HUD Secretary Ben Carson at IBS 2019

ladies and gentlemen please join me in welcoming our friend dr. and Secretary ben Carson thank you so much we live here out of absolute age thank you so much thank you thank you this is why NAHB is one of my favorite groups Thank You Randy for that introduction and thank you to the many members of the Executive Board that are here today who have really made this event possible the displays out there absolutely spectacular and it's a great honor to speak with you on the 75th anniversary of this remarkable show showcase you know there's really no shortcuts to traditions that hold for 75 years but traditions have an enduring spirit one that much like home ownership can be passed on to loved ones for generations I also applaud your ongoing success as an effective voice for hundreds of thousands of men and women who build our nation's home your associations research provides an indispensable source of insight into many trends and issues affecting the housing industry and it really is fascinating album to display floor to see all the innovative techniques that are coming forward and all we have to do is make sure that we update their thinking about housing to be consistent with some of the technological advances our policies at HUD are often informed by your insights and your studies quantifying the high cost of state and local regulations and affordable housing developments this is especially pertinent today and we want to make policies based on the kind of information that we get from you and other organizations on real data and not on just ideology and folklore which is so often done and you know it was it was easy in medicine and medicine people respond to data and evidence not so much in government but at HUD you know our mission to it is to ensure that every American has access to safe fair and affordable housing and we we also believe that when it comes to capital our greatest capital is human capital it's actually the people who live in those houses so we have to be concerned about more than just putting people in houses we also be concerned about developing that capital both HUD and NAHB share a common mantra homes are not just roofs over people's heads they are at the heart of building communities and it said that home is where the heart is but the reverse is true as well the heart is where the home is in each year NAHB members build nearly 80% of America's homes and that's really quite remarkable in many ways your work studies the pulse of American prosperity and keeps it beating strong now under the current administration's leadership we continue to enjoy historic highs in employment you know just last month you saw we added another three hundred and four thousand jobs you know job creation and economic growth it's fantastic but challenges remain in making sure that every American from every demographic can share in the gains of the past several years and this is especially true in the area of affordable housing few conditions conditions afflict the hearts of Americans as much as the shortage of affordable housing today I'd like to share the ways that HUD intends to diagnose the affordable housing challenge and the solutions we aim to prescribe in the months ahead homeownership is the most powerful mechanism for wealth creation in our nation according to the National Association of Realtors the average net worth of a renter is $5,000 the average net worth of a homeowner is 200,000 dollars that is a fourty fold difference and too many Americans feel like they are walled off from homeownership they see no door to this American Dream however as it turns out the door is just a wall with a key slot it hope we believe we found that key and that key is incentives and please don't anyone take anything from the wall analogy I know there's some media here I'm not making any jabs okay okay the incentives work the same way that Keys do an obstruction is unlocked by creating alignment by aligning the conditions for increased affordable housing supply with the best interest of homebuyers Builders innovators and regulators we can unlock the production of more affordable homes for countless American family in the years to come the key to alignment so to speak is a simple equation ad positive incentives and subtract perverse incentives for example we're adding positive incentives for construction and sale of affordable homes by expanding HUDs low-income housing tax credit pilot for multi-family home development and at the same time proactively supporting new technologies and housing innovation and we're working to subtract perverse incentives that lead to the maintenance of unnecessarily and overly burdensome state and local regulatory barriers to construction and development that way there's a full-court press on housing affordability on all sides so let's start with what we're adding as you know HUD administrators administrate several programs that support the production of new housing and the preservation of existing low-income housing these programs the new construction and substantial rehabilitation loan products under Section 221 d 4 and 220 are extremely important these loan products intersect with one of the most important resources for creating affordable housing in the United States today and that's the low-income housing tax credit also known of course as lytec created by the Tax Reform Act of 1986 lytec program gives state and local governments the equivalent of nearly 8 billion dollars in annual budget authority to issue tax credits for the acquisition rehabilitation or new construction of rental housing targeted to low-income households in AHP President Jerry Howard actually helped advocate for the establishment of the lytec many ago and countless Americans across the country can now afford their homes because of it today I'm proud to announce that as part of our efforts to increase the supply of affordable housing HUDs office of multifamily housing programs is expanding the use of lytec pilot into our new construction and substantial rehabilitation loan products with the publication of a new notice this will streamline the process of FHA insurance applications for projects with equity from light tech programs and as part of our commitment to further align our policies and underwriting towards supporting affordable housing production and preservation now as new construction and substantial rehabilitation currently make up more than 40 percent of our total volume we