Today, the US Census Bureau released their annual report on poverty and income. Economists predicted an increase of 1 to 2 percent in incomes in 2015, but the report showed a surprising 5.2 percent increase. A closer look at the data reveals a stark contrast between the economy in urban and rural communities.
Urban Areas on the RiseOver the past 8 years, rural and urban economies have generally exhibited similar economic trends. However, in 2015, there was a sharp divergence (click to enlarge).
Inside of metropolitan statistical areas (MSAs), median incomes grew by 6 percent. Much of that growth was confined to cities dwellers, whose incomes rose by 7.3 percent compared to suburban and exurban residents, whose incomes rose by a more modest 4 percent. This is the largest increase in median income since before the Great Recession.
The poverty rate declined in MSAs, dropping from 14.4 percent in 2014 to 13.0 in 2015. Inside MSA cities, poverty dropped sharply, from 18.9 percent in 2014 to 16.8 percent in 2015, and in the surrounding suburbs, it dropped from 11.8 percent in 2014 to 10.8 percent in 2015.
Rural Communities Continue to Stagnate
In 2015, rural* median incomes declined by 2 percent, which is just inside of the margin of error. Poverty remained stagnant, increasing a statistically insignificant 0.2 percent in 2015 and settling at 16.7 percent.
Regardless of whether the decline in rural economic conditions was statistically significant in 2015, it is clear that rural communities were left behind last year as our economy continued to grow modestly. Rural mortality and out-migration continues to hinder growth in small towns and farming communities. In fact, the number of rural residents living in poverty actually declined by about 10 percent, from 8.2 million in 2014 to 7.4 million in 2015, but because of population loss, this decline was not reflected in an accompanying decline in the overall poverty rate.
*Includes both micropolitan statistical areas and territory outside of metropolitan and micropolitan statistical areas
Crossposted at the National Rural Housing Coalition
Alton and Robin Alexander lived in Western Michigan with their two daughters in a comfortable, modest and safe neighborhood prior to the Great Recession. However, as the nation’s economy struggled, this family of four lost their home and was forced to move into a substandard rental unit.
The Alexanders’ story is not unique. Homeownership is considered a central tenet of the American Dream, but its value to families and communities is sometimes overlooked. June is National Homeownership Month, which shines a spotlight on the value of homeownership. For many low and moderate income rural families, homeownership is only possible through financing from U.S. Department of Agriculture (USDA) Rural Housing Service programs. In Fiscal Year 2015 alone, USDA Rural Development awarded $900 million Section 502 direct single-family housing loans and made more than $18.6 billion Section 502 guarantees to help more than 141,000 rural American families become homeowners.
One of those families is Jeff, a single father, and his four children in Morristown, Tennessee. Back injuries limited Jeff’s ability to work and the family lived in a doublewide trailer. Eventually the family moved in to affordable rental housing owned and maintained by Clinch-Powell RC&D, a Federation of Appalachian Housing Enterprises (FAHE) Member. With assistance from Clinch-Powell, Jeff applied for a Section 502 Direct loan. FAHE helped prepare the application. Jeff and his children will soon be moving into their new home.
The Section 502 direct program is also an essential tool for the Mutual Self-Help Housing Program, where groups of six to 12 families are paired together to help build each other’s houses with technical assistance from non-profit organizations. This program, which includes more than 100 Self-Help Grantee Organizations in 40 states and territories, celebrated its 50th anniversary in 2015, and has helped more than 50,000 families build their own homes.
The Self-Help housing program is bigger than just homeownership: through the technical assistance from organizations like the Coachella Valley Housing Corporation (CVHC), this program allows families to gain financial stability and builds communities where children can thrive. For example, in Mecca, California, CVHC helped the Rodriquez family, including four children, move from their dilapidated rental apartment into a safe, clean rental complex, and eventually to become homeowners through the Mutual Self Help program. Juan Rodriguez, one of those children, went on to graduate from UC Berkeley, and now helps CVHC improve the community he grew up in.
The success of the Self-Help and Section 502 Direct programs depend on the partnership with community development organizations operating around the country. Like CVHC, Pathfinder Services, Inc. is a not-for-profit human and community development. With Pathfinder’s assistance, the Alexanders, mentioned above, were able to escape their inadequate rental home and regain homeownership through the Section 502 direct loan program. The Alexanders are now the proud owners of a new home in Fort Wayne, Michigan– a safe neighborhood where their daughters can play and grow.
