National Association of Homebuilders
Remarks as prepared for delivery by Secretary Mel Martinez
Las Vegas, Nevada
Wednesday, January 22, 2003
All of us at HUD were deeply saddened to learn of Leon Weiner's
passing late last year. He was a genuine legend in Washington and
few can match the passion that he showed for housing issues and
his determination to expand America's supply of affordable housing.
As has often been stated, Leon truly was the "conscience of the
housing industry." And we will miss him.
The Bush Administration has tremendous respect and appreciation
for America's homebuilders; your work allows families to achieve
the "American Dream" of homeownership and is critical to the health
and security of our communities and national economy.
In particular, I want to personally thank you for your leadership
in the President's initiative to increase minority homeownership.
The NAHB and its members are already playing a vital role in meeting
the President's goal to boost the number of minority homeowners
by at least 5.5 million families by the end of the decade.
Before I proceed, I would like to introduce you to several senior
members of the HUD leadership team.
[Introduction of HUD Leadership].
They bring us years of experience in housing and urban policy issues
and I feel very fortunate to have the benefit of their considerable
knowledge and experience. I am very proud of our team at HUD; they
make the success we have enjoyed possible. I am grateful to them
for their service to the country and the President.
President Bush and I both recognize that the homebuilding industry
plays a critical role in helping our nation achieve economic growth
and vitality. And that is especially true in today's unsettled world.
Your industry helped cushion the effects of the recession and it
helped bolster our economy in the months following the tragic events
of September 11.
Driven by the best financing conditions available in decades, new-home
sales hit a record pace of over 1 million new units this past November,
up almost 6 percent from the previous month. And in December, builders
started construction on 1.8 million units - an impressive 16 percent
increase over December 2001. We are also pleased to see that this
is a nationwide trend�not just concentrated in one or two particular
These encouraging numbers are a clear testament to the ongoing
strength of the housing market and yet another indicator of a strengthening
Since the opening days of this Administration, President Bush has
worked to promote job creation and economic growth across America.
We have met the tests before us because the American people have
worked hard through difficult times.
And that is something, especially given the fact that we inherited
a recession and were struck by the most vicious terrorist attacks
in history. Yet, we emerged a stronger and prouder nation. Through
all of this, Americans continued buying and renting homes and the
housing industry remained a bright spot during difficult times.
As the President has said, the economy is recovering and we see
encouraging signs: the nation is in its second year of economic
growth and interest rates are the lowest in 37 years. And the overall
homeownership rate - a key measure of economic prosperity - stands
at 68 percent, nearly the highest ever recorded.
A little over two weeks ago, the President unveiled to the American
people his growth and jobs plan to further strengthen the economy.
His plan has three major components that will:
- Speed up the 2001 tax cuts to provide badly needed tax relief
to American working families;
- Encourage job-creating investment in America's businesses by
ending the double taxation of dividends and giving small businesses
incentives to grow; and
- Provide help for those Americans out of work by extending unemployment
The President's plan will help create 2.1 million jobs over the
next three years and will fuel economic opportunity and growth.
I am happy to say that many of those jobs are coming from your industry.
We strongly believe that hard working Americans deserve to hold
on to more of their own money - to take it home and spend or invest
as they see fit. And it is our job in Government to remove the obstacles
that impede the American entrepreneurial spirit from thriving.
I join the President in urging the new Congress to follow up on
its speedy passage earlier this month of the emergency jobless benefits
by passing the rest of this legislation as quickly as possible.
It is sound policy and good for America. I would ask for your help
and support in this effort.
In addition to the measures outlined in the stimulus package, the
President and I strongly support the single-family tax credit because
it is smart housing policy, it promotes homeownership - one of this
Administration's top priorities -- and it is a vehicle for revitalizing
The homeownership tax credit will provide yet another powerful
stimulus to the economy and the Bush Administration is committed
to working with you to get this homeownership tax legislation passed.
We also must work in close partnership to dispel the myth that
our nation is experiencing a "housing bubble."
Although the United States is the best-housed nation in the world,
we as a country still face a housing shortage. In fact, housing
experts, economists and analysts met this past week at a conference
in California and concluded that the momentum gained from low mortgage
interest rates will carry strong home sales through the end of this
Not long after 9-11, however, a number of leading experts predicted
that the housing bubble would burst. They were clearly wrong. Instead,
many Americans chose to simply delay, rather than cancel, their
plans to buy. And home purchases ended up reaching an all-time high
in 2001. While the final numbers are not in, sales in 2002 are expected
to eclipse the 2001 record.
Bubbles of course do burst, but the housing market is not in the
same category of other weaker and less competitive sectors of the
Today, demand remains strong, with new households being formed
at a rate of more than 1 million per year. To meet this demand,
and replace homes that are destroyed or demolished, the nation's
homebuilders will need to construct 1.6 million new homes and apartment
units each year.
