NYCHA's PACT with HUD's RAD
In the alphabet soup that is public housing, New York City Housing Authority (NYCHA) announced its own version of the Department of Housing and Urban Development (HUD)’s Rental Assistance Demonstration (RAD) called Permanent Affordability Commitment Together (PACT).
The Rental Assistance Demonstration was created by the Obama administration in 2011, giving public housing authorities (PHA’s) a powerful tool to preserve and improve public housing properties. It also addressed the $26 billion dollar nationwide shortfall of funding for housing upkeep.
The program requires units to permanently remain under a project-based Section 8 contract while allowing local housing authorities to mortgage land and buildings, pulling in private capital, which can then be used as tax credits and public funds to provide subsidized rent through Section 8 contracts. [Next City]
In the past 17 years, public funding has met the annual requirements for upkeep in public housing only three times, funding for repairs has been cut by over 50%, according to the Center for Budget and Policy Priorities.
PACT is New York City’s answer to years of cutbacks and, many say, abandonment of the U.S. Department of Housing and Urban Development and one of the city's tools being used to bring the Public Housing back.
Run by NYCHA, PACT generates revenue to reinvest back into the public housing developments using the Section 8 program, ostensibly safeguarding long-term housing affordability, as well as improving and modernizing apartments.
Through RAD, NYCHA was able to secure over $560 million in financing from federal, state, city and private investors. That includes:
$170 million in Low-Income Housing Tax Credit (LIHTC) financing from:
$213 million in New York State Housing Finance Agency (HFA) tax-exempt bonds;
$1.1 million secured via the Investment Tax Credit generated from the solar panels installation;
$194.4 million from FEMA to pay for resiliency measures and repairs (like the power generator complex and the new boilers).
The RAD program requires each state to guarantee the property is owned by a non-profit or public entity, however in New York, NYCHA is maintaining ownership of the property.
PACT is not privatization although a developer will manage the buildings; NYCHA remains the landlord and is able to ensure units stay affordable and tenants’ rights stay intact.
“Our role has shifted more to an oversight role as opposed to a day-to-day management role, and we’re the administrator under the HUD contract,” says Kathie Soroka, a vice president at NYCHA.
In late May 2017, NYCHA issued a request for proposals (RFP) to convert the 1,700 public apartments units in Brooklyn and the Bronx into Section 8 housing.
These RFP’s are the second round of PACT, after the Department of Housing and Urban Development approved the conversion of the Ocean Bay development in Far Rockaway into Section 8 housing in 2015.
Part of the reason NYCHA went with Ocean Bay (Bayside) as its first RAD conversion was the availability of FEMA funds to pay for some of the major upgrades due to the damage from superstorm Sandy.
NYCHA split ownership of the development in Bayside, holding 50% controlling stake with MDG Design and Construction, the lead GC, Wavecrest Management, the new management company, and Catholic Charities of Brooklyn and Queens, and Ocean Bay CDC, serving as resident liaison.
Termination of the 99 year lease automatically reverts ownership of the development back to NYCHA.
According to Bronx Councilmember Ritchie Torres, PACT is “the best opportunity to save public housing for future generations. NYCHA is at a crossroads and it must either adapt to the changing federal landscape and funding streams, or risk losing buildings to decay,” he said. “The Rental Assistance Demonstration Program provides much-needed investments while allowing NYCHA to retain ownership of land and buildings.”
As with most policies coming from City Hall, there are growing concerns regarding private ownership of the buildings, including displacement, rent protection, and the right to occupancy.
HUD maintains current residents will have the right to occupy completed RAD projects without rescreening, but Baltimore advocates say those promises have not been adequately articulated through firm tenant protections, arguing that “people feel they’ve been talked to and not had the opportunity to participate in a meaningful way.”
In a video from one of the protests, Sharon Jones, president of the tenant council of Bel Park Tower tells the crowd, “We want to be able to live in these places. We don’t want to be sent out. We don’t want to be stepped on. We don’t want to be told that everything is going to be alright and the whole time you’re running over us … .”
This website seeks to provide a starting point for tenant advocates to learn about RAD conversions and how to secure enforceable tenant protections in their jurisdiction, using examples and lessons learned from communities nationwide and highlighting several areas for continued attention and advocacy.
Advocates who have not yet been involved in RAD in their local jurisdictions should consult both the HUD RAD website and RAD-watch.org for the latest information about RAD conversions in their area.
National Housing Law Protection (NHLP) created the following resources to assist tenant advocates and legal services attorneys who may want to become involved in their local RAD conversions