HUD’s Future May Include Relaxed Standards, Fewer Rules And Expanded Opportunity Zones

Scott Turner, a 52-year-old former Texas lawmaker and opportunity zone advocate, has been tapped to lead the Department of Housing and Urban Development at a time when housing costs and inflation have become politically divisive issues.

But if confirmed, the new HUD secretary’s early days are likely to be a balancing act.

Turner is expected to inherit Biden administration-proposed reforms that are broadly supported by the real estate sector. If confirmed, he could be tasked with implementing those policies while simultaneously executing President-elect Donald Trump’s agenda at HUD, which is widely expected to focus on deregulation and reviving old incentive programs. 

The outstanding proposals from President Joe Biden would loosen HUD's lending standards for the first time since 2010, when they were tightened in the wake of the Great Recession. 

The new rules would include lower debt requirements for HUD assistance on all types of housing. The changes are relatively modest — the maximum loan-to-value ratio for an affordable development would move from 87% to 90% — but they translate into large sums when building hundreds of units.  

“Even that small change means several million dollars in proceeds that the developer doesn't have to look for in equity,” Northmarq Vice President for Multifamily Debt and Equity Lena Nepryntseva said.

HUD recently closed a public comment period on the policy changes, but there is no specific timeline for the agency to adopt the changes. Mortgage brokers widely expect the reforms to be approved, but the decision could end up in Turner’s hands if the loosened guidelines aren’t approved before Inauguration Day. 

Turner isn’t entirely new to HUD. His last role in government began in 2019 when he was chosen as the executive director of the White House Opportunity and Revitalization Council, an agency group that existed until 2021 under the leadership of then-HUD Secretary Ben Carson, who is also Turner’s longtime mentor.

The council was responsible for promoting Trump’s opportunity zone program, which provided steep tax incentives to developers investing in projects in areas the government had identified as economically distressed. 

The program is scheduled to sunset in 2026, but Trump’s reelection has sparked conversations in real estate circles about its possible expansion, not least because the president-elect highlighted Turner’s opportunity zone work when announcing his nomination.

“Under Scott’s leadership, opportunity zones received over $50 Billion Dollars in Private Investment,” Trump wrote in a statement on Nov. 22. 

The program’s structure, which included benchmark dates to have committed a certain amount of capital, means it can’t easily be lengthened. But developers and investors are expecting a similar program to sprout up in the next administration.

“Instead of extending, it’s more like ‘opportunity zones 2.0,’” Mortgage Bankers Association Associate Vice President of Commercial Real Estate Megan Booth said. “They might come up with a similar program, but tweaked in some different ways to make it more useful across the country.”

Turner’s past work at HUD was highlighted by several industry groups that released statements after his nomination. The National Housing Conference, a nonprofit organization focused on affordable housing, said the expansion of the opportunity zone program could be a key facet of the Trump administration’s approach to housing policy. 

“He has been a vocal advocate for the opportunity zone program and we anticipate working with him to extend and expand the program to incentivize the construction of housing affordable to first-time home buyers, especially first-generation homebuyers,” CEO David Dworkin said in a statement. 

The incoming Trump administration hasn’t said anything about opportunity zones since the election, and the transition team didn’t respond to Bisnow’s request for comment. 

But the nomination will give Turner the opportunity to continue work that Carson had started at the housing authority, Turner said in a statement posted by Dallas-based developer JPI, where he has been chief visionary officer since June 2023.

“I am deeply honored by this nomination to serve as Secretary of HUD and humbled by the opportunity to walk in the legacy of my dear friend and mentor, Secretary Ben Carson,” Turner said. “This role represents a divine occasion to continue the work I am most passionate about — creating environments where Americans and their communities can, and will, thrive.”

The change in administrations will give Turner the opportunity to pull back some Biden-era regulations that have been stifling development in the affordable housing space, Booth said.

In the last four years, new environmental rules have been added to HUD projects along with a requirement to build to a code standard that is higher than what is required in most states, she said. Together with an already cumbersome approval process, the regulatory framework costs millions of dollars to navigate. 

Rolling back those rules would create tens of thousands of additional housing units each year, according to Booth. In a statement congratulating Turner on his nomination, the National Association of Home Builders also highlighted deregulation efforts as a way to tackle housing affordability. 

“The nation’s home builders stand ready to work together with HUD to roll back costly regulations and implement policies that will provide affordable homeownership and rental housing opportunities for all Americans,” NAHB Chairman Carl Harris said. 

Turner’s private sector experience includes executive roles at JPI and Addison, Texas-based software company Systemware. He was also the founder and CEO of the Plano, Texas-based nonprofit Community Engagement & Opportunity Council.

Before Trump tapped him for the opportunity zones council in 2019, Turner spent four years as a member of the Texas House of Representatives starting in 2013. He has also served as an adviser to the America First Policy Institute, a Trump-affiliated think tank.  

Turner was a seventh-round draft pick by the Washington NFL franchise in 1995, where he played for three seasons before stints with the San Diego Chargers, which now play in Los Angeles, and Denver Broncos.

At the end of his career in 2004, he had played in 101 NFL games, making 89 tackles and intercepting five passes. 

If confirmed by the Senate, Turner will be tasked with tackling a housing affordability crisis that has only worsened since he first worked for HUD, along with systemic issues that have long dogged the nation’s public housing system. 

In its statement on Turner’s nomination, the National Fair Housing Alliance highlighted the record number of housing discrimination complaints that have been filed this year while warning against the steep budget cuts at HUD that were part of Trump’s first administration. 

“Our obligation is to hold every presidential administration accountable for ensuring the promise of fair housing for all is upheld,” NFHA CEO Lisa Rice said. “We stand ready to defend any attempt to weaken existing fair housing and civil rights protections. Now is the time to advance fair housing opportunities for everyone, not just some.”