Prepared Remarks of Secretary Shaun Donovan at the OSHC Sustainable Communities & Economic Development Grantee Summit

U.S. Department of Transportation, Washington, DC
Thursday, October 20, 2011

Thank you, Ray, for that introduction and for your leadership.

For the last two-and-a-half years, Ray has been an extraordinary partner, as the Obama Administration works to provide communities the tools they need to grow.

And speaking of extraordinary partners, we all owe a debt of gratitude to HUD's Shelley Poticha, who has worked so hard to help you make the promise of sustainability real in your communities.

So it's great to be before you all today -- just a year since HUD and our colleagues at DOT and EPA awarded the first round of Sustainable Communities grants to the local partners in this room.

I know this past year has been an exciting one -- not just for you, but for all of us at the federal level. We see the innovative work you're doing to lay the foundation for the 21st century economy in our towns, cities, and regions.

And we see how you're using these new tools to solve old problems -- creating a model for local leaders who are trying to tackle challenges that have been years, even decades, in the making.

That's why I want to talk to you today about why the Obama Administration sees sustainable communities as the engines of job creation and economic growth.

I want to acknowledge how you are using the new tools we've given you in creative, innovative ways to drive growth in your communities. 

And I want to discuss how the American Jobs Act proposed by President Obama represents the next step in taking this work to scale, so that regions around the country can use your example to spur growth in their communities and ensure that all families can be a part of winning the future.

Sustainable Communities as Economic Engines

Certainly, this work has never been more important than it is right now, as we continue to recover from the worst economic downturn since the Great Depression.

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.

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.

Indeed, 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.

That was particularly true for communities facing seemingly entrenched, long-standing challenges -- from families trapped in neighborhoods of concentrated poverty to cities in distress that lack the institutional capacity to solve their toughest problems, to exurbs where families face huge travel distances to reach their regions' centers for growth.

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.

To do that, our communities needed more than just resources, as important as those are. 

And they certainly needed more than the "command and control" federal approach that once defined the Urban Renewal movement -- an approach that failed to recognize that different communities face different challenges and need different tools.

Instead, what our communities required was a new kind of federal partner -- one that could, as Ray likes to say, start to lead the charge and set the pace for change.

That's why the Partnership for Sustainable Communities was forged, as HUD, DOT, and EPA united to support communities in planning for strong regional growth.

With the creation of the Partnership, for the first time localities had a federal ally that understood the scope and breadth of the challenges our communities and regions face.

An ally that understood we can't grow our economy the way we need to as long as American families spend 52 cents of every dollar they earn on housing and transportation costs.

And a federal catalyst for change that sees the economic potential we can unlock when localities act as integrated regions -- when communities that share problems can finally start sharing solutions.

The demand for that kind of partnership, and those kinds of catalytic, silo-breaking tools explains why we were inundated with applications for our planning grants from every state and two territories -- from central cities to rural areas and tribal governments. 

In contrast to the old "one-size-fits-all" way of doing things, our new approach allows grantees to use these tools as they see fit. 

For instance, while our grantees in Boston are using New England's long-standing and unique "home rule" traditions to spur collaboration on the region's MetroFuture smart growth initiative, grantees in Charlottesville, Roanoke, and Blacksburg, Virginia are bringing all voices to the table--even opponents of regional planning--as they move forward on their development plans.

But our partners have used these tools to do more than simply break down barriers to collaboration -- through this smart government approach, you've shown how communities can break down barriers to economic growth.

And you've done it in four critical ways.

The first is leveraging the private sector. Indeed, as the Recovery Act has shown us, opening our programs to private partners and using competitive dollars can create a race to the top in creating sustainable communities. 

A third of HUD's Recovery funding was used to green our housing stock -- and the most competitive dollars were available at one time in HUD's history. As a result, we're on track to green over 245,000 homes. 

Of course, we aren't going to build the sustainable communities our families need on Recovery grants alone -- or with government dollars alone.

That's why our sustainability awards are challenging partners like the Sacramento Council of Governments to use the advanced data analysis tools they need to work closely with the business community in building a comprehensive economic development strategy.

In Flint, Michigan, which was struggling long before the recent economic crisis, the city's Economic Development team is partnering with local businesses to hire staff with the expertise needed to modernize its building codes and zoning laws -- and update the city's master plan for the first time in 50 years.

Places like Sacramento and Flint are demonstrating why private sector participation is critical to not only getting private sector dollars off the sidelines and into our economy, but also why civic leadership is essential to sustainable communities. 

The second way you have demonstrated how sustainability can drive growth is by reducing the combined costs of housing and transportation. 

Communities can't attract the private investment they need to compete when it costs businesses five times as much wasted fuel and time to move products on our roads as it did 25 years ago -- and their employees have to live further and further away from job centers to find affordability. 

