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Rural Housing Blog



Administration Releases Third Supplemental Emergency Funding Request

Posted by on Nov 18, 2017 in Budget, Resources | 0 comments

Friday, November 17, 2017, the Administration released the third supplemental emergency funding request in response to Hurricanes Harvey, Irma, and Maria, as well as the California wildfires. The White House is requesting an additional $44 billion in Fiscal Year (FY) 2018 for states impacted by the storms and fires, in addition to Federal property repairs.

The Administration’s request letter, submitted by Office of Management and Budget Director Mick Mulvaney, identifies five programs/activities to fund. Those programs are traditional disaster relief provided by the Federal Emergency Management Agency (FEMA) and the Small Business Administration (SBA); emergency agricultural assistance; educational recovery fund; funding to repair or replace damaged Federal property and equipment; and the Community Development Block Grant Disaster Recovery program, focused on flood mitigation projects. The Administration does not make a request on funding for any programs administered by the U.S. Department of Agriculture (USDA).

 

Program Request
FEMA and SBA $  25,200,000,000.00
Emergency Agriculture Assistance $     1,000,000,000.00
Education Recovery Fund $     1,200,000,000.00
Repair and Rehabilitation of Damaged Federal Property/Equipment $     4,600,000,000.00
CDBG – Disaster $  12,000,000,000.00
Total $  44,000,000,000.00

 

The Administration also requests tax relief for families in areas impacted by the wildfires in California, including non-itemized deductions for casualty losses; waiving the current-law requirement that losses exceed 10 percent of adjusted gross income; penalty-free access to retirement funds; disaster-related employment relief; earned income tax credit reporting-year flexibility; and enhancement of charitable giving incentives. These provisions are similar to the tax relief provided in Public Law 115-63, the Disaster Tax Relief and Airport and Airway Extension Act of 2017, to the areas impacted by Hurricanes Harvey, Irma, and Maria.

The letter also includes several other requests from the Administration, including the need to reauthorize and reform the National Flood Insurance Program (NFIP), suggestions of offsets, a recommendation to extend the non-defense Joint Committee mandatory sequestration resulting from the 2011 Budget Control Act (BCA), pursuant to Section 251A of the Balanced Budget and Emergency Deficit Control Act of 1985; and additional funding for the Department of Defense (including $4 billion for missile defeat and defense enhancements to counter the threat from North Korea and $1.2 billion in support of the Administration’s South Asia strategy, as well as $1.6 billion for the boarder wall).

In a separate document, the Administration outlined their suggested offsets, which total $59 billion and would largely come from extending the sequester. Many of the proposed offsets are reiterations of eliminations or reductions included in the FY 2018 budget request – which Congress has already largely rejected. Those offsets include $196 million for Rural Economic Development Grants; $25 million for direct and guaranteed business and industry loans and rural business development grants; $8 million for the Rural Energy Savings Program; and $800 million for the Special Supplemental Nutrition Program for Women, Infants, and Children.

Members of Congress are already sounding off on this request. Senate Majority Whip John Cornyn (R-TX) has called the request “wholly inadequate.” Representative John Culberson (R-TX-7), a senior House appropriator, is quoted saying that this request “would sabotage what has been an incredible response by President Trump to Hurricane Harvey up to this point,” and that this request “falls severely short of the bare minimum needed to continue repairing the damage of Hurricane Harvey in Texas in every aspect. OMB’s response to the largest housing disaster, in terms of volume and dollar amount, would be laughable if it wasn’t so serious.” In October, Cornyn and Culberson signed on to the $61 billion request submitted by Texas Governor Greg Abbott for Texas relief funding.

Puerto Rico’s advocates on the Hill, including Representative Nydia Velazquez (D-NY-7), similarly state that this request would “hinder the Puerto Rican government’s capacity to address the situation on the ground.”

