From Press Reports
April 21, 2008

President Bush has named SBA Administrator Steven Preston as the new Secretary of the Department of Housing and Urban Development (HUD) to oversee the nation’s housing policies at a time of crisis in the industry.

If confirmed by the Senate, Preston would take over for Alphonso Jackson, whose tenure was tarnished by allegations of political favoritism and a criminal investigation. Jackson’s last day on the job was April 18. Bush was to name Preston’s nomination at midday before going to Camp David.

Jackson leaves behind the wreckage of a national housing crisis and a trail of unanswered questions about whether he tilted the Housing and Urban Development Department toward Republican contractors and cronies.

The change at the top of HUD comes at a crucial time for the U.S. housing sector. The agency has been a central player in the Bush administration’s response to the subprime mortgage crisis. Jackson’s tenure was dogged by accusations of improper behavior, allegations that he denies. Philadelphia’s housing authority has accused Jackson in a lawsuit of trying to punish the agency for blocking a deal that involved one of his friends. Jackson, who led HUD since 2004, also raised eyebrows in 2006, when remarks he made were interpreted to suggest that political affiliation had a bearing on how HUD contracts were awarded.

The senior administration official described Preston as an effective manager and problem solver with a strong financial background. Preston “understands the important role the housing market plays in our economy,” the official said.

With the housing sector buffeted by the subprime mortgage crisis, HUD has taken on a higher profile. It has partnered with the Treasury Department on Hope Now, the administration’s collaboration with the private sector to help strapped homeowners. Lawmakers also are discussing a potential expansion of the role of the FHA – a HUD division – in easing the crisis.

Preston has been at the helm of the SBA since July 2006. He was confirmed unanimously by the Senate for that position, which may bode well for his HUD confirmation. Given the importance of HUD in the White House’s effort to ease the housing crisis, the administration wants to avoid a contentious confirmation battle.