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Elgin named part of nationwide pilot program for public housing funding

DamDuncan was appointed positiExecutive Director Housing Authority ElgJanuary 2012. September 5 2012 | Michael Smart~Sun-Times Media

Damon Duncan was appointed to the position of Executive Director of the Housing Authority of Elgin, in January of 2012. September 5, 2012 | Michael Smart~Sun-Times Media

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Updated: February 12, 2013 2:44PM

ELGIN — The U.S. Department of Housing and Urban Development has named the Elgin Housing Authority one of the first “winners” in its Rental Assistance Demonstration, a pilot program that officially launched Thursday.

That pilot program will allow private investors to put up the money to make needed renovations to public housing developments.

“We created RAD as a comprehensive and innovative strategy to preserve the million apartments in our public housing program that are a precious resource, particularly at a time when so many low-income families are struggling to recover from the worst economic crisis this country has faced since the Great Depression,” U.S. Housing and Urban Development Secretary Shaun Donovan said Thursday during a national conference call.

HUD needs $25.6 billion to keep the 1.2 million public housing units in the country in safe and decent condition, according to a 2011 study. It now is losing 10,000 to 15,000 units each year, “which means even more vulnerable families at risk,” Donovan said.

The HUD secretary blamed “antiquated bureaucratic financing regulations:” Any money to fix up those developments now must come from HUD. And Congress only appropriates about $2 billion for capital repairs each year, according to the department.

RAD will convert the assistance received by public housing agencies and private owners of certain at-risk, federally assisted properties to long-term Section 8 contracts, according to the department. Those contracts will allow owners to leverage millions of dollars in debt and equity to address needs and preserve the units, it said.

Elgin an ‘early adopter’

The pilot awarded 112 initial commitments to 68 public housing authorities — “early adopters” that applied to the program over a 30-day period, according to Donovan. That includes the Elgin Housing Authority, which will use that money to redevelop 146 low-income public housing units at Elgin’s Central Park Towers, 120 S. State St. (Route 31), according to HUD.

In September, the Elgin Housing Authority had shared its plan with The Courier-News to rehab the affordable senior housing at the apartment complex, as well as tear down a troubled home near the complex to make way for a new mid-rise building. That will include some market-rate apartments that aren’t subsidized “since it’s a great location,” said Damon Duncan, executive director of the local housing authority.

That project will host the Elgin Housing Authority about $25 million, of which RAD will cover about $7.5 million, Duncan said.

The executive director is excited about the changes that work will bring to the complex — mixed-income developments work, he said — and hopes the Central Park Towers will become a model for surrounding communities.

“I’ve been in the affordable housing profession for the last 20 years, and to be able to come into a community and leave it better than I found it, that’s what I work for — and not so much for today but for future generations,” he said.

Nationwide, RAD is expected to help to more than 12,000 public housing units generate more than $650 million total in private capital, according to the HUD secretary. That alone will create about 10,000 jobs, including desperately needed construction work, he said.

Donovan said he expects that construction to start this summer. And, like Duncan, he said that’s just the beginning. “We hope this is the beginning of a larger scale change for public housing that really takes all of it toward that mixed use, mixed income model,” he said.

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