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This file contains material relating to 1974 housing and Community Development Act, Homeownership, Conduminium, Mortgage Assistance.
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9/4/75 - White House Conference on Domestic and Economic Affairs, Seattle
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9/4/75 - White House Conference on Domestic and Economic Affairs, Seattle
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This file contains material relating to 1974 housing and Community Development Act, Homeownership, Conduminium, Mortgage Assistance.
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Carla A. Hills Speeches
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1975-09-04
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1975
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1975-09-04
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1975
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The original documents are located in Box 1, folder "9/4/75 - White House Conference on
Domestic and Economic Affairs, Seattle" of the Carla A. Hills Speeches at the Gerald R.
Ford Presidential Library.
Copyright Notice
The copyright law of the United States (Title 17, United States Code) governs the making of
photocopies or other reproductions of copyrighted material. Gerald Ford donated to the United
States of America his copyrights in all of his unpublished writings in National Archives collections.
Works prepared by U.S. Government employees as part of their official duties are in the public
domain. The copyrights to materials written by other individuals or organizations are presumed to
remain with them. If you think any of the information displayed in the PDF is subject to a valid
copyright claim, please contact the Gerald R. Ford Presidential Library.
Digitized from Box 1 of the Carla A. Hills Speeches at the Gerald R. Ford Presidential Library
FINAL
WHITE HOUSE CONFERENCE
ON DOMESTIC AND ECONOMIC AFFAIRS
SEATTLE, WASHINGTON
SEPTEMBER 4, 1975
HOUSING PRODUCTION IS DOWN IN THE CELLAR!
OUR CITIES ARE STRUGGLING TO STAY ALIVE!
THE COMPLAINTS ROLL IN FROM SUPPLIERS, BUILDERS,
PLANNERS, HOUSEHOLDERS AND THOSE WHO CAN'T AFFORD A HOUSE.
WHO WOULD WANT TO BE AT THE DEPARTMENT OF HOUSING AND
URBAN DEVELOPMENT AT A TIME LIKE THIS?
I WOULD!
YES, WE HAVE PROBLEMS. LOTS OF THEM, AND SOME ARE
AGONIZING, BUT WE FACE A CHALLENGE! ONE THAT IS WORTHY
OF ALL OF OUR ENERGY, INGENUITY AND HORSE SENSE,
BERALO FORD
-2-
COMING UP ON ITS 10TH BIRTHDAY, HUD's JOB IS TO ASSIST
IN THE DEVELOPMENT OF WORKABLE URBAN COMMUNITIES WHICH
MEANS -- DECENT HOUSING IN A SUITABLE LIVING ENVIRONMENT
AND EXPANDING ECONOMIC OPPORTUNITIES -- PARTICULARLY FOR
PEOPLE WITH LOW AND MODERATE INCOMES.
AT HUD WE GET A WIDE VARIETY OF COMPLAINTS -- BUT THEY
ALL HAVE A COMMON DENOMINATOR:
MONEY!
SOME OF OUR FRIENDS AND ALL OF OUR CRITICS WANT US TO
GIVE MORE AT THE OFFICE,
As A PREMISE TO OUR QUESTION AND ANSWER SESSION, LET'S
TAKE A BRIEF TOUR OF HUD AND THE HOUSING SITUATION AND SEE
WHAT'S GOING ON.
THE BEST THING THAT'S GOING ON IS THE FIRST ANNIVERSARY
OF THE HOUSING AND COMMUNITY DEVELOPMENT Act OF 1974.
-3-
AT THE SIGNING CEREMONY LAST AUGUST, PRESIDENT FORD
CALLED IT A "LANDMARK". SENATOR JOHN SPARKMAN -- WHO THEN
CHAIRED THE BANKING AND CURRENCY COMMITTEE CALLED IT THE
MOST IMPORTANT COMMUNITY LEGISLATION SINCE THE HOUSING AcT
OF 1949.
IT IS,
AND, IF THIS GIANT OMNIBUS OF A BILL HAS BEEN TOO SLOW
IN MOVING TO SUIT EVERYBODY -- INCLUDING US AT HUD --- JUST
REMEMBER THAT IT ENCOMPASSES AND SHAKES INTO PLACE MOST OF
THE OFTEN CONFLICTING HOUSING LEGISLATION OF THE PAST QUARTER
CENTURY, ITS VAST AND MULTIPLE PROVISIONS DID NOT BECOME A
FAIT ACCOMPLI THE DAY IT WAS SIGNED INTO LAW.
