News Releases

Murray Questions HUD Secretary Donovan on Housing Crisis, Supporting Washington State Families Hurt by Recession

Jun 11 2009

As Chairman of the Transportation, Housing, and Urban Development Subcommittee, Murray questions Donovan on details of HUD's proposed 2010 budget

LISTEN to Senator Murray’s opening statement

LISTEN to Senator Murray question Secretary Donovan - Q&A continued

(Washington, D.C.) – Today, U.S. Senator Patty Murray (D-WA), Chairman of the Senate Transportation, Housing, and Urban Development Appropriations Subcommittee, questioned Department of Housing and Urban Development Secretary Shaun Donovan on the department’s FY 2010 budget request.

Senator Murray focused her questions on how HUD plans to effectively use its resources to help families that are most affected by the housing crisis and recession, as well as how it will work to help our country avoid another housing disaster.

Senator Murray discussed Washington state housing issues in her opening statement. Below are excerpts:

“These dollars are already making a difference in my state. In Yakima, Washington funds appropriated for the Public Housing Capital Fund are being put to use to rehabilitate housing and are generating much-needed job opportunities.

“In Spokane, millions in funding has gone to eliminate dangerous lead-based paint from low-income homes and protect young children from lead poisoning. And I know that over the summer, as Recovery Act spending is accelerated, we will see further investments in providing safe, stable and affordable housing throughout the country.

“…In Pierce and Clark Counties in my home state, homes continue to remain on the market for 12 and 14 months.   So, it is critical—not just to the families facing foreclosure, but to communities across the country—that we find new ways to boost the housing market.”

Full opening statement follows:

“The Subcommittee will come to order. 

“Today this Subcommittee will hear testimony from Secretary Shaun Donovan on the President’s fiscal year 2010 budget request for the Department of Housing and Urban Development.  I want to welcome the Secretary back to the Subcommittee. 

“HUD’s many programs provide the resources and support to help hardworking families achieve homeownership, maintain safe and affordable housing,  and access the services they need. 

“Today, as our nation deals with a housing crisis and an economic recession, this discussion takes on added importance.
 
“Foreclosures remain at record levels, fully 32 percent higher than this time last year.  Meanwhile, unemployment is approaching 10 percent, its highest rate in 26 years.  As we continue to work through the economic mess left by the last Administration, we can expect increasing demand on HUD’s housing and community development programs.

“So, I am pleased that the starting point for this discussion is a budget that proposes substantial investments and innovative approaches that will move our nation’s housing policy forward.  This budget proposes resources totaling over $46 billion—a 10 percent increase over the level of funding provided in the fiscal year 2009 Omnibus Appropriations bill.  

“For the first time since this Subcommittee assumed oversight of HUD, we are not starting from a position of having to beat back proposals that would drastically cut elderly and disabled housing, Community Development Block Grants,  and other key programs. 

“This is a welcome relief. However, as Congress and the Administration work to address the housing crisis and turn the economy around, we need to do more than maintain the status quo. 

 “HUD must demonstrate leadership in developing solutions to stem the current foreclosure crisis, strengthening the  safety net for vulnerable families hit by the recession and preventing future housing disasters.

 “I am pleased that to date - Mr. Secretary, you have shown the kind of leadership that this Department needs. 

“In February, Congress moved swiftly to pass the American Recovery and Reinvestment Act, which provided the investment necessary to help get our economy moving again. 

“Just one week after that bill was signed into law, Secretary Donovan worked to ensure that HUD allocated nearly $10 billion—or 75 percent—of the funding it received under that Act.  I would like to applaud your efforts and the staff at HUD for working to allocate that funding so quickly. 

“These dollars are already making a difference in my state. In Yakima, Washington funds appropriated for the Public Housing Capital Fund are being put to use to rehabilitate housing and are generating much-needed job opportunities.

“In Spokane, millions in funding has gone to eliminate dangerous lead-based paint from low-income homes and protect young children from lead poisoning. And I know that over the summer, as Recovery Act spending is accelerated, we will see further investments in providing safe, stable and affordable housing throughout the country.

“But despite the positive signs that Recovery Act investments are paying off, there is still significant work to do.  As the Secretary well knows, problems in the housing market persist.  

“In Pierce and Clark Counties in my home state, homes continue to remain on the market for 12 and 14 months.   So, it is critical—not just to the families facing foreclosure, but to communities across the country—that we find new ways to boost the housing market.

“To date, the Hope for Homeowners program, designed to help families in danger of foreclosure, has failed to make the progress we need. While originally projected to help over 400,000 families, it has served fewer than 1,000 due to investors’ reluctance to participate. 

“Recently, Congress passed legislation aimed at giving HUD additional tools to make its programs more effective.  So, I look forward to hearing from the Secretary how these programs can better assist families. 

“While I believe that the FHA has a critical role to play in providing affordable housing options for hardworking families, I remain focused on ensuring the solvency of the Mutual Mortgage Insurance Fund and protecting the interests of taxpayers.

“Mr. Secretary, you were here earlier this year and we had a good discussion on the FHA, but that was before we had the President’s budget. 

“While I am pleased that the FHA’s regular sale and refinance program -  the lion’s share of the MMI Fund’s portfolio - does not require a positive credit subsidy. The Fund’s reverse mortgage—or HECM— program requires an appropriation of nearly $800 million. 

“So, today, I want to continue the important discussion about just what the appropriate role for the FHA to play is as we navigate the housing crisis.  

“As I mentioned, the President’s budget includes important increases. The funding levels requested for the Section 8 tenant-based and project-based rental assistance programs represent a total increase of nearly $3 billion over the levels provided in the fiscal year 2009 Omnibus Appropriations bill. 

“These funding levels demonstrate a real commitment to the more than 3 million elderly, disabled and low-income tenants that these programs serve.    And that is a commitment I share.

“In addition to increases in important programs, such as a $550 million increase to the Community Development Block Grant program and an increase of over $115 million for homeless assistance grants, the budget also proposes several new initiatives.

“These initiatives include the Sustainable Communities Initiative—a joint effort with the Department of Transportation to facilitate integrated housing and transportation planning, and, the Choice Neighborhoods Initiative—the Department’s vision for broadening and expanding the HOPE VI program and integrating schools into neighborhood revitalization efforts

“I have some questions about the details of these programs, but I commend the Department’s efforts to propose bold and ambitious ideas for rebuilding our communities and our nation. Finally, I will have some questions for you, Mr. Secretary on your efforts to remake HUD into an effective, 21st century agency through the Transformation Initiative.

“When we first met, we talked about the leadership necessary to improve and strengthen HUD and its programs.  So, I support your efforts to improve the Department’s operations.

“However, I am concerned by the lack of detail in this particular proposal, as well as its potential cost during the first year.  So, I look forward to having a productive conversation about ways to achieve our shared goal of creating a stronger and more efficient HUD, while maintaining this Subcommittee’s important oversight role. 

“As I have said before, in this recession, HUD is at the center of the storm. With foreclosures skyrocketing, affordable housing options increasingly scarce, and the dream of homeownership at risk for working families,the budget decisions and leadership at HUD are going to be make or break for those most affected by the recession.

“That is why today’s discussion and working in partnership to promote responsible and sustainable housing policies is so critical. With that, I turn it over to my Ranking Member and partner in many of these efforts, Senator Bond.”