Obama Taps Donovan to Head HUD in His Administration

RISMEDIA, Dec. 16, 2008-(MCT/RISMedia)-A Harvard-educated architect is Barack Obama’s choice to head his housing agency, one which the president-elect says will play a key role in tackling the mortgage crisis in his administration.

Shaun Donovan will bring “fresh thinking” to the Department of Housing and Urban Development, Obama said Saturday, pledging that his nominee will abandon “old ideology and outdated ideas” that have stymied some of the agency’s past efforts.

“We can’t keep throwing money at the problem, hoping for a different result,” Obama said in his weekly radio address. “We need to approach the old challenge of affordable housing with new energy, new ideas, and a new, efficient style of leadership.”

Donovan, 42, a former HUD official, is credited with increasing the affordable options in New York as head of the city’s Department of Housing Preservation and Development.

The announcement comes as Obama nears his informal Christmas-week deadline for assembling a Cabinet, a task that largely has been completed. A handful of key nominees is expected in the coming days, including appointees for the departments of Labor and Education.

But the HUD announcement effectively completes the team of advisers whom Obama intends to rely on most heavily to shape his administration’s response to the economic crisis, an agenda dwarfing all others as he prepares to take office in January.

Obama assembled his economic team as one of his first priorities after election, naming his treasury secretary, budget director and economic council director and setting them to work in recent weeks.

In naming Donovan, Obama said he wants his HUD secretary to take a lead role in stemming the tide of foreclosures and increasing the number of families who can remain in their homes amid the crisis.

“This plan will only work with a comprehensive, coordinated federal effort to make it a reality,” Obama said. “We need every part of our government working together-from the Treasury Department to the Federal Deposit Insurance Corp., the agency that protects the money you’ve put in the bank. And few will be more essential to this effort than the Department of Housing and Urban Development.”

Donovan has worked in both business and non-profit sectors and at HUD during the Clinton administration, having served as deputy assistant secretary for the office of Multifamily Housing. He later worked at Prudential Mortgage Capital Co. as managing director of its FHA lending and affordable housing investments, before Mayor Michael Bloomberg named him commissioner of New York’s Department of Housing Preservation and Development in 2004.

Today, Donovan leads the largest municipal affordable housing program in the nation. The agency’s $7.5 billion plan to build and preserve some 165,000 units of affordable housing reached its halfway point this fall.

He has been a visiting scholar at New York University, researching the preservation of federally assisted housing, and also has written about housing policy at the Joint Center for Housing Studies at Harvard. He holds master’s degrees in public administration and architecture from Harvard.

If the Senate confirms him, Donovan would assume his post amid the worst economic climate in decades. American homeowners are reeling from plummeting home values and rising unemployment. One in every 488 households faced some form of foreclosure filing last month, and more borrowers are delaying mortgage payments for longer periods than in recent history.

Obama has made it clear that he thinks HUD can do more than it has done in the past. “Since its founding, HUD has been dedicated to tearing down barriers in access to affordable housing,” he said Saturday. “Too often, these efforts have had mixed results.”

Experts say Obama’s choice-along with the job description that he has offered-may signal a more sweeping role for HUD.

“What he may be speaking of, which would certainly be interesting and welcome by many sectors of the housing industry, would be a more direct role in the oversight of the affordable housing industry,” said Jim Parenti, a former HUD official and now associate dean at Georgetown University. Donovan would bring “street credibility” to that effort, Parenti predicted, because of his work in both public and private sectors.

“Strong leadership is needed at this critical time in our economy and in the housing market, and we believe Shaun Donovan will bring that leadership to the Department,” said NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth. NAR has noted that a proven leader is critical for HUD during these troubled times in the nation’s housing market and to ensure the current deteriorating environment is not repeated.

“Shaun Donovan is an acknowledged expert in housing with a record of solving challenges at HUD and the New York City Department of Housing, Preservation and Development,” McMillan said. “In addition, his hands-on experience in the private and nonprofit sectors will be extremely helpful.”

NAR says that it recognizes the importance of Donovan’s experience in housing and the critical role he will play on President-elect Obama’s team as they prepare to grapple with the economic problems confronting the country. “NAR stands ready to work with Secretary-Designate Donovan to restore confidence in the housing market and rebuild the American dream of homeownership,” said McMillan.

Donovan has a record of boosting affordable housing options, particularly rentals, said John Garvin, who until recently worked as deputy assistant secretary for HUD’s multifamily housing programs.

“I’m impressed to see somebody with a multifamily focus in the job,” Garvin said. “There’s a huge need out there. … As people are losing homes, it’s important that they have an affordable option.”