DEPARTMENTS OF TRANSPORTATION, AND HOUSING AND URBAN DEVELOPMENT, AND RELATED AGENCIES APPROPRIATIONS FOR 2020 HEARINGS BEFORE A SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS HOUSE OF REPRESENTATIVES ONE HUNDRED SIXTEENTH CONGRESS FIRST SESSION SUBCOMMITTEE ON THE DEPARTMENTS OF TRANSPORTATION, AND HOUSING AND URBAN DEVELOPMENT, AND RELATED AGENCIES DAVID E. PRICE, North Carolina, Chairman MIKE QUIGLEY, Illinois MARIO DIAZ-BALART, Florida KATHERINE M. CLARK, Massachusetts STEVE WOMACK, Arkansas BONNIE WATSON COLEMAN, New Jersey JOHN H. RUTHERFORD, Florida BRENDA L. LAWRENCE, Michigan WILL HURD, Texas NORMA J. TORRES, California PETE AGUILAR, California NOTE: Under committee rules, Mrs. Lowey, as chairwoman of the full committee, and Ms. Granger, as ranking minority member of the full committee, are authorized to sit as members of all subcommittees. JOSEPH CARLILE, WINNIE CHANG, JOSEPHINE ECKERT, ANGELA OHM, SARAH PURO, REBECCA SALAY, and GLADYS BARCENA Subcommittee Staff PART 5 Page HUD’s Management of Housing Contracts During the Shutdown ....... 1 Stakeholder Perspectives: Fair Housing ..................................................... 77 Stakeholder Perspectives: Affordalble Housing Production ................. 99 Stakeholder Perspectives: Passenger Rail Development ........................ 129 Stakeholder Perspectives: Building Resilient Communities ................. 159 Member’s Day ..................................................................................................... 189 Department of Housing and Urban Development .................................... 209 Department of Transportation ....................................................................... 249 Printed for the use of the Committee on Appropriations U.S. GOVERNMENT PUBLISHING OFFICE 37–628 WASHINGTON : 2019 COMMITTEE ON APPROPRIATIONS NITA M. LOWEY, New York, Chairwoman MARCY KAPTUR, Ohio KAY GRANGER, Texas PETER J. VISCLOSKY, Indiana HAROLD ROGERS, Kentucky JOSE´ E. SERRANO, New York ROBERT B. ADERHOLT, Alabama ROSA L. DELAURO, Connecticut MICHAEL K. SIMPSON, Idaho DAVID E. PRICE, North Carolina JOHN R. CARTER, Texas LUCILLE ROYBAL-ALLARD, California KEN CALVERT, California SANFORD D. BISHOP, JR., Georgia TOM COLE, Oklahoma BARBARA LEE, California MARIO DIAZ-BALART, Florida BETTY MCCOLLUM, Minnesota TOM GRAVES, Georgia TIM RYAN, Ohio STEVE WOMACK, Arkansas C. A. DUTCH RUPPERSBERGER, Maryland JEFF FORTENBERRY, Nebraska DEBBIE WASSERMAN SCHULTZ, Florida CHUCK FLEISCHMANN, Tennessee HENRY CUELLAR, Texas JAIME HERRERA BEUTLER, Washington CHELLIE PINGREE, Maine DAVID P. JOYCE, Ohio MIKE QUIGLEY, Illinois ANDY HARRIS, Maryland DEREK KILMER, Washington MARTHA ROBY, Alabama MATT CARTWRIGHT, Pennsylvania MARK E. AMODEI, Nevada GRACE MENG, New York CHRIS STEWART, Utah MARK POCAN, Wisconsin STEVEN M. PALAZZO, Mississippi KATHERINE M. CLARK, Massachusetts DAN NEWHOUSE, Washington PETE AGUILAR, California JOHN R. MOOLENAAR, Michigan LOIS FRANKEL, Florida JOHN H. RUTHERFORD, Florida CHERI BUSTOS, Illinois WILL HURD, Texas BONNIE WATSON COLEMAN, New Jersey BRENDA L. LAWRENCE, Michigan NORMA J. TORRES, California CHARLIE CRIST, Florida ANN KIRKPATRICK, Arizona ED CASE, Hawaii SHALANDA YOUNG, Clerk and Staff Director (II) DEPARTMENT OF TRANSPORTATION, HUD, AND RELATED AGENCIES APPROPRIATIONS FOR 2020 TUESDAY, FEBRUARY 12, 2019. OVERSIGHT HEARING: THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENTS MANAGEMENT OF HOUS- ING CONTRACTS DURING THE SHUTDOWN WITNESSES IRV DENNIS, CHIEF FINANCIAL OFFICER, U.S. DEPARTMENT OF HOUS- ING AND URBAN DEVELOPMENT BRIAN MONTGOMERY, ACTING DEPUTY SECRETARY, FHA COMMIS- SIONER AND ASSISTANT SECRETARY FOR HOUSING, U.S. DEPART- MENT OF HOUSING AND URBAN DEVELOPMENT Mr. PRICE. The subcommittee will come to order. Welcome to the first Transportation, Housing and Urban Devel- opment hearing of 2019. Today we will be conducting oversight of HUD’s management during the recent government shutdown, with a focus on nearly 1,200 expired housing contracts that put tens of thousands of ten- ants at risk. I am pleased to have Brian Montgomery, the Acting Deputy Sec- retary of HUD, and Irv Dennis, the Department’s Chief Financial Officer, here to testify this afternoon. Thank you for being here. We look forward to your testimony. Before I make a brief opening statement about the subject mat- ter of the hearing, I do want to say how pleased I am that Mr. Diaz-Balart and I will again be working as partners in running this subcommittee, more or less, doing the best we can in a cooperative fashion. And that was the way it was when Mr. Diaz-Balart was chairman, and I certainly intend to operate in the same way. We plan to be collegial and cooperative, to work through our dif- ferences, and to produce a good fiscal 2020 HUD bill