A housing authority may choose to redevelop or rehabilitate a public housing site through a few different programs. These programs are collectively referred to as “Mixed Finance” housing because they mean bringing in different forms of funding or financing. Mixed financing can add to or replace traditional public housing operating and capital subsidies. Usually, Mixed Finance developments are no longer owned directly by the housing authority, but the housing authority may control what happens to the site through a ground lease.¹ 

As a brief history, the earliest examples of mixed financing redevelopment were in the 1990’s and early 2000’s through the federal HOPE VI program, the Choice Neighborhoods program, and demolition or disposition efforts under federal law. Since 2012, the Rental Assistance Demonstration (RAD) program authorized by Congress, has become a program where public housing is getting redeveloped.²

Demolition refers to the tear down of buildings and replacement on site or elsewhere. Disposition refers to change of ownership or change of type of funding. Many of these programs rely on the use of federal or state Low Income Housing Tax Credits (LIHTC)³ that bring in private investors and the use of project-based Section 8 subsidies. These programs may also result in public-private partnerships in which the property may be operated in the future by an entity other than the housing authority, although in many cases the housing authority still controls the land.

Mixed Finance housing, done properly, can provide badly needed capital funding for the long-term preservation of the housing. Importantly, Mixed Finance housing also has use restrictions that keep apartments affordable for low-income people for a certain period of time (in some cases forever) and tenant protections regarding rent, grievances, evictions, and tenant participation.

Residents and resident organizations should get involved in any redevelopment as early as possible to make sure that it will work for them. Residents should negotiate with developers and the housing authority and ensure that they receive the technical assistance they need to review and understand proposals and complicated legal documents and financing. Residents should ask tough questions about options and relocation. They should get guarantees in writing BEFORE the redevelopment and get guarantees about their rights and how the development will be operated AFTER the redevelopment. For more information on rent and Mixed Finance Housing see here.⁴

The Rental Assistance Demonstration (RAD) was authorized by Congress in 2012 to preserve federal affordable and public housing. Nationwide and in Massachusetts public housing needs billions of dollars in repairs.⁵ RAD provides funding to stabilize, rehabilitate, and replace properties. It has expanded significantly nationwide and has reached hundreds of thousands of public housing
units. Under RAD, housing authorities can shift federal public housing operating and capital funds for a development into long-term Section 8 contracts through either the Project-Based Voucher (PBV) program or a Project-Based Rental Assistance (PBRA) contract.⁶

All RAD proposals must go through several stages of resident review and comment and HUD assessment. Housing authorities are required by HUD to guarantee certain public housing rights, such grievance rights. For more information on RAD rent rules and tenant protections see the Rent Booklet.

Yes. If involving Section 8 or Mass Rental Voucher Program (MRVP), then you would use the informal hearing process (for Section 8) or the grievance procedure (for MRVP) with that housing authority.⁷ An example of when the informal hearing process would be used is a dispute about whether the tenant rent share was calculated correctly. However, residents can negotiate for the continued use of the “public housing” grievance process (as was done in Cambridge and elsewhere).

If, on the other hand, it involves Project-Based Rental Assistance (PBRA), then you will have to use the PBRA dispute process. Often there have been real problems in the past with multifamily owners’ misuse of the PBRA process. Since, under the Rental Assistance Demonstration (RAD), public housing grievance rights are to be retained, there is a good argument to ask that before the site is redeveloped, that there be a good Mixed Finance Grievance Procedure set up that will work for residents, and which preserves some role for housing authority oversight and involvement and judicial review. Where the site will continue to have some public housing units, it may be easy to establish a blended procedure that works the same for all units (or at least for all units that have some kind of deep subsidy and income-based rents).

Yes. While state or federal Low-Income Housing Tax Credit (LIHTC) funding may be coupled with public housing subsidies, Section 8 Project-Based Voucher (PBV) or Project-Based Rental Assistance (PBRA) or the Mass. Rental Voucher Program (MRVP) assistance, it may also be used for “affordable units” at a redeveloped site. If the “affordable unit” does not have any other subsidy, it may often not be affordable to those of extremely low income (30% of area median income or below) and other tenant protections may be lost. Tenants in mixed finance developments may try to get similar policies from the housing authority and owner that would benefit LIHTC tenants and tenants in other replacement or affordable units.⁸ This could include having a grievance/dispute resolution policy available to all affordable unit residents. Other tenant protections could include:

1. Having a local tenant organization or resident council open to all tenants including all “affordable units;”
2. Getting tenant participation funding based on the full count of “affordable units,” or the pre-existing public housing inventory, rather than just the post- conversion public housing units; or
3. Setting up transfer policies so that LIHTC tenants who need subsidy could apply for a transfer within the property.