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Rural Divide

Bipartisan Support for Rural Housing Keeps Programs Alive

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Federal Reserve Chairman Jerome Powell says economic recovery has been uneven for rural communities and other specific parts of the U.S. Powell addressed the Housing Assistance Council conference in Washington, D.C., on December 6. Photo: Courtesy of HAC. © Rick Reinhard 2018. Used with permission.

Congress has ignored requests from the Trump administration to zero out rural housing programs. But merely protecting current funding will not address rural housing needs adequately, advocates say.

Building stronger rural communities requires creating new housing initiatives, not just preserving the housing stock that is already in place, says the head of a national rural housing nonprofit.

“I’m tired of being in the defensive posture,” said David Lipsetz, CEO of the Housing Assistance Council.  As important as it is to preserve existing affordable housing, “we are not going to keep small towns vibrant and vital by saving that dilapidated 12 unit on the corner of town.”

Rural affordable housing units exist today because they were a public priority years ago. There’s less focus on the issue today, Lipsetz said.

“Take a look at the landscape of all the programs and organizations – we’re all celebrating our 40th and 50th anniversaries right now,” he said. “I’m proud that HAC is approaching half a century of deep commitment and hard work in rural places, but where is the new HAC? Where is the three-year-old and the five-year-old organization that’s coming?”

The new organizations are not emerging because rural affordable housing hasn’t been high enough on the public agenda in recent years, Lipsetz said.

“Rural is not just small urban,” HAC’s communications manager, Dan Stern, told the Daily Yonder. He gave an example of the Low Income Housing Tax Credit which, if adapted to rural markets, could do a lot of good. “But it would be great to have a program that is designed with the realities of rural in mind.”

In an era of divisive politics, rural housing is less partisan than other issues.

“Rural housing is one of the few areas left in D.C. […] where there is true bipartisan support for it,” HAC’s Government Relations Manager Stephen Sugg said.

But challenges remain. Among the most serious: the question of funding. Everyone echoed the same message – housing programs and housing stock already in place need to be preserved, and it won’t happen without money.

“The last few of President Trump’s budgets have zeroed out the core programs that are absolutely essential to what we do” in affordable rural housing, Sugg said. “If that happened people would be on the streets in rural America.”

Congress agreed across party lines to reject the administration’s budget proposal for rural housing.

“Do we have to continue to get lucky like that every year?” Lipsetz asked.

He explained that it would be  more than killing programs already in place. It would mean “crushing the infrastructure that produces and protects that housing […] Cutting the housing budgets down is unacceptable.”

Lipsetz emphasized that the key to the healthy, affordable housing is a holistic approach toward issues of rural and small town America. Without policies taking into consideration impacts on towns of 1,000, as well as 100,000, there will be more harm than good delivered to some of the poorest parts of America.

Affordable housing is critical for addressing other rural policy areas, Lipsetz said, especially for affordable-housing clients such as the elderly, disabled, and very low-income (families making between  $12,000 to $15,000  a year).

“We have never and will never just work on housing,” Lipsetz said. “You can’t. If you’re from a small town you know you got three hats on […] you’re working on multiple issues.”

Lipsetz also said private philanthropy needs to be more involved in rural housing.

“In the era of shrinking government, corporate and philanthropic organizations have a strong interest that they are not serving well in this part of the population,” he said.

“If you’re a big philanthropic entity that says in its mission statement that you care deeply about eradicating poverty and about equity and sustainability […] and you’re not in that huge landscape of persistent poverty, then you are not being true to your mission. And we have seen lots of big philanthropic entities, just like we have seen lots of big political parties, leave their rural narrative.”

Among the guest speakers at the conference was Senator Catherine Cortez Masto of Nevada. The Democrat sits on the Committee on Banking, Housing, and Urban Affairs, the Committee on Indian Affairs, and the Special Committee on Aging, giving her several places to address housing issues.

Cortez Masto is  co-sponsoring a number of bills, including the Affordable Housing Credit Improvement Act, a bipartisan bill aiming to provide 1.3 million additional rental homes nationwide in the next decade and expand the low-income housing tax credit by another 50 percent. The bill would also provide a 50 percent basis boost to developments that set aside 20 percent of units for the lowest income families and 30 percent basis boost for difficult-to-develop areas.

That last incentive is of particular importance to Native American communities. In Nevada alone there are 26 Native communities that could benefit from that development incentive.

Meanwhile, Federal Reserve Chair Jerome Powell spoke about the rural economy. He warned that the “aggregate statistics can mask important variations between different demographic income groups as well as significant regional differences.”

