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U.S. House of Representatives,
Subcommittee on Housing and Community Opportunity,
Committee on Banking and Financial Services,
Washington, DC.

    The subcommittee met, pursuant to notice at 2:53 p.m., in room 2128, Rayburn Office Building, Hon. Rick Lazio, [chairman of the subcommittee], presiding.

    Present: Chairman Lazio; Representatives Ney, Barr, Sweeney, Terry, Vento, Frank, Velazquez, Lee, Goode, Schakowsky, Jones, and Capuano.

    Chairman LAZIO. The hearing shall come to order.

    I want to extend greetings to everybody who is here and appreciation for attendance to the Homeless Housing Programs Consolidation and Flexibility Act hearing.

    I am, for the sake of time—and I want to apologize to everybody because of this series of votes—I am simply going to insert my opening statement in the record, with a unanimous consent request. Hearing no objection, that is so ordered.

    With the caveat of thanks to the Ranking Member, Mr. Frank, for his agreement to cosponsor this bill, to act in a bipartisan fashion to bring some belief and vision to the Federal Government's role and partnership in dealing with the issue of homelessness—with that being said, I will be happy to turn to Mr. Frank.
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    Mr. FRANK. Thank you, Mr. Chairman. I will be very brief here. I will leave the specifics of this bill to the questions. Because I want to make clear the specifics of this bill are of secondary importance and I do not want us to lose sight of what is of primary importance, and that is the overall budget. We are going to do our best to try and juggle inadequate resources to deal with this problem. And given that there are inadequate resources, we have to do the best we can with them. But I hope all of us will remember that the fundamental problem we face is that this very rich Nation is not spending its overall wealth wisely and with compassion.

    I particularly want to say to my friends over here, all of whom I admire for their dedication to the cause of homelessness, as you make the case for the best possible use of the resources, which it is your responsibility to make, let us also remember our obligation to increase the total amount that is available. Because I know the last thing any of the people here want, and the people up here, is to get to this situation where we have to figure out how to most painlessly rob Peter to pay Paul, and how we take from one program and not from another.

    I say that because some questions have come up here about overall resources. We will deal with those later on. We are here talking about the best way to do things, but I would hope everybody would understand.

    I will just say Mr. Chairman, I do not expect this to get unanimous consent, but it seems to be very clear—the best thing we can do, if we are looking at the ability that we have to deal with homelessness over the next ten years, is not to engage in major tax cuts, so that we do not deprive ourselves of the resources that would be needed. And we should remember that we are doing the best we can within constraints, but it is also our obligation to try to break out of those constraints in a reasonable way. Thank you.
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    Chairman LAZIO. I thank you, Mr. Frank.

    Anybody else wishing to make an opening statement? If not, we can go right to the witnesses.

    I want to again thank the witnesses for their prepared testimony. All the prepared testimony will be included in the record through this unanimous consent request. Without objection, that is going to be so ordered

    I want to begin with introductions. I am going to move from left to right, yours not mine.

    Tim Cantwell is President of Cantwell-Anderson, Inc. It is a real estate development company. Many Cantwell-Anderson projects have been for sale and rental housing targeted to low-income households. Mr. Cantwell is the President of Westside Residence Hall, Inc., which is dedicated solely to the purpose of delivering 500 beds of affordable transitional housing to homeless veterans, and I know this is an area that Mr. Metcalf, in particular, has been focused on. He serves as the President of the Board of Directors of the National Coalition for Homeless Veterans that assists homeless veterans, service providers, and legislative advocacy, public education and management, and I welcome you here.

    I am going to do all of the introductions now, if I can.

    Philip Mangano, I want to welcome you. It is good to see you. He is the President of the Massachusetts Housing and Shelter Alliance. The Alliance is a statewide coalition of 70 agencies which serve homeless people through permanent housing transitional programs, emergency shelter, outreach economic development, and health programs. Mr. Mangano has been named a ''local hero'' by the Cambridge Chronicle, and a ''hero of the week'' by the Boston Phoenix.
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    Mr. FRANK. Anybody not in Capuano's district who has written about him?

    Chairman LAZIO. It is an honor to have you here.

    Julie Sandorf, I want to thank you for your work and help with this subcommittee, and particularly with this Member. She is the Founder and President of the Corporation for Supportive Housing in New York City. Established in 1991, CSH is a national intermediary organization dedicated to the expansion of supportive housing and employment opportunities for people facing the complex challenges of poverty, chronic health problems, unstable housing, and multiple barriers to employment.

    Currently, Ms. Sandorf is on the Board of Directors of the National Mental Health Association and the Project for Psychiatric Outreach to the Homeless, as well as a member of the Advisory Board of the Center for Urban and Metropolitan Policy at the Brookings Institution, and the Editorial Board of Housing Policy Debate, among others. You are really a legend, I see. Previously she served as Director for the Supportive Housing Alternatives Project, the Program Officer for the Pugh Charitable Trust, and Director of the New York Program for the Local Initiatives and Support Corporation, which we know as LISC.

    Maria Foscarinis—good to see you again—is the Founder and Executive Director of the National Law Center on Homelessness and Poverty, a not-for-profit organization dedicated to legal advocacy for solutions to homelessness. Ms. Foscarinis has represented homeless persons at the national level since 1985. She is the primary architect of Federal homeless legislation, including the Steward B. McKinney Homeless Assistance Act, the first major legislation addressing homelessness and has litigated to secure legal rights, such as the right of homeless children to receive an education. Wonderful to have you here.
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    Steven Berg is the Director of Programs at the National Alliance to End Homelessness. The Alliance is America's largest nonprofit, nonpartisan membership organization working on behalf of people who live in poverty and homelessness. Mr. Berg assisted with production and implementation of the policy agenda on homelessness and social services issues. Mr. Berg was previously the senior policy analyst on budget and policy priorities, working with State-level advocates on the implementation of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996. He is also a staff attorney for Connecticut Legal Services, where he designed and implemented a homeless advocacy unit in Bridgeport. I welcome you here as well.

    Well, I want to thank each of the panelists for the work they have already dedicated to their written testimony and look forward to hearing from you and your oral testimony. If you wish to summarize, because your testimony is already inserted in the record, feel free to do that. I am going to turn first to Mr. Cantwell and recognize him.


    Mr. CANTWELL. As Members of this subcommittee are likely to be well aware, 275,000 men and women who served our country during the formative years of their life are going to sleep on the streets tonight. L.A. Vets is a joint venture between Los Angeles Veterans Initiative, which is a Section 501(c)(3) nonprofit, and Westside Residence Hall, Inc., which is a for-profit, single purpose development company.

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    L.A. Vets' first project, the Westside Residence Hall, has delivered more than 425,000 nights of stay since opening in 1993. We produce 25,000 meals per month, and outreached last year to more than 10,000 homeless in the greater L.A. County area, 5,000 of which were veterans.

    The mission of L.A. Vets is the successful reintegration of the greatest number of homeless veterans to their highest level of independence as rapidly as possible. It is our contention that a substantial number of homeless veterans that are out in the community across the United States, and certainly in L.A. County, which, by the way, nearly 10 percent of the homeless veterans in the country are in Los Angeles county, totaling nearly 24,000. A bulk of those vets, if a pathway can be shown for recognizing and realizing themselves as a human resource, can become customers. And as a customer, they can pay rent.

    The facility at Westside Residence Hall, which is owned and operated by the for-profit development company, is a substantially debt-financed transaction and utilizes funding typically associated with affordable housing. There is no HUD money in the capitalized costs of the improvements. The operations are entirely serviced from the rents paid by the residents and service providers and other commercial tenants occupying facility space.

    We believe that the predominance of our support services efforts needs to be directed to relapse prevention—focusing on the psychosocial issues that likely predated their loss of job, likely predated their becoming homeless, and, very often, the family of origin issues that predated their military service and ultimately contribute to their finding their way into a life on the street. The activities around Westside Residence Hall are entirely devoted at impacting on their lives in a way to help them resolve their issues of substance abuse, employment, education, life skills, legal entanglements, child support obligations and credit against a backdrop of social physchological counseling.
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    Annually, we have referrals from approximately 45 different agencies in Los Angeles County. We currently house nearly 400 vets in the facility. The bulk of the activities are focused on vets for whom competitive work is a realistic expectation. That expectation is placed upon them to work. If they are unemployed, but meet the sobriety bench—that sobriety bench being 90 days or 60 days on referral from certain residential treatment programs—then they come into a jobs program whose outcome expectation is a job.

    We had 750 veterans move through that since July of 1997. Eighty-seven percent of the veterans have been placed in work within a median of 32 days of entry. Sixty-seven percent of them have been transitioned into supportive housing or independent living on their own. This activity is accomplished by splitting the responsibilities between the housing development, which rests with the for-profit development company, who attempts to maximize the rate of return on the real estate within the confines of delivering that real estate to a specific subset of homeless veterans. Though it is not necessarily the highest rate of return possible for the real estate, that is the design and the intent.

    The nonprofit Los Angeles Veterans' Initiative focuses on the support services delivery system. The Department of Veterans' Affairs places front-line clinicians in the facility. There are eight FTE's on campus at Westside. You will hear from other testifiers today, and we concur that there is an immediate and quantifiable reduction in inpatient days of care. Of the first 394 veterans that went through us at Residence Hall, they engaged the inpatient care system of the West L.A. VA Medical Center a lot—29,000 inpatient stay days. In the year after they left Westside Residence Hall, the same 394 engaged the inpatient care system less than 5,000 patient days. Thus a 25,000-day reduction of inpatient stay days, and that holds true for those with psychiatric diagnosis including schizophrenia, bipolar illness, major depression and post traumatic stress disorder—PTSD.
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    Therefore, however you measure the cost per day of that care, 25,000 times a low number of $150 a day for domiciliary care and a high number of med-surgery beds, which would be more like $1,500 a day, results in millions and millions and millions of dollars from reduction in inpatient stay days costs. And this over the course of one year.

    My time is up. I would like to leave you with this thought: Our model is different, in that it really engages the private sector and the entrepreneurial risk associated with for-profit developers, and that is substantially different. We do target vets for whom competitive work is a realistic expectation. Now it is true that we have 25 percent for whom it is not, and for those a different treatment model is necessary. Long-term subsidized housing is more likely in their future.

