At the Bipartisan Policy Center’s Housing Summit on Sept. 15 and 16, five former HUD secretaries joined a panel discussing their time at the Department of Housing and Urban Development. After the panel, Shelterforce editor Miriam Axel-Lute and publisher Harold Simon sat down for further conversation with two of them—Mel Martinez, who was HUD secretary under President Bush from 2001 to 2004 and went on to serve a partial term as a senator from Florida, and Henry Cisneros, a former mayor of San Antonio who was HUD secretary under President Clinton from 1993 to 1997. Martinez and Cisneros were two of the four co-chairs of the BPC’s Housing Commission.
Harold Simon: Senator, during the presentation [earlier in the day] you said that HUD has never been funded adequately, and Mayor, you said, quoting from the Bipartisan Policy Center’s report, that only “one in four people who qualify [for housing assistance] get it.” Why is that?
Senator Mel Martinez: Well, let me phrase that a little better. I think it’s not only having enough, but having it properly in the right places in the right ways. So in other words, we have become very accustomed to the Section 8 program, and for those who have no place to be, thank goodness it’s there. But, is a Section 8 program an example of government success? I don’t think so. I think we can do it much better. It’s about the funding level, but it’s also about the utilization of the funds in a way that really gets at the problem in a very direct and helpful way.
I think one of the things that I’ve heard Henry say in the past is that the multi-generational nature of some of what we do is a touchy problem once we put people out. But then also, when you have two or three generations of people living in public housing or in Section 8 housing, that’s part of a problem that really doesn’t allow for that population to refresh itself.
Now, there are obviously those who need supportive housing, and always will—the disabled and the elderly—but there’s a whole host of other people who might transition in and out of it, allowing more than that fourth [of those eligible for housing assistance] to be served. You have to do it in a compassionate way, but we have to reinvent some of what we’re doing so that the money might be better utilized. And even if you don’t have all you would want to have, which never is the case, you can serve more people more adequately with what you’ve got.
Mayor Henry Cisneros: My answer to your question would be that, over time, the programs take root and grow, but as the Senator said, not always in accordance with needs. We inherit legacies of programs that were started in a certain direction and morphed into another direction, and they’re not necessarily appropriate to the times.
The Commission did a major service in describing changes to focus on those in greatest need. For example, to create transition programs for people between 30 percent and 80 percent of AMI. It is also true that we probably don’t have enough resources, and the problem is getting more acute. The federal budget is getting tighter. The competition for funding is getting tighter. It’s difficult to have enough, but when we, for example, put as much money as we do into the home mortgage interest deduction, and then we don’t have enough for rental, then something is wrong there. I am very proud of this Commission, that it took on that subject. That’s a third-rail subject generally not discussed.
Miriam Axel-Lute: On the subject of adapting to the times, when you talk about transition, the other thing that’s going on is that wages are stagnating. Where are folks in the 30 percent to 80 percent AMI range going to transition to? They are severely housing cost-burdened as well. According to the Harvard Joint Center for Housing Studies’s State of the Nation’s Housing report, 40 percent of folks making over $30,000 a year are also cost-burdened in their housing, so it’s not just the very poor who are in need.
Henry Cisneros: We clearly have issues that are bigger than housing and they cannot be solved with housing. They have to do with the shrinking of the middle class. Part of it is, as you say, lower incomes and outsourced jobs, and a whole dynamic of larger economic questions. On the other hand, housing is an important part of the answer, because it’s kind of a chicken-or-egg problem. Without a good platform, not much else is possible. If you don’t have a decent, safe place to live, then where you do take the calls that invite you to a job interview? Where do you get the base to be able to train for your own skills, or education for your children?
So, while housing is not the sole answer, it’s a very big part of the answer to the bigger questions of how we create a society that not only has adequate income, but that begins to save some money and have some wealth. Housing has traditionally been the largest part of the average American family’s net worth, so to the degree that we end up with these massive gaps in homeownership between minority populations and others, we’re really denying access to the wealth-creating machinery of the country.
Simon: Both of you had to deal with conflicting needs at the local and state level. Schools. Roads. You want all of it. But with a lot of these things, if you look at the current cost compared to future savings, there’s a clear reason to invest. For example, by enabling people to get a good education today, you’ll have everything from more income to fewer people in prison in the future. How do you convince folks that the investment you’re making now is fiscally smart, and the right thing to do?
Mel Martinez: I think that’s an issue of leadership. It’s an issue of having a vision and a plan, and then having others believe in it to follow. It has to be about how do we tackle those local problems, from roads to schools to crime. Each community is different.
