Thank you, Mr. Chairman. I commend you for holding this hearing today. I know that we all agree that every American should have access to the tools they need to become homeowners. Homeownership allows families to build equity that will help them build the financial security critical to sending their children to college and achieving a sound retirement.
As you know, homeownership rates in the United States are at an all time high of 68 percent. Despite the significant growth in minority homeownership rates in the 1990s - much of which can be attributed to public-private incentives - the dream of homeownership remains out of reach for too many minorities. In addition to rising housing prices that have quickly outpaced inflation, a lack of wealth and income, discrimination, and a general lack of affordable units contributes to this gap.
It is that last point, Mr. Chairman that I would like to emphasize. We are facing an enormous affordable housing crisis in this country. This crisis is at the root of so many of the issues this Committee has held hearings on. It causes homelessness; it forces families to spend more than 30 percent of their income on housing; and it decreases access to homeownership. We must do more to address this issue.
Mr. Chairman, we cannot expand access to the American homeownership dream, as it were, unless we take critical steps to increase the number of affordable housing units in this country. Earmarking $200 million of the HOME program to provide downpayment assistance to families wanting to buy a home will only go so far when there is no affordable home to buy. As we all know, states can already use their HOME dollars to provide downpayment assistance and many do. However, many states, including New Jersey, also use their HOME funds to assist renters who are unable to afford rental housing and to construct affordable housing units. Certainly, expanding existing downpayment assistance programs is a worthy goal that I support; however, we must not do so at the expense of other critical housing programs.
Mr. Secretary, I have to admit that I'm a little confused about the Administration's priorities. If the President truly wants to expand homeownership, then why has he proposed eliminating the HOPE VI program, a program that has significantly expanded homeownership for low and moderate-income families? In addition to revitalizing our urban communities and improving our nation's public housing, the HOPE VI program has funded the creation of more than 21,000 units of homeownership. At least 3,000 of these units have been sold to families that previously lived in public housing. Mr. Secretary, isn't this the kind of program we should be expanding, not eliminating?
Furthermore, the Administration's proposed cuts to our other vital public and assisted housing programs, including Section 8, will only serve to push those families we want to help achieve self-sufficiency and, hopefully, homeownership further into poverty. Cutting the Public Housing Capital Fund will only serve to deteriorate existing properties, and will likely lead to decreased property values and crime increases. Of course, this Administration has already eliminated the Public Housing Drug Elimination Program (PHDEP), which public housing administrators relied upon to address these problems.
Mr. Chairman and Mr. Secretary, all of these issues are interconnected. While expanding downpayment assistance programs is a laudable goal, we must do more and we have to start by protecting our existing safety-net and homeownership programs, not destroying them.
Thank you.