[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]
EMERGENCY HOUSING NEEDS IN
THE AFTERMATH OF KATRINA
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON
HOUSING AND COMMUNITY OPPORTUNITY
OF THE
COMMITTEE ON FINANCIAL SERVICES
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED NINTH CONGRESS
FIRST SESSION
__________
SEPTEMBER 15, 2005
__________
Printed for the use of the Committee on Financial Services
Serial No. 109-54
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WASHINGTON: 2006
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HOUSE COMMITTEE ON FINANCIAL SERVICES
MICHAEL G. OXLEY, Ohio, Chairman
JAMES A. LEACH, Iowa BARNEY FRANK, Massachusetts
RICHARD H. BAKER, Louisiana PAUL E. KANJORSKI, Pennsylvania
DEBORAH PRYCE, Ohio MAXINE WATERS, California
SPENCER BACHUS, Alabama CAROLYN B. MALONEY, New York
MICHAEL N. CASTLE, Delaware LUIS V. GUTIERREZ, Illinois
PETER T. KING, New York NYDIA M. VELAZQUEZ, New York
EDWARD R. ROYCE, California MELVIN L. WATT, North Carolina
FRANK D. LUCAS, Oklahoma GARY L. ACKERMAN, New York
ROBERT W. NEY, Ohio DARLENE HOOLEY, Oregon
SUE W. KELLY, New York, Vice Chair JULIA CARSON, Indiana
RON PAUL, Texas BRAD SHERMAN, California
PAUL E. GILLMOR, Ohio GREGORY W. MEEKS, New York
JIM RYUN, Kansas BARBARA LEE, California
STEVEN C. LaTOURETTE, Ohio DENNIS MOORE, Kansas
DONALD A. MANZULLO, Illinois MICHAEL E. CAPUANO, Massachusetts
WALTER B. JONES, Jr., North HAROLD E. FORD, Jr., Tennessee
Carolina RUBEN HINOJOSA, Texas
JUDY BIGGERT, Illinois JOSEPH CROWLEY, New York
CHRISTOPHER SHAYS, Connecticut WM. LACY CLAY, Missouri
VITO FOSSELLA, New York STEVE ISRAEL, New York
GARY G. MILLER, California CAROLYN McCARTHY, New York
PATRICK J. TIBERI, Ohio JOE BACA, California
MARK R. KENNEDY, Minnesota JIM MATHESON, Utah
TOM FEENEY, Florida STEPHEN F. LYNCH, Massachusetts
JEB HENSARLING, Texas BRAD MILLER, North Carolina
SCOTT GARRETT, New Jersey DAVID SCOTT, Georgia
GINNY BROWN-WAITE, Florida ARTUR DAVIS, Alabama
J. GRESHAM BARRETT, South Carolina AL GREEN, Texas
KATHERINE HARRIS, Florida EMANUEL CLEAVER, Missouri
RICK RENZI, Arizona MELISSA L. BEAN, Illinois
JIM GERLACH, Pennsylvania DEBBIE WASSERMAN SCHULTZ, Florida
STEVAN PEARCE, New Mexico GWEN MOORE, Wisconsin,
RANDY NEUGEBAUER, Texas
TOM PRICE, Georgia BERNARD SANDERS, Vermont
MICHAEL G. FITZPATRICK,
Pennsylvania
GEOFF DAVIS, Kentucky
PATRICK T. McHENRY, North Carolina
Robert U. Foster, III, Staff Director
Subcommittee on Housing and Community Opportunity
ROBERT W. NEY, Ohio, Chairman
GARY G. MILLER, California, Vice MAXINE WATERS, California
Chairman NYDIA M. VELAZQUEZ, New York
RICHARD H. BAKER, Louisiana JULIA CARSON, Indiana
PETER T. KING, New York BARBARA LEE, California
WALTER B. JONES, Jr., North MICHAEL E. CAPUANO, Massachusetts
Carolina BERNARD SANDERS, Vermont
CHRISTOPHER SHAYS, Connecticut STEPHEN F. LYNCH, Massachusetts
PATRICK J. TIBERI, Ohio BRAD MILLER, North Carolina
GINNY BROWN-WAITE, Florida DAVID SCOTT, Georgia
KATHERINE HARRIS, Florida ARTUR DAVIS, Alabama
RICK RENZI, Arizona EMANUEL CLEAVER, Missouri
STEVAN, PEARCE, New Mexico AL GREEN, Texas
RANDY NEUGEBAUER, Texas BARNEY FRANK, Massachusetts
MICHAEL G. FITZPATRICK,
Pennsylvania
GEOFF DAVIS, Kentucky
MICHAEL G. OXLEY, Ohio
C O N T E N T S
----------
Page
Hearing held on:
September 15, 2005........................................... 1
Appendix:
September 15, 2005........................................... 59
WITNESSES
Thursday, September 15, 2005
Alvarez, Henry A., III, President and CEO, San Antonio Housing
Authority, San Antonio, TX, testifying on behalf of National
Association of Housing and Redevelopment Officials............. 8
Beamon, Clanton, Executive Director, Delta Housing Development
Corporation, Indianola, MS, testifying on behalf of the
National Rural Housing Coalition............................... 37
Brodsky, Jeffrey I., President, Related Management Company, LLC,
New York City, NY, testifying on behalf of the National Multi
Housing Council and National Leased Housing Association........ 40
Daly, Sharon M., Senior Advisor for Public Policy, Catholic
Charities USA.................................................. 10
Huey, J.K., Senior Vice President, IndyMac Bank, Pasadena, CA,
testifying of behalf of the Mortgage Bankers Association....... 12
Kennedy, Judith A., President and CEO, National Association of
Affordable Housing Lenders..................................... 42
Miller, Kay, President, T.A. Miller, Inc. and Tra-Dor, Inc.
Management, Shreveport, LA, testifying on behalf of the Council
for Affordable and Rural Housing............................... 14
Norris, Michelle, Senior Vice President of Development, National
Church Residences, testifying on behalf of the American
Association of Homes and Services for the Aging................ 44
Roberson, David A., President and CEO, Cavalier Homes, Inc.,
Addison, AL, testifying on behalf of Manufactured Housing
Institute and the Manufactured Housing Association for
Regulatory Reform.............................................. 15
Roman, Nan P., President, National Alliance to End Homelessness.. 17
Thompson, Barbara, Executive Director, National Council of State
Housing Agencies............................................... 19
Wilson, David F., Homebuilder, Ketchum, ID, President, National
Association of Home Builders................................... 20
APPENDIX
Prepared statements:
Ney, Hon. Robert W........................................... 60
Brown-Waite, Hon. Ginny...................................... 62
Alvarez, Henry A., III....................................... 63
Beamon, Clanton.............................................. 73
Brodsky, Jeffrey I........................................... 83
Daly, Sharon M............................................... 94
Huey, J.K.................................................... 122
Kennedy, Judith A............................................ 139
Miller, Kay,................................................. 149
Norris, Michelle............................................. 153
Roberson, David A............................................ 164
Roman, Nan P................................................. 170
Thompson, Barbara............................................ 175
Wilson, David F.............................................. 179
Additional Material Submitted for the Record
Miller, Hon. Gary:
Ellen Lee, City of New Orleans, prepared statement........... 198
National Low Income Housing Coalition, letter, September 13,
2005....................................................... 206
National Association of Realtors, prepared statement......... 210
Alvarez, Henry A., III:
Written response to question from Hon. Barney Frank.......... 216
EMERGENCY HOUSING NEEDS IN
THE AFTERMATH OF KATRINA
----------
Thursday, September 15, 2005
U.S. House of Representatives,
Subcommittee on Housing
and Community Opportunity,
Committee on Financial Services,
Washington, D.C.
The subcommittee met, pursuant to call, at 10:03 a.m., in
Room 2128, Rayburn House Office Building, Hon. Robert Ney
[chairman of the subcommittee] presiding.
Present: Representatives Ney, Miller of California, Brown-
Waite, Harris, Pearce, Davis of Kentucky, Waters, Carson, Lee,
Sanders, Scott, Cleaver, Green, Frank, Gonzalez, and Clay.
Chairman Ney. [Presiding.] The committee will come to
order.
I would ask unanimous consent that our colleagues,
Congressman Aderholt of Alabama and Congressman Gonzalez of
Texas, be permitted to participate in today's hearing. Without
objection, the two Members are more than welcome to be
participating in today's hearing.
Also, I would add that also Congressman Lacy Clay of
Missouri, who is a member of the full committee but not the
subcommittee, should also participate. Without objection, he is
also added.
I am going to make my opening statement horrifically brief
because we want to hear from you. Members are welcome to have
opening statements, but at some point in time when members come
in, we will just go ahead straight on with it.
This morning, the Subcommittee on Housing and Community
Opportunity meets to continue our discussion on the crucial
housing needs in the aftermath of Hurricane Katrina along the
Louisiana, Alabama, and Mississippi Gulf Coasts.
Federal and local governments now face the huge task of
coordinating the relocation of thousands of individuals, which
is one of the discussions, and also what to do with families in
the immediate area whose lives have been uprooted due to the
Hurricane Katrina situation.
Last week, we had a meeting where I brought together a
large group of people from across the housing spectrum to begin
discussing how best to respond. I think the meeting was
productive. We had participation by Congressman Barney Frank,
the ranking member of the full committee, and also our ranking
member of the subcommittee, Congresswoman Waters of California,
and Mr. Miller and other members that came to that. I think it
was a good meeting to have.
According to the Department of Housing and Urban
Development, there are 436,800-some units of HUD-assisted
housing in the hurricane-affected region. This number includes
15,500 units of elderly housing and 2,500 units of housing for
the persons who have disabilities in the Gulf Coast area.
So I think this hearing is very important so that we can
see how we can help individuals in the entire Gulf area for the
terrible problem that they are into.
With that, I am going to yield to the ranking member.
[The prepared statement of Hon. Robert W. Ney can be found
on page 60 in the appendix.]
Ms. Waters. Thank you very much, Mr. Chairman.
I appreciate very much the tremendous work that you have
done since Hurricane Katrina. In particular, I am appreciative
of the roundtable that you pulled together where we had housing
advocates and others related to the housing industry sharing
with us their expertise and their opinions about how we can
move very quickly to deal with the housing needs of all of the
displaced victims in the Gulf region, the victims of Hurricane
Katrina.
As you know, Mr. Chairman, I visited the area and witnessed
a lot of the devastation. I was in New Orleans and Baton Rouge
and New Iberia, Andalusia, Lafayette, and Alexandria.
More than anything, the temporary shelters that have been
established should be simply that: temporary. We have to get
people out of these shelters and into what I call transitional
housing. And then, of course, we need to build permanent
housing. This is an awesome task that must be done.
I am very appreciative that you are in the role that you
are in, Mr. Chairman, because I know about your knowledge in
this area and your concern for the housing needs, not only of
the people of the Gulf region, but for all of the people of
this country.
So I would simply say that the information that we will get
today will be very helpful to us, but our challenge is to move
and move quickly. Someone said it is a test of Congress's
ability to seize the opportunity to meet these needs.
So I anxiously await the testimony for today, but more than
that I think, Mr. Chairman, if anybody can lead us to get this
done quickly, you certainly can. So I am pleased and delighted
to be here with you today, and I yield back the balance of my
time.
Chairman Ney. I want to thank the gentlelady for her
comments.
Mr. Miller?
Mr. Miller of California. Thank you, Chairman Ney.
We had a very good hearing last week, as you said, but the
State and local governments are still trying to deal with the
effects of the hurricane in that region. We have about 1
million people displaced, with 163,000 people without homes
that are in shelters and stuff. This is going to provide quite
a challenge, let's say, for the Federal Government dealing with
the private sector in partnership in dealing with this issue.
We are going to have some huge problems.
Cement was a shortage before this occurred. Plywood,
softwood, lumber are just in short supply. So when the impact
of this is really felt in trying to rebuild, trying to provide
the housing we need out there, this is going to be an
insurmountable challenge. I think many factions in the building
industry it is going to face some issues that we have not faced
in recent history. That is because of the magnitude of this. We
faced shortages in the past and we have always been able to
somewhat deal with them, but not to this magnitude.
I am looking forward to the testimony today. We have 90,000
square miles impacted. That is an incredible amount of impact
on this country. The needs, we do not really know what they
are. That is why this hearing is important, to determine what
those needs are. We are hearing from the private sector because
we have to work with the private sector. You are going to have
to do this. We are going to have to work with you in doing
this. The Government cannot handle it without the private
sector's involvement.
So that is why I applaud Chairman Ney for calling this
hearing today to again better ascertain what our needs are
going to be, what part we have to play, and what part we are
going to have to partnership with the private sector. I thank
you.
I would like to also include the statement by the National
Association of Realtors into the record today, without
objection.
Chairman Ney. Without objection.
Mr. Miller of California. Thank you.
Chairman Ney. Thank you.
And also, the statement of Ellen Lee from the City of New
Orleans, who had to return their today, and a letter from the
National Low-Income Housing Coalition to be submitted for the
record, if there are no objections.
The gentleman from Massachusetts, Mr. Frank?
Mr. Frank. Thank you, Mr. Chairman.
I join the ranking member of the subcommittee in expressing
our appreciation for your active role here.
I will say, as the ranking member of the full committee, I
am very proud that people often comment that the chairman of
the committee and I get along very well on a lot of issues,
although there are real differences. What we try to show is
that you can both have differences and pursue them in a
respectful way, and then collaborate in other areas. The
chairman and ranking member of this subcommittee have also set
a model, I think, for the House.
In fact, a lot has been done in the housing area, not
nearly as much as we would like, but more has been done than
people realize, partly because they do it together and it is
not controversial. And coverage is generated in this society
not by the inherent importance of things, but by their
controversial nature.
Obviously, we now have a lot to do here. There is clearly
agreement on increasing the number of vouchers. One of the
things I want to stress, and I believe this committee will feel
this very strongly, the vouchers have to be additional
vouchers. We already have problems with long waiting lists. We
have problems in other cities. I was glad to see that our
Senate counterpart Senator Sarbanes moved for additional
vouchers. I think that has to be an absolute situation, that
any vouchers here be additional.
You then would also avoid the problem of what happens if
you simply put this into the existing pool and who gets what
priority. Nothing would be more divisive to this country at
this time than to have the people who were disadvantaged by
this hurricane go compete with other disadvantaged people
elsewhere in the country. So we are talking about, I hope,
additional vouchers.
Secondly, for those who have been critical of the voucher
program, I guess we are going as a Nation from having a
situation in which some people were criticizing vouchers to the
mantra being where were they when we needed them, and we have
to create them. It shows how important they are. It also is
necessary for there to be some waivers because of the red tape
that is there, that sometimes makes sense and sometimes does
not. This can in some ways give us a chance to experiment with
a simplified voucher program, and out of this may come some
lessons.
Finally, and this I know is something that we on the
Democratic side feel very strongly, the vouchers are essential.
They must be accompanied by funding for additional
construction. Let me appeal to my conservative friends with
regard to free market economics. Emergency vouchers, vouchers
that last for 1 year, will contribute zero to the housing
supply. No one is going to build housing based on a temporary
voucher or a 1-year voucher subject to appropriations.
If we do not want to drive up the price of housing, which
is already higher than it ought to be in many parts of this
country from the social standpoint, then we should not be
adding to the demand for housing without also adding to the
supply. Vouchers without construction add to demand without
supply.
It is morally essential that we help with that demand. We
do not want to leave people homeless. I am not arguing for not
going the vouchers. Too many negatives in that sentence. I am
arguing for the vouchers. What I am saying is that we must have
along with that new construction funds.
I was pleased to see the chairman of the committee and the
gentleman from Louisiana yesterday note that the affordable
housing fund of the GSE legislation will give us a very quick
way to get some funding there, but that cannot be the only
thing. We are all agreed to give total priority there to the
affected area in the near-term, but there will be people taking
these vouchers and going elsewhere in the country. There will
be people going to other cities. They will be going to cities,
and even though the vouchers are additional, the housing will
not be. So we need to be putting more money into the
construction of housing in those areas that will be receiving
people as well.
Finally, and this is again something that on our side
people feel strongly. We have talked to the representatives
from the affected areas, Mr. Jefferson and others. It is
something that particularly members of our Congressional Black
Caucus feel strongly. This is not to be a recipe for the
depopulation of New Orleans. We do not want there to be a
policy which makes it easier for people to move away. The
chairman, based on his own experience, was talking about this.
One of our goals is to make it possible for people who have
lived in this city and constituted a community in that city to
reconstitute that community. It is a very high priority.
I am glad to see that we have given the lead in this, and I
appreciate the extra time, because the very fact that in our
affordable housing fund amendments that will be on the floor
next week that I believe are bipartisanly unanimous, almost
unanimously supported, we are giving priority in the
construction of new affordable housing for low and very low
income people with the affordable housing fund to the affected
region.
That is a commitment that we are here to rebuild New
Orleans and rebuild the Gulf Coast and make sure that this does
not become a new form of gentrification, urban renewal in which
the poor people are dispersed and other people come back.
So all of this is to us a package. I am very pleased that
this committee and this subcommittee in particular seem pretty
united on this.
Chairman Ney. Thank you.
The gentleman from New Mexico, Mr. Pearce?
Mr. Pearce. Thank you, Mr. Chairman. I appreciate the
hearing.
I just have a couple of remarks just addressing the
overwhelming outpouring of generosity from America as a whole.
I think our response is to look at the needs and act with
dispatch and discernment. We need to be concerned about
returning families to stability and normalcy. We need to also
simultaneously be concerned about the strength of our economy
and the soundness of our job market.
So thank you, Mr. Chairman, for easing us along that path.
Chairman Ney. The gentlelady from California, Ms. Lee?
Ms. Lee. Thank you, Mr. Chairman.
I, too, want to thank you and Congresswoman Waters, our
ranking member, for really putting into perspective the
framework with which we need to develop our overall housing
strategy.
I also agree that our goal should be providing safe and
decent housing close to home for those who have been displaced,
not substandard housing, and also making sure that they are
afforded the opportunity to get home as quickly and as safely
as possible. So I think looking at this based on our short-term
goals and our long-term goals is very important.
In addition to that, unfortunately there have been some
waivers and suspensions of very important protections, such as
affirmative action, Davis-Bacon, and what have you, as we
rushed to find an appropriate response to this tragedy.
