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44–181 PDF 2008

EXAMINING THE ROLES AND RESPONSIBILITIES 

OF HUD AND FEMA IN RESPONDING TO THE 

AFFORDABLE HOUSING NEEDS OF GULF COAST 

STATES FOLLOWING EMERGENCIES 

AND NATURAL DISASTERS 

JOINT HEARING 

BEFORE THE

SUBCOMMITTEE ON 

HOUSING AND COMMUNITY OPPORTUNITY 

OF THE

COMMITTEE ON FINANCIAL SERVICES 

AND THE

SUBCOMMITTEE ON 

EMERGENCY COMMUNICATIONS, 

PREPAREDNESS, AND RESPONSE 

OF THE

COMMITTEE ON HOMELAND SECURITY 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED TENTH CONGRESS 

SECOND SESSION 

JUNE 4, 2008 

Printed for the use of the Committee on Financial Services and the Committee 

on Homeland Security 

Serial No. 110–116 

(Committee on Financial Services) 

Serial No. 110–119 

(Committee on Homeland Security) 

( 

(II) 

HOUSE COMMITTEE ON FINANCIAL SERVICES 

BARNEY FRANK, Massachusetts, Chairman 

PAUL E. KANJORSKI, Pennsylvania 

MAXINE WATERS, California 

CAROLYN B. MALONEY, New York 

LUIS V. GUTIERREZ, Illinois 

NYDIA M. VELA ́ ZQUEZ, New York 

MELVIN L. WATT, North Carolina 

GARY L. ACKERMAN, New York 

BRAD SHERMAN, California 

GREGORY W. MEEKS, New York 

DENNIS MOORE, Kansas 

MICHAEL E. CAPUANO, Massachusetts 

RUBE ́ N HINOJOSA, Texas 

WM. LACY CLAY, Missouri 

CAROLYN MCCARTHY, New York 

JOE BACA, California 

STEPHEN F. LYNCH, Massachusetts 

BRAD MILLER, North Carolina 

DAVID SCOTT, Georgia 

AL GREEN, Texas 

EMANUEL CLEAVER, Missouri 

MELISSA L. BEAN, Illinois 

GWEN MOORE, Wisconsin, 

LINCOLN DAVIS, Tennessee 

PAUL W. HODES, New Hampshire 

KEITH ELLISON, Minnesota 

RON KLEIN, Florida 

TIM MAHONEY, Florida 

CHARLES A. WILSON, Ohio 

ED PERLMUTTER, Colorado 

CHRISTOPHER S. MURPHY, Connecticut 

JOE DONNELLY, Indiana 

BILL FOSTER, Illinois 

ANDRE ́ CARSON, Indiana 

JACKIE SPEIER, California 

DON CAZAYOUX, Louisiana 

TRAVIS CHILDERS, Mississippi 

SPENCER BACHUS, Alabama 

DEBORAH PRYCE, Ohio 

MICHAEL N. CASTLE, Delaware 

PETER T. KING, New York 

EDWARD R. ROYCE, California 

FRANK D. LUCAS, Oklahoma 

RON PAUL, Texas 

STEVEN C. LATOURETTE, Ohio 

DONALD A. MANZULLO, Illinois 

WALTER B. JONES, JR., North Carolina 

JUDY BIGGERT, Illinois 

CHRISTOPHER SHAYS, Connecticut 

GARY G. MILLER, California 

SHELLEY MOORE CAPITO, West Virginia 

TOM FEENEY, Florida 

JEB HENSARLING, Texas 

SCOTT GARRETT, New Jersey 

GINNY BROWN-WAITE, Florida 

J. GRESHAM BARRETT, South Carolina 

JIM GERLACH, Pennsylvania 

STEVAN PEARCE, New Mexico 

RANDY NEUGEBAUER, Texas 

TOM PRICE, Georgia 

GEOFF DAVIS, Kentucky 

PATRICK T. MCHENRY, North Carolina 

JOHN CAMPBELL, California 

ADAM PUTNAM, Florida 

MICHELE BACHMANN, Minnesota 

PETER J. ROSKAM, Illinois 

THADDEUS G. McCOTTER, Michigan 

KEVIN McCARTHY, California 

DEAN HELLER, Nevada 

JEANNE M. ROSLANOWICK, Staff Director and Chief Counsel 

(III) 

SUBCOMMITTEE ON HOUSING AND COMMUNITY OPPORTUNITY

MAXINE WATERS, California, Chairwoman 

NYDIA M. VELA ́ ZQUEZ, New York 

STEPHEN F. LYNCH, Massachusetts 

EMANUEL CLEAVER, Missouri 

AL GREEN, Texas 

WM. LACY CLAY, Missouri 

CAROLYN B. MALONEY, New York 

GWEN MOORE, Wisconsin, 

KEITH ELLISON, Minnesota 

CHRISTOPHER S. MURPHY, Connecticut 

JOE DONNELLY, Indiana 

MICHAEL E. CAPUANO, Massachusetts 

CHARLES A. WILSON, Ohio 

DON CAZAYOUX, Louisiana 

SHELLEY MOORE CAPITO, West Virginia 

STEVAN PEARCE, New Mexico 

PETER T. KING, New York 

JUDY BIGGERT, Illinois 

CHRISTOPHER SHAYS, Connecticut 

GARY G. MILLER, California 

SCOTT GARRETT, New Jersey 

RANDY NEUGEBAUER, Texas 

GEOFF DAVIS, Kentucky 

JOHN CAMPBELL, California 

THADDEUS G. McCOTTER, Michigan 

KEVIN McCARTHY, California 

COMMITTEE ON HOMELAND SECURITY 

BENNIE G. THOMPSON, Mississippi, Chairman 

LORETTA SANCHEZ, California 

EDWARD J. MARKEY, Massachusetts 

NORMAN D. DICKS, Washington 

JANE HARMAN, California 

PETER A. DEFAZIO, Oregon 

NITA M. LOWEY, New York 

ELEANOR HOLMES NORTON, District of 

Columbia 

ZOE LOFGREN, California 

SHEILA JACKSON LEE, Texas 

DONNA M. CHRISTENSEN, U.S. Virgin Islands 

BOB ETHERIDGE, North Carolina 

JAMES R. LANGEVIN, Rhode Island 

HENRY CUELLAR, Texas 

CHRISTOPHER P. CARNEY, Pennsylvania 

YVETTE D. CLARKE, New York 

AL GREEN, Texas 

ED PERLMUTTER, Colorado 

BILL PASCRELL, JR., New Jersey 

PETER T. KING, New York 

LAMAR SMITH, Texas 

CHRISTOPHER SHAYS, Connecticut 

MARK E. SOUDER, Indiana 

TOM DAVIS, Virginia 

DANIEL E. LUNGREN, California 

MIKE ROGERS, Alabama 

DAVID G. REICHERT, Washington 

MICHAEL T. MCCAUL, Texas 

CHARLES W. DENT, Pennsylvania 

GINNY BROWN-WAITE, Florida 

GUS M. BILIRAKIS, Florida 

DAVID DAVIS, Tennessee 

PAUL C. BROUN, Georgia 

CANDICE S. MILLER, Michigan 

JESSICA HERRERA-FLANIGAN, Staff Director & General Counsel 

ROSALINE COHEN, Chief Counsel 

MICHAEL TWINCHEK, Chief Clerk 

ROBERT O’CONNOR, Minority Staff Director 

SUBCOMMITTEE ON EMERGENCY COMMUNICATIONS, PREPAREDNESS, 

AND RESPONSE 

HENRY CUELLAR, Texas, Chairman 

LORETTA SANCHEZ, California 

NORMAN D. DICKS, Washington 

NITA M. LOWEY, New York 

ELEANOR HOLMES NORTON, District of 

Columbia 

DONNA M. CHRISTENSEN, U.S. Virgin Islands 

BOB ETHERIDGE, North Carolina 

BENNIE G. THOMPSON, Mississippi (Ex Officio) 

CHARLES W. DENT, Pennsylvania 

MARK E. SOUDER, Indiana 

DAVID DAVIS, Tennessee 

TOM DAVIS, Virginia 

CANDICE S. MILLER, Michigan 

PETER T. KING, New York (Ex Officio) 

CRAIG SHARMAN, Director 

NICHOLE FRANCIS, Counsel 

BRIAN TURBYFILL, Clerk 

HEATHER HOGG, Minority Senior Professional Staff Member 

(V) 

C O N T E N T S 

Page 

Hearing held on: 

June 4, 2008 ...................................................................................................... 1 

Appendix: 

June 4, 2008 ...................................................................................................... 53 

WITNESSES 

WEDNESDAY, JUNE 4, 2008 

Blakely, Dr. Edward, Executive Director, Office of Recovery and Development 

Administration, City of New Orleans ................................................................. 39 

Castillo, Carlos J., Assistant Administrator, Disaster Assistance Directorate, 

Federal Emergency Management Agency .......................................................... 10 

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

for Justice ............................................................................................................. 37 

Ramirez, Saul N., Jr., Executive Director, National Association of Housing 

and Redevelopment Officials ............................................................................... 36 

Riddel, Jeffrey H., Director, Office of Capital Improvements, Public and Indian Housing, U.S. Department of Housing and Urban Development ............ 12 

Tuggle, Laura, Managing Attorney, Housing Unit, New Orleans Legal Assistance Corporation, Southeast Louisiana Legal Services .................................... 41 

APPENDIX 

Prepared statements: 

Blakely, Dr. Edward ......................................................................................... 54 

Castillo, Carlos J. ............................................................................................. 62 

Morse, Reilly ..................................................................................................... 73 

Ramirez, Saul ................................................................................................... 241 

Riddel, Jeffrey H. .............................................................................................. 257 

Tuggle, Laura .................................................................................................... 260 

ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD

Frank, Hon. Barney: 

Written responses to questions submitted to Carlos J. Castillo ................... 276 

Written responses to questions submitted to Jeffrey H. Riddel ................... 288 

Cuellar, Hon. Henry: 

Written responses to questions submitted to Jeffrey H. Riddel ................... 306 

Dent, Hon. Charles W.: 

Written responses to questions submitted to Jeffrey H. Riddel ................... 309 

(1) 

EXAMINING THE ROLES AND 

RESPONSIBILITIES OF HUD 

AND FEMA IN RESPONDING 

TO THE AFFORDABLE HOUSING 

NEEDS OF GULF COAST STATES 

FOLLOWING EMERGENCIES AND 

NATURAL DISASTERS 

Wednesday, June 4, 2008 

U.S. HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON HOUSING AND

COMMUNITY OPPORTUNITY, 

COMMITTEE ON FINANCIAL SERVICES, 

AND

SUBCOMMITTEE ON EMERGENCY

COMMUNICATIONS, PREPAREDNESS, 

AND RESPONSE, 

COMMITTEE ON HOMELAND SECURITY, 

Washington, D.C. 

The subcommittees met, pursuant to notice, at 10:13 a.m., in 

room 2128, Rayburn House Office Building, Hon. Maxine Waters 

[chairwoman of the Subcommittee on Housing and Community Opportunity] presiding. 

Members present from the Subcommittee on Housing and Community Opportunity: Representatives Waters, Lynch, Cleaver, 

Green, Maloney; and Capito. 

Members present from the Subcommittee on Emergency Communications, Preparedness, and Response: Representatives Cuellar, 

Sanchez, Dicks, Lowey, Holmes Norton, Christensen, Etheridge; 

Dent, and Souder. 

Ex officio: Chairman Frank and Chairman Thompson. 

Also present: Representative Watt. 

Chairwoman WATERS. This joint hearing of the Subcommittee on 

Housing and Community Opportunity and the Subcommittee on 

Emergency Communications, Preparedness, and Response will 

come to order. 

Good morning, ladies and gentlemen. Before we begin, I would 

like to thank Mr. Cuellar and Mr. Thompson for requesting this 

joint hearing on ‘‘Examining the Roles and Responsibilities of HUD 

and FEMA in Responding to the Affordable Housing Needs of Gulf 

Coast States Following Emergencies and Natural Disasters.’’ 

2 

As we saw several weeks ago during a hearing of the subcommittee on the use of Community Development Block Grant 

(CDBG) funds in the Gulf Coast, the region is far from a full recovery. That hearing revealed the challenges facing Gulf Coast States 

in using CDBG funds to replace their affordable housing stock. 

While CDBG funding has historically been used to rebuild and repair affordable housing damaged or destroyed as a result of natural 

disasters, it seems that there is no corollary funding source for the 

reconstruction of public housing following a disaster. This lack of 

funding only compounds the Nation’s divestment in public housing 

and the loss of public housing units. 

The 2005 hurricanes were the deadliest and most expensive 

storms on record. Over 1 million housing units were damaged along 

the Gulf Coast as a result of the hurricanes in 2005, with half of 

the damaged units located in Louisiana, which bore the brunt of 

Hurricane Katrina. Total catastrophic losses from Hurricane 

Katrina are estimated at $40.6 billion with uninsured losses much 

higher. 

Thousands of public housing units were damaged during these 

storms. For example, in Mississippi, 2,695 units were damaged or 

destroyed. In New Orleans, 4,144 public housing units were damaged or destroyed. While most of the units in New Orleans could 

have been rehabilitated, HUD embarked upon the path of demolishing over 4,500 units. But the redevelopment of the public housing units in Mississippi and New Orleans has a dedicated funding 

source. Mississippi is using $105 million in CDBG funds to rebuild 

while HUD has secured over $700 million to fund its plan for New 

Orleans public housing. 

While the funding for these projects is clear cut, in general funding resources for public housing units damaged through disasters 

is not. Because any public housing unit damaged or destroyed as 

the result of a disaster should be replaced on a one-for-one basis, 

this lack of funding resources directly contributes to the loss of 

public housing units. 

Section 9(k) of the U.S. Housing Act requires the Secretary of 

HUD to set aside up to 2 percent of the total amount made available under the public housing operating fund for the repair of public housing units damaged during disasters and other emergencies. 

However, this funding has never been made available. The funding 

year 2000 appropriations act and subsequent appropriations acts 

have contained language expressly forbidding the use of funds for 

this purpose. Although Congress has provided annual emergency 

capital needs funding for the repair of damaged public housing 

units, these funds have been subject to recapture. Moreover, the 

Administration’s funding year 2009 budget recommended no funding for emergency capital needs. 

Unfortunately, the memorandum of understanding entered into 

between HUD and FEMA does not allow housing authorities to 

apply for emergency funds from FEMA’s Section 406 program 

which can be used to repair other structures. I am curious to know 

why, given the extremely limited funding resources available for 

the repair of damaged public housing units, the memorandum of 

understanding between HUD and FEMA has not been updated to 

3 

allow housing authorities to use Section 406 funds for repairs. I 

hope that our witnesses can shed some light on this situation. 

Also, I am concerned about the current state of affordable housing in the Gulf Coast. Specifically, I am looking forward to hearing 

from our FEMA witnesses on the Agency’s progress with moving 

families out of trailers that have tested positive for formaldehyde, 

and I am extremely concerned about FEMA’s draft 2008 hurricane 

season plan which states that contrary to public assertions made 

by Administrator Paulison, FEMA plans to house families in trailers as a last resort in the event of hurricanes this year. We all 

know the dangers of this toxic chemical, and we are well aware of 

FEMA’s rush to empty out these trailers because of the proven 

health risk associated with formaldehyde exposure. Given these 

facts, I am eager to hear why the Agency is still considering trailers as a viable housing option following disasters. 

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

on the roles and responsibilities of HUD and FEMA in responding 

to the affordable housing needs of Gulf Coast States following 

emergencies and natural disasters. 

I would now like to recognize Mr. Cuellar, the chairman of the 

for an opening statement, thank you. 

Chairman CUELLAR. Good morning, and thank you. I would like 

to thank Chairwoman Waters for joining our subcommittee to have 

this important hearing. 

Chairwoman Waters, you have been a national leader in housing 

issues. We recognize and we appreciate the work that you have 

done and we are glad that we are able to come together today to 

continue to exercise strong congressional oversight over emergency 

housing issues. I would like to take this time to recognize both the 

chairman of the full Financial Services Committee and the chairman of the Homeland Security Committee—Mr. Barney Frank and 

Mr. Bennie Thompson—for their commitment to and leadership on 

this important issue. 

As I see it, there are two goals we hope to achieve with this hearing. First, we need to get a status report on where we are in addressing the housing crisis along the Gulf Coast. Nearly 3 years 

after Hurricanes Katrina and Rita struck, the people along the 

Gulf Coast are still coping with their aftermath and struggling to 

recover. There is no doubt that our Nation has faced unprecedented 

challenges in our efforts to effectively and safely house the victims 

of these disasters. 

While some progress has been made, I believe our Federal Government can and should move faster. As of May 23, 2008, there are 

23,412 temporary housing units still occupied by disaster victims in 

the Gulf Coast. We are talking about 3 years after the disaster hit. 

Those numbers are just too high. 

Second, I believe this hearing will give the members the opportunity to examine whether plans are being developed to ensure 

that our Nation will be better prepared to meet the housing needs 

resulting from future disasters. In order for our Nation to truly be 

resilient, the lessons we have learned from that cannot be ignored. 

We have to learn from the past and we have to learn those lessons. 

One of the most striking lessons we learned from Katrina and 

Rita was that this country was ill-prepared to provide emergency 

4 

housing to victims of a major disaster. To house the number of individuals who lost their homes during Katrina and Rita, FEMA 

was forced to hastily purchase thousands of trailers. As we all 

know by now, many of those units were unsafe, and we will be 

dealing with the health ramifications of this for years to come. 

While we cannot turn back the clock on this particular situation, 

we can make certain that this problem will not be encountered during future disasters. The Post-Katrina Emergency Management Reform Act required FEMA, along with other Federal agencies and 

nonprofit organizations, to develop a national disaster housing 

strategy. The national disaster housing strategy was due to Congress by July of 2007. Here we are almost a year later and we are 

still waiting for that strategy. We cannot develop the solutions 

without having this national disaster housing strategy, and we 

hope we will hear from Mr. Castillo and other folks about this 

strategy. 

