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fireside chateric schmidt with secretary julian castrojanuary 7, 2016 >>eric schmidt: well, good morning. good morning,everyone. you don't have to say "good morning" back.it's not class. good morning, everyone. it's my pleasure tohave the secretary with us. and i wanted to remind everybody that this is a public eventand there's members of the press in the audience. so folks who have questions, be aware of that.i thought we should start by welcoming you back to palo alto and stanford; right?>>sect. julian castro: that's right. first of all, thank you, eric, for having me. it'sgreat to be here at google. and i was telling

you and some of the folks that every timei get back here and the weather is like this, i wonder why i didn't stay in the first place.>>eric schmidt: i had a different question, you graduated in 1996?>>sect. julian castro: that's right. >>eric schmidt: so had you joined google asit was founded? >>sect. julian castro: i'd have a lot nicercar today for sure. >>eric schmidt: so you went from stanford-- basically, you grew up in texas, and you went -->>sect. julian castro: in san antonio. >>eric schmidt: which surprisingly, you wentback to. so i want to explore that. >>sect. julian castro: surprisingly? that'sthe best place in the world.

>>eric schmidt: right? good.you went from -- and i'm joking, obviously. we went from -- you went from stanford toharvard. right? so how do you go from san antonio, hispanicfamily, you know, to stanford, to harvard? is that why you've ultimately -- you're oneof the youngest political rising leaders in our country, one of the fastest-rising politicalleaders. did you know that you were going to become a political leader?>>sect. julian castro: you know, oddly enough, it was at stanford when i went -- becausei grew up, my brother, joaquin and i, i have a twin brother, joaquin. and he says the wayto tell us apart is i'm a minute uglier than he is. i'm actually a minute older. we wentthrough the public schools of san antonio.

and my mother had been very active in theold chicano movement, the mexican-american civil rights movement of the late '60s andearly '70s. we grew up mostly with my mother and grandmother. we both got scholarshipsto get to stanford. we had never seen the campus. it was the secondtime that we'd ever been on an airplane. and i remember that we got there on i think itwas wednesday, september 23rd, 1992, because stanford's on a quarter system, they alwaysstart late. when i got to stanford, it was the first time that i had ever really beenaway from san antonio. and i could see the city with different eyes. i had gone to aschool that -- a high school that was probably 85% mexican-american, not very diverse. obviously,a much more diverse community, people from

all over the united states and over threedozen countries. and i could compare what was good and whatneeded improvement in my community. so, you know, the -- what needed improvement was,in the bay area, you had a place that was -- had better education levels, better incomelevels, more innovative, ready for the future. in san antonio, it was a city of about a millionpeople, a wonderful place to raise a family. a place where people of different backgroundshad generally gotten along well together. and the way that i've always described itis, it was a big city where if two people passed each other on the street downtown,they still look each other in the eye. there's not that disconnection that often happensas communities get bigger and bigger.

so my interest in politics and going intopublic service came out of how could you combine the best of that to have.a community that was innovative and had good income levels and education levels, readyfor the future, entrepreneurial, but also had a good character to it?>>eric schmidt: but when you went to harvard, you -- you know, in -- because at the time,obviously, you were a fantastic student, also a minority relative to the dominant whiteculture, you would have easily gone and become very, very successful in the conventionalworld, corporate world. what was it that made you go back? you wentback to san antonio, right, to your hometown. again, you're incredibly young. you're theyoungest councilman, the youngest mayor. you're

elected. you run, you lose narrowly. you thenwin again. and you're only, like, 32. >>sect. julian castro: 34, yeah.[ laughter ] >>eric schmidt: and people said -- listento him. and people say -- by the way, he looks 22.right? so there must be something in your sense ofmission that you're trying to do. >>sect. julian castro: yeah. because i -->>eric schmidt: and in san antonio, you were seen as one of the most innovative mayorsin the country at an age where you're 20 years younger than everybody else.>>sect. julian castro: what was burning inside me was that i felt very, very blessed in myown life to have this great opportunity of

going to college and going to law school.i grew up with a grandmother who had dropped out in elementary school. and she worked asa maid, a cook, and a baby-sitter her whole life. and she raised my mother as a singleparent. and my mom actually had had the chance to go and graduate from high school and goon to college. and i felt as though by going back to sanantonio, that i could make a contribution in public service to make sure that more peoplethat were growing up like me could actually have the opportunity to go to college andthen pursue their own american dream. and that's pretty much what drove me.in my first two summers, as you know, the traditional thing in law school is that folkswill go and be a summer associate somewhere.

