at the National Resources Defense Council 
(NRDC).

STATEMENT OF SHELLEY POTICHA, CHIEF CLIMATE STRATEGIST, NATURAL 
                RESOURCES DEFENSE COUNCIL (NRDC)

    Ms. Poticha. Good afternoon, everybody. Chairman Cleaver, 
Chairwoman Waters, Ranking Member Stivers, and members of the 
subcommittee, thank you for the opportunity to testify today 
about housing and climate resilience.
    My name is Shelly Poticha, and I am the chief climate 
strategist for NRDC, the Natural Resources Defense Council. 
NRDC is an international nonprofit environmental organization 
working to protect the world's natural resources, improve 
public health, and ensure a safe and sustainable environment 
for all.
    The impacts of climate change--extreme heat, powerful 
storms, and sea level rise--are already impossible to ignore. 
We now, quite undeniably, live in a rapidly-changing world that 
will profoundly impact our nation and our society. Over the 
last several years, we have seen record-breaking hurricanes, 
floods, wildfires, and other climate-fueled disasters that have 
devastated communities and caused untold suffering for millions 
of Americans.
    The impacts of climate change are here and they will 
continue to grow in severity and frequency, even under the most 
optimistic climate mitigation scenarios. Faced with this 
reality, we must prepare for a dramatically different future 
and ensure that we protect the people and communities who are 
most vulnerable. We must also think about how we make decisions 
and who is involved in making those decisions.
    The complex and daunting challenges posed by climate change 
already exacerbate the intergenerational harms of racial and 
economic inequality. The people who bear the greatest burdens 
of climate change are too often also locked out of the 
decision-making that will shape the future of their 
communities.
    I want to bring to the subcommittee's attention three 
actions to address issues at the intersection of equity, 
housing, and climate resilience that could form the basis of a 
new Federal direction.
    First, support community-led development and fund community 
ownership; community-led development that is both equitable and 
sustainable is an approach that can be successfully employed, 
and it is critical to building lasting change. This approach, 
sometimes known as low carbon resilient development, brings 
together traditionally separate goals: reducing emissions; 
becoming more resilient to climate change; and economic and 
social development.
    Projects coming out of the Strong, Prosperous, and 
Resilient Communities Challenge (SPARCC), use this approach, 
and have been creative with and by community leaders. They 
promote equitable transit, housing, and green infrastructure; 
they safeguard against displacement caused by gentrification; 
and they stimulate local microeconomies. SPARCC can provide a 
model for a more resilient future.
    Second, in addition to fully funding CDBG, which targets 
historically disadvantaged communities of color with vital 
resources and technical assistance, Congress also needs to 
permanently establish, in statute, the Community Development 
Block Grant Disaster Recovery Program (CDBG-DR), and use it to 
model community-led, low-carbon development.
    Because CDBG-DR is not permanently established in statute, 
each new authorization and appropriation requires HUD to go 
through a lengthy and time-consuming process of drafting and 
approving a new set of regulations. The result is, at best, a 
month-long delay between qualifying disasters and delivery of 
assistance. Why not embed the principles of community-led, low 
carbon resilient development into a permanent CDBG-DR, and 
raise the bar for recovery going forward?
    Finally, reform the National Flood Insurance Program 
(NFIP). I urge the committee to quickly move forward to reform 
the National Flood Insurance Program. Much more than an 
insurance program, NFIP serves as a critical source of 
information for individuals and communities about flood history 
and flood risks. The right reforms could allow NFIP to be a 
lynchpin in our efforts to cope with the growing problems of 
flooding and sea-level rise that result from climate change.
    But currently, it is a liability. We need an NFIP that 
provides low- and moderate-income people with affordable 
coverage, expands access to flood mitigation and relocation 
assistance, and grants homeowners, home buyers, and renters a 
right to know the flood history and risks associated with their 
current or prospective home.
    President Biden's American Jobs Plan will create good-
paying jobs, and build, preserve, and retrofit millions of 
homes to be more affordable and resilient. These are important 
steps toward building a more just, equitable, and climate-
resilient future, and your committee can take it even further 
and make it sure to be the direction going forward.
    I thank you for the opportunity to speak before the 
subcommittee today.
    [The prepared statement of Ms. Poticha can be found on page 
73 of the appendix.]
    Chairman Cleaver. Thank you, Ms. Poticha.
    And finally, we will hear from Stephen Ellis, the president 
of Taxpayers for Common Sense. Mr. Ellis, you have 5 minutes.

  STATEMENT OF STEPHEN ELLIS, PRESIDENT, TAXPAYERS FOR COMMON 
                          SENSE (TCS)

    Mr. Stephen Ellis. Thank you. Good afternoon, Chairwoman 
Waters, Chairman Cleaver, Ranking Member Stivers, and members 
of the subcommittee. I am Steve Ellis from the Taxpayers for 
Common Sense (TCS), a national nonpartisan budget watchdog. 
Thank you for inviting me.
    TCS has worked on disaster-related issues on behalf of 
taxpayers for our entire, more than 25 years, of existence. And 
I have been involved in flooding issues dating back to my days 
as a young Coast Guard Officer dealing with the aftermath of 
the Great Midwest Flood of 1993.
    These are critical issues for taxpayers, and the country 
needs smart public policy that protects people and property. 
The Congressional Budget Office estimates that hurricane winds 
and storm-related responses cost the U.S. economy $54 billion 
annually, including $34 billion in expected annual economic 
loss to the residential sector.
    The expected annual cost to Federal taxpayers is estimated 
to be $17 billion. From Agriculture, to Defense, to 
Transportation, climate change impacts our entire Federal 
budget, but no area of spending so directly mirrors the 
escalating climate change crisis as disaster spending. On a 
cost-adjusted basis, billion-dollar disasters in the U.S. have 
increased from 2.9 per year, at an average cost of $17.8 
billion in the 1980s, to 16.2 disasters per year, at an average 
annual cost of $121.4 billion from 2016 to 2020.
    The Congressional Budget Office puts it rather succinctly: 
``Climate change increases Federal budget deficits, and that 
investment by the government or others in various types of 
mitigation or adaptation efforts could reduce the cost of 
climate change.''
    One other truism of disasters is that they have a 
disproportionate impact on poor and minority populations. In 
many cases, these individuals don't have savings to rely on 
while they rebuild, they may have lost their transportation to 
work, and their place of business may have been destroyed as 
well. Because of historically discriminatory policies or a need 
for lower housing costs, these individuals are often situated 
in less desirable, more vulnerable, high-risk areas.
    They may not be able to repay loans made available after 
disasters, or provide sufficient funds of their own to tap 
Federal programs. There are roughly 5 million NFIP policies, 
but there are well over 100 million housing units in the United 
States. More people need to purchase flood insurance. After 
2016's extraordinarily heavy rainfall event in Baton Rouge, the 
average homeowner with flood insurance coverage received 
$86,500 to rebuild their home. The average person without flood 
insurance received only $9,100 in disaster assistance.
    Programs such as CDBG-DR should take into account the needs 
of disadvantaged populations and ensure that they have access 
to the benefits, but also the tools to mitigate, adapt, and 
prespond to future disaster events, to make them less costly 
and impactful. While it varies by situation and peril, we know 
that every dollar spent on mitigation can save as much as $6 or 
more in post-disaster response.
    Regardless of need, NFIP has subsidized rates since its 
inception 50 years ago. More than 25 percent of properties in 
the Program pay subsidized or grandfathered rates. NFIP has 
helped fuel a development boom in high-risk areas simply by 
making it more affordable to take on flood risks, and housing 
does not occur in a vacuum; as areas develop, infrastructure 
follows with roads, bridges, water, electric, and sewer, and 
all of these intensify along with residential development.
    The NFIP has exacerbated exposure to climate change. At the 
same time, it is negatively impacted by it, as storms increased 
in frequency, as sea levels rise, this increases the cost of 
the Program, and it also increases demand for CDBG-DR. The best 
way to reduce the rate for flood insurance for property owners 
and taxpayers is to reduce the risk.
    It is not about artificial caps that hide the real risks to 
people, but about finding ways to fund mitigation either at the 
property or the community level. If a property owner is unable 
to afford the premium, means-tested assistance outside the rate 
structure should be provided.
    FEMA's new Risk Rating 2.0 promises to better price actual 
risks for properties by incorporating more data and flood 
variables to determine actual risks for properties. In theory, 
this will reduce some of the cross-subsidies that have plagued 
the program. CDBG-DR is supposed to supplement existing 
disaster-related authorities. Specifically, these funds are for 
long-term recovery, including restoration of infrastructure and 
housing, and economic revitalization, but also future disaster 
mitigation activities.
    Since 1992, nearly $90 billion has been appropriated to the 
Program. While there is some program direction, in reality 
there is a great deal of leeway granted to HUD and the 
implementing States and communities. Flexibility is an 
important part of the program, but stability and predictability 
are also critical to successfully meeting program goals.
    TCS supports the committee's efforts to statutorily 
authorize the CDBG program. Climate change, its impacts, NFIP 
and CDBG-DR are critical issues, not just for their budget and 
taxpayer impacts, but for society as a whole. Federal policies 
must promote realistic and responsible solutions to climate 
change, including targeting investments that lift innovative 
solutions and reflect the needs and experiences of low-income 
and minority communities.
    The goal must be to develop risk management and mitigation 
strategies to enable communities, infrastructure, and 
industries to become more resilient, face less risk, and better 
adapt to future mitigation costs and damages of climate change.
    Thank you for very much for the opportunity to testify, and 
I am happy to answer any questions you may have.
    [The prepared statement of Mr. Stephen Ellis can be found 
on page 49 of the appendix.]