Which is why, by the way, I thought former Secretary Hills was so brilliant in her discussion about the devolution need. That doesn’t mean there’s not a role for the federal government, for HUD. But, we have to also get used to the idea that, increasingly, we have to look local for some of these things that put it all together.
When you have a mayor like a Mayor Cisneros in San Antonio, the city is not the same after his leadership than it was before. The problems were no different. The assets that the city may have had probably weren’t that different. But it took a mayor with a vision and the leadership skills to bring it all together and get that city working together to accomplish any number of things. And so, when you get the local community working better, when you get more economic growth, when you get better jobs and a redevelopment of certain areas like I know the mayor did, then all of a sudden you wake up one day and say, “Wow, this place is different. How did that happen?”
Henry Cisneros: Thanks, Mel. I have faith that most people understand that trade-off between things that we should be doing now in order to prepare [for] the future and not doing those things and paying the price in the future. I think, inherently, people get it.
I also have a faith that most people, as Mel says, are willing to be led if government articulates a vision, is transparent, and has a record that is essentially honest about how the money’s going to be expended. Leadership is a big part of it. I would cite as an example our present HUD secretary, who was mayor of San Antonio and passed, about three years ago, a quarter cent sales tax, asked the people to vote themselves a sales tax to start pre-K education.
Now, most cities don’t sponsor pre-K education. That belongs to the school groups or somebody else. But the mayor said, “This is essential to our future. We’ve got to get our children ready to learn when they start school.” And so, now we have these four massive campuses of preschoolers with municipal resources, a classic pay-now or pay-later trade-off.
Mel Martinez: But, the remarkable thing is that he had the leadership skills to get the city to vote [for] that.
Henry Cisneros: Well, he and others. He got Joe Robles, the head of USAA, and Charles Butt, the head of the largest grocery company, H-E-B, two business people who were trusted to run a commission that asked the question: “Of all the things we could do in education, which would make the biggest difference?”, and they concluded that it was pre-K.
So, you had business guys saying our judgment is it’s pre-K, and we think you should vote for this sales increase. And lo and behold, [they] did.
Simon: That’s an amazing thing, being able to convince people to hurt now so they don’t hurt quite as much later.
Henry Cisneros: People are willing to be led. That’s my point.
Simon: It takes visionary leadership and trust, but also a willingness to bring a lot of people to the table. That’s something you both reference, bringing different people to the table.
Henry Cisneros: I think it’s the essence of how you manage today in local government, or at any level of government. You have to bring different people of different views together. It’s the fundamental leadership skill.
I used to say that I would spend Saturday afternoons doing things that nobody else would ever know occurred, like meeting with a group to keep something bad from happening. If I were successful, and the bad thing didn’t happen, no one would know. But, if I was unsuccessful, we’d have a blow-up that would disrupt everything.
Simon: You kept the patient healthy.
Henry Cisneros: Exactly.
Mel Martinez: Yes, preventive medicine.
Axel-Lute: We’ve been hearing for decades that housing doesn’t have a natural constituency, or it does but it’s not visible.
Simon: But everybody does actually care about housing. The thing that it’s difficult to get people to care about is poor people, to not put too fine a point on it. And the Commission’s report talks about shift the attention of housing assistance to those with the worst needs. How do we move past this obstacle of not wanting to put attention on poor people?
Henry Cisneros: It’s a hard question. We have an inherent belief in the United States that Americans can do almost anything when they put their minds to it. And if the crisis is serious enough, we will act. We have a lot of things sneak up on us, and then we say, “but we have the capability to act.”
And some of these things that we’re facing for the future have that aspect to them. We do have to do something about housing for an aging population, and we really do have to do something about rentals to create the platform for people with lower income to get their start. I operate from the belief that we’ve just got to keep hammering.
Mel Martinez: I also think that there’s an inherent goodness in people. American people are good people. I mean, I’m an example of the goodness of others, in many ways, in my own life. Oftentimes what is missing is a credible plan of action. I think people get jaded sometimes. If you tell people, “There are homeless people in your community and that’s not right,” [do you then say,] “Well, let’s invent some government program,” or do you say, “How do we solve this problem? How can we come together as a community to deal with this issue?”
If you want a problem that has no constituency, it’s homelessness. You have to say, OK, it’s not about the constituency. It’s not about the next election. We want to do something that’s going to make a difference and make our community better.
Poverty is too big an issue. No one can grapple with that all in one bite, but if you deal with affordability of housing, if you deal with joblessness, income inequality, how do we tackle any one or all of these? What is your solution? How do we fix it? Say an increase in minimum wage. Well, maybe that’s part of the solution. Is that going to solve it? No, but then how do we get to a better solution that is more comprehensive? It’s a whole host of issues that are embroiled together.