Despite overall readings that indicate labor market to be strong nationwide, Powell stressed that parts of America – rural parts in particular – still lag in benefitting from the current economic expansion.

Powell also highlighted the Fed’s involvement in a digital inclusion initiative and collaborative research with banks and Fed staff on rural affordable-housing challenges.

This story was originally published by the Daily Yonder.

Rural Divide

Rural Housing Group Warns of Looming Crisis for Renters

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HAC Conference Day 2 , Capitol Hilton Hotel. Washington DC Dec. 6, 2018 . Photo: © Rick Reinhard 2018 email rick@rickreinhard.com

The nation is not keeping pace with repairing and replacing more than 400,000 affordable rental units that serve low-income rural residents. Without action, a cascade of rentals will age out of the program, creating a housing gap that could contribute to rural population loss, according to the Housing Assistance Council.

Rural America faces an affordable-housing crisis that, if left unchecked, could raise rents for low-income residents and contribute to rural population loss in coming years, a national nonprofit organization says.

The Housing Assistance Council (HAC) sounded the alarm during its recent biannual conference.

The question is not “if,” but “when” the crisis will occur, according to HAC.

Hundreds of thousands of rental units could age out of a USDA affordable housing program in the next 25 years. The result is likely to be steep rent increases for rural  residents who can least afford it.

The graph shows the potential loss of affordable rental units and properties in rural America. The USDA’s 515 rural affordable rental program currently has more than 400,000 units. Rents are likely to rise to market levels when these projects pay off loans and exit the program. Photo: Housing Assistance Council

“There are about 415,000 units still in existence in this program,”  HAC’s CEO, David Lipsetz told the Daily Yonder at the conference in Washington, D.C. “Every single one of those units is on a time clock. Every single one of those units without some action to recapitalize the property is going to deteriorate.” Without reinvestment, the properties will have to leave the affordable rental program.

“We have these units, we have this stock,” Lipsetz said. “If we don’t fund it well enough to even keep what we have, we’re going to continue to depopulate rural places.” He said failing to allocate enough funding for upkeep and rehabilitation will mean that rural communities will lose an important asset.

Though the rural cost of living is lower than it is in major metropolitan areas, adequate housing is still a big problem in smaller communities, said Stephen Sugg, HAC’s government relations manager.

“We’re learning that in rural housing, there is a crisis and people think that it’s different than urban America,” he said. “It looks different, but very high percentages of rural renters are paying over half their income in rent.” Losing affordable rental units that were constructed through the USDA 515 program will make that problem worse, Sugg said.

Nine out of 10 counties in the United States have rental units built through the USDA 515 rental housing program. Photo: HAC

USDA’s Section 515 Rural Rental Housing is among the few rental housing programs specifically for rural communities, according to the HAC report. The program started in 1963 and has financed more than 533,000 apartment units in nearly 28,000 different developments.

The program supports mortgages for the builders of rental housing for very-low-, low-, and moderate-income families, elderly persons, and persons with disabilities.

Those groups face the gravest danger.  Once the properties that hold their units exit the program after being paid off by the owner, the individuals might find themselves unable to participate in the unsubsidized rental market.

Just how big of an issue for rural America is the housing provided through the Section 515? According to HAC’s data, 87 percent of all counties in the United States have at least one USDA multifamily property.

“The leading edge social science research now tells us that housing is one of the most powerful predictors of your wealth, of your economic mobility, your educational outcomes and very importantly your health outcomes,” Lipsetz told the Daily Yonder.

What worries analysts and researchers at HAC is the number of maturing mortgages on the Section 515 properties that will exit the market. According to the report, nearly 90 percent of USDA’s portfolio is over 20 years old, while over half of those properties are over 30 years old.

“When a USDA Section 515 loan ends for any reason, the property also loses its Section 521 Rental Assistance. Some properties are restricted to low-income use for a period of time after they leave the program. In instances where there is no restrictive use provision, owners may increase rents to levels their low-income tenants may not be able to afford,” states the HAC report.

The numbers of units that will no longer be available in the coming decades to some of the poorest residents in rural America are staggering. We are currently in what HAC describes as the build up phase, meaning that the loss of projects and individual units in the coming several years will remain roughly under 5000 units per year.

But it is after that build up phase, while the affordable housing market enters the first peak phase, when the situation is projected to deteriorate rapidly.

