Dr. Ben Carson
Secretary of Housing and Urban Development
Liberty Square Ribbon Cutting Remarks
Miami, FL, July 1, 2019
As prepared for delivery. The speaker may add or subtract comments during his presentation.
Thank you, Mayor Gimenez, for that warm introduction. It's a great honor to come back to Liberty Square and see the incredible transformation that has taken place here.
As a surgeon, I have a special skill with a scalpel - so I'm especially happy to return here to help cut a ribbonÔÇŽ with precision.
Two years ago, this site was one of the very first places I visited in my capacity as HUD Secretary. Liberty Square is among the oldest public housing developments in the entire southeastern United States, having been completed in 1937. Back then, the average cost of a new home was just $4,100 dollars, if you can believe that.
The ambitious redevelopment plan we set into motion with "Liberty Square Rising" promised to not only dramatically improve the Liberty Square and Lincoln Gardens public housing sites, but to provide a catalyst for revitalizing the whole neighborhood. This plan has been the most significant project, in terms of impact, for strengthening Miami-Dade's Public Housing and Community Development's public housing inventory - with an estimated total development value of over $300 million dollars.
As we mark the completion of Phase 1 of this project, we can all be proud of the remarkable work that has taken place here. Phase 1 of the Liberty Square Rising plan has created 204 units - of which 73 are set aside for public housing - and allowed for all 54 families that were on the site at the start of construction to return. The other 150 units are being leased to families of all income levels who are part of Miami-Dade County's workforce, creating an inclusive, mixed-income community.
The $3.5 million dollars that HUD invested into Phase 1 leveraged a total development cost of $46.5 million dollars - a ratio of 13.2 to 1. We are extremely happy to provide support for this hub of new growth, new jobs, and new life in the Miami-Dade community.
It has been a top priority at HUD to ensure that low-income individuals have an opportunity to move toward self-sufficiency and achieve economic upward mobility. These efforts include putting renewed energy behind Section 3 of the Housing and Urban Development Act of 1968 - the program that increases access to jobs for low-income individuals, and contracting opportunities for the businesses that hire them. This program has become even more critical in recent years, as we've made a commitment to put Americans back to work and put residents of HUD-subsidized housing on a path to self-sufficiency.
In just the last year, expenditures of covered HUD funding generated more than 29,000 jobs, almost 12,000 of which were Section 3 hires. Also, of the more than $5 billion dollars in construction contracts that were awarded during that period, almost half a billion dollars in contracts were awarded to just over 2,500 Section 3 businesses. But as impressive as the numbers are, the real-life stories of individuals whose lives have been touched by the program show the true impact it is having in helping them to build confidence and a better future.
To leverage this impact, HUD maintains a business registry that connects contractors with Section 3 eligible businesses. To date, more than 5,000 businesses have self-certified as being Section 3 eligible, and that number is expected to increase. HUD has also created a more efficient process through which housing authorities, entitlement communities, states, and other HUD grantees can submit the required annual reports that show how they're complying with the Section 3 program.
For these reasons, it gives me great pleasure and great pride to witness how Liberty Square has leveraged Section 3. Data shows that 23 percent of new hires for this project met Section 3 requirements.
Finally, Liberty Square Rising is in an Opportunity Zone, and at this time there are serious discussions occurring associated with investments by Qualified Opportunity Funds to meet the gap financing needs of the next phases of the Liberty Square Rising.
Few programs in modern American history have the power to improve so many lives as Opportunity Zones, which are now home to nearly 35 million Americans - including 2.4 million HUD-assisted individuals - in all 50 states and five U.S. territories. That's roughly 10 percent of the country, deliberately targeted for revitalization.
The purpose of Opportunity Zones is to spur private investments into economically distressed communities through powerful tax incentives. These incentives allow investors to defer and reduce their tax liability on capital gains by investing their realized gains into new construction, rehabilitation, or businesses expanding in areas that have long been neglected or forgotten - like Liberty Square experienced in the past.
But Opportunity Zones are also designed to serve local communities for the long-term. Only investors who commit capital for five, seven, and ten years receive these tremendous tax-saving rewards. That way, we can prevent the kind of practices that are "here today, gone tomorrow" and make sure new growth - and new jobs - are "here today, and here to stay."
This win-win situation is one of the reasons Treasury Secretary Steven Mnuchin predicted that $100 billion [dollars] in private investment would be directed to local communities across the nation in Opportunity Zones. But the impact of Opportunity Zones is not just some future theoretical; it's already here.
According to recent reports, new Qualified Opportunity Funds are looking to raise and deploy more than $29 billion [dollars] in anticipated investments. Of those $29 billion dollars, 91 percent of funds plan to invest in multifamily residential, student housing, mixed-use, hospitality, or other commercial developments. And nearly 60 percent of funds plan to invest in affordable and workforce housing or community revitalization.
As for direct impact, growth in acquisitions of developable sites in Opportunity Zones surged in 2018 compared to the rest of the country. According to Zillow, property sale prices in Opportunity Zones have appreciated at a rate of more than 20 percent, double the appreciation rate for eligible but not selected areas.
To ensure Opportunity Zones reach their full potential, last December, President Trump established the White House Opportunity and Revitalization Council, which I have the privilege to chair. Scott Turner is the Executive Director and he has been doing great work for us as well. The Revitalization Council - which consists of members from 16 federal agencies and federal-state partnerships - has a mission to make better use of public funds in the revitalization of economically distressed communities.
The Revitalization Council is also conducting a listening tour of Opportunity Zones throughout the nation to incorporate input from community leaders, entrepreneurs, and investors - so the voices of the American people are always in our ear.
As of now, the Council has identified more than 160 programs that could increase investments into Opportunity Zones through grant preference points, loan qualifications, reduced fees, and eligibility criteria modifications. We have already implemented 109 of these actions across agencies.
One such action at HUD is an announcement last month that our Federal Housing Administration, or "FHA", is unveiling a new package of incentives to encourage multifamily property owners to invest in developments located in Opportunity Zones. These new incentives involve tens of thousands of dollars in reduced application fees for FHA mortgage insurance in Opportunity Zones, and the appointment of a dedicated team of underwriters to ensure expert and efficient processing of such applications in Opportunity Zones.
On a personal note, for many years, I spent countless hours laboring to save the lives of children. The color of their skin or where they were born never mattered. Their brains did, and after years of operating on this special organ, I can assure you they are all the same color - just like everyone's heart. These two organs - the brain and the heart - are what make people who they are.
There's a reason for the expression, "The home is where the heart is." They are where families are raised, and where communities are interconnected. We are not just building housing capital in Liberty Square - we are building human capital.
Nothing can stop these United States as long as we stay united. The people of Miami-Dade County may have differences, but that should never make enemies out of neighbors. We can all do a better job of ending class warfare and embracing our common welfare.
On behalf of HUD, I look forward to continuing to serve communities like Liberty Square in the months and years ahead, as we work to strengthen communities and provide stable homes for Americans of every walk of life. Together, we can continue to lift people out of the cycle of poverty and onto the path of the American Dream.
As Liberty Square shows, that dream is always within our reach.