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FAIR HOUSING ISSUES IN THE GULF

COAST IN THE AFTERMATH OF

HURRICANES KATRINA AND RITA

HEARING

BEFORE THE

SUBCOMMITTEE ON 

HOUSING AND COMMUNITY OPPORTUNITY

OF THE

COMMITTEE ON FINANCIAL SERVICES

U.S. HOUSE OF REPRESENTATIVES

ONE HUNDRED NINTH CONGRESS

SECOND SESSION

FEBRUARY 28, 2006

Printed for the use of the Committee on Financial Services

Serial No. 109–74

(

(II)

HOUSE COMMITTEE ON FINANCIAL SERVICES 

MICHAEL G. OXLEY, Ohio, Chairman

JAMES A. LEACH, Iowa 

RICHARD H. BAKER, Louisiana 

DEBORAH PRYCE, Ohio 

SPENCER BACHUS, Alabama 

MICHAEL N. CASTLE, Delaware 

EDWARD R. ROYCE, California 

FRANK D. LUCAS, Oklahoma 

ROBERT W. NEY, Ohio 

SUE W. KELLY, New York, Vice Chair 

RON PAUL, Texas 

PAUL E. GILLMOR, Ohio 

JIM RYUN, Kansas 

STEVEN C. LATOURETTE, Ohio 

DONALD A. MANZULLO, Illinois 

WALTER B. JONES, JR., North Carolina 

JUDY BIGGERT, Illinois 

CHRISTOPHER SHAYS, Connecticut 

VITO FOSSELLA, New York 

GARY G. MILLER, California 

PATRICK J. TIBERI, Ohio 

MARK R. KENNEDY, Minnesota 

TOM FEENEY, Florida 

JEB HENSARLING, Texas 

SCOTT GARRETT, New Jersey 

GINNY BROWN-WAITE, Florida 

J. GRESHAM BARRETT, South Carolina 

KATHERINE HARRIS, Florida 

RICK RENZI, Arizona 

JIM GERLACH, Pennsylvania 

STEVAN PEARCE, New Mexico 

RANDY NEUGEBAUER, Texas 

TOM PRICE, Georgia 

MICHAEL G. FITZPATRICK, Pennsylvania 

GEOFF DAVIS, Kentucky 

PATRICK T. MCHENRY, North Carolina 

CAMPBELL, JOHN, California 

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 

DARLENE HOOLEY, Oregon 

JULIA CARSON, Indiana 

BRAD SHERMAN, California 

GREGORY W. MEEKS, New York 

BARBARA LEE, California 

DENNIS MOORE, Kansas 

MICHAEL E. CAPUANO, Massachusetts 

HAROLD E. FORD, JR., Tennessee 

RUBE ́ N HINOJOSA, Texas 

JOSEPH CROWLEY, New York 

WM. LACY CLAY, Missouri 

STEVE ISRAEL, New York 

CAROLYN MCCARTHY, New York 

JOE BACA, California 

JIM MATHESON, Utah 

STEPHEN F. LYNCH, Massachusetts 

BRAD MILLER, North Carolina 

DAVID SCOTT, Georgia 

ARTUR DAVIS, Alabama 

AL GREEN, Texas 

EMANUEL CLEAVER, Missouri 

MELISSA L. BEAN, Illinois 

DEBBIE WASSERMAN SCHULTZ, Florida 

GWEN MOORE, Wisconsin, 

BERNARD SANDERS, Vermont

Robert U. Foster, III, Staff Director 

(III)

SUBCOMMITTEE ON HOUSING AND COMMUNITY OPPORTUNITY

ROBERT W. NEY, Ohio, Chairman

GARY G. MILLER, California, Vice Chairman 

RICHARD H. BAKER, Louisiana 

WALTER B. JONES, JR., North Carolina 

CHRISTOPHER SHAYS, Connecticut 

PATRICK J. TIBERI, Ohio 

GINNY BROWN-WAITE, Florida 

KATHERINE HARRIS, Florida 

RICK RENZI, Arizona 

STEVAN, PEARCE, New Mexico 

RANDY NEUGEBAUER, Texas 

MICHAEL G. FITZPATRICK, Pennsylvania 

GEOFF DAVIS, Kentucky 

CAMPBELL, JOHN, California 

MICHAEL G. OXLEY, Ohio 

MAXINE WATERS, California 

NYDIA M. VELA ́ ZQUEZ, New York 

JULIA CARSON, Indiana 

BARBARA LEE, California 

MICHAEL E. CAPUANO, Massachusetts 

BERNARD SANDERS, Vermont 

STEPHEN F. LYNCH, Massachusetts 

BRAD MILLER, North Carolina 

DAVID SCOTT, Georgia 

ARTUR DAVIS, Alabama 

EMANUEL CLEAVER, Missouri 

AL GREEN, Texas 

BARNEY FRANK, Massachusetts 

(V)

C O N T E N T S 

Page 

Hearing held on: 

February 28, 2006 ............................................................................................ 1

Appendix: 

February 28, 2006 ............................................................................................ 45

WITNESSES 

TUESDAY, FEBRUARY 28, 2006

Johnson, Derrick, President, Mississippi State Conference, NAACP, Jackson, 

MS ......................................................................................................................... 19

Kendrick, Honorable Kim, Assistant Secretary for Fair Housing and Equal 

Opportunity, U.S. Department of Housing and Urban Development .............. 6

Murguia, Janet, President and CEO, National Council of La Raza .................... 22

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

Center, Baton Rouge, LA ..................................................................................... 24

Rich, Joseph D., Project Director of the Housing and Community Development Project, Lawyers’ Committee for Civil Rights Under Law ...................... 26

Smith, Shanna L., President and CEO, National Fair Housing Alliance ........... 28

APPENDIX 

Prepared statements: 

Oxley, Hon. Michael G. .................................................................................... 46

Ney, Hon. Robert .............................................................................................. 47

Johnson, Derrick ............................................................................................... 48

Kendrick, Hon. Kim .......................................................................................... 54

Murguia, Janet ................................................................................................. 59

Perry, James ..................................................................................................... 66

Rich, Joseph D. ................................................................................................. 101

Smith, Shanna L. ............................................................................................. 113

ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD

Statement of the National Fair Housing Alliance ......................................... 123

(1)

FAIR HOUSING ISSUES IN THE 

GULF COAST IN THE AFTERMATH 

OF HURRICANES KATRINA AND RITA 

Tuesday, February 28, 2006

U.S. HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON HOUSING AND

COMMUNITY OPPORTUNITY, 

COMMITTEE ON FINANCIAL SERVICES, 

Washington, D.C. 

The subcommittee met, pursuant to notice, at 11:00 a.m., in room 

2128, Rayburn House Office Building, Hon. Robert W. Ney [chairman of the subcommittee] presiding. 

Present: Representatives Ney, Pearce, Campbell, Waters, Lee, 

Green, and Frank. 

Chairman NEY. The Housing Subcommittee meets this morning 

to discuss recent fair housing issues in the Gulf Coast related to 

Hurricanes Katrina and Rita. The events surrounding the late August and early September hurricanes in Louisiana, Mississippi, and 

Texas have certainly captured the attention of the American people, including this committee. Our subcommittee was the first committee of the House to go to New Orleans. We went in January, 

and then after that the Katrina Subcommittee went. 

I just got a notice that the Speaker of the House, Mr. Hastert, 

and the Minority Leader, Nancy Pelosi, are both going down on 

March 2nd; I believe it is for 2 days. We had written them a letter—I know Chairman Oxley also did—encouraging both of them to 

get together and go down to the Gulf; and they are going to do 

that, as I understand it, for 2 days this week, which I think is 

good. 

The Housing Subcommittee and Financial Services Committee 

have been at the forefront of the hurricane relief effort with numerous hearings and multiple briefings with approximately 80 witnesses participating. Again, in mid-January, this Housing Subcommittee held the first post-hurricane congressional hearings in 

Louisiana and Mississippi, reviewing the housing issues that the 

Federal Government will need to consider in the next few years. 

I also note that when we had those hearings the members’ participation was unbelievable—I think 5 hours in 1 day, 6 hours the 

next day—and they gave full time and attention. I am very proud 

of the members of this committee for doing that because it is an 

extremely important issue to the many people whose lives have 

been horrifically disrupted down in the Gulf. 

2

In addition, this committee has shepherded needed relief legislation to the House Floor in the recent months following the disaster 

that will affect not only families in the immediate hurricane-ravaged areas but those families forced to suffer the aftermath due to 

flooding. As the thousands of hurricane evacuees in the Gulf Coast 

begin the process of looking for permanent housing, the Federal 

Government must do everything in its power to protect the rights 

of households to obtain the housing of their choice. 

The January 13th and 14th field experiences in the Gulf underscored some experiences and practices that could violate the Fair 

Housing Act. I look forward to working with HUD and other relevant enforcement agencies to ensure that these families have 

equal access to the housing opportunities that they need to rebuild 

their lives. 

It is my hope that today’s hearing will give the members of this 

subcommittee a unique perspective on fair housing issues and on 

what steps HUD and individual groups can take to ensure that the 

relocation of these evacuees is fair and also legal. 

Fair housing and enforcement work best when people know their 

rights. To the extent that this committee can highlight patterns 

and practices that impede fairness and equal access to housing, 

government, private, and nonprivate sectors will be encouraged to 

adequately inform, monitor, and correct violations and to enforce 

the current law. 

Again, I want to thank our ranking member, Maxine Waters of 

California, for her participation down in the Gulf, also, Mr. Frank, 

our ranking member for the committee and Chairman Oxley. I also 

would like to welcome a new member, too, today, Mr. Campbell of 

California to the committee. 

With that, I will refer to the gentlelady from California. 

Ms. LEE. Thank you very much, Mr. Chairman. 

Mr. Chairman, let me thank you and our ranking member for organizing this very important hearing on fair housing and also for 

your leadership and Congresswoman Waters’ leadership in leading 

the first congressional field hearing in the Gulf Coast after the hurricanes. That was such an important 2 days, Mr. Chairman. I think 

we learned quite a bit, and I believe this hearing is an important 

step in the correct direction. 

During the field hearings in New Orleans and Gulfport, we were 

really all quite outraged to hear stories of blatant discrimination in 

housing in the aftermath of Hurricane Katrina. So I am pleased 

again that, under your leadership, we are seeking to investigate 

these Fair Housing Act violations as many of us, including myself, 

have requested. 

Housing, quite frankly, should be a basic human right. Any kind 

of discrimination that denies or hinders someone’s ability to access 

that right is just plain wrong, and it should be prosecuted under 

the law. 

While we are here primarily to discuss discrimination in the provision of housing, we cannot ignore the ongoing discrimination in 

the financing of housing or the provision of brokerage services that 

also falls under the fair housing statute. We also cannot ignore the 

need for more funding to investigate cases of discrimination and to 

enforce the Fair Housing Act. 

3

Let’s be for real. Over 300,000 homes were damaged or destroyed 

by Hurricane Katrina and over a million people were displaced. We 

have a huge housing shortfall right now in the Gulf Coast. We have 

numerous reports and we heard this during the hearing of price 

gouging and illegal evictions taking place. 

We need more money not only to house people but to ensure that 

they are not discriminated against, and I believe in the Baker bill 

and also in our Congressional Black Caucus bill we adopted an 

amendment which I wrote, and that would be to increase the number of housing discrimination advocates and complaint officers and 

to hire people who are from the region to really work with HUD’s 

regional offices to enforce fair housing laws. 

That amendment, unfortunately, is stuck now. Increase in funding for fair housing compliance has not been moved forward. So I 

hope that we can figure out how, in a bipartisan way, to move some 

of these fair housing laws forward. 

On top of all of that, we have a GAO report from last October 

that documents many glaring problems with HUD’s response and 

investigation of fair housing complaints. 

Despite these problems, the Administration has proposed a fair housing budget of just $45 million for fiscal year 2007. That is $1 

million less than last year—$1 million less. That is just totally inadequate; and it shows once again, quite frankly, that this Administration is really out of touch. 

So, Mr. Chairman, I hope we can work together to strengthen the 

fair housing program, to encourage HUD to adopt the GAO recommendations, to provide a substantial increase in funding for 

testing and the enforcement of the Fair Housing Act, and to employ 

folks who have been traumatized and displaced by Hurricane 

Katrina to be our fair housing applicants and compliance officers 

so that they, too, can not only benefit from the employment opportunities that resulted from this disaster, but also make sure that 

housing discrimination does not exist in the Gulf region. 

So thank you again for holding this hearing, and I look forward 

to the testimony of our witnesses. 

Chairman NEY. Thank you. 

Mr. Frank. 

Mr. FRANK. Thank you, Mr. Chairman, and I very much appreciate your holding this hearing. 

People were horrified by what they saw during the height of the 

Katrina disaster. I don’t think I can remember such a sense of outrage and frustration on the part of many Americans to see their 

fellow citizens marooned in such terrible circumstances, in the middle of the United States. People didn’t think that with our technology, you could have people in a major American city worse off 

than the survivors of a boat crash on Gilligan’s Island, equally out 

of reach of any help. But there was at least the hope that this 

would be temporary and that, as time went on, we would alleviate 

the situation. Sadly, that has not been the case nearly as much as 

it should be. 

We have a situation where those victims of Katrina, in very large 

numbers, have been revictimized by the policies and the absence of 

policies of this government. And I want to repeat what I said. That 

was, I understand, provocative and it was meant to be, because we 

4

need to call attention to this. I am, in fact, troubled that there are 

so few of us here today hearing this situation. 

To date, the policy of the United States Government with regard 

to New Orleans appears to me to be a policy of ethnic cleansing by 

inaction. 

Now I am not talking about genocide. I am not talking about people being killed. I am talking about a population being displaced 

and replaced by a population of a different ethnicity, and that is 

what we face in New Orleans if we continue the current course. If 

we fail to put a good deal more than we have into reconstructing 

housing for the people of New Orleans, similar to what there was 

before in its economic structure—yes, we want it to be physically 

improved. We want it to be more resistant to floods. We want it 

not to be in areas that are particularly vulnerable. But it is certainly within our capacity as a country to make sure that New Orleans does not become—let’s be very clear—a richer, whiter city as 

a result of a natural disaster. But I am afraid we are on the way 

to that. 

Part of that goes beyond the scope of this hearing, because we 

are talking about providing the revenues that are necessary to replace housing, public housing and other forms of rental housing as 

well as home ownership. 

But a large number of the people who will be hopefully put back 

into place in New Orleans will be people of color who will face various forms of discrimination. Now one form of discrimination is 

simply not having the housing available in the appropriate income 

stature, but there are also dangers that people will be denied the 

housing. 

