Pam Patenaude on Puerto Rico Recovery, and What the ‘Housers’ at HUD Need to Do

Pam Patenaude and Dave Stevens talk about Puerto Rico recovery after Hurricane Maria, and their concerns for the future of HUD.

When Pam Patenaude was sworn in for her fourth tour of duty at HUD in 2017, she was already experienced in dealing with disasters.

She had been with HUD in 2005 when Hurricane Katrina hit, and had worked on rebuilding efforts that year after Hurricanes Wilma and Rita.

Twelve years later, Patenaude was again tapped by the President to serve as the Deputy Secretary of Housing and Urban Development. As she awaited confirmation to take the position, the 2017 storm season was already devastating. Hurricanes Harvey and Irma were causing catastrophic damage to large swaths of Texas and Florida over a two-week period just before Patenaude’s Senate confirmation on September 15, 2017. And just two days later, Hurricane Maria struck.

In a wide-ranging conversation with former FHA Commissioner, Dave Stevens, Patenaude recalled the disaster and its terrible impact on the US territory of Puerto Rico.

Patenaude observed that she had left HUD in 2007 during the rebuilding after the storms, and returned during an even more active storm period. “It was unbelievable to think that I had left the government in the midst of the largest disaster recovery in the country. And then came into this, the most destructive disaster season that the country has seen,” Patenaude said.

While the majority of their conversation focused on the US response to the disaster, Patenaude and Stevens also discussed the state of HUD, and their concerns for its future.

Stevens pointed out that housing is not a partisan issue. “It doesn’t matter which administration is in place. HUD desperately needs modernization, particularly in some of the most severely deferred programs that have had no attention for so long,” he said. “If you want them there during the bad times, you gotta be there and invest when you can to help bring that program up to speed.”

Much more needs to be done, Stevens added. “The percentage of that employee base which is eligible for retirement right now is alarming,” he said. “There’s so much work that has to be done to make HUD viable for the next decade, and decades beyond.”

 

The disaster – both natural and manmade

In the aftermath of Maria, Patenaude said she was prepared – but also somewhat surprised – for how organized the HUD response was.

“The disaster recovery framework was put in place during the last administration, and it was actually pretty well organized at HUD level,” Patenaude recalled, adding that FEMA was also organized. But she added: “They were perhaps not prepared to have such catastrophic storms hit.”

Compounding this was the unique challenge of Puerto Rico’s geographic isolation. Patenaude coordinated HUD’s efforts from DC, establishing a dialogue with officials on the island to identify what their immediate needs were. She noted that Stevens helped with this – as CEO of the Mortgage Bankers Association at the time, he connected her with officials from the Puerto Rico MBA.

She didn’t visit the island during the immediate aftermath of the storm, while it was still in the search and rescue phase. Transportation to and from the island was challenging.

“It was very difficult to get a seat on a plane, and I felt that taking a seat on the plane was not the right thing to do,” she said. It took a few weeks before she went to the island in person.

The role of HUD in a disaster like Maria is to help with long-term recovery, while the immediate aftermath was the responsibility of FEMA.

“We assisted FEMA in the very early stages. Hundreds of people that work at the Department of Housing and Urban Development volunteered,” she said. While they were working to get boots on the ground, officials were working remotely. “The coordination was much better than what appeared in the media.”

A “tremendous help” help was the national disaster recovery framework that had been put in place in the last administration. It wasn’t perfect, she said, but it was a better than the plans pre-Katrina.

Within days of the hurricane, assessment started in government at the highest levels, with the president and vice president visiting the island and starting principals’ meetings. Patenaude was involved at every level of it. Not always as a decision maker, she said, but as a contributor.

When she finally arrived on the island, she took several helicopter tours, and described the devastation as “unbelievable” – particularly in the communities where most of the housing was considered informal. Some of the subsidized housing stock fared well, because it was built out of concrete block.

