Transcript Transforming Rental Assistance (TRA)

HUD Notice
Rental Assistance
Demonstration (RAD) –
Partial Implementation and Request for
Comments
April 2012
CURRENT CHALLENGES
Public Housing
• Capital repair needs in excess of $25.6B across portfolio, or
$23,365/unit
• Section 9 funding platform unreliable (pro-rations, cuts), inhibits
access to private debt and equity capital (deed of trust)
• Losing 10,000-15,000 hard units/year
Section 8 Moderate Rehabilitation (Mod Rehab)
• Cannot renew on terms needed to secure financing
Rent Supplement (RS) & Rental Assistance Payment (RAP)
• No option to renew when contracts expire
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HISTORY
• February 2010: FY11 Budget requests $350M for Transforming
Rental Assistance (TRA) initiative
• May 2010: “Preservation, Enhancement, and Transformation of
Rental Assistance Act of 2010” (PETRA) - Administration’s bill
• December 2010: “Rental Housing Revitalization Act” (RHRA)
introduced by Rep. Ellison and co-sponsors
• February 2011: FY12 Budget requests $200M for a “Rental
Assistance Demonstration” (RAD)
• August 2011: RAD language submitted as “Technical Drafting
Service” (TDS) to Rep. Ellison, Rep. Bachus, and Senator Shelby
• November 2011: FY12 Appropriations minibus authorized RAD
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GOALS
FY12 Rental Assistance Demonstration (RAD)
Allow selected Public Housing & some at-risk assisted Multifamily
programs to convert to long-term Section 8 Housing Assistance
Payment (HAP) contracts
Goals
• Build on proven Section 8 multifamily platform
• Leverage private capital to preserve public housing
• Offer residents greater choice & mobility
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AUTHORITY
Authorized as part of the Consolidated Further Continuing
Appropriations Act of 2012 (Public Law 112-55)
• Program Rules outlined in PIH Notice 2012-18
2 Components
• 1st Component: Competitive – Public Housing & Mod Rehab
• 2nd Component: Non-competitive – Mod Rehab, Rent Supp, &
RAP
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RAD CONVERSION ELIGIBILITY
Effective Immediately
Public Housing
Mod Rehab
No Cap , but subject
to availability of TPVs
Cap of 60,000 Units
PBRA
RS & RAP
PBV
PBV
1ST COMPONENT: COMPETITIVE
• Public Housing & Mod Rehab
– Proposed: Public Comments due April 9, 2012
• Can compete to convert assistance to:
– Project-Based Rental Assistance (PBRA) or
– Project-Based Vouchers (PBV)
• Cap of 60,000 units
• Convert at current funding only
• Choice-mobility, with limited exemptions
• Extensive waiver authority to facilitate conversion
• Applications through September 30, 2015
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KEY PROGRAM PROVISIONS: PUBLIC HOUSING
Provision
Application Pools
Requirement
4 Census Regions, by PHA size; 58,750 total units
Initial Contract Rents
Capital Needs
 Choice-Mobility
 Green-Building  Priority Project
Public or non-profit ownership or control, except:
• For-profit ownership to facilitate tax credits, or
• In foreclosure, bankruptcy, termination for cause, dispose first to capable
public entity then other capable entities as determined by Secretary
• PBRA – 20 years
• PBV – 15 years (20 with approval of voucher agency)
Subject to current funding and associated rent caps
Capital and Operating Funds
Can be used in financing structure
Contract Rent Adjustments
Annually via OCAFs
Contract Renewal
Secretary must offer and PHA must accept renewal
Use Agreement
Long-term Use Agreement extended with each contract renewal
Resident Choice-Mobility
• PBRA – Required after 2 years with PHA option of 20% project cap and 1/3
voucher turnover cap; good-cause exemption for up to 10% of conversions
• PBV – Per normal PBV rules
Application Ranking Factors
Ownership /Control
Initial Contract Term

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KEY PROGRAM PROVISIONS: PUBLIC HOUSING
