Patrick McHenryChairman

Washington, October 22, 2015 -

The Financial Services Committee continued its in-depth examination of federal housing policy with a hearing today focused on the role of the Department of Housing and Urban Development (HUD).

One of the chief weapons in the “War on Poverty” launched by President Lyndon Johnson, HUD became a cabinet-level agency 50 years ago last month.

“In its history HUD has clearly achieved good. It has made commendable progress to aggressively fight immoral and illegal racial discrimination in housing. It has proven vital to many of our low income elderly and disabled citizens and has undoubtedly made poverty more tolerable. But it also has dramatically failed to meet President Johnson’s noble aspirations, much less deliver any measurable results. In fact, poverty levels are largely unchanged since HUD’s creation,” said Chairman Jeb Hensarling (R-TX).

“With some notable exceptions, HUD’s public housing projects are typically any city’s most despairing places, where generations of poverty-stricken families are warehoused and sealed off from the best schools, best job opportunities and the safest neighborhoods,” Hensarling added.

Key Takeaways:

• Despite 50 years of experience and $1.655 trillion in cumulative annual appropriations, HUD is ill-suited to address poverty by moving Americans from lives of government dependence to self-sufficiency. 

• Federal housing policy requires an entirely new paradigm, designed for an inclusive free enterprise economy.  HUD is in dire need of an overhaul and a modernized mission.  The agency is plagued with inefficient and outmoded programs that suffer from the Department’s inability to spend appropriated funds in a timely manner, which results in huge balances of unexpended taxpayer funds.

• We must reform and innovate how we provide assistance for housing in the 21st century with a higher purpose than simply warehousing and marginalizing the poor, or we will fail the very people who are in most need of liberation from dependency.
  

• Free enterprise has lifted more people out of poverty than all of Washington’s bureaucratic anti-poverty programs combined.

Topline Witness Quotes:

“The Moving to Work (MTW) demonstration has had transformational impacts and has proven very effective. With the support of Congress and HUD, the MTW Program has expanded to include 39 local housing agencies. Like HOPE VI, the MTW demonstration program has also been criticized by the advocates. Both programs are a reminder that transformational change is hard work…Housing policy is education policy and education policy is housing policy. Coordinated efforts should be made to de-concentrate poverty in neighborhood schools to power-up school reform efforts and strengthen the long-term sustainability of newly developed mixed-income communities and neighborhood schools.” – Renee Glover, Chair of the Board for Habitat for Humanity International and former President and Chief Executive Officer of the Atlanta Housing Authority

“At its 50th anniversary, it is a good time for HUD to think about how it can become not just a funder of housing…Its goal today should no longer be cutting ribbons on new apartment complexes but encouraging our subsidized housing of all kinds to be a means to help those of low-income move up along the path of upward mobility.” – Howard Husock, Vice President of Research and Publications, Manhattan Institute

“HUD has a really difficult time when it perceives a somewhat unsupportable, misplaced federal prerogative that competes with a legitimate state or local prerogative.  For example, a HUD-articulated federal policy might condition the use of federal resources upon the state or local recipient undertaking certain acts important to HUD that will clearly undermine both the federal and local mission and are not legally required.  The state or local government might offer a workable solution, but HUD decides that those solutions might conflict with their desired federal outcome even though the local idea is more viable and might also be indispensable to the local undertaking.” – Orlando Cabrera, former Assistant Secretary for Public and Indian Housing at HUD