If you could levitate, dronelike, above the dilapidated, 1940s-era public-housing projects in California’s Sunnydale neighborhood, you would be able to make out San Francisco’s gleaming silver skyline, just seven miles away.
Here, iron-barred windows are framed by exposed electrical wires and water-stained exteriors. There, the median price of a midtier home exceeds $1.5 million; a one-bedroom apartment rents for an average of $3,330 a month.
On a crisp October morning, U.S. Secretary of Housing and Urban Development (HUD) Marcia Fudge, an austere figure dressed head to toe in black, stood in the gulf between these disparate realities and connected them. She was in Sunnydale to champion the city’s plan to erect 1,770 new mixed–income residential units to replace 775 old ones, but her message was about the larger challenge facing America. The housing problems that plague this low-income neighborhood, she said, are directly related to those facing San Francisco’s more debonair downtown.
“I need every single person in this nation to understand that homelessness is a crisis,” she told the small crowd, but “housing prices are a crisis,” too.
In the year since President Joe Biden appointed Fudge HUD Secretary, those twin crises have grown worse. The median price for a house in the U.S. has climbed nearly 20%, while the mean price of a rental unit has jumped roughly 14%, according to a Zillow index. Nearly half of American workers no longer earn enough to rent a one-bedroom apartment in the city where they live. Each of these spikes has cascaded downward, as those who can’t afford to buy drive up rental costs and those who can’t afford to rent are out of luck: more than half a million Americans, including more than 100,000 children, were homeless in 2020—the fourth consecutive year that number increased.
As the chief of U.S. housing policy, it is, at least in theory, Fudge’s job to fix this mess, and she must do it with a depleted set of tools in her toolbox. HUD, long seen as a backwater among the federal agencies, has been gutted over the years by budget cuts, mismanagement, and staff attrition, leaving an assortment of subsidies, housing projects, and voucher programs that fail to deliver for the vast majority of qualifying Americans.
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Fudge, a 69-year-old who represented Ohio in Congress for 13 years, is nevertheless getting to work. The housing crisis, she likes to say, is about much more than housing. It’s about people no longer being able to live where the jobs are. It’s about companies no longer being able to hire people to fill open positions. And it’s about the damage done to America when buying a home—still the best way for a family to accrue generational wealth—becomes impossible for all but the already rich.
In her first 10 months on the job, Fudge has launched a national partnership to rehouse 100,000 homeless people, helped make federally backed low-interest home loans more accessible, and withdrew a Trump-era rule change that would have allowed federal housing shelters to discriminate on the basis of gender identity. She has also traveled to more than 30 cities and held hundreds of meetings with lawmakers, local policymakers, and community leaders, urging them to use their power to create more access to affordable homes. “I’m talking to anyone who will listen,” she says between stops in California. “Every speech I give, every meeting I’m in—I talk about it.”
But the crisis is acute. COVID-19 sparked a remote-work exodus by millions of Americans from pricey cities toward rural areas and midsize outposts where they confronted a nationwide shortage of housing stock. There simply aren’t enough houses available today to meet demand. The result is a fast-rising housing market that dwarfs the 2006–07 bubble. Back then, most cities’ home prices swelled by 10% or less. In 2021, 94% of metropolitan markets measured by the National Association of Realtors (NAR) saw median single-family-home prices increase by percentages in the double digits. In Salt Lake City, median house prices jumped 26% in a single year. In Austin, they surged by 28%.
Federal lawmakers have done almost nothing to confront this challenge, Fudge says. Her former colleagues have been “so caught up in all of the other shiny things” that they’ve neglected a most basic need, she says. “Housing isn’t shiny. Housing is necessary. We’ve lost track of what’s important.” A devout Baptist and careful note taker, Fudge is unflinchingly direct. When she says that now is HUD’s “last best chance” to prevent economic disaster triggered by a lack of housing, she means it. Fudge is “not being dramatic,” she says. “If we blow it, we lose.”
