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THE SECTION 8 HOUSING
ASSISTANCE PROGRAM:
PROMOTING DECENT AFFORDABLE
HOUSING FOR FAMILIES AND
INDIVIDUALS WHO RENT—DAY 4
Tuesday, July 1, 2003
U.S. House of Representatives,
Subcommittee on Housing and
Community Opportunity,
Committee on Financial Services,
Washington, D.C.
The subcommittee met, pursuant to call, at 10:30 a.m., at the California Science Center, Los Angeles, California, Hon. Robert W. Ney [chairman of the subcommittee] presiding.
Present: Representatives Ney and Waters.
Chairman NEY. I want to say hello to all the witnesses and everybody in the room. And this is a—I think it's the fourth hearing on the issue of the Subcommittee on Housing and Community Opportunity. My name is Bob Ney.
I'm a Congressman out of Eastern Ohio, I'd like to introduce someone, who is no stranger to anyone in this room, Congresswoman Maxine Waters of California. And this is the Section 8 Housing Assistance Program. And today the subcommittee continues its efforts to examine the current operation and administration of the Section 8 Housing Choice Voucher Program and review various proposals intended to make the program more efficient and cost-effective.
VOICE. Excuse me, sir. Your volume needs to go up a little bit. I can't hear you.
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Chairman NEY. Okay. We'll do that. Usually there is a lot of hot air that comes out of Washington. Just need to direct it to the microphone.
And again, this is the fourth hearing in the series and the first field hearing on the Section 8 program. So we're very happy to be here for the first hearing outside the Capitol.
Michael Liu, Assistant Secretary of Public and Indian Housing Department of Housing and Urban Development testified at the first hearing on May 22nd, 2003. On June 10th, the subcommittee heard testimony from representatives from tenant organizations, landlord and development organizations, large and small public housing agencies, and the State housing finance agencies.
On June 17th, the subcommittee heard witnesses from the academic community and advocacy groups from around the nation.
Since the 1970s, rental vouchers have been a mainstay of Federal housing policy. Currently the Section 8 Housing Voucher Program supplements rent payments for approximately 1.5 million individuals and families.
While the concept of the program remains sound, the program has often been criticized for its inefficiency. More than a billion dollars is recaptured from the program every year, despite long waiting lists for vouchers in many communities throughout the United States.
The rising costs of the Section 8 program and some of the administrative concerns have caused many in Congress and the administration to conclude that the program is in need of reform.
Among the reforms that have been discussed is the administration's proposal to replace Section 8 tenants' housing vouchers with the State-managed blocked grants.
I have introduced this bill upon request of the administration. And for those of you not familiar with the ''upon request,'' it throws the bill out for discussion. And as Chairman of the subcommittee, I've agreed to do that so we can discuss this issue, both in the Capitol and across the U.S.
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Rather than contracting with the estimated 2,600 separate public housing authorities, as HUD currently does, the department, under this provision, would allocate funds to the 50 States, which could then work with public housing agencies or other entities to administer the voucher program.
As well as examining the merits of this proposal, the subcommittee continues to discuss other avenues for reform. And I would also encourage people, if they are not in support of this proposal, to also give us ideas if you feel there are needs or ways to reform.
This afternoon our two panels consist of government and nongovernment experts from the Los Angeles metropolitan area on the Federal government's primary program addressing the housing needs of low income renters, Section 8.
I look forward to hearing the different perspectives and would like to welcome all of our distinguished witnesses as we discuss voucher utilization in the high cost areas, such as Los Angeles, and ways to improve America's communities and stressing housing opportunities for all citizens.
I just want to say, before deferring to my colleague, that I appreciate the work of Congresswoman Maxine Waters, both within the U.S. Capitol, Washington, D.C., and also outside on many issues, not just this particular issue. We've been able to pass a couple significant pieces of legislation out of the housing subcommittee on a bipartisan basis. And I just appreciate the time that she has spent.
And this is the recess, and she's dedicated two solid days to issues here in California. So it's been a great working relationship.
[The prepared statement of Hon. Robert W. Ney can be found on page 468 in the appendix.]
Chairman NEY. And with that, I'm going to defer to our ranking member, gentlelady from California.
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Ms. WATERS. Thank you very much, Mr. Chairman.
I'd like to welcome you all to this very important hearing that we are having here today. But I'd like to say a very special word of thanks to my colleague, Chairman Ney, for coming to Los Angeles and holding this hearing.
As he mentioned, this is the first field hearing that has been held in this Congress. He took time from his break to be here. He could be in his own district, or he could be taking a vacation, like many of the rest of our colleagues are doing at this time, but he honored my request to be here. And I'm very appreciative for that, and I welcome him.
Yesterday we had a most important hearing on the Community Development Block Grant Section 108 Loan Guarantee Program in the City of Los Angeles. So this is his second day here where he has spent hours yesterday, and will be spending hours today, dealing with these concerns that I have addressed and asked him to come out for.
Let me just say that we are concerned about how we can use our positions to get something done in this country. This is a bipartisan effort, looking at CCG and Section 108 and housing funds that we send from the Federal government to our city in an attempt to make sure they're utilized in the best way possible.
On Section 8 he certainly did not have to do this, because he was asked by the administration to carry it, to put it out there so that we'd create the discussion. He certainly didn't have to hold this hearing today. But I'm very pleased that he is doing it.
And I think working together we may be able to provide some leadership for both of our caucuses and to this administration about Section 8.
With that, I'm going to turn it back over to you, Mr. Chairman, to call on your witnesses.
Chairman NEY. Before we begin, behind us—why don't you raise your hand if you're staff of either side of the aisle, give them a round of applause.
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And with that let me just introduce the panel.
Matthew Franklin, Director of the California Housing Community Development, Sacramento, California; Donald J. Smith, Executive Director, Housing Authority of the City of Los Angeles; third is Carlos Jackson, who was here yesterday, Executive Director, Los Angeles County Community Development Commission; also Larry Triesch, Assistant Deputy, Long Beach Housing Authority, Long Beach, California; Eugene Burger, Eugene Burger Management, on behalf of the National Leased Housing Association, Washington, D.C.; and Thomas K. Shelton, Partner, Greystar Real Estate Partners, and President of the National Apartment Association, and also appearing on behalf of the National Multi Housing Council of Phoenix, Arizona.
I would also note to all the witnesses that the members may have additional questions for this panel which they may wish to submit in writing.
Without objection, the hearing record will remain open for 30 days for members to submit written questions of these witnesses and place their responses on the record. Hearing no objection, that will be the format.
Chairman NEY. The other thing I would note is we have a timer, and we would ask—and it will beep and that means you went five minutes. We would ask for five minutes. And now anything you have without objection will be submitted. If you have additional written testimony for the record. But if you could kind of try to hold to the timer for five minutes because we have a second panel we will make sure we'll finish.
With that we will begin with Mr. Franklin. Welcome.
STATEMENT OF MATTHEW O. FRANKLIN, DIRECTOR, HOUSING AND COMMUNITY DEVELOPMENT, STATE OF CALIFORNIA
Mr. FRANKLIN. Thank you, Chairman Ney and Congresswoman Waters, for the opportunity to testify today and thank you for holding this hearing in California.
As you may be aware, prior to joining the Davis administration, I served in several senior positions at HUD from 1997 to 2001, and have seen firsthand the good work you both do on housing issues, and also have done a lot of work with your staff, Mr. Jones and Mr. Olson, two of the hardest working Hill staffers on housing issues. So we really appreciate you taking the time to get out here.
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Under Governor Davis' leadership, the State of California is leading the nation in providing state funding and programs to meet its citizens' housing needs. In his first term, the Governor appropriated over $500 million for the development of affordable housing. This amount is three times greater than any prior California Governor appropriated in their entire term.
And then last year, the Governor, along with the legislature, and most importantly, the people of California, passed Proposition 46, which is a $2.1 billion bond to support development of affordable housing. This is the largest housing bond in the nation and the largest in California history.
The Housing Choice Voucher Program is a key component of our efforts to meet the housing needs of low-income families. Last year the State received approximately 258,000 vouchers, which were administered by a network of 104 public housing agencies.
The State of California, through my department, Housing and Community Development, also administers vouchers in 12 rural counties. We administer about 780 vouchers.
Voucher assistance generally serves extremely low income Californians, those earning less than 30 percent of area median income. The average California household receiving a voucher has an income of less than $14,000.
55 percent of participants are families with children, many of them headed by a single parent, most often a single mother. 47 percent of those served are households headed by elderly or disabled persons.
Despite a difficult housing market in much of the State, the California PHAs and the State have been generally successful in ensuring high utilization. The Statewide average utilization rate is 96 percent. And for the piece that the State administers, we currently have a 95 percent utilization rate.
However, the State does face many challenges. We are, as I'm sure you're aware, home to 18 of the 25 highest cost housing markets in the country. In these areas, rents have been rising at double-digit rates for several years, and vacancy rates are well below 5 percent.
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When combined with the low production of new housing units during the 1990s, these factors make it difficult for voucher holders to identify housing at the prescribed program rents in high cost areas. However, our single biggest problem with the HCV program in California is woefully inadequate funding.
According to the 2000 census, only 17 percent of California's low-income households are actually assisted by the program.
In regard to HANF, the Davis administration is concerned that the legislation would eliminate the existing commitment to fully fund all authorized vouchers and accommodate renewal costs at the real rate of growth in rents.
In my view, this is the single most problematic feature of the proposed legislation. As you know, under the current system, Congress is committed to renewing all existing vouchers, with an annual adjustment in funding that accounts for increases in program costs and rents.
This system ensures that the number of families served does not decrease over time, and it is designed to empower program participants by paying a fair market rent for housing.
HANF would substitute this system of safeguards for one that would simply block grant funds to participating States, with no specific commitment for renewal funding or annual increases.
In the past, Congress has utilized the CPI or other like indices to facilitate annual adjustments for other similar state block grant programs. Using CPI for this program would be a disaster for the people of California.
According to the Center for Budget Policy and Priorities, over the last several years rents nationwide have increased at a rate equal to more than twice CPI. In California, where housing costs are the highest in the nation, the gap between annual rent increases and CPI is likely to be even greater.
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HUD's own annual adjustment factors for project-based Section 8 in California indicate annual increases three to four times CPI in the past year.
If program funding does not keep pace with rents, the number of Californians served by the program would steadily decline over time. The only way to offset this erosion in program funding would be to target the program to higher income families or to require participating families to pay a larger share of their income for rent, actions that the Davis administration does not support.
The program funding mechanism prescribed by HANF also would appear to preclude the possibility of future incremental voucher funding, something that is desperately needed in California.
By wiping out the Congressional commitment to fully fund voucher renewals and account for real program costs, HANF would, in my view, seriously undermine the Housing Choice Voucher Program.
