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H.R. 1999—THE STATE AND LOCAL

HOUSING FLEXIBILITY ACT OF 2005

HEARING

BEFORE THE

SUBCOMMITTEE ON 

HOUSING AND COMMUNITY OPPORTUNITY

OF THE

COMMITTEE ON FINANCIAL SERVICES

U.S. HOUSE OF REPRESENTATIVES

ONE HUNDRED NINTH CONGRESS

FIRST SESSION

MAY 17, 2005

Printed for the use of the Committee on Financial Services

Serial No. 109–30

(

(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 

PETER T. KING, New York 

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 

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 

PETER T. KING, New York 

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 

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 

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C O N T E N T S 

Page 

Hearing held on: 

May 17, 2005 ..................................................................................................... 1

Appendix: 

May 17, 2005 ..................................................................................................... 57

WITNESSES 

TUESDAY, MAY 17, 2005

Brightbill, David, Executive Director, Washington-Morgan Counties Community Action Agency, Marietta, Ohio .................................................................... 18

Crowley, Sheila, President, National Low Income Housing Coalition ................ 45

Geese, Jody, Executive Director, Belmont Metropolitan Housing Authority, 

Martins Ferry, Ohio ............................................................................................. 15

Glover, Renee Lewis, President and CEO, The Housing Authority of Atlanta .. 40

Gutzmann, Jon, Executive Director, Saint Paul Public Housing Agency, Saint 

Paul, Minnesota ................................................................................................... 20

Leach, Tarrah, Section 8 Housing Choice Voucher Participant, Logan, Ohio .... 11

Montiel, Rudolf, Executive Director, City of Los Angeles Housing Authority .... 17

Muha, Denise, Executive Director, National Leased Housing Association ......... 49

Nackerman, Daniel, Executive Director, Housing Authority of the County 

of San Bernardino, California ............................................................................. 42

Reilly, Christopher, Area Vice President, Equity Residential, Boston, Massachusetts, Representing National Multi Housing Council and National 

Apartment Association ........................................................................................ 47

Tegeler, Philip, Executive Director, Poverty and Race Research Action Council ........................................................................................................................... 45

Turner, Margery Austin, Director, Metropolitan Housing and Communities 

Policy Center, The Urban Institute .................................................................... 13

APPENDIX 

Prepared statements: 

Ney, Hon. Robert W. ........................................................................................ 58

Cleaver, Hon. Emanuel .................................................................................... 60

Maloney, Hon. Carolyn B. ................................................................................ 63

Waters, Hon. Maxine ........................................................................................ 69

Brightbill, David ............................................................................................... 71

Crowley, Sheila (with attchments) .................................................................. 77

Geese, Jody (with attchments) ........................................................................ 92

Glover, Renee Lewis ......................................................................................... 109

Gutzmann, Jon ................................................................................................. 113

Leach, Tarrah ................................................................................................... 127

Montiel, Rudolf ................................................................................................. 132

Muha, Denise (with attchments) ..................................................................... 135

Nackerman, Daniel ........................................................................................... 140

Reilly, Christopher ........................................................................................... 148

Tegeler, Philip (with attachments) ................................................................. 154

Turner, Margery Austin ................................................................................... 163

ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD

Miller, Hon. Gary G. ................................................................................................

Housing Authority of Los Angeles County, prepared statement .................. 176

Page

VI

Miller, Hon. Gary G.—Continued

National Association of Housing and Redevelopment Officials, prepared 

statement ....................................................................................................... 183

National Council of State Housing Agencies, prepared statement .............. 191

Muha, Denise ...........................................................................................................

American Association of Homes and Services for the Aging, Council for 

Affordable and Rural Housing, Institute for Real Estate Management, 

Institute for Responsible Housing Preservation, National Apartment 

Association, National Affordable Housing Management Association, National Association of Affordable Housing Lenders, National Association 

of Homebuilders, National Housing Conference, National Leased Housing Association, National Multi Housing Council, letter ........................... 196

(1)

H.R. 1999—THE STATE AND LOCAL 

HOUSING FLEXIBILITY ACT OF 2005

Tuesday, May 17, 2005

U.S. HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON HOUSING AND

COMMUNITY OPPORTUNITY

COMMITTEE ON FINANCIAL SERVICES, Washington, D.C. 

The subcommittee met, pursuant to call, at 2:04 p.m., in Room 

2128, Rayburn House Office Building, Hon. Robert Ney [chairman 

of the subcommittee] presiding. 

Present: Representatives Ney, Miller of California, Tiberi, 

Pearce, Neugebauer, Davis of Kentucky, Waters, Velazquez, Lee, 

Miller of North Carolina, Scott, Frank, Davis of Alabama, Cleaver, 

Green, Maloney, and Watt. 

Chairman NEY. [Presiding.] The hearing will come to order. 

I will go ahead and give my opening statement and see if anyone 

else is going to be arriving. 

I want to thank all of our witnesses for appearing today, as we 

continue our examination of the important Section 8 Housing 

Choice Voucher Program. Those of us on the Housing Subcommittee are acutely aware of the many difficult management and 

budget challenges inherent to this Government program. It is my 

hope that we can take this opportunity to work together as we contemplate the future of Section 8. 

While homeownership is a desired goal for many Americans, 

there are many in today’s society that are not yet ready to own 

their home for a wide variety of reasons. It is, therefore, prudent 

that we continue to pursue alternatives to make sure that affordable rental housing is available. We must also make sure that assistance is there for those who need it. 

The Section 8 Housing Assistance Program is the major vehicle 

for providing rental assistance to low-income families and individuals. Today, the Section 8 program has become the largest component of the Department of Housing and Urban Development’s 

budget. The rising cost of providing rental assistance is due in 

varying degrees to expansion in the program, the cost of renewing 

expiring long-term contracts, and rising costs in housing markets 

across the country. 

The day of reckoning is coming fast. If we do not address the increasing cost to the program, it will consume the HUD budget. It 

is already affecting the funding of other programs in the department, and I think that forces choices of good programs versus good 

programs, which is not what we want to do. 

2

Last Congress, we held six hearings on the Administration’s proposal to block grant the Section 8 program—I feel like we are at 

Groundhog Day again. You wake up, and you go through another 

year and another year—and that, of course, was a block grant to 

the States. 

While I recognize we have to constantly seek ways to improve 

America’s communities and strengthen housing opportunities for 

all citizens, particularly our poor, I also understand that the issue 

of reforming Section 8 is a contentious one. It is a difficult one. 

However, it is an issue that deserves a sustained debate so that 

all interested parties are heard. To that end, I intend to continue 

to hold roundtable discussions that will focus on the future of the 

Housing Choice Voucher Program. 

As to not plagiarize, I have to give credit to Jody Geese, who is 

here today. It actually was her idea. She allowed me to take some 

credit for it. It was an idea that she talked about one night when 

I was talking to some of the housing groups. 

Congressman Barney Frank, who just arrived, was at the roundtable, as was Congresswoman Maxine Waters. I think Congressman Miller stopped in and Congresswoman Velazquez of New 

York. 

I thought it was productive because we did not go the formal 5-

minute, we had a give-and-take, and I think that was very, very 

healthy. So I think future roundtables would be healthy, too. 

Through these roundtables, it is my hope to continue identifying 

the top-level issues regarding the current operation, administration 

and funding of the Housing Choice Voucher Program and to craft 

solutions that will address the effectiveness and efficiency of the 

Government’s role in the administration of the program. 

I trust we can engage in meaningful discussions with my colleagues on both sides of the aisle and the Administration to find 

a solution to the Section 8 program and some of the problems that 

are there. 

Not a day goes by that I do not talk to a constituent or an organization concerning the problems inherent in the program, such as 

a long waiting list, lack of affordable Section 8 Voucher housing, 

and various PHA funding concerns. The longer we wait to address 

the increasing costs of the Section 8 program, the greater risk 

there is to the program, as well as to other programs of HUD that 

will most surely suffer some additional cuts. 

I would like to recognize also, as I did our ranking member of 

the committee, Congressman Gary Miller of the subcommittee for 

his hard work on this issue, along with our ranking member, Maxine Waters and, again, Mr. Barney Frank. 

As we know, Congressman Miller introduced the Administration’s most recent proposal to reform Section 8. H.R. 1999, The 

State and Local Flexibility Act of 2005, makes significant changes 

to the Housing Choice Voucher Program and gives greater flexibility to Housing Authorities to meet their local housing needs. 

According to the Administration, the introduction of this proposal 

represents another step in the process, and I hope, again, that we 

will be able to eventually reach some conclusions on the issue. 

With that, I am going to yield to the gentleman from Massachusetts. 

3

[The prepared statement of Hon. Robert W. Ney can be found on 

page 58 in the appendix.] 

Mr. FRANK. Thank you, Mr. Chairman. 

The ranking member of the subcommittee, the gentlewoman from 

California, Ms. Waters, is, of course, very interested in the subject, 

but what is relevant today is that she is not from California in general, but from Los Angeles, in which today they have a mayoral 

election. So she is on the way, but I think we all understand. Ms. 

Waters is in town now; she will be at the hearing, but the delay 

was because of the election. 

The chairman of the subcommittee has, in fact, done very useful 

work, as he said, with the roundtable he had, and I think we 

should make some things clear. I am very eager to participate in 

rationalizing the voucher system and making it less expensive by 

getting rid of duplication in dealing with what might not be the 

best set of incentives. 

Clearly, we ought to reform the system, but that ought to be 

driven by trying to make the system better. I have a problem here, 

as elsewhere, when we start the equation with the answer, when 

we posit a saving and then move the program around to reach that 

saving. We may or may not reach it. 

In that roundtable, I found it very useful, the one I was able to 

get to, because a number of very interesting suggestions came forward that we could use to save costs and make the program work 

better, and I look forward to that. 

But the bill goes far beyond that, and one thing in particular 

that troubles me on the bill—and I notice a number of the witnesses have mentioned it—is the absence of a funding formula. 

This is, after all, something about money, and it just is inconceivable to me that we can do this without putting the money in there. 

People are nervous about block granting. I have been here for a 

long time, and I have followed things before that. During my time 

here, I do not remember anyone ever proposing to block grant a 

program that he or she liked. People rarely propose block grants 

for things they really like. 

What we are afraid is the flexibility that the local authorities 

will be given. I want them to get appropriate flexibility; I have a 

lot of confidence in them, but I do not want them to get the kind 

of flexibility in which they are told, ‘‘Look, you can take care of 

about 90 percent or 85 percent of what you have been taking care 

of, and you get to pick who gets hurt.’’

I do not think the flexibility to pick victims is what we want. Is 

it ‘‘Sophie’s Choice’’ where you have to pick among your children? 

That is not what we should do, and there is no way to assure that 

that does not happen without us putting the funding in there. 

You cannot, I think, pass this as not only a blank check. A blank 

check would not bother me. I am afraid we are going to send you 

a check that will be marked insufficient funds, and that is the 

problem. So I really want to focus on that. 

In addition, I am concerned about the one provision of the bill 

which gives communities an effective veto over anybody bringing a 

Section 8 into their nice pleasant precincts. Obviously, it makes 

sense to say that the authority that has the Section 8 has to have 

some control over whether or not people take them outside or not, 

4

but there is a provision in this bill that gives the receiving community the right to veto poor people coming into their city. 

It is one of the great frustrating things that I encounter from 

time to time. I tried to get the Secretary to explain that one to me, 

and it goes on the list of things that he would not explain to me. 

I do not understand why we would do that at all. 

So, yes, we want to rationalize this, and I think the chairman of 

this subcommittee has set a good tone for us in doing it, but let’s 

not forget again that this needs to be about money. 

The final thing is this. As we change targeting and we give flexibility, I do believe we have to be careful about the effect on the 

homeless. I know the Secretary has said from time to time that one 

of his goals would be to get a less poor cohort of people into the 

program, and if we do that, then there needs to be some concern 

about what we do for the homeless. 

I have written to the Administration’s homeless coordinator to 

ask his evaluation of the effect this could have on the homeless, 

and, apparently, that is in the same place as Secretary Jackson’s 

explanation of how the piece would work because I have not gotten 

that one either. So I await that. 

But I appreciate the people who really do the tough job of trying 

to help these programs who are not coming here, and we all do 

want to work together. But, as I said, I do think the funding piece 

has to be there. It is simply unacceptable for us to send this out 

of here without dealing with that funding piece. 

Chairman NEY. I thank the gentleman. 

Opening statement? 

Mr. MILLER OF CALIFORNIA. Yes, very briefly. Thank you, Mr. 

Chairman. 

Mr. Frank, on the accepting community or receiving community, 

I am more than happy to work with you on that issue, and we discussed that in the last hearing. So that, at this point, should not 

be of a great concern because we will resolve that issue with you 

on there. 

I do not think there is a doubt that we need to do something 

about Section 8. We need to allow more flexibility and more local 

control. You have a program that is spiraling out of control as far 

as cost, and the amount of people using it is not spiraling with the 

cost. 

That is tremendously of concern to us basically because there is 

a limited amount of funds. HUD’s discretionary budget is just 

shrinking because Section 8 is just gobbling up more and more 

each year, yet the people that benefit are not increasing with it. 

I happen to trust local Housing Authorities. I think that we need 

to give them more control. I think we need to allow them more 

flexibility. I think there are certain parameters we need to place 

upon them from a Federal perspective, which we do. Ninety percent 

to 60 percent, I think, is reasonable. Ninety percent of the dollars 

have to go to 60 percent. 

If you want to take 90 percent of the dollars and give it to the 

bottom 30 percent, that is your call. If you do not want to change 

anything based on this bill in your local housing authority, you do 

not have to. So there is not a lot of mandate in this on local housing authorities. 

5

If you like most of the programs the way they are, the way the 

Federal Government mandates them and the way that HUD oversees them, leave them like they are. But, if you are progressive and 

your housing authority just says, ‘‘We need to make sure that we 

get the best bang for the buck locally,’’ I think the Federal Government should give you that authority, and that is what we are trying to do in this bill. 

Is this product I introduced the product we are going to actually 

send out of this committee? No, but I think it is a very good starting point, and I think we are willing to listen. We are willing to 

receive input. If somebody has a better idea, that is fine. I think 

we can work with that. 

Barney Frank is a friend of mine. He brought up the issue about 

a receiving, accepting community having the right to accept the 

voucher if they want to. Well, I think that is reasonable. I think 

we can work with him on that issue. 

But there are some things out there I think we need to reform, 

and I think there are certain things and certain people we need to 

trust, and we need to allow things to take place locally that we are 

not currently doing. So I am looking forward to the testimony. 

Thank you, Mr. Chairman. 

Chairman NEY. The gentlelady from California? 

Ms. WATERS. Thank you very much. 

Mr. Chairman, I came in a little late, and I am sorry for that, 

but I wanted to introduce Mr. Rudolph Montiel. Is it okay that I 

do that at this point? 

I am very pleased to have Mr. Rudolph Montiel, the executive director of the housing authority of the City of Los Angeles, join us 

as one of the witnesses for today’s Section 8 hearing. 

Mr. Montiel was selected as HACLA’s executive director after a 

national search. He began his work at HACLA in November 2004 

at HACLA. Mr. Montiel oversees an operation of over 1,000 employees, a yearly consolidated budget of about $875 million, and is 

a provider of housing assistance to cover over $50,000 Angeleno 

families. 

From 2001 until 2004, Mr. Montiel served as the president and 

CEO for the housing authority in El Paso, Texas, and, during his 

tenure there, the housing authority achieved the highest ranking 

from HUD among large housing authorities in the U.S. It was 

among the first four housing authorities in the country to successfully close a Hope VI Grant and successfully increase the stock of 

housing units through acquisition and remodernization and significantly increase the housing authority’s net assets. 

Mr. Montiel holds a bachelor’s degree and a master’s degree in 

civil engineering from the University of Texas at El Paso. He has 

also served as a program manager for IT Group and operations 

manager for Delphi Automotive Systems and a regional manager 

for General Motors, all of El Paso. 

Mr. Montiel has plunged into his job at HACLA with great energy and diligence and is working hard to effectively address the 

many challenges facing the Section 8 program participants and 

public housing residents in Los Angeles. 

Since his appointment, HACLA now is operating under a balanced budget, the Section 8 program is no longer overleased, and 

6

the organization is moving to develop a strategic plan for redevelopment of citywide large public housing developments in Los Angeles. 

So we are very pleased to have Mr. Montiel with us in Los Angeles and look forward to his testimony today. 

I thank you for allowing me the opportunity to introduce him. 

Mr. Chairman, this is a very long statement, and I think I am 

going to submit it for the record. 

Chairman NEY. Without objection. 

Ms. WATERS. I just want to thank you for holding this hearing. 

As many people in this room know, you have paid an awful lot of 

attention to Section 8. 

Chairman NEY. Thank you. 

Ms. WATERS. You were in my fair city where we held a hearing 

on Section 8, and I am very appreciate to the fact that you recognize that this is a very important program and we have to do it 

right. So the witnesses that you have here today will help us to understand the implications of the bill that is being offered and help 

us to understand how best to serve the people that most need housing assistance. 

So with that, I will yield back the balance of my time and submit 

my statement for the record. 

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

page 69 in the appendix.] 

Chairman NEY. I thank the gentlelady for her comments. 

The first hearing we ever had was out in your area, and then, 

prior to your arrival, I was also thanking you for your participation 

in the roundtable, which I thought was invaluable. 

Thank you. 

The gentleman from New Mexico, do you have a statement? 

The gentlelady from California? 

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

I want to also thank you and our ranking member for this hearing and for really helping us understand, as Congresswoman Waters said, the implications of this whole reform effort. 

I, quite frankly, believe that instead of calling this bill a reform 

bill, we should really call this bill what it is. I think it is a plan 

to put low-income and poor people out on the streets or yet another 

plan, as I have said earlier, to dismantle HUD and our Nation’s 

housing safety net. 

