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Congressman Elijah
E. Cummings |
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Congressman Elijah
E. Cummings |
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November 3, 2003
Remarks to the Fannie Mae Housing Impact Advisory Committee Dinner
Washington, D.C
WELCOME
Thank you, Chairman [Franklin] Raines, for your kind words of introduction -- and for all that you, your staff and all of the good people at Fannie Mae are doing for the people of my home town of Baltimore, Maryland's Seventh Congressional District and our nation.
Good evening, ladies and gentlemen.
I was very pleased when Frank Raines and Bob Maloney invited me to join you this evening.
Over the years, Frank and I have developed a close relationship - both personally and because of all that he is working to accomplish for the people I represent.
Home Ownership: A CBC Priority
I also want you to know that we in the Congressional Black Caucus are committed to working closely with Fannie Mae toward our shared goal of assuring affordable and safe housing for every American family.
Collectively, we serve 26 million Americans in the Congress of the United States whose lives and well-being are heavily impacted by what Fannie Mae is doing to make housing more affordable.
Affordable housing and expanded home ownership are top priorities for the CBC.
Within the Congressional Black Caucus, we have developed some key leaders in the formulation of national housing policy - Representatives William Lacey Clay, William Jefferson, Stephanie Tubbs Jones, Maxine Waters and Barbara Lee immediately come to mind.
Representative Chakka Fattah has been an especially vigorous advocate for the Hope VI, public housing revitalization program that has played such a major role in my home town of Baltimore - and Harold Ford and Artur Davis are making increasingly important contributions.
Within the CBC, we have a strong and - I believe - quite understandable commitment to the housing aspirations of Americans of color.
Because of substantial commitments by Fannie Mae and other private sector players, home ownership among African Americans is on the rise.
But, sadly, it remains the case that fewer than one-half of America's Black and Latino families are home owners while nearly three-quarters of all Caucasians have achieved this fundamental American goal.
Just last month (October 2003), ACORN (The Association of Community
Organizations for Reform
Now) released a report entitled, "The Great Divide: Home Purchase Mortgage
Lending - Nationally and in 115 Metropolitan Areas."
The ACORN report confirmed that:
These are economic, social and legal realities that we must address, ladies and gentlemen.
They demonstrate the critical importance of Fannie Mae's commitment to fair lending and minority home ownership.
Nevertheless, I should also recall for you that the 39 Members of the CBC represent more than 26 million Americans of every ethnic heritage that makes up this great nation. And housing issues are fundamental concerns for ALL of our constituents - especially those who live in urban areas.
Friends, in a little while, I'll have more to say about Fannie Mae and the importance of your work.
But first, I want to tell you how much respect I have for all that each of you are doing to advance the movement for affordable housing in your own communities.
What you are doing is very, very important - and each of you is very important to me and the people whom I represent.
Home Ownership: A Personal Reflection
To illustrate what I am saying, allow me to take a few moments to share with you a personal reflection from my childhood.
I will never forget the day, more than 40 years ago, when my family stopped renting and bought the Cummings family home - the home in which my mother lives to this day.
My parents began their married life together as share croppers in Manning, South Carolina. They moved to Baltimore to build a better life for their children.
During my earliest years, Dad was working as a laborer.
We were living in a rented four room house - 2 adults and five children.
We had one bathroom.
That bathroom was so damp that, whenever it rained, we almost thought we were outside.
And the mornings when all of us had to use that same bathroom were a nightmare.
That rented house in South Baltimore was so small that we could not have friends visit because we had nowhere for them to sleep.
We children often had to go to the local library to do our homework because the house was just too small.
It required a long and difficult struggle, but my parents were able to pay
our rent, stay out of debt and save for the down payment on our family home.
I will never forget the day that my parents told us that they had saved enough
money for the down payment, and we were going to move into our own home.
I was about 10 years old at the time, but we children were so excited that I can remember the name of the seller (Mr. Bracken) and the real estate agent (Mr. Bevard) to this day.
There was so much excitement concerning the purchase of the house that all of us children secretly saved up all our money from doing chores in the community and purchased household gifts for the new house. My next door neighbor, Ms Westbrooks, allowed us to hide the trash cans, curtains, soap dishes, and towels in her home.
On Christmas day, we surprised our parents with the gifts. They were shocked that we had bought over $500 in gifts.
Ladies and gentlemen, moving into our own home was one of the best things that could have happened to us.