It is important to celebrate the success of these families and recognize the dedication of organizations like CVHC, FAHE and Pathfinder Services. However, there is more work to be done. Affordability remains a barrier for many seeking homeownership, and in some communities a lack of affordable housing options is hindering economic prosperity for the community. For example, in some communities in parts of North Dakota businesses are unable to fill well-paying jobs due to an absence of affordable housing.
As National Homeownership Month comes to an end, we must continue to work to ensure that all families around the country have an opportunity to achieve the American Dream.
The Federation of Appalachian Housing Enterprises, Fahe, is one of several nonprofit organizations that participated in USDA’s loan packaging pilot program, which became permanent in May 2016. They are working to further expand the reach and scope of the Section 502 Direct loan program to assist low-income rural families in achieving homeownership. To achieve this goal, Fahe has partnered with the West Virginia Housing Development Fund (WVHDF) and the U.S. Department of Agriculture (USDA). For the first time a state housing agency, WVHDF, will package USDA Section 502 Direct loans. Fahe will serve as the intermediary for the loans.
A ceremony was held at the WVHDF offices in Charleston, WV in recognition of this important event. Presenters at the ceremony included Jim King, CEO and President of Fahe, Erica Boggess, Acting Executive Director of WVHDF; Bobby Lewis, USDA West Virginia State Director; and Tony Hernandez, USDA Administrator for the Rural Housing Service. Additionally Mary Elisabeth Eckerson read on behalf of Senator Shelly Moore-Capito, Sara Payne Scarbo read remarks for Senator Joe Manchin, Payne Warner read remarks for Congressman Alex Mooney, and Brian Aluise read for West Virginia Governor Earl Ray Tomblin.
During the ceremony, Administrator Hernandez presented Fahe an award in recognition of the organization’s effort as a Champion of Rural Housing, and for their impact and achievements on the Section 502 Direct loan program. Jim King said that in the past 6 years of partnership with USDA, Fahe has placed over 807 hardworking families in new, safe and affordable homes through the Section 502 Direct program.
To read more about the partnership, please read the press release on Fahe’s blog.
This is a moment in time when avoiding disaster with Congress or the Administration is viewed as a success, and seeking even the most modest improvements in policy or resources seems out of the question and hopelessly optimistic. In light of these conditions, for those interested in improving housing and communities in rural America, the House (H.R.5054) and Senate (S.2956) Agriculture, Rural Development, Food and Drug Administration and Related Agencies Appropriations bills for Fiscal Year (FY) 2017 are, in separate ways, remarkable.
Even though both bills had overall allocations amounts less than the enacted level in FY 2016, the FY 2017 bills reported by the Appropriations Committees of both Chambers increased rural housing and rural development spending above the current FY 2016 levels and well above the FY 2017 USDA Budget request. Both the House and Senate Appropriations Committees sought to improve rural housing conditions in their Agriculture Appropriations bills for FY 2017, but by different routes.
The House Appropriations bill includes $21.3 billion in discretionary funding, over $450 million lower than the FY 2016 enacted level, and $281 million below the Administration’s request for FY 2017. Of the total, $2.88 billion of the funding is for rural development programs – more than $110 million more than the level enacted in FY 2016. The House bill includes $24 billion in loan authority for the Section 502 Single Family guarantee program, and $1 billion for the Section 502 direct loan program – an increase of $100 million over the FY 2016 enacted level, as well as the President’s budget request. This is the first increase in direct homeownership loans in several years.
The House bill also provides an increased funding for Mutual and Self-Help Housing Technical Assistance Grants – funding the program at $30 million, which is $2.5 million more than the Senate bill and $12 million more than the Administration’s request. [See chart below: “Section 523 Mutual and Self-Help Housing TA”].
The House Agriculture Appropriations Bill also recommends more funding for Farm Labor Housing programs than the Senate bill. The House bill includes $8.4 million for Section 516 Farm Labor Housing Grants, which is about $60,000 more than the Senate bill. The House bill recommends a funding level of $23.9 million for Section 514 Farm Labor Housing loans, which is an increase over the Senate bill ($23.857 million), the Administration’s request ($23.857 million) and the enacted amount for FY 2016 ($23.855 million). [See charts below: “Farm Labor Housing”]
Farm Labor Housing
The Senate Agriculture appropriations bill recommends a total discretionary funding level of $21.25 billion – $250 million below the FY 2016 enacted level. However the Senate bill appropriates $71 million above the FY 2016 enacted level and almost $100 million above the FY 17 USDA budget for rural housing, business programs and water-waste water loans and grants.
