The U.S. Department of Housing and Urban Development (HUD) has approved Mobile Housing Board’s preliminary application to participate in HUD’s Rental Assistance Demonstration (RAD) project, which will essentially provide the agency a more stable funding method for making capital improvements and transforming its communities

RAD allows public housing authorities (PHAs) and owners of HUD-assisted properties to convert and preserve housing units to a form of project-based assistance under Section 8 of the Housing Act of 1937. RAD participants receive long-term contracts from HUD, which will better allow them to leverage millions of dollars in debt and equity to address immediate capital needs, preserve affordable housing units, and develop new affordable units.

RAD ensures that the units converted to RAD remain permanently affordable to low-income households. RAD creates greater funding certainty while allowing increased operational flexibility to empower PHAs and owners to serve their communities.

Initially, HUD awards conditional RAD approval. Mobile Housing Board (MHB) will have a year to submit expansive RAD applications to HUD, explaining how it proposes to transform each of its affordable housing developments and secure financing to make the transfer to RAD possible.

MHB has some of the oldest housing stock in the state of Alabama and, perhaps, in the nation. Four of its13 affordable housing developments, also known as public housing developments, were constructed over 70 years ago and are deteriorating rapidly.

The Mobile Housing Board of Commissioners approved the agency’s Housing Transformation Plan 2020 in 2013. It includes a comprehensive strategic plan to transform or reposition MHB’s eight multi-family housing developments and five senior citizen complexes at an approximate cost of $439.5 million. “Potentially, RAD will assist MHB to preserve some 3,000 apartments for the area’s must vulnerable families over the next several years,” said Dwayne C. Vaughn, MHB’s Executive Director.

In November of 2011, Congress authorized HUD to implement RAD to stem the loss of critically needed public and other forms of subsidized housing due to a severe backlog of capital needs. According to “Capital Needs in the Public Housing Program,” a study released by HUD earlier in 2011, the nation’s 1.2 million public housing units need nearly $26 billion to keep them in safe and decent condition – a figure well in excess of the roughly $2 billion Congress appropriates for capital repairs to the units annually.

Nationally, RAD is expected to benefit some 185,000 units of affordable housing and generate more than $5 billion, or more, in private capital. In the process, RAD will help create and support local jobs in communities across the country.

According to HUD’s website, since Congress approved RAD four years ago, early results show it is generating significant additional capital for public and assisted housing. HUD has made awards to 131,290 public and assisted housing units in more than 1,154 different projects across the country. Through these awards, PHAs have proposed to generate approximately $3 billion in capital repairs by leveraging private debt and equity, which will preserve or replace distressed units and support local jobs in their communities – all without additional federal resources.

To support the growing demand for RAD, President Obama’s fiscal 2016 budget proposal requests to eliminate the RAD cap, and provide $50 million to help local PHAs to finance the recapitalization of more than 185,000 units of public housing and stimulate private investment.

For more on this and other issues from Wednesday’s meeting of the Mobile Housing Board of Commissioners please check out the Nov. 26 issue of Lagniappe.