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Blog Post | January 27, 2022

Sabotaged HUD Must Rebuild to Fix The Housing Crisis

Government CapacityHousing
Sabotaged HUD Must Rebuild to Fix The Housing Crisis

As the pandemic exacerbates the nation’s ongoing housing crisis, President Biden has promised swift and immediate action. Effectively deploying the federal government’s powers to address this crisis, however, will require more than just good policy and motivated leadership. Past administrations eroded the federal government’s capacity to carry out effective policy to help tenants and homeowners. This administration will need to form new infrastructure, with an outsized focus on staffing reforms, in order to both restore capacity and implement new housing policies that will enable Americans to readily access safe and affordable housing. 

The Department of Housing and Urban Development (HUD) – which administers, implements, and oversees rental assistance, fair housing laws, and disaster relief programs – is critical to this effort. Unfortunately, Congress has chronically underfunded the agency for decades, leaving HUD unable to fulfill its broad responsibilities. Staffing shortages have also plagued HUD, and the recent departures of seasoned staff have drained its institutional knowledge and further degraded its efficacy. This inefficiency, and declining institutional experience, is actively dangerous within a department that millions of people rely on for housing assistance and security. As such, the Biden Administration and HUD Secretary Marcia Fudge must prioritize staffing and capacity reforms to make vital progress in dismantling systemic racial injustice in housing, helping tenants and homeowners weather the pandemic, and implementing the rest of the administration’s housing goals.

Staffing Trends

HUD today faces a broad internal crisis, as it has been shedding staff for decades while grappling with Republican-led sabotage of the department. According to the department’s Office of the Inspector General, HUD lost more than 49% of its full-time equivalent staff (FTEs) from 1991 to 2019. From 2008 to 2017 alone, it lost 18.5% of its full-time permanent staff, even as full-time hiring grew by 11% government-wide. Over that period, HUD lost a greater share of its staff than any other cabinet-level department. As of 2021, HUD has retained only 7,240 FTEs, a 25.6% decrease from the department’s 9,674 FTEs in 2010 and an even bigger decline (30.5%) from the department’s 10,417 FTEs in 2000 (even as America’s population grew nearly 18% over those twenty years).

Without action, HUD’s staffing crisis will only worsen. HUD’s workforce is disproportionately older, putting the Department at risk of additional losses from forthcoming retirements. A 2018 Government Executive analysis found that HUD had a disproportionately high number of retirement-eligible employees. Indeed, nearly half (44.6%) of HUD’s workforce will be retirement-eligible by 2022.

Decades of neglect left HUD particularly vulnerable to the anti-bureaucratic sentiment of the Trump years. Former President Trump and then-Secretary Ben Carson successfully sought to gut the agency throughout his tenure at its helm. His internal attacks on the agency’s mission shattered morale among career staff under Trump, leading ten percent of agency staff to leave during Trump’s first few years in office. Unfortunately, these departures were most prevalent among the most experienced career officials in the agency. 

A former HUD employee “estimated that two-thirds of the most experienced employees he interacted with day to day had left over the previous three years.” Lisa Rice, the president of the National Fair Housing Alliance, similarly noted that HUD’s departures represent “more than just the number of valuable staff [HUD has] lost, it’s [also] all that expertise that was driven out.”

Low morale, staffing shortages, and decades of Republican attacks on the agency have also made it increasingly difficult to bring back departed career civil servants or to hire qualified permanent replacements for them. The New York Times reported that, as of 2021, 25-30% of positions (concentrated within leadership and managerial roles below the appointee level) in several HUD divisions have been left unoccupied or are filled only on an interim basis. HUD’s lack of permanent leadership endangers its mission because it undermines institutional stability, undermines policy innovations, and confuses agential priorities. 

Rather than staffing up on dedicated career civil servants, a 2018 HUD OIG report found that HUD had turned to outside contracting firms to address its shortages. Outsourcing is an inadequate solution to a chronic problem generally, including leaving fewer people to perform “inherently governmental responsibilities” such as policymaking and oversight. Government contracting has consistently been shown to be a poor deal for everyone but the contracting executives whose pockets it lines. The federal government ends up paying more for less, while employees of these firms receive lower wages, fewer benefits, and less job security on average than their counterparts directly employed by the federal government. A reliance on contracting also degrades government transparency, as many of the laws governing record-keeping and disclosure do not apply to contracted firms. 

In order to fill vacancies, shift contracted positions to permanent ones, and end its reliance on contracting, HUD must finally overhaul its unstandardized hiring process. A 2021 HUD OIG report found that while the Office of Personnel Management (OPM) standard for hiring in the federal government is a process of just 80 days, HUD set a longer 108 day-goal for its own hiring practices. Even with the expanded timeline, however, the department was only able to manage a 141 day turnaround on staffing and hiring decisions. This nearly half a year process makes it difficult for HUD to compete for interested talent and other highly qualified applicants who are likely to receive other job offers well before hearing back from the agency.

