HUD Is On Romney Campaign’s Chopping Block

Putative Republican presidential nominee Mitt Romney wants to eliminate the Department of Housing and Urban Development. He said so at a fundraiser recently where the remark was heard by several reporters in attendance. Housing Secretary Shaun Donovan was at the Capitol last month pleading with Congress to beef up finding for low income housing construction to keep up with the needs of the struggling American economy in this time of high and prolonged unemployment, with 4.6 million poor families receiving housing subsidies, and another 14.3 million in need of subsidies but not getting any.

Housing aid recipients now pay rents of $25 to $50 per month out of their own meager incomes, and even the Obama administration expects to have to raise that to $75 next year in order to work within HUD’s budget. Dismantling HUD will not only hurt subsidized renters and those living in public housing, but also continue downward pressure on an already struggling housing construction sector of the economy. 

Rationality and Experience to Guide Chicago Housing and Economic Development

Outgoing Mayor Richard M. Daley is intent on leaving his imprint on city government even after he leaves office early next year. He is busy reorganizing the city’s administration in the way he thinks best, and appointing interim heads to new departments, leaving the next mayor to decide whether or not to keep them. Kudos to Daley for one interim appointment announced last week, which should keep economic and housing development moving in all Chicago neighborhoods during the inevitable transition confusion once a new mayor is elected.

Daley appointed 58 year old Andrew Mooney, executive director of Local Initiatives Support Corp. Chicago, to be interim head of the newly created Department of Housing and Economic Development. The new department combines the responsibilities of the former Department of Community Development with the former Department of Zoning and Land Use, except for zoning inspections, which will now fall under authority of Chicago’s building department.

Mooney brings enviable experience in making community development work to his new position. Since it was started in 1980, his organization has invested $150 million in grant money in Chicago area neighborhoods, developing 27,000 housing units and 4.5 million square feet of retail, commercial, and community center space. Mooney’s able leadership has also attracted equity investment totaling $317 million to projects his organization supported, leveraging an estimated $3.7 billion in development throughout the Chicago metropolitan area. Some examples of housing developments succeeding under Mooney’s leadership include the 86 unit Churchview Supportive Living Facility in southwest side Chicago Lawn, the 87 unit Harold Washington Unity Cooperative affordable housing development in West Humboldt Park, and Bronzeville’s 3,000 unit Oakwood Shores development, located just south of Ellis Park.

There are so many candidates for mayor running in the February election that it is impossible to predict the outcome, much less the appointments of department heads a newly elected mayor might make. We can only hope that whichever candidate ultimately replaces Daley has the good sense to keep Mooney’s knowledge, experience and motivation working for Chicago’s neighborhoods after he or she takes over the reins.

Obama Administration To Commit $35 Billion For Mortgage Lending By Local Housing Agencies

Under the authority of the 2008 Housing and Economic Recovery Act, the Treasury Department, Fannie Mae and Freddie Mac are polishing the details of a new Obama administration program to purchase up to $35 billion in municipal debt to be issued by local government Housing Finance Agencies, which provide lower interest mortgage loans to first time and low income home buyers, usually at rates 0.5% to 1.0% lower than commercial lenders in the private sector. The new program is expected to buy $20 million in newly issues municipal housing bonds, plus another $15 million in variable rate demand obligations issued by the HFAs.

HFAs have financed home purchases for about 2.6 million families. Rising interest rates in the municipal bond market have choked off new lending by many HFAs, and as a result, affordable mortgage loans for low income and first time home buyers have dried up, delaying recovery of the housing construction market. While some in Congress object to the reentry of Fannie Mae and Freddie Mac into this segment of the home purchase financing market, the Obama administration seems to have a laser focus on continuing to promote home ownership among the less fortunate as one way of attacking the nation's economic woes. If your business is involved in housing construction, you should be watching eagerly for this program to be launched.

Barney Frank Promises Section 8 Housing Renewal

House Financial Services Chairman Barney Frank announced yesterday, at the annual policy conference of the National Low Income Housing Coalition, that his committee is pushing for legislation to fund continuation of 1 million units of low income housing which would otherwise expire. The Obama administration proposes $1 billion for the housing trust fund created last year, with money coming from Fannie Mae and Freddie Mac. No one knows yet how much of this $1 billion will go towards renovation of the existing units.