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M e e t in g t o Rem arks o f R o b e r t P . F o r r e s t a l E n c o u ra g e S u p p o r t o f F i r s t H o u s in g D e v e lo p m e n t C o r p o r a t io n o f F l o r i d a , I n c . S e p te m b e r 2 2 , 1989 GOOD MORNING. THANK-YOU ALL FOR JO INING US HERE TODAY. BEFORE I CALL UPON C L IF F HARDY TO TALK ABOUT H IS PROPOSAL, I 'D LIK E TO TALK WITH YOU FOR A MOMENT ABOUT THE PRESSING NEED FOR AFFORDABLE HOUSING IN FLORIDA AND THROUGHOUT THE NATION. ACCORDING TO A REPORT PREPARED IN MARCH 1988 BY THE NATIONAL HOUSING TASK FORCE, AMERICANS, L IN E . ENTITLED A DECENT PLACE TO L IV E , ONE IN SEVEN OR ABOUT 32 M ILLIO N PEOPLE LIV E BELOW THE POVERTY THE POVERTY LIN E IS AN INCOME LEVEL OF $ 1 1 ,2 0 3 ANNUALLY FOR A FAMILY OF FOUR OR $ 5 ,5 7 2 FOR AN IN D IV ID U A L. ALMOST A THIRD OF ALL HOUSEHOLDS IN TH IS COUNTRY EARN LESS THAN $ 1 5 ,0 0 0 A YEAR. IN 1986, ONE FOURTH OF ALL JOBS DID NOT PAY ENOUGH TO RAISE A FAM ILY OF FOUR ABOVE THE POVERTY L IN E . TH IS I S N 'T ALL THAT SURPRISING GIVEN THAT A PERSON WORKING FULL TIME AND PA ID $ 4 .0 0 AN HOUR W ILL ONLY EARN $ 8 ,3 2 0 IN A YEARS' TIM E. POVERTY IS NOT UNFAM ILIAR TO THOSE OF US WHO HAVE LIVED IN THE SOUTH FOR ANY APPRECIABLE LENGTH OF TIM E. IN FACT, THE SOUTH HAS MORE THAN 90 PERCENT OF ALL COUNTIES IN THE NATION WITH PERSISTENT POVERTY, DEFINED AS PER C A PITA INCOME IN THE LOWEST 20 PERCENT FOR THE LAST THREE DECADES. L IV IN G IN POVERTY ARE WHITE, AND H IS PAN IC S ARE POOR. WHILE THE MAJORITY OF THOSE A DISPROPORTIONATE NUMBER OF BLACKS IN FACT, BLACKS MAKE UP 20 PERCENT OF THE SOUTH'S TOTAL POPULATION, BUT COMPRISE 40 PERCENT OF IT S POOR. NOT SURPRISING LY, THE A B IL IT Y OF THOSE L IV IN G NEAR THE POVERTY LIN E TO OBTAIN AFFORDABLE AND DECENT HOUSING IS ADDITION TO THEIR LIM ITED INCOMES, LIM ITE D . IN MANY OF THESE PEOPLE HAVE LIM ITED EDUCATION AND RESTRICTED M O B ILITY TO JOB S IT E S . TH A T'S NOT TO SUGGEST THAT LOW-INCOME PEOPLE DO NOT WANT TO WORK. FACT 40 PERCENT OF THOSE L IV IN G TIME JOBS, IN IN POVERTY DO WORK FULL OR PART ALMOST EXCLUSIVELY IN THE SERVICE TRADES AND BLUE COLLAR JOBS. ONE PROBLEM IS THAT, INCREASE, AS LOCAL ECONOMIES IMPROVE, HOUSING NEEDS BUT THE A V A IL A B IL IT Y OF LOW COST HOMES AND RENTAL UNITS OFTEN DECLINES. IN A STATE LIK E FLORIDA, LARGE EXTENT ON THE SERVICE INDUSTRIES, WHICH IS DEPENDENT TO A A REDUCTION IN AFFORDABLE HOUSING CAN BE DEVASTATING TO SERVICE COMPANIES BY REDUCING THE POOL OF PROSPECTIVE EMPLOYEES AND BY CONTRIBUTING TO INCREASED ABSENTEEISM DUE TO LENGTHY COMMUTES. THE DECLINE IN AFFORDABLE HOUSING OFTEN REQUIRES PEOPLE TO EITHER MOVE TO THE INNER C IT IE S , WHERE CRIME AND POVERTY ARE CONCENTRATED, AREAS, WHERE POVERTY IS OR OUT TO THE RURAL IN FACT MORE SEVERE ALTHOUGH LESS EVIDENT TO THE GENERAL PU BLIC. THE A V A IL A B IL IT Y OF AFFORDABLE HOUSING SOLVES MANY PROBLEMS. WHEN PEOPLE HAVE A VESTED INTEREST IN THEIR NEIGHBORHOOD THROUGH HOME OWNERSHIP OR DECENT, AFFORDABLE RENTAL U N IT S , CRIME PROBLEMS OFTEN DECLINE. UPWARD M O