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January 10, 2013
VANCOUVER & YAKIMA HOUSING AUTHORITIES OKAYED TO "TAP INTO PRIVATE CAPITAL" TO PRESERVE & IMPROVE PUBLIC HOUSING UNDER NEW GROUNDBREAKING HUD INITIATIVE
SEATTLE - The Yakima and Vancouver public housing authorities are among 68 housing authorities nationwide chosen to participate in a groundbreaking strategy to tap private capital in order to preserve and upgrade their public housing inventory as part of HUD's new Rental Assistance Demonstration (RAD) initiative.
HUD's RAD initiative, approved by Congress as part of HUD's 2012 budget, will preserve and strengthen 122 public housing units - 49 units at Skyline Crest and 73 at scattered sites - owned and operated by the Vancouver Housing Authority and 150 public housing units - all at scattered sites - owned and operated by the Yakima Housing Authority by generating private capital to address backlogs in maintenance needs. Nationally, RAD is expected generate more than $650 million in private capital to benefit more than 13,000 units of affordable housing for the next 20 years and generate more than $650 million in private capita to help address an e estimate $26 billion backlog in capital needs faced by public housing authorities.
"This innovative and cost-effective approach greatly enhances our ability to confront the decline of our public housing and older assisted housing stock," said HUD Secretary Shaun Donovan. "With the initial implementation of RAD, the Obama Administration has begun to demonstrate that public-private partnership can help preserve our nation's affordable housing and create jobs in the process."
"HUD and our local partners are working to protect critically needed affordable housing for the residents in these communities," said HUD Northwest Regional Administrator Mary McBride. "This is a market-based approach to helping local housing authorities tap into private capital to preserve housing for some of our most vulnerable citizens."
Currently, public housing authorities are prohibited from raising private capital to maintain publicly-owned units. RAD allows public housing agencies and private owners of certain at-risk, federally assisted properties to convert their current assistance to long-term Section 8 contracts. Such contracts will allow owners to leverage millions of dollars in debt and equity to better address immediate capital needs and preserve these affordable housing units. In addition, participating agencies are freed from antiquated public housing rules and restrictions that hindered their ability to best preserve and manage their housing similar to other affordable housing owners and managers.
In 2011, HUD released Capital Needs in the Public Housing Program, a study that found the nation's 1.2 million public housing units need nearly $26 billion to keep these homes in safe and decent condition for families, a figure well in excess of the roughly $2 billion Congress appropriates for capital repairs annually. Beyond the potential loss of this public housing, the Moderate Rehabilitation, Rent Supplement, and older Rental Assistance Payment (RAP) programs are at risk of being lost from the affordable housing stock.
RAD is part of the Obama Administration's comprehensive strategy to preserve public and HUD-assisted housing. In November 2011, Congress authorized HUD to implement RAD as a budget-neutral demonstration program with two components, allowing for the conversion of assistance for both public housing and HUD-assisted properties that have expiring subsidies.
HUD's mission is to create strong, sustainable, inclusive communities and quality affordable homes for all. HUD is working to strengthen the housing market to bolster the economy and protect consumers; meet the need for quality affordable rental homes: utilize housing as a platform for improving quality of life; build inclusive and sustainable communities free from discrimination; and transform the way HUD does business. More information about HUD and its programs is available on the Internet at www.hud.gov and espanol.hud.gov. You can also follow HUD on Twitter at @HUDgov or on Facebook at www.facebook.com/HUD.