Congress has already provided $51.75 billion for disaster recovery since September (P.L. 115-56 and P.L. 115-72). In the case of both of the previous supplemental requests from the Administration, Congress provided additional funding over the requested amount. It is expected that they will do the same in this instance. Congress will likely take up the supplemental after they return from the Thanksgiving recess. We will keep you posted as things move forward.

Disaster Assistance for Rural America

Posted by on Oct 6, 2017 in Key Issues, Resources | 0 comments

In the past month, three major hurricanes have devastated coastal communities in Texas and Florida and virtually the entire island of Puerto Rico and the U.S. Virgin Islands (USVI). Damage assessments for Texas and Florida amount to over $270 billion and details are not yet known for Puerto Rico and the USVI. By contrast, total damage in the Gulf Opportunity Zone, or GoZone, established after Hurricanes Katrina, Rita, and Wilma in 2005, totaled around $200 billion.

Hurricane Harvey made landfall near Rockport, Texas on August 24 as a Category 4 storm. Although Harvey was downgraded to a tropical storm, it resulted in an unprecedented amount of rainfall along the Texas Gulf Coast. A State of Emergency was declared on August 25, with 39 counties qualifying for individual assistance from the Federal government (FEMA-4332-DR). Of those counties, 21 are nonmetropolitan counties. Over 835,000 Texans have registered for individual assistance, totaling over $783 million, of which $572 million is for housing assistance. Over 21,000 families checked into hotels for transitional sheltering, out of 338,000 eligible families. Total damage estimates for Texas exceed $200 billion.

Less than a week after Harvey, Hurricane Irma developed in the Atlantic and struck Florida as a Category 4 storm. In Florida, a state of disaster was declared on September 10 (FEMA-4337-DR), and 48 counties were identified for individual assistance, including 14 nonmetropolitan counties. Over 1.9 million people have registered for assistance in Florida, totaling more than $668 million, of which $438 million is for housing assistance. FEMA reports that nearly 8,000 Floridian households have checked into a hotel for transitional sheltering, but that nearly 640,000 are eligible to do so. Total damage estimates from Irma, which include Florida, Puerto Rico and the USVI, exceed $50 billion.

Puerto Rico, which was also struck by Hurricane Irma, suffered catastrophic damage from Hurricane Maria on September 20. A disaster declaration was made on September 20 (FEMA-4339-DR) for 54 municipalities in Puerto Rico, including six that are nonmetropolitan.[1] The extent of damage to housing has not yet been reported, but the situation on the island is reported to be dire. As September 30, only 45 percent of the population had access to drinking water, and of the 52 waste water treatment plants, just nine were operational.

One of the challenges of recovery assistance is getting to hard to reach places – like small rural communities – to ascertain the extent of the damage. The Rural Community Assistance Partnership has had teams in the field in Texas, South Carolina, and Florida, and have conducted assessments of 200 water systems, mostly in Texas. They are now starting their work in Puerto Rico. As these assessments turn into damage estimates, the size and scale of the cost of rebuilding will be clear.

The rapid succession of such powerful hurricanes brings to memory the hurricane season of 2005, when Katrina and Rita struck the Gulf States. The total damage following those storms was $197 billion. The damage from Harvey in Texas and Irma in Florida and the Caribbean will likely be over $270 billion. The final estimate for Maria in Puerto Rico is not yet available, but it seems likely the total damage from the three storms will close to $400 billion.

Comparing damage estimates[2] (2017 dollars, millions):

Disaster(s)Total Damage
Katrina $197,000
Harvey and Irma$272,400
Harvey$218,600
Irma$53,800

After the 2005 hurricane season, the U.S. Department of Agriculture (USDA) and its Rural Housing Service (RHS) played an important role in assisting the residents of rural communities in the devastated region. It is apparent that USDA and its rural development programs will play an important role in assisting the long term recovery of the communities hit by the storms.

