Thank you. First, to Mayor O�Malley who brings that energy and that vigor to his new job. Oh to be young and to be in public service. It is an interesting phenomenon when you�re young and you enter one of these tough jobs of public service. I told the Mayor - he�s 37 years old now. I said I was 39 years old when I took over HUD. That was four years ago. Now I�m 69.

So it�s a very interesting phenomenon. But the Mayor has really brought a fresh look to the City of Baltimore. He�s doing all sorts of exciting things very early on in his term. But he knows what he wants to do. He has a vision. He has a plan to get there. It�s happening. The energy is infectious.

That�s one of the reasons we wanted to be in Baltimore today. Because Baltimore, you mark my words, is going to be a city that demonstrates the possibility of what we can do in a city when you have the right leadership and the right energy. Let�s give him a warm round of applause. Thank you to our host, Mayor O�Malley. (Applause)

I would like to thank Senator Mikulski for coming and kicking off the conference. You heard the Senator. She always tells you exactly where it is and she gives you the right information and the right tone and the right charge. She is the one-two punch with Senator Sarbanes.

Senator Sarbanes has really been a mentor to me. I can tell you the truth now that he�s out of the room. I don�t want him to hear this because I still have to deal with him for the remainder of this term.

But he has been a mentor to me in this job. He was the head of the Senate Committee when I first started as Assistant Secretary seven years ago. The Assistant Secretaries have to be confirmed by the Senate. I went and I saw Senator Sarbanes. He told me more about this business in two short hours than I had known going in. He�s been a constant friend to me personally in the department and to this entire cause for seven years.

Senator Mikulski is the appropriator. Because this does come down to the money at the end. Don�t kid yourself. It comes down to the amount of funding. Between the two of them - Senator Mikulski said they are the one-two punch. They are. They are a knockout punch. You don�t want to be on the wrong side of them. I can tell you that and it�s our honor to have them both as our fighters, Senator Barbara Mikulski and Senator Paul Sarbanes. I want to thank them very much for all they do. (Applause)

I want to thank the HUD team, many of whom are here. You�ve heard from Deputy Secretary Saul Ramirez. You�ll hear from FDA Commissioner Bill Apgar who is in charge of HUD�s senior citizen programs. He�s doing a great job. We have a whole host of Assistant Secretaries here. Assistant Secretary Harold Lucas is here, Public Housing. Assistant Secretary Cardell Cooper, CPD. Elinor Bacon who�s in charge of the Hope VI program. They�re all here. They�re all going to be speaking to you about senior citizen housing.

One of the things we tried to do with the Department is make it speak as one. Because none of these issues are really independent issues. When you�re talking about seniors, you�re also talking about public housing. You�re also talking about community development. You�re also talking about support services.

So the fragmentation, if you will, the cylinder approach to doing these things really didn�t work. One of the things the Mayor�s working on doing in the city is bringing all the services, all the resources to bear, and targeting areas. That�s what we�ve tried to do at HUD.

If you look at HUD over the past four years, it is a much different department than we started with for the better. We did the management work that we had to do. We said honestly four years ago that before we can actually build housing or help you build housing, we had to get our own house in order. We went through the most massive reorganization in the history of the department.

Those of us who are in the construction business would say this was not a rehab. This was a knock down. It was a tear down. We started literally from ground zero with HUD for new vision on how to do these things as we were approach the new millennium. We did the organization work. Then we�ve done more program work in every program area right across the department to get us to the point where we are today.

You talk about community planning and development. We�ve done $6 billion in economic development lending. We had been out of that business. We had the old UDAG program. But when President Clinton took office, there was no real substantive economic development program at HUD.

We�ve now done $6 billion in lending, loans that private banks wouldn�t make, not one dollar in default called on HUD�s accounts in $6 billion of lending.

The Empowerment Zone program brings that same targeted approach and is working very well.

Public housing is a success story in and of itself. The Hope VI program. 100,000 units of failed high-rises will come down. They should have never been built in the first place. I don�t know what they were thinking 30 years ago when they said let�s take a lot of poor people and we�ll put them all in one building on side of town and then we�ll leave them there and we�ll see what happens.

I�ll tell you what happens. You make a bad situation worse. It�s called ghetto-ization. It�s called segregation. It�s called discrimination. It�s called isolation.

That�s what we did in some places in public housing. It took us a while. But we said we�re going to go back. We�ve going to tear down those buildings that should never have been built and we�re going to build communities instead of building institutions.

We�ve going to treat people like people. We�re going to give people something of quality and respect. They will return in kind what you give them.

When you put them in a bunker with bars on the window, the statement you�re basically making is I don�t want you near me and I�m going to put you in this building and lock you up to make sure you stay away from me. Don�t be surprised when they respond in kind.

The Hope VI program is taking down the failures and building communities in their place. It�s working extraordinarily well. We have the Consolidated Planning process where we�ve now gone high tech on software. We have the best budget in over 12 years.

