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FIGHTING DISCRIMINATION AGAINST THE

DISABLED AND MINORITIES THROUGH

FAIR HOUSING ENFORCEMENT

JOINT HEARING

BEFORE THE

SUBCOMMITTEE ON

HOUSING AND COMMUNITY OPPORTUNITY

AND THE

SUBCOMMITTE ON

OVERSIGHT AND INVESTIGATIONS

OF THE

COMMITTEE ON FINANCIAL SERVICES

U.S. HOUSE OF REPRESENTATIVES

ONE HUNDRED SEVENTH CONGRESS

SECOND SESSION

JUNE 25, 2002

Printed for the use of the Committee on Financial Services

Serial No. 107–73

(

(II)

HOUSE COMMITTEE ON FINANCIAL SERVICES

MICHAEL G. OXLEY, Ohio, Chairman

JAMES A. LEACH, Iowa

MARGE ROUKEMA, New Jersey, Vice Chair

DOUG BEREUTER, Nebraska

RICHARD H. BAKER, Louisiana

SPENCER BACHUS, Alabama

MICHAEL N. CASTLE, Delaware

PETER T. KING, New York

EDWARD R. ROYCE, California

FRANK D. LUCAS, Oklahoma

ROBERT W. NEY, Ohio

BOB BARR, Georgia

SUE W. KELLY, New York

RON PAUL, Texas

PAUL E. GILLMOR, Ohio

CHRISTOPHER COX, California

DAVE WELDON, Florida

JIM RYUN, Kansas

BOB RILEY, Alabama

STEVEN C. LATOURETTE, Ohio

DONALD A. MANZULLO, Illinois

WALTER B. JONES, North Carolina

DOUG OSE, California

JUDY BIGGERT, Illinois

MARK GREEN, Wisconsin

PATRICK J. TOOMEY, Pennsylvania

CHRISTOPHER SHAYS, Connecticut

JOHN B. SHADEGG, Arizona

VITO FOSSELLA, New York

GARY G. MILLER, California

ERIC CANTOR, Virginia

FELIX J. GRUCCI, JR., New York

MELISSA A. HART, Pennsylvania

SHELLEY MOORE CAPITO, West Virginia

MIKE FERGUSON, New Jersey

MIKE ROGERS, Michigan

PATRICK J. TIBERI, Ohio

JOHN J. LAFALCE, New York

BARNEY FRANK, Massachusetts

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

KEN BENTSEN, Texas

JAMES H. MALONEY, Connecticut

DARLENE HOOLEY, Oregon

JULIA CARSON, Indiana

BRAD SHERMAN, California

MAX SANDLIN, Texas

GREGORY W. MEEKS, New York

BARBARA LEE, California

FRANK MASCARA, Pennsylvania

JAY INSLEE, Washington

JANICE D. SCHAKOWSKY, Illinois

DENNIS MOORE, Kansas

CHARLES A. GONZALEZ, Texas

STEPHANIE TUBBS JONES, Ohio

MICHAEL E. CAPUANO, Massachusetts

HAROLD E. FORD JR., Tennessee

RUBE ́ N HINOJOSA, Texas

KEN LUCAS, Kentucky

RONNIE SHOWS, Mississippi

JOSEPH CROWLEY, New York

WILLIAM LACY CLAY, Missouri

STEVE ISRAEL, New York

MIKE ROSS, Arizona

BERNARD SANDERS, Vermont

Terry Haines, Chief Counsel and Staff Director

(III)

SUBCOMMITTEE ON HOUSING AND COMMUNITY OPPORTUNITY

MARGE ROUKEMA, New Jersey, Chair

MARK GREEN, Wisconsin, Vice Chairman

DOUG BEREUTER, Nebraska

SPENCER BACHUS, Alabama

PETER T. KING, New York

ROBERT W. NEY, Ohio

BOB BARR, Georgia

SUE W. KELLY, New York

BOB RILEY, Alabama

GARY G. MILLER, California

ERIC CANTOR, Virginia

FELIX J. GRUCCI, JR, New York

MIKE ROGERS, Michigan

PATRICK J. TIBERI, Ohio

BARNEY FRANK, Massachusetts

NYDIA M. VELA ́ ZQUEZ, New York

JULIA CARSON, Indiana

BARBARA LEE, California

JANICE D. SCHAKOWSKY, Illinois

STEPHANIE TUBBS JONES, Ohio

MICHAEL E. CAPUANO, Massachusetts

MAXINE WATERS, California

BERNARD SANDERS, Vermont

MELVIN L. WATT, North Carolina

WILLIAM LACY CLAY, Missouri

STEVE ISRAEL, New York

SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS

SUE W. KELLY, New York, Chair

RON PAUL, Ohio, Vice Chairman

PETER T. KING, New York

ROBERT W. NEY, Texas

CHRISTOPHER COX, California

DAVE WELDON, Florida

WALTER B. JONES, North Carolina

JOHN B. SHADEGG, Arizona

VITO FOSSELLA, New York

ERIC CANTOR, Virginia

PATRICK J. TIBERI, Ohio

LUIS V. GUTIERREZ, Illinois

KEN BENTSEN, Texas

JAY INSLEE, Washington

JANICE D. SCHAKOWSKY, Illinois

DENNIS MOORE, Kansas

MICHAEL CAPUANO, Massachusetts

RONNIE SHOWS, Mississippi

JOSEPH CROWLEY, New York

WILLIAM LACY CLAY, Missouri

(V)

C O N T E N T S

Page

Hearing held on:

June 25, 2002 .................................................................................................... 1

Appendix:

June 25, 2002 .................................................................................................... 53

WITNESSES

TUESDAY, JUNE 25, 2002

Arnwine, Barbara, Executive Director, Lawyers Committee for Civil Rights

Under Law ............................................................................................................ 42

Marcus, Hon. Kenneth, General Deputy Assistant Secretary for Fair Housing

and Equal Opportunity, HUD ............................................................................. 7

Pratt, Sara K., Civil Rights and Fair Housing Consultant on behalf of the

National Council on Disability ............................................................................ 28

Smith, Shanna, President and CEO, National Fair Housing Alliance ............... 38

Tegeler, Philip, Legal Director, Connecticut Civil Liberties Union ..................... 40

Vaughn, Becca, Topeka Independent Living Resource Center Advocacy Coordinator on behalf of The Disability Rights Action Coalition for Housing ....... 30

APPENDIX

Prepared statements:

Roukema, Hon. Marge ...................................................................................... 54

Kelly, Hon. Sue W. ........................................................................................... 56

Oxley, Hon. Michael G. .................................................................................... 58

Clay, Hon. William Lacy .................................................................................. 59

Gutierrez, Hon. Luis V. .................................................................................... 62

Jones, Hon. Stephanie T. ................................................................................. 66

LaFalce, Hon. John J. ...................................................................................... 68

Lee, Hon. Barbara ............................................................................................ 70

Velasquez, Hon. Nydia M. ............................................................................... 73

Waters Hon. Maxine ......................................................................................... 75

Arnwine, Barbara ............................................................................................. 76

Marcus, Hon. Kenneth ..................................................................................... 87

Pratt, Sara K., .................................................................................................. 93

Smith, Shanna .................................................................................................. 121

Tegeler, Philip ................................................................................................... 139

Vaughn, Becca .................................................................................................. 154

ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD

Kelly, Hon. Sue W.:

U.S. Department of Agriculture letter to Hon. Marge Roukema, June

25, 2002 .......................................................................................................... 166

Marcus, Hon. Kenneth:

Written response to questions from Hon. John J. LaFalce ........................... 168

Vaughn, Becca:

Response to Members’ question asked during the hearing ........................... 175

Housing Assistance Council, prepared statement ................................................. 176

National Council on Disability, letter, July 29, 2002 ........................................... 181

Paralyzed Veterans of America, prepared statement ........................................... 184

U.S. Department of Agriculture, Rural Housing Service, Administrator, Arthur A. Garcia, prepared statement ................................................................... 189

(1)

FIGHTING DISCRIMINATION AGAINST THE

DISABLED AND MINORITIES THROUGH

FAIR HOUSING ENFORCEMENT

TUESDAY, JUNE 25, 2002

U.S. HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS,

AND SUBCOMMITTEE ON HOUSING AND COMMUNITY

OPPORTUNITY,

COMMITTEE ON FINANCIAL SERVICES,

Washington, DC.

The subcommittees met, pursuant to notice, at 2 p.m., in room

2129, Rayburn House Office Building, Hon. Sue Kelly [chair of the

Subcommittee on Oversight and Investigations] presiding.

Present: Representatives Kelly, Gary G. Miller of California,

Tiberi, Frank, Waters, Gutierrez, Velazquez, Watt of North Carolina, Lee, Inslee, Schakowsky, Moore, Jones of Ohio, and Clay.

Ex officio present: Representatives Oxley and LaFalce.

Chairman KELLY. This joint hearing of the Subcommittee on

Oversight and Investigations and the Subcommittee on Housing

and Community Opportunity will come to order.

I want to thank all Members of Congress that are present today.

There will be others. We have a busy day. Without objection, all

members present will participate fully in the hearing, and all opening statements and questions will be made part of the official hearing record.

Beyond the issue of availability of affordable housing is the ability of the disabled and minorities to access what housing is currently available. Unfortunately, discrimination continues to be a

disturbing problem in our nation, which is very apparent in housing.

The disabled have a particularly hard time since the wrong housing reduces their ability to function even in the confines of their

own homes. As a nation, we have recognized these problems and

have enacted laws which created agencies dedicated to stopping

housing discrimination and ensuring more homes are accessible to

the disabled.

It is for this reason that I have become very frustrated when I

read reports which state that these laws are not being enforced and

the agencies created to investigate and correct these wrongs have

been failing in their jobs.

One issue I continually hear about when I am in New York is

the desperate need for housing for people with disabilities. We have

2

adults who desperately want to get out on their own, to hold jobs,

pay taxes, and simply have no options for housing.

Think about people of slight or profound disability even, and the

courage that it takes for them to enter the world on their own.

That desire to become an active part of society must not be thwarted by a lack of available affordable housing.

It is my hope that with today’s hearing we can all gain a better

understanding of what the issues are which face the disabled and

minorities seeking homes and better living conditions within those

homes.

We will discuss why efforts to enforce fair housing laws have

failed, and what is and can be done to rectify the situation. But,

most of all, I hope that we can agree to work together to renew our

efforts to ultimately solve this problem.

There must be zero tolerance for discrimination against the disabled and minorities. The need for clean, safe, affordable housing

for minorities and the disabled has never been greater. Addressing

this housing shortage and fighting discrimination must be a top

priority in our nation’s housing policy.

I now want to ask unanimous consent to insert in the record the

opening statement of the co-chairman, whose subcommittee is a

part of this hearing today, and that is Congressman Marge Roukema, Chairman of the Subcommittee on Housing and Community

Opportunity.

[The prepared statement of Hon. Marge Roukema can be found

on page 54 in the appendix.]

Ms. Roukema is going to try to be with us here today, but she

is not here for this opening statement. So I would like unanimous

consent to place it into the record. And, with that, I will turn now

to my friend from Massachusetts, Mr. Frank, for his opening statement.

[The prepared statement of Hon. Sue W. Kelly can be found on

page 56 in the appendix.]

Mr. FRANK. Thank you, Madam Chair. I am pleased that a request which we made for this hearing was agreed to. And I am

pleased that we have a chance to address this very important subject.

There is a great myth that plagues our politics. Whenever we try

to enact legislation to protect people against unfair discrimination,

the opponents of that legislation conjure up all sorts of horrors.

They paint a picture of a world in which innocent employers,

building owners, rental agents, et cetera, are at the mercy of this

gaggle of vicious potential plaintiffs and are often mistreated by

overbearing enforcement agents.

In fact, as we know, the great scandal of anti-discrimination laws

is that they are substantially underenforced. The problem with

laws against discrimination in every case is that it is hard to enforce them.

It is hard to enforce them. You get a transition period. There is

a practice of people being bigoted. A societal consensus finally gets

to the point where we can outlaw that, and for the first couple of

years you catch a few of the bigots because they are too dumb to

disguise their bigotry.

3

But after awhile the warriors may, those who want to do this,

figure it out. And we then deal with a subtler form of discrimination, subtler only in its expression, not in the terrible impact it has

on its victims.

And because under American law, the burden of proof is on those

who would seek to establish that things have been done wrong because people are careful not to say incriminating things in the

presence of witnesses or write them down, we find ourselves in a

very difficult situation when we try to enforce the law.

I will say, for those who raise questions about affirmative action,

the major role of affirmative action in many cases is not to achieve

some foreordained result, but because it can be an important evidentiary tool, if in fact people have an employment practice, or a

residential bias, or have sold houses to a population that is substantially different than the underlying population; if people who

suffer from disabilities, or who are a particular ethnic group are

clearly excluded from a particular place. That is a piece of evidence.

At any rate, because it is so hard to enforce, it becomes very important for us to do this kind of oversight. It becomes very important for us to focus on this. It also is the case that because enforcement is so hard, it is expensive. And we have not in general funded

those agencies that are charged with protecting people against discrimination at nearly the level they ought to be.

They are formal law enforcement. And if we are serious about

the law that says you should not deny someone a place to live because of her disability, or his color, or children, then we ought to

put our money where our mouth is and provide the enforcement

entities. And we do not do that nearly enough.

So that is another important piece of this that we have to do. We

have got to make sure that people are adequately financed so they

can in fact carry out their responsibilities in this area.

The purpose of this hearing is to get some progress reports. But

I know what we will find out is that we have underenforced these

laws, as we have underenforced all anti-discrimination laws. It is

not a partisan matter; it is an institutional bias.

The last point I would make—and I assume we will see some

numbers on this—one of the unfortunate facts about any anti-discrimination law I have ever seen is that the backlog of complaints

is excessive; that people file a complaint and have to wait months,

over a year.

That simply is intolerable. That is a failure of will. And the basic

point that we need to get across is we have not discharged our

moral obligation to our fellow citizens to protect them against unfair prejudice just by passing a law.

Passing the law is a necessary first step. But if all we do is pass

the law, and do not provide the vigilance, and the resources, and

the energy to enforce it, then we have done very little to protect

people.

So I am glad that we have this hearing. And I look forward to

demonstrating here today our commitment to making sure that

this law against discrimination and housing is in fact enforced.

Chairman KELLY. Thank you very much, Mr. Frank.

Ms. Velazquez, I understand you have an opening statement.

4

Ms. VELAZQUEZ. Thank you. And, first, I would like to thank

Chairwomen Roukema and Kelly, and ranking members, Frank

and Gutierrez, for convening this hearing today. The subject of discrimination involved public and private housing markets. It is one

that needs to be addressed, and I appreciate the efforts of this body

to do so.

As our Federal housing policy has evolved over the years, a number of programs and initiatives have been implemented that are intended to ensure that not only do families have safe, affordable

places to call home, but that they are in neighborhoods that we will

all feel comfortable raising our children in.

Hope VI was specifically created with this intent. Furthermore,

the 1998 public housing reform law espoused the theory of

deconcentration of poverty. Unfortunately, the impact of these theories have not been what was hoped; 4.9 million American families

have worst case housing needs.

These are families who pay more than 50 percent of their income

for rent, or live in severely substandard housing. Last year, we

heard from several witness who believed that the number of families in such situations might even be greater than the 4.9 million

cited in HUD’s most recent report on that topic.

Even more alarming is the fact that the number of families who

pay more than 50 percent of their income in rent is rapidly increasing in urban areas and among working minority families. These are

many of the same people for whom our educational system is failing. This is especially hard on the children.

When you add the burdens of an unstable housing situation, it

is little wonder that these children are being left further behind

with each passing year. Yet, the administration has paid little attention to the office charged with reversing these trends.

Eighteen months into the President’s term, the position of Assistant Secretary for Housing—for Fair Housing and Equal Opportunity—remains unfilled. In fact, the current nominee, Ms. Carolyn

Peoples, was only submitted by the President in May.

Furthermore, she has had very limited experience administering

fair housing laws. I take this to be a troubling indication of the low

level of importance placed on these issues by the administration,

one that I hope will soon be reversed.

This void has left us with a backlog of fair housing complaints

that members of our communities tell us take far longer than the

statutorily required deadline of 100 days to address.

I would be interested in hearing how many complaints are currently pending we fulfill, and how long it typically takes to process

them. I also look forward to learning what specific specs HUD intends to take to improve its record on this score.

I look forward to the testimony of all of our witnesses, and hope

that we can begin to bring forward some practical solutions to reversing the trends of minorities lagging behind the Nation in almost statistical analysis of housing affordability. Thank you, Ms.

Chairwoman.

Chairman KELLY. Thank you, Ms. Velazquez.

Mr. Miller, do you have an opening statement?

