HUD’s Office of Recapitalization (Recap) posted eight fact sheets designed for public housing residents about the Rental Assistance Demonstration (RAD). An additional seven fact sheets are still in the process of being created. Recap also made public a five-minute video intended to explain RAD to residents whose public housing agency (PHA) might be considering converting their public housing development under RAD.
The newly restored fact sheets are far superior to the dense four-page document with which Recap replaced in August 2020 ten earlier fact sheets that had been available on the Recap website since 2013 (with two revisions over that period). NLIHC and the National Housing Law Project (NHLP) immediately complained to Recap when the earlier fact sheets were removed and replaced with the four-page document. Recap staff met with NLIHC and NHLP in August 2020, and in an email sent in September 2020, Recap indicated that in response to NLIHC and NHLP advocacy, it had begun updating ten fact sheets and incorporating suggestions from our organizations. Though the process took 15 months, Recap posted the eight new, revised factsheets in January 2022 and removed the flawed four-page document.
The eight fact sheets are: “RAD Overview,” “Overview of Resident Rights after RAD Conversion,” “The RAD Conversion Process,” “The Difference Between Project-Based Vouchers (PBV) and Project-Based Rental Assistance (PBRA),” “Resident Engagement and Consultation,” “Rent,” “Your Lease,” and “Resident Organizing and Funding.” The additional fact sheets, which will be made public as they are finalized, include: “RAD and Relocation,” “Resident Grievance and Termination Rights,” “Family Self-Sufficiency and Resident Opportunities and Self-Sufficiency,” “Choice Mobility,” and “RAD and the Low Income Housing Tax Credit.” (Of the two additional fact sheets envisioned, it is hoped that one will address RAD/Section 18 Disposition Blends.)
As part of the “FY12 HUD Appropriations Act,” Congress authorized the Rental Assistance Demonstration (RAD) to help preserve and improve low-income housing. RAD allows PHAs and owners of private, HUD-assisted housing to leverage Section 8 rental assistance contracts to raise private debt and equity for capital improvements. Of RAD’s two components, the first pertains to public housing, which is the subject of the new Recap fact sheets.
In general, the new fact sheets provide accessible, well-formatted, and easy-to-read overviews of most of those RAD features with which residents should be aware.
However, there are some shortcomings:
- Fact Sheet #1: RAD Overview addresses the question, “Who will own and manage the property?” (page 4). The sheet fails to prepare residents for the possibility that instead of being managed by their PHA after RAD conversion, their development might be managed by a for-profit management company (which might or not be a problem). Unless a future fact sheet addresses the question “who owns the property?” Recap should provide basic information from the statute creating RAD that requires “ownership or control” of converted properties to be held by a public or nonprofit entity. For conversion projects using the Low Income Housing Tax Credit (LIHTC) tax expenditure, anticipated Fact Sheet #13 will likely explain that a for-profit entity may own the property, but only if a PHA preserves its interest in the property (in a manner approved by Recap).
- Fact Sheet #8: Resident Organizing and Funding discusses the right to organize after a RAD conversion. The fact sheet correctly states on page 1 that the legitimate resident councils and funding to support them that residents had under 24 CFR Part 964 are maintained after RAD conversion. However, residents may be shocked and angered that after RAD conversion, Part 964 no longer applies (because Part 964 applies only to public housing, not PBVs or PBRAs). The fact sheet should inform residents of this fact, as NLIHC has often urged. The rest of the fact sheet does a good job of listing, in more specific detail than Part 964, resident organizing rights. Hence, in NLIHC’s assessment, it is better than Part 964. The language of the RAD operations Notice H-2019/PIH-2019-23 (REV 4), which provides regulations, echoes the Section 245 resident organizing regulations for which the National Alliance of HUD Tenants (NAHT) advocated and that have long applied to HUD’s PBRA program.
- Fact Sheet #3: The RAD Conversion Process discusses on page 2 what a PHA focuses on once it receives a preliminary approval (called a “CHAP”) for RAD conversion. One of the items listed is “amend its PHA Plan.” While amending the PHA Plan at this stage would be a good idea (and is essentially required by the PHA Plan regulations, which are separate from RAD), the RAD Notice does not require this. A simple amendment of the PHA Plan will not necessarily engage the Resident Advisory Board (RAB), but it should. Nonetheless, a simple PHA amendment does not trigger a broad public notice and public hearing about the proposed RAD conversion. (For more, see the next item on Fact Sheet #5.)
- Fact Sheet# 5: Resident Engagement and Consultation discusses RAB involvement and a public hearing on page 3. The fact sheet states that “HUD will not approve a RAD conversion until the conversion has been incorporated into the PHA Plan. Any changes that happen at your property because of RAD will have to be approved and included in the PHA’s Plan or an amendment.” While this is true, the PHA Plan regulations make a distinction between an “amendment” and a “Significant Amendment.” The RAD Notice clearly declares that converting public housing under RAD is a “Significant Amendment” to a PHA Plan.
A Significant Amendment to the PHA Plan requires RAD involvement, broad notice to the entire PHA community (not just the residents of the project being converted), and a public hearing. Fact Sheet #5 fails to state that RAD conversion is a “Significant Amendment” to the PHA Plan triggering full RAB involvement, public notice, and a public hearing.
Recap does not require a Significant Amendment process to begin until late in the conversion process, which could be as late as five months after Recap has issued a preliminary approval (CHAP) for RAD conversion of a specific development. The Significant Amendment process starts too late because when submitting the required RAD Financing Plan, Recap requires a PHA to have a letter from HUD’s Office of Public and Indian Housing (PIH) approving a Significant Amendment. A Financing Plan is a document submitted to HUD demonstrating that a PHA has secured all necessary private financing needed to sustain the project for the term of the PBV or PBRA contract. Financing Plans are due six months after HUD has issued a CHAP.
Consequently, RAB involvement and the PHA-wide notice, broad public outreach, and public hearing required by the PHA Plan Significant Amendment regulation will not take place until the conversion application process is too far along. Rather than engage all PHA residents and the broader community before an application for RAD conversion is submitted, the public engagement process is only required to take place close to the time when a PHA has its financing and construction plans approved and is ready to proceed. At this point, comments from the RAB, other residents, or nearby community members are unlikely to have any effect.
Read the fact sheets at: https://bit.ly/3IVcx1C
View HUD’s five-minute video at: https://bit.ly/3rkHKFo
Explore HUD’s RAD website at: https://www.hud.gov/RAD
Find more information about RAD on NLIHC’s public housing webpage and on page 4-40 of NLIHC’s 2021 Advocates’ Guide.
Find more information about RAD from NHLP at: https://bit.ly/3ujEvAb