Gulf Coast Multifamily and Assisted Housing Recovery Act

Mr. President, I come to the floor today to speak on behalf of some of our most in need gulf coast residents impacted by Hurricanes Katrina and Rita. As you know the gulf coast was devastated in 2005 by two of the most powerful storms to ever hit the U.S. in recorded history--Hurricanes Katrina and Rita. We also experienced the unprecedented disaster of having a major metropolitan city--the City of New Orleans--under up to 20 feet of water for two weeks when there were 28 separate levee failures which flooded 12,000 acres, or 80 percent of New Orleans, following Katrina.

In particular, I am speaking on behalf of our elderly and disabled residents impacted by these disasters. Many of these people are too frail or fragile to live on their own, yet they do not belong in a hospital. We have many people who been in seen homes or apartments for disabled and elderly residents, for adults who are not older but instead disabled through an accident or injury. In many cities, this type of housing is run by such organizations as Catholic Charities or other nonprofits. Right now in the gulf coast region, we desperately need more of this type of housing to take care of the most fragile people who either are without shelter or are without safe, affordable shelter with appropriate supportive services. One can imagine the challenges of providing sufficient housing for this group under normal circumstances. But here we find ourselves, dealing with the aftermath of a catastrophe, trying to provide additional housing for thousands of people now returning to the region.

According to the Congressional Research Service, 88,000 persons aged 65 or older were displaced by Hurricane Katrina--of that group 45,000 were 75 years of age or older. Furthermore, almost 15 percent of all displaced seniors had incomes below the poverty line. While recovery has primarily focused on restoring owner-occupied and rental housing, U.S. Department of Housing and Urban Development, HUD, assisted housing for our elderly and disabled residents has not received a great deal of attention. In particular, 123 properties of Section 202 housing, which serves elderly residents, and Section 811 housing, which serves disabled residents, were impacted by Hurricanes Katrina and Rita in my State alone. This includes 5,261 total units of 202/811 housing. As of February 2008, 602 of these units were still offline and I am aware that, for every unit of 202 housing, there are 10 eligible low-income seniors on the waiting list.

To further highlight the ongoing needs of the gulf coast, let me provide a snapshot of one community in my State--New Orleans East. In our Vietnamese community in New Orleans East, 6,000 people--or approximately 95 percent of the pre-Katrina population--have returned to the area. Of this 6,000,

it is estimated that 2,400 are seniors. The average age of these seniors is 72 years of age and 98 percent are considered extremely low- income according to HUD standards. This means that they earn below 30 percent of the area median income a year, or less than $12,550 a year. Of these seniors 82 percent receive supplemental security income as their only source of income--approximately $637 per month for a single household.

Prior to Katrina, there were six retirement communities in New Orleans East, consisting of about 735 units, serving this community. Presently none of them are in operation. This is not just a short-term recovery problem as the demand for age-restricted housing will continue to increase in the next few years, particularly in New Orleans East.

Given the ongoing needs in the southern part of my State in regard to damaged multifamily and senior/disabled housing, as well as all across the Gulf Coast, I am proud to introduce today the Gulf Coast Multifamily and Assisted Housing Recovery Act of 2008. I am joined on this bill by my colleagues Senator Thad Cochran and Senator Roger Wicker. This legislation includes some key provisions which should target assistance where it is most needed. The bill will also help to cut through some Federal red tape stalling redevelopment efforts in the region.

To address the affordable housing needs in my State, as well as across the gulf coast, our bill authorizes $125 million for additional Section 202 housing and $75 million for new Section 811 housing. This provision would create almost 1,500 new 202/811 units. The bill would also authorize $4 million to cover gaps for the redevelopment of former Section 202 housing in the City of New Orleans and St. Bernard Parish.