So I would hope that with the housing piece that we ensure
that all of our fair housing laws are complied with, our equal
opportunity laws, as well as making sure that individuals
receive the type of counseling because, of course, the people
are traumatized as a result of this disaster. So they need to
receive the type of job training, health care and social
services, counseling, as well as the help in making the
transition in to the temporary housing until they can go home.
So I just want to thank you again.
I want to especially thank Congresswoman Waters for really
being on the ground immediately and bringing back the
information so that we know exactly what we are doing on this
committee so we get it right this time.
I yield the balance of my time.
Chairman Ney. I thank the gentlelady.
The gentleman from Texas?
Mr. Gonzalez. Thank you very much, Mr. Chairman and Ranking
Member Waters, for allowing me to make an introduction of one
of the witnesses here today, a constituent newly arrived to San
Antonio. That is Henry Alvarez, the president and CEO of the
San Antonio Housing Authority, who is here representing the
National Association of Housing and Redevelopment Officials.
Henry came to San Antonio Housing Authority in 2004, and I
must say that he inherited the housing authority in a crisis
state and has done a fabulous job. He came, of course, from
Washington County, where he was the assistant director for
housing and tenant services there in the Oregon Department of
Housing.
I also wish to stress, and I think maybe Henry will cover
this in his remarks, he is native-born and raised in New
Orleans, so there is something very personal to what is going
on today and the efforts in assisting everyone in our
neighboring State of Louisiana.
The citizens of San Antonio are fortunate that someone with
the energy and talent of Henry assumed management of the San
Antonio Housing Authority at a very critical point in history.
I told you it was a crisis status, and it is, and it has not
remained so.
In a time of decreasing appropriations for public housing,
his work and that of the board of the San Antonio Housing
Authority has ensured that this vital agency continues to
effectively serve the needs of the people of San Antonio. In
essence, he is doing more with less.
I also want to say something briefly about the efforts of
local officials in San Antonio to accommodate the almost 13,000
evacuees we have received as a result of the Katrina
catastrophe. Mayor Hardberger, County Judge Wolf, and numerous
local officials such as Henry, public servants and volunteers,
have done a tremendous job in helping out our fellow citizens
find housing and necessary services in a very desperate time.
With not much more than 24 hours' notice, the citizens of San
Antonio and Bell County, as well as the citizens of Texas as a
whole, have stepped up and done their duty to help our
neighbors in Louisiana and Mississippi.
I do wish to emphasize again the tremendous role that the
San Antonio Housing Authority under the leadership of Henry
Alvarez has been able to coordinate the housing needs of many
of these evacuees.
Again, thank you very much, Mr. Chairman and Ranking Member
Waters. I yield back.
Chairman Ney. The gentleman, Mr. Scott?
Mr. Scott. Thank you, Mr. Chairman and Ranking Member
Waters, for holding this hearing and for other efforts to bring
important stakeholders in housing together to discuss
rebuilding the lives that were decimated by Hurricane Katrina.
I have seen many efforts developed to provide transitional
housing for displaced residents, and I remain concerned that
the Government should not simply create unsafe temporary
ghettoes or displace residents in substantial housing in other
cities. I also believe that we should begin a discussion about
providing Government housing for displaced residents.
While the planning and design to rebuild New Orleans and
other communities will be determined in large measure by local
officials, Congress should have a say in how Federal dollars
are spent. I believe that we have an opportunity to rebuild
these communities in a way that can open up the doors to the
middle class for many impoverished families. After all, race
and poverty and class most certainly did play a role in this
disaster, and it is important for us to understand that as we
move forward.
Now, how can we accomplish these goals?
First, rather than rebuild pockets of poverty, we should
encourage mixed income development. The success of HOPE VI in
Atlanta can serve as a model on how to leverage private dollars
to rebuild neighborhoods.
Second, we should encourage builders to hire and train
local residents in order to provide jobs and skills.
Third, the families who help rebuild their neighborhoods
should be given opportunities to become first-time homeowners.
This could be based on the Habitat for Humanity program.
Finally, we must ask, what will become of the families who
cannot or choose not to return to the Gulf region? We must find
ways to give them new opportunities. I do not want to see them
just steered into substandard housing and left to join a
forgotten class in their next city.
The aftermath of Katrina gives us focus on the class issues
that divide America. Congress should take this as an
opportunity to encourage building affordable housing
nationwide.
Thank you, Mr. Chairman.
Chairman Ney. I thank the members.
We will move on to the panel.
Congressman Gonzalez, of course, has introduced Mr. Henry
Alvarez.
Next is Sharon Daly, senior adviser for public policy with
Catholic Charities of the United States of America, one of the
Nation's largest social service networks, providing networking
opportunities, national advocacy and media efforts, training,
technical assistance, and financial support.
J.K. Huey is senior vice president of IndyMac Bank, located
in Pasadena, California. She is testifying today on behalf of
the Mortgage Bankers Association, an association whose members
comprise more than 70 percent of the single-family mortgage
market.
Kay Miller is president and owner of T.A. Miller,
Incorporated, and Tra-Dor, Incorporated, Management, located in
Shreveport, Louisiana. She is testifying on behalf of the
Council for Affordable and Rural Housing, a nonprofit trade
organization that promotes the financing, development, and
management of affordable rural housing.
Congressman Aderholt was supposed to be here and could not
make it at this moment to introduce you, so I will do it.
David Roberson is the president and CEO of Cavalier Homes,
Incorporated, of Addison, Alabama. He is testifying today on
behalf of the Manufactured Housing Institute and the
Manufactured Housing Association for Regulatory Reform.
Nan Roman is president of the National Alliance to End
Homelessness, whose mission is to mobilize the nonprofit public
and private sectors in a united effort to address the root
causes of homelessness.
Barbara Thompson is the executive director of the National
Council of State Housing Agencies, a nonprofit organization
committed to advancing the interests of lower income and
underserved people through financing, development and
preservation of affordable housing.
Dave Wilson is a homebuilder from Ketchum, Idaho. He is
currently serving as president of the National Association of
Home Builders, whose 220,000 members seek to promote policies
to make housing a national priority and provide safe, decent,
and affordable housing for all consumers.
I would note, without objection, your written statements
will be made part of the record. You will be each recognized
for 5 minutes. The yellow light comes on, which is a warning
period that you have 1 minute left. Anything you would like to
add after that for the record will be accepted, without
objection.
We will begin with Mr. Alvarez.
I thank all the witnesses today for being here.
STATEMENT OF MR. HENRY A. ALVAREZ III, PRESIDENT AND CEO, SAN
ANTONIO HOUSING AUTHORITY, SAN ANTONIO, TEXAS, TESTIFYING ON
BEHALF OF NATIONAL ASSOCIATION OF HOUSING AND REDEVELOPMENT
OFFICIALS
Mr. Alvarez. Good morning, Mr. Chairman, Ranking Member
Waters, Representative Gonzalez.
And to the congressman, let me say, without question, thank
you very much. I stand just simply to say thank you for your
generosity and your graciousness for having me here.
My name is Henry Alvarez, and I am the president and CEO,
basically the chief knucklehead, over at the San Antonio
Housing Authority, called SAHA. I am also a native of New
Orleans, Louisiana, born in Charity Hospital and a product of
its public housing, both Lafitte and Magnolia.
It is my honor and a privilege to appear before you today
on behalf of the National Association of Housing and
Redevelopment Officials.
Our membership includes 18,000 housing and community
development professionals and nearly 3,380 agency members,
comprising housing authorities, community development
departments and redevelopment agencies.
I want to be brief today and I want to say thank you from
the bottom of my heart. We have basically called my friends and
family and members of New Orleans and other members of the Gulf
Coast region many different names and monikers, but they are my
neighbors; they are my friends, and this is a personal event
for me because, in some instances, they are actually my family.
Given that, here in San Antonio much of what we have done,
we have seen about 13,000 of these families that have been
displaced by the hurricane. Four thousand of them remain in the
shelters today.
We have taken every conceivable action and appreciate all
that you have done to relax the barriers to assist these
families, and for the great State of Texas, we have had our
arms open very wide for these friends and neighbors of mine to
come into our environment and to try to help them as best we
can.
Let me share with you now, Mr. Chairman, some of the
concerns and recommendations and thoughts of NAHRO.
First, we agree with you. We continue to strongly recommend
that Congress authorize and immediately make resources
available to fund a minimum of 50,000 emergency tenant
assistance vouchers to assist the displaced families of
Hurricane Katrina.
These vouchers, however, should be in addition to our
existing vouchers products, notwithstanding, as in the city of
San Antonio and much of the housing authorities in the country,
we have 23,000 families waiting.
As such, I agree that we should not displace those families
in addition to having them compete with families displaced by
Katrina. We ask that this allocation come as quickly and
efficiently as possible. We will add into the record a model
for which we believe can assist in doing that.
Notwithstanding, our HUD secretary has relaxed many of the
regulatory requirements, but there are some others that we
would like to talk about very briefly. We hope that they would
relax the 20 percent limitation on project-based vouchers, that
we would be allowed to increase the number of residents that we
can put in project-based families.
The other issue is that we find some funding to provide
security deposits and transportation activities. One of the
things that, as we walk through the shelters, folks are
concerned about is how do we get from here to there; how do we
reunite ourselves with our families; how do you get me off the
bus and to where I need to be so that I can see the kids that
have been sent someplace else other than San Antonio.
We continue to have one of the greatest humanitarian
efforts in the city of San Antonio that I have ever seen. We
have seen agencies that for years have never spoken to each
other, never as much as said good morning, but they have all
come together to help these families of Katrina.
We ask also that in the community development block grant
program that you take a look and relax some of the flexibility
in that program, particularly as in New Orleans that will be a
need for tremendous infrastructure to rejuvenate our local
economies and to help create jobs and to provide Section 203
processes for those families that will need to help and assist
in rebuilding the great city of New Orleans.
I hope that these things can be done very quickly. There
are a lot of us here to talk today, and I do not want to
belabor the point, but I want to share with you from the bottom
of my heart, we are not talking about just folks. These folks,
my family home is in Gentilly, right behind Dillard University,
and it is under water. We are talking about folks who are our
friends, our neighbors, our family members. I hope that you
will move quickly to do whatever is essentially necessary to
help these families.
Also, before I conclude my remarks, I would like to say
thank you to Congressman Frank for his continuing support for
House Resolution 1461, the Federal Housing Finance Reform Act
of 2005.
With that, Mr. Chairman, again my heartfelt thanks, and it
is a sincere thank you for having me here today. That concludes
my statement, and the remaining portions of my remarks will be
added to the record, if you have no objection.
[The prepared statement of Henry A. Alvarez III can be
found on page 63 in the appendix.]
Chairman Ney. Thank you. No objection, and we appreciate
your testimony.
Mrs. Daly?
STATEMENT OF MS. SHARON M. DALY, SENIOR ADVISOR FOR PUBLIC
POLICY, CATHOLIC CHARITIES USA
Ms. Daly. Thank you, Mr. Chairman and Ms. Waters, for
convening this hearing. My name is Sharon Daly, and I want to
thank you.
I am here to represent Catholic Charities USA and its
member agencies which in a typical year serve well over seven
million poor and vulnerable Americans. Catholic Charities USA
is providing critical support wherever it is needed.
You asked us to report on our efforts and its response to
the disaster, but I will do so very briefly.
We have already forwarded over $1 million in donor
contributions to Catholic Charities agencies in the States
hardest hit: Mississippi, Louisiana, Texas, and Alabama. Our
disaster funds operate out of a special account and we direct
donations to the most affected States as well as to the
agencies aiding evacuees across the country. These donations
are for temporary food, housing, clothing, and other basic
necessities for crisis and grief counseling and financial
assistance. Additional funds will be forwarded as they arrive.
We appreciate the generosity of our donors and are
respectful of their wishes to provide direct aid to the
victims. None of the money donated for Katrina relief will be
used for the regular expenses of Catholic Charities, and 96
percent of the donations will go directly for victims.
Following most previous disasters, Catholic Charities
agencies serve their communities through long-term assistance.
But this time, the lack of emergency aid in many areas has
required our agencies to take on new roles to keep people alive
until FEMA and the Red Cross and others arrived.
Last weekend, Catholic Charities was the only agency
helping people in many communities in Mississippi. Our dioceses
in Biloxi and Jackson have already provided food and emergency
shelter for several thousand displaced families. Staff and
volunteers from our Florida agencies and the Florida Catholic
Conference have been on-site in Mississippi since September 5.
In Biloxi, as Charities teams go door to door in the most
ravaged areas distributing food and water and other supplies,
the commodity most in demand is bleach to clean up the filth in
people's houses, houses that they cannot leave because there is
no place to go.
We have also been there from day one in Louisiana. Catholic
Charities of New Orleans, which a week ago was under 10 feet of
water, has been operating out of Baton Rouge and is
distributing 400,000 pounds of food daily. The agency operates
a medical and respite care center where police and firefighters
and other responders working on the ground in New Orleans can
get crisis and trauma counseling, medical attention, and other
support before returning to duty.
Father Larry Snyder, our president, has been in Baton Rouge
for over a week, and Pope Benedict's envoy, Archbishop Cordes,
arrived on September 10 in Baton Rouge to provide spiritual and
material aid.
Far more is being accomplished than I can report today. Our
agencies in an additional 22 States are working to help
evacuees providing shelter and emergency assistance and working
toward longer-term solutions. My written testimony highlights
some of what our agencies are doing.
We have all seen the devastation and the need. Now imagine
that instead of seeing it on TV you are living it. Imagine that
you have lost everything and are scrambling for water, food,
shelter, and basic safety for you and your family. Imagine
being helpless. Imagine having witnessed the death and rape of
many while you struggle to survive another day. You do not have
any safety nets--no car, no house, no credit card, nothing. How
would you rebuild?
Our first recommendation is that getting evacuees out of
the sports arenas and mass shelters is critical. In communities
where the housing stock has been destroyed or is uninhabitable,
trailers and manufactured housing are needed immediately.
According to FEMA, hundreds of thousands of trailers have been
purchased or will be soon, but in many of the hardest-hit
areas, there is no emergency housing of any kind.
While trailers are preferable to shelters and sports
arenas, they are no substitute for rapid reconstruction of the
communities that have been physically, but not spiritually,
destroyed.
The kindness and generosity of Americans who have accepted
evacuated family, friends, and strangers into their homes must
not be abused by the Federal Government. The burden must be
shared by all Americans through adequate Government responses,
not just by the brave and resourceful and generous. Congress
must ensure that the Federal Government gets appropriate
housing and services in place before this overwhelming
hospitality is exhausted.
We suggest the following.
For emergency housing, the committee should instruct FEMA
to reach out to faith-based and community groups, as well as
other property owners, that have property suitable for the
installation of small numbers of temporary housing units such
as trailers.
There are reports that FEMA plans to install 25,000
trailers on property near Baton Rouge. High concentrations of
evacuees who are at least temporarily unemployed and have lost
everything is a recipe for another disaster.
Chairman Ney. I want to just note to the gentlelady that
the time has expired, but if you would like to wrap up and that
way we can have time for questions.
Ms. Daly. We also urge, as Mr. Frank and others, Mr. Shays,
has said, that it is very important that residents, including
low-income residents in these areas, have a chance to
participate in the planning for redevelopment.
We agree that there is a need for an enormous increase in
emergency Section 8 vouchers in addition to those that are
already done. And we would support the recommendations already
mentioned for waivers of some Section 8 requirements so that
landlords who are volunteering for the first time to house
Section 8 clients are able to get into the program and people
get out of those shelters.
In addition, we think we need money right away to rehab the
damaged housing in the Gulf area that has been assisted by
housing the Section 8 and 202 and other programs, that have
been damaged, but with repair could be habitable fairly soon.
We also urge the committee to adopt--
Chairman Ney. I hate to interrupt the gentlelady.
Ms. Daly. Okay, just 1 more minute, 1 second.
Please find some way to produce more affordable housing for
the lowest-income families. There is right now no Federal
program that does that, and we need to make sure those families
have housing as soon as possible.
Thank you, Mr. Chairman.
[The prepared statement of Sharon M. Daly can be found on
page 94 in the appendix.]
Chairman Ney. Thank you. We will have some questions for
you where you will be coming back in because I think you have
some very valuable thoughts. Thank you.
Mrs. Huey?
STATEMENT OF MS. J.K. HUEY, SENIOR VICE PRESIDENT, INDYMAC
BANK, PASADENA, CALIFORNIA, TESTIFYING ON BEHALF OF THE
MORTGAGE BANKERS ASSOCIATION
Ms. Huey. Thank you for inviting MBA to testify on how the
mortgage industry is responding to the disaster caused by
Hurricane Katrina. I am honored to be here.
I have over 20 years of experience in mortgage servicing
and have assisted thousands of borrowers affected by other
disasters, including Hurricane Alicia that hit the Texas Gulf
Coast in 1983, where I was on-site in Houston helping borrowers
with their insurance claims checks. So I understand the anxiety
and level of stress that these victims are going through.
I welcome any questions on the general practices of the
mortgage companies put into place to assist customers under
these circumstances.
MBA estimates that as many as 360,000 mortgages were
impacted by Hurricane Katrina. This number includes both loans
secured by properties directly damaged from nature, as well as
properties affected by secondary economic impacts such as job
losses from the hurricane's aftermath.
Immediately upon learning of the damage caused by Hurricane
Katrina, mortgage companies began assisting affected borrowers
by providing extended grace periods for mortgage payments,
waiving late fees, waiving the reporting of derogatory
information to credit bureaus, postponing foreclosure actions,
and placing calls and e-mails to customers to discuss their
needs.
Lenders are also able to assist borrowers with long-term
solutions, including providing second mortgages, renovation
loans and refinance mortgages, but it is crucial for the
borrowers to contact their servicers so that all the options
can be explored. To this end, MBA has undertaken a series of
public service announcements in key markets.
MBA has suggestions for how Congress could help meet
immediate housing needs.
For instance, Congress could provide a temporary emergency
waiver of all requirements for certain programs, such as the
Low-Income Housing Tax Credit and HUD subsidy programs.
We also strongly urge Congress to provide funding for an
additional 50,000 emergency Section 8 vouchers to be
administered by the appropriate local housing authorities, as
already recommended.
