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What Happened on the Way to the Trump Budget for Rural Development — The Story So Far

The drumbeat for a dramatic re-ordering of federal rural development policy came with the release of the Trump Administration’s so-called “Skinny Budget” for Fiscal Year (FY) 2018 in March. “Skinny” because it was short on details, the first budget of the Trump era proposed a $54 billion reduction in domestic discretionary spending with an increase of the same amount for the Pentagon. It also proposed a $30 billion increase in defense for the current fiscal year (2017), financed in part by unspecified reductions totaling $18 billion from domestic programs. For the U.S. Department of Agriculture (USDA), a 21 percent, or $5 billion reduction was offered that included elimination of rural water/wastewater loans and grants (so much for infrastructure financing), elimination of the Rural Business-Cooperative Service and its programs,  and a big reduction ( 50 percent) in Rural Development staffing. In early May, Congress ignored most of the Trump budget request and approved the Fiscal Year 2017 appropriations bill, which included increases in direct homeownership loans, Mutual Self-Help Housing grants, and rental housing programs. Congress provided the White House some of the defense money, but nowhere near the budget request and did not cut domestic programs. On May 23, the White House rolled out its full blown FY 2018 budget. The budget proposed a 37 percent reduction in community development programs at Department of Housing and Urban Development (HUD), Commerce, and USDA. The budget included elimination of 24 different rural development programs. Overall in terms of Budget Authority (BA) rural development was cut by $867 million or 31 percent. Rural Business programs and the Rural Business and Cooperative Service were eliminated.  Rural Utility programs fell from $8 billion to $6.2 billion, principally due to the elimination of about in rural water-sewer loans ($1 billion) and grants ($480 million).  BA for housing programs dropped from $1.6 billion to $1.36 billion. Virtually every direct rural housing loan and grant program, including Section 502 Direct, Section 504 loan and grants, Section 523 Mutual Self-Help Grants, Section 515, and Section 514/516 Farmworker Housing Loans and Grants, were zeroed out in the budget. Section 521 Rental Assistance, while not eliminated, was funded at $1.345 billion – a $60 million dollar decrease from the FY 2017 rate. Left in the wake of these proposals was a few million more here or there for loan guarantees for multifamily housing and a small increase in community facility lending....
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Nearly 600 Rural Organizations Signify Opposition to White House Proposal for USDA Reorganization and Budget Request in Advance of Congressional Hearing

Rural Organizations from across the country wrote to Congress, voicing opposition to the Administration’s proposal to eliminate the Under Secretary for Rural Development and funding for rural development programs. Washington, D.C.—June 12, 2017— Today, nearly 600 organizations sent a letter to Congress opposing the Administration’s proposal to eliminate the Under Secretary for Rural Development at the U.S. Department of Agriculture (USDA). The letter also lamented draconian cuts to rural development programs in the Fiscal Year (FY) 2018 Budget request that would severely impact people from economically distressed rural communities. Signatures came from organizations located all around the country, and included community development organizations; nonprofit housing developers; state and national trade associations; farmer and agriculture cooperatives; affordable housing organizations; city governments; universities; and tribal governments. “Rural Development has a proven track record of success in providing targeted support in the form of technical assistance grants and direct financial assistance to America’s hardworking rural families,” said Bob Rapoza, executive secretary of the National Rural Housing Coalition. “Even so, rural Americans still face significant challenges to economic prosperity.” Rural communities have higher poverty rates and higher rates of unemployment when compared to big cities and suburbs. The families living in these areas also face higher incidences of substandard housing and rent overburden. In addition, over 90 percent of the water systems with a violation of the Safe Drinking Water Act are small systems with 3,300 or fewer users. The FY 2018 Budget request included substantial cuts – or complete eliminations – to almost all of the programs within the Rural Development mission area. Overall in terms of Budget Authority current Rural Development programs is cut buy $867 million or 31 percent. Specifically, the Rural Business programs and the Rural Business and Cooperative Service, as well as Rural Water and Wastewater Loans and Grants are completely eliminated. In addition, virtually every direct loan or grant program under the Rural Housing Service, including the Mutual Self-Help Housing program, the Section 502 Direct loan program, and the Section 515 Multifamily Housing Loan program, are eliminated as well. The USDA reorganization plan, announced in early May, would eliminate the Under Secretary for Rural Development – the only subcabinet position focused exclusively on assisting low-income rural and farming communities. The proposal claims that this elimination will “elevate” the Rural Development mission area by reporting directly to the USDA Secretary, however the Administration’s FY 2018 Budget request suggests...
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President Trump Signs Executive Order on Prosperity for Rural America