so i actually -- after the first summer, iactually went back to san francisco and i was a summer associate at baker & mckenzie,which was sometimes referred to as the mcdonald's at that time of law firms, because they hadsomething like 60 different offices all over the world.and the second year, my brother and i were at akin gump and at vinson & elkins back intexas. and then when we graduated from law school, we both went back and were at akingump for a while before we pursued our public service careers.>>eric schmidt: so at this point, you're sufficiently successful as the mayor that you get on thesort of interesting national character list that the sort of white house is working on.and you get involved in their programs. and

then you become one of the youngest appointmentsat the national level in the obama administration, as secretary of housing and urban development.can you summarize for us what the problems in housing and urban development are? becausethey strike me as sort of overwhelming. >>sect. julian castro: yeah. i mean, it'sfair to say that they are very, very significant. they're massive. i saw this both as a mayorand now even more so as hud secretary. to begin with, we have a rental affordablecrisis out there. a few months ago, the national low-income housing coalition put out a piercingstudy that said basically that there isn't a single community in the united states ofany size where if you're working full-time, minimum wage, you can afford the rent on atwo-bedroom apartment. and very, very few

places where you can afford the rent on evena one-bedroom apartment. >>eric schmidt: so how do people make it?how do they get by in this situation? >>sect. julian castro: what folks are doingright now is that you have an unprecedented number of families who are paying more thana third of their income in rent. rent is taking up, eating up more and more of their income.or they're doubling up. or, of course, in our country, we still do have a significantchallenge with homelessness. although the president has shown great leadership on that.homelessness since 2010 has been trending downward. there are cities where it's goingin the opposite direction. but in general, it has been going down.so you have that affordable crisis. the home

ownership rate in the united states rightnow is at a four-decade low. obviously, we went through the housing crisis. and if thestory ten years ago, in 2005, was that it was too easy to get a home loan, the storytoday is that oftentimes for middle-class families, for folks who have an average creditscore but who would be responsible, they can't get a home loan. it's too tough.and lending to minority communities is at a 13- or 14-year low.so you combine those two things of less home ownership, more people competing in the rentalmarket, and it adds up to a massive challenge in terms of affordable and housing opportunity.>>eric schmidt: and -- so what are the solutions that you would like to see?my understanding of sort of the hud that you've

inherited is, because you have a republicancongress, there's not much that can be changed in the sense of financial allocation, therules that you've been given in the few years that you've been able to be at hud. in otherwords, your degrees of freedom of fixing this are lower than it might appear to an outsider,because you can't get the money moved around and things like that.>>sect. julian castro: yeah. >>eric schmidt: is that true?>>sect. julian castro: let's start with a baseline of, we need more resources to beinvested in affordable housing. and because you have a fairly conservative congress, we'renot getting the kind of resources that -- to meet that demand.also, at hud, hud as a department has been

more and more stressed or burdened over time.to give you an example of that, the day that reagan walked into the oval office in januaryof 1981, hud had over 16,000 employees. today, it has about 8,000 employees. so it'sbeen cut in half. so this idea that you hear that people think that every department ofthe federal government has just run amok and it's growing, that's not true.so that's a baseline. however, that doesn't mean that we're powerless.that means that we do have to be more innovative. it means that you have to make the resourcesstretch further. it also means, frankly -- and i saw this as a mayor -- that at the statelevel and at the local level, that what ends up happening is that states and localitiesend up taking up more of the slack.

>>eric schmidt: there's a large amount ofpublic housing, often very old, in america. do you manage that? or is it managed by thecities and states, with money that you give them?>>sect. julian castro: it's managed by public housing authorities.>>eric schmidt: okay. >>sect. julian castro: and there are over3,000 public housing authorities out there, from public housing authorities that are ruraland very small, to a housing authority like san francisco or chicago that have thousandsand thousands of units under their jurisdiction. but it's federal money.>>eric schmidt: 'cause one of those things i wanted to explore as part of why you'rehere is, we -- you suggested, and we have

entered into a partnership with a number ofother companies to try to get -- i would just describe -- i'm going to use the word "publichousing" because i don't know how better to describe it -- connected. can we sort of gothrough why that's important. why isn't it obviously already occurring?you know, what are the roadblocks? why have you made this -- i think this isone of your signature campaigns in the white house.>>sect. julian castro: yeah. you know, i got the call from president obama asking whetheri'd be interested in this role on april 16th, 2014. and i remember that because it's notevery day that the president calls you, asking if you want a job. unless some of y'all havethat experience. i don't.