Like the House bill and the Administration’s request, the Senate bill funds the Section 502 Guarantee program at $24 billion for FY 2017; however, unlike the House bill, the Senate does not recommend an increase in funding for Section 502 direct or Mutual and Self-Help Housing over they FY 2016 enacted levels. The Senate bill, instead, focuses more on multifamily housing programs. The Senate (like the Administration and the House) recommends funding Section 521 Rental Assistance at $1,405 billion – an increase of around $16 billion over the FY 2016 enacted amount. [See chart below: “Section 521 Rental Assistance”].
Further, the Senate bill provides increased funding for Section 515, over the FY 2016 enacted amount as well as the House request. Specifically, the Senate bill funds Section 515 rural rental housing at $40 million for FY 2017, which is an increase of five million dollars over the House bill ($35 million), almost seven million dollars over the Administration’s request, and over $11 million more than the enacted level for FY 2016. [See chart below: “Section 515”].
The Senate bill also includes several other notable changes to the Section 515 program in an effort to develop solutions to address the issues created by maturing 515 mortgages. The Senate bill directs the Secretary to implement provisions and provide incentives to facilitate the transfer of USDA multifamily properties to nonprofit organization and public housing authorities, including to allow such entities to earn a Return on Investment and an Asset Management Fee of up to $7,500 per property. The report includes language directing the Secretary of USDA to engage affordable housing advocates, property owners, tenants, and other interested parties, to find long-term solutions to maintaining affordable housing properties in rural America.
The Senate bill further recommends $1 million for a new pilot program for grants to qualified non-profit organizations and public housing authorities to provide technical assistance to USDA multifamily housing borrowers to facilitate the acquisition of Rural Housing Service multifamily properties by non-profit housing organizations and public housing authorities that commit to keeping the properties in the USDA multifamily housing program for a set period of time.
The House recommended better funding levels for home ownership programs and Mutual and Self-Help Housing, while the Senate recommended funding levels are better for rental housing and also include a strategy for addressing maturing mortgages which includes bill language resolving return on investment issues and lack of technical assistance to owners. Both the House and Senate bills are improvements over the FY 2017 USDA Budget.
Congress is unlikely to complete action on appropriations until a lame duck session after the election. When Congress finally does act, the best outcome – and far better than simply avoiding disaster – for rural housing is the House position on Section 502 Direct loans and Section 523 TA grants and the Senate position on Section 515.
NRHC’s Fact Sheets provide up-to-date information on the most important federal housing issues impacting rural communities. Use these resources to educate Members of Congress, the media, and local government on how improving lives in rural America starts with affordable housing.
Together, we can help empower rural families and strengthen communities.
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A recent article published by the Statesman highlights the devastating housing conditions many migrant farmworkers are facing across America, and particularly in Texas. The article, aptly titled “Unbelievable” by Jeremy Schawrtz, explains how, in spite of existing laws that require housing facilities for migrant farmworkers to be inspected and licensed to ensure minimal health and safety conditions, many of these properties are never inspected, or, if they are inspected and problems are discovered, the owners of the properties face no penalties.
In fact, as the Statesman’s investigation uncovered, Texas, unlike other agriculture states, provides no funding to ensure safe and sanitary housing facilities for migrant farmworkers. In addition to the lack of funding and lack of inspections, the state agency responsible for inspecting migrant farmworker housing facilities also does not engage in any outreach to determine if unlicensed facilities are being used. Even where complaints do reach the agency, there is frequently no follow-up to determine if the problems reported have been addressed.
To read the article, please click here. The article will be published in print in the Statesman on Sunday.
The House Agriculture Appropriations Bill also recommends more funding for Farm Labor Housing programs than the Senate bill. The House bill includes $8.4 million for Section 516 Farm Labor Housing Grants, which is about $60,000 more than the Senate bill. The House bill recommends a funding level of $23.9 million for Section 514 Farm Labor Housing loans, which is an increase over the Senate bill ($23.857 million), the Administration’s request ($23.857 million) and the enacted amount for FY 2016 ($23.855 million). [See charts below: “Farm Labor Housing”]
NRHC’s Fact Sheets provide up-to-date information on the most important federal housing issues impacting rural communities. Use these resources to educate Members of Congress, the media, and local government on how improving lives in rural America starts with affordable housing.
Together, we can help empower rural families and strengthen communities.
[jcolumns]