A Conversation with US Housing and Urban Development Secretary Ben Carson

COVID-19 Impact and Social Determinants:

• African-American and Hispanic communities face disproportionate health outcomes driven primarily by comorbidities (hypertension, diabetes, obesity, asthma).
• The Opportunity Revitalization Council is refocusing efforts on underserved communities to address root causes, including inadequate living situations that prevent social distancing and work environments lacking telework capabilities.
• Educational opportunities are identified as a critical long-term solution for economic mobility regardless of initial economic environment.

Housing Vouchers and Landlord Participation:

• HUD established a task force to investigate landlord resistance to housing vouchers, finding that fear of tenant-caused damage was a primary barrier in cities like San Diego.
• A pilot solution where municipal governments assumed liability for property damage resulted in a dramatic drop in landlord resistance without incurring additional costs.
• HUD is utilizing programs like RAD and LIHTC to foster public-private partnerships for holistic community redevelopment, integrating medical care and food access to eliminate "food deserts."
• A new "best practices manual" on Opportunity Zones was recently released to encourage local jurisdictions to develop tailored redevelopment plans.

Wealth Gap and Homeownership Strategy:

• Historical data notes a 40x difference in average net worth between renters ($5,000) and homeowners ($200,000), though HUD warns against repeating the subprime lending practices of the 2008 crisis.
• The Family Self-Sufficiency program allows tenants to save income earned from increased wages into an escrow account without rent increases, accumulating funds for down payments.
• In response to the initial failure of PPP funds to reach minority-owned businesses, HUD advocated for a specific set-aside to channel money through Community Development Financial Institutions (CDFIs), credit unions, and Minority Depository Institutions (MDIs).
• The set-aside initiative included provisions for technical assistance to help smaller lending institutions manage government funds, addressing a gap in their operational capacity.
• Research cited indicates that over 50% of majority-minority census tracts lack a bank branch, necessitating the use of non-traditional banking conduits for stimulus distribution.

Opportunity Zone (OZ) Initiatives and Economic Growth:

• The OZ program offers tax incentives for long-term investment: 10% capital gains reduction after 5 years, 15% after 7 years, and 100% exclusion on gains after 10 years.
• Land values in Opportunity Zones are appreciating at approximately twice the rate of non-zone areas, directly benefiting the 30 million residents, over 54% of whom are minorities.
• Case studies include St. Louis, where an abandoned foundry was redeveloped into workforce housing, a grocery store, and entertainment venues.
• Section 3 requirements, mandating local hiring for government-funded projects, are being simplified to reduce complexity and increase usage.
• New "Qualified Opportunity Funds" allow area residents to invest collectively with smaller capital amounts to realize investment benefits.
• A Milken Institute "playbook" released alongside the discussion outlines 20 strategic "plays" for public sector officials to ensure OZ benefits reach local residents.
• Development strategies emphasize mixed-income, mixed-use housing to prevent resident displacement while increasing local economic opportunities.

Criminal Justice and Economic Self-Reliance:

• Secretary Carson cited the George Floyd incident as a catalyst for analyzing systemic unfairness, supporting criminal justice reforms such as alternative sentencing and recidivism reduction.
• Carson emphasized personal agency and economic self-sufficiency, urging minority communities to circulate capital locally (one or two times within the community) before spending externally.
• He referenced the economic success strategies of Jewish and Korean communities and the philosophy of A.G. Gaston ("Green Power") regarding identifying and meeting community needs.
• McKinsey research is cited stating that closing the racial wealth gap could unlock $1.0 to $1.6 trillion in economic productivity, potentially driving 6% GDP growth.
• Carson concluded with a call for national unity, warning that internal division poses the greatest threat to the nation's stability rather than external geopolitical rivals.