complicated legal process that could send him back to the homeland he need five years ago. tornado. >> that is all of our time with this news hour. inside story is next on al jazeera america. >> president obama has a new job for his housing secretary so he's tapping san antonio mayor for secretary of housing and urban development. what will be in his inbox when he comes to washington? that's the inside story. you you >> hello, i'm ray suarez.

charles dickens began his tale of two cities with these now familiar phrases. it was the best of times. it was the worst of times. it was the age of wisdom. it was the age of foolishness. in the united states widespread foolishness in the housing market plunged banks, economies and millions of american families into the worst of times. some cities that never had a bubble never had to watch it burst while go-go markets like las vegas and phoenix saw crisis and catastrophic loss. every week statistics pour out of banks and governments that show a housing market that limps in some places and runs ahead in others. with cities on the mend they will now be a change at the top of the federal department assigned to help them prosper, housing and urban development. house secretary sean donovan who came in 2009 is set to head to the office of management and budget. and the mayor of america's

seventh largest citywidely talked up as a democratic star has been invited to washington to become the next secretary. san antonio mayor julian castro is the president's choice. >> he has been focused on revitalizing one of our most wonderful cities, attracting hundreds of millions of dollars of investment. he's built relationships with mayors all across the country. he's become a leader in housing and economic development. >> reporter: over his three terms as mayor he focused heavily on urban revitalization and housing in san antonio. >> after five years as mayor of my hometown, i know this much. we are in a century of cities. american cities are growing again and housing is at the top of the agenda. i look forward to being part of a department that will help

insure that millions of americans all across the country have a chance to get good, safe, affordable housing. >> reporter: castro was catapulted into the national spotlight into 2012 when he became the first hispanic to give a keynote speech at the democratic national convention. his appointment coincides with the announcement but not great but improved signs of the housing economy. the spring thau brings numbers of strengthen after years of recession. sales of new single family homes in april were reported as an seasonally adjusted annual rate of 433,000 or 6.4% higher than march. but that's 4.3% than last april's rate. as for existing home sales according to the mortgage bangers association the total sale of existing homes increased by 1.3% in april. however, this year's numbers

were lower than april of last year by 6.8%. foreclosures and short sales accounted for 15% of april's sales. an improvement from last year by some 18%. economists say an uncommonly cold winter and a low amount of sellers hurt this april's numbers. but sales are expected to rise for the remainder of 2014 as the economy continues to recover and job figures strengthen. >> what's waiting for the next secretary of housing and urban development? are american cities in better shape than we were when the wheels came off the housing market. and what's the diagnosis that emerges from the stream of stats on housing? is the market back? all that this time on inside story. joining us for that conversation in the inside story studio,

james brooks director of city solutions for the national league of cities and director of financial regulation studies for the cato institute. james brooks. give us a quick report card. airplane's numbers seem better when looking at just at housing. but are they worst than they used to be? it's hard to know what to conclude from all of it? >> i think that's a fair assessment. month over month numbers are hard to deal with. i think the mourn thing to take away is we've seen some improv improvement in april. you've seen a little bit of softening in the year over year numbers in existing home sales. prices have moderated from some of the highs of last year. i would argue that it's hard to exactly predict but i think what you see is perhaps a sustainable level of growth. not too high, not too slow. that's my assessment. >> should we even be comparing 2014 to 2013

since 2013 was a weird year when people were buying houses at rock bottom prices in some marketplaces, going in and buying four and five of them at a time for cash. >> and it's worse on the mortgage side. the re-fi year, it was burned out so lenders have begun to ease the lending standards when they are not seeing the re-fi. i'm skeptical that we'll see this take off. it's been in the right direction. it's been slow, weak, we're still on the construction side very much down. not even half where we were. but it's saying we don't want to go back to 2006, 2007. do you want to have modern growth. the importance of just the construction side is the job side. we're still down almost 2 million jobs in the construction secretary. we can buy and sell existing homes but you got to get the new

construction going. it's been relatively weak even before it's been up. >> before things all went to hell we were expanding the number of units faster than the population was expanding. faster than the number of households were expanding. some of this slowness really just absorbing what was already out there. >> i think that's partially true. i think to pick up on mark's point there is a difference between the single family and multi family. the multi family construction has been much better over the last year and a half, really, so i think what you're seeing is a different mix of housing that's going to be relevant to the different mix of housing occupiers. i think the sense that the final family dwelling, the multi family dwelling is going to serve the needs of a broader set of occupants. we need a different kind of housing mix for the different places that people are in their lives. young families. young singles. seniors. families with children.

that's where we ought to be focusing on the kinds of mix of housing. >> keep in mind we don't have a national market. we have a local market. phoenix is back. their building what they need to mr. but i would say someone like francisco, they're not building enough housing in francisco. it's a caveat that the national numbers show a lot of variance place to place. >> we want to bring in another guest from chicago, john norquist, president of the for urbanism. john norquist, we were talking about the relative health of the housing market. as you look across the country through your affiliates and members, and what you hear, the intelligence that's coming at chicago throughout the country, how do things sound to you? >> multi family housing has been doing really well. there was this obsessive myth that some how people are better off if they own a house.

