|HUD R3 No. 13-03
January 10, 2013
HUD LAUNCHES GROUNDBREAKING RENTAL ASSISTANCE DEMONSTRATION TO PRESERVE AND STRENGTHEN PUBLIC, OTHER HUD-ASSISTED HOUSING
Strategy to save 503 affordable housing units in Virginia, create jobs
WASHINGTON - To stem the loss of critically needed public and other forms of subsidized housing due to the severe backlog of capital needs, the U.S. Department of Housing and Urban Development (HUD) today officially launched its Rental Assistance Demonstration (RAD), the Obama Administration's groundbreaking strategy to preserve tens of thousands of public and HUD-assisted housing units.
In the near term, RAD is expected to preserve and enhance affordable housing in Virginia and generate private capital to address the significant backlog in capital needs faced by public housing authorities in the U.S. This additional capital will also stimulate employment in the construction trades across the country. Nationally, RAD is expected to benefit more than 13,000 units of affordable housing and generate more than $650 million in private capital.
"This innovative and cost-effective approach greatly enhances our ability to confront the decline of our public housing and older assisted housing stock," said HUD Secretary Shaun Donovan. "With the initial implementation of RAD, the Obama Administration has begun to demonstrate that public-private partnership can help preserve our nation's affordable housing and create jobs in the process."
"HUD and our local partners are working to protect critically needed affordable housing for the residents in these communities," said Jane C.W. Vincent, Regional Administrator of the mid-Atlantic region. "This is a market-based approach to helping local housing authorities tap into private capital to preserve housing for some of our most vulnerable citizens."
HUD awarded commitments to the Hopewell Redevelopment and Housing Authority and the Richmond Redevelopment and Housing Authority, allowing them to seek private financing to rehabilitate 503 units that are otherwise at risk of being lost from the affordable housing inventory.
RAD allows public housing agencies and private owners of certain at-risk, federally assisted properties to convert their current assistance to long-term Section 8 contracts. Such contracts will allow owners to leverage millions of dollars in debt and equity to better address immediate capital needs and preserve these affordable housing units. In addition, participating agencies are freed from antiquated public housing rules and restrictions that hindered their ability to best preserve and manage their housing similar to other affordable housing owners and managers.
In 2011, HUD released Capital Needs in the Public Housing Program, a study that found the nation's 1.2 million public housing units need nearly $26 billion to keep these homes in safe and decent condition for families, a figure well in excess of the roughly $2 billion Congress appropriates for capital repairs annually. Beyond the potential loss of this public housing, the Moderate Rehabilitation, Rent Supplement, and older Rental Assistance Payment (RAP) programs are at risk of being lost from the affordable housing stock.
RAD is part of the Obama Administration's comprehensive strategy to preserve public and HUD-assisted housing. In November 2011, Congress authorized HUD to implement RAD as a budget-neutral demonstration program with two components, allowing for the conversion of assistance for both public housing and HUD-assisted properties that have expiring subsidies.
HUD's mission is to create strong, sustainable, inclusive communities and quality affordable homes for all. HUD is working to strengthen the housing market to bolster the economy and protect consumers; meet the need for quality affordable rental homes: utilize housing asa platform for improving quality of life; build inclusive and sustainable communities free from discrimination; and transform the way HUD does business. More information about HUD and its programs is available on the Internet at www.hud.gov and espanol.hud.gov. You can also follow HUD on twitter @HUDnews, on facebook at www.facebook.com/HUD, or sign up for news alerts on HUD's News Listserv.