Tom Davis Slides - NH&RACHAP Award Pending CHAP Awarded Financing Plan Submitted RAD Conversion...
Transcript of Tom Davis Slides - NH&RACHAP Award Pending CHAP Awarded Financing Plan Submitted RAD Conversion...
Rental Assistance Demonstration (RAD) Update
Presented by Tom Davis, Director
Office of Recapitalization, HUDFebruary 22, 2016
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The Problem• Deferred public housing capital repair needs. 2010 estimate in excess of $25.6B
across the portfolio (>$23k per unit) and rising
• Public housing platform creates barriers to accessing private capital
• 10,000-‐15,000 public housing units lost each year
• Multifamily “legacy” program properties also at risk
The Solution – Changing the Regulatory Platform• RAD created in FY2012, expanded in FY2015
• Allows public housing to convert on a budget-‐neutral basis to long-‐term Section 8 Housing Assistance Payment (HAP) contracts
• Also allows at-‐risk legacy assisted properties to convert to Section 8 HAP contracts
• Leverages private investment to address capital needs, improving conditions for residents, creating jobs and stabilizing the assisted portfolio
Background on RAD
Background
RAD Program Status Report 2/16/2017
27,8
84
7,10
8
70,2
55
9,39
6
12,2
03
58,1
54
Status of units under RAD cap185,000 units
Reserved Authority for Multiphase orPortoflio Projects
CHAPAward
Pending
CHAPAwarded
FinancingPlan
Submitted
RAD Conversion
Committment (RCC) Issued
Closed
0 812
195
48
7,69
1
4,34
3
2,25
0
2,81
2
RAD Waiting List
Pre-7/28/15 T ier 2 T ier 3 T ier 4 T ier 5 Priority Undet
Total:18,151
Appl ications received prior to 7/28/15 will be awarded CHAPs on a first come first serve basis. All applications after that d ate are sorted into priority tiers in the categories defined in the RAD Notice, with Tier 1 as the highest priority (deepest investment). Applications that have not yet been sorted into a tier are l isted as
Tier 1
$3.90B
Construction Investment in Closed Transactions
No Priority
RAD Public Housing Conversions – Status
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$3.9 Billion(>$67K per unit)
in construction investment in RAD properties. This
doesn’t include items such as acquisition, soft costs, reserves &
developer fee
58,154 units converted.
≈18,000 units on the waiting list.
Public Housing Conversions
PH Conversions – Program Growth
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NOTE: FY2017 data from RAD 1 closed transactions only through February 16, 2017.
Public Housing Conversions
• Steady growth in conversionsyear to year
• Major process changes improved cross-‐silo coordination and sped processing times
• Interim evaluation by Econometrica, published September 21, 2016, found:– Proof of concept– 9:1 leverage ratio
• Full evaluation in 2018 will address additional issues including residents’ experiencesand satisfaction
PH Conversions – Investment & Financing
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Closed Transactions byLevel of Investment
Closed Transactions by Financing Type
NOTE: Percentages derived from RAD 1 closed transactions only through January 5, 2017.
Public Housing Conversions
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Note: This data reflects the regional breakdown of RAD public housing applications (“projects”) received compared to the number of existing public housing projects in each region.
19%
19%
24%
8%**13% excluding NYC
Public Housing Conversions
Public Housing Universe
RAD
PH Conversions – Relative DistributionRAD Pipeline as a Percentage of the Total Public Housing Inventory by Region
Participating PHA Size in RAD Pipeline Compared to PHA Size in Total Public Housing Inventory
Legacy Program Conversions – Status
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Rent Supp/RAP Transactions:• 62 properties remaining in portfolio• 45 active transactions in the
RAD 2 Pipeline• 49 properties have contracts that
expire in 2017• We hope to sunset the Rent Supp &
RAP programs in the next few years
Mod Rehab Transactions:• 9 active transactions in the
RAD 2 Pipeline• 3 applications in process
• Substantial opportunities for Mod Rehab properties
NOTE: Data derived from RAD 2 closed transactions only through January 5, 2017.
Legacy Program Conversions
Conversions & Outstanding Pipeline
2016 Notice Revisions
8Public Housing Conversions
• RAD Fair Housing, Civil Rights & Relocation Notice– No change in underlying fair housing rules from those established in the June, 2015, Rev-2 of the RAD Notice;; modest changes in timing of fair housing requirements
– Front-end fair housing review is a risk-based analysis– Fair housing portions of the Notice provided clarity and transparency to FHEO review– Substantial changes in the relocation requirements designed to facilitate relocation implementation, to provide greater clarity and to enhance resident protections
• RAD Notice Revision 3 – Public Housing Portion– Conform with HOTMA (remove cap on the percentage of PBV units on a site)– Modest changes to underwriting requirements (use of proceeds, developer fee limitations, close-out expenses for full-portfolio conversions)
– Simplify eligibility and application procedures – on hold due to Executive Order– Clarify expectations around communication with residents, prohibition on rescreening for
existing residents, rent phase-‐in and waiting list transfer arrangements
• RAD Notice Revision 3 – Legacy Program Conversions– Revise rent setting provisions
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2016 PD&R Interim Evaluation• HUD’s Office of Policy Development & Research contracted Econometrica,
Inc. to evaluate RAD. Interim Report, published September 21, 2016, finds:
• “Proof of concept” based on closings as of October, 2015.
• RAD transactions demonstrate a leverage ratio of $8.90 for every $1.00 of public housing funds invested
• 20-‐year projections comparing RAD scenario with counter-‐factual scenario absent the RAD conversion shows that all four case studies perform better under RAD
• Full evaluation, planned for December, 2018, will address additional issues including residents’ experiences and satisfaction. Interim report data did not include a sufficient number of completed transactions to adequately examine post-‐completion outcomes and impacts.
Interim Evaluation
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Office of Recap Structure
Director Tom Davis
Affordable Housing Transaction DivisionGreg Byrne
Closing & Post-Closing DivisionBev Rudman
Program Administration OfficeWill Lavy (Acting)
Branch 2(RAD 2, 236s, Mark-to-Market)Minnie Monroe-
Baldwin
Branch 3(RAD 1st
Component)Harry West
Branch 1(RAD 1st
Component)Alan Kaufmann
Branch 4(RAD 1st
Component, Post-Mark-to-Market)Kara Williams-Kief
Senior Advisors
Public and Indian Housing (PIH) • Public Housing • Housing Choice Voucher
Fair Housing & Equal Opportunity (FHEO)• Civil Rights and Fair
Housing
Community Planning and Development (CPD) • Relocation
In Coordination With:
Office of General Counsel (OGC) • Legal Review
Thank You.
For evaluation materials, visitwww.huduser.gov/portal/RAD_Evaluation.html
For more information and case studies visit www.hud.gov/rad
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