MBA also supports the waivers granted under the HOME
program and strongly supports increased emergency HOME funding.
Waivers should remain in place for at least 1 year, and further
waivers of matching requirements, income eligibility
requirements, and maximum unit subsidies should be included in
any relief package for disaster victims in those communities
accepting evacuees.
In addition to addressing short-term housing needs,
Congress should address how we renovate damaged homes and build
new housing in the hurricane-affected areas. We believe FEMA,
FHA, and other Government programs can be catalysts for
rebuilding the neighborhoods, but current program requirements
will be difficult to overcome. For example, attaining an
appraisal will be difficult if not impossible in many of these
areas because there will be few, if any, comparable sales. In
addition, loan limits may need to be waived in order for the
Federal Government to insure a wider variety of properties.
MBA also supports lifting the cap for FEMA assistance on
repairs and replacement housing, reenacting temporary mortgage
and rental assistance programs, increasing the amount of low-
income housing stock, applying the Section 223 FHA program to
hurricane-affected areas, and relaxing the service area
population limits, and income limits under the RHS programs.
The most immediate need of mortgage companies is liquidity.
As indicated earlier, mortgage companies are offering short-and
long-term forbearance to borrowers. However, mortgage servicers
are required to advance principal and interest to investors.
MBA urges Congress to grant Ginnie Mae authority to absorb the
cost of advancing principal and interest during these
forbearance periods.
Finally, in our written testimony we address other
important issues outside of the jurisdiction of this
subcommittee: brownfields cleanup, tax relief for commercial
real estate mortgage investment conduits, and suggestions for
relief from no-bids on loans guaranteed by the Department of
Veterans Affairs.
Mr. Chairman, Ranking Member Waters, MBA and the mortgage
banking industry are committed to helping borrowers who have
been affected by this great national tragedy. Our goal,
however, is not only to provide for immediate relief of the
victims of the hurricane, but to restore the economic health of
the affected communities as well.
We appreciate this opportunity to testify, and we look
forward to working with you and everyone on this panel. Thank
you.
[The prepared statement of J.K. Huey can be found on page
122 in the appendix.]
Chairman Ney. Thank you.
Mrs. Miller?
STATEMENT OF MS. KAY MILLER, PRESIDENT, T.A. MILLER, INC., AND
TRA-DOR, INC., MANAGEMENT, SHREVEPORT, LOUISIANA, TESTIFYING ON
BEHALF OF THE COUNCIL FOR AFFORDABLE AND RURAL HOUSING
Ms. Miller. Good morning. My name is Kay Miller. I am
representing the Council for Affordable and Rural Housing. I
have a development, contracting, and management company. My
company mostly handles properties that are in the State of
Louisiana.
Our management company over the last couple of weeks has
made efforts to help give any assistance that we could to the
dislocated people of Hurricane Katrina. We have put them in our
community rooms. We have fed them. We have steered them to
community efforts that are out there for them and they would
not have any way of knowing where and how to reach them. We
have waived security deposits. We have paid their first month
rent. We have even had utility companies that would not waive
their deposits for electricity and for water. We paid those
fees for those tenants.
In addition to that, we have gone out in our personal
vehicles and trucks and gathered furniture, taken it to these
victims, given them a place to live, and given them beds to
sleep in.
I appreciate the opportunity to come here and speak on
behalf of the citizens of Louisiana, Mississippi, and Alabama.
Our hearts go out to them. Their homes were destroyed, but not
only that, their communities, their families, their jobs, and
the workforce that is going to be necessary to rebuild this
part of the Nation.
As said earlier so eloquently, what we need is immediate
additional Section 8 vouchers. We need allotment of rural
housing vouchers to reach those that are not in the cities, but
are in the smaller communities, but nonetheless are impacted by
the hurricane. The USDA has been working over the last week or
so with emergency rental assistance. I pray that continues,
that that is not just a short, 6-month problem-solver, but yet
something for the long term.
Of course, the immediate needs are for manufactured housing
to be brought in to move people from shelters into a more
permanent housing situation so that they can try and mend their
lives back together. As stated earlier, the emotional affect of
these people that have been affected by Hurricane Katrina is
unbelievable. They are walking around in shock. Their emotions
run the full gamut. They do not know whether to cry, to laugh,
to beg, to plead, to lay down. They really truly are
tremendously emotionally scarred by what has happened to them.
Of course, in the long term what we do need is additional
affordable housing. Our State in Louisiana especially has been
affected. Our occupancy rates were already at an all-time high
anywhere from 94 to 95 percent. In my particular management
company, we are 100 percent with people on waiting lists and
begging for housing.
Our local shelter has been able to place some people, but
there is no way of actually knowing the magnitude of the people
that are out there wandering, that are looking for somebody to
give them some direction about what it is they need to do and
how it is they need to get there.
We are going to need additional hiring of probably HUD and
USDA staffs to focus their concentration back on housing.
Housing has taken a backseat for the last several years because
there were bigger fish to fry, as we say in the State of
Louisiana. Housing needs to get back into the limelight.
Housing has to be a priority, no matter what the cost.
We are going to have to also consider that we are going to
have to work with our local housing finance agencies that are
in the three States that are affected. They are going to need
additional personnel. Low-income housing tax credits have
always been issued on a per capita basis. Those things may have
to be looked at. We may need to get additional credits in these
states.
The south is very unique in that people that are from the
south want to return to the south. They want to live where
their families are, their communities are, their friends are.
They do not want to completely be displaced forever. Please
allow us the opportunity to bring them home.
Thank you very much.
[The prepared statement of Kay Miller can be found on page
149 in the appendix.]
Chairman Ney. Thank you.
Mr. Roberson?
STATEMENT OF MR. DAVID A. ROBERSON, PRESIDENT AND CEO, CAVALIER
HOMES, INC., ADDISON, ALABAMA, TESTIFYING ON BEHALF OF
MANUFACTURED HOUSING INSTITUTE AND THE MANUFACTURED HOUSING
ASSOCIATION FOR REGULATORY REFORM
Mr. Roberson. Thank you, Chairman Ney and all of the
members of this subcommittee. On behalf of Manufactured
Housing, I am proud to be here today to tell you the efforts
for our industry and some opportunities for improvement in the
relief effort.
Immediately after Hurricane Katrina hit, our industry
started working with FEMA to bring a coordination of efforts on
resources, available inventory, other capacity and constraint
issues so that FEMA could understand how we could interface
with them in the relief effort.
Over the years, Manufactured Housing has played a vital
role in providing emergency housing. Last year, our company did
provide homes in the relief effort for Hurricane Charlie.
Currently, through working with FEMA, as a result of that,
there have been about 2,000 homes that have currently been
purchased that came from existing inventories. There has been
one bid let by FEMA for the production of 8,000 homes that will
very shortly begin production from the industry. There has been
a request for proposal from FEMA of 15,000 to 18,000 homes that
is still pending and has been pending for over a week.
We believe the industry today has approximately now, after
the purchase of these 2,000 homes, 7,000 or 8,000 homes that
could be purchased from existing inventories, whether it be new
or used. We believe the industry has the capacity to build
15,000 to 20,000 homes by the end of the year, depending on
specifications and order times and other variables.
We believe in the first quarter of next year, the industry
could build another 10,000 to 15,000 homes, which gives the
total amount of homes available over a 6-month period for the
relief effort of 35,000 to 40,000 homes. Although there have
been many reports in the media of much higher numbers, we
believe that is more in line with the real capacity.
Moving forward to see what could happen for immediate
improvement of relief efforts, we would encourage Congress to
take some specific actions.
The first thing is we need you to help HUD and FEMA and
other agencies come together so that certain exemptions or
requirements of the various laws and the oversight that they
have can be coordinated. For instance, houses purchased from
existing inventory may not meet wind-zone requirements for
areas where they may be located. We need you to step in and
help those issues be resolved between the various agencies. We
need you to help in transportation and other issues.
Secondly, we would ask you to look hard to change
longstanding guidelines at FEMA surrounding their bid process
and the way they interface with manufactured housing, to reduce
the paperwork and some of the onerous provisions that are
there, to encourage bidding from manufacturers to build relief-
effort homes. In our efforts for Hurricane Charlie, we had
payments made to us that extended over 166 days. Small
businesses cannot afford that kind of cash-flow problem.
There can be unreasonable delivery schedules. There are no
force majeure provisions that provide for relief for
manufacturers in the event that materials are unavailable.
There has been testimony here today surrounding the problems
with materials and the design longstanding in FEMA prevents
manufacturers from proactively bidding to build product.
In addition to that, we would ask that you would look at
those provisions also to ask FEMA to extend contract delivery
periods. Houses need to be delivered where they are coordinated
with infrastructure. You do not build houses and set them on
staging areas and let them sit there for months before
utilities are there. There is no reason to speed the process or
interrupt business for manufacturers. We can work together to
coordinate those efforts.
In addition to that, we think that the Federal Government
should extend help for financing of new homes to victims,
whether it be through loan guarantees, whether it be through
low rates, whether it be through preferential treatment of all
types of affordable housing, including manufactured housing,
and that all these efforts would have an immediate impact on
the relief efforts.
Over the long course, we also see some opportunities. The
fact is that we believe that FEMA needs to cooperate in a long-
term partnership plan with manufactured housing where we can
change the bidding process. We can change the specifications
for the houses where we can have industry input to help FEMA
save money, speed up response, these types of things. We
believe there could be a comprehensive plan for staging areas
and otherwise and that there could be some ongoing production
that could speed up the process in the future.
Lastly, I would like to speak just a little bit about the
long-term housing solution. Manufactured housing and modular
housing has come a long way. We do not have the same old image
of the house trailer that a lot of you think we do. We can
provide all classes of product today and manufactured housing
needs to play a vital role in the recovery for New Orleans and
the rest of Louisiana and the Gulf Coast.
We would ask Congress to update and modernize and give
preference to financing for manufactured housing and modular
through the financing through the GSEs and FHAs. There have
been numerous changes for unreasonable underwriting and
appraisal guidelines. We need to see things happen to adjust
advanced structures and other regulations and encourage new
lending.
We also think that it would be proper and important for
Congress to work with State and local governments to work on
zoning restrictions and other areas. We also think that it is
most important that Congress move to execute the Manufactured
Housing Improvement Act that started 5 years ago.
Chairman Ney. I do want to caution you that the time is
over.
Mr. Roberson. I appreciate that, and I thank you today.
[The prepared statement of David A. Roberson can be found
on page 164 in the appendix.]
Chairman Ney. We still will take the rest for the record. I
am sure there will be questions that will allow you to come
back into the conversation.
Mr. Roberson. Thank you very much.
Chairman Ney. Thank you.
Ms. Roman?
STATEMENT OF MS. NAN P. ROMAN, PRESIDENT, NATIONAL ALLIANCE TO
END HOMELESSNESS
Ms. Roman. Thank you so much for inviting me to testify
today on behalf of the National Alliance to End Homelessness.
The Katrina disaster has created hundreds of thousands of
homeless people. Many of these new homeless people will look a
great deal like the 750,000 people who were homeless across
America the night before the hurricane hit: desperately poor,
disproportionately minority, and often disabled.
Hurricane Katrina was a crisis of massive proportion, but
those most affected are the same Americans whom any disaster,
personal or natural, can send spiraling into homelessness. The
past two decades of work with homeless people and programs have
taught us many lessons, and I wanted to share some of those
today with respect to Katrina, focusing on the short term.
First, I concur with many other comments here today, that a
first goal must be to get people out of the shelter system
quickly. Shelter is bad for people. It has all kinds of
negative consequences for individuals and families. Those
consequences also are very costly to public systems of care.
The question, of course, is not whether to get people out
of shelter, but how we do it. Here are a few things that we
have learned over the years, starting with people who need
relatively little assistance and moving on from there.
Rent subsidy, if provided quickly, could result in housing
stability for as many as 75 percent of households affected,
assuming housing is available. We support the use of vouchers.
FEMA also, of course, has the authority to provide up to 18
months of rent subsidy at fair market rent, and we strongly
recommend that they do so quickly.
Since FEMA does not seem to be doing a good job of dealing
with housing or distributing money, it might make more sense to
try to get the FEMA resources turned over to the Housing
Finance Agencies, the public housing agencies, or somebody who
knows more about how to deal with housing.
At least 250,000 of the evacuees were very poor and are
going to require more than a short-term rent subsidy. They are
going to need longer-term rent subsidy and help negotiating
housing placement and services. To link people with housing and
services rapidly, grants could be given to local nonprofits or
city agencies to provide care management assistance.
Of those 250,000 evacuees who are likely to be extremely
poor, about 10 to 20 percent, say 25,000 to 50,000, are likely
to be disabled and to need an even more sophisticated
combination of services and housing.
We are already hearing anecdotally from Katrina shelters,
both in the affected area and across the Nation that those
people with more resources are rapidly leaving the shelters,
while those people with mental illness, serious stress
disorders, untreated substance abuse disorders, physical
disabilities, and the elderly are remaining in the shelter
system.
To identify and refer this group of people to proper
housing, we need to quickly get funding for case management or
specialized staff into the shelters. Supportive housing,
housing with services, would work well for this population.
I think we made a mistake in the homelessness system by
leaving this most vulnerable disabled population to languish
for years in shelters, and I hope that with some special
attention and resources, we can avoid making that mistake again
in the aftermath of Katrina.
In addition to rent subsidies, temporary housing, as
everyone has commented, will be needed. Reports are that all
available housing in the affected area has been rented or
purchased, yet there are 50,000 people remaining in Katrina
shelters there, so permanent housing will have to be quickly
created for these individuals and families in whatever way
possible, as has been discussed.
A few more general thoughts.
An administrative data system that can continually keep up
to date on people's location, needs and plans is essential,
both to meet immediate housing and service needs and to plan
for the future. How can we know the number of temporary or
permanent housing units that are needed, that we need to plan
for, in the total absence of any reliable information about
what people's needs or intentions are?
The Federal Government has already fully tested a homeless
management information system that could do the job. The State
of Louisiana, tired of waiting for an okay from FEMA, went
ahead and implemented it throughout the State of Louisiana. It
should be extended nationwide immediately.
Also, as others have said, new resources are needed. We
cannot help the newly homeless people on the backs of those who
are already homeless or who are at risk of homelessness. We
urge support of the voucher program as well.
And also, I think someone needs to be put in charge of the
housing function around Katrina. It is completely
uncoordinated. There are tremendous amounts of resources that
are going to be spent with no information and no coordination.
So I think that an important step, really, is to get someone
who knows about housing in charge of this critical activity.
At a minimum, Hurricane Katrina must not be allowed to
increase the number of poor and homeless people in our Nation.
I think we can aspire to a much higher goal than that, though.
I thank the committee for its commitment, for its interest,
and for its bipartisan efforts to do something to help the
victims of this terrible disaster.
[The prepared statement of Nan P. Roman can be found on
page 170 in the appendix.]
Chairman Ney. I want to thank you.
Ms. Thompson?
STATEMENT OF MS. BARBARA THOMPSON, EXECUTIVE DIRECTOR, NATIONAL
COUNCIL OF STATE HOUSING AGENCIES
Ms. Thompson. Thank you for this opportunity to testify
today on behalf of the National Council of State Housing
Agencies. NCSHA represents the housing finance agencies of the
50 States, the District of Columbia, Puerto Rico, and the U.S.
Virgin Islands.
State HFAs allocate the Low-Income Housing Tax Credit,
issue housing bonds, and administer HOME and other HUD
assistance all across the country.
State HFAs have responded to Katrina with an outpouring of
support and concern. State after State, some as far away as
Maine and Utah, have offered to provide housing to displaced
families. Collectively, HFAs have registered thousands of
housing units with FEMA. Many are already housing families.
HFA efforts have not stopped there. Many have contributed
staff, technical assistance and other resources to the affected
HFAs. Some have even offered to give up some of their own
desperately needed Federal housing resources to help meet the
dire housing needs in Katrina-afflicted States.
We at NCSHA have tried to do our part. We have focused
first on regulatory barriers preventing the immediate housing
of families in available housing credit, HOME, and other
federally assisted housing. We have asked the IRS and HUD for
immediate relief from income qualification and other occupancy
rules.
The IRS has responded, providing on September 9 official
guidance allowing housing credit property owners all across the
country to house families displaced by Katrina regardless of
their income. With NCSHA's encouragement, the IRS is now
preparing additional relief to facilitate the development of
new housing credit apartments that will be needed in the
afflicted States. HUD, too, has taken steps to get displaced
families into available housing.
I want to focus the remainder of my time this morning of
what still needs to be done.
Congress needs to provide immediate program relief that
Federal agencies lack the authority to provide. We have asked
this subcommittee, for example, to waive voucher and HOME
rules. We have provided staff our detailed proposals.
Tearing down barriers to the use of existing housing
resources, however, will not be enough. Resources are woefully
insufficient to meet the Nation's housing needs. They were
before Katrina and now after Katrina they will be taxed to the
breaking point.
States are not turning over housing to Katrina-displaced
families because they have no need for it. They are doing it
because the needs of families left with nothing are more urgent
than the urgent housing needs of other families still waiting.
This is a choice States should not have to make.
We urge Congress to provide more housing resources
immediately, not only to the afflicted States that need it
most, but also to those who have sacrificed their own resources
to help those States. We ask you to work with appropriators to
provide immediate emergency additional voucher and HOME
funding.
In addition, we ask you to re-examine with the
appropriators your fiscal year 2006 HUD funding bill to take
account of the long-term pressure the Katrina rebuilding effort
will place on so many States.
This is also the time to expedite enactment of pending
legislation that would make new housing resources available. We
especially urge you to enact the GSE bill and the affordable
housing grant fund it contains. NCSHA also asks this
subcommittee to work with your tax committee colleagues to get
additional housing bond and credit resources. Unfortunately, so
many of those who lost their homes are the very poor who we
cannot reach with many of the housing resources available to
us.
It is critical, therefore, that we have as many flexible
tools at our disposal as possible because it is only through
combining tools like housing credits, HOME grants, and vouchers
that we can reach these families.
Finally, though we hope never to face a natural disaster of
the magnitude of Katrina again; we know future natural
disasters are inevitable. We need to prepare for them now with
new housing production and my getting permanent disaster
regulatory and statutory relief on the books.
Thank you for this opportunity to testify today.
[The prepared statement of Barbara Thompson can be found on
page 175 in the appendix.]
