World Affairs Council
Remarks as prepared for delivery
of Northern California
by Secretary Mel Martinez
San Francisco, California
Thursday, October 17, 2002
Thank you, Jim [Chappell], for your very generous introduction. I
was pleased by the invitation to visit San Francisco and meet with
the members of the World Affairs Council, and I am honored to be here.
Before leaving Washington yesterday, I was with President Bush and
the rest of the Cabinet, as well as Members of Congress, as he signed
the joint congressional resolution authorizing U.S. military action
against Iraq. This is certainly one of the most historically significant
events I have witnessed since coming to Washington. It was a sobering
event as well. The decision when - and if - to put American
soldiers into harm's way is the most difficult decision a President
will ever face.
Now that President Bush has signed the resolution on Iraq, our country
and our Congress are united in purpose and speaking with one voice:
Iraq must disarm and comply with all existing U.N. resolutions, or
it will be forced to comply. The President also clearly expressed
his hope that military action could be avoided by Iraq's actions and
further stressed our continued hope the U.N. would act to enforce
its prior resolutions.
In the same way that this Administration is pursuing stability in
the world, we are creating stability for families here at home. And
expanding homeownership among all Americans, but minorities in particular,
is a top priority of President Bush. In fact, the President has set
a goal of increasing the number of minority homeowners by 5.5 million
before the end of this decade.
Homeownership is a family's single most important source of stability
On Tuesday, President Bush hosted the first-ever White House Conference
on Increasing Minority Homeownership. We brought together representatives
of the entire housing industry, and they gave us their specific commitments
on how they will work with us to empower more families through homeownership.
As the President said in his remarks to the conference, "We can
put light where there's darkness, and hope where there's despondency
in this country. And part of it is working together as a nation to
encourage folks to own their own home."
We invited a Baltimore family to the conference to meet the President
and share their inspirational story.
Carlos and Jane Arias and their son Gian Carlos arrived here as immigrants
from Peru five and a half years ago. They wanted to own their own
home, but faced so many obstacles that homeownership to them was nothing
but a dream. They did not speak English. They had no credit history
in this country. And even if they could get a mortgage, they had little
money to put towards a down payment and closing costs.
I can understand what the family was feeling, because my family faced
similar obstacles when we emigrated here from Cuba.
But the Arias family found a guardian angel who guided them through
the process of establishing credit and buying a home, start to finish.
Today, they are homeowners. So I would say that if the Arias family
can become homeowners in this country, the dream of owning a home
is available to all Americans.
By the way, the next chapter in the life of this family will be written
tomorrow, when Carlos, Jane, and Gian Carlos are sworn in as American
We all recognize their dream; in fact, we share it. Their dream is
the American dream, and it transcends all racial and economic boundaries.
A person's ability to say, "I own this home, it is my part of
the American experience" regardless of who they are or where
they were born, is what President Bush calls a "cornerstone of
From its earliest days, American history has been intertwined with
the expansion of homeownership opportunities.
The quest for individual property rights, as enshrined in the Bill
of Rights, led to the development of laws that effectively protect
the ownership and legal transfer of a home. The Land Acts of the early
1800s and Lincoln's Homestead Act opened up the frontier to settlement
by future homeowners. The housing reforms of the 1930s, and the establishment
of the Federal Housing Administration, paved the way for the post-war
housing boom. The civil rights laws of the 1960s and the Fair Housing
Act of 1965 were part of a long and ongoing struggle to dismantle
the evils of discrimination.
These legal frameworks set us apart from other nations of the world
in which homeownership is not an option for families. In Cuba, for
example, where I was born, homeownership opportunities are systematically
denied. In Japan, where a down payment can routinely be 50 to 60 percent,
homeownership is discouraged.
In contrast, America places a high value on the benefits of homeownership,
and for good reason. Homeownership creates community stakeholders
who tend to be active in charities and churches. Homeownership inspires
civic responsibility, and owners vote and get involved with local
issues. Homeownership offers children a stable living environment
that influences their personal development in many positive, measurable
ways - at home and in school. Owning a home fosters the civic
and democratic virtues that make America great.
Equally striking is homeownership's potential to create and spread
wealth. It is an engine of social mobility and the path to prosperity
for the vast majority of families. By a large margin, Americans see
a home as a safe investment, and they are right. Last year, Americans
took $80 billion out of the wealth they had accumulated in their homes
to make investments in education, consumer goods, and new businesses.
The ability of the American people to tap assets like their homes
allows them to unlock what Peruvian economist Hernando DeSoto calls
the "mystery of capital."
DeSoto, the founder and president of the Institute for Liberty and
Democracy in Peru, argues that throughout the developing world, you
will find people of modest means working hard, producing goods and
services, growing crops, buying and selling products, creating small
enterprises, and accumulating individual assets such as tools, livestock,
Yet despite their hard work, they - and their nations -
remain mired in poverty. Even these people save money, their assets
are "dead capital" that cannot create wealth because they
are held in "defective forms" - "houses but not
titles, crops but not deeds, businesses but not statutes of incorporation."
But in the United States, even a family of the most modest means is
afforded the full benefits of a highly developed system of recording
and protecting assets. We have deeds and titles on our homes and cars;
copyrights and patents; land registries and enforceable contracts.