That move to our own home gave my sisters, brothers and me a true sense of ownership, permanence and accomplishment.
I will never forget the first day that we moved into our house, I thought that I was in heaven.
We suddenly had 2 baths and 4 bedrooms.
(When you grow up in a family with sisters, you remember things like that quite clearly)
We also had a club basement where we could have friends over.
We had our own front yard and back yard.
For the first time in my life, I could feel the grass growing under my feet. For the first time, I could play in a yard that we owned.
And my father could do his gardening.
Dad worked so hard, and gardening was his only hobby.
He was excellent at it, and took such pride in his front yard that we thought it was the prettiest yard in the block.
Since his death, my family and our neighbors on Lyndhurst Street have continued to plant flowers there every spring, just the way Dad would have done it.
Ladies and gentlemen, moving into our own home changed my life - and my brothers and sisters' lives as well.
We moved to a better area of the city with better schools.
By moving to Edmondson Village when we did, I had the opportunity to attend an integrated middle school for the first time.
And every child of Robert and Ruth Cummings, once South Carolina share croppers, has been able to succeed in life.
Thank You for Uplifting Lives
That is why, ladies and gentlemen, I want to thank all of you - personally, as well as on behalf of the Congressional Black Caucus.
I want to thank you for your work in your own communities back home to give families like mine their own homes. Trust me on this - you are lifting up the lives of children who will remember the day they moved into their first true home until the day that they die.
And I want to thank you for your work here on Fannie Mae's Housing Impact Advisory Committee. By this service, you have demonstrated your leadership in a very important national movement to give every American a tangible sense of ownership in this great nation.
You are advancing a fundamental principle that we share: the security and well-being that come from having a safe, affordable place in which to live and raise our families is a fundamental human right.
And you, my friends, are in the forefront of advancing this cause.
Our Focus This Evening
As I mentioned a few moments ago, I want to touch upon the important role that Frank Raines and Fannie Mae are playing in our movement to assure affordable housing for every American family.
Then, I will turn to the bigger picture - a national picture of home ownership that I must say is quite mixed.
We are experiencing record levels of home ownership.
Yet, we must have a serious national conversation about what has to be
considered a "crisis" in affordable housing.
I. THE IMPORTANCE OF FANNIE MAE
It is not difficult to understand why Frank Raines and Fannie Mae have developed so much support within the Congressional Black Caucus.
Fannie Mae's "American Dream Commitment" is proving to be a tremendous help to the Americans we in the CBC represent - many of them Americans who traditionally have not been well-served by the mortgage industry.
We commend Fannie Mae for its commitment to invest $2 trillion in our communities by the year 2010.
We strongly support Fannie Mae's efforts to tear down barriers, lower costs, and serve 18 million families who are being underserved or overcharged by the mainstream and sub-prime housing finance industries.
Allow me to shine a spotlight on what these initiatives mean to the people of the Baltimore region.
In preparation for this talk, my staff asked Bob Maloney of Fannie Mae to provide us with a quick summary of Fannie Mae's lending within Maryland's 7th Congressional District.
Here is what we learned.
I can not overstate how important that involvement in the economic life of our community has been.
Now, let me place Fannie Mae's role in our community in a Washington context.
I have been informed that the Congressional Budget Office recently testified in a Senate hearing that the role of "government sponsored enterprises" like Fannie Mae in reducing mortgage costs by 25 basis points (one-quarter of one percent) has had little impact.
In light of the impact of that quarter-percent reduction, I honestly do not understand how the CBO could reach the opinion that it did.
That's 185,000 additional American home owners, my friends, just because of that 25 basis point reduction.
How can that be considered "little impact?"
Well, my Maryland colleague, Senator Paul Sarbanes, ranking Democrat on the Senate Banking Committee, and I think that this is a big deal.
And that is another reason why we are so committed in working with Fannie Mae.
I also must commend Fannie Mae for the organization's $1 million contribution to the Congressional Black Caucus Foundation's WOW campaign - and its active participation.
I serve on the board of the CBCF. Our Foundation has been working with Fannie Mae and a broad coalition of other business, financial and community leaders to overcome the racial and ethnic barriers to home ownership that continue to plague this nation.
More Americans build their family's wealth through owning their homes than through the stock market.
So, we have called our campaign "With Ownership, Wealth."
Our goal is to create one million new Black home owners by 2005 - and we are making progress toward that objective.
