Dominion Due Diligence Group (D3G) partnered with a mid-size Public Housing Authority (PHA) in South Dakota to explore repositioning options for its public housing portfolio. By combining its extensive consulting experience with its comprehensive due diligence services, D3G helped the PHA identify the most viable pathways for long-term asset sustainability. Through this collaboration, the PHA learned the options to reposition its housing, received customized recommendations for beginning, and successfully submitted repositioning applications to HUD for regulatory approvals.
D3G was also brought on board as the environmental consulting partner to guide the redevelopment team through the environmental review process, ensuring all project activities complied with HUD’s requirements and local municipal standards. Our team provided ongoing support, led critical assessments, and facilitated collaboration between the development team, HUD, and the Responsible Entity (RE).
The PHA’s public housing portfolio consisted of 500 units spread over 12 developments, including high-rise apartments, mid-rise apartments, townhomes, contiguous single-family homes, and non-contiguous scattered site units, each with their own unique history and needs. D3G began with an on-site visit to assess the general conditions of the properties and engage with PHA leadership. This foundational step allowed us to align our recommendations with the agency’s operational goals, property conditions, and resident needs. Following the site visit, D3G conducted a Repositioning Study to evaluate the portfolio’s potential for repositioning under HUD’s available programs.
This study considered:
Based on the findings, D3G worked with the PHA to explore repositioning strategies tailored to different properties:
For the remainder of the portfolio, several properties were identified as strong candidates for repositioning using RAD/Section 18 Blend options. D3G is assisting in the application process and providing the necessary due diligence reports, including
A notable challenge in the portfolio was a public housing assisted living facility that no longer met resident needs. The facility was operated by a nonprofit organization, which provided 24/7 staff support. However, the nonprofit had informed the PHA that it would no longer be able to provide staff support for the facility due to a change in state law. Because of the unique challenges facing the property, the PHA turned to D3G for help.
D3G provided ongoing consulting after it issued the Repositioning Study, spearheading efforts to convince the HUD Special Applications Center to consider the unique challenges facing this property. After extended coordination with SAC, D3G was successful in its efforts to meet a Section 18 justification and is preparing a Section 18 application to remove the property from Public Housing. The Section 18 strategy will provide Tenant Protection Vouchers (TPVs), maintain subsidy potential locally, and allow the PHA to pursue a new affordable development that aligns better with community housing needs.
In addition to the regulatory navigation and adaptive problem-solving provided by D3G, we also consulted with the PHA on its relocation plan. D3G helped the PHA coordinate with the nonprofit to ensure that no residents experienced a loss of affordable housing throughout the repositioning process.
With D3G’s assistance, the PHA has successfully completed key applications, studies, and compliance reviews to advance its repositioning efforts. While full implementation is ongoing, these steps position the agency for a smoother transition into HUD’s approved programs, providing regulatory relief, funding flexibility, development experience, and more stable financing. Repositioning its Public Housing portfolio with D3G will transform the PHA into a more nimble, more capable, and better-positioned affordable housing organization.
D3G remains a trusted advisor, providing continued guidance as the PHA moves forward with its repositioning strategy.
