You may remember a colorful former member of Congress named Jim Trafficant, who is now in jail. But what you probably don’t know is that he clawed his way up the political ladder in the 1980s, when, as sheriff of Mahoning County, Ohio, he refused to implement home mortgage foreclosures.
Like Trafficant, today’s members of Congress know it is great made-for-TV politics to help overstretched homeowners and make bankers and other “sub-prime” lenders out to be bad guys.
True, Congress could have seen the current surge in foreclosures and defaults coming years ago, and reined in the lenders before this widely predicted crisis. But what burns me up is our government’s continuing obsession with homeownership. The reality is staring lawmakers in the face and they still don’t get it: Homeownership is not for everyone, and it will never make a dent in the rapidly growing gap between rising housing costs and stagnant household incomes. Congress must stop trying to cram every American family into homeownership and start helping developers and local governments preserve and develop affordable rental housing.
In our last issue, I wrote about the growing need for workforce housing. I said it couldn’t happen without help from state and local housing agencies. But it also requires a very big assist from the federal government.
The first thing Congress must do is reform and streamline the Department of Housing and Urban Development (HUD). Ever since its creation in 1965, HUD has had problems, and they have gotten worse year by year. This is largely because of inept HUD leaders, but also because of Congress, which alternately ignores HUD or tries to bury it in red tape.
The agency is mired in bureaucratic inertia, with a shrinking number of qualified employees running programs that are generally, considered archaic, too heavily regulated, and too inflexible.
A large number of real estate professionals, including Republicans, tell me the Bush administration has allowed HUD to sink even further into dysfunction and wasteful spending. Many say they won’t do business with the agency, and many who have tell me they will not do so again.
It is tempting to write HUD off as a lost cause. However, I believe it has a very important role to play in solving our nation’s housing problems. I believe it can be made functional again if the next president appoints a principled and skilled professional to run it. HUD must start facilitating the work of state and local housing agencies and the low-income housing tax credit. It must make Federal Housing Administration mortgage insurance viable once again.
The first presidential primaries are just seven months away, and by next March, we’ll probably know which two candidates will face off in the November 2008 presidential election. This is your chance to call the contenders out on housing issues and make your support contingent on their answers. Write to your members of Congress too. Let them know it’s time to rebalance federal housing policy and promote rental housing, including reforming HUD.
To find out more about what’s happening at HUD and what needs to be done to fix it, read the in-depth package of articles we recently published in our sister publication, Affordable Housing Finance magazine. E-mail me at email@example.com to receive a copy of the articles, or look for them online.