again, it is because this is the only housing option they have available to them at a price they can afford to pay.

Why do government agencies and nonprofit housing development corporations need to get involved? We need to get involved because most of the private owners of the damaged SROS and apartments in Oakland were already highly leveraged and will not be able to afford even low interest loans to put their buildings back into service. Certainly, they will not be able to do the major renovation and still charge pre-quake rents.

In addition, a new State law requiring that any vacant building being renovated be brought up to current earthquake safety standards, makes it even more expensive and makes low income rents even more unlikely.

If these units are to be saved and be made permanently affordable, it will require a cooperative effort between local, State, and Federal Government agencies and nonprofit housing development corporations which are in a position to purchase, renovate, and manage these buildings.

Now, to answer your question specifically, and I will close with that. How successful were the efforts of Federal agencies in delivering housing related services. And you wanted comments on the coordination of local, State, and Federal assistance to disaster victims.

We are going to speak to long term, because we did not deal with the short term at all. But we must reluctantly conclude that FEMA attempted to spend as little as possible in serving the low income population evacuated from our SRO hotels and very low income apartments. Perhaps since meeting their numerous needs is not explicitly spelled out in FEMA regulations. The fact that a lawsuit had to be brought against FEMA charging them with discrimination against these resident least able to manage displacement, is a sorry statement of FEMA's performance. At least for the very low income people, we need the full 18 months and good FEMA service. I know for our own SROs, when the suit was filed, and for our own nonprofit housing development corporations, when the suit was filed, we speeded up our work. And we have had several nonprofits who have incurred $40,000 and $50,000 worth of work because they knew they had to work very quickly to meet the July 15 deadline. And so it has been a real burden to even the people who are trying to help the people who were displaced.

We are also disappointed that HUD has only given to Oakland 130 section 8 vouchers. There are only 500 for the region, and each of the areas could have used 500. It was simply inadequate. It was a classic Catch-22 situation. FEMA declined to provide long-term housing assistance, because HUD is the agency that deals with long-term housing. HUD could not lend or did not lend adequate assistance because the housing loss was disaster related and FEMA is a Federal agency. And so the two of them just crossed furbishes. Let me just conclude by saying that the only way that we are going to repair the damage done to low income family lives is by repairing those units or replacing those units with substantial subsidization or purchasing existing units that are now on the moderate rental market and subsidizing them for low income people. Otherwise these people will permanently be on the streets.

And what will happen is it is like a story I heard just yesterday. A man living in the Oaks Hotel, which is one that went down, he is mentally ill, but he has been sustained in the community for a number of years. He had not had a hospitalization for mental illness in 7 years. Since November, he has had three hospitalizations for mental illness. And that is just the kind of impact it has had on people's lives.

Thank you.

[The prepared statement of Ms Weinreb can be found in the appendix.]

Chairman TORRES. Thank you, Ms. Weinreb, for a very illuminating statement.

Thank you all for sharing with us the many experiences that you have had in this tragic circumstance. I want to just commend the advocacy groups for your commitment to the victims of this situation. And certainly it gives us a better picture. You are filling the gaps in for us on what has to be done and what is needed. You are helping us to evaluate what we have to do.

Nancy?

MS. PELOSI. Thank you, Mr. Chairman. I wish to associate myself with your remarks regarding the advocacy groups and thank them for what they have done and for their testimony today. I am particularly grateful to Mr. Feeney and Mr. Smith for being here, for coming forward, and giving tangible evidence of the problem that we know to be so.

Mr. Zimmerman, I would like to say to you that if you thought in my remarks I thought that the emergency was over, we would not be here. That is why we invited the committee and that is why you are here. If I gave you that impression, forgive me, but it really referred to search and rescue and life and limb, but not beyond that.

Mr. Chairman, I have two points that I would like to make. One is, the questions that are generated from this testimony are really questions for FEMA. And maybe not even for FEMA in this room, maybe we have to make some presentation to FEMA, to Mr. Grant Peterson in Washington, DC, because I know that the intention is good. I know that they set out to do something. We talked about this yesterday about the insensitivity to an urban population in times of disaster. And you and I know that disaster strikes the poor hardest. Everything strikes the poor hardest. They take the worst bite of the wormy apple when it gets passed around in the form of an earthquake or whatever.

