NEW DIRECTION FOR ENERGY INDEPENDENCE, NATIONAL SECURITY, AND CONSUMER PROTECTION ACT AND THE RENEWABLE ENERGY AND ENERGY CONSERVATION TAX ACT OF 2007 -- (Senate - April 09, 2008)
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Ms. LANDRIEU. Mr. President, I rise to speak about an amendment I have
offered with Senator Wicker from Mississippi. Our amendment is pending. It is germane. We hope to have a vote sometime soon on this amendment, if we can move past this present standstill.
I want to just put up some numbers to try to explain our situation in Louisiana. I have used this chart before. This chart is the underlying reason for the bill that we are on because these are the top 10 districts in the country, according to the official data, where these foreclosures are taking place.
As you can see, there are about 40,000 distressed properties in and around Detroit; about 10,000 in Stockton, CA; 30,000 in Las Vegas; about 51,000 in San Bernardino, CA; about 23,000 in Sacramento; about 27,000 around the Cleveland area--and it goes on. These are the top 10.
Now, this data is readily available. I am sorry I do not have more than just the top 10. But I used this chart to make my point about our situation still in Louisiana and on the gulf coast.
You can see, the percentage of households in Detroit is about 5 percent; the same with Stockton, CA, and Las Vegas is 4 percent. That is a real crisis in those areas. It seems like a small percentage, but if you are in a neighborhood where there is a concentration of these kinds of homes, the problem is--and what we are trying to solve, those of us who are supporting this bill; and I am supporting this bill--to try to provide some additional community development block grant funding because not only are we trying to perhaps come up with State-based local solutions that might help these particular families, but the real tragedy, in my mind, is those families around these homes who did absolutely nothing wrong. They took out a 30-year mortgage. They have paid their mortgage every month. They did not enter into any flimflam kind of agreement.
But the problem is, as homes collapse around them and become vacant and are foreclosed on, these homeowners who did nothing wrong, who have most of their net worth tied up in the value of their home, are seeing, through no fault of their own, their property values plummeting.
Now, if you are a young person, and you are a homeowner in this situation, you might have time to ride it out. But if you are a senior getting ready to retire, or if you are getting ready, in middle age, to send your two children to college and were hoping to refinance your home to do that and had planned for 20 years--this was your plan to send your kids to college. You did not get to go to college, but you have saved and scrimped and worked hard, and you were going to refinance your house to send your children to college. Guess what. Your kids do not go to college because your neighbor took out a subprime loan, and it is causing your property value to plummet.
Now, I know the President does not understand why community development block grant moneys are important. He does not understand a lot of things. But some of us do understand why we need to help people in these neighborhoods.
So I am just explaining that while the numbers are very high, and these percentages are startling, I want to show you what our numbers look like in Louisiana because if these look bad, ours are terrible.
It is not because we had foreclosure problems. It is not because we have subprime--in fact, our State does not really have the same problem that California and Nevada are facing. But we had our own sets of catastrophes, and that, of course, was in the storms of a few years ago, Katrina and Rita, that hit the gulf coast--both just historic in their devastation.
We are still having a housing crisis throughout the gulf coast, really from Alabama to the southern part of Texas, as people struggle with the impact of those storms. In New Orleans and Saint Bernard and in the southeastern portion of Louisiana, our situation was even further complicated when the Federal levees that should have held did not. They failed, and people who had never had an inch of water in their home had 14 feet and lost everything they had worked for their entire lives.
So in St. Bernard Parish we see not 5 percent, not 4 percent but 54 percent of the homes are empty or devastated. In Cameron, LA, not 4 percent or 5 percent but 46 percent of the homes; in Plaquemines Parish, 44 percent; in Orleans Parish, 78,000, almost 80,000, out of only 122,000.
That is an extremely high percentage almost 42 percent of households that are still damaged or destroyed.
Now, what has been done to help these homeowners? Some have been able to collect their insurance, but very few people have collected all of what they thought they were due. Some have collected a modest grant we gave from this Congress of an average of $60,000. Some have received--that is about the average for homeowners. But I would contend that a $60,000 to $75,000 to $85,000 grant and some insurance proceeds they were able to receive does not, by any means, get these homeowners back to where they need to be.
