U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Printing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001

44–188 PDF 2008

H.R. 5772, THE FRANK MELVILLE SUPPORTIVE 

HOUSING INVESTMENT ACT OF 2008 

HEARING 

BEFORE THE

SUBCOMMITTEE ON 

HOUSING AND COMMUNITY OPPORTUNITY 

OF THE

COMMITTEE ON FINANCIAL SERVICES 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED TENTH CONGRESS 

SECOND SESSION 

JUNE 20, 2008 

Printed for the use of the Committee on Financial Services 

Serial No. 110–123 

( 

(II) 

HOUSE COMMITTEE ON FINANCIAL SERVICES 

BARNEY FRANK, Massachusetts, Chairman 

PAUL E. KANJORSKI, Pennsylvania 

MAXINE WATERS, California 

CAROLYN B. MALONEY, New York 

LUIS V. GUTIERREZ, Illinois 

NYDIA M. VELA ́ ZQUEZ, New York 

MELVIN L. WATT, North Carolina 

GARY L. ACKERMAN, New York 

BRAD SHERMAN, California 

GREGORY W. MEEKS, New York 

DENNIS MOORE, Kansas 

MICHAEL E. CAPUANO, Massachusetts 

RUBE ́ N HINOJOSA, Texas 

WM. LACY CLAY, Missouri 

CAROLYN MCCARTHY, New York 

JOE BACA, California 

STEPHEN F. LYNCH, Massachusetts 

BRAD MILLER, North Carolina 

DAVID SCOTT, Georgia 

AL GREEN, Texas 

EMANUEL CLEAVER, Missouri 

MELISSA L. BEAN, Illinois 

GWEN MOORE, Wisconsin, 

LINCOLN DAVIS, Tennessee 

PAUL W. HODES, New Hampshire 

KEITH ELLISON, Minnesota 

RON KLEIN, Florida 

TIM MAHONEY, Florida 

CHARLES A. WILSON, Ohio 

ED PERLMUTTER, Colorado 

CHRISTOPHER S. MURPHY, Connecticut 

JOE DONNELLY, Indiana 

ROBERT WEXLER, Florida 

JIM MARSHALL, Georgia 

DAN BOREN, Oklahoma 

BILL FOSTER, Illinois 

ANDRE ́ CARSON, Indiana 

SPENCER BACHUS, Alabama 

DEBORAH PRYCE, Ohio 

MICHAEL N. CASTLE, Delaware 

PETER T. KING, New York 

EDWARD R. ROYCE, California 

FRANK D. LUCAS, Oklahoma 

RON PAUL, Texas 

STEVEN C. LATOURETTE, Ohio 

DONALD A. MANZULLO, Illinois 

WALTER B. JONES, JR., North Carolina 

JUDY BIGGERT, Illinois 

CHRISTOPHER SHAYS, Connecticut 

GARY G. MILLER, California 

SHELLEY MOORE CAPITO, West Virginia 

TOM FEENEY, Florida 

JEB HENSARLING, Texas 

SCOTT GARRETT, New Jersey 

GINNY BROWN-WAITE, Florida 

J. GRESHAM BARRETT, South Carolina 

JIM GERLACH, Pennsylvania 

STEVAN PEARCE, New Mexico 

RANDY NEUGEBAUER, Texas 

TOM PRICE, Georgia 

GEOFF DAVIS, Kentucky 

PATRICK T. MCHENRY, North Carolina 

JOHN CAMPBELL, California 

ADAM PUTNAM, Florida 

MICHELE BACHMANN, Minnesota 

PETER J. ROSKAM, Illinois 

THADDEUS G. McCOTTER, Michigan 

KEVIN McCARTHY, California 

DEAN HELLER, Nevada 

JEANNE M. ROSLANOWICK, Staff Director and Chief Counsel 

(III) 

SUBCOMMITTEE ON HOUSING AND COMMUNITY OPPORTUNITY

MAXINE WATERS, California, Chairwoman 

NYDIA M. VELA ́ ZQUEZ, New York 

STEPHEN F. LYNCH, Massachusetts 

EMANUEL CLEAVER, Missouri 

AL GREEN, Texas 

WM. LACY CLAY, Missouri 

CAROLYN B. MALONEY, New York 

GWEN MOORE, Wisconsin, 

KEITH ELLISON, Minnesota 

CHARLES A. WILSON, Ohio 

CHRISTOPHER S. MURPHY, Connecticut 

JOE DONNELLY, Indiana 

SHELLEY MOORE CAPITO, West Virginia 

STEVAN PEARCE, New Mexico 

PETER T. KING, New York 

JUDY BIGGERT, Illinois 

CHRISTOPHER SHAYS, Connecticut 

GARY G. MILLER, California 

SCOTT GARRETT, New Jersey 

RANDY NEUGEBAUER, Texas 

GEOFF DAVIS, Kentucky 

JOHN CAMPBELL, California 

THADDEUS G. McCOTTER, Michigan 

KEVIN McCARTHY, California 

(V) 

C O N T E N T S 

Page 

Hearing held on: 

June 20, 2008 .................................................................................................... 1 

Appendix: 

June 20, 2008 .................................................................................................... 25 

WITNESSES 

FRIDAY, JUNE 20, 2008 

Cohen, Ronald S., Ph.D., Chief Executive Officer, United Cerebral Palsy of 

Los Angeles, Ventura, and Santa Barbara Counties ........................................ 9 

O’Hara, Ann, Associate Director, The Technical Assistance Collaborative, on 

behalf of the Consortium for Citizens with Disabilities Housing Task Force . 10 

Paulauski, Tony, Executive Director, The Arc of Illinois ..................................... 13 

Randall, Diane, Executive Director, Partnership for Strong Communities ........ 7 

Shelburne, Mark H., Counsel & Policy Coordinator, North Carolina Housing 

Finance Agency .................................................................................................... 12 

APPENDIX 

Prepared statements: 

Cohen, Ronald S. .............................................................................................. 26 

O’Hara, Ann ...................................................................................................... 31 

Paulauski, Tony ................................................................................................ 37 

Randall, Diane .................................................................................................. 43 

Shelburne, Mark H. .......................................................................................... 45 

ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD

Waters, Hon. Maxine: 

Written statement of the American Network of Community Options and 

Resources (ANCOR) ...................................................................................... 49 

Written statement of John Garvin, U.S. Department of Housing and 

Urban Development ...................................................................................... 51 

Murphy, Hon. Christopher S.: 

Written statement of Mike Fitzpatrick, Executive Director, National Alliance on Mental Illness, in support of H.R. 5772 ........................................ 55 

(1) 

H.R. 5772, THE FRANK MELVILLE 

SUPPORTIVE HOUSING 

INVESTMENT ACT OF 2008 

Friday, June 20, 2008 

U.S. HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON HOUSING AND

COMMUNITY OPPORTUNITY, 

COMMITTEE ON FINANCIAL SERVICES, 

Washington, D.C. 

The subcommittee met, pursuant to notice, at 10 a.m., in room 

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

Members present: Representatives Waters, Cleaver, Green, Clay, 

Murphy; Capito and Biggert. 

Chairwoman WATERS. This hearing of the Subcommittee on 

Housing and Community Opportunity will come to order. 

Good morning, ladies and gentlemen. I would like to thank Ranking Member Capito, who just came in, and the members of the Subcommittee on Housing and Community Opportunity who will join 

me for today’s hearing on H.R. 5772, the Frank Melville Supportive 

Housing Investment Act of 2008. 

I am looking forward to hearing from the witnesses today because the Section 811 program is such a cornerstone of our Federal 

response to the needs of our Nation’s vulnerable disabled households. I also want to thank Mr. Murphy for his work in crafting 

H.R. 5772, which is designed to ensure that the Section 811 program maintains its vitality. 

Established as part of the Cranston-Gonzalez Affordable Housing 

Act of 1990, the Section 811 program is nearly identical to the 

older Section 202 program, which previously provided supportive 

rental housing for persons with disabilities. The Section 811 program is the only Department of Housing and Urban Development 

permanent supportive housing program exclusively serving persons 

with disabilities. 

