COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING BEFORE THE COMMITTEES ON LAW AND GOVERNMENT AND LICENSES AND INSPECTIONS - - - Room 400 City Hall Philadelphia, Pennsylvania Thursday, January 29, 1998 1:10 p.m. - - - CONTINUATION OF INVESTIGATION INTO SECTION 8 HOUSING - - - PRESENT: COUNCILMAN DAVID COHEN, Chairman COUNCILWOMAN JANNIE BLACKWELL COUNCILMAN JAMES F. KENNEY COUNCILWOMAN JOAN L. KRAJEWSKI COUNCILWOMAN ANNA CIBOTTA VERNA COUNCILMAN RICHARD T. MARIANO COUNCILMAN MICHAEL A. NUTTER COUNCILWOMAN HAPPY FERNANDEZ COUNCILMAN ANGEL L. ORTIZ COUNCILMAN FRANK DICICCO COUNCILMAN FRANK RIZZO - - - VINCENT VARALLO ASSOCIATES, INC. Registered Professional Reporters Eleven Penn Center, Suite 600 Philadelphia, PA 19103 (215) 561-2220 2 I N D E X Fredrick S. Pernell, Interim Executive Director Philadelphia Housing Authority. . . . . . . 3 Manuella Costa, Director, Section 8 Program Philadelphia Housing Authority. . . . . . . 25 Karen Moon, Deputy Executive Director for Operations, Philadelphia Housing Authority. . . . . . . 27 John Kromer, Director Office of Housing and Community Development. . . . . . . . . . . 92 Ed Schwartz, Head of the Institute for the Study of Civic Values. . . . . . . 167 LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 3 Law and Government/Licenses and Inspections P R O C E E D I N G S
Law and Government, and Licenses and Inspections is now in session. There's more than a quorum present, though the quorum was established at the previous meetings. This is a continuation of hearings. This may be the last, or there may be one more, following which the Committee will be preparing a Committee report, following all of the hearings, outlining the Committee's recommendations. The first witness today is going to be Mr. Pernell, the Acting Director of the Public Housing. Mr. Pernell, we're delighted to see you here.
Good afternoon. My name is Fredrick S. Pernell. I am currently serving as the interim Executive Director of the Philadelphia Housing Authority.
May I ask you, sir, to keep the microphone very, very close to you.
Is that better? LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 4 Law and Government/Licenses and Inspections
I want to once again thank you for inviting me to testify here this afternoon. Our agency has anxiously awaited the opportunity to present information and share information about the Section 8 program, which is currently administered by PHA. To begin, I think it's important to note the context of the testimony that we have elected to provide today. As originally concepted, we were prepared to give you a statistical breakdown of the technical aspects of the Section 8 program. But in light of events and current hearings that have already occurred, I don't think that will be necessary. And I believe that in response to the reports that were circulated yesterday by the Mayor's Office, it is important that we respond directly and definitely to some of the concerns raised there. " Because the report contained several proposed actions and recommendations to improve PHA Section 8, I've elected to use it as the basis of my testimony rather than to use Council's time to cite, as originally intended, the regulatory technicalities of administering the program. As interim Executive Director of PHA, I have an obligation to attempt to respond to the recommendations and issues that are outlined in the report and to clarify PHA's position in reference to them. One suggestion offered in the report references an improvement in public access to information about the location of Section 8 units. This information is public information. The information is available, and upon request of the PHA through our Office of Public Affairs, is distributed to those who request it. It is updated quarterly, and it has been regularly available for Council and others to peruse. Next, the report references our agency's ability to determine and disclose the public availability of Section 8 certificates. LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 6 Law and Government/Licenses and Inspections PHA's ability to provide this information has been adversely affected recently by HUD's continuing changes to regulations governing funding availability. S. Department of Housing & Urban Development representatives, and on occasion, in order to develop a mutually acceptable leasing schedule. To date, though, HUD has not endorsed any consistent methodology for determining the number of certificates that will be available. Through our monthly meetings, however, HUD advises PHA of their estimate of how many certificates and vouchers will be available in the coming month. In addition, it's important to note that PHA has not received any new tenant-based fair-share fundings since 1994. Since that time, the availability of Section 8 certificates is the result of turnover in the program. And since turnover is based upon participant behavior, our estimates to estimate any number of available certificates based on this activity has not been very reliable. To the extent that we do possess LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 7 Law and Government/Licenses and Inspections reliable information regarding certificate availability, we will continue to make that information available to the public. The report also recommends that the Section 8 telephone hot line be fully supported. Our agency has committed to incorporating the use of the Section 8 telephone hot line as a permanent part of our Section 8 operation once additional staff is hired for the Investigative Unit. We feel this a direct way to respond quickly to concerns that are raised in the community. It also makes reference to enhancing the administrative plan that was identified in the Mayor's improvement plan. PHA's administrative plan is to document the fully detailed remedial actions that the agency has taken when tenants commit program or lease violations, as well as procedures for denial of termination of rental assistance. The plan was completed in October. It awaits approval of the PHA Board prior to it being able to be implemented. There also are major concerns around implementing an effective termination policy.
