Shelterforce The journal of affordable housing and community building

Summer 2011 » Policies » Housing Policy Interview Series » July 25, 2011

Conrad Egan

By Harold Simon

What do Saul Alinsky, Students for a Democratic Society, HUD, and the Housing and Community Development Department of Fairfax County, Virginia, have in common?

Conrad Egan.

Over his five-decade career, Conrad has been an organizer, a housing developer, a special assistant at HUD, the CEO of a national research and policy organization, and an active participant in the development of affordable housing in his home community. In 2010, Conrad turned the reins of the National Housing Conference over to Maureen Friar. In retirement Conrad remains as busy as ever, if not more so, working to end homelessness in Fairfax County and serving on advisory boards to the Virginia governor, Housing Virginia, and DC’s Community Preservation Development Corporation. We spoke with Conrad in February 2011.

Shelterforce: So how did you fall into the clutches of the affordable housing world?

Conrad Egan: Fell into the clutches, that’s a nice way to put it. I’ll start with elementary beginnings. I was born and bred near Akron, Ohio, in 1942. I lived in Cuyahoga Falls, which is one of those Mayberry-type suburbs just north of Akron, when Akron, along with the automobile industry, was booming.

I went to high school in Akron at St. Vincent High School and my one claim to fame is that the school is also Lebron James’s alma mater! So he and I are both graduates of the Fighting Irish of St. Vincent’s.

Well, I think you both get to bask in each other’s glory.

Well, thank you. And in keeping with modern times, St. Vincent, which was a coed high school, merged some time ago with an all-female high school called Mercy, so it’s St. Vincent Mercy now. That was a smart move on their part. It broadened their client base.

Anyway, so I grew up in this sort of supportive, hometown-y kind of atmosphere. The 2003 U.S. Supreme Court case, Cuyahoga Falls v. Buckeye Community Hope Foundation (see The Fight Over Low-Income Housing, SF #131), still embarrasses me because my then-leaders in Cuyahoga Falls used various devious devices to try to prevent a low-income housing tax credit development from being built in my hometown. So that’s one of Cuyahoga Falls’s ignominious claims to fame.

In ‘59, my parents and I moved to Detroit and I went to the University of Detroit, and then to Ann Arbor, University of Michigan School of Social Work, and chose as my specialty community organizing. I was there with people like Tom Hayden and Barry Bluestone, founders of Students for a Democratic Society. In that context I began to form my views about developing communities.

My wife and I lived in Ann Arbor for my first year there. Then we moved into Detroit just outside of the CBD in a neighborhood called Corktown, and I commuted to school. Around then, I came across a book called Crisis in Black and White, by Charles Silverman. You may recall, there’s a chapter in there about some guy called Saul Alinsky.

I was fascinated with this person, and my wife and I hopped in our car and drove out to Chicago—we had contacted him beforehand—to his office. I don’t know if you ever met Saul personally.

No.

Sort of grumpy, garrulous, rumpled, very direct, salty kind of person.

Exactly how I imagined him.

Right, with the fedora and the rumpled raincoat. He looked like a flasher, frankly, and he said, “Well, why are you here? Get yourself back to Detroit and hook up with this West Central Organization thing,” which I did. He would come in about once a month, and we would sit down with him and talk tactics and strategy and what was going on.

As you know, one of his principles is that people are organized on the basis of their self-interest, and one of the self-interests of the people I was working with in that neighborhood was affordable housing. So I sort of got, to use your word, clutched by that and worked with some neighborhood organizations to develop housing near Wayne State University.

What was Detroit like in ‘65?

Well, it was very different from what it is now. It was still thriving. The neighborhood where I worked was very old, a good, strong, solid working-class, modest-income community. The Teamsters International headquarters was there, Tiger Stadium was there as well, as I recall, just west of the central business district, starting at the south of Corktown and then moving up toward West Grand Boulevard, which looped around, if you know anything about Detroit. The homes that were there then have sort of eroded into the ground, and there are these vast tracts of emptiness.

We literally experienced the ‘67 riots. We could hear the guns—there would be a “pop,” and then there would be a 50-caliber machine gun response, “pop-pop-pop.” And the major rioting occurred a little north of us, up 12th Street, north of the boulevard, and then over on the west side, over on Cass and other streets like that. Our neighborhood supermarket got burned out. A lot of our neighbor institutions were destroyed. We were in our home and we heard all this stuff going on, but we didn’t feel threatened or endangered.

