EMERGENCY CDBG FUNDS IN THE 

GULF COAST: USES, CHALLENGES, 

AND LESSONS FOR THE FUTURE 

HEARING 

BEFORE THE

SUBCOMMITTEE ON 

HOUSING AND COMMUNITY OPPORTUNITY 

OF THE

COMMITTEE ON FINANCIAL SERVICES 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED TENTH CONGRESS 

SECOND SESSION 

MAY 8, 2008 

Printed for the use of the Committee on Financial Services 

Serial No. 110–110 

( 

EMERGENCY CDBG FUNDS IN THE GULF COAST: 

USES, CHALLENGES, AND LESSONS FOR THE FUTURE 

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43–696 PDF 2008

EMERGENCY CDBG FUNDS IN THE 

GULF COAST: USES, CHALLENGES, 

AND LESSONS FOR THE FUTURE 

HEARING 

BEFORE THE

SUBCOMMITTEE ON 

HOUSING AND COMMUNITY OPPORTUNITY 

OF THE

COMMITTEE ON FINANCIAL SERVICES 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED TENTH CONGRESS 

SECOND SESSION 

MAY 8, 2008 

Printed for the use of the Committee on Financial Services 

Serial No. 110–110 

( 

(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 

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 

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 

BILL FOSTER, Illinois 

ANDRE ́ CARSON, Indiana 

SPENCER BACHUS, Alabama 

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 

DEAN HELLER, Nevada 

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 

STEPHEN F. LYNCH, Massachusetts 

EMANUEL CLEAVER, Missouri 

AL GREEN, Texas 

WM. LACY CLAY, Missouri 

CAROLYN B. MALONEY, New York 

GWEN MOORE, Wisconsin, 

KEITH ELLISON, Minnesota 

CHARLES A. WILSON, Ohio 

CHRISTOPHER S. MURPHY, Connecticut 

JOE DONNELLY, Indiana 

SHELLEY MOORE CAPITO, West Virginia 

STEVAN PEARCE, New Mexico 

PETER T. KING, New York 

JUDY BIGGERT, Illinois 

CHRISTOPHER SHAYS, Connecticut 

GARY G. MILLER, California 

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: 

May 8, 2008 ....................................................................................................... 1 

Appendix: 

May 8, 2008 ....................................................................................................... 49 

WITNESSES 

THURSDAY, MAY 8, 2008 

Baab, Craig H., Katrina Advocacy Fellow, Alabama Appleseed Center for 

Law & Justice, Inc. .............................................................................................. 32 

Bowman, David J., Director, Research and Special Projects, Louisiana Recovery Authority ........................................................................................................ 9 

Dally, William C., Deputy Executive Director, Texas Department of Housing 

and Community Affairs (TDHCA) ...................................................................... 13 

Gimont, Stanley, Acting Director, Office of Block Grant Assistance, U.S. Department of Housing and Urban Development .................................................. 4 

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

Service ................................................................................................................... 41 

Johnson, Bill, Director, Alabama Department of Economic and Community 

Affairs .................................................................................................................... 6 

Johnson, Derrick, President, Mississippi State NAACP ...................................... 37 

Morse, Reilly, Senior Attorney, Katrina Recovery Office, Mississippi Center 

for Justice ............................................................................................................. 39 

Norris, Jack, Executive Director, Governor’s Office of Recovery and Renewal, 

State of Mississippi .............................................................................................. 11 

Perry, James, Executive Director, Greater New Orleans Fair Housing Action 

Center, and President, Louisiana Housing Alliance ......................................... 36 

Powell, Leslie L., Senior Attorney, Legal Services of North Florida, Inc. .......... 34 

Stafford, Gail D., Administrator, Community Development Block Grant 

Funds, Florida Department of Community Affairs ........................................... 7 

APPENDIX 

Prepared statements: 

Waters, Hon. Maxine ........................................................................................ 50 

Baab, Craig H. .................................................................................................. 56 

Bowman, David J. ............................................................................................ 64 

Dally, William C. .............................................................................................. 72 

Gimont, Stanley ................................................................................................ 83 

Henneberger, John ........................................................................................... 92 

Johnson, Bill ..................................................................................................... 138 

Johnson, Derrick ............................................................................................... 148 

Morse, Reilly ..................................................................................................... 153 

Norris, Jack ....................................................................................................... 218 

Perry, James ..................................................................................................... 235 

Powell, Leslie N. ............................................................................................... 244 

Stafford, Gail D. ................................................................................................ 250 

ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD

Waters, Hon. Maxine: 

Statement of the Equity & Inclusion Campaign ............................................ 257 

Responses to questions submitted to David J. Bowman ............................... 262 

Page

VI 

Waters, Hon. Maxine—Continued 

Responses to questions and supplemental information from Jack Norris 

regarding the Port of Gulfport ..................................................................... 269 

Additional responses to questions submitted to Jack Norris ........................ 318 

Green, Hon. Al: 

Responses to questions submitted to Jack Norris ......................................... 326 

(1) 

EMERGENCY CDBG FUNDS IN THE 

GULF COAST: USES, CHALLENGES, 

AND LESSONS FOR THE FUTURE 

Thursday, May 08, 2008 

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 12:30 p.m., in room 

2128, Rayburn House Office Building, Hon. Maxine Waters [chairwoman of the subcommittee] presiding. 

Members present: Representatives Waters, Cleaver, Green; 

Capito and Bachus. 

Chairwoman WATERS. This hearing of the Subcommittee on 

Housing and Community Opportunity will come to order. 

Before we go any further, I would like to thank you all for the 

long wait. Unfortunately, we were on the Floor finishing up legislation from last night—very important legislation—that will send 

about $15 billion to our cities and our counties to stabilize neighborhoods, to be used to buy up foreclosed property causing so much 

devastation in so many parts of our country; housing that has been 

vandalized, copper being stripped out, the weeds growing up and 

causing the value of other homes where people are trying to remain 

in those neighborhoods to go down. So we have been struggling 

with trying to come up with a package of legislation, and this is 

kind of the first of the direct aid to the cities and the counties and 

the States. 

We will have some more on the Floor today, but we had to finish 

it and we had to wrestle with friends from the opposite side of the 

aisle on a few of the issues. So, I know you have waited for a long 

time. I appreciate it and we will get started, even though the other 

members have not arrived. We won’t wait for them. I want to get 

started so that we can allow you to be released and go about your 

business. 

As a national advocate for the Gulf Coast, I was quick to push 

for emergency appropriations to help the States affected by Hurricanes Katrina, Rita, and Wilma to recover from the devastation 

caused by those storms. The 2005 hurricanes were the deadliest 

and most expensive storms on record. Over one million housing 

units were damaged along the Gulf Coast as a result of the hurricanes in 2005. But half of the damaged units in Louisiana, which 

bore the brunt of Hurricane Katrina—total catastrophic losses from 

2 

Hurricane Katrina were estimated at $40.6 billion with uninsured 

losses much higher. 

Although the Federal Government has provided $123 billion for 

hurricane relief, $19.7 billion of this amount was provided through 

the Community Development Block Grant, or CDBG, program. 

Congress has historically appropriated supplemental CDBG funds 

to respond to natural disasters such as hurricanes, earthquakes, 

and tornados. 

In addition, CDBG funds supported recovery efforts in New York 

City following the terrorist attacks of September 11, 2001, in Oklahoma City following the bombing of the Alfred Murrah Building in 

1995, and in the City and County of Los Angeles following the riots 

of 1992. However, the severity of the damage inflicted by the 2005 

hurricanes and the slow responses of some of the States to get 

these funds out of the door has put the program into question. 

I have several concerns about how the CDBG programs have 

been administered and implemented. First, I’m concerned about 

how States in the Gulf Coast has used CDBG funds to replace or 

repair damaged rental properties. Many of the programs implemented to-date focus heavily on assistance to homeowners. While 

I agree that homeowners who have felt the impact of these storms 

should receive compensation, I do not agree that these funds 

should be used to help homeowners solely, at the expense of renters. 

Furthermore, in areas where States have tried to rebuild rental 

housing, I am alarmed by the reaction of some communities to having this much-needed housing resource in their communities. I am 

eager to hear from our witnesses about the extent to which the 

‘‘Not in my Backyard’’ (NIMBY) effect is hampering their ability to 

provide affordable rental housing through the CDBG funds. 

Second, adherence to fair housing laws and the requirement that 

States affirmatively further fair housing is of vital importance. We 

will hear a lot about CDBG waivers today and there may be some 

discussion about what Congress’s intent was in allowing HUD to 

grant waivers of some CDBG program requirements; however, 

there can be no doubt that Congress never intended for HUD to 

waive fair housing laws. Although no State has requested such a 

waiver, and HUD is prohibited from issuing such a waiver, I remain concerned about how some of the programs being implemented are affirmatively furthering fair housing. 

Given the focus of these programs on owner-occupied housing, 

and the fact that most rental housing is occupied by people of color, 

I have questions about whether or not these programs do affirmatively further fair housing. 

Third, I am concerned about complaints that States have been 

slow in getting the money out and in constructing or repairing 

housing. I am interested to know what is causing these delays, 

such as the environmental review process or NIMBYism, and what 

we can do to make sure that almost 3 years after Katrina, we are 

giving the States the tools that they need to make sure they are 

getting funds out the door quickly and efficiently. 

Fourth, as I mentioned earlier, I am concerned about HUD’s 

process for providing waivers, including waivers as a requirement 

3 

that at least 50 percent of grant funds benefit low- and moderateincome households. So far, HUD has granted four such waivers. 

Although I must commend the Department for repeatedly denying Mississippi’s request to receive a blanket waiver of the low- to 

moderate-income requirement in its entirety, I am concerned that 

as a result of these waivers, some of the State CDBG programs are 

not as targeted to low-income families as they should be. After all, 

the CDBG program is at its root a program designed to help alleviate poverty. 

Finally, I am concerned about the diversion of CDBG housing 

funds for other purposes. The State of Mississippi has made headlines for its plans to divert $600 million from its Phase I Homeowner Grant Assistance Program to the restoration and expansion 

of the Port of Gulfport. Frankly, I am not convinced that the State 

has met all of its unmet housing needs. I am very interested in 

hearing from my witnesses from Mississippi on this issue. 

On another note, I am also interested in hearing the views of 

these witnesses on the difficulty of Mississippi homeowners who 

have received Phase I assistance and are encountering problems in 

obtaining flood assistance. 

I am looking forward to hearing from our two panels of witnesses 

on the uses and challenges of CDBG funds in the Gulf Coast, and 

I would now like to recognize my ranking member, but my ranking 

member has not come in yet, so we are going to proceed with Mr. 

Green, who is here for his opening statement. 

Mr. Green? 

Mr. GREEN. Thank you, Madam Chairwoman. And thank you for 

your leadership. Having gone to Louisiana with you 2 times, I am 

well aware of what you have done in the Gulf Coast area, and I 

know that you have been there on occasions when I did not have 

the privilege of being with you. I am also very much aware that 

when you were there, you took the time to listen to many of the 

residents and acquire intelligence as to what their concerns are, 

and I see this as a continuation of the leadership that you have 

shown. Again, I thank you very much for what you have done to 

help the people of Louisiana. 

I have several reasons for saying this. One is that as a Member 

of Congress representing the 9th Congressional District in Houston, Texas, many of the persons who were survivors of Katrina 

have moved into my District into Houston, Texas, and they still 

have needs that have to be met. Aside from that, I was born in 

New Orleans, Louisiana, in Cherokee Hospital, which does not 

exist currently. 

Hopefully, that circumstance won’t always be the case. So I have 

many reasons for being concerned and I am honored to be apart of 

this hearing. I do have another hearing that is taking place as I 

am speaking to you now. I try not to miss any hearings, so I have 

a whole security hearing and I will be moving back and forth between the two. But before I make an exit, I do want to talk about 

what the chairwoman has mentioned—this notion of taking the 

funds to be used for people who were victims of the hurricane and 

using these funds with the Port. 

That does cause me a great deal of consternation, especially 

when we have persons who are still in need. And I am looking for 

4 

empirical evidence of what I say, but I am told there are persons 

who are still in need, and it would cause me even greater consternation to know that when people needed this money, it went 

to the Port. I believe ports ought to be supported, and I would work 

to help the Port, but I would not want to divert money from needy 

people to the Port when the Port has its own means by which it 

can receive the proper attention that it merits. 

I think that they can both merit a certain amount of attention, 

the people, as well as the Port, but I don’t want to put the Port 

above the people. I want the people to have what is due to them, 

and I want to assist with the Port, so I am anxious to hear from 

witnesses who will hopefully give us some additional intelligence 

on what actually occurred. Madam Chairwoman, I thank you for 

the time, and I yield back. 

Chairwoman WATERS. Thank you, Mr. Green. I know that you 

and other members are between committees, so I appreciate your 

giving us some time here. 

I am going to move right into introducing our witnesses: Mr. 

Stanley Gimont, Acting Director, Block Grant Programs, U.S. Department of Housing and Urban Development; Mr. Bill Johnson, director of the Alabama Department of Economic and Community Affairs; Ms. Gail Stafford, administrator of Community Development 

Block Grant Funds, Florida Department of Community Affairs; Mr. 

David Bowman, director of research and special projects at the 

Louisiana Recovery Authority; Mr. Jack Norris, director, Governor’s Office of Recovery and Renewal, State of Mississippi; and 

Mr. William Dally, deputy executive director, Texas Department of 

Housing and Community Affairs. 

I thank all of you for appearing before the subcommittee today, 

and without objection, your written statements will be made a part 

of the record. 

You will now be recognized for a 5-minute summary in the order 

that I have introduced you. 

Thank you very much. We will start with you, Mr. Gimont. 

STATEMENT OF STANLEY GIMONT, ACTING DIRECTOR, OFFICE OF BLOCK GRANT ASSISTANCE, U.S. DEPARTMENT OF 

HOUSING AND URBAN DEVELOPMENT 

Mr. GIMONT. Thank you. 

On behalf of Deputy Secretary Roy Bernardi, thank you, Chairwoman Waters, for the invitation to appear before the subcommittee today. 

I am Stanley Gimont, Acting Director of the Office of Block 

Grant Assistance at HUD, and I appreciate the opportunity to discuss disaster recovery through the Community Development Block 

Grant Program. 

Three supplemental appropriations providing $19.7 billion in 

CDBG funding for the Gulf Coast disaster recovery purposes have 

been enacted since Hurricane Katrina made landfall on August 29, 

2005. These funds have been granted to the States of Alabama, 

Florida, Louisiana, Mississippi, and Texas. The first supplemental 

provided $11.5 billion in CDBG disaster recovery funding and was 

signed into law on December 30, 2005. The Department promptly 

5 

allocated these funds based on the areas of highest need, and with 

the greatest concentration of destruction. 

In June 2006, the second supplemental provided an additional 

$5.2 billion, while the third supplemental was signed in November 

of 2007 and appropriated $3 billion to close the funding gap. The 

States have proposed to dedicate $13.8 million to various housing 

programs; this allocation represents 70 percent of the amounts appropriated. 

In the 28 months since the first supplemental appropriation, the 

States have expended over $9.2 billion in CDBG funds for recovery 

activities with $8.2 billion of this amount disbursed for housing assistance activities. Thus, approximately 90 percent of all funds expended to-date have been for housing activities. The first two supplemental appropriations were clear in their intent and extraordinary in the flexibility they conferred on the States. 

Traditionally, such supplemental funding requires substantial 

oversight by the Department on program issues, but Congress 

clearly intended that HUD should not dictate uses of funds or the 

amounts to be set aside for each activity unless otherwise specified 

by Congress. The first supplemental stated that HUD must waive 

all regulations or statutes which could hinder implementation of 

the States’ plans. Only four areas were exempt from this mandate: 

fair housing; environmental review; civil rights; and labor standards. 

The second supplemental bill modified the direction on waivers 

to state that HUD may approve waivers. As Congress intended, the 

eligible States have had substantial flexibility in designing their 

programs, establishing funding levels, and carrying out activities to 

achieve their goals within the overall purposes of the legislation. 

This approach has allowed each State to tailor its recovery programs to best address the needs of its citizens. HUD’s primary role 

has been to provide technical assistance on Federal program requirements and to monitor the State’s use of funds. 

