A RADical Change for Public Housing?
Posted by Miriam Axel-Lute on November 20, 2014
Earler this month, we published an op-ed from HUD in which the authors declared the Rental Assistance Demonstration project a success, calling for a lifting of the cap on the number of units that could go through the process.
The idea behind RAD is to address the massive backlog in capital improvements in public housing by allowing PHAs to turn units into project-based Section 8 units and take on private debt to finance the improvements.
When RAD was first proposed, it was known as PETRA, and much of the affordable housing world was in an outcry over what they said was essentially a privatizing of public housing. We devoted much of an issue to it here. RAD, proposed by affordable housing champion Rep. Keith Ellison, fixed many of the specifics that advocates critiqued, building in many more safeguards against things like the possibility of public housing being lost to foreclosure. This new version seems to have muted most of the objections, even though the underlying shift in principle is still there.
Since then, RAD has proceeded with little commentary, at least the little that has come to my attention. A panel on RAD at the Bipartisan Policy Center's Housing Summit was upbeat, but did have some interesting tidbits in it:
Renee Glover, former head of the Altanta Housing Authority, and known for her championing of massive, and often controversial, HOPE VI-style redevelopments of public housing, described RAD as "trying to get public housing onto a platform the market understands." But she noted that because Congress demanded the program be revenue neutral, it only works in about 40 percent of markets. Other participants challenged this assessment, however.
In Glover's eyes, a downside of RAD is that, unlike Hope VI, it is "not seeking to break down concentrated poverty." This however, might be seen as a good thing to some people compared to HOPE VI—it involves improving the condition of public housing without reducing the number of units or necessarily displacing those who want to stay.
Patrick Costigan, one of the architects of RAD, who is now at the Community Builders, noted that so far RAD awards have leverage funding 21 to 1, as compared to Choice Neighborhoods (8:1) and Hope VI (2:1). That could have to do with its more narrow ambition, but it's also still worth taking note of.
At the panel, Hunter Cushing, a former HUD deputy assistant secretary and current vice president and senior counsel of real estate firm The Kraus Organization, said that RAD is well designed for financial stability, because project based Section 8 is a stable funding source, and it's an actual contract, rather than a formula where the local government can be expected to make up shortfalls if the federal government underfunds it.
However, as one audience member asked, will project-based Section 8 always be fully funded? It may have been more stable so far, but will it continue to be so, especially in the age of the sequester? Will it be funded well enough to accomplish RAD-style investment at more PHAs without underfunding the program for other buildings?
I'd really like to hear more from resident and housing advocates on the ground in the places where RAD projects are underway—it seems like for good or ill it has the potential to make a huge difference in the country's public housing, and we shouldn't let that slip by unnoticed.
(Photo credit: Second-Component Preservation Project, Haverhill, Mass. U.S. Department of Housing and Urban Development)
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Miriam Axel-Lute is editor of Shelterforce and associate director of the National Housing Institute. Her email is miriam at nhi dot org.