Prepared Remarks for Secretary of Housing and Urban Development Shaun Donovan at the Silver Lining Breakfast Forum - From Recovery to Revitalization: Helping Build a More Sustainable, Prosperous New Orleans

New Orleans, Louisiana
Thursday, August 27th, 2009

Thank you, Ambassador Joseph - for that very generous introduction and for all the Louisiana Disaster Recovery Foundation has done to make this community and state whole again. Many thanks also to the Board of Directors, including Lieutenant General Russel Honore, Linetta Gilbert of the Ford Foundation for hosting this breakfast forum and so many others.

Because of you, some 4,800 families once again have a place to call home.

Because of you, more than 2,800 small businesses are once again online - spurring the recovery of not only New Orleans' economy, but our national economy as well.

Many thanks also to HUD staff here today. We have all but one of our Assistant Secretaries, our Deputy Secretary, Ron Sims, as well as HUD field staff.

Also, we have my senior adviser for disaster recovery programs, Fred Tombar - a veteran of New Orleans recovery efforts who has spearheaded our own at HUD over the last six months, fostering new levels of communication among government agencies, the private sector and many of you in the non-profit and philanthropic community.

It's a pleasure for the whole HUD team to be with so many of partners on the ground this morning - foundations, nonprofits, grassroots and community-based organizations.

Some of you are developing and renovating housing for low-income families and seniors.

Others are investing in community leadership - lifting up community voices and increasing capacity on the ground by engaging in neighborhoods and loaning executives to the cause.

And still others are helping homeowners, small businesses, fishers, and farmers who live beyond the city limits - who remind us that suffering continues in rural South Louisiana and throughout the Gulf Coast.

Whatever our involvement, each of us is here today for the same reason:

Because we are committed to rebuilding and revitalizing one of our greatest cities and surrounding communities.

Because we are committed to ensuring that all of the resources provided-be they public or private-are helping people and helping them move back into their homes.

And above all, because we are committed to doing everything we can to ensure New Orleans becomes the sustainable, inclusive and prosperous city we all want it to be - and know it can be.

Four years after the greatest natural disaster this country has ever known I want each and every one of you to know that the Obama Administration shares that commitment.

And it is one from which we have no intention of retreating.

A Great American City

This morning, I want to share with you some thoughts about how the Administration and HUD intend to help New Orleans move from recovery to revitalization - how we believe that by working with state and local partners, we can rebuild smarter.

Rebuild safer.

Rebuild stronger and more sustainably - helping New Orleans grow into an inclusive, prosperous 21st century urban center.

This is my third trip to New Orleans since becoming HUD Secretary seven months ago - I was here in March with Homeland Security Secretary Napolitano and saw for myself the ways that government was getting in the way of recovery moving forward.

On my second trip in June, I worked alongside non-profit groups helping kick off President Obama's United We Serve initiative.

For that trip, I was joined by my wife and two sons, and served with the St. Bernard Project, which is helping hurricane victims return to their homes.

Together, we helped mud walls in the home of Sally Allen, who was anxious to get back into her home so that her children and grandchildren could stay with her once again.

We helped put the finishing touches on the home of the Wiltz family who had spent months living in a motel.

As a father, it was a powerful example to set for my boys - demonstrating to Milo and Lucas the importance of a safe and secure home for every family, the difference you can make through service, and-above all-just how good it feels to help others.

That's what each of you do every day. And that's what we at HUD are here today to celebrate most of all.

President Obama has said that the City of New Orleans is special - its place in our imagination and our lives unique.

I couldn't agree more. From its architecture and music to its dialect and diversity, no city is more vibrant.

At a moment when sprawl has threatened the character of communities across the country, no city has more character - even today.

Even after all that New Orleans has been through these last four years.

Indeed, if we have learned anything it is that no community is more resilient.

All of this means that, while New Orleans may be known by some as "The City that Care Forgot" - it cannot and will not be the city that the Obama Administration forgot.

Getting Recovery Right

As my first two trips made clear to me, too often in the past four years, bureaucratic red tape had been a barrier to recovery - to providing residents with the tools they that they needed to rebuild their lives and communities.