How about maybe we should call it let’s put one of our premier 

affordable assistance programs on the chopping block because, 

sadly, these suggested titles that I just mentioned are very accurate in their description of what is a terribly flawed bill that would 

have devastating impacts on our communities and especially the 

most vulnerable. 

We all know the basics of the bill. It block grants the voucher 

program, delinking it from the current voucher funding system in 

which allocations are based on the number of vouchers in use and 

on actual costs. 

It eliminates the current income system that targets the extremely low-income families; it eliminates the statutory requirements tying voucher rents to income and ensuring that rents are 

7

affordable; and it eliminates authority to provide enhanced voucher 

assistance to a tenant after 1 year, and the list goes on and on. 

So it also means that many extremely low-income people, who 

are disproportionately African Americans and Latinos, stand to lose 

their vouchers. 

So I think that this is morally wrong. I think this is just another 

way to put more people on the streets, and it erodes our housing 

safety net, and I think we have a moral obligation to work to assist 

low-income households, to increase the number of vouchers, and to 

help more people, not kick those who need the help to the curb. 

Thank you, Mr. Chairman. 

I yield the balance of my time. 

Chairman NEY. Thank you. 

The gentleman from Texas, Mr. Green? 

Mr. GREEN. Thank you, Mr. Chairman. 

Thank you, ranking member. 

Mr. Chairman, I do not quarrel with those who support flexibility. I assume that it is because of their life experiences that they 

have found good reason to support flexibility. I trust that they will 

not quarrel with me for being antithetical to flexibility because of 

my life experiences. 

Flexibility allowed colored water fountains. Flexibility allowed 

some to ride in the back of the bus. Flexibility is not always a good 

thing, and I fear unchecked, uncontrolled flexibility. I am concerned that in this legislation we are going to have the flexibility 

to segregate people and concentrate poverty. That kind of flexibility 

is invidious to the best interests of our country. 

I trust that I will hear words today that will give me reason to 

conclude otherwise, but I am concerned about flexibility. 

Thank you. 

I yield back the balance of my time. 

Chairman NEY. I thank the gentleman. 

Gentlelady? 

Mrs. MALONEY. I would just like to place my comments in the 

record that this proposal would be devastating to the City of New 

York. I would assume in many cities across the country the same 

thing. 

Already, tenants are coming to my office and telling me that they 

have received notice that they will not be able to have their vouchers or that the Sticky Voucher Program will be abolished, and their 

question is, ‘‘Where do we go?’’

I do not know about other localities, but the housing does not 

exist in New York City. We have a waiting list of over 900,000 people to get on public housing in New York, and, for every single 

voucher, we have a waiting list of thousands and thousands and 

thousands. 

The Sticky Voucher Program has been incredibly—the markupto-market program—successful with landlords and the community 

people and HUD working together to keep people in their homes. 

The question that I am beginning to hear is, ‘‘Where are we supposed to go?’’ The housing does not exist. There is no place for 

these people to go. 

Now what do you intend to do—cut back the vouchers, cut back 

the income qualifications, cut back the sticky vouchers, get rid of 

8

all these programs, and just build up homeless housing? I just do 

not know where we are going to go. 

You cannot build housing or sustain housing, affordable and lowincome housing, without a Federal role, and to abolish and cut 

back some of these very important programs would be absolutely 

devastating to the lives of millions of people across this country. I 

hope that this is just a trial balloon that will be changed and 

moved in a different direction. 

This is really problematic. Really I have no answers to people 

who are coming to me saying, ‘‘I have gotten a notice. I am not 

going to have my voucher anymore. Where do I go? Is there any 

housing available? Give me a list.’’

There is no list; there is no housing available, and so I am showing some of the desperate cries that I am hearing in the community 

that I represent. 

I yield back. 

[The prepared statement of Hon. Carolyn B. Maloney can be 

found on page 63 in the appendix.] 

Chairman NEY. Additional opening statements? 

Mr. Neugebauer? 

Mr. NEUGEBAUER. Thank you, Mr. Chairman, and thank you for 

having this hearing. 

I think ‘‘flexibility’’ is a good word because what we want to do 

is give our public housing authorities the flexibility to manage their 

business as they have more community knowledge than the Federal Government does, and so we give them the ability to look at 

what the needs are in that community. 

But the other thing about this bill—and, Mr. Chairman, I think 

it is important—is that there are provisions in this bill that also 

help transition people to homeownership and not keep them stuck 

on vouchers. One of the things that we do know about this country, 

it has a low savings rate, but one of the things that keeps that savings rate from really being embarrassing with the rest of the world 

is the equity buildup. Many Americans that have been able to access homeownership have been able to build up equity. What we 

also know is what homeownership does for our families. 

So I commend the chairman for this hearing. I think this is a 

good bill. I think it has some ability in there to give the people that 

are out managing these housing authorities the ability to decipher 

what is in the best need not for just a complex or a group, but for 

each individual recipient or resident that is participating in the 

housing programs. 

I look forward to the testimony of our guests today. 

Mr. MILLER OF CALIFORNIA. Will the gentleman yield? 

Mr. NEUGEBAUER. I yield back the balance of my time. 

Mr. MILLER OF CALIFORNIA. Would the gentleman yield for a second? 

Chairman NEY. Do you yield back the balance or you yield it to 

Mr. Miller? 

Mr. NEUGEBAUER. Yes, I will yield. Yes. 

Chairman NEY. Mr. Miller? 

Mr. MILLER OF CALIFORNIA. Thank you. 

It is interesting because I heard comments that it is unchecked, 

it is uncontrolled, people are receiving notices already about their 

9

vouchers being revoked. We have not done anything yet except 

talk. So, if people are receiving notices vouchers are being revoked, 

that is something unbeknownst to me and nothing to do with this 

bill. 

But this bill does not create an uncontrolled environment. We 

need to read the bill. It allows flexibility within certain parameters, 

and that is the key. We do set guidelines. We do set parameters. 

We say that 90 percent of the money has to go to those under 60 

percent of AMI. Currently, 75 percent has to go the people under 

30 percent of AMI. 

If the local agencies want to keep it at 75 percent to 30 percent, 

they can. We are just saying that we are going to allow flexibility, 

but you have to work within certain guidelines. There is a goal in 

here, is to try to help people get into homes of their own, allowing 

them to take vouchers and use them for that. 

We are saying that there needs to be a time limit, that they can 

establish a time limit if they want to, but the bill goes on to say 

that you cannot create a time limit of less than 5 years. We do not 

want people creating a time limit locally of 12 months or 24 

months. If you want to make it 10 years or 15 years, do what you 

want to do, but we are saying it cannot be less. 

So to say there is no parameters under which local PHAs have 

to work is unreasonable based on the language within the bill. 

Thank you. 

I yield back the balance of my time. 

Chairman NEY. I thank the gentleman. 

Mr. Miller from North Carolina? 

Mr. Scott from Georgia? 

Mr. SCOTT. Thank you very much, Mr. Chairman. 

First, let me ask for clarification, Mr. Chairman. Just for clarification, I think Mr. Frank had asked for a request for me. Is this 

the time for that, or is that later? 

Chairman NEY. That will be in a little bit. 

Mr. SCOTT. Okay. Thank you. 

Well, I look forward to that. Thank you. 

But let me just say this very quickly because I do not want to 

take from that time I have heard criticisms from some of my own 

housing authorities that H.R. 1999 would not address significant 

problems that now limit the success of Section 8 and creates new 

obstacles. 

We all know that Congress has changed the way that the voucher program is funded, and this has caused budgetary stress for 

public housing authorities during the last 3 years, including unanticipated shortfalls and inadequate reserves. 

Regardless of the outcome of H.R. 1999, this committee, I feel, 

must establish a renewal formula for Section 8 Voucher funding, 

and I look forward to hearing your testimony. 

Thank you, Mr. Chairman. 

Chairman NEY. Thank you. 

The gentleman from Missouri, Mr. Cleaver? 

Mr. CLEAVER. Chairman Ney, Ranking Member Waters, thank 

you for convening this hearing today on H.R. 1999, the so-called 

State and Local Housing Flexibility Act of 2005. I look forward to 

the testimony of the distinguished panelists here today. 

10

Although this is my first term in Congress, I am very familiar 

with public housing. As a child and teenager, I lived in public housing with my family for 7 years. We lived in public housing not because my parents were shiftless and lazy—my father worked two 

jobs—and neither did my parents share some casual desire for a 

handout, but because of necessity, we lived in housing that was 

subsidized by the Federal Government. 

You see, Mr. Chairman, prior to moving into public housing, my 

family lived in what was once a slave shanty. My three sisters, my 

mother, father, and I lived in that shack until I was 7 and in public 

housing until I was 14. And when we moved into public housing, 

we did so because it provided a more decent and environmentally 

safe place to live. 

As the richest and most technologically and militarily powerful 

Nation on this planet, I believe that the United States Government 

has a responsibility to make sure that its citizens are not homeless 

or living in squalor, particularly for those individuals who are 

struggling to get out of poverty, as did my family. 

Particularly I raise this issue: We are perhaps unintentionally 

throwing out this age-old term that if anybody is in need of some 

public assistance, they are trifling, and that is offensive to me and 

to many of the other individuals I know living in public housing. 

I do not read about public housing. The leadership did not tell 

me my position on public housing. I know men and women who live 

in public housing. I know their names. I know their children. Many 

of them grew up with me. I resent any kind of implication that my 

somebodiness is lessened because I needed to live in public housing. 

My opposition to H.R. 1999 is drawn from this philosophy and 

my personal experience in public housing. Among the many flawed 

provisions of this bill are those that greatly relax the statutory income targeting and rent affordability requirements. 

In addition, the bill would eliminate the Brook Amendment 

which limits public housing tenant payments to 30 percent of their 

income, which is how my family was able to live there. As a result, 

H.R. 1999 would have the most devastating impact on the poorest 

Americans. 

For example, under current law, 75 percent of new vouchers 

must go to extremely low-income families or those who earn less 

than 30 percent of the median income. The legislation would replace that requirement so that 90 percent of new vouchers would 

go to families below 60 percent of median income. 

I have a lot of stuff to say, and I will stuff it in as we go along. 

[The prepared statement of Hon. Emanual Cleaver can be found 

on page 60 in the appendix.] 

Thank you, Mr. Chairman. 

Chairman NEY. I just gave a tap, not a gavel, just a tap. That 

is all. 

Mr. SCOTT. I will finish it as we ask questions. 

Chairman NEY. I thank the gentleman. 

I want to thank the panel for being here today. 

Tarrah Leach is a Section 8 Housing Choice Voucher participant 

from Logan, Ohio. Ms. Leach was recently awarded a certificate of 

practical nursing by Hocking College. 

11

Congratulations. 

Currently, she is seeking a licensed practical nursing position in 

the medical field. So if anybody has a position, please feel free to 

look Ms. Leach up. 

Thank you for being here. 

Margery Turner is the director of Metropolitan Housing Community’s Policy Center at The Urban Institute, a nonprofit organization located here in Washington, D.C. The institute supports research in a wide variety of public policy issues. 

Jody Geese has been the executive director of the Belmont Metropolitan Housing Authority in Martins Ferry, Ohio, since 1998, 

having joined the authority as an accountant in 1989. Currently, 

she is the legislative chair of the Ohio Housing Authorities Conference. 

Mr. Montiel has been introduced by the gentlelady from California, Ms. Waters. 

Welcome, Mr. Montiel. 

And David Brightbill is the executive director of the WashingtonMorgan Counties Community Action, a nonprofit organization located in Mariette, Ohio. The agency seeks to reduce poverty and to 

help low-income people become self-sufficient. There are 52 community action agencies in Ohio cumulatively administering nearly 

$525 million worth of resources. This amount places Ohio second 

in the Nation in the amount of resources developed by its community action network. 

Jon Gutzmann has been the executive director of the Saint Paul 

Public Housing Agency since 1987. The agency owns 4,300 units of 

federally assisted housing, administers another 4,000 in housing 

vouchers, both of which provide housing to over 20,000 residents. 

It has had an annual operating budget of $61 million and has received HUD’s high performer rating each year under the Public 

Management Assessment Program. 

Welcome to all the distinguished panelists. 

Ms. Leach, we will start with you. 

Thank you. 

STATEMENT OF TARRAH LEACH, SECTION 8 HOUSING CHOICE 

VOUCHER PARTICIPANT, LOGAN, OHIO 

Ms. LEACH. Mr. Chairman, my name is Tarrah J. Leach. I am 

a recipient of Section 8 housing assistance in Hocking County, 

Ohio. I am a divorced mother of three children and now a licensed 

practical nurse. 

It has taken me a lot to get where I am today. I am very proud 

of my accomplishments, but let me tell you how I got here. 

I lived with my grandparents most of my life because my mother 

had her own difficulties. 

At the age of 16, I went to stay with my sister in Lancaster, 

Ohio, for the summer. I met a man named James. My sister moved 

back to Columbus, Ohio, before the summer was over, but I decided 

to stay. So, at the age of 16, I was by myself with my boyfriend. 

We stayed with various people that we could because we did not 

have a permanent place to live. I found out that I was pregnant. 

I quit school, and we got married. 

12

We ended up in a homeless shelter in Lancaster, Ohio. The worst 

part of it all was that James was abusive to me. 

We got on Metropolitan Housing in Lancaster, Ohio, in December 

1988 after waiting a year. We got a little apartment in Lancaster, 

so I thought things would get better. I was wrong, and the abuse 

got worse. I had another daughter at the age of 18. 

But I finally got the courage to leave him and went to stay at 

a domestic violence shelter for women and got divorced. 

I met another man shortly thereafter. David and I moved to 

Logan, Ohio, into a little apartment. I got pregnant again at age 

20. I got married to David; he lost his job, so we decided to apply 

for HUD in Hocking County, Ohio, in 2001. 

I decided when I was pregnant with my third daughter that I at 

least wanted to get my GED. I did not want my kids to be able to 

say that I never graduated from high school. So my third daughter 

was born in October 2001, and my GED was issued December 12 

of 2001. That was a very big accomplishment. 

David and I moved to a three-bedroom trailer in Logan, Ohio. We 

had various problems throughout our relationship. He would not 

keep a job. So I worked. 

Well, after having 3 kids, I never thought I would go to college, 

but my GED teacher at the Volunteers of America had told me that 

I scored very high on my GED and I should go to college. So I got 

the courage up and I decided I would go to school to become a 

nurse. 

So in June of 2002, at the age of 21 and after not being in school 

since I was 16, I stepped foot in college. My husband was not behind me to say the least. We ended up divorcing. But, after starting college, I was not going to let anything hold me back anymore. 

I went though 2 years of nursing school, raised three kids by myself, and worked a part-time job at Wal-Mart to accomplish my 

goals. Yes, I did have to sacrifice time away from my kids by working and going to school, but it was all for them. 

Throughout my 2 years of nursing school, I maintained a 3.8 

GPA, made the dean’s list every quarter, and received various 

other awards. I graduated fourth in my class with honors. 

HUD has helped me to achieve so many of my goals. If it had 

not been for HUD, I, as a divorced mother, would not have been 

able to put a roof over my children’s heads. I would not have had 

the time to devote to school to better my education for myself and 

my children. My children would have suffered more because I 

would have had to spend more time away from them just to make 

ends meet. 

I know I am not the only divorced mother out there with children 

that has goals and sees them slowly fade away because of the 

struggles that we go through, from not receiving child support to 

having to work all the time or to have the Government want to 

take programs away. 

I am living proof that one person can make a difference and 

make their life better, given the support and opportunity. The Government teaches us to better ourselves and to get off HUD and welfare, but how can you better yourself to get off of it if you take it 

away before giving the people the chance to try and succeed as I 

have? 

13

When I got my new job, I reported my changes to the Hocking 

Metropolitan Housing Authority. With my current income, they tell 

me that I am 46 percent of the median income for our county, but 

with the low fair market rent for our area, I would no longer be 

receiving rental assistance effective July 1 of 2005. 

I am looking forward to standing on my own two feet after all 

my struggles, but my success did not happen overnight. It has 

taken me over 7 years to achieve some of my goals. I am a very 

motivated person, but someone a little less sure of his or her goals 

would take a lot longer to get to the place that I am today. I would 

like to see others be able to fulfill their goals even if it takes a long 

time. 

While I am very grateful for the assistance, I am worried that 

others will not have the opportunity to improve their life with the 

same support that I received. It is my understanding that when I 

go off the voucher program, the voucher will not be reissued because of budget cuts in the Section 8 program, which is unfair to 

other people who have waited so long just to get the assistance and 

now to be told, ‘‘Sorry. You waited all that time for nothing because 

we just do not have it anymore.’’

Thank you for this opportunity to speak to the committee. 

[The prepared statement of Tarrah Leach can be found on page 

127 in the appendix.] 

Chairman NEY. Thank you for your testimony. 

Now we will move on to Ms. Turner. 

STATEMENT OF MARGERY AUSTIN TURNER, DIRECTOR, METROPOLITAN HOUSING AND COMMUNITIES POLICY CENTER, 

THE URBAN INSTITUTE 

Ms. TURNER. Good afternoon. 

I direct The Urban Institute Center on Metropolitan Housing and 

Communities and conduct research on Federal housing policy and 

its impacts on families and neighborhoods. I appreciate the opportunity to testify today on the Administration’s proposal to reform 

the Federal Housing Voucher Program. 

The Housing Choice Voucher Program plays a critical role in our 

nation’s housing policy. One of its greatest strengths is that it allows families to choose the type of housing and the neighborhood 

that best meets their needs. 

Historically, many other low-income housing programs have exacerbated the geographic concentration of poor families, especially 

minority families, in high-poverty and distressed neighborhoods. In 

contrast, vouchers have generally allowed assisted families to disperse more widely and to live in lower-poverty, less-segregated 

neighborhoods of their choice. 

Social science research shows clearly that living in a distressed 

high-poverty neighborhood undermines the well-being of families 

and the long-term life chances of their kids. When families are able 

to escape from distressed neighborhoods and move to healthier 

communities, their lives improve measurably. 

