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Press Conference with 100 Mayors
HUD FY 2001 Budget

Washington, DC
Wednesday, September 20, 2000

Thank you very much. Good morning. Welcome all to the Department of Housing and Urban Development. It's my pleasure to be joined this morning by the United States Conference of Mayors, who are in many ways one of the more vital partners that this department has.

The United States Conference of Mayors is the organization that represents the mayors of this nation. And, you know, my opinion is as go the cities of this nation, goes the nation. The USCM is that voice of advocacy and wisdom.

It's a pleasure to be joined with them, their Executive Director, Tom Cochran, who's been a good friend for many years of mine personally and of this department. We have the president of the United States Conference of Mayors, Brent Coles, who is serving as president this year.

He's an exciting mayor. He's doing great things in Boise. We went there on a "HUD for the Day" event, where we bring the senior management of the department to the city for a day and we work through the issues that the city has. And I can tell having been there, Boise is doing exciting, exciting things, especially in the area of economic transformation, which is the challenge that many cities are facing and Boise is a leader in that.

We have also with us in person Mayor Anthony Masiello ?? easy name for me to say ?? from Buffalo, New York. New York is my home state, as you know, and Tony's been a great personal friend for many years and it's been an honor to work with him in this capacity.

He's doing great things in the city of Buffalo. There's a vibrancy that is palpable in the city. When you go there you feel the city is building and the city is coming back. What he's done on home ownership is exciting and it's a pleasure to be with him.

We also have 20 mayors ?? 20 or so mayors on the telephone, who will be listening to this event and have local representatives with them and local members of the press.

We have Mayor Lee Brown of Houston, Texas. We have Mayor Donald Plusquellic of Akron, Ohio. I was just with Mayor Plusquellic last week in Akron. Mayor Jim Dailey of Little Rock, Arkansas; I was with Mayor Jim Dailey the week before that in Little Rock, Arkansas. I don't get to keep the frequent flier miles, Tony. We have Mayor Preston Daniels, Des Moines; Mayor Johnson, Jackson, Mississippi; Mayor Robert Bowser, East Orange, New Jersey; Mayor Sarah Bost, Irvington, New Jersey; Mayor Julie Holbrook, Covington, Washington; Mayor James Sheets, Quincy, Massachusetts; Mayor Floyd Adams, Savannah, Georgia; Mayor Dennis Archer, Detroit, Michigan; Mayor Marc Morial, New Orleans; Mayor Fred Hanna, Fayetteville, Arkansas; Mayor Wellington Webb, Denver, Colorado, past president of the Conference of Mayors; and Mayor Chuck Burris, Stone Mountain, Georgia.

Our message is very simple. The mayors are going to deliver a message on behalf of the USCM and the nation's cities. My comments set the context for that.

These past 8 years have been an exciting period for cities across the nation. Most of the indicators in most of the cities show cities literally on the way back. We see cities are on the way back.

Why? Because jobs are going up in cities, unemployment is going down. Wages are going up. Home ownership is going up. First time home ownership in cities is over 50 percent now. Cities have made great, great progress.

The national economy has been roaring back and that's an engine that's been rising the national tide. But cities are on the way back and cities are on the way back because we have had an active, progressive partnership to make that happen. This did not happen by an act of God. The Lord did not say there shall be an urban recovery in the United States, and the cities came back. That's not how it happened.

It happened because you have a great breed of mayor out there who is a professional, pragmatic, they have innovative entrepreneurial ideas, and because we have a partnership with the federal government where we said we will invest in cities once again because it is an investment.

It is not a gift. It is not charity. It is an investment. As goes Boise, goes the nation. As goes Buffalo, goes the nation. And we're going to invest in your city because the better you do, the better we do. And we're going to help you through that economic transformation.

We understand we're going from a manufacturing economy to a high?tech economy and it's not going to happen overnight by osmosis. And we need to retrofit cities and work through the transformation.

So we're going to do that with you together in our economic development programs, the empowerment zone programs, the APIC programs, et cetera.

