“The Moment that the Big Tent was Built for”

At the recent 2025 National Housing & Rehabilitation Association annual meeting at the Loews Miami Beach Hotel, a packed house buzzed with anxiety that was at odds with the calm South Beach waters and the typical optimism that permeates the affordable housing industry. NH&RA veterans and fresh faces alike were full of more questions than answers fresh off the heels of confusing directives from the newly-installed White House and facing significant staffing cuts at the Department of Housing and Urban Development (HUD).

One foothold to navigate the uncertain waters of the next few years came in the form of the “Public Housing Challenges and Opportunities Panel,” a convening that saw some of the top thought leaders in public housing discuss the future of a vital resource that still houses over a million Americans.

Notably, the panel included Tom Davis, an industry veteran who has served as HUD’s director for the Office of Recapitalization for nearly a decade. At a time when most inquiries into the agency have gone unanswered, direct responses from a senior leader provided a refreshing note of stability.

Rounding out the panel were Shaun Donovan, an industry titan who served as HUD secretary from 2009-14 and who currently serves as president and CEO of Enterprise Community Partners, and Claudia Brodie, who received a distinguished career award at the meeting and serves as McCormack Baron’s senior vice president. Dan Rosen, a partner at Klein Hornig and co-chair of the Urban Land Institute’s Affordable & Workforce Housing Council, was moderating the panel.

The tenor of the panel was optimistic, with panelists relaying confidence that some of HUD’s most integral products would persist and continue to provide desperately needed affordable housing throughout the country.

Though Donovan noted that “it is a time of enormous uncertainty,” he cautioned the room to “see through the smoke to where the fire really is.” Rather than centering the conversation around the new executive officers and impending government reduction, Donovan chose to set the scene towards the end of last year, when America was “facing not just the deepest affordable housing crisis that this country has seen, but also the broadest.” At that time, as election season reached full swing, it seemed that candidates across the geographic and political spectrum of the United States were focused on housing affordability as a core issue.

That diverse support “has created a bipartisan opportunity, ironically, in a moment of high, extreme partisanship,” Donovan said. “I’ve never in my career seen housing come up five times in a presidential debate. I’ve never seen housing mentioned by 33 governors in one year in their State of the State addresses. That was true on November 1, [and] It is [still] true today.”

RADical Optimism
One of the critical programs in HUD’s arsenal that has served to bolster America’s public housing stock and preserve its continued affordability for low-income families is Rental Assistance Demonstration (RAD). Implemented in 2012 under then-Secretary Donovan, RAD allows Public Housing Authorities (PHAs) to leverage public and private debt and equity to convert units to a Section 8 platform. Those projects, which often have a deep backlog of capital needs, can then access a wide array of financing tools and public-private partnerships to stay viable for the long term.

By many measures, the program has been “impressive,” said Davis, whose office within HUD oversees much of the RAD program. To date, Davis said, over 1,700 properties have been repositioned through the program, representing over 240,000 units and over $22 billion of upfront construction or initial deposits. “That…is an enormous accomplishment that the industry has achieved.”

Additionally, Davis stressed the program’s efficiency. The dollars put into RAD represent “about an 18-1 leverage ratio of other resources to the public housing operating and capital fund resources that have been invested in these projects. So, these are projects that are epitomizing the public-private partnership picture.” This is a critical measure, Davis emphasized, as housing advocates work to message the importance of these programs. The data shows that RAD conversions “are part of getting that improvement in both the properties and the delivery mechanism when we know that there are very limited federal funds available.”

Such data helped keep RAD a popular program during the first Trump administration. Davis expressed some optimism that RAD would remain a functional and effective tool to preserve aging public housing stock. “Obviously there will be new priorities…but the indication so far is that RAD is very much a priority for the new leadership, and we have no indication that we won’t be expanding the outreach and impact of the program going forward.”