“I don’t think it’s well known that perhaps more than half of all housing on the island is informal,” she said, referring to houses built on land whose ownership was unclear. “Or it was built on land that they own, but there’s no record of it, it was inherited … so that really complicated things.”

Stevens referred to the tours he has done of housing in Puerto Rico. “These are undeeded properties without any records at all,” he said of the informal housing that was clearly not built to withstand hurricane force winds. “Then your challenge is, how do you know where real harm has occurred? Because there’s no records of the property, perhaps even existing. And how do you respond to that?”

The response has been ongoing. Much of it is only now entering the implementation phase – 17 months later.

Patenaude pointed to the work being done by Governor Ricardo Rosselló and his “top-notch cabinet,” particularly Fernando Gil Enseñat, the head of Vivienda, the housing department charged with carrying out the HUD-approved programs.

“They have the talent on the island. They have the housing experts. As you know, they have two law schools in Puerto Rico,” Patenaude said, adding how helpful it was to have so many locals with a legal background. “The title, the ownership issue is huge.”

Compounding the recovery’s challenges was the lack of a working electric and water system.

“It was certainly not a well-designed system to start with, the way that they were moving power on the island,” she said. “I know that’s something that the governor thinks about all the time, and is working on – how they can create sustainable, cost-efficient power for the residents of Puerto Rico.”

On her aerial tours, she learned that many of the power poles had been installed with no anchors or only one anchor, when they needed four anchors.

“It was definitely a natural disaster, but it was somewhat of a manmade disaster when it came to the electric and water,” Patenaude said.

“It was a very vulnerable system to start with. And that’s why it did not spare anybody. When that power system went down, it went down.”

The island is making progress on its rebuilding implementation. “It’s so unbelievable to see the private sector and their commitment. And the competitiveness was put aside for the good of rebuilding,” Patenaude said. “I don’t think I’ve ever seen a stronger desire for home ownership than what you have from the people in Puerto Rico.”

Stevens and Patenaude said they are recommending to mortgage banking firms to bring their corporate events, like sales conferences and “President’s Clubs” to the Island to help bring outside funds to Puerto Rico. “Now that rebuilding has gotten more and more advanced, that the hotel hotels are getting up and operational, there’s greater opportunity to do so,” Stevens said, adding that he is happy to advise and help connect companies with his contacts in Puerto Rico.

 

Patenaude – 36 years as a HUD Houser

Patenaude first worked at HUD as an intern when she was a 21-year-old college senior. It was the early ‘80s, and there were 17,700 employees and a $23 billion budget. When she returned to HUD in 2017, the workforce had been reduced to around 7,000. She says what has happened at HUD in that 36-year period is somewhat shocking.

“I worry about the future of the department. How will the department continue to operate? And I know this administration is looking for efficiency,” she said.

“What I hope to be able to do is to share concerns that I have had about the department workforce dwindling,” she said. And the workload hasn’t changed. Some programs have disappeared, but new ones were created.

She also says she hopes for more coordination and support among industry groups and government agencies – and not just in times of emergencies.

“Policy making is messy,” she said. “The public doesn’t see all the layers that are behind the scenes. So I really hope that future policy makers that come in, help to streamline that.”

That will come from cooperation between agencies.

“During the bad times, during the economic and the financial crisis, HUD was everything. And then, when during the good times, people begin to not see such an important role for the department … but it is such a necessary, counter-cyclical role that HUD plays. I don’t believe that there is any way that HUD can continue to operate and be supportive during a downturn if the department doesn’t get more resources to be able to run the operations there.”

Addressing Stevens’s concerns about the number of HUD workers nearing retirement age, Patenaude said there needs to be more “encouragement of the new generations of housers coming in.”

“Working at the federal government level in the housing industry can actually be a very rewarding career, as we see so many of the top talent retiring at the department,” she said. “They need to bring in a new cadre of folks that are committed to promoting the mission of HUD and implementing the programs. So I’m hopeful that I’ll be able to continue to talk about HUD in a positive way – I have for over three decades – but also share my concerns.”