Remarks by HUD Secretary Andrew Cuomo,
Partnership with U.S. Conference of Mayors and
and Vice President Al Gore
National Association Of Home Builders
To Build One Million New Homes in Cities
Thursday, February 4, 1999
SECRETARY CUOMO: Thank you very much. Thank you Mayor Schmoke, but also thank you for what you've done for the city of Baltimore. What this nation needed more than anything else was a real-life example of what could happen in a city, that a city actually could turn around that is in decline and become an integral part of the future. The city of Baltimore is a shining example of what can be and that's because of Mayor Schmoke, and your stewardship, thank you very much. Congressman Vento is here. Many friends of the Conference of Mayors, Gene Lowe who is representing the Conference of Mayors, Mr. Vice President, and President Charles Ruma, the National Association of Home Builders.
We had a great, great year 1998 as Charlie said. Every number broke records: new starts, homeownership rate, right across the board. And we had a great year at HUD also, best budget ever, turned it around. But the way we made it work was by joining hands and coming together. I can't tell you how helpful the home builders were to HUD in every facet of the agenda. From public housing to the homeless, to FHA, to the homeownership programs by and large. And that partnership is what worked. Putting out our hands and saying, "Let's do this and let's do it together." It was a winning formula last year, it will be a winning formula. Thank you very much, President Ruma.
Today's announcement really does break new ground. We understand the situation that we face as a nation in terms of development. We have two pressures. On the one hand we have to stop consuming our planet. We're devouring 7,000 acres per week, 1,000 acres per day. We've gotten to the edge of the envelope in terms of development. You can't continue to build out and out, that is clear, you have environmental consequences. The cost of the quality of life is clear, we have to stop sprawl. That's the first point.
But the second point which is equally clear is that it is not an option to stop building. It would be economic death, it would be a practical impossibility. We are 1.3 million households that form each year in this nation that need housing. So we have to do both, and that's the Vice President's vision. It's not either or, it's both. We can't stop building, but we can't continue sprawl either. So it's time to get smart and the way we get smart is by growing smart. Don't continue to build out and out in concentric circles, rebuild the core. Don't spoil more ground from the green fields, clean the brownfields. Don't develop new, rebuild the old. Do a U-turn on the development highway and let's rebuild our cities.
They are there to be rebuilt. They have the infrastructure, they have the roads, they have the water and sewer, they have every thing you need to rebuild. They just need the infusion of capital, and they need the kinds of partnerships that can make it happen, that's the goal, smart growth building back in older areas. But to do it we have to think outside of the box, it's not the way we have been doing business for many years. It's not the pattern of settlement that we have followed for many years. It's not the partnerships that are natural to us. We have to form new alliances, cities and counties, mayors and county executives working together, public and private, regulators and builders figuring out how to overcome the obstacles, because there is no doubt that it's easier said than done. We have to break the old mold and form a new one, that's what we do today. That's what the Vice President has been talking about, the livability, let's look ahead.
Understand where we have to get and figure out new ways to get there, that's what today is all about. There are barriers to building in cities. Let's identity them, let's overcome them. If it's financing obstacles, if it's insurance obstacles, if it's discrimination, if it's zoning, if it's building codes, whatever it is, let's find out what are those obstacles that are impeding growth in cities. Put them on the table, address them together, that's what it's all about.
It is the Vice President's vision of buildability, and it's good for the economy. The home building industry is about 20 percent of the GDP by some estimates. It is the best urban policy. You give Mayor Schmoke a strong tax base, he'll take care of the rest. You get him a city of homeowners, he'll take care of the rest. It's the best community development policy; give the community ownership, that stake, that investment and you'll see the benefit, and it's the best family policy. Because homeownership really is the American dream. And getting more people into homeownership makes that dream a reality for more and more, so it's a win, win, win. . . . I can't tell you how excited I am to be part of it. A living testament to the intelligence of it is the person who I have the pleasure of introducing, Ms. Michelle Speaks � who is going to introduce the Vice President � who is investing in the city of Baltimore, who is buying her own home in the city, close to work, higher quality of life, smarter growth, a smarter life. Thank you very much. Ms. Speaks.