We know that when it comes to the rental of housing or mortgages or all of these things that there is a racial element. We have 

diminished it, I believe; and I am proud of our collective efforts. 

But it is still there. So it is very important that we be able to deal 

with this; and I share the distress of my colleague from California 

that the President has proposed a 2 percent cut in the budget for 

fair housing, $44 million for housing for the United States, less 

than $1 million per State. 

How can anyone who understands where we are in terms of race 

relations in the United States today think that that is remotely 

close to—it is not close to inadequate. Adequate is way off on another planet. It falls enormously short of inadequate. It is scandalous. Less than $1 million per State, when there is, in fact, an 

increased need in New Orleans. 

Again, I think we have made progress, but there is still discrimination. And the people who doubt this—and I will close with this, 

Mr. Chairman, because I will pursue this later—we have the evidence on the Internet. We have documented widespread—and I will 

introduce this into the record; some of it has come from some of the 

witnesses—widespread advertisements on the Internet from people 

seeking to house people who have been displaced from New Orleans, explicitly racist, except what they say, as I read them, is, ‘‘I 

am not a racist, but whites only’’. 

Well, I want to see what a racist says. If a nonracist says ‘‘whites 

only’’, I guess a nonracist—I want to see what that becomes—or 

racist. But we have explicit evidence that racism, unfortunately—

5

I think it is diminished in this country—still prevails. So we have 

a great deal to do both with regards to New Orleans specifically 

and the country in general, and I appreciate you calling this hearing. 

Chairman NEY. Thank you. 

The distinguished gentleman from Texas, Mr. Green. 

Mr. GREEN. Thank you, Mr. Chairman. 

I would also like to thank the ranking member, Maxine Waters, 

who has done a stellar job in helping us, along with you, with 

much of the issues, many of the issues that we are confronting. 

I would like to thank my ranking member on Financial Services, 

Ranking Member Frank, for being as attentive as he has been and 

being here with us today, as well as all of the other members who 

are in attendance today. I am grateful that they are here. 

Mr. Chairman, I, too, marvel at some of the things that have 

happened. I have had the good fortune, or misfortune, I am not 

sure which, to say that I was born in Louisiana, in New Orleans; 

and Charity Hospital was my place of birth. And I am certainly 

wanting to see the hospitals and the rest of the infrastructure in 

New Orleans reestablished. I would like to see the schools and the 

institutions of higher education receive the proper attention that 

they should receive. 

But this hearing today is about housing. 

And I want to thank you, Mr. Chairman, for the field hearings 

that we had in Louisiana and in Mississippi. I think those were 

most appropriate, and they give us some meaningful insight into 

some of the greater concerns that are being dealt with. 

One of the concerns, of course, deals with trailers. Here we are 

in the richest country in the world. We constructed the Golden 

Gate Bridge; we constructed Hoover Dam; we have put people on 

the Moon; but we can’t put a trailer on a lot. That is quite disturbing. 

Thousands of trailers are literally wasting away in a field while 

people are in need of housing. That really is appalling. 

We also are concerned about the levees, because levees not only 

impact housing but also business. And to rebuild the levees to a 

level less than a Category 5, I think would create concerns in the 

minds of businesspeople who want to relocate to Louisiana and 

bring major opportunities, jobs, to Louisiana. And to be quite candid, I would not want another hurricane to come through and devastate that area with levees that have been reconstructed to less 

than Category 5. I would not want to see that happen on my 

watch. I think I have a duty to do all that I can on my watch to 

make sure that we establish the best levee system that our technology can provide us with. 

We spend enormous amounts of money in other places outside of 

the borders of the United States. And I am not demeaning those 

efforts. I do contend, however, that we can spend what it takes to 

secure the City of New Orleans and to restore the Gulf Coast area. 

I think we did the right thing when we helped the 9/11 victims. 

That was the right thing to do. I think we did the right thing when 

we bailed out the S&L’s. I think it is time for us to do the right 

thing by the people of New Orleans and the Gulf Coast. They deserve what we have done for others. 

6

And I thank you very much for the time, Mr. Chairman. 

Chairman NEY. I want to thank the gentleman. 

I want to start with Panel I, Kim Kendrick. Kim has served as 

the Assistant Secretary for Fair Housing and Equal Opportunity at 

HUD for the past year-and-a-half. Before joining the Bush Administration, Ms. Kendrick was the General Counsel for Covenant 

House Washington, an international non-profit organization committed to helping at-risk youth. From 1998 to 2002, she served as 

regional administrator for the District of Columbia Housing Authority. 

I think this is your first time to testify as Assistant Secretary 

today. Welcome, and we will begin with you. Thank you. 

STATEMENT OF THE HONORABLE KIM KENDRICK, ASSISTANT 

SECRETARY FOR FAIR HOUSING AND EQUAL OPPORTUNITY, 

U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT 

Ms. KENDRICK. Thank you. Good morning. 

Chairman Ney, Ranking Member Waters, and members of this 

committee, I appreciate this opportunity to share with you how 

HUD has been helping to secure the fair housing rights of displaced Gulf Coast residents as they seek new housing. 

My name is Kim Kendrick, and for the last 4 months and 2 

weeks, I have served as Assistant Secretary for Fair Housing and 

Equal Opportunity at the U.S. Department of Housing and Urban 

Development. I oversee the Federal Government office with the primary responsibility for enforcing fair housing laws of the United 

States—most notably the Fair Housing Act, which prohibits discrimination in housing and housing-related transactions on the 

basis of race, color, national origin, religion, sex, disability, or 

against families with children. 

Two days before Hurricane Katrina reached landfall, HUD Secretary Alphonso Jackson assembled a team who would be ready to 

respond to housing needs that he anticipated would arise in the 

aftermath of the hurricane. That team, called the HUD Recovery 

and Response Team, drew on employees from all HUD program offices, including HUD’s Office of Fair Housing and Equal Opportunity, or as we call it, HUD FHEO. 

While HUD typically is not a first responder in the event of national emergencies or natural disasters, Secretary Jackson’s response to Katrina was immediate. HUD staff was on the ground in 

Louisiana within days to assist with the housing relocation effort. 

Like other HUD offices, FHEO immediately dispatched staff to 

Baton Rouge to work with the Federal Emergency Management 

Agency in the disaster recovery centers. FHEO has maintained a 

staff presence of three to five persons in Baton Rouge since September. 

FHEO has also increased its presence in Mississippi. And 

FHEO’s Houston office has been actively involved in education, outreach, and enforcement activities in and around Houston, Texas, 

where the greatest number of hurricane evacuees have relocated. 

The role of FHEO post-Hurricanes Katrina and Rita, is to make 

sure that people know their rights, to actively enforce the law when 

we learn about violations, and to work with the housing industry 

to prevent such discrimination in the first place. 

7

From the start, most of the complaints that HUD received from 

the Gulf Coast region alleged discrimination against African Americans as they sought new housing. In general, the staff onsite in 

Louisiana, Mississippi, and Texas have been able to address reports of discrimination immediately and directly. 

Staff provides onsite assistance on disability accessibility issues 

or advises landlords that they cannot discriminate against families 

with children. By providing the on-the-spot education to landlords 

and mobile home park owners, FHEO staff has been able to prevent some discrimination from occurring. 

HUD recognizes, however, that many individuals seeking housing, and many landlords providing it, might not know their rights 

and responsibilities under the Fair Housing Act. So in the first 

month after the hurricane, HUD took out advertisements in local 

papers in the Gulf Coast advising people of their fair housing 

rights and Fair Housing Act’s prohibitions against discrimination 

and how to report such discrimination. 

HUD staff also distributed fair housing posters and flyers at the 

disaster recovery centers and shelters and among other organizations throughout the Gulf Coast. HUD staff and other fair housing 

partners in the Gulf Coast also appeared on radio and television 

programs to provide information on fair housing. 

Also, on October 25th, in my third week as Assistant Secretary, 

I sent out an open letter to the housing industry advising them 

that it is against the law to discriminate in housing-related transactions on any basis that is prohibited under the Fair Housing Act. 

To date, HUD has received thousands of telephone calls, and it 

has received 100 actual complaints of discrimination from displaced 

Gulf Coast residents. HUD has been investigating those complaints 

and obtaining relief for individuals where parties could arrive at 

some mutually satisfactory resolution. 

HUD is currently investigating a number of complaints, including one filed by the greater New Orleans Fair Housing Action Center, which alleges discriminatory advertising on Katrina-related 

Web sites. 

HUD has found that while the Internet is a valuable resource, 

helping hurricane evacuees finding housing, obtaining supplies, 

and locating loved ones, it can also cause harm. The Fair Housing 

Act makes it unlawful to publish discriminatory statements in connection with the sale or rental of housing. HUD takes all allegations of discriminatory advertising seriously, particularly when the 

language inflicts harm on people who have already gone through 

so much. 

While a number of Web sites have begun to purge their sites of 

these discriminatory ads and have posted public information notices about the obligation of all advertisers to comply with the Fair 

Housing Act, we are continuing to investigate complaints against 

certain Web site providers. 

Also, HUD continues to educate the general public about its fair 

housing rights. Last month, on January 19th, I joined HUD Secretary Alphonso Jackson and Congressman Green in Houston as 

we announced the launch of a nationwide public service announcement campaign to inform displaced hurricane survivors of their fair 

housing rights. Working with the Ad Council, HUD produced comVerDate 0ct 09 2002 13:14 Oct 23, 2006 Jkt 028100 PO 00000 Frm 00013 Fmt 6633 Sfmt 6633 F:\DOCS\28100.TXT HFIN PsN: TERRIE
8

pelling television, radio, and newspaper ads that informed the public that the storm isn’t over for those hurricane evacuees who are 

facing discrimination as they search for new housing. 

In the months immediately following the hurricanes, the first 

priority for many evacuees was having a roof over their heads and 

food to eat. We expect that when people see our public service announcements and reflect on the obstacles they experience in their 

housing search, we will likely see a rise in those complaints. Moreover, we expect we will see additional complaints as people leave 

the FEMA hotel reimbursement program and begin their housing 

search. 

However, rest assured that HUD is not waiting for people to file 

complaints before taking action against discrimination. Where no 

one has stepped up, stepped forward to file a complaint, we have 

used our statutory authority to initiate investigations based on reports of discrimination that we have received. Specifically, HUD is 

investigating Louisiana parishes that have either refused to site 

FEMA trailers or have imposed significant restrictions on the 

placement of such trailers. Legitimate reasons may exist for some 

of these parishes’ policies, but some allege that the parishes’ objections are motivated by the fear that African Americans will move 

into these communities. HUD is looking into these allegations. 

A significant part of our Gulf Coast efforts has been to advise 

FEMA on disability accessibility issues as it creates mobile home 

communities to temporarily house the people displaced by the hurricanes. HUD provided FEMA with a design for accessible mobile 

homes and provided guidelines to FEMA on how on make mobile 

home parks more accessible. HUD has also detailed a staff person 

to FEMA’s long-term recovery efforts to advise on disability rights 

issues, promote the hiring and training of low-income persons on 

certain HUD-assisted projects and to advise on fair housing issues 

in general. 

We have also directed more of our accessibility education efforts 

to the Gulf Coast, to make sure that developers, as they rebuild, 

make sure properties are accessible to persons with disabilities. 

I thank the committee for the opportunity to testify on HUD’s 

post-hurricane fair housing efforts. I ask that my written statement 

be made part of the record. I am now available to answer questions. 

Chairman NEY. Without objection, it is made part of the record. 

Thank you for your testimony here today. 

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

54 of the appendix.] 

Chairman NEY. I want to ask you, the termination of FEMA’s 

hotel reimbursement program, now we don’t know when this will 

be because the dates changed. It was going to be somewhere right 

after our hearing. And we went down and had our hearing, and it 

was changed. There is a judge involved. So I am not sure. But that 

is FEMA’s call that they were making on that. 

Well, let’s assume that does happen, that there is a situation 

where, for whatever reason, the hotel rooms are stopped. Are you 

prepared for what I think would be a huge influx of complaints and 

how would FHEO handle that discrimination and where would people go? 

9

Ms. KENDRICK. Thank you. 

Yes, we are prepared to handle it. As you might know, 70 percent 

of the complaints that come into HUD are handled by our fair 

housing partners in our State and local agencies. The remainder 

are handled by HUD. So we expect that we have the staff available 

across the Nation through our network with our fair housing staff, 

the private organizations, and the public partners. We have the 

staff ready and available to help. 

Chairman NEY. On that issue of the hotels, when we went down 

to the Gulf, it wasn’t an issue in Mississippi. We asked, does anybody want to talk about—really, it wasn’t an issue. But it was a 

large issue in New Orleans. And, like I said, I hope it doesn’t happen. It is just shut off. And we expressed that and I think the Federal Government has to get with the State and has to get with the 

city, frankly, because I think there are some problems inherent 

with the three different entities of how this thing is going. 

But I am saying if it does come about and we don’t know how 

the judge will rule, what will happen, I just would say you probably 

will have a huge influx. If you have the staff prepared, I think it 

would be important. 

I want to ask you, because I saw some things in New Orleans 

that were presented to us as a result of using things like craigslist, 

and I saw blatant examples of discrimination on there that we 

don’t want families of color to be here or we don’t want Catholics 

or we don’t want Protestants or whatever, you name it. There were 

a lot of statements made on that list, where people could live or 

not. Have you seen the—with the advent of online classifieds like 

craigslist, have you seen more, the same, or less discrimination 

complaints? 

Ms. KENDRICK. We have seen—we had some Internet complaints 

before the hurricanes hit, and we have been investigating those 

complaints. We have seen—we have received probably 15 complaints now involving the Internet. So that is more than we had 

in 2004. So 2005, 2006 we are seeing more complaints being filed, 

yes, sir. 

Chairman NEY. How do you act? Do you act on the Internet complaints any different or is there a different procedure from how you 

would act on nonelectronic-involved complaints? 

Ms. KENDRICK. No, we are handling the complaints the same 

way. The thing that we have done that is different, because this 

is brand new for us, what we have done is we put together a task 

force within FHEO to deal with these complaints so we can have 

consistency across the country on how these complains are handled 

and how they are resolved. 

Chairman NEY. Last question I have is, maybe you could explain 

just in simple terms how complaints of housing discrimination are 

filed in the sense, of will a simple complaint without the individual 

actually filing it trigger an investigation? Does the individual have 

to file the complaint or can the mere suggestion allow the Department to look into things? 