5

Mr. GARY G. MILLER OF CALIFORNIA. Well, thank you, Madam

Chair. I am just very pleased that we are having this hearing. I

think some things might be blown out of perspective.

I have to agree that there has been a lack of enforcement on certain programs and policies, and especially when it comes to disabled and minorities in the past. But I think that is somewhat in

the past.

I think the new administration is making every attempt to remove the problems that we faced in the past. So I do not know that

it is necessarily a problem that requires new legislation.

I think it is a problem that needs focusing upon. And I think that

is what we are doing in this hearing. And I think that if we can

get the dialog going with the administration—and I know how the

President feels strongly about this issue—and then, that impetus

is put toward enforcement, I think the problems are going to be resolved.

But it is a timely hearing. And it is a timely issue that needs

to be dealt with. And, again, like I said, I think the issue is acknowledgement there has been a problem through lack of oversight

and lack of enforcement. And I am encouraged that we are taking

those steps. And I am looking forward to hearing the gentlemen

speak to us today. I yield back.

Mr. FRANK. If I could just have 30 seconds. I neglected—and

maybe you should cover it—but it is impossible to convene on this

subject without noting the enormous loss in the death of Justin

Dart. And I should have mentioned that at the outset.

But Justin Dart was such a dedicated pioneer on behalf of this

that, as we convene here, shortly after his death, I just thought it

was important to take note of that.

Chairman KELLY. Thank you for reminding all of us.

Mr. Gutierrez.

Mr. GUTIERREZ. Good afternoon, Chairman Roukema, and Chairman Kelly, and ranking member Frank.

It has been more than three decades since the passage of the

Federal Housing Act, and we can still see, hear, and experience

housing discrimination almost the same way we did more than 30

years ago.

In the year 2000, Federal agencies reported more than 22,000

complaints. I think it is a telltale sign that out of these numerous

complaints, race was the most commonly reported discrimination,

followed by disability and familial status.

Last year, the number of complaints increased approximately

23,500, but these numbers do not tell the whole story. HUD estimates that more than 2 million incidents of housing discrimination

occur each year.

It has been documented that victims of housing-related discrimination or hate activity feel isolated, afraid, shocked, and vulnerable. It is typical for these victims to decide not to report their case

because they may fear retaliation, mistrust of law enforcement, experience cultural language barriers, or just fear deportation.

Our nation’s heartland seems to be sovereignly segregated according to the best information available. The cities of Chicago, Detroit, Milwaukee, Cleveland, St. Louis, all ranked among the ten

metropolitan areas with the most black/white segregation.

6

At the same time, Hispanics in Chicago, Cleveland, and Milwaukee live in more pronounced segregation than Latinos in any

other major metropolis. In fact, segregation for Latinos is greater

in Chicago than in any other major metropolitan region in the

country.

Let us remember the sad, but direct, correlation between segregation and poor schools, which, in turn, have fewer resources for

Latino and black children who attend them. Research shows that

economic differences alone cannot explain the highly segregated

pattern of housing choices because serious racial discrimination

continues to exist within each economic group.

You can make money. Does it mean that you necessarily will live

in a segregated community—I mean a desegregated community?

I think the majority of us here today might agree that one of the

most important reasons for the sluggish movement toward diversity in the housing is what looks to be racist tendencies. Studies

show that even people who work hard, maintain good credit, and

have strong references are still being discriminated because of the

color of their skin, because they have small children, or because

they suffer from a disability.

Fair housing efforts have long been underfunded and undervalued. At the same time, the economic and social costs of housing

discrimination, and segregated housing patterns continue to be

overwhelming.

It is time for Congress, for all of us here today, to allocate additional funds to HUD’s Office of Fair Housing and Equal Opportunity in an amount sufficient so that this office can process all

housing discrimination complaints in a timely and effective manner; that is in 100 days, or preferably less, as it should be at HUD,

and in accordance with the Fair Housing Act, and not at a 500 day

pace that we currently have, and equality in housing doesn’t happen in a vacuum.

It is there for each of us to see, feel, hear, bite, or ignore it, profit, or suffer from it, tolerate it, initiate it, and sometimes even die

because of it. I look forward to hearing all of the testimonies this

afternoon.

Chairman KELLY. Thank you very much, Mr. Gutierrez. Ms. Lee.

Ms. LEE. Thank you, Madam Chair. I would like to just ask permission to put my full statement into the record, and just make a

couple of comments.

Chairman KELLY. So granted, no objection.

Ms. LEE. I would like for your unanimous consent. Thank you.

I just want to thank you, Chairwoman Roukema, and our ranking member, Mr. Frank, for holding this very important hearing.

Housing, as many of us continue to say, should be really a basic

right of every human being.

And, therefore, it is extremely important that we have an honest

and a fair system that works to improve the lives of everyone regardless of their race, nationality, disability, age, sex, sexual orientation, or religion. And so, this is an extremely important hearing. Just this past weekend I had a town meeting in my district,

actually, in Oakland, on housing.

And, of course, issues with regard to discrimination came up.

And I think that we need to understand also clearly the commitVerDate 11-MAY-2000 14:31 Dec 02, 2002 Jkt 000000 PO 00000 Frm 00012 Fmt 6633 Sfmt 6633 C:\DOCS\82683.TXT HBANK1 PsN: HBANK1
7

ment of HUD, in terms of its priority in tackling the issues with

regard to fair housing enforcement; but also what is going on with

this vacancy with regard to the Assistant Secretary for Fair Housing and Employment Opportunity and find out the status of that,

and what has been the problem in this slow movement in terms of

filling this vacancy.

So, thank you again, Madam Chair, for the hearing, and I appreciate being able to submit my full record.

[The prepared statement of Hon. Barbara Lee can be found on

page 70 in the appendix.]

Chairman KELLY. Thank you very much, Ms. Lee. If there are no

further opening statements, I will introduce our first witness, Mr.

Kenneth Marcus, the General Deputy Assistant Secretary for Fair

Housing and Equal Opportunity at HUD.

Mr. Marcus, we thank you for testifying before us today, and I

welcome you on behalf of the committees. Without objection, your

written statements and any attachments will be made part of the

record.

You will now be recognized for a 5-minute summary of your testimony. Before you begin, let me explain that we have lights on the

ends of the table. Those lights are the indicators for the 5 minute

period.

The green light means that you will have 4 minutes in which to

speak; the yellow light means you have 1 minute; the red light

means that you are out of time. I tend to try to give people the

ability to finish their closing sentence when that red light comes

on.

But I do feel that since we have your written testimony, it will

be and is a part of our record, we really feel that you probably can

sum this up in 5 minutes, and we ask that you do so.

That being said, please proceed, Mr. Marcus, and thank you for

being here.

STATEMENT OF KENNETH L. MARCUS, GENERAL DEPUTY ASSISTANT SECRETARY FOR FAIR HOUSING AND EQUAL OPPORTUNITY, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

Mr. MARCUS. Thank you; thank you, Chairman Kelly; thank you,

members of the committee.

My name is Kenneth L. Marcus, and I am the General Deputy

Assistant Secretary for Fair Housing and Equal Opportunity at the

U.S. Department of Housing and Urban Development. I am honored to testify before you today on HUD’s efforts to enforce those

laws that protect the right of every American including minorities

and persons with disabilities to freely choose where they will live.

No one should be precluded from seeking the house of their

choice, or purchasing the house of their dreams because of their

race, color, religion, national origin, sex, familial status, or disability.

Secretary Mel Martinez has repeatedly emphasized that aggressive enforcement of the Fair Housing Act, and the other civil rights

acts regarding housing, will be a high priority of this department

during this administration. HUD and the State and local agencies

8

that enforce substantially equivalent laws receive an average of

10,000 complaints a year alleging Fair Housing Act violations.

The most meaningful contribution HUD can make to the fight

against housing discrimination is the prompt and successful resolution of complaints from individuals who have come forward to us

to report claims of discrimination. There have been comments already this afternoon concerning the speed with which we resolve

complaints.

We, at HUD, do believe that we must improve our track record

with respect to the enforcement of the Federal fair housing laws,

and with respect to the timing within which we complete the resolution of these cases.

During previous years, the Department developed a bad reputation for its delays in processing Fair Housing Act cases, to the extent that even today, many of the Department’s constituents express reluctance to file complaints with the Department out of a belief that nothing will come out of it.

At the end of fiscal year 2000, the percentage of fair housing

cases remaining open past the statutory deadline of 100 days was

well over 80 percent. At the end of the first fiscal year of the Bush

administration, fiscal year 2001, we had reduced the aged-case inventory to 37.1 percent.

This was the first time since the passage of the Fair Housing Act

Amendments Act of 1988 that HUD’s aged-case backlog had

dropped below 50 percent. HUD is also stepping up its efforts to

combat lending discrimination. The Department will soon provide

a contract for an enforcement project that targets mortgage lending

discrimination generally and predatory lending, in particular.

In addition, this year’s Fair Housing Initiatives Program encourages grant proposals from fair housing groups, who among their activities, place a special emphasis on educating and enforcing the

Fair Housing Act against predatory lending practices.

In addition, the Department is focused on a wide variety of other

priorities and initiatives. For instance, the Department, through

the FHIP program, is focusing attention on problems faced by persons within the Southwest border area, which may include predatory lending and other discriminatory lending activities.

In addition, through the FHIP program, and in other ways, we

are also working to implement the Bush administration’s commitment to tapping the potential of faith-based and grass roots organizations by partnering them with the traditional fair housing organizations.

HUD has a great responsibility to make sure that its own programs are accessible to people with disabilities; and, also to safeguard their rights because a disproportionate share of people with

disabilities rely on federally assisted housing.

Even within the last several months, in the District of Columbia

and Boston alone, we have increased the number of accessible

housing units for a person with a disability by over 1200, and entered into the voluntary compliance agreements that will increase

the number by over 1200 units.

In addition, we are working to increase the number of accessible

private housing opportunities that are available to persons with

disabilities. For instance, HUD has awarded over two-and-a-half

9

million dollars to KPMG to develop and conduct training and technical guidance on the Fair Housing Act accessibility requirements

for persons engaged in designing, approving, and building multifamily housing.

As part of this project, KPMG will set up resource centers in different parts of the country where architects, builders, and others

can obtain technical guidance on specific design questions.

In addition to making sure that new housing is built correctly in

the first place, and taking action against those housing providers

who have failed to comply with the provisions of the Fair Housing

Act, HUD is also enforcing the Fair Housing Act against those

housing providers who refuse to make reasonable and necessary allowances in their building operation for persons with a disability.

In closing, we believe that all of these efforts, and others that I

have discussed in my written remarks, when combined with appropriate enforcement actions and timely processing of complaints will

enable the Department and our nation to strike a decisive blow in

the fight against discrimination.

We look forward to working with industry, community leaders,

local governments, fair housing advocates, and Congress, to bring

everyone in America over the threshold to equal opportunity and

justice.

This concludes my formal statement. I am happy to answer questions.

[The prepared statement of Hon. Kenneth L. Marcus can be

found on page 87 in the appendix.]

Chairman KELLY. Thank you very much, Mr. Marcus. We appreciate your statement. I have read reports that have warned about

the problems that the HUD 20/20 Management Reform Program

caused at HUD.

Is correcting the problems you have found at HUD, as a result

of the 20/20 Management Reform Program; is that one of the largest problems that HUD faces now?

Is that one of your biggest problems right now?

Mr. MARCUS. We certainly have a number of management problems in the Department. And I think some of them at least were

mentioned in the report to which you allude. There were many

problems that HUD faced over the years with respect to management it is hard really to list them.

Certainly, the question of how best to deploy the community

builders, which I think may be one of the specific issues discussed

in that report, has been a huge challenge for the Department, and

is one of the areas in which the Department has focused a great

deal of resources.

Chairman KELLY. Is that part of the 20/20 Management Reform?

Mr. MARCUS. Yes, I think that is one of the areas.

Chairman KELLY. What else in that 20/20 reform is difficult for

you right now?

What are you needing to change to help correct the situation?

Mr. MARCUS. I think that the greatest problems have involved

the distribution or misdistribution of staffing resources and personnel, and ensuring that we can retain appropriate lines of reporting authority within the Department that had been redistributed,

and to make sure that the program areas including FHEO, are able

10

to best marshall the resources within the Department in order to

achieve our mission.

Chairman KELLY. During the downsizing at HUD, under Secretary Cuomo, the Office of Fair Housing and Equal Opportunity

was absolutely decimated. They lost money; they lost many experienced staff; staff resigned; they took early retirement.

I would like to know if this is, in fact, true because it is what

I have read. And I would like to know what you are doing to rectify

that problem because it seems to me that right now this is what

this hearing is about. It is about that office, and it is being effective

at doing its job.

Mr. MARCUS. There is no question that we lost a large number

of incredibly talented people during that period and through that

process. And there is no question that that loss is going to be very

difficult to deal with. Many of the most vital, engaged, committed,

and talented people we had unfortunately left the Department at

that time.

We are dealing with it in a number of different ways. One way

that we are dealing with it, of course, is through the redeployment

of the community builders. The Office of Fair Housing has already

employed at least a handful of very talented, experienced fair housing professionals through that process.

And we will be getting at least another couple of dozen by the

end of this fiscal year, who are already becoming involved in our

compliance and enforcement efforts. In addition, we have focused

on the notion of succession and are planning to deal with the loss

of experienced people. By bringing in interns and others, we’re attempting to remedy the problems created by the loss of personnel.

I am happy to report that in my several months since joining

HUD, I have found that we have a number of extraordinarily talented and committed professional staff within the Office of Fair

Housing and Equal Opportunity, who are doing a tremendous

amount of work to deal with the sorts of problems to which you

refer.

Chairman KELLY. I want to go back to that just a little bit because it seems to me that what you just stated was that you did

not feel that given the resignations and the lack of money that the

Fair Housing and Equal Opportunity Office could continue to really

function properly. It was not functioning properly, and you are taking steps now.

I just want to be clear on the record. You are now taking steps

that are going to rectify the situation that was created under Secretary Cuomo, is that correct?

Mr. MARCUS. Let me say that we faced an enormous number of

challenges when we came in, and we have taken a number of measures to try and deal with them.

The redeployment of the community builders has been a bold

move forward, I believe, to strengthen fair housing, enforcement

and compliance through the use of personnel. And we are attempting in various ways to change management and administrative procedures also to deal with those problems. And I believe that we will

do so.

Chairman KELLY. I want to go back to that one more time. From

what I read in your testimony, and in testimony of others, the partVerDate 11-MAY-2000 14:31 Dec 02, 2002 Jkt 000000 PO 00000 Frm 00016 Fmt 6633 Sfmt 6633 C:\DOCS\82683.TXT HBANK1 PsN: HBANK1
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nership between HUD and the fair housing agencies that were getting the fair housing initiatives program funds started to deteriorate in 1998. And they have just gotten worse and worse. I want

to know how this happened, and I want to know what is being done

to resolve that.

Mr. MARCUS. There is no question that the relationship with the

Fair Housing Initiatives Program recipients has deteriorated a

great deal over the last few years. I was not, of course, here in

1998, so others can give you a better explanation of the exact date.

But I understand that it is approximately that number of years

that the trust and relationship with those organizations has become strained and difficult. Let me say that I have done everything

that I can to work as closely as possible with those organizations.

I believe there are across the country, and in this very hearing

room, some extraordinarily dedicated professionals through the

FHIP program, who are working very hard with us to implement

our programs throughout the country.

I have tried to establish as open a door policy as I can, both with

regular policy meetings with FHIP recipients, and also with meetings with myself and with staff to try and get a better understanding of how we can strengthen that relationship, and to repair

the loss of trust that had evidently developed in prior years.

Chairman KELLY. Thank you very much. I see I’m out of time.

We will go now to Mr. Frank.

Mr. FRANK. Mr. Marcus, one of the rules we have here that I

don’t like, and I have in the past myself, when I was a chair, was

the administration witness always testifies first. And that’s a problem, because sometimes what I want to ask people about are what

other people think.

So I have had a chance to read some of the other testimony. And

I wonder if you could respond to a couple of points:

One is that HUD has imposed restrictions with regard to the

form which has to be used, and what the Lawyers Committee for

Civil Rights asserts in this statement of Arnwine is that there is

a website that has forms, and that they have had cases where people have filled out the form on the website, turned it in, and have

been told that was the wrong form; and in one case at least that

led to a year’s delay intervening so the case could not be filed at

all.

And is there a strict requirement—I guess it is two part: Is there

some strict requirement as to form? I would say with victims of discrimination, who may not always be the most sophisticated, I

would hope we would have some flexibility.

And, second, and even more disturbing, is there a form on the

website that is out there that if people use it, it does not count?

Could you respond to that?