    Chairman Cleaver. Thank you, Mr. Ellis, for your testimony.
    The Chair now recognizes the Chair of the full Financial 
Services Committee, Chairwoman Maxine Waters of California.
    Chairwoman Waters. Thank you very much, Chairman Cleaver, 
for convening this hearing on the need to improve the 
resiliency of our country's housing infrastructure in the face 
of climate change.
    In recent years, the United States has experienced more 
frequent and intense natural disasters attributable to climate 
change, displacing tens of thousands of people and costing 
hundreds of billions of dollars in damage. I have been working 
across Congresses, now with Members on both sides of the aisle, 
to reform the National Flood Insurance Program.
    And I am looking forward to passing further reforms, as 
well as making a significant investment in our nation's 
affordable housing stock, by passing the Housing is 
Infrastructure Act, as part of President Biden's American Job 
Plan.
    So, I want to thank you so very much for the attention you 
are giving to this issue. And I yield back the balance of my 
time.
    Chairman Cleaver. Thank you, Madam Chairwoman.
    We will now begin with questions, and I will kick off the 
questioning.
    Mr. Ellis, you have experience in a number of offices 
throughout your career in Austin, the Capital, and then in 
Houston, and in Harris County. Will you give me your opinion of 
the response to those disasters that you have witnessed from 
FEMA and HUD, and do you think that there are times in which 
their requirements and regulations collide?
    Mr. Rodney Ellis. Thank you, Mr. Chairman. The biggest 
challenge that I have seen has been that HUD money is tied to 
low- to moderate-income (LMI) households, but most other 
Federal money that we get related to disasters has a cost-
benefit ratio in it. So on our level, even after Hurricane 
Harvey, we passed a record bond issue; we try to address some 
of our own problems, and we leverage it with money from you all 
on the Federal level.
    And when we go to FEMA, when we go to the Army Corps of 
Engineers, they are generally following a cost-benefit ratio 
analysis. I can understand why one would say we ought to 
protect, in the case of Houston, our port and our medical 
center are downtown, but even in my rural communities and 
counties I talked to around the country, the cost-benefit of 
racial language is such a big problem.
    That means in Houston, we spend all of our time chasing 
Federal dollars, most of it from mitigation, that has a cost-
benefit ratio language in it. So even when you give us money 
through HUD to rebuild these communities, they are the ones 
that flood first. There are some rules, that when it comes 
through our General Land Office, is limiting the size of 
bedrooms, so in the neighborhood I grew up in, it is a two-
bedroom home, five people in it, one bathroom, and they 
expanded it over time. If that house get flooded, under GLO's 
rules, they would say, if there are only two people left in the 
house, you can't go back and do a three-bedroom home, you can 
only build a two-bedroom home.
    So, some low-income households decide, I will live with the 
mold. In the case of my parents, because of discrimination, 
they had to move into a poor Black neighborhood to get a 
Federal guarantee. So, the only wealth that my 99-year-old 
father had to pass on to, in my case, my sister, was his home. 
And that is a real challenge.
    We appealed it to HUD, the previous HUD administration 
denied it, and the City of Houston decided to take local funds 
to make up for that extra bedroom for many of those low-income 
communities. But that is a big problem.
    We are hoping, with help from you, and maybe with the new 
leadership at HUD, that we can get that changed. But the cost-
benefit ratio, I can't stress enough, is the biggest challenge 
I see.
    Chairman Cleaver. Why did HUD deny it? What was the 
rationale that they gave you?
    Mr. Rodney Ellis. The best analysis that I can come up with 
is, they were thinking if you have a limited amount of money, 
you could spread it out to more households. When we talked to 
them, that was their rationale. So we said, we will take other 
Federal money to make up for it. I know those low-end 
communities.
    Mr. Chairman, some of them haven't gone to Board review. 
And also, like my dad's, if he flooded, he would just live with 
the mold instead of giving up that extra bedroom and bathroom, 
because that is his only wealth to pass on.
    So, it has been a big problem. And HUD told me they hadn't 
seen that anywhere else in the country. They have not required 
it. I just think that the Land Office was trying to be 
protective, but sometimes we in government want to offer more 
help than people are willing to take.
    Chairman Cleaver. Thank you for being here with us.
    Mr. Stivers, the ranking member from Ohio, is now 
recognized for 5 minutes.
    Mr. Stivers. Thank you, Mr. Chairman.
    First, I would like to request unanimous consent to enter 
into the record three statements: one from the Manufactured 
Housing Institute; one from the National Association of Mutual 
Insurance Companies; and one from the Reinsurers Association of 
America.
    Chairman Cleaver. Without objection, it is so ordered.
    Mr. Stivers. Thank you. And my first question is about 
mitigation. I think we will be in a much better position, going 
forward, if we can do something about mitigation.
    I want to ask you, Mr. Ellis, if you can go into a little 
depth; you talked a little bit about mitigation, but it seems 
to me that there is little incentive for mitigation efforts 
because the Federal share of these disasters has gone up. Back 
in 1955 during Hurricane Diane, the Federal Government only 
covered about 6 percent of the disaster's total costs. As part 
of Superstorm Sandy, the Federal Government's exposure was 77 
percent.
    So, it seems like there is little incentive to enact 
mitigation. What can we do to focus on mitigation so that we 
can reduce the exposure before these disasters strike, Mr. 
Ellis?
    Mr. Stephen Ellis. I am assuming that is me, as you said, 
``Mr. Ellis.''
    Mr. Stivers. Yes. That is you.
    Mr. Stephen Ellis. Okay, I'm just making sure. You are 
absolutely right, Congressman, that their Federal share of 
disasters has grown dramatically, and it is even more recent 
than--you mentioned Diane. As recently as Hurricane Hugo in 
1989, less than 30 percent of the total cost was borne by the 
Federal Government. So, it has skyrocketed in recent decades.
    And certainly, part of it is having an enticement of 
pricing. And we get into this about flood insurance, 
particularly, and about artificially lowering rates; it serves 
as a disincentive to mitigation. And we recognize that even if 
you have a lower rate, the flood doesn't think you are on a 
different floodplain. It floods you just like what your real 
rate would be.
    Essentially, you want to make sure that people have 
incentives to mitigate, and that there are opportunities and 
instructions for mitigation as well. And so, those are really 
critical elements, but if you flood with cash, then you need to 
make sure you are directing that cash in appropriate ways.
    Mr. Stivers. Thank you. And one follow-up question, Mr. 
Ellis. The National Flood Insurance Program statute requires 
that FEMA set premiums based on the risks involved, but the 
National Flood Insurance Program still uses the same rating 
methods they have used for the last 50 years. I know that FEMA 
is doing something to address this, and I am curious as to what 
kind of technology should they use, whether it is 3D mapping or 
other things as they address the real risks involved to charge 
actuarially sound premiums?
    Mr. Stephen Ellis. Thank you, Congressman Stivers. Yes, it 
is true that FEMA is using basically the same methodology that 
they have always used on NFIP, but they are doing, as I 
mentioned in my testimony, Risk Rating 2.0, trying to take in 
increased data. I think that everybody on the panel and on the 
committee can agree that the mapping needs to address--needs to 
be better, and needs to use better technologies, and more up-
to-date technologies.
    And then, we need to communicate that risk to people, 
because right now there are many cases where people don't 
really even recognize the level of risk that they face. That is 
one tool of risk communication, and we have seen States like 
North Carolina, for instance, that have gone leaps and bounds 
beyond what FEMA has been able to do to provide that 
information to homeowners, where they can understand not just 
their relative risks, but their future risks from storm events, 
even as they are occurring.
    Mr. Stivers. And one follow-up question, one of the biggest 
problems in the National Flood Insurance Program is the 
multiple-claim properties. How should we deal with properties 
that have had three or four claims? What should we do to move 
forward to what appears to be one of the biggest problems in 
the system?
    Mr. Stephen Ellis. It is interesting to me, Congressman, 
that they seem to keep coming up with different terms. There is 
Repetitive Loss Properties, then Severe Repetitive Loss 
Properties, Extreme Repetitive Loss Properties. Clearly, this 
is an issue that has to be dealt with, and in some cases--
Congressman Blumenauer back in 2004 was mentioned on the 
reauthorization at that time. He had the, ``Two Strikes and 
You're out of the Taxpayer Pocket'' Act.
    And he was basically trying to put more pressure on 
property owners to mitigate, or basically to communities to do 
buyouts and relocation in a structured and thoughtful manner.
    Mr. Stivers. Thank you. I yield back, Mr. Chairman. Maybe 
we will do a second round. I have lots more questions, but 
thanks for the time. I yield back.
    Chairman Cleaver. Thank you, Mr. Stivers.
    The Chair now recognizes Chairwoman Waters for 5 minutes.
    Chairwoman Waters. Thank you very much, Mr. Chairman. I do 
appreciate that.
    I am going to direct my question to my old, long-time 
friend, Commissioner Ellis, politician par excellence, thank 
you for being here today.
    I heard what you voiced your concern about, and that sounds 
as if it is just bureaucracy with a lack of understanding about 
how to treat the support that they give to families and their 
homes following a hurricane or a disaster, and that is kind of 
bureaucracy at its worst. But I want to ask you a little bit 
about what I experienced after Hurricane Katrina. I worked to 
hold St. Bernard Parish accountable and ensure Federal housing 
funds would not be used to enact a discriminatory policy that 
prohibited the construction of multi-family housing post-
Katrina.
    Policies such as Blood Relative Ordinance--I don't know if 
you have ever heard of this--prevented St. Bernard Parish 
homeowners from renting to anyone who was not a blood relative. 