While I recognize the fact that the ongoing efforts to resolve the 

temporary housing issues in the Gulf Coast, as of late the strategy 

release, I still feel that a year delay is just simply too long. I cannot stress how important plans like this are in ensuring that all 

key players will be ready to act when the next emergency housing 

crisis is upon us. 

I want to thank again all of the witnesses for both panels for 

being here today. I thank them for their testimony, and Madam 

Chairwoman, I yield back the balance of my time. 

Chairwoman WATERS. Thank you very much, and I will now recognize Ranking Member Dent of the Subcommittee on Emergency 

Communications, Preparedness, and Response for 5 minutes for an 

opening statement. 

Mr. DENT. Thank you, Madam Chairwoman. Today’s hearing addresses the important issue of how Federal, State, and local governments work together to meet the emergency and long-term 

housing needs of disaster victims. FEMA is authorized by law to 

provide temporary housing assistance to disaster victims for a period of up to 18 months unless extended. Due to the devastation 

caused along the Gulf Coast after Hurricane Katrina in 2005, 

FEMA continues to provide housing assistance to storm victims almost 3 years later. 

While FEMA and the Department of Housing and Urban Development, HUD, are working together to find long-term solutions to 

the needs of disaster victims, this task is proving extraordinarily 

difficult. As we will hear from our witnesses, one major factor affecting the ability of storm victims to pursue long-term housing is 

a severe shortage of rental properties in the hardest-hit areas. 

Those properties that are available are much more expensive than 

before the storm, placing them beyond the financial means of many 

Katrina evacuees. 

In addition to moving people to rental units, hotels, and motels, 

FEMA is testing new types of housing for disaster victims through 

the alternative housing pilot program. The so-called ‘‘Katrina cottage’’ is one such form of housing being developed and deployed 

through this program. While the cottage offers a safer, more spacious, and more permanent alternative to travel trailers or mobile 

homes, some local jurisdictions are unhappy with their use and are 

5 

preventing their construction. Meeting the housing needs of disaster victims requires a coordinated strategy involving not only 

FEMA and HUD, but also the appropriate State and local authorities. 

I look forward to an update from FEMA and HUD on the development of the national disaster housing strategy that was required 

by the Post-Katrina Emergency Management Reform Act of 2006. 

I also look forward to discussing with our witnesses how all levels 

of government can work together to more effectively facilitate the 

recovery process and ensure disaster victims are able to find permanent housing as quickly as possible. 

And with that, Madam Chairwoman, I thank you and I yield 

back. 

Chairwoman WATERS. Thank you very much. I will now recognize our Housing and Community Opportunity Subcommittee 

Ranking Member Capito for 5 minutes for an opening statement. 

Mrs. CAPITO. Thank you, Madam Chairwoman, and thank you 

for holding this joint hearing. In the interest of time, and since I 

just walked in, I will just ask that I can submit my statement for 

the record and yield back the balance of my time. 

Chairwoman WATERS. Thank you very much. I will now recognize Mr. Cleaver for 3 minutes for an opening statement. 

Oh, I am sorry, Mr. Frank is here. Mr. Frank and Mr. Thompson, the chairmen of the Financial Services Committee and the 

Homeland Security Committee, are responsible for helping to bring 

these subcommittees together to deal with this important subject 

that we have today, so I would like to recognize Mr. Frank at this 

time for as many minutes as he would like to take. 

Chairman FRANK. I thank you, Madam Chairwoman, and I appreciate that, even though I think technically your first sentence 

was, ‘‘I’m sorry Mr. Frank is here.’’ 

[Laughter] 

Chairman. FRANK But I will overlook that. The chair of this subcommittee, the gentlewoman from California, has been unequaled 

in her zeal to right one of the great wrongs in the record, I believe, 

of the American government, and that is the failure to come to the 

aid of hardworking low-income people who were the victims of a 

natural disaster. 

We have arguments back and forth when we deal with issues of 

alleviation of poverty and hardship about whether or not certain 

individuals were culpable or not. I generally believe that some on 

the other side exaggerate the individual fault that has resulted in 

these conditions, but there is no room for argument in this case. 

We are talking about people who are living and working in communities in Louisiana and along the coast of Mississippi who were 

devastated by a natural phenomenon for which no one, with the 

possible exception of a few nut preachers, could blame them. 

And what we have is the government of the most powerful and 

wealthiest nation in the history of the world doing very little to alleviate their plight not only in the immediate aftermath, which was 

well-documented, but today. There are people living today in inadequate housing because of the failure of this government to respond. There are people living in the city of our colleague from 

Texas, Mr. Green, and the people of Houston have been noble in 

6 

their willingness to open their arms to people, but they should not 

have been asked to do that for this long. 

I can think of few comparable failures in our history on the part 

of this government. Now we are here to deal with one of the causes. 

Some of it, I think, has to do with individual culpability but that 

is by no means the whole story, and part of it is, I believe, the division of responsibility between the two Agencies represented here. 

I have been critical of the performance of each of the agencies, but 

I also think it is fair to note, on their behalf, that part of the problem is a division of responsibilities between them that makes no 

sense, and I hope we will get some response to the short-term issue 

of a memorandum of understanding which prevents funds from 

going to public housing. 

We understand that is part of this, that we have a memorandum 

of understanding between two Federal agencies which has absolved, apparently in their minds, each of them of the responsibility 

to provide funding to replace public housing for the lowest-income 

residents destroyed by a hurricane. And why we haven’t been told 

today that it is going to happen, I do not understand. It is inconceivable, the argument that the government doesn’t have the 

money. 

But beyond that we have a problem, and Ms. Waters and I encountered this, and Mr. Thompson and I, when we began to deal 

with this issue of trailers that were not fit for human habitation, 

of inadequate housing, and FEMA and HUD tended, frankly, to 

blame each other. We had difficulty, I will say, and I was appalled 

at this, at getting FEMA and HUD to come to a hearing at the 

same time. We were told, no, they didn’t want to come at the same 

time. 

Well, that has to stop, and I want to express my appreciation to 

our colleagues on the Homeland Security Committee because we in 

Congress are not immune from this jurisdictionalism and part of 

the problem comes when we have committee turf wars. I am very 

proud of the cooperation that has existed between the Committee 

on Financial Services and the Committee on Homeland Security on 

a range of issues involving spending to try and alleviate the physical damage and social harm that was wreaked by that hurricane, 

and we have between us the jurisdiction over HUD and FEMA. 

I have spoken with the chairman of the Homeland Security Committee, the chair of our Housing Subcommittee has been in the lead 

on this, and I think I speak for all of us, and I believe the gentleman from Texas as well, the chair of the Homeland Security 

Subcommittee, we are determined to fix this. We are determined 

that by the time we finish this year, much clearer responsibility 

has to exist between FEMA and HUD, and this shared responsibility has clearly not worked. 

I don’t know how anyone could deny that the record of the Federal Government in responding to this hurricane has been shameful, and it is not entirely a matter of individual fault, it is partly 

a matter of government structure, but that does not make it any 

less shameful and it doesn’t make it any less urgent that we repair 

the situation. 

We can begin and I hope we know by the end of this hearing that 

money is going to be provided for public housing repair. I will not 

7 

find acceptable any explanation of why, nearly 3 years after the 

hurricane, we haven’t been able to do that. 

Of course we will also be addressing in the TSE bill our effort 

to provide additional funding for the construction of new affordable 

housing units, and that continues to be a very high priority of the 

gentlewoman from California, the other members of our committee, 

and myself, but we are going to insist that there be money provided 

for public housing reconstruction and that we will begin, hopefully 

with the cooperation of the two Agencies, to repair this situation 

of a divided set of responsibilities that has hurt some of the neediest people in this country who have a much more legitimate claim 

on our help than has been recognized. 

Chairwoman WATERS. Thank you very much, Mr. Chairman. We 

also have with us Chairman Thompson, the chairman of the Homeland Security Committee, who hails from Mississippi where there 

were 2,695 units damaged and who has provided leadership in trying to deal with the question of CDBG and FEMA, and we are very 

pleased that he has provided leadership for this hearing here 

today. Mr. Thompson, you are recognized for as many minutes as 

you would like to have. 

Chairman THOMPSON. Thank you very much, Madam Chairwoman. I associate myself with all of the statements that have 

been made. Chairman Frank and I have had a number of discussions about the challenges that Hurricane Katrina posed for this 

country. 

One of the major conflicts, however, is whether or not the Agencies charged with responding to many of those challenges really 

functioned. With respect to housing, we can’t really pass the buck. 

Whether those individuals are in owner-occupied housing or public 

housing, we have a responsibility. If we accept FEMA’s role temporarily to do that, we should do it the right way. If HUD is the entity that has responsibility, then that relationship needs to go forward. 

But as Mr. Castillo said, we can’t stick our heads in the sand. 

We have to do our job. Unfortunately, I was in New Orleans the 

night before last listening to some of the public housing challenges 

that still exist, and I read in this morning’s paper where we had 

to call out a SWAT team for somebody we were trying to evict out 

of a Katrina trailer because that person had nowhere to go. And 

so we have now started putting burdens on people that we put in 

many of those temporary facilities by trying to evict them with no 

place to go. 

We need a strategy. There is no question about it. I look forward 

to the testimony. I am concerned, Madam Chairwoman, that some 

of the monies that Congress was so gracious to send to many of the 

States impacted by Katrina, but now some of the monies are being 

proposed to expand ports, and to build roads to plants that are 300 

miles away from the Katrina-impacted area, as well as some other 

issues that we will have hearings on later. 

I support our response. If government can’t respond to its citizens in their time of need, then where can those citizens turn? So 

we accept that proposition. We ought to make sure that we put 

them in something that is safe and sanitary and not allow what is 

happening in many of our areas. The land speculation, Madam 

8 

Chairwoman, is rampant. People are not able to afford the prices 

for land. And there is no real long-term commitment to affordable 

housing being demonstrated. 

So I look forward to the testimony and the questions that follow, 

and I yield back. 

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

Souder? 

Mr. SOUDER. Thank you, Madam Chairwoman. I hope today we 

can separate and keep separated a couple of major issues. One 

focus is how you do housing and city rehabilitation, particularly 

with devastation this great, and I think excellent issues have been 

raised on land speculation, on how you do this. Do the jobs come 

first, does the housing come first, how do you do this by neighborhood? New Orleans has struggled with the best ways to do this, 

and I think they have creatively tried to address it, and our Federal response will be critical to this because it is, in many cases, 

low-income housing. 

A second focus is what we do with emergency housing and how 

we are going to handle long-term emergency housing. A third focus 

is, I thought excellent points were made about cooperation both 

here and problems we have in the Executive Branch and it is important that both the Executive Branch and the Legislative Branch 

work together. 

I have a particular interest in full disclosure. Most of the socalled FEMA trailers came from my district; 58 percent of RVs and 

much of manufactured housing comes from my district. I have been 

very concerned, and it started here again, in this hearing, with 

mischaracterizing what our number one kind of emergency housing 

is, which are the so-called FEMA trailers. 

There has been a misunderstanding that somehow these are 

sprayed with formaldehyde. I hear the term ‘‘formaldehyde-laced.’’ 

It is in the wood. And that whatever kind of housing you do, 

whether it is in a confined area—it is also in the vinyl, it is in the 

carpet, it is in the furniture; it isn’t in the trailer. Therefore any 

type of small confined housing that is not ventilated properly will 

cause the same phenomena. It is not the trailer. I don’t know 

where it started that it is the trailer. 

But there is another question here—I have asked repeatedly and 

have found the answer to—was there a control group of people who 

weren’t in the so-called trailers, and the answer is that the control 

group was the United States. The new Mississippi study is showing 

that kids who weren’t in this housing had the same effect because 

the question is, was it in the air? So even if you ventilate, you are 

going to have some sort of breathing reaction. 

There were four cases in the entire United States until it started 

down in Katrina, in that now some other people are saying, I wonder if my breathing problems were caused by this? But we have 

had millions of these trailers a year out and we haven’t had these 

kinds of problems, so I think it is really important that we don’t 

cut off our nose to spite our face, so to speak. The alternatives to 

formaldehyde have even more characteristics that could cause 

health problems, and it isn’t the trailers, it is in the wood, it is in 

the fiber, it is in the fabric. We emit formaldehyde ourselves, so the 

more people you put in something, the more you are going to have. 

9 

So I hope today we stay focused on a huge challenge and that 

is, regardless of how you feel about the emergency housing, why 

are these people still in emergency housing? This was supposed to 

be a short-term phenomena, not a long-term phenomena. Whatever 

we put people into, in confined spaces, is going to become problematic. And I hope that we focus on that and that we work out better 

standards. 

By the way, one other thing with the emergency housing, because they were trying to get as much as they could, only about 

half of this was new stock. They were buying it off of lots, they 

were buying it off of other places, and that is why I start asking 

about the air, because the studies showed that the highest exposure was not in a newly built one. 

The challenge here is not to become emotional about it, but to 

be as dispassionate as we can to both address future emergency 

housing and expedite the transition so that people, regardless of 

what the temporary housing is, have some kind of alternative so 

you don’t have to forcibly eject them when they don’t have another 

place to go. 

I thank the chairwoman and I yield back. 

Chairwoman WATERS. Thank you very much. Mr. Cleaver for 3 

minutes. 

Mr. CLEAVER. Thank you, Madam Chairwoman. Thank you for 

doing the heavy lifting to get this joint committee meeting together. 

I am going to defer any comments until the question and answer 

period because I am more interested in trying to find out how and 

why there is this question about legislative intent between HUD 

and FEMA. And so as one of the non-nut preachers, I want to dig 

into what we do when people don’t understand legislation. I yield 

back my time. 

Chairwoman WATERS. Thank you very much. Mr. Green for 3 

minutes. 

Mr. GREEN. Thank you, Madam Chairwoman. I want to especially compliment the Chair, as has our chairman of the full committee, for her outstanding work. I have been to Louisiana with her 

and I know of her commitment to helping persons who have been 

displaced by this force of nature, who have been impacted by it. 

And we still have a disaster that we have to deal with; it is a 

human disaster. 

I have been blessed to serve on both the Homeland Security and 

the Financial Services Committees. I have also been blessed to 

serve the 9th Congressional District in Texas, which inherited a 

good number of persons from Louisiana and some other places. Literally, we received the equivalent of a small city without all of the 

infrastructure necessary to support a small city. And we were honored to have the opportunity to serve our fellow human beings. 

But at the same time, there is a need for some assistance to help 

with the services that have to be provided. We find ourselves now 

in Houston, Texas, still in need of some additional assistance, and 

I am eager to hear about the long-term plans for persons who are 

relocating in Houston, and some who are still, in their minds, in 

Houston temporarily. 

Finally, it seems to me that one of these agencies has a shortterm mission and the other has a long-term mission. Short-term 

10 

help, long-term assistance, and somehow the line between the 

longterm and the short term has to be better defined so that we 

can clearly understand with whom the responsibility lies for some 

of the things that we have talked about that one Agency contends 

the other Agency is responsible for, and it becomes difficult to sift 

the sand and find the pearls of wisdom as to whom it is that is entirely responsible. 

So I say to you we have to define this line, find the boundaries 

that are important to us. We also have to, as we do this, concern 

ourselves with this one-for-one replacement that the chairwoman 

mentioned. I am concerned very much about the housing in Louisiana, wherein we had an agreement, in my opinion, to have onefor-one replacement, but I don’t see it being honored to the extent 

that I thought the agreement was to be honored. 

That one-for-one replacement is important. If people want to return home, there has to be a home to return home to, and without 

the replacement effort, we are not providing the opportunity for 

people to go home. Everybody should have the right to go home. 

People want to go back, and they ought to be able to get back. 

Finally, I thank Chairman Frank for what he has done, and 

Chairman Thompson, as well. The two of them are outstanding 

chairmen. I am honored to serve with them and they have both 

made a concerted effort to try to make sure that our persons in 

Houston, Texas, are properly taken care of. For this I am grateful, 

and the ranking member of the Housing Subcommittee, Mrs. 

Capito, was not the chair at the time, but I know of her desire to 

be of assistance and I appreciate what she has done as well. 

With that I yield back, Madam Chairwoman. 

Chairwoman WATERS. Thank you very much. Mr. Etheridge? 

Mr. ETHERIDGE. Thank you, Madam Chairwoman. And to expedite this, Madam Chairwoman, I will submit my statement for the 

record, and hopefully you will be a little lenient when we get into 

the Q & A, and I will have an opportunity to speak. Thank you and 

I yield back. 

Chairwoman WATERS. Thank you very much. I am now pleased 

to welcome our distinguished first panel. Our first witness will be 

Mr. Carlos Castillo, Assistant Administrator for Disaster Assistance, Federal Emergency Management Agency, U.S. Department of 

Homeland Security. Our second witness will be Mr. Jeffrey H. 

Riddel, Director, Office of Capital Improvements, U.S. Department 

of Housing and Urban Development. I thank you all for appearing 

before the subcommittee today, and without objection, your written 

statements will be made a part of the record. You will each now 

be recognized for a 5-minute summary of your testimony. Thank 

you. 

STATEMENT OF CARLOS J. CASTILLO, ASSISTANT ADMINISTRATOR, DISASTER ASSISTANCE DIRECTORATE, FEDERAL 

EMERGENCY MANAGEMENT AGENCY 

Mr. CASTILLO. Good morning Chairwoman Waters, Chairman 

Cuellar, Chairman Frank, Chairman Thompson, and members of 

the subcommittees. I am Carlos Castillo, the Assistant Administrator for the Disaster Assistance Directorate in the Department of 

Homeland Security’s Federal Emergency Management Agency 

11 

(FEMA). I thank you for the opportunity to be here today to represent the Department and FEMA and to discuss our role and responsibility in responding to the affordable housing needs of Gulf 

Coast States following emergencies and natural disasters. New programs, policies, initiatives, partnerships, and collaborations define 

the improvements that have taken place within FEMA since Hurricanes Katrina and Rita. Many of the lessons we learned have been 

institutionalized and are now being implemented nationwide. 

