Business View caribbean - Aug 2023

20 BUSINESS VIEW CARIBBEAN VOLUME 10, ISSUE 8 the Territory’s critical infrastructure for resilience, including hospitals, schools, roads, and utilities, in addition to housing. Despite the competition for resources, VIHA devised a plan to allocate funds for its billion-dollar vision. “Our funding sources include FEMA funds, Low-Income Housing Tax Credit, CDBG-DR, Federal Home Loan Bank, and annual capital funds that the Housing Authority receives,” Graham shares. While addressing the role of the chosen three developers, Graham elucidates how the billion-dollar budget is a fusion of resources from four different entities. “Developers used all available contractors in the territory and subcontractors,” he explains, “but amidst high competition, it’s not enough.” In response, the VIHA has needed to supplement local contractors with general contractors from the mainland and Puerto Rico. The sheer magnitude of the undertaking underscores the necessity of strategic partnerships and the complexities of reconstruction on a grand scale. Embracing RAD: A Pathway to Overcome the Housing Deficit The road to upgrading public housing facilities has always been rocky. Graham explains, “HUD did not put in place reserves to replace the capital improvements 50 years ago when there was a great deal of building public housing in the 50s and the 70s.” Such oversights have led to a staggering $90 billion price tag to bring all 900,000 units of public housing in the country up to code—a figure determined by the National Association of Housing Redevelopment Organization. Recognizing the improbability of securing sufficient funding from Congress for such a grand scale of refurbishment, HUD has provided an alternative route. A noteworthy development is its adoption of RAD (Rental Assistance Demonstration), a HUD-initiated solution. “RAD is simply changing from a public housing subsidy to a voucher subsidy,” Graham explains. The tool seeks to convert public housing operating subsidies into voucher subsidies, improvements, though, is a mere $10 million, barely enough to cover the annual wear and tear. To this end, VIHA has developed a robust asset repositioning strategy. The vision is clear: replace and upgrade the 3,000 public housing units—a task carrying an estimated cost of $1 billion. As part of this ambitious undertaking, VIHA has enlisted the support of three national developer partners. “We brought on three developers,” Graham states. “Each developer will replace or rebuild 100 units each year. Three developers, 300 units a year, ten years, 3,000 units.” Planning, Strategy, and Implementation The Virgin Islands were recipients of a staggering $1.8 billion in recovery funds from HUD, coined as CDBG-DR funds. Although the needs outweighed the available resources, it is projected that the Territory will receive a total of $15 to $20 billion from all sources, covering the approximately $12 billion worth of documented damage. The recovery plan aimed to replace and reinforce