Rigorous research confirms that the opportunity to move to a 

healthy, low-poverty neighborhood can make families safer and 

more secure. It contributes to better health; it provides access to 

14

well-performing schools; and it may ultimately lead to higher employment and higher earnings. 

The proposed State and Local Housing Flexibility Act threatens 

to restrict choice for voucher families. Participants would not be 

able to use their housing vouchers to move from one jurisdiction to 

another unless the administering housing agencies had a standing 

agreement and the receiving jurisdiction agreed to have them move 

in. 

In addition, moves within a jurisdiction are likely to be restricted 

because the Administration’s proposal would create very strong incentives for local housing agencies to set their payment standards 

lower in order to serve the same number of families. Lower payment standards will make vouchers less competitive in the rental 

market, particularly in healthy neighborhoods in the rental market 

and, therefore, could severely limit neighborhood choice. 

In effect, local housing agencies would be forced to choose between serving more families in higher-poverty, distressed neighborhoods or fewer families in healthy, opportunity-rich neighborhoods. 

The Administration’s proposal also creates very strong financial 

pressures for local housing agencies to use their scarce resources 

to serve more families at higher income levels rather than targeting assistance to extremely low-income families. 

Again, there is strong social science research evidence suggesting 

that targeting vouchers to very low-income families may yield benefits that go way beyond housing per se, contributing to our country’s larger policy goals of work and self-sufficiency. 

Finally, the Administration’s proposal would allow local housing 

agencies to experiment with alternative subsidy formulas and even 

impose time limits on housing assistance. But there is no solid research evidence here to guide local housing agencies in designing 

these new formulas that would encourage work without sacrificing 

access to affordable housing in safe and opportunity-rich neighborhoods. 

The current voucher program certainly does not work perfectly, 

and there is a growing body of experience from innovative agencies 

around the country that point to promising strategies for addressing these shortcomings with the program. 

It is conceivable that some local housing agencies might be able 

to use the new flexibility in this proposal to implement one or more 

of these promising strategies, but the emphasis on cost containment and on local autonomy actually create the opposite incentives, 

moving away from the strategies that we know to be the most 

promising for strengthening the program. 

So, in summary, the proposed State and Local Housing Flexibility Act moves Federal housing policy in the wrong direction, 

trapping families in neighborhoods that are poor and distressed 

and perpetuating concentrated poverty and isolation from economic 

opportunity. 

Thank you. 

[The prepared statement of Margery Turner can be found on 

page 163 in the appendix.] 

Chairman NEY. Well, thank you for your testimony. 

I do not normally do this, but just one clarification before we 

move on, Ms. Geese. 

15

We were all three trying to find it up here. You had mentioned 

lower payment standards. Is that in your testimony? 

Ms. TURNER. In mine? 

Chairman NEY. Yes. 

Ms. TURNER. The flexibility that the bill would allow, given the 

funding constraints which are getting tighter all the time, really 

would encourage housing authorities to provide a shallower subsidy. 

Chairman NEY. Lower payment standards. 

Oh, thank you. 

Ms. Geese? 

STATEMENT OF JODY GEESE, EXECUTIVE DIRECTOR, BELMONT METROPOLITAN HOUSING AUTHORITY, MARTINS 

FERRY, OHIO 

Ms. GEESE. Chairman Ney, Ranking Member Waters, members 

of the subcommittee, I am the executive director of the Belmont 

Metropolitan Housing Authority—Am I better there? Can you hear 

me now? Could not resist—serving Belmont County, Ohio, the 

proud home of Congressman Bob Ney. I greatly appreciate the opportunity to testify on H.R. 1999. 

This bill has been introduced to better assist our low-income families obtain decent, safe, and affordable housing, and to promote 

self-sufficiency, just as QHWRA was in 1998. 

My issues are not with flexibility and local decisionmaking, but, 

in an environment of adequate and dependable funding, they would 

produce very different results, the needing of flexibility to pay the 

bills. There are many housing authorities that could do great 

things with flexibility, but, as the saying goes, you cannot make a 

silk purse out of a sow’s ear. 

Being forced to make the hard choices that negatively impact the 

less fortunate we serve is not one I relish, and I agree with Congressman Shays; HUD is passing the buck. This proposal is about 

dollars, and I do not call this flexibility. I call this no other choice. 

While I appreciate the difficult task this subcommittee is faced 

with, I still advocate for a unit-based voucher program reflective of 

actual costs and adequate funding and sensible rulemaking for our 

public housing programs. Costs have stabilized and are no longer 

spiraling out of control. 

The income-targeting requirements in this bill not only paint a 

dismal picture for the very poor, but turn back the clock on the 

hard work of Congress. If the desire is to allow families between 

30 percent and 40 percent of median income a piece of the pie, then 

change the targeting requirements to reflect that. But clearly, the 

proposed targeting levels are extreme, but that is because this proposal is about dollars, not reform. 

I am also concerned with the apparent lack of concern this proposal gives to the large number of children housed in a nonelderly, 

nondisabled household. There will always be families that need our 

assistance, and there are many working poor that have already 

achieved the best job or financial situation available to them that 

could be hurt by term limitations. 

Interestingly, this bill provides up to 60 days of funding for vacant project-based vouchers to private sector properties, while HUD 

16

provides no vacancy provision for public housing, deleting the longstanding and modest 3 percent public housing vacancy allowance 

from the negotiated rule. 

The GAO felt a formal study was needed on the proposed rentto-termination method. Concerns for the impact on tenants and the 

potential cost and burden placed on housing authorities and property owners were cited. They also felt the study was necessary to 

provide Congress with needed decision-making information. 

While inspection needs vary by community, I am concerned that 

the administrative funding will ultimately get tied to the proposed 

inspection requirements. Belmont Housing Authority has older 

housing stock with many mom-and-pop properties that need more 

frequent inspection. 

Requiring 50 percent of properties to be inspected annually could 

still provide for quality assurance while allowing agencies whose 

properties need to be inspected more frequently the funding to do 

them. 

Another approach would be to eliminate inspections on tax credit 

or other federally subsidized properties that already have mandated inspections. This would result in all units being inspected annually, reduce administrative burden, and avoid duplicate inspections. 

While great efforts are focused on the voucher program, public 

housing is being greatly compromised. The proposed voucher targeting will shift the very poor to public housing, and the less poor 

will once again have the greatest access to vouchers and rental 

choices. 

Public housing operating and modernization funds have been 

greatly reduced. Many housing authorities fund security out of 

their capital fund dollars and may be forced to choose between security and a new roof. My fear is that our public housing stock will 

deteriorate, creating blight, increasing crime, again turning back 

that clock. 

The study on the Moving to Work Demonstration indicated more 

time was needed to accurately measure its success, yet HUD proposes to make this a permanent program, while only authorizing 

the voucher program—with proven success—for the next 5 years. 

I would suggest the opposite: retain the successful voucher program’s permanent status and continue to expand, study and monitor the Moving to Work demonstration over the next 5 years. 

In conclusion, I reiterate. Everything is relative to funding. Flexibility and local controls are great concepts in a good funding arena 

and necessary in a bad one, but the outcomes will be very different 

under each scenario. 

Again, thank you for the opportunity to express my views. 

[The prepared statement of Jody Geese can be found on page 92 

in the appendix.] 

Chairman NEY. Thank you. 

Mr. Montiel? 

17

STATEMENT OF RUDOLF MONTIEL, EXECUTIVE DIRECTOR, 

CITY OF LOS ANGELES HOUSING AUTHORITY 

Mr. MONTIEL. Chairman Ney, Ranking Member Waters, honorable members of the committee, I am Rudolf Montiel, the executive 

director of the Housing Authority of the City of Los Angeles. 

I am happy to report that HACLA is making great progress in 

fiscal stewardship, operational efficiency, and in bringing a culture 

of transparency and compliance to our organization. 

I would furthermore like to recognize the support of our congressional delegation led by Ranking Member Waters, our partners at 

HUD, the Los Angeles City leadership, and our HACLA chairperson and board for the fine work that took place in 2004 to keep 

HACLA out of receivership. 

Today, I would like to frame my remarks on the situation we live 

in Los Angeles. A brief history will show us some highlights. 

Specifically, HACLA is no longer overleased. As a result, no families will be cut from the Section 8 program this year. 

Secondly, gang action and high rates of criminal activity continue 

to plague our public housing developments in Los Angeles. 

Third, despite wonderful redevelopment examples within the 

City of Los Angeles, we still find that the majority of our large citywide public housing developments have not been redeveloped. 

Fourth, little progress has been made in the past decade on significantly decreasing the wait lists of our public housing and Section 8 programs. Today, over 90,000 families are on the Section 8 

wait list; over 24,000 families, on the public housing wait list. 

Given these facts, it is with great interest that we have analyzed 

H.R. 1999 and offer the following comments on this sweeping piece 

of legislation. 

Specifically, there is great value in reduced administrative requirements for rent calculations, inspections, and recertification. 

We believe that the cost that the housing authority will not undertake in added inspections, et cetera, can actually flow to helping 

more families, and that is a good aspect to the proposed legislation. 

Conversely, on income targeting, I do not concur with the structural shift in income-targeting provisions of this bill. Simply put, 

it will hurt the poorest of the poor. The income-targeting provisions 

of the current program have allowed families from our Watts and 

our Boyle Heights areas of the city to move to more middle-class 

areas, such as San Fernando, where there are better schools, better 

job opportunities, and better opportunities for self-sufficiency. 

As far as public housing funding is concerned, the funding simply 

is not representative of what it takes to run public housing today. 

We have many more regulatory constraints than does the private 

marketplace or even the Low-Income Housing Tax Credit Program, 

which is the number one producer today of affordable housing in 

this country. 

As far as the public housing capital fund is concerned, there simply has not been enough investment in our public housing stock to 

keep the public housing in a safe, decent condition. As a result, 

public housing tends to have a stigma associated with it simply because of the appearance that it has in our neighborhoods. 

We in Los Angeles are working very hard to develop a strategic 

plan to redevelop our public housing, and one of the positive asVerDate 0ct 09 2002 14:59 Jan 19, 2006 Jkt 000000 PO 00000 Frm 00023 Fmt 6633 Sfmt 6633 G:\DOCS\109.30 RODNEY
18

pects to this legislation is the potential fungibility that we could 

have in diverting funds from one program to public housing to redevelop our public housing stock, which is vitally necessary in our 

large public housing developments, such as Nickerson Gardens, Ramona Gardens, Jordan Downs, Imperial Courts, et cetera. 

In addition, I would like to add for the record some provisions 

that we at the Housing Authority of Los Angeles believe would be 

extremely helpful and would be of mutual benefit to HUD and to 

the housing authorities, and that is the strengthening of penalties 

and permanent debarment for fraud violations of participants or 

landlords and also for providing a more automated, easily accessible system for third-party income verification on a national basis 

that would allow us to quickly determine a family’s eligibility at a 

very low cost and with a high degree of accuracy. 

This sweeping legislation has good points and bad points. I have 

tried to outline those that are most relevant to the population that 

we serve in Los Angeles. 

It has been a great honor to address you today. 

[The prepared statement of Rudolf Montiel can be found on page 

132 in the appendix.] 

Chairman NEY. Well, I thank the gentleman for his testimony. 

Mr. MILLER OF CALIFORNIA. Mr. Chairman, can I ask that L.A. 

County’s written testimony be included in the record? 

Chairman NEY. Without objection. 

Mr. MILLER OF CALIFORNIA. Thank you. 

Chairman NEY. Mr. Brightbill? 

STATEMENT OF DAVID BRIGHTBILL, EXECUTIVE DIRECTOR, 

WASHINGTON-MORGAN COUNTIES COMMUNITY ACTION 

AGENCY, MARIETTA, OHIO 

Mr. BRIGHTBILL. Good afternoon. 

My name is David Brightbill. I am the executive director of 

Washington-Morgan Counties Community Action, a private nonprofit corporation located in Southeastern Ohio. The agency has 

been in business since 1967 and operates a variety of programs designed to help low-and moderate-income families. 

In 1988, the City of Marietta received funding for 50 vouchers 

and subcontracted with our agency to provide the management for 

this new program. We currently manage 356 vouchers. 

The Housing Voucher Choice Program has had a significant and 

important impact on our community throughout the years. It has 

provided tenants with the resources to afford decent, safe, and sanitary housing, and landlords with the incentive to provide quality 

housing. 

The fact that we have 168 active landlords and over 300 have 

participated in the program indicates the level of local acceptance 

of the program. 

In reviewing The State and Local Housing Flexibility Act of 

2005, the proposed changes that we have particular interest in are 

income-targeting guidelines. Today, as has been mentioned, 75 percent of the vouchers must go to families with incomes below 30 percent of area median income. 

H.R. 1999 would require that at least 90 percent of the vouchers 

go to families with incomes up to 60 percent of the median. This 

19

would have the effect of allowing housing authorities to reduce the 

HAP, consequently reducing the Federal funds necessary to support the same number of vouchers. 

This change seems to me to be getting away from the purpose 

of the program, which is to provide safe, affordable housing for 

those families with the most significant housing cost burdens. Until 

there are more resources available, I feel we should continue by national policy directing limited funds to individuals and families 

with the greatest need. 

Allowing public housing agencies to impose time limits on voucher assistance, this would, if used by the housing authorities, set 

limits for the first time on how long families could participate in 

the program. The change would obviously have the effect of increasing the number of total families served, but often at the expense of families that are working, but unable to earn sufficient income to pay the full cost of their housing. 

What is gained when we move one family on to the program and 

at the same time remove a family, even though they do not have 

the income to maintain needed housing? Investing in adequate job 

training and support services, expanding the Family Self-Sufficiency Program would be a better way to get additional turnover. 

The goal ought to be having the family earning enough money to 

take care of their needs, not just getting them off the rolls. 

Allowing housing authorities to change how rents are calculated 

so that rents may no longer be a percentage of resident income, 

this again would allow housing authorities to reduce their HAPs, 

decrease the cost of serving the same number of families. 

Given the current turmoil in funding, we can serve about 30 

vouchers less than we are actually authorized for because of funding. With the need to somehow make dollars stretch, it will be very 

tempting to impose tenant payments that shift the burden to the 

client. 

Organizations such as ours will be faced with the difficult decision of setting higher tenant rents to help balance the budget when 

we know that for families we serve. Even minimal increases are 

hard on them, let alone the kinds of increases that could be made 

under the proposed new law. 

Voucher portability, the current system has not been a problem 

for us. While once in a while, we are faced with rents much higher 

than normal, we have been able to deal with those within the existing law. The primary purpose of the proposed policy change, it 

seems to me, is another way of removing families from the program 

and, therefore, is contrary to the best interests of the families we 

serve. 

I would suggest that HUD create some type of central pool of 

funds which would provide local housing authorities with the ability when port rent is significantly higher than local rent to apply 

for funds to make up the difference. 

After January 1, 2009, voucher policy changes could also apply 

to new elderly and disabled families at the discretion of the local 

housing authority. About 57 percent of our current families are in 

that category. 

If the local housing authority does not make the decision to exempt elderly and disabled families from these changes, then they 

20

are applicable. Once again, people who are the least able to afford 

to pay more for housing will have an additional burden placed on 

them. Time limits would remove people who, in most cases, have 

no real way to earn additional income, so they will be faced with 

homelessness or an incredible rent burden. 

The enhanced vouchers, we currently do not have enhanced 

vouchers, but in a tight housing market, it seems to me that this 

would create a problem. Housing projects are taken to market with 

a corresponding increase in rent, and if the enhanced voucher is 

available for only 1 year, then the family could easily be faced with 

the necessity to move and no adequate place to go. 

The community loses both ways. Affordable housing is lost, and 

families may now have no place to go that is affordable. 

The voucher program has served the affordable housing needs of 

this country for years. At least now in our area, it is a great blend 

of public and private interests. 

The housing is affordable to clients. They are not forced to move 

from one home to another because they get behind in the rent. The 

Family Self-Sufficiency Program provides help and guidance in 

moving toward self-sufficiency. Private landlords are willing to invest in and maintain property because they select their own tenants, yet are guaranteed a portion of the rent will be paid every 

month and on time. 

While anything can be made better, I encourage the subcommittee to carefully consider the proposed changes and to reject 

those that do not improve the program. Costs should not be shifted 

to tenants who are not in the position to be able to afford the additional financial burdens. 

Thank you for the opportunity to appear today. 

[The prepared statement of David Brightbill can be found on 

page 71 in the appendix.] 

Chairman NEY. Well, thank you. 

I also wanted to note at this time with my colleagues with Washington-Morgan Counties, Morgan County also had hit near 24 percent unemployment not too long ago and is still reeling, so these 

are counties where people are really having, I mean, a lot of problems, which happens across the Nation, too. I just wanted to point 

that out. 

Thank you. 

STATEMENT OF JON GUTZMANN, EXECUTIVE DIRECTOR, 

SAINT PAUL PUBLIC HOUSING AGENCY, SAINT PAUL, MINNESOTA 

Mr. GUTZMANN. Mr. Chairman and members, I am Jon 

Gutzmann, director of Public Housing in St. Paul. I have been 

there 18 years. I have worked for and with residents for the past 

25. 

Industry groups are just beginning to look at these bills. I am 

glad we have a bill, but I would like to work with everyone in this 

room to seek consensus on amendments that would preserve affordability, enhance decisionmaking at the local level, and ensure adequate and predictable funding. I have to mention funding because 

we cannot look at the bill in isolation. 

21

Despite all of our concerted efforts, our budget recommendations 

before Congress have not had much success. We lost the Drug 

Elimination Program years ago. The voucher program has already 

been transformed into a dollar-based budget. 

Because of the deep funding cuts for the last 3 years, I have already laid off 10 percent of our staff. We have reduced voucher payments to owners by 7 percent. We have scrimped on capital improvement. We have already sold off excess land to Habitat for Humanity. This is not a financial operating picture that can be sustained by even the most creative housing authority. 

