On June 25, HUD published a final
rule intended to make it easier to use the Section 8 Project-Based Voucher
Program in the development and preservation of affordable housing. NMHC/NAA are
concerned, however, that the rule will have an adverse impact on the program,
which is designed to leverage private capital to preserve at-risk assisted
Specifically, the issue is whether Davis-Bacon wage rates apply to Component 2 of the Rental Assistance Demonstration Program (RAD-2). These wage rates typically apply to contractors and subcontractors performing work on federal funded or assisted contracts in excess of $2,000.
HUD policy prior to the final rule has been that if an “existing housing” Section 8 Project-Based Voucher contract is executed then any subsequent repairs or rehabilitation work did not require Davis-Bacon wage rates. The RAD-2 program had adopted this policy as well, unfortunately, the final rule indicates that HUD may be about to reverse this longstanding policy.
NMHC/NAA joined with a coalition of industry groups in sending a letter on August 5 to HUD Secretary Julian Castro. The letter seeks clarification that nothing in the final rule changes the policy that Davis-Bacon rates do not apply to RAD-2 transactions.