Resolution authorizing the submission of the RAD/Section 18 Small PHA Blend Financing Plan to the US Department of Housing and Urban Development (HUD) to convert the public housing subsidy for 101 units at Orness Plaza and at 29 Scattered Site units to Project Based Section 8 rent assistance and certifying an agreement to comply with all requirements of the program.

Adoption of the attached resolution.

As discussed at previous EDA meetings and in the Public Housing Authority (PHA) Annual Plan, the repositioning of public housing has been evaluated. The Rental Assistance Demonstration Program (“RAD”) is authorized by the RAD Statute and the Section 18 Disposition Program is authorized under Section 18 of the United States Housing Act of 1937 (42 U.S.C. 1437p) (1937 Act). RAD and Section 18 Disposition allow Public Housing Authorities (PHAs) to convert public housing subsidies into a long-term, Project-Based Section 8 rental assistance contract. This is beneficial to PHAs because, historically, public housing subsidies and funding for capital projects have been unpredictable and fluctuate annually due to federal budgets. Project-Based Section 8 Vouchers provide a stable and predictable annual subsidy. The repositioning allows the EDA to utilize other sources of financing to fund public housing renovations if and when needed.
 
Staff worked with a RAD Consultant to develop the Financial Plan for HUD, which included a comprehensive needs assessment providing a capital improvement plan, an environmental review, a development budget, and property title work.
 
The Section 8 Project-Based Voucher program will set contract rents at 110 percent of the Fair Market Rent, a considerable increase above current public housing funding. The initial contract will be for a period of 20 years upon approval and renewable for another 20 years. Each project will also be subject to a RAD Use Agreement that runs with the land in perpetuity and will be recorded superior to other liens on the property. This ensures the property will continue to serve low-income families.
 
All residents currently living at Orness Plaza and in the Scattered Site units will have a right to remain in their unit after conversion. They will continue to pay 30 percent of AGI for rent and utilities.
 
Staff recommend the EDA adopt this resolution authorizing the conversion from a public housing subsidy to a Section 8 subsidy under the RAD/Section 18 Disposition program and certify an agreement to comply with all requirements of the program.