Chairman Ney. Thank you.
Mr. Wilson?
STATEMENT OF MR. DAVID F. WILSON, HOMEBUILDER, KETCHUM, IDAHO,
PRESIDENT, NATIONAL ASSOCIATION OF HOME BUILDERS
Mr. Wilson. Thank you, Chairman Ney, members of the
subcommittee. On behalf of the 220,000 members of the National
Association of Home Builders, I appreciate the opportunity to
testify today. I am a builder from Ketchum, Idaho, and the
current president of the National Association of Home Builders.
The first point I would like to make this morning is that
nothing will happen to rebuild the Gulf region until a local
builder pounds the first nail in the first stud to rebuild his
own community. That is why one of the first steps that NAHB is
taking is rebuilding the housing industry in the areas affected
by Katrina.
We believe that up to 9,000 NAHB members have been
displaced, lost their homes or businesses, and have otherwise
been affected in this tragedy. NAHB and its State and local
associations are working as quickly as possible to get these
builders back to work and on their feet so they can begin
rebuilding their own communities.
Further, in an effort to reach out to our builders on the
Gulf Coast, NAHB is placing public service announcements in
newspapers and on radio and television in the affected States
and in Texas, asking the builders who have been economically
disadvantaged or displaced to call a designated number so
affiliates can provide them with assistance to help them get
back on their feet in their communities. State and local
building associations in the region are also helping to
organize materials donations to be used in the rebuilding.
Further, our members in Texas have organized a Web site to
connect available affordable housing units with evacuees in
Houston. This effort resulted in more than 1,000 individual
families securing a home in the first 2 weeks of the disaster.
The task of rebuilding is unprecedented, with more than 1
million people homeless or displaced. In Louisiana,
Mississippi, and Alabama, Katrina destroyed 275,000 homes,
according to the latest estimates by the Red Cross. This is
nearly 10 times as many as the previous natural disaster.
Further, countless other homes were severely damaged and
require immediate extensive repairs.
It is important to remember that the impact from the
hurricane is not only being felt in the affected areas, but
also in those States taking evacuees where housing must also be
provided. We applaud the steps taken by Congress and the
Administration to meet the housing needs of those affected by
Katrina.
Along these lines, I would respectfully ask Congress to
make NAHB a partner in the housing area command. NAHB
understands the immediate need to build temporary housing
quickly.
However, we believe it is important that the building
industry is a long-term partner with the Government on
rebuilding those communities. Ultimately, it is important that
competitive quality housing is rebuilt and the community
character is restored to those affected neighborhoods. Local
builders have long been part of their local communities, and it
is essential that they be part of the rebuilding of their own
communities.
My written statement contains detailed lists of additional
recommendations for Congress in addressing both the immediate
critical housing needs of evacuees and the long-term
reconstruction of housing infrastructure and supply. Let me
begin by mentioning a few of our short-term relief
recommendations.
First, ensure that the Section 8 housing voucher program
can be used to address the emergency needs of existing voucher-
holders who were displaced, as well as the newly displaced
persons.
Second, ensure the displacement persons can move into units
financed with low-income housing tax credits and other HUD
programs and quickly and without negative consequences to the
owners. This can be accomplished by implementing consistent
program waivers across all housing programs such as applying
the waivers for income limits provided recently by the IRS for
low-income housing tax credit properties to HOME-assisted or
other HUD-assisted properties as well.
Next, I want to touch on a few long-term key needs.
First and foremost, Congress will need to ensure the
affected communities receive adequate funding for Federal
housing programs.
Second, streamlining programs like FHA mortgage insurance,
HOME, community development block grants, Section 108 loan
guarantees, and USDA rural housing services will ensure the new
construction rehabilitation activities can move forward
quickly.
Also critical to the massive repair and replacement effort
is the need for large amounts of building material. By way of
comparison, the recovery from four major hurricanes that struck
the Gulf Coast in 2004 is still incomplete, hampered by
shortages of roofing, concrete, plywood, and other vital
materials. The cost of construction materials has increased
more than any time in the past 25 years. Duties imposed by
Canadian lumber, Mexican cement, as well as other duties on
Brazilian plywood have increased the cost of housing and
contributed to the material shortage.
We believe that the immediate need to build temporary
housing quickly is very, very important. However, it is
important that the building industry be a long-term partner
with governments on rebuilding our communities.
Ultimately, it is important that competitive, quality
housing is rebuilt and the community character is restored to
the affected neighborhoods. Local builders have long been part
of their communities and it is essential they are part of the
rebuilding.
Thank you very much.
[The prepared statement of David F. Wilson can be found on
page 179 in the appendix.]
Chairman Ney. I thank all the witnesses for your testimony.
I do not know really where to begin, but let me ask just a
couple of questions and give a couple of observations.
We have some members that have joined us.
I want to go to the issue of the manufactured housing.
There is something floating around Congress this morning that I
have heard of, and last night, that FEMA--and maybe you can
answer this or maybe you can't--that FEMA has asked for 300,000
manufactured homes.
Do you know anything about that?
Mr. Roberson. Thank you, Chairman Ney.
As I testified earlier, the only information that we have
at the industry so far is currently FEMA has issued contracts
to buy 2,000 houses that were in existing inventory. Some of
that is going on to retrofit those to specs that would be
suitable for them in the field.
They have issued one contract for the production of 8,000
homes to be built and delivered to the Gulf Coast region. They
have also issued what they call an RFP, or request for
proposal, to the industry for 15,000 to 18,000 more homes.
As I speak today, there have been no bids awarded or
accepted for the production of that, but that is all of the
capacity that we have seen for the industry so far is that
10,000 houses from existing and those to be built. We also
believe that the industry has the capability to build 15,000 or
20,000 houses here in this fourth quarter and then probably
another 10,000 to 15,000 in the next quarter.
Chairman Ney. I just wanted to raise this because this was
floating around last night and I was asked to look at this
letter. I said no. I am not going to sign that kind of letter.
I think this is a panic thing that FEMA is buying 300,000
houses. Maybe they need to buy 300,000, I do not know, but I am
just saying at this point in time I just wanted to ask you.
If you are in the industry, has FEMA said, "Hey, we would
like to buy 300,000"?
Mr. Roberson. No, they have not. It would be a little bit
impractical. Last year, the industry built about 130,000
houses.
Chairman Ney. Okay.
Mr. Frank. Would the chairman yield for a second?
Chairman Ney. Yes.
Mr. Frank. I appreciate that. That is why I am grateful
that through the chairman's good auspices we are going to have
that briefing with FEMA and HUD today.
I will say some of the information we had is that a large
number of the temporary units are in fact going to be RVs and
not fixed units, which frankly I prefer because that means it
is less likely that we are going to have permanent colonies.
But that is part of the information, that a large number of
those 300,000 we have heard from some people will be RVs,
rather than actually physical homes on-site. That is one of the
things that we will be get clarified from FEMA today.
Chairman Ney. I wanted to ask several of the witnesses, Ms.
Daly and others, there are a lot of emergencies to start with.
As the city is rebuilt, which it has to be rebuilt, what do you
do about the levees? I am not going to even get into that
today. So we have to make a decision. Do we have one that
sustains a level five, a level four?
There are a lot of urgent things, and I know that. But to
me, the shelters, and I have heard this over and over; I have
heard from our ranking member and others. The shelters, to me,
are the absolute urgent, got to be dealt with today issue.
Now a couple of statements I have heard people make in
conversation on this is, well, we do not want to dislocate
people; we do not want to relocate people. We also do not want
what people are calling trailer parks and problems.
But how do you deal with not relocating, but you have to
have the temporary housing? Is there any problem you see with
temporary manufactured housing in locations close to the
affected areas in Louisiana, Mississippi, and the other Gulf
States?
Ms. Daly. Mr. Ney, thank you for that question.
We think it is very dangerous if we concentrate large
numbers of trailers or manufactured housing close together. You
know, all of you know about the problems of densely populated
high-rise public housing and how we have had HOPE VI to try to
answer those problems. Let's not, as Mr. Scott mentioned,
create a lot of new ghettoes.
We do need to get people out of those shelters. You are
absolutely right. The elderly are in grave danger in those
shelters. We have to get them out.
Chairman Ney. So there is no problem with manufactured
housing. It is how many you put into a specific contained area.
Ms. Daly. We are not experts on manufactured housing. We
just know you have to get those people out of shelters. If you
concentrate them very closely together, you are going to create
even more problems and another kind of disaster. There are a
lot of nonprofit organizations, churches and so forth, in those
areas where you could put trailers scatter-site, so you do not
have to concentrate them in one place.
Chairman Ney. Mr. Alvarez?
Mr. Alvarez. Congressman, let me suggest just every fabric,
every probable solution to the problem should be utilized.
We have one that is extensively working. The voucher
program, if it is relaxed and increased in funding, allows
families to locate anywhere they want to in any city in
America. At the time when it is necessary or available for them
to return to whatever city or State they have come from, they
would be able to do so. That mechanism is already in place.
Chairman Ney. Due to the nature of some time, and people
will have to leave, I will come back to that because on that
issue if you only give people the choice to leave the Gulf
States, that is the only choice, therefore, they have, if you
give them the choice to leave the Gulf States. If you give them
a choice to have some manufactured housing in smaller units,
then they have a choice. But if you just say, here is the
voucher and you can go anywhere in the country you want, you
are really not giving them a second choice. You are saying here
is the voucher and you will go somewhere else. So I think there
is room for both discussions.
Right now, I am going to yield to the ranking member.
Ms. Waters. I am going to yield to Barney Frank.
Mr. Frank. I thank the gentlewoman because I have another
meeting to go to.
Let me say first, and I appreciate this point, we I think
are unified. There are two reasons not to have semi-permanent
colonies. One, they are not great in and of themselves. Two,
they would retard what is the goal for many of us, which is to
give people the maximum chance to come back and reconstitute
New Orleans, and particularly lower-income people. We do not
want to see a situation in which the lower-income people cannot
come back. That is why we have agreement here about an
affordable housing fund, giving priority in its first year to
them, et cetera.
But also, and my staff has shown me the New York Times that
said this as well, and apparently we have heard both from the
Recreational Vehicle Association, as well as the Manufactured
Housing Institute, that the great majority of units being
purchased for temporary residents are recreational vehicles, or
they are called here travel trailers.
That is a good thing because, first of all, you can do them
more quickly because you do not have to have the hookups that
are needed. Secondly, they are less likely to be permanent. The
numbers, apparently the New York Times said last week, are in
the ratio of about nine to one, travel trailers to mobile
homes.
Many of us here have been strong supporters of manufactured
housing, in addition to more conventional homebuilding. There
is room for all of this. We will get more of that from FEMA.
Let me ask one point that came up, to Mr. Alvarez. A couple
of the members from New York City raised this with us, and that
is, the housing authorities are going to be hit with increased
heating oil costs, particularly those in the Northeast and in
the Midwest. I do not expect it is a major problem in San
Antonio, but nobody is exempt totally.
But this is a concern. We know that the cost of home
heating oil is going to go up. We also know in the Northeast
and in much of the Midwest, that is a major factor.
I do not expect you have anything off the top of your head,
but if NAHRO could give us some response there, it does seem to
me that some form of fiscal relief to those housing authorities
ought to be part of the package because they are going to be
confronted in a short term maybe with an unexpected increase in
heating oil bills that they have no other way to pay for.
I do not know if you have any response on that.
Mr. Alvarez. We do. We will get some materials for you to
answer that question. But one of the primary utility functions
in Texas is, of course, air conditioning.
Mr. Frank. Air conditioning, yes.
Mr. Alvarez. And it is becoming more and more expensive.
In those locations where they are using heating oil,
heating oil today has almost doubled in cost. So I think it is
going to be a significant issue to address.
Mr. Frank. We have had people say in the past, well, air
conditioning, that is kind of a luxury, but one of the sad
facts out of New Orleans are the frail people, people in poor
health, elderly people who died and whose death was, in fact,
hastened by 100 degree temperatures. So if anybody thought air
conditioning was purely a luxury, one of the sad lessons of New
Orleans is that it is not.
I appreciate the gentlelady from California yielding to me.
I have to go off actually to a hearing on Iraq, or as I would
say, a good way to finance all of this, which is by getting out
of there, but that is another topic.
Thank you.
Chairman Ney. The gentlelady?
Ms. Waters. Thank you very much, Mr. Chairman.
The roundtable that we had I think was very instructive. I
think out of that roundtable, we came away with a bit of a
consensus about some things. We know that we have to get people
out of these temporary shelters. That is number one.
Over the CentralPlex in Baton Rouge, there were 5,000
people. Let's not even talk about what was happening over at
the Astrodome. So that cannot last for long. We have to do
that.
What I refer to as transitional housing or emergency
housing, certainly the RVs or the manufactured housing must be
purchased and they must be located in ways that make good
sense.
I just heard yesterday that FEMA was talking about locating
25,000 in one place. That shall not be. I mean, that is
absolutely unacceptable and I do not think any Member of
Congress should support that.
I am not in the business of creating ghettoes. I am in the
business of alleviating ghettoes and giving people decent
housing. So we cannot support, and I do not think my chair
would support, putting 25,000 manufactured housing or RVs and
throwing people all into one location.
We talked about ideas such as churches and others being
able to offer land or space where you could put these units
down in small number. We are also interested, based on some of
our conversations about what happened in Florida and how you
provide some real management and oversight with these, if it is
a church, nonprofit, et cetera. I think we need to understand
how we can involve them in helping to manage some of these
places.
Now, the other thing that we continue to talk about is
this. When I was in Louisiana, every hour I was shocked to
learn about another decision that sent 400 people up to Utah. I
understand people were sent up to Utah to a barracks that
basically sits in the middle of no man's land somewhere.
These people want to come home. We need relocation
assistance to make sure that people are able to return near
their city and community, such as some of those that I have
alluded to in Louisiana and the same thing in Mississippi and
in Alabama.
So I think we have to work very closely with FEMA to make
sure that they are not making these decisions without the
benefit of the input that we are receiving in these roundtables
that we are putting together. Permanent housing must be on the
agenda in every conceivable way. I think we are committed to
the building of housing for low-and moderate-income people.
That can get lost in this siting of these units to accommodate
the people in the shelters.
So I think basically we are on the right track.
I think one of the things we have to figure out with
housing is what to do about people who lost permanent housing,
that had no flood insurance, housing that had been handed down
perhaps from the family, paid for, et cetera, and what to do
about people who lost homes where they had mortgages and no
flood insurance.
We have to figure out those two things and expand, don't
forget about the needs of the communities that we are talking
about going into. Those homeless problems did not go away
because we had Katrina. They are still there, and we have to
take care of those. The housing needs did not evaporate. We
have to pay attention to both of them.
This is an opportunity to seize on every conceivable way by
which to do this. We have to look at CDBG; we have to expand
CDBG. We have to expand the vouchers. We have to have disaster
funding that will accommodate these homes that were lost that
did not have flood insurance.
So I think we are on the right track. We are just going to
have to be very tough and very focused about it.
One of the things I asked Congressman Rangel to do
yesterday was to look at tax credits for folks who have land
that they would like to let us use for the siting of some of
these. When I was in three churches in Los Angeles on Sunday, I
had people who came up to me and said, "Ms. Waters, I own 10
acres of land and you can use it." We have to find ways to make
that work.
I think we give tax credits for everything else; let's give
it to some of these landowners in order to use it for some of
the temporary housing. It may be some land that we could then
talk about building permanent housing on.
I am not in support of trying to keep people out of
Louisiana, Alabama, and Mississippi. I am in support of
returning them. The culture shock of taking people and throwing
them up in cold territories, I mean, it is just too much. We
have comments about that. We have one shelter in Los Angeles
that people were taken to and the comments that are coming
because of everything from food and the way things are done.
People are very unhappy and they want out.
So I did not want to get into this. We have enough work to
do, but there is one such shelter that we have to find out,
okay, what are the rules? We have people in the shelters. They
want out. Something is going on here that people just cannot
tolerate, they cannot stand, they not like it. Nobody knows
what the rules are to get them out.
I talked to FEMA. That was a mistake. Of course, they did
not know.
And so, we are going to have to create some rules about how
we deal with some of these problems.
You are looking at me as if you are baffled, Mr. Scott.
FEMA did not know what to do about people who had been shipped
to a shelter, not knowing where they were going in the first
place. They did not know what State they were going to, and
wanting to get out, and there are no rules for how they get out
and get back to Louisiana or to a shelter that is closer to
where they came from.
So I do not have any real questions except to say I expect
those of you who are housing advocates to help form this
consensus with us in these areas, and then we have to put our
boxing gloves on and fight like hell to get it done.
Thank you.
Chairman Ney. Thank you.
Mr. Pearce?
Mr. Pearce. Thank you, Mr. Chairman.
And thank you, everyone, for your testimony.
I have multiple questions so I am looking for the short
version of the answer rather than the long version. We only
have 5 minutes each.
Ms. Daly, thanks for your work on behalf of Catholic
Charities.
How much have you all budgeted for this particular
situation?
Ms. Daly. The money that we send out to our Catholic
Charities agencies that are serving the survivors comes from
donations. So far we have sent out $1 million. We hope for $10
million shortly. It all depends on donations. This is money
contributed by ordinary people.
Mr. Pearce. Right. Thank you.
Ms. Huey, you mentioned liquidity. Do you think the
financial markets will provide adequate liquidity for an area
that has been devastated like this?
Ms. Huey. Well, I think that is one of the greatest
challenges that our businesses are concerned about. For
example, when I mentioned the opportunity for Ginnie Mae to
cover some of the advances, that is going to be critical. As we
are having to make those advances, the borrowers are not making
payments to us. So it is critical that that is explored.
Mr. Pearce. Thank you.
Ms. Miller, thanks for your personal testimony about the
things that you have seen and done personally in response. You
are a developer. How much do you estimate that the shortage of
materials that Mr. Wilson talked about is going to increase the
cost per foot? What was the cost per foot previously in that
area, the Louisiana area, and what will the cost per foot of
building be now?
Ms. Miller. Good question. I know over the last week, we
were just beginning to start site utilities and site-work at
two properties that we had. I immediately got a phone call from
my company requesting that they come and sit down with me. That
is never a good sign.
We are already seeing about a 10 or 15 percent increase in
the prices of lumber that they are quoting me at this time.
