HUD Secretary Donovan says South Bronx holds key lessons

Some of the things that worked in addressing the problems in the South Bronx in the dark days of the 1970s might work in hard-pressed housing markets around the country today, HUD Secretary Shaun Donovan told an audience at Crain’s breakfast forum Tuesday morning.  Mr. Donovan, the former head of the New York City Department of Housing Preservation and Development, said that without government investment in some severely depressed markets, like rehabbing foreclosed properties, home prices could spiral downward during a panic.  “A cycle of foreclosure and abandonment can feed on itself,” Mr. Donovan said after the event. “[In the Bronx], there’s clear evidence that those investments were not only good for those neighborhoods, they were good for taxpayers.”  Measures taken by the federal government to stem the national housing crisis so far—especially the recent mortgage-servicing settlement reached between 49 state attorneys general and five major banks—have helped prevent that meltdown, he said.  “We’re coming out of what has been the best winter and spring since before the housing crisis began,” Mr. Donovan said. He noted that the number of foreclosures nationwide has halved in the last three years.

Crain’s New York

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