Ms. KENDRICK. An individual calling on our hotline can file a 

complaint that way. That individual can file a complaint. 

But, also, the Secretary has the authority to file Secretary-initiated complaints without a complainant once we hear that there is 

10

something—that some activities have occurred that might be in 

violation of the Fair Housing Act. We have used that Secretary-initiated complaint several times since Katrina has hit. We are investigating parishes in Louisiana. We are investigating the housing 

authority in Louisiana because we have heard of complaints. So we 

didn’t have complainants, so we took our initiative and started investigating those cases. 

Chairman NEY. The gentlelady from California. 

Ms. LEE. Thank you, Mr. Chairman. 

Thank you very much for your testimony. 

Let me mention a couple of things. We have heard from a variety 

of organizations that—I don’t know if it is by accident or design—

but that, of course, African Americans are being grouped in certain 

locations and individuals with disabilities are also being grouped in 

certain locations. And I want to find out about FEMA and your coordination with FEMA and has FEMA had any training from HUD 

on how to effectively provide fair housing? I want to make sure 

that FEMA is working with you to ensure that evacuees are integrated into their communities instead of being segregated from 

them. 

So that is the first question I have with regard to FEMA and 

what you are doing to help them become more sensitive to our fair 

housing laws. 

Secondly, I just want to know what your staffing looks like. Do 

you hire Katrina survivors, and what do you think you need in 

terms of staffing? 

Finally, I just want to ask you about the National Fair Housing 

Alliance, which will be on the second panel. They, of course, conducted an initial investigation into racial discrimination in the 

rental market in the Gulf Coast; and they found that 66 percent 

of tests checking unit availability, rental rates, discounts, etc., that 

white callers—and I don’t know how they determine who white 

callers are or African American callers—but there was a lot of discrimination. And I think that is just an astounding number. That 

is just one number. 

So I went to know what HUD is doing to help organizations like 

the National Fair Housing Alliance to conduct these fair housing 

tests and have you conducted any on your own? 

Ms. KENDRICK. Thank you. 

I am going to address FEMA first. We have worked with FEMA 

since we got to the Gulf Coast right after the hurricanes, about 2 

weeks after the hurricanes. We went down to Baton Rouge. We had 

HUD employees and specifically we had fair housing employees on 

the ground in Baton Rouge meeting daily with FEMA. Because of 

our daily meetings with FEMA, we did understand that they needed some training in areas of accessibility and disability issues and 

rights under the Fair Housing Act. They actually encouraged us to 

help them with our efforts. 

So we were able to talk to them about mobile homes and manufactured homes, how to make those mobile homes and manufactured homes accessible for persons with disabilities. They were accepting of that information. We were also able to work with them 

on their mobile home parks to make sure that they were accessible 

for persons with disabilities. 

11

One of the issues we did have in the beginning was making sure 

that they did not group certain people together because of disabilities. We helped them create mobile home parks that were accessible so that people could be integrated into the communities. 

So FEMA has been very receptive to our intervention into their 

area. 

Ms. LEE. So you believe that FEMA is sensitive to nondiscrimination and to our fair housing laws as they relate to the 

disabled community, and to African Americans and people of color? 

They get it? 

Ms. KENDRICK. I think that they get it. Yes, ma’am. 

Ms. LEE. What about the training now in terms of the tests and 

funding the National Fair Housing Alliance, you know, which is a 

very important organization that is really helping you do a lot of 

what you all should be doing; and also let me know how many people you have out there. 

Ms. KENDRICK. We work very closely with the National Fair 

Housing Alliance and their individual members. When we first 

heard about the hurricane, we found some extra money and we 

were able to get some extra dollars to some of the fair housing 

groups in the Gulf Coast area. So we had some extra fiscal year 

2005 money. It wasn’t a lot of money. But we were able to get 

$500,000 down into the Gulf region to help with the organizations 

who were dealing with enforcement, dealing with testing issues. 

And we are investigating—NFHA did file some complaints with us, 

and we are investigating those complaints. 

On the staffing level, we have—our staffing level is about 620 

persons right now; and I can assure you that every one of us, every 

day, is involved with issues relating to Katrina. 

Ms. LEE. Wait a minute. Six hundred and twenty in the Gulf region? How many do you have in New Orleans and Gulfport? 

Ms. KENDRICK. In New Orleans—we have persons in New Orleans. We have people in our New Orleans office. We have them in 

Baton Rouge. We have people in Houston. We have them in Dallas. 

We have people in Atlanta, in Mississippi and, frankly, across the 

country, because these complaints are coming in across the country. So it is not just those people who are in the Gulf region. We 

have spread out the work across the country. 

Ms. LEE. About how many people? What does that mean in terms 

of numbers? 

Ms. KENDRICK. I probably could say on a daily basis we have 30 

people dedicated just to Katrina efforts. 

Ms. LEE. Do you need any more? 

Ms. KENDRICK. As the President’s fiscal year 20O7 budget states, 

I think our staffing levels are accurate. 

Ms. LEE. So you don’t need any more. 

Ms. KENDRICK. I think our staffing levels are accurate. 

Ms. LEE. Accurate or adequate. 

Ms. KENDRICK. Adequate, yes, they are. 

Ms. LEE. Adequate. 

Finally, do you have any Katrina survivors who are working with 

you on the investigation and complaints and doing really a lot of 

this work, which again, as I mentioned earlier, the amendment to 

both of our bills, the CBC bill and the Baker bill, required? 

12

Ms. KENDRICK. From the HUD perspective, we don’t have 

Katrina survivors working with us specifically. But when we were 

in Baton Rouge, we worked with FEMA and some of their contractors to explain to them the section—our section 3 program to encourage them to hire persons who were displaced by the hurricanes. 

We also were able to—the moneys that we provided to the fair 

housing groups, we were hoping that they would use some of that 

money to hire testers to go out and some of the evacuees would be 

testers. So wherever we can encourage people to hire persons who 

have been displaced we have done so. 

Ms. LEE. I don’t think 30 people are really enough. You may 

think it is adequate, but given what we learned during our hearings, for the life of me, 30 people would just be able to scratch the 

surface on the whole notion of fair housing and making sure that 

people are not discriminated against. 

Ms. KENDRICK. I don’t want you to think just these 30 people are 

dedicated, but everybody on our staff works on fair housing issues 

every day. Because, as I said, the complaints aren’t just coming in 

in Louisiana. 

Ms. LEE. But you said nationwide it is 30. 

Ms. KENDRICK. Nationwide every day those are the people in the 

Gulf region. Nationwide across the country we have our 600 employees who are all dedicated to working on this effort. 

Chairman NEY. I thank the gentlelady. 

The gentleman from California, again, welcome to the committee 

on your first day. 

Mr. CAMPBELL. Secretary Kendrick, if I am looking at your statement correctly, you have received 100 complaints about discrimination to date? 

Ms. KENDRICK. Yes. 

Mr. CAMPBELL. Given that hundreds of thousands of people were 

displaced in these disasters and given the allegations of widespread 

discrimination, 100 out of hundreds of thousands doesn’t seem to 

jibe with the comments that have been made that this discrimination was very widespread. How do you reconcile those allegations 

with the fact that you have only received 100 complaints? 

Ms. KENDRICK. It is very obvious. I have spoken to a number of 

evacuees; and, frankly, they were interested in more immediate 

needs. They have the immediate need of temporary shelter, housing, finding their loved ones. But what we suspect is that once people get settled and they are moved out of the FEMA-sponsored hotels that we are probably going to get more complaints. 

Mr. CAMPBELL. So you don’t think this is indicative of the 

breadth of the issue at this point? 

Ms. KENDRICK. I don’t, and I am being very frank about that. 

Mr. CAMPBELL. Thank you. 

Okay, that is all, Mr. Chairman. 

Chairman NEY. Thank you. 

The gentleman from Massachusetts, Mr. Frank. 

Mr. FRANK. Thank you, Madam Secretary. I understand this is 

new to you, the question of the Internet; and it has been new to 

all of us. 

13

I think we have a serious dilemma here, and I appreciate the 

fact that you set up a task force. And I don’t mean to have you try 

to anticipate the results, but if it turns out that provisions of other 

laws, the Communications Decency Act apparently most likely, immunize the Internet from the fair housing law, would you as a matter of policy be in favor of changing that, that is, given your commitment to enforcing fair housing laws? 

What if, as a result of our inquiry, we found that Congress inadvertently in my judgment but perhaps effectively anyway has said 

that the Internet is immune from the fair housing laws, is that a 

situation you would be satisfied with or should we try to change 

that? 

Ms. KENDRICK. I certainly would not be satisfied with that. I 

frankly think that the Communications Decency Act does not immunize any of these Internet providers. I think that the Fair Housing Act is sufficient to enforce the fair housing laws in this Nation 

against these Internet providers who are discriminating. 

Mr. FRANK. I am not by nature really contrary, so it is nice to 

be able to fully agree with an Administration witness on that point, 

and I very much appreciate your saying that. I would just say then, 

if—and I agree with you, and certainly that was not the intent. But 

if it should be held by the courts that it is the effect of what we 

did, then I hope we will be able to call on you for appropriate help 

in drafting legislation that would change that. 

I notice some of the people from craigslist said, well, we are not 

a newspaper and we shouldn’t be treated exactly like a newspaper. 

I accept that. There may be some differences in how we apply the 

enforcement. But I want to definitely make sure it is enforced. So 

I thank you for that. 

Now as to fair housing in general, I am just asking—because I 

appreciate your answer to the gentleman from California; he asked 

a reasonable question—in your view as the chief Federal official in 

this, by how much has housing discrimination in the United States 

decreased from last year to this year? How much less housing discrimination do we now have than we had a year ago? 

Ms. KENDRICK. I can answer it this way, because I am not sure 

I can answer it the way you want. But the way I can answer it is 

that by the number of complaints that we have received, the number of complaints we have received from October 1st to date is 

about equal to the number we received at the same time last year. 

Mr. FRANK. Then why are we cutting the budget? 

Ms. KENDRICK. I am glad you asked that question. 

Mr. FRANK. I am glad you are glad. 

Ms. KENDRICK. Our budget, while you think it looks like a $1 

million cut, it is a combination of cuts and increases in the fair 

housing budget. 

One of the things that—as Congresswoman Lee has stated, GAO 

audits has asked us to take a look at some of our issues; and one 

of the things we have done in fair housing is to create a Fair Housing Training Academy. By creating a training academy, we are able 

to consolidate some of our training budget and reduce some of our 

training budget so we can consolidate it all at the Fair Housing 

Training Academy. So we are able to reduce some of the budget because of that. 

14

Also, last year, we had a policy conference. Every year that is an 

odd year—or an even year—we have a policy conference. So we put 

money in the budget for the policy conference. This is— 

Mr. FRANK. This is an even year. 

Ms. KENDRICK. 2007 is the odd year. So we don’t need money for 

the policy conference. So that is why it looks like the budget shifted. 

Mr. FRANK. So you are telling us if we were to vote for the budget as submitted, what amount would be available for enforcement? 

More? Same? Less? 

Ms. KENDRICK. It would be the same, sir. 

Mr. FRANK. Same for enforcement. The cut—it still doesn’t seem 

to be enough, and in particular we—I guess the other issue is contingency. And I am glad you mentioned you were able to find some 

money to help out in the Katrina situation, and you mentioned 

$500,000, is not obviously a lot of money in the context of something like that. Is there in your budget any kind of contingency 

funding should similar situations arise? 

Ms. KENDRICK. No, there is not. 

Mr. FRANK. I would think that is something we should look at, 

building on that experience. It could be a contingency that would 

not be spent if it didn’t have to be spent, but give the fact that if 

you did find the need to go to, you had to go to that, the assistance 

of people last time, we ought to learn from that and build that in. 

While I appreciate your answers; and I look forward to getting 

the result. 

Let me just ask one question. I assume that at some point you 

would be willing to do an enforcement action against people who 

are blatantly racist on the Internet. Because, obviously, that would 

be the prerequisite for finding out what the courts considered to be 

the case. So you are telling us if you find a case which does violate 

the law, leaving aside the potential immunization, you would then 

bring an enforcement action that would then allow us to get this 

into court? 

Ms. KENDRICK. Yes, sir. I have consulted with our General Counsel. Our General Counsel has assured me that we have the authority under the national Fair Housing Act to enforce against Internet 

providers who discriminate and against those persons who advertise on the Internet in a discriminatory manner. We have the authority to enforce under the national Fair Housing Act, and we will 

do so if we find discrimination. 

Mr. FRANK. It shouldn’t be too hard to find discrimination, and 

then we will see if we have to take any further action. Thank you. 

Chairman NEY. The gentleman from Texas, Mr. Green. 

Mr. GREEN. Mr. Chairman, I see that we have been joined by our 

ranking member, and I would gladly yield to her. Neophytes do 

learn protocol, Mr. Chairman. 

Thank you again, Mr. Chairman. 

I do want to, if I may, acknowledge the presence of an NAACP 

representative. The director of the Washington Bureau, Mr. Hillary 

Shelton, is here. And I know we have a NAACP representative who 

will be on the next panel. But I am honored that he has chosen 

to be here. As you know, the NAACP is our oldest civil rights orgaVerDate 0ct 09 2002 13:14 Oct 23, 2006 Jkt 028100 PO 00000 Frm 00020 Fmt 6633 Sfmt 6633 F:\DOCS\28100.TXT HFIN PsN: TERRIE
15

nization, and we are hopeful that it will be acknowledged as such 

by the Congress at some point in the near future. 

If I may, I would like to thank you also, Ms. Kendrick, for not 

only being here today but for coming to Houston and announcing 

that you were going to be a part of this fight, if you will, to eliminate discrimination in housing. 

Secretary Jackson was there, and he made some very strong 

comments about his position on discrimination and the elimination 

of discrimination. 

I remember one question which took us beyond what we traditionally think of discrimination and it had to do with discrimination against just a Katrina victim, a person who may not be of African ancestry, a person who may not be bound by some disability, 

and how would just a person who is a Katrina victim be helped? 

And, apparently, it is not easy to help white people who are discriminated against, but we know that it happens. If you are white 

and if you are a Katrina survivor and you apply for housing and 

someone rejects you simply because you are a Katrina survivor and 

you happen to be white, it creates a concern. Have you had an opportunity to review that situation of just a victim who is not of an 

ethnic group, not religious discrimination, not based on some disability, not based on gender, but based upon the fact that someone 

just doesn’t want a Katrina survivor living on their property? 

Ms. KENDRICK. Under the Fair Housing Act, as you know, we 

have a group of protected classes. If you don’t fall within the class, 

you are not protected by the Fair Housing Act. 

