HUD Secretary Outlines Housing Goals. Discusses 2012 Budget
In his prepared remarks on the Dapartment of Housing and Urban Development's fiscal year 2012 budget, HUD Secretary Shaun Donovan
yesterday told the House Financial Services Committee that any spending allocations must meet a number of challenges.
families in the midst of housing crisis, providing quality affordable rental
housing, transforming neighborhoods racked with poverty, rebuilding the nation's
federally-assisted public housing stock and ensuring that its tenants are part
of the skilled workforce the new global economy requires are just a few. Adding stress to the situation, these lofty goals must be met in a cost-conscious manner because of America's growing federal budget deficit and struggling economy.
Clearly education plays a major role in sustainable homeownership. Donovan said
to remain in line with President Obama's State of the Union message, "Winning
the Future", America must out-educate, out-innovate, and out-build the rest
of the world and reform government to make it leaner, smarter, more
transparent for the 21st Century.
cannot out-educate, he said, if we lack quality affordable housing which prevents
children from accessing good schools in safe neighborhoods or if homelessness
threatens the continuity of schooling.
For that reason the budget includes support of the Choice Neighborhoods
Initiative to link HUD's housing investments to a compatible Department of
Education program and proposes to target housing vouchers coupled with
educational and other supportive services to at-risk families with school-aged
An innovative clean energy economy is also vital. In
order to compete in the new century, HUD will work to improve the energy
efficiency of 245,000 HUD-assisted affordable houses through energy retrofits
and completing green retrofits of 19,000 privately-owned, federally-assisted multi-family
The President's focus on repairing our existing
infrastructure and innovating new ways of transporting people, goods and information will
not only put people to work now, Donovan said, but also spur investments that
build a stronger economy. HUD's budget
includes $140 million for a joint program with the Environmental Protection
Agency and Department of Transportation to help communities develop
comprehensive transportation plans to reduce families' combined costs of
housing and transportation. The budget
also proposes a $200 million rental assistance demonstration to rehabilitate America's
federally-subsidized affordable housing stock in a way that seeks to leverage
$7 billion in private debt and equity capital and, in the process, support
significant job creation in communities across the country.
To eliminate or streamline contradictory rules
and regulations in order to generate economic growth, HUD will continue to
focus on improving the way it works with other agencies. Donovan pointed to the
existing level of federal and non-federal interagency cooperation, saying it is
unprecedented and vowing to continue and improve upon it.
The 2012 HUD budget is structured around
what Donovan called five overarching goals from the Department's five-year
Strategic Plan adopted in 2010.
1: Strengthen the Nation's Housing Market to Bolster the Economy and Protect
While HUD expects the FHA will continue to support
the housing market, it is critical that the Department pave the way toward a
robust private mortgage market, a process it began many months ago. FHA has already taken significant steps to
facilitate the return of private capital and has strengthened its credit and risk
controls, improved lender oversight and enforcement, and tightened underwriting
2: Meet the Need for Quality, Affordable Rental Homes
While the median income of American families is
over $60,000, families in HUD-assisted housing have a median income of $10,200
and more than half of the tenants are elderly or disabled. The vulnerability of these residents is why,
Donovan said, we have chosen to protect the funding that houses these families
and fully 80 percent of the proposed budget keeps current resident in their
homes, provides basic upkeep to that housing, and continues to serve the most vulnerable
populations through homeless programs.
The Budget requests $19.2 billion for HUD's Housing
choice Voucher Program which will help more than two million extremely low- to
low-income families and 9.4 billion for Project-Based Rental Assistance to preserve
approximately 1.3 million units through funding for contracts with private
owners of multi-family housing.
The Budget also calls
again for funding the National Housing Trust Fund (NHTF) at $1 billion. NHTF, which has never been funded, was
designed to provide capital to build and rehabilitate housing to fill the growing gap identified in
the recent Worst Case Housing Needs Report.
3: Utilize Housing as a Platform for Improving Quality of Life
Donovan said HUD recognizes that stable
affordable housing provides an ideal and cost effective place to deliver other
services such as the Department's recent program in cooperation with the
Department of Veterans Affairs to target homeless veterans. The Budget includes
other programs for the homeless such as $2.3 billion for Homeless Assistance
Grants to maintain existing units and expand prevention, rapid re-housing and
permanent supportive housing. The Budget
also provides $953 million for Housing for the Elderly and for Persons with Disabilities
Programs and $499 million for new construction for elderly and disabled that
will allow them to continue living independently in their communities.
4: Build Inclusive Sustainable Communities Free from Discrimination
President Obama has made it clear that winning the
future depends on winning the race to educate children but, Donovan said, that
is not possible if we are leaving a whole generation of children behind in our
poorest neighborhoods. The budget brings
federal partnerships to connect historically isolated people and neighborhoods
to local, regional, and national economies by providing $250 million for a
third year of funding the Choice
Neighborhoods initiative. This program will
continue transformative mixed-finance investments in high poverty neighborhoods,
bringing private capital and mixed-use, mixed income tools to transform
affordable housing in five to seven neighborhoods
5: Transform the Way HUD Does Business
The need for responsible budgeting has never
been greater and making smart responsible choices depends on quality
information so the Budget provides up to $120 million for the Transformation
Initiative (TI) Fund which has begun to alter how HUD approaches its
investments in delivering technical and capacity-building assistance, conducts
research demonstrations and maintains and upgrades information technology (IT) systems.
A key element of the transformation strategy is to
provide predictable funding for high quality research and evaluation that can inform
sound policymaking. Donovan cited as an
example the current allocation method of Housing Choice Voucher administrative
fees which is not based on rigorous and objective studies and may
over-compensate some public housing agencies while underfunding others. HUD
must rebuild its internal research capacity and work in partnership with the
research community to evaluate existing programs and design new policy
approaches to solve housing and community development challenges.
The Department must also use 21st
century technology to protect the taxpayers' investment. Funding for information technology
modernization and development is not requested in the 2012 budget because of
significant balances available from 2010 and funds from 2011 to continue priority
IT development and enhancement efforts.
Donovan said that, "Given the economic
moment we are in, HUD's FY2012 budget proposal isn't about spending more in
America's communities - it's about investing smarter and more effectively.
READ MORE ABOUT HUD'S FY2012 BUDGET