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HUD at 50: Creating Pathways to Opportunity

Image showing four individuals, panelists Erika Poethig, Raphael Bostic, Ingrid Gould Ellen, and Margery Turner seated at a table bearing the HUD logo. An image with the HUD and PD&R logos is visible on a screen behind the table.
Panelists Erika Poethig, Raphael Bostic, Ingrid Gould Ellen, and Margery Turner, contributing authors to HUD at 50: Creating Pathways to Opportunity, discuss the evolution of HUD's policies and programs.

Since its founding in 1965, the U.S. Department of Housing and Urban Development has worked to meet the nation's housing needs, promote fair housing opportunities, and improve communities through a variety of programs. On January 12, 2016, the Office of Policy Development and Research’s Quarterly Update explored the evolution of HUD’s policies over the past 50 years and the direction they might take in the future. The participants in the first of two moderated panels were all contributors to the recently published book HUD at 50: Creating Pathways to Opportunity, and they elaborated on its key themes. The second panel, composed of HUD’s senior leadership, discussed future challenges.

Assisting Vulnerable Populations

HUD was founded at a time of tremendous optimism about government’s ability to effect large-scale social change, said Raphael Bostic of the University of Southern California. Sharing many of the objectives of the War on Poverty, HUD pursued the provision of affordable housing to underprivileged and vulnerable people as one of its major goals. Erika Poethig of the Urban Institute explained that HUD’s implementation of this policy has transitioned over time from an emphasis on public housing toward an increased reliance on market-based rental subsidies. In 1974, HUD introduced Section 8 housing choice vouchers and expanded project-based rental assistance to private owners. HUD's rental subsidy program, however, has fallen short — rental subsidies serve fewer than one of four eligible households, and in the absence of rental assistance, the private market is unable to meet the housing needs of America's poorest households, noted Poethig. Moreover, the gap between need and available assistance continues to grow, a trend that Margery Turner of the Urban Institute called “deeply disturbing.” Turner argued that this gap has undermined progress in addressing homelessness. Although HUD and its partners have made significant progress in ending chronic homelessness among singles, for example, they have not made comparable strides in reducing family homelessness because of the lack of affordable housing supply and subsidy assistance.

Turner observed that over the decades, HUD's policies have evolved from providing basic, decent, and affordable shelter to the more ambitious and challenging goals of promoting household stability and economic mobility. For example, HUD's post-1990 programs were designed to move low-income households from high-poverty areas to low-poverty, high-opportunity neighborhoods. However, a number of factors, including the lack of affordable housing and the shortage of landlords willing to accept vouchers in such neighborhoods, have hampered these efforts. Given such policy challenges, Lourdes M. Castro Ramirez, HUD Principal Deputy Assistant Secretary for the Office of Public and Indian Housing, argued for continuing investment in public housing, which serves as an important platform for furthering the stability and economic standing of families by connecting them to education, jobs, and support services, as well as improving the effectiveness of mobility programs.

Ongoing HUD Policy Challenges

Looking at future HUD policies designed to assist underprivileged and vulnerable people, Harriet Tregoning, HUD Principal Deputy Assistant Secretary for the Office of Community Planning and Development, cited climate change as an impending challenge. Climate change will disproportionately affect populations with fewer resources because affordable housing is often constructed in floodplains and other flood hazard areas. In addition, communities affected by natural disasters often rebuild to a predisaster “normal” state when they would be better served by rebuilding in ways that prepare them to endure and rebound quickly from the next disaster. HUD will need to emphasize such future-focused strategies in the disaster recovery programs it administers.

Another ongoing challenge for poverty-related programs lies in addressing the increased economic segregation and wealth and income inequality that the United States has experienced since 1970. Katherine O'Regan, HUD Assistant Secretary for Policy Development and Research, emphasized how the recently enacted Affirmatively Furthering Fair Housing final rule can help reverse this trend over the next several decades. Noting the role homeownership plays in building wealth, Edward L. Golding, HUD Principal Deputy Assistant Secretary for the Office of Housing, suggested that the Federal Housing Administration could reduce this growing income gap by providing more housing counseling to low-income households and increasing access to capital for people with lower credit scores and communities of color.