FEMA continues to marshal the efforts and expertise of the community of Federal, State, and local emergency managers and voluntary organizations to aggressively and compassionately address 

the needs of individuals, families, and communities devastated by 

disasters. 

I have submitted my written testimony for the record and it outlines a number of FEMA programs aimed at assisting Gulf Coast 

communities and disaster victims. I will summarize them briefly as 

well as address the memorandum of understanding we have with 

HUD that outlines eligible emergency repair assistance. 

Forward progress, our Gulf Coast housing strategy action plans: 

We are committed to providing suitable long-term housing solutions to families impacted by Hurricanes Katrina and Rita who still 

reside in temporary housing units. Led by FEMA’s Gulf Coast Recovery Office, we continue to work with applicants to ensure that 

they have access to any and every available housing resource that 

can help speed their recovery. We are pleased that nearly 84 percent of the households that received temporary housing units following Hurricanes Katrina and Rita have now moved out of those 

units and back into some form of permanent housing. The work of 

transitioning the remaining residents presents many challenges as 

we try to balance available resources with support needs of the 

families that reach beyond basic housing, but are often just as critical to the individual’s ability to return to self-sufficiency. Affordable housing, particularly rental units, is very limited in many 

areas along the Gulf Coast. 

However, FEMA has taken steps to increase the amount of available rental units and reduce the other barriers that may slow the 

process for an applicant. We redefined our current lodging contract 

in August of this past year to encourage greater landlord participation and expand the universe of rental properties and reduce common barriers for the remaining disaster population. These incentives and additional actions include payment of rental assistance 

above the current fair market rate, payment to landlords for utilities included in the rent payment, payment to landlords for repairs 

to property damage made by disaster applicants, payment of security deposits and processing fees for background checks required by 

some landlords, and assistance with locating furniture and other 

necessities for basic living needs. 

We previously announced the plan to close all group sites and relocate residents by June 1, 2008, and we have continued in this activity as part of our ongoing efforts. We have already moved over 

120,500 households out of temporary housing units as residents 

move into more long-term housing solutions. While the majority of 

group site residents have successfully transitioned into functional 

long-term housing, some of the remaining residents are experiVerDate Aug 31 2005 18:31 Oct 06, 2008 Jkt 044181 PO 00000 Frm 00017 Fmt 6633 Sfmt 6633 K:\DOCS\44181.TXT TERRIE
12 

encing challenges. FEMA officials understand this and we have 

worked diligently to remove many of the barriers they have faced 

in relocating. As of May 30, 2008, there are 22,437 households still 

occupying temporary housing units in the Gulf Coast and 728 

households still in group sites. 

This year, Administrator Paulison wrote to the Governors of Louisiana and Mississippi to establish a joint Federal/State Housing 

Relocation Task Force. Both States, as well as our key Federal 

partners identified representatives for this task force, which is intended to share resources, identify solutions to barriers, and develop joint policies for messaging for those still in need of housing. 

The task force members will also be charged with identifying opportunities for collaboration with local governments. 

Disaster housing assistance program: On July 26th of last year 

FEMA and HUD executed an interagency agreement establishing 

the DHAP program, a temporary housing rental assistance and 

case management program for eligible individuals and households 

displaced by Katrina and Rita. The program is currently being administered through HUD’s existing infrastructure of public housing 

agencies. Ultimately, over 40,000 eligible residents displaced by the 

Gulf Coast hurricanes will continue to have their rent paid through 

this partnership. 

The memorandum of understanding regarding repair of public 

housing following emergencies and natural disasters: I am also 

aware that Chairman Frank has expressed concern, as others, over 

FEMA’s ability to fund repairs to public housing authorities damaged as a result of Hurricane Katrina. FEMA has this MOU with 

HUD outlining eligible emergency repair assistance, and we have 

agreed that FEMA will, in its discretion, provide for essential assistance authorized under Section 403 of the Stafford Act to eligible 

public housing authorities that fall outside of HUD’s authorities 

and FEMA has provided $7.4 million to the housing authority of 

New Orleans for emergency protective measures. I understand I 

am past the—may I finish the— 

Chairwoman WATERS. You may wrap up your statement. 

Mr. CASTILLO. Yes. We will work together with HUD to resolve 

this. I just wanted to be clear that the memorandum of understanding was meant to clarify what our roles, what HUD and 

FEMA’s roles are. It wasn’t meant to change anything. 

[The prepared statement of Mr. Castillo can be found on page 62 

of the appendix.] 

Chairwoman WATERS. Thank you. We are going to get to that in 

the questioning. You will have time to explain. 

I am going to move right to Mr. Riddel at this point. Thank you. 

STATEMENT OF JEFFREY H. RIDDEL, DIRECTOR, OFFICE OF 

CAPITAL IMPROVEMENTS, PUBLIC AND INDIAN HOUSING, 

U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT 

Mr. RIDDEL. Good morning. Chairwoman Waters, Chairman 

Cuellar, Chairman Frank, and Chairman Thompson. It is an honor 

and a privilege to be before you this morning, I thank you for the 

opportunity. 

My name is Jeff Riddel, and I am the Director of the Office of 

Capital Improvements, the Office that administers the Capital 

13 

Fund program which gives housing authorities funds to repair and 

maintain their housing stock. The Office of Capital Improvements 

is also the office that administers the emergency and natural disaster grant program. 

I am here this morning to discuss with you how best to achieve 

funding to enable housing authorities to respond to make the necessary repairs following natural disasters. I would like to summarize briefly some of the issues and then propose one policy option. 

As you know, we also provided a written statement. 

The Quality Housing and Work Responsibility Act, QHWRA, 

which was enacted in 1998 included a provision, Section 9(k) which 

permits HUD to award natural disaster grants to housing authorities. It also authorized HUD to make emergency grants to address 

situations that endanger the health and safety of public housing 

residents. As the chairwoman mentioned in her opening remarks, 

section 9(k) directs HUD to set aside not more than 2 percent of 

the capital and operating funds for emergencies and other natural 

disasters and housing needs resulting from any settlement of litigation. 

However in every appropriations bill since 2000, Congress has 

determined that HUD should not use appropriated amounts under 

9(k) and has separately appropriated a set-aside amount for emergencies and natural disasters. The funding has declined significantly for emergencies and natural disasters from a high of $75 

million in 2000–2002 to a low of $16.8 million last year. 

In 2004, four hurricanes struck the State of Florida and completely depleted the $39.8 million in funding available for that 

year. In 2005, Hurricanes Katrina and Rita struck the Gulf Coast 

and the disaster funding available that year was inadequate to restore public housing damaged or destroyed. Hurricane Wilma 

struck Florida during the first month of Fiscal Year 2006 and substantially depleted the $16.8 million available at that time. The 

current level of $18.5 million, while an increase from 2006 and 

2007, would not be sufficient to meet the disaster needs such as 

those that have occurred in recent years. 

Public housing authority losses from hurricanes and disasters 

are mitigated to a large extent by HUD’s regulatory requirements 

that they maintain specified insurance for coverage for property 

and casualty losses. The size and scale of these hurricanes have 

tested that requirement. HUD found that insurance proceeds are 

insufficient in some cases, such as with most of the housing authority of New Orleans, among others. Public housing authorities that 

face funding shortfalls due to insufficient insurance proceeds and 

HUD disaster grant funding have sought public housing assistance 

under FEMA pursuant to Section 406 of the Stafford Act. 

In the late 1990’s, HUD and FEMA signed a joint coordination 

letter addressing the procedures for public housing authorities obtaining essential assistance for items such as debris removal and 

demolition of unsafe structures pursuant to Section 403 of the Stafford Act. The joint coordination letter did not address the issue of 

FEMA public assistance for reconstruction and long-term repair 

under Section 406 of the Stafford Act. 

In 2007, HUD developed a proposed memorandum of agreement 

between itself and FEMA that would have made it possible for 

14 

FEMA assistance pursuant to Section 406 to be available as a last 

resort for funding when insurance proceeds and disaster grants 

from HUD were inadequate. However, because Section 9(k) exists, 

Section 406 funding has been thought to be not available for public 

housing authorities because it violates the appropriations law by 

augmenting Congress’ appropriation for natural disasters funded 

through the capital— 

Chairwoman WATERS. Could you speak up please? 

Mr. RIDDEL. Sure. I would be happy to. 

In recent years, the President’s budget has proposed eliminating 

both the portion of 9(k) that provides for disaster grant funding 

and the set-aside for natural disaster grants in an attempt to alleviate confusion about disaster assistance and make it possible for 

housing authorities to access Section 406 Stafford Act funding. If 

Congress were to follow this course, there would be no separate disaster funding provided for public housing, and consequently, FEMA 

would be no longer augmenting another appropriation by providing 

Stafford Act assistance. 

Therefore, one potential solution to disaster funding shortfalls for 

public housing authorities would be the permanent repeal or 

amendment of Section 9(k) with the additional stipulation that no 

funding be appropriated for natural disasters. 

Thank you for the opportunity to appear. Again, I would be 

happy to answer any questions at the appropriate time. 

[The prepared statement of Mr. Riddel can be found on page 257 

of the appendix.] 

Chairwoman WATERS. Thank you very much. I would like to recognize myself for questions at this time. I have a lot of questions, 

but I suppose I can only get answers to a few. 

Let me just, if I may, follow up on something that Chairman 

Thompson referenced in his opening statement. He indicated that 

someone living in a FEMA trailer has been evacuated by a SWAT 

team. Would you please explain to me why someone living in a 

FEMA trailer, temporarily assisted because of a disaster, why 

would they be evacuated? 

Mr. CASTILLO. I believe you are referring to, there was an incident in New Orleans; I believe it started late last night or early 

this morning. The incident is under investigation by the New Orleans police department and I know they were coming out with a 

statement, but I have nothing else to add. I just don’t know much 

about it. 

Chairwoman WATERS. Well, let us continue a little bit on this 

business of FEMA trailers. We will see what we can find out about 

that situation, maybe it was not associated with FEMA at all, 

maybe it was the local police department. 

But why would FEMA use trailers, again, given the health risks 

associated with formaldehyde exposure? I appreciate the admonition of my colleague from the Homeland Security subcommittee 

here, but I have referred to them as formaldehyde trailers, and I 

think it upsets some people that I say that, but I still see them 

that way. If in fact we know we have problems, whether it comes 

from the wood or any other material in the trailer, why would we 

use them again if we had a disaster and we needed to place people 

someplace temporarily? 

15 

Mr. CASTILLO. There is a lot of confusion, I believe, that some 

folks refer to trailers and just look at travel trailers and mobile 

homes, and just to differentiate, the way I understand your question, it relates specifically to travel trailers, which are meant to be 

a more temporary use, used normally as travel trailers to spend 

maybe a weekend in and not necessarily meant for long-term housing. 

At FEMA, we are looking ahead knowing that if we are faced 

with another catastrophic, very extraordinary event among the 

likes of Katrina or maybe even not to that extent, that we need to 

do something different. We know that the travel trailers, the formaldehyde issue that has been raised and we have recognized and 

are dealing with is but one. Travel trailers are not the ideal solution. We are looking at, through our joint housing solutions group, 

we are looking at alternatives to travel trailers and some of the 

other typical manufactured housing. 

Again, our plan and our philosophy has been and is, first we will 

look to, if there is are quick repairs that can be made to a home 

where people are more comfortable, and their home as been affected, where they can move back shortly after an event, looking 

at available rental resources in an area that is affected, apartment 

homes they can move into and it is more permanent, then we will 

go to other manufactured housing like mobile homes, which are 

larger. 

The downside to mobile homes is for people, and the majority of 

people who were in mobile homes and travel trailers were on private sites, meaning people who were repairing their homes and 

want to stay where their possessions are, want to stay in their 

neighborhood where their school, their friends and relatives are— 

Chairwoman WATERS. Let me interrupt you for a moment here. 

Have you done any research since we have been confronted with 

the problem of formaldehyde trailers? Have you done any research 

about what kind of units would be better to be used in the event 

of another disaster? I mean, what kind of real information do you 

have about what is safe and what is not? 

Mr. CASTILLO. We have worked primarily with HUD and the 

Centers for Disease Control and Prevention to look at the areas 

that their expertise is in and not ours, and we have consulted with 

them and worked with them and continue to do that. One key 

thing we are doing is we have tested, since Administrator Paulison 

advised, we have tested every single unit that is offered to the 

State, and that includes, although we haven’t offered travel trailers, and again that is just a— 

Chairwoman WATERS. But I am really asking about research. I 

want to know, what have you learned that would help you to place 

people in safer surroundings, environments in the future? Is there 

a report that has been done? What real information do you have 

about alternatives to trailers that are contaminated, be it from 

wood or other materials? 

Mr. CASTILLO. We test the trailers—to answer, there is no report 

that I know of— 

Chairwoman WATERS. You have no research and no report? So 

what you are doing is, you are trying to figure it out yourself, is 

that right? 

16 

Mr. CASTILLO. The CDC, I know, is doing some studies on the 

health effects of formaldehyde. We are testing our units, before 

they are offered, for formaldehyde. We are testing that in accordance with standard practices and protocols to make sure that there 

is no— 

Chairwoman WATERS. So you have no research that has been 

done and you have no report about that research that would help 

you to determine what would be the safest way to house people 

who are the victims of a disaster, is that correct? You have no research? I know you said you are testing, do you have any research 

that would help you to determine how to house people safely in the 

event of a disaster? 

Mr. CASTILLO. That we have conducted? No ma’am. 

Chairwoman WATERS. I don’t care who conducted it. Whether 

you conducted it, or whether you contracted it with someone, you 

have no research, is that right? 

Mr. CASTILLO. We have a joint housing solutions group that is 

looking at alternatives to housing and they have used experts from 

different portions, having to do with specifically housing— 

Chairwoman WATERS. I understand there was some recent testing of children as it relates to perhaps some mental health problems. Are you aware of that? 

Mr. CASTILLO. No, ma’am. 

Chairwoman WATERS. Alright, thank you very much. I am going 

to call on my ranking member, Mrs. Capito, at this time. 

Mrs. CAPITO. Thank you, Madam Chairwoman. I have a question 

for you, Mr. Castillo. Chairman Frank wrote a letter to FEMA Administrator David Paulison in June 2007 and asked that FEMA revisit—and you began talking about the memorandum of understanding with HUD to clarify that public housing developments are 

eligible to Section 406 funding if HUD funds are unavailable. In 

your letter you said that you would be considering this, and this 

was in November of 2007. I am wondering if you have completed 

this study and what conclusions you have reached? 

Mr. CASTILLO. We haven’t. We have worked, we have had meetings with HUD to look at that and what I would like to clarify is 

that the memorandum of understanding was simply something 

that was written to clarify and spell out, to detail what HUD’s responsibilities are and what FEMA’s responsibilities are. It wasn’t 

meant to change legislation or even address that. 

Where we have agreed is—and perhaps it is not something that 

we are happy with because the bottom line is that people who need 

the housing perhaps still aren’t getting it as quickly as they 

should—that we don’t have the authority, and because of augmented appropriations, we are not in a position to provide disaster 

relief funding under 406 of the Stafford Act. 

Mrs. CAPITO. In terms of the remaining individuals, families who 

are still not in some sufficient housing situations, what is that 

number now? 

Mr. CASTILLO. The number of folks still in—I can give you—we 

have, right now, there are 22,188, as of Monday, 22,188 households 

remaining in FEMA-provided temporary housing. 

17 

Mrs. CAPITO. So they are living, now, still, in, you mentioned 

travel trailers. Are they more permanent homes or more permanent structures or— 

Mr. CASTILLO. Those are primarily mobile homes and travel trailers, the majority of which are on private sites. 

Mrs. CAPITO. Is the issue that, in order to transition them from 

this temporary living situation the fact that we are not coordinating with HUD, is there not available housing or rental units, or 

is it because of bureaucratic snafus, which I am certainly hopeful 

that it is not. Could you expound on that? 

Mr. CASTILLO. We are moving, we are averaging about 1,000 

households a week that we are moving out into more permanent 

housing. We are working closely with HUD, we have had—I will 

give you an example. 

There was, before we started even the joint housing solutions 

group that we started that I mentioned both in Mississippi and 

Louisiana, there were several databases. Every agency had a separate database to rental property available. We have combined those 

with HUD, FEMA, and the Gulf Coast to look at available rental 

properties to move people into. As I said, we are moving 1,000 families a week into more permanent housing, it is just—it is not just 

one reason for the delay, and we have moved out a lot of people. 

Mrs. CAPITO. Well, that still is a staggering number—I am sure 

you realize that as well—who are left without suitable housing. 

Mr. CASTILLO. Absolutely. 

Mrs. CAPITO. Last question, and this is sort of a general question 

going back to the news reports post-Katrina. A lot of reports of unused housing or temporary housing, travel trailers, what is the status of all that and can you clarify that for me please? 

Mr. CASTILLO. Can you repeat the question? Unused— 

Mrs. CAPITO. Question: Were there hundreds and hundreds of 

travel trailers or housing units available that were unused, that 

were just sort of parked, post-Katrina? 

Mr. CASTILLO. I don’t know about that. I started with the Agency 

less than a year ago, but I haven’t heard that was the case. I know 

there were over 140,000 families who were housed through FEMA 

in different temporary housing units, but I hadn’t heard that, that 

you are referring— 

Mrs. CAPITO. But as a point of clarification, to your knowledge, 

since you weren’t there obviously you wouldn’t know, but at the 

time, any available housing that was there onsite was used. Is that 

correct? 

Mr. CASTILLO. That is my understanding. Not just there onsite, 

but also in other States who became host States and that have 

sheltered a lot of Katrina/Rita victims outside of their own State, 

yes, ma’am. 

Mrs. CAPITO. Thank you. I yield back. Thank you, Madam Chairwoman. 

