Prepared Remarks of Secretary Shaun Donovan at the National Low Income Housing Coalition 2011 Housing Policy Conference

Thank you, George, for the warm introduction - and for your leadership with the Board of Directors.

As always, thank you Sheila, for everything you do to make sure Washington does right by our most vulnerable populations.

Sheila Crowley is a remarkable advocate for families - and a tremendous partner. And let's give her a hand.

And let me say a special word of thanks to all the residents of public housing here today - I understand you are about 150 strong this year.

Your participation in this year's conference reminds all of us—and reminds me—why we get up in the morning to do the jobs we do.

It isn't to push paper.

It isn't just to fund programs, as important as many of them are.

It's to help the families those efforts reach.

To help them live in decent, safe, affordable housing.

Today, I want to talk about how we are going to do that.

I want to talk about how President Obama's recently released Fiscal Year 2012 budget prioritizes the families who live in HUD-funded housing - and some of the tough choices this budget environment forced us to make.

I want talk about holding ourselves accountable for producing real results for those families.

And I want to talk about what it's going to take to improve HUD programs going forward - so that every family has the housing and opportunity they need to be a part of what President Obama calls "winning the future."

Winning the Future by Protecting Vital Investments

To be sure, this is a very different environment than the one we were in when President Obama took office.

Then, our economy was falling off a cliff - losing 753,000 jobs per month.

Today, our country's unemployment rate has fallen to its lowest rate in nearly two years. And we've seen private sector jobs created for 12 straight months - including 222,000 last month alone.

But you and I both know that this crisis took its greatest toll on those that were already struggling to make ends meet.

This was confirmed by our Worst Case Housing Needs survey, which showed the largest increase in its history between 2007 and 2009.

You all know that HUD's programs represent the single best tool we have to fight Worst Case Housing Needs.

That's because extremely low-income families make up 72 percent of HUD-assisted households - and more than half are elderly or disabled.

To give you an idea, while the median family income last year was over $60,000, for a family receiving rental assistance from HUD, it was only $10,200.

These families are already among the folks hardest hit by the recession.

They need to be protected - and today, I'm proud to tell you that with the President's budget, they will be protected.

As many of you know, the majority of HUD's budget each year is required simply to hold the line - to keep families we currently help in their homes and provide basic upkeep to the public housing stock.

In our proposed budget, that is particularly pronounced - with 80 percent of the budget to be used for renewing homeless and rental assistance, and providing capital needs funding for HUD's public housing stock.

In all, the 2012 budget will assist over 5.5 million families—86,000 more than at the end of last year—and doubles the number of new supportive housing units to meet rising demand.

Winning the Future by Taking Responsibility for Our Deficit

Still, every department shares a responsibility to make tough cuts so there's room for the investments we need to win the future - and so we don't build our future on a mountain of debt.

And HUD is no exception.

In a tight budgetary climate, we've had to make some difficult choices, including reductions to programs that, absent the fiscal situation, we would not be cutting.

That's why we made the choice to protect existing residents, but reduce funding for new units and projects.

This budget also requires public housing authorities with excess reserves to contribute $1 billion so that we can fully fund the Public Housing Operating Fund.

As many of you know, we have seen operating reserves at housing authorities increase substantially over the last couple of years.

To be clear, our proposal would draw down excess reserves in a targeted way -- not at every housing authority.

At the same time our budget proposal recognizes that we all have a responsibility to manage to our budgets, it makes a strong commitment to doing more of what works and to stop doing what doesn't.

By including the Section 8 Voucher Reform Act in the budget, championed by congressional leaders like Barney Frank and Maxine Waters, we will simplify, streamline and improve the voucher program and save $1 billion for the taxpayer over the next 5 years, while supporting the ability of public housing authorities in small towns and rural areas to better serve the working poor.

These kinds of reforms allow us to propose increased investment in programs we know work - like the HUD-VASH program for homeless veterans.

This effort is built on the solid body of evidence that permanent supportive housing both ends homelessness and saves money for the taxpayer by putting an end to the revolving door of emergency rooms, shelters and jail.

The people in this room have shown us that investing in homeless prevention is smart government.