and the first thing that i thought about waswhat we could do to help -- and let me be very explicit -- i don't believe that helpingis a dirty word. that if you do it right in government, that that's something that's positive.but how we could help folks who live in public housing, where the median household incomeis about $12,500, how we could help them become more upwardly mobile and get out of publichousing. >>eric schmidt: how does somebody live on$12,500? >>sect. julian castro: i mean, they're gettinga very significant subsidy of their housing cost. oftentimes, maybe other subsidies.that includes also senior citizens who are on social security. and so, you know.and i believe that, basically, that brainpower

is the new currency of success in the 21stcentury global economy, and that for america to be as competitive as possible, we needto ensure that everyone, up and down the income scale, and particularly young people, have21st-century tools to compete in the job market. and that over half of the folks who are lowincome and the vast majority of people who live in public housing don't have internetaccess or in some cases the community is wired or, in theory, they could have it, but thenthey can't afford it. so either way, they're not reaping the benefitsof being connected right now. so connecthome is a pilot project to connect28 communities, 27 cities and one tribal community, of folks who live in public housing to theinternet. and we're very proud of that effort,

very proud of google fiber's role in the effort.you all have been fantastic. and at the end of the day, we want to do twothings. number one, we want to ensure that folks get that access, they get connected.and secondly, we want to be able to measure what difference that makes in their lives.because as you all know, it's not enough to just connect them. we need to get more rigorousabout being able to demonstrate the impact in their lives that that makes.and ultimately, the long-term goal is that we see more of those kids who are going tobe connected that do better on their third-grade math and reading tests, that are more likelyto graduate from high school, that are more likely to go on to college, and, hopefully,into companies like google and others, and

to reach their dreams, and that that connectionwill have been one small part of that. >>eric schmidt: what i remember when you firstcalled on this was the observation that many of these housing units are reasonably dense,they're reasonably vertical. so they're particularly amenable to a shared service, running a fiberline. you can serve it with -- very many -- very many, many people very, very efficiently.it's sort of a no-brainer as a public act for corporations and you guys to sort of makethis happen. and the benefits are very quick. >>sect. julian castro: absolutely. and asyou all know, you're partnering with connecthome in several cities. and, by the way, i wantto say a big thank you to google fiber. today we learned that they're going to be connectingthe residents in kansas city, the public housing

residents that they're serving to gigabitservice for free, which is a great victory for that community in kansas city.>>eric schmidt: we're very, very proud of that.and, you know, once you -- the simple rule about fiber is, once you've got it in place,it's just a godsend; right? because the bandwidth is there, the service is there. you just haveto get these things wired. and one of our biggest projects is makingsure that the sort of local regulatory municipal barriers that get in the way of doing that,right, for whatever historic reason, are sort of eliminated. and your organization has helpedthat throughout the cities. we're now up to, let's see, 20 additionalcities in six metro areas that we're now designing

for. we're very operational in kansas cityand in provo and in austin. right? so it really is working.and our strategy is, of course, you know a national strategy, where we're in this forthe long run. do you think -- what i can never tell withprograms like connecthome is, is it likely to become a truly national program over adecade? in other words, it looks to us like this is going to be hugely successful in the30 or so. but there's a lot more than 30. how do we get to 1,000 and 3,000?>>sect. julian castro: i believe that it will scale. and my goal is that by the time wewalk out of there, on january 20th of 2017, i would like for us to be able to say thatwe have commitments so that every single household

in public housing will be connected.i do believe that that can happen. you have a number of partners who have beencommitted to connecthome. and i know that we and others will keep prodding everybodyto try and get there. and then after that, you know, there's hudassisted housing that's mixed-income housing. and so there's a base that we're working from.and i think the drive to grow it. and so i am confident that it'll become much strongerthan 28 communities. let me also just say, eric, that, you know-- and i saw this as mayor when we started thinking about google fiber there in san antonio,that you can see these fascinating issues that present themselves with sort of the neweconomy and the old economy and how that interacts

with public law-making at the local level,the state level, and the federal level. and the use of poles, for instance, and the battlesthat you all have had in different communities around that is a very good example of that.tesla in its battle with the car dealers in state legislatures -- you all know this one,of course. usually, you have as to go through a dealership at the state level to sell acar in many places. tesla can only have a car there, it's almost like a show piece,like a museum, you can only go see it. they can't even set up a sale.another one is uber and lyft and all of the issues surrounding that and regulation atthe local level. ,and then these craft brewers and their abilityto distribute versus the beer distributors.

