Earlier this week, Maxine Waters, the Ranking Member of the House Financial Services Committee, sent a letter to the GAO requesting a review of the Rental Assistance Demonstration program (RAD). RAD, as I've written about previously, is the Obama administration's plan to save public housing by injecting private capital. Currently 185,000 public housing units across the country are being transferred to the control of private developers, who will receive tax breaks and subsidies in exchange for repairing and rehabbing the units, and keeping their rents low.
Waters has criticized RAD in the past. In December 2014, she sent a letter to President Obama asking him to reconsider the program, saying she believes it "may very well do more harm than good in diminishing a crucial public asset." She urged him to allocate more funds directly to public housing authorities and to "renew [the government's] commitment to serving those most in need by demanding the full amount of funding that the public housing program so desperately requires."
Now, nearly ten months later, Waters is calling for a more formal federal review. In her letter to the GAO she outlines her concerns that tenant rights will not be properly protected through RAD conversions, that public assets will be privatized, and that long-term affordability is not guaranteed. (My previous reporting looks more specifically at all of these concerns).
Waters asks the GAO to examine some critical questions about RAD conversions, such as how are the housing authorities proposing to maintain public ownership over the long haul, and are those proposed mechanisms sufficient to actually protect the properties? What are HUD's plans for public housing units not converted under RAD? Have any tenants been displaced? How have tenants been educated about and involved in the RAD conversion process?
According to HUD, the nation's 1.2 million public housing units need at least $25.6 billion in capital repairs. While many experts feel that RAD may be the best available option to preserve public housing given the austere political climate, answers to Waters' questions are still sorely needed. The details of these real estate transactions are not well understood, and the few details that have emerged raise many questions.
Given that some of the failures of the Clinton-era HOPE VI program were poor recordkeeping and tenant displacement, Waters' call for more rigorous oversight is a welcome development.