It would eliminate one of the program's most valuable features, its focus on serving extremely low income families, and it would create unacceptable hardship on participating families by substantially increasing their rent burden.
There are many other ways to improve the current program without sacrificing this assured funding.
I would join others who have advocated for funding for mobility counseling and assistance programs for voucher recipients; funding for aggressive landlord outreach, service and incentives programs wherein PHAs continuously recruit new landlords to participate in the program, and importantly, regional collaboration, something HANF does contemplate, or regional administration of the voucher program to help address administrative barriers to portability.
Thank you very much for this opportunity.
[The prepared statement of Matthew O. Franklin can be found on page 478 in the appendix.]
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Chairman NEY. Thank you.
Chairman NEY. Mr. Smith.
STATEMENT OF DONALD J. SMITH, EXECUTIVE DIRECTOR, HOUSING AUTHORITY OF THE CITY OF LOS ANGELES
Mr. SMITH. Good morning, Chairman Ney. Welcome to Los Angeles.
Congressperson Waters, thank you and Chairman Ney for bringing the important work of the Congress to our city.
My name is Don Smith, and I returned to be the executive director here in 1994. In 1975, I was the responsible manager for starting the Section 8 program at the Authority.
Since the initial 1,500 certificate allocation, the program has tried to keep pace with the increased need for decent and safe housing. 70,000 households are on the waiting list, with 4,000 new households registering each month. 50,000 allocated Section 8 resources meet only a small portion of the desperate needs——
Chairman NEY. Move the microphone just a little closer.
Mr. SMITH. Sure—the desperate needs of these very low income and low income families seniors and the disabled.
Just as the housing authorities in Ohio work closely together, so do we in Southern California, with programs tailored to meet local markets, local governments, and most importantly, close to the needy people we serve.
The administration's HANF proposal, and you have heard most of the arguments in your hearings, promises to ease monitoring through 50 States, rather than 2,600 Section 8 providing local housing authorities.
The proposal seems directed at the increasing outlay of the program. It would also give the States new policy and program flexibility. We do understand that it would have discretion on subcontracting.
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If I believe the program is broken at the service delivery level, I would support looking to a realignment of efforts to effectively house very low income housing persons. I do not believe that to be the case.
Lease up in Los Angeles is 99 percent. This success is based on partnerships with 17,000 owners and numerous owner associations, which has resulted in more units being made available and in good condition.
We support voucher holders with trained staff, other partner agencies and nonprofits in both their search and self-sufficiency and needs.
Following earlier models like Project Build, we learned to integrate housing supportive services and job training to add value to the future of these families, hopefully we will continue to improve our support of voucher holders in their difficult task of securing decent homes.
Besides continued operational improvements internally in the housing authority, how can we improve the program?
Let me give just one brief example. This is a market-driven program and needs market flexibility, especially as the markets tighten and rents spike. When HUD reduced the basis for the FMRs to the 40th percentile in a declining vacancy market, followed by an unwarranted 14 percent cut to the FMR, it caused a long-term disruption to voucher holders and contributed substantially to the increased failure rate.
Rent setting flexibility could have made a huge difference. No immediate rent mechanisms were available. By the time we had succeeded in HUD's lengthy approval process, the market and thousands of opportunities for voucher holders were gone.
And finally, HANF seems like an idea whose time has not come. In the interest of continuing to serve local families, the elderly and the disabled, I urge you not to adopt the HANF proposal and to continue working with local jurisdictions and housing authorities directly.
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On behalf of the Board of Commissioners of the Housing Authority, as Chair, Ozie B. Gonzaque, I want to thank you for your careful evaluation at the hearings on this program. Thank you.
Chairman NEY. Thank you, Mr. Smith.
[The prepared statement of Donald J. Smith can be found on page 518 in the appendix.]
Chairman NEY. Mr. Jackson.
STATEMENT OF CARLOS JACKSON, EXECUTIVE DIRECTOR, LOS ANGELES COUNTY COMMUNITY DEVELOPMENT COMMISSION
Mr. CARLOS JACKSON. Good morning, again.
Yesterday I had the opportunity to testify on the Community Development Block Grant program and the importance to Los Angeles County.
Today I'd like to really again express the importance of housing and impose the burden on the Federal government to deal with the real major crisis in Southern California.
Therefore, I'd like to cover three areas in my testimony. One is to talk to about this legislative proposal. The second one is to discuss the proposal to cap and restrict Section 8 administrative fees, particularly how it's detrimental to managing public housing and also some of the things that we have done to make Section 8 a success in Los Angeles County.
First of all, we administer 20,000 Section 8 vouchers in Los Angeles County. We—on behalf of six small public housing authorities, we manage their programs as well. We are the fourth largest local administrator in managing Section 8.
73 percent of our voucher holders are below 30 percent of area median income area. 24 percent are at 30 to 50 percent. So you can see that we're dealing with extremely low income residents.
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As Don mentioned, one of the key areas are our landlords. We have partnership with over 100—I'm sorry—10,000 property owners in our program.
I'd like to announce as of yesterday, we are leased up 100 percent. We exceeded our annual budget authority by a few percentage, because again recognizing that this is a real tight real estate market, and rents are continuing to increase.
Just for your information, in California there are over 300,000 vouchers. Between the city and the county, we administer 14.4 percent of those vouchers in the State.
I'm sorry. Let me back up again. There's 300,000 vouchers in the State, which represent 14.4 percent of the nation's total. Between the county and the city, we represent 22 percent of the State's vouchers. So you can see that again, there is a major clientele in Southern California.
There was reference to rent. The market rent for a two-bedroom unit in Southern California is $1300. The fair market rent that we are allowed to operate with is $967, and the gap continues to grow.
Our vacancy rate in LA County is 4 percent, less than 4 percent. And the median price to purchase a home is over $300,000, where only 36 percent of the families in Los Angeles County can afford to purchase a home. So that number continues to increase over the period of time.
As a local administrator when the proposal came out, my question: Was why? What is happening to stimulate this kind of a legislative proposal? It just doesn't make sense.
Over the past years there have been gallant efforts made to lease up to 100 percent. There is a great need at the local level. I do not see inefficiencies, ineffectiveness.
What I see is a great local partnership between landlords, tenants, the community and public agency to make this a real successful program, this in spite of all the real estate market conditions in Southern California.
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It is very hard to penetrate the rental market, but there is a real sincere interest on the part of landlords and property owners to participate in the program.
To transfer it to the State would remove their ability to interact locally, and I would feel that they would be more isolated and alienated from being a good partner at this particular time.
It would be very logical and very business like for them not to participate today. They could get more rents on the open market than participating in our program.
But I have found out that there are quite a few landlords that are very sincere and have a commitment to the local community, and they want to participate and be part of the overall effort of providing affordable housing in Southern California.
The other side on the performance issue is that lease up nationwide has increased. There has been much attention throughout the country to make this an ongoing successful program. So, therefore, I don't see why there is a need to change to this level.
I would also think it would be very harmful to the program to try to think about transition during a time when many of the successes are occurring today. How long would it take to transition the program from the Federal level to the State level, particularly in times where many of the State are facing fiscal crisis?
As you might be well aware, in the State of California the deficit is at $38,000,000. And today we still do not have a State budget for local government.
So to think about the most meaningful protocol for affordable housing in a local community and to debate this at this time, I think is not right. And that's why what I was saying early on. It just doesn't make sense.
Chairman NEY. The time has expired. Would you like to just summarize it and put most of your comments in the record?
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Mr. CARLOS JACKSON. Well, one of the reasons we're—I mean what we did to lease up to 100 percent, we had to go back and revamp our program, really look at streamlining things that we were doing that should not have been done, things that we could improve. But one of the most critical factors that we had was just to listen to landlords and determine what aspects of our program we could improve so they could feel comfortable and gain confidence in our ability to work with it.
And I thank you for the time.
Chairman NEY. Thank you, sir.
[The prepared statement of Carlos Jackson can be found on page 488 in the appendix.]
Chairman NEY. Mr. Triesch.
STATEMENT OF LARRY TRIESCH, ASSISTANT DEPUTY DIRECTOR, LONG BEACH HOUSING AUTHORITY
Mr. TRIESCH. Thank you, and good morning, Chairman Ney, Congresswoman Waters.
I'm the Deputy Executive Director of the City of Long Beach Housing Authority. And I'm honored to have been invited to speak before you. And I'm pleased that you are seeking testimony with regard to the proposed block renting of the Section 8 program.
The need for assisted housing in Long Beach is great. Of our 163,000 households, 25,000 of them are at 30 percent or less than median income.
Our housing authority provides vouchers to a little more than 6,000 of these households. And many others are housed in privately owned, but publicly subsidized units. But there are still thousands of very low income households in Long Beach who are in need of housing assistance.
As an anecdote, we recently opened our waiting list, and when, after presenting information on the application process at our local Cambodian community center, an older gentleman came up to me and asked: ''What if four families are all sharing the same house? Should they all put down the same address as their place of residence?''.
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To me that expresses the need for assisted housing better than a book full of statistics. And by the way, we did receive approximately 15,000 applications for the waiting list. So there is a tremendous need.
We are a successful housing authority. We are 100 percent leased up. In fact, I got a report from my accountant yesterday, we're 101 percent leased up, which will cause me another problem, but that's not a bad problem.
We are a high performer, according to the SEMAP scoring. We are always looking in ways—looking for ways to make our service more efficient and more attractive to the landlords, who are the one critical element to our program.
Because we operate at the local level, we are able to partner closely with the apartment association, California Southern Cities, with our local Legal Aid Foundation, with the Fair Housing Foundation, just to name a few organizations.
Because of partnerships such as these, we can provide good service to both our landlords and to our participating families. So we are very concerned that the proposed block granting of the Section 8 program could seriously impact the delivery of housing assistance to the families most in need.
Two critical issues come immediately to mind, and you've heard these over and over again, and this morning as well. Number one, the program would no longer be a cost-driven program, but would become, instead, just a number, a dollar amount that could easily be reduced in tough times or not increased to keep up with the actual cost of housing.
The second issue is just so obvious. If the State becomes the grantee, there is no way to know how the State will deliver the services. Will the State contract with the city of Long Beach Housing Authority?
Will the State contract with the larger regional entity? And then what would happen to all the goodwill and the relationships built up at the local level to support landlords and the people we serve?
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And finally, as I understand it, one of HUD's stated goals is to end chronic aimlessness within 10 years. I think it's important to understand, as my friend Steve Ranahan, from the Housing Authority of the City of Los Angeles likes to say, that the Section 8 program prevents aimlessness.
Most of the people that we serve are just one step away from being without a roof over their head. Each family we serve is given the chance to live in dignity, to live in a stable situation, where the kids can go to school and come home and have a place to do their homework.
