[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]
NEW ORLEANS: TEN YEARS
AFTER THE STORM
=======================================================================
FIELD HEARING
BEFORE THE
SUBCOMMITTEE ON
HOUSING AND INSURANCE
OF THE
COMMITTEE ON FINANCIAL SERVICES
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED FOURTEENTH CONGRESS
FIRST SESSION
__________
NOVEMBER 6, 2015
__________
Printed for the use of the Committee on Financial Services
Serial No. 114-60
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HOUSE COMMITTEE ON FINANCIAL SERVICES
JEB HENSARLING, Texas, Chairman
PATRICK T. McHENRY, North Carolina, MAXINE WATERS, California, Ranking
Vice Chairman Member
PETER T. KING, New York CAROLYN B. MALONEY, New York
EDWARD R. ROYCE, California NYDIA M. VELAZQUEZ, New York
FRANK D. LUCAS, Oklahoma BRAD SHERMAN, California
SCOTT GARRETT, New Jersey GREGORY W. MEEKS, New York
RANDY NEUGEBAUER, Texas MICHAEL E. CAPUANO, Massachusetts
STEVAN PEARCE, New Mexico RUBEN HINOJOSA, Texas
BILL POSEY, Florida WM. LACY CLAY, Missouri
MICHAEL G. FITZPATRICK, STEPHEN F. LYNCH, Massachusetts
Pennsylvania DAVID SCOTT, Georgia
LYNN A. WESTMORELAND, Georgia AL GREEN, Texas
BLAINE LUETKEMEYER, Missouri EMANUEL CLEAVER, Missouri
BILL HUIZENGA, Michigan GWEN MOORE, Wisconsin
SEAN P. DUFFY, Wisconsin KEITH ELLISON, Minnesota
ROBERT HURT, Virginia ED PERLMUTTER, Colorado
STEVE STIVERS, Ohio JAMES A. HIMES, Connecticut
STEPHEN LEE FINCHER, Tennessee JOHN C. CARNEY, Jr., Delaware
MARLIN A. STUTZMAN, Indiana TERRI A. SEWELL, Alabama
MICK MULVANEY, South Carolina BILL FOSTER, Illinois
RANDY HULTGREN, Illinois DANIEL T. KILDEE, Michigan
DENNIS A. ROSS, Florida PATRICK MURPHY, Florida
ROBERT PITTENGER, North Carolina JOHN K. DELANEY, Maryland
ANN WAGNER, Missouri KYRSTEN SINEMA, Arizona
ANDY BARR, Kentucky JOYCE BEATTY, Ohio
KEITH J. ROTHFUS, Pennsylvania DENNY HECK, Washington
LUKE MESSER, Indiana JUAN VARGAS, California
DAVID SCHWEIKERT, Arizona
FRANK GUINTA, New Hampshire
SCOTT TIPTON, Colorado
ROGER WILLIAMS, Texas
BRUCE POLIQUIN, Maine
MIA LOVE, Utah
FRENCH HILL, Arkansas
TOM EMMER, Minnesota
Shannon McGahn, Staff Director
James H. Clinger, Chief Counsel
Subcommittee on Housing and Insurance
BLAINE LUETKEMEYER, Missouri, Chairman
LYNN A. WESTMORELAND, Georgia, Vice EMANUEL CLEAVER, Missouri, Ranking
Chairman Member
EDWARD R. ROYCE, California NYDIA M. VELAZQUEZ, New York
SCOTT GARRETT, New Jersey MICHAEL E. CAPUANO, Massachusetts
STEVAN PEARCE, New Mexico WM. LACY CLAY, Missouri
BILL POSEY, Florida AL GREEN, Texas
ROBERT HURT, Virginia GWEN MOORE, Wisconsin
STEVE STIVERS, Ohio KEITH ELLISON, Minnesota
DENNIS A. ROSS, Florida JOYCE BEATTY, Ohio
ANDY BARR, Kentucky DANIEL T. KILDEE, Michigan
KEITH J. ROTHFUS, Pennsylvania
ROGER WILLIAMS, Texas
C O N T E N T S
----------
Page
Hearing held on:
November 6, 2015............................................. 1
Appendix:
November 6, 2015............................................. 47
WITNESSES
Friday, November 6, 2015
Barnes, Nicole, Executive Director, Jericho Road Episcopal
Housing Initiative............................................. 7
Fortner, Gregg, Executive Director, Housing Authority of New
Orleans........................................................ 14
Hill, Cashauna, Executive Director, Greater New Orleans Fair
Housing Action Center.......................................... 10
McConduit-Diggs, Erika, President and Chief Executive Officer,
Urban League of Greater New Orleans............................ 18
Randall, Earl III, New Orleans Field Office Director, U.S.
Department of Housing and Urban Development.................... 5
Uddo, Connie, Director, St. Paul's Homecoming/Senior Center...... 16
Washington, Tracie, Managing Director, Louisiana Justice
Institute...................................................... 12
APPENDIX
Prepared statements:
Barnes, Nicole............................................... 48
Fortner, Gregg............................................... 52
Hill, Cashauna............................................... 56
McConduit-Diggs, Erika....................................... 64
Randall, Earl III............................................ 72
Uddo, Connie................................................. 77
NEW ORLEANS: TEN YEARS
AFTER THE STORM
----------
Friday, November 6, 2015
U.S. House of Representatives,
Subcommittee on Housing
and Insurance,
Committee on Financial Services,
Washington, D.C.
The subcommittee met, pursuant to notice, at 12:20 p.m., in
the boardroom of the Port of New Orleans Administration
Building, 1350 Port of New Orleans Place, New Orleans, LA, Hon.
Blaine Luetkemeyer [chairman of the subcommittee] presiding.
Members present: Representatives Luetkemeyer; Cleaver and
Green.
Ex officio present: Representative Waters.
Also present: Representative Richmond.
Chairman Luetkemeyer. The Subcommittee on Housing and
Insurance will come to order.
Without objection, the Chair is authorized to declare a
recess of the subcommittee at any time.
Today's hearing is entitled, ``New Orleans: Ten Years After
the Storm.'' We are excited to have with us today your
Congressman who represents this area, Mr. Richmond.
Technically, he is not on the committee, so we have just a
little housekeeping to take care of to make sure he can
participate.
So, without objection, the gentleman from Louisiana, Mr.
Richmond, may participate in today's hearing by making a
statement and asking questions of the witnesses. Since there is
no objection, your voice is now going to be heard.
Before we go on, I would like to thank the witnesses for
appearing before the subcommittee today, and the Port Authority
of New Orleans for hosting us. We look forward to the testimony
of our distinguished panel.
I now recognize myself for 5 minutes to give an opening
statement, and before I do I just want to start out by
explaining for those in the audience how this all works, if you
are not familiar with how we do things in Congress. We don't do
things well, but we do have some order sometimes.
I have a statement of a few minutes, and then Ms. Waters
and Mr. Cleaver, and then we will have statements from the
witnesses in the 5-minute range, and then we will begin
questions, and we will try to keep our questions to about 5
minutes apiece and see if we can get through 2 rounds of
questions. We have a hard stop at 3:00 because of some flight
connections.
The audience is asked to remain quiet. This is a hearing
for us to learn from the witnesses whom we have asked to be
here. They are very knowledgeable in each of their fields, and
we are excited to have them.
The gentleman over here on my left has a little timer. So
whenever you see the lights over there, green means it is time
to start, yellow means you have about a minute to go--when you
see us with a minute left, you know we are going to have to
wind up our questions shortly--and red means we have to figure
out how to wind things up and move on to the next person. So,
just a little housekeeping.
I now recognize myself for 5 minutes to give an opening
statement.
Ten years ago, much of this City was underwater. The
aftermath of Hurricane Katrina destroyed communities and
displaced thousands upon thousands of individuals. The lives
that were not claimed were severely disrupted, and housing of
any kind went from being a necessity to a luxury.
The Federal Government stepped in and partnered with the
State in an attempt to deliver services and fill immediate
needs, with the ultimate goal of rebuilding a stronger New
Orleans.
The response to Hurricanes Katrina and Rita totaled more
than $120 billion in aid. In some cases, that funding was
seemingly put to good use. Earlier today, my colleagues and I
toured a post-Katrina housing development that has become a
cornerstone of a revitalized community. We also saw areas of
New Orleans that don't seem to have been touched yet at all.
So here we are more than 10 years later, looking at
communities that haven't been redeveloped, aware that there are
still people who are unable to return home. It is clear that
government at all levels had some failings. Government didn't
serve those in need to the best of its ability.
This hearing today is to allow history to guide us by
examining what worked and what didn't work, and have an honest
discussion about the appropriate roles of the Federal, State,
and local governments, the private sector, and the non-profit
community and disaster assistance.
Today, we will hear from a diverse set of witnesses who had
diverse experiences and played different roles in the days and
years after Katrina. We have representatives on today's panel
who led groups that were some of the first responders in the
post-Katrina housing crisis. In places where the State or
Federal Government was slow to help, they were there, working
to physically and emotionally rebuild their communities. That
they continue their work 10 years later is both a testament to
their strength and an indication of the need to examine the
process for delivering housing assistance in the wake of
disasters.
This subcommittee was the first to have a field hearing in
post-Katrina New Orleans. We welcome the opportunity to study
the progress or lack thereof made in the last decade and thank
the people of this City for having us back.
As someone who has also seen a devastating situation, I
empathize with the citizens of New Orleans for what you have
gone through. A devastating tornado ripped through Joplin,
which is a town not too far from where I am. I saw the governor
call out the National Guard and work with all the different
emergency people there and address that issue. I have stood in
the middle of the devastation, a swath 7 miles long and a mile
wide, with literally nothing left but a few stumps of the
trees, and all that was left was the rubble of the homes and
the buildings that were there.
As you stand there, your feelings range from awe to
sadness, from disbelief to grief at the lives lost. I have also
witnessed what it did to the community and how the community
responded and got back on its feet.
So I look forward to an affirmative discussion today, and I
commend the panel and the people of the Gulf Coast for their
strength and determination.
With that, I yield 3 minutes to the ranking member of the
full Financial Services Committee, Ms. Waters from California.
Ms. Waters. Thank you, Chairman Luetkemeyer and Ranking
Member Cleaver, and thanks to all of our witnesses who are here
today.
I am reminded that this August was a wonderful time here in
New Orleans. I joined the people of New Orleans to mark the 10-
year anniversary of Hurricane Katrina. Ten years ago, I saw the
devastation of Hurricane Katrina firsthand as then-Chairwoman
of the Housing Subcommittee when I, along with members of the
subcommittee including Mr. Cleaver and Mr. Green, visited
public housing units that were damaged by the storm and
witnessed the difficult conditions victims of the storm faced.
In the following years, we continued to work with public
housing tenants and the Housing Authority to ensure that
tenants had the resources they needed to survive. We worked
together with housing advocates to shine a bright light on
problems with recovery efforts, and to hold officials
accountable for improving conditions in the City and getting
its residents back to life as it was before the storm.
We held 16 hearings, 6 of which were held in the Gulf. We
understand that stabilizing the housing infrastructure was a
critical part of ensuring that New Orleans reached full
recovery. So in order to ensure that we were meeting the
immediate and long-term housing needs of vulnerable
populations, I introduced legislation, H.R. 1227, the Gulf
Coast Hurricane Recovery Act of 2007, to help reestablish
housing options for Gulf Coast families.
Although this bill was never signed into law in its
entirety, I am proud to say that several pieces of the bill
were successfully enacted, including provisions to authorize
vouchers to house the homeless, as well as disaster vouchers
for displaced families to help smooth the transition into
permanent housing after the storm.
The work in the aftermath of Katrina also included
identifying and re-housing victims of the storm, as well as
identifying and seeking to end housing discrimination such as
the anti-housing ordinance in St. Bernard Parish, and the
discriminatory allocation of grant dollars through the HOME
Program, which I am sure will come up today. Additionally, I
stood with several local officials and advocates to call for
the one-for-one replacement of every unit demolished in the
City's public housing developments.
I am proud to see that after 10 years, the City has truly
turned the corner and New Orleans has shown the world what
resilience and true grit looks like. Notably, population levels
continue to rise, homelessness has fallen by nearly 90 percent,
and the City has effectively ended veterans' homelessness.
Nevertheless, our work is not done. First, we must work to
expand affordable housing options for low-income New
Orleanians. HUD-assisted housing in New Orleans now exceeds
pre-storm levels, yet the public housing stock stands at just
26 percent of its pre-Katrina inventory.
Second, I am also concerned about recent studies regarding
the impact of Katrina on New Orleans' black middle class. As we
confront the wealth gap nationally, we must also confront the
policies that have led to the erosion of New Orleans' once-
vibrant black middle class.
Third, far too many residents are paying more than their
share to rent a home. Prior to the storm, the majority of
households in New Orleans spent less than 30 percent of their
income on rent. Recent data released by the U.S. Census Bureau
indicate that the trend is now moving in the wrong direction,
with 58 percent of renters spending more than 30 percent of
their income to pay the rent today.
So I hope to explore each of these issues in-depth today,
and I look forward to hearing from our witnesses about their
work to improve housing opportunities here in New Orleans.
I yield back the balance of my time.
Chairman Luetkemeyer. With that, we go to the gentleman
from Missouri, the ranking member of our Housing and Insurance
Subcommittee, Mr. Cleaver.
Mr. Cleaver. Ten years after the storm. Thank you, Chairman
Luetkemeyer and Ranking Member Waters, and other members of the
committee.
I would like to begin by thanking the Chair of this
subcommittee to my immediate right, Chairman Luetkemeyer, for
his interest in and willingness to bring forth this hearing. I
would like to thank Ms. Waters for agreeing to help facilitate
the request for this hearing. She and Congressman Green to my
left and I were here in the aftermath of Katrina and saw
firsthand what it had done in terms of devastation.
I would like to thank Congressman Cedric Richmond of
Louisiana's 2nd Congressional District for the leadership he
has provided and the direction that he has given on this issue
as well.
On August 29, 2005, Hurricane Katrina struck this area.
