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AFFORDABLE HOUSING NEEDS IN

THE CITY OF HOUSTON: UNIQUE

CHALLENGES AND OPPORTUNITIES

FIELD HEARING

BEFORE THE

SUBCOMMITTEE ON 

HOUSING AND COMMUNITY OPPORTUNITY

OF THE

COMMITTEE ON FINANCIAL SERVICES

U.S. HOUSE OF REPRESENTATIVES

ONE HUNDRED TENTH CONGRESS

FIRST SESSION

OCTOBER 29, 2007

Printed for the use of the Committee on Financial Services

Serial No. 110–76

(

(II)

HOUSE COMMITTEE ON FINANCIAL SERVICES 

BARNEY FRANK, Massachusetts, Chairman

PAUL E. KANJORSKI, Pennsylvania 

MAXINE WATERS, California 

CAROLYN B. MALONEY, New York 

LUIS V. GUTIERREZ, Illinois 

NYDIA M. VELA ́ ZQUEZ, New York 

MELVIN L. WATT, North Carolina 

GARY L. ACKERMAN, New York 

JULIA CARSON, Indiana 

BRAD SHERMAN, California 

GREGORY W. MEEKS, New York 

DENNIS MOORE, Kansas 

MICHAEL E. CAPUANO, Massachusetts 

RUBE ́ N HINOJOSA, Texas 

WM. LACY CLAY, Missouri 

CAROLYN MCCARTHY, New York 

JOE BACA, California 

STEPHEN F. LYNCH, Massachusetts 

BRAD MILLER, North Carolina 

DAVID SCOTT, Georgia 

AL GREEN, Texas 

EMANUEL CLEAVER, Missouri 

MELISSA L. BEAN, Illinois 

GWEN MOORE, Wisconsin, 

LINCOLN DAVIS, Tennessee 

ALBIO SIRES, New Jersey 

PAUL W. HODES, New Hampshire 

KEITH ELLISON, Minnesota 

RON KLEIN, Florida 

TIM MAHONEY, Florida 

CHARLES A. WILSON, Ohio 

ED PERLMUTTER, Colorado 

CHRISTOPHER S. MURPHY, Connecticut 

JOE DONNELLY, Indiana 

ROBERT WEXLER, Florida 

JIM MARSHALL, Georgia 

DAN BOREN, Oklahoma 

SPENCER BACHUS, Alabama 

RICHARD H. BAKER, Louisiana 

DEBORAH PRYCE, Ohio 

MICHAEL N. CASTLE, Delaware 

PETER T. KING, New York 

EDWARD R. ROYCE, California 

FRANK D. LUCAS, Oklahoma 

RON PAUL, Texas 

STEVEN C. LATOURETTE, Ohio 

DONALD A. MANZULLO, Illinois 

WALTER B. JONES, JR., North Carolina 

JUDY BIGGERT, Illinois 

CHRISTOPHER SHAYS, Connecticut 

GARY G. MILLER, California 

SHELLEY MOORE CAPITO, West Virginia 

TOM FEENEY, Florida 

JEB HENSARLING, Texas 

SCOTT GARRETT, New Jersey 

GINNY BROWN-WAITE, Florida 

J. GRESHAM BARRETT, South Carolina 

JIM GERLACH, Pennsylvania 

STEVAN PEARCE, New Mexico 

RANDY NEUGEBAUER, Texas 

TOM PRICE, Georgia 

GEOFF DAVIS, Kentucky 

PATRICK T. MCHENRY, North Carolina 

JOHN CAMPBELL, California 

ADAM PUTNAM, Florida 

MICHELE BACHMANN, Minnesota 

PETER J. ROSKAM, Illinois 

THADDEUS G. McCOTTER, Michigan 

KEVIN McCARTHY, California

JEANNE M. ROSLANOWICK, Staff Director and Chief Counsel 

(III)

SUBCOMMITTEE ON HOUSING AND COMMUNITY OPPORTUNITY

MAXINE WATERS, California, Chairwoman

NYDIA M. VELA ́ ZQUEZ, New York 

JULIA CARSON, Indiana 

STEPHEN F. LYNCH, Massachusetts 

EMANUEL CLEAVER, Missouri 

AL GREEN, Texas 

WM. LACY CLAY, Missouri 

CAROLYN B. MALONEY, New York 

GWEN MOORE, Wisconsin, 

ALBIO SIRES, New Jersey 

KEITH ELLISON, Minnesota 

CHARLES A. WILSON, Ohio 

CHRISTOPHER S. MURPHY, Connecticut 

JOE DONNELLY, Indiana 

BARNEY FRANK, Massachusetts 

SHELLEY MOORE CAPITO, West Virginia 

STEVAN PEARCE, New Mexico 

PETER T. KING, New York 

CHRISTOPHER SHAYS, Connecticut 

GARY G. MILLER, California 

SHELLEY MOORE CAPITO, West Virginia 

SCOTT GARRETT, New Jersey 

RANDY NEUGEBAUER, Texas 

GEOFF DAVIS, Kentucky 

JOHN CAMPBELL, California 

THADDEUS G. McCOTTER, Michigan 

KEVIN McCARTHY, California 

(V)

C O N T E N T S 

Page 

Hearing held on: 

October 29, 2007 ............................................................................................... 1

Appendix: 

October 29, 2007 ............................................................................................... 43

WITNESSES 

MONDAY, OCTOBER 29, 2007

Allison, Horace, Senior Vice President, Housing Authority of the City of 

Houston ................................................................................................................. 14

Bustamante, Daniel, Executive Director, Greater Houston Fair Housing Center .......................................................................................................................... 34

Celli, Richard S., Director, City of Houston Housing and Community Development Department ................................................................................................. 13

Gerber, Michael, Executive Director, Texas Department of Housing and Community Affairs ...................................................................................................... 11

Henneberger, John, Co-Director, Texas Low Income Housing Information 

Service ................................................................................................................... 26

Junor, Debra, Member, Texas Tenants’ Union ..................................................... 31

McElroy, Toni, President, Texas ACORN .............................................................. 33

Muhammad, Robert, Chief Executive Officer, ACTION Community Development Corporation ................................................................................................. 29

Ozdinec, Milan, Deputy Assistant Secretary for Public Housing and Voucher 

Programs, U.S. Department of Housing and Urban Development .................. 9

Quan, Gordon, Founding Partner, Quan, Burdette and Perez, on behalf of 

the National Coalition for Asian Pacific American Community Development ...................................................................................................................... 36

APPENDIX 

Prepared statements: 

Bustamante, Daniel .......................................................................................... 44

Celli, Richard S. ................................................................................................ 57

Gerber, Michael ................................................................................................ 60

Henneberger, John ........................................................................................... 71

Junor, Debra ..................................................................................................... 93

Lopez, Manuel ................................................................................................... 101

McElroy, Toni .................................................................................................... 104

Muhammad, Robert .......................................................................................... 110

Ozdinec, Milan .................................................................................................. 114

(1)

AFFORDABLE HOUSING NEEDS IN 

THE CITY OF HOUSTON: UNIQUE 

CHALLENGES AND OPPORTUNITIES 

Monday, October 29, 2007

U.S. HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON HOUSING AND

COMMUNITY OPPORTUNITY, 

COMMITTEE ON FINANCIAL SERVICES, 

Washington, D.C. 

The subcommittee met, pursuant to notice, at Houston Baptist 

University, Belin Chapel, 7502 Fondren Road, Houston, Texas, 

Hon. Maxine Waters [chairwoman of the subcommittee] presiding. 

Members present: Representatives Waters and Green. 

Also present: Representative Jackson Lee. 

Chairwoman WATERS. Good morning, ladies and gentlemen. I’d 

like to start by thanking President Robert Sloan and the Houston 

Baptist University for allowing us to use this wonderful space for 

today’s hearing on ‘‘Affordable Housing Needs in the City of Houston: Unique Challenges and Opportunities.’’ It’s a beautiful campus. This is a beautiful auditorium. And let’s just give the president a round of applause to thank him. Where are you, President 

Sloan? There he is, in the back. Thank you so very, very much. 

Mr. SLOAN. Thank you. 

Chairwoman WATERS. I’d also like to thank Congressman Al 

Green for inviting me here today. And upon learning about this 

hearing that was being held by the subcommittee that I chair and 

where Mr. Green serves, your other Congressperson of the area, 

Ms. Sheila Jackson Lee, said, ‘‘I would like to participate.’’ Let’s 

thank her for being here. 

I’m very pleased to hold today’s hearing for several reasons. 

First, as I said, Representative Green asked me to. And whenever 

he makes a request, I do my best to comply. That is because Representative Green is simply the most committed member of my 

subcommittee. We have many scheduling commitments as Members of Congress. Representative Green, for example, serves on the 

critical Homeland Security Committee as well as facing the demands of the full Financial Services Committee which has been extraordinarily active this season due to recent events in the economy 

and the leadership of our chairman, Chairman Barney Frank. Yet 

as we prepared for this hearing, my staff confirmed what I had already suspected, namely that Mr. Green is the only member of the 

subcommittee to have attended every single one of our hearings 

this session. He has perfect attendance. 

2

Mr. GREEN. Thank you. 

Chairwoman WATERS. And he deserves much more than just a 

gold star for attendance. Representative Green is a consistent voice 

for the poorest, most vulnerable residents of Houston, Harris County, and the Nation when it comes to Federal housing policy decisions, whether they take place within our subcommittee, at the full 

committee level, or even on the Floor of the House itself. In the 

subcommittee, I can always count on him. Indeed, he ably stepped 

in for me as chair recently when my own multiple committee assignments forced me to miss a portion of one of our subcommittee’s 

hearings on homelessness. At the full committee, during consideration of our Section 8 voucher reform bill, Representative Green offered a successful amendment to authorize desperately needed additional housing vouchers in recognition that we need to do more 

than just improve existing Federal housing programs. We need to 

expand them after many, many years of neglect. Finally, earlier 

this month, Representative Green spoke eloquently on the House 

Floor in support of the National Affordable Housing Trust Fund 

Act, whose passage by the full House stands as perhaps our committee’s proudest accomplishment this year. 

Representative Green is also an innovative legislator in his own 

right. I look forward to hearing from all of the witnesses today 

about the potential impact of a bill that he has introduced, H.R. 

2629, the Housing Fairness Act of 2007, which would reinvigorate 

the Department of Housing and Urban Development’s enforcement 

of the Nation’s fair housing laws. He is also the lead sponsor of 

H.R. 3329, the Homes for Heroes Act, which would devote substantial new resources to the housing and supportive services needs of 

America’s veterans, an absolute necessity in these times, as we all 

know. 

Now, before I highlight additional reasons why this hearing is so 

timely and appropriate, I would like to acknowledge Representative 

Jackson Lee. While I do not have her serving on the Housing Subcommittee, she has many accomplishments that she can be proud 

of, because in addition to the work that she does on the Judiciary 

Committee—where I serve with her—she is serving on three of the 

most influential committees in the Congress of the United States. 

Again, in addition to the Judiciary Committee, she is on the Homeland Security Committee and the Foreign Affairs Committee. So 

I’m very pleased that she’s been able to join us today. And she has 

worked with Representative Green as they have both been extraordinary advocates on behalf of the victims of Hurricanes Katrina 

and Rita and the housing of the Houston region which has been so 

affected. They have both been staunch allies in the fight to push 

for my legislation, H.R. 1227, which is known as the Gulf Coast 

Hurricane Housing Recovery Act of 2007, through the House. 

Again, I’m pleased to hold this hearing because the affordable 

housing needs in Houston are quite unique. As the Nation’s fourth 

largest city and one of the fastest growing, Houston boasts one of 

the most diverse populations in the Nation. As the title of the hearing suggests, Houston’s circumstances provide for both challenges 

and opportunities. On one hand, as one who comes from Los Angeles where the median home price is $529,000, the housing costs in 

Houston seem downright reasonable. It is nearly $400,000 less 

3

than that to purchase a median home here. I think the median 

here is about what, Mr. Green, $156,000? 

Mr. GREEN. $154,900. 

Chairwoman WATERS. $154,900. That seems awfully reasonable 

to those of us who come from California. However, when we look 

at the number of people who have very low incomes, and are just 

barely making it, that can be very high. People are paying more 

than 30 percent of that income for housing. These costs, as well as 

flexible zoning environments, make development of additional affordable housing here perhaps more feasible than in some of the 

major metropolitan areas. On the other hand, reasonable does not 

necessarily mean affordable, nor can affordable housing be developed anywhere no matter the economic and regulatory climate 

without the resources to do it. 

Nearly one-third of Houston homeowners and over half of all 

renters in the Houston metropolitan area again, as I indicated, 

spend more than 30 percent of monthly pretax income on all housing costs making them housing cost burdened as defined by the Department of Housing and Urban Development. Fully a quarter of 

renters pay more than 50 percent of their income in rent 

unsustainable for households over the long term. And as in every 

community in the country, working no longer guarantees being able 

to afford housing in Houston. The National Low Income Housing 

Coalition estimates that in order to afford a reasonable two-bedroom apartment here, a renter would have to earn $14.77 an hour, 

more than 21⁄2 times the minimum wage. 

Also, like most communities in the Nation, the Federal housing 

resources available in Houston don’t come close to meeting the 

need. Across the country, only one out of four households eligible 

for Federal housing assistance receive it. Here, this manifests itself 

in waiting lists numbering in the thousands for the Houston Housing Authority Section 8 vouchers and public housing units. Houston’s booming growth is now threatened by the recent crisis in the 

subprime mortgage market. The foreclosure rates here are not 

among the highest in the Nation, but they are still significant. And 

this market experienced double-digit drops in both home prices and 

housing starts last month. 

Added to these challenges, of course, is the continued impact of 

Gulf Coast hurricanes. The nearly 200,000 evacuees who initially 

came to Houston constituted the equivalent of the entire City of 

Shreveport, one of the Nation’s 100 largest cities, suddenly being 

dropped in Houston’s lap. Nearly half of the evacuees remain here. 

The generosity shown by the City and its residents has been extraordinary. 

Representatives Green, Jackson Lee, and I have just had the opportunity to observe some of the excellent work that has been done 

here, but, of course, there have been bumps in the road along with 

the successes. I’m sure that we will hear about both today. I want 

to assure you that as chair of the Housing and Community Opportunity Subcommittee, I am indeed committed to helping Houston 

meet all of its affordable housing needs, both those that existed before Hurricanes Katrina and Rita and additional ones that have 

been created by the hurricanes. 