In the aftermath of the various disasters and weather events in 
Texas, how has Harris County worked to present a disparate 
impact on communities of color that are seeking to rebuild and 
recover from natural disasters?
    Yours didn't sound like, necessarily, discrimination; it 
just sounded as if it was ill-informed individuals who handle 
the policy following a disaster. Have you seen any signs of 
direct discrimination?
    Mr. Rodney Ellis. Chairwoman Waters, thank you for the 
question, and for your years of leadership.
    I went to Xavier in New Orleans, so I am well familiar with 
some of those schemes that were going on in Louisiana. In 
Texas, at the end of the day, that smaller bedroom policy has 
had a disparate impact on communities of color. I don't think 
the intent had anything to do with someone being Black or 
Brown, but the effect has because it has been those 
neighborhoods that had done it the most.
    I would encourage you all in Congress to make sure you give 
us the oversight, ask the hard questions. I think HUD sent all 
kinds of smoke signals to the State saying, ditch that idea, 
but they didn't want to step in and make them do it. Just the 
respect, I guess, for local control, which I am for, other 
than, ``I am all for States' rights until the State is wrong.'' 
I have a problem with that. But it would be well worth looking 
into what we do.
    And so much of what we do on the mitigation front, despite 
all of the great money that comes from HUD, most of the money 
in our region, for mitigation, to rebuild, to protect housing 
investment has come through FEMA, the Corps of Engineers, and 
we all spend our time with our money chasing other Federal 
dollars for that cost-benefit ratio.
    So, how we get rid of it? My colleagues at the county 
level, on all sides of the aisle, tell me we ought to ditch it, 
protect your downtown, the airport, but just recognizing more 
than somebody's wealthy home. The house I live in now, instead 
of the house I came out of, but just providing [inaudible].
    Chairwoman Waters. Thank you so much. I am very pleased 
that Congressman Cleaver has taken such a leadership on these 
kinds of issues. I will do everything that I can to support 
him, and we really want to do it right. And this is a moment in 
history where we have an opportunity to do it right. So, thank 
you so very much for being here today.
    And, Chairman Cleaver, I yield back the balance of my time.
    Chairman Cleaver. Thank you, Madam Chairwoman.
    The gentleman from Florida, Mr. Posey, is now recognized 
for 5 minutes.
    Mr. Posey. Thank you, Mr. Chairman,
    Mr. Ellis, can you please tell us what your research shows 
about the role of building codes in achieving flood and storm 
resilience, and how these measures are being adopted, the best 
way they are being adopted by various States?
    Mr. Stephen Ellis. Sure. Thank you very much, Congressman.
    Building codes are critical to, basically to resilience, 
and so, having resilient housing. And it is something that, 
while it is a State issue, and it is something that needs to be 
determined at the State level, and use strings from the Federal 
Government, as far as encouraging stronger building codes, 
encouraging better building back after a disaster. And so, 
nobody has to take the Federal dollars if they don't want to.
    But that is critical because taxpayers are investing in 
these areas, and so you want to make sure that all of those 
investments are protected, and that all of those people are 
protected. We are not doing anybody any favors if we are 
subsidizing construction that isn't actually going to be 
protective when inevitable disaster strikes them.
    Mr. Posey. Okay. Also, Mr. Ellis, our Federal response to 
flooding is scattered over several agencies, the Army Corps of 
Engineers, FEMA, NRCS, and during disasters, even HUD. Do you 
believe we could benefit from a cross-cut flood mitigation 
budget that allows Congress to see how the different agencies 
contribute to flood solutions, and pick the best responses and 
pare back on the less-effective programs?
    Mr. Stephen Ellis. Congressman Posey, I am all about more 
data being available, and being able to understand how the $4 
trillion is being spent across the whole Federal budget.
    Certainly in this area where it is very critical, and we 
throw a lot of money post-disaster, it is really important to 
understand how those funds are being allocated. And we do have 
different stages of disaster response.
    Have a disaster relief fund that kicks in right after a 
disaster. You have the Corps, once they get that they have 
additional funds, right, immediately, and then they often get 
more funds and supplementals, and then similarly to HUD. And 
so, understanding how that money is being allocated increases 
the confidence of the taxpayers that their money is being spent 
wisely. And that is critical because we are appropriating such 
huge sums. So, I think something like that would be a 
tremendous asset, Congressman Posey.
    Mr. Posey. Thank you very much.
    Commissioner Ellis, what have been the flood mitigation 
projects, all the promise of preventing flood damages? And so 
adapting properties to reduce flood damages, building flood 
control projects, and even moving people out of harm's way can 
all help. Please tell us how Harris County approaches the flood 
mitigation, and share with us how we could encourage others to 
maybe do the same thing?
    Mr. Rodney Ellis. Thank you, Congressman. We have done two 
things in Harris County that I think the rest of the nation 
should look at. One, with the money we put up, we did come up 
with equity guidelines on how we are going to spend the money, 
but it is challenging to follow them because we can't attract 
as much Federal matchup as we would like to.
    The other thing we did was we probably passed the strictest 
building standards in the country. My county engineer says they 
are the strictest, but I was in Florida at a conference and a 
colleague challenged me on that. We called it Atlas 14. But you 
have to build them higher. Now that we know, a 500-year flood--
I am 67, and I have lived through three 500-year floods in the 
last 10 years, but it does drive up the costs of construction, 
but it was the right thing to do.
    And then, we tied funding to partners of the city, and 
surrounding counties to adopting the same build expanders. And 
so far, most of them have done that with strong bipartisan 
support.
    Mr. Posey. Smart. Thank you.
    Mr. Mais, you represent our State insurance commissioners. 
Can you assess for us how an enlarged role for private flood 
insurance regulated by the States could improve our nation's 
flood insurance, and how we should resolve the repetitive loss 
of properties in moving to an enlarged private flood insurance 
presence compared to the NFIP?
    Mr. Mais. Thank you, Congressman. I appreciate the 
opportunity to discuss this. And, by the way, if I could also 
say that mitigation--just to throw my two cents in here--is 
something that we, as State insurance regulators, are very 
concerned with, and we are very supportive of. It is a bit like 
my father used to tell me, you have to fix the roof before it 
starts raining.
    But we do think there is a huge, a significant role for 
private flood insurance, and at the NAIC, we have been 
collecting data and the role of private flood insurance has 
been increasing. We do look forward to working with Congress to 
enable an even greater role for private flood insurance.
    And one way to do that, for instance, with the NFIP, if you 
enable people to leave without losing their subsidies, so they 
can test the market, or that they are able to get and 
[inaudible] bring this proposal on the development fund for 
time that they left the NFIP. All of this will help improve the 
attractiveness of private flood insurance, and I think, 
overall, reduce the cost of insurance.
    Mr. Posey. Thank you so much. My time has expired. And I 
yield back, Mr. Chairman.
    Chairman Cleaver. Thank you.
    The gentlewoman from New York, Ms. Velazquez, is now 
recognized for 5 minutes.
    Ms. Velazquez. Thank you, Mr. Chairman. And thank you for 
this timely hearing.
    Ms. Godreau-Aubert, I would like to address my first 
question to you. Puerto Rico's CDBG-DR Action Plan has an 
across-the-board prohibition for rebuilding in flood zones. 
What type of problem does this present to LMI communities? What 
alternatives are there? And what would a sensible relocation 
plan look like?
    Ms. Godreau-Aubert. Thank you, Congresswoman Velazquez, for 
the chance to answer this question.
    Different from other jurisdictions, Puerto Rico is an 
island. So the impact of climate change, sea level rise has a 
very direct impact on the people living, particularly in flood 
zones, in coastal zones. These communities, for several 
historic reasons, going back to slavery, are low-income and 
Black communities which are deeply affected by across-the-board 
prohibitions.
    We are talking about 250,000 homes that are in flood zones 
in Puerto Rico. Relocation is not possible within the geography 
of Puerto Rico. If we don't have a sensible relocation policy 
that, for example, includes an inventory of available housing, 
that eliminates the discrimination against people with formal 
titles, which is almost half of the population, and that also 
accounts for climate migration, not only in the short term, but 
also in the long run of the island.
    Ms. Velazquez. Thank you. And Ms. Godreau-Aubert, as you 
mentioned in your testimony and your previous answer, 69 
percent of the inhabitants of Puerto Rico are homeowners, yet 
many lack formal titles here, which makes it more difficult for 
them to access FEMA aid. How was your organization able to help 
homeowners overcome their lack of a formal title?
    Ms. Godreau-Aubert. FEMA denied approximately 77,000 
applications of families in Puerto Rico, and neglected 
assistance snowballs and grows exponentially. What we are 
seeing right now is that constant discrimination against people 
with formal title, once again, hinders the rights of Black, 
low-income communities, which, because of access to justice, 
because of cultural patterns, and because the process is very 
complex and slow, are not able to access assistance.
    As I said in my--
    Ms. Velazquez. Let me ask you, what other steps can FEMA 
and HUD take to help make it easier for home owners without 
formal titles to have their claims recognized?
    Ms. Godreau-Aubert. FEMA regulations already state the 
definition of owners that does not require registry or a title 
deed. We need HUD and CDBG-DR programs to adopt this kind of 
definition.
    Ms. Velazquez. Okay. Thank you.
    Mr. Mais, since 2017, we have reauthorized the National 
Flood Insurance Program a total of 16 times on a short-term 
basis. I have called for reauthorizing the program for as long 
as 10 years. As you know, the Program is once again set to 
expire at the end of September. Can you explain why a long-term 
reauthorization of the NFIP, on a bipartisan basis, is so 
important?
