VIOLENCE IN LOS ANGELES AND THE PLIGHT

OF THE INNER CITIES

THURSDAY, MAY 14, 1992

U.S. SENATE,

COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS,

Washington, DC.

The committee met at 9:30 a.m., in room SD-538 of the Dirksen Senate Office Building, Senator Donald W. Riegle, Jr. (chairman of the committee) presiding.

OPENING STATEMENT OF CHAIRMAN DONALD W. RIEGLE, JR. The CHAIRMAN. The committee will come to order.

Let me welcome all those in attendance this morning.

I want to review, briefly, our witness list for our session today. We will be hearing, initially, from two of our congressional colleagues, Senator Harris Wofford from Pennsylvania, who's asked to testify and who will shortly do so. And also Congresswoman Maxine Waters, who likewise has asked to testify, and we're very interested in having her views.

When we have completed their testimony, we'll then hear from the Secretary of Housing and Urban Development, Jack Kemp.

He'll be followed by Arthur Fletcher, who is the Chairman of the U.S. Commission on Civil Rights. And then we will be hearing from the Reverend Jesse Jackson. And also from Jim Rouse, who is Chairman of the Enterprise Foundation. So we have a busy morning.

I am going to make a brief opening comment, and call on Senator Garn for the same.

I'm going to ask, in light of the fact that we've got a lot of people today, that any other members that want to make opening comments do so, but I'd like to keep them as brief as possible, so that we have sufficient time to be able to cross examine witnesses today who will be here.

First of all, I think it is essential that the country move together, the Executive Branch, the Congressional Branch, and citizens generally. Private interest groups, the business community, the labor community, others out in our society, to act in a unified way to deal with the urgent problems that we find in our society, and in many cases, in their most extreme form of difficulty in our urban inner city areas.

There is a pervasive sense of hopelessness in many of our cities, particularly in the under class. It cuts across all racial lines, although the problems are more severe from parts of the minority community, whether it's the African-American community, the

Latino community, because of the kinds of discriminatory problems that are present often times facing people in those communities.

But the absence of jobs, the absence of tax base, the absence of the kind of medical care, educational opportunity, the practical ladders for people to have available to themselves to be able to climb out and move up to higher ground, and to have successful lives and establish successful families is extraordinarily difficult, and becoming more so, in my view.

And so while we've seen the events recently in Los Angeles, we have seen similar kinds of situations arise in other cities across America. And I would assert that on any given day or weekend, we could find events like that happening in some other, any one of a number of other major urban centers in America because of the tremendous sense of desperation and hopelessness facing so many people in our inner cities.

It comes in all forms, from crime, from random violence where school children are cut down in a cross fire of gunfire, and are often innocent victims. We've had cases like that of the most compelling kind right here in the Nation's capital, just within the last 2 or 3 weeks. But it's commonplace across the country.

As a Nation, I think we have an obligation to all of our citizens to see to it that people have an opportunity to live safe and sound and decent and productive whole lives, and that young people in our society have to see the society as being open and caring about them, and that there are opportunities to move forward in life, to be able to establish, through education and job training, the foundation that's necessary to be able to be successful in our economic system, and to be able to have a chance to set out on a path for success and to achieve that success.

Today, we have circumstances cutting against that in virtually every way that one can measure it, whether it's the shortfall in education, certainly the shortfall in job opportunity, and the list goes on and on.

We can change that. And I know_the_Secretary of Housing and Urban Development who will come shortly, has very strong feelings about it. As to the other witnesses, we are also very interested to hear from them.

Finally this. I'm convinced that we can and must move together. I'm one member of the Congress, and there's another one on this committee that, at different times has served in both political parties.

We'll have some differences along the line in terms of philosophy. I don't think we can let those prevent us from coming together with a very aggressive strategy that fundamentally alters the lay of the land in this country, deals with the racial discrimination issue which is ever present, a major problem in our society, and also with the pervasive lack of economic and job opportunity for so many of our people in our society. And that must change.

We can change it if we work together, and it's my intent to see that this committee, as it has in the past on other issues, work together on a bipartisan basis to produce such an initiative, something with some muscle and some strength that really makes a difference.

Senator Garn?

OPENING STATEMENT OF SENATOR JAKE GARN

Senator GARN. Thank you, Mr. Chairman.

At the outset of these hearings yesterday on this subject, I made an opening statement, and therefore there is no need to take any more time to repeat those comments.

