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Using Private Investment to Preserve Public Housing

November 7, 2014 at 2:50 PM

As it writes the final housing appropriations bill for fiscal year 2015, Congress should include a Senate Appropriations Committee-approved provision to expand the Rental Assistance Demonstration (RAD).  Our new paper explains why expanding RAD makes sense, as it would help repair the nation’s public housing stock and preserve needed affordable housing for vulnerable seniors, people with disabilities, and families with children.

RAD helps local housing agencies revitalize and preserve some public housing by permitting them to convert public housing units to “Section 8” rental assistance subsidies, which in turn enables them to more easily obtain private investment for renovation.

More private investment is sorely needed; a long history of public underfunding has placed many public housing developments at risk.  In most years, housing agencies have received much less funding than they need to operate and maintain developments.  Most public housing remains in decent condition, but a 2010 study for the Department of Housing and Urban Development (HUD) found a backlog of $26 billion in unmet repair and renovation needs.

Without sufficient funds, many developments could deteriorate to the point where they will eventually have to be demolished or sold.  Since the mid-1990s, more than 200,000 public housing units have been lost and not replaced by new public housing.

Under current law, the number of units that can be converted under RAD is capped at 60,000, but the need is far greater; 124,000 more units are on a waiting list.  The Senate provision would raise the cap to 185,000.  The House-approved appropriations bill leaves the cap unchanged.

While some have expressed concern that RAD will reduce the number of affordable units, jeopardize residents’ rights, or turn control of public housing over to the private sector, RAD has substantial protections against these outcomes.  HUD and local agencies must implement those protections robustly but, overall, RAD’s benefits for residents and other low-income people outweigh any risks.


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