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HUD explained

Ben Carson, potential budget cuts, and how federal housing policy works

Star Apartments in Los Angeles, California
An experiment in prefabrication, this series of single apartments, built for the city’s Skid Row Housing Trust, utilized HUD funding.
Michael Maltzan Architecture

During the nascent Trump era, the Department of Housing and Urban Development has been in the news for all the wrong reasons. The president’s choice to run the agency, neurosurgeon and former presidential candidate Ben Carson, has been criticized by housing advocates for being unprepared for the position and under-informed about the role that this massive agency plays in the lives of many Americans. More recently, the Trump administration has just proposed a $6 billion cut in the HUD’s funding.

As a provider of public housing, a highly politicized topic embroiled in a legacy of segregation, HUD already deals in its fair share of hot-debated topics. But its big-picture issues can distract from the agency’s everyday scope, mission, and impact. While HUD’s future is being discussed in Washington, here’s a primer on how the agency was formed and how it operates.

When and how was HUD formed?

The Department of Housing and Urban Development was formed in 1965 as part of Lyndon B. Johnson’s Great Society program. Previous federal housing programs focused on loans and homeownership, such as the House and Home Financing Agency, but this new, cabinet-level agency was created specifically to focus on urban housing issues.

What is HUD’s mission?

The agency was originally tasked with providing “a decent home and a suitable living environment for every American family.” As its current mission statement outlines:

HUD's mission is to create strong, sustainable, inclusive communities and quality affordable homes for all. HUD is working to strengthen the housing market to bolster the economy and protect consumers; meet the need for quality affordable rental homes; utilize housing as a platform for improving quality of life; build inclusive and sustainable communities free from discrimination, and transform the way HUD does business.

An important part of that mission is enforcing the 1968 Fair Housing Act, part of the Civil Rights Act which makes it unlawful to refuse to sell, rent to, or negotiate with any person because of that person's inclusion in a protected class.

HUD offices in Washington, D.C.
Shutterstock

How big is HUD?

The agency has an annual budget of $47 billion for fiscal year 2017, and supports 4.7 million households via rental assistance. The agency employs 8,416 people (as of 2014).

What does HUD do?

The department runs a number of different programs, focused on three main areas: direct rental housing assistance, public housing construction, and community development programs.

The vast majority of the agency’s budget goes toward rental assistance ($38 billion is allocated for the 2017 fiscal year). HUD has a number of programs that provide rental assistance to different populations, often in the form of vouchers. Some of the programs serve low-income residents (Section 8, which asks tenants to pay no more than 30 percent of their income for housing that meets “fair market rent” standards), homeless veterans, elderly (Section 202), Americans with disabilities (Section 811), and programs for Native Americans. This assistance benefits a significant number of Americans.

Trulia rental assistance chart Trulia

HUD also helps local agencies build affordable housing developments, through programs such as The HOME Investment Partnerships Program and Choice Neighborhoods, which invests in redeveloping low-income communities.

Finally, HUD helps provide communities with funds for public programs and redevelopment beyond just housing. Community Development Block Grants and Social Service Block Grants help fund anti-poverty, community building, and local infrastructure projects across the country, with funding going to 1,185 city, county, and state governments. Programs can range from larger infrastructure and neighborhood development projects, such as new city parks, downtown revitalization projects (such as Ozark, Missouri’s $20 million DREAM initiative), or community bike trails, to programs for smaller communities like helping fund or rehab community centers and local libraries. A 2002 study showed that HUD CDBG investments improved neighborhood quality in 17 cities studied, and HUD research showed that for every $1 of CDBG funds spent, an estimated $3.65 is leveraged in non-CDBG funds, creating a catalytic effect.

HUD also operates the Office of Fair Housing and Equal Opportunity, an agency charged with enforcing federal laws against housing discrimination.

Where does HUD operate?

HUD operates all across the country, including in both urban and rural areas, but mostly works by providing state and local agencies with grant money, and overseeing how they use those funds. HUD operates 10 regional offices across the country, which are run by Regional Administrators.

