HUD Secretary on Making Homes More Affordable

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Housing and Urban Development Secretary Alphonso Jackson talks about the government's plan to expand home ownership among African Americans. He also discusses the Bush administration's proposal to demolish four of New Orleans' largest public-housing projects closed after Katrina.

TONY COX, host:

From NPR News, this is NEWS & NOTES. I'm Tony Cox, in for Farai Chideya.

Home loans cost a lot. For many, they are unaffordable. President Bush says he is pushing to change that, particularly for African-Americans. But as the administration makes an effort to close the national gap, finding affordable housing - especially in places like the Gulf Coast region - is an even greater problem in the aftermath of Hurricane Katrina. NPR's Juan Williams questioned the president about this during an interview in January.

President GEORGE W. BUSH: I have been talking a lot about Katrina, and about the fact that I worked with the Congress to get about a $110 billion sent down to both Mississippi and Louisiana to help them on their reconstruction efforts.

Obviously, there's more work to be done, but take the housing issue, for example. We have sent money down to the Louisiana folks - Louisiana Recovery Administration, or Authority - to fund their plan. And the money is there, and the money's available.

And now it's up to the folks down there to get this plan implemented, so people can start rebuilding their houses. If there's bureaucratic slowdowns in Washington, we got a man named Don Powell who's working to address them. But no, our response is to the Katrina recovery has been very robust.

COX: Since that conversation, the Bush administration has stepped up plans to demolish four of the city's largest public housing projects closed after Katrina. Under the proposal, at least some of the 5,000 apartment units would be replaced with mixed income housing. But that move is turning into an angry debate among community leaders and lawmakers.

Some, like California Congresswoman Maxine Waters, say the federal government should not knock down what they say is valuable and much needed housing. Earlier, I spoke to Housing and Urban Development Secretary Alphonso Jackson. In a moment, we'll hear what he had to say about the government's plan for restoring public housing in New Orleans. But first, an even bigger issue: how Secretary Jackson hopes to make home loans affordable across the country.

Secretary ALPHONSO JACKSON (Housing and Urban Development): We have legislation going before Congress now to modernize the federal housing administration program. We used to be the prime lender. If this legislation passes this time -and we truly believe that it's going to pass because we have clear bipartisan support - we will be able to take many of the minorities, specifically blacks and Hispanics, out of the sub-prime market and bring them back into the FHA market. And that's the way we will address making sure that people have affordable housing at a right interest rate, not at a sub-prime interest rate.

COX: It seems that one of the issues with regard to the FHA are - well, two. The first of the two is loan limits. Does the legislation call for increasing the loan limits, and if so…

Sec. JACKSON: Absolutely. That is a serious problem for FHA is that loan limit. But the new legislation will talk about, regionally, how we address the loan limits. It will go up in places like California, Utah. It will go up in places like Massachusetts, Vermont, where clearly, the loan limit is too low and we can't make loans.

There's not a serious problem in the Midwest, the Southeast, the Southwest. But once we get past Utah or once we get past Virginia, does present problems. And that will be a specific part of the legislation.

COX: Now President Bush is asking a $35 million - $35 billion, I'm sorry - for HUD for a 4.5 percent increase over his proposed spending plan for fiscal year 2007. Talk about, Mr. Secretary, if you can, what has been working, and again, a little more about what's not besides just FHA.

Sec. JACKSON: Well, we have been very, very successful in our community development block grant program. And one of the things that we want to do with that program is send the money where it is most needed - not to communities that do not need the money. There are wealthy communities that are receiving block grant funds that shouldn't be.

And then you have cities like Detroit, where they actually need more block grant money, and we're not sending to them. Secondly, I think, the other thing that we're very, very concerned with, Tony, is the asset management portion of public housing.

We think that public housing should be managed just like private housing, that if the unit is not in use, it should not be counted as part of your inventory. And we think that's very, very important. And we're trying right now to talk with the industry to get them to agree to that, because we believe that is the way we're going to increase the number of units that will be affordable for people in public housing.

The other part of that is the Section 8 program. The Section 8 program is eating up about 62 percent of our budget. We must have reform in that program, otherwise we will not be able to fund it at the level that we are. And if we fund it at a higher level, it will be at the expense of other HUD programs. And so we are going to work with Congress, we're going to work with the housing industry to see if we can correct that.

COX: When you talk about Section 8 reform, do you mean to say to discontinue it? Is that the kind of reform you are suggesting?