    Mr. Mais. Thank you, Congresswoman.
    And let me just say here, I am going to go back to the idea 
of a mitigation plan, because what this does is it enables 
people--this is what insurance is all about--we are going to 
pay some now so that we can be sure if something happens, we 
are covered. That is the way we, as insurance regulators, look 
at various insurance programs, including the NFIP.
    The NFIP, as you mentioned, has had a number of short-term 
reauthorizations. I am a homeowner, and I actually am a 
homeowner with an NFIP policy, and it makes it difficult to 
plan. You just don't know what is going to happen, how long 
this is going to be in place, and who should go after this.
    So that reliance on short-term authorizations, or 
reauthorizations, I think has created a tremendous amount of 
uncertainty for consumers. And that includes businesses that 
rely on flood insurance. And you also have to--or certainly we 
keep in mind the fact--I have been in this business for a 
while, and people don't understand that flood insurance 
policies take effect after 30 days. It is hard enough 
convincing people to get the policies. Thank you.
    Ms. Velazquez. Thank you, Mr. Chairman. I yield back.
    Chairman Cleaver. The gentlewoman yields back.
    The gentleman from Wisconsin, Mr. Steil, is now recognized 
for 5 minutes.
    Mr. Steil. Thank you very much, Mr. Chairman. I appreciate 
you holding today's hearing.
    I have to say, though, I look forward to the Majority 
allowing us to be back in person. Across-the-board in D.C., we 
are spending money like drunken sailors, pretty darn 
inefficiently. We can't even do it in person. And so, I hope 
the Majority brings us back in person. I am excited to talk 
about today's topic as well, albeit virtually.
    So, let's dive in with the short amount of time. There has 
been a lot of discussion surrounding the National Flood 
Insurance Program reauthorization, and how are we going to 
really ultimately keep rates in check. I am sympathetic to 
homeowners who are concerned about their ability to bear higher 
rates. And really, to me, that is why it is important when we 
are looking at how we do this.
    Now that we are talking about lowering risks, we heard Mr. 
Mais talk about his support of mitigation funding, possibly 
private flood insurance. I have seen some people's write-ups 
here in their formal testimony, who support that as well, which 
brings me to a pretty significant concern in the draft of the 
NFIP reauthorization that is attached to today's hearing.
    As I read this, it puts in place a 9-percent increased cap, 
and in my reading of this, that applies to all property, 
including second homes and severe, repetitive loss. And so, my 
concern is that someone in Janesville, Wisconsin, is going to 
be on the hook to subsidize somebody's second home on the 
ocean, or some fancy pants vacation home, and we are putting 
taxpayers in Kenosha, or Janesville, or Racine on the hook for 
this. That is one.
    And then two, when you set a flat cap of 9 percent, one of 
my concerns is that we are going to discourage homeowners from 
taking steps to mitigate themselves from high-risk properties, 
in particular.
    And so, Steve Ellis, if I can address a question to you in 
particular, as it relates to a 9-percent cap for fancy pants, 
second homes on the ocean--and I am not talking about people 
who are struggling to get by; we are talking about people who 
are buying second properties. Do you think that there is a 
moral hazard being created by this draft legislation as 
currently written?
    Mr. Stephen Ellis. Absolutely, Congressman, I think that is 
one of the issues that is true in flood insurance, regardless, 
is that there are some moral hazard issues and not pricing risk 
appropriately, and having subsidies that are already in the 
program.
    And I talk in my written testimony about tremendous cross-
subsidies that exist where you have people in--and I can't say 
specifically in Janesville or Racine, but these are counties 
with lower property values and lower deciles, actually the five 
bottom deciles are actually subsidizing properties in the top 
two deciles, and that is documented by the Government 
Accountability Office. And having a 9-percent cap, which has 
it, from what the cap was under the previous legislation, which 
is 18 percent, is going to discourage some of the mitigation 
activities, and is also going to stifle the private market, 
which will be better for taxpayers to move some of this risk 
off of the taxpayers and into the private sector, which is 
eager to take on that risk, in many cases.
    Mr. Steil. Yes. We have some beautiful property in the 
State of Wisconsin. And I encourage you to come on up to our 
State. But I can tell you, it is not the pricey property that 
you are going to get in oceanfront, second homes in California, 
along the coast, just from a cost standpoint.
    So, I am concerned about putting Wisconsin taxpayers on the 
hook for these second homes, along the coast for people who 
should otherwise be able to bear that burden on their second 
property.
    To shift gears slightly, we are talking about the moral 
hazard, if we can, Mr. Ellis. If we go back and just kind of 
look over history, we see a significant shift of this risk to 
the Federal Government. In my research, with Hurricane Diane in 
1955, the Federal Government came in with about 6 percent of 
the total cost; now you get up to Katrina, and you get to 50 
percent; in 2008, the Federal Government gets up to 69 percent; 
Superstorm Sandy in 2012, we are up to 77 percent. We can see 
where the trend line is going here.
    Can you share a little bit of your view here as to the 
moral hazard of, we are putting all of this burden on the 
Federal Government, what that does from a mitigation standpoint 
at the individual, at the local, and at the State level?
    Mr. Stephen Ellis. Everybody has to have skin in the game, 
Congressman. And if you don't have that, then it is a 
disincentive to actually do the mitigation, to do the hard 
work. And we would certainly want to see States and communities 
prepare for these inevitable disasters. We know they are going 
to occur, and we should have a sliding scale of disaster 
assistance, in our opinion. And then also have strings that are 
trying to encourage States and localities to have their plans 
in place and be ready to go right after the disaster ends.
    Mr. Steil. I appreciate your feedback.
    Mr. Chairman, I appreciate you having this hearing. I look 
forward for all of us to be, hopefully, in person discussing 
these important topics in the near future. And with that, I 
will yield back.
    Chairman Cleaver. Thank you, Mr. Steil.
    The gentleman from California, Mr. Sherman, is now 
recognized for 5 minutes.
    Mr. Sherman. Thank you. I guess I am here just to epitomize 
beachfront property in California. I think Mr. Steil has a 
point that the Federal Government is absorbing more and more of 
the costs of natural disasters. But if he thinks that is going 
to change, I have been here for a long time, and I have never 
seen more than a handful of Members vote against a disaster 
relief bill.
    I have seen some of the most conservative, wouldn't-pay-a-
penny-for-anything libertarians vote for disaster bills. And 
so, it is in our interest to make sure that uninsured losses 
are kept at a minimum, because whatever uninsured losses there 
are--if it happens to just one or two people, they are going to 
absorb the cost--but if it is a natural disaster that is in the 
headlines, I don't think even the gentleman from Wisconsin is 
going to walk to the House Floor and vote against the disaster 
relief bill.
    We have given local control on all of the most important 
issues affecting housing. We now have a circumstance where, in 
my city, it seems to cost about $700,000 to build an apartment 
unit. We have building standards, where, if the building is not 
resilient, it is as, as Mr. Steil points out, going to be the 
Federal Government bearing the cost.
    And then finally, there is one area that I think is 
significant enough that we should override local control, and 
that is the need to have recharging stations available, 
particularly to those who live in apartment buildings. We can't 
get people to buy electric cars if they can't recharge them at 
home, and ``home'' for everybody is not a single-family house 
with a three-car garage.
    For an awful lot of Americans, it is a carport where the 
landlord hasn't put in an electric charging station. So at 
least if every apartment building and everything you paid for 
parking structures at work have recharging, we might get to the 
President's objective of electric cars.
    I have a question for Mr. Mais. Most flood insurance 
policies are, of course, underwritten by the NFIP. There are 
more than 5 million property holders nationwide, and the NFIP 
is the nation's largest single-line insurance with nearly $1.3 
trillion in coverage. Unless reauthorized by Congress by 
September 30th of this year, the authority to provide new flood 
insurance will expire. And the NFIP's authority to borrow from 
the Treasury will be cut from $30 billion to $1 billion.
    Over 20,000 communities across the country participate in 
the NFIP, and over 5 million policyholders rely on it. Can you 
explain what happens to those communities and families who 
would no longer have access to the National Flood Insurance 
Program? And how would this lapse affect the communities in 
which they live?
    Mr. Mais. Thank you, Congressman. It is difficult for me to 
project what will happen across the nation, but I can tell you 
what we have heard over the past few years, as the NFIP has 
been up or been close to not being reauthorized. And we go back 
to that issue of uncertainty. People do need the certainty that 
they will have the insurance coverage to protect what will be, 
in many cases, their single most important asset. This is what 
they are going to be passing down to their children.
    And there is no doubt that there is a growing private 
market over the past. In 2019, for instance, we had $526 
million in direct written premium in the private market, which 
is up $100 million from the year before, and the earned premium 
was less than that, which means the market is growing. I think 
that is just taking stock.
    But what that tells us compared to the fact that the NFIP 
had approximately, at its current rates, almost $3.5 billion of 
earned premium in 2018, is that it does represent a significant 
portion of the market. And that is why we are asking for that 
long-term reauthorization.
    Mr. Sherman. Thank you. The final comment I want to make 
is, you can argue for this kind of flood insurance program, or 
that kind of flood insurance program, but what you can't argue 
is that doing it before the last minute is better for the 
country. We don't want to take people into July and August not 
knowing what their situation is, especially if they are trying 
to sell their home. And I yield back.
    Chairman Cleaver. Thank you, Mr. Sherman.
    The gentleman from Texas, Mr. Taylor, is now recognized for 
5 minutes.
    Mr. Taylor. Thank you, Mr. Chairman. And I will echo my 
colleague from Wisconsin's 1st District that I wish we were 
meeting in person, particularly because I would get the chance 
to greet in person my good friend and colleague from the Texas 
Senate, Commissioner Ellis. It is great to see you here with us 
today. I appreciate your insights and your expertise.
