Thank you for inviting me here this morning. I am glad that this conference has drawn such a cross-section of individuals and organizations concerned about housing in this country. I respect your work, and it is always a pleasure to meet with you.

Mayor Menino, I appreciate your introduction. In the Bush Administration, we are passionate about the work we do every day to help families find affordable housing. Mayor, I am delighted that somebody else has joined us in this mission, and I welcome you aboard. I commend you for making affordable housing a top priority of the U.S. Conference of Mayors.

Let me begin my remarks this morning with a thought that I usually save for the end of a speech. I want to stress - right up front - that with all of the work ahead of us, and all the families who are depending on us, there is no room in the housing debate for partisan politics. Meeting the housing needs of this country demands bipartisan cooperation.

Before coming to HUD, I served in elected office at the local level in Florida - as the County Mayor of Orange County in Orlando, which has a population of nearly one million. My own experiences in handling the same concerns that mayors deal with daily reinforced my belief that local problems need local solutions.

I respect the right of local communities to make their own decisions and I understand the importance of having a federal government that supports, but does not interfere.

You have our support - my personal support, the support of the Department of Housing and Urban Development, and the support of this Administration - in working to preserve our cities as vibrant hubs of commerce and make our communities better places to live, work, and raise a family.

As your ally, I have met with mayors from across this country during the past 16 months. I have visited your cities and toured your housing developments - the successes, and the troubled areas that we have pledged to work together to revitalize. I have talked with hundreds of your citizens about their dreams for their communities and seen their pride in the new homes they are living in today thanks to the help of HUD.

The HUD budget we have proposed for the coming fiscal year is $31.5 billion. This represents an increase of 7 percent over the previous year. During a year in which the needs of war and the cost of homeland security are consuming so many of our resources, HUD was the only domestic agency to receive a budget increase. The fact that President Bush increased the HUD budget by 7 percent in this particular year says a great deal about the commitment of this President, this Administration, and myself to meeting the housing needs of the American people.

Let me tell you just some of what we have been doing at HUD for the past 16 months, because we have been extremely busy:

We are helping more families than ever before reach the American Dream of homeownership.

We named 40 communities to the Administration's new Renewal Community initiative, to encourage economic development and promote affordable housing.

We began reform of the homebuying process, to make it less expensive and less complicated for consumers.

We are taking aggressive enforcement action against predatory lenders.

We are helping more families find affordable rental housing because we increased the loan limits for FHA multi-family insurance for the first time since 1992.

We cracked down on lenders charging illegal fees during the settlement process.

We redeployed HUD's resources to better serve you at the local level.

We made HUD more user friendly.

We vowed to end chronic homelessness within the next decade, and got the support of the White House to reactivate the Interagency Council on the Homeless.

And we have dedicated tremendous energy and resources to helping New York City rebuild and recover following the terrorist attacks.

I am proud of all that we have accomplished, and the way in which we have touched so many lives. There is no question that housing challenges remain, but this Administration is focused on meeting them. To do so, the federal government will need more than just your support - our local communities must be actively engaged.

Clearly, the federal government has a role in helping to address housing affordability in this country. We provide tax credits to stimulate rental housing construction and rehabilitation, block grants that can be used for housing production, rental assistance to low-income citizens, and insurance and guarantee programs.

But ultimately, decisions that you make at the local level have the greatest impact on the cost and availability of housing.

In my home state, as many as 15 builders used to provide affordable housing in the central Florida counties of Orange, Seminole, and Osceola. Only three are building affordable housing today because there is simply no profit in it anymore. And there is no profit in it largely because local governments have made it unprofitable.

By the time builders in Florida buy the land, factor in the cost of complying with new building codes and regulations, pay the housing impact fees, buy their building permits, the added cost of governmental regulation can place it well beyond the reach of low-income buyers.

That leaves builders with four choices. One… they build, but only if they can find extremely inexpensive lots. Two… they build, if government provides enough subsidies to knock down the price. Three… they build in areas so remote that buyers end up living far outside the job market.

Or four… they do not build affordable housing at all.

The fourth option is the choice most builders are making.

The situation in Florida is a microcosm of what we see happening in cities across the country. Not every city, of course, but many. When a teacher cannot afford to live in the community he or she serves, or a young couple cannot afford a home close to their jobs, or an elderly parent cannot afford even a small apartment near her children, these are symptoms of a larger problem.

Whether by intent - through the so-called "not in my backyard" syndrome of exclusionary zoning, expensive building fees, and burdensome regulatory barriers - or unintentionally, local governments are often driving up housing costs and driving out affordable housing. In many instances, communities with the most restrictive land use and zoning regulations have affordable housing shortages. A city like Portland, Oregon, with its stringent regulations, immediately comes to mind.