This Category 3 hurricane brought with it winds up to 140 miles
an hour, stretching 400 miles across the States of Louisiana,
Mississippi, and Alabama. When the levees protecting the City
of New Orleans broke, 80 percent of the City was flooded with
up to 15 feet of water. I doubt that there is anyone in this
room or across the country who does not remember the images of
the City underwater. All told, 1,500 people in the State of
Louisiana lost their lives, more than a million people in the
Gulf were displaced, and over a million homes were damaged.
There are many who consider Katrina to have been the single
most catastrophic natural disaster in U.S. history.
Sadly, though perhaps not surprisingly, the road to
recovery for the City of New Orleans has been bumpy. To assist
with the recovery, Congress appropriated $120 billion, and the
National Flood Insurance Program paid out $16.3 billion in
claims. The Financial Services Committee, which is the
oversight committee of this subcommittee, held 16 hearings on
Katrina and the Gulf Coast recovery. And in the aftermath of
the Katrina event, as I mentioned earlier, we had a field
hearing here so we could see firsthand the struggles faced by
the community.
Eight years later, there have been impressive signs of
recovery, and we saw them today. I appreciate all of the work
that has gone on, and we will get into details on that later.
I would like to yield back the balance of my time, and I
look forward to becoming dialogical with the panel.
Chairman Luetkemeyer. Thank you.
With that, today we welcome the testimony of Mr. Earl
Randall, Field Office Director, U.S. Department of Housing and
Urban Development; Ms. Nicole Barnes, Executive Director,
Jericho Road Episcopal Housing Initiative; Ms. Cashauna Hill,
Executive Director, Greater New Orleans Fair Housing Action
Center; Ms. Tracie Washington, President and CEO, Louisiana
Justice Institute; Mr. Gregg Fortner, Executive Director,
Housing Authority of New Orleans, who did a fantastic job of
getting us around today and getting us around on time, so, well
done; Ms. Connie Uddo, Executive Director, St. Paul's
Homecoming Center; and Ms. Erika McConduit, President and CEO,
Urban League of Greater New Orleans.
Each of you will be recognized for 5 minutes to give an
oral presentation of your testimony. Everybody has submitted
written testimony so you can give us an overview of that. And
without objection, your written statements will be made a part
of the record.
Mr. Randall, you are now recognized for 5 minutes.
STATEMENT OF EARL RANDALL III, NEW ORLEANS FIELD OFFICE
DIRECTOR, U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Mr. Randall. Thank you, sir. Good afternoon, Chairman
Luetkemeyer, Ranking Member Cleaver, and members of the
subcommittee. My name is Earl Randall III, and I have been
Director of the Department of Housing and Urban Development's
field office here in New Orleans for the past 2 years. We are
grateful for the chairman and ranking member's leadership in
calling for this hearing, and especially your interest today on
the tour as we viewed some of our recovery projects.
I would also like to give a special acknowledgement to
Ranking Member Waters for her presence here today, and the
interest she has shown over the past decade for the citizens of
New Orleans and the recovery of this area. Thank you for
inviting me here today.
Hurricane Katrina and its aftermath created unprecedented
destruction along the Gulf Coast and inflicted a human toll of
more than 1,800 lives. Over the past 10 years, investments made
through HUD programs have had a major impact on the recovery in
the Gulf Coast region. The Department has worked closely with
State and local leaders and effectively managed nearly $20
billion delivered through the Community Development Block Grant
Disaster Recovery Program to help the region recover from
Hurricanes Katrina, Rita, and Wilma.
Hurricane Katrina has forever changed New Orleans and the
Gulf Coast. The post-recovery chapter of HUD's relationship
with New Orleans builds off the substantial recovery of the
past 10 years and now focuses on how to make New Orleans and
the Gulf Coast communities, and the residents of every
neighborhood, successful in the 21st Century.
At the time of Hurricane Katrina, I was HUD's Community
Planning and Development representative for Shreveport and
Bossier City. Immediately after landfall, I was asked by the
field office director to coordinate HUD's on-the-ground
responses to the devastation caused by Katrina. One of my first
official duties was to coordinate a congressional field hearing
that was held here in New Orleans, and I have come full circle
to sit on the panel as a witness here today.
In my role with HUD over the past decade, I have had a
firsthand opportunity to watch how CDBG-DR funds were the
driving force in the recovery that were used to fill funding
gaps and provide flexibility that caused communities to
carefully think through recovery plans and how best to meet the
specific recovery needs. In Alabama, Mississippi, and
Louisiana, CDBG-DR dollars were used by States to ensure that
they were able to develop holistic recovery plans to ensure
recovery across the spectrum of housing, infrastructure, and
economic development needs.
The $19.7 billion that was allocated to the Gulf Coast
region for Katrina was broken down as such: $11.6 billion for
homeowner compensation; $2.7 billion for housing rehab; $1.7
billion for infrastructure and public improvements; $1.3
billion for economic development and tourism; and $2.4 billion
for other activities.
To this point, I have discussed HUD's post-Katrina
investment in terms of CDBG-DR. The second major aspect of
HUD's recovery work in New Orleans has been the redevelopment
of the four big public housing developments: C.J. Peete; B.W.
Cooper; Lafitte; and St. Bernard. Hurricane Katrina displaced
3,000 families who lived in those buildings. Public housing in
New Orleans pre-Katrina was a dense development that was
isolated from the community. There was high poverty, high
crime, lack of services and amenities, vulnerability to
flooding, low education, and lack of opportunity. The Housing
Authority of New Orleans, after consulting with and obtaining
approval from HUD, decided to demolish and rebuild these
developments to be more resilient to future floods, and to
create communities of opportunity.
The funding sources for these endeavors included HUD and
HANO contributing $200 million for capital investment, Go Zone
tax credits of $250 million, and FEMA's $20 million investment.
And I am proud to note that CDBG-DR added an additional $115
million at a critical time, when other funding sources became
less stable during our financial crisis in 2008 and 2009.
Two of the transactions, Columbia Park and Harmony Oaks,
went to final closing in December of 2008. Many of the
remaining projects were closed in phases in 2011 and 2013,
while others are scheduled to close. Today, 4 new mixed-income
developments are a vital part of community life in New Orleans.
These are mixed-income developments with both public housing
and non-public housing units, and market-rate units, and
especially units dedicated to permanent supportive housing.
HUD's investment is having a broader impact on neighborhood
revitalization, greater resilience, improved amenities, and
offering housing to working families.
HUD is going beyond public housing with the transformation
at Iberville. We are not just focused on a building. In fact,
we are redeveloping the neighborhood with a $30 million HUD
Neighborhood Grant. This will be an historic restoration that
will meet the needs of the local population, such as expanding
access to fresh foods, job opportunities, and quality early
childhood education. HUD's investment spurred an additional $53
million in private investment to date, and well over $1 billion
in planned neighborhood investment.
I want to reiterate that despite the success stories, our
job is not over. There are still miles left on the road to
recovery. As a native of New Orleans, I am proud of the work
that has been done and the lessons that we have learned about
providing quality housing for all, developing mixed-income
communities, leveraging private investment, and building
resilient communities of opportunity. The remainder of our
journey will continue to bolster the City of New Orleans'
recovery and can serve as an example of redevelopment across
the country in the wake of major disasters.
Thank you again for the opportunity to testify today, and I
look forward to your questions.
[The prepared statement of Mr. Randall can be found on page
72 of the appendix.]
Chairman Luetkemeyer. Thank you.
Ms. Barnes, you are recognized for 5 minutes.
STATEMENT OF NICOLE BARNES, EXECUTIVE DIRECTOR, JERICHO ROAD
EPISCOPAL HOUSING INITIATIVE
Ms. Barnes. Good afternoon, Chairman Luetkemeyer, Ranking
Member Cleaver, and members of the subcommittee. My name is
Nicole Barnes, and I am the executive director of Jericho Road
Episcopal Housing Initiative. Jericho Road is a non-profit
community development organization established in 2006 in
response to the pressing need for affordable housing in the
aftermath of Hurricane Katrina. As a lifelong citizen of New
Orleans, with a 20-year career as a housing professional, I
have witnessed and been a part of the post-Katrina
revitalization efforts as a homeowner, a former government
employee, and a non-profit executive. I look forward to
addressing the current conditions in the market, progress made
over the 10 years, and the challenges that still remain
regarding housing in post-Katrina New Orleans.
A current snapshot of the housing market conditions in New
Orleans is as follows: fair market rent in New Orleans for a
one bedroom apartment is $767 per month, or $9,204 per year;
the median income in New Orleans is $37,000 per year; the
median rent is $765, and the average home value is $183,000 per
unit; homeownership rates in New Orleans are at 45 percent,
well below the national average of over 60 percent; African
American households disproportionately pay more of their income
towards housing costs; more than 60 percent pay over one-third
of their monthly income toward housing costs; both rent and
home values have increased close to 50 percent since 2000; and
approximately 58 percent of all households pay over one-third
or more of their income towards housing, as Congresswoman
Waters alluded to earlier.
Housing is typically the highest cost for any household.
However, housing is only one of a household's many
expenditures. New Orleans saw a substantial increase in housing
costs from 2000 to 2013, far outpacing the increase in median
incomes. Rents have increased by 102 percent or 50 percent when
adjusted for inflation, while home values have increased 109
percent or 54 percent when adjusted for inflation. As with
income, the most drastic increases in home value have been seen
at the high and low ends of the cost spectrum. The percentage
of homes valued below $100,000 has been reduced by more than
two-thirds, while the percentage of homes valued over $300,000
has more than tripled. While rents and home prices continue to
increase, household income has not significantly changed since
the year 2000. In fact, when adjusted for inflation, median
income in New Orleans has dropped by 15 percent since 2000.
Thus, the decrease in income has severely impacted current
housing market conditions in the City.
Homeownership: In New Orleans prior to Hurricane Katrina,
for many low- to moderate-income working families, the ultimate
dream of homeownership was an attainable goal. The average cost
of the typical three-bedroom/two-bath home before Hurricane
Katrina ranged from between $80,000 to $100,000. In the wake of
Hurricane Katrina, the real estate market has changed
tremendously, and the average price for that same three-
bedroom/two-bath home is now starting at $159,000.
This increase is precipitated and compounded by several
factors which serve as very challenging impediments to
affordable homeownership in the City of New Orleans. These
impediments include a decreased supply of undamaged homes in
the market, increased construction costs for both labor and
materials, increased insurance premiums and property tax costs,
and a lack of resources for increased gap financing needs for
families. There were various programs funded by the Federal
Government and administered by both the State and the City to
mitigate some of these impediments.
Two of the most successful programs were soft second
programs that provided gap financing for families who were
attempting to purchase homes post-Katrina. The first program
was sponsored by the Finance Authority of New Orleans. This
program was funded with $27 million of Disaster Community
Development Block Grant funds and served 1,140 families from
the period of 2005 to 2014. However, this program has exhausted
its resources and is no longer accepting applications.
The second program was managed by the City of New Orleans,
and the program began in 2012 and has closed 891 homes across
the City and was also funded by CDBG funds. The average program
participant qualified for a $91,000 first mortgage. They
received a second mortgage in the amount of $51,000, and they
also needed about $5,000 in closing cost assistance.
The third major program sponsored by the government for
homeowners was the Road Home Program, and this was for existing
homeowners. The Road Home Program represents the largest single
housing recovery program in history. Eligible homeowners
received up to $150,000 in compensation for losses and had 3
compensation options. The program has been closed to new
recipients since 2007.
As of mid-2013, the Road Home Program has successfully
assisted more than 130,000 Louisiana citizens affected by
Hurricanes Katrina and Rita. The program has disbursed more
than $8.9 billion to residents of Louisiana to rebuild their
homes. With regard to New Orleans, 46,884 households received
$4.2 billion in grants from the Road Home Program. Of the
homeowners who chose Option 1, 94 percent have rebuilt their
homes.
Increased insurance premiums and property taxes are now
taking a toll on residents of Gulf communities. Annual
homeowners' insurance premiums have tripled, and in some cases,
for the newly insured, quadrupled in post-Katrina New Orleans.
This is compounded by the fact that many large insurers no
longer write policies in the City of New Orleans. New
homeowners have had to rely solely on the insurance of last
resort, the Louisiana Citizens FAIR Plan.
Homeowners have also seen significant increases in flood
insurance premiums. Although homeowners have access to the
generally affordable, federally managed National Flood
Insurance Program, market conditions reflect an increase in
these premiums as well, by as much as 4 times in some areas of
the City. Additionally, the new administrative fees that have
been added to the National Flood Insurance Program have also
impacted affordability to homeowners.
In addition to the increased insurance --
Chairman Luetkemeyer. Ms. Barnes, we are getting well over
5 minutes. Can you wrap it up in just a few comments?
Ms. Barnes. Yes, sir.
Chairman Luetkemeyer. I noticed that you have 2 pages to go
there.
[laughter]
Ms. Barnes. I know. We have a lot going on.
Chairman Luetkemeyer. That is great. We will ask a lot of
questions and get into that information.
Ms. Barnes. I do want to emphasize that moving forward, we
recognize all of the practitioners and persons who are working
in housing in the City, the need to work together and to come
up with a plan to, if you will, remove the second half of
recovery, because I think right now we are probably at half of
where we need to be in terms of the City and the housing issues
and citizens returning to New Orleans.
So with that being said, we have been working--all of the
practitioners, government officials, and stakeholders have been
working on a plan called HousingNOLA, and it is a new 10-year
plan for the City of New Orleans to look at housing, to figure
out the best way to invest the little funding or the shrinking
funding that we are seeing coming down with regard to housing
and investment projects for rental and homeownership.
[The prepared statement of Ms. Barnes can be found on page
48 of the appendix.]
Chairman Luetkemeyer. Very good. Thank you.
Ms. Hill, you are recognized for 5 minutes.
STATEMENT OF CASHAUNA HILL, EXECUTIVE DIRECTOR, GREATER NEW
ORLEANS FAIR HOUSING ACTION CENTER
Ms. Hill. Thank you. Good afternoon, Chairman Luetkemeyer,
Ranking Member Waters, Ranking Member Cleaver, and members of
the subcommittee. My name is Cashauna Hill, and I am executive
director of the Greater New Orleans Fair Housing Action Center
(GNOFHAC). GNOFHAC is a non-profit civil rights organization
established in 1995 to eradicate housing discrimination in the
greater New Orleans area. Through education, investigation, and
enforcement activities, we promote equal opportunity in all
housing transactions, including rental, sales, lending, and
insurance. We are funded in part by the Fair Housing
Initiatives funds from HUD. Our work since Hurricane Katrina
has focused on ensuring that all former residents of the City
can return to their homes with the guarantee of fair housing
choice.
