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Perspectives on RAD: Renee Lewis Glover

Thursday, November 6, 2014

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An unresolved and critically important policy issue for the government-assisted housing program is whether as a society we can afford to continue the practice of concentrating poor families and expect different outcomes. All of the research has established that the quality of the environment is critically linked to outcomes, and that economically integrated environments yield substantially better outcomes. The research has also established that concentrated poverty neighborhoods yield externalities such as higher rates of violent crime, failing schools, lower educational attainment, severe disinvestment, poorer health outcomes and a general sense of hopelessness. By implementing Rental Assistance Demonstration (RAD), the Department of Housing and Urban Development (HUD) is not trying to solve the poverty concentration issue, but rather to facilitate a new source of funding to make desperately needed capital improvements. Unfortunately, an unintended but very likely consequence of RAD will be to freeze or lock-in concentrated poverty environments for at least a 20-year period.

I strongly recommend that, to the extent feasible, Congress and HUD incentivize the break-up of concentrated poverty and encourage private real estate professionals to partner with local housing authorities to create mixed-use, mixed-income communities, an important lesson learned and best practice from HOPE VI. It is critically important that we recognize that RAD is only one tool in the toolkit needed to help overhaul the public housing program. Choice Neighborhoods, HOPE VI or similar comprehensive revitalization programs and “gap” funding are critically needed to transform concentrated poverty neighborhoods. Congress must be urged to appropriate sufficient funds for these programs. In the interim, HUD should consider as a qualifying factor whether an applicant community concentrates poverty.

Notwithstanding that local housing authorities are moving forward with RAD in markets where they can, transitioning public housing assisted units from Section 9 to Section 8 cannot, in many cases, be done on a revenue neutral basis. Transitioning the units on this basis will set the wrong expectations with members of Congress and continue the dysfunctional practice of underfunding the public housing-assisted units, despite being converted to the Section 8 platform, which over time will yield the same bad outcomes. Public housing assisted units and RAD- converted units must be financially positioned to operate like real estate.

HUD decided in July 2013 that Moving to Work (MTW) agencies could participate and use their MTW single fund (an administrative block-granting of Section 9 operating subsidy, Section 9 capital funds and Section 8 funds under the MTW agreements) to engage in and facilitate the RAD program. HUD should expand the number of MTW agencies and continue to incentivize MTW agencies to engage in the RAD Program. MTW agencies are important to the success of any HUD initiative because MTW agreements have created 36 (or more) living laboratories that allow creativity, innovation, and nimble action without additional Congressional approvals.

Proactive steps should be taken to simplify the compliance regime for mixed-income, mixed-finance communities by using the low-income housing tax credit regime and protocols, as a single and uniform regime that will satisfy all federal funding source requirements.

Renee Lewis Glover, a member of the BPC Housing Commission, is the board chair of Habitat for Humanity International.