Dr. Ben Carson
Secretary of Housing and Urban Development
National Association of Counties 2020 Legislative Conference Remarks
Washington, DC, Hilton Hotel, March 2, 2020
As prepared for delivery. The speaker may add or subtract comments during his presentation.
Thank you, Mary Ann [Borgeson, NACo President]. And thank you to NACo for bringing us all together for this important legislative conference.
Iâ€™m delighted to speak with you today about the many ways HUD is working to help counties across the country secure quality, affordable housing.
Under the leadership of President Trump â€“ who youâ€™ll hear from tomorrow â€“ our nation is experiencing an economic revitalization. Millions of Americans are being lifted off of food stamps, and we have more job openings now than American people looking for jobs.
And President Trump said this in his State of the Union address, but it really bears repeating: â€śThe best is yet to come.â€ť If we stay united â€“ and give no quarter to those voices of division that try to keep us from working together â€“ there is no limit to what we can do.
But we must stay true to those principles that made America a â€śshining city on a hillâ€ť in the first place. One of those bedrock principles is the American system of federalism, which makes local control the â€śheart and soulâ€ť of how we construct our government.
That means our job at HUD is not to proclaim from on high what county representatives should do. But rather, our obligation is to let local leaders lead.
One of the biggest challenges America is facing is the nationwide shortage of affordable housing. Weâ€™ve really reached the point where itâ€™s a crisis. We have teachers, nurses, police officers and firefighters who cannot afford to live in the communities they serve. That is not only a disservice to them, itâ€™s a disservice to their communities as well.
HUD is taking on the affordability challenge by taking action on deregulation.
If thereâ€™s one thing a surgeon is good at, itâ€™s cutting things. And deregulation isnâ€™t just about cutting bad barriers to affordable housingâ€” itâ€™s cutting costs, so we can save homes and improve lives.
Thatâ€™s why HUD is working with local community leaders and public officials across the country to break down burdensome regulatory barriers to new home construction and development. For single-family homes, regulations can account for 25-27 percent of costs. For multifamily housing, they can account for up to 42 percent of costs. That is just not sustainable.
To change this status quo, last summer, President Trump established the White House Council on Eliminating Barriers to Affordable Housing, which I have the honor to chair. The Council is engaging with state, local, and tribal leaders across the country to examine the obstacles impeding production of more affordable homes â€“ namely, the enormous price tag of burdensome government regulations. These burdensome regulations are found at the federal, state, and local levels of government, so weâ€™ll have to work together to eliminate them.
On the whole, however, federalism means that local leaders fundamentally set the height of the regulatory barriers to affordable housing development in their own communities. So, principally, we have two primary tools for driving change.
First, we can persuade local leaders and municipalities to update the way they do business, through outreach and sharing best practices. And in this way, NACoâ€™s â€śAffordable Housing Toolkitâ€ť is a superb example of how you are leading the way in helping HUD understand obstacles and prioritize appropriate partnerships in this space. That report identifies best practices across many different communities with examples for dealing with zoning, land use regulations, incentives for developers, taxes and fees, and other concerns. Further, NACo members have participated in a number of the White House Councilâ€™s roundtables on affordable housing, and contributed your valuable expertise.
Second, HUD can change the incentive structure that local leaders and municipalities confront in the housing sector, so that everyoneâ€™s interests elegantly align with increased home production. To that end, HUD is pursuing regulatory reform to make it easier to develop and rehabilitate housing units.
For example, today I am delighted to announce that HUD will now allow newly constructed or substantially rehabilitated properties to be refinanced under the Section 223(f) program, without needing to wait for three years first or obtain a waiver.
HUDâ€™s Section 223(f) program insures lenders against loss on mortgage defaults by allowing long-term mortgages to be financed with Ginnie Mae mortgage-backed securities. This eligibility for purchase in the secondary mortgage market increases available loan funds and permits more favorable interest rates.
By eliminating the â€śthree-year rule,â€ť multifamily property owners will no longer need to endure a long and cumbersome waiver process, which means they can come to HUD sooner to recapitalize through a refinancing. The end result is that developers will have more flexibility in development and rehabilitation, which will help the counties and communities they serve.
HUD is also helping counties succeed through further regulatory reforms on the federal level. The Department recently unveiled our improved proposed rule on Affirmatively Furthering Fair Housing, or â€śAFFH,â€ť which is designed to increase affordable housing options for families while empowering localities to pursue policies that meet each communityâ€™s unique housing needs.
In 2018, we reopened HUDâ€™s AFFH rule for public comment because the existing rule discouraged, rather than encouraged, affordable housing development. Practicing fair housing isnâ€™t a choice, itâ€™s the law, but the existing regulations were too top-down, cookie-cutter and Washington-centric. Local community leaders know their own communitiesâ€™ needs better than Washington does, and our new rule reflects that.
The new and improved proposal simplifies compliance, promotes local solutions, and focuses on encouraging what everyone needs more of: lower cost, affordable housing.
To really help counties grow to their greatest potential, we need to create not just foundations for new homes, but opportunities for existing residents.
Thatâ€™s why this administration is â€śall inâ€ť for embracing the Opportunity Zone initiative. Opportunity Zones were created to spur greater private sector investment into economically distressed communities through powerful tax incentives. There are more than 8,700 Opportunity Zones across the country, creating a new pathway to prosperity and impacting nearly 35 million Americans, including 2.4 million HUD-assisted individuals.
To maximize the impact of Opportunity Zones, President Trump established the White House Opportunity and Revitalization Council, which I also have the privilege to chair. The Council presented our formal annual report to the President last month, which details 180 actions federal agencies have taken over the past year to leverage benefits. These actions include the establishment of grant preference points, updated loan qualifications, reduced application fees, and improved eligibility criteria for funding and incentives.
Through Opportunity Zones, we are fostering partnerships among community leaders, business leaders, faith-based leaders, public housing advocates, investors, builders, State officials, and federal officialsâ€”all for the benefit of the communities across the country that need it most. The conversations Iâ€™ve been a part of have been groundbreaking, and these are still just the early days of an incredible transformation.
To conclude, America is a national body, but everywhere you go, it has a local soul.
No matter what size of the locality you represent, it is a selfless â€“ and often thankless â€“ task to fight for a better future for your community. I am grateful that we have such tremendous leaders, like the men and women in this room, to use each of your God-given talents in the service of compassion for struggling families across the country.
So, thank you for the opportunity to work with you, and on behalf of HUD, I look forward to continuing the fight for that brighter future alongside you.