Prepared Remarks for Secretary of Housing and Urban Development Shaun Donovan at the National Conference of Black Mayors Summit
Thank you for welcoming me here today.
I especially want to thank and recognize the National Conference of Black Mayors President, the Honorable Heather Hudson, the mayor of Greenville, Mississippi; and Executive Director Vanessa Williams.
I also want to recognize Mayor Ray Nagin of New Orleans and Mayor Shirley Franklin of Atlanta.
First of all, I want to say that the mayors comprising the Conference of Black Mayors do vitally important work on the ground as elected officials to ensure that American families lead fulfilling and stable lives in vibrant communities.
While we are without a doubt in a housing crisis, I believe strongly that in crisis, there is great opportunity, and this crisis gives us the opportunity to think together about what this crisis can offer us and where we can go from here.
Today I'd like to talk to you about the short term: HUD's role in the Recovery Act, as well as HUD's leadership in the Housing Plan. And I'd like to talk to you about the future: how HUD will rise to the challenges of our world today and form a dynamic, responsive partnership with state and local government. I'll share with you the vision I have for achieving that partnership and how I see HUD turning our current crisis into a real opportunity for growth, innovation, and reform.
First of all, I want to emphasize that HUD's work to address the housing crisis in the short term is one leg of the three-legged stool that comprises the President's comprehensive plan to address this economic crisis. I view these three legs- the Recovery Act, the Housing Affordability and Stability Plan, and Secretary Geithner's Financial Stability Plan- as inextricably linked.
The Recovery Act works to increase jobs and promote homeownership; the Financial Stability Plan Secretary Geithner has talked about helps to stabilize the credit markets, also stimulating homeownership; and the Housing Plan is the third leg that helps keep families in their homes, giving them more options to prevent foreclosure.
In terms of housing, the Recovery Act makes a substantial investment- $13.6 billion- in housing and community development programs administered by HUD. These investments in HUD programs will be not just swift, but also effective; they will generate tens of thousands of jobs, modernize homes to make them more energy efficient, and help the families and communities hardest hit by the economic crisis. It's also important to note that within a week of the signing of the Recovery Act, here at HUD we had already allocated 75% of HUD's funding.
The Recovery Act makes significant investments in promoting energy efficiency and creating green jobs. $2.985 billion in Capital Funds will go to public housing agencies and will enable them to undertake energy-efficient modernization projects and make large-scale improvements to public housing developments. By the end of this week actually, HUD will have signed contracts with every public housing agency in the country to use these funds and put them to work to improve energy efficiency, modernize, and create new jobs.
To advance energy efficiency, HUD has formed an exciting new partnership with the Department of Energy that will streamline and better coordinate federal weatherization efforts to make it much easier for families to weatherize their homes and spur a new home energy efficiency industry that could create tens of thousands of jobs. Working together, our two departments will coordinate our efforts under the Recovery Act to ensure that Recovery Act funds help build a home energy efficiency industry in the U.S. Additionally, $510 million will be invested in modernizing and renovating housing maintained by Native American housing programs and $100 million will be invested in lead-based paint hazard reduction.
The Recovery Act will also help state and local agencies unstick developments frozen by locked tax credit markets, accelerate shovel-ready community development and affordable housing projects, and bridge long-standing funding gaps in our programs. $2.25 billion will also be invested in a special allocation of HOME funds to accelerate the production and preservation of tens of thousands of units funded by the low income housing tax credit. And $2 billion will be invested in full 12 month funding for Section 8 project-based housing contracts.
I'd also like to say that in the face of an economic downturn, housing vouchers are a very effective tool that help very low-income families, the elderly, and the disabled afford decent, safe, and sanitary housing in the private market. While we need to work to improve the program here at HUD and are committed to doing so, they should not be forgotten as we work to fix the housing crisis.
The Recovery Act will also help the communities and families who have borne the brunt of this economic crisis, reviving imperiled neighborhoods and protecting families from homelessness. First of all, $1.5 billion will be allocated to the emergency shelter grant program to try and prevent homelessness in the most extreme cases of foreclosures. HUD is also allocating nearly $1 billion to state and local governments through the Community Block Grant Program. This will enable your membership to invest in rehabilitating affordable housing and improve public facilities, helping to stabilize communities and create jobs locally.
$2 billion are also going to into the Neighborhood Stabilization Program. These funds will help mitigate the impact of foreclosures through the purchase and rehabilitation of foreclosed, vacant properties in order to create more affordable housing and renew neighborhoods devastated by the economic crisis.
The Recovery Act provides a series of challenges to HUD and our partners like you: to obligate and spend resources quickly and effectively; to adhere to the highest levels of transparency and accountability; and to use this Act as a vehicle to both streamline and simplify our programs, as well as lay the groundwork for new markets and new ways of doing business.
The Recovery Act will work in concert with the President's Housing Plan, which is critical to the health of our nation's housing market and to the ability of American families to stay in their homes.
