The Department of Housing and Urban Development has been around since 1965. It’s goal is “to create strong, sustainable, inclusive communities and quality affordable homes for all” according to its mission statement. It oversees a variety of programs and services intended to make affordable housing available to lower income families and to prevent housing discrimination against minority groups, among a great deal of other things. It is responsible for providing mission guidance for Fannie Mae and Freddie Mac. The Federal Housing Administration, which provides mortgage insurance and allows many first time home buyers to purchase homes. If Senator Rand Paul of Kentucky has his way, it will be eliminated.
From a Housingwire article by Jon Prior I learned of this proposed bill. Said Sen. Paul:
“By removing programs that are beyond the constitutional role of the federal government, such as education and housing, we are cutting nearly 40% of our projected deficit and removing the big-government bureaucrats who stand in the way of efficiency in our federal government”.
It isn’t entirely clear to me who, or what entities would pick up the slack left behind by HUD or FHA. Perhaps nobody.
The bill would cut $500 billion worth of spending from the Federal budget, cutting the defense budget, merging the Energy Department with the Department of Defense (?!), gutting the Department of Education, greatly cutting the Department of Agriculture’s food stamp program, cutting the budget for the federal court system, cutting the budget for the Food and Drug Administration, eliminating the Consumer Product Safety Commission, the Corporation for Public Broadcasting (goodbye Sesame Street and Mr. Rogers), and the national endowment for the arts.
Sen. Paul’s communications director clarified the proposal thusly: “this is not a satire.” I think that says it all.
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Mike Fedele
January 27, 2011 @ 2:22 pm
HUD should really be called “Hastening Urban Decline” the programs it wastes taxpayer funds on just distorts housing prices ensuring they are higher than they would normally be and socializes risk..after what we just went through with the subprime meltdown..it should be obvious the Federal Govt has no business distorting prices-the free market works just fine..it might mean less Greenspanvilles but that is a good thing. Allowing savings to be spent by real productive endeavors in the private sector creates real wealth and jobs…with a Federal Deficit of $1.5T and total debt of over $100T…not getting rid of HUD would be immoral..and let’s not forget this agency isn’t even Constitutional to begin with..
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Walt
January 27, 2011 @ 2:29 pm
How well has HUD accomplished it’s mission? Answer – it hasn’t, and never will. It is bureaucracy for the sake of bureaucracy.
How did we survive before HUD in 1965? How did we durvive before the department of education in the mid 1970s? Answer: just fine. Somehow we put a man on the moon without a dept of education. Now with this department in place we are lagging many other countries.
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Ken Montville
January 27, 2011 @ 3:13 pm
Rand Paul is a radical libertarian who can best be described as a Tea Partier who got lucky. Now, he has 6 years to cause mischief. Unfortunately, for Rand, there are more Senators that understand how devastating this would be to the economy in a general sense.
Eliminating HUD, privatizing Fannie and Freddie all sounds good for the “up by your bootstraps” DIY wingnuts but the sad fact is that HUD provides a lot of support for home ownership.
Sure, we were doing fine when houses where $12,000 and kids stopped going to school after 9th grade to work in the factories (for the rest of their lives). Things have changed.
I am totally on board with less regulation but pulling the plug would truly be throwing the baby out with the bath water.
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Susanne Novak
January 28, 2011 @ 9:59 am
I have to say that HUD is spending a lot of their resources on anti-discrimination and trying to get everyone into their own home. Although this may have been a noble cause a while ago, many of these programs have created the housing crisis we find ourselves in right now.
In my experience as a real estate agent I have not seen any discrimination against home buyers that are credit worthy. The fact is that many people just have lousy credit, because they can’t manage their money. And they should not be able to borrow money they can’t handle responsibly, like a home loan.
HUD’s guidance to Fannie and Freddie resulted in humongous backlog of foreclosed homes, which will continue to depress the real estate market for years to come, and created large deficits for both Fannie and Freddie.
I have to say, however, that without HUD’s FHA loan guarantees we would sell 40% fewer homes in the current restricted lending environment.
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Mike Fedele
January 28, 2011 @ 10:25 am
Wow I didn’t realize HUD produced anything? Or for that matter I love how progressives say “Govt should do this or that”..well folks Govt has NO money..it can tax or borrow or print…borrowing and printing is immoral that is places burdens on future generations and steals from savers and poor/middle class folks the most…if you want these programs..raise taxes to pay for them…at least that is moral.
Of course neither party will do that..the big govt crowd had been buying votes for decades with borrowed money and the rest of the world is about it with the US exporting our inflation…
Why do we need HUD? Cities used to be economic engines..now are you saying they are economic basket cases that only can be “saved” by the Feds? Why not ask why they are economic basket cases? HUD just distorts prices continuing problems..it doesn’t solve anything..
Shut this beast down along with the DOE, HHS, ATF and farm subsidizes…
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