Thank you for hosting this important hearing today, and
thank you for inviting me to participate.
August of this year marked a decade since Hurricane Katrina
made landfall, and many of you are well aware of the great
accomplishments and many persistent challenges that this City
and region have faced. I would like to provide you with just a
quick sketch of some overall indicators of recovery, both at
the City and regional levels.
Of New Orleans' more than 70 neighborhoods, more than half
of those neighborhoods have recovered over 90 percent of their
population, according to the New Orleans Data Center. In the
last 4 years alone, New Orleans has grown an additional 12
percent. However, despite rapid growth and ongoing recovery,
approximately 100,000 African Americans have not yet returned
to New Orleans.
Regionally, surrounding parishes have also shifted
demographically in the decade since Hurricane Katrina. These
shifts are consistent with trends nationwide and the
suburbanization of poverty as low- and moderate-income people
are pushed out of City centers. However, the ``Katrina Effect''
certainly accelerated trends seen at more gradual rates in
other cities nationwide.
In Jefferson Parish, for example, just west of Orleans
Parish, the population rebounded far faster than New Orleans,
with 95 percent of its pre-storm population back by 2010, while
New Orleans had only 71 percent of its pre-storm population
back at that time.
To the south of Orleans Parish lies St. Bernard Parish. In
2006, the Fair Housing Center filed suit against St. Bernard
for enforcing a ``blood relative only'' ordinance that
prevented St. Bernard homeowners from renting to any person who
wasn't a blood relative. As we know, because 90 percent of
homeowners in the Parish were white at that time, most single-
family homes would have only been available to white tenants.
The ordinance was passed at a time when New Orleanians
forced out of their homes by natural disaster were desperately
seeking housing options with reduced housing stock and limited
options available. As New Orleanians, who are majority African
American, sought stable housing options, surrounding
communities unfortunately erected barriers to entry.
Since the 2006 litigation and widespread press coverage,
St. Bernard Parish has integrated considerably.
By far, the largest congressionally funded housing recovery
program in U.S. history has been the Road Home Program. The
program was designed, as we heard, to provide direct cash
rebuilding grants at a maximum of $150,000 for storm-impacted
homeowners.
In 2008, GNOFHAC filed a lawsuit against the State of
Louisiana and HUD because of the design of the Road Home
Program. The housing counseling staff at GNOFHAC, working
directly with homeowners seeking Road Home funds, noticed that
many African American clients received smaller grants than
white clients, even when the homes had similar square footage,
had sustained comparable damage, and were estimated to cost the
same amount to repair. The grant formula was based on the pre-
storm value of the home rather than on the actual cost to
rebuild. As a result of this formula, homeowners from white
neighborhoods received more than homeowners from African
American neighborhoods, even when the costs to rebuild were the
same. I know that in 2008 and again in 2009, this committee
heard extensive testimony from the Fair Housing Center about
this program, so I won't go into any more details about that.
The plight of renters in the aftermath of Hurricane
Katrina, as Ranking Member Waters stated, is particularly
striking, as New Orleans is a City where more than half of the
residents are renters, rather than homeowners. Yet, there was
never a comprehensive plan to rebuild or repair this largest
slice of the housing market. In fact, 50 percent of private
market rentals were destroyed or damaged in the aftermath of
the storm.
The results of this lack of a comprehensive rental
rebuilding program are twofold: first, much of our rental stock
is low quality as a result of deferred maintenance, with
families living in substandard housing that creates a
significant public health concern; and second, there is
tremendous pressure and competition in our rental market.
The Citywide average rent in New Orleans is up 40 percent
since before the storm, yet household income has only gone up 2
percent. As we heard, close to 60 percent of renters in the
City are rent-burdened, and they pay more than 30 percent of
their income toward rent and utilities. Shockingly, more than
one-third of New Orleans renters are severely rent-burdened,
which means that they pay more than 50 percent of their income
towards rent and utilities. Increased competition for limited
remaining rental stock has pushed middle- and lower-income
people to the margins of the housing market here in New
Orleans. Further, we have not been immune to the effects of
gentrification, which is common to other cities.
I do want to briefly wrap up with a note about HUD-assisted
clients. As this committee is very well aware, after Hurricane
Katrina many thousands of units of public housing were
demolished. The vast majority of those former public housing
residents received Housing Choice Program vouchers. As portable
subsidies, the vouchers are often referred to as a way to
provide better housing choice for HUD tenants and increase
housing mobility.
However, this transition hit New Orleans at precisely the
moment when approximately 50 percent of the rental housing
stock had been lost, increasing the demand but reducing the
supply, and putting program participants in competition for
remaining limited housing stock.
As a result, the voucher program has helped to increase
residential segregation in the City in the decade since
Katrina. The program includes nearly a quarter of our City's
renters. In 2010, there were about 18,000 families using
vouchers to subsidize their rent, up from about 8,400 in 2005,
and this reflects the replacement of unit-based assistance with
tenant-based vouchers.
We know that in the 10 years post-Katrina, housing options
have become limited for HUD-assisted clients, deepening racial
segregation and living patterns in neighborhoods of extreme
poverty.
With that said, I would like to thank you all for your
commitment and interest in our hometown. I look forward to your
questions. Thank you.
[The prepared statement of Ms. Hill can be found on page 56
of the appendix.]
Chairman Luetkemeyer. Thank you, Ms. Hill.
Ms. Washington, you are now recognized for 5 minutes.
And for the remaining witnesses, we have your written
testimony. So if you can summarize what you want to talk about,
if you have something you want to highlight, we want to give
you plenty of time here, but by the same token, be respectful
of everybody else's time. So if you could stay close to 5
minutes on this, that would be great. Thank you.
STATEMENT OF TRACIE WASHINGTON, MANAGING DIRECTOR, LOUISIANA
JUSTICE INSTITUTE
Ms. Washington. Thank you, Mr. Chairman. Staying close to
within 5 minutes for a trial attorney is a challenge.
[laughter]
Chairman Luetkemeyer. You understand you are talking to
politicians, too, right?
[laughter]
Chairman Luetkemeyer. We know all about how to take up the
time.
Ms. Washington. I will try to summarize, and not go over my
time, because you have heard some of the testimony that I was
prepared to give.
So, Chairman Luetkemeyer and Ranking Members Cleaver and
Waters, and members of the subcommittee, thank you for this
opportunity to provide testimony today about the fundamental
importance of rebuilding communities after disasters, and as
related to the mission of the Subcommittee on Housing and
Insurance, your committee has been crucial to this work, and
certainly you must know that the City of New Orleans could not
have been rebuilt and redeveloped without the work of Congress
and your understanding of the needs of displaced residents.
My name is Tracie Washington, and I serve as President and
CEO of the Louisiana Justice Institute, a non-profit civil
rights legal advocacy organization and law firm.
Immediately following Hurricanes Katrina and Rita, I
located to Beaumont, Texas, and then Austin, Texas, where I
began my practice early in my career, in 1989. I returned to
New Orleans first in October 2005 to evaluate the state of my
home and my father's home and rental properties, and to begin
assessing whether I could return home.
In December 2005, after my son had completed his fall
semester of 7th grade, we returned to New Orleans solely to
celebrate Christmas and to hire contractors. It was not my
intent to stay. In fact, I accepted employment in San Antonio,
Texas. But my son convinced me otherwise. Even at age 10, he
understood the value of home and family, and he convinced me,
his jobless mother with a home badly in need of repair, that
New Orleans should be our home. So I want to focus there and
not go off script with some others.
It is that 12-year-old statement and his plea to remain
home that was the plea of so many people in the City of New
Orleans, and I want to talk to you today about some of those
left behind, particularly individuals who live in public
housing.
Now, many individuals accuse advocates like me of providing
only bad news, what hasn't occurred in 10 years since Hurricane
Katrina in terms of housing recovery. So let me begin there and
state unequivocally that the state of housing has improved in
New Orleans post-Katrina. That is an undeniable fact.
Look around you. The City has rebuilt in many places, and
rebuilt very, very well. But there are troubling facts still
remaining, and I will take up where Cashuana left off. I want
to talk about who we left behind in public housing, and think
about this fact: There were 8,000 families receiving Housing
Choice vouchers in 2005, and 18,000 by 2015 receiving those
same vouchers in a community that just could not sustain the
extra 10,000 people.
The other side of the housing redevelopment story is
important for your committee here because it is the story of
individuals left out of recovery and for whom the promise of
return to rebuild New Orleans, a recovered New Orleans, a New
Orleans with streets that had been formerly pockmarked with
despair but would be paved with prosperity, has been broken.
We are a nation of values. We are a nation that keeps its
promises. I want to tell you there remains a debt to those
individuals left behind. The mistrust you heard often during
the 10-year commemoration had its impetus from two events: that
Dallas meeting of the fab four of business leaders convened to
say how the City would be rebuilt and who would be invited
back; and that horrible discoloring of our City with these
obscene green dots to be designated as green space, never to be
rebuilt. Those areas were the predominantly African American
communities in the City containing the generational wealth of
homes that had been passed from within families that could
never be reclaimed.
But it is also the story of the fight, because while
African American citizens were displaced and often homeless,
they returned en masse in February of 2006 to tell City
officials they would rebuild, and they demanded the moratorium
on rebuilding permits in their neighborhoods.
But the residents of public housing weren't as lucky. Even
with the Herculean efforts of Professor Bill Quigley and his
outstanding attorneys at the Loyola University School of Law
Property Law Center, attorney Judith Browne-Dianis, Co-Director
of the Advancement Project, and myself, the Louisiana Justice
Institute and scores of attorneys led by Ross Bricker from the
Chicago law firm of Jenner and Block, who filed a landmark
Anderson v. Jackson public housing litigation for the B.W.
Cooper, St. Bernard, C.J. Peete, and Lafitte communities.
And I want to tell you, these were communities of residents
who were not saying we don't want our areas to be rebuilt. They
were communities that said we want to return to those rebuilt
communities.
I said I was a trial attorney, and I guess I am. It didn't
seem like 5 minutes. I want to close by just letting you know
that we serve just 9 percent of those public housing residents
now. The same promise we owe to the individuals who own their
homes, who rented homes, that same promise to return should
have been fulfilled by and for those public housing residents.
We still fight. We still fight because we know they have
the right to be back, and we have not fulfilled that promise.
So I thank you for allowing me to testify, and I am
available for questions.
Chairman Luetkemeyer. Thank you very much.
Do we have a copy of her testimony? I don't have it in my--
do we have a copy of it? If you have a copy--
Ms. Washington. I have been crossing it out, but I can give
it--
Chairman Luetkemeyer. All right, very good. We need to have
that before we leave today. Thank you. Thank you very much, Ms.
Washington.
Mr. Fortner, thank you very much again for the tour you
gave us today. It was very informational and you did a good job
of keeping us on track.
You are now recognized for 5 minutes.
STATEMENT OF GREGG FORTNER, EXECUTIVE DIRECTOR, HOUSING
AUTHORITY OF NEW ORLEANS
Mr. Fortner. Chairman Luetkemeyer, Ranking Member Cleaver,
Congresswoman Waters, Congressman Green, and our own New
Orleanian, Congressman Cedric Richmond, I am Gregg Fortner,
executive director of the Housing Authority of New Orleans, or
HANO, and it is my privilege to appear before you today on
behalf of HANO, the HANO Board of Commissioners, the City of
New Orleans, and most importantly, the nearly 50,000 New
Orleanians directly served by the housing programs administered
through HANO.
On July 7, 2014, HANO was returned to local control after
various forms of HUD receivership since 1996. In partnership
with HUD and the City, today's HANO has continued and improved
upon the reform and progress experienced during the 18 years of
HUD receivership. Today, HANO administers almost 18,000 Section
8 Housing Choice vouchers and manages over 4,000 housing units
on HANO-owned sites throughout the City of New Orleans through
direct service or contracts with third-party property managers.
As a result, today's HANO provides affordable housing
assistance to more than 25 percent of all renter households in
the City of New Orleans.
HANO is crystal clear in its mission to provide affordable
housing opportunities for low-income residents of the City of
New Orleans. Yet, we realize that HANO has a vital role in the
future affordable housing strategies for the entire City of New
Orleans.
This year, on August 29th, the entire country remembered
the 10-year anniversary and the devastating impact of Hurricane
Katrina on the City of New Orleans. As we move forward in a
City continuing to rebuild while preserving the rich culture
that defines the unique flavor of New Orleans, we must also
acknowledge that the affordable housing environment has
experienced a dramatic change over the past 10 years since
Katrina.
Recent studies report that prior to Katrina, the average
renter in New Orleans spent about 19 percent of household
income for rent. Today, studies report that almost 40 percent
of renters in New Orleans pay more than 50 percent of income
towards rent. These numbers further illustrate the need for the
comprehensive approach currently being undertaken by the City
of New Orleans to ensure that the affordable housing needs of
the current and future citizens of New Orleans are met through
leveraging of existing and future resources, and partnerships
involving the entire New Orleans housing and business
communities.
On August 21, 2009, Congresswoman Waters held a
congressional field hearing here in New Orleans, through the
Subcommittee on Housing and Community Opportunity, to discuss
the progress of HANO's recovery efforts 4 years after Katrina.
Today, I have given you written testimony that updates you on
the progress of those recovery efforts now 10 years after the
storm, including the Choice Neighborhoods Initiative in
Iberville and the so-called Big Four, which formerly were known
as Calliope, Magnolia/CJ Peete, St. Bernard, and Lafitte. My
update contains the original construction date of these
properties, the original number of units, the funding sources
used for the redevelopment, the current number of units, and
the cost of the full redevelopment program.
These are the major projects that make up the majority of
the over $1.2 billion in Federal investment to rebuild public
housing in New Orleans after Katrina through Federal funding
sources. Even with that tremendous commitment from the United
States Government, the 2,000 replacement units of pure public
housing fall well short of the pre-Katrina numbers of over
5,000 occupied public housing units.
