By the way, let me just interrupt and say in my own comments, that it is interesting that the Federal administrator here is almost in agreement with everything we are saying. And I think it reflects the fact that he is here and understands the local conditions in the Bay Area, as opposed to Federal officials who come from other parts of the country and frankly go through the same kind of sticker shock some of us did when we first came to California and deal with the crisis of housing, as well as the repair cost. The local Federal officials seem to understand that, because they are conditioned to seeing what the local market is. But unfortunately, somebody coming from Tennessee, who is part of a temporary assignment here, doesn't. And that, I think, is one of the fundamental problems we have.

As I said, the continuing area of disagreement has been over the replacement of our capacity to provide shelter for those who are homeless. This is the first disaster we have had, I think, in a big city such as ours, or Oakland, or San Jose and other places, where we have seen the homeless affected in such a large way. I think it is causing a new kind of challenge that FEMA does not understand because they are still looking very narrowly at lost capacity, that is, the units that were destroyed. Units in our homeless program which happened to be vacant at the time of the quake are not counted by FEMA even though they may have been inhabited the night before, or 2 nights before.

As you know, when you have a homeless shelter program, you put somebody up in a single room occupancy hotel and on a particular night it might be open or it might not be. But it is part of the stock that we use to put people in. And so while all of the units in a particular single room occupancy hotel may not have been filled, they were all eligible for that, and the next night it would have been.

F.E.M.A., however, is saying on that particular night, October 17 at 5:04, if there wasn't a live warm body in there, it doesn't count. We think that is too narrow a construction of the issue. They do not seem to recognize that one unit of homeless housing could serve many households in the same month. Because you move somebody through there who stayed there a week, hopefully you can get them more permanent housing, they get into the public housing units, and so you get somebody else into that temporary unit. This means that if they assist one individual occupant, which they technically say is the only one who is eligible, they believe they have restored the level of aid that we previously had without regard to the fact that the single unit means the loss of many units for people on a round the month or round the year basis.

Because of these differences, FEMA currently claims that San Francisco should only seek funding for the loss of 279 homeless hotel units. We feel, as we count them and we document, because people were in them the night before or the week before, that the number should be 451 units, which includes some 100 low income nonhotel units that we believe are clearly eligible.

As Governor Dukemejian said when he came here, and I think President Bush, clearly the benefit of the doubt should go to the stricken area. And that's not what we are seeing these days as these negotiations are continuing. What we are saying very is

simply is if you remember nothing else is that we ought to get the benefit of the doubt. We are not trying to rip off the Federal Government. That is clearly something that could be documented. But when you argue about someone was in there or the night before or they were not in the night of the earthquake, I do not think that is giving us the benefit of the doubt.

Finally, I would like to report on the remaining issues that affected those that remain homeless in the earthquake no matter which part of San Francisco they live in. Building owners have reported to us that the length of time to review FEMA and SBA applications is exceptionally long. Particularly, because of the sizable number of complete rejections given to residential property owners. Six months after the earthquake, some owners are now just getting their rejection notices. Since most of those same owners only got 60 days, or 2 months of FEMA assistance to make rental or mortgage payments, this represents months of loan carrying costs on damaged or destroyed buildings before getting a partial, or even a full rejection, from a loan program that initially promised a complete

response.

In addition, those most in need appear to be those least likely to qualify for the loan program. For example, there are undocumented, but nevertheless, stories of affluent homeowners getting $60,000 to fix a porch because they can carry the debt and so they are eligible, while our office of housing received calls from desperate individuals faced with the loss of their homes or income property because they didn't have that capacity for carrying debt.

And so there seems to be no effort made to create a grant or a loan program for people with high equity in their homes or buildings but with limited incomes. Programs of this sort which help retired persons and low and moderate income building owners, could have considered current or projected increases in equity as a means for ultimate payback as the California CALDAP program does for homes in the Bay Area.

