Up to the Challenge of HUD?

Alphonso Jackson, who resigned last week as head of the Department of Housing and Urban Development, was a bit of a lightning rod. Appointed to the position in 2004, Jackson had been criticized for what appeared to be rewarding federal funding in the form of government housing contracts to political allies, while denying the same money to those who criticized his department or the president. "Why should I reward someone who doesn't like the president, so they can use funds to try to campaign against the president?" Jackson asked during a 2006 speech.

Now Jackson is gone—but the challenges of the current housing market are tougher than ever. Last week former head of the Small Business AdministrationSteven Preston was tapped as the new HUD secretary for the 10 remaining months of Bush's administration. But with limited time, Preston will have to address big issues like Gulf Coast construction, high rates of foreclosure and a slumping real estate market. Sheila Crowley, president of the National Low Income Housing Coalition, spoke to NEWSWEEK's Daniel Stone about some of the things Preston should prioritize and what she thinks of the legacy of Alphonso Jackson. Excerpts:

NEWSWEEK: In what kind of state is Jackson leaving the department?
Sheila Crowley: Well, public housing is suffering from a significant loss of capital funding, which means public housing is continuing to deteriorate. The old programs are in need of attention, and now people are looking for government intervention.

How would you characterize the legacy of Alphonso Jackson?
One of the key things that will be seen as Jackson's legacy is the serious problems with housing post-Katrina. The programs that were put in place have been very inadequate, and the secretary hasn't exercised any leadership whatsoever in trying to move that along. I should mention that Congress did make the decision to give some money to the governors, but HUD has had enormous power to direct how governors should direct those dollars, and [Jackson] was pretty hands-off. Another thing: HUD had direct responsibility for the reopening of federally assisted housing in the Gulf Coast, and that's been very poorly handled.

President Bush said that the department now needs someone with "strong leadership at a time when our housing market is experiencing a period of change and uncertainty." Does Steve Preston fit the bill?
Steve Preston has no background in housing that we know of. Obviously, if you had an understanding in housing policy, that would be an advantage. I think it says a lot for the Republican Party that they have an inability to find someone to do that and who could be a good manager. I don't have any inside knowledge about why he was appointed aside from that he was brought in a couple years ago as a turnaround guy at the Small Business Administration, which was under serious criticism—

And he seems to have done a good job there.
That's what the word is. He's credited for having a lot to do with the turnaround. Senator Kerry, who chairs the Small Business Committee, has said nice things about him. Other government officials have been reasonably complimentary. I think people want to give him the benefit of the doubt.