so what you see is this fascinating intersectionof the new economy and disruptive technologies and i think the way that local government,state government, and federal government is sort of doing a head-spinning and trying tofigure out how to respond. i think maybe the best thing that comes from the work that youall do and others do is helping to educate public policymakers on how we should takein these things as they change and understand systems differently and not be afraid to regulatein a different way, or in some cases, not regulate at all.>>eric schmidt: right. >>sect. julian castro: because things havechanged. >>eric schmidt: we would certainly take theposition that more -- that allowing a space

for innovation, right, is key. because innovationis how companies are formed, jobs are created, wealth is created. and you can imagine thereare plenty of problems in cities that can be solved if the space were -- the legal spaceallowed for a local innovator to create a company to solve this particular problem.when i was much younger, there was a fear about strong mayors. and in the last coupleof decades, there's been a sort of view that the government was relatively dysfunctionalunless you had a strong mayor. and we went through a period of what i would argue wasa strong mayor. but you were a strong mayor. in the internal politics of these cities,why is the mayor -- it's a simple question, but why is the mayor's power important andhow is it exercised? as you know, cities can

be understood as the innovation engines nowin america. >>sect. julian castro: well, it's importantbecause leadership at the top, i think, whether it's in a company or at one of these levelsof government, where the leader is focused is oftentimes what's going to move the organizationand where the attention of the organization is. and the position of mayor is important,and a mayor has strength or doesn't have strength, i think, basically by a couple of things.number one, whether they have the votes with the people they serve with on the city councilto actually get something done. because at the end of the day, that's the body that makespolicy decisions. and whether they're effective in the organization in getting that organizationto execute well.

and those two things, i think, are reallywhat add up to whether someone is successful or not successful in that office.>>eric schmidt: but i think for our audience here, people are often very, very confusedabout why problems -- engineers often get confused about politics, because engineersare rational and politics is often irrational. [ laughter ]it's -- sorry. [ laughter ]>>sect. julian castro: is that a comment about the 2016 election cycle?>>eric schmidt: we're going to get to that. i'm going to compare you to marco rubio.the -- >>sect. julian castro: i'm not wearing bootstoday, so --

>>eric schmidt: if we talk about the bay area,you've got enormous wealth, enormous creativity, many people would say that the financial resultsfor the stock market for the last year have largely been tech-driven. right, there's alot of reasons to think that this area in particular is a jewel. and yet we have thesecrippling housing problems and crippling transportation problems. and i don't need to tell anyonehere in the audience how difficult this has become.why are these problems not fixable? in other words, it's pretty obvious to me that if youhad a bunch of people in a room and said we've got lots of smart people coming in, lots ofpeople who are being dislocated in housing. we need more affordable housing, we need moreof this and more of that and so forth.

why does it not work that way?>>sect. julian castro: well, it doesn't work that way for -- i agree with you that it oughtto be able to work that way. and i do think that we can get closer than we are.but let's just take the issue of housing in san francisco. right? i imagine there area lot of folks in this room that are dealing with that. or in any other city that is ahot market. it doesn't work in a linear fashion becausepeople who represent different areas and different interests get pressure. then sometimes theylisten to that pressure in a proportionate way, and sometimes they listen to that flasha disproportionate way. why can't we build more affordable housingin many areas? because you get a lot of nimbyism.

i saw this every week in san antonio. someonewanted to come in and create more density. then you'd have all these folks line in thisfront of the city council and say, no way. keep this -- and i'm going to vote againstyou if you vote for this. and for that elected official making thatone decision, right, and not oftentimes putting it all together, because they all add up,you know, are you going to make 200 people angry? and for what, in their mind?>>eric schmidt: do you think that the higher levels of government, so the state or federalgovernment, should play a more directive role to support growth and development of, forexample, housing in general, transportation in general, affordable housing? or are youmore in favor of letting the local authorities,

mayors primarily, sort this out with the concomitantissues that you're well familiar with? >>sect. julian castro: let me say that i dobelieve there are a lot of places where mayors and councils and county commissions are doinga lot of innovative work and good work and creating more affordable housing opportunities.but you always have that political reality, too, that sometimes cuts against that grain.the -- generally, the posture has been to deliver resources to local communities andas much as possible, to let those local communities determine how they're going to spark greaterhousing opportunity. the best example of this are two of our bread-and-butterprograms, which are community development block grants, it's a 41-year-old program now,cdbg, and home funding, which started in 1992.

and these are block grants to local communitiesand states that gives them a lot of flexibility on how they use this money.so you might have one community that is using that money mostly to rehab elderly housingand another that is using that as gap financing to create more affordable housing, but itruns the gamut. now, let me give you an example of somethingthat i'm telling mayors more and more these days.we're saying, because cdbg is often the largest allocation of money that they get, citiesget from hud. we're saying, look, what we see out there is that we need more housing.we need more affordable housing. and at the same time, only about 29% of cdbg money isbeing used directly for housing. they're using

it for infrastructure projects. because it'sflexible. is it -- i'm saying, mayor x or y or z, youknow that you have an affordability issue in your city, and yet at the same time, you'redoling out one million dollars here for this project, for another project instead of usingthose resources in a focused way on housing. and so to get back to one of my original points,yes, we need more resources. that's definitely a big part of the story. but we also needto be as smart as possible about the resources that are there and that we do have.>>eric schmidt: i think as we sort of finish and move to audience questions, i do wantto talk to you a bit about the political landscape. you're often mentioned as a very significantfuture leader on the democratic side. you

are -- have been, in fact, compared to marcorubio. i've never quite understood in a hispaniccontext the politics on the hispanic side. presumably, a hispanic candidate would bein favor of immigration, legalization, and so forth and so on. can you sort of dissectwhat's going on for somebody who's not hispanic, sort of explain, how do the politics work?>>sect. julian castro: it's a good question, you know. and my perspective on it was firstinformed, of course, by growing up in a city that was 60% hispanic, mostly mexican-american,and now having served as mayor, and then now at a national level getting to visit communitieslike florida and like northern virginia that are hispanic but very diverse, people fromall over latin america.