In San Francisco, 296 building owners have made applications for the State CALDAP program, that is an emergency program we have, because they were not given adequate SBA loans to repair or rebuild. And over half of these applicants received nothing from the SBA. We project that possibly twice that number may eventually apply to the State program due to complete or substantial rejection by the SBA.

San Francisco has shown a great resiliency in meeting our earthquake needs. At the same time, we are faced with a disaster that is unprecedented in the issues that face us and continue as we get minor aftershocks. We must understand and act as responsible government officials on the needs of the homeless. We must understand and act as responsible government officials on the needs of homeowners who face high costs in a high priced housing market. We must understand and act as responsible government officials on the needs of residential building owners who face repair costs and rehab costs who are being turned away from existing programs.

I believe that this panel, as the Congress has consistently from the very beginning, will help focus attention on these needs. And I am pleased to offer the support and any information that the com

mittee may request after the hearing so as we can better meet these human needs across the board in San Francisco.

Thank you very much for your attention and time.

[The prepared statement of Mr. Agnos can be found in the appendix.]

Chairman TORRES. Thank you, Mr. Mayor, for a very fine statement. As I mentioned to you, it will be in its complete entirety, and your supplemental comments, entered into the record.

Of course, now we would like to hear from the mayor of the city of Oakland, Mayor Lionel Wilson. You may proceed, sir.

STATEMENT OF LIONEL J. WILSON, MAYOR, CITY OF OAKLAND Mr. WILSON. Thank you, Mr. Chairman, and Members of the committee. It is a real pleasure to appear before the committee. And from what I have heard thus far spoken by the committee Members, it is already apparent to me that there is a feeling and an understanding, generally, in terms of the kind of problems that we do face here in the city of Oakland.

And eliminating those complimentary references to myself and Mr. Agnos, I think I would like to adopt the statements of each one of you and place them in the record as part of my statement. Chairman TORRES. Without objection.

Mr. WILSON. I will offer my own written statement for the record, Mr. Chairman.

And listening to Mr. Agnos, Mr. Agnos has already indicated, we have been through this a number of times together. Most of our problems are the same, very similar problems. And the problems of the 30-day rule, we have been fighting that in Washington and in Oakland. I believe that Secretary Kemp from the meetings that we have had with him, has been sympathetic and has appreciated those problems.

However, he is caught up in the inter-relationship between other agencies in Washington. And the Secretary of Transportation, Secretary Skinner, has also shown that from our meetings with him, and we have had a number of them both in Washington and here in the Bay Area, has indicated that he really understands and appreciates it. But then we get caught up into these bureaucratic problems in terms of relationships of authority and things of that

nature.

I will attempt to restrain my statement to somewhat of a summary now. More than 1200 units of rental housing were eliminated by the quake. A substantial number of moderate, low, and very low income homeowner occupied houses were also affected. As you would expect with a disaster of this magnitude, additional damage continues to be discovered.

The downtown area residential structures suffered major damage. In particular, seven residential hotels and four apartment building totalling 975 dwelling units were evacuated and remain closed. 1000 persons, most of whom are very low income, occupied those units.

Now, one of the problems that we have in terms of the SROS, the seven SROs that we were first forced to close, is that not only were we faced with a situation in which the tenants of the SROS, the

majority of whom were people who already had social problems with low, very low income, subsidized income, for the most part, subsidized incomes of one kind or another.

But in addition to that, superimposed upon that problem in terms of replacement, that the owners for the most part of the seven SROS, were people who you might generally describe as marginal, and as marginal in the sense that their own financial circumstances were such that they didn't have the kind of financial capacity to do anything about their own particular problems. And the laws and the provisions provided for them are very unrealistic in terms of placing them in a position where they can do anything about rehabilitating their premises and putting them back into operation.

And then you get into this question of semantics also in terms of what is permanent and what is emergency. If you talk about an SRO that went down and is closed and that may not be rehabilitable, it would have to be replaced, is that not an emergency, the totality of replacing that facility which housed several hundred people. And I think this is something that really needs to be addressed in legislation.