So we have tried to pass additional legislation that might help and have been unable to move anything substantial through the Housing Committee. However, we now see an opportunity on this floor on a housing bill that is attempting to reach communities that are in distress--ours is in distress for a different reason, not, as I said, because of failure to pay or because of delinquency or foreclosure. We see an opportunity, by making a very modest change in the underlying bill, to help these homeowners. This would make it clear, with the amendment I offer with Senator Wicker--our amendment would simply say that in the community development block grant portion of this bill, that it be allowed to be used not just for homes that were foreclosed but for homes that were conveyed to local land banks.
To deal with this situation, we have created in Louisiana--or are in the process of actually creating--parishwide authorities that are done at the local level; they are called land banks. They have other names for them, such as redevelopment authorities. They exist throughout the country. It is not anything new. But we are finding we may need to be supporting these kinds of land banks as properties are conveyed back to the Government--not in every case, but some people are making choices. They don't want to rebuild in that place; they would rather take their grant money and build somewhere else. That piece of property is then conveyed back to our State land bank, and our land bank is trying to move these properties back to local parish-based land banks so these neighborhoods can be redeveloped with some sort of rhyme and reason to them; so it is not hit or miss but that there is some sort of local planning. We are being required to build better and stronger and smarter. We are trying to actually live up to that challenge by being smart about the way we redevelop.
I see the ranking member of the committee on the floor, the Senator from Alabama, who is familiar, of course, with some of the devastation that occurred because some of it, unfortunately, happened in Mobile--not to the extent it happened in the southern part of Mississippi and Louisiana. But what I am saying to the Senator from Alabama is that with one modest change that actually is germane, according to the Chair, and does not cost anything, we would simply allow our portion of whatever comes to Louisiana and Mississippi--not a dime more than what is already in the bill--to be used for land banks associated with the redevelopment of these kinds of properties. I am afraid, if we don't make this change, it might put Mississippi and Louisiana and, frankly, Alabama and parts of Texas in the position of not being able to use their community development block grants for the problem they have.
So in this whole country, some States have problem A. In other States, we have problem B. I am trying to make sure our problem is met with this amendment. It is not adding anything; it is an allowable use of our community development block grant, and it will go a long way to help.
Now, we estimate--I don't know if the Senator from Alabama has these numbers--that for our State, based on the formula that is in the bill, Louisiana may get somewhere between $90 million and $100 million, but we don't know until that formula is promulgated by the Secretary of HUD, but we estimate that based on the formulas in the bill. So we want to make sure the $90 million or $100 million can actually be used to help these homeowners because they are technically not in foreclosure. They are in various stages of legal status, but they are not necessarily in foreclosure.
So that is the purpose of our community development block grant amendment. I would most certainly appreciate it if the leadership would take a look at it. Again, it is amendment No. 4447. It doesn't cost anything. It is scored at zero. I have a great partner in offering this amendment, the Senator from Mississippi, Mr. Wicker. So that is the community development block grant amendment.
I wish to take a moment to also talk about the mortgage revenue bonds, which is part of the financing part of this bill. As my colleagues know, this bill is basically made up of two different sections. One is a housing section and then one is a tax section. In the tax section of this bill, one of the ways the Finance Committee wants to try to alleviate some of the problems around the country is to allow the issuance of some additional mortgage revenue bonds. We have done this for years and years and years. Before I was a Senator, I was the State treasurer. I used to issue these bonds in my State. They are a very good tool to promote home ownership, which we believe in at home in Louisiana, and I am sure everyone else does as well. It gives opportunities to build affordable, low-income housing where there is a real need throughout the country, particularly now in the gulf coast.
One of the things I am very concerned about--I don't know if the Senator from Alabama or the Senator from Utah, who is on the floor, experienced this in their States, but we have a real shortage of affordable housing for seniors, as more people want to live independently, but they don't necessarily want to live in a 2,000- or 3,000-square-foot home by themselves. They would like to move somewhere closer to maybe where their family is, and they would like an affordable rental unit. Some people would like to buy a condo, but to people of a certain age bracket, a condo is not something they grew up with, so an affordable rental is a more comfortable situation for them. We can't find a lot of senior housing down in the gulf coast right now. Most everything we had was literally washed away or flooded or destroyed.
