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This file contains material relating to Waste, Homeownership Subsidy Program, Conspicuous Consumption.
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11/5/75 - American Business Press, The White House
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1133436
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11/5/75 - American Business Press, The White House
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This file contains material relating to Waste, Homeownership Subsidy Program, Conspicuous Consumption.
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Carla A. Hills Speeches
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1975-11-05
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1975
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1975-11-05
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1975
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The original documents are located in Box 1, folder "11/5/75 - American Business Press,
The White House" 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States of America his copyrights in all of his unpublished writings in National Archives collections.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
AMERICAN BUSINESS PRESS
THE WHITE HOUSE
NOVEMBER 5, 1975
HUD WILL BE 10 YEARS OLD ON SUNDAY, NOVEMBER 9TH.
ITS 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.
THE COMMON DENOMINATOR OF ALL SUGGESTIONS, IDEAS,
CONCEPTS AND COMPLAINTS THAT ROLL INTO HUD's OFFICES IS
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 PERIOD, LET'S
TAKE A QUICK LOOK AT WHAT HUD IS DOING,
GERALD a. FORD LIBRART
-2-
THE BEST THING THAT'S GOING ON IS THE HOUSING AND
COMMUNITY DEVELOPMENT AcT OF 1974 -- NOW FOURTEEN MONTHS
OLD AS LEGISLATION AND ONLY ABOUT SIX MONTHS OLD IN
OPERATION (ALLOWING START-UP TIME FOR NEW PROGRAMS).
UNDER THE AcT, CONGRESS AUTHORIZED $8.3 BILLION
FOR COMMUNITY DEVELOPMENT IN THE FIRST THREE-YEAR PERIOD
-- WITH $2.6 BILLION IN THE CURRENT YEAR,
WITHOUT QUESTION, THE BIGGEST SINGLE CAUSE OF URBAN
DECAY IS WASTE. LITERALLY THOUSANDS OF UNITS OF HOUSING
ARE ABANDONED EACH YEAR -- CURRENTLY, MORE THAN 50,000
PER YEAR IN NEW YORK CITY ALONE.
IT IS SIGNIFICANT THAT 60 PERCENT OF THE $2.6 BILLION
GRANTED UNDER THE 1974 Act IN ITS FIRST YEAR HAS BEEN
ALLOTTED, VOLUNTARILY BY RECIPIENT COMMUNITIES INTO THE
REHABILITATION AND PRESERVATION OF DECAYING NEIGHBORHOODS.
FORD
-3-
IT IS SIGNIFICANT BECAUSE THESE FUNDS ARE "BLOCK"
GRANTS -- UNDER THE PRINCIPLE OF FEDERAL REVENUE SHARING
-- IN WHICH THE LOCAL COMMUNITY, AND NOT THE FEDERAL
GOVERNMENT, HAS THE FIRST SAY AND FIRM CONTROL OVER THE
USE OF THE FUNDS FOR COMMUNITY NEEDS, LOCALLY PERCEIVED.
IT CONFIRMS A TRADITIONAL AMERICAN IDEA -- THAT IF
BIG GOVERNMENT KEEPS ITS HEAVY HAND OUT OF LOCAL DECISION-
MAKING, OUR CITIES CAN BE COUNTED ON TO MAKE THE RIGHT
DECISIONS ON THE CITIES' NEEDS.
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,
AGAIN, 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.
FORD
-4-
$1.8 BILLION HAS BEEN AUTHORIZED FOR THIS PURPOSE,
NEVERTHELESS, I FEEL THAT THE RENTAL SUBSIDY -- IN
WHICH HUD PAYS THE DIFFERENCE BETWEEN 25 PERCENT OF THE
TENANT'S INCOME AND THE FAIR MARKET RENT -- PROVIDES BOTH
AN ECONOMIC INCENTIVE TO THE OWNER TO MAINTAIN HIS PROPERTY,
AND AN OPPORTUNITY FOR POOR FAMILIES TO BREAK OUT OF THE
CHAINS OF DESPAIR THAT LOCK THEM INTO THE GHETTO,
AND, IT OFFERS THE BEST HOPE OF BREAKING THE OLD
MOLD OF PUBLIC HOUSING WHICH, TOO OFTEN, HAS CREATED NEW
SLUMS FOR THE DISPLACED POOR OF THE OLD SLUMS.
