MEET SHAUN DONOVAN: HPD’S OUTSIDER COMMISH

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In Shaun Donovan’s photo, now posted on the city’s Department of Housing Preservation and Development web site, the soon-to-be commissioner stares defiantly past the camera, chin up, mouth set in a slight frown. It’s as if he knows what’s coming.

Appointed March 4 and scheduled to take office March 29, Donovan is inheriting an agency under enormous pressure. Mayor Bloomberg has made housing production and preservation among his primary goals. But HPD is faced with a number of impediments to realizing the mayor’s plans, including a stringent new lead-paint bill, the loss of thousands of units of state-subsidized housing, burgeoning homelessness, and a federal government threatening ever-deeper cuts.

Given the stakes, some say it’s not surprising that the mayor bypassed popular favorite John Warren, who joined HPD in 1988 and served as first deputy under former commissioner Jerilyn Perine, in favor of a hotshot outsider with a background in federal housing and private finance.

Fresh from Harvard, with Masters degrees in both public administration and architecture, Donovan cut his teeth in New York at the Community Preservation Corporation, which helps finance affordable housing. President and CEO Michael Lappin described him as a hands-on learner, as comfortable with plumbing as he is with Plato. “He’s a real sponge,” Lappin said.

Never one to stay put for long, Donovan soon moved to the U.S. Department of Housing and Urban Development, where he served as a special assistant under his former professor, William Apgar. “He was our best deal-fixer,” recalled Apgar. “Very creative at using the tools.”

As Donovan ascended in rank at HUD, he was faced with a crisis. The agency had already created a “Mark to Market” program to help lower the cost of Section 8 rental subsidies by restructuring loans. But as Section 8 contracts began to expire, owners began to opt out of the program entirely. So Donovan helped spearhead “Mark Up to Market,” which gave owners incentives to renew their contracts. In two years, HUD had cut opt-outs in half.

Even advocates generally critical of HUD have only good things to say about Donovan. “He’s an outstanding public administrator,” said Michael Kane, executive director of the National Alliance of HUD Tenants. “I’ve only dealt with a few people of that stature in my life.” In one deal in Boston, Kane said, Donovan helped save 300 affordable apartments. In another, he managed to quickly eke out two key decisions from the Office of General Counsel, “the black hole of HUD.”

Donovan’s tenure at HUD ended shortly after Clinton left office, and he moved to New York as a visiting research scholar at NYU’s Furman Center for Real Estate and Urban Policy. But Donovan, now a thirtysomething Brooklynite with a wife and two young sons, didn’t stop there.

“I said, Shaun, you know, there’s only one thing missing on your resume,” recalled Shekar Narasimhan, then a managing director at Prudential Mortgage Capital Company. “Can you take charge of a business and run it and make money?” Donovan took the bait; in less than two years at Prudential, he oversaw affordable housing loans worth roughly $1.5 billion.

Now Donovan’s skills will face unprecedented tests. For one thing, there are thousands of HUD-subsidized apartments facing foreclosure right now. HPD wants to transfer them to responsible ownership—but HUD may refuse to budge from its policy of auctioning them off. And then there’s the infamous bureaucracy. “If there’s one place that’s going to be more difficult than the federal department of housing, it’s the New York City department of housing,” said Howard Glaser, another former HUD colleague.

But Glaser is confident that Donovan can pull it off. “You meet Shaun and I remember thinking, ‘Here comes another kid.’ But you realize very quickly that he’s probably the smartest person in the room.”