HUD Takes Bigger Role Under Obama Administration

Obama tapped Shaun Donovan, head of New York City's Department of Housing Preservation and Development. His CV is equally weighted in policy-making, governance and expertise in affordable housing and other related issues--attributes that are cheering to those in the industry that rely on HUD's myriad programs. "There is a real enthusiasm among folks that work with HUD about Donovan's selection," Sharon Wilson Geno at Ballard Spahr, tells GlobeSt.com. A strong choice makes sense, given Obama's emphasis on infrastructure investment, she adds. "People don't always think of housing as part of our infrastructure, but it is."

Indeed, Obama has signaled that he would like to see a policy rehab at HUD under Donovan, with the agency taking a lead role in the mortgage crisis. "We need every part of our government working together--from the Treasury Department to the Federal Deposit Insurance Corp., the agency that protects the money you've put in the bank," Obama said. "And few will be more essential to this effort than the Department of Housing and Urban Development."

HUD's affordable housing initiatives, it appears, will also receive more support as well in the Obama Administration. Donovan--and by extension HUD--will be jettisoning "old ideology and outdated ideas" that have not worked at the agency, Obama said. "We can't keep throwing money at the problem, hoping for a different result. We need to approach the old challenge of affordable housing with new energy, new ideas and a new, efficient style of leadership."

Both goals--the mortgage crisis and affordable housing--are inter-related, Sheila Crowley, director of the National Low Income Housing Coalition, tells GlobeSt.com. They are also urgently in need of attention, she adds. "The supply of affordable housing in this country has not increased in recent years. With HUD acting as a major agency--not a secondary one--that problem could be better tackled," she says.

By naming Donovan, Obama has shown that he realizes HUD needs serious attention, Crowley continues. "It needs a good manager and housing expert at the helm and it is not a place with which to take risks, especially now."

Senior housing and senior multifamily is another constituency that, some feel, have fallen through the cracks at HUD. Under Donovan, "HUD will take a more active role in senior housing for both new development and preservation," predicts Nancy Libson, director of housing policy for the American Association of Homes and Services for the Aging. "Donovan understands this product--he also understands that not everyone should be a homeowner, and particularly among seniors, rental housing is a good option," she tells GlobeSt.com.