4

Not only am I committed because of the wonderful advocacy of 

Mr. Green and Ms. Lee and others, as you know, my husband is 

from Houston. And so I have to honor him and his family also. Not 

only do I have to work for Los Angeles and California, but I have 

to work for Houston and Texas, also. So with that, I want to recognize Representative Green for his opening statement. 

Mr. GREEN. Thank you, Madam Chairwoman. Friends, this is indeed a great occasion, because today the Congress of the United 

States of America via its Housing Subcommittee has convened in 

Houston, Texas. It is historical. And I am so honored, I cannot tell 

you what a preeminent privilege it is. In fact, it is a superlative 

pleasure and a splendiferous honor to be seated next to the Honorable Maxine Waters, the preeminent authority. The preeminent authority, that’s right. Give her a big Texas-size welcome. If you love 

Maxine Waters and you know it, you ought to stand up and show 

it. Give her the kind of welcome that she merits for bringing this 

committee to Houston, Texas. Give it to her. 

Friends, in the United States Congress, the Congressional Black 

Caucus, with its 43 members, is considered the conscience of the 

United States Congress. I would have you know that the Honorable 

Maxine Waters is considered the conscience of the conscience of the 

United States Congress. Maxine Waters. 

By way of some information that is of benefit to you that will, 

of course, coincide with much of what we’ll talk about today, I need 

to share the following: There was an effort to raise the minimum 

wage in this country. It took 10 years to get it done. Throughout 

the entirety of the 10-year period, the Honorable Maxine Waters 

was at the very forefront of that movement. She was a part of the 

movement to raise the minimum wage, and I say thank God that 

this Congress has now raised the minimum wage to $5.85 an hour. 

It’s not what it should be, but thank God it isn’t what it was. We 

have raised the minimum wage. 

It’s important to talk about this minimum wage because, when 

we talk about affordable housing, people who are among the least, 

the last, and the lost need affordable housing too. And they need 

to be able to have the dignity of earning an income so that they 

can pay their own way. No one wants to be on welfare. Every person wants to say farewell to welfare. A decent day’s wage for a decent day’s work is a means by which people can say farewell to welfare. She has been a part of that effort to help people get that decent day’s wage. 

But more importantly—and as important as it is, I will say more 

importantly, this Housing Trust Fund that she mentioned, friends, 

it is unheard of in the annals of U.S. history to have an Affordable 

Housing Trust Fund dedicated to the preservation of affordable 

housing, to the construction of affordable housing, to the renovation 

of affordable housing, dedicated to maintaining a sufficient stock of 

affordable housing to meet the needs of those in this country who 

do not have affordable housing. This Affordable Housing Trust 

Fund will be funded with money from the GSE, Fannie Mae and 

Freddie Mac, about $700 million annually, and money from FHA, 

about $300 million. This is a significant number. We’re talking 

about approximately $1 billion annually for affordable housing. 

And it is something that we can thank the Honorable Maxine WaVerDate 0ct 09 2002 17:26 Jan 29, 2008 Jkt 039914 PO 00000 Frm 00010 Fmt 6633 Sfmt 6633 K:\DOCS\39914.TXT HFIN PsN: TERRIE
5

ters for. I will also tell you that I have been so blessed to serve on 

a committee with her and to serve on a committee that is also 

under the leadership of the Honorable Barney Frank. And when 

my subcommittee chair and my full committee chair are working 

in sync and harmony, if you will, it really makes it easy for us to 

get some of the things done that you want to have us do. So I’m 

very appreciative that she has come today and she is here to hear 

from us and understand what our needs are here in Houston, 

Texas, and we do have some needs. 

I also want to say to you that I’m honored to have the Honorable 

Sheila Jackson Lee here with us as well. She and I are working 

together on a good number of projects, not only in Congress but 

also here locally, that while they may not seem to relate to the congressional effort, we are elected to help in any way that we can, 

and we do so. And I ask that you give her an expression of appreciation, as well. 

Finally, before I give you just a bit of statistical information—

and I don’t want to overwhelm you because we have capable, confident, qualified experts who will impart this information to you, 

but I do want say this finally before I go to this information. When 

Katrina hit Louisiana, it was necessary for Members of Congress 

to go there. I know of at least five occasions wherein the Honorable 

Maxine Waters went. But I want to tell you about one mall incident, just a brief vignette, to give you some understanding of how 

she relates to people. 

We had a lady who wanted us to go and see how her home had 

been flooded, and it was a consensus that we didn’t have enough 

time, that it was just really not available for us at that time to do 

this. I want you to know that when she overheard that conversation, she stepped up and said, ‘‘We will go, we will see, and we will 

hear.’’ No one in her world is above the law, and thank God in her 

world no one is beneath the law. Every person merits consideration 

of the law. 

With reference to my City of Houston, Texas, we define affordable housing at the national level as spending no more than 30 percent of your income, your gross income, on housing. I regret to inform you that in our City, we have many persons who are exceeding that and exceeding 50 percent, but also when you add housing 

and transportation into the equation, we find that the average family is spending about 56 percent of their income on housing and 

transportation. Now, if you’re spending 50 percent of your income 

on housing and transportation, that doesn’t leave a lot for the necessities of life other than housing—clothing, food, and some of the 

other amenities that you need to live, as well. So we’re here today 

to hear from the experts and ask that they would give us the insight that we need so that we can go back to the Congress of the 

United States and be efficacious in the effort to make sure that the 

needs of all persons in this country are met with reference to housing. Every person ought to have a place to call home. We are here 

to meet these needs. 

Finally, we have people who are homeless in Houston, Texas, 

and the statistical information is quite shocking. For fear that I 

may not recite it all absolutely correctly, I’d like to just read to you 

some of this information: At any point in Houston, Texas, we have 

6

about 12,000 to 14,000 people who are experiencing homelessness. 

And in this group of people who are experiencing homelessness, 

about 11 percent are there because of domestic violence; about 24 

percent are there because they have been incarcerated and they are 

back trying to make their way through life; about 28 percent of 

them are veterans; 55 percent have some mental health issues; 57 

percent have had some sort of history of substance abuse; 59 percent lost their housing because they lost their job; and 66 percent 

have no income at all. These numbers don’t add up to 100 percent 

because many of the persons will fall into multiple classes. We 

have persons who have no jobs, who have substance abuse, who 

may have some mental concerns that should be addressed. 

So as we look to acquire our intelligence on housing, we want to 

remember that we have the homeless, we have those who are working and still cannot afford housing, and then, of course, we have 

those who want to buy homes and would like to have the opportunity to have a home and not get caught up in a subprime market 

or, even worse, a predatory market such that they find themselves 

only expending capital, not acquiring equity and not building 

wealth. 

I want to thank you again, Congresswoman, for convening this 

hearing in Houston, Texas. I think I speak for all of Houston when 

I say we will be eternally grateful that Houston is now going to be 

a part of the focus, if you will, of the housing issues in the United 

States of America. Thank you. 

Chairwoman WATERS. Thank you. Thank you, Congressman, for 

that opening statement. We have such an appreciation for his passion, and we just love his vocabulary. Okay. Without objection, Ms. 

Jackson Lee will be considered a member of the subcommittee for 

the duration of this hearing. And with that, I recognize Ms. Lee for 

her opening statement also. 

Ms. JACKSON LEE. Thank you, Madam Chairwoman. And, again, 

let me offer a deeply appreciated welcome on behalf of all of the 

citizens of Houston in every congressional district that we have the 

privilege of sending to the United States Congress. I might leave 

off the concept that there was a change in 2007. I won’t be pointed 

in that. But that allowed Maxine Waters to become the chairwoman of this subcommittee. You can see what a difference a day 

makes in terms of the focus and the compassion and passion. And 

so I thank her for her presence today, and it is a delight to be able 

to work with my colleague. The smartest thing that our Caucus 

could have done is to appoint Congressman Al Green to the Financial Services Committee. We applaud that act, and out of that was 

generated a great opportunity for Houston. 

I ask unanimous consent to put my entire statement into the 

record, but I’ll make these very brief points. Without a doubt, I believe that when you think of our Constitution and our beginning 

language in the Declaration of Independence, we all are created 

equal with certain inalienable rights of life and liberty and the pursuit of happiness. Although education and housing may not have 

been directly mentioned, I don’t know about you, but I think that 

the quality of life of all of us is dependent upon good education, 

good healthcare, and good housing. 

7

So I make these very brief points: One, we are looking forward 

to this trust fund so that we can have a commitment to affordable 

housing in this community and certainly across the Nation. I encourage you to support this legislation. And even though you may 

be in the State of Texas, call Senators across the Nation. Particularly call our Senators and ask them to support this very important 

legislation. And I will give you a reason why: If you look at lowincome owners who experience severe costs and, therefore, block 

them out of the market, you’ll find among the 31,886 owner households with income below 30 percent of the area median income in 

2000, almost half, 49 percent, spent more than 50 percent of their 

gross income on housing costs and another 17 percent more than—

more than 30 percent of their gross income. Disabled persons receiving SSI benefits are particularly vulnerable to affordability concerns. And so the most vulnerable people—for example, the fair 

market rent for a one bedroom apartment in Houston is $633, 

which exceeds by 5 percent the average monthly SSI benefits of 

$603. So there are enormous costs for those who are seeking affordable housing. 

Let me move to another point that I think is very important and 

close to Chairwoman Waters’ heart and, of course, knowing the 

Fifth Ward area, many of our older areas in Houston and particularly areas in my district, she knows the number of seniors who 

also suffer from the inadequate housing. I’m grateful to the leadership of Congressman Green, who has worked with me on these 

issues. But a couple of years ago, the City of Houston suffered a 

number of challenges that required audits and required the elimination of certain programs. One of them happened to be the rehabilitation program of senior housing. In actuality, the senior housing repair and rehabilitation was actually stopped. When we recognized that seniors would suffer, we brought together the Department’s Director and Secretary of the U.S. Department of Housing 

and Urban Development with a goal of restarting the program. An 

agreement was reached where the City would expend local funds 

and be reimbursed by HUD. The program was restarted with new 

contractors and procedures. 

Now, the home repair program for our seniors seems of little consequence to City officials even though the repair of senior’s homes 

is a priority in the consolidated plan pursued by HUD. Seniors continue to wait on a list. So we hope, as we move through this hearing and further our interest, that we’ll be able to correct that problem. 

My last point is just an example. Just last week, a senior who 

had been on a waiting list expecting repairs came before the City 

Council after being told that her property—that she lived in the 

floodplain. The City staff who misread the regulation had denied 

this woman home repairs because she lives in the floodplain. Fortunately, Council Member Jarvis Johnson called my office and we 

were able to connect the Council Office with the HUD official who 

cited the chapter and verse of the exemption that allowed repairs 

of this nature without regard to the flood zone. So as we look for 

housing, we must include all of those in our community—the disabled, the seniors, those who need affordable housing. 

8

And, Madam Chairwoman, I am so grateful for both you and 

Congressman Green, because as I look as the representatives of the 

homeless here in this auditorium—I took it upon myself to drive 

around Houston late at night—12 to 2 in the morning—just to see 

the second city that most of us don’t see. The enormous amount of 

homeless persons really begs for our action. And so as I look to the 

State and look to the City and County, I am grateful of your presence here but also of the leadership of the chairwoman. And I’d like 

to, in a moment of personal privilege, thank Mr. Guy Rankin, who 

is not here, Madam Chairwoman, but who wanted to offer his appreciation to you from the Harris County Housing Authority for 

their DHAP program and also to acknowledge the work that they 

are doing. I thank you very much. I look forward to this hearing, 

and I yield back my time. 

Chairwoman WATERS. Thank you very much. I think that we 

have some of the elected officials from the Houston area that entered the room, so if you would like to make an introduction, Mr. 

Green. 

Mr. GREEN. I’m most appreciative, Madam Chairwoman. We 

have with us this morning an outstanding elected official, public 

servant, if you will, the Honorable Adrian Garcia, who is a member 

of the Houston City Council. Adrian Garcia. I’d like to also just acknowledge that our veterans have united and decided to be here 

today as a unit. And we are honored to have a group of veterans 

who are here. Veterans, would you just stand so that we can see? 

Any veterans, of course, but these are veterans who have united. 

They are here, and we must serve them. They have served us well. 

There are many institutions that were available to assist when 

Katrina hit, but I will tell you that one that is in the 18th Congressional District, and I’m sorry that I can’t move them into the 9th 

Congressional District, but the Sheikh Community Center is represented today by the Honorable Delord Parker. Would you give 

him an expression of appreciation? 

For the record, I would like to introduce a document, and if there 

are others with documents that you would like to have become a 

part of the record, I believe the chairwoman will announce at some 

point that the record will remain open for members. And if you’ll 

give it to me, I will submit it into the record for you. 

But we have from the Honorable Gladys House—who needs no 

introduction, but for edification purposes, I will tell you that she’s 

with historic Freedman’s Town and Allen Parkway Village—a document titled ‘‘Affordable Housing Needs in Houston, Unique Challenges and Opportunities.’’ Madam Chairwoman, I beg that have 

we have unanimous consent to place this into the record as well 

as any other documents that I may receive. 

Chairwoman WATERS. Without objection, it is so ordered. 

Mr. GREEN. Thank you, Madam Chairwoman. 

Chairwoman WATERS. Mr. Green, I want to remind the veterans 

of H.R. 3329, the Homes for Heroes Act, that has been introduced 

by Mr. Green. One of America’s shames is the number of homeless 

veterans that we have on our streets all over America. And not 

only will my subcommittee make this a priority, we’re saying to all 

of the presidential candidates on both sides of the aisle that they 

9

better make that a part of their platforms as they campaign to lead 

this country. So thank you so very much for being here. Thank you. 

With that, I’d like to introduce our first panel: Mr. Milan 

Ozdinec, Deputy Assistant Secretary for Public Housing and 

Voucher Programs, U.S. Department of Housing and Urban Development; Mr. Michael Gerber, executive director, Texas Department 

of Housing and Community Affairs; and Mr. Richard S. Celli, director, City of Houston Housing and Community Development Department. I’d like to thank all of you for appearing for the subcommittee today, and without objection, your written statements 

will be made a part of the record. You will now each be recognized 

for a 5-minute summary of your testimony. 

We will start with Mr. Ozdinec. 

