CLPHA To HUD: Some RAD Rule Changes Work, Others Raise Concerns

CLPHA joined law firm Reno & Cavanaugh in raising concerns in comments to HUD about some of the agency's changes to the Rental Assistance Demonstration (RAD) program contained in its Revised Notice for the program (PIH Notice 2012-32, REV-2).

CLPHA reiterated its strong support for the flexibility RAD gives PHAs to meet "a range of local, critical housing needs in a manner similar to other affordable housing developers." In addition, CLPHA welcomed some of the revisions to RAD administrative rules and practices.

Among the changes CLPHA views favorably are:

  • The collapse and consolidating of initial CHAP transactional milestones into a single Financing Plan milestone within 180 days, and modifying Financing Plan due dates to better align with Low Income Housing Tax Credit (“LIHTC”) timelines and realities.
  • Allowing Section 8 assistance to “float” to better align to other financing requirements within certain mixed-income properties.
  • Clarification of the rights and responsibilities of over-housed residents to remain or return to renovated properties, but to move to appropriately-sized units when available.

But CLPHA also expressed concerns that certain parts of HUD's proposal could prove counterproductive. For example, we are concerned that HUD, by making a priority projects with "severe" need could inadvertently incentivize some PHAs to take on inappropriate projects.

"First, by prioritizing projects with 'severe' need or that are part of larger revitalization plans, the Notice might push PHAs to seek 9% tax credits in situations where they might not be competitive, resulting in infeasible projects and churning of the RAD waiting list. Receipt of 9% LIHTCs is highly competitive and uncertain. In addition, some PHAs do not have the capacity or experience to undertake 9% LIHTC applications, bond transactions, or comprehensive revitalization plans, but have projects with modest rehabilitation needs that could be preserved through RAD."

Return to: CLPHA Report -August 6, 2015