The Administration’s Proposal to Preserve and Transform Public and Assisted Housing: The Transforming Rental Assistance Initiative
Congresswoman Maxine Waters (CA-35), Chairwoman of the Financial Services Subcommittee on Housing and Community Opportunity, delivered the following opening remarks during a full committee hearing on the Department of Housing and Urban Development's Transforming Rental Assistance Initiative:
"Thank you, Mr. Chairman.
I appreciate Secretary Donovan joining us for today's hearing on the Transforming Rental Assistance Initiative (TRA). TRA is designed to change the funding structure of the public housing program so that housing authorities are able to charge market rents, enabling them to receive a greater subsidy. Its other purpose is to enable the Department to consolidate its different rental programs into one. However, I have serious concerns about this proposal and how it would impact our public housing stock and the 1.2 million families who call this resource home.
Instead of receiving operating and capital funds from HUD, housing authorities would now have a long-term project-based assistance contract which would allow them to mortgage their public housing developments. I am very concerned about this aspect of the proposal.
First, I have questions about replacing public housing—which for the most part is affordable into perpetuity—with long-term contracts with a finite term. Under HUD's proposal, housing authorities would enter into 20 or 30 year contracts with HUD and at the end of that term, the owner would either renew the contract or allow it to expire, giving the tenants vouchers. We know that this model doesn't work. For example, as Ms. Montanez will testify on the second panel, since 1996, 400,000 affordable housing units have left HUD's inventory. This is why Chairman Frank has worked for several years on legislation that would encourage more owners to remain in the program when their contract expires.
Second, I am very concerned about the bill's one-for-one replacement provisions. The bill would allow developments in areas with an excess supply of affordable housing to replace 50 percent of public housing with vouchers. If TRA is supposed to preserve public housing, I fail to understand why vouchering out that housing is necessary for its preservation.
Third, I am concerned about what happens to public housing in the event of a foreclosure or bankruptcy. Right now we are in the middle of the worst foreclosure crisis this country has ever experienced. Many lenders made loans that simply weren't sustainable and homeowners subsequently defaulted on those loans. While the foreclosure of one home may be a tragedy, it is an event that only affects one family. The foreclosure of a public housing development would have a devastating impact for dozens—and in some cases—hundreds of families.
Finally, I am concerned about whether or not this proposal represents the privatization of public housing. I think there is value in public housing, particularly in the fact that it is "public" in the sense that its owners—housing authorities—are not profit driven. Public housing is very effective at serving the "hard to house" population—people who for one reason or another, can't navigate the private rental market. Allowing the private sector to enter may provide housing authorities with more capital, but for-profit actors will be looking for a profit. Neither this Congress nor this Administration should allow anyone to profit at the expense of public housing residents.
I am eager to hear the testimony of our witnesses today. Thank you, Mr. Chairman. I yield back the balance of my time."
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