As YOU WELL KNOW, THE HOUSING INDUSTRY ITSELF HAS
BEEN ONE OF THE HARDEST HIT BY THE TWIN EVILS OF INFLATION
AND RECESSION. So, ONE OF THE FIRST THINGS WE'RE DOING
AT HUD IS GIVING OUR STAUNCH SUPPORT TO PRESIDENT FORD'S
ECONOMIC RECOVERY PROGRAM,
HOUSING RECOVERY IS TIED IRRETRIEVABLY TO THE RECOVERY
OF THE ECONOMY ITSELF,
-5-
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, 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 HOUSING STARTS.
THE SECOND THING WE'RE DOING IS FOLLOWING THROUGH ON
THE ADMINISTRATION'S FORCEFUL INITIATIVE TO ENSURE GREATER
AVAILABILITY OF MORTGAGE CREDIT FOR PERSONS OF MODERATE
MEANS.
IN THE PAST 18 MONTHS, HUD HAS OFFERED $15.5 BILLION TO
PURCHASE OVER 500,000 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.
FOR THE FAMILY NEEDING A $35,000 MORTGAGE, A 7-1/2
PERCENT TANDEM MORTGAGE INSTEAD OF A 9 PERCENT MARKET
MORTGAGE, SAVES IT $9,500 OVER THE LIFE OF THE MORTGAGE
OR ABOUT $20 A MONTH.
-6-
THIS PROGRAM HAS COMPENSATED TO A SIGNIFICANT DEGREE
FOR THE RAPIDLY RISING COSTS OF HOME FINANCING AND HAS
THUS SERVED TO CUSHION THE SEVERITY OF THE DEPRESSION IN
HOUSING.
THE THIRD THING WE ARE DOING IS REACTIVATING HUD's
HOMEOWNERSHIP SUBSIDY PROGRAM -- IN SUBSTANTIALLY REVISED
FORM.
To SPUR NEW CONSTRUCTION AND SUBSTANTIAL REHABILITATION
OF SINGLE-FAMILY HOMES FOR LOW AND MODERATE INCOME FAMILIES
AND
To EXPAND OWNERSHIP OPPORTUNITY FOR THOSE INCOME
GROUPS WHO HAVE TRADITIONALLY BEEN PURCHASERS OF NEW HOMES
BUT WHO HAVE BEEN PRICED OUT OF THE MARKET BY THE INFLATIONARY
SPIRAL.
THE PROGRAM WILL FOCUS ON NEW AND SUBSTANTIAL REHABILITATION
AND WILL INVOLVE $264.1 MILLION IN NEW CONTRACT AUTHORITY.
-7-
By TOTAL INDUSTRY YARDSTICK, $264.1 MILLION MIGHT
SEEM LIKE A SMALL PATCH ON THE ROOF. BUT, IT'S ENOUGH
TO SUBSIDIZE MORE THAN 250,000 NEW UNITS OF HOUSING.
AND, 250,000 UNITS TRANSLATES INTO ABOUT SIX-AND-ONE-HALF
BILLION DOLLARS IN NEW CONSTRUCTION ACTIVITY AND THE CREATION
OF MORE THAN 500,000 NEW CONSTRUCTION JOBS.
CERTAINLY, I AM NOT TELLING YOU THAT THESE THREE
FEDERAL PROGRAMS WILL MAKE EVERYTHING COME UP ROSES IN THE
HOUSING INDUSTRY THE DAY AFTER TOMORROW,
WE WILL NEED TO CONTINUE TO USE THEM -- WITH CAUTION
AND WITH AN EYE ON THE TOTAL ECONOMY,
WE KNOW THAT IF WE MAKE EXCESSIVE USE OF FEDERAL
STIMULANTS, WE WILL INJURE THE HOUSING INDUSTRY JUST AS
IT IS REGAINING ITS HEALTH.
MEANWHILE, THE INDUSTRY IS FORGING AHEAD. THE UPWARD
CURVE MAY BE SAW-TOOTHED, BUT IT IS DEFINITELY SAW-TOOTHING
ITS WAY IN THE RIGHT DIRECTION,
-8-
IN SHORT:
Yes, WE HAVE PROBLEMS -- AND THE GROUND UNDER US HAS
ITS SHARE OF POT-HOLES.
BUT, THE CHALLENGE IS WORTH OUR BEST EFFORTS.
INDEED, I THINK WE'RE BEGINNING TO WIN THE BATTLE --
AND WE CAN KEEP ON WINNING WITH THE APPLICATION OF OUR
FULL ENERGIES, TIME-HONORED AMERICAN INGENUITY AND THE
JUDICIOUS USE OF SOME OLD-FASHIONED HORSE SENSE.
THANK YOU.