by Faiz Shakir, Amanda Terkel, Satyam Khanna, Matt Corley, Benjamin Armbruster, Ali Frick, and Ryan Powers
Commitment To Affordable Housing
In his weekly address on Saturday, President-elect Obama named New York City housing commissioner Shaun Donovan as his pick to run the Department of Housing and Urban Development (HUD), saying that few departments would be "more essential" in his effort "to stem the rising tide of foreclosures and strengthen our economy." "With experience that stretches from the public sector to the private sector to academia, Shaun will bring to this important post fresh thinking, unencumbered by old ideology and outdated ideas," said Obama. Before New York City Mayor Michael Bloomberg tapped him to run "what has been called the nation's largest affordable-housing plan," Donovan served at HUD in the Clinton administration, as both acting federal housing commissioner and deputy assistant secretary for multifamily housing. Politicians and housing advocates widely hailed Donovan's nomination. "Shaun Donovan is a brilliant choice for HUD. He is an expert on the full range of housing issues and has a proven track record of getting things done," said Sheila Crowley, president of the National Low Income Housing Coalition. "Thankfully, President-elect Obama has chosen a HUD secretary that is uniquely qualified to take on this task," said Sen. Patty Murray (D-WA), who chairs the subcommittee that controls HUD appropriations. If he is confirmed, Donovan will be a lead player in addressing "the worst economic climate in decades" as "American homeowners are reeling from plummeting home values and rising unemployment."
AMERICA'S HOUSING WOES: At this moment, "the U.S. economy is caught in a vicious downward spiral of declining home prices, escalating foreclosures, rising losses on mortgage-backed securities, and disappearing liquidity." In his announcement, Obama noted that currently "one in ten families who owns a home is now in some form of distress, the most ever recorded." Last month, "one in every 488 households faced some form of foreclosure filing." In the past year, cities across the nation have seen "a spike" in family homelessness, largely due to foreclosures. Credit Suisse forecast earlier this month that "8.1 million mortgages will be in foreclosure over the next four years, representing 16% of all mortgages." At the same time, "more borrowers are delaying mortgage payments for longer periods of time than in recent history." In October, the real estate research firm First American CoreLogic reported that "at least 7.5 million Americans owe more on their mortgages than their homes are currently worth." On top of that, another 2.1 million own homes that are "worth less than 5% more than the mortgages they're paying on them." "Problems in the housing market are not limited to those facing default or foreclosure," noted Andrew Jakobovics of the Center for American Progress. As housing prices fall, "homeowners across the country are losing the equity they have built up in their homes." As of October, inflation-adjusted house prices fell to mid-2003 levels at the national level. Housing sales and new construction are also struggling at lethargic rates.
HOUSING CENTRAL TO FIXING THE ECONOMY: In his announcement, Obama explicitly tied the housing crisis to the financial crisis, saying that "expanding access to affordable housing isn't just about caring for the least fortunate among us and strengthening our middle class -- it's about ending our housing mess, climbing out of our financial crisis, and putting our economy on the path to long-term growth and prosperity." As the Center for American Progress has long advocated, the mortgage mess must be addressed in order to rescue the economy. Housing experts say that Obama's choice of Donovan "may signal a more sweeping role for HUD" that could include "a more direct role in the oversight of the affordable housing industry." Donovan has demonstrated that he clearly understands the issues he will need to forcefully address should he be confirmed. Politico's Glenn Thrush reported this weekend that in 2004 Donovan foresaw the subprime mortgage crisis. "The future looked bright to almost everyone -- but not to Donovan, who was planning for the looming disaster," wrote Thrush. Years later, "Donovan is seen nationally as a pioneer in finding new ways to create and preserve low-cost housing."
BUSH'S MESSY HUD: Should he be confirmed, Donovan will inherit a housing department that has been badly disgraced by the Bush administration. In March 2008, Bush's second HUD secretary, Alphonso Jackson, resigned from his position as he faced ongoing probes "by a federal grand jury, the Justice Department, the FBI and the HUD inspector general." Under Jackson's watch, the nation spiraled into the worst housing crisis since the Great Depression, though Jackson insisted that increasing mortgage failures were simply a short-term "correction." Upon his resignation, "more than 30 current and former HUD officials and housing experts" told the Washington Post that Jackson "encouraged policies that threatened to exacerbate the mortgage crisis." Instead of working to ameliorate the housing crisis, Jackson focused his efforts on awarding lucrative no-bid contracts to his golfing buddies and erecting giant photo homages to himself. When Jackson resigned, Bush appointed then-chief of the Small Business Administration (SBA) Steven Preston to replace him. Preston, who is known to be a "Bush loyalist," had "no apparent housing background" when he was nominated for the position.
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New York state officials will now let "married same-sex couples list both their names on their children's birth certificates."
THINK
PROGRESS: Vice President Cheney
will reward Fox News's Chris Wallace with an exclusive interview next
Sunday.
WONK
ROOM: The impending human
capital crisis: "Torrent of American
talent" is being "reduced to a trickle."
YGLESIAS:
What "equality" in the U.S. really looks like.
DAILY
DISH: Reuel Marc Gerecht uses
six different euphemisms to describe
torture in an op-ed defending it.
NEW
YORK: To compensate for a budget
deficit, Gov. David Paterson
(D) "will propose a $4 billion package of taxes and fees on a range of
items, from sugary soft drinks made by Coca-Cola and Pepsi to luxury
items like furs and boats."
CALIFORNIA:
Los Angeles Mayor Antonio Villaraigosa ponders plan for voluntary
layoffs of city workers.
ECONOMY: Thirty
states are at risk of having unemployment benefits become insolvent
over the next few months.
"[I]f you think we're going to spend a billion dollars of our money
[rebuilding Iraq], you are sadly mistaken."
-- Former defense secretary Donald Rumsfeld, 2003
VERSUS
"An unpublished 513-page federal history of the American-led
reconstruction of Iraq depicts...a $100 billion failure."
-- New York Times, 12/13/08
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