    We specifically have not used any HUD funds in capitalized costs, and that was by choice. The choice for that was around not wanting to invoke the governance associated with receiving HUD funds into a housing development. The HUD funds have all been directed into support services.

    The symmetry of the principles put forth in this legislation is obvious and laudable, at one level, it makes sense to have HUD attach to housing and other agencies like Health and Human Services attach to support services. In the matrix as it is set out now, we have found that the highest yield, getting the most bang for taxpayers' buck, has been by separating these activities and using conventional affordable housing instruments to provide this housing.

    For better or for worse, most jurisdictions have adjusted to the continuum of care system of funds distribution. As you move forward in what you are doing, we are anxious about where, and by what methodology the availability of support services dollars will be accessed. The wonderful outcomes achieved from operations who mix housing with supportive services cannot be achieved without learning centers on campus, without educational literacy and math improvements, without job training programs, and without case management services. It cannot be done. All of these activities are best placed in a housing environment where the population resides.
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    We use a zero tolerance drug and alcohol policy. Ninety-five percent of our population is substance abusing, and they retain and maintain abstinence to substance abuse while in the facility at better than 90 percent. We know that that works.

    The vast majority of veterans on the street are suffering from substance abuse. HUD's housing policies often don't allow a removal of someone who is using drugs and alcohol or in other matters of non-compliance. We do not remove relapsers to punish them, but to protect those who are trying to stay sober. It is a life-or-death matter.

    We appreciate this opportunity to provide testimony.

    Chairman LAZIO. Thank you very much.

    The Chair recognizes Phil Mangano.


    Mr. MANGANO. I want to thank you, Mr. Chairman, and your colleagues on this subcommittee, and your dedicated staffs, for once again bringing us together to respond to homelessness.

    In the Ranking Member, Mr. Frank, and in one of your new Members, Mr. Capuano, you have two people from my home State who have dedicated their years of public service to tirelessly responding to the needs of the poorest and most vulnerable. Their contribution, added to your own and other Members of this subcommittee, give us in this room today—hope.
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    But out in the cities, suburbs, and rural areas of our country, we are tired of homelessness. Make no mistake about it, providers, policymakers, politicians, the public, we are all tired of it. We signed on to end homelessness, to do away with it, to abolish it. We did not enlist to build more effective programs or to meet funding deadlines, or to attend neighborhood siting meetings or to watch homeless numbers grow, even as our programs were praised.

    No, we came with a purpose, a mission. We enlisted to bring an end to homelessness. Most tired of homelessness are homeless people themselves. They are sick and tired of it, and like all of us here, want it to end now. And their frustration is shared by those who serve them.

    Our successes in ending homelessness for tens of thousands are obscured—obscured by the current irony we face. Seemingly we make progress, but fall further behind. Homeless programs across the country are characterized by overflow at the front door and gridlock at the back door—gridlock created by a lack of residential options and permanent housing; gridlock fostered by a housing rental market that has moved beyond reach in a booming economy and jobs that do not pay a living wage; overflow created by a lack of attention to prevention, and systems whose inadequate discharge planning hemorrhages people into the streets and the shelters; overflow that adds pressure to the gridlock at the back door.

    Our work together in any legislation is to throw open that back door, to break the gridlock that has stymied the movement that ends homelessness, and to prevent more from falling in through the front door.

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    Thankfully, H.R. 2073 aims to do just that. In emphasizing and guaranteeing permanent housing, in providing stable funding for planning, in relying on nonprofits, in requiring performance outcomes, in encouraging employment options, in acknowledging prevention's importance, and in authorizing data collection, H.R. 1073 moves forward beyond good intentions and confined responses to substantive strategies to reduce homelessness at the front and back doors.

    You and your colleagues, and your respective staffs, are to be commended for moving beyond skepticism and doubt to propose a rethinking of solutions to homelessness.

    McKinney funding does make a difference. We have learned that these targeted antidotes do end homelessness—housing, jobs, and support services. McKinney funding creates movement. HUD's continuum of care provides a strategy of intervention. Ad hoc emergency responses have given way to strategic oriented plans. HUD has driven the process.

    Does all this mean that there aren't obstacles, Government restrictions, policy blindspots that impede our efforts? There are. That is why your bill is so important. Your emphasis on targeting housing, employment, and prevention moves policy forward.

    My written testimony includes a litany of affirmations of the bill. I just want to make a few recommendations.

    One: ending homelessness depends on accessing housing. Access to housing depends on affordability. The block grant formula must account for that factor by adjusting funding upward in areas of high housing costs.
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    Two: the poorest and most vulnerable have first claim on public resources. Disabled homeless people should be prioritized for housing resources. Otherwise, we sentence the most in need to chronic homelessness.

    Three: once disabled homeless people attain their housing, their rental assistance should be converted to mainstream housing programs. Otherwise, we risk institutionalizing a parallel system.

    Four: renewals of high-performance McKinney programs that end homelessness should be guaranteed. Stability of funding, which is implicit in the block grant process, should ensure stability in homeless lives and programs. Destabilization or dismantling are counterproductive. Funding needed to guarantee renewals should come from one of the following three: targeted service dollars from HHS, DOL, or ED to relieve pressure on HUD resources; shifted Shelter Plus Care renewals to Section 8 allocation, freeing up McKinney funds, or increased appropriation levels to ensure renewals of programs that end homelessness.

    Five: performance measures should emphasize ending homelessness as the appropriate objective of this funding.

    And, six: to prevent homelessness, require entitlement entities who receive future block grants to adopt zero tolerance policies for discharge to homelessness. Mainstream programs should not contribute to homelessness. Agencies should be accountable to a no-discharge-to-homelessness policy.

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    Finally, what is our mission, our goal, in H.R. 1073? Some say homelessness is now an intractable part of our social landscape; it is too late, and our efforts are too little. Well, Mohammed Yunis lives in Bangladesh. He saw intractable poverty there, the world's poorest. While others passed by, decrying the intractability of poverty, he began making loans. They called him foolish and naive. He now directs the Grameen Bank, which has made 2.5 million loans to the poorest people in the world. Many have moved beyond poverty. They contribute and they live in dignity.

    In his biography, ''The Price of a Dream,'' he says, ''My goal is for my grandchildren to go to a museum to see what poverty once was.'' We have a sacred responsibility to work together—Congress, HUD, advocates, providers, homeless people themselves—to realize our own goal: to keep the promise of America for all. Our work is that our children will one day go to a museum to see what homelessness once was.

    Your work on this subcommittee, and HUD's work over the past six years, has moved us forward to that dream. The creativity of H.R. 1073 moves us closer—closer to a future of fewer providers and more curators.

    Thank you.

    Chairman LAZIO. Thank you very much.

    Julie, you are recognized.

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    Ms. SANDORF. Good afternoon, Mr. Chairman and honorable Members of the subcommittee. I want to thank you for the opportunity to testify today and to commend you all for, once again, tackling this very important issue.

    Since the early 1980's, homelessness has become America's most visible and devastating symbol of desperate poverty and the breakdown of society's social contract in this, the world's wealthiest Nation. While the exact number of homeless persons in America at any given time is hard to calculate, in 1989, the Urban Institute put the number, conservatively, at 600,000. There is, sadly, no reason to believe that that number is significantly lower today.

    We now know a good deal about who the homeless are. The majority of homeless folks continue to be single adults, although the numbers of homeless families have increased recently. Significantly, studies estimate that better than 75 percent of homeless single adults and 20 percent of homeless families struggle with special needs, including mental illness, chemical dependency, and chronic physical health conditions. They cycle in and out of emergency rooms, psychiatric hospitals, shelters, acute care beds, and even jails—at a tremendous human and economic cost.

    The good news is that over the past decade or so community-based nonprofits, in partnership with churches, synagogues, philanthropy, and the private sector, have tackled this seemingly insurmountable challenge with tenacity and common sense. They have married stable permanent housing, a place to call home with a range of social, healthcare, and employment opportunities that have permanently and irreversibly ended homelessness for thousands of people who would be languishing in our country's streets, shelters, and institutions. In supportive housing we have found a win/win situation. It works, and it saves the taxpayer money.
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    Over the past eight years, we have learned a number of lessons. First, supportive housing and homelessness for the vast majority of tenants—in project after project across the country, 80 percent of even the hardest to house, disabled homeless tenants—stabilized, once they have entered supportive housing.

    Number two: supportive housing is cost-effective because it reduces tenant dependence on high cost, crisis-driven public systems. We are getting hard data which is demonstrating that supportive housing does save money within the public health, mental health, drug treatment, and criminal justice system. For example, in Minnesota, the Minnesota Supportive Housing Demonstration Program showed substantial savings derived from supportive housing.

    An independent evaluator examined the cost incurred by tenants in supportive housing within State and county detoxification, mental health, hospital, emergency shelter, criminal justice, and income support programs in the year before they entered supported housing and then during their first year of tenancy. This evaluation showed that, by living in supported housing, the average cost for these individuals reduced by over 36 percent. Yet, despite the lower cost of care, surveys of tenants revealed a much higher rate of satisfaction with their housing.

    We have seen that supported housing reduces numbers of people living in shelters. The widespread provision of supported housing in New York City, the city's emergency shelter system had dropped from a high of nearly 10,000 in 1989 to just over 6,000 in 1995, almost 50 percent reduction in the shelter system.

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    Number three: supported housing increases sobriety, reduces the use of costly inpatient substance abuse treatment. In what should be this country's real war on drugs, the day-after-day campaign to help the chemically dependent lead a meaningful, dignified life without reliance on drugs and alcohol, supported housing has proven to be a powerful aid to the poorest and most disenfranchised substance abusers.

    Again, in Hennepin County, Minnesota, we found a supported housing project sponsored by CSH for homeless chronically inebriated Native Americans drastically reduced the tenants' use of costly public detox facilities. The average number of detox episodes for tenants prior to entering supported housing was 18.4 per year per tenant, with an average total annual stay of 42 days. This was reduced to two episodes per tenant in their first year of residence, with an average total stay of 4.9 days—an annual net savings to Hennepin County of $250,000 in just one year.

