Rental Assistance Demonstration | Housing Authority of the City of Milwaukee, WI

What is RAD

Across the country and here in Milwaukee, the public housing inventory is aging, becoming obsolete with an increasing backlog of needed repairs. Despite the immense need to preserve public housing units, Congress has reduced funding for these repairs by 24% over the past decade. The Housing Authority of the City of Milwaukee’s (HACM) backlog of non-emergency property maintenance needs were assessed at over $198 million during a review by a qualified third party contractor in 2014. With existing capital funding levels, it would take over 44 years to repair HACM’s existing backlog. Therefore, HACM changed direction towards a new initiative that would help address this serious problem.

HACM decided to pursue a voluntary program called the Rental Assistance Demonstration (RAD) program. RAD was created by the U.S. Department of Housing and Urban Development (HUD) and endorsed by Congress in order to give public housing authorities a powerful tool to preserve and improve affordable housing and to address the large backlog of needed repairs. RAD allows HACM to leverage public and private debt and equity in order to reinvest in the currently aging and deteriorating public housing stock.

Under RAD, units change from Section 9 public housing to Section 8 project-based vouchers (rent assistance) under a long-term contract between HACM and HUD. For low-income residents and households, this ensures that units remain permanently affordable to the individuals most in need. In addition, the RAD conversion process will:

Stabilize funding
Create access to private capital
Streamline HUD programs
Enhance housing options for residents

Learn More About RAD

Information for Residents

The transition to RAD will produce positive change for current and future residents while protecting preexisting rights and participation. For example:

Most residents will not have rent increases as a result of RAD. Rent contributions will remain no more than 30% of the household’s adjusted gross income. In special occasions like flat renters, residents may see a modest increase that is adjusted over a three year period.
Despite the RAD conversion, housing assistance will continue to be provided to residents. In addition, residents will not be required for a re-screening process.
Some buildings may require repairs and renovations. If minor repairs are needed, residents will be able to remain in home during construction. However, some apartments and buildings will need more extensive rehab. In these situations, residents will be supported as they temporarily relocate, but will have the right to return once construction is completed. Temporary relocation should not exceed 12 months.
RAD enhances housing options for residents through the RAD “choice-mobility option.” Once granted the housing choice voucher, individuals will receive rental assistance that can be used in the private market across the country.

HACM’s Portfolio Conversion Timeline

Timeline accurate as of November 11, 2019
Development Name	Estimated Conversion (Subject to Change)
Arlington Court	After 2022
Becher Court	May 2020
Cherry Court	Converted - April 2018
College Court	After 2022
Convent Hill	Converted - June 2018
Highland Gardens	Converted - June 2018
Highland Homes	After 2022
Hillside Terrace	After 2022
Holton Terrace	Converted – July 2019
Lapham Park	Converted - March 2018
Lincoln Court	After 2022
Locust Court	After 2022
Merrill Park	November 2019
Mitchell Court	After 2022
Olga Village	Converted - June 2018
Parklawn	After 2022
Riverview	After 2022
Scattered Sites	After 2022
Scattered Sites Tax Credit I	Converted - December 2018
Scattered Sites Tax Credits II	Converted - December 2018
Townhomes at Carver Park	After 2022
Westlawn Gardens -East	Converted - December 2017
Westlawn Gardens – West (New Construction) Phase 1 - WGSS Phase 2A - Victory Manor Phase 2B - WR III Phase 3 & 4	Converted - May 2017 Converted - May 2017 Converted - May 2019 2020-2021

HACM's RAD Conversion Process

HUD RAD Conversion Process

HACM's RAD Conversion Progress

RAD conversion chart progress 20191108

RAD Conversion Stages

Development Planning

Development plans are still in progress and a CHAP has not been awarded.

Financial Planning

A CHAP has been awarded and HACM is completing the RAD Financing Plan Guide provided by HUD. The Financing Plan Guide provides a list of documentation required to be submitted to HUD for review to demonstrate that the Covered Project can be sustained physically and financially for the term of the HAP Contract at the rent levels permitted under the Demonstration. The Plan must show how the project’s immediate and long-term capital needs will be addressed.

Closing in Progress

The financing plan has been approved by HUD, a RCC has been issued and the agency is completing the RAD Closing Checklist.

Financial Close

The conversion is complete and the public housing unit becomes a project-based voucher unit.

Residents Relocated

HACM is determining the relocation needs of a development on a site-by-site basis. The majority of HACM’s RAD conversions will be pursuing a plan that will allow for tenant in place rehabilitation, which will require no relocation. If a resident must be temporarily relocated, it will be at no expense to the resident. The relocation options will be to a vacant unit in the same development, a vacant unit in another HACM development or a vacant unit in the private market. If the relocation requires residents to be relocated, all displaced households will be relocated to comparable dwellings with rights and protections provided under The Uniform Relocation Act 49 CFR part 24.

Pre-Construction

A team is assembled to plan the construction in a variety of areas including, but not limited to; design decisions, evaluations, studies, value engineering, value analysis, scheduling, constructability reviews, and more.

Under Construction

Development scope of work is in progress.

Key Terms

Commitment to enter into a Housing Assistance Payments Contract (CHAP): Conditional commitment provided to the PHA for units that have been selected under the First Component of the Demonstration that describes the terms under which HUD would enter into a HAP Contract with the Project Owner once the project complies with all requirements in the CHAP, this Notice, and other statutory and regulatory requirements applicable to the project.

Choice Mobility: For residents of RAD projects, the option to obtain a housing choice voucher from a PHA after a year of residency.

Financing Plan: Documentation submitted to HUD for review to demonstrate that the Covered Project can be sustained physically and financially for the term of the Housing Assistance Payment (HAP) Contract at the rent levels permitted under the Demonstration. The Plan must show how the project’s immediate and long-term capital needs will be addressed.

Housing Choice Voucher: Assists very low-income families, the elderly, and the disabled to afford decent, safe, and sanitary housing in the private market. Housing choice vouchers are administered locally by public housing agencies (PHAs). The PHAs receive federal funds from HUD to administer the voucher program.

Project-Based Voucher (PBV): A component of a PHA’s HCV program, where the PHA attaches voucher assistance to specific housing units through a PBV HAP Contract with an owner. Unlike a tenant-based voucher, the PBV assistance remains attached to the unit when the family moves, and assists the next eligible family to move into the PBV unit. The PBV program is administered by HUD’s Office of Public and Indian Housing.

Public Housing Agency (PHA): An agency created by local government to administer public housing

RAD Conversion Commitment (RCC): The contract executed by HUD, the PHA and, as applicable, the post-conversion Project Owner. The RCC follows HUD approval of the Financing Plan and describes the terms and conditions of the conversion.

Rehabilitation (or rehab): An agency created by local government to administer public housing.

Section 8: Section 8 of the Housing Act of 1937, as amended, authorizes the payment of rental housing assistance to private landlords on behalf of low-income households. The largest part of the section is the Housing Choice Voucher program which assists very low-income families, the elderly, and the disabled to afford decent, safe, and sanitary housing in the private market. Housing choice vouchers are administered locally by public housing agencies (PHAs). The PHAs receive federal funds from HUD to administer the voucher program.

Section 9: Section 9 Public Housing was established to provide decent and safe rental housing for eligible low-income families, the elderly, and persons with disabilities. HUD administers federal aid to local housing agencies that manage the housing for low-income residents at rents they can afford.