HUD Secretary Julio Castro, groomed to be on a national ticket for the Democrats, has learned his lesson well from watching Barack Obama: plead ignorance. Castro spoke Wednesday at the Zillow-moderated Housing Roadmap to 2016, and iterated that he simply had no idea when he moved to Washington D.C. how expensive housing was. He blurted, “I’m a new resident of Washington, D.C. I’ve only been here about five and a half months. And I was shocked at the cost of housing here.”
Castro can take comfort that his boss has plans to make housing affordable: on January Obama announced that the Federal Housing Administration would reduce its insurance premiums from 1.35% to 0.85%. Of course, the premiums rested at 0.55% prior to 2010, but who’s counting?
Not Castro, who was criticized while mayor of San Antonio because the city took $8.6 million from the very department Castro now heads but used $2.5 million in renovation contracts without a competitive bidding process, according to the HUD Inspector General. The city also used $1.1 million improperly by not using the funds on housing lower-income families as required by HUD.
Castro praised the reduced premium rates on Wednesday, enthusing, “[Obama] talked about the values that we have espoused over the generations in the United States that have made it possible for folks to be middle class and to reach the American dream, and one of those is the opportunity for homeownership.”
One drawback to the premium rate cut: only new homebuyers and those who refinance can use them.
The emphasis on homebuyers ignores the U.S. Census Bureau’s report showing the third quarter of 2014 reflecting the lowest homeownership rate since 1995, at 64.4%. More people lived in rental housing in 2014 than any time since 1965. Year-over-year rent has outstripped wages all over the country, according to Trulia Price and Rent Monitor and Bloomberg Businessweek.
No matter. Somehow Castro, whose annual salary is set at $178,700, can afford to pay $3,800 a month rent.