Former Obama administration Secretary of Housing and Urban Development Julian Castro once again wants to use federal housing policy as a social engineering tool to accomplish what forced busing failed to do in the 1970s.
Castro, who has struggled to gain any traction in early primary polling, proposes a four-pronged approach to strengthen affordable housing by expanding the housing choice voucher program, creating a renters’ tax credit for those not eligible for vouchers, investing in new affordable housing units and reforming local zonings which restrict efficient buildings.
Many of these would expand on the National Housing Trust Fund, which provided $173 million in grants to create affordable housing, that Castro established while leading HUD.
Castro says he would reduce America’s homelessness epidemic by setting new government housing targets, increasing assistance grants, establishing consistent government homelessness definitions and investing in a wide variety of programs designed to help individuals who are homeless or housing insecure.
Funding for The National Housing Trust Fund program Castro supported as Secretary of Housing and Urban Development came from Fannie Mae and Freddie Mac, which many conservatives objected to at the time as an unwarranted redistribution of income.
“Castro told a Senate Appropriations subcommittee that states will begin submitting requests to receive money recently contributed to the NHTF by Fannie Mae and Freddie Mac, and that the NHTF would likely begin distributing the money this summer,” DNS News reported in March 2016:
Fannie Mae and Freddie Mac have been under conservatorship of FHFA since September 2008 “to preserve and conserve their assets and property and restore them to a sound financial condition so they can continue to fulfill their statutory mission of promoting liquidity and efficiency in the nation’s housing finance markets,” according to the FHFA. The two GSEs received a combined $187.5 billion in bailout money from the government in 2008, but have since returned to profitability.
Republican lawmakers attempted to stop the lifting of the suspension of the allocation of GSE funds to the Housing Trust Fund. In April 2014, Reps. Ed Royce (R-California) and Jeb Hensarling (R-Texas) wrote a letter to Watt urging the FHFA to continue suspension of the allocation of funds.
“In taking this action, Director Watt has made a grave mistake that harms hardworking taxpayers and violates both the letter and spirit of the law,” former Rep. Jeb Hensarling (R-TX) said of the funding scheme:
Fannie Mae and Freddie Mac were at the epicenter of the 2008 financial crisis that threw millions of Americans out of work and destroyed trillions of dollars of household wealth. The nearly $200 billion bailout of Fannie and Freddie is still the biggest, costliest taxpayer-funded bailout in history, and contrary to what some claim, they have yet to ‘repay’ taxpayers one thin dime. Diverting assets from taxpayers to housing trust funds re-invites the same politically directed lending abuses that have characterized the broken GSE model and sows the seeds for the next housing crisis.
This is not the first time Castro has promoted the use of federal housing policy as a social engineering tool.
As President Obama’s Secretary of Housing and Urban Development, Castro supported one of the first efforts of what National Review’s Stanley Kurtz described as Obama’s “war on the suburbs” when he championed the Affirmatively Furthering Fair Housing Rule (AFFH) in 2015, as Breitbart News reported at the time:
The AFFH rule “gives the federal government a lever to re-engineer nearly every American neighborhood — imposing a preferred racial and ethnic composition, densifying housing, transportation, and business development in suburb and city alike, and weakening or casting aside the authority of local governments over core responsibilities, from zoning to transportation to education,” as National Review’s Stanley Kurtz put it last week.
When then-Secretary of Housing and Urban Development Shaun Donovan first proposed the AFFH rule in 2013, Paul Compton, a housing law expert and partner at the law firm Bradly Arant Boult Cummings told the Weekly Standard it is “a real shift in emphasis from ensuring that the private sector and participants in federal programs don’t unlawfully discriminate to defining the existence of racially and ethnically ‘segregated’ neighborhoods to be in themselves a violation of fair housing.”
Under this new rule, Compton said, “if a neighborhood is not integrated in some vaguely defined ratio, then that in itself is a fair housing issue.”
