To establish new ZIP Codes for certain communities, and for other purposes.

— 504 — Mandate for Leadership: The Conservative Promise l Reverse HUD’s mission creep over nearly a century of program implementation dating from the Department’s New Deal forebears. HUD’s new political leadership team will need to reexamine the federal government’s role in housing markets across the nation and consider whether it is time for a “reform, reinvention, and renewal”1 that transfers Department functions to separate federal agencies, states, and localities. OVERVIEW HUD was created by the Housing and Urban Development Act of 19652 and since then has administered several programs that had been administered by the Housing and Home Finance Agency. With a proposed fiscal year (FY) budget authority totaling $71.9 billion and 8,326 full-time equivalent (FTE) employees,3 it remains the largest government agency charged with implementing federal housing policy. In addition to its headquarters in Washington, D.C., HUD has 10 regional offices as well as field offices and centers to implement specialized operational and enforcement responsibilities.4 HUD program offices also interface with various networks of implementing organizations such as locally chartered public housing agencies (PHAs) and federal, state, and local government and judicial bodies as well as such private industry participants as mortgage lenders. The Secretary of Housing and Urban Development can delegate authority to various entities across an array of HUD programs.5 The Secretary also oversees the Office of the Deputy Secretary;6 the Office of Hearings and Appeals (OHA);7 the Office of Small and Disadvantaged Business Utilization (OSDBU);8 and the Center for Faith-Based and Neighborhood Partnerships (CFBNP).9 The Office of the Secretary also comprises a team of politically appointed positions and career support staff. Each of the following offices should be headed by political appointees except where otherwise noted. l Office of Administration, headed by the Chief Administration Officer. The Office of Administration has responsibilities for the Office of the Chief Human Capital Officer (OCHO, headed by the Chief Human Capital Officer, currently a career position) and the Office of the Chief Procurement Officer (CPO, headed by the Chief Procurement Officer, currently a career position). l Office of the Chief Financial Officer, headed by the Chief Financial Officer. l Office of the Chief Information Officer, headed by the Chief Information Officer. — 505 — Department of Housing and Urban Development l Office of Public Affairs, headed by a Senate-confirmed Assistant Secretary (AS) or Principal Deputy Assistant Secretary (PDAS). l Office of Congressional and Intergovernmental Relations (CIR), headed by a Senate-confirmed AS or PDAS. l Office of Community Planning and Development (CPD), headed by a Senate-confirmed AS or Principal DAS. CPD administers various entitlement and non-entitlement programs across community development, disaster recovery, and housing for the homeless10 and individuals with special needs, including Housing Opportunities for Persons with AIDS (HOPWA). The two largest CPD-administered programs are the Community Development Block Grant (CDBG) Program,11 which includes disaster recovery funding, and the Home Investment Partnerships Program (HOME).12 CPD’s Relocation and Real Estate Division (RRED) has departmental delegated authority for the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970.13 l Office of Public and Indian Housing (PIH), headed by a Senate- confirmed AS or PDAS. PIH administers public housing and tenant-based rental assistance programs, as well as authorities for Native American and Native Hawaiian housing assistance and loan guarantee programs under the Native American Housing Assistance and Self-Determination Act (NAHSDA).14 Tenant-Based Rental Assistance represents the major portion of HUD’s nonemergency discretionary budget. HUD describes its Housing Choice Voucher Program as “an essential component of the Federal housing safety net for people in need.”15 PIH also implements funding for the Self- Sufficiency Coordinator Program; the Public Housing Fund (operating and capital funds for PHA administration of Section 9 public housing and Section 8 voucher programs); and Choice Neighborhoods (zeroed out during the Trump Administration budget request but included in HUD’s FY 2023 budget, which requests $250 million for the program).16 l Office of Housing and Federal Housing Administration (FHA), headed by a dual-hatted, Senate-confirmed AS and Federal Housing Commissioner or Acting Federal Housing Commissioner. The Office of Housing oversees implementation of the department’s project-based rental assistance (PBRA) multifamily housing portfolio, Section 202 supportive housing for the elderly program, Section 811 program for disabled persons’ housing, and Housing Counseling Assistance program. The Federal Housing Administration administers the Mutual Mortgage Insurance