MS. SPEAKS: Thank you, Secretary Cuomo. It's an honor to be here with you, Mayor Schmoke, and Vice President Al Gore. I was invited here today because I recently purchased a house in Spicer Run which is located in Baltimore city. My daughter is here with me briefly. I purchased the house at Spicer Run because I believe Baltimore to be a very livable city. I have lived there for about six years now, my daughter is educated there, I work at the University of Baltimore, we worship in the city . . . . Spicer Run represented to me one of the few opportunities in Baltimore city to buy middle income housing which I had been looking for quite a while. There [were many] lower income units going up, [and many] that were far beyond our reach as a family, so we're just so excited to be able to purchase into this [affordable] development. The opportunity to live in the city and to work, to be able to commute without spending 25 minutes to an hour is just remarkable. That's why I'm excited, that's why we're here, and I'm just so happy to be here to introduce someone who is working very, very hard to make these opportunities for more people like my family in this country. I'm very, very happy to introduce to you today our Vice President of the United States, Al Gore.
VICE PRESIDENT GORE: Thank you for the warm welcome and, Michelle, thank you for your very eloquent words of introduction. I enjoyed visiting with you and your daughter earlier and I signed a little message to make sure that she gets off from school today.
It's always great to be with my friend and colleague in the President's Cabinet, Secretary Andrew Cuomo. I'm going to say a few more words about him in a just a moment, as I will about my friend there, Kurt Schmoke who is the great Mayor of the city of Baltimore. And Charles Ruma, thank you very much for this occasion, for the initiatives that the Home Builders are taking, partnerships with the Conference of Mayors and our Administration. It will be my great honor to announce this break-through in just a few moments, but I wanted to acknowledge your leadership. We had a great meeting earlier, incidentally. First of all ourselves, and then the best of the top leadership of the organization. I really do look forward to this partnership.
I want to acknowledge Congressman Bruce Vento, and also Congressman Earl Blumenauer. The two of them have been wonderful leaders in helping to advance our thinking in America, sensible policies, I'm certainly glad that you're here. Bill Apgar is here, the Assistant Secretary for Housing at the Department of Housing and Urban Development. And my colleagues in The White House including Lynn Cutler and also David Beyer my domestic policy adviser, and Julian Potter who works on the empowerment zones and enterprise communities. And to the other officers of this organization, Bruce Smith and Gary Garczynski and Tom Downs and my long-time friend, Tom Hipple, who does such a good job for you. And I want to acknowledge in that sense your Vice President, Bob Mitchell. Vice Presidents sometimes get over looked and I wanted to make sure I mentioned Bob's name. He's from Baltimore.
Anyway, now in your system, the Home Builders, if I understand correctly the Vice President more or less automatically becomes the next President, is that right? Now how does that system work for you? Just doing a little research here. I actually received a letter two weeks ago from an eight year old boy, from Bruce Vento's home state of Minnesota, and it included the following sentence, �You are the greatest Vice President of my time.� It's something to think about. Although I always remember the words of Woodrow Wilson's Vice President, Thomas Riley Marshall who told the story of the two brothers: one went to the city and became Vice President, neither was ever heard from ever again.
I want to say that I am truly proud to have a chance to serve with one of the finest Cabinet Secretaries that I have ever known and that our country has ever had. There has been no harder working Secretary of Housing and Urban Development than Andrew Cuomo. And I want to pay tribute to him because for years critics of America's cities were able to discredit investment in urban America in part by simply discrediting HUD. And under Secretary Cuomo's leadership, and with his energy and drive and imagination, this agency that was a symbol of bad Government in the 1980's is now a model of re-invention. I want to thank Andrew Cuomo for his hard work.
