To accomplish this mission, we have focused activities at the Department of Housing and Urban Development on three priority objectives:
|FY 1993 (Actual)||FY 1996 (Budgeted)|
|$25.500 billion||13,294||$19.500 billion||11,628|
Thick volumes of rules forced administrators to pay more attention to process than performance. HUD programs made passive clients of people, instead of striking an effective balance of rights and responsibilities. Some HUD programs clearly didn't work -- as evidenced by America's most distressed public housing.
Tinkering around the edges would not fix HUD. We decided to act boldly, reinventing the Department as a "right-side-up" agency that puts service to our nation's communities first, even while we trim personnel. In 1993, HUD had 13,300 employees. By 1997, we'll be down to 10,400, with a target of 7,500 by 2000. We'll do more with less staff by returning more power to the neighborhoods and communities where people live, by redesigning operations, and by using cutting-edge computer technology.
Our reinvention has been guided at all times by these imperatives from Vice President Gore's National Performance Review:
Increase Homeownership for All Americans. We have united the powerful but segmented homebuilding industry in a drive to make homeownership easier for all Americans. The National Partners in Homeownership's 58 members -- representing government agencies and the real estate, construction, lending, and nonprofit sectors -- are making an impact: The national homeownership rate has gone up by 1.6 percentage points in the last two years. This is the steepest two-year increase since statistics began to be collected 31 years ago. The new rate, 65.4 percent, is a 15-year high, as some 4.4-million families have become new homeowners since 1993.
Surveys tell us that closing costs are the principal barrier to buying a home. We've cut those costs an average of $1,000 for homebuyers. New paperless transactions at the Federal Housing Administration (FHA) and streamlined operations at Ginnie Mae are speeding service and reducing costs for mortgage firms, resulting in lower costs and faster service for home buyers. And future homebuyers will save as much as $1.5 billion annually because new HUD rules cut funds homeowners are required to place in escrow accounts.
It used to take six weeks to process mortgage insurance applications. The Denver FHA office cut that time down to one day for residents in Rocky Mountain states. Customers will save an estimated $4 million annually, thanks to faster service. We are replicating the Denver center's work across the nation so that all FHA customers can benefit.
More than 70 mortgage bankers have signed "best practices" agreements with us, committing them to increase lending to minority homebuyers, immigrant families, and others who have been underserved in the past. The first firm to sign an agreement increased lending to minorities by 217 percent in one year, proving that fair housing is good business.
Our aggressive mortgage sales initiative has cut the inventory of defaulted, government-owned properties, and returned homes and buildings to private ownership. We've sold more than 30,000 mortgages with an unpaid principal balance of $3.3 billion to private sector buyers at auction, saving taxpayers $650 million in upkeep and maintenance.
Ginnie Mae condensed 42 processes dealing with mortgage-backed securities, saving lenders $50 million annually by eliminating 180,000 sheets of paper that required 400,000 signatures.
Empower Communities. Our Urban Empowerment Zone initiative, begun in July 1995, brings together community leaders, the private sector, and federal and local governments to plot sustainable economic growth strategies for distressed communities. Partners use tax incentives, grants, and loans -- and their own ingenuity -- to attract private investments worth billions of dollars and to create thousands of jobs. In Boston, Detroit, and other cities, companies have already moved into the zones, bringing jobs and hope where neither existed before.
In the past, local governments submitted separate funding applications for each of 12 HUD community development programs. Now, under our streamlined consolidated plan, our local partners submit a single application for all of the programs. Community partners can skip paperwork altogether by submitting plans in computer files. New software lets applicants pinpoint where funds will affect communities down to the block level. Millions of people have access to the maps through our home page on the World Wide Web (http://www.hud.gov).
The Department that has "Housing" as part of its name must have a special concern for those Americans who have no home. We encouraged and helped develop local coalitions of governments, nonprofit groups, businesses -- and the homeless themselves -- to design Continuum of Care services that weave together outreach, housing, and needed social programs for homeless individuals. Under Continuum of Care, homeless people have access to more than a cot: they can get off the streets, move into transitional housing, and take control of their lives. Our programs are serving 14 times as many homeless individuals as we did before 1993.
Transform Public and Assisted Housing. The most profound changes in six decades of public housing are occurring right now. Under a flexible program called HOPE VI, officials in Atlanta, Baltimore, Charlotte, and other cities are choosing to demolish their worst public housing developments. Attractive mixed-income, less dense communities of townhouses and apartments are being built in their place. HUD and our partners will have demolished 30,000 units between 1993 and the end of 1996, compared to 20,000 units replaced in the previous 10 years.
Our determination to fix problems at the nation's most poorly managed public housing authorities (PHAs) reduced the number of major PHAs on our "troubled" list from 19 to 12. In Washington, D.C., Philadelphia, Detroit, Kansas City, New Orleans, and San Francisco, HUD works closely with court-appointed receivers or local elected officials to remedy serious management problems. In June 1995, we took direct control of the Chicago Housing Authority. As a result, these housing agencies are providing better housing and better services to residents and streamlining their operations to increase accountability to taxpayers.
A Special Workout Assistance Team (SWAT) created in September 1994 cracks down on negligent landlords and builds viable recovery strategies for run-down, mismanaged, and financially unsound properties in multifamily housing. SWATs withheld federal subsidies worth $62 million to owners of 137 properties until they brought their buildings up to national housing quality standards.
Operation Safe Home -- our alliance with local police, the Federal Bureau of Investigation, the Drug Enforcement Agency, and the Bureau of Alcohol, Tobacco and Firearms -- thwarts violent crime and drug trafficking in public and assisted housing. We've made 8,040 arrests for crimes involving drugs and weapons, confiscated 1,038 guns including -- 119 assault weapons and sawed-off shotguns -- and seized drugs valued at over $3 million.
President Clinton's "one strike and you're out" policy helps local housing authorities conduct strict screening and eviction procedures to weed out gang members and drug dealers who threaten the safety of law-abiding families living in public housing. Cities and towns now have the means to enforce zero-tolerance policies and keep developments free from crime and drugs.
These examples of HUD's reinvention are the product of a "clean house" commitment to change the culture of the agency and introduce a can-do attitude in every office. Our field office colleagues tell us they can feel the difference, and our partners in communities remark on the progress.
The reinvented HUD is helping America's cities recognize that they're capable of rebirth and renewal. They're capable of climbing back. One block at a time. One neighborhood at a time. It's happening right before our eyes.