Member of HAC Board of Directors Testifies at
U.S. Senate Briefing on
Community Development Block Grants

Statement by Peter Carey
Executive Director, Self Help Enterprises
Board Member, Housing Assistance Council
President, National Rural Housing Coalition

Briefing for Committee on Banking, Housing, and Urban Affairs
U. S. Senate
March 1, 2005

Thank you for the opportunity to appear at this briefing on the vital importance of the Community Development Block Grant (CDBG) program. My name is Peter Carey, and I am Executive Director of Self-Help Enterprises, a nonprofit housing and community development organization located in Visalia, California. I am also a member of the Board of Directors of the Housing Assistance Council and President of the National Rural Housing Coalition. I have served as the Mayor of Visalia and I work with local governments throughout our 12,000 square mile, 8-county service area. My experience with both the Entitlement and Small Cities CDBG programs extends over 27 years. And I know first-hand the value of CDBG in communities of the rural Central Valley and in the lives of the people who call those communities home. From my perspective CDBG is one of HUD’s most important programs – it is one federal resource that truly invests in low-income people and poor neighborhoods, and in so doing, builds the entire community.

CDBG INVESTS IN COMMUNITY

Let me tell you about what my organization does, and how we use CDBG. Self-Help Enterprises is one of the nation’s oldest and largest nonprofit homebuilders. Founded in 1965, SHE has helped over 5000 low-income families to build their own homes, has rehabilitated another 5200 homes owned by farmworkers, seniors, and other low-income households, and we have provided technical assistance to dozens of small rural communities that are struggling to provide the public services most of us take for granted — adequate sewage disposal and clean drinking water. Much of our work is done in partnership with local governments, though in many places, there is no unit of government other than a community services district run by local citizens.

Most of these communities have few resources, and it is often CDBG which facilitates improvements in infrastructure and housing stock. Any reduction in CDBG funding could be devastating, and any move to another agency seems to make no sense. On the ground, from where my colleagues and I work to help low-income people build community and achieve the American dream, let me tell you quite plainly that we need this program. More importantly, our communities need it.

CDBG INVESTS IN INFRASTRUCTURE

One of my associates, Sylvia Soria, is working with Tooleville, a small Tulare County community of 77 homes. Forty-one percent (41%) of the residents are farm workers; 76% are Hispanic; and the median annual household income is about $16,000.

Sylvia told me this story recently: “ Fidel and Monica Ramos have 4 children; the 2 older boys are teenagers. One afternoon in late June, I was in Tooleville doing a survey. When I reached the Ramos home, I noticed that the younger teenage boy was climbing a ladder up to the roof with a 5 gallon bucket. I asked his mother what he was up to. She explained that the water pressure is so low that the water doesn’t get to the evaporative cooler on the roof, so they have to use a bucket to wet the cooler pads manually several times a day just to keep their home bearable during the hot summer months. Across the street live Manuel and Maria Garcia, both in their late 60’s, who also have to climb up on the roof to water their swamp cooler. Mr. Garcia has major medical problems and should not do this, but he manages somehow. Often the pressure is so low that residents can’t even take showers."

Not only is the water pressure low due to failing pumps, leaking pressure tanks and failing wells, but water quality is a major concern. Nitrate levels are well above safe levels in both wells, a condition which can cause “blue baby” syndrome in infants up to 6 months old. This means that infants and pregnant women should not drink the water. Boiling is not an option because boiling only concentrates the nitrate level, so they cannot cook with the water either. And in the past year, Tooleville’s water has failed 9 out of 12 coliform bacteria tests. The only safe alternative for Tooleville’s poor families is to is to buy expensive bottled water.

Working together with the County and the nearby town of Exeter, plans are being developed to apply for CDBG funds to help build a pipeline that will bring safe water from Exeter and to improve pressure by replacing the leaking, distribution piping. Then perhaps Mr. and Mrs. Ramos won’t have to worry about her children’s health when they do something most of us take for granted – reach for a simple glass of water.

