Why Trump Picked Ben Carson as HUD Secretary

AP Photo/Marcio Jose Sanchez

Ben Carson speaks during a town hall meeting Sunday, February 21, 2016, in Reno, Nevada. 

Why would Donald Trump appoint the uniquely unqualified Ben Carson to run the U.S. Department of Housing and Urban Development?

If the Senate approves the neurosurgeon’s nomination, he will run an agency with a $47 billion budget that oversees federal rental assistance programs serving more than five million of the country's lowest-income households. The largest of these is the housing choice voucher program (formerly known as Section 8), which helps low-income families rent apartments in the private market. HUD also oversees a million units of public housing run by local governments, administers $5 billion in community development funds, insures the mortgages of more than one-fifth of all homeowners, and enforces fair housing laws that bar racial discrimination by lenders and landlords.

Carson has no experience with any of these programs—nor any experience in government at all. When rumors circulated last month that Trump might appoint the physician to his cabinet, Carson’s close friend and sometime spokesperson Armstrong Williams told The Hill: “Dr. Carson feels he has no government experience. He's never run a federal agency. The last thing he would want to do was take a position that could cripple the presidency.”

When Trump did tap his one-time rival to run HUD, Williams declared that one of Carson’s chief qualifications was that he had once lived in public housing—a claim that news outlets, including The New York Times, initially repeated. On Monday morning, former Arkansas Governor Mike Huckabee likewise tweeted that “Ben Carson is first HUD Sec to have actually lived in gov't housing.” But by Monday afternoon, Williams had retracted his statement, telling the Times that Carson was never a public housing tenant after all.

“With a Republican-controlled Congress and presidency, subsidized housing and fair housing would be under threat no matter who is HUD Secretary,” observes Alex Schwartz, a professor of urban policy at the New School and author of Housing Policy in the United States. “But unlike previous HUD secretaries under Republican presidents, Carson is entirely lacking in qualifications, and is unlikely to champion any aspect of HUD's mission.”

Richard Nixon’s HUD secretary, George Romney, had been governor of Michigan. Ronald Reagan appointed Samuel Pierce—a former judge and corporate lawyer who had served in various capacities in the Eisenhower and Nixon administrations—as HUD secretary. George H.W. Bush picked Jack Kemp—who as a congressman from Buffalo had advocated privatizing public housing—to run the agency. George W. Bush’s first appointee, Mel Martinez, had served as chief executive of Orange County, Florida, and as chairman of the Orlando Housing Authority. When Martinez resigned, Bush replaced him with Alphonso Jackson, who had run public housing agencies in St. Louis and Dallas.

Political observers have identified two key reasons why Trump is handing over HUD to Carson. The first is that when Trump sees the word “urban” he thinks “black.” During the campaign, Trump said that “African Americans are living in hell in the inner cities.” So making Carson his first African American cabinet appointment makes sense to him. Of course, nothing reveals Trump’s disdain for black people, or for the poor, more than putting Carson in charge of an agency whose mission—helping lift the poor out of poverty and helping cities and older suburbs stem the tide of private disinvestment—the neurosurgeon opposes. 

Another oft-cited explanation for Carson’s nomination is that during the campaign, Trump cut a deal with the right-wing neurosurgeon—an endorsement in exchange for a cabinet post. During the Republican primaries, Trump attacked his rival Carson as “pathological” and compared him to a child molester, but that didn’t stop Carson from embracing and campaigning for Trump once he secured the GOP nomination.

But there is yet another explanation, which has to do with both psychology and PR, for why Trump named Carson to this post, and it has to do with Trump’s complicated relationship with his father.

Trump inherited from his father, Fred, a real-estate empire worth tens of millions of dollars. Fred Trump had made his fortune by building middle-class housing financed by the Federal Housing Administration (FHA). In the 1930s, the senior Trump built single-family homes for middle class families in Queens and Brooklyn, using mortgage subsidies from the newly created FHA to obtain construction loans. After his real-estate business fell on hard times, he was able to revive his firm during World War II by constructing FHA-backed housing for U.S. naval personnel near major shipyards along the East Coast. After the war, he continued to rely on FHA financing to construct apartment buildings in New York’s outer boroughs.

In 1954, Fred Trump was subpoenaed to testify before the Senate Banking Committee on allegations that he had ripped off the government to reap windfall profits through his FHA-insured housing developments in New York. At the hearings, Trump was called on the carpet for profiteering off of public contracts, including overestimating the construction costs of his projects in order to get a larger mortgages from FHA. Under oath, he reluctantly admitted that he had wildly overstated the development costs of one of these projects, the Beach Haven apartment complex in Brooklyn, by at least $3.7 million.   