On April 25, 2017, President Trump signed an executive order titled “Promoting Agriculture and Rural Prosperity in America.” The executive order includes seven sections. Section 1 outlines the importance of having a secure and affordable food, fiber, and forestry supply for the country, and that the promoting rural communities is in the national interest. Section 1 also states that it is in the country’s interest to ensure that regulatory burdens do not hamper food, agricultural production, and job creation in rural communities. Section 2 calls for the creation of the “Interagency Task Force on Agriculture and Rural Prosperity,” which will be funded and administratively supported by the U.S. Department of Agriculture (USDA), as permitted by law and appropriations. Section 3 details the membership of the task force. The USDA Secretary will serve as the Chair. Section 4 provides the purpose of functions of the task force. The task force is directed to identify legislative, regulatory, and policy changes to promote rural America. There are 13 general issues that are identified in the executive order. These include advancing the adoption innovative technology for agriculture production and sustainable rural development, expanding educational opportunities in rural areas, empowering state and local agencies to tailor their rural economic development and agriculture programs to meet their region’s need, promote the preservation of family farms and agribusinesses, and improve food safety, among others. The remaining sections are administrative in nature, with Section 5 directing the USDA Secretary to submit a report to the President within 180 days on the task force’s recommendations on policy or legislative changes. Section 6 revokes the executive order signed by President Obama establishing the White House Rural Council. Section 7 provides that the executive order does not affect the existing authority of any department or agency, current law, or confer any new rights or benefits. While the task force is directed to identify changes in policy or law that will “promote . . . economic development, . . . infrastructure improvements, . . . and quality of life” and the executive order includes 13 enumerated areas of focus, notably absent is any explicit directive on – or reference to –   rural housing and water and wastewater services. There is no mention of housing or homeownership or rental housing, and the only reference to “water” relates to water users’ private property rights. Additionally, although the executive order states that the task...
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National Rural Housing Coalition Releases 2017 Impact Report

On Tuesday, April 4, the National Rural Housing Coalition (NRHC) released its 2017 Impact Report. The report, which was funded through the generous contribution of Capital One, included the findings from the 2017 Impact Survey as well as the success stories from 23 rural housing organizations. The purpose of the Impact Report is to inform policy makers and the public of the broad economic and human impact of nonprofit housing organizations – and the programs that they utilize. The survey asked organizations to respond to seven categories, including homeownership activities, rental housing activities, and clean water and sewer activities. In addition, the survey also asked for organizations that provide housing counseling, technical assistance, or are Community Development Financial Institutions, Community Development Corporations or Intermediaries to respond on their activities. The survey analyzed data from 104 organization of their activity in Fiscal Year (FY) 2016. In FY 2016, the 104 responding nonprofit housing organizations helped low-income families and communities secure $1 billion in financing to build, purchase, preserve, or rehabilitate 6,505 units of affordable housing and improved access to rural water and sewer systems for 138,115 of families. This resulted in the creation of 13,920 jobs, over $816.43 million generated income, and $442.2 million in tax revenue. Other key findings from the report include: 84 organizations assisted 3,139 families in rural communities with rehabilitating, constructing, or purchasing their homes. Further, there were 24,104 families on the waiting lists of 26 organizations. 59 organizations helped 378 families participating in the U.S. Department of Agriculture (USDA) Mutual Self-Help Housing Program. These families contributed over $6.885 million in sweat equity by assisting each other in the construction of their homes – averaging $18,215 per family. 22 organizations developed, constructed, preserved, or rehabilitated 2,859 rental housing units. 4 organizations secured over $92 million in financing for 106 water or sewer projects for construction of new systems, repairing or replacing existing systems, consolidating systems, or addressing regulatory compliance issues and provided technical assistance on 97 projects, totaling some $64.35 million. NRHC presented the findings from the Report at a briefing on the Hill in the Capitol Visitor Center on the evening of April 4. In addition to the findings from the briefing, five organizations presented on case studies that are included in the report. Their presentations are provided below.   Marty Miller, the Executive Director of the Office of Rural and Farmworker Housing in Yakima,...
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Infrastructure Includes Substandard Housing