I’ll tell you what heartens me is when you look around the world and there are places that were incredibly poor a decade ago—in Latin America, there’s a half a dozen countries there—and somehow, the indices of poverty are now, half or a third what they used to be. How’d they do it? Well, jobs and trade and all kinds of things. There are answers.
Now, we [in the United States] have a much better situation. The transformation that has taken place in those places on a percentage basis is much easier to achieve because they had such a long ways to go. For us, it’s harder, but no less solvable. It’s not all about what government does; it’s also about what the private sector does, how the two work together.
When Henry was mayor and when I was mayor [of Florida’s Orange County], [we had] to have a partnership between government, not-for-profit, and the private sector. The three have to work hand-in-glove, and that’s something the federal government doesn’t do.
Federal government sends money, [and] tells you how to spend it, because they know best. But, when you look at a problem on a local level, it’s always going to be that partnership.
Simon: All of these things that you’re describing, everything in the Center’s report, requires political will. So, you said, “keep hammering.” What are the next couple things that we need to do? What are the hammers that we need to use next?
Henry Cisneros: Well, you’ve got to break down the report into its component pieces. We know there’s a strategy for GSE reform, and actually it’s working. Senator Crapo was most impressive, I thought, in laying out his strategy. We’re going to see what these elections bring, but there’s a way to get there.
Now, can it break down? Of course it can. There are people who don’t want Fannie Mae to change. There are private entities that are suing from a private interest standpoint. There’s many an obstacle, but I think the country generally moves in the right direction on these questions.
Tax reform, we talked about what kind of changes have to happen in the housing environment through tax reform, low income housing tax credits, rebalancing with rental. We started the conversation. It may take a while to get traction, but in due course, it will. We’ll have to work it.
It’s persistence, it’s messaging, and it’s creating coalitions. That’s the way you do things today.
Simon: My son’s almost 40 years old, and when he was five and he started school, I went to the school board, and there were ashtrays everywhere. There was gray smoke in the air. And now, in New York, the only place you can smoke seems to be New Jersey.
Mel Martinez: Right. Yes, such a changed world.
Simon: So, that is a huge attitude shift. It wasn’t just regulation. It was a huge attitude shift on the part of society.
Henry Cisneros: Absolutely. I saw the other day a listing of places where attitudes have changed and actions have changed. Drunk driving, a big change, seat belts, smoking, gay marriage. . . So, these shifts are possible. And while social media and technology have negative effects, they also have positive effects once the information gets to people.
Axel-Lute: On the subject of attitude, Senator, you said people need to believe in your solution in order to come along. And that made me think that one of the big tensions in this country is whether we believe that government is effective, especially the federal government. Is that part of what we need to address?
Mel Martinez: I don’t think there’s any question. The credibility of the messenger is always very important to whatever the message is, and if it’s the federal government here to help you, people will run the other way.
Henry Cisneros: The federal government is the least respected of the levels of government, by far. And then [there is] transparency. People need to see what’s being decided.
Mel Martinez: And leadership that can be believed. I think we have a tragic problem, that we seem to destroy our presidents.
Henry Cisneros: We wear them out, for sure.
Mel Martinez: And so, when and how do we stop that? I mean, I didn’t vote for Barack Obama. I was a John McCain guy. But I thought, after his election, we had a moment where we had come together as a country. It all fell apart. And I hope we get another moment like that, because we need it. We desperately need it.
Simon: We’ve had almost 40 years of the message, “Government can’t work, government is too big.”
Mel Martinez: Government gives you a little evidence of it every now and then.
Simon: No, I mean the effort has to be to counter that.
Mel Martinez: But it’s not about what people are saying. It’s about a healthcare website. It’s about the VA. These things penetrate much deeper than some ranting fool on talk radio, quite honestly. Government is inherently somewhat incompetent, because it’s not intended to be like business. It’s got to have a more compassionate heart, and it gets into things that business would never get into. It’s not profitable.
Simon: So, the next step. You’ve had meetings. You’ve got the report. What is the next step for the Bipartisan Policy Center’s housing commission?
Henry Cisneros: Well, we’re going to continue to have a presence at the BPC. The BPC is a wonderful invention. If it hadn’t been created, it would have to be created. They’re going to keep the mechanisms alive and the coalition-building going.
One of the by-products of this commission, which I had not seen in a long time, is the housing community in Washington coming together. We’ve identified who they are and brought them together.
Simon: That doesn’t happen very often.
Henry Cisneros: An important contribution in and of itself.