EDF and the Texas PACE Authority have recently released a new report on “PACE Financing Opportunities for the Affordable Housing Sector,” authored by Laura Sanchez. You can download it here: pace-for-aff-housing_final-111416-edf-kpt.
While the paper is mainly focused on Texas, it also concludes that “there are significant opportunities in Texas and nationwide for the affordable housing sector to leverage PACE as a financing tool for energy and water saving projects.” In particular,
The greatest opportunity lies in Public Housing Authorities (PHA) participating in the U.S. Department of Housing and Urban Development’s (HUD) Rental Assistance Demonstration (RAD) program. Properties undergoing RAD conversions have the opportunity to leverage private debt and equity to make property-wide improvements, including efficiency retrofits. This is a nationwide initiative by HUD, and the transition presents a prime opportunity to ensure affordable housing properties take advantage of PACE. In Texas, there are over 6,500 units in this stage… Additionally, properties that are funded by the U.S. Department of Agriculture Rural Development (USDA RD) programs can utilize PACE financing.
While the number of RAD units in New Jersey is much smaller, the report still shows that there are 679 of these in New Jersey, and the report notes that “the RAD conversion program and USDA RD properties are just two of the many funding structures that could take advantage of PACE financing.” In fact, there are over 87,000 affordable housing units with some form of rental assistance in our state.
Surprisingly, the report recommends that the Texas PACE Act be amended “to make government-owned affordable housing properties, as well as new development of affordable housing properties, eligible for PACE financing.” The current proposed NJ legislation, A2080/S1570, would already allow multifamily properties, including those owned and managed by public housing authorities, to use PACE.