Prepared Testimony of the Honorable Mel Martinez
Secretary-Designate
U.S. Department of Housing and Urban Development

10:00 a.m., Wednesday, January 17, 2001


Mr. Chairman, Senator Gramm, and distinguished Members of the Committee, thank you for the opportunity to appear before you today. And thank you Senators Graham and Nelson, for your kind introductions.

Let me begin by expressing my profound gratitude to President-Elect Bush for his friendship and his confidence in asking me to be a part of his Administration. I am humbled and honored to be nominated by President-Elect Bush as Secretary of Housing and Urban Development.

With your indulgence, Mr. Chairman, I would like to introduce my wife Kitty and our three children, Lauren, John, and Andrew. It is with their love and support that, if confirmed, I will find the strength to undertake this important responsibility.

Mr. Chairman, I come before this Committee with a strong set of beliefs that were shaped by my life of living the American dream. I arrived in this country as a teenage refugee from Cuba with nothing but faith in God and myself, and the conviction that America, like nowhere else in the world, was a place where hard work and a life of principle would be rewarded.

I spent my first days in America in a government refugee camp, and I have seen and experienced hardship firsthand. But I also know how desperately those living in hardship just want the chance, the opportunity, to build a better life. And I know the compassion and charity of the American people ?people like Walter and Eileen Young and June and the late Jim Berkmeyer, who volunteered through their churches to provide places for me to call home for four years until my family was reunited here in freedom.

Throughout my life, I have witnessed the greatness of America, and the genuine goodness of the American people.

In my public life, I strive for inclusion and the elevation of ideals over politics. As a new member of the Orlando Housing Authority, I pushed for the rights of public housing tenants to be part of Authority board meetings, more than a decade before the implementation of a similar Federal requirement. As Authority Chairman, I pushed for five long years for the construction of new affordable housing facilities financed by Authority investments for elderly and single mother low-income households.

For the last two years, I have been the elected chief executive of Orange County, Florida, one of the fastest growing large metropolitan areas in the country. As chairman, I was confronted with overcrowded schools, crime and drug abuse, a growing senior citizen population, traffic congestion, mass transit challenges, and the need to make additional commitments to preserving environmental lands. And what we pledged we would do, we were able to accomplish, even in the short two years that I served. Sometimes it wasn抰 the most politically expedient thing to do, sometimes the vested special interests did not like what we did, but in the end, for our community, it was the right thing to do.

From each position, I bring an important perspective as a consumer of HUD programs, both in public housing administration as well as dealing with community development and housing block grant programs at the local level.

So I take this next step in my life with the experience of managing a county government staff of over 6,000, and representing 860,000 of my fellow Floridians, but most importantly, with what I hope is a strength of character defined by my past and demonstrated by my deeds.

With the Senate抯 approval, I will take up housing and community development challenges in America. Over the last few weeks I have met with many Members of this Committee, and I look forward to meeting with many more of you in the weeks to come. I have also met with the United States Comptroller General, and spent several hours with him and his staff discussing the issues surrounding the Department of Housing and Urban Development. I have been nominated to lead an agency that has been chronically designated as high risk. And while there have been some areas of improvement, during my stewardship of this office, significant program areas of high risk remain to be addressed.

My first priority will be for HUD to continue to put its own house in order, so we have the institutional fortitude to provide the housing and community renewal opportunities needed by so many families and so many neighborhoods. The Department of Housing and Urban Development must be healthy itself, if we are to deal with the challenges before us. And while former HUD Secretaries Kemp, Cisneros, and Cuomo have built a foundation for strength, there are a great many areas of institutional weakness that must be addressed. GAO and the HUD Office of Inspector General have identified similar program and management areas needing the most improvement, including: the Federal Housing Administration抯 single family mortgage insurance risk; the impact and continuing evolution of HUD抯 2020 management reform effort; and the failure to integrate financial and information systems.

With Senate confirmation, I will make addressing each of these issues a high priority as Secretary of Housing and Urban Development.

But HUD抯 management challenges do not mean that we will shrink from the housing and community renewal challenges integral to HUD抯 core mission. Part of putting compassionate conservativism into action means using resources efficiently, so there is the means to treat with compassion those in need.