CDBG INVESTS IN HOUSING PRODUCTION

CDBG is a key piece of the affordable housing and community development tool kit in urban and rural America. Housing need in rural areas may be seen in data from the 2003 American Housing Survey, as compiled and analyzed by the Housing Assistance Council. Today sharply higher housing costs have added affordability problems to the poor conditions already faced by the people of rural America. Many rural households find it difficult to meet basic housing expenses. Among the 23 million nonmetro households, approximately 24 percent — 5.5 million households — pay more than 30 percent of their monthly incomes for housing costs and are considered cost-burdened. Of these, 2.4 million pay more than half their incomes toward housing costs.

Federal housing assistance has played an important role in the production of low- and moderate-income rural housing since the mid-1930s. Yet, according to a methodology developed by the Housing Assistance Council, only 7 percent of nonmetro households receive some type of federal or other publicly-supported housing assistance. HUD’s CDBG program has served as critical investment for increased housing production throughout the country.

Elias and Martha Garcia and their four children lived in a rundown one bedroom house in LaVina, an unincorporated community 10 miles from the city of Madera. Home to about 200 low-income farmworker households, it has a history of low incomes, substandard housing, failing septic systems, and contaminated wells. Working in partnership, Self-Help Enterprises and the County of Madera invested CDBG funds to build a small sewage treatment facility and community water well. This cleared the way for a new subdivision where the Garcia’s joined 67 other low-income farmworker families in building new homes for themselves, their children, and their neighbors. By sharing the labor of building each others homes, they achieved the dream of homeownership. Other financing was used to build 50 units of farmworker rental housing, and CDBG facilitated rehabilitation and abatement of existing substandard housing. Recognized as a model by the Maxwell Awards for Excellence, this project would have been impossible without CDBG.

CDBG INVESTS IN IMPROVED HOUSING

For most of the 20th century, substandard quality was the primary rural housing problem. In the Central Valley, as in the rest of the country, there have been many gains in rural housing quality, largely because of federal programs. But substandard housing still exists, especially in rural areas and central cities. Fully 12 percent of low-income households in nonmetro areas live in physically inadequate housing, and poor housing conditions are disproportionately more common among renters and minority households than among owners and whites.

Again, it is CDBG that makes it possible for local communities to turn the tide. The town of Woodlake backs up to the foothills of the Sierra Nevada. A town of 6600 residents, it is one of the poorest cities in California with a 36.8% poverty rate and a $23,000 median household income. With a low tax base and minimal sales tax revenues, the city struggles to provide basic municipal services like police and fire. Forty-six percent (46%) of the city’s housing stock is over thirty years old. When the CDBG program came into existence, the city jumped at the opportunity to obtain resources to improve its infrastructure and its housing stock. In the years that followed, it has competed for and received millions of dollars that have aided the City not only in maintenance but growth. Over 350 homes have been repaired or rebuilt in an effort to overcome deterioration of City neighborhoods. The City has also used CDBG funds to encourage homeownership, improve streets, control flood and expand water and sewer facilities.

Josie Leon, an 82-year old woman with Social Security as her only income owned a home that was in such bad condition that it put her health and safety at risk.  She couldn’t afford more than the most basic repairs, and the city was facing the prospect of condemning the house and forcing her out of the only home she knew and the only asset she owned. Funded by CDBG, the city and Self-Help Enterprises worked together to assist her in making desperately needed repairs and retain ownership of her home.  Without the CDBG Program, the home would have continued to deteriorate.  Eventually, it would have been red-tagged, another property blighting a community that is working hard to improve.

This is the wrong time to turn our backs on the needs of America’s rural communities. This is the wrong time to cut back or cut off one of our most successful community development resources. Rural America needs housing production. Rural America needs to improve its housing stock. Rural America needs to tackle its basic public facility needs. I am here to tell you that Rural America needs CDBG. But you needn’t take my word for it.

Just ask Josie Leon, or Fidel and Monica Ramos or Manuel and Maria Garcia.

Thank you very much.

Posted: March 10, 2005