Rural Voices Articles Archives

The Power of Working Together

October 6, 2014/in What does affordable housing mean to you? Persistent Poverty

Three families share their experiences with USDA’s Mutual Self-Help Housing Program

This story appears in the Fall 2014 issue of Rural Voices

Mutual Self-Help is a USDA Rural Development program administered by community-based nonprofit housing organizations that makes housing affordable through “sweat equity”. Families work together as a group to build approximately 65 percent of their homes. This labor not only acts as the down payment, but can substantially reduce the price of the home. However, it is hard work and it does require commitment. Households work together, with each family contributing a minimum of 35 hours of labor per week for approximately 8 to 12 months. The homes are built simultaneously; no one moves in until all the homes are completed.

Dillan and Lacie; Rebecca; and Anita and Robbie all participated in the Neighborhood Nonprofit Housing Corporation (NNHC) mutual self-help program. Below each family recounts their challenges, successes, and experiences building their own home and helping other families build theirs.

How did you first hear about self-help housing?

Dillan: When attending school, Lacie and I had no thoughts of buying, let alone, building a brand new house. Because I am a student, the idea of securing a home loan was near impossible, until we heard about Neighborhood Nonprofit’s housing program. A family member mentioned to me an advertisement they had seen in the newspaper one day and I just stopped in the office to see what it was about. Ten months later here we are in the final stages of building our beautiful new home. The process was very simple to qualify for the program and the Neighborhood Nonprofit staff was very helpful.

Dillan and Lacie are both originally from Cache Valley, UT and wanted to raise their children there. Lacie is a stay at home mom. Dillan is a returning student at Utah State University and plans to be a teacher.

Rebecca: I had previously heard about Self-Help housing a couple of years before applying, but I did not want to make such a major decision so soon after my husband’s death. I also didn’t see how I would be able to put in the time needed to build as a single mother. It wasn’t until after I tried unsuccessfully to find affordable housing for my family that I decided to throw in my application and see what happened.

Anita: We heard about the Self-Help program from one of my husband’s coworkers. They had built in the nearby town of Nibley, UT. We decided to look into the program after looking for houses to buy became discouraging. We knew that my staying at home with our children would make it difficult to afford one. We were also excited about the opportunity to learn the skills involved with building a house. We are grateful we learned these skills because we feel more prepared to maintain our home.

What was the construction process like?

Anita: During the time we built, life was so busy! I was pregnant when we started, so my husband did most of the work for the first several months. Life was hard but we were excited for the end result. It took our group ten months to finish all our homes. We worked with really great people. Everyone had the same attitude to work on each other’s home like it was their own. This created a positive working environment. I would say the hardest challenge we faced was everyone getting burned out and not working as fast as we had hoped. I was glad to be able to go out and work too. Working together on our home taught us a lot and was a great benefit to us recently when we finished our basement.

Dillan: While the qualification process was simple, the building process has not been quite as simple. Building each home together has been challenging and rewarding at the same time. The families in our group have worked so hard together and have accomplished so much. The program has not been easy, but it has been worth it. I believe that each family will leave the program with a greater sense of community and friendship because of the hard work that everyone has endured.

Rebecca: My youngest was only three when I started building! Since my oldest was just 12, I was the only one in our family that was able to work on the homes. To be honest, it was a difficult process for me to build; besides having five children and no spouse, I am a student at Utah State University. A typical day would start at 4:30 a.m. I had to get up that early to get everything ready for the day, including dropping off my children at school and getting myself to class. After school was out, I would have to rush to pick up my children and take them to a baby sitter (none of them were old enough to be on the site) and then get myself to the work site. I usually wouldn’t get home until after 10:00pm. I still had to put kids to bed, take a shower (get all the sawdust and grime off that I’m allergic to), and do regular household chores.

Rebecca is a widow with five children ages 16, 15, 12, 10, and 7, and is currently a student at Utah State University pursuing a degree in Social Work.

What were your living conditions before and after your participation in the self-help program?

Rebecca: Before [the Self-Help program] we had been living in a three-bedroom apartment for about two years. It was definitely cramped; my two daughters shared one bedroom, and my three sons shared another bedroom. We all needed some personal space. In addition, the apartment would flood occasionally, so it had mold and mildew issues and smelled terrible. It was also where we were living when I lost my husband and the children lost their dad. That apartment created some difficult memories for us. It was really healthy, both physically and emotionally, for us to get out of that environment. Every day, I count my blessings – I have a house, a yard, and good neighbors. I love the neighborhood! One especially nice benefit to having our home is having a back-yard big enough to grow a garden. I could never afford to buy fresh produce for my family. Now, we eat fresh food that we’ve grown ourselves!

Anita: Before we built our house, we lived in a townhouse. The community was nice but the main thing that was missing was a private backyard. One of my favorite features of the program was being able to move in having our landscape and fences included in the building process. I love being able to send my own kids out to have fun in our large fenced-in area. One other major unexpected benefit to having a fenced-in backyard was that it helped my preschool business. My city requires all new preschools to have a fenced-in backyard. This could have been an expensive hurdle but thanks to the Self-Help specifications, this was included.

Gerber-family-cropped-web Anita and her husband Robbie have three children all under the age of six. Anita is a stay at home mom who started her own preschool business. Robbie is a conference coordinator for Utah State University.

Dillan: Before the Self-Help program and as students with a large family, our housing conditions have been, at times, hard to deal with. Now that we are able to have a home to call our own it has given our family and especially our children a place to feel comfortable and more importantly a place to stay for a long time. We now have a “Room with a View,” a place to grow together and create lasting memories.

What specific successes or challenges did you experience?

Dillan: A challenge we faced in our group was learning to work together on a home that wasn’t your own. The workmanship as well as the attitude of all the families involved improved once everyone truly figured out that no one could move in to their own homes before the other houses were completed. No work was completed without the thought of “If it was my home, would I do it like that?” When this concept was grasped, the work excelled in speed and accuracy. Although this and other things were challenges, the successes far exceeded them. A friendship has been made between the families as we worked hard together.

Rebecca: It took a lot of determination to get my weekly hours in and keep up with my other responsibilities. Because it is easier to meet the time requirements if the family is a two parent household (it’s estimated that both husband and wife can come in together one day a week), I had to go in outside of the group’s regular work hours in order to work my full 35 hours per week. During the building process, I had to have two surgeries on my broken leg. While on crutches, and not allowed on site, I had good people that helped donate hours so I could keep up.

I love the neighborhood. I got to know my neighbors really well while we built – both the good and the bad! We learned to work with everyone’s personalities, and I think we learned the importance of not saying things we would regret later. Now, we have a real sense of taking care of each other. It is like having a built-in Neighborhood Watch Program! I have developed some very good friendships from the time we spent building together.

Anita: We are very grateful to have been able to build our home through the Mutual Self Help process. We learned a lot from our construction supervisor and have a lot of respect for him. He made sure things were done the right way. The process was hard; but worth it because we not only got a beautiful home but gained knowledge and friendships.

