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To:	Contra Costa County Housing Authority Board of Commissioners
From:	Joseph Villarreal, Housing Authority
Date:	October 13, 2015

Contra

Costa

County

Subject:

APPLICATION TO HUD TO EXPAND THE HOUSING AUTHORITY'S PREVIOUSLY APPROVED 90-UNIT RENTAL ASSISTANCE DEMONSTRATION PROGRAM

Action of Board On: 10/13/2015

APPROVED AS RECOMMENDED

OTHER

Clerks Notes:

VOTE OF SUPERVISORS

AYE:

John Gioia, Commissioner
Candace Andersen, Commissioner
Karen Mitchoff, Commissioner
Federal D. Glover, Commissioner

ABSENT:

Mary N. Piepho, Commissioner
Fay Nathaniel, Commissioner
Seat Vacant, Commissioner

Contact:

925-957-8028

I hereby certify that this is a true and correct copy of an action taken and entered on the minutes of the Board of Supervisors on the date shown.
ATTESTED: October 13, 2015
,

BY:	, Deputy

RECOMMENDATIONS

CONSIDER approving Resolution No. 5192 authorizing submission of a Rental Assistance Demonstration application to HUD that would increase the HACCC's previously approved applications for 90 vacant units to include all 214 units at Las Deltas in North Richmond.

BACKGROUND

In response to the ongoing lack of funding for public housing, HUD created the Rental Assistance Demonstration (RAD) program as a financing tool to preserve existing units by converting the underlying public housing subsidy to a project-based contract with HUD that permits private financing. This will allow public housing units across the country to be modernized or replaced by new construction while providing more stable long-term funding. Although it is still a limited and newly developing program, RAD is HUD’s primary tool to fund required rehabilitation or reconstruction of existing public housing.

BACKGROUND (CONT'D)

On March 30, 2015, HUD approved HACCC's RAD applications to convert 90 vacant public housing units at Las Deltas in North Richmond to Project-Based Vouchers (PBV) that will be used to develop affordable replacement housing elsewhere. When staff submitted HACCC's RAD applications in December 2013, the intention was to also submit Section 18 Demolition/Disposition (Section 18) applications to HUD for the remaining, occupied units at Las Deltas. The primary advantage of a Section 18 application is that it provides a better long-term subsidy stream than the RAD program does. The primary disadvantages are that HUD has made it very difficult to get a Section 18 application approved and HUD does not provide vouchers to replace vacant public housing units lost under a Section 18 application. Even the funding of vouchers to replace occupied public housing units has been reduced to such a minimal level that it may takes years, if at all, before they are received.

In discussions with HUD and others it has become clear that it will be difficult to get Section 18 applications approved for Las Deltas. While staff will continue to explore the possibility of submitting Section 18 applications over the remainder of the calendar year, it is in HACCC’s best interest to also submit RAD applications for the remainder of the property in order to maximize the chances that the entire property can be converted to project-based assistance that can be used to develop replacement housing elsewhere.

In response to HACCC’s request earlier in the year to expand its original RAD applications, HACCC’s HUD Transaction Manager indicated that staff should submit an informal amendment request. The goal was to seek an expeditious approval by HUD’s Washington RAD staff. The Board approved this action at its August 18, 2015 meeting. However, HUD RAD staff in Washington have communicated to both our Transaction Manager and staff that HACCC must submit formal applications to convert the remainder of the property using RAD.

Attached are two Board Approval forms that must be submitted with each application. HACCC has two contracts with HUD for Las Deltas, which is why there are two forms to approve. In general, the forms show the sources and uses of funds to convert the project to RAD.

FISCAL IMPACT

If approved by the U. S. Department of Housing and Urban Development (HUD), the Housing Authority’s (HACCC) revised Rental Assistance Demonstration program (RAD) applications would convert all 214 public housing units at Las Deltas into project-based vouchers. The project-based voucher subsidy for these units will be worth approximately $66 million in funding over the next 30 years.

CONSEQUENCE OF NEGATIVE ACTION