A number of organizations have responded to our new low income housing shortfall. The American Red Cross responded immediately with volunteer staffed emergency shelters. And they have continued to provide some help in terms of providing temporary housing for many of the people from the SROS.

The Department of Housing and Urban Development responded promptly with a letter from Secretary Kemp on October 20, 1989, outlining possible sources of funding. However, they did not identify any additional funds or aid. The resources cited included Community Development Block Grant funds, a very scarce resource already allocated to critical neighborhood projects.

The references made by Mayor Agnos of Robert DeMonte, rather than present my own testimony, it is substantially the same. We have had the same experience. Mr. DeMonte does understand what our problems are. And in each of the observations that he has made, either verbally or in writing, have been consistent with what has been presented by Mr. Agnos and reflect upon the kind of problems that we have.

Now, on the other hand, the response of FEMA to woeful Oakland's post-quake housing needs was regrettably inadequate. For the people most severely impacted, that is, very low income persons in SRO hotels, FEMA assistance guidelines were inappropriate. There eligibility requirements for temporary housing, as stated by Mayor Agnos, is inconsistent with the realities of life in terms of these people who were in on the first when they get there subsistence check, and then by the middle of the month when it is gone, they disappear in the streets and become homeless.

Only when FEMA was challenged by a lawsuit, Jimmy Smith, et al. v. FEMA, did FEMA agree to meet the needs of such persons as these people from the SROs, that we referred to. However, after an agreement was reached, then they went back and looked at it and said "Wait a minute. We should not have entered into that agreement." So we have not seen any implementation of it. And I sub

mitted my letter to FEMA dated March 23, 1990 protesting their lack of implementation or at least their interpretation placed on it. H.C.D., the State Department of Housing and Community Development responded to our needs within a reasonable amount of time. The State Legislation passed a bill allocating quake relief funds, and HCD quickly formulated guidelines for a Natural Disaster Emergency Shelter Program, contacted the city, and funded our subsequent application.

The Emergency Shelter Program is helping to fund the East Oakland shelter established with the assistance of the American Red Cross, which has housed up to 146 persons. That shelter is expected to continue to house 75 to 80 earthquake displaced persons. So we feel that we have had some reasonable response to the State in terms of the housing problems that we have. Oakland continues to aggressively seek the assistance necessary to house our displaced low income residents.

F.E.M.A. takes a position that it responds only to emergency needs caused by a disaster. This deals with the question of definition that I indicated earlier in my presentation. And FEMA has pointed its institutional finger at HUD as the proper agency to assist with the replacement of such housing. HUD in turn tells us that they do not have a congressional mandate to address emergencies caused by natural disasters.

So Oakland, like other northern California communities that you are hearing from, does not have $60 million to repair or replace our housing.

Thank you very much for permitting me this opportunity to appear before you and present some of the problems that we are experiencing emanating from the earthquake.

[The prepared statement of Mr. Wilson can be found in the appendix.]

Chairman TORRES. Thank you very much, Mayor Wilson, for your very concise statement. And we again applaud you, as we did with Mayor Agnos, in the laudable work that you have done here during this crisis.

I would like to hear from this next witness, Supervisor Don Perata, of Alameda County.

STATEMENT OF DON PERATA, SUPERVISOR, ALAMEDA COUNTY Mr. PERATA. Thank you, Mr. Torres, and thank all of you for being here. It is indeed a pleasure to have the interests expressed by this panel for the problems of our community. I will not reiterate the comments that Art and Lionel already made. Which is very polite considering the way that I am feeling.

There is a phrase in my district, that when you have problems with somebody, "you light them up." And I am really here to communicate a lot of anger and a lot of frustration that the people of Oakland have over the way in which FEMA has treated us.

We had some difficulties with the Red Cross that were fairly well documented. But we came to an agreement, we worked things out, and we are working together. But under any circumstances, the Red Cross were volunteers. FEMA, on the other hand, works for us.