Chairwoman WATERS. Thank you very much. Mr. Cuellar? 

Chairman FRANK. Will you yield me 10 seconds? 

Chairman CUELLAR. Yes, sir. 

Chairman FRANK. Mr. Castillo says that he has been at the 

Agency less than a year. I would just note—and I appreciate the 

gentlewoman from West Virginia referencing the letter I sent—that 

18 

he has been at the Agency less time than my letter. I hope he has 

gotten a better response than my letter has in that time; my letter 

is a year old. 

Chairman CUELLAR. Thank you, Mr. Chairman. Let’s see if we 

can kind of look at the big picture here. One, the hurricane season 

just started this Sunday, June 1st, is that correct? 

Mr. CASTILLO. Yes, sir. 

Chairman CUELLAR. Okay, that was number one. Number two, 

we have over 22,000 individuals who are still living in temporary 

housing, is that correct? 

Mr. CASTILLO. Yes. 

Chairman CUELLAR. We have, between Louisiana and Mississippi, about 6,000 available housing units, is that correct? 

Mr. CASTILLO. Actually, I believe it is more than that. What we 

know as of this week, and we are using hotel rooms as well as 

part—we need to get people out for different priorities, if they have 

formaldehyde concerns or their health issues, but we have identified 5,000 rooms in hotels that are willing to cooperate and participate with us, 5,000 in Louisiana, over 5,500 in Mississippi, and 

4,900 apartments that are willing to participate with us, 4,900 in 

Louisiana and over 2,000 in Mississippi. 

Chairman CUELLAR. And if we take away hotels and motels that 

you are using as alternative housing units, at least our number 

show that there are about 6,000 between both States. 

Mr. CASTILLO. A little more, yes. Close to that. 

Chairman CUELLAR. Alright, if we look at that big picture, let me 

ask this question both to Mr. Riddel and Mr. Castillo, same question. Mr. Riddel, if FEMA is a disaster preparedness and response 

agency, we know they are there for a particular purpose during a 

disaster, and your mission under HUD has a different mission, that 

is housing more on a permanent basis, should I say. With that in 

mind, at what point during the recovery period do you feel it is appropriate for FEMA to hand over the housing mission to an agency 

that has more experience in this area? And then, Mr. Castillo, I 

will ask you the same question. 

Mr. RIDDEL. Thank you Mr. Chairman. Let me begin to respond, 

I certainly would be happy to amplify it further. 

What I think I hear in your question are issues of timing, of 

longer-term solutions as well as shorter-term solutions. On a shortterm basis, the funding through FEMA does provide that opportunity. 

What we are doing in the Disaster Housing Assistance Program 

is taking over responsibility for that funding, for the operation of 

the program, once tenants are relocated to some form of other 

housing, because HUD has that expertise, that mission. On a 

longer-term basis, certainly HUD’s mission is to provide safety, 

some sanitary, affordable housing. That is the business that we are 

in. So we are certainly working throughout the country, but especially in the Gulf Coast on redevelopment programs and strategies 

to provide not only public but affordable housing in those communities. 

Chairman CUELLAR. So here we are 3 years after the hurricanes. 

Is it the appropriate time now to hand this over? You know, to an 

agency that has more the expertise and the initiatives— 

19 

Mr. RIDDEL. Yes. We are working now in that transition process 

with FEMA, taking over responsibility for those residents as well 

as working on their long-term housing needs, yes. 

Chairman CUELLAR. When do you anticipate this passing of the 

torch to happen? 

Mr. RIDDEL. We have been working on taking over responsibility 

for former FEMA residents now for the last several months. As 

soon as relocation assistance is available, they become part of the 

DHAP program. 

Chairman CUELLAR. Are you ready to handle the situation that 

if FEMA moves some of these folks over to hotels/motels—my understanding, they were there for 30 days. After 30 days, we don’t 

know what is going to happen. I guess if you have somebody in a 

trailer, for example, and there might be some issues about health, 

that is one issue that they look at, but then the other issue, the 

other alternative is, by moving to a hotel/motel, I am there for 30 

days, and after 30 days I don’t know what is going to happen, are 

you ready to handle that in the transition? 

Mr. RIDDEL. Our focus certainly is on longer-term housing needs 

and opportunities, and I think you identify an issue in terms of the 

decision-making process of residents even in moving out of trailers, 

they are concerned about their long-term housing needs, so our 

focus is on that longer-term housing need rather than their being 

in a hotel room for a few days. 

Chairman CUELLAR. Because my time is almost up, Mr. Castillo, 

could you answer that in 30 seconds? When is the time for FEMA 

to hand over this work? That was important for you all during the 

disaster, I recognize that, but now 3 years later, are you ready to 

pass that on to somebody who has a little bit more expertise? 

Mr. CASTILLO. Yes, and we have been passing that baton, as you 

said, through the DHAP program, the Disaster Housing Assistance 

Program. We have been transitioning folks and it will be up to 

40,000 families that will be transitioned into them. Housing is 

HUD’s mission, they are good at it, and it is what they do on a normal basis. We are good in the emergency phase. As far as a date, 

I mean, it is what we transition to, but yes, I agree. 

Chairman CUELLAR. Well, I have further questions but my time 

is up, so thank you very much. 

Chairwoman WATERS. Thank you very much. Mr. Dent? 

Mr. DENT. Mr. Castillo, the Post-Katrina Emergency Management Reform Act of 2006 required FEMA to develop a national disaster housing strategy, as you know. A draft of that housing strategy is being circulated among the stakeholder agencies and organizations, as I understand it. Have you been receiving feedback on 

that strategy, and if so, what have been the major areas of interest 

and concern? 

Mr. CASTILLO. It was first developed along with partner agencies. 

Right now we have a final, FEMA has a final draft that is being 

circulated, as you said, among other agencies, including what is required by law and through the national advisory council who has 

it now. We haven’t received the feedback from them yet, but it is 

something that is a very complex strategy that looks at and incorporates a lot of the lessons we have learned along the way. 

20 

Mr. DENT. It is my understanding, too, that FEMA, as I think 

you have stated, expects to deliver that strategy to Congress later 

this month. Is that still the expectation on delivery? 

Mr. CASTILLO. I don’t know the exact date. I know it is—I can 

tell you and I can assure you that no one wants to see that strategy 

out more than we do at FEMA and as soon as it does, we will circulate it here. 

Mr. DENT. You also referenced earlier that FEMA has established the joint housing solutions group to evaluate innovative disaster housing options, identify viable alternatives to FEMA travel 

trailers and manufactured homes, and recommend improvements 

to disaster housing operations. Could you please describe the efforts of that group, and what agencies and offices are currently represented in that group? And I would also like to know if you have 

any recommendations that have been developed? 

Mr. CASTILLO. Yes. It started actually in 2007 when we brought 

a group together. We have opened and communicated through a 

Web site and through a lot of different channels opportunities for 

companies and people to provide units that are looking at something different other than travel trailers and mobile homes that we 

have been doing. There is a lot of different criteria that we have 

published for them to use and the point is we have identified— 

What we want to do is work to pilot the top four or five prospects, the top four or five solutions that come out of that. We have 

a housing assessment tool where people can submit this online in 

sort of a self-evaluation to start out with to make sure it meets the 

criteria of safety, health, formaldehyde free or very low in formaldehyde, other things that we have learned along the way that 

will hopefully result in some good solutions for the future that we 

can use and implement and test if we need to this season. 

Mr. DENT. And Mr. Riddel, could you please discuss the current 

state of affordable housing and the real estate market on the Gulf 

Coast. How is HUD involved in efforts to ensure that there is sufficient availability of affordable housing in a given area? 

Mr. RIDDEL. I would be happy to. Our focus is certainly both on 

public housing as well as affordable housing. The housing authorities in the Gulf Coast area have redevelopment programs and 

strategies that typically involve a multitude of approaches of housing types, of tenure, homeownership, rental, ranges of housing from 

public housing to affordable housing to market rate housing, and 

a variety of funding sources including Federal, State, and local 

sources, so we work with those groups and have provided support 

in as many different ways as we could. 

For example, one of the things that has been done is to provide 

housing authorities with the flexibility to use what is now called 

housing choice voucher funding and what used to be called Section 

8 funding flexibly so that they can use it for development purposes 

and make that funding available using the appropriations that 

Congress provided then to provide voucher assistance for families. 

So we are working a variety of programs and types, certainly 

working with other agencies as well as the chairwoman mentioned, 

in New Orleans we have been able to get, through the housing authority there, tax credit assistance through the Gulf opportunity 

zone to get several hundred million dollars worth of tax credit inVerDate Aug 31 2005 18:31 Oct 06, 2008 Jkt 044181 PO 00000 Frm 00026 Fmt 6633 Sfmt 6633 K:\DOCS\44181.TXT TERRIE
21 

vestment to develop not only public but affordable housing. There 

has been comparable programs in other ways as well. 

Mr. DENT. I see my time has expired. I yield back. 

Chairwoman WATERS. Thank you very much. Mr. Cleaver. 

Mr. CLEAVER. Thank you, Madam Chairwoman. 

Chairwoman WATERS. I am sorry, Mr. Frank is back. 

[Laughter] 

Chairman FRANK. I am going to ‘‘leave it to Cleaver.’’ 

[Laughter] 

Chairwoman WATERS. Alright, Mr. Cleaver. 

Mr. CLEAVER. Mr. Riddel, you manage the capital fund for emergencies? 

Mr. RIDDEL. That is correct. 

Mr. CLEAVER. In 2000, you had $75 million. 

Mr. RIDDEL. Correct. 

Mr. CLEAVER. Today, it is less than $20 million? 

Mr. RIDDEL. It is $18.5 million, yes. 

Mr. CLEAVER. What was the request, what was the budget request? 

Mr. RIDDEL. In the current budget, and it gets to some of the 

substance, I think, of this hearing, in the current request, the current budget, we have zeroed out that request. We are not seeking 

funding for disaster grants. The rationale for that is, as I mentioned in my opening statement, this concern about duplication or 

augmentation of funding. 

Mr. CLEAVER. Yes. 

Mr. RIDDEL. And that while that confusion exists, the families 

are better able to be served if they know that they can get a certain 

source of funding or housing authorities can get certain sources of 

funding to meet the needs of their residents. 

Mr. CLEAVER. Okay, thank you. Here is my question for both of 

you: If the HUD Secretary zeroed out this fund, and FEMA did not 

insert it in its budget request, we are essentially leaving the people 

out there. Nobody, then, it seems has the responsibility, for whatever reason, to deal with the people who have been devastated. Is 

that right? Is that wrong? Is that anything? 

Mr. CASTILLO. For us, we have a disaster relief fund, but that is 

no year funding. It is basically to provide funding for disasters, but 

because HUD has a specific authority and Congress appropriates 

under that— 

Mr. CLEAVER. Except HUD didn’t want it. They zeroed it out. 

Mr. RIDDEL. Let me attempt to address some of those points. I 

think part of the issue is the magnitude of funding required. As 

you referenced, in 2000 the funding was $75 million, it was a much 

larger number than it is now. The magnitude of the need also certainly greatly fluctuates based on events that occur during that 

year, disasters such as we have experienced in recent years. 

So the funding level is certainly an issue, but beyond that, the 

ability to access funds through Section 406 of the Stafford Act as 

other— 

Mr. CLEAVER. I see two issues. One is the funding issue, which 

I am still not clear about where HUD and FEMA are going. The 

second issue, I guess, is legislative intent. When two agencies have 

22 

difficulty interpreting the legislative intent, who becomes the referee? Sir? 

Mr. CASTILLO. Well, the way we understand the legislative intent, and I am not sure that there is disagreement between HUD 

and FEMA, is that because HUD has a specific authority, the legislative intent was for them to have that authority. 

Mr. CLEAVER. Okay, here is the problem that I hope you can 

clear up. HUD zeroed out the capital fund for emergencies. Am I 

right? 

Mr. RIDDEL. That is in the current budget, yes. 

Mr. CLEAVER. And FEMA is saying that is HUD’s responsibility. 

HUD is saying we are going to zero this out because we think that 

one agency should handle all of these matters and we should not 

be duplicating what FEMA is doing. The truth of the matter is that 

the people in the Gulf Coast were left without anyone stepping up 

to the plate for capital emergencies. 

Mr. RIDDEL. Congressman, part of the issue, I think, is the magnitude of funding. At a level of $18.5 million, that funding is inadequate to address any substantial— 

Mr. CLEAVER. Okay, we are talking past each other and it is my 

fault. It is my fault, whatever it is, it is my fault, so let’s talk to 

each other. You are saying that $18.5 million is inadequate. I 

agree; I think $75 million was inadequate. The problem is you zeroed it out because you said that it should be—you wanted to avoid 

duplication. Is that right? 

Mr. RIDDEL. That is correct. 

Mr. CLEAVER. FEMA says they shouldn’t handle it because it is 

the responsibility of HUD. Is that right? 

Mr. CASTILLO. Yes, sir. 

Mr. CLEAVER. And so you are saying there is no disagreement, 

there is no confusion over legislative intent because HUD should 

have it. That is what you said, Mr. Castillo. 

Mr. CASTILLO. Yes, because HUD has the specific authority, yes 

sir. 

Mr. CLEAVER. Then I said, so the people are left out there without anyone wanting to help. Tell me why I am wrong. 

Mr. CASTILLO. We want to help. I mean we are looking for solutions to this. You know, we have the— 

Mr. CLEAVER. Well, I will e-mail that to the people in New Orleans that you are interested. That ought to probably fix it all. I yield 

back the balance of my time. 

Chairwoman WATERS. Thank you. Chairman Frank? 

Chairman FRANK. I want to follow up on that. With regard to the 

letter that the gentlewoman from West Virginia mentioned, I sent 

a letter dated June 12, 2007, about this inability to get money to 

public housing, and the answer to you, Mr. Castillo, so you said you 

have been there less than a year, only slightly less than a year, 

this is—oh, I am sorry, you sent the letter in November. My letter 

was in June. 

So many months later in November you wrote to me, and you 

said, ‘‘FEMA is committed to and communicated to HUD that we 

will study the feasibility of this issue for the purpose of authoritatively determining whether such a change is both appropriate in 

23 

legal. That study is actively underway.’’ That was in November. 

Apparently it is still underway. I think it is underwater. 

What is the status of that study that you told me in November 

was underway from a letter I sent you a year ago? 

Mr. CASTILLO. Sir, the study is, or the status is that FEMA cannot augment an appropriate— 

Chairman FRANK. You said there is a study. Is there an actual 

study? Can I see it? 

Mr. CASTILLO. The study is that we met jointly with HUD, we 

met with HUD— 

Chairman FRANK. Well, does HUD agree that FEMA legally can’t 

do that? 

Mr. RIDDEL. Our approach, Mr. Chairman, was to— 

Chairman FRANK. No, I didn’t ask your approach, sir. Does HUD 

agree that FEMA is legally bound not to give that money? 

Mr. RIDDEL. I don’t know if that is the conclusion. 

Chairman FRANK. No, it shouldn’t be. Well, FEMA said they 

worked it out with you. And my question is, do you agree with 

FEMA that they are legally unable to provide this funding? 

Mr. RIDDEL. No sir, what we had proposed— 

Chairman FRANK. No, I didn’t ask what you proposed, sir. I want 

to know whether you agree that FEMA is legally unable to provide 

that funding? 

Mr. RIDDEL. To my belief, no, I’m not the— 

Chairman FRANK. Okay, thank you. Now I want to ask you, Mr. 

Castillo, I am troubled by that. 

First of all, as I understand it, the argument is that you can’t 

provide the funding because they can get funding under 9(k), which 

has no money. I am not a great mathematician but I know that 

sometimes if I have a zero, a real number, or not a real number, 

apparently to FEMA, zero is a real number. Because zero dollars 

is real enough for you not to help people who need help with public 

housing that was destroyed by the hurricanes. 

So the fact that 9(k) has not been funded, that legally prevents 

you from providing funding because what you are saying is that 

these housing authorities could have gotten money from 9(k) if it 

had any money, and therefore you are not going to give them any 

money even though they didn’t get any money because 9(k) doesn’t 

have any. Is that your position? 

Mr. CASTILLO. It is that we can’t—if we were to give them money 

it would augment an appropriation, sir. 

Chairman FRANK. But the appropriation is zero. Is that correct? 

So you are legally bound not to appropriate zero—do you consider 

an augmentation, I mean augmentation to me is to give more, but 

they didn’t get anything. It is also this Administration’s position, 

apparently it is, because I assume the OMB approved the proposal 

to repeal 9(k). 

But let me ask you this, sir—April 14, 2003, to Mr. Castillo from 

FEMA, this is an amendment to the MOU—‘‘Background. Although 

HUD has specific authority under Section 9(k) as amended to provide funds for the PHA facilities, FEMA has generally funded these 

costs in the past.’’ 

Was FEMA, when it did that, violating the law? This is in the 

April 14, 2003, amendment, Recovery Division Policy, etc. It says 

24 

that in the past FEMA has generally funded these costs. At what 

point did the new legal interpretation come in and say it wasn’t 

legal? 

Mr. CASTILLO. It is my understanding that in 1999 after Hurricane Floyd is when it came— 

Chairman FRANK. It is your understanding. Is there a legal opinion to that effect by the General Counsel of FEMA? 

Mr. CASTILLO. Yes, there was sir. At the time— 

Chairman FRANK. Can I see that? Have you seen it? Is there 

such a legal opinion? 

Mr. CASTILLO. If there is one in writing, I can get it. 

Chairman FRANK. No, excuse me, if there is one in writing. You 

don’t know. Look, I think you acknowledged to Mr. Cleaver and 

others that it is not a good thing that we haven’t provided this 

funding, and we know that there is no funding in the alternative 

source that you say keeps us from doing the funding. 

So your argument is that you are legally prevented from doing 

it. HUD doesn’t agree with you, but you are legally prevented. But 

you don’t know that. Based on what? You say if there is a legal 

opinion. On what basis have you concluded that you are legally 

barred from providing this funding given the existence of a zero appropriation. What is the legal basis? Is it in the statute? 

