Housing Groups Call on Congress to Authorize Rental Assistance Demonstration

 

September 14, 2011 -- A broad coalition of affordable housing organizations is calling on Congress to authorize the Rental Assistance Demonstration (RAD) -- a legislative proposal providing new tools to preserve affordable housing properties that are at risk due to a lack of federal funds.

RAD would test a new approach to preserving public housing properties by leveraging private investment with Section 8 subsidies to address current repair and redevelopment needs and permit future recapitalization of the properties.  According to a recent HUD study, the nation’s public housing stock has more than $26 billion of unmet capital needs. Given federal budget constraints, congressional appropriations will not be sufficient to address these needs, resulting in the loss of this scarce affordable housing resource at an accelerated pace.

While federal public housing properties are a major focus of the legislation, owners of properties assisted under the Section 8 Moderate Rehabilitation, Rent Supplement, and Rental Assistance Payment (RAP) programs, which currently lack a viable renewal option, are also targeted for preservation.

Properties participating in RAD would convert to one of two existing HUD Section 8 programs – either project-based vouchers or project-based rental assistance contracts. In each case, the property would be subject to long-term use and affordability restrictions that would survive any future disposition, foreclosure, or bankruptcy involving the property. PHAs and other owners would be required to accept future subsidy renewals and extensions of the use and affordability restrictions. RAD will also test options for providing additional housing choice to assisted families, requiring that for at least 90 percent of converted units residents must be offered the choice to move with continuing tenant-based rental assistance within a reasonable time after conversion.

HUD’s 2012 budget requested $200 million to support the conversion of properties under RAD.  HUD estimates that this level of support would generate up to $7 billion of private investment in affordable housing preservation.

Organizations supporting the RAD legislation include: the Center on Budget and Policy Priorities, the Council of Large Public Housing Authorities, Enterprise Community Partners, the National Housing and Rehabilitation Association, the Local Initiatives Support Corporation, the National Leased Housing Association,  the National Low Income Housing Coalition, the Poverty and Race Research Action Council, and Stewards of Affordable Housing for the Future.