tv HUD Secretary Testifies on COVID-19 Housing Security CSPAN July 20, 2021 10:51am-12:00pm EDT
was ready. internet traffic soared and we never slowed down. schools and businesses went virtual and we powered a new reality. because of mediacom, we built to move you ahead. >> mediacom supports c-span along with these other providers, giving you front row seat to democracy. and live here on c-span, take you to a housing and urban development hearing. secretary marcia fudge testifying on infrastructure equity for the house financial services committee. >> then does that simply mean because california has made california very expensive to live in that it's the rest of the country's responsibility to then subsubsidize those -- subsidize those rents and subsidize that cost structure that california has imposed upon
its own citizens? and this can go for any state. whether it's in michigan or whether it's in new york or whether it's in california. so i want to talk a little bit about a program in michigan here and you've expressed your strong support for down payment assistance as a means of increasing minority homeownership. certainly an important goal for many of us. when i was in the state legislature in michigan i was on the commerce committee. i worked on a number of issues at that time. i'm happy to be on the subcommittee that's continuing to have that. but i have to say i was a little surprised to see that h.u.d. announced recently that it would be pursuing rulemaking that would restrict f.h.a. financing for these loans for this type of assistant. in michigan, the housing authority runs a successful program that provides michiganders $10,000 towards the
purchase of their first home. can you shed light on what h.u.d. hopes to accomplish with this particular rule and can you assure me it won't negatively impact successful programs like the one operated by michigan's housing finance authority? secretary fudge: which rule are you referring to? mr. huizenga: there had been an announcement there would be pursuing a rulemaking regarding f.h.a. financing loans that have this assistance, down payment assistance. secretary fudge: i am thoroughly confused. can you tell me -- mr. huizenga: so my understanding is that there was an announcement by h.u.d. that -- i can't open the link because i am actually using paper. but the link to the -- to it being cited that it is going to be pursuing rulemaking on this housing -- sorry -- this down payment assistance program. so are you saying there is not going to be a rulemaking?
secretary fudge: let me say this to you because i am not sure what rule you are talking about. it's not clear to me. all of our work is to advance down payment assistance. we want homeownership. would -- mr. huizenga: ok. reclaiming my time here. so you can assure me it won't negatively impact state programs like the one that we have in michigan? secretary fudge: yes. mr. huizenga: wonderful. we will hold you to that. now, on to that -- staying on that issue, one of the bills we're examining today would create a new down payment assistance program that would be housed within h.u.d. with a price tag of $100 billion. that program would actually be larger than your entire annual budget that this administration has even increased. given there's approximately 2,500 state and local programs like the ones like michigan's housing finance authority,
providing down payment assistance to first-time homebuyers, i might add, without using taxpayer dollars, do you think we need to be spending limited resources duplicating these resources for the federal program? chair waters: the gentleman's time has expired. mr. huizenga: i'll pursue that with a written question. chair waters: mr. scott is now recognized for five minutes. senator scott: thank you, chair laid -- mr. scott: thank you, chairlady. i appreciate that. secretary fudge, i am so proud of you. you and i served in the house for many years. and you are doing a wonderful job. now, i want to pick this up in a way and deal with two issues. i want to get to the rental one because that has raised some issues as well.
but i think it's very important for -- because we got the nation watching this and while i am on that, chairlady waters, you are absolutely right. it was very important. this was her first chance to come before this committee, and she deserves to have this opportunity on her own. and i respect you and thank you for doing that. now, i want to set the record straight. first of all, the winehouse initial infrastructure proposal included a $213 billion investment to create and retrofit over two million affordable housing units that
were badly and still badly needed. but in the bipartisan infrastructure agreement, that provision did not make the cut. so here we are working our way through the infrastructure situation, and i think it is fair for us to hear from you. what do you see? what do you want? it is your job to deal with this. tell us what we must do, how much money we need to make sure we get the job done. secretary fudge: thank you very much. just a couple things to frame this for you. there is no place in america today that a person making minimum wage can afford a two-bedroom apartment.
nowhere. we know we need affordable housing. mr. scott, i'll say to you that we are anticipating and very hopeful that in the reconciliation in the build back better plan, the resources will be there to build at least two million. we need far more. we need far more. there are 11 million people in this country today who are spending more than half of their money on rent. it cannot continue. it cannot support itself. we know we need more. we are hopeful we will at least get the resources to match what the president is asking us for in the build back better plan. mr. scott: thank you. now, let's go to this rental issue. because we worked hard. we did get nearly $47 billion there. but i want you to -- and i think the nation needs to know that you can execute the program, but much of these funds go down to the very states to implement. how has that been handled?
and do you see difficulties in the states fulfilling their obligation? because so much of this -- i've been involved in this for quite a while. you were with us when we sent billions of dollars down to our states and territories so that we could help homeowners stay in their homes. we're doing the same thing with the renters. we even have moratoriums going on. but tell us how this works. and also, tell us, does this money go to the renter? does it go to the landlord? how does it work? secretary fudge: well, let me -- the money goes to landlords so the landlords can be made whole so we can get people up to speed and current with their rent.
most importantly, part of the problem has been when we sent the money to the states and to anything other than a cdbg or formula city or community, the money was held up because they didn't have the assistance or the capacity to get it out fast enough. so what we have been doing, personally i have been calling mayors and governors and others to say we got to get the money through the system. so what we're seeing today is that the numbers of resources that are given out is increasing exponentially every month. .
