Tag Archives: Superstorm Sandy

HUD, Exit Stage Left

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photo by Gage Skidmore

Obama HUD Secretary Julián Castro

President Obama had members of his Cabinet write Exit Memos that set forth their vision for their agencies. Julián Castro, his Secretary of HUD, titled his Housing as a Platform for Opportunity. It is worth a read as a roadmap of a progressive housing agenda. While it clearly will carry little weight over the next few years, it will become relevant once the political winds shift back, as they always do. Castro writes,

Every year, the U.S. Department of Housing and Urban Development (HUD) creates opportunity for more than 30 million Americans, including more than 11.6 million children. That support ranges from assisting someone in critical need with emergency shelter for a night to helping more than 7.8 million homeowners build intergenerational wealth. Simply put, HUD provides a passport to the middle class.

HUD is many things but, most of all, it is the Department of Opportunity. Everything we did in the last eight years was oriented to bring greater opportunity to the people we serve every day. That includes the thousands of public housing residents who now have access to high-speed Internet through ConnectHome. It includes the more than 1.2 million borrowers in 2016 – more than 720,000 of them first-time homebuyers – who reached their own American Dream because of the access to credit the Federal Housing Administration provides. And it includes the hundreds of thousands of veterans since 2010 who are no longer experiencing homelessness and are now better positioned to achieve their full potential in the coming years.

Our nation’s economy benefits from HUD’s work. As our nation recovered from the Great Recession, HUD was a driving force in stabilizing the housing market. When natural disasters struck, as with Superstorm Sandy in the Northeast, the historic flooding in Louisiana, and many other major disasters – HUD helped the hardest-hit communities to rebuild, cumulatively investing more than $18 billion in those areas, and making it possible for folks to get back in their homes and back to work. And when we invested those dollars, we encouraged communities not just to rebuild, but to rebuild in more resilient ways. The $1 billion National Disaster Resilience Competition demonstrated our commitment to encourage communities to build infrastructure that can better withstand the next storm and reduce the costs to the American taxpayer.

Housing is a platform for greater opportunity because it is so interconnected with health, safety, education, jobs and equality. We responded to the threat posed by lead-contaminated homes by launching a forthcoming expansion of critical protections for children and families in federally assisted housing. And we finally fulfilled the full obligation of the 1968 Fair Housing Act by putting into practice the Affirmatively Furthering Fair Housing rule to ensure that one day a child’s zip code won’t determine his or her future.

Much has been accomplished during the Obama Administration, but new challenges are on the horizon, including a severely aging public housing stock and an affordable housing crisis in many areas of the country. Just as HUD provided necessary reinforcement to the housing market during the latest economic crisis, this vital Department will be crucial to the continued improvement of the American economy and the security of millions of Americans in the years to come. (2)

There is a fair amount of puffery in this Exit Memo, but that is to be expected in a document of this sort. it does, however, set forth a comprehensive of policies that the next Democratic administration is sure to consider. If you want an overview of HUD’s reach, give it a read.

Monday’s Adjudication Roundup

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Reiss on Green Bonds

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Law360 quoted me in Green Bond Bandwagon Promises Cash Returns For NYC (behind a paywall). It opens,

A New York City proposal to market billions in so-called green bonds could reduce debt costs for the city by enticing investors who have stampeded toward guilt-free returns elsewhere, but buyers must tread carefully lest their money ends up funding projects not seen as environmentally relevant.

New York City Comptroller Scott M. Stringer put forth a plan last week that would see the city’s capital spending program add municipal bonds for financing environmentally friendly projects to its plans to issue $30 billion in new debt over four years.

The proposal, which Mayor Bill de Blasio’s administration is studying, suggests moving quickly while there this still a focus on reinforcing the city after Superstorm Sandy and amid the strong demand for green bonds in the private sector as well as in California, Massachusetts and Washington, D.C. As soon as next year, the city could being to convert a large portion of its Municipal Water Finance Authority debt — some $1.5 billion per year — into green bonds and could allocate up to $200 million per year in Transitional Finance Authority and general obligation bonds to similar use.

“Green bonds should be another example of how New York City leads the nation in finding solutions that work,” Stringer said.

While experts in public debt investment largely see the proposal as a promotional bid to market New York City debt, they note that the city’s high national profile could make such a move profitable amid investor hunger to capitalize environmentally friendly projects.

“The big question is: How much demand would this create? One of the main points of the green bonds would be to increase demand,” said Brooklyn Law School professor David Reiss, an expert in real estate finance and community development. “If there really is pent-up demand, and New York City acts as an early mover, it might get a short-term benefit in the cost of borrowing.”

Stringer’s prediction that New York City could spark others to follow suit would also likely come true, Reiss said.

“If this is demonstrated to materially drive down borrowing costs, you’ll see others doing the same thing,” he said. “I’m a little skeptical, over the long term, that you’d have serious savings. But in the shorter term, you might.”