Remarks Of Regional Administrator Rick Garcia
The 2011 North Dakota Statewide Housing Conference
Sponsored By The North Dakota Housing Finance Agency
February 9, 2011
Ramkota Hotel Bismarck, ND

Thank you Mike -- for your very generous introduction.

Good morning and greetings on behalf of Secretary Shaun Donovan and the Obama Administration.

First, let me give a big thanks to the North Dakota Housing Finance Agency and members of the Planning Committee who are our conference hosts. (Rick: lead applause)

It is a pleasure being with you again today to in North Dakota. I was here last fall and then again just a few months ago, as we toured parts of North Dakota, reviewing the housing needs in the eastern and western parts of the state, as well as reviewing the housing conditions near Spirit Lake.

I have had the pleasure of meeting many of you. Most of you know that I was appointed Regional Administrator of the six-state Rocky Mountain Region VIII...just about a year ago. But you may not know that I experienced, firsthand, the intense firing line of the economical downturn as a local government official, as a former Denver City Councilmember; and with Pueblo Economic Development Corporation and as former Board Chair of the Colorado Housing and Finance Authority.

I understand what resources it takes to provide new, affordable, mixed-income housing and now a more comprehensive services/ community housing design at a local level.

Today, I first want to talk about the new tools HUD is providing and partnerships this Administration is forging to do and work to Strengthen Our Economy.

We all know how difficult these last few years have been for our communities.

When the President took office, it was only weeks after the Bush Administration and Congress had taken dramatic steps to prevent a financial meltdown -- and still, we were staring into an abyss. Experts across the political spectrum said we were headed for a Second Great Depression.

We were losing 753,000 jobs a month and in the middle of 22 straight months of job losses and 30 straight months of home price declines.

The dramatic but urgently needed steps we took--to help families keep their homes, to keep our housing market afloat, and to provide critical assistance to communities through the Recovery Act--had an impact that is undeniable.

Nearly FOUR million borrowers received mortgage modifications since April 2009 -- more than twice the number of foreclosures completed during that time.

We stopped the slide in home prices.

And most important of all, we stopped the slide in job
losses -- and have seen 12 straight months of job growth in the private sector.

HOWEVER, we are out of the woods. Our unemployment rate is still unacceptably high. Given the millions of people the recession put out of work, we've got a lot of work ahead of us.

That's why the bipartisan tax cut package signed into law by the President was so important.

Because of President Obama's leadership, 159 million Americans will get a tax cut worth $1,000 for a typical family making $50,000 per year.

Twelve million families will benefit from a $1,000 child tax credit. Eight million students and their families will benefit from a yearly $2,500 tuition tax credit to make college more affordable. And six-and-a-half million families with 15 million children will benefit from an expanded Earned Income Tax Credit.

The Council of Economic Advisers estimates that the full year extension of emergency unemployment benefits will create 600,000 jobs this year alone.

This package focuses on high impact, job creating tax cuts will have significant repercussions for our housing market and construction industry, which have traditionally been cornerstones of economic recovery.

Because of this package, businesses in your communities now have new tax incentives to buy equipment and make the investments in research and development that help them hire and grow.

The expensing provisions alone could generate more than $50 billion in additional investment in the U.S. in 2011 -- helping our construction industry buy the new equipment it needs to create good-paying jobs in your communities.

Helping Communities Recover
Of course, our nation's local elected officials and their staffs have been hard at work helping our communities recover for quite some time. And many of the tools you've been using were provided through the Recovery Act.

Indeed, we provided almost three-quarters of HUD's $13.6 billion in Recovery funds directly to localities because we believed you best understood the needs of your communities -- and that you knew how to ensure these dollars benefited the people and the neighborhoods who needed them most.

………And you have delivered. With your leadership, HUD's Recovery programs have helped renovate over 358,000 homes and build more than 3,600 new homes in communities across the country -- many to green standards with energy efficient improvements, saving money for residents and owners alike.

With funds from the Homelessness Prevention and Rapid Re-Housing Program, our mayors have helped us prevent or end homelessness for more than three-quarters of a million people -- "fundamentally changing," as you reported last year, the way communities respond to homelessness.

Most important of all, HUD Recovery programs created more than 27,000 jobs in the third quarter of last year alone.

None of this would have been possible without the leadership of our nation's mayors AND YOU............. I congratulate each of you for helping HUD obligate 100 percent of our Recovery funds a full month ahead of schedule.

