To say the federal government has been sticking its oar in the national housing market for years now is to indulge in the grossest of understatements. Washington fiddles with interest rates, housing standards, subsidies, and regulations, with "housing and urban development" almost always making matters worse. Markets are meddled with, and few politicians and bureaucrats know - or care - that markets will usually get things right in the end if left alone.
At the forefront of this meddling is an arm of the executive branch, the United States Department of Housing and Urban Development, or HUD. (Not to be confused with the 1963 Paul Newman movie.)
HUD was established in 1965 as part of President Lyndon Johnson's "Great Society" program. Amazingly, the United States got along from 1776 to 1965 without this agency, but the Johnson administration put HUD in place to develop policies on housing and urban development - policies that are generally unneeded and wasteful. The idea of federal interference in housing started during the Depression, which saw an explosion of federal meddling with local and state issues. In 1934, the National Housing Act created the Federal Housing Administration, which to this day ensures mortgages. However, HUD itself was formed by the Housing and Urban Development Act of 1965.
HUD's 2024 budget request is revealing. That request states in part:
The 2024 President's Budget requests $73.3 billion for the Department of Housing and Urban Development (HUD), approximately $1.1 billion more than the 2023 enacted funding level. In addition, it requests $104 billion for new mandatory affordable housing investments. Together, this suite of funding and tax credits aims to tackle the Nation’s housing affordability crisis by making a historic investment in lowering housing costs to further the Administration’s commitment to rebuilding America from the bottom up and middle out.
A billion here, a billion there, and pretty soon we're talking real money.
Note that this is a Biden administration request. Now, not only is the wording of this the purest bureaucratic flapdoodle, but most especially the notion that throwing billions of federal dollars at "affordable housing investments" can have any effect when the states where affordable housing is least available (California) the market is hamstrung by local codes and regulations put in place by NIMBY local politicians. HUD has historically approached this not by seeking to remove roadblocks for developers but by placing even more hurdles in their way. HUD has most famously poured taxpayer dollars into public housing projects, about which even liberal Democrat and climate scold Al Gore declared in 1996, "These crime-infested monuments to a failed policy are killing the neighborhoods around them."
Housing markets are best handled at the state and local level - like, in all honesty, most things.
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Trump's newly-minted HUD Secretary, Scott Turner, we will admit, is at least taking steps to remove some Biden-era nitwittery from that agency's operations. He has ordered the cessation of a rather ridiculous gender identity rule:
Secretary Turner issued an order directing the U.S. Department of Housing and Urban Development (HUD) to halt any pending or future enforcement actions related to HUD’s 2016 rule entitled “Equal Access in Accordance With an Individual’s Gender Identity in Community Planning and Development Programs.” Secretary Turner’s action will ensure housing programs, shelters and other HUD-funded providers offer services to Americans based on their sex at birth: male or female.
“I am directing HUD staff to halt any pending or future enforcement actions related to HUD’s 2016 Equal Access Rule, which, in essence, tied housing programs, shelters and other facilities funded by HUD to far-left gender ideology,” said Secretary Turner.
That's a good move, but while it may be a step towards some good sense in the management of HUD, it doesn't address the larger problem. Secretary Turner should, like the incoming heads of so many federal agencies, be given the primary task of working himself out of a job. Let the states and local communities deal with housing; let the financial sector deal with mortgages. Markets, as I say endlessly, are messy, but they generally get things right in the end.
There is also, of course, the constitutional argument. HUD falls under the executive branch, which has no enumerated power under the Constitution to dabble in housing.
Here's the best argument for ridding the taxpayers of this burdensome agency:
The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.
In a sane world, in a world where the Constitution was still held to be the highest legal authority in the nation, this alone precludes the existence of any agency like HUD. I've made that case for much of what the federal government is doing, time and again - and that is a windmill with which I will never cease tilting.
