Dr. Ben, HUD, and Speaker Ryan

Posted: December 27, 2016 in Uncategorized

Surgeon Ben Carson, who during his presidential campaign struggled to understand even the most basic details of public policy, will now administer the Department of Housing and Urban Development (HUD), which oversees federal housing and development assistance in communities while furthering homebuilding and mortgage lending. Among HUD’s six core functions are the ownership of public housing (administered by local Public Housing Authorities), the provision of housing subsidies for low- and moderate-income families, and the allocation of community development grants to States and localities.23carson-hp-master768

It is unclear whether Carson’s own impressive journey out of childhood poverty included a stint in subsidized housing or not. But his expressed values about housing and public assistance leave little doubt that his approach will see poverty as a product of individual failings and misguided government programs, rather than the offspring of a failed economic system.

In May 2015, he said “Many people are critical of me because they say, ‘Carson wants to get rid of all the safety nets and welfare programs even though he must have benefited from them.’ This is a blatant lie. I have no desire to get rid of safety nets for people who need them. I have a strong desire to get rid of programs that create dependency in able-bodied people.”

While the financial markets have structured itself around and become dependent on HUD programs like mortgage insurance, distressed asset (foreclosed homes) stabilization, and government-sponsored enterprises like Fannie Mae and Freddie Mac, institutional dependency surely will not be Carson’s focus.

His inexperience and expressed values make him likely to embrace and follow House Speaker Paul Ryan’s “Better Way” vision of HUD that begins with the assumption that government programs are the problem and “If you are capable, we will expect you to work or to prepare for work.”paulryan

Ryan’s vision was the product of a Republican Task Force on Poverty, Opportunity, and Upward Mobility, released in June, 2016 as a blueprint for a new Republican Administration. This included HUD-related recommendations such as

  • Local jurisdictions administering housing assistance using the same rules for recipients as states mandate for TANF beneficiaries, such as work requirements, educational training, and time limits for benefits.
  • Permitting non-profits “and other cost-effective service providers” to administer vouchers.
  • Efforts to involve public housing residents more in the operation and management of their homes to “foster a culture of engagement in economic self-sufficiency.”
  • Giving states more flexibility to design and tailor programs with the help of local partners and nonprofits. (The Task Force proposed allowing states to “test ways of repackaging welfare benefits to reward desired outcomes.”)
  • Consolidating various programs in general terms and consolidating the U.S. Department of Agriculture’s Rural Housing Service rental assistance program and HUD’s Housing Choice Voucher program since they have “almost identical goals.”
  • Funding programs based on evidence-based policymaking, including testing programs on a smaller scale and expanding them only if they prove effective.
  • Using a pay-for-success or social-impact financing model.
  • Redirecting program funding towards evaluations or data collection; and expanding the availability of data and information.

Block Grants

Carson will be under pressure to use his surgeon scalpel on HUD programs as he teams with Ryan. Trump has advocated lifting federal budget sequestration requirements on defense spending and his alt-right ego, Steven Bannon, already is pushing a trillion dollar infrastructure plan. A share of this money will, no doubt, come from HUD.

In the prior two years, Ryan advanced plans to consolidate many of HUD’s programs [Community Development Block Grants (CDBG), HOME Investment Partnership Program, Section 8 vouchers] with Food Stamps (now called Supplemental Nutritional Assistance Program) into an “Opportunity Grant” that would give states the flexibility to match poverty fighting programs with family needs. The Center for Budget and Policy Priorities effectively critiqued this approach both in 2014 and 2015, saying it would jeopardize basic nutrition assistance for poor children, tempt states to use block grant funds to supplant state and local funds going for similar services, and begin a gradual funding decline over time.

Farm, food, and moral constituencies may keep Food Stamps out of a Block Grant, but it’s difficult to see how HUD programs could escape. The progressive decrease in resources that accompany block granting will continue the federal withdrawal from affordable housing and community development.

Federal CDBG and HOME assistance monies have been progressively dropping during the last two decades. New public housing hasn’t been built since the 1970s, and the neo-liberal “trickle down” approach to housing and development has been bi-partisan. Clinton’s HOPE VI program eliminated much of public housing it in the late 1990s, and Obama’s Rental Assistance Demonstration (RAD) program has allowed privatizing a good portion of the rest.   As the Task Force recommended encouraging new innovative housing models using “nonprofits and the private sector,” it is likely this privatization will continue.otherpublichousing

The new piece of block granting, however, will involve housing vouchers and a TANF-like time limit on voucher use and public housing residency. This will be as disastrous as time-limiting welfare. As only 25% of the poor currently receive housing subsidies, the proposal is simply musical chairs, giving alternating households a brief respite from the rising rents caused by private market housing speculation, while the other hand of HUD incentivizes this speculative investment through its insurance and lending assistance.

