The Rental Assistance Demonstration (RAD) is a federal program that allows public housing authorities to convert units to long-term Section 8 rental assistance contracts to leverage private financing for building renovations. This page covers CBC’s work on the Permanent Affordability Commitment Together (PACT) initiative, the NYCHA Preservation Trust, capital financing strategies, property management reforms, and labor productivity.
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The State should increase financial support for Rental Assistance Demonstration (RAD) public-private partnerships that bring in capital and often new management.
Increasing financial support for NYCHA’s RAD conversions by providing tax-exempt bonds and Low-Income Housing Tax Credits through the NY Housing Finance Agency and the New York City Housing Development Corporation would facilitate building and unit quality improvements to the benefit of tenants.
Key Data
As of March 2024, NYCHA has converted more than 20,000 units to Section 8 under the PACT program, with another 20,000 units currently in the planning pipeline.
As of March 2023, the average cost to operate a NYCHA unit was nearly $1,500 per month, which is 80 percent higher than the cost to operate NYCHA buildings converted to Section 8 under the RAD/PACT program.
As of February 2022, NYCHA had completed or was in the process of renovating 14,742 units through RAD/PACT, with an additional 20,426 units in the pipeline.
As of December 2018, NYCHA set a goal to convert 62,000 units through the PACT initiative, which represents the maximum number it can convert under its federal cap.
NYCHA faces a significant operating budget gap and deteriorating physical conditions, with capital needs totaling $60 billion. To address these challenges, the authority must prioritize converting units to Section 8 under the Permanent Affordability Commitment Together (PACT) program and the Preservation Trust, while also improving management efficiency and labor productivity.
Recommendations related to Rental Assistance Demonstration (RAD)
Fix or replace deteriorating buildings with PACT and the Preservation Trust.
Improve management effectiveness and efficiency, and publicly track progress and impact.
Negotiate savings, boost productivity, and modernize property management through collective bargaining.
Overhaul the rent collection process.
Key Data
$791 million
— The gap between public housing expenses and core operating income in 2023.
46.5 percent
— The share of households behind on their rent in October 2023.
$1,510
— Operating expenses per unit per month in 2023.
$60 billion
— NYCHA’s five-year capital needs.
$1.5 billion
— Personnel costs in 2023, which accounted for half of the public housing operating budget.
43 percent
— Public housing residents surveyed who reported three or more housing condition issues.
The New York City Housing Authority faces significant financial instability due to a decline in rent collection rates from 90% to below 65%, resulting in over $450 million in arrears. To address these challenges and improve deteriorating infrastructure, the authority must leverage tools like the Rental Assistance Demonstration (RAD) and the Preservation Trust while implementing operational reforms.
Recommendations related to Rental Assistance Demonstration (RAD)
NYCHA should fix its deteriorating buildings through the Rental Assistance Demonstration (RAD) and the Preservation Trust.
NYCHA should improve property management to address its operational and capital investment needs.
NYCHA should increase productivity through collective bargaining changes in its labor agreements.
The State should help NYCHA reduce costs by reforming the Scaffold Law.
The State should increase the Trust’s unit cap when needed to support NYCHA.
Key Data
90%
— The previous norm for the New York City Housing Authority's rent collection rate.
65%
— The current rent collection rate for the New York City Housing Authority, which has fallen below this level.
$450 Million
— The amount of accumulated rent arrears currently owed to the New York City Housing Authority.
$15 Billion
— The lower bound of the State's structural deficit.
$20 Billion
— The upper bound of the State's structural deficit.
59,811
— The number of households that requested rent decreases between March 2020 and February 2022.
The New York City Housing Authority faces a structural budget gap driven by rising operating costs, deferred maintenance, and a record-low rent collection rate of 64%. To achieve solvency, the authority must prioritize structural reforms, including expanding the Rental Assistance Demonstration (RAD) program and enforcing tenant rent obligations, rather than relying on non-recurring revenue and subsidies.
Recommendations related to Rental Assistance Demonstration (RAD)
NYCHA should fix deteriorating buildings through the RAD program and the Preservation Trust.
NYCHA should improve property management to enhance operational efficiency.
NYCHA should boost rent collections to address the structural budget gap.
NYCHA should negotiate savings and increased productivity through collective bargaining.
NYCHA should appropriately enforce tenant obligations to pay rent to ensure adequate revenue.
Key Data
64%
— The rent collection rate fell to an all-time low of 64% in December 2022.
$454 million
— As of December 2022, 46% of NYCHA households were in arrears, having accrued $454 million in unpaid rent.
$789 million
— NYCHA reported using $789 million, or 28% of its total revenue budget, in non-operating sources to balance its 2022 budget.