HUD has implemented the grants with waivers and alternative 

requirements that balance flexibility, accountability, and performance. Quarterly performance reports are submitted not only to 

HUD but also to Congress, and they must post them on the Internet. The largest activities in CDBG history, the Louisiana and Mississippi Homeowner Compensation Programs, have had collectively 

more than 45 compliance or financial monitoring reviews from 

HUD, its Office of Inspector General, State auditors, internal auditors, independent auditors, and multiple anti-fraud investigators. 

So far, the news is encouraging as documented non-compliance appears to total less than one percent of funds expended to date, 

while fraud and abuse has been minimized thanks to the collective 

effort of Federal, State, and local officials. 

The mutual goal of HUD and the States has been to assist victims of the storms and to act efficiently to get funding into the 

hands of those who deserve it as quickly as possible. A continuous 

improvement process regularly evaluates obstacles and seeks both 

long- and short-term solutions. The States have the authority and 

the ability to revise funding levels in response to changes in need 

and opportunity. While not everyone agrees with every program 

6 

choice, HUD has found overall compliance with program and financial rules to be very good. 

Again, I appreciate the opportunity to appear before the subcommittee today, and I look forward to your questions. 

Thank you. 

[The prepared statement of Mr. Gimont can be found on page 83 

of the appendix.] 

Chairwoman WATERS. Thank you very much, Mr. Gimont. 

Now, we will hear from Mr. Johnson. 

STATEMENT OF BILL JOHNSON, DIRECTOR, ALABAMA 

DEPARTMENT OF ECONOMIC AND COMMUNITY AFFAIRS 

Mr. JOHNSON. Thank you, Chairwoman Waters, and members of 

the committee. 

I appreciate the opportunity to come before you today. I am Bill 

Johnson, the director for the Alabama Department of Economic and 

Community Affairs. We are a main State grant-making managing 

agency in the State of Alabama and oversee the supplemental 

Katrina CDBG funds, plus the regular block grant programs not 

going to entitlement communities. 

Before I get into what I am going to say, I would like to give you 

a little background on me that is not in my brief bio. Actually, unfortunately or fortunately, I have a lot of experience with hurricanes. My family was living in New Orleans on Laurel Street when 

Hurricane Betsy hit in 1965. I was 6 years old; and, as you can 

imagine, that is something that has a big impression on a young 

child. 

My dad, who was in the military at the time, was in Vietnam. 

When he came back, we were then stationed at Kiessler Air Force 

Base in Biloxi, and we were living there when Hurricane Camille 

hit. Then I was a student at Spring Hill College in Mobile, Alabama, in 1979 when Hurricane Frederick hit. So, I was trying to 

do my part for awhile by committing never to live on the Gulf 

Coast again and I moved my family to Prattville, Alabama, where 

we just had a tornado within a quarter mile of our house. 

So, I say that because I want the folks here and I want the folks 

in Alabama to know that I really do have compassion for the suffering and the devastation that these kinds of natural disasters can 

bring. And I have done everything with my office to try to accelerate the distribution of aid or to try to be creative where we could 

with the strings that the Federal Government has attached with 

the funding that we have to help folks. 

A little bit of a background on what we did after Katrina in anticipation of some help from the Federal Government with the disaster assistance; we partnered early on with FEMA who has a 

long-term recovery program. I thought it was such a great program 

that we actually housed their personnel at our agency and we set 

up a series of long-term recovery planning meetings with all the 

communities in Mobile County, which is our primary affected county. 

Over a series of about 4 months, we had planning meetings. We 

had meetings with engineers and each community formulated a 

long-term recovery plan and a lot of what we were trying to do 

with that planning was basically lower expectations, really drilled 

7 

down to what is it that was damaged, what do you hope to do, 

what can you build better? But keep it where it was within a reason for what they could expect help-wise. 

That process culminated in nine public hearings in the Mobile 

County area. Each entity that participated had their public hearing. We invited public input. At the end of that, within a week of 

the end of that, we had the announcement that help was going to 

be available. This planning, this prior planning, even without 

knowing funds for sure were coming, helped us accelerate our program to the point that when we knew funds were available, we had 

an application workshop, and an application deadline 6 weeks after 

that. 

We basically awarded all our funds for Katrina, the Katrina supplemental funds in the first round, by mid-June of 2006. Now I 

know that there are other States testifying here, and we had some 

challenges. I mean, we had a little bit of a different scenario in 

that our main city and county were entitlement areas who had 

been managing their own CBDG programs for decades and so we 

weren’t going to step in and say, ‘‘Oh, the State knows better.’’ So 

we distributed the funds out to the local areas, and they have been 

the primary ones on housing. 

I see I have about a minute left, and I would like to leave you 

all with this: In every disaster that I have experienced, I have seen 

the tremendous outpouring of support from the faith- and community-based organizations. They have been the primary redevelopment team in our area and I would say that as a recommendation 

for what we could do with block grant funds, if we could somehow 

support what the faith-based organizations are doing and rebuilding efforts, then that would go a long way towards applying a lot 

more resources that we have and also more efficiently use some 

limited resources from the Federal Government. 

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

138 of the appendix.] 

Chairwoman WATERS. Thank you. Thank you very much. 

Ms. Stafford? 

STATEMENT OF GAIL D. STAFFORD, ADMINISTRATOR, COMMUNITY DEVELOPMENT BLOCK GRANT FUNDS, FLORIDA DEPARTMENT OF COMMUNITY AFFAIRS 

Ms. STAFFORD. Good afternoon. Thank you, Madam Chairwoman, 

for allowing the State of Florida to be represented. 

My name is Gail Stafford and I am administrator of the Florida 

Small Cities CDBG Disaster Recovery Programs. Although our 

Agency head, Secretary Thomas Pelham, could not be here this 

morning, Florida CDBG’s Disaster Program’s success is due largely 

to the support of State government and local government input. 

The Secretary’s office and the Director of the Division of Housing 

Community Development, which oversees the CDBG State program, have been directly involved in all the disaster recovery efforts. 

Likewise, local governments are at the table when CDBG recovery plans are developed. Local governments, as well as 16 public 

housing authorities, were the recipients of Florida’s CDBG Supplemental Disaster Recovery funding. In 2004, the State of Florida 

8 

was battered by Tropical Storm Bonnie, as well as Hurricanes 

Charley, Frances, Jeanne, and Ivan. All 67 counties were impacted 

within a 2-month period, including the Gulf counties. 

Homes and infrastructure were damaged. Mobile home owners, 

especially those living in homes manufactured before 1994, suffered 

the most devastation; 55,670 pieces of plastic sheeting, along with 

481,513 tarps were immediately necessary, and thousands lost 

their homes completely. Governor Jeb Bush immediately appointed 

a hurricane housing work group. The housing data provided by the 

work group indicated that 708,361 housing units were actually destroyed and at least 10 hospitals sustained damage. 

Schools, nursing homes, and government buildings across the 

State were damaged. Other infrastructure damage was also very 

significant. A portion of the U.S. Interstate Highway 10 bridge collapsed, and numerous streets and roadways were damaged and destroyed. Our water and sewer systems failed and utility systems, 

both publicly and privately owned, were also damaged. At that time, the State targeted about $250 million in general 

revenue funds to address housing needs. However, those funds 

alone were not sufficient. Thankfully, Congress allocated just over 

$100 million in supplemental CDBG funds for disaster recovery efforts. Those funds were used for both housing and infrastructure 

recovery. Since infrastructure damage does directly affect people, 

we also made sure that infrastructure was a part of that process. 

Local governments determined the priority needs to be addressed 

in their community and then during 2005, we were hit by four 

more hurricanes in the State. 

In July, Hurricane Dennis struck the Panhandle, which was still 

recovering from the devastation that was caused by Ivan less than 

a year before. In August, Katrina hit just north of Miami, causing 

tornados and wind damage in Southeast Florida. In September, 

Rita passed just south of the Florida Keys, causing flooding damage and storm surge on that chain of islands. 

In October, Wilma struck the Southern peninsula of Florida, 

causing major damage in southwest Florida, the Florida Keys, and 

heavily populated counties in Southeast Florida. Hurricane Wilma 

caused the largest disruption in electrical service ever experienced 

in Florida, with as much as 98 percent of South Florida without 

power after landfall. By the end of the 2005 hurricane season, 39 

of the 67 counties had been declared a Federal disaster area. Housing-related damages from Hurricanes Katrina and Wilma were estimated at $1.5 billion, with more than 4,710 units impacted. 

More than 40,000 roofs were temporarily repaired during the 

storm by the Army Corps of Engineers from their Blue Roof Program, and more than 625,000 Floridians registered for FEMA assistance. Due to the quick action by Congress, Florida received 

$82.9 million in CDBG disaster recovery funds. Our State required 

that grant recipients utilize 70 percent of the funding for restoration of affordable housing. The remaining 30 percent would be used 

to address damage, infrastructure, or provide assistance for displaced, economically-impacted businesses. 

The State’s allocation methodology was based on FEMA housing 

damage estimates and targeted funding to the hardest hit areas. 

The scoring mechanism took four indicators. The first was the perVerDate Aug 31 2005 14:32 Aug 20, 2008 Jkt 043696 PO 00000 Frm 00016 Fmt 6633 Sfmt 6633 K:\DOCS\43696.TXT TERRIE
9 

centage of housing units damaged in each county that was based 

on FEMA inspections. The second was a percentage of the State’s 

total of destroyed units in each county, also again taken from 

FEMA data, a percentage of counties’ damaged units attributed to 

households with incomes up to $30,000 to measure the level of lowincome need, and we also used the percentage of the State’s total 

of temporary units that were placed in each county. 

A supplemental CDBG disaster recovery allocation of $100 million to address Katrina and Wilma damage was received in 2006. 

Because Wilma damage was not sufficiently addressed with these 

funds, we targeted Wilma recovery with this money. The Wilma 

alone impacted about $275,437 units, HUD-subsidized rental units 

that were hit by the disaster. Of the 17,804 HUD-subsidized units 

in Wilma counties: 2 development units reported damage with relocations; 67 households were temporarily relocated; and 134 developments reported damage. Of the public housing units in the area, 

4,974 units were damaged and remain uninhabitable. 

Chairwoman WATERS. I’m sorry. Your 5 minutes have passed. I 

am going to have to move on. 

[The prepared statement of Ms. Stafford can be found on page 

250 of the appendix.] 

Chairwoman WATERS. Next, Mr. David Bowman, director of research and special projects, Louisiana Recovery Authority. 

STATEMENT OF DAVID J. BOWMAN, DIRECTOR, RESEARCH 

AND SPECIAL PROJECTS, LOUISIANA RECOVERY AUTHORITY 

Mr. BOWMAN. Chairwoman Waters, Ranking Member Capito, 

and members of the subcommittee, thank you for inviting me to 

testify today on behalf of the State of Louisiana. 

My name is David Bowman of the Louisiana Recovery Authority. 

Our executive director, Paul Rainwater, deeply regrets that he was 

unable to attend today. On behalf of the citizens of Louisiana, I 

thank this committee, the U.S. Congress, and each American taxpayer for the generous support to our State following the unprecedented disasters caused by Hurricanes Katrina and Rita. 

These hurricanes were two of the most costly storms in U.S. history and they hit Louisiana just 26 days apart. Our State has suffered immensely in terms of lost lives, livelihoods, and personal assets. The State of Louisiana is grateful for the $13.4 billion in Community Development Block Grant funds in which $11.6 billion, over 

87 percent, has been dedicated directly to repairing and replacing 

the massive loss to our housing stock. 

We are making strides with these Federal funds, but even with 

these resources, a number of practical challenges remain to the rebuilding efforts. These include increased cost of labor materials, increased cost of utilities and insurance, and a decrease in available 

infrastructure and services. These challenges impact the single 

family housing market as well as the rental market and drive individual decisions every day regarding their ability to return home. 

In addition, the sheer magnitude and concentrate of losses dictates that this will be a long-term rebuilding process. The Louisiana Recovery Authority is dedicated to the recovery of our most 

devastated areas through the effective use of Federal and State reVerDate Aug 31 2005 14:32 Aug 20, 2008 Jkt 043696 PO 00000 Frm 00017 Fmt 6633 Sfmt 6633 K:\DOCS\43696.TXT TERRIE
10 

sources in a manner that provides accountability and transparency. 

As such, we welcome the opportunity to answer your questions. 

Your first question on how many units were destroyed as a result 

of Hurricane Katrina: The State of Louisiana had over 204,000 

housing units with major, severe damage, and over 106,000 of 

these were classified as severe or destroyed. Approximately 60 percent of those were owner-occupied; 204,000 homes amounts to approximately 1 in every 8 homes in the State. I ask you to contemplate the scale of that number for a moment. 

Due to the levee failures, New Orleans Parish alone had more 

damage than the four Gulf States combined. In neighboring St. 

Bernard Parish, three out of every four houses had major or severe 

damage. 

Current unmet housing needs: Assessing the true demand for 

housing in the wake of this unprecedented disaster is nearly impossible. We still have tens of thousands of citizens displaced throughout the country, engaging their intent or ability to return home as 

a guest at best. The LHFA recently commissioned a housing needs 

assessment, which is currently available on their Web site. The 

study indicates the need for 120,000 to 160,000 affordable rental 

and purchase properties throughout the State. 

When you consider the estimated number still displaced—there 

were 20,000 still residing in FEMA trailers and receiving rental assistance—the 34,000 in HUD’s DHAP program, an estimated 

12,000 homeless residing in New Orleans, these seem like conservative numbers. 

Number two is to describe the State’s plan for rebuilding and repair of lost or damaged housing units. The State’s plan for rebuilding and repairing lost or damaged units comes primarily through 

the use of CDBG and the utilization of Gulf Opportunity Tax Zone 

credits in addition to traditional programs to create market incentives. These are spelled out in our action plans to HUD. 

How will this plan address all the State’s unmet housing needs? 

The short answer is that while these programs will have a dramatic on the housing market, they will not address all of the needs. 

The combination of a supply shortage and increased cost of inputs 

have driven rent prices up considerably higher than pre-Katrina. 

Many workers, particularly those supporting the service sector, 

will continue having a difficult time finding affordable rent for the 

foreseeable future. With the State’s recovery programs, we expect 

to construct approximately 33,000 units, in addition to an additional 7,500 units across the State through GO Zone and HOME 

programs. Compare this to the 82,000 rental units that were destroyed by the storms. 

In what ways does the State ensure that its housing plans affirmatively further fair housing? Louisiana prides itself on the design of its programs in these terms. The Affordable Compensation 

Grant portion of the homeowner program provides additional funding for low- and moderate-income persons to meet the cost due to 

damage. The rental program is a model of best practices, including 

the creation of mixed income units and permanent supportive housing. On this note, we critically need your support for a current request of 3,000 permanent supportive housing vouchers. Without 

these supports, we will have invested in these units, but we will 

11 

be unable to connect our most vulnerable population to these resources. 

What difficulties has the State encountered in meeting the 

CDBG program’s low- and moderate-income requirements? 

Mr. GREEN. [presiding] You may take an additional 30 seconds 

to wrap up, please. 

Mr. BOWMAN. Louisiana will meet its requirements for low- and 

moderate-income; we do not consider these an owner’s requirement. 

We consider them necessary to rebuilding our State. Within my 

written comments, you also have some additional challenges we 

faced including meeting environmental requirements, implication of 

benefit, and complications with the process of actually getting the 

CDBG money on the street. Specific recommendations are within 

the written testimony. 

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

64 of the appendix.] 

Mr. GREEN. Thank you. 

We will now hear from Mr. Norris, the director of the Governor’s 

Office of Recovery and Renewal for the State of Mississippi. 

STATEMENT OF JACK NORRIS, EXECUTIVE DIRECTOR, GOVERNOR’S OFFICE OF RECOVERY AND RENEWAL, STATE OF 

MISSISSIPPI 

Mr. NORRIS. Thank you. Madam Chairwoman, Congressman 

Green, and other members of the subcommittee, thank you for the 

opportunity to testify before you today. 

