New RAD Notice, Revision 4 Released

Earlier today, HUD released the new Rental Assistance Demonstration (RAD) notice: “Rental Assistance Demonstration – Final Implementation, Revision 4” (Notice H-2019-09; PIH-2019-23 (HA)). The RAD program allows for units to be converted from certain Department of Housing and Urban Development (HUD) funding streams, such as public housing, to either a Section 8 project-based voucher (PBV) funding stream or a Section 8 project-based rental assistance (PBRA) funding stream. There are several major changes in this notice, including changes to the First Component of RAD (which allows public housing units to be converted to PBV or PBRA) and implementation of the 2018 Appropriations Act provision allowing Section 202 project rental assistance contracts (PRAC) to be converted to PBV or PBRA.

The changes to the First Component of RAD include the following:

  • A policy that RAD rents will be updated every two years (RAD awards after each update will use the updated rents);
  • A newly added “Concept Call” step to the RAD process, to allow PHAs to receive confirmation that project plans are sufficiently advanced to submit a Financing Plan;
  • More stringent notice requirements for residents in developments to be converted (the new notice details resident participation requirements at each step of the RAD process);
  • A policy that all households residing in regular PBV units will have the same resident rights extended to them as households that reside in RAD-PBVs in converted developments;
  • A mechanism for PHAs to enter into partnerships with each other to convert developments;
  • A policy allowing for rent increases in certain scenarios for PBRA conversions, such as developments located in Opportunity Zones;
  • Elimination of the requirement to submit the Capital Needs Assessment (CNA) tool in certain scenarios; and
  • Other changes (including changed requirements for portfolio awards, a change in how PHAs report debts owed, and broadening the use of “tiered environmental reviews”).

At this time, NAHRO staff are still reviewing the new notice. Additional analysis will be provided in future NAHRO publications.

The RAD Notice, Revision 4 can be found here.

[2:17 pm edit – The new notice can also be found on HUD’s RAD website here.]

Election Impact on Congressional Committees

The analysis below is simply a prediction of who is likely to serve as leadership on the committees based on the current information available. Frequently after a large number of losses or retirements, members of Congress shift between committees and chair/ranking member positions, changing the seniority structure of committees as a result. One Senator choosing to take an unexpected chair position can have ripple effects across several committees that are difficult to predict. This is particularly true at the subcommittee level. Additionally, Republicans have established a six-year term limit for committee chairs and ranking members, which causes more committee changes than Democrats who don’t have a term limit.

Finally, one of the biggest impacts on committee change is a flip of party control or a dramatic change in majority size. The committee structure is based on majority party and size, and when for example Senate Republicans increase their majority overall in the Senate, their control of committee seats also increases. Depending on how the remaining three Senate races are called, it could force lower-seniority Democrats off committees.

Appropriations

The House Appropriations Committee will see some turnover in the 116th Congress; while all Democrats won his/her races, four Republican members either lost or are retiring, in addition to Rep. Evan Jenkins (R-W.V.) who retired earlier this year.

The Transportation, Housing and Urban Development (THUD) Subcommittee will look very different next year. Included in the Republican losses/retirements are two members of the Transportation, Housing and Urban Development Subcommittee, Rep. John Culberson (R-Texas) and Rep. David Young (R-Iowa). Also retiring is full committee Chair Rodney Frelinghuysen (R-N.J.). There may be some consistency in the THUD leadership, as current Chair Mario Diaz-Balart (R-Fla.) will have the option of remaining chair if he chooses.

Democratic leadership on the committee is expected to remain fairly stable. Current Ranking Member Nita Lowey has stated that she will take over the gavel in January and has already started pushing Republicans to make a budget deal for FY 2020. THUD Ranking Member David Price (D-N.C.) also has the option of taking over as chair of the subcommittee.

The Senate Appropriations Committee will have far less turnover in the 116th Congress and leadership will likely remain the same. Only a single member of the committee is at risk of losing her seat; Sen. Cindy Hyde-Smith was forced into a run-off election that will take place on November 27.

Full Committee Chair Richard Shelby (R-Ala.) will remain in the top position on the committee, which he took over in April after the retirement of former chair Thad Cochran (R-Miss.). Senator Patrick Leahy (D-Vt.) has the option of remaining ranking member, though as a high-ranking Democrat he may have other committee options. Leadership of the THUD Subcommittee is likely to continue with current Chair Susan Collins (R-Maine) and Ranking Member Jack Reed (D-R.I.).

