Josh makes a few essential points: (1) In the regions in which a lack of affordable housing is a serious problem, the culprits are stringent land use regulations that cater to incumbents; federal housing subsidies are not a good solution for the underlying problem. (2) The case for in-kind housing support programs like Section 8 vouchers is far weaker than the case for in-kind medical benefits. Replacing Section 8 housing vouchers with an expanded EITC would almost certainly leave poor families better off.
In his off-the-record remarks, Romney suggested that the U.S. Department of Education could serve a useful function by counteracting the influence of teachers’ unions. This struck me as a sensible view. In theory, one could imagine a U.S. Department of Housing and Urban Development that aims to counteract the influence of incumbent “homevoters,” but this is basically impossible given the fact that a majority of the electorate consists of homevoters. While we might be able to curb the mortgage interest deduction, which is not under the purview of HUD, it is hard to imagine that the federal government will effectively use its leverage to press for the relaxation of local land use regulations, though I’d love to be proven wrong. The most logical step, but also one of the most unlikely, would be for state and federal courts to throw out decades of precedent and recognize that zoning and rent control constitute regulatory takings, an utter fantasy which of course wouldn’t involve HUD.
So yes, this is a department that can safely vanish.