New Albany Housing Authority Rental Assistance Demonstration - January 2016 Update
RAD converts Public Housing funding to Section 8 funding. There are no additional funds available as part of the demonstration. The process is cost neutral. NAHA receives an average of an approximate average subsidy of $4,500 per year for each of 1,082 units in inventory (includes operating and capital funds).
- The RAD conversion process includes the following steps: application, reservation of demonstration slots, physical needs assessment, financing plan (proof of funds or leverage attempt) to insure future viability of each site, termination of Public Housing Annual Contribution Contract, completion of 20 year Section 8 Project Based Voucher Contract.
- Why RAD if no additional funds are available?
Both Public Housing and Section 8 are subject to annual Congressional Appropriations, funding for Public Housing has been appropriated at 82 to 89% of full funding while Section 8 has been 100% funded. In addition, Section 8 payments have an annual average adjustment factor 2% increases each year.
Outside funding sources, including Federal Home Loan Bank, Tax Credit Equity Investors, and Commercial Lenders understand Section 8 subsidy payments, but not public housing formula funding.
Section 8 has a streamlined processing in terms of reporting, lease-up, inspections, rent calculation, and administration.
How does NAHA plan to develop their properties under the RAD?
The long term plan is to deconcentrate the number of units at Parkview Terrace by seeking additional sites for development. HUD is requiring a one-for-one replacement of all public housing units. Future replacement is dependent on gaining 9% tax credits for construction projects.
In addition, we have analyzed the needs of low-income residents in the community and determined that some of the larger 3 and 4 bedroom units should be replaced with 1 and 2 bedroom units. This would reduce the total number of persons living at this site as well.
NAHA has received a phased in portfolio award to convert all 9 projects to project based section 8 units.
We currently have the following units in the process of conversion:
- Broadmeade – 44 units will be demolished near the Brown Starks building. This area will presently be converted to green space. Anticipated completion date: May 1, 2016.
- Crystal Court – 24 units are converting. Anticipated completion date: April 1, 2016.
- Riverside Terrace – 120 units are converting. Anticipated completion date: July 1, 2016.
- Mark Elrod – 101 units are converting. Anticipated completion date: July 1, 2016.
- Valley View – Returning 40 vouchers to the Section 8 program and using RAD funds from Broadmeade to subsidize Valley View. The vouchers will go to private landlords.
This phase will reduce the total number of units at Parkview Terrace from 442 family units to 398 units (a 10% reduction of family units at this site) during the next 6 months. Residents will be relocated by closing the wait lists and moving to units that become vacant. The Pilot demonstration implementation phase has resulted in nearly 30% of NAHA stock being processed during the first two years. Now that the Demonstration is fully implemented we project the final 70% of the housing stock will be converted in less than 12 months.