Prepared Remarks of Secretary Shaun Donovan at the National Housing Conference/Center for Housing Policy "Solutions for Sustainable Communities" 2011 Learning Conference

Washington, DC
Wednesday, September 28, 2011

Thank you, Jeff – for that really generous introduction. And thank you to the National Housing Conference and the Center for Housing Policy-particularly Conrad Egan- for your commitment to affordable housing and to partnering in new ways to bring opportunity to our neighborhoods.

It's always great to be back among friends – among so many planners, local officials, non-profit and for-profit developers. Having served on NHC's board, I know the kind of leadership and advocacy you've been providing communities for nearly eight decades.

And whether it's innovations in energy-efficient affordable housing, or leading the fight for sustainable communities, I know that you're always pushing forward – and always on the cutting edge.

In fact, it was NHC that reached out to me in the early days of the Administration – asking HUD to begin moving in a new direction when it came to sustainability and to linking affordable housing to transit and job centers.

You recognized that more and more communities are planning that way.

And your efforts showed us that it wasn't just advocates in the green or environmental community who understood these issues and were seeking these tools, but the wider affordable housing community as well.

Of course, when I spoke to so many of you in Chicago two years ago, I told you then that too often, HUD hadn't been a catalyst for this kind of change – but rather, a barrier to it.

Well, I'm proud to say that under the Obama Administration, with your help it's changing.

This morning, I want to talk to you about how the Obama Administration has embraced sustainability – and started infusing it into all our work.

I want to discuss why we need to keep pressing forward with this new way of doing business at this economic moment.

And I want to describe to you why through a new Project Rebuild, we have an opportunity to take this work to an unprecedented scale.

Forging Sustainable Communities

Certainly, all of this work is taking place in the aftermath of the worst economic crisis our generation has ever known.

When President Obama took office, we were losing 753,000 jobs per month. Housing prices had cratered for 30 months straight. And foreclosures were setting records month after month.

Job number one was clear: to keep our economy from falling off a cliff.

But this crisis didn't just appear overnight. The "drive to qualify" frenzy of the housing bubble years had been forcing families to move further and further away from job centers simply to find a home they could afford – leaving behind sprawling residential areas with few jobs, long commutes and little economic engine to support housing prices.

And that wasn't the only problem. President Obama often says that one of the keys to winning the future is out-innovating our competitors.

But American businesses, large and small, couldn't do that when their workers were spending 52 cents of every dollar they earned on housing and transportation combined and moving products on our roads cost them five times as much wasted fuel and time as it did 25 years ago.

And so, addressing this crisis couldn't just be about helping communities today. We also had to help them plan for the challenges of tomorrow.

That's why HUD forged the historic Partnership for Sustainable Communities with the Department of Transportation and the Environmental Protection Agency to support communities in planning for strong regional growth.

Indeed, in a world where the old city-suburb dynamics are breaking down, HUD's sustainability grants recognize that it is our metros that are the hotbeds of innovation – generating 90 cents out of every dollar, 85 percent of jobs and over 80 percent of our patents and exports.

I know some have suggested this is Urban Renewal 2.0 – a return to the era in which the Federal government told communities what to do and how to do it.

But in a community like Austin, Texas, you can see how these grants aren't about one-size-fits-all rules – they're about encouraging creative, locally-focused thinking.

With a $3.7 million grant from HUD as the catalyst, Austin is linking its long-term regional transportation plan to 37 mixed-income communities near transit and job centers.

They're tying new workforce housing to a planned trucking and rail transportation hub near the airport that will employ 2,000 people.

They're helping 3,000 family-run, small businesses expand by making that expansion contingent on hiring people put out of work by the recession.

Austin estimates that HUD's sustainable communities grant will help create at least 7,000 permanent jobs and thousands more in the construction sector, generating an additional $1.1 billion of economic growth over the next five years and saving the taxpayer $1.25 billion.

And the demand for it explains the extraordinary interest in our grant program – and it wasn't just coming from our largest metro areas.

Indeed, when we announced the availability of these planning grants, we were inundated with applications from every state and two territories – from central cities to rural areas and tribal governments.

