Prepared Remarks for Secretary of Housing and Urban Development Shaun Donovan at the National Low Income Housing Coalition 2009 Annual Policy Conference and Lobby Day

Washington, DC
Tuesday, April 21st, 2009

Thank you so much. It's great to be here and it's an honor to address the National Low Income Housing Coalition on your annual policy conference and lobby day. Thanks especially to Sheila for welcoming me here today and for her unwavering leadership, especially during the last eight years, on making sure that the voices and needs of low income American families were heard in Washington.

Isn't it wonderful to have a president who understands the importance of affordable housing and investing in our cities and neighborhoods?

While I was volunteering with the President's campaign, my two young sons Lucas and Milo also got caught up in the Obama fever. My sons joined with one of our neighbors to do some fundraising of their own for President Obama- raising money by setting up a lemonade stand called "Thirsty for Change." Well, our neighbors and friends were certainly thirsty for change and the boys raised $300 from that lemonade stand alone.

Like my son, I know that you all were, and still are, thirsty for change in the world of housing policy. You're thirsty for new HUD leadership and thirsty for the federal government to finally focus its attention on housing affordability, particularly for low income renters across the country. You're thirsty for solutions to the foreclosure crisis and the housing crisis more broadly.

While we are without a doubt in crisis, I believe strongly that in crisis, there is great opportunity. A crisis really is a terrible thing to waste. This particular housing crisis gives us all the historic opportunity to look at affordable housing in a new light and think about where we can go from here.

In less than two months in office, the Obama Administration has taken extraordinary steps to meet our nation's challenges, taking a three-legged stool approach to create jobs, prevent foreclosures, and rebuild the credit market. The President's housing plan, Making Home Affordable, will help 7 to 9 million American families stay in their homes.

President Obama himself has also already demonstrated that he's thinking beyond just the immediate solutions to the foreclosure crisis. In both the Recovery Act and the 2010 budget, the Obama Administration has recognized that this is more than just a foreclosure crisis, but an economic crisis on all levels, a crisis that has made it even more difficult for low income Americans to find affordable housing and have access to services. 1/3 of people hurt by the foreclosure crisis are renters.

We also recognize that homeownership alone is not the solution to our housing challenges. Indeed, a lack of available affordable housing options forced many families who were unprepared for homeownership into buying homes. While Making Home Affordable will help millions of homeowners avoid foreclosure, there is a bigger challenge we are also committed to addressing.

The National Low Income Housing Coalition's own annual report entitled Out of Reach details just how serious the affordability gap for housing is in our country. In at least 29 states, more than two full-time minimum wage jobs are required to afford the fair market rent for a two bedroom apartment. And in no county in the U.S. can a full-time minimum wage worker afford even a one-bedroom apartment at the fair market rent without paying more than 30 percent of income for rent. This has got to change. We at HUD and in the Administration are fully committed to attacking the affordability gap in rental housing and ensuring that housing affordability is a long term priority.

Today I'll like to talk with you about the new leadership on housing both in the Administration and at HUD, share with you how that new leadership has taken immediate action on both disaster recovery and the Recovery Act, and give you a sense of what direction this new leadership will take us in the future, both on the 2010 budget and beyond. By working together, I have no doubt that we can turn this current crisis into a real opportunity for growth, innovation, and reform.

As all of you know, President Obama started out his career as a community organizer. Many of you may not know that he was a community organizer at the Altgeld Gardens public housing development in Chicago. He really gets housing and gets the work that HUD and organizations like the National Low Income Housing Coalition do to provide all Americans with a decent, safe, and affordable place to call home.

Here at HUD, we once again have housers holding the reins of the organization. Bill Apgar has joined us as one of my senior advisors. Bill and I have a long history- I was actually one of his students at Harvard and he hired me to work for him at HUD in 1998. How the tables have turned!

Over the past few months that we've been building our staff, it's been amazing to see the amount of talented, smart, and energized people who want to work for HUD and do their part to fix the housing crisis. I really think that President Obama's new vision for the country has brought out the best staff I could have hoped for. We've assembled a great team, and I'll say it again, it's great to have housers back at HUD!

In just the 12 weeks that President Obama has been in office and we've been at HUD, we've already seen our new leadership in action. Within days of my confirmation, I learned that thousands of families would be adversely impacted by the ending of the Disaster Housing Assistance Program. These families, whose lives had been ruined by natural disasters Katrina and Rita, were about to be victimized by yet another disaster- this time by a manmade disaster.

Together, with my partners in the Administration, I announced the transitional housing program, and I put out the call for help from public housing agencies across the country; they responded.

Nearly 200 public housing agencies stepped up to help HUD provide housing to families that would have otherwise been homeless or had a severely increased rent burden. This was a renewing of the commitment that was displayed throughout the operation of DHAP. Altogether, nearly 350 public housing agencies assisted in serving over 31,000 families displaced from their homes by hurricanes Katrina and Rita.

The National Low Income Housing Coalition too has been involved with disaster response and working on behalf of families impacted by disasters, and I'd just like to take a moment to thank Sheila and her colleagues for the weekly conference calls they organized in the months following the storms. Your work then and your continued work and partnership now with the federal government will be critical as we move forward with disaster housing planning here at HUD.

Under President Obama's direction, I also recently had the opportunity, along with DHS Secretary Napolitano, to visit communities in Louisiana and throughout the Gulf Coast. This visit was eye-opening, and I'd like to say that I am personally committed to HUD learning from Hurricanes Katrina and Rita and never letting such a response happen ever again. The Obama Administration, along with organizations like yours, knows that we must do more to help the Gulf Coast's cities and families recover and rebuild.

