Henry Cisneros - Secretary of Housing and Urban Development

Secretary of Housing and Urban Development

As an advisor to Bill Clinton’s successful 1992 presidential campaign, Cisneros was mentioned as a possible replacement for various Texas officials who ascended to jobs in the new Democratic administration. He turned down an appointment as a U.S. senator from Texas for the seat formerly held by Lloyd Bentsen, who had been nominated as Secretary of the Treasury. Clinton nominated him to serve as his new Secretary of Housing and Urban Development (HUD). He was unanimously confirmed by the U.S. Senate and sworn into office by Chief Justice William Rehnquist on January 22, 1993. With the appointment, Cisneros instantly became the highest ranking Mexican American official in U.S. politics. He also pledged to do everything possible to reform the troubled $28 billion department.

Cisneros was well praised for his work as HUD Secretary. Judith Evans reported in the Washington Post that both critics and supporters of Cisneros said he never lacked passion for his job and that he was able to make changes at the margin that made HUD a more effective housing provider. Rep. Rick Lazio (R-NY), chairman of the House subcommittee on housing and community opportunity in 1996 said Cisneros displayed "the correct balance of advocacy on behalf of the president and a willingness to think creatively and outside the box in terms of solutions." In his 1999 book, Inside Game/Outside Game: Winning Strategies for Saving Urban America, urban policy consultant David Rusk wrote “…in my view, (Cisneros was) the most successful of the ten secretaries of Housing and Urban Development since the cabinet agency was formed in 1965.” Clinton said Cisneros was a brilliant public servant, and additionally said that people had no idea how much he contributed to the government.

In his first full week as Secretary, Cisneros was confronted by the unprecedented growing number of homeless in the country’s cities, and declared homelessness “a highest priority.” He quickly recommended that an economic stimulus package include $100 million to $150 million for homeless programs that mix housing and social services. Cisneros tapped Andrew Cuomo to serve as an assistant housing secretary, in charge of homelessness. He spent an evening touring a shelter and the streets in Washington D.C. One night in late December 1994, he walked the streets of Minneapolis and St. Paul, talking to the homeless and later flopped for the night in a shelter in an effort to understand homelessness firsthand. The next day he announced $7.3 million in HUD for five Minnesota state projects for homeless youth and families. However, his efforts to alleviate the problem were often thwarted by a slow-moving bureaucracy. He described his frustration to Jill Smolowe in Time: "I can't believe how gridlocked the system is ... how irrelevant it is to things that are happening out in the country."

During his term, Cisneros reformed the public housing system. With his position, he inherited the massive undertaking to oversee the implementation of the HOPE VI program. Initially authorized as part of the Housing and Community Development Act of 1992, the HOPE VI program represented a dramatic turnaround in public housing policy and one of the most ambitious urban redevelopment efforts in the nation's history. The program is designed to tear down and redevelop severely distressed public housing projects, occupied by poor families, into redesigned mixed-income housing. To do this, Section 8 housing vouchers are provided to enable the original residents to rent apartments in the private market. Bruce Katz, vice president and founding director of the Metropolitan Policy Program at the Brookings Institute, said at a July 14, 2009 event there that HOPE VI is generally considered to be one of the most successful urban regeneration initiatives in the past half century. As Secretary, Cisneros worked diligently to make the program his own, and said HOPE VI was the last gasp for public housing. By the end of his term, Cisneros through his agency had renovated 250 of the worst public housing projects, authorized the demolition of 43,000 mostly vacant units, and advocated for demolishing a total of 100,000 units by the year 2000 in major urban cities. HOPE VI was not without controversy, and Cisneros even appeared on Montel Williams' talk show to discuss HUD's plan to raze America's most crime-ridden, dilapidated housing projects and replace them with attractive new homes with modern amenities in mixed-use developments.

During his drive to reform public housing, Cisneros met with many detractors, including housing advocates who at first feared his vision for restructuring the agency's familiar programs would reduce assistance to low-income families and depressed urban centers. Despite alarms raised by critics, Cisneros also supported legislation to give local public housing authorities the flexibility to adjust rents to encourage more working families to stay in public housing and evict drug dealers and other criminals from housing projects. Near the end of his tenure as Secretary, Cisneros told the Washington Post that he was is most proud of his effort to reform public housing, changing the way local officials provide shelter to the country's poor. He long contended the decline of public housing projects resulted from massive concentrations of the nation's poorest of poor. Federal laws punished people for working, significantly raising rents as their wages rose.

In addition to HUD focusing on the poor, Cisneros seized the goal of the Clinton administration to widen homeownership opportunities. Under his command, HUD advanced a long way in expanding homeownership among the country's most under-represented groups — young adults, minorities and low- to moderate-income families. When Cisneros arrived at HUD, the home ownership rate was 63.7 percent. When he left office in 1997 it had risen to 65.7 percent, its highest level since 1981. With motion’s set in place by Cisneros’ administration, at the end of Clinton's second term, homeownership continued its upward trend to 67.5 percent. At the close of his term, Cisneros acknowledged that lower interest rates and a strong economy were primary factors for the increase. However, the agency's ability to convince lenders, builders and real estate agents that there was money to be made in selling housing to low- and moderate-income individuals played a significant role, he said.

