President Donald Trump has begun his second term. This week, Mr. Inman will dig into what we know about the administration’s housing policy, from the privatization of Fannie Mae and Freddie Mac to how it will deal with the real estate industry’s mounting antitrust problems. Part 3 tomorrow will outline Trump’s plans to privatize Fannie Mae and Freddie Mac.
The Department of Housing and Urban Development was created in 1965 to consolidate the authority of five federal agencies: the Federal Housing Administration, the Public Housing Administration, the Federal Home Mortgage Association (Fannie Mae), the Urban Renewal Administration, and the Community Facilities Administration. This is because the country is beginning to feel the effects of an outdated and deteriorating public housing system.
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However, the civil rights movement gave HUD the additional responsibility of enforcing fair housing laws.
When President Lyndon B. Johnson signed the Act into law on April 11, 1968, he said, “Fair housing for all, for every human being in this country, is now an integral part of American life.” It’s part of the style.”
Each of the 10 administrations since Johnson has treated HUD and its fair housing mandate differently. For example, HUD’s budget was cut in half during President Reagan’s first year in office, significantly weakening the department’s Section 8 program, which provides rental assistance to poor households. A few years after President Reagan left office, it was revealed that HUD funds had been given to Republican consultants in an incident known simply as the “HUD scandal.”
Meanwhile, the Clinton administration spent $8 billion on homelessness subsidies from 1993 to 2000, compared to what the Reagan and first Bush administrations spent from 1987 to 1993. It was a record amount.
Scott Turner Credit: America First Institute for Policy Studies
During President Trump’s first term, the president slashed the HUD budget, reversed Obama-era policies to increase and streamline reporting on housing discrimination, overhauled the voucher system to reduce the number of eligible households, and increased devastation through Opportunity Zones. The focus was on regional revitalization. program.
The administration has largely failed in its attempts to reverse Obama-era policies. This time, however, they are more likely to be up to the task.
HUD Secretary nominee Scott Turner spoke during his January 16 confirmation hearing about budget cuts, relaxing zoning regulations and fees, limiting the number of Section 8 vouchers, establishing work requirements for voucher households, and President Trump He expanded the Opportunity Zone program that he spearheaded during his first term. Turner also said he supports fair housing rights, but did not comment on specific policies.
“HUD is failing, so to speak, in its most basic mission, and that has to end,” Turner said. “Being an ambassador and voice for HUD and making the most of the budget given to us, I am committed to interacting with the President and Congress.”
What worked and what didn’t work during President Trump’s first term
Agenda 47, which details President Trump’s policy initiatives for his second term, does not mention HUD, and the president-elect nominates Scott, a former Texas congressman and executive director of the White House Council on Opportunity and Revitalization. He has little comment on the department’s plans other than to say that he will. Secretary of Housing Turner. Turner, who currently chairs the Center for Educational Opportunity at the America First Policy Institute, worked closely with former Housing Secretary Dr. Benjamin Carson on a 2017 program to encourage investment in blighted areas.
The Opportunity Zones program provided tax breaks for developers who invested their realized capital gains in projects across 8,700 designated zones. Developers have accepted this program. However, the past seven years have yielded mixed results.
In 2019, multiple analyzes revealed that home values in most Opportunity Zones continue to be below the national average. That’s because developers were accused of exploiting loopholes to receive tax benefits, such as a billionaire art collector using the program as an alternative to a 1031 tax exchange, which never realized the actual price. . Long-term investment in the zone. Home value growth in these areas will finally catch up to the national average in 2022, as a once-in-a-lifetime drop in mortgage rates fuels a buying frenzy.
Outside of the Opportunity Zones program, during President Trump’s first term, HUD removed anti-discrimination language from its mission, increased household rent obligations from 30 percent to 35 percent, and calculated that obligation on a daily basis. promoted several controversial proposals to overhaul the Section 8 voucher program by There are several metrics, such as measuring gross income instead of adjusted income.
The administration also focused on policies and practices that have an unintended discriminatory impact on classes protected by the Fair Housing Act, such as race, color, religion, sex, disability, and familial status. It also drew criticism for seeking to change HUD’s 2013 disparate impact rule. status, nationality, etc.). Carson proposed several changes that would shift the burden of proof from defendants to plaintiffs, but housing advocates argued the measures would deter plaintiffs from reporting potential discrimination. A federal court blocked HUD from making the proposed changes in October 2020.