Mr. CASTILLO. Appropriations law, sir. If we were— 

Chairman FRANK. No, show me the language, what language. I 

assume that you knew you were coming to testify, so what language in what law prohibits you from testifying? Let him tell you. 

What language? 

Mr. CASTILLO. I know it is in the written testimony that I submitted, sir. 

Chairman FRANK. Well, I would ask for unanimous consent to 

wait a couple of minutes while they help him find that wording. 

Will you find me the legal wording that says you can’t do it? 

Chairwoman WATERS. Without objection, we will wait. 

Chairman FRANK. While we are waiting, my colleagues in North 

Carolina tell me that after the hurricane in North Carolina in 

1999, there was funding made available under this provision, so 

this reference to a 1999 decision does not appear to have substance. 

Mr. ETHERIDGE. If the gentleman would yield for just a second? 

Chairman FRANK. Yes. 

Mr. ETHERIDGE. In 1999, FEMA did the right thing, because 

Hurricane Floyd was in North Carolina, which I happen to know 

a good deal about. We had a horrible situation. They came in and 

did the right thing. We provided housing, and it worked. And that 

is the kind of model that we ought to use and I, for one, thought 

that was the kind of model we were going to use. And Madam 

Chairwoman, in New Orleans at the— 

Chairman FRANK. Let me get an answer. What legal language 

prevents you from providing this funding? 

Mr. CASTILLO. Sir, I can get back to the committee; I don’t have 

that with me. 

Chairman FRANK. I am appalled by that Mr. Castillo. Like I said 

to you earlier, I understand part of this is a problem between HUD 

and FEMA, but here we have an admitted need, public housing destroyed by a natural disaster. 

25 

Public housing authorities needing money to fix it, people living 

in inadequate housing, people living away from home, and you 

come and tell me two things: One, you wish you could provide them 

the money; and two, you legally can’t do it; but then three, you 

have no basis for telling me that. You say, oh, legally we can’t do 

it, but you don’t know what law it is. Maybe it is this statute, 

maybe it is that statute, you can’t prove the language, you will get 

back to me. Your agency has been promising to get back to me for 

a year. 

Mr. Castillo, give that money to building the housing. In the absence of any legal authority, and let me ask now, Madam Chairwoman, and if necessary, I will ask our committee to subpoena it, 

I want any existing legal opinion that tells you you can’t do that, 

because I don’t think there is one. I think this is just an excuse. 

Chairwoman WATERS. Mr. Chairman, if you would yield for a 

moment. What is appalling about what you are revealing is that 

even if there are questions, you have one Agency zeroing it out and 

one Agency saying you can’t use their money, and no attempt to 

fix it. No attempt to resolve it. That is what is so appalling, when 

we have— 

Chairman FRANK. I want to thank the gentlewoman. 

Chairwoman WATERS. Yes. Thank you, I yield back. 

Chairman FRANK. One last question—yes, Mr. Castillo? 

Mr. CASTILLO. If I may, I will read from what I have: ‘‘Generally 

appropriations may be spent only on the purposes specified,’’ that 

is from 31 USC, 1301(a), ‘‘and may not be transferred to other accounts without statutory approval,’’ 31 USC— 

Chairman FRANK. And that law was passed when? 

[No response] 

Chairman FRANK. Let me put it this way, long before 2003, because in your 2003 memorandum, you acknowledged, the Agency 

does, that language was never considered to prevent providing 

funding, particularly when there was no appropriation. 

Let me just ask one last question of both of you: Are you, as representatives of your agencies, and representatives of our Executive 

Branch of this great Federal Government, do you think we have 

done a good job in responding to the housing needs of the people 

in that area after the hurricane? I want to ask both of you. 

Mr. CASTILLO. I think absolutely we could have done better and 

we continue to work— 

Chairman FRANK. No, do you think we did a good job? 

Mr. CASTILLO. I think the Agency did a good job in that, from 

what I have seen, and what we were faced with was a very difficult, unprecedented situation. And could it have been improved? 

Absolutely. 

Mr. RIDDEL. Yes, sir. Given the magnitude, obviously we could 

have done more and would want to do more, but I think a major 

effort was made by many people to do the best job possible. 

Chairman FRANK. Well, I didn’t think ‘‘heck of a job’’ was a good 

argument then, and I don’t think it is now. Thank you. 

Chairwoman WATERS. Thank you very much. Chairman Thompson? 

Chairman THOMPSON. Thank you very much, Madam Chairwoman. I would like to take up from where Chairman Frank left 

26 

off. Mr. Castillo, can you tell me whether or not we have incorporated into the national disaster housing strategy a provision that 

would prevent a Katrina-type snafu from occurring with respect to 

housing? 

Mr. CASTILLO. We are definitely much better prepared. We have 

taken what we have learned from Katrina, from the response to 

Katrina and Rita, to make the necessary improvements. 

As I said, this was an unprecedented event, not just for the Gulf 

Coast and the Gulf Coast States, but for FEMA and the Federal 

Government as well. So I think yes, we have incorporated what we 

have learned, both things in the Post-Katrina Emergency Management Reform Act, and what we have learned since then. 

Chairman THOMPSON. Well, with respect to that, are you aware 

of any pre-negotiated contracts for housing that are in place as we 

speak? 

Mr. CASTILLO. Housing, temporary housing? 

Chairman THOMPSON. Yes. 

Mr. CASTILLO. Yes, well we determined a level for us of temporary housing units, there are some contracts in place. As a matter of fact some will be awarded shortly within the next couple of 

weeks for additional— 

Chairman THOMPSON. Were these competitively bid or sole 

source? 

Mr. CASTILLO. Yes, sir, competitively bid and also had a stringent, much more stringent formaldehyde level that they have to 

meet. 

Chairman THOMPSON. Thank you. And I would say, Madam 

Chairwoman, for the record, there are some things that concerned 

me relative to how my State has utilized the funds with respect to 

Congress’ support. Do you know offhand, Mr. Castillo, how much 

money Mississippi actually received for affordable housing? 

Mr. CASTILLO. For affordable—I’m not sure I understand— 

Chairwoman WATERS. CDBG. 

Mr. CASTILLO. No I don’t, sir. 

Chairman THOMPSON. You don’t know. Alright. If I told you $615 

million as a number, does that sound reasonable? 

Mr. CASTILLO. If you said that, yes. 

Chairman THOMPSON. Alright. Any idea how many units we have 

produced since Katrina? 

Mr. CASTILLO. No, sir. I know, as far as the alternative housing 

pilot program, Mississippi has done an excellent job in getting the 

units out and I believe there are 3,000 of those that are out there 

and in place and people actually placed in the units. 

Chairman THOMPSON. What if I told you there are 6,000 people 

who are still in temporary units. Would you think that is an unacceptable number? 

Mr. CASTILLO. Sir, I think having anyone in temporary units is 

unacceptable and I think we work and work with them to place 

them. Mississippi perhaps has an even tougher challenge than Louisiana does based on the number of available housing units. 

Chairman THOMPSON. What if I told you that some of the money 

that we sent down was proposed to raise judicial salaries in the 

State of Mississippi? How would you respond to that? 

27 

Mr. CASTILLO. I am not aware of that, but it doesn’t sound like 

that was something it was designed to do. I am not familiar with 

what you are referring to. 

Chairman THOMPSON. What I will do is provide the committee 

with information as to what have been proposed uses of some of 

these monies over and above what we have seen. What if I told you 

that some monies were proposed to be used to pave a road to a Toyota plant some 300 miles away from the Katrina-impacted area? 

Would you think that would be a reasonable use of the money? 

Mr. CASTILLO. No sir. I am not—the source of the funding, I am 

not sure if I understood if you said, but if it is— 

Chairman THOMPSON. They are monies that Congress provided 

to the State of Mississippi and the State of Mississippi decided that 

the highest and best use of some of these funds would go for some 

of those things I have shared with you this morning. 

And I am saying that in the wake of this housing crisis, in the 

wake of what clearly was an inadequate response, my State has decided to do things with the money totally unrelated to housing for 

which HUD provided a waiver for some of these activities to go forward. More specifically, the proposal with the $600 million investment in the Port of Gulfport, which comes out of Block Grant monies, which clearly does not, in my estimation, address the affordable housing issue along the Mississippi Gulf Coast. 

So it is out of that concern that I raise it, Madam Chairwoman, 

that in the event of future disasters, I think we have an obligation 

to put some constraints on the money, given the demonstrated poor 

use of the funds that have gone into the area. 

I guess the last question is for Mr. Riddel. Have any of the companies attended FEMA’s industry day to offer alternative type of 

housing solutions? 

Mr. RIDDEL. Mr. Chairman, based on your question I am not sure 

I can answer that, but attending FEMA programs— 

Chairman THOMPSON. Well, you have industry days, I am told, 

for vendors to come and demonstrate their affordable housing possibilities, and that was one way that you scoured the landscape to 

see whether or not opportunities existed for people to come in and 

build affordable housing were available. 

Mr. RIDDEL. Again, that perhaps is more for FEMA to address. 

I am not familiar with their programs. 

Chairman THOMPSON. Well, I will yield back, Madam Chairwoman. 

Chairwoman WATERS. Thank you. If the gentleman will yield for 

a moment, I would like to know, do you have boarded-up public 

housing in the State or in the area that you know about? 

Chairman THOMPSON. Do I have boarded-up housing? 

Chairwoman WATERS. Yes, do we have public housing that is not 

being used, that is boarded-up and has been sitting there? 

Chairman THOMPSON. Oh absolutely, along the Gulf Coast. 

Chairwoman WATERS. In the State of Mississippi? 

Chairman THOMPSON. Yes. 

Chairwoman WATERS. Thank you. Mr. Souder? 

Mr. SOUDER. Thank you, Madam Chairwoman. First, I would 

just like to say for the record, having been a subcommittee chair 

and on many committees, it has baffled me why, whether it was 

28 

the Clinton Administration or the Bush Administration, why witnesses don’t come prepared to handle logical questions. It was obvious that Chairman Frank had a letter in, obviously the chairman 

of the Homeland Security committee is from Mississippi, he is 

going to ask you Mississippi questions, sometimes we don’t, but obviously there are disagreements between the two Agencies. 

This is a perpetual problem that makes congressional oversight 

very difficult and often leads to further legislation that isn’t helpful 

because stonewalling out of the Executive Branch does not advance 

any type of cooperation. And it just seemed to me that some of 

those questions were pretty logical questions that were going to be 

raised, and there should have been a more direct answer. It is not 

uncommon, but it is just more of a general expression of frustration 

that we have all had. 

This is the 4th hearing that I have been part of regarding the 

FEMA portion, too, over in the Oversight and Government Reform 

Committee under Chairman Waxman, as well as others under the 

Homeland Security Committee, and I have some general housing 

questions, but I first want to revisit the emergency question and 

the so-called FEMA trailers. 

It is important to understand that formaldehyde is an adhesive 

and a repellant, and you can ingest it or you can inhale it. Even 

pills have formaldehyde in them. So we are not going to get to a 

zero tolerance of formaldehyde, and I think you are correct to move 

to what is an acceptable level of formaldehyde, because this room 

has formaldehyde in it, in the chairs, in the table, in the carpet, 

in the door. 

The challenge is, what is a manageable level that doesn’t have 

adverse reactions, and some people are going to react differently 

than other people. If we have an emergency, if we get too restrictive here, it won’t be affordable, we won’t be able to produce it rapidly, and we will have nowhere, even a tent. Arguably a tent has 

more formaldehyde in it than a trailers, so if you pitch tents—because it is inside the fabric in a tent. 

What isn’t intended to happen is for people to stay in small, confined areas for long periods of time. Whether it is a parked trailer, 

and you noted correctly in your testimony and your answers, Mr. 

Castillo, the different types of trailers. Obviously, people live in the 

mobile homes for extended periods of time. People in the summer, 

in all the park service, border patrol, all our agencies, can for a period of months live in a smaller-sized unit without health problems. 

We haven’t had health problems across the country. 

What is a challenge, however, when it starts to move to years in 

a confined area, you may find problems. Furthermore, all of, I can 

assure you the whole industry is rushing to find something other 

than formaldehyde. Thus far, the major alternative has greater 

health risks than formaldehyde. Furthermore, we have one company that has come up with one that looks like it is free, it hasn’t 

been formaldehyde-free, it hasn’t been tested, we don’t know the 

cost, and we don’t know whether the materials can be found in 

large scale like you would need. And this is a difficult subject to 

work through, but I think it is important for the record to show 

that. 

29 

I am going to come back again, Chairwoman Waters raised a 

question about a study. On April 24th, a new study was released 

in Mississippi. The only study, by CDC, of kids who were in the 

emergency housing and in other housing, and a couple of the highlights from that study illustrate very critical questions to this debate. One is, there wasn’t a difference between the people in the 

trailers from people, kids, not in the trailers. 

Furthermore, the level of allergic reaction was actually lower 

after Katrina than it was before, which leads to a fundamental 

question when you look at emergency housing. Depending on the 

area, New Orleans was a massive event, as well as if you go over 

to Biloxi, and you had lots of facilities there, that when the dikes 

overflow, and when the flood comes in, are going to release chemicals and things in the air, that the more you have somebody in a 

confined area, whatever that confined area is, is going to be more 

at risk. And certainly the longer they are there. 

And that when these disasters occur, somebody needs to have a 

control group so we don’t overreact and made all kinds of statements in the general public that aren’t accurate because we didn’t 

do a control group at the time. Mississippi is trying to track it over 

a period of time, but their size sample isn’t really large enough and 

it isn’t over in New Orleans. 

But if we are going to have a responsible emergency response 

mechanism here, it is cost, it is speed, it is safety, it is length of 

time, and you have to have a method to be able to transfer people 

quicker, and we also have to be looking as we build more urban 

areas in these hurricane zones and potential zones with higher percentages of low-income people in them, who don’t necessarily have 

the resources to do it, there has to be a supplemental plan of not 

only the emergency housing, but the transfer to get them out with 

enough money to move. Congress bears some of this responsibility, 

but I don’t think it serves the general public well— 

Look, your Agencies worked hard, that isn’t the answer. We 

failed in Katrina. No matter how hard you worked, we failed. We 

need to do better in the future and we need to acknowledge that 

we failed and we are going to do better in the future. I yield back. 

Chairwoman WATERS. Thank you very much. Congresswoman 

Christensen. 

Mrs. CHRISTENSEN. Thank you, Madam Chairwoman, and Mr. 

Chairman, ranking members, thank you for having this hearing. 

As a Representative from an area that is in the path of hurricanes, although we have been spared the last couple of years, this 

is a very important hearing for us as well. And even though I am 

not convinced by some of the answers, I was glad to hear Mr. 

Castillo say that there is a desire and an intent on the part of 

HUD to provide housing because we are where we are because this 

Administration, based on my experience in trying to deal with 

health care, did nothing to help people stay in New Orleans, and 

once they were out, did everything to make sure that there were 

barriers to their returning, so I hope that the statements that we 

have heard today represent a new posture on the part of the Administration, because there has to be a will at the very top to provide this housing to people and to bring the people back. Otherwise, we are spinning wheels here this morning. 

30 

I don’t want to go over the questioning of Mr. Cleaver and Chairman Frank again, but on that potential solution of permanent repeal of 9(k), I don’t see that as a solution at all because the intent 

is to provide the funding to make sure that people who lose their 

housing in a disaster are rehoused. I just don’t understand that as 

a solution. 

Let me ask a question that particularly relates to my experience 

with both FEMA and HUD. When we talk about replacing housing, 

are you required to take into account the cost of replacing that 

housing in the different localities, building costs in the territories 

and some other remote areas I am sure are much higher because 

we have to ship in materials. And I remember after two very major 

disasters, Hurricane Hugo and Hurricane Marilyn, meeting with 

FEMA and HUD over and over and over again to try to get the 

funds to restore our public housing. 

So what is the policy? Do you take into account the cost of the 

rebuilding when you provide the funding? In many instances, we 

were not able to fully restore our housing. 

Mr. RIDDEL. Congresswoman, at least with respect to HUD, the 

funding levels are appropriated or set aside from Congress with respect to emergencies and disasters, so those are the funds that are 

appropriated for our use. With respect to the rebuilding of housing, 

HUD does have development cost limits, guidelines that control the 

costs of replacement housing in each jurisdiction, and those are locally-based numbers. 

Mrs. CHRISTENSEN. Well, we have been very fortunate that we 

didn’t have to go through this recently. But I hope it is addressed 

if we find ourselves in that unfortunate situation again. 

One of the issues with individuals who want to return, for example to New Orleans, or to anywhere in the Gulf region is that the 

cost of housing is higher, and becoming unaffordable to many. 

What is being done to address this so that families can return? And 

there are other barriers such as utility costs and unpaid utility balances. What is being done to assist these families to meet some of 

these barriers so that they can return home? 

Mr. RIDDEL. At least with respect to the HUD programs, certainly including in New Orleans, the commitment has been that 

every family who wants to return will have that right and that opportunity. There has been a variety of forms of assistance made 

available, including the payment of transportation and other costs 

to relocate families— 

Mrs. CHRISTENSEN. What about if they have utility balances and 

they are unable under these circumstances to pay those balances? 

Mr. RIDDEL. It depends on the nature of the program. In most 

cases, those families, as opposed to paying 30 percent of their income for rent, they were paying zero for rent during the time that 

they were relocated, so there was available funding to pay for the 

total cost of their housing, including utilities. 

Mrs. CHRISTENSEN. Well, I guess I will be able to clarify that in 

the next panel. Because of the failure to keep good records on displaced individuals and families, we don’t have good addresses for 

many who are eligible for DHAP. So what is being done to find 

those people that we have not been able to locate who are eligible 

31 

for this program so that they can avail themselves of it? The DHAP 

program? 

