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21 Va. J. Soc. Pol'y & L. 1 (2014)
Private Funding, Public Housing: The Devil in the Details

handle is hein.journals/vajsplw21 and id is 5 raw text is: PRIVATE FUNDING PUBLIC HOUSING: THE DEVIL IN THE DETAILS Anne Marie Smetak* ABSTRACT Public housing, an important component of the social safety net, has long been plagued by insufficient funding. A new federal program seeks to solve the funding challenges by opening public housing to private investment; quite literally, to mortgage public housing in order to save it. Coming, as it does, on the heels of a national foreclosure crisis, this program must be scrutinized carefully, as there is an inherent tension in incentivizing private investors to participate in a public benefit scheme. This Article explains how the new federal program proposes to use public housing developments as collateral. It examines how this use of the private market is a natural extension of the ongoing privatization of federal affordable-housing policy. It argues that the existing public housing funding structure is untenable and that reform is needed. The United States is facing a significant shortage of affordable housing and cannot afford to lose the remaining public housing units. The Article concludes that, conceptually, the private market could be an effective tool to address the long-standing funding challenges. The details of implementation, however, leave much to be desired. The Article identifies areas in which the program should be modified in order to accomplish its stated preservation goals, including protecting against foreclosures, incentivizing preservation, and ensuring tenants have meaningful enforcement mechanisms. CONTENTS Abstract....................1............................. Introduction ...............2............ .................2 I. The Rental Assistance Demonstration (RAD) Program: Mortgaging Public Housing to Fill Gaps in Federal Funding ..........4 A. The Traditional Public Housing Program ..................5 i. Brief History ....................................5 ii. Current Financing Structure.........................8 B. What is RAD?..............................12 * The author is a Practitioner in Residence at Washington College of Law at American University. This Article was written when she was a visiting associate professor of clinical law and Friedman fellow at the George Washington University Law School. This Article partially satisfied the requirements of a master of laws degree. Prior to teaching, she sought to preserve federally subsidized rental housing in the District of Columbia through the Affordable Housing Initiative at the Washington Legal Clinic for the Homeless. The author would like to express gratitude to Phyllis Goldfarb, Jessica Steinberg, Nancy Craig, Wyatt Feeler, Caroline Rogus, and participants in the 2012 Clinical Law Review Writers' Workshop for providing comments to drafts of this Article.

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