Advertisement
|
Affordable Housing FinanceSPECIAL FOCUSThe HUD Leadership HUD Dream TeamAFFORDABLE HOUSING FINANCE • September 2009 Secretary Donovan discusses need for balanced housing policy, modernization of FHA, and transformation of agency BY DONNA KIMURA 
(Clockwise from left): Helen Kanovsky, Ron Sims, John Trasviña, Sandra Henriquez, David Stevens, Laurel Blatchford, and Shaun Donovan. (Photos by Zaid Hamid) Shaun Donovan has taken over the Department of Housing and Urban Development (HUD) in the midst of a housing crisis that saw 1.5 million properties fall into foreclosure in the first half of the year, a doubledigit increase from the first six months of 2008. In addition to stemming the tide of foreclosures, Donovan cites a shortage of affordable rental housing and the need for a new balanced housing policy that includes both single-family and multifamily housing. The stakes are high. “While HUD never seems to gather the press attention as other agencies do, to American families your future role at this agency may be far more important as it relates to their lives,” said Sen. Robert Menendez (D-N.J.) during Donovan’s confirmation hearing. “I agree with those who say that HUD has been sitting at the kids’ table, and it is time for that to change.” Donovan started by assembling a group of recognized housing experts to join him at HUD. While the drafting of this “dream team” has been widely praised, it has also come with heightened expectations. It’s a position that Donovan has embraced. “Expectations ought to be high,” says the nation’s top housing official. “We have a full-blown housing crisis on our hands, the likes of which we haven’t seen since the Great Depression— but with it, the opportunity to fundamentally strengthen our nation’s housing markets for years to come.” Donovan became the 15th secretary of HUD this year after serving as commissioner of the New York City Department of Housing Preservation and Development (HPD). AFFORDABLE HOUSING FINANCE recently asked him about his newly assembled HUD team and the job ahead. Q: What makes the new leadership team different from other HUD administrations? A: I’m very excited about the team we’ve put together and the wealth of experience they bring from all areas of the housing and community development sectors. Deputy Secretary Ron Sims comes to us from Washington state, where he was King County executive and did groundbreaking work linking housing, transportation, and land-use planning. I don’t think there’s anyone in the country who brings with him a deeper understanding of the connection between the built environment and health outcomes. And, I think his personality, energy, and style is infectious. He’s been visiting HUD’s field offices around the country, and the response from our people on the ground has been overwhelming. One of the real virtues of our assistant secretaries is the diversity of backgrounds they bring to the job. Mercedes Marquez comes to us from the city of Los Angeles Housing Department. A civil rights lawyer by trade, she’s our assistant secretary for community planning and development. There’s really no aspect of housing she can’t speak to. You could really say the same for Sandra Henriquez, who runs public and Indian housing. She helmed one of the nation’s largest public housing authorities in the country in Boston and has a background in for-profit affordable housing development. She understands all the dimensions of public housing because she’s worked on all of them. John Trasviña is our assistant secretary for fair housing and equal opportunity. He previously served as president and general counsel of the Mexican American Legal Defense & Educational Fund and brings to HUD an expertise and energy to build relationships and vigorously enforce the law when it comes to housing discrimination, which is essential in the current housing environment. Peter Kovar, our assistant secretary for congressional and intergovernmental affairs, comes to us from Capitol Hill and was formerly the chief of staff for Congressman Barney Frank. During his 26 years on the Hill, Peter has worked on virtually every issue—including immigration policy, health care reform, and economic development—and successfully coordinated Chairman Frank’s commitments to both the work of the House Financial Services Committee and the people he represents. HUD’s Special AdvisersWASHINGTON, D.C.—Some heavy hitters have been recruited to the Department of Housing and Urban Development (HUD) to serve as special advisers to Secretary Shaun Donovan and other key department leaders. They are expected to carry much clout in the new HUD administration. Former Federal Housing Administration Commissioner William Apgar is Donovan’s senior adviser for mortgage finance. An assistant secretary at HUD under President Bill Clinton, Apgar has also held various positions at Harvard University. He has been working closely on the development of the Homeowner Affordability and Stability Plan this year. “As a taxpayer, I’m happy to see Bill Apgar dealing with single-family mortgages,” says Denise Muha, executive director of the National Leased Housing Association, citing his experience. Barbara Sard is senior adviser for rental assistance. She joins HUD from the Center on Budget and Policy Priorities, where she was director of housing policy. Sard is an expert on tenant-based rental housing. “Barbara’s extensive work with housing issues, especially low-income rental housing, makes her an integral part of the team as we strive to preserve affordable housing,” Donovan said when she was appointed. Shelley Poticha is senior adviser for sustainable housing and communities. HUD is working with Sen. Chris Dodd (D-Conn.) to create the Office of Sustainable Housing