On June 12, HUD Secretary Julián Castro testified again before the House Committee on Financial Services during a hearing titled, “The Future of Housing in America: Oversight of the Department of Housing and Urban Development.” Secretary Castro had previously testified before the Committee in February (see Memo, 2/17).
As HUD approaches its 50th anniversary in September 2015, the Financial Services Committee, led by Chair Jeb Hensarling (R-TX), has paid particular attention to examining the efficacy and success of HUD programs. A common theme among Republican Committee members was that merely providing a stable home for America’s poorest families – who might otherwise be forced to live on the street – is not enough to measure success. The members wanted hard data showing what happens to HUD residents once they leave subsidized housing programs.
In his opening statement, Chair Hensarling said, “HUD was established…to become the… main weapon [in] combating poverty, rebuilding our cities, and making housing more affordable for all. Yet, by nearly every official measure, poverty and its consequences are as bad as they were 50 years ago. For whatever good HUD does, it clearly has not won the war on poverty. Only economic growth and equal opportunity can do that. In other words, the greatest housing program in America remains a good career path and a growing economy, not a HUD program. If we truly care about the least of these among us, we can no longer measure success by the number of dollars appropriated to HUD. Instead, success must be measured in the number of our fellow citizens who rise from lives of poverty and dependency to lives of hope, self-sufficiency, and pride.”
Chair Hensarling later asked Secretary Castro how he would measure success. In response, Secretary Castro said, “We measure success in several ways. One outcome is the fact that somebody has a roof over their head. That makes a tremendous difference in their lives. However, I believe that we need to continue to measure when we invest in things like Jobs Plus, Family Self-Sufficiency, the ROSS program, the extent to which those individuals that go through those programs go on and get good job training and get a job, the extent to which they get a good education and that they are able to move.”
Countering the notion that HUD programs have proven ineffective, Ranking Member Maxine Waters (D-CA) said, “HUD provides critical rental and homeless assistance for our country's most vulnerable populations; makes important investments in local community development and affordable housing initiatives; and helps millions of families achieve the American Dream of home ownership, all while ensuring fairness for historically disadvantaged communities. [O]ur nation is facing a significant affordable rental housing shortage. Although private capital has an important role to play on this front, it cannot be leveraged without reliable federal funding. To truly address the acute need for affordable rental housing and the epidemic of homelessness, it is absolutely critical that we fully fund and expand the housing and homeless assistance programs that have been so successful at HUD.”
Representative Brad Sherman (D-CA) added, “I want to recognize that Section 8 and other housing programs are successful in every one of our districts, and that a housing program has to chiefly be evaluated based on whether it provides housing, and getting people off the street and in housing is a good thing.”
Two members of the Committee spoke of their own experiences growing up in public housing and credited these programs for helping them, their families, and friends be successful. Representative Gregory Meeks (D-NY) stated, “Let me just identify myself as a proud product of public housing. And my whole family, all of whom are doing fairly well now, I don't know how well we would've done or how my parents would have been able to do what they did without public housing.” Representative Stephen Lynch (D-MA) added, “I grew up in the Old Colony housing project in South Boston with five sisters. It has been described as one of the poorest predominantly white census tracts in the nation. And we considered ourselves very, very fortunate to have a home. And listening to this debate here today about the question that was posed earlier: Does HUD's affordable housing program work? I guess from listening to the debate, if your family has not struggled, no explanation is possible. But if you have actually lived in public housing, no explanation is necessary. You understand what that means.”
In discussing the affordable housing crisis, Secretary Castro cited NLIHC’s latest edition of Out of Reach when pointing out that a minimum wage worker cannot afford a one-bedroom apartment in any city in the United States, and referenced NLIHC President Sheila Crowley’s April testimony before the Committee about the lack of affordable housing for extremely low income families. Because of this crisis, Secretary Castro said that the country needs HUD programs like the National Housing Trust Fund (NHTF), which he called a powerful tool in creating more affordable housing opportunities for extremely low income households. He stated, “[W]e're disappointed in the T-HUD [Appropriations Subcommittee]'s recommendation that [the NHTF] be essentially wiped away and that HOME take its place. Those two programs have separate identities.”
Several members of the Committee also took the opportunity to attack the Fair Housing Act’s disparate impact standard and HUD’s forthcoming Affirmatively Furthering Fair Housing (AFFH) rule. Representative Scott Garrett (R-NJ) argued that the Fair Housing Act’s disparate impact standard led to expensive and frivolous lawsuits that hurt the housing market. Secretary Castro countered that the disparate impact standard gives “defendants an opportunity to show that there’s a legitimate business reason for why statistics are the way they are,” and that plenty of lawsuits are summarily dismissed. Mr. Garrett’s amendment to the House THUD appropriations bill (H.R. 2577), which prohibits HUD from using funds to implement or enforce the disparate impact standard, was adopted by a vote of 231 to 195.
Representative Al Green (D-TX) spoke passionately about the need to protect the disparate impact standard, saying he would “not sit silently while the tools that are needed to fight invidious discrimination and help those who are in desperate need of assistance are eliminated. Under disparate impact, statistical analysis alone will not bring a victory to the plaintiff. The plaintiff has a further obligation to go on and show that there is a less discriminatory alternative. And absent that, the plaintiff will not prevail. Disparate impact is not a theory; it is a standard that 11 circuit courts have approved. And it bears a methodology by which one who is accused improperly can defend and win.”
Representative Mia Love (R-UT), a former mayor, expressed concerns that HUD’s AFFH rule will dictate the zoning laws of cities and localities. Secretary Castro responded that that was not the case and that he wished he had the AFFH rule’s assessment tool available to him when he was mayor of San Antonio, as it would have helped him understand how his administration could have ensured that people throughout the community had the opportunity for upward mobility.
Housing and Insurance Subcommittee Chair Blaine Luetkemeyer (R-MO) spoke of a recent roundtable discussion he and Subcommittee Ranking Member Emanuel Cleaver (D-MO) held. (NLIHC Vice President for Policy Linda Couch participated in the roundtable.) He took away from the meeting that public housing agencies (PHAs) need more flexibility to better utilize their assets and that there needed to be more consistency between HUD’s regional offices. He also spoke of deregulating PHAs, raising minimum rents, and expanding Moving to Work (MTW).
Mr. Luetkemeyer plans to introduce a housing bill in September. Later in the hearing, Representative Steve Stivers (R-OH) asked Secretary Castro to work with him on a bipartisan bill that Mr. Stivers plans to introduce to expand MTW. Secretary Castro agreed to do so.
Secretary Castro also spoke of the recently released proposed rule regarding Section 3 that he said gives communities stronger guidance on how to comply with the law. The purpose of Section 3 of the Housing and Urban Development Act of 1968 is to ensure that when HUD assists housing and community development projects, preference for some of the new jobs, training, and contracting opportunities that are created go to low income people and to the businesses that own them or that hire them, “to the greatest extent feasible.” Secretary Castro said, “Frankly, the track record is checkered for housing authorities out there in how much they have utilized Section 3 and we want there to be consistency in the utilization of Section 3.” NLIHC submitted comments on the proposed rule (see Memo 6/1).
Secretary Castro’s testimony is at http://financialservices.house.gov/uploadedfiles/hhrg-114-ba00-wstate-jcastro-20150211.pdf
Chair Hensarling’s opening remarks are at http://financialservices.house.gov/news/documentsingle.aspx?DocumentID=399226
Archived webcast of the hearing is at http://financialservices.house.gov/calendar/eventsingle.aspx?EventID=399191