By Eugene T. Lowe
July 12, 2004

During the 72nd Annual Luncheon of the Conference of Mayors June 26, Housing and Urban Development (HUD) Secretary Alphonso Jackson centered his remarks around several major policy concerns that are now confronting his department, including the recently proposed goals for the Government Sponsored Enterprises (GSEs) — Fannie Mae and Freddie Mac — the funding of the Section 8 program, regulatory barriers to affordable housing, and the administration's goal to increase minority homeownership.

Jackson praised the accomplishments of President George Bush in meeting the challenges of a recession, a terrorist attack, and the global war against terrorism, and achieving present economic growth which, he said , is the most vigorous since the days of President Ronald Reagan. Jackson also said the mayors were doing an outstanding job and that the administration was proud of the partnership with mayors. That partnership is most clearly seen in such programs as the Community Development Block Grant (CDBG) program, Section 8 and homeownership.

Jackson told the mayors that he understood the affordable housing challenge that the nation faces. In large part, his knowledge and concern for the challenge comes from his experience in serving as the CEO of three major housing authorities and as head of two community development agencies in major cities. President Bush also is committed to the challenge and is demonstrating this through strong support for homeownership. He reminded the mayors that President Bush has made it a goal to have 5.5 million new homeowners by 2010.

Commenting on Government Sponsored Enterprise ( GSE) , the Secretary said that Fannie Mae and Freddie Mac should lead the market in providing opportunities for homeownership in underserved communities, especially low-income and minority. But he said, banks and private financial institutions have been doing a better job. The Secretary stated firmly that "the mission of the GSEs is to support affordable housing, and we expect them to follow their charters."

Jackson said that HUD was making an effort to provide affordable housing through the elimination of regulatory barriers which drive up the cost of housing. Such a program would make it possible for teachers, firefighters, police, nurses, returning veterans and others to obtain affordable housing. The Secretary said that HUD is also removing regulatory barriers from its programs.

With regard to Section 8, Jackson said that he and the administration supports the program. But he said, Section 8 accounts for half of HUD's budget. He added that the administration must "strengthened rental assistance and preserve other important programs. The Secretary said that five years ago, Section 8 was only 36 percent of the HUD budget. But it increased 30 percent in the last three years. "This", he said, "cannot be sustained." If it is not fixed, he said, "funds will have to be siphoned off from such programs as HOME, CDBG, and HOPWA. To fix the Section 8 program, the Secretary said that he has proposed the "flexible voucher program." The flexible voucher program would be budget based where public housing authorities would have a specific budget on which they would have to operate their programs. If mayors and other have problems with the Section 8 program, the Secretary said, they should know that "Congress needs to allocate more money to HUD."

In closing his remarks, Jackson told the mayors that "we are sensitive to the needs you are confronted with. We will make sure you have the tools. And we ask that you work with us."