And nowhere is that clearer than with the Recovery Act. To date, with the Homelessness Prevention and Rapid Re-housing program, you have helped save 875,000 people from homelessness.

That's an extraordinary accomplishment. So, give yourself a hand.

Armed with those kinds of results, our proposed budget would increase funding for homeless programs by more than 29 percent over 2010 - and keeps the President's historic commitment to Opening Doors, the first federal strategic plan to end homelessness.

Unveiled last June, this plan commits the Federal government to ending chronic and veteran homelessness by 2015 and ending homelessness among families and children by 2020.

And with these resources and your help, we will keep that commitment - despite tough budgets ahead of us.

A Changed Environment

Of course, as we begin negotiating a budget for the next fiscal year, we're still digging out of a housing crisis and still don't have one for this fiscal year.

When it comes to finding common ground on a common sense budget, as the President has said, we can't balance our budget on the backs of the most vulnerable.

Getting our fiscal house in order can't just be something we use as cover to do away with things we dislike politically.

That's why we continue to fight for funding this year and next for the Affordable Housing Trust Fund.

We can't let those who would blame our housing crisis on its victims make housing finance reform something that cuts low and moderate income Americans out of finding affordable housing.

That's why in the Obama Administration's report on reforming America's system of housing finance, we reaffirmed our commitment to a permanent, dedicated financing mechanism that supports affordable homeownership and rental housing - and with the need greater than ever, it's time we made it happen.

In all these issues as we work toward crafting a budget for this year and next, I want you to know that this Administration will be fighting for you - and that's exactly what my team and I have been doing on Capitol Hill.

Still, this is clearly a changed budget environment from the one in which we've operated over the last two years - and a changed political environment as well.

That makes it all the more important that Americans understand what affordable housing means to them - to our communities, our country...and our economy.

We need to get the word out that affordable housing investments through the Recovery Act have renovated and developed over 410,000 homes in two years - greening homes and jumpstarting construction that had been frozen by the economic crisis.

And as a recent report by CLPHA, NAHRO and PHADA shows, for every dollar the Recovery Act invested in public housing, another two is being pumped into our economy - creating over 100,000 jobs.

Any way you slice it, that's real bang for the buck.

That's smart government.

And that's a story each of us needs to be out telling.

We need to do that.

But that's not all we need to do.

We also need to be sure our own houses are in order.

We all know that public housing has been in the news recently. But just as important as the allegations we've read about is how we respond.

In Philadelphia, once HUD learned of allegations of impropriety at the housing authority, we took swift action to restore credibility and protect tenants.

We've acted quickly elsewhere as well - in communities like New Orleans, where David Gilmore has made great progress reforming HANO under very difficult circumstances.

Transparency about how we spend and track taxpayer dollars is a top priority.

Let me be very clear: we have zero tolerance for fraud, waste and abuse.

HUD is focused on protecting taxpayer dollars and ensuring that public housing tenants are receiving the quality housing and services they need.

And I look forward to partnering with the Coalition to make that possible.

In so many ways, you're our eyes and ears on the ground - and only with your partnership can we identify troubles before they become a problem that impacts the lives of families.

Now, to those who would use this as an opportunity to attack public housing itself, I say:

Think again.

We aren't going to let anyone use a handful of examples—as appalling as they may be—to roll back our country's commitment to public housing.

Not on our watch. And not in the wake of a housing crisis.

Winning the Future by Preserving America's Public Housing

All of these issues—the successes of the Recovery Act, the limitations we face the current budget environment, challenges facing some of our PHAs, combined with the President's goal of winning the future—remind us that the time has come to have a larger conversation about how we preserve America's affordable housing stock in the 21st century.

I'm proud to say we just awarded our first Choice Neighborhoods grants. With one-for-one replacement and strong protections ensuring residents have the ability to return to their homes, Choice Neighborhoods will allow communities to use the mixed-use and mixed-finance tools pioneered by the HOPE VI program to transform all the federally assisted housing in a distressed neighborhood.

Not only have we requested $250 million for Choice Neighborhoods funding in our FY 2012 budget, but Senator Menendez just introduced legislation that would authorize Choice Neighborhoods into law.