The Recovery Act is also a tangible demonstration of the Administration's new leadership on housing and the economic crisis so let me take a moment to touch on some of the areas of HUD's Recovery Act funding that will directly impact the work that you do. I also want to note that ¾ of our Recovery Act funds target very low income Americans who have been hurt most by the economic crisis and 2/3 will target extremely low income households.

Of HUD's $13.6 billion investment in housing and community development programs through the Recovery Act, $4 billion of Capital Funds have been allocated ($3 billion by formula and $1 billion through competition) to public housing agencies. These funds are effectively more than doubling our annual support of local housing agencies and will enable them to undertake energy efficient modernization and improvement projects. The larger purpose of these funds is to both promote energy efficiency and create green jobs.

I'm proud to say that $2 billion of HUD's Recovery Act funds will be invested in full 12 month funding for Section 8 project-based housing contracts. This funding will enable owners to undertake much-needed project improvements to maintain the quality of this critical affordable housing.

And $2.25 billion will also be invested in a special allocation of HOME funds to accelerate the production and preservation of thousands of units funded by the low income housing tax credit.

HUD's Recovery Act funds also protect families from homelessness through a $1.5 billion investment in the efforts to prevent and end homelessness. I know that homelessness is an issue that this organization cares a great deal about, and at HUD we are taking immediate action to try and prevent homelessness in the most extreme cases of foreclosures. This investment in the new Homelessness Prevention and Rapid Re-Housing Program is transformation in that it expands our efforts as an agency to those facing homelessness- prevention- as well as to those who are already on the streets. This Recovery Act investment is part of our larger goal to address the full range of needs of the broader homeless population, especially families, that has emerged from the housing and economic crises.

As I said earlier, President Obama has consistently demonstrated that he's thinking beyond just the immediate solutions to the foreclosure crisis. He's thinking long term about how as policy makers and advocates we can keep the crisis from happening again and provide our lowest income Americans with tools and a pathway to the middle class. This vision is reflected in the President's 2010 budget that he will transmit to Congress in the next few weeks.

While I can't share with you all of the specifics, let me talk briefly about our efforts to bridge the affordability gap and ensure equal housing opportunity for all Americans. HUD envisions a strategic partnership between the federal government, states, metropolitan areas, localities, and the private sector to tackle the structural housing challenges facing low and moderate income families.

A critical element of our new partnership on affordable rental housing will be our strong and persistent support for vouchers. Vouchers are the most direct way of meeting the affordability challenge facing very low income renters and the most efficient way of addressing the increase in homelessness resulting from growing job loss, the foreclosure crisis, and the economic downturn. I believe strongly that annual renewal funding of vouchers must be sufficient to ensure that families using vouchers will not lose their assistance and agencies will continue to have the resources to serve new families. That's why our budget requests a higher level of federal funding for housing vouchers.

Above and beyond the $4 billion in Capital Funds through the Recovery Act that went to supporting public housing agencies, our budget asks for full federal funding for the public housing operating fund. Our funding of public housing must keep pace with public housing need, and it is our hope that these funds will continue to help public housing agencies modernize and retrofit.

As we work together to preserve affordable housing and provide for our lowest income Americans, I believe it's critical that we work to ensure that predatory lending and discriminatory housing practices are a thing of the past. As our neighborhoods rebuild, we will work to ensure that the predatory lending and discriminatory lending practices are a thing of the past. We have had far too many unscrupulous financial institutions, brokers, and others that led folks down the wrong paths when it comes to lending and have taken away the American Dream for many families. I will renew HUD's commitment to fair housing enforcement and our 2010 budget will show an increase in funding for fair housing.

Lastly, our 2010 budget makes a strong commitment to fund the National Affordable Housing Trust, a program that only exists because of the National Low Income Housing Coalition's leadership. The Fund represents the first major federal housing production program since the creation of the HOME program in 1990. As you know, its purpose is primarily to increase and preserve the supply of rental housing for low and very low income households. Our budget requests a large influx of funds for the initial capitalization of the National Affordable Housing Trust Fund. We must work together to ensure that the Fund receives funding this fiscal year.

After eight years of being in the wilderness without any federal leadership on affordable housing, I know that my expectations and your expectations are very high. But this is not a one day, one week, or one month battle- we are in it for the long haul.

We must recognize that the budget process in particular is a difficult one, but together we must support each other when the tough decisions are made and be patient. We have housing leaders in the right places in our federal government, and we've got to trust that change will come, although probably not as fast as many of you may hope for.

However, if I learned anything from my time in New York working with both a Republican governor and a Republican mayor, change often comes from where you least expect it. I will never forget going to Governor Pataki and Mayor Bloomberg with a proposal to finance and develop 9,000 new units of supportive housing in New York City- and being shocked when we reached a $1 billion agreement to finance and develop the plan. It was through evidence-based discussions that we moved the housing agenda forward in New York, and I have no doubt that we can do it on the national level as well.

We all have to be advocates with both our hearts AND our heads, meaning that we all have to be accountable for the effectiveness of our programs. At HUD, we will invest at an unprecedented level in research and evaluation, and we will hold ourselves accountable to a standard that has never before been imposed on the work that we do. We will create a new, competent, and reformed HUD that will more effectively work to meet our mission of providing decent, safe, and affordable housing for all Americans.

By working together and by harnessing the appetite and momentum for change under President Obama, I know that we can move the affordable housing agenda here in Washington. I thank you all for your hard work and I look forward to continue working with the National Low Income Housing Coalition to make our vision for the future a reality for our families, for our communities, and for our country.

Thank you.


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