It is indeed an honor to be here tonight, with our country’s foremost housing leaders and experts, in this magnificent, beautifully restored hall.

Four years ago, we gathered here in Washington to launch Window of Opportunity: Preserving Affordable Rental Housing.  It is a ten-year initiative to demonstrate that preserving our stock of low-cost homes is smart and cost-effective.  It will also make the case that affordable rental housing belongs at the center of a balanced housing policy for this country.

Tonight, we celebrate the real progress we have made and reaffirm our commitment to an even brighter future.  Whether you are a developer, an owner, an investor, a policy expert, an advocate, a public official, or a community leader, you have contributed to the gains being made all across this country.

But as we celebrate, we know that the work of this forum is about the challenges ahead.  Two million households are projected to join the ranks of renters by 2020, even as the supply of low-cost rental homes continues to fall.

Together we have demonstrated that preservation can be done well at a reasonable cost.  Now we must take our work to a larger scale and fight for the policies that will make that easier to do.  The goal: to preserve one million affordable rental homes in a single decade – enough to reverse the current trend and bring the loss of affordable rental housing to zero by 2020.  This will move us off the defensive and ensure that every newly built affordable unit truly adds to the supply. 

Together we can turn the tide, stop the loss of affordable homes and greatly advance our quest to achieve a threshold of decent housing throughout this country.  Our investment and your ingenuity must result in nothing less.

As I look around the room, I see so many people whose efforts should be acknowledged.  Let me mention just a few who are emblematic of the many whose courage, conviction, competence, and creativity is turning the tide.

At the center of this forum is a discussion of model policies and a framework for promoting these reforms in a more unified and forceful way.  The team that forged this framework includes: 

• Michael Bodaken, President of the National Housing Trust
• Amy Anthony, President of POAH – Preservation of Affordable Housing, Inc.,
• Bill Kelly, President of Stewards for Affordable Housing for the Future
• Shaun Donovan, Commissioner of the New York City Department of Housing Preservation and Development
• Jim Grow, Staff Attorney for the National Housing Law Project
• Joe Belden, Deputy Executive Director of the Housing Assistance Council,
• Vince O’Donnell, Vice President for Preservation at LISC; and,
• Michael Torrens, at CFED.

Three of these people—Amy, Bill and Michael Bodaken—deserve extra appreciation.  They also provided critical leadership for the communications research project that will be presented tomorrow.  And they -- along with their colleagues and so many others gathered here tonight -- have been generous partners to CFED and the Foundation staff in putting together this national forum--contributing ideas, guidance, contacts, and so much more.  Thank you.

After dinner, I will return to share with you our plans to expand MacArthur’s Window of Opportunity initiative.  I also will offer my thoughts about what we might do together to chart a new course for housing policy in this country.  Only a new policy environment will enable us to achieve affordable housing at the scale needed to realize our shared vision of a more just and decent America.

I know this sounds awfully grand – but how can we afford to think small?   Nor would it be right in this inspiring space, designed by famed Chicago architect Daniel Burnham.  His Plan for Chicago gave MacArthur’s home city its beautiful parks, open lakefront and exquisite form.  And throughout the world, he’s known for these words:   “Make no little plans; they have no magic to stir men's blood and probably will themselves not be realized. Make big plans; aim high in hope and work, remembering that a noble, logical diagram once recorded will not die.”

For the next few minutes, we ask you to watch the screens on either side of this podium for a short documentary created by Kartemquin Films, producers of Hoop Dreams and The New Americans.  This new film tells the stories behind two Chicago-area properties recently preserved by POAH and The Community Builders, both groups supported through the Window of Opportunity.

I think you will find that the filmmakers really captured the powerful impact and importance of housing in the lives of ordinary people.  And that is what we are all about – improving current conditions and future opportunity for people through better housing.