STATEMENT OF MILAN OZDINEC, DEPUTY ASSISTANT SECRETARY FOR PUBLIC HOUSING AND VOUCHER PROGRAMS, 

U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT 

Mr. OZDINEC. Thank you, Madam Chairwoman. Good morning. 

My name is Milan Ozdinec, and I am the Deputy Assistant Secretary for the Office of Public Housing and Voucher Programs at 

HUD. I wish to thank Chairwoman Waters, Congressman Green, 

and Congresswoman Jackson Lee for inviting me here this morning 

to appear before the subcommittee. Specifically, you requested that 

I describe the Department’s new Disaster Housing Assistance Program and its implementation, including here in the City of Houston, thus far. 

The Administration recognizes the need to continue assistance to 

Gulf Coast residents who remain displaced by Hurricanes Katrina 

and Rita, many of whom are currently residing here in the Houston 

area. The Disaster Housing Assistance Program, or DHAP for 

short, is a new demonstration program that will ultimately provide 

tenant-based rental assistance to approximately 44,000 families. 

DHAP commenced case management on September 1, 2007. The 

first rental assistance payments under DHAP will begin December 

1, 2007. 

The DHAP is a temporary housing assistance program, and its 

overall objective is to help families ultimately transition back to 

permanent housing and economic self-sufficiency by March 1, 2009. 

HUD is indeed responsible for the design, implementation, and operation of DHAP. We welcome this opportunity, Madam Chairwoman. Housing families in need is one of our core missions. We 

are also in a unique position to help. As you know, we have at our 

disposal a national network of some 2,400 housing agencies that 

administer HUD’s Housing Choice Voucher Program. We have 

proven to have the experience and expertise at the local level to effectively administer tenant-based rental assistance. These PHAs 

know their local housing markets and already work with owners in 

the private rental unit market. Housing authorities are involved in 

providing assistance to families. Housing families is their bread 

and butter. It’s what they do. 

DHAP may be a new program, but tenant-based housing assistance has already proven to be a highly effective mechanism for assisting displaced families. Shortly after Hurricane Katrina, HUD 

developed and implemented the KDHAP program to assist disVerDate 0ct 09 2002 17:26 Jan 29, 2008 Jkt 039914 PO 00000 Frm 00015 Fmt 6633 Sfmt 6633 K:\DOCS\39914.TXT HFIN PsN: TERRIE
10

placed families who were previously assisted by HUD. Then in December of 2005, the Congress appropriated an additional $390 million directly to HUD to assist thousands of additional families displaced by Hurricane Katrina—displaced who were previously HUD 

assisted or homeless through the disaster voucher program. To 

date, over 33,000 families have received rental assistance through 

these two programs. HUD is once again calling upon our public 

housing authorities to provide assistance to eligible families under 

DHAP. Since the vast majority of these families are already 

housed, our PHAs will make rental assistance payments on behalf 

of these families. These families may remain in their current unit 

or, in some cases if they choose, they can find another unit and 

move. In those cases where a family must move, the PHA will provide housing search assistance. 

Implementation of DHAP is well under way. We have published 

operating requirements, contracts, grant agreements, and case 

management procedures, including software development. We held 

meetings with PHAs, landlords, and advocacy groups both here in 

Houston and in other areas around the Gulf. We have provided onsite technical assistance at PHA offices, broadcast interactive Web 

casts, and established a DHAP referral call center with a toll free 

number. 

On August 11, 2007, FEMA referred to HUD 28,582 eligible families for DHAP. Since then, we have executed 336 grant agreements 

with PHAs that cover over 26,000 of those families. Here in Houston, we have one of the largest concentrations of DHAP families. 

We have executed two grant agreements, one with the Housing Authority of the City of Houston, and one with the Housing Authority 

of Harris County, to serve approximately 9,000 families. By way of 

contrast, Madam Chairwoman, through the entire State of California, we only have 143 eligible families for DHAP. With respect 

to the challenges and concerns we face in regard to implementing 

DHAP, our biggest concern is the nature of the transition from 

FEMA to HUD and all of the complexities associated with it. For 

instance, this complexity resulted in HUD concerns that the transitions would not be seamless for all families. Therefore, it was decided to delay the complete transition to DHAP from November 1, 

2007, to December 1, 2007. 

Madam Chairwoman, members of the subcommittee, I cannot say 

enough about the tremendous response and effort put forward by 

our PHAs throughout the country. Without their dedication and 

commitment, DHAP would not be possible. I especially would like 

to commend both the Housing Authority of the City of Houston and 

the Harris County Housing Authority for their exceptional work on 

DHAP. All new programs have growing pains. Our PHAs, through 

their hard work and perseverance, have been able to ramp up this 

program and provide case management operations within 30 days 

of signing an agreement with FEMA. 

Madam Chairwoman, I wish again to express our enthusiasm for 

being able to help. We believe that HUD, using our local PHA infrastructure, can effectively and efficiently deliver assistance. The 

expertise is already on the ground to link case management services and housing assistance in order to provide a comprehensive response to help families recover from a disaster. In conclusion, and 

11

on behalf of the Secretary, Madam Chairwoman, again, I want to 

thank you for affording HUD the opportunity to discuss DHAP 

with you and the subcommittee in its implementation here in 

Houston and around the country. I would be happy to respond to 

any questions that you might have. 

[The prepared statement of Mr. Ozdinec can be found on page 

114 of the appendix.] 

Chairwoman WATERS. Thank you very much. 

Mr. Gerber. 

STATEMENT OF MICHAEL GERBER, EXECUTIVE DIRECTOR, 

TEXAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS 

Mr. GERBER. Good morning, Madam Chairwoman, Congressman 

Green, and Congresswoman Sheila Jackson Lee. My name is Michael Gerber, and I am the executive director of the Texas Department of Housing and Community Affairs in Austin. I’d like to 

thank you for the opportunity to appear before you today. Madam 

Chairwoman, before I start, for those of us who have lived with a 

natural disaster in Texas for the last 2 years, our hearts and 

thoughts certainly go out to the people in Southern California who 

are dealing with the effects of these horrific fires. 

Chairwoman WATERS. Thank you. 

Mr. GERBER. My department, TDHCA, is the lead State agency 

to assist low-income Texans in finding safe, decent, and affordable 

housing. Without you and your colleagues in Congress, we couldn’t 

do our jobs. And we’d like to thank you for all that you do to help 

provide a better standard of living for low-income Texans. We also 

want to join in thanking you for your efforts in passing the new 

Housing Trust Fund legislation that will help even more low-income Texans and other persons of low income across the country 

to have greater access to affordable housing. 

The National Housing Trust Fund would enable our State to 

have another tool in order to target lower-income Texans, especially those at 30 percent and below. And we will certainly take you 

up on your request to be in touch with our members of the Senate 

to make them aware of the benefits of the Housing Trust Fund nationally and here in Texas. Thankfully, our State legislature has 

also received the word about the benefits of the Housing Trust 

Fund. And thanks to the efforts of a number of folks in this room, 

our State legislature in the last legislative session approved an almost 60 percent increase in our own State housing trust fund. 

Even with all that help, we know that we’re still not reaching the 

need that’s out there. So what exactly are we doing? With the Federal funds available, we’ve allocated at TDHCA more than $680 

million for low-income Texans during the 2007 fiscal year that just 

concluded. With those funds, we rehabilitated seniors and single 

head-of-household homes in rural Texas allowing families to stay 

in their community while repairing their homes to a decent standard. 

We used private activity bonds to place a record level of assisted 

and low interest rate unassisted mortgages helping those people 

who are ready to take the next step in the housing continuum of 

home ownership. These are safe, traditional mortgages that provide 

12

real security rather than people going to higher interest rate loans 

to gain homeownership. 

Locally, through our Texas First time Homebuyer Program, we 

have been able to help more than 1,500 families here in the Houston area achieve the American Dream of homeownership. TDHCA 

offers the lowest interest rates of any State agency and we have 

a very safe and traditional mortgage product that’s firmed up by 

conventional underwriting. You’ll find no exotic ARMs or balloon 

mortgages through TDHCA. 

We also work with the Department of Energy Weatherization 

Program that not only saves energy but helps a family afford to 

heat here in Texas and cool—cooling’s very important—a home 

without making choices between food and electricity. 

And, of course, the public-private partnership of the Low Income 

Housing Tax Credit Program has had a tremendous impact in creating additional affordable house or rehabbing existing housing and 

improving the quality of life for the residents in those communities. 

For instance, here in the Houston area alone, we have placed more 

than 26,000 units of affordable housing since the program’s inception in 1986. We have built more than 250,000 units around the 

State. So it’s a great record of accomplishments, but clearly we 

need to do more. We also make sure that every dollar spent is utilized for its maximum impact. 

And as a responsible steward of these valuable but limited Treasury Funds, we closely monitor these units for compliance with all 

State and Federal regulations. Once the units are placed in service, 

we make sure that the residents and the taxpayers get the full benefit of the program. This past year, our State legislature gave us 

the power to levy financial penalties up to $1,000 a day against 

those developers who are not keeping their commitments. That’s 

$1,000 a day per violation. Accordingly, we’ll make sure that those 

few bad actors are firmly removed from the program and that a 

clear message is sent industry-wide that TDHCA will not tolerate 

slumlords. Our ultimate concern is always for the safety and welfare of our low-income tenants, and we are proud here in the Houston area to be partnered so closely with the City of Houston and 

Harris County in that regard. 

I also wanted to share with you this morning the active work 

we’ve done in leading Texas’ disaster recovery efforts stemming 

from Katrina and Rita. While we appreciate the efforts of the entire Congress in assisting Texans, I would be remiss if I did not 

thank you, Madam Chairwoman, along with Congressman Al 

Green, Congresswoman Jackson Lee, Congressman Ruben 

Hinojosa, and Congressman Kevin Brady. So many other members 

of the Texas delegation have been key in making sure that we have 

some resources to assist Texans in need. 

We expect with the dollars we receive, we will serve more than 

8,000 Texans here in Southeast Texas, including Harris County. 

Shortly after Congress appropriated the funds, Texas Governor 

Rick Perry designated TDHCA as the lead agency for administering the funds that Congress has given to help us. 

In May of 2006, we received our first allocation of funds. That 

was $74.5 million, which was split almost evenly between housing 

and infrastructure. The second allocation of funds came earlier this 

13

year, and it totaled $428.6 million. We’re working very ambitiously 

to get those dollars out. Governor Perry designated that $60 million specifically would be designated for Houston, Harris County, 

to meet the needs of Katrina evacuees. Houston will be using its 

$40 million of that $60 million for law enforcement overtime and 

public safety issues associated with the influx of close to 200,000 

Katrina evacuees. And the City will also be using part of the funds 

to rehabilitate many multifamily developments that are called 

home by Katrina evacuees to ensure that they will have safe and 

decent, affordable housing options. The remaining $20 million will 

be used by Harris County for a myriad of social services assistance 

programs for evacuees, such as crisis counseling and medical services. The remainder of the funds are being used primarily throughout Southeast Texas to meet the physical devastation that has been 

suffered throughout the 22-county area surrounding Houston and 

heading mostly east. 

But, again, we will continue to report to you and make sure 

those funds are used wisely. We are so grateful that you have 

taken the time to come to Houston, Representative Waters, to see 

this situation here firsthand. We welcome any questions. 

[The prepared statement of Mr. Gerber can be found on page 60 

of the appendix.] 

Chairwoman WATERS. Thank you. 

Mr. Celli. 

STATEMENT OF RICHARD S. CELLI, DIRECTOR, CITY OF HOUSTON HOUSING AND COMMUNITY DEVELOPMENT DEPARTMENT 

Mr. CELLI. Thank you very much for the opportunity to appear 

before you today and present brief remarks relating to the unique 

challenges and opportunities in the City of Houston. 

Two factors create increasing demand for affordable housing in 

Houston: New households forming due to immigration or population growth; and pent-up demand for homeless persons or low-income households who are enduring substandard housing conditions 

by two or more families sharing one roof. 

According to the 2000 census, about 9,000 households per year 

will be moved into Houston. In addition, 65,000 households were 

reported as overcrowded in the 2000 census and approximately 

12,000 individuals in the City of Houston are currently homeless. 

Total demand for affordable housing must include some accounting 

for these underserved households. As Congressman Green mentioned in his opening remarks, the homeless population is a unique 

and severe problem in the City of Houston. We work diligently as 

a city. We meet every 2 weeks as a city, leaders within the city 

community, to try and solve the homeless issue, but we need more 

dollars. 

Due to the low incomes earned by many Houston households, the 

overwhelming majority of housing units will have to be affordable 

rental units, with less than 10 percent affordable single family 

home units. The under 50 percent of area median income, small 

family submarket is the most underserved in the Houston market. 

Over 27,000 families are rent-burdened, meaning that they spend 

more than 30 percent of their monthly income on housing. 

14

The demand for affordable housing is staggering. My staff estimates that, including new arrivals and underserved current residents, 2,000 households per year will demand affordable housing 

products. Of these, 1,300 households are projected to have incomes 

below 30 percent of area median income, and 700 households are 

projected to fall in the 30 to 60 percent area median income. In addition, the Katrina evacuees currently living in Houston and benefiting from re-extended housing vouchers will eventually need to 

find housing on their own. This will increase our demand further. Historically, Houston City programs have invested about $54 

million per year in housing. The City of Houston has worked diligently to leverage all available resources, using low income housing 

tax credits, HOME funds, and requiring developer equity in outside 

debt in many multifamily transactions. The City of Houston has 

encouraged private investment in redeveloping historic neighborhoods via the Houston Hope Program by granting downpayment 

assistance to low-income families purchasing their first home, thus 

reducing the mortgage risk to lenders. 

Houston, like all major cities, works hard to meet the needs of 

its citizens. Meeting all the demands for housing would cost approximately $100 million a year. To close this gap, additional resources are needed. I assure you, as director of housing and community development, I could easily invest 3 times my current allocation of HOME funds every year and still not meet the needs of 

deserving Houstonians. 

Enactment of the National Housing Trust Fund Act of 2007 and 

the related Expanding American Homeownership Act of 2007 

would help the City of Houston by providing more funds to benefit 

low- to moderate-income families both directly and indirectly. As a 

participating jurisdiction, Houston would receive some portion of 

the trust funds intended to create 150,000 units of affordable housing nationwide each year. The requirement that such housing be 

primarily targeted for families with AMI below 30 percent would 

help those families here who have the greatest demonstrated need 

for housing assistance. Restructuring of the FHA program to reduce the need for private market subsidy of subprime lending 

would provide some benefit to Houston even though our housing 

stock is priced very affordably. Any product that provides lower 

cost alternatives for low-income households who qualify for mortgages is a good product. I applaud the Representatives’ study of the 

needs of everyday households and welcome your interest in Houston. Thank you very much for having me. 

