The White House is expected to appoint former New York Congressman Rick Lazio as deputy secretary of the Department of Housing and Urban Development, sources familiar with the decision told The Real Deal.
Dr. Ben Carson, the appointee for the more senior, cabinet-level position at HUD, was confirmed by the Senate banking committee earlier this week. Another source with ties to the transition team said they were under the impression that Carson still needed to conduct in-person interviews with deputy secretary candidates before any announcement would be made, and they didn’t expect an announcement until Carson was officially voted in by the full Senate. It is unclear when the final vote on his confirmation will take place.
Housing groups nationwide have been nervously awaiting news of this second key housing appointment, the number two position at HUD. It is widely understood that the deputy secretary will largely set the tone for how the department will be run. HUD, which employs about 7,500 people and has a budget of around $47 billion, guarantees more than a trillion dollars in mortgage-backed securities, provides billions in affordable housing finance, and houses millions through the Section 8 program. The department is charged with funding local public housing agencies like New York City’s NYCHA, which houses more than 400,000 people in its buildings and subsidizes the rent of more than 200,000 people living in privately-owned apartments.
“It’s a broad, chief-of-staff kind of role,” said one Washington housing policy advocate, “You need to have somebody who really understands how the different departments fit together, that understands the work of HUD, especially its financing role.”
Carson, a retired brain surgeon, will come with no housing or government experience if confirmed by the full Senate. But Lazio, a Republican, is seasoned in real estate finance, especially affordable housing, and even prepped Carson for his own Senate confirmation hearing, according to those familiar with the preparations. Former HUD officials and housing advocates alike agree that Lazio is familiar with how HUD works in ways that Carson isn’t.
“The way to think of it is, the secretary is like CEO and the deputy secretary is like the COO,” one former senior HUD official said. “They’re responsible for the day-to-day.”
Lazio did not respond to a request for comment. The public affairs office at HUD referred comment to the White House, but TRD was unable to reach anyone at 1600 Pennsylvania Avenue on Friday. The press contact for HUD also said the HUD transition team didn’t have a spokesperson and that the HUD Public Affairs office is not in contact with the White House.
Since leaving Congress 16 years ago, Lazio has served as CEO of the Financial Services Forum, as managing director of global real assets at JP Morgan and as the head of the national housing finance group at the Jones Walker law firm, his current position.
Lazio, 58, once described himself as a “fiscal conservative and a social moderate” and is viewed by many as much more of an ideological centrist than the typical Trump appointee.
Whereas Carson’s past excoriations of public assistance programs, as well as HUD’s Affirmatively Furthering Fair Housing Rule, alarmed many in the affordable housing world, some former government officials and housing experts said they were encouraged by the appointment of Lazio, whom they described as sympathetic to the federal government’s role in subsidizing affordable housing.
“He would be just fine. Lazio has his heart in the right place,” one former Democratic housing official said. “He’s been involved in a bipartisan policy commission. He would suggest a softening to me.”
But Lazio is not without his critics. While in Congress he sparked anger among housing advocates by proposing the repeal of the Housing Act of 1937 (sometimes called the Wagner-Steagall Act), a key New Deal reform providing federal money for local public housing agencies that was later amended to include the Section 8 program. He was also Chairman of the House Subcommittee on Housing in 1996 when Congress cut the HUD budget by about 25 percent, which led to a freeze on public housing vouchers and some new construction projects, according to the New York Times. Ex-Congressman Barney Frank in 2000 said that Lazio ”helped get the federal government out of the business of increasing the affordable housing supply.”
In a December interview with the website “Affordable Housing Finance,” Lazio spoke about the potential future of housing under President Donald Trump. “We’ve got an enormous opportunity to make the case, to close the gap, in affordability of housing,” he said. “We finally have the chance to make the case that we need the resources and the creativity and the leadership to get the job done.”
Ahead of Carson’s Jan. 12 confirmation hearing, Lazio wrote on Twitter that he was “Looking forward to confirmation hearing of Dr. Carson. Brilliant mind. Exceptional talent and heart. Inspiring life story. He has vision.”
Lazio, a four-term Long Island Congressman, lost a U.S. Senate race against Hillary Clinton in 2000. And in 2010, he lost the Republican gubernatorial primary to Trump ally Carl Paladino.
As with Carson, Lazio’s appointment must be confirmed by the Senate. Before Trump ultimately tapped Carson for the top HUD role, Lazio was said to be a top candidate for the role.
Other candidates known to be on the White House’s short list included HUD alums Pam Patenaude and Brian Montgomery. Patenaude is a former assistant secretary at HUD during the George W. Bush years and the current president of housing nonprofit J. Ronald Terwilliger Foundation for Housing America’s Families. She publicly endorsed Carson for agency secretary on Jan. 12. Montgomery was Federal Housing Commissioner under George W. Bush, and briefly, the Secretary of HUD prior to President Obama’s appointment of Shaun Donovan.