No place like a home
Marcia Fudge didn’t exactly want this job. When Biden and Vice President Kamala Harris were elected in 2020, Fudge, a Harris ally and former chair of the Congressional Black Caucus, pushed to be appointed Secretary of Agriculture in the new Administration’s Cabinet. As Biden began eyeing other leaders for that position, Fudge openly lamented the idea that she might be shunted off to one of the less prestigious Cabinet seats. “You know, it’s always ‘We want to put the Black person in Labor or HUD,’” she said in an interview with Politico. (Prior to Fudge, the Senate confirmed HUD Secretaries Ben Carson and Julián Castro, both of whom are people of color.)
But when Biden tapped her for HUD chief, Fudge put aside her misgivings. First, she says, she prayed on it. Then she called her 90-year-old mom Marian, who told her, “‘Well, I’m disappointed you didn’t get what you wanted. But I believe this is where God wants you to be,’” Fudge recalls. “I said, ‘You know, Mom, I woke up thinking the same thing.’”
While Fudge was not a housing-policy expert throughout her congressional tenure, her early career was defined by the issue. After graduating from Ohio State University with a bachelor’s in business, and Cleveland State law school with her juris doctorate, she worked for the Cuyahoga County prosecutor’s office, then its personal-property-tax department. In 1999, she was elected the first woman and the first Black mayor of Warrensville Heights, a Cleveland suburb. During her two mayoral terms, Fudge developed a task force to protect against predatory lending and adopted one of the state’s first abandoned-property ordinances, allowing the city to acquire vacant buildings and lots in order to repurpose them for community needs—including affordable housing.
One of former mayor Fudge’s most significant legacies, says current Warrensville Heights Mayor Brad Sellers, was inserting a provision into the city’s revitalization plan that provided homeowners and landlords with funds to rescue their properties from condemnation. The program has succeeded, he says, in both preventing squalor and maintaining Warrensville Heights’ housing supply—a boon that has, in turn, helped keep housing prices comparatively low.
“People assumed that I didn’t know anything about housing,” Fudge says of critics who suggested she wasn’t prepared to lead HUD. “Was I an expert? By no stretch of the imagination. But was I comfortable? Pretty much yes.”
Since becoming HUD Secretary, Fudge has drawn on her background in local housing policy, colleagues say. But her leadership has also been defined by her personal experience. As a kid, Fudge shared a crowded duplex in Shaker Heights, Ohio, with her extended family, including great-grandparents, grandparents, an aunt, and several cousins. While there was never much extra cash in the household, Fudge says she was shaped by having a stable home in a good neighborhood, which gave her a ticket to a nationally renowned public high school. “Home was everything,” she says. “We didn’t have much. But we did have that.”
Former staffers remember Fudge as kind but exacting. She rarely raised her voice and never swears, says 12-year Fudge veteran Clifton Williams, but you dreaded disappointing her. “Her famous words were ‘Good job,’ adds Williams. “If you got much more than ‘Good job,’ it was actually shocking.” Longtime Fudge congressional aide LaDavia Drane recalls organizing a function for Fudge around 2011. When Drane failed to ensure the event was up to Fudge’s high standards, Fudge didn’t chastise her; rather, she made it a teachable moment, Drane says, by simply not showing up to her own event. “That,” Drane says, “was really her telling me, ‘Nope, you missed the mark, sweetie.’”
A depleted arsenal
When Fudge arrived at the HUD headquarters in March 2021, she oversaw a few initial housekeeping changes. Aides switched all the TV consoles from Fox News to other outlets, and Fudge herself made a point of inquiring, out of morbid fascination, as to the location of the infamous, 17-piece, $32,000 custom-built dining set that former Secretary Carson had purchased for his office. (Amid public uproar, she learned, the Trump Administration had canceled the order before delivery.)
After that, Fudge set to work attempting to rebuild her agency. She had a lot to do. From 2009 to 2018, departures brought the number of full-time HUD staff down nearly 20%, slipping from 8,661 to 7,011, at a time when the number of Americans paying more than half of their income to rent increased by approximately 8%. Meanwhile, HUD’s funding for its flagship programs has largely remained stagnant, according to a 2019 Congressional Research Service report. Accounting for inflation, the agency spent roughly the same amount in 2018 as it did in 2002.