Notwithstanding, at FHEO, we take a look at all issues and try 

to work—investigate those issues and try to work with those persons. For example, just because you are a Caucasian doesn’t mean 

you are not protected. We had a case in Georgia where the family 

notified us that their employer was not accepting Katrina evacuees, 

and we were able to take that as a complaint. 

So we try to work with everybody who comes forward because we 

know everybody needs help. Whether we take it as a fair housing 

complaint or just deal with it because we are HUD, we try to deal 

with it, sir. 

Mr. GREEN. What percentage of the people served and helped 

would you say are not of African ancestry because of some disability that is recognized, but they are not African Americans? 

The point I am trying to make is that a lot of these dollars will 

benefit people who are not of African origin. Sometimes we tend to 

think of fighting discrimination as a black and white issue and the 

black person being the sole beneficiary of the moneys that are allocated. But my suspicion is that we have a good number of persons 

who are not of African ancestry who benefit from these dollars, and 

maybe you have some anecdotal or empirical data to support my 

thesis. 

Ms. KENDRICK. It is about 50 percent of the complaints we receive, about 50 percent are not African American. 

Mr. GREEN. Moving along to something else that happened last 

year, we were able to—with the help of Ranking Member Barney 

Frank, Ranking Member Maxine Waters, Congresswoman Barbara 

Lee, Congrssman Hastings of Florida, and Congressman Grijalva, 

we were able to add $7.7 million to fight discrimination in housing; 

16

and we received bipartisan support for that. And people want to—

there is a core group of folks who seem to want to make sure that 

we are in a position to fight discrimination in housing. And I mentioned that because I think that same group of folks will want to 

do what they can this year to make sure that we have adequately 

funded this effort to fight discrimination in housing. 

If an effort is made to assist you, could you use a few more dollars in that budget if you had them? Not that you would solicit, but 

if you had them, would you find a meaningful way to use a few 

more dollars? 

Ms. KENDRICK. If they magically appeared in our budget, we 

would use them. 

Mr. GREEN. Thank you. Sometimes we have the magic touch here 

in Congress. 

Let me just mention one more thing as I close. You are not the 

supervisors of HUD—pardon me of FEMA, is that correct? 

Ms. KENDRICK. That is correct. 

Mr. GREEN. You don’t supervise FEMA. 

Ms. KENDRICK. No. 

Mr. GREEN. And I don’t want you to grade FEMA. But, apparently, there are some things that FEMA should be doing, that they 

haven’t done well, but I think that you sometimes get the blame. 

These trailers, for example, I think that is a FEMA responsibility, isn’t it? Are you involved in helping to get those trailers located on lots in Louisiana and Mississippi? 

Ms. KENDRICK. What we are doing is we are assisting FEMA in 

their efforts to get the mobile homes, manufactured housing placed 

in parishes in Louisiana. 

Mr. GREEN. And tell us what role you play in that, if you would, 

please. 

Ms. KENDRICK. What we are doing is FEMA brought to our attention that they had some—maybe 50 parishes out of—only 8 parishes out of 64 that were willing to have trailers situated in their 

communities as a group trailer facility, and they brought that to 

our attention. So what we are doing is we are investigating those 

parishes to make sure that any time they make a decision not to 

situate group trailers in their parishes, that the decision is not 

based on any type of discriminatory manner. 

Mr. GREEN. Finally, in your comments, you indicated there are 

people who literally don’t want African Americans in their communities; and they are concerned that if you bring in the trailers that 

will bring in the African Americans. I want to compliment you on 

acknowledging that. 

One of the first things that we have to do, if we want to eliminate discrimination, is to admit that it exists; and I am pleased 

that you are publicly admitting and saying this. 

My suspicion is that you know well what discrimination is, and 

sometimes a visual inspection of a person can tell you a lot about 

a person. And as I visually inspect you, my suspicion is that you 

dealt with discrimination in your lifetime. But it is good for your 

agency to say that, that it exists and that you are fighting it and 

that there are people out there who don’t want certain people to 

move into their neighborhoods. Because there are others who literally try to disavow the existence of any discrimination at all. Do 

17

you keep statistical information on these acts of discrimination and 

how they are resolved? 

Ms. KENDRICK. Yes. The complaints that come into HUD—we 

keep a record of all the complaints that come in and how they are 

resolved. 

Mr. GREEN. You mentioned 100 complaints. For every 100 that 

you get, do you have a guesstimate as to how many are not filed 

and not reported? 

Ms. KENDRICK. I don’t have a guess on that, but certainly you 

can assume that there are some people who just don’t want to file 

complaints. 

We have situations even in the Katrina incidents where we have 

tracked down people based on news accounts and wanted to help 

them; and they have said, no, I don’t want to file a complaint. I 

just want to move on and find housing. 

We know it is out there. We know some people who are discriminated against don’t want to file a complaint, but we still try to help 

those persons. 

Mr. GREEN. Well, thank you very much for your testimony; and 

I yield back the balance of my time. Thank you, Mr. Chairman. 

Chairman NEY. I thank the gentleman from Texas. 

We have been joined by our ranking member, the gentlelady 

from California. And, again, as at the beginning the hearing, we 

thank the gentlelady for her time and attention and perseverance 

on the first official committee hearing which we had in the Gulf of 

the Housing Subcommittee. 

Ms. WATERS. Thank you very much, Mr. Chairman, and I thank 

you for holding the first official hearing in the Gulf region on the 

issues that confronted us relative to Katrina, the housing issues, of 

course, in particular. Not only did you go to New Orleans but to 

Gulfport, and we toured all the way down through Bay Saint Louis. 

But it was because of that hearing that we were able to really 

focus attention on what was happening with the trailers and what 

the problems were that the citizens were encountering in an attempt to get those trailers. So your follow-up today is absolutely 

commendable. Not only did you hold the first hearing, you are following up, and you have been very generous with all of the members of our panel in allowing us to pursue the issues in a way that 

I have never seen done before. 

I know that when we were in Mississippi you allotted me extraordinary time on the panel to pursue the trailer issue, and I 

want you to know that I really do appreciate that. 

To Ms. Kendrick who is here today—and let me apologize for 

being late. We were held up in an election over at the CBC meeting 

that had to take place this morning. 

To Ms. Kendrick who is here, I have been updated quickly about 

your testimony and the questions that has been raised of you. I 

think that this committee, the members here, have covered most of 

what we have been concerned about with what is going on in the 

Gulf region and in New Orleans, from my point of view in particular, and the discriminatory tactics that are being employed on 

the Internet and with the owners of rental property; and you have 

responded to that. 

18

As I understand it, not only are you—do you agree that there is 

a problem, you also have initiated that you have no problems in following up with the enforcement powers that you have in order to 

deal with this basically discrimination and, in some cases, racism 

and discrimination. 

So let me just say I have one little bit of an inquiry, and I don’t 

even know if it is applicable to the supplemental CDBG funds that 

we authorized from this committee. Most of us believed, and I 

thought we had done that in such a way that those funds would 

be used for housing for low- and moderate-income persons, for the 

most part. The supplemental, yes. However, I guess there are some 

questions about who controls the supplemental and how is it being 

used, those funds that we authorized. 

Are you aware of the CDBG funds, the Community Development 

Block Grant funds, and how they are being used and whether or 

not there is some attempt to use them for something other than 

what we authorized? 

Ms. KENDRICK. I am aware that a $11.5 billion supplemental appropriation was provided for the Community Development Block 

Grant program. I also know that there was a notice published in 

the Federal Register that explains how those funds should be used, 

and I know that the Secretary wants to encourage that those funds 

be used for housing opportunities in the Gulf Coast. 

Ms. WATERS. Are you aware that there are any attempts to use 

them for anything other than housing, for example? Are people 

using them to support other programs in addition to housing, because I am not aware, it has just been brought to my attention. Of 

course we are going to take a look at it, but I thought perhaps you 

might know something about some attempts to direct the funds in 

other social programs, etc. 

Ms. KENDRICK. As you know, the way the program is set up, the 

Gulf region—those States in the Gulf region—will be submitting 

plans to HUD for review. We can’t approve the plans, but the way 

the language in the appropriation was set up, we are supposed to 

take a look at the plans and help guide them in that direction. It 

is going to be the local, the States, that will be responsible for developing the plans and how they want to best use the money for 

their communities, but HUD does have a role in reviewing those 

plans. 

Ms. WATERS. I think we did have some questions about whether 

or not the Governors of those States would be in control of those 

moneys or whether or not it would operate in the traditional manner, going into the cities, where the cities, basically through their 

city councils, have plans and ways by which they disseminate those 

funds. Are you aware of that discussion? 

Ms. KENDRICK. I am aware, just reading the statute, reading the 

notice, the Federal Register notice, that the Governors have to submit plans for their States. 

Ms. WATERS. If I may, Mr. Chairman, that is a little bit different 

than normal. 

Chairman NEY. The question is in regard to the— 

Ms. WATERS. The CDBG funds. With our supplemental authorization did we also write something in that would allow the GovVerDate 0ct 09 2002 13:14 Oct 23, 2006 Jkt 028100 PO 00000 Frm 00024 Fmt 6633 Sfmt 6633 F:\DOCS\28100.TXT HFIN PsN: TERRIE
19

ernors to be able to direct these moneys in ways different than we 

normally do when those moneys go into the cities? 

Chairman NEY. I don’t believe we did but I don’t want any mistakes, so we will have to get a direct answer. I think the Governors 

have some discretion in it of what they can do, but we do need to 

get an answer. I am not completely positive. 

Ms. WATERS. Thank you very much. I have no further questions. 

Thank you. 

Chairman NEY. With that, I want to thank you for your time 

today. 

Ms. KENDRICK. Thank you. 

Chairman NEY. We will go on to the second panel. I want to welcome Panel II. 

First we have Mr. Derrick Johnson, the president of the NAACP 

Mississippi State Conference, who was also in Gulfport with us. So 

it is a pleasure to see you again. The NAACP is the Nation’s oldest 

and largest civil rights organization. It has a half million members 

throughout the United States and the world, and advocates for, 

and monitors for, civil rights and equal opportunity. 

The next witness is Janet Murguia, the president of the National 

Council of La Raza, a nonpartisan, nonprofit organization 

headquartered in Washington, D.C., the largest national Hispanic 

civil rights and advocacy organization in the country. Welcome. 

Also, Mr. James Perry, the executive director of the Greater New 

Orleans Fair Housing Action Center, who was with us in New Orleans during the hearing. The Center works to eradicate housing 

discrimination in the greater New Orleans area. Currently the 

Center is focused on the issue of predatory lending. 

Joseph Rich is the project director of the Housing and Community Development Project for Lawyers Committee for Civil Rights 

Under Law. The committee’s major objective is to use the skills and 

resources of the legal profession to obtain equal opportunity for minorities by addressing factors that contribute to racial justice and 

economic opportunity. 

And also Shanna Smith, the president and CEO of the National 

Fair Housing Alliance, which is the only national organization 

dedicated solely to ending discrimination in housing since 1990. 

She has led the agency as it works to ensure equal housing opportunity for all people. 

Chairman NEY. We will begin with Mr. Johnson. 

STATEMENT OF DERRICK JOHNSON, PRESIDENT, MISSISSIPPI 

STATE CONFERENCE, NAACP, JACKSON, MS 

Mr. JOHNSON. Thank you Chairman Ney, Ranking Member Waters, Congressman Green, and other members of the committee. I 

would like to thank you for inviting me to speak here today. I was 

really hoping to go last but looks like I am going first. 

Chairman NEY. We can change that order. I have no problem. 

Mr. JOHNSON. I am fine, since I have started now. Founded in 

1909, the NAACP is the Nation’s largest civil rights organization. 

The Mississippi State Conference has been active in providing civil 

rights advocacy for over 60 years and has a mission to ensure political, educational, social, and economic equality rights of all persons, 

and to eliminate racial hatred and racial discrimination. 

20

On January 9th, after Katrina, Mississippi NAACP held a State 

Legislative Gap Analysis Convening, gathering stakeholders to discuss State or housing policy, pre-Katrina, and to identify potential 

policy gaps in preparation for the 2006 legislative session. Participants included local and national housing experts, legislative and 

community stakeholders. As a result of this convening, we identified several policy gaps that would lead to ongoing housing discrimination for African Americans and low-income individuals. 

The Governor’s Commission Report, of which I served as Vice 

Chair, included preliminary data on housing damaged by the storm 

and noted that although all people were struck by the storm, lowincome households were more likely to lose their homes due to a 

greater likelihood of living in older properties. 

The storm has further eliminated affordable housing on the coast 

and a wave of evictions and rent gouging threatens to exacerbate 

the displacement of low- and moderate-income families from their 

coastal communities. We have already seen eviction cases clogging 

the courts and TV news stories covering tenants in low-income developments threatened with evictions to make way for higher rents. 

Additionally, low- and moderate-income homeowners in some 

communities face fights with their insurers to receive coverage or 

receive settlement adequate to make needed repairs. While those 

problems face low- and moderate-income owners and renters, they 

are of particular concern to African American communities, particularly historic coastal communities like Turkey Creek, North 

Gulfport, and Forest Heights communities in Gulfport and East Biloxi that were already dealing with decades of exclusion and disinvestments from the storm. 

If the housing problems faced by these groups are not addressed, 

we fear that the storm and the Government’s response may permanently displace a large number of African Americans and lower-income people. We feel that those able to stay and return would no 

longer recognize their communities, as gentrification pushes people 

of color out. 

In regard to fair housing, Mississippi does not have a Fair Housing Act, resulting in housing discrimination going unchecked in 

many instances. Housing discrimination can be subtle and all too 

often goes unreported, since the victims may not even know they 

are being discriminated against. They are simply told a house or 

property has already been rented or offered different rent than 

other applicants. 

Importantly, the lack of State and local fair housing agencies 

means that victims of discrimination are also not aware that there 

are options to enforce the law, or lack the resources to do testing 

or otherwise investigate claims of discrimination. A State law creating these enforcement and testing agencies funded by either 

State or Federal monies could make a tremendous difference in 

making prospective buyers and renters aware of their rights and 

owners aware of the law. However, State legislators in this legislative session decided not to approve a bill which would have created 

a Fair Housing Act for Mississippi. 