We have a recovery story in Mississippi that we are very proud 

of, but we still face a number of challenges and we have a long 

road ahead of us. And there are some issues that we would like to 

request your assistance on to remove some barriers to help us deploy some affordable housing. 

Our State and our citizens bore the brunt of a hurricane more 

devastating than anything this Nation has ever seen before. The 

hurricane completely devastated our entire coastline. On November 

1, 2005, Governor Barbour submitted a comprehensive recovery 

plan to Congress. This request included items to facilitate housing, 

community, and economic recovery. Congress graciously provided 

Mississippi with the necessary resources to fulfill all three objectives. 

The State of Mississippi is pursuing a balanced, long-term recovery. This is evident in the distribution of the $5.4 billion in CDBG 

funds: $3.8 billion, over 70 percent, will directly and indirectly go 

towards housing recovery. Another $1.45 billion will go towards the 

community and economic recovery. Using CDBG moneys, Mississippi created the first of their kind of programs to rebuild the 

lost housing stock. We are proud to say that through Governor 

Barbour’s housing program, more affordable housing will be developed and rehabilitated than existed pre-Katrina in coastal Mississippi. 

For example, 61,386 housing units suffered major damage or 

were destroyed. The State will facilitate the rebuilding of over 

58,000 affordable housing units. This is in addition to the thousands of units that will be rebuilt using private insurance proceeds. 

12 

Private insurance payments in the lower six counties alone totaled 

more than $8.7 billion. 

To give you an example, using CDBG moneys, the State will rebuild more than double the number of public housing units that existed pre-Katrina; 2,361 public housing units existed pre-Katrina, 

and we will build-back 4,781. To date, approximately $1.5 billion 

in direct compensation has been paid to over 20,000 homeowners 

through the Homeowners Assistance Program. The State projects that by program close-out, roughly $2 billion 

in grants will be disbursed to about 25,000 homeowners. To ensure 

we are meeting our full, housing recovery mission, Mississippi has 

commissioned an independent, third-party housing assessment 

study, which will analyze any unmet needs that our housing programs are not meeting. 

We have the resources available to us, so that if any unmet 

needs are identified, we can tailor those policies to meet that 

unmet need. We are not just assuming that our projects are correct; we are going to confirm them through a third-party independent study. We were disappointed with the pace of affordable 

housing deployment, however, this is primarily due to the environmental requirements in disbursing CDBG dollars. With this hurdle 

removed or streamlined, housing would come on-line at a rapid 

pace. 

The environmental review required for each applicant’s site entails the coordination of more than eight Federal agencies approving nine different categories, making this process extremely timeand labor-intensive. Depending on the site, reviews take up to 3 

months to complete. Multiply this process by thousands of units 

and the time and expense multiply exponentially. 

For example, in our Round I Rental Assistance Grant Program, 

3,372 units are ready to go pending completion of site and environmental reviews. We expect that these environmental reviews which 

began in January of 2008 could take up to 11 months from beginning to end to complete. There were currently 4,667 coastal Mississippians living in FEMA travel trailers who could move into 

these units. 

Mississippi is requesting relief from these cumbersome regulations for housing specific projects, while HUD has been a great 

partner, providing technical expertise to expedite funding. The 

Agency lacks the administrative authority to waive or streamline 

the environmental process. Mississippi respectfully suggests that 

Congress take steps to streamline or waive certain environmental 

requirements for this disaster and future CDBG emergency appropriations. 

Environmental regulations are the number one impediment to 

the deployment of affordable housing in Mississippi. We are extremely grateful for the continued support of our friends and neighbors and for the resources that Congress has entrusted to us. We 

humbly ask for your continued assistance and support as we move 

forward. 

Thank you. 

[The prepared statement of Mr. Norris can be found on page 218 

of the appendix.] 

Mr. GREEN. Thank you, sir. 

13 

And we will now hear from Mr. William Dally; I trust that I am 

pronouncing that correctly? 

Mr. DALLY. That is quite correct. 

Mr. GREEN. Thank you, sir. You are the deputy executive director for the Texas Department of Housing and Community Affairs? 

Mr. DALLY. That is correct. 

Mr. GREEN. Thank you. 

STATEMENT OF WILLIAM C. DALLY, DEPUTY EXECUTIVE DIRECTOR, TEXAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS (TDHCA) 

Mr. DALLY. Thank you for inviting us today. 

TDHCA is the lead agency in Texas responsible for Hurricane 

Rita recovery. Thank you for inviting us to update you on our 

progress to-date. 

On September 25, 2005, Hurricane Rita devastated Southeast 

Texas: 113 people lost their lives; 40,000 uninsured or underinsured homes were damaged or destroyed; and the region’s electrical grid was down for weeks. Infrastructure throughout the region was left in ruin. Texas has received today a total of $503 million in Community 

Development Block Grant funds, far less than was needed for a full 

recovery, which has meant that we have had to make some very 

tough choices. 

Texas was able to draw down on its first allocation of CDBG 

funds from HUD in June 2006, 9 months after the storm. Given the 

very limited funds and the uncertainty that we would receive additional dollars, we worked closely with elected local officials, community leaders, and advocates for low-income Texas faith-based organizations. 

Texas has endeavored to use every dollar to actually rebuild or 

restore the region’s housing infrastructure and tax base. To rebuild 

and repair housing, TDHCA has partnered with three Council’s of 

Government known as COGs. These local organizations are responsible for the distribution of $40.3 million in housing funds on the 

first round of funding. The balance is going to infrastructure in 

that same region. 

To date, the COGs have built, repaired, and replaced more than 

150 homes in Southeast Texas. The process to rebuild and repair 

another 350 homes is well underway. All homes using the first 

round of CDBG funds should be completed by the end of this year. 

In all instances, the intended beneficiaries of these funds are the 

lowest-income Texans, those well below 80 percent area median 

family income. 

We have also given priority to seniors, persons with disabilities, 

and other vulnerable populations. This process has taken time to 

get up and running because of the complexities of the CDBG program. There are extensive environmental requirements, historic 

preservation clearances, duplication of benefit requirements, and 

other issues, all of which slow the process down. 

There is also the reality that many of the poor lack critical eligibility documentation and often require intensive casework. And 

that is where our faith-based community has really stepped up, 

and in the interim, been the ones who have gone out and done outVerDate Aug 31 2005 14:32 Aug 20, 2008 Jkt 043696 PO 00000 Frm 00021 Fmt 6633 Sfmt 6633 K:\DOCS\43696.TXT TERRIE
14 

reach and brought people in for applications and made them aware 

of our benefits long before the State had our program set up. 

Again, our overriding desire in Texas is to rebuild homes and 

communities for those most vulnerable citizens. In April 2007, just 

a little over a year ago, Texas received permission to draw from 

HUD the second allocation of $428 million. After much public discussion again with local officials, community groups, and faithbased organizations, Texas chose to continue on a path of assisting 

individuals and communities by focusing on actual housing and infrastructure construction and assigning priorities to our most vulnerable, low-income citizens. 

The largest amount of the $428 million is reserved for housing; $222 million for owner-occupied assistance. There is another $81 

million that is being used for the rehabilitation and reconstruction 

of more than 800 multi-family rental units that were destroyed by 

Hurricane Rita. 

TDHCA has contracted with a team of professionals to assist 

with the rebuilding of single family homes in Southeast Texas. This 

team is qualifying eligible homeowners but the hard work of building and repairing homes or replacing a manufactured home is 

being left to qualified home builders and contractors. TDHCA and 

our contractors, however, will take the lead and ensuring that Texans receiving benefits from these programs get a safe and decent 

quality home. 

So owner-occupied construction from the second round of funds 

will commence early this fall. It is important to note that with the 

$222 million we expect to help only 3,500 homeowners, out of again 

40,000 low-income Texans who had significant repair and building 

needs. On a final note, we also know that starting over in a new 

community is difficult. That is why the State of Texas dedicated 

$60 million of the $428 million in Round 2 to the City of Houston 

in Harris County to assist and provide services for evacuees from 

Hurricane Katrina. 

We believe that we have turned the corner from the planning 

stage and are now fully into the building and reconstruction in the 

region. We welcome the committee exploring the role and capacity 

of the CDBG program when a major disaster strikes. In Texas, we 

believe that we have done some things very well. You will find 

strong accountability and controls intended to prevent fraud, 

waste, and abuse, and you will also find that our program is actually building homes and repairing infrastructure for whom the program was intended. We are doing all of this in compliance with the 

Nation’s Fair Housing laws. 

Still, Texas believes that the process could have been significantly streamlined. If the award of CDBG funds had come in one 

lump sum rather than two, we would have enjoyed more efficiencies and saved a tremendous amount of money and time. If the 

funds had been available to the State sooner, we would have had 

less costly rehabs. Instead, after all this time, and with the rain 

that has occurred, we are now in the process of doing full rebuilds. 

Finally, had HUD and the State had more flexibility to account 

for duplication of benefits and some environmental factors, we 

would be spending far more time building homes than going 

through the qualification and eligibility process. 

15 

[The prepared statement of Mr. Dally can be found on page 72 

of the appendix.] 

Mr. GREEN. I would like to thank the witnesses for their testimony, and I would like to begin with Mr. Johnson with some questions, if I may. 

Mr. Johnson, sir, you have indicated that you have lived in a 

number of places that were impacted by hurricanes. Is that correct? 

Mr. JOHNSON. That is true. 

Mr. GREEN. You are not moving to the Washington, D.C., area, 

are you? 

Mr. JOHNSON. No, sir. I am really trying to avoid that. 

Mr. GREEN. All right, sir, thank you. 

Let’s move now to Mr. Norris with the Governor’s Recovery Office, State of Mississippi. 

Mr. Norris, sir, the economic development plans that you have 

with reference to CDBG, you are supposed to, and my assumption 

is that you have, received input from the public. Is this true? 

Mr. NORRIS. Yes, we have. 

Mr. GREEN. More specifically, as it relates to the $600 million 

that we have been discussing from Phase I, did you have input 

from the public on that $600 million and how it was to be used? 

Mr. NORRIS. Through the CDBG program, there is a statutory 

public comment period, and we did receive comments and public 

input through that process. Yes, sir. 

Mr. GREEN. What process was that? How did you receive the 

public comments, please? 

Mr. NORRIS. We followed HUD’s regulatory requirements for public comment periods. 

Mr. GREEN. Well, did you hold hearings? Did you solicit comments by way of e-mail? How did you actually receive the comments? 

Mr. NORRIS. Congressman Green, I will have to get back with 

you on those details. But we did follow HUD’s normal CDBG public 

comment period process. 

Mr. GREEN. My belief is that you are saying this because you understand that the process is to be followed, but that you did not 

have a hands-on experience with it. Is this correct? 

Mr. NORRIS. I personally did not have a hands-on experience 

with it. 

Mr. GREEN. So your knowledge of it would be based upon hearsay from some source, but because you know that the people you 

work with are capable, competent, and qualified, your assumption 

is that they have followed the rules. 

Mr. NORRIS. Yes, sir. That is correct. 

Mr. GREEN. Let’s move on. I am interested in knowing more 

about this. And if you can provide the information, I would greatly 

appreciate it, because the public comments are exceedingly important in the CDBG process. Let’s talk for just a moment about if we 

made now the three national objectives, one of which must be met 

for CDBG funds to be used. Would this request with the Port, will 

this principally benefit low-income people? 

Mr. NORRIS. Congressman, we expect to meet the low- to moderate-income requirement on the Port redevelopment project. We 

did not specifically ask for a waiver of that requirement on the 

16 

Port. The jobs that would be created as a result and returned to 

the Port of Gulfport through its rebuilding efforts will be presented 

to low- and moderate-income individuals. 

Mr. GREEN. My intelligence indicates that, well, I’ll go through 

the entirety of the three: principally benefit low- and moderate-income persons—principally benefit low- and moderate-income persons is the first; and, while my suspicion is that some low- and 

moderate-income persons may benefit, I am not entirely convinced 

right now that they will be the principal beneficiaries. 

Is it your contention that they will be the principal beneficiaries? 

Mr. NORRIS. Congressman, it’s an issue of overall recovery of the 

Mississippi Gulf Coast. We have, basically, I’ll borrow an analogy 

from my predecessor. The philosophy that we approach this recovery from is a balanced, comprehensive recovery. It is basically 

three legs of a stool that we have to completely and fully address: 

housing needs; economic recovery needs; and community recovery 

needs. And, through our programs, we expect the Port redevelopment is a crucial part of the economic recovery of the Mississippi 

Gulf Coast. 

Mr. GREEN. And I want to make sure that we help Mississippi 

recover, but if you have need for port money, and if we can get that 

money to you through some other means and let the CDBG money 

go to people who need CDBG money, that might be an equally beneficial way for us to approach this. I am concerned about the requirement that it principally benefit low- and moderate-income persons. I believe some will benefit, but I have not heard enough evidence from you to give me reason to believe that low- and moderate-income persons will principally benefit. That is my concern. 

Let’s move to the next requirement: that it will aid in eliminating or preventing slums or blight. Is this going to eliminate or 

prevent slums or blight? 

Mr. NORRIS. Congressman, it is my understanding that the 

project would have to meet one of the national objectives of the 

city. 

Mr. GREEN. Exactly, and I am trying to give you the benefit of 

all three. So this one would not be one of the three, then. 

Mr. NORRIS. I would say of the overall philosophy of our recovery, we actually borrow a philosophy from President Kennedy: ‘‘A 

rising tide lifts all boats.’’ If we fully recover the Port, it will help 

for the overall recovery of the economy of the Mississippi Gulf 

Coast, therefore providing good, quality paying jobs to all individuals on the coast, including low- to moderate-income individuals. 

Mr. GREEN. I understand. Let me just suggest this to you; and, 

I completely agree that a rising tide does lift all boats if you have 

a boat. Unfortunately, we have many persons who are boatless. But 

let’s move to the third now. The third requirement is that you meet 

an urgent community development need because existing conditions pose a serious and immediate threat to the public. 

Was there a serious and immediate threat to the public? 

Mr. NORRIS. I would say that the immediate need was that our 

Port employment numbers are down 30 percent. Those are AFL– 

CIO longshoreman who are currently unemployed, that we have an 

opportunity through the investment of these funds to provide jobs 

back to those individuals, sir. 

17 

Mr. GREEN. Well, under this theory, all CDBG moneys should go 

to some entity that will provide jobs, because my suspicion is in 

just about every State, there is a need to create job opportunities. 

But CDBG, generally speaking, is supposed to help with the revitalization, housing rehabilitation, and economic development activities. 

But, it seems that the intent was to help in areas where you 

have people who will immediately benefit as opposed to indirectly 

benefit. Because, indirectly, I benefit from what is happening at the 

port, but I am many times removed. And the question becomes, will 

this $600 million benefit the people whom it was intended to benefit? Low- and moderate-income persons? 

Will it prevent slums or blight or will it deal with an immediate, 

serious threat to the public? $600 million of CDBG, you see. You have your friend from Texas 

seated right next to you, and he is asking for more CDBG money 

as well. Let me just move to him quickly. Sir, are you building a 

port with this money in Texas? 

Mr. DALLY. No; we are not. We did not receive enough in funds 

to even consider a port project. 

Mr. GREEN. I see. 

Mr. NORRIS. Congressman? 

Mr. GREEN. Yes, sir? 

Mr. NORRIS. I would say that there is a clear misconception that 

Mississippi is taking money and investing it into the Port at the 

expense of housing. That is simply not the case. 

Mr. GREEN. Well, before you go on, I am going to give you a 

chance to respond. But, in your response, do this, if you would. 

Move to another level and take it from just within the purview of 

Mississippi to Texas, to Louisiana, to other States that need CDBG 

dollars and ask yourself, am I preventing other States that may 

need this money from getting it as opposed to just Mississippi? You 

see, we here are perched such that we see all 50 States as opposed 

to just one State. If you would? 

Mr. NORRIS. Yes, sir. I would again reiterate that this is an 

amount of money that the Governor submitted a plan to Congress 

on November 1st of 2005 for a comprehensive recovery plan to the 

appropriations, House and Senate leadership, and this is the 

amount of money that Congress basically looked at the recovery 

plan that was needed for Mississippi holistic recovery; and Congress provided us the necessary resources. 