Clinton-era HUD Secretary Henry Cisneros says Fudge is up against a familiar, government-wide apathy about housing issues. “Every single HUD secretary, Democrat or Republican,” he says, “has a very hard time persuading the White House to include housing as it should.” The exception, perhaps, is Carson, who tried to decrease funding for his agency by 14%, to move “more people toward self-sufficiency.” Congress denied the request.
Years of disinvestment have taken their toll. A 2018 federal inspector general report on HUD describes a bleak scene at the agency: two decades of “constant turnover and extended vacancies” have precipitated “poor management decisions and questionable execution of internal business functions,” the report said.
That internal dysfunction has had real-world effects. From 2010 to 2016, the annual federal funding for public housing fell 21%, according to the Center on Budget and Policy Priorities (CBPP). Not only do these cuts make it harder to stand up new housing, they also beget reductions in existing supply: some 10,000 public-housing apartments disappear each year “because they are no longer habitable,” owing to asbestos, lead paint, or other states of disrepair, according to the National Low Income Housing Coalition. Fixing existing government—owned public housing would cost the U.S. $70 billion, according to a 2019 estimate from the National Association of Housing and Redevelopment Officials—a sum greater than the HUD’s entire annual budget.
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Housing Choice Vouchers, the other major program HUD operates to combat housing insecurity, is similarly anemic. The program offers low—income households vouchers to cover the difference between the cost of an affordable rental unit in their area and 30% of their income. But it’s massively underfunded for the need it’s supposed to address: those who qualify must wait an average of nearly 2.5 years before they receive a voucher, a 2021 CBPP report found.
‘Hit the ground running’
Fudge has not solved these problems. Nor has her transition from Congresswoman to Cabinet official been seamless. Less than two weeks after she was sworn in, she violated the Hatch Act, a law prohibiting federal executives from engaging in some forms of political activity, when she discussed an upcoming Senate election from behind the White House podium.
But, says one well-placed Democratic aide, “To say [Fudge] came in and hit the ground running is really an understatement.” The agency has cut its hiring timeline in half and onboarded some 1,500 new hires. In June, the Federal Housing Administration (FHA), a HUD subsidiary, changed how FHA lenders account for a potential home buyer’s student-loan debt, expanding access to the nation’s largest low-interest home-buying program. In September, Fudge launched House America, a national partnership with local government leaders across the U.S. that helps them utilize their unused funding from the American Rescue Plan, the COVID-19 relief package that passed shortly after Biden took office. The program is set to rehouse more than 100,000 homeless individuals and add at least 20,000 new permanent supporting housing units to the construction pipeline by the end of 2022.
Under Fudge’s leadership, HUD has withdrawn a rule change proposed by the Trump Administration that would have allowed federally funded housing shelters to exclude transgender and gender nonconforming individuals from taking shelter in gender-segregated facilities that aligned with their identity. The agency expeditiously began distributing $5 billion from Biden’s American Rescue Plan to cities and towns to build permanent affordable housing, provide rental assistance, deliver support services, and develop emergency housing in response to the pandemic. HUD has helped the Treasury Department and White House guide cities and states on the use of $46 billion in pandemic-related Emergency Rental Assistance Program funds.
Fudge has accomplished all this without any boost to HUD’s annual budget. Congress has yet to pass a 2022 appropriations bill and the Democrats’ sweeping $1.75 trillion social-services bill, Build Back Better (BBB), which included $150 billion for housing, remains in limbo. Fudge lobbied the Administration to fight for housing, says Representative Maxine Waters, who chairs the House Committee responsible for the issue. “I was pleased to have a friend at HUD,” she says. But for now, Fudge is stuck with last year’s funds, which, because of inflation, amounts to a budget cut.
A New Deal-style solution?
While many public-housing experts applaud Fudge for her hard-charging start, most are quick to add that her successes are incremental and won’t do much to reverse the looming housing crisis. In the past two decades, too few houses have been built in the U.S. By January 2021, the inventory of available homes for sale plunged to its lowest level since tracking began in 1999, according to NAR, leaving the country nearly 7 million housing units in the hole. “We have so underfunded housing over the years,” says former HUD Secretary Cisneros, “that it’s almost impossible to meet the need.”