>> it's also right that secretary yellen should be here to testify not just about the mismanagement of this program, but also her statutorily mandated quarterly cares oversight hearing. i don't know why she hasn't yet appeared. let's talk about the $46 billion appropriated by congress and only 4% of it that's actually reached renters. mr. barr: with vaccines distributed and available, and lockdowns ended, taxpayers, i think, are asking the question, either this is too late because people now are working again, or it's not in time because the moratorium on evictions is about ready to expire. i just think that this is the poster child for why hardworking taxpayers are so critical of big government bureaucratic programs like this . so i just want to ask you,
madam secretary, given the fact that you do have an obligation under section 501-g of the law to make a report regarding the use of these e.r.a. funds, what would you say to the taxpayer out there who is frustrated that only 4% of the $46 billion has actually been deployed? many of these folks are now back at work. secretary fudge: what i would say to the taxpayers, both treasury and h.u.d. have done what we were directed to do by this congress. we havish shufede the resources. we are providing the assistance. i would further say that we are required to make reports. there is a quarterly report coming. we don't give daily reports, but there is a quarterly report coming. i think it will be more reflective of where -- mr. barr: can you see why taxpayers are frustrated that 96% of the funds that congress appropriated back at the height of the pandemic have still not
reached renters? can you understand why taxpayers would be skeptical of future spending blowouts like this going forward? secretary fudge: i can understand why taxpayers would be concerned if they are at risk of being evicted. there is no question about that. i agree with you. mr. barr: to my point, for many of these renters it's either too late, the money's too late getting to them. or if it's not too late, then time is of the essence to deal with the arrears. i know you are working on it. i appreciate that. just understand taxpayers are always going to be skeptical about big government programs precisely because of the mismanagement we have seen here. housing first. i was encouraged by your exchange with chair waters earlier when you discussed the need for services in addition to just a roof over a head of a person struggling with housing insecurity. i remain concerned that many transitional housing facilities in my district and around the country, madam secretary, are barred from receiving federal
homelessness assistance grant funding because they mandate wrap around services such as addiction treatment or job training as a condition for continued residence dens. in many instances these requirements are beneficial for specific communities. facilities like the franklin county women and family shelter in my district in central kentucky are left behind because their business model, which is demonstrably effective in our community in getting homeless women into permanent housing, and addiction-free lifestyles doesn't comply with a one-size-fits-all qualification for funged availability. for the sake of clarity i'm not proposing to end the housing first, but i am proposing that we end the government's exclusive reliance on housing first. h.u.d.'s core policies -- current policies create a situation i just described where providers who have an excellent record of successfully transitioning people out of homelessness are excluted from government assistance.
secretary fudge, are you willing to work with congress to expand the universe of successful transitional housing programs that receive federal support. secretary fudge: i'm certainly willing to and willing talk to whoever you think we are being unfair to. mr. barr: the previous secretary came to my district. there is a lot of fib organizations in my district and around the country that are not housing first but have an excellent track record and they are being denied federal assistance, discriminated against because they don't have this one-size-fits-all of housing first. but they deliver results. and they don't get your help. so i do want to invite you to the sixth district of kentucky and other districts around the country with both blue and red districts where we have not housing first models that deliver for the homeless population of this country. chair waters: the gentleman's time has expired. the secretary of the treasury should be here, the secretary of the treasury is not here because the chair did not invite her to be here because she should not be here.
with that, the gentleman from texas, mr. green, also the chair of the subcommittee on oversight and investigations, is now recognized for five minutes. mr. green: thank you, madam chair. and i would add to your commentary, had we now the secretary of the treasury we would be asking for the secretary of h.u.d. this is all about a major distraction. my colleagues on the other side , many of them, not all, oppose a minimum wage. many of them fight against a living wage. they oppose subsidies for housing. yet we are willing to spend
billions on nuclear arms, nimitz class aircraft carriers, bombers. but they oppose the things that give people decent living conditions. housing infrastructure has become a bridge in my district for many people. the infrastructure has become a tent, a lean-to in my district. too many people are suffering. madam chair, i want you to know that i totally, completely, and absolutely support the housing infrastructure act of 2021 that you have proposed. i support it because nearly 50% of all u.s. renters are cost burden and pay 30% or more of their income in housing.
71% of the nation's extremely low income rental households spend more than half of their incomes on rent and utilities. and as the secretary has mentioned, no state, there is no state where full-time minimum wage worker can afford a two bedroom unit. as a result of the lack of investment into affordable housing infrastructure, many families pay unaffordable rents or live in substandard conditions. madam secretary, do we need to proclaim housing as infrastructure? secretary fudge: yes, absolutely. i think that the best way to describe it, if i may, mr. green, when covid began, the first thing they said to us was, stay home. what happened if you didn't have a home? they said don't send your children to school. teach them virtually. what happened if you didn't have a home and you didn't have
high-speed internet or broadband? they said if you get sick, stay home. what do you do without a home? mr. green: thank you, madam chair. i yield back the balance of my time. chair waters: thank you. the gentleman from oklahoma, mr. lucas, is recognized for five minutes. mr. lucas: thank you, madam chair. it's wonderful to see my old friend here, madam secretary. before we begin much more discussion, i would just note i think some of the concern, the secretary knows the way my mind works, some of the concern on my side of the room is that when the eviction moratorium ends on july 31, if we don't have those resources flowing, there is going to be a bunch of folks who are going to be in a terrible jam at sunrise on august 1. it's a legitimate concern shared by both sides. how do we make sure that doesn't happen on the first day of august? that said, thank you for being
here. for those of you who have not served on another committee that secretary and i served on for a long time, you wouldn't know that we worked together on a variety of conservation related issues and rural development and from the secretary i learned more about algae bloom in the great lakes than i might otherwise have ever known. i appreciate that relationship that we have had. you are in a unique position, particularly, not always, but typically house members don't become cabinet secretaries and step up to that level of responsibility in the executive branch. so you have a vantage point of view that most of us will never have. if you don't mind sharing for just a moment or two the things that have caused you frustration, but by the same token, the things that have been a positive surprise to you in your new role, thing you --
things you would not have had knowledge of sitting on this side of the dais. secretary fudge: thank you, good to see you my friend as well. the thing that i think has probably disappointed me most is that i find that as i come here or in other places, there is an assumption that we don't work hard to do the work to serve the american people. we do. i inherited an agency that is overworked, understaffed, and yet they still do everything they can to take care of the people we serve. i think sometimes we forget about the people. that has disappointed me. i think the thing that has encouraged me most is that the people, whether they are tenets organizations, where i travel around the country and talk to people, they know we care enough to fight to make it right. that is what has encouraged me. people have hope we are going to make it right. and i feel real good about that.