Continued
Provision
Approval Process (2-Step)
Requirement
PBV Inventory Limitation
1. Application > Commitment to Enter Housing Assistance Payments
Contract (CHAP)
2. Financing Plan > Housing Assistance Payment Contract (HAP)
Exempt from 20% limitation
PBV Income Mixing
Raised to 50% per property
PBV Competitive Selection of
Owner Proposals
PBRA Limitations on Distributions
Waived
No Rescreening at Conversion
Required
Resident Consultation
Required
Recognition of Legitimate
Resident Organizations
Resident Participation Funding
Required
Resident Procedural Rights under
Section 6 of 1937 Act
Davis Bacon Act and Section 3
Waived
Continued at $25 per occupied unit annually
As conveyed under Section 6 of 1937 Housing Act
Required for initial repairs
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CURRENT FUNDING – CONVERSION RENT LEVELS
ACC
Section 8
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IMPACTS ON PUBLIC HOUSING
RAD Authority Could Impact
• ≈220,000 – 270,000 units could potentially convert at current
funding*
• 60,000 unit cap ≈5% of public housing inventory
• 300 – 400 projects could potentially convert
• ≈$380M in current PH funding and ACC units to transfer to PBRA
or TBRA account
• PBRA HAP conversions shift to Office of Multifamily Housing
Programs
* Defined as able to leverage sufficient debt at current funding levels to meet the average regional capital
need in the Capital Needs Assessment 2010 (Abt Associates). Estimate assumes debt-only and does not
account for the use of other forms of capital.
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RAD CONVERSION ELIGIBILITY
Effective Immediately
Public Housing
Mod Rehab
No Cap , but subject
to availability of TPVs
Cap of 60,000 Units
PBRA
RS & RAP
PBV
PBV
KEY PROGRAM PROVISIONS: MOD REHAB
1st Component
Provision
Requirement
Application Pools
4 Census Regions; 1,250 units
Application Ranking Factors
 Capital Needs
Initial Contract Terms
Initial Contract Rents
 PBRA – 20 years
 PBV – 15 years (20 with approval of voucher agency)
Subject to current funding and associated rent caps
Contract Rent Adjustments
Annually via OCAFs
Contract Renewal
 PBRA – if owner requests, Secretary renews per MAHRA terms
 PBV – per normal PBV rules (up to 15 years)
 PBRA – Required after 2 years with owner option of 20% project cap & PHA option of
1/3 voucher turnover cap; good-cause exemption for up to 10% of conversions.
 PBV – Per normal PBV rules
Resident Choice-Mobility
Approval Process (2-Step)
 Green Building
 Choice-Mobility
PBV Inventory Limitation
1. Application > Commitment to Enter Housing Assistance Payments Contract (CHAP)
2. Financing Plan > Housing Assistance Payment Contract (HAP)
Exempt from 20% limitation
PBV Income Mixing
Raised to 50% per property
PBV Competitive Selection of
Owner Proposals
No Rescreening at Conversion
Waived
Required
Resident Consultation
Required
Recognition of Legitimate Resident
Organizations
Required
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RESIDENT CHOICE-MOBILITY
PBV
• Adhere to current program rules:
– Minimum residency: 1 year
– Waitlist priority if comparable TBRA is not immediately available
PBRA
• Minimum residency: 2 years
• PHA may limit:
– Choice-mobility vouchers to one-third of its turnover vouchers
– Choice-mobility moves to 20 percent of the assisted units in the project
• HUD may exempt up to 10% of converted units for:
– PHAs/owners without voucher program
– PHAs with one-third of voucher turnover already committed to veterans
or to the homeless
• Ranking factor (in competition) for applicants who obtain/commit choicemobility vouchers
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RAD CONVERSION ELIGIBILITY
Effective Immediately
Public Housing
Mod Rehab
No Cap , but subject
to availability of TPVs
Cap of 60,000 Units
PBRA
RS & RAP
PBV
PBV
KEY PROGRAM PROVISIONS: MOD REHAB
