Preserving, Enhancing Public & Affordable Housing Stock
Last week, Housing and Urban Development (HUD) Secretary Shaun Donovan formally launched the Rental Assistance Demonstration (RAD) with events across the country.
RAD offers a long-term, cost effective solution to preserve and enhance the country’s public and affordable housing stock—including leveraging public and private funding to make much-needed improvements—by allowing public housing authorities (PHAs) and owners of certain at-risk, federally-assisted properties to convert their current assistance to long-term project-based Section 8 contracts.
In a tightened budget environment, PHAs and owners have to make tough choices between repairing roofs and replacing plumbing—or worse, demolishing units altogether—because there simply isn’t enough money to go around. At a time when the public housing capital need backlog stands at $25.6 billion and 10,000 to 15,000 units of affordable housing continue to be lost every year, HUD has found another way to maintain and improve our affordable housing stock other than with direct federal funding.
For over 40 years, Section 8 contracts have enabled some private owners of assisted housing to raise millions of dollars of necessary debt and equity investments for the maintenance and rehabilitation of their properties. Under RAD, more public and affordable housing owners will now be able to utilize Section 8 contracts in the same way—and potentially combine them with other affordable housing resources, like Low Income Housing Tax Credits (LIHTC).
In the initial 30-day RAD application window for public housing properties, awardees have proposed to generate over $650 million in private debt and equity investments to reduce the capital needs backlog in their properties, preserve over 12,000 public housing units, and support 9,000 local jobs in communities nationwide—all without any additional government funding.
Click here for more information on the initial award characteristics.