CREATING PATHWAYS TO OPPORTUNITY U.S. Department of Housing and Urban Development | Office of Policy Development and Research Visit PD&R’s website huduser.gov to find this report and others sponsored by HUD’s Office of Policy Development and Research (PD&R). Other services of HUD User, PD&R’s research information service, include listservs, special interest reports, bimonthly publications (best practices, significant studies from other sources), access to public use databases, and a hotline (800-245-2691) for help accessing the information you need. HUD at 50: Creating Pathways to Opportunity October 2015 Disclaimer The contents of this publication are the views of the authors and do not necessarily reflect the views or policies of the U.S. Department of Housing and Urban Development or the U.S. government. Preface Preface Lynn M. Ross When I joined the U.S. Department of Housing and Urban Development in May 2014, one of the first things my team shared with me was that HUD would be celebrating its 50th anniversary in 2015. Although there were many ideas on the table about how our office, the Office of Policy Development and Research (PD&R), should commemorate this milestone, one idea in particular immediately rose to the top of the list. Now, after more than a year in development, I am pleased to share the results of that project—HUD at 50: Creating Pathways to Opportunity. This volume looks back on HUD’s history and looks forward to ways the agency might evolve. If you are familiar with the mission and the work of PD&R, you will not be surprised to learn that this book includes thorough analyses of not only how programs succeeded, but also how they sometimes fell short and what was done in response. I hope you will take the time to engage with the analysis and ideas contained throughout this volume. We’ve organized this book so you can read the thematic chapters in any order—although you can certainly read it cover to cover. Much as HUD’s programs and policies require collaboration and teamwork, many people contributed to bringing this book to fruition. I especially want to thank Rachelle Levitt and Keith Fudge for their leadership on this effort overall, and Michelle Matuga for managing the design process. I also want to thank Claire Desjardins, Regina Gray, David Hardiman, Courtney Jones, Pamela Lee, and Chase Sackett. Each served as a chapter coordinator and provided our authors with writing, editing, and research support as needed. Thanks also go to Secretary Julián Castro and PD&R Assistant Secretary Kathy O’Regan for not only contributing the introduction and conclusion, respectively, but also for supporting this book throughout its development. Finally, PD&R is indebted to the all of the authors for volunteering their time and expertise to support this effort with their insightful work. Lynn M. Ross, AICP, serves as the Deputy Assistant Secretary for Policy Development in the Office of Policy Development and Research (PD&R) at the U.S. Department of Housing and Urban Development. Throughout her career, Ms. Ross has led housing and urban planning research, policy development, and technical assistance efforts designed to expand access to housing affordability and inclusive communities. Prior to joining HUD in 2014, Ms. Ross served as the executive director of the Terwilliger Center for Housing at the Urban Land Institute. Her prior work includes serving as chief operating officer for the National Housing Conference and the Center for Housing Policy and advisory service manager at the American Planning Association. HUD at 50: Creating Pathways to Opportunity iii As HUD reflects on 50 years of service, it is natural to consider what is next for the agency. How will our work continue to evolve to meet the needs of those we serve? What policies and programs will shape our next 50 years? Well, that is history in the making. On behalf of our entire team, I thank you for reading and invite you to please join me online at huduser.gov/hud50th for more information on HUD’s 50th anniversary. iv U.S. Department of Housing and Urban Development Contents Contents Introduction .......................................................................................................................................................1 Julián Castro Chapter 1 The Founding and Evolution of HUD: 50 Years, 1965–2015 ................................................................5 Jill Khadduri Chapter 2 Race, Poverty, and Federal Rental Housing Policy .............................................................................103 Ingrid Gould Ellen and Jessica Yager Chapter 3 Urban Development and Place ..............................................................................................................133 Raphael W. Bostic Chapter 4 Housing Finance in Retrospect ...............................................................................................................157 Susan Wachter and Arthur Acolin Chapter 5 Poverty and Vulnerable Populations .......................................................................................................185 Margery Austin Turner, Mary K. Cunningham, and Susan J. Popkin Chapter 6 Housing Policy and Demographic Change ............................................................................................219 Erika Poethig, Pamela Blumenthal, and Rolf Pendall Conclusion Places as Platforms for Opportunity: Where We Are and Where We Should Go ......................251 Katherine M. O’Regan HUD at 50: Creating Pathways to Opportunity v Introduction Introduction Julián Castro A stable home serves as the foundation of our lives. It’s where we begin every morning and where we end every night. It’s where we raise our families and build our futures. It provides us with the security to look towards a brighter tomorrow, and the peace of mind to pursue our dreams. For 50 years, the U.S. Department of Housing and Urban Development (HUD) has helped millions of Americans secure a place to call home. HUD was born during a time of great change and challenge for our nation. The elevation of the Home and Housing Finance Agency into a Cabinet-level department was first proposed by the Kennedy Administration, but its realization as part of President Johnson’s War on Poverty was undeniably rooted in the events of the mid-sixties. While millions suffered from poverty and the legacy of segregation, suburban growth and a Great Migration of African-Americans were transforming our urban landscape. At the turn of the 20th century, 11 million Americans lived in cities. By 1965, that number had grown to 40 million. Years of organizing, boycotts, and peaceful protest had resulted in the Civil Rights Act of 1964. But realizing its equal-rights provisions required confronting ugly violence, often from government authorities, as the world saw during the Selma to Montgomery marches in March 1965. When President Lyndon Johnson signed the Housing and Urban Development Act of 1965, he set a national goal to “make sure that every family in America lives in a home of dignity and a neighborhood of pride, a community of opportunity and a city of promise and hope.” Our Department has dedicated itself towards fulfilling this vision. Since HUD was created, it has helped communities around the nation address the most pressing challenges facing their residents. Though HUD’s programs have evolved over the years, our core functions—providing assisted housing, promoting responsible homeownership, ensuring fair housing, and fostering community development—have remained at the heart of our mission. Consider just a few of our accomplishments: • HUD and the Federal Housing Administration have insured more than 44 million home mortgages and more than 47,000 multifamily-project mortgages, making it possible for Americans of modest means to own a home. Julián Castro was sworn in as the 16th Secretary of the U.S. Department of Housing and Urban Development on July 28, 2014. In this role, Castro oversees 8,000 employees and a budget of $46 billion, using a performance-driven approach to achieve the Department’s mission of expanding opportunity for all Americans. Before HUD, Secretary Castro served as Mayor of the City of San Antonio. During his tenure, he became known as a national leader in urban development and in 2010 was named to the World Economic Forum’s list of Young Global Leaders. HUD at 50: Creating Pathways to Opportunity 1 • In the last 20 years, HUD has provided housing assistance to more than 35 million individuals through our Public Housing, Housing Choice Voucher, Project-Based Rental Assistance, Supportive Housing for the Elderly, and Supportive Housing for Persons with Disabilities programs. • Since 1974, HUD’s Community Development Block Grant initiative has invested nearly $150 billion toward a broad range of activities, including the rehabilitation of affordable housing, the construction of vital public facilities, and the expansion of business and employment opportunities. • Since the passage of the McKinney Homeless Assistance Act in 1987, HUD has awarded more than $14 billion to thousands of local housing and service organizations that combat homelessness across the United States. • In the last 20 years, the investigative efforts of HUD and its state and local partners have fought housing discrimination on behalf of more than 90,000 Americans, resulting in more than $105 million in compensation. • HUD has funded the building of nearly 87,000 housing units in Native American reservations and tribal areas, and currently