January 13, 2017

Senate Holds Hearing on the Nomination of Dr. Ben Carson to Lead HUD

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Ben Carson Nomination Hearing

Yesterday the Senate Banking Committee held a hearing to consider the nomination of Dr. Ben Carson to serve as HUD Secretary.  Senator Marco Rubio, who is not a member of the Senate Banking Committee, also joined the hearing to speak in favor of his nomination.  Senator Rubio remarked that, “HUD is about the American Dream… Dr. Carson believes this because he has lived it.”

Dr. Carson emphasized several themes in his testimony and throughout the hearing, including increasing private sector participation in the housing market, encouraging self-sufficiency in assisted housing, exploring the connection between health and housing, reducing regulatory burden and reviewing the HUD budget and each HUD program with an eye towards reform. He also acknowledged that HUD programs, including rental subsidies, are an essential part of the social safety net and indicated his interest in undertaking a “listening tour” to hear from stakeholders within and outside of HUD to learn more about the department’s programs and their efficacy, as well as ideas for improvements.

The hearing also focused largely on Dr. Carson’s background, growing up in a low-income neighborhood in Detroit and experiencing poverty firsthand. “I grew up in inner city Detroit with a single mother who had a third grade education, but who worked numerous jobs to keep a roof over our heads and to put food on our table. I understand housing insecurity,” he said in his written testimony. Though Dr. Carson does not have prior housing policy experience, he explained his motivation for serving as HUD Secretary: “I want to help heal America’s divisiveness, and… I see HUD as part of the solution, helping ensure housing security and strong communities.”

“Enterprise is encouraged by several areas of potential collaboration raised by HUD Secretary-Designate Dr. Ben Carson in his nomination hearing,” Enterprise President and CEO Terri Ludwig said in a statement. “There are also several issues around which we encourage the incoming Administration to provide bold, specific solutions.”

The Role of the Private Sector and the Low-Income Housing Tax Credit

Dr. Carson expressed strong support for public-private partnerships, and specifically cited the Low-Income Housing Tax Credit (Housing Credit) as a successful example of the private sector’s role in affordable housing. “We’ve got a lot of very talented people in this country in the private sector… You know the Low-Income Housing Tax Credit is an excellent example – it’s overseen by the Senate Finance Committee – but that has allowed an enormous number of places to be renovated,” Dr. Carson said. “I want to study those programs that are working so we can multiply them across the country.”

He also elaborated that government must provide the motivation for the private sector to make such investments, saying, “they have to obviously be incentivized in order to do that – the big stumbling block is the initial capital in order to get it done,” and noted that the private sector must “realize a return on that capital investment.” Securing initial development capital and ensuring a return on investments, the two principles to which Dr. Carson refers, are foundations of the Housing Credit model and are important considerations as Congress considers tax reform legislation. These points were emphasized in a December 2015 letter from the ACTION Campaign to the new Administration and Congress, urging that the Housing Credit must be protected and expanded, and its viability retained, in tax reform.

Chairman Crapo indicated his strong support for the Housing Credit as well. “While the Low-Income Housing Tax Credit is under the Finance Committee’s jurisdiction,” Chairman Crapo said in his opening statement, “it is very important to the U.S. housing market.  It provides essential capital to underserved communities and provides key financing for small and rural affordable housing developments.”

Dr. Carson also received numerous questions about the private sector’s role in housing finance, to which he indicated support for an increased role for private insurers and an openness to alternatives to the Federal Housing Administration to guarantee mortgages. 

Encouraging Self-Sufficiency through HUD-Assisted Housing

Dr. Carson acknowledged that it is the responsibility of the government to provide affordable housing to low-income families, and strongly emphasized that it is also incumbent on the government to encourage self-sufficiency. “It’s difficult for a child to learn at school if he or she doesn’t have an adequate place to live. In these situations, government can and should help,” Dr. Carson said in his testimony. “However, I believe we need to ensure that the help we provide families is efficient and effective. It cannot, and should not, trap people in an intergenerational cycle of poverty.”

He discussed possibilities for encouraging self-sufficiency that included job training, mentorship programs and substance abuse treatment. Several Senators noted during their questioning that more than half of HUD-assisted households are elderly and disabled, and also need affordable healthcare as a critical part of their wraparound services. Dr. Carson said that he thinks rental housing assistance is “essential” and that it would be “cruel and unusual” to withdraw assistance before another plan is in place.

Health and Housing

Drawing on his background as a neurosurgeon, Dr. Carson was particularly focused on the connection between health and housing. “Housing (and housing discrimination) is a ‘social determinant’ of health,” Dr. Carson said in his testimony. “Substandard housing conditions such as pest infestation, the presence of lead paint, faulty plumbing, and overcrowding, which disproportionately affect low-income and minority families, lead to health problems such as asthma, lead poisoning, heart disease, and neurological disorders.” During questioning he again committed his support for efforts to reduce the presence of lead and other environmental hazards in HUD-assisted housing, and also pointed to other factors, such as unsafe living conditions, that create stress and make it difficult for families and children to thrive.

Regulations and Fair Housing

In support of President-Elect Trump’s commitment to deregulation, Dr. Carson emphasized that he would seek to advance the concept of deregulation insofar as it applies to housing. “Overly burdensome housing regulations are bad for everyone and are increasing income inequality,” he said in his testimony, suggesting that overly complex covenants and zoning ordinances have slowed integration and entrenched racial segregation. 

Dr. Carson was asked about his approach to fair housing, including his 2015 Washington Times editorial describing HUD’s final rule on Affirmatively Furthering Fair Housing as a “failed socialist experiment.” Dr. Carson responded that he would uphold the Fair Housing Act, that his views expressed in the editorial have been distorted, and that his primary concern is “people sitting in a desk in Washington, D.C. deciding how things should be done, telling mayors and commissioners where to build housing.”

He did not indicate whether he intends to uphold or rescind HUD’s 2015 final rule on affirmatively furthering fair housing. Contrary to a common misunderstanding, this fair housing rule does not provide HUD with the authority to tell communities where they must build multifamily developments. This remains a local decision. Moreover, states and local governments still must consult with community members before committing any HUD funds to specific developments. Enterprise remains committed to working with the incoming administration to educate them about the problems that necessitated issuance of the rule – such as confusion about what the law required, which left states and local governments vulnerable to law suits and uneven enforcement by HUD.

When asked about serving LGBTQ people, Dr. Carson promised that he would use his position to extend the full protections of the law to all Americans. 

Reviewing the HUD Budget

Dr. Carson vowed to conduct a thorough review of all HUD programs to determine their efficacy and the appropriate funding level in order to develop a “world class housing plan.” He vowed to robustly advocate on behalf of the resources needed in order to achieve this plan, but noted that the overall budget may exceed or fall short of current levels. During questioning it was noted that he has previously supported a 10 percent across-the-board reduction in funding for all federal agencies, but he responded that he has since revised his position. Dr. Carson did not reference many specific HUD programs, but did commit to protecting, strengthening and potentially expanding the Community Development Block Grant (CDBG) program as well as veterans housing programs, including the HUD-Veterans Affairs Supportive Housing (HUD-VASH) program.

The Senate Banking Committee will likely vote on Dr. Carson’s nomination later this month, followed by a vote by the full Senate shortly after.

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