B ILITY IS ENHANCED. PROVIDED WITH A STABLE SOURCE OF LABOR. BUSINESSES ARE BANKS CAN OBTAIN A MORE STABLE SOURCE OF DEPOSITS AND MAKE HIGHER QUALITY CONSUMER AND BUSINESS LOANS. THE TAX BASE IMPROVES. YOU ARE ALL AWARE OF THE FISC AL PROBLEMS CONFRONTING THE FEDERAL GOVERNMENT. THE FEDERAL D E F IC IT HAS STRAINED THE GOVERNMENT’ S A B IL IT Y TO ADDRESS THE N A T IO N 'S C R IT IC A L HOUSING SHORTAGE. IN FLORIDA, HERE THE S T A T E 'S SALES TAX REVENUES HAVE NOT KEPT PACE WITH THE ECONOMY. THE SERVICE SECTOR, WHICH IS LARGELY UNTAXED, IS GROWING FASTER THAN THE TAXED GOODS SECTOR. THE RESULT IS A GROWING STATE WITH INCREASING NEEDS AND A RELATIVE DECLINE IN AVAILABLE STATE REVENUES. AS A RESULT OF AN INCREASE IN OUR COMMUNITIES' ECONOMIC PROBLEMS, SOCIAL AND THE NEED FOR COORDINATED PUBLIC AND PRIVATE INVOLVEMENT TO ADDRESS AFFORDABLE HOUSING AND OTHER NEEDS IS EVIDENT EVERYWHERE, INCLUDING THE STATE OF FLORIDA. THAT NO ONE GROUP CAN SOLVE THESE PROBLEMS ALONE. IT IS CLEAR SCARCE PUBLIC RESOURCES MUST BE LEVERAGED WITH PRIVATE FUNDS IN WAYS THAT ARE CREATIVE AND EFFECTIVE. THE NEED FOR INCREASED BANK INVOLVEMENT HAS BECOME PAINFU LLY EVIDENT TO MANY BANKERS AS THEIR APPLIC ATIO N S TO EXPAND GEOGRAPHICALLY AND D IV E R S IFY THEIR PRODUCT LIN ES HAVE COME UNDER ATTACK BY VARIOUS COMMUNITY GROUPS WHO COMPLAIN THAT BANKS HAVE NOT MET THE CREDIT NEEDS OF THEIR COMMUNITIES. AT THE SAME TIME THE REGULATORS AND BANKERS ARE AWARE THAT CONVENTIONAL BANKING SERVICES AND PRODUCTS OFTEN ARE IN S U FFIC IE N T TO ADDRESS THE SPECIAL CIRCUMSTANCES OF LOW- AND MODERATE- AT THE FEDERAL RESERVE BANK, INCOME PEOPLE. OUR COMMUNITY AFFAIRS STAFF HAS BEEN RESEARCHING SOME OF THE PUBLIC/PRIVATE PARTNERSHIP PROGRAMS THAT ARE CURRENTLY PROPOSED OR HAVE BEEN IMPLEMENTED. PROGRAMS ALL INVOLVE BANKS. MANY OF THESE PROGRAMS INVOLVE A SHARED R IS K AMONG MANY BANKS. THE BANKS' INVESTMENTS. THE BETTER THEY ALSO PROVIDE A F A IR RETURN ON TO ACHIEVE THE SCALE NECESSARY TO FULLY ADDRESS THE PROBLEMS IN FLORIDA AND ELSEWHERE IN THE NATION, THESE TWO FEATURES -SHARED R IS K AND P R O F IT A B IL IT Y - ARE V IT A L . AD D ITIO N, IN A COMPETENT STAFF AND PROVEN TRACK RECORD ARE NECESSARY BEFORE BANK INVOLVEMENT CAN REASONABLY BE EXPECTED. WE BELIEVE THAT THE F IR S T HOUSING DEVELOPMENT CORPORATION OF FLORIDA HAS ALL OF THE ESSENTIAL INGREDIENTS NECESSARY TO PROPERLY ADDRESS MANY OF THE AFFORDABLE HOUSING NEEDS OF THE VARIOUS LOW-AND MODERATE- INCOME COMMUNITIES IN FLORIDA. IT OFFERS MANAGEMENT COMPETENCE AND EXPERIENCE AND A PROVEN TRACK RECORD. AS SUCH, WE BELIEVE THAT F IR S T HOUSING PROVIDES AN EXCELLENT OPPORTUNITY TO HAVE A S IG N IF IC A N T IMPACT IN YOUR STATE IN A WAY THAT WE TRUST W ILL PROVIDE ENORMOUS FUTURE DIVIDENDS IN THE FORM OF INCREASED DEPOSITS, OF COMMUNITY GOODWILL. PROFITABLE LOANS, AND HIGH LEVELS AT TH IS TIME I WOULD LIK E TO TURN THE PROGRAM OVER TO C L IF F HARDY, THE PRESIDENT OF F IR S T HOUSING DEVELOPMENT CORPORATION, AND ASK HIM EXPLAIN MORE ABOUT THE DETAILS OF H IS PROPOSAL AND ANSWER ANY QUESTIONS YOU MAY HAVE.
@FedFRASER