My father passed away a couple months into the building process. It was very unexpected and very difficult. Because we had to travel to the funeral, the people in our group told us they would donate any hours we needed to cover our weekly hours. Our group was very generous and kind. We truly appreciated them. We know these families care about us. On the anniversary of our open house, we always have a get-together to celebrate. We love the families we built with!

Neighborhood Nonprofit Housing Corporation (NNHC): A Utah-based nonprofit committed to creating quality affordable housing opportunities in their communities and giving households skills necessary to become self-sufficient. NNHC offers programs such as mutual self-help housing, and housing and foreclosure counseling, and as well as loan products.

"Our Home, Our Community"

October 6, 2014/in What does affordable housing mean to you?

by Lucero Cortez and Erika Parkinson, Catholic Charities of Yakima

This story appears in the Fall 2014 issue of Rural VoicesZaida Elena Lopez and Ivan Chavez moved to Washington State from Chicago four years ago in search of work. They moved into a one bedroom house that they rented in an orchard that was very far from the community. This is where they had been raising their four year-old son, Brandon. Zaida explained that this was a very lonely, solitary house to live in as there were no other children for her son to play with. She also explained that besides being very isolated and lonely the house had very poor living conditions. It was poorly insulated and the family was often cold in the winter as the house did not retain heat and their heater rarely worked properly. Furthermore, the bills they paid were very expensive. Zaida told us that her monthly electric bill totaled approximately $400 a month!

screenshot from video jpg Zaida Elena Lopez and Ivan Chavez in their new home

Since their move from Chicago to Washington, Zaida is a stay at home mom and Ivan works as a Forklift Driver for an agricultural warehouse. Ivan works nights at the warehouse leaving his wife and son alone. He wanted a more secure living environment for his family, and a better house for them to live in as they think about expanding their family. These many factors made the family want to have their own home that would be safer, larger, and more integrated into the community.

Zaida’s aunt told her about Catholic Charities Housing Services (CCHS) and their Single-Family Home Ownership Program. Her aunt was filling out an application with CCHS, and this motivated Zaida to apply as well. Ivan and Zaida were surprised at how easy the process was, from the moment Lucero Cortez, Program Assistant with CCHS, helped them fill out the application.

“That is where everything started,” Zaida said. “At some point we thought that we were not going to qualify because of my husband’s income, but thank God that CCHS was able to help us and we were able to qualify for a home in the coommunity of Tieton.”

CCHS requires qualified homeowners to put 250 hours in “sweat equity,” which means they help with work on their house while it is being built. This may seem like a deterrent to some families, but Zaida said, “When you are interested in something it doesn’t matter what you have to do to accomplish your goal.” Zaida would come to the house with her son, Brandon, to clean, pick up garbage and debris the contractors left behind, and to weed. The family would often come once or even twice a week to help, and Ivan would sometimes leave work early to spend time helping his wife and son. “My son helped out a lot,” said Zaida. “He would come here and be very happy to clean the house. I told him from day one that this was going to be our house that this would be where we would move.” Brandon can often be heard at the house telling his mom proudly, “This is our little house.”

“We are very thankful to Catholic Charities Housing Services for their support. They made us feel calm through the entire process because whenever we had a problem they would be there,” Zaida said. This home will be a place for Zaida, Ivan, and Brandon to have a community with neighbors and children for Brandon to play with, and will be a great place for them to continue their family in a safer, friendlier environment.

Catholic Charities of the Diocese of Yakima provides help and creates hope for thousands of people each year regardless of religious, social or econimic backgrounds. Catholic Charities provides a myriad of vital services in communities through it’s network of agencies: Catholic Family & Child Service, Catholic Charities Housing Services and the St. Vincent Centers.

Making Almost Heaven a Reality in Rural West Virginia

October 6, 2014/in What does affordable housing mean to you?

Converting a log cabin to a modern home means this widow does not have to live in the cold

by John David, Southern Appalachia Labor School (SALS)

This story appears in the Fall 2014 issue of Rural VoicesNancy and Cecil (Cork) Labus decided 19 years ago to return home to West Virginia and looked for a rural inexpensive house near where Cork had family. They found an old place that had been unoccupied for a decade near Hico, West Virginia in Fayette County.

Fayette County is “at risk” as defined by the Appalachian Regional Commission. Recently, USDA-Rural Development added the county to its “Strikeforce” category citing pervasive poverty and related socio-economic factors. People who once worked hard in coal mining and resource-based industries are struggling to survive and many, such as Nancy and Cork, had health issues.

The house that Nancy and Cork found was actually a three wall log cabin structure with an “add on” on the fourth side. The roof consisted of trusses and rafters made from tree limbs. The house was heated by a wood burner and wires dangled dangerously inside and out. Needless to say the rehabilitation of this house presented a unique challenge to members of YouthBuild, AmeriCorps, and volunteer programs with the Southern Appalachian Labor School (SALS) who participated in helping to rehabilitate Nancy and Cork’s house.

labus-smith-web Nancy Labus (left) and Vickie Smith of SALS enjoy a peaceful moment together

Vickie Smith, who has been the SALS Construction Manager and licensed contractor for 20 years, had never seen a house like Cork and Nancy’s before. At first Vickie expressed dismay that the home was on the “to do” list for her. But Nancy, who had heard about the SALS program in a newspaper featured article, was tenacious to see her house rehabilitated. She called SALS over and over for at least a year and until she finally prevailed. SALS then engaged in the tedious process of cobbling together funds from the Pittsburgh Federal Home Loan Bank/United Bank’s Affordable Housing Program, USDA-Rural Development’s Housing Preservation Grant program, residual money from other projects, and tax-credit donations through the West Virginia Neighborhood Investment Program to assemble a “Force to Make a Difference” for the Labus family. The job was turned over to Dave Shaver, a seasoned SALS site supervisor, who has experience with turning around almost impossible to rehabilitate houses into something beautiful.

The rehabilitating process was helped considerably by the grateful attitude exhibited by Nancy and Cork. While they had no children together, Nancy had several by a previous marriage. Her son, along with Cork, worked on the roof as “self-help sweat-equity”. Nancy provided holiday presents and cooked for the crew, which was highly appreciated since the house was a long ways from anywhere. Crew members even helped cook and Nancy now jokes that the nearly two year project took longer than needed because nobody wanted to leave. Daniel David, a crew member from the first day of construction, recalls that the house was tough but the family’s support made everyone more than willing to go the extra mile.

Some of Nancy’s most special moments were being around the crew who contributed so much love, sweat, and tears for her “Home Sweet Home” in Almost Heaven, West Virginia.