We were building back more affordable housing units than existed pre-Katrina. We were directly giving homeowner’s grants for 

$1.5 billion to over $25,000 individuals and we are overcompensating for housing recovery if you look at the pure numbers of damaged units and the numbers that we are subsidizing to be rebuilt. 

We were fully meeting our housing recovery. 

Mr. GREEN. I understand. And for purposes of this discussion, 

let’s assume that everything that you have indicated about what 

you are doing in terms of reconstruction is correct for our purposes. 

Then the question becomes, do you really need the $600 million for 

Mississippi for the port or can we take that money and send it over 

to maybe Texas or Louisiana to help with some other housing 

projects as opposed to port projects? 

18 

Mr. NORRIS. Congressman, I would respectfully say to you that 

we cannot address the overall economic and overall Katrina recovery efforts of the Mississippi Gulf Coast without addressing one of 

its crucial economic engines. So I would say it is direly necessary 

that Mississippi had these resources to invest in the rebuilding of 

the port. 

Mr. GREEN. All right. Let’s go again to Mr. Dally. Is that correct, 

sir? 

Mr. DALLY. That’s correct. 

Mr. GREEN. Mr. Dally, you indicated that Texas is in need of 

some CDBG funds. Would you tell me quickly please, before I yield 

to another member who has arrived, about the Texas need, if you 

can summarize that need, and in doing so, tell me about the economic development activities in the Texas need, if there are such 

needs. 

Mr. DALLY. We do not have any in the way of economic development in our particular program, because as we went out to the 

local officials in Southeast Texas, it was clear that with the amount 

of money that we had that what we needed to do was to rebuild 

housing and get those people back up where they could remain in 

their communities and be part of that tax base and part of that 

community. 

Mr. GREEN. Let me move on. Let’s go now to Florida, the representative from Florida. 

Do you have economic development dollars in your program? 

Ms. STAFFORD. Yes, we do. We just have a very small portion. 

The majority of our funds are going for infrastructure and housingrelated activities. 

Mr. GREEN. When you say a small portion, quickly, what percentage would you say? 

Ms. STAFFORD. This is a rough guesstimate. I would say less 

than 20 percent. 

Mr. GREEN. And will you be constructing or rehabilitating a port? 

Ms. STAFFORD. No. No, our economic development funds actually 

go to assist businesses that have been impacted and to create jobs. 

So we are not rebuilding any ports or anything like that. 

Mr. GREEN. And are these businesses near areas where we have 

low-income persons residing? 

Ms. STAFFORD. Yes, they are. Yes, and actually one of the requirements under our economic development funds is that they actually, 50 percent of the jobs that they create, are for low- to moderate-income persons in the community. 

Mr. GREEN. Let’s move to Louisiana, please. 

Do you have within your plan an economic development component? 

Mr. BOWMAN. Yes, sir. We have about 2 percent. 

Mr. GREEN. Two percent? 

Mr. BOWMAN. Two percent. 

Mr. GREEN. And what type of businesses will you impact, please? 

Mr. BOWMAN. Primarily small businesses in the impact area. We 

have a small business grant and loan program. 

Mr. GREEN. And in the impact area, do you have low-income persons? 

Mr. BOWMAN. Yes, sir. 

19 

Mr. GREEN. In that immediate area? 

Mr. BOWMAN. Yes, sir. 

Mr. GREEN. All right, Mr. Norris, just one more word or question. 

In the area immediately around the port, what we will call the 

impact area, do we have low-income persons living in that area? 

Mr. NORRIS. Sir, I would say that the broad income that the port 

has on the entire Gulf Coast clearly, we had roughly pre-Katrina, 

about 47 percent low to moderate income. 

Mr. GREEN. I see, so by helping with the port, we will help the 

entire Gulf Coast? 

Mr. NORRIS. Absolutely. Sir, I would want to point out that I notice other States get percentages of their CDBG funds that are 

being used for economic development purposes. 

Mr. GREEN. Yes, sir. 

Mr. NORRIS. Well, say, of our $5.4 billion allocation, over 70 percent is going directly to support housing development; only 30 percent, or $1.4 billion of the $5.4 billion, is going toward job recovery. 

We cannot have full recovery without economic recovery. We are 

rebuilding communities, not just houses. 

Mr. GREEN. Now, before I close, and I will be yielding to Mr. 

Cleaver in just a moment, but let me ask this: In 2007, did you 

have $81,756,822 as unencumbered funds for your port? Or, maybe 

my dollars are a little bit off; I would say about $81 million. 

Mr. NORRIS. I am not sure I understand the question. 

Who would have had those resources available to them? 

Mr. GREEN. Your port; the port that we are talking about that you are asking to get the $600 million? 

Mr. NORRIS. I am not familiar with that number. 

Mr. GREEN. I have information indicating that at the beginning 

of 2008, you had $82,353,592 as unencumbered. 

Mr. NORRIS. I can’t comment on that number, because I am not 

sure what the source of it is. Congressman, it may be that the port 

does qualify for some sort of public assistance funding and obviously had some insured losses. 

Mr. GREEN. Is your port in the red or in the black? 

Mr. NORRIS. Congressman, they are in the process of settling 

with FEMA for public assistance funding and with their insurance 

for insured losses that they fall far short of the necessary resources 

to fully build back. 

Mr. GREEN. Can you provide the committee with an audit statement in terms of where the port is with its actual funds of financing. I would like to know whether it is in the red. If it is in the 

red, to what extent. If it is in the black, to what extent. It may be 

the actual dollar amount, so I can see if it coincides with the numbers that I have. That would be for 2008 and for 2007. 

Mr. NORRIS. Yes, sir, we would be happy to follow up with you. 

Mr. GREEN. And how long would you contemplate that this action 

would take you to consummate? 

Mr. NORRIS. We will follow-up immediately after this hearing 

and get that information to you as quickly as possible. 

Mr. GREEN. May I define ‘‘immediately’’ for you, since you have 

said ‘‘immediately?’’ 

Mr. NORRIS. Sure. 

Mr. GREEN. Can it be done within a week? 

20 

Mr. NORRIS. Yes, I’m not sure what all it entails as far as going 

back, but, yes, sir. We will make the commitment to you that if 

that $81 million, I will find the source of that number for you within a week and provide that in writing to the committee. 

Mr. GREEN. If that is too soon for you, would you like 10 days? 

Mr. NORRIS. Yes, we will take as much time as you are willing 

to give us, because I am not sure what all is entailed in identifying 

it. 

Mr. GREEN. With the advice and consent of the Chair, Madam 

Chairwoman? 

Chairwoman WATERS. Will you continue with this panel? 

Mr. GREEN. I am about to yield, especially to you Madam Chairwoman, but I was asking this witness to submit some information. 

I have information indicating this port had $81,756,822 of 

unencumbered funds in 2007; and $882,353,592 in 2008, and I 

have asked him to give me some information on these numbers. 

Is that acceptable to you, Madam Chairwoman? 

Chairwoman WATERS. Yes, that is fine, without objection. 

Mr. GREEN. Without objection, thank you. 

I will now yield to the Chair and relocate from the chair. 

Chairwoman WATERS. Thank you. Thank you very much. 

I would like to thank Mr. Green for filling in for me while I had 

to go out for a moment. As I understand it, we are in the questioning period at this point, and I do have a number of questions 

that I would like to ask. 

First, let me just say to our representative here from Alabama, 

Mr. Bill Johnson, that I am pleased that my staff made sure that 

you were here today, because we have not given a lot of attention 

to Alabama. Most of our attention has been focused on Louisiana 

and Mississippi and Florida, and even Texas and Alabama have 

not gotten a lot of attention. 

But for you, in your testimony, you said that you had been able 

to manage your CDBG funds despite some of the requirements of 

the Federal Government. Were you implying that there were so 

many strings attached that you felt that you had to work a little 

bit harder in order to get the money out? Or, because as I heard 

from our first witness today, Mr. Gimont, that it had been designed 

and we supposedly passed the legislation so there would be enough 

flexibility in it so that each area could tailor the money to its 

needs. 

So, would you let me know, Mr. Johnson, whether you were able 

to do that in Alabama? 

Mr. JOHNSON. Well, yes, ma’am. We fortunately were, and I have 

to say that HUD was great at granting the waivers. We asked for 

every waiver that we could get and we were granted every waiver. 

Still, I think everybody here appreciates the other strings that 

are attached, the environmental regulations and reviews that are 

sort of necessary with the Block Grant program. So those are still 

the challenges that we have to oversee. But we have just really appreciated the cooperation that HUD has given us in this program. 

Chairwoman WATERS. Now, we know a little bit more about the 

Road Home program in Louisiana and how it works. How did you 

design the expenditure of your CDBG funds? 

21 

Mr. JOHNSON. Well, as I mentioned at the beginning, the area 

that was primarily affected, Mobile County and Mobile City, both 

of those entities are entitlement communities, and, as such, they 

had been managing their programs for decades. And, so, the State 

elected to basically make Block Grants for different categories of 

activities to these local entities who were eligible entitlement community to basically craft and design their own programs. 

Now, we did work hand-in-glove with them. As I said, we had 

our long-term recovery planning committees that met jointly with 

them. I have a person stationed on the ground down there. We 

have been, as I say, it is a joint partnership between the State and 

the local entities, but they take the lead, because they are the entitlement. 

Chairwoman WATERS. So we made you talk directly to those entitlement communities about how they spent the money both for 

homeowners and for renters. 

Mr. JOHNSON. Yes, ma’am. I can only relate to you what they 

have related to me. 

Chairwoman WATERS. All right. Let me quickly go to Mississippi, 

because one of the concerns that we have that triggered this hearing today has to do with the port. All right. I am sure you have 

heard a lot about it from the other members. 

As I recall, when we were in Mississippi, we learned that your 

first allocation of assistance was to those who already had insurance, your homeowners and your kind of road home program, or 

whatever it was called. It went to those who already had insurance 

and that you allocated ‘X’ number of dollars. They were eligible for 

‘X’ number of dollars, and you had money left over. And then you 

went to a second level of funding in some way to those who maybe 

did not have insurance. 

Will you explain to us how you did that? 

Mr. NORRIS. Congresswoman, the State of Mississippi’s housing 

assistance grant program was designed and funded for Congress. 

The argument that was made that Congress should provide direct 

grant assistance to individuals was on the basis that individuals 

living outside the federally-drawn flood maps, who were told by the 

Federal Government that they did not need flood insurance, and 

the Federal Government was simply wrong, their homes were destroyed by flood damage. 

So it was the argument in the State of Mississippi, since those 

individuals were allowed on the Federal Government to their detriment that they did not need flood insurance that the Federal 

Government should compensate those individuals. And that is the 

basis for Round I of the Homeowner Assistance Grant Program. 

We then expanded it to be directed specifically to low- to moderate-income individuals, uninsured individuals in and outside the 

flood plane, but still, specifically, to address the unprecedented 

event. In Mississippi, the unprecedented event of Katrina was a 30- 

foot wind-driven storm surge, and our housing assistance grant 

programs as funded by Congress were intended to help those individuals and to compensate them for their losses due to the winddriven storm surge. And then that was the basis for the Mississippi 

Homeowners Assistance Grant Program. 

22 

Chairwoman WATERS. What was the average amount of the 

grant that you gave in the first round to those who had insurance? 

Mr. NORRIS. The first round was specifically designed to cover 

those individuals who had homeowner’s insurance but did not have 

flood insurance. 

Chairwoman WATERS. Yes, I understand that. How much average and total amount was spent in that category? 

Mr. NORRIS. The total amount spent to date? Hold on. I want to 

give you an accurate number, ma’am, so if you would give me a 

second. 

Chairwoman WATERS. Okay, all right. 

Mr. NORRIS. For Round I of the Homeowners Assistance Grant 

Program, to-date, $1.2 billion in grants have been distributed. 

Chairwoman WATERS. Okay, now. Describe who received money 

in the second round. 

Mr. NORRIS. The second round was expanded to cover those individuals at 120 percent of the average median income and below 

who were either insured or uninsured inside the flood plain or outside the flood plain. 

Chairwoman WATERS. Now, give me the average amount of the 

grant in Round I to those homeowners. What was the average 

amount of the individual grant? 

Mr. NORRIS. Madam Chairwoman, we budgeted overall for the 

program that we would receive, Round I and II, 30,000 qualified 

applications and an average grant of $120,000. 

Chairwoman WATERS. $120,000 is the average amount that was 

given to the homeowners who qualified? 

Mr. NORRIS. I would say our original budget estimate is that they could qualify for up to $150,000. We budgeted for grants to 

come in around that level. The average grant that we have received 

and that we have awarded is about a $70,000 grant; and that is 

driven by the individual applications and what they qualify for. 

Chairwoman WATERS. Okay, about $70,000 is the average, but it could go up to $150,000? 

Mr. NORRIS. It could go up to $150,000 for Round I, and up to $100,000 for Round II. 

Chairwoman WATERS. Okay, for Round II, what was the average 

grant that was given in Round II? 

Mr. NORRIS. The average grant for both, the number that I have, 

Madam Chairwoman, is that the average grant for both homeowners programs was $70,000. 

Chairwoman WATERS. No. No. No, I want the average just like 

you just gave me the $70,000 average in Round I. In Round II, that 

was a different group of qualifiers as you have described. They did 

not have the insurance and they came in Round II. 

What was the average amount of that grant? 

Mr. NORRIS. Madam Chairwoman, respectfully, I don’t have that 

number with me. I am happy to follow up in writing, specifically, 

to that point. But, overall, if you take it holistically, the average 

grant for Round I and II was $70,000. 

Chairwoman WATERS. No, that’s not what I want. What I want 

is I want to know how much was given in Round I to those homeowners who had insurance; and, then, in the second category, I 

would like to know the average grant and the total amount of 

23 

money spent in the second round. How much was spent on the second round? 

Mr. NORRIS. Well, we’re still processing applications, so the number changes daily. 

Chairwoman WATERS. Just as of today. 

Mr. NORRIS. Well, as of May 2nd, $278 million. 

Chairwoman WATERS. $278 million in the second Round? 

Mr. NORRIS. Yes, ma’am. And it’s important to note that this 

grant program is driven by demand. 

Chairwoman WATERS. $278 million in the second Round. What 

was the total bottom line in the first round? 

Mr. NORRIS. To-date, it is roughly $1.2 billion. That exact number is $1.71 billion. 

Chairwoman WATERS. $1.2 billion, and how many homeowners 

were the beneficiaries of the $1.2 billion? 

Mr. NORRIS. Well, to date, the number of grant awards paid is 

roughly 16,000. But, to date, we have awarded program-wide 

Round I and II, just about 25,000 grants. 

Chairwoman WATERS. So, about 16,000 of those were in Round 

I where you spent about $1.2 billion at an average of about 

$70,000, which could go up to $150,000. And in Round II, how 

many were covered? How many homeowners were covered in 

Round II, the ones who didn’t have any insurance? 

Mr. NORRIS. Congresswoman, it’s a moving target daily. But at 

the end of the day— 

Chairwoman WATERS. Just as of today, as of last month. 

Mr. NORRIS. Well, Congresswoman, we will follow-up with you in 

writing to the specific numbers of Round II of the percentage. 

Chairwoman WATERS. You don’t have that today? You don’t have 

those numbers today? 

Mr. NORRIS. I have overall program forecasts for Round 2, what 

we expect. 

Chairwoman WATERS. No. I don’t want the forecast. I want the 

actual. 

Okay. How would you describe your unmet needs at this point? 

Mr. NORRIS. Madam Chairwoman, I would describe our unmet 

needs at this point as clearly, we have 4,667 coastal Mississippians 

living in FEMA travel trailers. That is our immediate unmet need 

that keeps us up at night, frankly, because we have deployed the 

necessary resources for full housing recovery on the Mississippi 

Gulf Coast to build more units than were damaged and existed preKatrina. 

And, specifically, in our small rental assistance grant program, 

we have just over 3,300 homes that are ready for construction tomorrow, but they are mired in the environmental requirements 

that are placed on CDBG dollars. But we have an immediate need 

of a population of over 4,000 coastal Mississippians living in travel 

trailers. We have the resources ready to deploy tomorrow, but we 

can’t deploy those resources because of the environmental requirements placed on those resources. 