In regard to CDBG funds, as you are aware, Congress appropriated over $5 billion in funds for Mississippi. Because of the discretion given to States, particularly the Governor, there is no guarVerDate 0ct 09 2002 13:14 Oct 23, 2006 Jkt 028100 PO 00000 Frm 00026 Fmt 6633 Sfmt 6633 F:\DOCS\28100.TXT HFIN PsN: TERRIE
21

antee that any of these funds will be used in ways to benefit lowor moderate-income homeowners or to do anything to create or rehabilitate rental housing affordable to the poorest and most vulnerable families displaced by the hurricane. Nor does the proposed 

plan by the Governor make any provisions for individuals with disabilities. This will be the greatest tragedy and example of discrimination of all, especially since the Governor’s Commission Report 

identified both of these issues as significant needs since Katrina. 

The most vulnerable residents will be excluded. 

Under the Governor’s proposed plan, he is proposing to provide 

grants up to $150,000 to individuals who are owner-occupied homeowners. They must be outside of the flood zone and the homeowner 

must have had insurance before Katrina, but no flood insurance. 

The Governor’s plan fails to provide support for senior citizens 

who may own their home but are on a fixed income, i.e., Social Security, and could not afford insurance; senior citizens who live in 

affordable housing complexes; home renters or residents who live 

in affordable or subsidized housing that was destroyed. 

The CDBG funds do not, however, need to be used in the manner 

the Governor is proposing. Though the Federal appropriation must 

be administered by an entity chosen by the Governor for each 

State, nothing in the Federal law requires that the funds be spent 

on any particular program. We strongly believe that the funds 

should prioritize those most in need and that the Secretary of HUD 

should not waive the 50 percent requirement that funds support 

low- or moderate-income individuals. Not only is that requirement 

already reduced from the 70 percent normally required by CDBG 

funds, it ignores the disproportionate funds and resources such as 

the SBA loan program that benefits middle- or lower-income households but have redacted lower-income homeowners at staggering 

rates. 

Homeowner counseling should be required to prevent predatory 

practices. Under the Governor’s plan there is a great concern that 

low-income homeowners will be disadvantaged without mandatory 

homeowner counseling. For those who are eligible for the homeowner grant, the process would occur in the following manner. A 

private entity that the State will contract with will determine eligibility of recipients of CDBG funds under the direction of the Mississippi Development Authority. Those who are deemed eligible will 

receive a check up to $150,000 dollars. 

Chairman NEY. I am sorry; the time has expired, but if you 

would like to summarize, and, without objection, put all the testimony as part of the record. 

Mr. JOHNSON. Okay. Let me go directly to the recommendations. 

Under potential issues that are listed on the page, three recommendations we would like to see come out of this process: a 

strong, funded counseling component that informs check recipients 

of their rights and consumer protections and identifies eligible 

users. If checks are provided through homeowners, they will be 

dual-signed over to the homeowner and the bank. Banks will have 

an obligation to try to get their mortgage paid off and homeowners 

will be left holding a piece of slab that they will have no funds to 

repair. 

22

Two other issues we identified: Money must be set aside to assure that the rights of people with disabilities are not violated 

through inadequate program design, and affordable housing is replaced on a one-to-one basis. That is a provision that was taken out 

of the supplemental CDBG package. 

The final recommendation for the committee is that the Secretary of HUD should not waive the 50 percent requirement that 

funds support low-or moderate-income individuals and should require that the State plans for using the CDBG funds demonstrate 

how that will address the needs of all groups affected by the hurricane. 

Thank you, and I would like to enter my written testimony into 

the record. 

Chairman NEY. Without objection. Thank you, Mr. Johnson. 

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

48 of the appendix.] 

Chairman NEY. The next witness. 

STATEMENT OF JANET MURGUIA, PRESIDENT AND CEO, 

NATIONAL COUNCIL OF LA RAZA 

Ms. MURGUIA. Hello. My name is Janet Murguia and I am the 

president of the National Council of La Raza. I want to thank the 

committee for inviting us to speak on this very important topic. It 

is an issue we have followed very closely, and in fact later today 

NCLR is releasing its own report on Hurricane Katrina and where 

the failures occurred when it came to, particularly, the Latino community. And we also make recommendations about lessons learned. 

So I appreciate the chance to be here today. 

I also want to extend a special thanks to Chairman Ney, Ranking Member Waters, Congresswoman Velazquez, and Congressman 

Tiberi for their hard work on housing counseling and other housing 

issues important to Latinos. I see Congressman Green. I know you 

were the host of a town hall for many of us in the Latino community and other communities of color, most recently through the tricaucus. Thanks for your work in Houston. 

As an advocate for Latino families, I understand the pivotal role 

of fair housing and a family’s pursuit of life opportunities. And I 

know from my own personal experience, growing up in a large Hispanic family, in a small house, how important that opportunity of 

home ownership can be. There were nine of us, so we were crowded 

and the house was old, but it was ours. Growing up in a home, no 

matter how poor the neighborhood, gave us a sense of community 

and a sense of pride. 

Equal access to housing is critical to the stability of neighborhoods everywhere and is essential to the strength of communities 

anywhere. It is especially critical to the rebuilding efforts of the 

Gulf Coast region. And I have had a chance to visit there at least 

once or twice since the hurricane. 

I want to begin by telling you about Nilo Cervantes. He is a legal 

permanent resident of Mississippi. He had been a hardworking employee of Tyson Food Company but lost his job in the wake of 

Katrina. Like other storm victims, he turned to the American Red 

Cross when he lost his home. Unfortunately, help was not what he 

found. Instead, he and nearly 40 other people were told the shelter 

23

was not available to out-of-state workers or non-U.S. citizens. They 

were evicted the next day. 

Whether they didn’t bother to ask or didn’t believe his story is 

not clear; what is clear is that he and others were targeted because 

they are Latino. His story is indicative of the antiimmigrant backlash that has sprung up across the country. As a result, many 

Latinos are unfairly stereotyped as being immigrants or illegally 

present, or both. 

This has led to increased discrimination, especially in the area 

of housing. Housing discrimination against Latinos is not new. Research sponsored by HUD in 2000 showed that discrimination 

against Latino renters had actually increased since 1989 and new 

data is telling us that discrimination rates are on the rise in the 

current climate. 

This committee has already heard many alarming reports of discrimination against Gulf Coast residents. I echo these concerns and 

the concerns of my fellow presenters. Such discriminatory acts will 

erode decades of work in fair housing. 

I would like to share three areas of particular concern and then 

discuss the implications that they have for the rest of the country. 

First, many Latino workers are still unable to find decent housing. Promised housing by their FEMA-contracted employers, these 

workers are forced to live in tents on the outskirts of construction 

sites. 

Second, many homeowners are facing possible foreclosure. We believe that these families are extremely vulnerable to predatory 

lenders. 

And, third, the Internet threatens to become a new tool for discrimination. 

As you have already heard from the Greater New Orleans Fair 

Housing Action Center, Web ads clearly stated that Latinos and 

families with children were not welcome. I am unhappy to report 

that such discrimination is not limited to the Gulf Coast. For example, just last week The Washington Post reported that two local cities are using zoning codes to profile Latino families. Despite repeated inspections of their home, few, if any, infractions were 

found. They are trying to block Latino families from their neighborhoods. Making matters worse, the current enforcement system is 

ill-equipped to handle these issues. Too few have access to the information they need and too few Latino organizations are involved 

in fair housing enforcement. 

Recourse for a discriminatory act is unlikely. Even if legal action 

is taken, the process is slow and painful for the family. 

It is clear that Congress must act on these issues, and in the 

spirit of bipartisanship I would like to make the following recommendations: first, target a portion of reconstruction funds toward fair housing; second, engage communities in the battle 

against housing discrimination; third, hold Web site hosts accountable for discriminatory ads; and, finally, fully fund an adequate fair 

housing outreach and enforcement system. 

This testimony obviously is focused on Latinos but I believe it applies to all communities of color and all those in need. I invite you 

to please read our written statement for further information. We 

stand ready to work together with this committee and we thank 

24

you for this opportunity. I am happy to answer questions at the appropriate time. 

Chairman NEY. Thank you. 

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

59 of the appendix.] 

STATEMENT OF JAMES PERRY, EXECUTIVE DIRECTOR, 

GREATER NEW ORLEANS FAIR HOUSING ACTION CENTER, 

BATON ROUGE, LA.

Mr. PERRY. Thank you Chairman Ney, Ranking Member Waters, 

and members of the committee. I welcome the opportunity to speak 

to you on Mardi Gras today. It is so important to me that I let go 

of the festivities and made it out to Washington D.C., for the hearing today. Very tough thing to do. 

Our organization is an 11-year old private, nonprofit civil rights 

organization established to eradicate housing discrimination in the 

New Orleans Metro area. I had the great opportunity to speak to 

this subcommittee in New Orleans on January 13th. And so today 

I am going to not go through a lot of the detail that I went through 

that day, but instead really focus significantly on the Internet advertising cases that we have had to take in since the hurricanes. 

At the last hearing I gave you a brief overview, but I am going 

to go into some more detail here today. In early December, we received information from an evacuee concerned about several advertisements that she had noticed on Katrinahousing.org. In a matter 

of minutes she faxed a printout of the ads to me. When I conferred 

with our staff attorney, she thought that the ads must be a hoax. 

We read the ads together and we saw the following: 

‘‘I would love to house a single mom with one child; not racists, 

but white only.’’ ‘‘Not to sound racist but because we want to make 

things more understandable for our younger children, we would 

like to house white children.’’ ‘‘Provider will provide room and 

board for $400, prefers two white females.’’ ‘‘White Catholic family, 

children welcome.’’ Last but not least, ‘‘room available to single 

white mother with child or younger to middle-aged white couple.’’ 

We immediately sought to determine the authenticity of the advertisements. We logged onto Katrinahousing.org and searched for 

housing in the State of Louisiana and instantly five discriminatory 

advertisements popped up. It didn’t take us any time to find them. 

What that communicated was perhaps this isn’t some anomaly 

but, rather, a normal happening on the Web site. I spent the rest 

of the day searching Web sites related to the evacuation process 

and found five different Web sites and found about 28 pages of ads 

just in that first day that were discriminatory. The advertisements 

were on Katrinahousing.org, Katrinahome.com, DHR online, and 

reliefwelcomewagon.com. 

I was really disappointed to find one of the Web sites, DHR online, is a FEMA-sponsored Web site. When an evacuee registers for 

housing through the FEMA process and finds out whether or not 

they are going to be qualified, the FEMA Web site directs them to 

DHR online to look for housing opportunities on DHR online. The 

two are interrelated. 

25

So as a result, on December 23rd, we partnered with the Lawyers’ Committee for Civil Rights and the Relman Law Firm to file 

a complaint against each of these Web sites, so we have gone forward with that complaint process. 

To date, none of the cases have been settled. Some of the sites 

have removed the discriminatory advertisements or put forth some 

mechanism to prevent discriminatory advertisements from being 

placed, but we are still working through that process. It has been 

a long, arduous process. We really thought when we brought this 

to their attention they would spring into action to remove the advertisements and things would happen quickly, but unfortunately 

it has been a very slow process. 

One of the big issues is that they have attempted to defend their 

actions by using the Communications Decency Act. They have said 

that the Communications Decency Act immunizes them. Obviously 

we disagree, as does Assistant Secretary Kim Kendrick. It doesn’t 

give them immunity. But there is at least one court that has sided 

with them that perhaps there may be some immunity. That is a 

big issue and the case may be, as Representative Frank said earlier, that inadvertently Congress may have given Web site providers the idea that perhaps they don’t have to comply with the 

Fair Housing Act when they publish discriminatory advertisements. We think it is a wrong and bad reading of the Communications Decency Act. 

With that said, what I would implore from members of this committee, and Members of Congress in general, is an amendment to 

the Communications Decency Act that very clearly settles the 

issue. The amendment can clearly and very plainly state that nothing in the CDA limits the Fair Housing Act or limits the effect of 

the Fair Housing Act. I really think that a very simple one- or twoline amendment would remedy the problem. 

If the New York Times or the Washington Post ran any of these 

advertisements that I read to you today, there would be no question of liability. And they would instantly remove the Web sites because there is so much case law that establishes that they are liable in these situations. But because of the Communications Decency Act, some of these Web sites think that they can go forward 

here; that they don’t have to remove these advertisements; that 

they have no obligation. They think that it is okay for them to have 

an advertisement that says that it is illegal or that says that they 

won’t allow a person to rent a home because of the color of their 

skin or national origin, etc. So we implore your action on this issue. 

In recent years there have been a large number of cases that 

have come up on Internet advertising situations. Only weeks ago 

there was a Web site, a lawsuit filed against craigslist. In 2003, the 

Justice Department negotiated a settlement against a Web site 

called sublet.com. And then the San Fernando Valley and Fair 

Housing Council of San Diego are currently litigating against roommates.com. As the Assistant Secretary mentioned earlier, there are 

about 15 cases that HUD is currently considering dealing with 

these Internet advertising cases. 

According to the housing advertising guide, most families now 

who are looking for housing turn first to the Internet when looking 

for a home before looking to any print advertising. I submit to you 

26

that this is the way people are going to look for housing in the future. This is it. And so it is appropriate for Congress to act now 

to make sure that there are proper safeguards so people are not 

discriminated against. It will erode some of the great strides in the 

fair housing arena. 

I have a significant number of additional comments, but because 

I have been able to make many of them before the committee before, including the recommendations, I will conclude my comments 

there and submit my written comments for the record. 

Chairman NEY. Without objection. Thank you. 

[The prepared statement of Mr. Perry can be found on page 66 

of the appendix.] 

Chairman NEY. Mr. Rich. 

STATEMENT OF JOSEPH D. RICH, PROJECT DIRECTOR OF THE 

HOUSING AND COMMUNITY DEVELOPMENT PROJECT, LAWYERS’ COMMITTEE FOR CIVIL RIGHTS UNDER LAW 

Mr. RICH. Thank you Chairman Ney and Ranking Minority 

Member Waters. My name is Joe Rich and I want to thank you on 

behalf of the Lawyers’ Committee for inviting us to this hearing 

today, and particularly Barbara Arnwine, our executive director, 

asked me to thank you as well. 

In our written testimony that has been submitted, we set out two 

major fair housing issues that I would try to summarize. I want to 

introduce our testimony into the record and I will try to summarize 

what is in it. 

First, I want to make one point that I think is very important 

that came up early and has been coming up at all hearings: how 

important it is for Members of Congress to go to the coast and see 

what is actually going on. I am pleased to hear that Speaker 

Hasteret and Minority Leader Pelosi are going down, and I don’t 

know how many are going with them, but I urge that. 

First, let me just touch on the Internet advertising issue that 

James has summarized so well. First, I want to say how much of 

a pleasure it has been for us to work with the Greater New Orleans Fair Housing Action Center. 