The Section 811 program has three components: capital advances; project rental assistance; and tenant-based rental assistance. HUD provides no-interest capital advances to nonprofit sponsors to develop rental housing coupled with flexible, accessible, supportive services for persons with disabilities. A project sponsor does 

not have to repay the capital advance if the project serves very-lowincome persons with disabilities for at least 40 years. 

In connection with a capital advance, HUD provides projectbased assistance through the Project-Based Rental Assistant ConVerDate Aug 31 2005 15:40 Sep 10, 2008 Jkt 044188 PO 00000 Frm 00007 Fmt 6633 Sfmt 6633 K:\DOCS\44188.TXT TERRIE
2 

tract, or PRAC, which covers the difference between the HUD-approved operating cost and the amount residents pay in rent. 

The program also provides for tenant-based or mainstream 

vouchers which are available to families who are income-eligible 

and enable a person with disabilities to lease private rental housing. Although the tenant-based voucher program was authorized 

under the Housing and Community Development Act of 1992, it 

was not funded until Fiscal Year 1997, when it became a 25 percent set-aside within the annual Section 811 appropriation. 

The Section 811 program—grants, project rental assistance, and mainstream vouchers collectively—was funded at $237 million in 

funding year 2008, and the President requested $160 million for 

Fiscal Year 2009, a cut we are fighting during this appropriations 

process. 

I am pleased to support H.R. 5772 because the bill makes key 

improvements to this program. 

First, it addresses a long-standing problem in the mainstream 

tenant-based assistance program, namely, that for many years 

HUD had no way to track these vouchers. Many believe that, upon 

turnover, these vouchers were not redistributed to disabled persons. The bill would transfer these vouchers to the Section 8 Housing Choice Voucher program, with the requirement that HUD develop guidance to ensure that existing and future appropriated 

vouchers continue to serve eligible persons with disabilities. 

Second, as H.R. 2930, the Supportive Housing for the Elderly 

Act—which this subcommittee considered and the House passed 

last year—did for the 202 program, H.R. 5772 brings Section 811 

into the modern world of mixed housing finance. To date, program 

sponsors have been unable to take full advantage of such finance 

options due to internal program delays at HUD as well as what are 

often contradictory program requirements. 

Unfortunately, right now, HUD’s administration of the Section 

811 program imposes on potential sponsors all the inflexibility and 

bureaucracy that might conceivably be justified in a funding 

stream that pays the project’s full freight in a program that no 

longer does. H.R. 5772 wisely delegates grant processing in mixedfinance Section 811 projects to State housing finance agencies, 

which have the experience necessary to combine different financing 

streams and can more effectively process these grants and allow 

project sponsors to more efficiently bring new projects on line. 

Third, the bill ensures that the physical structure and services 

offered by a project don’t deteriorate over time due to inflation or 

escalating cost. H.R. 5772 requires the Secretary, upon renewal of 

a project-based rental assistance contract, to adjust the annual contract amount to provide for reasonable cost increases, including 

adequate reserves, supportive services, and services coordinators as 

well as for certain emergency situations. 

Finally, the bill authorizes an innovative project-based rental assistance demonstration program designed to leverage supportive 

services funding. HUD will award funds to State finance agencies 

to enter into contracts with project owners to provide project-based 

rental assistance for units for persons with disabilities. 

Eligible projects are new or existing projects which have received 

capital funds from other private or public funding sources and have 

3 

entered into agreement with the State or local agency responsible 

for health and human services to assist in outreach and to make 

available appropriate services for tenants. 

I think this has exciting potential, and I look forward to hearing 

what the witnesses think of it and other elements of the bill. 

I would now like to call on Ranking Member Capito for her statement. 

Mrs. CAPITO. Thank you, Madam Chairwoman, and I would like 

to thank the witnesses for this important hearing today. 

I have seen firsthand the good works that this program provides 

in my own district, and I am sure it is the same for Members 

across the Nation. My good friends, Representative Chris Murphy 

and Representative Judy Biggert, should be commended for their 

leadership in introducing this legislation. 

The Section 811 program allows persons with disabilities to live 

independently in the community by increasing the supply of affordable rental housing with the availability of supportive services. I 

have visited several facilities. 

As with the only Federal housing program solely dedicated to assisting very-low-income people with serious and long-term disabilities, Section 811 is considered to be of critical importance. In fact, 

Congress has maintained in previous years the same level funding 

of $237 million for Section 811. 

The Section 811 program does face some programmatic issues, 

and this legislation will restructure Section 811 in a way that provides for a continued creation of permanent supportive housing and 

provides rental assistance that would make housing affordable for 

those very-low-income folks with disabilities. 

Included in the bill are: Terminating Section 811’s mainstream 

tenant-based rental assistance program and transferring the rental 

vouchers to the Section 8 housing choice voucher program and 

tracking the vouchers to ensure that they are issued to low-income 

people with disabilities; two, modernizing the capital advance program; three, establishing a project rental assistance demonstration 

program; four, revising the definitions of group home, persons with 

disabilities, and supportive housing for persons with disabilities; 

and five, repealing the authority of the Secretary to waive size limitations on group home and independent living facilities. 

I would like to thank our witnesses for taking time from their 

busy schedules to join us and I look forward to hearing their input 

on this legislation. 

I yield back the balance of my time. Thank you. 

Chairwoman WATERS. Thank you very much. 

I now recognize Mr. Green for 3 minutes. 

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

ranking member. I also thank Mrs. Biggert for her efforts. 

Madam Chairwoman, I am eager to hear from witnesses because 

I am concerned about the Section 811 recipients who are to receive 

these vouchers possibly being put in a position where they are not 

getting the amount of service and help that they merit. Because 

when the vouchers were reissued, some nondisabled persons may 

have received some of the services intended for disabled persons. 

That is of concern, and I am trusting that this legislation will cure 

these ills that the program is suffering from. 

4 

I am also concerned about the gap financing that some of the 

persons who are interested in providing the services are having to 

experience, and the project-based rental assistance-only demonstration is something that I would like to hear the witnesses give us 

opinions about. 

So I thank you, and I yield back the balance of my time. 

Chairwoman WATERS. Thank you very much. 

Representative Biggert for 3 minutes. 

Mrs. BIGGERT. Thank you, Madam Chairwoman, for holding this 

hearing on a bill that Congressman Murphy and I introduced in 

April to modernize the Section 811 program. 

Let me just start by thanking my colleague, Congressman Murphy, for his work on this legislation; and I would urge my colleagues to cosponsor the bill. 

I would also like to thank each of our witnesses for joining us 

today. Your appearance here is a testament to your dedication to 

reform the Section 811 program but, more importantly, to enhance 

the quality of life for some of the neediest members of our communities. Thank you for what you do. 

Particularly, I would like to single out my constituent and witness today, Tony Paulauski from Tinley Park, Illinois; and I would 

also like to thank all of the wonderful people in Illinois who work 

at Trinity Services, Cornerstone Services, the State of Illinois, especially those volunteers, parents, and other members of the community who have reached out to me and expressed their support for 

this legislation. 

For the past 4 years, this Administration proposed cuts to the 

Section 811 program. I sent letters to the leadership of the Appropriations Committee asking them to fully fund it. Why? Because 

Section 811 is the only Federal program that provides funding for 

housing and vouchers for people with disabilities seeking to live as 

independent members of the community. 

Each year, Congress has decided to fully fund the Section 811 

program, but this year is the first time we have gone beyond that 

appropriation funding effort and introduced a bill to modernize the 

program, which hasn’t been updated in over 11⁄2 decades. And I 

won’t delve into the details of this very technical legislation. I will 

leave that to the witnesses. 

However, I would like to mention that this bill is critical to the 

goal of increasing the number of affordable units for people with 

disabilities. How? It maximizes Federal dollars by better aligning 

the Section 811 program with other Federal, State, and local funding sources, allowing nonprofit sponsors to more easily leverage additional funding. So the bill streamlines the program, and, for example, it tasks HUD with simplifying its slightly lengthy guidelines, which are over 400 pages long. And, in addition, it delegates 

grant authority to States and local housing authorities, which 

many proponents of this bill suggest will make the program more 

efficient. 