Authorizing Committees

As a result of a high number of losses and retirements, the House Financial Services Committee will be a significantly different committee in the next Congress. Eight Republicans either lost their re-election bid or are retiring and four additional races are too close to call. Four Democrats are retiring.

Current Ranking Member Maxine Waters (D-Cali.) will take over as chair in January. Current Chair Jeb Hensarling (R-Texas) is retiring and Rep. Patrick McHenry (R-N.C.) has declared his intention to take over as ranking member. Leadership of the Housing and Insurance Subcommittee is likely to remain the same, with current Ranking Member Emanuel Cleaver (D-Mo.) expected to take the chair position and current Chair Sean Duffy (R-Wisc.) likely to be ranking member. The composition of the subcommittee will be extremely different, though, as six Republican members and two Democrats will not return to Congress.

Unlike the big changes coming to Financial Services, the membership of the Senate Banking Committee is likely to remain consistent. Only two Republicans and two Democrats lost their re-election or are retiring. Leadership could see some changes, though. Depending on the committees that other members choose to chair, current Chair Mike Crapo (R-Idaho) could move to head another committee. There are several scenarios that could result in either Sen. Chuck Grassley (R-Iowa) or Sen. Patrick Toomey (R-Penn.) taking over the committee. Current Ranking Member Sherrod Brown (D-Ohio) is expected to remain in his position.

Tax Writing Committees

The Senate Finance Committee is set for a change in leadership thanks to the retirement of current Chair Orrin Hatch (R-Utah). It’s unclear at this point who will take over, though Sen. Grassley does have the option of taking the Chairmanship if he is willing to give up his current role as the Chair of the Judiciary Committee. If he elects to remain at Judiciary, current Banking Committee Chair Mike Crapo would be next in line for the position. Current Ranking Member Ron Wyden (D-Oregon) will probably remain in place, though if he does take a position on another committee, Sen. Debbie Stabenow (D-Mich.) and Sen. Maria Cantwell (D-Wash.) would be next in line. I

The House Ways and Means Committee will be lead by current Ranking Member Richard Neal (D-Mass.) and current Chair Kevin Brady will probably take over as Ranking Member, though he will need to request a waiver from leadership.

This Tuesday!! NAHRO e-Briefing – RAD: Program Updates and PHA Experiences

RAD: Program Updates and PHA Experiences
A NAHRO Professional Development e-Briefing
Tuesday, February 13, 2018
1:30 – 3:00 pm EST

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The Rental Assistance Demonstration (RAD) continues to be a critically important tool for housing authorities looking to pursue innovation while renovating and preserving their local affordable housing stock. As we begin 2018, join the NAHRO Policy Team for an in-depth review of the current status of RAD. Participants will also hear from PHAs that have gone through the RAD conversion process. These RAD agencies will discuss why RAD worked for them, explain how they chose between Project Based Vouchers (PBV) or Project Based Rental Assistance (PBRA), and share lessons learned and best practices. Whether your agency is a RAD veteran or exploring whether RAD is a viable option for the future, don’t miss this opportunity to have your questions addressed by industry experts during this interactive online training.

Only $95 for NAHRO members!

Registration closes Monday, February 12 at 11:59 ET pm. 

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Reminder: Whether you’re watching alone or with an audience of 100, only one registration per connected device is required, making NAHRO Professional Development’s e-Briefings an outstanding value! Can’t attend the session at the scheduled time? Register anyway, and we will email you a link to the archived recording as soon as it’s ready to be stream.

Why the 4% LIHTC Matters: Housing Authority of the City of Austin

North Loop Apartments
North Loop Apartments & Gaston Place Apartments. Photo: HACA

The Low-Income Housing Tax Credit (LIHTC) is one of the most effective tools for creating new and critically needed affordable housing, and accounts for the vast majority of all affordable rental housing created in the United States. This is one in a series of articles that show how public housing authorities (PHAs) and community development agencies have successfully used federal tax credits and tax-exempt bonds to build and/or preserve public housing and affordable housing, and to increase the sustainability of their communities.

Housing Authority of the City of Austin: Portfolio Modernization

The Housing Authority of the City of Austin (HACA) is fully converting its public housing portfolio to RAD, and for many properties, has used 4 percent LIHTC and Private Activity Bonds (PABs) to improve its public housing stock through HUD’s Rental Assistance Demonstration Program (RAD).