As a strong advocate for letting state and local governments do their work with a minimum of federal interference, the last thing I would do is try to tell you how to do your jobs. But as someone who used to serve on the local level, I always felt that the solution was for government to be the catalyst for change, while allowing market forces to do their work.

We should be asking ourselves how we can encourage - not discourage - market forces to create affordable housing.

One thing I can say with certainty - and this is a cornerstone of President Bush's philosophy - is that the solution to meeting the nation's affordable housing needs will not come out of Washington.

I have traveled across this country discussing housing affordability since my appointment as Secretary. The only constant I have found from city to city is the fact that things are different everywhere. The specific housing needs in Denver are going to be very different from those in Dubuque. What Boston considers to be a serious problem may not be a problem at all in Bakersfield. When it comes to housing, there are different degrees of seriousness, and the solutions vary depending on the specific communities.

The nation is simply too large and too diverse to lump under any single federal solution. Individual problems demand an individual response. The decisions that you make on the local level are going to have the greatest impact on whether your community has enough affordable housing to meet its needs.

This is likely to be a fundamental message of the Millennial Housing Commission when it releases its report.

While we have yet to see a final report, a major theme the Commission heard repeatedly is that housing issues are predominantly local issues. Success in meeting the nation's affordable housing needs depends on devolving decision-making authority to the state and local level. No one is in a better position to address a community's specific affordable housing concerns than the community leaders themselves.

Of course, the finding that housing issues are primarily local issues makes the work of America's mayors all the more important. I look forward to reviewing the report thoroughly, and working with Members of Congress and local officials to see how the Commission's hard work can be translated into real progress for American families.

Whatever the Commission does or does not say in its report, I want you to know that this Administration shares your concerns about the availability and affordability of housing in this country. One way we are taking action is by helping more families own their own home.

June is going to be exciting and very busy for HUD. For the first time, we are dedicating an entire month to celebrating the benefits of homeownership. Communities across the country will mark National Homeownership Month with homeownership fairs and other special events. The White House will be actively involved. We invite your communities to get involved as well.

HUD is actively promoting affordable homeownership. As I visit cities around the country, mayors frequently tell me about the transforming power of homeownership on both families and communities. I want to highlight five of HUD's homeownership initiatives that we think have tremendous potential.

First… We are working to open the doors of homeownership to more low-income families by helping them overcome one of the biggest hurdles: the down payment. Each year, the new American Dream Downpayment Fund will help 40,000 first-time, low-income homebuyers achieve a home of their own.

Second… The HUD program that supports organizations like Habitat for Humanity has made homeownership a reality for thousands of families. We are tripling funding for the Self-Help Homeownership Opportunity program to $65 million next year.

Third… Another initiative that we are excited about helps low-income families make the move from Section 8 housing to homeownership by allowing them to put up to a year's worth of their rental vouchers toward a home down payment.

Fourth… I have undertaken comprehensive reform of the Real Estate Settlement Procedures Act. My goal is to improve the mortgage process so that consumers get simpler, clearer, and earlier disclosure - and have the opportunity to shop for the best mortgage to meet their needs, at a lower cost.

And fifth… The increase in sub-prime loans - and the corresponding rise in cases of predatory lending - have made financial literacy more important than ever. We plan to make housing counseling a separate program and boost its funding substantially in the coming year.

I also understand that the Millennial Housing Commission is expected to endorse a program that is nearly identical to an affordable housing initiative proposed by President Bush. The President's plan would provide tax credits for single-family home construction in much the same way the Low-Income Housing Tax Credit has provided incentives for multifamily housing. This is something we would strongly support.

We are creating solutions to meet the affordable housing challenge - through the programs I have mentioned, and by forming partnerships on the state and local level with government agencies, developers, lenders, non-profit organizations, and the commercial sector.

I have seen for myself the housing opportunities these partnerships can create when they are successful.

In Jacksonville, Florida, I visited the Fairway Oaks housing development. The project is a partnership between the local office of Habitat for Humanity, the Jacksonville Housing Authority, and the Northeast Florida Builders Association. In 17 days - and during a hurricane - a small army of workers built 84 homes. Affordable rental housing was added later.

The Fairway Oaks development serves as a national model of a community coming together and generating a creative solution to a local concern.

With this kind of inspiration to guide you, I have no doubt that our cities will meet the housing challenges ahead. America's cities have always risen to the challenges presented by the times. HUD is proud to be your partner. We look forward to strengthening our communities in the coming years through our dedication to affordable housing, as we work together to bring out the best in our people, and the best in America.

Content Archived: March 16, 2010