Understanding housing policy, finance, and regulation can be daunting, requiring us to wade through a sea of acronyms, untangle public and private interests, trace knotty financial flows, and decrypt complex bureaucracies. In our new Housing Brass Tacks series, we’re going back to basics to get a grasp on this unwieldy topic. For the first discussion at The Architectural League on January 30, Holly Leicht opened up about one such bureaucracy: the US Department of Housing and Urban Development, where she worked as a Regional Administrator for New York and New Jersey from 2014 to 2017.
HUD has been in the news more than usual lately and housers are wondering what its future holds. The changes underfoot also led us to ask: What does HUD normally do, anyway? It might not be what you thought.
#1 HUD’s not just housing
A Cabinet-level agency established in 1965 by President Lyndon B. Johnson, HUD was originally to be named the “Department of Urban Development and Housing” — but when the National Home Builders Association protested, the phrases were flipped. Part of Johnson’s signature War on Poverty, HUD was founded to improve the health of cities. As suburbs boomed in the postwar era, cities suffered from population loss, fiscal crises, and racial segregation — problems enabled by decades of government policy.
Fifty years on, HUD subsidizes housing, produces policy research, and funds dozens of anti-poverty and community development programs to benefit low- and moderate-income households. In addition to housing programs, HUD works to end homelessness, takes on discrimination, responds to climate change and natural disasters, acts on hazards of lead-based paint, addresses the digital divide, and more.
#2 In fact, HUD doesn’t even build housing (anymore)
HUD suspended all subsidized housing programs in 1973 as President Nixon looked to rely more on the private sector. The federal government hasn’t built new public housing since. Today, only about 1% of the country’s housing stock is owned by federal or state government, according to Leicht, and HUD mostly supports private housing, not traditional public housing. HUD’s considerable involvement in the private housing sector extends from subsidies like Section 8 vouchers and Low Income Housing Tax Credits to the insurance offered by Fannie Mae and Freddie Mac’s underwritten mortgages.
The vast majority of HUD’s funding today goes to Section 8: In 2016, more than $30 billion of HUD’s $47 billion budget was allocated to that program alone. In contrast, about $6.5 billion funded capital and operating costs for public housing. In recent years the move toward Section 8 has continued, as the Rental Assistance Demonstration (RAD) program, enacted in 2012, encourages public housing agencies to convert public housing to permanently affordable Section 8 units through public-private partnerships. The program (which Leicht called a “Hail Mary” to save public housing) allows authorities to leverage private capital toward the $26 billion backlog of capital needs nationwide. In New York City, 40 RAD conversions are currently underway or planned. Here the program is called Permanent Affordability Commitment Together (PACT) (because one acronym is never enough).
#3 And when it comes to housing, HUD’s not just for renters
We may associate HUD most strongly with programs for tenants, but the agency serves people across the housing spectrum.
For those that lack a fixed address, the federal government launched its first comprehensive strategy to prevent and end homelessness in 2010. The plan, called Opening Doors, set ambitious goals for ending veteran homelessness in 2015, chronic homelessness in 2017, and family and youth homelessness in 2020, awarding funds for permanent, transitional, and supportive housing as well as data collection, homelessness prevention, and other programs. At the end of 2015, HUD declared that New York City had “effectively ended chronic homelessness among veterans” — all chronically homeless veterans had been housed, were on a path to permanent housing, or had been offered but refused housing assistance. Overall, however, homelessness in New York City is at its highest level since the Great Depression with more than 62,000 people homeless in the city — three-quarters of whom are families.
#4 HUD is a money tree, and the seeds grow locally
Both HUD’s organizational structure and the way it distributes funding locate a lot of key decision-making outside of Washington. HUD divides the country into ten geographic regions, each of which is overseen by a Regional Director. About two-thirds of HUD’s more than 8,000 employees are located in regional and field offices.
HUD’s major roles include funding, regulation, and technical assistance, mostly leaving the responsibility for program implementation to states and cities. CDBG funds go directly to state and local government — when it was instituted, CDBG cemented HUD’s identity as the “mayors’ agency.” HUD’s major housing subsidies, including public housing and Section 8, are also given local control — here, both of those programs are administered by the New York City Housing Authority (NYCHA).
As another example, take disaster recovery. Following Hurricane Sandy in 2012, New York and New Jersey were the subject of a new type of experiment from HUD, a design competition to improve coastal resiliency. The Rebuild by Design competition “stimulated a lot of interest, but implementation has been tough,” said Leicht. However, seven winning projects are moving forward with about $1 billion of CDBG-Disaster Recovery funds, including SCAPE’s Living Breakwaters project off the coast of Staten Island. (Overall, New York City has received more than $4 billion in specially-allocated CDBG-Disaster Recovery funds.) With revisions, the Rebuild by Design competition became the model for the National Disaster Resilience Competition, which is doling out another $1 billion nationwide.
#5 No one’s sure what’s next for HUD
Lots of American policy is getting a makeover in 2017 under the Trump administration, but other than frequent dog whistles bemoaning the state of America’s “inner cities,” the President hasn’t said much about housing or urban development. (Some are hoping that housing will be included in Trump’s desired $1 trillion investment in infrastructure.)
Neurosurgeon Ben Carson has been nominated as the new Secretary of HUD; many Senators seemed to treat his confirmation hearing as a formality, and Carson will likely be confirmed soon. (“I got to thinking, it seems to me that running this department is not really brain surgery,” said Republican Senator Mike Rounds of South Dakota.) A housing policy neophyte, Carson has yet to set a clear agenda. New York City Council Member Ritchie Torres worries that Carson, who has spoken out against government assistance, might see NYCHA as a “natural target.”
Leicht echoed fears about the future of fair housing enforcement and public housing — “I think the downward trend in funding public housing will continue,” she said, and predicted that Carson’s apparent disdain for fair housing law would find plenty of support among Republicans in Congress. But she also offered a note of optimism: “HUD has a very mission-driven, dedicated career staff. I have concerns about funding cuts, but I don’t have concerns that people are going to fall off and not care about working with their cities. In so much of what HUD does, the rubber hits the road at the local level, not in Washington. People are going to keep doing what they’ve been doing — though maybe with less money. But it’s a visionary place where people want cities to be better, so I’m cautiously optimistic on that front.”
Housing Brass Tacks is an ongoing, biweekly series of informal conversations with scholars and experts engaging complicated topics in housing policy, hosted by The Architectural League. Future conversations will cover homelessness, fair housing, financing affordable housing, and more. Next up on February 13th, unpacking the Affordability Toolbox — we hope to see you there!