    Supported housing has also been the springboard for successful employment. Over time, supported housing providers discovered that, once stabilized, even the most disabled of people want to go to work. We created a pilot program with the Rockefeller Foundation to test whether having civilian-supported housing would be the springboard to employment. The results have been extremely positive. Independent evaluators found that employment was increased by 38 percent in the first 15 months of the initiative. Moreover, a cost-effectiveness evaluation by Abt Associates showed that supported housing providers were able to deliver effective employment services for between $1,000 and $5,000 per tenant annually—a small price to pay to restore both productivity and dignity to someone's life—and that the employment services delivered had reduced tenants' dependence on public assistance and benefits.

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    The McKinney Homeless Act has played a critical role in these success stories. Rental subsidies under the McKinney Act programs have been the engine that drives the development of high quality, permanent supported housing. Tenants' low incomes make it impossible to cover the operating cost from rental payments. Thus, the supported housing provider needs ongoing operating subsidies in terms of long-term rental assistance to ensure that the project remains financially viable.

    Rental assistance also plays a critical role in leveraging and philanthropic sector support. For example, low-income tax credits can provide upward of 50 percent of the capitalization cost in supported housing. Low-income tax credit investors will not invest in this type of housing absent long-term subsidies.

    The investment of McKinney funds have also successfully leveraged over public, non-Federal sources. In HUD's Supportive Housing Demonstration Project, every Federal dollar attracted $4.50 in local services funding and $2.20 in housing development funds. According to HUD's 1994 report to Congress, every dollar of Shelter Plus Care Federal subsidies leveraged a pledge of $2 in non-Federal service funding, and Section 8 programs accounted for only 40 percent of the development funds, with the remainder raised by the community.

    Unfortunately, the McKinney programs directed at creating permanent housing for homeless and disabled people has seen significant shifts of funding away from housing development. Over the past three years, McKinney funding of long-term rent subsidies for permanent supported housing has dropped by 75 percent. In the three Fiscal Years between 1993 and 1995, rent subsidies under McKinney accounted for 40 percent of the total funding. By contrast, in the last three years, long-term rent subsidies have garnered only 14 percent.
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    The picture is equally grim when one includes McKinney funding of capital costs of permanent housing for homeless people.

    Chairman LAZIO. Could you sum it up, please?

    Ms. SANDORF. Sure. I am sorry.

    Chairman LAZIO. That is OK.

    Ms. SANDORF. Let me just go on and talk about the importance of H.R. 1073. H.R. 1073 makes crucial progress in restructuring McKinney programs, so that we can create a large level of permanent supported housing and end homelessness.

    We applaud your efforts to create the national pool for permanent housing and the 30 percent setaside. We believe that will create a steady and flexible funding stream for the production of supported housing.

    We applaud your inclusion of the role of nonprofits. They are the driving force and engine in the creation of permanent supported housing.

    And we applaud your match requirements. We strongly urge, however, that grantees be required to fulfill a substantial portion of the match requirement with resources tied to specific program or projects funded. This is the best way to leverage non-McKinney resources and get HUD back into the housing business for homelessness.
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    We applaud your effort and emphasis on performance and outcome measures. We believe that the McKinney programs' focus on effectiveness and homeless assistance grants will again and again prove this is a cost-effective strategy, and we submitted in writing to you some suggestions on how we can improve the performance measures.

    There is one outstanding need, however; there remains one critical issue in H.R. 1073, and that is the renewal funding under McKinney programs, particularly the Shelter Plus Care program. One simple action would make a huge difference in addressing the problem of homelessness in this country: funding the Shelter Plus Care renewals in the Section 8 allocation, rather than the current year McKinney appropriation. There are sound reasons for including this measure in H.R. 1073.

    First, once tenants have been housed under Shelter Plus Care, they are no longer homeless, but they do remain among the poorest people in our country. And so such a subsidy should be continued under the Section 8 program.

    Second, based on estimates we received from HUD, shifting Shelter Plus Care renewals would free significant funds over the life of H.R. 1073 for desperately needed new permanent supported housing developments. We understand the subcommittee has considered this measure, and strongly urge you to include it in the final version.

    I conclude with, again, thanking the Chairman and the subcommittee for giving me the opportunity to testify, and to let you know that we have the strategy; we have the know-how; we have the talent out in the community to do this job. We need the political will, and we need the means. Thank you very much.
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    Chairman LAZIO. Thank you very much.

    Maria, you are recognized, and welcome to the subcommittee again.


    Ms. FOSCARINIS. Thank you very much, Mr. Chairman. Good afternoon, and thank you, and thanks to the subcommittee for the opportunity to testify on behalf of the National Law Center on Homelessness and Poverty. Thanks, also, for your work on this important bill.

    I want to apologize for the delay in getting our testimony to the subcommittee. I have a good, and also relevant, excuse, though. Last week when the invitation——

    Mr. FRANK. Just don't add to the delay. Just get to the testimony.

    Ms. FOSCARINIS. I want to tell you; I'll make it short. Last week when the invitation came, I was in Geneva at a U.N. meeting on housing rights. It was an international meeting. People around the world were there.

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    And the point I wanted to make was it was interesting from my perspective to be representing one of the few countries probably that actually has the resources to really solve the problem. For many parts of the world, the issue is lack of resources. That is not the case in our country. It is always difficult for me in these international contexts to explain how a country as rich as ours could tolerate homelessness, and to tolerate it for such a long period of time.

    So I am glad to be here. I think this legislation can begin to make a difference. It can build on work that has been done before, and I really commend the subcommittee and urge you all to do more. We stand ready to assist you.

    The McKinney HUD programs are right now the most important, the single most important source of aid and national response to homelessness in America. I think even as we recognize their importance, we should always remember that, when the McKinney Act was enacted twelve years ago now, it was supposed to be a first step only; it was supposed to be a first emergency step, emergency response to homelessness, to be followed by preventive and long-term measures. That was recognized by all at the time and explicitly stated by Congress. It is a promise that remains as yet unfulfilled.

    Nonetheless, the National Law Center appreciates the subcommittee's hard and thoughtful work on this legislation. We believe it takes us a step closer to the ultimate goal of ending homelessness. We believe reauthorization is important.

    I will now present, just in summary form, our initial comments on the bill, and we will work with the subcommittee and the staff on more detailed recommendations, if you wish.
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    First, on the Interagency Council, the National Law Center strongly supports reauthorization of the council. However, we believe that the role of the council should be strengthened and expanded. Coordinating the Federal agencies' activities and programs is crucial. We also believe that the original role of the council to review the national response to homelessness and recommend improvements should be maintained. That is an important role for it to play, and this is a particularly important time for that role.

    As Julie has just said, we now know more than ever before about what works to end homelessness. It is critically important for there to be an independent Federal agency dedicated not simply to coordinating services and programs, but also to providing leadership and recommendations on additional policies to move us forward toward the goal of ending homelessness, to marshall the research that has been done, the information that we now have, and to really move us forward to that goal.

    Two, on the issue of permanent housing, the National Law Center supports this legislation's emphasis on permanent housing as a solution. However, we believe that the proposed authorization is too low to address the needs even of those who are currently homeless, let alone to prevent homelessness for those at risk. Along with the other major national groups, we believe $1.6 billion is the bare minimum needed.

    We also support the point just made by Julie Sandorf on the Section 8 renewals. That would be another way to increase the resources that are, in fact, available to address the housing needs of homeless persons.

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    On the block grant question, as we had said in our earlier testimony on the predecessor legislation, we have serious concerns about the block grant approach. We believe that this legislation addresses some of those concerns and is an improvement, and we are glad to see that. But we believe that additional safeguards need to be put into place, and we have three recommendations.

    On the criteria for choosing project sponsors, there is presently no criteria for determining whether local government versus nonprofits should get funding. At a minimum, there should be provisions spelling that out.

    Second, there should be a clear prioritization of the criteria.

    Third, there should be a requirement that the HUD Secretary set up a procedure for hearing complaints, and this requirement should be made more specifically. We recognize it is there. We think it is a good first step, but we think it could be made even better, and we have some suggestions for how to do that.

    We also believe that the subcommittee should consider strengthening the process for local nonprofits to challenge the consolidated plan and the planning process.

    Finally, I would like to mention two issues that are currently major trends across the country that could be addressed in this legislation. One is what we have called the criminalization of homelessness: cities, using their resources to penalize homeless people for being in public spaces, even when they have no alternative but to be there. We believe that this is the wrong approach, and we are concerned that cities not be permitted to use McKinney Federal funding, including McKinney funding, to carry out such policies. We recommend that the subcommittee consider language to address this and to ensure and to encourage, also, cities to adopt more constructive approaches which really could help solve the problem, instead of punishing its victims.
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    The second trend that we would like to see the subcommittee address is the increase in what is called ''NIMBY-ism,'' exclusionary policies that in many cases prevent projects funded by the McKinney Act from actually moving forward. Either they become more costly or they are delayed or they are stopped entirely. We have some recommendations for how the subcommittee can ensure that these funds are used as intended, and not thwarted by these trends.

    I know I have gone over my time. Thank you, again, for the opportunity to testify, and we would be glad to work with the subcommittee and the staff.

    Chairman LAZIO. Thank you very much, Maria.

    Mr. Berg, you are recognized.


    Mr. BERG. Thank you, Mr. Chairman and Members of the subcommittee. My name is Steve Berg. I am the Director of Programs at the National Alliance to End Homelessness.

    I know many Members of the subcommittee know Nan Roman, who is the Vice President for Policy and Programs at the Alliance. She very much regrets her inability to be here today. She is in the State of Missouri and won't be able to get back until night. She wants you to know that she stands ready, as the subcommittee works to finalize this bill, to address whatever matters require her personal attention.
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    My written testimony is in the record. I am not going to read the whole thing. I would just like to summarize a few points, in the interest of brevity.

    I think the most important thing is that the period of time covered by this proposed bill we believe is going to be crucial in the fight against homelessness. We are now at a point where there are tremendous opportunities to make great progress in this fight. There is a renewed, an ever-increasing level of know-how at the programmatic level for how to provide services that do the right thing. There is an expanding core of knowledge that has increased our understanding of homelessness in ways that we have never understood it before.