Tonight we celebrate the accomplishments of people and organizations devoted to affordable housing: groups like POAH and The Community Builders (whose residents spoke so movingly during the short film you just saw) and NHT/Enterprise Preservation Corporation, which in just seven years has preserved and improved more than 3,000 affordable rental homes.  These homes, in places like Galen Terrace and Hazel Hill, here in Washington D.C., are enhanced by new amenities and services: playgrounds, computer facilities, energy-saving features, on-site childcare, financial counseling and much more.

The visionary housing developers gathered here tonight have been hard at work in weak and strong markets, in urban, suburban and rural areas from Independence, Missouri to Los Angeles, from Bainbridge Island, Washington to Kissimmee, Florida; in Boston, Phoenix, New York City, and San Antonio.  Through acquisition, recapitalization, reconfiguration and renovation, you are keeping the existing rental stock in good repair and affordable—to renters today and for thousands more in years to come.  And you have demonstrated that preservation can be done at scale and at half the cost of new construction.

This powerful story is told on a new website created for this policy forum – window of opportunity.macfound.org. It is a wonderful resource for the field, with links to projects across the country, photographs, articles, TV clips, and more.  We invite you to contribute your own material to this website which will be the go to place for policy makers, journalists, and the general public.

Seeing is believing.  Preservation was not high on the policy agenda when we began our work.  Thanks to your accomplishments, that’s changing.  I was encouraged by the cover story of a recent CQ weekly that said “overlooked by policies promoting ownership, renters face a dearth of affordable units. Experts say it’s time to overhaul outdated programs that don’t address their needs.”

They are right.  Ultimately, it is policy that shapes, enables, and sometimes hinders our collective ability to tackle serious problems or seize promising opportunities. 

Well, many of the nation’s leading experts on affordable housing are right here in this room.  Let’s talk about how we are going to proceed.

Our challenge now is to unleash widespread and systematic policy reforms that make preserving affordable rental housing much easier, faster and less costly to do.  Only then can your successful demonstrations deliver on their true potential: preservation at a meaningful scale.

We know the federal picture has been grim for housing.  Subsidized housing’s share of federal spending declined 80% in the past 30 years. Between 2001 and 2006, federal discretionary spending rose 31% but HUD’s budget increased only one-half of one percent

But the news has not been all bad.  State and city officials, with a direct stake in the outcome of their housing policies, are breaking new ground, putting innovative policies to work.  Prodded and helped by you, they are testing new ways to encourage affordable housing development and create livable, vibrant communities. Their innovative initiatives include trust funds, tax breaks, inclusionary zoning, mixed-income development, smart growth, and plans to end homelessness.

We see sensible state and local policy changes in the preservation arena too.  Forty-six states have made it easier for preservation projects to compete for available funds.  As a result, over 63,000 at-risk rentals were preserved during 2006 alone.  The National Housing Trust estimates this is a five-fold increase compared to just five years ago.

Some examples: New York City used $8 million of its own resources to spur the creation of a $200-million Acquisition Fund.  This summer, Enterprise Community Partners used the Fund to help Fordham Bedford, a CDC in the Bronx, buy six at-risk, unsubsidized apartment buildings with a single, timely loan, demonstrating the power of this new financing vehicle. 

In Missouri and Illinois, a donations tax credit helps offset federal exit taxes, a key factor in preserving the Lorington Apartments featured in the film we saw earlier.  In nearby Fairfax County, a “Penny for Preservation” tax raises $22 million each year.  Since 2004, it has been used to preserve and improve over 2200 affordable homes.

But good preservation policy takes more than just money.  In New York and Chicago, two places where MacArthur has made deep investments, city officials have led the turn-around of HUD properties in foreclosure.  Florida, New Jersey, Washington, DC, the Twin Cities, Rhode Island, California – these are just some of the other places that have taken action through meaningful, non-financial measures.  These measures include:

• Developing inventories of rental housing by type and degree of risk, which equips decision-makers to intervene strategically;
• Requiring earlier notification to tenants and communities when a building’s owner plans to opt out of an expiring subsidy program;
• Enhancing outreach to owners and buyers to educate them about incentives, financing and other preservation resources and opportunities; and
• Arming tenants with legal and technical assistance they need to protect their rights.