Mr. MARCUS. I would be delighted to respond to it, because I

think the more that we can do to educate people as to their options

for coming to us the better because we are in any number of

different——

Mr. FRANK. All right. Mr. Marcus, let’s be specific with what I

just asked you.

Is there a very specific form, and have different versions of the

form that would not be accepted been available recently?

12

Mr. MARCUS. No, Congressman. There are several different forms

there. We have a form available on the website. We will be happy

to look at it to see if we can simplify it. One way is to use the

website. Another way is to use——

Mr. FRANK. No, excuse me, but maybe I was not clear. I was not

suggesting that that form was too complicated. I was saying that

we have an assertion that people who use the form on the website

were then told that was the wrong form. I thought I was clearer

than that. I was not talking about complications. Are you aware

that that may have happened?

Mr. MARCUS. I am not aware, and I have not yet read the testimony, but let me say this. We have tried to communicate throughout the field that if anyone comes to us with anything that even

remotely sounds like it may be a claim under the Fair Housing Act,

we will look behind the form with which they come to us.

It could be oral, it could be written. They could fill out a form

on the website. They could not fill it out if they even think they

might——

Mr. FRANK. Well, that is what I would hope would happen. And

I would hope then maybe if we got these specific examples submitted to you, you could address them, and we could figure out

what the groups, the way in which we could avoid that.

Let me ask you then about the budget. What was the budget in

the last year of the Clinton administration?

Mr. MARCUS. It was approximately $23 million and 22—$24 million for the FHIP program, $22 million for the FHAP program.

Mr. FRANK. Forty-six total. What’s it this year? What was requested for this year—for the current, for the next fiscal year, for

2003?

Mr. MARCUS. We have requested level funding.

Mr. FRANK. Are the number of complaints going up?

Mr. MARCUS. Well, that is a difficult question, Congressman. We

have fewer complaints so far this year, although this is a seasonal

matter. But the fact is we have somewhat fewer complaints this

year, even for this time in prior years.

So we are going down a little bit in complaints. But we think

that as we increase education and outreach, it is hard to say, we

might be back.

Mr. FRANK. I must say, I think level funding is inappropriate,

and this is part of the problem. I think the funding was too low,

in the first place. And only the level funded, I don’t think gives

anybody an impression that this is something we are very serious

about. And I include in this both branches, legislative and executive.

The other assertion that was troubling that I hope you would be

able to address would be the notion that in cutting down the backlog there has been a kind of emphasis on speed and cutting down

the backlog; and that cases in the backlog have not gotten the full

individual treatment that they would have gotten if they were not

in the backlog.

Would you respond to that accusation?

Mr. MARCUS. Yes, Congressman Frank. And I would like to because I think that is a very important point.

13

I have considered the reduction of our aged-case backlog to be

the singlemost important administrative or managerial problem

that we have right now, and we have given it a great deal of focus.

But I have also, every time I have discussed with staff the problem of aged-case backlog resolution, tried to emphasize that we are

not simply in the business of resolving cases within 100 days. We

are in the business of ensuring that persons claims are resolved appropriately, and that we are reducing discrimination in the United

States.

Now trying to make sure that that happens, and that procedures

are in place to ensure that aged-case backlog resolution does not

come at the expense of a thorough resolution of the complaints is

a difficult matter that we have looked at in a few different ways.

One thing that I have done is to try to ensure that we are developing goals and timetables which, while ambitious, are attainable.

I would have liked, for instance, to be able to reduce our aged-case

backlog over the course of this year down not just to 35 percent,

but to 25, or 20 percent.

But in speaking with staff, I have been convinced that there is

a certain point to which we can reduce it this year consistent with

a complete and thorough investigation; and that if we push people

to go further, they might not meet those goals.

But they might do so only at the expense of a thorough investigation. So I have tried to make sure to push people only as far as

we can legitimately do so, consistent with a thorough investigation.

We have also tried to make sure that where there is any indication from anyone that an individual case has not gotten the care

and attention that it deserves including cases that may have been

dismissed or determined not to be a basis for reasonable cause determination, that we go back and look at it to see whether in fact

we did not do it right because of the rush to resolution.

So this is a problem that we deal with both in terms of developing priorities and objectives, and also in terms of dealing with

specific individual cases.

Chairman KELLY. Thank you very much. Ms. Velazquez, have

you questions?

Ms. VELAZQUEZ. Thank you, Chairwoman.

Mr. Marcus, I heard that you are making reference three times

for the record that this office under Andrew Cuomo was practically

dismantled. And maybe that explains why I endorse, and I am on

the record supporting Carl McCall for Governor in New York.

But, putting that aside, does that also explain the fact that it

took that administration 18 months to submit Ms. Peoples’ name

for that position?

Mr. MARCUS. Let me try to hit on both parts of that. First, my

concern in discussing the problems that we have faced has really

been to try and identify what the challenges are, as opposed to assessing blame. Because we certainly have our share of challenges.

As for the nomination of Mrs. Peoples, of course, I have not personally been involved in that. I understand that the emphasis has

been on finding the right person, even if it takes a little bit longer.

And based on my assessment, and that of everyone that I have

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14

sensus that Mrs. Peoples will be an assistant secretary worth waiting for.

Ms. VELAZQUEZ. Well, I have my concerns in terms of the fact

that she has very limited experience at administering fair housing

laws. I just would like to ask you, Mr. Marcus, what assurances

can HUD give this committee that Ms. Peoples and other seniors

at HUD will address the concerns of fair housing, civil rights, and

disability advocates to regain public confidence in the enforcement

of civil rights laws protecting minorities and people with disabilities?

Mr. MARCUS. Well, you know, there is what we can say to try

and provide assurances; and then, in the end, there is what we do,

and what we can do.

In terms of what we can say, I am proud to be able to tell you

that from when I first met Secretary Mel Martinez, he has emphasized to me, as he has emphasized to other members of his staff,

the commitment of this administration and this Department, not

just to the enforcement, but to the aggressive enforcement of the

Fair Housing Act.

And everything that I have seen from the attitudes of everyone

in the Department, and certainly the attitude that I share, is that

the Fair Housing Act must be aggressively enforced in this country.

Now we have been here a short time, but I think that we have

already at least made progress in terms of dealing with a substantial aged-case backlog and on increased the number of charges last

year. And I think in the end it will be a question of whether we

are able to increase with that record.

Ms. VELAZQUEZ. Thank you. I would like to read from page 2 of

your testimony. At the bottom, when you made reference to the

study title, ‘‘All Other Things Being Equal,’’ prepared testing study

of mortgage lending institutions, you said, ‘‘The study revealed that

while the majority of mortgage lending transactions do not involve

discrimination, blacks and Hispanics in the market studied tended

to receive less information, less assistance, and worse terms.’’

Mr. Marcus, if this is not discrimination, what do you call this?

Mr. MARCUS. It looks like discrimination to me. That’s what I

would call it. Perhaps the language needs a little clarification.

And let me say what I intended to emphasize in this language

is that when we looked at treatment of different persons in Chicago

and Los Angeles at the pre-application stage of mortgage lending,

what we found is that for the most part, most African-Americans

and Hispanics received the same information, assistance, terms,

and treatment as did white people, mostly the same.

However, there was a statistically significant number of AfricanAmericans and Hispanics who received worse treatment at that

stage. And that looks like differential treatment to me.

Ms. VELAZQUEZ. Mr. Marcus, what specific steps will HUD take

to reverse this trend?

Mr. MARCUS. Well, that is an excellent question, and we are

doing a few things. The first and most focused thing that we are

doing in response to this is developing a special contract that we

will have competitively bid out for a fair housing organization, or

organizations which can focus on the problems of mortgage lending

discrimination, to go out, and to help us with enforcement, and perVerDate 11-MAY-2000 14:31 Dec 02, 2002 Jkt 000000 PO 00000 Frm 00020 Fmt 6633 Sfmt 6633 C:\DOCS\82683.TXT HBANK1 PsN: HBANK1
15

haps also education and outreach, to ensure that where there are

people committing this sort of discrimination, we will be able to

find them, and make sure that we cure the problem.

But we are using both HUD resources, as well as the FHIP process, to ensure that there is a new and increased emphasis on mortgage lending discrimination.

Ms. VELAZQUEZ. Thank you, Ms. Chairwoman.

Chairman KELLY. Thank you very much. I would like a bit of

clarification, Mr. Marcus. You did this study referred to, that Ms.

Velazquez referred to, on page 2 in your testimony, with regard to

blacks and Hispanics and mortgage lending.

What emphasis are you placing on people with disabilities? Have

you done a similar study with that?

Mr. MARCUS. We have not done a similar study in the past. And

I don’t think that there is a similar study that has been done in

the past, but we believe that there needs to be one.

And so, for the first time, we will be commissioning a nationwide,

very rigorous study of discrimination against persons with disability including failure to make reasonable accommodations which

will be a part of the HDS or housing discrimination study that had

begun in prior years, but which will only now reach the question

of discrimination against persons with disabilities.

Chairman KELLY. And when do you expect that study to be done?

You are going to field it at what—can you give me some time parameters?

Mr. MARCUS. It will start later in this year, and we expect to

have results during the next fiscal year.

Chairman KELLY. Thank you. Perhaps, we can pursue it a little

further and get it moved up more quickly. I turn now to Mr. Tiberi.

Mr. TIBERI. Thank you, Madam Chair. Just one question to—one

question. Well, I apologize for coming in late and not hearing your

testimony, had an opportunity to review it. And in reviewing it, you

mentioned the issue of the disabled. I am going to read back to you

a letter that was sent to Secretary Martinez on March 5th of 2002,

by Jeffrey Rosen, on behalf of the National Council of Disability.

In the third paragraph I quote, ‘‘Leaving the February meeting,

however, many attendees shared with me their convictions that

outside of the modest initiatives described by Deputy Assistant Secretary Kenneth Marcus, HUD has done little to develop a strategic

plan to address the housing needs of people with disabilities. Although the meeting was styled as a listening session, there was

frustration expressed by the participants about the lack of substantive responses by HUD. Too many longstanding concerns expressed at the meeting. Since several had traveled long distance,

a great personal expense, they set high expectations for any outcome. There was no articulation at this meeting of further information since then about how its plan for meeting follow-up, action.’’

Mr. Marcus, can you tell us today in June, where we are, where

HUD is, in terms of this issue?

Mr. MARCUS. Well, I think that there are a number of different

disability issues that are involved in the concern that Mr. Rosen

raised. I will tell you that there is no set of issues that has received

greater attention within the Office of Fair Housing than this set of

issues involving persons with disabilities.

16

I believe we were able at the time of that meeting to discuss with

Mr. Rosen the progress that we had made in the District of Columbia with our compliance review there. As I recall, we might not yet

have been able to disclose to him the success, which we shortly

after were able to achieve, in terms of dealing with the Boston

Housing Authority.

Over the course of the year, we will complete 80 compliance reviews under Section 504 of the Rehabilitation Act, which will be an

increase of one-third over last year’s. We have started a number of

those reviews since we saw Mr. Rosen, and we will complete a substantial addition of other ones afterward as well.

I believe that since then we have also published a series of initiatives that we would be doing in connection with the Olmstead

issue. President Bush has also outlined initiatives in connection

with the new freedom initiative. I have met with other disability

groups individually since then.

I have also met with some groups in connection with larger meetings that we have. And we certainly look forward to having other

meetings to hear other concerns and to work for or with them in

the future.

Mr. TIBERI. Just one follow-up. Do you find that there is some

difficulty in trying to get your HUD regional offices to exercise directives equally, officially?

Mr. MARCUS. Well, I will say this. There has been, over the

years, a tendency to have either greater devolution to the field, or

greater control by headquarters. Over the last few years, both during this administration and the prior administration, I would say

we have had a greater degree of decentralization.

That has had both advantages and disadvantages. The advantages have included a greater degree of work being done by the

people who have knowledge of the specific local conditions, which

I believe has been very important for some of these successes we

have achieved.

On the other hand, one of the down sides is that it is more difficult to achieve consistency and standardization both in quality

and in the outcome of what they do in the field.

Now, to the extent that we continue in that direction, and I think

that we have had very favorable gains so far from moving in that

direction, what I think we need to do is be more creative in the

way in which we conduct headquarters review and oversight of

what is being done in the field.

We have implemented various procedures along those lines and

will continue to. And I think that as we continue with that oversight, we will be able to deal with the disadvantages, while at the

same time receiving the advantages.

Mr. TIBERI. Thank you. I yield back the balance.

Chairman KELLY. Thank you, Mr. Tiberi. We go now to Ms.

Tubbs-Jones.

Mrs. JONES OF OHIO. Thank you, Madam Chairwoman. I would

like to thank my colleagues for allowing me to question early because I have another committee meeting to get to.

I, for the record, want to say that Doug Shelby, my HUD community partner, is doing one heck of a job in the city of Cleveland. So

17

when you talk to him tell him his Congresswoman spoke highly of

him.

We were very pleased very recently to break ground on Arbor

Village Apartments—did I skip you, Mr. Gutierrez—OK—to break

ground on Arbor Village Apartments, which is affordable rental

housing in the city of Cleveland, with up to four bedrooms for families. So we are real excited about that opportunity.

Let me understand what you—I am a former trial lawyer with

the Equal Employment Opportunity Commission. And so, this term

of ‘‘aged-case resolution,’’ means is of significance to me. When

you—what does aged-case resolution for HUD mean?

Mr. MARCUS. Under Title VIII, it means that we are required,

unless impracticable, to complete the processing of a Title VIII

complaint within 100 days.

Mrs. JONES OF OHIO. OK. So assume you come in as the new

General Secre—General Deputy—excuse me for not knowing all of

these names.

Mr. MARCUS. It is a mouthful.

Mrs. JONES OF OHIO. It is—a Secretary of Fair Housing. And you

700 case—well, let me say 50 just for example. Does someone then

take those 50 and review them if they are past 100 days, and figure out we are going to—how you are going to handle these, or

what happens?

Mr. MARCUS. Well, there are, Congresswoman, in my view, two

parts to the problem. One is managing new cases to prevent them

from becoming aged; and the other part of it is dealing with those

cases that are already aged; and, in particular, those which are

super aged, which is to say, over 1 year old, to make sure that we

are addressing the older cases.

Mrs. JONES OF OHIO. Well, let’s talk about not the ones coming

in. Let’s talk about those that are already there. What do you do?

Mr. MARCUS. From the manager’s point of view, the first thing

that you do is survey the problem and develop a set of objectives

and procedures for managers in the field to deal with these problems.

You come up with goals and timetables for how many you feel

that it is appropriate to achieve in a particular year, and how

many people you want to do it; and then you develop a series of

procedures to assist managers in doing so, which may include, and

have included, specific task forces——

Mrs. JONES OF OHIO. Hold on, Mr. Marcus. I don’t mean to cut

you off. All of that sounds wonderful. And I have been there, as a

trial lawyer, and had all of these edicts come down from Washington about how you resolve cases. But to Mrs. Jones, who is sitting out there with a complaint that has been sitting over 100 days

or a year, none of that has any real meaning to her.

And I guess really what I want to say to you and the people who

are within your department, that regardless of these wonderful

things we can put out there, the most important thing that we can

do for these folks is to see that their cases see the light of day, and

that they get some just resolution.

And I am going to cut that off because I only have 5 minutes.

I want to ask you about something else.

18

You are saying on page 3 of your report, bottom 2–3, that you

will provide a contract for an enforcement project that targets

mortgage lending discrimination and predatory lending in particular; and you would place special emphasis on educating and enforcing, and that you are going to do contracts to people to do that

kind of work.

I would hope that in the RFP’s that you put out for that work,

that in there is included something to allow neighborhood input.

Because, very often, there are organizations that represent or even

bid to the Federal Government that they are capable of doing XYZ

work, and the community people actually have worked with those

organizations.

And I am not saying they should totally be able to nix, but you

ought to have some type of input as to their reputation in the community for doing the work. Could you let me know whether or not

that is something that could be included in your RFP for work in

communities across the country?

Mr. MARCUS. Sure. What I can say, to start with, is that we do

share that concern. And when we work with fair housing initiative

programs through our NOFA, or Notice of Funds Availability, one

of the considerations that we have is whether an organization has

support and a strong reputation within the community.

So it is something that is built into the program by which we

usually distribute funds. As for whether there are any problems or

not with an RFP in doing that, I don’t know. But it is certainly

something we will consider because it is already one of the factors

that we do keep in mind.

Mrs. JONES OF OHIO. What else are you doing in this same area

with regard to predatory lending, sir?

Mr. MARCUS. We——

Mrs. JONES OF OHIO. I am out of time. I am sorry. Am I out of

time? Real quick.

