Rural housing gap continues to widen

November 30, 2012 at 11:23 am

The Daily Yonder posted an insightful piece this week about dwindling federal aid for housing, and the disparity faced by rural areas in particular when it comes to receiving adequate aid. With the “fiscal cliff” discussions going on now, housing aid could be cut even further, making the gap between rural and urban and suburban areas even deeper.

Housing aid programs that have been in place since the 1930s were established to ensure that all Americans can have a safe and affordable place to live. These range from mortgage and construction loan programs to housing vouchers and public housing projects. Throughout this history, however, rural areas have not received enough aid to match needs:

In 1980, in a report entitled “Ways of Providing a Fairer Share of Federal Housing Support to Rural Areas’” the federal Government Accountability Office (GAO) reported: “The distribution of Federal housing support …has not been consistent with relative need.”

Three decades later, in “Options for Optimizing the Federal Role in Rural Development,” the GAO reported improvement in rural housing since the 1930s, but noted that the condition of rural housing  “still lags somewhat behind that of urban housing….”

15 percent of rural counties are housing stressed and 30 percent of rural Americans live in overcrowded housing. The wait list for programs like USDA’s “502 direct” loan program, which provides very low rate loans for low- and moderate-income borrowers  is already 25,000 families each year. Looking ahead, these conditions will likely worsen if a fiscal deal includes more sever funding cuts. For Fiscal  Year 2013, the House and Administration are recommending a 27 percent cut in funding, after a 30 percent cut that occurred between 2004 and 2012. Other housing programs also face an uncertain future.

We have already blogged about the growing inequality, especially the divide between rural and urban areas, that has characterized this economic recovery (here, here, and here). Reducing– or, in some cases eliminating–  funding for housing programs would be further exacerbate this problem. We need Congress to come up with a deal to avoid the fiscal cliff; however, the deal that is struck must incorporate a long-term vision for the economic success of all communities. Housing is, as the article points out, the right of every American family.

 

 

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Entry filed under: Economic Development, Economy, Housing. Tags: , , , , .

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