    I wanted to go into something that I learned about in the 
State legislature, this thing called actuarial soundness. So, 
if you charge less than what you need to make a product, 
eventually you go out of business, unless the government kicks 
in some money.
    I think I heard the number, $90 billion. Let's see, who 
said that, that would be the Republican expert. Can you speak 
to the--over what period of time has the Federal Government 
kicked in $90 billion into the flood program?
    Mr. Stephen Ellis. Sure, Congressman Taylor. The $90 
billion is the Community Development Block Grant Disaster 
Recovery Program. And that chipped in after Hurricane Andrew 
and a couple of other storms, Omar and Ike in 1992, so 
basically, from 1993 forward has been that $90 billion.
    Mr. Taylor. So are we charging an actuarially sound flood 
insurance premium at the present time?
    Mr. Stephen Ellis. No, sir. The flood insurance program is 
created to have built-in subsidies. If your structure was built 
before the flood insurance rate map, or before the program was 
created, then you have a subsidized rate. If the zones change 
because of climate change or whatever, or a development nearby, 
and you shift from being a lower-risk zone to a higher-risk 
zone, you get to keep your rate.
    The fact that the Program can borrow from the Federal 
Government also is a significant subsidy, particularly 
considering that it is underwater, and it has borrowed almost 
$40 billion from the taxpayer, to date. So, it is not an 
actuarially sound program. You could argue that was not the 
intent initially, but we are in a different place than we were 
in 1968. We have much better technology and soundness, and we 
need to be developing and improving the program so it is not as 
much of a burden on taxpayers.
    Mr. Taylor. And I guess that is what I would ultimately 
drive for, trying to create an actuarially sound program that 
stands on its own, and that is in the interest of the 
taxpayers, and is also in the interest of the rate payers. When 
you set up an actuarially unsound program, eventually the 
taxpayers get tired of paying for that, and they end up 
ditching the ratepayers on the side of the road. And I don't 
want to see that happen. I want to see a program that is 
functional. But I think, mathematically, we set it up to be 
non-functional, and I think that is going to take some work to 
really work through that.
    Ms. Godreau-Aubert, just on Puerto Rico, when I hear about 
people owning properties without a clear title, my heart goes 
out to those people. That is a really tough spot to be in. And 
as a former State legislator, I kind of think, gee, that is 
something that the Puerto Rico legislature should fix.
    Do you need a Congressman from Texas to go and fix this for 
you? I would hope that you guys were working on that in Puerto 
Rico and you can ultimately solve this problem.
    Ms. Godreau-Aubert. Hopefully, in fact, we used the example 
from Texas to develop the sworn statement and to make the 
lobbying process for the CDBG-DR alternative title declaration. 
What we need is basic clear guidelines stating and mandating 
local governments not to require formal titles. As I said, it 
is basically a waste of disaster aid funds to be using this 
money to try to push title clearance processes that may last 
for years and have no results.
    Mr. Taylor. And I guess my concern is that if the Federal 
Government makes it easier for people without clear title to 
get access, then it disincentivizes your legislature from 
fixing this problem, which is obviously bigger than this, 
right? This is one piece of a much bigger problem, because 
there is the transfer issue, there are property and casualty 
insurance issues, there are lending issues. And not having 
clear title is a very small piece, unfortunately. It is 
obviously enormous that the people have this problem.
    And I am not in any way--as I said, I am very sympathetic 
to this problem, but I worry that if we fix this particular 
piece of it, okay, we don't have to worry about it. But really, 
I think it is incumbent on the legislature in Puerto Rico to 
actually go ahead and fix this. And I appreciate you following 
Texas' example.
    Mr. Ellis, it was great to see you.
    Mr. Chairman, I yield back.
    Chairman Cleaver. Thank you. The gentlewoman from Ohio, 
Mrs. Beatty, is now recognized for 5 minutes.
    Mrs. Beatty. Thank you, Mr. Chairman. I am glad to be here, 
and glad to see everyone on Zoom. And like my colleague, 
Congressman Steil, and I believe Congressman Taylor, I, too, 
would like for us all to be in the room. So maybe if everyone 
gets vaccinated, that would be helpful for our leadership to 
move us back into that. I am a big proponent of the vaccination 
for a whole lot of reasons, mostly based on data and 
statistics.
    But with that said, let me thank all of our witnesses for 
being here today and providing their testimony.
    My first question is for you, Commissioner Ellis. And thank 
you for being here, and it's nice to see you again. I saw you 
in the last Congress as you came before our Oversight and 
Investigations Subcommittee.
    We have heard about some of the devastation that has 
happened across the country. And we know over the last years, 
we have seen record-breaking floods, and fires, and hurricanes, 
of untold suffering. And we know that affects the least of us 
the most. We know that there is a national shortage already of 
an estimated 7 million affordable rental homes for extremely 
low-income renters across this country.
    And the lack of affordable housing disproportionately 
affects communities of color. The shortage is greatly 
exacerbated when we have any one of these natural disasters.
    For example, after the devastation brought by Hurricane 
Katrina, the housing authorities of New Orleans reported having 
close to 2,000 public housing units for low income people, and 
that was 3,000 less than what they had expected prior to the 
hurricane. That is why I strongly support Congressman Green's 
priority for one-for-one replacement of affordable housing 
units in his CDBG-DR proposal.
    Commissioner Ellis, can you briefly describe for us any 
issues that Harris County has had with replacing affordable 
housing units after Hurricane Harvey?
    Mr. Rodney Ellis. Thank you, Congresswoman, and it's good 
to see you again.
    We have had tremendous problems. Congressman Taylor and I 
were in the legislature together in Texas, and Texas even had a 
rule for low-income housing credits, when Congressman Taylor 
and I were there, that your State senator and your State house 
member had to sign off, and you would get credits towards 
getting low-income housing credits if they signed the letter.
    And on the Senate side, with Congressman Taylor's support, 
we got rid of that. But on the House side, we couldn't. And it 
is a big problem because of the, ``not in my backyard (NIMBY)'' 
issue. In fact, since I am no longer in the State Legislature, 
I can admit, sometimes I would write a letter opposing low-
income housing credits, and then call the department head and 
say, you don't have to put your name on the ballot, put it in. 
And if they put that into law, you couldn't stop it, but it is 
a big problem, because of that issue and the fact that most of 
us around the country rely on the Federal Government, or 
incentives by virtue of the Federal Government to do affordable 
housing.
    George Floyd is from the Cuney Homes right across from 
Congressman Green's alma mater, Texas Southern University. It 
initially was not built for Blacks, it was for Whites only, and 
it is the oldest housing project in Houston. We have to face 
issues on what we do there. You can't even have central air in 
it because it is just so old.
    But then the challenge is that plenty of developers want to 
take it down. My mentor, Congressman Leland, put in Federal 
legislation with, back then, Congressman Frost out of Dallas, 
and Congressman Taylor, to block developers from taking over 
affordable housing near downtown. But it is always a challenge 
because of the NIMBY issue.
    I hope that in addition to the legislation you made 
reference to, Congressman Green and Chairwoman Waters, 
obviously, and you, Mr. Chairman, as well have advocated, you 
ought to put some incentives in that and get us to help on the 
local level. When I was on the city council, we put up some 
money, about $20 million every 5 years in the capital 
improvement program. I am hoping my county does that as well.
    As one of your colleagues made a reference to earlier, it 
is all their money, but it is not fair for us to always put it 
on you. We ought to take some of that heat for affordable 
housing as [inaudible].
    Mrs. Beatty. I am going to stop you, because I think my 
clock is running down.
    And I want to ask our witness, Ms. Poticha, can you briefly 
explain the economic effects of a natural disaster on low-
income communities, as opposed to a beach town field, and this 
is reflected on the [inaudible].
    Ms. Poticha. Should I continue to answer, or--
    Chairman Cleaver. Yes. Please proceed, Ms. Poticha, with 
the answer.
    Ms. Poticha. Okay, great. The economic implications of 
disasters on low-income households are profound. Most low-
income households actually live in rental housing, so they are 
at the whim of the apartment building owner, or the owner of 
the home to retrofit these units. And, we really do need to get 
much more proactive in the way that we think about addressing 
climate change and the impacts on low-income households.
    Mrs. Beatty. Thank you. And thank you, Mr. Chairman. I 
yield back.
    Chairman Cleaver. The gentleman from Texas, Mr. Green, is 
now recognized for 5 minutes.
    Mr. Green. Thank you very much, Mr. Chairman. You have 
absolutely hit a home run with this hearing.
    I am also very grateful to Mrs. Wagner, because she and I 
have worked together on the CDBG-DR Disaster Relief bill, and 
the CDBG-DR bill is something that we hope to get passed again. 
We passed it in the House in the last session.
    I thank you, Mrs. Beatty, for your very kind words. I 
always appreciate being in hearings with you, and you spoke 
quite well. I can compliment you for your many, your many ways 
that you get things done. Thank you.
    Now, let me talk quickly about a couple of things. The 
first is, I have a commissioner in Fort Bend County who has 
called something to my attention, and he has indicated to me 
that in Fort Bend County, they have levees.
    These are FEMA-certified levees, Mr. Chairman, and he 
indicates that these levees protect them from flooding, and it 
is his position, and I tend to agree with him, that if these 
levees are protecting from flooding, and they are certified by 
FEMA, he believes that the cost for the flood insurance should 
be reduced, because the risk is being reduced by the levees, 
and the cost should be directly proportional to the risk. If 
the risk goes down, then the cost should go down.