that's true in some cases. it's a good investment. but under clinton, under bush, you had the government having an official policy of increasing homeownership, and that didn't work out very well for a lot of people particularly when the prices collapsed. so the younger generations, i think, they really don't want to buy a house, necessarily. a lot of them would rather rent. they would rather living in an apartment. they would rather live in an urban walkable place that is more interesting. they don't want to drive everywhere. the housing market is changing. the thing i'm concerned about is the federal government has housing programs that still encourage separate zoning that make it hard to build the kind of urban forum that a lot of young people want. >> but do we as an economy get addicted to high rates of housing construction? mark was just mentioning a moment ago how much depressed

construction employment still is this many years after the housing bust. the finance departments, the guys who wrote mortgage papers. those jobs went into the toilet for a long time, and it showed, it exposed just how much employment was depend on a row robust housing sector. can we do without it? >> it's good to have good construction sector. construction jobs, good jobs. a lot of them are skilled jobs. but it's not good to have more than the economy can really bear. you know, forcing one part of the economy to be bigger at the expense of the rest of the economy, that's what we've done with healthcare. we have the most expensive healthcare system in the world, that was before what the congress and obama administration did. you know, 18% of the economy shouldn't be going into healthcare when the rest of the advance industrial world is at

9% or 10%. in the same thing with using. we shouldn't just build it up to be bigger and bigger part of the economy, then it starts to eat up the rest of the economy. >> mark, you wanted to jump in? >> i agree with that. that's certainly part of this, the job market is going to be construction workers. the question facing society, do we want to keep construction workers on the side line until we think construction will come back. that's what we've done over the past couple of years. do we want to help this carpenter become a nurse rather than an unskilled laborer. we need to shift back where the jobs are going to be. the job market has been weak. it's partly weak because of the knock-off effects. some 40% of job loss is directly related whether it's real estate agency, mortgage, finances, construction. are we going to wait for construction to come back?

>> this reminds me how obsessed we in the united states are with the detached owner occupied single family home. >> sure, the majority, and even the rental properties, the majority of them are single family, detached dwellings. >> with the decreased me troll polmetropolitanization, should e be thinking what we build, how we build, or changing what's already been built? >> you've hit a couple of points. one notion is significant that we try to retrofit some of the things that we have with better thinking, better planning, better urban design. that's very much what john norquist and his colleagues are working on. if you look at the realtor survey and others. there is a dichotomy of what people want. people who respond to the

surveys, they talk about they want privacy, large square footage. they want access to amenities. they want proximity to jobs. in many cases you can't have those things in a denser situation. you can have proximity to jobs and mass transit, but if you don't have a 5,000-square-foot house with an acre of yard you might not have the privacy you want. i would argue a different measure of privacy might be appropriate. i live in washington in a very dense area and i think i have lots of privacy. >> we're going to take a short break. when we come back we'll talk about the health of cities apart from just the housing market, and talk about what's in julian castro's in-box in and whe if as confirmed as secretary of urban housing development.

>> welcome back to inside story. i'm ray suarez. on this edition we're talking about the housing sector. american cities and the nomination of a new housing and development secretary. san antonio mayor and rising democratic start julian castro. when you look at the department of housing urban development often called hud. are we paying too much attention

to the "h" and not the u-d part. >> i'm pleased with julian castro chose. chosen. i think its great to have a mayor of a large city. the last mayor we had as secretary was cisneros, and he did a great job. there is an image that cities are being helped a lot by hud. actually, on average big cities in america get 3% of their money from the federal government total. no big city except washington, d.c. gets more than 10% of their budget from the federal government, and hud really maybe is trying to do too many things. and in housing it has not necessarily been favorable to cities. we have all these requirements that you can't have mixed use buildings. they're considered risky, and

the fha, fannie mae, freddie mac, the programs that are financing most of the multi housing in america has restrictions. for instance, one that says you can't have more than 10% of the building's floor space be retail. that means you need to have a 10 story building to have a mixed use building. that wipes out most of main street america. so those kinds of anti-urban rules i hope julian castro will take a look at those rules. the current secretary shaun donovan did raise the rule on fha condo financing from 25% non-residential allowed it to go up to 35 in terms of value. that was a step forward. i think they realize it's a problem. but there are a whole punch of stuff like that in hud. hud really isn't a big source of

largess for cities. i think cities spend way too much time to lobby the federal to no end. there really isn't much money coming from the federal money to cities. the cities didn't cause the federal deficit. >> let me talk to james brooks. i bet some of your members would squawk if hud went away with its 3%. >> well, of course things like the community development obviously do some of the things that john points out. but also are far more flexible, and really the most flexible kind of program for cities direct formula based given cities of a certain size to do things based on their priorities. i don't argue with some of the requirements, and of course the numbers have not nearly been sufficient to the task, and have been going down over time. cities leveraged that money two to three to five to ten times.

