Rental Assistance Demonstration

Transcription

1 Rental Assistance Demonstration NERC NAHRO Newport, Rhode Island Gregory A. Byrne Gregory.A.Byrne@hud.gov

2 HISTORY February 2010: FY11 Budget requests $350m for Transforming Rental Assistance (TRA) initiative May 2010: Preservation, Enhancement, and Transformation of Rental Assistance Act of 2010 (PETRA) Administration s bill December 2010: Rental Housing Revitalization Act (RHRA) introduced by Rep. Ellison and Co Sponsors February 2011: FY12 Budget requests $200M for a Rental Assistance Demonstration August 2011: RAD language submitted as Technical Drafting Service (TDS) to Rep. Ellison, Rep. Bachus, and Senator Shelby November 2011: FY 12 Appropriations minibus authorized RAD 2

3 RAD GOALS Builds on the basics of preserving affordable housing Long term stability Access to safe, proven tools to leverage private capital Long term affordability More resident choice mobility Effective public ownership stewardship 3

4 CONTEXT FY12 Rental Assistance Demonstration (RAD) Allows selected Public Housing and at risk assisted Multifamily legacy (orphan) programs to convert to long term Section 8 Housing Assistance Payment (HAP) contracts Public Housing Capital repair needs in excess of $25.6B across portfolio Section 9 funding platform has proven unreliable and prohibits access to private capital investment Section 8 Moderate Rehabilitation (Mod Rehab) Cannot renew on terms needed to attract capital Rent Supplement (RS), and Rental Assistance Payment (RAP) No option to renew when contracts expire 4

5 RAD CONVERSION AUTHORITY Public Housing & Mod Rehab top of the bill 2 options Can compete to convert to: Project Based Rental Assistance (PBRA), or Project Based Vouchers (PBV) Cap of 60,000 units Convert at current funding only New choice mobility component Extensive waiver authority 3 year conversion authority 5

6 RAD CONVERSION AUTHORITY Orphans bottom of the bill 1 option Applies to Mod Rehab, RS and RAP Upon contract termination/expiration, can convert Tenant Protection Vouchers (TPVs) to Project Based Vouchers (PBVs) No cap, but subject to annual appropriations of TPVs Choice mobility built into PBVs Limited exemption/waiver authority 2 year prospective authority Retroactive conversion authority to 10/2/06 6

7 RAD CONVERSION AUTHORITY Public Housing Mod Rehab RS & RAP Cap of 60,000 Units No Cap TPV Availability PBRA PBV PBV 7

8 PUBLIC HOUSING & MOD REHAB CONVERSIONS TOP OF THE BILL Application & Selection Statutory Components Demonstrate feasibility in different markets and geographies, PHA sizes, and leverage sources Voluntary Properties selected competitively upon application Public comment on eligibility and selection procedures Resident comment on proposed property conversions Cap of 60,000 units for public housing and Mod Rehab (no cap on Mod Rehab contract expirations that convert TPVs to PBVs) Applications through 9/30/2015 No incremental funding (transfer existing funds only) 8

9 PUBLIC HOUSING & MOD REHAB CONVERSIONS TOP OF THE BILL Contracts & Post-Conversion Terms Statutory Components Option of PBRA or PBV contract Long-term renewable use and affordability restrictions Public or non-profit ownership or control for PH only; except for-profit ownership to facilitate tax credits, or in event of foreclosure/bankruptcy possibility of for-profit disposition Retain public housing tenant/applicant rights No tenant re-screening or termination of assistance as a result of conversion Public Housing Section 18 Demo/Dispo application not needed for conversion of substantially all units Requirements for assistance established through contracts, use agreements, regulations, etc Waiver authority of PBV, PBRA, Operating Fund, Capital Fund Evaluation 9

10 ADDITIONAL CAPITAL SOURCES Public Housing Prior year funding Unobligated Capital Funds Operating Reserves Recommit Replacement Housing Factor Funds Other Public FHA: 223(f) mod rehab; 221(d)(4) construction/permanent for more extensive; Risk Sharing CDBG, HOME, NSP program income CDFI: new Bond Guarantee Program LIHTCs Private Debt Grants FHLBB AHP 10

11 CHOICE MOBILITY COMPONENT T HUD report language affirmed importance of goal Stakeholder input: require choice mobility on PH and Mod Rehab conversions with good cause exemption PBVs currently require Extend to PBRA conversions Flexibility 11

