Rental assistance demonstration facilitates more than $15 billion in construction investment
NEW ORLEANS –The U.S. Department of Housing and Urban Development’s (HUD) Office of Multifamily Housing Programs (HUD) is announcing today that construction investment for affordable housing preservation through the Rental Assistance Demonstration (RAD) program has surpassed $15 billion since the program’s inception in 2013. Public Housing Authorities (PHAs) across the nation have leveraged RAD to obtain this financing for the construction, rehabilitation, and preservation of more than 185,000 deeply affordable rental homes for low-income families, seniors, and persons with disabilities. In Louisiana, $154,549,263 of investment has provided over 2,100 units of deeply affordable rental homes. (See Attached Fact Sheet.)
“$15 billion is more than just a number – it represents a substantial long-term investment in the homes and lives of people,” said Deputy Assistant Secretary for Multifamily Housing Programs Ethan Handelman. “Innovative use of RAD by Public Housing Authorities working with public and private sector partners, residents, and HUD has leveraged critical capital investments to help turn around the nation’s aging public housing stock.”
In the last nine years, the RAD program has provided the platform for PHAs to recapitalize and infuse new public and private investment into deeply affordable rental housing while preserving the affordability of these rental homes in perpetuity. RAD has unlocked over $15 in funding for every $1 of public housing appropriated funds.
Specifically, the program works to create and preserve affordable rental homes through HUD’s project-based rental assistance programs, including the Section 8 program, while facilitating the use of other affordability options, including the Treasury Department’s Low-Income Housing Tax Credit Program.
From its inception in 2013 through September 30, 2022, the program has helped PHAs across the country to:
- Secure and preserve housing under Section 8 for approximately 468,000 individuals.
- Convert 1,533 public housing properties, covering approximately 185,000 affordable rental homes, to the Section 8 platform, and facilitate the creation of 15,000 Low-Income Housing Tax Credit units.
- Increase the per-unit rehabilitation spending by PHAs within RAD, averaging $144,000 per home in 2022 versus $55,000 per home on average in the first five years of the Demonstration.
- Finance $6 billion of construction at properties with greater capital needs by utilizing the innovative RAD/Section 18 blend to modernize and preserve 30,647 public housing units across 142 properties since 2018.
- Leverage 140 transfers of assistance to help PHAs relocate 8,300 affordable homes to neighborhoods where the poverty rate is on average 24 percent lower than the rate at the original site. See additional RAD data here.
RAD was designed to help address the multi-billion-dollar nationwide backlog of deferred maintenance in the public housing portfolio and to stem the loss of affordable housing from falling into disrepair. Under RAD, projects funded under the public housing program convert their public housing assistance to project-based Section 8 rental assistance. Under Section 8, residents continue to pay 30% of their income towards rent and the housing must continue to serve those with very low and extremely low incomes, as was the case when the property was assisted through the public housing program. Residents must be notified and consulted prior to conversion and are given a right to return to assisted housing post-construction so that the same tenants can enjoy these newly preserved and improved apartments.