AUGUST 17, 2017

As prepared for delivery. The speaker may add or subtract comments during his presentation.

Good morning. Thank you, Regina (Mitchell), for that warm introduction. It is an honor to speak with you today.

These periodic meetings do much to educate and motivate. President Kennedy once said that "Leadership and learning are indispensable to each other." And here we see both in abundance. Your organization proves that knowledgeable leadership can generate greater understanding and innovative solutions for our affordable housing population.

President Kennedy recognized the importance of such leadership in public housing. So, did his successor, Lyndon Johnson, who signed the legislation that created HUD. I'd like to take you back 50 years, across an ocean of time, to the beginning of HUD. The first secretary was Dr. Robert Weaver. He was a great academic and teacher, a scholar and a housing visionary. In his day, he was the recognized architect of a humane, compassionate, and thoughtful set of policies to encourage homeownership, affordable housing, and low income housing for families.

Right from the start, in those early days at HUD, Dr. Weaver understood the promise of the department. But, he also recognized that bureaucracy and regulation might frustrate and stifle policy, or get in the way. He also recognized that money was not the single measurement of compassion or success, and that we couldn't just pour money on problems.

He argued that housing ... shelter ... for those who could not afford it ... could be best achieved through a partnership between every level of government, non-profits, professional organizations, housing advocates, and others in the private sector. Each entity has its strengths. Each could compliment efforts by others. Partnerships were stronger working together. What mattered was cooperation and coalition, cooperation and commitment. He called these partnerships "creative federalism." And, today, that partnership continues. Right here, in this room. It has become a professional and a human response to economic and social policy.

Dr. Weaver could see a vast web – a mosaic – of groups working together, providing what he called a "human solution" for housing in America. And, he said that one of our responsibilities at HUD was to continually examine the housing market and tell the American people what we see.

OK, let's do that. The economy is doing well. We can be thankful for that. Unemployment is at historic lows. Good. I think we will see even more good news in the months ahead. Housing is safe, stable, and secure. Yet, one statistic should give us all pause, a case for concern. Last week, on August 9th, HUD released a report about the "Worst case housing needs." It is sobering read. In 2015, the number of very poor unassisted families struggling to pay their rent rose to 8.3 million families. These families paid more than half their monthly income for rent, lived in severely substandard housing, or both.

You see it in your own work. There is not enough affordable housing. And, you discuss it in every meeting. Low-income families are becoming economic exiles. They cannot afford to live in the cities in which they work. Rents are beyond reach; homeownership, too, especially among Millennials. Some of them are commuting two or three hours each way. Demand for affordable housing is growing faster than the construction of apartments or homes that working families can afford to rent. This is especially true in high-cost areas of the country, places like Dallas, Los Angeles, San Francisco, and Miami, and in your own region, places like New York City, Philadelphia, Baltimore, and right here in Washington, D.C. There is a great divide opening up before us, widening with every year, and all some families can do is look from a distance, unable to cross that divide, marveling at a wealthy America, a costly America, that is another world for them.

We found that the number of households with worst case needs have increased by 66 percent since 2001. And while incomes continue to rise, rents also increase nearly as fast. For the poorest renters, their income does not rise fast enough.

The production of rental housing is strong. But the renter population is growing fast, too, putting increasing pressure on the rental market.

The number of households with worst case needs increased across all racial and ethnic groups. In 2015, the prevalence was 47 percent for Hispanic renters, 45 percent for non-Hispanic White renters, 37 percent for non-Hispanic Black renters, and 41 percent for others.

The challenges we face are complex and enormous. One thing we can do is look to our public-private partnerships for creative solutions, and use market economics to our advantage ... make the high costs work in our favor.

How? You are ahead of me. I know you will discuss the RAD program later today. Let me contribute to that discussion now.

At HUD, we have been besieged by developers and bankers who want our properties. We know many housing units are aging and will eventually need to be replaced. And we know there are not enough units. Where will the money come from?

Developers come to us and covet our properties because rising demand could turn those properties into money-making condos or apartment buildings. They want what we have.

So, recognizing this demand, we have turned to creative public-private partnerships. We have leveraged our properties. We have told developers that they must provide affordable housing along with meeting the needs of high-end buyers. If they want to use our properties, the developer must pay for affordable housing units, not the taxpayer. And the units must meet all of our standards, all of our specifications. Rights must be fully protected under the law.

This improves the stock of public housing. It also provides more opportunities for employment and enrichment.

Let me give you an example: the D.C. Waterfront. It has turned ruin into renovation, a surprising and impressive reclamation. There is the Nationals baseball park. Hundreds of new apartments and condos. Restaurants and stores. Safety has increased. Parklands have been set aside. There is a soccer stadium under development. And, in the midst of all this, affordable housing.

I recently was in a cab. The driver called the Waterfront, the "new downtown."

It certainly is a remarkable transformation, all without cost to the taxpayer, a budget neutral answer to the affordable housing shortage.

In fact, some people don't believe it. They refuse to recognize a new reality. They can't think outside the box. But, the Waterfront is real and thriving, a place for employment and opportunity. I invite you to walk through the Waterfront area. See the potential. In fact, you might be looking at the future ... a creative capitalism at work, solving problems, generating new solutions.

This creativity also empowers the taxpayer, easing the burden of paying for public services. The HUD budget balance sheet does not tell the full story. In fact, the budget figures for public housing are often a misleading, one-dimensional statistics that is more a twice-told tale, one governmental and one commercial. There is much more happening than merely writing a check.

Of course, realism requires responsible assessments. Every housing authority or assisted housing property is different and requires a different solution. This type of public-private partnership may not solve many of our housing needs. But, the goal must be the same: improving the lives of our residents by giving them choices and opportunities. We must find our humanity, not crush the human spirit. We must bring hope to those in need.

The Section 3 requirements also come to mind. Some housing authorities have been outstanding in using Section 3 to advantage. But, honestly, some authorities have not.

We need to encourage employment and upward mobility for our residents. Yes, we must, and will, continue to protect the vulnerable ... the aged and the sick, the disabled and the fragile, children. But for those who want to regain their self-sufficiency, we must help them. We must empower them through better linkages to skills training, community colleges, universities, job banks, employers, and government agencies. I would like to see a new dynamic, where affordable and low-income housing is exciting, energized, and an avenue of empowerment. This does not require new legislation or funding. It does demand vision, and networking and optimism. We know that many businesses are searching for skilled workers, but cannot find them. Some of them even provide books of job listings. In this strong economy, the demand for skilled workers only grows. We have a pool of potential workers in our housing authorities. We need to match the skills with the jobs, and let people find the income they need to regain their stake in the economy. This is a matter of compassion, humanity, and common sense. With a job, there is a pride, a sense of dignity, a renewal of self-worth. This is the type of human solution that Dr. Weaver spoke of fifty years ago.

So, I have been thinking about HUD's history. In my view, many programs need to be reimaged, reinvigorated, or revitalized. Just as I want a new dynamic in public housing, I'd like to see more energy and urgency in the department. We need to think more along the lines of a business: common goals, customer satisfaction, quality product, meeting needs, taxpayer relief, and effective results.

I would like to witness our moment as the "twilight of a new era." And, this can be a new beginning, a moment of creation and achievement. Just as fifty years ago, with the creation of HUD, we are here, in a new era, together, in a compassionate coalition to better serve those who need us. And, we are united in our goal: a "human solution."

Thank you.


Content Archived: January 2, 2019