Each elderly person on SSI that we serve will have enough money through the month to purchase food for each meal.
I know that there is a concern that the program is expensive. But if we want to help people pay the rent, I think the program will be expensive. I think there are ways that we could reduce the administrative costs a bit, given a bit of administrative leeway, regulatory leeway at the local level.
I think that we could cut some administrative costs. I have examples. These are sorts of nuts and bolts that came out of my staff. For example, if we enacted a legislation—enacted a provision that would not allow landlords to increase their rent more than one time a year, we would serve energy and costs and money.
If—currently we put landlords in abatement after 30 days when they fail to comply with our HQS requirements. If we said ''In 45 days, if you do not comply, the contract is terminated,'' we would save energy and we would save money.
I think that the elderly should be recertified once every two years, rather than every year. And I think that we should tie the inspection process to the annual recertification process.
I think that we should get rid of the 40 percent affordability limit. Let people make their own choices.
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There's lots of areas like this where we could work the program and save money administratively.
In conclusion, I ask that you don't fix a program that really isn't broken.
Thank you for the opportunity.
Chairman NEY. Thank you very much.
[The prepared statement of Larry Triesch can be found on page 548 in the appendix.]
Chairman NEY. Mr. Burger.
STATEMENT OF EUGENE BURGER, PRESIDENT, EUGENE BURGER MANAGEMENT, ON BEHALF OF THE NATIONAL LEASED HOUSING ASSOCIATION
Mr. BURGER. Chairman Ney, members of the subcommittee, my name is Eugene Burger. I'm President of Eugene Burger Management Corporation.
We represent some of the tenants here. We've worked with a lot of the housing authorities and PHAs around the area right here in Los Angeles.
Today I'm representing the National Leased Housing Association, whose members include both owners and managers of Section 8 housing, as well as housing agencies that administer the Section 8 voucher program.
We appreciate the opportunity to testify on H.R. 1841 administration's block grant or HANF program. We urge the subcommittee to reject H.R. 1841. This is an unnecessary reform, because the Section 8 voucher program works quite well in its current form.
In fact, the Section 8 subsidy has provided much needed rental assistance to low and moderate income tenants so they can live in safe and decent housing.
I would like to discuss two important points regarding the administration's proposal: The effectiveness of the current system and utilization of the Section 8 vouchers. We feel that it isn't broken, and if it isn't broken, we don't need to fix it.
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However, under HANF, the State would receive block grant funds from HUD to fund Section 8 vouchers. The State may, but is not required to subcontract with housing agencies or other entities within the State to administer the block grant funds. Thus the State could choose to use these funds for other than housing purposes. Meaning that the public housing agencies would receive less funding than needed to administer the Section 8 vouchers.
In a State such as California, where there is a substantial budget shortfall, it's highly likely that the block grant funds will be diverted to other programs at the State's discretion.
And, because HANF provides that funding for Section 8 vouchers in subsequent years is tied directly to the amount of funds used the previous year, this diversion of block grant funds could, over a period of years, cause the public housing authorities to lose their funding for Section 8 vouchers altogether.
Thus, we believe that block granting of Section 8 funds to the States could have disastrous results for affordable housing, and could have the long-term effect of eliminating Section 8 vouchers.
HANF will only serve to widen the gap between the need for affordable housing subsidy and the amount of subsidy available. Again, the current system of delivering the Section 8 funding administration program is working fine.
Utilization of the Section 8 vouchers in high rent areas, such as Los Angeles, we are somewhere in the 95 percent range right now. And if I heard correctly, we're getting close to 100 percent right now. So I think that that delivery system here is working very well.
One of the important benefits of Section 8 vouchers is their portability feature. In theory, a Section 8 voucher issued by a public housing agency in Los Angeles to a low income family can be taken to any rental property, so that the family can live wherever they choose.
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This is a laudable goal, albeit unrealistic goal, due to limits imposed on the value of the Section 8 voucher. The reality is that FMR-based rent and the value of the voucher relegates the family to lower rent areas.
And one of the things that we haven't talked about so far in this is, whether we like it or not, in California a number of properties are being converted from affordable housing to conventional housing.
The vouchers are allowing a smooth transition in that respect. We are able to negotiate with local housing authorities for an annual period to carry over those tenants who are in place now and give them an annual—a year to find new housing, where they can take their vouchers. That's a very important feature that is currently in need of.
The payment standards set by housing agencies are tied to the FMR. However, HUD established fair market rents are often not reflective of real market conditions, especially in places like Los Angeles where rents continue to rise.
HUD has taken steps to rectify this situation in recent years by providing higher FMR's in certain markets, but often the FMR rents lag behind the actual rents in the area.
When you compare actual comparable market rents to FMR's in high rent areas, you realize that the FMR's are not fair market. The result is that the voucher payment standard limits the value of the Section 8 voucher, which does not cover the owners' prescribed rents, which is based on actual rents.
Ideally the housing agency should be able to set a payment standard relative to market rents in the area served. However, if the FMR standard is to continue to be used, PHAs should be able to set the payment standard at whatever percentage of FMR is necessary to accommodate that.
Currently, the PHAs are allowed to go 110 percent and 120 percent over with HUD approval.
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In conclusion, HANF does not address the utilization of Section 8 vouchers and does absolutely nothing to improve the mechanism for delivery of the funding and administration of the Section 8 voucher program.
On the contrary, by block granting the Section 8 voucher funds of the States where they are vulnerable to be siphoned off to fund state budget shortfalls, HANF stands to place the future of Section 8 vouchers in grave doubt.
As mentioned, the current delivery section is alive and well, and we think it should be continue to be used that way.
And I would support the idea of looking at some flexibility in the 40 percent cap rate. Also going to a move-in now for a new tenant. Give them 30 days. If there's an HQS problem, then fix it in 30 days or cut off the funding.
Those are some of the things we could do. Thank you.
Chairman NEY. Thank you for your testimony.
[The prepared statement of Eugene Burger can be found on page 470 in the appendix.]
Chairman NEY. Mr. Shelton.
STATEMENT OF TOM SHELTON, CPM, GREYSTAR REAL ESTATE PARTNERS, AND PRESIDENT, NATIONAL APARTMENT ASSOCIATION, ON BEHALF OF NATIONAL MULTI HOUSING COUNCIL
Mr. SHELTON. Chairman Ney, ranking member Waters, my name is Tom Shelton. I'm a partner of Greystar Real Estate Partners, one of the largest privately held apartment firms in the country.
In addition to that, I'm also the 2003 President of the National Apartment Association and a member of the National Multi Housing Council.
Our combined memberships are engaged in all aspects of the apartment industry, including development, ownership, professional management and finance.
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It is my pleasure to testify on behalf of both organizations. NAA and NMHC commend you, Chairman Ney, for your leadership, and we thank the members of the subcommittee for your valuable work addressing affordable rental housing in America.
We also commend HUD Secretary Mel Martinez and the current administration for their interest in improving the Section 8 Housing Program.
We too believe Section 8 is critical to meet the housing needs of low- and moderate-income families, and believe that improving the existing Section 8 program is a central part of meeting those needs.
Although it is well intentioned, we think the Housing Assistance for Needy Families Act of 2003, H.R. 1841, will not reduce the administrative cost to participating property owners, and will not maximize program benefits for residents, as it does not bring the program closer to conforming to conventional market practices.
My testimony will first focus on how the Section 8 program works in tight housing markets since barriers to program participation can be particularly formidable in large, high-cost areas.
For example, the Los Angeles City Council recently adopted an ordinance that effectively prohibits owners from terminating Section 8 leases, which in turn discourages them from joining the program for fear that they will not be able to opt out in the future.
If an owner chooses to terminate a Section 8 lease and convert that unit into a conventional one, for the following five years the owner may only collect the portion of rent which the former Section 8 resident paid.
Local property owners report that the new law has already contributed to a decrease in affordable housing stock, because they left the program in advance of the law's passage, and are not now signing new Section 8 leases.
Owners also say they are frustrated with local program administration, and cite as an example that periodic inspections are not scheduled at specified times, so owners must wait for hours to meet inspectors.
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We propose the following recommendations to improve the Section 8 program. First, we would like to see enacted a more efficient process for PHAs to apply for higher fair market rents that are more reflective of submarket rents.
We also propose to allow PHAs to raise the payment standard to 120 percent of FMR without HUD approval, and to request higher payment standards when necessary. FMR's must be set high enough to encourage owner participation, and, in turn, create a sufficient supply of apartments for voucher holders.
We thank HUD for raising the current FMR level to the 50th percentile in 39 high-cost areas. That level remains insufficient in areas with outdated FMR's and in high-cost submarkets.
In addition, we propose speeding up the move-in process by allowing PHAs to conduct individual unit inspections within 60 days after the resident moves in and payment commences.
PHAs could also conduct building-wide inspections in certain cases. Alternatively, PHAs could initially inspect a representative sample of units in order to certify that a building is eligible and conduct regular periodic inspections thereafter.
This approach would reward well-managed properties, allow PHAs to focus their scarce resources elsewhere, and all the while maintain resident safety.
Finally, we urge Congress to continue to fund the existing program structure administered by HUD. Effective this year, Congress enacted changes to minimize recapture, and moreover, national utilization rates have risen to nearly 96 percent. That success should be recognized and the process supported.
NAA/NMHC believe that the existing, successful appropriation structure, while not perfect, is working. We have considerable concern about the complexity of the proposed state level funding structure contained in H.R. 1841.
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I thank you for the opportunity to testify and wish to offer our assistance to the subcommittee as you continue your important work to improve affordable housing opportunities for low- and moderate-income families.
[The prepared statement of Thomas K. Shelton can be found on page 512 in the appendix.]
Chairman NEY. I want to thank all the witnesses for your thoughtful and good testimony.
I have just a few questions. First would be directed to Mr. Franklin and to Mr. Jackson.
Is there any merit to regionalizing Section 8 vouchers? Would there be any merit to the administration to regionalize versus a block granting to States?
Mr. FRANKLIN. You know, I would certainly concur with much of the testimony today, as to the value of the local PHAs being the front lines.
I really do think the PHAs are doing a good job. In California, they have made tremendous progress and, at its core, Section 8 is a local program. However, I do believe that regional collaboration and cooperation could be a very smart approach to deal with some of the kind of sticky wickets here—most particularly, the utilization rate issue.
Currently there is discussion about moving vouchers between States; taking away from those who aren't using them, giving them to those that are.
This has to be considered long and hard to make sure there aren't unintended consequences. But when you look at the performance on the regional level—and we ran some numbers, looking at the local authorities' utilization rates and combining them to get a county average, and the average county utilization rates looked very good, although an individual PHA may not be performing as well.