We are truly living in a golden age of homeownership in America. Some of you in the Home Builders have heard me say in times past that I used to be a home builder for a few years and Tipper and I earned our nest egg, so to speak, after I came back from Vietnam, by developing a small subdivision and building a few homes and then selling the rest of the lots to those who built their own homes or found other contractors to build them. And I learned the hard way what the increase in interest rates in 1975 meant for home builders. There may be a few survivors from that era � I am not one; those were tough times.
We have tried to keep interest rates low, and we followed a policy of physical investments in the future, and opening the markets for our goods overseas � partly because we have found that's a good formula for having job creation and low inflation � and therefore low interest rates � and more home building, all at the same time. But every time I hear the statistics about all the records that have been set in the past six years, with the highest rate of private homeownership in history and highest rate of home building, I think there ought to be a little stamp at the bottom that reads, �Proudly brought to you by the National Association of Home Builders,� because you all have done the work. Homeownership truly is the American dream, you are the ones who put the brick and mortar on the dream, and so I do thank you on behalf of a grateful nation and on behalf of millions and millions of American families that are stronger and more stable and closer in the pursuit of the American dream because they have an affordable, secure home.
We also know that this success would not have been possible without partners at the state and local level. Today we are joined by one of the very best. Mayor Kurt Schmoke took over a city that many people thought was on the decline, and instead made it a shining example of what is possible. Mayor, I know I speak for all of us when I say we're going to miss you a great deal, we will never forget your achievements in this position, and we look forward to working with you in the future. Thank you for your great leadership.
Six years ago if you had said that Americans today would have the highest homeownership rate in history and the highest six year rise in homeownership in history; the highest level of Hispanic and African American homeownership in history; and the highest rate of new construction jobs since Harry Truman was in the White House, most people would not have believed you. But then there aren't too many people who would have believed that in six year's time we would be able to take the largest budget deficit in history and turn it into the largest budget surplus in history, but we have, and intend to continue on that path.
Together we knew that fiscal discipline was the surest path to increase homeownership. Today I'm proud to say that with your help, five days ago the Clinton/Gore Administration submitted another balanced budget that will help interest rates continue to be low and housing starts continue to be high, well into the 21st century. But we know very well that this partnership is about a lot more than statistics and numbers. We're not just building homes, we're building communities. And I appreciated Michelle's words which reminded us of what it really means in the real world to have a good home. A friend of mine who owns a grocery store in inner city Richmond likes to put it this way. Our goal isn't just to build more neighborhoods, our goal is to put the neighbor back in the hood.
And there is nowhere that progress is being felt more than in America's cities. As a nation we not only have the highest budget surplus ever, we now officially have the longest and strongest peace-time economic expansion in American history. For the first time in a generation, our central cities and distressed rural areas are actually sharing in that prosperity. In good times of the past, these areas were often left behind. I was proud to see that in the latest round of homeownership accomplishments, for the first time in recorded history, more families own their own homes then rent in America's cities. That means a more stable foundation to help carry America's cities and America's economy on into the 21st century.
But, of course, we have more work to do. You�ve heard that phrase �a revolution of rising expectations.� Well, when we make progress, ironically, we find it easier to see how much more progress we need to make. The fact that a little more than, that a little more than half of all families in American cities own their homes means that while more than half own, nearly half do not. We cannot see them as renters, to us they are future home buyers and we have to work together to make them home buyers and to turn that goal into a reality, to transform their dreams into a reality. For our part we know that Government does not build houses, we don't sell houses, but we can work to create the strong foundation that our central cities need to attract more homeowners.
One thing we've learned over the past 30 years is that we cannot look at a community as simply the sum of its parts, it's more than that. And every part of the community has to be strong in order for the community itself to live and breathe. I've often referred to a theory made popular by Professor James Q. Wilson and referred to by the catch phrase, �broken windows theory,� which Mayor Schmoke knows very well. If a potential criminal walks into a neighborhood and sees broken windows and litter on the sidewalks and graffiti on the walls, and a sense of general disorder, the unspoken but powerful message is that if you're looking for a place to do the crime, this might be just the place, because obviously you tolerate disorder.