I would simply say to the later witnesses, I apologize for not being able to stay. But I think everyone is aware that the Appropriations Committee is meeting in conference with the House of Representatives on the Rescission Bill, and it's necessary that I be there. As many of you know I'm also the ranking Republican Member, on the VA, HUD, and Independent Agencies Subcommittee which includes housing, and many of the other issues we're dealing with here. So unfortunately I find it necessary to leave and go to that rescission conference.

Thank you, Mr. Chairman.

The CHAIRMAN. Does any other member seek recognition before we go to our first witness?

Senator Gramm?

OPENING STATEMENT OF SENATOR PHIL GRAMM

Senator GRAMM. Well, Mr. Chairman, I'd like to thank you and Senator Garn for your opening statements.

I think it's important that we recognize that whoever is to blame, the bottom line is, we haven't gotten the job done. I think rather than seeking to point the finger of blame, we ought to try to come up with positive programs. Quite frankly, I'm not willing to invest money in old ideas that didn't work.

I am willing to commit resources to new ideas that hold out some hope of improving the quality of life for our people.

And I think if we work together on a bipartisan basis that not only can we give a response to a crisis that occurred, but maybe we can improve the overall environment in the country.

And I thank the Chairman.

The CHAIRMAN. Thank you.

Senator Cranston?

OPENING STATEMENT OF SENATOR ALAN CRANSTON Senator CRANSTON. Thank you very much.

Mr. Chairman, the events in Los Angeles have brought us to a crossroads in the Nation's response to the urban crisis. Issues that have been shunted aside for years-urban proverty, pervasive discrimination, lack of affordable housing, the future of minority youth-have moved to the frontburner of the domestic agenda.

Yesterday we heard the Nation's leading mayors make an eloquent plea for meaningful legislative and funding solutions-solutions that will directly improve the social and economic conditions fueling the anger and disaffection in our cities.

I believe the President's urban agenda constitutes a start toward fashioning such solutions. Much of the credit for that start goes to Housing Secretary Jack Kemp. I am pleased that the Secretary has agreed to work closely with the committee on housing reauthorization legislation so that we can markup a bill next Thursday.

Against that backdrop, let me offer these brief comments on the housing portion of the President's urban initiative. The President

requests $1 billion to fund the HOPE program to help tenants in public and Government owned housing buy their own units.

As the Secretary knows, the HOPE program was authorized as part of the National Affordable Housing Act and was provided over $350 million in funding in last year's appropriations law. Congress has clearly accepted tenant ownership despite some press accounts to the contrary-as an idea which must be tried and tested. Yet tenant ownership initiatives cannot-as the President's initiative suggests-be the sole component of national housing policy. In fact, tenant ownership-by itself-will have a negligible impact on the country's affordable housing crisis.

The housing situation in Los Angeles proves the point. In L.A. as in most cities across the country, there is a growing gap between the supply of affordable housing and the population of low-income families who rely upon such housing. This mismatch between supply and demand-some 4.1 million units nationwide-is having an upward pressure on rents and causing significant dislocation and pain.

A 1988 Blue Ribbon Committee appointed by Mayor Bradley found that in L.A. alone:

35,000 persons are homeless on any given night, 30 percent of them families with children; 42,000 families live in garages; and more than 150,000 households pay over 50 percent of their income for rent-one paycheck away from homelessness.

These families-clearly the most in need of Federal assistancewill not be served by the HOPE program. Only efforts which expand the supply of affordable housing or provide income supplements will have any impact on their desperate situation.

In addition, Los Angeles-like many cities West of the Mississippi has very few conventional public housing units. The entire city has only 8,700 public housing units with only 2,600 units located in the South-Central area. Very few units are vacant-but 20,000 people are on the agency's waiting list.

The message is clear-converting every single public housing unit in Los Angeles to resident home ownership would have had no appreciable impact on the distressed housing conditions in that city.

Our options are straightforward-if we are to make a difference in the urban housing crisis, we must implement solutions that go directly to the heart of the matter.

Fortunately, despite talk of "failed liberal policies" and "unworkable Federal programs," there are local groups-particularly nonprofits-working successfully everyday to develop and preserve affordable housing and to revitalize_distressed neighborhoods. These community based initiatives offer bottom-up housing solutions-solutions that are tailored to the needs of neighborhoods and low-income residents.

But, as Jim Rouse and other housing leaders will testify, such solutions cannot succeed without flexible and extensive Federal support. That support can come through block grant programs-like HOME and CDBG-, through rental assistance and through tax incentives. But it must come or else the best hope for revitalizing neighborhoods and empowering tenants will fail.

I propose two avenues for action on the housing front. We must move to obtain emergency funding to enable communities to re