They are encouraging me to order materials far in advance of
what I would normally need so that they will have it available.
My fear is I am not sure if this is panic or if this is going
to be worse things to come. It is definitely going to be an
issue for construction costs in the future for all of us.
Mr. Pearce. Thank you.
Mr. Wilson, I have been working with small builders in my
State for the last 6 or 8 months. It looks like the EPA has
changed some of the regulations and some of the enforcement on
small builders, very much threatening their survival.
Has that same push been seen in the affected areas of the
Gulf Coast prior to the disaster? Do you need relief from that
regulatory push that really was threatening the number of
builders who would even be available?
Mr. Wilson. I think that push still continues. EPA is
still--we are at odds with them on storm water enforcement,
obviously.
Let me mention on materials, I can tell you that OSB and
plywood went up 55 percent in the last 4 days. Lumber is up 15
percent, and cement is on an allocation basis. You have to make
a reservation to get a load of cement now in most communities
in this country.
Mr. Pearce. The cement question is a larger question.
Actually, the builders had requested that we look at the
dumping from Mexico about a year ago, and in response to that
then we came in with the tariffs. Then when the supply got
sucked up by China, now our tariffs have driven the price up by
60 percent.
Do you think the association would back the review of the
initial dumping request on Mexico to get that supply available
at a cheaper price?
Mr. Wilson. We have actually asked the Administration to
look at removing the tariff and are in conversation with
Mexico. As you note, cement has gone from $50 a yard to $95 a
yard, so it is driving up the cost of construction.
Mr. Pearce. Ms. Thompson, you talked about the need for
$3.5 billion in housing vouchers. At the end of your testimony,
you said that we need more resources. Is that even above the
$3.5 billion?
Ms. Thompson. Yes. I was referring to the voucher funding.
In addition, we do need for the long-term rebuilding more
resources like more low-income housing tax credits and bonds.
On your point, Congressman Waters, yesterday--
Mr. Pearce. I am sorry. If you could not address that. It
is my question and my time. Thank you.
Ms. Thompson. Okay.
Mr. Pearce. Ms. Roman, you had mentioned that we had
750,000 homeless prior and this is going to add another
250,000. Of that 750,000, if we were to look at individuals, is
that 750,000 a static group of people or is it a rotation of
people in and out?
And then of the 250,000, if that 750,000 is stable and not
decreasing, of the 250,000 can we expect most of those then to
stay in the homeless category? Would you address that?
Ms. Roman. The 750,000 is a nightly count, so it is not
static. Over the course of the year, there are about 2.5
million to 3.5 million people who become homeless. The 250,000
is people who are very poor who became homeless. A million
became homeless, but the 250,000 are the people who were very
poor.
If those people get rent subsidy, no, they will not remain
homeless. None of them should remain in the homeless system. We
should be able to get all of them out. Rent subsidy should work
for a lot of them and some services. Some will need a little
more.
Mr. Pearce. Thank you, Mr. Chairman. I see my time has
elapsed.
Chairman Ney. Thank you.
Mr. Scott?
Mr. Scott. Thank you very much, Mr. Chairman.
Let me start by making sure we have our hands around the
accuracy of the size and scope of this problem. How many people
are we talking about that right now we need to get out of the
shelters into temporary transitional housing? Does anybody know
the answer to that question?
Ms. Roman.Number one, I would say there is a big problem
with data, and I addressed that in my testimony. I do not know
how you can do your jobs when you cannot assess, even to the
hundred thousand, how many units of housing are needed and
where.
Based on what little we do know, there are 50,000 people,
as I understand it from reports from the area, in Katrina
shelters in the affected areas as of 2 days ago. This is not
all the people in shelters, just those in the affected region.
In the affected region, there is no housing, as I
understand it. So people in shelter there could be given rent
subsidy, but they cannot get into any housing in the area. They
definitely need temporary housing, as I see it. So that is
50,000 who need temporary housing.
Then in the surrounding area, there was a fair amount of
vacancy before Katrina. We have looked at the number of units,
without respect to cost, that were vacant before the hurricane
from Texas to Georgia, without respect to cost. There were a
lot of vacant units, over 200,000. Now how many there are now,
I do not know because of course people have spread out to those
areas.
I would guess that the farther you get away from the
affected area, the more there is vacancy and the more
effectively rent subsidies are going to work. The closer you
get to the affected areas, the more help people are going to
need to get into housing as vacancy rates decrease. But until
you get some data, I do not know how you can adequately plan
for housing.
I think there is a way to get the data, which I addressed
in my testimony. We should implement such a strategy
immediately so that we can understand the dimensions of the
problem.
Mr. Scott. Right.
Ms. Roman. One thing we do know is that there are 50,000 in
the affected are, in shelter, who have nowhere to go even if
they had all the rent subsidy in the world.
Mr. Scott. Do we have any more people in the Astrodome?
Does anybody know that? Are there any more people in the
Astrodome in Houston?
Ms. Waters. Yes.
Mr. Scott. How many in the Astrodome?
Ms. Waters. I do not know, but you still have people in the
Astrodome.
Mr. Scott. So we have 10,000 in the Astrodome, is that
right? I think this is a part of our problem. We do not know
the size of the problem. We do not know the scope of the
problem. We are here in the dark without even a flashlight
feeling our way around. I think the most profound question that
was asked, that was put forward from you the panel was who is
in charge. Not only do we not know the scope of this problem or
the size of the problem, we do not have anybody in charge.
It is a rather pathetic situation, when we need a
Department of Housing and Urban Development, we are in the
process of that department being dismantled, with many of its
programs going over, proposed to go over to the Commerce
Department, over to Treasury. And the one model that we do have
that we ought to be using for this, HOPE VI, is not even going
to be reauthorized.
I would say we are in quite a mess. But let me just ask
this, not knowing the size of the problem, but we do know that
the first order of business is going to have to be getting
folks into transitional housing. I raised the point in my
opening comments because I believe that the most urgent need
now is two-fold: one, not to put a concentration, and I am
almost tempted to say concentration camp atmosphere.
I think that if you thought the Superdome looked pretty bad
by pushing a whole bunch of people into close quarters, what a
large mistake it would be to even begin to move the process of
building these huge trailer camps or transition housing all
clustered in together. I do not know what is being done to make
sure that does not happen. There are all kinds of safety and
health reasons and all of that that we have to look at.
The other thing I want to talk about is how important it is
to use this process as a way to provide job opportunities,
training, or efforts for the people who were directly affected.
I mentioned before, everybody wants to push this under the rug:
race, poverty, and class. That is the reason why the folks were
in the position in the first place. It is obvious that we
cannot dismiss that.
The American people, to our good fortune, for every survey
that has been mentioned, ABC-Washington Post did a survey where
they asked that question about race, where they asked that
question about poverty and poorness, and if these were white
middle-class people, would they be in this situation, and 76
percent of African Americans said yes; 21 percent of white
Americans say yes.
Well, my goodness, that ought to give us an opportunity to
respect that opinion and understand, as many of us have been
pointing out going forward, why we have to be sensitive to
these issues.
I am so concerned as we move into the houses, move into the
reconstruction, the approach of the Administration has been to
ignore this. The first move was to remove the Davis-Bacon
requirements that protects the prevailing wage so that people
can have that and not to require an effort.
I do not care what you call it, affirmative action, efforts
to make sure that these were African American people who were
displaced. Their homes were. Where is the program in there to
make sure that they are getting a piece of the action to
rebuild? Are there any efforts within your efforts as we move
forward rebuilding these communities to make sure that this is
taken into consideration?
Because if we do not, this will be a double slap in the
face to the people who are the most victimized by this tragedy,
if they again get victimized, be put into these huge
transitional areas that could become ghettoes, and then not be
allowed to take advantage of some of the job training programs
or whatever it takes.
If I may, Mr. Chairman.
Chairman Ney. I just want to caution, we are having vote up
and there are other members. I just want to caution you.
Mr. Scott. I just want to get a response from you in terms
of, has anybody given thought to how you can involve and make
sure that some of the poor, the lower-income folks who have
been affected in this storm will be able to participate in
terms of helping to rebuild in the housing area.
Chairman Ney. I have to hold this for a second here. The
gentleman is 2 minutes and 44 seconds over. If we have a
response, other members will be--
Mr. Scott. Okay, fine. That is okay.
Chairman Ney. But it is a valid question. We need a
response, but I do want to just caution on that. That is fine.
Mr. Davis, before we go on though, I just want to say one
thing. I think you raise an extremely valid point that has to
be addressed now. By the end of the day, there is no reason
that FEMA, HHS, HUD, or someone by 5 o'clock today we will
place that call, can either tell us how many people are in the
shelter or a guesstimate or "I do not know."
So you raised a point out of this that I think can be
answered by 5 o'clock today, some answer. How many? I don't
know. We need to pursue that today.
Mr. Scott. Thank you.
Chairman Ney. Mr. Davis.
Mr. Davis of Kentucky. Thank you, Mr. Chairman.
I think it is clear that because of the magnitude of the
disaster that there is going to be a creative menu of responses
dealing with various types of housing questions. I try to look,
particularly in my region, at practical and workable solutions.
Oftentimes, they are right in front of our eyes and just
sometimes the questions are not asked.
I think the idea of engaging folks in rebuilding their own
communities is a very, very important thing. But in places like
New Orleans, to bring in large numbers of temporary housing or
manufactured housing, trailers, et cetera, would constrain
transportation efforts, cleanup efforts.
At the same time to the ranking member's wise comments, I
think it is inappropriate to build what he called semi-
permanent colonies, literally creating camps in which you have
to provide utilities, build water infrastructure,
transportation access, things like that.
I think we may have in front of us an opportunity. I am
curious if you have explored--we have mobile home communities
all over the United States. In particular, one of the areas I
have interest in are existing slips of availability.
In my own district, Mr. Nathan Smith, who is a community
leader, operates a number of mobile home communities,
manufactured home communities throughout the Midwest. He made
the comment to us that he would offer existing slips in his
communities with any type of voucher or Federal reimbursement
from families.
One of the things I think that his perspective extends not
only regionally, but from a national perspective, that there
should be opportunity to encourage displaced families not to
end up in camps and clusters of folks with shared experience
and not necessarily being part of a community, but encouraging
them to move into established stable communities, versus a mass
relocation.
Mr. Roberson, particularly, I was wondering if you might
comment on what you think the Government should be doing or is
doing on this front.
Mr. Roberson. Thank you for that question.
We have gathered the information from all of the community
and park operators that are within the affected area and the
adjacent regions and given that to FEMA so that they can
understand what potential they have for placement or siting of
homes there.
I think that really in reality that that is a decision that
FEMA and probably others in the Government are going to have to
make to determine how are you going to displace people. Are you
going to keep them close to their home or are you going to put
them in other areas?
I cannot tell you where to put them, but I can tell you if
you need them built, we will get them there.
Mr. Davis of Kentucky. I think you may want to have a
backup plan, since FEMA appears to be somewhat stressed at the
moment working with HUD and other housing agencies to make sure
that word gets out. I just think it is a great idea to put
people in to established communities.
One other quick question, just open to the group. In terms
of reconstruction, particularly from a homebuilding
perspective, I see just from my own experience in industry that
possibly billions of dollars of this reconstruction money could
end up just paying Federal bureaucrats and State and local
bureaucrats on regulatory compliance that has nothing to do
with sound science. Particularly, the way I read current EPA
and Corps of Engineers' regulations, the cleanup will be
illegal in New Orleans, to do it in a timely manner.
Are there regulations from a practical perspective that
without compromising environmental stewardship also encourage
more rapid rebuilding? Do you think it is appropriate to waive
or modify local and State code regulations, as well as some of
the Federal regulations from an EPA, Corps of Engineers
standpoint, regarding environmental mitigation, particularly
under the Clean Water Act?
Mr. Wilson. I think particularly now that the whole city of
New Orleans is wetlands, so we are going to have to do some
mitigation there to rebuild on the wetlands. I think from a
local level that the State and local municipalities can work on
removing the barriers to housing in the processing of building
permits, the cost of building permits, the cost of impact fees
that are imposed upon that create affordability to housing.
All sorts of those things can be done at the local level. I
think we need to look at storm water and the EPA rules in
rebuilding these communities.
Mr. Davis of Kentucky. I appreciate your group's advocacies
with us on the committee as well to remove the ephemeral stream
language from wetlands legislation because what I think it is
going to do is create an untenable situation for
reconstruction, to keep working families out of homes.
I yield back my time, Mr. Chairman.
Chairman Ney. Thank you.
Ms. Carson?
Ms. Carson. Do you advocate relaxing some of the
environmental rules? New Orleans has been saturated with dirty
water, et cetera. If somebody goes in to rebuild, do you
advocate the builders not having to abide by the rigid
environmental criteria in order to build when they have already
been affected?
Mr. Wilson. Congresswoman, what I am saying is, the city of
New Orleans, it seems to me, should be determined a wetlands
like the rest of the portion of the State. It is 12 feet below
the water level of the ocean, 12 feet below sea level. You are
going to have to look at that.
Would I be allowed to build in another State in another
location that was prone to flooding? They would probably make
me build the floor two feet above the 100-year flood plain. So
I think you have to address those issues in the city of New
Orleans in the enforcement of Federal regulations as it affects
wetlands and how you are going to deal with that.
I certainly do not subscribe to removing any environmental
laws or anything like that, but if you want to rebuild New
Orleans and Mississippi and Alabama in these areas that have
been affected, you are going to have to reduce Government
regulations to help people get back in their homes where they
came from.
Ms. Carson. I yield back, Mr. Chairman.
Chairman Ney. Mr. Sanders?
Mr. Sanders. Thank you, Mr. Chairman.
I want to thank all of our panelists for being here with us
today.
Ms. Roman mentions that on any given night, there are some
250,000 Americans who are homeless, and that is before Katrina.
So obviously what we are seeing is a crisis in America being
made worse with the hurricane.
What I would like to get some thoughts on from our
panelists is, given the housing crisis that we had before
Katrina, given the fact that as I understand it that in the
course of the year some 2.5 million Americans will experience
some degree of homelessness, given the additional major
problems that Katrina is causing in terms of homelessness, what
as a Nation are we going to do to finally address the huge
housing crisis that we have in America for low-income people?
Now, it seems to me pretty clearly, especially with poverty
increasing in America, that the Federal Government is going to
have to play a dramatic role if we think that children should
not be sleeping out on the street. Again, Katrina makes the
need to respond even more dramatic.
Let me start off with Ms. Roman.
If this Congress actually believed that we should not have
homelessness, if we actually believed that low-income workers
should not be asked to spend 50 percent of their income on
housing, if we actually believed that this country should be
building large amounts of affordable housing and, as Mr. Scott
said, put people to work at good wages in building that
housing, if by some chance Congress thought we should do that
rather than giving tax breaks to billionaires, what should we
be doing?
Ms. Roman?
Ms. Roman. I think it is important to use this opportunity
to point out that tens of thousands of people are vulnerable to
any kind of disaster because of their poor housing and what
kind of assistance they need.
Of course, we have millions of people who are at risk of
homelessness, 750,000 a night, 3 million a year. We need a
significant investment in housing to help people stabilize
their lives.
Mr. Sanders. Do you believe that the Federal Government
should be pouring substantial sums of money into addressing the
housing crisis?
Ms. Roman. Yes, I do.
Mr. Sanders. Okay.
Mr. Alvarez, what do you think?
Mr. Alvarez. Yes, sir.
Let me just briefly give you a description of San Antonio.
We support 25,000 families currently. We have approximately
23,000 families still waiting for assistance.
Mr. Sanders. Almost as many waiting as are in public
housing.
Mr. Alvarez. That is right. And we received 13,000 evacuees
into San Antonio. When they arrived, we only had 75 units of
public housing that they could go to.
Mr. Sanders. And I suspect there was resentment on the part
of some of the locals.
Mr. Alvarez. Absolutely. So I think and NAHRO's position is
that we need to create a production program and focus on
housing becoming a fundamental component of decent, safe, and
sanitary living anywhere in America.
Mr. Sanders. I should mention to you that I introduced,
with over 200 cosponsors, a National Affordable Housing Trust
Fund last year, which, unfortunately, despite widespread
bipartisan support, did not get through the leadership.
Let me ask Ms. Daly, what do you think?
Ms. Daly. Mr. Sanders, I think we need a lot of tools, as
Mr. Alvarez and others have mentioned. We need many, many
tools. But the thing that is lacking right now is a production
program for very low-income families with children.
Mr. Sanders. My understanding is that we are building
almost no low-income housing. Am I correct?
Ms. Daly. For very low-income families with children, it is
very low. We are still building some 202 housing. There is
still low-income housing being created because of the low-
income housing tax credit. But those programs have not produced
increases in housing for the lowest-income families with
children. We do not want to concentrate them in public housing
projects. We need to figure out how to do that.
Mr. Alvarez's members and nonprofit organizations across
the country that have a lot of experience running the 202
program for elderly and disabled, could duplicate that
experience for families with children, but it will not happen
without the Federal investment.
Mr. Sanders. The bottom line is we need massive housing
production for lower-income people.
Ms. Miller?
Ms. Miller. Sir?
Mr. Sanders. Yes. What do you think?
Ms. Miller. There is definitely a very strong need for
affordable housing, not only in our States, but in the entire
country.
Chairman Ney. I am sorry. The time has expired, and I need
to move on to two members prior to the bell.
Mr. Sanders. Thank you, Mr. Chairman.
Chairman Ney. Yes, Mr. Cleaver and Mr. Clay?
Mr. Cleaver. First, a very short statement. I am concerned
about the relaxation of any environmental laws. We are setting
people up to be flooded again. If we are losing 35 to 40 miles
of wetlands a year, and the wetlands soak up the storm waters,
we are setting the people up again. Of course, I think that is
tragic.
My question is this. Having grown up in public housing and
having seen in Israel, the State of Israel, bringing in the
Ethiopian refugees and placing them in some prefabricated
housing, where the Russian immigrants, the Jewish Russians who
have come to Israel were given, let's use the term "public
housing" in the three major cities, and then when the
Ethiopians came, they moved them in, and there was chaos,
chaos.
Don't you believe that if we start bringing the evacuees
into communities where there is existing housing, whether it is
trailer parks or public housing, that we are going to have some
problems, some serious problems?
