NEW RESEARCH FROM THE Bob Rapoza NATIONAL RURAL HOUSING May 11, - - PowerPoint PPT Presentation
NEW RESEARCH FROM THE Bob Rapoza NATIONAL RURAL HOUSING May 11, 2017 COALITION 1 Barriers to Affordable Rural Housing Income and Quality of Lack of Poverty Housing Credit Lower incomes, higher rates of poverty, poor quality of the
Bob Rapoza May 11, 2017
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Lower incomes, higher rates of poverty, poor quality of the available housing stock, and a lack of affordable credit
America.
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National Urban (inside MSA) Rural (Outside MSA) Median Incomes $56,516 $59,258 $44,657 Poverty Rate 13.5% 13% 16.7%
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Non-Cost Burdened Rural Renters Cost Burdened Rural Renters paying between 30% and 49.9%
Severely Cost Burdened Rural Renters paying more than 50% of income on rent
41 percent of all rural renters pay more than 30 percent of their monthly income on rent.
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4% of non-metro units are “inadequate,” compared to 2% nationally – this means the unit lacks plumbing or a complete kitchen. 10.3% of inadequate non-metro units also have more than one
that overcrowding is more common in inadequate units in non-metro areas.
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Because rural communities are smaller and geographically large, they can struggle to attract affordable credit options and achieve economies of scale to make housing affordable
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In 2017 NRHC has released an Impact Report and a Review of Federal Rural Rental Housing Programs.
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In April we released the 2017 Impact Report on the FY 2016 activity of 104
These organizations helped low-income families and communities secure $1 billion in financing to build, purchase, preserve,
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.
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84 organizations reported
activity.
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Responding organizations secured $314.5 million in financing; These groups assisted 3,139 families through some type of homeownership program; 59 Mutual Self-Help Housing Organizations assisted 378 families in the construction of their homes; Those Mutual Self-Help families contributed over $6.8 million in sweat-equity.
22 organizations reported
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2,859 rental housing unit developed, constructed, preserved,
Over $472 million in financing secured for rural rental housing units; and 17 organizations reported to own, manage, or sponsored 298 developments.
[CATEGORY NAME] 7.15% [CATEGORY NAME] 4.61% [CATEGORY NAME] 1.75% [CATEGORY NAME] 4.55% [CATEGORY NAME] 3.84% [CATEGORY NAME] 2.29% [CATEGORY NAME] 0.51% [CATEGORY NAME] 43.57% [CATEGORY NAME] 1.97% [CATEGORY NAME] 6.37% [CATEGORY NAME] 16.06% [CATEGORY NAME] 7.31%
FINANCING SOURCES FOR RENTAL HOUSING
In October 2016, NRHC held a first-of-its kind one-day conference devoted entirely to discussing and analyzing the issues facing the rural rental housing portfolio. This report was created to provide an assessment of the current state of the portfolio, identify and examine the relevant programs and policies involved, and to provide recommendations for policy makers on how to preserve and maintain the portfolio.
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Section 515 Section 514/516 Section 521 Rental Assistance Multifamily Housing Preservation and Revitalization demonstration program HOME Investment Partnership Program Community Development Block Grants Low-Income Housing Tax Credit
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As of June 2016 there are:
417,511 Section 515 units 13,877 Section 515 properties On average these properties are 34 years old
Who are the tenants?
Average income of $12,377 per year 92.25% are very-low-income 62 % of households are elderly or disabled
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Despite significant demand for rental housing in rural communities, Section 515 has been reduced drastically since its peak
at $35 million, $6.6 million increase
from FY 1982, when Section 515 was funded at $954 million This has lead to a decline in new construction
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10,000 15,000 20,000 25,000 30,000 35,000
400 600 800 1,000 1,200 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 New Construction Units Program Levels ($ in millions) Section 515 Program Levels New Construction Units
Section 515 Section 514/516 Section 521 Rental Assistance Multifamily Housing Preservation and Revitalization demonstration program HOME Investment Partnership Program Community Development Block Grants Low-Income Housing Tax Credit
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Between 1987 and 1994, 31% of all affordable housing properties financed with LIHTC also leveraged Section 515 Rural Rental Housing Loans. As funding for Section 515 has been cut, LIHTC investments in rural areas have declined. Between 1995 and 2009, only 9% of LIHTC-financed rental properties leveraged Section 515 funds.