You've shown the same tenacity with the first round of Neighborhood Stabilization funds. And I want to congratulate each of you for meeting your NSP 1 obligation deadlines in September.

Ninety-nine percent of you met the 18 month deadline Congress set. We were all proud to help you get over the finish line.

Indeed, we all know that the Neighborhood Stabilization Program has been an essential tool in our cities' toolbox, helping you buy up foreclosed and abandoned homes.

That's why we've provided additional funding through the Recovery Act and through the Dodd-Frank Wall Street Reform bill for two additional rounds of NSP to meet an increased need.

But we also know the extraordinary challenges communities faced using these funds at the outset -- from staff shortages during a time of enormous budget cutbacks to having to establish individual relationships with financial institutions, to having to negotiate the best price one house at a time.

An Uncertain Budget Situation
Of course, at the same time these tools are helping to repair our economy, we face an uncertain budget situation for the foreseeable future. Some of you have already drawn down every dollar of CDBG funds received through the Recovery Act -- and others are right behind them.

Having been a city leader, I know how critical programs like CDBG and HOME are to your communities.

This May will be the 20th anniversary of the HOME program -- and this year, it will produce its one-millionth home.

CDBG funds make a difference, particularly, when the dollars they leverage build the economic infrastructure a community needs to thrive.

For example, the State of North Dakota added $1.5 million of CDBG funding for economic development financial assistance to for profit businesses last year and created 116 new jobs in communities such as Jamestown, Minot and Valley City.

Still, while President Obama has not yet released his FY 2012 budget proposal, some are suggesting we cut $100 billion from domestic programs.

Now, let me be clear, this administration is serious about reining in unnecessary spending -- and you'll see that in the President's budget. Tough decisions will need to be made.

But we are also committed to making the strategic investments we need to ensure the economic future of this country.

And CDBG is an important catalyst for economic growth -- helping you bring businesses to your communities, forge innovative partnerships around child care and rebuild your economies.

So, let me be perfectly clear: When it comes to CDBG funding, President Obama hears you--loud and clear.

And we need your help -- to keep reporting data we need--and improving the data you collect--to make the case that CDBG creates jobs.

Building Strong, Sustainable Communities
Of course, CDBG isn't the only area we need you to make your voices heard.

HUD programs provide safe, decent and affordable housing to 4.5 million people -- more than half of whom are elderly and disabled.

These are programs in which costs go up every year just to serve existing residents. So ensuring we continue to support those residents makes funding new initiatives that much harder.

That's why you and I have a big case to make on other innovative initiatives we have put in place to follow your lead -- and to support the work you are already doing to prepare your communities and economies for the future.

The first is sustainability and green jobs. I don't have to tell this audience how important this is to our economy. Green construction spending already supports more than 2 million jobs and generates more than $100 billion in GDP and wages. And over the next four years, it will support nearly 8 million jobs and generate more than a half trillion dollars in economic activity.

We have heard from you:

Sustainability isn't just about green roofs and energy-efficient buildings -- it's also about where those buildings are located AND ROADS.

America must find a way to connect housing and ROADS to jobs.

Today, for every dollar the average household earns, they now spend 52 cents on housing and transportation combined. They have become American families' two single biggest expenses.

This past October, we were proud to award $140 million in grants to support local and regional sustainable communities' initiatives in over 100 communities.

Demand for our two new Sustainable Communities grant programs was phenomenal. Seventy-eight million Americans live in the 45 regions that won these competitions -- but still we were only able to fund a quarter of the applications we received.

For our Community Challenge grant program, which we administered jointly with the Department of Transportation, the funds awarded by HUD and DOT will leverage over $50 million in additional local, state and private funding.

These grants represent the most significant federal investment in planning in generations.

Planning our communities smarter means parents will spend less time driving and more time with their children.

More families will live in safe, stable communities near good schools and jobs. More kids in your communities will be healthy and fit. And more businesses will have access to the capital and talent they need to grow and prosper.

Indeed, regions who embrace sustainable communities will have a built-in competitive edge in attracting jobs and private investment.

Of course, the grants we provided weren't just about larger urban areas. More than half of applicants came from small towns and rural regions -- and winners included rural counties and a Native American tribe in South Dakota.

This commitment to rural America extends beyond sustainability grants…… to our $25 million Rural Innovation Fund, which supports larger-scale innovative approaches to addressing unique rural issues -- including housing distress and community poverty and bolstering our capacity to catalyze change in rural America.