and Communities at HUD. Poticha will likely direct that office if it is established. She has been president and CEO of Reconnecting America, focusing on land-use and transportation planning and policy. Frederick Tombar is another senior adviser. A HUD veteran who has held key posts in multifamily housing, he has been working on disaster housing programs. And we have Dave Stevens and Raphael Bostic heading up the Federal Housing Administration (FHA) and policy development and research, respectively— which for very different reasons are absolutely essential in transforming the way HUD does business and helping us shift toward the more evidence-based policymaking I think we need. FHA is an important stabilizing force in the housing market right now. Dave and I agree that it is essential to laying the foundation for long-term growth and stability as well. Let me lastly mention Laurel Blatchford, my chief of staff, who came with me from the Department of Housing Preservation & Development in New York. Laurel and I have worked closely together for many years. She’s an extraordinary manager and leader, and she understands that in order to accomplish the ambitious goals we’ve set, we need to transform the way we do business as an agency. Laurel is not just spearheading that effort, she’s living and breathing every aspect of it every day. Q: During your confirmation hearing, you said addressing the foreclosure crisis is job one. What are jobs two and three for HUD? A: Well, we’re still in a housing and economic crisis, so I would say first that yes, addressing the foreclosure crisis is job No. 1 for HUD right now and a top priority for the entire administration. Let me briefly say that through the president’s Making Home Affordable plan, we’re seeing progress and closing in on a half-million modification offers to borrowers. At the same time, we’re putting the pressure on the servicers to step up their modification efforts and putting in place monitoring systems to ensure that Making Home Affordable is helping as many families as possible. Beyond Making Home Affordable, though, we must put our neighborhoods and our communities back on solid ground and jump-start local economies, and that’s why we’ve been working around the clock to quickly and effectively get our $14 billion in [American Recovery and Reinvestment Act] funds out to the struggling communities who need it most. Through the Recovery Act, we’re making critical investments to repair our public housing, support project-based rental housing, and prevent homelessness. And we’re giving communities the tools they need to purchase and convert foreclosed and abandoned properties into new affordable housing through the Neighborhood Stabilization Program. And by making the most competitive dollars available in HUD’s history, we’re putting a premium on innovation—empowering local partners on the ground to find local solutions to the challenges they’re facing while laying the foundation for long-term growth. Although solving the foreclosure crisis is a defining challenge for HUD, we all know that there has been another crisis going on in communities across the country for much longer: an affordable rental housing crisis. It is long past time we had a balanced, comprehensive national housing policy that includes both single-family and multifamily housing. A housing policy that recognizes that if there isn’t equal access to safe, affordable housing, there isn’t equal opportunity. And so restoring that balance is absolutely critical. Q: You’ve indicated that HUD programs need to be modernized. Which specific programs do you want to change, and how? A: I believe changing the way FHA does business is essential to stabilizing our housing markets and our economy in the long run. Seventy-five years ago, FHA played a critical countercyclical role during a downturn in our housing markets— and it’s playing the same critical role today, making up nearly a quarter of the mortgage market. The American people have a lot riding on FHA’s success—and that’s why I’m happy to have Dave Stevens on board as our new federal housing administrator to help bring FHA into the 21st century, particularly in the area of risk management and technology. I want to use FHA as a platform to create products and pricing structures that drive innovation in the mortgage market. FHA pioneered the 30-year mortgage— and today, it can lead on energyeffi cient mortgages. Industry Feedback“On the homelessness front, we’re hoping, and I think there are indications, that they will expand on the successful work that has gone on in chronic homelessness to other populations, specifically homeless families and youth. We hope that they will push toward clear and measurable outcomes in these areas; and, of course, finish the job on chronic homelessness as well.”
"We want them to rebalance and have a greater emphasis on affordable rental housing. We want to see the National Housing Trust Fund implemented with a good amount of money to actually expand the supply of housing for extremely low-income people. We want to see more vouchers so that we can prevent and end homelessness. We think the president should make a declaration that he is going to end homelessness during his period in the White House. We think that’s possible to do, and HUD should be doing it.”
“Shaun is probably the most qualified secretary I’ve seen in my tenure.” “Secretary Donovan has gathered an
unprecedented group of experienced and
expert professionals, including himself.
Also, many of these people have extensive
multifamily experience. It is one of the
few times that I can remember when the
secretary and so many of the assistant secretaries
have a clear understanding and are
steeped in meeting multifamily challenges.
