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Hearing of the Senate Banking, Housing and Urban Affairs Committee - Greener Communities, Greater Opportunities: New Ideas for Sustainable Development and Economic Growth


Location: Washington, DC

Chaired By: Senator Christopher Dodd (D-CT)

Witnesses: Secretary of Transportation Ray LaHood; Secretary of Housing and Urban Development Shaun Donovan; Lisa Jackson, Administrator, Environmental Protection Agency

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SEN. DODD: The committee will come to order.

Let me thank all of you for being here this morning in what I believe to be an historic hearing. Those words probably get used more frequently than they should, but I believe this is historic, and that the three witnesses are -- with us this morning, I don't believe, have ever appeared jointly before this committee or, for that matter, any other committee that I know of, at least -- going back, I looked at the records -- where we've had the secretary of Housing, the secretary of Transportation and the administrator for the Environmental Protection Agency together at one hearing on a common theme.

So we thank all three of our secretaries for being with us, and we thank the audience that's come out this morning. And I thank my colleagues for joining us here -- Senator Shelby may be able to get by -- we're not sure yet -- this morning -- and other members who are interested in the subject matter.

Today's title of the hearing is the "Greener Communities, Greater Opportunities, New Ideas for Sustainable Development and Economic Growth." This is an important subject matter, and all three of our witnesses are -- have wonderful backgrounds and knowledge and expertise in this area. So I want to begin by thanking all three of you for being here this morning and participating in this hearing and in this discussion of how we move forward.

So let me thank you for joining us. I hope all had a painless commute, by the way, this morning. But if you didn't, I can understand entirely. I'm from Connecticut, and Connecticut has a long history of understanding what it is to have a painful commute. And although we love our state, we know something about rough commutes.

Take I-95, the main corridor that runs through southern Connecticut: Over the last 50 years, average daily traffic in the Connecticut southwest corridor has increased more than sevenfold, give you some idea of the problem. Imagine you're on your way home from a hard day at the office, and when you get there, your children are hopefully waiting for dinner, but at the rate traffic is moving, you're just hoping you might get there in time for breakfast in the morning. For 20 minutes, 45 minutes, over an hour, you grit your teeth, grip the wheel harder as traffic crawls slowly along the highway. The air is clouded with exhaust from what seems like millions of cars barely moving at almost $3 a gallon. And things won't get any easier when you and your fellow motorists slowly grind along the same road to work the following morning.

So welcome to the daily commute for far too many residents in my state and many, many others across this country. It's not unique to Connecticut. It's becoming not unique at all. It's becoming more the standard.

So if you know me at all, you know how I feel about the importance of new transit options. I've been a longtime advocate for the tri-city corridor that will connect new transit villages, get people off the roads and revitalize our regional economies. We'll accomplish this by initiating new commuter rail service in a 110-mile- an-hour intercity train service between New Haven, Connecticut, Springfield Massachusetts, with direct connections to New York City and eventually Boston as well. This project is one of my top priorities, as it is for the Connecticut delegation here, as well as the people in our state, and to use this as an example, again, of densely populated areas and alternative modes of transportation.

But our communities are growing and changing, and too often our approach to community development policy has been like one of those cars on the Merritt Parkway in Connecticut, trapped in gridlock, never moving. It's time to rethink the way we plan the futures of the places in which we live, work and raise our families.

Between 1980 and 2000, the growth of the largest 99 metro areas in the United States consumed 16 million acres of rural land. That's about an acre for every new household. And with new population expected to grow by over 150 million people between 2000 and 2050, this land use trend simply cannot continue, for all the obvious reasons.

Before today, federal policy has often treated transportation, housing and environmental protection as separate issues distinct from each other. But that system of stovepiping simply isn't working. And the consequences of failing to address the way we plan our communities' growth are many. We'll continue to lose our rural land and open spaces. We'll see a worsening of the traffic congestion that has tripled over the last 25 years. We'll continue to pay more and more at the pump at a time when our family budgets are already stretched to the max. We'll continue to push lower income families further away from job opportunities. We'll continue to increase greenhouse gas emissions, despite the urgent threat of climate change.

In February, I wrote a letter to President Obama urging him to establish a White House office of sustainable development to coordinate housing, transportation, energy and environmental policies. The president has been a strong leader on these issues, and he has already shown a willingness to shake up a federal government that hasn't always succeeded when it comes to addressing related issues in a comprehensive, effective, holistic way.

Today, following up on that letter, we've invited three members of the Cabinet who don't usually spend as much time in the same hearing room as they should, in my view. We'll be outlining -- they'll be outlining for us the administration's commitment to sustainable development, a commitment that recognizes the importance of working across traditional boundaries to create more cohesive and collaborative policies.

One important piece of the work we have to do is to provide more transportation choices for families in our nation. Few states suffer from worse traffic congestion than my home state of Connecticut does, and the lack of good transit options costs families more than just inconvenience. In large part, due to congested roadways and the lack of affordable housing and transit options, Connecticut ranks 49th in the country in keeping our young people in the state. Meanwhile, living in a transit-rich neighborhood saves money, on average as much as 10 percent of a family's budget. This is particularly important for those living on fixed incomes, or struggling to get by in a tough economy, as people are today.

Improving transportation isn't just about making a daily commute easier. It's about empowering people to access jobs and critical services and making things just a little bit easier for those on a very tight budget. It's a problem that hurts not only the quality of life for our citizens, but also opportunities for businesses. So we must improve and expand bus and rail service, providing new choices for families who would no longer have to drive to work and creating space on the road for those who do.

And we need to build more and better housing options near these transit stations. For instance, my state has developed a program called Home Connecticut. It makes grants available to towns to plan incentive housing zones for higher density, mixed income housing in downtown areas and redevelop brownfields close to transit options and job centers. It's a strategic investment in our economy, our environment and the quality of our life in Connecticut. We've already begun to make progress in my state, and we can do more, I believe, across the country with similar models.

This committee is currently drafting legislation to provide incentives for regions to plan future growth in a coordinated way that reduces congestion, generates good-paying jobs, meets our environmental and energy goals, protects rural areas and green space, revitalizes our main streets and urban centers, creates and preserves affordable housing and makes our communities better places to live, to work and to raise our families. Our bill will also create a competitive grant program to provide resources to some of the projects identified in this planning.

There's a lot we can do in this committee in this area, and I look forward to continuing to work alongside my colleague, Senator Shelby, the former chairman of the committee, and our colleagues on this committee, many of whom care as deeply about this issue as I do, both Democrats and Republicans who are facing these issues, not just in urban areas of the East and West Coast, but even in our Western, Midwestern states where congestion is accumulating around urban areas.

It's often a great trivia question to ask people what's the most urbanized state in America. And you get all sorts of answers. Rarely is the answer given "Nevada," but that is the most urbanized state in America, with roughly 90 to 95 percent of its population residing in one county, of course, Clark County around Las Vegas.

So these issues are not just East Coast, West Coast any longer. Every state in the country, to one degree or another, is facing these challenges. And so what we're advocating here is not something just for those states that are facing the most serious problems today, but also planning for what we can down the road.

