By JACKIE CALMES
WASHINGTON - President-elect Barack Obama has picked the widely respected housing commissioner for New York City, Shaun Donovan, to be the secretary of housing in his cabinet.
Assuming that Mr. Donovan, 42, is confirmed by the Senate to head the Department of Housing and Urban Development, he would be returning to the agency where he worked in the Clinton administration as acting federal housing commissioner and, earlier, as deputy assistant secretary for multifamily housing, overseeing subsidies and properties for about two million families.
With permission this year from Mayor Michael R. Bloomberg, who hired him in March 2004, Mr. Donovan took a leave of absence to campaign for and advise Mr. Obama's presidential campaign. Mr. Obama named Mr. Donovan to the housing post on Saturday, in his weekly national radio address.
"Shaun Donovan has been one of the most effective housing commissioners in New York City's history," said Senator Charles E. Schumer, Democrat of New York, who had championed Mr. Donovan. "At this time, with the housing crisis raging, he is exactly the kind of person we need as HUD secretary."
As chief of New York's Department of Housing Preservation and Development, Mr. Donovan is in charge of the Bloomberg administration's $7.5 billion New Housing Marketplace Plan to build or preserve 165,000 units for to low- and moderate-income families, housing up to 500,000 residents, by 2013.
Prior to his hiring by Mr. Bloomberg, Mr. Donovan was a managing director at Prudential Mortgage Capital Co., in charge of its portfolio of investments in affordable housing loans, including Fannie Mae and the Federal Housing Administration debt.
He came to Prudential from New York University, where Mr. Donovan had been a visiting scholar doing research on preservation of federally assisted housing. He also has been a researcher at Harvard University's Joint Center for Housing Studies, and was a consultant to the Millennial Housing Commission, set up by Congress to recommend new ways to encourage production of affordable housing nationwide.
Before his stint at HUD in the 1990s, and after graduation from Harvard with a degree in public administration and architecture, Mr. Donovan worked for a nonprofit lender and developer for affordable properties.
Given his various roles, Mr. Donovan is well known in housing policy circles, and was a leading contender for a senior post at HUD. Some housing experts suggested that he might not get the top job, in part because Hispanic groups were pressing for a Hispanic candidate.
"Shaun is brilliant, really thoughtful and creative, and knowledgeable about a broad range of housing policies in ways that unfortunately is very unusual," said Barbara Sard, the director of housing policy at the Center on Budget and Policy Priorities, a research and advocacy group.
The housing and credit crises that began in mid-2007 have hurt the affordable housing sector like much else. Before that, Mr. Donovan was considered a national innovator in capitalizing on the strong real estate market to find financing for low-cost housing. He held to a middle ground between free-market forces who opposed government controls and liberal groups that believed only government and nonprofit groups could be counted on to provide housing for the working class.
"I would never believe that the private sector, left to its own devices, is the best possible solution," he said in 2006. "I'm in government because of the role of government in setting rules and working in partnership with the private sector. On the other hand, there's no way you could ever get to a scale that can really affect the housing problems in this country without working with the market."
Under Mr. Donovan, the Bloomberg administration has promoted "inclusionary zoning" that allows developers to build multifamily structures of more density - that is, more units for the space - in return for setting aside a portion of their projects for lower-income residents.
He helped to create a $200 million fund with contributions from the city, seven major foundations and financial institutions, to help nonprofit housing groups and small developers compete for private land sales. Working more closely with HUD than local officials have in the past, he has encouraged the department to help nonprofit groups or tenants take over HUD-assisted apartment buildings that are in foreclosure; typically, the federal government put such properties up for bids.