Fannie Mae has been a good partner in our efforts to expand home ownership - and we appreciate that commitment.
Fannie Mae is working to address these challenges - with mortgage products that allow many more Americans to become qualified.
And through CBC "home ownership fairs," we are working together to reach out to potential homeowners with the information and counseling that will allow them to better understand the home ownership process, get their credit records in shape and qualify for the home purchase loan that they so desperately need.
This outreach, by Fannie Mae and other companies like HomeFree USA is very important.
For example, since HomeFree USA began counseling women and minorities in 1995, the company has educated over 20,000 families. Since 1998, it has helped 1,500 families purchase homes - and the company has informed me that it has a 0% foreclosure rate among its participants.
II. AMERICA'S AFFORDABLE HOUSING CRISIS
Fannie Mae is doing its part - although we all know that we must stay the course. When we turn to the bigger, national picture, we must be candid about the forces that are having a harsh impact upon our shared goal of expanding affordable housing in America.
Ladies and gentlemen, this evening, I must recall for you three sobering facts about our struggle for affordable housing in America.
Homelessness on the Rise
First - as a nation, we have yet to overcome the challenge of ending homelessness.
And in many communities, that tragedy is becoming even more alarming.
Last December 18, the National Conference of Mayors announced the results of a multi-city survey.
The Mayors confirmed what all of us gathered together this evening already knew about the harsh realities of life for too many Americans:
These are alarming statistics, my friends.
Yet, we must never forget that we are talking about a human tragedy here - a tragedy of staggering proportions.
These are human beings - men, women and children who are our neighbors.
In a very real sense, a person without a home in America has become a person without a community - a person without a country.
The challenge is clear.
As the Chairman of the National Conference of Mayors, Boston Mayor Thomas Menino declared:
"The world's richest and most powerful nation must find a way to meet the basic needs of all its residents. To address hunger and homelessness, we must all work together to confront our national affordable housing crisis and turn around our sluggish economy."
Home Ownership Beyond Reach for Tens of Millions of America's Working Families
The second important fact that I must recall for you this evening is this.
Despite record levels of home ownership overall, tens of millions of hard working Americans are finding their goal of home ownership beyond their reach.
There are many reasons: corporate down-sizing; the huge loss of well-paying American manufacturing jobs; increased valuation of our existing housing stock fueled by low interest rates and the overall housing scarcity; and what - euphemistically - has been called the Bush Administration's "jobless recovery."
As all of us here this evening are aware, these economic forces - and others - have conspired to shut the door on home ownership for too many of our neighbors.
A few moments ago, I shared with you just how important it was to me when my family was able to purchase our own home during my childhood.
I want every child in America to have this same, uplifting sense of permanence and ownership.
It required a long and difficult struggle, but my parents were able to pay our rent, stay out of debt and save for the down payment on our family home.
And that move to our own home gave my sisters, brothers and me a true sense of ownership, permanence and accomplishment.
Today, however, Americans who are in the same economic position as we were so many years ago are finding it even more difficult than we did to save the down payment that they need.
The cost of renting a place for their family to live takes everything that they can afford - and more.
Being able to pay rent that is affordable is a big step toward being able to become a home owner.
The United States Conference of Mayors was justified in calling the housing situation that too many Americans face today "a national housing crisis." The Mayor's Report that I mentioned confirms that - in too many American communities:
And when rent is taking everything that you earn, it's very, very difficult to save the money you need to make a down payment on your own home.
In a national survey released by the Fannie Mae Foundation last year, nearly one-half of all working families reported that it is very difficult to purchase safe and affordable homes near their jobs and their children's schools.
The challenges involved in purchasing a home can be daunting -- even for middle class families.
Too many of our teachers, firefighters, police officers and nurses can't afford to own homes where they work.
Ladies and gentlemen - there is something terribly wrong with this picture.
The Increasing Number of Home Owners & Renters with "Severe Affordability" Problems
Let's take a closer look.
As you know, with mortgage rates at 40-year lows, housing prices have increased sharply in many areas.
That can present major problems for low and moderate income households who rent or want to buy their first home.
Harvard's Joint Center For Housing Studies recently issued its 2003 report: The State of the Nation's Housing.
The Harvard Center found that:
The Challenge of Sustaining Home Ownership
That brings me to a third reality that we must face as a nation.