[The prepared statement of Mr. Celli can be found on page 57 of 

the appendix.] 

Chairwoman WATERS. Thank you very much. And while I failed 

to announce Mr. Allison, I’d like to call on him now. Mr. Horace 

Allison is a senior vice president of the Housing Authority of the 

City of Houston. I thank you for being here. 

STATEMENT OF HORACE ALLISON, SENIOR VICE PRESIDENT, 

HOUSING AUTHORITY OF THE CITY OF HOUSTON 

Mr. ALLISON. Thank you. Welcome to Houston. Chairwoman Waters, Congresswoman Lee, and Congressman Green, I want to 

thank you for your tireless efforts in support of affordable housing. 

15

On behalf of the resident population that we serve, we want to 

thank you for convening this hearing here in Houston. 

The Houston Housing Authority operates about 4,000 units of 

public housing and currently runs a voucher program of about 

15,000 units. We have a waiting list of over 42,000 families for 

those two programs. We opened our waiting list last December and 

it was only open for 14 days. And to give you a magnitude of the 

need, we ended up with 30,000 people in 14 days wanting to get 

on the waiting list. This does not include people who may have not 

had the opportunity to or who may need housing assistance but 

who elected not to. 

There’s a vast need for affordable housing in Houston. Our current utilization rate is 99 percent for the Public Housing Program, 

and 98 percent for the voucher program. In our voucher program, 

we only have a turnover of about 120 units a month, which means 

if you look at that 30,000 waiting list, it will be a long time before 

those families can be served. Hence the need for additional vouchers in the City of Houston. The families that we serve, typically 

their income is about $10,000 per year, whereas the median income 

for the City of Houston is $61,000 a year. 

How we’ve been trying to address some of these issues—the 

Housing Authority, several years ago, embarked with HUD’s participation on the Hope VI program to develop additional affordable 

housing. We received $56 million in Federal funding in which we 

turned around and leveraged into $110 million. We did that in 

partnership with both the private sector, the public sector, and the 

City and State and local entities so that we could leverage those 

funds. Out of that, we created over 1,000 units of affordable housing. Rental, multifamily rental, single family rental, homeownership opportunities for families, inclusive of historic rental and 

homeownership, and the provision of social and community services. The effort revived a formerly neglected neighborhood in the 

near west end of Houston. It was done with the help and in partnership with various City leaders and departments. 

Mayor Bill White of the City of Houston has formed a joint task 

force comprised of the Housing Authority, Houston Housing Finance, and Housing and Community Development to address the 

affordable housing needs here in Houston. It’s on the front page. 

In Katrina and Rita, as you’re aware, the Gulf Coast was devastated. But Houston welcomed the evacuees into the City of Houston. Working with the City, working with the County, we processed 

over 60,000 families during a 4-month period of time in helping 

them find shelters, moving from the shelters into homes or into 

multifamily units. It took some 80 of our key staff people working 

12- to 14-hour days, 7 days a week, for over 6 weeks, to address 

this need. The impact on our current program was felt, however, 

knowing the need for maintaining the existence of affordable housing in Houston, we prevailed, and our current programs are functioning well. 

Currently under the KDHAP DVP and DHAP program, we manage about 1,500 DVP vouchers and we’re working on 2,400 DHAP 

vouchers. Our concern when this program ends is the need to address those who will not be assisted, i.e., the elderly and/or the disVerDate 0ct 09 2002 17:26 Jan 29, 2008 Jkt 039914 PO 00000 Frm 00021 Fmt 6633 Sfmt 6633 K:\DOCS\39914.TXT HFIN PsN: TERRIE
16

abled. There will be a need for additional vouchers to address these 

families. 

Some of the challenges that the Housing Authority faces are: this 

vast waiting list, as I said earlier, 42,000 families; shortfall in the 

availability of development funding; and operating subsidies at 

only 80 to 85 percent. And just imagine if your household was only 

receiving 82 percent of what you thought would be needed, you can 

feel the impact of that as well as the Housing Authority. So there’s 

an increased need for public housing units in the City of Houston. 

A city of our size should have upwards of 10,000 public housing 

units, and we only have 4,000. There’s a need for additional funding and support to adequately support healthcare, education, and 

employment, and provide supportive services, needs from HUD, 

simplification of the rules and regulations so that Housing Authorities can be more proactive in addressing housing needs, reforming 

the adjusted income definition, and something as simple as—for 

the seniors and the elderly, just something as simple as having the 

elderly to be able to provide medical information through a copy as 

opposed to having to go to the doctor to obtain a certified copy. 

Chairman, Chairwoman, and committee members, we want to 

thank you for coming to Houston. We want to recognize again your 

tireless efforts in support of affordable housing in Houston. And we 

want to make sure that you’re aware that the Houston Housing 

Authority and others in the City are doing their best to deliver and 

create additional affordable housing opportunities as we move forward. Thank you. 

Chairwoman WATERS. Thank you all very much for your testimony. I recognize myself for 5 minutes for questions. I think I’ll 

start with Mr. Gerber. 

You mentioned that this legislature provided a 60 percent increase in the State housing trust fund. Could you tell me what that 

puts the funding level at and just discuss a bit about the mechanism for funding the State trust fund as well as the targeted requirements. And I think it was you that I talked to earlier. You 

asked me about the City of Los Angeles housing trust fund. I gave 

you a wrong figure. It’s $100 million for the City of Los Angeles. 

I think I was talking with you about that. So tell me about yours. 

Mr. GERBER. Sure. I wish I could say ours was anywhere near a $100 million. We have historically received about $7 million a 

year from the legislature. Thanks to the efforts of folks in this 

room, it was increased by $5 million. The $7 million that has been 

available remains largely limited to something called our bootstrap 

program. That’s— 

Chairwoman WATERS. This is for the entire State? 

Mr. GERBER. For the entire State. 

Chairwoman WATERS. $7 million? 

Mr. GERBER. $7 million—$12 million. $12 million is the total. 

Chairwoman WATERS. $12 million is the total? 

Mr. GERBER. $12 million now. It was $7 million, but now it has 

gone up by $5 million. 

Chairwoman WATERS. Provided by the legislature. 

Mr. GERBER. The $5 million. And that’s the only money. 

Chairwoman WATERS. Did you put any of your CDBG money in 

too? 

17

Mr. GERBER. No, ma’am. 

Chairwoman WATERS. No CDBG. 

Mr. GERBER. No CDBG. 

Chairwoman WATERS. Do you have any money that’s coming 

from the developers to support this fund in any way? 

Mr. GERBER. No, ma’am. That’s the only money. 

Chairwoman WATERS. So this is the total amount of your statewide housing trust fund? 

Mr. GERBER. That’s correct. And the $7 million, a little over, is 

largely used again for the bootstrap program, which is a self-help, 

sweat equity program largely done in the Colonias along the U.S.-

Mexico border. 

Chairwoman WATERS. Largely on what? 

Mr. GERBER. Largely sponsoring homes in the Colonias, which 

are areas along the U.S.-Mexico border, that have just tremendous 

needs. It’s a sweat equity, Habitat for Humanity-like construction 

program, and we have had tremendous success down there using 

those very limited resources. The $5 million, though, that the State 

legislature has put in, we’re trying to do a number of very innovative things. And we actually have several notices of funding availability out for those funds. Our hope is that we can prove that a 

little bit of housing trust fund money can go a long way. And there 

are opportunities to increase home ownership through production 

in senior housing, multi-family housing. There are a variety of different homeownership program options that might be available, additional programs to provide barrier removable for the disabled 

community and accessibility benefits for the disabled community. 

That has certainly been a key thing. 

We’re also using some of those funds for gap financing for disaster victims who are not able to quite get into a safe and affordable repaired home or new home because they just don’t have 

enough money in the current benefit that we have in our CDBG 

program for disaster recovery. So that gap—that missing gap is 

also—we have about $1 million that is going into meeting that, 

those gap financing needs for those folks in Southeast Texas as 

well. 

Chairwoman WATERS. Just give me the total amount of State assistance for housing for Houston. Tell me basically that in addition 

to your housing trust fund, whether CDBG or HOME funds, or any 

other funds or tax credits, give me an idea of what the State does 

to assist housing in the Greater Houston area, in Harris County. 

Mr. GERBER. Sure. Thanks again to our tax credit program, 

which is $42 million statewide, roughly 25 percent of that goes here 

into the Greater Houston area for affordable housing. So that’s putting real multifamily housing units on the ground, either new construction or rehabilitation. In terms of the home program— 

Chairwoman WATERS. Wait. So going to both nonprofit and forprofit developers? 

Mr. GERBER. Yes, ma’am. That’s correct. The HOME program, 

the City of Houston is a participating jurisdiction, so they receive 

a direct award of HOME funds. And that gets administered by Mr. 

Celli. 

Chairwoman WATERS. That’s from the State? 

Mr. GERBER. From the Federal Government. 

18

Chairwoman WATERS. From the Federal—so that is CDBG 

through the State to the local? 

Mr. GERBER. That’s the HOME program. The HOME program, 

which can be used for a myriad of purposes, including tenant-based 

rental assistance, homebuyer assistance, or owner-occupied rehab. 

We at the State level manage a pot of about $45 million in home 

funds, but it’s for largely the rural parts of the State, the nonparticipating jurisdictions that aren’t big enough or sophisticated 

enough to manage their program on their own. Large cities like 

Houston, of course, have that ability, so they receive a direct allocation from HUD for the HOME program. 

Our other big program that we have are certainly the first-time 

homebuyer program. We do a tremendous amount of business here 

in the Houston area, not just in Harris County, but in the surrounding counties which have large, booming suburbs. I’m very 

pleased that just with our last issuance of first-time homebuyer 

funds, $16 million got used within 30 minutes to provide mortgages 

for families here in the Houston area, first-time homebuyer mortgages here in the Houston area. So that’s another program. And 

right at the moment, we have $120 million in funds available for 

folks here in Houston as well as Statewide. 

Chairwoman WATERS. What would say is the poorest area of—

and maybe the Mayor would like to—the absolute neediest, poorest 

area of the Houston area in your City, say, Mr. Celli? 

Mr. CELLI. We have several neighborhoods, Congresswoman, that 

we’re focusing on with Houston Hope—the Settegast area on the 

near north side of Houston, Acres Home, and Sunnyside. Those are 

the areas that we’re focusing our attention with the Houston Hope 

foreclosure program where we’re trying to create affordable housing 

and redevelop these neighborhoods. 

Chairwoman WATERS. So what do you do as the City and the 

State combined to try to work together and target funding to some 

of the neediest areas? And how is that realized? What can you tell 

me about a combination of HOME funds, Housing Trust Funds, 

CDBG, and other funds that you’ve directed? What percentages do 

you put into the poorest areas? 

Mr. CELLI. Primarily we work with the State, with the low income housing tax credit program. We try and leverage those funds 

to do multifamily projects. Lately we’ve been focusing our efforts on 

the homeless. We’ve done just one project that we—that just scored 

number one in the State of Texas, an SRO right on the Gulf Freeway in Houston, right as you come in from Hobby Airport, where 

they were awarded low income tax credits. And partnered with our 

dollars two to one, we’re going to credit about 175 brand new units 

of single room occupancy. 

Chairwoman WATERS. So are you focusing on permanent housing 

for the homeless or basically still emergency shelters? 

Mr. CELLI. Still emergency shelters. We have a desperate need 

for permanent housing for the homeless. We’ve spent our initial efforts with rapid rehousing, but with—after the rapid rehousing, we 

need to create some permanent housing in the City of Houston 

along with the commensurate programs to get people back on their 

feet, some support programs. Those cost money, and there is a lot 

of money involved in that. 

19

Chairwoman WATERS. That will be a focus of our committee to 

try and get permanent housing for the homeless. We think that 

this vicious cycle of emergency shelters and people lined up has to 

stop. 

Mr. CELLI. We applaud that. 

Chairwoman WATERS. Thank you. So we’ll be looking forward to 

the efforts put forth here and see what we can do to provide some 

assistance. 

To Mr. Allison, that waiting list that you have is typical of what’s 

happening all over the country. And the only way to deal with that 

is what we’re attempting to do through the Housing Trust Fund, 

the National Housing Trust Fund, that will present some new opportunities for people who need housing. Hopefully, as Mr. Green 

described, through the resources that we will get from the GSEs, 

Fannie Mae and Freddie Mac, and Federal Home Loan, we’ll be 

able to make some new money available for the creation of new 

housing units. 

As we look at our public housing, we have to figure out how to 

expand those opportunities and give people some choices. And as 

we look at Hope VI projects, we have to make sure that we don’t 

eliminate housing as been done with some of the Hope VI projects 

where they redesigned these projects so that they look beautiful 

and they’re wonderful, but they don’t tell us what happened to the 

people who get lost after they redevelop the housing projects and 

they reduce the size of those projects. So we’re going to look out 

for public housing and for expanded opportunities for people who 

really do need that assistance. 

With that, I’m going to turn to Mr. Green for his questions. 

Mr. GREEN. Thank you, Madam Chairwoman. And I thank the 

members of the panel for being here today. Your testimony has 

been very enlightening. 

Let me start by just asking if we have any persons in the audience who are with NGOs or some sort of 501(c)3, some sort of entity that is trying to assist with housing? If you are, would you raise 

your hand so that I can just get some sense? 

Okay. We have a lot of people here who are working with housing. And this is important. So I would like to ask each member of 

the panel, as tersely as you can, to tell us about some of the products that are available for these NGOs so that they can benefit 

from much of what may not be published widely. I understand that 

you have problems in terms of getting your information out. You 

don’t have big budgets to PR your products. So let’s talk about 

some of the products that you have that they can benefit from. And 

friends, this would be a good time for you to take out your pen and 

your paper. Because one of the things that we want to do in Congress is make sure that what we know and, to a limited extent 

some of what we don’t know, you have an opportunity to know. 

So let me start with you, Mr. Allison. Tell me some of the things 

that NGOs are doing that can be of benefit to them. 

Mr. ALLISON. We have been partnering with other entities in the 

development of affordable housing. 

Mr. GREEN. Say that again. 

