Golden Gate Village in Marin City, 2017. (Alan Dep/Marin Independent Journal)

By RICHARD HALSTEAD | | Marin Independent JournalPUBLISHED: October 22, 2019 at 4:52 pm | UPDATED: October 23, 2019 at 5:56 am

A federal program that could help finance the rehabilitation of Golden Gate Village in Marin City received high marks in an evaluation released by the Department of Housing and Urban Development on Tuesday.

Known as the rental assistance demonstration, or RAD, program, it allows for the conversion of existing public housing to project-based Section 8 assistance and permits housing authorities to partner with private investors to finance debt and access other funds to rehabilitate public housing.

“This evaluation validates our long-held belief that RAD is working,” Ben Carson, secretary of the U.S. Department of Housing and Urban Development, said in a statement. “Our aging public housing stock is at extreme risk of being lost and the capital needs of these properties are beyond what we can hope to get from Congress.”

The RAD program was initiated by the Obama administration in 2012 as a means of addressing a severe backlog of needed repairs at the nation’s 1.1 million public housing units. A study prepared for HUD in 2010 estimated the backlog of public housing capital needs to be approximately $26 billion and said the backlog was growing at a rate of $3.4 billion per year.

“HUD is offering different tools to revitalize public housing with the focus on the need to address the capital backlog around the county,” said Lewis Jordan, executive director of the Marin Housing Authority. “We’ll look at this as a best practice along with another set of tools they’re offering.”

Michaels Development Co., a New Jersey-based company, was chosen in December 2018 to serve as the master developer in charge of overseeing Golden Gate Village’s revitalization. Michaels responded to a request for proposals that calls for developing a plan that includes both new market-rate units and subsidized units.

The market-rate units would help to pay for the subsidized units. A physical needs assessment conducted in 2015 showed about $16 million in immediate capital needs required to bring the property to minimum HUD standards and another $50 million in work for complete rehabilitation using energy-saving and green-building approaches.

Some neighborhood residents, most notably the leadership of the Golden Gate Village Resident Council, oppose the building of new market-rate units and fear some current public housing tenants will be displaced in the rehab process.

According to the new HUD report, a survey of 298 residents at 18 RAD-converting properties found that 75% of the tenants who responded to the survey were living in their original unit after the completion of the RAD conversion and associated construction. An additional 18% moved into a different unit at the same property, while other households moved to new rent-assisted properties. Eighty percent of the tenants who responded to the survey said they were “very satisfied” or “somewhat satisfied” with the improvements in their housing.

The HUD evaluation found that RAD has been extremely successful at attracting capital to improve the physical condition of housing projects. The report said that from RAD’s creation in November 2011 through October 2018, a total of 956 public housing projects with 103,268 units of public housing underwent RAD conversion and raised $12.6 billion of capital, an average of $121,747 per unit.

Jordan said HUD offers an even more attractive program for housing authorities that can demonstrate it would be cheaper to replace their public housing units than to rehabilitate them. The program is named after Section 18 of the 1937 United States Housing Act, which allows public housing authorities to demolish and redevelop their properties under certain conditions.

Jordan emphasized, however, that utilization of the Section 18 program would not require demolition of the existing Golden Gate Village units nor is that contemplated.

Under RAD, the amount of money HUD provides following the conversion to Section 8 can’t exceed what housing authorities were previously receiving to operate and maintain their public housing units. Under the Section 18 program, however, HUD provides Section 8 funding commensurate with fair market rents in the community.

Jordan said that is particularly significant in areas such as Marin where the cost of rental housing is very high. He said under RAD, the average per unit subsidy HUD would provide to the Marin Housing Authority for its 500 public housing units would be about $620. Under Section 18, HUD’s average per unit subsidy would amount to about $3,000, he said.

Under both RAD and Section 18, the public housing would no longer belong to the government; it would likely be owned by a private developer, such as Michaels, in partnership with the housing authority. Under RAD, HUD continues to supply capital subsidies to the housing authorities while under Section 18 the new owners assume responsibility for the cost of operating and maintaining the property.

Jordan said under Section 18, the housing authority would continue to own the land on which the public housing sits, and there would be deed restrictions to assure that the housing remains affordable. He said a new physical needs assessment in the works at Golden Gate Village should give the housing authority a good idea if Section 18 will be an available option. The results of that assessment are expected to be reported at the housing authority’s next meeting on Nov. 19.