Many are virtually right at 100 percent utilization, which shows, as you might expect, that housing markets are not necessarily consistent with city boundaries. You do need that cooperation across city boundaries and on the regional level.
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So I do think there be could some real potential in that area.
Mr. CARLOS JACKSON. I support the same notion. To some extent we are already doing regional administration at the present time.
We administer six, six small cities public housing, I'm sorry, the Housing Authority Section 8 Program. And we found that you can reduce and streamline the administrative process and have cost saving there, as well as developing a good working relationship with the landlords.
I would support maybe almost to the extent, if you look at parallel to the community development block urban county side, where on behalf of small cities, we are administering their program. So there are streamlining measures that could be undertaken.
Chairman NEY. Thank you.
Mr. Smith, you mentioned about the voucher utilization rate. How did LA significantly increase its voucher utilization rates from low to very high? I'm just trying to see what lessons we can learn from LA.
Mr. SMITH. Well, we applied a complete reorganization. We did have to add staff. We added about 20 percent of our total Section 8 staff and reorganized them along the lines of supporting the residents in their search and owner outreach and streamlined the process of issuing vouchers the same day, in terms of verification, and a wide variety of approaches that were more responsive to the market.
We formed what's called TESS, Tenant Empowerment Support Services, probably the best thing we ever did, because to actually go out with the tenants when they are negotiating the leases is a difficult task and worked particularly well between the leases—between the owner and the voucher holder.
We conduct extensive orientations for owners on a regular basis. Every Saturday there is usually a lot of owners at the housing authority learning about the program. And we are very aggressive in terms of outreach to the owner associations.
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It's important to understand, in the City of Los Angeles of the 17,000 owners I mentioned, 16,000 of those owners are mom and pop owners. So you really have to do a lot of outreach, a lot of educating because they rely on their rent income on the 1st of every month to make their mortgages, keep up their property, pay their people.
Chairman NEY. Thank you.
Mr. Burger and Mr. Shelton, you both are basically saying the current system is working. How would we make improvements to serve the community, more particularly in light of tight Federal budget environments, any other areas?
Mr. BURGER. I think we mentioned a couple of them in making the system more efficient, and at the site level down at the PLA level I think we need to use that money more effective than we have. I'm not sure that we need to increase all that much the funding to PHA level, particularly if it's not all being utilized. We need to use it better obviously.
And I think that it's important that we do look at the gap rates and look at the percentiles. I think we need to move the percentile up a little bit to areas like Los Angeles, that type of thing.
Chairman NEY. My last question, Mr. Triesch. What about—what problems do you encounter when you're overleased, and how does HUD work with you on that issue or do they or how do they?
Mr. TRIESCH. It's a bit of transition right now. To this point in time we could be overleased, if we had budget authority to be overleased. With the new regulations that have just gone into effect, as I understand it, we can no longer do that.
I can be 101 percent overleased this month as long as by year end I am not overleased. So my target is to be as close to 100 percent as I possibly can be at the end of my fiscal year. Our accountant works well with the HUD administrative financial staff. We have a good working relationship with them.
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Chairman NEY. Thank you.
Mr. TRIESCH. My goal is to be at 100 percent even Steven, assuming the max—serving the maximum people that can be served in the city of Long Beach.
Chairman NEY. Okay. Thank you.
Also I asked a question—never gave Mr. Shelton a chance to answer. I'm sorry.
Mr. SHELTON. I was going to agree with Mr. Burger. I'm certain there are areas where the budget could help, but I think our primary objective in administering Section 8 at the site level is to make it as transparent as we can and as comparable as we can to how we treat regular market rate units.
Additional provisions make the process somewhat cumbersome. Anything that can be done to make the leasing process itself at the site level as easy as possible, I think would encourage more participation from our members and owners.
Chairman NEY. Thank you.
Congresswoman Waters.
Ms. WATERS. Thank you very much, Mr. Chairman.
One of the reasons I'm so pleased that you're here is because you will have an opportunity to understand what is happening here in California, and in the Los Angeles area in particular.
You have seen some of the information that was shared with you on the testimony of the cost of housing and the escalation of price that has taken place and continues to spiral upward, so that you get a real sense of what we are confronted with here.
Also, I'm very pleased that, you know, for once perhaps in many of the hearings that we have we are all together on this. I mean we have all of our associations, our owners, our PHAs, everybody singing from the similar hymn book, and that's good, that's very good.
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We are all opposed to this idea of block granting. So what we need to do is what I think you have already come to understand is: How do we use this as an opportunity to straighten out a few of the wrinkles in the program? How do we come back with an alternative to this block granting and talk about what we can do to better serve all of our clients who need us so desperately?
And I'm also interested in working out some of the problems of the owners and the landlords. I think that's extremely important.
Now, you had some ideas, Mr. Triesch. You gave us a few recommendations. Would you kind of reiterate what you said to us in your recommendations?
Mr. TRIESCH. I sat down with staff yesterday afternoon, and I asked them: How can we really streamline administration of the program? And these just were ideas that came from brainstorming.
The first one was that we could enact a provision that limited landlords to just one increase a year. I'm sure that typically the Congressperson doesn't know what we have to go through when a landlord requests a rent increase.
If it's—we have to do an inspection of the property, if one hasn't been done within 120 days of the increase. So if somebody waits six months after the last one, we have to do a whole new inspection again.
Ordinary we have to do an amendment to the contract. We don't have to do a new contract, but the whole thing is time consuming. And if we limited just landlords just once, let them know up front you only get one a year, then I think that it would be a cost saving.
Ms. WATERS. Thank you. Would you hold that for a moment here?
Chairman NEY. That was one point I wanted to talk about. I just wanted—how many times can they—in a normal lease I've ever had when I rented, it's you get one shot per year, or sometimes you don't get a shot until the lease is done.
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How many times a year can people do it?
Mr. TRIESCH. The way the program is set, we are allowed to enter into a lease—well, in Long Beach what we do, and I think most of us probably, initial lease for a year. After the initial lease for a year, we just follow California State law. It goes from month to month.
When it goes from month to month, by California State law, an owner can request a rent increase every month if he wanted to.
Chairman NEY. And Section 8 they can do the same thing?
Mr. TRIESCH. Well, we require 90 days, a 90-day notice. So they have to give a 90-day notice, every four years if they wanted to.
And we get them typically to—especially right now when costs are spiralling and the landlords are getting more and more rent.
Ms. WATERS. All right. Let me hear what the landlords think about that.
Mr. BURGER. Being a landlord, from my standpoint, once a year will work just fine for me. Actually, it will. We have to go through a lot of hoops also to make that application. And if we can do it once a year, we could work it.
Ms. WATERS. Mr. Shelton.
Mr. SHELTON. I'm not sure so I'm in agreement with Mr. Burger about the once-a-year-rent increase. I think—however, I think there is some sense that can be made, particularly in high cost areas where rents continue to escalate.
I would remind you, too, that a lot of the apartment markets across the country are not in the same financial situation that California or New York or South Florida is where the markets do pretty well. There are markets that we operate in that apartment owners are facing significant losses, vacancies are high, and occupancies are down and rents are down.
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So I think that we just need to be—the key to me, I think, is communication, working with the local housing authorities, and I think some of those issues could be resolved.
Ms. WATERS. We really are interested in eliminating bureaucracy and streamlining the process, because I hear from both the tenants and landlords that it's too cumbersome in various ways. So we are—we are interested in your recommendations about how to do this so that the tenants are not hassled, and the landlords get as fair price as you can get, and it's done in a way that does not cause long waiting periods, et cetera. That's how I think we ought to use this time.
You know, the administration threw this out here, and we need to come back with something other than block granting where we can show we're all together. And I think we ought to be able to do something very positive about it.
What was the second one?
Mr. TRIESCH. The second one—you know, I'd like to say, you know, we might do well to get an organization, like NARO or FADA, to get a bunch of executive directors together to brainstorm, they could come up probably with a lot of good ideas for streamlining the program.
But the second one was with regard to the abatement process and inspections. Now, when we inspect, if the unit fails, they have 30 days to correct the deficiencies or it goes into abatement. If they don't correct it within the 30 days, then they have until the end of the following month, and we terminate the contract.
But we just said if they have 45 days to correct the deficiency or the contract is terminated, then you're going to be saving the time of multiple inspections, for example.
Ms. WATERS. How does that comport with state law that allows for deducting repair? I mean what happens here when, for example, if you gave 45 days, the tenant says ''I've got a problem here, and they said, ''I can't wait. I'm going to do it myself, and I'm going to give you the bill,'' how does that work or does it work?
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Mr. TRIESCH. I don't think I could address that.
Ms. WATERS. Don, do you know?
Mr. SMITH. Well, my feeling is, based on experience, that we intervene so rapidly, in terms of tenant complaints, and we have a good relationships with most owners, that that issue of inhabitability doesn't come into play, only in those cases where we abate, and the situation is not resolvable, that may come into play.
Ms. WATERS. Okay. Well, let me ask you—and this will be the last question—you have mom and pop—a lot of mom and pop landlords. I think you said the overwhelming number of participants in the program are mom and pop.
What do we have that assists mom and pops in capital costs for the upkeep and repair of property? Low cost loans?
Mr. SMITH. There are rehab loans available through the city and most local jurisdictions have repair loans, I think.
Ms. WATERS. At low interest rates?
Mr. SMITH. Some are at low interest rates. Although compared to today's market, they may not be adjusting as rapidly.
Ms. WATERS. Well, if we have—the majority of our participants are mom-and-pop operations, people who own 40 units——
Mr. SMITH. Basically 10 units and less, over 16,000 owners.
Ms. WATERS. Have you found that there's a problem when their capital costs, like putting on a new roof or repairing a staircase, I mean capital—are they able to do it and get it done on time?
Mr. SMITH. If they get adequate rents over a significant period of time, they are able to amortize. But they are not generally able to get it immediately.
Ms. WATERS. Okay. Are they able—they are able, not able to. That's a problem we need to look at?
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What are you finding, Mr. Jackson?
Mr. CARLOS JACKSON. Well, the question you were asking is a real challenging one in that you have to have—well, many of the cities that we are operating in have an agreement with Section 8 and their own programs, and it's really a local decision there. For the unincorporated areas we do have limited rehab money that we predominantly give it to the homeowner who is living in the unit. We have emergency grants for roof repair, but not really rental units.
Again, you look at the tier of priorities, we have a lot of seniors asking for emergency grants right after a rainstorm or like that.
We've done a lot in terms of campaigning to do our lease up. One of the things that we did was to sit down and look at the entire process and ask on each step: Does it make sense? Do we need to do this?
And during that process we also had a lengthy discussion with landlords as to where were the common areas of agreement and where were the differences so we could focus on those areas.
For example, one of the—one of the areas was landlords say it would take us too long to return the contracts. Well, when the inspector went out to conduct the inspections, we would have them take the contract and meet the landlord at the site at the same time for signature.
