Secretary Castro Testifies at THUD Appropriations Hearing

On March 1, HUD Secretary Julián Castro testified on the agency’s Fiscal Year 2017 budget request before the House Appropriations Subcommittee on Transportation, Housing and Urban Development, and Related Agencies (THUD). Republican members of the subcommittee took issue with mandatory spending classifications, questioned the implementation of the Affirmatively Furthering Fair Housing (AFFH) rule, and brought up recent Inspector General reports.

The president’s budget request includes $11 billion in mandatory spending over the next 10 years to end family homelessness, 80 percent of which would be for new housing vouchers and 20 percent for rapid rehousing assistance. Subcommittee Chair Mario Diaz-Balart (R-FL) questioned the 3.5 percent increase HUD is seeking for FY 2017 and the agency’s decision to request funds on the mandatory side of the federal budget. He stated that the budget as a whole contained many accounting gimmicks and “just because you call it mandatory doesn't mean that it won't increase our national debt.”

Mr. Diaz-Balart also voiced concerned with Inspector General (IG) reports he received that showed “poor financial controls, possible Anti-Deficiency Act violations, lacks in program oversight, major risk to IT systems, [and] major gaps in the cyber security.” He noted that the IG and Government Accountability Office (GAO) have repeatedly found that HUD does not have performance measures to evaluate the effectiveness of the Moving to Work (MTW) program, and that some PHAs participating in the program have used funds for purposes other than serving people in need.

In response, Secretary Castro said that with the MTW program expanding from 39 to 100 agencies, HUD has the opportunity to include more performance metrics in the contracts of the new participating agencies. He said that an advisory committee was established to oversee the MTW expansion and would be making recommendations in the next few months. The expansion would be phased-in over several years.

Appropriations Committee Chair Hal Rogers (R-KY) brought up an IG report concerning over-income families living in public housing. Secretary Castro responded that HUD had begun taking action by sending out guidance to public housing agencies to adopt policies encouraging highly over-income families to transition out of public housing and by issuing notice of advanced rule-making on the issue. Secretary Castro cautioned that a change in policy must be nuanced so as not to be a disincentive to families to increase their incomes out of fear of immediately losing their assistance once they became over-income.

And Representative David Joyce (R-OH) expressed concern for HUD’s Affirmatively Furthering Fair Housing (AFFH) rule. He worried that HUD was using its “authority like a hammer, and [was] robbing … communities of their rightful say in local zoning laws.” Secretary Castro assured him that the rule was about “giving … communities the data that they need to make prudent decisions about how they invest … federal taxpayer dollars and how they also live up to Fair Housing Act requirements.” The Secretary added, “We can't tell a local jurisdiction, ‘You have to adopt this zoning law, or planning law, or land use restriction.’”

Appropriations Committee Ranking Member Nita Lowey (D-NY) spoke of the current lead contamination scandal in Flint, Michigan, and pointed out the lack of funding for the Lead Hazard and Healthy Homes programs, which have made great progress in eliminating lead poisoning nationwide. Secretary Castro responded that HUD was able to fund only half of the eligible applicants in the program and that the need outstripped the resources HUD received. He did note that Community Development Block Grant (CDBG) funds could be used to address lead issues.