With Key Positions Remaining Unfilled, Housing Experts Decry Lack Of Guidance From HUD

Eleven months into President Donald Trump's administration, the department that oversees federal housing programs still has several key vacancies, and local housing officials and experts are growing increasingly concerned about the combination of a lack of guidance from the top and insufficient funding.

Ben Carson was confirmed March 2 as the Secretary of the Department of Housing and Urban Development. The retired neurosurgeon, who had no professional experience in housing or government, has had nine months to familiarize himself with the department, but many of those who would advise and assist him have yet to take their positions. 

Of the 13 HUD positions requiring Senate approval, just four nominees have been confirmed, according to the Washington Post's nominations tracker. Another six nominees have yet to receive a Senate vote, and Trump has yet to appoint a nominee for an additional three positions.

"There just aren't people in place at a sufficiently senior level to provide the secretary with advice and guidance about policy," federal housing policy expert Douglas Rice said. 

Rice, a senior policy analyst for the Center on Budget and Policy Priorities whose work focuses on federal housing policy, said this makes it difficult for the department to develop new initiatives and make decisions with long-term implications. 

"My sense is that a lot of divisions inside HUD are without leadership now, and so this makes it very hard for staff to do anything other than just basic maintenance of HUD programs and initiatives," Rice said. 

At a public event earlier this month, New York City Housing Authority Chair Shola Olatoye criticized Carson for what she saw as a lack of policy direction. 

"We have not seen a clear policy vision from this HUD secretary about the future of some 2 or 3 million households across this country," Olatoye said, according to The Real Deal. "I find it almost unconscionable that we could be almost a year into this administration and not have a clear sense of how agencies such as NYCHA and the other 3,200 public housing agencies are meant to operate, given the significant capital need that we’re faced with."

D.C. Housing Finance Agency Chairman Buwa Binitie, who also runs affordable housing development company Dantes Partners, shares Olatoye's concerns.  

"There is zero guidance," Binitie said. "Unfortunately, it's just not a priority item for this administration, and everything they've done thus far is an indication of that." 

Local housing authorities have also received fewer federal dollars this year, reducing the number of affordable housing units they can create. HUD notified NYCHA in March it planned to reduce its contribution to the agency by 5% in 2017. Binitie said D.C. has also received a smaller appropriation this year, though he could not provide exact numbers. 

"We've seen a drastic decrease from years prior," Binitie said. "Since this administration took over, the contribution or appropriation is dramatically less than what it was before." 

Of the relatively few major policy changes Carson has made, Rice said one of the most impactful has been his decision to suspend an Obama-era initiative that aimed to make housing vouchers more fair. The program, called Small Area Fair Market Rents, determined subsidies at a ZIP code level, rather than at the metropolitan area level, in order to help voucher users live in neighborhoods with more economic opportunity.

"They had implemented this for 23 areasm and Secretary Carson came in and immediately suspended this rule, which really runs counter to the whole goal of expanding opportunity for families," Rice said. 

There was good reason for concern about Carson's nomination, given his lack of background in the industry, Rice said, but he commended the secretary for making an effort to learn about these areas and promote the department's initiatives. 

"My sense is the secretary arrived at HUD and was pleasantly surprised to discover that HUD has already been doing important things in these areas for many years," Rice said. "To his credit, he's been highlighting some of those." 

While he has heard positive messages from Carson about improving housing opportunities, Rice said the administration's actions have not always matched its words. 

"The budget request for 2018 included massive cuts in a wide range of programs that provide families with that kind of affordable housing and stability that really forms a platform for them to do anything in their lives," Rice said. "So there is a real disconnect between the rhetoric about improving outcomes for families [by] expanding opportunities and really cutting out from under them the primary kinds of rental assistance and other support that are a precursor for many of these households to make progress."

The policy shift that could have the most impact on affordable housing has been playing out not at HUD, but in the halls of Congress. The version of tax reform the House of Representatives passed would have eliminated private activity bonds, a key tool for affordable housing creation. An analysis done by accounting firm Novogradoc & Co. found these changes would reduce the future supply of affordable housing by more than a million units.

But the Senate bill kept PABs in, and it appears the final compromise bill that emerged from the conference committee Friday also preserves the bonds, a big victory for the affordable housing industry. Still, Rice said lowering the corporate tax rate could have a negative impact on tax credit pricing, and speculation over the move has already hurt the market this year. 

"There is a lot of evidence around the country that transactions involving tax credits have been put on hold or delayed, or investors are requiring richer transactions because of the expectations created by tax reform," Rice said. "That certainly had a chilling effect in affordable housing development this year."