HUD has begun circulating to Capitol Hill offices proposed legislative language for its Rental Assistance Demonstration (RAD). The RAD proposal, a slimmed down iteration of HUD’s 2010 Transforming Rental Assistance idea to convert certain HUD subsidies in order to attract private financing, was outlined in HUD’s FY12 budget request to Congress (see Memo, 2/18).
An August 3 draft of the proposal describes RAD as a way to “demonstrate potential for preserving and improving low income housing through conversion of assistance for public housing and moderate rehabilitation properties to long-term rental assistance” under project-based Section 8 contracts.
The RAD language would give the HUD Secretary the authority to select properties to carry out the demonstration, which must include properties of various sizes in a broad range of locations and housing markets. Of the total number of assisted units in all properties that participate in the demonstration, at least 90% must test options that allow residents to move with Housing Choice Vouchers while the project-based assistance remains with the unit.
The Secretary must also, according to HUD’s draft, provide an opportunity for public comment on draft eligibility and selection criteria and procedures that will apply to the selection of properties in the demonstration, including “reasonable” requirements for consultation with residents of properties proposed to be a part of the demonstration and with the Resident Advisory Boards of public housing agencies responsible for such properties.
For any property converted under the RAD proposal, the Secretary must require ownership or control of assisted units by a public or nonprofit entity, except as determined by the Secretary to be necessary due to foreclosure, bankruptcy, or termination or transfer of the property’s rental assistance due to material violations or default. In any of these cases, the Secretary must provide priority for ownership or control to a capable public entity, then a capable nonprofit entity, and, if such entities are not available, to a capable “other” entity.
For any converted properties, the Secretary must: maintain rental assistance to the property; require long-term renewable use and affordability restrictions for assisted units; and must offer, and the owner must accept, a renewal of each expiring contract of rental assistance, subject to availability of funds.
The Secretary is also required to ensure that applicants for, and tenants of, public housing units converted to new project-based contracts have procedural rights that are equivalent to rights currently provided under Section 6 of the U.S. Housing Act.
In Section 6 of this act, public housing residents are provided certain rights, including those related to informal hearings for applicants denied admission, grievance procedures (including hearings and access to documents), and 12-month leases that must be automatically renewed and have certain features including adequate written notice of termination.
The proposal would allow ownership to be transferred to a for-profit entity “to facilitate the use of tax credits only if the public housing agency preserved its interest in the property in a manner approved by the Secretary.”
The RAD proposal would not allow any rescreening of public housing residents in units converting to new project-based Section 8 contracts.
In the proposal, the HUD Secretary must ensure that assisted residents of all properties with converted assistance have the right to participate in a legitimate tenant organization if one is formed or exists that represents tenants at the property. This organization must be recognized by the owner of the property.
The proposal would allow the HUD Secretary to waive any provision of current project-based voucher rules, except not in any manner that would adversely affect requirements related to fair housing, nondiscrimination, labor standards, and the environment.
The RAD proposal would require an evaluation of the demonstration by the Secretary.
The RAD proposal does not limit the number of units that could be converted under the demonstration, the time frame during which the conversions would have to be completed or any deadlines or time line for the evaluation.
The RAD proposal would authorize “such sums” as may be necessary to carry out the demonstration, including for supplemental costs for the first year of assistance, evaluation, technical assistance to public housing agencies and legitimate tenant organizations and for “other appropriate purposes.” HUD’s FY12 budget request seeks $200 million for RAD.
The proposal also includes language allowing rent supplement and rental assistance program assistance to be converted to project-based Section 8 contracts under the Multifamily Assisted Housing Reform and Affordability Act of 1997 (MAHRRA).
View HUD’s RAD proposal, dated 8/3/11, at http://nlihc.org/doc/RAD_Proposal_8-3-11.pdf
View HUD’s 8/4/11 chart explaining the RAD proposal at http://nlihc.org/doc/RAD_Proposal_Chart_8-4-11.pdf