The primary mission of the Department of Housing and Urban Development (HUD), says its web site, “is to increase homeownership, support community development and increase access to affordable housing free from discrimination.” But in 1992, Congress also gave HUD the responsibility of overseeing and regulating Fannie Mae and Freddie Mac, the “government-sponsored enterprises” (GSEs) that buy mortgages from banks.
The purpose of the GSEs is to provide banks with the same kind of assurance about the mortgage market that the Federal Deposit Insurance Corporation is supposed to provide for bank depositors. They are supposed to be for-profit corporations, but with the implicit backing of the federal government, Congress worried that they might take inappropriate risks. HUD oversight was supposed to guard against that.
But the political reality is that secretaries of HUD don’t get rewarded for announcing that Fannie Mae didn’t go bankrupt again this year. Instead, they are pressured by Congress to announce that homeownership rates — especially for historically disadvantaged people such as blacks — are rising.
No doubt HUD secretaries in the 1990s were acutely aware that homeownership rates in California, the nation’s most populous state, had been declining since 1960. (Oregon’s too.) Of course, the Antiplanner has shown this is due to the growth-management planning and other land-use regulation in these states.
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HUD promotes regulatory reform, but it can’t do anything to enforce it. So it is not surprising that Henry Cisneros, Bill Clinton’s first HUD secretary, decided to use the authority he did have to try to offset the declining affordability of housing in California and other states with growth-management planning.
As revealed in a recent issue of Village Voice, in 1995 Cisneros used his new regulatory powers to order the GSEs to buy a higher percentage of high-risk loans. Specifically, they were told that 42 percent of the mortgages they bought must be for low- and moderate-income families. In 2000, Cisneros’ successor, Andrew Cuomo, upped this to 50 percent and also increased mandates for the GSEs “to buy mortgages in underserved neighborhoods and for the very-low-income” families.
In 2004, as the Washington Post has documented, HUD upped the share of low- and moderate-income mortgages again to 56 percent. To meet these targets, Fannie Mae and Freddie Mac significantly increased their purchases of subprime loans — from a few billion dollars worth per year to several hundred billion per year. This made banks more willing to make subprime loans and provided them with more money to do so.
Of course, Congress never learns its lesson, so now it’s giving HUD even more money and power. So expect another planning-induced bubble and another housing crisis in about 10 to 15 years.
Here’s a story that should warm the heart of any true Antiplanner. The Bush administration is cow-towing to developer lobbyists by trying to change the Endangered Species Act to allow “federal agencies to decide for themselves whether highways, dams, mines and other construction projects might harm endangered animals and plants,” instead of having government scientists make such determinations (as they have been doing for the past 35 years).
Among other things, the rules would “bar federal agencies from assessing the emissions from projects that contribute to global warming and its effect on species and habitats.”
The Interior Department, which is supposed to protect the environment, assures us that “federal action agencies will err on the side of caution in making these determinations.”
Gotta love Antiplanners.
http://www.cnn.com/2008/TECH/science/08/11/bush.endangered.species.ap/index.html
Lord! save us from outrage fatigue!
Nonetheless, BushCo either miscalculated or half-*ssed it. They should have done this 5 years ago to let their oil buddies deploy an army of thumpers and have enough time to rape the land before BushCo was replaced & rules reinstated. This simply is a piece of symbolic paper that, if enacted, will be in force for a few months.
Sure, an army of lawyers has been waiting for years to file permits and no doubt some damage to the public’s property rights will be done, but far more damage to our property would have been done had BushCo done this in their first term after selection.
But back OT, I agree with most of this post, except for the obligatory templated phrase ‘planning-induced bubble’. You can call it ‘social engineering’ or ‘subsidy’ or ‘lib-rulll do-gooders’ or whatever, but planners want affordable housing with families occupying them, not shuttered and gutted shells every 35th house. The former want is not achieved by what Randal outlines above, trust me. Planners do not have that kind of power, no matter what the wish of a small minority may be.
DS
I want all the women to love me. That doesn’t mean the actual actions I take are nor will lead to what I want.
That doesn’t mean the actual actions I take are nor will lead to what I want.
Wow. Now that’s Deep Thought. But for all the depth, it fails to connect the invalid conflation of the real HUD issues and the made-up phrase ‘Planning Induced Bubble’.
Perhaps you can help Cato focus-group it to make it catchier & more widespread use-worthy.
DS
I’m not surprised to see the meaning lost on you, DS. Or are you one of those rare people who don’t mock a point when they have no means of proving it wrong?