$1,500
— The average cost to operate NYCHA’s public housing reached nearly $1,500 per unit per month.
$211 million
— At the end of 2022, NYCHA was left with $211 million in reserves, representing less than one month of expenses in cash on hand.
10%
— Overall operating costs for NYCHA’s public housing portfolio increased 6% between 2021 and 2022, while spending per unit increased 10% year-over-year.
New York City's public housing authority is utilizing the Rental Assistance Demonstration (RAD) and Permanent Affordability Commitment Together (PACT) programs to renovate units, having already financed $3.2 billion in capital improvements. To address the remaining 110,000 units not covered by these programs, the city must secure passage of the Preservation Trust legislation to enable necessary comprehensive renovations.
Recommendations related to Rental Assistance Demonstration (RAD)
The City Council should join NYCHA and City Hall in lobbying for State and federal actions needed to pass the Preservation Trust legislation.
New York City must pursue comprehensive renovations funded through a combination of RAD/PACT and the Preservation Trust to ensure safe and habitable living conditions.
The State legislature should pass the proposed Preservation Trust legislation (S6999A/A7805) to allow NYCHA to secure federal Tenant Protection Vouchers and oversee renovations.
Key Data
$3.2 billion
— Amount in capital improvements financed by RAD conversions.
62,000 units
— The maximum number of units NYCHA can convert under its federal cap.
110,000 units
— The number of public housing units that would remain in the Section 9 program without additional funding.
14,742 units
— The number of units NYCHA had completed or was in the process of renovating as of February 2022.
90 percent
— The portion of NYCHA's portfolio at risk of deteriorating to poor conditions by 2027 without action.
400,000 residents
— The number of people living in NYCHA housing who deserve safe and secure conditions.
New York City's public housing system requires urgent stabilization through the approval of the Preservation Trust bill and procurement reforms to manage its aging infrastructure. Additionally, increasing financial support for Rental Assistance Demonstration (RAD) conversions through tax-exempt bonds and tax credits is essential to facilitate necessary building and unit quality improvements for tenants.
Recommendations related to Rental Assistance Demonstration (RAD)
The State should increase financial support for Rental Assistance Demonstration (RAD) public-private partnerships that bring in capital and often new management.
Increasing financial support for NYCHA’s RAD conversions by providing tax-exempt bonds and Low-Income Housing Tax Credits through the NY Housing Finance Agency and the New York City Housing Development Corporation would facilitate building and unit quality improvements to the benefit of tenants.
Key Data
110,000
— The number of public housing units that would be renovated through the proposed Preservation Trust and associated management partnerships.
New York City's public housing authority requires increased financial support for Rental Assistance Demonstration (RAD) public-private partnerships to bring in necessary capital and management improvements. By providing tax-exempt bonds and housing tax credits, the state can facilitate essential building and unit quality upgrades for public housing tenants.
Recommendations related to Rental Assistance Demonstration (RAD)
The State should increase financial support for Rental Assistance Demonstration (RAD) public-private partnerships that bring in capital and often new management.
The State should increase financial support for RAD conversions at NYCHA by providing tax-exempt bonds and Low Income Housing Tax Credits through the NY Housing Finance Agency and the New York City Housing Development Corporation to facilitate building and unit quality improvements.
Key Data
110,000
— Number of public housing units that would be renovated through the proposed Preservation Trust and associated management improvements.
NYCHA faces over $40 billion in capital needs, prompting the city to increase capital funding and utilize the Rental Assistance Demonstration (RAD) program to renovate 62,000 units. To ensure these funds are used effectively, the city and state must implement procurement reforms, such as authorizing construction manager-build methods and creating a Preservation Trust to facilitate long-term financing.
Recommendations related to Rental Assistance Demonstration (RAD)
State lawmakers should act swiftly to grant NYCHA authorization to use construction manager-build or construction manager-at risk procurement methods, even if the Trust is not speedily authorized.
NYCHA’s federal monitor, along with NYCHA and the City, should strongly advocate for HUD to grant waivers from restrictive federal public housing procurement rules for both its annual Section 9 subsidies and any additional federal funding NYCHA receives under the Build Back Better bill.
City and State lawmakers should create the Preservation Trust, since it will provide NYCHA with additional options to finance needed capital investment.
Key Data
$40 billion
— The total amount of NYCHA's capital needs due to years of underinvestment, mismanagement, and cost inflation.
62,000 units
— The goal for the number of units NYCHA aims to renovate under the PACT program by 2028.
$300 million
— City capital funding included in the Department of Housing Preservation and Development’s capital plan for PACT projects.