These protections make it possible for every American to accumulate
and leverage assets - to buy and sell them, insure them against
loss, borrow against them, and pass them on to their children. As
DeSoto points out, it is no wonder that "the single most important
source of funds for new businesses in the United States is a mortgage
on the entrepreneur's house."
Despite America's unparalleled legal and social framework for accumulating,
protecting, and harnessing assets, some people have been left behind.
Historically, minorities have been denied access to capital. We see
the impact of this injustice in the wide disparity in the homeownership
rates of non-Hispanic whites and minorities.
The national homeownership rate is 68 percent, the highest in history.
That is something to be proud of. But that statistic masks a deep
divide - a homeownership gap - between whites and minorities.
The homeownership rate for whites is nearly 75 percent; yet for African-Americans
and Hispanics, it is less than 50 percent.
President Bush says the homeownership gap is a "signal that something
might be wrong in the land of plenty," and he has vowed to close
that gap. As I mentioned earlier, he issued a challenge to his Administration
and to every segment of the housing industry - public, private,
and non-profit - to close the gap by helping 5.5 million more
minority families own homes by the end of the decade. He had a simple
message for us this week at the White House homeownership conference
when he said, "We want everybody in America to own their own
To close the homeownership gap, the Administration and its partners
are focused on four key areas.
It is important that families looking to purchase a home are educated
about the homebuying process. They also 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 most experienced investor;
imagine how difficult it 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.
Our "Homebuyer Bill of Rights" will simplify the homebuying
process and make it less confusing and costly. And we are committed
to enforcing the law to stop predatory lenders from doing business.
Of course, it is hard to buy a home when affordable housing is simply
not available. In some parts of the United States - and San Francisco
is one of them - the average working family cannot find a house
on the market that is within their price range. To help address this
need, we want to establish a single-family affordable housing tax
credit that would pump $2.4 billion over the next five years into
affordable housing development in high-priced urban areas.
We also need to help families who have qualified to buy a home, but
come up short on the down payment. If a buyer is in every other way
an outstanding candidate for homeownership, they should not be blocked
from buying a home by the high cost of a down payment.
President Bush proposed the American Dream Downpayment Fund to help
200,000 low-income families make the move into homeownership over
the next four years. I am pleased that the House passed the American
Dream Downpayment Fund last week; the President and I urge the Senate
to do likewise.
We are also expanding an innovative homeownership program that eases
the transition from renting to owning for low-income families by providing
them with vouchers they can use for a down payment or mortgage payments.
The final focus of the Homeownership Challenge is helping 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 real estate, mortgage
finance, and nonprofit sectors have stepped forward with many invaluable
They are launching strategic efforts to create new homebuying opportunities
in minority communities. They are creating new mortgage products to
combat predatory lending and meet the needs of immigrants. And our
partners are increasing their investments in minority markets by nearly
We are grateful for all their contributions, their energy, and their
commitment to achieving the goal President Bush has set.
These investments and initiatives will reap tremendous benefits for
individual families and for the nation as a whole. HUD just completed
a report that we released at the White House homeownership conference.
We found that the potential economic benefit of adding 5.5 million
first-time minority homebuyers by 2010 is a staggering $256 billion.
An increase in minority homeownership creates more jobs, increases
consumer spending, increases the economic security of neighborhoods,
and most importantly, is a "capital engine" for working
By creating 5.5 million new minority homeowners, we will at last be
unlocking the "mystery of capital" for minorities who have
until now been denied the benefits so many of their fellow citizens
take for granted.
While we are passionate about our quest to increase the ranks of America's
homeowners, our agenda is broad and covers every aspect of housing
and urban issues.
Along with promoting homeownership, we continue to provide those who
rent with affordable, safe, and decent housing opportunities. Three-quarters
of the HUD budget - or about $23 billion next year - is
dedicated to supporting the rental costs of low-income individuals
and families. Our rental assistance programs collectively help more
than four million rental households.
We also continue to help communities like San Francisco meet housing
and other needs through HUD's Community Development Block Grants and
our HOME program. These programs work because HUD allocates the grants
to local governments and organizations, who then determine the best
way to spend them. Many localities put their grant funds to work developing
Homelessness is a tremendous challenge facing San Francisco and other
cities across the country. This Administration is deeply engaged in
meeting this challenge, and remains committed to helping the nation's
most vulnerable citizens receive the care and shelter they need.
Last year, I issued a challenge to end chronic homelessness within
the next ten years. With America's economic power and the inherent
goodness of our people, chronic homelessness is a problem we can conquer.
President Bush shares this vision, and to this end he has reactivated
the Interagency Council on Homelessness and doubled its funding for
the coming year. The Council's job is to better coordinate the work
of the many federal departments that fund homeless services.
The American Dream is not some unattainable goal, and I know this
because I see it achieved every day, so often by families who never
imagined owning their own home or reaching economic self-sufficiency.
Through our work at HUD - and the continued commitment of President
Bush - citizens will have new tools and opportunities they can
put to work improving both their lives and their communities as they
travel the road to achieving their own American Dream.
Thank you very much.
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