This policy leadership reminds us that states and localities will likely remain the most powerful engines for change and innovation, even as the federal policy environment may well improve.  Congressman Barney Frank will discuss those prospects with us tomorrow morning.

I think a more promising environment for housing policy adumbrates a larger trend.  I believe this nation is on the cusp of a new era of domestic reform.  Americans from across the political spectrum are troubled by increasing inequality yet encouraged by the revival they see in many cities.  There is growing appreciation that healthy metropolitan regions are vital to America’s global competitiveness.  And there is belief that we can do better in living up to our ideal of a fair and just society, with opportunity for all.

If I am right about the political mood, then the timing is good to increase MacArthur’s commitment to affordable housing.

In 2003 we launched the Window of Opportunity initiative with a $50 million commitment to strengthening 15 leading preservation owners across the country, to seeding specialized financial intermediaries, and to bolstering the work of preservation policy experts. 

Our aim was to help developers acquire and improve 100,000 affordable rental homes as a powerful demonstration that preservation at scale was feasible, cost- effective and good for both residents and their communities. 

It is now time to take stock of what has been achieved, what remains to be done, and the political context for even greater progress.  What you have accomplished amidst difficult market and policy conditions is remarkable.  By the end of this year, the owners and lenders supported through Window of Opportunity will have preserved almost 50,000 affordable rental homes –halfway to our original goal. 

And early research findings support our instinct that housing does indeed matter for people and communities.  Better health and education outcomes for individuals and economic development for neighborhoods flow from better housing.

We admire your work and are encouraged by these early results.  Because we believe the time is right for further progress, MacArthur will triple its support for the Window of Opportunity to $150 million.  This total includes deep investments in two cities: Chicago and New York, funds to expand the group of directly supported preservation owners from 15 to 25, and more resources for data collection, policy analysis, expert assistance and field building.   

As part of this increased commitment, we will make $35 million of new funding available to ten places—states and localities that are leading the way with creative and effective preservation policies. 

To get this exciting next phase of work underway, tomorrow we will invite states and cities to request resources to refine and ramp up innovative preservation strategies.  These may include new acquisition and predevelopment funds, data systems and clearinghouses, public interagency coordinating councils, new incentives and regulatory flexibility to make preservation projects more feasible.  We will look favorably at proposals that feature collaboration among government, civic, business, and philanthropic leaders to get the job done.

With the commitment of additional funds, we are tripling our target for units preserved to 300,000 – enough to provide affordable homes for a half million people or more. 

But this is not just about putting more money into your work and raising our targets for preservation.  It is also about thinking big, moving beyond demonstrations of what works to a broad engagement of the public and private sectors to realize a much larger ambition: a policy environment that provides the resources and regulatory tools to preserve one million homes over the decade ahead.  Preservation at this scale is what is needed to reverse the current trend and bring the loss of affordable rental housing to zero.

This is our vision.  But we know that vision alone is not enough.   This kind of change also takes persistence, political will and partnership across the public, private, and nonprofit sectors.

That is what delivered success for preservation projects such as Crestview Village in Kankakee, Illinois; Cobble Knoll in rural Washington state; Edgewood Terrace here in Washington, DC; and the Lorington in Chicago’s fast gentrifying north side.

As we work to achieve our ambitious goals, we know that housing policy must change in fundamental ways.  You know better than I that current policy is complex, idiosyncratic, and inflexible. Conflicting rules and regulations make developing all forms of affordable housing too slow, too hard, and too costly. And even though you must make long term investments in your projects, you have to fight for critical resources each year.  All this has to change.

Our own approach needs to change as well.  This country needs an open and vigorous debate about why housing matters and what policies can address the deficit in affordable housing.  We should not avoid that debate, fearing the loss of what we already have and ignoring the failures and mistakes of the past.  Rather we should embrace it, confident that we have demonstrated what works and sure that we are building the evidence that housing is a critical path to better outcomes for people and communities.