mr. lucas: our time in working together on the ag committee i think we were old time legislators and we worked to achieve consensus and your role of c.b.c. chairman you were critically important to helping put the 2014 farm bill together , comprehensive document that addresses everything that from producing feed and the ability to eat. that seems to be out of style these days and has been for some time. i hope in your role as the secretary that you'll continue that spirit as you work with us. as i look for a moment back to the concern about july 31, there are some real challenges that are coming up that face real people back home. sometimes we all get a little excited and pump a lot of adrenaline here on both sides of the room and both sides of the building. but the bottom line is we are here to represent those
citizens back home to make sure they all have the ability to put that foot on the first rung of a ladder to carry themselves up. and that we make things happen. you address this issue about what happens after july 31, understand it is a sincere concern by many people that we don't come up on what will be another catastrophe for good folks. along with that, if you don't mind, i'm a big proponent of bringing the covid-19 secretary to an end. that is using science and technology to its very best. we now have a variety of vaccines that are making a real difference out there. can you discuss in your final moments how h.u.d. has worked to leverage the available resources to make sure there is access to those covid-19 vaccines? secretary fudge: yes. two things. let me just say, i am concerned as well. there is no way i want to see people put on the street or evicted from their apartments or removed from their homes.
i'm also concerned. we are doing everything we can to prevent it. we know that we have a short time frame but we know that every single month we are getting to more and more people. and that little additional 30 days is going to make a significant difference. as it relates to making sure the people are vaccinated, we are at a point now where we have to take extraordinary steps. we are already doing vaccination clinics in public housing facilities. we are already doing them in almost any situation we can find working along with h.u.d. -- with h.h.s. mr. lucas: yield back. chair waters: thank you. the gentleman's time has expired. the gentleman from missouri, mr. cleaver, who is also the chair of the subcommittee on housing, community development, and ensures is now recognized for five minutes. mr. cleaver: thank you. secretary yellen i want to know a couple things that i think my colleague just raised. that's the whole issue of the
vaccines. as you may know, missouri is on fire with covid. for the last week or so leading the nation in new cases and hospitalizations. i don't know how many individuals who are living in public housing or some form of h.u.d. housing or involved in this crisis but is there a plan that is being implemented in h.u.d. housing that is in some way trying to guide residents into accessing the covid vaccine? secretary fudge: a couple things happening. one is we are working with h.h.s. to be sure that the vaccine is in the places where we believe it is needed most. there still are some minor
access issues, but the bigger issue is the educational portion of it. when you talk about missouri is on fire, but it is a fire that is caused by unvaccinated people. most of whom who choose to be unvaccinated. there is not a whole lot we can do about that other than to continue to tell them why they should be vaccinated and continue to make available the vaccine. it's in every single pharmacy. we have pharmacies that are staying open now every friday 24 hours a day to be sure that people can't -- don't have a problem with getting off work. 24 hours every single friday. every single -- we have, if you want to drop the kids off at daycare, we have a place that will do that for you. everything that we can think of to do we are doing to make sure the vaccine is available. mr. cleaver: thank you. the other issue, i'm sure you are getting inquiries about this, but manufactured housing and tiny housing, we are having , like many other places,
having difficulties finding places in our community, in the urban part of my district. so we are struggling someplaces are saying -- some areas are rejecting tiny homes. some reject manufacturing housing. almost all of them rejected, no matter what the housing is, if it's related to housing those who are without any shelter. there is nothing h.u.d. can do to remove this not in my backyard philosophy. but are there any success stories in the tiny home process or manufactured homes? secretary fudge: manufactured homes is something we interact with all the time. you can build a manufactured home for something very reasonable. someplace in the $100,000 range. they are fast to put up.
they are easily installed. and they are an alternative, i believe. but the problem we have, you know yourself as a former mayor, zoning and planning create lots of problems for us. what we are trying to do now is engage communities to talk about the zoning such that it increases the cost of housing. it keeps people out. and that's even in addition to not in my backyard. there are issues we are working on. we do believe that until we start to address it we are going to continue to always perpetually be in this kind of situation. mr. cleaver: i want to address with these u.s. conference of mayors, maybe we need a conference with mayors to talk about this whole issue of zoning. i was on a call with people involving housing from around the country last week, and everybody was talking about the same issue that you just raised. that is zoning. i think we need to have a revolution in how we do zoning. because we are zoning poverty.