Already, USDA Rural Development (RD) has issued a letter to USDA homeowners impacted by natural disasters (dated September 1, 2017) in response to Hurricane Harvey.[3] The letter instructs USDA borrowers to contact RD to obtain a claims package and brief instructions on available assistance, including loans for repairs for borrowers without flood insurance, payment assistance for borrowers whose income has been reduced for the foreseeable future because of the storm, and moratoriums on payment for borrowers with excessive, non-reimbursed storm-related repair expenses.

Katrina and Rita hit the Gulf Coast in late summer 2005, and Congress passed the GoZone Act in December. Homeownership loans, home repair grants, Rental Assistance and vouchers, and water-sewer financing, as well as a number of administrative measures were all put to use in the GoZone legislation. Congress is preparing a second disaster supplemental for Puerto Rico, which will provide disaster assistance for short term. However it may be a few weeks before the dust settles and detailed damage assessments are completed, meaning that comprehensive legislative action may take a while.

Rural Housing Service and Disaster Response After Katrina and Rita

Following Hurricanes Katrina and Rita, Congress made available $120 billion in directing spending and tax incentives to the GoZone. Under P.L. 109-234, total outlays for RHS programs for the 2005 hurricanes were $63 million. The Disaster Relief and Recovery Supplemental Appropriations Act of 2008 (P.L. 110-329) provided $38 million for activities for RHS for areas impacted by Hurricanes Katrina and Rita. USDA RHS provided housing relief to residents – both for families that were current borrowers and tenants of RHS properties and those that were not – in communities impacted by the storm in the form of payment moratoriums, moratorium on initiating foreclosures under the single family guaranteed homeownership loans, loan forgiveness, loan re-amortization, and refinancing. RHS also provided temporary Rental Assistance to displaced families.

Single Family Housing

After Hurricanes Katrina and Rita, Congress provided emergency housing funding to several Federal agencies, including USDA RD, through the Emergency Supplemental Appropriations Act. By September 30, 2006, RD had obligated $179,742,190 in guaranteed homeownership loans; $80,627,941 in direct single family housing loans; $2,626,864 in home repair loans; and $15,127,127 in home repair grants.

As of October 2006, RD field offices in Mississippi and Louisiana received more than 13,000 loan and grant applications, which was significantly more than the typical demand. As an example, three offices in Mississippi typically processed just 25 applications each year, however by February 2006, they had received over 1,675 applications.

Administrative Action

USDA took several steps to assist those impacted by the hurricanes. On September 8, 2005, RHS authorized waivers for 60 days for individuals and families directly impacted by Hurricane Katrina. The waivers included:

  • Increasing the rural area designation to areas with populations for up to 50,000;
  • Relaxing the income and debt requirements for low-income applicants;
  • Allowing the use of in-file credit reports in lieu of residential credit reports;
  • Allowing field staff to disregard derogatory credit reports after the disaster, and the need to verify employment, wages, and bank deposits;
  • Authorizing loan approvals without appraisals;
  • Increasing the insurance claim check endorsement limit to $15,000, and the maximum number of days for completion of work to 180 days; and
  • Re-amortizing loans automatically after the moratorium period.

On September 14, 2005, RHS took further action in an unnumbered letter that increased the rural designation from 50,000 to 75,000 for impacted communities in Alabama, Louisiana, and Mississippi. RHS extended the designation for 3 years from date of disaster declaration. The designation was again extended to two more communities in Alabama on September 19, 2005.

On September 26, 2005, RHS granted all borrowers an automatic 6-month moratorium on loan payments. On November 8, 2005, RHS extended previously announced 60-day waivers to one year. On December 6, 2005, RD announced the continuation of a foreclosure moratorium on guaranteed loans in the areas impacted by the hurricanes. On February 27, 2006, the moratorium given to borrowers impacted by Hurricane Wilma was extended for another 120 days, subject to restrictions that had to be met by loan holders by March 31, 2006.

