A Crisis is a Terrible Thing to Waste: Transforming America’s Housing Policy
Remarks as delivered by Judith Rodin Furman Center for Real Estate and Urban Policy, New York University
In a few moments, I’ll have the privilege of introducing Shaun Donovan, the 15th Secretary of the United States Department of Housing and Urban Development. But I’ve been asked to explain briefly why the Rockefeller Foundation chose to support this crucial gathering.
Al Gore and others have made it something of a truism to note – as John Kennedy famously did – that, in Chinese, the word crisis is comprised of two characters: one representing danger and the other representing opportunity. It’s a profoundly relevant observation.
We are certainly facing our share of interconnected dangers: collapsing home prices, mounting foreclosures, foundering financial institutions, failing regulatory systems, accelerating unemployment, and a deteriorating economy.
The worsening data and metrics scroll across the ticker-tape of our collective consciousness. Home values are down 25 percent since 2006, amounting to an astounding $6 trillion of destroyed wealth. Upwards of 2.2 million homes went into foreclosure last year. The Mortgage Bankers Association projects that number could double in 2009.
Clearly, this is not some abstraction. The repercussions are felt around every kitchen and boardroom table, in every home, in every business, in every neighborhood and community.
And yet, we join together today because we firmly believe this is also a moment of singular opportunity. Now that Washington has brokered a deal for short-term stimulus, we can begin an urgent national dialogue about long-term renewal.
Relief and recovery are absolutely important, but we must also initiate and institutionalize reform. No political party or philanthropic organization, no city council or state legislature can achieve this alone. New thinking – new actions – are of the essence.
Our leaders must summon the political courage to ask really hard questions, no matter how perilously close the answers bring them to proverbial third rails: What are the right institutions –the right arrangements – to finance home ownership in the 21st century’s global economy? Are the tools that Americans developed during the Great Depression appropriately positioned to assess and address the challenges of what may be the next depression? Is universal homeownership still a goal worth pursuing at any cost? Do Fannie, Freddie, and the Fed still have the capacities and competencies to respond to crisis? Have they become – dare I ask – an anachronism?
As we take this conference down from 30,000 feet and put some rubber on the runway, let’s agree to think big. Let’s think a quarter century down the road, not about just the immediate challenges. Let’s use the current housing and financial crises as our once-in-a-generation opening for innovation in urban policymaking writ large: in health care and infrastructure, energy and education, the environment and economy – all of the interrelated challenges of the 21st century that paint themselves across the urban landscape – challenges to which the Rockefeller Foundation, our partners, and our grantees are helping lead the search for cutting-edge solutions.
Look around the room. This is your time to draft a new blueprint – the intellectual architecture – to strengthen community resilience to the risks of a dramatically changed world.
To begin the conversation, I’m honored to present one of the brightest and boldest new leaders in this shared effort, Shaun Donovan. I first got to know Shaun when I came to the Rockefeller Foundation three years ago – when we and other philanthropies partnered with the City of New York to establish the NYC Acquisition Loan Fund. This collaborative alliance connects developers who want to preserve or create affordable housing with the predevelopment capital to bring their plans to life – in essence providing organizations that are poised to make a difference and 90 percent toward their goal with the extra 10 percent help they need to cross the finish line. It’s a perfect example how philanthropy can bridge the divides between the public and private sectors – how philanthropy can break through the bottlenecks that clog-up prospects for change. It also earned a coveted “Innovation in American Government” award from the Ash Institute at Harvard’s Kennedy School of Government this past fall, and is now being replicated across the nation.
Shaun Donovan, then the highly regarded housing commissioner in Mayor Bloomberg’s administration, engineered this groundbreaking endeavor, just one project in his $1 trillion housing portfolio – small change for his new job – a portfolio that also included responsibility for the nation’s most ambitious plan to expand the affordable housing supply.
Now, of course, President Obama has asked him to lead the monumental effort of restoring stability to America’s housing market and applying his great success in New York all over the United States. He’ll be the first to say modestly this is no small undertaking. But it is with informed conviction that I tell you, he brings an inspired, creative intellect, infectious, ferocious energy, and visionary leadership to the task. Please join me in welcoming Secretary Shaun Donovan.
