New HUD secretary is a multihousing guy

Multihousing has one of its own in Washington again. President Obama has selected Shaun Donovan, who has worked in the multihousing industry as both a developer and lender, to be the new Secretary of Housing and Urban Development (HUD).

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Since 2004, Commissioner Donovan has headed New York’s Department of Housing Preservation and Development. During the Clinton Administration he served as Under Secretary of HUD for Multifamily Housing and also served as the Acting Commission of the Federal Housing Administration. Prior to his government service Donovan was with Community Housing and Preservation Corporation, a nonprofit group based in New York City. After his earlier work at HUD, Donovan was managing director of Prudential Mortgage Capital’s $1.5 billion affordable-housing investments.

“Shaun is one of the best and the brightest thinkers on housing issues in the country,” said William C. Apgar, a senior scholar at the Joint Center for Housing Studies at Harvard and a former assistant secretary at HUD, who was Donovan’s boss for a part of his tenure. “He has the capacity to see the possibilities, to throw away all the old models, to not get stuck in rules that really are more flexible than your imagination allows them to be.”

A native of New York, Donovan received undergraduate and graduate degrees from Harvard. He studied public administration at the Kennedy School of Government and architecture at the Graduate School of Design at Harvard. More recently he was a visiting scholar at New York University.

His Kennedy School training was apparent in a 2006 New York Times profile, “I would never believe that the private sector, left to its own devices, is the best possible solution. I’m in government because of the role of government in setting rules and working in partnership with the private sector. On the other hand, there’s no way you could ever get to a scale that can really affect the housing problems in this country without working with the market.”

Donovan took a leave of absence from his New York Housing position to work full-time on the Obama campaign.

Donovan confronts a department that has been plagued by both its recent successes and failures. Much to the chagrin of the multihousing industry and during the early Bush years, HUD was primarily focused on expanding home-ownership in America. And it succeeded in expanding home-ownership to the highest percentage in history. Some argue that the lowering of mortgage standards, which allowed for this ownership increase, generated the sub-prime mortgage crisis that has directly lead to the current world-wide recession.

Donovan’s New York agency also pressed for affordable home-ownership, but the tight New York housing market helped keep foreclosures in that program to a mere five out of 13,000.

Whether the new administration follows a more balanced approach between single and multifamily housing is unknown, but many multihousing leaders are optimistic about the appointment.

Long-time developer and current National Housing Conference President and CEO Conrad Egan was ecstatic that one of his trustees was name HUD secretary.

“NHC is honored to count Shaun Donovan among our Trustees. We look forward to his leadership at HUD and are confident in the extraordinary expertise, experience and skills he has exhibited in both public and private sector positions. Without question, Shaun will restore and elevate HUD to the principal domestic agency that advances the preservation and production of affordable homes and the vital development of communities,” remarked Egan.

“We also anticipate that, under Shaun’s leadership, the importance of good, stable affordable homes will be prominently emphasized in this nation’s expanded and strengthened fiscal, job, health, education and transportation strategies.”

Former multifamily lender and current uber-consultant, Shekar Narasimhan, was equally glowing. “He is the right man for the times.

Shaun Donovan is a personal friend and an advocate for housing and community development in the U.S. He will elevate HUD to its rightful place.”

NMHC President Doug Biddy concurs. “Shaun is a good friend and my first choice. He understands finance from a multifamily position and comes to HUD from one of the most significant markets in the country.

The Secretary of HUD has been a dumping ground for party hacks for years with only a couple of exceptions. It’s a mess over there and it’s time we get someone in who can do something with it.”

As the multifamily industry faces a pending credit crisis brought on by the sub-prime debacle, a HUD secretary with experience, knowledge and friends in multihousing is a strong step in the right direction.