PHA has adopted a termination policy that addresses LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 8 Law and Government/Licenses and Inspections serious lease violations. Upon receipt of a notice of court findings regarding a tenant's serious or repeated lease violation, PHA does act to terminate a family's program participation. In addition, we terminate lease assistance to those people who have committed fraud, bribery, or any other criminal activity in connection with any federal housing program. It's important to note that in regards to this termination policy, we do rely on information provided to us by the court system because we are responding to tenants who are holding leases with landlords who may or may not have involved us in the eviction process for the tenants currently in possession. In addition to our new administrative plan, we will adopt a policy where people who commit drug-related criminal activity or violent crime will be terminated from the program. Our forthcoming administrative plan also outlines a policy where applicants who are arrested, convicted or evicted from a unit due to violent criminal activity within the past three years prior to the date of their certificate LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 9 Law and Government/Licenses and Inspections interview will be denied participation in the Section 8 program. In appropriate cases, PHA may permit a family to continue receiving assistance providing that the member determined to be engaged in the prescribed activity does not reside in the unit. This is an area of great concern, particularly in those situations where the violating member is a minor. PHA will involve individual circumstances with the advice of the judicial court officers. In reference to terminating landlord contracts, as cited in the improvement plan, PHA routinely terminates landlord contracts on the basis of a landlord's failure to comply with the program regulations. It is important to stress that our effectiveness in administering these policies is strengthened by the support of the local and municipal court systems. We experienced similar difficulties on the public housing side. Another recommendation in this Section 22 8 plan involves the hiring of additional PHA inspectors and investigators. We are in the process of reviewing our staffing needs with respect to the Inspections Unit and will hire LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 10 Law and Government/Licenses and Inspections additional inspectors as we deem appropriate. We have already completed a review of the investigative units and determined that additional staff is needed and have conducted interviews and committed to the hiring of five additional investigators. These new investigators will bring a total of eight field people assigned to that unit, as well as a direct supervisory person coordinating that effort. There is also contained in the improvement plan a strong recommendation that a housing agency begin to provide supportive social services and case management, and PHA is acutely aware of the needs of local families with regards to supporting services and case management and that those needs have largely gone unmet in the current climate of shrinking resources. Section 8 families, like their low- income private market renter counterparts, have been adversely affected by funding cuts at all levels of government. While the Section 8 program is primarily a housing program, we do recognize that access to supportive services is a component that LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 11 Law and Government/Licenses and Inspections has the potential to aid a family's ability to meet certain basic requirements necessary to successfully maintain its housing assistance. And, as indicated in the report, any services that PHA makes available to the Section 8 families are available on a voluntary basis only. We cannot mandate participation in our family self- sufficiency programs.
We also cannot make participation in a supportive services plan contingent upon a person's ability to continue to participate in the Section 8 program. PHA does endorse the report's proposals to expand services to families who are experiencing difficulty in meeting program obligations, maintaining family housing in the community at large. But the first step to this process is resolving community concerns regarding assisting families to establish a process to identify those families who are experiencing these problems and to strengthen the agency's ability to enforce our program regulations in a timely manner. As noted earlier, we have expanded our LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 12 Law and Government/Licenses and Inspections investigative staff. The cost to PHA to expand this investigative staff is approximately $500,000 a year. These investigators will be the first conduit that provide backup information to PHA in getting out and front of issues that have been brought to our attention and require involvement in case management. The report correctly identifies Section 10 8 inspection staff as a key component in strengthening PHA to better enhance program regulations. We are reviewing our staff again. The Authority is committed to funding additional positions and providing additional resources. And efforts to improve our capacity in this area have also been identified and are scheduled to be funded with dollars generated by Section 8 administrative fees. To the extent that the Section 8 administrative fees are utilized to support activities within the Section 8 program, it needs to be noted that there's a direct impact on PHA's operating budget. PHA has, as allowed by HUD, customarily utilized Section 8 reserves to enhance its operating budget. LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 13 Law and Government/Licenses and Inspections While we expand our opportunities within the Section 8 program, we need to stay cognizant that there will be a ripple-effect funding in other areas of the Authority. Although we can't effectively evaluate with any precision the number of housing families that will be affected, families who might otherwise receive housing or supportive --
We're going to hold all questions basically until he finishes.