There are lots of reasons for the shortage. Supply-chain problems and a lack of construction labor are partly to blame. But a greater culprit is that local lawmakers and municipal housing boards, which tend to consist of homeowners worried about their own property values, have spent decades erecting barriers to building high-density affordable housing anywhere near their backyards. When contractors are able to pass the onerous regulatory hurdles to build multi-unit developments, they profit most by erecting luxury units that rent at a premium. In the first half of 2018, 87% of large-scale rental developments built in the U.S. were high-end.
HUD, meanwhile, has limited ability to twist arms. In 1926, the Supreme Court ruled that local governments have the power to decide what type of housing can be constructed within their jurisdictions. “The fundamental constraint on supply is that local governments have to give authorization for all new housing to be built,” says Jenny Schuetz, a senior fellow of housing policy at the Brookings Institution. “We’ve assigned them the role of gatekeeper on the housing supply side.”
Policy experts from across the political spectrum say that Fudge, and Democratic leadership, need to find a way forward. Meeting the demand for new housing, says the NAR, requires “once-in-a-generation, holistic, and coordinated policy response.” To meet existing need, the country would need to accelerate the pace of construction by 60% for each of the next 10 years. But if there is a shortage of new housing developments, there is also a shortage of the skilled laborers required to build them: the Home Builders Institute says the construction industry needs to make more than 61,000 new hires every month for the next two years if it is to keep up with industry growth and attrition.
Progressive policy experts argue for aggressive action by the federal government. Surely, they say, the Biden Administration, which has drawn parallels between its policy agenda and the New Deal, could come up with new ways to fix the problem. Congress could, for example, make federal government funding for state projects, like roads and public transit, contingent on local authorities’ changing land-use rules to encourage the construction of more affordable housing units, like duplexes.
In the past, Fudge has been willing to take strong measures to confront challenges, says Representative Bobby Scott of Virginia, who chairs the House Education and Labor Committee. When schools shuttered at the start of the COVID-19 pandemic in March 2020, Scott tapped Fudge, who headed the House Subcommittee on Nutrition, to find a way to feed the 30 million children who relied on the national free and reduced school-lunch program. Fudge flew into high gear, working with USDA to get electronic debit cards to qualifying families—a move that reduced child hunger by 30% almost overnight. “The logistics and the complications in setting up a new program were never a factor,” Scott says, “because of the hard work and imagination of Marcia Fudge.”
Little fires everywhere
Fudge’s biggest problem these days is trying to figure out which disaster to address first. “I don’t know how you choose between people in need,” she says. “How do you decide that people who live in public housing should not live in places that are clean and not rodent infested or have mold on the walls? How do you make that decision against some kid who’s living with their mother on the street?”
On Jan. 9, the most urgent disaster was obvious: a five-alarm fire that broke out at a 19-story apartment complex in the Bronx, killing 17 people. The district’s Congressman Ritchie Torres rushed to the scene. He was in a middle school, coordinating with first responders near the still-smoldering building when his phone began to buzz. It was Fudge, asking how HUD could help. Within hours, federal officials were helping facilitate efforts to rehouse surviving tenants through vouchers and other means. Fudge is the type of leader, Torres says, “who has never forgotten and will never forget where she comes from.”
But the circumstances that led to the tragedy in the first place, Torres adds, show the size of the task before Fudge. The Bronx fire, after all, was preventable. In the aftermath, investigators found that it had been sparked by a malfunctioning space heater. Previously, tenants had complained to the city about broken ventilation systems and busted heaters. The building also lacked fire escapes. “It was not an accident,” Torres says. “It was a consequence of decades and decades of disinvestment.”
The Bronx fire is also, unfortunately, not unique. Less than a week before, 12 people died when a federally funded duplex that housed as many as 26 caught fire in Philadelphia. A deputy fire commissioner said the home had been overcrowded, but like those killed in the Bronx, they had nowhere else to go: Philadelphia’s waitlist for public-housing assistance has been closed to most residents since 2013; in New York City, the odds of winning one of the city’s coveted rent-controlled apartments are 1 in 592.
That the country’s housing situation is now, itself, a five-alarm fire is no longer up for debate. But with midterm elections that may cost Democrats their razor-thin congressional majorities just nine months away, the more looming question is whether Fudge will have enough time, or acquire adequate resources, to do enough about it.
—With reporting by Mariah Espada/Washington
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