expect the expansion of our lytec pilot to further increase head's affordable housing volume this alignment of preservation and affordable housing development also supports our opportunity zone initiative a topic I'll return to a little later as well as urban revitalization across the country HUD is also working to incentivize affordable home construction by promoting development of new technologies in housing innovation we have a department of innovation now which is exploring some of the many things some of the things that I've seen on the floor here today and some of the things that aren't here but the technology is advancing quite rapidly and the unprecedented and historical nature of natural disasters affecting our country highlights the need for improved construction methods and materials to make sure that all homes new and existing can withstand the next disaster and there have sped a tremendous amount of attention on mitigation so that the next storm that comes along doesn't put us back in the same situation and that's gonna really actually save us quite a lot of money we're very excited by recent innovations that have the potential to bring more affordable attractive homes to the market particularly in the low-income communities such innovations include homes that use automated or factory assembly techniques such as 3d printing and other methods which may facilitate construction in a faster less wasteful and more environmentally sound way innovations in construction materials could create components that are higher performing and you've seen some of those out on the display floor and less prone to mold win or water damage and even to fire damage more resistant to deterioration sometimes an emerging technology is delayed because of information and balances between the buyer the home builders and the regulatory officials this is where HUD can play a role we can serve as a catalyst for information about innovation in the home building industry with the goal of speeding adoption and use of new technologies one of the interesting things in medicine is things change very quickly you know when a new procedure or a new medication or new information about disease comes out it is in all the journals it's in all the conferences and people adopt it very very quickly not so much in government but again something that we're working on we're working very hard on that at HUD and you know the the Wills of change are all slowly about the speed of a crippled snail but you know we are giving that snail a wheelchair I think it's gonna make a big difference but we also we also must understand the potential risk to both builders and lenders with the new technologies so obviously we must be careful with them how does implement implementing proactive strategies to make sure that such barriers are minimized the HUD office of innovative innovation will be working with partners and the housing industry stakeholders to promote the development of inclusion and the adoption of new technologies throughout the housing sector on the subtraction side of the incentive equation we're looking at ways that would incentivize local officials to cut back on some of these archaic barriers and local regulatory barriers such as outmoded zoning and land use restrictions some of these barriers have been in place and these regulations have been in place for ten twenty fifty a hundred years have nothing to do it what's going on today and we have to incentivize people to do something about them so if we tell local jurisdiction that the likelihood of them being a recipient of a significant grant is significantly increased if they get rid of the barriers I think there will be a little more attention to that and that's what we're going to be doing now as many of you know perhaps all too well the free market may be guided by an invisible hand but unnecessary government and regulatory barriers act like invisible handcuffs and it's time to untie the hands of our nation's home builders by putting the free back into free market now a source I can cite when highlighting the importance of reducing regulatory cuts come straight from NAHB your research has shown that more than 25% of the cost of a home is a direct result of federal state and local regulations that number is even higher for multifamily dwellings it's about 31.2% and in a quarter of cases up to 42% and that's why you can go to places like Los Angeles and see people who are employed making 50 60 70 thousand dollars a year living in tents not able to afford the housing that is being addressed multifamily property development has a multiplier effect on affordable housing many major cities restrict a large majority of land parcels to detached single-family homes by reforming these restrictive land use regulations neighborhoods could create more affordable homes by increasing density without changing the core characteristics of their communities HUD is also working to address the affordable housing shortage through a variety of other initiatives but the last one I'll adjust today is a powerful new tool created by the 2017 tax cuts and job act Opportunity Zones Opportunity Zones were created to stimulate economic development and job creation by incentivizing long term investment in low-income communities they follow a simple credo everyone does best when you invest in the distressed and you know when we invest in this distressed neighborhoods we end up with more people to share tax expense and who can innovate and be productive makes all the difference in the world Opportunity Zones give investors various tax incentives where they can defer and even reduce the federal tax liability in the sale of appreciated assets if they place their gains in the new vehicle called a qualified opportunity fund and these funds then channel pooled capital into equity investments in small businesses and real estate in distressed communities there's more than 8700 areas across the country that have been designated as opportunity zones in those designated areas nearly one in three people live in poverty and the unemployment rate is almost twice the national average you know I'm speaking of unemployment rates one of the things that we will have new rules coming out in the next couple of months is section 3 many of you familiar with that says if you're receiving a HUD grant you have an obligation to hire low-income people or train them or give contracts to them in that area and it's been very difficult to use and very