BUT, THE IMPORTANT THING NOW IS THAT IT IS WORKING --
AND ITS SPEED IS ACCELERATING.
IT CUTS AWAY FORESTS OF RED TAPE,
IT GIVES CITY PLANNERS AND MANAGERS THE FIRST SAY --
AND CONTROL -- IN WHAT THEIR CITIES REALLY NEED,
-4-
UNDER THE Act CONGRESS AUTHORIZED $8.3 BILLION FOR
COMMUNITY DEVELOPMENT IN THE FIRST THREE-YEAR PERIOD --
$2.6 BILLION IN THE CURRENT YEAR ALONE,
Now LET'S TURN TO THE PLIGHT OF THE CITIES THEMSELVES.
WHAT IS THE BIGGEST SINGLE CAUSE OF URBAN DECAY?
WASTE!
IN NEW YORK CITY ALONE, 35,000 UNITS OF HOUSING WERE
ABANDONED LAST YEAR.
OBVIOUSLY, MANY OF THOSE UNITS WERE VACATED BECAUSE THEY
WERE NO LONGER HABITABLE. BUT HOW DID THEY GET THAT WAY?
THE MIX OF ONCE PROUD STRUCTURES INCLUDED IN THE
ABANDONMENT STATISTICS GIVES US REASON TO PONDER.
THE WASTE IS NOT JUST IN THE HOUSE OR UNIT ITSELF --
BUT IN THE UTILITIES, STREETS, SCHOOLS AND TRANSPORTATION
THAT TOOK YEARS TO DEVELOP, AN ABANDONED HOUSE ABANDONS A
PART OF THOSE INDISPENSIBLE SUPPORTIVE ASSETS AS WELL.
:-5-
AND, IT CONSIGNS TO OBLIVION SOME PIECE OF THE INVESTED
WEALTH, HISTORY AND CULTURE THAT HELPED MAKE THE CITY MAJESTIC,
IN THE RUSH OF PEOPLE TO THE OUTSKIRTS OF TOWN, WE HAVE
FOSTERED THE DISASTROUS NOTION THAT CITY HOUSING CAN BE
DISCARDED -- AND EASILY REPLACED OUTSIDE THE CITY BOUNDARIES.
OUR OWN GOVERNMENT'S HOUSING POLICIES ENCOURAGED THE
GREAT SUBURBAN SPRAWL -- AND THE RESULTANT DISPERSAL OF PUBLIC
AND PRIVATE INVESTMENT TO KEEP THE "OUTWARD" BOUNDING,
NATURALLY, THE NEW HOUSING DEVELOPMENTS NEEDED ALL THE
THINGS THAT THE CITY ALREADY HAD -- IN ADDITION TO SHOPPING
FACILITIES, CHURCHES, ENTERTAINMENT AND CULTURAL AMENITIES
-- so HUGE PARTS OF THE CITY'S RESOURCES AND SUPPORTIVE
CAPACITY JOINED THE EXITING CROWDS.
OUR STUDIES CONCLUDE -- STATISTICALLY -- WHAT WE MIGHT
HAVE CONCLUDED -- INTELLIGENTLY -- LONG AGO:
-6-
THAT IT IS FAR LESS EXPENSIVE TO RECYCLE A CITY THAN
IT IS TO BUILD A SUBURB.
IN FACT, AN URBAN REDEVELOPMENT PROGRAM MAY CONSUME
50 PERCENT LESS LAND; 55 PERCENT LESS CAPITAL; 44 PERCENT
LESS ENERGY AND CREATE 45 PERCENT LESS AIR POLLUTION.
CAN OUR NATION AFFORD THIS KIND OF WASTE?
THE ANSWER IS AN EMPHATIC "NO".
THE RESOURCES OF OUR CITIES ARE TOO PRECIOUS TO TOSS
IN THE ASH HEAP OF CIVILIZATION.
ARE THE CITIES READY FOR REBIRTH?
OUR FIRST YEAR WITH COMMUNITY DEVELOPMENT GRANTS SHOWS,
UNMISTAKENABLY, THAT IF THE FEDERAL GOVERNMENT KEEPS ITS
HEAVY HAND OUT OF LOCAL DECISION-MAKING, THE CITIES ARE UP
TO THE JOB AND READY TO MOVE.
