Baltimore has over $800 million in capital (maintenance and repair) needs in its public housing stock, and receives around $4 million annually to address our deteriorating housing supply from the federal government. At current funding levels, it would take the Housing Authority of Baltimore City (HABC) 200 years to address the capital needs of its housing stock, says Baltimore Housing Commissioner Paul Graziano in an interview with the AFRO, requiring the city to seek out private investment dollars in order to fund its public housing need.
And that need is great says Graziano. HABC estimates that, in addition to the approximately 26,000 households currently living in public housing (about 10,300 households currently) or receiving some sort of rental subsidy like a Housing Choice Voucher (about 15,755 households), there are at least 50,000 additional households who have expressed a need for housing assistance and are not receiving it.
“There’s really no money out of Washington to build new public housing,” said Graziano. “The program that is funded to some extent to grow is the voucher program. . . . It’s not huge but we are getting a few hundred units a year.”
Housing authorities are locally managed federal agencies that rely more or less wholly on Congress for their funding. In America, this is the principal (and often sole) means of providing affordable housing to those who need it, yet Congressional support for public housing has significantly declined, and continues on a downward trajectory.
“All I can say is, nationally, they’re losing somewhere between 10 and 15,000 public housing units a year, due to the capital shortfalls,” said Graziano.
Rental subsidies like the Housing Choice Voucher Program (HCVP), which deliver persons in need of affordable housing to the private rental market, have been more adequately, though not completely, funded, making it difficult for an authority like HABC to meet the demand for affordable housing.
HABC recently reopened its HCVP waiting list. From Oct. 22 to Oct. 30, the time period during which HABC was accepting applications for the waiting list, the authority received 73,509 preliminary applications, and while the initial plan was to create a waiting list of 25,000 households from that larger pool, the number of applications led to a waiting list of 30,790.
That list will have a six year shelf-life according to Graziano, but with somewhere around 1000 housing vouchers to give out per year (most of those being distributed because of turnover when persons no longer need their voucher, allowing the authority to redistribute it), HABC expects that at most 7,500 people will receive vouchers off that list before the authority reopens the list and creates a new one, and that the number more realistically is in the 1,000 a year range.
With this sort of gap between need and funding levels, authorities are not in a position to preserve their single-payer model.
“I think obviously is inadequate given the need around the nation, not merely here, versus the funding,” said Graziano. “I do believe that there’s been, out of necessity, a shift toward public-private partnerships to bring other capital to the table.”
As an example of this sort of public-private partnership, Graziano cites the Rental Assistance Demonstration (RAD) program. In a prior conversation with the AFRO, Deputy Executive Director of Baltimore Housing Anthony Scott explained how RAD works.
“What it allows housing authorities to do is to, essentially, substitute the public housing subsidy that we get for a section 8 subsidy,” said Scott.
The federally funded public housing subsidy only covers operating costs, but since a section 8 subsidy is designed to be paid to landlords, it covers everything market rents are intended to cover: operating costs, capital costs, anything still owed on the mortgage of the property, and something leftover for the landlord herself.
Under RAD, HABC can borrow against the difference between the public housing subsidy and the section 8 subsidy, and will receive the difference from the Dept. of Housing and Urban Development (HUD) in order to pay back the loans.
By combining RAD with the issuance of low-income housing tax credits as well as tax exempt bonds tied to those credits, HABC has raised $330 million with which they will address the capital needs of 4,000 units of their present public housing stock, doing in two years what would otherwise have taken 200 at current funding levels (though the reality is the units would have likely become uninhabitable long before that 200 years was up).
“Programs like that are clearly going to be necessary in order to address the capital need, both in terms of preservation and in terms of production of new housing or replacement housing,” said Graziano. “We already are using the tax credit program widely around the city in redevelopment efforts to produce new affordable housing.”
Even with this renewed ability to address the capital needs of its public housing stock however, 7,000 additional current units, with about $500 million worth of capital needs, will continue to be subject to the vagaries of congressional support.