These and many other reforms in the legislation certainly will 

make the program more user-friendly and attractive to those nonprofit sponsors that develop permanent housing for people with disabilities. 

5 

Finally, I am pleased that the bill allows for a new demonstration project that some estimate will allow for the development of 

as many as 3,000 new units of housing for non-elderly persons with 

disabilities. That is really the tip of the iceberg, but it is a start. 

So, with that, I look forward to hearing from today’s witnesses, 

and I yield back. 

Chairwoman WATERS. Thank you very much. 

Mr. Clay for 3 minutes. 

Mr. CLAY. Madam Chairwoman, I have no opening statement, 

but I would like to yield to Mr. Murphy. 

Chairwoman WATERS. Certainly. Our author is here. Mr. Murphy. 

Mr. MURPHY. Thank you very much, Mr. Clay, and thank you to 

the chairwoman for her great work on bringing this piece of legislation forward and especially to my good friend, Mrs. Biggert, for her 

really career-long advocacy on behalf of supportive housing. It is an 

honor to co-sponsor this bill today. 

As our witnesses will testify here today, the Section 811 program 

is still the only Federal housing construction program that helps 

very-low-income people with serious and long-term disabilities live 

independently in the community. 

Unfortunately, as we will also hear today, the program hasn’t 

lived up to its full potential. By some accounts, the current Section 

811 program is producing less than 1,000 units of supportive housing each year, and it is plagued by many bureaucratic hurdles 

which have impeded eligible individuals from attaining the services 

that they deserve. 

Today, we will hear from Diane Randall from Connecticut’s Partnership for Strong Communities about the specific need in Connecticut, underscored by a recent article that appeared in a paper 

in my district entitled, very simply, ‘‘Death at Towers Highlights 

Need for Supportive Housing.’’ 

Only a few weeks ago, a mentally ill individual living in non-supportive senior housing in Meriden, Connecticut, was killed after an 

incident with police. This deeply disturbing incident underscored 

the number of mentally ill individuals, non-elderly, living today in 

a State like Connecticut, representative across the country in housing, which simply does not have the support to keep them well, and 

to get them the services that they deserve, often with very disastrous consequences. 

The need is great, and our challenge is certainly significant, but 

we can’t allow this program to continue to drift. It can be better, 

and I think our legislation today, the Frank Melville Supportive 

Housing Investment Act, will make significant progress towards 

addressing these challenges. Our reforms here will remove existing 

barriers in the Section 811 program, allowing Federal funding to 

be used to leverage additional State, local, and private financing to 

build even more units of supportive housing across this country, in 

addition to making some very important changes within the existing voucher program, to free that money up for capital costs and, 

as was mentioned before, putting in place a very important demonstration program that will allow dollars to flow into State-backed 

programs as well. 

6 

Lastly, Madam Chairwoman, I would just like to say a word 

about the name attached to this bill today; Frank and Allen Melville happened to live in my district in northwestern Connecticut, 

but their reach is national. In fact, at least two of the groups represented here today are funded through the Melville Charitable 

Trust, which has made its focus nationally reducing homelessness 

and building more supportive and affordable housing. 

Unfortunately, Frank Melville passed away recently. He has continued to be survived by his wife, Allen, and it is a testament to 

their work to build an advocacy community, represented in part 

here today, surrounding the issue of supportive housing, to have 

his name associated with it. I thank the chairwoman for allowing 

that to happen. 

I yield back the balance of my time. 

Chairwoman WATERS. You are certainly welcome. 

We have no other members with opening statements. I would 

like now to introduce our first panel, and I am going to call on Representative Biggert to introduce a very special witness who is here 

today. 

Congresswoman? 

Mrs. BIGGERT. Thank you, Madam Chairwoman. 

I am honored to introduce a constituent, Tony Paulauski from 

Tinley Park, Illinois. Since 1991, he has served as the executive director of The Arc of Illinois, which is a nonprofit organization that 

advocates on behalf of persons with developmental disabilities. 

The Arc was founded in 1950 by parents whose children had developmental disabilities. It’s a one-of-a-kind organization. The Arc 

seeks to ensure stability and supportive services for individuals 

with disabilities. 

During his tenure, Mr. Paulauski has led efforts to better educate members of our community about the importance of providing 

support services to people with disabilities, and, in addition, he has 

led efforts on a number of State legislative initiatives regarding the 

waiting list, Emily’s Intervention, transition, staff wages and benefits, and the elimination of the death penalty for the mentally ill. 

Prior to serving as the executive director, he served for 19 years 

as executive director of a local Arc of Illinois chapter and was a 

high school special education teacher. He is a native of Chicago and 

graduated from Northern Illinois University in DeKalb; and, as I 

mentioned, he resides in Tinley Park, in my district. So I am honored to represent him in Congress. 

Welcome, Mr. Paulauski. 

Chairwoman WATERS. Thank you very much. 

And now I get the opportunity to introduce Mr. Ronald S. Cohen, 

Ph.D., of United Cerebral Palsy, which is doing great work in my 

home City of Los Angeles. Ronald Cohen has been the chief executive officer of United Cerebral Palsy of Los Angeles, Ventura, and 

Santa Barbara Counties since 1987. 

Prior to the CEO position, Cohen served as clinical director for 

UCP. In 1980, he established the first community-based group 

homes for non-ambulatory children and adults with behavioral disorders in the State of California. Some of the first individuals in 

1980 leaving the developmental centers are being treated in those 

UCP homes. 

7 

Under Cohen’s leadership, UCP has developed 32 homes and 

rent-subsidized apartments consisting of 278 units. A number of 

the tenants came from the State Developmental Centers. 

Mr. Cohen is widely regarded as an expert on developing housing 

for special needs populations. He has testified before the United 

States Congress before, as well as before the California State Legislature on alternatives to institutionalization. 

Thank you very much for being here today, Dr. Cohen. 

Also, we have serving on the panel today: Diane Randall, executive director, Partnership for Strong Communities; Ann O’Hara, associate director, The Technical Assistance Collaborative; and Mark 

Shelburne, counsel & policy coordinator, North Carolina Housing 

Finance Agency. 

Welcome, panelists. Thank you for appearing before the subcommittee today, and without objection, your written statements 

will be made a part of the record. 

You will now be recognized for a 5-minute summary of your written testimony, and we will start with Ms. Diane Randall. 

STATEMENT OF DIANE RANDALL, EXECUTIVE DIRECTOR, 

PARTNERSHIP FOR STRONG COMMUNITIES 

Ms. RANDALL. Thank you very much, Chairwoman Waters, and 

thanks to all of the committee for your good work on behalf of affordable housing in our country. 

My name is Diane Randall and I am the executive director of the 

Partnership for Strong Communities, which is a Hartford, Connecticut, based housing policy and advocacy organization. I am very 

pleased to be here today. 

The changes to the Section 811 program that are proposed in 

H.R. 5772 offer valuable improvements that will have life-changing 

benefits for thousands of vulnerable citizens in this country. It will 

create new opportunities for permanent supportive housing in 

mixed-income communities which will provide a better life for all 

of those people. 

In Connecticut, we have a robust and dedicated cadre of State 

agency leadership, housing developers, and social service providers 

who have a demonstrated track record in building and managing 

permanent supportive housing that combines affordable, extremelylow-income persons with available social services that foster independence through employment and other social services. 

We have a Statewide advocacy campaign that our office runs 

called Reaching Home, and that campaign has a goal of creating 

10,000 units of permanent supportive housing in a 10-year period. 

It is an ambitious goal and, because of that huge demand, we count 

on every available resource from the State, Federal, and programs 

like this. The improvements that you are making in Section 811 

will do a great deal to help us achieve that goal. 

I am particularly intrigued by the demonstration component of 

the project-related rental assistance contract. It is an effective tool 

to couple with existing capital resources for development, such as 

low-income housing tax credits and HOME funds, in order to provide the operating subsidies that will make housing affordable for 

people who live on very restricted incomes. 