    I think that there is also an emerging consensus, due in no small part to the work of this subcommittee, that making progress on homelessness is an important priority, and it is important for Congress and the rest of the Federal Government to take a leadership role in that.

    Specific to this bill, there are three major points that we think this bill can do. There is a whole list of other points that are in the written testimony, but I just want to focus on these three today.

    The first is the importance of permanent housing. We have seen over the last few years efforts, the many disincentives in our system to developing permanent housing. It is hard to do. It takes a long time. It is often politically unpopular at the local level.

    The permanent housing fund in this bill, the dedication of certain money specifically for permanent housing, will go a long way to reverse those disincentives and to really put some money and some authority and some clout in the hands of the courageous and creative people who are doing this work at the local level.
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    If Congress decides to use formula funding for the rest of the piece, the nonpermanent housing part, we think it is important, also, to be sure that that part, too, focuses on permanent housing. It needs to have a clear—grantees need to have clear responsibility for outcomes, and the most important outcome is that people be placed in permanent housing, and then their situations be stabilized in the long term. So that outcome focus is an important point to make.

    The second major point is on targeting. Permanent housing for homeless people, in order to really make an impact, has to be targeted on those chronically homeless, chronically ill people who are highly vulnerable and highly unlikely to get permanent housing from anywhere outside the homeless assistance system.

    One of the most striking findings in the new wave of research that has come out on homelessness over the last couple of years is the existence of a relatively small group of chronically homeless people, relatively small compared to the two million Americans that spend some time homeless every year. This identified group is those with the most severe problems, the lowest income, the highest rates of severe mental illness, the highest rates of addiction, the highest rates of physical disability. They are the ones who are likely to be on the streets and in homeless shelters the longest, essentially living in facilities that are intended as emergency shelters. They are the most vulnerable. There are no other real housing programs that are providing effective choices for them. They draw resources from a whole range of other systems other than the homeless system, and they tie up resources in the homeless system.

    We could house these folks—and I should say, one of the most successful things about our fight against homelessness over the last few years is the kind of programs that Mr. Cantwell and Ms. Sandorf described, that can take people like this and give them tremendous success, give them opportunities of recovery that they are never going to have staying in a shelter night after night, month after month—not to mention that they are not going to have living on park benches and in abandoned buildings.
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    Right now, there is not enough support for this kind of housing for this population. We want to make sure that the permanent housing in this bill is closely targeted to that group, for their own good, for the sake of freeing up other resources in the homeless systems, and, finally, for the sake of reducing the cost to a whole range of other systems.

    The final point is on the importance of a key role for the Federal Government in fighting homelessness. The continuum of care, we think, has shown what an aggressive Federal approach to this problem can do. It has taken us great strides from when the McKinney Act started in terms of getting people organized at the local level, in terms of making sure the resources are used in an appropriate manner, in terms of drawing together the best knowledge from all over the country and putting that in the hands of local nonprofits.

    Where it has worked the best, it has created a partnership where local nonprofits and the Federal Government, as well as State and local governments, have full participation and have full power to shape the way the system works. We believe it is important, not only in the permanent housing fund, but in the formula grant section, to make sure that the Federal Government continues to be able to play that role.

    This homelessness is a problem that is new to a lot of people. The kind of institution of homelessness we often see now just didn't exist twenty years ago. We are all struggling to find answers.

    The Federal Government has been an important player in finding those answers, and it is important to make sure that it is able to continue to fulfill that role.
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    Just to close, I want to thank, once again, all the Members of this subcommittee for your attention over the last couple of years to this problem. We believe that an end to homelessness is within our reach, but we also believe that, if we don't make serious progress on it now, it is going to get farther away, as the problem gets more institutionalized and people become more complacent.

    So thank you all.

    Chairman LAZIO. Thank you very much. I want to thank the entire panel for excellent testimony.

    Let me say, I know Mr. Cantwell had asked the subcommittee earlier if we would show some consideration; he has to catch a flight out of here. If you feel there is extraordinary pressure to leave, feel comfortable excusing yourself. If there is anybody during my time who would like to pose a question to Mr. Cantwell before he leaves, I will be happy to yield to them for purposes of asking that question.

    But let me say, while there are differences, clearly, among your perspectives and some of the suggestions for improvements in the bills, and the things that you like in this bill, there is also a fairly remarkable commonality among you. I was very struck by your missions to relieve homelessness, not to make a better program or make it more efficient, but to actually end homelessness. I think it becomes very easy to lose sight of that goal as we move through policy nuances and turf battles, and things that we are trying to grapple with right now.

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    That number of 600,000 homeless persons in America, I don't think anybody is quite sure how accurate it is. The one thing that I think is important is that the number doesn't seem to have moved in many years. Does anybody here on the panel know when the 600,000 figure was first calculated?

    Ms. SANDORF. The Urban Institute in 1989.

    Chairman LAZIO. So 1989. So ten years later, and through an almost unrivaled period of prosperity, and I think it is real exceptional to note that that number has not budged. Maybe the aesthetic has changed. Maybe people don't seem quite as caring at times. Maybe the public needs to be more engaged. Maybe this body needs to be more engaged in the issue. As a matter of fact, I am quite sure that is the case.

    But what I understand is that, for almost all the providers on the cutting edge, the most creative, the most successful, the most effective, all of you seem like you are saying there is a need for resources for more permanent housing. All believe strongly in on-site, wherever possible, supportive services linked with housing. All of you are saying that the homeless community—that may be an awkward word, but the homeless community is very diverse—there are many different reasons why people are homeless. Some people struggle with alcoholism or substance abuse addiction; some people with the challenges of mental illness. Some people simply run out of steam in paying maybe their other healthcare bills or they have lost their income and they have a family, and they end up on the streets.

    It seems for many years possibly this body, probably the public, and maybe even in the case of some providers, have sort of treated homeless folks as if they were all one population, instead of a population that has very different needs. To achieve some level of independence of housing, they need to be treated in different ways.
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    So we are trying to shift resources, and we angst about this because I think, in an ideal world, we would find additional resources to do many of the things, to do more demonstration programs, to increase our commitment to supportive services, to ensure that we have more permanent housing, to increase the low-income housing tax credit, to be able to partner more effectively. But we don't have that luxury now, if we are really operating in reality. We will push to do more, as we have in the past.

    I am actually proud of the fact that this subcommittee, even though we were not successful in having a bill moved in the Senate, authorized more in this bill which was, I would like to think, a motivation to increase overall funding through the appropriations process.

    But we have got to show—and I feel strongly about this—that what we do, when we ask for more funding, is that we move toward measures of success; that we are not just asking for more funding to create a bigger bureaucracy or a larger empire, but we are actually supporting what we know works, and if we have the money, we can reduce that 600,000 number. We can establish it; we can show it; we can feel it.

    So my question to this panel is: do you agree that—and I want you to be frank about this, and I know you will be—as we begin to shift resources from shelters to permanent housing, are we doing the right thing? As we make some decisions about the need to try to pull HHS and other agencies that have resources in for the supportive services, so that we can focus HUD more on bricks and mortar, are we doing the right thing?

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    I know, Mr. Cantwell, you were testifying to the fact that you use the HUD resources not for bricks and mortar, but for services.

    Mr. CANTWELL. That is correct.

    Chairman LAZIO. Maybe I ought to start, out of fairness, with you, and ask you, given what I have laid out, if you can comment on that.

    Mr. CANTWELL. A couple of comments about it: One is that the principle of expecting from Health and Human Services participation for supportive services makes sense on its face. It is logical. It is completely cogent.

    As a veteran service provider who has been successful in competing in most jurisdictions for HUD dollars through the local continuum of care, I would not say that we are representative of most homeless veteran service providers across the country. The bulk of what is occurring in most continuums of care is dollars that go out to families and children, very often renewal applications. You never get down to adult single males, much less homeless veterans.

    So while that bulk of the 250 agencies represented in the National Coalition for Homeless Veterans are struggling to compete now in the distribution system—not necessarily successfully—I think something like 3 percent of HUD dollars have found their way into support service or homeless activities for veterans, the system as we know it has some stability. The notion of changing Federal agencies and developing a new distribution system for how one competes in that creates considerable anxiety. I think I mentioned that before. The notion of HHS stepping in makes perfect logical sense on the one hand.
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    L.A. Vets has taken an approach of trying to separate out the use of funds in the endeavor to get the maximum amount of benefits to the most number of our clients as quickly as possible. We were able to do that by going to debt capital markets, along with tax credits and housing finance agency bonds, and the like, to finance the transactions.

    The principle of split fund the homeless activities from various agencies makes some sense, but also complicates the funding streams for providers. The caution flag would be in those local planning boards, absent having veteran representation there, it would probably only ensure us that we would continue to see veteran service providers struggle in terms of getting access to those funds, albeit now if the legislation passes, administered through one or more additional Federal agencies.

    Chairman LAZIO. See, but here we go back to one of the fundamental premises of the bill. I think the way the Federal Government partners—and I am talking about both Congress and the Administration—is irrational. That we have a Department of Housing and Urban Development which is different from HHS, which is different from the Veterans' Administration, and that there is an inability or an unwillingness to collaborate and the same is true with Congress; that we operate by subcommittee. This subcommittee operates divorced, to some extent, from what goes on with Health Services over in Commerce and the Ways and Means Committee; it is nutty to me, because that is not the way people live or families live or the way communities grow or thrive, nor does it reflect their needs.

    So the thrust of this bill is to think out of the box, so we can get departments that have their hands on resources to come together and ponder effectively, and deal with problems holistically, and not to deal with them in a discrete or false way.
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    Mr. CANTWELL. Right. And if there were a way to standardize that, that would be well. The reality of it is there is fantastic partnering and collaboration going on in some places and a complete absence in others. It is not uniform across the country.

    In the city of Long Beach, at the Cabrillo Savannah Naval Housing, we did manage to put together an activity led by the Health and Human Services Department of the city of Long Beach that brought together assets of DOD; it brought together an economic development activity; it brought together Long Beach City College, the University of California, the Department of Veterans Affairs, State EDD, and half-a-dozen different support service providers, veteran service providers together with nonveteran service providers, and Department of Labor. So it happens, but it is not uniform, and I suspect that the guts of how you make this uniform lies in some standardized approach about national priorities, that somehow or another sifts itself down to the local planning boards as they put these things together. We see a lot of variance according to which community you go in which you operate.