Through that process we found out that there is whatever we did we couldn't get a landlord to sign an agreement, with all the rents have been agreed to, everything has been agreed to, all we needed was the signature, we found a small group of landlords that were procrastinating.
But we—the inspections, again, we made some determinations on the housing quality standards. There are some things that we could say, ''Look, give them 30 days to rectify and let them move in in the meantime.''.
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Again, if the unit remains vacant, it's lost income to the landlord. We were trying to accommodate those different kinds of things.
We had large orientations for tenants, counseling them about when you go out to an apartment, what to look for, housing counseling services, groups that will help the tenants go through the screening process.
Many of the things that will cost money—with the Department of Public Social Services we have data sharing, again so that we could streamline the information that has to be collected. And one of the things that should be done is we should be able to share data between agencies. That's a stumbling block right now.
We don't know if someone goes to a housing authority and gets rejected, and we go through the same process. It's a costly venture.
Ms. WATERS. Thank you. Thank you very much.
Chairman NEY. I want to thank all the panelists for your testimony. Thank you.
And we will move on to the second panel.
[Recess.]
Chairman NEY. The subcommittee will come to order. We want to welcome panel 2. And the order is Chanda Peters, a voucher recipient of Los Angeles; and Leona Thompson, a voucher recipient from Los Angeles; Mr. Beverly Martin, voucher recipient—or voucher program owner—I'm sorry—of Los Angeles; Larry Gross, Executive Director, Coalition for Economic Survival, Los Angeles; John Jackson, head organizer Los Angeles ACORN; and Jeff Farber, Chief Operating Officer, LA Family Housing Corporation of California; and Ruth Schwartz, Executive Director, Shelter Partnership, Incorporated, Los Angeles.
We have a timer. So when you hear—you'll hear two beeps, and then another beep, and that's the five minutes. But without objection, any additional testimony you have for the record will be submitted.
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The five minutes is simply to try to make sure everybody gets their say in. So we'd like to make it longer, but then we'll have questions and you'll be able to respond.
So with that, we'll begin with Ms. Peters. Okay.
STATEMENT OF CHANDA PETERS, VOUCHER RECIPIENT, LOS ANGELES, CALIFORNIA
Ms. PETERS. Good morning, committee members. I want to thank you for the opportunity to present to you my personal testimony on this very important issue, Section 8 Housing Assistance Program and the Family Self-Sufficiency Program.
These two programs have not only changed my life, but also my children's lives dramatically for the better. My grandmother moved into the Eastchester Gardens Housing developments located in the Bronx, New York in the early 1950s. My mother grew up there, and I also grew up there.
Due to my mother's illness I, an only child, was raised on welfare, so our life was not easy. After an extremely abusive marriage, I left New York with my three daughters and moved to Los Angeles, where I started my life all over again.
With very little money, no job and having to start all over again, I had to get on public assistance. First I got on welfare, and then I signed up for the Section 8 program, because I simply could not afford to pay rent, utilities, the high cost of childcare, et cetera.
Then one day I received an invitation to participate in the GAIN program, Greater Avenues for Independence, where they pay for your school tuition, books, supplies, travel, and, most importantly, your childcare expenses.
I immediately signed up and registered at the Los Angeles Trade Technical College, where I took computer classes and office procedures. Shortly after I received another invitation to participate in the Family Self-Sufficiency Program, where they assist you with your career goals, such as providing you with educational development, technical, trade and vocational training, job counseling, as well as other services to help you become self-sufficient and eventually a homeowner. And again I did sign up for that.
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The Family Self-Sufficiency Program especially changed my life for the better because through their partnerships with other agencies I was able to utilize the facilities for studying and had access to their computers to do my homework assignments.
The job counseling was extremely valuable and it motivated me to reach my goals. To this day I still use those skills for interviews for promotions that I seek.
After completing GAIN I worked for temp agencies all over Downtown Los Angeles until I was hired permanently, and I have been employed ever since.
I can't begin to express to you how important these programs and others that help encourage, inspire and support needy families to live in decent housing and get out of a situation that may seem hopeless.
This is how my life has been since: I've utilized the tools and services needed to upgrade my computer and office skills, preparing me for the job market.
I completed a two-year GAIN program, and I'm now gainfully employed full time since 1997, no longer on public assistance of any kind.
I completed the Family Self-Sufficiency Program, receiving over $14,000. And I am now a proud homeowner of a beautiful two-bedroom, two-and-a-half bath townhouse located in Inglewood, California.
I have two daughters attending UCLA, studying law, and one daughter at UC Riverside, studying veterinary medicine. My youngest attends University High, and they all have very high self-esteem because of my example, where I always tell them to reach for their dreams.
I'm now employed with the Housing Authority of the City of Los Angeles as an eligibility interviewer, helping other families with housing assistance.
And my mother no longer lives in Eastchester Gardens. I have moved her here, closer to her loved ones, this year just a few months ago, breaking a family cycle of a public assistance.
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Every single day when I go to work and I return home—sorry—I'm so thankful. I truly enjoy my job, and I especially enjoy helping others.
It is my hope and prayer that these programs continue to assist other families to becoming self-sufficient.
Thank you for allowing me to give you my testimony, and I especially thank the Housing Authority of the City of Los Angeles.
Chairman NEY. Thank you for your wonderful testimony and a great story.
[The prepared statement of Chanda Peters can be found on page 505 in the appendix.]
Chairman NEY. Also, before we go on, without objection, for the record, we have a letter from Governor Gray Davis that we will submit for the record.
[The following information can be found on page 551 in the appendix.]
Chairman NEY. And with that, we will go to Ms. Thompson.
Ms. WATERS. Thank you very much, Mr. Chairman.
We need to know that the letter is a letter that's basically going in the same direction that we are all going in on Section 8. So we'll have that submitted.
Chairman NEY. Thank you.
STATEMENT OF LEONA THOMPSON, VOUCHER RECIPIENT, LOS ANGELES, CALIFORNIA
Ms. THOMPSON. Good morning, committee members. I am very honored to be here today, and I thank you each of you for this wonderful opportunity to share my personal testimony of how my life was transformed by the Section 8 Housing Assistance Program and the Family Self-Sufficiency Program. Excuse me.
As a recipient of these programs, I stand before you today as a self-sufficient individual, raising two sons in the heart of a very prominent Los Angeles community and helping others to achieve a level of independence that they possibly never imagined could exist.
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After separating from my children's father, due to unfavorable circumstances, I had to step out on a faith that would propel me into a better way of living and economic security. Not knowing which way to go, nor did my pride allow me to turn to my family members or relatives, I ventured out into the deep with nowhere to go, only a prayer of restoration would be my only consolation.
A dear friend availed herself to me, allowing me to move in with nothing, as she and her two children struggled as well. We shared a comfortable, safe and secure place to live, hearty meals and transportation. I became a welfare recipient and fully utilized each opportunity presented to me to make a better life for my children.
My friend told me about a program she was participating in called GAP. This program, like GAIN, provided childcare assistance, bus fare, money for books and school supplies, just to name a few.
With only a high school education and some college, I knew that this would be an excellent opportunity to sharpen my job skills and choose a professional career path that would lead to economic independence.
Shortly after enrolling in the GAP program, the Northridge earthquake rocked Los Angeles. Due to the extreme damage of the building that I lived in, I was able to receive an emergency Section 8 voucher, which initially was supposed to only last 18 months, but thank God for the funding, it was able to be granted longer.
I finally was on the road to self-sufficiency. With the housing assistance payment program I began to have extra money to save and do extracurricular activities with my children that was almost impossible to do prior.
And also with the Section 8 voucher program I was able to secure a two-bedroom, two-bath apartment unit, with a pool, jacuzzi, 1200 square feet, which I would not have been able to afford otherwise.
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I was informed about a new program that the housing authority was offering to clients who wanted to set further goals for themselves and graduate from all public assistance programs to become totally self-sufficient and homeowners, first-time homeowners. This program was called the Family Self-Sufficiency Program.
After mastering many office skills through vocational training I was able to secure better job positions and higher pay. By leaps and bounds I transcended from extremely low-income to well above the average low-income household within.
Within one year of participating in this program I surpassed the income limit to participate and financially succeeded in stabilizing my family's future.
I began to set aside money to purchase our first home. I received a check from the account that had been set aside for me while in the Family Self-Sufficiency Program. This was derived from the gradual increases in personal earnings that I received from my employment.
To date, I am in the process of purchasing a new home. And I owe a great deal of thanks and appreciation to the Housing Authority of the City of Los Angeles Section 8 program and the Family Self-Sufficiency Program for providing the resources and information, savings account and self-empowerment to rise above the elements that keep so many people in economic bondage.
My accomplishments since 1994: I received a certificate in medical assisting, a certificate in nurse assisting. I completed the GAP program. I've also successfully completed job trainings in medical front office, patient relations, and sales.
I've secured enrollment for my sons to attend college preparatory schools. I am currently an eligibility interviewer for the Housing Authority of the City of Los Angeles.
And I'm also enrolled in the PACE program at West Los Angeles College.
Chairman NEY. What do you do in your spare time?
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Ms. THOMPSON. I thank God every day for where he's brought me from, and I'm happy and content with who I've become. And I plan to continue to help others who wish to step outside of the parameters of substandard living to well above average living.
Thank you for affording me this great opportunity to share my testimony thank you housing authority of the City of Los Angeles.
Chairman NEY. Thank you for your testimony.
[The prepared statement of Leona Thompson can be found on page 546 in the appendix.]
Chairman NEY. Mr. Martin.
STATEMENT OF BEVERLY MARTIN, OWNER/LANDLORD HOUSING UNITS, LOS ANGELES, CALIFORNIA
Mr. MARTIN. Who wants to follow these two young ladies? Anyone out here?
During the last three years, my wife and I became owner/landlords in the Los Angeles area. This experience is relatively new to me, to us, after retiring from the Los Angeles Unified School District as a former school principal for 10 years, and as assistant superintendent my final seven years.
This self-chosen investment as an owner/landlord has been both invigorating and gratifying.
In a brief period I have owned a triplex, a 7-unit building, and a 29-unit building. All of these buildings are located in the South Los Angeles area, with the major concentration of my time being devoted to the 29 unit complex.
Of the 29 units, 24 of the units are occupied by Section 8 voucher tenants. I appear before you today as a strong advocate and staunch supporter of the current structure and operation of the present Section 8 voucher program.
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It is my understanding that legislation, via block grants to States, is being considered as an avenue for dissemination of funds for housing. I view this as a deterrent and another unnecessary layer of bureaucracy.
The concept would indeed bring a negative impact and could prove to be an impediment in providing assistance to those in greatest need of affordable housing.
