National issues

National fixes for post disaster housing programs

I have posted the testimony I presented to Congress regarding how the federal government can betterprovide long-term housing disaster assistance to low-income survivors in Texas. Here is a summary of what I suggested.

Recommendations

1. Waive duplication of benefits prohibition

A problem has emerged in the owner occupied rehabilitation program: “duplication of benefits” (DOB). Federal law requires that subsequent benefits for housing assistance, such as the CDBG owner-occupied repair program, be reduced by the amount of previously provided emergency assistance. It also requires homeowners to present documentation that previous small grants from FEMA were expended for “allowable” activities.

In administering the Round 1 program it was determined that about 75% of applicants had Duplication of Benefit (DOB) issues. About half could not prove how they used the full amount of funding they received from FEMA/SBA, but provided some receipts. Some survivors still have the full amount of funds they received from FEMA, but it is rare. We found that most had to spend it on necessities. At least 75% of Hurricane Rita survivors won’t be able to be assisted under the Round 2 program due to onerous duplication of benefits restrictions.

2. Allocate new Housing Choice Vouchers to Texas cities with large numbers of relocated survivors

The one third of Katrina evacuees who are elderly and disabled and living in Texas cities cannot reasonably be expected to be able to afford to pay market rents after the conclusion of the DHAP program. Further, many of the single mothers with children cannot be expected to pay such rents.

These families will, without a doubt end up having to apply for public housing or Section 8. Most already have applied which accounts for the 42,000 families on the Houston Housing Authority’s waiting list. This number would take decades to go through even if an additional 200-300 families were not seeking help at the housing authority every day.

Major Texas cities desperate need an additional allocation of Section 8 Housing Choice Vouchers. It is a matter of justice that the burden of housing the evacuees not fall unevenly of the cities that agreed to take them in.

3. Provide a supplemental appropriation of CDBG funds

Congress needs to appropriate a supplemental allocation of $1.2 billion in CDBG funds to Texas to address the long term housing needs of hurricane survivors.

Texas needs an additional $500 million to provide housing assistance to Hurricane Rita survivors. These funds would provide the resources assist 75% of the families who homes FEMA reports were destroyed or suffered major damage, increase the maximum level of housing rehabilitation assistance from $40,000 to $60,000, increase the maximum available to rebuild a home from $60,000 to $75,000, and provide for one-to-one outreach and case management assistance with home assistance applications for all elderly and disabled households.

Texas also needs $700 million (including new permanent Section 8 Housing Choice Vouchers) to provide long-term housing to the Hurricane Katrina survivors who have settled in Texas for the long term.

4. Develop cost effective architectural models for rebuilding low-income owner-occupied housing

A problem Texas is confronting is how to cost effectively provide large numbers of home reconstructions, in close proximity to one another in a timely and cost effective manner. A secondary problem is how to design the structures to avoid a similarity of design that gets the houses labeled “government housing” and how to architecturally integrate the homes into the fabric of existing communities.

The dictates of the Round 2 timeline means that Texas will probably not implement a good solution to these problems through this program, but TDHCA and the Texas housing community are aware of the challenges and are working together to devise a future solution. We call the pilot program the Texas Grow Home Project.

5. Develop an “on the shelf” state low-income housing rebuilding program

We should develop an “on the shelf” program to provide assistance in future disasters.

A federally funded planning grant should be provided to develop the program and an agreement should be developed with FEMA to provide funding to implement the approach and test it out in the next small scale disaster that affects a low income population in Texas

6. Pass the National Affordable Housing Trust Fund to expand the supply of rental housing available to extremely low income households

The National Housing Trust Fund is the correct program by which to finance the production of these housing units. We thus recommend that Congress enact and fully fund the National Housing Trust Fund and target the financial resources for the first two years of the program’s operation to providing funding to cities that received substantial numbers of evacuees. This funding for evacuee housing should be for the specific purpose of funding construction of affordable housing in desegregated, high opportunity neighborhoods.

7. Authorize waivers in LIHTC statutes and additional LIHTC allocation to produce more rental housing

Texas needs an allocation of an addition $30 million in Low Income Housing Tax Credits coupled with special waivers. Congress needs to give hurricane impacted states the flexibility to award additional tax credits (a 160 percent increase) to developers who agree to rent up to one-third of their apartments to very low-income families. This way, the State can adjust the credits to produce apartments with deeper subsidies that rent to families earning between roughly $18,000 and $26,000 a year.

8. Establish a fair housing counseling and “Moving to Opportunity” program in Houston to overcome the segregated housing patterns of Katrina evacuees created by the temporary housing program

We have identified three areas of fair housing concern with the State’s ongoing program.

1) The requirement under Round 2 that rebuilding or rehabilitation must occur on the homeowner’s property prevents families from moving from existing segregated neighborhoods into higher opportunity, integrated neighborhoods.

2) The City of Houston’s poorly designed program not only offers no opportunities for Katrina survivors to move out of the intensively segregated housing they were placed in under the Temporary Housing Program, but it also uses CDBG disaster relief funds to rehabilitate and enhance the existing segregated housing opportunities while providing no housing assistance outside of these neighborhoods.

3) The State’s proposed partnership between the FEMA Affordable Housing Pilot Program and the Harris County Housing Authority will create a subdivision of Katrina Cottage Demonstration units in a remote rural area of the county and will restrict occupancy to Katrina evacuees

We propose that Congress establish a “Moving to Opportunity” program to provide Housing Choice Vouchers, counseling and support services to help Katrina survivors in major cities move to higher opportunity areas.

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