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Biden’s Encouraging HUD Pick

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eye on the news

Biden’s Encouraging HUD Pick

If Marcia Fudge follows her own lessons from her time as a small-city mayor, she will bring some good sense to housing policy. January 29, 2021
Cities
Economy, finance, and budgets
Politics and law

Representative Marcia Fudge of suburban Cleveland was an unlikely choice to head the Department of Housing and Urban Development. Indeed, she herself had made clear that she would prefer to be the first African-American to lead the Department of Agriculture, in keeping with her longstanding interest in nutrition and the food stamp program. And some on the left have noted critically that she comes from a small city with no public housing—a core challenge for today’s HUD.

But there’s a case to be made that President Biden has made an excellent choice in nominating Fudge to run HUD. She has done something that HUD has repeatedly tried and failed to do: save a city. She turned around a small, predominantly black city—Warrensville Heights, Ohio, population 13,500—by recruiting new, high-end private-housing development. The result: a restored tax base, new school construction, and an end to housing abandonment.

Located in the shadow of an interstate highway, its streets lined with classic, postwar “colonial” and ranch houses, Warrensville Heights is an older, inner-ring suburb of Cleveland. Fudge served as mayor from 2000 to 2008, the first elected office for the Cleveland State law school graduate who’d held a series of administrative jobs in county government. Warrensville is the sort of place deteriorating all around the country—bypassed for newer suburbs with larger homes, plagued by poorly maintained apartment buildings that have become de facto public housing projects through the Section 8 housing-voucher program.

Fudge had an idea about how to stop the bleeding—and it did not involve help from HUD or anywhere else in Washington. Instead, she envisioned a new housing development on the site of an abandoned drive-in movie theater parking lot. She enlisted Brad Sellers, a former Chicago Bulls power forward who had just returned to his hometown after playing with Michael Jordan, to become the city’s economic-development officer, tasked with recruiting a private-housing developer to build Cinema Park Estates on the 20-acre lot.

Success was far from certain—especially when the 2008 subprime crisis drove an incredible 55 percent of recent Warrensville mortgages into foreclosure, among the highest rates in the nation. Sellers, who would succeed Fudge as mayor, recalls that homes “went from being worth $140,000 to $40,000. There was no mortgage market at all; everything was cash, if anything. And lots of people were just walking away.” Caught in the downdraft: Cinema Park Estates, where only 15 of a planned 82 homes had been built.

Over time, though, Fudge’s idea proved sound. Today, the entire project has been completed—and it has sold out. Homes in this gated community go for up to $300,000, mostly to two-earner black professional couples. Sellers recruited one of the nation’s largest homebuilders, Ryan Homes, to translate Fudge’s vision. “She wanted new construction,” he recalls. “What she understood is that we needed comps.” That means that the city needed formal sales of higher-priced new homes to serve as benchmarks for other homes—and to restore the private mortgage market. In other words, Fudge realized that Warrensville had a poorer side of town and needed a richer one. That’s not exactly the approach that HUD takes to struggling cities.

The city’s tax base has expanded. Its annual budget has grown by 25 percent, making it possible for Warrensville to finance new school construction and include free pre-K in its plans. The school system’s state rating has risen from F to C—and Mayor Sellers has his eye on a B. “That’s why we’re doing the pre-K. Get the kids ready. There are people who think the American Dream is not for them. We’re trying to show them that it is.” It’s all a long way from the traditional HUD prescription of community renewal through subsidized housing.

Warrensville’s biggest problem today concerns policies in HUD’s purview. Formerly high-end apartment buildings, where Sellers recalls professional basketball players living, have become concentrations of poverty, where rents are paid by housing vouchers. Sellers sees the buildings deteriorating physically and knows that they are marked by crime and drugs—exactly the concerns of the black middle class that the city is trying to recruit. That’s why Cinema Park is gated.

HUD-funded housing will be governed by policies that Marcia Fudge will now control. She has sent at least one promising signal, saying that “public housing or low income housing should not be a lifetime, it should be just a stopping point.” If she stays true to that pragmatic vision, she’ll follow through by letting housing authorities adopt time limits for tenants, changing the culture of subsidized housing by making clear an expectation: up and out. She should also let authorities scrap the rule that sets subsidized rents at 30 percent of income—and thus goes up when a tenant earns more. That encourages tenants to hide their income, making it harder to improve their credit.

Biden’s nomination of Fudge as HUD secretary is promising. Let’s hope she keeps in mind her own lessons from Warrensville Heights.

Photo by Chip Somodevilla/Getty Images

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