As a resident of the State of California for 41 years, the State's financial and budget crisis has peaked in this state. This is a most inappropriate time to consider shifting these major housing responsibilities to the State of California. It would be devastating and would compound the present financial situation in California. Above all, the recipients, those to whom this service is intended, would suffer.
The current local administration of the Section 8 voucher program, though not flawless, is functioning extremely well in this city and the cliche of ''If it ain't broke, don't fix it'' is an appropriate statement at this time.
Last week as I read an article in a journal, a thought remained with me. In conclusion, allow me to share that thought with you, and I quote:
''Serious attention must be given to the awesome task, the awesome task of helping those who live below the poverty level, if we, as Americans, expect to maintain our image as a democracy.''.
This thought has great merit. I'm available to respond to questions and to convey my personal views and opinions regarding the current local administration of the Section 8 voucher program in the Los Angeles area.
Thank you, Mr. Chairman.
Chairman NEY. Thank you, Mr. Martin.
[The prepared statement of Beverly Martin can be found on page 504 in the appendix.]
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STATEMENT OF LARRY GROSS, EXECUTIVE DIRECTOR, COALITION FOR ECONOMIC SURVIVAL, LOS ANGELES, CALIFORNIA
Mr. GROSS. Chairman Ney and Congressmember Waters, thank you for the opportunity to offer testimony today.
I'm Larry Gross, Executive Director of the Coalition for Economic Survival. CES is a 30-year-old tenants' rights organization assisting tenants, including project-based Section 8 and housing choice voucher renters throughout the Southern California area. Many are here today.
CES also overseas a HUD Outreach and Training Grant to assist to tenants living in expiring Section 8 housing and buildings subject to HUD Mark-to-Market program.
I'm here today to express strong opposition to the Section 8 block granting proposal because we believe it will have a disastrous impact on the ability to provide affordable housing to low-income seniors and families.
Section 8 is a cornerstone of the Federal affordable housing program, providing vouchers to nearly 2 million households.
As with most government programs, there is room for improvement, but the voucher program is highly effective in providing needed housing assistance. One of its main problems is inadequate funding, which results in tenants waiting years to receive vouchers. And then once finally obtaining them, face losing them, unable to find landlords willing to accept the voucher within the time period allowed.
The Greater Los Angeles Area is facing one of the nation's most severe affordable housing crises. We can ill afford to take action which will further increase this crisis.
The block grant proposal will likely result in fewer Section 8 vouchers, when many more are needed. Block granting would eliminate the current structure where Congress adjusts funding each year to ensure covering all vouchers being used.
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With block granting, Congress may decide on funding that has no correlation to voucher use, and on not providing adjustments for increases in rent. This approach would lead to the funding erosion of vouchers over time.
Vouchers allow poor people to achieve a degree of less poverty and the ability to live in less segregated communities. Block granting would do the opposite. States could reduce the value of the voucher, that would make it more difficult to use the vouchers to move into neighborhoods with more opportunities, jobs, better schools and less crime.
States could direct vouchers to specific developments and limit voucher use to certain neighborhoods. Thus, we can likely see the creation of voucher ghettos and barrios.
States could also increase tenants' rental payments. Households could end up paying far more than 30 percent of their income for rent, a 30-year Federal affordable housing standard.
We are greatly concerned about the impact on tenants living in housing where a mortgage pre-payment or project-based Section 8 opt-out has occurred.
Los Angeles has the largest stock of privately-owned HUD subsided housing. There's nearly 25,000 units at risk due to pre-payments and opt-outs. Latest figures indicated that we've already lost 8600 units in the county and over 3500 units in the city. This is one of the highest rates of pre-payments and opt-outs in the nation.
Currently, tenants in pre-payment and opt-out complexes for the most part are provided enhanced vouchers, which protect tenants from rent increases and displacement. Enhanced voucher tenants have the right to remain in their units as long as it's funded; and owners are mandated to accept the enhanced vouchers.
Block granting threatens these protections because States wouldn't be required to issue new enhanced vouchers. A state might decide only to provide regular vouchers. And this could result in tenants having to pay higher rents, thus, forced to move, and owners would be under no obligation to accept the vouchers, resulting in tenant displacement.
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The City of Los Angeles has undertaken new initiatives to do its part to address affordable housing needs, such as creating a $100 million Housing Trust Fund and adopting a preservation program to address pre-payments and opt-outs.
These significant local actions assume a certain level of support and commitment of funding on the Federal level. Block granting would likely undermine LA's affordable housing efforts. Locally, affordable housing advocates have developed an effective working relationship with the Section 8 division of the city's housing authority.
Together we've been able to identify problems, develop effective approaches to deal with those problems, and implement programs to benefit tenants.
This relationship would be placed at risk to block granting, which limits administrative costs to 10 percent of the State's total funding, yet adding administrative responsibility.
In conclusion, we strongly urge that the Section 8 block grant proposal be firmly rejected. It would only bring increased hardship to our nation's low-income households, who are in dire need of securing affordable housing.
Thank you again for giving me this opportunity to provide you with the views of the Coalition for Economic Survival.
Chairman NEY. Thank you.
[The prepared statement of Larry Gross can be found on page 482 in the appendix.]
Chairman NEY. Mr. Jackson.
STATEMENT OF JOHN JACKSON, HEAD ORGANIZER, LOS ANGELES ACORN
Mr. JOHN JACKSON. Good morning. My name is John Jackson. I'm the head organizer for Los Angeles ACORN; and we'd like to thank subcommittee Chairman Bob Ney for holding these field hearings, and also to just salute Maxine Waters—Congressman Maxine Waters who has been there on the 1,001 issues that we hold near and dear to our hearts.
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ACORN is the Association of Community Organization for Reform Now is the nation's largest organization of low- and moderate-income families in the country, with over 150,000 member families, as well as 700 neighborhood chapters, in a 51 cities across the country.
Since 1970, ACORN has taken action and won and worked on issues of concern to our members. Our priorities include: Better housing for first-time home buyers, improved quality of life issues in the low-income communities, living wage jobs, investments—I mean more investment from banks, as well as government, and better public schools.
Of course, if you look at saying ''Say yes to children,'' we really firmly believe in a child's right to live, grow, and grow up healthy in low-income communities. And that means affordable childcare, as well as affordable housing.
We achieve these goals by building community organizations that have the power to implement changes through direct action, negotiation, legislation, voter participation.
Los Angeles—our Los Angeles chapter consists of 20 organizers of 550—5500 members. I don't do this. So let me just say, I don't really do public speaking.
Chairman NEY. You're doing all right.
Mr. JOHN JACKSON. But our office is really located walking distance from here, 3655 South Grand.
We have a 1-800 number, where folks call every day for 1,001 different reasons, some of which are around Section 8, some of which are around welfare, some of which are around childcare, just a lot of things that impact low-income community folks. And we just find ourselves being in a position to become problem solvers, rather than problem creators.
I'm here today to express ACORN's opposition to restructuring the Section 8 voucher program and the State block grant.
A lot of what I'm saying probably has already been said. So I probably would just like to set the testimony aside and speak from my heart a little bit here.
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We experience every day here in Los Angeles people that are going through trials and tribulations with the Section 8 program. But more importantly, I think that it's building a dialogue. I'm jumping to the second part of it, and we'll submit this for public record.
But we actually have been innovative in trying to create a dialogue between the landlords and tenants. It's the notion of a common ground, a common space where folks can get a sense of who this man is to my right. And I don't know his name, but, you know, we have to tip our hat to people that are willing to take a chance and take a stand on renting to low-income folks, and see there is some value in doing so because it improves the quality of life in communities that are struggling under the yoke of gang violence and substandard schools in this country.
We have to salute them; we have to embrace them. And we have to do our part in educating our folks as to what their responsibilities are and engage with them with some dignity and respect and try to solve those problems rather than cast the burden upon the landlord. Because it isn't always the landlord. And we can't cast the blame or the burden on the tenant, because it isn't always the tenant. Or it's just sometimes just not enough information. And a streamlining of the process that landlords in increasing number can be comfortable in going into a program that can assist people in improving the life in these communities.
But we oppose the block grant system because we think welfare reform was a failure. We believe the sending of block rent down to the State of California, then down to Los Angeles, it just leads to less services rather than more services. And by the time it gets down to the people that it's intended for, they probably will not be—obviously it won't be enough of those services to go around. It's not enough right now.
But when you look at the crisis that the State of California is in right now, we love California, but we can't trust that these services to get down to the people that they deserve to go to with the $38 billion budget deficit.
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We just believe somehow some that of money just will go to unintended places and just representing the poor folks' organization, we would just be shocked and appalled that we can't afford to have any less than what the people are deserving of today.
We appreciate you being here. This is an amazing thing to see a Republican here in a Democratic district to try to problem solve. We salute you. We salute—we salute you. We salute you for wanting to build bridges rather than walls and trying to problem solve rather than problem create.
Thank you.
Chairman NEY. I appreciate that. I also want to note for the record, I'm not sure of the accuracy, but I think my old district is 16 percent Republican. You may have more Republicans than I do. So I'm pretty comfortable.
Thank you. I appreciate your comment.
Mr. JOHN JACKSON. We welcome you, and we appreciate you being here.
Chairman NEY. Thank you.
[The prepared statement of John Jackson can be found on page 500 in the appendix.]
STATEMENT OF JEFF FARBER, CHIEF OPERATING OFFICER, LA FAMILY HOUSING CORPORATION
Mr. FARBER. Good morning, Chairman Ney, ranking member Waters, and staff of the subcommittee.
I thank you for the opportunity to testify today. I'm Jeff Farber, Chief Operating Officer for LA Family Housing. Founded in 1983, our organization is the leading nonprofit housing development corporation that provides housing and supportive services to over 14,000 homeless and low-income families and individuals in Los Angeles.
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We provide a range of services from emergency shelter, transitional housing, permanent affordable housing, and home ownership opportunities.
We oppose the proposal to convert the Section 8 Housing Voucher Program into a block grant to the States. We consider Section 8 vouchers to be an essential component of the solutions to affordable housing crisis in Los Angeles and across the nation, production and preservation and income subsidies.
We operate—our organization participates in a variety of partnerships with the housing authorities of the City and County of Los Angeles. Local leadership of the housing authorities has led to the creation of many innovative programs promoting affordable housing opportunities to those in need, including the nationally recognized Homeless Section 8 Program.
Through our partnership with both housing authorities, we are able to place 100 to 150 homeless individuals and families in safe, decent and affordable housing annually. In this model, we refer Section 8 eligible households to the respective housing authority and provide them with the support services they need to gain tenant skills and maintain housing.
Through this program we have assisted over 900 households secure and maintain affordable housing in the last 10 years. Many of these households have participated in Family Self-Sufficiency Programs and have gone on to become homeowners.