it needs to change. i don't know at some point i think maybe h.u.d. should consider some kind of program with mayors to just get mayors to understand the problem that's going to continue until we begin to address the issue of zoning. secretary fudge: let me just say. i was in denver last week. denver, the average price of a home in average is $700,000. in boulder, it's over $800,000. the thing that they were complaining about, not necessarily more housing, they can't get workers. why? because workers can't live there. they can't live close enough to be there. not only do they have a housing crisis, they have a worker shortage. these are things we have to address. mr. cleaver: thank you, madam chair. chair waters: thank you very much. the gentleman from texas, mr. williams, is recognized -- >> point of order. chair waters: the gentleman is recognized. >> request unanimous consent
during my questioning about the rule making with the secretary. we either miscommunicated or you are unaware about rule that was proposed in the spring of 2021. it's titled mortgage insurance for mortgage transactions involving down payment assistance programs. allissa saunders is the contact. this is through o.m.b., the website, reginfo.gov. i would like to submit it for the record. chair waters: without objection. thank you very much. the gentleman from texas, mr. williams, is recognized for five minutes. mr. williams: thank you, madam chair. i want to join my colleagues in expressing my disappointment also at how emergency rental assistance aid is still sitting idle. renters and landlords are waiting for help. secretary fudge, good to have you here today. as you are aware, bank participation in the f.h.a. program has dropped dramatically in the last several years. in speaking to some of my
friends back home in texas, the texas bankers, they say this is because of two main factors. the first is the high cost of servicing f.h.a. loans, and second is enforcement actions taken under the false claims act. several major f.h.a. lenders were hit with unreasonable fines for what amounted to nonmaterial underwriting errors which caused many to simply stop participating in the program rather than run the risk of being fined for minor errors. in response the f.h.a. made some changes to the quality control process and department of justice put in place a memorandum of understanding to try to create some more certainty within the industry. i'm sure we all agree banks need to be held accountable for major violations of this act if they were intentionally trying to defraud the government. i don't think we should expose lenders to high penalties for minor violations in the housing market might be stronger if we had more competition, which i'm a big supporter of. and competing banks participating in this program.
my question is, can you provide us with some assurances that the department of justice m.o.u. will remain in place and go into detail, any detail you want on additional steps the f.h.a. is taking to attract more banks back in the f.h.a. lending program. secretary fudge: certainly. we are always willing to take a look at things. i would suggest to you f.h.a. is probably in a better position than it's been in in a very long time. secondly, i think that as it relates to the false claims i know that it's being worked on. i'm happy to have a conversation with anybody on your staff about it. mr. williams: my last question is about the f.h.a. multifamily department. i have been told there are massive wait times for some apartment deals to go through with people having to wait between six months to a year before even being assigned an underwriter. these delays are making it less attractive for private developers to come in and invest their money to increase the supply of affordable housing we need across the country. i saw that the f.h.a. contacted
some of the underwriting work to the -- contracted some of the underwriting work to the private sector. so far it has not had any impact on reducing these wait times. secretary fudge, what are you doing and the work -- to work through this backlog of multifamily deals so we can increase our housing supply and assure developers are able to deploy capital in a timely manner and get people in homes. secretary fudge: you are right. in the past that has been what has happened. we are on top of it. we are changing the process. we are streamlining the process. i think going forward they'll see a much shorter period of time. mr. williams: in the end looking for homes to live in. secretary fudge: absolutely. mr. williams: i yield my time back. chair waters: the gentlewoman from ohio, mrs. beatty, who is also the chair of the subcommittee on diversity and inclusion, is now recognized for five minutes. mrs. beatty: thank you, madam chair.
thank you to secretary fudge. let me start by simply saying the title of this hearing is, oversight on h.u.d. i'll cut it short. h.u.d. it is not oversight of h.u.d. and the united states treasury. and for the record, madam chair, i wanted to note i do not expect secretary fudge to be accountable for secretary yellen. i do not expect her to answer or speak for her, nor did i expect secretary carson to speak for secretary mnuchin. i know he couldn't. he could barely defend why he took 16.4% of h.u.d.'s budget before he got started. i would like to remind my colleagues that she has only been in this position for about
six months. so let me educate my colleagues on those listening. she has crisscrossed the united states for housing. she came to the state of ohio and met with a bipartisan team of housing experts. let me also say to allocate 100% of the rental housing funds to state and local government, we should be saying thank you. in my district alone, helping them receive the money -- that part my colleagues got correct -- we should be applauding her for getting all the dollars there for rental assistance. now, it went to the state and local governments to do that. let me share with you and paraphrase what she said to state and local governments in the capital city of ohio
including our mayor sitting there. she said allocate the funds. allocate the funds and help these individuals who are in need. let me also thank you for the few months that you have been there to increase the housing instability and homelessness caused by the pandemic that put us in a whole new tizzy and world. thank you for the investments in the nation's housing infrastructure as part of the biden's build back better plan. rolling back actions of the trump administration which set us back and undermined the fair housing act. so thank you. i do have a question if i have enough time. i want to say thank you to your entire team. they have been amazing.
