The Rental Assistance Demonstration was created in order to give public housing authorities, such as CMHA, a powerful tool to preserve and improve public housing properties and address the $26 billion dollar nationwide backlog of deferred maintenance. 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 Project Based Rental Assistance Program so that providers may leverage the private capital markets to make capital improvements.
In March 2015, HUD notified CMHA that it approved CMHA's applications to participate in the RAD Program. Under the RAD Program, CMHA has the opportunity to convert more than 800 Public Housing units to Project Based Rental Assistance (PBRA).
CMHA carefully chose which properties to convert. One of the buildings was constructed in 1900. Another was constructed in 1930. Because of their age, most of the properties selected have substantial capital needs and will undergo substantial rehabilitation. By converting to PBRAs, CMHA will have access to a more a stable funding platform. CMHA will also be able to access alternative funding sources such as Low Income Housing Tax Credits. This will enable CMHA to perform the substantial rehabilitation which will lead to long-term preservation of our community’s affordable housing units.
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.