July 3, 2018

Community Developments: HUD Announces Several Changes to Its RAD Program

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Community Developments

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Programming Note: Community Developments will not run on Wednesday, July 4. We wish you a happy and safe 4th of July!

  • Earlier today, HUD officially published two notices in the Federal Register implementing a number of changes to the Rental Assistance Demonstration (RAD) program’s new authority in the Fiscal Year 2018 Appropriations Act. The RAD program converts public housing properties to project-based Section 8 contracts that can leverage private capital and financing. In the first notice, HUD announces that it will increase the program’s statutory cap from 225,000 units to 455,000 units as of January 1, 2019. The notice also modifies the process under which HUD sets initial contract rents for awards made pursuant to this expansion of RAD, simplifies the process to withdraw and replace existing awards for public housing agencies (PHAs), and indicates what steps PHAs must take to reserve their position on the RAD waiting list if they have already submitted letters of interest. The second notice expands the ability of PHAs to rent bundle project-based voucher contracts that are both in and outside of the RAD program, permits PHAs to establish project-specific utility allowances for covered projects, provides alternative developer fee limits when a PHA has a waiting list preference for families exiting homelessness, and creates a streamlined conversion option for PHAs with a housing portfolio of 50 or fewer units. (Novogradac & Company, July 2) 
  • According to an article in Curbed San Francisco, Californians will vote on a number of housing ballot measures this November. These measures would: allow the state to take out a $4 billion housing bond, most of which will go toward creating affordable housing; expand local governments’ ability to enact rent control on newly constructed multi-family properties –  the present law allows enforcing rent control only on housing stock built before February 1995; and enable homeowners over the age of 55 to take their existing property tax rate into a new home, with the goal of encouraging older owners to move out of larger empty nest homes to free up these units for families with children. (Curbed San Francisco, July 2) 
  • The city of Denver is considering adopting anti-discrimination legislation that would ban landlords from discriminating against tenants who pay their rent using HUD’s housing vouchers. Denver City Councilwoman At-large Robin Kniech has introduced a bill that would require landlords to accept all forms of payment, exempting landlords of owner-occupied duplexes and single-family homes. The bill would impose discrimination penalties that range from an order to end discriminatory practices and make the unit in question/a similar unit available, to a fine up to $5,000 and/or an order to pay possible damages, such as the cost of a hotel stay. (Next City, July 2) The city of San Diego is also considering legislation that would prohibit landlords from rejecting applicants because they use federal housing vouchers to help pay their rent. (The San Diego Union-Tribune, July 2)
  • CoreLogic has released its Home Price Index (HPI) data for May 2018, which show that home prices are up both year-over-year and month-over-month by 7.1 and 1.1 percent, respectively. The CoreLogic HPI Forecast indicates that home prices will increase by 5.1 percent between May 2018 and May 2019. According to the index, states with the highest year-over-year increases in May were Washington (12.8 percent), Nevada (12.4 percent), Idaho (11.2) and Utah (10.9 percent). (CoreLogic, July 3) 

In Case You Missed It

  • Recently released research reports have re-emphasized the national shortage of affordable housing, as well as strategies to address this challenge have been released. The Enterprise Policy Development & Research team’s new white paper, Proven Local Strategies for Expanding the Supply of Affordable Homes and Addressing Cost Challenges, draws on the successes of some of the country’s most expensive cities to offer options for communities working to address the scarcity of affordable homes and the rising cost of development. The Joint Center for Housing Studies at Harvard University has released the State of the Nation’s Housing 2018, which shows that 20.8 million renter households were cost-burdened in 2016, paying more than 30 percent of their income on housing, and nearly 11 million of those households were severely cost-burdened, paying more than 50 percent of their income on housing. Finally, the National Low Income Housing Coalition’s (NLIHC) has issued Out of Reach 2018, which documents the gap between wages and the cost of rental housing across the country.

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