Affordable housing on the cards for NY

Source : Business Times - 18 Dec 2008

Shaun Donovan, the New York official Barack Obama chose to lead the Department of Housing and Urban Development, has hands-on experience with an issue important to the president-elect: affordable housing.

As commissioner of the city’s Department of Housing Preservation and Development, Mr Donovan, 42, has received widespread acclaim for his leadership of an effort to add 165,000 reasonably priced homes to New York’s ultra-expensive housing stock by 2013.

The US$7.5 billion program has favoured an approach that eschews heavy taxpayer spending on big, bleak, government housing projects.

Instead, the city has favoured using various tools to help finance smaller, mixed-income developments built by private investors or non-profit groups.

Many of those plans have relied on leveraging smaller amounts of public dollars into much bigger investments by others.

‘He has moved our focus beyond the old public sector driven solutions by giving the starring role to the private and non-profit sectors,’ Mayor Michael Bloomberg said on Saturday.

He said that Mr Donovan ‘has shown that we can do more with less - especially in these difficult times’. Andrew Cuomo, New York’s attorney-general, issued a statement saying, ‘Secretary-nominee Donovan has a tremendous record of public service, integrity and strong leadership skills, and is the right choice to advance the Department of Housing and Urban Development under the Obama administration.’

‘I think he’s going to take HUD to another level,’ said Abby Jo Sigal, vice president of the Maryland-based Enterprise Community Partners Inc, an affordable housing group now overseeing US$1 billion in private capital as part of the city’s US$7.5 billion plan.

She suggested that New York’s housing programs could serve as a national model.

A Harvard-educated, native New Yorker with masters degrees in public administration and architecture, Mr Donovan has worked as an architect in New York and in Italy.

He was an assistant secretary for multi-family housing at HUD during the Clinton Administration, and then a visiting scholar at New York University.

Mr Donovan was appointed to head New York City’s Department of Housing Preservation and Development in 2004 after working at Prudential Mortgage Capital Co as managing director of lending and affordable housing investments.

As commissioner, Mr Donovan spearheaded initiatives to tackle the sub-prime and foreclosure crisis. He ran a city home ownership plan that, in contrast with others across the country, kept foreclosures low; of more than 17,000 new or preserved homes under this plan, only five owners have lost their properties to foreclosure.

‘He is smart, practical and knows housing like the back of his hand,’ said Senator Charles Schumer, a member of the Senate Committee on Banking, Housing and Urban Affairs.

Mr Donovan took a leave of absence as housing commissioner to campaign for Mr Obama.

Conrad Egan, president of the nonpartisan National Housing Conference, said Mr Obama’s selection of Donovan signals that he recognizes HUD can play a big role in the economic recovery.

‘It really needs to be a seat at the Cabinet table that is the principal point where housing and community development issues are brought together and resolved successfully,’ Mr Egan said. ‘HUD has been perceived as a second-tier participant in meeting that challenge.’