Just like I've urged the administration to do, I believe we in the Senate must work in a coordinated and comprehensive fashion as well if we're going to succeed in this effort. And particularly, this committee will need to work closely with Senator Barbara Boxer of California's EPW Committee and Senator Jay Rockefeller of West Virginia's Commerce Committee as we write the next surface transportation bill -- legislation that I hope will eliminate the stovepipes that I mentioned at the outside of this hearing within transportation policy and ensure that it helps to advance broad good related to not just transportation but community development and economic growth, energy and environmental issues.

Today we'll hear from witnesses who have already begun the important collaborative effort within the administration, public servants who are doing a tremendous job, in my view, and I commend all three of you for the first six months of efforts. Some of us had the pleasure already with Shaun Donovan, who's been in my state of Connecticut, my major cities, talking about housing and transportation issues. Ray LaHood has been, I know, around the country as well, discussing these issues as well and working with Shaun. And Lisa, we welcome you as well and your tremendous efforts in the environmental policies as well.

This administration is today making a significant and welcome commitment to sustainable development and livable communities, and we're eager this morning to discuss how we on this committee can be better partners in helping our communities plan for a much more prosperous and enjoyable future.

And with that, let me turn to my three colleagues who are here with us this morning, if they'd like to make any quick opening comments before turning to our witnesses.

Jon? Jon Tester.

SENATOR JON TESTER (D-MT): Thank you, Mr. Chairman. And I want to thank you for calling this hearing. And I want to thank the three witnesses today for the great job that you have done in the short time you've been in your positions. I very much appreciate your proactive nature, each and every one of you.

I've had the chance to work with Shaun and Lisa directly. I'll be working with Ray LaHood here in a couple weeks directly. But the truth is, is that you folks have done some great work in a short period of time. And we look forward to more great work as time goes on.

Secretary Donovan was in Montana, the end of May. And at one of the sessions we had, he talked about policy solutions and not thinking in silos, stovepipes, bringing people together and actually getting good dialogue going and getting more bang for the buck and getting better service to the people. And I think that's what we're here today -- greener communities, greater opportunities and new ideas for sustainable development as they apply to housing and transportation and water and environment -- all those things, there's a synergy that can be related between them. And I think that -- I think that this hearing is a good hearing to try to promote that, quite honestly. I don't think that you can have sustainable communities without a good housing program, nor without a good transportation program and absolutely without water, just to name three things that come to mind.

So as this hearing moves forward, I am going to appreciate your perspective on how we can get things done to make things better in this country from a community standpoint and, you know, kind of how we -- how we plot out the road map for the future, really.

So thank you, Mr. Chairman. Appreciate the opportunity.

SEN. DODD: Thank you, Senator Tester.

Mark Warner -- Senator Warner is -- of course, I've known -- Mark and I have known each other a long time, but as governor of Virginia, I know this was one of your -- it was one of your top priorities, dealing with this, because of all of us here who serve in Congress are familiar with Northern Virginia and the congestion --

SENATOR MARK WARNER (D-VA): We have no congestion in the greater capital area. (Laughter.) I'm apologizing to folks in Connecticut who still got it. You know, we've, of course, solved all that problem completely here in the greater capital area.

But thank you, Mr. Chairman, for holding this hearing. And I thank these wonderful witnesses.

I'll reserve most of my comments till questions, but I just want to echo what Senator Tester said. To get out of this -- the stovepipes -- I know land use planning and transportation planning are normally thought of as a state and local issue, but having some notion of -- could there be -- what can we do from the federal standpoint to kind of marry those two areas better together is something I'm anxious to hear about. I'm particularly anxious to hear from all of you about a concept that I know the chairman's worked on, the "green bank" idea, and how we can use that replenishing asset to make investments.

And Secretary LaHood and I have already had a number of conversations about the opportunity to think at DOT outside of the silos. And I didn't fully appreciate -- and this is -- this may be a little inappropriate to say, but as a governor I always would get very frustrated with the federal government, why we don't have a comprehensive, logical transportation policy in this country. And now that I'm a member of the Senate, I understand that better why we don't, because of just the historic jurisdictional divisions in terms of how we think about transportation. But I don't think we're probably going to change those jurisdictional divisions, but, oh boy, Ray, I -- if -- anything we can do to -- from a federal DOT standpoint to think more holistically, more multi-modally, and which obviously ties into greener communities in terms of how we think about mobility and connectivity as opposed to just VMTs is something that's really important.

So Mr. Chairman, I appreciate you having this hearing.

SEN. DODD: Thank you very much.

Senator Merkley is a former speaker of the House and understands these issues. I mentioned Western states, and this is not just the highly urbanized states that face these issues as well.

SENATOR JEFF MERKLEY (D-OR): Thank you very much, Mr. Chair.

And I can tell you all that from Oregon's perspective, you all constitute the livability dream team. We are -- we are just delighted to have you working hard on affordable housing, on transportation that works in an urban environment and certainly expanding the impact of housing and transportation in a positive way on the environment. So I'm delighted to have you all here.

Oregon is a state that has been wrestling with this for a long time. Apologies to my colleagues from California who are not here, but California was an inspiration to Oregon in that we wanted to avoid the sort of sprawl we were seeing to the south when California was growing very rapidly. So we experimented with statewide planning, and that's gone through a number of initiatives. And citizens have affirmed their determination to continue on that path with urban growth boundaries to create livability, to improve transportation, to make it more cost effective to save energy, a whole host of things. So I look forward to your testimony, and thank you for the work you're doing.

SEN. DODD: Thank you very much, Senator.

Welcome, all three of you. Delighted to have you with us. Secretary Donovan, we'll start with you, and then we'll go to Ray LaHood. And almost any supporting data and information you have, along with opening statements and materials from our colleagues, will be included in the record as well.

SEC. DONOVAN: Good morning, Chairman Dodd and members of the committee. It's a great pleasure to be here today to speak about the critical link between housing, transportation and environmental policy. I want to thank you and your committee for your leadership in developing and pushing for innovative and integrated approaches to these issues.

Today we announce a landmark agreement between the three agencies before your committee that include six livability principles that will guide our work together, representing a powerful statement of common goals, strategies and purpose for communities across the country whose vitality in the 21st century depends on our ability to work together in partnership.

Earlier this year, I was pleased to testify before the House with my colleague Secretary Ray LaHood from the Department of Transportation. Since that March testimony, we've taken important steps to improve coordination between our departments.

I'm especially pleased to have EPA Administrator Lisa Jackson join us today as a partner in this effort, providing further evidence of our commitment to collaboration and coordination across the entire federal government.

More than ever, I am convinced -- as you said, Chairman Dodd -- that solutions to the myriad challenges facing our housing markets must be addressed in a comprehensive way to reduce our dangerous dependence on foreign oil and drive down energy costs for consumers and businesses alike.

This means that HUD, in collaboration with our partner agencies, must find new integrated solutions to the multi-dimensional challenges faced by cities, suburbs and rural areas.

As you know, our budget proposal includes a $150 million Sustainable Communities Initiative to be managed by a new Office of Sustainable Housing and Communities. As the chairman said, we need to synchronize climate change, energy, community development, housing and transportation policy in the most comprehensive, holistic way possible.

I believe creating an "office of sustainable housing and communities" inside HUD, to serve as a single point of contact with other federal agencies, is the best way we can achieve that goal. Already these kind of offices at our partner agencies have helped break down barriers to change. They are proving to be a successful model for interagency coordination and collaboration.

Under our Sustainable Communities Initiative, HUD and DOT would jointly administer a $100 million fund to encourage metropolitan regions, via competition, to develop integrated housing, land use and transportation plans; and to use those integrated plans to drive the planning and decisionmaking of localities.