It coincides with the recognition that we
need a balanced housing policy."
"The appointees are experts in housing and urban development. Secretary [Steve] Preston's team, on the other hand, came with no substantive knowledge." We have an effort currently under way to expand and improve upon FHA’s existing energy-efficient mortgage product. When you buy a car, you know very clearly what the energy efficiency of it is because there’s a sticker on the window. We need the same thing for our homes and our buildings. If a house costs $5,000 to upgrade, but those upgrades will produce $10,000 in savings over time for utilities, it makes perfect sense for a mortgage to be used as a tool to realize those savings. Particularly in this market, we’ve got to make sure FHA becomes a leader in developing these types of innovations that can then be adopted across the industry. Another critical area is our homelessness programming. Through the Recovery Act’s $1.5 billion investment in the Homeless Prevention and Rapid Re-Housing Program, we’re encouraging modernization and retooling of local homelessness programming all across the country. By providing temporary financial assistance and services to families and individuals struggling to gain housing stability— through utility payments or moving support—this program is providing critical resources to help us serve the homeless. But these funds are also helping us shift our focus both nationally and locally toward preventing homelessness in the first place—a shift that will give communities new avenues through which to structure their response and save taxpayer dollars. Lastly, let me mention our Transformation Initiative we’re undertaking to fundamentally change the way we do business as an agency. For us, transformation means better research, evaluation, and accountability measures—to figure out how we can run all of our programs more effectively and more efficiently and give all of our stakeholders, grantees, and the general public the information they need to make informed choices. Assistant Secretary for Policy, Development, and Research Raphael Bostic has recently come on board, and he will be closely involved with transforming HUD to be more transparent and driven by evidence- based policy. Q: The American Recovery and Reinvestment Act made available $2.25 billion under the Tax Credit Assistance Program and an estimated $3 billion under the tax credit exchange. Is that enough to bring the low-income housing tax credit (LIHTC) market back to full strength? A: The Recovery Act, along with our fiscal year 2010 budget, offer the clearest statement in a generation that we intend to get back into the affordable rental housing business. And in late July, I announced that we’d approved the final round of funding plans submitted under the $2.25 billion Tax Credit Assistance Program (TCAP). Thanks to the TCAP, funds are beginning to flow again, and tax credit-financed projects that were stuck in the pipeline are moving forward again. Obviously, the TCAP program is just the beginning of jump-starting the LIHTC market, and we expect this injection of funds to help with the completion of an estimated 35,000 units of affordable housing nationwide. Q: How optimistic are you that the National Housing Trust Fund will be funded in 2010, and how will it be funded? What do you think of the bill to use Troubled Asset Relief Program dividends? A: I think it’s essential. Right now, there are only 74 units of affordable housing for every 100 very low-income households— and only 44 for those in extreme poverty. And we estimate that approximately 12 million Americans now spend more than half of their annual incomes on housing expenses. It’s clear this housing affordability gap is crippling American families. In response to the elimination of the originally authorized funding source, HUD’s fiscal 2010 budget includes $1 billion to capitalize the National Housing Trust Fund. The product of more than a decade’s worth of work, the Fund represented what was the first major federal housing production program since the creation of the HOME program almost two decades ago. I am fully committed to ensuring that when Congress finalizes its budget, this funding will be included, and I welcome further discussion with our colleagues on Capitol Hill to identify how we can make this dream we’ve had for decades a reality this year. There’s certainly never been a stronger case for the Housing Trust Fund than there is now. Q: You sounded a warning about the foreclosure crisis in 2004, earlier than many other experts. What potential troubles have you worried today? A: In all honesty, I don’t think it could get much worse than widespread foreclosures across the country and millions of Americans losing their homes, so that really is my focus and what I’m working to address through all of our investments in the Recovery Act and beyond. What I want to make sure is that we use this moment to take steps we might not have the courage to take otherwise. As Rahm Emanuel says, “A crisis is a terrible thing to waste.” Q: How will you measure success for HUD? What needs to be achieved in the next few years for it be a success? A: Stopping the foreclosure crisis, obviously, but achieving a better, more sustainable balance between homeownership and affordable rental opportunities is equally as important in many ways. We have put in place a host of benchmarks, some internal—becoming more performance- based and data-driven, bolstering relationships with local partners—others external—making the prevention of homelessness a measure of all our programs’ success, restoring FHA to its historic role as an innovator and leader. Success can’t just be putting an end to the current crisis. It needs to be laying the groundwork for a future where we don’t have to worry about this ever happening again. |
