Prepared Remarks of Secretary Shaun Donovan at the Housing Assistance Council's National Rural Housing Conference

Washington Marriott Wardman Park, Washington, DC

December 2, 2010

Thank you, Moises, for that introduction and for your remarkable leadership of the Housing Assistance Council. The commitment of the HAC Hto low-income families in rural America is an inspiration, and I'm proud to with you here today.

Let me also thank HUD's Assistant Secretary of Community Planning and Development, Mercedes Marquez, who will speak following my remarks. Mercedes has been a force for rebuilding neighborhoods and communities devastated by the economic crisis, and I couldn't be prouder of her work at HUD.

As HUD Secretary, I've had the opportunity see rural America up close -- in Montana, Alaska, North and South Dakota, Maine, and Vermont, including three trips to Indian Country. There I've seen how different communities have very different needs -- and face vastly different challenges.

Indeed, despite our agency's name, HUD's work has broad reach across almost every neighborhood in our country -- including those in rural America.

And over the past decade, HUD has supported over 800 CDCs, local rural non-profits, and Native American tribes through the Rural Housing and Economic Development program. From building and rehabbing over 15,000 homes, to creating credit unions and business incubators that have helped more than 1,600 businesses get off the ground, to supporting housing counseling and homeownership programs, this program has helped build capacity where it is needed most.

In addition, we've supported rural community development through our Capacity Building for Affordable Housing and Community Development program -- to help train CDCs to leverage private investment for revitalization activities in rural communities.

And over the last ten years, the Indian Housing Block Grant program has built or acquired more than 25,000 affordable homes and rehabbed another 52,000 units on Native American reservations.

But we gather today at a critically important moment for communities across the country. As you know better than anyone, the economic crisis that began in 2008 didn't just hit the cities and suburbs -- it devastated rural communities, as smaller areas lacking infrastructure, access to jobs, and the thriving businesses that help communities grow were left particularly vulnerable.

As such, under President Obama, we've worked to respond to the needs of rural communities.

And so, today, I'd like to discuss what the Obama Administration is doing to help build the strong, inclusive sustainable communities families in rural America need to succeed in the 21st century.

I want to talk about the historic affordable housing investments we've made these last 22 months.

And I want to discuss how we are changing the way we do business to get the most out of those investments -- providing communities with new tools and resources that help them realize their own visions for success.

Affordable Housing in Rural Communities

Certainly, so much of that work began with the Recovery Act, which made an unprecedented investment in affordable housing across the country.

In less than two years, the Recovery Act has already helped renovate over 360,000 homes, with nearly 18,000 new homes under construction -- many to green standards with energy efficient improvements, saving money for residents and owners alike.

It's provided more than a half billion dollars in Recovery Act funding to Native American communities, helping places like the Oglala Sioux Housing Authority in Pine Ridge South Dakota rehab more than a hundred affordable homes with roofs using Energy Star certified materials.

At the same time, the Homeless Prevention and Rapid Re-Housing Program has prevented and ended homelessness for more than three quarter of a million people in communities across the country.

And with the number of sheltered homeless families in rural areas increasing from 27 percent of the total homeless population to almost 40 percent over the last two years, this tool has been particularly critical for our rural communities.

Frankly, I think most people would be shocked to learn that rural areas have a family homelessness rate that is almost double that of cities -- in large part because rural areas often have fewer shelters and resources for people to turn to in a time of need.

And according to the Council for Affordable and Rural Housing, most families in rural places who would otherwise be on the street live in cars, doubled up, or in grossly substandard housing.

You see this every day. I saw this for myself while visiting Williston, North Dakota in August, where a lack of available housing meant that even working families with good-paying jobs were forced into homelessness.

That's not right -- that has to change.

And no less an authority than the U.S. Conference of Mayors reports that it is changing -- that HPRP is "fundamentally changing" the way communities respond to homelessness at the local level. That's because it's keeping people in their homes rather than waiting for them to become homeless, and quickly returning those who do fall into homelessness to the stable, permanent housing they need.

Indeed, in many ways it was HPRP that paved the way for Opening Doors--the first ever federal strategic plan to end homeless--which I was proud to present to President Obama earlier this year -- and which wouldn't have been possible without the efforts of so many here in this room.