“In significant measure, the rule amounts to a de facto regional annexation of America’s suburbs,” National Review’s Kurtz writes. Here’s how, he says:
AFFH obligates any local jurisdiction that receives HUD funding to conduct a detailed analysis of its housing occupancy by race, ethnicity, national origin, English proficiency, and class (among other categories). Grantees must identify factors (such as zoning laws, public-housing admissions criteria, and “lack of regional collaboration”) that account for any imbalance in living patterns. Localities must also list “community assets” (such as quality schools, transportation hubs, parks, and jobs) and explain any disparities in access to such assets by race, ethnicity, national origin, English proficiency, class, and more. Localities must then develop a plan to remedy these imbalances, subject to approval by HUD.
In a July 2015 op-ed at The Washington Times titled “Experimenting with failed socialism again,” Ben Carson, now Secretary of Housing and Urban Development, criticized the AFFH rule Castro championed, writing that “Obama’s new housing rules try to accomplish what busing could not.”
Remember busing, that brilliant social experiment that was to usher in a new era of racial utopia in America? Undaunted by the failed socialist experiments of the 1980s, the Obama administration has recently implemented a new Department of Housing and Urban Development (HUD) rule designed to “desegregate” housing by withholding funds from communities that fail to demonstrate their projects “affirmatively further” fair housing. . .
The new rule would not only condition the grant of HUD funds to municipalities on building affordable housing as is the case today, but would require that such affordable housing be built primarily in wealthier neighborhoods with few current minority residents and that the new housing be aggressively marketed to minorities. In practice, the rule would fundamentally change the nature of some communities from primarily single-family to largely apartment-based areas by encouraging municipalities to strike down housing ordinances that have no overtly (or even intended) discriminatory purpose — including race-neutral zoning restrictions on lot sizes and limits on multi-unit dwellings, all in the name of promoting diversity. . .
These government-engineered attempts to legislate racial equality create consequences that often make matters worse. There are reasonable ways to use housing policy to enhance the opportunities available to lower-income citizens, but based on the history of failed socialist experiments in this country, entrusting the government to get it right can prove downright dangerous.
In January 2018, Carson, as President Trump’s Secretary of Housing and Urban Development, announced that cities would not be required to comply with the AFFH rule until 2020 at the earliest. Then in August, he announced that public comments on proposed changes to the AFFH rule would be accepted:
The Affirmatively Furthering Fair Housing (AFFH) rule, put into effect in 2015 under then-President Obama, requires jurisdictions that receive funding from the Department of Housing and Urban Development (HUD) to assess fair housing and identify solutions to discriminatory barriers in housing markets.
In a statement, HUD said it is accepting public comments on proposed changes to the rule in an effort to minimize housing regulations, give more control to local governments and increase the housing supply.
The statement said that the AFFH rule has “proved ineffective, highly prescriptive, and effectively discouraged the production of affordable housing.”
Carson said in the statement that the current rule “is actually suffocating investment in some of our most distressed neighborhoods that need our investment the most.”
In February of this year, Castro criticized Carson for delaying AFFH in a New York Magazine interview: When asked “What’s the worst thing Ben Carson has done at HUD?,” Castro said:
Probably to put on ice the Affordably Furthering Fair Housing rule, which we did in 2015. It was a groundbreaking rule to put teeth into the Fair Housing Act, and it helped to further desegregate communities in the United States by making communities that receive HUD dollars get more serious about how they’re ensuring there’s housing opportunity that’s equal throughout their boundaries. And a few months or so after the Trump administration started — Secretary Carson took over — they basically put that on ice. That’s going to have a long-term impact. It’s the first thing that ought to be reversed when the next president takes over.
“But it can’t have surprised you that he did that,” the New York Magazine interview told Castro.
“No. I mean, you know, Carson had called it social engineering. He had referred to AFFH as social engineering before. So it didn’t surprise me, I just had hoped that as somebody that grew up in poverty, challenging circumstances, himself, that he might understand the value of making sure that everybody could have good housing opportunities across the country,” Castro responded.
Castro is just one of several 2020 Democrat presidential contenders who want to use federal housing policy as a social engineering tool to accomplish what forced busing could not.
Both Sen. Kamala Harris (D-CA) and Sen. Elizabeth Warren (D-CA) have proposed similar housing policies.
As Harris continues to retreat from her attacks on former Vice President Joe Biden over his support for “voluntary” busing rather than forced busing, the issue of federal housing policy as a social engineering tool, in lieu of forced busing, is likely to become increasingly visible in the race for the 2020 Democrat presidential nomination.