Mr. CASTILLO. People who are clients of ours who had applied for 

FEMA assistance, we have worked to identify all those, and continue to work to identify all those, including correspondence and 

actual visits to where we have as an address— 

Mrs. CHRISTENSEN. Do you have a national campaign out saying, 

if you think you are eligible, because if you don’t know where the 

people are, if we have lost some of those people, how do you reach 

them? 

Mr. CASTILLO. It is targeted to the folks who have been part of 

our program. In order to be eligible for DHAP, it is folks who were 

applicants of our program, of FEMA, and then are being 

transitioned into DHAP. In other words, other housing that is 

under HUD. So we— 

Mrs. CHRISTENSEN. Do you know where to find everyone who is 

eligible? 

Mr. CASTILLO. We hope to. I mean, if people, and if we hear that 

people who are perhaps, that we haven’t been in touch with, we 

work to find them, but we know, again, if they are being provided 

direct housing by FEMA, or in the transition a hotel or motel, we 

know we can find them, yes. 

Mrs. CHRISTENSEN. I think my time is up. Thank you, Madam 

Chairwoman. 

Chairwoman WATERS. You are certainly welcome. Mr. Green. 

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

witnesses. And because time is of the essence, I will move as quickly as possible. 

I need to start by coming back to Ms. Capito. She posed a question to Mr. Castillo that I think is important and does merit some 

response. For edification purposes, Mr. Castillo, FEMA spent about 

$2.7 billion to purchase 145,000 mobile homes and trailers; this 

was after Rita and Katrina. About 60,000 trailers have been stored 

nationwide. 

We are talking about, in Hope, Arkansas, $25,000 a month paid 

as rent on 453 acres. Literally, according to some accounts, we had 

more trailers in Hope, Arkansas, than we had people, probably 

about 20,000 trailers. I believe these are the trailers of which the 

ranking member speaks, but if I am incorrect, I beg to be corrected. 

Madam Ranking Member, are these the trailers we are talking 

about? 

Mrs. CAPITO. Yes. 

Mr. GREEN. Okay. With that said, Mr. Castillo, do you have some 

insight that you can share with us with reference to these trailers 

that we paid some inordinate amount of money for over some long 

period of time? 

Mr. CASTILLO. Well sir, we, and the way I understood Congresswoman Capito’s question had to do with if there were other units 

out there that weren’t being used. The ones that we have in Hope 

and Selma are units that we have in reserve should we need to 

move out quickly, and those are being tested around the clock, basically, for formaldehyde, all the units that we would have out, all 

the mobile home units that are being stored there. 

32 

Mr. GREEN. Since you brought up the formaldehyde, let us go to 

this quickly. Let us assume for our purposes right now that we 

have trailers that are toxic, that are a hazard to human habitation. 

The human habitation is not feasible with the trailers. For our purposes, let’s assume that this is the case. 

If this is the case, which Agency is responsible for dealing with 

the question, because having had this come before us in Homeland 

Security as well as Financial Services, I have seen both sides of the 

argument. Which Agency is responsible for dealing with it if this 

is the case? 

Mr. CASTILLO. If it is an unoccupied trailer? 

Mr. GREEN. If it is occupied with a person and it is not fit for 

habitation? 

Mr. CASTILLO. Then we have made and we have units that came 

back as, we tested occupied— 

Mr. GREEN. Excuse me, if I may, let me just intercede, because 

there are often occasions when persons finish and I don’t know exactly what the answer was, so I have to beg that you do this. Could 

you just simply say FEMA or HUD? This would help me, and then 

you may elaborate. 

Mr. CASTILLO. If they are in a FEMA-sponsored trailer, FEMA 

is responsible for relocating them. 

Mr. GREEN. Alright, let’s take these trailers that we are talking 

about right now. Let’s assume, just for our purposes today, that 

these trailers are not fit for human habitation. Who is responsible 

for dealing with the problem of these trailers? 

Mr. CASTILLO. Occupied trailers? 

Mr. GREEN. Occupied trailers. 

Mr. CASTILLO. FEMA. 

Mr. GREEN. And if this is the case, does FEMA have a plan to 

extricate people from these trailers given that you are not sure 

about the studies, but at some point we will get a study. If we get 

one that is adverse to the interests of the people who are living in 

the trailers, does FEMA have some plan in place to extricate persons? 

Mr. CASTILLO. To extricate? We relocate people, and yes, we do 

have a plan in place and have been moving out, like I said, an average of 1,000 families a week out of trailers. 

Mr. GREEN. How many do we have in the trailers currently? 

Mr. CASTILLO. In mobile homes and trailers, a little over 22,000. 

Mr. GREEN. Okay, if we are moving 1,000 a week, then we are 

looking at 22 additional weeks, or thereabouts. I am very much 

concerned about the people who will be in the trailers for that additional 22-week period. I was at Homeland Security when we had 

a witness who indicated there is no acceptable level of formaldehyde that the government recognizes, and that causes me some 

consternation. 

So I would beg that you please give additional thought as to how 

we will extricate, that is my terminology, relocate persons from 

these trailers given that the people that we talked to, who come before us, indicate that there is concern. I have heard the witnesses 

say it myself. 

Mr. CASTILLO. Yes. 

33 

Mr. GREEN. Moving quickly to one other question with reference 

to the DHAP program. We started March of about a year ago 

maybe, maybe March of this year, $50 increments, this is increase 

in rent, and at some point we are finding that we have persons 

who are not elderly, who are not seniors, who are not handicapped, 

who cannot afford to pay the $50. Now to most of us that doesn’t 

seem like a lot, $50 a month. But to some people it is a lot of 

money and we are going to have people evicted because of their inability to pay this $50 per month, people who are in the DHAP program. How is FEMA going to manage this, or HUD? 

Mr. RIDDEL. Congressman, there are emergent studies of the clients that we have that are within the DHAP program. Each one 

of those families has a case manager who works with them, and 

the conclusions that we are getting from the research to date is 

that 80 percent of those families have income either from wages or 

other benefits. So there is a strong percentage of the families who 

do have income— 

Mr. GREEN. Could you quickly tell us what we will do about the 

20 percent who won’t? 

Mr. RIDDEL. Well the 20 percent, we have in the 2009 budget, 

we are requesting $39 million to provide funding for those. Those 

are the longer-term families who are elderly or disabled that are 

perhaps going to be requiring permanent assistance or assistance 

on a long-term basis. 

Mr. GREEN. I know I have to yield back, but could you please tell 

me about the person who is not elderly, not disabled, who still cannot afford the rent. We do have such people. 

Mr. RIDDEL. We are working with them, those are hardship type 

cases, we are working with them with case managers to try to provide whatever resources they need through individual development 

plans to transition them. 

Mr. GREEN. Thank you, Madam Chairwoman. I yield back. 

Chairwoman WATERS. You are welcome. Mr. Etheridge. 

Mr. ETHERIDGE. Thank you. Madam Chairwoman, I would like to 

thank you for holding this hearing. Let me follow up on one point 

Mr. Frank made earlier. 

Before I came to Congress, I served in the State legislature at 

the county level, and I served 8 years as State Superintendent of 

Schools in North Carolina, with thousands of people working for us 

and with us. And I learned one thing: When I called an attorney 

and I asked him for an opinion, I had two choices. I could ask him, 

how do I get this done? That would give him a direction to go. Or 

I could say, give me an opinion, I don’t have the money, I would 

rather not do this. That might not have been that way, but just by 

asking for an opinion without a direction, you would get another 

opinion. 

And I remember 1999 when North Carolina had the terrible 

flood, the worst flood we had ever had, a 500-year flood. I don’t 

know how you measure a 500-year flood, but FEMA did the right 

thing with appropriations, and we relocated people, put them in 

temporary and impermanent housing. It was on a much smaller 

scale than what you are dealing with now. 

But I, like a number of my colleagues, am concerned. I think the 

reaction has been inadequate and the response today has not been 

34 

as forthcoming I think as it should be from two Agencies, so let me 

ask a couple of questions. 

My first one is, 3 years after Hurricane Katrina we still have, 

you said about 23,000 displaced persons. How many of those people 

are in travel trailers and how many of them are in what I call a 

mobile home or a trailer that has much more space, because there 

is a huge difference in those two in terms of living space and ability, and I know others are in rentals. What is the difference between those numbers? 

Mr. CASTILLO. About 84 percent are in travel trailers that are on 

private sites, primarily people who are— 

Mr. ETHERIDGE. Whether they are private or public, it doesn’t 

matter. And the rest are in what, mobile homes? 

Mr. CASTILLO. Yes. 

Mr. ETHERIDGE. Which would be more than one room? 

Mr. CASTILLO. Yes. 

Mr. ETHERIDGE. Or rental apartments? 

Mr. CASTILLO. No, in mobile homes. 

Mr. ETHERIDGE. Where are the rest of them? Wait a minute now, 

if we have 84 percent in travel trailers, and the balance of them, 

are any of them in rental property? Permanent housing anywhere? 

Mr. CASTILLO. The 22,000 are those who are in temporary housing units, which means mobile homes, parked models, travel— 

Mr. ETHERIDGE. How many do you have in rental property in different places? 

Mr. CASTILLO. Those numbers, we have transitioned more than 

30,000 who are in rental properties that are part of the DHAP program. 

Mr. ETHERIDGE. This gets deeper and deeper. That means you 

have 22,000 who are in rental permanent property? 

Mr. CASTILLO. 22,000 in temporary units and around 30,000 in— 

Mr. ETHERIDGE. 30,000 in rental/permanent? 

Mr. CASTILLO. Yes, but you know a lot of folks who are 

transitioned into rental property or rental that are out of the 

FEMA program. 

Mr. ETHERIDGE. Let me go a little bit further because in my district, we are sort of in the eye of the hurricane when it comes and 

we are now in hurricane season. Can you tell this committee and 

tell me that we are better able to handle it and we will be able to 

do something if a hurricane should hit public housing and the people in North Carolina? 

Mr. CASTILLO. Yes. 

Mr. ETHERIDGE. Are you prepared to handle it? 

Mr. CASTILLO. Yes, and we are better prepared, as you started 

to say— 

Mr. ETHERIDGE. What does ‘‘better prepared’’ mean? 

Mr. CASTILLO. Well, we have taken lessons learned from Hurricane Katrina and incidents since. We have identified and targeted 

the— 

Mr. ETHERIDGE. Do you have the money? 

Mr. CASTILLO. The money? I’m sorry, for? 

Mr. ETHERIDGE. Well, if you are going to do something, you have 

to have money. The last time I checked, you can’t do anything 

without money in this country. 

35 

Mr. CASTILLO. Through the disaster relief fund to fund our operations, yes, sir. 

Mr. ETHERIDGE. Mr. Riddel, how does the memorandum of understanding improve HUD’s ability to apply its expertise in disaster, after the answer I just got was ‘‘yes,’’ and you have zero 

funding you say in the account that you asked for? Now tell us how 

you can handle that? 

Mr. RIDDEL. Well, Congressman, what we have worked on is a 

modification of the memorandum of agreement— 

Mr. ETHERIDGE. No, no, do you have it in place, yes or no? 

Mr. RIDDEL. The memorandum exists only in draft. 

Mr. ETHERIDGE. I beg your pardon? 

Mr. RIDDEL. The memorandum has been prepared in draft form. 

It is not an executed document. 

Mr. ETHERIDGE. Well, you know when hurricanes come, they 

don’t come in draft form. 

[Laughter] 

Mr. ETHERIDGE. Okay? 

Mr. RIDDEL. Yes. 

Mr. ETHERIDGE. If I am in a house, and I am gone, I am not in 

a draft form, it is a reality. So I will ask my question again, do you 

have it done? 

Mr. RIDDEL. No sir, that is what we are— 

Mr. ETHERIDGE. When will you have it done, completed, and 

signed off, where if something happens, I can call you and get help? 

Mr. RIDDEL. We are trying to work with— 

Mr. ETHERIDGE. When will it be completed? Is there a date? You 

know, in this country, we sort of work on timelines. I was in business for 19 years, and if I asked somebody for a timeline, I expected to have a date. Can you give us a date? 

Mr. RIDDEL. No, sir. We may— 

Mr. ETHERIDGE. When will you be able to give a date? 

Mr. RIDDEL. We may need to get congressional support for the 

changes we are proposing. 

Mr. ETHERIDGE. Do you think we can dial the hurricane center 

and ask them to hold them until we get this done? I mean, this 

is serious business. This is life and death. 

Mr. RIDDEL. Absolutely. 

Mr. ETHERIDGE. How soon will you be over asking for congressional help if you need it, because we want to help. When will that 

be over? 

Mr. RIDDEL. We are following it up for sure, sir. 

Mr. ETHERIDGE. Can you give us a timeline on that? 

Mr. RIDDEL. I cannot give you a specific date, but certainly it 

gets immediate attention. 

Mr. ETHERIDGE. This is embarrassing. I yield back. 

Chairwoman WATERS. Thank you very much, Mr. Etheridge. We 

have been joined by Mr. Watt. I understand that you have no questions at this time, but without objection, Representative Watt will 

be considered a member of the subcommittee for the duration of 

this hearing so that he can participate in the next panel. 

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 

36 

for members to submit written questions to these witnesses and to 

place their responses in the record. This panel is now dismissed 

and I would like to welcome our second panel. Thank you very 

much. 

I am pleased to welcome our distinguished second panel: Mr. 

Saul Ramirez, executive director, National Association of Housing 

and Redevelopment Officials; Mr. Reilly Morse, senior staff attorney, Mississippi Center for Justice; Dr. Edward J. Blakely, recovery chief, City of New Orleans, Office of Recovery and Development 

Administration; and Ms. Laura Tuggle, staff attorney, New Orleans 

Legal Assistance Corporation, Southeast Louisiana Legal Services. 

Without objection, your written statements will be made a part 

of the record. You will now be recognized for a 5-minute summary 

of your testimony. We will start with you, Mr. Ramirez. 

STATEMENT OF SAUL N. RAMIREZ, JR., EXECUTIVE DIRECTOR, 

NATIONAL ASSOCIATION OF HOUSING AND REDEVELOPMENT OFFICIALS 

Mr. RAMIREZ. Thank you, Chairwoman Waters. I appreciate it, 

and I thank you for your leadership on this issue as well as Chairman Cuellar for the great work that he is doing in the subcommittee, as well as Chairman Frank and Chairman Thompson 

for their work in this regard. 

For nearly 3 years, NAHRO has been focused on the issue of the 

memorandum of understanding. We have worked with HUD and 

FEMA to bring clarity to what has truly stalled and in many ways 

kept at a complete halt the repair and reconstruction of the region’s public housing assets, and a truly essential piece of our public infrastructure in the housing arena. The MOU was issued in 

2001 that led FEMA and HUD to conclude that FEMA’s assistance 

authorized under Section 406 of the Stafford Act for permanent repairs was not an eligible pot of dollars for housing agencies to tap 

into for reconstruction and renovation, and that it was in direct 

conflict of Section 9(k) of the Housing Act of 1937, as has been 

talked about recently. 

Let me also add as an aside that there was mention of 403 monies for immediate relief that were supposedly made available to 

agencies at that time to be able to deal with boarding-up or tarping 

or preventing additional mold damage or decay to set in to these 

properties. FEMA notified agencies after spending tens of thousands of dollars that they were not eligible for 403 monies because 

those activities were classified, in their opinion, as 406 activities. 

So housing agencies got hit from both sides in regards to that effort. 

The dollars that were put into the 9(k) pot of resources were 

grossly inadequate for the need to reconstruct the housing and as 

such we have been having this wrestling match with HUD and 

FEMA in regard to that, and because of the inconsistencies that 

they have cited, the people that are most vulnerable in those housing units, in particular seniors, the disabled, and the working poor 

have yet to relocate back to their communities and worse yet, have 

been forced to either maintain their residence in temporary housing or now under the DHAP program. 

37 

Let me also state that since the DHAP program was put into effect by HUD, it has worked effectively in serving those people who 

have been displaced from their communities, but it should be our 

intent as a Nation to always work to provide the opportunity for 

people to relocate back to their communities, especially those who 

depended on their livelihood from those communities and have now 

been forced to move to other areas. 

Further, let me state that the MOU is in direct conflict with 

what we believe is the intent of Congress and agree wholeheartedly 

with Chairman Frank’s comments that there are no inconsistencies 

in being able to tap into these dollars to rebuild, again as I mentioned, a key public asset within our infrastructure, which is public 

housing. 

Let me further state that in addition to the changes that are 

being proposed, which we do not agree that 9(k) needs to be repealed in order to deal with the excess, last resort funding that can 

be provided out of Section 406 through FEMA, that in fact what 

we have here is just a failure to communicate and an unwillingness 

to take a proactive approach to resolving these issues. 

We further bring to the attention of the committee that there has 

been ample opportunity over 3 years to deal with the relocation of 

those in temporary housing. And to Chairman Cuellar’s point, what 

is temporary and what is permanent? Any time someone has been 

displaced for more than 6 months from their principal residence 

and their livelihood, and has been forced to move into another facility, it turns into permanent for many of these folks, so we think 

that there is a lot of room that can be addressed in this regard, 

but specifically the nuances that are being put out there as the reason for denying funding for housing agencies to rebuild a housing 

stock. In this case, more than 6,000 units—many of which remain 

out of use—within the inventory have not been rebuilt because the 

dollars are not there. 

I would like to thank the committee for the hard work in regards 

to this issue. We will be glad to address this particular issue or any 

other issues in regards to this matter. Thank you for the time 

Chairwoman Waters. 

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

241 of the appendix.] 

Chairwoman WATERS. Thank you very much. 

Mr. Morse? 

STATEMENT OF REILLY MORSE, SENIOR ATTORNEY, KATRINA 

RECOVERY OFFICE, MISSISSIPPI CENTER FOR JUSTICE 

Mr. MORSE. To the Chairs, ranking members, and members of 

these committees and subcommittees, thank you. 

As we enter our third hurricane season since Katrina, we welcome your shining a light into the widening cracks in this recovery. 