“Our ability to use 4 percent Low Income Housing Tax Credits and Private Activity Bonds has been crucial to meeting Austin’s affordable housing challenge,” said HACA President and CEO Michael Gerber. “We are fully converting our public housing portfolio to RAD, and PABs layered with 4 percent credits have provided us with the necessary financing to dramatically rehabilitate our properties – including new kitchens, bathrooms, flooring, and accessibility features.  There is intense competition in Texas for 9 percent tax credits, and winning them is difficult.  Without PABs and 4 percent credits, our RAD program would be dead in the water.”

“In just the past three years, HACA has issued $150 million in Private Activity Bonds, coupled with 4 percent credits, to develop 1,600 high-quality apartment units,” Gerber explained.” These developments would not have happened without the PAB  / 4 percent tax credit program. One thousand people a week are moving to Austin, and recent studies show that the city needs another 55,000 affordable housing units on the ground today.  Losing PAB capacity effectively kills the 4 percent tax credit.  And, without these financing tools, low-income people – seniors, persons with disabilities, veterans, and far too many children – will lose the opportunity for safe, decent housing.”

For more information about this project or to share your organization’s 4 percent LIHTC success story, please contact nahro@nahro.org.

Why the 4% LIHTC Matters: Housing Commission of Anne Arundel County

Freetown Village

The Low-Income Housing Tax Credit (LIHTC) is one of the most effective tools for creating new and critically needed affordable housing, and accounts for the vast majority of all affordable rental housing created in the United States. This is one in a series of articles that show how public housing authorities (PHAs) and community development agencies have successfully used federal tax credits and tax-exempt bonds to build and/or preserve public housing and affordable housing, and to increase the sustainability of their communities.

Housing Commission of Anne Arundel County: Freetown Village

Freetown Village is an existing community built in 1977 on 9.6 acres in Pasadena, Maryland. It is currently owned and operated as public housing by the Housing Commission of Anne Arundel County (HCAAC).  The property includes 154 family apartments, ranging in size from one-bedroom to four-bedroom apartments. The current unit mix is 24 one-bedroom units, 48 two-bedroom units, 60 three-bedroom units, and 22 four-bedroom units, contained in 15 two-story townhome-style residential buildings, and two three-story garden-style buildings.

Freetown Village needs modernization and upgrades. The Rental Assistance Demonstration (RAD) Program provides an opportunity to access private capital in order to address the property’s physical needs and secure a more stable funding source for rental assistance long-term. HCAAC will use funding from four key resources of the Maryland Department of Housing and Community Development (DHCD): Tax-Exempt Bonds, 4% Low Income Housing Tax Credits, a soft loan from Rental Housing Works loan, and a construction and permanent loan using DHCD’s Risk Share loan product totaling more than $41.5 million. This project is contingent on the use of tax-exempt bonds and issuance of 4% Low income Housing Tax Credits, which have an anticipated commitment date of early 2018.

Existing units will be upgraded with:

  • New kitchen cabinets and counters
  • New kitchen appliances (refrigerators, ranges, range goods)
  • New bathroom vanities
  • New flooring
  • New entry doors
  • R-49 attic insulation
  • Install LED lighting replacement
  • Replace bathtubs with roll-in showers for Americans with Disabilities Act (ADA) units; other ADA upgrades.

In addition system and common area upgrades will include:

  • New hot water heaters
  • HVAC upgrades
  • Upgraded landscaping features
  • Seal/stripe parking spaces
  • Added insulation
  • LED lighting replacement
  • ADA sidewalk improvements
  • New playground
  • All new flooring in common rooms.

The proposal would also add 36 new homes to Freetown Village, including 24 2BR units (approximately 720 square feet) and 12 3BR units ( approximately 980 square feet). Anne Arundel County’s Workforce Housing requirements mandate 20 of the units would be reserved for households at or below 60 percent of Area Median Income. The other 16 units could be occupied by households up to 120 percent of Area Median Income.

For more information about this project or to share your organization’s 4 percent LIHTC success story, please contact nahro@nahro.org.

Why the 4% LIHTC Matters: Knoxville Community Development Corporation

2009-NorthRidge-Crossing-1024x576
KNOXVILLE’S COMMUNITY DEVELOPMENT CORPORATION (KCDC) RECENTLY ANNOUNCED A $33.1 REHABILITATION INITIATIVE AT THREE AFFORDABLE HOUSING PROPERTIES: LONSDALE HOMES, NORTH RIDGE CROSSING (PICTURED) AND THE VISTA AT SUMMIT HILL. THE IMPROVEMENTS WILL IMPROVE ENERGY EFFICIENCY AND QUALITY OF LIFE FOR RESIDENTS.