One might think that the younger Trump would be grateful to the FHA for enabling his father to become a multi-millionaire. But that would undermine Trump’s campaign to portray himself as a self-made man. He constantly boasts that he built his real-estate empire on his own—although, when pushed, he acknowledges that his father loaned him what he’s called the “small amount” of $1 million. Even that claim was demolished by a Washington Post investigation earlier this year. Not only did Trump’s father provide his son with a huge inheritance, and set up big-bucks trust accounts to provide his son with a steady income, but he was also a silent partner in the junior Trump’s first real-estate projects.

As the Post disclosed, Trump’s father “was an essential silent partner in Trump’s initiative. In effect, the son was the front man, relying on his father’s connections and wealth, while his father stood silently in the background to avoid drawing attention to himself.”

Trump’s father was also his safety net. In a 2007 deposition, Donald Trump admitted that he had borrowed at least $9 million from his future inheritance amid financial difficulties. In effect, the son was on welfare. The money came directly from his father, but indirectly from the government, which had financed Fred Trump’s real-estate business and given him a way to fleece the system to become a wealthy man.

In Donald Trump’s mind, therefore, HUD and FHA are constant reminders that far from being self-made, he has lived a life of entitlement—one that was subsidized by the federal government and his father’s ill-gotten gains. What better way to battle these insecurities than to put a man in charge of HUD who, whether through incompetence or indifference, is likely to undermine the agency’s mission and reputation?

 

THERE’S ANOTHER REASON, also tied to his history with his father, why Trump chose Carson for HUD. One of HUD’s most visible responsibilities, though it consumes only a small part of the agency’s budget, is to challenge racial discrimination by banks, developers, and landlords. This was the mandate of the 1968 Fair Housing Act, passed soon after the assassination of Martin Luther King. In the half-century since then, HUD’s commitment to fair housing has waxed and waned, depending on who was president, but under President Obama the agency has made significant regulatory headway in promoting racial housing integration. Specifically, HUD’s Affirmatively Furthering Fair Housing Rule requires cities to take proactive steps to prevent racial discrimination and segregation.

Trump is well aware that his father frequently ran afoul of the Fair Housing Act. According to the Washington Post, Fred Trump was arrested at a Ku Klux Klan rally in New York in 1927. Fred Trump’s racist business practices prompted the federal government to sue him for denying black families the opportunity to rent apartments in his buildings.

In 1950, folksinger Woody Guthrie, who rented an apartment in Trump’s Beach Haven complex in Brooklyn, even wrote a song, “Old Man Trump,” about his landlord’s racism. The song points out that Trump refused to rent to black tenants in his government-backed Beach Haven apartment complex near Coney Island.

But Guthrie wasn’t the only one to call Trump a racist. During the 1960s and 1970s, the New York City Commission on Human Rights and other fair housing organizations and activists documented Trump’s routine practice of turning away potential black tenants. One New York state investigation discovered that in 1967, there were only seven black families living in the 3,700-unit Trump Village complex in Brooklyn. 

Black families in New York knew that they were unwelcome in Fred Trump’s apartment buildings. They were typically told that his buildings had no vacancies, even when they knew that white tenants had no problem finding apartments in the same properties. The senior Trump used a variety of tactics to keep blacks out of his buildings. If a black person applied for an apartment in one of his buildings, Trump would tell rental agent Stanley Leibowitz to “take the application and put it in a drawer and leave it there,” Leibowitz recalled in a recent interview with The New York Times. The Times also reported that “a former Trump superintendent named Thomas Miranda testified that multiple Trump Management employees had instructed him to attach a separate piece of paper with a big letter ‘C’ on it—for ‘colored’—to any application filed by a black apartment-seeker.”

In 1973, the Justice Department did its own investigation and sued Trump Management for violating the Fair Housing Act for discriminating against blacks. The government named both Fred Trump, the company’s chairman, and Donald Trump, its president, as defendants. Like the scandal surrounding his father’s FHA rip-off, the Justice probe embarrassed Donald Trump, who was just then making his way into New York’s upper social circles and testing the waters of celebrity. Donald Trump called the allegations “absolutely ridiculous,” and said the government was trying to force him to rent to “welfare recipients.”  

Rather than settle the case, the junior Trump hired Roy Cohn, a high-powered attorney who had served as Senator Joseph McCarthy’s red-baiting counsel, to defend him. At Cohn’s suggestion, Trump sued the Justice Department, but the assigned judge dismissed the countersuit. Two years later, the Trumps reluctantly signed a consent decree that required them to desegregate their apartment buildings, including a mandate that Trump Management provide the New York Urban League, a civil rights group, with a weekly list of all its vacancies.