Thank you Councilman. Families who otherwise may have been housed through public housing programs will increase the LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 14 Law and Government/Licenses and Inspections City's demands for housing and shelter services. Despite PHA's financial constraints in supporting both the Section 8 and public housing programs, we are committed to expanding services and will continue to explore other sources of funding to further enhance our ability to provide voluntary supportive services for all program participants. PHA is currently operating a case- management-oriented program, the Section 8 family self-sufficiency program. Through FSS, PHA provides counseling on education, employment opportunities, parenting, and credit repair to Section 8 families who have the goal of becoming self-sufficient. The pilot program affects 250 families that are currently enrolled, and it is our goal to expand to an additional 255 families. Our recruitment strategy includes regularly scheduled monthly FSS orientations that are open to all Section 8-eligible participants. It is PHA's experience in operating a relatively small program that it is demonstrated that the cost of managed care case management is very high. Nonetheless, we will be expanding the staff LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 15 Law and Government/Licenses and Inspections in this area also. Additionally, we are interested in pursuing services which may be funded through other City agencies that we can help make available to our Section 8 program. The administrative report also encourages PHA to pursue opportunities to increase site-based certificates. PHA has endorsed a policy of allocating the project-based certificate program the maximum number of certificates allowable under HUD regulations, that is currently percent. 14 Additionally, we have aggressively 15 pursued any funding that HUD has made available through specific site-based programs. PHA fully supports the efforts of the local housing partners to develop and administer project-based assistance and continues to be a principal administrator under the single-room occupancy and moderate rehab programs within the local area. Our experience in administrating both the tenant-based and project-based programs has provided a unique perspective on the importance of the available of both types of housing. It is LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 16 Law and Government/Licenses and Inspections imperative that PHA be a partner in developing a strategy that strikes the proper balance between assisted housing in a project-based program and a tenant-based program. Additionally, PHA's low-income housing program effectively makes 15,000 site-based units available within the City of Philadelphia's jurisdiction. Within this context, a continued availability of tenant-based assistance is a valuable resource in providing a portion of families with a choice in selecting a unit of housing. With regard to the actions on the part of the Board of Commissioners that was cited in the report, while PHA does currently does make information available regarding available funding, number of locations of all Section 8 units, opportunities to increase site-based certificates, as well as policies and procedures changes and utilizes other resources, the Authority will look to produce such information in the form of a Section 8 annual report, which will be readily distributed amongst the City agencies interested in the Section 8 program. LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 17 Law and Government/Licenses and Inspections Regarding the report's recommendation that the board make Section 8 certificate allocations on a monthly basis, the process by which this is accomplished is not clearly described in the proposed action.
Although HUD has provided the Housing Authority with a great latitude in establishing waiting-list priorities and response to local needs, a requirement for the board to restructure this policy on a monthly basis needs to be made consistent with the body of regulations regarding waiting-list management. The report's description calls for the ending of local preferences for tier-one households while simultaneously suggesting that PHA board make determinations regarding the issuance of the Section 8 certificates among specific classes of already-designated tier-one household. The report does not address the establishment of a priority of applicants conforming to criteria other than the tier-one criteria. PHA needs a clarification on which categories of applicant families the Administration seeks to include in any revision that may be required in our administrative plan. LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 18 Law and Government/Licenses and Inspections The Administrative also cites proposed state, federal, and legislative action within the context of the recommendations regarding PHA's Section 8 program, PHA cannot respond to the inclusion of recommendations regarding changes to composition, authority and term of PHA board, or legislative changes to provide for the employment contract with the PHA incoming director. Those issues, in our opinion, are separate from this discussion. If PHA increased the proportion of site-baited certificates -- excuse me, I'm sorry. If PHA is to increase a proportion of site-based certificates to tenant-based certificates, it will require federal legislative action. Many of the recommendations contained in other sections of the report should be reviewed by HUD as they appear to go in a different direction with the current regulatory and statutory requirements that are currently being handed down to the Philadelphia Housing Authority. Also cited in the report is a recommendation to enhance coordination between PHA and City agencies. PHA fully supports this LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 19 Law and Government/Licenses and Inspections recommendation. Of primary concern to our agency because of its potential adverse impact is the immediate discontinue of the City's case management service upon the placement of a sheltered client into a PHA section unit. This simply means that someone who may have been identified as needing specific care, who is participating in the shelter system, loses that case management immediately upon their placement within PHA as a Section 8 recipient. There needs to be better coordination between the Office of Emergency Shelter Service to ensure that we, number one, are able to identify who these people are and, number two, for a specific period, continue the services from other areas before they are rolled completely into the PHA fold. Families who leave the shelter system and move into transitional housing are eligible for case management service. However, again, these services terminate at the time that the assistance is offered through the Section 8 program, regardless of any documented need on the part of that family. PHA applauds the City Department of LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 20 Law and Government/Licenses and Inspections Revenue in its efforts to increase coordination between the City's Department of Licenses & Inspections prior to the issuance of rental real estate licenses. The report recommendation regarding increased coordination between PHA and L&I, the Police Department and the School District provide the potential for a much more effective use of our combined resources. And, I might add, it allows us to address issues that are not germane only to the Section 8 program but that cross the boundaries into our other public housing programs.
However, it should be noted that all such recommendations will require that PHA develop specific inter-agency strategies and agreements that support and clearly define goals in order to ensure that each party is aware and accepts its role and responsibilities under the agreement. We continue to support our ongoing relationship with the Office of Emergency Shelter Services and the Office of Housing and Community Development, and will continue to accept referrals from these agencies. Regarding the report's recommendation LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 21 Law and Government/Licenses and Inspections to commission a rent comparability study, PHA requests further information regarding the interests of these named agencies, OHCD, RDA, and PMFA, in such a study. The financial commitment of each party that would benefit from such a study should be conducted jointly and the responsibility of each party in maintaining a rent data base following its creation. I've attempted to address the Mayor's report and to clarify some of the issues that directly affect PHA. On behalf of the Housing Authority, I would just like to thank Council for the opportunity to be here and present our position regarding the Mayor's proposed plan and also to enlighten you to some of our positions on improving the Section 8 program. Section 8 is an extremely valuable resource. And in light of some of the changes that are coming out of Washington, I think it's important to be noted for the record that we will probably have more Section 8 as opposed to less Section 8. There are certain HUD mandates on the public housing side that will result in increased relying on Section 8 as an alternative housing LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 22 Law and Government/Licenses and Inspections strategy. It's imperative that the City come together to formulate a plan that not only includes PHA's resources but brings PHA to the table as a partner in developing that strategy. I thank you for your time, and will address any questions you may have.