The goal of this initiative is to articulate a vision for growth tailored to specific metropolitan markets that federal housing, transportation and other federal investments can support. Funding would generally be used to support the development of integrated, state-of-the-art regional development plans that use the latest data and most sophisticated analytic, modeling and mapping tools available.

These efforts will benefit urban, suburban and rural communities alike, but require a level of integrated planning that spans jurisdictional boundaries in new and unprecedented ways. We simply can't afford to be territorial about these issues any longer.

The Sustainable Communities Initiative in our fiscal year 2010 budget also includes $40 million in grants that will be used to support metropolitan and local leaders in making market-shifting changes in local zoning and land-use rules; and another $10 million for research.

With the cost of transportation now approaching those of housing for many working families, we will work to jointly develop a "housing and transportation affordability index" with DOT. When you buy a car you know very clearly what its energy efficiency is because there's a sticker on the window. We need the same thing for our houses and our buildings.

An "affordability index" will give consumers and businesses alike the information they need to make informed choices that meet their needs, creating a more dynamic, efficient marketplace. That is why we intend to share all this data, research and evaluation with the private sector to catalyze innovation and maximize market efficiency.

We will also conduct an intensive review of our respective programs to determine how to support the marriage of Housing and Transportation, and to emphasize location efficiency. Included in this work will be a historic effort to develop data and bolster research to better track housing and transportation expenditures by location.

Since March, when we announced our agreement with DOT, we have made significant progress. Teams from our agencies are meeting on a weekly basis. Further, we are pleased to announce that EPA is now a full partner. They will work with HUD and DOT to address water infrastructure issues, expand technical assistance to state and local governments, return brownfields sites to productive use, and address hazardous waste and other barriers to reinvestment in older communities.

As a result of our agency's work, I am please to join with my DOT and EPA colleagues to announce a Statement of Livability Principles. These principles provide a set of guidelines for each agency to formulate and implement policies and programs. More importantly, they mean that we will all be working off the same playbook. For the first time, the federal government will speak with one voice on housing, environmental and transportation policy.

The first principle -- providing more transportation choices, addresses our need to expand the options available to American families, whether commuting to work, dropping children off at school, or running errands.

The second principle -- promoting equitable, affordable housing, is at the heart of HUD's mission. In order for our neighborhoods to thrive, our regions to grow and our nation to prosper, we must support communities that provide opportunities for people of all ages, incomes, races and ethnicities to live, work, learn and play together.

The third principle -- increasing economic competitiveness, pinpoints the need to coordinate housing, transportation and environmental policy to make us more competitive and productive. Our nation's ability to compete in a global economy is dependent on how quickly and efficiently we can connect our labor force to education and employment opportunities.

The fourth principle -- supporting existing communities, identifies the need to support community revitalization, build upon existing public investments and preserve our nation's rural lands.

The fifth principle -- leveraging federal investment, focuses on increasing the effectiveness of the American government at all levels. We want to boost the capacity of local communities to more effectively plan for future growth, and support the ability of local communities to think and act regionally.

Finally, the last principle -- valuing communities and neighborhoods, brings the entire effort together. We must ensure that federal investment supports safe, health and walkable communities whether in cities, suburbs or rural areas.

So, we have our playbook, Mr. Chairman -- strong evidence that our efforts to find productive solutions together will rise the challenges before us. But, the real test of our commitment will be in putting the principles into action. I propose to do that in several ways:

First, over the next few months I intend to implement a process at HUD, led by Deputy Secretary Sims, to engage every program, in every office -- at headquarters and in the field, to identify the barriers that they encounter in implementing these principles. I will also be asking for their ideas, suggestions and recommendations. This must be an inclusive process, and an inclusive process depends on listening.

Second, I will ask our program office to incorporate these principles in HUD's next annual performance and management plans, and we will charge the 82 field offices around the country with bringing these principles to life in the neighborhoods of America.

Lastly, we will share with you the performance measures that we are developing for each of these principles so that they can measured in tangible outcomes on the ground.

As I told you during my confirmation, Mr. Chairman, I'm a numbers guy. I believe in evidence-based government and accountability. Strong performance measures will form the criteria for measuring the success of this initiative.

So, I'm optimistic that with these ideas, these new partnerships, and the leadership of my colleagues here today, and as you well -- and with you, as well, Mr. Chairman, we are poised to build the stronger, more resilient and sustainable communities Americans want and need in the 21st century.

Thank you. And, and to members of the committee, I look forward to answering your questions after my colleagues testify.

SEN. DODD: Thank you very, very much. And I'm very excited about your Livability principles. It's well done, I say to all of you.

We're being joined by Michael Bennet, as well, our colleague from Colorado. Senator, thank you for being here this morning as well.

Secretary LaHood.

SEC. LAHOOD: Chairman Dodd and members of the committee, I think the story today is that your leadership has brought us together, and we're grateful to you. And I think the other story is that Cabinet secretaries can be team players. And we take our initiative for that from President Obama, who when asked to -- asked us to serve in the Cabinet, asked us to be team players.

So, Mr. Chairman, thank you for the opportunity to discuss the Department of Transportation's plans to develop and implement a Livable Communities Initiative that will measurably enhance the quality of life for families, workers and communities across America. I want to thank you, Chairman Dodd, for your leadership in placing this important issue on the national agenda and gathering all of us together here today to answer your questions.

As I said during my confirmation hearing back in January, we must invest in transportation projects that preserve and enhance the unique characteristics of each urban, suburban and rural neighborhood. To that end, I am committed to ensuring that our transportation policies help unite and strengthen communities.

"Livable communities," by definition, offer residents choices among different modes of travel, from highway to light rail to bike paths. Public transit connects housing, employment and recreational opportunities wherever possible, and plans for growth and development take energy efficiency and lower emissions into account at every step. Today I will describe how we plan to begin to achieve these goals.

As you know, DOT has been collaborating with Secretary Donovan at HUD on concrete ways to encourage communities and developers to integrate housing and transportation planning, and related investments. And I'm pleased to announce that Administrator Lisa Jackson, of the Environmental Protection Agency, has agreed to join our Sustainable Community Partnership.

I particularly want to thank the committee for its role in encouraging us to join forces -- and you, Mr. Chairman, for encouraging us to work together. The three-way partnership will enormously affect -- in enabling the federal government to coordinate and direct federal investments in water infrastructure, better air quality, housing and transportation.

This is a new direction for the DOT and our partners, and we're grateful to President Obama and his senior advisers on the environment, domestic and urban policy for supporting this important effort. I'm very confident that our agreement to align policies and programs across our three departments -- which have traditionally been stovepiped, is a very positive and important step forward toward making our Livable Community concept a reality.

We simply cannot continue business as usual. Fresh water is a scarce commodity in many fastest growing communities. In the West and Southwest, air quality remains poor in many large urban areas. And many of our highways, airports and freight railways are far too congested to operate as they should. We need fresh ideas to address these challenges. We need to think holistically, because history has shown that a piecemeal approach does not work over the long term.

If we are truly serious about combating climate change, encouraging Americans to walk more and drive less, and conserving natural resources through more efficient land use, then we must take this cross-cutting approach. Within the last few weeks our partnership has identified an ambitious set of principles that will define our efforts in the coming months as we articulate policies, programs and grants that states and communities can tap into.