Although Mr. Carson could not change a variety of impacts, the Obama-era Affirmative Fair Housing Evaluation (AFFH), which requires all local, state, and public housing authorities to use the Obama-era Affirmative Fair Housing Evaluation tool, ) successfully abolished the rule. The tool used HUD data and surveys to help leaders identify “patterns of integration and separation.” areas with racially and ethnically concentrated poverty; Disparities in access to opportunity. Disproportional housing needs and drivers of those problems. ” The Biden administration reinstated AFFH in 2021.
Second chance to minimize HUD
Housing experts and political commentators predict that HUD’s future will resemble the next president’s first term. Although President Trump did not choose Carson to lead HUD for a second term, the former secretary wrote a section on the department for the Heritage Foundation’s Project 2025. During his campaign, Trump called sections of Project 2025 “stupid and awful.” However, he has now changed his attitude and has come to trust Carson’s recommendations more.
Former HUD Secretary Ben Carson |Credit: HUD
In Project 2025, Carson suggests that President Trump will spend his first year in office “identifying and reversing all the actions the Biden administration has taken to advance progressive ideology.” This includes the AFFH Regulations and the Real Estate Appraisal and Valuable Equity (PAVE) Task Force. It was established in 2021 to investigate the causes and extent of assessment bias and develop policies to eliminate ethnic and racial bias in assessment processes.
The former Secretary also endorsed HUD’s climate change initiative to reduce carbon emissions, upgrade infrastructure to withstand climate disasters, and eliminate environmental and health risks in underserved communities. It was also proposed that it be abolished.
Mr. Carson said President Trump’s policies include eliminating the Housing Supply Fund, increasing FHA’s Mortgage Insurance Premium (MIP) for products with terms longer than 20 years, and denying mixed immigrant status households access to public housing vouchers and assistance. In the first year of the project, 11 recommendations were made.
In the long run, Carson proposed significantly minimizing HUD by selling land owned by public housing corporations to private developers and giving each household a voucher to compete in the private market. . These vouchers will only be provided to households for a limited time to “move households towards self-sufficiency,” he said.
While Mr. Trump and Mr. Carson’s HUD initiatives largely failed in their first terms, housing advocates say the president-elect’s administration is likely to be more successful this time around.
“The agenda is much more structured than it is now,” Peggy Bailey, executive vice president of policy and program development at the Center on Budget and Policy Priorities, told NPR. “We expect some pretty significant budget battles.”
Bob Greenstein, a fellow at the Brookings Institution and founder of the Center on Budget and Policy Priorities, said working-class households are likely to suffer the most if Congressional Republicans succeed in cutting HUD’s budget and reach. . “We should expect a significant increase in both the extent of poverty and the depth of poverty,” he told NPR. “The people who will be hardest hit are working-class families, the very people who are now part of the workforce. [Trump’s] political foundation. ”
light of hope
Many of the nation’s largest housing advocacy groups, including the National Low Income Housing Coalition, the National Housing Law Project, and the National Fair Housing Alliance, say they are preparing for the fight of their lives during President Trump’s second term. Ta.
Diane Yentel | Diane Yentel Credit: X
“As we did under the previous administration, the National Low Income Housing Coalition (NLIHC) is mobilizing our members and partners across the country and working closely with advocates in Congress to address the brutal and devastating challenges President-elect Trump and his administration have delivered. We oppose harmful policies that undermine housing justice, exacerbate racial and social inequality, and worsen America’s housing and homelessness problems,” said Diane Yentel, former NLIHC president and CEO. said in a statement after voting day. “NLIHC and our partners were successful in defeating many extreme policies during President Trump’s first term, and we are ready to do the same now.”
“NLIHC is also, as always, excited about the potential for agreement with all policymakers to advance solutions that protect tenants, alleviate the housing crisis, and advance racial and housing justice.” I’m going to look for a field,” she added.
Although most housing advocates generally oppose the Trump administration’s approach to HUD, the president-elect’s sweeping vision to loosen zoning regulations and utilize unused federal land for housing is a Some say it could be used to benefit Americans.
“The new Trump administration will likely pick up where the first Trump administration left off,” said Dennis Mucha, executive director of the National Rental Housing Association. told Housing Finance. “However, given that housing affordability has emerged as a top issue in the 2024 presidential election, I believe the Trump administration will place more emphasis on housing supply than it has in the past. They are likely to once again focus on removing regulatory barriers as part of their housing strategy.”
David Dworkin, CEO of the National Housing Council, added: There is broad bipartisan support for housing action in Congress. We look forward to working with the new administration on regulatory reform efforts to increase the productivity of housing development. ”
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