Obama WH cuts community organizers out of housing panel

Not long ago, I noted that the Obama administration had started sending signals that a long-overdue sea change in housing policy may come soon, one that de-emphasizes home ownership over affordable rentals for those who cannot afford to buy using market-based lending terms.  Some rightly took skeptical positions, noting that Barack Obama’s history as a community organizer made groups that rely on government interventions for their income too close to the Oval Office to have Washington suddenly take a free-market approach to Fannie/Freddie and housing reforms.  However close community organizers felt to Obama, though, the Washington Post reports today that they find themselves on the outside without a seat at the table where the new policies will develop — and that they’re not keeping quiet about the betrayal:

Affordable-housing advocates raised concerns Thursday that the Obama administration is excluding consumer and community groups from playing prominent roles in a government-sponsored conference next week that will kick off efforts to overhaul national housing policy.

After the administration announced the 12 panelists for Tuesday’s conference, the nonprofit National Community Reinvestment Coalition said consumer and community groups had been “muscled out” by financial companies, economists and academics without a sense of how housing policy plays out in communities.

“Apparently being a community organizer qualifies you to be president, but it’s not good enough to be part of HUD and Treasury’s think tank on housing,” said NCRC chief executive John Taylor, whose group works with hundreds of community organizations to promote access to financial services for low- and middle-income people.

Taylor and others claim that lenders and academics don’t see how housing policies play out in communities, but it’s not that difficult to figure out.  Inflating housing bubbles by forcing or incentivizing overreliance on subprime loans clearly hasn’t worked out well for most communities; we now have a foreclosure crisis, thanks to people overextending themselves on overvalued homes.  The government interventions of the past twelve years have created crisis and instability, and it doesn’t take a community organizer to see that.

Many of these groups stand to lose if the federal government stops attempting social engineering projects through lending markets.  ACORN and other such groups got billions of dollars from HUD to offer assistance to buyers, allowing them to also conduct other kinds of community organizing in politics and campaigns.  That’s one reason people remained skeptical that Obama would actually dump the kind of interventions that created a Democratic Party foot brigade based on federal funding.

Cutting out the community organizers could mean one of two outcomes.  Either Obama is serious about recalibrating HUD’s mission towards low-income rentals and away from distorting lending markets to push ownership where the economics simply don’t support it, or this process is just a beard to continue the status quo by claiming that the White House did its due diligence in checking out all of the possibilities.  I’d say it’s a tossup — remember that rental-assistance programs can just as easily put money into community-organizing coffers, although perhaps not to the same extent — and that if Obama’s serious about real change, he’ll deserve a lot of credit for it.