Despite the public housing program’s critical role in providing permanently affordable housing to people with the lowest incomes, the federal government has chronically underfunded public housing authorities (PHAs) and provided inadequate oversight. With insufficient funds to support their capital needs, PHAs have struggled to properly maintain and upgrade their public housing properties, leaving many existing public housing developments deteriorating and residents facing dire conditions. Over the last 15 years, some PHAs have refinanced and converted their public housing to project-based assistance using mechanisms such as the US Department of Housing and Urban Development’s (HUD) Rental Assistance Demonstration (RAD) and Section 18 Demolition-Disposition to fund rehabilitation and redevelopment of distressed properties.

This report presents findings from our interviews with eight housing authority representatives from across the US and one housing authority expert regarding capital needs, funding gaps, and approaches to financing rehabilitation and redevelopment. Most of the PHA leaders we interviewed said their agencies had significant capital needs but noted that federal allocations fall far short of the funding needed for maintenance, upgrades, or redevelopment. Many agencies take a patchwork approach to financing deals in an increasingly expensive and high-interest environment, leveraging and combining sources including federal allocations and grants, local and state supports, low-income housing tax credits, and HUD financing mechanisms. Even as PHAs take advantage of additional funding flexibility of mechanisms like RAD and use innovative approaches to bring in additional equity, for most, major funding gaps remain. Ultimately, this funding shortage underscores the need to increase the amount of assistance available to meet the growing demand for deeply affordable housing.