Rental Housing

RHS also adopted several policies to assist people impacted by the hurricanes though its rental housing programs. RHS identified vacant units in properties around the country financed through the multifamily housing programs and asked owners to place disaster victims into those units. RHS also allocated nearly $17 million from its appropriated Rental Assistance funding to pay for housing costs for up to six months for victims of the storms. Within a few weeks after the hurricanes, almost 8,000 people displaced by the storm had been placed into about 2,600 USDA multifamily housing units in 32 States. In total, RD placed nearly 11,000 victims into over 4,100 USDA rental units in 45 States and provided $2.6 million in emergency Rental Assistance.

Administrative Action

As with the single-family housing programs, RHS made several announcements and policy changes to assist impacted families in the weeks and months after the hurricane. On September 1, 2005, RHS authorized State directors to give temporary transfers of Rental Assistance from RHS properties made uninhabitable by the hurricanes to properties with habitable units. Displaced tenants from those properties received a Letter of Priority Entitlement, which allowed them first priority for vacant RHS units.

On September 12, 2005, RHS issued another letter that included specific guidance to State directors on the types of emergency Rental Assistance available to disaster victims, the procedures for requesting assistance, and the number of obligations available for each State, initially obligating funds for 3,000 units nationwide. RHS also asked State directors to identify available units for occupancy and report the number of disaster victims that had been placed in their states.

On September 20, 2005, RHS officials informed the State directors that additional Rental Assistance had been obligated for 7,000 units and authorized the use of multifamily property funds to cover the cost of transporting hurricane victims from shelters to RHS multifamily properties.

RHS issued another letter on January 3, 2006, informing State directors that as of January 8, 2006, the agency would no longer accept hurricane victims into RHS multifamily units on an emergency basis, and that there would be no extension to the 6-month term of emergency Rental Assistance, except in cases of hardship where a 2-month extension could be requested. RHS encouraged hurricane victims to register with FEMA or HUD for additional assistance. As of May 31, 2006, USDA provided Rental Assistance to 3,124 displaced disaster victims.

USDA extended the lease of USDA multifamily housing units to all hurricane evacuees – regardless of whether they were living in USDA-financed properties (single or multifamily) prior to the hurricane, as long as they paid rent for the unit. As of May 31, 2006, USDA leased 3,848 units to victims of Hurricanes Katrina and Rita.

Also notable, after the Hurricanes, USDA halted its practice of offering for sale to the general public its foreclosed homes, and established a new initiative of making the foreclosed homes available for lease to displaced residents of the disaster areas. According to USDA, 153 homes were offered for lease under this initiative, and 25 were eventually leased. Hurricane victims without income were eligible to receive up to 3 months of free rent, and those with income were required to pay 30 percent of their adjusted income as rent. Finally, the hurricane victims who rented USDA homes were offered the first option to purchase the homes at any time during the lease period.

***

[1] Municipalities are the equivalent entity to counties in Puerto Rico.

[2] Source for Katrina and Harvey: Damage estimates by Dr. Mark Burton and Dr. Michael Hicks, whose widely cited research model was developed by the Army Corp of Engineers. Source for Irma damage: Preliminary estimates by analysis firm, CoreLogic.

[3] USDA Letter to Homeowners, dated September 1, 2017. Available at: https://www.rd.usda.gov/files/USDARDHARVEYLetter09-01-2017.pdf.

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

Posted by on Jul 25, 2017 in Budget, Key Issues | 0 comments

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.

While all this was going on, on May 11 USDA announced plans for a proposed reorganization that established an Under Secretary for Trade and Foreign Agriculture Affairs and eliminated the Under Secretary for Rural Development. The proposal stated that by eliminating the Undersecretary for Rural Development position, it would “elevate” Rural Development, claiming that the Secretary will take a direct hand in Rural Development. This implausible claim came against the backdrop of the drastic funding cuts included in the Budget request.

In response, on June 11 the National Rural Housing Coalition (NRHC) released a letter to Congress signed by nearly 600 organizations opposing the Administration’s proposal to eliminate the Under Secretary for Rural Development at USDA. The letter protested the draconian cuts to rural development programs in the 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.

