Prepared Remarks for Secretary of Housing and Urban Development Shaun Donovan at the Neighborhood Stabilization Program Announcement Press Conference

Columbus, Ohio
Thursday, January 14th, 2010

INTRODUCTION

Thank you. I want to thank all the local leaders here today especially Senator Brown and Congresswoman Kilroy for their extraordinary leadership.

I'm here today to deliver some good news, as I announce $2 billion for communities around the country in competitively-awarded Neighborhood Stabilization funding through President Obama's Recovery Act. Specifically, $175 million for the State of Ohio and $23 million for the City of Columbus.

We all know what tough times these have been for our economy. And we know the central role the housing crisis has played in contributing to our economic crisis - leaving virtually no neighborhood untouched.

But we also know that, for all the challenges that still lie ahead, our country's housing market has turned the corner.

After many months of decline, with home prices having now risen for two quarters in a row, interest rates near record lows, and home sales having rebounded to levels not seen since February 2007, it is clear that the nation's housing market is returning to stability.

Now, that news bodes well for our national economy - but this recovery is fragile. That's why I'm not here in Central Ohio to tell you that the housing crisis is over. You only need walk around this neighborhood to know that people are still hurting.

Indeed, with a crisis that has impacted every neighborhood, we need solutions that reach every neighborhood.

That's why I'm so proud to be here today. We've all seen the debilitating effect vacant and foreclosed homes have on neighborhoods - leading to reduced property values, blight, and neighborhood decay.

With Senator Brown's leadership, the Neighborhood Stabilization Program-or "NSP"-was created to provide communities with the resources to purchase and rehabilitate those vacant homes and convert them to affordable housing.

In the last 18 months, this program has pumped upwards of $4 billion into communities across the country. To help communities target these dollars in the most impactful way possible, we provided an additional $50 million in technical assistance this summer to cities and towns across the country to ensure we waste no time turning neighborhoods around.

Today, I am announcing an additional $2 billion of funding, including $175 million for Ohio, that will build off the initial round of NSP funding to further stabilize the hardest-hit communities - turning vacant homes into affordable housing opportunities, raising neighboring property values, and creating jobs for hardworking Ohio families.

This competition differs from the first round of funding in two important ways.

First, it was designed to reward the best ideas for tackling the housing crisis.

Under the innovative plans Ohio submitted, communities will be able to use this funding to address more than 4,500 homes across the state.

That means the City of Columbus will be able to acquire and rehabilitate nearly 150 foreclosed or abandoned properties and redevelop another 100 homes.

Communities like Toledo and Springfield will be able to provide counseling and homebuyer loan assistance - taking properties off the market at the same time families acquire the financial literacy tools necessary to ensure they are in an affordable home with a stable mortgage.

And by allowing for communities in Cuyahoga County to land bank some 80 currently vacant properties, this funding will rehabilitate neighborhood property values as well - help communities purchase these properties and redevelop the land as part of a comprehensive revitalization strategy or sell them at a profit to the taxpayer in the months to come.

And if you look at, for instance, Hamilton County's NSP2 application, you see that these aren't simply bricks and mortar rehabilitation plans - but part of a larger strategy to target struggling neighborhoods in communities like Evanston which are anchored by schools, transportation and other institutions and services we know are essential to the ongoing success and revitalization of any community.

At the same time this funding helps revitalize neighborhoods, it will help put hundreds of Ohioans back to work - from laborers who do the construction and rehabilitation... to the real estate and professional service providers who will market and sell these properties...to property and project managers who ensure these taxpayer funds are spent transparently and achieve the biggest bang for the buck.

Indeed, the second way this round of funding goes beyond the first is that awardees were not only required to demonstrate need - but show a capacity for growing local economies in impactful ways.

Building off the investments of the first round of NSP funding, NSP 2 funding will also leverage related federal investments in Ohio, such as CDBG grants and foreclosure counseling.

Indeed, this funding will complement local economic revitalization partnerships that bring together a wide variety of stakeholders, from state agencies and local governments to hospitals, churches, the business community and Community Development Corporations - the latter of which have become some of our most innovative housing developers and some of our most important civic institutions.

This multifaceted approach we are seeing on the ground here in Ohio is reflected at the federal level, where Neighborhood Stabilization is but one component of the Obama Administration's comprehensive approach to address the economic crisis and minimize the effects of foreclosures - keeping interest rates low, so 3 million families could refinance, pumping $13 billion into our economy this year.

Preventing more than a million foreclosures in the last year by helping hundreds of thousands of families lower their monthly mortgage payments and helping 500,000 families move into a stable, fixed-rate mortgage.

Ensuring first-time homebuyers can enter the market with FHA financing until the private market comes back while making sure families have affordable opportunities in the rental market as well.

Each of us knows that recovery won't happen overnight - because of the work of any one agency or branch of government. Different communities face vastly different challenges and require different tools.

But one thing that every community needs is a partner - who can provide resources, but also the guidance necessary to use those resources in the most impactful way possible.

That's what this Administration is committed to being - and with this funding, we're giving cities like Columbus the tools they need to benefit from that partnership.

Thank you.

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