Chairwoman WATERS. I don’t understand what you are saying. 

You can’t build housing because of environmental problems? 

Mr. NORRIS. We were directly subsidizing the construction of affordable rental units using CDBG dollars. You cannot deploy 

24 

CDBG dollars without going through all the environmental requirements that are attached to the expenditure of the dollar. 

Chairwoman WATERS. Yes, I mean, they are requirements. To 

spend money, usually, you are saying that they are too onerous, 

that you can’t spend the money because you can’t be in compliance? 

Mr. NORRIS. I would say to you, Madam Chairwoman, that our 

environmental engineering company that we have contracted with 

has estimated that for each individual home site, say, if you take 

Round I of the population, we have over 3,300 units. For each individual site, it requires a full environmental review. 

Each environmental review for each site could take over 3 

months. If you multiply that over 3,000 units, the time is inordinate. I mean, if you look specifically for Round I of our Small Rental Assistance Grant Program, it will take 11 months from beginning to end in that process. 

Chairwoman WATERS. How much CDBG money have you used to 

build any housing? 

Mr. NORRIS. We have given to date $1.5 billion in direct compensation to homeowners. Phase II of our housing property 

project— 

Chairwoman WATERS. No, I’m really asking quite another question. I am not going back to what we were talking about before. I 

am asking a question that is more related to what you are describing now. 

You are talking about having the ability to use CDBG to actually 

assist with construction of housing. Is that right? 

Mr. NORRIS. Madam Chairwoman, that is correct. 

Chairwoman WATERS. Okay, so I want to know, have you done 

any of this at all? 

Have you built or constructed or assisted in constructing any 

housing other than those two categories we talked about? 

Mr. NORRIS. We are at different stages through our different 

phases of employment. 

Chairwoman WATERS. Have any been completed? 

Mr. NORRIS. There are some public housing projects that are currently through the environmental process. 

Chairwoman WATERS. Have you completed any housing that you 

have been involved in direct construction of? 

Mr. NORRIS. Madam Chairwoman, I respectfully say that due to 

some of these projects— 

Chairwoman WATERS. Okay. I know the reasons. You have told 

me that, and I have to just rush a little bit, but I get it. 

You are saying that because of the onerous environmental requirements, you have not been able to construct any housing, but 

you have people who are living in the trailers now. 

How much money are you giving to the port? I know you have 

answered this before, but let’s hear it again. 

Mr. NORRIS. There is $600 million obligated to the port redevelopment. 

Chairwoman WATERS. $600 million that is obligated already to 

port? 

Mr. NORRIS. It depends on the definition of ‘‘obligated.’’ 

Chairwoman WATERS. I know what the traditional definition is. 

I guess what I am trying to look at is whether or not you have done 

25 

several things. Number one, in addition to the first category of assistance to homeowners, have you completed assisting those homeowners who did not have insurance? 

Most of them fall into lower-income areas. These are the ones 

who basically say they could not afford the insurance. I want to 

know what is going on there. How many people are left to be assisted? I want to know what the housing needs are, and have you 

completed any housing, because when, of course, we get the news 

that you are putting money into the port, we want to know what 

has been done with housing. 

Finally, I am going to wrap up because this member has been 

waiting. Those people whom you have assisted, say in Round I, 

who lived in flood areas or maybe didn’t live in flood areas and 

they were flooded, as I understand it, they were told that if they 

rebuild in those areas again, that they would not be eligible for any 

kind of assistance. 

Is that correct? 

Mr. NORRIS. Madam Chairwoman, that is not correct. 

Chairwoman WATERS. Would you correct me? 

Mr. NORRIS. We did place requirements for those individuals who 

received those grants that they mitigate against future storm damage, but they can use those resources to build back in that location 

but would required to meet the new flood elevation levels, new 

building standards, and so forth. 

Chairwoman WATERS. Okay, and they have been able to do that? 

Mr. NORRIS. Yes. And we are also providing another supplemental program on top of Round I and II that homeowners who 

qualify under Rounds I and II also qualify for an additional 

$30,000 to pay for the elevation costs, the additional cost of elevating due to the flood level. 

Chairwoman WATERS. How much have you spent on supplemental? 

Mr. NORRIS. Pardon me, ma’am. I’m sorry? 

Chairwoman WATERS. How much money have you spent in your 

supplemental program? And where did that money come from? 

Is that CDBG? 

Mr. NORRIS. That money came—it is CDBG money, and it also 

comes out of the Homeowners Assistance Grant Program. 

Chairwoman WATERS. The CDBG that funded the Homeowner 

Assistance Program—how many folks in Round I received supplemental money? 

Mr. NORRIS. Congresswoman, I do not have that specific number. 

Chairwoman WATERS. Okay, I would like to ask you to submit 

to us the number of people who received supplemental money in 

Round I and in Round II. We are going to ask also for how many 

applications you received in both of these areas. 

How many people in Round II have been waiting; and, also, we 

are going to ask some additional questions about housing. We can’t 

do it all today, but we are going to ask you to submit this in writing; and, we will formulate exactly how and frame these questions 

for you. But I get a sense of it right now, and I don’t have any more 

time. 

My time has long been up. So, thank you very much and I call 

on the gentleman from Missouri, Mr. Cleaver. 

26 

Mr. CLEAVER. Thank you, Madam Chairwoman. Let me go back 

to Mr. Norris, because I think that this could be a key. What is 

your definition of the word ‘‘obligated?’’ 

Mr. NORRIS. Well, the definition according to HUD of ‘‘obligated’’ 

from my understanding is that a grant agreement has been signed 

with the receiving entity. A grant agreement has not been signed 

in the case of the port. 

Mr. CLEAVER. So there is no obligation? 

Mr. NORRIS. A grant agreement has not been signed. No, sir. 

Mr. CLEAVER. Okay, so there has been no obligation. 

Mr. NORRIS. Again, my definition of obligation— 

Mr. CLEAVER. No. No, sir. 

Mr. NORRIS. The money is dedicated to the port recovery under 

the State’s comprehensive recovery plan. I would point out the 

State of Mississippi is building back more affordable housing than 

existed pre-Katrina. So, overall recovery, Congress provided us 

with the necessary resources to fully fund housing and to fully fund 

economic recovery, including the port. But the money is not technically obligated, no, sir. 

Mr. CLEAVER. So, there are no contracts? 

Mr. NORRIS. There are no contracts signed. We are in the process. 

Mr. CLEAVER. Are the contracts written? 

Mr. NORRIS. The first contract that we have is we are in the 

process of signing a contract for a program manager but no contracts have been signed. 

Mr. CLEAVER. So, if you sign that contract for project manager, 

does that wait on an obligation? Does that mean we are not obligated once you sign the contract or can you sign that contract without the obligation? 

Mr. NORRIS. Congressman Cleaver, I would need to follow up 

with you in writing on the specific definition of ‘‘obligated’’ and 

‘‘contract.’’ But we expect to sign a contract for program managers 

this week. 

Mr. CLEAVER. Is this similar to what ‘‘is’’ is? 

[Laughter] 

Mr. NORRIS. Congressman, the money is not obligated until a 

contract is signed. And I am telling you that we have not signed 

a contract on the port. 

Mr. CLEAVER. What needs to happen before you can sign a contract? 

Mr. NORRIS. From my understanding, before a contract can be 

signed, and I will need to follow up with details in writing, but an 

environmental assessment needs to be done. And the other steps 

that are required statutorily by the CDBG program before a contract can be signed and a grant can be officially obligated. 

Chairwoman WATERS. Will the gentleman yield for one point? 

Mr. CLEAVER. Yes. 

Chairwoman WATERS. Yes, because I thought I just heard you 

say that you discussed the definition of ‘‘obligate,’’ and I kind of get 

where you are going with this, but, you said something about the 

CBDG money that would be used for this. You are able to meet all 

the requirements of CDBG in order to move forward on the port. 

Is that correct? 

27 

Mr. NORRIS. Are you referring to the low- to moderate-income requirements? 

Chairwoman WATERS. I am not requiring doing anything in specific. What I am really asking is whether or not you have the same 

kind of impediment to building a port that you have to building 

houses. 

Mr. NORRIS. We absolutely have the environmental impediments 

to the rebuilding of them. 

Chairwoman WATERS. So you probably can’t get this done very 

easily? You have the same problems you had with building houses? 

Mr. NORRIS. Absolutely. We were mired in the same regulatory 

burdens of environmental that we are with our other programs. 

Chairwoman WATERS. Would it be wise to fight through the 

building of the housing before you commit to the port? I imagine 

that will be even more difficult and more complicated to be in compliance. 

Mr. NORRIS. Well, there are different circumstances. The housing 

program is difficult because of the thousands of different sites that 

are involved with the processing of the environmental. The port is 

more or less one holistic environmental assessment. Our housing 

programs are individual, environmental reviews for each individual 

site; so, I would say as far as it complicates things, exponentially. 

Chairwoman WATERS. I don’t know why it would. It seems to me 

that there would be any number of locations where you could get 

negative declarations in order to go ahead and build housing. I 

don’t think all of the land that you are thinking about using somehow or the sites are environmentally problematic to the point 

where you can’t build a house. 

I mean, you know, if I was a city, I could not overcome environmental impediments to building a house. I would feel very, very 

strange. So I could not help but raise a question in relationship to 

the ports. 

Thank you very much. I yield back. 

Mr. CLEAVER. I surrender. Thank you. I was going to get a headache, so I just quit. 

Let’s move on to—I have been a mayor, so I am very familiar 

with CDBG, very familiar. And one of the requirements, an extricable requirement, has always been that a public hearing must take 

place before any allocation of CDBG Block Grants. Is that right, 

Mr. Gimont? 

Mr. GIMONT. In the regular program that is correct; however, for 

the purposes of the Supplemental Disaster Recovery Funds, we 

waive the requirement with regard to a public hearing, preferring 

to utilize an alternative approach as permitted under the supplemental appropriation language. If you can turn the clock back to 

the days following the impact of the hurricanes, an awful lot of people had to leave their homes and their communities. They were not 

there physically to be able to attend a public hearing. 

So we established alternative requirements for the grantees to 

utilize for the purpose of obtaining citizen comments, such as posting the information on the Internet, publicizing it in papers for 

general circulation, and various approaches to ensure that the word 

got out with regard to the activities that are being proposed— 

Mr. CLEAVER. Yes— 

28 

Mr. GIMONT. And that the grantees wished to carry out. 

Mr. CLEAVER. Yes. We held a hearing in Mississippi. I know, I’m 

familiar with what happened early on. And, of course, in our conversations with citizens in Mississippi, they believed that there was 

a great deal of intentionality in soliciting information from the public the way you did because obviously if your home is being washed 

away, you didn’t run back in to get your computer, if you had a 

computer. Which means that essentially there was no contact with 

the public with regard to the issues. 

And then, would you agree that we issued more waivers in Mississippi than we have in all of the other southern States? 

Mr. GIMONT. I don’t know that we have issued more for Mississippi. We have generally tended to waive things across-the-board 

with regard to the various States, although some States have asked 

for particular waivers. I would be happy to supply that information 

to you with regard to particular waivers granted to the State of 

Mississippi. 

Mr. CLEAVER. My concern is that now in the aftermath of 

Katrina, we do have time to have public hearings, and I am wondering why we have not. 

Mr. GIMONT. One of the requirements of the supplemental appropriation language is that we reconsider waivers on the 2-year anniversary of their issuance, and we are now just beginning to come 

into those 2-year review periods. So we will be looking at each one 

of the waivers that’s been issued in making the decision as to 

whether or not it should be extended. 

Mr. CLEAVER. There is a belief in Mississippi—and this won’t be 

new to you—that the waivers and the dollars have been badly 

skewed toward wealthy homeowners. Is that a result of mass 

hysteria or people who just don’t understand the complexity of 

Community Development Block Grant, and all of the implications 

thereof? 

Mr. GIMONT. From where we sit, and the data that we are seeing 

submitted by the States, we feel that they are doing an adequate 

job in meeting the low- and moderate-income benefits requirements 

that are imposed upon them through the program. 

Mr. CLEAVER. Now, where did this research come from? 

Mr. GIMONT. We receive, as is noted in my statement earlier, 

quarterly reports from our grantees with regard to— 

Mr. CLEAVER. HUD grantees? 

Mr. GIMONT. From the States. So we— 

Mr. CLEAVER. I’m sorry, Mr. Gimont. The report came from— 

Mr. GIMONT. Again, we are getting a continual stream of information from our grantees, the States, with regard to the activities 

that they are implementing. 

Mr. CLEAVER. So do you really think that the State would send 

you a report saying, ‘‘We have responded to the low-income people 

of Mississippi poorly?’’ 

Mr. GIMONT. No. What they are required to do is to keep information with regard to the income levels of the beneficiaries of the 

activities that they are assisting. So as they are going out and their 

contractors in the case of Louisiana and Mississippi are concerned, 

they are tracking the income eligibility of the various people who 

are being assisted through these programs. 

29 

Mr. CLEAVER. Mr. Johnson, is that a public document? 

Mr. JOHNSON. The reports? 

Mr. CLEAVER. Yes. 

Mr. JOHNSON. Yes, sir. As far as I know. 

Mr. CLEAVER. And the report is based on some sampling of the 

people? 

Mr. JOHNSON. Yes. From the information that we get, and who 

is receiving funds, we know exactly what their circumstances are, 

and in Alabama, we are anticipating that we might get a 100 percent low- to moderate-income benefit, based on we’re doing. 

Mr. CLEAVER. Yes. Alabama has, I think, performed at a much 

higher level than Mississippi, and that is where my concern is that 

the people in Mississippi, the lowest, the most decimated parts of 

this community, the most devastated individuals, are the ones who 

have not received the assistance. And I don’t know what we can do 

with HUD to get that across, that receiving a report from the Mississippi State government may not be sufficient. 

I mean if there is widespread dissatisfaction—look, let me ask 

you: Do you believe, Mr. Gimont, that there is widespread dissatisfaction and disillusionment with the recovery program in Mississippi? 

Mr. GIMONT. Again, from what we are observing, the States are 

doing a good job of delivering this money to the homeowners who 

were impacted by the storm. When we look at the State of Louisiana, I believe there were around 105,000 homeowners assisted at 

this point. When we look at the State of Mississippi, it is 20,000 

homeowners assisted to this point. We think these are good results, 

good outcomes. 

Mr. CLEAVER. But are there— 

Mr. GIMONT. Are there people who don’t feel that they have gotten what they deserved or should have received? Certainly. And we 

see a stream of mail to that effect and we work with the States to 

address these issues. 

Mr. CLEAVER. How? 

Mr. GIMONT. We return it to them, and say, ‘‘Please look at this 

again, and then report back to us with regard to your reevaluation 

of the claim being made by this individual.’’ So we are watching 

this. I mean we also monitoring the States on a very regular basis. 

We will probably have 20 different monitoring trips to these five 

States in the course of this fiscal year, where we are sending out 

teams of 5 to 7 people to spend a week in their offices and review 

their files and talk to their contractors about what they are doing 

and how they are implementing the programs, and who is benefitting. 

We are going back, as we do in the regular CDBG program to 

check that they are doing what they said they would do. 

Mr. CLEAVER. One final question. Well, actually I have 36 more 

questions, but I will just ask one: Are you satisfied that everything 

that can possibly be done in Mississippi is being done to provide 

the swiftest aid to the victims of Katrina and Rita? 

Mr. GIMONT. Would we like to see more progress on some fronts? 

Certainly. Is it realistic to expect that? That is a hard judgment to 

make at this particular point in time. I think that these homeowner compensation programs have probably been the easiest 

30 

things to stand up for the States, that setting up the process, evaluating the applications, and cutting checks to this point, relatively 

speaking. 

We are now beginning to get into the ground game of recovery 

on the Gulf Coast, the hard construction work. Doing things such 

as rebuilding housing, rebuilding the public housing, doing the infrastructure work. These things are just coming on-line now. And 

we would expect to see significant progress on those program components over the next several years. This is going to be a long-term 

effort on the Gulf Coast. 

Mr. CLEAVER. Just a second. I thought I would catch the Chair 

talking, and I could slip in another question. 