    Chairman LAZIO. I want to ask one last question, and then turn this questioning over to Mr. Frank. I am going to ask you, Maria, if I can. You have had quite a bit of experience in terms of establishing an opinion on fairness, I take it, and how grants are being awarded. Give me a sense of whether you think there has been a fair allocation between urban, suburban, rural areas, whether or not you believe that the grants have been awarded based on need, given our current structure over at HUD.

    Ms. FOSCARINIS. I actually find this question hard to answer because it is so overshadowed by the other concerns; for example, the lack of overall resources. In other words, to me, it is much more striking how many grants compete each year and how few of those are awarded. As to whether they are awarded properly, that really seems like a secondary question to me. I mean, we can certainly tinker with that and fine-tune it and make it more fair, but the bottom line is that the process isn't fair when the need is so much greater than the resources that are ending up being awarded.
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    The other point that I think is also important is how communities use the grants, and that is what I was getting at on the block grant comment; that it is important to make sure that, especially given the limited resources, that the resources actually go to helping people, and actually are used by entities, private, nonprofits, or government entities, that are constructive in their approach—inefficient use is the problem.

    Chairman LAZIO. OK, thank you very much.

    Mr. Frank.

    Mr. FRANK. Thank you, Mr. Chairman.

    I am struck that the clock which was broken for the last thirteen minutes appears to have been repaired.


    I assume we will have some uniformity in the distribution of time. Thank you. And my congratulations to the repairman who made the very timely improvement.


    Do I take it correctly that, except for Ms. Foscarinis, you all think we are spending the appropriate amount on the homeless problem right now?
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    Mr. Berg.

    Mr. BERG. No.

    Mr. CANTWELL. No.

    Ms. SANDORF. No.

    Mr. FRANK. Well, how come you didn't say so? Only Ms. Foscarinis says in her testimony that the authorization should go up. I think you make a mistake—I understand; I honor the work that you do. It is very difficult. I realize that you have a dual role. You have a commitment, and therefore, an obligation to your clients, and the obligation comes with the commitment. No good deed goes unpunished. You volunteered to do these good works, so you take on this obligation. And you have to work within the system.

    But there is another role as advocates, which is to increase the resources. I think too many people today are falling into the trap of accepting without protest a very inadequate framework and simply focusing on making the best. Only Ms. Foscarinis talked in her statement about raising the authorization to $1.6 billion. Indeed, in some of the cases what we are talking about is, well, we will take it from here because we need more here, but then there will be less there, and we need more there.

    In fact, I am just noticing the testimony of George McDonald from the Dole Fund, who I guess was an on-again, off-again witness because of some disagreements. He is against the bill, although he acknowledges the good work of the Chairman and he says, ''We owe our success in large part to HUD, under the leadership of Secretary Cuomo.'' He says good words about Mr. Hodgehill, but he is worried because he says, what the bill does is take money from paid work and give it to housing.
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    We talked before—the Chairman just asked a question about taking money from shelters and giving it to housing. I understand that at the end of the day we are going to have to decide how to allocate inadequate resources. But shouldn't we, at least in the morning, be yelling for more resources? Shouldn't you be up here talking about what a disgrace it is that this rich country passed a bill in 1997—Mr. Lazio talked about how the 600,000 figure hasn't budged. Do you know what else hasn't budged? The amount the Federal Government will spend on important social problems, and it didn't budge from 1997. No budging in sight until 2002.

    Now we are talking about a billion dollars this year, and we are under a bill that puts caps on and says we will be spending the same thing overall for the Federal Government in 2002 that we are spending now. So the inadequacies will get worse.

    On the other hand, I don't want to misrepresent my Republican colleagues. They are not for stasis. They are for taking some of the money that is now allocated for things like this and giving it to the military, so that there will be even less. This is a problem.

    I spent a lot of my time listening to people who worry about community health centers and environmental cleanup and the Land and Water Recreation Fund—all advocates of good causes, and very few stopped to say, how about more overall? Because we can't continue to take from one to give to the other. You are the sum of the parts, and the parts can't keep getting bigger when the whole drops.

    So let me just ask you, do you think we are now spending an adequate amount on homeless problems?
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    Mr. Cantwell.

    Mr. CANTWELL. No, and I want to add something to that. I think there is a need, going back to a question that Mr. Lazio was raising, around bringing the Department of Veterans' Affairs and how their allocation process works for healthcare for homeless veterans and for veterans in general——

    Mr. FRANK. See, Mr. Cantwell—I am sorry, finish. I apologize.

    Mr. CANTWELL. The point is that there is capacity to take a veteran who is unique among homeless and stitch them onto clinical care systems available through their entitlement as a vet.

    Mr. FRANK. Is it your understanding that the Department of Veterans' Affairs now has enough money to do all that?

    Mr. CANTWELL. Absolutely not.

    Mr. FRANK. Oh, OK. See, that is the problem.

    Mr. CANTWELL. The answer to your question is, no, we don't have enough.

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    Mr. FRANK. All right, but, see, that is the problem. I understand you have become too technically skilled, and you have become a little more morally indignant.

    Mr. CANTWELL. All right.

    Mr. FRANK. Your response to me is, well, I could find a way to get it into the Veterans' Affairs, but I had veterans in my office today complaining about the $3 billion shortfall in the veterans' thing. To build highways last year, we announced at some point that 19-year-olds who were getting shot at and smoked to calm their nerves, it was their own fault that they have cancer now; we are not going to provide any medical care for them. That was part of the highway bill, because we had to build highways, and that was a dilemma for all of us.

    So, I mean, when I ask you, the answer shouldn't be, well, we can take a little more from the veterans——

    Mr. CANTWELL. I am not suggesting you take it away from the——

    Mr. FRANK. But that was your first response. And there is a problem. You guys have too much technical expertise. We need more radicalism. We need more advocacy on the fundamentals.

    Now I understand, you have got to walk the line, and they are in control. I can get them madder than you because they don't control my appropriation; they control yours. And I don't mean the gentleman immediately to my left here, but I am talking about the framework.
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    Where is the indignation about a bill that was passed in 1997 that says ''We will be spending the same dollars overall on discretionary spending in 2002 that we were spending in 1997, despite the increased wealth of this country, which is increasing in a way that increases inequality? Oh, by the way, we will take more of that and give it to the military.''

    Let me ask you all about a tax cut. Mr. Berg, are you for a tax cut? Should the Federal Government cut taxes?

    Mr. BERG. Any tax cut? It is sort of a complicated question.

    Mr. FRANK. Gee, that is the simplest question I have asked in my whole life.


    Well, let me explain it. Am I putting you on the spot? Yes, and I acknowledge this; you are people of enormous good-will; you are doing great things, but you have got to understand you are letting us off the hook too much.

    If we cut taxes—and let me be very explicit; here is the way this works: In 1997, this Congress—I voted against it—passed what we called the Balanced Budget Act. Now the purpose of the Balanced Budget Act was essentially to cut medical care to pay for a capital gains tax cut, because the budget was balanced anyway. People were getting really nervous; the damned budget was running off and balancing itself without our being able to take credit for it.
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    So what we did was we put an overall limit on spending, and now we were going to give more to the military. And then, come 2002, when that expires, many of my colleagues want to do a big tax cut, which will guarantee that you can have no more in this general area than you are now getting.

    So, if in fact you believe we are spending too little in a whole range of areas here, then I have got to tell you that a tax cut locks that in. I do not think you can responsibly morally advocate for more money for these programs without confronting the issue of a tax cut, unless you tell me you want to cut the women's and children's program or you want to cut environmental cleanup. I want to kill the manned space program, but I want to be able to eat more and not gain weight, and I ain't going to get either. And I make Stephanie nervous when I talk about the manned space program.

    But the fact is that you just have got to get more resources, and you are not doing that. I think you ought to be doing that.

    Anybody want to respond to any of this?

    Ms. FOSCARINIS. I would like to respond. I am very grateful to you for agreeing with me. I am really honored by that.

    But I want to say that, obviously, I totally agree that we need more resources and we need to be advocating for that; we need to be making that case. But I also want to say that I don't think that this has to be a question of being radical or not. I mean, maybe it is just a question of what you call it.
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    But I want to remind us all that, in 1987, when the McKinney Act was first passed, it was passed with very large bipartisan majorities. It was not a partisan issue. It was a moral issue. It was seen as such. It doesn't have to be a partisan issue now. So, I mean——

    Mr. FRANK. Well, that is your problem.

    Ms. FOSCARINIS. I think we need more resources, but we can all unite behind that. We don't have to be divided on that.

    Mr. FRANK. I agree. I will strike ''radical''; that is true. I should have said, ''more activist.''

    But I think this is part of the problem: You know, everybody wants to—you said we could all agree. Well, we can't agree; there are differences in values. People who think that the Federal Government does too much, that Government spending is a bad thing, and that tax cuts are much more important, don't agree with you, and you are simply making a terrible mistake if you think that you can take these questions of values and brush them aside. No, it is, unfortunately, not the case.

    You think we need $1.6 billion, but the bill is $1 billion, and if you get a tax cut and you raise money for the military, there can't be $1.6 billion. So I think you need to confront this.

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    The problem right now is that Government spending has a bad name, and Government spending has a bad name, but individual aspects of Government spending are popular. Everybody hates Government spending, but they like Pell grants; they like homelessness fighting; they like highways. Until you help us turn that around overall, you are going to continue not to have the resources.

    Ms. FOSCARINIS. OK, well, let's work together to do that then. I think we stand ready to do that.

    Mr. FRANK. No, I think agreement for the sake of sounding agreeable is a mistake.


    Mr. FRANK. No, there are real political differences. It is not nonpartisan. It is not non-ideological. There are differences in this country between people who think we need to have a more active role at the Federal level in dealing with social problems and people who don't.

    You think it is being nonpartisan? You tell me how many votes you are going to get for your anti-NIMBY and anti-criminalization of the homeless. Now I think you have got a very good point, but if you think that is remotely nonideological and nonpartisan, you are wrong. That is a very divisive thing. There is nothing the matter with divisiveness, but you have to recognize it.