the hispanic community generally leans democratic.in 2012, you know, everybody knows that about just over 70% voted for president obama. atthe same time, there are pockets of hispanics, particularly in places like florida and cuban-americansand especially the older generation of cuban-americans, and in some places of texas that have leanedrepublican. and so what you have in marco rubio and tedcruz i think are two good examples of folks from a hispanic community that generally hadleaned republican. that is changing. in fact, 2012 was a breakthrough year because the presidentactually won more than 50% of the hispanic vote in florida and a large percentage ofthe cuban-american vote. but i think that often there's this disconnectin the media centers of the united states.

and i'm thinking especially of new york. idon't think that they get, oftentimes, the diversity of the hispanic community in andof itself, whether that's culturally or politically. i also think it's true that the democraticparty can't, you know, -- cannot forever just count on getting the hispanic vote. i haveseen that in texas, you know. i saw when george bush ran for governor in '94 and '98 and whenhe ran for president. >>eric schmidt: very popular.>>sect. julian castro: yeah. he got about 40% of the vote.so it's possible. the problem that republicans have is not thepersonalities, because they have cruz and rubio, and they have susana martinez and governorsandoval in nevada. the problem is, their

politics is their policies. they've gone crazyon immigration. they've gone way out there to the right. on tax policy, on educationpolicy, on just about all of the bread-and-butter issues, the kitchen table issues that matterto the hispanic community, they're way to the right. and i don't see from here to novemberthat they're going to be able to get back in to the middle zone that i think would makemost hispanics comfortable with them, even if they had somebody like marco rubio runningat the top of the ticket. >>eric schmidt: no political conversationis finished without bringing up donald trump's name.so one theory of what's going on goes something like this: that many, many people have notseen economic growth over the last decade.

this is well established mathematically. andthere are many theories as to why this growth and success has not occurred. one would beimmigrants taking your jobs. anti-muslim feelings, all those sorts of things. that can be arguedas a trump position. another one would be it's the banks and theelites and the so forth. and that would be sort of the sanders position. people are makingthese arguments. and the core point in this argument is thatthe elites, which most of us travel with, missed this anger, and that the anger is notjust exemplified by trump, but exemplified by all of the candidates who are non-traditional,right, non-mainstream candidates, which there are in both parties.do you agree with that? you're a person who's

lived in both worlds; right? you grew up -->>sect. julian castro: sure. >>eric schmidt: you grew up in a tough environment.you went to the best schools and so forth. do you believe the elites missed this? doyou believe that there is a gap between, shall we say, the common person, the common person'sexperience, which is exemplified by this rather odd politics as the elite like to describeit, and the elites? >>sect. julian castro: i believe that thatgap is growing. and i definitely believe that there's a strong frustration there.i vehemently disagree with what trump has put forward as a solution. and i do agreewith those who have said that, basically, it's this boogeyman or shiny object politicsof sort of redirecting people's anger.

i believe what we need to do more of is whatthe president has focused on these last several years, which is, you know, a plan for universalpre-k. so people get started strong and are able to graduate and go on and reach theirdreams. that we make community college free thosefirst two years and make college more affordable and reduce student debt so that folks canget on with prospering in their lives. that we make home ownership for responsiblefamilies more accessible. so, you know, at the end of the day, whatwe need to do is to get back to the blueprint that gave us a strong middle class in theunited states. and that's what the president has been trying to do. and that's what i believethat secretary clinton would do as well if

she were -->>eric schmidt: and you've endorsed her as a presidential candidate.>>sect. julian castro: sure. >>eric schmidt: maybe we should move to questionsfrom the audience as well as we have some submitted questions which we call the dory.so we can start with one. and if -- there's a mic here as well.the -- let's see if i have my list here. the most attractive internet access optionfor -- and i'm reading this from a submitted question -- for disadvantaged families isprepaid mobile broadband. what are the fundamental reasons for its extremely high cost in theu.s.? in my country of origin -- this person is not a u.s. person -- it costs less thana tenth of what it does here. in other words,

