How immigration reform could help the housing market / The Washington Post

In Democratic circles, Julian Castro was a well-known name even before President Obama tapped him to lead the Department of Housing and Urban Development last spring.

The former San Antonio mayor – and identical twin of Rep. Joaquin Castro (D-Tex.) – catapulted into the national spotlight when he delivered the keynote address at the 2012 Democratic National Convention. And his name often comes up as a possible contender for a big job under the next Democratic president.

About three months into his time at HUD, Castro refuses to talk about the next job, insisting that he’s focused on the one he’s got. We spoke to the Secretary about his agenda as he gains his footing in Washington. This interview was edited for length and clarity.

Dina ElBoghdady: You’ve said that Hispanics are key to the housing market’s future, which is why the nation needs immigration reform. Please explain the connection between the two and how the president’s decision to delay reform until after Tuesday’s elections might affect the chances of a major overhaul?

Julian Castro: My hope is that the overall housing market will continue to get stronger. The Hispanic community is an important component because it is the fastest-growing segment of the population. [Harvard’s Joint Center for Housing Studies projects that Hispanics will account for 40 percent of total household growth from 2015 t0 2025.] Having sound immigration policy is important because it gives more certainty to the 11 million or so folks who are here, who are undocumented. And if the president and/or Congress are able to provide more certainty, you will see more folks who now are in limbo deciding in the future to actually purchase a home.  My hope is that no matter what happens on Tuesday, in short order there will be immigration reform. The president has said very clearly that he’s going to take significant executive action, and my hope is that ultimately Congress will follow suit and pass comprehensive immigration reform within this next term.

Sponsor Generated Content The parking of tomorrow — today!

Through technology and data, parking systems are improving city congestion. READ MORE

Expanding homeownership is at the top of your agenda. Yet HUD’s Federal Housing Administration, a popular source of low down payment loans, has raised the fees it charges borrowers several times since 2010. Industry groups say the high fees are shutting qualified borrowers out of the housing market. Do you plan on lowering the fees any time soon?

I’ll reserve my judgment on that until we have the 2015 [independent audit of FHA’s finances] on Nov. 15. I believe that reasonable steps have been taken to insure the health of the fund, and there’s no question that a consequence of that is less affordability. However, with the increased strength of the [FHA’s finances],  I believe that the future looks brighter for affordability.

[Note: When lending sources dried up during the financial crisis, the FHA propped up the housing market by insuring the lenders it works with against losses and enticing them back into the market. But FHA’s default rate shot up as its loan volume expanded, depleting its cash reserves to levels below what is required by law. In September 2013, FHA tapped taxpayer money to cover its losses for the first time in the agency’s 80-year history. The president’s most recent budget request projected that FHA will not need taxpayer dollars to cover losses in fiscal 2015. An independent audit will assess the agency’s finances.]

This week, a National Association of Realtors survey found that the share of first-time home buyers is at the lowest level in 27 years. Has the administration considered pushing to revive the tax credit for first-time home buyers, which helped spur home sales when it was in place a few years ago?

There has not been much conversation on that. We’ve been focused on what we can accomplish at FHA, and I know [Federal Housing Finance Agency Director Mel Watt] has been focused on what they can do at FHFA.

During your confirmation hearings, you refused to take a position on the use of eminent domain as a tool for localities to wrest underwater mortgages away from investors so that some of the loan debt can be forgiven. Have you formed an opinion on the issue since then?

We’re evaluating what is happening on the ground. The fact is that’s a very limited-use tool in a handful of local communities. Very, very few have actually implemented it or tried to implement it, and my understanding is that one or two of those that have tried backed off because of legal challenges. This is an issue of local and state concern that is being determined at the local level.

HUD ranked near the bottom in a recent survey that asked federal employees in large departments and agencies to evaluate workplace satisfaction. What are you doing to help improve the situation?

I was glad to see that HUD did improve from last year on 37 out of the 71 questions that were asked. However, it’s very clear that there needs to be a lot more improvement. I’m visiting all of our regional offices, and I’ve visited a number of field offices to solicit ideas and suggestions from employees there. We’re having regular employee town halls so that we can keep employees informed on developments at HUD. We’re looking at ways to provide better training opportunities for employees and focusing on employees who have been here less than five years. If they have a good experience in the beginning, they are more likely to stay on the job, stay longer and be productive. In fiscal 2014, we hired 1,036 people. About 40 percent were internal hires. Some moved up or moved laterally. The issue for HUD, though, is even with that we had a net loss of employees of 250 people because the attrition rate is high. Part of it is people retiring.”

Link: http://www.washingtonpost.com/blogs/wonkblog/wp/2014/11/04/how-immigration-reform-could-help-the-housing-market/?wpisrc=nl-wnkpm&wpmm=1

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s