Because when it comes to strengthening communities--central cities or rural places--YOU know better than anyone that one size doesn't fit all. It's long past time the Federal government understood that as well.

Remaking America's Public Housing
Another area where we must make our case is for transforming the way we provide rental assistance.

Despite an enormous need, antiquated rules developed nearly a half century ago prevent anyone but the Federal government from financing improvements to public housing.

These rules haven't just stood in the way of building housing. They have also stood in the way of building in the neighborhood around that housing -- the grocery stores, schools and retail businesses that are the bread and butter of our nation's construction industry, leaving whole neighborhoods segregated and isolated from opportunity.

Our Transforming Rental Assistance proposal will change that by providing more opportunities to create properties and homes with a mix of incomes and uses -- by leveraging private and other public sector funds--including Low-Income Housing Tax Credits and the CDBG and HOME funds you control--and encouraging the kind of market discipline in public housing we've seen elsewhere in the affordable housing sector.

You all know this isn't a pipe dream because you've seen it. HOPE VI has begun this transformation.

Already, our country has lost 150,000 units of public housing in the last 15 years -- 10,000 homes a year, every year for fifteen years. In fact, in the time I've been speaking, we've already lost another unit of public housing. The status quo isn't good enough.

Congressman Keith Ellison of Minnesota is preparing to re-introduce the Rental Housing Revitalization Act which would bring $25 billion in private capital off the sidelines and create more than 300,000 jobs in the communities and neighborhoods that need them most.

This should not be a partisan issue. Republican leaders like HUD Secretary Jack Kemp, who created HOPE VI, and Senator Kit Bond, who championed it for years, understood that instead of being the problem for your neighborhoods it's too often thought of as, public housing can be a real community asset.

And with the Rental Housing Revitalization Act, it will be.

A Focus On Results
Lastly, let me say that there is no greater opportunity for bipartisanship and for getting real results than the issue of homelessness.

Countless local leaders in the last few years realized the supportive housing model has helped communities around the country reduce chronic homelessness--the people on our streets we thought would always be homeless--by a third.

In fact, that very progress opened the door to a federal plan President Obama announced last year that will finish the job of ending homelessness.

The culmination of a decade of bipartisan progress on the issue, the plan, called Opening Doors, sets us on a path to end all homelessness -- committing our country to ending homelessness for families, youth, and children within a decade, ending chronic homelessness and homelessness among veterans in five years.

Let's be clear: this fight wasn't started in Washington. It was started by you and your partners in communities around the country. You were the ones who said we could end homelessness in this country -- and have set out to prove it.

Well, with this plan, we are not only going to take on this fight -- with the Federal government supporting your work, we are going to win it. Some wonder whether we can make progress in a country this divided.

But whether the issue is tax cuts and programs like CDBG that create jobs, putting people to work rebuilding our public housing, proven strategies that prevent and end homelessness, or new tools that help communities that share problems finally start to share solutions, I'm confident we can not only make progress -- but history.

Ensuring we do starts with the men and women on the front lines of our communities.

It starts with the leaders here today in this room. It starts with you.

Let's step from a national perspective and talk about HUD funding in North Dakota...

First, let's discuss Recovery Act funds and recognize you and your hard work. Last year alone North Dakota received $65 million dollars from the department in Recovery Act funding, with a 97% expenditure rate. Thank you North Dakota for a job very well done.

(Rick: Initiate Applause)

What has HUD done in North Dakota?

Typically people think of FHA home loans when they think of HUD. As of today, FHA's North Dakota portfolio insures more than $1.6+ billion in single family loans.

A key component is the FHA Housing Counseling program. The counseling grants awarded to the North Dakota Housing finance Agency were valued at $136,881 in 2010.

FHA Multifamily programs insure more than $6 million in loans. The program is most popular today during credit crunch. FHA insured 1,080 units in 17properties statewide. The project-based Section 8 subsidy in 2010 was valued at nearly $32 million in North Dakota. Multifamily Housing grants for seniors, the disabled and Service Coordinators totaled $1.3 million in 13 properties.

The Community Planning and Development investments in North Dakota total nearly $24.8 million. This January, North Dakota Continuum of Care was awarded over 1.6 million dollars to continue 18 homeless programs.

Public Housing capital and operating funds support the local housing authorities and Section 8 vouchers. Public Housing funding totaled $38.8 million in 2010.

HUD also provided nearly $20 million in non-competitive grants to Native American Programs and $2.8 million in competitive grants.