The New York City Housing Authority faces a precarious fiscal outlook characterized by declining rent collection rates, rising operating costs, and a significant backlog of maintenance work. While the authority plans to utilize the Rental Assistance Demonstration program to address lead paint and other environmental hazards, its financial stability remains heavily dependent on federal and city subsidies.
The conversion of public housing units to the Rental Assistance Demonstration (RAD) program has contributed to stagnant rental income growth and a reduction in the number of units under direct management. This transition is also a primary driver of NYCHA's planned 9 percent reduction in headcount by 2024 as the agency shifts its operational structure.
Key Data
176,000
— Number of public housing units under NYCHA’s direct management at the end of 2015 before conversions to RAD.
173,000
— Number of public housing units under NYCHA’s direct management today following conversions to RAD.
9 percent
— Planned reduction in NYCHA headcount by 2024, largely resulting from the planned conversion of 30,000 units to RAD.
30,000
— Number of units planned for conversion to RAD, which is a primary driver of the projected 9 percent headcount reduction by 2024.
The Rental Assistance Demonstration program offers a vital long-term strategy for revitalizing public housing by leveraging private funding to accelerate renovations while maintaining affordability and public ownership. To maximize the program's effectiveness, federal policymakers should remove existing caps on conversions and provide additional tax incentives, while the City must prioritize financial support to ensure these projects remain viable.
Recommendations related to Rental Assistance Demonstration (RAD)
Congress should lift the RAD cap to allow NYCHA to do more conversions.
Congress should exempt RAD projects from the tax-exempt bond cap to increase the financial feasibility of RAD conversions.
Congress should create dedicated tax credit programs for RAD to increase the financial feasibility of RAD conversions.
The City should allocate funding it currently reserves for its housing plan to NYCHA to support RAD conversions, as they are not financially feasible without additional public support.
The NYCHA 2.0 plan aims to stabilize public housing by leveraging private funding through the Permanent Affordability Commitment Together (PACT) initiative and mixed-income development to address critical capital repair needs. Success requires additional government funding, regulatory relief, and labor union cooperation to improve management flexibility and repair efficiency.
Recommendations related to Rental Assistance Demonstration (RAD)
City, State, and Federal governments must provide additional funding, statutory authority, and regulatory relief to ensure the feasibility of the PACT conversion plan.
Labor leaders must work with NYCHA to ease work rules and salary structures to ensure basic repairs and maintenance are performed in a more timely and cost-effective manner.
Key Data
62,000
— Number of units added to the Permanent Affordability Commitment Together (PACT) initiative to leverage private funding and speed up renovations.
The New York City Housing Authority's proposal to add 62,000 units to the Permanent Affordability Commitment Together (PACT) initiative, which utilizes the Rental Assistance Demonstration (RAD) program, represents a significant step toward addressing the agency's $32 billion capital need. Leveraging public-private partnerships through these programs allows for private funding and efficient management practices while maintaining long-term affordability and ownership.
Recommendations related to Rental Assistance Demonstration (RAD)
NYCHA should take full advantage of public-private partnerships through PACT, including the Rental Assistance Demonstration (RAD) program, as part of a comprehensive strategy for addressing its $32 billion capital need.
Elected officials and labor leaders should take additional action to give NYCHA the resources and flexibility it needs to stabilize the system.
NYCHA's management must continue to pursue every opportunity to raise revenue and improve operations.
Key Data
$32 billion
— NYCHA's capital need that the PACT initiative and RAD program help address.
62,000
— Number of units NYCHA proposes to add to its Permanent Affordability Commitment Together (PACT) initiative.
The New York City Housing Authority faces a massive capital funding gap, with needs exceeding $25 billion, necessitating the use of alternative strategies like the Rental Assistance Demonstration (RAD) program to leverage private funds for rehabilitation. By converting public housing units to project-based rental vouchers, the authority can access private capital and tax credits to address the severe deterioration of its aging housing stock.
Recommendations related to Rental Assistance Demonstration (RAD)
The Authority should continue the use of Section 8 Conversions, RAD, and land sales to supplement the limited federal capital subsidies.
The new needs assessment should clarify which developments are most suitable to convert to voucher programs or could benefit from property dispositions to raise funding for capital investment.
NYCHA should continue to use public-private partnerships to address its capital shortfall.
Key Data
1,395-unit
— The size of the Ocean Bay – Bayside development in Far Rockaway, Queens, which was the first transaction completed through the Rental Assistance Demonstration (RAD) program.
$253 million
— The amount raised in tax-exempt bonds and LIHTC equity through the RAD program to rehabilitate the Ocean Bay – Bayside development.
$105 million
— The amount of FEMA disaster relief funding combined with RAD proceeds to rehabilitate the Ocean Bay – Bayside development.
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