If on the other hand if the windows are fixed and the litter is picked up and the graffiti is removed, and there is a web of community, of parents, and the general sense of order, then the message is, �Don't even think about committing a crime here.� The message is unspoken and very powerful. You might want to make a life here, you might want to raise a family here. This might be a real good place for you to live, and then that community truly comes to life.
It's not enough to have safe streets without good schools and without affordable housing. But you can't have those without jobs and businesses, it all fits together. And that's why over the past six years in our community empowerment agenda has focused on giving people the tools they need to build strong communities on all fronts; initiatives like empowerment zones and community development banks. We're working to get start-up capital into the hands of small businesses that need it most. We're especially proud of the fact that of the more than one trillion dollars in private sector financial commitments that have been made to distressed communities under the Community Reinvestment Act, more than 95 percent of them have been made sense 1992.
Through our community policing initiative we are well on the way to putting 100,000 additional community police officers on the street. That has helped to produce the largest drop in violent crime in more than two decades, with crime in every category falling dramatically in each of the last six years. And last year we made our first down-payment on 100,000 new teachers for our schools to reduce our classroom size. And part of this year's budget we are asking Congress to finish the job and work with us to rebuild and modernize 5,000 new schools. We're making new efforts to move people from welfare to work.
We have even proposed new funding to help America's cities build more parks and green spaces where parents can play with their children in safety. But perhaps the most important piece of the puzzle, if we are going to bring America's communities back to life, is to have affordable market-rate homes inside cities.
An environmentalist friend of mine who normally talks about the ecology and is familiar with the term "indicator species." You know, how some species will be important not only in its own right, but also the causes, an indication of the general health or decline of the entire ecological system. He put it in an interesting way, he said, the indicator species of a healthy city is the pedestrian. If you don't see any pedestrians downtown at night then you know there are not any homes in the city. You know that the city is not living and breathing throughout the 24 hour day. Well, we've got to build homes in cities and in all parts of communities. And when I say we, what I really mean is that we in Government at all levels need to provide the environment and/or the context in which all builders can profitably build homes. We need to remove those barriers and let you get on with what you do best. Together we have built a strong foundation for growth in America's cities and we have now set the stage for a whole new generation of homeowners.
And so today I'm very proud to announce that we're building on that foundation and taking the housing partnership that has brought America so much success one step further. Today I am proud to announce that the National Association of Home Builders and the U.S. Conference of Mayors are coming together with the Department of Housing and Urban Development to commit themselves to the goal of building one million new homes in America's central cities over the next 10 years. This is important, and let me make it clear that that commitment is on top of the 250,000 new homes that are already being built in America's central cities each year. So it's really a quantum leap forward.
As part of this agreement the National Association of Home Builders will work with its more than 800 state and local home builder associations to encourage them to work with communities to build homes in our inner cities. This is a partnership of truly livable communities, and smart growth with more homes, more growth in a smart pattern, and the kind of future that families really want for their children and grandchildren. Also, as part of this agreement the Conference of Mayors will encourage its members to work with HUD and the NAHB to identify and remove barriers in the private sector for new home production. And we are serious about this task. This dialogue and partnership will be a real one, we will work together, and we will succeed. And HUD will provide the community builders to assist Mayors, community folks, to assist Mayors and home builders in bringing agencies together in identifying new Federal resources.
I'm also proud to announce that this partnership is also working together to create a new Council on Building Homes in America's Cities. This council will be based at the U.S. Conference of Mayors and will develop a detailed plan for achieving the goal of a million homes over the next 10 years in our central cities.
Ladies and gentleman, in closing let me say that we're counting on all of you to make it happen. For more than 200 years homeownership has been the cornerstone of the American dream. What some are calling the best economy in the history of our nation, we have it within our power to make sure that the American dream reaches even more corners of America. If we can't do this when our economy is at its peak, when can we do it? Now is the time. We are the ones to make it happen, that is the goal. And working together we will turn that goal into a reality.
Thank you very much.
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