HUD investments in North Dakota total more than $1.8 billion to support North Dakota housing and economic development activities.

Before I close today, it is vital that we discuss N.D. and rural America programs.

For more than the past decade, HUD has supported over 800 CDCs, local rural non-profits, and Native American tribes through the Rural Housing and Economic Development program. From building and rehabbing over 15,000 homes, to creating credit unions and business incubators that have helped more than 1,600 businesses get off the ground, to supporting housing counseling and homeownership programs, this program has helped build capacity where it is needed most.

In addition, we've supported rural community development through our Capacity Building for Affordable Housing and Community Development program -- to help train CDCs to leverage private investment for revitalization activities in rural communities.

And over the last ten years, the Indian Housing Block Grant program has built or acquired more than 25,000 affordable homes and rehabbed another 52,000 units on Native American reservations.

As you know better than anyone, the economic crisis that began in 2008 didn't just hit the cities and suburbs -- it devastated rural communities, as smaller areas lacking infrastructure, access to jobs, and the thriving businesses that help communities grow were left particularly vulnerable.

As such, under President Obama, we've worked to respond to the needs of rural communities to help build the strong, inclusive sustainable communities families in rural America need to succeed in the 21st century.

Affordable Housing in Rural Communities
Certainly, so much of that work began with the Recovery Act, which made an unprecedented investment in affordable housing across the country.

In less than two years, the Recovery Act has already helped renovate more 360,000 homes, with nearly 18,000 new homes under construction -- many to green standards with energy efficient improvements, saving money for residents and owners alike.

It's provided more than a half billion dollars in Recovery Act funding to Native American communities, helping places like the Oglala Sioux Housing Authority in Pine Ridge South Dakota rehab more than a hundred affordable homes with roofs using Energy Star certified materials.

At the same time, the Homeless Prevention and Rapid Re-Housing Program has prevented and ended homelessness for more than three quarter of a million people in communities across the country.

And with the number of sheltered homeless families in rural areas increasing from 27 percent of the total homeless population to almost 40 percent over the last two years, this tool has been particularly critical for our rural communities.

Frankly, I think most people would be shocked to learn that rural areas have a family homelessness rate that is almost double that of cities -- in large part because rural areas often have fewer shelters and resources for people to turn to in a time of need.

And according to the Council for Affordable and Rural Housing, most families in rural places who would otherwise be on the street live in cars, doubled up, or in grossly substandard housing.

You see this every day. Secretary Shaun Donovan saw this for himself while visiting Williston, North Dakota in August, where a lack of available housing meant that even working families with good-paying jobs were forced into homelessness.

That's not right -- and that has to change.

The U.S. Conference of Mayors reports that it is changing -- that Homeless Prevention and Rapid Re-Housing Program is "fundamentally changing" the way communities respond to homelessness at the local level. That's because it's keeping people in their homes rather than waiting for them to become homeless, and quickly returning those who do fall into homelessness to the stable, permanent housing they need.

The most far-reaching and ambitious plan in our history to put our nation on the path toward ending all types of homelessness and the culmination of more than a decade's work in communities around the country, this plan will end chronic homelessness and homelessness among veterans in five years, while ending homelessness for families, youth, and children within a decade.

And by working with USDA to identify how we can further engage their Food Stamps and Rural Development programs to break down federal agency silos--and by taking advantage of a new Rural Housing Stability competitive program created by the HEARTH Act that will be used by communities to prevent homelessness and house those who are homeless--we can ensure this plan makes the biggest possible impact in rural America.

Over the last decade, it's communities like Bismarck and Fargo, that have proven that with the right tools and the right partners, we can house anyone.

Our job now is to house everyone -- to prevent and end homelessness. All homelessness. And with this plan, we will.

Building Sustainable Rural Communities
Of course, to truly ensure that all Americans can afford to live in communities with access to employment, schools and transportation options, we need to nurture strong, robust, and vital rural communities.

Those grants weren't just about cities or suburbs. In fact our sustainability grants included a $25 million set-aside for communities with populations of a half-million or less.

And we took it one step further to ensure that some of the funding would be awarded to even smaller communities, targeting areas with less than 200,000 people.

Through Sustainable Regional Planning Grants, for instance, we provided nearly $1 million to better connect the Pine Ridge Indian Reservation in rural South Dakota to the surrounding cities and economies.

This proposal was particularly exciting as the group is soliciting an unprecedented level of community input from families that have been farming those lands for generations, seniors on fixed incomes, migrant workers, and small business owners.