We understand that home ownership is the foundation of a city. The more people own, the better for the city. And we're going to work with you on home ownership. We understand affordable housing is an issue in this nation. Highest need for affordable housing in history today: 5.4 million families. Highest need in history.

So we had housing programs to work with people who need affordable housing. In that partnership, the cities have thrived and they're making great progress.

The President put forth a budget this year that would then build on that progress; more economic development funding, more home ownership funding, more affordable housing funding. The Senate and the House have now put forth their budgets. Both of their budgets cut the President's proposed budget; the Senate by $1.8 billion, the House by $2.5 billion.

If the House or the Senate bill passes as is, I believe you will lose the progress you have been making in this nation's cities; it's that simple. And if you lose the progress that the cities have been making, you will lose the progress that the nation has been making, period.

You have the highest need for affordable housing in history. Why would you not be funding the affordable housing programs? You're making great strides on home ownership. Why would you not continue the growth? You're making great strides on the economic transformation. Why would you not continue to fund the economic development programs? It makes no sense.

My last point is this. If anything, if anything we should be going the exact opposite direction. You have a unique moment in history. Look where we are. We're stepping into the new millennium. We have the strongest economy in the history of the nation. We have a surplus. We have the most professional mayors the nation has ever had.

Invest in Brent Coles. Invest in Tony Masiello. Invest in Marc Morial. They know what they're doing. They've proven they know what they're doing. Invest in the cities. Make them economic engines and the entire country will do better. Why would you squander this moment? There is no good explanation for it.

I want to thank the mayors for joining us today. I'm confident that the House and the Senate will hear the obvious logic and rationale of our call today.

I want to thank the President of the United States for standing by the nation's cities and by leading the parade to bring back this nation's cities to the place that they should be and that they can be.

I want to thank the United States Conference of Mayors, especially its president, Brent Coles, and Tony Masiello from Buffalo and all the mayors who are on the phones today who are joining in.

I'm now pleased to be able to introduce, here in HUD Washington, a man who we've worked with for many years, we're doing great things with in partnership, following his lead as he is the mayor of the city, he's the captain of our partnership, Mayor Brent Coles.

MAYOR COLES: Thank you, Mr. Secretary. Thank you so much. Thank you, Mr. Secretary, to Mayor Masiello, to the mayors on line, to all of you here today, I do appreciate the opportunity to address this issue.

It is important that the Congress of the United States join us, HUD, the mayors of America in a strong domestic policy and that's what we're asking for. We're asking for their partnership.

So we look at the CDBG Program. Every city in America leverages the CDBG dollars that provide such things in Boise, Idaho, as the Terry Reilly clinic. If we put $1 into that clinic for those who are economically disadvantaged or homeless, put $1 of CDBG in there, there's $6 or $7 more from other agencies, from private nonprofits, from the fund?raising that goes on, from the volunteer work that goes on, $1 six times.

The same thing happens when we go out and provide a place for our homeless to have a place to eat, to have the basic nutrition in life. We put $1 in there; again, $4 or $5 or $6 more come in. That's our CDBG funds.

We reinvest in our neighborhoods. We give the opportunity for revolving funds and we use the flexibility of the block grants so that we can put money in a revolving loan. And people come in and borrow at a very low interest rate and they can remodel their homes. They can paint their homes. Volunteer work, companies providing the paint, neighbors working with neighbors to rebuild, to remodel a home, to fix it up, so that neighborhood now is leveraged upward.

It's that kind of flexibility, it's that kind of program. Last year, we had $4.8 billion. The Senate has put in 4.8 level funding, I guess; in the House, 4.5. We're calling for a $5 billion program. There are many neighborhoods with needs, families with needs, individuals, and we can leverage those dollars.

Likewise, as we look at the housing vouchers, the opportunity for the Section 8 vouchers or what we use in Boise, Idaho. And while the economy is growing, it still leaves many, many people behind that are earning only a minimum income, a basic wage that does not provide them the opportunity to take care of their family's needs without the Section 8 vouchers.