I also for the record reject the Administration’s contention that 

PHAs are to blame or just need to work harder to overcome these 

funding shortfalls. On the contrary, our PHA essentially invented 

the solution to last year’s voucher crises by stretching the allowable 

rules under the existing program. The current voucher program is 

not nimble enough to allow PHAs to appropriately respond to the 

ups and downs of the rental housing market. Some reform is necessary. 

I also disagree with the blame-the-tenant sentiments that were 

expressed before this body. We have over 20 years of data at the 

Saint Paul Public Housing Authority that confirms that residents 

in public housing and voucher programs stay on average 6 years, 

that they are trying to move up and out and do all the right things. 

But I also want to importantly point out that we should remember the historical bargain struck between Congress and PHAs 

under the Housing Act of 1937, and that is that Congress would 

provide the necessary funding, PHAs would house low-and moderate-income people, and the part Congress keeps forgetting is to 

provide the funding. 

At Saint Paul, the average cost to run a public housing unit is about $600 a month. The average rent based on the income formula is about $200 a month. We house people at 20 percent of 

AMI. If we do not get that $400 a month from HUD, the PHA cannot remain viable. 

Congress does not do its end of the bargain when subsidy levels 

are reduced, especially when Congress prevents anything to do on 

the income side, and, of course, that is the tricky part. Do not get 

me wrong; I want to keep the historical bargain and house low-and 

moderate-income people, but this has to pencil out at the PHA 

level. 

I agree with Sheila Crowley that public housing and the voucher 

programs are not broken, their costs have not spiraled out of control, and that this Nation can afford to keep this deeply affordable 

safety net program. We can afford it if we want, but we do not 

seem to want to too much as a country. 

At the end of the day, my colleagues and I are left to still balance 

the books and to fulfill our mission. 

So, to reiterate, public housing and the voucher program are already insufficiently funded today, despite our best collective efforts, 

and what is on the horizon looks even worse. These realities have 

forced PHAs to already make difficult decisions. 

If more decisions have to be made about bad money, shouldn’t 

those decisions be made at the local PHA level and not in Washington? Shouldn’t the painful decision that a New York State housVerDate 0ct 09 2002 14:59 Jan 19, 2006 Jkt 000000 PO 00000 Frm 00027 Fmt 6633 Sfmt 6633 G:\DOCS\109.30 RODNEY
22

ing authority might have to face in 1 year about losing 40 percent 

of their funding occur at that New York State housing authority? 

If they had some consideration on the income side with tenant 

blessings, shouldn’t that be allowed to happen? If we cannot improve the income portion of the equation, then Congress must. That 

is the historical bargain. 

Regarding the bill, I think on the flexible voucher program, it 

makes some sense to have PHAs set subsidy levels at their level, 

at their market, again, to allow us to control the costs. I do not 

think it makes any sense—and I would work against—creating 

term limits, curtailing enhanced vouchers, changing the income 

targeting, and restricting portability. Those provisions should be 

stricken. Of course, the bill needs a predictable funding formula. 

On the rent reform side, there are some very good things. The 

bill does keep Brook in, and it allows for two others that I like, creation of flat-tier grant systems and the percent of growth income, 

but the flat rent should be stricken because it could produce results 

that are not affordable. 

Finally, I like the idea of expanding the MTW, Moving to Work, 

sites, but probably only to about an additional 100 or 200. I think 

the industry groups that are working at MTW sites are already 

demonstrating how they can preserve affordability while allowing 

local flexibility. 

Thank you. 

[The prepared statement of Jon Gutzmann can be found on page 

113 in the appendix.] 

Mr. MILLER OF CALIFORNIA. [Presiding.] Thank you very much. 

You all need to understand, first of all, we are not the appropriators. We do not establish funding levels. We wish we did sometimes. It might make life a lot easier for us, but we do not. 

Mr. Montiel, I guess my main question is—I enjoyed your testimony—you understand your current situation on Government 

housing right now, Section 8—what does this bill mandate that you 

do that changes that? 

Mr. MONTIEL. Well, Mr. Miller, as far as income targeting is concerned, I understand that it does not mandate income targeting. 

Mr. MILLER OF CALIFORNIA. It does not mandate it at all. 

Mr. MONTIEL. Correct. The concern there is that you may have 

good stewardship and the boards of today believe that it is too important to house people at 30 percent of AMI. 

Mr. MILLER OF CALIFORNIA. But you can currently still do that. 

Mr. MONTIEL. We can currently still do that. 

Mr. MILLER OF CALIFORNIA. Even under this bill, you can still do 

that. In fact, you can go and you can say, ‘‘We want to put 75 percent to the bottom 20 percent.’’

Then it is not the language in the bill that concerns you as much 

as it is how it might be applied by the PHAs. 

Mr. MONTIEL. It might be applied by a PHA in the future where 

a board might move to help people with a shallower subsidy as a 

result of pressure from a landlord group that says, ‘‘Hey, let’s cut 

the tenant and not cut our rent.’’

Mr. MILLER OF CALIFORNIA. See, what I keep getting from everybody as their criticism of the bill is it is as if this bill is mandating 

that you do something. It does not mandate that you go 90 percent 

23

to the 60 percent level. It says, ‘‘You must at least give 90 percent 

to the people below 60 percent.’’

It allows discretion. If you want to take 90 percent to the people 

below 20 percent, you can do that. It allows a tremendous amount 

of discretion at the local level that we currently do not allow, and 

that is what we are trying to do. 

We are trying to say, ‘‘We honestly believe in most cases that 

local public housing authorities understand local needs and local 

people and local situations better than we might understand them 

here in Washington.’’

The criticism I keep hearing is that it is as if the bill mandates 

you do something, and that is bothersome to me. 

This bill is going to be modified. There is no doubt about it. We 

are going to ingest this bill to try to come out with a good product, 

but you basically think that the current program has been successful in providing decent and safe housing to families? Is that what 

you are telling me? If not, why not? 

Mr. MONTIEL. I believe that the floor, the safety net that the current program provides is vitally important to help families move 

from concentrated poverty areas to areas of middle income that 

provide better educational opportunities, better job opportunities to 

continue the process of family self-sufficiency. 

Mr. MILLER OF CALIFORNIA. And you can still do that when this 

bill is in place. 

Mr. MONTIEL. Under the new legislation, that would be possible, 

but the flexibility might in the future not be used to the benefit of 

tenants. 

Mr. MILLER OF CALIFORNIA. So it is that the unknown is what 

some future public housing authority might do at a local level? 

Mr. MONTIEL. Correct. 

Mr. MILLER OF CALIFORNIA. Okay. The problem that HUD is 

having, experiencing today, is this program has grown to 62 percent of their budget. In the near future, they say it will be somewhere in the 70th percentile in the next few years, and yet the 

growth has not occurred in the amount of people benefiting from 

the program. The growth has occurred in the cost of the program, 

and that is their main concern, is that they want to create more 

accountability at the local level where the dollars are being spent. 

If you look at the growth in a discretionary program, Section 8 

has grown at a greater percentage than most any other program 

we have, and that is what we are trying to do. 

Ma’am, would you like to respond? Maybe you have a comment. 

I do not want you to fall out of the chair there. So we want to see 

you participate, too. 

Ms. GEESE. I get a little overly excited. 

Mr. MILLER OF CALIFORNIA. I understand. 

Ms. GEESE. The one thing that is not spelled out in this proposal, 

sir, is the performance standards, and if you look at HUD’s last 

proposal last year, the performance standards were closely tied to 

HUD’s priorities and took away any real flexibility a housing authority had. 

Now you look at this environment and you do like they did last 

year and you tell us that we are to maintain 97 percent lease-up 

and that is our performance standards where we are going to be 

24

graded, I can tell you right now we are going to serve less poor people or we are going to lose our program. 

Not having the performance standards spelled out is a horrible 

scenario for housing authorities. We do not know how we are being 

graded; we do not know how we are being assessed; and that is another fear. Our fear on flexibility is not just the housing authorities 

are not going to do the right thing with it. It is that we are not 

going to have the opportunity to do the right thing with it when 

HUD sets performance standards that we cannot meet. 

Mr. MILLER OF CALIFORNIA. What about the section, though, 

where we say, ‘‘Let’s change it. If the person goes out and finds a 

house, move in today, and we will inspect it after the fact,’’ instead 

of the way it is today. Today, you have to go get an inspection 

when somebody wants to go and get into a home. We are saying, 

‘‘Let’s help people get in a home. If you find a home you want, come 

in; get your voucher;have a given amount of time to inspect it. Do 

you think that is beneficial? 

Ms. GEESE. I think that would be beneficial to some housing authorities. That would be what they would choose. It would not be 

beneficial to me. We are smaller. We turn over faster. 

I look in Belmont with older housing stock, and our concerns are 

lead-based paint and other safety issues. 

Mr. MILLER OF CALIFORNIA. But we do not mandate that they 

have to move in. We are saying that they can after this bill is enacted. So we are trying to help you put people in homes. 

Ms. GEESE. We understand that, sir, but, typically, the ultimate 

fear is all this flexibility that does not work for every agency will 

ultimately get tied to the administrative funding because they are 

going to say, ‘‘You do not have to do that. You have chosen to do 

that.’’

We need to do some of these things. I have housing stock that 

you want me to go in regularly. I can see the tax credit properties, 

other federally subsidized properties. As I stated, they already have 

inspection. There is no reason to duplicate people’s work. 

If he does not need to inspect his properties that often, then I 

agree he should not have to. I am not imposing Belmont on another 

authority. So I think there are many ways that flexibility and 

choices are good. But I do not think it is any accident that the performance measures are not included in this bill. 

Mr. MILLER OF CALIFORNIA. But, in closing, it does not mandate 

that you cannot inspect as often as you want. Am I correct? 

Ms. GEESE. Naturally, but, again, if I do not have the funds to 

pay my inspector to go out and I need to do it, what have we accomplished? 

Mr. MILLER OF CALIFORNIA. I appreciate that, but understand we 

are not in any way trying to limit funding in this bill. That is not 

our goal at all. There is nothing in here that says you are not going 

to have funds, nothing in here that says we are going to change 

your funding. There is nothing that does that. 

So I understand your concerns, but I am saying I am dealing 

with a piece of legislation here, and I have to deal specifically with 

it. I cannot deal with the appropriators, and we are saying that 

this does not mandate anything, it does not put you in any harm’s 

way in my opinion. 

25

Ms. Waters? 

Ms. GEESE. Can I ask a question on that? 

Mr. MILLER OF CALIFORNIA. Sure. 

Ms. GEESE. I am sorry, but I just cannot help it. When you are 

looking at the targeting of 90 percent below 60 percent, all I have 

heard Secretary Jackson testify to and I have heard other people 

talk about—and I will tell you I will agree—is I do see people 

slightly above 30 percent that wait far too long on the waiting list. 

Mr. MILLER OF CALIFORNIA. No, you are not understanding. We 

are saying that you have to put 90 percent below 60 percent. We 

are not going to just open it up and say, ‘‘Do what you want to with 

the money.’’ We are saying that we are going to allow discretion, 

but you have to put 90 percent below 60 percent. If you want to 

put 90 percent below 30 percent, you can do it. 

So I understand your concern, but the language does not mandate anything; except we did set a threshold. We absolutely did. 

We did not eliminate all the guidelines, but we tried to make them 

as flexible at the local level as possible. 

Ms. Waters, my time is concluded. I want to be fair to everybody 

on the committee. 

Ms. GEESE. Okay. How are you going to vote? I cannot help it. 

How are you going to vote? 

Mr. MILLER OF CALIFORNIA. Well, I am sorry, but your time is 

up. 

Ms. GEESE. All right, sir. Thank you. 

Mr. MILLER OF CALIFORNIA. Ms. Waters? 

Ms. WATERS. Thank you very much. 

This argument about flexibility is bothersome. There are some 

types of discretion that we should not want the public housing authorities to have, but, first of all, we have to agree that philosophically there is a reason for all of this, reasons to provide housing, 

housing assistance, to people who otherwise would not have decent 

quality of life, would not have decent quality of housing. So some 

of this flexibility would cause us not to meet that part of our mission. 

This discretion to give vouchers to people with higher incomes is 

bothersome because I do not know what would happen to the people with low income. I do know in Los Angeles. I do not know what 

the numbers are in terms of the homeless, but I think this would 

just exacerbate that if, in fact, you chose to use that flexibility. 

The other thing that I am really bothered about is this portability flexibility. The bill appears to eliminate the nationwide 

voucher portability. It also makes voucher portability even within 

a State or region, say for example, between a city and a suburb, 

depend upon the existence of a written portability agreement. 

Vouchers would be portable only when the initiating and receiving 

housing authorities within a region had entered into a written 

agreement permitting such portability. 

Now, you know, it is a subject we do not like to talk about, but 

there are just some areas who do not want certain people in their 

jurisdiction, and this would give the flexibility for people to discriminate. And so what I have heard generally here today is that 

housing authority management is concerned about the overall 

thrust of this bill. 

26

Given that there are some who think you should be happy that 

you have flexibility, what I hear is this flexibility does not help you 

to do the job that you need to have done. While I suppose you could 

let people move in to an apartment without an inspection, there 

are some areas you better not do that because the housing is in 

such disrepair until it would be absolutely criminal to do that. 

So let me say to Mr. Montiel, who has all of this experience, 

what in this legislation really helps you to solve the problem of the 

long waiting list that we have for Section 8 or the long waiting list 

we have for public housing or the problems that we experience? 

What in the bill would help you? 

Mr. MONTIEL. Ranking Member Waters, I believe that the most 

important part of the legislation has to do with the fungibility that 

the different funding streams can be used for, and specifically in 

the case of Los Angeles—and to answer your question, I have heard 

numbers of upwards of 50,000 homeless people in our city—what 

we have lacked for a long time in Los Angeles is a viable production vehicle for affordable housing. 

Although there has been a lot of talk about the cost of rental 

units throughout the country going down, the reality is in the fivecounty Southern California area of metropolitan Los Angeles, there 

are two types of rents, high and higher, and that will continue 

until the housing situation stabilizes to the point where the increases are not so dramatic. 

As a result, in the five-county area of Southern California, our 

affordability index is under 20 percent, and in some counties like 

Orange County, it is under 12 percent. That means that only 12 

percent of the population of Orange County can afford a house, a 

median-priced house in Orange County. 

As a result, as we look at our public housing portfolio, as we look 

at the great need in our waiting list, unless we produce more units 

and unless we revitalize the units that we have, we have done very 

little to actually address the long wait list and the homelessness 

issue in Los Angeles. This bill and its related facets allow us to release the underlying value of the real estate that we have to develop additional units and put more people into safe, affordable, decent housing. 

On the Section 8 side, I am concerned, again, with the income 

targeting because it really reduces the floor, the safety net for the 

people that most need it. On the converse, there are very good aspects to the bill. The reduced inspections will cost us less money 

to do. 

Ms. WATERS. But you are talking about something like instead 

of once a year, every 2 years or something like that? 

Mr. MONTIEL. Yes, ma’am. Yes, ma’am. 

Mr. MILLER OF CALIFORNIA. You need to wrap up, if you can. 

Mr. MONTIEL. Usually, it is not a very large number, but it is significant enough to help more families. 

Ms. WATERS. Thank you very much. 

Mr. MILLER OF CALIFORNIA. We have a vote coming up at 4:00, 

so if everybody can hold their comments to 5 minutes, we can all 

have a chance at this panel before we leave, and then we will bring 

the new panel back afterwards. 

Mr. Pearce? 

27

Mr. PEARCE. Thank you. I really appreciate the reasoned suggestions and contemplations, both pro and con. I was going to ask 

along the line that Mr. Miller did about what would you change if 

you had this flexibility. 

I am hearing that you probably would not change too much in 

the 90 percent; you might still direct it the same way you do, but 

you are more concerned about the people that are in the housing 

authorities. Really, there is nothing that mandates that you 

change, and so that is a confusing thing to me. 

Mr. Gutzmann, if I would address you specifically—you had mentioned the last 3 years of budget cuts in your testimony—can you 

give me the actual level of your budget that was appropriated to 

you or distributed to your PHA in the last 3 years? 

Mr. GUTZMANN. For combined sources, sir, Mr. Chairman, member, it was about $65 million 3 years ago. It is about $61 million 

today. We lost $3 million in the Housing Choice Voucher Program, 

and we lost about $1 million each in the public housing and capital 

fund. 

Mr. PEARCE. I saw your testimony. You had to cut 10 percent of 

your personnel and 7 percent of your rentals. The losses do not represent 10 percent of your budget. In other words, if you lost $6 million, you would have lost 10 percent. So I am not sure why you 

were forced into those circumstances. 

Mr. GUTZMANN. Mr. Chairman and member, because we are talking about 3 years of sustained cuts. 

Three years ago, I laid off 5 percent of my public housing staff. 

Last year, I dealt with the funding shortfall in the voucher program, which caused us to cut amounts we paid owners. Owners 

took that hit. We protected tenants. Owners took that hit. We had 

proposed 15 percent. After a public hearing, we cut their rents by 

7 percent. 

Then this last year again, we got whipsawed. It is the public 

housing program that got cut. We are only funded at 89 percent of 

what is eligible this last year by HUD. 

So these are cumulative cuts, and there are more on the horizon 

given what is coming out of OMB on the operating fund rule. 

Mr. PEARCE. Ms. Geese, you had mentioned on Page 3 of your 

testimony that there are many provisions on the Quality Housing 

and Work Responsibility Act of 1998 that have never been implemented by HUD. Can you tell us a little bit about a couple of those 

things that have not been implemented and maybe the outcomes 

if they were? 

Ms. GEESE. There were some things on it like, if you would take 

the rental inspections, when we are looking at means that would 

simplify, there was one way that HUD had the regulatory ability 

that we could group them geographically. 