The energy audit conducted by SALS on the house was off the charts. The entire house had to be insulated and almost everything inside and outside of the house had to be either replaced or rebuilt. The logs of the cabin had to be sheeted inside and out due to cracks, skeletons of critters in the attic had to be removed, and tree branches supporting the roof had to be reinforced. The windows that were popping out had to be custom made, Energy Star rated, and re-fitted. The back entrance with steps had to be totally re-built since access was impossible, not to mention the wood burner and pipe had to be replaced with an Energy Star HVAC (heat/AC) system. The crew installed all new wiring, and due to a new regional rural water system, the Labus’ old well which contained brown iron-water had to be disconnected and new plumbing installed. Crew members also leveled and fixed the floors because the new added on rooms and porches had various levels, support structures, and underpinning. Nancy recalls a situation where it took three hours and a smoking hot drill to install a light due to the logs and hard wood used throughout the house.

Despite everything that had to be done, Nancy could not hide her excitement at seeing her home coming together. She kept telling crew members “Thank you! Thank you!” and says she cried a lot with happiness. She now says she is “real proud” of her home. As she puts it, “The house is no longer an eyesore along the highway”. Some of Nancy’s most special moments were being around the crew who contributed so much love, sweat, and tears for her “Home Sweet Home” in Almost Heaven West Virginia.

The house was completed nearly five years ago. Then, just last year on December 19, 2013, Cork suddenly died after over 30 years of marriage. In remembrance of him and his memories, Nancy wears a heart-shaped pendant containing some of his ashes. She said the welfare department in West Virginia offered to pay $1,250 for his arrangements, but it wanted to put a repayment lien on the house. Proudly, thanks to having the house done by SALS at no cost, Nancy said she turned down the offer. She told us that she wanted to be “debt-free at last”.

As Vickie and I concluded our visit, Nancy hugged us and cried. But the day was not over. The home health nurse was knocking on the front door. It was time to keep hope alive.

Southern Appalachian Labor School (SALS): is a West Virginia nonprofit that provides education, research, and linkages for working class and disenfranchised peoples in order to promote understanding, empowerment, and change. SALS is committed to developing a real comprehension of the social, economic, and legal structures which affect the lives of the Appalachian people.

The Balancing Act

October 6, 2014/in What does affordable housing mean to you?

A single mother’s self-help journey

by Joey Henderson, Florida Home Partnership

This story appears in the Fall 2014 issue of Rural VoicesMs. Yvette Marie Cabili has managed to overcome numerous obstacles in her life and has not only become a self-help homeowner through Florida Home Partnership (FHP), but has also fulfilled her desire to help others achieve homeownership. Ms. Cabili learned the concept of self-sufficiency and determination from observing her mother, Maria Vazquez.

Immigrating to the United States from Mexico as a teenager, Ms. Vazquez overcame a language barrier and culture shock. Becoming a single parent at age 30, she was committed to raising and providing a better quality of life for Yvette and her younger sister, Melissa. Ms. Vazquez’s determination and persistence would later influence Yvette’s desire to achieve.

Born in the late 70s, Yvette attended elementary and junior high school in Los Angeles, California. Her mother relocated to the Tampa Bay area in the early 1990s with her employer GTE. After graduating from high school in Brandon (a suburb in Tampa), Yvette briefly attended the University of South Florida but soon left to join the United States Army in the late 1990s. Stationed at Ft. Bliss in El Paso, Texas, she served two years as a private first class. She worked as an Information System Operator-Analyst, and later married. Yvette eventually opted to resign from active duty, considering her husband’s active status in the Army. They were also preparing for the birth of their first-born child. With her husband’s reassignment, the family moved to Wiesbaden, Germany after the birth of their second child.

As circumstances would have it, Yvette and her husband divorced two years after moving to Germany. She was forced to return to the United States as an unemployed, single parent of two toddlers. Yvette then moved in with her mother and sister. She knew she had to start life over again at the young age of 25 and that this new life would involve struggles, heartaches and sacrifices. She learned from her mother that being a single parent is not a disadvantage, but rather a stage in life’s journey that should be used to cultivate self-determination and to inspire her children to greatness. Yvette saw her mom as a “super hero” and that’s how Yvette wanted her children to see her.

Yvette’s first civilian job was in retail and customer service. Customer service was something Yvette thrived in and felt rewarded by helping others; however, the entry-level pay insufficiently covered her bills. She then secured a better paying job with an insurance company in Lakeland, Florida and decided to also enroll in the local community college. Yvette strived to help her mother with household expenses, but the multiple responsibilities were overwhelming. Her mother’s hairstylist knew of Yvette’s situation and advised her of a self-help homeownership program for low-income first time homebuyers. Yvette’s mother shared the information in hopes that her daughter would qualify for the program.
Yvette was hesitant to apply at first, and asked herself, “What’s the catch?” After doing some research, she obtained the information packet and tried to identify the hidden “catch.” Yvette thoroughly read all the documents and investigated the organization as she knew this decision would not only impact her life but would also completely change her daughters’ lives as well. The only “catch” she found was her own fear. Yvette feared that she would fail and feared that she would let her children down. Instead of letting those feelings discourage her, she reflected back to her desire to be an inspiration for her daughters; thus, she applied for the program.

Yvette was among the few applicants whose credit history was acceptable and revealed no issues preventing her from enrolling in the program. Although her credit was in good standing, the demand of the application process was a challenge. Every other day she received a call from her loan specialist about a paystub that was out of date, a small bonus from her job that had to be explained and employment verification that had to be re-verified. The day came when she received the green light to close on her lot and begin the next phase of becoming a self-help homeowner.

Her perseverance was tested as she strived to commit to raising her daughters with her mother’s help, building a home, and taking college courses. There were many emotional talks with her daughters (ages 6 and 8 at the time) to try to explain that ‘their mother doesn’t like being away from them all the time and that she was doing all this for them’. The program required Yvette to work Saturdays and Sundays on her own home and the homes of the individuals in her group. Yvette had to request a shift change from her employer in order to take opportunity of the self-help homeownership program.

One thing she always mentions to homebuyers, whether they are single or not, is “If I did it, you can too! It’s mind over matter!”

The request for a shift change took some time to be approved; therefore, Melissa was able to stand in for Yvette at the beginning of the program. Once the work schedule was approved, Yvette diligently worked on her home. During days off, she would work 8 to 10 hours cleaning, framing, caulking, painting and much more to meet the sweat equity requirements for building her home and the homes of her future neighbors. Many of her group members came to their homes during the week, but Yvette was unable to do likewise due to her work and college schedules. Yvette would arrive on weekends at the break of dawn and stay until dark to do what she could on her home so she didn’t fall behind.

The demanding requirements of the self-help homeownership program, driving 80 minutes to and from work and completing her course-work to earn an Associates of Arts Degree was at times very overwhelming. She recalled one day, while painting the walls alone in her new home, becoming overcome with tears. Yvette thought as she wept, “Ok, Yvette you can cry but keep painting. The light at the end of the tunnel is reachable.” From her initial request for the FHP Self Help Housing application process to the moment of final inspection, the self-help homeownership program was an emotional rollercoaster. Yvette had her highs and lows but despite the multiple demands, she learned time management, discipline and the basics of building a home. She gained construction skills, home maintenance knowledge and, along with everyone in her group, she grew as a person. She convincingly states that “everyone has the capability of becoming a ‘super hero’!”