As our economy grows, the value of homes go up, the amount that's being charged in rent goes up, and more and more people, in some cases, are left behind. So we're calling upon the Congress of the United States to restore funding that we've asked for to add another 120,000 vouchers.

That's when we know that there's an additional need of 5.4 to 5.3 million individuals and families who need those vouchers.

The American private investment opportunity, we call it APIC, American Private Investment Companies. We want companies to go into the neighborhoods that have not been brought up by this economy yet, neighborhoods that could be, however; neighborhoods that want to be. But for a company to go in and invest in that neighborhood as opposed to one that's beautiful and a lot of people are there and they know they're going to get a return on investment, they need some assistance.

They need an incentive to move into that neighborhood. And that is what the APIC program does. So we're calling upon Congress and, in fact, in partnership with QUESTION Hastert who very, very strongly supports this program.

The homeless assistance program: We call on the Senate to provide $1.2 billion for homeless assistance programs. This is our continuum of care. This is the opportunity for people who are homeless to get that first job, to have the opportunity to write that first resume, to meet with some counselors, and maybe just have basic food on the table.

There's another initiative that very successfully was started with Secretary Cuomo and the nation's cities and regions and that's our Regional Connections Program. It's one that in Boise, Idaho, with a population of 180,000 in our city, but 450,000 in our region, that's the economic engine.

But for the mayors and county commissioners and state legislators and the governor and all the different districts, highway districts, sewer districts, to work together, the Regional Assistance Program has brought in that incentive, has provided leadership, has provided training. And I call upon the Congress to fund that at $25 million.

The cities of America have identified the brownfield's issue. We want invest in the brownfields within our cities, reinvestment in our cities, but it's very costly. Why not go out and build in the greenfield somewhere, promote urban sprawl? We've done it for years. And the valuable agricultural lands of Idaho and other states are being gobbled up by greenfield development as opposed to brownfield development.

We did our own small survey. There are 38,000 cities in America today. We surveyed 210 of those cities. There were 21,000 brownfield sites in those 210 cities. In the 4.6 ?? we figured there were 400,000 to 600,000 brownfield sites in America today.

Those are the kinds of things that CDBG, partnership with HUD, the strongest domestic policy that we've ever had in the history of the United States of America generates, with the partnership between the nation's mayors, the U.S. Conference of Mayors, the mayors of America and the cities of America, and Housing and Urban Development led by Secretary Cuomo. Thank you very much.

MAYOR MASIELLO: Thank you very much, Mayor Coles, and certainly to Andrew Cuomo, to my colleagues who are listening today, to all of you. It's a pleasure to be with you today at HUD.

I also want to mention that obviously this is a bipartisan press conference. Mayor Coles and many others who are participating here, all of us feel the same way, regardless of our political persuasion, that cities are worth saving.

As a matter of fact, they're not only worth saving, they are being saved. And they're being saved by the tremendous programs put forward by Andrew Cuomo and HUD and his excellent staff. They're being saved because of the excellent support that President Clinton has given these programs.

And also they're being saved because Congress in the past has supported these initiatives financially so that cities can have the wherewithal to help themselves, to uplift themselves, to provide opportunity for everybody in their cities to be great again.

I can tell you that as the mayor of Buffalo, New York, which is not an easy task, that urban centers are getting better. There is momentum. There is a renewed interest and a renewed investment in our cities and in many reasons because of the excellent programs that we're talking about today.

And ladies and gentlemen, let me just tell you a little bit about Buffalo, New York. And I'm not going to get into the poverty levels and everything else. But this morning, in the Buffalo News, a lead article in the Business section was that the upper?end housing sales in Buffalo are going up. Not only is there more demand for upper?end housing, but the selling prices are going up.

Just recently, this city administration, with the help of many people, established two market?rate housing developments, one on the east side of Buffalo, which sold out at an average price of about $170,000. People said it would never happen, never be market?rate housing in Buffalo again. All 40 units sold out.

