Navigating RAD Conversions: Suggestions for Public Housing Rehabilitation

Abstract

Public housing in the United States, a critical resource for nearly 1.7 million residents, faces significant challenges due to aging infrastructure and chronic operating funding shortfalls. The Rental Assistance Demonstration (RAD) program, authorized by Congress in 2012, aims to address these issues by leveraging private financing to rehabilitate and modernize public housing properties. Although the RAD program has been around for more than a decade and leveraged over $18.5 billion of construction investments, close to 75% of the more than 2500 eligible local PHAs are yet to benefit from it. This thesis examines the evolution of RAD programs, including the two newer tools, RAD/Section 18 Blend and Faircloth-to-RAD, and their adoption by public housing authorities (PHAs). The research incorporates a review of HUD program and policies, RAD implementation data, and interviews with industry practitioners, including PHAs, developers, and consultants, to understand the hurdles preventing the adoption of the program and the characteristics of successfully structured projects. This thesis offers insights into how specific strategies are used to overcome the hurdles and provides practical recommendations for PHAs seeking to leverage RAD for public housing preservation and development. Key findings highlight the importance of utilizing available funding sources to achieve financial feasibility and enhancing organizational skills and capacity.