What is RAD?
Public housing is a key part of affordable housing programs throughout the United States. However, public housing units across the country have been underfunded by Congress for many years. As a result, necessary maintenance and repairs for public housing units have been perpetually delayed. In fact, public housing units across the country need more than $26 billion in repairs. Because of this, an average of 10,000 public housing units are lost per year, primarily due to disrepair and unsafe housing conditions.
In response to these serious needs, Congress enacted the Rental Assistance Demonstration (RAD) in 2012 to preserve and improve public housing buildings. RAD is the voluntary, permanent conversion of public housing to the Section 8 housing program. Unlike the public housing program, the Section 8 housing program allows for more funding flexibility, including the use of other funding sources like tax credits in addition to public funds, to maintain and improve existing public housing buildings. RAD also guarantees strong tenant protections that tenants had under the public housing program.
Five Things You Should Know About RAD Public Housing Conversions
- RAD allows public housing agencies to leverage public and private debt and equity in order to reinvest in the public housing stock. This is critical given the 25.6 billion dollar backlog of public housing capital improvements.
- In RAD, units move to a Section 8 platform with a long-term contract that, by law, must be renewed. This ensures that the units remain permanently affordable to low-income households.
- Residents continue to pay 30% of their income towards the rent and they maintain the same basic rights as they possess in the public housing program
- RAD maintains the public stewardship of the converted property through clear rules on ongoing ownership and use.
- The RAD program is cost-neutral and does not increase HUD’s budget. This program simply shifts units from the Public Housing program to the Section 8 program so that providers may leverage the private capital markets to make capital improvements.
HACSB’s RAD Story
Since 2011, the Housing Authority of the City of Santa Barbara (HACSB) has been working to reposition its entire HUD-assisted Public Housing portfolio (496 units spread over 33 distinct properties) to a more stable funding platform in order to meet the growing rehabilitation needs of the aging developments to promote and ensure their viability for future generations.
In July of 2013, the Authority completed its first phase of this repositioning effort by removing 180 units from the HUD-assisted Public Housing program through a disposition approved by HUD. An instrumentality of the Housing Authority, Santa Barbara Affordable Housing Group, was created to take ownership of these units and operate them on a Project Based Section 8 Housing Choice Voucher platform. For the remaining 316 units of HUD-assisted Public Housing, staff submitted a portfolio application under RAD to HUD to remove these remaining units through six different transactions.
In 2016, the Housing Authority finished the transfer of all of its former HUD-assisted Public Housing units. This portfolio transfer places all of the Authority’s heretofore HUD Public Housing units on a far more sustainable funding platform.