I know running a rural housing authority, certainly not the size 

of my neighbor here, just to be able to concentrate annually doing 

them by location could save a tremendous amount of dollars and 

driving 40 miles for one inspection, coming back and having to go 

30 miles for another based on the lease-up date, and the anniversary date to do them would have been simpler. 

Mr. PEARCE. If you were to choose the best of these suggestions, 

how would that impact the lives, say, of people like Ms. Leach, peoVerDate 0ct 09 2002 14:59 Jan 19, 2006 Jkt 000000 PO 00000 Frm 00033 Fmt 6633 Sfmt 6633 G:\DOCS\109.30 RODNEY
28

ple that really are trying to get a start, if you were to implement 

the best suggestion that has not been implemented up until now? 

Ms. GEESE. I believe it would have absolutely no effect on the 

tenants. These are things that would just ease administrative burdens. 

Mr. PEARCE. All right. 

Ms. GEESE. I attached with my testimony a NAHRO study that 

would go individually, so I will not go into great detail of all the 

time, but most of them were administrative eases, such as like if 

you are having to reduce the payment standards—and we are in 

a tough scenario—or if your market changes, then it does not have 

to be the second re-exam. 

Mr. PEARCE. If we were to go to this new choice and you do not 

have to direct funds at the full 60 percent spectrum, are you going 

to go ahead and put 90 percent to 30 percent or below? 

If someone were to misuse that authority and that flexibility, is 

there any reason that those administrators cannot be terminated 

or brought in check because there would be an outcry and someone 

would go in and say, ‘‘I am sorry. You are directing money at this 

income level, and you have to these suffering people here.’’

Anyway, I see my time is up, but it is just an observation. We 

will leave it as an open question. 

Thank you. 

Mr. MILLER OF CALIFORNIA. Thank you. 

Ms. Lee from California? Ms. Lee? 

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

Let me thank you all for being here today and for giving us your 

perspective on this again, this next effort to dismantle HUD and 

the safety net which so many people rely on in our country. 

I wanted to ask any of you to respond to this question. The more 

I look at this, the more I believe that this is going to become a real 

issue of civil rights and Fair Housing. 

First of all, Latinos and African Americans make up the majority 

of the extremely low-income households, and given this proposal 

and this redistribution of Section 8 Vouchers, hundreds of thousands of primarily African Americans and Latinos could lose and 

their lives could be destroyed because they no longer would be eligible for these because of the income level. 

I am wondering if any of you have looked at this as a Fair Housing or civil rights issue and could provide that kind of feedback in 

terms of what the unintended consequences could be to primarily 

African Americans and Latinos? 

Ms. TURNER. Yes, thank you. I agree that the impacts of this 

flexibility are potentially felt most by the poorest families and particularly African Americans and Latinos, and I believe one of the 

speakers on the next panel will be addressing that issue very specifically. 

In addition to the potential for moving resources away from minority families, I think the proposal has the potential to worsen 

segregation as well, both poverty concentration and racial and ethnic segregation, by, as I said, reducing the ability of families to 

choose housing in neighborhoods of their choice, limiting portability, limiting mobility. 

29

I would argue that these are really important Federal goals that 

the existing program does a good job of advancing. It could do a 

better job, but these are important Federal goals and the Federal 

Fovernment should maintain the commitment to achieve them, not 

give way to flexibility on these fundamental issues. 

Mr. GUTZMANN. Mr. Chair, member, I would just like to agree 

and say that that is why I support leaving the current income targeting provisions in place—that is a national standard—and keeping the current portability rules in place—that is also a national 

standard that permits furthering Fair Housing objectives of HUD 

and Congress. 

Ms. LEE. Let me just ask any of you then, in terms of just the 

lawsuits that could follow, I can see what could possibly happen in 

terms of civil rights lawsuits and in terms of discrimination lawsuits if, in fact, the bill were passed in this manner. Can any of 

you respond to that? 

Ms. GEESE. That has been a concern, I know, of mine. I guess 

maybe the Moving to Work Demonstration—I cannot personally 

speak to that—might have some, you know, more evidence to bear 

on that. 

I know my concern is, if I have a tenant and I have a complaint, 

I have a regulation that supports my decision, and, with all these 

things all over the board, I do have fears more of legal aid, Fair 

Housing-type issues. 

Ms. LEE. Okay. Well, thank you very much, Mr. Chairman. 

I can see the danger of this from a variety of perspectives, and 

I certainly can see the very negative and discriminatory aspects of 

this legislation as it relates to African Americans and to Latinos, 

and I would hope that we keep that in mind as this bill, hopefully, 

does not move. Maybe that in itself would be enough for those who 

want it to move forward to say, ‘‘We cannot violate the real civil 

rights of such an enormous amount of American citizens.’’

Thank you very much. 

Mr. MILLER OF CALIFORNIA. Mr. Davis of Kentucky? 

Mr. DAVIS OF KENTUCKY. Thank you, Mr. Chairman. 

I know that there are a variety of perspectives when we raise the 

issue of housing and, oftentimes, they become more political than 

personal. As someone who got into his first house as a child where 

my mother was helped by our Congressman to open a door, it had 

a dramatic change on our life, and I think all questions of fiscal 

responsibility and stewardship do not necessarily imply any negative intent whatsoever. 

I think it is fair that we ask the questions, particularly from a 

standpoint of congressional accountability, of how best to spend the 

dollars, challenge our assumptions on why we believe what we believe, so we can better help people, and I think that is a very important thing to do, certainly in those areas of our economy that 

are able to compete effectively globally. They have asked those 

hard internal questions ultimately to benefit communities, benefit 

individuals. 

I guess right now, as I look at current law, PHAs do not necessarily have, let’s say, competitive incentives to control costs. That 

does not imply discrimination by any means whatsoever, but simple management. I can see places in our region, for example, in the 

30

Ohio Valley where in some communities costs have been artificially 

driven up where folks have taken advantage of Section 8. 

I guess my question, so it does not become simply a de facto entitlement program and becomes a partisan battle that actually ends 

up not helping the people that I think both sides of the committee 

really want to help is, do you believe that moving the program from 

a unit-based system to a dollar-or budget-based system has been effective? 

The person I am going to ask is a little bit closer to my home, 

is Mr. Brightbill. 

Mr. BRIGHTBILL. In our case, what has happened in the last 2 

years—and I think I mentioned this—is we are authorized to 356 

vouchers right now with a waiting list of somewhere around 900, 

purged about 2 years ago. We are going to be able to actually issue 

about 25 less vouchers than what we are authorized because we 

just do not have the funds to carry them. 

While I understand that certainly this is not the committee that 

is responsible for appropriating them, my concern is that if you 

look at moving to the 90 percent, what happens is the pressure 

shifts, quite honestly, from Congress to fund those so that we can 

actually serve the 356 families that we are authorized to us to increase those tenant rates to the point that we can balance the 

budget. As has been mentioned, at the end of the year, at the end 

of the day, our budget has to come out even one way or the other. 

So right now it seems to me that what happens is the potential 

is that we have to shift that burden to tenants, and those are the 

people who cannot afford it. I would much rather see a greater emphasis on family self-sufficiency, on job training. In our case, our 

assistant housing person is across the hall from our one-stop training center. It is in the same facility with our Head Start people so 

that we try to approach it in a comprehensive way. 

I have been in this business a long time, and I long ago realized 

that the only way that people are not poor is if they have a job and 

if they have a job that pays something. That is just the way it is, 

and we are never going to appropriate enough money. We do not 

want people to not work. We want people to work. We have to encourage them to do that. 

I mean, it has certainly forced us to balance the budget. We have 

consistently tried to maintain reasonable rents because we think it 

is in the best interests of the program and the people that we 

serve, so I do not think that the change has forced us to do anything different than what we would have, except not issue vouchers. 

Mr. DAVIS OF KENTUCKY. Okay. Thank you. 

I yield back my time. 

Mr. MILLER OF CALIFORNIA. Thank you. 

Mr. Green of Texas? 

Mr. GREEN. Thank you, Mr. Chairman. 

I must say that I do marvel at how vouchers are very important 

to promote choice in schools, but not in public housing. 

We have approximately 44,000 voucher holders who have exercised choice, meaning that they were permitted to move from one 

jurisdiction to another in this country, and I think eliminating that 

choice is going to have some adverse consequences. 

31

I have had the opportunity to serve on a committee that crafted 

some laws that regulated landlords and tenants, and I assure you 

the landlords were well represented. Their views were well represented. The least, the last, and the lost rarely had their views 

represented. 

So my question is this—and maybe I will direct this to Mr. 

Montiel and Ms. Turner—how do you see the organized landlords 

impacting public policy in an adverse methodology, Mr. Montiel, 

Ms. Turner? 

Let me compliment Ms. Leach for your accomplishments in life. 

You are truly a role model and a person to be congratulated, and 

I do so. 

If you would, please? 

Mr. MONTIEL. Mr. Miller, Mr. Green, I think that is the point I 

was trying to stress earlier. Without the safety net of the income 

targeting, when you are going to get into a situation where two interest groups are fighting over the same pool of money, I assure 

you that organized landlords, property owners, et cetera, will have 

a lot more tools with which to make their policy perspective known. 

Without that wall, if you will, a retaining wall, to keep back 

these interest groups and that retaining wall being the 30 percent, 

75 percent of the 38 percent AMI, then what local housing authorities will be forced to do is to have to make the tough decision and 

not cut landlord rents and instead serve less families at a deep 

subsidy. 

Essentially, what in my mind happens when this all takes place 

is that when there is not enough money to go around, given this 

flexibility to serve 90 percent at 60 percent, then the onus will be 

passed from the appropriators to the public housing authorities 

that manage the program to make the tough decisions and at the 

local level have to adjust to reduced funding. 

So yes, it is good flexibility, and many aspects of the bill are 

good, but in this particular case, this is one that comes with a lot 

more pitfalls than it comes with benefits. 

Mr. GREEN. Thank you. 

Ma’am? 

Ms. TURNER. Thank you. 

One of the challenges that the current voucher program faces is 

the unwillingness of some landlords, particularly landlords with 

property in healthy neighborhoods, to participate in the program. 

So the kind of flexibility that housing authorities really need is the 

flexibility to work constructively with those landlords and draw 

them into the program, addressing administrative challenges or red 

tape that legitimately make it difficult to work with the program, 

but still retaining the fundamental goals of the program. 

So, again, I think there are some ways to strengthen the programs. Some housing authorities have done really creative work in 

this area, but the flexibility that this bill offers and the funding 

constraints that go with it do not help them work in the right direction with regard to landlords. 

Mr. GREEN. I yield back the balance of my time. 

Thank you, Mr. Chairman. 

Mr. MILLER OF CALIFORNIA. Thank you, sir. 

Mr. Scott from Georgia? 

32

Mr. SCOTT. Thank you, Mr. Chairman. 

You know, I am just growing in my apprehension about the direction in which we are moving in housing. We constantly see, it 

appears, an effort of dismantling HUD in and of itself. They seem 

to be more concerned with process than outcomes. 

We bring forth a plan in H.R. 1999 which will miss the most fundamental problem in the whole area and that is the inability to establish a renewal formula for Section 8 Voucher funding. We have 

flexibility in here that could be misconstrued as a vehicle that 

could cause discrimination. 

But paramount of my frustration is an example that occurred in 

this committee, and I probably would look to Ms. Geese or Ms. 

Turner, or any of you, to respond to this. 

The Secretary of HUD, Secretary Jackson, in his testimony before this committee on the Administration’s fiscal year 2006 HUD 

budget—I do not know how many of you saw that hearing—claimed 

that HUD had reduced improper payments of Federal housing assistance by $800 million. But then under persistent questioning 

from myself and others on this committee, he later admitted that 

no money was actually recaptured. 

Now we now know that money was not recaptured because HUD 

is tracking paper and process rather than actual outcomes and results, and I want to get your response to this by simply asking the 

question in view of this. Would it not be prudent to change HUD’s 

compliance focus from process to outcomes? In other words, should 

not HUD concern itself with the number of households served and 

not the red tape and not the paperwork? 

Ms. Turner or Ms. Geese? Any of you could comment on this, but 

I hoped that you all might. 

Ms. GEESE. Part of the QHWRA that you can read that is attached to my testimony allowed for consortiums of housing authorities to be put together, and I can speak for some Ohio housing authorities; I cannot speak, you know, for the Nation, but a lot of our 

county housing authorities are smaller and, typically, when you get 

into a lot of the really small ones, you will have one director that 

oversees several counties. 

Now the consortium, the beauty of it, was they could come together; they could pay for one audit cost, which is a costly expense 

to a housing authority. They would only have to file paperwork, 

end-of-year statements, budgets, et cetera, reducing the payment 

simply for one agency as one whole agency. This process has never 

been fully enacted. I mean, you had to really, really fight and 

struggle and only very recently be allowed to get to the point where 

you could get down to doing one audit or conserving boards. 

On the funding formula you spoke of, I mean, I would love to be 

able to serve all my authorized vouchers, and we were pretty close 

on the borderline for a while of, you know, going pretty evenly. We 

now are finding that while we always had a 98 percent and 99 percent lease-up rate by how we would handle ours—and we only have 

275 vouchers. We are a little bit heavier in the public housing program—I am down to 262 by funding constraints. For the unit-based 

system, I mean, I think there has been plenty of studies that have 

shown the cost spiraling has quit. 

33

I question too on the funding formula that we keep talking about 

that is not proposed here, the current method we are working out 

of created winners and losers, sir, the way they took the snapshot 

from May, June, and July, and that picture in time. I mean, I have 

always found that my housing authority, that is the period of time 

when people move, kids are out of school, it is just a natural process. So for myself, it was a bad snapshot. It was the time my leaseup was down because I had people moving. 

Now this created winners. Some people got big wins, but they 

were temporary because HUD took the money back; they did not 

get to keep it, and the rest of us lost funds, and that just resulted 

in fewer vouchers being utilized. I mean, I think NAHRO did a 

study that, in fact, in 2004 believed Congress allocated enough 

funds to serve every single voucher out there, but it was the funding mechanism employed that caused the problem and the shortfall 

and all the nightmares that we are seeing. 

This was propagated on into 2005 and is being proposed to be 

used as the basis for 2006 and then forward. 

Mr. SCOTT. Ms. Turner, could we get you on this before my 5 

minutes is up? 

Ms. TURNER. Thank you. 

I think a move toward measuring performance rather than process would be very positive for HUD if those performance measures 

really focused on the fundamental goals that this program has the 

potential to advance, like the number of households served, the 

share of the neediest, you know, the share of assistance going to 

the neediest, the success rates in finding units, the success rates 

in finding it in healthy neighborhoods, and making progress toward 

work and self-sufficiency. 

Mr. MILLER OF CALIFORNIA. We need to wrap up. 

Thank you. 

The gentleman’s time has expired. 

Okay. Mr. Cleaver? 

Mr. CLEAVER. Thank you, Mr. Chairman. 

Mr. Chairman, I also would like to express my appreciation to 

you, and you have said even away from the committee hearing that 

you wanted to do something that would improve the lives of people 

who live in public housing. 

I have two questions, and I will ask them quickly, and, hopefully, 

you can answer them quickly, whoever would like. 

Despite the fact that this bill is proposing to broaden income targeting requirements, the truth of the matter is the number of individuals eligible for new vouchers will expand. 

When that expands, that means that there may be people who 

would become eligible in some of the more affluent parts of our city 

because the new eligibility in my community in the Fifth District 

of Missouri could go to $41,000, opposed to $20,520 right now. 

That means there are people who could qualify to receive this assistance who are almost middle class, and then it hurts the people 

who are poor. Am I wrong? 

I just want somebody to just answer that. 

Ms. TURNER. You are correct, and one of the things that we have 

learned is that it is really important to offer the project-based 

housing to a mix of incomes so that you do not concentrate poor 

34

people in one development, but vouchers have the advantage since 

they disperse families, that that is a resource we really can safely 

target to the families who need help most. 

Mr. CLEAVER. That would be true except for a couple of things. 

Number one, we have already labeled the people. One of the things 

I hated about living in public housing was that all of the kids when 

I would go to school pointed me out as a public housing resident, 

and now we do the same thing. 

In Kansas City, I heard my own children say one day, ‘‘Those are 

the Voucher Valley kids,’’ because there is a section where a number of the Section 8 houses are located. We keep talking about scattered-site housing. The reality is we do not have much scatteredsite housing in this country. 

Number two, we give names, ‘‘You are poor, so you live in Section 

8 housing.’’ If you are affluent and the area where you live receives 

a Section 108 loan which subsidizes all kinds of neighborhoods, you 

know, you live in Quality Hill. If you are poor, you live in Section 

8. 

I mean, how in the world can we not feel some regret about what 

we have done to people? They live in Section 8 housing. I mean, 

who do you know who would like to go around and say, ‘‘I live in 

Section 8.’’ It just sounds horrible. Am I wrong about that? 

I have lived there. So if you have not lived there, do not say it. 

You on the end? 

Ms. LEACH. You are not wrong, but I am not ashamed to say that 

I lived in Section 8 because it got me where I am today. 

Mr. CLEAVER. Yes, the point I am making is that children end 

up getting labeled. 

Ms. LEACH. Yes, they do. 

Mr. CLEAVER. It goes into their schools with them. These are Section 8 kids. 

Ms. LEACH. Yes. 

Mr. CLEAVER. I mean, it cannot be good for our country. 

Ms. LEACH. No, it is not, not for kids. You know, my kids do not 

know exactly what it is. My kids do not understand, you know. 

When they get older, they will. 

Mr. CLEAVER. Well, I thought it was big time myself because we 

had an indoor bathroom. You know, I had to get a little older before I was told that it meant that I was separated from the other 

kids who had real houses. 

Mr. GUTZMANN. Of course, the labeling is not good; I agree, but 

the fact that we have safety net deeply affordable housing is a good 

thing, and in most communities, it is seen as part of that community, part of the fabric, not as warehouses for the poor. 

