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NHC Beyond 4 Walls Podcast

Guest Blogger: Moises Loza on the Significance of Rental Housing in Rural America

Rental Housing in Rural America Must Be Preserved

Even during an economic crisis based partly on homeownership problems, policymakers must remember rental housing needs, including the need to preserve existing affordable rental housing in rural America.

About 450,000 rental units are included in the U.S. Department of Agriculture Rural Development (RD) housing office’s portfolio of loans made directly to affordable rural rental housing producers through the Section 515 program. These properties are aging; many badly need repairs and renovations. At the same time, some owners want to prepay their mortgages and leave the Section 515 program, often because they hope to convert their apartments to market-rate rentals.

Section 515 units are affordable for the lowest income rural residents; the average annual income of all 515 tenants is $10,921 and that of tenants receiving RD Rental Assistance (RA) is only $9,055. The majority of Section 515 tenants are elderly or disabled, and many of these properties are located in places where few other rentals are available.The single biggest problem for rural preservation efforts is a shortage of funding. RD has preservation programs in place, yet applications far exceed the available funds.

An appropriation of $400 million for RD’s Multi-Family Housing Preservation and Revitalization Preservation Revolving Loan Fund programs would rehabilitate and preserve 14,870 Section 515 rental units and create 4,400 construction jobs over 18 to 24 months. Nearly $1 billion is needed just to renew existing Rental Assistance contracts in FY 2009, and additional funds could make rents affordable for more Section 515 and 514 tenants.

In addition, both of RD’s preservation programs need permanent authorization from Congress, and RD must develop regulations to implement a new law requiring it to expedite sales of Section 515 properties to new owners who would keep them affordable for low-income tenants.

Only Congress and the Administration can take the steps needed. Only the federal government – representing the United States as a whole – can fulfill our nation’s commitment to provide every American with a decent, safe, affordable home.

Moises Loza currently serves as the executive director of the Housing Assistance Council.

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