I wanted to make a couple of points about the Internet issue. It 

is a growing issue. As James pointed out, the amount of advertising for housing is growing, the amount of advertising in the 

press is declining, and if the defense that is routinely brought up 

by Internet providers through the Communications Decency Act is 

found by the courts to be valid—which we don’t think it is—we 

think that the act was designed to protect against obscenity, defamatory statements, not Fair Housing Act discrimination statements. Nonetheless, there is some uncertainty on this. And if this 

were permitted, you would have the absurd situation of ads that 

were in a newspaper being illegal and ads on the Internet not 

being discriminatory ads. 

I second the suggestion that James made about what could be a 

fairly simple fix of this by Congress to clarify this point, something 

that Congress did not intend to do and should make clear now to 

avoid the ongoing litigation. 

The second area I wanted to touch on was the importance of another part of the Fair Housing Act, section 808, which puts a duty 

27

to affirmatively further fair housing on the agencies that use Federal funding as well as the agencies that receive the Federal funds. 

This actually imposes an obligation to promote fair housing, to promote racial integration, and to ensure that more minorities are not 

excluded. Particularly in this situation, this is an extremely important part of the Fair Housing Act. It touches on so many of the 

things that are problems. 

Derrick Johnson mentioned the CDBG problem. I would add one 

thing; in Mississippi you have a situation where the money now is 

proposed to be used only for homeowners who are insured. This 

leaves out low-income homeowners who cannot afford insurance, 

and that is a real gap for low-income people and it is where you 

need to see section 808 needs to be applied. 

I think the States are looking at these issues now, and hopefully, 

they will address them. If not, HUD must be very, very vigilant in 

doing that when they review the plans. And that also goes to the 

issue of the 50 percent of the money that is set aside for low- and 

moderate-income. 

Secondly, what is really missing from these plans is money for 

rehabbing, rebuilding apartments for low-income and moderate-income people. Indeed, all of these plans have very little money for 

renters. Without that, the low-income people are disproportionately 

affected. And there is a real need now to do something about rebuilding subsidized housing. 

I will just give you one example and then I will stop. When we 

were down in Mississippi back in October, a group of people came 

to us who lived in a subsidized housing project and they told us—

this was a Thursday—they told us on a Monday that they were 

going to be evicted. We went over to look at the property. The property was in horrendous condition not only from the hurricane but 

pre-hurricane. We were able to go to the landlord and stop the evictions. 

Since October, there has still been no effort made to rehab this 

building; and the people, while they are able to stay there, they are 

living in these continued horrendous situations. 

It is important that there be money set aside to rehab and rebuild this type of housing. It is another fair housing issue, and it 

is something that I think HUD should consider when they are reviewing the plans. 

Thank you. 

Chairman NEY. Thank you. 

[The prepared statement of Mr. Rich can be found on page 101 

of the appendix.] 

Chairman NEY. Ms. Smith. 

STATEMENT OF SHANNA L. SMITH, PRESIDENT AND CEO, 

NATIONAL FAIR HOUSING ALLIANCE 

Ms. SMITH. Thank you, Chairman Ney. My name is Shanna 

Smith and I am with the National Fair Housing Alliance. You have 

my testimony for the record, so I would like to instead address 

some of the things that were raised with the Assistant Secretary 

in some of the other questions that came up. 

First of all, the testing that the National Fair Housing Alliance 

engaged in immediately in September was provoked because we 

28

know many people who experience discrimination simply don’t report it. There are more than 2 million estimated instances of race 

and national origin discrimination occurring annually in the United 

States. HUD handles less than 3,000 complaints, the State and 

local government agencies handle around 6,000, and the private 

groups handle around 16- to 17,000. We are not even touching the 

tip of the iceberg with the amount of discrimination that is going 

on. Representative Campbell asked how much is really happening 

with more than 1 million people displaced from New Orleans. I 

don’t think any of us know that answer because without testing we 

won’t understand the nature and extent of the discrimination. 

We know that African Americans and people with a disability file 

more complaints. We do know that Latinos and Asian Americans, 

many of whom were displaced throughout the Gulf Coast, rarely 

file complaints. So we must conduct testing by sending out white 

testers with Latino, African American, and Asian American testers 

and people with disabilities to see how the housing market is actually treating them. 

What we found in our initial testing in 65 paired tests was that 

43 out of the 65 tests showed that African Americans were being 

given untruthful information about availability, about the amount 

of rent that was going to be charged, the security deposit, and they 

all identified themselves as Katrina evacuees. 

We did telephone testing, which is using linguistic profiling. I 

know Congresswoman Lee said she wondered how that works. All 

of us make judgments based on a person’s phone voice when we are 

talking to them. We might not guess right. If you are from the 

North and I am from Ohio, northern Ohio, so my accent is a little 

different than people from southern Ohio and—I know we are from 

Ohio but we have this Midwest accent. 

When you are talking to someone, we guess about them by their 

voice. It doesn’t mean we are a bigot when we do that, our brain 

just filters information as it comes in to us. What we do with that 

information is what gets these landlords in trouble. 

So many of them decided that the person they were talking to 

was African American or Latino and chose not to give them truthful information about an apartment. 

We went through the Internet; as you heard in the previous testimony that so much is being done on the Internet. We also tested 

large apartment complexes. We didn’t do the mom-pop kind of situation. We went to large complexes where we know they know the 

law and we found high rates of discrimination. 

We then chose some of the tests where it wasn’t clearcut from 

the telephone test. We took five of those and we flew African American and white testers out to the apartment complexes in these 

States and we had them make an in-person visit. In three out of 

five of those investigations, it showed discrimination. 

So we found that it is very subtle or very direct on the phone and 

some of the subtlety when you show up in person gets to be quite 

serious. 

We are in the middle of conducting more testing in three more 

States. In two of the three States we found another high rate of 

discrimination. The people again were identifying themselves as 

relocatees with employment, not low- and moderate-income; famiVerDate 0ct 09 2002 13:14 Oct 23, 2006 Jkt 028100 PO 00000 Frm 00034 Fmt 6633 Sfmt 6633 F:\DOCS\28100.TXT HFIN PsN: TERRIE
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lies with children and looking for housing for which they were 

qualified. 

In sum, I would like to say that if Assistant Secretary Kendrick, 

whom I believe is a breath of fresh air, doesn’t want additional 

money; if you put additional money into the Fair Housing Initiatives Program I guarantee you that the private fair housing movement can use that money, use it on the ground right now to assist 

people who are victims of housing discrimination. Thank you. 

Chairman NEY. Thank you very much. 

[The prepared statement of Ms. Smith can be found on page 113 

of the appendix.] 

Chairman NEY. On that issue I heard a statement made, I saw 

it on television last week, where a couple of people had publicly 

said down in New Orleans that people—they didn’t want people 

back into public housing unless they had a job. Are you aware of 

this? 

Ms. SMITH. Yes, I saw that. 

Chairman NEY. Do you consider that to fit under the current law 

or not? 

Ms. SMITH. Well, subsidized housing is not just for people who 

are employed. People with disabilities will not be employed. And 

some of the families, as they are coming back, will need housing. 

I think part of the purpose when public housing was created in the 

1930’s was to help people who were not employed, who were employed, to have affordable housing. If I have a decent, safe, sanitary 

place to live, it is more likely that I will have an opportunity to 

be employed. 

I saw that statement, and we have talked about writing to that 

member of the city council in New Orleans because what he was 

saying was promoting another kind of segregation against people 

with disabilities as well. 

Chairman NEY. Somebody also—I watched that program and 

somebody also from the housing authority, I believe—I don’t want 

to misstate here—made the same comment, or somebody involved. 

It was a lady who came on. I didn’t write down the names, but I 

saw it. 

Mr. PERRY. I believe it was a Ms. Moon from the housing authority who is the HUD receiver in charge of the housing authority. It 

had significant trouble in recent years so it had gone into HUD receivership. 

One thing I would add to Shanna’s comments, it was a council 

member named Oliver Thomas who made the point about employment, that it kind of provides this litmus test for who can and who 

cannot return to New Orleans public housing. About 95 percent of 

residents of public housing in New Orleans are African American. 

And so when there are efforts to limit who can return or how many 

people can return, it substantially has an effect on African American residents of public housing. And that is probably one of the 

significant ways the Fair Housing Act is invoked, in that regardless 

of what its intent is, it has a disparate affect on African American 

residents of public housing there. 

Mr. RICH. I would just add the housing authority in New Orleans, still most of the public housing is not open. And there is a 

great uncertainty about what is going to happen to the public housVerDate 0ct 09 2002 13:14 Oct 23, 2006 Jkt 028100 PO 00000 Frm 00035 Fmt 6633 Sfmt 6633 F:\DOCS\28100.TXT HFIN PsN: TERRIE
30

ing. There is a need for HUD, that is the receiver on this, to make 

clear what the plans are and get that housing open for the residents who have been displaced 6 months now. 

Chairman NEY. Just from the observation of what I saw on the 

show, it wasn’t a potential discriminatory statement of race, it was 

a questionable statement about potential discrimination on economics of people, of whether you are working or you aren’t. This 

is what people then called into our office and said. This is some of 

the observations. 

And also you have got local, which might have the intent you 

have to be employed to come back into public housing, but you also 

have Federal law of where this stands, and can local law be passed 

on these issues. I just think it does not get into disagreeing or 

agreeing with the statements; I just think you are seeing the tip 

of the iceberg, especially in New Orleans, about decisions being 

made or what people want to do. I just think you are seeing the 

tip of the iceberg. As places are rebuilt and people come back in, 

you are going to see a lot more debate, controversy, and also a look 

at whether this is discrimination or not. 

I just think you are seeing, in my opinion, the very beginning of 

huge debates that will happen. 

I wanted to follow up, I think, Mr. Perry, on your comment about 

maybe having to amend the statute, and it would deal with maybe 

the Federal Communications Commission. But I was talking to my 

ranking member from California; we might be able to do some type 

of amendment and it might have jurisdiction of Judiciary at the 

end of the day to deal with it because I would assume fair housing 

would automatically apply to the Internet. It is still fair housing 

laws. Any further comment on that? 

Mr. PERRY. Well, I would assume as well that it would automatically apply. I will take a second and read to you the specific language from the Fair Housing Act. It says: ‘‘It shall be unlawful to 

make, print, or publish or cause to be made, printed, or published 

any notice, statement, or advertisement with respect to sale or 

rental of a dwelling that indicates any preference, limitation, or 

discrimination based on the protected classes.’’ 

So there is no doubt that this is the publishing of discriminatory 

advertising. So in our minds it is very clear that the Fair Housing 

Act applies to Web site providers. And so it not really, I guess, an 

issue of whether or not the act applies but it is just that some of 

these Web sites have tried to say well, even though it would apply, 

this Communications Decency Act gives us some immunity or may 

give us some immunity. 

The Communications Decency Act particularly applies to defamation and to obscene statements. And so the problem that they are 

making is that they are saying that discriminatory statements are 

equal to obscene or defamatory statements. But there is a very important difference between the two. They are very simply not the 

same. To say that I won’t rent to you because you are African 

American or you are white, is discrimination as opposed to making 

an obscene statement about someone. I will refrain from giving an 

example of an obscene statement. 

31

I don’t think that it is a great argument but, unfortunately, it 

is an argument that has been used. And we want to make sure the 

Fair Housing Act has the staying power that it deserves. 

Ms. SMITH. Mr. Chairman, it would be interesting if the Justice 

Department would weigh in with HUD on this particular issue just 

because our Assistant Secretary supports it doesn’t mean that if it 

goes through the HUD administrative process and ends up in Federal court, we will need the assistance of the U.S. Department of 

Justice. 

Chairman NEY. I am sorry. Has Justice weighed in on this previously? 

Ms. SMITH. No. 

Mr. PERRY. But they have brought at least one case that was settled in 2003 against a group called sublet.com. So even though they 

haven’t given official guidance, they have brought cases. 

Chairman NEY. You think Congress should contact Justice to ask 

them to weigh in? 

Ms. SMITH. I think it is important. 

Ms. MURGUIA. In my longer testimony I cite a case in New Jersey where city officials targeted Latinos and used selective enforcement of building codes to push Latinos out of their city-used Internet chat groups to identify Latino addresses. While that case was 

settled with DOJ because a city official was caught soliciting addresses online, it shows related ways that the Internet can be used 

to discriminate, whether it is an ad or people are using it to solicit 

information that would result in discrimination. 

I think there are a lot of issues where I think it is not clear exactly whether that falls directly under the statute, but we ought to 

get Justice to weigh in and give us their opinion. 

Chairman NEY. That is a good point. 

The gentlelady from California. 

Ms. WATERS. Well, first of all let me thank the panel for being 

here and let me thank those who were involved in our hearing for 

following up and forcing us to even really focus a lot deeper on 

these issues that you are bringing to us. And one of the good things 

that we have on this committee is a chairman whom I work with 

very closely; and already, as we are sitting here listening to you, 

we are describing to each other how we think we can do a number 

of things relative to enforcement, new legislation, and, as you are 

alluding to now, getting the Justice Department involved in some 

of these issues. 

I did have a few questions that I wanted to ask and I have got 

to think a little bit deeper about some of the testimony that has 

gone on here today. You heard me when I attempted to engage in 

some discussion with the representative from HUD about CDBG, 

and I am worried that low- and moderate-income people are not 

going to be taken care of properly unless we pay more attention to 

what we authorized and what is being done or what is intended 

with these CDBG funds. 

Would you restate for me—because I just had a little side conversation with Mr. Clinton—please restate for me what you said 

about what you understood about what was happening in Mississippi with CDBG plans. 

32

Mr. RICH. The CDBG supplemental language said that 50 percent of the CDBG should go to the benefit of low- and moderateincome people. There was a provision that this could be waived by 

HUD for compelling reasons not defined. Since then, the Governor 

of Mississippi has gone forward and proposed a plan that isn’t finalized which, first, leaves out any renters. The plan for CDBG is 

focused primarily, if not wholly, on homeowners who were in flood 

areas that were not Federal floodplains; which is a great need, 

there is no doubt about that. 

But what is left out, and which is quite disturbing, is that it only 

covers those homeowners who are insured, have insurance. 

Ms. WATERS. This is what I wanted you to repeat. 

Mr. RICH. I think Derrick Johnson can follow up on this. But if 

you are not insured and even though your house was flooded, my 

understanding of the Governor’s proposal at this point is that you 

are not eligible for the grants under the CDBG plan. This is obviously a big impact on low-income people. And I know that Derrick—and he should really answer now—has been working on that 

issue in Mississippi. So let me turn it to him. 