On behalf of my organization, the Mississippi Center for Justice 

and the tens of thousands of people left out by my State’s recovery 

program, I urge you to step into the breach and ensure that FEMA 

will fulfill its temporary housing duties and that HUD moves 

CDBG funds for lower-income families up from the back of the Federal assistance line. 

38 

In Mississippi, more than 6,300 households reside in FEMA trailers and another 1,200 occupy hotel rooms. These include the most 

vulnerable storm victims, like Joe Stevens, 52, whom FEMA housing representatives told he had until June 1, 2008, to find an 

apartment. Mr. Stevens used to be a commercial fisherman until 

diabetes took his legs. He used to have a daughter until her suicide 

left him caring for two of her three children. He used to have a 

house in the Lima community until a tornado spun from Hurricane 

Katrina took that too, reports the Jackson Clarion Ledger. 

Two bedroom rentals, Madam Chairwoman, in Harrison County, 

start at $800. Mr. Stevens receives $637 a month in disability plus 

$500 a month in survivor benefits for his granddaughters and 

about $60 a month in food stamps. He has barely enough to buy 

groceries and pay his utilities much less save money for an apartment. Mr. Stevens said, ‘‘They have threatened to bodily move us 

out of here and put us in a motel. That would be worse.’’ 

FEMA spokesmen dispute that its workers are pressuring people 

to leave by June 1st. Last month, however, news reports across 

south Mississippi and MCJ surveys revealed that FEMA housing 

workers had pressured trailer park residents to move immediately, 

warning that they could be locked out and their belongings bagged 

and tagged. With $5.4 million in emergency CDBG funds handed 

to Mississippi, how could this happen? 

First, Mississippi chose to deny homeowner grant assistance to 

storm victims like Joe Stevens who suffered hurricane wind damage. Our Governor asserts that this was part of the bargain for receiving this disaster aid, but it appears nowhere in the legislation 

or regulations. If Joe lived in Louisiana, he would be covered. So 

why should recovery from this Nation’s largest natural and housing 

disaster turn on which State you live in? 

Second, Mississippi delayed for 18 months or more the creation 

of any affordable rental housing programs with CDBG funds, and 

today not one CDBG dollar has yet been spent from these programs 

to actually construct a single rental housing unit. As a result, 

FEMA has to put Joe Stevens’ family and thousands more like him 

into a hotel without any food storage or preparation resources. 

Third, Mississippi, the State with the highest per capita poverty 

and disability rates has obtained HUD waivers from the requirement to target at least 50 percent of relief funds to primarily benefit lower-income storm victims for $4 billion out of $5.4 billion in 

emergency CDBG funds. As of December 2007, Mississippi actually 

has spent only 13 percent of its funds on lower-income persons. 

Fourth, Mississippi has diverted $600 million in recovery funds 

to realize a 20-year port expansion master plan conceived prior to 

Hurricane Katrina. The State Port of Gulfport has $108 million in 

insurance, up to $55 million more in FEMA funds, and $82 million 

in unencumbered cash, far more than adequate to cover the estimated $50 million in damages to a port with an asset value of $127 

million. Governor Barbour claims the $600 million originally was 

intended for the port. This is false. After the first appropriation, he 

came back here to Congress in the spring of 2006 seeking funds for 

the port expansion, but was turned down. 

39 

June 14, 2008, is the second anniversary of the HUD waiver for the first program from which Mississippi now diverts $600 million. 

Madam Chairwoman, we urge Congress to do the following: 

First, reexamine this waiver and future waivers as required by the statute and require Mississippi to put the $600 million back 

into affordable housing recovery in the area. Second, to require 

FEMA and HUD to ensure that housing-challenged storm victims 

do not fall through the cracks during this DHAP transition, with 

clear and accountable handover processes, a tracking mechanism 

for each household, and a single reporting yardstick to assess overall progress from across these different temporary housing programs. Third, require Mississippi to eliminate discriminatory distinctions in its programs that have dropped into an abyss families 

like Joe Stevens’, thousands of then, plus tens of thousands more 

who are now seeking charitable assistance through local charitable 

groups. Thank you. 

[The prepared statement of Mr. Morse can be found on page 73 

of the appendix.] 

Chairwoman WATERS. Thank you. 

We will now move to Dr. Edward Blakely, recovery chief, City of 

New Orleans. 

STATEMENT OF DR. EDWARD BLAKELY, EXECUTIVE DIRECTOR, OFFICE OF RECOVERY AND DEVELOPMENT ADMINISTRATION, CITY OF NEW ORLEANS, 

Mr. BLAKELY. Good morning, Madam Chairwoman, the other 

Chairs here—Mr. Cuellar, Mr. Frank, and Mr. Thompson—and the 

other members. We are delighted to be here. This is the 34th time 

that New Orleans has appeared before the House of Representatives and the Congress. 

We have been here many times with the same mission, that is 

restoring one of America’s great cities. This has been a difficult 

mission because we have been entwined with several different 

agencies, all with different missions, different rules, and different 

regulations, and with a small staff, it has been very difficult for us 

to navigate these waters. 

I want to look at the larger issues that you are addressing here 

today because they all affect us. There are three issues. First, after 

an emergency like this, a catastrophe as we call it, we need shelter. 

Second, we need temporary housing, and that temporary housing 

should be formaldehyde free, and ensure that it is temporary and 

does not lead to any permanency. And third, permanent housing. 

A full program in the National Disaster Housing Strategy that 

the Congress is asking for should address all three. First, as to survival housing, it is necessary we think for the United States to prepare for disasters of scale. And in preparing for disasters of scale, 

we should have regional shelter areas, areas that we already have 

in place and could be made available in case of an emergency. 

The Federal Government should examine all of its property and 

all of its assets, some of these BRAC assets that might be utilized 

in the case of an emergency like this. States have large facilities, 

fair grounds, and many other things where temporary housing 

might be put almost immediately if the watering systems and other 

things were made appropriately. The United States Army should 

40 

look at all of its facilities to ensure that secure facilities might be 

places where you could house people in such an event, and we 

should develop resettlement plans so that people can come back in 

the communities. Simply evacuating them and putting them outside their jurisdiction does not ensure that they can come back. 

As to temporary housing, we lost over 70 percent of all of our 

housing in our City. Many of our people are still being sheltered, 

as I described, in situations that are dangerous. It is necessary, we 

think, for a temporary housing plan to provide for the use of the 

physical inventory within the jurisdiction. 

For example, we had, in our jurisdiction, other housing such as 

public housing assets. We had housing that the City had taken advantage of with its blight removal program. We could have put 

temporary structures on that housing. We could have used manufactured housing, panelized construction to put housing on those 

premises. We could have leased other premises from other individuals to put housing on those premises and brought our citizens 

back much faster and much quicker even if they moved to permanent housing elsewhere. So we think it is important that we have 

that as part of our repertoire. 

Third, the vouchers. Vouchers are very important. But the vouchers have to be organized in such a way that they can be used locally. There should be an enhancement to those vouchers so you 

can use them locally, and that would stimulate the rebuilding of 

the rental housing stock if the vouchers were substantial and if 

people knew the vouchers would be longer term. We know that it 

takes at least 2 years to build housing. Even if you are building 

your own home, it takes a year to get it organized, and another 

year to build it. So we knew this in advance. To think that this 

would be really temporary was not very good thinking on our part. 

We have to have situations—increase the rental supply. We can 

use other devices for this. For example, the GO Zone bonds could 

have been diverted in portion to provide for people to build temporary housing. Lastly, permanent housing. We think it is very important that we have a real permanent housing solution. That is, 

people should receive replacement housing funds rather than appraised housing funds at the time of a disaster. We think it is important to be able to use the disaster relief fund to build housing 

in our community for community residents who might use that as 

a transitional property. That legislation is already in place. We 

think a small rental program is absolutely necessary. 

We also feel that affordable housing pilot programs should be developed. We have developed housing opportunity zones where we 

could put these programs in, utilizing the assets that we have, 

from the sale of homes to our Louisiana Recovery Agency. Those 

affordable housing pilot programs would include for us the possibility of having mixed-income neighborhoods with AMIs up to 140 

percent. We do not believe that the AMIs should be willy nilly 

granted across-the-board, but we do think to have mixed-income 

neighborhoods, we have to have 30 to 40 percent of people who are 

above the median income, up to 140 percent. That has been New 

Orleans tradition, and we would like to maintain it. 

I would like to close by thanking Chairman Frank for his proposal that the GSE reform and profits be allocated to housing in 

41 

the Gulf. We think this is necessary, it would be good for citizens 

of all of the Nation, and we think this is an astute proposal. I want 

to thank you all for putting together this committee, and we think 

this is a watershed moment, that if we do this right, it can save 

us from future Katrinas. Thank you very much. 

[The prepared statement of Dr. Blakely can be found on page 54 

of the appendix.] 

Chairwoman WATERS. Thank you. 

Laura Tuggle. 

STATEMENT OF LAURA TUGGLE, MANAGING ATTORNEY, 

HOUSING UNIT, NEW ORLEANS LEGAL ASSISTANCE CORPORATION, SOUTHEAST LOUISIANA LEGAL SERVICES 

Ms. TUGGLE. Good morning. My name is Laura Tuggle, and I am 

a managing attorney of the housing law unit at New Orleans Legal 

Assistance. We are the local legal services office for the greater 

New Orleans area, and all of the parishes that we serve were severely impacted by Hurricane Katrina. We just want to thank you 

for having brought us here this morning, and for all of your past 

support and your ongoing support and your future support. 

Unfortunately, from what I see when I read the newspaper or if 

I go online on a blog, a lot of folks out there in this country, and 

some not too far from home, can’t quite understand why after almost 3 years we don’t have it together, and a lot of folks are tired 

of hearing about the difficulties that are still facing our families 

and are still facing the kind of clients that we serve at the legal 

aid office day in and day out. 

I think there is a conception out there that people should have 

pulled theirselves up by their own bootstraps at this point, but 

frankly I would tell those folks three things: One, we don’t have 

any boots; two, whenever we go this boot store to try to get the 

boots, they are way, way up on the high shelf and we can’t reach 

them; and three, whenever we try to get help from somebody to get 

in those boots so that we can have some straps to pull ourselves 

up by, we are told that nobody is going to be back to help us for 

maybe 3 years, if then. 

And what I mean by that is, Hurricane Katrina came and destroyed about 82,000 units of the affordable rental housing stock in 

the greater New Orleans area. Of that amount, about 52,000 were 

affordable to low-income families. Even with all the billions of dollars that are coming down in our community, and hopefully are 

making their way to the folks who need it, it is projected that only 

about 23,000 affordable rental units are going to be developed in 

our community. That is going to replace less than 25 percent of the 

stock. So this idea that things are going to be hunky dory with 

what we have is not going to cut it for the tremendous needs that 

folks have in our community. 

Additionally, even some of the Road Home rental programs that 

are being developed, even if they all come forward, which is highly 

doubtful given the credit crisis and tax credit deals not being able 

to close, a lot of those programs simply are not going to reach people at 30 percent of area median income and people at 50 percent 

of area median income. 

42 

I want to give you an example of Miss Madeline S, one of our 

clients. She works in a local hotel downtown. She makes about 

$1,750 a month. She is raising a household of five and she needs 

a three bedroom apartment. The going rate for the HUD three bedroom fair market rent right now is $1,271 in New Orleans. The 

going rate for the low-income housing tax credit rent in Orleans 

Parish is $933 a month. The going rate for the proposed lowest 

rung of the small rental repair program is $680 a month. 30 percent of Ms. Madeline’s income is only $525 a month. So you can 

see that she can’t make it. Hardworking folks like her, who, the 

numerous times you guys have come down to see us, maybe she 

made your bed or, I don’t even know if they give any mints, but 

maybe she put a mint on your pillow. 

It is very difficult out there for folks to make it, and I have grave 

concerns in particular about two areas that I don’t think have received much attention, and one of those is, what is going to happen 

with this DHAP program that we heard earlier witnesses talk 

about, when it ends next year and we don’t have affordable stock 

ready. 

And what is going to happen with the folks and the families who 

were residents of not public housing, but were residents of subsidized housing through the HUD multi-family stock. I don’t hear 

anybody talking about them, and I can tell you that as recently as 

last fall, the office of HUD multi-family advised me that there were 

5,861 units of the HUD multi-family stock that were still not open. 

That is separate and apart from the thousands of public housing 

units that are still not open. And frankly, we have had a very difficult time getting any information out of the HUD multi-family 

side, whereas I can honestly say that, to say a nice thing about 

somebody, the Office of Public and Indian Housing has been very 

receptive to working with our office and providing us information 

and taking some of our suggestions about what should happen. 

I want to go back just, I know I’m going over my time, but I want 

to mention something about the DHAP program briefly. My secretary, Pam B. is on that program. Our paralegal is still in a 

FEMA trailer. So we are talking about not just your elderly, your 

disabled people who don’t have it together, we are talking about 

hardworking folks. Pam’s three bedroom apartment is about $1,398 

under DHAP, or is projected to be around that amount. 

Under the DHAP program, if you are a phase one person, there 

are different phases, phase one people have to do the $50 a month, 

then $100 and so on until next March gets here, and that program 

is going to cap out at $600, and the idea is that everybody is going 

to be self-sufficient at that point. Well, the problem is we have a 

rent differential of $798; 30 percent of Pam’s income is $700. Before the hurricane, she had a $550 apartment. She didn’t need any 

help from the government or anybody else. All she needed was her 

paycheck. And she asks me every day, ‘‘What is going to happen 

to me? What is going to happen to us?’’ 

And that is the question I would like to know, is what is going 

to happen to these families, thousands of them in our area alone, 

between 8,000 to 13,000, the numbers change every day, are going 

to be on DHAP, and what is going to become of them? That proVerDate Aug 31 2005 18:31 Oct 06, 2008 Jkt 044181 PO 00000 Frm 00048 Fmt 6633 Sfmt 6633 K:\DOCS\44181.TXT TERRIE
43 

gram is going to have to be extended in our area, at least until 

such time as more affordable rental units come online. 

Thank you for your time and for allowing me to go over. 

[The prepared statement of Ms. Tuggle can be found on page 260 

of the appendix.] 

Chairwoman WATERS. Thank you very much. I recognize myself 

for 5 minutes to ask questions. I really don’t have a lot of questions. 

Unfortunately, I know more about New Orleans and Mississippi 

and Hurricane Katrina than I have been able to digest, really, and 

I understand some of what we need to do here. I am particularly 

focused on the fact that we should never have allowed CDBG funds 

to have gone to the State without having stricter rules about what 

that money could and could not be used for. I am not happy in Mississippi with the diversion of funds to the port and some other 

issues dealing with the Road Home program. 

I am not happy in the City of New Orleans where the city council 

voted to go along with HUD to tear down all of the public housing 

units. What is absolutely amazing to me is that despite the fact 

that there are those who want to get rid of public housing because 

they feel that it should be upgraded or it is too much of a concentration of poor people, to have it boarded-up for 3 years while 

you have homelessness that grows, and to have it boarded-up when 

you don’t have places for people to live, rather than having 

rehabbed some of that, even if it was only done for a year or two, 

is just absolutely mind-boggling to me. 

So much of what we need to do here, we have to take the lessons 

that have been learned from these natural disasters and make public policy that will help to facilitate rehabilitation and restoration. 

And some of the other stuff at the local level just requires that cities and communities have plans and city councils who are responsible for land use get their act together too, so I guess when you 

look at this great catastrophe that we were faced with, I guess 

there is a lot of blame to go around and certainly, Federal agencies 

have been less than stellar. 

But let me thank all of you for coming here. Again, on our many 

visits to the Gulf Coast we have learned an awful lot, and we will 

be able to do some corrections here and hopefully at the local level, 

the same thing will happen, so let me just move to Ms. Capito for 

questions. 

Mrs. CAPITO. Thank you, Madam Chairwoman, and I want to 

thank the panel. I have a question, and please correct me if this 

is incorrect. 

I am from West Virginia and live in Charleston, and some of the 

public housing units that are older, have been around for a long 

time, the occupancy rate in some of these are probably around 70 

percent because 30 percent of the units are basically uninhabitable, 

or they can’t service the type of client, maybe somebody with a disability or a young family, it is not large enough. To me this is troubling. If we are going to have a unit that has 100 units, we need 

to be using all 100 units. 

And I guess my first question would be, my understanding is 

that pre-Katrina, this was the case in New Orleans, that a lot of 

44 

the public housing units were either: (a) uninhabitable; or (b) were 

not being used. Is that a correct assumption? 

Ms. TUGGLE. He can go first. 

Mr. BLAKELY. That is correct. Some of the units in some buildings were down to 50 percent and some were 60 and 70 percent. 

So there are various reasons for that. Some of them were not habitable. That just means you have to make them habitable. In other 

cases, there weren’t people who were qualified to go into them. 

What I was speaking to, in an emergency, a unit is a unit. 

Mrs. CAPITO. Excuse me, what? 

Mr. BLAKELY. A unit is a unit. 

Mrs. CAPITO. Right. 

Mr. BLAKELY. And that unit might be used by a worker, and so 

forth, so you have to use the stock in a different way than it might 

have been used previously. So we did have, and I don’t think that 

is the national situation, but we did have vacant units. 

Chairwoman WATERS. If the gentlelady— 

Mrs. CAPITO. Yes. 

Chairwoman WATERS. Yes, you did have units that were uninhabitable that had not been attended to by the housing authority. 

Mr. BLAKELY. Right. 

Chairwoman WATERS. They had not invested any capital in the 

upkeep and rehab, but they had a long waiting list in New Orleans. 

Mrs. CAPITO. Right, plenty of need. 

Chairwoman WATERS. Plenty of need. 

Mrs. CAPITO. Right, and I don’t dispute that. That is the troubling thing. I mean I think across the Nation we find this. And so 

now we are where we are right now and I think, lessons learned, 

we want to make sure that we have our units when we rebuild and 

new construction or rehabilitation are being used and are being inhabited and are being—performing the mission which goes forward. 