If you were a Member of Congress and people all over this Nation are angry because they believe that our response on the Gulf 

Coast is pathetic and if all of the people around the country are 

angry and it generates anger towards the United States Congress, 

which is what’s happening—people are angry. 

I mean the percentage of Americans dissatisfied is at an all-time 

historic high, 80 percent. And the rise began—if you go the Gallop 

& Harris people, it began with the response to Katrina; 80 percent 

of the American public says that the Nation is moving in the wrong 

direction. 

Katrina and Rita started it. And when people look at television 

and see that much of the devastation has not been addressed, they 

become angry. They think we live in the world’s only superpower, 

the most industrialized nation on the planet. There is a catastrophe 

now in Burma and it looks like Katrina, in the aftermath of 

Katrina, what has happened in Burma, and they are thinking, you 

know, we’re not going be able to fix our own country. People are 

angry. 

And so when they get angry, I have no other recourse but to express the anger coming from the district I serve. And I think they 

believe that the money—and particularly when they read—I’m 

through, Madam Chairwoman—when they read articles which suggest Mississippi’s use of waivers to redirect funds designated for 

low-income Katrina victims, and the article goes on to talk about 

how helping people of low- to moderate-income seems to be on the 

back burner in Mississippi. 

And so, well, I mean, you know, you are shaking your head, but 

there is nothing that has been said here today that convinces me 

otherwise. 

Thank you, Madam Chairwoman. 

Chairwoman WATERS. Thank you very much. 

I would like to thank all of the members of this panel who have 

participated today, and I’m sorry we didn’t have the opportunity to 

talk more with Texas and Florida. We know that Florida has been, 

as you described so well, the victim of these natural disasters for 

a long time. You can’t get out from under one before you get another one. And what we need to do is just keep trying to get as 

much assistance to you as possible. We don’t have any real questions about how you have utilized these. Unfortunately, our questions fall to those who have been responsible for the expenditures 

that we sent to them in Louisiana, and Mississippi in particular. 

31 

We didn’t talk a lot about Louisiana today. But the complaints 

continue to be what they were early on: Number one, that there is 

every opportunity to squeeze the homeowners under the Road 

Home Program, and instead of them ever being able to get the 

maximum or near maximum, people are walking out with, you 

know, $20,000 or $40,000, way below the claims are that they’re 

putting in. That is an ongoing complaint. 

And you have a backlog of people who have been in process for 

well over a year to a year-and-a-half, and are still waiting to hear. 

So before you leave, Mr. David Bowman, when are you going to 

clean up the backlog in Louisiana? And why are people complaining about being squeezed and not getting reimbursed adequate amounts that they think they are eligible for? 

Mr. BOWMAN. Well, I think on your first point, I would like to 

point out that the State is streamlining and taking over the entire 

appeals process. 

Chairwoman WATERS. I can’t hear you. 

Mr. BOWMAN. The State is in the process of completely redesigning and taking over the appeals process from the contractor. So 

we acknowledge that has been problematic, and we cannot make 

excuses for it, however, moving forward, we are streamlining and 

taking that process over, so that we do not continue to have these 

problems. 

To address some of the questions from earlier, though, as far as 

serving low- to moderate-income versus wealthier clients, most of 

our complaints actually come from those who are not LMI; and in 

fact the average award for LMI, because of our affordable compensation grant program, is actually higher than the average grant 

for the wealthier clients. Part of that is because of the insurance 

capacity that the wealthier clients tend to have as well. But the additional affordable compensation grant has boosted those LMI persons with more resources to rebuild, so they actually have higher 

average grant awards. 

Chairwoman WATERS. We have more questions, and we will send 

them to you in writing. As a matter of fact, we are going to ask 

for a report. You must have something available to talk about what 

has been done today. But we will send a letter to you to request 

that information. 

If there are no more questions of this panel, we are going to dismiss the panel. I thank all of you for your testimony today. 

The Chair notes that some of our 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. 

Thank you very much. The panel is now dismissed, and I would 

like to welcome our second panel. Thank you. 

Hello, Mr. Craig, is it ‘‘Bab’’ or ‘‘Baab?’’ What is the correct pronunciation? 

Mr. BAAB. ‘‘Baab.’’ 

Chairwoman WATERS. ‘‘Baab?’’ Thank you very much. Please 

come forward. Mr. Baab is a Katrina advocacy fellow at Alabama 

Appleseed Center for Law and Justice, Inc. 

32 

Our second witness will be Ms. Leslie Powell, senior attorney, 

Legal Services of North Florida. 

Our third witness will be Mr. James Perry, Louisiana Housing 

Alliance, Greater New Orleans Fair Housing Action Center. 

Our fourth witness will be Mr. Derrick Johnson, president, Mississippi State NAACP. 

Our fifth witness will be Mr. Reilly Morse, Equal Justice Works 

Fellow, Mississippi Center for Justice. 

And our sixth witness will be Mr. John Henneberger, co-director, 

Texas Low-Income Housing Information Service. 

Without objection, your written statements will be made a part 

of the record. You will now be recognized for a 5-minute summary 

of your testimony. 

Thank you very much. 

Mr. Baab? 

STATEMENT OF CRAIG H. BAAB, KATRINA ADVOCACY FELLOW, 

ALABAMA APPLESEED CENTER FOR LAW & JUSTICE, INC. 

Mr. BAAB. Thank you very much for convening this hearing. Mr. 

Cleaver, thank you for joining us, also. You are one of the few people on the Hill who has not allowed Katrina fatigue to get in the 

way of saying and doing the right things and keeping your colleagues and the rest of us in the public sector working on this, and 

we are forever grateful for that. 

The National Office of Appleseed and the centers in Alabama, 

Georgia, Texas, and Louisiana published a sweeping study a year 

ago, a continuing story on the ongoing struggles of Hurricane 

Katrina evacuees, and we are using that as instructive in helping 

us wade through the CDBG problems we are facing right now. 

I join my colleagues on this panel in commending you for convening this hearing, not as focused on one or two States, but on 

the entire region, which is to say that Katrina didn’t take a Stateby-State look; it took a regional look. And as Mr. Green pointed out 

earlier, if we don’t respond regionally, then we are going to waste 

a lot of time and money. 

It is important also at this point, I think, to relive the detrimental practice witnessed since the storms of one State pitted 

against another State, and one county pitted against another county. I don’t really care, and I don’t think any of us here really cares 

if Mississippi got more or less than some other State. Nobody even 

knows Alabama is around. 

The issue is that none of us got all that we needed, and if we 

all don’t work together to try to get more that we need across the 

coast, as the chairwoman pointed out a minute ago, dealing with 

Mississippi, then we are not doing our jobs. 

Perhaps the time has arrived for local, State, and national officials to focus closer attention on the regional rebuilding needs of 

post-Katrina, and less on what they bring home to their people. 

Katrina and Rita paid scant attention to State or local political 

borders, and for us to continue to do so simply perpetuates the 

storm’s impact on all of the survivors. 

Senator Shelby, our Ranking Member in the Senate, I think summarized both what we’re doing here, and the problem, very well 

last September 25th, when he said that the way to honor the 

33 

memories of nearly 2,000 souls who perished in Katrina’s wrath 

was by ensuring that the Gulf Coast was rebuilt not as it was, but 

as it should be. 

He had it just right, and Senator Sessions and others have 

helped us also. But the reality in Alabama, and I want to begin 

with this right now, is that Mobile County has received $18 million 

in CDBG money specifically targeted for house rebuilding. Not a 

single nickel has gone into building a house that somebody has 

moved into yet, and it is almost 3 years later. 

Procedures are chaotic, the process by which everybody is working is not open, and it is very difficult for anybody to know what 

is going on. And because, as more time goes on and little happens, 

there is less willingness to come forward because everybody, of 

course, is reluctant to talk about what has not worked. 

The only thing I would like to point out in the context of my 

predecessor who is here—and we are just very grateful for Mr. 

Johnson of ADECA to be here, and in particular I want to get it 

on the record, because he didn’t say so, that he is asking for over 

$100 million in additional money. It is essential that we have it. 

And I am going to ask for a realistic number of $237 million. These 

are unmet needs. 

And these go to the following—and I’ll try to do this very quickly, 

because the chairwoman wields a heavy hammer up there. 

[Laughter] 

Mr. BAAB. The points that I want to make, and we can get back 

to if you wish, are the following: Number one, that the absence of 

and the need for serious in-place plans outlined by Congress and 

implemented by HUD to change how emergency CDGB funding is 

budgeted and allocated, and to do so transparently with all interested parties in advance, you can set the guidelines. Because what 

is going on in the past with CDBG frankly has little relevance to 

emergency CDBG functioning, and that ought to be in place. Failure to do this in Washington ensures that comparable poor planning and waste at the State and local level will be guaranteed. 

Number two, Congress should direct, and HUD should implement, that clear comprehensive needs assessments in emergency 

situations be undertaken. Not the usual thing, but it has to be very 

explicit, and HUD has to oversee that. 

Number three, we have urged that you give serious consideration 

into looking into the benefit of maintaining emergency CDBG implementation at the State level and not at the local level. Frankly, 

entitlement communities who receive CDBG funds may do well on 

that. They have no competence to deal with this problem. I think 

we have seen it in Mississippi, or in Texas anyway, and I must tell 

you that we see it very clearly Alabama. It is not that State governments necessarily are going to be better, but in this situation, 

they are going to be far better. 

Congress and HUD should look into the practice in Alabama, and 

I want to stress this as much as I can, that is not the case in other 

States. And that is that in reviewing people who apply for grants, 

prior condition of their home—and these are low-income people— 

49, 39 percent of the people who applied for money in Alabama 

have $15,000 annual incomes, and they are being denied money because they have prior repairs on their houses that they didn’t do, 

34 

and CDBG folks say, ‘‘Well, if it was before the storm, we’re not 

going to touch it.’’ It is outrageous and it is primarily focused on 

lower-income people. 

Finally, I would like to say that, as you know in a lot of States 

and particularly in the coastal areas, heir property is a serious 

problem among lower-income people. There are 25,000 families 

New Orleans with heir property problems. We have many throughout all other States. They are all lower-income folks, and with heir 

property, they cannot qualify to receive these grants. 

We would urge that in the future that there would be standby 

authority either in HUD or in the Legal Services Corporation to 

make supplemental appropriations to Legal Services lawyers to assist with this process. 

And I need a breath. Thank you. 

[The prepared statement of Mr. Baab can be found on page 56 

of the appendix.] 

Chairwoman WATERS. Thank you very much. 

Ms. Powell? 

STATEMENT OF LESLIE N. POWELL, SENIOR ATTORNEY, 

LEGAL SERVICES OF NORTH FLORIDA, INC. 

Ms. POWELL. Yes. Thank you, Chairwoman Waters, for convening 

this hearing and for inviting me to participate. 

As a Legal Services attorney, I work directly with low-income, 

extremely-low-income individuals who are directly affected. Specifically, in 2004, Hurricane Ivan hit Pensacola directly, and that is 

where my office is located. I have also practiced in Miami and 

worked with colleagues there. We have a statewide effort of Legal 

Services that we collaborate and work together to try and solve 

problems statewide. 

And based on that, I feel like I have a relatively strong perspective as to how the recovery efforts have been handled in Florida as 

well as the CDBG monies, and I would like to say that overall, it 

has been a success. And as the prior panelist from Florida suggested, there was a Hurricane Housing Workgroup that was convened by then-Governor Bush. And he pulled together a group, a 

very diverse group, a very broad-based group of individuals. He 

didn’t simply rely on government officials and local entities. Consumer advocates were brought in, housing advocates, legal service 

advocates, and business owners were all brought in to study the 

statistics. 

And to hit on one in particular, in 2004, 74 percent of those people who were deemed to have inadequate insurance had incomes of 

less than $30,000 a year, 74 percent. So it was very clear, based 

on the statistics that were compiled by that workgroup, that lowincome people, extremely-low-income people needed to be assisted 

with these funds, and in the wisdom of Lt. Governor Jennings, who 

was the chair of that workgroup, that was the focus. 

While not all the recommendations of that workgroup were taken 

on, by coming to that conclusion that low-income people needed to 

be the focus, that is where the money has gone. And they have benefitted extremely from this. 

That lesson was applied again in 2005, when those hurricanes 

hit Florida, and hopefully those lessons will continue to be applied 

35 

in years to come. In fact, the State has mandated that each municipality have a community plan, a developmental plan of to how 

these resources will be used in the future, including land use plans 

as to future land use. 

So those are very important components, not just thinking about 

what do we need to do now to fix the immediate problem, but planning ahead. A lot of these funds have gone to mitigation, not simply to rehabbing the homes that were damaged, but to strengthening the homes that were not damaged. 

The issue that was brought up by my fellow panelist from Alabama regarding heir property is a significant one, as suggested. 

Those who do not have clear title cannot get FEMA assistance, cannot get rehab assistance, and cannot get insurance, for the most 

part. This is a significant issue. Substandard housing is a significant problem. 

And we are working to try to resolve those. Quiet title issues are 

very time consuming. Those cases can take a long time and a good 

bit of money. And I echo that funding for that, and to try to plan 

ahead so that they can get their own insurance and mitigate on 

their own would be beneficial. 

Community preparedness is a large and significant focus. To 

again echo what has been stated already, community and faithbased groups working together have formed coalitions. This was 

mandated by the State government that these coalitions be formed, 

and they are focusing on, right now, disaster preparedness. Hurricane season is right around the corner. Let’s talk about it now, let’s 

figure it out. And as that happens year ’round, this has helped 

these communities to be better prepared. In fact, I think the 2004 

efforts made us more prepared for 2005. And funding should continue to be provided to allow for those efforts to continue. 

In essence, while these funds were emergency funds, there will 

always be a disaster somewhere, and to have this money available 

and to know that it is available is essential towards community 

planning. We don’t know where the next hurricane is going to hit. 

We don’t know where the next disaster is going to hit. But encouraging communities to start with this sort of development in advance has certainly aided our clients since 2004, to some degree, 

I wish it had happened sooner, but it is benefiting the communities 

now, and I hope if there is a lesson to take from it, it is that while 

we can talk about more money when the emergency actually hits, 

preparing for it is certainly something that needs to happen, including ensuring that there is money for Legal Services and other 

advocates to be able to provide these services; and fortunately, we 

were able to receive that. 

Thank you. 

[The prepared statement of Ms. Powell can be found on page 244 

of the appendix.] 

Chairwoman WATERS. Thank you very much. 

I am going to ask Mr. Cleaver if he will take the chair while I 

go to the Floor on our housing bill and speak for a few minutes. 

I will return as quickly as I possibly can. 

Mr. James Perry from that Louisiana Housing Alliance is next. 

Thank you very much. 

36 

STATEMENT OF JAMES PERRY, EXECUTIVE DIRECTOR, 

GREATER NEW ORLEANS FAIR HOUSING ACTION CENTER, 

AND PRESIDENT, LOUISIANA HOUSING ALLIANCE 

Mr. PERRY. Thank you, Congresswoman Waters and Congressman Cleaver, for the opportunity to testify, and also thank you for 

being great champions for the victims of the 2005 hurricanes. 

There are a few things that I want to talk about. The first is regarding the three most important aspects, I think, of the CDBG 

program: First, to assist low-income Americans; second, to cause 

community development in poor communities; and finally, to affirmatively further fair housing. 

I regret to inform you that the CDBG allocations into the Gulf 

Coast have failed, really, on all three of these fronts. 

The first issue in the failing is about the lack of oversight. Members of Congress will recall that CDBG funding was allocated to 

the Gulf Coast communities, and many of the program requirements were stripped. Particularly instead of 70 percent of funding 

being required to go to low-income residents, only 50 percent of 

funding was required to assist low-income families. The result is 

that the majority of the CDBG funding that has been used to assist 

people in Louisiana has gone to assist middle- and upper-income 

families rather than low-income citizens. 

For example, the State of Louisiana through its Road Home Program and its allocation in CDBG money has used 86.2 percent of 

the money to help people in homeownership programs regardless of 

the income of the citizens. Only 13.1 percent of the money that 

they allocated went to affordable rental housing. But even when it 

comes to that 13.1 percent, they use it in the small rental program. 