Our principles include providing more transportation choices; expanding access to affordable housing, particularly housing located close to transit; enhancing economic competitiveness in terms of giving people access to jobs, education and services, as well as giving businesses access to markets; targeting federal funds toward existing communities to spur revitalization and protect real landscapes; increasing collaboration among federal, state and local governments in order to better target investments, improve accountability, and valuing the unique qualities of all communities, whether urban, suburban or rural.

Secretary Donovan, Administrator Jackson and I stand ready to work with Congress to ensure that these principles are embedded in forthcoming legislation and regulations that govern our programs. This certainly includes the next surface transportation authorization bill, which we want to make sure is compatible with our livability agenda. This is a big task, but I'm confident we'll succeed.

Thanks to the American Recovery and Reinvestment Act -- and thank you for those who voted for it -- momentum is already building. The Recovery Act's $1.5 billion discretionary TIGER grant program will soon begin funding multimodal transportation projects that promote greater mobility and sustainability. We know we're going to receive many, many creative proposals that will help transform the transportation landscape in urban and rural communities around the country.

The commitments I have described here today, along with other efforts such as new and revitalized inner-city passenger rail service, illustrates President Obama's unprecedented commitment to making transportation work more effectively and efficiently for all Americans. It's a promise I look forward to keeping alongside with my colleagues.

Thank you, Mr. Chairman. I look forward to your questions.

SEN. DODD: Thank you very much, Mr. Secretary. And we thank you for those comments as well and can't begin to tell you how excited we are that you've taken over the helm of the Department of Transportation and your commitment to these issues. So we're very grateful to you.

These are big issues. And it's time we took on some big issues in the country. The small-bore politics that went on too long, I think, is hopefully over with. And so this is the kind of debate we ought to be having and reshaping this debate. So I thank you for that.

We're going to turn to Senator Bennet. Senator Merkley was here, but he had to step out.

Senator Bennet?

Excuse me. I apologize. Lisa, I apologize. I was going to -- I'm jumping to my colleagues instead of getting you, Lisa. I apologize.

Lisa Jackson, thank you.

SEN. : I know how late the chairman was up last night. (Laughter.)

MS. JACKSON: Uh-oh. (Laughs.)

SEN. DODD: We arrived together about 1:00 in the morning.

MS. JACKSON: Oh, my goodness. Well, good morning, Mr. Chairman, and thank you for the opportunity to be here. It is an unusual venue for me, so I can certainly understand why you're not used to seeing EPA here. But we're happy to be here this morning. And to members of the committee, good morning.

I am absolutely delighted to be here this morning with two of the most extraordinary members of President Obama's green Cabinet, my colleagues, Secretary Ray LaHood and Secretary Shaun Donovan, to discuss our agency's work on sustainable development.

Mr. Chairman, I salute you for your long-time interest and work on these issues. And I'm so happy we're here to discuss them today.

I'm happy to announce that EPA has entered into the Partnership for Sustainable Communities. And I thank Secretaries Donovan and LaHood for their leadership on this issue. EPA has been working for years on issues of smart growth, and this partnership represents a real leap forward for not only our agencies, but for the American people.

The partnership recognizes that the work of our agencies is connected in designing or improving our communities to be sustainable, for the long-term mobility, housing and environmental issues are entirely interconnected. Where you live affects how you get around, and how you get around affects where you live. Those decisions affect our environment.

We cannot reduce greenhouse gas emissions without a development strategy that reduces vehicle miles traveled, and we cannot provide affordable housing without taking into account what residents there must pay for their transportation, for their energy and for their water.

This partnership will help advance each of our missions. Working across agencies gives us an opportunity to share knowledge, resources, strategies, and coordinate planning in ways that will improve health and the environment, cut costs and harmful emissions from transportation, and build more affordable homes in communities all over the country.

Through it, our agencies will work together to help make sure our nation's policies embrace well-designed, energy-efficient, water- efficient, affordable housing; a transportation system with more options for reaching jobs, schools, parks, medical care and other basic needs; and waterways that are clean and safe for drinking, swimming and fishing; air that is safe to breathe and land that is free of toxic contamination.

We have created a framework that will guide the cooperative development of policies, regulations, spending priorities and legislative proposals that emphasize environmental, economic, cultural and social sustainability. Collective implementation of those policies at state, local and tribal levels will ensure that we accommodate our nation's anticipated growth in smarter, more sustainable ways.

Vibrant and prosperous towns and cities will attract the residents and business investment needed for robust growth. When growth flows naturally to these places, it makes it easier to protect environmental resources such as forests and wetlands, and helps preserve wildlife, farms, rural landscapes and scenic beauty.

Smart-growth principles are equally important in urban, suburban and rural areas. A few weeks ago I visited Wyoming, where EPA's smart-growth program -- and I have to take a second to acknowledge John Frietz's (sp) leadership there. His (help from ?) Governor Dave Friedenthal addressed the effects of the state's energy development on its environmental resources.

In one of the least densely populated states in the nation, residents often found themselves in heavy commuter traffic. The jobs weren't in the same places where the employees could afford to live. Smart-growth approaches to these kinds of impacts are just as relevant in small-town rural America as they are to different sets of challenges in New York, New Haven, Birmingham or Houston.

At EPA, our focus will be on encouraging smart-growth approaches to protect human health and the environment. This includes using smart growth as a tool to combat climate change. Combined, buildings and transportation contribute 63 percent of our nation's greenhouse gas emissions. Smarter growth, combined with green building techniques, can take a significant chunk out of that number.

Transportation uses 70 percent of the oil consumed in this country. And on average, roughly 20 percent of U.S. CO2 emissions come from passenger vehicles. More efficient vehicles and cleaner fuels simply will not be enough to meet our greenhouse gas reduction and energy independence goals. Reducing the number of miles we drive must also be part of the solution.

There's no need to wait for some technological breakthrough to reduce the amount of driving we do. The strategies to help people drive less exist today, and one of them is smart growth. We know that investing in public transportation, making communities more walkable and creating more housing near job centers result in less driving. It's also critical to build on the progress in air quality we've seen since the passage of the Clean Air Act in 1990, and smart growth can help us get there too.

As we move forward, the continued integration of air quality, land use and transportation planning will be important. EPA helps state and local agencies calculate emissions benefits from many of the strategies that support sustainable communities -- better transit, increased car-pooling and other travel options. These resources can help communities meet Clean Air Act air quality requirements and build better, more livable communities. And we are seeing real results across the country.

Atlantic Station is a 138-acre redevelopment project in Atlanta, Georgia. Through a public-private partnership involving the state of Georgia, the city of Atlanta, the Atlanta Regional Commission, Jacoby Development Incorporated and the EPA, the former Atlantic steel mill site was reclaimed and redesigned to help residents and workers significantly reduce the amount they need to drive.

One of the largest brownfield redevelopments in the U.S., this national model for smart growth includes 6 million square feet of (lead ?)-certified office space, 2 million square feet of retail and entertainment space, 1,000 hotel rooms, and it will have between 3,000 and 5,000 residential units upon full build-out.

A shuttle system that carries 1 million people a year circulates between a commuter rail stop and Atlantic Station. Space is reserved for light-rail service in anticipation of future transit investments. Residents of Atlantic Station drive an average of less than 14 miles per day, compared to 32 miles a day for the average Atlantan.

