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Castro Confirmed as HUD Secretary

The United States Senate voted 71-26 Wednesday to confirm former San Antonio, Texas Mayor Julian Castro as the next Secretary of the Department of Housing and Urban Development. Castro replaces outgoing Secretary Shaun Donovan who is leaving to serve as the Director of the White House Office of Management and Budget.

"I applaud the bipartisan majority of Senators who today confirmed Julián Castro as our next Secretary of Housing and Urban Development," said President Obama in a statement released to the press. "Julián has lived the American Dream in his own life, and I'm confident he will help Americans across our country seize their own piece of that dream for themselves and their children".

Castro has received praise for his work in San Antonio during his tenure as Mayor. San Antonio was named one of the U.S. Chamber of Commerce’s seven “Enterprising Cities” for 2013 and is the only city in America with a population of one million people or more to have a AAA bond rating from all three major rating agencies.

He takes the helm of a department faced with numerous challenges while overseeing a housing recovery that, while increasingly steady, is still far from the norms seen before the economic downturn.

For the most part, Castro has been noncommittal in what his approach will be to confronting the trials facing the housing market but he is on record recognizing issues with the current GSE conservatorship model as it stands.

In his confirmation hearing before the Senate Committee on Banking, Housing, and Urban Affairs, Castro declined to lend his support to a bill offered by committee chairman Senator Tim Johnson (D-South Dakota) and ranking Republican Senator Mike Crappo (R-Idaho) that would wind down Fannie Mae and Freddie Mac and replace them with a federally backed private insurance system. “The devil is in the details,” Castro said, adding that “the current conservatorship of Fannie and Freddie is not sustainable for the long term.”

Castro is seen by many as a future star in Democratic Party politics, often drawing comparisons to the early beginnings President Obama’s political career. In fact, he could be a dark horse Vice Presidential candidate for the 2016 Democratic Presidential ticket.

However, he appeared to have hit a ceiling in Texas politics because it was extremely unlikely that he would ever win statewide office thanks to Texas’ strong preference for electing Republican candidates. Accepting a federal post for the final years of the Obama administration allows Mr. Castro to raise his profile. His brother Joaquin is a Democratic congressman for the San Antonio area.

About Author: Derek Templeton

Derek Templeton is an attorney based in Dallas, Texas. He practices in the areas of real estate, financial services, and general corporate transactional law. His experience includes time as an Attorney Adviser for the U.S. Small Business Administration and as General Counsel for a nonprofit organization in Dallas. A self-avowed "policy junkie," he has a keen interest in the effect that evolving federal policy has on the mortgage, default servicing, and greater housing industries.
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