Federal News Service - News Conference on Section 8 Housing - Transcript

Federal News Service May 4, 2004 Tuesday
Copyright 2004 The Federal News Service, Inc.
Federal News Service

May 4, 2004 Tuesday

HEADLINE: NEWS CONFERENCE ON SECTION 8 HOUSING

SPEAKERS: HOUSE MINORITY LEADER NANCY PELOSI (D-CA); REPRESENTATIVE BARNEY FRANK (D-MA)

LOCATION: HOUSE RADIO/TV GALLERY, THE CAPITOL WASHINGTON, D.C.

BODY:

REP. PELOSI: Good morning. Thank you all very much for coming. I'm very pleased to be here this morning with Congressman Barney Frank, the ranking member of the Financial Services Committee, long- time champion for affordable housing in our country. When I came to Congress 17 years ago Barney was in the lead on this issue at that time, and I saw firsthand the depth of his knowledge and the extent of his commitment on this subject. He knows firsthand from his district in Massachusetts the need for housing support at the federal level and how important Section 8 -- these Section 8 vouchers have been. So I'm very pleased that he will be making a presentation this morning about the challenge that we face to fight this fight and to win this fight to protect Section 8.

The budget, as you know, should be a statement of our national values. But for the fourth time in four years, the Bush administration and the Republicans in Congress are seeking to pass a budget that is nothing less than an assault on our national values. From health care to job creation to education, Republican policies simply do not respond to the challenges facing American families.

Housing is a prime example of distorted Republican priorities. While Republicans are happy to continue tax cuts for wealthy corporate interests, they are making cuts that threaten safe and secure homes for thousands of children and families across America.

Just over a week ago, in the middle of the fiscal year, the Department of Housing and Urban Development changed the rules and retroactively cut back funds for housing initiatives. Heartlessly, the administration is taking housing money away from needy families who were promised it. This is unheard of in our history and reveals a new level of belligerence on the part of the administration. The administration is breaking a 30-year promise to help low-income families, the elderly and the disabled to afford decent, safe housing. For the first time the government will no longer pay the full cost of the rent voucher. This will impact not only needy families, but also the private landlords who rent homes to them.

The consequences of the new ruling will be devastating. People already receiving Section 8 vouchers will either face dramatic rent increases or even lose their home.

(Searches documents.) Where are we now?

These policies are outrageous.

They are wrong. We must ensure that no family in America loses a safe, decent home in which to raise its kids because of the reckless cuts of this administration.

Again, I want to commend and thank Congressman Frank, Ranking Member Frank, for his very distinguished leadership and his act now to take-to correct this injustice.

Mr Frank.

REP. FRANK: Thank you.

First, I want to bring the apologies of Senator Kennedy, who has been very active in this and was planning to come. But they called a briefing at the Armed Services Committee, a closed briefing on this terrible issue of the abuse of the prisoners in Iraq. And that started a little while ago, and he felt the need as a member of the Armed Services Committee to be there.

This is a very important issue, both in terms of the budget and in terms of where the House is going. This administration has consistently, as we've I think documented and as the leader mentioned, sought to cut the Section 8 program. And we have to put that in context: It is seeking to cut back the Section 8 program, and that's the only program in the area of providing affordable housing which is has supported.

There was a striking statement by Secretary Jackson in which he said, Section 8 has become much too large a percentage of the federal budget. But that's logic because they've killed every other housing program in the federal budget. Section 8 has become the largest part of the federal budget not because of growth, but by the process of elimination, literal elimination. They've cut out any production program. They've cut back on public housing. So of course Section 8 gets bigger.

On the one hand-and this is the strategy-first, this administration has consistently, with the Republicans in Congress, blocked any effort to help construct housing that they could do. They have cut back on the general construction programs. When our committee voted-over the Republicans' objections but with a majority in our committee-to create a housing trust fund, a national housing trust fund that would provide funds to local governments, not funded through the FHA but funded through the regular appropriations process, the Republican leadership was told not to bring it to the floor by HUD. So we have only Section 8.

They have consistently cut back on Section 8. Last year and again this year, the administration proposed block-granting Section 8. And the block grant, it's important to understand, is a way to pass the buck on the cuts. The block grants that the administration has proposed in both cases, last year and this year, provided too little money to meet existing commitments. What they do with a block grant is to pass to the local communities the need to make the tough decisions. The administration does not provide in either last year or this year enough money to keep Section 8 going in its proposal, and it then leaves it to the communities.

Secretary Jackson has argued, by the way, that the problem with the Section 8 program is that the people it is helping are too poor. We have the article in which he said that. And he said what you need to do-you know, Lester Maddox once said that he could not do prison reform until he had a higher class of prisoners to deal with.

