Improving RAD Relocation

5 min read

New program finds its way

HUD’s Rental Assistance Demonstration program (RAD) has the potential to preserve thousands of units of much needed affordable housing, as well as to improve the quality of apartments built, in many cases, half a century ago. That’s all great. But it also will, by necessity, cause some disruption along the way. In many cases, the amount of work needed in these units is going to require tenants relocating while the work is in progress.

Relocation is a complex and highly regulated process.  No single project is ever “typical;” for example, says Holly Knight, Vice President of Development for the Bennett Group Consulting in Madison, Mississippi, “Populations of residents can be fragile, with special concerns.” Denise Wise, Chief Executive Officer of the Housing Authority City of San Buenaventura, California, gives an example: “We have a development that has a 180 family units that will be demolished in four phases. In the first phase, we will demolish 72 units and replace them with 130 units. Therefore, when Phase 1 is complete we can relocate the balance of the families on site.

“A renovation in place is simple. There is no relocation necessary. People are moved out and back into their units. In our case, with a demolition, we are relocating families for longer than a year. Therefore, we plan to do one of two things: 1. Issue Housing Choice Vouchers (HCV); or 2. Move them into other public housing units.

“So, we have 72 families who need to be relocated, in a housing market with a less than 2 percent vacancy rate; public housing with a 98% occupancy rate; current HCV voucher holders looking for housing in our market take at least six months to find a home and a construction schedule that must be met.”

Resident relocation, which can obviously be part of any renovation, was the subject of HUD’s formal RAD rules on July 14, 2014. But many new government programs go through alterations as citizens begin to live through the experience imagined by law and rule makers. RAD is no different. RAD, says housing commentator David Smith, is a “quiet revolution” that is staying successful in large part because it can “evolve quickly,” with speedy revisions and rule-writing emerging from those who “learn by doing.”

An update to RAD relocation rules is expected soon. Timing of resident relocation seems to be a key issue.  “The RAD Notice last summer,” says Patrick M. Costigan, a former HUD official who is now Principal of the CF Housing Group in Washington, D.C., “had a few pages on relocation that were a bit different from the original notice. New relocation guidance is pending, and is expected to include a focus on timing”—the requirement, included in RAD since its inception, that financing of a RAD conversion be closed prior to any relocation of tenants.

Among the most prominent voices addressing the timing-of-relocation issue has been the RAD Collaborative, which describes itself as open to all housing authorities and their partners “committed to making RAD an innovative and successful new tool [with which we can] preserve and revitalize the nation’s public housing stock to benefit residents and surrounding communities.”

The Collaborative has asked that HUD, among other things, permit more relocation “before financial closing” because “current restriction on pre-closing temporary relocation moves is more restrictive than public housing” and “in the case of new construction, requires relocation and demolition to take place after financial closing, requiring an additional six months, longer and more costly construction and forwarding commitment terms, which increases costs of financing and reduces the pool of available units for relocating residents.”

This prohibition, the RAD Collaborative continues, “subjects residents in multi-phase conversions to live at the site and to endure multiple years of demolition and construction and forces residents with children to make school changes during the academic year, whereas school disruptions could be minimized through early relocation.”

Kim Golden of the Bennett Group Consulting in Madison, Mississippi explains, if “a property that is going to demolished and rebuilt as a part of the RAD conversion, owners know and understand that it needs to be vacated in a timely manner to ensure that demolition can begin soon after closing. However, initiation of negotiations is not allowed to occur until conversion committee issuance, which is often only 30-60 days before closing. This does not leave enough time to assess the needs of residents and find somewhere for them all to relocate. We advise caution in utilizing public housing authority [PHA] policies that allow for intra-PHA housing transfers, however, it is very well documented this method can be used to an extent. Vouchers cannot be offered or given out before closing. Even after negotiations are completed, no action is to be taken until after closing. An owner can request that HUD allow for relocation activities to occur prior to closing, but this process in and of itself can take a long time to receive approval.”

Timing can change everything, emphasizes Denise Wise, because “when we issue vouchers for families to relocate, they often find few options, including in public housing. The rental market is tight.  It can take up to six months for them to find a home. We may therefore ask for a waiver to grant early relocation.”

Wise says she understands “HUD’s reluctance to grant early relocation.  What if the deal doesn’t go through?  Then these families would be relocated at great expense when it wasn’t necessary.”  She quickly adds, however, that “early relocation, or relocating prior to closing, is critical for the residents”— particularly when the timing impacts “children and their schools.”   Few families with children in school are likely to be eager to move in the middle of a school year.

RAD’s relocation rules could be immediately improved, says Patrick Costigan, by some “prudent flexibility” with respect to timing.