Consequences of Understaffing

HUD’s chronic staffing shortages and lack of permanent leadership have directly impacted the agency’s safety oversight responsibilities. Three divisions were particularly devastated under Ben Carson’s leadership: the disaster relief division, homeless assistance division, and fair housing division. These divisions are critical to the effective implementation of HUD’s programs, and staff departures from them are assuredly contributing to extended investigative timelines, a lack of coordinated outreach to eligible households, and other inappropriate delays. For example, HUD/Fair Housing Assistance Program (FHAP) agencies received more than 7,700 complaints alleging discrimination last year, with the highest number of these alleging discrimination on the basis of disability and/or race. Of these 7700, HUD/FHAP failed to meet the 100 day investigative threshold set forth by the Fair Housing Act in 4392 cases (57%). HUD’s longrunning failure to observe this standard has left many tenants without any means of redress when they’ve experienced discrimination. Understaffing has also slowed the distribution of 24,000 rental vouchers earmarked for homeless veterans, left rural and small town communities struggling to spend pandemic-related housing assistance (in part due to a lack of federal guidance), and rubber stamped building inspections despite unsafe and unclean building conditions.

HUD’s failure to adequately oversee state housing programs, such as in places like New York and New Jersey, also harms people, particularly those reliant on Housing Choice Vouchers (otherwise known as Section 8 Vouchers). Public housing institutions such as Richmond Gardens in New York routinely receive high scores from the Real Estate Assessment Center (a HUD subdivision) despite having endemic issues such as rat and cockroach infestations, inadequate maintenance processes, and regular problems with basic living standards like consistent access to heat or hot water.

Inadequate staffing also literally endangers the basic health and safety of the people living in HUD-sponsored housing. In 2018, HUD’s OIG outlined the extent of this failure, and found that the agency had long neglected its responsibility to maintain even basic safety standards in the housing units it oversees through federally subsidized housing programs. In an audit, the OIG found that life-threatening tenant complaints were taking an average of almost three days to resolve, despite the fact that such issues should be addressed within 24 hours. For non-life threatening complaints that should be addressed within three days, HUD properties averaged a whopping 17 day turnaround. The report also found that HUD didn’t have a timeline for resolving complaints about service delays, and that the agency wasn’t holding its public or private contractors accountable for their negligence. These complaints are far from novel, and the agency has long been criticized for its failure to either protect tenants or to hold contractors accountable. In 2018, ProPublica examined how “HUD’s oversight failures are profound, and they have left thousands of children and their families, seniors and people with disabilities living in unsafe housing for years.” The federal government should be setting the standard for safe, accessible, and fair housing instead of neglecting its responsibilities to HUD tenants and further exacerbating a national housing system that gives free rein to landlords, creating dangerous conditions for tenants across the country

Stronger Enforcement of Fair Housing Laws

To enact the Biden administration’s housing agenda, Marcia Fudge and the rest of HUD leadership first dismantled Trump’s legacy at the agency. Rule reversals are key to restoring HUD’s ability to carry out its responsibilities, but the administration must also channel resources to enforcing the new rules. For example, HUD began investigating discrimination complaints based on sexual orientation and gender identity, expanding the historically limited civil rights protections available to LGBT people. This new policy is a marked shift from the Trump administration, which sought to strip transgender people in homeless shelters of anti-discrimination protections) Biden’s HUD has also re-instituted the disparate impact standard, which provides redress for protected classes of consumers when policies have a discriminatory impact, even if the policies are facially neutral. These policy reversals are important, but historically enforcement on discrimination complaints has been sparse. In 2019, a congressional report found that only 2% of discrimination complaints to HUD resulted in charges being filed, and only 8% of complaints to FHAP agencies resulted in charges either. This concerning trend seems to be continuing, as HUD’s Office of Fair Housing and Equal Opportunity, which enforces the Fair Housing Act, only publicly lists 22 discrimination charges for 2021.

Finally, HUD has partly reinstated the Obama-era “Affirmatively Further Fair Housing” rule, which “required cities and towns to analyze local housing data for discriminatory patterns,” and submit plans to HUD to address this discrimination to continue receiving federal funding. Essentially, AFFH requires that cities and localities actively prevent discriminatory practices while also proactively creating housing plans that mitigate the effects of housing discrimination, such as racially segregated neighborhoods. The Trump administration effectively suspended AFFH through no longer requiring localities to anti-discrimination plans, and through redefining Fair Housing Act mandates to no longer require “meaningful” action to address discrimination. While Biden’s HUD has effectively repealed the Trump re-definition of the rule, HUD has not fully reinstated the 2015 Obama version of the policy. Still lacking is its requirement of HUD-mandated tests to certify compliance with the policy. Housing experts such as Jeremie Greer of Liberation in a Generation also argue that the Biden administration could use AFFH in its current form “to buttress some of the challenges that Black and brown home buyers are facing” by requiring “communities to examine the legacy of redlining [and] force local jurisdictions to provide remedies like down payment assistance and low interest loans to Black and brown home buyers.”