Over half of our regional grants were awarded to regions with populations less than 500,000 and rural places with fewer than 200,000 people – and winners included rural counties in central Florida, Appalachian communities in western North Carolina and Native American tribes in Wisconsin and South Dakota.

And at every stop I've made across the nation, from Chicago to Indian Country, you can feel the excitement and bipartisan interest about this partnership at the local level – even among communities that haven't yet won a grant. In fact, we received over 500 applications for the $100 million in funding available this year– the winners for which we will announce in the coming weeks.

This demand reminds us that as history-making as these grants are, we aren't going to build more sustainable communities with $270 million.

That's why you asked us to begin integrating "location-efficiency" into our programs to help communities invest in housing near jobs and schools.

And I'm proud to say we have for the first time in the history of federal grant competitions, we are – using the "LEED-ND" green neighborhood rating system the US Green Building Council developed in partnership with the Natural Resources Defense Council and the Congress for a New Urbanism.

And we're not done yet. By designating regions who have demonstrated they are making real progress moving toward sustainability with "Preferred Sustainability Status"-that is, places which are planning comprehensively, partnering with the private and third sectors, and charting a competitive path forward-grantees will receive "bonus points" when it comes to how HUD scores its competitive grant applications.

And we are in conversations with our partners at DOT, EPA and the Economic Development Administration within the Department of Commerce about how this status might extend to their competitions as well.

Finally, we recently awarded a contract to develop a Housing and Transportation Affordability Index.

After a crisis that has put the American Dream at risk for responsible homeowners across the country, it's time we provided consumers with the information they need to buy homes in the sustainable communities they want for their families.

Building More Sustainable Neighborhoods

As important as planning at the regional level is to winning the future, this audience knows how inextricably linked a region is to its neighborhoods.

Today, more than 10 million people live in neighborhoods surrounded by disinvestment, failing schools, troubled housing, and little opportunity.

Research shows that one of the most important factors in determining whether or not children will do better financially than their parents is not talent, or even education – but whether or not they grow up in a high-poverty neighborhood.

In fact, we can predict health, economic, and educational outcomes of children based on their zip code.

That's a tragedy – and it's why we launched Choice Neighborhoods.

Choice Neighborhoods builds on the HOPE VI public housing revitalization program pioneered by HUD Secretaries Jack Kemp and Henry Cisneros. With strong bipartisan support, HOPE VI has created nearly 86,000 homes in healthy, mixed-income communities that were once troubled by distressed public housing – leveraging twice the federal investment in additional private development capital and raising the average income of residents by 75 percent or more.

With Choice Neighborhoods, communities will be able to use proven mixed-finance tools to transform not just public housing, but all kinds of federally-supported housing in high-poverty neighborhoods.

Of course, as important as Choice Neighborhoods is, you and I both know it's really only the beginning of a larger effort to preserve these homes for future generations.

The truth is, we can't help you transform public housing with just a few grants a year.

That's why, through a $200 million rental assistance demonstration, we intend to bring the principles of diverse, mixed-use, mixed-income communities to neighborhoods across the country as we preserve the affordability of more 200,000 publicly-owned homes – creating as many as 115,000 jobs.

With these efforts, the Federal government is finally acknowledging something what everyone in this audience knows:

We can't compete if we're leaving behind our poorest kids in our poorest neighborhoods.

We can't win the race to educate our kids with 20 percent of children living in poverty, costing a stunning $500 billion a year and consuming 4 percent of GDP.

But with tools like these, President Obama is saying that America is not just going to place in that race.

We're going to win it.

Of course, as big of an impact as these tools have had the last two-and-a-half years, in the current budget environment, we will need to fight for them.

As many of you know, Senator Menendez has introduced two bills that would authorize our Office of Sustainable Housing and Communities and Choice Neighborhoods into law.

At the same time, the House Appropriations Subcommittee recently proposed eliminating funding for these programs.

And I am asking you today to support not only Senator Menendez's legislation but also funding for these efforts – so that neighborhoods and regions across the country have the safe streets, good jobs, and the quality schools that every family needs.