With the stage set and NRHC at the forefront, the House and Senate Appropriations Committees began consideration of their FY 2018 Agriculture bills.  Even without serious consideration of the Trump budget, FY 2018 money is tight.  The caps on spending mandated by the Budget Control Act forced domestic discretionary down by about $3 billion and for good measure the House Budget Committee set the total available at $4 billion below that.

The House Appropriations Committee acted first, reporting out a bill almost $900 below the FY 2017 level, including a $350 million cut to rural development. That said, the House Agriculture Appropriations bill (H.R. 3268) did not approve any of the eliminations proposed by the Trump Administration. Some rural development programs were trimmed, but the programs and the authorities that have served rural America for some 50 years remain in place in the House Bill.

The House did follow the budget on two points. First it did not fund the Office of the Undersecretary for Rural Development. Instead the bill included about the same amount of money provided in FY 2017 for the Office of the Undersecretary for Rural Development for the Assistant to the Secretary for Rural Development.  This led some to wonder:  Is this reorganization proposal is a distinction without a difference?

The House bill also recommended a new grant program: the Rural Economic Infrastructure Account (REIG), which was also included in the Budget request. The REIG account pools together several existing USDA rural development grant programs into one grant program. The pooled grant programs are grants for low-income housing repair and rural housing preservation (Section 504 grants and Section 533 Housing Preservation Grant (HPG)), rural community facilities grants (including RCDI), grants for telemedicine distance learning, and grants for broadband. Any funds appropriated to those accounts would be transferred to the REIG Account, if enacted, and none of these programs received funding outside of the REIG program in the House bill.

The House bill funded this account at $122 million, with $60 million set aside for Appalachian communities. Each eligible activity under the account must receive at least 15 percent of the total provided under the Account, which, if funded at the requested level equals around $18.403 million, meaning all of the programs within the Account could face a significant decrease. For example, in FY 2017 Section 504 grants and HPG were funded together as “Rural Housing Assistance Grants” at $33.701 million.

This consolidation hits very-low income people very hard. USDA’s Section 504 Loan and Grant program and the HPG program are vital to many rural residents, particularly the elderly, who lack alternative financial resources to make basis repairs the preserve their homes. A disproportionate amount of the nation’s occupied substandard housing is located in rural areas.  Most of the people affected are the poorest of the poor or the elderly, and they usually live in rural areas with incomes below the federal poverty level. Non-metro tracts are more than two times as likely to lack or have incomplete plumbing compared to metro tracts. This issue is particularly prevalent in counties that contain American Indian Reservations, and Tribal census tracts are five times more likely to lack or have incomplete plumbing when compared to metro tracts.

The Senate Appropriations Committee took a better approach to domestic discretionary spending and rural development appropriations. The Committee did not cut into domestic discretionary totals, leaving the amount available at the same level as FY 2017. As a result, the amount available to the Agriculture Bill (S. 1603) was the only about $350 million below a freeze.

This gave the Committee the fiscal space to put together a bill that set most rural development programs at the FY 2017 rate. The Senate bill is $4.2 billion above the budget request for rural development programs. This includes $1 billion above the budget request for Section 502 direct loans; $57.5 million in BA and grants for Mutual Self-Help Housing (+$30 million); additional funding for Multifamily Revitalization and $550 million for water-sewer.  The Committee bill does not include the Rural Economic Infrastructure proposal – thereby freeing up funding for Section 504 grants, HPG and RCDI. The Rural Business Service and its programs are continued at the FY 2017 rate.

On the matter of the USDA Rural Development Reorganization, the Senate bill provides funding for the Assistant to the Secretary for Rural Development. However, the Committee also approved an amendment sponsored by Sen. Jon Tester (D-MT) that restored funding for the Office of Undersecretary and amended the Agriculture Department Reorganization Act to require the Secretary to nominate an Under Secretary for Rural Development who would be confirmed by Congress. The FY 2018 Agriculture Bill was reported to the Senate floor with a unanimous vote.

