Over the past decade, Fannie Mae and Freddie Mac transformed themselves into some of the worst-run companies in recent history. But contrary to current talking points, the firms' failings had almost nothing to do with their programs for low-income borrowers. As policymakers debate what should be done with the mortgage giants, a battle is now beginning in which the very availability of affordable housing for the middle class may be at stake.
The Obama administration will prove that they have a plan to do something about the housing crisis by holding a housing conference next week, in DC. The event, called the "Conference on the Future of Housing Finance," has been organized by the Department of Housing and Urban Development and the Treasury Department. Panelists include... well, a bunch of economists, finance industry representatives, bank officials, think tankers, and an academic or two. Not included: Any actual consumer advocates or community group representatives.
We've got PIMCO, Wells Fargo, the goddamn American Enterprise Institute, the MacArthur Foundation, Moody's, and Bank of America. But:
"Apparently being a community organizer qualifies you to be president, but it's not good enough to be part of HUD and Treasury's think tank on housing," said [National Community Reinvestment Coalition] chief executive John Taylor, whose group works with hundreds of community organizations to promote access to financial services for low- and middle-income people.
The fact that the Obama administration is assembling a bunch of credentialed but cloistered experts to solve the housing crisis without input from people actually on the ground with those affected by the housing crisis is, sadly, not that surprising.
Why is not surprising? Because the HUD Secretary has qualifications barely more impressive than Education Secretary Arne Duncan. Well, not really. He's got a master's in architecture, and he worked for HUD in the Clinton administration, so he actually has some relevant experience. But just like Arne, he's presided over a big-city neo-liberal public/private disaster under New York City Mayor Michael Bloomberg, "Which should've immediately disqualified him," Pareene noted, going on to explain:
The Bloomberg administration has a wretched and largely ignored history of promising affordable housing and never delivering. (Not to mention the worst failure of the Bloomberg era: homelessness. It was at historically high levels even before the great financial crisis and no serious attempts at ameliorating it ever developed.)
The Bloomberg housing plan was to give land to private developers, for pennies, in exchange for the promise to build affordable housing for middle and low-income families, and then just not do anything, at all, when the developers simply ignored their promises and built nothing but luxury units. This happened on the Williamsburg waterfront, and it's happening right now near my neighborhood at the Atlantic Yards. Those developments are the norm, not exceptions. Shaun Williams never should've been appointed to run housing policy for the entire nation.
The link there goes to a Daily News article from a year ago Friday:
The Bloomberg administration never checked to see if developers who got discounted city land in exchange for building affordable housing kept their end of the deal, the Daily News has learned.
The Cornerstone Program was supposed to transfer vacant city-owned land to private developers who promised to build 2,191 homes there, with 1,510 units designated for low-or middle-income New Yorkers.
Yet the Department of Housing Preservation and Development has not followed up to see whether developers complied with those terms, an audit obtained by The News found.
A House Appropriations Subcommittee hearing featuring two low-profile cabinet members won't make a splash even on a slow-news day, and certainly not when a juicy story like the AIG outrage has so many angles to explore.
But take my word for it: big news came out of yesterday's Congressional testimony by Department of Housing and Urban Development (HUD) Secretary Shaun Donovan and Department of Transportation (DOT) Secretary Ray LaHood. The cabinet secretaries announced
a new partnership to help American families gain better access to affordable housing, more transportation options, and lower transportation costs. The average working American family spends nearly 60 percent of its budget on housing and transportation costs, making these two areas the largest expenses for American families. Donovan and LaHood want to seek ways to cut these costs by focusing their efforts on creating affordable, sustainable communities.
I explain why this is important and welcome news after the jump.
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