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0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 100 200 300 400 500 600 700 198719881989199019911992199319941995199619971998199920002001200220032004200520062007200820092010 Section 515 Program Level LIHTC Units in Rural Areas
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Preservati
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Rate of maturing mortgages:
Without Section 515 funding, there has historically been little USDA could do to prevent loan prepayments or to provide new loans to property owners when their existing loans mature. USDA has financed 28,000 Section 515 properties (533,000 units) through Section 515 through the history of the program.
After a 2004 USDA Report estimated that $2.6 billion is needed, Congress created the Multifamily Preservation and Revitalization (MPR) demonstration program. MPR has financed an estimated 26,459 units in 1,218 properties between 2006 and 2014. Significant barriers to using USDA Preservation Tools:
MPR is not permanently authorized and is underfunded
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Preservati
income of $10,554 per year.
521 RA
assistance is $4,911.
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72% 81% 85% 84% 89% 81% 85% 68% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2010 2011 2012 2013 2014 2015 2016 2017
Rental Assistance as a Percentage of the USDA Rural Housing Budget Authority
USDA should: 1. Revamp Section 515 rules to accommodate other partners, including state housing agencies and other federal agencies. 2. Encourage participation of nonprofit organizations and public housing agencies. 3. Help Section 515 owners understand the relevant rules, regulations and resources to allow the owners make the right decisions in preserving housing. 4. Address the emerging increase of maturing mortgages by encouraging owners to take advantage of MPR and other tools for refinancing developments with Section 515, so that Rental Assistance remains available for the property. Policy makers at the state level should: 5. Consider providing additional 9% LIHTC credits to rural areas or, failing that, encourage the greater allocation of HOME and CDBG to accommodate the four percent credit in rural areas.
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feasibly target deeper affordability
serve rural areas.
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Our proposal is to increase the basis boost for rural or non-metro QCTs to 150
“Rural or non-metro” would be defined using the definition from the Federal Housing Finance Administration Duty to Serve final rule. That definition provides that a “rural area” is: (1) a census tract outside of a metropolitan statistical area (MSA) as designated by the Office of Management and Budget (OMB);
Urbanized Areas as designated by the U.S. Department of Agriculture’s (USDA) Rural-Urban Commuting Area (RUCA) Code #1, and outside of tracts with a housing density of more than 64 housing units per square mile in USDA’s RUCA Code #2.
Now that we have an FY 2017 bill, Congress and the Administration are turning to FY 2018.
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USDA Rental Housing Programs FY17 Final (in millions) FY18 Budget Section 502 Direct Loans $1,000 TBD Section 502 Guaranteed Loans $24,000 TBD Section 504 Loans $26.278 TBD Section 504 Grants $28.7# TBD Water/Wastewater Loans $1,200 TBD Water/Wastewater Grants $391.98 TBD Water/Wastewater Guaranteed $50 TBD # = Included in the amount provided for Rural Housing Assistance Grants ($33.701 million)
USDA Rental Housing Programs FY17 Final (in millions) FY18 Budget Section 514 Farm Labor Housing Loans $23.855 TBD Section 515 Rural Rental Housing $40 TBD Section 516 Farm Labor Housing Grants $8.336 TBD Section 521 Rural Rental Assistance $1,405.03 TBD Section 533 Housing Preservation Grants $5# TBD Section 538 Rental Housing Guaranteed $230 TBD Multifamily Preservation & Revitalization B.A. $41.4 TBD 542 Voucher Demonstration $19.4 TBD # = Included in the amount provided for Rural Housing Assistance Grants ($33.701 million)
Contact your Senators and Representatives and ask them to support rural housing programs. Upcoming Congressional Recesses for In- District Advocacy:
Why is in-district advocacy essential to your success? What can you do?
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For more information:
National Rural Housing Coalition 1331 G Street NW, 10th FL Washington, D.C. 20005 (202) 393-5229 www.ruralhousingcoalition.org
Bob Rapoza (bob@rapoza.org) Audrey Johnston (audrey@rapoza.org)
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