What Shaun Donovan knows about housing

NYC Mayoral Candidate Shaun Donovan
NYC Mayoral Candidate Shaun Donovan
lev radin/Shutterstock
NYC Mayoral Candidate Shaun Donovan during a press conference at NAN Headquarters.

What Shaun Donovan knows about housing

The former HUD secretary may not know what a home costs in Brooklyn, but he has a long, if sometimes controversial, record of tangible accomplishments on affordable housing.
May 12, 2021

Near the end of an endorsement interview with Democratic New York City mayoral candidate Shaun Donovan, New York Times editorial board member Mara Gay asked if he knew the median sales price of a home in Brooklyn. He guessed $100,000, which is off by a factor of nine. Donovan, in an email to the editorial board hours after the interview, said he misunderstood the question as referring to assessed value for property taxes. 

Getting that answer so outrageously wrong would be embarrassing for any mayoral candidate, but it’s especially embarrassing for Donovan, the former U.S. secretary of Housing and Urban Development and one-time housing commissioner in New York City. 

Being the housing guy with the detailed plans is at the heart of his pitch to voters, and Donovan has a lot to tout when it comes to his record on developing affordable housing. Those who have worked with him describe an effective leader and innovative thinker who spearheaded nation-leading initiatives. 

Donovan says his public service is rooted in having grown up in Manhattan during the 1970s and ‘80s, when homelessness was at historic highs. “It had a profound impact on me,” Donovan said in an interview with City & State. “It made me angry that we would allow our neighbors to sleep on the streets in the wealthiest city, in the wealthiest country on Earth.” While earning his masters in public administration and architecture at Harvard in anticipation of a career in housing, he came across the Nehemiah Plan, an initiative to promote home-ownership in the low-income Brooklyn neighborhoods of East New York and Brownsville through the construction of low-cost homes for sale. 

Upon graduating, he got in touch with the project's leader Rev. Johnny Ray Youngblood – who attended Donovan’s campaign announcement – and asked him to “put me to work.” That’s how Donovan landed his first job in 1995 at the Community Preservation Corporation, a nonprofit that helps finance affordable housing projects. “I saw him as someone who was eager to learn,” said Michael Lappin, who at the time was the president of the Community Preservation Corporation. He said Donovan worked on a variety of projects while working as his assistant, and that he often worked out of the organization’s field office to get on-the-ground experience. 

In 1998, Donovan followed his Harvard professor and mentor William Apgar to the Department of Housing and Urban Development during the Clinton administration. Despite his young age, Donovan gained a reputation as an effective deal-maker. “He’s an outstanding public administrator,” Michael Kane, executive director of the National Alliance of HUD Tenants, told City Limits in 2004. He credited Donovan with brokering an agreement that saved 300 affordable apartments in Boston and for getting some key decisions from the Office of General Counsel. By the time he left HUD in 2001, Donovan was serving as the acting Federal Housing Administration commissioner.

After a stint in the private sector working for Prudential on affordable housing, Donovan went to work for then-New York City Mayor Mike Bloomberg as commissioner of the Department of Housing Preservation and Development in 2004. For the next five years, Donovan led Bloomberg’s plan to build or preserve 165,000 units of affordable housing. He is credited with pushing the administration to adopt voluntary inclusionary zoning that permitted developers to build at a greater density in exchange for affordable housing, the first update to the city’s inclusionary zoning policy in decades as Bloomberg undertook massive rezonings. “Shaun deserves an enormous amount of credit for moving the city of New York a great deal further down the path towards a robust inclusionary housing policy,” said Rafael Cestero, a deputy commissioner under Donovan who later became New York City Housing Preservation and Development commissioner himself. “(He) laid the groundwork for what has become an even more progressive and even more aggressive policy in recent years, as we have gone to a mandatory program.” However, both Donovan and Cestero warned against mandatory inclusionary zoning in 2004, something that housing advocates were pushing for at the time and the de Blasio administration has since adopted. Donovan cautioned that the requirements could discourage investment during economic downturns. 

Donovan was also behind creating the New York Acquisition Fund, which provided developers early capital to create affordable housing. Michael Bodaken, then-executive director of the Washington-based nonprofit National Housing Trust, called the fund “path-breaking” in a 2006 Times article and an example for other cities to follow. And Donovan remains immensely proud of Via Verde, a first-of-its-kind affordable and sustainable housing development in the South Bronx he helped develop and later was the site of his campaign announcement. 

But Bloomberg’s legacy on housing is mixed in the opinion of many Democrats. The affordable housing created under the administration was found to have often been priced too high for the lowest-income New Yorkers to benefit. And while new inclusionary zoning policies created affordable housing at greater rates than in the past, those units represented less than 2% of the housing created during an administration marked by massive rezonings and enormous growth. Median rents rose 19% in Bloomberg’s first nine years in office, and more than half of all New Yorkers were rent-burdened by the end of his tenure.