8 

I serve as the chair of the mortgage committee of our State Housing Finance Agency, and I can tell you that the competition for the 

9 percent low-income housing tax credit is very fierce. We are overprescribed probably three to one on what is available, and most of 

the housing being created under those 9 percent credits is serving 

people at the 60 percent of area median income. It is very difficult 

to serve people at 30 percent or below; and, in fact, anyone who is 

living on Social Security income alone in our State is below 30 percent of median income. 

We have successfully used tax credits through some other programs, using some State-based rental assistance to combine with 

low-income housing tax credits, to create permanent supportive 

housing. So this new resource that is proposed in this bill will be 

of great assistance to us to keep producing even more housing. 

The other component that I think is particularly compelling is 

that this proposed legislation puts the Section 811 program in line 

with best practices in community and housing development by promoting housing in mixed-income communities. It will include putting people with disabilities and people without disabilities in housing together, which is a good thing. 

Another important feature is transferring the mainstream tenant-based rental assistance vouchers and all of the future incremental vouchers for people with disabilities to the Section 8 Housing Choice Voucher program. 

I want to just comment on the amendments that clarify supportive housing as permanent and clarify the term ‘‘person with 

disabilities’’ to be consistent with HUD’s definition. We have found 

in our experience that in talking to tenants who have been homeless, people who have disabilities, that being able to move into 

housing that is considered permanent has a remarkable effect on 

their stability and their ability to move through recovery, particularly for people with psychiatric disabilities. In fact, people have a 

home, rather than a transitional type of resting spot, until they 

achieve some sort of additional goal. 

In Connecticut, one of the things that we have seen is that the 

benefits for creating this kind of permanent supportive housing are 

not only for the individual but they also have a positive benefit on 

the public health system. People who have access to permanent 

supportive housing, we have found a significant reduction in inpatient Medicaid costs for those individuals who have access to housing as opposed to some other sort of homeless situation. Obviously, 

it is less expensive to create this kind of housing than it is to have 

people in institutional settings such as jails or prisons or nursing 

homes. 

Finally, I want to thank Representatives Murphy and Biggert for 

naming this effort to increase the supply of permanent supportive 

housing after Frank Melville. It has been my privilege to work 

closely with the Melville Charitable Trust for over a decade. Mr. 

Melville; his wife, Allen Melville; and their entire family have dedicated millions of dollars of their own wealth in philanthropic giving 

to ending the root causes of homelessness and supporting the type 

of systemic change that allows people with psychiatric disabilities 

and other chronic health conditions to achieve stability and recovery. The Frank Melville Supportive Housing Investment Act of 

9 

2008 includes provisions that are not only significant to making 

this program more workable but also to increasing housing and 

community opportunities for thousands of Americans. 

[The prepared statement of Ms. Randall can be found on page 43 

of the appendix.] 

Chairwoman WATERS. Thank you very much. 

Dr. Cohen. 

STATEMENT OF RONALD S. COHEN, PH.D., CHIEF EXECUTIVE 

OFFICER, UNITED CEREBRAL PALSY OF LOS ANGELES, VENTURA, AND SANTA BARBARA COUNTIES 

Mr. COHEN. Thank you, Madam Chairwoman, for the opportunity 

to testify on the Section 811 Housing for Persons with Disabilities 

Program and why H.R. 5772 is needed. I am Ron Cohen, the CEO 

of United Cerebral Palsy (UCP) of Los Angeles, Ventura, and Santa 

Barbara Counties. 

UCP has developed 22 HUD projects over the years, and 12 of 

those have been the Section 811 capital advance grants to build 

apartments and homes for persons with significant developmental 

disabilities. Our buildings vary in size from 6 to 24 units, and they 

are integrated in neighborhoods throughout four Southern California counties. 

For every project we do, we must raise additional funds to fill the 

gap between the HUD grant and the true cost of construction, especially for our units, which are fully accessible. If one of our tenants 

can’t hold a key in their hand to open their front door, every door 

is infrared wired. So we put a switch on their wheelchair that will 

coordinate whatever part of their body they can voluntarily move, 

whether it be a finger, a toe, a head, a knee, and they hit that 

switch and the doors open and close automatically. We have wide 

doorways. We have roll-in showers. We have tilted mirrors and elevators. These units literally change lives. 

Steven S. is 42 years old, and he lived in a State hospital since 

the age of 3; he now lives in a UCP HUD apartment in Santa 

Monica. Thirty-nine years behind institutional walls, and today he 

is making decisions about what he eats for dinner, when he eats 

dinner, and what local neighborhood Starbucks he will go to in his 

power wheelchair. 

We know that housing development takes time, but this Section 

811 process is over the top. In fact, they built the Staples Center 

in Los Angeles, where the Lakers play, faster than I can build a 

13-unit HUD apartment complex. That is why we need reforms. 

Our projects, our small Section 811 projects, have taken 5 to 8 

years to build, and much of that process that bogs us down is just 

moving paperwork. 

One of our projects was funded in September 1995, and was not 

eligible for occupancy until October of 2003, a full 8 years after receiving the HUD award. The delays cost money. The costs of building materials go up, and the charity is the one that is left holding 

the bag. 

For our Burbank project, we submitted what is called a firm commitment application. We submitted that 9 months after we received the HUD award, and that means we are ready for construction. All entitlements have been completed. We have all the perVerDate Aug 31 2005 15:40 Sep 10, 2008 Jkt 044188 PO 00000 Frm 00015 Fmt 6633 Sfmt 6633 K:\DOCS\44188.TXT TERRIE
10 

mits. We are ready to go. We are ready to bring in the bulldozers, 

and we submitted that paperwork to HUD, and 27 months later, 

they completed the paperwork. 

Another Section 811 project took 29 months. That is almost 21⁄2

years. We were ready to build, and we had to wait 21⁄2 years. 

What that did to the Burbank project, was it increased the cost 25 percent on a $4 million project, a million extra dollars. We are 

left again as the deep pockets. For every dollar United Cerebral 

Palsy has to spend on bricks and mortar because of the delay, that 

dollar, that million dollars, comes out of program services, comes 

out of feeding and bathing and taking care of people. 

We need to speed up the process. H.R. 5772 will help. It changes 

some program guidance and will help with the red tape that we 

have to go through today. 

There is a critical need for affordable housing all over this country, and especially in Los Angeles. But affordable housing is becoming unaffordable for the nonprofit developer who uses the Section 

811 project. We need change. I urge you to pass H.R. 5772, and I 

thank you for your commitment. 

[The prepared statement of Dr. Cohen can be found on page 26 

of the appendix.] 

Chairwoman WATERS. Thank you very much. 

Ms. Ann O’Hara, from The Technical Assistance Collaborative. 

Ms. O’HARA. Good morning. 

Chairwoman WATERS. Good morning. 

STATEMENT OF ANN O’HARA, ASSOCIATE DIRECTOR, THE 

TECHNICAL ASSISTANCE COLLABORATIVE, ON BEHALF OF 

THE CONSORTIUM FOR CITIZENS WITH DISABILITIES HOUSING TASK FORCE 

Ms. O’HARA. Thank you, Madam Chairwoman, Representative 

Biggert, and all the members of the committee. 

My name is Ann O’Hara, and I am associate director of The 

Technical Assistance Collaborative, a nonprofit organization in Boston. I would like to thank you for the opportunity to testify today 

on behalf of the Consortium for Citizens with Disabilities Housing 

Task Force. I am here to strongly endorse the Frank Melville Supportive Housing Investment Act which will enact new policies and 

reforms to the Section 811 program. 

The CCD Housing Task Force, which includes national groups 

like the National Alliance on Mental Illness, the Arc of the United 

States, United Cerebral Palsy, the National Disability Rights Network, and many other groups, believes this legislation is essential 

to revitalize and improve Section 811, a program which in recent 

years has had many problems and now produces only 1,000 or 

fewer new units each year. In fact, in 2006, the program only produced 700 new units. 

The program, as you have already heard, is inefficient, plagued 

with red tape, and most importantly, doesn’t reflect the desire of 

many people with disabilities to live in integrated housing of their 

choice. It also doesn’t reflect best practices in current Medicaid and 

other State-funded community support programs. 