Another major problem in New Orleans East is that 50 seniors were living pre-Katrina at Versailles Arms, a project-based Section 8 housing development which has not reopened. I understand that a few weeks ago the community boarded up the development. While this property is sitting vacant--but vacant with a project-based contract still attached to it--Mary Queen of Viet Nam Community Development Corporation, MQVN, and Providence Community Housing have begun work on Phase I of the Mary Queen of Viet Nam Retirement Community. This project would provide 84 units of affordable senior housing. Their problem, however, is with the downturn in the tax credit market in the last 4 months, the equity investment will not be sufficient to cover the development costs. For example, the current rent structure, which is below the market rates, is not sufficient to support a mortgage to cover the development gap, so they are in need of a project-based subsidy to complete the project.

MQVN have been trying to work with our local housing authority, the Housing Authority of New Orleans, HANO, to secure project-based assistance for this project. However, as many of our developers have discovered, HANO has exhausted its 20 percent maximum set aside for project-based subsidies. This is troubling for those of us in Congress, especially for my colleagues and I who are members of the Senate Appropriations Committee. Last year, via the fiscal year 08 Supplemental Appropriations bill, we provided HANO with additional vouchers by allowing HUD to utilize pre-Katrina population figures in allocating Section 8 vouchers, rather than post-Katrina population figures. While there certainly are increased demands for such assistance, the fact that so many developments are in need of this type of assistance and that HANO lacks the necessary resources to fully address needs on the ground raises many questions. For my part, I do not have all the answers but I can provide a commonsense solution to address the need for project-based assistance in New Orleans and the rest of the gulf coast.

Each year, in the Transportation, Housing and Urban Development Appropriations bill, there has regularly been legislative authority for HUD to transfer some or all project-based assistance associated with one or more multifamily housing projects to another multifamily housing project or projects. In the fiscal year 06 Appropriations bill, Public Law 109-115, Section 318 addressed this issue, and in the fiscal year 08 Omnibus Appropriations bill, Public Law 110-161, which passed the Congress in December 2007, this language was contained in Section 215. While this language is discretionary, not mandatory, it does provide HUD with the legislative authority to transfer project-based assistance from a damaged or vacant property to another property, with certain restrictions. However, as I mentioned, this annual language is discretionary so HUD is not required to review and approve transfer requests. This has proven to be the main obstacle for housing organizations. Some of these properties have been destroyed and, rather than asking for new project-based contracts, the developers simply want to transfer the existing ones to new buildings. This would maximize existing resources, and in many cases, could help communities build housing which could better resist future disasters.

While HUD currently has this transfer authority, there have been numerous instances post-Katrina where HUD has failed to quickly implement such transfers. For example, Mississippi Methodist Senior Services, MMSS, is a nonprofit which, despite testifying before Congress last year, ended up having its Section 318 transfer request rejected by HUD. It subsequently lost 65 units of elderly housing. This is even more troubling as MMSS was the first non-profit in Mississippi to provide affordable housing for seniors. So this is a group with extensive experience in senior housing--one with deep roots in the community. The nonprofit had seven properties throughout the State, serving 1,800 seniors daily. One of its properties in Biloxi had significant wind damage and suffered 2 feet of Gulf water on the first floor. Upon further inspection, there was additional damage found and their insurance company determined it would only cover repairs on the first floor. This left MMSS with an uninhabitable building and a $1 million gap between insurance and the amount that was necessary for repairs.

To redevelop the property and provide badly needed housing, MMSS intended to transfer the 65 units of project-based assistance to a new site further inland. The new site would be in a better position to avoid gulf coast waves and weather patterns. As with most gulf coast groups in this situation, MMSS submitted a Section 318 request and started working with HUD to prepay the existing mortgage, sell the property, and transfer the Section 8 contract. However, in December 2006, HUD eventually refused the transfer, forcing MMSS to abandon the contract and sell the property. This resulted in the loss of housing for 65 elderly families. Our observation of these failures has led us to believe there is a need for Congress to enact stronger legislation on this issue.

