The surprise reduction
in FHA annual premiums announced last week by the current Secretary of Housing
and Urban Development (HUD) may not survive long into the new administration. Ben Carson, M.D. President-elect Donald Trump's
pick to head HUD, said at his confirmation hearing on Thursday that he would
consider reversing the cut, which current Secretary Julian Castro said would
save the average FHA borrower around $500 per year. "Certainly, if confirmed, I am going to work with the
FHA administrator and other financial experts to really examine that
policy," Carson said.
Carson, himself a former presidential candidate, appeared
before the Senate Banking Committee to present the case for his
confirmation. In his revised opening
statement, Carson, a pediatric neurosurgeon, said there is a "strong connection
between housing and health."
Substandard housing conditions; pest infestations,
lead paint, faulty plumbing, and overcrowding disproportionately affect
low-income and minority families and lead to many health problems, he said,
with young children especially vulnerable to household hazards. He spoke in particular about lead poisoning
that affects an estimated 310,000 young children and causes irreversible brain
and nervous system issues. Substandard housing conditions such as water leaks,
and poor ventilation can increase mold, mites, and other allergens leading the
respiratory conditions such as asthma and higher medical costs. Where one lives, he said, should not cause health
He also talked about the importance of
deregulation. Regulations are not only
costly and reduce the availability of affordable housing, but restrict
migration for economic reasons and increase racial and economic segregation.
He called lending for home purchase "bifurcated." The well-off have their pick of loans and
lenders while those without solid credit or stable incomes are locked out. Banks are loath to participate in low-down
payment programs through FHA for fear of being sued if borrowers default, he
Other parts of Carson's prepared remarks
echoed the theme of his presidential campaign, focusing on his upbringing by a
poor mother in inner-city Detroit and how he had risen above it. He told the Senators that he grew up knowing
what housing insecurity means but did not detail his approach to housing policy
or how he would make the agency more efficient as he has claimed.
According to Reuters, much of the questioning from the
Senate panel focused on Carson's often stated antipathy toward social-welfare
programs, with some members asking whether he supports HUD's mission to provide
housing assistance. He stated that rental assistance is essential, but that
social programs must operate within financial constraints.
Senate Democrats brought up and pressed the nominee
about potential conflicts of interest between HUD and Trump's business
interests. HUD manages the allocation of
billions of dollars each year to housing developers and to landlords while
Trump's family owned business is active in real estate development
Alluding to the president-elect's refusal to release
his tax returns and the current lack of clarity about future management of his
interests, Elizabeth Warren (D-MA) said, "The president-elect is hiding his family businesses
interests from you, from me, and the rest of America. He can divert taxpayer
money into his own pockets without the American people knowing about it."
Again per Reuters, Carson initially
responded to Warren saying "If there happens to be an extraordinarily good
program that is working for millions of people and it turns that someone you're
targeting is going to gain $10 from it, am I going to say, 'No, the rest of you
Americans can't have it?'" However,
later in the hearing vowed he would monitor any potential conflicts of interest
but was unsure how to go about it. "I
would hope what would happen with this committee is that we could come up with
a suggestion that might be acceptable to all sides," he said.
Most of Trump's licensing and holdings are
centered in commercial real estate, resorts, and luxury housing but Reuters
said he reportedly holds an interest in a large Brooklyn housing project that
has received HUD funds.
Carson is widely expected to receive approval
from the Republican-controlled Banking Committee and confirmation by the whole