They tried and got applicants for 12,800 units, but to date, they 

have only actually repaired 13 units with that funding. And that 

is particularly troublesome when you consider that the State estimates a need for 60,000 to 80,000 additional units to be constructed in Louisiana. 

It is also troublesome because Unity for the Homeless, a New Orleans nonprofit, estimates that our homeless population in the City 

of New Orleans has doubled from 6,000 to 12,000 citizens, which 

clearly indicates a need to use Community Development Block 

Grant funds for low-income citizens. The fact, however, is that they 

are not being used to benefit low-income citizens. 

I would also argue that Community Development Block Grant 

funds are not being used to affirmatively further fair housing. I 

will give an example in the Road Home Program, and it has everything to do with how the program values properties. Members 

know that there has been a pattern of historic segregation in communities of color. The result is that properties have been valued at 

lower amounts. 

So what happens is that Road Home grants are paid out for the 

most part based on the property values of properties, which means 

that communities of color are going to get lower and smaller grant 

amounts. Instead, these grant amounts should be paid in value 

based on replacement and repair costs. Not doing this fails to affirmatively further fair housing and of course doesn’t meet the requirements of community development block grant money. 

37 

I would also note that there has been significant discrimination 

by municipalities that receive CDBG funding in the New Orleans 

and Louisiana area. Specifically, a lot of the issue comes up when 

CDBG money is paired with the low-income tax credit financing 

tool. 

In Kenner, the City passed a moratorium on the construction of 

any multi-family housing. And they did so after residents raised 

concern about the redevelopment of a complex that was occupied 

mostly by Latino residents in the community. And so they forbid 

construction of any multi-family housing. Of course, this makes it 

impossible to provide low-income rental opportunities for families 

using CDBG funding. 

In Jefferson Parish, the Parish passed an ordinance that asked 

that the tax credit not be used in their community, and then they 

used zoning tactics to kill a development by the Volunteers of 

America. And as a result, again, low-income residents missed out 

on an opportunity for housing. 

The examples are numerous, and I could go on for literally hours 

about the different examples of discrimination that has limited the 

opportunity to create affordable housing opportunities, both 

through CDBG funds and the low-income tax credit. 

The fundamental issue for Congress is this: I think that we need 

more oversight in terms of how the funding is used. We have to 

make sure that Congress can ensure that grantees who get CDBG 

funding have to use it to affirmatively further fair housing and 

that they have to use it to assist low-income residents. I think the 

trend that we have seen today from the earlier panel and that you 

hear in this panel is that consistently CDBG money post-storm has 

not been used for low-income residents; instead it has been used 

to assist middle- and upper-income residents. And I think that does 

not embody the intent of the program. I would ask that Members 

of Congress do everything possible in order to make sure that these 

funds go to assist low-income residents. 

Thank you. 

[The prepared statement of Mr. Perry can be found on page 235 

of the appendix.] 

Mr. CLEAVER. Thank you, Mr. Perry. 

Mr. Johnson? 

STATEMENT OF DERRICK JOHNSON, PRESIDENT, MISSISSIPPI 

STATE NAACP 

Mr. JOHNSON. Thank you for allowing me to speak here today. 

After surveying the Mississippi Gulf Coast and rural areas affected by Hurricane Katrina, and relief following the storm, we 

identified a pattern where African Americans in low-income communities were not receiving support from the various agencies 

charged with that responsibility. As a result, the Mississippi 

NAACP began to actively monitor State and Federal recovery programs, advocating to ensure that the recovery process is equal for 

all communities affected by the hurricane. All communities affected 

by the storm have a right to a full recovery, in our opinion, but in 

reality, discriminatory and inequitable governmental policies are 

impeding full recovery for many Katrina survivors. 

38 

Mississippi, for example, has received $5.4 billion in Federal 

CDBG funds for disaster recovery. Congress required Mississippi to 

spend at least 50 percent of the CDBG funds received on persons 

of low and moderate income. However, Mississippi requested $4 billion in waivers from this requirement. We are the only State in the 

country to have requested and received such extraordinary waivers. 

It is outrageous that the Federal Government allows the poorest 

State in the country to abdicate its responsible to assist the citizens 

most affected by Hurricane Katrina. These waivers have had a very 

real impact on Mississippi’s poor communities. 

For example, to date, the Governor’s office has not implemented 

a single plan to assist home renters. To date, almost 10,000 families representing 27,000 Mississippians still live in FEMA housing, 

of which 56 percent of them were renters before the storm. Unfortunately, for many of these families, there are no affordable rental 

units currently available. 

Two-and-a-half years after the storm, affordable rental units that 

were damaged or destroyed have not been rebuilt, and the rent 

costs for the rental units that were not damaged have doubled or 

tripled. 

For example, the fair market value for rent increase for an apartment on the Mississippi Gulf Coast went from $592 before Hurricane Katrina to $811 after the storm. When comparing home owner 

and rental under Mississippi’s plan, Mississippi has paid out over 

$1.2 billion to homeowners, but has not opened a single CDBGfunded financed rental unit. 

Several factors contribute to Mississippi’s failure to address affordable housing needs. First, the amount of CDBG funds provided 

was greater than Mississippi’s total State budget. These funds are 

completely administered by the executive branch, with no provision 

under State or Federal law for State legislative input or oversight. 

Without meaningful checks and balances, contracts were awarded 

to private companies to administer CDBG funds, including questions about lucrative contracts awarded to sitting State’s legislators. 

Accountability includes ensuring that decisions are made fairly 

about who receives CDBG funds on a level playing field. Many of 

the waivers requested and received were for private industries or 

economic development. 

For example, the Mississippi Development Authority, MDA, 

which is charged with the responsibility of overseeing CDBG funds, 

requested and received a waiver to transfer $600 million to the 

State Port of Gulfport. This waiver is highly questionable, particularly because MDA itself has the ownership and operational role 

with the State Port at Gulfport. MDA also requested and received 

a waiver to award to a private south Mississippi utility company 

in the amount of $300 million. What is most troubling about MDA’s 

decision to request waivers for the State Port of Gulfport and the 

power company is the fact that all three entities, MDA, the State 

port of Gulfport, and the power company, are all represented by the 

same law firm. 

Even if the members of that firm act in full compliance with 

legal ethical standards without any legislative oversight, input, or 

39 

the necessary checks and balances in place, the needs of low- and 

moderate-income families were never fully considered. 

Second, the general public is left in the dark regarding the 

State’s recovery process. In the first legislative session following 

the landfall of Hurricane Katrina, the legislature passed a bill to 

require State reporting of key information regarding the implementation of CDBG funds received. In response, the Governor vetoed 

the bill, stating that MDA will exceed the level of disclosure, publishing on the Internet the average grant award by income range 

and geographic area. We have not seen such publishing of information on the Internet. However, the Governor has failed to release 

any significant disclosures regarding how funds are spent. As a result, the public has been denied access to accurate timely information on how Federal funds are being spent to benefit low- and moderate-income families. 

In closing, in response to the questions raised in the invitation 

for this hearing, this State’s affordable housing needs have not 

been a priority as evidenced by the fact that there have not been 

any funds available to assist renters or to repair and rebuild rental 

units to pre-Katrina levels. Recipients are at a greater disadvantage than any other State because we have not enacted a State fair 

housing act. This reality makes it difficult to comprehensively 

evaluate the needs of low-income communities of color, the barriers 

to housing, and how to overcome them. 

Two recommendations I want to leave with the committee today 

are: First, Federal CDBG allocations should require States to have 

legislative input and oversight to ensure the proper checks and balances; second, all States should be required to track expenditures 

of CDBG funds by zip code, and data collection should be made 

public so the success of CDBG funds can be properly measured and 

timely evaluated. 

On March 15th of this year, the State cut-off Phase II of its program, the only phase of its program that supported low- and moderate-income families. Despite the fact that they were still receiving 30 to 40 applications weekly, they cut off the time for the program. We respectfully ask this committee to seek an extension of 

that program to ensure additional individuals who were impacted 

by the storm, who fall in the category of low- and moderate-income 

individuals, be properly supported in that recovery effort. 

Thank you. 

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

148 of the appendix.] 

Mr. CLEAVER. Thank you. 

Mr. Morse? 

STATEMENT OF REILLY MORSE, SENIOR ATTORNEY, KATRINA 

RECOVERY OFFICE, MISSISSIPPI CENTER FOR JUSTICE 

Mr. MORSE. Representative Cleaver and Chairwoman Waters, 

thank you for the opportunity to address you. 

I will summarize my written responses to the questions you 

posed in the invitation. 

First, the affordable housing needs of Mississippi have not been 

adequately addressed with emergency CDBG funding. All of the 

State’s CDBG and tax credit programs taken together, Mr. ChairVerDate Aug 31 2005 14:32 Aug 20, 2008 Jkt 043696 PO 00000 Frm 00047 Fmt 6633 Sfmt 6633 K:\DOCS\43696.TXT TERRIE
40 

man, ultimately will restore little more than half, or about 48,000, 

of all housing, not just affordable housing, with major-to-severe 

damage. That’s about 90,000 units, contrary to what Mr. Norris 

from—State testified. This is not adequate, sir. As of December 

2007, Mississippi had reported to HUD that it had spent $1.8 billion out of its first $5.05 billion allocation; but only 13.2 percent of 

that has benefitted low- and moderate-income persons; 13.2 percent 

is not adequate. 

Congress expected Mississippi to spend at least 50 percent. Not 

a single affordable rental unit has been opened using CDBG funds 

earmarked for public housing, small rentals, or workforce housing. 

There will not be a doubling of public housing, and as the representative from Mississippi said, there will barely be a one-for-one 

replacement under the current plans. And that’s according to other 

State writings, which are cited in my written testimony. 

Second, Mississippi’s use of emergency CDBG funds has not affirmatively furthered fair housing. Lower-income Mississippi renters include especially high numbers of persons protected under the 

Fair Housing Act, due to their race, sex, disability, or household 

status. Mississippi’s rental program delay is protracted. We are 

into our 33rd month post-Katrina, and none of the CDBG-funded 

rental housing programs has produced results. 

There are 8,000 residents in FEMA trailers, probably another 

8,000 pending in long-term recovery groups—16,000 households 

right now awaiting a solution. 

This inaction does not affirmatively further fair housing. South 

Mississippi civic structures and public works are rebuilt better and 

bigger than before. But Mississippi’s use of CDBG funds so far has 

not affirmatively addressed a decades-long pattern of inequitable 

development in historically segregated communities. Mississippi’s 

extensive demands for waivers for low- and moderate-income requirements by definition does not affirmatively further fair housing. It does precisely the opposite. Third, Mississippi’s transfer of $600 million from housing to the 

expansion—this is not the restoration—the expansion of the State 

port at Gulfport—will make it even more difficult to provide affordable housing. 

Mississippi’s existing affordable housing programs will not have 

enough money to fill in the gaps in the current programs. This is 

described in my written responses. 

Instead, these funds will be diverted to a record-breaking investment in a State enterprise agency to realize a 20-year master plan 

conceived 2 years prior to Hurricane Katrina. This $600 million 

does not buy mere channel improvements; it creates a controversial 

new land form in the Mississippi sound, an inland terminal and 

causeway that will import traffic, pollution, and hazards to north 

Gulfport, an African-American community. 

And finally, it will open up 60 waterfront acres in the center of 

the port for a luxury hotel and casino complex known as the Village at Gulfport. Mr. Chairman, the port has $108 million in insurance, tens of millions in FEMA funds pending settlement of the insurance claim. 

And if you will look at Exhibit J, on page 4 of my testimony, you 

will find the cite for $82 million in unincumbered cash, far more 

41 

than adequate to cover the estimated $50 million in damages to a 

port with an asset value of $127 million at the time Hurricane 

Katrina struck. This is an unacceptable use of emergency CDBG 

funds. 

Fourth, a summary of recommendations: Make rebuilding rental 

housing as high a priority as assisting homeowners; require some 

recovery funds to be used specifically to correct persistent disinvestment in minority neighborhoods; require States early in the 

process to publish housing damage estimates with sufficient information to plan adequate recovery for protected classes under the 

Fair Housing Act—Mississippi announces today 33 months into the 

storm that they are doing a request for a proposal to do such a 

thing. This comes terribly late—eliminate, or more severely restrict 

the use of waivers; require the State to present a comprehensive 

plan instead of a succession of partial plans; require Federal uniformity in multi-State disasters, including per-capita funding, common eligibility standards, and common rules on deductions; condition local disaster relief upon commitments by localities to prevent 

NIMBYism; pursue unfair housing practices aggressively, using 

HUD and the Department of Justice; and finally, urge the incoming 

HUD Secretary to reconsider the approval of the port diversion, 

and put that money back into the housing recovery where it is so 

badly needed. 

Thank you. 

[The prepared statement of Mr. Morse can be found on page 153 

of the appendix.] 

Mr. CLEAVER. Thank you, Mr. Morse. 

Mr. Henneberger? 

STATEMENT OF JOHN HENNEBERGER, CO-DIRECTOR, TEXAS 

LOW INCOME HOUSING INFORMATION SERVICE 

Mr. HENNEBERGER. Thank you, Representative Cleaver, and 

thanks to Chairwoman Waters and the members of the subcommittee for inviting me to testify today about the status of the 

disaster recovery program in Texas. 

I am John Henneberger, the co-director of the Texas Low Income 

Housing Information Service. We are a policy research advocacy organization that supports low-income Texans’ efforts to achieve the 

American dream of a safe, decent, and affordable home. My organization doesn’t represent any one sector of the housing industry, but 

rather we work on the behalf of and in the interests of low-income 

people who need affordable housing. I have detailed eight specific 

recommendations in my written testimony, and I know that I do 

not have time to summarize those here. But I will talk about a few 

of them. 

Texas has the highest population of Hurricane Katrina evacuees 

of any State other than Louisiana. An estimated 100,000 poor 

Katrina evacuees remain in Houston alone, and there are 14,000 

families in Texas being assisted through the HUD Disaster Housing Assistance Program. Already, these families are responsible for 

a portion of their rent, and as months pass, they will be responsible 

for an increasing amount of that rent, and there is no other assistance available for this population, a population so poor that 7 in 

42 

10 of them, when they arrived in Texas as evacuees, did not have 

a savings account or a checking account. 

Given the severely inadequate levels of CDBG funds that have been appropriated to Texas, the State has committed a mere $60 

million in funding to house the entire Katrina evacuee population 

in our State. This amounts to about $400 per evacuee. We estimate that Federal hurricane relief has fallen about $700 

million short of what we need in Texas to house on a long-term 

basis the Katrina evacuees, many of whom were renters and will 

be receiving no assistance through the homeowner programs in 

Louisiana and Mississippi. 

As a long-term solution, Texas cities with large evacuee populations desperately need additional Section 8 housing choice vouchers. In Houston alone, 42,000 households are on the Section 8 waiting list, and the need for assistance among evacuees has greatly 

enhanced this demand. 

Without substantial additional Section 8 housing vouchers, cities 

in Texas, especially Houston, are facing being crippled with homelessness, and with families living in grossly substandard and overcrowded housing, as their disaster housing assistance program increases to the point where they can no longer afford to pay the 

rent. 

Congress needs also specifically to provide Texas with a supplemental appropriation of low-income housing tax credits and a temporary waiver for those tax credits, so that the State government 

will be allowed to deeper target the subsidies in order to house 

families who need very low rents, such as the Katrina evacuees. 

The situation we face with Katrina evacuees is dire, and in a 

similar manner, we have a dire situation from those in our State 

who suffered from Hurricane Rita. 

There are 75,000 homes that were damaged or destroyed by Hurricane Rita. Those are homes suffering what the Texas Governor’s 

office estimates to be significant damage or total destruction. 

With the funds that HUD has made available, of those 75,000 

households, most of whom are low-income, at most 4,000 households will be assisted: 4,000 of 75,000 households assisted in Texas. 

This amounts to 6 percent of the owner-occupied households in 

Texas that the Governor’s office estimated suffered major-to-severe 

damage. 