To address this issue, the legislation I am introducing would tackle this problem in three important ways. First, this bill would require HUD to maintain project-based contracts in declared Katrina and Rita areas until the date specified in the contract or not less than 3 months after the property is made habitable. This provision would ensure that there is no loss of current project-based contracts. Next, the bill would require HUD to review and approve any feasible transfer proposal made by owners of damaged/destroyed multifamily housing. The language in this bill tracks Section 215 language from the fiscal year 08 Omnibus, except that we limit this requirement for Alabama, Mississippi, and Louisiana and sunset it on October 1, 2009. These restrictions are to ensure that it is strictly for recovery purposes. Lastly, to get a full picture of the number of units that may have been lost, the bill requires that HUD report to Congress on the number and location of project-based contracts which have been cancelled since the storms. These key provisions would make a real difference not only for MQVN in New Orleans East but for countless providers of multifamily housing across the gulf coast.

As chairman of the Homeland Security Subcommittee on Disaster Recovery, I have been working with my Senate colleagues to push for better Federal Government disaster preparedness. Therefore, in addition to addressing current needs on the gulf coast, the bill also looks forward to future disasters. This bill requires that, not later than June 1, 2008--the start of the 2008 Atlantic Hurricane season--that HUD

provide Congress with a disaster response plan for HUD-assisted Section 202/811 properties. A number of recommendations have been made to HUD by the affordable housing community on regulatory waivers and funding gaps that the agency will face in future disaster situations. There is no reason that HUD, or Congress for that matter, should have to expend future resources, time, and energy to address some of the similar issues which this bill is attempting to address for Katrina and Rita areas. Lessons learned from Katrina and Rita have been well documented by Congress. It is now time that HUD improves its preparedness and response to disasters which could impact assisted properties.

In closing, let me reiterate that this bill addresses one of the most fundamental needs following a disaster: the need to return home. For our elderly and disabled residents, a safe and affordable home is even more essential. Many gulf coast residents lost homes, family members, and pets, among other things. It is our obligation as a city, county/ parish, State, and as a nation to help. So I am here today, for my part, to try to put forward legislation which I strongly believe will make a real difference for those most in need in the gulf coast region. I urge my colleagues to support this bipartisan recovery legislation as these disaster victims are counting on the United States Senate for action.

Mr. President, I ask unanimous consent that the text of the bill and supplemental material be printed in the Record.

Mr. President, I come to the floor today to speak on behalf of some of our most in need gulf coast residents impacted by Hurricanes Katrina and Rita. As you know the gulf coast was devastated in 2005 by two of the most powerful storms to ever hit the U.S. in recorded history--Hurricanes Katrina and Rita. We also experienced the unprecedented disaster of having a major metropolitan city--the City of New Orleans--under up to 20 feet of water for two weeks when there were 28 separate levee failures which flooded 12,000 acres, or 80 percent of New Orleans, following Katrina.

In particular, I am speaking on behalf of our elderly and disabled residents impacted by these disasters. Many of these people are too frail or fragile to live on their own, yet they do not belong in a hospital. We have many people who been in seen homes or apartments for disabled and elderly residents, for adults who are not older but instead disabled through an accident or injury. In many cities, this type of housing is run by such organizations as Catholic Charities or other nonprofits. Right now in the gulf coast region, we desperately need more of this type of housing to take care of the most fragile people who either are without shelter or are without safe, affordable shelter with appropriate supportive services. One can imagine the challenges of providing sufficient housing for this group under normal circumstances. But here we find ourselves, dealing with the aftermath of a catastrophe, trying to provide additional housing for thousands of people now returning to the region.

According to the Congressional Research Service, 88,000 persons aged 65 or older were displaced by Hurricane Katrina--of that group 45,000 were 75 years of age or older. Furthermore, almost 15 percent of all displaced seniors had incomes below the poverty line. While recovery has primarily focused on restoring owner-occupied and rental housing, U.S. Department of Housing and Urban Development, HUD, assisted housing for our elderly and disabled residents has not received a great deal of attention. In particular, 123 properties of Section 202 housing, which serves elderly residents, and Section 811 housing, which serves disabled residents, were impacted by Hurricanes Katrina and Rita in my State alone. This includes 5,261 total units of 202/811 housing. As of February 2008, 602 of these units were still offline and I am aware that, for every unit of 202 housing, there are 10 eligible low-income seniors on the waiting list.

