Preston: Turning it Around at HUD?

With time, it feels like Steve Preston’s appointment to lead HUD is making more sense.  Yes, he comes from a background outside of housing.  Yes, he only has a portion of a year to turn around an agency that has been run into the ground by its previous leadership.  Yes, there are good people available within the affordable housing and manufactured housing communities who could have been tapped.

All that said, Preston did lead SBA and that group has worked side by side with HUD in some endeavors.  The most significant is the response to Katrina.  Whereas HUD was largely pushed aside by FEMA, SBA pursued its own plan for providing capital to communities after the hurricanes.

Preston developed a Disaster Recovery Plan.  He benchmarked progress.  Having inherited a backlog of loan applications, SBA actually caught up during this period of high stress.

They also developed a special small business loan product, the Patriot Express Loan Initiative, for veterans, reservists, and National Guard members.  Some highlights of that response:

• More than 3,300 loans totaling approximately $1 billion to export businesses.
• New “State of the Agency” speeches
• over 100,000 loans in the Gulf after 2005.
• A new monthly reporting system to enhance accountability.

The Times-Picayune wrote about the visible improvements at SBA.

Preston is a “six sigma” leader.  This is the management style favored by hierarchical manufacturing and consumer products companies.  It is good for groups that want to increase operating efficiencies, develop lean economies of scale, and perfect well-honed niches.  While it doesn’t jibe with the creative economy, it works well at introducing accountability and transparency to firms that export real products with quantifiable outputs.

Not everyone is thrilled with the choice of Preston.  Senator Christopher Dodd has said that he would have liked someone with more housing experience.  Fair enough.  New York Representaive Nydia Velazquez questions the improvements at SBA, noting that too many large businesses are able to qualify for the special provisions afforded to small businesses through SBA.

At SBA, Preston’s realization of Six Sigma is typified by the Performance Management Office.  This was a management group seeking to align funding with agency goals.

Manufactured housing fits with that kind of model.