Remember that over 40 percent of public housing is for elderly 

and people with disabilities who look upon it as their permanent 

last place, and so when we talk, there are so many programs, it 

is confusing, you know, the voucher label, the public housing labels. 

It is only 2 percent of the housing supply in America that we keep 

deeply affordable. 

I agree; let’s work to banish the labels, but let’s also work to 

keep this housing deeply affordable and keep it places where, as a 

family, people want to move up and out, but as elderly and people 

with disabilities, they are going to be there for a long time. 

35

Mr. CLEAVER. Of course, I do not know anybody who does not 

want to move up and out. I have not met anybody yet who said, 

‘‘Boy, this public housing is hard to beat.’’

Mr. MILLER OF CALIFORNIA. Ms. Velazquez? 

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

Mr. MILLER OF CALIFORNIA. Thank you. 

Ms. VELAZQUEZ. Thank you, Mr. Chairman. 

I would like to address my first question to Ms. Geese and Mr. 

Gutzmann. You both mentioned the recent issue regarding the public housing operating subsidy formula, and you are concerned that 

H.R. 1999 contains a provision that will use a similar approach 

with the voucher program. 

With New York City standing to lose an estimated $120 million 

in annual operating assistance under these supposed ‘‘good faith 

negotiations,’’ I am acutely aware of this provision, and I share 

your concerns. Can you please expand on your testimony regarding 

this issue and explain why are you wary of such an approach? 

Ms. GEESE. Well, I think on the negotiated rule and the operating fund, it is pretty clear they took, NAHRO estimates, $371 

million out of the proposal, and, of course, that is before appropriations, so the cuts would be deeper. 

The different incentives that separated public housing from the 

private sector have been removed, and we are not the private sector. I mean, I think everybody can agree on that. Our approach is 

different. 

Also, the fact that this negotiated rule, there was a lot of time, 

effort, and energy putting into coming out with the process they 

did, which in my opinion was not a great one to begin with, let 

alone to have all these extra cuts. 

There are two areas in the budget proposing in this bill to use 

a negotiated rulemaking process, you know, and I think many of 

us have lost faith in that ability to work well. 

Ms. VELAZQUEZ. Thank you. 

Mr. Gutzmann? 

Mr. GUTZMANN. I would agree. I think the parties were at the 

table in good faith on the negotiated rule for the operating fund, 

and OMB, HUD cherry-picked those things that would cost too 

much, took them out. 

I have colleagues at the New York State housing authorities who 

are going to lose 40 percent of their operating fund in 1 year, and 

the stop-loss provision has been removed. They cannot survive as 

an entity without doing something on the income side, but that, 

Congresswoman, creates the challenge. 

Should they have some flexibility to do something on the income 

side? I say yes, and even as difficult as that discussion will be, 

probably it will include should we raise minimum rent. If they 

have that discussion, if they have the flexibility to have that discussion and they locally agree, that is the big part. 

If they agree minimum rents go from 25 percent to 75 percent, 

should not that be allowed to occur? That is where I am coming a 

little bit on the side of parts of this bill. There is a lot that is 

wrong. 

36

Ms. VELAZQUEZ. Maybe that should be coupled with an increase 

in the minimum Federal wage. 

Many of you mentioned concerns about the provision in H.R. 

1999 that will limit enhanced vouchers to 1 year, and I share your 

concerns. I believe that a better approach would be to make efforts 

to preserve affordable units by helping tenants find ways to purchase their buildings if landlords choose not to remain in the program. 

I raised this issue with Secretary Jackson in last week’s hearing, 

but of course, he failed to give me a straight answer or commit to 

ways in which HUD can work to help preserve affordable units. 

Can you share your thoughts on this idea or other ways in which 

HUD could preserve rather than jeopardize housing? 

Any of the members of the panel, have you thought of any ways? 

Yes? 

Mr. MONTIEL. Yes, ma’am. One way of doing it might be for actually housing authorities with the flexibility provided in the fungible 

aspects of this bill to actually step in and purchase buildings to 

preserve the affordability, and in Los Angeles, we are actually looking at doing that. Wherever an owner is opting out, if we can step 

in and purchase the building to continue the affordability, that is 

what we are trying to do, and that is a good aspect of the bill. 

Ms. VELAZQUEZ. And how will you do that if the landlord has the 

right to sell their building? 

Mr. MONTIEL. Well, again, given that you have some flexibility 

in how you use the income streams from HUD, then you can take 

some of that to leverage financing of these buildings to actually 

purchase them? 

Ms. VELAZQUEZ. Would any other person like to comment on that 

question? 

There seems to be a misconception that the Section 8 program 

attracts families that are unemployed and lack the skill or ambition to support themselves without Government assistance. This 

mindset is evident in the bill before us in which PHAs will be allowed to limit voucher assistance to 5 years. 

Recent data indicates, however, that over half of the voucher 

holders were employed, and the average stay in the program was 

just over 3 years, with only elderly residents staying more than 5 

years. Can those of you who run PHA’s share with us your experiences with residents in terms of employment status and length of 

stay in the program? 

Mr. MILLER OF CALIFORNIA. Could you please make your testimony brief? The time has expired. 

Ms. GEESE. I will try to be brief. 

Seventy-nine percent of our nonelderly, nondisabled workers are 

employed. They might not be employed to obviously where they can 

go off the program, but they are employed, and there are only 17 

percent receiving TANF assistance. 

Ms. VELAZQUEZ. Yes? 

Mr. GUTZMANN. About 45 percent of our family households are 

employed, have income, earned income. We have 20 years of data 

that show the average stay in public housing is 6 years, and people 

are trying to move up and out by getting jobs. 

37

Mr. MILLER OF CALIFORNIA. That will have to do it. Good response. Thank you. 

Ms. VELAZQUEZ. Thank you. 

Mr. MILLER OF CALIFORNIA. Mr. Scott? I mean, Mr. Davis of Alabama? 

Mr. DAVIS OF ALABAMA. Thank you, Mr. Chairman. 

Let me go back to a question that Mr. Pearce asked you probably 

about 20 minutes ago. I have a lot of respect for Mr. Pearce. I view 

him as one of the thoughtful members of the committee, but I am 

not sure if I followed the logic of his question, so I want to pursue 

that with you a little bit. 

He was addressing with you what would happen as a practical 

matter if greater flexibility were given to the local housing authorities in terms of balancing the competing needs of this program, and 

I think Mr. Pearce’s observation was that if, for whatever reason, 

the housing authorities started leaving too many of the poorest of 

the poor out of the equation that there would somehow be some 

kind of a public outcry or backlash around that. 

Do any of you sitting on the panel expect that in a given community, if the local authorities adjusted their formulas in that manner, that there would be any significant public outcry or the public 

would even know about it? 

Mr. BRIGHTBILL. I come from a relatively small community, and 

I would, without question, say that there would be no public pressure on us to go back to the 30 percent. 

Mr. DAVIS OF ALABAMA. To follow up on that, do any of you serve 

in communities where there is an active and huge and vocal lobby 

of low-income people who have a lot of political influence? 

You are all shaking your heads no. 

Mr. MONTIEL. Yes, sir. Certainly in Los Angeles, we have very 

vocal advocates. But what I would add is if I were to compare the 

two, where would more vocal outcry come from? If we modified the 

rent standards or reduced the indexes, I believe that there would 

be a lot more outcry from the landlord community than there 

would be from the homeless advocates. 

Mr. DAVIS OF ALABAMA. That sounds entirely reasonable. 

Let me ask you another question. Secretary Jackson last week in 

his testimony posited that one major problem was that people were 

remaining on Section 8 for too long and that they simply did not 

want to leave the program either through inertia, better known as 

laziness, or because they just had no desire to move into the world 

of housing. 

Ms. Leach, let me direct this to you. You are here today giving 

us your testimony literally and figuratively, and the people that 

you knew who were in the Section 8 program, were most of those—

in fact, were the overwhelming majority of them—hardworking 

people who remain in Section 8 because they have no other economic choice? 

Ms. LEACH. Yes, just like me. I had three children. I worked a part-time job at Wal-Mart making $7 an hour. 

Mr. DAVIS OF ALABAMA. Do any of you think from your experience at the local housing authorities that there are any cognizable 

numbers of people who just like being on Section 8 and remain on 

it because of the fun of it? 

38

Ms. LEACH. No. 

Mr. DAVIS OF ALABAMA. Okay. Let me ask one final set of questions. One of the points that I regularly try to make of Administration witnesses before this committee is that every now and then if 

we are going to make changes in housing programs, whether it is 

Section 8 or Hope VI or the whole panoply of programs, if we are 

going to make changes in funding levels, that every now and then 

that we do it with the idea of improving the housing mission and 

not just with the idea of meeting the bottom line. I assume you 

would all agree with that. 

Is there anyone on this panel who thinks that the proposed 

changes to Section 8 included in this bill would make any dent in 

reducing homelessness in this country? 

Mr. GUTZMANN. No, nothing adds to the supply. We are talking 

about regulation and reform, but nothing in this provision would 

add to the supply. The only way you could do it is if you created 

shallower subsidies. 

Mr. DAVIS OF ALABAMA. Of course, doctors take the Hippocratic 

Oath that at minimum do no harm, and I would hope that that 

would be the same standard for housing programs. 

My concern, as several members have stated very eloquently, if 

you add more people to a diminished pool, then fewer poor people 

can benefit from that pool. So does not it stand to reason that rather than reducing homelessness that these changes might actually 

push some people at the margins into homelessness because the 

Section 8 will not be available? 

Several of you are nodding your heads in agreement with that. 

Ms. LEACH. Ours is about 46 percent. I am no longer eligible, 

and, you know, I am only about 46 percent. 

Mr. DAVIS OF ALABAMA. Let me just conclude, Ms. Leach, by 

thanking you. One of my colleagues did it earlier, but I absolutely 

agree that there is too much of a stigma around this program. 

Some of us in this room do not think that there is any stigma 

around needing help, and some of us in this room do not think 

there is any stigma around trying to improve your lot in life. 

Thank you for testifying openly and boldly about your experience. 

Thank you, Mr. Chairman. 

Mr. MILLER OF CALIFORNIA. Thank you very much. 

I want to thank the panel. You did an excellent job. It was very 

informative. 

Before I dismiss you, 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 

and those witnesses then to replace their response in the record. 

I know members on this panel that were here would like to ask additional questions. 

Thank you very much. 

Mr. GUTZMANN. Thank you very much. 

Mr. MILLER OF CALIFORNIA. You have some members that would 

like to talk to you. 

With that, I would like to call the second panel forward. 

Mr. MILLER OF CALIFORNIA. I would like to welcome the second 

panel and call the committee back to order. 

39

Mr. Scott, you would like to introduce our first witness? 

Mr. SCOTT. I certainly would. Thank you very much, Mr. Chairman. 

We have one of our distinguished citizens from Atlanta, Georgia, 

here and a good, good friend, and I would like to just highlight a 

few things about her distinguished career, and that is Ms. Renee 

Louis Glover. 

She is the CEO of the Atlanta Housing Authority and has been 

so since September 1994. She has been widely acknowledged for 

her business leadership and strategic approach to community redevelopment, and at the Atlanta Housing Authority, Ms. Glover pioneered master-planned, mixed-finance, mixed-income residential 

development where families of all socioeconomic profiles live next 

to each other in the same amenity-rich community. 

Ms. Glover has been nationally recognized for her role in transforming U.S. urban policy. By introducing mixed-income communities into our cities, we have improved not only housing, but also 

public schools, transit access, and employment opportunities. Her 

efforts have rebuilt entire communities from the ground up, and in 

creating a replicable model for redevelopment, Ms. Glover has 

helped cities across this country transform their urban landscape. 

In fact, the model that Ms. Glover created at the Atlanta Housing 

Authority is now used as the redevelopment blueprint by the 

United States Department of Housing and Urban Development. 

Finally, Ms. Glover has reorganized the Atlanta Housing Authority to become a diversified real estate company with public policy 

and service-oriented mission. The Atlanta Housing Authority is the 

sixth largest housing authority in the United States and owns and 

operates approximately 9,500 multifamily apartments and administers approximately 12,000 Section 8 Vouchers. 

As a result of implementing private-sector-oriented strategies 

and outsourcing, the management of its properties to professional 

firms, the Atlanta Housing Authority was removed from HUD’s 

troubled housing list in 1998 and was designated a high-performance agency in February 1999 with a score of 97 percent and in 

January of 1998 was designated again. She earned a perfect score 

of 100 percent for its most recent HUD assessment for the fiscal 

year which ended in June of 1999. 

Ms. Glover has been named public official of the year for 2002 

by Governing magazine, and she joins 10 other officials honored for 

outstanding achievement in public service at the State and local 

level, and she has served on the National Advisory Council of 

Fannie Mae and was appointed by the United States Congress to 

the Millennial Housing Commission in 2000 charged with providing 

legislative recommendations to Congress on national housing policy. 

Prior to joining the Atlanta Housing Authority, Ms. Glover was 

an accomplished corporate finance attorney in New York City and 

Atlanta, where she received her Bachelor of Arts degree from Fisk 

University and her master’s degree from Yale University and her 

juris doctor degree from Boston University. 

I am extraordinarily proud to have you here, Ms. Glover, as one 

of my constituents. 

40

Thank you, Mr. Chairman, for giving me the opportunity to introduce her. 

Mr. MILLER OF CALIFORNIA. Thank you, Mr. Scott. 

I am going to be a little more brief than that on the rest of you. 

Excuse me. 

Daniel Nackerman is executive director of Housing Authority of 

the County of San Bernardino, one of the largest counties in the 

United States. 

In fact, I represent part of that county. So welcome. 

Sheila Crowley is president of National Low Income Housing Coalition, a nonprofit organization concerned with the housing circumstances of low-income people. The coalition seeks to increase 

the stock of housing units for low-income families. 

Phil Tegeler—Is that correct?—is the executive director of the 

Poverty and Race Research Action Council, a nonprofit organization created in 1990 by major civil rights, civil liberties, and antipoverty groups. The council supports social science research, links 

the State and national advocacy strategies. 

Chris Reilly is the area vice resident for Equity Residential, a 

real estate investment trust listed on the New York Stock Exchange. He oversees nearly 9,000 apartment units, quite a few, in 

68 New England properties. He is testifying today on behalf of the 

National Multiple Housing Council and the National Apartment 

Association, organizations focused on public policies relating to the 

rental housing business. 

Dennis Muha—Is that right?—I am lucky today—is executive director of the National Leased Housing Association, the association, 

which represents private and public participation in the affordable 

multiple rental housing industry specializing in federally assisted 

rental housing. 

Welcome. It is good to have you all here. 

As my daughter lives in Atlanta, I will ask Ms. Glover to make 

a 5-minute presentation. 

STATEMENT OF RENEE LEWIS GLOVER, PRESIDENT AND CEO, 

THE HOUSING AUTHORITY OF ATLANTA 

Ms. GLOVER. I do want to thank the outstanding David Scott. We 

love him, and we are so proud of him. He is doing a magnificent 

job, and we expect greater things from him. 

So thank you so much for that very generous introduction. 

Mr. Ney and Ms. Waters and the other members of the subcommittee, I really appreciate the opportunity to speak to you 

today about this very important issue. 

I want to mention two things to eliminate two misconceptions. 

First of all, the first misconception is that public housing agencies are seeking legislative flexibility to abandon their fundamental 

mission. That simply is not true. 

The second misconception is that there should be a trade-off between regulatory flexibility and funding. That also is not the case. 

I want to say that there are too many American citizens who are 

ill-housed, undereducated and ill-nourished. Too often, the debate 

is around these very complicated issues that we find ourselves discussing before the issues and problems have really been identified 

before we seek solutions. 

41

Too many of our American citizens continue to live in poverty, 

and the question that really confronts us is whether, through 

thoughtful policy and strategic investment, we, as policymakers 

and practitioners, can make a difference. 

In my humble opinion, we can make a difference, but only if we 

are intentional about it and understand the problem that we are 

seeking to solve. So I want to offer the following framing principles 

that I believe must govern any thoughtful discussion of reform of 

the public housing or housing choice programs. 

There is no question that the programs need to be reformed. The 

programs are overly complex; they are too prescriptive; and the 

regulations are often contradictory in their spirit and intent with 

too many unintended consequences and unfunded mandates. There 

is no clear articulation of the outcomes that we seek to accomplish. 

The problems ought to be addressed and the scope of the need 

must clearly be articulated before defining outcomes, approaches, 

or how much it will cost. Currently, the public housing and housing 

choice voucher programs serve low-income seniors, in most cases, 

on fixed incomes; the disabled—physically disabled, learning disabled and mentally disabled—often also on fixed incomes. 

I would submit to you that each of these groups has different 

needs, and the policymakers should approach these groups based 

on their needs and agreed solutions and outcomes. The public housing and voucher programs in many ways have not served the 

groups well with the appropriate level of services. 

I believe we first must agree on the outcomes we desire to accomplish as a result of the United States Government making an investment. For example, we should ask what types of supportive 

services are needed for the mentally disabled so that they can function in community. We have all failed the mentally disabled because the States have been getting out of this business and the 

mentally disabled have been left to fend for themselves, often ending up homeless or in jail or in public housing originally designed 

for seniors, resulting in neither the seniors nor the mentally disabled being served very well. 

We should also ask the question is it a realistic expectation that 

if families who are capable of caring for themselves over a period 

of time, if the environment is decent and services are available and 

required to be used for that purpose, that after that time period 

and after they have accomplished their goals, they should move on 

and move up. Should we as a Nation provide a permanent housing 

subsidy to seniors and disabled persons who live on fixed incomes 

and who cannot take care of themselves? 

All real estate is local, and, therefore, the approaches to addressing the problems need to be locally crafted and implemented. The 

real estate markets vary vastly, including availability, cost, and 

condition. 

Mr. MILLER OF CALIFORNIA. Could you conclude your testimony? 