So the great thing about this particular provision coming out of Finance is these revenue bonds could be used for this kind of building. Again, the other amendment I have, No. 4404, does not have a score. Actually, it has a minor score of $3 million. It is very minor compared to the other costs of this bill. It is de minimis, a $3 million cost. What it will do is it will allow us to be able to again use our bonding authority--not anything more, not anything additional, but to use our bonding authority to address the problem we have with these properties.
I wish to show some pictures. This is a neighborhood--I am sorry I can't identify where this is, and it was some time ago. Most of this debris has been picked up throughout the gulf coast, but in many places, while the debris is gone, these structures remain as they are here: abandoned and destroyed until property owners figure out what they are going to do.
Here is another picture we have used. I am not sure, again, where this is, but houses such as this are still throughout the gulf coast area; a lot of it has been cleaned up. Maybe this home has been gutted, but it is basically down to its 2 by 4s, and it is basically sitting there in neighborhood after neighborhood. This is actually a home in St. Bernard Parish in a community called Chalmette.
I wish I had better pictures to show the blocks and blocks of devastation that still exist. When I say devastation--it is cleaned up, on many of the lots the grass is cut, but there are no homes there, there is no neighborhood there. The library is not yet back, the Post Office is not yet back, and people are still struggling to rebuild their neighborhoods.
So I am imploring the leadership handling this bill to please take a look at amendment No. 4404. Please take a look at amendment No. 4447. The cost in one case is nothing. The cost in the other is a de minimis $3 million, but it will help tremendously to make this bill, we hope will pass, applicable to the situations in Alabama, Mississippi, Louisiana, and Texas, whose people are still struggling 2 1/2 years after this devastation.
Basically, that is the gist of my remarks. We have another amendment pending relative to the tax credit, but I will hold my remarks on that. But these two amendments we are hoping we can get included in any kind of modified package. Again, I have bipartisan support. It does not increase the cost of the bill, and it would go a great way to make sure this bill, if it does get passed--I know there is opposition in the House and I know the President is opposed to this bill, so this bill may never see the light of day. I am very clear about that. But if it does, at least let the people of Louisiana and Mississippi use the money that is being allocated to us anyway for the problem we have--not the problem everybody else has--because we simply have a different problem. I hope my colleagues would recognize our situation.
I yield the floor.
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Ms. LANDRIEU. Mr. President, it looks as if we are getting to the end of this debate on housing, and it has been a good one.
I come to the floor before we move to the final stages of this debate to thank my colleagues for their extraordinary help in putting into this bill, which is a major piece of legislation--attempting to help communities throughout the country deal with the added rate of foreclosures, the spiraling downward of so many neighborhoods due to a variety of different circumstances--and I think it is important that the Senate act today.
I particularly thank the chairman of this committee, Senator Dodd, for his patience and his tenacity in getting us to this point and for putting in many good provisions into this bill that will be a help to homeowners, to communities, in some instances to lenders, who got themselves into difficulty because, again, our goal is to try to reinvigorate the housing markets, to stop the slide. Particularly, in the case of Louisiana, we still have a significant housing crisis that did not start with the foreclosure crisis but started when 250,000 homes were destroyed by Hurricanes Katrina and Rita.
This Congress has been generous at times in helping us to try to come up with ways to deal with this unprecedented situation. I am very grateful for the amendment that was adopted overwhelmingly last week by a vote of over 70 Members of this body to say that our Road Home grants, which is what they are called in Louisiana--they are called Homeowner Assistance Grants in Mississippi--but those grants that have been provided by this Congress to help people rebuild homes that were destroyed when insurance proceeds were either not available or not enough. This is from small towns such as Waveland, MS, to very large cities such as New Orleans, LA; places such as Lake Charles, LA, to small little communities such Creole, LA, on the southwest side.
So it is affecting urban and rural places in my State. That amendment we adopted last week will be a significant help to homeowners trying to use those grants to get back into their homes. Until that amendment passed, this grant, if you will, was taxable. With the amendment we placed on the floor of the Senate, those grants will be treated as nontaxable, basically.
I wish we could get this bill to the President's desk before April 15. We are going to move it off the floor today. It has, of course, to go to the House for negotiations and eventually get to the President.
