|HUD No. 23-137
HUD Public Affairs
July 10, 2023
HUD Announces Historic Transaction: Transforming Over 2,000 Affordable Rental Homes in New York City
Nearly $1 billion Rental Assistance Demonstration Transaction with the New York City Housing Authority will enable major upgrades for more than 2,000 affordable rental homes in the Bronx
WASHINGTON - The U.S. Department of Housing and Urban Development is announcing today it recently closed a $930 million Rental Assistance Demonstration (RAD) transaction with the New York City Housing Authority (NYCHA) at its Edenwald Houses property. This transaction will allow NYCHA to provide much needed upgrades and renovations to 2,035 affordable rental homes. Through RAD, these homes will be converted to Project-Based Section 8 housing using a RAD/Section 18 Blend, a component of RAD that allows for higher levels of funding to directly support improvements to resident homes. This is the largest transaction to date under the RAD program.
Edenwald Houses, built in 1953, is located in the Bronx and is the largest and oldest public housing development in New York City. It is home to nearly 5,000 residents. To ensure quality housing and appropriately address the needs of the community, HUD worked closely with residents and a NYCHA partner team for over two years to thoughtfully design each aspect of the transformation of these homes for current and future generations.
The RAD conversion will support the rehabilitation of the site’s 40 residential buildings with updated features and amenities. In addition to repairs to the building exterior, the project will include upgraded kitchens, bathrooms, heating and cooling systems, and mechanical systems, while also addressing lead and asbestos hazards.
Energy efficiency is a key component of the renovation plans, which will be achieved through new energy-efficient windows, electric panels, LED lights, and resilient flooring throughout each home. The project will also include onsite amenities such as a fully renovated senior center, new laundry facilities, improved waste management, free wireless internet, outdoor green spaces, security, and the development and implementation of a social services program.
The total rehabilitation cost for Edenwald Houses is $480 million ($236,000 per home) and is fully financed through RAD using:
- Debt provided by the New York City Housing Development Corporation
- Federal and State Rehabilitation Tax Credits
- New York City Housing Preservation and Development funding
- Developer equity contributions
RAD was designed to help address the multi-billion-dollar nationwide backlog of deferred maintenance in the public housing portfolio and to stem the loss of affordable housing that could no longer be kept to decent standards. From the program’s inception through January 1, 2023, the Rental Assistance Demonstration has facilitated more than $16 billion in capital investment to improve or replace nearly 193,000 deeply rent-assisted homes, most of which house extremely low-income families, seniors, and persons with disabilities.
Under RAD, projects funded under the public housing program convert their public housing assistance to project-based Section 8 rental assistance. Under Section 8, residents continue to pay 30% of their income towards rent and the housing must continue to serve those with very low and extremely low incomes, as was the case when the property was assisted through the public housing program. Residents must be notified and consulted prior to conversion, are given a right to return to assisted housing post-construction so that the same tenants can enjoy these newly preserved and improved apartments and maintain the same fundamental rights they had as public housing residents.
About RAD/Section 18 Blends
A RAD/Section 18 Blend allows Public Housing Authorities (PHAs) to "blend" project-based voucher assistance through a RAD conversion with assistance from tenant protection vouchers that are awarded through a Section 18 disposition approval. Since its creation in 2018, over 60 PHAs have completed almost 100 transactions using the RAD/Section 18 Blend. Through these conversions, PHAs were able to invest over $4 billion to substantially rehabilitate or redevelop approximately 25,000 public housing homes, providing significantly improved housing conditions for low-income families.
View photo essays and read case studies where RAD is working to successfully preserve and improve public housing for low-income families. Watch an educational video for public housing residents or those new to the RAD program.