Ms. GLOVER. Next, the public policy resulting in the concentration of poverty—I want to make this point—has caused horrible 

outcomes because it has institutionalized poverty; it has created 

environments of crime, drugs, hopelessness; and it has destroyed 

neighborhoods. 

42

In Atlanta, as Representative Scott mentioned, we have been 

able to address it through creating market-rich communities. 

Mr. MILLER OF CALIFORNIA. You will need to wrap up your testimony. Time is up. 

Ms. GLOVER. Last point: HUD must be re-engineered if we are 

going to implement reform, and I will answer my questions as they 

come up in other comments. 

[The prepared statement of Renee Glover can be found on page 

109 in the appendix.] 

Mr. MILLER OF CALIFORNIA. Thank you very much. 

Ms. GLOVER. Thank you. 

Mr. MILLER OF CALIFORNIA. Mr. Nackerman? 

STATEMENT OF DANIEL NACKERMAN, EXECUTIVE DIRECTOR, 

HOUSING AUTHORITY OF THE COUNTY OF SAN 

BERNARDINO, CALIFORNIA 

Mr. NACKERMAN. Thank you, Vice Chairperson Miller, Ranking 

Member Waters, and subcommittee members. 

I would like to first thank you for not comparing my resume to 

that of Ms. Glover. 

But my name is Daniel Nackerman, and I am the executive director of the Housing Authority of the County of San Bernardino, 

and I have also served as executive director or senior manager at 

three other large California urban housing authorities, including 

Oakland, Richmond, and Contra Costa County. 

At the agency I am with now, we take pride in taking progressive 

approaches in areas, such as development of additional housing, 

creating first-time home buyer opportunities, and providing supportive services to help families transition from assisted housing to 

self-sufficiency. 

Through these experiences, I have come to the following conclusions. 

First of all, housing authority personnel, as you have heard probably here today, genuinely understand the plight and struggle of 

the seniors, families, disabled individuals, and other individuals 

that we serve. 

The programs we administer, as Ms. Glover stated, are overly 

complex and overly prescriptive. HUD has a chokehold on us. This 

bill releases that chokehold slightly, but the hands are still there. 

Presently, the key elements of these programs include disincentives to employment. In particular, income up equals rent up. Also, 

the intrusive complexity of some of these programs actually create 

sort of a hopelessness with some of the residents we serve. 

HUD’s past approach of one-size-fits-all does not work in many 

individual communities, and I think you heard that today too. 

Also, despite these problems, the HUD programs of public housing and Section 8 have had overall success in recent years, as evidenced by the record number of people assisted, a record high for 

homeownership, the elimination of many severely distressed properties, but as Mr. Frank said, we are at a day of reckoning. 

I also believe that there are acres of common ground of agreement here. We are talking about the areas of disagreement. There 

is a lot of pieces of agreement that we have been working on for 

43

2 or 3 years, long before some of the tragic stories of the Section 

8 program from the past year. 

This bill is a culmination of the 3 years of efforts. The bill proposes to allow local design of programs by simplifying rent structures, standardizing income requirements, which match tax credit 

and home programs, reducing the number of required inspections, 

if you can, on a local level, providing homeownership incentives. 

We have sold over 60 homes in our county to public housing and 

Section 8 residents. We have developed an infrastructure, and it 

works, and we will sell more than 60 this coming year. 

Most of these changes will be optional based on new locally 

adopted policies, and a very important point: If adopted, the persons served in both programs, both Section 8 and public housing, 

would continue to pay only 30 percent to 40 percent of income just 

as before. 

I have included in my written testimony a brief summary of 

some of the specific proposals. However, I would like to emphasize 

a few of those points. 

On the budget, as noted by our three reputable public housing 

entity organizations, CLPHA, PHADA and NAHRO, the bill does 

not prescribe a distinct allocation formula or permanent authorizations for budgets. These could be clarified before passage, or perhaps, as some have alluded, that is an appropriations issue. However, it is very clear that these substantial and successful programs 

require stable funding that we have not had over the past 2 or 3 

years. 

The income targeting: This bill proposes to change the income 

ratio of persons served by targeting 90 percent of vouchers to 

households below 60 percent of median, in lieu of the current 75 

percent at 30 percent. As the gentleman from Minnesota pointed 

out, a few agencies may need that flexibility to design the programs at a local level to be successful. 

In conclusion, the reform aspects of this bill are long overdue and 

have been formulated through years of work. Except for funding 

appropriation issues that may not be adequately addressed, these 

overhauls will result in the following: many benefits to residents, 

including simplification, matched savings, keeping money as incomes rise, less intrusion; number two, financially stable programs 

for the authorities; number three, higher employment levels for 

participants, simplification on a national level, significant administrative efficiencies and cost savings, full rents paid in every market, and higher level of first-time home buyer sales. 

Thank you for your time. 

[The prepared statement of Daniel Nackerman can be found on 

page 140 in the appendix.] 

Mr. MILLER OF CALIFORNIA. Thank you, sir. 

Ms. Crowley? 

STATEMENT OF SHEILA CROWLEY, PRESIDENT, NATIONAL 

LOW INCOME HOUSING COALITION 

Ms. CROWLEY. Mr. Miller, Ms. Waters, and other members of the 

committee, thank you for the opportunity to testify on H.R. 1999. 

The Housing Voucher Program has been in a state of tumult 

since 2003 due to actions by the Administration and Congress creVerDate 0ct 09 2002 14:59 Jan 19, 2006 Jkt 000000 PO 00000 Frm 00049 Fmt 6633 Sfmt 6633 G:\DOCS\109.30 RODNEY
44

ating instability in the program that has adversely effected all program participants. It is to the credit of the many PHA managers 

who work hard everyday to provide safe, decent, and affordable 

housing for needy Americans that more families have not been upended and lost their homes. 

Recognizing the impasse in coming to agreement over how best 

to return the program to the degree of stability needed for it to 

work, the National Low Income Housing Coalition convened a National Housing Voucher Summit earlier this year for the purpose 

of developing a consensus agenda on legislative and regulatory 

changes to the program to restore credibility and stability with the 

intent of paving the way for future growth. Sixty-six experts, representing a range of perspectives, including members of the committee’s staff from both sides of the aisle, participated in the summit. 

While the summit participants have not yet completed their process of reaching a consensus agenda, it is safe to say that H.R. 1999 

does not reflect what the majority of participants would agree are 

prudent and appropriate changes that will improve the voucher 

program. 

I urge the committee to continue the consensus-seeking process 

begun by Mr. Ney with his roundtables and to build upon the substantial work already completed by the National Housing Voucher 

Summit before considering changes to the voucher program. 

In my written testimony, I go over several concerns that we 

raised on H.R. 1999, but I want to focus on just three now. 

One, H.R. 1999 would block grant voucher funding. Once 

Congress’s decision on the annual appropriation for the voucher 

program is severed from the actual number and cost of authorized 

vouchers, it will be impossible for Congress to know the actual cost, 

the true cost, of housing vouchers. 

Congress will give up its authority and responsibility to provide 

funding based on what the program costs. We believe that this action will result in cuts to the program in future years, and, indeed, 

that is the Administration’s intention. 

Of all the reforms to the voucher program that the committee 

should consider, none is more important than restoring stability 

and predictability in the program’s funding. This means accurate 

knowledge of what it costs to fund the program to meet its current 

obligations and future objectives. It means confidence that the program is operating at maximum cost efficiency. It means the transparent and predictable method of distributing funds from HUD to 

PHAs. And it means a system of reserves to deal with naturally occurring and unpredictable changes in the housing market and in 

tenant income. 

My second point is about the income targeting. H.R. 1999 would 

reduce access to housing vouchers to the very people who need it 

the most. Many witnesses have noted that the current income targeting focuses on those with incomes of 30 percent of area median 

income or less. The bill would move that to 60 percent of area median income or less. 

On a national basis, 30 percent of AMI is about $15,000 a year. 

Sixty percent is about $30,000 a year. 

45

There are 6.3 million renter households in the U.S with incomes 

at or less than 30 percent of area median income that are now paying more than half of their income for their housing. That is what 

we refer to as severely unaffordable housing. 

This compares to 1.1 million renter households with incomes between 30 percent and 60 percent of AMI that have such severe 

housing cost burdens, and there is a poster here that illustrates 

this point, and there are hand-outs that have the same data that 

have been circulated. 

Parenthetically, I might note that we see on this poster a severe 

cost burden based on rent and ownership, and, indeed, what you 

will see here is that homeownership does not, in fact, protect or 

low-income people or low-income people from severe housing cost 

burdens. 

In my written testimony, there is a chart attached which will 

give you this information on a State-by-State basis. 

There is simply no policy justification to increase the upper limit 

on income eligibility when the unserved population of currently eligible renter households with severe housing cost burdens outnumbers the population proposed to be served by 6 to 1. Raising 

income eligibility is merely a strategy to reduce the cost of the program by serving people who need less assistance. 

While we are on the subject of income targeting, I want to take 

this opportunity to point out to members of the committee that you 

are going to be marking up legislation on the GSEs next week, and 

we are very much hoping that you will take into consideration the 

severe affordability problems of people at 30 percent of area median income when you take up that legislation. 

And finally, H.R. 1999 gives HUD sweeping authority to exempt 

PHAs from the vast majority of Federal requirements for the public 

housing and housing voucher programs. This is the equivalent of 

enacting the super waiver that Congress has consistently rejected 

in other legislation. 

Mr. MILLER OF CALIFORNIA. If you could conclude? 

Ms. CROWLEY. The proposal resembles the Moving to Work Demonstration Program in name only. Many lessons have been learned 

from the Moving to Work programs, and I urge the committee to 

hold hearings on what we have learned or not learned from Moving 

to Work before proceeding to try to implement this program any 

further. 

[The prepared statement of Sheila Crowley can be found on page 

77 in the appendix.] 

Mr. MILLER OF CALIFORNIA. Thank you very much. 

Ms. CROWLEY. Thank you. 

Mr. MILLER OF CALIFORNIA. Mr. Tegeler? 

STATEMENT OF PHILIP TEGELER, EXECUTIVE DIRECTOR, 

POVERTY AND RACE RESEARCH ACTION COUNCIL 

Mr. TEGELER. Thank you. 

We are grateful to the members of the committee, particularly 

Chairman Ney, Ranking Member Waters, Vice Chairman Miller, 

for this opportunity to discuss our serious civil rights concerns 

about House Bill 1999. 

46

We have previously summarized these concerns in a letter to the 

House Financial Services Committee dated May 10, 2005, from the 

Lawyers Committee for Civil Rights, the Poverty and Race Research Action Council, the National Fair Housing Alliance, and the 

National Housing Law Project. This letter was entered into the 

record at last week’s hearing and is appended to my written testimony today. 

In the time we have here, I am going to focus on the adverse Fair 

Housing consequences of Title I of the bill, the Flexible Voucher 

proposal. The Section 8 Voucher Program is our one major Federal 

housing program that has the built-in capacity to promote housing 

integration and voluntary moves out of high-poverty neighborhoods. This is called housing mobility and it was part of the Section 8 program’s original design, and it has been supported by Congress and HUD for decades. 

But the current administration at HUD seems determined to disable the very features that give families the ability to move out of 

poverty. For example, over the past 2 years, HUD has stopped approving exception payment standards for moves to lower-poverty 

neighborhoods and communities. HUD has authorized some PHAs, 

public housing agencies, to refuse tenants the right to move across 

jurisdictional lines through the portability process. They have also 

encouraged the lowering of payment standards across the board 

which leads to reduced choices and greater concentration of voucher families in poor neighborhoods. 

The proposals in the bill before this committee will do even more 

to take away housing choice from low-income families. 

First, the bill would continue a version of the current voucher 

budgeting system that has been in effect for the last 2 years, which 

creates a financial conflict on the local level between the number 

and the quality of housing placements. 

In other words, since apartments in higher-poverty neighborhoods are more likely to have lower rent, local agencies now face 

pressure to serve more families in lower-cost and often lower-opportunity areas. HUD knows that this problem could be fixed without 

undue expense by designating a special reserve fund for moves to 

lower-poverty areas, but such a reserve fund does not appear in 

this bill. 

Secondly, the bill appears to restrict the longstanding portability 

rights of Section 8 families. The language of the bill suggests that 

city and suburban housing authorities must agree on a system for 

transferring vouchers before families can move. 

If this interpretation of the bill is correct, it would give suburban 

government officials or city government officials the authority to 

simply say no to additional city families seeking to rent private 

apartments in suburban towns. From a Fair Housing perspective, 

this would be outrageous, and it would tie up these local housing 

agencies in a new round of litigation. 

Finally, by removing the program’s current focus on the poorest 

city residents, the proposal to eliminate income targeting would 

steer new vouchers away from the most segregated and povertyconcentrated neighborhoods, undermining one of the voucher program’s core goals to deconcentrate poverty. 

47

Also—and I know this was raised by Representative Lee on the 

last panel—the proposal to lift the current income targeting would 

reduce the number of vouchers going to black and Latino families. 

This is a natural consequence of the way black, Hispanic, and 

white families are distributed in the population, particularly in the 

eligible low-income population. 

A bill like this, before it comes to Congress, should have had a 

racial impact and civil rights analysis. I do not believe this is something HUD did when it drafted this bill, and it had the responsibility to do that before presenting it. 

Thank you. 

[The prepared statement of Philip Tegeler can be found on page 

154 in the appendix.] 

Mr. MILLER OF CALIFORNIA. Thank you very much. 

Mr. Reilly? 

STATEMENT OF CHRISTOPHER REILLY, AREA VICE PRESIDENT, EQUITY RESIDENTIAL, BOSTON, MASSACHUSETTS, 

REPRESENTING NATIONAL MULTI HOUSING COUNCIL AND 

NATIONAL APARTMENT ASSOCIATION 

Mr. REILLY. Chairman Ney, Vice Chairman Miller, Ranking 

Member Waters, and distinguished members of this subcommittee, 

my name is Chris Reilly, and I am an area vice president for Equity Residential. 

Today, I am representing the National Multi Housing Council 

and the National Apartment Association, whose combined memberships represent the Nation’s leading firms participating in the multifamily rental housing industry. 

Equity itself owns or has interest in 939 properties containing 

199,510 units. We operate in 32 States and the District of Columbia and employ more than 6,000 people. 

NMHC and NAA commend you, Chairman Ney, for your leadership, and we thank the members of the subcommittee for your valuable work addressing affordable rental housing in America. We 

also commend the U.S. Department of Housing and Urban Development, Secretary Jackson, and the Administration for their interest 

in improving the Section 8 Housing Choice Voucher Program. 

As you are aware, we have submitted written testimony to the 

committee on the Section 8 program. I would like to underscore 

that testimony by sharing with you one of our firm’s experiences 

with the program. 

We own and manage a 143-unit property in West Roxbury, Massachusetts, that serves elderly residents. The property is now part 

of an 80-20 program that requires at least 20 percent of the apartments to be rented to low-income tenants. Before entering into the 

80-20 program, the property had been 100 percent subsidized. 

As a result, in addition to the 49 required affordable units, another 30 percent of the units are currently occupied by low-income 

residents who lived there when the property was fully subsidized 

and now receive Section 8 vouchers. 

In April of 2004, we received notice from the Boston Housing Authority that they were experiencing a shortfall in Section 8 funding 

and that to close that shortfall, they would be making a 7 percent 

across-the-board cut in Section 8 contract rents throughout their 

48

entire portfolio. Those cuts were announced and then implemented 

within 14 days. 

Before the housing authority’s rent reduction, the Section 8 contract rents at Rockingham Glen were $1,200 on a one-bedroom unit 

and $1,335 dollars for a two-bedroom unit. Comparable market 

rents were $1,200 on a one-bedroom and $1,495 respectively. After 

the housing authority’s unilateral rent reduction, the Section 8 rent 

for one-bedroom apartments was $84 below market rent, and the 

two-bedroom units were now $253 below market rent. The housing 

authority’s shotgun approach to its funding crisis resulted in a 

$76,800 reduction in annual revenues at Rockingham Glen. 

At the same time that the rental revenues were falling, the aging 

property required $422,000 in capital investments to maintain it, 

including rehabilitating the elevator systems and upgrading and 

replacing the fire alarm system. We were fortunate as a company 

to have the resources to absorb these increased capital costs, despite the rental revenue reductions. 

However, other property owners, particularly those who already 

have high mortgages, may find it difficult to do so. In fact, smaller 

owners finding themselves in a similar situation could be forced to 

choose between three alternatives, none of which benefit low-income tenants. 

First, the owner may choose to delay or cancel the repairs and 

upgrades. Second, the owner may make a business decision to 

nonrenew the leases of the Section 8 residents and instead rent the 

apartments to market-rate residents. A third option would be to try 

to obtain bank loans or other funds to pay for capital improvement. 

But as we have mentioned in our written testimony, some lenders 

may be unwilling to give these properties new loans because of the 

lenders’ concerns about the predictability of the future income 

stream. 

We agree that the Nation must meet the needs of low-and moderate-income families, and we believe that improving the Section 8 

program is the key way to do that. However, NMHC/NAA urge 

Congress and HUD to make fewer apartments available to voucher 

residents. 

We wholeheartedly support the Section 8 program as a means for 

private housing owners to provide affordable rental housing to families who need it. We believe more apartment owners would participate if the program were more stable and if the cost of renting to 

voucher residents were more comparable to the cost of serving unsubsidized residents. 

We propose the following recommendations to achieve that goal. 

First, we urge continued funding and program stabilization. Next, 

we support the changes introduced in H.R. 1999 that speed up the 

move-in process by amending the inspection procedures. This will 

reward well-managed properties and allow public housing authorities to focus their scarce resources elsewhere. 

However, we are adamantly opposed to provisions that would disconnect Section 8 Voucher rents from FMRs and instead allow 

rents to be set by the more than 2,500 public housing authorities 

across the country. This change would put property owners and 

lenders and other housing providers that operate in many States 

49

and jurisdictions in the unmanageable position of trying to keep 

track of potentially 2,500 individual programs. 