The most far-reaching and ambitious plan in our history to put our nation on the path toward ending all types of homelessness and the culmination of more than a decade's work in communities around the country, this plan will end chronic homelessness and homelessness among veterans in five years, while ending homelessness for families, youth, and children within a decade.

And by working with USDA to identify how we can further engage their Food Stamps and Rural Development programs to break down federal agency silos--and by taking advantage of a new Rural Housing Stability competitive program created by the HEARTH Act that will be used by communities to prevent homelessness and house those who are homeless--we can ensure this plan makes the biggest possible impact in rural America.

Over the last decade, it's communities like Brattleboro, Vermont and Mankato, Minnesota that have proven that with the right tools and the right partners, we can house anyone.

Our job now is to house everyone -- to prevent and end homelessness. All homelessness.

And with this plan, we will.

Building Sustainable Rural Communities

Of course, to truly ensure that all Americans can afford to live in communities with access to employment, schools and transportation options, we need to nurture strong, robust, and vital rural communities.

And with the remainder of my remarks, I wanted to describe three ways that we're doing precisely that.

First, in October, with our partners in the Department of Transportation and the Environmental Protection Agency, HUD awarded nearly $170 million in planning grants to ensure regions and communities across the country have more housing and transportation choices, more energy independence, and will be more economically competitive.

Those grants weren't just about cities or suburbs. In fact our sustainability grants included a $25 million set-aside for communities with populations of a half-million or less.

And we took it one step further to ensure that some of the funding would be awarded to even smaller communities, targeting areas with less than 200,000 people.

The result was overwhelming. For the Sustainable Communities Regional Planning Grant Program alone, more than half of applicants came from small towns and rural regions -- each offering bold, unique proposals to plan and build sustainably based on their own local resources, landscape, culture and ingenuity.

And we responded. For instance, we awarded $1.4 million to six rural counties in central Florida who are trying to balance economic growth with preserving local wildlife and agricultural production.

We provided nearly $1 million to better connect the Pine Ridge Indian Reservation in rural South Dakota to the surrounding cities and economies.

And we awarded $1.6 million to a consortium of rural and urban Appalachian communities in western North Carolina to craft a three-year plan for integrated regional development.

This proposal was particularly exciting as the group is soliciting an unprecedented level of community input from families that have been farming those lands for generations, seniors on fixed incomes, migrant workers, and small business owners.

And our partnership with DOT and EPA isn't limited to the grants we award. We've formed an interagency working group on rural and small town communities with USDA that has been meeting for several months to see how we can better align our programs to serve smaller communities and regions.

Indeed, this summer Deputy Secretary Ron Sims participated in a rural issues roundtable with high-ranking colleagues from DOT, USDA and the EPA as well as 90 stakeholders from small-town and rural constituencies to discuss the way forward on rural issues with a focus on inter-agency cooperation.

Because when it comes to housing, environmental and transportation policy in rural America, it's time the Federal government spoke with one voice.

Rural Innovation

Of course, when most people hear the term "sustainability" -- they think of environmental sustainability. But this audience knows full well that you can't have a sustainable community if you have concentrated rural housing distress and community poverty.

That's why the second way we are helping catalyze change in your communities is by providing tools that help you tackle housing and poverty challenges that are unique to rural places.

And today, I'm proud to announce that HUD is making available $25 million through a new Rural Innovation Fund to do just that.

The fund builds on the Rural Housing and Economic Development program I mentioned earlier -- which has had a real impact in rural communities, creating nearly 12,000 jobs and providing job training to nearly 30,000 people. Indeed, the quarter billion dollars HUD has invested in this program over the last decade has leveraged more than three times that amount in other funds -- providing an excellent return for the taxpayer.

To give you a few examples, it awarded four community mental health centers in rural Alabama with $300,000 to provide permanent supportive housing for special needs populations at risk of becoming homeless.

It awarded over $280,000 to help the Big Pine Paiute Tribe in California develop a comprehensive business development and job creation program that ultimately created dozens of local jobs.

And it included a $250,000 grant to Fort Smith, Arkansas to assist a local CDC in their efforts to rehab and construct energy efficient homes.

Best of all, with these grants, communities leveraged up to ten times the capital HUD initially provided.

But with the Rural Innovation Fund, we will support these kinds of efforts on the larger scale these challenges require.