Plus, this Administration is making it easier for people to purchase
their own homes - a change that will help drive home development
and sales. And, it will help more minorities become homeowners.
Giving every American the opportunity to own a home is the best
investment that a family can make. Unfortunately, many Americans,
especially minorities, have yet to enjoy the benefits of homeownership.
While three quarters of white Americans are homeowners, less than
half of Hispanic and African-Americans own a home of their own.
That is a statistic we must change. President Bush and I agree
that the elimination of the homeownership gap is a top priority
for HUD; it is fundamental to our mission as the nation's housing
As you know, President Bush announced his goal to boost minority
homeownership by 5.5 million families last June when he launched
America's Homeownership Challenge, the centerpiece of the
President's efforts to close the homeownership gap that exists between
minority and non-minority Americans.
HUD's response to President Bush's challenge was the Blueprint
for the American Dream Partnership - an unprecedented public/private
initiative that harnesses the resources of the federal government
with those of the housing industry to accomplish the President's
We launched the Blueprint Partnership last October at the
White House Conference on Increasing Minority Homeownership
and the NHBA has been a partner in this effort from the start. I
applaud you for your leadership on this initiative and want to thank
the many local builder associations across the country for your
In particular, I would like to acknowledge your local Albuquerque,
New Mexico, association for the great work they did in putting together
our third White House regional homeownership event. Your folks pulled
off a terrific meeting with little time and we look forward to working
with each and every one of your local associations across the country.
When the President gathered us together at the White House Conference
last fall, he had a simple message: "We want everybody in America
to own his or her own home." Our Blueprint for the American Dream
Partnership is the right response at the right time. It is unprecedented
in scope and sets out to close the minority homeownership gap by
harnessing the resources of the federal government to those of the
We are committed to empowering minority homebuyers, especially
low-income families shopping for their first home, to have better
access to capital and more financing options. I am proud to say
that our partners in the housing, real estate and mortgage finance
industries, among others, have stepped forward with many invaluable
contributions and investments.
These investments and initiatives will reap tremendous benefits
for individual families and for the nation as a whole. We studied
the potential economic benefit of adding 5.5 million first-time
minority homebuyers by 2010 and found that it added a staggering
$256 billion to the housing market. An increase in minority homeownership
creates more jobs, increases consumer spending and the economic
security of neighborhoods, and most importantly, is a "capital engine"
for working families.
And I am also pleased that so many of you here today and so many
of our other partners have been actively involved in this homeownership
effort. We are grateful for your contributions, your energy and
your commitment to achieving the President's goal.
Boosting homeownership among minorities is the right thing to do
and now is the right time to do it.
In our goal to expand homeownership, the Blueprint partners are
focused on several key areas. One is education. It is important
that families looking to purchase a home are educated about the
homebuying process � they need reliable, understandable information
about their options for financing.
The vocabulary of mortgage lending and the process of buying a
home are confusing and complex for even the experts; imagine how
difficult they must be for a first-time homebuyer, or someone for
whom English is a second language. The fact that there are some
unscrupulous people who want to take advantage of the system adds
to the problem.
We are working to provide consumer education, particularly to immigrants
and minorities who are not familiar with the homebuying system,
to make them more comfortable entering into the largest and most
important financial transaction of their lives.
As we announced on Monday, HUD's proposed budget for the coming
04 fiscal year increases housing counseling by $10 million, providing
$45 million to help families manage their finances and improve poor
credit ratings in order to achieve homeownership.
We are also deeply committed to educating the housing industry
about its legal responsibility to prevent discrimination and the
need for our partners to take responsibility for educating future
homebuyers about their legal rights.
Of course, it is hard to buy a home when there are few affordable
homes to be found. In some limited parts of the United States -
and particularly in our nation's inner cities - the average working
family cannot find a house on the market that is within their price
In spite of overwhelming need, very little new construction of
single-family homes occurs today in lower-income neighborhoods.
The most common cause is that the cost of developing such housing
in an economically distressed area would exceed the property's market
This Administration believes that the federal government can play
a role in boosting the supply of affordable housing by helping to
bridge the gap between the cost of development and the value of
To address this need, today I am announcing that our proposed '04
budget provides a $113 million increase (5 percent), in HUD's HOME
program. An estimated $2.2 billion in total funds will be provided
to state and local grantees to assist homebuyers and renters by
helping finance the costs of land acquisition, new construction,
rehabilitation and downpayments.
Our new budget also will fully fund the President's American
Dream Downpayment Fund, by providing $200 million to help approximately
40,000 low-income families annually make the move into homeownership.