Thank you.
Anybody else?
Mr. Clay. No one wants to tackle that one, Congressman.
Let me just real quickly, may I thank Ranking Member Waters
and the chairman for allowing me to sit in on the hearing.
Just one quick question for Mr. Roberson.
We have far in excess of 250,000 homes destroyed by the
hurricane. We have over 1 million people displaced. We have
shortages of skilled labor, lumber, bricks, and many other
building materials. You have many suggestions for alleviating
these problems. We also have high unemployment among the
citizens that live in those areas, many of them skilled
construction laborers, plumbers, electricians, and the like.
Will they be hired? Will you have a priority on hiring,
with the requisite skills that you are looking for? Go ahead.
Mr. Roberson. Certainly, we are always looking for the
opportunity to hire skilled labor in our factories. I do not
know whether these people will be located adjacent to be able
to be hired, but we are always looking for qualified people.
I think what I was trying to get to earlier today, but ran
out of time, is that as you look at the rebuild of the Gulf
South region there and the city of New Orleans, one of the
things manufactured housing can bring to the table to help
assist that area is that because you can have the combination
of off-site and on-site construction, with product that is
aesthetically suited for the environment that it is going to be
placed in.
That is certainly capable in a factory-built environment
because you can then utilize the resources of local employment
for some of those trade areas, and you can use less-skilled
labor because part of those trades move into a factory
environment that we can speed up the process, that we can help
people get into housing with more affordability, that that we
can help New Orleans recover faster if there is a role played
by manufactured housing, and we look beyond the fact that we
all think that a house trailer is what we do not want. This
industry has tremendous capabilities to build product that is
very suitable, and we can do it quickly and we can do it more
affordably than site-built.
One of the major problems, though, that we still need in
that regard to do it is we have to look at two issues: one, our
outdated zoning restrictions in many areas and another is we
really need Congress to look at sponsorship through the GSEs
and FHA financing to just give us equal footing with site-
builders. The GSEs were started to give priority for affordable
housing. We make the most affordable housing, but we have the
most onerous underwriting standards, the toughest appraisal
standards. We are discriminated against.
We have people today that cannot buy a manufactured home,
but they will finance a site-built home. Something needs to
change about that. I do not know how to do that unless Congress
steps in. I believe that if you will look at those issues, you
can see manufactured housing can play a vital role over time to
the rebuild of that Gulf Coast and to solving a lot of the
other affordability issues for America in general. We have
raised all these issues and we have a big piece of the pie that
needs to be looked at, but it is being overlooked.
Mr. Clay. Thank you for that response.
Thank you, Mr. Chairman and Ranking Member Waters.
Chairman Ney. Thank you.
I want to thank the panel. Again, we were going to try to
get an answer today on the numbers. I think it is a very valid
point. We want to work with you, too, in a rapid way with your
issues. I thank you so much for your time.
When we come back from the two votes, we will go on to
panel two.
Thank you to everyone.
[Recess.]
Chairman Ney. We will begin with panel two.
The first witness is Clanton Beamon. Clanton Beamon is the
executive director of the Delta Housing Development Corporation
in Indianola, Mississippi. The corporation was formed over 30
years ago as a response to a tornado which leveled the
Mississippi delta town of Inverness, leaving hundreds homeless.
He is testifying today on behalf of the National Rural Housing
Coalition, an organization which promotes better housing and
community facilities for low-income rural people.
Jeff Brodsky is the president of the Related Management
Company in New York City. He oversees the company's property
management activities. Mr. Brodsky is testifying today on
behalf of the National Multi Housing Council and then National
Leased Housing Association, whose goals are the provision and
maintenance of quality affordable rental housing for low-and
moderate-income Americans.
Judith Kennedy is the president and CEO of the National
Association of Affordable Lenders. The association's 200-member
organizations are comprised of banks, thrifts, insurance
companies, community development corporations and pension funds
committed to increasing private lending and investment in low-
and moderate-income communities.
Michelle Norris is senior vice president of development of
National Church Residences. She is testifying on behalf of the
American Association of Homes and Services for the Aging, whose
members sponsor and manage affordable housing for seniors.
I want to welcome all the witnesses.
We will begin with Mr. Beamon.
STATEMENT OF MR. CLANTON BEAMON, EXECUTIVE DIRECTOR, DELTA
HOUSING DEVELOPMENT CORPORATION, INDIANOLA, MISSISSIPPI,
TESTIFYING ON BEHALF OF THE NATIONAL RURAL HOUSING COALITION
Mr. Beamon. Thank you. Mr. Chairman, we have all been
horrified and humbled by the extent of the destruction wrought
by Hurricane Katrina on our southern coastline, particularly in
the States of Mississippi, Alabama, and Louisiana. We pray for
all those affected by this tragedy.
In my home State of Mississippi alone, more than 115,000
evacuees are in shelters or temporary locations arranged by the
Red Cross, and many more are in hotels and private homes.
Right now, the pressing need is for more temporary housing,
both for displaced families and for relief workers. As of
Tuesday, September 13 in Jackson, 1,250 trailers or mobile
homes had arrived at a central staging area; 135 were ready for
occupancy; and 20 were already homes to families in hard-hit
Biloxi, where at least 5,000 homes and buildings were
destroyed.
We have a lot of work to do before we meet the space goal
of 10,000 temporary shelters for displaced families and workers
by the end of the month. In response to Hurricane Katrina, we
at Delta Housing Development Corporation, like many housing,
religious, and other organizations across the region and the
Nation, are trying to do our part. On September 1, DHDC had a
total of 18 vacancies.
We contacted USDA Rural Development and requested
authorization to waive standard requirements of waiting lists,
security deposits, credit checks, and income verifications in
order to place Katrina evacuees on a priority basis. I received
word the same day that the national office of Rural Housing
Services had already sent directives to its State offices with
instructions on how to assist Katrina evacuees in their
financed housing units. We have since filled our 18 spots.
Our next contact was National Equity Fund and Mississippi
Home Corporation to get authorization to house the evacuees in
our low-income housing tax credit development where we had six
vacancies. The request was approved immediately.
On Friday, September 9, 2005, we received notification from
the Foundation of the Mid-South that Delta Housing had been
designated to receive funds from the Walton Family Foundation
and disburse it to families and churches that are providing
housing and food to the evacuees.
Additionally, we have been collecting donations from local
churches to assist families with utility deposits, collecting
food and clothing, and partnering with other groups such as the
local Community Action Agency to provide families with rental
assistance.
I would like to share with this subcommittee my first
encounter with a family displaced by Hurricane Katrina.
On Friday, September 2, I met with Doris, a single mother
and her 10 children. Through our conversation, I determined she
was living in an apartment owned by the New Orleans Housing
Authority and supported by Section 8. I reasoned that there was
a good chance she would receive another Section 8 voucher at
some point in the future, and I invited her and her family to
stay in one of our four-bedroom apartments that we had vacant.
I told her we were going to have to walk out on faith in hopes
that help would come later. She was very appreciative and very
emotional, and so was I.
While Mother Nature does not know rich from poor when she
unleashes her fury, it is undeniable and troubling that the
majority of those affected by Katrina were among our Nation's
poorest individuals and families even before the storm hit.
The vast majority of the people affected were living in
poor, primarily black, non-metro counties and suffered from a
lack of affordable, decent housing. In fact, before Katrina,
two-thirds of rural America's occupied substandard housing was
located in the 16 States that make up the Southeast and
comprise Alabama, Louisiana, and Mississippi. Over 40,000
households live in units without adequate plumbing, and over
100,000 people rely on USDA direct and guaranteed loans and
other assistance just to remain in their homes.
You have my written testimony, and I will just stop and
make some general observations on what is needed next.
In our encounter with the evacuees in Mississippi, the most
pressing need right now is furniture. We have vacant units to
put them in, and that is good for a person that had nowhere to
go, but you put them in an apartment with only a stove and
refrigerator. That means we have a long way to go.
Hopefully, FEMA and others and private sources can make
some kind of arrangements to make available to these evacuees
furniture, not just blankets and inflatable mattresses and
mats, but at least at a minimum box springs and mattresses.
Of course, we need to look at some other recommendations.
Before the storm, over 40,000 households in the three States
lived in units without adequate plumbing. USDA currently has
50,000 low-income direct loan borrowers in the hardest-hit
areas. There are approximately another 50,000 recipients of
guaranteed loans, and about 10,000 low-income assistance
recipients are in coastal areas. Displacement is expected to be
widespread.
Obviously, we need better coordination between Federal and
State agencies and outreach by such agencies as FEMA, HUD, and
USDA to get families helped now. That help should include
Section 8 vouchers, Rural Housing Service vouchers, and in
addition programs like RHS Section 523, supervising and
technical assistance grants can be an important way to provide
support to local nonprofit community development organizations
in their work on the ground.
The need for greater assistance is particularly acute in
rural areas, and any assistance should reflect the immediate
need and a long-term commitment to rebuilding. In the short
run, the goal is to repair up to 10,000 units of housing, get
families 5,000 vouchers, and provide sources for repair of
multi-family projects. The long-term goal is to finance the
development of over 20,000 units of single-and multi-family
housing for rural areas of States hit by Katrina.
With that, Mr. Chairman, I am honored to have had the
opportunity to come before your subcommittee to appeal for some
assistance for people that are very desperate. We all want to
help.
Finally, you know, God decided to give us something that is
going to probably rearrange our way of thinking for a long time
to come.
Thank you very much.
[The prepared statement of Clanton Beamon can be found on
page 73 in the appendix.]
Chairman Ney. Thank you.
Mr. Brodsky?
STATEMENT OF MR. JEFFREY I. BRODSKY, PRESIDENT, RELATED
MANAGEMENT COMPANY, LLC, NEW YORK CITY, NEW YORK, TESTIFYING ON
BEHALF OF THE NATIONAL MULTI HOUSING COUNCIL AND NATIONAL
LEASED HOUSING ASSOCIATION
Mr. Brodsky. Chairman Ney, my name is Jeff Brodsky and I am
the president of Related Management Company. My division owns
and manages 25,000 apartments in 135 locations in 11 States of
affordable and market-rate housing. Today, I am representing
the National Leased Housing Association, the National Multi
Housing Council and the National Apartment Association.
I commend you, Chairman Ney, for your leadership, and we
thank the members of the subcommittee for your valuable work
addressing the important issue of housing the hurricane
evacuees.
In particular, we want to commend you, Chairman Ney, for
convening the recent roundtable discussions on the issue of the
hurricane and what the housing sector can do to assist.
Moving displaced families from temporary shelters into more
suitable housing is the first step in rebuilding the thousands
of lives affected by the storm. These are extraordinary times
that call for both the private sector and Federal, State, and
local governments to respond accordingly. The apartment
industry stands ready to aid in those efforts.
However, our ability to meet these housing needs is
severely restricted because thousands of the apartments
potentially available to Katrina's victims receive some form of
Federal support and as such as subject to Federal regulations
that restrict the use of the properties and impose time-
consuming administrative burdens on the property owners prior
to leasing these units.
Therefore, we are requesting as applies to Katrina evacuees
a temporary emergency waiver of all program requirements for
properties funded with the proceeds from multi-family tax
exempt bonds, properties financed by the Federal Housing
Administration, properties that receive HUD subsidies or Rural
Housing Service assistance, or are subject to Treasury rules.
A broad waiver is necessary to maximize the number of units
that can be made available to those in need. Otherwise, many of
the properties would remain off-limits due to regulatory
restrictions. It is not unusual for an affordable housing
development to blend the benefits of IRS tax exempt financing,
FHA mortgage insurance, HUD rent subsidies, soft-debt source
from community development funds, and real estate tax
abatements from local communities in the same property.
Unfortunately, distinct occupancy restrictions are applied
to the properties for each of these program resources. The
apartment communities covered by these Federal programs include
millions of market-rate and affordable units owned by private
for-profit and nonprofit organizations and public entities. The
programs are too numerous to list and extend from mortgage
insurance to mortgage interest subsidies, from HODAG to HOME to
HOPE VI, from Section 8 to Section 236 to Section 515 and
Section 42.
To free up the supply of housing for hurricane victims, we
request a broad comprehensive waiver of all program rules for
Hurricane Katrina evacuees. This emergency temporary action
will allow the industry to respond to the crisis in a more
immediate and effective manner.
A step was taken toward that goal on September 9 when the
IRS issued Notice 20569. The notice authorized State housing
credit agencies to permit temporary housing of individuals
displaced by Katrina in low-income housing tax credit
properties and temporarily suspended income limitations and
non-transient requirements. While this is a good first step, it
does not go far enough.
For example, the notice specifically authorizes a waiver of
occupancy limits in creating a temporary housing period not to
extend beyond September 30, 2006. However, the actual temporary
housing period is to be determined individually by dozens of
separate State housing credit agencies, and they in turn may
determine the appropriate period for temporary housing for each
individual project.
In effect, despite the good intentions of the IRS, the
owners of thousands of low-income tax credit apartments cannot
even now list their apartments as available, as they have to
wait for each State and local agency to issue their individual
guidance.
In order to receive the benefit of these waivers, State and
local participating agencies must adopt the Federal waivers in
the form they are issued as soon as possible. Further, State
and local agencies must adopt parallel waivers for their own
non-Federal program occupancy limits if property owners are to
effectively place these units into use.
As you are aware, a significant number of privately owned
properties with Section 8 assistance, as well as public housing
units, were destroyed by Hurricane Katrina. The funding of the
housing sources and subsidies has already been appropriated. We
urge Congress to ensure that Section 8 project-based assistance
contracts are frozen or suspended to prevent them from expiring
while the properties are being rebuilt and, if necessary,
facilitate the transfer of such contracts to other properties.
Affordable housing providers of both privately and publicly
owned development have an inherent capability to address the
immediate housing needs of the evacuees. They are trained and
experienced in serving the needs of diverse occupant groups.
They routinely partner with Government agencies and have
longstanding relationships with local faith-based, nonprofit
and government social service providers that may ease the
transition of families who want to enter new communities. Our
resources are a natural fit for this urgent housing need, as
long as regulatory obstacles are removed.
Building owners want to do the right thing. We are ready to
accept the business risks and potential cost inherent in the
outreach, including the unclear funding of rent, discounted or
not, the inability to perform typical background checks on
occupants, and resistance from financial partners.
However, we cannot do it alone. We respectfully request the
Congress pursue the removal of Federal program barriers to our
participation that currently do not allow owners to respond to
this crisis efficiently and quickly.
Thank you for the opportunity to express our views.
[The prepared statement of Jeffrey I. Brodsky can be found
on page 83 in the appendix.]
Chairman Ney. Thank you.
Ms. Kennedy?
STATEMENT OF MS. JUDITH A. KENNEDY, PRESIDENT AND CEO, NATIONAL
ASSOCIATION OF AFFORDABLE HOUSING LENDERS
Ms. Kennedy. Thanks so much.
As usual, after one of your provocative roundtables, the
vanguard that is the NAAHL membership got together to discuss
some of the challenges you have thrown to us. Our membership
was initially banks, but in addition to the major banks, our
members now include the 50 blue-chip nonprofits that lend and
invest in low-and moderate-income communities.
We much appreciate the experienced staff on both sides of
the aisle who have been bipartisan in supporting our efforts to
get some order out of this chaos.
In essence, I have to applaud your leadership, but I almost
feel like the committee is asking you to reinvent a wheel, a
wheel that worked, and you know it from your own disaster
experience in the Ohio Valley, and I know it.
II would say if history is any guide, West Virginians want
to go back to the hollows; Ohioans want to go back to the river
valley; and, of course, southerners will want to go home.
But the difference between this disaster and previous
disasters is that by now in other disasters, 2 weeks after
displacements, families would have met with a Federal counselor
who would have told them what they were entitled to as
citizens. They could have made the decision about whether or
not they wanted to stay near Louisiana in a mobile home or
relocate to their aunt's house in Utah for the duration. Once
they got into a stable situation, they would look for permanent
housing. And that is when, of course, all of the vouchers come
into play.
I will say that you definitely asked the right questions
for this hearing because in addition to waivers, what I learned
is that there are units available in parts of the country, and
FEMA has finally as of Tuesday provided some temporary housing
vouchers.
In Alabama on Tuesday, once the word went out that FEMA
would pay for rent up to 90 days and utilities, I am told that
immediately landlords drove to Baton Rouge, Louisiana, to the
mass shelter and asked people if they wanted to relocate to
Alabama.
So not only do citizens have the right to make the decision
about where they want to go temporarily and permanently, the
private sector will respond if the waivers that Mr. Brodsky
described are provided and FEMA cooperates.
So we are going to say, do not rob Peter to pay Paul.
Obviously, this monumental disaster requires additional
resources. It is not fair to take families off a waiting list
in Boston because of an influx from Louisiana, but with
reliable voucher funding and emergency vouchers for disaster
victims, the private sector will respond.
There are minor statutory changes you could make that could
have a significant impact. One I learned about from the
recommendations of the Comptroller of the Currency. Some banks
are already at a statutory maximum of 10 percent invested in
what are called "public welfare investments." This ceiling has
not been increased since 1992. If you take it up to 15 percent,
that will help a lot of banks to respond to this crisis. So
this is an important and noncontroverisial provision.
Another suggestion is to enact quickly the multifamily
affordable housing goals in the committee's GSE bill. I give
you great credit for these and then Senators Santorum, Reed,
and Sarbanes agreed with it on the Senate side. The housing
goals for Fannie Mae and Freddie Mac are revised in your
proposed GSE bill to focus them on low-and moderate-income
housing. What I have learned from my members in the week since
your roundtable is the expectation is that if we thought the
needs for private capital were huge before this disaster, the
needs are geometrically greater now.
Let me use one example. A nonprofit comprised of banks from
Alabama has been able to do $50 million worth of low-income
housing in the last 5 years.
I have to disagree with something that was said on the
prior panel. Housing is being built for very low-income
families. My nonprofit members have about 90 percent of their
units affordable to people under 50 percent of area median
income, but they have no national secondary market to sell
those loans to. So if Alabama were to be able to sell loans to
Fannie Mae and Freddie Mac, that is $50 million tomorrow that
would be available with additional vouchers to make new housing
in Alabama.
So those are I think noncontroversial simple changes you
can make that will have enormous impact.
