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BizTalk: Former HUD Secretary Cisneros advocates for affordable housing

For more than 25 years, Henry Cisneros has been one of the nation's leading figures in urban development and affordable housing.

As secretary of the Department of Housing and Urban Development for five years under former President Bill Clinton, Cisneros oversaw the federal government's efforts to address the needs of cities to create more housing opportunities, particularly for those who could least afford them.

The San Antonio native, businessman and advocate for the Hispanic community has been credited with driving the revitalization of many public housing projects nationwide, and for developing policies that helped drive homeownership rates to new highs. During his term, he spent time in more than 200 cities in all 50 states. Before joining the Clinton Administration, he served as a city councilman and then mayor of his hometown from 1975 to 1992.

Following his HUD position, Cisneros joined Univision, serving as president and chief operating officer for the Spanish language television network from 1997 to 2000. Then he turned his focus again to housing development and urban revitalization, forming American City Vista to support efforts to build homes that are affordable for average families.

That company – now called CityView – is an investment management and development company that focuses on urban residential real estate in the Western U.S. The firm, which Cisneros chairs, manages eight investment funds and separately managed accounts that have invested in 80 projects, generating more than $3 billion in urban investment. The firm focuses on complex projects in markets that are typically overlooked by other investors because of their challenges.

He participated via Skype during a recent symposium on affordable housing sponsored by the University at Buffalo School of Architecture and Planning, and then spoke to The Buffalo News.

Buffalo News: You spoke about the significance of housing as an intentional strategy in a city. Can you elaborate?

Henry Cisneros: Cities are places where people work, learn, worship and gather, but they must first and foremost be places where people can live. It's an essential part of a city's function to generate affordable housing.

A great city needs a mix of housing types, so its workers can live relatively near to where people work. Otherwise, we find snowstorms and other natural events, where repair workers are needed but they can't be accessible because they live so far away.

I laid out a series of strategies to help people think about housing, from homelessness, to rentals, to homeownership. There are 670,000 people on the streets of America on any night.

Then there's rental housing, including that which is for people earning 80 percent below the area media income, which requires subsidies. So we have a mix of things like Section 8 and low-income housing credits. But cities have to do a better job of making more housing available to people in that range.

Then there's workforce housing, at 80 percent of median to 150 percent of median, and that generally speaking is not subsidized but does require a lot of effort for cities to make it available.

Then I spoke about homeownership and why that's so important in a city, because it's one of the vehicles for creating a middle class. For many people, the sum of their net worth is their equity in a home.

Then I spoke about the diverse populations that a city needs to serve, and talked about these same categories of homelessness and renters and ownership, but also subgroups within that, and the need for more housing for seniors as the aging tsunami increases the number of people who need senior housing at an affordable level. We talked about student housing and the role that plays in a city, when a university wants to focus its resources.

Then I transitioned to talk about strategies to get to affordability, like assembling public land, like focusing on inclusionary strategies, and so forth.

Q: There's been a lot of talk locally about inclusionary zoning. Does it work?

A: Yes, it does work, because we're seeing it work across the country. I think it works best in very strong economies, like a New York City or San Francisco, where there's a lot of demand for housing and where the developer can make up what is incentivized or affordable with the rates it charges on other housing. So it requires a very robust housing market.

But it can also work in other settings, because it helps level the playing field. Everybody knows what the housing market is going to be, because this is now a requirement. It's not discretionary. It's not something that is applicable to some but not to others. It needs to be consistent across the board.

There are some cities that have done things along the lines of allowing people to buy their way out. In other words, you don't necessarily have to build the units. You can provide money to the city where it can use it elsewhere. But where it's mandatory and required, it tends to work better, because it's more consistent.

Q: Would it work here?

A: I'm not advocating inclusionary zoning for Buffalo. I'm just saying it's a tool that cities use across the country when they want to address affordable housing, because in some markets it really is the only way to get additional production of affordable housing built. Where the market is strong and prices are rising, developers can ask for more on the nonsubsidized portion in order that they can afford to build the affordable.

I can't say that's a necessary tool for Buffalo, but it may be that Buffalo is at a place where it can use other techniques, such as assembling public land or providing some subsidy on mixed-use projects that are designed to include some residential, or work with nonprofits and use municipal resources to assist them through a housing trust fund or bond issue.

I'm not trying to dictate to Buffalo. Buffalo has the characteristics of a place that is strengthening, thanks to the formula that is working in other places: "eds and meds," strong educational commitments, and also the medical center investments.

What's happening is we're replacing the old manufacturing economy, which Buffalo clearly was. But it's given way all across the country to medical centers, higher education, tourism and hospitality, new media, business and professional services, international trade, and Buffalo is clearly a city heading in that direction. It is a national-level city.

So it's right to be exploring what mix of subsidy and support is necessary to create the appropriate mix of housing that the city needs.

Q: It sounds like you're familiar with Buffalo. How often have you been here?

A: I came there as HUD secretary a number of times, and also because I had a longtime relationship with the former congressman who preceded me at HUD, Jack Kemp.

Also, I was very impressed with Penman Homes. I factored that into what we have done. The work that I have done since 2000 to build homes in central city areas is directly related to what I saw Penman Homes do in Buffalo. So I'm a longtime admirer of the dynamic that is Buffalo.

Also, when I was secretary, the principal deputy secretary was Andrew Cuomo, and I have watched his commitment to Western New York.

Q: Is affordable housing getting enough recognition nationwide?

A: Absolutely not. We are not investing enough in affordable housing.

In the federal government, we've cut back the allocations to affordable housing. We are not doing enough in the tax code. We need more tax credits and we need a greater national emphasis on affordable housing, not just budgetary but in priorities and setting up engagement with local government, philanthropy and the private sector.

We have a national housing crisis. It takes the form of homelessness and evictions. It takes the form of homes that are too expensive. There is not one metro area in America where a person making the minimum wage can afford a two-bedroom apartment. So there's this disconnect between what we're willing to pay people and what they can afford in housing.

All of these pieces are essential to creating a robust, viable housing market and because we have failed on these counts, we have a recognizable housing crisis, a clear housing crisis.

Q: Are any areas doing a good job?

A: There's no area that stands out as doing an overall good job in meeting the housing crisis. There are some that do a better job in some areas.

Houston claims to have eliminated veterans' homelessness. Boston has a strong and robust network of nonprofits building workforce housing.

But in most places, we're behind the power curve big time.

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