The House Financial Services Subcommittee on Insurance, Housing, and Community Opportunity held a November 3 hearing on HUD’s Rental Assistance Demonstration (RAD) proposal, which would allow public housing to convert subsidy streams into project-based Section 8 contracts or project-based vouchers. NLIHC Board Member Charles Elsesser of the Community Justice Project of Florida Legal Services testified on behalf of NLIHC.
Subcommittee Chair Judy Biggert (R-IL) opened the hearing by expressing her support for what she termed a creative proposal. “Given very scarce federal resources, it is important that we maximize our federal spending,” Chair Biggert said. Subcommittee Ranking Member Luis Gutierrez (D-IL) noted that this Congress has responded to high unemployment and homelessness by cutting programs. In RAD, he said, there is a potential solution, but RAD does not come without risk. Mr. Gutierrez said he needs to be assured of resident protections, of long-term use and affordability restrictions, and of public ownership.
Representative Keith Ellison (D-MN), who introduced a comprehensive public housing conversion proposal during the last session of Congress, participated in the hearing. Mr. Ellison is a member of the full House Committee on Financial Services but he does not sit on the housing subcommittee. “This is the time for creative solutions to revitalize public housing,” Mr. Ellison said. He praised HUD Secretary Shaun Donovan, HUD Assistant Secretary for Public and Indian Housing Sandra Henriquez, and the Obama Administration, saying that RAD is a thoughtful approach to public housing revitalization and that it shares the same goals as his Rental Housing Revitalization Act from 2010.
Ms. Henriquez testified at the hearing, calling public housing essential to meeting the needs of the nation’s lowest income households and cited significant investment by taxpayers in the last 75 years in the development and maintenance of public housing. After years of underfunding and a capital needs backlog now between $22 and $26 billion, Ms. Henriquez said “we are at a breaking point.” She offered RAD as a way to test a potential solution for public housing.
HUD’s RAD proposal would also allow for the conversion upon contract expiration of 23,800 Rent Supplement and Rental Assistance Payment units into Section 8 project-based contracts. HUD’s proposal would also allow for the conversion of 25,000 Moderate Rehabilitation program units to the Section 8 program. HUD is currently without viable ways to preserve these hard units.
“My decades of corporate and public sector experience managing housing tell me that we can build a better system that harnesses the resources and discipline of the private market without compromising the important mission of publicly supported housing. My experience also tells me that we can build a system that does not leave behind America’s poorest families isolated – with too few choices and too little opportunity to take responsibility for their own futures,” Ms. Henriquez said.
Ismael Guerrero, Executive Director of the Housing Authority of the City and County of Denver, representing the Council of Large Public Housing Authorities, reported that the Denver housing authority has unmet capital needs of nearly $90 million. He said this backlog is “jeopardizing the viability of these properties and the quality of affordable housing our residents deserve.” Mr. Guerrero, like each of the witnesses, spoke in favor of HUD’s RAD proposal.
Mr. Elsesser addressed the aging of the nation’s public housing stock. He said that PHAs today have little recourse in response to cuts besides demolition and disposition of their public housing. NLIHC supports HUD’s RAD proposal because it meets NLIHC’s requirements for a conversion plan in the areas of resident participation, resident rights and protections, mission-driven ownership, long-term use and affordability restrictions, and providing choice to residents.
Representative William Lacy Clay (D-MO) asked the panel how RAD might assist in creating jobs through the Section 3 program. Assistant Secretary Henriquez responded that Section 3 requirements would apply as public housing is revitalized under RAD.
The Senate FY12 T-HUD funding bill includes a somewhat modified version of HUD’s RAD proposal. The Senate and House are currently negotiating a final T-HUD FY12 spending bill (see related article in this issue of Memo) and a version of RAD is expected to be included in the final T-HUD bill.
Access the hearing webcast and all testimony at http://financialservices.house.gov/Calendar/EventSingle.aspx?EventID=266667