Thank you very much, Mr. Pernell, for a very interesting report. Let me ask you, were you present at the Mayor's announcement of his recommendations yesterday?
You were not. Second, the report of the Mayor, to what extent did it incorporate PHA's views? Or was it written by people in the Mayor's office that were not directly connected with PHA?
The PHA was involved in one meeting, a coordinating meeting about a month ago where a lot of these issues were discussed. The final report was submitted to our office on Monday. We did submit comments back, and some of LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 23 Law and Government/Licenses and Inspections those comments were incorporated into the final plan. But we did not receive the document until Monday.
Thank you, Mr. Chairman. Mr. Pernell, I believe this is the first time that you've appeared before City Council --
-- in giving testimony, and I'd like to commend you on your thoroughness and your delivery. And I think that you were very thoughtful in your presentation. And I thank you for it.
Under current PHA regulations and to your knowledge, how many tenants in the PHA-administered Section 8 -- which is different, obviously, from the HUD-administered program -- have been terminated in the past year or two, that you're aware of?
I have that information LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 24 Law and Government/Licenses and Inspections available.
Mr. Pernell, if you would like to have some members of your staff sit with you, that's quite common practice in City Council. Feel free to have them join you.
For the record, I would like to ask the Deputy Director for Operations, Miss Karen Moon, and the Director of our Section 8 Program, Miss Manuella Costa, to join me at the table.
Very good. Let me, during this period, introduce the ten members of City Council who are participating in the hearings. I'm facing: Councilwoman Krajewski; Councilwoman Fernandez; Councilwoman Blackwell; Councilman Rizzo; Councilman Nutter; Councilman Ortiz; myself, Councilwoman Cohen; Councilman Kenney; Councilman Mariano; and Councilwoman Verna, who is the majority leader of City Council. That represents ten Council members, more than a majority. Thank you. So, you see, you're providing the LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 25 Law and Government/Licenses and Inspections majority of City Council with very important information.
Thank you very much. The question again, Councilman, was for the last two years?
Over the last year or two, to your knowledge, in the PHA-administered program, how many tenants have been terminated for cause?
Miss Costa, could you please identify yourself for the record.
And keep the microphone up as close to you as possible voice, please.
You're going to have to do better than that. Really bring it up so that it practically touches you.
Okay. My name is Manuella Costa, and I'm the Director of the Section 8 Program. Good afternoon, everybody.
Good afternoon. LAW AND GOVERNMENT/LICENSES AND INSPECTIONS Law and Government/Licenses and Inspections
In trying to answer your question, I would like to tell you that I don't have statistics for the last couple of years.
We do have statistics on termination from 1989 until the current year.
There were 3,825 vouchers terminated for cause during the period 1989 to 1997.
And during the course of the termination proceeding, it had been testified to in earlier hearings that tenants, when they are notified of impending either investigation or potential eviction proceedings, have the ability to leave the property with the certificate and request a new landlord to accept that certificate, thereby ending in many ways the termination process. Is that in fact true?
Is there some HUD or federal regulation that allows that and ties the hands of PHA?
The answer is yes. But I LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 27 Law and Government/Licenses and Inspections will defer the explanation to Miss Costa.
Yes, it is a federal regulation that mandates PHA to issue a certificate to a person that received an eviction notice as long as the family notifies PHA that they are in the process of being evicted. As you can imagine, in the majority of the cases, that really stops the eviction process and allows the family to move to another unit.
And if there's a problem with the particular family unit, that problem then in fact moves with them to their new unit, or maybe it doesn't, but it can.
Has there ever been a request made by PHA to HUD or to the Congress to change that, to give you more latitude and authority in actually terminating people, not only from the unit, but from the program altogether if they observe to be?
My name is Karen Moon. I'm the Deputy Executive Director for Operations. To answer your question, the Housing Authority has not made such a request. But there LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 28 Law and Government/Licenses and Inspections are discussions that are currently underway across this country because of similar problems that are being communicated to the Department of Housing and Urban Development. And I would have to say that the Philadelphia Housing Authority does, in fact, support such a move to eliminate that problem.
And understand. I mean, there's a lot of blame that can go around for problems in any program. And, Mr. Pernell, you've been here A relatively short time. And, again, we're looking forward to trying to find solutions to these problems without casting blame on anyone. I'm sure there's a lot to go around. So I'm glad to see that PHA is moving and trying to get control over their tenant base. And may I ask as separate question --
Could I ask a follow-up on that one question? Does anyone understand why that was originally part of the law? Has anybody ever from the national headquarters informed the local PHA why that exists? Is it merely to terminate an LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 29 Law and Government/Licenses and Inspections eviction proceeding and make it similar for PHA?