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With her never fading smile, Yvette worked diligently and was a tremendous support to her group of self-help homeowners by helping to keep everyone on task. Her positive approach was very contagious, and seemed to motivate her group even during hot and long days. She gave 100% effort in each of the groups she was assigned and fulfilled every task given by her Family Construction Coordinator. Yvette felt that by giving her best to the individuals of her group that they would do the same when it came to working on her home. Yvette realized she had a knack for details when it came to painting; hence, she took on most of the detailed painting tasks (e.g., painting walls along the ceiling’s edge, along the base boards, around trim work, etc.). Yvette gave instructions on her painting techniques to help members in her group improve their methods. Little did she realize that she would instruct hundreds of homeowners on the same tasks years later.

As the eight months to build her home were coming to an end, Yvette realized that her dream of homeownership would soon be achieved. In May of 2008, Yvette not only graduated with an Associate of Arts degree from Hillsborough Community College, she also became a self-help homeowner at the age of 28.

Admiring the expertise demonstrated by the FHP staff, she set as her goal to work for the nonprofit. Her wish would soon come true when Jesse Ornelas, manager of the FHP construction team, recognized Yvette’s leadership potential and approached her about working for FHP. She welcomed the opportunity and later interviewed with the Executive Director. Upon being hired Yvette went from an air-conditioned office job to working outside on construction sites in the Florida climate (heat, cold, rain and shine).

It has now been five years since Yvette was hired by FHP to work as the Family Construction Coordinator II. In her role, she has assisted 144 first time homeowners achieve their homeownership dreams. Yvette has educated self-help homebuyers about the building process, coordinated their schedules, inspected their work, motivated them to push forward and proudly provided them the keys to their new homes. With the homebuilding process taking 6 to 8 months to complete, Yvette plays an integral role in the future of each of the self-help home buying families. She has witnessed great struggles that some new self-help home buying families endure and overcome during the construction process which in turn re-motivates and re-inspires her.

Being the only female employee at construction sites, Yvette had to overcome some gender stereotyping. She worked as hard and sweated just as much as the next employee. She has even taken classes to increase her understanding about housing construction. Yvette feels blessed to be working for FHP and would never have thought that she would gain so much personal reward and gratitude from a job. Yvette describes her work and the program in two words, “amazing” and “awesome!”

For the past six years, Yvette has enjoyed living in her home with her daughters Teresa and Elycia. She likes the fact that her community is quiet and well kept, with the exception of an occasional stray dog taking liberties in her yard. She enjoys learning to repair things around her home (e.g., repairing a leaky faucet, changing a door knob, replacing a faulty light switch, etc.) which helps enable her to educate other homeowners with confidence. One thing she always mentions to homebuyers, whether they are single or not, is “If I did it, you can too! It’s mind over matter!”

A mud run and obstacle course enthusiast (particularly for events that raise money and awareness for cancer research), Yvette exclaims that, “It [participating in the self-help homeownership program] was very challenging, but worth the sweat and tears.” Yvette is a valued member at Florida Home Partnership and is a model of success for the self-help housing program.

Florida Home Partnership: A non-profit homebuilder that offers affordable homeownership opportunities to low and moderate income first-time homebuyers through the USDA Mutual Self-Help Housing Program. The program began in the early 1960’s, and mirrors the “barn raising” of the Quakers with neighbors helping neighbors to build their homes together. No construction experience is necessary as Florida Home Partnership provides guidance and tools.

Affordable Rural Housing It’s Not a Nicety But a Necessity

October 2, 2014/in What does affordable housing mean to you?

View From Washington

Congressman Emanuel Cleaver, II, shares his housing story and offers his views on housing across the country

by The Honorable Emanuel Cleaver, II, Missouri’s Fifth District

This story appears in the Fall 2014 issue of Rural VoicesOwning a home is part of the American dream. It’s a person’s private piece of paradise. The pride of home ownership often fosters not only a desire to take care of one’s personal property, but also an effort to protect the integrity and appearance of the surrounding neighborhood as well. Affordable housing is a key component to a vibrant, expanding, and prosperous community.

As a little boy, growing up in Waxahachie, Texas, my family and I didn’t have indoor plumbing until I was 7 years old. That’s when we moved up in the world, by moving into public housing. When a move into public housing is considered a monumental step up in the world, you can imagine the delirious euphoria that came years later, when we finally had a home of our own. My father worked three jobs, put my sisters, my mother, and I through college, and moved our family into the first home we ever owned. He still lives there today.

We all have our own personal stories, but the availability of, and access to, affordable housing for everyone, is a national concern as well. The buying and building of houses is a huge contributor to the vitality and viability of a community. Jobs are created or sustained as construction crews, real estate and other professionals, and business owners and employees are in high demand. The influx of tax dollars provides a solid foundation for public services including police, fire, and sanitation workers who help make a neighborhood safe, clean, and a quality place to live. Financial institutions make loans, restaurants sell food, and teachers begin educating our children. Affordable housing helps a community come alive. According to the United States Department of Agriculture (USDA), families and individuals living in Rural Development financed homes in the district I represent, Missouri’s Fifth District, see every dollar spent in the local economy multiply by six times.

So, I am asked all of the time, “What are elected officials doing in Washington to continue improving programs, increasing opportunities, and ensuring affordability for those in rural areas throughout our nation?” Sadly, a better question might be, “What are we doing in Washington at all?”

I say to you without hesitation – Not Enough! And some days, it seems, nothing is getting done at all. Except for arguing. The partisan back-biting, political bickering and agenda motivated maneuvering seem to go on forever. And it needs to stop. There are important issues on our plate. Issues that impact our families and our futures. Issues that need, and deserve, our serious attention right now.

Missouri’s Fifth District stretches all the way from the urban core of Kansas City east to the farms of Marshall. The distance is a whopping 90 miles, but the lifestyles seem even farther apart than that at times. My district truly represents a microcosm of this great nation, with not only urban and rural communities, but suburban ones as well. The needs of these residents vary greatly from region to region. Rural communities have different needs and different concerns than those in the other areas. And while it is my passionate belief that all residents of my district need access to affordable housing options, certainly my rural constituents have special and unique needs that need to be addressed as such.

As a Member of the House Financial Services Committee, and a Member of the Subcommittee on Housing and Insurance, I pay special attention to these issues and concerns. One important issue for rural communities, for instance, is flood insurance. Congress recently enacted the Homeowner Flood Insurance Affordability Act of 2013. This law protects people who have flood insurance from facing dramatic rate hikes. For constituents hit by premium increases they simply can’t afford, it provides relief in the form of a refund. The law also requires the Federal Emergency Management Agency (FEMA) to get the affordability study to Congress that was supposed to be finished almost a year ago.