Furthermore, over 48,000 units are located in what is characterized as high risk counties, meaning that the markets are either declining or rapidly expanding.

The consequences of mortgages maturing on the USDA properties will be compounded by other factors as well. Ninety percent of counties with Section 515 properties are counties persistent poverty. HAC estimated that in 77 of those counties Section 515 units constitutes more than 10 percent of the total rental stock.

“Over 5,400 Section 515 properties are in counties where more than half of all rental households are cost-burdened. The majority of these are located in the Southeast and Far West, with a relatively high percentage of African-American and Hispanic tenants,” concluded the report.

This story was originally published by the Daily Yonder.

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Rural Divide

New Report Cites Economic Woes, Addiction and Optimism in Appalachia

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A view of Main Street in Moorefield, West Virginia. Photo: Famartin/Wikimedia Commons

Siblings Hannah and Hilary Heishman were born and raised in Moorefield, a town of some 2,500 in West Virginia’s eastern panhandle.

Hannah and her husband, Kris Jenkins, have built a life for themselves in Moorefield. They’re both veterans and volunteer for all manner of vet-related activities throughout Hardy County – barbecuing at fundraisers, helping out whenever and wherever they can.

Hilary, who now lives in New Jersey, regularly returns home. She was there last week, having dinner with her family, and, she recounts, “The police scanner was on. Because that’s normal, right?”

Hannah and Kris overhear that an ambulance is headed to the local VFW, a place the couple knows well. Hannah is an EMT and all at once, she and her husband jump up from the table, en route to assist.

Hilary tells the story not only for what it confirms about her family, but because, from her perspective, it underscores a truth about rural America at large – one substantiated in a newly released report.

Last week, the Robert Wood Johnson Foundation, National Public Radio and the Harvard T.H. Chan School of Public Health released “Life in Rural America,” reporting the results of a telephone survey of 1,320 adults living in rural communities throughout the country. Hilary Heishman is a senior program officer for the Robert Wood Johnson Foundation who assists with the foundation’s rural grant-making.

Its objective was to gain insight into rural Americans’ views on the economic and health issues challenging their communities. Those surveyed asserted that their most pressing concerns are jobs and the local economy and addiction.

This comes as no surprise to anyone familiar with life today in rural communities – certainly not to Heishman – but neither is she surprised by another significant finding of the report: Throughout rural America, optimism abides.

Rural Americans, the authors of the report write, are largely optimistic about the future, with a majority expressing faith in their community and lauding its virtues – foremost, a shared sense of just that: community.

This finding brought reassurance to Heishman. She was relieved, she said, to hear rural residents express “a lot more optimism and satisfaction with their lives” than is more customarily conveyed through “the stories that people choose to tell about rural America – and about Appalachia in particular.”

Certainly, rural America is, in many respects, reeling. Rural communities are staring down some grim truths.

A majority of those surveyed rate their local economy as only fair or poor. They’re concerned about their job prospects. One in three say they need to receive training or develop new skills in order to keep their job or find a better one. Interestingly, though, those without a college degree are more optimistic about solving major community problems than those with one.

Half of those surveyed say the cost of their family’s health care has caused a major financial problem within the last few years.

Drug misuse is of equal concern.

“In particular,” the authors of “Life in Rural America” write, “opioid addiction/abuse have had major impacts on the lives of rural Americans.” A majority state that opioid addiction is a serious problem in their community; about half say they personally know someone who has struggled with opioid addiction.

In rural Appalachia, drugs are of even greater concern than among rural residents as a whole. Four in 10 in the region consider them the most urgent issue facing their community.

Three out of four say that “the problem of people being addicted to opioids in their local community” is a serious one. Two-thirds say the issue has grown worse in the past five years.

Factor into this the findings of another Robert Wood Johnson study, conducted earlier this year, indicating that Appalachia has higher than average mortality rates in seven of the leading causes of death in the U.S., including addiction and suicide, and Appalachians’ concerns are well founded.

Yet, according to the “Life in Rural America” report, “Most rural adults say their lives have either turned out better than expected or about like they expected…and a majority think their children will be better off financially compared to themselves.”

They like where they live. The authors write that many of those interviewed say they feel attached to their community, identifying its intimacy, the virtues of life in a small town and being around good people as its greatest strengths.

“They’re glad to have the help of neighbors,” Heishman said.

Better public schools, new-skills training and long-term job growth, they acknowledge, is required. Outside help will be essential. Among those who cite the need for that assistance, a majority believe the government will play a primary role.