There are definitely other pending bills proposing
resources that would make a huge difference. Mr. Reynolds and
Mr. Cardin have introduced in the House the Renewing the Dream
tax credit bill that Senator Santorum has introduced for three
Congresses now. It subsidizes the gap between the cost to
rehabilitate a house and what the family can afford. It would
make a huge difference in these disaster States where the cost
of land is so low.
You have asked us, and thank you for doing it, what to do
to make relief efforts more efficient and effective. I think
this has been well explained. I want to leave you with a huge
consideration that came out of your roundtable. What will be
the impact of rising energy costs on providing housing
assistance in the short term and in the long run?
What I learned from the southerners is that although they
rely on electricity now, they really believe in Alabama,
Louisiana, and Mississippi that once the cost of fuel oil and
natural gas starts to increase, their low-cost electricity will
necessarily be bid up by the northern States where people are
switching to electricity because they cannot afford the oil and
the gas.
So what you are looking at in the disaster-stricken States
is energy costs tremendously increasing; obviously construction
materials and labor costs are also increasing. But honestly, my
members see this cost pressure affecting the entire country.
They see that the cost of production and the cost of
maintaining affordable housing is going to be higher.
So let me give you one simple example of this impact. Right
now, there are developers in the pipeline with tax credits and
Section 8 vouchers ready to go to build housing affordable for
low-income families, elderly and disabled. Chances are that
some of those deals will no longer be feasible.
Deals that are currently pending, using already-
appropriated Section 8 and tax credits, are probably going to
need to go back to the drawing board and get more subsidy. We
are going to need your help with that.
We look forward to working with you both on this emergency
issue where FEMA just needs to go back and resume what HUD was
doing magnificently before to provide emergency housing, and on
providing permanent housing, where obviously resources are
going to be the key.
[The prepared statement of Judith A. Kennedy can be found
on page 139 in the appendix.]
Chairman Ney. Thank you.
Ms. Norris?
STATEMENT OF MS. MICHELLE NORRIS, SENIOR VICE PRESIDENT OF
DEVELOPMENT, NATIONAL CHURCH RESIDENCES, TESTIFYING ON BEHALF
OF THE AMERICAN ASSOCIATION OF HOMES AND SERVICES FOR THE AGING
Ms. Norris. Thank you, Mr. Chairman.
My name is Michelle Norris. I am here on behalf of the
members of the American Association of Homes and Services for
the Aging.
AAHSA serves 2 million people every day, 5,600 facilities
across the country. It represents mission-driven nonprofit
organizations. We have facilities across the continuum that
were impacted by the hurricane and the flooding.
My real job is as senior vice president of development for
NCR, National Church Residences. We are one of the Nation's
largest nonprofit developers and managers of affordable
housing. We are in Columbus, Ohio. We have properties in your
jurisdiction.
In addition to building affordable housing throughout the
United States in 26 of the States, we also have a nationally
recognized social service program and we serve the mission of
supportive housing for seniors and also for families. We have
service coordinators in almost every one of our facilities
funded by either Federal or local grants.
My written testimony speaks about the seniors that have
been affected, but I can also tell you because we have families
that most of our recommendations affect the families that are
hit as well. Since many people have already spoken and told
you, a lot of the recommendations in my written testimony have
so many technical recommendations, I thought I would kind of
try to wrap up with a couple of key points that I have heard
and I feel like we have seen.
The first one is one that was already mentioned by Mr.
Brodsky. That is that regulations right now can stop good works
from happening, pure and simple. There are regulations that are
still out there that are stopping it from happening. I can give
you one example. We have a senior high-rise that was 25 years
old, senior Section 8, and we just went through a $6 million
rehab. Because of that, we had 40 units that were set aside
that had not been occupied yet. Wow, this is great. We could
actually help seniors move into a project-based Section 8
community right away.
When we talked to our HUD office, the answer was we cannot
do that because they cannot use it unless you can verify then
that they are going to be permanent residents; they cannot use
the Section 8.
Chairman Ney. I am sorry. Where is the unit at?
Ms. Norris. The unit is in Georgia.
So again, the issue is that they do not want to use the
project base. They want to make sure there is a secondary
voucher fund that is available for the residents, again a
conflict between FEMA and HUD in terms of who is going to pay
for those temporary vouchers.
The second example I have is one that was also alluded to
by Mr. Alvarez. That is, we have got to move quickly. The
regulations, of course, set that aside for a minute.
There is a great example in Columbus, Ohio, that I think
this is happening just like in San Antonio. Agencies got
together in a place called the Piedmont Center. CMHA came, the
housing authority, all the service providers, and they did a
one-stop shop. They are getting people in. They are helping
them enlist. They are getting them FEMA-registered. They are
going through the whole process, including getting them to walk
out with a voucher.
The only problem is we have 3,500 people that have already
arrived in Ohio. They have 100 vouchers available at CMHA. So
their concern, again, is if they start over-leasing on their
vouchers, then who is going to pick up that bill? It is just an
undecided answer, so we cannot quickly help people move.
The third example I have is what NCR does and what AAHSA is
all about is service-enriched housing. The folks that are
moving into these facilities right now, we took people that
came out of that Piedmont Center and we moved them to one of
our properties, actually four families. We moved them into our
property, but we gave them the unit and they have nothing. They
have absolutely nothing. They have a 3-month-old and they have
two 18-year-olds. They have nothing but the clothes on their
back--no furniture, no plates for the kitchen, nothing.
So we are working very hard with our social service folks
to help those people re-establish their lives. They have no
connection with their families, and they need to be able to get
stability. There are some amazing stories that are going on out
there, but they are one at a time.
In addition to the housing, one of the other gentlemen
asked about how do we help these people. It is about also
getting them services. There is a great program that HUD has
called Service Coordination. If we could expand that, allow it
to be taken and moved and help these folks, that would be a
fabulous way of doing it.
So there is a lot of stuff that is out there that is good.
I see it happening. It is happening at the local levels. But
the end answer is that people are still waiting on saying,
well, how is FEMA or HUD going to help us fund these
initiatives that people are doing? With that, I can tell you
that there are a lot of folks out there, especially in the
nonprofit world, that are very much willing and wanting to
help. We have the mechanisms, and we are very thankful for this
opportunity.
Thank you.
[The prepared statement of Michelle Norris can be found on
page 153 in the appendix.]
Chairman Ney. I wanted to mention, the roundtable has been
mentioned, and I appreciate your comments on it. I did the
roundtable on this because the roundtable is less formal. Some
people said an agonizing 3 hours, but you know, that is okay.
People are in trauma. I think people appreciate the
roundtables. We had bipartisan participation.
But the roundtable allows you to have in a setting, one
person will say one thing, and then they come back and somebody
else can merge on that. You went back to your members. You get
ideas that can come to us. So I think the roundtables were
productive. The hearings are good. You get it on the record and
we can help each other to help people.
I think out of the roundtables it also wakes us up to the
fact, and some statements you made today, as you find these
things out, please, our staffs work together completely,
Democrat and Republican, on these issues. When you find out,
call, because you are probably going to find out before we find
out. We are not going to get a call from the executive
bureaucracy saying guess what, we cannot get dishes to people
today. We are not going to get those calls. So if you can
continue to do that, that is going to help us to help people,
and I thank you for that.
I have a couple of questions, starting with Mr. Beamon.
I know Mississippi has had devastation, as have Alabama
and, of course, Louisiana. We have heard a lot of conversation
obviously about the shelters in Louisiana, New Orleans, and the
surrounding areas.
Is the same situation occurring in Mississippi or not? Do
we have any idea of how many people are in shelters? Are the
same problems occurring? Do you have any comment on that issue?
Mr. Beamon. Yes. You have people in shelters throughout the
area that was devastated. As for Jackson, the State capital,
there were hundreds of people housed in the coliseum. We had a
nursing home, an assisted-care facility, that was without
electricity. That got quite a bit of publicity because the
people were saying, the patients were saying that everybody
around them had electricity and they could not figure out why
they did not have it. But there are shelters in other areas
other than Jackson, and they had the same problems.
Chairman Ney. You also were saying, though, that there were
a certain amount of units available and open that Section 8
could utilize. Is that correct?
Mr. Beamon. Very few.
Chairman Ney. Very few.
Mr. Beamon. You have to understand, we had a severe housing
shortage in our area before Katrina, so it is even worse now.
But we had 18 units available on September 1, and just in
Indianola, which is 270 miles from Gulfport, and 350 miles from
New Orleans. People stopped all the way from those areas until
they got to us, and we only had those 18 units. For a couple of
days and nights, I probably was the most popular man in town.
At least we had something.
But you still have several hundred people in the area
living with families and in hotels paid for by FEMA and the Red
Cross. But we still have a serious, serious problem. Most of
our school districts, this is another area that we are going to
get tested on. Most of our school districts are underfunded
anyway. Now, you have people in the area now having to start
school. We have the same problems, but not of the magnitude
that some areas have.
Chairman Ney. Thank you.
Mr. Brodsky, I think you made a statement about broad
waiver authority. I was just asked a question as we broke for
the votes about that. The statement came out of the White House
about waivering.
The only thing I was responding to out in the hallway when
I was talking to people who were questioning me on this, almost
a case-by-case--I guess I am speaking as a Member of Congress--
a case-by-case waiver in the sense, not person-by-person, but
issue-by-issue.
My definition of "broad" is that the executive says we are
waivering everything, and how do we know that their waivering
is the right thing to do for the short term and long term.
So, for example, I know emergency vouchers have to happen
yesterday. I know that. Congress has to move on that. The magic
number, what it is, I do not know.
But when you say "broad waivers," what areas are you
talking about?
Mr. Brodsky. Thank you, Mr. Chairman.
The primary issue has to do with who is allowed to occupy
units. Every single funding methodology that comes from the
Department of Agriculture from Rural Housing through HUD
programs through the IRS programs, all of them provide some
form of support in return for a restriction on who is occupying
the unit.
All we are saying is take away those restrictions so I can
put evacuees in there, because I cannot verify their income. I
cannot verify who they are sometimes. And make it as clear-cut
and as broadly characterized as you possibly can, that you do
not have to follow all these rules on who is allowed to occupy
the unit. There are too many to list.
What is happening is the Federal, to some extent the IRS,
has issued guidelines relating to one program, but there are
dozens of programs. They apply to market-rate housing and they
apply to affordable housing, more so to affordable housing,
clearly.
Examples of the kinds of things that go to occupancy rules,
there are tenant-selection plans; there are waiting list
programs; there are preferences that are in certain documents;
there are income restrictions; there are verification formats;
there are reporting guidelines. I could spend days just
identifying what all the requirements are.
Just waive anything that relates to who is allowed to
occupy the space on a temporary basis for a determined amount
of time. The impression that I would provide for you is simply
if the IRS has said that is available to them under certain
limited waivers through September 30, 2006, that allows the
industry to put people in there and basically say, you can stay
here. I would suggest that if it gets to 2006 in September and
they are then qualified to follow all the program guidelines,
that they could apply and stay, because after all, we are
trying to provide resources for them to be stable households,
not transitional households.
Chairman Ney. So it would be a waiver with the condition
that they are a victim of a disaster in one of the States.
Mr. Brodsky. It would be characterizable evacuees, and
there are a number of ways that the Federal Government can
characterize what is the definition of an evacuee, and there
are different issues coming out of different agencies at the
moment to define that. But let the owners then take all the
rest of the risks.
We do otherwise have other risks, but the point is get the
barriers out of the way so that we can then say, okay, there is
a Web site, hurricanehousing.com, that has not been promoted.
That is a national Department of Homeland Security-designated
Web site for owners to put on there where they have apartments
available nationally. But the owners are not going on there
because in many cases they are restricted from doing so.
So just remove the barriers and the goodwill of the stable
apartment communities that have availability, not just
immediate availability, but people do move out and there are
vacancies over time. Let the people go where they want to go;
provide a resource where they can see where there are
apartments available.
This does not solve all the problems, obviously, but this
is from a long-term housing opportunity standpoint, it gets you
out of a shelter. It gets you out of temporary involvements. It
puts you in a community where your kids are going to school and
you can live. And then you can decide if you want to stay there
or not longer-term, so you do not have to deal with the problem
a second time, when they decide they want to go someplace else.
So those are the kinds of waivers that we are looking for.
Unfortunately, there are dozens and dozens and dozens of
waivers. I believe that Congress could authorize the entire
program listing of occupancy waivers if they wanted to and then
ask the States to do exactly the same thing. The IRS simply
said to the States, you are authorized by us to waive these
things if you want, but now we have to wait for the States. I
know you cannot control that, but you could certainly promote
it.
Chairman Ney. So our waivers could be done
administratively, but some require the statute change. We are
meeting today with FEMA. We are communicating with HUD. The
purpose of that meeting today is to try to go through the
waiver discussion ASAP to see what we can do to be able to get
people some immediate relief.
Ms. Kennedy, you raised the issue of the GSE bill. As you
know, I was tasked by Chairman Oxley to work on that, and our
staffs all worked on that, minority and majority staff. I think
we produced a very decent product. It ran into a firestorm of
controversy, as you know, and now is moving, which is great.
The entire GSE bill is moving.
The question I want to ask you is, how much impact? We have
the GSE bill, which is of course, as you know, about a new
regulator, which I agree on. You have the housing component in
the GSE bill, which is the $5 billion-some which now would be
altered for a first-shot by disaster relief and then applies to
the rest of the Nation too because there is a balance to help
people across the U.S. before the disaster as we had planned.
What type of impact do you think we could make if we remove
the housing component out of that bill, the housing goals, but
those are the components, housing goals out of that bill, and
do a dual-track on the bill? You still go for the regulator. I
am not saying any of that drops, but we could move the agreed-
to part on the housing goals and fire that off next week to the
President. Do you think that could have a better impact?
Ms. Kennedy. I think it may be the most important thing
that this Congress could do for affordable housing for the new
millennium. The Community Reinvestment Act provided a
regulatory incentive to insured institutions to help meet the
credit needs of their communities. So primary lenders, going
back to David Rockefeller 30 years ago, figured out ways to
lend and invest in low-and moderate-income communities. They
started using nonprofit partners in their cities to help them
accelerate their progress.
Just to give you one example, Congressman Ney, I have 15
nonprofit lenders in California, Ohio, Massachusetts, New York,
Alabama, and Florida that have originated over $20 billion in
housing that is almost exclusively affordable to people under
60 percent of area median income. This has been validated by
the Federal Reserve of San Francisco. But by and large, they
have not been able to sell any of their low-and moderate-income
loans to Fannie Mae or Freddie Mac.
So as you are focused on what we need, we need the benefits
of a national secondary market. Some of these lenders sell
those loans now to insurance companies, and banks often buy
these loans, but it is private placements, one at a time. So
the market for multifamily mortgages on affordable housing
today is like single-family mortgage market 20 years ago. If
you had a national secondary market, two Government-sponsored
enterprises making a market in them, getting enough volume that
you could link Wall Street with these loans on homes affordable
to low-and moderate-income families, it would be phenomenal.
Chairman Ney. The other question I have ties into a couple
of statements I think Ms. Norris made and Mr. Beamon.
I want to thank you for your answer on GSEs. You gave me an
idea when you testified about something we can do that
potentially does not kill the overall bill, and it moves
something right to the forefront within a matter of days.
A lot of people have not talked about furniture and items.
We have talked about temporary housing or how we do things in
Section 8 or emergency vouchers.
The question I have to ask you--I will start with Ms.
Norris. As you know, I live in Heath, Ohio, about 30 miles from
Columbus, Ohio, to the east.
How would be people in just our surrounding area, for
example, if you have furniture and you have items; how do you
collate that? How do you get what I think we could raise
tomorrow or tonight when I go home and talk to neighbors?
You can give money, and I fully understand that, but also
items we have we could get up there immediately, maybe get a
truck together and drive it up there. How do you get that
information out?
Ms. Norris. Again, I think it goes back to what we talked
earlier. It is local initiatives.
I really commend Columbus. The mayor, the commissioners
from the county, they got this whole energy going, and they put
everybody in one spot. That includes the agency folks.
There is one of those organizations that is doing something
called Adopt a Family. So they are working with the churches
and the nonprofits in the community to say as soon as we get a
family and we find them a place to live, you will adopt that
family. You can help them get enrolled in school. You can help
them get the furniture. It is taking an amazing combination of
the funds that can come from the agency and the charity of the
locale and make that work.
So I think in Columbus--and maybe we need to start getting
out those kind of best practices of places like Columbus, out
to the people so that people do not have to reinvent it every
single time and find out how those energies can be put
together.
Chairman Ney. Yes, Ms. Kennedy?
Ms. Kennedy. Columbus is definitely the model. I heard
about it from my members out there.
But I think one thing for you to pursue with FEMA is
whether or not the law still provides entitlements to people
who have been displaced by the flood. I have seen references to
it in the newspaper. I have even seen it on FEMA's Web site,
and I shared that with your staff. It is exactly what I
remembered. Everybody is entitled to up to $26,200 for various
things.
What apparently has not happened here is that the family
who needs furniture has not been told by whoever has handled
the application that they are entitled to a living allowance
that would include basic furniture, the cribs, the beds, the
sofa. So I think one of the things to pursue with FEMA is how
come people do not know what their rights are when their Web
site describes them?
Chairman Ney. Another issue on the Web site--and I picked
this up this morning. You have a HUD Web site, a FEMA Web site,
et cetera. That is fine, but electronically, I am no wizard at
this, but I am told electronically by our House administration
staff, you can take today the FEMA Web site and you can put
seven icons on there and it clicks you instantly into other HUD
Web sites on everything, and you can do the reverse on the
others because people have to click into this Web site and that
Web site. So combining also on some pages, just the electronic
part of it I think would be something that can be done.
We are having a meeting today. I think there are issues;
some of these we can bring up and again try to get them solved.
We are placing the phone calls. I expect I would want an
answer, again from the Administration today, do they know how
many people are in shelters or not, or how many are there, what
do they think, so we can get a handle on that. Those are things
either we know or we do not know, we have a number or we do not
have a number, and if we do not, how do we find out quickly,
not within a 6-month commission study.
So those are the issues again I am stressing that you are
raising to us and you raised at the roundtable when the
gentlelady was there; Mr. Green was there and others. Those are
things we do need to know. I cannot stress to you how helpful
you have been on that. I am going to also make a statement and
turn to my colleagues who might have some questions. Again, I
want to thank you for your work in helping people.
