Can Preston save HUD?

On Friday April 18, 2008, President Bush selected SBA Administrator Steve Preston to take over as head of the government’s housing agency at a time of deep crisis in the industry. To say the least this is a difficult time fro someone to be appointed Secretary of Housing and Urban Development (HUD). It is not simply the sub-prime and foreclosure crisis but the rising gap of affordability that keeps a larger and larger number of people out of reach of affordable housing. It is also the failure to provide adequate funding as well as the pending crisis that could result in more than 6,510 rental vouchers in New Jersey that was detailed in the Center for Budget Policy and Priorities report entitled “HUD BUDGET CONTAINS MAJOR FUNDING SHORTFALLS: Congress Needs to Add $6.5 Billion to Administration’s Request to Avoid Cuts In Assistance for Low-Income Families.”

In his announcement, according to the NY Times, Bush called “Steve Preston, a ‘consensus builder’ and ‘experienced manager’ while head of the Small Business Administration, to be the nation’s new housing secretary. In a White House ceremony, the president praised Mr. Preston as ‘a reformer who would act aggressively to help Americans obtain affordable mortgages’ and so be able to keep their homes.”

The Times reported that Mr. Preston said, “Our solutions must restore confidence in our markets while not erecting barriers to future entrepreneurs, investors and home buyers.”

We understand the importance of addressing the foreclosure crisis but we believe HUD needs a leader who can insure that the department insure affordable housing for all of our citizens, increase supportive housing for those wit unmet needs and provide funding to end homelessness.

The following is form the NY Times on Mr. Preston’s background. To read the full article click here.

Officials said in advance of the announcement that Mr. Preston would be well positioned to handle the housing crisis, given his experience in government and in the private sector. “He has a strong financial background and understands the important role the housing market plays in our economy,” said a senior administration official. Before being named S.B.A. administrator in 2006, Mr. Preston served as executive vice president of the ServiceMaster Company, a multibillion-dollar corporation whose businesses include TruGreen ChemLawn, a lawn care company, and Terminix, a pest control company.

As S.B.A. administrator, he was responsible for revamping the government’s Disaster Assistance Program, which was still reeling from the Gulf Coast hurricanes of 2005 when he arrived. He was also responsible for supporting the nation’s small businesses with an $80 billion portfolio of direct and guaranteed business loans, venture capital investments and disaster loans.

Earlier this year, Mr. Preston was sharply criticized when Democrats in Congress learned that his agency had given a $1.2 million contract to a former Bush administration official who lacked experience in helping small businesses compete for government contracts.

The contract went to the VBP Group, a company based in Paradise Valley, Ariz. The company’s owner, Vernon B. Parker, served as assistant secretary for civil rights in the Agriculture Department from April 2003 to January 2006.

Mr. Preston called on the agency’s inspector general to investigate.

“Based on the information provided by your staff, and some research conducted by my staff, I believe there is sufficient cause for concern over the events surrounding this contractor,” Mr. Preston wrote to Nydia Velázquez, the New York Democrat who is chairwoman of the committee.