Shaun Donovan may soon be influencing federal housing policy from a new position. Secretary of the Department of Housing and Urban Development (HUD) since 2009, Donovan is expected to be named director of the Office of Management and Budget (OMB). San Antonio Mayor Julián Castro is his likely replacement at HUD. The moves were reported by The New York Times, but the White House has yet to make an announcement.

For Donovan, the change would place him in a higher-profile position in the Cabinet. While implementing President Obama’s vision across all federal departments, he would still have a hand in shaping HUD’s budget.

“Shaun Donovan going to OMB is perhaps an opportunity to educate the office on how HUD programs work,” says Denise Muha, executive director of the National Leased Housing Association in Washington, D.C.

She cites the complexities of funding the Sec. 8 rental assistance program as an example. Donovan understands the public sector’s role in the program and sees the big picture beyond the budget numbers that are the focus of OMB.

He would also be in a new position to advocate for the Rental Assistance Demonstration (RAD), one of his signature programs at HUD. The cornerstone of the agency’s preservation efforts, RAD allows public housing and other key affordable properties to convert to long-term Sec. 8 contracts.  The first component of the program was capped at 60,000 units, which Donovan has wanted to increase.  There are approximately 115,000 units on a waiting list. However, a recent bill approved by the House Appropriations Subcommittee on Transportation, Housing and Urban Development, and Related Agencies fails to expand the program.

Ending homelessness has been another priority. This has included working with Veterans Affairs to provide HUD-Veterans Affairs Supportive Housing (VASH) vouchers to homeless veterans. The fiscal 2015 White House budget proposal seeks $75 million to support 10,000 new VASH vouchers.

Observers say Donovan understands the connections that housing has to the goals of others departments like the VA and Health and Human Services. As a result, he may be able to strengthen those links to create new housing opportunities.

In addition, Donovan has been the Obama administration’s point person on the Hurricane Sandy recovery efforts, which has involved multiple federal agencies.

“It could only be good to have a perspective that was hard earned at HUD and to see the intersection of housing and the broader goals of health, education, and veterans housing,” says Sunia Zaterman, executive director of the Council of Large Public Housing Authorities.

However, those hopes face the reality that the OMB job requires juggling a number of priorities. Another enormous challenge is a ticking clock, with the administration having only two more years in office.

During his time at HUD, Donovan, who led the New York City Department of Housing Preservation & Development prior to joining the federal agency, has earned strong praise from many in the industry.

“Secretary Donovan has led a revitalization not only of the Department of Housing and Urban Development, but in a way the attitude and opinion of the department by industry stakeholders,” says David Gasson, executive director of the Housing Advisory Group and vice president of Boston Capital. “To have a ‘housing person’ at the helm of the department put renewed enthusiasm in its mission and encouraged a sense of confidence in those that work with and through HUD to provide housing and economic development opportunities.  He also assembled an outstanding team of professionals that will carry on his legacy.  As for the secretary’s move to OMB, the president made a wise choice, and we hope having him there will, among other things, strengthen housing’s footing within the administration, including with how they might handle the future of Fannie Mae and Freddie Mac.”

Castro, 39, would be the second San Antonio mayor to become HUD secretary. In 1993, Henry Cisneros took over the agency as part of the Clinton administration.

The move would raise the political profile of Castro, a rising star in the Democratic Party.

“As for Mayor Castro, we are excited to work with him, especially when you see what he has accomplished in San Antonio,” Gasson says. “He inherits a strong team, and I am confident he will build on the foundation Secretary Donovan has left him.  There are many areas in which we would like to see continued growth, but his biggest challenge will be maintaining, if not increasing, the level of funding for housing programs at a time when Congress seems set on further cuts to domestic programs.”

While Donovan was well known in housing circles when he took over HUD, less is known about Castro.

Perhaps, some of the focus would shift to programs that are familiar to him from his years in the mayor’s office such as HOME and Community Development Block Grants, says Muha.

Zaterman adds that the San Antonio Housing Authority has been involved in major redevelopment efforts and is a Choice Neighborhoods grant recipient from HUD. San Antonio is also one of the first cities in the Promise Zone Initiative that aims to comprehensively revitalize distressed neighborhoods. As a result, Castro has a neighborhood and redevelopment focus.

Connect with Donna Kimura, deputy editor of Affordable Housing Finance, on Twitter @DKimura_AHF

Photo by Sheri Whitko Photography