2nd Component
Provision
Requirement
Initial Contract Term
Per normal PBV rules (up to 15 years)
Initial Contract Rents
Per normal PBV rules
Contract Rent Adjustments
Annually per normal PBV rules
Contract Renewal
Per normal PBV rules (up to 15 years)
Resident Choice-Mobility
Per normal PBV rules
PBV Inventory Limitation
Exempt from 20% limitation
PBV Income Mixing
Raised to 50% per property
PBV Competitive Selection of
Owner Proposals
Resident Consultation
Waived
Required
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2ND COMPONENT: NON-COMPETITIVE
• Mod Rehab, Rent Supp & RAP – All Public Comments due April
9, 2012
– Proposed: Mod Rehab
– Interim Authority: Rent Supp & RAP
• Upon contract termination/expiration, convert Tenant
Protection Vouchers (TPVs) to PBVs
• No cap, but subject to availability of TPVs
• Choice-mobility requirement as found in PBV program
• Limited waiver authority to facilitate conversion
• 2-year prospective conversion authority (ends 9/30/2013)
• 5-year retroactive conversion authority (10/1/2006)
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RAD CONVERSION ELIGIBILITY
Effective Immediately
Public Housing
Mod Rehab
No Cap , but subject
to availability of TPVs
Cap of 60,000 Units
PBRA
RS & RAP
PBV
PBV
RENT SUPP & RAP BACKGROUND
• Rent Supp program authorized under Section 101 of the
Housing and Urban Development Act of 1965
• RAP program authorized under Section 236(f)(2) of the
National Housing Act
• Contracts authorized for 30 to 40 year terms. Budget
authority provided for contract term. No option for renewal.
– All contracts expire by 2019, most prior to 2016
• Today: Approximately 25,000 Rent Supp/RAP units remain, in
345 properties (236 and some 202s). In most cases the Rent
Supp or RAP provides assistance to some, but not all units.
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GEOGRAPHY OF RENT SUPP & RAP
Highly Concentrated in a Few States
WA
VA 2%
PA 3%
1%
Other CA
7% 3%
CT
1%
IL
6%
MA
15%
NY
29%
MD
4%
MI
12%
NJ
15%
MN
2%
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KEY PROGRAM PROVISIONS: RENT SUPP & RAP
Provision
Requirement
Initial Contract Term
Per normal PBV rules (up to 15 years)
Initial Contract Rents
Per normal PBV rules
Contract Rent Adjustments
Annually per normal PBV rules
Contract Renewal
Per normal PBV rules (up to 15 years)
Resident Choice-Mobility
Per normal PBV rules
PBV Inventory Limitation
Exempt from 20% limitation
PBV Income Mixing
Raised to 50% per property
PBV Competitive Selection of
Owner Proposals
Resident Consultation
Waived
Required
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SUBMISSION OF PUBLIC COMMENTS
Due April 23, 2012
2 methods for submitting public comments
• Electronic – Federal eRulemaking Portal at
www.regulations.gov. HUD strongly encourages electronic
submissions of comments.
• Mail – Regulations Division, Office of General Counsel,
Department of Housing and Urban Development, 451 Seventh
Street, SW, Room 10276, Washington, DC 20410-0500
Submissions must refer to HUD Notice (PIH 2012-18)
All comments submitted will be posted for public viewing
on www.regulations.gov
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PROJECTED TIMELINE
Initial Notice Published
45-Day Public Comment Period Ends
Final Notice Published
3/8/2012
4/23/2012
6/15/2012
First Component (Public Housing & Mod Rehab)
Initial Application Window Opens
Public Housing Ongoing Application Window Opens
Initial CHAP Awards
8/1/2012
9/1/2012
10/1/2012
Second Component (Mod Rehab, Rent Supp, & RAP)
Rent Supp/RAP Requests for Conversions Under
Interim Authority
3/8/2012
Rent Supp/RAP/Mod Rehab Requests for Conversions Under
Final Notice
8/1/2012
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RAD WEB PAGE
All Notice and application materials, as well
as additional resources, can be found at
www.hud.gov/rad
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