Atlantic Station has also helped improve water quality. Because it is compact, Atlantic Station uses much less land than a conventional development, with the same amount of housing and commercial space. This efficient land use reduces annual stormwater runoff by almost 20 million cubic feet a year.

Assuring that all have access to clean drinking water, that we improve water quality in our communities and that we build wastewater treatment and stormwater systems, is vital to our health.

EPA is also poised to significantly increase its funding for wastewater infrastructure through the Clean Water State Revolving Fund. This will help communities meet the challenges of upgrading aging wastewater and stormwater infrastructure.

As part of our partnership with DOT and HUD, EPA will encourage states to direct additional funds to cost-effective, environmentally preferable approaches to infrastructure in the planning, design, repair, replacement and management that also promote sustainable communities. And EPA will provide guidance and technical assistance to states.

In addition to improving water quality, our SRF fund can support expanded housing choices. In my state of New Jersey, we have shown how federal funding can be used in both rural and urban areas to help communities get the type of environmentally sound development they want. The state provides lower-interest loans for water infrastructure projects that serve mixed-use developments and provide residents with transportation choices such as transit villages.

Importantly, our new partnership with HUD and DOT will help us revitalize neighborhoods that have suffered from decades of disinvestment. Redevelopment of such sites is difficult. Because such sites are usually served by infrastructure and transportation, they represent development opportunities that are critical to transforming years of disinvestment into a future of prosperity.

Healthy communities are not only environmentally healthy. They are socially and economically strong. They offer employment and education, safe and affordable homes, and access to recreation, health care, and the needs of daily life. These kinds of neighborhoods exist all over the country, and market demand for them is strong. In fact, the strong market has driven up costs in smart-growth areas, too often putting them off-limits to lower-income residents.

EPA is working with our partners to create environmentally responsible, affordable housing in these neighborhoods. Coordinating with state housing officials and the Regional Council of Governments, EPA's smart-growth program recently helped four communities in the Hartford, Connecticut area use state affordable housing funds to create mixed-income, mixed-use, green compact developments with a range of transportation options. As partners, we will help communities make sure that publicly financed housing is attractive, safe and convenient.

In conclusion, thank you so much for the opportunity to appear here today. Working together, this is a great opportunity to achieve economic and environmental goals that our president has outlined for our nation.

Thank you.

SEN. DODD: Ms. Jackson, thank you very, very much. And those are wonderful examples, talking about where -- it's always good to hear about projects actually working and doing exactly what we're talking about, so demonstrating that this is very achievable. These are not just ideas that have not been demonstrated in some communities across the country.

Let me start, if I can, and I'll keep an eye on the clock here. Since we don't have an overflow crowd of members here this morning, we'll be sort of more informal.

We've been joined by Sherrod Brown, Senator Brown of Ohio. Thank you, Senator, for being with us.

And so I'll keep an eye on the clock here as well.

As I mentioned in my opening comments, we're working on some legislation in the Banking Committee to try and come up with some resources to help on the -- to encourage better-coordinated planning in our communities, and basically that. There may be some in some communities that do a little bit more than planning, but certainly the idea is to provide some resource base, because that's a challenge.

Obviously states and localities are facing tremendous pressures on budgets today. And just trying to meet current demands on everything from education and health issues and so forth in the like.

So talk about this juncture, it's hard. And obviously we've got our own constraints here as well. But if we all recognize the value of having better planning and coordination than it may be worthwhile for us to step up. Senator Warner made the point earlier when he was a governor looking at the federal perspective from his chair as governor, whether or not there's any kind of coordinated effort that he could count on as a governor and I presume mayors and other asks the same questions around the country, are we going to do this and how can we be a partner in this. What's our role in all of this?

Respecting obviously localities want to have that determination themselves as to what works best for them and I don't want us in Washington dictating to them in ways that make it impossible for them to achieve the results as they see them.

But I think they agree as we're seeing in my state of Connecticut more and more communities for instance on affordable housing are setting aside lands now so that they're available to track people working families that want to live in these communities so it's not limited to those who can just afford these higher cost of housing and driving people away in times when they need that workforce in their own communities.

So there is I think a desire across the country from much of what we're talking about today. But I wonder if you might share with us just quickly all three of you, what are some of these obstacles we're facing in a way? The budget issue is obviously the hottest one to some degree. But beyond that, what are the obstacles to coordinated planning at the local and regional level and what can we do to encourage regional integrated planning?

I think Administrator Jackson you talked about citing examples of things that are working for communities that haven't yet tried it, they want to know if there are examples out there around the country where this has actually worked and people are benefiting from it.

Secretary Donovan, do you want to start?

SEC. DONOVAN: I would love to. I couldn't agree more that in addition to the need for resources to support this planning which is along the lines that you're talking about in the legislation, very consistent with what we're proposing in our sustainable communities initiative for our budget.

Part of the problem here frankly is right now the federal government is in the way. We're holding up local efforts to try to do this integrated planning. So this exactly as you say, this isn't about forcing localities to do something they don't want to do, this is very much about getting out of their way in addition to providing resources to help them do it.

One example I would give of that that we've already started to work on with Secretary LaHood and his team, right now we require through HUD programs a five year consolidated plan to be submitted to HUD to get access to many of our block grant programs and other funding programs. At the same time, the Department of Transportation is requiring metropolitan planning organizations and others to do long range transportation plans. And yet just as you've talked about the stovepipes that exist, we don't have any integration between those plans. So even if a local areas wants to do a single comprehensive plan, it's much too complicated for them to meet both of our needs for those different plans.

So we can help them lower costs for these planning efforts by brining together the requirements and help to get the kind of coordination that we want. That's one example.

A second thing I would say more specific to HUD is we have many, some of the more I would say well intentioned but problematic requirements in our programs. Things like environmental requirements that make it hard as Administrator Jackson talked about for urban areas to redevelop Brownfield sites which are the most cost effective in terms of access to transit and other things. But whether it's not having risked-based state of the art environmental requirements in our programs, that's an example.

Another one would be we support multi-family development, rental buildings across the country, but we have limits on how much commercial income can support those mortgages because we do residential housing. Well that gets in the way of the kind of mixed use development that we want to support in urban areas.

So there's a range of barriers like that that are critical for us to start to address in our programs, and that's exactly what we've begun to do through this partnership.

The last thing I would say is that better information will help markets respond to exactly these kinds of things. People are voting with their feet. If you look at what's happened in the foreclosure crisis, the biggest drops in prices have been in the least sustainable places, places that don't have access to transportation, things that we've talked about here today.

But right now, the market can't price in those factors. If I'm a lender and I want to make a mortgage to somebody, if they're going to spend in one house 10 percent of their income on transportation and then in a different house 30 percent of their income on transportation, the first house is going to be a safer investment for me. But as a lender I don't have the information I need to be able to provide better terms or to respond to the safety that's a market based solution that can help to support more sustainable development.

By developing an affordability index as I talked about in our testimony, we can help to drive the market in directions that respond to exactly the kind of things that we're talking about.