-7-
MORE THAN 60 PERCENT OF THE $2.6 BILLION COMMUNITY
DEVELOPMENT FUNDS GRANTED IN THE PAST FISCAL YEAR HAS
GONE INTO THE PRESERVATION AND REHABILITATION OF DECAYING
NEIGHBORHOODS.
OUR EXPERIMENTS WITH URBAN HOMESTEADING AND OUR URBAN
REINVESTMENT TASK FORCE PROVE THAT RECYCLING NEIGHBORHOODS
WORKS.
I'M NOT GOING TO TELL YOU THAT ALL OF OUR URBAN WORRIES
ARE BEHIND US -- BUT WE ARE MOVING AND I AM CAUTIOUSLY
OPTIMISTIC ABOUT THE FUTURE,
ANOTHER IMPORTANT PART OF THE NEW AcT PROVIDES RENTAL
SUBSIDIES FOR LOWER INCOME FAMILIES -- ALLOWING THEM TO
FIND DECENT QUARTERS IN QUALIFIED BUILDINGS OF THEIR OWN
CHOOSING, AT A RENTAL THEY CAN AFFORD TO PAY.
AND THE LOCAL COMMUNITY ITSELF HAS THE MAJOR SAY IN
HOW THE RENTAL SUBSIDIES WILL BE USED, WHETHER IN NEWLY
CONSTRUCTED, SUBSTANTIALLY REHABILITATED OR EXISTING HOUSING
UNITS,
(
-8-
MORE THAN THAT -- TO QUALIFY FOR RENTAL ASSISTANCE,
NEWLY CONSTRUCTED BUILDINGS MUST GUARANTEE A MIX OF RENTAL
UNITS so THAT FAMILIES ON THE LOWEST RUNG OF THE ECONOMIC
LADDER DON'T JUST MOVE FROM AN OLD SLUM TO A NEW ONE.
HUD HAS COMMITTED $1.6 BILLION TO ASSIST 400,000
RENTAL FAMILIES IN THE COMING FISCAL YEAR -- A COMMITMENT
BY THIS NATION TO THE EVENTUAL ELIMINATION OF THE DESPAIR
THAT ENVELOPS EVERY GHETTO,
IF THE PLEDGE TO HELP PROVIDE A SUITABLE LIVING
ENVIRONMENT FOR EVERY AMERICAN FAMILY IS REALLY BEYOND US,
AS AMERICANS, THE WORDS OF THAT DECLARATION -- WHOSE 200TH
BIRTHDAY WE ARE ABOUT TO CELEBRATE -- MUST SURELY HAVE A
HOLLOW RING,
BUT, IN TODAY'S ECONOMY, THE GOAL MAY SEEM NAIVE.
HOUSING IS SUFFERING A SEVERE CASE OF CONTAGIOUS
INFLATION.
-9-
INDUSTRY ECONOMISTS CAN SHOW YOU THAT OUR MEDIAN INCOME
FAMILY -- MAKING $13,000 A YEAR -- CAN SUPPORT A HOME
COSTING $32,500. BUT, IN FACT, TODAY'S MEDIAN NEW HOME
SELLS FOR $39,000, AND THE MEDIAN EXISTING HOME COSTS MORE
THAN $35,000.
WELL, OF COURSE, YOU CAN DESTROY ANY DREAM WITH THE
RIGHT SET OF STATISTICS. THIS SET CONCLUDES THAT LESS THAN
ONE-THIRD OF ALL AMERICAN FAMILIES HAVE ENOUGH INCOME TO
PURCHASE A MEDIAN HOME -- NEW OR OLD.
AND THERE'S ANOTHER SET OF NUMBERS TO BACK UP THE
FIRST SET:
PRICE OF AN AVERAGE HOME -- UP 38 PERCENT IN THE PAST
THREE YEARS;
LAND -- UP 62 PERCENT;
FINANCING -- UP 148 PERCENT;
LABOR -- UP 39 PERCENT.
-10-
DOES ALL THIS MEAN THAT THE AMERICAN DREAM OF
HOMEOWNERSHIP HAS BECOME A NIGHTMARE?
WHAT IT SHOULD TELL US IS THAT THE TIME HAS COME TO
START REORDERING OUR PRIORITIES.
YES, THE COST OF THE MEDIAN HOUSE IS UP.
BUT, so IS THE SIZE OF THAT MEDIAN HOUSE.