The Housing Assistance for Needy Families Act attempts to address the administration of the current voucher program. However, its approach is heavy-handed and fails to recognize the improvements made nationally to the program over the last several years.
Nationwide utilization of the program has increased. And as you heard this morning, many of our housing authorities are leasing up at 100 percent or over.
Additionally, switching from one set of administrative rules known and used by all jurisdictions to a separate set of rules used by each state creates incredible complications and difficulties.
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Block granting of the program adds an additional layer of bureaucracy. And as John so well stated, when you have a problem in a State, and you add in another funding source to it, you don't know how that bureaucracy will handle that funding source.
Finally, relying on local codes to determine housing quality creates the potential for rules to vary from locality to locality.
HANF fails to guarantee that the funding of the Housing Voucher Program will keep pace with housings costs. Los Angeles is in an affordable housing crisis. Almost 75 percent of families with annual incomes of $26,000 or less, which is 120,000 families, spend more than half of their income on rent.
In the City of Los Angeles a two-bedroom apartment rents for anywhere from 1,100 to $1,300 per month. Using the HUD guideline, that a family should not spend more than 30 percent of their income on housing costs, a household needs to earn over $21 an hour or $44,000 per year just to afford a two-bedroom apartment.
Section 8 is a life line for many of our city's working poor: Janitors, fast food workers, nurses aids, security officers, cashiers, who otherwise would find themselves homeless and be knocking on the doors of my agency for assistance if that Section 8 voucher was not available to them.
HANF places these hard-working families at great risk. States—based on the system set up under HANF, States would either have to contribute their own funds or scale back their programs in the following manner: Reducing the number of families that receive housing vouchers, shifting rent burdens to families participating in the program, limiting opportunities to use vouchers to escape high-poverty areas, and shifting housing assistance from poor families to moderate-income families.
Each of these changes would damage the program and move it from its mission of using a market-based approach that allows voucher participants to move to apartments in areas of their choice.
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Congress can improve the administration and utilization of housing vouchers in a manner that is not detrimental to the well-being of families and does not disrupt the process of the existing program.
HUD already has the authority to reallocate unused vouchers from one administering agency to another. To add strength to this policy, Congress should consider making reallocation provisions that automatically move vouchers from communities that cannot use them to those that can in the same region.
Congress should look at reforms that incentivize owners. A couple of examples are more flexibility regarding inspections and an electronic payment system for the monthly payments that go to owners.
Congress should also provide funds to assist housing voucher holders find and access available housing in their area. Our local housing authorities have been masters at this and have worked with a wide network of nonprofits to guarantee that households are able to find and maintain affordable housing using the voucher program.
Thank you for your opportunity to testify.
Chairman NEY. Thank you, Mr. Farber.
[The prepared statement of Jeff Farber can be found on page 474 in the appendix.]
Chairman NEY. Ms. Schwartz.
STATEMENT OF RUTH SCHWARTZ, EXECUTIVE DIRECTOR, SHELTER PARTNERSHIP
Ms. SCHWARTZ. Good afternoon. It's now noon. Chairman Ney and Ranking Member Waters, who is a long-standing affordable housing advocate. And I just have to say thank you so much for all that you do.
I also wanted to acknowledge that Mayor Hahn's housing deputy is here today, Sara Dusseault. I think the Mayor has on record support also of the position taken——
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Chairman NEY. Thank you.
Ms. SCHWARTZ.——by most of the folks.
Chairman NEY. Sorry to interrupt. If I could, just for the record, we have a letter for the record, which Congresswoman Waters may want to make a comment on, to be submitted without objection.
Ms. WATERS. Well, I'd like to move that this letter be inserted into the record. And it starts out in no uncertain way expressing its opposition to H.R. 1841.
The Mayor is to be commended, not only for understanding the housing needs of the city, but for having put together the $100,000,000 program for housing assistance in this city. It's extraordinary. He is a leader in the nation on this. And we are very, very pleased that he is providing this kind of leadership.
Chairman NEY. Without objection, it's part of the record.
We stopped the clock so it didn't come off your time.
Ms. SCHWARTZ. My name is Ruth Schwartz, and I'm the Executive Director of Shelter Partnership.
We were established in 1985. And what we do is fairly unique. We provide technical assistance and resource development for agencies developing housing for homeless people in all of Los Angeles County.
As you know, Los Angeles County has a huge problem with aimlessness. It's estimated as many as 80,000 people are homeless nightly in the county. And I'm talking about people living in shelters, on the street, abandoned buildings and the like, about half of whom are located in the City of Los Angeles.
Based on my 18 years experience—and I know I look much younger than to have 18 years experience at anything, but based on that I think without doubt the most successful program that has been developed for homeless families and individuals in Los Angeles County has been the Section 8 homeless assistance programs and the programs that have resulted since then.
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Without doubt, I mean you can provide all the services you want in the world to homeless people, but if you don't have housing, you don't have a program. And you don't have an exit from aimlessness. And that's documented from all the national studies as well. The most important intervention in the life of a homeless person is stable, affordable, and in some cases, supported housing.
And I just want to congratulate the City of Los Angeles and the County of Los Angeles for being incredible leaders in this area. Since 1991, we've had a homeless assistance program, way before New York or anywhere else. So we've done it well. We've got over 12,000 people who were previously homeless, are now receiving Section 8 assistance, and that's families who are poor, including families that have experienced domestic violence and other incidents, people with mental illness, chronic mental illness who have lived on the street, as well as people living with HIV/AIDS thousands and thousands of people who were previously homeless. And there's a very high incidence of aimlessness of people with HIV/AIDS.
These are very successful partnerships, and they include strong collaborations of community-based organizations, from groups like Watts Labor Community Action Committee, Minority Aids Project in the Congresswoman's district, to traditional—more traditional mental health agencies and family agencies, like LA Family Housing throughout the City and County of Los Angeles.
They've also been a great partnership, and I think this is why it's so important that things remain local. I mean local is what's relevant. We've been able to strategize and combine other kinds of Federal funds. So it's not all on the Section 8 side. Things like the FEMA funds, other HUD funds like the HOPA grant funds, as well as State Department of Mental Health dollars. We've got a great program for chronically mentally ill people from the State legislature.
We are combining those funds with Section 8 funds and really getting people who are really what we consider the most tragic victims of aimlessness into housing. And the support services are paid for through the State Department of Mental Health. So we've got some wonderful partnerships and partnerships that I think we can all be very proud of in Los Angeles.
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I'd also like to just mention something that hasn't been mentioned before, and that's having to do with project basing. And this is an area that maybe the oversight committee can help us solve.
In the 2001 Federal Appropriations Act, it was agreed that housing authorities could again increase the number of project-based units that would be allowable and give more local discretion in that. However, HUD has never issued final rules. All they did, after a long time, was submit those rules to OMB, only to recently withdraw those rules.
So we have—so places like Los Angeles, where unfortunately we do have high concentrations of poverty, a lot because of families coming into the community from other countries, we can't really effectively use those project-based certificates with nonprofit developments. And we need those new rules to be released by HUD and find out why they haven't been.
Just in conclusion, as you've heard the State through the $1,000,000,000 state Housing Trust Fund the city through the $100,000,000 Trust Fund and also the County of Los Angeles through their special initiative through industry funds is really doing—is recognizing the importance of housing and being able to combine that with the Section 8 program on a local administrative level would be lost if we were to not continue the program as it is.
Thank you.
Chairman NEY. Thank you.
[The prepared statement of Ruth Schwartz can be found on page 507 in the appendix.]
Chairman NEY. I just wanted to note, we will follow up on the rules. In the expansiveness of government and all the agencies you have—and that's why I'm glad you've raised it here today—we lose track of what went where and when where it's at. And you raised a very good issue: Where are those rules? What's happening? We will continue to follow up on that.
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Ms. SCHWARTZ. Okay. Thank you. I'll get you some more information, too.
Chairman NEY. And I would note you might have gotten somebody in trouble today because whoever you were working with 18 years ago violated child labor laws.
Ms. SCHWARTZ. Yeah that's probably true.
Chairman NEY. You should warn them.
Ms. SCHWARTZ. Yeah, I think it's true. I think it's true.
Chairman NEY. Having said that, I have one quick question. And this is: Sometimes we've had them; sometimes we haven't had set asides. For example, set aside Section 8 for person specifically and/or families with aimlessness or HIV.
What do you think about—and again, sometimes we've have and I understand sometimes we haven't. What do you think about set asides and how that impacts this issue?
Ms. SCHWARTZ. I'm really supportive of set asides for the people that are the most extremely poor and needy, especially those people who have no home to call home.
I think that the program, as it started in Los Angeles, was because HUD wanted to demonstrate how—that the needy—the most needy could be served.
Those set asides aren't part of the priorities today, but yet there's is a commitment locally to continue that and still serve and other households. And personally I think that's a good thing.
Chairman NEY. Mr. Gross, I had a question. It goes to the 30 percent of tenant income or the 40 percent. And I wondered if you had an opinion on that. And also, you know, the unique circumstance where tenants sometimes are now paying 70 percent, which is obviously a large strain on them.
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Any thoughts on going above the 30 or 40?
Mr. GROSS. Well, as was pointed out in Los Angeles, most renters are in, or a good percentage of renters, who are not on Section 8, are already paying way over 50 percent of their income.
When that happens of course their options, they cut back on food, on clothing, on the ability to take care of their children and healthcare. And so we would oppose that. I think that's the one good thing about Section 8 right now. That it is that percentage of income to rent.
Under this block renting proposal, we can see that figure rise, you know, much higher. Out of people's reach of being able to afford housing, even with a voucher.
Chairman NEY. Thank you. And my last question, Mr. Jackson: You mentioned about building a dialogue with the landlords and tenants. And would you describe a few of the challenges you have in building that dialogue, and, you know, does the current system help with that, or are there ways that we can help the current system to do more with dialogue? Because that's important, I think, communication and dialogue.
Mr. JOHN JACKSON. We did do some internal trainings—we do some internal trainings called the Common Ground Forum, which we try to examine, explore one of the things that are we allowing to keep us apart, and then we try to explore those things that are bigger than those things that are keeping us apart which we have in common, which is usually the quality of life in the community, because if you are a landlord in a particular community, and it's starting to deteriorate, there needs to be a dialogue about how to fix that. And we just need to figure out a way to separate perception from reality.
Could you guys assist in that? Of course. There should be some way that landlords as well as tenants—I think that there is perceptions, and those perceptions become reality because of the lack of dialogue, not because of dialogue.
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And at every turn of the road there needs to be more input for those programs by the people it's intended to serve.
John, Maxine Waters' staffperson, had a challenge of getting me to sit here and speak on behalf of this organization because I just feel more comfortable helping to prepare somebody that actually could say and articulate what their trials and tribulations were.
