In a rare display of bipartisan unity, Ohio’s Republican and Democratic senators co-introduced their Buckeye State colleague, Representative Marcia Fudge, for her Senate confirmation hearing Thursday to become secretary of the agency that oversees federal housing policy in the U.S. But that bipartisan spirit may run only so deep.
Pennsylvania Senator Pat Toomey lit into sharp statements made by Fudge in the past about the Republican Party. An aide to a GOP lawmaker even told Politico that Republicans are concerned that Fudge’s positions on the safety net will make her the head of an “activist HUD.” It’s a term that’ssurfacedin the past to describe a version of the Department of Housing and Urban Development deemed too ambitious for its ambit.
The secretary-designate addressed the sentiment if not the specific comment: “I understand that there are people who think we are doing more than we should. I believe we are not doing enough.”
So what might a so-called activist HUD accomplish?
During her confirmation hearing, Housing Secretary-designate Marcia Fudge spoke about expanding rental assistance, creating more opportunities for homeownership and arresting the pandemic eviction crisis — priorities that fall in line with those outlined by housing advocates.
If confirmed, Fudge will bring more direct federal experience to the office than any candidate in 20 years. As a member of Congress and former mayor of Warrensville Heights, an east-side suburb of Cleveland, she has seen the challenges of affordable housing firsthand, she testified. As housing secretary, Fudge will have an extraordinary mandate from President Joe Biden to pursue racial justice and equity in housing as top priorities.
“It bears mentioning, particularly in this moment of crisis, that HUD — perhaps more than any other department — exists to serve the most vulnerable people in America,” Fudge said in her prepared remarks. “That mandate matters a great deal to me. It is consistent with my own values, and it is precisely what has always motivated me to service.”
And while housing experts say that preventing a full-blown eviction and foreclosure crisis during the pandemic will continue to occupy the department, they point to policies to expand the Black homeownership rate and break down barriers to new apartment buildings as potential pick-ups. Fudge committed to both of those priorities during her confirmation hearing.
Yet the Biden administration may go much further: One of Biden’s and Fudge’s proposals could utterly transform the safety netand is intended to make housing “a right, not a privilege,” as the Biden campaign has described it. The president has called forexpanding the Housing Choice Vouchers program, more popularly known as Section 8, to be a federal entitlement, meaning that anyone who qualifies for federal rental assistance under the program will receive it. Currently, the Section 8 program is besieged byyears-long waiting lists at a time when need is only growing for vouchers that serve as the primary alternative to limited public housing for people who can’t afford housing on their own.
“We need to expand resources for HUD’s programs to people who are eligible,” Fudge said in her prepared remarks, noting that just one in five eligible households receives assistance from federal housing programs.
Section 8 housing vouchers serve a little over 2 million households today. However, there may be 16 million households in the income range who qualify and who have a need for housing vouchers but don’t receive them, according to Will Fischer, senior director for housing policy and research at the Center on Budget and Policy Priorities. That’s the figure before fully accounting for hardship during the pandemic.
“Many housing agencies close their waiting lists because they get so long, there’s no point,” said Fischer. An eligible household looking to participate in the program will wait an average of three to four years, he says. “There was an enormous need for this kind of assistance even before this pandemic hit, and it’s going to persist well after it’s over.”
Had Section 8 been a federal entitlement program all along, Fischer adds, there would have never been talk of an “eviction tsunami” after the novel coronavirus pandemic struck. Americans would not have fallentens of billions of dollars behind in back rent. State and local housing agencies would not have been forced to stand up hundreds of emergency rental assistance programs, a process that slowed down aid delivery by months. Instead, Congress would have had a ready tool to meet the pandemic crash head on. “If we had a universal voucher program when the pandemic hit, the story would have been very different,” Fischer says.
Expanding the Housing Choice Vouchers program as a federal entitlement comes with a hefty price tag:$410 billion over 10 years, according to a pre-pandemic estimate from the Congressional Budget Office. The Biden administration could pay for this subsidy by pursuing another reform:eliminating the mortgage interest tax deduction, which costs the federal government at least $70 billion annually.
Emily Hamilton, senior research fellow at the Mercatus Center at George Mason University, says that expanding Section 8 is the strongest plank in Biden’s housing agenda. In a newreview of Biden’s housing platform, Hamilton recommends an experiment for HUD: Give cash to some recipients in lieu of a housing voucher. This might serve as a workaround for one of the biggest drawbacks to vouchers. While Section 8 is aproven tool for reducing poverty and boosting opportunity, many landlords remain skeptical of the program. Part of that isbias and discrimination among landlords, but as Johns Hopkins University’sStefanie DeLuca and other researchers have shown, landlord outreach is critical to the success of any housing assistance program.
“HUD has done a few pilots in recent years altering how vouchers are delivered,” Hamilton says. “Cash transfers offer recipients more flexibility. If someone wants to economize, they could live with roommates or family members to spend less and have money left over for other priorities. Additionally, there’s a big problem right now withsource-of-income discrimination. Some of that may be due to actual discrimination on behalf of landlords, in which case transfers won’t be better, but at least part of that is landlords not wanting to jump through HUD hoops.”