While there has been a surge in lower-income homeowners over the past 5 years, more American home owners are having trouble paying their mortgage.
III. SYNCHRONIZING OUR CONDUCT WITH OUR CONSCIENCE
These are just some of the reasons that the Harvard Housing Center report concluded that "Progress in tackling the nation's housing challenges has stalled."
During these difficult times, we face a wide range of very serious housing problems. Our response will define our national character for generations yet to come.
I believe that the Bush Administration's Housing policy - for all their good intentions - must be viewed in the context of the crisis in affordable housing that I have outlined for you this evening.
Earlier this year, when the Bush Administration released its proposed $2.2 trillion federal budget for Fiscal Year 2004, this nation's Mayors had this to say about the $31.3 billion HUD portion of the President's plan:
"The nation's affordable housing crisis demands federal action. So we applaud the President for proposing a home ownership tax credit, level funding for Community Development Block Grants, and a slight increase in funding for HOME, which expands the supply of affordable housing."
"However, we are disappointed that his budget recommends the elimination of HOPE VI, which has proven to be a highly effective tool for revitalizing public housing, and inadequate funding for our public housing authorities, whose budgets were already cut 10 percent this year."
Well, the Administration's proposal to block grant Section 8 funding is no longer part of either the Senate or House budget plans.
And, up to this point in the HUD budgetary process, we have been able to delay the elimination of HOPE VI - although not much additional federal funding will be added this year to the dollars already in the pipeline
I have a great deal of respect for HUD Secretary Mel Martinez - I believe that he is fighting for the same goals as are we.
I voted for the HUD / VA appropriations bill - it was the best that we could expect to accomplish with this Administration during these difficult times.
There are some good ideas - like federal down payment assistance - that are moving through the Congress.
However, when viewed in the context of the overall crisis that we face in providing affordable housing, we must ask the President and his Republican allies a very important question:
Does the Bush Administration budget synchronize our conduct with our national conscience - and with this nation's long-term self-interest?
If we are to move beyond what that Harvard study called the "stalled progress" in national housing policy, we must begin to think outside the box.
For example, we should be moving forward to create a national affordable housing trust fund.
As most of you are aware, more than 270 housing trust funds have been established by cities, counties, and states - now spending more than $500 million a year for affordable housing.
I believe that we must work toward establishing a national affordable housing trust fund to provide a reliable and dedicated stream of funding to address the housing needs of Americans with very low incomes.
We must rebuild the foundation of our national housing policy by focusing more attention on those Americans with the greatest need.
That is why I have joined Congressman Bernard Sanders of Vermont as an original co-sponsor of the proposed National Affordable Housing Trust Fund Act (H.R.1102).
We believe that the federal government should provide the direct assistance that will allow more low-income families to become home owners - while also building more rental housing for those Americans with the greatest economic need.
Our proposal would use revenues generated by Federal housing programs to assist in the construction, rehabilitation or preservation of an additional 1.5 million affordable homes by the year 2010.
I must report to you, however, that the House Republican leadership has not yet permitted the legislation to move out of committee for a vote by the full House - despite the fact that our bill has gained 207 co-sponsors.
This obstruction is just another example of why Congressional Hispanic Caucus Chairman Ciro Rodriguez and I have repeatedly voiced our shared concerns about the overall course of the Bush Administration's policies as they affect poor and working class Americans.
We cannot view this nation's current housing policies in the abstract.
We must be candid and forthright about the devastating impact of the Administration's taxation and expenditure policies that - viewed as a whole - threaten to shut the door on the American Dream . . . with America's poor and working families locked outside.
When Ciro Rodriguez and I challenge the Bush Administration's attempt to gut the federal "safety net" and its tax giveaways to the rich, we are accused by some of engaging in "class warfare."
Well, friends, I must say to you this evening: If there is any class warfare being pursued in Washington, it is the economic warfare that is now being waged against America's working poor.
Housing issues are at the center of a far larger struggle about the future of this great nation, ladies and gentlemen.
And our future as an economically prosperous, humane and unified society is at stake.
CLOSING
Friends, personally and on behalf of the Congressional Black Caucus, I applaud each of you for all that you are doing to uplift the lives of our neighbors throughout America.
Every American family deserves the opportunity to become a home owner.
And we commend you for doing your part to realize that dream.
So - to my friend, Frank Raines, and all of you, I close with the most eloquent words in our language:
Thank you.
