Permanently extend the Rental Assistance Demonstration (RAD) Program and eliminate the cap on RAD conversion authority

The Challenge

After decades of underinvestment, many of the country’s 1.1 million units of public housing need significant capital investment. According to HUD, the aging public housing stock has a backlog of at least $26 billion in unmet capital needs,85 and an estimated 10,000 public housing units are lost entirely each year to obsolescence and decay. Meanwhile, millions of low-income families across the country are on waiting lists to get into public housing units, including over 420,000 families in New York City alone. After a series of federal budget cuts many public housing authorities are struggling
to stay solvent. At the same time, some public housing is sited in geographic areas particularly vulnerable to flooding. Congress is unlikely to appropriate sufficient grant funding to bring all existing public housing units up to a state of good repair. Preserving public housing in cities at risk from a variety of stressors and shocks like natural hazards, and shifting to a model that better catalyzes improvement and revitalization of these units, needs to be a focus of federal housing policy.

The Opportunity

The private market has proven it can be a willing partner in renovating public housing. HUD’s Rental Assistance Demonstration (RAD) is an innovative program that allows public housing authorities to convert dilapidated projects into privately financed, government-subsidized properties, using the Section 8 program to preserve long-term affordability. By altering the source of the rental subsidy, participating authorities can attract outside sources of financing, such as the Low-Income Housing Tax Credit, to make crucial repairs. A recent evaluation of the program found that for every public dollar that goes into RAD properties, public housing authorities can leverage $9 of outside financing. Last year Congress raised the cap on the number of public housing units that local housing authorities can convert under RAD from 185,000 to 225,000 units. This cap increase is helpful, but it does not come close to meeting the number of applications received by HUD to date. In its fiscal year 2018 budget request, the Administration proposed eliminating the RAD cap and providing permanent authorization. Eliminating the cap will allow work, that would otherwise take decades to accomplish, to proceed quickly.

Action Steps

Legislative

Senate Banking and House Financial Services Committees should remove the cap on units converted through the Rental Assistance Demonstration program, and the related appropriations committees should appropriate the federal resources necessary to preserve all viable public housing units.

Executive

HUD should support city efforts to use RAD to preserve and build affordable housing, and should provide technical capacity to local public housing authorities that seek assistance using RAD authority to modernize their units.