God bless these sisters that are successful, and we tip our hat to them. But there is also another side of that that welfare reform hasn't been the ideal, dream forum. And how is that challenge getting to housing and how it interacts with housing needs to be a part of that equation as well.
So could you guys help and what specific ways that you could help? I don't know what the specific ways that you can help, but I'm sure talented staff people out of these talented Congressional offices certainly could be a part of that equation. And we'd love to work with them to do that.
Chairman NEY. They should contract with you to get some pay raises for the advocates that you have.
In all seriousness, one other question I have of you is: Let's say, hypothetically, we do a block renting, and we have iron clad protection for Section 8 voucher recipients. Could you still trust, not the State of California, but would you be comfortable to trust a State that they will carry out protections for voucher recipients?
VOICE. No.
Chairman NEY. Let's hear from Mr. Jackson first.
Mr. JOHN JACKSON. It's such an uneven process. California is so vast that from county to county to county, there would not be uniformity. And quite frankly, Section 8 is a Federal program, and the Federal government has the obligation to see to the equity that's placed into it, not necessarily the States or the counties or the cities. And they're not going to own that obligation as well as we would trust that the Federal government would.
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Chairman NEY. One thing, and I'm concluding my questions and we'll move on to my colleague, but I did want to note one thing. If we did do this, we had block granting, I don't know how you write in certain protections. The thing I wanted to mention and I have a great state, the State of Ohio, and a lot of great people. However, in the budget process, because they were up against a wall like California, Head Start monies, we all know the basic 101 beginning law, if you're in office, you do not supplant Federal dollars with Federal dollars. That is course No. 101.
In the State of Ohio, during the budget process they took our Head Start monies, went in, took $300,000,000 of HANF monies and applied the 300 million to the Head Start monies. Now, they appropriated it. When I was raised it was called theft; but they appropriated the money.
Now, clearly, I made this objection known to everybody that did it, you know, clearly you don't supplant Federal with Federal. They did it. But in this whole process the one overriding question I've always had is: How do you write something so iron clad that it can't be done? Because it's a pretty iron clad thing, Federal to Federal. I'm asking the overriding—and I'm speaking as a former state legislator, and I'm looking at that side of it now as a Federal member.
Mr. JOHN JACKSON. The punishment should be equal to the crime. I mean if people are dying as a result of the theft and thievery and thuggery, then the punishment—because they certainly right now in California they have a three strikes you're out law. You can be punished for a misdemeanor and wind up in prison for the rest of your life. If in fact the State of California, or any state for that matter, has the gall to take to money that's been allocated for poor folks and utilize it for what would not be considered the greater good, in their mind they may attempt to justify it that way, but when you look at it as in—through the eyes of the people that those funds were intended for in the first place, it's a whole totally different answer.
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So I would say let the punishment fit the crime and make, you know, the crime more severe as the devastation and how it affects people's lives.
Chairman NEY. Congresswoman Waters.
Ms. WATERS. Thank you very much, Mr. Chairman.
I can't tell you how proud I am of both of our panels that have appeared here today. I am so proud not only of the panelists, but their ability to articulate the partnerships and the working relationships here in this area that help to make Section 8 a workable, viable program.
And I think in all that you've heard, we certainly will go back to the Congress of the United States looking at this legislation and understanding even better why there is so much opposition to the legislation and why we are all together. There is such a consensus of opposition here in California and in the Los Angeles area.
Let me just say to Ms. Peters and Ms. Thompson, you heard the people in this room just start to applaud you. And I think you can see from our reactions up here how absolutely proud we are of you.
You have literally taken tools that have been offered to you, and you've used them in ways that we want so many people to be able to do. Not only are we proud of you and the work that you're doing and the opportunity that's been afforded to you to help others, but, you know, I'm going to follow up, and we're going to not only keep up with you. We want you to come and tell your stories to some of the other men and women in some of the places where the message has not gotten to.
So we are just going delighted to have you here today with stories of success and positive actions that led to a whole new lifestyle for you.
We are very proud of you, Bev Martin, I guess I've been knowing for 100 percent. I'm 100 and he is 101. And I didn't realize that he had retired, and that he was now an apartment owner providing rental services to people who need them so desperately.
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Thank you, Bev for, your new career, and again, I would like to use this legislation as an opportunity to look at other ways by which we can strengthen the program.
Certainly number one is I want more money. I'm a tax and spend liberal. I want more money, more services for people. I just think that, you know, this nation could invest more.
And I raised some questions earlier today about mom and pop or smaller landlords and capital costs and all of that, and I will certainly follow up looking at that. But again, to have a 20—a unit—a building with 29 units, and I think you said 24 of them occupied with Section 8, it sends a real message out there to other apartment owners that this can be done, this can work. And thank you very much for that.
Larry Gross, you guys have been on the cutting edge of organizing for a long time now. And I really do appreciate that because we have so many people who need you, who need advocates who cannot only be in the streets, but in Washington and in places like this, speaking on behalf of people and helping them to be able to negotiate their environment and all that goes on in these complicated processes. You have a long and rich history, and just you continue to be there.
Mr. GROSS. Thank you very much.
Ms. WATERS. Now, John talks about not wanting to be in these kinds of arenas testifying. Now, John, we know, you're an organizer extraordinaire, but sometimes the organizer has to come from the streets and get into a room like this and help to merge the work of organizing with the work of this kind of legislative advocacy, and you do it well.
You do it absolutely well. When you talk about speaking from the heart, that's what we need more of. We need more people who are willing to throw aside the paper and just talk.
I appreciate the work that you do every day and also the work that you all do in, particularly ACORN on predatory lending that has been one of the hallmarks of your work here in the city. You've been at the city level, the State level and the Federal level.
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We are going to try and try desperately to do a bipartisan effort on that new predatory lending bill. And we are going to look to you to help us work and negotiate that.
Mr. Farber and Ms. Schwartz, I thank you both for being here. Again, we have the thousands of renters and homeless folks who are out there not knowing or understanding which way to go. And if it were not for you guys, we would not have the kind of accomplishments that you've been able to describe here today.
It is my greatest wish that we can keep evolving with this work so that we would not only be able to sing the praises of what has been accomplished so far with our government, but that we can move it to another level.
I dream of the day when I can go into Downtown Los Angeles and not step over bodies on the street. I dream of the day where we won't have a Patch Park of the homeless who convene there every day. Many of those people are from my district.
When I go through Downtown Los Angeles, I begin to hear the calls ''Hey, Maxine. Hey, Ms. Waters.'' These are folks who, you know, came from different places, but many of them from so-called South Los Angeles, who have ended up down in Downtown Los Angeles.
And I thank you for all that we have done to get a portion of them off the streets, those people, and into Section 8 assistance so that they are now into units where the quality of life has changed for them.
To the landlords, let me just say I dream of a day when we'll have some assistance where landlords can take the folks living in their units and provide services above and beyond what landlords do.
For example, I just believe that you have a building of 24 Section 8 folks, that the same kind of opportunities that have been extended through the housing authorities for those who were lucky enough to get connected, they could be unveiled and unfolded where ongoing meetings are going on in the apartment building, and people are being educated about the programs and the possibilities and get them up and out and doing things and changing their lives.
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Let me just say—and I'm kind of full with all of this now—that your testimony has been extremely important and meaningful here today. And really much of what you have said today should help restore everyone's faith in the possibilities of this government to be of an assistance to the least of these.
I oftentimes am very frustrated and sometimes angry about what I see in the poor people and the lack of opportunity. But you know, each night that I go to bed, I go to bed filled with a little bit more optimism that tomorrow can be better, and that we can do it better.
And with your being here today I know that tomorrow and the next day and the next day we can do even more to assist the many people of this nation to be able to have a decent quality of life.
Most people simply want a decent home and roof over their heads. They want to be able to feed their families. They want transportation to get back and forth to their jobs and to be able to take care of their business.
They want their children—Ms. Peters said ''My children at UCLA.'' We all—everybody would like to have the opportunity to support their children to be able to be educated.
So I believe in—I believe in this country, but I believe more in each of us. This country will only be what we make it. I did not intend to be on the soap box today, but I could not help it. I'm just inspired by your presence.
Thank you very much.
Chairman NEY. Well, I'm glad you got on that soap box. It helps me listen to a few things.
I just want to thank you for some great testimony, compelling advocacy you do, the personal stories you have shared with us.
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And like the movie ''Take It Forward''—Pay It Forward''—I think it's ''Pay It Forward''—I know you're doing that with other people in this area across the country.
This has helped me a lot to be out here. We come from different districts. A town of 30,000 people to me is Los Angeles. Where I come from that's a huge, huge city. So we have some different concerns. But again, people I represent need housing. People out here need housing.
I don't know if either Congresswoman Waters and I have ever been able to tell persons that need help of what they're registered. We don't care. We just help people that need help. The government needs to be able to step forward to do that.
We may disagree on some things philosophically, but we agree on trying to make the system work. I'm thankful to be here because you have a whole different cost situation that is very, very difficult that we don't have, but yet we have some lack of space to help individuals.
So this personally helps me, as Chairman of the subcommittee, and I appreciate the hospitality of my colleague, Congresswoman Maxine Waters, of having us here, appreciate the staff, both sides, to be able to make this hearing come about.
And we've had a lot of trauma in this country over the course of its history. We've had a lot of trauma over the last couple years. But America will go on and continue and, hopefully, make itself better. And this is where America does her work.
So I'm very pleased that we have been able to come outside the Capitol and bring the Capitol here and hear from the people right on the front firing line who live every single day with trying to help others.
I've always said this many times. In 50 to 60 years, no one may know our names, any of us, but we will have rested, and our generations to follow can have comfort that everybody tried to do something to help other people. And down the road somebody will be in housing and going to college or get a good job, and it's because of things you all are doing today.
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So I'll give you an awful lot of credit for that. The energetic give-and-take of public debate, this is what it's about. We appreciate it.
I want to thank my colleague for taking her time for two days straight now, after coming off a marathon session, I think we voted at 2:30 in the morning one day last week.
So I want to thank Congresswoman Waters for sharing her time and all of you and her staff and all of you.
And we will leave the record open for 30 days. There might be additional questions without objection that will conclude this hearing.
Ms. WATERS. Let me break all the rules of committee hearings and ask this great Los Angeles office to stand with me and this Chairman for the work that he is doing and his presence here.
Okay. This is a wonderful facility that we are in, the California Science Center, and Monique Hudson, Government Affairs Director, and Carl Phillips, would you give them a big round of applause.
And for those of you who have not visited this facility and you have not seen the great exhibits and all the work that many of us put in for years in the California State Assembly, you better come and bring your children.
Okay. Thank you very much.
[Whereupon, the subcommittee was adjourned.]