Voucher Portability But Diminished Fair Housing Enforcement

The Task Force also called the system of 3,000 Public Housing Authorities (PHA) “fragmented,” and noted some suffered from “mismanagement and corruption.” There is little to dispute there. Interestingly, it criticized PHA’s unwillingness to embrace voucher “portability,” which allow housing voucher holders to move beyond PHA jurisdictional boundaries. While this should hearten “Housing Mobility” advocates, Carson also controls another aspect of mobility that has raised the ire with conservative suburban constituents: the enforcement of Fair Housing laws.

That enforcement was buttressed by the June 2015 U.S. Supreme Court decision (with Justice Scalia) in Texas Department of Housing and Community Affairs v. The Inclusive Communities Project, which upheld “disparate impact” as a means of proving housing discrimination under the federal Fair Housing Act.

The Obama administration followed the Texas ruling with a revised Affirmatively Furthering Fair Housing regulation, and encouraging signs that HUD might leverage its federal money to open counties long resistant to low-income affordable housing.   A key next step in the works–a HUD promulgated Fair Housing Assessment Tool–could be scrapped by the new Administration. While HUD may continue to exhort Fair Housing, it is doubtful that Carson would use its enforcement tools on white suburban constituencies that played a key role in Trump’s election. Advocates may have to be content with their own Fair Housing litigation efforts for the next four years, and hope courts will put some teeth into monitoring and compliance with foot dragging jurisdictions, such as Westchester County, NY.

Opportunity: Subsidy Retention and Community Control

The coming further withdrawal of federal housing and development resources comes as no surprise to human rights advocates in cities like Baltimore. In Community + Land + Trust: Tools for Development Without Displacement, the Baltimore Housing Roundtable and NESRI cited already declining federal funds in calling for Baltimore City government to fill-the-gap by subsidizing community-based development and permanently affordable housing. The initiative asks the city to commit $20 million in general obligation bonds annually to employ community residents to deconstruct, demolish, and green vacant properties, and another $20 million annually in bonds to create permanently affordable (shared-, limited- or zero-equity housing). The Roundtable and its anchor organization, United Workers, have commenced a yearlong mobilization around this 20/20 vision, seeking city funds in Baltimore’s FY2018 budget.

The limited and shared equity approach embraced by Baltimore human rights advocates maximizes the impact of any public subsidy—federal, state, or local—by tying it to the property at issue, rather than the household. Vouchers, homeownership subsidies, and even developer subsidies for both rental and ownership currently allow individual landlords, homeowners, and developers to turn a profit, and exit neighborhoods while pocketing public subsidies and the equity from increased property values facilitated by the subsidy.community-land-trust-20151130

As federal subsidies become scarcer, more attention and resources must be given to “subsidy retention” models such as Community Land Trusts, Limited and Zero Equity Co-operatives, as well as deed-restricted home ownership. Vouchers, even if they become time-limited, should be used exclusively with non-profit housing providers committed to permanent affordability and community control.

The flexibility of Block grants could be combined with the call by Republican Task Force to involve public housing residents in the operation and management of their projects.   As public housing under RAD in Baltimore was sold to private developers, some advocates asked the Housing Authority to give public housing residents the opportunity to convert their housing to limited equity co-operatives or Community Land Trust housing.   A successful demonstration project along these lines could lay the groundwork for a new era of public housing—resident and community controlled, absent statist bureaucracy and the baggage of the past.

Federal funds, however, are key to even a transformed, community controlled and non-profit housing sector. As grant funds diminish, our efforts to make visible existing federal spending through “invisible” government housing programs such as tax expenditures (mortgage interest deduction), mortgage insurance, low income housing tax credits most continue, combined with expansion to those most in need. Renters’ tax credits in states like Maryland, for example, could be expanded and made refundable.

This targeted universalism is at the heart of the “Fair Development” approach to housing and development used by human rights advocates in Baltimore. Human rights principles of equity, participation, transparency, and accountability also are pillars of guidance.

Unlike Dr. Carson and Speaker Ryan, the Baltimore human rights advocates see equity as more than simply opportunity. Understanding that structural racism and inequality have shaped the cities and neighborhoods that are targets in many HUD programs, we have defined equity as including equality of opportunity and outcome, prioritizing populations and communities with greatest need.

And unlike Carson and Ryan, we see accountability as more than simply personal responsibility or “social impact” assessment. Understanding that the private market is accountable for the unequal distribution of property and capital that is the root cause of poverty, we demand a new human rights economy that meets fundamental needs, and where government and private actors are held accountable for failing to produce the housing, work with dignity, education, health care, and income security that are necessary for all of us to thrive.

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