by Brianna Crandall — February 18, 2015—Of relevance to facilities managers of multifamily residences, the U.S. Department of Housing and Urban Development (HUD) has just awarded nearly $1.8 billion to public housing authorities in all 50 states, as well as the District of Columbia, Guam, Puerto Rico and the U.S. Virgin Islands. The funding will allow agencies to make major large-scale improvements to their public housing units.
The grants are provided through HUD’s Capital Fund Program, which offers annual funding to approximately 3,100 public housing authorities to build, repair, renovate and/or modernize the public housing in their communities. These housing authorities use the funding to do large-scale improvements such as replacing roofs or making energy-efficient upgrades to replace old plumbing and electrical systems.
For over 75 years, the federal government has been investing billions of dollars to develop and maintain public and multifamily housing, yet the nation continues to lose some 10,000 public housing units each year, primarily due to disrepair. A 2011 HUD study found that the nation’s 1.1 million public housing units are facing an estimated $25.6 billion in large-scale repairs. Unlike routine maintenance, capital needs are extensive improvements required to make the housing decent and economically sustainable, such as replacing roofs or updating plumbing and electrical systems to increase energy efficiency, explains HUD.
To help protect the considerable federal investment in public housing, and respond to the growing demand for affordable rental housing, the Obama Administration proposed the Rental Assistance Demonstration (RAD), a comprehensive strategy leveraging public and private funding that complements the Capital Fund Program and offers a long-term solution to improve the country’s affordable housing stock.
Since Congress approved RAD in November 2011, early results show it is generating significant additional capital for public and assisted housing. HUD has made awards to 60,000 public and assisted housing units in more than 340 different projects across the country. Through these awards, housing authorities 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, adds HUD.
Currently, HUD has received applications from PHAs for an additional 116,000 units under RAD. To support the growing demand for RAD, the president’s fiscal year (FY) 2016 budget proposal requests to eliminate the RAD cap, and provide $50 million to help local public housing agencies to finance the recapitalization of more than 185,000 units of public housing and stimulate private investment.
