More than one million households or just over 2.1 million people live in housing units owned and operated by our nation's more than 3,000 public housing authorities. Because much of their funding was appropriated annually by the Congress, banks and others were reluctant to provide capital to authorities to maintain and upgrade their properties.
Who could say, after all, whether what's appropriated one year would be more or less or the same the next year or the year after that? Unpredictability leads to uncertainty and that gives investors and lenders jitters enough to keep their capital in their wallets. The result? Over the years, the nation's housing authorities have amassed a backlog of more than $40 billion in unmet capital needs.
In 2011 that began to change. HUD proposed, and the Congress authorized the Rental Assistance Demonstration – RAD, for short - initiative which allowed authorities to convert these units to Project-Based Section 8 rental assistance or Project-based Vouchers with pre-defined funding streams of up to 20 years. Now that's the kind of certainty investors like. Thanks to RAD, doors once mostly closed suddenly opened.
That's certainly the finding of an evaluation (www.huduser.gov/portal/publications/RAD-Evaluation-Final-Report.html) recently published by Econometrica Inc. in partnership with the Urban Institute of looked at the effects of RAD in its first seven years, examining whether RAD helped authorities preserve and improve public housing while stabilizing the financial footing of properties. The report also looked at RAD's impact on tenants and public housing authorities.
The results were impressive. "A total of 956 public housing projects with 103,268 units of public housing converted," the evaluation noted. "These projects raised a total of $12.6 billion of capital through a variety of sources, an average of $121,747 per unit." That's an average of $121,747 of available capital for each unit converted to RAD.
Closer to home, through October, 2019 RAD Resource (www.radresource.net/pha_data.cfm) reported that housing authorities in Salem, Lane County, Portland and Multnomah County, Oregon, Everett, Grays Harbor County, Yakima, Vancouver and Tacoma, Washington and the Idaho Housing and Finance Association had converted almost 3,100 to the RAD program. That's generated $192.8 million in construction investments and created some 3,700 direct and indirect jobs. Another 1,241 units are in the "pipeline" to be converted.
"RAD is working," said HUD Secretary Ben Carson in releasing the evaluation. "Our aging public housing stock is at extreme risk of being lost and the capital needs of these properties are beyond what we can hope to get from Congress. RAD provides us the solution to preserve this critically needed housing so it remains permanently affordable for future generations."
It's working too for residents affected by the conversions. "A survey of 298 residents at 18 RAD-converting properties," the evaluation said, "asked about their satisfaction with their unit and development, more than 80 percent of tenants indicated they were "very satisfied" or "somewhat satisfied. In terms of property maintenance. maintenance, 34 percent of residents indicated it was "better than before," 54 percent said it was "about the same," and only nine percent said it was "worse than before."
RAD's opened the doors to outside, private capital. Repairs and upgrades of the nation's affordable stock are being made. For the first time in a very long time, the backlog of unmet needs is starting to shrink, not continuing to grow. And residents' homes are being improved and their lives improved.
These days, much is made of public-private partnerships and the role they can play in addressing the challenges we face. Like his predecessors, Secretary Carson has frequently expressed his concern about and commitment to preservation of the nation's public housing stock. Thanks to RAD housing authorities have access to new capital, properties are on better financial footing, housing units are being upgraded and preserved as affordable housing for current and future generations.
Like the Secretary says, "it's working."
|Content Archived: February 1, 2021|