Issue #151, Fall 2007
Promises in the Rose Garden
By Alice Chasan
Edward Gramlich, who died in early September, spent
years as the lone voice on the Federal Reserve board of governors warning
about the dangers of predatory-lending practices and the lack of federal
regulation in the subprime-mortgage market. Gramlich - an economist
who championed affordable housing and the needs of low- and moderate-income
Americans - saw the economic promise in homeownership but placed it
in the context of a multifaceted national housing policy that would
include an adequate stock of rental housing and strict oversight of
the credit industry to prevent exploitative practices. His arguments
got no traction with Fed chair Alan Greenspan or a GOP-controlled Congress.
But he kept at it, completing an accessible, enlightening book on the
subprime market that was published in June as the foreclosure crisis
swept the land.
Weeks before his death, Gramlich held a conference
call to discuss his book. I asked him then what he thought of elected
officials' responses to the turmoil roiling through the housing market.
Expressing disappointment that the Democrats now in control of Congress
hadn't introduced legislation to address what he called the "hole
in the supervisory safety net" for the lending industry, the former
board chair of the Neighborhood Reinvestment Corporation also faulted
the presidential hopefuls for failing to offer comprehensive housing
policies. As for the Bush administration, Gramlich decried its refusal
to devote either money or sustained attention to the acute foreclosure
problem, let alone to the structural issues that have fueled it.
Ned Gramlich lived long enough to see his ideas
garner some media attention, but sadly, much of the coverage had as
much to do with his fatal illness as with the prescience of his ideas.
I thought about Ned Gramlich as I listened to George
W. Bush promise "help and hope" to some homeowners in his
announcement of Band-Aids to stanch the foreclosure hemorrhage. Sounding
like a man reading from a phonetically written script in a foreign tongue,
Bush was clearly venturing into alien territory as he sketched out limited
preventive measures for struggling low- and moderate-income homeowners.
His scant familiarity with the idiom of housing policy perhaps accounted
for the complete omission of the thousands of people already forced
out of their homes when their adjustable-rate mortgages reset.
Bush at best backed into the Rose Garden promises.
He'd ignored the mortgage mess until its spillover into global markets
forced him in mid-summer to address the matter. Even then, he said there'd
be no "direct grants" to rescue homeowners. Just before Congress
returned from its summer break and the presidential campaign racheted
up, he offered "a little help" to Americans caught in the
Ruminating over Bush's pidgin policymaking and
its stark contrast with Gramlich's fluency, I had a crazy idea. What
if housing galvanized the same intense political energy and got as much
media attention as, say, Sen. Larry Craig's sojourn in an airport restroom?
To have a sustained, serious national debate about
housing policy that includes intelligent media analysis of what works
and what doesn't would require a new set of priorities for our elected
leaders. It would mean they'd embrace big ideas rather than quick fixes
- comprehensive policies rather than emergency solutions. But wait -
isn't that what the 2008 presidential hopefuls are promising to deliver?
I don't know about you, but I'm still waiting for the policy package
Will the candidates model the kind of problem-solving
Gramlich argued for? Shelterforce is doing its part to show them
the way. In this issue, Peter Dreier,
Barbara Sard, and Greg
Squires point the presidential candidates in the direction of some
promising strategies for redressing income inequality and the structural
roots of residential and school segregation.
of Duty," (Shelter Shorts, Summer 2007), misidentified Steve
Barton as agency director of the Berkeley Housing Authority (BHA);
he was director of the housing department that oversaw the BHA from
1999 to 2007. The article reported that 22 BHA staff members were
fired after an investigation uncovered abuses. According to David
Hodgkins, City of Berkeley human resources director, 11 of the 15
full-time employees took other city positions; only the seven temporary
staff members were dismissed. Hodgkins said that while the city and
HUD had long been aware of incidents of mismanagement within the BHA,
the claims leveled by city attorney Manuela Albuquerque against the
BHA were not the findings of an investigation.
For more on BHA, see Letters.