Image showing four individuals, Assistant Secretary for Policy Development and Research Katherine O'Regan, HUD senior leadership, including Harriet Tregoning, Lourdes M. Castro Ramirez, and Edward L. Golding seated at a table bearing the HUD logo. An image with the HUD and PD&R logos is visible on a screen behind the table.
Assistant Secretary for Policy Development and Research Katherine O'Regan is joined by HUD senior leadership, including Harriet Tregoning, Lourdes M. Castro Ramirez, and Edward L. Golding, in deliberating HUD's future direction.

The Impact of Demographic Change

Demographic trends have played an important role in past HUD policies and will continue to present challenges in the coming years. Poethig cited the decades-long impact of the baby boomer generation in prioritizing homeownership policies. Ongoing population shifts include the aging of that generation; the maturing of the millennials, many of whom are choosing to rent in urban centers; and the growing racial and ethnic diversity of the U.S. population. These changing demographics present HUD with the challenges of promoting more affordable rental housing and providing a more mutable housing stock that allows aging in place and multigenerational households. Golding stressed the need for greater transparency in the marketing of reverse mortgages to a growing elderly population. Although demographic shifts demand greater attention to this older population, Tregoning cautioned that HUD policies not neglect the needs of families with children.

HUD and Urban Governance

HUD policies help to shape urban form. Yet, as Bostic pointed out, the definition of “urban” is not straightforward. What are its boundaries, and who does it include? The definition is important as it affects who has a say in formulating policy. HUD’s regional approach to urban issues requires the agency to collaborate with diverse groups, a goal that is difficult to achieve. Bostic observed that in many metropolitan regions, the urban core is distinct from its suburbs, and outlying areas often do not see the need to participate in or contribute resources to regionwide projects. Bostic suggested that in the future, HUD might form an Office of Governance that can help local governments and nonprofits promote management and team building in their efforts to tackle regionwide urban issues.

Another challenge to urban policy arises from the contradictions and tensions inherent in the pursuit of multiple goals, according to Ingrid Gould Ellen of New York University. For example, HUD must balance the need to establish and enforce nationally consistent fair housing rules with the desire to allow local jurisdictions to tailor programs to meet local conditions. Historically, this balancing act has often led to a concentration of housing in high-poverty, largely minority areas. Fiscal limitations force HUD to balance revitalizing communities with facilitating the mobility of low-income households to high-opportunity neighborhoods. Expensive land in high-opportunity neighborhoods also undercuts the goal of serving as many households as possible by limiting the number of housing units that can be constructed. Tregoning suggested that local governments exploit the trend of shared use as it relates to the automobile, allowing land designated for parking space set-asides to be used for housing instead.

Given that fewer federal funds are being allocated for growing urban problems, Tregoning suggested strategies for using money and land resources more efficiently. Building on HUD's experience with the National Disaster Resilience Competition, Tregoning suggested that partnering with philanthropic groups that can provide additional funds to grantees would be fruitful. Financing several interconnected projects at once or designing competitions for grants with the stipulation that local entities come to the table with desired zoning changes already in place, for example, could result in additional monetary savings. Finally, Tregoning argued that the federal government could allocate resources differently, noting that the benefits of subsidies such as the mortgage interest deduction skew heavily toward the wealthy.

HUD Past, Present, and Future

For the past 50 years, HUD and its evolving programs have helped meet needs and create opportunities for participating individuals and families, shaped the urban landscape, and responded to population shifts. Although HUD was founded during a time of great optimism about government’s role in promoting positive social change, Bostic noted that today, “[w]e are not in a we-can-do-it environment,” with a political atmosphere less receptive to providing the resources necessary to meet all of the nation’s enduring housing needs. However, this challenge presents future possibilities for innovation and improvement. As Tregoning stated, “I think we have so much opportunity at HUD, so many different ways we could be doing our work, that it’s actually a very exciting time.”