To further highlight the ongoing needs of the gulf coast, let me provide a snapshot of one community in my State--New Orleans East. In our Vietnamese community in New Orleans East, 6,000 people--or approximately 95 percent of the pre-Katrina population--have returned to the area. Of this 6,000,

it is estimated that 2,400 are seniors. The average age of these seniors is 72 years of age and 98 percent are considered extremely low- income according to HUD standards. This means that they earn below 30 percent of the area median income a year, or less than $12,550 a year. Of these seniors 82 percent receive supplemental security income as their only source of income--approximately $637 per month for a single household.

Prior to Katrina, there were six retirement communities in New Orleans East, consisting of about 735 units, serving this community. Presently none of them are in operation. This is not just a short-term recovery problem as the demand for age-restricted housing will continue to increase in the next few years, particularly in New Orleans East.

Given the ongoing needs in the southern part of my State in regard to damaged multifamily and senior/disabled housing, as well as all across the Gulf Coast, I am proud to introduce today the Gulf Coast Multifamily and Assisted Housing Recovery Act of 2008. I am joined on this bill by my colleagues Senator Thad Cochran and Senator Roger Wicker. This legislation includes some key provisions which should target assistance where it is most needed. The bill will also help to cut through some Federal red tape stalling redevelopment efforts in the region.

To address the affordable housing needs in my State, as well as across the gulf coast, our bill authorizes $125 million for additional Section 202 housing and $75 million for new Section 811 housing. This provision would create almost 1,500 new 202/811 units. The bill would also authorize $4 million to cover gaps for the redevelopment of former Section 202 housing in the City of New Orleans and St. Bernard Parish.

Another major problem in New Orleans East is that 50 seniors were living pre-Katrina at Versailles Arms, a project-based Section 8 housing development which has not reopened. I understand that a few weeks ago the community boarded up the development. While this property is sitting vacant--but vacant with a project-based contract still attached to it--Mary Queen of Viet Nam Community Development Corporation, MQVN, and Providence Community Housing have begun work on Phase I of the Mary Queen of Viet Nam Retirement Community. This project would provide 84 units of affordable senior housing. Their problem, however, is with the downturn in the tax credit market in the last 4 months, the equity investment will not be sufficient to cover the development costs. For example, the current rent structure, which is below the market rates, is not sufficient to support a mortgage to cover the development gap, so they are in need of a project-based subsidy to complete the project.

MQVN have been trying to work with our local housing authority, the Housing Authority of New Orleans, HANO, to secure project-based assistance for this project. However, as many of our developers have discovered, HANO has exhausted its 20 percent maximum set aside for project-based subsidies. This is troubling for those of us in Congress, especially for my colleagues and I who are members of the Senate Appropriations Committee. Last year, via the fiscal year 08 Supplemental Appropriations bill, we provided HANO with additional vouchers by allowing HUD to utilize pre-Katrina population figures in allocating Section 8 vouchers, rather than post-Katrina population figures. While there certainly are increased demands for such assistance, the fact that so many developments are in need of this type of assistance and that HANO lacks the necessary resources to fully address needs on the ground raises many questions. For my part, I do not have all the answers but I can provide a commonsense solution to address the need for project-based assistance in New Orleans and the rest of the gulf coast.

Each year, in the Transportation, Housing and Urban Development Appropriations bill, there has regularly been legislative authority for HUD to transfer some or all project-based assistance associated with one or more multifamily housing projects to another multifamily housing project or projects. In the fiscal year 06 Appropriations bill, Public Law 109-115, Section 318 addressed this issue, and in the fiscal year 08 Omnibus Appropriations bill, Public Law 110-161, which passed the Congress in December 2007, this language was contained in Section 215. While this language is discretionary, not mandatory, it does provide HUD with the legislative authority to transfer project-based assistance from a damaged or vacant property to another property, with certain restrictions. However, as I mentioned, this annual language is discretionary so HUD is not required to review and approve transfer requests. This has proven to be the main obstacle for housing organizations. Some of these properties have been destroyed and, rather than asking for new project-based contracts, the developers simply want to transfer the existing ones to new buildings. This would maximize existing resources, and in many cases, could help communities build housing which could better resist future disasters.