Another finding that echoes Heishman’s everyday experience, and encourages her, is that more rural residents under the age of 50 than above say they’re active in efforts to solve their community’s problems.

“It’s true,” Heishman said. “In just the last few years, we’ve started to see that trend. More and more people under 50 are stepping in to replace the older adults who had been running and planning everything forever.”

In sum, what Heishman hears in “Life in Rural America” sounds like home.

“I loved hearing this hopefulness and optimism that resonates with my actual experiences,” she said, because that optimism is “how you get through when things aren’t easy.”

“People are not giving up,” she attests. “They’re trying to find local solutions to their problems in lots of different ways. And when you have that, it leads to the kind of hope for the future that we saw in this poll.”

There in Hardy County, West Virginia, Heishman’s optimism is embodied in her sister. Four generations of the Heishman family have owned and operated the local newspaper, the Moorefield Examiner. Hannah – veteran, EMT, community volunteer – is today its associate publisher, maintaining a tradition and helping assure that the voice of a community is heard.

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Rural Divide

School-Wide Free Nutrition Program Attracts Fewer Rural Schools

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A McKinley Middle School student in West Virginia serves himself watermelon from the fresh fruit and salad bar available for National School Lunch Day. Photo: West Virginia Public Broadcasting

Rural schools are less likely to participate in district-wide free lunch and breakfast programs despite the fact that rural families typically have more economic need for the nutrition program, according to a recent analysis from U.S. Department of Agriculture’s Economic Research Service.

The study of the USDA Community Eligibility Program found that a third of eligible rural schools participated in the program, while 46 percent of eligible schools in urban areas did. The study also found that the Southeast had the highest percentage of eligible schools participating in the program.

USDA Economic Research Service calculations based on data from USDA, Food and Nutrition Service CEP election data

The Community Eligibility Program allows schools to qualify their students for free breakfast and lunch based on community characteristics rather than individual family applications. Schools in high-poverty areas may offer free breakfast and lunch for all enrolled students.

Alternatively, schools with slightly smaller proportion of low-income students may offer free meals to most students without having to process individual applications.

In the 2016-2017 school year, more than 20,000 high-needs schools with an enrollment of nearly 10 million students nationwide had provided free meals for students under the Community Eligibility Program.

The goal of the program is to increase the use of the nutrition program and reduce school administrative costs.

The report titled Characteristics of School Districts Offering Free School Meals to All Students Through the Community Eligibility Provision of the National School Lunch Program explored participation rates by district size and location.

The study authors speculate in some cases switching to CEP might increase demand for school meals in ways that put a strain on the district or a specific cafeteria. Also, districts might not be able to overcome the initial administrative hurdle of qualifying for CEP, even though it would save staff time in the long run.

CEP is a relatively new approach to school nutrition programs that followed the update of school meal standards in 2012.

Once the new standard was implemented, according to ERS, “schools in rural areas were more likely than other schools to report increases in student complaints, decreases in meal participation and higher costs due to lower meal volume.”

Rural schools also reported larger increases in the paid meal price due when the Healthy, Hunger-Free Kids Act was implemented during the Obama Administration. With higher prices for paid meals, fewer students would participate and the cost to deliver meals to free students would increase even further.

Report authors state that “rural districts may stand to benefit from the increase in school meal participation that often accompanies CEP adoption. Or, they may be less likely to participate in the CEP due to a lack of outreach or concerns related to the financial viability of the CEP given their meal costs.”

I think the report reinforces a lot of the important aspects of Community Eligibility, the need for growth, the room for growth. It lays out the opportunities and challenges we’ve seen from the program,” said Crystal Weedall FitzSimons, director of School and Out-of-School Time Programs for the Food Research and Action Center.

FitzSimons said certain categories of low-income students are automatically eligible for free school meals if they meet certain conditions. These include students who are homeless, part of migrant families, in foster care, living in households that participate in the Supplemental Nutrition Assistance Program (SNAP) or Temporary Assistance to Needy Families (TANF), or part of the tribal Food Distribution Program.

“That’s a small subset, usually, of kids within a school that would be eligible for free and reduced priced meals,” FitzSimons said.

“Community Eligibility can definitely help support delivery of the school breakfast and lunch in high-need rural districts,” FitzSimons added. “By sharing lessons learned and promoting the benefits of school nutrition programs, we’ll be able to better meet the ultimate goal of making sure that no student has to attend school on an empty stomach. Students just cannot learn when they’re hungry.”

This story was originally published by the Daily Yonder.

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