And our partnership with DOT and EPA isn't limited to the grants we award. We've formed an interagency working group on rural and small town communities with USDA that has been meeting for several months to see how we can better align our programs to serve smaller communities and regions.

Last summer Deputy Secretary Ron Sims participated in a rural issues roundtable with high-ranking colleagues from DOT, USDA and the EPA as well as 90 stakeholders from small-town and rural constituencies to discuss the way forward on rural issues with a focus on inter-agency cooperation.

Because when it comes to housing, environmental and transportation policy in rural America, it's time the Federal government spoke with one voice.

Rural Innovation
Of course, when most people hear the term "sustainability" -- they think of environmental sustainability. But this audience knows full well that you can't have a sustainable community if you have concentrated rural housing distress and community poverty.

That's why the second way we are helping catalyze change in rural communities is by providing tools that help you tackle housing and poverty challenges that are unique to rural places.

HUD is making available $25 million through a new Rural Innovation Fund to do just that.

The fund builds on the Rural Housing and Economic Development program I mentioned earlier -- which has had a real impact in rural communities, creating nearly 12,000 jobs and providing job training to nearly 30,000 people. Indeed, the quarter billion dollars HUD has invested in this program over the last decade has leveraged more than three times that amount in other funds -- providing an excellent return for the taxpayer.

In developing the Rural Innovation Fund, HUD worked closely with federal partners, including the Department of Agriculture and the Economic Development Administration at the Commerce Department, to ensure that other federal programs serving rural communities can be leveraged for additional impact.

Increasing the maximum award from $300,000 to $2 million, the fund sets aside $5 million for Native American tribes, but will make them eligible for broader funding by linking up with other partners to develop innovative proposals.

Using a new online Rural Mapping Tool, applicants will be able to measure poverty and community housing distress -- so they can spend less time and money doing paperwork and more on how they can best meet the needs of their communities.

Reflecting months of listening to stakeholders who know their communities best, including the HAC, we're excited about the possibilities of the Rural Innovation Fund.

We heard that smaller communities are penalized -- because having fewer resources means the lack of flexibility comes at an even steeper cost.

Small PHAs house nearly 180,000 elderly or disabled households, which make up 18 percent of all public housing households. And so these communities, many of which are in rural areas, face not only an aging housing stock -- but a rapidly aging population as well.

The Rental Housing Revitalization Act will give smaller communities more resources -- but also more flexibility to use those resources.

The time has come to make our programs easier to use -- so that our local partners can focus more on the needs of their communities and less on complying with inflexible, one-size-fits-all rules.

And by putting an end to the parallel universe HUD programs operate in compared to the rest of the affordable housing world, the Rental Housing Revitalization Act would also put an end to the "separate, but inherently unequal" housing system in this country.

You know what I'm talking about -- how most families live in housing that is financed, developed and managed in a way that can be integrated with the communities around them, while the two-and-a-half million poor families served by HUD's oldest programs live in housing that can't be.

At HUD, we think that the Rental Housing Revitalization Act holds enormous promise -- and we think once you get a chance to study it, you'll agree.

But whether it's revitalizing our rental housing stock, rural innovation or planning for more sustainable communities, when it comes to strengthening rural America--when it comes to building vibrant, sustainable communities of opportunity and choice for all Americans--you know one size doesn't fit all.

It's long past time the Federal government understood that as well. And with these tools, we are.

A New Era of Partnership
For me, and for President Obama, all this work comes down to a very simple belief:
No matter where you live, when you choose a home, you don't just choose a home.
You also choose schools for your children and transportation to work.
You choose a community -- and the choices available in that community.
A belief that our children's futures should never be determined--or their choices limited--by the zip code they grow up in.

Like our President, I know change is never easy -- that revitalizing our nation's communities, rural, urban and suburban won't happen overnight. Nor will it happen because of any one policy or the work of any one agency or one party.

But working together, in common purpose--in partnership--we can tackle our toughest challenges. We can push back on this crisis.

And most important of all, we can create a geography of opportunity for every American -- and every family. Together, I know we will.

We will continue to be a major partner with our federal agencies; working together to boost economic development and ensure Americans can afford to live in communities with access to employment, schools and public transit options.

Thank you for allowing me to share HUD's overview of RURAL sustainable housing interests, work and grants with you today. Thank you for your continued commitment to transforming lives and communities throughout your great state of North Dakota.

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