PHADA Public Housing Authorities Directors Association 511 Capitol Court, NE Washington, DC 20002-4937 Telephone (202) 546-5445 FAX (202) 546-2280 Testimony of John Hiscox Executive Director - Macon, Georgia Housing Authority Before the U.S. House of Representatives Subcommittee on Housing and Community Opportunity Honorable Rick Lazio Chairman March 6, 1997 Mr. Chairman, members of the subcommittee, my name is John Hiscox. I am the Executive Director of the Macon, Georgia Housing Authority, which serves over 4,000 families who will be vitally affected by your work today. I am testifying today in my capacity as Vice President of Legislation for the Public Housing Authorities Directors Association (PHADA). As you may know, PHADA represents the professional administrators of about 1,650 housing authorities from all over the United States. On behalf of the organization's entire membership, thank you for giving us the opportunity to testify before this esteemed panel. Mr. Chairman, you and other members of this subcommittee and your counterparts in the Senate worked diligently to enact comprehensive public housing reform legislation during the previous congressional session. You eschewed tinkering at the margins and instead proposed bold restructuring of the public housing programs, which is sorely needed. Unfortunately, you ran out of time near the session's close and were forced to put the legislation on hold until 1997. To the credit of you and your staff, you have produced a new bill quickly and are moving ahead full steam in an effort to complete action on the legislation as early as possible. PHADA appreciates the attention and effort you have dedicated to this important legislation. Our members want to work with you and the Senate throughout the current session as you seek enactment of a comprehensive public housing authorization bill. PHADA has already supplied you with our technical commentary on the legislation, and I would refer you to that document for a more thorough report outlining our positions on specific sections of the bill. Rather than repeating all of the intricate details mentioned in that paper, I would instead like to focus my remarks today on the broader policy considerations Congress should take into account as it begins formal deliberations on the bill. I will go through the issues in the order in which they appear in H.R. 2. The first point I want to touch upon concerns resident participation on housing authority boards of directors/commissioners. Our members oppose federal requirements that would supersede state or local law and mandate that housing authorities (HAS) have at least one elected resident on their board of directors/commissioners. Before proceeding further, I need to make it clear that PHADA does not object to the principle of resident participation on Boards. Indeed, for several years now, PHADA has been a leading advocate for greater resident participation in all aspects of public housing affairs. My own Authority has had a resident commissioner for the last fourteen years and it has been a most rewarding and useful addition. Rather, our opposition stems from the belief that such matters should be decided at the state and local level, which is certainly consistent with the underlying philosophy and objectives of this legislation. In our view, the bill contradicts its stated intent by actually taking authority away from localities, preempting state laws that direct the chief government official to appoint commissioners. We are also concerned with the mechanics associated with the provision, particularly as regards elections. Elections politicize the entire process, which contaminates both the governance of the HA and healthy resident organizations. Any legislation which prescribes the selection method also plays havoc with existing laws in many states that already provide for resident Commissioners. For this and many other reasons, we think it would be better to retain the current appointment procedures, which give the local governments the authority to decide who serves on boards using methods established by state law. The same criteria and methods should apply to resident commissioners for the same reasons. I next want to point out that PHADA strongly supports Section 104, which gives housing authorities the discretion to determine income exclusions and exempt portions of a family's unreimbursed medical expenses from rent calculations. We think this is a vast improvement over the current system, which creates disincentives for residents to seek work and move up the ladder of self sufficiency. This is an issue in which PHADA's members have a profound interest, and I will talk a little more about it in a few minutes. Moving on to the next major section, PHADA has many concerns about the eight hour work requirement and the self sufficiency contract. First and foremost, we are highly skeptical whether HAs will have the time and administrative capacity to run these programs without additional federal funds. This plan will be particularly difficult for small HAS to administer since they are already over-burdened and understaffed. Remember, more than 50 percent of the country's 3,400 HAs have 100 or fewer units, which in turn typically means a total staff of a single administrative employee and perhaps two maintenance employees. PHADA wishes to make it clear that we generally support the concept of a work requirement for families that are receiving public assistance. We believe, however, that the legislation is no longer