There are a great many families and communities in need of opportunity. HUD has found that the number of Americans with worst case housing needs is growing. And at the same time, HUD抯 inventory of affordable housing is shrinking. Despite spending over $10 billion on homelessness over the last ten years, too many still live life on the streets. America is also growing older as the sons and daughters of the greatest generation age into retirement years. Our grandparents and our parents helped build this country抯 greatness and deserve the peace of mind to know that they will be taken care of, and can live in safe and decent homes and neighborhoods. And despite record high levels of homeownership, African-American and Hispanic American homeownership rates remain below 50 percent. That is not acceptable, and it is something I intend to address. Unless we make sure that everyone is participating in this great economic expansion and until we ensure that barriers to homeownership are torn down for everyone, until then, our job is not done.

In recognition of these challenges, during his campaign, President-Elect Bush proposed "the New Prosperity Initiative," to expand homeownership opportunities to low-income families and renew distressed areas in communities across the country. Just a month ago, with this Committee抯 help, Congress enacted one of President-Elect Bush抯 proposals, allowing low-income families and individuals with disabilities to use Section 8 rental vouchers toward homeownership. I pledge to you the timely implementation of these important initiatives.

The President-Elect also proposed the creation of more than 1 million Individual Development Accounts by providing tax credits to financial institutions that match the savings of low-income earners, who can withdraw the matched funds tax free to finance a home, a business or education. Obtaining downpayment and closing costs, in most cases, is the primary barrier low-income families face when trying to buy a home. To address this problem, President-Elect Bush has pledged to establish the "American Dream Down Payment Fund" to provide $1 billion of matching grants to lenders over five years to help as many as 650,000 unassisted low-income families become homeowners. To increase the supply of affordable housing and rid communities of vacant properties, the President-Elect has proposed $1.7 billion over the next five years in investor-based tax credits to encourage the construction and rehabilitation of single family homes in distressed communities. If confirmed, I look forward to working with this Committee on many aspects of these initiatives.

Finally, the issues relating to how we grow and develop as communities must be part of our discussions during the next few years. If confirmed, I intend to initiate a national dialogue on the challenges of growth and its impact on quality of life issues. These are issues of great importance and deserve careful study and consideration.

In every community, from inner city Chicago, to the West抯 Silicon Valley corridors, from the Orlando suburbs, to the rural Iowa community, the opportunity need is great. It is over the next several weeks that, if confirmed, I will explore how to meet this opportunity need, to see where we should be going with housing and community renewal policy. A key part of this process will be continuing discussions with Members of this Committee, to learn from your experience, to better understand what the issues are that we will be confronting together as partners. We will be partners, and I look forward to a very close relationship with Congress and this Committee.

In addition, as a former local government official, I expect to work closely with our partners at the grassroots level, from mayors, local officials and governors, to non-profit and faith-based organizations, housing advocate and industry groups. Together, we can meet the challenges of housing affordability, availability, and community renewal so that all people can truly achieve the American Dream.

I am a living testament to the promise of America. It is our responsibility to help fulfill the promise of America for people from all walks of life, throughout this great country.

I came to America with a suitcase and the hope of a better life. I know the value of homeownership because I have witnessed its great power throughout my entire life.

I can still remember the pride my dad and mom had when they bought their first home in America with the help of FHA. It seems like yesterday that Kitty and I bought our first home, the home where we have raised our children and where we lived life as part of a community.

Owning your own home is the American Dream, and I intend to fight for those who do not yet own a home, so they can live the American Dream and experience the transformation that can happen in a life through homeownership.

Mr. Chairman, Senator Gramm, Members of this Committee, we have much work to do. The Department of Housing and Urban Development must continue to evolve into a more efficient and more effective institution. At the same time, for low-income families and distressed communities across the country, the opportunity need is great. Working as partners, I am confident that we can meet these challenges together. If confirmed, I will work in a bipartisan manner, working with Republicans and Democrats to advance our common goals. It is my belief that our mission at HUD is not a Republican or Democrat mission, but rather an American mission and with your help we can and we will succeed.

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