    So I am going to ask, Ms. Poticha, would you please give 
some comments on this?
    Ms. Poticha. I think that these are very good questions, 
Congressman. And we should be modulating the cost and the 
insurance coverage based on actual risk. I think often, we have 
really underestimated the risk. We hear now all the time about 
hundred-year flood zones and we are having floods in those 
areas every 5 to 8 years.
    So we have to not only update our information and make sure 
that it actually takes into account the risk of much more 
extreme and more frequent storms, but we also need to 
understand that the old ways that we have been looking at this 
are just not working anymore. Even in an area that might be 
protected by a levee, we have seen those levees fail. So, we 
should be really focused on the actual risks to the community 
and ensure that it is protected.
    Mr. Green. Thank you very much. Let me do this, Mr. 
Chairman. I am going to offer for the record, a document, a 
communique from this commission, Commissioner Ken DeMerchant, 
who has some additional 12, 13 points that I think would be 
worthy of our consideration. So, I would like to place this in 
the record. And I would like to continue with another issue, 
understanding that--
    Chairman Cleaver. Without objection, it is so ordered.
    Mr. Green. --there will be more that we will do and talk 
about as it relates to the issue that he has called to our 
attention.
    Right now, Commissioner Ellis, you have had some concerns 
with reference to the CDBG-DR funds getting to you. HUD has 
recommended that we change the system. The HUD OIG has 
indicated that we codify the process so that we don't reinvent 
the wheel every time there is a disaster. And I would like to 
get your response in terms of how codification could be of 
great benefit to the recipients of the funds, if you would?
    Mr. Rodney Ellis. Congressman, thank you. I think it would 
be helpful as long as there is appropriate congressional 
oversight of what we do, and making sure that in any guidelines 
that are codified, the equity is replete as part of the 
process. And equity has to be more than just a six-letter word. 
Obviously, on my level we would prefer if you do a direct 
allocation to us so we don't have to argue about the 
administrative costs with our State partners, but the key is 
guidelines that have equity.
    And I will close with this: When HUD was created, LBJ 
wanted the direct allocation, cities and counties wanted the 
block grant approach, but oftentimes they have not, we have not 
been as equitable in how we spend the money. The HUD money was 
directed for the most vulnerable among us. That is why it was 
created.
    Mr. Green. Just as a quick follow-up, I am sure you are 
concerned about the timely manner in which the funds are 
received. That has been a problem, I think. And I agree with 
you, direct allocation would work. We are attempting to put 
together a means by which that can take place, and I believe 
that it is doable. We have done it before. Hopefully, we can 
put this into some sort of codified language and make it 
permanent.
    Finally, with reference to my next opportunity to talk 
about this, I will yield back my time today. Thank you very 
much.
    Chairman Cleaver. Thank you, Mr. Green.
    The gentlewoman from New York, Mrs. Maloney, is now 
recognized for 5 minutes.
    Mrs. Maloney. Thank you, Mr. Chairman. And thank you all 
for your testimony on this very important topic. This hearing 
touches on the intersection of two crises which are being felt 
acutely in my City of New York: the climate crisis; and the 
affordable housing crisis. Climate change is one of the single 
most pressing threats facing New Yorkers, this country, and the 
global community, and our most vulnerable communities are 
bearing the brunt of the consequences.
    As we look to building back better, we must do so with a 
focus on climate justice and climate resiliency. For New York 
City, that means investing in a green future for New York 
City's public housing.
    To celebrate Earth Day this year, I gathered with climate 
activists and New York City Housing Authority (NYCHA) residents 
to discuss efforts to invest in climate solutions while also 
addressing our affordable housing crisis. The Green New Deal 
for public housing introduced by my colleague, Ms. Ocasio-
Cortez, would help us achieve this by investing up to $180 
billion over 10 years in sustainable retrofits that target 
urgent maintenance repairs, improvements to residents' health 
and safety, and the elimination of carbon emissions.
    It also provides funding to electrify all buildings, add 
solar panels, and secure renewable energy sources for all 
public housing energy needs. In short, it will make Federal 
housing cleaner, safer, and greener.
    Ms. Poticha, do you believe that the Federal Government 
should include carbon reduction and climate resiliency when we 
invest in affordable housing?
    Ms. Poticha. Thank you Congresswoman. I appreciate the 
question. And I really appreciate your vision for a more 
comprehensive set of solutions, because what we know--the 
science tells us that even if we go full bore on making our 
communities as resilient as possible, we are still going to be 
facing the impacts of climate change, and affordable housing is 
so essential to be a key role in our response, because these 
are the people who are the most vulnerable. They are the most 
vulnerable to harm when their home doesn't have tight windows, 
air comes in, moisture builds, they get asthma, and they are 
sent to the hospital.
    But they are also more vulnerable due to an inability to 
have a really stable home, so the more that we can connect 
climate resilience and affordable housing as one issue that 
really, I think, is the place that we should be.
    Mrs. Maloney. As a follow-up, will the failure to invest in 
climate resiliency lead to the loss of more housing units, 
contributing to the affordable housing crisis in our nation?
    Ms. Poticha. Absolutely. Thank you very much. I think that 
what we have seen of the community is housing that has not been 
kept up to standards. These are the most vulnerable households 
to an extreme weather event, or hurricane, or a big wind event, 
and if we start to lose those housing units, we are starting to 
really see a catastrophe in our communities.
    Mrs. Maloney. And in your written statement, you mentioned 
two action items we can take to address equity housing and 
climate resiliency: one, supporting community-led development; 
and two, funding community ownership. I recently introduced the 
Affordable Housing Preservation Act with Representative Omar, 
and the legislation will establish a $200 million grant program 
run by HUD that would support nonprofits in their efforts to 
create and preserve affordable housing options by developing 
cooperatives for low-income homeowners.
    This legislation seems to align with your prescription of 
supporting community-led development and funding community 
ownership. Can you elaborate on how these two principles are 
important for addressing climate equity and housing?
    Ms. Poticha. Yes. Thank you for that question. Community-
led development and funding community ownership really help 
ensure that communities can continue to reverse the legacy of 
disinvestment and segregation from our policies, and instead, 
allow people to lead the response in their own way. They want 
the agency to be able to design their futures.
    Mrs. Maloney. Thank you. My time has expired. I yield back.
    Thank you so much, Mr. Chairman, for calling this important 
hearing. And to all of the panelists, thank you.
    Chairman Cleaver. Thank you, Mrs. Maloney.
    Mr. Vargas of California, you are now recognized for 5 
minutes.
    Mr. Vargas. Thank you very much, Mr. Chairman. First, I 
want to thank you for holding this hearing. I think it is been 
an excellent hearing and very provocative in many ways.
    I also want to thank, and I would be remiss if I didn't 
thank General Stivers for his service, both to the Military and 
to the Congress. You really are an asset and we will miss you 
deeply. Everyone respects you deeply. Thank you.
    I also would like to meet in person. And I again would echo 
the same remarks as Mrs. Beatty, get vaccinated. Mr. Taylor, 
tell your colleagues, please, get vaccinated so we can meet in 
person again. I think it is important, and it is also science.
    And since I mentioned science, it is interesting--for many 
years, I have argued the point of climate change with my 
colleagues on the Republican side, and I would always, 
unfortunately, get to the point where they would make the point 
about cows flatulating, and how that also is climate change.
    Well, the reality is that it is not climate change, it is 
an existential threat, and we have to do something about it. 
And I think that now we are all taking it seriously--I hope we 
are, and that we are going to do something about it. There is 
also something else that came up here that I think we have to 
take seriously, which is not building in areas that we know are 
going to be prone to flooding and also fires. Fires haven't 
been mentioned. Here in California, we are building more and 
more in fire-prone areas, and it just does not make sense.
    So, those are moral hazards when we allow people to do--and 
I heard the testimony that in Puerto Rico and other places, it 
is very poor people who are oftentimes in these floodplains. 
And that is true, but also you have along the coast here in 
California, as was mentioned, some very expensive homes that 
should not have been built right along the coast.
    In fact, oftentimes when I was on the coast, Commissioner, 
I would vote against building the rock walls and all of these 
other things, and these things that would prevent the houses 
from falling into the ocean, because the reality is that the 
cliffs erode, and that is how we get the sand to replenish our 
beaches, so some of these things are just natural.
    But I do want to ask, because I think it is an important 
thing, why do we continue to allow the building in these 
dangerous places? I think a lot of us would agree that it is 
important not to do that. And it is controversial because on 
both sides, there is reason to be against it or in favor of it.
    Ms. Poticha, why don't I ask you that? Why do we allow 
that, or should we?
    Ms. Poticha. Thank you, Congressman Vargas. That is a 
really great question. And it is probably the central conundrum 
of this issue.
    We have a tradition in the U.S. of local control, and 
letting communities make their own decisions, and yet often the 
science is telling us that the way that we built in the past is 
not going to do us very well going forward. So, we really do 
need to create incentives to move people out of harm's way, and 
make them more resilient.
    And I applaud your experiences on the California Coastal 
Commission. I think it is a very challenging issue. And maybe 
the only real way to do that is through creating a carrot that 
is so sweet and tasty that it promulgates change.
    Mr. Vargas. Okay. Commissioner Ellis, I don't know you, but 
you are very well-respected, obviously, by everybody. That is a 
tough question. How about you? I know that you know a lot of 
places that, I imagine, people don't want to move, but they 
probably should. What should we do?
    Mr. Rodney Ellis. Congressman, I think it is a lack of 
political will to do it. And obviously, if we talk about 
neighborhoods where they have more money, it is more affluent, 
with political clout, it is even more difficult, a separate 
issue. But we run highways through neighborhoods and take out 
poor areas all the time.