-- amazing in responding and reaching out. earlier this year, hi a bill, the housing financial literacy act, that passed the house with overwhelming bipartisan support. this bill would give f.h.a. borrow he a 0.25 basis point discount up front on their mortgage insurance for first time home buyers in exchange for taking a h.u.d. approved prepurchase housing course. this billowered the down payment rate for first time home buyers by more than $500 on an average. and likely lowered the default rate within the f.h.a.'s portfolio. under the current law the f.h.a. has the authority to implement this program which it did between 1996 and 2000. would you consider asking your team to reimplement this discount program for the first
time home buyers? secretary fudge: yes. we are really pushing that towards the front of the line. we are having discussions about it. mrs. beatty: is there anything in the last minute i would be honored to yield you that time to say anything you would like to say to this committee. secretary fudge: thank you so much. i would say to this committee, i have not been gone that long. i understand your concerns. i am doing everything that i possibly can do to make sure that we are good stewards of the resources we have been given. just give me the time to make it happen. i have been there four months. when i was sitting on your side of the table i would probably have been asking the same questions. so i'm good with that. but know that i know how to do it. we have the people to do it and we will do it. mrs. beatty: madam chair, i yield back. chair waters: thank you very much. the gentleman from arkansas mr. hill, is recognized for five minutes. mr. hill: thank you, madam chair. once again secretary fudge, great to have you before the committee.
again let me add to all my colleagues our congratulations for your service to your country as our h.u.d. secretary. i listened to the chairwoman talk about what might have been last summer in terms of getting the rental assistance money started sooner, but last summer the congress was faced with sort of an all or nothing play. we were going to pass the heroes act or have no discretion to target money that we really felt on a bipartisan basis needed to be targeted. so we went for days and days without starting the paycheck protection program back up. it expired on august 5 last year. and we could have gotten a targeted bipartisan release -- relief on rental assistance, but we didn't. it passed in december. and $25 billion of that money in the appropriations bill has been 100% allocated to the states. the $21 billion that was in the american rescue package, only
50% of that money has been allocated. it hasn't all been allocated, i want to correct the record, in fact it has not been all allocated. i think that's an important point. the ranking member noted "the washington post" story about rachel siegel five alarm fire, slow trickle of rental aid heightens concerns about evictions crisis. madam chair i would like to submit this article for the record. chair waters: without objection, so ordered. mr. hill: in this article there is a quote from dianne, president and c.e.o. of the national low income housing clole coalition. senting up rental assist an programs from scratch is major and time consuming undertaking. true. but by now, repeat, by now, that's no excuse for the slow pace of spending in some communities. i think that lays the stage. i ask you, madam secretary, who should be held accountable for getting this money out? just within the administration,
who is the point person in your view to get this money out to our tenets and--tenants and landlords who need it. secretary fudge: the people who have it which is the cities and states. it took some time to stand up the new program. the resources are there. that is why i'm constantly calling mayors and governors and other people to say, you are the cog in this. get it out. they know they have the resources. they will say to me, especially smaller communities, we didn't have the people to do it. we don't know how to do it. we provide that assistance to them. then it is their responsibility because they have the resources. it's no different than if it's cbdg money or any other formula money or competitive money. once they receive it they are responsible for t we are responsible for the oversight, they are responsible for the program. mr. hill: it is a challenge when some of these states have never done that before. that was the decision by congress. i really think the treasury
secretary and you have the disproportionate responsibility to try to set those parameters and get that out. the money was distributed in january. here we are almost the first of august and as i said in my opening comments, a tiny portion just .7% in arkansas has been spent. 4% overall. let me switch subjects if i might. you referenced 50-year-old housing unit stock and made that a point. and h.u.d. over the years starting with the obama administration has had its rental assistance demonstration program, the r.a.d. program, started in 2011 to preserve and maintain affordable housing by allowing housing public authorities to convert public housing units into section 8 project based rental assistance. h.u.d. secretary for president obama created that program and he said, the administration created r.a.d. as a comprehensive and innovative strategy that offers long-term
solution to preserve and enhance the country's vital affordable housing stock. by finding ways to get private capital off the sidelines and back into communities. donovan goes on to say, r.a.d. is a model of smart government. so my question to you is, do you agree with secretary donovan that r.a.d. is smart government? secretary fudge: i think it's a great program because the thing is it still is maintained as a public housing. they don't own it, the private industries don't own it. they have leveraged the resources but but it's a program we are looking at. one thing we have to be very careful about, and know members of congress are, we don't start to go down the road of privatizing public housing. mr. hill: one follow-up. do you support lifting the statutory cap that limits to 455,000 units? secretary fudge: we are still looking at t i would suggest to
you that i think that we should consider raising it, yes. mr. hill: thank you, i yield back. chair waters: the gentleman yield back. the gentleman from -- the gentlewoman from pennsylvania, ms. dean, is recognized for five minutes. ms. dean: thank you, madam chair. secretary fudge, welcome. welcome back. it's a delight to be here with you. we are delighted that you are here alone, speaking about homelessness, affordable housing, repairs to our housing stock, and increases to our housing stock. when you talk about how we were all told to stay home when covid hit, very poignant that hundreds of thousands of people in this country had no place to call home. that continues to this day. i represent suburban philadelphia. montgomery county and berks county. we have the montgomery public housing authority which serves a large portion of montgomery county, pennsylvania. it has a portfolio of 625 units
and a waiting list of over 20,000 unique applicants. simply put, and you have said it over and over, there is not enough affordable housing for those who need it. could you tell us from the american jobs plan with some specificity how that proposal, this transformational american jobs plan, will make an impact on that tremendous need that is, in my district, and i imagine is mirrored throughout this country. secretary fudge: thank you very much for the question. as a nation we have not at any time in recent history for decades invested in public housing or new moderate and low-income housing. we have not done it. so time has finally caught up with us. that's where we find ourselves today. the president in the american jobs plan recognized the fact that millions and millions of
people need housing. so in that plan originally, if you recall, there was $300 billion setaside just to do housing. there is a new housing tax credit to incentivize persons to build new housing. that is in additionle to low-income housing tax credit. the plan right now looks like it's about $200 billion. it's not about the money, it's the housing. two million new units. up to 500,000 renovated and rehabilitated units. units that are energy efficient. units that are resillent. and units that will keep the costs down for the people who live in them. it is the most significant piece of housing legislation in my lifetime. ms. dean: it's very exciting. and i do hope we get it across the finish line with really broad bipartisan support. you referenced another problem in my district which is many of our housing units are 40 years or more old. we have had the opportunity
through some investment to renovate some and reconstruct another. but really the capital needs are very, very great. just outside my district in philadelphia more than 60% of the housing stock was biltmore than 50 years ago. -- built more than 50 years ago. do you believe the american jobs plan funds will be able to cover the full scope of what is needed? if you had a magic wand what would be needed to make the repairs so that these are decent, as you say, energy efficient, safe, warm, dry places. secretary fudge: $40 billion is a down payment. we know that. we need so much more. it is estimated anywhere between $70 billion and $100 billion or more. what we do know is $40 billion is a great down payment to start to make the change we need to make. it is a commitment that i believe that housing authorities and others are welcoming because they know we never, ever given them these kinds of resources. so do i think it's enough?
