Three Issues Contributing to Rural America’s Affordable Housing Crisis

April 19, 2019 | by Katie Claflin

Categories: Affordable Housing, Rental Housing

Housing affordability, long considered primarily an urban issue, is now becoming a major concern in rural areas.

According to an article published in Stateline, an initiative of The Pew Charitable Trusts, nearly a quarter of America’s rural counties have seen a significant increase in the number of households spending half of their income on housing. Spending this much on housing categorizes these households as “severely cost-burdened," which means they often have difficulties paying for food, medical care or other necessities.

Why are rural areas becoming less affordable?  Stateline emphasizes three issues contributing to the affordable housing crisis.

1. Loss of High Paying Jobs

Some areas, such as a cluster of coal-dependent counties in Kentucky, Tennessee and Virginia, have seen a loss of high paying jobs in recent years. This is contributing to lower wages and higher unemployment, making the workers less able to afford the existing housing stock.

2. Influx of High Paying Jobs

In contrast, other rural areas are experiencing economic revitalization and an influx of higher paying jobs.  The population boom that results then drives up the demand, and ultimately the cost, of the surrounding housing options.

Stateline uses Irion County, Texas (population 1,516) as an example of this phenomenon. Fracking and wind farms have tripled the county’s energy jobs over the past six years and reduced unemployment from 5.3% to 3.2%.   As a result, average monthly rents rose 44%, and the percentage of severely cost-burdened households increased from 4% to 13%.

3. Loss of Federal Housing Subsidies

And finally, Stateline argues that the recent loss of federal housing subsidies is further contributing to rural America’s affordable housing crisis.  Citing a 2018 study conducted by the Housing Assistance Council, Stateline reports that more than 2,000 rural rental properties have left the US Department of Agriculture’s Section 515 program in the past 10 years as the loans on the properties mature and the affordability restrictions expire.  

Once a property leaves the program, it is no longer required to adhere to rent restrictions or reserve units for low-income households.  The tenants also lose any rental assistance they receive from the USDA.  

TSAHC’s Commitment to Rural Areas

TSAHC recognizes the unique challenges facing rural communities.  In 2018, we launched a Rural Rental Preservation Housing Academy with Enterprise Community Partners; Motivation, Education and Training, Inc.; the Federal Reserve Bank of Dallas; and the Rural Rental Housing Association of Texas. The five-session academy focused specifically on helping rural housing providers preserve properties financed by the USDA Section 515 program.

In February 2019 TSAHC was also awarded a $3.75 million grant from the Capital Magnet Fund to finance the construction or rehabilitation of at least 875 additional rental units over the next five years. TSAHC has committed to using at least 40% of this award to create more affordable rental units in rural areas.

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