While both Biden and Fudge have mentioned the expansion of housing vouchers as a top priority, the issue didn’t come up for a detailed discussion during Fudge’s confirmation hearing. In a previous call with reporters, Ohio Senator Sherrod Brown, the incoming chair of the Senate Committee on Banking, Housing and Urban Affairs, said that Senate Democrats will take up Biden’s commitment to expand housing vouchers and that the committee is looking into the possibility that it can be done with just 50 votes in the Senate through budget reconciliation. “Nothing’s off the table when it comes to providing more accessible, affordable, safe, clean housing for people,” Brown said during the call.
Race and equity — thesingular focus of a package of executive orders signed by Biden on Jan. 27 — came up several times as GOP senators questioned Fudge during her hearing. Arkansas Senator Tom Cotton asked Fudge to explain the difference between equality and equity. “Equality means treating everybody the same. Sometimes the same is not equitable,” Fudge replied. Louisiana Senator John Kennedy asked Fudge to address past comments she made about the Republican Party. “Do you think Republicans care about people of color?” he asked repeatedly. Yes, she said, agreeing with Kennedy that most do.
Among the proposals from Biden and Fudge to promote equity in housing is to introduce a permanent credit of up to $15,000 for first-time homebuyers. Details are sparse, but the idea is to make the credit “advanceable” — buyers could get the money right away rather than after they file a tax return, making the credit a form of down-payment assistance. Fudge said that the cost of down payments is the biggest obstacle to would-be Black homebuyers.
“One of the challenges that Black families see around homeownership is limited capital in order to invest,” says Malcom Glenn, a fellow in the Future of Land and Housing program at New America. He mentionstax-advantaged 529 savings accounts for college tuition as a popular model for the federal government to help Black households built wealth through housing. “Creating a tax structure that really incentivizes using limited family funds that a family has for the purposes of homeownership would be a really valuable effort.”
Hamilton cautions that expanding rental aid and subsidizing down payments will lead to higher costs in places with serious housing supply constraints, especially but not exclusively coastal areas. Housing vouchers require recipients to pay one-third of their income toward the rent no matter what, so expanding the program dramatically won’t affect them — but it may price out residents who aren’t eligible for vouchers if landlords raise rents to keep up with a voucher-fueled boost in demand. The same goes for first-time home sales: Industry groups fear that a big increase in the number of qualified homebuyers willlead to higher prices, especially when mortgage rates are so low.
Fudge had an answer for housing shortages. Asked by Hawaii Senator Brian Schatz what she would do to encourage communities to abandon restrictive zoning ordinances that limit new development, Fudge said, “We have to get rid of this notion of not-in-my-back-yard.”
The country’s first ““Yes In My Backyard” housing secretary may have some tools at her disposal to pursue the YIMBY agenda. House Majority Whip Jim Clyburn and New Jersey Senator Cory Booker haveproposed a bill to make federal block grants contingent on easing zoning restrictions. Community Development Block Grants are flexible, and local leaders would be loathe to give them up, although not all communities get them. Hamilton suggests a tastier carrot: Encourage local zoning reform by creating a new flexible funding source, available specifically for jurisdictions that do the actual zoning, based on housing market outcomes.
Public housing, theprogressive left’s preferred alternative to vouchers, did not get a hearing during Fudge’s confirmation. But on Jan. 27, Bidenreiterated his pledge to build 1.5 million new energy-efficient affordable homes and public housing units, and he plans to hike funding for theHousing Trust Fund by $20 billion. Progressive lawmakers who want to seepublic housing as the engine for a Green New Deal are calling formuch, much more spending in this category. Critics such as journalist Matthew Yglesias say thatpublic housing would be defeated by the same forces that quash private housing: “The basic NIMBY toolkit in the United States — zoning, community review, lawsuits, more lawsuits, more review, more lawsuits — binds the public sector just as much as the private sector.”
The next housing secretary may take action to relax local regulations that make U.S. housing unaffordable. At the top of her agenda is reinforcing civil rights-eramandates that the country has let slide for more than 50 years. As housing secretary, Fudge can do both: pursue fair housing by promoting equitable growth. Her first two policy priorities will be undoing rules set during the Trump administration that rolled back fair housing discrimination. But simply reinstating these protections are the floor of what is possible, Glenn says.
“So much of the real existential challenges that Black families face when it come to housing didn’t start with this pandemic,” Glenn says. “These issues go back quite frankly to Reconstruction, and all of the very intentional efforts on behalf of government entities at all levels to undermine Black families to get access to property. It’s a tall order to expect President Biden to remedy all of those issues.” He adds, “Just recognizing he has an opportunity to repair some of the damage that was done over the last four years is where I would say he should start.”
Before HUD can address any of these issues, Fudge testified, the department has to focus on protecting tenants and landlords alike from a potential eviction crisis.
“We cannot afford to allow people in the midst of the pandemic to be put on the street,” Fudge said.