Source: HAC Tabulations of HUD and USDA data; National Housing Preservation Database

Folks living in rural areas are particularly well served by their local USDA offices. That agency plays a critical role in bringing the dream of home ownership within reach. For people who choose to live, work, and raise their families in this country’s strong rural communities, many have not only found that the programs focusing on housing loans have helped them buy, but have also vastly improved their quality of life. Other available options provide loans and grants for everything from hospitals, fire stations, and nursing homes, to funding for apartments for those with low-income or the elderly, schools, and housing for farm laborers.

There are issues and complexities that occur in a rural landscape unique only to those communities. The USDA, through Rural Development, has worked for more than half a century to understand those nuances and provide housing options that don’t exist outside of rural America. For instance, USDA’s loan program offers borrowers an opportunity for homeownership with no money down, and allows rural families to stay right where they are. I continue to believe moving rural housing programs under a freestanding FHA is not a move toward efficiency, as many in Washington contend, but one that sets rural communities back and leaves them stuck in the past.

Right now, in Missouri’s Fifth Congressional District, the numbers and dollar amounts for 502 Guaranteed loans active and being serviced in Jackson, Lafayette, Ray, and Saline counties, show an impressive amount of families utilizing the program. There are 1,691 loans totaling more than $170 million.

Affordable housing in rural America is not just a nicety, it’s a necessity. It must be available, accessible, and affordable for those who need it. And, make no mistake, I will continue fighting to make sure it’s just that.

Is the Housing Crisis Over? And how did it impact rural America?

July 10, 2014/in Is the Housing Crisis Over? Persistent Poverty

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The July 2014 issue of Rural Voices takes another look at the housing crisis and asks some important questions. Knowledgeable experts in the affordable housing field share their expertise, insights, and strategies to improve housing conditions in light of the Great Recession.

VIEW FROM WASHINGTON

Discussing Community Reinvestment in Rural America
by Thomas J. Curry, Comptroller of the Currency

How banks and federal savings associations can more effectively serve the credit needs of rural communities

SPECIAL FEATURE

Is the Housing Crisis Over? And how did it impact rural America?
An interview with:

Eric Belsky, Director, Joint Center for Housing Studies at Harvard University
Sheila Crowley, Executive Director, National Low Income Housing Coalition
Gail Burks, President & CEO, Nevada Fair Housing, Center, Inc.
Chuck Wehrwein, Acting President & CEO, NeighborWorks America

Four national leaders discuss the housing crisis and its impact on rural America

FEATURES

Repurposing Foreclosed Properties in Rural America
by Noel Poyo, Executive Director, and Christopher W. Sanchez, Program Director, National Association for Latino Community Asset Builders (NALCAB)

A consortium of nonprofits works at the local level to reverse the devastating effects of the foreclosure crisis

Housing Counseling Services Offer More Than Just Counseling
by Keith L. Morris, President, Elder Law of Michigan

While housing counselors are instrumental in helping people avoid foreclosure, they also provide invaluable resources to help families improve their lives

Making a Difference in Rural America
by Tony Hernandez, Administrator, USDA Rural Housing Service

Newly appointed Rural Housing Service administrator shares his thoughts and priorities for USDA’s housing initiatives

MAPS

The housing crisis and its wake in rural America– (Interactive Prezi)

Add your Response

Rural Voices would like to hear what you have to say about one, or all, of these issues. Please feel free to comment on this story by sending a tweet to #RuralVoicesMag, discuss on the Rural Affordable Housing Group on LinkedIn, or on our Facebook page.

Today, the housing crisis is defined by different factors

July 10, 2014/in Is the Housing Crisis Over? Persistent Poverty

For more on this topic, read the July 2014 issue of

chuck-wehrwein-web Chuck Wehrwein, Acting President & CEO, NeighborWorks America

Do you believe that the housing crisis is over?

While it is true that there are a lot of signs of recovery for the nation as a whole, the housing crisis is not over in many communities around the country. Many of the communities that we work in are still dealing with a backlog of vacant and abandoned properties.

For more on this topic, read the July 2014 issue of .

In 2008 the U.S. economy fell off a cliff. Depending on your perspective it either slipped or was pushed from that precipice by the housing markets. But after six years where are we? How were rural Americans impacted, and are there lingering effects from the crisis? Rural Voices assembled four of the most knowledgeable experts in the affordable housing world to help answer these complex questions and provide insights on how to improve rural housing conditions in the wake of the housing crisis.

chuck-wehrwein-web Chuck Wehrwein, Acting President & CEO, NeighborWorks America

Do you believe that the housing crisis is over?

Particularly feeling the brunt are families who are still under water on their mortgages and younger people who are unable to buy their first home because that can’t qualify for a loan or can’t find an affordable house – often due to crushing student debt.

To put it in perspective, in April there were 46,000 completed foreclosures, according to CoreLogic. That represents a significant decline year over year, and foreclosures have been falling for two and a half years. But, it is also important to note that the monthly number of completed foreclosures is still almost double what it was in the average pre-crisis month between 2000 and 2006. The Urban Institute estimates that, mostly because of tight credit, as many as 1.2 million loans that would have been made in 2001 are “missing” from today’s market.

And let’s not forget the families who can’t even afford to think about buying, yet are paying more than 50 percent of their incomes on rent or are homeless.

All of that points to a housing crisis that is not over yet.

What factors defined the “housing crisis?”

Five or six years ago, the “housing crisis” that was in the news every day was defined by foreclosures. People were losing their homes to foreclosure at a truly alarming pace.

Today, the housing crisis is defined by different factors. One is the lack of affordable rental housing, another is housing affordability, a third is tight lending standards, and a fourth is home values that is still leaving many borrowers underwater.

Of course, there other severe housing challenges that are much more long-standing, particularly in rural areas. These include a general lack of affordable housing and, historically, widespread poor housing conditions.

How, was the housing crisis different for rural areas than the nation as a whole?

Most rural areas didn’t see the wild price fluctuations that we saw in urban and suburban areas during the boom and bust years. So, while families lost value in their homes, they probably didn’t lose as much equity as urban and suburban residents.

But that is not to say that the housing crisis—and the foreclosure crisis—didn’t impact rural areas. There certainly was—and is—a housing crisis in rural areas – although it hasn’t been as well covered by the media. NeighborWorks has seen firsthand through our administration of the Foreclosure Mitigation Counseling (NFMC) program the impact of foreclosures in rural areas and the need for education and counseling. Through July 2013, almost 180,000 families in rural areas had received foreclosure counseling through NFMC.

Five or six years ago, the “housing crisis” that was in the news every day was defined by foreclosures. People were losing their homes to foreclosure at a truly alarming pace. Today, the housing crisis is defined by different factors.

What are some of the indirect or secondary impacts of the housing crisis?