In this campaign, Donovan has leaned far more heavily on his connection to President Barack Obama and didn’t even mention Bloomberg in his announcement video, but he has defended his time under Bloomberg. “There are lots of housing advocates that you could talk to who believe we accomplished some really important things during that period,” Donovan said. Cestero, who now heads up the Community Preservation Corporation, said that with hindsight, there are areas for improvement, but that Donovan pushed for the best outcomes he could. Tenants PAC Treasurer Michael McKee is one housing advocate with harsher things to say about the Bloomberg years. In 2006, McKee called Donovan “the best housing commissioner the city has had since I became an organizer 36 years ago.” Asked recently if he still agreed with that assessment, McKee said he did not. “I think his record at HPD is a mixed bag at best,” Mckee said. He acknowledged that Donovan produced some affordable housing and is very competent, but he said that Donovan did some "terrible" things as well. 

McKee pointed specifically to a development that was formerly part of the state’s affordable Mitchell-Lama program called Independence Plaza North in Tribeca, Manhattan. The historic development was home to thousands of tenants, and McKee said a tax decision from Donovan effectively prevented Independence Plaza North from remaining rent-stabilized.

Diane Lapson, president of the tenant association, said that Donovan never met with her or other tenant leaders, but met with the lawyer for the development’s landlord Laurence Gluck multiple times before making his decision. His role in the debacle, which led to yearslong court battles, has stuck with her. “When I saw Shaun Donovan was running for mayor, it was like a recurring nightmare flying through my head at that moment,” Lapson said. “I can never trust him to be fair with housing, especially in New York, where this is one of our biggest problems.” 

When asked about Independence Plaza North and another former Mitchell-Lama development McKee said he failed to keep truly affordable, Donovan spoke broadly about the need for permanent affordability to avoid these types of situations. “I'm a big believer that the best way to fix this is to never allow the moment where someone can actually opt out of the programs,” he said. His campaign sent an additional statement in response to follow-up questions about the specifics of Independence Plaza North. “Unfortunately, given that the deal was already agreed upon and executed before I arrived at HPD, our hands were effectively tied,” Donovan said in an emailed statement. “Under these constraints, we still did everything we could to protect these tenants."

This incident, no matter how bad a taste it left in the mouths of some tenant advocates, did not prevent Obama from nominating Donovan as Housing and Urban Development secretary in 2009. Donovan helped launch the Center for New York City Neighborhoods, an organization at Housing Preservation and Development, to address the mortgage and foreclosure crisis by providing counseling and mortgage assistance. He credits that program with catching Obama’s eye.

“I would say to my colleagues that Mr. Donovan is the most experienced nominee for HUD secretary this committee has seen in a long time,” then-Sen. Christopher Dodd said during Donovan’s nomination hearing before the Committee on Banking, Housing and Urban Affairs, which Dodd chaired at the time. 

Among transition team members, Donovan was a top pick as well, someone they hoped Obama would choose. “For all of us, Shaun brought not just the substantive capacity, but the leadership and instincts and follow-through and managerial skills to be able to actually deliver,” said Ken Zimmerman, who served on Obama’s Housing and Urban Development transition team and then as senior adviser to Donovan for his first year. Zimmerman said that despite his policy wonk appearance, Donovan was good at and enjoyed the politics necessary to get things done.

In his mayoral bid, Donovan emphasizes his time in the Obama administration, first as Housing and Urban Development secretary and later as the director of the Office of Budget Management, perhaps partially to his detriment. The Times said in their endorsement of former Sanitation Commissioner Kathryn Garcia that Donovan “appears more like a Washington insider than a big city mayor.” But like Garcia, he also paints himself as an effective crisis manager. He was tasked with helping lead the nation out of the mortgage and foreclosure crisis at the start of Obama’s tenure, when he led negotiations on a $25 billion deal with mortgage servicers over foreclosure abuse. When Superstorm Sandy hit, Obama put Donovan in charge of overseeing the recovery efforts, with Donovan launching the Rebuild by Design competition to increase resiliency in New York City. And he was part of the federal task force leading the nation’s response to the Ebola and Zika epidemics, while overseeing trillion-dollar budgets at the Office of Budget Management. “Sometimes I joke – I try not to take it personally – crisis seems to follow me wherever I go in public service,” Donovan said with a chuckle. But it’s something that he believes has prepared him for the role he’s seeking. 

Zimmerman said that when Donovan took over at the Department of Housing and Urban Development, it was a greatly diminished agency with a much smaller headcount than at its height. “Part of what I thought Shaun did really well was to bring top-flight talent in,” Zimmerman said. And Cestero, who took over at the city Department of Housing Preservation and Development, considered the team that Donovan built one of the most important things he inherited in New York City. 

Certainly, Donovan comes into the mayoral race with a wealth of experience, and few have had qualms with his qualifications in the past or now. But a doozy like his gaffe in his endorsement interview with the Times may wind up following the low-polling housing wonk for the remaining month and a half before Election Day. New Yorkers aren’t ones to easily forget a faux pas, especially by a rich white man, no matter how many times he name-checks Obama.

Correction: Due to an editing error, City & State initially misstated how long after the Times interview Donovan followed up. 

This article is part of our For The Record series, examining the leading mayoral contenders’ professional records. You can read the rest of the series here.

Rebecca C. Lewis
is deputy state politics reporter at City & State.
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