Over the past 2 decades, the reduction in public housing
operating subsidies and capital funds have dictated a new
dynamic in redevelopment of this Nation's 1.2 million public
housing units. Communities with 100 percent public housing
cannot be sustained. As a result, mixed-income communities have
become the mandate to produce revenue-generating units that can
support the funding challenges faced by the traditional public
housing inventory.
Although the public housing inventory for the City of New
Orleans has decreased by over 3,000 units since Katrina, the
Section 8 Housing Choice Voucher Program has increased by
almost 9,000 vouchers allocated to the City of New Orleans. As
a result, HANO is serving over 30 percent more households now
than before Hurricane Katrina. HANO operates the 15th largest
HCV program in the country, paying out almost $150 million
annually to Section 8 property owners on behalf of the nearly
18,000 HCV participant households in the City of New Orleans.
As I conclude, I again want to thank the subcommittee for
the continued commitment and interest in the ongoing
revitalization efforts by HANO and the City of New Orleans.
HANO will continue to effectively and creatively utilize all
its assets and resources in the furtherance of providing
affordable housing opportunities to the citizens of New
Orleans. We further pledge that we will be exemplary stewards
of public funds and justify the public trust that HANO is
committed to sustain. Thank you.
[The prepared statement of Mr. Fortner can be found on page
52 of the appendix.]
Chairman Luetkemeyer. Thank you, Mr. Fortner. You came in
right at 5 minutes. Congratulations. Thank you.
Ms. Uddo, you are recognized for 5 minutes.
STATEMENT OF CONNIE UDDO, DIRECTOR, ST. PAUL'S HOMECOMING/
SENIOR CENTER
Ms. Uddo. Thank you. Thank you so much for having me today.
My name is Connie Uddo, and I am the director of the St. Paul's
Homecoming Center, which operated as a Hurricane Katrina
Recovery Center from 2006 to 2014 in the Lakeview and Gentilly
neighborhoods of New Orleans, and we would still be operating
today had we not lost our funding in 2014.
In preparation for this testimony, I found previous
testimony that I presented in Washington, D.C., on May 24,
2007, to the ad hoc Subcommittee on Disaster Recovery, chaired
by Senator Mary Landrieu. As I read through my testimony in
preparation for this, I realized that not much has changed in
regards to how government addresses disasters in our country.
Thank you for inviting someone like me who is not with a
government agency or a private contractor, but someone who has
been on the front lines of this recovery for 10 years in New
Orleans. Being an everyday citizen was an asset in many ways,
as I used commonsense approaches to rebuilding the community,
gained the trust of the residents quickly, and knew the
geography and demographics of the neighborhood. I will do my
best in this testimony to point out what worked and really what
didn't work from a boots-on-the-ground, everyday-citizen
perspective.
I appreciate that you all recognize a need to become more
expedient, efficient, and humanitarian in your approach to
disaster recovery. It is very important that this process
changes and that we get this right as disasters are becoming an
everyday occurrence in our country.
In January 2006, my family was the first of 10 families to
move back to our devastated Lakeview neighborhood of 8,000
flooded homes. While living very much alone and seeing there
was very little help coming our way, I realized that the
recovery was going to be up to us, and the quicker we got
going, the better off we would be. I started a recovery center
out of my home, and our mantra in Lakeview became, don't wait
for the government, they will slow you down and hold you up. If
we do, we will wallow in bureaucracy and false promises.
As a result, Lakeview became the model in the City of New
Orleans for do-it-yourself recovery. Using organizational
skills, volunteers, and connections to the private sector--we
were wiped out just like everybody else, we didn't have a lot
of money like people thought we did--the residents united and
raised funding for the rebuilding of schools, churches, a
firehouse, and our public green spaces, all while waiting for
FEMA to get their act together.
People of New Orleans were both physically and emotionally
devastated by Katrina. Depression shifted from the storm to the
recovery, where hopelessness and stress continued for years due
to the failures of government programs such as the Louisiana
Road Home Program, the Hazard Mitigation Program, and the
Nonprofit Rebuild Pilot Program, NRPP, to name a few.
ICF was awarded a $756 million contract to run two
Louisiana Road Home Programs, the Homeowner Effort and the
Small Rental Repair Program. Both programs failed so miserably
that ICF International is reviled by most Louisianans and is
essentially banned from doing new business with the State, but
walked away $900 million richer, holding lucrative contracts
with governments across the country. The employee who landed
the contract for ICF was awarded a $1 million bonus while
thousands of people were struggling to rebuild their homes and
to return home.
I am going to skip a lot of the failures of the Road Home
Program because that is in my testimony, and I think most
people know about the cumbersome verification procedures, the
pre-storm appraisal. The paperwork was constantly lost, the
case managers constantly changed, the lack of caring really for
the suffering and unwillingness to find ways to help desperate
homeowners is what I really saw. We even gave Road Home free
office space at my center for a solid year to meet with
residents. When we were running out of funding, I actually
reached out to ICF and said would you consider maybe even
making a donation to help us keep going, and they said they
didn't do that kind of thing. Yet they put $900 million in
their pockets and took free office space from us, and we did
this just to try to keep the process going.
Which leads me to when a for-profit company is
administering the program, their priority is to make money for
their company, and therefore they avoid spending any extra
money to assist homeowners in the manner they need.
The Hazard Mitigation Program is another one. This is a
State-run program that contracted much of the work out to the
for-profit private contractor Shaw. My whole testimony, what I
am really pointing out here is that as long as we keep giving
the for-profit private contractors these contracts, we will be
in these situations today.
At one time, one of our clients was told that this was the
reimbursement program, the Hazard Mitigation. This money was
given to raze your house. Many homeowners borrowed. Once they
were approved, given the green light, they borrowed from family
members, took seconds out, whatever, and then razed their
houses, and in many cases after they did it, they were told
that a mistake had been made, the rules had changed, and they
no longer qualified.
One of our cases was--one of our homeowners was middle-
class, a white male with three young children. After being
turned down, he borrowed $80,000 from his family, his parents'
retirement fund money. After they turned him down, he literally
took his life, committing suicide, shooting himself under his
carport.
So my point is--and then I will go into the Nonprofit
Rebuild Program. It was a program that was given to the non-
profits like myself. Now, this was also reimbursement from the
State. That failed so miserably that Catholic Charities, and
the Episcopal Diocese, to name a few, closed their doors
because we waited for years and years to be reimbursed hundreds
of thousands of dollars.
I want to close by saying this: My point is that the non-
profits are much more well-prepared in this country, and the
first people who show up in a disaster, as you probably saw in
Joplin, were the faith-based and non-profits. They are there
for the long haul. I call them the second responders, but we
are there for the long haul. We are never invited to be a part
of these contracts, to bid on them or whatever. I would love to
see something change that the non-profits and the faith-based
are included more in being able to administer these programs,
versus the private, for-profit contractors.
So I just would like to say in closing that I have
experienced firsthand what happens when government and the non-
profit and faith-based can come together and meet in the
middle. I have worked very closely with the mayor's office here
and many other City agencies, and I can tell you that when we
can meet in the middle and we can come together and the funding
could be given to us rather than the for-profit, private
contractor, we could be an unstoppable force. You would see
much more impact made and communities restored much more
quickly and efficiently.
[The prepared statement of Ms. Uddo can be found on page 77
of the appendix.]
Chairman Luetkemeyer. Thank you, Ms. Uddo.
Ms. McConduit-Diggs, thank you for being here. You are
recognized for 5 minutes.
STATEMENT OF ERIKA MCCONDUIT-DIGGS, PRESIDENT AND CHIEF
EXECUTIVE OFFICER, URBAN LEAGUE OF GREATER NEW ORLEANS
Ms. McConduit-Diggs. Thank you again for inviting me to
appear before you. My name is Erika McConduit-Diggs. I am the
president and CEO of the Urban League of Greater New Orleans.
We are one of 94 affiliates of the National Urban League, an
historic civil rights organization whose mission is to enable
communities of color to secure economic parity, power, civil
rights, and self-reliance.
The housing empowerment goal for the National Urban League
is to ensure that every American has access to decent, safe,
and affordable housing on fair terms. I am here today to
discuss the current and historic practices and policies that
contribute to housing inequities and the broad disparities that
exist between African American and white communities; and
finally, the efforts the government can make to address and
eradicate the problem.
For greater context, I urge you to read the Urban League of
Greater New Orleans' publication released at the 10th
anniversary and entitled, ``The State of Black New Orleans: Ten
Years Post-Katrina.''
As the 10th anniversary of Hurricane Katrina has come and
gone, many people have been amazed at the level of progress New
Orleans has made. However, the road to recovery has been paved
with many inequities. The post-Katrina New Orleans recovery is
really a tale of two cities. African Americans and communities
of color in New Orleans have had a markedly different
experience with the recovery than white residents. This is
clear from the varying responses from a recent survey conducted
by the Public Policy Lab at the LSU Reilly Center, where nearly
80 percent of white New Orleanians feel the City has mostly
recovered, but less than 60 percent of African Americans feel
this way, and over 60 percent of white residents feel the
economy is better now than pre-Katrina, but only 10 percent of
African Americans feel this way.
As a native New Orleanian, I am intimately aware of the
inequities that have contributed to the disparate perspectives
of African American and white residents regarding post-Katrina
New Orleans recovery. Historically, African Americans have
encountered discriminatory practices that pushed them into low-
lying neighborhoods of the City, practices such as redlining
and, later, green dots. The residual effect is that some of
these issues remain a barrier to housing equity in New Orleans.
Additionally, accessing insurance enough to fully insure a
home was and continues to be out of reach for many African
American families in New Orleans because the cost to do so is
beyond the financial means of the working class. This has made
it significantly more difficult for many families to return to
the City, resulting in a sharp decline in the number of African
Americans post-Katrina.
Before Katrina, more than two-thirds of the City's
residents were African American, and now only approximately 60
percent of the population is; that is more than 100,000 African
Americans who have not returned since the storm, compared to a
loss of only about 11,000 whites.
Approximately 70 percent of white residents were able to
access their homes within a year, compared to only 42 percent
of African Americans. And only 54 percent of African American
residents returned to their pre-Katrina communities, compared
to over 80 percent of whites.
Additionally, policies and practices in post-Katrina New
Orleans have resulted in a slower recovery in African American
neighborhoods, particularly New Orleans East and the Lower
Ninth Ward. Increased insurance costs, low-wage jobs and poor
economic prospects, flawed Road Home policies and other related
challenges have worked against the goal to thoughtfully de-
concentrate poverty instead of having limited options available
for African Americans to repopulate and re-resource
neighborhoods. In many instances, the recovery process has been
implemented unfairly on its face and in application, and has
exacerbated many of the inequities that existed prior to
Katrina.
According to the National Urban League's 2015 State of
Black America Equality Index, African Americans have only 6
cents of wealth for every dollar of wealth that whites have
nationwide. Unfortunately, most of this wealth, approximately
90 percent, is tied up in African Americans' homes. Locally,
the wealth gap between African American and white New
Orleanians can be explained by highlighting several key
economic inequities.
At approximately 27 percent, New Orleans' poverty rate is
more than double that of the national rate. More than half of
African American children in New Orleans live in poverty. More
than half of African American men in New Orleans are not
connected to the workforce. Only 14 percent of African American
men and 21 percent of African American women had Bachelor's
degrees or higher in 2014, compared to 63 percent of white men
and 64 percent of white women in New Orleans. Minority
businesses represent nearly 27 percent of businesses in New
Orleans, but only account for 2 percent of gross receipts. The
median income for African American residents is just over
$25,000, compared to whites who earn nearly $61,000.
When directly compared to the current average cost of
homeownership and insurance rates, African American New
Orleanians are at a severe disadvantage compared to their white
counterparts. And I would be remiss if I did not mention the
high rates of incarceration of African Americans in this City
and its economic impact on the African American community. One
in seven African American males in New Orleans is under the
supervision of the criminal justice system, and African
Americans represent only 60 percent of the population but make
up more than 90 percent of the local prison population. High
rates of incarceration in New Orleans are almost exclusively
impacting African American communities.
Individuals with criminal convictions have greater
difficulty accessing economic opportunities and even more
challenges acquiring housing for themselves and their families.
The impact of the criminal justice system on economic and
housing security for African Americans in New Orleans must be
underscored. The wealth gap, which has been exacerbated by
issues of the criminal justice system and educational
attainment, must be considered when developing policies aimed
at improving housing equity in New Orleans and nationwide.
And I know my time is up, so I will stop there.
[The prepared statement of Ms. McConduit-Diggs can be found
on page 64 of the appendix.]
Chairman Luetkemeyer. Thank you. Thank you, Ms. McConduit-
Diggs.
Let me begin by recognizing myself for 5 minutes and start
the questions with Mr. Fortner.
In going through our tour today, it was obvious to me that
the activities that you are engaged in to try to build
basically a new community here are such that you are not
necessarily trying to build a place where people live, you are
trying to build a place where people can have a life. I think
that it was very encouraging to see what you have done.
I guess my question would be, what can we do as a
legislative body representing the Federal Government to enhance
your ability to be able to do more with what you have the
opportunity to qualify for here?
Mr. Fortner. Thank you, Mr. Chairman. As you know,
everything comes down to the almighty dollar--$1.2 billion was
invested in New Orleans to rebuild public housing. It can be
used as a model across the country as what the proper
investment in public housing and in these communities are
filled with comprehensive services, not just living facilities
but, as you saw today, child care facilities, pre-school,
after-school. All this is a comprehensive life, because it is
not just about decent, safe, and sanitary. Decent, safe, and
sanitary now talks about not just bricks and mortar but
uplifting the human condition, empowering our residents, and
giving them a better future as they move along.
Easing of regulations can always help us toward
flexibility. But when it comes down to building communities,
there needs to be the proper investment from not only the
Federal Government but from the State and local, and our
business community also.
Chairman Luetkemeyer. I was talking to the gentleman this
morning whenever we were walking along, and I asked him, I
said, you have done a good job of coordinating all the
different State, Federal, local funds, non-profit and profit,
and getting everybody together to try to help in this. I said,
what is the one thing that could really help to make this work,
and he said flexibility, if we can find ways to make the rules
and regulations more flexible.
Obviously, we are accountable for the taxpayer dollars. We
have to make sure they are used wisely and that they are
accounted for. But at the same time, if there are ways that you
see--I know right now we have a bill in Congress we are working
on to try to do that very thing with HUD, to enable them to be
more flexible to be able to address problems without going
through a laundry list of boxes to check to make sure they do
things.