Mr. MARCUS. We have just done some training on that subject

during a policy conference earlier in this month to try and bring

our partners up to speed on it. We are emphasizing it through our

FHIP NOFA, and we have the contract.

Chairman KELLY. Thank you, Ms. Tubbs-Jones.

Mrs. JONES OF OHIO. Thank you, Madam Chairwoman. And, Mr.

Gutierrez, if I stepped in your way, I absolutely do apologize.

Chairman KELLY. Thank you, Ms. Tubbs-Jones. Mr. Gutierrez.

Mr. GUTIERREZ. Thank you. I understand that Hope in their

Wheaton office filed 21 complaints with HUD from Elgin homeowners, landlords, and tenants who have been the victims of a targeted campaign of civil and constitutional rights.

Did you receive those complaints?

Mr. MARCUS. I am familiar with those complaints. We do have

those.

Mr. GUTIERREZ. And did you evaluate those complaints?

Mr. MARCUS. We have evaluated the Elgin complaints over a period of—it has now been years, as has the Department of Justice.

Mr. GUTIERREZ. And what is the result of the evaluation of those

complaints? Were they substantiated, or did you think they were

frivolous?

19

Mr. MARCUS. We are now in a—fairly far along in a process

of——

Mr. GUTIERREZ. Have you made any findings on the 21 complaints?

Mr. MARCUS. We did make a referral to the Department of Justice. We found that there was cause to refer the case for a suit, yes.

Mr. GUTIERREZ. For suit, to the Department of Justice. And

where is that case at now?

Mr. MARCUS. The case is now being conciliated. And there have

been fairly active settlement discussions undergoing—not only

within the last several months——

Mr. GUTIERREZ. Are you involved in those settlement discussions?

Mr. MARCUS. Not personally, but I have kept——

Mr. GUTIERREZ. Is HUD involved in those settlements?

Mr. MARCUS. HUD is involved in it, and they have been——

Mr. GUTIERREZ. And what is the position of HUD in the settlement discussions.

Mr. MARCUS. If we can get an appropriate outcome, we believe

that a mutually agreeable resolution would be good for everyone.

But until we actually have one, or don’t have one, I cannot really

say. But it is something that is moving along very quickly, and

does have a lot of attention. And some of our very——

Mr. GUTIERREZ. When do you think it will be resolved?

Mr. MARCUS. That is up to the parties. I understand there is

a——

Mr. GUTIERREZ. You don’t have any further role in this issue,

other than to refer it to the Department of Justice?

And you feel as though now that it has been referred to the Department of Justice, you don’t have any relationship to the situation?

Mr. MARCUS. Well, I would not say that, Congressman. Since it

is a zoning and land use case, we do not have the same degree of

involvement that we would——

Mr. GUTIERREZ. Well, not a zoning and—I don’t think you are

going to get involved in a landing and zoning issue. You are going

to get involved because people may have used land and zoning

issues to discriminate against a particular racial or ethnic group.

So it is really about using these things.

Mr. MARCUS. I would say it is both of those. But where it is

about that set of issues, we refer to the Department of Justice. Now

just because we referred the case to the Department of Justice,

that does not mean that we are not involved. And we have been

very much involved in the question of whether it can be settled.

Mr. GUTIERREZ. What are you going to do to resolve this issue,

or what is the Department of HUD going to do to resolve this

issue?

Are you just going to let Justice continue to discuss it, and to try

to find a solution to it?

Mr. MARCUS. I am hopeful that there may be a resolution of this

very soon.

Mr. GUTIERREZ. OK. I guess I am hopeful, too. So we each share

the same hopefulness. I guess what are we going to do so that it

gets done?

20

Mr. MARCUS. We have had people working very long, hard, intense hours.

Mr. GUTIERREZ. How long do you think it is going to take before

it gets resolved? Do you have any sense of——

Mr. MARCUS. I don’t know for sure, but there is a city council

meeting tomorrow.

Mr. GUTIERREZ. There is a meeting tomorrow?

Mr. MARCUS. There is a city council meeting tomorrow. That is

one possible date. But I don’t want to say for sure because——

Mr. GUTIERREZ. You mean the city council of the city, Elgin, the

same one you found that discriminated against the families?

Mr. MARCUS. Yes.

Mr. GUTIERREZ. We are going to let them be the determining factor in how this thing gets settled?

Mr. MARCUS. All of the parties have been involved. And I can tell

you that we have some of our most senior, talented people in the

Chicago region who have been working to try and make sure that

is a resolution that will solve this problem and help the families.

Mr. GUTIERREZ. I want to help the families, too. But, as you say,

it has been going on for years, and we need to settle this situation

so that it doesn’t continue, whether in Elgin—because you know

that there are other suits, Moline and other municipalities, in the

state of Illinois that are also—everybody is awaiting the outcome

of this one.

So I would suggest that we get on it, so that we can make this—

because I heard you speak to a timely fashion and how that that

is very important in your administration. Well, I think it should be

also important that once you have a finding of discrimination, that

that also gets settled.

Because simply saying that somebody got discriminated against,

and saying we found that discrimination, and letting it move on

without a solution, is not really a solution to the discrimination.

Let me ask, since time is going to be a matter of essence here,

how many current complaints do you have before HUD?

Mr. MARCUS. Let me answer. But before I answer that, let me

make sure that I did not create confusion in my answer to your

prior question.

When we made the referral to the Department of Justice in the

Elgin matter, it was not predicated upon a finding of discrimination. Because the way the procedure works with the referral in

matters of this kind, we don’t make that affirmative finding at that

time.

But that was just a clarification. The question, I am sorry, is how

many complaints we have?

Mr. GUTIERREZ. So you are saying that HUD never found that

there was discrimination in this matter, and simply referred the

case to Justice with no determination?

Do you refer all of your cases with complaints to the Department

of Justice?

Mr. MARCUS. We have different procedures, depending on the

type of case.

Mr. GUTIERREZ. What did you find relevant in these 21 complaints that would compel you to send it to the Department of Justice when you do not send all cases to the Department of Justice?

21

Mr. MARCUS. What was relevant under the statute was that it

fell under the general rubric of land use and zoning, and that we

would not be able to make a finding that there had been discrimination at HUD. It was the Department of Justice would have to either make that finding.

Mr. GUTIERREZ. Did they find one?

Mr. MARCUS. Their process is to file suit when they find it, and

they have not yet filed suit. And there is a question of whether it

will be settled prior to that.

Mr. GUTIERREZ. So, in other words, no one has really found in

this administration after 18 months that there has been any discrimination on these 21 complaints—either HUD or the Department of Justice?

Mr. MARCUS. Well, it is not just this department. The process is

either to file the case or to engage in the settlement discussions.

And what has been going on has been the settlement discussions,

which we hope will resolve the matter favorably for everyone.

Mr. GUTIERREZ. All right.

Chairman KELLY. Thank you very much.

Ms. Lee.

Ms. LEE. Thank you, Madam Chair. Let me ask Mr. Marcus a

couple of questions with regard to your response to the Chair, as

it relates to many people who actually left HUD who were responsible for the enforcement of fair housing laws.

You indicated that there were many talented and experienced

people, who, for whatever reason, are not there now. I would like

to get a sense of what that is about. Why aren’t they there and

what happened? I mean, were they civil servants? Were they

Schedule C, or why did they leave? Was it as a result of reorganization, or just—could you, you know, elaborate a bit on that?

Mr. MARCUS. Well, I am referring to career people, rather than

Schedule C. And while I am sure, since there were so many, that

there were a large variety of reasons, and while I was not personally there at the time, I have certainly heard many stories of frustration and dissatisfaction with the way things were going in the

last few years and a lot of people concerned about the way the Department was going, and retiring perhaps a little bit earlier, or just

leaving for greener pastures. Our concern is not so much to find

out in each case why people left, but to find a way to keep good

people committed to what we are doing and to make sure we make

the best use that we can of our existing resources.

Ms. LEE. But has the enforcement of our fair housing laws and

EEO laws, has that been a problem, as a result of the turnover,

or do the backlogs and complaints reflect any staffing issues? And

what is your staffing pattern like now?

Mr. MARCUS. Well, I can tell you there have been findings of various organizations including the National Council of Disability

which do connect matters such as the aged-case backlog to the reduction in staffing numbers, and to the loss of talented staff.

We have found that we have substantial problems as a result of

the turnover and the loss of experienced people. And I think that

that is undoubtedly connected with some of the problems that we

have.

I am sorry. The follow-up question?

22

Ms. LEE. Your current staffing patterns, I mean, are you fully

staffed now, or what do you think has been your direction, in terms

of——

Mr. MARCUS. We are certainly better staffed than we were last

year, and last year we were better staffed than the year before.

In 1999, we had over 590 people. That slipped a little. In 2000,

it was 587. It was at a little over 600 in 2001. When you exclude

the Office of Departmental Equal Employment Opportunity, which

was merged into us last year, we now have I believe approximately

610, who are within FHEO right now, plus another couple of dozen

people who are assigned to us, but have not formally joined us. So

I would say we have a couple dozen beyond what we had before.

Ms. LEE. OK. And, now, could you, at some point, give us an ethnic breakdown of your employees, and also who are responsible for

the enforcement of fair housing laws?

And also, this Office of Disability, is that up and running, or do

you have that fully staffed? Is it there? Is it not there? I hear

different——

Mr. MARCUS. We have a disability office within the Office of Fair

Housing and Equal Opportunity, which is staffed by some extraordinary people. And since you have given me the opportunity, perhaps I could recognize the director, Milton Turner, of that office,

who is here. We are staffed with a number of very committed people there, who are doing great work.

Ms. LEE. Great, OK. And you will be able to provide us the ethnic breakdown of your—ethnic agenda breakdown of the employees?

Mr. MARCUS. We will be able to provide that.

Ms. LEE. Thank you very much.

Chairman KELLY. Thank you, Ms. Lee. We go to Mr. Clay.

Mr. CLAY. Thank you, Madam Chair. I appreciate the opportunity to have this hearing today. We are facing a tremendous

problem of fair housing complaints filed by people with disabilities,

African-Americans, Hispanics, Asians, and women. And in 2000,

there were in excess of 23,000 complaints filed.

The National Fair Housing Alliance reported that the complaints

are highest among African-Americans, people with disabilities, and

families with children. And, Madam Chair, I would like to ask

unanimous consent to submit my entire statement to the record.

Thank you.

[The prepared statement of Hon. William Lacy Clay can be found

on page 59 in the appendix.]

Let me ask you, Mr. Marcus. Is there an Acting Assistant Secretary for Fair Housing and Equal Opportunity?

Mr. MARCUS. I am the General Deputy Assistant Secretary. And

I am serving in the function of the assistant secretary for most purposes.

Mr. CLAY. So you are handling the responsibility of the Assistant

Secretary?

Mr. MARCUS. Yes, Congressman.

Mr. CLAY. And has this vacancy affected the manner in which

HUD ensures compliance in enforcing fair housing laws?

Mr. MARCUS. We have worked as hard, and I would like to think

as effectively, in the absence of a Senate-confirmed assistant secVerDate 11-MAY-2000 14:31 Dec 02, 2002 Jkt 000000 PO 00000 Frm 00028 Fmt 6633 Sfmt 6633 C:\DOCS\82683.TXT HBANK1 PsN: HBANK1
23

retary. As we would under any other circumstances, we have, aside

from that person, the other 630-some-odd employees who continue

to work very hard to achieve our mission goals.

Mr. CLAY. How about the disparity between the amounts of complaints handled by private and government agencies?

Mr. MARCUS. That is difficult to compare—in part because the

term ‘‘complaint’’ is defined differently by different organizations.

So, to some extent, we are dealing with apples and oranges.

However, I am certainly pleased to see that so many matters are

being handled by private organizations. Many of the organizations

are being funded by HUD, some of them are not.

To the extent that these organizations are working with us,

whether they are receiving our funds are not, we certainly encourage them to file complaints with HUD, so that we can utilize the

resources that we have to solve the problems that they identify.

Mr. CLAY. Twice as many private agencies handle these complaints, as opposed to HUD and stage agencies. I mean what is the

reason for that?

Mr. MARCUS. Again, it is hard to break down the numbers exactly because the term ‘‘complaint’’ is defined differently. I think

that many of the matters that are identified by the private organizations will later be brought to HUD or state agencies; others they

will not bring to us for a variety of reasons including if they don’t

pan out.

I think that certainly those private agencies involved in our

FHIP program serve a very valuable function when they find a

very large number of potential claims and bring to us those which

they believe truly to be actionable.

I also believe that private organizations in many cases have

greater ties to the community; and, in some cases, greater levels

of trust within some communities, and are able to reach out a little

bit more effectively to communities. But that is one of the reasons

that we like to work with them.

Mr. CLAY. I see. The administration has made a number of public

pronouncements about its commitment to the rights of people with

disabilities, and I commend you and the Secretary for that commitment.

Does the administration intend to dedicate more mainstream

housing resources to people with disabilities?

Mr. MARCUS. I can tell you, speaking as acting head of the Office

of Fair Housing and Equal Opportunity, that we intend to work to

make sure that more mainstream inaccessible housing that is noncompliant is brought into compliance.

And we are making sure that through the discrimination side,

that we are working to try and bring a greater number of—what

you might call mainstream housing into availability and into compliance.

Mr. CLAY. And does that include new housing coming on line,

new units coming on line?

Mr. MARCUS. Yes, we are working in a number of different ways

to try and make sure that new units are accessible. When that

comes to public housing it involves, for instance, providing notices

to all public housing authorities of the requirements under the Rehabilitation Act to provide accessible features.

24

When it involves private housing, it can come in the form of a

number of initiatives that we have to try and make sure that new

housing is accessible for persons with disabilities.

That includes, for instance, working with the International Code

Council to try and ensure that local governments around the country are aware of the Fair Housing Act requirements, and to the extent that they choose to, can incorporate our requirements into

their codes.

It also involves a variety of education initiatives that we try and

ensure that architects, builders, and other development professionals are aware of, and what their requirements are, so that they

can build new compliant housing.

Mr. CLAY. What steps, if any, has the Secretary taken to appoint

a National Consumer Advisory Committee, as called for by the National Council on Disability report?

Mr. MARCUS. There have been a number of discussions about

what is the best way to gain access to the views of disabled persons

and disabled advocacy groups.

What we have been doing so far has largely been a series of informal meetings including, in some cases, very regular staff meetings and contacts with disabled people, as well as more formalized

meetings to get their views.

There has been some discussion about whether an advisory group

under that statute would be appropriate. It would have some advantages, some disadvantages, some questions about who the appropriate membership is, who is excluded, who is included, so on,

and so forth.

My concern has been to try and ensure that we have the greatest

possible number of views that we are hearing, so that we are not

just getting the views of only a small number of people.

Mr. CLAY. So you will not assemble a commission?

Mr. MARCUS. I don’t want to close the door to that option. We

certainly have not committed to it yet. And our approach, at this

point, has been to try to work informally, and to the greatest extent possible, to try and get all of the groups that have concerns,

and who would like to speak to us, to do so, rather than limiting

it to specified finite number of commission members.

Mr. CLAY. All right. Thank you.

Chairman KELLY. Thank you, Mr. Clay.

We go now to Ms. Waters.

Ms. WATERS. Well, thank you very much, Madam Chairlady. I

would like to submit my opening remarks.

Chairman KELLY. So moved.

[The prepared statement of Hon. Maxine Waters can be found on

page 75 in the appendix.]

Ms. WATERS. Thank you very much. I hear my colleagues asking

a lot about the complaints that are filed, and talking about the

need for more housing, and certainly the need to make sure that

the disabled are included in the construction and rehab in ways

that will accommodate them.

And, of course, we all have questions about predatory lending.

And we cannot help but wonder to what extent the predatory lending practices of our financial services community is eliminating the

ability for people to have adequate fair and decent housing.

25

With all of that, let me just ask. The President rolled out an initiative. And the intent of that initiative, as I understand it, was to

increase the number of housing units available because of the crisis

that we have; to support minorities and the disabled, and their

ability to access safe and decent housing; and all of that.

I have not heard the particulars of this initiative. Could you explain to us what the President and this administration is going to

do to expand the housing units that are available, and to make

sure that they are accessible to minorities and the handicapped?

How do you do that?

Mr. MARCUS. That is a big question, which has received—we are

glad to observe, a great deal of attention first from the White

House, and from the Secretary; and then increasingly through the

media during this June month of home ownership.

Within the Office of Fair Housing and Equal Opportunity, we

deal with one portion of the larger problem. I can tell you that

throughout the Department, virtually every program area is involved in the question of how can we make home ownership available to a greater number of people in general; and then, specifically, how can we close what is referred to as the minority home

ownership gap.

Our portion within the Office of Fair Housing and Equal Opportunity has been to find out to what extent has the lack of home

ownership, and, particularly, that home ownership gap been the result of discrimination?

