Joint Hearing on "Examining the Roles and Responsibilities of HUD and FEMA in Responding to the Affordable Housing Needs of Gulf Coast States Following Emergencies and Natural Disasters - Opening Statement and Parliamentary Directives
Before we begin, I would like to thank Mr. Cuellar and Mr. Thompson for requesting this joint hearing on examining the roles and responsibilities of HUD and FEMA in responding to the affordable housing needs of Gulf Coast states following emergencies and natural disasters.
As we saw several weeks ago during a hearing of this Subcommittee on the use of Community Development Block Grant Funds in the Gulf Coast, the region is far from a full recovery. That hearing revealed the challenges facing Gulf Coast states in using CDBG funds to replace their affordable housing stock. While CDBG funding has historically been used to rebuild and repair affordable housing damaged or destroyed as a result of natural disasters, it seems that there is no corollary funding source for the reconstruction of public housing following a disaster. This lack of funding only compounds the nation's disinvestment in public housing and the loss of public housing units.
The 2005 hurricanes were the deadliest and most expensive storms on record. Over 1 million housing units were damaged along the Gulf Coast as a result of the hurricanes in 2005, with half of the damaged units located in Louisiana, which bore the brunt of Hurricane Katrina. Total catastrophic losses from Hurricane Katrina are estimated at $40.6 billion, with uninsured losses much higher.
Thousands of public housing units were damaged during these storms. For example, in Mississippi, 2,695 units were damaged or destroyed. In New Orleans, 4,144 public housing units were damaged or destroyed. While most of the units in New Orleans could have been rehabilitated, HUD embarked upon the path of demolishing over 4,500 units.
But the redevelopment of the public housing units in Mississippi and New Orleans has a dedicated funding source. Mississippi is using $105 million in CDBG funds to rebuild, while HUD has secured over $700 million to fund its plan for New Orleans' public housing. While the funding for these projects is clear cut, in general, funding resources for public housing units damaged through disasters is not. Because any public housing unit damaged or destroyed as a result of a disaster should be replaced on a one-for-one basis, this lack of funding resources directly contributes to the loss of public housing units.
Section 9(k) of the U.S. Housing Act requires the Secretary of HUD to set aside up to 2 percent of the total amount made available under the Public Housing Operating Fund for the repair of public housing units damaged during disasters and other emergencies. However, this funding has never been made available. The FY 2000 VA-HUD Appropriations Act and subsequent appropriations acts have contained language expressly forbidding the use of funds for this purpose.
Although Congress has provided annual emergency capital needs funding for the repair of damaged public housing units, these funds have been subject to recapture. Moreover, the Administrations FY 2009 budget recommended no funding for emergency capital needs.
Unfortunately, the Memorandum of Understanding (MOU) entered into between HUD and FEMA does not allow housing authorities to apply for emergency funds from FEMA's Section 406 program, which can be used to repair other structures.
I am curious to know why—given the extremely limited funding resources available for the repair of damaged public housing units—the MOU between HUD and FEMA has not been updated to allow housing authorities to use Section 406 funds for repairs. I hope that our witnesses can shed some light on this situation.
Also, I am concerned about the current state of affordable housing in the Gulf Coast. Specifically, I am looking forward to hearing from our FEMA witness on the Agency's progress with moving families out of trailers that have tested positive for formaldehyde. I am extremely concerned about FEMA's draft 2008 hurricane season plan, which states that—contrary to public assertions made by Administrator Paulison—FEMA plans to house families in trailers as a "last resort" in the event of hurricanes this year.
We all know the dangers of this toxic chemical and we are well aware of FEMA's rush to empty out these trailers because of the proven health risks associated with formaldehyde exposure. Given these facts, I am eager to hear why the Agency is still considering trailers as a viable housing option following disasters.
I'm looking forward to hearing from our two panels of witnesses on the roles and responsibilities of HUD and FEMA in responding to the affordable housing needs of Gulf Coast states following emergencies and natural disasters. I would now like to recognize our Subcommittee's Ranking Member to make an opening statement.
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