12 PUBLIC OWNERSHIP OR CONTROL Applicability to Section 9 (Public Housing) only Public or nonprofit ownership or control required (open to partnerships, affiliates) Except LIHTC partnerships Foreclosure, bankruptcy, termination for cause transfers, then disposition to capable o Public entity o Other entity (non profit, for profit) determined by the Secretary 12

13 IMPACT ON PUBLIC HOUSING 60,000 units, ~5% of public housing inventory ~220, ,000 units could potentially convert at current funding* Ultimately converted projects ~ $380 million in current PH funding and ACC units to be transferred to PBRA or TBRA account PBRA HAP conversions shifted to Office of MF Programs * Defined as able to leverage sufficient debt at current funding levels to meet the average regional capital need in the Capital Needs Assessment 2010 (Abt. Associates). Estimate assumes debt only and does not account for the use of other forms of capital. 13

14 CURRENT FUNDING CONVERSION RENT LEVELS ACC Section 8 14

15 EXAMPLE: CONVERSION WITH CURRENT FUNDING Sample AMP Units 53 Average Bedroom Size 3.8 BR FMR (less utility) $696 Current Funding Per Unit PUM Operating Fund $3,464 $240 Capital Fund $2,079 $173 Tenant Payments $3,120 $260 Total Current Funding $8,663 $673 Current Funding is: 97% of FMR Project Pro Forma Capital Sources and Uses Project Pro Forma Total PUM Uses Total Per Unit Gross Potential Rents $ 428,187 $ 673 Immediate capital needs*** $ 1,060,000 $ 20,000 Adjustments to GPR* (12,846) (20) Initial Capital Reserve Deposit 26, Effective Gross Income $415,341 $653 Financing Fees (4%) 43, Total Uses $ 1,129,960 $23,541 Operating Expenses (292,560) (460) Annual Reserve Deposit (31,800) (50) Sources Total Per Unit Net Operating Income $90,981 $143 First Mortgage Proceeds $ 1,012,000 $ 21,083 Total Sources $ 1,012,000 $21,083 Available for Debt Service** (75,818) (119) Cash Flow Total $15,164 $24 Capital Surplus/(Deficit) ($117,960) ($2,458) * Assumes 3% vacancy loss, 2% bad debt loss, and 2% proceeds from other income ** Terms: 6.25% loan, 0.045% MIP for 35 years at 1.2:1 DSCR ***Immediate capital needs equivalent to 10 years of Capital Fund grants 15

16 CURRENT FUNDING RENT ADJUSTMENTS Top of the bill Public Housing & Mod Rehab Initial long term contracts Adjustment only by an operating cost factor established by the Secretary Bottom on the bill RS, RAP & Mod Rehab Standard PBV contract Current funding to convert is TPV or TBRA level Subject to standard PBV rent adjustments (rent reasonableness standard) 16

17 RS & RAP CONVERSIONS BOTTOM OF THE BILL Current: At contract expiration, HUD normally issues TPVs to tenants in RS, RAP properties ~8,000 likely units* out of ~24,000 unit inventory RAD: In lieu of TPVs, makes projects eligible for conversion to PBVs Requires PHA agreement and resident consultation Does not count against PHA s 20% PBV program cap Secretary may waive property income mixing requirement No cap on units that convert assistance, but subject to annual appropriations/availability of TPVs * Includes FY12 and FY13 projected conversions as well as projected retroactive estimates 17

18 MOD REHAB CONVERSIONS TOP & BOTTOM OF THE BILL OPTIONS Current: Owners renew on 1 year contract terms. When owners opt out, HUD normally issues TPVs ~25,000 unit inventory RAD: Effectively 3 options Allows no cost conversion to PBRA or PBV (like public housing) Counts against 60,000 unit cap In lieu of TPVs, makes projects eligible for conversion to projectbased vouchers (like RS/RAP) Rents at Tenant Based Voucher levels (market) 18

19 NOTICE & APPLICATION SEQUENCE Sequence Proposed Notice Released for Departmental Clearance OMB Review & Clearance Proposed Notice Published in Federal Register Public Comment Period Final Program Notice Published in Federal Register Application Window Relative to RS, RAP, Mod Rehab Expirations TPVs to PBVs Review & approve as submitted Application Window Opens (after review period) Public Housing & Mod Rehab competition Initial Awards Public Housing & Mod Rehab 19

20 RAD WEB PAGE 11/29/2011 Internal Draft 20