Is that something that you can point to a particular
situation where if we had this flexibility, we could move these
things around, we could respond more quickly or be able to do
more things? Do you have anything like that in mind off the top
of your head?
Mr. Fortner. I have been in public housing since 1986. That
is almost 30 years. And during that whole time, the word
``deregulation'' has popped up every other year.
Chairman Luetkemeyer. And they take one rule off and add
two, right?
Mr. Fortner. Exactly. The more flexibility we have with the
dollars, because you can't take a cookie-cutter approach from
D.C. and design programs that are going to fit every community
across the country. So the flexibility that we can have--the
New Orleans environment is that dynamic after Katrina and
moving forward is going to be different from a Los Angeles or a
St. Louis, or even another city or the country.
The flexibility to have local programs, designed for local
needs, will be of vital importance and will facilitate housing
programs being more successful.
Chairman Luetkemeyer. Very good.
Ms. Barnes, you mentioned something about some soft grants,
soft second mortgage grants, and the program is no longer
there. Was it successful, or was it a failure? Was it just so-
so? Can you give me an opinion on that?
Ms. Barnes. The programs were extremely successful.
Chairman Luetkemeyer. Extremely successful.
Ms. Barnes. And they provided the only opportunities for
working families in New Orleans to be able to cover the gap
between what they make in income and what they can qualify for
first mortgages and what housing prices are post-Katrina. These
programs are funded through various funding sources that come
to the City through the HOME program, through the National
Housing Trust Fund, which have been decimated, if you will, in
the years subsequent to the disaster recovery funds that we
have received. Without that, the people who work in the
backbone of our economy, which is tourism in the City of New
Orleans, will not be able to afford to live here.
The persons working in that industry make, on average,
about $23,000 a year. If they are lucky, they make up to
$37,000 a year. Without those gap financing resources to help
them to be able to become homeowners, to be able to pass on
wealth to their children, to be able to live in the City that
they maintain the entire economy for, we will see a City that
has pushed out the people who are responsible for all of the
income that comes into the City.
Chairman Luetkemeyer. Very good. Thank you.
Mr. Randall, you talked a while ago about mixed-income
neighborhoods, how important it was. Can you expand on that
just a little bit, why it is important? And I think it is
important to get on the record the reason that--and Mr. Fortner
was talking about this on our trip today, why it is important
to sort of shift in that direction and, quite frankly, why it
helps build more of a community rather than just a place where
people live?
Mr. Randall. Definitely. Thank you very much for that
question, and it is a good question, really a great question.
When you look at the fact that we have mixed-income
communities, it moves to the discussion of quality of life. A
lot of the issues that we face, whether it be NIMBYism, whether
it be affordable housing, it all hinges on the source of having
a better quality of life.
For individuals who live in public housing, they should
have the same quality of life as individuals who pay rent. So
when you see a community like a Columbia Park and you go
through it and you see it is a mixed-income community that
supports our homeless individuals and market rent, you see the
same standards, the same quality of life being really engaged
with that community.
We saw early childhood education. We saw McDonald 35. We
saw a community that could actually raise a child from cradle
to college. So that promotes the same quality of life across-
the-board. And if we can do that across this City, that would
speak volumes about rebuilding a community or recovering a
community.
Chairman Luetkemeyer. Thank you.
My time has expired. We will go to the ranking member of
the subcommittee, my fellow colleague from Missouri, Mr.
Cleaver.
Mr. Cleaver. Thank you, Mr. Chairman.
I thank all of you for your testimony.
I would like to start with you, Ms. Hill. You mentioned
100,000 African Americans have not returned to New Orleans. I
think we all know the reason for the exodus, but I am concerned
about the right of return and what you think is needed for New
Orleans to serve as a magnet to bring back those individuals
who are now, a large number of them are in Congressman Green's
district and that City. So what do you think we need to do?
Ms. Hill. Thank you. That is an excellent question. We know
that the data show that there are many contributing factors to
the reason why African American residents in particular were
unable to return to New Orleans after Hurricane Katrina.
Certainly, the implementation of the Road Home Program and the
way in which the rebuilding grants were calculated played some
role in the inability of African American homeowners to be able
to rebuild their homes and return.
Also, with voucher holders and low-income folks, the very
difficult process in terms of importing vouchers from State to
State has caused some lack of ability to return.
The lack of a right to return for former public housing
residents, as we heard from Ms. Washington, the folks who were
living in public housing didn't necessarily have a right to
return to public housing units. So we know that of the 5,000 or
so units that we lost with the demolition of the Big Four, only
about 600 of those units have actually been replaced. So if
folks didn't have a unit to return to, then they weren't able
to return home.
Also, there are ongoing issues of affordability that
contribute to people's inability to come home. As we heard,
over 50 percent of the housing stock, the private rental
housing stock, was destroyed in Hurricane Katrina, or severely
damaged. So folks were really competing for fewer units. Maybe
some of those people who were displaced didn't have the ability
to come in and compete in a highly competitive and very tight
market.
Also, displacement has become a very big problem in New
Orleans with neighborhoods rapidly gentrifying. African
American neighborhoods, particularly those that are along the
river, known as the ``sliver by the river,'' many of those
neighborhoods are higher and less prone to flooding and damage
as a result of storms, and some of those communities had been
traditionally African American, but they have become porous,
which means that white folks have moved into those
neighborhoods and gentrified them, but African Americans
haven't had the ability to move into traditionally white,
higher-opportunity neighborhoods.
So there are many contributing factors that are at play
when we talk about the lack of ability to return for African
American residents.
Mr. Cleaver. In 1950, the Israeli Knesset passed a law
called the Right of Return for Jewish residents anywhere in the
world. They could come, and the right to return was based on
some very real-life requirements, if you were born there, and
they expanded a few of them. I can't remember the date, but
they wrote it to grandparents. If your grandparents were Jewish
and left Israel, they have a right to return if they meet these
qualifications. Maybe you want to think about that.
Your testimony was a little chilling. The Road Home Program
you were saying was blocked with people who were ripping off
and taking pieces of the road. Is that a mild characterization
of what you --
Ms. Uddo. What I am really trying to say is that I just
think--and I would love to give you all this book. This is what
really opened my eyes. In the midst of rebuilding and running
the St. Paul's Homecoming Recovery Center in Gentilly, I met
those anthropologists who wrote the book from Cal State San
Francisco, and I was part of the interview process. Many of our
homeowners' stories are in this book.
She shed light on the private, for-profit contractor. When
those Federal dollars are given to the State and the State has
to administer them, they hire the for-profit, private
contractor. What we experienced and saw was that the money did
not get down to the people, and that is why the faith-based and
the non-profit had to step up to fill the void.
Our City is socially and economically where it is today not
because these programs worked. It is really because the non-
profit and the faith-based really rebuilt most of the
homeowners' houses in the City--many, many, many, thousands and
thousands--because these programs so failed the people. As they
said, the people who couldn't get enough money because their
houses weren't appraised. It should have been like an insurance
claim. It should have been based on loss and how much it costs
to build a 1,200-square-foot house, no matter where you lived.
That didn't happen. As I said, in many neighborhoods--and
this wasn't just poor African American neighborhoods but in
Gentilly, very mixed. This happened everywhere, that this
disparity in the appraisal process was just horrible. There
were 43 steps homeowners had to go through before they got an
award letter with ICF. It was so handcuffed and cumbersome.
I talked about one suicide. Our center has dealt with three
suicides because of the failures and injustices of the programs
run by private contractors. That is the bottom line. That may
be chilling, but it is really the truth, and that is why I am
so adamant about advocating that the non-profit and faith-based
become more a partner with government and included and not just
think, oh, they raise their money, and they do this and they do
that. Meanwhile, ICF pockets $900 million, and we have people
dying in the process and taking New Orleans. That is what I
meant. I hope that answered your question.
Mr. Cleaver. Yes. Thank you, Ms. Uddo.
Chairman Luetkemeyer. The time of the gentleman has
expired.
With that, we go to the ranking member of the full
Financial Services Committee, Ms. Waters from California, for 5
minutes.
Ms. Waters. Thank you very much to all of the witnesses.
Let me just say about the Road Home Program that it is a
prime example of what should not happen when we have a disaster
like this. It is not so much private contractors; it was your
governor, it was your State that did not trust the citizens and
the administrators of these cities to be able to implement a
program that was being paid for.
Anyhow, I guess that is kind of behind us.
I want to talk about the chronic under-funding of public
and assisted housing. Mr. Fortner, Federal funding for public
housing and tenant-based Section 8 Housing Choice voucher
program has been constrained in recent years, leaving many
housing authorities to adopt policies to reduce costs. How has
HANO responded to recent Federal funding constraints,
particularly following sequestration? What have been the
impacts and the public policy changes HANO has adopted?
I hear a lot about flexibility, and I hear a lot about
flexibility in the Move to Work Program. And what I am saying
about the Move to Work Program now is demonstrate to me exactly
what you have been able to accomplish. Tell me about all public
housing programs, because I am not so sure that it is simply
flexibility.
We cannot get around the fact that we need dollars, we need
money in public housing. All of this wonderful housing that you
are building, if you can't maintain it, it is going to fall
into disrepair, just like so much public housing is around the
country. So, what have been the impacts of the policy changes
HANO has adopted?
By the way, I was out at Magnolia earlier today, and the
housing was wonderful, but there are no programs there. There
is no support there. The citizens don't have anything, the
children don't have anything. So how much flexibility can you
have in order to replace the dollars that are needed? Is that
possible?
Mr. Fortner. That is a very complex question. Thank you for
asking it, Congresswoman Waters.
As you know, New Orleans is not a moving to work agency,
because I have been affiliated with a few in my career. The
success is based on the individual contract that is written
with HUD that usually says that you have to serve as many
people before as after you get this flexibility with the
individual contracts, and the MTW program, as you know,
basically waives the housing--the original 1937 Housing Act.
As far as HANO, because we are not an MTW, we can only opt
and do reform within the context of the Federal regulations
that they have.
Ms. Waters. How much of that can replace actual dollars?
Mr. Fortner. Not much. You can have local programs designed
and have better use of dollars. But New Orleans is a primary
example of the fact that other public housing jurisdictions
across the country look at New Orleans and say, if I had $1.2
billion, I could replace all my units.
There are 1.2 million public housing units across the
country. Just to give you an example of the funding challenges
that we have, as far as the operating subsidy we receive for
our public housing units, we get less than $400 per month
regardless of the size of the unit. Compare that to the Section
8 subsidy that we pay in New Orleans that is based on bedroom
size. The average payment that we pay to Section 8 owners is
over $700 per month. So public housing is expected to do the
programs that you are talking about, enhance supplement
security on half the money that the private sector gets to
serve the same population.
Ms. Waters. The question was, do we need more money?
Mr. Fortner. Absolutely.
[laughter]
Mr. Fortner. If you have your checkbook on you, we will
take $100 million right now.
[laughter]
Ms. Waters. Let me move on, Mr. Fortner.
I have spoken with some of the residents who currently live
in revitalized public housing in New Orleans who are happy with
their new homes. While this is certainly a positive outcome, I
do have concerns that only 26 percent of the public housing
units have been replaced with public housing, which is where
HANO's initial plans were. In replacing the units, this means
that there are families who have been, in effect, permanently
displaced from the communities where they once lived, and
testimony from the Fair Housing Action Center and others shows
that many of these families are worse off than before Katrina.
Over 3,000 households were displaced from public housing, and
maybe more, and only a lucky few have been able to benefit from
the revitalization efforts thus far.
We are a long way from replacing public housing in New
Orleans, which is what I so staunchly advocated for post-
Katrina. I understand that HANO has a strategy for
rehabilitating some of its scattered site public housing units
that have remained undeveloped since Katrina. Does this plan
include one-for-one replacement? Please outline for us any
remaining plans you have to bring back some of the public
housing demolished, and do you need money to do it?
Mr. Fortner. Okay. I will just make a blanket statement: We
need money.
[laughter]
Mr. Fortner. Just a back-of-the-envelope formula says that
you need two revenue-generating units to support one unit of
public housing. So a strategy that moves forward says that we
have to develop communities that provide two units for every
unit of public housing. Of course, all of our plans are driven
by whatever funding environment we are in at the time.
As I go back, the $1.2 billion was a lot of money that was
invested in New Orleans, and you see what was done with that.
The fact is that if the proper investment is put in for public
housing, then yes, you can do a one-for-one replacement. But
because of the funding situation with operating subsidies, one-
to-one replacement on pure, 100 percent public housing units
cannot be sustained.
Ms. Waters. Thank you very much.
Mr. Chairman, I yield back the balance of my time, and I
would like to thank Cedric Richmond for all of the information
that he continues to bring to us about HANO and what is going
on in the City. That information coming to us on the Housing
Subcommittee where these members serve and I sit in has been
very helpful to us. I yield back.
Chairman Luetkemeyer. Thank you.
With that, we recognize the distinguished gentleman from
Texas, Mr. Green, for 5 minutes.
Mr. Green. Thank you, Mr. Chairman.
Mr. Chairman, we all have, if we live long enough, a ``but
for the grace of God go I'' moment. Hurricane Katrina was my
``but for the grace of God go I.'' I was right down the road in
Houston, Texas. And had Katrina moved a little bit more to the
west, I could easily have been one of the many people who found
their way into my congressional district.
It has an impact on you, and the impact continues when you
hear people talk about blood covenants, you have to be in the
bloodline before you can live here.
It has an impact when you hear people talk about, as
Congressman Richmond has called to my attention, replacement
value versus repair value versus the value that the home
actually had at the time it was built.
All of these things have an impact on you, and I am still
being impacted to this day by Katrina, notwithstanding where I
lived.
One brief vignette. A family got into contact with my
office. They were out on the causeway, among the multitudes
that were on the causeway, by the way, and they had an appeal
for help. Fortunately, they were able to get help, and came to
Houston. They have had to start a new life.
These were not poor people. If you assume that it only
happened to the poor, you are sadly mistaken. Many people of
means found themselves relocated with only the clothing on
their backs. That was it.
So I feel a sense of duty and obligation to do what I can
to be of assistance. And I believe in this approach of being
holistic because we sleep in houses and live in neighborhoods.