I have documented in detail in my testimony the many problems 

that Texas has had with its disaster housing program. But I have 

to say this: I think we are in a little better situation today than 

our colleagues in Louisiana and Mississippi in terms of our State’s 

administration. The State’s program to provide Rita evacuees as 

now designated is probably the most effective and efficient program 

that can be operated. Within the context of the severe funding constraints that we have, we understand we are only going to help a 

very small fraction of the households who lost their homes to the 

hurricane. But within that context, the program that the State has 

designed, I believe, is reasonable. 

We will provide a maximum of $40,000 in rehabilitation and the 

State will oversee the rehabilitation, and we will provide between 

$60,000 and $75,000 for housing construction for replacement housing. 

43 

Now, this is a far cry from the benefit levels that our colleagues 

in Louisiana and Mississippi are theoretically, at least, eligible to 

be able to receive for their low-income evacuees. 

We estimate that in order to substantially impact the Rita popu- lation, we need $500 million of additional assistance. And further, 

we have a severe problem, because our State has chosen to provide 

assistance directly to the evacuees, with this problem of duplication 

of benefits under the definitions of the Stafford Act. We desperately 

need a waiver of the duplication of benefits clause in the current 

act. And if we cannot get that, we are going to be facing a situation 

where we are going to pass over most of our low-income population, 

and end up only being able to assist the higher-income populations 

who suffered damage from Rita. 

Mr. Chairman, I see that my time is up, so I will conclude by 

basically saying that I think it’s incumbent upon those of us who 

have lived through this—and it has been tremendously wrenching 

for the people who lost their homes—that we make sure that this 

never happens again. We have to make sure that the status quo 

programs that FEMA puts in place and that HUD has put in place, 

which rely on temporary trailers and which rely on short-term solutions is not the program that we apply in the future. We have 

to learn from this terrible catastrophe that we have been through, 

and we have to begin immediately to construct an alternative and 

a better system, which recognizes that the housing needs of lowincome people impacted by disaster are substantially different than 

what the FEMA regulations intend to provide. 

Thank you very much. 

[The prepared statement of Mr. Henneberger can be found on 

page 92 of the appendix.] 

Mr. CLEAVER. Thank you, Mr. Henneberger. Let me just say that 

the chairwoman is handling housing legislation on the Floor at this 

time, and she probably is the toughest proponent on this Hill for 

housing for low- to moderate-income Americans, so I just wanted 

to make sure you understood that is what she is doing, even as we 

continue this hearing. 

Mr. Henneberger, do you happen to know what part of Houston 

received the largest number of evacuees from the Gulf Coast? 

Mr. HENNEBERGER. Yes, sir. It was the southwestern section of 

the City of Houston, and there is a tremendous problem with the 

hyper-concentration of the evacuees in those areas, and in my testimony I provided our deep fair housing concerns about the decisions 

of the City of Houston on how to expend its very limited amount 

of money for Katrina evacuees, because we believe that the City’s 

programs are designed basically to institutionalize and continue to 

exacerbate that overconcentration. 

Mr. CLEAVER. Third and fifth wards? 

Mr. HENNEBERGER. It is the Fondren and Southwest section. It 

is Congressman Greene’s district, and surrounding areas. 

Mr. CLEAVER. So that is a portion of the fifth ward. Are you familiar with— 

Mr. HENNEBERGER. Yes, sir. I believe—I would describe it as an 

area generally around and outside of the loop and in the Southwest 

section. 

Mr. CLEAVER. Okay. All right. 

44 

In certain parts, that is already one of the poorest parts of Houston. 

Mr. HENNEBERGER. Those were where the vacant apartments 

were at the time the evacuees came. And so that is where they 

were referred. And unfortunately, you know, we believe it is really 

incumbent upon HUD to provide a moving-to-opportunity style program to help those evacuees be able to move to areas of higher opportunity, closer to jobs, better schools, where they choose to live, 

rather than sort of trying to provide limited assistance at improving the quality of apartments and basically locking those families 

into that area, where there’s frankly far too many concentrated 

multi-family units that are in far too great a need of rehabilitation. 

Mr. CLEAVER. Yes, I am very familiar with the area. 

Let me find out, Mr. Johnson, the fair housing issues you raised, 

is there a State Fair Housing Act? 

Mr. JOHNSON. No. 

Mr. CLEAVER. Okay. I thought you said that, and those were in 

your comments. But then I thought he made an error that in 2008, 

there was just an oversight, and that you were looking at a lot of 

other acts, and you just were confused. 

Mr. JOHNSON. No. Mississippi is one of the few, if not the only, 

State without a fair housing act, and Mississippi is the only State 

without a Department of Labor, and there are a whole bunch of 

things we don’t have, which probably contributes to why we are the 

poorest State in the country. 

Mr. CLEAVER. It was my understanding until this hearing that 

HUD required fair housing components when it distributes Community Development Block Grant funds. I don’t know if anybody— 

I mean the HUD people have abandoned this. 

Mr. PERRY. Congressman, the language in the Community Development Block Program simply says that grantees must affirmatively further fair housing, but there are no teeth, there are no enforcement mechanisms, and there aren’t significant regulations, so 

HUD has not been very stringent about making sure that grantees 

follow these regulations. And so the result are the numbers of fair 

housing problems that we have seen testified to in this panel. 

Entities that actually get CDBG funding have engaged in actual 

discrimination, and I think it’s because of the lack of detail in the 

Community Development Block Grant funding mechanism. 

I would note that Alabama also does not have a State fair housing law. And so to the extent that Congress can urge these States 

to get fair housing laws, I think it’s a very important step. 

Mr. CLEAVER. Did they forget? 

[Laughter] 

Mr. PERRY. In the case of Mississippi, there is a Fair Housing 

Act bill during every legislative session. As the political winds 

blow, the House is primarily dominated by the Democrats; they will 

pass an act out of that body, which inevitably is killed in the Senate. And that is the give-and-take every legislative session for at 

least the past 9 or 10 sessions. 

Mr. CLEAVER. And Mr. Perry, you’re saying that all that State 

has to do is say, ‘‘We believe in fair housing.’’ 

Mr. PERRY. Unfortunately, that’s the case. It is unfortunately 

very easy to prove that you’ve affirmatively furthered fair housing. 

45 

And one thing that advocates like myself have said for a long time 

is that we really need Congress to tighten the language, so that 

there are actual penalties for failing to affirmatively further fair 

housing. And that’s so crucial. Without it, they simply write up a 

statement saying, you know, we sponsored a poster context, and 

therefore we have affirmatively furthered fair housing. Meanwhile, 

they have, you know, for instance, not done anything to help any 

low-income citizens find rental housing in the State. 

Mr. BAAB. Well, Mr. Cleaver, I wanted to also add for Alabama 

that—and this really highlights the importance of HUD’s responsibilities—in the two action plans, the initial and supplemental action plans submitted by Alabama to HUD for approval prior to receipt of CDBG funds, the words, ‘‘fair housing’’ do not appear. 

Mr. CLEAVER. I was the mayor of Kansas City. When we enter 

into our annual CDBG contract with HUD, we certify that the— 

because we had a fair housing department—but we certified that 

the City will adhere to all of the requirements of the law. And I’m 

not sure that my colleagues have a good understanding of what is 

going on with both States. 

But the other problem we have is that in the middle of this program, it’s difficult for us to then start tightening the screws, because if that happens, that becomes the excuse for not, you know, 

speeding up the program. You know, if we say, for example, we’re 

going to cut off funds if you don’t conform to our expectations of 

fair housing, that works to the detriment of the people that all of 

you on the panel are advocating for. 

Mr. Baab? 

Mr. BAAB. You’re exactly right, sir, and I might say, just to be 

fair, that the contract that the State entered into, or I should say 

Mobile County entered into with the contractor to actually exercise 

his program, that contract does contain all of that usual fair housing obligations and commitments that the contractor agrees to. But 

without the State including something in there in their project plan 

to HUD and without HUD saying anything back, it gives it worse 

than no teeth; there’s nothing in there to do. And furthermore, in 

these applications there is no information retained about the racial 

background of any of the applicants. The question is, I think, racial 

minority? Yes or no. Whatever that means. 

And so the information isn’t even gathered in such a way that 

we could test on whether compliance is existing. 

Mr. CLEAVER. Mr. Morse? 

Mr. MORSE. Representative Cleaver, I wanted to mention that 

Mississippi, like all the other States, is under a regulation to compile and maintain records to assure compliance with fair housing 

laws. 

Mr. CLEAVER. Do that again, do that one more time, please. 

Mr. BAAB. The emergency CDBG regulations require each State 

to maintain records and keep records of the pertinent demographics to assure that the Fair Housing Law is being complied 

with. If you look on pages 11 and 12 of my written statement, you’ll 

find the cite to the regulation and the language itself. 

But here’s the point. The point is that Mississippi has not kept 

those statistics, that they have treated that as a voluntary option 

for people coming in for the homeowner’s grant. And RepresentaVerDate Aug 31 2005 14:32 Aug 20, 2008 Jkt 043696 PO 00000 Frm 00053 Fmt 6633 Sfmt 6633 K:\DOCS\43696.TXT TERRIE
46 

tive Cleaver, that’s the one that over a billion dollars has been paid 

out to, that overwhelmingly from our understanding of the facts, is 

skewed towards moderate- to upper-income households, and not to 

lower-income households. 

So there’s no way at this point, with the money already out the 

door, for you or HUD or anybody else to determine whether or not 

there was compliance with the Fair Housing Law, because the 

front-end data gathering was not kept, and so there is going to be 

no accountability. That ought not be allowed to occur without consequences. 

Our understanding, Mr. Cleaver, is that HUD is in discussions 

with Mississippi about the shortcomings of its record-keeping requirements. We would encourage greater oversight and investigation from your end on that, because we believe it’s critical to seeing 

some kind of fairness come out of this process. 

Mr. CLEAVER. Well, I am frankly flabbergasted and just stunned. 

That solves the hearing for me. I mean I understand now why we 

haven’t made any progress. 

Madam Chairwoman and Mr. Johnson’s testimony mentioned 

that there was no fair housing law in Mississippi. Well, it turns out 

there is no fair housing law in Mississippi or Alabama on the 

books. And so it skews any kind of certificate that low- to moderate-income people are being helped, because there is, you know, 

the State is not obligated legally—am I correct, Mr. Morse? 

Mr. MORSE. Actually, I think the State is obligated under a Federal HUD regulation to record the race and other pertinent fair 

housing demographics. My statement to you, sir, though, is that 

the State has not done so. 

Mr. CLEAVER. Yes, I understand that. 

Mr. MORSE. And that’s the dilemma. From the Federal obligation 

side. It’s our information this is in writing from a State representative that they treated that as a voluntary piece of information, did 

not record it mandatorily as the regulation required, and therefore 

there is no possible way to assure that the fair housing obligation 

has been met. One cannot determine the racial demographics of 

those who received the homeowner’s grants because they didn’t 

record it at the front end. If you allow that to go unanswered, you 

know there is no point in any accountability. 

Mr. CLEAVER. Yes. 

Mr. BAAB. Mr. Cleaver, if I can— 

Mr. CLEAVER. Let’s turn this over, back to— 

Mr. BAAB. If I could make a quick comment, because I want to 

get this on the record in the context of what you’re discussing here, 

if I may, Madam Chairwoman. In a little town or little area of 

north Mobile County called Trinity Gardens, it is about 94 percent 

African American, one of the community leaders there, Lavonis 

DuBose, had meetings with two of the three Mobile County commissioners last year, and in those meetings they were told by the 

commissioners, two separate meetings, that this little community 

did not qualify for Community Development Block Grants, so they 

shouldn’t even bother applying. They were simply mistaken, they 

were just wrong. But among other reasons, these folks then didn’t. 

And so, Ms. DuBose went about raising $250,000 in private money, 

and helped about 160 families just get a roof on their house. Sixty 

47 

folks are going to apply again if we ever open up the process again. 

But even if it was out of stupidity or ignorance, the fact remains 

that virtually an all-black community in Mobile county fully qualified to apply for CDBG funds was told by two of the commissioners 

of the county that they couldn’t do it. 

Chairwoman WATERS. Yes. Thank you very much. That is on the 

record. And again, I’m sorry I had to leave, but some of the information that you have shared with Mr. Cleaver here today—well, 

all of it is on the record. Some of it I am pretty much aware of. 

Our challenge now is to really do some follow-up, and to see what 

we can do. I just talked with my staff about the money that is 

being directed towards the port and I am absolutely going to see 

what we can do to avert that over the next few days. We are going 

to have to move on it very quickly to see what we can do to stop 

that from moving forward. 

Also, I will get the information about Phase I and Phase II in 

Mississippi. 

Yes, sir? 

Mr. MORSE. Madam Chairwoman, I wanted to mention that actually the representative from the State of Mississippi and you and 

anybody else in this room can go online at the Mississippi Development Authority, and go to the right location and see the information current as of each Wednesday. I am fairly familiar with that, 

and I can answer a couple of the questions you were trying to put 

to Mr. Norris, which he was unable to answer. Would you like me 

to do so? 

Chairwoman WATERS. Yes. You heard the questions. 

Mr. MORSE. Your first question to Mr. Norris was: What was the 

average grant amount for Phase I? The answer to that is: About 

$70,000. He has given you a fairly accurate answer. The number 

of grantees is probably in the range of 15,000 to 16,000. What is 

distinctive about Phase I, Madam Chairwoman, is that those people already will have received some insurance, so $70,000 is not the 

sum total of funds that they will have received in order to restore 

their dwellings. 

In contrast, Phase II, a significant percentage of those folks will 

have not had insurance. They will be lower-income households. 

They will probably have had only actual cash value as opposed to 

replacement cost coverage, because of persistent problems with the 

insurance industry in writing in minority neighborhoods. And so 

the gap between any insurance money, if any, they receive and the 

cost to repair is going be higher. 

And Madam Chairwoman, in Phase II, the average grant amount 

was also about $70,000. But because of the insurance problems I 

just described, the aggregate amounts of households receiving 

home grants in the lower-income side will be smaller, and we are 

seeing at the Mississippi Center for Justice and in all of the other 

service organizations across the coast persistent gaps of people who 

have received grants, but can’t finish the job. So the total number 

of households that have received the grants, Madam Chairwoman, 

I think is in the range of 4,000. But as I say, if you were to go to 

Mississippi.org and then go to their disaster relief section, there is 

a weekly report that gives you a breakout on that, and those numVerDate Aug 31 2005 14:32 Aug 20, 2008 Jkt 043696 PO 00000 Frm 00055 Fmt 6633 Sfmt 6633 K:\DOCS\43696.TXT TERRIE
48 

bers actually add up to a smaller number than the one Mr. Norris 

quoted to you about the total number of people receiving grants. 

Chairwoman WATERS. What was the total number of people in 

Phase II? 

Mr. MORSE. I think he indicated that in total, it was close to 

25,000 currently, and I think currently the actual number is closer 

to 19,000 to 20,000, of which 4,000 are in Phase II. 

Chairwoman WATERS. Thank you very much. We are going to 

look a lot closer at that. It is something that has been on my mind 

ever since Mr. Norris, I think you first brought it to our—who was 

it that first brought it to our attention? The NAACP. Mr. Derrick 

Johnson first brought it to our attention, I think when we were in 

Mississippi, and this is information that needs to be followed up on. 

I want to thank all of the panelists for being here today. I will 

review the testimony of each one of you who have appeared here 

today. It is being recorded. This committee is going to do some follow-up. We are coming back; we are going to look at the numbers; 

and we are going to look at what we need to do legislatively. We 

are going to look at what we need to do, working with a combination of HUD and the Governors of these States, particularly Louisiana and Alabama. We are going to try not to be categorized as 

having came, looked, did a look-a-loo, and didn’t come back, didn’t 

do anything. I know a lot of people are feeling that way now, and 

we feel a real sense of responsibility to that. 

So we will follow up, and we will be back. Okay? 

I thank all of you for being here today. 

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. 

The panel is now dismissed. Before we adjourn, without objection, the written statement of the Equity & Inclusion Campaign 

will be made a part of the record of this hearing. 

The hearing is now adjourned. And thank you so much for your 

patience here today. 

[Whereupon, at 3:09 p.m., the hearing was adjourned.] 

(49) 

A P P E N D I X 

May 8, 2008 

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