No, not really, because it is not the Housing Authority who initiates the eviction action; it is the landlord. And I think it was primarily designed to enable landlords to make decisions about the resident population, not necessarily to terminate their assistance that was associated with it, but to give the family an additional opportunity. When you couple that with the fact that there are no direct services that are offered to the family to help them to eradicate those kinds of problems so that when they do move to the next unit, that those problems just duplicate themselves.
I think that's the point that Councilman Kenney was directing his question at.
It also should be noted that it is -- generally when a landlord in Section 23 8 or in any rental situation retains the access to the property and the problem tenant is gone, it would be that landlord that carries through on the LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 30 Law and Government/Licenses and Inspections eviction process. And in those cases, once get possession of the unit back, a lot of landlords just search for new tenant let the other tenant go on their merry way.
And, again, similar to the first question I asked, how many landlords have been terminated from the program since 1989 or the date you gave me relative to the tenants.
That information is not in the packet, but I can provide it to you.
How does PHA determine the legal number of tenants residing in a Section 8 property? Are there numbers, family size versus numbers of bedrooms, yard space, square footage? Is there a specific policy or guideline on how many people can live in a two-or three-bedroom house?
Yes. The basic formula is the same as it is on the public housing side: It would be two individuals of the same sex per bedroom. LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 31 Law and Government/Licenses and Inspections There is a review process where families are coming in, they are to provide the Housing Authority with the numbers of people who are occupying the unit, and that is the basis of it. Now, one of the reports is that individuals are actually moving other people into the household. Again, that is an issue that should be followed up on immediately or initially by the landlord of the property. When we certify a family as being eligible to participate in the program, there is an identifiable number of family members who are identified by name, by sex and by age who should be in fact be in that unit.
In the event that the landlord is not a resident of either the street or the property or even the city, for that matter, and probably does not have an overriding need or desire to care about who is living in the property, as long as he or she is getting the rent, who then would be responsible at PHA for responding to community complaints or to neighborhood complaints about an over-large number LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 32 Law and Government/Licenses and Inspections of people who are unrelated living in the property?
It would be the Investigative Unit initially. In effect, what would happen is if a community member were to call to say that there were an inordinately number of individuals occupying the unit, that information would be investigated by the Inspections Unit. And depending upon what the Inspections Unit found, then the service rep would be utilized to determine whether there was some follow-up action that needed to occur.
And does that include eviction proceedings on the part of PHA?
It would include notification to the landlord that this was existing, because the Housing Authority cannot evict the individual occupant.
And I just have two more questions and I'll be happy to move onto the next Council member.
If I might, just one thing to add to that. If we find that the documentation is accurate and the landlord does not take action LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 33 Law and Government/Licenses and Inspections to resolve the problem, the recourse that is open to us is to terminate the assistance to the landlord, which typically motivates them.
Why do we not require Section 8 tenants and landlords to participate in available PHA programs on life skills and appropriate landlord and tenant responsibilities? Why is it only voluntary and not mandatory?
We cannot make it mandatory for the Section 8 family to have any kind of counseling. We can offer it on a voluntary basis. And recently we're going to start having the services of an agency that is going to target our Section 8 regulation in order to offer counseling services which include parenting, child care, financial aid, and different kinds of help. But it will be on a voluntary basis.
And I guess the second question would be: Has PHA made a request to HUD or to Congress for the appropriate changes LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 34 Law and Government/Licenses and Inspections to allow PHA to mandate that kind of counseling?
No. We as an agency have not. But in response to your question, there is currently at the HUD level an assessment program that is being developed for the Section 8 program. Nationally, although there are guidelines and handbooks, similar to the public housing "fee map" as it's called, the public housing management assessment program, there was no national standard that Section 8 administrators had to add here to. HUD is in the process as we speak -- and one reason for my being at a conference last week -- of developing what they call "the C Map Program," which is the Section 8 management assessment program. And one of the issues that was debated hotly at the conference that I just left was the ability to mandate the participation in the family self-sufficiency programs. It should also be noted that that same assessment speaks directly to the issue of providing opportunities for people to go beyond the traditional census tracks and neighborhoods that support public housing, almost to the extent LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 35 Law and Government/Licenses and Inspections of a mandate that we are literally to provide information not just locally but on counties in the surrounding area that will accept Section 8 recipients because, of course, tenant-based Section 8 vouchers are totally portable. You can take them wherever you want.
I believe myself that individuals who are suggested to participate in a voluntary program and refuse are probably exactly the families that need it the most. And I think that would be a good thing for PHA to continue to pursue, and that's mandatory participation in programs for both tenants and for landlords relative to responsibilities. Finally, in the Mayor's report yesterday -- and if you argue with these numbers, please feel free to interrupt me -- he gave list of average rental rates for properties from zero-bedroom, I guess that's an efficiency, through six bedrooms. And they go as follows. One bedroom would be 570 per month; two, 704; three, 881; four 1104, five, 1270; and six, 1436. My suggestion -- and if you disagree, LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 36 Law and Government/Licenses and Inspections please feel free -- is that I own, for example, one property. I don't know why I ever purchased it, but I have a rental property, and I recognized after getting a rental problem that it is not the business that I should be in. But be that as it may, I have a two-bedroom property in a small row house in South Philadelphia. And I have had tenants who are both elderly who have been in there for about more than ten years now. They are very good tenants, and we haven't raised the rent because they are such good tenants. I get about $300 a month; I could get as much as 4, in the market, in that particular zip code. But that two-bedroom house, if it were converted to a Section 8 property, I could obtain $700 for it. If we're looking for available revenues to provide social service, inspection services and other services, my suggestion is we try to rationalize and equalize these rental rates and use the savings to provide those social services needs to our tenants and to our landlords. And I think that it would serve not LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 37 Law and Government/Licenses and Inspections only the program but the tenants of Section 8 much better than they are being served today.