Ms. WATERS. Please. 

Mr. JOHNSON. The Governor’s plan is in effect a retroactive flood 

insurance plan. It would provide insurance coverage using CDBG 

funds up to $150,000 for individuals who lived outside of the floodplain, had regular insurance but didn’t have flood insurance. If you 

did not have regular insurance, you would not be covered. If you 

did not own your home, you could not be covered. If you did not 

occupy the home you owned, you could not be covered. 

So in effect, it would eliminate individuals who were on fixed incomes, who owned their home but couldn’t afford insurance. We are 

finding that the category of individuals more often are senior citizens who have owned their home for a number of years but are on 

Social Security. We had a gentleman, 84 years old; he owned his 

home for over 40 years and received just over $600 a month in Social Security benefits. He hasn’t had insurance in over 20 years. He 

cannot afford it. He is not covered. 

You have individuals who are home renters. Because the supplemental appropriation took out the requirement for one-to-one replacement on home rental units, there is no requirement to replace 

affordable rental units, so that whole population is taken out. 

Under the proposed plan by the Governor, you must build to the 

international building code standards but that would inflate the 

price, so even the homeowners who owned, say, a $60,000 house, 

they could only get the fair market value of the house pre-Katrina. 

They get $60,000, but to build to the new codes it may cost 

$80,000. That is an additional hardship for low-income homeowners. 

Another hardship for individuals is in the disability communities 

that would have to build to the new building standard, but they 

also have to have their homes fit for whatever type of ramping 

equipment. There is no provision in the funds to provide anything 

for them. 

Out of the $5 billion that has been granted that Mississippi will 

receive, $4 billion will be used for this program to cover 35,000 

households. 

33

Ms. WATERS. Yes. 

Mr. PERRY. We had the opportunity, Joseph Rich and myself 

were able to meet—we were able to meet with Secretary Jackson 

a few weeks ago and we raised that very issue. We talked about 

the Governor’s plan in Mississippi and we said, we are concerned 

that perhaps it may not meet the requirement that it assist 50 percent of people who are low to moderate income, at least 50 percent 

of the funding. 

What he indicated was that he intends to give wide discretion to 

Governors and to their plans. He also indicated that he felt the 

Governor’s plan was right on point and right on target. He felt it 

was an excellent plan, the plan in Mississippi. 

A point that I specifically raised with him was that I thought the 

plan didn’t do enough for renters, particularly for low-income renters. And he said well, you know, my issue is that—is that I don’t 

want to help landlords. I am not in the business of subsidizing 

landlords. 

So I proposed a few ways that I thought that he could assist 

renters and perhaps not end up subsidizing landlords. He said that 

he would consider them, but I guess my overall feeling from the 

meeting was that the way the plan is right now is the way that 

it is going to go forward. And I think, as a matter of fact, Joe 

raised the issue of what happens when they come up against this 

requirement; and what came out is that HUD has the ability to 

waive the requirement with compelling reason, and that because 

they tend to give folks wide discretion they may, in fact, waive the 

50 percent requirement if they have to, particularly since they 

think the Governor’s plan is a good plan. 

Ms. WATERS. Did we write into the authorization that the Governor could waive that 50 percent requirement? 

Mr. JOHNSON. In the authorization— 

Ms. WATERS. I would like our people to hear this. 

Mr. JOHNSON. The authorization gave the Secretary of HUD to, 

upon request from the Governors of the State, to waive the requirement. 

Ms. WATERS. The 50 percent requirement. 

Mr. JOHNSON. Prior to the 50 percent requirement there was a 

70 percent requirement. So the supplemental reduced it from 70 

percent low and moderate to 50 percent, and then gave the Secretary of HUD the discretion, upon request, to reduce it even further. 

Ms. WATERS. Wow. 

Mr. RICH. The final decision is with HUD though. 

Ms. WATERS. Has a request been made by the Governor in his 

plan? 

Mr. JOHNSON. The Governor has not submitted his plan. HUD 

just published in the Register the appropriations for each State last 

week. We are waiting for the Governor to first submit the waiver; 

from there, to actually submit his plan. He is coming under some 

pressures in the State, including the bill that we had filed that 

would allow the State legislators to have input in any CDBG funds. 

So it looks like he is becoming more flexible, but we are dealing 

with a Governor who typically appears to be flexible on one end, 

34

and end up doing exactly what he wants to do. We believe he is 

going to request a waiver, and if it is requested, it will be granted. 

Mr. RICH. I would just add one point to this. The standard for 

the waiver is compelling needs. It seems to me that should be a 

very high standard, because if this 50 percent is waived, low-income minority people are not going to be helped; and that raises 

this whole Fair Housing Act issue of affirmatively furthering fair 

housing in spending Federal funds. 

Ms. WATERS. Well, let me just say that that certainly was not my 

intent when I supported the CDBG authorization and so not only 

am I going to activate other members who certainly did not intend 

for that to be waived in any shape, form, or fashion, but I think 

that we also ought to look at some opportunities by which we fix 

that in law and basically amend the authorization in some way. So 

we will be taking a real, real fast-and-quick look at what we can 

do with that quickly because this is moving so fast. 

Let me suggest to those of you who worked so hard at all of this 

that you have raised some questions about several things that I 

think a coalition of advocates should consider. One is if FEMA has 

been recommending sites on the Internet that are having discriminatory messages on it, we should think about a lawsuit against 

FEMA. We should think about— 

Mr. RICH. One of the complaints that was filed with HUD 

through the Greater New Orleans group was a Web site that 

FEMA was associated with, and the notice did go to FEMA. FEMA 

has claimed that they are taking steps to protect against that type 

of advertising, but they also are claiming they are immune from 

this kind of lawsuit. 

Ms. WATERS. That is okay. They can claim that they are immune, and they may be, I don’t know. But I think that the advocates can certainly look at it and see. 

The other thing is, even on the Governor’s plans—and I am going 

to work as quickly and as hard as I possibly can to deal with that—

it seems to me if it looks as if Mr. Jackson, who will be coming before us pretty soon, I hope, is going to allow these waivers, that we 

need to think about filing injunctions against the implementation 

of those plans to frustrate their ability to move forward in the way 

they want, while we are working up here to try and fix it. 

So I would just like for you to think about some additional ways 

by which we can be working to make sure that they don’t easily 

disregard low- to moderate-income renters in moving forward with 

those plans. We may not have the ability to stop Mr. Jackson from 

offering waivers. We don’t know that he is going to do it. But based 

on the conversation you are sharing with me, it sounds as if he is 

poised to do that, and it may be that there is some explicit language in the authorization, I don’t know, that says that he can do 

that. But I think it would be worthwhile to talk about filing injunctions if they move very quickly to do things while we are trying to 

get this done. 

Mr. JOHNSON. We believe under the Fair Housing Act it is de 

facto discrimination because it would adversely affect African 

Americans and Latinos at a disproportionate rate to other Mississippians. 

35

The other part of this is that even if the plan goes through, you 

have the banking industry that will probably take advantage of 

low-income homeowners because the checks will be made out both 

to the homeowner and the bank. And we are also trying to get a 

consumer counseling process so homeowners understand their 

rights, once that check is written, that they don’t have to turn over 

all the proceeds to the bank to cover the mortgage; they can use 

the money to rebuild their home and maintain the mortgage relationship they have with the bank. So that is another outcome that 

we are concerned with, with the high land speculation that is taking place on the Mississippi Gulf Coast right now. 

Ms. WATERS. So we will be in touch with you to help us refine 

the language that we may use to try and see if we can’t move 

something through here that would correct that. I don’t know that 

we can, but I am certainly willing to try. And thank you very much 

Chairman NEY. Thank you. The gentleman from Texas. 

Mr. GREEN. Thank you again, Mr. Chairman, and Madam Ranking Member. I would like to also thank each member of this panel. 

You truly have enlightened us greatly today. And I compliment you 

because you represent an underserved constituency. Here in Congress it seems that the well-off, the well-to-do, the well-heeled, they 

do well in terms of receiving representation. It is the least, the last, 

and the lost that we find are underrepresented. And I thank you 

for what you do to help those who but for you might not receive 

help at all because of the information that you bring to us. 

Let me go back to the comment that was made by Mr. Johnson, 

I believe, about the fixed income homeowners who do not have insurance, not benefiting from the $4 billion. Is that a correct statement, Mr. Johnson? 

Mr. JOHNSON. That is a correct statement. Under the Governor’s 

plan, he only expects provision for the CDBG funds for home ownership. And those plans were based on the belief that the mission 

was going to receive $4 billion in CDBG funds. Now that we know 

we are going to receive $5 billion in CDBG funds, I understand 

there is an ongoing discussion about some of the utility companies 

being able to use those funds to recoup losses. And that would be 

a way to benefit low- and moderate-income individuals because 

they would not have to increase rates. 

So as of today, I have yet to hear of any proposals by the Governor to provide any support for low-, or moderate-income individuals, specifically individuals who are homeowners without insurance. 

Mr. GREEN. Just to comment, I remember, if my memory serves 

me correctly, that with 9/11, when we did the right thing and gave 

families millions of dollars, I just don’t recall us having this type 

of means test that would ultimately lead to only those who have 

been receiving. I am hopeful that our ranking member and the 

chairman will help us to find a means by which this can be addressed. 

I support them and will do what I can to assist you in this effort 

as well. 

I want to talk a bit about the testing, because my belief is that 

we don’t do enough testing. Testing appears to be the only empirical data that we can use to validate that discrimination exists. 

36

And it seems to me that we have just enough for us to continue 

saying there is something wrong but not enough so that we can say 

without question, reservation, hesitation, or equivocation that we 

need to go to a next level with this whole testing process. 

Tell me first, how difficult is it to get the grants to do the testing? 

Ms. SMITH. Well, they are competitive grants through the Fair 

Housing Initiatives Program. Currently, it is the first time that 

HUD’s Office of Fair Housing is allowing some of the fair housing 

groups to get a 3-year grant rather than having to apply every year 

and wonder if you have the money. 

The grants are not necessarily used to just do the independent 

testing that we do. It is really used in response to complaints that 

come into your office. 

So you have these fair housing groups that maybe have three, 

possibly four staff people, who are responding to rental, sales, lending, insurance, racial and sexual harassment complaints in their 

community, and then still trying to get a handle on what is the nature and extent in your area? 

In places like the D.C. area, the fair housing group has been 

around a long time. So linguistic testing doesn’t show much. You 

actually have to go and apply for an apartment because they have 

learned not to turn you down over the phone or to actually often 

lie to you about availability. It has to go through the application 

process. That is more complex testing. That is just in the rental 

area. 

If you deal with home sales, many real estate agents who do the 

right thing do show people a lot of neighborhoods to look at. Those 

who don’t follow the law will simply just steer you to homes in the 

neighborhood where your race predominates. And most of us, if we 

are out in the housing market, trust our real estate agent to show 

us properties that are within our price range. 

In the lending arena, it is much more difficult. To do testing, you 

actually have to have a person’s true identity and fill out an application. But on the lending application, it says, if you provide any 

false information that that is a felony. So we have actually only 

done one full lending application ever in the country and that was 

in Lima, Ohio, and we had real people do that. 

With homeowner’s insurance we have been testing them, and we 

have made some changes with those companies so that people can 

get the best coverage. But now with homeowner’s insurance credit 

scoring is an issue. So there is a way to reject people. So some of 

that my colleague was talking about in Mississippi, if you are a 

senior and you don’t have a good credit score, you may simply be 

turned down for homeowner’s insurance, not that they didn’t want 

to buy it but they weren’t even eligible because of their credit score. 

Mr. GREEN. Quickly permit me to ask this. When you have a 

clear-cut case of discrimination as a result of your testing, what is 

the next step? What happens after that? 

Ms. SMITH. Most fair housing groups will file a complaint starting with their State or local agency or HUD. If that process is moving swiftly, they will continue in that process. If it is not, then 

many of us just file directly in the Federal District Court. 

37

We often use the HUD administrative process first because when 

you have clear-cut strong testing, if you can get the parties to the 

table and they see and you share some of your evidence with them, 

good lawyers on the other side will say they caught you, you need 

to settle. 

Most cases that go to trial are those where either the testing is 

strong but the defense says I think I can beat this, or it is a disparate impact situation where we are showing that people with disabilities or people with color are harmed more than whites are in 

that particular situation. 

Mr. GREEN. With respect to the testing and lending, do you have 

some language that we might borrow that might advise us and 

help us to hopefully eliminate this loophole that seems to exist? 

Ms. SMITH. Yes. We actually brought this up in the early 1990’s 

when we were doing a lot of lending testing, and it would simply 

be because the tester is not trying to defraud the lender. We are 

just trying to see what terms and conditions a loan will be made 

on. And if there were language there saying something about testers are excluded from this felony part because we are not trying 

to defraud the bank of money, that would open up the floodgates 

for us to do a lot of lending testing throughout the United States. 

Mr. GREEN. I would welcome the opportunity to review the language and if you could pass it on to our office I would appreciate 

it. 

Mr. Perry. 

Mr. PERRY. Representative Green, you know, this is something 

that Shanna made me realize a few years back with the funding 

program. You know, there is funding for what is commonly referred 

to as FHIP, Fair Housing Initiative Program, which funds agencies 

like mine. And then there is the FHAP program, Fair Housing Assistance Program, which assists State and local agencies that enforce fair housing law. 

The reason why I want to give you the difference between the 

two is that the State organizations do not do testing, while the programs that get Fair Housing Initiative Program funding do the 

testing. And so the very evidence that is necessary in order to enforce the fair housing law only comes forth through the work of the 

private nonprofits who get the Fair Housing Initiative Program 

funding. 

My point is that when HUD funding levels come to you and you 

are looking at the HUD fair housing programs, it is important to 

make sure that the FHIP program gets significant funding, and 

perhaps even more funding than the fair housing, than the FHAP 

program. And the reason is that if you are going to have any success in any of the other programs, it is all dependent upon whether 

or not there is enough money for the FHIP nonprofits to do adequate testing and to actually run their programs. 

One last thing that I would say about that is that these are private nonprofits, often very small. My organization only has—well, 

before the storm we had four staff members. Right now we have 

two because we lost folks as a result of the storm. 

Any point in time that an organization isn’t funded through this 

HUD program, through this Fair Housing Initiative Program, it 

could cause the very end of that program. As a matter of fact, there 

38

is a coworker of mine in Texas right now who has had some difficulties with funding through the program, and it has caused great 

problems for him to keep the organization operable. 

