At a recent forum on the stumbling economy sponsored by the Congressional Black Caucus, Housing and Urban Development Secretary Shaun Donovan seemed like a diligent student as he dutifully recited how HUD and the Obama administration met the home foreclosure crisis with billions of stimulus dollars, pressure on banks and mortgage modification programs.
But asked a question about housing and income equality, Donovan seemed transformed. Drawing "mmm-hmms" of approval from the mostly African-American audience, he gave an impassioned argument for how the nation must promote affordable rental homes as much as homeownership, how smart housing policy should include programs to lift people from poverty and how, without it, "we really will have class warfare."
It was a telling commentary on the tenure of the nation's 15th HUD secretary.
Donovan came to the job as a kind of housing rock star: engineering, architecture and public administration degrees from Harvard; a stint as New York City's housing czar; a passion for affordable housing; and the power to make it happen.
But Donovan has had little chance to pursue that agenda. Since he took over HUD in April 2009, the nation's worst housing collapse has morphed from a fast-moving emergency fueled by a subprime-mortgage meltdown into a lingering, solution-resistant catastrophe driven by joblessness and the faltering economy.
"He probably didn't have [this] in mind" when he signed on to be HUD secretary, said David Min, a housing finance expert at the Center for American Progress, adding, "Is this what he would have dreamed about as his tenure as HUD secretary? Probably not."
Struggling to keep up with the housing crisis, the Obama administration has rolled out one program after another, most of them centered on dealing with banks, mortgage insurers and finance companies. Though Donovan was "at the table," according to a White House aide, analysts said the policies came not from HUD but from White House economic advisers and the Treasury Department.
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"I think something bolder should have happened a while ago," said Richard Green, a housing policy specialist at the University of Southern California. Rather than taking simple, concrete steps to help homeowners directly, Green said, HAMP "has been mired in too much complexity," blunting its effectiveness.
When he unveiled HAMP to great fanfare in 2009, Obama predicted it could save several million distressed homeowners. Two years later, however, fewer than 700,000 homeowners had received permanent, home-saving modifications under HAMP, and the monthly total of homeowners using it as an option has plunged.
Meanwhile, distressed homeowners and potential first-time buyers fled the imploding market for rental housing, an exodus that triggered unintended consequences. The spike in demand drove up rents, displacing medium- and low-income renters barely making ends meet, and swamping the affordable-housing agenda that many housing advocates had hoped Donovan would champion.
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