Breaking the cycle
- Published February 2017
Some supporters compare his potential to that of housing oracle Jack Kemp. Some critics dismiss him as lacking experience. Whatever the case, Dr. Ben Carson is about to take on one of the nation's most powerful, yet rarely impactful cabinet positions, Secretary of HUD. The Department of Housing and Urban Development runs a budget of close to $47 billion, manages a portfolio of $1.6 trillion in assets, employs over 8,300 workers and is the first line of defense against persistent poverty. Most of all, it is instrumental in protecting the country's iconic promise of opportunity to improve one's inherited economic condition.
Dr. Carson is stepping into an office tasked with elevating a sector of our country's economy that regularly cycles in and out of trouble. And the nation's housing is in crisis. Again. Seventy-five percent of those who qualify for housing assistance don't get it according to the Center on Budget and Policy Priorities. Of the fortunate few who do, two million people live in public housing. Another five million live in private housing supplemented by the Section 8 housing vouchers.
For every 100 extremely low-income households needing a place to live, there are a meager 29 rental units available, according to the Urban Land Institute.
Where is the nation's housing stock? Hundreds of thousands of housing units are in a state of disrepair, including $26 billion in public housing stock alone. New construction continues to struggle to keep pace with need. Deals don't pencil: Cost of land, regulations, and labor shortages as just a few of the many barriers to building new units. As need continues to outpace supply, market conditions only tighten.
Twelve million renter households are "housing insecure," paying at least half of their monthly income on rent and utilities. Stagnant wages and slow economic growth have contributed to an untenable situation leading Carson to pledge to "advocate for the inclusion of housing in the president-elect's infrastructure package." Such a lack of affordable housing costs the U.S. economy an estimated $1.6 trillion each year in lost wages and productivity alone, according to one study.
In the market-rate sector, housing inventory also falls behind demand. While developers stand ready to build, barriers to building include onerous regulations, civic aversion and other challenges that make deals harder to garner return.
While Carson and the administration have been reserved on the topic of housing, basic needs remain: expansion of federal tax incentives to build more affordable housing, renovating the nation's public housing stock back to usefulness, and pulling back on regulations such as disparate impact. Dr. Carson has his work cut out for him. But it's not like running HUD is brain surgery. Oh. Wait.