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Congresswoman Maxine Waters Holds Hearing to Examine the Foreclosure, Affordable Housing Crises in the Twin Cities

January 25, 2010

Congresswoman Maxine Waters (D-CA), presided over a field hearing of the House Subcommittee on Housing and Community Opportunity, which she chairs, to assess how the foreclosure crisis has affected the availability of public and assisted housing in Minneapolis and St. Paul, Minnesota.

The hearing, entitled "The Impact of the Foreclosure Crisis on Public and Affordable Housing in the Twin Cities," took place at the Minneapolis Central Library and featured testimony from U.S. Department of Housing and Urban Development (HUD) administrators, local housing officials and state legislators, along with affordable housing advocates and constituents affected by the foreclosure crisis.  Joining Congresswoman Waters were Congressman Keith Ellison (D-MN), a member of the Subcommittee who represents Minneapolis, and Congresswoman Betty McCollum (D-MN) who represents St. Paul and who was considered a member of the Subcommittee during the hearing. 

"Today's hearing on the foreclosure and affordable housing crises in Minnesota was quite telling," said Congresswoman Waters. "I was particularly struck by the fact that for the two days the Minneapolis Section 8 voucher waiting list was open, over 15,000 families requested applications.  Though the need for housing assistance is large even in the best of times, the foreclosure crisis and recession have made more and more Minneapolis families vulnerable."

The Congresswoman has long recognized the need to connect the foreclosure crisis with the need for more public, assisted and affordable housing.  Nearly two years ago, Congresswoman Waters introduced the Neighborhood Stabilization Act to provide grants to state and local governments to purchase foreclosed housing and convert it into affordable housing for low- and moderate-income families.  The Congresswoman was able to authorize the Neighborhood Stabilization Program and secure $4 billion in NSP funds under the Housing and Economic Recovery Act of 2008, and another $2 billion in the stimulus package that Congress and President Obama put together and passed in February 2009.  Most recently, the Congresswoman led a group of Congressional Black Caucus lawmakers in securing an additional $1 billion in NSP funds under the Wall Street Reform and Consumer Protection Act of 2009, which passed the House of Representatives in December.  This third round of NSP funding is pending in the Senate.

Under the first round of NSP funding, the Minneapolis-St. Paul area received nearly $14 million in grants and the State of Minnesota received an additional $39 million.  Under the second round of funding, announced last week, the City of Minneapolis received about $19.5 million in funding, while the City of St. Paul received $18 million.

"Like my home city of Los Angeles, Minneapolis has some model approaches for how to successfully deal with the glut of foreclosed housing," said the Congresswoman.  "I am impressed by the relationships Minneapolis has developed with lenders which enable the city to buy foreclosed housing before speculative investors swoop in.  This way, foreclosed housing can become rental and ownership opportunities for people in the community, instead of sitting vacant while an investor allows the property to deteriorate and waits for the market to turn around."

Witnesses also reiterated the importance of funds under the stimulus package in preserving the supply of affordable housing and creating jobs for Minnesotans.  Under the stimulus bill, the Minneapolis Public Housing Authority (MPHA) received $18.2 million in funds.  MPHA has put nearly 96 percent of funds to work on "shovel ready" public housing repair projects. Additionally, under the stimulus bill, Hennepin County and the City of Minneapolis received $6.5 million to deal with the increase in homelessness caused by foreclosures and the recession.

"I thank Congressman Ellison for encouraging us to hold this field hearing in Minneapolis and for his dedication to housing issues. The testimony today has reiterated the fact that the increase in foreclosed and vacant housing unfortunately hasn't improved housing affordability for vulnerable households," said Congresswoman Waters.  "However, I am hopeful about the impact of NSP funds so far, along with the ideas I heard today from witnesses.  With a continued federal focus on assisting communities, we can empower public housing authorities and local governments to create more affordable units while also stabilizing communities."

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