At NeighborWorks America, we definitely see some of the impacts of the housing crisis on NeighborWorks organizations and the residents they serve, including those in rural areas. The decrease in government funding for housing—both from UDSA and HUD—has meant they are able to develop fewer new rental housing units, and that they are concerned about finding the resources to preserve existing units.
Homeownership has also been impacted. NeighborWorks organizations tell us anecdotally that it is harder for their customers to get mortgage loans due to tightened lending standards.
The Center on American Progress reported recently that nearly half of all mortgages made today go to borrowers with credit scores of more than 750, compared to 2001, when more than two-thirds of mortgages went to borrowers with scores lower than 750. That means more customers are looking to FHA and USDA loans for help. In addition, some of our organizations say the consolidation of USDA offices are leading to longer processing times for mortgage loans issued by the agency – a mainstay in rural communities. NeighborWorks organizations who have CDFIs are working hard to fill in the gaps in the mortgage market.

Photo: Empty – Ruin Raider – Creative Commons

What are the long term ramifications for affordable housing?

Let me start by saying that it is our experience at NeighborWorks that nonprofit community development organizations serving rural areas are some of the most creative groups out there. I am very confident they will continue to go a long way toward serving the housing needs of their rural communities.

However, there still are many people in rural areas who are in need decent, affordable housing. Additional resources are needed to expand opportunities on a broader scale, and given the current funding environment, that will be very challenging.

But there is always a silver lining. The quality and energy efficiency of new manufactured housing have improved greatly and this type of construction could help serve some of the unmet needs if ramped up. Some states and organizations are working to improve the energy efficiency by doing replacements of older manufactured homes as well. And we have seen in the NeighborWorks network and through ROC USA, the value that resident-owned manufactured housing communities bring to residents and to communities. It is my hope that the challenging funding environment will lead local policy makers to, for example, reconsider their ownership laws for manufactured housing, and lenders to find new ways to finance them.

Is the Housing Crisis Over? And how did it impact rural America? – Gail Burks Responds

July 10, 2014/in Is the Housing Crisis Over? Persistent Poverty

For more on this topic, read the July 2014 issue of

gail-burks-web Gail Burks, President & CEO, The Nevada Fair Housing Center, Inc.

Do you believe that the housing crisis is over?

For more on this topic, read the July 2014 issue of .

gail-burks-web Gail Burks, President & CEO, The Nevada Fair Housing Center, Inc.

Do you believe that the housing crisis is over?

As I contemplated this question, my mind wandered to a quote given to Supreme Court Justice Potter Stewart by his law clerk in an effort to define obscenity – “you’ll know it when you see it”. In rural America, no other quote could so aptly describe the housing scene. From an evidence based perspective, three continuing themes support the premise that we have not seen a recovery. First, to date, proposed solutions have not been tied to real time field data from rural areas of the country. Rent a vehicle and drive in any direction and you will know rural America when you see it, along with the attendant housing problems. Second, the design of programs such as the Neighborhood Stabilization Program (NSP) did not contemplate rural development issues such as the additional due diligence required on wells, open range, etc. Third, the foreclosure numbers are a consistent moving target. Depending on the state, defaults are not necessarily finalized within a set timeframe. The rule of law within the local community may extend, sometimes for years, the actual trustees’ sale. When obtaining data on foreclosure, it’s important to define the parameters. Until we can clearly identify the problem based on reality, solutions will continue to be illusive at best.

What factors defined the “housing crisis?”

Depending on which day and commentator you listen to it is the fault of the homeowner, bank or society in general. They all got it wrong. Nothing in society rises or falls based on one thing. In our sworn testimony for the Congressional body known as the Federal Financial Crisis Inquiry Commission, we highlighted how various factors converged simultaneously to create the current market in our state or on a broader scale.

It is also important to note that the housing crisis must be viewed within the context of the greater economy in both the U.S and abroad.

Nevada consumers initially complained about predatory lending practices in 1999. By 2001, the Nevada Fair Housing Center, Inc. began to see an average of over four hundred clients per month with predatory lending issues. Clients presented cases that included such loan practices as appraisal fraud, flipping, high interest rate loan products, excessive prepayment penalties and violations of Federal law in the servicing of these loans.

No one can debate the need for legitimate non-prime (subprime) lending products. The subprime market served individuals with little or no credit, along with those recovering from a financial setback.

Until we can clearly identify the problem based on reality, solutions will continue to be illusive at best.

Traditional equity enhancements allowed a non-prime borrower to obtain credit. These often included verification of non-traditional credit (i.e. rental payments, utility bills, etc.), proof of one month’s reserve, establishment of an impound account and private mortgage insurance (PMI.) While the non-prime borrower might pay more for the cost of credit, that cost was directly related to lender risk.

However from approximately 2004 – 2007, the purpose and role of non-prime became lost in the zest to create profit driven securitized products. Non-prime mortgages mutated into fantasy financing. Out of this mutation grew a new breed of mortgage product, fueled by:

No underwriting
Lender failure to determine the ability to repay the loan
Failure to fully amortize the payment
Failure to establish impounds for insurance and property taxes

Many consumers received loan products that were not suitable based on their credit and income. When payments on “option” adjustable rate mortgages (ARMs) and pick-a-payment mortgages began to adjust, many consumers experienced payment shock.

No document loans also fueled the crisis. Traditionally, this standard product was only offered to self employed individuals with twenty percent down. However, brokers began offering the product to consumers on fixed incomes such as seniors and working families.

This crisis was further fueled by the joining of strange bed fellows. Providers of services- brokers, correspondent lenders, title companies, appraisers, real estate agents- formed alliances to make money. Sadly, some consumers sought to grab the brass ring and become ‘investors’ and share in the new get rich craze.

How, was the housing crisis different for rural areas than the nation as a whole?

Rural America experienced a crisis. In part, the financial meltdown contributed to a decrease in the ability to develop and leverage housing. Not only did consumers in rural America experience foreclosures but the development side was also impacted.

Mississippi County Home – Jimmy Smith – Creative Commons

What are the long term ramifications for affordable housing?

No. As previously stated, the design of programs such as NSP did not contemplate the additional due diligence required for rural properties. In addition, foreclosure numbers are a consistent moving target. Until we can clearly identify the problem based on reality, solutions will continue to be illusive at best.

The guidelines for HARP failed to take into account the local real estate markets (all real estate is local) and the refinance rules that were in place with Fannie and Freddie due to receivership. In other words, if some markets were so upside down from an equity standpoint, refinancing was obviously not an option. Public trust is very important. Press announcements about programs that were not practical for the market caused many consumers to lose hope.

The goal of the HAMP program was admirable. However, execution was inconsistent. Consumers received various degrees of assistance. The common denominator with all the programs, lender participation, was voluntary. The consistent loss of paperwork by lenders, inability to reach lender staff, lack of coordination between lender departments, made the program difficult. Lenders do not do “one offs”; therefore, their goal was to incorporate the program into the lender’s automated systems. This took years. Moreover, from a legal standpoint, many lenders could not make the final decision absent investor sign off. Marketing indicated that all lenders utilized the same process. In reality, this was not the case. Later in the program, an effort at centralization to send consumers through one computer system hurt past efforts. Due to various lender pools, investors, and legal pooling service agreements for mortgage backed securities, the marketing of assistance did not match the reality. Despite the good field work again, consumers lost faith in the system.