The legislation is important also because the need for supportive 

housing has never been greater. TAC and CCD studies show that 

11 

the average one bedroom fair market rent in 2006 was more than 

the entire income of a person with a disability who relies on SSI. 

Today, over 4 million adults with disabilities in this country rely 

on SSI and can’t afford housing unless they have deeply subsidized 

assistance from the Federal Government. Because there is no supportive housing available, these people remain unnecessarily in 

nursing homes, State institutions, and many live at home with 

aging parents who are now in their 70’s and 80’s and have no idea 

where their adult child will live after they can no longer provide 

housing for them. 

State governments are struggling to meet the mandates of the 

Supreme Court Olmstead decision, which affirmed that States 

must have an effective plan to assist people with disabilities who 

remain unnecessarily in these restrictive settings. 

The Section 811 program is the primary solution to this serious 

housing crisis. This bill will end—or if not end at least reduce—the 

bureaucratic red tape that has damaged this program’s reputation 

and will help create many more integrated housing opportunities 

that people with disabilities prefer. It will implement an exciting 

demonstration program that will leverage substantial investment 

of Federal low-income housing tax credits and home funding. It will 

reduce the time it takes to get Section 811 units online and, most 

importantly, could create 3 to 4 times the number of units the program is creating now. 

It also resolves long-standing concerns with the Section 811-funded mainstream voucher programs. These 14,000 vouchers are administered as Section 8 vouchers primarily by public housing authorities and have never been used to create supportive housing. 

The lack of a tracking system means that we don’t even know if 

all these vouchers are being used, but evidence suggests that at 

least some of them have been given to nondisabled households. And 

even though these vouchers are funded and renewed out of Section 

811, many PHAs stopped leasing vouchers funded out of Section 

811 during the Section 8 fiscal crisis because they thought the 

vouchers were funded out of Section 8. This bill resolves all those 

problems by permanently transferring these 14,000 vouchers to the 

Section 811 Housing Choice Voucher program. 

We are confident that H.R. 5772 will revitalize this dying program and stimulate efforts to create needed supportive housing 

throughout the country. 

We are incredibly indebted to the State of North Carolina, whom 

you will hear from in a minute, and also the State of Louisiana, 

that have both already adopted policies that reflect the PRAC demonstration program. In Louisiana, with hurricane recovery funding, 

they are well on their way to producing 3,000 units of supportive 

housing. So the PRAC demonstration program is based on actual 

experience in several States. It also is important to note that already six to eight other States have come forward to say that they 

would be pleased to implement this model. 

Finally, I would like to thank you for honoring Frank Melville 

with this bill. We look forward to working with you to make this 

bill a reality, and I thank you for all of your work on affordable 

housing in this country. 

12 

[The prepared statement of Ms. O’Hara can be found on page 31 

of the appendix.] 

Chairwoman WATERS. Thank you very much. 

Mr. Mark Shelburne, North Carolina Housing Finance Agency. 

Good morning. 

STATEMENT OF MARK H. SHELBURNE, COUNSEL & POLICY 

COORDINATOR, NORTH CAROLINA HOUSING FINANCE 

AGENCY 

Mr. SHELBURNE. Good morning, Madam Chairwoman, and members of the subcommittee. Thank you very much for this opportunity to speak in support of H.R. 5772. 

My name is Mark Shelburne. I am counsel & policy coordinator 

with the North Carolina Housing Finance Agency, and I come 

today bringing good news. 

The demonstration program in H.R. 5772 is modeled after North 

Carolina’s successful approach of leveraging the Federal low-income housing tax credit to create permanent, accessible, affordable, 

independent community supportive housing. So why I am here 

today is to describe basically how that works. 

First, let me provide a little bit of background. The Supreme 

Court’s Olmstead decision provides a mandate for States to serve 

people with disabilities in the most integrated settings possible. A 

crucial barrier to meeting that duty is the lack of affordable housing. 

In North Carolina, supplemental security income provides only $637 a month of income. That is not enough to live in any affordable housing program, including tax credits. 

Only with supplemental resources like the demonstration program in H.R. 5772 is it possible for these mainline affordable housing resources to reach people with disabilities, and in North Carolina we have proven that it is possible to do so by requiring housing credit property owners to set aside 10 percent of the units in 

their properties for people with disabilities, to have those properties form a connection with the local human services community 

by creating a project-based rental assistance program and by working in partnership, very close partnership, with our State Department of Health and Human Services. 

There is a crucial component of this work that is replicated in 

H.R. 5772 in linking the housing with the services. All housing 

credit property owners have to demonstrate a partnership with a 

local lead service agency, and that lead agency has two responsibilities. One is to refer prospective tenants to the property and the 

other is to act as a referral agent and/or to coordinate services to 

be sure that these referred tenants have individualized and voluntary support that they may need. 

The owners’ responsibility is pretty simple. They have to keep 

these units open for these referrals for short periods of time. And 

that’s it. They don’t provide disability related services. They have 

the same landlord/tenant relationship with these individuals that 

they do with the other 90 percent of the units. 

So what have been our outcomes? First is a proven track record 

of success. We have also had tremendous leveraging. The best 

measure of success is the number of people housed. In 7 years, we 

13 

have created 1,200 units of permanent supportive housing; and of 

those, well over half are built. The rest are under construction, 

which means 640 households in North Carolina with permanent 

and serious long-term disabilities have affordable housing. 

Success is also measured by recognition by others. We have received two national awards, and the set-aside has been replicated 

in the policies of three States. The efficiency comes from building 

units that were really going to be built anyway and accessing 

those. We use existing underwriting and allocation policies for the 

tax credit to create those 1,200 units; and along the way those 

units have leveraged approximately $80 million of Federal equity, 

Federal housing credit equity from investors. 

The operating subsidy program that we operate does require 

some additional funding. However, it is substantially less expensive 

than the alternatives of continued homelessness and facility-based 

residential services. And the average cost to the State, which works 

out to about $215 per unit per month, is about two-thirds of the 

cost of our State-administered project-based Section 8 portfolio. So 

the cost there is really a tremendous efficiency. 

The other efficiency operates at the property level. These tax 

credit owners and management companies do what they do best: 

They operate and manage property. The services community does 

what they do best: They provide support to individuals and families 

in their properties. 

So the bottom line is that if Congress enacts H.R. 5772, our experience in North Carolina shows that it will work. 

Thank you very much, and I look forward to any questions. 

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

45 of the appendix.] 

Chairwoman WATERS. Thank you very much. 

Mr. Tony Paulauski. 

STATEMENT OF TONY PAULAUSKI, EXECUTIVE DIRECTOR, 

THE ARC OF ILLINOIS 

Mr. PAULAUSKI. Madam Chairwoman, Representative Biggert, 

and members of the committee, thank you for this opportunity. 

In Illinois, there are 220,000 infants, children, and adults with 

developmental disabilities. Let me tell you a little bit about why 

you need to do this important H.R. 5772. 

We have a number of chapters that are involved with Section 8 

and a few that are involved with Section 811. The ones that are 

involved with Section 811 love the flexibility and the opportunity 

that this program provides for the people who reside in these housing situations. 

You know that there is a national crisis here for people who are 

poor and people who have disabilities. We don’t have to go into 

that. But, in Illinois, we rank 51st out of 51 in the development of 

small community living arrangements for 6 people or less. We need 

more—as the other panelists said, more supports like Section 811. 

In Illinois, we have 20,000 people on a waiting list, 7,000 of whom 

are looking for housing situations. Four hundred caregivers are 

over the age of 70 and in their 80’s. 

14 

In order to access housing in Illinois, you have to be in a crisis 

situation, so families have to expose their most vulnerable moments and prove that they are desperate to get these services. 

Take, for example, what we call the situation with Melanie and 

her daughter Sara. How terminal is terminal? Melanie was a single 

mother in her 50’s, the primary caregiver of her adult daughter. 

Melanie and Sara lived in Orland Park. Melanie was working with 

one of our local chapters and was in the final stages of cancer. She 

needed to know that her daughter was going to be taken care of. 