Just 2 weeks ago, we finished another new market?rate development on the east side of Main Street near the University of Buffalo, near high schools, near grammar schools, near churches and new parks. Guess what. Average price $190,000, all 31 units sold out. That's great.

But also I think it's a more telling story when I can tell you that every year now, we're going to bring online 125 new homes for low? to middle?income people; homes that because of programs that you offer here are giving people at the low? and middle? income bracket an opportunity to own a piece of the rock. They feel good about themselves. They own a home instead of being a renter. And to me, that's very, very important.

And these kinds of programs we're talking about today are the foundation for that transformation.

When you look at home programs and the funding there that we're using for leverage for people below the poverty level, below the 80 percent, these kinds of programs help us create the leverage so that they can have a decent, quality place to live that's affordable.

Even developers, quite frankly, are now using these vouchers to leverage improvements in older buildings and passing those savings on to the renters and, in some case, the owners, so that not only do we as a city get investment in an older building, upgrading it, but also people now have an opportunity to live in that quality particular facility at lower prices.

So ladies and gentlemen, I can tell you that from economic empowerment zones that have been very important for me, especially, and I'm sure my colleagues, to attract business back into our urban centers to brownfield development that Mayor Coles talked about, which is really the foundation for us to resurrect industry and manufacturing, but to stop the exodus to the suburban greenfields which is creating havoc on our environment and our transportation system, to interfaith programs.

As a matter of fact, just this week alone, we used home funds for a ministers' rehab program. We've taken 20 houses and utilizing a combination of home monies, other valuable instruments from the banking institutions, to create rehabbed homes under the ministers' program for their parishioners in neighborhoods throughout the city of Buffalo. First of 20, which we're going to bring online in the next 6 months to a year.

We also announced yesterday the West Side Middle Income Initiative so that we can encourage people not only to be first?time home buyers in a very important neighborhood of our city that is very stable, but also gives them, by folding in home monies and other kinds of banking help and other instruments we have from HUD, to give them the money to rehab that house at the same time so that they can have a new porch or new siding or a paint job or whatever the case may be.

So I guess what I'm here to tell you is these kinds of programs are working. At a time when this country is doing great, when people have more money than they ever imagined, when they have more homes than they ever imagined they would have, it's time for us to continue to support those who, you know, need that kind of help because it's working.

The largesse of this country has never been this great. And I just think it's foolhardy, it's detrimental to our momentum and our growth, if we cut back on these kinds of programs at this particular time that have really uplifted the spirits, the health, and the opportunity, and the hope of many people who live in our cities.

So Andrew, ladies and gentlemen, Mayor Coles, I don't know if this is a good day. I'm a little disappointed, a little down because I don't want to reverse that momentum. Every city, urban area in the Northeast and in this country is coming back. And it's coming back as great partnerships: HUD and these kinds of programs and using these programs that leverage things with a not?for?profit community and the development community and the business community and the religious community.

Why turn our backs on that kind of momentum? Why reverse that trend? Personally, my message to President Clinton is to draw the line in the sand on these particular cuts. And if they're going to continue, then veto them. Thank you.

SECRETARY CUOMO: Thank you very much, Mayor Masiello. Mayor Coles, if you'd like to join me now, we'll open the floor for questions, comments.

QUESTION: The extra CDBG money, that's ?? you're talking about that going specifically into formula grants, right?


QUESTION: It seems like when there's been an increase in the past and the Congress, in final negotiations for CDBG money, a lot of it goes into congressional special projects and it looks like that might happen again this year. Do you have any comment on that?

SECRETARY CUOMO: Yes. We oppose it every year. The CDBG Program works well. CDBG stands for Community Development Block Grant Program, I suppose about 1974, originally by a Republican administration, it's supported by Democratic administrations. It is a bipartisan program. It is a program that everyone will tell you works.