SEN. DODD: I'm very excited about the affordability index. I mentioned several, I was in Chicago yesterday and met with some people on transportation issues and one individual particularly is doing I think I mentioned this to you Ray is he is doing mapping, transportation mapping and overlay. And an awful lot of people are looking as to where to locate, where to buy. Obviously the value of the home's what they can afford. Here's the second question is of course what are the schools like? And that's, you can get surveys, most states do surveys now will tell you that what communities are providing higher levels or better quality of education. And that's a major driving factor. I have communities in my state that people will literally beg, borrow and steal to afford a home in that community exclusively because the quality of the public schools are so good. And so that's a factor.

What we don't have is the overlay on transportation, the second largest costs. The cost of the home and the cost of transportation. And so the ability to then be able to lay over that and say here's what your transportation costs are going to be, I think first of all it's an incentive at the local level to be able to provide those alternative transportation means so that people can calculate that and may have a major impact on that decision making process, much as the school quality is as well.

So I think it's a terrific concept and idea and one that we need to develop in the committee as well.

Ray, what are your thoughts on this?

SEC. LAHOOD: I think your committee could do a good service to reforming the metropolitan planning organizations. The most common complaint I hear from mayors is that the metropolitan planning organizations don't really fit their opportunity to really coordinate a lot of different activities. It's a system that worked in the past but I would encourage you and your staff to work with the conference of mayors. They have some very good ideas about getting these metropolitan planning organizations to encompass much more of the metropolitan, not just the cities but to really the suburban areas and the rural areas to incorporate some of the planning that needs to be done.

I think the other thing that we're trying to do and you can be helpful in your legislation and I know that you create a livable communities program that incorporates a lot of the coordination that we're trying to effect and really develop it with our cooperation so that we send a message to America that this not just some concept but it is doable and it's doable because all of the different components of the federal government and agencies are willing to work together to do it.

And I think the third thing from our point of view is on new starts and the availability of funding for transit for rural areas and light rail and the opportunity for different kinds of available of our new starts money for transit, whether it be for buses or vans to go out to rural areas to deliver people back to a doctor's appointment and so forth. Some of those things exist but we want to work with you on really getting the reforms that allow some of our opportunities to become a part of the livable communities program that we want to work with you on.

SEN. DODD: Great concept. Administrator Jackson, you talked about this already, but any additional thoughts on the --

MS. JACKSON: Just briefly Mr. Chairman. I think your question implies part of the answer which is, and Secretary Donovan said it as well, this has to be from the bottom up. The intent and the desire on the part of communities is out there. Communities have a vision for what they would like their future to be. I think the federal government's role is in providing technical assistance that success stories like we passed on that help them refine their vision and then tools that help them implement the kind of code changes or zoning changes to actually effectuate those visions.

Because I think oftentimes communities feel a bit at a loss and then they feel as though they are fighting the federal government who inadvertently if they're not hurting them, they're surely not helping them. So I think we're here today to say we intend to make sure we're working not at cross purposes, but reinforcing each other.

SEN. DODD: I mentioned these transportation costs and this mapping ideas and I presume either Secretary Donovan or Secretary LaHood will correct me on these if I'm wrong. I'm told that the average household spends roughly 20 percent of its budget on transportation, the average household in the country. Low income households spend on average 55 percent of their disposable income on transportation. And we also know that once a transit line is proposed in an area the value, contrary to what I think people historically believe the case, the old notion of what side of the railroad tracks did you live on, and the old assumption was if you're on the wrong side of tracks, the value of your home, the economic conditions were less.

Today that's just the opposite, in fact there are many communities now we know and can calibrate exactly home values probably has gone up because in fact there's been a light rail line available.

So we're watching values go up at a very time we're trying to promote affordable housing. And if we're looking at 55 percent of that disposable income of poor families is going to transportation -- it's over 20 percent for the average family. Do you have any quick answers on how we address this notion here of trying to make sure that there's going to be that affordable housing for people who are seeing such a large percentage of their income be consumed by transportation. Any quick comments on that?

SEC. DONOVAN: Absolutely. I think you pinned on exactly the key issue here which is what we've seen -- the experience has been where you create transit oriented development is that you actually by coordinated efforts of local, state and federal governments to make investments in transportation, you create enormous real estate value as well. And there's a great opportunity to use techniques like inclusionary zoning to capture some of that value right upfront in the zoning code to create diverse housing options that include low income, work force, housing or moderate income as well as market rate housing which, as we've learned over the last few decades in housing policy, is exactly the most sustainable kind of community from a housing point of view.

But you can do that with relatively little cost in terms of traditional subsidy mechanisms because the value that you're creating in the real estate with greater density with the access to transit there gives you the opportunity to capture some of that value and to build it in. My own experience as a local housing official, that's exactly what we did, and we were very successful in creating those at a relatively low cost to government in terms of the subsidies that we had to provide.

What I would add, though, is that one of the things that I saw again as a local housing official is that many people around the country are interested in inclusionary zoning but don't have the skills or expertise to do the economic modeling, to understand how to get the details right at a local level. And this is one of the things with the $40 million that we proposed in our sustainable communities initiative is exactly the kind of effort that we could support in terms of technical assistance and help for localities to say, look, it's been successful in these other communities. Here's how the models have worked. We can get you information and help that will allow you to establish local zoning codes that will actually work in this direction. So that's one example of the kind of thing that we can do.

SEN. DODD: All right, I'll turn to Senator Tester. But Secretary LaHood or Ms. Jackson, any quick comments?

SEC. LAHOOD: The only thing I would say is I was in Houston recently and took from downtown a light rail out to their medical center where M.B. Anderson, the children's hospital, the women's hospital. All along the way, they took housing that was dilapidated and all along the light rail line you see condominiums and other kinds of housing developing all along the way. So people who could not afford an automobile to get to their doctors or hospital could take a light rail line and as the rail line was developed and built, housing began to develop along with it. It just -- I don't know, if you build it, people will come. And when you do that, you don't have to have three automobiles. You may have to have one. But you can get on the light rail at the condominium and take it either to a medical center or you can go to downtown Houston, and it works.

SEN. DODD: Any comments?

MS. JACKSON: Only quickly to emphasize the point you made, Mr. Chairman, which is in viewing new development, we also think that the federal government needs to be very mindful of not pricing those who most need that housing out of the market. Certainly, people with money want to live in the most convenient places. And when the schools are there, young families will come. But we have to be careful in redevelopment, and I think there's some tremendous opportunities for EPA to work on redevelopment clean up issues that ensure that we replace mixed income communities with new mixed income communities. Because otherwise, I think we have a fundamental issue of fairness.

SEN. DODD: Thank you very very much. Senator Tester.

SEN. TESTER: Thank you, Mr. Chairman. One of my pet peeves as a farmer is the fact that we tend to build houses on the best farmland that we have -- not marginal stuff, the absolute best stuff. And the redevelopment issue is an issue that I think can help stave off part of that. I guess my question as it applies going around this country and seeing -- and I think it applies everywhere, by the way, but seeing large groups of people where if you want to look at bang for the buck redevelopment in a city like Cincinnati maybe better than a city like Bozeman. But the question is how are you going to determine how the funds for redevelopment are allocated. Just kind of give me some sort of idea on what your vision for that is.

SEC. DONOVAN: The current proposal that we have for the Sustainable Communities Initiative is that we have a competitive process to start with. The idea here would be to pick a relatively small number of places including urban and metropolitan communities as well as rural communities that have already begun some of these efforts that are interested as you heard Administrator Jackson talk about efforts in Wyoming and elsewhere that have already started. So we would be looking through competition to allocate initially those funds.