As consumers lost faith in various announced programs, the rise in strategic defaults increased. The attitude of “why pay for something that is worth less” seemed to overshadow the idea of contract obligations.

In Nevada, the passage of legislation to create a mediation program actually encouraged lenders to work with consumers more than all the federal programs. Similarly, litigation in some areas provided relief.

What are the long term ramifications for affordable housing?

Sometimes old methods work best. As a product of rural America, many programs have disadvantaged communities in providing a false sense of security. The long term ramifications are a stunted growth in outlying areas

Is the Housing Crisis Over? And how did it impact rural America? – Eric Belsky Responds

July 10, 2014/in Is the Housing Crisis Over? Persistent Poverty

For more on this topic, read the July 2014 issue of

Eric Belsky, Director, The Joint Center for Housing Studies at Harvard University Eric Belsky, Managing Director, The Joint Center for Housing Studies at Harvard University

Do you believe that the housing crisis is over?

I think we have turned a corner in many places. Housing prices have started to move up again. Housing starts for both single family and multi-family are picking up. Home sales are also increasing. From a broad perspective, many markets are starting to head higher.

For more on this topic, read the July 2014 issue of .

Eric Belsky, Director, The Joint Center for Housing Studies at Harvard University Eric Belsky, Managing Director, The Joint Center for Housing Studies at Harvard University

Do you believe that the housing crisis is over?

Some places continue to struggle to recover from such a significant downturn. Employment levels in these areas have not returned to the previous peak. There are still places with abandoned and vacant units as a result of foreclosure problems. For these areas, it is harder to get capital flowing again.

What factors defined the “housing crisis?”

Housing markets had enormous amounts of stress placed on them. This is partly due to the lending craze that resulted in many people buying homes that they could not afford. The bigger issue was the larger financial crisis and how that affected the broader economy. Many people became unemployed because of job losses that occurred in 2007 and 2008. They could not pay their mortgages or rents. Not everyone lost their job, many people found their hours curtailed. Some people replaced lost full time work with a part-time job. So, you had reductions in people’s incomes. All of those things created enormous stress on the housing market after a period of time where low interest rates and the availability of credit were driving up property values.

How, was the housing crisis different for rural areas than the nation as a whole?

Rural home prices did not rise as much as they did in the suburbs or in urban areas. The drop in rural home prices was also less severe but it was still significant. Even so, rural areas did experience a strong house price cycle and prices remain well below the previous peak.

Parts of rural America have been struggling with chronic employment issues for a really long time. Add on to that a fall-off in construction, which is a very local activity, and the result is more damage in places that are already struggling.

The hole created by all of this fall-out tends to be cumulative. Consumer spending fell. Savings rates went up. People were feeling that they had better spend less and borrow less. Those things translated into job losses across the country.

New construction jobs are starting to appear in some rural areas located on the edges of metropolitan areas. Although these jobs are not actually in rural areas, they are close enough for commuting. Resource extraction, for example fracking, makes a place look very different. The classic case was North Dakota. If the whole country experienced the job growth over the last six years, as did North Dakota, which is mostly a rural state, we would have had a strongly growing national economy.

Houses - Matthew - jargon777 - Creative Commons Houses – Matthew – jargon777 – Creative Commons

What are some of the indirect or secondary impacts of the housing crisis?

Well established literature shows that people’s spending behaviors are influenced by their perceived wealth. When people think the values in their homes are higher, they are more likely to spend more freely than if the value of their home has gone down. When they do not have the cash to spend, they will borrow in order to do it. Many people refinanced their mortgages during the 2004-2006 period and they took cash out of their home equity in record amounts.

Today, it is very hard to get a loan against the equity in your home and a lot of people do not have equity in their home. This is starting to improve but it certainly is not completely in the rear view mirror. Job losses and employment continue to be a drag on many local economies.

There are both direct and indirect effects of the falloff in construction activity. Construction workers spend their wages in the local economies; they support the local stores and their local movie theater.

Were the various federal responses to the housing crisis effective? If so, how?

Certainly one of the most important aspects of the federal response is the very strenuous effort by the Federal Reserve to drive down long term interest rates.

When you look at some of the more specific tailored programs intended to address the housing crisis, I would say that both HARP and HAMP helped. Millions of borrowers were reached by these programs.

Some people, who otherwise might not have been able to, were able to reduce their mortgage payments because of HARP. The HAMP program has not affected as many homeowners, The Neighborhood Stabilization Program (NSP) was undersized relative to the extent of the need.

Certainly one of the most important aspects of the Federal response is the very strenuous effort by the Federal Reserve to drive down long-term interest rates.

What are the long term ramifications for affordable housing?

If the economy continues to improve, which it does look like it will, house prices will also recover. This will restore people’s home equity, their ability to borrow, and their ability to spend. Some of the drag from government cuts is starting to abate and the economy seems to have forward momentum.

The housing market is very closely related to the broader economy. If the broader economy is doing better I would expect housing to get back on the road to recovery.

Higher interest rates have the potential contain the recovery on the homeownership side. In addition, credit standards still quite tight but they are getting a little less so.

Rental markets have been strong. Because of rental construction coming back and because many of the single family homes previously lost to foreclosures are coming back on the market for rent, you should see some moderation of rent increases.

The hardest thing to project is on the “for sale” side. What we are seeing is very unusual. There is a very low level of inventory of homes on the market. for sale Even though you see softness in sales, house prices are going up. The number of homes for sale is starting to creep back up which suggests moderation in house prices. This could help maintain the recovery but higher prices and rising interest rates will diminish affordability.

Is the Housing Crisis Over? And how did it impact rural America? – Shelia Crowley Responds

July 10, 2014/in Is the Housing Crisis Over? Persistent Poverty

For more on this topic, read the July 2014 issue of

Sheila-Crowley-web Sheila Crowley, Executive Director, National Low Income Housing Coalition What caused the home foreclosure crisis that came to a head in the fall of 2008 and precipitated the “Great Recession” is hotly debated. Explanations fall along predictably partisan lines. One side cites too much government interference in the marketplace, while the other side sees an unfettered marketplace allowed to run amok.

For more on this topic, read the July 2014 issue of

The undisputed result was that too many people took out home mortgages that they could not afford and too many lenders made loans that they knew the borrowers could not afford. It did not matter to lenders, because they could sell off the loans to the secondary market, take the cash, and move on to the next borrower who confused home buying with a get-rich-quick scheme.

In the name of “wealth-building,” the home buying push that led to the Great Recession will be remembered as a massive transfer of wealth out of low and moderate income African-American and Hispanic communities into the hands of major financial institutions and their investors. Not only has no one in a position of responsibility at these institutions been punished for the devastation of individual lives and whole neighborhoods, but the federal taxpayers bailed out most of these institutions, while providing too little, too late to the people who lost their homes and their assets.

