By Jonathan Lansner
What can Dr. Ben Carson do for housing?
President-elect Donald Trump nominated the retired neurosurgeon – a former political rival turned Trump supporter – to be the next head of the U.S. Department of Housing and Urban Development.
HUD does everything from overseeing housing discrimination laws to offering housing assistance to low-income households to funding housing construction to being a significant player in the mortgage-making game. It’s effect is nationwide but is extra noteworthy in high-cost regions like Southern California.
So being HUD secretary is a large job for anyone, especially Carson, who has no government experience.
Yes, he’s got a personal link to HUD from his rags-to-riches story: an upbringing in a struggling family that benefited from some government financial assistance. But he’s also a HUD critic and no fan of many welfare programs, in general. He’s been quoted as saying that many government housing initiatives look like “social engineering.”
As a public service, I offer up some HUD leadership advice for Carson, assuming he wins congressional approval for the post.
I contacted two local experts familiar with HUD’s work and the government’s role in housing to ask what Carson’s focus should be at the department: Lucy Dunn, CEO of the Orange County Business Council and who once served as director of California’s Department of Housing and Community Development; and Richard Green, director of USC’s Lusk Center for Real Estate, who spent the past year serving as a HUD senior adviser.
Here are five ideas that emerged for those conversations.
Keep Section 8
One way HUD has a major effect on local housing availability is its Section 8 system, which helps lower-income households get affordable rentals from private-sector landlords.
Both Dunn and Green agree that keeping the program, even expanding it, is critical.
Green says it’s a very efficient program with a high percentage of its dollars following to the actual participant. Additionally, he thinks the voucher system has a good bang for the buck for both HUD to meet its goals and for those helped by the program.
“It’s allows kids to school in better neighborhoods, and that has great benefits,” Green says.
Maintain fairness
HUD has been the cop on the beat in terms of keeping access to housing and housing credit fair.
Green says the Obama administration has done an adequate job enforcing laws that ban discrimination by lenders, sellers and landlords. He’s worried that the agency will revert to the limited-regulation style of President George W. Bush. Which is no surprise, since Bush and Trump are pro-small-government Republicans.
New challenges may also not be addressed, Green fears. One example he cites is the nation’s growing immigrant populations, which have different buying and borrowing habits. The housing industry may need a nudge to change its ways to help these groups obtain the housing they need, he said.
“We just can’t wave a wand on these issues,” Green says. “But I don’t see this as a priority for this administration.”
Boost financing
In an era of skittish lenders, government agencies like HUD play a big role in the post-recession mortgage game.
Through its Federal Housing Administration programs, HUD can help cash-strapped households gain better financing terms. How HUD shapes its mortgage making going forward will be carefully watched in the real estate world.
In addition, how HUD interacts with sister agencies overseeing the much larger federal mortgage facilitators, Fannie Mae and Freddie Mac, will be another chore for the new HUD chief.
The future of these two mortgage giants could be up for debate as the federal government tries to rethink its role in mortgage making.
“To cobble it all together is a very tough thing to do,” Green says.
Cross-pollinate
Housing is not a stand-alone issue, as it affects (and is affected by) numerous economic and societal trends, not to mention various bureaucratic forces.
Calls to reform the government’s housing policies require deft juggling of the numerous agencies that touch housing. Could an outsider like Carson find possible nontraditional solutions?
For example, Dunn notes deep links between housing and a household’s educational success – as well as its health.
“The most important impediment to infill (redevelopment) housing is crappy schools. Working with education. As schools improve, housing improves,” says Dunn, who adds, “Carson can bring his health expertise to the housing discussion. Safe, decent, affordable housing is a vaccine for many health issues.”
Streamline
Carson will quickly learn how housing is a perfect example of how convoluted financial regulations can be.
Numerous agencies have a say-so in the real estate business. Carson will be challenged to deftly manage a bureaucratic maze to streamline some of Uncle Sam’s housing efforts.
Green hopes Carson gets needed funds for HUD to upgrade its ancient technology that helps service nearly $2 trillion of government-backed mortgages.
And Dunn notes that Veterans Affairs runs its own housing finance program for vets that is distinct from what’s offered by HUD and other agencies.
“Correct inefficiencies in housing programs,” she says.
The original article can be found here.