I am very hopeful this bill--generally in its current form, with, hopefully, some improvements, as it continues to move through the process--can get to the President's desk quickly because our people on the gulf coast--particularly in Louisiana, but on the gulf coast--who received help 2 years ago through community development block grants are feeling a real pinch right now because they are now paying $5,000, $10,000 or $20,000 in taxes on those grants at a time when they can least afford it.
I cannot tell you how many people stop me when I go home and say: Senator, if you could do one thing for us, please tell them we cannot pay tax on these grants we have received--which have been minimal, helpful but minimal, in their efforts to rebuild hundreds of thousands of homes.
Let me say for the record--and I am very proud of Habitat for Humanity. I am the cochair of the Habitat for Humanity caucus here. I have been on many builds throughout the country. Habitat for Humanity, which has not stopped working since the rain stopped--and I see the Senator from Connecticut on the Senate floor--and which has had thousands of volunteers every day coming to their sites in Louisiana, has only completed 162 houses--162 houses--and they are the largest homebuilder in New Orleans. We lost about 250,000 dwelling places throughout the state of Louisiana. So I am here in an uphill battle.
I appreciate my colleagues bearing with this speech over and over again, but I can only say, if your cities or your communities were as devastated as the ones I am representing, you would be here, too, trying every way you could to bring every little bit of help and big help to them.
So I am grateful that finally we got a housing bill to the floor after 2 1/2 years. Finally, we got a very significant addition to some tax relief. I will say that in further reading of this bill, I am encouraged--the Senator from Connecticut is here--that the $140 million to $150 million in extra mortgage revenue bonds that will come to our State will be a help. I think in further reading of the bill, the underlying bill actually will work for us. So I am very pleased.
I think we will continue to work on the $95 million to $100 million that will come to our State in the underlying bill to help land banks. We are establishing and have established NORA in New Orleans and other land banks, perhaps in St. Bernard, Cameron, Lake Charles, perhaps in Plaquemines, perhaps in St. Tammany and Jefferson Parishes, which are the hardest hit parishes.
I think this bill allows for support of those land banks. So that is another $95 million to $100 million that may come for that purpose, and we have been looking for some help in that regard.
So, overall, this bill will address many issues in Louisiana with the additional help we have received through these amendments. I am very pleased that we have made progress.
Again, I wish to thank the Senator. He has been more than generous with his time. I know this has been difficult because there are 50 of us who are asking him for special help and attention. But he has been down to our State. I am hoping he will come back and walk through some of these neighborhoods.
Finally, I will say that this is quite an interesting and wonderful--if you can say that--experiment going on in the United States of America, because the question is, when a community of 60,000 people is wholly destroyed, which happened in St. Bernard Parish, the parish south of New Orleans, is it possible for the Government to rebuild it? If so, how and how quickly and how well? There are nonprofits and there are universities, from Harvard University to Stanford to LSU to some of the top social scientists in the country right there on the gulf coast, because in their minds, in this century, there has not been a devastation like this in modern times.
So there are some interesting questions: How does a neighborhood come back? Do you build the churches first or the schools or the libraries? How important is water and electricity relative to the scheme of things in terms of rebuilding neighborhoods? How do you do it with community planning in a democracy where every neighbor's voice has to be treated the same? So these are some exciting times. We are just making the best of a very desperate situation and trying to do the best we can to rebuild our communities.
I want to end with thanking all of the volunteers, all of the nonprofits, all of the businesses that have stepped up. I thank the Senate for acting on at least a very significant portion of this tax relief for homeowners who are still putting the pieces of their lives and their fortunes back together--regardless of how modest some of those fortunes may be--neighborhood to neighborhood. But people are really trying to put their homes and their lives back together. So I thank the Senator from Connecticut.
I understand we are going to move now to the managers' package. Again, we have some significant portions taken care of in this bill. I am looking forward to being able to let the State know that another $140 million, $150 million worth of mortgage revenue bonds that I personally hope will go to affordable, low-income housing, workforce housing, and particularly for seniors who have been so devastated by the loss of their homes, and again, the support that may come out of this bill for our land banks as we think of new and innovative ways to get this property back on the private rolls, redeveloped in a way that creates excitement and vibrancy in neighborhoods from New Orleans East to Lakeview to the Lower Ninth Ward, all the way to lower Packwood Parish, which is about as far south as you can go in Louisiana.
I thank the Senator from Connecticut, and I yield the floor.