The State was considering placement of Sara in some community 

living situation, but they needed a document that this was truly a 

crisis situation. Finally, the State did act, and Sara is in a home, 

and shortly after Sara moved to that home, Melanie passed away. 

That is the face of these important issues that you folks deal with. 

People with developmental disabilities are also very poor. They 

experience a 90 percent unemployment rate. They rely on public 

benefits and community services such as Section 811. 

The majority—there are 30,000 individuals in Illinois who are 

primary caregivers over the age of 60. So the importance of this 

program can’t be understated. People who care for these children 

and their adult children at home are true American heroes. Families are the major providers of services in not only Illinois but the 

United States. Often, one parent resides in the home just to take 

care of the child or the adult person. They give up employment, 

they sacrifice retirement, and they also experience high rates of divorce because of the pressure that is put on them to support their 

children at home. 

There are many success stories. Community services and supportive housing such as Section 811 have dramatically impacted 

lifestyles of people with disabilities, as has been pointed out here. 

We ask you, as Members of the Congress, to not only pass this important legislation, but to also become co-sponsors and show support for your families. 

We love the aspects of the Project Rental Assistance Contract 

and the demonstration program, and the only criticism we have is 

that we need to see more than the 1,000 units that are now available, only 33 of which are going to Illinois. 

We also like the capital PRAC funds which are combined with 

the Federal tax credits and create the integrated rental projects 

that we need and all support here. The flexibility, the innovation 

of Section 811 is one that we urge you to support by passing this 

out of committee. 

Thank you so much. 

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

37 of the appendix.] 

Chairwoman WATERS. Thank you very much. 

I would like to thank each of you for your testimony, and I would 

like to thank you for taking time from your lives and your schedules to come to Washington, D.C., to provide us with information 

that will be helpful in passing this most important legislation. 

I would like to turn to some questions at this point, but let me 

just say that we did invite HUD to be here today. They could not 

send a witness, but I am going to grant unanimous consent to permit HUD to submit written testimony on H.R. 5772, and we are 

15 

asking that they have it in to us within 2 weeks. So, without objection, it is so ordered. 

I have a few questions before I turn to the members. Let me ask 

Dr. Cohen about funding. Both the current Section 811 program 

and this legislation require nonprofit sponsors to finance supportive services outside of Section 811 capital advance and projectbased rent subsidies. Where do you get additional resources to do 

this? 

Mr. COHEN. For the support services? 

Chairwoman WATERS. Yes. 

Mr. COHEN. Well, in the State of California, we have the 

Landerman Act, which creates the regional centers; and I think 

California is the only entitlement State in the country. So our folks 

are entitled to support services, and there are many vendors that 

provide those services, we being one of them, also. And the regional 

center system with State money purchases those services, whether 

it be 5 hours a day that a person might need or 24 hours a day 

like Mr. Steven S. that I mentioned in Santa Monica has 24-hour 

supports. 

Chairwoman WATERS. You are absolutely right. I served in the 

State legislature, and I should have remembered the Landerman 

Act and our tremendous services that we provide to the developmentally disabled. As a matter of fact, we have and I still work 

with a number of individuals who have small homes where they 

have six, seven, or eight people who live there, and they have the 

regional centers that provide support for all of them, and it seems 

to work very well. 

This legislation would require shifting of underwriting from HUD 

to the State Housing Finance Agency if a Section 811 sponsor seeks 

mixed financing. Would this work in California? 

Mr. COHEN. If it can move the process faster, yes. And I believe, 

what I hear, it will move it faster. 

Chairwoman WATERS. Have you had any conversations with our 

State Housing Agency about this, and are they willing to work directly with the nonprofit disability agencies? 

Mr. COHEN. Our State Housing Agency has been very supportive 

of supporting the development of homes and apartments for people 

with developmental disabilities. In fact, we have gotten a number 

of grants from them. We have one right now on a 24-unit project 

going up in Glendale, which is an Section 811 project, yes. 

Chairwoman WATERS. That is very good. 

I now recognize Mrs. Capito for questions. 

Mrs. CAPITO. Thank you, Madam Chairwoman. 

I want to thank the panelists, and I have learned a lot. 

Mr. Cohen, you mentioned in your testimony that the length of 

time to get these projects and to see them to at least beginning of 

completion was excruciating. I can imagine when you are looking 

at different funding sources over the course of 21⁄2 years, things 

really change. 

But I think Mr. Shelburne has talked about the demonstration 

project in North Carolina. Do you think that using the model in 

North Carolina in a national way would help to eliminate some of 

these delays that you have seen and the length of the regulatory 

process at HUD? 

16 

Mr. COHEN. I am not familiar with the model in North Carolina. 

But to move a stack of paper from one—once we give it to them, 

that takes 21⁄2 years. That’s the big delay for us, is just moving the 

stack of paper. And I don’t know what happens once it goes in the 

front door. But we sit by our phone for 21⁄2 years waiting for it to 

come out the back door. 

Mrs. CAPITO. Mr. Shelburne, in North Carolina, what kind of experiences have you had that give us confidence that these kinds of 

reforms are going to work? 

Mr. SHELBURNE. Well, when you use the Federal low-income 

housing tax credit program, Congress back in 1986 had the wisdom 

to say you have 2 years to build it and— 

Mrs. CAPITO. Before it goes away. 

Mr. SHELBURNE. Exactly. And that is an inherent—and what you 

have are owners will look at—for example, if they have a 12- or 18- 

month construction schedule, they will get to a point where they 

will realize they are not going to be able to meet it, and so they 

tell the agency they are not going to be able to meet it, and they 

give the resources back to the agency and move forward. But that’s 

a rare occurrence. Almost all projects do go forward upon getting 

an award. 

Mrs. CAPITO. Thank you. 

I have one other question, and anybody can answer this. 

In reading some of the bill’s intentions and some of the problems 

I think that have been initiated, what I am asking is how large of 

a problem is it that some of the vouchers that are intended for 

those who have disabilities or low-income disabilities move then 

into the hands of somebody else without being tracked? How big a 

problem is that, and are the solutions in this bill something that 

you think will help address that problem? 

Ms. O’HARA. Unfortunately, we don’t know the extent of the 

problem. But our concern is that it is a significant problem. 

Mrs. CAPITO. How does that work? Does that work like the family, the person with a disability maybe moves on to a different living setting and somebody else in the family can— 

Ms. O’HARA. No. The problem is that these 14,000 vouchers are 

imbedded in the 2 million Section 8 voucher program. And unless 

you have a system at the PHA that tracks those vouchers as distinct from Section 8 funded vouchers, and unless you have tenant 

selection of policies that make sure that when a voucher does turn 

over that they reach down into the waiting list to find the qualified 

next person who is disabled, unless you have those systems in 

place, these vouchers are just going to whomever is at the top of 

the list. 

It was a mistake to make this a PHA-focused program. The 

PHAs do not do supportive housing generally; and when you have 

a small drop of water in a big ocean of Section 8, you can’t be surprised if that gets lost in the big picture. 

Mrs. CAPITO. That’s concerning. I think, obviously, this program 

was created to meet and help a certain segment of our population 

that we all want to reach out and provide not only supportive services and housing and all those things and to me my hope with this 

legislation is that we could tighten that loophole, because there is 

obviously a great deal of need. We have talked about the people on 

17 

the waiting list. But for me to think that folks who have disabilities, who have so many challenges are not able to access the program that is there for them is a little discouraging, to say the least. 

So I thank you all very much for your testimony. 

Chairwoman WATERS. Thank you very much. 

Mr. Green? 

Mr. Cleaver, go right ahead. 

Mr. CLEAVER. Thank you, Madam Chairwoman. 

I only have one question. Frankly, my concerns were centered 

more around HUD, and I am disappointed that they could not show 

up today. I will express my concern; and it is, when we are talking 

about mixed funding, I have some alarm bells go off because in my 

city—I am a former mayor—we ended up in a battle with HUD 

over the fact that the Section 811 program and the Section 202 program are so similar that we actually had 202 projects where they 

were moving disabled individuals in with senior citizens. 