As we prepare this report, the House of Representatives is poised to leave Washington on Friday, July 28 for the August recess. The Senate will continue to be in session for a week or two more.  Nowhere on any schedule is floor consideration of the FY 2018 Agriculture Bill.

When Members of Congress return in September, they will immediately face decisions on the debt limit, FY 2018 spending, budget reconciliation, tax reform and, possibly heath care. Congress may not take up final decisions on FY2018 bills until the late fall.

Washington has never been more uncertain but it appears that when Congressional conference committees meet to resolve differences, the choices between the House and Senate Ag bills will be relatively narrow and nothing remotely resembling the Trump Budget.

Homeownership Month Celebrations in Traver, California

Posted by on Jun 30, 2017 in Self-Help, Spotlight | 0 comments

Self-Help Enterprises celebrated National Homeownership Month and NeighborWorks Week in Traver, CA on June 22, 2017. Attendees at the event included Joyce Allen, USDA Rural Development Deputy Administrator for Single Family Housing, and Gary Wolfe, NeighborWorks America Western Region Vice President. During the celebration, Self-Help Enterprises recognized over 150 youth and adults from the La Casa de Cristo Church in Scottsdale, AZ, who volunteered for four days (June 19-22) to help families in Traver build their own homes.

Under Self-Help Enterprises’ supervision, 11 families are building their own homes through the Mutual Self-Help Housing program in Traver, CA. Families are projected to move into the Traver, CA subdivision in March 2018. Working with the County, Self-Help Enterprises purchased and developed the subdivision. The County is developing plans to improve the community’s infrastructure. In addition, Family HealthCare Network has completed a health clinic facility on a nearby site.

The Mutual Self-Help Housing program is essential for rural communities like Traver, which lack new affordable housing options. Working in groups of nine to 12, Mutual Self-Help families provide over 70 percent of the construction labor on their homes, contributing at least 40 hours a week towards completion. These labor hours count as “sweat equity,” which helps to bring down the construction costs and is used as a down payment on the home.

Self-Help Enterprises, a National Rural Housing Coalition member organization, has pioneered the Mutual Self-Help Housing program. Since its founding in 1965, Self-Help Enterprises has helped more than 6,200 families in the San Joaquin Valley build their own homes.

For more information about Self-Help Enterprises, please visit their website.

Groundbreaking of the Pokai Bay Project by Self-Help Housing Corporation of Hawaii

Posted by on Jun 26, 2017 in Self-Help, Spotlight | 0 comments

National Rural Housing Coalition member organization, Self-Help Housing Corporation of Hawaii (SHHCH) hosted a ground breaking ceremony on June 21, 2017 in Waianae. Twelve families are set to begin construction on their new homes, and once the Pokai Bay Project is completed, there will be 70 Mutual Self-Help built homes in the community.

SHHCH is a nonprofit organization that provides technical assistance to low-income families in Hawaii that enables the families to build their own homes through the team self-help housing method. Over the past 52 years, SHHCH has helped families develop 656 homes in Hawaii with the U.S. Department of Agriculture’s (USDA) Mutual Self-Help Housing program.

With the Mutual Self-Help Housing program, teams of 6 to 12 families are paired together to help build each other’s homes. With SHHCH, each family contributes 16 hours of labor each weekend over the course of a year to complete construction. No family moves in until all of the homes for the group are completed. SHHCH works with the families to secure the necessary financing from the government, including the Section 502 Direct Home Loan program, other nonprofit organizations, and private lenders. The families earn “sweat equity” by working to build their own homes the, thereby reducing purchase and construction costs.

Mutual Self-Help Housing is an innovative and essential program for low-income families across America. Because the families are able to earn sweat equity, families earning under 80 percent of the area median (AMI) income are able to become homeowners. In fact, in the Waianae community, 58 of the 70 self-help homes will be specified for families earning 80 percent of the AMI and 12 homes will be for families earning 50 percent of the AMI. The median price for a previously-owned home on Oahu is $745,000. Comparatively, these self-help families will purchase their homes in fee-simple for $295,000.