Secretary Jackson does not think we can provide housing for the poor unless the people we provide it for are not quite so poor. He said that the problem is these people can have Section 8 and they stay on it, and we need to get a wealthier cut of people on there, or less poor, so they will only be on it for a little while. And, of course, it is the case that you pay in Section 8 a percentage of your income. So the lower the income, the more Section 8 has to pay. These are his comments.

Now, every time any element in the Congress has voted on this block grant proposal, we have voted it down. Our committee this year in our budget views voted against it. And you know, the Republicans don't lose a lot, but they lose on this one. Last year an amendment that Congressman Nadler and others pushed, the House voted to increase Section 8 funding. What they have done is they have totally avoided going to the authorizing committee or to the floor of the House to deal with this restructure. It's a fundamental program restructuring. They haven't even put it in the appropriations bills that have gone to the floor of the House and that are subject to amendment. What they did in this case, the critical language that they are now using as justification for these cutbacks was added in conference as part of this omnibus bill that came to the floor, that was voted on over our objection, which was of course never subject to any debate, any vote that would allow an amendment. It was added after both houses had adopted their bills in conference in a way that made it impermeable. We are filing legislation today to repeal that language.

Now, HUD says, by the way, "Oh, poor us. We can't help it. We have to abide by that language." Of course HUD wrote the language. HUD wrote the language, slipped it in in the conference, wrote it in a deliberately obscure way. I've talked to Mr. Mollohan, who is the ranking Democrat, he never understood it to mean this. Senator Mikulski, who is the ranking Democrat on the Senate side, has written a letter to Secretary Jackson complaining about what he's doing. So the Democratic appropriators in both cases have disclaimed this.

HUD is saying well this is our intention. I do not think HUD needs to do this. But if in fact they are determined to, then we will call their bluff and we are filing this to repeal it. If HUD really doesn't want to do this but is simply being forced to do it by the mean old appropriators, then let them support our legislation. We can get an appropriations repeal through. It's a short sentence; we can repeal that and put back the old language it used to have.

In fact what we have is this is part of the administration's stealth attack on Section 8 because the frontal attack didn't work.

And just one last point. What they're doing-and this is across the country, we've seen from Florida, from Oregon, from Texas, from Minnesota, from Massachusetts, from New York-Governor Pawlenty of Minnesota, Governor Romney of Massachusetts have both very vigorously come out against it.

What they're talking about doing is applying this interpretation retroactively to January-this is how obscure it is; nobody knew it, apparently, when it was passed, including them-at least that's what we have to understand. Now they're retroactively applying it.

Housing authorities are being told they may have to evict existing tenants, or-and in some case both-cut the rents to landlords. Now that's a very serious issue. We've been told by this administration that they want private-public partnerships. We want to involve the private sector in fighting poverty. It's not easy to get responsible landlords into the Section 8 program, particularly in tight housing markets where we most need it. There are other options. What they are doing is jeopardizing our ability to get responsible landlords to work with us, because they are being retroactively told now that their contracts will be violated.

In one case, in Columbus, Ohio, where a religious-based, a Methodist-based group, which had a housing development with Section 8's that were attached to the development-project-based we call it-they've been told that, well, they knew that that was subject to appropriation and HUD's interpreted the appropriation to mean they're going to cut that back. The Private Bank of Boston has put out a statement, which I was just reviewing, saying they are now suspending their effort to develop a product-a home product-to take advantage of the Section 8 homeownership conversion because of this. So it's not only an incredibly cruel thing to existing tenants, but they're jeopardizing the ability of the process to go forward.

And what we think is, you know, they may, at the last minute, juggle the books and find a little here and find a little there, and prevent some of the evictions-maybe most of the evictions. But this is a preview of coming attractions. People should understand that what they have implemented by this sneaky language-language sneaked into the appropriations bill in a way that made it immune for any democratic-small "d" democratic-process is a preview of coming attractions. This is the way the program will be working.

And so, as I said, we are filing this bill and we expect, frankly-I've got people from all over the country complaining about this. I know two of my Republican colleagues-Congressman Tiberi, who's on the committee, the Financial Services Committee; and Congresswoman Pryce, the chair of the Republican Conference-have written to Chairman Oxley saying this is terrible, we've got to do something about this, because they represent Columbus, Ohio, which has been hit with this.

So if in fact this is an inadvertent result of language that wasn't fully understood, then let's repeal it. And let's also be very clear. We want to serve notice now to HUD: This kind of fundamental change in the most important remaining housing program cannot be done in this backhanded, underhanded way as part of an obscure appropriations amendment inserted only in conference. It has to be dealt with directly.