While HUD currently has this transfer authority, there have been numerous instances post-Katrina where HUD has failed to quickly implement such transfers. For example, Mississippi Methodist Senior Services, MMSS, is a nonprofit which, despite testifying before Congress last year, ended up having its Section 318 transfer request rejected by HUD. It subsequently lost 65 units of elderly housing. This is even more troubling as MMSS was the first non-profit in Mississippi to provide affordable housing for seniors. So this is a group with extensive experience in senior housing--one with deep roots in the community. The nonprofit had seven properties throughout the State, serving 1,800 seniors daily. One of its properties in Biloxi had significant wind damage and suffered 2 feet of Gulf water on the first floor. Upon further inspection, there was additional damage found and their insurance company determined it would only cover repairs on the first floor. This left MMSS with an uninhabitable building and a $1 million gap between insurance and the amount that was necessary for repairs.

To redevelop the property and provide badly needed housing, MMSS intended to transfer the 65 units of project-based assistance to a new site further inland. The new site would be in a better position to avoid gulf coast waves and weather patterns. As with most gulf coast groups in this situation, MMSS submitted a Section 318 request and started working with HUD to prepay the existing mortgage, sell the property, and transfer the Section 8 contract. However, in December 2006, HUD eventually refused the transfer, forcing MMSS to abandon the contract and sell the property. This resulted in the loss of housing for 65 elderly families. Our observation of these failures has led us to believe there is a need for Congress to enact stronger legislation on this issue.

To address this issue, the legislation I am introducing would tackle this problem in three important ways. First, this bill would require HUD to maintain project-based contracts in declared Katrina and Rita areas until the date specified in the contract or not less than 3 months after the property is made habitable. This provision would ensure that there is no loss of current project-based contracts. Next, the bill would require HUD to review and approve any feasible transfer proposal made by owners of damaged/destroyed multifamily housing. The language in this bill tracks Section 215 language from the fiscal year 08 Omnibus, except that we limit this requirement for Alabama, Mississippi, and Louisiana and sunset it on October 1, 2009. These restrictions are to ensure that it is strictly for recovery purposes. Lastly, to get a full picture of the number of units that may have been lost, the bill requires that HUD report to Congress on the number and location of project-based contracts which have been cancelled since the storms. These key provisions would make a real difference not only for MQVN in New Orleans East but for countless providers of multifamily housing across the gulf coast.

As chairman of the Homeland Security Subcommittee on Disaster Recovery, I have been working with my Senate colleagues to push for better Federal Government disaster preparedness. Therefore, in addition to addressing current needs on the gulf coast, the bill also looks forward to future disasters. This bill requires that, not later than June 1, 2008--the start of the 2008 Atlantic Hurricane season--that HUD

provide Congress with a disaster response plan for HUD-assisted Section 202/811 properties. A number of recommendations have been made to HUD by the affordable housing community on regulatory waivers and funding gaps that the agency will face in future disaster situations. There is no reason that HUD, or Congress for that matter, should have to expend future resources, time, and energy to address some of the similar issues which this bill is attempting to address for Katrina and Rita areas. Lessons learned from Katrina and Rita have been well documented by Congress. It is now time that HUD improves its preparedness and response to disasters which could impact assisted properties.

In closing, let me reiterate that this bill addresses one of the most fundamental needs following a disaster: the need to return home. For our elderly and disabled residents, a safe and affordable home is even more essential. Many gulf coast residents lost homes, family members, and pets, among other things. It is our obligation as a city, county/ parish, State, and as a nation to help. So I am here today, for my part, to try to put forward legislation which I strongly believe will make a real difference for those most in need in the gulf coast region. I urge my colleagues to support this bipartisan recovery legislation as these disaster victims are counting on the United States Senate for action.

Mr. President, I ask unanimous consent that the text of the bill and supplemental material be printed in the Record.

Mr. President, I ask unanimous consent that the text of the bill be printed in the Recod.

There being on objection, the text of the bill was ordered to be