We live in communities. You need schools. You need all of the
support systems to help the whole person recover and move
forward in life.
I also understand the need for more actual facilities and
the need to make sure you accommodate people who are without
homes. So you have to kind of balance it, and I want to do that
balancing test accurately.
To this end, I will look forward to working with
Congressman Richmond through his good offices to do what I can
to be of assistance to you.
I will pose just a question or two. The first has to do
with the CRA. Have we had any banks move forward because of
CRA, getting some assistance so that they can get those credits
under CRA? Any banks? Anybody know of anything related to CRA?
Mr. Randall?
Mr. Randall. Thank you, Congressman. We do have an active
partnership with Treasury and the FDIC that we are promoting
locally here at HUD that we are actually bringing banks to the
table to really take part in a lot of our initiatives that we
have on the ground here, namely our homeless initiative. They
have stepped up to help us tremendously in the homeless
initiative.
As you know, New Orleans was the first major city to
eradicate veteran homelessness. They played a part in that
regard. But we definitely need our banks to step up more as it
relates to the recovery aspect.
As I mentioned before in talking about promoting that
quality of life, everyone plays a part in promoting that
quality of life. I have been involved in the recovery for the
past 10 years. I have seen the best, and I have seen the worst.
So that is one of the things that we need to bring all of those
active partners, and CRA is one of those that we definitely
need to really hit the crux of revitalizing our community, and
that is something that we are committed to doing as the Federal
agency on the ground.
Mr. Green. Thank you. I mentioned that because, as you
know, financial institutions come under the jurisdiction of the
Financial Services Committee.
One final question, and this one has to do with those who
are arrested, those who are convicted and can't come home and
live with the parents, the children. They are evicted. Or if
they are arrested and the family is living in public
accommodations, they can't come in.
How do you propose, or have you proposed, or have you done
any studies, do you have any empirical evidence to show the
extent of this problem as it relates to some of what you are
trying to accomplish here? Because I would dearly like to see
us change the law. I don't want to see families separated
because someone made a mistake. I really do not. But for the
grace of God, I have not always been in Congress, and I could
have been a lot of other places. I just got lucky. Nobody was
there to see me.
So what can we do to try to alleviate this concern?
Mr. Fortner?
Mr. Fortner. Thank you, Congressman, for that question. Mr.
Randall wasn't asked this question, but HUD recently, following
the President's lead, has actually talked about making more
regulations, giving housing authorities the local control to
develop policies that can give opportunities to those people
who are reentering from whatever is going on. The housing
authority in New Orleans right now is having working groups and
stakeholder meetings with our stakeholders to talk about what
we can do to get Section 8 owners and property managers to
embrace this more liberal admission and adding members to the
households as we move forward.
We have had very successful engagement and sometimes very
controversial meetings, but we are moving towards initiating a
policy that will give opportunity to those people reentering,
from whatever facilities, back to their families and back into
apartments to qualify for our programs, and we hope to have
probably the most liberal admissions policy in public housing
across the country, and hopefully we will do that by the end of
the year.
Mr. Green. Thank you very much.
I am going to yield back, because the Honorable Cedric
Richmond has his share of time.
Chairman Luetkemeyer. Thank you. The gentleman's time has
expired.
With that, we go to Mr. Richmond from Louisiana, who is the
resident Congressman.
Welcome, and you are recognized for 5 minutes.
Mr. Richmond. Thank you, Mr. Chairman.
I will just tell you that although Joplin was after
Katrina, it certainly helps when Members have a perspective of
a natural disaster and how the government responds. It makes it
easier to understand what other communities are doing.
Let me just publicly thank the ranking member of the full
committee, Maxine Waters, for her assistance.
Maxine, we talked at the field hearing, but if you remember
the first time after Katrina, you and I and your husband Sidney
were on a bus from Baton Rouge to pick up people out of New
Orleans when the Red Cross and the National Guard were on the
side of the interstate because it was too dangerous. Then you
had the field committee hearing, and then just this past year
we worked together to reform Biggert-Waters to make sure that
our flood insurance remained reasonable and that people could
stay in their homes, although we still have work to do. And
then now with the subcommittee today.
And thank you, Al, for Houston's hospitality after the
storm. When people were looking for shelter, you all provided
it.
I do have questions. Mr. Fortner, I will just pick up from
Mr. Green's last question about stable housing for people
reentering. I am sure you got our letter that my office sent
you, talking about how important it is. One of the factors in
recidivism is the ability to find stable housing afterwards,
and we support you in your efforts to reform those rules and
make them a little bit more liberal so that people can have
housing.
But, Mr. Randall, Ms. Barnes, or Mr. Fortner, you all
mentioned the median rent, which was somewhere around $767, and
then you mentioned the median income of residents. I think in
order to look at it fairly, you have to take the median rent,
but then you have to take the median income of renters, not
everybody. So does anybody have that number, the median income
of people who rent? And if we don't, then it would be helpful
to provide it, because I believe that the median income of
people who rent puts us far above that 40 percent to 50 percent
of their income in terms of rent.
Let me just comment on what Ms. Uddo said in terms of
having the community have input in non-profits. After the
storm, one of the big frustrations, and it is still a
frustration, is that people coming in, they want to help you in
spite of yourself, as opposed to including you in terms of how
to help build it. If we would have included the people in the
community as we developed policies, we would have used
replacement value or rebuilding cost instead of appraised
value, which we fought for--I was Chair of the Legislative
Black Caucus at the time--in the legislature, but we were
overruled. We would have said that clear title in the Lower
Ninth Ward would be a significant challenge in terms of them
being able to come back, and we would have said the first thing
you do to homeowners, the most responsible people in society,
when they lose their home due to a manmade/natural disaster, is
you don't fingerprint them. In the Road Home Program, the first
order of business was to fingerprint homeowners in the process.
So when you put that in total context, I think that you see
that the cultural sensitivity and cultural experience makes a
big, big difference.
Mr. Fortner and Ms. Washington, I will ask you a question
in terms of where we are moving as a City. Is it sustainable?
If you look at the rising real estate values, and then you look
at the rising rents, and then you look at the lack of rising
wages, and then factor in the shortage of affordable housing,
and now I would say that Airbnb is going to play a role because
you are taking out units that otherwise could be rented and
they are not in that rental market, how do we make sure that
working families, ordinary people, still have the ability to
live in this great City? Because we want to be an elite City,
we just don't want to be a City of the elite. I think that is a
big difference.
So, what is your vision? Tell me how we make sure that
regular working families in New Orleans can continue to live in
New Orleans?
Mr. Fortner. Thank you, Congressman Richmond. I don't have
numbers for the average income of renters. I have numbers for
the average income of people in public housing and Section 8.
On the public housing side, the average annual income of a
public housing resident is $14,500. The average income--and
this is annual income--for people on the Section 8 program is
$11,400. That puts the population that we serve at around 20
percent of area median income.
If not for the subsidies provided by the Section 8 program
and the services provided by public housing, you are absolutely
right. With the income rate at 2 percent, and rents raised to
about 50 percent over the past 10 years, those persons at that
income level could not possibly have afforded rental housing--
decent, safe, and sanitary rental housing, affordable housing
in New Orleans today.
As we move forward, there must be some sort of serious
discussion as far as how we increase our inventory for those
affordable units. The housing authority can do what we can.
Congresswoman Waters mentioned our scattered sites program. We
had an opportunity with vacant land that we can put not only
public housing but help alleviate that public housing crisis
that is in New Orleans right now. But we have to get together
and have confidence, like we are doing with the City of New
Orleans. We have to engage the public and private entities in
New Orleans, business here, to make sure that we can look out
for the affordable housing needs well into the future, because
we are losing ground.
Mr. Richmond. Thank you, and I see that my time has
expired.
Thank you, Mr. Chairman.
Chairman Luetkemeyer. Thank you, Mr. Richmond.
We will go to round 2 here.
A quick question for--let me follow up with Mr. Richmond's
point here. He was getting to the heart of a real question that
I think is important from the standpoint of affordability. In
order for people to be able to afford the house, to me, what I
would like to see--and I asked Mr. Fortner this question this
afternoon, as to what percentage of your public housing is
elderly and disabled, and then the rest is--and I think you
said 50 percent. So 50 percent of the folks have the
opportunity at some point to work or be able to afford in some
way, to be able down the road, hopefully, I think the goal
would be to own their own home.
We had a very passionate, very effervescent lady this
morning we talked to who had that dream. She had the American
Dream like everybody has. They want to own their home. I think
that if we can design a program at some point where we could
allow that to happen, I think that would be--recently, I had
the opportunity to talk to some folks from Great Britain. They
have 17 percent public housing over there, and they want to try
to get people off the public housing rolls and own their own
home or condo or whatever, and they are trying to come up with
a program to be able to do that. I was hopeful that we could
work together on something among ourselves here that we could
do that, and with your help to be able to design something that
would allow people to do that.
But in order to do that, they are going to have to have the
ability to make a payment, to have a job. So my concern is, are
you working with the local economic development people to see
if you can bring industry in, bring jobs in, to have
opportunities? It is pretty hard to bring people in and plop
them down with no hope of being able to own that home if they
don't have a job to be able to, at some point, have that dream
fulfilled and being able to afford that home.
It was interesting this morning that Mrs. McMillan made a
comment that her son makes a house payment that is less than
what her rent payment is. If he can do that, she should be able
to own a home as well, I think.
So I guess my question is, where are we from the standpoint
of economic--I know that you guys here in New Orleans have
taken quite a hit. But where are we with regards to economic
redevelopment of the communities to be able to allow people to
be able to afford to own a home again?
Mr. Fortner. Thank you for that question, Mr. Chairman. As
you all witnessed, our mayor jumped on the bus this morning,
and you could tell by his presentation that he has a
comprehensive approach to government working together to
utilize resources to get the best result to serve the people.
As you articulated, it is not just housing. It has to be
economic opportunities so that people have jobs, have access to
the empowerment and being able to better their quality of life.
Here in New Orleans, the housing authority is engaged with the
economic development, the affordable housing community, and all
aspects of City government as we try to move forward to build,
as the mayor would say, the City how it should be, as opposed
to how it was.
So you are absolutely correct and on point in that the
housing authority doesn't work in silence. The housing
authority is a part of the City's affordable housing plan and
economic prosperity plan.
Chairman Luetkemeyer. Ms. Diggs, would you like to comment?
Ms. McConduit-Diggs. Thank you. Of course, that is
certainly something that the Urban League focuses heavily on.
I will start by saying that we do provide job assistance
training to residents in Columbia Park. So that is one example
where we are working to provide additional job training --
Chairman Luetkemeyer. Let me interrupt. Job training is
important. But when they are trained, they have to have a job
to go to.
Ms. McConduit-Diggs. Absolutely.
Chairman Luetkemeyer. And my question is, is the economic
development there to produce and track the jobs in the
community to be able to have people have that opportunity?
Ms. McConduit-Diggs. So, we have a long way to go, is the
short answer to that question. Certainly, the business sector
has been engaged and been brought to the table. But when you
think about policies relative to criminal justice, that still
excludes a lot of people from being able to access particularly
high-paying, demand-sector job opportunities.
The City has done its part with Ban the Box, but certainly
we need to push on the private sector to do its part.
The other thing I will say in terms of what certainly HANO
and others who have contracting opportunities can do is make
sure that opportunities are available for small and minority
business contractors because they often employ the individuals
that we are talking about, and making sure that if there are
any non-compliance issues with the DBE policies and maintaining
a setting and adhering to the DBE goals that are set, if there
are any problems with that, they need to hold them accountable,
and we know that is happening in this City.
Chairman Luetkemeyer. Quickly, though, I want to follow up
on Mr. Green's comment also about CRA.
Do you work with the financial institutions --
Ms. McConduit-Diggs. Absolutely.
Chairman Luetkemeyer. --to help them look for opportunities
to develop businesses so that they can fulfill their CRA?
Ms. McConduit-Diggs. Absolutely.
Chairman Luetkemeyer. And produce the opportunities for
people to have a job and be able to afford those homes?
Ms. McConduit-Diggs. Absolutely. Several of the financial
institutions here have leveraged their CRA credits to support
the assistance, technical assistance being provided to small
and minority-owned businesses.
Chairman Luetkemeyer. Very good. Thank you.
My time is up.
With that, Mr. Cleaver is recognized for 5 minutes.
Mr. Cleaver. Thank you. I would like to follow up with
where you left off, I guess with Ms. McConduit-Diggs, although
any of you can respond.
I think one of the things that we quite often fail to
connect is the fact that Katrina hit just before the beginning
of the Great Recession, where we lost 8.7 million jobs. The GDP
contracted by 5.1 percent, and our committee is the Financial
Services Committee. It used to be the Banking Committee. They
call it the Banking Committee over on the less significant
Senate side.
[laughter]
Mr. Cleaver. But my great concern is given the fact that
New Orleans has somewhat of a service-based economy, how are we
going to create the jobs that would be available to folks who
need those jobs to purchase the homes?
I associate myself with comments from the chairman of our
subcommittee. Everything is okay, except we have to figure out
how to get jobs. What can we do? What is going to be done? We
can't alter the economy--I don't think we can--of this
community.
Ms. Washington? Or Ms. Diggs?
Ms. McConduit-Diggs. Sure, and I will be brief. We have to
certainly do our part with looking at how we better integrate
career opportunities in high schools. We have a significant
number, and that is where we see the fall-off start to occur,
that when we don't properly connect to college opportunities or
career opportunities, then we see this huge number contributing
to our opportunity and beyond for joblessness. So certainly
building greater and stronger, and funding stronger career
programs within high schools. We have moved away from that
nationally. We really need to consider that as a viable
opportunity.
And I know that Tracie wants to respond.
Ms. Washington. Thank you, Congressman Cleaver. You have
hit at the heart of the matter. New Orleans pre-Katrina was a
New Orleans that was subsidized in our private sector by poor
workers. We worked people poor, but we subsidized their lives
by having public transportation even though they couldn't
afford cars, by having public housing even if it was bad public
housing, because they couldn't afford housing otherwise. They
were still working.
We subsidized the private sector with bad public schools,
and they sent their kids to those schools because we were
subsidizing the private sector and not paying these
individuals--who are all working--living wages and wages where
they could afford a car, a house, better education.