SHHCH purchased the land that the 70 homes will sit on in 2013 for $6.2 million, including $3.1 million from the Hawaii Housing Finance Development Corporation. In addition, the Rural Community Assistance Corporation contributed $3.2 million and the Housing Assistance Council contributed $2.5 million.

Typical home to be built at the Pokai Bay Self-Help Housing Project

Attendees at the ground breaking included Hawaii State Senator Maile Shimabukuro; Hawaii State Representative Cedric Gates; SHHCH Construction Supervisor Joseph Ching; Hawaii Housing Finance & Development Corporation Development Manager Rick Prahler; SHHCH Executive Director Claudia Shay; Hawaii Housing Finance & Development Corporation Executive Director Craig Hirai representing Governor David Ige; and Sandeth “Ali” Sek representing U.S. Representative Tulsi Gabbard.

Governor Ige, the Hawaii State House of Representatives, and Representative Gabbard all presented certificates in recognition of the project.

For more information on this project, please see Andrew Gomes’ article, Ohana homebuilding project breaks ground in Waianae, in the Honolulu Star Advertiser.

For more information about the Self-Help Housing Corporation of Hawaii, please contact Claudia Shay, Executive Director, at selfhelphawaii@gmail.com.

NRHC Member Greystone Affordable Development Celebrates Grand Reopening of 18 Section 515 Properties in Kentucky

Posted by on Jun 15, 2017 in Section 515, Spotlight | 0 comments

Greystone Affordable Development, an affordable housing development company and a member of the National Rural Housing Coalition (NRHC), and Winterwood, Inc., a property management company, recently celebrated the reopening of 18 newly-renovated affordable housing communities in Kentucky. All of the properties were financed through the U.S. Department of Agriculture (USDA) Rural Development Section 515 program and ranged from 12 to 60 units per property.

In total, 563 units located in 14 counties were included in the recapitalization and rehabilitation project, which was completed in just 12 months. Greystone worked with Winterwood, USDA’s Rural Housing Service (both the Washington, D.C. and Kentucky State Offices), the Kentucky Housing Corporation, and the Community Affordable Housing Equity Corporation to secure the necessary financing, which totaled $65 million. Rural Development’s Multifamily Preservation and Revitalization Program was essential to the project, and contributed to a $22 rent decrease per unit.

Nearly half of the rehabilitated units (253 units) used energy incentives and rebates through the Louisville Gas and Electric Company and the Kentucky Utilities Company, increasing the energy efficiency of these units by 30 percent.

Greystone Affordable Development, an affiliate of Greystone & Co., Inc., is a leader in the development, recapitalization, rehabilitation, and preservation of affordable rural rental housing. Including the recently completed Kentucky project, Greystone has managed the preservation and rehabilitation of over 8,200 rental units and has another 5,800 in various stages of completion.

For more information about the project and the grand opening, please see Greystone’s press release.

Nearly 600 Rural Organizations Signify Opposition to White House Proposal for USDA Reorganization and Budget Request in Advance of Congressional Hearing

Posted by on Jun 12, 2017 in Budget, Key Issues, Resources | 0 comments

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 otherwise.

“By eliminating the Under Secretary for Rural Development and eliminating funding for two dozen housing and rural development programs and rescissions for Fiscal Year 2017 as well—the Administration is clearly turning its back on rural families and the communities where they live,” Rapoza said.

“If the Budget request is approved and the reorganization proposal moves forward rural communities will not receive the quality of assistance and resources needed to prosper,” Rapoza said. “This letter sends a message to Members of Congress that if they intend to meet rural communities’ needs, a strong Rural Development mission area is required.”

The letter was circulated by the National Rural Housing Coalition and the National Sustainable Agriculture Coalition. It has been shared with the House and Senate Agriculture Appropriations Committees.