What are some of the critiques leveled at HUD?

Despite the enactment of the Fair Housing Act, housing discrimination has been a persistent issue, according to many housing advocates. A 2010 Government Accountability Act study found that anti-discrimination laws are inconsistently enforced, especially across cities and municipalities, and the National Fair Housing Alliance suggests millions of instances of discrimination happen every year.

Conservatives argue that HUD has made the problems it was meant to solve worse, due to politically motivated policy, weak lending standards, and oversight.

To better enforce these standards, the Affirmatively Furthering Fair Housing Rule, introduced in 2015, asks cities to do more to protect the non-discrimination policies enshrined in the Fair Housing Act. In brief, the rule requires any jurisdictions that receive federal money for housing to document barriers to integration and create plans to overcome them. While the rule has been praised by housing advocates, many conservatives, including Secretary Carson, consider AFFH to be heavy-handed, even go so far as to describe it as “social engineering.”

Due to the funding issues noted above, the nation’s stock of public housing also faces severe maintenance issues. According to a 2010 HUD report, the nation’s 1.2 million public housing units face a massive repair backlog that would takes tens of billions of dollars to fix.

Harvard Joint Center for Housing Studies, Harvard Joint Center for Housing Studies, America’s Rental Housing: Expanding Options for Diverse and Growing Demand, 2016, www.jchs.harvard.edu. All rights reserved

But perhaps the biggest issue facing the organization is the lack of affordable housing. The country is losing 125,000 affordable rental units a year, and assistance is just not keeping pace with the number of families who need it. For instance, the Section 8 program often has long waiting lists to qualify, especially in some of the nation’s most expensive markets.

The federal government’s role in supporting affordable housing peaked in the 1960s and ‘70s, says Stockton Williams, executive director of the Terwilliger Center for Housing at the Urban Land Institute, as a bipartisan coalition that supported the construction of new buildings gave way to cuts from the Reagan administration in the '80s, part of a larger goal to reduce federal spending. Reducing, or not increasing, federal investment in housing has been the general trend since then.

Ben Carson Shutterstock

Why was Ben Carson selected as HUD secretary?

As Curbed’s urbanism editor Alissa Walker wrote when he was first nominated, Dr. Carson was widely viewed as unqualified by housing advocates, since he has never had a role in housing policy or held any position in government. (At one point, Carson himself said he wasn’t qualified for a Cabinet position). An open petition signed by hundreds of academics opposed his confirmation, and former HUD Secretary Julian Castro told NPR that he was “nervous” about a Carson appointment.

But Carson’s lack of direct housing experience is only part of the reason some feel he isn’t the right person for the job. Part of Carson’s political appeal has been his personal story, a tale of great achievement despite growing up in poverty. His policy views reflect this experience: he’s taken an “up-by-your-bootstraps” view that is wary of public assistance, suggesting dependency on HUD programs could become “a way of life” for recipients.

“There are reasonable ways to use housing policy to enhance the opportunities available to lower-income citizens,” he wrote in a Washington Times op-ed in 2015, “but based on the history of failed socialist experiments in this country, entrusting the government to get it right can prove downright dangerous.”

What are the cuts the Trump administration is proposing?

Preliminary budget numbers would slash HUD’s budget by 14 percent. According to a recent Washington Post article, the administration is considering up to $6 billion worth of cuts. This plan would not impact rental assistance programs, or make cuts that would immediately “send families on the streets.” The reductions would come in large part from the public housing capital fund ($1.3 billion cut) and the public housing operating fund ($600 million). The plan would also eliminate the Community Development Block Grant Program, which received $3 billion last year.

Housing advocates have said these proposed cuts would have significant consequences. Marc Morial, CEO of the National Urban League, said this budget proposal signifies the administration’s impending "assault on poor people in America." Crystal Walker, a spokeswoman for the New York City Housing Authority, which helps 600,000 New Yorkers and relies on federal money for two-thirds of its $3.2 billion budget, said, “any additional cuts are going to be very, very serious.”