REP. PELOSI: Thank you very much, Congressman Frank, for your great leadership and for introducing the repeal legislation, which I'm pleased to join you in cosponsoring.

Thanks again for your leadership over and over again. As the House Democratic leader, I appreciate your leadership. As a representative of San Francisco in the Congress, I do as well.

There are already 27,000 people on the waiting list for Section 8 housing in San Francisco. Twenty-seven thousand. And the list has been closed since the fall of 2001. We need to increase access to Section 8, not decrease it.

The change is, of course, short-sighted. HUD has begun to notify, as you mentioned, 2,500 housing authorities around the country, leaving no time to adjust for this. Hopefully, they can find-what you said, patch some things together to help, to prevent the eviction of some people. But thousands of families now using housing support could be evicted from their homes and apartments in the next few months.

So we must fight this fight. And hopefully, inside the Congress, with your leadership and maneuvering and the outside mobilization that will be necessary, your repeal legislation as a free-standing bill or as the language in the appropriations bill will prevail.

With that, we'd be pleased to take any questions.

REP. FRANK: Let me just add one other thing because the administration is now sending the homeless coordinator around touting their new approach to homelessness. And it has a lot of good things in it from a policy standpoint, but I do not think the administration understands the literal meaning of the word "home-less." It means that people do not have homes. And the Section 8 program is a major source of the homes for these people.

So what we have is an initiative to diminish homelessness; they're going to pay $23 million a year, a year, for the whole country-this is this initiative-to help provide services. That obviously leaves nothing for anybody to have homes. And so on the one hand, they talk about their commitment to diminishing homelessness; on the other hand, they are exacerbating it drastically by cutting back on the one source of housing for the homeless.

REP. PELOSI: Any questions?

Q Has this rule change already gone into effect?

REP. FRANK: Yes. They have promulgated the rules change. And they have notified people of it. And they are now, across the country-it has a differential impact in different communities, because what it says is, instead of getting all that you need to keep your existing Section 8s, you can only get as much money as you had as of August of last year, with an inflation factor which is too low.

There's also another issue. They've told some communities, well, you can take the money, if you're hurt, out of your reserves on Section 8. But previously this administration has forced communities to spend those reserves, so some communities, as a result of HUD policies, don't have the reserves. Some are below the inflation factor, some are above it. So the rule has gone into effect, and community by community, people are now being told, well, this is the effect it's going to have.

It also varies according to when people's fiscal years are. Massachusetts has a June 30th end of the fiscal year, so we've been told it's going to happen right away. But the rule is in effect, and it's hitting people now.

And of course-and I want to stress this-this is hitting some, not others. If they have their way and the Appropriations Committee is pressured by the administration into repeating this language, then you'll see this in a much more widespread way, because this is just-this is a way for them to implement the block grant program without anybody in Congress actually voting on it head-on.

But the rule has been promulgated-the interpretation.

Yeah?

Q HUD has said that some agencies have mismanaged their Section 8 funds. Others have -- (off mike) -- more than they were allotted. Do you think that's a problem? And how do you --

REP. FRANK: If it is, they should do one at a time. It would be odd if all of a sudden all of these agencies across the country-in the entire state of Minnesota; you know, Columbus, Ohio; Massachusetts, under Governor Romney-I mean, we're not talking here about low-income cooperatives.

Secondly, it's probably because it's-to some extent, this is self-fulfilling. They have defined overspending in a way that-what people used to think was okay is now overspending. I mean, people didn't use-until a few weeks ago, people didn't know that they could only spend what they spent in August of last year, with HUD's minimal inflation factor.

By the way, one of the inflation factor doesn't take advantage of-take account of is-and it goes back to what Jackie said-the income of the tenants drops, because this is a program where the tenants pay 30 percent of their income. They-this administration has long fought that, by the way. They have long tried, in various ways, to make low-income people pay more than 30 percent of their income.

The notion, by the way, of a limitation on the income contribution was originally sponsored by a wild-eyed radical Republican senator named Edward Brooke. It was originally called the Brooke amendment, and it was a 25 percent cap. And under Reagan, it was lifted to 30 (percent).

So yes, it is true, by their definition, some people are overspending, but that's because they changed the definition retroactively.

There was a problem, by the way, we've had before too, with regard to-and it has to do with what they call overleasing. And this is one of the other ways they've run at it. You know, renting apartments for poor people is not an exact science, particularly in San Francisco and Boston and Chicago and places with a tough housing market. And not every landlord wants to go in. One of the problems we've had is finding willing landlords. They have, of course, driven landlords away by this, and I think they understood this. This will make it harder for us to get them.

