When New York City Mayor Bill de Blasio announced his administration’s plan on May 19 to help dig his city’s public housing authority out of its $16 billion capital-needs hole, attention quickly focused on the plan’s reliance on a controversial initiative with a wonky name: “infill” housing. Infill housing calls for some of the “underused” spaces in public housing projects to be leased out to private developers, who will then be charged with building a mix of low- and market-rate housing on the sites. Among some advocates, the plan has fueled fears that the city is opening the door to privatization.
Yet, even as debate has simmered over infill housing, there has been little discussion about the city’s decision to include another controversial program in its housing plan: the Department of Housing and Urban Development’s Rental Assistance Demonstration program (RAD). RAD will be applied to only some 1,400 of almost 180,000 units, making it an admittedly fractional part of de Blasio’s preservation campaign. But it is being broadly pushed throughout the rest of the country, where housing authorities are equally desperate to find a fix to their budget woes. Similar to the infill solution, it seeks to attract private capital to bail out the nation’s underfunded public housing.
The RAD program is one of the Obama administration’s answers to the dire problem of the United States’s decaying public-housing stock. Most developments were built in the middle of the last century and require repairs commensurate with their age. HUD recently found that the nation’s 1.2 million units need at least $25.6 billion in capital repairs. But Congress has proved unwilling to provide the funds needed to restore a New Deal legacy program that is anathema to the ideology of Republicans and centrist Democrats. The Center for Budget and Policy Priorities has noted that the program’s capital and operating fund “lost 25 percent of its inflation-adjusted value since 2001” (emphasis theirs).
Despite the enormous need to preserve public-housing units amid what Obama’s first HUD secretary, Shaun Donovan, described as “the worst rental affordability crisis that this country has known,” the administration has not attempted to promote adequate congressional funding of the country’s vast repository of public housing. Whether this failure to push for full funding stems from ideological conviction or political expediency is unclear. What is clear is that advocates’ early hopes for a progressive Obama administration approach to affordable housing in general—and to public housing in specific—have given way to the reality of programs like RAD, launched in 2012, which lean heavily on the private sector for relief.
RAD works by allowing public housing units to be transferred over to the Section 8, which relies on partnerships with private landlords. Part of the advantage of Section 8 is that its funding hasn’t suffered as much at the hands of Congress, but it will enable local housing authorities to seek mortgages and other private-sector equity more easily to pay for repairs, and makes Low Income Housing Tax Credits more accessible, thus drawing in private partners to invest in—and potentially own—the units as well.