But from day one, President Obama sent a clear signal that this was going to change. And in seven months - it has changed, as more than $1 billion in public assistance projects that had been stuck for years have been obligated.

HUD has changed as well. Within days of President Obama's inauguration, I learned that tens of thousands of families would be adversely impacted when the Disaster Housing Assistance Program came to an end.

The lives of these families had already been ruined once -by the natural disasters Katrina and Rita. And here they were, about to be victimized yet again - this time, by a man-made disaster.

To me-to all of us at HUD-that was completely unacceptable.

And so, together, with our partners in the Administration, we announced a transition plan for DHAP families, providing rental assistance and additional time for families to move from temporary housing into permanent housing, including the Housing Choice Voucher program.

Altogether, nearly 350 public housing agencies from all over the country provided temporary housing to over 30,000 families displaced from their homes by Hurricanes Katrina and Rita.

Public housing agencies reached out to every single family and sat down with some 21,000 DHAP families that expressed interest in housing assistance.

Of the 12,000 families that were income-eligible for Housing Choice Vouchers and received them, more than a third were families in New Orleans.

The remaining families have since either transitioned to self-sufficiency or qualified for Louisiana's CDBG-funded Rapid Re-housing Program.

Of course, as you know, these numbers don't tell the whole story - how every one of these families had different needs and faced unique challenges.

As such, HUD contracted with community-based social service providers like some of you in this room to offer customized case management, ensuring that the housing resources being provided met each family's individual needs.

Our efforts to assist these 30,000 families were part of a broader effort that has helped 90,000 families transition to permanent housing - an unprecedented federal effort to prevent families victimized by disaster from falling through the cracks.

But to sustain these efforts, we also knew that we needed additional tools - many of which we put in the Recovery Act, which is pumping over $3.3 billion into Louisiana.

By investing over $26 million in this state through HUD's new Homeless Prevention and Rapid Re-Housing Program, we've been able to provide you with flexible new dollars that can help families who are currently homeless or at risk of becoming so find housing - while also working to prevent homelessness in the first place.

HUD has also expanded the Neighborhood Stabilization Program-designed to help communities struggling with the foreclosure crisis-investing $36.5 million to begin redeveloping demolished, blighted, and vacant properties in Louisiana for housing purposes, including the estimated 68,000 here in New Orleans - many of which are located in Orleans and St. Bernard parishes.

All of this work is designed to do one thing and one thing alone:

To get results.

To cut through the red tape and help the families who need it most.

I mentioned meeting the Wiltz family on my second trip here in June. This family had bought a house after the storm and renovated it - only to discover that the faulty Chinese drywall that had been used meant much of the house had to be gutted.

As a result, this elderly couple, one of whom suffered from Alzheimer's, was forced to live in a home that was little more than a shell.

Only because of the St. Bernard Project were the Wiltzes able to get back into their house.

A lot of families are in similar situations - many because of bureaucratic decisions that limit the assistance that homeowners are eligible to receive.

Having seen for myself the miracles so many of you work, its unacceptable to me that your efforts to help families would be hamstrung by bureaucratic red tape.

That's why this week we are announcing that HUD has devised a fairer interpretation of the so-called Duplication of Benefits rule to help the State of Louisiana channel hundreds of millions of dollars of re-purposed HUD funds through non-profits to help families return to their homes.

The Duplication of Benefits rule makes sense in a lot of ways. But as the Wiltzes showed us, there are times when it fails to account for the true cost of displacement, leaving families unable to complete the rebuilding of their home - and their lives.

That's not right. The change in this rule means that a family in this situation can now use CDBG assistance to bridge that gap.

And we have already been in touch with the State of Louisiana, which has identified millions of dollars in assistance that can be used by non-profits like some of you in this room who have a proven track record of getting families back into their homes.

We believe this small change will mean big things for families who continue to face obstacles on the road home.

Indeed, the Wiltzs' story reminds us that work is never done by government alone.