Today, there is much consternation about the “softness” of the home-buying market and constraints on access to credit for potential home-buyers. We should ask ourselves why a low income renter whose neighborhood was blighted, who has not had a raise in years, who has friends and relatives who are still out of work or are underemployed, would believe that buying a house is a good thing to do. Low income people have every reason not to trust anyone who tells them buying a house is good investment. What happened to their homes is fueling mistrust that will stay with foreclosed families for at least a generation.

The conflation of “house” with “asset” in the policy and political narrative of the 1990s and 2000s led us lose sight of the meaning of “home.” Home came be idealized as a single family residential structure that the occupants “owned” by virtue of having borrowed money from a bank that is to paid off with interest in 30 years. Home as sanctuary and the center for family life became a secondary meaning and renting was relegated to a second class form of tenure. The federal government subsidizes home-owners through its support of the mortgage market, through the tax code, and through direct expenditures by HUD and USDA in amounts that dwarf support for renters.

Meanwhile, through the housing boom and bust and tepid recovery, the rental housing crisis only has gotten worse. The Joint Center on Housing Studies at Harvard University issues its “State of the Nation’s Housing” report each year. The 2000 report cited 5.4 million very low income¹ renter households who received no housing assistance paying over half of their income for housing and/or living in substandard housing.² The 2014 report shows that two-thirds of renter households with incomes less than $15,000 a year spend more than half of their income for housing, as do 34% of renters with household income between $15,000 and $29,999.³

Analysis of 2012 American Housing Survey data by the National Low Income Housing Coalition (NLIHC) shows there are 10.16 million extremely low income

The rental housing shortage has been exacerbated by the foreclosure crisis, as former homeowners moved into the rental market and potential homebuyers stayed in the rental market. An already inadequate affordable rental housing market has had to absorb the growing renter demand. In 2013, rental vacancy rates declined again to their lowest level since 2000 and rent increases continued to rise well above inflation.⁷

A major contributor to the rental housing crisis for very low and extremely low income households is the reduction of federal government support with cuts to HUD and USDA programs. A fiercely divided Congress and a worrisome federal deficit have resulted in severe cuts to all direct spending on low income housing. Both parties refuse to raise revenue to reduce the deficit, much less invest in affordable housing, schools, transportation, infrastructure, or a host of other neglected core social needs.

In the name of “wealth-building,” the home buying push that led to the Great Recession will be remembered as a massive transfer of wealth out of low and moderate income African-American and Hispanic communities into the hands of major financial institutions and their investors.

Why is rental housing a good investment? First, over one third of all American households are renters and virtually everyone is a renter at some point in his or her life. Second, renting makes the most sense for people who expect to live somewhere for less than a few years, because the transaction costs of buying and selling will likely exceed any equity they might accrue. Renting also makes more sense than buying for people whose employment has any uncertainty to it, like variable hours or the potential of lay-offs. Responding to reduced economic circumstances is much easier with a lease than a mortgage. Third, people at different stages of the life cycle may be better off renting than owning, especially if they are not in a position to maintain a house. People whose jobs require a lot of travel or older people may be happy without the bother of yard work or roof repairs. Certainly many people prefer the freedom and flexibility that renting offers.

Most importantly, extremely low income and many very low income families would be better served by strong rental housing market that offer them choices of where to live than they are by an array of inadequate, under-resourced, and outdated programs or being prematurely thrust into the mortgage market.

The most fundamental goal of housing policy should be housing security, which is what the 1949 U.S. Housing Act prescribed: a decent home and a suitable living environment for every American family. Housing security means paying what you can afford to live in a home that is adequate for your needs and from which you move only by your own choice. Housing security means not living in fear of eviction or exploitation or violence or hazards to your health. Housing security means also being able to afford healthy food, appropriate medical care, transportation to get where you need to go, and other necessities, with enough left over to be able to save for emergencies, education, retirement, and maybe even a down payment on a house. Housing security as a renter is a necessary precursor to borrowing to buy a house.

Recovery from the foreclosure crisis will take a long time; people need to heal from the trauma and reestablish trust with the institutions that failed them. Public policy should focus on getting back to basics. Does every community have enough housing that all the people who live there can afford? Or enough housing so that no child in its schools is homeless or churning from one home to another and one school to another? Or enough housing to assure that its elders live out their years with dignity? Or enough housing that its citizens with disabilities can lead productive lives?

The problem is not a lack of resources. The federal government will subsidize home-ownership through the tax code to the tune of $241 billion in 2015. These tax “expenditures” are the mortgage interest deduction, the property tax deduction, the capital gains exclusion, and the net imputed rent exclusion.⁸ NLIHC has proposed modest changes to the mortgage interest deduction⁹ that would not only raise enough revenue to solve the rental housing shortage, but will give a tax break to many more low income homeowners than claim the mortgage interest deduction now. NLIHC’s proposal will not cost the federal government any more than it already spends on housing and it will make the tax code fairer and simpler.

The solution to the rental housing crisis is in plain view. Modest adjustments to the mortgage interest deduction will raise enough revenue to fund rental housing programs for ELI households. All it takes is bipartisan political will, which unfortunately is in short supply.

1 Very low income is 50% of the area median or less.

2 Joint Center for Housing Studies. (2000). The State of the Nation’s Housing. Cambridge, MA: Harvard University.

3 https://www.jchs.harvard.edu/research/state_nations_housing

4 Extremely low income is 30% of area median or less.

5 The general accepted standard of housing affordability is no more than 30% of household income.

6 https://nlihc.org/sites/default/files/2014AG-11.pdf

7 https://www.jchs.harvard.edu/research/state_nations_housing

8 https://nlihc.org/sites/default/files/2014AG-92.pdf

9 Learn more about NLIHC’s proposal at https://nlihc.org/unitedforhomes

Three families share their experiences with USDA’s Mutual Self-Help Housing Program

How did you first hear about self-help housing?

What was the construction process like?

What were your living conditions before and after your participation in the self-help program?

What specific successes or challenges did you experience?

Converting a log cabin to a modern home means this widow does not have to live in the cold

A single mother’s self-help journey

View From Washington

Congressman Emanuel Cleaver, II, shares his housing story and offers his views on housing across the country

VIEW FROM WASHINGTON

SPECIAL FEATURE

MAPS

Do you believe that the housing crisis is over?

Do you believe that the housing crisis is over?

What factors defined the “housing crisis?”

How, was the housing crisis different for rural areas than the nation as a whole?

What are some of the indirect or secondary impacts of the housing crisis?

What are the long term ramifications for affordable housing?

Do you believe that the housing crisis is over?

Do you believe that the housing crisis is over?

What factors defined the “housing crisis?”

How, was the housing crisis different for rural areas than the nation as a whole?

What are the long term ramifications for affordable housing?

What are the long term ramifications for affordable housing?

Do you believe that the housing crisis is over?

Do you believe that the housing crisis is over?

What factors defined the “housing crisis?”

How, was the housing crisis different for rural areas than the nation as a whole?

What are some of the indirect or secondary impacts of the housing crisis?

Were the various federal responses to the housing crisis effective? If so, how?

What are the long term ramifications for affordable housing?

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