HUD Finds Rental Assistance Demonstration Boosts Public Housing Investment
HUD, Washington, D.C., said the Rental Assistance Demonstration program it launched in 2012 to increase capital to severely distressed public housing is working.
In HUD’s RAD program, public housing units move to the Section 8 platform under a long-term contract that must be renewed in perpetuity. HUD also records an agreement to ensure the formerly public housing units remain permanently affordable to very low-income households.
The Mortgage Bankers Association has consistently supported the RAD program and advocated for appropriate funding.
HUD Secretary Ben Carson said the nation’s aging public housing stock is at risk of being lost, “and the capital needs of these properties are beyond what we can hope to get from Congress.” he said. “RAD provides us the solution to preserve this critically needed housing so it remains permanently affordable for future generations.”
Secretary Carson will speak next week at MBA’s Annual Convention & Expo. Click here for more information.
HUD evaluated the RAD program to determine whether it is achieving its goal of preserving affordable housing by improving properties’ physical condition in the short-term and improving their financial footing for the long-term. It found “significant evidence” RAD is stimulating capital investment and improving living conditions for low-income residents.
Specifically, the evaluation found:
–Increased Financial Leveraging – RAD has attracted capital to stabilize and improve public housing, the report said. From the program’s inception through October 2018, 956 public housing projects with 103,268 units of public housing converted to Project-Based Section 8 or Project-based Vouchers properties. These properties raised $12.6 billion of capital through a variety of sources, averaging $121,747 per unit.
–Improved Physical Condition – HUD sampled 17 properties to represent RAD-converted public housing projects. The RAD sample improved their physical condition as measured by a reduction in their short-term and critical capital needs.
–Stronger Financial Conditions – The study also collected financial statements from 18 RAD projects (before and after their conversions) and 46 non-RAD projects. It found the liquidity and viability of RAD projects improved after conversion while these indicators deteriorated for the non-RAD properties over the same period.