Mr. ALLISON. We have been partnering with other entities in the 

development of affordable housing. We don’t have an open RFP 

20

process, but any organization that desires to partner with the 

Housing Authority or trying to obtain assistance through the Housing Authority to develop affordable housing is welcome to come in. 

We will sit down with them and evaluate their project or their proposal and work with them to try to see if we can go forward. We 

do have some limited capital moneys that we are investing, whether it be with a nonprofit or a private developer, but that is our 

process. 

Mr. GREEN. Are you currently working with not-for-profits in developing products right now? 

Mr. ALLISON. No, we are not partnered directly with a not-forprofit. 

Mr. GREEN. If you have one that will perform some outreach, you 

would be amenable to working with a not-for-profit— 

Mr. ALLISON. Absolutely. 

Mr. GREEN. —to develop a product? 

Mr. ALLISON. Absolutely. 

Mr. GREEN. All right. Thank you very much. Now, Mr. Celli, in 

giving your explanation, if you would, tell us about the low income 

tax credit just briefly, because we have a lot of NGOs that can benefit from that kind of intelligence in terms of how that can work 

to develop affordable housing. 

Mr. CELLI. Well, a low income housing tax credit is the best way 

to create quality affordable multifamily housing for low income individuals as well as seniors. It basically provides a Class A property with Class C rents. No other vehicle can leverage dollars the 

way that does, and we like to use our Federal dollars in partnership to leverage the low income housing tax credits. 

Generally, we can do that sometimes two and sometimes three to one. So what that really relates to, it costs about $100,000 to 

build a multifamily apartment unit that’s a quality, livable, decent 

place for people to live, but it only debt service about $30,000 of 

that cost. So low income housing tax credits, along with our dollars, 

can bring down that affordability for our senior citizens as well as 

for our low-income individuals. 

Mr. GREEN. For further explanation, that low income tax credit 

means that there is a tax certificate that is made available to 

someone that we’ll call a developer. Is that a fair statement? 

Mr. CELLI. Yes, it is. And then it’s sold to investors. 

Mr. GREEN. Let’s just make that clearer. When we say that it’s 

sold to investors, that means that this developer will go out and 

find an investor who can benefit from a tax break? 

Mr. CELLI. Yes, sir. 

Mr. GREEN. And he then will partner with him, and he’ll receive 

moneys from the investor that he can couple—that the investor will 

benefit from the tax break, so he’s willing to give the money to the 

developer to develop property? 

Mr. CELLI. Yes, sir. 

Mr. GREEN. And when this property is developed, of course they 

all go to the bank. But it means that some not-for-profit or some 

entity we’ll call a developer has had the opportunity now to build 

this low-income housing. 

And tell me if we have some NGOs that are participating in this 

process. Do we have some? 

21

Mr. CELLI. Yes, we do. 

Mr. GREEN. Okay. Now for the benefit of those of you who are 

listening and you want to get into the business of helping to develop affordable housing, this low income tax credit is an excellent 

means by which you can get involved. It really provides money 

from the private sector by virtue of a tax break that is accorded. 

Is that a fair statement, Mr. Celli? 

Mr. CELLI. Yes, it is. 

Mr. GREEN. All right. Do you have another product that you can 

tell us about briefly? Because my time is quickly passing. 

Mr. CELLI. The City of Houston just provided $700,000 to 10 different community development corporations to construct 10 houses 

in the Houston Hope neighborhoods. Those are the neighborhoods 

that I mentioned earlier, like Sunnyside, Acres Home, Settegast, 

and Independence Heights. That’s a single family program where 

we’re encouraging new homes by community development corporations with our product. Along with that, we’re coupling our down 

payment assistance program where for the homeowner, you can 

buy down the mortgage up to $30,000 in the Houston Hope neighborhoods. 

Mr. GREEN. And for additional information on these products and 

others that you may have, how would people access the intelligence? 

Mr. CELLI. Call me. 713–868–8444. 

Mr. GREEN. Now, if you did not get that number, raise your 

hand—you need to repeat it. 

Mr. CELLI. 713–868–8444. That’s a direct line to my office. 

Mr. GREEN. Thank you, Mr. Celli. 

Mr. GERBER. In the interest of time, I’ll just add on. The tax 

credit program, that is a very complex program. We were very 

pleased about 3 or 4 months ago to do a—actually less than that, 

an event with Congresswoman Jackson Lee, a workshop with members of the faith-based community who are interested in participating in that program. It is a very complex and challenging program that really is something that requires some degree of expertise. And many of the folks in this room have those skills. We 

would very much welcome a chance to do another workshop, maybe 

even partnered with the City of Houston and the County under 

your good offices. Let’s try to piece that together to invite folks in 

this room to come together and learn in a, you know, full-day workshop, which is really what it takes to get, I think, a grounding of 

some of the benefits and the risks of going into this. Because building a 250-unit apartment complex is not something that one wants 

to go into lightly. There’s a lot that is involved. So we welcome that 

chance. And, of course, we really value the leveraging that goes on 

with locals in order to make those tax credit deals work in places 

like Houston. So I would just focus really on that program. 

Mr. GREEN. Well, I want to thank you for volunteering and being 

accessible. I think we’ll take you up on that offer and have that 

workshop. Absolutely. There’s a competitive side to the low income 

tax credit program. Are you prepared to address that, or should I 

go to the next speaker? 

Mr. GERBER. Well, there are really two tax credit programs. 

There’s a 4 percent tax credit program, and then there’s the 9 perVerDate 0ct 09 2002 17:26 Jan 29, 2008 Jkt 039914 PO 00000 Frm 00027 Fmt 6633 Sfmt 6633 K:\DOCS\39914.TXT HFIN PsN: TERRIE
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cent tax credit program. It’s the 9 percent tax credit program that 

has the deepest subsidy and is the program that is the most competitive. And, you know, we’re oversubscribed for those funds 3 to 

1. 

In contrast, the 4 percent tax credits are generally layered with 

a bond transaction. And the Harris County, you know, Housing Finance Corporation of Southeast Texas has a finance corporation. 

All are bond issuers. The Texas Department of Housing and Community Affairs is a bond issuer. And then we will layer onto it 4 

percent tax credits. There are plenty of those. It’s based on the volume counts the State receives to be able to do an additional deeper 

targeting to make the economics of the deal work. So for both a 

bond transaction, layered with 4 percent credits, or the 9 percent 

competitive program, I would propose that we do a workshop that 

would link both of those and talk about both of them. Because in 

many cases, in a City like Houston, a bond transaction makes a lot 

of sense at those 4 percents. You can make the economics of it work 

as you can with the 9. 

Mr. GREEN. Ms. Lucinda Daniels will contact you about it. 

Mr. GERBER. I’ll look forward it. 

Mr. GREEN. Mr. Ozdinec, if you can respond quickly, because my 

time is very limited. 

Mr. OZDINEC. Sure, Congressman. As you know, the Department’s annual budget is about $32 billion a year. A little more than 

half of that is the Housing Choice Voucher Program. That’s the engine that drives the rental assistance market pretty much across 

the country. Our ambassadors to our programs are literally public 

housing authorities and our cities. All of our funds flow through 

the cities. But there are things that can be done, obviously, in the 

Section 8 program for the nongovernmental folks out here that do 

small-scale development. They can reach out to their Public Housing Authority. Each Public Housing Authority has the ability to 

project base their vouchers. To the extent that a Housing Authority 

is looking for properties or rental units in— 

Mr. GREEN. Let me just intercede quickly. Explain that term, 

‘‘project base.’’ Many people may not understand exactly what that 

means. That’s an important term. 

Mr. OZDINEC. I’ll give you an example, a hypothetical. If a Housing Authority had 1,000 vouchers in their program, they could take 

the budget authority for up to 20 percent of that voucher program 

and solicit proposals from developers, nonprofit or otherwise, to 

provide rental units through the project-based program. And they 

would sign a 10-year contract with the Housing Authority to provide that unit for waiting list families for that period of time. 

That helps to support some of the deals that Mr. Gerber discussed. The 4 percent deals are tough to do, but often when there’s 

project basing associated with it, it’s the grease that makes the 

wheel run. 

Mr. GREEN. Thank you very much. Madam Chairwoman, I’d like 

to submit for the record a statement from Council Member Adrian 

Garcia. Without any objection, I offer it at this time. 

Chairwoman WATERS. Without objection, it is so ordered. Thank 

you very much. Ms. Jackson Lee? 

23

Ms. JACKSON LEE. Madam Chairwoman, thank you very much. 

And to all the witnesses, let me thank you for very instructive testimony. Might I just repeat, because I think we have already acknowledged the leadership of Chairwoman Waters, but let me repeat these numbers that are so striking. 

I want to pose a line of questioning that hopefully maybe will 

change attitudes: 30,000 people came on the waiting list in 14 days; 

42,000 are waiting for Section 8 vouchers. I know we can do better 

here in Houston. We can do better. And I thank you for that instructive information, because we have to find a way to move toward a corrective action. And so let me just quickly—Mr. Ozdinec, 

let me quickly just refresh your memory. As you know, about a decade or so ago, there was a mindset that suggested that large structures such as Cabrini-Green in Chicago, and some others in Atlanta, were not the way to go in terms of public housing. Unfortunately, Houston got caught up in the overall umbrella where Houston was not high density. And so my question to you, listening to 

Mr. Allison and the crisis we have here, that’s Section 8, but he 

also mentioned the need for public housing units. We have only 

4,000. We’ve had 4,000 for decades. We now are minimally needing 

10,000. What policies, because of the policy that I’ve just enunciated—you worked in New Orleans, you worked in Chicago and 

Atlanta—can be altered to work with a city that really needs these 

public housing units? 

Mr. OZDINEC. Thank you. And I appreciate the question. The 

thing that I think is the most important lesson that we could have 

learned through the 1990’s through the Hope VI program, if there’s 

one very important lesson, is partnerships. Up until that point, 

Housing Authorities were doing public housing developments on 

their own through direct appropriations from Congress to build 

public housing projects. I think in the last decade, we’ve gotten 

housing authorities familiar with the terms that many of the people in this room are familiar with, the difference between a 9 percent and a 4 percent credit. 

What do I need to do to be a good partner to a private developer 

so I can participate as part of a development process where, for example, a 250-unit multifamily development can support perhaps 

100 very-low-income families as part of the public housing program. We have, as part of that new development process, instituted 

ways for nonpublic housing authorities to own public housing 

through long-term rental assistance agreements and other mechanisms that are available to take what were traditionally operating 

subsidies to support market rate and tax credit units combined together to generate additional low rent public housing units in the 

context of a larger community. 

To the extent that housing authorities can take those tools that 

they’ve learned on financing, mixing incomes, mixing financing 

tools, partnering with developers who develop affordable public 

housing across the country, and being a good steward and a good 

partner for those sorts of deals, using their Section 8 program potentially to project base, those are all tools, I think, that we’ve 

learned through the 1990’s. To the extent that the Congress decides to appropriate any additional development funds for the Department, my recommendation would be for those funds to be used 

24

very similar to the way we use the tax credit equity both on the 

9 percent and the 4 percent credits; that developers submit proposals— 

Ms. JACKSON LEE. I’m sorry. My time is limited. 

Mr. OZDINEC. I apologize. 

Ms. JACKSON LEE. If you can wrap up. 

Mr. OZDINEC. Well, that’s it. I mean, that would be my number 

one lesson, partnerships and a variety of funds being pulled together to create partners and stakeholders around affordable housing developments. 

Ms. JACKSON LEE. I guess the question I would have is whether 

or not we have the ability through legislation or otherwise to go 

back to those underutilized communities that never had the density 

and let them build public housing. Is that a possibility? 

Mr. OZDINEC. If the money is there, Congresswoman, I think the 

answer is yes to that. I think the method of development now has 

changed from 30 years ago to something more akin to what you see 

in Atlanta and some parts of Chicago now. 

Ms. JACKSON LEE. Thank you. Let me ask Mr. Celli on another 

issue that I’m very keen on and, Mr. Ozdinec, if you can respond 

to this as well, and that is the question of senior repair housing 

under your community development funding. It is in your consolidated plan. I understand the program is, if you will, suspended. 

The question is the ability to be able to address senior repair programs in a way that meets the needs in this community. And Mr. 

Ozdinec, if you can speak from a housing perspective—from HUD’s 

perspective in the utilization of these funds, so what we call senior 

repair reconstruction, as to the viability of that. And why don’t I 

go to you first and then Mr. Celli, please. 

Mr. OZDINEC. Thank you, Congresswoman. That is not my account, unfortunately. 

Ms. JACKSON LEE. I understand. 

Mr. OZDINEC. But I met with your staff this morning, and I will 

definitely get them in contact with our Deputy Assistant Secretary 

who runs the CDBG program. We can have a conversation about 

that to ensure that your concerns are being met. 

Ms. JACKSON LEE. Mr. Celli. 

Mr. CELLI. We are in the process of going back and looking at 

about 1,800 homes that are required by us, by HUD, to go back 

and reinspect homes that we did senior repair to going back to 

2001 through 2005. And we have to go back and reinspect those 

houses and fix them if they need to be fixed. Unfortunately, we 

have a waiting list of about 2,000 individuals who are on that that 

are in need of repair work. And that list was created when Federal 

funds were cut off to the City of Houston in 2005. And so we’re in 

the process—on that 2,000 waiting list, we’re looking at, I believe, 

200 of those houses right now. And we’re beginning to try to whittle down that waiting list. 

Ms. JACKSON LEE. So, Mr. Ozdinec, we can work with you to correct this seemingly heavy burden on the City of Houston, which is 

looking behind and not forward, the crisis of senior housing and 

disabled housing on rehab and reconstruction, maybe we can move 

along, because it really is at disaster proportions in terms of seniors and the disabled not being able to have home repair because 

25

the work that the City is now doing is work that is fix-up work, 

meaning going back to try and correct ills. And I know there should 

be a parallel track of them being able to fix the problems of the 

past and report to HUD but move forward on a program that is literally now stagnated and people are suffering. 

Mr. OZDINEC. Yes, ma’am. 

Ms. JACKSON LEE. Thank you. 

Chairwoman WATERS. Thank you very much. The Chair will 

grant herself an additional minute because, as we walked in, we 

were handed pictures from some of the citizens about homes that 

were built, developers that were contracted with by the Housing 

Authority, that are falling apart. Who is responsible for making 

these homeowners whole for these homes that have been paid for 

by HUD, I’m told? 