Thinking big and aiming high should be our watchwords.  We need to chart a new course for housing policy that sets aside old ways of doing business. We need a new framework that gives more authority and responsibility to states and localities; one that holds developers, investors and others accountable for results.  And, most important, we need a framework that gives housing practitioners the flexibility and incentives to be creative, successful, and sustainable over the long run.

As we leave this National Policy Forum energized to work for better policies, I would like to propose six principles to guide us in charting a new course.  This is not only advice to ourselves, but also to policy makers.

First – Be constructive.  Do not let old ways of doing business, illogical rules, or burdensome decision-making slow down or derail worthy projects.  Fight to get needless regulatory barriers out of the way.  Do not let federal tax policy derail new investment by states and localities.  Without a constructive approach in Chicago, for example, the city never would have been able to pursue its bold and promising Plan for Transformation of public housing.

Second – Be committed and dependable.  Our country’s fiscal problems are not likely to fade and the difficulties that began in the mortgage market earlier this year have yet to wane.  But it is impossible to provide decent, stable, and affordable homes if housing providers cannot count on their public sector partners.  We need clear rules of engagement and respect for developers’ multi-year perspective when planning for the purchase, renovation, or recapitalization of housing portfolios.  It is unacceptable that HUD, for example, would not fully fund it obligations to Section 8 property owners.

Third—Be balanced.  Recognize that not everyone can, or should, own a home.  Reject false dichotomies that pit people against place, renter against owner, nonprofit against for-profit, free-market against regulation. 
Look instead for ways to make the smartest, best investments and implement the smartest, best policies, recognizing that there always will be tensions and trade-offs.  Admit, too, that some at-risk properties simply cannot be kept in the affordable housing stock—not every acquisition price is reasonable to pay or subsidize.

Fourth—Be creative and flexible.  Even as we look to policymakers for clearer, more consistent, and more coordinated guidance and resources, states, localities, and practitioners need waivers and flexibility to try new things, to solve problems in fresh ways.  We need to agree that what really matters are the ends, not the means.  Having the freedom to innovate and experiment is key.  All of us here in this room have an obligation to make room for change, to give new ideas—such as allowing the subsidies of obsolete properties to be reassigned—the benefit of the doubt.

Fifth- Focus on results.  True progress requires that we track results and take responsibility for both success and failure. Simple metrics that count the number of people living in affordable units are not enough. The true success of our housing investments should be judged by the overall well-being of individuals, families and communities. 

That is why, in February, MacArthur launched a $25 million research effort to develop evidence on how housing matters to a range of desirable outcomes for people – better education, health, jobs – and better communities.  We need that evidence so that the public and policymakers will understand that housing is a critical path for reaching America’s highest aspirations for fairness and opportunity.

Sixth, and last—Be bold.  Think big.   As we consider how to make this new vision for US housing policy a reality, I would like to bring us full circle.  Often the best way to achieve a daunting goal is to take on the nearest and most pressing challenge, for example, the impending loss of one million affordable rental homes over the decade ahead.  If we stem that loss, we will create the momentum to achieve the larger goal that animates us: a decent affordable home for all.

Harry Truman said it best in September 1945 when he challenged Congress to strengthen our nation’s commitment to affordable housing.  He said:  “A decent standard of housing for all is one of the irreducible obligations of modern civilization.  The people of the United States, so far ahead in wealth and productive capacity, deserve to be the best housed people in the world.”

Four years later, the Housing Act of 1949 made this our nation’s policy when it declared that every American deserved “a decent home and a suitable housing environment.”

The time has come to fulfill that commitment.  The window of opportunity is open because of your work, because of the powerful national demonstration that affordable rental housing can be preserved, because of the research that is beginning to show how housing matters for health, education, jobs, community vitality, and because of the model policies illuminated by this conference.

Let us go forth from this conference with renewed determination to realize Harry Truman’s dream, once and for all. 

Thank you.  I look forward to your questions and comments.

Housing, Preserving Affordable Rental Housing, Housing, United States