Trump’s fixer is now in line. On Monday, the president-elect officially named former neurosurgeon and onetime GOP presidential candidate Ben Carson as his nominee for secretary of housing and urban development. Carson grew up in a working-class neighborhood in Detroit, the son of a housecleaner, but there’s certainly nothing in his medical career that indicates he’s the best pick for the job: While Carson was on the faculty of the Johns Hopkins University medical school, located in one of the nation’s poorest and most troubled big cities, he took little interest in urban issues. In his ill-fated primary campaign, he railed against “social engineering,” a swipe at efforts to open housing in mostly well-to-do, overwhelmingly white communities to minority home buyers and renters.
Trump’s selection of Carson echoes Ronald Reagan’s choice of Samuel Pierce as his HUD secretary. Like Trump, Reagan had lashed out against inner cities and pledged to slash social spending. Like Trump’s supporters, the majority of Reagan’s voters did not live in cities. And like Trump, he had little support among African Americans. But like Trump, Reagan wanted a black face in a high place for a little legitimacy in a post-civil-rights-movement White House. And, like Trump, Reagan had pledged to loosen housing and financial regulations.
HUD was an easy target for Reagan, as it is for Trump. It had been created by Lyndon B. Johnson at the peak of his Great Society to meet the huge demand for affordable housing in American cities and to grapple with the ravages of mass suburbanization, nearly complete racial segregation and capital flight from cities, all of which had been heavily bankrolled by the federal government. In 1968, HUD took on the additional responsibility of “affirmatively furthering fair housing,” the gargantuan task of undoing decades of discriminatory real estate and home-lending practices.
None of these missions was popular: Republicans criticized HUD as a meddling “big government” agency. Southern Democrats railed against its civil rights goals. And suburban whites fiercely resisted even modest efforts to open the housing market to racial minorities. Attacked from all sides, HUD struggled for adequate funding from the outset.
In the meantime, the department became a bastion of crony capitalism, particularly under Republican presidents. In the early 1970s, its program to expand Federal Housing Administration-backed mortgages to underserved urban areas was hijacked by real estate speculators and politically connected developers, who sold shabby houses to desperate buyers at above-market prices, backed by inflated appraisals. When buyers defaulted on their mortgages (especially as interest rates spiked), taxpayers covered the loss. HUD was unwilling to come down hard on predatory lenders or to stiffen regulations.
Pierce was the perfect agent for Reagan’s mission to gut HUD. He oversaw dramatic cuts in the agency’s already meager budget. Federal support for low-income-housing subsidies plunged from $26 billion to $8 billion. More than that, Pierce undercut HUD’s civil rights mission: Housing was nearly as segregated at the end of the 1980s as it had been at the decade’s start. Urban housing conditions deteriorated, the construction of affordable housing slowed to a trickle, and urban poverty deepened.
HUD, however, still channeled money to private housing developers and contractors. And under Pierce, the vultures circled. He had little management experience and no oversight. The job bored him. HUD staffers frequently found him at his desk watching television . Pierce’s staff turned over with alarming frequency. Seven assistant secretaries for housing came and went, and the agency became a patronage mill for inexperienced Republican hacks.
Reagan and Pierce were also zealous advocates of turning HUD’s responsibilities over to the private sector. (One of Pierce’s assistant secretaries resigned when it came out that HUD staffers had helped him type and proofread his book, “Privatizing the Public Sector.”)
HUD’s privatization efforts opened up new possibilities for crony capitalism. Staffers directed money to Republican-connected lawyers, consulting firms and developers. One of the dozens swept up in the resulting investigations by federal prosecutors and Congress was Trump’s former campaign manager, Paul Manafort , who had successfully lobbied for about $43 million in federal subsidies for a shabby New Jersey housing complex. He received $326,000 in fees for his efforts and eventually owned a 20 percent share in the development, which showed few signs of improvement after winning the HUD grants. Eventually, more than a dozen HUD staffers and external consultants were convicted on charges including taking bribes, accepting illegal loans, defrauding the government and lying to Congress. (Manafort was never charged with wrongdoing.)
History never repeats itself exactly, but Pierce’s time at HUD offers some warnings for Carson’s nomination. Like Pierce, Carson is shaping up to be a token black Cabinet member. Trump has not appointed any other black officials so far, and given his lack of high-profile black supporters, he doesn’t have many prospects. Like his predecessor, Carson has little management experience. And like Pierce, he will oversee an agency whose budget includes substantial contracts with politically connected nonprofits, real estate developers and mortgage lenders. The possibilities for corruption are legion with a HUD secretary who knows nothing about the agency, its programs or its vastly complex budget.
HUD turned 50 last year. Metropolitan America has changed a lot in the half-century since Johnson created the agency. But cities’ problems are no less pressing, even if Trump left them unaddressed on the campaign trail as he railed about crime. In most urban areas, economic and racial inequality has spiked. Urban housing is a case study in market failure: too much for the rich and, in many cities, for international speculators, while affordable, high-quality housing is scarce, especially in rapidly gentrifying cities such as New York, Washington and Los Angeles. Even poorer cities such as Detroit, Philadelphia, St. Louis and Milwaukee have huge waiting lists for subsidized housing units. Poverty has risen sharply in the suburbs. Many of the poorest Americans, urban or suburban, are left to the vagaries of a predatory rental market. Few working-class and poor people can afford to live in job-rich suburbs and exurbs or send their children to the best-funded school districts. And many municipalities are struggling with collapsing tax bases, decaying infrastructure and aging housing.
We don’t know much yet about how Carson will run HUD, but his lack of experience with urban policy, his bromides about socialist planning, his indifference to fair housing and his calls for individual boot-strapping don’t bode well for the future of metropolitan America. And in a climate of privatization and deregulation, championed by the country’s new real estate developer in chief, Carson’s inexperience could be a serious liability.