But the idea is in the longer term -- I talked earlier about what we do with our consolidated plans right now and our long term transportation plans that those aren't integrated, we can learn from these early competitions that integrate the best ideas into all of our block grant and other programs that we have. So that would be an initial effort. I would say also that I do think there you make a very good point about farmland.

Right now, 50 percent of all the people in the country that live in rural areas live within parts of metropolitan areas. And the pressure on that farmland is enormous, and things like I talked about earlier with the way that we finance multi-family developments, rental developments, we have a bias toward green field development in our program because of the many restrictions that we place on it, whether it be commercial income, whether it be the cost limits that we set on those.

There are many things that we do, many of them unwittingly, to push development into the kinds of rural areas that you're talking about as well as policies that hurt the small towns in rural areas that have lost retail businesses where the second floors -- I was talking to Tom Vilsack about this on a recent trip. The second floors of many of those towns are empty because we don't have good housing options whether it be for seniors in those towns or others that can be used to keep those small towns vital. So I think there's a range of things that we would hope to demonstrate with these early competitions in sustainable communities that show how this is applicable in rural areas.

SEN. TESTER: That's good. Secretary LaHood, you talked about transportation options, and I agree it makes little building mix go up when you do. Are there various modes of transportation that you feel we get better bang for the buck initially by spending money on it, or you know, what's your perspective on that? I mean, what I'm talking about is -- and I suppose it varies from region to region, but light rail or putting more money into highways or bike paths or walking paths, or where are we somewhat focused or maybe we're not?

SEC. LAHOOD: Excuse me. Our focus is going to be to link with these two extraordinary cabinet members and to do what I think Americans want us to do now, to do what's been done in Portland, Oregon, to do what's been done in some other communities where you don't have to own three automobiles. If you want to bike to work, walk to work, take a bus to work, take a light rail to work, take a streetcar to work, offer people some options and some opportunities. And in doing so -- and you can do this in neighborhoods like in Chicago.

Obviously, you can't do it in all of Chicago. But you can carve out neighborhoods. And I talked to the mayor about this and create green neighborhoods that allow people to use lots of different forms of transportation. And that's really what -- you can really get a bang out of your buck for that, and you know, that's the direction that I think we want to go. Because I know that you represent a large rural state, I want to say this. We have some good rail transportation programs, and we want to work with you all to really expand on that that allow for transit districts, maybe not a bus but maybe a van to go out to communities to deliver somebody to a doctor's appointment or a grocery store.

People that have lived in these small communities all their lives, they want to stay there, and there are funds available through USDA, the rural development for housing so people can stay in their communities. We have funds available that allow for rural transit to deliver people back and forth. So if they, you know, can't drive a car, don't own a car, can't afford a car, they don't necessarily need a car.


SEC. LAHOOD: And they can still live in these rural communities. But I think that again is a very good bang for the buck and provides good transportation to people.

SEN. TESTER: I appreciate that, Secretary Hood. I also would, sir, as long as we're not thinking that stove pipes are silos any more, when it comes to rural communities there's a lot of opportunity not only for your transportation system but to partner up with the VA, HIS, senior groups, all those things because there's some busses running around. There's enough money to fund any of them well. But if you could


SEN. TESTER: Administrator Jackson, I guess my question evolves around the challenges that EPA would have in providing -- in being a part of this because it seems as though, you know, housing's housing, transportation's transportation. They're very complicated in and of themselves.

But if you have a situation where you have a water issue with pollution or whatever, or an air issue as far as that goes, how do you dovetail into this so it all happens in a timely fashion?

MS. JACKSON: Well, we'll embrace the opportunity to do so, Senator, and I think we have long had an (office ?) of smart growth that for us is very much about breaking down the silos even within the environmental protection field and realizing that something that I think most people know intuitively -- the absolute best strategy for protecting farms and forests and wetlands and the places that are valuable ecologically and economically is to have strong towns and cities and hamlets where people can locate and live in the vicinity of the land they work, respecting private property values as well.

So it actually -- we do a lot of regulation at EPA and it's very important regulation, and I often before other committees defend work we're doing but one of the -- one of the things I hope people (leave here ?) is that we also understand that if we build strong towns people can live there with adequate transportation and still have the rural quality of life that they want. I do not see them at all as incompatible. In fact, this is music to our ears at EPA.

SEN. TESTER: Okay. Thank you. Thank you, Mr. Chairman.

SEN. DODD: Thank you very much, Senator. Senator Merkley?

SEN. JEFF MERKLEY (D-OR): Thank you very much, Mr. Chair, and appreciate the comments the panel has made. I wanted to explore a little more, Secretary Donovan, the affordability index. How do you see energy issues getting incorporated into that structure?

SEC. DONOVAN: I think there are two ways that it factors in -- one directly and one more indirectly. First of all, we don't have today, as I said in my testimony, a simple way for a consumer who's looking to buy a home or to rent the home to understand what their energy costs are going to be, so very specifically, and we've begun work with Secretary Chu on this as well, to get to a more transparent simple affordability index that includes what will you pay for utility costs, and what that would allow you to do is to have a market for energy-efficient mortgages that actually works -- that functions effectively -- and what -- ultimately what that does is to translate the savings that you can achieve through improvements, whether it be retrofits or in new construction, to lower energy costs, allows you to price that in right up front and to get a benefit in that with a higher mortgage that will eliminate the up-front costs of putting in those improvements.

So the kind of information and affordability index that we're talking about will help very directly to help consumers understand what they're buying, to understand what their costs are, and to begin those price -- to price those into financial markets in a way, I think, that could be extremely powerful in helping to develop the kind of energy efficiency that we're talking about. And as an indirect measure, however, the location efficiency that we're talking about as well goes directly to energy use as well because, as Administrator Jackson talked about, by reducing vehicle miles traveled we also help to cut greenhouse gases.

So by having an affordability index that includes transportation costs, the lower the transportation costs in general the lower the carbon emissions will be as well. So in both of those ways -- energy efficiency and location efficiency -- the affordability index could be a big help.

SEN. MERKLEY: Do you see this as something that would be required with each house sale? Would it be a voluntary basis? Would it be new homes only required, voluntary for others? I mean, how do -- kind of how do you see it being rolled out?

SEC. DONOVAN: We're looking at those options right now and in fact one of the things that we found there are lots of localities that are already doing innovative things around this. I think initially as we understand what the costs might be I think there are lots of options that we have for doing it on a voluntary basis or working with localities that already have programs in place. We want to make sure before we go to any sort of requirement that there is an efficient and effective way to do this so that we don't add significant costs to the cost of buying a home up front.

SEN. MERKLEY: I just wanted to mention to you that one of the issues that I'm working on is a low-cost lending facility that would enable homeowners, regardless of whether they're selling, to basically overcome the up-front costs of, if you will, the more energy-efficient windows, et cetera, and then see that reflected back on their electric bills or perhaps on their property tax bill depending on the partnership in kind of a way to overcome that sticker shock on the front end because if the savings are more than the payments on the loan you see it doesn't cost you anything up front -- and so we're trying to spread it out.

SEC. DONOVAN: I couldn't agree more and that's why I think in the long run if we develop a mortgage market that can pay for that we don't need to subsidize, and it can be done just by the market itself. In the shorter run, there's both efforts with utility companies and on property taxes that we're looking at in many localities. We also are proposing a $100 million energy innovation fund in our budget proposal that would be used to support exactly those kind of financial innovations that you're talking about.