no. do i think it's a great start? yes. ms. dean: thank you. i want to switch to something else i care passionately about which is ensuring proper housing for those who suffer from the disease of substance use disorder, addiction. or those with mental health ailments. we know oftentimes these people are unable to find affordable proper housing. they need to stabilize their lives, receive treatment, and begin to heal. what efforts is h.u.d. leading for these populations of people either struggling with the disease of addiction or mental health issues? what's h.u.d. doing about housing for them? secretary fudge: there is a carve out in the jobs plan that asks for billions of dollars for housing for the disainled which would include the population that you are referencing. ms. dean: thank you very much.
i hope we make sure it's a robust carve out for those. offline because i see my time is up we did signal over to your team that we want to talk about the problem of the definition of group home for those who are in recovery. an unlicensed group homes that are sometimes taking grave advantage of people who are in the greatest need. thank you, madam chair. i yield back. chair waters: thank you very much. the gentleman from tennessee, mr. kustoff, is recognized for five minutes. mr. kustoff: thank you, madam chair, and thank you, madam secretary, for appearing today. talk about something other than what we talked about here before. that is opportunity zones. if i could. we know that the opportunity zones were created in the tax cuts and jobs act of 2017. in my state of tennessee we had 176 opportunity zones, 32 in shelby county which is the memphis area, the area i
represent with congressman steve cohen. in 2019, i had the opportunity to tour one of those zones, an area called -- was called union rose, now called the walk. it's actually in congressman steve cohen's district. i toured that with your predecessor, secretary carson. if i could, madam secretary, could you talk about the biden administration's vision right now, is the biden administration opened to expanding opportunity zones? secretary fudge: i don't think they have taken a position at all at this point. certainly we are going to be talking about it because not only have senate members mings mentioned it as well, but it is something that some people feel very, very good about. we'll n having further conversations. mr. kustoff: to that point, can you talk about what specific changes, if any, or reforms the administration would look at through the existing opportunity zones or further
unit zones if you would, please. secretary fudge: we have not had the discussions. i don't know. mr. kustoff: thank you. could you also, madam secretary, talk about the biden administration, where the biden administration stands right now as to the biden aphrasal task force that h.u.d. was brought with the leadership -- secretary fudge: i'm the chair of the task force. what we are talking about is what we know to be true. that we have throughout this nation's history looked at property in certain communities, primarily those of black and brown, undervalued those homes. i live in an all black community by choice. my home is under valued compared to the community right next door to me, literally within walking distance. but my home is valued as much as $20,000 less than a comparable home in another community. we want to level the playing field.
mr. kustoff: i hear from a number of f.h.a. borrowers that they say they can't compete in the real estate market. sellers refusing to entertain offers, using f.h. ashes financing due to concerns with certain minimum property requirements, maybe with appraisal issues, concerns with the quality of the loan itself. can you tell about what f.h.a. is doing to combat the narrative and hopefully try to address these issues? secretary fudge: first thing is they can't be using appraisals for this. we just started the committee. if they have been having problems in the past it certainly wasn't that. i don't think that there is anything that i see no basis if they are concerned, they need to raise what those exact concerns are. but there is nothing that has been changed to this point that would create a problem for them. mr. kustoff: one last area. i appreciate you allowing me to jump top different issues. this involves the community development block grant program.