In the six months following hurricanes Katrina and Rita, some $3.5 billion in donations poured into the relief effort - the largest charitable investment in our nation's history.

As I stated at the outset, the philanthropic effort has been absolutely critical to the successes we've seen in New Orleans.

I've mentioned LDRF. We've also been fortunate to have the Kellogg Foundation's $23 million investment in housing, school-based health clinics and other initiatives supporting children and families.

We've had the Gulf Coast Funders for Equity consortium of grant-makers which has made nearly $9 million of recovery funds available.

We've also seen countless efforts that are smaller in scale but equally important, such as Neighborhood Housing Services working with the New Orleans Hornets to help 20 public school teachers rebuild their homes.

Collectively, you have created the social capital we need to build a sustainable movement for revitalization - and accomplished something government often struggled to do:

Rebuild from the bottom up.

MIT Professor Langley Keyes' book Strategies and Saints argues that when the Federal government has no comprehensive strategy to solve a problem, then saints are needed.

Well, that's not the case anymore. President Obama has been clear about his strategy. Our challenge today is to ensure those saints are full partners in our effort to transition from recovery to revitalization.

Indeed, as the ravages of the storm fade into memory for many Americans not faced with the day-to-day struggles of the Gulf Coast, we need your commitment now more than ever.

From Recovery to Revitalization: A Sustainable New Orleans

As you know as well as I, our goal can't simply be to replace what the storm took from New Orleans.

Long before Hurricane Katrina, in spite of its special place in American culture and history, New Orleans was also burdened by many of the same challenges that plague metropolitan America.

And in some cases, even more so. Before the storm, New Orleans had the second highest concentration of poverty in the nation and the fourth lowest median household income in metropolitan America. Its public school system was acknowledged as one of the most troubled in the country.

These challenges weren't unique to New Orleans. Many of the neighborhoods of concentrated poverty across the country resulted not in spite of government policy, but in many cases because of it.

Rather, our task today is to ensure that we develop more sustainable, inclusive, vibrant neighborhoods - to begin the job of revitalization.

Let me tell you what that means to us at HUD.

First, it means investing in evidence-based policymaking and research - to know what is working, what isn't and why.

HUD's Office of Policy Development and Research is researching the current housing landscape in the Gulf Coast and analyzing the effectiveness of our current recovery and revitalization efforts.

These research efforts include the American Housing Survey New Orleans Metropolitan Study, which hasn't been conducted since a few months prior to Katrina. When complete, this survey will provide a detailed comparison of the state and condition of housing in New Orleans metropolitan area since the storm.

In addition, we'll be assessing how FEMA's Alternative Housing Pilot Program to build modular homes and cottages in place of mobile homes is impacting the quality of life for families and the overall pace of recovery.

Second, revitalization means when we invest in new infrastructure, it must be better able to withstand the next storm.

Louisiana recently received notification of an additional $1 billion in disaster CDBG funding to help recover from last year's storms. Out of this appropriation, we have also created the Disaster Recovery Enhancement Fund - a more than $311 million pot of Community Development Block Grant funds that will support local disaster mitigation efforts and promote forward-thinking land-use development and planning that prevents tragedy by offering families and businesses around the country more affordable choices.

Third, it means that we don't just build housing, but neighborhoods - communities that are more vital and more sustainable than the ones that were here before the storm.

Right now, we're working with the City to begin repurposing nearly a half-billion dollars in CDBG and HOME funds to bolster economic development.

We're also discussing with the congressional delegation how to re-program any surplus of $3 billion in CDBG funding into economic development, critical infrastructure and closing funding gaps in permanent housing projects

Indeed, a key part of that is ensuring affordable housing development moves forward.

The Recovery Act included a $2.25 billion investment in the Tax Credit Assistance Program, of which Louisiana is receiving nearly $40 million - providing funds for capital investments in affordable housing developments that have been stalled because of the decline in the market for Low Income Housing Tax Credits.

Of course, we recognize that for New Orleans and the Gulf Coast, this alone is not enough. That is why we are working with Senator Landrieu and others to extend the "placed in service date" for the Gulf Opportunity Zone tax credits to 2012.