IN FACT, IT IS ALMOST 50 PERCENT LARGER THAN IN 1950
-- WITH SECOND, THIRD AND SOMETIMES FOURTH BATHROOMS,
GUEST ROOMS, WALK-IN CLOSETS, RECREATION OR "FAMILY" ROOMS,
DARK ROOMS, LIGHT ROOMS, LAUNDRY ROOMS, PORCH ROOMS, EXTRA
KITCHEN ROOMS, AND TWO ROOMS TO HOUSE THE CARS,
OF COURSE, NOT EVERY HOUSE HAS ALL THOSE ROOMS -- BUT
THE MANY THAT DO INFLATE THAT STATISTICAL "MEDIAN".
AND THE PROMOTIONAL PUSH BEHIND THOSE "EVERYTHING"
HOUSES HAS BEEN ENOUGH TO MAKE THE "AVERAGE" BUYER OF THE
"AVERAGE" HOME BEGIN TO BELIEVE THAT SUCH FRILLS MUST BE
"NECESSITIES".
-11-
PERHAPS THEY ARE. BUT MAYBE, THEY'RE LIKE THE OVER-
POWERED, SLEEKLY APPOINTED AND EXTRAVAGANTLY EXPENSIVE
SUPER CARS THAT COLLIDED WITH OUR ENVIRONMENT CONCERNS
AND THE GASOLINE SHORTAGE.
MODERN BUILDERS WHO HAVE ELIMINATED THE GADGETS AND
LEAVE AN UNESSENTIAL ROOM OR TWO UNFINISHED HAVE FOUND THAT
THEY CAN CUT THE ASKING PRICE OF A HOUSE FROM $30,000 TO
$17,000. WITH THE COST OF MORTGAGE MONEY IN TODAY'S MARKET,
THAT BECOMES A DIFFERENCE THAT CAN MAKE ALL THE DIFFERENCE
AT THE BEGINNING OF EVERY MONTH.
ASIDE FROM INFLATION, THE HOME BUILDER HAS INHERITED
A LOT OF EXPENSIVE ADD-ON COSTS AS A RESULT OF THE NATION'S
OWN CARELESSNESS IN THE PAST.
COMMUNITIES HAVE NEW -- AND CERTAINLY NEEDED --
ENVIRONMENTAL IMPACT STATUTES, STRINGENT AND COMPLEX
ZONING AND BUILDING CODES, SEWER MORATORIA, NO-GROWTH OR
PLANNED GROWTH POLICIES, AND ALL OF THEM AFFECT THE
EVENTUAL PRICE OF THE NEW HOME,
-12-
As A SOCIETY, THE AMERICAN PEOPLE SEEM TO BE SAYING
THAT THEY ARE WILLING TO PAY FOR ESTHETICS -- EVEN IF IT
MEANS THAT THEY CAN NO LONGER AFFORD AS LARGE A HOME.
THE SIGN OF THE TIMES IS REFLECTED IN THE HOUSING
INDUSTRY'S ACCEPTANCE OF THE CHALLENGE, THE SINGLE-FAMILY
DETACHED HOME IS BEING REPLACED IN PART BY TOWNHOUSES,
CLUSTER HOMES AND CONDOMINIUMS.
BUT, IS COST THE ONLY FACTOR?
THE TRUTH BEHIND THE INCREASING POPULARITY OF THE
NATION'S NEW "CONVENIENCE" HOUSING IS THAT AMERICA ITSELF
HAS BEEN UNDERGOING A DRAMATIC CHANGE IN ITS OWN LIFE
STYLES AND DEMOGRAPHICS.
THE CHANGE IS UNDERSCORED BY THE REMARKABLE INCREASE
IN SMALLER, ADULT-ORIENTED HOUSEHOLDS.
SINGLE PEOPLE, YOUNG MARRIEDS, CHILDLESS COUPLES AND
THE ELDERLY ACCOUNT FOR 82 PERCENT OF OUR NET POPULATION
GAIN BETWEEN 1970 AND 1973.
-13-
THE RESULT HAS BEEN THE DEMAND -- AND THE CONTINUING
NEED -- FOR SMALLER UNITS, CLOSER TO THE CITY, ACCESSIBLE
TO NEAR-BY INDUSTRY AND EMPLOYMENT OPPORTUNITIES, AND TO
CULTURAL CENTERS.
ALL THIS IS FACT, BUT THE HOUSING INDUSTRY IS STILL
DEPRESSED, AND YOU HAVE A RIGHT TO ASK WHAT HUD's DOING
ABOUT IT.