The reason it works is because it is what we call a block grant. It takes federal funding, transfers it to a locality with national goals but the locality actually designs the funding to fit the local need. So we pass the money along to Mayor Masiello and Mayor Coles. We say these are the national goals, clean up the slums, urban blight, affordable housing, et cetera, economic development; but they then make it work for their city.

When you "earmark," which is what the Congress does, they do specific projects from the CDBG formula funding, you do two things. Number one, you reduce the amount of funding that the cities get; and number two, you place a specific purpose on the use of the money that may or may not work for that city.

The brilliance of CDBG is national goals, but Brent Coles, Mayor Masiello, they decide how it's used in Buffalo and Boise. The earmarks do the exact opposite.

Did you have any comment on that?

MAYOR COLES: I would. Absolutely. Flexibility is what we need. Every city is different. Our needs are different. Some have more assets than others in different areas. CDBG gives us flexibility, allows us to go to our commercial markets, our banks, our private enterprise, and flex ?? I was going to say flex our muscle, but it gives us the opportunity to leverage those dollars. And the leverage is much higher where we have the flexibility as opposed to some earmarked project.

MAYOR MASIELLO: But every city's different. You know, leverage is very important, and I mentioned that, and flexibility is very important. And take in Buffalo, New York, we're spending $5 to $6 million a year just in demolitions, just to rid many neighborhoods of very old, abandoned homes and buildings. And we're augmenting that expenditure with block grant monies so that we can get rid of those properties and build new homes and build new neighborhoods.

Also, we use the money, quite frankly, to resurface streets and improve infrastructure so that you can uplift the quality of life in those neighborhoods.

So we need the flexibility and we need the leverage. And I believe, in many cases, we probably have identical problems and, in some situations, we have problems unique to our cities, but don't take that away from us.

QUESTION: Mr. Secretary, there was a promise a couple of years ago to Round Two to empowerment zone communities that they would be getting $100 million over 10 years. So far, that has not come to fruition. What's the prognosis for the future and what will happen if these communities do not get the promised funding?

SECRETARY CUOMO: Well, it's been a priority for the President. It is not in the House budget or the Senate budget as currently written. And it's going to be a priority for the President as we go through the negotiations. It was last year, also, and there was some accommodation made.

I'll say this in front of the mayors. Sometimes the confidence level of local government vis?a?vis the federal government is not the highest. I think it is ?? was that artfully put, Tony, would you say?

MAYOR MASIELLO: Very artfully. We're used to it.

SECRETARY CUOMO: Here are the empowerment zones, the federal government made a promise. They said we will work with you over an extended period of time and in a consistent basis. Why? Because the one thing the cities told us then and will tell you today, you're not going to take care of this overnight.

This is not a 1?year issue. You didn't get here over 1 year and we're not going to remedy this over 1 year. We need a 5?year plan, a 10?year plan, and we need a 5?year partnership or a 10?year partnership, and we need to be able to rely on that. Not that we're partners today, but tomorrow you find a new partner; you're a little fickle maybe. You reevaluate from time to time.

We said we'll be partners and we're with you long term. It's important for the federal government to keep its word, especially in this relationship with cities that in the past has been rocky and especially now when we're doing such great things.

This partnership is working, possibly better than it has ever worked in history, literally. We have had federal urban partnerships before, but they were not as productive as this one is.

We've learned from the past, we listened to the mayors, they are driving the ship, and it's working. Don't go backwards now. Don't cut the funding and certainly don't break your word. Would you like to comment on that?

MAYOR COLES: I'd comment on the leadership side. I mean, the partnership is the strongest it's ever been in the history of our country. And the opportunity for that continuum of care that Secretary Cuomo has established we see that right there in Boise, Idaho.

The River Park neighborhood that Secretary Cuomo came to, people from the homeless shelter to an opportunity to have a place to live, to get their first job, get some income, start paying some rent, then move into a wonderful apartment complex using Section 8 vouchers, to move from there into home ownership, to have some counseling, to have some job skills.

All that opportunity is occurring today in America's cities all over America because it's a comprehensive program led by Secretary Cuomo. Thank you.