And to the extent that it has been, how can we use the tools that

have been legislatively afforded to us in order to try and break

down those obstacles to home ownership which are associated with

discrimination?

And we have focused on that from the discrimination point of

view in a number of ways. The first has been to determine how can

we increase public trust and confidence in our complaint procedure,

so that when people face discrimination, they will come to us.

And that has led to the reforms that we are trying to work on

involving aged-case processing that I have talked about. We are

also concerned that the lending process might be a barrier to home

ownership.

Ms. WATERS. If I may just interrupt you for a moment, let me

refer you to—I guess this is your statement for today—where on

page 2, you say the study that you have been involved in reveal

that while the majority of mortgage lending transactions do not involve discrimination, blacks and Hispanics in the markets studied

tended to receive less information, less assistance, and worst terms.

Let’s see if we can’t get in sync on what discrimination—a definition of discrimination. What do you mean that the lending transactions do not involve discrimination, and then you go on to describe other forms of discrimination?

So I want to make sure that we have kind of a same definition

of discrimination.

Mr. MARCUS. Let me apologize again for what might be some

lack of clarity in this sentence.

What we tried to do in this study is to ask what happens when

caucasians, African-Americans, and Hispanics in Chicago and Los

26

Angeles go to lending officers and various financial institutions

seeking a loan.

And what we found is looking under any number of different specific criteria, most Hispanics and African-Americans received initially the same assistance, information, and terms and conditions

in the loans that were offered to them, as the caucasians did. There

was no way of determining any difference.

However, while most people did not face discrimination, we did

find that there was a statistically significant percentage of both African-Americans and Hispanics in both of those cities who did receive either less information about loans, or else they got the same

information but they got less assistance; or if they got the same assistance, they received worse loan terms.

Now, on the one hand, we are concerned that the information not

be taken out of context because we want to make sure that people

do not avoid mainstream lending institutions for fear of discrimination and end up in predatory lending situations.

But, on the other hand, even though most people did not face disparate treatment, we are very concerned that there are some——

Ms. WATERS. Do you have any numbers? Do you have numbers

on that portion which you identify as the ones that were discriminated against?

Mr. MARCUS. Yes, we would be happy to provide the study for

you, if you would like. I don’t have the numbers with me. I can say

that it was significantly below half. But, on the other hand, it was

enough that all of our experts agreed that it was statistically significant, and I can provide the details for you.

Chairman KELLY. Thank you very much, Ms. Waters.

Mr. Gutierrez, you have a point of clarification here?

Mr. GUTIERREZ. Yes, just the same—the way you had one on disability, I have one on discrimination. Sorry, I don’t—and forgive

me.

If you get worse terms, if you get less information, that is not

discrimination. Let me just finish. First, you state it is not discrimination; and then when I asked you about Elgin, there were 21

complaints made, you said that was a zoning and land use.

So if I use zoning and land use against a particular group of people—in the case of Elgin, latinos—it is a zoning and land use, it

is not a discrimination issue. It doesn’t—I am sorry—any one of

those things that you use that are targeted to a particular group

of people, as far as I am concerned, would be discrimination.

Because if I show up in a wheelchair, and you say I discriminated because I did not like the model of the wheelchair, not that

the person was disabled, and that you found that models of wheelchair people get a certain—it just—I think we had better clarify

what discrimination constitutes.

Mr. MARCUS. Sure. I don’t think we have any real difference of

agreement. Where it is difference in assistance, whether it is difference in information, whether it is difference in terms, I consider

any of that to be discrimination.

And even if most people don’t face it, we at HUD are very concerned about it. And since we found that it appeared that some

people did get either less information, or less assistance, or less of

27

anything, we considered that as discrimination. And that is why we

are going to focus in on it.

Now I don’t think that it is any less discrimination if it takes

place in a zoning area than if it takes place anywhere else. It is

just that under the statute, HUD is not supposed to make that

finding, the Department of Justice is. So it is not a question of

whether it is discrimination or not, it is a question of who has the

statutory authority to make the finding.

Chairman KELLY. Thank you very much, Mr. Marcus.

Mr. MARCUS. Thank you.

Chairman KELLY. Mr. Gutierrez and Ms. Waters have both

raised the same issue that came forward in my mind when I read

your testimony; and that is the definition of discrimination. At this

point, it seems to be very fluid.

I am wondering if there isn’t some way we could ask you to get

together with the Department of Justice and sort of give us all

some kind of definition of how you are—how you, in your department, your agency are going to handle the question of what defines

discrimination.

Because, as Mr. Gutierrez says, if somebody appears in a wheelchair, but they are discriminated against because that model

wheelchair isn’t approved of for one reason or another, is that—

does that qualify, or does the color of somebody’s skin qualify?

I think this is a very, very important issue. And, obviously, it is

a bipartisan concern. So, perhaps, you would be willing to do that

for us.

Mr. MARCUS. We will be happy to talk to the Department of Justice on that.

Chairman KELLY. Thank you. And I hope you will get back to us.

Mr. MARCUS. Yes.

Chairman KELLY. Thank you very much. The Chair notes that

some members may have additional questions for you, Mr. Marcus.

They may wish to submit those in writing. So, without objection,

the hearing record will be held open for 30 days for members to

submit written questions to you.

And we would like to have you place that response in the record.

And if you can respond to some of the issues that Mr. Gutierrez

and I just raised, I would appreciate that.

We will excuse Mr. Marcus, with our great appreciation. Thank

you very much.

Mr. MARCUS. Thank you.

Chairman KELLY. And, at this time, we would like to call for the

second panel of witnesses. As the second panel takes their seats at

the witness table, I am going to begin the introductions.

For our second panel, we welcome Ms. Sara Pratt, a Civil Rights

and Fair Housing Consultant, on behalf of the National Council on

Disability; and Ms. Becca Vaughn, Topeka Independent Living Resource Center Advocacy Coordinator; on behalf of Disability Rights

Action Coalition for Housing.

I want to thank each of you for being here and testifying for us

today. And I welcome you on behalf of the full committee. Without

objection, your written statements and any attachments that you

have brought will be made part of the record.

28

And, at this time, I want to insert as a part of the record, with

unanimous consent, a statement from the United States Department of Agriculture, sent to Chairman Roukema, who is the cochairman of this hearing today.

[The following information can be found on page 166 in the appendix.]

Chairman KELLY. But, without objection, your statements are a

part of the record, and you will each now be recognized for a 5-

minute summary of your testimony. Thank you very much. And we

will begin with you, Ms. Pratt.

Pull, if you could, Ms. Pratt, just make sure——

Ms. PRATT. Can you hear me?

Chairman KELLY. Yes, we can. Thank you.

STATEMENT OF SARA K. PRATT, CIVIL RIGHTS AND FAIR

HOUSING CONSULTANT ON BEHALF OF THE NATIONAL

COUNCIL ON DISABILITY

Ms. PRATT. Chairwoman Kelly, and ranking member Gutierrez,

and other members of the committee, thank you so much for the

privilege of allowing me to testify before you today.

As you have heard, I am testifying on behalf of the National

Council on Disability. It will come as no surprise to committee

members that illegal discrimination is alive and well, and actively

occurring today in our country’s cities and towns.

It occurs in rural areas, and in urban areas; it occurs wherever

apartments are rented, wherever houses are sold, wherever loans

are made, and wherever people who look a little different move into

new neighborhoods. Discrimination is as active in programs funded

by the Federal Government as it is in private housing.

Many observers would say that discrimination is more likely to

occur in programs funded by the Federal Government, especially

when the discrimination is directed at people with disabilities and

minorities who make up disproportionate numbers of the poor, the

underhoused, and the homeless in our country, those who are most

likely to seek housing from public housing authorities and assisted

housing providers.

I am one of three authors of a report issued by the National

Council on Disability last November, a report called ‘‘Reconstructing Fair Housing.’’ That report documents 11 years of enforcement of two major civil rights laws entrusted to HUD for enforcement by Congress.

One law, the Federal Fair Housing Act, applies to almost all

housing related transactions in this country. The other, Section 504

of the 1973 Rehabilitation Act, prohibits discrimination based on

disability by housing that is funded by Federal dollars, in this case,

from HUD.

These laws provide two critical pieces to protect people who are

injured by illegal discrimination. One is, as guaranteed by the Fair

Housing Act, inexpensive and speedy resolution of their claims

through administrative enforcement by HUD with full remedies

where discrimination is identified.

And, second, HUD initiated action to protect people proactively.

Separate from a complaint investigation process, they are requiring

compliance by its programs with nondiscrimination requirements.

29

The National Council on Disabilities Report concludes that HUD

has not funded or supported a strong effective functional system to

administer either part of this process. This failure has resulted in

an increasing loss of faith in the complaint process, a sense that

filing a complaint does not really make a difference.

It has also resulted in something just as important, harm to victims of discrimination, who do not know about their rights, who are

not protected by HUD even in its own programs and activities, who

are not protected by a timely and effective enforcement process,

and who thereby suffer discrimination without recourse.

The National Council on Disabilities report concludes that the

Department of Housing and Urban Development must do much

more to address unlawful discrimination by housing providers.

In summary, the report identifies three important ways in which

that should be done. First, the Secretary of HUD and the political

leadership of the department must lead the department in a topdown and bottom-up coordinated commitment to preventing illegal

discrimination, and righting the wrong wherever discrimination

has occurred.

This includes an organized civil rights enforcement program that

has long-term and short-term goals, that has a strategy and a rationale that is coordinated with HUD’s program offices, and that

includes strong, consistent, and speedy enforcement by program

and fair housing staff jointly; that is to say, between public housing

authority, PIH staff, and fair housing staff jointly between housing

staff and fair housing staff jointly, and so forth.

HUD should use program sanctions, like refusing to fund discriminators, and like debarment, routinely, and frequently in cases

involving discrimination by those who discriminate, and are funded

by taxpayer money.

Two, HUD must make a significant and sustained financial investment in enforcement of the Fair Housing Act, and the other

civil rights enforced by HUD. HUD’s Office of Fair Housing and

Equal Opportunity must be resourced to help its committed staff

do what must be done more effectively.

This includes, specifically, HUD must increase its staffing of the

Office of Fair Housing and Equal Opportunity to a minimum of 750

full-time equivalents, the staffing level at which FHEO operated

most effectively in the mid–90’s.

HUD must provide more and consistent training for its staff, and

for its funded programs, and HUD must significantly increase contract funds to support civil rights enforcement and compliance.

In addition, HUD must support unequivocal, and unrelenting enforcement of the non-discrimination requirements of both Section

504, and the Fair Housing Act, for rental and home ownership

housing including housing operated by HUD, the Hope VI program,

the Home Program, the Section 8 Project base program.

When compliance reviews conducted 13 years after the Fair

Housing Amendments Act were passed, and after Section 504 regulations were adopted, and units are still, in public housing authorities, not accessible to people with disabilities, and other significant

issues of discrimination remain, HUD should be referring these

matters to the Department of Justice for litigation. Thank you.

30

[The prepared statement of Sara K. Pratt can be found on page

93 in the appendix.]

Chairman KELLY. Thank you, Ms. Pratt.

Ms. Vaughn.

STATEMENT OF BECCA VAUGHN, TOPEKA INDEPENDENT LIVING RESOURCE CENTER ADVOCACY COORDINATOR ON BEHALF OF THE DISABILITY RIGHTS ACTION COALITION FOR

HOUSING

Ms. VAUGHN. I found it easier than Sara. Thank you very much.

I am honored to be here today to share our collective thoughts and

experiences concerning fair housing; or, perhaps, I should say the

lack of fair housing rights, and the blatant discrimination perpetuated against folks with disabilities.

I have been working in the disability rights movement most of

my life, and I particularly have an emphasis on housing. Most of

the folks that I have served over the years are people not only with

disabilities, but other protected status as well.

So I just wanted to share that a little bit, and who I am. I am

not merely concerned today. And I believe I have heard that from

you all. I think that we are all outraged at some—at the horrendous discrimination that continues to just erode away at the core

of our great nation.

I have to interject quickly that often those very entities that have

been entrusted with the enforcement of our fair housing rights,

have been the ones violating them the most. And I share that from

personal experience.

I find that extremely difficult today, in that, we sat and we heard

HUD talk about all of their wonderful commitments. And, yet,

many people in this room, and you all yourselves, can sit here, and

you know that it is just pretty words.

There are people every day that are literally dying on the streets.

They are becoming homeless because of lack of enforcement because we continue to fund programs that are segregated, because

we continue to allow folks to ask prohibited inquiry questions and

the nature or severity of disability.

We continue to allow folks to be forced to accept services in order

to get a roof, just a human basic right of a roof. All of these things,

in DRACH’s opinion, add up to equal status of lack of enforcement

on denying Americans with disabilities equal opportunity in our

country for housing of choice.

We believe that there are many things that have to be addressed

by this body if we are to truly achieve full integration and compliance. We believe that we must have full implementation of the

Olmstead initiative. We must stop funding programs that perpetuate segregation on the basis of a specific diagnoses of disability.

We believe that this body must, in fact, disallow programs that

require a human to accept a service. And we must increase home

ownership rates of folks with disabilities; currently, less than 2

percent is what we think. That is pretty pitiful.

And we would like to see that these are addressed in a global

arena, as opposed to segregated arena. And we have some specific

recommendations. One of the most important I think is that because of the blatant non-compliance with our fair housing rights,

31

we literally have been X’d out, or stepped out—let me correct myself—stepped out of the housing market through attitudes and

through actual cement barriers.

I think that we could begin to make a good progress in this country with the National Visitability initiative as well. That is why I

would like to plant the seed with you today. Visitability is just

what it says, the ability to visit our friends, family, and loved ones.

It is currently law in five states in our country and numerous cities, and DRACH would recommend that we seriously consider possibly following up on this type of initiative. I think it works handin-hand with the enforcement that we are here today addressing.

And that is probably about all I am going to say.

I just really feel honored to be in your presence to share this information. I would love to spend more time talking about all of the

cases that we have worked on over the years.

And, hopefully, this is the beginning, that we can work together,

a grass roots and the legislators, toward stopping this pattern of

blatant discrimination that keeps Americans with disabilities separated. Thank you.

[The prepared statement of Becca Vaughn can be found on page

154 in the appendix.]

Chairman KELLY. Thank you, Ms. Vaughn. Certainly, if you

would like to submit any further written material to the committee, we are more than willing to accept anything you would like

to give us.

Ms. Pratt, I understand that you worked on these issues at HUD

in the prior administration, and then left, due to being dissatisfied

with the efforts that the senior HUD management had made in

this area.

Can you discuss with us—I wonder if you will discuss that with

us, and if you have seen more of an effort made by this current

HUD leadership?

Ms. PRATT. I resigned my position, a senior SES position at

HUD, HUD’s Office of Fair Housing and Equal Opportunity, in

1999. There are three key reasons that I found problematic, as

someone whose entire career has been devoted to administrative

enforcement of fair housing and civil rights laws.

First is the diminished staffing and resources for fair housing

and civil rights enforcement in the beginning of 1995, and continuing thereon, that caused the necessity of running from one enforcement issue to the next, always trying to keep up without adequate resources to be able to address the many, many civil rights

issues that HUD confronts.

Second, my concern dealt with the devolution to field offices of

significant decisionmaking authority without adequate oversight

systems and guidance, a process which I think exacerbated some

of the structural problems.

And the third is the lack of top-down leadership that has to happen at HUD. The program offices, as well as the Office of Fair

Housing and Equal Opportunity, have to share in a commitment to

enforcement of the laws.

I have to tell you that staffing numbers that I heard Deputy Assistant Secretary Marcus, who, by the way, I have a great deal of

respect for, the numbers that he gave me on staffing of 610 fullVerDate 11-MAY-2000 14:31 Dec 02, 2002 Jkt 000000 PO 00000 Frm 00037 Fmt 6633 Sfmt 6633 C:\DOCS\82683.TXT HBANK1 PsN: HBANK1
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time equivalents is way below what the National Council on Disability Report suggests is adequate funding for fair housing and

civil rights enforcement.

And that is a specific finding, that the most effective work that

was done in fair housing in the last 11 years was during the period

1993 and 1994, where there was more staffing, more cases charged,

more complaints filed, and complaints investigations occurred more

quickly.

Chairman KELLY. Thank you. Ms. Pratt, on page 4 of your testimony, you talk about the annual number of cause cases that

dropped from 324 in 1994 to 96 in 2000. When I read that, I was

just astonished at the lack of—96 only in 2000.

What factor was the most significant in causing this?

Ms. PRATT. I believe it was the lack of staffing and other financial resources for fair housing and civil rights enforcement at HUD.

The National Council on Disabilities findings include a finding that

there was a significant drop in the number of staff during that

time period for fair housing enforcement and for compliance.