And so one issue is that there has to be consistent funding. And 

is has put forth a new effort to make sure that groups can get 3-

year funding. But we want to make sure that is a consistent thing 

that groups are able to ensure that they are always going to be 

there to fight housing discrimination and to do the testing that is 

required in order for HUD or for the other State and local agencies 

to enforce fair housing law. 

Ms. SMITH. If I might add, they are only getting about $250,000 

a year. So imagine that for the City of New York or the City of 

Houston. You have to pay rent, you have to pay salary, you have 

to pay benefits, you have to pay for your testing program. It is so 

miniscule. This is why we are not making a dent in housing segregation and discrimination in America because we haven’t had the 

financial commitment from the Federal Government to fund true 

education and enforcement nationally. 

Mr. GREEN. In that last appropriations package I think we had 

some $45-, $46 million in fair housing. What portion of that went 

to the Fair Housing Initiative Program as opposed to the Fair 

Housing Assistance Program, if you know? 

Ms. SMITH. About $20 million. And about $11- or $12 million of 

that went to just enforcement. But you have to understand under 

the education that money opens up to anybody, a university can get 

it, a community group can get it. People with literally no fair housing enforcement experience get education money. 

So in the past when the program was created in 1988, Congress 

and the White House said, we are going to give these fair housing 

groups both education and enforcement money so that they can 

educate the community about the problem, they can enforce it, and 

then they can reduce the amount of discrimination. 

Now, the money has been just spread out so thin that an enforcement agency—these fair housing groups apply for the enforcement 

money. They may ask their city for some education money. But it 

is just not being utilized in the most efficient way that it could be. 

And if we went back to the way the program was set up as a 

pilot program—actually it was President Reagan who pushed the 

program through, and Congress who supported it. If we went back 

to the way it was originally established, I think you would be able 

to see measurable results in desegregation and fair housing enforcement in the United States. 

Mr. GREEN. I have one more question and the chairman has been 

more than generous with his time. But I do want to ask about the 

impact that these—that knowledge of testing has on discrimination. 

Have you found that there is some deterrence if it is widely 

known, if it is pervasive, that people are testing and that you can 

be caught? 

Ms. SMITH. Yes. In the cities where there are always ongoing 

testing programs, like here in the D.C. area, you see the rate of discrimination lower. In D.C., they are finding maybe about a 40 percent rate of discrimination when they do their audits, which means 

39

they just send testers out. In other parts of the country, that rate 

of discrimination is usually 75 percent. 

So when you have a strong education and enforcement component in a community, you see a reduction in blatant discrimination. 

Now, it means that we have to pierce further into the system to 

find out if it is continuing in the application process, but we have 

seen reductions. 

Mr. GREEN. How—can you tell me how we can say to people that 

eliminating this kind of discrimination saves money? Can you 

make that connection for me? 

Ms. SMITH. Oh, yes, yes. If you look at what segregation does to 

a city and what it does to city services, education, and employment 

opportunities, you can see how much we have lost. 

It is like when we were talking about the public housing. Yes, 

you should have working people in public housing. You should have 

racial and economic integration in a community. We look at the 

education system, and if you see the white flight from the 1940’s, 

1950’s, and 1960’s, you can look at the core cities, and then you 

saw middle class black flight from communities as well, because 

real estate agents were not marketing those communities and they 

were preying upon people’s fear of integration to push property values down, which then reduces the tax base, which reduces the 

money for education, which reduces money for city services, and 

anybody who can afford to tends to move. 

If we had enforcement, if we had the lenders who were redlining 

back then, and the insurance companies who were redlining, if we 

could curtail that activity we would see people moving back into 

cities, not in a gentrifying way but more in a way where you have 

racial and economic integration and people wanting to live with 

each other because it is a good thing to do, not fear of crime, not 

fear of poor educational systems that are available. 

We have wasted so much money. And if you look at the check 

cashing companies that opened up, if the lenders were in that community, there are billions of dollars in the low- and moderate-income communities that are being exploited by title companies, the 

car title things that they have in Florida and the check cashing 

companies. There is such a change we could make in this country 

if we would put money into fair housing. You wouldn’t have to be 

so concerned about voter education, voting rights, or school desegregation because you would have integrated communities, and people would be electing you or going to that school or liking you 

based on your character, not your race. 

Mr. GREEN. Thank you very much. I appreciate your comments. 

And thank you, Mr. Chairman. 

Chairman NEY. Thank you. The gentlelady from California, Ms. 

Lee. 

Ms. LEE. Thank you, Mr. Chairman. Thank you all again for 

being here. I am sorry I didn’t hear your testimony, but I have had 

a chance to look over it and I want to thank you very much again 

for being very clear and succinct and giving us specific recommendations on what we need to do. 

I wanted to ask you a couple of things with regard to the Assistant Secretary’s response just in terms of how you see what is taking place in the region. 

40

We heard from Mr. Campbell, whose question with regard to approximately 100 complaints had just about been filed given the 

numbers of individuals who have been displaced, how do you—how 

do we reconcile just 100 complaints at this point given your testimony and what we learned when we were in the region? 

Mr. PERRY. Well, I think there are a few things. The first is really about the way that people perceive discrimination in that sometimes a person can be discriminated against and have no idea that 

they have been a victim of discrimination. 

In 2003, I opened a fair housing center on the Gulf Coast of Mississippi, and when we first opened we did an investigation of housing discrimination there. And we sent a tester to—an African 

American tester to an apartment complex on the Gulf Coast. And 

he was told that the rent was going to be $600 a month. And the 

person there was extremely nice to him, and so he thought there 

was a great opportunity. He came back and gave me personally his 

report, and I frankly, and he also thought there was no discrimination at that complex. 

We sent our white tester about 20 minutes later, went to the 

same apartment complex and our white tester was told that the 

rent was $400 a month, significantly less than the African American tester had been told. And once again the landlord was very, 

very nice and very, very accommodating. 

And so, what is interesting there is that about 5 days later the 

tester came back to me and said, hey, you know I am actually looking for housing myself and I really liked that apartment on the 

Gulf Coast, and I want to know since we are done with testing can 

I go back and rent that very apartment. And we usually don’t tell 

our testers the result of the process. We don’t tell them whether 

or not they have been a victim of discrimination. But I had to tell 

him. I had to tell him that, hey, this woman offered you this apartment at $600 a month and it is the exact same apartment that 20 

minutes later she offered to the white tester that you met a few 

days ago who is no different from you but for the fact he is white 

and it is going to be $200 more for you than it was for this person. 

Very blatant, very straightforward discrimination. 

My point is that he would not have known if he were not a tester, and it really goes to and speaks to the importance of the testing 

program, the importance of the work that we do. If we can’t test 

these cases, a lot of times we don’t know if there has been discrimination. Usually it is really a feeling or a hunch that a person has. 

I will give you one more example like that, and it is not particular to the Gulf Coast but I think it really makes a point. A 

friend of ours whose husband was looking for housing and she was 

looking for housing, they were getting a divorce and they had a son 

who was bilingual. And this is here in D.C. The husband was Hispanic. The mother was white. And she calls an apartment complex 

here in D.C., and finds out that there is an apartment available for 

rent, several apartments as a matter of fact. And so, she says, well, 

these apartments are too big for me and more than I want to pay 

but it would be great for my husband. She refers them to her husband. He calls. He has a Latino accent. And right away they say 

nothing is available. 

41

And so he calls his wife, about to be ex-wife, and said why do 

you put me through all this stuff, I know we are getting divorced 

but you know you don’t have to waste my time and have me looking at thee apartments. And she says, no, I just called and they 

said this apartment was absolutely available. 

So she calls back again and she finds out well, wait, they tell her 

again that the units are available. So she suspects obviously that 

discrimination has happened. She contacts the National Fair Housing Alliance. Within a few days they are at the table with a leading 

civil rights attorney and they are settling the case. And it is only 

because they both called and they were able to compare what happened that they were able to determine that there was housing discrimination. 

And so that is an important anecdote that comes up, is that it 

is only when you are able to compare what happens, are you able 

to determine that it is housing discrimination. 

So I think a lot of times people in the Gulf Coast and elsewhere 

go out and look for housing, and they have that feeling that something funny is going on, but the only way to prove it is with support from agencies like ours. And so I think that that is what happens and that speaks a lot of times to that 100 complaint number, 

is that people frankly don’t know many times they have been victims of discrimination. 

Ms. LEE. And then that begs the question in terms of just the 

trauma and the confusion and all of the stuff that comes with being 

displaced and being lied to and being jerked around. You add that 

to not knowing, and then HUD, I mean, with 30 people in the region, I just can’t imagine how people are being informed and being 

educated and being taught about their rights at this point. 

And I would hope—and you heard again what the Assistant Secretary said, 30 people in the region. She thought that the budget 

was adequate and that this was enough. I can’t imagine that given 

the population of people that have gone through this that 100 complaints reflects, that 30 people are going to be able to service and 

look out for the rights of those people who have been displaced. 

How do you see that 30, the staff there, and their role in their 

job? 

Mr. PERRY. I have been privileged to meet with the Assistant 

Secretary a few times since she has taken office, and I would submit a few things, that, you know, she inherited an office that was 

perhaps very different than the vision that she has for the office 

and she has only been in her position for 4 months at this point. 

And so I don’t offer that as a defense or as an explanation, but I 

think that that contributes to the response. 

But I have been able to talk to her, for instance, about stationing 

folks on the Gulf Coast, and one concern I had was that they are 

only coming for about 2 weeks at a time. But since then, for instance, she listened to my concern and there are some folks who 

are staying for as many as 60 days on the Gulf Coast to work on 

issues. And I have been able to work very closely with them. 

I think that what is key to going forward on the Gulf Coast is 

not really the placement of HUD staff frankly. I think that what 

is key is supporting the groups that are already there, the fair 

housing and civil rights advocacy groups that are already there. 

42

And the issue is this. When a HUD staff person comes in from out 

of state and they have to learn the entire terrain of the Gulf Coast 

in a matter of only, in a very short period of time, it is very difficult for them to learn everything they need to learn and then aggressively investigate housing discrimination issues, and so it may 

be better served to give more support to the local agencies. 

Now that said, HUD has given some support or allocated some 

support in the way of, I think, a program called the PIF program, 

and so we have been allocated some of that funding. We haven’t 

received the funding yet. We are still awaiting it. But there are 

some other efforts there. But I would agree that there needs to be 

more. 

And to the extent that there can be more funding, you know, one 

basic issue that I talked about with the Assistant Secretary is that 

one of the limitations is the amount of funding that is available. 

You know, I think she commented, and I hope I don’t misquote her, 

that for some of the other HUD programs, there was emergency 

money in order to send people down to the coast to do work. But 

when it came to the Fair Housing Initiatives Program or the Fair 

Housing Education Outreach Program, there wasn’t this extra 

money. It had to come specifically out of the existing budget. And 

so there wasn’t additional money in order to put a great number 

of staff down there. So I think there has to be more funding for 

that. 

Ms. MURGUIA. If I can just add, your question is extremely on 

point especially when you think about the number of staff they 

have down there, but also the diversity of the population. Of course 

we need to make sure the African American population needs are 

met. But as you heard in the various testimony there are Latino 

communities and Asian American communities who have been 

there for several years, and some who are now coming to the region, and there is a wide mix of needs because of that. 

And we have determined, and I have shown, where you know 

language and cultural competency is really important in those 

staff, that they be prepared to deal with the diversity of the community and those needs. And quite frankly we don’t have any 

knowledge to know that those folks are really qualified to work 

with that diversity of the community. And we do know that perhaps those in the Latino community, as you have heard it said before, are often intimidated or otherwise discouraged to file anyway. 

And so when you add language and social competency issues from 

those who are down there, it creates another layer. 

And again many Latinos and other members of communities of 

color are also unaware of their rights or unaware that they have 

been discriminated against. So you wonder if the staffing down 

there is not only adequate but is really qualified to serve the diversity of the communities that are down there. 

Ms. SMITH. We also have to look at the fact that there is only 

one fair housing center in the State of Louisiana. There is only one 

in Mississippi. There is only one in Tennessee. There is nothing in 

South Carolina. There is one in North Carolina, one in Virginia, 

zero in Arkansas. 

It goes like that across the United States—Ohio, California, Wisconsin, and the Chicago area have most of the fair housing centers 

43

in the United States. There is nothing in Dallas. And how many 

evacuees are in Dallas? There is no private fair housing center in 

Dallas. The Houston office has two-and-a-half people, and most of 

the evacuees ended up in Houston. 

So unless we can get additional fair housing money for those 

groups, we are not going to make any progress. You know, if HUD 

takes the $11- or $13 million that is set aside for the whole country 

for enforcement and retargets some of that just for the Gulf Coast, 

what have you done to the 64,000 evacuees in the fair housing people in Georgia? You can’t take this little pool of money and stretch 

it any thinner. We need more money for enforcement. 

Mr. JOHNSON. Part of the problem in Mississippi—is the only 

place I can speak for—we don’t have a Fair Housing Act. Many 

people don’t understand what their rights are. The HUD Fair 

Housing Office has been vacant for a few months now, I think 

about 9 months. The HUD fair housing individuals who come 

down, they rotate every 2, 3 weeks in. They make the key contact 

calls to say, are there any problems? And then they leave. 

So you cannot sustain any type of ongoing education program, 

you cannot really do any real testing, and you don’t have any real 

thrust to get at the problem. And you compound that with Katrina, 

you have a big problem. 

Ms. LEE. Thank you and thank you for your response. Mr. Chairman, I hope as we look at this budget moving forward, given the 

fact that the President’s budget is a million less than last year, we 

need to figure out a strategy in light of Katrina and Rita to bump 

this up, not only restore these cuts but we need to have a specific 

increase for fair housing investigation, complaints, and process in 

terms of compliance with our nondiscrimination laws. 

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

Chairman NEY. I want to thank all the members for the hearing 

today and the panelists for your important presentations. 

I note that some members may have additional questions for this 

panel which they may want to submit in writing. Without objection, the hearing record will remain open for 30 days for members 

to submit written questions, and the witnesses to place their responses in the record. 

Again, thank you for your time on a very important issue. We 

will follow back up with a potential look at some of the amendments. 

Yes, Mr. Perry. 

Mr. PERRY. I forget to ask to submit into the record a copy of 

some of the advertising that we found on Internet Web sites and 

I submitted that at the previous hearing, but I just want to get it 

into the record at this hearing as well. 

Chairman NEY. Without objection. I think we also have copies. 

Without objection. 

Thank you very much for the hearing. 

[Whereupon, at 1:30 p.m., the subcommittee was adjourned.] 

(45)

A P P E N D I X

February 28, 2006

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