    Mr. Vargas. Yes.
    Mr. Rodney Ellis. There ought to be some equity there when 
we do it, and there ought to be some consequences. The carrot 
approach does work, but at some point you have to have a little 
bit of a stick. And by the way, I represent the energy capital 
of the world, and I know if we want to remain the energy 
capital, that means we have to diversify.
    Mr. Vargas. Sure.
    Mr. Rodney Ellis. And the resources [inaudible] but, look, 
it is a lack of political will, and we ought to stop it and we 
have to take control.
    Mr. Vargas. Would anyone else like to comment in my last 35 
seconds?
    Ms. Godreau-Aubert. Certainly. Thank you for the question, 
Mr. Vargas.
    In Puerto Rico, we are not asking for people to live in 
risk zones. What we are saying is that relocation should never 
be the first option. To clarify, the scope of CDBG-DR, if you 
are a person living in a flood zone and you don't have a formal 
title, circumstance is that usually come together, they have no 
options, no incentives, no aid under CDBG-DR because of locally 
imposed guidelines.
    What we are saying is that mitigation is often unequal. So, 
we are promoting tourism, hotel buildings, and at the same time 
we are to saying to people, you can't live there. So, we are 
asking for equitable mitigation and sensible relocation and 
incentives policy.
    Mr. Vargas. Thank you very much.
    Mr. Stivers. Would the gentleman--I know the gentleman is 
almost out of time. Would the gentleman yield for one second?
    Mr. Vargas. I am out of time. But I will certainly yield to 
you, General, of course.
    Mr. Stivers. I would just ask, since you are the third 
Member who has brought it up, that the Members of the Majority 
go to the chairwoman and ask her to survey to see who has been 
vaccinated. I don't think that any Members on either side of 
the aisle on this committee have not been vaccinated.
    And maybe we can meet in person again, if the chairwoman 
would be willing to survey the Members to see who has been 
vaccinated. I believe the Members on either side of the aisle 
have in fact been vaccinated. So after having that come up a 
couple of times, I figured I would just put in that plug. It is 
the last--
    Mr. Vargas. Will you come back for it, General?
    Mr. Stivers. --time I can say something like that. I yield 
back to the gentleman.
    Mr. Vargas. Thank you very much. I yield back.
    Chairman Cleaver. I will deliver those comments, Mr. 
Stivers, to the chairwoman.
    The gentleman from Florida, Mr. Lawson, is now recognized 
for 5 minutes.
    Mr. Lawson. Thank you, Mr. Chairman. And thank you for 
holding this hearing.
    My question is going to be for the whole panel, for each 
one of them to comment on it. In 2018, the Trump Administration 
did not activate the FEMA Disaster Housing Assistance Program 
after Hurricanes Harvey, Irma, and Maria. The program provided 
direct rental assistance and case management for lower-income 
residents displaced by the disaster.
    Sixty percent of fire victims were denied FEMA assistance 
monthly--after Harvey, just 26 percent of the people who 
applied for FEMA's small business administrative assistance had 
been approved, according to a December 2017 survey. Navigating 
assistance can be hard for anyone, but especially for 
impoverished victims of a storm.
    Should the FEMA Disaster Housing Assistance Program be 
activated? And how can the government improve the approval rate 
for low-income residents who have been negatively impacted by 
the natural disasters? And that is for the whole panel. Does 
anyone on the panel want to respond?
    Mr. Rodney Ellis. If I may, this is Rodney Ellis out of 
Houston, Harris County. I think, yes, it should be activated. I 
think as much as you can do to encourage direct allocations to 
those local communities so we don't have to fight with our 
State partners over administrative fees--who should administer 
it. And I think it would be wise to call us back in, and 
explain what we do. Give us some deadlines, and if we don't 
meet them, ask us to explain why.
    Mr. Stephen Ellis. Congressman Lawson, just to respond to 
your question, I am not super familiar with the program, but I 
would say that when an affected governor goes to the President 
and asks for a major disaster declaration, and it releases the 
DRF funds, other programs in FEMA should be tapped. That is 
something that would make sense to me.
    But then also, I think that this is an area where, when you 
talk about the approval rate and working with people, these are 
people who, in the best of times, are going to have, 
potentially, some difficulty applying for funds. And when you 
put a disaster on top of it, it is a much more challenging 
situation, and so I think that that is also a place where the 
Federal Government has to step beyond and try to provide 
assistance to people to apply for these funds and work through 
them.
    And lastly, just one thing that is kind of my separate 
little axe to grind, and I will be very brief, is that when you 
have an aviation disaster, we have a commission that goes and 
looks at what happened, analyzes it, and comes out with a 
report. We have major disasters, tens of billions of Federal 
dollars, and there is no after-action, sort of review of this. 
What should we learn? What should we apply? How can we make 
sure that when another--like after Rita, you had Harvey. What 
did we learn to make sure that we don't have that similar 
situation and would do better responding to disaster the next 
time around?
    Ms. Poticha. Congressman, this is Shelley Poticha from the 
Natural Resources Defense Council. And, yes, we should put 
forth, unlock housing assistance, rental assistance. And let me 
just put a little bit of data to the question. The impact on 
wealth inequality in natural disasters is profound. Black 
households lose an average of $27,000 in wealth after a natural 
disaster, Hispanic households are estimated to lose $29,000 per 
household, and at the same time, White households gained 
$126,000 in wealth. And that really affects renters more than 
homeowners. So, we have to put people at the center of this 
response and center racial equity.
    Ms. Godreau-Aubert. I think that open data is also a big 
part of this process. One of you already said that knowing and 
learning about the mistakes from the past could be incredibly 
useful. In our case, learning reasons for denials, basis for 
denials was extremely hard. And we have to present several 
Freedom of Information Act (FOIA) requests just to realize that 
ownership, or the lack of an official address were some 
reasons.
    Also, we think that in the aftermath of a disaster, 
requesting people to access that application only using the 
internet, or only using a telephone when there is no light and 
no telephones--
    Mr. Lawson. Mr. Chairman, I yield back. But this is a big 
issue, especially in Florida, where we have a lot of 
hurricanes, and something needs to be done about that. I agree 
with Mr. Ellis, and everyone who has spoken on this. But this 
is a big issue that we need to resolve. We do it for everybody 
else, but we don't do it for people in need, losing all of 
their income and everything else because of these hurricanes.
    With that, I yield back, Mr. Chairman.
    Chairman Cleaver. Thank you, Mr. Lawson.
    The gentlewoman from Iowa, Mrs. Axne, is now recognized for 
5 minutes.
    Mrs. Axne. Thank you, Mr. Chairman. And thank you to the 
witnesses for being here.
    I am glad we are having this hearing actually, so that we 
can better protect people's homes from disasters and climate 
change, which of course my colleague just mentioned in his own 
district, and we are seeing it here, of course, in Iowa.
    The UN released a report earlier this year, finding that 
natural disasters are occurring 3 times more often than they 
were just 40 years ago. And in the last 2 years, boy, have I 
seen homes in my district devastated by major flooding along 
the Missouri River, and by a derecho that brought 140-mile-per-
hour winds here across Iowa and the Midwest. So, I tend to look 
at resiliency in terms of a couple of categories: how we build 
homes; and where we build them.
    To start with how we build them, Ms. Poticha, can you talk 
about some of the long-term benefits of using modern building 
codes and methods?
    Ms. Poticha. Thank you, Congresswoman. I appreciate that 
question because we do want to see as a result of these 
conversations, higher standards in the way that we build our 
homes and buildings. And that is not only to make sure that, 
say, the roof doesn't blow off when a big wind comes through, 
but it is also to make sure that everyday living is healthier, 
particularly for low-income households and renters.
    We know that incidents of asthma are much higher in Black 
and Brown low-income communities. When a building doesn't have 
full enclosure, which actually also reduces energy use, and 
helps us mitigate climate change, when we have water 
infiltration, health incidents are much, much higher. So, there 
are multiple wins when we start to think about improving our 
building standards.
    Mrs. Axne. Thank you for that. And I appreciate you 
bringing up the health aspect of that. Do you possibly know how 
much people could save just on energy efficiency improvements?
    Ms. Poticha. Congresswoman, are you asking if they make 
their home energy efficient, how much do they save?
    Mrs. Axne. Correct. How much could the average family be 
saving if we pushed for energy efficiency across this country 
and individual's homes, any help with that?
    Ms. Poticha. Thank you for that question. I think it varies 
across the country, and I can get you much more detailed 
information, but what we found is that households are saving up 
to 20 percent of their monthly bills if they weatherize their 
homes, which is a lot of money.
    Mrs. Axne. That is a lot of money. Thank you for that. I 
think it is pretty clear that there is a heck of a lot of room 
for improvement there in helping American families reduce their 
expenses through more energy-efficient homes.
    I am wondering, Mr. Mais, are those improvements something 
that is, or should be, included in insurance rates?
    Mr. Mais. Thank you, Congresswoman. And yes, as insurance 
regulators, we support whatever efforts can be made to 
incentivize mitigation and to increase resilience, reduce the 
damage that any catastrophe can cause. And this is something we 
have been working on. As I mentioned, we had a recent workshop 
with the Insurance Institute for Business & Home Safety (IBHS), 
trying to look at cost-benefit metrics as we look at what it 
takes to be able to have resilient housing.