Prior to Katrina, half of all the housing stock here in New Orleans was rental housing - and its restoration is key to the city's revitalization.

That is why we have worked with the state to retool its Small Rental Property Program to provide advanced payments or gap financing to landlords struggling to rehabilitate their rental properties. Since the beginning of the year, the state has closed on more than 600 small rental properties with HUD funding, helping rehabilitate more than a thousand occupied units - almost all of which are affordable.

Clearly, for any community to succeed, it needs good housing. And I am pleased to report that not only are we well on our way to restoring housing damaged by the storm - but that once completed, there will be more affordable housing opportunities in New Orleans than there were before the storm.

But for that housing to thrive-to be truly sustainable-it also needs good schools and good transportation.

It needs affordable child care, health care and retail businesses.

These are the staples of every vibrant neighborhood.

Later today, I'll be breaking ground at Lafitte Community with Senator Landrieu, Mayor Nagin and others. By the end of next year, families will begin to move in to those homes, just as they will this fall at Harmony Oaks, and Columbia Parc at the Bayou District, which were formerly known as C.J. Peete and St. Bernard respectively.

Collectively, these public housing transformations should send a clear message that HUD is committed to providing affordable housing for every family.

A clear message that this is a new era, not only for public housing residents, not only for HUD. But for every neighborhood in New Orleans.

Indeed, in several high-profile HOPE VI and mixed-income, mixed-use developments across the country, we've seen significant improvements in both the quality of the local schools and the educational performance of low-income children. We have also seen lower rates of unemployment.

We want to expand on the Hope VI model by challenging public, private and nonprofit partners to extend neighborhood transformation efforts beyond public housing.

That's what our Choice Neighborhoods initiative is all about. By expanding the range of activities eligible for funding, we can capitalize on the full range of stakeholders we know are needed and want to be involved - from local governments and non-profits to private firms and public housing agencies.

I believe Choice Neighborhoods is absolutely essential to making our housing efforts in New Orleans successful.

So, too, is our $150 million Sustainable Communities Initiative. Right now, low-income working families spend nearly 60 percent of their budgets on housing and transportation costs - which leaves far too little to pay for necessities like groceries, child care, doctor's visits, or saving for college.

With this investment, and in partnership with the Department of Transportation, HUD will bring transportation and housing planning together at the local level to reduce costs and spur economic development that increases opportunities for working families.

The Geography of Opportunity

Of course, yesterday, one of our greatest champions for those opportunities passed away. As President Obama said, Ted Kennedy's "ideas and ideals are stamped on scores of laws and reflected in millions of lives - in seniors who know new dignity, in families that know new opportunity, in children who know education's promise, and in all who can pursue their dream in an America that is more equal and more just."

But for all his passion and the remarkable legacy he left us, Senator Kennedy also had a legendary sense of humor. And I think he'd appreciate the story about his older brother I'd like to close with.

A half-century ago, John F. Kennedy told an audience in Indianapolis that, quote, "When written in Chinese, the word 'crisis' is composed of two characters - one represents 'danger,' and the other represents 'opportunity.'"

It was yet another of those famous Kennedy rhetorical flourishes that so many of us have adopted in time - only, this one, as it turned out...wasn't actually true.

But while the etymology may have been lost in the translation, the point surely wasn't.

Whether it is community organizations, financial institutions, non-profits, or government at the federal, state and local levels, when we draw upon our greatest strengths and most common values-when we work together-we can turn our toughest challenges into a geography of opportunity that will shape generations to come.

That is the silver lining that brings us together this morning.

No one suggests that the nightmare of Katrina will end by nightfall. We still face tough choices ahead on the Road Home.

But by working together, we have already proven that we can achieve real, tangible results for families facing the most difficult of circumstances imaginable.

Today, our challenge is to expand that partnership to help New Orleans become a more sustainable, inclusive and prosperous city than the one the floodwaters washed away.

With your help, I not only believe we can - I know we will.

Thank you for this opportunity - and for everything you do.