it's well spent dollars on local priorities, and it's the kind of program that really cities and the federal government ought to be proud of in terms of partnership and the creativity going on in cities. >> do the restrictions that john norquist talk about make the strings that are attached sometimes a little too onerous? >> i agree with that sometimes. some of the strings are appropriate. you're receiving federal dollars and there should be oversight. some of those strings are ridiculous and some are costly. i do want to emphasize, and i think john touched on this, i think we have seen a trend to see the funding at the federal level in terms of direct grants has declined. to me i think we've seen that accompanied with a number of mayors really taking the forefront. so i think it's a positive thing that today the really urban

renaissance is being led by mayors. that's who should lead it. and john touched upon that far too many in the past in my opinion spent their time lobbying in washington when really what they need to do is lobby their community. where my concern going back to lots of funding is the tax dollars come from somewhere. i would rather have the mayors do the tough job of explaining to their own constituents why they should raise their taxes and pay for those amenities rather than come to washington for the money. >> mayor castro has done some of that with the 20/2 20/20 visionh enormous community-widen gaugement, figuring out the community they want, the whys and means to do that. they do have experience pulling those together. you're right, leadership at the local level is essential. partnership with the feds would be appreciated. >> we're going to take another short break. when we come back we'll talk

about hud and it's future with its new secretary, and if it's going to remain part of the cabinet, what they're going to do. this is "inside story."

>> welcome back to inside story. i'm ray suarez. president obama nominated 39-year-old san antonio mayor julian castro as head of housing and urban development. housing numbers that show promise for a rebounding economy. with us, james brooks director of city solutions. from chicago, john norquist, president of the congress for the new urbanism, mayor of milwaukee for 15 years. and mark calabero, mark, if at john norquist suggests, hud is not doing that much in distributing federal largesse. what is the best use of that

department going forward? >> so i would prefer to see--and i might disagree with how much they're spending but i would rather focus on spending, and we forget to talk about those who don't have homes. the homelessness, had you had does as well on the reno side. if i would to pick where i would put the marginal dollar, the homeless programs, i would put it in the homeless programs. >> if we're going to continue to have hud going forward, what is the best use of it. >> hud got in an at thi partner,

and looked at policies and saw how it effected you are bans areas. out of that came some changes and street regulations, so that they're pushing big roads automatically. also they started looking at a lot of different housing programs. and they did change one of them. i'm hoping that they change the multiple housing soon. in a recession it's a good idea to flood the money with cash it would be good if they did that, and then chink when times are good and cities can it has

mostly been managed well. all of the block grant money went to the housing demolition, why? because the contractors hung out at city hall and went to the fundraiser and made that happen. there is that cronyism. i think the federal government should have a limited role as far as local government and not try to be the leader of local government. >> focusing on a modest set effective programs. what is hud's focus moving forward. >> i think john made a good point. the thing that was wonderful was they were looking in many cases at streamlining, how do you take some good planning that would

have had to be done, combine that together, allow cities to come at the federal government and approach them with one request for a holistic and wel well-honed sustainable program that was going to serve multiple disciplines? i think this is where they're going. i think this is why the cities seem to embrace it with the competitive grants that were offered. that's a great place to go. homelessness, the recent 25 cities initiative to help target homeless veterans and eliminate veterans homelessness by 2015 as lots of cities, st. paul, phoenix, salt lake have functionally eliminated homelessness with veterans with partnerships cities, not for profits, these are good examples. >> to take us out, john norquist, just recently in the papers it appears that now suburbs are growing roughly at

the same rate as cities. is everybody where they want to be, and does that provide an opportunity to sort of make life better wherever people are? >> well, it's really a good time for cities. i'm really happy, like my old hometown of milwaukee is actually growing instead of shrinking. that's a good thing. and people don't have the stigmatized image of cities. i wanted to make one point. if you look at canada. they have no national highway program, and no national transit program. they have nothing equivalent to the interstate, and some how the highways connect between the province there is, and they have no real housing programs, either. the cities have really good transit. the housing some how in canada gets done. the canadians have national health insurance, which i think is fantastic, but they don't try to run the cities.

they don't try to fund local infrastructure, and you actually get better outcome. i'm start to go make the argument, i respect people who don't agree with me, but i'm start to go make the argument that cities are better off with less of a federal role. >> that's a provocative way to end the programs, but it's a way to start a new one. canada has much higher taxes and much more provincial premieres. in washington, i'm ray suarez.

>> this is an area where our government discriminates against its own citizens leading trial lawyer david boies is fighting to bring marriage equality to every state. a battle he says is akin to the black civil rights movement. >> in the '60s, you had businesses saying we don't want to serve fragr fran americans. >> boies along with ted olson took on proposition 8 ban on same-sex marriage.