I was working at the time at University of Detroit Housing Law Project over on the immediate other side of the CBD at the University of Detroit Law School. And I walked into the office, and there was nobody there, and the streets were deserted. So I eventually called my boss, who was located close by in a development called Lafayette Park. This is an interesting development in Detroit that was designed I think by Mies van der Rohe, if I have my architects correct. It’s typical Mies style.

And so she said, “Hey, come on over to my apartment and we’ll get together.” It was a fascinating, amazing picture. If you looked out over this high-rise, and looked down on the folks who were there because they didn’t go to work because they were scared, they were down there swimming in the pool and having their margaritas and Bloody Marys. But as you looked out over the city, you could see the smoke plumes coming up.

What an amazing picture.

Later I did some work up in Lansing, and we got some tenant landlord legislation enacted.

I was recruited to help organize and apply for a Model Cities grant from the teeny-tiny city Highland Park, which, along with an adjacent city, Hamtramck, are completely surrounded by Detroit.

And this was ‘68 or ‘69?

Yes. I got to know some of my friends in Washington who were running the Model Cities program out of HUD headquarters, which was brand-new at the time. They would come to town every now and then to observe and monitor and provide advice. I got recruited by Nick Farr from the outgoing administration to come to Washington in 1969 to work in the Model Cities program at HUD. Nick Farr was the assistant secretary for Model Cities at the time, and then he was replaced by Floyd Hyde when the Republicans came in, and Floyd’s deputy was Bob Baida. My job was to monitor and sort of relate to the Midwestern part of the country, which meant my territory included Michigan, Illinois, Ohio, and places like that.

I was there three years, and in ‘72 and I was offered an opportunity to move out to San Francisco by Peter Clute, the HUD regional administrator. The nice thing about being there is that you’re 3,000 miles away from Washington, D.C., and you can do what you damned well please.

Baida recruited Peter to head up the Program Planning and Evaluation office. It was really sort of PD&R at the regional level. We evaluated programs and came up with recommendations—and it was a great time. The kids were growing up. We really enjoyed the city, enjoyed working with HUD, and getting to know people up there with whom I’ve maintained friendships to this day.

A highlight was when we were designated by HUD—with Jim Lynn being HUD secretary at that time—as the responsible contractor to do an evaluation of the subsidized housing programs. So we produced something called the Subsidized Housing Evaluation that basically concluded that the programs are successful by serendipity and happenstance. Gosh, it’s amazing that some of these things are successful because they seem to be designed to fail from the start.

Then, in ‘79, Larry Simons recruited me to come back to Washington to work with Marilyn Melkonian, who was the deputy assistant secretary for multifamily activities at the time. I was asked to head up the Office of Multifamily Housing Management and Occupancy. That is today called the Office of Asset Management and it’s responsible for the management of all the [private] HUD-owned, HUD-insured, HUD-managed properties and subsidy programs in multifamily.

So I’m directing this office, having a lot of fun, meeting a lot of very, very wonderful people now at groups like the National Affordable Housing Management Association and I was recruited to join NHP [National Housing Partnership], which was sort of the outcome of the NCHP, the National Corporation for Housing Partnerships, by Lindsay Crump, who was the head of property management there.

So now we’re at about 1986, correct?

Yes, and this is not an insignificant detail because by 1986, NCHP gradually dissipated its resources. The company really built itself pre-’86. At the time, Harold, we were the largest owner-operator-syndicator-manager of affordable housing in the nation, and our goal was to be able to offer ourselves to the investors of this great nation as a company that never had a property that failed.

And so we ended up putting a lot of money into these properties. We ended up setting up our own management company because we learned that we couldn’t rely on our local partners to manage these properties the way they needed to be managed.

That’s a real interesting point, and it reminds me of some of the realities that have sprung up around NSP and the capacity issues and abilities of organizations that are trying to recover all these properties—and that’s in the nonprofit sector.

Exactly. In ‘84 or ‘85, the board of directors of NCHP decided that they needed to recapitalize themselves and bring in additional private sector investors. They brought in Rod Heller to “turn things around.” And he did. One of his first steps, very wisely, was to bring in additional investors—Weyerhaeuser, Berkshire Hathaway, Warren Buffett, Charlie Munger. Jack Creighton, our representative from Weyerhaeuser, went on to run United Airlines for a while.

