Thank you all for joining today.
It's very exciting to be able to announce the first stages of our Rental Assistance Demonstration or RAD.
The Administration created RAD as a comprehensive and innovative strategy that offers a long-term solution to preserve and enhance the country's vital affordable housing stock.
Many of the nation's public housing apartments are already buckling under a capital needs backlog of $25.6 billion. In a tightened budget environment, public housing owners now must make tough choices between repairing roofs and replacing plumbing -- or worse, demolishing units altogether -- because there simply isn't enough money to go around.
We just cannot afford to keep losing 10,000 to 15,000 units of affordable housing a year -- leaving our most vulnerable families at risk.
This capital needs backlog is compounded by antiquated financing regulations, which prevent investment or financing by anyone other than HUD -- meaning these repairs are dependent on HUD's own budget.
The Rental Assistance Demonstration will allow both Public Housing Authorities and private owners of some assisted housing to preserve the affordability of and make necessary capital improvements to their housing stock by accessing new private funding sources.
By finding ways to get private capital off the sidelines and back into our communities RAD is a model of smart government.
Allowing PHAs to convert their currently-available public housing subsidies to long-term Section 8 contracts they will enable them to raise millions of dollars of necessary debt and equity investments the same way private owners of Section 8 housing have done for over 40 years.
PHAs receiving these awards will use RAD Section 8 contracts to accomplish a range of local objectives, such as modernizing aging properties for families and the elderly, including energy-retrofits to save on energy cost, reducing the densities of larger, troubled projects, and demolishing severely distressed or obsolete units and constructing new replacement units on a one-for-one basis.
Private owners of certain types of assisted housing with expiring subsidies will be able to convert their existing rental assistance to new long-term Section 8 contracts that will preserve and recapitalize this valued form of housing as well.
This new initiative is expected to generate over $650 million dollars in private debt and equity investments at no cost to taxpayers by using proven financing tools currently available to other types of assisted housing.
Over $400 million in this additional capital is expected to be generated through Low Income Housing Tax Credits. Two or our national partners in helping generate these investments--Enterprise Community Investments and the National Equity Fund--are with me on today's call.
RAD will also create a sense of stability because the demonstration will guarantee a reliable funding stream through a long-term Section 8 contract with owners and PHAs.
It also builds a community that is invested in the success of our public and affordable housing and ensuring that these units are no longer isolated from the market rate housing in the neighborhoods that surround it.
The response to this initial 30-day application period has been very encouraging -- PHAs have applied for over 12,000 units of conversion authority. We also received applications from private owners for over 1,000 units.
Our next step is to work with these applicants to finalize their financial commitments so they can begin addressing their capital concerns.
At the same time, we are going to continue to work with new applicants going forward to increase the total number of units we are able to preserve and improve using this demonstration.
To that end, I've already spoken with several of our key partners in Georgia today. Going forward, we will work closely with them to ensure that we are addressing any implementation concerns as well as developing best practices for new applicants.
The Obama Administration is incredibly hopeful that this 21st Century approach to public and assisted housing finance will preserve these first units, and many more, for years to come.
With that, I'll turn it over to Preston Prince, from the Fresno Housing Authority, to talk about this initiative from a local perspective.