These moves are critical, and the restoration of tenant protections is a necessary first step in ensuring HUD utilizes all the available tools in defense of consumers. However, having good policies on the books can only go so far if the agency does not enforce them. Staffing issues hamstring HUD’s oversight capabilities, and when HUD is ineffective, it actively endangers the people who rely on the agency for housing and housing assistance. Fully staffing the agency, particularly offices such as FHEO, would mitigate these issues and finally empower HUD to affirmatively enforce the policies it already has on its books. 

What We’re Losing When HUD Is Ineffective

Adequately staffing HUD’s policy, oversight, and enforcement teams would also empower the agency to fully exercise its immense power over housing policy without needing to rely on congressional action. While many of HUD’s activities and programs are reliant upon Congress for additional funding, HUD does have the ability to act independently on key regulatory matters. For example, HUD can strengthen its anti-discrimination policies and oversight mechanisms in order to institutionalize accountability standards. To start, HUD should make it a priority to clarify the at-times opaque reporting pathways and evidentiary standards necessary to file discrimination claims with the agency and its state partners. 

HUD also must pursue basic reform measures such as increasing accessibility standards for new housing to serve the increasing population that requires different mobility and sensory accommodations. Additionally, HUD should overhaul its inspection criteria to ensure that it enforces every tenant’s right to a healthy and safe living environment, by requiring property managers to take a proactive approach to tenant safety. Of course, HUD must at the very least prevent properties riddled with cockroaches, mice, and mold from passing agency inspection.

The Biden administration did attempt to introduce slightly more robust safety standards this year, such as requiring fire extinguishers on every floor of buildings defined as public housing, but these measures were met with significant pushback from industry groups claiming that such measures were inappropriately “burdensome” on landlords. In response, Biden’s HUD weakened proposed tenant safety standards to the point where some minimum requirements don’t even comply with the safety standards set by the International Code Council and the National Fire Protection Association. Hyperbolic and self-serving claims such as this one regarding the “burden” of safety standards from industry groups actively imperils the tenants who HUD was founded to serve, and HUD’s acquiescence on matters of tenant safety is utterly inappropriate. 

To ensure that additional safety measures are implemented and institutionalized, HUD must urgently hire more staff. With Congress set to vote on a new government funding bill next month, lawmakers will soon have the opportunity to give HUD the resources it needs. The President’s Budget for FY22 includes necessary increases for hiring, including a nearly $300 million increase for HUD’s staffing (from 2020 levels) that, in combination with 2021 carryover, would support the salaries of 8168 FTEs, or an increase of 900 FTEs from 2021. This is an important start to restaffing the agency and to investing in its future, but the administration should, at the very least, push for returning to the 9,000-plus FTEs the agency retained in 2010. Reversing the losses sustained to the agency under the Trump administration is only a start to fully re-investing in the federal landscape. Years of budget cuts and freezes preceded the Trump administration, and funding HUD to its full capacity will require Democrats in Congress to stop selling out the federal budget in false hope of changing political will towards Build Back Better. Congressional Dems must instead push through Biden’s budget, and also go much further, in order to fully resource these critical agencies. 

To fully support HUD’s mission, Congress must also fund the critical programs that the department administers and which have suffered budget cuts for years. From FY10-FY20, for example, funding for HUD’s Community Development Fund, Public Housing Operating Fund, HOME Investment Partnerships Program, and Public Housing Capital Fund decreased, a grievous wrong which Congress must take action to rectify. Additionally, Biden and the Senate must also address the huge number of vacancies that pervade HUD’s management. Many HUD nominees are floundering in the Senate awaiting confirmation, and still other positions have been left without a nominee at all. Majority Leader Chuck Schumer must take more decisive action to push through these critical nominees and to evade the Republican showboating that has created this mountainous backlog in the first place. President Biden and the Senate must work together to put forth qualified nominees and to quickly confirm them, in order to finally fully staff the department’s leadership and bring stability to the beleaguered agency. 

With the additional funding allocated for staffing changes, HUD must also commit to taking the steps necessary to rehire lost talent, quickly onboarding new public servants, and re-establishing the agency’s staff stability. There is reason for optimism in this regard. HUD Secretary Marcia Fudge has repeatedly highlighted hiring as a top priority for the agency. Under Fudge, HUD has also agreed to adopt eleven recommendations from an Inspector General’s report on staffing shortages, including improving training for hiring managers, standardizing processes, and improving data collection. To further accelerate hiring in the short-term, HUD should consider making greater use of hiring flexibilities that allow the Department to avoid time-consuming elements of the process. HUD should also work with the OPM to get Direct Hire Authority, which expedites hiring procedures and reduces certain requirements in the federal hiring process, where necessary. HUD should also identify other changes that can improve and accelerate hiring, based on strategies used at other agencies. 

HUD’s work is critical to the stability of millions of families, but it has neglected — and been obstructed in — many aspects of its mandate for decades. HUD has a responsibility to prioritize tenants issues, pass new protective policy reforms, and institute better regulatory oversight measures for its public and private partners. To enable the most effective rollout of these necessary changes, though, HUD must also prioritize an encompassing and immediate restoration of its leadership and staff. 

Image: “Robert Weaver Building – Dept of Housing and Urban Development – 2012-12-18” by Tim Evanson is licensed under CC BY-SA 2.0

Government CapacityHousing

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