The Low-Income Housing Tax Credit (LIHTC) is one of the most effective tools for creating new and critically needed affordable housing, and accounts for the vast majority of all affordable rental housing created in the United States. This is one in a series of articles that show how public housing authorities (PHAs) and community development agencies have successfully used federal tax credits and tax-exempt bonds to build and/or preserve public housing and affordable housing, and to increase the sustainability of their communities.

Knoxville Community Development Corporation: Lonsdale Homes, North Ridge Crossing and The Vista at Summit Hill Properties

Knoxville’s Community Development Corporation (KCDC) recently approved a $33.1 million rehabilitation initiative at three affordable housing properties. In total, 705 units at Lonsdale Homes, North Ridge Crossing and The Vista at Summit Hill will undergo significant improvements with an emphasis on energy efficiency and quality of life for residents. The plans include better insulation, LED lighting, energy-efficient appliances, plumbing repairs, roof replacement and new windows, flooring, cabinets and countertops. The improvements will be funded with a combination of low-income housing tax credits and multifamily housing bonds. “This initiative will yield significant benefits for the three properties and the residents we serve,” KCDC Executive Director and CEO Ben Bentley said. “The physical condition of these properties will be greatly enhanced and that, in turn, leads to lower operational and maintenance costs.”

“These improvements further our mission of providing quality affordable housing for our residents,” Sean Gilbert, KCDC’s Senior Vice President of Housing, added. “KCDC has been able to dramatically impact the quality of life for 705 Knoxville families by utilizing the LIHTC 4% credit/tax-exempt bonds.  If not for these important financing tools, low-income families would be forced to reside in aging units with deteriorating structures and without modern amenities and improved energy efficiency.  Our families will be able to focus on job growth and their children’s education without the distraction of obsolete housing structures.”

The plans are part of KCDC’s transition of its public housing stock to the rental assistance demonstration (RAD) program, which was created by the U.S. Department of Housing and Urban Development (HUD) in 2012 to help agencies continue their housing mission without dependence on federal funds. The program allows housing agencies to leverage public and private debt and equity to reinvest in their properties.

For more information about this project or to share your organization’s 4 percent LIHTC success story, please contact nahro@nahro.org.

Why the 4% LIHTC Matters: Walla Walla Housing Authority

emerald_before_after

Before (bottom) and after (top) pictures of Emerald Family Properties buildings. Photo credits: Walla Walla Housing Authority

The Low-Income Housing Tax Credit (LIHTC) is one of the most effective tools for creating new and critically needed affordable housing, and accounts for the vast majority of all affordable rental housing created in the United States. This is one in a series of articles that show how public housing authorities (PHAs) and community development agencies have successfully used federal tax credits and tax-exempt bonds to build and/or preserve public housing and affordable housing, and to increase the sustainability of their communities.

Walla Walla Housing Authority: Emerald Family Properties

Walla Walla (Wash.) County has the largest affordable housing gap in the state of Washington, and so the pressure is high to keep existing public and affordable housing. Recently, the Walla Walla Housing Authority (WWHA) used a combination of 4 percent LIHTCs and tax-exempt bonds to revitalize and preserve the Emerald Family Properties, an 84-unit family development with two- to five-bedroom units in nine neighborhoods. The financing package allowed the housing authority to upgrade both the interiors and the exteriors of the units, and to increase energy efficiency in a way that would lower the utility costs for the residents. Emerald Family Properties has project-based vouchers attached to its units, and thus is able to serve very low-income families as well as those of moderate income.

“This project never would have pointed in the 9 percent LIHTC credit round, so the 4 percent LIHTC and tax-exempt bonds are essential financing tools that we use to address our community’s housing needs,” said WWHA Executive Director Renée Rooker. “Over the past five years, we have developed 245 units serving elderly individuals, veterans, persons with disabilities, and families by utilizing 4 percent LIHTCs and tax-exempt bonds. Besides Emerald Family Properties, we will have completed 80 more units in the next couple of weeks. None of this could have transpired without these financing tools.”

For more information about this project or to share your organization’s 4 percent LIHTC success story, please contact nahro@nahro.org.