Because at the end of the day, you do need the funding to make these things happen. You can talk yourself to death. It doesn�t pay a mortgage. You can talk all you want, but it doesn�t get you the financing from the bank. The budget is what it�s about.

Fundamentally, we are representing people who don�t have power. If they did, they wouldn�t need us. Because if they had power by definition, they wouldn�t be poor. Poverty is a state of powerlessness and voicelessness.

One of the main things we need to do as their advocates, be you the Secretary of Housing and Urban Development or running a not for profit is to speak for them and represent them and make sure that they are not lost in the process to the more powerful interests. When they�re doing the budget or when they�re doing legislation or when they�re doing siting, to say don�t forget my people.

Just because they can�t make campaign contributions, don�t forget my people. Just because they don�t vote in the numbers that you would like them to vote, don�t forget my people. Just because they don�t have a lobbyist who�s walking around the halls of Congress making sure they get their votes, don�t forget my people.

When you stand up and speak, you speak not for yourself. You speak for the thousands who are not speaking. So make sure your voice has that timber. Make sure you project that energy. Because that�s what it�s really all about in the final analysis.

Today where we sit, we have a new HUD. We�re in business. We have a great state of the nation, the strongest economy in history, most economists would say. 22 million new jobs. Crime is down, poverty is down, welfare is down. The homeownership rate is at its highest point in history, 67 percent.

But that is not to say with all this good news that we don�t have needs. We do have needs. As you heard, one of them is that we are getting older as a society.

The average life span if you were born at the turn of the century, they expected you to live to 47 years old. Today they expect you to live to 76. By the year 2030, you will have doubled the number of seniors. By the year 2050, those who are 85 plus will go from four million to 20 million.

So really there is a demographic wave that is going to break. It is a need that we must address and one that we must get ahead of.

Now, we know how to do this. We know how to build senior citizen housing. We do it extraordinarily well. We know the basic approach. The basic approach is that we, as in HUD, the federal government, do not do this. We the collective does it together. We reach out to our not for profit brothers and sisters who are in a much better position than government to actually build and operate.

We reach out to our not-for-profits in the faith based community. Catholic Charities, B�nai B�rith, Lutheran Services. We have a beautiful alliance of faith based organizations all across this country working with government to solve this problem. We reach out to our friends in the provide section and say, look, if you can make a living, if you can make a profit in the private sector by serving the seniors and doing assisted living and you can do it in concert with government and you�ll do it for the low income, God bless you.

But we leave it to the not-for-profits and we leave it to the private sector to actually build and operate. But government then winds up the source that covers the gap. Because someone has to cover the financial gap between what the senior can afford and what it costs to operate. That�s where government comes in.

We have two refinements to the relationship that we�ve made. One is, again, as we did with the overall department, as we did with the homeless programs, don�t see these as fragmented, isolated functions.

See them as a continuum. We call it the Continuum of Care. That when you�re talking about a senior, there are phases to that senior�s life. And rather than doing it in snapshots, see it as an ongoing movie.

The first step is working to keep that senior in that senior�s home. That is job one. Not to take them out of the home and give them a place to live. Keep them in their own home.

The second step is if they can�t stay in their home, can they move in with their family? If they can�t move in with their family, they don�t have an extended family who can take them, well, then senior housing. Then as the health needs increase, assisted living. Then ultimately a medical facility. But that is the sequencing of events. See it as a continuum and address it as a continuum.

We have the Housing Security Plan which we announced last year which does just this. Starting from the reverse mortgage program, the HCM program, which will get a senior equity that they need to live from the home which has been working extraordinarily well. We put out a report today that says the program has quadrupled over the past seven years. And 75 percent of the people who have used the HCM program are either satisfied or very satisfied with it.

We�ve allowed the Section 202 program to new be used to convert facilities to assisted living facilities. Because many of these buildings, as Senator Mikulski pointed out, are older and people are getting older in the building. Naturally occurring retirement communities. Now they need services and we work to make that an eligible cost under 202. Using Section 8 vouchers to pay for an assisted living facility. We did that as part of the housing security plan. We need more funding and we want to increase it from $710 million to $780 million.

The second refinement that we want to make, something that Senator Sarbanes is working on, something that we�re very excited about, is putting the HUD programs together with the HHS programs.

Because if you believe in this comprehensive approach and if you believe in the continuums, and if you believe in putting together the programs at HUD, well, then by definition the extensions is you believe in putting together initiatives and programs among departments. Empowerment zones say let�s change our paradigm. We�ve trying to do community redevelopment which means we need economic development. We need community development and we need physical development. We need all of them working as one.

Well, when we�re talking about a senior, we�re talking about housing and health are. What sense does it make to have HHS doing its health care programs divorced from HUD? HUD doing its housing programs divorced from the health care? Asking you to somehow figure out how to put the pieces together of the jigsaw puzzle to come up with a financing and operating plan that actually works.