In addition, there was a drop of $1.8 million during that time period in contract money that supported investigations, the kind of

money you would use to do training, to hire expert witnesses, and

so forth.

Chairman KELLY. I just want to be clear. That is what you feel

happened from 1994 to 2000; that it was a significant drop. And

that is part of what you have, as I understood you correctly, what

made you feel that you were seeking employment elsewhere. Is

that fair to say?

Ms. PRATT. What I have recited to you are among the findings

of the Reconstructing Fair Housing Report. They also happen to be

consistent with my own views of the process.

Chairman KELLY. On page 4 of your testimony, ‘‘Underenforcement,’’ you state that one of the factors that have attributed to enforcement failures is a recent lack of effective management of

HUD’s fair housing enforcement and compliance operations.

When did these failures begin? And are we now seeing any improvement? And how long do you think it should take to correct

some of these failures?

Ms. PRATT. I believe that throughout the 11 years examined

through the Reconstructing Fair Housing Report process, there

were areas in which strong management processes were lacking.

HUD undertook an evaluation of its own enforcement process in

1995, through a study conducted by Price Waterhouse.

Those recommendations which were designed to improve the effectiveness of fair housing enforcement were unfortunately not all

implemented. In addition, the current administration’s lack of

issuance of guidance that will ensure consistent decisionmaking

among regions appears to be a continuing problem that has not

been addressed by this administration, and which began very significantly during the devolution process in the mid-’90’s.

Chairman KELLY. You are asking for more oversight, basically?

Ms. PRATT. The National Council on Disabilities recommendations include development of stronger guidance systems, better

technology systems, and more management oversight for more consistent and stronger outcomes nationally.

33

Chairman KELLY. Thank you. I am out of time.

Mr. Gutierrez.

Mr. GUTIERREZ. Thank you both for being here. I guess I want

to ask Ms. Vaughn. You said that certain types of people with disabilities that have certain medical conditions shouldn’t be segregated.

Are you specifically talking about people that are HIV positive or

have AIDS, and the development of housing for them? And if that

is a group, are there other groups like that?

Ms. VAUGHN. Yeah, I was not specifically talking about any of

the groups, but there are many programs within HUD that continues to be funded, that do allow for targeted housing toward specific groups of folks. It could be spinal cord injury; it could be multiple sclerosis; it could be cerebral palsy; it could be HIV AIDS. I

mean there is—MRDD, mental retardation.

I mean there is several of the programs and mortgage guarantee

programs that HUD does fund those type of projects; and, in

DRACH’s opinion, in direct violation of fair housing because we believe that that adds to the attitudinal barriers, as well as—you

know, segregation is not a good thing in any form, we have found

that out in this country.

So we are not saying that the individuals that have AIDS, HIV,

mental health issues, don’t deserve housing. We are saying perhaps

we need to look at a better way of adequate funding attached to

the people, so that they and their support team can then make an

informed choice and have the resources in place, you know, to find

the best option.

For example, most folks that I work with that have mental illness—or Tourette Syndrome would be another good example, are

not able to live in a multi-family complex. It is not workable.

So we tend to have a high rate of eviction. So there is a lot of

homelessness because of that, so single family, detached units, is

a preferred method. But the resources being attached to a building

limits those opportunities for folks.

Mr. GUTIERREZ. OK. Do you feel the same way, Ms. Pratt?

Ms. PRATT. I think Congress, when it passed the HOFWA, a program in particular, said in the enabling legislation that any other

provision of law, notwithstanding the HOFWA program, was allowed to serve particularly people with AIDS. So Congress made

that decision.

The difficulty comes not with congressional intent on particular

matters, from my point of view, but on programmatic decisionmaking or interpretations made much further down the food chain

at front line levels at HUD, or even in policies at HUD, as opposed

to congressional determinations.

Mr. GUTIERREZ. OK. And, Ms. Pratt, is HUD properly staffed at

the current moment to deal with the complaints, and the discrimination that exist in housing in the United States of America?

Ms. PRATT. Based on what Mr. Marcus earlier testified to, it is

not.

Mr. GUTIERREZ. And what would, in your opinion, be a correct

amount of staff?

Ms. PRATT. A minimum of 750 full-time equivalents.

Mr. GUTIERREZ. Or another 140 people?

34

Ms. PRATT. That is correct.

Mr. GUTIERREZ. As an advocate for people with disabilities, are

we—Mr. Marcus spoke when we—I know I believe we were asking

him about how many—what they were doing in terms of—and he

said, ‘‘Well, we are enforcing it. We are making sure that when

public housing does this, or when somebody develops this’’—in

other words, we are telling people build homes with people for—

that people with disabilities can use. That is what I heard him say.

But I think the question was—and so I will ask you.

Are there enough units being created currently, so that people

with disabilities can find a unit?

Ms. PRATT. Absolutely not.

Mr. GUTIERREZ. And what would you suggest that we do?

Ms. PRATT. Well, I would suggest, at the very least, that Congress invite HUD to take stronger enforcement efforts against public housing authorities, and assisted housing providers, who already have had on the books for 13 years obligations to provide accessible units.

And housing authorities such as the Boston and D.C. housing authorities who now, 13 years later, have 10 or fewer accessible units

in total non-compliance with the law should be the subject of

stronger enforcement action than simple agreements to do better in

the future.

HUD should send a message to assisted and public housing providers, as it should send all of its programs, that people with disabilities and other people who are subject to discrimination need to

be considered and treated in an appropriate way upfront in the

programs and not excluded by making agreements with units with

steps.

Mr. GUTIERREZ. Let me ask you one last question. If in a municipality zoning and land use issues arose, and 21 people in wheelchairs, and in other conditions of disability were the only ones targeted by these zoning, and it was found that they are the only

ones, is it a land—in your opinion, is it a land use and zoning

issue, or is it a discrimination issue against people with disability?

Ms. PRATT. Representative Gutierrez, it is a discrimination issue.

Mr. GUTIERREZ. Thank you very much.

Ms. PRATT. You are welcome.

Chairman KELLY. Thank you. Ms. Lee.

Ms. LEE. Thank you, Madam Chair. Let me just ask you a couple

of things about a couple of points Mr. Marcus made, primarily in

his written testimony. I am not sure if he presented this today verbally. But he indicated that the President in his new freedom initiative has launched an effort designed to help persons with disabilities live more independently in all communities.

Do you have some feedback on this new freedom initiative, in

terms of what you think that it will accomplish, and if it is going

to take care of the needs of the disabled community?

Ms. PRATT. I can’t testify about that from the point of view of the

National Council on Disability because that was not a subject in

the report. I do not believe—I may be wrong on this—but I do not

believe that HUD has issued information that identifies what actions it will take with respect to specific implementations of the

new freedom initiative.

35

Ms. LEE. Ms. Vaughn, do you have any take on this?

Ms. VAUGHN. Yeah, our opinion of it is that—what initiative was

that? I am sorry.

Ms. LEE. Within the new freedom initiative which the President

recently announced, there is an effort incorporated in this to assist

people with disabilities to live more independently.

Ms. VAUGHN. I am sorry. I was being facetious. That is how we

feel out in the community, is that we know about the initiative,

and very active in its—or attempting to be active with implementation of that.

And often out in the community, that is what we will say. We

will say, ‘‘Well, what initiative? Is there one?’’ So that is sort of——

Ms. LEE. That is an answer in itself.

Ms. VAUGHN. HUD did issue a preliminary report under that. I

actually brought it to D.C., but I left it in my room. But I can get

that for you.

And, again, and just like Sara said, I mean, they did not really

recommend any options, solutions to achieve the goal of the plan

of the freedom initiative which is integration and full recognition

of civil and human rights for folks with disabilities.

Ms. LEE. OK, thank you. Madam Chair, perhaps, then, this committee needs to look at how that provision should be implemented.

It may require some legislation from our committee to make sure

that it is implemented in a way that makes sense for people living

with disabilities.

Chairman KELLY. Well, I think that that is part of the reason

why I am glad you asked the question. That is what this hearing

is about.

Ms. LEE. Thank you, Madam Chair. And let me just ask one

more question about the enforcement of the provisions of the Fair

Housing Act for the past 11 years as it relates to the enforcement

with regard to people living with disabilities, and enforcement of

disability—what do you think has been the trend—I mean are

you—do you think we are making progress, in terms of equal opportunity and fairness in housing for people with disabilities, or do

you think we are stuck?

Ms. VAUGHN. Is that for both of us or?

Ms. LEE. Yeah.

Ms. VAUGHN. In DRACH’s experience—and we are a national

grass roots organization, and we are folks with disabilities ourselves—we have found that it is sort of the old adage of you take—

you know, you roll a couple of inches forward, and then you lose

a few inches backwards.

We have seen some progress made on the grass roots level, in

that, we feel like that we have done a good job with outreach in

educating individuals with disabilities themselves about their existing rights, and how to exercise those rights.

We continue to see that there are institutional barriers, and primarily perpetuated by the very enforcers of our rights. HUD, in

this case, FHAP agencies, real quick story is I had a FHIP grant

a couple of years ago. We did a statewide project to train folks on

these issues, an outreach to building industry, you know, everyone

in the state, very successful project, 18 month grant.

36

We reapplied to do it four state. And our region in Kansas City

HUD said, ‘‘You are not going to do it. We are not going to approve

it. And all we want you to do is to send us the list of people you

talked to, and then we will decide if there is a complaint.’’

So all of our efforts to do education were stopped by HUD regional office. We pulled off the grant, my organization did, because

we felt like that we would not be a part of them attempting to

water down the importance of our rights.

This is just a little story that happens every day, trying to assist

folks to exercise their rights through filing complaints has been a

really incredible experience as well. Oftentimes, folks are very intimidated to even come to the decision to file a complaint.

I mean it is a very hard thing because you might lose the little

roof that you have. And so, oftentimes we are asked to be representatives of those complaints. And it took me about 4 years in

Kansas city office before they—I came up with the right form that

would recognize that the individuals wanted me to assist them in

representation on their fair housing complaint.

So I don’t know if that answers your question. But we feel like

we have done some great work on the grass roots advocates level,

and feel like that we have the tools to be able to effect greater

change. But we are interfered with often by the folks that are entrusted to investigate and uphold those civil rights.

Chairman KELLY. Thank you, Ms. Lee.

Ms. Waters.

Ms. WATERS. Well, I think this hearing is absolutely making it

clear that these very serious problems exists, and it seems to have

even gotten worse, as it relates to both discrimination against minorities and the disabled. There are a couple of things I am wondering about, you may be able to help me with.

The first is I am beginning to understand the definition of the

disabled to include the elderly, that may be living in public housing

that needs some assistance in order to pay their rent, or to just get

some very basic things done.

I don’t really believe that—or most of the elderly in public housing is getting that kind of assistance. What I think is happening

is we have a growing number of elderly, who may be entering the

first stages of Alzheimer’s. They want to stay in their homes. They

do not want to go to nursing homes or group living. They can prepare food for themselves.

They can take care of themselves pretty good, but they cannot

carry out all of the functions that they have been doing when they

were younger, and before they started to enter this stage. They

could probably stay in their homes another four or 5 years with a

little bit of assistance.

Do these people qualify as the disabled? And what do you know

about this group of folks? What are we doing with them? Either

Ms. Pratt or Ms. Vaughn.

Ms. VAUGHN. Thank you. It is an excellent question. I think you

are on the edge of an incredibly important issue in our country that

we are facing right now. The issue of having adequate in-home

community supports is a very critical issue to our nation.

Now, as you all know, we have several—there are two national

legislations pending, Mi Casa. Hopefully, all of you all are endorsVerDate 11-MAY-2000 14:31 Dec 02, 2002 Jkt 000000 PO 00000 Frm 00042 Fmt 6633 Sfmt 6633 C:\DOCS\82683.TXT HBANK1 PsN: HBANK1
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ing that. It is Mi Casa. And what that is, is that would amend the

social security law in order to really throw open the door to the

possibility of additional services in-home supports for folks of any

age with any disability that need the assistance based on financial

need, as well as degree of disabling condition.

And I think that we have to—when we look at—the reason I

mentioned Olmstead before in my testimony was because that is

what Olmstead is, it is a most integrated setting.

OK. So folks do not have to unnecessarily be institutionalized

early, or whatever; when, in our opinion, they never need to be if

there is adequate in-home services. And, certainly, folks who are

aging often want to tell you, ‘‘Well, Representative Waters, I am a

person with a disability.’’

I know you had heard that before. But they do need some increased attendant services. If they are getting adequate housing

that fits their needs, as far as affordability and accessibility goes,

and they are being reasonable accommodated in those needs, then

we have to assure that there is adequate funding for the in-home

support.

I am not sure that we can pay for that through housing funds—

and I am not sure we would want to because that may limit our

housing funds. But I believe that we have to again look for equal

opportunity for people with disabilities of any age, is a holistic approach.

I mean it is a global issue, several issues that are rolled to one.

And you cannot have success without the other one there.

Ms. WATERS. Thank you. Let me just. What do you know about

this memorandum of understanding that is in the testimony that

was just given of Mr. Marcus between the Department of Justice

and the Treasury to ensure low income residential renting housing

is placed in service under the IRS administered low income housing

tax credit program, and that it is accessible to people with disabilities.

It seems to me there is great potential there, but I have not

heard any details or specificity about how we can take the tax credits and force or dictate to those who get them, the developers who

have the advantage of the support from their tax credits, how can

we get more housing for the disabled?

Ms. PRATT. Well, this memorandum of understanding addresses

low income tax credit housing issue if identified correctly. Most of

that housing was built since 1994. And all of that housing is required, most of it, not all of it, but most of it has been built since

1994, and it is covered by the Federal Fair Housing Act. It is required to be accessible and usable, accessible to and usable by people with disabilities.

Unfortunately, we hear increasing reports of discrimination by

tax credit properties, either that they have not been built to be accessible in the first place; that they discriminate based on race or

national origin, or that they discriminate against Section 8 certificate and voucher holders, something that is covered by Federal

law. They are prohibited from discriminating against Section 8

holders, as a matter of Federal law.

These are matters which should be handled through complaints

investigated by HUD. Unfortunately, it appears that the amount

38

and extent of discrimination out there exceeds the number of complaints that are currently being handled by the Department.

IRS has the ability to condition tax credits on compliance with

the laws currently. It has never exercised the authority. It is a

process that is monitored by state housing finance agencies and reported to the IRS, and the IRS has the capability of conditioning

tax credits for properties that engage in unlawful discrimination.

Ms. WATERS. Thank you.

Ms. VAUGHN. Additionally, if I may, the Section 42, which is

what you are referring to, the low income housing tax credit, currently are not seen as a recipient of Federal financial assistance.

So 504 does not—is not enforced on those properties.

I believe that would be a very good move to include that. What

504 gets us, of course, is the greater accessible units in the very

newest part of towns with the nice features, and those type of

things.

I know in my state in Kansas, we actually exceed the Federal requirement, and that we do require our low income housing tax

credits we administer in our state to have the features of Section

504, but that is not the norm.

Chairman KELLY. Thank you both very much for your testimony

today. The Chair notes that some members may have additional

questions for the panel, and may wish to submit them in writing.

So, without objection, the hearing record will remain open for 30

days for members to submit questions and for responses for the

record.

The second panel is excused, and we thank you very much, with

great appreciation for your time.

Ms. VAUGHN. Thank you.

Chairman KELLY. As our third panel takes their seats, which I

hope they will be doing now, I will begin the introductions.

We welcome Ms. Shanna Smith, President and CEO of the National Fair Housing Alliance; Mr. Philip Tegeler, Legal Director of

the Connecticut Civil Liberties Union; and Mrs. Barbara Arnwine,

Executive Director of the Lawyers’ Committee for Civil Rights

Under Law.

I want to thank each one of you for testifying before us today,

and I welcome all of you on behalf of the entire full committee.

Without objection, your written record, or your statements will be

a part of the record. And I will go to you now for a brief 5 minute

testimony of your statements. And we will begin with you, Ms.

Smith.

STATEMENT OF SHANNA SMITH, PRESIDENT AND CEO,

NATIONAL FAIR HOUSING ALLIANCE

Ms. SMITH. Thank you to you, Chairman Kelly, and Co-Chairman

Roukema, and the ranking members, Frank and Gutierrez.

I am Shanna Smith. I am president of the National Fair Housing

Alliance. And I have been working through the HUD process for

more than 27 years. I outlined issues of where the deterioration in

the relationship between the private fair housing groups and HUD

began.