Sec. JACKSON: Absolutely not. We will never get out of the Section 8 business anytime soon. I - and that's not even in our repertoire of thinking. What we want to do is go back to pre-1998. And pre-1998, you were allocated a sum of money, and you could use it as you saw fit. You might have a set of people paying 30 percent of adjusted gross income. You might have a set of people paying 40 percent of adjusted gross income.

But it was left up to the housing authorities to decide. After 1998, we had this law put in place that started counting - you have units. So that gave the housing authorities really no incentives to really go out and lease up, because they will get the administrative fee where they lease the units or not.

So we believe that going back to pre-1998, we will be able to serve more people faster than we are now. Now one of the things, Tony, you have to understand is this: since 1998, we have served the same amount of people. It has not increased, but yet the fees that we pay have increased 30, 32 percent, which does not make any sense.

So people, rather than moving out of Section 8 as they did before 1998, they stayed three to five years. Now they're staying somewhere between five and eight years on the same program. So we're serving less people. That's why about a month ago, we removed the cap on Section 8, so that many of the housing authorities who have not been able to serve their constituents can use their reserve to serve those constituents. Because we're trying to do everything in our power to serve more people, not less people.

COX: Let's talk about Katrina, Mr. Secretary.

Sec. JACKSON: Surely.

COX: Last week, a congressional hearing over affordable housing in post-Katrina New Orleans opened, and we have seen a debate over what to do with the city's crumbling public housing complexes. For example, U.S. Congresswoman Maxine Waters - who led the hearing - is reportedly considering leading a charge for Congress to demand reopening of all vacant public housing in the city, and to try to bar demolition.

Make clear for us, if you can, the administration's position with regard to that.

Sec. JACKSON: Well, first of all, let me say I find that's very ironic that if Chairman Waters wants to do that, that's clearly against everything that she said to me. She believed and the HOPE VI concept - that is, integrating housing both socially and economically. She said we should not be warehousing people again, away from all of society.

And so that's exactly what we were doing. It's important to note that the redevelopment of public housing in New Orleans started before Hurricane Katrina. We had three major units - Desire, Fischer and Florida - that were almost fully developed, that were integrated both socially and economically. When we took that authority over in 2001, we took it over because nothing was happening.

So my position is we want everyone who wants to come back to come back. But you know what bothers me most is that people don't seem to think that the public housing residents deserve better than that crumbling brick that we saw when we went through there. And we have these persons that are telling the people it's okay to move back into a gang-infested, crime-ridden, molded building - are perfectly suited to living. They're not. And so we have the money, and I think we should do everything in our power to bring people back to decent, safe and sanitary housing.

COX: Now, New Orleans Mayor Ray Nagin has been quoted as saying that he has met several times over the past 18 months with you specifically, Mr. Secretary, and that he says you committed early on that the housing authority of New Orleans would immediately place 1,000 units in service, and that it would place another 1,000 units within 90 days.

Sec. JACKSON: Yeah, we have.

COX: Have you done that?

Sec. JACKSON: Yes. We have right now 2,000 units that are ready for occupants. And what occurred is, is that people have said no, they're not. Well, one of the reasons that they said they're not is because we don't have refrigerators. We don't have stoves. We don't have the washers and dryers in there. But we're not going to put them in there until the person decides that they want the unit, because if we put them in there now, they will be vandalized as we had occur in one of the developments four, five months ago.

So what I have said to our team there, have the unit ready, and the moment that the person selects the unit, immediately, we put all the appliances in. And that can be done in a day.

COX: Mr. Secretary, here's my final question for you…

Sec. JACKSON: Sure.

COX: …and I thank you for your participation today. There is a concern, obviously, about the Bush administration's level of concern and commitment to helping restore New Orleans in a timely fashion. And the question is, in your view, has everything that could be done been done?

Sec. JACKSON: Yes, it is. And one of the things President Bush said, and I think we have to re-emphasize that again is we're not going to tell Louisiana or New Orleans how to run their programs. They have already $6.2 billion. We have another $4.5 billion sitting here for them draw down on. They must decide how they're going to do it. We will work with them.

So our job was to get them money to do the kind of things that the governor said that the Louisiana Recovery Authority wanted to do, and we have done that. But if we go in immediately to start dictating, then they're going to say the government is telling them what to do and they don't have their own personal autonomy. And we're not going to do that.

So, yes, we've allocated the money. We've done everything that we can. I'm working with the mayor on a daily basis, and I think he is very concern and he knows we are concerned. But if New Orleans is to receive money, it's something that the mayor and the governor has to work out. I can't force the governor to give money to New Orleans.

COX: HUD Secretary Alphonso Jackson. Mr. Secretary, thank you very much, sir.

Sec. JACKSON: Thank you so much.

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