As the Clinton administration’s top housing official in the mid-1990s, Cisneros loosened mortgage restrictions so first-time buyers could qualify for loans they could never get before, contributing to the great housing and financial crisis that began 10 years later. However, in the August 5, 2008 issue of The Village Voice, Wayne Barrett argued that Andrew Cuomo made a series of decisions as Secretary of HUD between 1997 and 2001 that helped give birth to the country's current housing credit crisis.

Cisneros successfully resisted efforts to substantially reduce or wholly eliminate the Department. He spent countless hours during his four-year tenure pleading the agency's case while Congressional appropriators cut its budget. He presented a plan in 1995 to trim the department's budget by $13 billion over five years. Cisneros told the San Antonio Express-News: "There are efforts under way to eliminate important national efforts which provide shelter and assistance to millions of low-income Americans. I intend to stay and fight for our nation's commitment to people who need help and to reform HUD... This may be the last opportunity I have to be in public life...I just want to do everything I can to make the biggest difference I can."

Even his critics supported his efforts against budget cuts. Deborah Austin, director of legislation and policy for the National Low Income Housing Coalition, said in 1996, "For all we may not have liked about Cisneros, he was largely responsible for beating back pressure to eliminate and substantially reduce the department."

As Secretary, Cisneros attacked head on fair housing policies. “Fair housing,” he told Guy Gugliotta of the Washington Post, “is so vital that we cannot accomplish any of the other goals without it.” He unveiled a plan for HUD to provide $70 million in housing vouchers enabling low-income Americans to rent living space in the communities of their choice, an idea that brought Cisneros criticism in affluent circles in his native Texas and elsewhere. When it came to justice in home loans, Cisneros, through his agency, stood firm to lenders by letting them know that HUD would no longer tolerate unfairly denying minorities access to home loans, and aggressively penalized lenders who broke fair lending laws. The department also made it easier for alleged victims of fair housing to file complaints. During Cisneros’ four-year term, the agency's decisions in favor of victims of housing discrimination resulted in the awarding of a total of $80 million in damages, compared with $13 million in the previous four years. Cisneros greatly eased the bureaucracy to deal with fair housing issues much swifter. “The train started to run on time,” with complaints being heard much faster, said John Relman of the Washington Lawyers' Committee for Civil Rights and Urban Affairs. “It's hard to find somebody in that position who could be more supportive of fair housing than Henry Cisneros.”

Cisneros took on the unenviable position to completely restructure the HUD bureaucracy. His ability to make sweeping, innovative changes at HUD was hampered by deep budget cuts and elimination of some programs. The agency’s staff had been cut to 10,000 at the end of his term, from 13,500 since he took over. He consolidated offices, moved staff from headquarters to field offices and increased management training. He reduced the number of agency programs from 240 to 20. The most difficult job for Cisneros as part of this reform was changing the attitudes of employees, who were often resistant to improving service to their communities.

Cisneros also took a high-profile role in the clean-up operation after the 1994 Los Angeles Earthquake.

Citing the needs of his family, Cisneros opted not to serve a second term with the Clinton administration and completed his term as Secretary ending in January 1997. He said the decision was largely brought on by the mounting legal costs to defend an investigation by a special prosecutor into allegations he lied to the FBI about the size of payments he gave his former mistress, Linda Medlar. Cisneros, who made $148,000 annually in his cabinet position, had tuition bills at the time for a daughter in her third year of law school at New York University and another one who was a fourth-year student at Stanford, in addition to continued medical care bills for his ailing son. “Really, I came to do this for four years. I prayed I could stretch the finances that far,” he said. “This is about as far as I can stretch it.”

Medlar had resurfaced in 1994 with a breach of contract lawsuit against Cisneros, claiming he agreed to support her until her daughter’s college graduation but had discontinued monthly payments. Cisneros had made payments to her following the end of their affair, discontinuing them only after taking a pay cut upon returning to public life. Although Cisneros had divulged the payments during the FBI background check preceding his appointment, Medlar’s claims suggested that Cisneros might have misrepresented the amount. This led to Attorney General Janet Reno recommending a special prosecutor be appointed to investigate Cisneros in March 1985. In December 1997, Cisneros was indicted on 18 counts of conspiracy, giving false statements and obstruction of justice. In September 1999, Cisneros negotiated a plea agreement, under which he pleaded guilty to a misdemeanor count of lying to the FBI, and was fined $10,000. He did not receive jail time or probation. Clinton pardoned Cisneros in January 2001. After the controversy became known during his term as Secretary, Cisneros offered to submit his resignation to Clinton, who rejected it with a public statement that described Cisneros as "a good man and an effective public servant". Cisneros decided to stay in his position, adding in a statement in the San Antonio Express-News, "I regret any mistakes that I have made but affirm once again that I have at no point violated the public's trust."