In the eight issues I raised, No. 2 dealt with the requirement

that the fair housing groups return their funds to the U.S. TreasVerDate 11-MAY-2000 14:31 Dec 02, 2002 Jkt 000000 PO 00000 Frm 00044 Fmt 6633 Sfmt 6633 C:\DOCS\82683.TXT HBANK1 PsN: HBANK1
39

ury when we recovered money. I wanted to say that while that was

implemented under Secretary Cuomo, it was because during the

appropriations hearing for the FHIP program, the majority required that we do return these funds.

And we tried to speak with the Republican leadership to explain

that it is not double dipping, that it was wise for us to reinvest the

monies we receive in settlement back into the program because of

the low funding level with the fair housing enforcement.

I am concerned that under the current administration some of

the problems continue, and additional problems have been put into

place. The last 4 days, we have had our national conference. And

the state and local substantial equivalent agencies participated in

our conference, and their president was with us.

And I told them that there is this five point penalty for the private fair housing groups who apply under the FHIP program, and

that we may not get the money, which means that the state and

local agency will have fewer complaints. If they have fewer complaints, then they get less money from HUD. If they get less money

from HUD, they can do less work.

I will tell you that we did spend a week with HUD in Orlando

for a policy conference, and the private fair housing groups came

back very disillusioned. We felt that there is an intent at HUD, to

eliminate our work.

And what is remarkable is that out of the 20,000 complaints that

were filed just in the past year, that is less than 1 percent of the

estimate of housing discrimination that occurs in the United

States.

We have done investigations and studies where Hispanics have

experienced a 100 percent rate of discrimination. We did this

study—it was not a study. I am sorry. It was enforcement investigation in Chicago, and it dealt with homeowners insurance. And

every single Hispanic who called to try to get homeowners insurance experienced discrimination.

Every African-American who called, 50 percent of the time to 70

percent of the time, they were denied homeowners insurance. You

heard Ken Marcus say that our complaint information, the 23,557

that were dealt with this year, we are dealing with apples and oranges. That is incorrect.

Our complaints are defined exactly how HUD and the state agencies define complaints. A complaint is when someone calls us and

we speak to them. We spend 2 hours in our intake with an individual. And we determine during that time if the allegation they

are bringing is covered under the Federal Fair Housing Act.

So to say that we had more than 16,000 complaints of discrimination last year, the numbers that HUD and the state agencies get

tend to be referrals from us. Their complaints are very—very few

of those are in addition to what we refer to them after our investigation.

About a third of the complaints that we handle show no probable

cause after an investigation; another third show cause. And we try

to take cases through an administrative process to remedy the situation as quickly as possible, to secure housing for the victim of

housing discrimination, to secure the loan, to secure homeowners

40

insurance, to stop the racial harassment, or the sexual harassment

of the victim.

Unfortunately, the administrative process fails us completely in

securing housing. We are forced to go into Federal and state court

to get temporary restraining orders to prevent our client from losing the housing.

One of the things I would like to emphasize is that HUD has had

an obligation since 1974 to promulgate in affirmatively furthering

fair housing regulation under the Housing and Community Development Act. It is today, 2002, there is still no regulation.

As a result, more than 1,000 communities in states that receive

community development block grant monies don’t promote fair

housing, education, and enforcement. We have recovered and reviewed more than 600 of the analysis of impediments that these

cities and states and counties have been required to create and document what are the barriers to fair housing.

What are the barriers to home ownership for people of color, people with disabilities, families with children, and women? And, overwhelmingly, the cities, and counties, and states have failed to address those issues.

The last thing I want to say is that we would recommend that

these committees request HUD to provide for you the Urban Institute reports. Congress funded these reports. They are supposed to

show us what the rates of discrimination are in rental and sales

issues.

The reports and the testing are done, and HUD has those documents. And I think it would help the committee to know what is

the nature and extent of discrimination, so you could appropriately

fund those programs that address. Thank you.

[The prepared statement of Shanna Smith can be found on page

121 in the appendix.]

Chairman KELLY. Thank you very much, Ms. Smith.

Mr. Tegeler.

Mr. TEGELER. Thank you. My name is Philip Tegeler.

Chairman KELLY. Mr. Tegeler, pull that microphone closer to

you.

Mr. TEGELER. Thank you.

Chairman KELLY. And thank you. Would you please pull it a little closer even? I think that we can all hear it better. Thank you.

STATEMENT OF PHILIP TEGELER, LEGAL DIRECTORY,

CONNECTICUT CIVIL LIBERTIES UNION

Mr. TEGELER. My name is Philip Tegeler. I am the Legal Director

of the Connecticut Civil Liberties Union in Hartford, Connecticut.

On behalf of the ACLU, I would like to thank Chairpersons Roukema and Kelly, and ranking members, Frank and Gutierrez, for

calling this important hearing on fair housing enforcement.

As an ACLU lawyer, much of my work is focused on government

action, as opposed to private acts of discrimination. For example,

we have challenged discriminatory government policies onsite selection, tenant relocation, Section 8 administration, admissions

policies, and exclusionary suburban housing and zoning policies.

From this perspective, I have a few simple points to convey

today. First, few government housing actions are race neutral.

41

HUD basically has a choice in every program it operates; whether

to support continued segregation of our metropolitan areas, or to

take affirmative steps to desegregate and to promote racially and

economic diverse communities.

Second, because of HUD’s powerful impact on race and segregation, the agency’s most important fair housing enforcement role is

in its own programs in requiring affirmative fair housing enforcement among HUD grantees, which include local public housing

agencies, private housing managers, and municipal governments.

The devolution of authority to local PHA’s, housing managers,

and municipalities has worked in many areas, but it has not been

a fair housing success story. Like any other civil rights requirement, fair housing is controversial, and it is susceptible to local political pressure and prejudice.

Congress needs to help HUD take back control of the civil rights

review process, and adequately fund and prioritize fair housing enforcement against HUD grantees. This will require, among other

things, a fully staffed and funded Office of Fair Housing and Equal

Opportunity.

Third, an assessment of racial impacts of actions and policies

should be factored into all HUD decisionmaking. This is required

in some HUD programs, but is unevenly enforced. Programs like

Hope VI, the Home Program, the Low Income Housing Tax Credit

Program, and Section 8 need to have much stronger civil rights

goals and assessment procedures.

These are programs that directly effect where large numbers of

Americans live; and the effects of these programs on racial segregation and poverty concentration, need to be taken much more seriously.

The Section 8 program, which is now called the Housing Choice

Voucher Program, is a good case in point. Funding was recently cut

for successful programs that helped families find apartments in

lower poverty neighborhoods.

These programs, including the Moving to Opportunity Program,

and the Regional Opportunity Counseling Program, were working

to provide families with information about desegregated housing

options and helping them to apply for housing.

Without these programs, it is even more difficult for families to

move out of high poverty neighborhoods using housing vouchers.

There are many other aspects of the Section 8 program that could

be strengthened to promote fair housing.

Just as one example, we could move toward a more efficient regional administration of the Section 8 program. We could change

the archaic system for setting local rents to increase the number

of neighborhoods and towns that tenants have to choose from.

Section 8 is currently our largest Federal housing program, and

it has the most potential of any program to decrease segregation

in our metropolitan areas. Fair housing should be part of this program’s core design. There are many similar examples throughout

HUD’s programs.

As I pointed out in my written testimony, a large coalition of

legal services and civil rights organizations requested a meeting

with Secretary Martinez on these issues last spring, and we would

be very much in following up on that request this year.

42

Finally, we would encourage the committee on, after reviewing

the Millennial Housing Commission Report, which was recently

submitted to Congress, to ask for a follow up report on fair housing. The Millennial Housing Commission Report contains some

very important recommendations on new housing production, particularly housing production for very low income families. But it

does not address fair housing enforcement in a systematic way.

To implement these important recommendations, fair housing

will need to be factored in from the beginning. And if this committee can appoint some type of task force to look at this, I think

it would be very important. Thank you.

[The prepared statement of Philip Tegeler can be found on page

139 in the appendix.]

Chairman KELLY. Thank you very much.

Ms. Arnwine.

STATEMENT OF BARBARA ARNWINE, EXECUTIVE DIRECTOR,

LAWYERS COMMITTEE FOR CIVIL RIGHTS UNDER LAW

Ms. ARNWINE. Good afternoon. I am Barbara Arnwine, Executive

Director of the Lawyers’ Committee for Civil Rights Under Law. I

would like to thank——

Chairman KELLY. Ms. Arnwine, are you sure that that microphone is turned on?

Ms. ARNWINE. Let me—how is that?

Chairman KELLY. That is a lot better. Thank you, ma’am.

Ms. ARNWINE. OK. I would like to thank Chairman Sue Kelly,

Chairman Roukema, and Representative Frank, for holding these

important hearings on fair housing enforcement.

My comments today focus on the Lawyers’ Committee’s concerns

with the Department of Housing and Urban Development’s declining efforts at ensuring the principals of fair housing, as set forth

in the Constitution and Title VIII of the Civil Rights Act of 1968.

We want to make sure that they are not only memorialized in

words, but that these protections are also adhered to indeed by the

Department. Over the past 10 years, we have seen the Federal

Government’s involvement in the enforcements of fair housing and

other civil rights laws decrease dramatically.

This trend is alarming at a time when the number of civil rights

complaints is rising, and thus the need for leadership of agencies

enforcing vital civil rights laws is even greater. Unfortunately, the

alarms ring, it has been met by deaf ears at HUD, and other Federal agencies responsible for enforcing and ensuring equal justice

under our housing laws.

First, the Lawyers’ Committee has serious concerns with the

HUD complaint process. The starting point for any problem is the

vast reduction and funding of FHEO at HUD. As would be expected, the reduction in funding and staff has taken its toll as

HUD has been unable to keep up with its increasing workload by

failing to conduct timely and complete investigations of fair housing complaint, HUD prolongs fair housing acts violations, and its

conduct threatens this country’s commitment to ensuring that

every American will be free from discrimination in housing.

What is more troubling than HUD’s delay in investigating complaints, or HUD’s recent efforts to reduce the backlog of comVerDate 11-MAY-2000 14:31 Dec 02, 2002 Jkt 000000 PO 00000 Frm 00048 Fmt 6633 Sfmt 6633 C:\DOCS\82683.TXT HBANK1 PsN: HBANK1
43

plaints, rather than providing more staff to investigate and pursue

these complaints, HUD has taken Congress’s clear mandate to operate a straightforward, user-friendly complaint process, and

turned it on its head.

They have created an elaborate like system designed to administratively dismiss complaints without conducting any investigation

to determine the merits of the underlying client claim. This reprehensible conduct by HUD seemingly returns us to a day where

we had a law that banned discrimination, but without ‘‘an effective

enforcement system to make that promise a reality.’’

Through the work of the Lawyers’ Committee and our affiliates

and other groups across the nation, we have seen numerous and

repeated failings by the FHEO staff to meet the congressional goals

set forth in the Fair Housing Act. The problems we have seen include a couple of examples:

(1) In one case, where there was clear evidence of discrimination

including letters signed by the respondent harassing the complainants, and attempts by the respondent to run over the complainants

with a car, more than 15 months have passed since the complaint

was filed and the investigation has not been concluded.

In another case, HUD refused to accept the complaint because it

was printed on an improper form. The form, it should be noted,

came from HUD’s own website that they recommended to complainants to use.

And, yet, another case brought by the Boston Lawyers’ Committee, our affiliate organization, HUD has adopted strained analyses of legal principles that work to deny fair housing organizations standing where established precedent would grant them.

Thus, HUD has adopted legal theories and imposed additional requirements on complainants that are neither required nor permitted under the Fair Housing Act, or HUD’s implementing regulations.

The Lawyers’ Committee is gravely concerned about these growing burdens, these burdens on complainants with great and important cases that HUD’s attempts to reduce its backlog through administrative gimmicks rather than through investigation and resolution of the case is particularly troubling and clearly goes against

Congress’s intent when they passed the Fair Housing Act amendments in 1988.

Using administrative schemes to avoid HUD’s investigative responsibilities is shameful, and also fails to fulfill HUD’s statutory

obligations to investigate an eradicate housing discrimination. It is

clear that further oversight and guidance from Congress is needed

now more than ever.

We are not only concerned about these matters, but we also are

concerned, as has been expressed by my colleagues, about the failure to merge—to look at the failure to enforce fair housing laws by

various cities and regions; and, at the same time, granting them

more money under other programs including the Hope VI Program,

the Low Income Tax Credit Program, the Community Development

Block Grant Program, and others. HUD must gather and use this

information.

In closing, we call on Congress to enforce our laws, to hold HUD

much more accountable, to make sure that it is complying with its

44

obligations, and that we must make sure that they do not continue

to put stumbling blocks in the path of those who are certain that

violations of their rights under the Fair Housing Act, and that instead they are living up to their obligation to affirmatively further

fair housing. Thank you so much.

[The prepared statement of Barbara Arnwine can be found on

page 76 in the appendix.]

Chairman KELLY. We thank you. That is quite a statement, Ms.

Arnwine.

Ms. Smith, in your statement, you go into detail about the

downsizing of the Office of Fair Housing and Equal Opportunity,

and the staff was just decimated.

Is it your observation that this was not conducted properly, and

that a center of knowledge and experience was not maintained

there?

Ms. SMITH. I cannot respond to whether it was conducted properly or not because I am not familiar with how HUD moves people

around. But we did lose a number of highly skilled people, Sara

Pratt being one of them.

I think Sara gave you some of the reasons why she left. But, in

addition, there were people who told me they left because of the

changes in management; but also because in the appropriations

arena, Congress said to HUD under the FHIP program and the enforcement, they could no longer do special enforcement projects.

And by not being able to attack the institutionalized systems of

discrimination, people were disillusioned. And the senior—the most

senior staff, who were both Republicans and Democrats, who

worked at the division left, and went into private practice.

Some came to work for us, some went to work at much lower salaries in the private fair housing movement because they thought

they could make a difference. The devolution though was a problem. Devolution in the fair housing side is a serious problem. Headquarters must make the decisions.

Chairman KELLY. I am sorry. I did not mean to interrupt you.

Did you feel that fair housing enforcement was not really a priority for Secretary Cuomo here?

Ms. SMITH. I think enforcement was, but structuring it in a way

that would be most effective was difficult. He was competing with

mandates from Congress that the private fair housing groups could

not bring homeowners insurance actions; that it should not be covered under the law.

He was dealing with the issue of Congress saying that the fair

housing groups should not be able to use the awards that they receive, that were given to us by courts, and lawfully given to us to

recover our expenses, has to go back to the U.S. Treasury.

And then, on the other hand, he—there was a lot of press that

was going on, but there was no consistent funding for the private

groups who were bringing and filing the majority of the cases in

the country. And the changes to the FHIP NOFA process, we found

to be very detrimental to enforcement.

And, now, even more punitive issues have been added into that

process. And so, we sit here as the private fair housing enforcement

movement and education movement feeling no support from ConVerDate 11-MAY-2000 14:31 Dec 02, 2002 Jkt 000000 PO 00000 Frm 00050 Fmt 6633 Sfmt 6633 C:\DOCS\82683.TXT HBANK1 PsN: HBANK1
45

gress or the Department to do the job that needs to be done, in

fact, that HUD’s charged to do.

But Congress found in 1990 that fair housing groups do a good

job of providing education and enforcement, and therefore created

the fair housing initiatives program under President Reagan, and

with the leadership in Congress at that time. And it became a permanent program under President Bush, and the money was increased by Congress.

And under Secretary Cisneros, the program expanded. And, as

you heard Sara testify, that some of the strongest enforcement was

going on because the funds were coming from Congress. We had

good leadership in Secretary Cisneros, and then there was a

change.

The money had many more conditions placed on it. And even

today, with the $20 million that has been allocated, less than $12

million is being used for enforcement for the whole United States.

This is very difficult. It is a sad situation. I have complaints

pending at HUD. As a national organization, we have a complaint

that was filed in 1997, and very little—there was some investigation in 1999, some in 2000, and HUD has not proceeded with the

investigation, and we had to file in Federal District Court. And

that is not our chosen way to resolve a complaint. We want to try

to work with the industry in an administrative process.

Chairman KELLY. Thank you. I have got a little bit more time.

I want to ask you one more question.

You made a special reference to the disaffected populations of

non-English speaking immigrants like the Hispanic and the Asian

populations. Secretary Cuomo spoke to us then about the efforts

that the department was making to address their housing needs.

What is your evaluation of those efforts that he said were being

made?

Ms. SMITH. I think the FHIP program has ended up being the

catchall for innovative programs when Congress says something, or

someone comes up with an idea in fair housing, they say, ‘‘Well, we

will let the FHIP groups do it.’’ But then there is no corresponding

funding for us to do that.

Most of the fair housing, private fair housing agencies have

maybe three or four staff people. And we said to Secretary Cuomo

at the time, as we said to Secretary Martinez, we need more

money, so that we can hire staff who will speak Spanish, who will

have connections with the Asian-American communities.

