By Joe Silver
Former Republican candidate for President Ben Carson was recently nominated by President-elect Trump to take over the Department of Housing and Urban Development (HUD). Caron will need to be confirmed by Congress in January or February 2017, and while there is talk about his lack of experience in housing for the poor, it is expected he will be confirmed.
There are several things that Carson should be able to do to improve HUD and FHA quickly. First, let's delve into some background about HUD.
HUD is not one of those agencies like the EPA or DOJ in that it mostly stays out of the limelight. It has only been around since 1965 and its purpose is to create strong and sustainable communities and good quality homes for everyone in the country.
HUD has more than 100 programs and subprograms that it uses to carry out its mission. Running so many programs costs a lot of taxpayer dollars of course. The outlays by HUD are relatively large when you compare them to other, better known agencies. For years, the outlays by HUD were as much or more than the Department of Education. Even though they have dropped lately, HUD still spent more than $32 billion in 2015. This is five times more than the EPA.
With so much spending, HUD should be performing its mission well, but it is at this point difficult to judge how effective HUD's programs are. There are many data and reporting issues that make it difficult to judge how effectively tax payer dollars are spent. And that brings us to one of the big things that Carson will be able to improve at HUD:
A good example of the current problems are HUD's Community Development Block Grant Program or CDBG. This program gives grants to states and cities that can be used in projects to benefit low income households. It is a large program that spends $3 billion per year to 1000 communities across the US. It has spent more than $200 billion since 1975 in 2015 dollars.
There have been few studies to determine how effective it is. This lack of data is recognized by HUD itself, and other government agencies have noticed this as well.
During the Bush administration, the Office of Management and Budget noted that several HUD programs were ineffective. But it need not be this way. There are frameworks available that many federal agencies can use to boost and assess performance.
Key steps include identifying issues and intended outcomes, performance assessment of the program and a consideration of opportunity costs.
HUD needs to boost its program assessment effectiveness and this means better data is needed. HUD mandates that each city, state and county get block grants to show their expenditures and accomplishments. But the reports count the total people served or the houses fixed. This may not serve the entire community.
For instance, to get data for a 2014 study of the CDBG's effectiveness, researchers must submit a FOIA request. After they get the data, which can take months, much effort and time are needed to play with the data to make it into a usable format.
This shortcoming is seen in many HUD programs; CDBH is in no way special in this way. The Partnership for Sustainable Communities Initiatives also does not have publicly available data. Rather, a large number of case studies are on the website as PDFs. These are helpful to look at individual projects, but they cannot be used for broad, cross community analysis that is needed to find out which practices are most effective.
Data that is easier to access would let government analysts and policy experts to assess how effective the CDBG and many other HUD programs are. That way, we could see which programs are improving communities and which are not. We also would have a better idea of which areas of the country complete the projects with the most efficiency. These communities would then be able to share their experience and tips.
We think that Ben Carson should immediately implement an output based scrutiny program to boost the data collection for HUD, as well as availability and analysis.
By doing this, Carson would go a long way towards the HUD goal of building sustainable, strong communities and plenty of affordable housing by helping the agency determine what is working and isn't working.
Without this type of knowledge, it is very difficult for HUD to effectively spend its scarce resources. This means that taxpayers are just paying too much for not enough results.
Most mortgage lenders and brokers would agree that year in and year out, FHA insures home loans for low income borrower's and people with credit problems in their past. Carson should convey to the world that he backs FHA's role in mortgage lending that have provided so many first time home buyers the opportunity to join the marketplace. It's no secret that FHA home loans have helped stimulate homeownership in the U.S. for many decades. How Carson can or will influence the CFPB and Dodd-Frank reform promised by President Trump remains to be seen.
Health care experts say that where money is spent on housing, what types of housing are built, and where, all have an effect on people's health in those communities.
For example, where the homes or buildings are located will have an effect upon where people's children go to school, where they buy groceries, whether they can get exercise in parks, and whether they are near their health care provider. All of these things have a measurable impact on the live of the people that HUD serves.
Like most federal agencies, the organization as a whole wants to do a good job, but there is usually waste involved when agencies are spending billions of dollars. We hope that Carson will be able to improve efficiency at HUD to help to further its mission and to ensure that taxpayer dollars are spent efficiently.
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