New Developments in Efforts to Preserve Public Housing

At their meeting on December 17, Home Forward's Board of Commissioners will take up matters related to efforts to preserve the benefits of the agency's public housing resource.  Public housing, which operates with funding that must be approved by Congress each year, does not receive enough to cover its operating and capital costs.  As a result, Home Forward has worked over the last decade to improve the outlook for these apartment communities.

The agency's newest initiative, called 85 Stories, seeks to secure the financial and physical health of 10 central city high rises that provide homes for very low-income seniors and persons with disabilities.  Between 30 and 50 years old, the buildings need more than $80 million in renovations.

The board will hear a report on public housing preservation and consider several resolutions advancing 85 Stories.  An application to the U.S. Department of Housing and Urban Development (HUD) that would change the underlying subsidy from public housing to one of two HUD project-based rent assistance programs will be part of the discussion.  HUD is offering housing authorities this opportunity through its new Rental Assistance Demonstration (RAD) program.  Rent assistance funding has more political support than public housing at the federal level, and it also creates the ability to operate the properties by conventional real estate models that permit debt leverage and property reserves.

Housing authorities that apply for RAD by December 31 this year lock in higher funding levels.  Home Forward is proposing this approach for the six buildings in the second phase of its 85 Stories effort.  Conversion of the underlying subsidy for the first four 85 Stories buildings followed a different path that is no longer available to the agency.

In addition to the 85 Stories properties, initial analysis indicates there are six other properties with public housing units in their mix that might benefit from the RAD program.

Applications at this stage reserve a place in line and are non-binding.  In the coming months, Home Forward will continue its analysis of the program to make final decisions on the properties to include and the type of project-based rent assistance.

Preservation efforts preceding 85 Stories include the agency's three HOPE VI redevelopments, the sale and one-for-one replacement of its scattered site public housing with more efficient multifamily housing, and renovation of most of its family public housing properties with the help of stimulus funding.

Click here to read more about this in the materials for the upcoming board meeting.