RAD-ical Fix

[Photo: Yakima, WA housing]
Yakima, WA housing

YAKIMA - Sometimes the best way to break new ground is to break down old barriers.

Barriers like those facing the nation's 1.2 million public housing units. For decades those publicly-owned units have provided families at the lower end of the income scale with an affordable place to live, raise their families and give their kids a chance to grow up and become teachers and business people, doctors and lawyers, best-selling authors and award-winning actors, U.S. Senators and, even, a Supreme Court Justice.

Decades of wear-and-tear have taken a toll on public housing, If the units were privately-owned, of course, the owner could just go to a bank or investors for the capital needed to keep them in tip-top shape.

Those options haven't been open to public housing authorities for decades. Instead they've relied almost exclusively on capital funds annually appropriated by the Congress and awarded by HUD. Some years they've received almost as much as they need but others not nearly enough. "We're completely dependent on money HUD gives us," a Vancouver Housing Authority official told The Columbian, "and it is inadequate."

And that's being kind. In fact, a 2011 study commissioned by HUD found that the nation's public housing authorities face a $26 billion backlog in unmet capital needs. Given the nation's fiscal woes, few expect a check in the mail for that $26 billion anytime soon.

But where there's a will sometimes there's a way to fix a problem. In this case, it's suggested by the experience of the thousands of privately-owned rental complexes that receive HUD rent subsidies under Section 8 of the National Housing Act. For more than 40 years, their owners have been able to borrow from banks or seek investors to address their capital needs.

"If it works for them," HUD concluded, "why couldn't work for public housing?" Congress agreed and, in 2012, okayed HUD's proposal to establish a Rental Assistance Demonstration (RAD) pilot to convert 60,000 public housing units into Section 8 project-based units thereby giving authorities the same access to private capital private owners have enjoyed.

Thanks to RAD, lenders earn interest and investors returns while housing authorities will have the funds they need to repair, renovate or, even, replace units - up to $650 million in private capital, in fact, for the first 68 authorities selected for the RAD pilot. The units will remain the property of the public housing authorities and covered by a long-term agreement that keeps them affordable to tenants eligible for public housing for 20 or 30 or 40 years.

Three of the 68 housing authorities selected for the RAD pilot are in the Northwest - Salem in Oregon and Yakima and Vancouver in Washington. They're pleased to be among the first. "This is a shot in the arm for affordable housing," said U.S. Senator Patty Murray who chairs the Senate's appropriations subcommittee on housing. Wasting no time, the Yakima authority is already seeking equity investments.

"It isn't that we haven't maintained them well with the funds we've had. We've done pretty good on that," Lowel Krueger, its executive director, told KNDO-TV. "But, after a while things, no matter how well you maintain them just wear out. And that's what we're trying to take care of." Or as an authority resident told KIMA-TV, "they're gonna have more funding and that means they'll have more money to fix everything up."


Content Archived: February 12, 2015