The numbers you quoted are correct. And nationally or locally, I'm positive, because we're participating in a review currently. But nationally, that is the trend that seems to be most concerned throughout the country. One other thing that should be noted, though, is that it is, in a lot of cases, some of the project-based units that are receiving even rents in excess, and a lot of that is associated with declining real estate values in areas that were subsidized ten, fifteen years ago.
I think the HUD push on Section 8 right now is to reevaluate the FMRs across the board and make them more in line with what the local area is receiving for similar-size units.
Thank you. Thank you for your answers, and thank you, Mr. Chairman.
Thank you. With respect to that, are the rental rates that were quoted by Councilman Kenney, was that the total LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 38 Law and Government/Licenses and Inspections rental or the 80 percent share that the federal government provides?
That is the maximal allowable for the types and size of the units that he indicated.
So the federal government would be paying 80 percent of that? Doesn't the federal government pay 80 percent, and the tenant percent?? 11
No. Actually, it's 70 12 percent, and the tenant or the participant pays 30 13 percent. 14
Is there any 18 information as to how many tenants in fact pay the 19 30 percent? Do you have any information on that? 20
Yes, we do have that information. I don't have that information here.
How do we track that information? LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 39 Law and Government/Licenses and Inspections
We know what it is that we pay on behalf of each individual family.
That's considered to be the HAP payment. So we know all of the individuals that are participating pay no more than 30 percent.
Well, how do you know they're paying anything? The reason I raise this question is that there was a lot of talk out in the community that there's sort of an unwritten agreement. The landlord says, "I won't go after the 30 percent if you don't bother me about keeping up the property." And I was just wondering, is there any way, do we know whether tenants do, in fact, pay the 30 percent?
Councilwoman, if there are people who have a side bar deal, the only thing I can equate it to is some of the issues that surround us with wage compliance on the LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 40 Law and Government/Licenses and Inspections construction side. We don't have any knowledge directly of people not paying the rent. That would be a violation of the agreement and subject to immediate termination. But we, as far as I know, have no way of determining if someone is actually doing that.
Because even if the 70 percent rate, at the figures that were quoted by Councilman Kenney, the rental rate is still very, very high compared to the regular market in Philadelphia.
Councilman, just so that there is total clarity on this, it should be noted that if a Section 8 tenant has no income, then the landlord is eligible for 100 percent of the subsidized FMR.
So if the tenant has no income, where does the tenant get the 30 percent to pay the designated share?
It's based on the income that you have. If you have no income, you're not required to pay anything.
In other words, the LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 41 Law and Government/Licenses and Inspections 30 percent share, if the tenant has no income, the landlord has agreed in effect by becoming a landlord under Section 8 to waive that 30 percent?
No. The landlord will receive -- in the case of a two-bedroom unit that goes for $704, if the current certificate-holder has no income, the landlord will receive the full $704 from the federal government.
Okay. Councilwoman Fernandez and then Councilwoman Verna.
Yes, following up on these numbers. Could you clarity -- I'm understanding that the numbers cited by Councilman Kenney, that's the maximum possible. It doesn't mean that's what is charged; it's the maximum rate that LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 42 Law and Government/Licenses and Inspections would be allowed.
Yes. Councilwoman Fernandez is correct. There is a local FMR rate that is calculated by HUD. And in those cases where the fair market value is lower, you should receive a lower payment. One of the problems is, that information has not been updated as currently as it should have been.
And the FMR is calculated on a regional basis as opposed to a local basis.
So we're competing with averages in Montgomery, Delaware, Chester, Bucks, County.
But you're thinking for your property you could get more, but you wouldn't necessarily be able to get more LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 43 Law and Government/Licenses and Inspections because one of the complaints earlier was that it's really not fair if you have a neighborhood where rents are, let's say, $300 for a one-room apartment, but you have a Section 8 person property-owner able to get more. So I think I wanted to clarify that this is the maximum amount.
But if I converted that property and accepted Section 8 certificates, I would be getting significantly more money than I'm getting now.
On that one point, do you have any statistics which indicate what percentage of properties receive less than the maximum?
You don't have that LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 44 Law and Government/Licenses and Inspections available?
