HUD published a notice in the Federal Register on December 11 announcing changes to the Rental Assistance Demonstration (RAD) program for property conversions to Project-Based Rental Assistance (PBRA) under RAD’s second component.
According to HUD, the proposed changes are intended to maximize the resources for
- Property improvements for low-income households living in properties converted under the Second Component of RAD;
- Aligning RAD requirements more closely with the underlying PBRA statutory and regulatory requirements related to the Davis-Bacon Act of 1931.
The notice clarifies that execution of a PBRA contract – as a result of the conversion of Rent Supp, RAP, Mod Rehab or Mod Rehab SRO contracts through RAD – after the publication of this notice, does not trigger Davis-Bacon prevailing wage requirements.
NMHC/NAA have made reforms to Davis-Bacon a priority, sending letters to Secretary Acosta of the Department of Labor (DOL) and HUD Secretary Carson (DOL Letter, HUD Letter) asking for critical changes to the Davis-Bacon wage determination rules – unwarranted split-wage decisions and disruptive updates on effective dates for wages – as well as asking HUD to clarify and confirm that Davis Bacon applies to HUD programs that are used to support new construction of affordable housing and excludes applicability to any programs (including RAD) that are used to preserve existing affordable housing properties.
Prevailing wage requirements drive up development costs for a number of affordable housing programs administered by HUD.
NMHC/NAA will continue to work with HUD to exempt programs from this and other costly regulatory requirements.
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