Now, when we came back post-Hurricane Katrina, while we had
to sue and I had to sue, unfortunately, to get a lot of that
stuff moving, to get people back into their houses, to get
public housing moving so even the minor advances we had in
public housing we have gotten, to get people back in schools
and to get schools open, we have rebuilt a private sector off
of those same poor people, we have just not enriched them.
If we could pay that hotel worker not $9 an hour, because
we are still going to need hotel workers in this service
community, but if we could pay that person a living wage --
Mr. Cleaver. Does New Orleans have a different minimum
wage? Is it $7.25?
Ms. Washington. Yes, and that is why we are still having
the public housing issues. It is not that the folks aren't
working. We are not paying them enough. We have an economy
growing here, but you have to pay people to be involved in that
economy.
I don't want us to leave today without acknowledging that
our economy--look around. We are growing. But we are leaving a
lot of people behind.
Mr. Cleaver. Mr. Fortner said earlier that the median
income for the residents of public housing is $14,000, which is
about the same as what you would earn in a year working every
day for minimum wage. We have a problem.
Ms. Washington. And they work. You don't live in public
housing and not work.
Mr. Cleaver. Yes, I used to live there. My father got up
every morning and went to work.
Ms. Washington. Thank you.
Mr. Randall. Congressman, just to add that the number that
Mr. Richmond asked for about the median income of renters is
$24,399. That is the median income of renters in the City.
Chairman Luetkemeyer. Very good. Thank you.
Next, we will go back to Ms. Waters, the ranking member of
the full committee, for 5 minutes.
Ms. Waters. Thank you very much, Mr. Chairman.
You asked a lot about economic development, and I was
looking at Mr. Fortner because I know what he was thinking,
that I have enough trouble trying to manage public housing and
provide all the services that are needed, and economic
development is not necessarily part of my mission. But
certainly, that is the mission of the mayor and the City
council members.
They have land use authority, and that is extremely
important in economic development, what you are able to do with
that land and how you are able to make it available.
On the other kind of development opportunities, if you
remember, I asked about Iberville. I wanted to know who the
contractors were, who the developers were, because I want to
close the wealth gap, and I have come to understand very
clearly that it is not simply through wages. You can't close
the wealth gap there.
We have to increase minimum wage. Everybody is talking
about getting to $15, et cetera. But to close this wealth gap,
what we have to do is make sure that contracting opportunities
are available to contractors who happen to be people of color,
that joint ventures are available to our community, and that
government, first the Federal Government, has to do its job to
get rid of discrimination in contracting, respond to Requests
for Proposals.
We are looking at everything now from what is known as our
TSP plan. That is who has all of our investments that we put
all of our money into for retirement. We have none of our
minorities who are asset managers and people in that community
who are really involved, and these are some of the smartest
people we have in our communities. If given an opportunity, not
only will they provide those services but they will create
jobs, and many jobs.
The other thing is we have been fighting really hard about
this transportation bill. Don't you know if we would fund
transportation by the Federal Government in a reasonable way,
we could rebuild our roads and our streets and our highways and
our water system, create contracts that create jobs, et cetera,
et cetera.
So I don't want you to start thinking about what can I do
about economic development. We all have a responsibility to be
about the business of economic development, opening up
contracting opportunities and making sure that people have the
possibility to enjoy the wealth of this country.
Even though this is a little bit different than the
conversation we had before, flexibility--as I understand it,
the HUD Secretary has talked about flexibility in this policy
of allowing those who have been kicked out of public housing to
return based on a criminal offense. That is so important, that
if there is real flexibility--and I told someone earlier I have
started to put together a piece of legislation called Second
Chance, for public housing tenants who have been kicked out.
But if you have the flexibility, we have to stop putting these
grandmothers out of these units, and these mothers who just
happen to have children or grandchildren who just visit them,
who get in trouble, et cetera, because many of these people
have nowhere else to go.
That 50 percent that you told me about, Mr. Chairman, that
is disabled or senior or what-have-you, these are some of the
people who are being harmed with these policies.
So if you have some flexibility, please use it. I am going
to be looking with Mr. Richmond to see what we can do to make
sure that in addition to the Secretary sending that message
out, that maybe we have to try to get something in law that
will help to undo that no-tolerance policy.
So thank you very much, Mr. Chairman.
Chairman Luetkemeyer. Ms. Waters, you have time left.
Ms. Waters. Oh, excuse me.
[laughter]
Ms. Waters. I never have time left.
[laughter]
Ms. Waters. In the final analysis, let me just ask this.
What do you think the Members of Congress can do to help with
policies that would create more opportunities right here in New
Orleans? What would you talk to your Congressman about that he
will talk to us about that we need to be doing yesterday?
Mr. Fortner. Is that for me?
Ms. Waters. Yes.
Mr. Fortner. Thank you, Congresswoman. We have a blueprint.
We have had successes, and we have had failures. Let's build on
those successes and gear our legislation and funding towards
building on those successes. We know what the problems are, and
we have a lot of smart people in Congress who can build
solutions to get to where we need to be.
Ms. Waters. Okay. Do I still have any more time? No, the
red light is flashing.
Thank you very much. Thank you, Mr. Chairman.
Chairman Luetkemeyer. I would be more than happy to give
you another minute or two, Ms. Waters, if you have another
question.
Ms. Waters. Please don't do that.
[laughter]
Ms. Waters. You know I will take that and go over time,
too.
Chairman Luetkemeyer. We are here to find the facts. But,
okay.
Mr. Richmond, you are recognized for 5 minutes.
Mr. Richmond. Thank you, Mr. Chairman.
Chairman Luetkemeyer. I'm sorry. Mr. Green.
Mr. Green. No, continue.
Chairman Luetkemeyer. My apologies.
Mr. Richmond. Let me just start off where Maxine left off.
We talk about economic development and all those things, and
they can't be in a vacuum. Let me just give you some of the
things that we find that we are working on.
Transportation is a big problem. If you look between New
Orleans and Baton Rouge, Lake Charles, Lafayette, we are very
special in terms of we have between $80 billion and $150
billion worth of new development going on. But if you look at
how industry or government responds in terms of TWIC cards to
work on the river and to do those things you need a TWIC card,
but you can't get a TWIC card if you have had a conviction in
certain areas. So we have to look at how everything runs
together.
Our government turned down the money for high-speed rail
from the stimulus, which would have given us the chance to
connect New Orleans to Baton Rouge almost like one city, up and
down the river, where you have billions and billions of dollars
of new construction. They would be able to participate, and
that would go a long way towards full employment, livable
wages, and all of those things. So those are things that we are
working on.
Mr. Fortner, let's take a trip down some HANO stuff in
terms of what we are talking about in terms of community
benefit. I know that you have a whole bunch of land which was
subject to controversy that people wanted you to sell so that
people could develop it. You made the decision not to sell it
because you wanted to keep it, and I agree with your decision.
As articulated to me, you said you didn't want to sell it
because you could see HANO finding developers to develop that
land that would be future income, consistent income for HANO to
fulfill its mission of providing housing, affordable housing,
and also develop unused land, and I love that idea.
Now, when we talk about employment, I want to take it as
you develop the RFPs for those developments of all the vacant
land and scatter sites, some of them in very affluent
neighborhoods, some of them in other areas, but when you
develop that RFP, can you put in the RFP grading for community
benefit?
For example, if you are using a company out of the
community or a local Louisiana or New Orleans company, then
that money is going to have a bigger multiplier than if you use
somebody else.
So the question is, as you go and start to develop these
and find developers whom you are going to partner with so that
you have recurring revenue to fulfill your mission, they will
provide the housing and they will provide the benefit, do you
have the ability to modify an RFP so that you could select a
company that you feel brings the best benefit to the community
as a whole?
Mr. Fortner. Thank you for the question, Congressman.
Absolutely. The good thing about our scattered sites inventory
is that it is not going to be restricted by the rules of sale
or CNI, because this is a program that we developed ourselves
and as much local opportunity as we can--because we can't say
in New Orleans that you can't find minorities to work on
projects. You can't say that you don't have disadvantaged
business enterprises in New Orleans.
We are going to make a focus to make sure that the people
who--especially those who are represented by the public housing
community, the Section 8 community, also that is an untapped
resource that we have failed to fully exploit. We want to make
sure that opportunities are afforded to people who benefit from
public housing, who live in public housing, who moved on from
public housing, who actually make a contribution to
successful--absolutely.
The short answer to your question is ``yes.''
Mr. Richmond. Well, I just want a commitment from you that
if you run into some roadblock that prevents you from being
able to factor those in as you award the development contract
in partnership, that you would let our office know it so we
make sure that they don't exist.
Part of the thing we talk about in keeping economic
development and all those things is part of it is not giving
$900 million to a company that leaves right after the storm.
I am looking at the light because I don't want to go over,
and the chairman has been gracious enough to allow me to
participate today.
Ms. Washington, as we talk about factors and other things,
52 percent unemployment among African American males is not
sustainable for any community in the country, probably in the
world. So what do you see at your organization, and how are you
all trying to address that targeted unemployment?
Ms. Washington. Thank you, Congressman Richmond. It is not
only not sustainable in any other place in the world, but
because of our large population of African American males, and
because I don't know what it is about biology but that would
make a New Orleanian percentage-wise, this community won't be
able to be sustained much longer because we are unemployed.
All the things that we talked about today as far as banning
the box, as far as ensuring that individuals who are coming out
of our jails are able to find housing, as far as ensuring that
there is education and training for them are important. But the
most important thing we have to do is ensure that they are
either employed and employed at a wage where they can support
and sustain themselves and their families, or that we allow
them to contribute to this economy with their own businesses.
What I hear a lot of, particularly at LGI or in my other
job when I am wearing my hat at the Sheriff's Office, is I want
to start a business, I want to get out there and be a part of
bidding on these projects, but I have stuff in my past.
Congressman Richmond, you have worked so hard in Louisiana,
and I know Ms. Waters has worked so hard to ensure that these
individuals don't carry that burden with them forever. They
work hard at reentry. I work with these guys at reentry. Just
give them that opportunity.
I can assure you, I was here right after Hurricane Katrina,
and if I may just for a moment tell you--right after Hurricane
Katrina, the one thing I loved here was from these brothers who
were saying, man, I am making $25 an hour cleaning up, $30 an
hour, and they were proud of being able to support their
families and send money out of this community. Those jobs left,
or at least those wages left.
But what we saw was a resurgence in that community in that
amount of time. I am telling you, I am sitting here telling you
it can work. I have seen it work.
Chairman Luetkemeyer. Very good.
My apologies to the gentleman from Texas. I skipped over
him a moment ago.
The distinguished gentleman, who is always very insightful,
is recognized for 5 minutes, Mr. Green.
Mr. Green. Thank you, Mr. Chairman. I would like to thank
you for not being sick such that we couldn't have this hearing.
There were many things that could have occurred in your life
such that I won't be able to be there on that Friday, but you
chose to come, and I am grateful, and I thank you, I thank you
for coming.
I thank Congressman Cleaver as well for working so well
with you. The two of you don't always agree. I know that you
don't know this and that I am letting a secret out now, but --
[laughter]
Chairman Luetkemeyer. It is no secret.
[laughter]
Mr. Green. But you found a way to allow your disagreements
to develop positive legislation. I think you are doing that
with H.R. 3700.
Of course, the Honorable Maxine Waters, I just thank her
for allowing me to serve on the committee with her. I am there
because she brought me to Congress. It is a long story, but I
didn't get there by myself.
And to my good friend, Mr. Richmond, you and I will
continue to work together. I appreciate you so much for all
that you do.
And I thank all of the witnesses for appearing today as
well.
On the question of jobs, let me make this statement as a
sort of a predicate. It does one little good to have a Ph.D. if
you cannot acquire a j-o-b so that you can e-a-t.
[laughter]
Mr. Green. Jobs are pretty important for everybody, not
just those who happen to be born in the sweets of life. Those
who live in the streets of life need work, too.
And I concur with the Honorable Maxine Waters that a good
transportation bill would help this whole country. But I was
just in the Lower Ninth Ward. A good transportation bill would
help us with a lot of streets over there and put a lot of
people to work who live in the Lower Ninth Ward. It would just
be a great thing.
And because I don't want you to think we do nothing in
Congress, I want to mention the Honorable Jim Clyburn, who has
legislation that would target areas that have been left behind,
very well-thought-out and very well done. It targets--I don't
like the term ``pockets of poverty.'' I like ``areas that are
emerging.'' So areas that are emerging, that are trying to help
themselves. It is a great piece of legislation, and hopefully
we will be successful with that. I think all of the members of
the CBC have signed on to it.
And my final comment, with the time that I have left, has
to do with something that is a little bit off script but
important. The mayor said something today that left an
indelible impression. He said that around 2008, for some
reason, there was an uptick in young black males killing each
other. Does anybody remember him saying that other than me? He
said that around 2008, he said it was inexplicable as to why. I
don't know why, either. But I do know this: We have a duty,
those of us who look like me, we have a duty to do a little bit
more in this area.
Now, there are all kinds of external forces, exigent
circumstances, but this has to be dealt with. Jobs are a
component of it, but it is not the end of it. There is
something that we have to do in our own communities among
ourselves to stop this killing of each other, and I am just
curious as to what happened in 2008. I don't know. I know about
the Great Recession. We have been in a recession since I was
born, so that was nothing new for black folk to be in a
recession. Our unemployment has always been twice that of white
unemployment.
This is empirical evidence. It is there. So what happened?
What happened in 2008?
Ms. Washington, or Attorney Washington who works at the
Sheriff's Department --
Ms. Washington. Works everywhere. I don't know that there
is any one particular thing, Congressman, that we could say
happened in 2005 or 2006 or 2007 or 2008, or all the way up to
2015, but I know a couple of facts that may help people along
the way.
We never, Congressman Richmond, fully dealt with some of
the lingering mental health issues for so many of our young
African American males who were affected by Hurricane Katrina.
I will tell you personally I am a single mom of an African
American male. I am one of the strong moms who was able to say
``no way,'' and my son got through college this year.
Mr. Green. Is this the same son who brought you back?
Ms. Washington. It's the same son who brought me back.
Mr. Green. Good job.