Thank you, Mr. Chairman. Mr. Pernell, I don't mean to be putting you on the spot. But when we first had our Section 8 hearings, I had gotten a list of the Section 8s in my district, and I had my office do a computer printout as to how many Section 8 properties were owned to one individual. And I found that there was a partnership that owns 29 Section 8 properties in my district; 19 of those properties are tax- delinquent to the tune of $42,341. I also checked to see -- and I find LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 45 Law and Government/Licenses and Inspections this absolutely appalling -- this partnership owes $83,772 in water bills. I mean I think that could reduce probably the water rate for all of the citizens in the city. We also found out that of the 29 7 properties have not residential rental permits. 8 Now, you know, I think that this was 9 initiated really to help the poor. I think we're 10 really helping the greedy in this instance. 11 I'd like to know what we're going to do 12 to, first of all, penalize somebody like this. He 13 doesn't live in the City, or that's not where 14 they're registered from. So he's in Bala Cynwyd, probably sunning himself in Florida somewhere, and getting a check every month for the 29 properties. I find that absolutely appalling. I'd like to know what we're doing now, how are we addressing it now? I have not had the opportunity to read the Mayor's report. I would like to know how the Mayor is going to address problems such as I just enumerated to you.
Okay, I would defer the specific comments on the Mayor's program on those specific action to Mr. Kromer. LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 46 Law and Government/Licenses and Inspections However. I will say that during our first coordinating meeting, there was a cross section of the City represented that was unlike any meeting that I had ever participated in. One of the basic issues that came us was this issue of delinquent taxes. We have relied, for the most part, on the issuance of a new rental license --
The issuance of a new annual rental license for a particular property as our trigger mechanism to see that a landlord is doing the things that he's supposed to do. Part of our checklist did not include a current tax statement, tax receipt, and it did not include current receipts for utilities. Those are things that we very easily now can incorporate into our checklist, and that would be an issue that would delay the issuance of a certificate -- a certification of a unit to a landlord. But those are issues that we would have to, as I mentioned in my testimony --
You say we would LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 47 Law and Government/Licenses and Inspections have to do that?
Yes, we are going to coordinate with the City Department of Revenue, and --
And how about a rental license, will L&I be handling that?
I'll tell you, in searching this out, I found that this gentleman had a real scheme going. If he bought the property in 1988, for instance, he had his taxes up to date, only so that's he could get the Section 8 certificate. He never paid a penny in taxes or water bills thereafter. So simply going for a rental license, if that's in fact what he's going to do, I think at that time, we should definitely check to see if the property taxes and the water bills are current.
And, Councilwoman, there LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 48 Law and Government/Licenses and Inspections is an annual recertification process for the rental license. On the PHA side, it's a simple matter of expanding our checklist to include that information, but we must --
Well, I'm sorry to say, but somebody had to be sleeping on this one.
Well, we must coordinate with the City Department of Revenue and the Water Department in order to get that information. And it's one of the inter-agency agreements that we've identified as being necessary for this process to run a lot more smoothly.
Councilwoman Blackwell, do you want to follow up on the question of the rental values, or is it a different area?
One of my colleagues mentioned that if a tenant has no 21 income, that this person -- that the landlord is paid a hundred percent. How many cases like that are you aware of? You gave us some numbers at the beginning. Give us some idea, how many of the total numbers LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 49 Law and Government/Licenses and Inspections and how many people rent to people with no 3 income?
I've been told that currently, there are probably about 300 people that fall into that category.
There are 300 people renting separate Section 8 units?
Okay, 300 out of about 10,000. These are people who rent to landlords with no income? Or do you know whether or not there was some reason whether they lost their jobs, whether they're victims of this Act 35? Or do people just go to landlords and tell them, "I don't have any income, rent me a place"?
Well, they would have to first come through PHA in order for us to do an -- we do an income verification and we screen people to deem them eligible for the program. They are then just given a list of landlords who accept Section 8 certificates. And if that landlord accepts the certificate that is in the possession of someone who has no income, LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 50 Law and Government/Licenses and Inspections then he or she is entitled to the full FMR for that unit.
Thank you. Expanding the conversation beyond water and taxes, in a typical arrangement, who pays the gas bill, who pays the electric bill in a Section 8 home?
It depends on the individual situation. When a Section 8 participant finds a unit and notifies the Housing Authority that found a unit, there's an inspection that takes place. There is a form that the landlord has to complete that indicates what the utilities are, whether or not those are utilities that the landlord is going to pay. Or that they are the responsibility of the participant. So it depends on each individual's situation.
I honestly don't know too many landlords in today's environment that include utilities when they rent a property because they have little control over the amount LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 51 Law and Government/Licenses and Inspections of utilities that are used. And electric, if it's misused, can become very, very expensive, along with gas. My question is: With this recertification process that occurs annually, if a tenant has zero money and you have 300 people out there, how are they paying their electric bill, how are they paying their gas bill, and if their electric is shut off, have you ever had a situation on a Section 8 home where the energy company was -- is that just a hands-off policy that's hands policy if it's Section 8?
This is going to be complicated, but I'm going to attempt to explain this. Because when we say that HAP payment or the payment that the government makes on behalf of the family is a hundred percent because they do not have income, in effect, they may have some income. But there is a situation where there's something called "a utility allowance" that is computed for a family. The best example I could give you is if we looked at the income of a participant, and 30 percent of their adjusted LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 52 Law and Government/Licenses and Inspections gross income would result in them paying $50 a month towards their payment towards the total payment of rent to the landlord, and we look at the utilities that have identified that the family is going to be responsible for paying, and those utilities are electricity and gas, there is an allowance that is computed for each of those utilities. The total of those allowances is then deducted from whatever 30 percent of their adjusted gross income. And taking my example further, 30 percent of their income causes the family to pay $50. The utility allowance for the utilities that have been identified equals $200. There is a -- there is a $150 difference. The family, then, is computed as paying zero rent. If that is making any sense.