And I am asking you today to support that legislation so that neighborhoods across the country have the safe streets, good jobs, and the quality schools that every family needs.

Of course, as important as these steps are, you and I both know they're really only the beginning.

A year ago, we tried to get that conversation started with our Transforming Rental Assistance proposal.

Now, I know what some people said about that proposal last year.

People said that President Obama wanted to privatize public housing.

Others said we were walking away from our obligations to serve the people who lived there.

Still others suggested we would let public housing authorities opt out of the program after twenty years - or that by letting residents choose where they wanted to live, we were putting the affordability of these homes at risk.

So, let me set the record straight:

Barack Obama didn't come to Washington to let your homes be sold off to the highest bidder - or let them decay so badly that they won't be there for future generations.

And neither did I.

Let's not forget that President Obama got his first job out of school community organizing on the South Side of Chicago - in public housing.

No other President in our history better understands what a precious resource public housing is to communities, to our country, and to our future.

And as we did last year, we're going to work with you to protect that resource.

With our proposed budget, we have begun to lay out a Comprehensive Preservation Strategy based on feedback we heard from you, the singular focus of which is to place public and assisted housing stocks on a sound, sensible financial and regulatory footing for the long-term and better serve the families that live there.

To make this possible, we are pursuing new authority where it is needed and maximizing the use of existing authorities.

Some of the new authorities we are seeking include working with Treasury and USDA to enhance the Low-Income Housing Tax Credit - which was responsible about half of all multifamily production in the 1990s.

In our budget, we've made a basis boost proposal to increase the tax credits available to preserve federally assisted housing - including public housing.

We are also launching a rental assistance demonstration to preserve 255,000 homes supported by our public housing, RAP, Rent Sup and Mod Rehab programs.

The demonstration is just one piece of this preservation strategy - and we want to work with you to shape it.

One of our shared goals is preservation - a stable funding mechanism for HUD-assisted housing that includes both public and private funds.

So long as they ensure permanent affordability and strong resident protections, we are open to any number of mechanisms to make that possible - from converting ACC operating subsidies to Project Based Rental Assistance or Project-Based Vouchers, whichever better helps respond to local needs and circumstances.

Another goal is one-for-one replacement. As with Choice Neighborhoods, it's important that these changes add to our affordable housing stock - and not put hard units at risk.

And perhaps the most important goal is creating more access to opportunity for the families we support - and that must include a resident choice—or mobility—option.

In the coming weeks and months HUD will be reaching out to you, other stakeholders, and the Hill to shape this demonstration.

We come to it with an open mind and a willingness to try strategies that weren't a part of the discussion last year. And we hope you do, too.

By working with stakeholders like you, we believe this demonstration will represent an important first step toward preserving this housing for future generations.

For you, this strategy means supporting your communities' ability to preserve your homes and new funds to make much-needed repairs.

It means making it easier to transfer homes at risk of falling out of the affordable housing stock to owners with a history of successfully preserving affordable housing.

It means that your communities will have the new revitalization tools and funding they need.

But more than anything else, this strategy means you have a government on your side - that will work with you to preserve the affordability of your homes.

And it's long past time you had that.

Winning the Future Starts at Home

Ultimately, all these efforts are about the same thing:

Ensuring that every American can play a meaningful part in winning the future - whatever zip code they live in.

As President Obama has said time and again, there's a reason change doesn't happen overnight:

It's because change is hard.

For all the faults of the status quo, it's the one we know.

It's the one we're used to.

But when it comes to the five-and-a-half million households in this country that depend on HUD assistance to pay the rent, I believe we not only can do better - we must.

With all our challenges, we need to harness all of America's talent and energy to help us solve them. We can't be leaving a whole generation of children behind in our poorest neighborhoods.

Not now.

Not with so much at stake.

And not with all the proven tools we have to build a better, fairer system - one that can provide more opportunity and more stability for every family who relies on it.

That is we are fighting for. That is what our budget is about - and that is what winning the future is about.

And with your partnership, I'm confident we not only can build that system - but will.

Thank you for this opportunity - and for everything you do. I look forward to continuing our work together in the weeks and months to come.

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