We got a lot of new capital, which we used I think constructively. But we changed the organization to something called NHP, Inc., registered in Delaware. And so NCHP became the founding foundation, and we graduated into NHP, Inc., which still maintained a vestigial federal connection but was now even much more independent than before.

Then tax credits come along and we say, “Oh, gosh, what is this strange animal? We don’t know anything about it. Let’s not get involved in it,” so we didn’t. We floundered around and got involved in things like what you would now call assisted living—we called it rental retirement communities—which we did not do a very good job at, and gradually kind of spiraled down. The properties that we had were of questionable value and were not always performing all that well, particularly when we got into more conventional market-rate properties. We used the old subsidized housing syndication model and used what we would now these days called mezzanine debt in lieu of equity, the syndicated equity, and learned painfully that, when the properties start to go south, the lenders call in their mezzanine debt. So we were forced with the choice of either letting the properties go or funding them.

Rod recapitalized the company once more and brought in the Harvard Endowment Fund. As it turned out, the real value that the company had was the management company.

What was your next step?

I went back to HUD. I was intrigued by what was happening with the new Clinton administration and Secretary Henry Cisneros and Assistant Secretary Nic Retsinas and Deputy Secretary Helen Dunlap. I was there from ‘93 to ‘96 as a simultaneous special assistant to the assistant secretary for housing, FHA commissioner, and deputy assistant secretary for multifamily.

That was a wonderful time at HUD, a lot of vigor, and a lot of leadership, which is not always exhibited as strongly as it could or should be. Leadership was very prevalent during that administration.

You’ve worked with five administrations. What are some the big changes you’ve seen, and the policies—good and bad—that have endured?

I have an unfortunate tendency to come up with these bad metaphors, but back before Louie Sullivan invented steel high-rise concepts, buildings were built out of stone, and you had to have a very strong, big, very heavy foundation in order to support the superstructure. Think of the Monadnock Building in Chicago, which is usually cited as one of the principal examples of that. That said, I think, fundamentally, the programs that have been established and have grown over time, like 221(d)(3) BMIR [insured and subsidized mortgage loans], 236 [rental assistance], 515 [rural rental housing], 202 [senior housing], [and] the project-based Section 8 programs in conjunction with the 221(d)(4) FHA insurance program have established a strong, very solid set of principles and commitment to affordable housing that melds FHA and other forms of mortgage lending with tenant subsidy programs with equity that comes through a variety of resources. We now, of course, get that principally from the low-income housing tax credit program.

The other fundamental event was what I would call a devolution. When CDBG came along it established a very new model: “Let’s let the state and local officials make the basic decisions. We’ll provide the resources.”

On the big picture, we need to reach out beyond the boundaries of just housing programs and think about how they fit into community development, how they fit into transportation systems, how they fit into the way neighborhoods grow. I think that there’s much more of a sense that for affordable housing to be successful it has to be linked in to other aspects of community development.

Then there is the advent and the burgeoning strength of the nonprofit housing development corporations that are aided and abetted by wonderful organizations: by LISC, Enterprise, NeighborWorks America, Housing Partnership Network, Stewards of Affordable Housing for the Future, and of course, our friends at the MacArthur Foundation.

The CDCs and nonprofit housing development corporations are mission-directed organizations that are committed to not throwing profits off to their investors but to putting those profits back into the community.

For much of the time that you’re talking about, there were no CDCs, and so development was either government or for-profit.

You’re right. It was the private for-profit developers who, frankly, were doing very, very well because of the way the programs were set up and then there were the public housing authorities, and that was pretty much it. I don’t want to either over-emphasize or under-emphasize the importance of the CDCs and the nonprofit housing development corporations, but I think they’ve added a whole new dimension. That said, many of those organizations are now at the point where they’re assessing and re-assessing their balance sheets, if I can put it that bluntly. They’re looking at their viability and are considering how they want to deal with the future.

And so, personally, I think that we’re going to see more partnerships, more various holding company merger kind of relationships amongst those organizations who, frankly, are now at the point where they need to decide what they’re going to do now that they’re into their adulthood.

Their balance sheet is only part of the equation. What about their role in the community and their mission?