Dan,
What planners want and what they get are two different things. They may want affordable housing, but cities are eager to use planning tools to preserve their tax bases, even if it means making housing less affordable. Then there are the homevoters who become NIMBYs figuring that any new development will reduce their quality of life and — surprise — are reinforced when their actions make their homes more valuable. None of these people wanted to make housing less affordable, but because they don’t understand or care about economics, unaffordable housing is the unintended consequence of their actions.
And here I thought planning DECREASED property values. Someone go tell Oregonians in Action that they can disband immediately.
Randal, as you and prk keep making the same hasty generalization logical fallacy, one must wonder where the error comes from.
Again: conflating HUD failures and the planning principle/social good of seeking to provision affordable housing is…is…what do the kids say…wack.
Planners do not manage or influence or contribute to the poor risk-taking behaviors at HUD, esp since that Dept was populated by BushCo NeoCon appointees and their failed policies and ideologies. Please.
And where’s the chart showing correlation between HUD bad loans and areas with Comprehensive Plans? What? you say you have none?
DS
Among other things, the rules would “bar federal agencies from assessing the emissions from projects that contribute to global warming and its effect on species and habitats.â€Â
JK: Good! Common sense wins! Al Gore’s zombies loose.
BTW, B4 you claim warming is man caused, please point us the THE peer reviewed (Al told us how important peer-review is) paper that proves that CO2 is actually capable of causing dangerous warming.
Thanks
JK
Please point us the THE peer reviewed paper that proves ANYTHING.
Human beings can’t “prove”: the best we can do is to disprove. Even if we were to replicate an experiment (for example) 1,000,000 times in a row, that doesn’t prove that the next experiment will be the same. It might make us really really confident, but that’s different.
D4P:
Certain ideologies won’t accept any evidence that doesn’t comport with their self-identity, even if you were to bundle it in Algore and wrap it around a hockey stick and whack them in the head with it. Please lets not spam this comment thread replying to these people. Thank you in advance.
DS
JK: Just remember that the economy is a wholly owned subsidiary of the environment!
Then maybe HUD & USDOT ought to merge into one entity?
Dan said: Certain ideologies won’t accept any evidence that doesn’t comport with their self-identity,
JK: Yeh, I am constantly amazed by people’s belief in catastrophic warming in spite of the utter of lack of credible evidence:
* The Hockey stick has been repeatedly shown to be completely wrong (and probably a fraud).
* Al Gore’ chart of temperature going up and down along with CO2 shows nothing, but Al implied that there was a cause and effect, while he KNEW that the temperature changed first, only to be followed by CO2, an average of 800 years later. He lied.
* No one has ever proven that CO2 can actually cause warming. In fact a number of peer reviewed papers say it responds to warming. Even Steven Schneider, editor of the peer reviewed, Climate Change, wrote that CO2 cannot cause dangerous warming because its gets less effective as the concentrations increase.
With those items gone, there is NO EVIDENCE for the warmers to hang on to, yet they keep desperately hoping that their chance to plan the downfall of modern civilization will not slip from their deluded little fingers.
Oh, the other little inconvenient truth is that all of the major world temperature records now show cooling, some for as long as 10 years.
Did I mention that Al Gore is making more money off of this scam than a scientist in the pay of an oil company? In fact, many millions between his mutual fund and his partnership in a vulture capital firm.
Dan said: even if you were to bundle it in Algore and wrap it around a hockey stick and whack them in the head with it.
JK: It is simply incredible how tightly the warmers hold on to Al’s lies. They continue to believe even after Al told them he is lying.
Dan said: Please lets not spam this comment thread replying to these people. Thank you in advance.
JK: Good advise – rational discussion is beyond most planners ability. If they can’t rely on their feelings, they are lost.
Thanks
JK
JK, You’re not a NASA scientist by any chance? Your last comment kinda makes that a pointless question. You forgot to mention sunspots, geez, didya lose that page of the script?
I gotta e-mail greasemonkey and get this site added. The extra comment spam makes the page so much longer to paint…
DS
Kevyn Miller You forgot to mention sunspots, geez, didya lose that page of the script?
JK: I was just being easy on the believers’ delusions. It is simply amazing how they hold on to the AL Gore crap years after any well informed rational person recognizes it for the self serving crap that it is.
PS: still waiting fora peer reviewed paper showing that CO2 causes dangerous warming.
Does anyone even have a rational argument that man is causing warming anymore?
Thanks
JK