Jimmy Carter sent three wise men from the field of housing to Capitol Hill last week, bearing tidings of joy to Sen.William Proxhire (D-Wis), chairman of the Senate Committee on Banking, Housing and Urban Affairs Committee.
The three were Carter's nominees for the most powerful subcabinet positions in the Department of Housing and Urban Development: Jay Janis, undersecretary; Lawrence B. Simons, assistant secretary for housing-FHA commissioner; and Robert C. Embry, assistant secretary for community planning and development. They appeared in an unusual joint confirmation hearing before the Banking Committee.
The message they brought couldn't heve pleased Proxmire (or worried conservatives) more: The new administration is going to put the word "housing" back into HUD'S job description, and it's going to do it by employing housing experts. The gap between the housing industry and HUF that prevailed during the Nixon and Ford years will disappear, the message went, because leaders of the housing industry are going to be inside HUD, running it, rather than outside taking potshots at it.
The same will hold true for the cities, racial minorities and for neighborhood-oriented "ethnic" groups. Members of these constituencies are going to be in charge of key sections of HUD, setting program directions, and serving as lightning rods of political static. The nomination of the Rev. Geno Baroni, and early spokesman for the "ethnic" movement, to the department's new neighborhood organization assistant secretaryship is only one of a series of such appointments.
All three men who went before Proxmire last week bore the credentials to back up Carter's promises of wholesale housing policy changes.
Simons, who is scheduled to take over FHA, is a builder of residential subdivisions on Long Island. A veteran activist witnin the National Association of Home Builders, Simons minces no words about his mission.
"I'm here to get housing built," he says. "My job is to facilitate housing produce a bunch of statistics that don't lead to units in the ground."
Simons told Proxmire that he wants to transform FHA from a non-productive enterprise within HUD to the sort of dynamic mortgage market force that it once was, during the 1950s and early 1960s.
FHA needs "a broader range of marketability" for its mortgage insurance, Simons said, which can be achieved by taking an "agressive" posture with respect to the market as a whold. HUD already has begun its efforts in this regard, Simons said after the hearing, by calling for congressional sanction to raise its basic mortgage limit to $80,000 (up from the current $45,000), expand its innovative variable payment mortgage plan and lower downpayments.
"That's just the opening shot," said Simons. "We're going to turn FHA into a live organization again. By that I mean we're going to go after the market out there, and make FHA relevant to home buyers again."
Moderate income inner city buyers and young buyers are two segments FHA wantes to attract, he said.
Inevitably, Simons agreed, "there is going to be some degree of competition with the conventional lending market and with private mortgage insurance firms."
"My view is that that isn't so bad," he said - putting himself explicity at odds with the "Future Role of FHA" report submitted by the outgoing Ford Administrative last January. That report suggested that FHA should avoid competition with the private market as a matter of principle and should concentrate only on the marginal home and apartment sectors of the market.
Jay Janis offered similarly expanseive, aggressive views to Proxmire. A former developer in Florida and an aide at HUD during the Johnson aminiistration, Janis helped put together the 10-year national housing goals of 2.6 million new and rehabilitated units a year (including 600,000 subsidized) for the 1968 Housing and Urban Development Act - goals which have since come under severe attack for overstating the country's actual need.
Janis fudged on whether he'd try to get the administration to fund 600,000 subsidized units a year - something Proxmire very much would like to see. But Janis promised to work toward as high a target as the national needs required.
janis also tipped his hand on one of 1977s most sensitive political issues within Washington's housing community: What's on store for the Federal National Mortgage Association (Fannie Mae). A quasi-public mortgage investment corporation that owns more than $40 billion in American mortgages, Fannie Mae has come under criticism in recent months from Proxmire and others.
The Wisconsin Democrat held hearings aimed at determining whether the Congressionally-chartered Fannie Mae has been putting too much emphasis on profit margins for its stockholders and not enough on helping out week sectors of the housing market like inner city home buyers and apartment mortgages.
Proxmire's staff has also investigated the multi-year, six-figure employment contract negotiated by Fannie Mae chief executive Oakley Hunter, a political appointee of the Nixon administration.
Janis disclosed that the new administration plans to take a hrad look at Fannie Mae in the coming months and examine HUD's responsibilities for ensuring the huge company fulfills its national mandates.
"I totally agree," said Janis, that "there is considerable leverage" of a statutory nature that the government has over Fannie Mae. Janis said he believes "a strong measure of public purpose should be restored to Fannie Mae's programs."
Janis stopped short of offering details on how Fannie Mae's programs should be brought into conformity with "public purposes." Nor would he disucss specific changes - if any - HUD intends to seek. But his comments, coming in the context of a critical statement about the corporation's shortcomings by Proxmire, could be a warning bell in the night for Fannie Mae.
The third nominee at the bearing. Robert C., Embry, Baltimore's housing and community development commissioner for nine years, pledged to expand HUD's $3 billion-plus block grant program into employment-creating economic development activies. And he defended Carter's first major thrust on behalf of large, ailing cities - a $400 million non-formula, discretionary program known as "UDAG" (urban development action grants) - whose concept, if not its name, bears the stamp of the Great Society.
Kenneth Harney is managing editor of the Housing and Development Reporter, a national weekly published here by BNA, Inc.