i think we can all agree it served a vital role. my question really is, with formula b, which uses pre--1940 housing units variable in determining grant sizes. my position would be that that essentially allows cities with large populations 80, 90 years ago to receive larger grants. i'll use my city of memphis as an example. in the year 2020, the city of baltimore received three times as much funding as memphis. despite baltimore having a lower population and property rate than memphis in current times. can you address, if you can address, whether you think that cbdg whether the formula is outdated and does need to be modernized? secretary fudge: i think we need to take a look at it just
like so many other formulas in h.u.d. we are in the process of evaluating where we stand. absolutely i think we should look at it. mr. kustoff: i appreciate that answer. i would appreciate if you could, your staff could follow up with my staff on any thoughts, proposals and maybe we can share ideas. secretary fudge: be happy to. mr. kustoff: with that i yield back. chair waters: thank you. the gentleman's time has expired. the the gentlewoman from texas, ms. garcia, is recognized for five minutes. ms. garcia: thank you, madam chair. thank you so much for this very important hearing and our invitation to madam secretary. madam secretary, it just sounds so great to say that. i'm going to say it again, madam secretary, welcome to your first hearing before financial services. i know many of us are joining us and stand with you in your success. if there is anything i or my office can do, please do not hesitate to call.
i want to focus on housing, particularly access to housing. research shows that access to housing equals a healthy productive society. access to housing means access to building generational wealth. it also means closing the racial wealth gap. it is estimated that between 2020 and 2040, 70% of new homeowners will be latino. and freddie mac found in 2019 there were 8.3 million mortgage ready, mortgage ready latinos age 45 and under. the national association of hispanic real estate professionals found that the top producing real estate firms are the ones that offer bilingual services throughout all stages of the home buying process. in light of this it is important to think about how we can use language access to expand access to housing. it is great to see that h.u.d.'s counseling agencies provide monthly -- multilingual
services. as you said about the homeless f. we don't provide services we set them up for failure. we want our home buyers to succeed. this is critical to home buyers struggling to navigate such a couple bersome financial decision. the american rescue plan provided $100 million for housing counseling to help struggling families stay in their homes. but housing does not always have the ability to assist homeowners with legal help when they need it. is h.u.d. reviewing how they can connect housing counseling with legal aid services in the future? if so, how is h.u.d. working with counseling agencies and legal aid services to ensure access for homeowners who do not primarily speak english? secretary fudge: yes. we right now have about $20 million from -- funds allocated by congress to assist with legal issues. especially it was designed of course for those who are facing
eviction. but it can be used for other things. we do have $20 million in house now that came from the rescue plan. in addition to which we do know as well that the wealth gap, or the gap between home ownership for black and white americans is as wide today as it was in 1968. so we understand very clearly the need to be sure that we can bring in black and brown people in a way that's comfortable to them. we do have resources and we are working on it daily to make sure -- ms. garcia: and address services for those who cannot speak english. secretary fudge: yes. ms. garcia: thank you so much. there is much being said about how many dollars have actually been spent. i think it's clear that you have said that 100% of the dollars have been obligated that were received. we all know as you also stated that the problem becomes, you send it to the states, and then
the states do not pull it out there -- put it out there quickly enough. or sometimes they sort of play with the money and don't do quite what we asked them to do. as you know you and i have visited about the situation where the cdbg dollars for disaster mitigation in houston. as they were handled in texas we had a hearing about that last week. it's just another example of how the dollars are sent that the governors sometimes governors from the other side of the aisle, in our case, they just decide to either delay or do their own formulas or do whatever they want to with the dollars. what can we do as lawmakers to prevent those situations from happening? what other guardrails, what other procedures can we do? is it possible that some of these dollars go directly to cities like houston who can
probably handle the dollars and had the resources and staff to quickly get those dollars out the door? secretary fudge: the good thing is cities like houston do get it directly because they are entitle cities, anything over 50,000 -- 500,000 people. i was in this before. they have their rights they should be able to do what they want to do. cities have their rights. now they want me to control t there is only so much we can do based upon the way that the law is written. but we are enforcing it as best we can. ms. garcia: i yield back. chair waters: thank you. the gentleman from georgia, mr. loudermilk, is recognized for five minutes. mr. loudermilk: thank you, madam chair. madam secretary, good to see you again. congratulations on your role. as you know primary funding source for many housing authorities is this monthly draw dunn dn from h.u.d. -- drawdown from h.u.d.
however guidance from the office of chief financial officer states h.u.d. auditors do not recognize interim directors, only permanent officials can obtain drawdowns. what that means is when housing authority has an interim director, transition period, it may not be able to access h.u.d. funds. interim directors were able to do this, to do drawdowns in the past. i'm not sure why the policy changed, but this is becoming a problem. and it is a problem with small cities, especially with small staffs. it recently happened in my district. the city of canton had an interim director and they were unable to draw down the money that they needed. they were able to come a one-time resolution with h.u.d., but there are thousands of state and local housing authorities in the country that frequently have executive directors leave their position and an interim director is appointed. understand the intent of the policy is potentially prevent
fraud, but there needs to be a process for interim directors to access the down loads. my question would be, is this something that you can look into and find a permanent solution so housing authorities, especially during this time period we are in right now, don't have to go through so many hoops to -- they have an interim director in the middle where they can actually access the funds. secretary fudge: absolutely. because if that's the case, we do need to look into it. there should be nothing -- that should not be an impediment to a drawdown. mr. loudermilk: i appreciate that. it was a one-time solution. if they don't have an executive director by the time the next month comes in, they have to go through that again. on another issue i would like to echo some of the concerns that's been raised regarding mismanagement of emergency rental assistance funds. the bipartisan december omnibus provide add structure for $25 billion rental assistance
program, but instead of continuing that program, democrats established an entirely new partisan program from scratch. this has created two different sets of rules for state and local governments to follow and has resulted in less than 4% of the funds being distributed so far. this has created some of potentially worse legislating i have seen with two different programs with two different sets of rules that already cities and states are trying to work through those. the question is, if congress consolidated the two programs into one, would that help get the funds out to renters more quickly? secretary fudge: i think that congress should do what they believe is best. i can't make a decision or judgment based on what congress will do. but i would say that the more streamlined the better. what h.u.d. does is follow the rules. when congress tells us how to do something that is what we do. mr. loudermilk: i understand that. with two sets of rules for two different types of programs that want to accomplish the
same thing, it's convoluted and already states and local governments have enough trouble dealing with federal government. with only 4% of the funds make tling down there -- making it down there, it seems to me if we can get a functioning rental assistance program into place, would there be a need for an eviction moratorium? secretary fudge: i think that the one thing we don't talk about is the -- the fact that these funds were put in place because of an emergency situation. i think coming out of covid either way we would have needed it because of covid. i don't know that as a general rule but certainly because of covid i would say yes. mr. loudermilk: even with the covid, only 4% being distributed, it seems to me if we could get the moneys to the people who need it, you wouldn't have to have the eviction moratoriums. with that, madam chair, i yield back. chair waters: thank you. the gentleman from -- the gentlewoman from iowa, mrs. axne, is recognized for five minutes.