We talked also yesterday about the fact that we felt this impact so strongly because we also had the lack of affordable housing in our area. And this is a result to of the 10 years in the past administration of cutting back 77 percent of housing programs from the Federal level. So we know why we are here. It is just a question of what we do about it and how we talk to FEMA about the sensitivity, the outreach that they had testified yesterday on their own that they were preparing to do to understand the communities better. Whether it is dealing with the poor, minorities, in some cases language barriers which present quite an obstacle to communication, and especially aggravates the stress in time of a disaster.

I have one question though that I have asked the elected officials and they referred me to you. Yesterday, we heard testimony that only 100 applications for temporary emergency housing were turned down because of the 30-day rule. Do you have evidence to the contrary? Do you know of more cases than that?

Mr. ZIMMERMAN. I would like to respond to that. First of all, my understanding was that they had said simply 100 in Santa Cruz County. We believe that the numbers are far higher than that. Part of the problem though is that in order to be turned down for the 30-day rule, you really have to get through the initial hurdle, and that is to verify your residency.

So, for example, yesterday I was talking to a client who just received an eviction notice. He was living with another gentlemen, actually two other gentlemen, in one of the residential hotels. I have gotten declarations from all three of them. I have confirmed this fact with the landlord of the building. The landlord though does not want to put it in writing because this arrangement violates local housing codes to have three people in a single room occupancy hotel. FEMA has now denied them on the basis that they cannot verify they were living there. Their names do not show up on the rent register. These three individuals are not going to be included in FEMA's counts of 100 people. So that many of the people who have been denied on verification grounds are actually 30-day residents.

Also, as I stated earlier, I think the numbers are far higher than that. When we first presented our petition which outlined suggestions that we wanted to make in November, we asked FEMA for a count back then of the number. It is somewhat difficult to place us in the position, when in November we first asked for an actual count of the number and FEMA now comes back and gives us a number 4 months later after litigation has been begun, to accurately establish an independent number. But I think that both the verification problems, and all those who have been discouraged from applying because of the defective application appeal procedures indicate the number is really far higher.

The only other thing I would like to add, if I can. There is also a second restricted eligibility requirement, what we call the shared housing rule. That also affects disproportionately the populations of these hotels.

Mr. ROBERTS. And if I could just add briefly to add to what Ken has said. Somebody in the situation of Michael Feeney, for instance, applied for benefits and was denied on the grounds it was not his primary residence. That does not tell you whether it was 30 days or because they could not verify that he was on the list. So we filed an appeal showing that he was on the list.

Well, I do not know whether they are counting Michael Feeney as one of those 100 or not. But there are people who have appealed, there are people who found that if they had not been there for 30 days, there was no sense in appealing, there was no sense in clarifying, to prove that you were living in a place. So that is part of the problem. There are hundreds out there like them.

To add to what Ken also said, the reason that FEMA told us back in November that they could not give us the number was that it was too hard to identify. Now they have gone back through and

tried to figure out who was clearly on their records, somebody who was there for 30 days. They have come up with 100 people. They cannot sit here and say that is a complete and accurate count of every person who was in a unit for less than 30 days.

Mr. ZIMMERMAN. If I might, Ms. Pelosi.

There were some people from Santa Cruz County who wanted me to communicate that the Community Action Board there, which is one of their nonprofits providing housing assistance to people who have not received FEMA aid is currently housing 269 people. According to FEMA's calculations, there should only be 69 people in residential hotels who do not received assistance. What you are seeing is that in the service provider has far more people than FEMA acknowledges. When we are faced with trying to provide shelter to people it is very difficult to have FEMA's arbitrary fig

ures.

MS. PELOSI. Thank you.
Zenobria?

Ms. EMBRY-NIMMER. If I could add to that. Also, in order to receive a denial letter you have to have an address. For all of the hundreds of people that are now homeless and do not have an address, they cannot get a denial, they cannot get a check, they cannot get anything. And this is a major problem. I agree that the numbers are much higher than the 100. I cannot even imagine where those come from.