Mr. ALLISON. I would need to see the properties. The Houston 

Housing Authority is only responsible for homes in Houston. We 

are not responsible for homes in San Antonio. 

Chairwoman WATERS. Well, without looking at these particular 

ones—I’ll give you a copy of these, are you aware of this problem? 

Mr. ALLISON. No, I’m not aware that—of the problems with some 

homes that we have developed that are in disrepair. Not at all. 

Chairwoman WATERS. All right. Are you going to stick around 

after the panel? 

Mr. ALLISON. Yes, ma’am. 

Chairwoman WATERS. Very good, because I think we have some 

people here who will describe it in more detail to us. With that, I 

think—yes? 

Ms. JACKSON LEE. May I read just two questions into the 

record— 

Chairwoman WATERS. Yes, you may. 

Ms. JACKSON LEE. —just very quickly? This is for the Secretary 

for HUD. Let me ask for a response to a series of letters that I 

have written regarding the Allen Parkway Village and the nonfulfillment of the Hope VI requirements that were agreed to in the 

reconstruction and rehab of Allen Parkway Village. The second one 

is the issue of HUD programs that may be applied in a discriminatory fashion as relates to low-income residents, particularly in the 

Fourth Ward area. And I’d appreciate it. We have a series of letters 

in to you on that issue. 

Mr. OZDINEC. I’ll look into that, ma’am. 

Chairwoman WATERS. They will be included in the record. 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 30 days for members to submit written questions to these witnesses and to place 

their responses in the record. This panel is now dismissed. I would 

like to welcome our second panel. Thank you very much. I will call 

on Mr. Green to introduce the second panel. 

Mr. GREEN. Thank you. And as you’re coming forward, I will 

start the introductions because time is of the essence and we want 

to cover as much as possible. So panelists, if you would, kindly 

move forward as expeditiously as possible. 

Our first witness will be Mr. John Henneberger. He is the director of the Texas Low-Income Housing Information Service. This orVerDate 0ct 09 2002 17:26 Jan 29, 2008 Jkt 039914 PO 00000 Frm 00031 Fmt 6633 Sfmt 6633 K:\DOCS\39914.TXT HFIN PsN: TERRIE
26

ganization provides a great service in terms of statistical information. We are honored to have Mr. Henneberger with us. 

Our second witness is Mr. Robert Muhammad, the chief executive officer of ACTION CDC; they very much involved when the 

Katrina survivors were coming to the City and in need of a multiplicity of services. They were, of course, there to be of assistance. 

Our third witness is Ms. Debra Junor, a member of the Texas 

Tenants’ Union. She, I believe, has testified in Washington, D.C. If 

not Ms. Junor herself, we’ve had a member of the organization to 

testify before us in Congress. 

Our fourth witness is Ms. Toni McElroy, the president of Texas 

ACORN. Texas ACORN has been to Washington many times on behalf of Katrina survivors, and we’re honored to have Ms. McElroy 

with us today. 

Our fifth witness is Mr. Daniel Bustamante, the executive director of the Greater Houston Fair Housing Center, a long-time community activist and champion for persons who are suffering from 

homelessness. 

Our sixth witness is Mr. Gordon Quan, founding partner of 

Quan, Burdette and Perez, here today on behalf of the National Coalition of Asian Pacific American Community Development, also 

shown as CAPACD. 

And, finally, we have Mr. Manuel Lopez, the housing director of 

the Tejano Center for Community Concerns. I would add also that 

Mr. Quan is a former city council person—I neglected to say this—

who chaired the Housing Committee for the City of Houston. And 

Mr. Lopez has been involved in this community for some time as 

well. I don’t see him currently; but if he does arrive, of course we 

will hear from him. With this said, Madam Chairwoman, I yield 

back to you. 

Chairwoman WATERS. Thank you very much. We will start with 

Mr. Henneberger. We will recognize you for 5 minutes. 

STATEMENT OF JOHN HENNEBERGER, CO-DIRECTOR, TEXAS 

LOW INCOME HOUSING INFORMATION SERVICE 

Mr. HENNEBERGER. Thank you, Madam Chairwoman, and members of the subcommittee. I want to thank you for the opportunity 

to be invited to testify today. I’m John Henneberger. I’m the director of an NGO that undertakes education, research, and advocacy 

concerning the low-income housing and community development 

needs of Texans. Madam Chairwoman, beyond the course of this 

hearing, I would urge the committee to help us shine the light on 

the problems and challenges that have been encountered with providing housing assistance to the 75,000 Texas families who lost 

their homes or had their homes severely damaged by Hurricane 

Rita. We are coming to a train wreck regarding this program because of a lack of adequate funding and the fact that many of the 

poorest people who had their homes destroyed by Hurricane Rita 

in Texas stands not to be able to receive any housing assistance because of the shortage of available funds, but that is a topic for another day. 

And today I would like to first begin by talking to you about the 

current state of affordable housing in Houston, which I can best 

characterize as a worsening crisis. There are four trends that highVerDate 0ct 09 2002 17:26 Jan 29, 2008 Jkt 039914 PO 00000 Frm 00032 Fmt 6633 Sfmt 6633 K:\DOCS\39914.TXT HFIN PsN: TERRIE
27

light the critical housing challenges that face Houston; first of all, 

the large share of Houston residents who rent rather than own. 

Madam Chairwoman, it is counterintuitive to those of us in Texas 

who are very proud of our independence and our ownership to find 

that we are 41st among the States in homeownership. And it is 

deeply distressing to find that Houston is 57th among the large 

U.S. cities in terms of homeownership. We are 22 percentage points 

below the national average of homeownership here in Houston. And 

we are 10 percent below the rate of homeownership of central cities 

in the United States. 

So Houston is a profoundly troubled city in terms of its extremely 

low rate of homeownership. Houston’s rate of homeownership is 

lowest among all the major cities in the State of Texas. We also 

have a very large share of renters who pay too much of their income for rent and utilities—36 percent of all the renters in Houston have incomes below $20,000. And many of these, as I think you 

have already well summarized in statistical data, are severely rentburdened; 140,000 households in the City of Houston with severe 

rent burdens. I provided you 20 pages of testimony which provides 

you detailed statistics, so I won’t go into all of the details here. 

The fourth characteristic trend in Houston is the shortage of 

rental housing to the low-income families who need that housing. 

And the City has, based on our estimates of the 2005 American 

Community Survey, a deficit of 49,323 homes for extremely-low-income families, that is, families below 30 percent of median family 

income. I provided you in my testimony a breakout by congressional district. And those congressional districts which represent 

the Greater Houston area have a deficit of 108,000 homes for families with incomes below 30 percent of median family income. The 

crisis is truly astronomical. 

The fourth trend is the sizable gap between the homeownership 

of the City of Houston and its suburbs. This gap is 23 percent. The 

ratio of Houston homeowners to suburban homeowners is 23 percent lower in the City of Houston than it is in the suburbs. And 

this is in excess of national trends of major metropolitan areas and 

their suburbs. 

And, finally, government housing subsidies, as Ms. Jackson Lee 

has explored with a previous witness, in Houston are disgraceful. 

And the government housing, in essence, has to provide the safety 

net for the poorest families in most cities. In Houston, the rate is 

substantially below that of most of the rest of the country. Houston 

has the smallest number of per poverty population—smallest number of Section 8 units and public housing units per the number of 

people in poverty of any of the 20 largest cities in the country, with 

the exception of Detroit and Phoenix. We are well below the rate. 

We have only one Section 8 and public housing unit for every 22.5 

persons in poverty in this town. That is that a disgracefully low 

rate. All of these make for a major affordable housing crisis in 

Houston. And then came Hurricanes Katrina and Rita, and things 

suddenly got a whole lot worse. 

I’ll briefly summarize a few of the challenges that the City of 

Houston and the surrounding community have faced in meeting the 

housing needs of Katrina and Rita evacuees, first and foremost of 

which is that Texas has received grossly inadequate levels of fundVerDate 0ct 09 2002 17:26 Jan 29, 2008 Jkt 039914 PO 00000 Frm 00033 Fmt 6633 Sfmt 6633 K:\DOCS\39914.TXT HFIN PsN: TERRIE
28

ing for hurricane survivors for housing assistance. The total 

amount budgeted currently for assistance for Katrina evacuees in 

this City, which received by far the largest number of Katrina 

evacuees of any city in the country, is only $60 million. Now, of that $60 million, in our opinion, the City made a poor 

choice to spend a large portion of that money for additional policing 

and for reimbursement of various costs the City has incurred. We 

believe that if you only have $60 million, the first people in line 

ought to be the people who were hurt and lost their homes. And 

the government ought to stand behind them. The housing programs, furthermore, that we have available, housing resources that 

we have available—the other housing resources we have available 

is largely limited to the Low Income Housing Tax Credit Program. 

And Texas did get an allocation from Congress of additional funds 

under the Low Income Housing Tax Credit Program. But the Tax 

Credit Program cannot serve people at the income levels of the average Katrina and Rita evacuee. They just cannot afford those 

rents. And, in fact, a recent market study by the Texas Department 

of Housing and Community Affairs has shown that Houston is actually overbuilt with tax credit units of 60 percent of median family 

income while we have 140,000 plus families below 30 percent of 

median family income who are paying more than 50 percent of 

their income for rent. Texas came together and submitted a plan 

for long-term housing recovery and submitted it to the President in 

2006, which I’ve attached to my testimony. Unfortunately, those 

specific recommendations have largely not been provided for. 

I know my time is up, and I’ll briefly—I’ll move quickly to our 

specific recommendations from that letter. First of all, if Houston 

is going to make it, it’s going to need substantial new Section 8 

Housing Choice Vouchers, and I don’t know exactly where they’re 

going to come from given the budget situation the way it is. The 

combined organizations which looked at the Rita and Katrina problem estimated that Texas cities all together needed 36,000 incremental additional Section 8 vouchers in order to deal with the 

Katrina and Rita population that we’ve had. 

We need an additional, in our estimate, $97.5 million of low income housing tax credits, but only if we can get that coupled with 

a rules waiver which will allow the State issuing entity to permit 

the State to fund a portion of the apartments within each development at a higher level than the 9 percent credits. In other words, 

use the total cap of authority that Congress would give the State 

for low income housing tax credits but allow them to enhance the 

subsidy so we can get some units at the 40 percent of median family income rate, because we are only able effectively to generate at 

the upper 50 percent and 60 percent of median family income rate 

with tax credits. 

Chairwoman WATERS. Mr. Henneberger, is all of this in the attached testimony that you’ve given us? 

Mr. HENNEBERGER. Yes, ma’am, it is. And I thank you very much 

for the opportunity to testify before you today. 

[The prepared statement of Mr. Henneberger can be found on 

page 71 of the appendix.] 

Chairwoman WATERS. Thank you. And I’m hopeful that you will 

make sure that the plan that you alluded to that was presented to 

29

the President about how to fix some of this is not only made available to us but you will perhaps even, at the invitation of Mr. 

Green, come to Washington and work with us on that. 

Mr. HENNEBERGER. Thank you. 

Chairwoman WATERS. I appreciate it very much. And I’m sorry. 

We’re going to have to move on in order to get to everybody’s testimony in the time that we have been alloted. Mr. Muhammad. 

STATEMENT OF ROBERT MUHAMMAD, CHIEF EXECUTIVE 

OFFICER, ACTION COMMUNITY DEVELOPMENT CORPORATION 

Mr. MUHAMMAD. Chairwoman Waters, Representative Green and 

of course my own representative, Sheila Jackson Lee, I am Robert 

Muhammad. I’m the founder and CEO of ACTION Community Development Corporation. I would like the record to reflect, Madam 

Chairwoman, that I am being joined today by Ruqayya Gibson who 

is our executive director, and Sadiyah Evangelista, who is a board 

member and our general counsel for ACTION CDC. 

I hold a master’s degree and I am currently beginning the dissertation phase in my Ph.D. work in the field of urban planning 

and environmental policy at Texas Southern University here in 

Houston. I have served as a student in the ministry and a community servant in Houston for over 20 years. 

ACTION CDC’s mission is to empower low- and moderate-income 

individuals, families, and neighborhoods. Our motto is, ‘‘Improving 

Our Nation One Neighborhood at a Time.’’ 

Houston— Just some background, Madam Chairwoman. Houston 

is a nonzoned, low regulation, market-driven, developer-friendly 

city. Houston’s cost of living is relatively low, as you noted, in comparison to California. When rental cost and unit availability are 

the variables used in determining housing affordability, one could 

reasonably conclude that there’s no shortage of affordable housing 

stock in the City of Houston. However, a more thorough examination will reveal that there is a shortage of safe, hazard free, environmentally sound, energy-efficient, handicap accessible, senior citizen and family friendly affordable housing, conveniently located 

near transit, decent schools, and job centers. 

In Houston, for-profit developers would gladly build affordable 

housing if it was in their best interest. Land acquisition and carrying costs, predevelopment expense, construction, and marketing 

for sales and rental dictates that each project in its highest and 

best use results in the highest return on investment. Therefore, 

housing stock in Houston is built—or affordable housing stock in 

Houston is built by small for-profit developers or nonprofits or is 

the result of cyclical market forces that make housing units available because they cannot reasonably command market prices without major reinvestment and redevelopment. 

I just want to go through the challenges of meeting the housing 

needs of Katrina evacuees, and then I will, if time allows, tell you 

the projects that ACTION is working on in terms of building some 

housing. After Hurricane Katrina, ACTION CDC provided housing 

counseling to 1,400 Katrina families, financial recovery counseling 

to 1,120 families, case management services to 916 families, employment services to 1,620 families, food services to 5,090 families, 

and transportation assistance to 2,050 families. We have provided 

30

$172,164 to families in unmet needs assistance from the long-term 

recovery committee of Houston, $85,000 in direct financial assistance, $240,000 in financial assistance through the American Red 

Cross. Our staff of eight hard-working case managers includes four 

Katrina evacuees. 

Now, according to a recent statistic, nearly 3 years after Hurricane Katrina, an estimated 100,000 survivors still reside in Houston and have no concrete plans to leave and return to New Orleans. Many are elders and they are losing hope, suffering from prolonged mental anguish and/or dying. 

