I want to thank you for inviting me to speak to you once again. I am pleased to see Rick Nelson has come to work in Maryland. It was a pleasure working with him as the head of the National Association of Housing and Redevelopment Officials, and I look forward to the Housing Opportunities Commission continuing its important work under his leadership.

I enjoy coming to this Conference, and commend the great work being done here. In fact, when I speak to national groups, or at hearings, I often use Montgomery County as an example of where affordable housing is being done right. And this is, in no small part, because of the work you are all doing to better and strengthen our communities. The people at the Housing Opportunities Commission, and those of you here today are working to ensure that our communities are open and that people at all income levels can afford to live here.

Despite our efforts and hard work, however, much more must be done to make decent, affordable housing a reality for all people. In Montgomery County, a person must earn over $19 an hour to afford a modest 2 bedroom apartment. This means a household needs to have over 3 full-time minimum wage earners. There is clearly a significant gap between housing costs and what low-income people earn.

Looking around the room, I see many people who devote their time to helping families close this gap. It is clear that in this community local commitment is not a problem. However, to solve the housing crisis, there needs to be a partnership of local, state and federal governments as well as non-profit and private sectors. Unfortunately, under the Bush Administration's budget proposal, the federal government is not meeting its responsibility to help the lowest-income Americans afford decent housing.

For the third year in a row, the budget for housing programs is dramatically cut. The most severe cuts are in rental housing programs. The Public Housing Capital Fund is cut by almost $70 million. This is despite a backlog of over $20 billion in capital repair needs. This cut is counter-intuitive. We have invested in this housing, and as you know, it makes common-sense to ensure that it is maintained.

Because we have not met the capital needs of public housing, there are housing developments that are in disrepair and are not fit for families to live in. These properties blight whole neighborhoods. The Administration seeks to cut the HOPE VI program, the one program aimed at tearing down and rebuilding this distressed housing. We held a hearing with the HUD Secretary earlier this week, and even he praised the program for the good it is doing around the country. It was apparent from this hearing that this highly successful program has been cut in order for the Department to meet a spending target that was imposed upon it with no regards for the needs in our communities.

In addition to public housing, Section 8 appears to be on the chopping block. This year is the first that the Administration is not seeking full funding for all vouchers. While many vouchers do go unused around the country, and that is a problem, we should be taking steps to solve these problems and not be cutting back on needed resources. We also need to recognize that voucher utilization has gone up steadily over the past three years, and is predicted to climb even further. HUD's budget may result in putting an end to this progress.

The Administration is also proposing to block grant the voucher program to the States, and in doing so, it appears that the rules regarding who gets served, and at what subsidy levels will no longer apply. The voucher program is working for millions of families, and it does not make sense to transfer the administration of this program to States, adding another layer between the funding and those in need. Secretary Martinez said earlier this week that, "States are in a better position to deal with local needs." Well, I don't know about you, but I think that the local agencies are in a much better position to respond to local needs.

I fear that the block grant proposal is a way to cut funding for this critical program. As you are aware, funding for vouchers is based on their actual cost, so if housing costs increase, so do subsidies. This makes sense in a program that strives to ensure that families do not bear high rent burdens. Under a block grant proposal, it is unlikely that funding will keep pace with rising housing costs. Like other block grants, it is likely that funding will only be adjusted by inflation, if that. Over the past 5 years, rents have increased by 25% while the CPI has gone up only 12%. If this is the case, States will be forced to cut the number of families served, serve higher income families, or provide shallower subsidies.

These cuts and proposals will hurt the housing agencies around the country and the people they serve. You at the local level do the day-to-day work, but we at the federal level must be your partners in this endeavor.

I do not mean to sound pessimistic. We have battles ahead, but I am hopeful that Congress will restore many of the proposed cuts, as we have done in the past 2 years. I am also hopeful that once the block grant is debated, it will become apparent that adopting this proposal is tantamount to cutting the voucher program, something I clearly believe is a mistake and will be harmful to the over 1 million children who are able to live in decent housing because of this program.

In addition to cutting existing programs, the President's budget does nothing to increase the supply of affordable housing. I strongly believe that we should be investing in new affordable housing. I am an original co-sponsor of the National Affordable Housing Trust Fund, and I hope that we are able to provide new resources for this critical need.

Though I am disappointed in the President's commitment to housing and the housing budget, there are some areas of agreement, and one of them is homeownership. It is important that families have the opportunity to build assets, and I support HUD's efforts to promote homeownership among low-income families.

Getting more low-income families into their own homes is a laudable goal, and I am pleased to be part of this event, which will present awards to 3 low-income families who will soon become homeowners. Again, I want to thank the Housing opportunities Commission for having me here today, and more importantly for doing such great work in providing affordable housing.

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