I know that you understand the severity of the foreclosure crisis, but let's make clear how serious the problem has become. Realtors note that 45 percent of sales in December 2008 were distressed sales. Fourth quarter 2008 Mortgage Bankers Association shows that nationally, 6.3% of mortgages are in foreclosure or 90 days or more delinquent. RealtyTrac data shows three metro areas approaching 10% of total housing units in foreclosure at the end of 2008: Stockton, CA at 9.5%, Las Vegas, NV at 8.9%, and Riverside/ San Bernardino, CA at 8.0%.
While the entire nation and every neighborhood is dealing with this crisis, the African American community in particular is experiencing record foreclosure numbers. During the early part of this decade, African Americans became home owners in record numbers. People who previously thought they were locked out of the housing market found themselves living the American Dream.
However, misleading lending tools, along with high unemployment rates, have stripped away the American dream for many African American families. No one will argue that the housing crisis impacts the African American community in a particularly onerous way. According to a report issued by Moody's/Economy.com in February, housing prices have fallen in about 70 percent of all metro areas over the past several years. This is where the majority of African American homeowners reside. Also, the Center for Responsible Lending indicates that the costs of subprime foreclosures fall heavily on African American and Latino homeowners, since subprime mortgages were disproportionately made in communities of color.
In order to boldly and swiftly arrest this downward spiral, particularly for African American families, the Housing Plan will make help available to as many as 7 to 9 million homeowners who are fighting hard to make their payments and stay in their homes. The plan will not provide money to speculators. It will target support to the working homeowners who have made every possible effort to stay current on their mortgage payments. The Housing Plan will support a recovery in the housing market and ensure that these workers can continue paying off their mortgages.
There are three major planks to the plan that I'd like to share with you. We will protect housing opportunities for all Americans with a $200 billion boost in our financial commitment to Fannie Mae and Freddie Mac. We will also commit up to $75 billion to help an additional 3 to 4 million homeowners who are at risk of foreclosure modify their unaffordable mortgages into affordable ones. And finally, through new guidelines for refinancing at Fannie Mae and Freddie Mac, we will offer assistance to as many as 4 to 5 million homeowners who can't otherwise take advantage of today's historically low mortgage interest rates.
It is important to also stress that implementation of both the Recovery Bill and the Housing Plan will require a multi-jurisdictional response and collaboration between HUD and our local partners on the ground, including your membership at the city level. The President has set a tone of collaboration, and I will promote the same collaboration here at HUD.
At HUD, we are increasing our collaboration with other federal agencies on these critical issues, and I hope to see the same collaborative response from all of you here. Our strong partnership will also involve HUD coming to you in your communities across the country. Currently, we are in the beginning stages of planning three regional conferences around the implementation of the Recovery Plan. We will share best practices, serve as a resource, and collaborate on implementation.
While both the Recovery Act and the Housing Plan are positive steps forward, you and I both know that further legislation will need to be implemented down the road and that these two plans are not the be-all, end-all solution to the challenges we are facing. I will need your help going forward to make sure that future reforms make it through Congress.
In the face of an economic crisis, a foreclosure crisis, and a national housing finance system that demands repair, HUD will rise to these challenge, and reaffirm our commitment to making quality housing possible for ALL Americans. Again, we must view these crises as opportunities to grow, innovate, and reform.
Our mission and vision for the future at HUD encompasses working to: catalyze the market for energy-efficient homes; develop communities that are livable, walkable, and sustainable; plan with housing and transportation in mind, giving families the choice to live closer to where they work and cut transportation costs; and create a geography of opportunity for all Americans.
I'm very happy to say that I have asked Ron Sims to be Deputy Secretary. Ron is the county executive of the 13th largest county in this country, King County, which includes Seattle, Washington, who has been one of the great leaders, nationally, in his effort, of linking housing, zoning, transportation. He will lead the new Office of Sustainability here at HUD and help us generally look forward to the future.
As we strive to achieve our mission, we will be a center of governmental reform and renewal in the Administration. Specifically, we have to remember that at the heart of the mortgage crisis was a substantial failure of the nation's regulatory system to identify predatory lending schemes before they got a foothold in communities. Even as dust settles on today's crisis, HUD, along with the Administration, is committed to comprehensive regulatory reform. In the long run, this comprehensive reform should enable local government agencies to more effectively carry out their work.
At HUD, we will invest at an unprecedented level in research and evaluation. We will hold ourselves accountable to a standard that has never been imposed before on the work that we do. And where we don't achieve what we think we should, with our programs, we will change. We will revitalize our policy department and research organization, and we will form broad partnerships with foundations, universities, stakeholders, and state and local agencies and government on the ground.
We will make a commitment together, I hope, to revolutionize the way we measure and evaluate our programs, and to the long-term research for those programs. We have an enormous opportunity at HUD to be more active, engage more and do more, and change the way government does business. But this opportunity will not come again, and we will need and expect your engagement and support on the local level to take advantage of this opportunity and plan for the future. We look forward to working with you.
|Content Archived: February 23, 2017|