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The voice, and complaints, of rural voters will be a constant refrain in this week’s election post-mortems. But as pundits discuss the economic challenges of these areas, it’s important an under-recognized pocketbook issue gets more attention: affordable housing and development assistance. According to a draft report by the National Rural Housing Coalition on the issue rural renting housing, huge cuts in government funding for housing support in these communities has created a serious problem.
“In smaller, poorer areas, it’s very difficult to get the private sector to come in and pay for housing,” says Bob Rapoza, the group’s executive secretary. “The federal programs that have been lifelines for these areas have really been cut back. Development funding for these areas has been cut by 75 percent over the last 40 years.”
Statistics paint a grim picture of rural poverty, and insufficient efforts to improve housing affordability, especially in tribal lands and for seasonal farmworkers. The rural poverty rate, 17.7 percent, is roughly three percent higher than urban areas, with nearly one in seven households earning less than $15,000 per year. That means housing costs have an outsized impact on budgets; about 50 percent of poor rural Americans have housing expenses that exceed half of their incomes.
Solutions to these issues can be especially challenging, since the issue often doesn’t get extensive coverage. A lack of density means developers don’t have the same incentive to work on large, affordable developments that provide economies of scale so these can be harder to kickstart. Existing tools for creating affordable housing, such as the Low-Income Housing Tax Credit (LIHTC), can be difficult to utilize in smaller, more spread-out markets.
The situation wasn’t always quite this challenging, says Rapoza. The government, through various organizations such as Housing and Urban Development and the Department of Agriculture, funded robust programs to finance the construction of rural rental housing—such as Section 515, which helped fund roughly half a million units in the 1990s—and offered subsidies for renters. Starting in the ‘80s, those subsidies were slowly cut, and in 2012, the USDA halted new construction of affordable rental housing through Section 515.
“For rural economies, federal support in various kinds is a big part of the picture,” he says. “There’s not much new construction going on.”
Rapoza says there is potentially some help on the way. Senators Orrin Hatch and Maria Cantwell have pushed a bill, the Affordable Housing Credit Improvement Act, that would expand the LIHTC by 50 percent, in a bid to help spur more affordable housing construction across the nation, including rural areas. Rapoza hopes, as housing and rental issues become more prevalent, that the bill is considered next year, and more attention it turned to funding additional support.
“Smaller communities, and depressed communities, need support for revitalization,” Rapoza said. “That’s a message we’re glad to share.”
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