The U.S. Department of Housing and Urban Development recently released a report on their Rental Assistance Demonstration program that says it’s on track to accomplish its primary goal of attracting substantial new capital that will stabilize the physical and financial conditions of public housing properties across the country. The Rental Assistance Demonstration (RAD) was created in order to give public housing authorities (PHA’s) a powerful tool to preserve and improve public housing properties and address the $26 billion dollar nationwide backlog of deferred maintenance. The report found that by October of 2015, participating PHA’s successfully generated $2.5 billion in new investment to preserve and improve their public housing stock – over 19k units so far. HUD’s evaluation discovered that early adopters of RAD leveraged $9 in capital for every $1 of public housing funds.
“Just as private owners of single- and multi-family housing routinely rely upon debt financing as a means of undertaking physical improvements to their properties, RAD allows public housing authorities to safely leverage other sources of private capital, typically debt and equity, in order to finance rehabilitation or in some cases completely replace distressed public housing.”
Interestingly, The Wall Street Journal nailed it in the sub-headline of their news article, stating; “The effort…converts public housing into Section 8 housing so buildings are better maintained.”
Click here to read HUD’s media release with report details
Click here to read the full report on HUD.gov.
