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Public housing in Wichita is coming to an end.
In late January, the Wichita Housing Authority announced plans to sell its 352 single-family public homes.
And last September, the authority closed on a deal to convert its 226 other public housing units, which are apartments for seniors, into Section 8 housing. Section 8 units receive federal money but are not considered public housing.
As Wichita steps away from public housing, it’s joining a larger shift across the U.S.
The nation’s public housing stock has decreased by about 360,000 units since 1996. And housing authorities in the Midwest are undertaking nearly identical plans to Wichita’s. The Tulsa Housing Authority is selling its single-family public housing while converting 11 of 12 apartment-style buildings to Section 8. The Oklahoma City Housing Authority is in the early stages of converting 100% of its public housing, either by selling it or converting it to Section 8.
“It is a trend happening nationwide,” said Kirk McClure, professor emeritus at the University of Kansas who studies housing.
Why the move away from public housing?
Public housing is funded federally, by Congress. But those dollars have remained mostly stagnant for years.
“If you keep the budget the same, and inflation is running 2% — right now, of course, it’s running 6 to 7% — the buying power of the dollar is going down,” McClure said. “That’s especially painful when the roofs are getting older and older.”
Most public housing units were built in the 20th century. As the units age, the need for maintenance grows. The backlog of public housing capital repairs nationwide is estimated at $70 billion. In Wichita, that number sits at about $18.9 million just for its single-family homes.
Public housing is rarely funded by state or local governments, said Alex Schwartz, a professor of urban policy at the New School. In Wichita, Tulsa and Kansas City, Mo., federal dollars are the only source of funding.
Instead of adding more funds to public housing, Congress in 2012 created the Rental Assistance Demonstration (RAD) program.
What is RAD?
RAD essentially changes the classification of housing units from public housing to project-based Section 8 housing. Units are no longer owned by the federal government but by a public or nonprofit entity, like a public housing authority.
Project-based Section 8 housing is a partnership between the U.S. Department of Housing and Urban Development (HUD) and landlords. The rent is set at market rate, but low-income tenants pay 30 percent of their income in rent while HUD makes up the difference.
“The reason to do that is because the public housing program has a federal requirement that says a public housing property can have no debt,” said Sally Stang, director of Wichita’s Housing and Community Services Department. “So that really restricts public housing from being able to leverage resources to try and do rehabilitation.”
But owners of Section 8 units can use loans and other funding to pay for renovations. Wichita is using low-income housing tax credits, which were bought by a private investor, to help fund renovations of the 226 apartments. This includes replacement of heating and air conditioning systems, electrical systems and windows, according to The Active Age.
When the federal government rolled out RAD in 2012, it capped the number of public housing units that could be converted to Section 8 at 60,000. That number was bumped to 455,000 units in 2018. So far, about 195,000 units have been converted.
In Kansas, 447 units have been converted using the RAD program.
When Aaron Darden arrived at the Tulsa Housing Authority in 2017, the entity oversaw 12 multifamily buildings that were run as public housing. Five years later, six have been converted under RAD. Darden, the president of the Tulsa Housing Authority, plans to oversee the conversion of five more buildings.
In Kansas City, Mo., the housing authority receives about $4 million a year from HUD to undergo property improvements, said Edwin Lowndes, executive director of the Housing Authority of Kansas City. But the authority’s actual need is closer to $8 million a year, he said. The shortfall leads to deferred maintenance. In one case, the authority had to demolish an uninhabitable apartment building.
“Instead of being strategic with your funds and being able to plan out five years — in 2024, I’m going to replace 120 roofs, for instance — I have to say, well, I only have enough funding for 15,” Lowndes said. “So, that’s my plan.”
To address this, the authority is currently converting 103 housing units using RAD. HUD authorized the agency to convert a total of 465 of its 1,900 units.
The trouble with RAD
Stang said even with RAD, it’s difficult to find private money to finance upgrades to single-family housing. This is especially the case when homes are scattered across the city, like in Wichita.
“We could not find an investor or a lender, including HUD, that was willing to invest in the single-family portfolio,” Stang said. “Even HUD said single-family homes are too expensive and too difficult to maintain and manage.”
The Wichita Housing Authority spent three years trying to use RAD for its single-family homes before rethinking its strategy in 2019. In 2022, the agency announced plans to sell the homes.
Knowing the challenges of RAD with single-family homes, Darden wasn’t willing to use the program for its 217 single-family homes.
“A RAD conversion on a scattered site property — that is very difficult to do,” Darden said.
Instead, the Tulsa Housing Authority has plans — like Wichita — to sell off all single-family homes. Two buyers are purchasing the 217 homes and agreed to keep them affordable, Darden said.
Oklahoma City, too, plans to sell the majority of its single-family public housing while the housing authority uses RAD to convert eight of its public housing apartment complexes. All of the single-family homes will be sold to a nonprofit that shares board members and staff with the housing authority, according to Mark Gillett, executive director of the Oklahoma City Housing Authority.
What does this mean for public housing residents?
For public housing residents, what happens as cities change public housing approaches depends on whether they live in single-family homes that are being sold or multifamily units undergoing RAD conversion, said Ed Goetz, a professor at the University of Minnesota who specializes in housing.
In Wichita, residents in single-family homes will have the first opportunity to buy the unit. If they do not buy, they will receive a housing choice voucher. These vouchers can be used to rent private housing in Wichita. Tenants pay no more than 40% of their monthly income in rent and the federal government provides the rest.
As for the RAD conversions, Goetz says it depends on the specifics of each project.
In all RAD conversions, tenants’ rights include maintaining residency in the property, paying no more than 30% of income in rent and a guarantee of lease renewal. Tenants cannot be evicted without cause. And a long-term contract is meant to ensure that units stay affordable in perpetuity.
“Unlike previous public housing revitalization programs, there are several protections built into the RAD program so that tenants are able to stay,” Schwartz said.
“There are concerns that housing authorities won’t follow all the rules in terms of protecting tenant rights,” Schwartz said. “There’s been some concern that under new management, they’ve been more aggressive about evicting tenants.”
In Wichita, the company that will ultimately own the 226 units being converted under RAD is a partnership between the city of Wichita and KBK Enterprises, the developer overseeing the renovations. The city owns the majority of interest in the company. A city document notes that after construction is complete, KBK Enterprises Inc. will exit the partnership, leaving only the city of Wichita.
Meanwhile, Mennonite Housing, a nonprofit developer that builds affordable housing, will manage the properties in Wichita.