That's why in places like Denver, local partners are working to connect thousands of residents to the economic heart of the region by aligning affordable housing and commercial development with the new West Corridor light rail line.

And to ensure every community and consumer has the information they need to buy homes near good schools and jobs, at HUD, we are working on a Housing and Transportation Affordability Index.

But it's not just about getting private capital off the sidelines -- it's also about getting all of our talent on the field. 

America can't compete if we're leaving behind our poorest kids in our poorest neighborhoods -- with 20 percent of children living in poverty, costing a stunning $500 billion a year and consuming 4 percent of GDP. 

That is why the third way you are showing that sustainable communities are engines of economic growth is by reducing the number of neighborhoods of concentrated poverty.

In New Orleans, we've seen how a combination of a HUD Challenge and DOT TIGER II Planning grants is leveraging and tying together investments in affordable housing, healthcare, and federal disaster funding to transform Claiborne Corridor and reunite a community that had literally been cut in half by the construction of an overpass.

That work complements a grant HUD recently awarded New Orleans through the Choice Neighborhoods initiative, which is bringing to bear mixed-use, mixed-income tools to create strong communities in distressed neighborhoods.

With its grant, New Orleans will revitalize public housing in the Iberville neighborhood and connect its families to the opportunity and choice they need to win the future.

Of course, none of these challenges can be tackled neighborhood by neighborhood, block-by-block.

Indeed, in a world where America's metros generate 90 cents out of every dollar, 85 percent of jobs and over 80 percent of our patents and exports, the fourth way sustainable communities can drive economic growth is by planning at the regional level. 

And in regions from Austin, Texas, to Greenville, South Carolina…from Chicago to Kansas City…you're doing just that.

For all the different challenges you may face, each of our grantees has something in common -- you chose the right partners, the right approach, and the right vision for success.

But to really drive sustainability principles at scale, we need to think bigger than sustainability grants alone. 

That's why we've begun to integrate "location-efficiency" into our programs with the "LEED-ND" green neighborhood rating system -- helping communities invest in housing near jobs and schools.

And by giving regions who have demonstrated they are making real progress moving toward sustainability "Preferred Sustainability Status" bonus points on their grant applications, HUD is rewarding communities that "get it" -- and are ready to do it. 

But as you all know, some communities need more help than that -- particularly those that offer promising local visions but lack the strong capacity to see them through.

That's why this summer, we unveiled the Strong Cities, Strong Communities pilot initiative to build capacity in 6 distressed cities and regions -- using technical assistance and existing local resources to train the next generation of leaders in smart government.

Of course, as big of an impact as all these tools have had the last two-and-a-half years--and as much promise as they've shown--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.

Taking These Lessons to Scale With Project Rebuild

For all these successes, this is a different moment that requires more -- one that requires us to accelerate the pace of change and speed of economic recovery. 

That's why the President has introduced the American Jobs Act, including a new Project Rebuild that would not only create 200,000 jobs -- but offer one of our biggest opportunities to build more sustainable communities.

Project Rebuild would build on existing neighborhood stabilization efforts with new innovations, such as allowing for-profit organizations to apply directly for funds and ensuring that businesses who have participated in neighborhood stabilization efforts can be full partners in this transformation.

And by allowing for the first time the rehabilitation of not just of vacant and abandoned homes, but vacant commercial properties, it would also provide the spark entrepreneurs need to start small businesses and create jobs.

Indeed, 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.

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 our sustainability resources to spur transit-oriented development, more closely connect housing to job centers and speed economic recovery.

That's the potential the American Jobs Act has to push the sustainability agenda forward -- and it's why we need you to help us fight for it.

A Call to Action for Smart Government

As all this work demonstrates, you have made extraordinary progress.

But we know the job's not over -- particularly when it comes to breaking down barriers to opportunity at the regional scale.

And just as we in the Federal government are working to align our requirements with those needs at the regional level, we hope you will forge ahead with us by building on the equity assessments you already do -- and opting in to the Regional Analysis of Impediments to Fair Housing. 

All this work reminds us that smarter planning is key to growing our economy -- and why the most successful communities are the most sustainable communities.

It reminds us that "fiscal responsibility" doesn't simply mean cutting resources -- but using smart government to solve three or four problems with a single investment.

And now we need you to bring that message to leaders around the country.

We need you to tell them that if our toughest economic challenges--from jump-starting private investment and reducing housing and transportation costs for families, to the scourge of concentrated poverty--don't exist in isolation, government can't either.

That supporting creative local approaches to spur growth and solve problems is a bipartisan solution, with bipartisan support.

And that different places have different needs -- and require a federal partner with the flexibility to respond to them.

That's the approach our communities will need to grow.

It's the approach our families will need to win the future -- and it's the approach President Obama and I are fighting for with you.

Thank you for coming here today -- and I look forward to taking your questions.

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