So when you are talking about mixing the funding, I already 

think we have a problem; and I am sure that Kansas City, Missouri, is not the only place where that has taken place. I want 

some assurance from HUD—I guess I am talking to the walls—that 

this is not going to take place. 

And I am sure that none of you can answer the question. I have 

expressed it, and I feel better. 

Ms. O’Hara? 

Ms. O’HARA. Yes. In this context, when we speak about mixed 

funding, we are talking about different sources of capital that 

would go to create non-elderly units of supportive housing in nonelderly buildings. 

Mr. CLEAVER. I understand. And I am saying that HUD has to 

assure us that you are not going to mix the two populations. Because they are doing it and creating just unbelievable problems. 

You have elderly people, in some instances, trying to deal with 

disabled individuals in the same building. It is a major problem. I 

will take it up with HUD. 

Thank you. 

Chairwoman WATERS. Mrs. Biggert. 

Mrs. BIGGERT. Thank you, Madam Chairwoman. 

Mr. Paulauski, the Administration’s budget proposal contains a suggested $77 million-dollar reduction in the Section 811 funding. 

I talked about that a little bit earlier, that for the last couple of 

years it has been a reduction. In this case, the Administration’s 

proposal calls for establishing a leveraged financing demonstration 

program in order to remove barriers, such as duplicative requirements and timelines that don’t match, and to encourage the use of 

multiple funding sources. 

Could the bill’s demonstration program potentially result in 

leveraging sufficient to make up for the reduced funding? 

Mr. PAULAUSKI. I think the simple answer to that is ‘‘no.’’ I want 

to point out, thank you for restoring those funds. And I understand 

there is an additional $13 billion that is about to be added to that 

line as well. I don’t know if any of the other panelists would have 

a better response to that. 

Mrs. BIGGERT. Would anybody else like to address that issue? 

Ms. O’Hara. 

18 

Ms. O’HARA. I believe that, under the various components of this 

bill, there will be substantial leveraging of funding. I think Mr. 

Shelburne spoke about the extraordinary level of funding other 

than the Section 811 funding that would be used. 

But I must say that with the incredible need that we have in this 

country for supportive housing for the lowest-income people, the 

fact that I know in Illinois there are many people in nursing homes 

who don’t need to be there, we need to have every penny that we 

possibly can have in the Section 811 program, and then we can go 

out and leverage all of the other funds to be able to really increase 

the number of supportive housing units that we are developing 

around the country. 

Mrs. BIGGERT. If we really only are serving or have a thousand 

and a little bit more units right now, how long would it take to, 

or how many would be added, let’s say, in the next year? 

Ms. O’HARA. Well, if this bill is enacted, you could create at least 

4,000 units with the same amount of money that we are now creating 1,000 units. 

But I think what is equally important and what we have learned 

from Louisiana and from North Carolina is that this model can also 

be replicated with State funds, so that I think if we can provide 

the leadership to show that you don’t need Section 811 funds to 

create the housing, but Section 811 can be a small piece of a much 

larger financing package, then we could create many, many more 

units over time, and we would see many more States step up to the 

plate to address this issue. 

Mrs. BIGGERT. Do you have any sense of the number of State 

housing agencies that would be interested? 

Ms. O’HARA. I can give you right off the top of my head about 

7 States that we know are interested: Illinois; Michigan; Arizona; 

New Mexico; Pennsylvania; Vermont; and Massachusetts. Those 

are places where I just happened to work, and where we have already had conversations with housing finance folks about this approach. 

There is tremendous excitement because these States have been 

asked by their Medicaid agencies, by their mental health agencies, 

by their developmental disability agencies, for many years these 

housing finance agencies have been asked to help deal with the 

problem of people with disabilities who are in institutions and 

nursing homes, and the housing finance agencies haven’t had the 

tools to respond. This bill provides them with the tools. 

Mrs. BIGGERT. Is it anticipated that the processing for all 

projects that include funding from other sources would be delegated 

to a State or local housing agencies? 

Ms. O’HARA. I think that is the proposal, yes. I think that with 

the Section 202 processing, which is also going to be with the housing finance agencies, that we will have a critical mass of program 

activity that would be attractive to the housing finance agencies to 

undertake. 

And I agree with Mr. Shelburne that once that happens, we will 

have efficient processing of projects that meet the deadlines associated with the tax credit program 

Mrs. BIGGERT. Thank you. 

Thank you to all the witnesses. 

19 

Chairwoman WATERS. Thank you very much. 

Mr. Green. 

Mr. GREEN. Thank you, Madam Chairwoman. 

Madam Chairwoman, every now and then and again, you just 

have to testify. You just have to kind of let it all out. So please forgive me and indulge me, if you would, for just a moment because 

I have this feeling that is overwhelming me. 

I absolutely believe that Mrs. Biggert and Mr. Murphy, that they 

are doing God’s work. And I just have to say it. Often the wellheeled, the well-to-do, they will always fare well. It is the least, the 

last, and the lost that we really have to work hard to help because 

they don’t have the lobbyists, and they don’t have the support system that others will have. I just want to thank the two of them for 

doing what they are doing today because, in my heart, I believe 

that at some place on the infinite continuum that we know as time, 

we will all have to account for our time right here. And I think that 

you are going to get some extra CRA credit for what you are doing 

today. So I thank both of you for what you are doing. 

I would like to address my first question to Mr.—I believe it is 

Shelburne. Is that correct, sir? 

Did you indicate that we are doing this with buildings that are 

already being constructed? Let me just go through this, so that I 

can make what appears to be clear, transpicuously clear. You are 

saying that we have a builder who is already constructing apartments, and you will approach this builder and say, ‘‘We would like 

to give you a credit, a tax credit, if you will set aside a certain 

number of units for persons who are disabled.’’ 

Is that the way it is working? 

Mr. SHELBURNE. Almost. What happens is the developer finds a 

site, for example, and it can accommodate say 64 units, and they 

will then apply to us for the low-income housing tax credit to subsidize the construction of those 64 units. And as a requirement of 

receiving those credits, they have to set aside 7 of those 64 for people who are referred by the human services community. 

Mr. GREEN. Here is one thing that I suspect you know, but I am 

just picking up. You solve the problem of location when you do this. 

Location has become a real problem in terms of helping people with 

disabilities. For whatever reasons, we have people who don’t want 

certain projects in their neighborhood. But by placing this within 

that project, a project that is going to be built anyway, you now 

have the location problem resolved because you have it confined 

within what is a market-based venture, generally speaking. 

Has that been your experience? 

Mr. SHELBURNE. Absolutely. There is still some localized opposition to affordable housing in general, but there is never any opposition to these 10 percent set-aside units because that is never part 

of the story that is related, because really this is just a tax credit 

property that is providing workforce housing. 

So in the event there is localized opposition, you have a developer that has the capacity to respond to that. 

Mr. GREEN. Now, for the record, I would like to do this, just so 

that we will have it in the record. Is it true that you, that each 

of you, that you support this piece of legislation? If this is the case, 

would you kindly extend a hand? I don’t mean to have you do 

20 

something so simplistic, but I want to be sure we have everybody 

on record. 

For the record, everyone on this panel supports this piece of legislation. I want that to be made known, that we have an entire 

panel. This is a unique occurrence; an entire panel supports this 

piece of legislation, which is important, by the way. It is important. 

And, finally, let me just ask this. I know that you have given us 

great information. The insight that you accorded us is a blessing. 

It really is. But is there something more that you would have us 

do, any one of you, to make this piece of legislation even better? 

I think that my colleagues have done an outstanding job, but is 

there something else that anyone would want to call to our attention that we might do to tweak it. Anyone? 

Yes, ma’am. 

Ms. O’HARA. I would love the report language to make sure that 

HUD throws out all 400 pages of the Section 811 guidance that 

now exists. 

Mr. GREEN. Report language. 

Ms. O’HARA. Yes. I think that would be very helpful to make 

sure that HUD really does change what their current policies are 

on the processing of these grants. 

Mr. GREEN. Anyone else? 

Yes, sir. 

Mr. PAULAUSKI. I can’t leave it unsaid, more money for the program. 

Mr. GREEN. I think that is a good point. 

