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Public Statements

Public Housing Asset Management Improvement Act of 2007

Floor Speech

Location: Washington, DC


Mr. ROSKAM. Mr. Chairman, I yield myself such time as I may consume.

Mr. Chairman, I rise in opposition to H.R. 3521, the Public Housing Asset Management Improvement Act of 2007. The bill makes several changes to the Department of Housing and Urban Development's Public Housing Agency Asset Management Final Rule. And what I'd like to do, rather than reading a lengthy statement, is just sort of summarize some of my concerns in a nutshell.

Without question, there's been a great deal of good work and good faith that's been put in on this bill, but I think that there's a couple of key points that just fall a little bit short, and I think we can do better.

The first is, the exemption of so many public housing authorities from the asset management mandate. And that's something that's a good thing, on balance. Asset management says that if you've got unit A and unit B and unit C of public ho using, then we're going to determine the cost of unit A, the cost of unit B, and the cost of unit C, and that we're not going to mix all these things up together and act as if each individual one isn't responsible for an individual cost. Asset management is a good business practice that makes all kinds of sense. And if the bill, as amended, is ultimately passed by this House, 88 percent of public housing authorities in the United States would be exempt. That's a bad idea.

The second thing that is actual ly a bigger concern to me, is section 2 of the bill, and it relates to management and related fees. Let me just read part of the language that this House is being asked to vote on. It says, ``The Secretary shall not impose any,'' and that's the operative word, Mr. Chairman, ``any restriction or limitation on the amount of management and related fees with respect to a public housing project if the fee is determined to be reasonable by the Public Housing Agency unless,'' and then there's a couple of limitatio ns that have to do with timing. The Secretary shall not impose any restriction or limitation. Any restriction? Any limitation? And who is it that's going to determine whether a fee is reasonable?

Well, under this bill, as amended, under this bill, it's going to be the very entity that's going to be the beneficiary of that fee. So we're essentially saying to the fox, Why don't you guard the henhouse? Why don't you decide what your fee is going to be, and you simply send the bill to the taxpayer, a nd that's the bill that's going to be paid? I think that's unreasonable. I think that common sense says, no, no, no. Common sense says, there's going to be someone else that determines reasonableness of fees before a bill is going to be paid. And what this does is it says, and it's a curious thing to me. I can't figure out for the life of me why. It says that the determination of reasonableness and the renegotiation of reasonableness can't be brought up for another year. This can't even be the subject of a conversation, a substantive negotiation, until April 1 of 2009. And then, even if something is negotiated then, it can't be imposed until 2011, 3 years away. I just think that's unreasonable, and I think it is a financial control that's in place that is being put adrift, and we're not going to be able to get it back for 3 years. Costs are going to go up. Mark my words.

Finally, this allows for the diversion of capital funds, Mr. Chairman. You know, there's always a natural tension, right, between capita l funds and operating funds, and we hear that all the time. There is no shortage of national attention and national conversation and national concern about the atrophying of our capital, the atrophying of our infrastructure. And what we ought not be doing is creating more fungibility, in other words, more pressure to take money and divert precious capital money from capital expenditures, which are the traditional bricks and mortars of public housing to go into the operating side. And for those reasons, I ri se in opposition.

Mr. Chairman, I reserve the balance of my time.


Mr. ROSKAM. Mr. Chairman, I yield myself such time as I may consume.

I appreciate the tone of the discussion this afternoon very, ver y much. I just want to point out and really ask the House if you notice something, and at the beginning of my remarks, I put out, essentially as a challenge, this concern that I have of this language: the secretary shall not impose any restriction or limitation on the amount of management and related fees. Nothing: no restrictions, no authority, completely stripped so that there is nobody that has the ability that can come in and say this invoice for management, this amount of money for management, are you kidding me? That's outrageous. Nobody has the authority to do that. They do now, they do currently have that ability, but under this bill, Mr. Chairman, that authority goes away.

Now, the gentleman from New Jersey, the previous speaker, mentioned the fungibility argument. I accept that as an argument. I just don't think it is a good idea. I don't think that something that's in an appropriations bill, just because it's a bad idea, that it needs the House's imprimatur once again. That's going to expire at the end of the year, and I think we can do better.

So just in summary, what we are being asked to do today is essentially to limit down the amount of public housing authorities that would be under asset management to only 12 percent of the public housing authorities in the United States. Only 12 percent of them would be subject to asset management if this bill is enacted.

So I think those are sufficient numbers to say, you know what, I think we can do better. Those are sufficient reasons, sufficien t arguments that would suggest that we can do better. This should go back to the drawing board. And I urge a ``no'' vote.

With that, I yield back the balance of my time.


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