15th Annual Puerto Rico Housing Congress
PREPARED REMARKS FOR
DEPUTY SECRETARY ROY A. BERNARDI
SAN JUAN, PUERTO RICO
WEDNESDAY, SEPTEMBER 19, 2007
Thank you. Good morning. I am so pleased to be here. This is my third conference with you, and each time I have learned much from the experience and your collective wisdom.
I am also pleased to speak to you in the language of Cervantes and Gabriel Garcia Marquez. As a child I grew up in a home where Italian was spoken...and cherished. My family came from Northern Italy. That is my genetic linguistic heritage. But as a student I discovered the beauty and grace of Spanish, which became a language I loved and admired. I started my career as a teacher of Spanish, watching my students retrace my own voyage of discovery. They found, as I did, a rich cultural and historical heritage, with the finest poetry, literature, art, and music.
And each time I come to San Juan, I stand at the harbor and listen to the waves, because I hear words come over the water, words first spoken in Andalucía, or Catalonia from the east, or high in the mountains of Peru or on the pampas of Argentina from the west and south.
And I am pleased to join you in a discussion of housing, because it means so much to each of us, and to the national and world economies. Hispanic culture prizes homeownership. We have a special relationship to our dwellings. I have noticed that Spanish-language writers often talk about their homes. I mean that...they talk about their homes like a member of the family. In our shared culture, a house is a home...and all that means. It is more than a shelter. It is a place where we live and love and watch our families grow up and grow old. It is a place where we invest our time, our talents, and our income. One author said that Spanish-speaking people have a "sacred, spiritual" feeling about their homes. I agree. I remember the poet Octavio Paz writing about his boyhood home. He described the house in great detail...as if it were a person. And looking at the ruins years later, he wrote these lines about the building and his memories:
"The stone is silent, the soul, suspended in a moment of time..."
I think we understand him only too well. The link between our homes and our soul is eternal, always there, always suspended in a moment of time.
So I believe that there is an imperative in housing. It is something we must make a strong, profound priority in our work. Housing is a testament of our humanity, our concern, and our unity. Our homes may be rented or owned, humble or grand. But they are a part of our lives and our world. And we even measure our wealth and economic power through housing. It is a recognized symbol of our national wealth and pride. It is a source of financial security through equity. It is a part of the American Dream.
Today, we meet to discuss matters like affordable housing. This is the largest component of HUD's budget.
For example, the HOME Investment Partnerships Program is one of our most successful efforts. Since 1992, more than 600 communities have built almost 762,000 affordable housing units. These funds help finance land acquisition, new construction, rehabilitation, down payment opportunities, and rental assistance.
Another effort is HUD's Housing Choice Voucher Program, which is providing approximately two million low-income families with subsidies to obtain affordable housing. This is a substantial national commitment.
Earlier this year, the President proposed eliminating the cap on the number of families each housing authority is allowed to assist. By better utilizing all appropriated funds, this change would allow the program to assist at least 180,000 more families. Think what that will mean for each of those families. It is a smart move...makes government more responsive and gets more assistance for the money.
The President also wants to make sure that housing tax credits are preserved. Each year, housing tax credits produce about 100,000 affordable units. Since its inception in 1986, tax credits have funded more than 1.3 million affordable units of housing.
HUD will also continue its successful implementation of the Public Housing Capital Fund Financing Program. As you know, this program allows public housing authorities to borrow from banks or issue bonds using future Capital Fund grants as collateral or debt service.
And I want to add that seniors and Americans with disabilities deserve independent lifestyles without having to worry about affordable housing. The President has proposed a significant change that would eliminate regulatory barriers to mixed-finance arrangements, including low-income housing credits and other creative options to help develop more units of affordable housing.
These are all important actions and I strongly urge Congress to pass the President's requests as it takes up our appropriations bill this month!!!
So far, I have spoken of actions that would come from Washington. But there is much that we can do together on the community level. All across the country we see burdensome regulations, excessive fees, and out-of-date building codes as barriers to affordable housing. Development is often expensive, and that expense is passed on to the renter or homebuyer. HUD studies show that excessive regulations can increase the cost of housing by 35 percent - maybe more!
In this century, our citizens expect us to do better. They want a modern, efficient, compassionate, and effective government response. In a computerized, digital, virtual age, people expect the government to be pro-active and ahead of the curve, not reactive, buried in bureaucracy.