You had mentioned the Ohio Valley floods. We went through
three rounds of floods. I have been working for 24 years, and I
have been in office on different levels, on floods. We flood.
We had some severe ones, three in a row. All 88 counties were
declared a disaster last year. We are still trying to pick up
the pieces for some people a year later who have fallen between
the cracks somehow.
When we talk about, however, the discussions of changing
FEMA or reinventing some things--and I am having a summit back
home of all of our emergency management people and local
officials--we also have to be careful that we do not change
things that take us backwards or hinder the ability to keep it
simple to help people. Sometimes we think it is complicated
now, and in the past it was even worse years before, to be able
to get direct help to people.
So I think there is a balancing act there of taking what we
know from this disaster and this tragedy and being able to do
some reforms that help people, but also watch how we do them.
There has to be cooperation in the Congress's involvement and
the solicitation of ideas from people that work right out
front, as you all do and your groups do in the field.
The other thing is, I commend our communities that have
obviously reached out. I have a lot of counties that I have had
that were flooded, Tuscarawas, Belmont, and other counties.
People were giving money and there have been telethons and
support and welcoming people into the communities. But you
know, I put myself in the situation, in a mindset of when we
went through the floods. We had 7,000 people evacuated from
Tuscarawas County. Those 7,000 luckily were able to go back
after a period of time, but 7,000 out of a county of 70,000.
That is a lot of people.
I cannot imagine where I would just blanketly say, we have
had this severe catastrophic event; let's say we had one in one
of the counties, and the option I give you as the Government is
you can move to Chicago, New York, L.A., Boise, Idaho. That is
your option. We move everybody out there. We start to repair
the hypothetical total disaster. Well, now a job is open, but
your family is out in Chicago, so they can stay there and we
are going to bring you to get a job back where you are from,
except where do we house you?
So we do have to seek what people want to do. I understand
that. But there also have to be the option because if you do
not give people the options of some modular homes at least
somewhere in the vicinity, then you only give them one choice.
So I applaud the communities of helping, but also by the
same token, I want to make sure we do not get away from the
ability to give choices so people can still be near their
relatives and near the area where they are from. So I think
there is a balance to that, in my opinion.
The gentlelady?
Ms. Waters. I would like to thank you all for being here
today.
I would like you to really have an appreciation for the
fact that our members are indeed focused on this. They are
spread out, trying to be in sometimes three or four different
committees at the same time, but very much focused on this
issue. Everybody is. So thank you very much for your patience.
This business about what people are eligible for is a
puzzle. We are meeting with FEMA today and I am going to try to
come out of that meeting having learned how to respond to folks
who say and ask the question, what am I eligible for? You would
think by now that there would be thousands, millions of flyers
everywhere in every shelter with people understanding what they
are eligible for. I do not take kindly to some of the responses
that we get where they say, well, tell them to go online. What
line?
These are people in the shelter, and not only do they not
have access to computers, most of them, but some of them have a
couple. I was at LSU in Baton Rouge and they had a couple of
computers. But many of the folks have never had a computer.
They are not computer-literate. They would not know what to do
if you sat it down in front of them. Many of them are elderly.
Many of them are handicapped, on and on and on.
So in addition to those who have access to a computer or
may have, some have one, and it is underwater now, too. I do
not know if anybody set up any community computer centers
nearby. I have not seen any.
So there should be millions of flyers that are available.
My database here of all of the shelters in Louisiana, Texas,
Alabama, Arizona, and Georgia is a week old. I am not so sure.
I know what has happened since this. A lot more people have
been sent out of State because at the time that I got this,
there were still people being plucked from rooftops and people
who were leaving the Astrodome, et cetera.
But there is no reason why they should not have this
information put forth in a very simple way for everybody to
understand and know. Social workers who want to help do not
know. Ministers who want to help do not know. And so I am
really going to be on FEMA today. As a matter of fact, I was
saying to the chairman, we know that they are focused on the
ground. A lot of what we have been told is they are not
available because they are all in-theater or on the ground. I
just think that we are going to have to go and get on the
ground and stay on the ground until we understand a lot about
the operations that are going on.
So I have a real appreciation for your concerns, and saying
people do not know what they are eligible for. And absolutely
$26,000 could make a heck of a lot of difference when you are
trying to get on your feet. So we are going to do everything
that we can to try and force some communications, some way to
disseminate this information, particularly not only to the
people, but to those who help folks. We have many people who
need to have, ministers or social workers or others who have
the information to be able to help them, because even when they
get it, they do not know what to do with it.
So as an old social worker, I feel a real sense of
responsibility to get on this and make it work.
Thank you very much.
Chairman Ney. Thank you.
The distinguished gentleman from Texas?
Mr. Green. Thank you, Mr. Chairman, and thank you, ranking
member, for allowing us to have these hearings. I think they
are important.
I do thank you, the members of the panel. You have been
outstanding, and I appreciate what you are trying to do to help
us.
It appears to me that we are going to be faced with some
philosophical introspection, that we are going to have to look
deeply within.
I reference this because, as I listened to you talk about
persons who are survivors, who are eligible for vouchers, I
also know that we have people who are similarly situated who
are not survivors, who are starting to ask, "Where is my help?
I, too, am in need." And many of them are of the opinion that
it is no fault of their own that they are in need. Persons who
are adopting families, we have families that were in need of
help before this dastardly hurricane came along. They are
asking, "Where is my help?"
What I am saying to you is, I think that we are going to
have to look at the whole question of poverty in this country
and how we address it because we are finding now that there is
a way if we have the will, and we are demonstrating that we
have the will as it relates to this disaster.
I support the methodology that is being proposed. I think
these are good measures. The whole notion of relaxing the rules
so that you can get people into units without having to comply
with some rule that says you cannot have your boyfriend in with
you, if I understand some of these rules.
But in the final analysis, we have to acknowledge that we
have a lot of poverty in this country and that we really have
not designed a systematic approach to dealing with the poverty
in this country.
There is a rule that I have governed my life by, my
political life by. The rule is, it is not enough for things to
be right. They must also look right. It may be right for us to
give the vouchers to the victims of the hurricane and exclude
others who need them, but it does not look right. There is a
whole list, a long list of things that we are doing that may be
right, but they do not look right. I think that at some point,
that catches up with you because the world is watching us.
I will give you a sterling example. We had persons who
arrived in Houston by way of bus from the Superdome. We had
some other persons who came from that same area, but they
managed to get to Houston by car or various means. They could
not get into the Astrodome. They came from the same location,
but they came by different means of transportation. So we had
to look inward and say, is this right for them to be excluded
simply because they did not get here on the bus? We did work
out a means, thanks to the mayor and the county judge and
others who are involved. We were able to resolve the problem.
I think that this is a great opportunity now for us to look
beyond Katrina and look at America and decide how we can go
forward and deal with the whole question of poverty in America.
I think that is the greater question that is really before us.
I think that if we govern ourselves by the notion that it is
not enough for things to be right, they must also look right, I
think we will make some far-reaching decisions that will
benefit all of the people who are less fortunate than some of
us in this room.
Now, a question. This question goes to all of you in a very
general sense.
First, a comment. There is the notion that we need to have
the survivors located as close to their homes as possible. This
would give them an opportunity to have work in the area, that
the money that they will get from the Government can go back
into the economy in the State, the $26,000 that goes back into
that State's economy. There are all sorts of good reasons why
we should do this.
How would you develop a program so that we can have them in
the States where they are coming from? That is, those who want
to return. Obviously, if people do not want to return, we have
to give them the option of staying where they want. In this
country, we have freedom of movement. But those who want to
return, what is the best way to design a program to get this
done?
In Texas, we have approximately 250,000 people and many of
them are now leaving Texas. I have heard stories about people
going as far away as Utah and some other places, but they are
getting removed. They are getting relocated. I am not sure that
all of them will traverse that distance back to their States.
So how can we design a system to have them located in their
States so that they can help the economy of the States that
they are from and continue to be productive citizens in those
States? Yes, ma'am.
Ms. Kennedy. I have worked five major disasters in four
States. I have family that was affected in another. Let me be
crass and say, show them the money and the market will come.
In other words, by now in a "normal" horrendous disaster,
families would know that they were entitled to temporary
housing allowances. When that word goes out that there are
vouchers in Alabama or temporary housing allowances in Texas,
the private market responds. As Mr. Brodsky pointed out, there
is a HUD housing Web site, housing.net, where landlords can
list their available units for people to find out about.
But the key thing, I think, is to think of this disaster
relief as an entitlement. A human being gets to decide, because
they are entitled to disaster relief assistance, if they want
to stay in the area or if they want to try someplace else. It
is not uncommon for them to want to stay in the area. That is
when having the word of the money get out through pastors as
well as realtors and landlords is really important.
People suddenly start to think, you know, I could rent that
basement apartment or that garage apartment. Those make
perfectly okay temporary housing situations for some families.
My family in 1997 spent 4 months in a tourist cabin in the
woods of Minnesota, but it was fine because it was within
driving distance of their house that they needed to repair.
Other people will take the money and say, I really want to
relocate to my aunt in Detroit. They may decide to stay there
or they may decide at the end of the temporary housing
assistance to return home.
So the prospect of having some mobile homes, I do not agree
with RVs, but manufactured housing that is temporary in the
smallest possible sites is also important. What you are looking
for is clusters of no more than 20 mobile homes together.
Sometimes extended families will relocate. All of which is
designed to ease the transition to the next step, which is
either rebuilding a house or finding a home.
Mr. Green. So you would have the vouchers go to the
evacuees?
Ms. Kennedy. As they have in other disasters.
Mr. Green. Okay.
Ms. Kennedy. Yes.
Mr. Green. I mention that specifically because I have had a
number of community-based organizations to visit with me. They
have been very helpful, and they are depleting their resources,
and they are asking, how can we replenish our resources so that
we can continue to help.
Now when I posed this question to a representative from
FEMA, I was told that FEMA does not make direct payments to
individuals who are not evacuees, that it does not do this.
Ms. Kennedy. Well, that is right, but evacuees could be
reimbursed. I think what we are up against now is the
threshold. Evacuees need to understand what they are entitled
to. The agencies that have been helping them and have been
carrying the burden need to now relieve themselves of that
burden so that the Federal Government can step up.
Mr. Green. If I may, then I will come right to you. My
concern is these agencies that have carried the burden; we want
to leave them with a good feeling about what they have done.
Right now, many of them are not feeling real good about the
process and the prospect of having depleted their resources. I
am not sure what their response will be the next time. I think
that we want to make sure that they have a good experience with
this to the extent that we can, to continue.
When that representative from FEMA indicated that while,
and I found this very interesting, while FEMA cannot pay the
individual, FEMA can pay the State and the State can pay
individuals. So there is a roundabout way of getting this done.
While I am interested in the roundabout way, I am also
interested in formalizing that process to the extent that we
can so that the State.
And, Mr. Chairman, if I might, I just wanted to share this
with you. Having talked to FEMA about reimbursing community-
based organizations or faith-based organizations and found out
that they cannot make direct payments to these organizations,
but the State can and FEMA can reimburse the State.
So right now we are trying to work on some means of
formalizing this informal process because we have a lot of
faith-based institutions that really stepped up to the plate.
It would be great if we could somehow help them to replenish
some of their resources. They may not get all of their
resources and assets restored, but it would be great if we
could get some of those replenished.
So I would like to work with whomever you think
appropriate. I have talked to my ranking member about it as
well. If that is something we can do, I think it would be
great.
Yes, ma'am?
Ms. Norris. I guess I would just like to confirm what you
are suggesting. That is, I think that the benefits that are
coming from FEMA, as has already been suggested, nobody really
quite knows how it is working. It really is not easy. There is
no "how to." There is a Web site and there is a way for people
individually to get a certification, i.e., they get a number.
What we cannot find out from anybody, including the FEMA rep
that was at one of the shelters, is what did that entitle this
person to. The answer was, it depends; we will have to get back
to them.
Now how is anybody supposed to make any kind of decision or
any of the agencies supposed to help make a decision if nobody
knows what this person is going to be entitled to? The fact
that they cannot make any kind of decision and get these folks
awareness of what their benefits are either through the
agencies or through direct conversation with these folks, is
really I guess the question we all need to be asking.
How is it that FEMA cannot seem to figure out what people
are entitled to? How can we not get that communicated out to
the people who are most devastated by the situation? That is
what we are seeing on the ground.
Mr. Green. Would anyone else like to respond to the
question of how you would design the system so that people can
get back to their States, their cities, their locales?
Mr. Beamon. I would like to respond. At some point, we need
to involve the Department of Labor with some of their job
training programs and the network of job training programs that
get funding from them. In this case, the training should go
toward displacees, people that have been displaced because of
the hurricane. They have a network that several organizations
work in several States. I just think this would be one good
start. I would like to add this to my list of recommendations.
Mr. Green. All right. Now, if I can have one more--thank
you, Mr. Chairman--one more thing.
The people who will be working, they obviously will be paid
some amount. I will tell you, I almost had tears to well in my
eyes when I read about how the normal amount that would be paid
may be reduced. We are catching people when they are most
vulnerable, when they need help the most, and we are talking
about paying them less than we are paying people in other areas
who might be doing the very same work. That is very
disconcerting. It really is.
I do not know how you would propose that this be addressed,
and maybe I am addressing it to the wrong panel. I am just not
sure. It causes a lot of heartache to see this kind of thing
occurring to people who are most vulnerable, that they are
going to be paid less.
Have any of you encountered this before, where the wage-
scale was dropped in an area after this kind of devastation?
Mr. Brodsky. Congressman, it is not really a housing
question for me to answer, but just in general I would assume
that once programs are characterized to rebuild, there will be
a shortage of labor in the area that is qualified to perform,
regardless of the number of dollars that are available to
build, and you will not have a price-point problem for labor.
But at the moment, nothing is being built.
So I would characterize it more likely as a short-term
issue if it exists, and that the only thing I could assume is
that with so many people gone, if you are trying to bring in
construction labor from all over the country, they will be
bidding up the price for labor, not down.
Mr. Green. Are you familiar with the specifics of what I am
talking about? You are? Okay. I just wanted to make sure.
Any other person want to respond to that? Okay.
Mr. Chairman, I thank you. You have been very generous with
your time.
Chairman Ney. I have more time. I want to respond to it,
though.
Mr. Green. Yes, sir.
Chairman Ney. If I can respond to your question.
Mr. Green. Thank you.
Chairman Ney. I am alarmed, alarmed. If Davis-Bacon, after
we voted, has been removed, which I think would be the second
time in the country's history.
Mr. Green. I think it would be the third.
Chairman Ney. Third. You are right. It is three, the third
time in the country's history. The goal of removing it would be
that you save money and you can use more money. I think that
may not happen. I think removing it may at the end of the day
people could come in there and there would be a higher price,
instead of the $7.50 an hour or whatever it was, and it was low
anyway down in some of the States, and it could be a higher
price so more money would be eaten up. This is something we
have been looking at for 3 days now because we were not
involved in this discussion.
Mr. Green. Yes, sir.
Chairman Ney. I am alarmed about it. I am alarmed. Our
office is looking into it and other members; we have been
talking among ourselves. I think it is something that can be so
counterproductive and the money will go up to the top of the
food chain versus the people that need those jobs and need to
be able to work them. So I am alarmed. I am in the same camp as
you are on this.
Mr. Green. Thank you, Mr. Chairman.
If I may, friends, as a neophyte, I am not sure that I
could have landed on a better housing committee than this one.
Our chairman truly does care, and it is evidenced not only in
his words, but in his deeds. I thank him for his kind comments
and I appreciate very much your efforts to be of assistance to
us. Thank you.
Chairman Ney. I thank the gentleman for his kind comments.
Anything else to bring before the committee?
Ms. Kennedy. Just one thing. I have been disturbed by what
I have been reading in the newspaper about this housing
assistance command. Back to what your point was about the
Davis-Bacon and you are not being consulted.
You know, those of us who have done disaster relief before
are a little uncomfortable about a defense contractor, the Red
Cross, and FEMA, and HUD is mentioned, not just doing disaster
relief, but actually developing policy.
So I would just encourage you, because of your leadership
in housing, to get into that because I get nervous when I think
about contractors who are not familiar with housing influencing
policy.
Chairman Ney. Like I said, with respect to that, also
thinking about where I live and not giving people a choice,
that your only choice is that you are going to go to another
State, you are going to take it if you are up against the wall.
Now if you give some choices and people can remain locally,
I am not saying it is perfect conditions or whatever, but that
is a decision that has to be made pretty soon about immediate
emergency or, first of all, emergency waivers, Congress has got
to move within days on that, in my opinion. I do not know the
magic number.
But again, just to repeat what I said earlier, if you say
to a person who has had a catastrophic event, your only option
to keep your family safe and you is that we are going to move
you seven States over, you are going to take it at the end of
the day if you have no choice because you have no options. But
if you give options, they can remain local. If you take
everybody out of an area and they move and then the next thing
you know it is 60 days later, and hey, you have a chance at a
construction job down in Mississippi and New Orleans.
Okay, that person comes back. What do they do with the
family-- because they are now in Utah or Chicago--what do you
do with your family? And when they go back, where are they
going to live? So why did they move in the first place, when we
could do temporary housing?
If we do not move on this temporary housing situation out
of the shelters, then there is only going to be one choice, and
that choice is to go somewhere else. That is not giving a
person a choice, especially people that right now are
defenseless.
So I think it is something that we have to move on, how we
do it, if FEMA or HUD or whatever have to waive some rules, and
I do not know what is the magical number. People are already
saying, well, if you bring in the modular housing, you are
going to create so many problems. Well, you just do not wipe
out the option for people by saying, well, there will be
problems if we do that. We have to give people in this
situation some ability to have some choices, too.
And some people, I agree with Mr. Green, they may move and
not come back, but if you force everybody to move and you do
not give them an option, we have done a very disservice to a
lot of people and families and to regions and culture.
With that, with no objections, the hearing record will
remain open for 30 days for additional questions to be asked or
items to be submitted in the record.
I thank the gentleman and the other members of the
committee today.
I thank you, especially for your work, for helping people,
and your time here in the House.
Thank you.
[Whereupon, at 1:45 p.m., the subcommittee was adjourned.]
A P P E N D I X
September 15, 2005
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