Terner Center Blog: No Limits

Lessons for the Future of Public Housing: Assessing the Early Implementation of RAD

Posted on by Carolina Reid

In its 2018 budget, the Trump Administration is proposing to slash public housing funding by $1.8 billion. This cut represents a 29 percent decline from 2017, and will compound a longstanding trend of underinvestment in public housing and worsen an already dire situation.

Over time, these shortfalls in federal funding have resulted in a $26 billion backlog in needed repairs, leaving many residents in public housing units across the country with untenable living conditions and a precarious housing future. In addition, every year we lose valuable units of public housing to demolition because of this lack of investment: HUD reports that between eight and fifteen thousand units are demolished due to obsolescence every year.

The Rental Assistance Demonstration (RAD) program, authorized by Congress in 2012, aims to address the problem of underinvestment in public housing. Under RAD, Public Housing Authorities (PHAs) convert their units to either Project Based Voucher (PBV) or Project Based Rental Assistance (PBRA) contracts, which allows them to leverage new financing sources like debt, tax credits, and state and local housing trust funds to invest in unit rehabilitation and operation.

RAD thus represents a significant departure in how public housing has historically been financed and managed. Today we are releasing a report that explores the early implementation of RAD. Drawing on more than twenty-five interviews with Public Housing Authorities and other organizations across the country who have been engaged in RAD, the study presents some of the early successes and best practices emerging in localities, highlights challenges they have faced in implementation, and makes recommendations for RAD going forward.

The most resounding finding is just how bad conditions in public housing in many cities really are, and the urgent need for a funding stream that allows PHAs to reinvest in their units and properties. For too long, public housing residents have been living in unsafe and unhealthy conditions, “putting up” with rodent and roach infestations, leaky roofs, and broken sewer systems because there has been no other choice. RAD has allowed local PHAs, in partnership with city governments and nonprofits, to make massive investments in the local public housing stock for the first time in decades. Additionally, we find that RAD allows for flexibility so that PHAs across the country facing different pressures and conditions are able to adapt and use the program to meet the needs of their housing market.

We also find that, in comparison to past efforts to redevelop public housing such as HOPE VI, RAD contains significant tenant and affordability protections. One of the most important of these is the “right to return,” ensuring that public housing residents will not be displaced as a result of RAD conversion. Still, we find that local implementation of these protections matters, and in many cities, active tenants’ rights organizations have worked with PHAs and city governments to strengthen tenant protections and to minimize the impact of relocation on residents’ lives. As we discuss in the report, additional research and monitoring is needed to ensure that PHAs undertaking RAD meaningfully engage tenants in the process, and that the conversion does not lead to negative impacts on residents either during relocation or over the long-term.

While these findings are promising and point to RAD’s potential as a pathway for ensuring the future of the U.S. public housing stock, current budget proposals undermine its viability. Though RAD represents a new financial model that effectively leverages private funding -- making each public dollar go further -- the model doesn’t work if the public resources aren’t there. RAD still relies on Congressional appropriations for public housing, as well as on other sources of affordable housing funding such as the Section 8 voucher programs and the Low Income Housing Tax Credit.

Absent sufficient funding, the options for stable housing for our most vulnerable citizens will continue to decline. As the public debate over the federal budget intensifies, it is imperative that policymakers are well informed about this important program and ensure its continued improvement and success.

Paying For Dirt: Where Have Home Values Detached From Construction Costs?

Posted on by Terner Center

Home prices reflect the value of the land and the value of the structures and other improvements on that land. In high-cost metro areas of the United States, the exorbitant cost of a house may not seem to be justified by its appearance, suggesting that homebuyers are paying a premium for their location. In a recent blog post “Paying For Dirt: Where Have Home Values Detached From Construction Costs?,” Issi Romem, Chief Economist at BuildZoom investigates the disparity between the appearance and price tag of homes, identifying the places in which home buyers pay mostly for the location. The main…

Richard Rothstein Lecture on The Color of Law at the Terner Center

Posted on by Terner Center

On Thursday, September 28, the Terner Center, in partnership with the UC Berkeley Department of City and Regional Planning, hosted Richard Rothstein, author of The Color Of Law: A Forgotten History Of How Our Government Segregated America. Rothstein spoke to a standing-room only crowd in Wurster Hall about the legacy of the many government policies that fueled segregation in American cities for decades, and discussed the implications of his research with Terner Center Faculty Director Carol Galante. We invited Rothstein to provoke our collective thinking about important, challenging, and uncomfortable issues in housing policy. We believe it is critical to…

From Small Steps to Giant Leaps: What Must Come Next for the California Housing Agenda?