why does mobile broadband cost so much?>>sect. julian castro: number one, i have a feeling there are probably three dozen peoplethat can answer that question better than i can in this room.[ laughter ] however, i mean, let me say that i'll giveyou a good example from my hometown of, i think -- you know, again, to go back to thisissue of the regulatory environment and how we can undo some of that in order to makeaccess more affordable. san antonio is one of a number of cities thathas a municipal utility. we own a municipal utility. and at some point in the early '90sor mid-'90s, they went out and built a fiber network, the municipal utility did. they builtthis fiber network throughout the city or

throughout their service area. in the late1990s, the texas legislature passed a statute that said that cities that owned that kindof fiber network could not provide -- use it to provide internet access to homes, totheir citizens. they could use it for a very -->>eric schmidt: really? >>sect. julian castro: -- limited number ofthings, and only for certain educational institutions, like universities and libraries.so you have this community, and it's not the only one, that is sitting on this fiber networkthat's not able to use it to provide cheaper, good internet service.now, you could undo that statute to allow them to contract with a company to go in thereand run that network.

but i think that we need to find more waysthat we can lower the cost. >>eric schmidt: but was this just an industrylobbying effort that -- i mean, sounds to me like you have a municipal asset and peopleare telling you you can't use it. >>sect. julian castro: it's a company thatshall go unnamed right now. >>eric schmidt: not google.>>sect. julian castro: no. it was not google. but there was lobbying at the state levelto pass that kind of law. and that's a good example, to me, of -- that we're not maximizingour potential sometimes. >>eric schmidt: next question is, fcc defiancebroadband as 25 megabits, giving close to $10 billion of carriers to speed up deploymentof internet service to rural america. isps

are considered regional monopolies by many,in other words, this questioner. some states are trying to ban municipal broadband.>>sect. julian castro: yeah. >>eric schmidt: can you make sense of this?>>sect. julian castro: yeah, i mean, to go to this point, from my experience in san antonio,that -- at least that case did not make a lot of sense.you know, i believe that we need all hands on deck.>>eric schmidt: to your knowledge, is it still under this restriction?>>sect. julian castro: it is. sure. yeah. so when i was mayor, i sat on the cps energyboard. that has not changed. and it's not the only community. i remember reading backthen of other communities in the united states.

not many had a network that was as developedas san antonio's, but there are some. i just think that we need all hands on deckin terms of trying to make it more accessible and more affordable for folks to get access.>>eric schmidt: now, i'm reading -- yes, sir. we have a question. let's go ahead.>>> quick question. if you found yourself to be the vice president of the united statesa year from now, a, how would you feel about the opportunity, and, b, what are some ofthe things you would look (indiscernible). [ laughter ]>>sect. julian castro: no. i appreciate the question and the confidence that you havein me. [ laughter ]and thank you. however, you know, i'm trying

to do a good job at hud. and, you know, just-- i've seen many times in life that the best way to make sure that you have a good futureis not to forget about your present, what's in front of you right now. so i'm trying todo a great job at hud. and then whatever the future brings, we'll see.all right. >>eric schmidt: yes, sir.>>> hi. thank you very much for being here. >>sect. julian castro: is that a cal shirtyou have on? >>eric schmidt: it might be.[ applause ] i was thinking about taking it off, i thoughtit will be fine. >>sect. julian castro: you all beat navy theother day.

>>> air force.>>sect. julian castro: air force. >>> it was a great game.my question is that you mentioned a little bit earlier that sometimes cities, you know,they have large funds allocated to them for urban development projects and housing, buta lot of times they don't use it for housing. and so i know that a lot of times the federalgovernment has requirements for states and cities that once they meet those requirements,then they get the money. and it's generally for a purpose like urban development, butsometimes they can use it for other things. i was wondering if your department has consideredputting those requirements also on the money. once you get it, here's what you have to do,say, you know, maybe for ten years, you have

to use this for housing, and then that wouldput a sizable dent in the problem. >>sect. julian castro: no. thank you verymuch for the question. so we do have a decent amount of money thatis more restricted in terms of that it has to be used for housing.a lot of that money doesn't flow directly to cities; it goes to these public housingauthorities or states. also, the treasury has a very important and significant program,the low-income housing tax credit. they administer it, treasury does, that goes to states. andthe states distribute those low-income housing tax credits to local communities. and that'sjust for affordable housing. so, you know, i don't want to give the impressionthat there's not any resources that are -- in

fact, most of the resources are more restricted.however, the two big block grant programs, so to speak, are a little less so. and especially-- i'm really thinking about community development block grants. because home, it is shaped alittle bit more for housing. >>> thank you.>>eric schmidt: yes, ma'am. >>> thank you so much for joining us todayand for everything you do with hud. really appreciate all the efforts you've made tohelp people nationally, but so many of the communities that you are serving like throughconnecthome, specialty minority communities. we talked about google fiber and the rolethat can play. the other thing that affects them with mobile, knowing diverse communitiesare more likely to buy a smartphone than any

