Susan Walsh/AP Photo
HUD Secretary Ben Carson, left, testifies before the House Financial Services Committee, on Capitol Hill in Washington, October 22, 2019. Carson supports an expansion of the Obama-era Rental Assistance Demonstration program, which transfers public housing to private management.
America’s public-housing system needs more money—everything comes back to that. Even after demolishing nearly 100,000 housing units in the 1990s and early 2000s, the federal Department of Housing and Urban Development (HUD) is still struggling to prevent the country’s remaining public-housing properties from falling apart. The agency currently has an astonishing $35 billion repair backlog. Roofs are leaking, boilers are breaking, and facades are collapsing across the country in buildings that provide shelter for more than 1.2 million low-income households.
The blame for this funding shortfall sits squarely at Congress’s feet. Over the past two decades, legislators have whittled down HUD’s budget again and again, halving the public-housing Capital Fund between 1998 and 2018. Spending additional dollars to maintain existing housing stock is a nonstarter for politicians in both parties, who instead prefer to fund the Section 8 voucher program, where the government pays rent for families in private apartments. The best legislators have been able to do is keep HUD’s overall budget steady, despite the Trump administration’s annual requests to slash it further.
As the funding hole for public housing has grown wider, HUD has begun to lean on the Rental Assistance Demonstration (RAD), an Obama-era program that transfers public housing to private management. This initiative, essentially an elaborate work-around, allows housing agencies to find money for badly needed repairs outside of congressional appropriations. A new HUD report released last week shows that it has generated billions of dollars.
But the growth of the RAD program also reveals the shortcomings of a housing policy that relies on private companies to shelter vulnerable people. Until legislators give HUD the money it needs, millions of Americans who live in public housing will remain at risk of being displaced or priced out.
RAD converts traditional public-housing projects into privately managed buildings funded by Section 8 vouchers. A city housing authority leases its property out to a private management company, and hires a private construction company to do repairs. The building stays where it is, residents continue to live in it, and the new managers are legally obligated to keep the rent at the low threshold set by HUD. In theory, at least, nothing really changes, except that rents are now paid for by Section 8, which has long been more palatable to Congress, because it takes property management out of government hands.
More important, public-housing authorities have to get all their money directly from the state and federal government, but private landlords do not: They can secure loans from banks and investment funds, take out mortgages through the Federal Housing Administration, and apply for the Low-Income Housing Tax Credit (LIHTC), which offers tax breaks for landlords who rent properties at below market value. All these tools allow the companies that manage RAD properties to raise money for repairs, which in turn allows the local housing authority to keep its buildings in acceptable condition.
Since HUD first tested the program in 2012, public-housing authorities across the country have flocked to use it. The city of Charlotte, North Carolina, for instance, is converting all its public housing through RAD, while bigger cities like Chicago and Baltimore are also in the process of converting more than half their buildings. Even in New York, where most public housing stayed standing through the 1990s, officials have experimented with two RAD conversions to fast-track repairs. According to HUD’s report, around 10 percent of the nation’s public housing has gone private, or more than 100,000 homes; more than 40 percent of the stock, furthermore, is now eligible for the program. If RAD continues to expand at its current pace, the majority of the country’s public-housing residents will soon be living under private management.
According to HUD, RAD has so far helped leverage more than $12 billion in tax credits and federal assistance for these 100,000 homes, several times more than what Congress doled out to the entire public-housing stock in the same period. Furthermore, the report says, implementation has been smooth: Around 80 percent of residents in surveyed properties said they were happy with the repairs, and more than 95 percent of residents returned to the same building if they were displaced during the repair process.
Progressives and housing advocates, though, have voiced concerns that RAD is a “privatization” scheme, a pretext to kick residents out of their homes and pawn off public property. The program does indeed place public resources under private stewardship, and unlike nearly every other Obama-era HUD policy, it has the full support of Trump’s HUD secretary, Ben Carson. Carson said the new report “validates our long-held belief that RAD is working,” and has called for “opening the door” to an expansion of the program.
Ed Gramlich, research director of the National Low Income Housing Coalition, says the program hasn’t been the panacea that Carson says it is. “This report is being touted as a confirmation of RAD, but that overstates it,” he says. “We know for a fact that in the early days of the program, communication with residents was abysmal, and there continue to be issues.”
And although the Obama administration outfitted RAD with numerous safeguards to ensure that private property managers didn’t price residents out of their apartments or tear down their homes, Gramlich says those safeguards are only as good as the federal oversight that enforces them, and oversight is something that the Trump administration has been less than keen on.
The Rental Assistance Demonstration program does indeed place public resources under private stewardship, and unlike nearly every other Obama-era HUD policy, it has the full support of Trump’s HUD secretary, Ben Carson.
Even under Obama, residents of some RAD-converted buildings reported being pressured out of their homes by management companies during the renovation process. A ThinkProgress investigation, for instance, found that some Philadelphia residents ended up homeless when a construction company remodeled their building and reduced the number of apartments in it; a HUD internal investigation in Mississippi, on the other hand, found that a local housing authority improperly evicted two dozen families during a RAD conversion on the grounds that an official smelled marijuana in their apartments.
The government’s own evaluations also reveal shortcomings: A GAO report on the program from 2016, for instance, said that “HUD needs to take action to improve ongoing oversight” into how RAD affects residents. HUD’s own new report, furthermore, found that one in ten residents still noticed problems like leaks and mold after the private renovations were completed, and that one in four residents didn’t receive financial assistance to help with their moving expenses during construction.
But despite concerns about mismanagement and resident intimidation, many housing officials see the program as the lesser of two evils—better than doing nothing at all.
“There’s just no way to get the money otherwise,” says Joseph Shuldiner, director of the Yonkers housing authority, north of New York City. “You can’t make up for the fact that Congress underfunds the program.” Yonkers has converted nine of its 11 housing projects through RAD, which allowed officials to repair roofs, facades, and water heaters, as well as replace windows, carpets, and appliances.
“We would have held the buildings together with masking tape for as long as we could, but the systems were failing,” Shuldiner says. “We needed $180 to $200 million and we were getting $3 million a year from Congress. You have to fix the buildings first, then you can talk about right and wrong.”
Just because the program hasn’t yet been catastrophic, though, doesn’t mean it never could become so, and Gramlich says the Trump administration so far seems far less interested in protecting residents than its predecessor.
“The Obama administration tapped the private sector because that’s where the money is,” Gramlich says. “The residents were leery, they were fearful of being displaced, but their housing was crumbling around their heads, so they knew something needed to be done. With the current administration, it’s more a matter of ‘we don’t like public things, we like private things.’”
These concerns highlight RAD’s origins as a Band-Aid for the larger problem of congressional inaction. If the political will were there, Congress could easily provide enough funding to restore the country’s public housing to a safe, livable standard. Not only that, but it could also expand assistance for low-income renters: The mortgage-interest tax deduction, which subsidizes homeownership, cost the federal government three times as much money last year as the entire Section 8 voucher program.
But decades of austerity and fear-mongering about urban crime have made renters in general, and public-housing residents in particular, personae non gratae in American politics. It’s that legacy that now forces them to rely on compromise programs like RAD to ensure the safety of the roofs above their heads.