For more information about rural housing and community development, please visit the National Rural Housing Coalition’s webpage.

To view the Press Release on PR Newswire, please click here.

President Trump Signs Executive Order on Prosperity for Rural America

Posted by on Apr 27, 2017 in Key Issues | 0 comments

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 force should “respect the unique circumstances of small businesses that serve rural communities,” the President’s skinny budget for 2018 calls for the elimination of the USDA’s Rural Business-Cooperative Service (RBCS). The RBCS offers programs that support business growth development and job training opportunities for rural Americans by partnering with private sector local lenders and community based organizations to provide much needed capital in rural areas. RCBS also has several cooperative programs to help rural residents develop ways to create new systems to distribute their products and supplies and improve existing systems through education and technical assistance.

Addressing the economic and community development needs of rural America will require a holistic approach. And while the task force is directed to “remove barriers to economic prosperity and quality of life in rural America,” the enumerated policy points focus almost entirely on agricultural production and agribusiness. A “reliable workforce” for those rural businesses must have access to safe, clean, and affordable housing, water systems, and community facilities.

National Rural Housing Coalition Releases 2017 Impact Report

Posted by on Apr 7, 2017 in Key Issues, Resources, Spotlight | 0 comments

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, WA, presented on the Esperanza Development, which serves the farmworker community Mattawa, WA. This project was funded by USDA Section 514 and 516 farmworker housing programs, as well as over $1 million in additional funding from the Washington State Housing Trust Fund.

Esperanza Presentation, April 4, 2017.

 

Julie Bornstein, the Executive Director of the Coachella Valley Housing Coalition, presented on the Los Jardines community. This community, located in Coachella, CA, is made up of 205 single-family homes constructed through the Mutual Self-Help Housing program. The homeowners worked together in groups of 10 to 12 families for 10 to 12 months for 40 hours per week to build their homes, earning sweat equity equivalent to a down payment in the process.

Los Jardines Presentation, April 4, 2017.

 

 

Karen Speakman, the Deputy Director of NCALL Research, Inc., presented on the Chandler Heights II preservation project, in Seaford, DE. The 24 unit property was constructed in 1992 with a Section 515 Loan. The rental units needed significant overhaul due to water damage, poor drainage, and other issues. Today, in addition to new roofs, siding, and other upgrades, Chandler Heights II has 4 new 1 bedroom units and a handicap accessible playground.

Chandler Heights II Presentation, April 4, 2017.

 

Selvin McGahee, the Executive Director of Florida Non-Profit Housing, Inc., presented on the Casa San Juan Bosco II development. After Hurricane Charley devastated Desoto County, FL, the Catholic Charities and Diocese of Venice reached out to FNPH to address the loss of housing in the area. Using USDA Section 514 and 516 and financing from the Florida Housing Finance Agency, FNPH developed 53 single-family rental homes for farmworkers and their families.

Casa San Juan Bosco II Presentation, April 4, 2017.

 

 

Kathy Tyler, Housing Services Director at Motivation Education & Training, Inc., presented on a single-family housing rehab project. The home was owned by a farmworker family made up of parents and two children. The home had holes in the walls and a dirt floor. Construction was provided by farmworker construction trainees enrolled in the Southwest Texas Junior College and funding from the Department of Labor-National Farmworker Jobs Program, HUD and USDA, as well as other state and local sources.

Farmworker Home Rehab Presentation, April 4, 2017.

 

Infrastructure Includes Substandard Housing

Posted by on Mar 14, 2017 in Key Issues, Spotlight | 0 comments

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 for 23 families in the drought-ravaged San Joaquin Valley.

The bottom line is that the Administration and Congress should take a holistic approach to addressing America’s infrastructure needs, and include funding for housing and water/wastewater systems in any infrastructure package.

This article is the sixth in a blog series of the Campaign for Housing and Community Development Funding that ties housing to infrastructure. To read the other blog posts, please click here.

[1] Defined as serving 3,300 and fewer persons.