We provide -- the family is responsible for paying the utilities based on the utility allowance check, or the difference of 150 that we sent send to them. LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 53 Law and Government/Licenses and Inspections Because the expectation each month -- because the expectation is that they would conserve their utility usage so that that amount of money would compensate the usage.
So if their electric bill -- if, let's say, their usage is less, they still get the fixed amount and they can do whatever they want with the excess? So if they decide to really cut back, that's money for --
If you don't pay the bills, well -- but from my years in the utility business, I cannot remember a Section 8 house ever being terminated for nonpayment.
It does happen. Because the reason I say that, if the -- if the property does not have utilities or service, the property would not meet housing quality standards.
Did the homes that Mrs. Verna indicated that didn't pay water bills ever have their water shut off?
The water is the LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 54 Law and Government/Licenses and Inspections responsibility of the owner, and so we would terminate that property if the water was, in fact, cut off.
So if it were shut off -- why was it hands off the water revenue? Was it basically because it was a Section 8 house and they said, We're going to treat that differently than another person that doesn't pay their water bill?
In our attempts to coordinate with the Water Department, there is nothing in the system that identifies a Section 8 unit. We provided a list of Section 8 addresses to the Water Department, and they then did a computer takeoff of those addresses and came up with the data. But in an ongoing basis, it's one of the difficulties of managing this type of program. There's nothing that identifies something as a Section 8 unit to people outside of LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 55 Law and Government/Licenses and Inspections the realm of PHA.
I think we're beginning to go pretty far from the main purpose. These are interesting. And I think out of this will come a strong recommendation by the Committee that there been some kind of joint continuing cooperation between the City and the PHA. Because I think there's a lot that's missing between the cracks. But that basically is not the major aspect of this hearing. We're very much concerned, we're trying to point out areas that we think. And we thank Councilman Rizzo for raising that point, as we thank the other Council members for raising their points. Councilman Nutter.
Thank you, Mr. Chairman. Mr. Pernell, Miss Moon. And Miss Costa, welcome. We have been eagerly anticipating your presence here with us. We understand that you were not able to share information with us on two previous occasions. I think it should be LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 56 Law and Government/Licenses and Inspections noted for the record that --
I believe, Councilman Nutter, that Mr. Pernell's choice not to be here.
As I said, Mr. Chairman, they were prevented from being at the hearing. And this hearing started at 1 o'clock or about 1:20. And, so far, mass hysteria has not broken out. I think the City is still operating and functioning and the Section 8 program is probably still doing whatever it's doing. You could have been here, I guess, a couple of occasions ago; and the general public, as well as this body, I believe, would have benefitted from your presence. I'm going to ask you a couple questions. I want to get back to the area where Councilman Cohen was. Mr. Pernell, you said in your response to Council Cohen that some PHA personnel had some level of participation in the development of the report that was released yesterday. Was that your testimony? LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 57 Law and Government/Licenses and Inspections
Okay, would you care to share with us what that level of involvement was for either yourself, Miss Moon, Miss Costa, or anyone else at PHA.
The basic issues fleshed out in the report released yesterday are relatively consistent with the information that we've provided to our board and at the request of Mr. John Este, who was coordinating on behalf of the Mayor throughout the different on-and-off testimonials that were expected from the Housing Authority. The issues that were reduced to paper, we pretty much were in agreement that they were issues, but a lot of things needed to be more crystal clearly fleshed out. And let me be a little bit more specific. There is a tone to the report that the responsibility of a lot of these things rests solely with the Philadelphia Housing Authority. We feel, as it relates also to our Public Housing Agency, that a lot of services out there are being directed and are being provided. There just isn't LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 58 Law and Government/Licenses and Inspections a clear reporting and coordinating mechanism for folks to set up a continuum of care for these people. The best example and the most direct is the shell shelter people. We meet with Mr. Nardone's people every month and we try to coordinate our efforts. But there is no formal process right now that takes the information that may have been gathered on a potential Section 8 resident, that is gathered by the Office of Emergency Shelter Service and formally transfers that information to PHA if that client comes into our care.
Let me ask this question, and this is for each of the members of current panel. Have you been asked in your time as Interim Executive Director to specifically write down what you perceive to be the problems with the Section 8 program, whatever they may be and potential solutions in any kind of white paper or discussion paper or any other color of paper that you might choose to write such a report on? Have you been asked to do that in your capacity as LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 59 Law and Government/Licenses and Inspections interim executive director?
We have been asked to provide information, not in the form of a series of recommendations, but to provide background information on the program.
I specifically have not been asked to develop what I would consider to be the critical issues on paper. As Mr. Pernell stated, I was a part of the meeting, the coordinating meeting that was held. And during that time, there was an agenda where we indicated what we considered to be the critical issues and began to have dialogue about addressing those issues.
Yes. LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 60 Law and Government/Licenses and Inspections