And the budget continues to strengthen the ability of public housing
authorities to use Section 8 Housing Voucher funds as downpayment
assistance for families who are making the transition from renting
Equally important, HUD wants to help you break down regulatory
barriers and one of the steps I would like to announce is the creation
of a new Office of Regulatory Reform.
Through this office, HUD will spend an additional $2 million next
year on research efforts to learn more about the nature and extent
of the regulatory problem and we will conduct a comprehensive study
to determine the impact of barriers on the development of affordable
housing. In addition, HUD will develop analytical tools that measure
the effects of regulatory barriers on communities.
But most importantly, we will develop promising strategies to reduce
those regulatory barriers that prevent rental, higher density, mixed
use and affordable housing projects from being developed in a particular
To that end, we are eliminating the FHA policies and procedures
for approving Planned Unit Development (PUD) projects. Effective
immediately, FHA will no longer require approval of a PUD as a precondition
for placing FHA mortgage insurance on a dwelling located in the
One of the tools we are already using is our Regulatory Barriers
Clearinghouse, which gathers housing knowledge from across the country
into a single website.
By giving builders and developers a place to share ideas and solutions
for overcoming state and local regulatory barriers, we think we
can help generate more housing opportunities.
As some of you might know, my government service began at the county
level, when I was elected Chairman of Orange County, Florida. So
I bring to HUD an appreciation for the difficulties you sometimes
face in working with the federal government, and the regulatory
barriers you often have to overcome at the state and local level.
I have committed HUD to eliminating many of these barriers and
being a better partner with the private sector. Through our programs
and initiatives, HUD is working to expand the public-private partnerships
that leverage the resources of government with the expertise of
the private sector - especially the nation's homebuilders. Together,
we are helping local communities create new housing opportunities
for more American families.
Along with promoting homeownership, we are expanding access to
affordable housing, improving the quality of public and assisted
housing and ensuring better accountability. We also are increasing
housing opportunities for the elderly and those with disabilities.
To boost housing production in high-cost areas, I initiated a 25
percent increase in the loan limits for FHA multifamily insurance.
This was the first such increase since 1992 and we appreciate your
support and partnership in this effort.
FHA's basic multifamily housing insurance program also has seen
a substantial increase in activity during the last two years. The
$2.8 billion worth of mortgage loans we committed to in 2001 was
the highest dollar amount in ten years.
Another key area that we are working on is the simplification of
the buying process and increasing competition. Soon after taking
office, I directed HUD to launch a major effort to reform the Real
Estate Settlement Procedures Act, known as RESPA. Our goal is to
make the homebuying process less expensive and far less complicated
We believe that our proposal can reduce settlement costs by an
average of $700 per closing. Overall, the annual savings to consumers
could be as much as $8 billion.
That kind of savings will allow many Americans who are priced out
of the homebuying market today to buy a home. And our "Homebuyer
Bill of Rights," which we rolled-out along with RESPA reform, will
simplify the homebuying process and make it less confusing and costly.
HUD also is committed to enforcing the law to stop predatory lenders
from doing business. The Administration is targeting unscrupulous
lenders by pooling the resources of the federal government and helping
us work across agency lines. As a result, we are becoming much more
effective in tracking down lenders who target first-time homebuyers,
senior citizens, and minorities for predatory practices.
And in the past two years, HUD's Community Development Block Grant
(CDBG) program has provided nearly $9 billion in assistance to states
and communities to undertake housing and economic development activities.
Both CDBG and HOME funds work because of the flexibility they provide
to grant recipients - you spend the money in ways that will best
help your communities.
As you can see, our top priorities at HUD mirror many of your concerns.
We are both committed to increasing homeownership, especially among
minorities; supporting production; ensuring an adequate supply of
affordable housing for renters; and strengthening communities through
economic development initiatives.
As I continue to remind our employees, HUD's mission is to serve
people, not programs. Historically, HUD has often suffered from
mismanagement and loss of focus - often straying from its core mission.
On occasion, this resulted in poor service, program duplication
and waste. Through our reforms and hard work, I can confidently
say that things are improving.
And now that we have reached the two-year mark in our Administration,
it is an opportune time to take stock of our accomplishments, measure
our successes and take any corrective actions needed to get to where
we need to be. I am proud of the job that we have done and I look
forward to building on these successes as we move ahead.
I can guarantee you that HUD will continue to rely on the expertise
of those of you on the front lines of the housing industry and those
at the local level who best understand their communities. We want
to hear your ideas on how together we can combat the problem of
ensuring affordable, accessible housing for all Americans.
I look forward to strengthening HUD's partnership with America's
homebuilders, with the goal of opening the American Dream to more
families and individuals� and opening up our communities to new
opportunities for growth and prosperity.
That is the challenge that I know we are all prepared to meet.
Content Archived: March 16, 2010