Indeed, in developing the Rural Innovation Fund, HUD worked closely with federal partners, including the Department of Agriculture and the Economic Development Administration at the Commerce Department, to ensure that other federal programs serving rural communities can be leveraged for additional impact.

Increasing the maximum award from $300,000 to $2 million, the fund sets aside $5 million for Native American tribes, but will make them eligible for broader funding by linking up with other partners to develop innovative proposals.

Using a new online Rural Mapping Tool, applicants will be able to measure poverty and community housing distress -- so they can spend less time and money doing paperwork and more on how they can best meet the needs of their communities.

Reflecting months of listening to stakeholders who know their communities best, including the HAC, we're excited about the possibilities of the Rural Innovation Fund -- and Mercedes will provide more detail about it when she follows my remarks.

The Rental Housing Revitalization Act

The third way HUD is creating opportunity in rural America is by transforming the way we provide rental assistance.

Right now, HUD's Public Housing program faces a backlog of unmet capital needs that could be as high as $30 billion.

The challenge isn't limited to public housing. Older programs that subsidize more than 45,000 units of privately owned affordable housing lack any real strategy that would keep them affordable for the years to come.

Already, our country has lost 150,000 units of public housing in the last 15 years -- 10,000 homes a year, every year for fifteen years.

That's why earlier this year the Obama Administration proposed a Transforming Rental Assistance initiative which would give owners of public housing the same access to capital that any other multifamily property owner has.

Yesterday, this effort took a big step forward as Congressman Keith Ellison of Minnesota introduced the Rental Housing Revitalization Act -- which builds on our initiative and incorporates the feedback of stakeholders across the country.

Not only would Congressman Ellison's legislation mean public housing owners could leverage $25 billion in private and other public capital -- just as importantly it would simplify a system that has desperately needed it for decades.

Right now, HUD has thirteen different deep rental assistance programs each with its own rules, administered by three operating divisions that contract with more than 20,000 separate entities.

No one would ever intentionally set up a system this complicated.

And we've seen how this proliferation of programs and delivery systems makes their job providing housing to families much, much harder, as the barriers this system throws up to using other financing streams and working with social service providers makes them do that job with one hand tied behind their backs.

In fact, smaller communities are further penalized -- because having fewer resources means the lack of flexibility comes at an even steeper cost.

Small PHAs house nearly 180,000 elderly or disabled households, which make up 18 percent of all public housing households. And so these communities, many of which are in rural areas, face not only an aging housing stock -- but a rapidly aging population as well.

The Rental Housing Revitalization Act will give smaller communities more resources -- but also more flexibility to use those resources.

The time has come to make our programs easier to use -- so that our local partners can focus more on the needs of their communities and less on complying with inflexible, one-size-fits-all rules.

And by putting an end to the parallel universe HUD programs operate in compared to the rest of the affordable housing world, the Rental Housing Revitalization Act would also put an end to the "separate, but inherently unequal" housing system in this country.

You know what I'm talking about -- how most families live in housing that is financed, developed and managed in a way that can be integrated with the communities around them, while the two-and-a-half million poor families served by HUD's oldest programs live in housing that can't be.

It's time to make this housing the foundation for opportunity it needs to be.

At HUD, we think that the Rental Housing Revitalization Act holds enormous promise -- and we think once you get a chance to study it, you'll agree.

But whether it's revitalizing our rental housing stock, rural innovation or planning for more sustainable communities, when it comes to strengthening rural America--when it comes to building vibrant, sustainable communities of opportunity and choice for all Americans--you know one size doesn't fit all.

It's long past time the Federal government understood that as well. And with these tools, we are.

A New Era of Partnership

For me, and for President Obama, all this work comes down to a very simple belief:

That no matter where you live, when you choose a home, you don't just choose a home.

You also choose schools for your children and transportation to work.

You choose a community -- and the choices available in that community.

A belief that our children's futures should never be determined--or their choices limited--by the zip code they grow up in.

Like our President, I know change is never easy -- that revitalizing our nation's communities, rural, urban and suburban won't happen overnight. Nor will it happen because of any one policy or the work of any one agency or one party.

But working together, in common purpose--in partnership--we can tackle our toughest challenges.

We can push back on this crisis.

And most important of all, we can create a geography of opportunity for every American -- and every family.

Together, I know we will.

Thank you very much for having me here today.

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