NEW YORK -- HUD Secretary Shaun Donovan delivered a wide-ranging speech on the new administration's housing policy today at New York University. Declining to reveal details of plans to address foreclosures and the mortgage market -- "I will not do the president the favor of scooping him on that" -- Donovan did observe that the job creation measures included in the economic stimulus package will have a beneficial affect on the housing market, adding that the package also contains funding for HUD equal to a third of the department's yearly budget as a stimulative downpayment on future housing priorities.
Though I don't want to scoop my own broader piece on the new housing policy that will come out next week, here are some bullet points from Donovan's speech: On foreclosures, the Obama administration intends to accelerate loan modifications and use the federal government's de facto status as the nation's mortgage guarantor to make that happen in a broad, standardized way (Between Fannie Mae, Freddie Mac, and the Federal Housing Administration, the government is responsible for 95 percent of new mortgages). He added qualified support for bankruptcy reform -- the Durbin cram-down legislation -- as a safety net. Donovan also committed to absorbing the fallout from the community and family impacts of foreclosure, with the stimulus package providing $2 billion in neighorhood stabilization funding and $1.5 billion for an emergency shelter grants program to help prevent homelessness.
Donovan had sharp criticisms for the previous administration's HUD, observing that they had "in no way" been a leader on sustainable housing issues and calling their relationship with Congress "disturbing." Asked about working with state and local stakeholders, the new secretary observed that "the first thing we can do is do no harm. Already that would be an advance from the current state of where HUD is in terms of quote-unquote helping nonprofits and other developers."
Donovan spoke in more detail about his hopes for broader HUD policy, advocating improvements in five key areas that could be advanced in the context of the housing crisis the U.S. faces today: "Remaking mortgage system, dealing with the persistent rental-housing crisis that far too many low-income Americans face, beginning to use HUD and our housing policy as a force for broader sustainability within our economy and country, re-energizing efforts around fair housing, and fifth, allowing HUD to become a leader on research and evaluation." The last item is one of most important to Donovan, who wants to pursue research on the impact of housing policy on education and transportation.
"Do housing investments lead to better education for children?" Donovan asked. "Do housing investments lead to broader success within communities? Do housing programs, well planned and executed, lead to better job outcomes for families that benefit from them? To be frank, I don’t think we can answer those questions in a way we should be able to today. ... We must all hold ourselves to a standard, whether it's to Congress or to the American people more broadly: Here’s what we have spent, and here’s what we have achieved or not achieved. If we don’t achieve what we think we should with our programs, then we must change as well."
In response to a question on interagency cooperation, Donovan said that he had been involved in critical economic policy-making alongside other members of the president's economic team, including Larry Summers, Tim Geithner, Austan Goolsbee, and Christina Romer, in "forging a comprehensive effort around foreclosure efforts. I felt that I had a seat at that table and HUD was a welcomed partner in doing that." He also added that White House environmental coordinator Carol Browner had convened several working groups on sustainability that included HUD.
-- Tim Fernholz
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