You've helped us make the case for how important the HOME program is to our communities. And I want to thank you for it.

But we need your help again – to make the case that, these small investments yield big results for jobs and our economy.

We need you to let Congress know they're based on proven records of success.

And we need you to let them know that this is about leveraging private dollars – getting them off the sidelines and into our economy.

A New Project Rebuild

But even in this budget environment, as tough as it is, we're not playing defense when it comes to smart investments we need to win the future.

Indeed, in the President's speech before Congress earlier this month, he proposed what I believe is one of our biggest opportunities to build more sustainable communities when he introduced Project Rebuild that would create 200,000 jobs as part of the American Jobs Act.

Through three rounds of neighborhood stabilization funding, we've helped communities turn vacant and abandoned properties into the affordable rental housing families need – and a crisis into an opportunity for change.

By helping them forge partnerships with financial institutions and non-profits, these efforts are on track to support nearly 90,000 jobs and address more than 95,000 vacant and abandoned properties, including nearly 50,000 affordable homes.

Let me take a moment to explain how Project Rebuild would innovate on the success of these efforts.

First and foremost, of the $15 billion President Obama has proposed for Project Rebuild, $5 billion would be competitively awarded – and for the first time, it would allow for-profit organizations to apply directly for funds.

While non-profits could apply directly during the second round of the neighborhood stabilization program, as many of you know, for-profits could only apply if they had a public partner.

Project Rebuild would ensure the private sector institutions who have participated in neighborhood stabilization are full partners in this transformation.

Secondly, it would allow for the rehabilitation of vacant commercial properties.

Across the country, we've seen how it's not just abandoned homes that can drag down an entire neighborhood – but vacant commercial properties as well.

That's why Project Rebuild would allow commercial redevelopment essential to neighborhood revitalization to be funded directly – allowing for more mixed-use development in hard-hit neighborhoods.

And so, Project Rebuild's inclusion in the American Jobs Act not only reflects President Obama's belief that rebuilding neighborhoods is essential to rebuilding our economy – it also represents an important opportunity to accelerate the work we're doing together to build more sustainable communities.

I mentioned earlier in my remarks that it's no coincidence that the neighborhoods that faced the brunt of the economic crisis and had the highest foreclosure rates and the deepest job losses, were the most unsustainable – with the least access to transportation, the most troubled schools and the least economic opportunity.

From Columbus, Ohio to Phoenix, Arizona, we've seen communities use existing neighborhood stabilization funds to green homes, invest in energy-efficient technologies and adopt sustainable building practices that save families money and strengthen the resiliency of neighborhoods.

Well with Project Rebuild, these communities will not only have additional funding but new tools to bring these innovations to vacant commercial properties encouraging more mixed-use development in our hardest-hit communities.

For sprawling cities like Atlanta, neighborhood stabilization efforts have provided a real opportunity to fundamentally re-think land use and better link housing investments with jobs, schools, and transportation.

In places like these, communities will be able to combine Project Rebuild and HUD's sustainability planning grant resources to spur transit-oriented development, more closely connect housing to job centers and speed job creation.

We need your help to bring these efforts together on the ground – to combine efforts in ways that leverage private dollars and create the biggest impact for jobs and families.

Smart Government, Sustainable Communities

All of these efforts are based on a simple idea:

That when you choose a home, you don't just choose a home. You also choose schools for your children, transportation to work, and public safety.

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

They're not about government that's big or government that's small.

They're about government that's smart.

They're about recognizing that doing more with less isn't about doing nothing at all.

It's about doing what works – finding new, innovative ways to solve three or four problems with a single investment.

That's smart government.

It's about recognizing that if the challenges we face-whether they're housing, transportation, or economic-don't exist in isolation from one another – then government shouldn't either.

That's smart government.

And it's about using proven tools that bring private capital off the sidelines so that no child's future is determined by the zip code they grow up in ever again.

That's smart government – and it's the approach President Obama and I are fighting for with you.

So thank you, NHC and the Center for Housing Policy – for everything you've done to get us this far. And for continuing to push forward. Thank you.


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