But here's what happens. You're the housing authority, and you have a certain number of Section 8s. In some months, you're just, as hard as you try, not going to be able to fully use the allotment. So the way people have historically dealt with that is, they offset that. In another month, you might hit 103 percent, and then you hit 97 percent.

Now people have understood that, at the end of the year, it had to balance. They could only do a hundred percent. But to get a hundred percent, that meant some months you would go a little over, some months you'd go a little under.

HUD has now said in no month can you go over. Well, it's inevitable that in some months you're going to go under. So if you can never go over, and four or five months of the year you go under, by the end of the year, you're going to be at 98 percent, instead of a hundred percent. And then they use that 98 percent, and they ratchet you down.

So yes, in some cases there was this overleasing, but the overleasing, again, had always been in recognition of the program.

So no, there is no showing here of any massive-I mean, let's put it this way, this program has gone on for a long time. The administrating-administering agencies did not suddenly become massively incompetent, provoking this nationwide crisis.

Q Do you have any estimates of how many people -- (off mike) -- or how many people would lose their apartments?

REP. FRANK: It's clearly in the tens of thousands now if you look at the notices that have gone out to various people. It's hard to be sure because people have been given the option of reducing the rents. In Boston-the Boston housing authority has already had to try to reduce rents. But it's clearly in the tens of thousands now if you add up what was threatened in Columbus, Ohio and in Minnesota and in Massachusetts and elsewhere. I think in Massachusetts we were told 6,000, if I recall the number. And so, as I said, it's clearly in the tens of thousands, but that's just this year and the remainder of this year. If you-this is their program going forward.

REP. PELOSI: One figure is as high as 250,000 families across the nation who are currently receiving Section 8.

REP. FRANK: That's right.

REP. PELOSI: According-under the president's 2005 budget.

REP. FRANK: For next year, yeah.

REP. PELOSI: That's for next year.

REP. FRANK: Because you've only got a few months. But yes, it's clearly-because what it does is it freezes the dollar amount, so it's-you know, and housing inflation is starting to go back up again. And you know, one of the things-look, we've got energy costs going up, you know. It's not just gasoline that goes up but heating oil. In the Northeast a lot of people heat with oil. That's shooting way up, way above the administration's inflation factor.

REP. PELOSI: And incomes are coming down.

REP. FRANK: Yes.

REP. PELOSI: So the demand for these vouchers is increasing as well, which makes it all the more harmful to --

REP. FRANK: Right. Gross domestic product is going up, but incomes at the lower level have been eroded.

REP. PELOSI: Any more questions?

Q Lots of housing authorities have told me the same thing about this Catch-22 situation and --

REP. FRANK: The ratchet down, yeah.

Q Exactly. And pretty much have been saying we're all for reform and simplifying the programs to keep it separate from budget issues. But the block grant, is that something --

REP. FRANK: Absolutely. Look, when we-I mentioned the housing bill that we passed. It included a production program, a housing trust fund and it had some reforms to HOPE VI. It was a very-it passed our committee overwhelmingly, very-we had a fight over the housing trust bill, but it did pass. The Republican version of that won by one vote over the Democratic version. So it was still better than nothing. The administration wouldn't even let it come to the floor.

One piece of it had some reforms in the Section 8 program. I mean, one of these-have to say, this administration has not come to our committee, the authorizing committee, with any proposals to change the way we administer Section 8. There is no reform agenda on the table. And in fact, we initiated some reform things in the bill that passed a year before I became the ranking member of the full committee. I was still the Housing Subcommittee ranking member. So this is what, 2000.

And the people who talked to you are exactly right. They are using this argument about reform as a cover for cutting the budget. But Secretary Jackson gave it away. He said in one of the quotes-I think we gave this out-we cannot afford this increase in Section 8 costs in a wartime budget. It's priorities. I mean, that's Secretary Jackson's quote. It's a wartime budget. And so we are open to reforms in Section 8.

I will tell you this, they have made it harder because a key piece of Section 8 is to work with the landlords. And by this assault on the landlords, by-I mean, frankly, if some liberal Democrat had decided we're going to retroactively reduce the rents that landlords had agreed to pay, you would have people conjuring up the threat of Marxism.

This is what they're doing to accommodate their wartime budget.

So no, there's-I would tell you this; there is no reform agenda that has come out of HUD regarding the Section 8 program, except for the suggestion that they get a richer class of poor people.

REP. PELOSI: Thank you all very much.

Thank you, Barney. As always, it's like a Master class to hear him speak, and always with a sense of fairness and understanding of the issues. Thank you for your leadership.

END