What’s in Store for PETRA?

At the time it was unveiled last year, the Obama administration’s Preservation, Enhancement and Transformation of Rental Assistance Act, or PETRA (see SF, Summer 2010), was described as either something that could leverage billions of private dollars in debt to resuscitate hundreds of thousands of public housing units or “a formal divestment from and the end of public housing.” The criticism, coming almost entirely from the left, included concerns about PETRA’s lack of a cap on the interest rate lenders could charge housing authorities and questions about what would happen if lenders foreclose. Some questioned the wisdom of infusing private capital into public housing when no HUD secretary in recent memory has even sought sufficient public funds to address its capital needs. These concerns put into sharp relief the differences in policy approach that exist within the housing world and signaled the beginning of a substantive, constructive dialogue.

Then in November, Republicans took the majority, and “PETRA” seemed as ancient as the city of the same name.

But not so fast. Minnesota Rep. Keith Ellison has been carrying the PETRA flame in the 112th Congress in the form of the Rental Housing Revitalization Act, first introduced in 111th’s lame duck session and referred to the House Financial Services Committee. There are many substantive differences, however, between PETRA and RHRA, some of which try to address advocates’ concerns. The Ellison bill, for example, tightens the criteria for when lost units may be replaced with vouchers rather than new units; requires that the HUD secretary be notified in the case of a default; allows the secretary to suspend rental payments and use the funds to cure a default; stipulates not only that the secretary is given right of first refusal before a public housing property is sold following a foreclosure, but that the right must be exercised; and gives residents access to information about their building’s condition and finances.

More information on RHRA and our complete 2010 coverage of PETRA.

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