that will gar- ner strong bipartisan support. I also want to introduce the new subcommittee members on the Democratic side of the dais: Representative Bonnie Watson Cole- man of New Jersey; Representative Norma Torres of California; and still to come, Representative Brenda Lawrence of Michigan. These are great new members. They are going to bring valuable perspectives to the subcommittee, and we are excited to have them join our returning members on Team T-HUD, we will call it. Now let’s return to the business before us this afternoon. The recent presidentially induced government shutdown, which lasted 35 days, was one of the worst blunders in American political (1) 2 history. Probably wouldn’t get much disagreement on that. It was self-inflicted, damaging, and counterproductive. I don’t believe any- body in this room wanted it. Unfortunately, the President did, and it took more than a month before he even allowed even a tem- porary solution to be put in place. Unfortunately, HUD was a major casualty of the President’s recklessness. Shutdowns hinder or halt essential government func- tions, and agencies like HUD are left with a skeleton staff to cope with the fallout. And every indication is that this time the damage was especially severe. Serious questions have emerged about the Department’s manage- ment of the lapse of appropriations, including the degree to which the shutdown was anticipated and whether adequate preparations were made in the weeks that preceded it. Many housing contracts were allowed to expire, putting tens of thousands of tenants at risk, in the Project-Based Rental Assist- ance Program and the 202 and 811 housing programs for the elder- ly and disabled respectively. Approximately 650 of these contracts expired in December, many of them before the lapse in appropriations occurred. The shutdown then greatly complicated the task of curtailing the damage. That is unacceptable. The Department should have seen this coming, but senior leadership failed to take necessary action. HUD’s options were further limited by the fact that the Depart- ment had imprudently spent approximately $400 million in ad- vance appropriations at the beginning of the fiscal year. Now, this money is flexible. It is designed to accommodate housing contracts, since they operate on a calendar year basis rather than a Federal fiscal year. HUD could have used the advance appropriations dur- ing the shutdown to renew expiring contracts, but the money had already been spent. Compounding the problem was the Department’s haphazard com- munication with stakeholders, including tenants, housing pro- viders, and, I have to say, the Congress. HUD expected landlords and nonprofit groups to tap into their funding reserves, their own reserves, to keep contracts afloat, but the Department failed to issue timely instructions. We heard nu- merous reports from landlords who had not received guidance. Meanwhile, this subcommittee got wind of the difficulties and re- quested basic information from the Department about the number of expiring contracts and affected properties. HUD had already shared this information with outside stakeholders but refused to provide Congress with the same information for nearly a week de- spite frequent inquiries. So this, too, is unacceptable. This Appropriations Committee ex- pects HUD to comply with legitimate oversight requests, and I hope we will receive assurances from our witnesses today that this kind of episode won’t be repeated. We need a better understanding of what went wrong and why it went wrong. Just as important, we need to know what HUD is doing to ensure similar problems don’t recur. The subcommittee is prepared to be a partner with HUD. If there are certain adjustments in the way the Department’s funding is working, we need to know that. We want to be helpful. But we also 3 need for HUD to provide an honest assessment of what happened and how it can improve. So, again, I look forward to hearing from our witnesses this afternoon. I would like to recognize our ranking member, Mr. Diaz-Balart, for his opening statement. Mr. DIAZ-BALART. Mr. Chairman, thank you very much. I, again, first, would like to start to also welcome the new mem- bers of the subcommittee. So, Mr. Chairman, you already men- tioned the new Democrats, and we are joined by, I think, among the best Members that the Congress has: Mr. Womack, Mr. Ruther- ford, and Mr. Hurd. Frankly, I am thrilled that you are part of this subcommittee. Mr. Chairman, you will find them to be, frankly, phenomenal members of this committee. I might be a little biased, but I really think that this sub- committee plays a special, significant role to our Nation. And so I am thrilled to be on the subcommittee with all of you. Now, let me start by first congratulating