On Friday, September 15th, the California Legislature approved a package of 17 bills aimed at putting a dent in the state’s housing crisis. While the votes came down to the wire, in the end, the need for solutions won the day, and in the coming weeks the Governor is expected to sign each piece of legislation, officially ushering in the most significant housing policy changes in recent memory. You can read our recap of these bills in an earlier blog post here. Drafting, amending, defending and eventually passing these bills was no small feat, and the legislature, the Governor and…

California Steps Forward for Housing

Posted on by David Garcia and Carol Galante

On Friday, September 15th, the California legislative session ended with the passage of 17 individual pieces of legislation aimed at alleviating the state’s ongoing housing crisis. While three particular bills have received the most attention—SB2, SB3, and SB35—several other bills headed for the Governor’s desk are also likely to have an important impact on the landscape of the state’s housing policy. We have compiled a brief overview of each bill that passed, organized into policy categories. While the passage of these newly approved policies is certainly a milestone, we also know there is much more work ahead. Stay tuned for…

Legislation for Information: Sacramento’s Role in Filling Housing Data Gaps

Posted on by Carolina Reid and Echo Bergquist

As California’s lawmakers return to Sacramento next week, it is worth paying attention to current legislative efforts to improve access to data that can inform our understanding of the state’s housing crisis. While the final package of housing legislation is still to be determined, some of the original bills -- including SB 35, AB 1397, and AB 879—have the potential to improve housing data quality throughout California.   Why focus on data?  Despite the severity of California’s housing crisis, and the importance of the housing sector to the overall health of the state’s economy, we lack basic data on many…

Modular Construction in the Bay Area: The Future is Now

This post originally appeared on the ULI San Francisco Blog on August 2, 2017. After years of abstract discussions and false starts, modular building may finally be gaining the momentum it needs to make an impact in the Bay Area. Why now? And why here? On Tuesday, July 18, the San Francisco District Council of the Urban Land Institute hosted “Modular Construction in the Bay Area: The Future is Now”, an event moderated by Terner Center for Housing Innovation Faculty Director Carol Galante. The panel discussion featured four leaders committed to bringing this innovative housing method to scale in the Bay Area: Developers Rick Holliday of Holliday…

Too Big to Hide: The Importance of Public Data on the Mortgage Market

Posted on by Carolina Reid and Echo Bergquist

Fair lending is the foundation of a thriving economy, both locally and nationally. Access to credit drives home purchases, revitalizes neighborhoods, and allows families to build wealth for future generations. Since the financial crisis, however, tighter credit standards have made it increasingly difficult to obtain a mortgage, especially for low-income and minority borrowers.  A key challenge facing policymakers is how to reform the housing finance system in a way that provides access to credit for a broad range of households, yet at the same time ensures that homeownership is sustainable over the long-term.  Striking this balance is critical, not only…

Jumpstarting the Market for Accessory Dwelling Units

This post originally appeared on the Berkeley Blog on May 23, 2017. It shares insights from our recently released report Jumpstaring the Market for Accessory Dwelling Units: Lessons Learned from Portland, Seattle and Vancouver.   ADU permitting explodes: Permits as a share of all residential permits. How did Portland, Oregon go from permitting two accessory dwelling units (ADUs) per month in 2009 to almost two per day in 2016?  Now, more than one of every ten housing units built in Portland is an ADU. Compared to other housing types, ADUs, or separate small dwellings embedded within single family properties, are…

Highlights from the Terner Center Promoting Affordability Conference

Though U.S. cities like Boston, New York, San Francisco and Los Angeles are important engines of the American economy, their rapid growth in jobs and populations has not been met with a comparable pace of growth in housing. The result? Increasing pressure on both the rental and for-sale housing markets, and skyrocketing costs of living for a larger and larger proportion of the people who live in these cities.  On Thursday June 1, the Terner Center hosted a special convening intended to delve into this issue, exploring solutions to that could help expand the supply of housing, lower the cost…