Expansion strategy

In addition to redeveloping and rehabilitating its existing properties, PHA’s Opening Doors Initiative will continue to pursue expansion opportunities by acquiring existing multifamily developments and developing vacant land and distressed properties into affordable housing. Three recent examples are Gordon Apartments, Oakdale Apartments and Strawberry Mansion Apartments.

Strawberry Mansion is an example of PHA’s ability transform a distressed site into affordable housing.

PHA’s Opening Doors Initiative utilizes the Faircloth-to-RAD program (also known as “Restore-Rebuild”), a new option the U.S. Department of Housing and Urban Development (HUD) created in 2021 to help public housing authorities build or acquire more deeply affordable apartments.

This option supports a public housing authority’s ability to create affordable housing units up to federal government limits as set by Congress in 1998 through the Faircloth Amendment to the Housing Act.

Many public housing authorities – including Philadelphia - operate fewer public units than their Faircloth limit due to a lack of federal funding. Today, PHA has over 12,900 units, down from more than the 20,000 it had when its Faircloth limit was set in 1999.

The Faircloth-to-RAD option helps housing authorities develop new housing up to their Faircloth limit by using HUD’s mixed-financing program with pre-approval to convert the property to a long-term Section 8 contract after construction through HUD’s RAD Program. The RAD pre-approval provides a reliable rental subsidy and helps public housing authorities and their partners finance and underwrite these projects.

PHA has already used Faircloth-to-RAD to create scores of new affordable apartments, essentially creating new units to replace aging units that were demolished. It can create at least 6,700 more units before reaching its current Faircloth limit.

In addition to acquiring existing multifamily housing developments, PHA is working with the development community, and local and state funders, to create new housing opportunities using Faircloth-to-RAD. While PHA doesn’t have the capital funding to contribute to these transactions, it can greatly facilitate the creation of new affordable housing by using its authority to make Section 8 contracts available to affordable housing developers. More information is available below: