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Archive for the ‘HUD’ Category

I was a bit of a juvenile delinquent.

  • I semi-confessed that I may have set off fireworks in a stairwell at my high school.
  • And I’ve already confessed my role in an “attack” on a float during a homecoming parade.
  • So I may as well admit that I got in trouble during college for having a pet snake in my dorm room.

Given that last bullet point, you would think I would sympathize with people who want to bring pets to school.

And I do, but I don’t sympathize with the notion that the federal government should compel colleges to allow pets – even if they’re for “emotional support.”

Yet that’s exactly what’s happening, thanks to some bureaucrats at a Department that shouldn’t exist. Here are some blurbs from the Wall Street Journal about a new breakthrough in human rights.

College freshman suffering from separation anxiety, take heart: The federal government says universities have an obligation to admit “emotional support” animals into school housing. …emotional support animals (dogs, mostly) provide therapy through companionship and affection.

The pinheads at the Department of Housing and Urban Development say this is required by the Fair Housing Act.

Housing providers must offer people with disabilities a “reasonable accommodation” for emotional support animals under both the Fair Housing Act and Section 504 of the Rehabilitation Act of 1974, the U.S. Department of Housing and Urban Development said in a notice to its regional offices late last month. …The April 25 notice was sent about a week after a federal judge ruled that student housing is covered by the Fair Housing Act, in a lawsuit filed by HUD against the University of Nebraska, on behalf of a student there.

Meet Fido, your new dorm neighbor

Best of all, you can bring any animal you want so long as it doesn’t have a track record of bad conduct.

Housing providers can’t exclude animals based on breed, size or weight. They can, however, refuse an animal that poses a direct threat to the health and safety of others or would wreck havoc on the property, but such refusals must be based on “objective evidence about the specific animal’s actual conduct – not on mere speculation or fear,” the notice says.

So that doberman pinscher is innocent until proven guilty!

Another great development in “human rights” around the world. Indeed, it belongs with these momentous breakthroughs.

Speaking of subsidized birth control, you can enjoy some laughs at Sandra Fluke with this great Reason video, this funny cartoon, and four more jokes here.

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As part of my “Question of the Week” series, I had to decide which department of the federal government was most deserving of abolition.

With a target-rich environment of waste, fraud, and abuse in Washington, that wasn’t an easy question to answer. But I decided to pick the Department of Housing and Urban Development, and I had some good reasons for that choice.

Well, thanks to the sequester, we can say that we’ve achieved 1.9 percent of our goal. Here are some blurbs from a Reuters report.

The U.S. Department of Housing and Urban Development on Monday said it plans to shut its doors for a total of seven days between May and September due to budget cuts and will furlough more than 9,000 employees on those days. …The agency will determine the exact shutdown dates at a later time.

The motto of special interests

This is what I call a good start.

You won’t be surprised to learn, though, that the bureaucracy is whining that these tiny cutbacks will have horrible effects.

In cataloging the impact of sequestration to a Senate panel last month, HUD Secretary Shaun Donovan warned lawmakers that the government spending cuts would have harsh consequences for housing programs and could threaten Superstorm Sandy recovery efforts in the U.S. Northeast. “The ripple effects are enormous because of how central housing is to our economy,” Donovan told lawmakers.

Well, I hope that the “cuts” will have “harsh consequences for housing programs.” I’ve read Article I, Section VIII, of the Constitution, and nowhere does it say that housing is a function of the federal government.

And I’ve also explained that disaster relief is not Washington’s responsibility.

Most worthless department in Washington?

Last but not least, I agree that housing is important to our economy. But that’s precisely why I don’t want the federal government involved.

Didn’t we learn from the Fannie Mae/Freddie Mac debacle that bad things happen when the federal government tries to subsidize that sector.

Heck, I don’t even want tax preferences for housing.

No wonder I picked the Department of Housing and Urban Development for the background for my video on bloated and wasteful bureaucracy.

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I’ve previously explained that the federal government should have no role in housing and that the Department of Housing and Urban Development should be abolished.

If I haven’t convinced you, then you should watch this powerful video from the folks at Reason TV.

What an outrage.

Politicians create a program, claiming that they will help the less fortunate. But as is so often the case, it’s a scam that winds up hurting poor people and instead lines the pockets of politically connected rich people.

Using the coercive power of government to redistribute from rich to poor is economically misguided. Using the coercive power of government to redistribute from poor to rich is far worse – a combination of bad economic policy and complete moral depravity.

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I’ve already explained why the Department of Housing and Urban Development should be eliminated, but a superb column in the Wall Street Journal by my old friend Jim Bovard has my blood boiling.

After reading Jim’s piece, I no longer want to merely abolish HUD. I want to bulldoze the building, cover the ground with six feet of broken glass and rusty nails, and then add a foot of salt to make sure nothing can possibly spring forth again.

In the 1990s, the feds were embarrassed by skyrocketing crime rates in public housing—up to 10 times the national average, according to HUD studies and many newspaper reports. The government’s response was to hand out vouchers to residents…, dispersing them to safer and more upscale locales. Section 8’s budget soared to $19 billion this year from $7 billion in 1994. HUD now picks up the rent for more than two million households nationwide; tenants pay 30% of their income toward rent and utilities while the feds pay the rest. Section 8 recipients receive monthly rental subsidies of up to $2,851 in the Stamford-Norwalk, Conn., area, $2,764 in Honolulu and $2,582 in Columbia, Md. But the dispersal of public housing residents to quieter neighborhoods has failed to weed out the criminal element that made life miserable for most residents of the projects. “Homicide was simply moved to a new location, not eliminated,” concluded University of Louisville criminologist Geetha Suresh in a 2009 article in Homicide Studies. In Louisville, Memphis, and other cities, violent crime skyrocketed in neighborhoods where Section 8 recipients resettled. After a four-year investigation, the Indianapolis Housing Authority (IHA) in 2006 linked 80% of criminal homicides in Marion County, Ind., to individuals fraudulently obtaining federal assistance “in either the public housing program or the Section 8 program administered by the agency.”

In other words, the federal government decided that it wasn’t doing enough damage by being a slumlord. It then decided to directly subsidize rents (often at scandalously high levels), often for the benefit of criminals.

Not surprisingly, proponents of big government are playing the race card, claiming that opposition to rental subsidies is a form of discrimination since a disproportionate share of recipients are minorities. Yet this controversy actually pits law-abiding people, regardless of color, against social-engineering bureaucrats.

…middle-class blacks are the program’s least inhibited critics. Sheldon Carter of Antelope Valley, Calif., testified at a recent public hearing on local Section 8 controversies: “This is not a racial issue. It is a color issue. The color is green and it’s my dollars.” Shirlee Bolds told Iowa’s Dubuque Telegraph Herald in 2009: “I moved away from the city to get away from all this crap. Dubuque’s getting rough. I think it’s turning into a little Chicago, like they’re bringing the street rep here.” Remarkably, HUD seems bent on creating a new civil right—the right to raise hell in subsidized housing in nice neighborhoods.

The bureaucracy’s perverse definition of civil rights is not a recent development, as illustrated by this previous post critiquing HUD’s bean-counting mentality.

The moral of the story, though, is that the federal government has no business being involved in housing. Jim’s closing sentences are a pretty good summary of this outrageous situation.

The Obama administration is now launching a pilot program giving local housing authorities wide discretion to pay higher rent subsidies to allow Section 8 beneficiaries to move into even more affluent zip codes. Hasn’t this program helped wreck enough neighborhoods?

Heck, let’s also add arsenic, lead, and strychnine to the glass, nails, and salt. Maybe some radioactive material as well. No sense taking any chances.

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Welcome Instapundit readers. If you want to get even more upset, here’s a big list of posts about waste, fraud, and abuse, including one about Social Security bureaucrats enjoying a $700,000 junket and another about a lawyer getting $25,000 of “stimulus” money for writing a two-sentence memo.

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While I’ve been somewhat critical of Senator Coburn’s willingness to raise taxes, I’ve never doubted that he is a sincere and tireless fighter for smaller government.

Indeed, his staff periodically share examples of government waste that boggle the mind, though I don’t share many of them on the blog since I’m afraid people will become desensitized to the sleazy boondoggles that are so beloved by lawmakers.

However, the last email from Senator Coburn’s office included a story that shows, in a rather remarkable fashion, how a bloated federal government has a corrupting impact on the rest of society.

According to a Wisconsin newspaper, a local governments is trying to “sell” federal funds, sort of like how I used to scalp football tickets as a student.

River Hills, Milwaukee County’s richest suburb, has found little use for what has become an annual allocation of about $20,000 in federal community development block grant money. So village leaders instead have cut deals with other suburbs to lend or transfer the grant money and have even sought unsuccessfully to sell the River Hills block grant allocation to another community. …Assistant Corporation Counsel John Jorgensen said selling the HUD allocation wouldn’t break any rules or laws, as long as the grant money is used for allowable projects. In a memo to county supervisors, Jorgensen said his opinion matched advice he’d gotten from local HUD officials. But Sullivan said the Milwaukee field office had questioned the practice in the past. Officials from the Milwaukee office of the Department of Housing and Urban Development declined to comment.

The Department of Housing and Urban Development has always been near the top of my list of government entities that should be shut down. This latest scam is merely the cherry on the ice-cream sundae of the argument to eliminate HUD as soon as possible.

