The House Financial Services Subcommittee on Housing and Infrastructure held a hearing on June 22 regarding HUD oversight with HUD Inspector General Rae Oliver Davis. The Office of the Inspector General (OIG) is responsible for monitoring the internal processes of federal agencies to help increase the efficiency of federal programs and protect against waste, fraud, abuse, and misconduct. Subcommittee Chair Warren Davidson (R-OH) stated, “America broadly supports a social safety net, and HUD offers one of the most important ones – housing,” calling housing “a core need for human survival,” adding “HUD doesn’t do as good a job at [providing housing] as it should.” Chair Davidson noted that OIG has found an abundance of health and safety issues in HUD-assisted housing, including poor physical conditions and inadequate oversight of lead remediation.
Ranking Member Emmanuel Cleaver (D-MO) stated that there is bipartisan support for figuring out ways to improve HUD’s implementation of vital programs. However, he emphasized that improving HUD’s programs and the department’s compliance with certain Congressional mandates will also require increased assistance to the resource-deprived department, calling HUD “underfunded and understaffed.” Between 2012 and 2019, the number of full-time employees working at HUD dropped by more than 20%, amplifying administration challenges for the department.
Inspector General Oliver Davis stated that these staffing and funding challenges are also coming at a time when HUD is facing increased responsibilities and grappling with unique challenges in managing information technologies and security. The Inspector General noted that, while HUD has made significant progress addressing the most urgent recommendations laid out in OIG’s Open Recommendations Report, there remains work to be done to modernize HUD’s technology and increase the department’s capacity.
Representative Nydia Velázquez (D-NY) questioned Ms. Oliver Davis about the potential impact of proposed cuts to HUD’s budget on the department’s ability to respond to the recommendations made by OIG, especially around public housing. House Republicans recently approved topline spending for HUD that would slash funding to fiscal year (FY) 2022 levels, a more than $22 billion, or 25%, cut from the previous year.
While Ms. Oliver Davis stated that it will be the responsibility of HUD Secretary Marcia Fudge to figure out what programs to prioritize in the event of budget cuts, she agreed that inadequate funding for HUD’s Public Housing Capital Fund has led to a “crisis in public housing.” The Capital Fund provides crucial funding for making needed repairs to the nation’s deteriorating public housing stock. Decades of federal disinvestment have led to a capital needs backlog in public housing estimated to exceed $70 billion, exposing public housing residents to unsafe, unhealthy, and sometimes dangerous living conditions, such as lead-based paint, mold, and pest infestations.
“It is unfair to starve a department of resources, and then blame them for not meeting their goals,” said Representative Velázquez. While HUD’s budget has seen significant increases in recent years, they have still not made up for the cuts HUD experienced under the first years of the “Budget Control Act of 2011,” which imposed strict caps on domestic spending for a decade. Between FY11 and FY17, HUD experienced seven consecutive years of real budget cuts, after accounting for inflation. HUD’s cumulative appropriations during that time were $27 billion less than if HUD’s annual appropriations had remained at FY10 levels, adjusted only for inflation.
Representative Brittany Pettersen (D-CO) shared how her own life has been impacted by HUD’s rental assistance programs, saying “My mom was one of the lucky ones who was able to qualify for the Housing Voucher program. It was because of that program that my mom was able to stay housed; she would absolutely not be alive today without that support.”
Representative Pettersen noted that a common theme of the OIG’s findings is that HUD does not have the capacity to carry out its mission to the fullest extent possible. The Inspector General agreed, stating that HUD’s capacity is strained across their portfolio. The department is facing challenges not only in staffing, but in developing and adapting new technologies to help identify waste, fraud, abuse, and mismanagement, and to increase efficiency in HUD programs.
Watch a recording of the hearing, and access witness testimonies and the Committee Memorandum here: https://tinyurl.com/3fymjhbm