Broadly, the purpose of the Rental Assistance Demonstration (or RAD) is to provide a set of tools to address the unmet capital needs of deeply affordable, federally assisted rental housing properties in order to maintain both the viability of the properties and their long-term affordability.
From an owner or developer perspective, the four most important features are: Essentially, a long-term project-based section 8 contract, known as a Housing Assistance Payments (HAP) contract, is something that an owner or developer may "take to the bank" as evidence of the ability to repay borrowed funds.
In addition to assuring the borrower's ability to repay, the HAP makes the properties attractive to investors in the federal Low-Income Housing Tax Credit (LIHTC) program, through which equity capital investment is made available.
Thus a HAP contract enables an owner to serve low-income families, without compromising a property's financial viability.
The level of funding made available to PHAs from any one year to the next fluctuates based on the amount appropriated by Congress.
A report procured by HUD and published in June 2011 estimated that unmet capital needs across the public housing portfolio totaled nearly $26 billion.
In some respects, the terms of the ACC contract change as frequently as new laws are enacted and/or new regulations are promulgated.
contracts (except for those intended to provide single-room occupancy (SRO) housing for homeless individuals) was repealed in 1990.
Even though the program operates through a HAP contract, HUD practices and the renewal terms dictated by Congress disfavor private capital investment in Mod.
Conversion to the project-based section 8 platform under RAD makes it possible for owners of Rent Supp./RAP–assisted properties to move to a renewable form of contract, receive fresh capital investment in their properties, and retain deeply affordable rents for the income-eligible tenants residing in them.
Once a property has converted assistance under RAD, it is subject to the annual adjustment protocol that applies to the PBRA or PBV program.
Specifically, properties converted to PBRA are eligible for an annual operating cost adjustment, each year on the anniversary of the HAP contract, subject to the availability of appropriations.
For all intents and purposes, current tenants of properties going through RAD conversion become "new admissions" to the PBRA or PBV program as soon as the funding converts.
Continued Family Self-Sufficiency (FSS) and Resident Opportunities and Self Sufficiency Service Coordinators (ROSS-SC) program participation.
The earned income disregard (EID) is a feature of several HUD programs that is intended to encourage work and continued employment by disregarding, for a period of time, any increase in earned income that would, in the absence of the EID, increase a tenant's rental payment.
Jobs Plus is a pilot program that provides grant funding and targeted flexibilities to PHAs so that they may implement strategies to help public housing residents increase their employment and earnings.
In some cases, a conversion of public housing to PBRA or PBV assistance may result in a situation where the tenant's rental payment[34] exceeds the unit rent.
Since a key purpose of RAD is to leverage private capital investment, the removal of a unit from the HAP contract would be counterproductive.
The Secretary is also required to assure that residents of public housing properties proposed for conversion to PBRA or PBV assistance under RAD have an opportunity to comment.
The language authorizing RAD gives the Secretary the ability to waive or specify alternative requirements for any provision of the PBV statute,[36] as well as "any provision that governs the use of assistance from which a property is converted under the demonstration or funds made available for [the public housing and PBRA programs]".
Section 1.5 of the implementation notice[38] lists the waivers and alternative requirements that have been adopted pursuant to this authority.
Transfer of ownership to a for-profit entity is permitted only to facilitate access to Low Income Housing Tax Credits, and then only if the PHA retains an interest in the property.
[39] Finally, HUD is required under the language authorizing RAD to "assess and publish findings regarding the impact of the conversion [of public housing] on: A September 30, 2014, progress report on RAD[41] summarized program results through August 2014 and described the timing and content of the larger independent evaluation required by Congress.
"[43] The Evaluation of HUD's Rental Assistance Demonstration (RAD) — Interim Report[44] is an independent assessment of the program's performance from its inception through the autumn of 2015.
Several PHAs submitted multiple applications, seeking to convert as much of their inventory as possible to the section 8 platform.
For example, 18 percent of projects that converted did so to begin to establish a capital reserve for future repairs, made possible by moving to the section 8 funding platform.
In the meantime, programs that provided subsidy to private entities to develop and operate deeply affordable rental housing had been enacted.
By 1980, Raymond J. Struyk, of the Urban Institute, published a book suggesting that the public housing funding system be changed to "the type of formula used to provide subsidy payments in the Section 8 program.
[50] On October 7, 2015, U.S. Congresswoman Maxine Waters (D–CA) raised a number of concerns about the program and asked for a Congressional review.
The figures below come from the January 2018 issue of RAD Talk,[51] which is published by HUD: During 2017, HUD published improved relocation guidance and took additional measures to ensure that construction work is completed as required, residents are returned to the properties, and owners comply with federally mandated hiring requirements.