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Very few things that happen in Washington are legitimate functions of the federal government. I’ve already posted about the need to dismantle the Department of Transportation and send it back to the states, but some things  shouldn’t even be handled by state and local governments. Housing is a perfect example. There should be no role for government in building or subsidizing housing, period.

But I’ll be happy if we can simply get rid of the Department of Housing and Urban Development in Washington. This $53 billion turkey should be the top target for GOP reformers.

Fealty to the Constitution should be the only reason lawmakers need to abolish HUD, but if they’re looking for some tangible examples of how the Department squanders money, J.P. Freire of the Washington Examiner opines on the issue, citing some devastating findings in a report from the Center for Public Integrity.

In the more than 3,000 public housing agencies nationwide funded by the Department of Housing and Urban Development, and particularly inside the 172 that HUD considers the most troubled, ABC News and the Center for Public Integrity found a struggle to combat theft, corruption, and mismanagement. According to the report, one official embezzled $900,000 and bought a mansion. Other funds went to support sex workers. In other words, this is a perfect illustration of why recommending cuts to such assistance programs is not heartless but actually wise — waste is rampant:

The problems are widespread, from an executive in New Orleans convicted of embezzling more than $900,000 in housing money around the time he bought a lavish Florida mansion to federal funds wrongly being spent to provide housing for sex offenders or to pay vouchers to residents long since dead. Despite red flags from its own internal watchdog, HUD has continued to plow fresh federal dollars into these troubled agencies, including $218 million in stimulus funds since 2009, the joint investigation found.

These are horrific examples of government waste, and they are tailor-made for soundbites and blog posts, but waste, fraud, and corruption are not the real issues. HUD should be abolished even if every penny of the budget could be accounted for. If Republicans can’t get rid of HUD, voters should get rid of Republicans.

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For those who favor truth in labeling, the housing meltdown and related financial crisis and economic downturn should be brightly stamped with the phrase, “Made in Washington.” Here are two good pieces of evidence. First, this paper from the American Enterprise Institute is one of the best big-picture analyses on the issue. It identifies how “affordable lending” policies are at the heart of the problem. Here’s an excerpt from the abstract.

Government policies forced a systematic industry-wide loosening of underwriting standards in an effort to promote affordable housing. This paper documents how policies over a period of decades were responsible for causing a material increase in homeowner leverage through the use of low or no down payments, increased debt ratios, no loan amortization, low credit scores and other weakened underwriting standards associated with NTMs. These policies were legislated by Congress, promoted by HUD and other regulators responsible for their enforcement, and broadly adopted by Fannie Mae and Freddie Mac (the GSEs) and the much of the rest mortgage finance industry by the early 2000s. Federal policies also promoted the growth of overleveraged loan funding institutions, led by the GSEs, along with highly leveraged private mortgage backed securities and structured finance transactions. HUD’s policy of continually and disproportionately increasing the GSEs’ goals for low- and very-low income borrowers led to further loosening of lending standards causing most industry participants to reach further down the demand curve and originate even more NTMs. As prices rose at a faster pace, an affordability gap developed, leading to further increases in leverage and home prices. Once the price boom slowed, loan defaults on NTMs quickly increased leading to a freeze-up of the private MBS market. A broad collapse of home prices followed.

Then, to show a good example of Mitchell’s Law, which is how bad government policy leads to more government policy, here’s a story about the fiasco surrounding President Obama’s mortgage subsidy program. The government is so bloody incompetent, it can’t even give away money effectively.

Nearly half of the 1.3 million homeowners who enrolled in the Obama administration’s flagship mortgage-relief program have fallen out. The program is intended to help those at risk of foreclosure by lowering their monthly mortgage payments. Friday’s report from the Treasury Department suggests the $75 billion government effort is failing to slow the tide of foreclosures in the United States, economists say. More than 2.3 million homes have been repossessed by lenders since the recession began in December 2007, according to foreclosure listing service RealtyTrac Inc. Economists expect the number of foreclosures to grow well into next year. “The government program as currently structured is petering out. It is taking in fewer homeowners, more are dropping out and fewer people are ending up in permanent modifications,” said Mark Zandi, chief economist at Moody’s Analytics. …Many borrowers have complained that the government program is a bureaucratic nightmare. They say banks often lose their documents and then claim borrowers did not send back the necessary paperwork. The banking industry said borrowers weren’t sending back their paperwork. They also have accused the Obama administration of initially pressuring them to sign up borrowers without insisting first on proof of their income. When banks later moved to collect the information, many troubled homeowners were disqualified or dropped out. Obama officials dispute that they pressured banks. They have defended the program, saying lenders are making more significant cuts to borrowers’ monthly payments than before the program was launched. And some of the largest mortgage companies in the program have offered alternative programs to those who fell out.

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