Affiliate Spotlight: Baker Tilly
Baker Tilly Helps Public Housing Authority Use RAD/Section 18 Blend for $5 Million Rehab Project
Baker Tilly is a full-service accounting and advisory firm whose specialized professionals assist developers, owners, managers and affordable housing financing institutions across the nation in financing and developing quality affordable housing. As tax credits, legislation and notices expand, we work with public housing authorities (PHAs) to optimize their recapitalization and redevelopment strategies, as detailed in one client’s story below.
Our Client’s Need
In an effort to bring additional affordable housing to the surrounding community, one PHA had crafted plans to rehab their existing 69-unit public housing building and two fourplex housing assets. The scope of the project included combining some of the smaller units and rehabbing interiors throughout including common areas, electrical and plumbing. In order to move forward on the project, our client needed guidance on how to use the Department of Housing and Urban Development (HUD)’s Rental Assistance Demonstration (RAD) program to convert housing to the Section 8 platform, while also achieving the desired level of rehab on the properties.
Baker Tilly’s Solution
Since the RAD program’s inception, Baker Tilly has played an integral part educating housing authorities of the benefits of the program and how it can be utilized for public housing assets. As such, Baker Tilly was selected as a RAD consultant for the PHA, assisting with the RAD application, concept call, financing plan, RCC package and other requirements needed to complete closeout. Our team of housing specialists recommended using a close out blend by converting 19 of the units under RAD and leaving 50 units to qualify for tenant protection vouchers under Section 18. This effectively blended the RAD units with the Section 18 units for a unique RAD conversion. Thus, permitting more rehab for the building and its residents. Baker Tilly was also essential in composing an RFP to solicit services from a local developer and providing review and input to tax credit applications.
The PHA anticipates the initial closing of the deal in January 2022, followed by a 12-month construction schedule.
After the rehab, the project’s total unit count will include 74 units – a 69-unit building converted to 66 units plus two fourplexes. The anticipated rehab costs are an estimated $5 million with approximately $65,000 of rehab per unit.