needed because of the enactment of comprehensive welfare reform during the 104th congressional session. Under that historic statute, virtually every resident who is not already employed will be required to perform some type of work in return for public assistance. Language in paragraph (3) on page 27 of H.R. 2 specifically states that persons are exempt from the work requirement when they are "otherwise complying with work requirements applicable under other public assistance programs." Thus, HAs may end up exempting almost everyone from the requirement, but will still be forced operate and keep records for a redundant shell program. In short, we believe the provision in H.R. 2 is rendered moot because of welfare reform, and therefore request that the work requirement be removed from the bill. If the House is intent on including the work requirement in the bill, then we request certain modifications. First, please consider adding the word "volunteer" before "work" in all appropriate places in the bill. Second, we believe that you should specify that residents are permitted to self-certify compliance in order to relieve HAs of excessive record-keeping burdens. Third, and most importantly, we strongly believe that families who are exempted from state workfare requirements must also be automatically exempt from the requirement in H.R. 2, or the state exemption process is both subverted and the burden shifted to HAS. Surely this is not the intent of your legislation. For many similar reasons, we oppose the inclusion in the bill of a self-sufficiency contract for virtually all residents. While there is no question that the intent is laudable, we view this as a major new unfunded mandate that will create significant administrative burdens for HAS. Moreover, there is no realistic way this plan can be operated without a massive infusion of funds from Washington. We know this from our practical experience in administration of the Family Self-Sufficiency Program, which imposes similar requirements. Based on our review of FSS, we estimate that this program's potential costs may exceed $9 per unit month. Extrapolated to a national level, this new mandate would cost HAs (and HUD) about $129 million. Clearly, this requirement simply is not feasible given current budgetary projections for public and assisted housing programs. Again, we ask you to consider the administrative and financial impact on the very small housing authorities, with their tiny staffs and "no margin" budgets. Most importantly, we feel that the need for a self-sufficiency contract, like the work requirement, has been negated in the wake of last year's welfare reform law. As I mentioned a moment ago, that new statute will require all families to engage in some form of work in return for public assistance. The law also sets up a maximum five-year term of benefits for recipients and gives states the flexibility to create their own local work requirements and time limits. Finally, all states will require the equivalent of a self-sufficiency plan as a condition of receiving benefits. In light of all this, we strongly recommend that this section be eliminated from the bill. Moving on to the Low-income Housing Management Plan (LHMP), we believe this part of the legislation is in need of a significant overhaul. Specifically, we are concerned that H.R. 2 could unintentionally create more administrative burdens for housing authorities rather than streamlining the program. I mention this because so many additional requirements are placed on HAs to compile new types of data that will be subject to HUD review and approval. I refer you to our technical comments for some specific examples. If the Congress determines that the LHMP is needed, we believe that it could be significantly improved by altering the submission and approval process. Rather than requiring HUD review, we suggest letting HAs self-certify their plans. Self-certification can then be policed by requiring further review through the independent public audit (IPA) and allowing HUD to investigate in appropriate circumstances. This preserves program integrity while allowing HUD to focus its review resources using the same "risk management" methods the Department uses on most compliance issues now. We hope that the Congress will realize that HUD can not possibly perform a professional or timely review of the oncoming avalanche of LHMPs with their existing staff resources, much less when HUD is reduced to 7500 employees. Far better to have a reasonable system controlled by post-audit than the inevitable rubber stamp (perhaps punctuated with the occasional arbitrary application of authority) which would certainly result. The IPA system is already in place and, if necessary, an even stronger IPA could be designed to ensure accountability. If you do not accept this position, then at least the timing and submission procedures in the bill must be refined. As we envision the plans, they are to be submitted in conjunction with the start of each HA's fiscal year. Going in reverse order from the time the agency submits the final plan to HUD to when it must commence planning, let's look at the timing for an agency with a fiscal year that starts on January 1: October 1 -- Submit plan to HUD in time to give the Department 75 days to review September 25 - The HA's Board of Commissioners approves the final LHMP. August 1 -- LHMP subjected to local review, resident input, and public hearing. Under this scenario, the HA will have to begin work on its plan at least by mid-May, |