RAD voucher is not the correct name. The RAD vouchers have nice sounding names that refer to how the voucher is applied. To get a better understanding of RAD vouchers read The Promise and Peril of HUD’s RAD Program.
I wrote this article is to help you understand the effects of the Rad voucher has on your rental. Hint: It is more far-reaching than you have been led to believe. To get a better understanding of how a RAD voucher affects the value of your apartment refer to the following example.
The Basics Of The RAD Voucher
If truth be told the tenant receives the RAD voucher to offset the increase in rent, more on that in a minute. The tenant pays the difference between the value of the voucher and the rental value.
How it works by the numbers
The program gives you a voucher. Let’s say it’s one thousand dollars ($1,000.00). Your part of the rent is two hundred fifty dollars ($250.00). That’s basically it or so it seems.
What Really Happened
Let’s look at this again but from the developer’s point of view.
- Voucher = 1,000.00
- Rent from tenant = 250.00
- Rent roll from the apartment is =1250.00
- The true value of the apartment is 1250.00
- The true amount of rent for this apartment is 1250.00
See a problem yet? You will and soon.
Update July 16, 2020
I spoke to my friend Mac, the Linden House tenant I’ve written about before. He has informed me that the rent on his one-bedroom has gone up one-thousand dollars ($1,000.00) This makes the true rental amount 2,250.00, effectively negating the voucher. And this makes the apartment no longer affordable.
What They Say
This is taken from an article RAD Tampa Florida.
“Families may be eligible to receive a Housing Choice Voucher if funding is available and if families are in good standing after one year.”
We’re you told something like this?
What They Mean
- The voucher is only as good as the funds that back it. If those funds run out the voucher is useless.
- If you are not deemed to be in good standing you will not receive a voucher.
Here Is The Problem You May Not Have Seen Coming
As a tenant, you took the voucher because it is helping you pay a rent hike you did not agree to.
But by doing so you agreed to the new rental amount. In the example that is 1250.00. Without signing a new lease you agreed to a rent hike. This is the problem I mentioned. It is one of many.
Thanks to RAD your apartment is no longer in public housing. It has been privatized. Your apartment is no longer affordable, it is at market rate. So what happens if there is no voucher?
Questions You Need To Be Asking
- What happens to your portion of the rent if funds run out for the voucher?
- Can you just pay your portion of the rent?
- Do you have to pay the market rate value of the apartment?
- Will you face eviction for non-payment of rent?
- Who decides if you are in good standing?
- What decides if you are in good standing?
- And who sets the parameters for good standing?
These are a few of the questions you should be asking.
What’s in it For The Developer
For the developer, this is a means to an end. Higher rents increase their rent roll as well as return on investment. The voucher is guaranteed rent. It raised the value of the apartment. In doing so, the developer sees growth in its investment. And they have the blessings of the government.
You, on the other hand, are expendable. If you cannot pay the rent, the developer will move to evict you. When successful, the developer will advertise the apartment to affluent individuals. And so begins the gentrification of the neighborhood. Yet another problem not seen.
Section 8 Equals Guaranteed Money
One of the reasons developers love this program is because of guaranteed money. Payments made to owners via vouchers is more secure than regular payment avenues. Converting units to Section 8 guarantees the owner/developer funds from the program. This means that the program uses Section 8 as a source of income. And as a qualification for placing someone in a RAD converted apartment.
Note: This perverts New Yorks’ Source of Income law and violates Fair Housing Laws. More on that in a soon to be released article.
Disclaimer
Disclaimer: I am not a lawyer and nothing stated here is legal advice. This article applies to the five boroughs of New York. All information deemed accurate but not guaranteed. Always check the real estate laws in your part of the country.
Comments, Questions, Suggestions?
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