Everyone wants to talk about comprehensive, integrated, holistic, one stop shopping. HUD, why don�t you try it on the federal lever with your partner HHS? If we can�t make the marriage on the federal level, how do we expect you to make the marriage on the local level? That�s what we�re going to do this year. (Applause)

We have $50 million that we�re going to put forward to do this approach, coupling with HHS. Commissioner Apgar�s going to talk to you about it in detail. But more than the $50 million, I am interested in developing that model, that template. So that we can then have a program that takes those very rich funding streams at HHS.

Make no mistake. Secretary Donna Shalala is a great colleague of mine. I enjoy working with her. But more, I like them for their money at HHS. They have Medicaid. They have Medicare. Those are very rich funding streams. If we can put them together with 202, together with Section 8 vouchers, we�re really talking about something.

One of the other issues that we have to address when we�re talking about addressing the senior population is this issue of predatory lending. You�ve heard about it from Senator Mikulski. You�ve heard about it from Senator Sarbanes.

This is not a lending issue. People who do predatory lending are not lenders. Predatory lending is a bad term, because it suggests that these lenders are bona fide lenders. These are not lenders. No bona fide lender, no mortgage banker, no mortgage broker, would do these things. These are not predatory lenders. These are con men and women. These are just bad actors. They prey on seniors.

Now that the real estate economy is so strong and people have equity in their homes, they now see a big cash sign attached to the senior citizen. You have people who are literally preying on them. We�re doing hearings all across the country. The stories are unbelievable.

We did a hearing in Los Angeles. A senior citizen went and got a home improvement loan for $34,000. She signed the papers, didn�t realize that at the end of five years, not only did she have a balloon, but she had agreed to give up 55 percent of the equity in her home. She just didn�t read it in the fine print.

These cases are all across the country. We�re going to do something about it in Washington, but we have to do something about it community by community also.

Then the bottom line is where I started. The last point is the first point. Senator Mikulski said this in describing the appropriation process. The appropriations process is coming. Those two bright lights at the back of the room could look like an 18-wheeler or it could look like the appropriations process.

We have to say to this appropriations process that, look. We have an tremendous need in this nation to resolve this issue. There are 1.2 millions seniors who have what�s called worst case housing needs. Live in substandard housing or pay more than 50 percent of their income for rent, 1.2 million.

There are 5.4 million American households who need affordable housing, 5.4 million. The highest number in history. Today as we sit here. Why? Because the economy is so hot it�s driving up the rents. If you�re on a fixed income or the bottom of the income scale, you can�t reach the rent.

What are we doing about it? What are we doing about it? The need of affordable housing is going up. The number of seniors who need affordable housing is going up. The number of seniors who need health care and affordable housing is going up. We�re not bringing the resources to bear. There is no excuse for it. There is no excuse.

If we make the case, if we stand up and fight this fight, we will win because we are right. They have no defense. What are they going to say? That we don�t know how to build senior housing? I�ll call each and every one of the people in this room as a witness. We have 30, 40, 50 years of experience building senior citizen housing and it works.

We have tours all across the nation in assisted living facilities all across the nation that are good neighbors, that are doing their job, that are doing it economically and doing it effectively. Don�t tell me we don�t know how to do it. That we don�t have the need.

Look at the numbers. Are they going to tell us that we can�t afford to do it now? They tried that for a lot of years, but it doesn�t work anymore. Because you do have the strongest economy in history. You have the greatest surplus in history. If you have the money to talk about a tax cut, you have the money to talk about more senior citizen housing. (Applause)

That is the case we have to make. It is fundamentally right to do. Honor thy father and mother. Remember the values of society. Remember what success is really all about.

It�s not just about a Dow Jones stock market that hits a new high that makes more millionaires at the top end, so that we�ve now gotten to the point where we have more polarized wealth than at any time in history. One percent of the population own 40 percent of the wealth.

That is not success. That�s not why we�re proud to be Americans. That�s not what made this country great. Good bless American. A few of us have made a ton of money. What a beautiful country.

That�s not what we said. We said community. We said interconnection. We said interrelation. We said strong enough to use words like love and care and compassion. That was success. Not to celebrate 67 percent highest home ownership rate without saying in the same breath you still have 600,000 Americans who are homeless today. That you are not a success as a Housing Secretary when you hit 67 percent and you have men, women and children sleeping on the street. That is not a success.

Because we are better than that as a country. We are better than that as a people. We set the bar higher. We want a more inclusive, more giving, more charitable, more equitable place.

If we can�t take care of our seniors, then we can�t do anything. Literally, they are the people who built this nation. We stand on their shoulders. If we don�t show them the pride and dignity that they deserve, if we don�t show them the respect and gratitude that they deserve, can any of us in this room or in this nation really say that we�ve met our obligations?

Thank you and God bless.