In closing, we believe the Section 8 program with the improvements I have noted will make affordable housing available to more 

Americans. 

Thank you. 

[The prepared statement of Christopher Reilly can be found on 

page 148 in the appendix.] 

Mr. MILLER OF CALIFORNIA. Thank you. 

Ms. Muha? 

STATEMENT OF DENISE MUHA, EXECUTIVE DIRECTOR, 

NATIONAL LEASED HOUSING ASSOCIATION 

Ms. MUHA. Thank you. 

Being that I am last and the lateness of the day, I think I will 

be brief and spare you repeating what has already been said. 

My written testimony, I ask, be presented for the record, and I 

just want to make a couple of brief points and spend time answering your questions. 

One of the things I want to say is that I have been in this business for 20 years, and when anybody uses the word ‘‘reform’’ in the 

context of a Government program, I get very scared, and I want to 

run the other way. I think the word ‘‘reform’’ conjures up something that is unworkable or broken, and I do not believe the Section 8 program is broken. I think it is an excellent program and 

has served its purpose well. 

If there is a problem with the program, it is the fact that the 

funding formula has been changed so dramatically that the monies 

are not getting to the housing authorities in a way that allows 

them to lease up their vouchers, and that instability affects a lot 

of different constituents. 

So the other point I want to make is that we have housing authorities here, one developer—we do not have lenders present and 

others—but there are a broader array of stakeholders who are interested in preserving the Section 8 Voucher Program. 

I want to draw your attention to a letter that we sent up—oh, 

I guess, at the end of April—as soon as HUD introduced this proposal, and it was signed by the National Association of Home 

Builders, the National Apartment Association, the Institute of Real 

Estate Management, National Housing Conference, and others, and 

I will just read a little brief part of it. 

‘‘We are concerned that the HUD’s proposal lacks specificity with 

regard to the amount and manner of funding for the voucher program. Further, the bill’s treatment of enhanced vouchers raises serious questions about ongoing preservation transactions, not to 

mention the ability of landlords, lenders, and other housing providers that operate in many States and jurisdictions to be able to 

keep track of potentially 2,000 individual programs. We strongly 

believe that the current Housing Choice Voucher Program is successful in providing housing opportunities for eligible families.’’

And, with that, I will conclude. 

[The prepared statement of Denise Muha can be found on page 

135 in the appendix.] 

Mr. MILLER OF CALIFORNIA. Thank you very much. 

50

Chairman Ney? 

Mr. NEY. Thank you, Mr. Chairman. 

I apologize. I had a meeting I absolutely could not get out of. So 

I could not ask questions of the first panel. I know the first panel 

quite well, and I can see them down the road at home. 

But let me just ask one generic question, which I would have 

asked of the first panel. 

Again, thank you for coming today. 

Whenever we change something, whether, you know, it is the 

first change that was going to occur in the block granting or this 

change, internally, what type of havoc does this create or does not 

create and does it cost money once you make these changes? Does 

it cost money to make changes such as the proposal? Any reflections on that from anyone? It is a generic question. I just wonder 

does it cause internal problems. 

Mr. NACKERMAN. Chairperson Ney, in speaking, we have about 

10,000 total Section 8 vouchers and about 2,500 public housing and 

a staff of close to 150. The key point is if the elements of this bill 

go through, those changes would vary from housing authority to 

housing authority. 

In most cases, including some of the Moving to Work Demonstration sites, as demonstrated by some of those sites, those changes 

could include a reduction in staffing levels. As an example, if you 

do 75 percent fewer inspections, you need 75 percent fewer inspectors. 

So a lot of the changes are administrative. I think they are fairly 

easy to make as far as those types of changes, staffing impact, and 

the costs would be less to the agencies. 

Chairman NEY. Do you want to add to that? 

Ms. GLOVER. Well, of course, whenever you change these things 

deeply incessantly, there are changes in terms of re-engineering financial systems, inspection systems, and so there are costs associated with any type of change. 

One of the things that we have not seen are changes at HUD in 

terms of re-engineering their system so that, as these things walk 

lockstep, we are not doing things and then having to make adjustments with either the field office or what-have-you. 

So, if reforms are made, I think they have to be looked at for the 

long term so that when systems are re-engineered—and there is 

some of that, and you spend money to do it—they can actually be 

sustained and improved rather than having to make abrupt 

changes in direction, which is really what we have been going 

through over the last several years. 

Mr. NEY. Thank you, Mr. Chairman. 

Mr. MILLER OF CALIFORNIA. Ms. Waters? 

Ms. WATERS. I would like to thank all of the members of the 

panel for being here today. I guess I could ask you a lot of questions, but I do not agree with this bill at all. It just do not make 

good sense. You know, if I had my way, I would just put more 

money in the program. 

We have waiting lists of people who have no place to live, and 

even though we complain about the increased costs or the rising 

costs, well, people increasingly do not have anyplace to live, and so 

I would fund all of the vouchers that were needed. 

51

I would try and do something about public housing and make it 

more livable. I would try and do something about real job training 

programs and assistance to these young people in many of these 

large housing projects in the city. 

For the people who get jobs, I would go back to the old working 

mother’s budget that we had before Ronald Reagan that allowed 

people who have a job for the first time not to be cut off welfare. 

In the same way with increased rent, I think people need a break. 

If you get a job, I do not think your rent needs to increase immediately; maybe, you know, after 6 months, a year or so, once somebody has gotten stable in a job and they have met the increased 

costs of having to buy new clothes and all of that to be in the workplace. 

I certainly would not deal with this portability in the way that 

this bill is doing. I think it is really problematic, discriminatory, 

and maybe even racist. So the bill is just going in the wrong direction, and while one may make a case for flexibility, again, it is 

about the mission. You know, why do we have these programs to 

begin with, and are we going to undermine the mission of these 

programs by creating so-called flexibility? 

I think with flexibility comes a lot of uncertainty. I really do not 

know what it means to have so much flexibility that as you move 

from one county or one area to the next, things are so drastically 

different. How do you reconcile all of that? 

So, you know, we disagree, but we have to work to try and make 

sense out of all of this so-called reform. I think we have some willing partners on the other side of the aisle. They may not go as far 

as Maxine Waters would go, but we are going to work with them 

to see if we cannot eliminate a lot of this and see if we cannot do 

some improvements in ways that will be helpful to you. 

I wish I could give you high hopes that there was going to be 

more money, but, even though they will not like me to say this, the 

money is gone. We have given it away in tax cuts to rich people, 

the richest 1 percent in America, and we have very expensive wars 

in Afghanistan and in Iraq. So, you know, philosophically, we have 

problems that we have to overcome. 

Let me just say this—and even to the landlords—we had great 

cooperation with landlords in Los Angeles trying to solve the problems that we had there, and so I think there are some ways that 

we can work with landlords to make it more attractive to be in the 

program. 

I do not think we should try and starve you or to squeeze you 

to death. I think we should try and pay fair rents, and I think we 

should eliminate some of the paperwork, and I think we should 

have inspections in a cycle that makes good sense. So I am not, you 

know, opposed to any of that. 

I am going to work with my colleagues. Again, I think both Mr. 

Ney and Mr. Miller can be worked with. He is on message today, 

but we are going to get him off message. 

Mr. NEY. You think so? 

Ms. WATERS. We are going to work with him so that we are able 

to serve all of these people who need it so desperately. 

Again, thank you very much for being here. I really do appreciate 

the tough problems that you have. 

52

I have worked with public housing in Los Angeles, created training programs. I used to use the Wagner-Peyser monies that came 

from the Federal Government in ways that nobody understood but 

me, and we were able to try and connect people with the old 

GEPTA program only to find out that GEPTA did not have much 

that worked at the time. 

But my greatest desire—my greatest desire in all of this—is to, 

number one, get some temp opportunities away from public housing during summer months to give the kids a break. 

My greatest desire is to have some real job training programs 

where people could find jobs and to make that public housing 

project in some areas a lot more livable, perhaps in ways that you 

have done in Atlanta. 

Mr. MILLER OF CALIFORNIA. The lady’s time has expired. 

Ms. WATERS. He is tapping. He is tapping. So I have to say 

thank you and good-bye. I yield back the balance of my time. 

Mr. MILLER OF CALIFORNIA. I believe to have a viable Section 8 

market, we need an affordable move-up marketplace, and I have 

been in the building industry for over 30 years, and I can write a 

book on how the Federal, State and local governments have negatively impacted the affordable housing market and created a real 

problem for us in this country. 

Mr. Nackerman, how would you say this legislation would benefit 

or impact your local housing authority? 

Mr. NACKERMAN. Well, I think our county, which is the largest 

geographical county in the United States, we are in solid fiscal condition in all our programs. We have not experienced some of the 

problems in Section 8 that many authorities did last year. As my 

friend in Santa Clara, San Jose says, it is like bungee jumping and 

almost hitting the ground, but bouncing back up. 

Our greatest fear is really that these programs are not reformed, 

but that the budgets stay static or are cut in future years. That to 

us is a recipe for disaster. If you want to see fewer people housed 

in this country under these programs, do not pass the elements of 

this bill because each agency needs the flexibility, especially the 

agencies like City of Alameda, which was another example of an 

authority that really had trouble with the Section 8 funding, unitbased versus overleasing, et cetera. 

So, in our county, we would likely take some of the more progressive elements of this bill, such as encouraging more homeownership 

opportunities, such as removing a few of the disincentives to work. 

Again, those disincentives are, ‘‘Do not report your income to us 

and we will not raise your rent. If you report your income to us, 

we will raise your rent. If you do not report it, HUD will call that 

fraud,’’ you know, that type of issue. 

Just to give you an example of that, how ridiculous some of these 

regulations are, at all of these housing authorities, unless they 

have adopted a recent sort of escape hatch, if a senior citizen has 

$50 in the bank in a savings account, once a year, they have to 

bring us proof of that $50. 

They cannot bring their Bank of America statement. That is not 

okay. We have to get it directly from the bank to prove they have 

that asset. That costs $10. Now that senior’s savings is reduced by 

53

20 percent. That is how ridiculous some of these constraints that 

I mentioned are, the choke hold on these programs are. 

So in our county, we would likely combine some of the funding 

that we would like to become a Moving to Work site. We would 

likely use some of that combination of funding to create more affordable housing in our county. We presently build about 100 new 

units a year of new affordable housing in all areas, including the 

higher-income areas, and we would probably reduce our inspections. 

We would add more self-sufficiency elements for residents, more 

incentives, probably things like matching funds for homeownership, 

IDA accounts where the authority can actually match what the 

resident is saving in rent. So our agency is quite a bit different. 

On that note, we have 42 residents who were previously homeless before they moved into our program. That is different than 

Central Boston. However, you know, we are not Newport Beach, as 

Ms. Waters knows. San Bernardino has the second highest crime 

rate in California, so out of the 12,000 families we serve, 41, 43, 

depending on how you count it, were previously homeless. That differs from agency to agency, which is why there is so much contention in this one-size-fits-all approach that HUD has taken. 

Mr. MILLER OF CALIFORNIA. Thank you. 

Ms. Crowley, you referred to that 90-60, and it really concerns 

you. I know you would like the 75-30, but the intent of 90-60 is to 

say you have to spend at least 90 percent of it at the 60 percent 

or below. Why do you think that is so negative? 

Ms. CROWLEY. Well, precisely because of the funding uncertainty 

that is facing housing authorities. 

Mr. MILLER OF CALIFORNIA. So is funding authority that your 

concerned with in the future, not necessarily us wanting to make 

sure that at least that amount is spent below that level? 

Ms. CROWLEY. Under the current income targeting us, we would 

like for it to all be more deeply targeted. Obviously, if you shifted 

it in this way, the access for people who are extremely low income 

would be reduced if the housing authority were faced with those 

kind of choices. 

Mr. MILLER OF CALIFORNIA. So the concern is that they might be 

faced with a choice if funding’s decreased in the future? That is the 

basic concern? 

Ms. CROWLEY. Yes. 

Mr. MILLER OF CALIFORNIA. I believe we needed to set some criteria. We wanted to be flexible, but we had to have a criteria. 

Ms. CROWLEY. Let me just add a bit about why it is that we have 

75 percent of vouchers that go to extremely low-income people in 

the law now. In the development of QWHRA, there was a huge debate about exactly who should live in public housing, and we relaxed the income targeting. 

Mr. MILLER OF CALIFORNIA. I am going to have to conclude my 

questioning. We are running out of time. We have 5 minutes, and 

I am going to give Ms. Lee 2-1/2 minutes and Mr. Davis 2-1/2 minutes. 

Ms. LEE. Thank you, Mr. Chairman. I will be very quick. 

Oftentimes, accusations that the race card is being played are 

made when one views public policy impacts on minorities, espeVerDate 0ct 09 2002 14:59 Jan 19, 2006 Jkt 000000 PO 00000 Frm 00059 Fmt 6633 Sfmt 6633 G:\DOCS\109.30 RODNEY
54

cially on African Americans, but I must say that institutional racism is alive and well in America unfortunately. 

So in advance of this bill moving, which I hope, of course, it does 

not, I wanted to ask Mr. Tegeler to comment on what you said in 

your testimony, that if this bill passes, you would expect about 

65,000 black and Latino families to lose vouchers and, over the 

course of 5 to 10 years, 300,000 vouchers would be taken away 

from very low-income African-American and Latino families. I 

mean, is that a fact? 

Mr. TEGELER. One can quibble with the numbers, but the basic 

analysis, I think, is sound. Black and Latino families are more 

heavily represented in the lower-income tiers of the eligible family 

groups eligible for Section 8. Whites are more represented in the 

higher-income tiers. So if you lift income targeting, as this bill allows public housing agencies to do, the natural consequence will be 

that kind of shift from black and Hispanic families to white families in the program. 

We are talking about every year turnover in the program generates about 10 percent to 11 percent of the program quantity of 

vouchers. You see over 200,000 families a year coming into the program. It is those families that are subject to income targeting, and 

the assumption we make is that if all PHAs lifted income targeting, 

then you would see that shift. 

Ms. LEE. Okay. You mentioned that the racial impact and civil 

rights analysis was not conducted on this bill, and is that a requirement, and if it is a requirement, then I do not know, Mr. 

Chairman, maybe we need to try to figure out how to have that 

done. It is not a requirement? 

Ms. WATERS. It is not a requirement for racial impact, but it 

should be common sense. 

Mr. TEGELER. So it has been our duty, Representative Lee, to affirm——

Mr. MILLER OF CALIFORNIA. Well, look it. I mean, I would be 

happy to work with you. Anything you believe is racial profiling or 

any way, I would be happy to work with you on that. 

Ms. LEE. Thank you very much, Mr. Chairman. I appreciate that. 

Mr. MILLER OF CALIFORNIA. Mr. Scott? 

Mr. SCOTT. Thank you very much, Mr. Chairman. 

I have two lines of questioning. One, I first want to ask Ms. Glover, and then I want to come back to you, Mr. Tegeler. Is that right? 

Ms. Glover, in your testimony, you stated that the voucher programs have not served targeted populations well because the program is focused on numbers and not outcomes, if you remember my 

earlier comment about Mr. Jackson and the thrust of the HUD in 

that direction. 

Given that, can you provide the Congress with any suggestions 

about how the voucher program can be changed to better address 

needs rather than merely being a program of numbers and objectives. 

Ms. GLOVER. Absolutely. And I would like to offer the following 

outcomes for consideration. 

One, I think deconcentrating poverty is critically important. I 

think continuing to serve the lowest-income families, below 30 percent. I want to address this question because it has not been anVerDate 0ct 09 2002 14:59 Jan 19, 2006 Jkt 000000 PO 00000 Frm 00060 Fmt 6633 Sfmt 6633 G:\DOCS\109.30 RODNEY
55

swered. But what happens here is that if the performance requirement is that the agencies continue to serve the same number of 

families before the reforms and after, by just sheer attrition, the 

money will not support continuing to serve families below 30 percent because you would have to start moving up the income tier in 

order to meet the performance standard. 

So what happens is the monies are block granted and reduced, 

and you have to serve the same number of families. You will by necessity have to stop serving families at the lower-income tier, which 

I do believe will result in an increase in homelessness, and the concern also about seniors and disabled persons on fixed incomes who 

have no earning upside. If reform eliminates the safety net for 

them, after, I think, it is 2009, I think that would be a travesty. 

Mr. SCOTT. Thank you. 

Mr. Tegeler, your testimony is very disturbing, and you raised 

some very important points. You know, if you feel and if it is documented that their civil rights are being violated with this piece of 

legislation, then I am sure the chairman would not want to push 

forward a piece of legislation that would do that. 

Mr. MILLER OF CALIFORNIA. If the gentleman could give me an 

example of where he believes that is occurring, I would appreciate 

that. 

Mr. SCOTT. Yes. 

Mr. MILLER OF CALIFORNIA. We are going to have to wrap up. I 

am sorry. We have votes. 

Very, very briefly. Very brief. 

Mr. TEGELER. Very brief. 

Mr. MILLER OF CALIFORNIA. You can submit additional comments. 

Mr. TEGELER. Very brief. No housing program is race neutral or 

civil rights neutral. That is clear. But this bill has such serious 

consequences. My only point is that it should be sent back for a 

closer look. 

Mr. MILLER OF CALIFORNIA. We would love to work with you on 

that. 

Mr. SCOTT. Okay. Thank you, Mr. Chairman. 

Mr. MILLER OF CALIFORNIA. I ask unanimous consent to include 

in the record the statement of the Housing Authority of Los Angeles County, the statement of the National Council of State Housing 

Agencies, the statement of the National Association of Housing Redevelopment Officials. 

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. 

Any other comments? 

The meeting is adjourned. 

[Whereupon, at 5:01 p.m., the subcommittee was adjourned.] 

(57)

A P P E N D I X

May 17, 2005

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