Another challenge is that in assisting 30 percent of the survivors 

who are elderly or disabled, with meeting the long-term needs, the 

survivors who were able to live off of a $600 disability check in 

New Orleans cannot do so in Houston due to our cost of living. And 

they cannot do so in New Orleans any longer because the cost of 

living there has doubled since the hurricane. According to a recent 

Zogby poll, a large number of survivors are currently employed, but 

70 percent earn less than $25,000 per household. Many survivors 

that we have been engaged are living two and three families to a 

household, which contains 9 to 18 individuals per apartment. The 

constant instability in the FEMA housing program has had a negative effect on the mental health of survivors. For the past 2 years, 

ACTION CDC has made it our priority to assist the survivors with 

recovering and achieving self-sufficiency. 

The HUD-funded Disaster Housing Assistance Program administered jointly through the City of Houston and Harris County Housing Authorities will not help every survivor. There are an estimated 25,000 households in Houston not covered by DHAP, and at 

least 50 percent of those households need additional assistance. 

This is a complex situation, meeting housing and human needs, 

will most certainly require patient pragmatic, holistic case management. And funding to provide these services haves to be adequate 

and ongoing. 

In terms of tools that are needed to increase and preserve affordable housing and our position on the National Housing Trust Fund 

Act of 2007, H.R. 2895, let me say it like this to this distinguished 

panel subcommittee. Nonprofits in a nonzoned, low regulated, market-driven, developer-friendly city such as Houston are at a distinct 

disadvantage. Sometimes it feels like we’re being asked to make 

brick without straw. In order to increase and preserve affordable 

housing, we request that you consider the following. 

Continued and increased access to funding, programs such as 

HOME and Community Development Grants are critical to nonprofits to be able to design, build, and manage quality affordable 

housing in the communities we serve. Operating funds for Certified 

Housing Development Organizations is equally, if not more, important because it frees the nonprofit to focus on project delivery 

versus a preoccupation with seeking funds to cover related overhead. Funds for staff, consultants, and quality training are important to building the internal capacity necessary for continual 

project success. 

Transparency and clarity of process has already been stated. 

Federal and State and City entities should simplify processes and 

documentation requirements. 

31

Land acquisition funds, nonprofits cannot build or preserve affordable housing stock if we cannot assemble parcels near job centers, transit, or in low-income areas that are going through 

gentrification. Land cost normally should not exceed 20 percent of 

one’s total project cost. Nonprofits need gap land acquisition funding in order to build affordable projects that would otherwise be 

impossible under highest and best use analysis. 

Lastly, we need predevelopment funds. Nonprofits cannot properly assess the feasibility nor deliver affordable housing projects 

without competent, professional expertise. Private lenders will not 

participate in projects that are not packaged properly or fail to 

cash flow. ACTION predicts that energy usage and expense along 

with public safety will become major determinants of housing affordability in the future. Energy efficient ‘‘green’’ building and safety through design programs increase cost during the development 

phase. However, these predevelopment expenses increase development sustainability and property value over the life of the project. 

I close with this. ACTION CDC fully supports the National 

Housing Trust Fund of 2007 because it will provide increased funding and clear benchmarks for achievement. The addition of significant funds will be tremendous in its impact on underserved communities. In a major metropolis such as Houston, new and existing 

nonprofits need to be positioned to assist government in meeting 

our low-income population’s needs. We see H.R. 2895 as a wise use 

of taxpayer funds. H.R. 2895 helps deconcentrate poverty by allowing nonprofits to offer quality workforce housing to middle class 

first responders, teachers, and other public employees. It is good for 

nonprofits because it has the potential to help create innovative affordable housing developments that are mixed income, mixed use, 

transportation oriented, environmentally sound, energy efficient, 

hazard mitigated, safe, handicapped accessible and financially feasible. May God bless you for your concern for the poor and less fortunate. On behalf of the Board and staff of ACTION CDC, thank 

you in advance for your invitation and consideration of our testimony. 

[The prepared statement of Mr. Muhammad can be found on 

page 110 of the appendix.] 

Chairwoman WATERS. Thank you very much. 

I’d like to ask the other members of the panel to please summarize your testimony. We’re going to try to wrap each of your presentations up in about 4 minutes. We allowed the first two to go far 

beyond the 5 minutes, because I know they have been waiting a 

long time to tell somebody about what is going on and what the 

needs are. I think they have done a pretty good job of kind of identifying what the needs are, so I’d like you to just add to it as quickly as you possibly can, and then we’ll give the members an opportunity to ask some questions. We will then have to catch planes to 

go back to Washington to vote. Thank you very much. 

STATEMENT OF DEBRA JUNOR, MEMBER, TEXAS TENANTS’ 

UNION 

Ms. JUNOR. Good morning, Congresswoman Waters, Congressman Green, Congresswoman Jackson Lee, and members of the 

committee. My name is Debra Junor, and I’m here of behalf of the 

32

Texas Tenants’ Union, a nonprofit tenants’ rights organization 

which empowers tenants through education and organizing to protect their rights, preserve their homes, improve their living conditions, and enhance the quality of life in their community. I am a 

former tenant of a HUD-assisted apartment complex, a former 

HUD-funded VISTA volunteer, and a former tenant organizer for 

the Texas Tenants’ Union. 

The HUD properties I have worked in and will discuss today are 

privately-owned apartment complexes that either have HUD-insured loans or project-based Section 8 Housing Assistance Payments contracts, or both. In the 1960’s and 1970’s, HUD encouraged private developers to build affordable housing through low-interest HUD-insured loans. In exchange, the owners were required 

to keep rents affordable to low- and moderate-income people. 

In the late 1970’s and early 1980’s, HUD began providing additional subsidies to some of these developments and created new 

apartment complexes with the project Section 8 program. This program provided great affordability to low- and extremely-low-income 

people similar to the public housing or Section 8 voucher program. 

In the mid 1980’s, some owners began paying off these HUD-insured loans which released them from the obligation to provide affordable housing. One of the first prepayments in the country occurred in Dallas, Texas, where the apartments were demolished 

and replaced with a 17-screen theater. At that time, there was no 

Federal program designed to keep the properties affordable and no 

protection at all for the residents. 

I’m going to skip a whole lot because of the 4 minutes. The Texas 

Tenants’ Union participates in the Preservation Working Group, 

which has a number of recommendations: 

Provide adequate appropriations to renew Section 8 contracts. 

HUD’s failure to request appropriate appropriations is a huge 

threat to the success of preserving this housing. It is essential for 

Congress to fix this problem very soon. TTU is working with a 

property in South Texas now that is likely the casualty of this fiasco. 

Strengthen the mark-to-market program. Mark-to-market has 

generally been an effective tool for preserving and improving Section 8 housing; 134 properties in Texas are involved in this program, including nine in Houston. At least two dozen Houston properties could still benefit from mark-to-market restructuring in the 

reforms pending in H.R. 3965. 

Amend H.R. 3965 to direct HUD to fund the technical assistance 

programs to tenants. Expiring subsidies can have a drastic impact 

on residents. And tenants can play a critical role in determining 

the outcome of these properties. Please include the amendment 

that was submitted in the National Alliance of HUD Tenants testimony on mark-to-market last week. 

Enact a Federal first right of purchase. This could be a very useful tool in getting at-risk properties under new ownership willing 

to keep the subsidies in place. 

Ensure vouchers are provided for all families and units when 

properties are not preserved. Too many low-income families have 

fallen through the cracks as subsidized properties convert to market-rate housing. 

33

Empower tenants to enforce their rights when HUD enforcement 

is lacking. 

Provide HUD with the direction to save troubled properties and 

other at-risk housing through the enactment of H.R. 44. Our written testimony elaborates on the recommendations. Thank you for 

giving me the opportunity to testify on these issues. 

[The prepared statement of Ms. Junor can be found on page 93 

of the appendix.] 

Chairwoman WATERS. Thank you so much, Ms. Junor. 

Ms. McElroy, thank you for being here. We are very much aware 

of the work of ACORN all over the country. You made your presence known in Washington. 

STATEMENT OF TONI McELROY, PRESIDENT, TEXAS ACORN 

Ms. MCELROY. Okay. Thank you, Chairwoman Waters, Congressman Green, and Congresswoman Jackson Lee. Thank you. I’m glad 

to have the opportunity to testify today about the affordable housing needs of low-income residents in the City of Houston. I’d just 

like to skim over some of the challenges of affordable housing 

needs in this City as well as the challenges of low-income families 

to achieve and maintain homeownership, the lack of protection for 

renters, the remaining long-term housing needs of Katrina survivors which has been documented today, and finally some recommendations to enhance the availability of affordable housing. 

There’s a shortage of affordable housing construction within the 

City. The developers are building affordable housing, but it’s outside of the City limits. Many times they are putting minority residents, outside of the City of Houston where there’s no public transportation, where there’s no healthcare facilities, where there are 

few, if any, job centers. So our neighborhoods are being gentrified. 

And the infrastructure is being improved, but the traditional residents are gone, so we don’t benefit from that at all. 

Third Ward is an example of such a community. Let me talk a 

little bit about our predatory lending and housing campaign. We 

have issued a report called ‘‘Foreclosure Exposure’’ which examines 

the Home Mortgage Disclosure Act data and talks about what’s 

happening right here in Houston. African-Americans were issued 

26 percent of all the high-cost home purchase loans in Houston in 

2006, but only 6.7 percent of the prime home purchase loans. 

Latinos were issued 32.8 percent of those same high-cost loans 

originated here in Houston and 20 percent of the prime loans, 

which is greater than their—which is really out of whack. In contrast, Whites received 52.5 percent of the prime loans originated in 

Houston, 52.5, which is greater than their 30 percent share of the 

high-cost loans originated here. 

African-Americans represent 16.6 of the population in the metropolitan area, but they’re getting a great number of the high-cost 

loans. Latinos in the Houston area represent about 28.7 percent of 

the population. So the home loans, the mortgages that are being 

written are really bad predatory loans, and they’re affecting minority buyers out of proportion of their population in Houston. Immigrant families are falling victims to a number of scams which we 

have worked on, including the contract for deeds. 

34

Also, it has been mentioned about the home repair program. 

ACORN members, along with Members of Congress, Congresswoman Jackson Lee have fought tooth and nail. We went to the 

City, we went to HUD, and there’s still not enough money for senior home repairs. There has been a lot of improvement under 

Mayor White, but we need more dollars, especially Federal dollars, 

to get into the program to help seniors who are literally dying before their repairs can be made. So we’re encouraged by the improvements, but we know that there is a need for more. 

There are few protections absolutely for renters, because Houston, as been alluded to, has such a high number of renters for a 

city this size. For a major city, most of the folks are renters. And 

there is no protection. ACORN members in other areas have gotten 

legislation, such as having landlords being licensed and being fined 

for not keeping up their properties. Something of that nature is 

needed right here, right now. 

And, of course, the housing needs for Katrina survivors, the rise 

in foreclosures, ACORN is—along with its sister organization, 

ACORN Housing, has been meeting with banks, mortgage companies, and services to try and get some relief for the almost 2 million 

families that could lose their home in foreclosure in the next few 

years. So we’d like to see a number of things happen, one of which 

is that the State of Texas should enhance enforcement and oversight of landlords, of which we have none now. 

[The prepared statement of Ms. McElroy can be found on page 

104 of the appendix.] 

Chairwoman WATERS. Thank you very much, Ms. McElroy. 

We are going to have to move to Mr. Bustamante now. Thank 

you. 

STATEMENT OF DANIEL BUSTAMANTE, EXECUTIVE 

DIRECTOR, GREATER HOUSTON FAIR HOUSING CENTER 

Thank you. Good morning to the honorable members of the subcommittee. My name is Daniel Bustamante, and I’m the executive 

director of the Greater Houston Fair Housing Center. 

I’m here today to testify before you about the fair housing needs 

and the state of fair housing in Houston, Texas. After hearing testimony today, all I have to say is that housing discrimination is alive 

and well in our City. It is a daily occurrence in the lives of thousands of families and children, Blacks, disabled individuals, 

Latinos, and other protected class members. 

Since the passage of the Federal Fair Housing Act in 1968, and 

its amendment in 1988, the issue of housing discrimination has 

continued to be prominent in the development of the City of Houston. Studies and surveys have consistently shown that housing discrimination against African-Americans and Hispanics continues 

unabated in our region. The influx of Hurricane Katrina evacuees 

exacerbated this historical housing discrimination problem and has 

been documented through testing. 

The area’s demographics include an ever-growing immigrant population, with limited English proficiency, who are victimized daily 

by unscrupulous housing providers. The disabled in our region are 

in constant need of fair housing enforcement services, such as reaVerDate 0ct 09 2002 17:26 Jan 29, 2008 Jkt 039914 PO 00000 Frm 00040 Fmt 6633 Sfmt 6633 K:\DOCS\39914.TXT HFIN PsN: TERRIE
35

sonable accommodations and modifications to ensure their rights to 

barrier-free living. 

Houston is the largest city in the south as well as the fourth 

largest city in the country. The use of racially restricted covenants 

to maintain segregated communities is not very far removed. The 

1968 Civil Rights Act through the Fair Housing Act made housing 

discrimination practices illegal and created the protected classes 

that exist today. In spite of these laws, housing discrimination has 

continued throughout America and still occurs on a daily basis in 

the Houston area. 

In general, people move into better housing situations so they 

can improve their quality of life. The ability to access quality housing will impact access to quality education, employment opportunities, retail establishments, parks, churches, and other public services. Most people are totally unaware of their fair housing rights. 

Discriminatory practices in housing can be quite subtle and are unlikely to be detected by victims. 

The United States Census clearly shows segregation and the 

changing patterns in the ethnic and racial composition of Greater 

Houston’s neighborhoods. Over the last 30 years, the primarily 

White communities have developed in areas towards the outskirts 

of the City of Houston and in the surrounding counties. In recent 

years, many of the historically minority low rent communities in 

the inner city have been redeveloped into high-rent mostly white 

communities. 

The metropolitan Houston area includes a large region with multiple counties, and the further away you get from the City of Houston into the surrounding counties, the less colored the community 

becomes and the more White it is. The City of Houston, for example, is a majority-minority community, but if you take the population surrounding Houston, it is primarily White. And what has 

been happening, and this has been documented by studies all the 

way from Harvard and a lot of other prominent universities that 

are quoted in my documents, Houston is still a segregated community. We have desegregated, but we have not really paid attention 

to what’s going on in our community with discrimination. 

The 2007 Fair Housing Trends by the National Fair Housing Alliance indicates that the incidence of discrimination against African-Americans, Latinos, and Asian-Americans continues unabated. 