In 1978, however, Justice accused the Trumps of violating the consent decree. “We believe that an underlying pattern of discrimination continues to exist in the Trump Management organization,” a DOJ lawyer wrote to Cohn. But the Trumps outlasted the government’s efforts. Before the DOJ could gather enough evidence to take Trump to court, the original consent decree had expired.

Carson’s public comments about federal housing policy suggest that he shares Trump’s opposition to fair housing rules.  Carson has described fair housing policy as “a mandated social-engineering scheme” that amounts to “government-engineered attempts to legislate racial equality [creating] consequences that often make matters worse.” Carson also told a television interviewer that “poverty is really more of a choice than anything else.”

Such statements reveal that Carson has little enthusiasm for government efforts to help low-income families trapped in poor neighborhoods by the well-documented discriminatory practices of employers, landlords, and banks. Trump is unlikely to ask Carson, or any of the administration’s banking regulators, to strictly enforce the federal Community Reinvestment Act, which prohibits banks from engaging in mortgage lending discrimination. Nor is a Trump administration likely to insist that affluent suburbs engaged in discriminatory “exclusionary zoning” open up their borders to allow developers to build mixed-income rental housing. Indeed, housing advocates worry that Trump, with Carson as a willing accomplice, might even ask Congress to deny HUD funds to enforce anti-discrimination laws.

As HUD secretary, Carson will be responsible for dealing with the nation’s severe housing crisis. But he has little inclination or experience to drive, much less expand, HUD’s mission.

“At a time of rapidly-rising rents and stagnant incomes, HUD can’t continue to keep homes affordable for the nearly five million families, seniors, and people with disabilities fortunate to receive HUD assistance and also contribute to efforts to increase opportunities in poor neighborhoods without budget increases,” says Barbara Sard, a former top HUD official under Obama and now vice president for housing policy at the Center on Budget and Policy Priorities. “The HUD Secretary’s primary responsibility is to fight within the Administration and in Congress for the funding needed. I hope Dr. Carson will not let all these vulnerable people down.” 

But a bigger HUD budget is probably the last thing Trump, or Carson, will ask Congress to approve. If anything, Carson’s HUD will probably run much as the agency did under President Reagan. Reagan’s HUD became a feeding trough for Republican campaign contributors. Fortunately for Reagan, the media didn't uncover what became known as the “HUD scandal” until he left office. It resulted in the indictment and conviction of top Reagan administration officials for illegally targeting housing subsidies to politically connected developers. Given the president-elect’s reputation for deal-making and rewarding political allies, it’s easy to imagine Carson steering HUD contracts to Trump's donors and supporters.

While Reagan was using HUD to reward his political cronies, he slashed the agency’s budget. HUD has never recovered. Unlike Social Security, Medicare, and supplemental nutrition assistance, federal housing aid is a lottery, not an entitlement. Today, only about one-quarter of eligible low-income families receive any HUD assistance. Federally subsidized housing for the poor—both vouchers and low-rent apartment buildings—represents only 3.5 percent of the nation’s 134 million housing units.  

The result is that most low-income and working class families rely on the private market to find housing. That market has become increasingly unaffordable, not only to the poor, but also to many middle-class households. Almost all the new rental housing built in the past decade has consisted of high-end units. In 2015, the median rent of newly constructed units was $1,381—about half the median renter's monthly income. From 2001 to 2014, the number of households paying more than half of their income for housing jumped from 7.5 million to 11.4 million—an all-time high. More than one in four renters now spend over half their incomes on rent. Almost half of all renters pay more than 30 percent of their incomes in rent. Every city has long waiting lists of tenants trying to obtain HUD vouchers or get into public housing.

Having a job is no longer enough. In order to afford a modest, two-bedroom apartment, a renter needs to earn a wage of $19.35 an hour, according to a report by the National Low-Income Housing Coalition. This “housing wage” is much higher in some areas.

A significant cause of the rental-housing crisis has been the foreclosure epidemic, which drove about eight million home-owning families into the rental market. After banks’ predatory and risky practices precipitated the 2008 housing crash, American homeowners lost trillions of dollars in wealth. Millions of homeowners have still not recovered and remain “under water,” meaning they owe more on their mortgages than their homes are worth.

The nation’s homeownership rate fell from a peak of nearly 70 percent in 2004 to 63 percent during the second quarter of this year. As former homeowners have moved into the rental market, they compete with poor and middle-class families for increasingly scarce rental housing, driving up rents.

Against this backdrop, Carson is taking the reins of the one federal agency tasked with keeping Americans from living on the streets. In contrast to his father, Donald Trump has made his name building glittery, luxury housing for wealthy residents. Ironically, what’s needed today is not only more housing subsidies for the poor, but also a return to the kind of government-backed middle-class housing that Fred Trump and many other builders constructed in the two decades after World War II. But don’t count on Trump—or Carson—to push HUD to rise to that challenge.

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