MS. PELOSI. Thank you very much for your testimony.

Mr. Chairman, I would like to just close by saying that we do need some sensitivity training when this is the letter that somebody gets just "ineligible." Why? First of all, it is a shocking effect. But in addition to that, not ever any recourse about why you were eligible and what you might do with further information to assist in this situation. We will be chatting with FEMA about that as well. But I thank the witnesses for their testimony and for their time and for all of your good work helping people.

Chairman TORRES. Mr. Lehman?

Mr. LEHMAN. Ms. Pelosi just covered my questions. I just want to say that, I do not know if Mr. Smith is eligible or not, but being told you are not eligible on a piece of paper like this is an absolute disgrace. And certainly you have no ability to carry whatever rights you may have forward when you do not even know what it is you are appealing. That just does not sit well with me or with anyone else.

Maybe I would ask you this: Is there a real appeal process?

Mr. ZIMMERMAN. I am glad you asked that. Prior to November 17, the information about having the right to appeal was not part of this letter. And when we brought our administrative petition they then added that. FEMA had no written appeal procedure until we filed the litigation, nothing in writing. Tom Roberts and myself have been working with some of the FEMA officials to try and develop one. And based on our practical experience, we have now developed the FEMA appeal procedures in many ways. They have now submitted in writing, as a result of the litigation, the settlement. But there was nothing in writing up until the time that we issued the complaint.

Mr. LEHMAN. So there was no structure for appeal?

Mr. ROBERTS. Nothing other than three lines in the regulations that said there shall be appeals.

Mr. LEHMAN. So for all you knew, the same person who filled this out took care of the appeal too.

Mr. ZIMMERMAN. That's right. And that is actually one of the concerns that we had, because in terms of personal dealings with people it appeared to us that was happening. One of the things we were very concerned about is we did not know what information FEMA was relying upon. We thought it was critical that we get written records of that information. We did not know. There were no written procedures to tell us whether we could or we couldn't. At this point, we have worked out a procedure with FEMA that is making that available to us.

Both of our organizations are involved in training volunteer attorneys. We have more then 120 active cases, and with out written appeal procedures to determine how we should go about that it is an exceedingly difficult proposition.

Mr. LEHMAN. Thank you very much.

Chairman TORRES. Thank you very much. You are now excused. While the panel is leaving, I will begin to call forth for the fourth and last panel, which the committee will hear from today. First of all, very much discussed today is the representative from the Federal Emergency Management Agency. We are inviting Ms. Lorri Jean, the Deputy Director, to join us. Ms. Jean was with us yesterday in Watsonville.

Mr. Robert Vessey, the National Director for Disasters of the American Red Cross; Mr. Robert DeMonte, the Administrator for the Region IX with the Department of Housing and Urban Development; Mr. Robert Belloni from SBA. We missed you yesterday. We are glad you are with us today.

And Mr. Daniel Pennington, who is the Chief of the California Department of Housing and Community Development. And a very important expert on all of this is Mr. Peter Ward, who is a Geophysicist with the U.S. Geological Survey.

Welcome to each and every one of you.

Again, as I might state, Lorri Jean was with us yesterday in Watsonville and had a difficult job to do in terms of the hearing record in Watsonville. I dare say that today she also has a very difficult job to do in terms of what we have heard here today about FEMA and the widespread criticism I dare say that has been leveled at that agency. I think Ms. Pelosi said this yesterday that, we do not question for one moment the intent of FEMA and what they have attempted to do as a national organization, as an agency that it is supposed to step in in times of crisis, be they a tornado, a hurricane, an earthquake, any devastation that takes place in our country.

But there are, as we have heard, there are as we have heard, serious implications about the performance of an agency such as FEMA.

Mr. Panetta yesterday told us about the attitudinal question that has been leveled at FEMA. The fact that many of FEMA's employees in times of crises like this are retired individuals who are asked to come forth and partake in this kind of emergency job situation.