other demographic, latinos in particular.many tech companies are so quick to look to other countries where we see a need, the nextbillion users, something i know eric is particularly passionate about. and often, many of us whocome from communities like these think about the need to look in our neighborhoods here.when we think of innovation and thinking about how can we possibly understand what it meansto come from a family that makes $12,500, that family probably has a smartphone or hopesto have one as their first means of connecting to the web.so knowing all that, what are your thoughts on the responsibility we have as googlersto better understand these communities and develop for them?>>sect. julian castro: you know, it's a wonderful

question, and i know that you all are doingsome fantastic work in the mission district and other places to try and help communitiesmaximize their potential. and i believe that there is a tremendous amount of low-hangingfruit out there, and so many young people that are growing up that have the potentialto be like y'all here, googlers and folks who have graduated from college and, you know,reached your dreams or are reaching your dreams. and so how we figure out ways to scale beingable to improve their circumstances and their trajectory is fantastically important. andso i'm glad that y'all are a part of that. you bring up an issue that i think, you know,leads to a real irony, which is that especially for low-income communities, in public housing,and communities of color that too oftentimes

are low income, they overuse technology inmany ways. you know, have a smartphone, use apps like twitter and facebook and instagram.and so you see that -- both that there is a market there that probably is being undertappeda lot of times and that the private sector, i think, needs to gear itself even more towardand focus on. i think there's a responsibility there to enhance the number of folks who comefrom those communities who are able to participate in the success of companies. and i also believethat in this 21st century, that as you look around the globe, that the united states findsitself in this unprecedented competition for talent and brainpower with -- with nationsaround the world that are producing tons of young people that are intelligent and talentedand tech-savvy. and we need to do our part

to make sure that we don't let any of thatpotential go to waste. and so, you know, i applaud y'all for whatyou're doing. and i hope that more of that will happen and that silicon valley continuesto become more diverse. and i think that's going to be good not just for any one companyor for the industry, but for the united states in making us more globally competitive inthis 21st century. >>eric schmidt: diversity is a clear strength,right, is the common message here. another question from our electronic audience.homelessness in our cities is reaching epidemic levels. in san francisco, streets are linedwith tents and underpasses are filled with them. why isn't homelessness a federal issue?these are citizens of the united states. the

federal government, and not cities, shouldtake full responsibility for their welfare. >>sect. julian castro: actually, the -- homelessnessvery much is a federal issue. so in 2010, the president laid out a blueprint for endinghomelessness in the united states called opening doors. and it was significant because it wasthe first presidential plan that didn't just say, we want to reduce homelessness. it saidwe want to end homelessness. and the first part of that was ending veteran homelessness.so since 2010, veteran homelessness has gone down by 36%. overall, homelessness has beenreduced by 11%, and with about a 17% reduction in family homelessness. we've also seen areduction in chronic homelessness. so hud delivers billions of dollars of resourcesinto what are called continuums of care that

are locally based partnerships of nonprofitsand governmental entities that deal with homelessness and try and drive down those numbers. however,even though we have seen that progress, it is very clear that especially in these westcoast communities -- seattle, portland, san francisco, los angeles -- that you have seena spike in the last 18 months, two years, especially in unsheltered homeless.>>eric schmidt: right. >>sect. julian castro: people living on thestreets. so about five weeks ago, i joined the mayorsof seattle, portland, san francisco, and l.a. in portland to talk about how we can be helpful.we want to be proactive at hud and help them as they address trying to get the growth inhomelessness under control because we very

much recognize that. but we do have a roleto play. we are playing that role, and not just with money, but also helping them strategizeand getting a good system in place to drive down those numbers.>>eric schmidt: right. go ahead, yes, sir.>>> so -- thank you so much for being here and for the work you're doing. my questionspeaks almost exactly to the previous question. but there was a lot of news coverage recentlyabout utah's homelessness -- program to address homelessness. i think it was even coveredon "the daily show." and they described it as basically their strategy is to providehomes to the homeless. and they have seen a lot of success. they say there are fewerthan 300 homeless people in the state of utah

at this point. i haven't heard a lot of comparisonsbeing drawn from the utah program to federal programs. and i guess i was just wonderingif you could talk about any lessons that you think could be learned from that specificprogram and maybe why those lessons haven't been applied nationally.>>sect. julian castro: yes. so what you're mentioning is something called housing first.so if you all think about public policy a lot of times, and especially as it leans sortof center right, the idea that we have is that, okay, you show that you can take responsibility,and then we're going to give you opportunity. housing first flipped that on its head. itused to be that we would have homeless folks, you know, stay a certain number of nightsin a shelter, start going to an addiction

counselor if they have an addiction or starttrying to look for a job if they're -- obviously, if they're homeless, they're probably outof a job. it flipped that on its head and said, no,you know what? first we're going to put you in permanent housing with supports. so somebodythat will help you try and find a job, help you address an addiction or other issue. butwe're going to give you the opportunity first and then stabilize you so that you can takethat responsibility. and there's a real lesson in that that we're trying to figure out, okay,where else does that apply? and the cities that have been most successfulin driving down their homelessness numbers have been those cities that have been strongestwith housing first.