Donovan expressed similar optimism that RAD would persist, citing the “big tent” of support that the program enjoys. “If you think about the moment that we’re in now, where we’ve got a very challenging budget environment, we are going to have real fights about whether government-owned housing is something worth preserving,” he said. “The idea that this big tent that you all are part of is ready to go make the case for Section 8 and for RAD as a platform and mixed-finance, in general, these public-private partnerships – this is the moment that big tent was built for.”

To put a fine point on it, Donovan was very clear: “I hear a lot of catastrophizing out there. And there’s a lot to be worried about…But I’m not worried that Section 8 contracts are not going to be renewed. At the end of the day, Congress appropriates. Susan Collins is the chair of appropriations in the Senate. There is a three-seat majority for Republicans in the House. We are not going to see radical appropriation out of this Congress. I feel very confident about that.”

Tweaks to RAD Bolster the Program
Not all has been smooth with the history of the RAD program, and Brodie noted that today’s mounting and widespread challenges have put stress on the program’s nuanced and delicate mechanisms. “Whenever we can find a way to get to RAD with these mixed-finance deals, we still have to find a way to fund that runway. How do we keep our property safe and healthy for our families? How do we make sure that we have the right kind of housing? How do we keep people housed, and how do we give them social services? All those things that cost money.”

Brodie emphasized that such money has been difficult to come by. “We’re struggling with our current mixed-finance populations, and the operating subsidies are not keeping up. We’re out of reserves – we’re out of ACC reserves; we’re out of operating reserves. And many of them are coming into their 15- or 20-year compliance period, and we’re just not competitive in the bond market.”

However, Davis seemed hopeful that some recent tweaks to the program would smooth these issues and retain RAD projects’ viability going forward.

One significant area of adjustment was in RAD/Section 18 blends, which allow developers to utilize revenue boosts from the Section 18 disposition authority to help projects pencil. This has “dramatically transformed the level of investment” in RAD projects, Davis noted. “Before the blends were in place, the average investment was $55,000 a door. Today, it’s around $150,000 a door on average.”

That heightened investment is poised to only increase following two recent HUD notices.

The first, published in December 2024, increased the allowable revenue from these blends, allowing owners to take about ten percent higher revenue depending on construction costs.

The second, more significant notice, was published in January of this year. First, it simplified RAD contract streams, greatly reducing the administrative burden on owners. “We’re actually converting budget authority, not just the units, with the result that we can produce one contract,” said Davis. “It can all be Project Based Vouchers (PBV) or Project Based Rental Assistance (PBRA). It’s all in the world of RAD doing construction, which gets us out of the tension between the RAD requirements that say you have to do construction to bring the property up to a good standard, and HOTMA regulations” that prohibit construction for two years after a PBV contract.

Additionally, the January notice clarifies Operating Cost Adjustment Factors (OCAF) procedures, allowing owners to readjust in situations where OCAF burdens make properties unviable. Davis said that some owners – particularly early adopters of the RAD program, “have been struggling financially with OCAF adjustments that have not kept pace with operating expenses. The notice invites the property owners…that are struggling with that kind of financial situation to come into HUD, and—because of good drafting of the original statute—we have authority for an adjustment.” Though this requires a bit of legwork, Davis emphasized that “this opens a door for the properties to have a solution so that we are preserving the long-term viability of the properties.”

Though these changes are nuanced and technical, the panelists agreed that they were significant boons to a program that will continue to serve a vital role in housing preservation for years to come. “Within our little niche worlds, this is a very niche piece of the world,” Rosen said. However, those who utilize RAD conversions “have been struggling with exactly this challenge.”

Indeed, the fact that HUD and Davis’s team within HUD has accomplished such adjustments is “fundamental,” said Donovan. “The theory of RAD was that you are moving this incredibly important housing resource from a long-term declining source of funding in public housing… over to Section 8—where the theory was not only that it was more stable immediately, but that the rents would go up over time—is proving out to be true.”