The mortgage crisis, for most of us, was the moment we realized the security of our housing system was in serious jeopardy. Since then, the failure of banks and the flood of layoffs have taken over the front page and our collective, anxious, psyche.
The housing market in the US is still in crisis. Now that the stimulus bill has passed, the federal government is again ready to find solutions.
This morning, NYU plays host to a meeting of the minds on the issue of housing. The conference, "A Crisis is a Terrible Thing to Waste," is a chance for housing wonks to talk shop, but it also provides a platform for HUD secretary Shaun Donovan to outline his initial approach to polishing HUD's reputation and making some qualitative changes in American housing.
As Donovan put it, "In crisis there is opportunity,"—a major theme of his discussion—"but in crisis, there is also crisis." The crisis end of things—2.2 million foreclosures, 45% of all sales in distress, 10% of homes in foreclosure in major metro areas—is familiar. Donovan touted the benefits of the stimulus bill, which will cover one third of HUD's budget this year and offer $8,000 in incentives to new home buyers, particularly for its employment assistance. "A recovery bill that will create 3.5 million jobs is an enormously important contributor to the housing market," he said.
Then Donovan emphasized five areas that will be targeted in his first 100 days:
1. A comprehensive foreclosure reponse
2. The acceleration of loan modifications
3. Target bankruptcy reform
4. Dealing with the community and family impacts of foreclosure
5. New, broad standards for loan modification
If Donovan is succsessful on these fronts, then he moves on to opportunity. He seemed more than confident in his ability to leverage HUD's role in the financing 10% of US homes towards green retrofitting and improving the overall sustainability of American housing. Perhaps most interesting—though not surprising given the pitfalls suffered by Donovan's predecessor—was his emphasis on assistance to minority and economically unstable families. He vowed to "never again have this target of minority communities with sub-prime mortgages" and to not only facilitate the movement of poor families to neighborhoods of choice but to see that "a geography of opportunity that opens up all neighborhoods to being neighborhoods of choice."
Perhaps most comforting was Donovan's self-identification as "a numbers man." He seems prepared to look at the facts, no matter how ugly. This may seem pretty basic, but if the economic crisis can be blamed on any one thing, its lack of oversight. Donovan's taking a step in the right direction, and we all stand to benefit.