The U.S. Department of Housing and Urban Development’s secretary, Shaun Donovan, entered his job as a “housing rockstar” with degrees in engineering, architecture, and public administration from Harvard, but his passion for affordable housing has been sharply rerouted thanks to the housing crisis he’s had to deal with for the majority of his tenure, reports Politico.
“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,” the article reads, going on to quote multiple financial and economic experts who agree that Donovan likely wasn’t expecting this when he stepped into the HUD secretary shoes, and probably hasn’t had much of a say in outgoing policies.
As the Obama Administration tries to resolve the housing crisis, it’s rolled out one program after another, most of them centered on dealing with banks, mortgage insurers and finance companies, says Politico, and while Donovan has been “at the table” for these policies, it appears that the Treasury secretary Timothy Geithner has exerted more influence on administration policy.
Donovan himself admitted that there’s still a “long way to go” in terms of the housing situation, but believes steps taken by HUD and the White House slowed the torrent of foreclosures to a stream, reports Politico.
However, the administration seems to keep bailing out the boat rather than plugging the leak. Case in point: the $700 billion Wall Street bailout program gave assistance to big corporations, “squandering” an opportunity to help struggling mortgage holders, believes Neil Barofsky, the special inspector general of the program.
Meanwhile, the Obama Administration’s Home Affordable Modification Program has not saved several million distressed homeowners, as it was predicted to do, instead helping far fewer, with the number of homeowners utilizing the program dropping each month. Programs are rolled out that treat symptoms of the crisis, like foreclosure, but ignore underlying causes, the article says.
Because of the troubled market, distressed homeowners and prospective first-time buyers opted for rental housing instead, reports Politico, and this spike in demand had a domino effect of driving up rents and driving out middle- to low-income renters, effectively “swamping the affordable-housing agenda that many housing advocates had hoped Donovan would champion.”
He hasn’t really had a chance to work on “smart housing policy” that should include programs to lift people from poverty, which Donovan believes are necessary to prevent “class warfare,” Politico says. Despite his relative lack of action in this arena, Raphael Bostic, HUD assistant secretary for policy and research, stood up for his boss.
“Until the patient is stable,” he is quoted as saying the in article, “we can’t get into rehabilitation. We’re still down the road from where we were, though.”
While Donovan acknowledges that the “job isn’t over,” he disagrees that HUD policies are out of sync or ineffective, says Politico, adding that new programs are under way to help unemployed delinquent borrowers catch up on mortgage payments as well as address the jobs-housing nexus through a plan to hire people to fix blighted communities.
Read the full Politico article here.
Written by Alyssa Gerace