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    This notion that we are all going to come together and hold hands I think is wrong. Unfortunately, the climate has changed somewhat. It is not 1987, and the problem is I am talking about the real numbers. You have got to be willing to confront people who disagree with you.

    Ms. SANDORF. Congressman Frank, I don't believe we should have tax cuts. But I think that there is something very important you just said, and it relates to something that Mr. Lazio said in the beginning of the hearing, which is I think people don't like government spending because they believe it hasn't been very effective.

    Just to give you an example—and Steve referred to the research that has been done—studies that have been done in shelters in New York, Boston, Philadelphia, and Columbus, Ohio has showed something. It shows that about 15 percent—about 85 percent of people in the homeless shelter system stay there no longer than two or three weeks. About 15 percent of those folks stay anywhere from three to twelve years. They are consuming hundreds of thousands of dollars per shelter in shelter costs, which is not housing, and it is the Dickens' ''poor houses.''

    If you were able to target what is not as much money as we need, but target the money that we have to that 10 to 15 percent, get them other of the shelter system into permanent supported housing, you will be able to reduce the shelter system and the cost of the shelter system——

    Mr. FRANK. Wait. Let me ask you a question. How much would it cost to build permanent housing for all those people?
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    Ms. SANDORF. For the 10 to—we are saying about 200,000 people. If you multiple that by $80,000, 200 times $80,000 is what, 200,000 times $80,000? I am a terrible math student.

    Mr. FRANK. Well, have you asked for that? The bill doesn't have it.

    Here is my answer to you: I am agreeing with you; let's do that. But this bill doesn't do it, and you are not asking us to do it. Ask us to do that. I would love to build them all permanent housing. We would have to deal with those issues Maria Foscarinis mentioned, the NIMBY issue, in particular. Yes, you would. You wouldn't have to deal with the criminalization.

    But the answer is that is fine. I think that is exactly right, but one codicil: Don't ask for it by taking the money out of other housing programs. Let's take it out of a tax cut that we don't need or out of other resources. So I am all for that. If you ask for that, I would be with you.

    Mr. Chairman, I thank you for time, and I would just ask to put into the record the testimony of Mr. McDonald.

    Chairman LAZIO. Without objection.

    Chairman LAZIO. Mr. Barr.
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    Mr. BARR. Thank you, Mr. Chairman.

    Frankly, I am sure we all have views on tax cuts, and everybody is entitled to their views. I don't see the relevance for these hearings today. I appreciate you all trying to sort of stick to the issue here.

    I presume that everybody who is an advocate for a particular program would like to see more funding. I don't think it is something that one needs to radicalize or pound on the table for. I appreciate you all being here today to comment on some very specific legislation to provide constructive, specific commentary on the needs of your agencies and the needs generally for homeless funds, as well as to provide the Chairman some specific, very constructive suggestions for the particular legislation. So that we can take this legislation, modify it to the extent necessary to reflect the needs of your agencies, and agencies such as yours, to come up with the best piece of legislation. I appreciate you all doing that.

    Would it be fair to say that, in terms of meeting the needs of your community and the homeless citizens in your community, that the most flexibility that you can have with regard to how to use the specific funds would improve the chances for meeting the needs in your community, as opposed to having more, rather than fewer, decisions made by Washington? Would that be a fair representation? Would you all agree with that? You would rather have the decisions made by bureaucrats in Washington?

    Ms. SANDORF. I think it depends——

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    Mr. BARR. I mean, it is interesting because homeless folks down south, they understand, for example, that when we took up the housing reform legislation last year, that we are going to be facing in some areas not as significant increases in funding as they would like. What they are doing is, they are looking for ways—one way of meeting the reality of less dollars than we would like to have is to change programs, to provide more flexibility, so that those in the position of meeting the local needs can better use those monies. That is one way of meeting the reality of perhaps less funding than we would like to have.

    Another way would be to direct the funding to more local programs, for example. But in Georgia, for example, in talking with the people that run programs that meet the needs of homeless citizens in our communities, I am told that we can deal with some cutbacks in funding or increases that aren't quite what we would like to see, as long as you, the Federal Government, provide us more flexibility in using those funds that are available. That creates greater efficiencies for us.

    You find that that is not the case in your community?

    Ms. SANDORF. Well, I have a somewhat related response, which is flexibility is a great thing because local conditions are different across the country, and financing conditions are different. But that flexibility has to be tied to outcomes. It has to be tied to outcomes that show ending homelessness among people, ranging from people who have short-term homelessness problems to long-term chronic disabilities.

    One of the problems with flexibility is that it doesn't come with accountability, and we perpetuate a system of homelessness in this country.
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    Mr. BARR. What is the best way—and I don't disagree with you. I think that is very, very important. Does the legislation before you on which you are commenting today, does it address that particular concern?

    Ms. SANDORF. It is moving in that direction, and we are working with staff to refine specifics on that, yes.

    Mr. BARR. OK.

    Ms. SANDORF. We think it is making the right move in the right direction.

    Mr. BARR. I think that is very important. I agree with you.

    Do any of the other panelists have any comments on that particular aspect or my statement generally?

    Mr. MANGANO. I think that the genius of this legislation, actually, is that it does two things. It both offers flexibility in terms of how localities want to invest the dollars to combat homelessness, but it also takes responsibility for leadership. I think flexibility without leadership doesn't serve homeless people as well as they could be served.

    So I think in providing the leadership specifically around the affordable housing issue and requiring a certain setaside for permanent housing, I think that is a very important ingredient. That is something that could be bypassed because of some of the issues that have been mentioned earlier in terms of NIMBY-ism or other issues that relate to the creation of housing. That kind of leadership is very important, and I think the Federal Government has historically been important in providing that notion of leadership, while still providing an opportunity for flexibility at the local level. I think in maintaining both of those, the bill serves homeless people well.
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    Mr. BARR. I appreciate that.

    Mr. Chairman, I appreciate this legislation. I think it is very, very important, and look forward to our working with you in support of it. And I appreciate the panelists being here with us today.

    Ms. FOSCARINIS. Congressman Barr, could I just respond briefly to your question?

    Mr. BARR. Certainly, as long as it is OK with the Chairman.

    Chairman LAZIO. We will give unanimous consent.

    Ms. FOSCARINIS. Thank you.

    I believe that flexibility has to be accompanied by accountability. I don't think it is appropriate to balance diminished resources with increased flexibility. I don't think that is a fair tradeoff to make. I think increased resources are necessary. I don't think increased flexibility makes up for that. I think the problem that we have tried to articulate is that in many local communities local governments are taking approaches to homelessness that are not constructive, and that actually are destructive, and are not ones that we would like to see the Federal Government funding.

    I mean, I think the Federal Government needs to make sure that local communities are using those resources appropriately. That is the balance between—the virtue, the good things about flexibility, but also maintaining that accountability that comes with Federal oversight.
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    Mr. BARR. I think that is very important. I am not saying that in every instance that it is a direct tradeoff. All I am saying is that, when faced with a reality—and it is a reality that there is not sufficient monies to meet all of the perceived and real needs in our communities for this and many other problems that we have—there are different ways of responding to that. I am simply saying that I find, in hearing directly from those agencies in my communities that I represent, when faced with the reality of there not being sufficient funds to meet all of the needs, they say, we can deal with a lot of that if you provide us more flexibility in how to use those limited dollars. They are not saying, we want less money, if you give us more flexibility. They are simply saying that it makes it even more difficult if we don't have more flexibility.

    But, thank you for your comments.

    Chairman LAZIO. I thank the gentleman. I am going to excuse myself because I have, unfortunately, a conflicting hearing involving another issue I am very involved with, and that is cancer. So I am going to turn the gavel over to Mr. Ney, but, before I do that, I want to recognize the gentlelady from California for purposes of five minutes, Ms. Lee.

    Ms. LEE. First, let me just say, I want to associate myself with the remarks of Mr. Frank. I also share his perspective with regard to the pie needing to be increased.

    Let me just mention to you a couple of things. I come from the San Francisco Bay area, and as you know, we have a very large homeless population in the Bay area. Last week we marked up H.R. 10, the modernization bill, and this week we are dealing with issues around the homeless. I thought to myself, ''Well, good, today we will have a room full of people who are advocates for the homeless, like we did last week when we did banking modernization.'' I look around, and I can't even believe this is the same subcommittee room.
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    I know it is very difficult to organize the homeless and to organize coalitions of organizations to come out and speak out for homeless assistance and for problems relating to the homeless, but I think that as we move into the next millennium, given the magnificent economic recovery that this country has benefited for some, we haven't somehow figured how this recovery would benefit all. The homeless population is one population that has not benefited from this economic recovery.

    I appreciate your advocacy, because the homeless really are a special interest group that have very few individuals looking out for them here. But somehow we have got to really begin to figure out how to better organize around this issue, so that we can gain the attention of the Congress, so we can appropriate billions more, so we can end homelessness.

    My area, of course, is one of the most liberal areas in the country, but we have a severe problem of NIMBY-ism in the Bay area. We have been fighting over this for the last—who knows how many years? I chaired the State Senate Committee on Housing and Land Use, and we tried to keep the armories, the National Guard armories, open. It was a fight. The State did not want to do that. I say that because of this whole issue around block granting now. I mean, we had to go to war with our State governor and our State officials just to keep armories open. So I worry about block-granting a large portion of this money, because many States and many local communities, such as in my State, may or may not do the right thing for this most vulnerable population.

    So, as we move forward in this bill, I want to ask any of you who could answer this question with regard to the block-granting of this money and attitude of hostility toward the homeless, how do we begin to make sure that local government, that State governments really do change their attitudes and do the right thing? Because, if not, we are going to just see an increase in the numbers of homeless in the State, given the block-granting nature of the way this Congress is going.
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    Ms. FOSCARINIS. If I may respond to that, Congresswoman, I think the way we do that is we put in safeguards in the grant, and there are different stages at which we can do that. We can put in the safeguards that say, these funds are to be used only for these activities; they are not to be used for other activities—and be very specific about naming those.

    The block grants should not be the same as just handing over a blank check to a local government. There are ways to condition the money, to ask for certifications which local communities can then be held accountable to, to build in procedures for local groups to complain or to seek assistance from HUD, if the funds are not being used the way that they should be.