I will close with this comment, if I may. Those of you who are 

concerned about 200 pages going in, 2 years to come out, I sincerely 

believe that something will happen in and around November of this 

year that will change that. I just believe it. 

Thank you very much. 

I yield back. 

Chairwoman WATERS. Well, Mr. Murphy, in this infinite continuum of time, you will be our last questioner. 

Mr. MURPHY. I appreciate the points, Mr. Green. I am going to 

need them. 

Let me first, Madam Chairwoman, if I could, just place into the 

record a statement from Mike Fitzpatrick, the executive director of 

the National Alliance of Mental Illness, in support of the bill. 

Chairwoman WATERS. Without objection, it is so ordered. 

Mr. MURPHY. Thank you very much. 

Let me first pose a question to Ms. Randall. In Connecticut, the 

Partnership for Strong Communities and through the Reaching 

Home Campaign has put on the table an incredibly aggressive goal 

of, within 10 years, building 10,000 units of supportive housing, 

and you spoke about it a bit in your testimony. I just want to step 

back from the trees a little bit to the forest and ask you, from your 

perspective, a couple of years into this campaign, to what you are 

seeing as the primary barriers here. There are a multitude of them, 

and this legislation tries to solve at least a few of them that may 

exist through the Section 811 program, which has limited reach as 

it is today. 

21 

I think it would just be interesting for the committee to understand one State’s and one advocacy community’s experience in trying to build out a real network of supportive housing units. 

Ms. RANDALL. Thank you for the question, Representative Murphy. 

Let me first start by saying what is working because I think that 

some of the questions that have come previously, we also have 

some experience in Connecticut that is, while we don’t have a setaside like North Carolina, we have used some State funding coupled with low-income housing tax credits to create permanent supportive housing that has been in existence for about 10 years. And 

we have seen remarkable benefit. 

One of the things Connecticut has done is created an interagency 

working group that includes key State human services agencies 

along with our housing finance agency, along with the line executive agency that delivers housing services. That cooperative relationship has allowed the coupling of services with capital financing 

and with operating subsidies to create permanent supportive housing. 

So a program like this refined Section 811 would fit in 

seamlessly. And you should count Connecticut among the housing 

finance agencies that will be also very interested in taking advantage of the changes in this program if it passes. 

I think the biggest challenge right now clearly is around financial investment in permanent supportive housing. I think it is a 

growing movement. In the next decade, we will see, I hope, thousands of units created across this country to address not only the 

needs of people with disabilities or very low income, including people who are homeless. I think it will be a remarkable change. But 

it will take a new and significant level of investment to both create 

the housing stock, which particularly the demonstration program of 

this does, but also to leverage resources against one another, because I think that we can’t rely on only Section 811 to create housing for people with disabilities. 

It is critical that we use mainstream programs like the Section 

8 program, the National Housing Trust Fund that is currently in 

the legislation that you are considering through the GSE reforms, 

keep income-targeting to people below 30 percent of median income. That capital resource could be combined with other sorts of, 

whether it is Medicaid funding or some other social service funding, to create permanent supportive housing. 

So there are exciting opportunities on the horizon. But until that 

financing and resources come, that won’t happen. 

I think the other important work that is happening is the kind 

of technical assistance work that TAC does, that the Corporation 

for Supportive Housing does, that actually helps train local providers, the developers, to work with service providers, because 

there is a little bit of effort in there. 

As Mr. Shelburne said, housing developers are good at creating 

houses. They don’t manage or they don’t provide social services. 

But they do need a working relationship, and that is an important 

factor. 

Mr. MURPHY. That actually leads me perfectly into what was 

going to be my second question to Mr. Shelburne on that point. 

22 

You have addressed the financing situation with an incredible innovative approach. I am actually interested in your testimony that 

the developers and the financial community seem to have not opposed the 10 percent set-aside as you put it into place. I would love 

you to sort of talk a little bit about their level of cooperation, but 

also that point from Ms. Randall, because you are relying on developers who may have no experience with supportive housing as opposed to the normal developer who would, in many cases, be a nonprofit who has some social-serving experience. 

I am interested in how you found those set-aside 10-percent 

projects to be from a quality perspective when you have developers 

or owners of the buildings who may not be doing this type of supportive housing or social service work in other parts of their portfolio. 

Mr. SHELBURNE. It has really worked out very well. 

The key for getting the development and financial community to 

buy into it, the two keys were, for them, again, to understand that 

their relationship with these units would be the same as it is for 

every other unit. They use standard leases. So the tenants have the 

same rights and responsibilities as other tenants in the property. 

So they knew they didn’t have to have a different set of systems. 

The other key was of course having the operating subsidy to 

make the units both affordable to the tenants and produce enough 

cash flow for the property to operate. 

The outcomes, in our experience, have been really good. What we 

have seen, and particularly my counterparts at the State Department of Health and Human Services have seen, are people, when 

they get into housing, people with disabilities, get into stable housing, they do a lot better in many cases than their clinicians ever 

thought they could, just because they now have a place that is 

under their control, that they have the same standard lease that 

anyone in their family has, that they really start doing much better. 

If I could add just one quick point in response to that. I would 

be amazed if there are less than 30 States that apply for this program, if it is created; it could even be 40 or all 50 States. Because 

at every single conference I go to for State housing finance agencies, this comes up, every time, in multiple sessions. We all want 

to do this. But what we don’t have is the operating subsidy to make 

it work. Because we can build the units, but they can’t be affordable and also generate enough revenue for the owner without some 

type of operating subsidy. That is what we need. 

Mr. MURPHY. Well, Mr. Shelburne, I thank you for North Carolina’s leadership here, and I thank the panel for being here, but 

also being such an integral part of developing this legislation. We 

think we can make it a little better as it heads to the Floor, but 

not much, because you have put so much work into it already. 

I thank the Chair for the time. 

Chairwoman WATERS. Thank you very much. 

I would like to thank Mr. Murphy and Mrs. Biggert for authoring 

this legislation, and even though I, perhaps, will not express it in 

quite the same manner as Mr. Green, I, too, am very appreciative 

of this legislation, and it will go along way toward dealing with 

23 

helping, I think, some of our disabled to live longer and have a 

higher quality of life. 

As a matter of fact, when Mr. Shelburne mentioned that a disabled person could be able, outside of an institution, in this independent type living, to be able to decide what they want to eat and 

when they want to eat, it struck me as something I had not really 

thought about. That was a very, very pointed, revealing statement. 

I want to thank you all for what you have shared with us today. 

Also, I would like to make a correction. Earlier in my presen- tation, I mentioned an amount of money, $160 million in the President’s budget. That now is $250 million; that has come out of our 

appropriations subcommittee. So I don’t want you to leave with 

that misinformation. It is $250 million that has been voted out of 

our subcommittee. 

Having said that, the Chair notes that some members may have 

additional questions for this panel which they may wish to submit 

in writing. Without objection, the hearing record will remain open 

for 30 days for members to submit written questions to these witnesses and to place their responses in the record. 

I know that many of the members have already indicated, Mr. 

Murphy and Mrs. Biggert, that they would like to be cosponsors on 

this legislation. So we will make sure that happens. 

This panel is now dismissed. We don’t have a second panel today. 

Let me just thank you again. 

Before we adjourn, without objection, ANCOR’s written statement will be made a part of the record for this hearing. 

I thank you all very much. This hearing is adjourned. 

[Whereupon, at 12:10 p.m., the hearing was adjourned.] 

(25) 

A P P E N D I X 

June 20, 2008 

26 


44188.001
27 


44188.002
28 


44188.003
29 


44188.004
30 


44188.005
31 


44188.010
32 


44188.011
33 


44188.012
34 


44188.013
35 


44188.014
36 


44188.015
37 


44188.016
38 


44188.017
39 


44188.018
40 


44188.019
41 


44188.020
42 


44188.021
43 


44188.022
44 


44188.023
45 


44188.024
46 


44188.025
47 


44188.026
48 


44188.027
49 


44188.028
50 


44188.029
51 


44188.006
52 


44188.007
53 


44188.008
54 


44188.009
55 


44188.030
56 


44188.031
57 


44188.032
58 


44188.033