cumbersome and by rewriting that rule we're gonna make it much easier to use and also put some teeth in it so that people will be incentivized to use it now these committees are where affordable housing as most lenient that's low-income communities and the primary source for opportunities on investment comes from the estimated 2.2 trillion dollars of unrealized capital gains and stocks and mutual funds held by corporations and individuals it's one of the reasons that the Treasury Department estimates that opportunity's own enterprises will probably attract more than a hundred billion dollars in private investments some people say well this is just a big bonus for rich people but it's not just a big bonus for rich people it's a big bonus for these environments that people have neglected and would have no reason to invest them and we need to recognize that having a win-win situation works for this nation and there are those who there are those who unfortunately say things like you can't have a fair society in which you have both poor people and billionaires you've probably heard some of that in the last few days what a bunch of crap you know because did do they the people who say that today realize that a lot of the jobs and a lot of the opportunities come from those billionaire's do they realize that in this nation that they love to criticize and say is a horrible place that treats poor people and minorities horribly why is it if that's the case that you have caravans of people forming to try to get in here that doesn't make any sense you know I did people divorce themselves from reality because they only think about how do we drive more wedges between people we don't need to be thinking about driving wedges we need to be thinking about what kind of people we are I think we're very decent people yesterday you know when I was in Fontana California and I visited one of the faith-based organizations and looked at what they were doing the food they were providing the housing the educational opportunities the training and I'm seeing this all over the country because I think the majority of people in this country are actually good and decent people who are willing to help they just need to be sure that you know they're not throwing their money away or being taken advantage of and when people start finding places where they can invest in their fellow man I don't think there'll be any lack of resources to do that billionaires or not because Americans are basically the same people poor Americans and rich Americans and it's the values the judeo-christian values that gave us a sense of well-being in a sense of what we should do in terms of reaching out to our neighbors and we shouldn't let the purveyors of hatred destroy that core of who we are now one of the thank you one of the things thank you and I hope I hope that each one of you will carry that message with you to your sphere of influence because we all have significant spheres of influence and if we begin to talk about stuff and not just keep our mouth shut because we're afraid that somebody's going to attack us I think it'll make a big difference in what happens in our country but when we go back to the opportunity zones for a moment here investors must keep their capital investment in distressed communities for a period of 5 7 or 10 plus years depending on the investment and this long-term lock-in is really the success of the program because you know there have been other types of enterprise zones and other things in the past and people swooped in and they gained their advantage and then they're gone so they're here today and gone tomorrow with this strategy of long-term investment incentives and the longer you invest the greedy your tax benefit they're going to be here today and here to stay and that's what we need and they're also going to be interested in the well-being of that community because they want to protect their investment so they're not I'm not going to just turn their back on it and walk away those are the kinds of things that are really going to make a difference and Opportunity Zones will allow wide variety of eligible investments which can benefit multiple sectors of a vulnerable communities development ecosystem for example developers service providers and other small businesses critical to the production of affordable housing could receive new equity investments alternatively opportunity funds motivated by social impact could help provide capital where there are shortages in scaling mixed income and workforce housing in this way it's good business for larger businesses to invest in smaller businesses and vulnerable community and as you can tell we love businesses that's the power of getting positive incentives rather than perverse motivations to align now last December President Trump established the white house opportunity revitalization Council through an executive order the revitalization council consists of members across 13 different federal agencies and will work to prioritize opportunity zones in a variety of federal efforts including grant funding loan guarantees infrastructure spending and crime prevention and we are considering a list of more than a hundred and fifty different actions to better target streamline and coordinate federal programs and opportunities zones I'm privileged to chair the revitalization Council and look forward to the great honor and challenge of bringing opportunity to the doorsteps of all Americans especially those for whom opportunity is ordinarily secured and I hope you will join me in further collaborating sharing ideas developing best practices on how to apply these solutions it has been said there's no medicine like hope no incentive so great no tonic so powerful as the expectation of something tomorrow and in closing I just want to encourage everybody to take the philosophy that I've accepted and that is just do what's right and ignore the critics and recognize that we the American people are not enemies and what do we want to teach our young people we want to teach them to truly be tolerant and accepting of other people not just people who agree with them I always say if two people agree about everything one of them isn't necessary and I think everybody is necessary and you can actually learn more from talking to people who you disagree with and you can't from talking to people who agree with you on everything and that's what a diverse society does they sit down and they talk together and they come to