— 622 — Mandate for Leadership: The Conservative Promise long-term maintenance costs. At a bare minimum, the number of grants should be consolidated. DOT would also reduce unnecessary burdens by returning to the Trump Admin- istration’s “rule on rules” approach to regulations, implemented in late 2019 as RIN 2105-AE84.4 This rule strengthened the Administration’s effort to remove outdated regulations, find cost-saving reforms, and clarify that guidance documents are in fact guidance rather than mandatory impositions. The Biden Administration unwisely moved away from this reform, and the next Administration should revive it without delay. BUILD AMERICA BUREAU The Build America Bureau (BAB) resides within the Office of the Secretary and describes itself as “responsible for driving transportation infrastructure develop- ment projects in the United States.”5 This lofty-sounding goal in practice means that the Bureau serves as the point of contact for distributing funds for transpor- tation projects in the form of subsidized 30-year loans. For higher-quality projects and in certain circumstances, these government loans may disintermediate the private sector from providing similar financing, albeit at higher costs. At certain times in the economic cycle, and for many lower-quality projects with more dubious economic return, similar loans from the private sector are simply not available. Should the BAB continue to exist and potentially disintermediate the private financing sector, it must maintain underwriting discipline and continue best practices of requiring rigorous financial modeling and cushion for repayment of loans in a variety of economic scenarios. In addition: l The BAB should ensure that these loans do not become grants in another form by maintaining the requirement that all project borrowers be rated at least investment grade by the major ratings agencies and that project sponsors remain liable to ensure that all financing is repaid, even in periods of financial stress and economic downturns. l Project sponsors should be required to show that projects have positive economic value to taxpayers, and sponsors should guarantee that all federal financing will be repaid through properly structured loan terms, including a minimum equity commitment from all project sponsors. l All projects should also be required to show repayment ability in various interest rate environments, and the BAB should ensure that long-term loans are structured appropriately with regard to the fixing of interest rates and hedging of interest rate risk on the part of the borrowers to avoid financial stress or default driven solely by rising interest rates.

— 622 — Mandate for Leadership: The Conservative Promise long-term maintenance costs. At a bare minimum, the number of grants should be consolidated. DOT would also reduce unnecessary burdens by returning to the Trump Admin- istration’s “rule on rules” approach to regulations, implemented in late 2019 as RIN 2105-AE84.4 This rule strengthened the Administration’s effort to remove outdated regulations, find cost-saving reforms, and clarify that guidance documents are in fact guidance rather than mandatory impositions. The Biden Administration unwisely moved away from this reform, and the next Administration should revive it without delay. BUILD AMERICA BUREAU The Build America Bureau (BAB) resides within the Office of the Secretary and describes itself as “responsible for driving transportation infrastructure develop- ment projects in the United States.”5 This lofty-sounding goal in practice means that the Bureau serves as the point of contact for distributing funds for transpor- tation projects in the form of subsidized 30-year loans. For higher-quality projects and in certain circumstances, these government loans may disintermediate the private sector from providing similar financing, albeit at higher costs. At certain times in the economic cycle, and for many lower-quality projects with more dubious economic return, similar loans from the private sector are simply not available. Should the BAB continue to exist and potentially disintermediate the private financing sector, it must maintain underwriting discipline and continue best practices of requiring rigorous financial modeling and cushion for repayment of loans in a variety of economic scenarios. In addition: l The BAB should ensure that these loans do not become grants in another form by maintaining the requirement that all project borrowers be rated at least investment grade by the major ratings agencies and that project sponsors remain liable to ensure that all financing is repaid, even in periods of financial stress and economic downturns. l Project sponsors should be required to show that projects have positive economic value to taxpayers, and sponsors should guarantee that all federal financing will be repaid through properly structured loan terms, including a minimum equity commitment from all project sponsors. l All projects should also be required to show repayment ability in various interest rate environments, and the BAB should ensure that long-term loans are structured appropriately with regard to the fixing of interest rates and hedging of interest rate risk on the part of the borrowers to avoid financial stress or default driven solely by rising interest rates. — 623 — Department of Transportation l Policymakers should maintain awareness and promote transparency regarding the continued existence of this loan program and whether private financiers are being disintermediated by the subsidized BAB lending that the private sector simply cannot match. l A cost-benefit analysis of the federal government’s potential replacement and disintermediation of the private financing sector regarding infrastructure loans, which is not currently performed, should be conducted on a regular basis. PUBLIC–PRIVATE PARTNERSHIPS Much infrastructure could be funded through public–private partnerships (P3s), a procurement method that uses private financing to construct infrastructure. In exchange for providing the financing, the private partner typically retains the right to operate the asset under requirements specified by the government in a contract called a concession agreement. In addition, the private partner is given the right either to collect fees from the users of the asset or to receive a periodic payment from the government conditioned on the asset’s availability: If a highway is not open to traffic when it should be, for example, the government’s payment to the private concessionaire is reduced. The best practice for a government that is interested in using a P3 to deliver a project is for the government first to perform a value-for-money study, which compares the costs and benefits of procuring the asset under a typical procurement against the costs and benefits of utilizing a P3. Since private equity is involved, the financing costs for P3s are higher, but they also are frequently more than offset by the private sector’s ability to generate efficiencies and cost savings in the design, construction, maintenance, and operation of the asset. If the value-for-money study finds that the efficiencies of a P3 and the value of risk shifted to the private sector exceed the additional financing costs, then utilizing a P3 is good public policy because Americans have better infrastructure at a lower cost. As well as providing better transportation facilities for Americans, P3s offer a number of benefits to governments. Specifically, they: l Provide access to some of the world’s best talent with vast experience in delivering infrastructure, l Create incentives for innovation and creativity, l Shift unique project risks to companies that are familiar with those risks, and