In Houston, the Housing Discrimination Study in the year 2000, 

which was conducted by HUD, found that African-Americans and 

Latinos were discriminated against 25 percent of the time when 

they went to rent homes and 19 percent of the time when they 

went to purchase them. These statistics continue to be very real. 

Our agency did a rental audit in 2001, and through testing, we 

found the following: 85 percent of families with children were discriminated against when they sought to rent; 80 percent of AfricanAmericans were discriminated against when they sought to rent; 

and 65 percent of Hispanics were discriminated against when they 

sought to rent. These are very real figures that we have documented through independent testing that we have done. 

These figures continue to trouble us because we understand that 

people move for the right reasons. The disabled in our community, 

for instance, are being forced to file complaints, Federal complaints, 

36

to get such basic needs as accommodations and modifications for 

their living situation because of landlords’ inability to comply with 

the law. 

Our City is experiencing a tremendous growth right now. Over 

29 percent of our City is foreign born. 47 percent of the population 

over 5 years old speak a language other than English. This community is bringing new dynamics to our City, and they’re very much 

being targeted by unscrupulous landlords. Families with children, 

for instance, represent a significant part of this tremendous 

growth. Single-parent families and two-parent homes with several 

children are very common in the City. Many families are denied 

their fair housing right when they seek to improve housing. Children are constantly made to suffer policies by landlords who don’t 

tolerate children. They frequently take advantage of families 

through penalties and fines when they’re trying to get them to 

move to larger units. I do want to address this panel about the 

Housing Fairness Act of 2007. 

[The prepared statement of Mr. Bustamante can be found on 

page 44 of the appendix.] 

Chairwoman WATERS. We are going to have to move on to Mr. 

Quan. I’m so sorry. We’re going to have to limit our time. Thank 

you very much. 

STATEMENT OF GORDON QUAN, FOUNDING PARTNER, QUAN, 

BURDETTE AND PEREZ, ON BEHALF OF THE NATIONAL COALITION FOR ASIAN PACIFIC AMERICAN COMMUNITY DEVELOPMENT 

Mr. QUAN. Thank you, Chairwoman Waters, Congresswoman 

Jackson Lee, and Congressman Green. My name is Gordon Quan, 

and I am here representing the National Coalition of Asian Pacific 

Community Development, as well as the Asian Chamber of Commerce, our largest Asian business group in the Houston area. You 

have copies of my testimony, so I’ll go straight to the items that 

have not possibly been covered. 

Houston, as you see, has a very unique situation. You asked the 

question, Ms. Waters, as to what areas are in greatest need. And 

the mayor has designated seven areas of development that we need 

to be looking at. We have this mixed blessing of tax-delinquent 

properties that we can redevelop into affordable housing in the future. What I propose is greater cooperation between government 

agencies, both Federal, State, and local, to earmark funds to these 

different areas, and also a public-private partnership that looks at 

working with CDCs and developers. As has been said by the panel 

previously, this City has been long an area for private development, where developers have really taken a major role in the City. 

Unleash that power. Work with nonprofits and see how we can develop communities, not just low income but multi—mixed income 

communities where we have middle income and higher income 

homes. We don’t want to stigmatize areas of the City as ghettos. 

In 10 years, nobody will want to live in those areas, and we’ve 

wasted our time. So how do we look at developing long-term neighborhoods that will have a lasting effect. 

Another thing you talked about was homelessness. In our City, 

we did a poll to indicate that 12- to 14,000 individuals every night 

37

are homeless. What we have found is that 35 percent of those individuals have mental or physical ailments that do not allow them 

to live independently in our City, and 55 percent need a structured 

environment where they can receive the counseling that they need 

to get back on their feet, so it is only 10 percent that are left in 

shelters. So while we’re looking at sheltering, we’re not looking at 

the long-term benefits. How do we get these people off this treadmill, not just a bandage approach? Permanent housing is the answer. Unfortunately, we have been producing very few permanent 

housing units. 

Mr. Celli talked about this one project, 175 units. That’s great. 

But we need 7,000 units if we’re really going to address our needs. 

So we’re talking about project-based tax credits. We talked about 

housing vouchers. Those are things that we need because, otherwise, these projects are not feasible because there’s very low income, so no bank will finance these projects. 

We also need to be building capacity. There are only two organizations in Houston that really develop SROs, the Housing Corporation of Houston and the New Hope Housing. We need at least five 

or six of these corporations. We need to have more people who 

know how to do that. Catholic Charities, the women’s—so many 

groups would like to do it, and they don’t know how. We need to 

instruct them. 

Education is the third point I want to reach, because I know I’m 

running out of time. As mentioned by Mr. Bustamante, we have a 

changing demographic in Houston, and many new immigrants 

don’t know about homeownership. I know there are programs that 

have been raised up, but I look at the Vietnamese community 

where we have had condominiums that have been foreclosed upon 

because people didn’t know their obligations to maintain within 

that common structure. We’ve had, as Ms. McElroy talked about, 

deed—contract for deed. So many immigrants are coming who don’t 

know how to purchase homes in our community, not to mention 

subprime lending, which we all know about, and first-time homebuyer programs, which many people don’t know about. 

Finally, I’d like to just hit upon the Fair Housing Act. One of 

things we’re trying to develop in this community is senior housing 

specifically geared towards certain communities where there are 

special needs, such as the Vietnamese community. We’re going to 

be having a ground breaking this afternoon for the Golden Bamboo 

Village, which will work with the Vietnamese community. But we 

want to make sure the Fair Housing Act does not inadvertently 

discriminate against organizations that seek to meet special needs 

groups that are not otherwise being enforced. So I thank you for 

this time, but I know my time is up. I’m available to answer any 

questions you have. Thank you. 

Chairwoman WATERS. Thank you very much. 

A big round of applause for this panel. I’m going to kind of forego 

what would be our traditional questions to say, we get it. We get 

it. We understand. And all that has been mentioned from this 

panel about funding, adequate funding for housing survivors, and 

the extreme shortage of government-subsidized housing, the markto-market program we just heard, we’re going to insist that all of 

those owners of those buildings be paid and be paid on time, and 

38

that they be paid fair market value for the rents. And we’re working on that, including moneys to help, you know, fix up some of 

those places. 

For the predatory lending, we have a big bill that we are putting 

together. We know that there are people who should be given 

prime loans but have been forced into the subprime market. That 

market has collapsed because of all of the reasons, greed mostly, 

that have taken place out there. And we’re now focused on trying 

to save some of these homes from foreclosure. Housing discrimination is one of the shames of this country, and we have to continue 

to work on it. I’m so pleased that Mr. Green has presented us with 

legislation to deal with housing discrimination in America and fair 

housing. We understand what is going on. You have adequately described the gentrification that is going on, and you are absolutely 

right. The need for 7,000 units—I’m absolutely shocked at the fact 

that there are only 4,000 public housing units here. I hear what 

you’re saying about the seven areas that have been identified, the 

tax delinquent properties. 

And I want to thank you all for reinforcing what we’ve already 

come to understand, but we came here to have you document what 

is going on at the invitation of Mr. Green. I will yield time to Mr. 

Green and ask him to keep his comments and his questions to a 

minimum so that we can get out on time. Thank you very much. 

Mr. GREEN. Thank you. I will be brief, but I do want to thank 

you, Mr. Bustamante. In your testimony, you mentioned the Housing Fairness Act of 2007. And just for edification purposes, friends, 

we can end discrimination in housing in this country. We really 

can. We can. The most efficacious tool that we have available to us 

is something known as testing. Testing works. When we can send 

our persons equally qualified of different ethnicities or different 

stations in life, we can find out who is performing this dastardly 

kind of behavior, and we can catch them. We can catch them. But 

it takes not only an act of Congress to do this; it takes a Congress 

willing to act. That is what it takes. 

And I assure you that this committee chaired by Congresswoman 

Waters is willing to act. I have been very grateful and benefited 

from her help with this Housing Fairness Act. I just want to tell 

you that in that Act, we have $20 million annually from HUD—

for HUD to administer nationwide testing. We also have in that 

Act a requirement that HUD presents a report to Congress on testing every 2 years—every 2 years—so that we can track what’s happening as a result of what we are doing. And we have other means 

by which NGOs can get involved, and the NGOs can go out and do 

the testing and bring lawsuits. The NGOs can test and also litigate 

to make sure that, when we catch them, we can punish them. That 

must happen. 

And finally, to Ms. McElroy from ACORN. You mentioned contracts for deed. Let me just share this with you. Some of them are 

contracts for misdeeds. Many people find themselves having made 

a long history of payments only to have what they thought would 

be their home taken from them when they’re right near the point 

where they can purchase. So I share your concern, and I assure you 

that is something that I will be working with you and others on 

in the Congress of the United States to see if we can make some 

39

corrections. I want to only echo what the Congresswoman had said, 

‘‘From time to time it’s good to say amen.’’ This is one of those days 

when we should say, ‘‘A woman, a woman, a woman.’’ Thank you. 

Chairwoman WATERS. Thank you very much. Now Ms. Jackson 

Lee. 

Ms. JACKSON LEE. Madam Chairwoman, let me thank you and 

Congressman Green. And let me—because of the great panel—Mr. 

Henneberger, Mr. Muhammad, Ms. Junor, Ms. McElroy, Mr. 

Bustamante, and Mr. Quan, and I know Mr. Lopez was detained—

let me champion and thank Congresswoman Waters for recognizing 

that we live in a diverse America. All of the amendments that have 

been discriminatory relating to housing and immigrants have been 

fought back by this chairwoman. And we have joined her with 

Chairman Frank and Congressman Green, and we will continue to 

do that. 

Let me quickly do a few thank you’s, and acknowledge the presence of Mr. Love of the Coalition of the Homeless. I hope he has 

been inspired today. I would also like to thank, in his absence, 

Chad Bogany and Gerald Womack. Both of them are leaders in the 

real estate area and they have fought these issues of discriminatory housing. And we thank them. I want to acknowledge Gladys 

House as well and just put on the record in particular that the 

Gregory School received HUD-earmarked dollars and the project is 

yet to be finished. We recognize that. 

Let me quickly just say not only do we get it, Ms. McElroy and 

ACORN, I can’t thank you enough. We’re going to reignite the battle on senior housing, particularly on the reverse mortgages that 

Congressman Green—we’ll all be working, but also on the senior 

repair, which does not make sense. I want to make sure that we 

reignite that fight. And I do want to put into the record that we—

Mr. Henneberger, if you would share with us additional legislative 

fixes to help us, if you will—and I’m going to get you to put it in 

the record, but to help us overcome what has happened to Houston 

where they only have 4,000 public housing units when they should 

have more. I know that you can think about it collectively. 

And then would you also note that we—your point about segregated housing. What we want to do, and I think what we heard, 

people think the Third Ward is segregated, or the Fifth Ward. But 

we want to come out and fix it up. We don’t mind our seniors and 

low incomes coming in, but let’s have them have beautiful properties. Let’s get ACTION CDC to take up this project that HUD 

has said where they can joint venture on the Section 8. Let’s let 

the CDCs build these facilities for Section 8. I’d like to develop it, 

but let’s get the CDCs to do it. 

I close, Madam Chairwoman with this: We are champions of 

what our cities do. All we do is take back the message of our cities. 

And so when you hear the term Houston HOPE, we champion it. 

We think, in fact, that we have a wonderful effort because it has 

Houston HOPE. But I want to put into the record, Edith Salaville, 

87 years old, at Weinburg & Delanore on the front page of The 

Houston Chronicle. Her inherited property by a historic civil rights 

leader in our community and she, I think was a granddaughter, fell 

behind in property taxes after she lost her senior exemption. 

40

She was foreclosed on, an 87-year-old woman who lived in this 

property under the pretense we can get these houses and put them 

in Houston HOPE. We must have restraint and oversight federally 

of a program that builds itself on foreclosures which might catch 

up the elderly and the disabled. We want Houston HOPE, but we 

want it to work in a nondiscriminatory fashion. 

And so I am grateful for the presence of all of you here today. 

And, again, I thank you, Madam Chairwoman, and Congressman 

Green. I thank you for allowing me to participate in this outstanding hearing. With that, I yield back. 

Chairwoman WATERS. Thank you very much. I’d like to thank 

both Congressman Green and Congresswoman Jackson Lee for 

their great advocacy and the time and attention that they put into 

their work in Washington, D.C. I know there are days when many 

of you have felt that there’s no help coming, that Washington is not 

doing what it should do. But I want to tell you that we do have 

the gavel now, and it is going to make a difference. We are going 

to use our power to correct some of these ills that have existed for 

far too long. Again, I’m so pleased that Al Green is on that committee doing such a great job. He is a workhorse. He has a fabulous 

work ethic. And so I’m delighted to be here. The Chair notes that 

some members may have additional questions for this panel which 

they may wish to submit in writing. And without objection, the 

hearing record will remain open for 30 days for members to submit 

written questions to these witnesses and to place their responses 

in the record. I understand that there are some other things that 

should be submitted for the record, and without objection, Mr. 

Green first. 

Mr. GREEN. We have these photographs, and I would ask that 

the parties submitting the photographs give us a narrative that 

will be placed in the record as well, if there are no objections. 

Chairwoman WATERS. Yes. And also do you have any other documents to submit, Ms. Lee? 

Ms. JACKSON LEE. Yes, Madam Chairwoman. I’ll read it because 

I have written on it. Just simply to announce again, the Harris 

County Housing Authority that developed the disaster housing 

process that may become a national model for disaster housing assistance. And if there is anyone from Harris County Housing, just 

raise their hand. I’m just putting that statement in the record. 

Thank you very much. 

Chairwoman WATERS. Thank you very much. And I would also 

like to submit for the record the written statements of the Houston 

Center For Independent Living and historic Freedman’s Town and 

Allen Parkway Village as well as that of Mr. Malaika Adan will be 

made part of the record. And if the young lady in the back who 

submitted these being would raise her hand—oh, I’m sorry—in the 

front, will raise your hand, and make sure we get a narrative to 

go along with those pictures so that we can put that in the record 

and have an opportunity to address what you brought to our attention, I would appreciate it very much.

41

I’d like to thank all of you for being here. This is a fantastic turnout for rather short notice to be here today. And we really do appreciate it. You bring to us the support that we need to be able to 

move forward. This hearing is adjourned. Thank you very much. 

[Whereupon, the hearing was adjourned.] 

(43)

A P P E N D I X

October 29, 2007

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