mrs. axne: thank you, chairwoman. thank you, second fudge, for being here. it's great to have you here today. i want to start with a question on rental assistance. i know this has been run out of the treasury. i also know that h.u.d. has been helping state and local groups trying to run those programs. iowa state's program has not done well in getting the aid out. i believe at the end of june they had given out just about 2% of the funding they received. however, i don't -- quite understand why my republican colleagues here on the other side of the aisle are so hung up on the treasury here. i've got a local program in poke county given out more than 2/3 of the funding. it's the largest, most populated county in the state. we can get it out there. to the folks who need it. but apparently our state government can't. clearly this is not a question of the rules prevent it -- prevent tfplgt it's about the communities who have the will and knowledge to get the funding out and support the
people properly. secretary fudge, my question is can you share some of what h.u.d. sees as best practices here so we can encourage our state to adopt those. secretary fudge: the easiest thing is for communities whether it be the state or county or whoever to work with people who do this every day. most people who are at risk of eviction either have worked with social workers or we know who their landlords are. we need to do the work. they need to do the work. they want it to be easy. but they have to start to talk with people on the ground who are doing this every day. it's not hard to find out who they are and get thement resources. we also have made it somewhat cumbersome for the repters. we -- renters. we assume a certain amount of so physical at this case. we have put the onus on the renters. we have to find another way to get them the information they need to get the resources out.
mrs. axne: i look forward to continuing to work with you on those opportunities. i'll make sure to talk with the state about that. they sound like good ideas. i know as you mentioned in polk county they are working with those local groups. you're right, it works. i did want to also point out another thing i'm wondering about, our governor decided not to give people the three months of forward rent that they could. to me it seems like a pretty clear way to provide help to people without making the same person apply every single month. it's also going to make administering of this easier as well. is that something that you have seen elsewhere? do you agree that this would raise costs people have to apply repeatedly? secretary fudge: one of the complaints we get is too much paperwork. why create additional? mrs. axne: it would be a good thing for us to continue to move forward with that rent t would ease up the pressures on the application process. secretary fudge: absolutely. mrs. axne: i do hope our state
government can put this in place as it reconsiders passing up the opportunity to help more renters in the second round. i would like to move on to something i think could help with affordable housing across this country that's manufactured housing. which i think can be part of our solution to helping get a good solid roof over folks' heads. however, for those who own the home itself but rent the land, they don't get that benefit if the rent gets jacked up to the levels they can't afford or if the landlord kicks them out for no reason. forcing them to sell their homes, sometimes at a major loss. i had a constituent who had to sell their home for a 40% loss of what she paid for it just three years earlier because of these predatory tactics. secretary fudge, do you think there is more we can do to make manufactured housing communities work as affordable housing that truly prioritizes the tenants rather than solely focusing on extracting profit? secretary fudge: yes, we can. i have spoken with the
manufactured housing group. i have also spoken with tenants of not just public housing manufactured housing as well. we are working to try to work through some issues we think are going to be helpful. but they know that there is a problem and we know there is a problem. i do believe it can work. mrs. axne: are you pulling together best practices from some of those landlords who are doing the right thing? secretary fudge: absolutely. mrs. axne: i would love to see some of those. thank you so much for doing that. it's why i introduce add couple of bills to get these protections in place so things like this to don't. just so you know i got the nfered housing tenants bill of rights that would increase protections for renters in federally backed properties. and the m.h.c. preservation act that provides grants to precedent owned groups and others who might want to step up and own the places themselves and give those benefits to the residents. i hope we can work together on those to get people more protected and safe in their homes they currently live in
and other folks more opportunity for affordable housing. thank you so much, madam secretary, for all that you are doing. thank you for helping us move this agenda forward with the american people. i yield back. chair waters: thank you. the gentleman from ohio, mr. gonzalez, is recognized for five minutes. mr. gonzalez: thank you, madam chair. welcome, secretary fudge. my friend. good to see you. we miss you in cleveland, but cleveland is still very proud of you and grateful for your continued service to your country. i want to talk to you -- start off by talking about something we have spoken about in private which is veterans' homelessness. that's something that's a big issue in our country. certainly a big plyor of mine -- >> we'll leave the hearing in order to fulfill our long-term commitment to live coverage of congress. you can continue watching the hearing live online at c-span.org. the house about to gavel in. today expecting debate on several bills including one that would allow the federal trade commission to sue in federal