THE FIRST THING WE'RE DOING IS GIVING ALL-OUT SUPPORT
TO PRESIDENT FORD'S ECONOMIC PROGRAM.
ALL OF OUR HOUSING ILLS, NOTWITHSTANDING, THE PRINCIPAL
CAUSE OF THIS INDUSTRY'S PLIGHT IS A RAMPANT INFLATION
AGGRAVATED BY A RECESSION-INSPIRED EROSION OF REAL PURCHASING
POWER,
HOUSING RECOVERY IS TIED TO THE RECOVERY OF THIS
COUNTRY'S OVERALL ECONOMY. UNLESS THIS NATION CAN HALT
INFLATION AND REDUCE THE DISPARITY BETWEEN ACTUAL COSTS
AND REAL INCOME, THE HOUSING INDUSTRY WILL STAY IN THE
FORE OF THE VICE THAT'S SQUEEZING THE PEOPLE THEMSELVES,
-14-
ALL OF US KNOW THE BAD NEWS. THE GOOD NEWS IS THAT
THE PRESIDENT'S NATIONAL PLAN HAS ALREADY BEGUN TO TURN
THE ECONOMY AROUND.
IN HOUSING, I AM PLEASED TO REPORT THAT SALES OF NEW
HOMES HAVE RISEN 37 PERCENT SINCE THE FIRST OF THE YEAR,
THERE HAS BEEN A 40 PERCENT IMPROVEMENT IN THE LEVEL OF
ALL HOUSING STARTS AND 36 PERCENT INCREASE IN SINGLE FAMILY
STARTS.
THE SECOND THING WE'RE DOING -- AND WE HAVE REASON TO
BELIEVE IT'S REFLECTED IN THE HOUSING STARTS IMPROVEMENT --
IS FOLLOWING THROUGH ON THE ADMINISTRATION'S THOUGHTFUL AND
FORCEFUL INITIATIVE TO SUPPORT THE MORTGAGE MARKET,
IN WASHINGTON, THEY'RE ALWAYS TALKING ABOUT "THE BOTTOM
LINE".
WELL, THE HOME BUYER'S "BOTTOM LINE" IS THE MORTGAGE
HE MUST HAVE -- BEFORE HE CALLS THE MOVING VAN.
-15-
IN THE PAST 18 MONTHS, THE GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION HAS OFFERED $13.5 BILLION TO PURCHASE ALMOST
450,000 MORTGAGES BEARING INTEREST RATES THAT ARE BELOW THE
MARKET RATE. TODAY THAT IS 7-1/2 PERCENT WHILE THE MARKET
IS AT ABOUT 9 PERCENT. MODEST AS THIS INTEREST SUBSIDY MAY
SEEM, WE BELIEVE THAT IT IS PARTICULARLY WELL SUITED TO THE
CURRENT HOUSING SITUATION BY COMPENSATING TO A SIGNIFICANT
DEGREE FOR THE RAPIDLY RISING COSTS OF HOME FINANCING,
ON JUNE 26, PRESIDENT FORD RELEASED ANOTHER $2 BILLION
FOR THIS KIND OF MORTGAGE ASSISTANCE, ENOUGH FOR AN ADDITIONAL
65,000 HOMEBUYERS. AND, ON JULY 2, THE PRESIDENT SIGNED THE
EMERGENCY HOUSING AcT WHICH GIVES HUD DISCRETIONARY AUTHORITY
TO USE AN ADDITIONAL $10 BILLION FOR MORTGAGE ASSISTANCE,
ENOUGH MONEY TO ASSIST 300,000 MORE HOMEBUYERS.
FOR THE GOVERNMENT TO ENTER THE HOUSING MARKET IN A
MORE MASSIVE WAY AS SOME HAVE SUGGESTED, WOULD NECESSARILY
REQUIRE GREATER TREASURY BORROWING AND FORCE UP INTEREST
RATES AND THUS THE COSTS OF HOME FINANCING, By FURTHER
WIDENING THE GAP BETWEEN REAL INCOME AND HOUSING COSTS, WE'D
BE ARMING THE HYDRA-HEADED MONSTER WE ARE ALL TRYING TO
CONQUER,
-16-
Yes, WE HAVE PROBLEMS.
You DON'T HAVE TIME TO HEAR HOW MANY.
BUT, I REPEAT.
HUD IS A GREAT PLACE TO BE IN A CHALLENGING ERA LIKE
THIS.