    Ms. LEE. Mr. Chairman, may I just ask then: What happens, though, if a local government decides they don't want this money, or a State decides we elect not to go for it? What happens to the homeless population? I am reading ''Street Lawyer'' now.

    Ms. FOSCARINIS. Yes.


    Ms. LEE. For any of you who haven't read that, I highly recommend that book.

    Ms. FOSCARINIS. Great. That helped a lot, actually.
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    Well, we think the remedy, of course, shouldn't be withdrawing the money, because that would only hurt the people that we are concerned about. So we have actually suggested in our testimony coming up with an alternative mechanism to award the funds to nonprofit groups. I mean, in the event that the local community is not complying, then HUD could, instead of just totally withdrawing the money from the community overall, reallocate the money.

    Ms. LEE. Is that safeguard built into this bill?

    Ms. FOSCARINIS. No, but that is a comment that we are making to this legislation. That is a proposal.

    Mr. FRANK. If the gentlelady would yield, that is an amendment. We will be caucusing tomorrow. If you want to work on an amendment to that effect, we could offer that.

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

    Mr. NEY. [Presiding] Thank you. The Chair would also note there is some feedback problem with the mics. We are trying to get somebody here to correct them. So we apologize.

    The Chair recognizes Mrs. Jones.

    Mrs. JONES. Thank you, Chairman Ney.
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    Good afternoon. I would like to thank you for your testimony.

    To give you a little background, I come to Congress as a fresh person—I keep saying that; they don't like that—from the city of Cleveland, the State of Ohio, a former prosecutor, a former judge. My experience has given me the insight to see the homeless in the criminal justice system, charged not only at the State level, but also the municipal level as well. I also have had some experience trying to work with our State drug agency or drug czar about trying to coordinate services between the mentally ill and those who are substance abusers.

    I wonder whether or not—and I put this question on the table—as part of a grant-making program which was called Criminal Justice Service Supervisory Board, we put out a request for proposal that required anybody making an application to coordinate their services with two or three other agencies as a condition of being eligible for a grant, and the purpose being trying to get what we have been talking about this afternoon. If that were a condition, and unlike some of my colleagues who think I like bureaucrats in Washington making decisions when the decisions work and we can replicate across the country, even though it may differ in some ways, how would you feel about that being included in an application process? You know, I don't have it tied specifically to anything, but I am suggesting the things that you have seen work across the country, as a condition of receiving funds.

    Mr. MANGANO. I think the reality is, and one of the strengths of the continuum of care that HUD has built is, in fact, that it does call people from a variety of different resources to the same table, so that those resources are mixed in terms of the attention paid to homelessness. I think one of our concerns, actually, is at the Federal level, that that same kind of coordination would take place. We are particularly concerned that HUD dollars—and we have spoken about this—are used so much for services, and that other agencies in the Federal Government—HHS, DOL, USED—their resources aren't so readily available to assist homeless people. Certainly at the local level, which is I think what you are talking about, there is a strong push in terms of the continuum of care that HUD has established to do that, and I think we have concerns at the macro level, at the Federal level, that that same kind of coordination would take place.
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    Mrs. JONES. So, then, you are saying that it would not give you pause if it included in some of this programming or a request was a requirement that there be some type of coordination?

    Ms. SANDORF. Well, I would temper it a little. I am a big believer in carrots, not sticks. We spend a lot of time in communities across the country working with different nonprofits, those who provide substance abuse, mental health care, and so on, to coordinate in a very formal way their services in supported housing. But we have done it with a carrot approach. We have provided financial incentives that appeal to their common self-interest, which tend to work better than requirements that might bring groups together who don't philosophically agree or can't get along, and you will have a bigger mess than you might if you had the appropriate——

    Mrs. JONES. One of the conditions in the proposal that I was presenting to you was that they had a history of working together.

    Ms. SANDORF. Then it is fine.

    Mrs. JONES. Because if they don't have a history of working together, you are putting a Mack truck in front of a train.

    Ms. SANDORF. It is a difficult thing to imprint, but we have seen carrots, and even carrots that have happened with McKinney monies, carrots to State and local government. The reality is that 90 percent of HHS funding gets block-granted down to State and local government. HHS itself doesn't have a whole lot of money to hand out in Washington. What we have seen is McKinney dollars that, particularly the permanent rent subsidy dollars that are very valuable to State and local government, if you require cash match, State and local government will look at their HHS pots and their source of service block grant pots, and their substance abuse treatment pots, and they will use those funding mechanisms to match the McKinney dollars. I am not as sanguine about that happening at the Federal level as I am, because I have seen it happen, at the local level, but it has happened with carrots, with incentives.
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    Mrs. JONES. Thank you. I don't have but a second left, it looks like. I just wonder, do any of you have any contacts in Cleveland that you have ever worked with, Cleveland, Cleveland Heights, University Heights, Shaker Heights?

    Ms. FOSCARINIS. Yes, yes.

    Mrs. JONES. Like who?

    Ms. FOSCARINIS. Well, there is the Ohio Coalition for the Homeless, which is statewide, and then in Cleveland there is—I know we have worked with an ACLU on litigating some issues there.

    Mrs. JONES. Right.

    Ms. FOSCARINIS. I am sure in our office we have other contacts that we could get to you.

    Mrs. JONES. I would appreciate, if you would. Again, new to all these new programs, I am trying to make the appropriate contacts. We have, real quickly, Mr. Chairman, a wonderful program called, I think it was, something to mailboxes, where we gave homeless people beepers, trying to just keep them in contact. Voice mail, I am sorry. I call them beepers. Everything is a beeper to me these days.

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    Voice mail seemed to work pretty well, but it got defunded in some fashion; I am not sure.

    But I would appreciate any contacts you have so I could make those contacts at home.

    Ms. FOSCARINIS. Sure.

    Mrs. JONES. Mr. Chairman, thank you very much.

    And, ladies and gentlemen, please excuse me. I am going to testify about campaign finance reform now.

    Mr. NEY. The Chair recognizes Mr. Frank.

    Mr. FRANK. Thank you, Mr. Chairman. I just want to say, I just think it was useful—not useful, but relevant—we talk about the McKinney Act, but it really ought to be called the McKinney-Vento Act. Because I remember when homelessness became an issue, and then-Speaker Foley decided that there needed to be a response. The gentleman from Minnesota was the Chair of a task force, and he has for all this period been its most careful and ardent supporter and defender. We intend on our side still to be guided by his work, and I just wanted to recognize that.

    Mr. NEY. The Chair recognizes Mr. Vento.
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    Mr. VENTO. I thank my colleague, Mr. Frank, for his work and the response of the Members today. It is delightful to have Ms. Lee advising me on this topic just a moment ago. I do appreciate you can't do things alone. So, clearly, having the support, and especially the organizations at the table here today, they have all really dedicated, in a sense, their lives to many of these problems. I think that is what is important.

    Mr. Chairman, when we are talking about additional requirements, we ought to recognize that the dollars, the billion dollars now that we are putting in, is really the tip of the iceberg in terms of what needs to be done and what is being done by the nonprofits, and to some extent the local governments. Most other ventures with regard to housing programs that we have are almost entirely Federal. When you scratch below the surface, you always find Federal money or tax breaks, and so forth. But when it comes to these problems with the homeless, they are not.

    I have a lot of questions here. So I don't want to go on with the history and trying to set the record straight, or at least get my views out there. But, needless to say that a billion dollars, none of us are capable of the miracle of loaves and fishes with regard to providing more money. Even block granting won't do that.

    But I think that we are getting a lot of service for the dollars expended in this program. I wish that all of the programs that we had in Congress were so carefully matched and used, because we have matching dollars in this, matching volunteer service.

    But there are a lot of questions here. They want you to do more. They want to do some for special populations. For instance, one proposal suggests we ought to take 20 percent of the dollars from McKinney and devote it solely to the needs of veterans, a worthy group. Anyone have any opinions on that at this table? Yes?
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    Ms. SANDORF. This, Mr. Vento, I think, in the hearing last year. We went back and surveyed the groups we work with to get a sense of what was the percentage of individuals in supported housing in the over almost 9,000 units we have supported were veterans, and it was about 27 percent.

    So I think, by serving some of the hardest-to-reach, people with chronic disabilities, veterans are naturally becoming tenants in supported housing.

    Mr. VENTO. I don't have a lot of time. Anyone else have any opinions on that? Do you think there ought to be a 20 percent setaside taken away from these programs and given to the VA or given to veterans' groups solely?

    Ms. FOSCARINIS. I have an opinion, which is I think that homeless veterans should be included and should, of course, be served by the McKinney programs. I shy away from the setaside because of the resource issue. I think the real problem is increasing the resources, not dividing them up differently. Especially with a group like veterans that has an agency that is supposed to be devoted to them, I would like to see us putting pressure on the VA and get more money from that corner, instead of just kind of dividing the existing money. I think we have an opportunity to get more resources, and I think we need to pursue that.

    Mr. VENTO. Well, I mean, to me, it would mean $1 in $5 would not go to the existing nonprofits or local governments. There may be, coincidentally, some veterans' groups that are competing in gaining funds, but I think that, largely, I don't think they would make up 20 percent.
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    If you are slightly against it, or if you are slightly for it—I understand you may not be prepared, but feel free to write to me and expound on this particular topic, because it is likely to be a challenge that you face in the future.

    Ms. Sandorf, I appreciate your mentioning Minnesota in your testimony and some of the research work done in my sister city of Minneapolis. Can you elaborate on the renewal of Shelter Plus Care in the Section 8 budget and the importance of that?

    Ms. SANDORF. I will preface it by saying that I fully agree with Mr. Frank that resources have to be increased on all fronts. In this case, in particular, Shelter Plus Care has been one of the most successful efforts for ending homelessness for people with disabilities. It is very flexible. It has been able to be used to develop new housing, to provide scattered-site housing. A significant percentage of people have been able to move out of Shelter Plus Care into more independent living on their own time, and it has been a critical resource in ending homelessness.

    Very importantly is that, once people are able to access permanent housing through Shelter Plus Care, they are no longer homeless. They just happen to be among the lowest-income people living in our society.