The lack of adequate water and waste disposal systems is a major infrastructure need of rural America and it is directly link to another pressing infrastructure need – substandard housing. Most violations of federal drinking water standards are made by small communities with limited resources to dedicate to compliance.  Small and rural drinking water systems constitute nearly 85 percent of the 53,000 community water systems in America. The 2013 Environmental Protection Agency (EPA) Drinking Needs Assessment indicated a national need of $64.5 billion for small community water systems.[1] This represents 17.4 percent of total national need. The lack of adequate water and waste water systems has a direct impact on the quality of housing. The American Community Survey found that almost 630,000 occupied households in the country lack complete plumbing facilities – meaning they do not have one of the following: a toilet, tub, shower or running water. President Trump proposed to triple funding for EPA’s Safe Water and Clean Water State Revolving Funds (SRFs), which would make $6 billion available. However while approximately 96 percent of all health-based violations occur in systems serving a population of less than 10,000, less than a third of the SRF outlays are directed at these same small systems. Thus, this proposal would not meet the needs of America’s small towns. The National Rural Housing Coalition has recommended that 20 percent of the new proposed level of funding for EPA’s SRFs be transferred to the U.S. Department of Agriculture (USDA) for use in its water and waste disposal loan and grant program and Sections 504 and 533 repair programs. USDA’s Water and Sewer loan and grant financing program is a key component of economic development in rural America.  The agency boasts a portfolio of more than 18,000 active water/sewer loans, more than 19 million rural residents served, and a delinquency rate of just 0.18 percent.  USDA is better equipped to address rural community facilities needs than state SRFs. With the USDA Section 504 Loan and Grant program and the Section 533 Housing Preservation Grant program, rural communities have been able to address substandard housing needs that stem from a lack of adequate plumbing. These programs can provide critical assistance to shore up this infrastructure. For example, with an expanded HPG grant of $400,000 and $370,000 in leveraged funds, Self-Help Enterprises in California provided basic health and safety improvements and drill on-site water wells...
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2016 Omnibus Bill Includes Record Funding For Rural Housing Programs

FOR IMMEDIATE RELEASE    Contact: Bob Rapoza National Rural Housing Coalition Phone: (202) 393-5225   2016 Omnibus Bill Includes Record Funding for Rural Housing Programs WASHINGTON, Dec. 17, 2015 – Yesterday, Congress released the omnibus appropriations bill for fiscal year (FY) 2016. This bill funds several programs, including the Mutual Self-Help Housing Program, Section 521 Rural Rental Assistance, and HOME Investment Partnership Program, above the levels previously included in the House and Senate appropriations bills.  This funding will allow the U.S. Department of Agriculture and U.S. Department of Housing and Urban Development to address the needs of rural communities. “The funding for rural housing programs in this year’s appropriations bill are the highest they have been in recent memory, and at least since the Federal Credit Reform Act of 1992,” said Bob Rapoza, the executive secretary of the National Rural Housing Coalition. “In an era of austerity, partnerships between nonprofit and for-profit organizations, local community governments, and the federal government are essential.” Around 46.2 million Americans live in rural communities, and 8.2 million of them live in poverty. NRHC notes that 2.6 million of those people are children under 18.  Concentrated poverty leads to decreases in affordable standard housing, health conditions, and educational outcomes.  Even though housing in rural communities is generally less costly, because of lower incomes, higher poverty rates, limited housing stock, and limited access to credit, many rural Americans live in inadequate and substandard homes. Programs funded by the omnibus will provide the resources needed to develop and preserve affordable rural housing.  Section 521 Rural Rental Assistance payments are made to owners of USDA Section 515 financed rural multi-family homes to subsidize the rent payments of low- and very-low income tenants, who often have no other housing option. The funding level ensures all current very-low income tenants, including many elderly and persons with disabilities, will continue to have a safe, decent place to live. With the Mutual Self-Help Housing Program, 8 to 12 low- and very-low income family groups build their own homes with technical assistance and supervision from nonprofit housing organizations.  Self-help families put in an average of 1,189.9 labor hours in constructing their homes, while working regular jobs and caring for their children. The President’s budget proposed a significant cut to the Self-Help program, but Congress rejected this reduction. The omnibus will fund the program at the FY2015 level. The HOME Program, funded at $950 million for FY...
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