That’s a very interesting point. I’m involved with various nonprofit organizations, and what we’re struggling with, Harold, is how smaller organizations can preserve their core mission while at the same time becoming more efficient, effective, and strong from a financial standpoint? Do they all need to have their own separate development, asset management, sometimes property management operations, or is there a way of thinking about consolidation of some of those functions while enabling the organizations, in a way, to go back to their roots?

Is it as housing development organizations, or is it as community change organizations? Are they there to build buildings or galvanize the electorate?

In order to, quote-unquote “build buildings,” you need a very strong, powerful development asset management acquisition, property management operation, and sometimes that, I think, will need to come from some kind of consolidated structuring, while at the same time emphasize the core mission of these organizations.

Randy Stoeker wrote a piece for us called Empowering Redevelopment: Toward a Different CDC (SF May/June 1996), in which he basically said we don’t need a whole lot of little CDCs, but rather a few big, mission-driven nonprofits that have really good capacity, really good skills, and are willing to work with other neighborhood organizations who tell them what they need because they’re the voice of the community.

Yes. Well, and I think the same challenge and opportunity applies to CDFIs. I think many of the CDFIs are realizing, similar to the CDCs and the nonprofit housing development corporations, that they need to consolidate and to become more effective by merging and partnering with other CDFIs in whatever manner is most appropriate. David Smith (see essay in this issue), operating through the Affordable Housing Institute, did a publication called Mission Entrepreneurial Entities: Essential Actors in Affordable Housing Delivery. He got funding from the Bill and Melinda Gates Foundation, and he did, frankly, a very, very nice report that Ray Christman wrote the U.S. part of and Gaynor Asquith wrote the U.K. part of, comparing and contrasting experiences with, and drawing lessons from exactly the organizations we’re talking about.

Let’s talk a bit about your experience at National Housing Conference

First of all, I want to highlight the longevity of the National Housing Conference. It’s celebrating its 80th birthday this year. Under Maureen Friar’s leadership it really is in a strong position.

I was blessed with an opportunity, going back to my NHP days, to get involved with the organization. Back then it was really, if you’ll pardon the phrase, a paycheck-to-paycheck organization. There was a time when the senior officers had to pull their checkbooks out of their pockets to meet payroll.

I realized that the organization needed to be recapitalized and reconstituted. This was just as I was going over to HUD back in ‘93. I worked together with other officers and board members, and we brought in Bob Reid to be our executive director. Bob did a wonderful job of strengthening the organization’s finances and its visibility and its, frankly, credibility within the Washington community, national community.

Come 1996, I’m at HUD, and Bob says, “Hey, Conrad, why don’t you come on over as the policy director?” I said, “OK, time to leave HUD. I’m ready to go.”

I served under Bob, served under great chairpersons like John McIlwain, Mike Pitchford, and many others. And comes along 1999, 2000, and Bob calls me into his office—I forget the exact date—and who’s sitting there but Dick Ravitch. And Bob says, “Dick’s looking for someone to head up the Millennial Housing Commission. Would you be interested in that?” And I said, “Well, yeah, I guess so. Gosh, what the hell’s a Millennial Housing Commission?” So I went off to do that for three years, and then came back in 2002 to the conference as president and CEO. Bob Reid moved over to head up the [NHC research arm], Center for Housing Policy. We were a great team. After a bit, Bob moved on and we recruited, very fortuitously, Jeff Lubell to head the center.

After having been the president and CEO for a number of years, I decided that, gosh, I’m pushing 70, and the organization—while very strong in financial position and policy impact—really needed a good, strong five-year commitment to raise it to the next level. And I said, “I really think it’s time to step aside and to bring in new leadership.”

And so I worked with my board and my chairman at the time, Helen Kanovsky, and then Dan Nissenbaum, on what I think was a successful transition and brought in Maureen. And she’s now finishing up assembling her team and the conference remains a very strong, viable, and credible organization with a great future ahead of it.

A few minutes on your work in Fairfax. I remember being in your office once and you showed me a photograph or plans for a an innovative, mixed-income housing development called The Green.

Yes. We now call it West Glade. This was a complex is Reston, Virginia, that was a 100 percent public housing complex. And we figured out, under Walter Webdale, the director of the Housing and Community Development Department, how to move roughly half of the public housing units out of The Green and into other places in the county using our right to purchase units through our inclusionary housing ordinance—not without some conflict, by the way—and then we replaced those units with tax credit units. We revitalized and rehabilitated the property and now we have a mixed-income property that’s doing very well these days, so thank you for remembering that.

