Julián Castro served as secretary of the U.S. Department of Housing and Urban Development from 2014 to 2017 under former President Barack Obama.
In an exclusive interview with HousingWire's magazine editor, Sarah Wheeler, Castro explains his concerns with the proposed $6.2 billion in budget cuts to HUD, announced Thursday.
HousingWire: The budget proposed by the Trump administration cuts $6.2 billion from HUD. Reading through the budget, it seems to place the burden on community and state funding to meet needs that the federal government has met in the past. As a former mayor, what are your thoughts about the level of those resources compared to federal money?
Julián Castro: This will severely limit the ability of local communities and states to meet the needs of the middle class and poor when it comes to housing. As it is, Community Development Block Grant (CDBG) funding and HOME Investment Partnerships Program funding had been reduced significantly over the years. Both of these were created to provide housing opportunities at the local and state level — this budget just passes the buck down.
Right now, with current funding levels, only one out of four people who qualify for HUD programs gets served, and these cuts are just going to make it worse. Some of the worst cuts are to investments in public housing because we’ve got a rental affordability crisis out there. We’re not even keeping up with the demand that’s already there, much less any new demand.
HW: Regarding the cuts to the CDBG program, the proposed budget states that “the program is not well-targeted to the poorest populations and has not demonstrated results.” What is your assessment of the CDBG program?
Castro: As a former mayor and HUD secretary, I think the CDBG is a very effective tool both to provide greater housing opportunities and services that are important to meet the needs of the middle class and poor. Meals on Wheels is a really good example of that.
If the Trump Administration has some issues with CDBG, they could ask Congress to fix those issues, not do away with the whole program. The Obama administration asked for some reforms to make this program more effective, so you can be constructive about this, instead of doing away with whole programs.
HW: What will be the impact of these cuts on some of the most vulnerable populations, including veterans and seniors?
Castro: This is going to have a harmful effect on homeless veterans, seniors and families, especially with regard to HOME and CDBG. Cities and states use these dollars to create housing affordability. In fact, since 1992, 1 million affordable housing units have been built because of HOME dollars. Taking away these dollars will have a profound impact on reducing veteran homelessness. Under the Obama administration, there was steady progress in reducing veteran homelessness, but If the Trump budget passes, I fully expect the number of homeless veterans to shoot up.
The other thing is that the proposal to cut the U.S. Interagency Council on Homelessness is a terrible mistake. All of us have an interest in the government working as efficiently as possible. The No. 1 value of the ICH is making sure that 19 federal agencies are well coordinated and on the same page so that we can be more impactful in reducing homelessness. Getting rid of that coordination is the last thing you want to do.
HW: The budget would cut Section 4 Capacity Building for Community Development and Affordable Housing. The justification given is “This program is duplicative of efforts funded by philanthropy and other more flexible private sector investments.” Is this a reference to something like Habitat for Humanity? At what scale is housing being built by philanthropic efforts?
Castro: As far as I’m concerned, the response from the Trump administration is doubletalk. In fact, we ought to be funding affordable housing programs at a greater level, not less. Of course, the private sector has an important role to play, and I applaud the private sector for what they are doing. But even a lot of private efforts receive government dollars, so untangling that will not be as simple as it looks.
Also, among philanthropies today, if you’re a nonprofit, you often need to show matching dollars to get the attention and dollars of philanthropic organizations, and a lot of those matching dollars are government dollars. If the federal government just stops funding these efforts wholesale, it will put housing philanthropy in a very tough bind. They simply don’t have the resources and this will change the criteria for evaluating the worthiness of nonprofits, which often looks at these matching dollars.
HW: Housing issues are so tied to health issues, but the budget to Health and Human Services is also cut under this budget, by 23%. What are the implications for housing?
Castro: There’s no vision here. It’s almost like a cartoon cutout of an ideologue’s conception of the budget: just spend more money on defense and tear apart social programs. It’s very short-sighted on housing, education, health.
HW: You visited hundreds of communities during your tenure as HUD secretary. What kind of communities will be hardest hit by these cuts?
Castro: Communities that are off the beaten path: small towns that are already disconnected from opportunity. I think of some of the places I visited in Wisconsin, and the Pine Ridge Indian reservation in South Dakota, as well as the places I visited where poverty that still exists in urban America. For a lot of small rural communities and urban communities these are some of the most important funds in the community. As a lot of folks have pointed out, President Trump got elected promising to take care of the forgotten in America, but cutting these programs is doing exactly the opposite.
What I suspect is that as Secretary Carson does his listening tour, he will hear just how important these funds are to providing a basic level of opportunity and livelihood to a lot of people in small town America and urban America.