Ms. Washington. But I represent some school districts here,
and just this morning I will share with you the story of a
young man who had gangs following him yesterday to a school.
The police got there and he said, look, I am going to leave
this school. He and his mom made a decision, I am not going to
come back here because I know none of the other students will
be safe in my high school if I am here.
But we also know that child had lingering mental health
issues that weren't dealt with post-Hurricane Katrina. And I
don't know where that money will come from, but I don't think
it is sustainable to keep putting them at my other place of
employment, the Orleans Parish Sheriff's Office and knowing
that they still have those mental health issues. It is just
perpetuating --
Mr. Green. If I may just intercede and say this. I think
you hit upon something. I talk to people now who were
displaced, and they start to--many of them will have tears well
in their eyes when they talk about Katrina. There are people
who are still having issues, internal issues. We have dealt
with the external forces and factors to a certain extent, not
completely, totally and absolutely, but housing, better
schools. But the mental side of this is something that we have
neglected, and I thank you for calling it to my attention.
My time has expired and the chairman has been more than
generous. Thank you, Mr. Chairman.
Chairman Luetkemeyer. Thank you.
We have some time left, and we could go to a round 3,
although I don't have any questions.
Mr. Cleaver, you don't have any?
Ms. Waters, do you have any questions you would like to
ask? I know I opened the door, so --
[laughter]
Ms. Waters. You did. You opened the door.
Mr. Green just talked about, and Ms. Washington talked
about Katrina and the impact that it had on children and
families. I am still shaken by what I saw on television that
brought me here a day or two after, the people standing outside
that dome with signs saying somebody help us, please. I will
never forget that picture.
So if I am in California watching TV and feeling absolutely
stunned and upset, what must it have felt like to be in the
middle of it, not only as a family, as adults, but as children,
not knowing what to do, and families and children who have
friends who died in it all?
So, you talk about the mental health problems that are not
attended to, which we don't pay for services for folks with
mental health problems. When we take a look at the homeless, a
large percentage of them have problems that need to be dealt
with.
But the thing that I think is most misunderstood as we talk
about violence in our communities is this. Somehow, people
don't understand or refuse to accept what poverty does to
children and families. What happens when a child ends up with
parents who may be on drugs, one parent may have gone to
prison? I know from experience, having worked in communities,
many of them in public housing in South Los Angeles, that gangs
were formed where they said this is our family.
When you pull the safety net out from young people and boys
who are capable of doing things that even they didn't know they
were capable of, this kind of stuff is not really dealt with,
not really understood. It is simply, ``There is a bad boy.''
It is not really, ``There is a bad boy,'' but ``Who is this
child? What has happened to him? Where did he come from?''
So I think that we need a lot more resources to begin to
staff families and to provide support services and to
understand the role that we can play in healing people, making
people whole and, of course, basically providing assistance in
ways that some people don't think is very important.
People say you are either good or you are bad. No, you are
not. You are both good and bad. It all depends on what
experiences you have that will take you in one direction or the
other.
So, I guess I would be considered a tax-and-spend liberal.
But I do know this, because I serve on the Financial Services
Committee, and I understand the tax breaks that we give to some
of the richest people in this country. I understand the strong
lobbying efforts of special interests who get a lot.
But what I understand and what upsets people is the lack of
opportunity and the utility for the average citizen to be able
to have access to the resources of this country and the
representation that they need in order to break up some of the
traditions that lock people out. So that motivates me to be on
the side of the least of these. When we talk about the violence
and we talk about the disruption and we talk about what can we
do, it is not simply by saying, ``Be like me, I am your role
model, you don't know what I have been through.'' But it is up
to us to find out what can we do and what are we willing to
support, and what are we willing to ask our government to do to
help the least of these.
But I think we are going to have to get out in front of it,
and this is some hard political stuff. But I think that is what
we all need to do in order to get--it is not simply lock them
up and throw the key away. It is not simply just pointing your
finger and talking at them. It is about understanding, a deep
understanding and support, and in the final analysis a lot of
love.
So I won't preach anymore, Mr. Chairman. Thank you for
allowing me to have that opportunity.
Chairman Luetkemeyer. I was wondering if you had a question
in there somewhere.
[laughter]
Chairman Luetkemeyer. Thank you, Ms. Waters.
The gentleman from Texas, Mr. Green.
Mr. Green. Thank you. I promise to be pithy and concise,
terse and laconic.
Thirty million dollars remaining in Road Home funds,
unobligated. Who knows how we plan to utilize it?
You were waiting on that question.
Ms. Uddo. Yes, I was. I have been waiting on a couple of
things.
I was just at a homeowner's house yesterday in New Orleans
East. I had invited them to come because I wanted you to meet
them. They are still living with no floor, no kitchen, a
bathroom that the shower is still--garbage bags to keep the
water off the walls, a wrench to turn on the shower, no sink.
This is a middle-class African American couple who did great
before the storm.
And I said they came to my center. Now, my center, as I
said, closed down. We transitioned in 2014 as a senior social
services center, and this was a strategy for me just to try to
stay alive so that I could continue to help people, and we are
serving now 300 senior citizens a month and struggle to stay
open, keep our doors open, all African American, low-income
senior citizens in the Gentilly neighborhood.
But what that strategy allowed me to do is people still
show up on my doorstep all the time trying to get their houses
back, trying to still come home. I feel so--you have no idea
the pain and the sleep I lose at night. I can't help them.
There is nothing out there. And the other programs, the lists
are so long, and there are so few of us now who are doing it.
We can't help them.
So I said, did you go back to Road Home? There is still $30
million in Road Home. Did you go back? Oh, yes, we did. Well,
what happened? The case manager--and she got her on the phone
with me, because I wanted to talk to this case manager, and I
believe Franklin now has the contract for this, the Road Home
Program. There are two private contractors.
Anyway, she said she couldn't give her the money, and the
case manager even went to her house, could not give her the
money because some of the money she had lost was to a
fraudulent contractor. Because this homeowner didn't report and
didn't file suit because she had no money to do that, the
fraudulent contractor, that disqualified her from getting more
funds.
So again, there is $30 million, but these roadblocks, these
ridiculous roadblocks, it is just a deep dark hole that
continues and continues, and this proves my point. If I had
that money to distribute and administer, our case managers
would go out, we would say we clearly see you have the need, we
are going to make sure this money is spent properly, you are
going to get the right contractor and you are going to get the
money.
So, that is my case. There will always be money because
people cannot qualify because they just keep putting up
ridiculous rules and policies. That is why I am so mad about
this program.
Mr. Green. Thank you.
Let me yield now to Mr. Randall.
Mr. Randall. Thank you, Mr. Green. The $30 million that was
mentioned that is left over, the State has committed to a rehab
program to help the 6,000 applicants who have not yet returned
to their homes. The State just admitted APA Amendment 65. That
is Amendment 65 to the Road Home Program, which will allow for
interim housing to be taken into consideration, fraudulent
contractors to be taken into consideration, and the use of
inspections to go out and inspect homes that are subsequently
rehabbed to make sure those individuals' work is done and they
can obtain a Certificate of Occupancy to return home.
So there is a significant amount of money that is
remaining, but the State has committed that funding to get
those 6,000 people, those Option 1 applicants who have not met
compliance to comply.
Mr. Green. Ms. Barnes?
Ms. Barnes. Additionally, the State is working with an
advocacy group called the Greater New Orleans Housing Alliance
to provide case management to those persons who have unmet
needs resulting from Hurricane Katrina, and that was done by a
great deal of lobbying by the advocates. We have been working
with boots on the ground, with families who have not been able
to return.
Mr. Green. Thank you.
My time is up, but thank you, Mr. Chairman.
Mr. Randall. Mr. Chairman, may I add one more thing?
Chairman Luetkemeyer. Sure.
Mr. Randall. As we work with Mr. Fortner and HANO, I just
wanted to let the committee know that HUD recently joined with
the Department of Justice in the Juvenile Reentry Assistance
Program (JRAP) which works with Justice to expunge records of
youth that have served their time. So we are going to work
closely with the Housing Authority, and I believe to date that
the President announced $1.7 million to help in that effort
with the Public Housing Authority. So we will continue to work
closely with the Housing Authority as we work on reentry
policies and procedures to help eradicate some of those
problems here in the New Orleans area.
Chairman Luetkemeyer. Thank you.
Mr. Randall, we want to work with you on that situation
with HUD there. If they are sitting there fiddling around with
the rules and regulations and they haven't done anything, and
now in the 11th hour they are starting to do something, we want
to help you cut through that nonsense. We will be in contact,
okay?
Mr. Randall. Thank you very much.
Chairman Luetkemeyer. Mr. Richmond?
Mr. Richmond. Thank you, Mr. Chairman.
Let me just start off with criminal justice reform, which
is good. I just left a conference this morning, speaking at the
Charles Koch Foundation and the Charles Koch Institute, who are
in New Orleans having a criminal justice conference. I think
there is tremendous synergy in Congress and across the country
to get something done, because we have reached the point of the
law of diminishing returns. Every dollar we spend on
incarceration makes the country less safe, so we need to figure
it out.
Let me just say, because we touched on it right at the end,
contractor fraud in this entire process was a tremendous
problem. If you look at the demand when you are talking about
thousands and thousands of homes being almost completely
destroyed, and you look at the demand for contractors, you get
contractors who came in from all over the country, all over the
world who had shiny business cards and could talk real good and
showed you a whole bunch of stuff, and when the homeowners gave
them an initial deposit or something else, they would start
work, shabby work, and never come back.
If you look at the magnitude of the construction that had
to happen, it was understandable that people took chances
because they were the only contractors available, and we did
not adequately figure out a way to compensate people who were
victims of contract fraud. We held some contractors
accountable. We did that. But to make the homeowners whole, we
fell short, especially elderly homeowners and other people who
were not as sophisticated in terms of navigating this Road Home
process and managing contractors. It was just that bad.
People who weren't victims of contractor fraud were lucky.
Some of us were unlucky, like myself. We decided to play our
own contractor, and that was just a disaster in its own right.
[laughter]
Chairman Luetkemeyer. No multi-tasking.
[laughter]
Mr. Richmond. Now, I am on my third house, and I have
learned from the error of my ways and I can do just about
anything at home.
Mr. Fortner, let me just go back to one thing that is
critically important, and Ms. McConduit-Diggs touched on the
DBE part of it.
Watching my parents who had a small business and the fact
that they employed everyone and they didn't do background
checks, they just looked at you and if they thought you were a
good person after they talked to you, they gave you a chance,
and it made a difference in a bunch of lives. And the fact that
my parents' small electrical business did a lot of work at the
Hilton, it was what put my brother and I through Morehouse. It
was what changed our life forever, because the Hilton took a
chance on this little bitty company, and we did most of the
outside electrical work. And because of that, not only myself
and my brother but a bunch of other people were able to go to
college.
So as you do your developments, do you do a post-
development report of the DBE participation? Was it meaningful?
Was it real? And I say that because now it has come to our
office through complaints about Iberville that the
subcontractor was subbing to DBEs that the subcontractor had a
substantial ownership in, and it fulfills the DBE goals.
And I am not saying it is true, but it would be great if we
had post-development reports that outlined every company that
participated, what they did, and the ownership make-up. We just
ought not have a prime-time subcontractor owning 49 percent of
a disadvantaged DBE that is subbing to himself.
So we just have to make sure that the spirit of the law and
the goals are what we reach, because they could be employing or
contracting with that small business that allowed at least my
brother and I to get to Morehouse, and that, I think, would
have a domino effect in urban areas, and rural areas, in terms
of spreading out economic development and giving young men and
young women a chance to really achieve their dreams just
because of the nature of their circumstances, and you have the
power to do that.
So, I will turn it over to you.
Mr. Fortner. That is an excellent point you make,
Congressman Richmond. New Orleans just received--HANO was just
returned to local control just over a year ago, July 7th of
2014. A very dynamic board was appointed by the mayor, which
actually consists of a few DBE ownership. We are still in the
growing stages of getting back local control because now we are
going to commission this, engage, and this is a passionate
issue for that board.
As they move forward and grow, they are holding us
accountable because we have not only reports, we have reports
during the ongoing contract, and they are making sure now that
staff in the Housing Authority are looking at those reports,
looking for compliance issues and, as you stated so eloquently,
making sure that not only contractors honor the letter of the
law but the spirit of the policies that were put in place to
make sure that we have the opportunities, the DBE, MBE, and WBE
in our contracts.
Mr. Richmond. Mr. Chairman, let me just thank you for
taking the time to come down to New Orleans and have a
subcommittee hearing. I know that many of the people in the
audience probably know this, but for those who don't know,
usually on Thursday when we have a week of voting, Members
really take the time to get back to their districts so they can
see their constituents and be with their family whom they
didn't see all week, and for these Members to forego going home
yesterday and to come to New Orleans and have a hearing today
on issues that are very important to us, Katrina didn't hit in
their area but their commitment is very, very special.
So, Mr. Chairman, I want to thank you for that commitment
and working with the ranking member of the subcommittee, Mr.
Cleaver, in making sure that this issue of housing, and
especially post-Katrina housing, is not one that we forget.
And to the witnesses who have really been on the front
lines of our recovery, thank you. Mr. Fortner, I know you have
been here for a year, but what you are doing at HANO is a
breath of fresh air, and continue the good work.
[applause]
Ms. Waters. We trained you in California.
[laughter]
Chairman Luetkemeyer. Thank you.
I would like to sincerely thank all the witnesses today for
participating and for your testimony, and also for your passion
for the people of New Orleans and their housing needs.
And I thank Congressman Richmond for inviting us here. I
appreciate the opportunity with he and his fellow New Orleans
citizens.
For my colleagues who made the trip and continue to be with
us, and for our staffs, it is a little bit of a job to put this
event together, and I know our staffs and the different Members
on the dais here as well were able to help us out, and I
sincerely thank them.
The Chair notes that some Members may have additional
questions for this panel, which they may wish to submit in
writing. Without objection, the hearing record will remain open
for 5 legislative days for Members to submit written questions
to these witnesses and to place their responses in the record.
Also, without objection, Members will have 5 legislative days
to submit extraneous materials to the Chair for inclusion in
the record.
With that, the hearing is adjourned.
[Whereupon, at 2:48 p.m., the hearing was adjourned.]
A P P E N D I X
November 6, 2015
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