Title
HUD Rental Assistance Demonstration Program Applications for Additional Public Housing Properties
Description
Request authorization for the City Manager, or his designee, to apply to the U.S. Department of Housing and Urban Development's (HUD) Rental Assistance Demonstration (RAD) Program for an additional 520 units across six multi-family rental properties in the City's Public Housing portfolio and implement the RAD Program, if approved by HUD.
Report
Summary
If approved by HUD, the RAD program would enable the Housing Department to convert 520 units from a Public Housing operating subsidy to a long-term, renewable, project-based Section 8 contract. Participation in RAD will: (1) increase the self-sufficiency of property operations through more stable Section 8 funding; (2) provide for property reserves, not subject to HUD recapture, to address on-going capital needs; and, (3) allow for the use of Low Income Housing Tax Credits as well as private sources of funding to make capital improvements.
In February 2016, City Council approved the conversion of 815 units across five Public Housing communities in the first phase of the Housing Department's RAD applications which included: A.L. Krohn, A.L. Krohn East, Frank Luke Homes, Sidney P. Osborn, and Foothills Village. HUD awarded the Housing Department a conditional approval for RAD conversion of these units in February 2017.
The properties proposed for the second-round of RAD applications are:
1. Maryvale Parkway, 4545 N. Maryvale Pkwy., 108 units;
2. Washington Manor, 1123 E. Monroe St., 112 units;
3. Pine Towers, 2936 N. 36th St., 156 units;
4. McCarty on Monroe, 1130 E. Monroe St., 34 units;
5. Aeroterra Senior Village, 675 N. 16th St., 60 units;
6. The Summit Apartments, 12830 N. Paradise Village Pkwy., 50 units.
The RAD Program will help provide for future financial sustainability and continued affordability at these six Public Housing properties. Five of the six properties provide housing for seniors, which would not change under the RAD Program.
In 2012, HUD introduced the RAD Program to address the lack of funding and $26 billion backlog of repair costs and capital needs of Public Housing properties nationwide. At that time, HUD capped the number of units eligible for the program at 60,000. More recently, Congress increased the cap to 185,000 units and extended the application deadline.
RAD is a central part of HUD's affordable rental housing preservation strategy and allows Public Housing Authorities, such as the City's Housing Department, to leverage private and public debt and equity in order to reinvest in its Public Housing stock. The Housing Department will return to City Council for approval of development and financing terms for each property.
Under RAD, residents continue to pay 30 percent of their income for rent and maintain the same basic rights as they possess in the Public Housing program. The Housing Department does not anticipate permanently relocating residents of these properties as a result of the RAD conversion.
Financial Impact
There is no impact to the General Fund.
Public Outreach
Two resident meetings at each property will be held prior to the submission of the RAD applications. If RAD commitments are awarded, ongoing resident communications will occur throughout the RAD conversion process.
Location
Multiple addresses; properties located in Districts 3, 5 and 8.
Concurrence/Previous Council Action
This item was considered at the Sustainability, Housing, Efficiency and Neighborhoods Subcommittee on May 16, 2017, and approval recommended by a vote of 4-0.
Department
Responsible Department
This item is submitted by Deputy City Manager Deanna Jonovich and the Housing Department.