So that is just an issue that to me and I think the American taxpayer would say to themselves, we need to take better care of what 

we have to make sure that this situation doesn’t continue in the 

future. 

Mr. RAMIREZ. May I? 

Mrs. CAPITO. Yes sir. 

Mr. RAMIREZ. May I just bring up a more global perspective? 

Charleston actually is a satisfactory performer, and its occupancy 

runs in the 90s, at least to the best of my knowledge, which comes 

from representing over 26,000 to 27,000 housing agencies and professionals around the country, them being one them that we do 

represent. 

Another point of clarification is that the New Orleans housing 

authority has been run by HUD for over 12 years, and so it really 

should have been a shining example of how to do it right. 

And finally, the consistent underinvestment and capital funds 

under the covenant that was made with the Federal Government 

with housing authorities that has been breached for the better part 

of 8 to 9 years now and continues to decline further stretches the 

ability to maintain full occupancy in these units at a safe and decent standard. 

So I applaud your highlighting that issue and hopefully we can 

work with Congress to reverse that trend nationwide. 

45 

Mrs. CAPITO. Well, we certainly want to work with you on that. 

I am really not finger pointing that it is anybody’s fault so much 

as that some of it is just a function of the age of the units and the 

concept with which they were built. 

The other question I would like to ask you, Dr. Blakely, in New 

Orleans, what kind of leveraging have you been doing with your 

funds from private entities and volunteer organizations, maybe 

some faith-based organizations? If you could enlighten me on that. 

Mr. BLAKELY. I can’t give you all the numbers. I know that we 

will have about, let’s see, 24,000 units available—that’s not the 

right number. 2,400 units available, I’m sorry, at the end of the 

year. Most of this has been leveraged using low-income tax credits, 

utilizing faith-based organizations, gifts and charitable organizations and the like. So that has been leveraged. 

Our big problem has been securing the land, securing the people 

who do the development, and finding the right locations. We do 

want to make certain that we have the right locations so rehabilitation of existing facilities, or the demolition of a facility and putting another facility on-site has been the issue. And we were one 

of the few places in the Nation that had more renters than we had 

homeowners. 

Mrs. CAPITO. Thank you. I yield back my time. 

Chairwoman WATERS. Thank you very much. Next, we have the 

chairman of the Subcommittee on Emergency Communications, 

Preparedness, and Response, Mr. Cuellar. 

Chairman CUELLAR. Thank you, Madam Chairwoman. I want to 

thank the witnesses for being here this morning. 

Particularly, I have to emphasize a friend of mine. Mr. Ramirez 

was the former Mayor of my hometown in Laredo. He was also Assistant Secretary there at HUD, so we grew up—when I was a lifeguard, he used to give me a hard time when I was a lifeguard there 

at Lake Casablanca, but it is good seeing him. 

A point of personal privilege also. Today is our subcommittee director Craig Sharman’s last day, so he will be leaving and going 

off to another place to work, and we really appreciate the work that 

he has done. 

I don’t see Mr. Castillo and Mr. Riddel. I assume they left after 

the first panel. I was hoping they would have stayed here to listen 

to the four individuals that we have. Do we have anybody here 

from HUD or FEMA still around or did everybody leave? 

[No response] 

Chairman CUELLAR. Everybody left, okay. Why don’t I do this? 

Instead of asking the questions, I am going to ask each of you to 

pose a question to which you would want me to get the information 

on your behalf. This will give you an opportunity to, and you pick 

whomever you want to, Mr. Castillo or Mr. Riddel, and then I am 

going to pose that question to them. 

Chairwoman WATERS. That is fine. 

Chairman CUELLAR. Mr. Ramirez, what question would you like 

us to follow up on, and I would ask them to get the answers within 

10 working days. None of this 7 or 10 months, or whatever they 

usually work on, Mr. Chairman. Mr. Ramirez? 

Mr. RAMIREZ. Well, it is like asking me which child do I want to 

sacrifice. We have several questions that need to get posed. 

46 

Chairman CUELLAR. Give me one and then submit the other 

ones. 

Mr. RAMIREZ. I think the most important one is to bring clarity 

in the memorandum of understanding to help accelerate the reconstruction and rebuilding of a public asset that has been destroyed 

as the result of a disaster, and in particular, public housing, and 

their ability to tap into those resources under Section 406 to be 

able to accelerate the rehabilitation or the rebuilding of those properties because they are essential to serving our most vulnerable in 

these communities. 

Chairman CUELLAR. Okay, we will submit that. If you have anything else, please get ahold of us. Mr. Morse? 

Mr. MORSE. Well, I would ask that you ask each of those two 

agencies to submit a single unified yardstick so that we can have 

a complete, comprehensive understanding of how many people are 

in transitional housing. What is being seen down on the Mississippi 

coast is a heavy push to eliminate the very visible icon of the 

Katrina trailer and to shove people into a variety of different programs that are dispersed and which are thereafter impossible to 

quantify. 

So I would ask that you require them to put together a single 

consolidated count of people who are in some form of FEMA assistance or DHAP assistance or something else so that we have a total 

number. 

My suspicion is that number will stun you, that it is much, much 

higher than you imagine and that we have been lulled into a sense 

of relative calm about the gradually dropping number of FEMA 

trailers, when in reality what is going on is that as these folks are 

pushed into the DHAP market, that is going to end too, and our 

Gulf Coast region cannot absorb the demand for deeply affordable 

housing that those folks will place, and we are going to find another wave, another season of drastic homelessness facing us on 

the 4th hurricane season coming up in 2009. So please get them 

to come together and provide you with a single unified yardstick. 

Chairman CUELLAR. Thank you. Dr. Blakely? 

Mr. BLAKELY. I would like you to ask the agencies who is going 

to provide the free health care for people who have been in trailers 

so they can determine their health status, and if their health status need warrants continuing care, how is that going to be provided? 

Chairman CUELLAR. Thank you, doctor. Ms. Tuggle? 

Ms. TUGGLE. I have a lot of questions I would like to ask, so instead I will ask one with a lot of subparts. 

I would like to know from the Office of Multi-Family, that side 

of HUD, what is the status of each and every closed HUD-assisted 

property, I think there are currently about 30, and they represent 

about 4,000 units. A lot of them have submitted Section 8 contracts 

that are just kind of sitting around somewhere, waiting to see what 

is going to happen with that property. 

And I would also like to know what happened to our people who 

used to live in those properties because I have looked at the numbers of families who are in the disaster voucher program that are 

from the HUD-assisted stock and it is only 1,147 families. Well if 

we had 5,800 units out of commission, where are those people? 

47 

That is a lot of people. So if you can get them to tell you that, I 

would be amazed. 

Chairman CUELLAR. Alright. Well first of all, I want to thank all 

of you. Those are excellent questions. Again, please work with the 

committee staff and I will again ask if they could get that to us 

within 10 working days from today. Thank you very much. Thank 

you, Madam Chairwoman. 

Chairwoman WATERS. Thank you very much. Chairman Frank. 

Chairman FRANK. Let me say, first, and I appreciate having 

former Deputy Secretary Ramirez’s validation of the argument, I 

don’t believe there is a legal argument for withholding those funds, 

but we are in a position where we can stop bad things from happening. It is harder to force good things happening. 

But as near as I can make sense out of the testimony today, the 

argument from FEMA is that somehow generalized appropriations 

language keeps them from doing this. I will, and I have spoken to 

Chairman Thompson, Chairwoman Waters, and others, what I 

think we will do is to send a memorandum to Chairman Obey of 

the Appropriations Committee asking him to include in the next 

appropriations vehicle the simple statement that nothing in existing law prevents FEMA from dispensing those funds. It won’t be 

an appropriation, and it won’t even be a mandate, but it will take 

away their excuse. I don’t think they’ll be happy to lose their excuse but I don’t think they will be able to avoid doing that. So I 

think that would be the appropriate action and we plan to take it. 

Let me ask, and I apologize now, here in the testimony, and I 

have read it, and this HUD/FEMA thing was the ideal, the classic 

example. And by the way, the reason for having it done by FEMA 

instead of HUD and I sympathize with the HUD representative 

when he talked about this, it is hard enough getting appropriations 

for public housing in HUD. If you need it to be done outside of the 

regular HUD appropriation, that means every time there is a disaster, public housing which is traditionally underfunded in the capital area, will be even more grievously underfunded, and emergency funding ought to be emergency funding, so we will I think 

hope to clarify that in permanent language, that there is no bar to 

doing that. 

But on the broader question, what should we do to change the 

allocation of responsibility between HUD and FEMA? Clearly there 

is a problem with the best will in the world because of this complication. There is no reason that I can think of why an emergency 

management agency should be in charge of housing nearly 3 years 

after the phase. One of my colleagues said and I understood that, 

we asked a question about long-term emergency housing. Well, we 

are in a situation where we have to deal with long-term emergency 

housing, but that is kind of an oxymoron. I mean, if it is long term, 

it is not emergency. 

I would urge you to join us. And I think you have seen a good 

example here of cooperation. I wish we could get HUD and FEMA 

to cooperate as well as our two committees have cooperated, the 

two subcommittee chairs sitting next to each other, and working 

closely together, Chairman Thompson and myself. 

What should we do statutorily to sort out the housing responsibility of FEMA and HUD? My first response is, maybe it should be 

48 

FEMA’s responsibility up to ‘‘X’’ days, and then it becomes HUD’s 

responsibility. Clearly the shared responsibility isn’t working, but 

I think this will, and I have talked to Chairman Thompson, I 

would hope that before the end of this session, maybe we can’t 

make it all the way, but we could take steps so that we have a policy in place so that going forward, we will have FEMA’s responsibility in the emergency phase, HUD’s responsibility going forward, 

with appropriate allocation of budgetary responsibility. 

So if anybody has any initial response, I would be glad to hear 

it, and then you will follow up. Yes, doctor. 

Mr. BLAKELY. I think the—in my testimony, I talked about shelter, emergency shelter. That should be FEMA’s responsibility. Temporary housing and permanent housing should be HUD’s responsibility. There are big, good reasons for that. One is that HUD knows 

housing, and FEMA knows how to move people and evacuate people. Housing people on a temporary basis, or on a permanent basis 

is very different. HUD has the toolkit. For example, HUD could 

help us use our underutilized sites so that we could put panelized 

housing on it. That is not FEMA’s job or responsibility. So I think 

it should stop with the temporary shelter. Shelter should be short 

term, under 1 year. 

Chairman FRANK. That is a good term. I appreciate that; it is a 

good distinction. The only thing I would add to that is our responsibility; we do want to make sure that the financing doesn’t go entirely to HUD. That is, to the extent that there are emergency financial funds, they shouldn’t compete with regular funds. But that 

distinction you make between shelter and housing is a very good 

one, and I think we will be able to operate on that. Thank you very 

much, Madam Chairwoman. 

Chairwoman WATERS. Thank you very much. Mr. Cleaver. 

Mr. CLEAVER. Thank you, Madam Chairwoman. Thank you for 

coming here today Mr. Ramirez. I had the pleasure of working with 

Mr. Ramirez when I was mayor, and it was refreshing to hear your 

comments. 

Dr. Blakely, you might be able to help me. I don’t know the current mayor of New Orleans as well. Mark Morreal and I were mayors at the same time and I got to know him. If there is some kind 

of confusion between your department and city development, who 

is the arbitrator? 

Mr. BLAKELY. City development, what do you— 

Mr. CLEAVER. Or any department. Any department. 

Mr. BLAKELY. Well, I am in charge of all recovery, which includes 

permitting everything under me, except the ordinary day-to-day operations of the City. I have the responsibility of all those aspects 

of the City, so if there is a conflict in my department— 

Mr. CLEAVER. Then who settles it? 

Mr. BLAKELY. Me. 

Mr. CLEAVER. And that is what I would expect, and that is what 

I don’t understand. We have this ongoing conflict between FEMA 

and HUD and I asked a question as you may recall, who does the 

refereeing, who is the decider, and as a consequence, it is continuing, and it is very, very frustrating. 

Mr. BLAKELY. Well, sir, clearly the mayor, if there is a conflict 

between my agency and the CAO, the operating agency, the mayor 

49 

is the referee. We meet every Tuesday and sometimes these are not 

charming meetings. 

Mr. CLEAVER. Yes, I can imagine. You know, I was a little embarrassed as we were, the United States is sending rough messages 

to Myanmar because they won’t let us come in to help and I 

thought for a while, they are smart. 

Madam Chairwoman, thank you very much for calling this hearing, and Mr. Cuellar, thank you. 

Chairwoman WATERS. You are very welcome. Thank you. Mr. 

Green. 

Mr. GREEN. Thank you, Madam Chairwoman, and while we are 

thanking people, let me thank the staff for the outstanding work 

that they do in assisting us. Much of the information that I recounted earlier with reference to numbers, dollars, and statistics 

came from staff persons who were readily available and helpful. 

I would like to talk for just a moment about the $600 million for 

the port authority. We have had witnesses who came before us and 

we have talked about this $600 million and the indication that we 

have received is that this is necessary and that it will help low-income persons in some way. I think the allegation is that if you put 

people to work, you help everybody. But this was supposed to be 

for housing as I understand it, so let me ask someone to respond. 

I believe one person had addressed this directly. That was Mr. 

Morse? 

Mr. MORSE. That is correct. 

Mr. GREEN. Okay. Would you kindly address the $600 million, 

please? 

Mr. MORSE. Well the low- and moderate-income benefit is nebulous at best with this diversion of $600 million. Representative 

Green, the forecast is that over 10 years, some few thousand jobs 

would be created and that those would be offered first to persons 

of low and moderate income. 

That is the sum and substance of the rationale for doing it, and 

I want to suggest to you that it is patently inadequate and that 

this body ought to step in and challenge it, and that the mechanism by which that can be done is that the appropriation from 

which this $600 million has been plucked out was the December 

2005 appropriation, and the use of those funds was subject to waivers, and this one was awarded a waiver, and those waivers are required to be reviewed, reexamined to determine their validity 2 

years from the anniversary of the publication of the waiver. 

In this instance, that is less than 2 weeks away. And that is to 

be examined not only by HUD, if I recall correctly the statute, Representative Green, but by you, and I strongly urge this body to do 

so. Because it is just fundamentally unsound, and it is fundamentally unjustifiable. 

And the most basic part about that waiver is that it said we are 

going to grant this waiver provided that in the future, and this 

would be June 2006, future uses of Mississippi CDBG money would 

place reasonable priority on persons of low and moderate income, 

particularly housing needs, and I suggest to you today 34 months 

after this hurricane, when we are putting people into hotels, we 

haven’t gotten the job done. 

50 

If you look in my testimony, Representative Green, there is an 

extensive examination of all of the available statistics, and it 

doesn’t matter which set you use, the State of Mississippi has not 

met its obligations to provide affordable housing, particularly rental housing. So I welcome your care, thorough, and strong scrutiny 

of this issue. 

Mr. GREEN. Thank you. One additional follow up. The witness 

that we had indicated that he was not sure as to the status of the 

port in terms of its economic standing, its ability to do this with 

its own funds. You mentioned earlier that the port seems to be 

doing quite well and has the funds necessary to make these modifications without the $600 million. 

Mr. MORSE. Well, Representative Green, there is an exhibit to 

my testimony, Exhibit Q, and that is a paper prepared by the Mississippi Center for Justice about the status, the economic status of 

the State Port of Gulfport and it has a detailed look at this issue. 

This port, since the hurricane, has come back to approximately 

60 to 75 percent of its pre-Katrina levels in terms of overall 

throughput. It has damage that has to get repaired, but what we 

are talking about with the $600 million has relatively little, if anything, to do with restoring the status quo in this hurricane. Because there is insurance, there is FEMA money, there is other 

bonding capability, it is operating in the black, and there is another exhibit which I believe you asked Mr. Norris about at the 

preceding hearing in May 2008. 

You asked for a copy or an audit showing what is that status of 

the economic status of this port, and if you look at Exhibit P to my 

testimony today, you will find the budget request for the fiscal year 

ending June 30, 2009, that shows it is operating in the black and 

that it has $82 million in unencumbered cash. 

Now the last thing to say about it is that the use of this money 

is to not restore it, it is to do a vast and very controversial expansion. So this is not about restoring my hometown’s State port, the 

town I grew up in and my father grew up in. I want to see that 

port restored. But you don’t need the $600 million to do it. 

Mr. BLAKELY. May I make a comment here? And this is not 

about ports. It is about CDBG funds and disasters. 

Chairwoman WATERS. Yes, you may. 

Mr. BLAKELY. I think we are trying to fit the wrong animal in 

the wrong place. Perhaps we should have disaster funds with clearer specifications of what they should be used for, and the HUD officials who are giving these waivers may not be prepared to understand a disaster versus a housing program. 

And sometimes, you know, you are subject to—okay, I will go 

along with this because this is not your field of expertise. Had this 

been money coming from the EDA for the restoration of an economy, that is a different thing. 

But I think we should have a disaster fund that is clearly aimed 

at disasters, and a disaster plan should be prepared for our community, that should indicate what they are going to do for that disaster, much as we did in New Orleans, how much is going to economic development, how much is going to housing, and the locals 

should be held accountable for implementing it. 

Chairwoman WATERS. Thank you. Mr. Green? 

51 

Mr. GREEN. Thank you, Madam Chairwoman, I yield back. 

Chairwoman WATERS. Well you are certainly welcome. I would 

like to thank all of our witnesses who have participated today. I 

want to thank Chairman Frank, Chairman Thompson, Subcommittee Chair Cuellar, Ranking Members Dent and Capito, and 

all of the members and staff for their participation here today. 

I believe that the Chair knows that some members may have additional questions for this panel which they may wish to submit in 

writing, and without objection, the hearing record will remain open 

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

Thank you panel, you are now dismissed, and we certainly appreciate your presence here today. The subcommittees are adjourned. 

[Whereupon, at 1:03 p.m., the joint subcommittee hearing was 

adjourned.] 

(53) 

A P P E N D I X 

June 4, 2008 

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