    It is important, I think, if we look at--forget Congress--I 
think it is important for Congress to do what it can to 
incentivize States, help FEMA to fully fund its mitigation 
program, so take a homeowner, so a homeowner like myself, the 
NAIC did a study, did a survey that was published at the 
beginning of April, and they asked homeowners, just your 
regular, average homeowners across the country; would they be 
willing to invest their own money to protect against--to 
mitigate any damages, to increase resiliency, and perhaps to 
get a reduction in their insurance costs?
    And if you take a look at it, you will be stunned at how 
many homeowners wanted to do that. I think the need is there, 
the understanding is there, and we, as insurance regulators, 
are working with industry and working with academics to see 
what we can do to ensure that these building codes are done as 
strongly as possible to preserve the housing stock, and that 
any savings are recognized by those households who actually 
take advantage of resiliency measures.
    Mrs. Axne. Thank you. And quickly, I want to get in here, 
with my colleague, Mr. Lawson's, same kind of thinking there. I 
have folks who are still waiting to make sure that they can get 
their funding and get bought out in this district. Are there 
ways that you all think we could better serve constituents 
through FEMA?
    Chairman Cleaver. Mr. Mais, the time is up, but go ahead 
and respond.
    Mr. Mais. Yes, if that was directed at me, I am perhaps not 
the person to answer that as a State insurance regulator. That 
is a Federal issue. It is an issue of Federal policy, and I 
just don't feel it is within my purview as a State insurance 
regulator to respond to it.
    Mrs. Axne. Any other folks on the panel who would like to 
respond?
    Mr. Rodney Ellis. This is Rodney Ellis. Any additional 
money that goes into the buyouts would be helpful. Voluntary 
buyouts help to give the people a price that would incentivize 
them to make a move.
    Mrs. Axne. Thank you.
    Chairman Cleaver. Thank you, Mrs. Axne.
    The gentleman from New York, Mr. Torres, is now recognized 
for 5 minutes.
    Mr. Torres. Thank you, Mr. Chairman. The destruction of 
property at the hands of climate change is as much a human 
disaster as it is a natural disaster, decisions about the 
design, construction, and siting often determine the extent of 
the property damage caused by a climate event.
    Take as an example, the varied impact of California's 2018 
wildfires. In 2008, California established rigorous building 
codes, and 51 percent of the properties built after 2008 went 
undamaged during the wildfires. By contrast, only 18 percent of 
the properties built before 2008 went undamaged.
    Furthermore, according to a 2020 FEMA study, the adoption 
of the International Building Code and the International 
Residential Code saves $1.6 billion a year. Is there anyone on 
the panel who knows what percentage of States and localities 
have adjusted their building standards to meet the 
International Building Code and the International Residential 
Code?
    Ms. Poticha. Congressman Torres, this is Shelley Poticha. I 
would be happy to get back to you with that information. I 
don't have it at my fingertips right now.
    Mr. Torres. And should the government--now I have a policy 
question--mandate adoption of the International Building Code 
and the International Residential Code as a condition of 
receiving Federal funds when it comes to the expenditure of 
Federal funds on infrastructure, particularly housing?
    Ms. Poticha. Are you directing that at me?
    Mr. Torres. Yes.
    Ms. Poticha. Okay. We need to get everyone to adopt these 
more stringent codes, because not only is it essential to drive 
down energy use in existing buildings, it is the most cost-
effective way of reducing climate pollution. And until we have 
a common set of standards, and even the ability of some 
jurisdictions to take further action beyond--I do work in San 
Jose, which has adopted a very aggressive building code 
standard, net zero, and we need to do this in order to meet our 
climate challenge. I can't state how urgent this is.
    Mr. Torres. And is there anything else that the government 
can do to ensure the sustainable and equitable design, 
construction, and siting of housing?
    Ms. Poticha. I think that--
    Mr. Stephen Ellis. May I respond? Oh, sorry.
    Ms. Poticha. Please, go ahead, Steve.
    Mr. Stephen Ellis. Congressman, I think that it really, if 
you look at how much money is going out the door from the 
Federal Government, there needs to be greater strings attached. 
Essentially, the communities, and the homeowners, and the 
States have to do their part as well, if they are expecting 
Uncle Sam and citizens around the country to do their part.
    I have no problem tying strings to Federal assistance, to 
actually have stronger building codes, and build back in ways 
that are more resilient and less vulnerable. I think that is a 
critical area. And if a community or if an individual does not 
want to do that, don't take the money.
    Mr. Torres. But apart from the adoption of the 
International Building Code, and the International Residential 
Code, what strings should be attached to the expenditure of 
Federal funds?
    Mr. Stephen Ellis. Well, a lot of it comes down to planning 
and being ready for these inevitable disasters. And the one 
thing that you find is that if you already have a plan in place 
of, okay, when the disaster occurs, we are going to buy out 
these particular properties, or we are going to do this 
particular mitigation action, you have an opportunity, a tragic 
opportunity, but an opportunity, nonetheless, to remake your 
community and make it less vulnerable.
    So, we should have been requiring certain plans and 
policies to be in place. And we should be rewarding communities 
and States that do more, with more assistance, and trying to 
drag along the laggards.
    Ms. Poticha. If I could just build on that, I would also 
say that communities need resources to engage with leaders in 
the community to get ahead of a disaster and plan in a 
proactive way. That is why I focus on community-led low carbon 
development, because if you have an ability to get the 
community engaged in order to prevent the damage that is likely 
to happen, that can do a lot.
    Mr. Torres. And then quickly, I don't know if I have time, 
but if you could just--both HUD and FEMA have recovery funds 
programs. What has been your experience with each of those 
programs in terms of the ability to access the funds, and the 
flexibility around the expenditure of those funds?
    Commissioner, I will direct the question to you.
    Mr. Rodney Ellis. Congressman, thank you. I was going to 
say, on the International Building Codes, make sure that there 
is flexibility. We got 50 inches of rain from Harvey in 
Houston, and that may not be the case everywhere in the 
country.
    But, look, as much as you can give a direct allocation with 
accountability, it helps. What we have run into in Houston is 
us disagreeing with our State partners, and then sometimes, the 
government actually wants extra money to balance that budget on 
administrative fees. And then, we don't get administrative 
fees, but we take it from low-income people, so we can 
administer the program that somebody is looking over our 
shoulder on. That is a great question.
    Chairman Cleaver. Thank you, Mr. Torres.
    The gentleman from Texas, Mr. Gonzalez, is now recognized 
for 5 minutes.
    Mr. Gonzalez of Texas. Thank you, Mr. Chairman.
    My question is for Mr. Ellis. Mr. Ellis, the Fair Housing 
Act (FHA) protects people from discrimination when they are 
renting or buying a home, getting a mortgage, seeking housing 
assistance, or engaging in other housing-related activities. In 
the aftermath of disaster, several States have been sued over 
their inequitable or discriminatory allocations of disaster 
recovery funds, which were found to be in violation of the FHA.
    For example, in 2014, the State of New Jersey settled for 
$240 million after a HUD investigation found that Black and 
Latinx residents were disproportionally denied recovery and 
building assistance, and that the State had not conducted 
sufficient outreach to communities of color, low-income people, 
and people with limited English proficiency.
    Mr. Ellis, how does Harris County work with the State of 
Texas to ensure that fair housing planning and disaster 
recovery planning go hand-in-hand?
    Mr. Rodney Ellis. Congressman, thank you. It is a big 
challenge. We have asked our legal department, we have tasked 
them with making sure that they try and root out any vestiges 
of discrimination. I mentioned earlier that in Texas, we still 
have that requirement in State law that you give points based 
on whether or not local officials sign off on putting housing 
in certain neighborhoods.
    So, it is a big problem, and a big issue there. I don't 
think there is as much sensitivity on the State level as there 
is in local communities. But look, I welcome the renewed 
interest in fair housing on the Federal level, particularly 
from the new Secretary of HUD. I think it is a good thing, even 
for those of us who want to do the right thing, it is a 
challenge in certain neighborhoods. And it is good when we can 
say, ``You tell us we have to do it or we will get sued.''
    Mr. Gonzalez of Texas. Yes. What does Harris County's 
latest assessment of fair housing show are the biggest 
impediments to fair housing, and where does the County work to 
mitigate those issues in the administration of CDBG funds?
    Mr. Rodney Ellis. Well, start with that requirement that 
you have to get signoff from other elected officials. It is 
also a big challenge for us in disputes with our State partners 
on this one-bedroom, two-bedroom policy.
    If you go in and a house had three bedrooms built, and 
there are only two people left in it, it is the largest 
investment that family has, and GLO is taking the position that 
you can only go back with two bedrooms. The City of Houston 
decided to put local dollars up to match it. We have not done 
that at the County level.
    We have to go back and appeal to HUD to overrule the GLO on 
it. I mentioned earlier, when your colleagues asked, why were 
they doing it--I think the chairwoman asked--I think it is 
because they were worried there wouldn't be enough funds to go 
around. But it is a big problem in Harris County and in other 
areas.
    Another big problem for us is protecting the investments 
you all have given us in housing. We assume in our region that 
we get about a billion dollars for the City of Houston, and a 
billion dollars for the County for housing. We have assumed we 
should get a comparable amount out of CDBG mitigation funds to 
go and protect that housing. So, there are a lot of challenges 
there. Any oversight you all give us, Congressman, and any 
questions you all ask of HUD, and also of the GLO, will be 
helpful.
    Mr. Gonzalez of Texas. Thank you. And I yield back. Thank 
you so much.
    Chairman Cleaver. Thank you, Mr. Gonzalez. And let me thank 
all of our witnesses for their testimony today. This has been a 
very enlightening hearing.
    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 now adjourned.
    [Whereupon, at 2:07 p.m. the hearing was adjourned.]

                            A P P E N D I X


                              May 4, 2021
                              
 [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]