SEN. MERKLEY: Great. Great. Secretary LaHood, thank you very much. When you were here with your nomination process I was asking you to take a look at the streetcars and the obstacles on the New Starts, and you did so and you cut the red tape and in a spectacular way. So thank you very much for bringing common sense to that issue. The issue I wanted to ask you about is in terms of it still seems easier to get funding for a lane of highway than it is for a rail line.

A lot of what we've experienced in many places is you add a lane of freeway, and a mile of freeway will only accommodate when it comes to congestion 100-plus cars being parked, which fill it up very, very fast if you haven't addressed every other point of congestion within the system. So we have this misleading sense that you go to two lanes to three lanes you increase the capacity by a third -- it often doesn't happen -- while rail pulls a lot of people off. Plus, we have the induced demand problem. Is there other things we can do to kind of help shift kind of the -- get the greatest bang for the buck in terms of how we invest in these different modes of getting people from home to work?

SEC. LAHOOD: Well, I think this hearing today highlights the idea that we need to have alternatives for people -- that everybody, I think, gets it as far as automobiles go that, you know, we're not going to eliminate automobiles but the idea that people have access to transit whether that be a bus or light rail or people have access for the ability, as I've said, to walk or bike or to streetcars. That's the direction that we really believe is the wave of the future and obviously you all -- certainly the chairman feels that way and I think many of you do also and we're in sync with you on that.

We need to put some resources in that and we also make -- need to make sure that our New Starts program doesn't take forever to get funded in order to accomplish our goals of creating some light rail or more transit, more buses, more options for people, and we -- we're working on that and I assure you that we're going to really streamline it so that -- we're not going to cut corners but it shouldn't take 10 years to get these kind of systems up and running in communities. And I assure you it won't take 10 years under our department because we have people now that realize that we can reduce the time that it takes to get these approvals.

SEN. MERKLEY: Thank you very much, Mr. Secretary. I wanted to mention that Oregon Iron Works just contracted to provide streetcars to Tucson, and we're hoping that other cities will be following. Also, I understand -- you know, I'd invited you to come to Oregon and ride the streetcar and I understand you're coming in July. I don't know if -- we don't know -- my team is working with your team. Hopefully, I'll be able to join you and invite you on the streetcar. But thank you for coming to Oregon.

SEC. LAHOOD: Look forward to that. Thank you.

SEN. MERKLEY: I'm out of time, Administrator Jackson, so I'll follow up in the future.

MS. JACKSON: Good to see you.

SEN. MERKLEY: Thank you.

SEN. DODD: Senator, do you want to take another few minutes, please. Senator Merkley, if you want to take another couple, we're only --

SEN. MERKLEY: Well, I just wanted to give you a chance to expand on any of the pieces as you're thinking about the housing, as you're thinking about the transportation, of creative ways that we can strengthen this partnership, things that you would -- the message you'd like us to hear as we work to assist in this effort.

MS. JACKSON: Just that EPA is thrilled to be here, be part of the partnership. We've had a long history of advocating and supporting and supplying assistance on these issues. We have a Brownfields program, which is all about essentially land recycling, and I will leave you with one little thought -- that I think communities know what -- John said it to me and so I repeat it everywhere I go, which is that if we want to know if a community is healthy in the environmental world we look for indicator species that tell us whether or not a population of whatever species is dying in a water system or not, and when you want to know whether a community is healthy in terms of smart growth look for pedestrians.

In fact, pedestrians is a good indicator species for a healthy community. People feel safe enough to walk. They have somewhere to go when they walk, to the doctor or to a store. They have recreational opportunities. They have transit opportunities.

So we're all about building a thriving community of pedestrians out there along with HUD and DOT. And I think if we keep that in the front of our minds we'll end up with some good policy. Thank you.

SEN. DODD: Thank you, Senator, very, very much. Senator Bennett.

SEN. BENNET: Thank you, Mr. Chairman. Thank you for holding this hearing and thank you for thinking about this legislation. I'd like to thank the cabinet Secretaries for being here and leading by example and putting down your arms or your stove pipes, or whatever this is, because I think the more we get into this, what we're going to discover is that a lot of well-intentioned efforts at every level of government, from municipal all the way up to the federal level, have put us in a place where we're not incentivizing the kind of behaviors or thinking that we want. In fact, in many cases the reverse is true.

We discovered that in Denver as we began to think much more holistically about our planning process, our zoning and housing rules, and I hope as we think about the legislation we put that in the forefront of our minds, that we want to create a set of incentives and disincentives that lead people to think broadly about these issues across various sectors—transportation, housing, environment. I would add education to that list, and there are probably other things as well.

And also to think regionally in their approach. You mentioned, Secretary LaHood the metropolitan planning organizations. I couldn't agree with you more. I think we need to think about how to give our local and regional organizations more support in collaborating together. And to that end the only question I really have is for you, which is how can we help you as you think about expediting the federal funding process for projects that clearly meet, by any measure, sustainability and livability goals so we can get some of these things out the chute and people can begin in communities that maybe aren't as ready as Senator Merkules reminds, so we can begin to get them on board?

SEC. LAHOOD: Well, Senator, first of all, you and I have talked about this before, but you have one of the most innovative mayors in Denver that I've ever met, and he is thinking outside the box all the time about all these issues—whether it's education or housing or environmental or transportation. And he and I have had a number of discussions, as you and I have, and I just want to commit to you that we're figuring out ways to streamline the process because I know you have some important projects in your state and we're working with the mayor and others to make sure that, you know, everything is done correctly but that it doesn't take 10 years to get it done.


SEC. LAHOOD: And, you know, we're committed to doing that at the Department, and some of these things have just taken too long. And so, really, it's up to us to streamline these things and figure out ways to get the money out the door, so we can get people to work and get these important projects out to the communities. And we're committed to doing that.

SEN. BENNET: (Inaudible.)

SEC. DONOVAN: I was just going to add, to build on something Secretary LaHood had said in his testimony. I do think the reauthorization bill is an enormous opportunity for us to do that. There are things that we can do with our rules and our notices on a regulatory front without any changes in Congress on the legislative authorities we have, but there are certain things that will need legislative changes, as well. And so we've begun, through our partnership process of literally going program by program to say what are the barriers and what will we need legislative changes on. And I think the reauthorization bill is a perfect opportunity, not just to put these principles into action and speed the process, but also to help us get out of the way on a lot of these barriers.

SEN. BENNET: I hope you'll let us know whatever it is we can do to help you get out of the way because there is a lot of imagination out there, not the least of which is in my mayor but lots of other local officials as well. And I think if we have this opportunity to unleash that imagination and unleash the creative potential that's there, we really can get after some of these projects across the country and move past this sort of, you know, theory of government that says we'll all be dead by the time we're done with this.

And so I just want you to know from my perspective -- I know there are others here who feel the same way -- whatever we can do to help, you just need to let us know. Thank you for your testimony today. I'm very grateful.

SEN. BAYH: Further questions, Senator Merkley? (No audible response.) Okay, I just want to thank you all for being here today. I want to echo the comments that Senator Bennet just said. If there's legislative things that we can do to help facilitate your success and working together in creating better communities, just let us know. Thank you very much for being here.

SEN. DODD: We're adjourned.

MS. JACKSON: Thank you.


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