We thank you, Mr. Chairman and Members of the Subcommittee for your continuing support for these priority local government programs. We are especially pleased by the $300 million increase in CDBG in FY2001 to $5.1 billion, and the $200 million increase in HOME funding to $1.8 billion.

Targeting is very deep in the HOME program. The majority of HOME funds have been committed to housing that will be occupied by very low-income people and a substantial amount will assist families with incomes no greater than 30 percent of median. As of the end of February, 2001, more than 88 percent of home assisted rental housing was benefiting families at or below 50 percent of area median income. Fifty-seven percent of all home-assisted rental housing (including tenant-based rental assistance) was helping families with incomes at or below 30 percent of area median income.

HOME funds help low- and very-low income families realize the dream of homeownership by providing for construction and rehabilitation of housing as well as providing the down payment and or closing cost assistance in the form of second mortgages necessary to bridge the gap. Since 1990, HOME funds have been committed to 322,506 homeowner units. All HOME funds used for homeownership must be targeted to households with incomes at or below 80 percent of area median.

HOME is cost effective and provides the gap financing necessary to attract private loans and investments to projects. For each HOME dollar, $2.29 of private and other funds has been leveraged since the program's inception. This clearly illustrates the effective and judicious use of HOME funds by participating jurisdictions.

Local officials urge you to fund the HOME program in FY2002 at a level of $4 billion, of which $2 billion would be reserved for a production program within HOME, subject to authorization.

Mr. Chairman, we commend the Subcommittee and the Congress for fully funding all expiring tenant-based and project-based rent subsidy contracts last year. We urge you to do the same this year at an estimated cost of $15.6 billion. We note, too, that the Administration has asked for 34,000 new incremental housing vouchers. This year the Congress appropriated funding for 79,000 vouchers. We urge the same level for 2002. The need for affordable housing continues to grow as housing prices increase faster than wages for low-income Americans. In addition, and in the absence of specific authorizing legislation, we urge that you include within the appropriations bill both the authority for, and the funding to, renew from the Section 8 fund all expiring rent subsidy contracts under the Shelter Plus Care program.

Mr. Chairman, we support a funding level of $1.2 billion for homeless housing programs. We have been working with the authorizing committees to craft legislation converting the McKinney Act's homeless housing programs into a pure, formula-driven block grant program. In order for such a program to give sufficient funds to communities to carry out meaningful projects at the local level, it needs an appropriation of at least $1.2 billion. In addition, we support shifting the supportive housing renewals and the Shelter Plus Care contract renewals into the Section 8 fund. This would give localities more funding to help the homeless.

Finally, Mr. Chairman, we would like to briefly mention HUD's Lead-Based Paint final regulation. First, let us say, we support addressing/abating lead hazards in government supported housing programs, and we have worked diligently with HUD and other housing and health groups on finding a way to implement the new lead paint abatement regulation in a manner that takes account of the limited capacity in cities and counties and the private sector. We commend HUD for instituting a transition assistance period whereby local governments can defer compliance with the regulation until they have the requisite capacity. We are concerned, however, about the cost of compliance with the regulation. Because of this new regulation, local governments will be required, once they have the technical capacity, to spend more of their CDBG and HOME funds in meeting the requirements of this rule, which will include hiring certified contractors to conduct the activities of the rule, providing relocation costs to families in instances where they will have to temporarily relocate from their homes, and abating the lead hazards. We are concerned that rehabilitation and homeownership programs assisted with CDBG and HOME will be severely curtailed, with some smaller programs possibly being eliminated altogether because of the cost of the rule.

We ask that additional funding be provided to local governments to meet the requirements of this rule. We are working with HUD on a study to determine the total cost of compliance and will advise you of the amount once it is determined. In the mean time we support H1JD's recommended funding level of $110 million for the Lead-Hazard Control Grant Program in FY 2002.

Mr. Chairman, local government officials believe that a strong Federal role in housing and community development programs must continue. Since the Housing Act of 1937, Congress has enunciated, and repeated in subsequent housing acts, that, as a matter of national policy, the Federal government has an obligation to assist states and local governments in providing decent, safe and sanitary housing for lower income households. Perhaps, Congress said it best in a "Declaration of National Housing Policy" included in Section 2 of the Housing Act of 1949:

The Congress hereby declares that the general welfare and security of the nation, and the health and living standards of its people, require housing production and related community development sufficient to remedy the serious housing shortage, the elimination of substandard and other inadequate housing through the clearance of slums and blighted areas, and the realization as soon as feasible, of the goal of a decent home and suitable living environment for every American family.

We submit to you that, while progress has been made toward this goal, it has not been fully achieved. The Federal government must continue its commitment to this National Housing Policy, backed by the necessary resources with which to continue the battle against neighborhood deterioration and a decaying housing stock.

Mr. Chairman, we look forward to working with you and the Subcommittee in adequately funding HUD's Housing and Community Development Programs for FY 2002, and we respectfully request the Administration's budget in April.

Thank you.