an accommodation they don't get in their respective corners and demonize and resist and act like third graders my apologies to third graders and we obviously must do better than that and together as a united people we're much more powerful and if you look at history there's no nation that has divided itself and been successful and we can do better if we continue to align our efforts and ensure safe fair and affordable housing for all Americans we can most definitely build a better America with you thank you great speeds thank you if I could you you got a chance to look at the floor and you you've talked about innovative ideas and innovative techniques and innovative devices can you did you see any that you thought were particularly innovation some of the new five board that seems to be much more resilient the ability to wrap you know it in the product when you're putting it up as opposed to putting up the plywood and then coming back with tie back or something alright but that saves a lot of labor cost and of course that then will save you a lot of money but one of the other things I have to say is you know in addition to some of the new innovative products the fact that there's so many retailers and manufacturers have donated materials to places that have been hit by disasters and economically depressed areas and people like Lowe's who come in with their product and they're willing to do that you know that kind of thing just does my heart so much good I see so many wonderful people out there who are willing to help and that's the thing that makes it worth getting up every morning thank you thank we we have wonderful members that do a lot of that we've spent a lot of time down in Puerto Rico in Florida yeah and we're actually kind of doing a study but how the those those hurricanes affected the housing with building codes that we adopted since the 2000 well I'll tell you it with with Irma in Florida you know we were expecting a lot more damage than happened but because of the mitigation efforts that had occur because of the other it wasn't anywhere near what and that would be a good example for what should be done in all the other places and that's why Congress has allocated 16 billion dollars for mitigation purposes right so we get these older homes up to the different building codes so they'll have less disaster so Congress actually does this some things you know they can actually work together they can get some things then let's talk about Opportunity Zones for a minute help me figure out how we get affordable housing involved with Opportunity Zones well first of all there's a lot of you know public housing there's three hundred and eighty thousand units of public housing and opportunity songs three hundred and forty thousand units of PRA PRA units so it's already there and we have 35 million Americans that live in Opportunity Zones so there's no question we need to bring it in but by incentivizing that money to come in there and already having vehicles like the rad program which is already renovated more than a hundred thousand and it's and there's like three hundred and forty thousand and progress right now and we're actually trying to lift the cap on rad so that we can basically get rid of all the dilapidated public housing that exists but using that the various other kinds of tax credits along with the incentive the long term incentive I think will result in significant amounts of affordable housing we're also through the task force through the revitalization council looking at regulatory barriers especially in the opportunity zones and if we can remove those so that we make it much easier particularly to build multifamily dwellings in those areas and to build them in a way that's holistic as opposed to the way that it used to be done in isolation right I think that will make a big difference and it'll make these places that people want to come - they won't be places that are neglected any longer and people worry about gentrification there - where you're going to put everybody you know when you do something like a rad program it automatically built into the contract that you preserve the units as affordable units long into the future and a lot of the other mixed income areas have incentives for creating affordable housing so I don't think that's going to be an issue I think you're going to have beautiful communities developed throughout the country we're also working on vouchers and removing some of the disincentives associated with vouchers because a lot of landlords just don't want to go through all the hassle there's it's not that they're bad people but they say I can take this one with no hassle or this one with hassle oh thank you oh no we're getting rid of the hassle so that people can move to all kinds of different areas and I think that will make a big difference and then let me just tie all that up in a bundle by saying and some of the places that are not opportunity zones one of the big problems we have is NIMBYism not in my backyard I totally understand NIMBYism you know the biggest investment a lot of people have is their home but the reason that NIMBYism exists is because people are remembering the old model where the federal government came in with a bucket of money and built these humongous public housing facilities and then walked away while they immediately started to deteriorate nobody was looking after them who would want that in their neighborhood right we don't do that anymore now they're much smaller they're tailored to the communities they're not built in the middle of the block of homes you know established neighborhood you put them on the periphery and that way teachers and and fireman and nurse and but can live in the same neighborhood where they work I think that enhances the neighborhood it just needs to be done the right way and that's the only way we're doing it anymore yes in my backyard for a change yes so we talked about in the back our creation for creating housing for all I just haven't had one of my seats I thought I'd bring it to you oh well thank you I will read that with great relish and dr. Carson we so appreciate you and all you've done for our industry and thank you for being with us today well thank you for what you all do for America all right [Applause]

Channel: NAHBTV

Views: 862

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Keywords: NAHB, Ben Carson, HUD, #IBS2019

Id: xA7PKQ43Wj8

Length: 35min 32sec (2132 seconds)

Published: Tue Mar 05 2019