Subcommittee on Housing and Transportation

Hearing on "Affordable Housing Production and Working Families, Part III."

Mr. Chairman and members of the committee: Thank you for inviting me to speak about the shortage of workforce housing that too many American families face today. As Mayor of Boston and President of the U.S. Conference of Mayors, this issue at the top of my agenda because strong cities must meet the diverse needs of their housing markets.

And Senator, despite our best efforts at the local level, we can't do it alone. We need a real group of partners and Washington must be a better partner. We need our national leadership to:

• expand the supply of housing for working families, seniors and the needy;
• make homeownership a more attainable goal, particularly in communities of color, and;
• preserve the stock of reasonably priced housing we have now -- from public housing to assisted units.

Despite, or maybe because of the strength of the housing economy across our country, working families and people of all ages, at different income levels, are struggling to keep a roof over their heads.

So the time has come to give this national issue the real attention it deserves.

This evening, Mayors from across the country will be arriving in Washington for our first "Lobby Day". And one issue that will be at the top of everyone's agenda is the need for more housing.

Too many families are falling through the cracks. According to the National Low Income Housing Coalition study, "Out of Reach", for the fourth year in a row, there is no jurisdiction in the U.S. where a minimum wage job provides enough income for a household to afford a two-bedroom apartment.

From state to state and city to city - the story is the same. The situation in Boston is indicative of the situation in many communities throughout the country. In Boston, the average 2-bedroom apartment costs $1,600 a month. To afford that, you need to earn at least $64,000 per year. If you are working a job that pays the Federal minimum wage, that means you have to work 72 hours per week -and use 100 percent of your earnings to pay the rent.

And for many families, public assistance is no assistance. In Boston, a family of four has to earn under $28,250 to qualify for public housing - and under $33,900 to be eligible for the HOME program and Low Income Housing Tax Credits.

But what about people - such as teachers, secretaries, police officers, restaurant workers, and countless others - who earn too much to qualify for public assistance, but not enough to afford an average market rate apartment?

It's no wonder that over the past decade, homelessness has more than doubled. And more than 80 percent of the people in our shelters are working mothers and children. Meanwhile, the average wait for people with emergency housing needs is 21 months. The Boston Housing Authority has over 15,000 families on its waiting list for public housing.

Mr. Chairman, we are doing our part in Boston. We have permitted more than 5,000 new units in the last two years and I have dedicated $30 million in city funds for housing creation. But the problem simply goes far beyond any one city's ability to address it.

We need a national housing agenda and we need it now. Delay carries a high price - cities like Boston risk becoming a place where only the very rich and the very poor can afford to live.

I should add that the housing crisis is not just a problem on the two coasts, as many believe. Studies have shown housing costs rising dramatically in states such as Minnesota and Colorado. And I recently received an invitation to speak in North Carolina on this issue, so the problem is clearly expanding beyond what we think of as the high cost communities.

So the time is right to invest in housing. After all, it is also the perfect medicine for a sluggish economy. Remember, when you add up all the building costs, people buying appliances, and furniture, housing counts for 1/5 of our Gross Domestic Product. It puts people to work, builds stronger communities and strengthens families.

How much housing do we need? The National Housing Coalition predicts that by 2010, we will need an additional 11 million housing units.

To make housing available to everyone, we have to reverse some troubling trends:

• Between 1997 and 1999, we lost more than 200,000 affordable units. In the absence of any new production, we have to preserve all assisted units.
• Homeownership is at 67.9 percent. But for African-Americans and Latino families, it is only 45 percent. We need to close the racial gap.
• The number of 25 to 34 year olds living with their parents has reached record numbers. We need to give young people a chance to jump-start their lives.
• Funding for assisted housing for seniors remains flat, despite the fact that they are the largest growing segment of our population. We need to provide for our senior citizens, not squeeze them out of their homes.

To move forward, we must create a national strategy - that is why in May, I convened the Conference of Mayors National Housing Summit. We met for two days with some of the best minds in the housing business and we reached out to new partners including labor, seniors, and leaders in the public health and business communities. We concluded that this new strategy should include:

• Establishing a strong housing production program, such as a National Affordable Housing Trust Fund-based on the 200 funds established in communities across the country, including Boston-to provide a steady revenue stream to assist low-income workers. Last week, Mayor Hahn of Los Angeles hosted the leadership of the mayors at a briefing on his housing $100 million housing trust fund. I applaud the efforts of Senators Kerry, Bond and Edwards, who along with Representative Sanders and others, have filed strong proposals for housing production. But it is important to cities and to the U.S. Conference of Mayors that any housing trust fund proposal be funded with new money and that it provide cities with direct access to funds. Let's cut out the overhead and the middlemen.
• At the same time, we need to provide incentives to builders. One way to do that is to provide a tax credit for the development of homeownership housing as the President has proposed. Any housing package must be a bipartisan package and the Administration has put forward a good idea for adoption.
• And we should work to expand employer-assisted housing programs for working families. In Boston, companies like Citizens Bank, which Chairman Reed knows well, are starting these programs. We should look at new incentives to expand these efforts.

Senator, for the record, I want to submit a copy of our comprehensive National Housing Policy as approved by the mayors at our Annual Meeting this spring. It is our hope that this document will add to the long needed debate on how we provide every American with safe, decent and affordable housing.

It's time to go beyond the tired housing policies of the past. Back then our policy was to throw up 30 story buildings that were neighborhood eyesores. Well, times have changed, and most of those buildings are being demolished.

Many cities, including Boston, know that the best way to build housing is to create mixed-use developments and design the buildings so that they compliment and strengthen the neighborhood.

In the last few months, Democratic and Republican mayors have worked with the leaders in Washington to pass the education bill and we reached an agreement to secure critical resources for Homeland Security. We can - and should - use this spirit of bi-partisanship to create more homes and apartments that working families, seniors, low-income workers, and the disabled can afford.

Housing isn't a luxury; it's a fundamental right. This issue deserves national attention. Mayors and our coalition partners stand ready to work with you to help more American families attain this right.

Mr. Chairman, thank you for your continued leadership on these issues.

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