>>eric schmidt: as a follow-up, do you -- iimagine these are people where life just doesn't work. so they have an addiction problem, theyhave a health problem, a woman with children without a provider husband, and/or bad domesticsituation. do you think that housing first is a necessaryprecondition to solving those problems? because often, my understanding of these people isthat they have compound problems, right? no credit, criminal history, drug problem, youknow, whatever. >>sect. julian castro: yeah. i would say thatthat's shown itself to be the most effective. because having housing stabilizes the individualor the family so that they can then go address those other issues, versus, you know, they'rehaving to sleep in a shelter or transitional

living facility, and kind of address it -- addresstheir issues during the day and worrying about where they're going to sleep at night, it'snot as effective that way. that's what the research has shown.salt lake city and utah in general have been excellent in that regard. and so have a numberof other communities and states. in fact, on veterans day, i was at the war memorialin virginia, in richmond, with terry mcauliffe, celebrating that virginia had become the firststate -- they call themselves a commonwealth, i guess -- to effectively end veteran homelessness.>>> can you just follow up real fast and say, then, how is the federal government pushing,given that we've seen that that's more successful, to apply that everywhere?>>sect. julian castro: yeah. so, i mean, that

is what we're recommending for communitiesall the time to do. and with our continuum of care funding, we have favored that approach,basically. essentially, incentivized continuums of care around the nation to go with the housingfirst model. so we expect that in the years to come, as they get stronger at implementingthat, that we're going to see similar success. let me just very quickly go back to the questionof san francisco and l.a. and some of these communities that have high growth in unshelteredpopulations. you know, there's still a need for transitionalliving and shelters, and especially in communities that have an onslaught of folks living onthe streets. the fact is, you're not going to find all of them permanent housing rightaway. so you need an effective way to deal

with that.one effective way, an example of that, is something called a navigation center in sanfrancisco that i visited a couple of months ago. it is transitional living, but they dothings a little bit differently than most places. for instance, they let people go inas couples into the shelter. and they let folks take their pets. and maybe most importantly,they still have an eye to getting folks to more permanent housing, but they recognizethat's not going to happen right away. >>eric schmidt: ma'am, you'll have the honorof the last question. >>> great. thank you so much.as you know, we are facing a crisis of extreme proportions around affordable housing herein the bay area, and as is the case all across

the country. and yet this is an issue thathas not risen to an issue of national debate. how do we get this issue that is part of anational debate, how do we get this issue to be translated from one that people seeas an individual issue, an individual responsibility, to one that is fundamental to our communities.our infrastructure, how we get to work, how we go home at night and do our homework, howwe stay healthy, all aspects of our life are related to this issue of having a great home.and yet this is not an issue that has adequate resources. and we are facing a very extremesituation here. i'm part of organizations that are doing affordablehousing advocacy in the bay area. we're facing an uphill battle. and yet the solutions areclear. we need more resources flowing.

can you speak to some of those issues? andthank you so very much. >>sect. julian castro: well, thank you forthe work that you and the organization are doing.if we were to go and look at the transcripts of the 2016 debates so far, i don't thinkwe'd find a single mention about housing. i don't even think we'd find a mention abouteducation so far. and so there is a -- there's a disjuncture between what's being focusedon and what -- and the issues that intimately impact the health, the well-being, and theforward trajectory of families. and to your question of, okay, how do we getthis on the radar screen, i wish i had a better answer than just to say that with regard tohousing specifically, people hear "affordable

housing," and they think, "oh, that's poorpeople." but the fact is that more and more middle-class families these days are dealingwith the issue of paying more than a third of their income in rent. and so that issueis affecting so many more people on the spectrum, and folks that vote. so, like anything, itdepends on the activism of everyday americans to put that on the radar screen of peoplerunning for city council and mayor, where a lot of the action on these things happen,to state legislators, and, of course, federal candidates.>>eric schmidt: i think you all see why i wanted secretary castro to come.i just -- i have not met very many political leaders today who have the kind of futurescale that you will have and the impact that

you're going to have on america. i'm veryproud to be american, and i'm very proud that you're going to be one of our great futureand, of course, current leaders. thank you so much for being here.>>sect. julian castro: thank you. appreciate it.[ applause ]