And speaking of Walter, he actually asked me if I wanted to serve on the Fairfax County Redevelopment and Housing Authority as a commissioner. And I said, “Gee, Walter, I don’t know, maybe,” and I eventually was appointed. The Fairfax County Redevelopment Housing Authority is a consolidated authority—we are a public housing authority. We are an HFA. We are a redevelopment authority. We run the HOME and CBG programs all at the same time. We’re a one-stop shop.

I served for eight years as a commissioner on the board, six of those as chairman. And I stepped down about two years ago, again for similar reasons as I did at NHC, because it was time for new leadership, time for me to move on, and time for younger, more energetic people with greater and broader vision to come in, and so we organized that.

But one of the very strong strengths of the Fairfax County situation is, first of all, we’ve had very, very strong and supportive leadership at the elected level. I was originally asked to serve when Kate Hanley was the chairman of the board of supervisors, and she was followed by Jerry Connolly, now Congressman Connolly—he’s actually is my congressman—who appointed me when he was the Providence district supervisor for a while to the RHA board, and now Sharon Bulova, who is the current chairman of the board of supervisors.

And while Jerry and Sharon have different ways of operating, they have continued to advance the cause of affordable and workforce housing, and inclusionary housing in Fairfax County. And we’ve adapted over time, realizing that we needed to adjust our expectations, which five years, six years ago were different than they are now. So we’ve developed an ongoing annual strategic planning document called “The Blueprint,” which is a way of updating our priorities and getting confirmation from the Board of Supervisors about them, and then working that into the budget process.

I also have been pleased to serve as a member of the governing board of the Fairfax County effort to prevent and eliminate homelessness, which actually I think has been quite successful so far. We’ve got a steep hill to climb, but we’re sort of one-quarter of the way there, and we know that we have to pick up the pace.

And also, recently, I was appointed by Gov. McDonnell to be a part of this housing policy group in Richmond, which was called to help him and his senior economic advisor, Bob Sledd, update, modernize and energize the state’s housing and community development and transportation, sustainability, and special needs policies. And so we did that, and now we’re about to implement it. I also serve on the governor’s foreclosure task force.

So I can see you’re keeping busy.

Well, as I sort of move toward the sunset of my career, Harold, I think I’m gravitating more toward Virginia and Fairfax County. I’m also on the board of something called Housing Virginia, which is a statewide coalition of for-profit, nonprofit, and public leaders to advance the cause of affordable housing in Virginia. But I also remain involved with organizations like Community Preservation Development Corporation, and we own about 5,000 units mainly in the D.C. Metro area. We sometimes refer to ourselves as a Mid-Atlantic organization, although we’re really D.C. Metro-based.

As an organizer who became a developer who ran a policy organization, where do you think our field is heading, and what are the challenges ahead?

First of all, I think we have the tools we need. We just need to make sure that they remain strong, supple, and well funded. The LIHTC program replaced an only occasionally effective monitoring system for privately owned assisted properties (which I ran for many years) with a very effective self-enforcing performance-based system by putting the investors at risk for property failure. And in a truly “paradigm shifting” event, we have learned that we can prevent and eliminate homelessness through ”Housing First” and permanent supportive housing strategies at the local and state level with strong federal support.

I think we’ve also learned that we need to connect across the various dimensions of the challenge we face. It ain’t just housing, it’s community development. You know, Harold, what really concerns me about the future of this great nation, and this is where I get stumped, is what role housing can play in this. The specter of a serious shortage of affordable rental homes still haunts us, and I’m really concerned about the growing gap between incomes and skill sets and jobs. I see our friends in lower income communities who are increasingly being left behind for a variety of reasons: the globalism challenge, the technology challenge.

We thought for a while that homeownership would help to close that gap, and that’s turned out to be a chimera. So how do we get the kids of today into the jobs of the future and what role does affordable housing and community development play in that? Is this a new mission for CDCs, CDFIs, for-profit housing development corporations, HUD, FHA, and so on? If I were to point to the next biggest challenge that this nation faces, I think it would be that.

Thank you.

Published by the National Housing Institute