HUD Expands Housing Preservation Program to Include Senior Housing
In an effort to preserve and improve critically needed affordable housing for low-income seniors, HUD recently announced a significant expansion of its Rental Assistance Demonstration (RAD) to facilitate capital investment in senior housing developments assisted through HUD's Section 202 Supportive Housing for the Elderly Project Rental Assistance Contracts (PRAC).
Expanding RAD to include Section 202 PRAC units will now allow nonprofit housing developers to access capital investment to revitalize their aging properties and to ensure sustainable affordability for their very low-income elderly residents. There are approximately 120,000 units across 2,800 properties that will now become eligible to participate in RAD.
RAD has preserved nearly 150,000 units of affordable housing across the country to date. Other changes to RAD in the notice include:
- Extending and expanding on the stringent resident rights protections built into RAD;
- Allowing a limited contract rent increase for certain converting public housing properties located in Opportunity Zones to help owners access capital for high-impact new construction and substantial rehabilitation investments; and
- Prioritizing conversion of public housing properties located in Opportunity Zones if there’s a waiting list for the limited RAD participation authority.
Under RAD, public housing authorities (PHAs) and other owners of affordable housing convert their developments to a project-based Section 8 platform. This conversion allows PHAs and these owners to identify creative ways to solve their capital needs through public-private partnerships and with no new federal funding. The new, long-term project-based Section 8 contracts fortify the sustainability and long-term affordability of these properties.