Donovan Makes News With Preview of Foreclosure Prevention Program | Feb 13th at 10:06am
It is amazing that a HUD Secretary is speaking like an advocate. Donovan is known in NYC for his championing of inclusionary zoning (or at least a unique local variant that he implemented here) and of guiding Mayor Bloomberg’s major investment in affordable housing. I’m not a 100% fan of his efforts, but he brought a needed change when he stepped into the role of Housing Commissioner here in NYC in 2004.
He laid out three five [thanks Duncan] major federal efforts that will be part of a forthcoming announcement by President Obama about a major initiative to prevent foreclosures, which is the most newsworthy thing (from a non-wonk perspective) that happened today:
- Accelerating loan modifications (presumably by introducing a major policy “stick” that forces banks to the table)
- Setting and enforcing industry-wide standards for modifications (referencing the pitiful track record the private mortgage industry has done- 56% of mortgages modified by the private market are delinquent after 6 months)
- Targeted reform of bankruptcy laws (presumably forcing banks to write down the amount of housing debt people have to the now-much-lower value of the home, which would give delinquent borrowers a much stronger negotiating position modifications)
- Making sure capital is available for mortgages (which sounds to me like claiming TARP II as part of this)
- Mitigating the impacts of foreclosures by adding more funding to prevent rising family homelessness and getting people to move into foreclosed homes to prevent the spread of blight (an expansion of the current Neighborhood Stabilization Program)
This is where the major action in housing policy will be in the next few months.
But from a longer term perspective, the two most revolutionary things Donovan mentioned were “affirmatively” increasing access to “neighborhoods of choice” (the flipside of “high-poverty neighborhoods”) and using HUD’s portfolio and insurance programs for sustainability efforts. On increasing access to neighborhoods of choice, he emphasized removing zoning barriers to creating rental housing. Depending on the methods used, Ed Glaeser might do a backflip. The Apollo Alliance and Green for All may already be doing backflips over the jobs that the public housing and affordable housing rental housing energy retrofits would create.
Michael Freedman-Schnapp is a candidate for a Masters in Urban Planning at NYU's Wagner School for Public Service. He is the Senior Policy Associate for the New York Industrial Retention Network, where he works on keeping blue-collar jobs in New York City and encouraging the growth of the local green economy.