    Given the resource base of the McKinney programs and the unbelievably declining percentage of that money going into permanent housing, one option is to basically shift the Shelter Plus Care renewals into the Section 8 account, because, quite frankly, the tenants involved are among the poorest, the most low-income people in our country, would be worthy of Section 8 subsidy.
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    By doing that, we are able to increase the amount of permanent supported housing.

    Mr. VENTO. Say that again?

    Ms. SANDORF. What?

    Mr. VENTO. What is that last thing you said? By doing that, we are able to increase the amount of housing?

    Ms. SANDORF. Permanent supported housing initiated through the McKinney programs.

    Mr. VENTO. I hope my colleague from Massachusetts—I mean, this is very important in terms of getting some sort of long-term commitment. Clearly, with regard to homelessness, even though we have successes in the hundreds of thousands each year in terms of moving people back to the mainstream of our society and off the streets, obviously, no one is turning off that conveyor belt, the last time I looked.

    Ms. SANDORF. The reality is that chronic disability in many cases is something you are born with. So it is not like you can take it back—and mental illness—that is a reality.

    Mr. VENTO. One of the things, Maria, that you brought up—if I can have the indulgence, Mr. Chairman, of another question—is the issue of accountability. But if we have a plan, and the plan, obviously, states what the objectives of the local community are, and for that matter, the nonprofits, and then they are holding folks accountable to that part of that plan, I would say, should involve—you know, so often we find that these funds are flexible funds—but I think the key is to make certain that you engage the Medicare, the labor money, the education money, the food stamps, the veterans' benefits. So often, that is the case, that people are on the street, are really in desperate straits, and that they need to engage the benefits they otherwise would be entitled to, or at least they could compete for.
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    But wouldn't the plan actually, if a plan were put forth by a community and reviewed in some fashion, wouldn't that, to a degree, satisfy this accountability issue that you are concerned about?

    Ms. FOSCARINIS. Yes, it could go a long way. I think a lot would depend on the details of a plan, how specific a plan is, and whether the plan is backed up by some enforcement mechanism. In other words, it is not just a plan, but it is a plan that you can actually do something with. So if it is not being complied with, someone can do something about that.

    Mr. VENTO. The concern I have, of course, is that, unlike some housing programs, we are not putting every dollar in. I think this is a case where we are putting maybe—you know, an iceberg is only 10 percent out of the water, and we are putting in less than the total here, because it is matched in many cases. So it is a question of how much leverage we have before we end up causing disruption in terms of this and rejection perhaps of the program.

    Thank you, Mr. Chairman.

    Mr. NEY. Ms. Schakowsky, do you have any questions?

    Ms. SCHAKOWSKY. Thank you, Mr. Chairman.

    I have for a long time worked with organizations like the Coalition for the Homeless in Chicago. I am feeling frustrated by what appears to be somewhat of an intractable problem. I am sure you feel otherwise; I hope you do.
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    I wanted to ask you, though, if anybody has really figured out what the cost would be, considering some of the savings that would be realized, also, if we provided long-term supported housing for the homeless population that we have right now, as opposed to all of these? When I look at shelters, when I look at the various soup kitchens that we have, people thrown out after a couple of hours or sent out in the morning onto the street, and all of these bandaid kinds of programs, it occurs to me that we have got to do something better, something more long term. I am wondering what the bill is for that, if anyone has figured it out.

    Ms. SANDORF. They said this was my question to answer. There has been little to no research up until maybe the last year or two on what the cost of homelessness in America is. The research that has been done, sponsored mostly by CSH, has shown that it is costing far more to do nothing than it is to do something. Preliminary data is showing, for example, in New York City, where the largest amount of supported housing has been built, that for 5,000 people who are homeless and mentally ill, who are now in supported housing, there has been a 35 percent reduction in inpatient and emergency room costs in the public hospital system. We have seem dramatic decreases in the Bay area in emergency room utilization, down from twelve to fifteen a year to maybe one a year. We have seen 50 percent drop in utilization in hospitalization in supported housing in San Francisco. We saw in Minnesota, in our Supportive Housing Demonstration Project that the State provided the data for, 36 percent drop in costs in the mental health system, criminal justice system, shelter system, when people were able to access supported housing.

    So, yes, there is an upfront capital cost, but if you amortized it over the long time for people who have been chronically homeless and who have multiple barriers, it is far less costly than what we are doing. Why we don't see that is because those costs are buried in public sector huge budgets, you know, in the public hospital system, in the Medicaid system. It is very hard to seek it out.
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    Ms. SCHAKOWSKY. In the cost of incarceration as well.

    Ms. SANDORF. And the cost of incarceration. There are 15,000 homeless, chronically mentally ill people living in the city of New York jail system today, at a cost of about $69,000 a year. Decent, high quality, permanent supported housing is about $12,000 a year in the City of New York.

    We are convinced that the long-term costs are much less than the ad hoc measures we are doing now.

    Ms. SCHAKOWSKY. Go ahead.

    Mr. MANGANO. I would just like to add, in Massachusetts we have investment both in people who are chronically homeless, chronic disabilities, as well as an investment in people who are not chronically disabled. They are what one of the researchers terms episodically homeless people who can retain stability throughout the shelter experience. In both of those cases, we have discovered that the cost associated with moving those folks to permanent housing is much less than either their being in emergency shelters or moving into the acute side of treatment systems, whether it is mental health or the substance abuse system.

    We have housing that exists which is saving dollars precisely because people have moved out of emergency shelters into appropriate housing, where, again, those are chronic and who are episodically homeless.

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    Ms. SCHAKOWSKY. I would just love to see the whole discussion moved in this direction.

    Before the red light goes on, let me ask one thing. To what extent does domestic violence contribute to homelessness? And are we seeing static numbers of families, women and children, or are those numbers growing? And to what extent is domestic violence involved?

    Mr. MANGANO. There is no question that domestic violence has an impact in terms of the homeless arena. We have seen in Massachusetts, especially, I would say, in the last six or eight years, increased numbers of women coming into emergency shelters, both for families, for individuals, as well as, of course, the battered shelter network. There is no question that there is an impact there. Of course, it is inappropriate again—the provision of housing would be a more appropriate response in terms of keeping the housing anonymous, obviously, but it would be a more appropriate and probably less costly response.

    Mr. FRANK. Mr. Chairman, I would just ask unanimous consent for the request of at least one of the Members to be able to ask questions in writing.

    I did have an answer for Ms. Sandorf. I am a little late with my math, but I think you said 200,000 people at $80,000 a unit. That is $16 billion. So come and ask for it, and I am with you. But it would cost $16 billion to do that. Let me tell you, under current levels, there is no way we can do that. I am ready to do it. I think that would be a good idea, but it is up to you, also, to help and come and ask for it. We will get that $16 billion, and we will do it. So I hope the next time you testify you will be talking about that $16 billion.

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    Mr. NEY. Without objection, questions will be submitted.

    Ms. LEE. Thank you, Mr. Chairman.

    I would like to go back to the issue of homeless veterans for a minute. First of all, homeless veterans should be an oxymoron. There should be no homeless veterans. It is outrageous that we even have to discuss this.

    The impact of this bill on homeless veterans I would like to get to in just a minute. But let me just ask you, in terms of welfare reform now, and the efforts to transition people from welfare to work, in California when our State makes welfare cuts, cuts in public assistance, we always start—and I don't support this, but the majority of the legislature over the last six years supported cutting general assistance. When we looked at who is impacted by general assistance, they were primarily veterans, single men, homeless veterans, who happened to be African American.

    What I want to ask you, at least from a national perspective, because this is the first chance I have had to ask this question in a congressional subcommittee, is, what has been the impact of welfare reform on our homeless veterans population, and what is the racial composition of our homeless veterans in the country?

    Mr. NEY. I would just note with leniency, we want to be brief.

    Mr. FRANK. In fairness to the panel, let me just note that the person who specializes in veterans had to leave. So it is not that veterans didn't get attention, but the person who could have best answered that question had to leave to make a plane. So we should note that maybe we will get that in writing.
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    Ms. LEE. If we could get that in writing, if you don't have the answer?

    Mr. FRANK. Maybe we can direct that to Mr. Cantwell.

    Ms. FOSCARINIS. I can comment briefly on that, which is that it is included in welfare reform, the changes at the State level, which has meant phasing out, in many cases cutting general assistance programs. That has had a devastating impact on single men, and homeless veterans are certainly in that population.

    But the other piece, at the Federal level, welfare reform, the changes in the SSI program have been significant, and the inclusion of people who are disabled as a result of substance abuse, and to the extent that homeless veterans suffer from substance abuse, losing those benefits has had a significant impact. We, together with other organizations, actually conducted a survey that gives some data, which we would be happy to provide to you, on the impact in terms of loss of housing. Because often those benefits are used to pay for housing, and when we cut them off, that affects——

    Mr. FRANK. I would just have to say, I am glad to hear, Ms. Foscarinis talking about the harm that came from both welfare reform and at the State level. I do have to note, however, that that is what happens when we all go along in a nice, nonpartisan way. That is a good example of nonpartisan, nonideological——

    Ms. FOSCARINIS. I would love to make time to discuss this later.
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    Ms. LEE. And how about the racial composition of homeless veterans? Do you have any numbers on that? If not, you can submit it in writing.

    Ms. FOSCARINIS. I don't at the moment, but we can submit that.

    Ms. LEE. Thank you. Thank you very much.

    Mr. NEY. I have one kind of question, I guess, or comment. Are you familiar with the Ohio Housing Trust Fund? What do you think about that type of concept?

    Ms. SANDORF. I think it has been very successful in Ohio. We have worked with Ohio. We are about to actually start a program in Columbus.

    Mr. NEY. Are you adapting that? I was involved with creating it.

    Ms. SANDORF. It is terrific.

    Mr. NEY. How about adapting that on a Federal level, that type of thing?

    Ms. SANDORF. I think it would be great, especially if we could add more resources through this trust fund.

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    Mr. NEY. Well, that was the biggest problem we had in the legislature, was convincing everybody. It took us two years to convince them that we needed to put that money in there, have it in there, follow up with the bonds.

    Thank you. I want to thank the panelists for your indulgence and your time here in the Capitol today.

    Thanks to Members. The hearing is adjourned.

    [Whereupon, at 4:45 p.m., the hearing was adjourned.]