So HUD created an effort called "America's Affordable Community Initiative." We did this in 2003. The program is working with state and local governments to cut red tape and reduce regulatory barriers. In fact, over 120 communities have heard this call for action and are taking steps to remove excessive and burdensome regulations. The Commonwealth of Puerto Rico and the Municipality of Carolina have joined us in this initiative.
I know we can work together. There is much we can do. In the past few years we have created a strong and productive partnership between HUD and the people of Puerto Rico.
At HUD, we want to make help create an environment that will give our citizens more opportunity for economic advancement and help them achieve economic empowerment.
As you know, there has been much concern about the housing market. We have reached historic levels of homeownership in our country, as high as 70 percent of American families own a home according to some estimates. But the difficulties in the sub-prime market threaten to undo our progress.
I would like to say a few words about this. The problem is not with all mortgages...just a small percentage of the sub-prime mortgages made between 2005 and 2006.
The Federal Housing Administration has already stepped forward and helped hundreds of thousands of sub-prime borrowers refinance under FHA. Thanks to actions taken by the President earlier this month, through a program called "FHA Secure," we can now offer more flexibility to help more families stay in their homes. FHA can now reach out to more people to refinance, and it will now charge mortgage insurance premiums based on the individual risk of each loan. We can help almost one-quarter of a million people stay in the homes through our FHA-backed loans.
The President has also asked Congress to pass a FHA Modernization bill, which would lower down payment requirements and allow FHA to insure bigger loans for hundreds of thousands of borrowers. Currently, FHA is simply not an option for people living in high priced housing markets. Such legislative action would be extremely helpful because we can help so many families avoid predatory, unscrupulous loans. It is long overdue. The President has asked for FHA reform for several years, long before the sub-prime difficulties really surfaced. And I would remind you that FHA has a backed a large number of loans to Hispanic/Latino borrowers. It has been a good friend to the Hispanic community.
The President has also proposed that Congress change the tax code to provide more relief to families confronting a cancelled mortgage debt.
There are some who have argued that the President should just let troubled sub-prime borrowers go under. Well, many of those in trouble had good credit scores before the sub-prime loans reset. It makes sense to help them, especially given the fact that the President's actions will impose no cost to the taxpayer.
I have spoken of administrative and legislative changes. In addition, we must vigorously prosecute predatory lenders. These lenders have created much of our difficulties through unethical and illegal practices. They have specifically targeted Spanish-speaking immigrants to the United States, knowing that these new citizens may not understand our lending laws, and abusing their trust. Many of those assuming a sub-prime loan do not even understand the contracts.
That is why we also need to better utilize the nation's housing counselors, especially those who speak Spanish. New borrowers need to know what they can afford. They need to understand what they sign.
Frankly, we need more efforts at financial literacy. The President has mobilized several executive departments to work to enhance financial literacy. That is a good idea.
As the sub-prime issue has unfolded, there are some who have said that we should not try to increase the number of homeowners, as if there is a limit to the number the economy can support. But homeownership is close to 80 percent in Ireland and Spain. We can go higher. A former member of the Federal Reserve Board recently said that "eliminating the sub-prime market is exactly the wrong lesson to take away" from our current situation. Rather, we need to address the problems we have encountered, and learn from this experience. We cannot shut down avenues to the American Dream. Rather, we need to have a more thoughtful and rational approach to lending practices.
I have spoken of a wide scope of housing issues, from the homeless to renters to homeowners to those threatened with foreclosure. And each situation - each person - matters in our deliberations and in our actions. For each person deserves our respect, our regard, and our belief in them.
Housing is a vast enterprise, bringing together a wide array of talents and backgrounds to meet human wants and needs. It is noble and vital work, asking for our very best efforts. It asks us to open our minds and our hearts.
And so I have come to Puerto Rico with these thoughts. As I said at the outset, there is much to learn and much to share. Puerto Rico is a bridge between the Old World and the New, between the culture of the Spanish-speaking and English-speaking peoples of our hemisphere. Puerto Rico is also a gateway of new ideas and innovative solutions, a source for multi-cultural interaction and new ways of thinking.
I am mindful of the wise words of the great novelist Carlos Fuentes. He said, "When we exclude, we betray ourselves. When we include, we find ourselves." I want to thank you for your inclusiveness, your hospitality, and your counsel. I have come to San Juan to share our common commitment, our deep and steadfast resolve to our citizens. For I believe that in doing this, Fuentes is right...we "find ourselves."
Thank you, my friends. God bless.
Lea la version de este discurso en Espanol