And, as you see, we have a high rate of disability cases that we

handle. And that is because HUD and Congress focused money on

that, and Secretary Cuomo focused money on disabilities. Our race

cases remained level, our disability cases increased, but complaints

from people who are Hispanic-Americans and Asian-Americans remain very flat.

And, in fact, we get more than the government gets, and yet it

is very difficult unless we get enough money. I think Secretary

Cuomo asked for more money for the FHIP program, as I recall,

and we did not get it. And if we don’t get the money, we cannot

reach all of the protected classes, and there are seven of them

under the Federal Fair Housing Act.

46

Chairman KELLY. Thank you very much. My time is up. Mr.

Frank.

Mr. FRANK. Ms. Arnwine, I apologize. I had a very important

piece of legislation that will be coming up soon deeply affecting the

fishing industry in my district and I had to go off.

But I know you were present when I was questioning Mr.

Marcus, and he was in fact denying some of the things you asserted. He can’t know everything obviously in the Department. And

then I had to step out briefly during testimony. But I assume you—

did you address that disagreement?

Ms. SMITH. Yes.

Mr. FRANK. And how do you reconcile that?

Ms. ARNWINE. Well, I think it is just embarrassing for HUD to

admit that they have forms on their website——

Mr. FRANK. Oh, Ms. Arnwine, you are an expert on a lot of

things, but I am an expert in some things. Please do not overestimate HUD’s ability to be embarrassed. I think you will find that

that is not as easy as you think, but please go forward.

Ms. ARNWINE. I think that he obviously did not want to admit

to it. I mean it is embarrassing that they have this form that is

on their websites that when complainants go to HUD to try to figure out, you know, how do they come forth and register a complaint, that they find these forms; they then download them—if

they are able, you know, they have computer access—they take

those forms, they fill them out, they send them to HUD.

They have a very reasonable expectation that those forms are

going to be processed and followed up on by HUD. What instead

happens is that HUD gets the forms, and in many cases rejects

them.

Mr. FRANK. Is that still happening? I mean this is not——

Ms. ARNWINE. Yes, yes, it still happens.

Mr. FRANK. All right. Let me make this proposal.

Ms. ARNWINE. Still happens.

Mr. FRANK. Because I don’t want these things just to be brought

up here and dropped.

Ms. ARNWINE. Yes.

Mr. FRANK. If you will send to me some documented cases of

that——

Ms. ARNWINE. Yes.

Mr. FRANK.—I will then send it on to Mr. Marcus saying ‘‘this

is what you told me did not happen.’’ I don’t mean to say that he

was being dishonest. But, obviously, there are things he wasn’t

aware of, and I will directly call those to his attention, any other

disparity of that sort, where you can document them.

Yes, go ahead.

Ms. ARNWINE. Right, because the other thing they do that really

is very troubling is that they take the form, sometimes even the

forms that they accept, they will take them and they retype them

for summaries, and then they send them back to the complainants

to sign them.

As you know, that is totally in the 100 days, the complainants

get these forms back, don’t recognize what is required, and don’t

know what to do. It is another way where we losing——

47

Mr. FRANK. All right. Now let me ask you. When they retype it

and send it back, does that stop the statute, or does it keep running?

Ms. ARNWINE. No, it keeps running. That is a big problem.

Mr. FRANK. All right. One of the things, if you will remind me,

I will say to them that if an application is filed, it seems to me—

let me ask you this. You are the experts in law.

Is there any statutory barrier which keeps them from starting

the clock on the day they get the completed and formal application

rather than the initial one?

I mean could they, if they said, ‘‘Well, that is not right, but you

have got to redo it, but I will start the clock when I get the new

one?’’ Is there a statutory problem there?

Ms. SMITH. Yeah, there is.

Ms. ARNWINE. The statute talks about 1 year from the date of

the discrimination.

Mr. FRANK. All right. So that means then they have to take up.

Although maybe we can also look at the statute, and perhaps put

into the statute a little more flexibility. But, in the meantime, they

have got to work on that.

Ms. Smith, I was very interested in what you had to say, and I—

maybe I wasn’t paying attention. I don’t remember anyone beginning in 1998, calling some of these problems to my attention, obviously, it is something I want to work on. And it began in the last

administration. It has carried over. It seems to be wrong in both

cases.

I will be working with my colleagues to try to get Secretary Martinez to change some of these policies. I must say, these days

privatizing all kinds of things is en vogue; privatizing social security, privatizing prisons, maybe the only thing that some of these

people don’t want to privatize is enforcement of discrimination because it might be too effective. But I think we probably ought to

be somewhat consistent.

One thing particularly troubled me here when you talked about

the new restrictions that Secretary Martinez imposed. I want to

make sure I understand this. It is one page 6 of your testimony,

that the applicant—that is the fair housing group, private applicant—must show that the proposed activities comply with CDBG

recipients consolidated plan analysis of impediments to housing.

In fact, it would seem to me that the main reason for having this

is to criticize the CDBG recipients. In other words, have I got this

right? The CDBG recipient is the local government entity here, correct?

Ms. SMITH. That is correct.

Mr. FRANK. So what they are telling you is that if you were monitoring that entity’s fair housing compliance, you must have a plan

that is in compliance with their non-compliance. I mean I guess

that one seems to me particularly troubling. I don’t understand

why you should have to comply with the people you are monitoring.

Ms. SMITH. Well, theoretically, had the analysis of impediments

been conducted by the cities, and actually documented the barriers

to fair housing, and then made recommendations to remove those

barriers, and then funded those barriers, then——

48

Mr. FRANK. Right. But, as you point out, one, we have not, as

the Federal Government, done a good job of monitoring that. But,

second, it may well be that one of the problems is that the entity

has not in fact done a good plan; and then you would be debarred

from doing that very fundamental critiquing.

Ms. SMITH. We would lose points in our application. And the

competition is so keen, that oftentimes there is one-half point deciding who gets a grant and who doesn’t. So when you look at that

and you lose points—and there are only about 60 cities that actually have a good AI that we have reviewed.

So, you know, if you lose points there, and then you lose the five

points if you are already in a state such as Ohio that has eight

great fair housing groups, who work very closely with the Ohio

Civil Rights Commission, have great successes, all of those groups

are being penalized, and then the Ohio Civil Rights Commission is

penalized.

Mr. FRANK. My time is up. I will want to work with you to

maybe get a letter that some of my colleagues might join——

Ms. SMITH. Yes.

Mr. FRANK [continuing]. To the Secretary on that. And, Ms.

Arnwine, I would like a letter from you, which I will pass along to

Mr. Marcus. Thank you, Madam Chair.

Chairman KELLY. Thank you, Mr. Frank.

Mr. Watt.

Mr. WATT. Thank you, Madam Chair, and thank the chair and

the ranking member for convening this hearing. And I apologize to

this panel of witnesses, and the prior panel of witnesses for being

in and out during the course of the afternoon.

I want to say a special welcome to my good friend and long-term

colleague, Ms. Arnwine, who spent a good portion of her life in

North Carolina, and tell her how great it is to see her continuing

to carry on the magnificent work that she is doing on the national

stage.

I want to try to get some more details about these two North

Carolina cases, in particular, so that I might be able to piggyback

on Mr. Frank’s letter, and put some additional pressure on HUD

to be more timely in its investigation of complaints.

Ms. Jones, Stephanie Tubbs-Jones, raised some of the issues

about delays in investigating complaints during one little snippet

of time when I was actually in the room earlier today.

What seems to be the problem with getting these investigations

to be more timely in you all’s experience, if anybody has experience

with that? Ms. Arnwine.

Ms. ARNWINE. Thank you very much. We really appreciate it.

Thank you. Congressman, for those kind remarks. It is obvious

that one of the biggest problems is the implementing regulations

that HUD has proffered and operates under. It is their own regulations that is requiring that they, you know, reject complaints.

It is their own lack of I think any kind of sense of imperative

for enforcement that allows them to just treat the 100 day requirements just, you know, totally in a casual non-serious manner. It is

their own lack of seriousness that allows them to, as you notice, to

today to talk about they only are asking for level funding for

FHEO.

49

It is their own lack of a kind of seriousness that I have seen also

with the Department of Justice where, as Mr. Frank and others

have called, and Mr. Gutierrez have called to our attention today,

to even use the term ‘‘discrimination.’’

I mean we have—I was just, you know, in the last number of

months, I have been talking to attorneys over at Department of

Justice where they have been told to strike from the their briefs

the use of the word ‘‘discriminatory.’’

There is this problem that is at HUD, but it permeates this administration of a kind of ambiguity toward recognizing, and admitting to the discrimination that exists in our society. But I really

think the regulations are a problem, and a lack of serious leadership over at HUD on these matters.

Mr. WATT. Either of the other witnesses have any experience

with this that might be able to give us some insight as to why it

is taking so long to process investigation?

Ms. SMITH. Well, in part, just trying to get your complaint accepted with HUD lately has been very difficult. I would say in the

last 2 years, when you call, the intake person, who is not trained

in what is covered by the law, and what the courts have decided

since 1968 about the law will oftentimes reject a complaint.

And then you have the situation that Barbara described where

they will fill it out on the internet, mail it in, and then a lot of

questions start happening, and the time is ticking all along.

The other issue is during an investigation, I know when the private fair housing centers, who have standing to bring complaints

with HUD, as well as in Federal and state court, we have to show

an injury, and we know that, in order to file a complaint.

But the HUD investigators have this—it was actually like an

eight page checklist that the fair housing groups had to answer before our complaint would be accepted. In fact, in the case that we

have pending, the Federal District Court here in the District of Columbia has already denied the motion to dismiss based on standing.

But HUD wants to continue to question, not only the National

Fair Housing Alliance, but fair housing groups in Toledo, Milwaukee, and Chester, Pennsylvania, and Richmond, Virginia. We

are all together in a lawsuit. And we have all filed complaints in

1997 with HUD, and the standing issue just started in the last 2

years. And we are baffled by this issue.

So if they question groups that have had standing, that can document injury, I wonder what happens to the individual who comes

in. And our experience is that we know of cases that have had no

investigation started, cases that are five and 6 years old.

In addition, when they were talking about closing out the cases

and how important this is, I know of situations where, for example,

our attorney was called and said, ‘‘Would you withdraw your complaint from HUD?’’ And if they ask us to do that rather than counting, you know, this case, and taking credit when this case should

settle is very frustrating.

And I know of situations where if they called the complainant

one time and couldn’t reach them, they are calling nine to five, the

majority of our clients work. They don’t reach them, they will say

50

the complainant was unresponsive. We couldn’t locate them, and

then they close the case.

Mr. WATT. Thank you, Madam Chair. My time has expired. I

thank the witnesses for being here.

Mr. TEGELER. If I could briefly add one other response to the

same question. The problem of delay and understaffing is not limited to HUD enforcement agencies, but also to all of those states

where ‘‘substantially equivalent’’ laws have allowed the delegation

of complaint processing and fair housing to local agencies.

There are a lot of problems there as well. I think the HUD approval process for those local agencies needs to be much more stringent because we have serious delays in a number of states that

don’t have HUD processing, per se.

Chairman KELLY. Thank you, Mr. Watt.

Mr. WATT. Thank you.

Chairman KELLY. Now Ms. Lee.

Ms. LEE. Yeah, thank you, Madam Chair.

Once again, I want to thank you for this hearing, and thank the

panelists because it is very—I don’t know if any other members are

feeling this, but I am feeling very frustrated and somewhat angry

knowing that these hearings are just the tip of the iceberg in terms

of what our constituents are feeling each and every day, and going

through each and every day just to be able to be treated fairly and

equally.

And, Madam Chair, I think I am seeing this as a bipartisan—

has been a bipartisan problem historically. And I think Ms. Smith

kind of laid out the history of why some of the frustrations with

staff was there, which Mr. Marcus mentioned earlier.

But I guess what I am concluding is—and after listening to Mrs.

Arnwine also, that the commitment to fair housing just has not

been there. And the congressional constraints have been so onerous, that even if the Secretary of HUD, whomever that Secretary

may be, has made it a priority.

The Congress is not going to allow for that to be enacted. We

haven’t seen much in terms of increasing the funding for programs

and for the division which is responsible for fair housing and equal

opportunity.

So if we don’t put our money where our mouth is, and if the Congress doesn’t allow for the enforcement of fair housing or equal opportunity laws, then where are we going? I mean are we going

backwards or forward?

I mean we heard the complaints with regard to the previous 10

years, and Ms. Arnwine also talked about the decrease in, you

know, the complaint process moving forward. But, yet, now we are

hearing that we may be in a similar situation.

And so, is it the culture of HUD, or is it the culture of the Congress? Is it—what is it? Is it we still have problem with equal opportunity for people in our country? I mean I guess I want to know

what you guys really think it is.

Ms. SMITH. Well, since I have a grant application pending—but

I will be frank. There is a culture of HUD that they can’t be an

advocate. And in the private fair housing movement, we only become the clients advocate after evidence of discrimination is documented.

51

We are as skeptical as everybody else when that complaint walks

in the door because we can’t bring a frivolous action. It hurts our

community. It hurts the whole concept of fair housing. We make

enemies in the industry if we bring frivolous actions. HUD and the

state agencies have to step back and say, ‘‘You know, we are the

neutral factfinders. We can’t advocate for anyone.’’

As a result, if a fair housing agency isn’t helping a client through

the process, most victims of housing discrimination don’t know

what to ask for, and HUD doesn’t know how to expand a remedy

that changes the institutionalized practices in large industries that

occur.

Sometimes there is conflict. HUD administers the FHA program.

HUD oversees the GSE’s. HUD oversees all of the public housing

authorities, and the Section 8 programs. We often have housing

discrimination complaints against those very entities. And there is

a conflict for HUD to monitor those agencies and enforce the Fair

Housing Act.

You heard Sara respond to debarment. We had a case that went

to the 6th Circuit Court of Appeals against a large Section 8 developer, and we asked HUD to debar this builder. We have a Federal

jury decision, and we had an appellate court upholding that jury

decision that this developer discriminated on the basis of religious

and national origin.

No steps were taken. And what HUD said to me when I called

to find out why, they said, ‘‘Shanna, they have the best-looking

projects that are out there.’’ I said OK. And they said their management is really good. I said, ‘‘Yes, but they discriminate. They

don’t allow people of color. They don’t allow people who are not

Christians or Jews to move into their developments.’’

And there is a culture, and it is a problem. And years ago we

thought that Congress should make a separate entity for fair housing enforcement similar to the Equal Employment Opportunity

Commission because there is a conflict at HUD. And I think if Congress could look at a separate entity and see the enforcement, see

the kinds of education that could be done because we are—I consider ourselves to be evenhanded.

I work with many large corporations including State Farm and

Allstate, Nationwide, and Liberty Mutual Insurance companies,

who had been seriously violating the law prior to 1996. And we are

in partnerships with these companies.

And so, there is a way to work with the companies who have engaged in institutionalized practices of discrimination, eliminate

those problems, still work with those same agents that may be having problems on a local level, and handle that.

But HUD does not have that vision of challenging the institutionalized practices that exists in the United States. In Congress,

you all haven’t just allocated the money. And the lobbies or the interest of the real estate industry, of the insurance industry, of the

lending industry have come to you and said, you know, don’t regulate us.

But the Fair Housing Act doesn’t regulate anything. The Fair

Housing Act simply enforces the law. HUD never regulated insurance. We have no interest in regulating insurance. We just want

to make sure that their underwriting guidelines are fair, and there

52

is no disparate impact, based on race, religion, disability, or sex in

those laws.

So, if you do something, and either you mandate HUD to change

its culture, or create a separate organization that will administer

the fair housing money for private groups, and administer the

money to the State agencies because now the State agencies tell me

they are being micromanaged by HUD, and it just thwarts all of

the enforcement.

And any time we have to file a complaint, make a Federal case

out of everything that comes forward is not productive. There are

small cases that just calling the landlord, and our client says call

the landlord, we can wrap it up.

Chairman KELLY. Speaking of wrapping it up, we are well over

the time.

Ms. SMITH. Yes.

Ms. ARNWINE. Can I make just one——

Chairman KELLY. Appreciate your passion, but we are out of

time.

Ms. ARNWINE. OK.

Chairman KELLY. I note that our members probably have some

additional questions, given the testimony that this panel has submitted. You will probably find questions submitted in writing.

So, without objection, the hearing record will remain open for 30

days for members to submit written questions to these witnesses,

and to place their responses in the record. This third panel is excused, again, with our great appreciation.

And I want to briefly thank all of the members and the staff for

their assistance in making the hearing possible. And this hearing

is adjourned.

[Whereupon, at 4:55 p.m., the subcommittees were adjourned.]

(53)

A P P E N D I X

June 25, 2002

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