SECRETARY CUOMO: That's an Italian word, "ditto."

QUESTION: Just as a follow?up, the second part of my question was what do you think will happen if that funding doesn't materialize? What will happen to those communities?

SECRETARY CUOMO: I don't want to predict. Mayor Masiello said he urges a line in the sand and obviously there is a line in the sand, and we went through this last year. You can have a bill that the President of the United States will not sign, period.

He's said that in the past and he's said that on HUD issues, which is also one of the firsts. We talk about this period in history. I was teasing Tom Cochran the other day, the executive director of the U.S. Conference of Mayors. I said, Tom, you're going in the history books because when they write the history of cities and the relationship of cities to the federal government and the progress of cities, I really believe this period is going to go down as the productive period.

We've had periods of intensity before ?? urban renewal, UDAG grants but this is, in many ways, broader and deeper and more productive.

Part of that ?? there's a lot of it and a lot of reasons why and a lot of the reasons are, frankly, the cities and the mayors because I really do believe the mayors are, just as a class, the best they've ever been. But it's also because you had a President of the United States who cared and a President of the United States who took these issues and put them on the front of the agenda.

Last year, President Clinton said he would veto the spending bill if the HUD issues were not accommodated. I can't think of the last time a president besides Clinton said I'll veto a bill over HUD issues. These issues were never at the top of the agenda. They are with this president. And if this bill from either the House or the Senate is not a satisfactory bill, there will be a line in the sand.

I don't want to draw that line today. I can tell you neither the House nor the Senate bill as written today is acceptable, but I don't want to say what has to be in, what has to be out, what's on one side of the line, or on the other side of the line. But there is a line, make no mistake.

MAYOR MASIELLO: Yes, but I want to answer that because I think that's the best question of the day. And thanks, Andrew, for putting me in the top ?? one of the top mayors in the top class. That's the first time I've ever been near the top of any class.

I lost my train of thought for a second. That question's important because in Buffalo, New York, we have momentum, but we don't have money. I mean, our tax base is very weak. And like anywhere else, people on the higher end don't want to pay any taxes or don't want to pay more taxes and the people on the lower end don't have the ability to pay taxes.

So what happens? The money we're using in these programs that we leverage with the private sector, what we leverage with banks and not?for?profits and other kinds of developers, we're not going to have the money to do that.

So therefore, we do less demolitions. We do less conversions of older buildings to new uses. We do less of infrastructure work. Many of the programs at the grass roots aren't going to have the money to continue to provide services that help us, you know, in the city. So there is going to be a trickle?down effect that's going to negatively impact that momentum and the quality of life of people in our city.

I wish I could stand here and tell you all things are great in Buffalo, New York. We'll just raise the taxes and pass it on to somebody else, but the fact of the matter is that isn't going to happen because that's the last thing and the worst thing we can do as now we're getting people who never looked at Buffalo before coming back into the city and making decisions to keep their businesses there now instead of going to other parts of the country. They're deciding to buy homes on our waterfront or in our quality neighborhoods.

So those things, all of a sudden, that image and that direction gets reversed.

SECRETARY CUOMO: One more question.

QUESTION: It's a little off the point, but the Senate Appropriations Committee has reiterated that it wants HUD to keep its full?time employees number to 9,100. I mean, is that a sufficient number of workers in the HUD workforce to carry on the mission, do you think?

SECRETARY CUOMO: Well, on the size of the department, we've gone through, as you know, a rigorous reinvention of the department. And I think any objective source will now tell you that the department is working better than it has worked, period. Not that we are perfect yet, not that we have reached management nirvana I like to say, but we're doing very, very well.

I believe 9,300 is the optimum number for the department and we're going to have a discussion with both the Senate and the House about that number, but 9,100 is not the optimum number. I believe 9,300 is an optimum number and it's one of the issues on the list.

Thank you very much. I want to thank again Mayor Masiello, Mayor Coles, all the mayors who are on the telephone. Thank you very much, Tom Cochran. Thank you very much.

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