HUD launches strategy to preserve affordable housing units
Published April 1, 2013 | April 2013 issue
The U.S. Department of Housing and Urban Development (HUD) has launched a strategy for preserving tens of thousands of units of public and other HUD-assisted housing at no cost to taxpayers. The Rental Assistance Demonstration (RAD) plan is designed to address an estimated $26 billion backlog of repairs that are needed to keep the nation’s 1.2 million public housing units in safe and decent condition. The RAD plan will allow participating public housing authorities (PHAs) to convert their current assistance from HUD into long-term Section 8 contracts. The conversions will have two interrelated benefits: first, freeing the PHAs from antiquated rules that limited their ability to repair and renovate their properties; and second, positioning the PHAs to seek private financing to cover the costs of the repairs and renovation work.
For the initial phase of the RAD plan, HUD awarded 112 conversion commitments to 68 PHAs and also approved conversion requests from 11 private owners of affordable housing developments. One of the PHA awardees, Scott County Community Development Agency in Shakopee, Minn., is located in the Ninth Federal Reserve District. The initial round of RAD conversions is projected to preserve and enhance more than 13,000 units of affordable housing, generate more than $650 million in private capital, and create about 10,000 construction-related jobs.