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 problems.
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 said.
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 world-wide.
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 Senate.