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Last week, HUD formally launched one of our signature initiatives, the Rental Assistance Demonstration (RAD), with events across the country, FHA Commissioner Carol Galante flew to Fresno, CA, Assistant Secretary Sandra Henriquez spent a day in Cleveland, OH and Secretary Shaun Donovan visited Savannah, GA. We met with public housing agencies (PHAs), owners, partners, and residents of properties that were enthusiastic recipients of some of the first RAD awards.

RAD offers a long-term, cost effective solution to preserve and enhance the country’s public and affordable housing stock—including leveraging public and private funding to make much-needed improvements—by allowing PHAs and owners of certain at-risk, federally-assisted properties to convert their current assistance to long-term project-based Section 8 contracts.

In a tightened budget environment, PHAs and owners have to make tough choices between repairing roofs and replacing plumbing—or worse, demolishing units altogether—because there simply isn’t enough money to go around. At a time when the public housing capital need backlog stands at $25.6 billion and we continue to lose 10,000 to 15,000 units of affordable housing every year, we knew we had to find another way to maintain and improve our affordable housing stock other than with direct federal funding.

For over 40 years, Section 8 contracts have enabled some private owners of assisted housing to raise millions of dollars of necessary debt and equity investments for the maintenance and rehabilitation of their properties. Under RAD, more public and affordable housing owners will now be able to utilize Section 8 contracts in the same way—and potentially combine them with other affordable housing resources, like Low Income Housing Tax Credits.

In the initial 30-day RAD application window for public housing properties, awardees have proposed to generate over $650 million in private debt and equity investments to reduce the capital needs backlog in their properties, preserve over 12,000 public housing units, and support 9,000 local jobs in communities nationwide—all without any additional government funding.

By finding ways to get private capital off the sidelines and back into our communities RAD is an example of the type of smart government that we require, especially in a difficult budget environment. We’re committed to using innovative, proven solutions to address the needs of our local partners giving them the flexibility and support they need to preserve this critical resource.

We’ve proven that public-private partnerships can help preserve America’s public and affordable housing in a manner similar to other community-based housing developments—which is why we’ll continue to work to make this tool available to PHA and affordable housing owners in order to preserve more affordable homes for families across the country.

Sandra Henriquez is the Assistant Secretary for HUD’s Office of Public and Indian Housing and Carol Galante is the Federal Housing Administration (FHA) Commissioner.