The U.S. Department of Housing and Urban Development launched the Rental Assistance Demonstration Thursday to support public and subsidized housing initiatives that lack strong capital support.
In Obama’s upcoming term, RAD should preserve and improve more than 13,000 units of affordable housing, which will generate more than $650 million in private capital to address the $26 billion backlog currently that public housing authorities are currently facing. It is expected that this extra capital will also assist employment in the construction trades across the U.S.
"This innovative and cost-effective approach greatly enhances our ability to confront the decline of our public housing and older assisted housing stock," said HUD Secretary Shaun Donovan.
HUD awarded 112 initial commitments to 68 public housing authorities. Local housing agencies will be able to seek private financing to help renovate these units that are otherwise at risk of being placed outside of the affordable housing inventory.
Additionally, HUD approved the requests of 11 private owners of assisted housing projects to convert and extend rental assistance contracts for 1,100 units. Together, both announcements today will preserve the expected 13,000 units for the next 20 years.
"With the initial implementation of RAD, the Obama Administration has begun to demonstrate that public-private partnership can help preserve our nation's affordable housing and create jobs in the process," Donovan said.