Contact: Leslie Strauss | 202-842-8600, ext. 141 | leslie@ruralhome.org
Lance George | 202-842-8600, ext. 125 | lance@ruralhome.org

HAC Studies Property Locations

Washington, D.C., May 14, 2008 – Rural counties farthest from urban centers, those with shortages of affordable housing, and those with relatively large minority populations are most likely to have high proportions of U.S. Department of Agriculture Section 515 apartments among their federally assisted rentals, according to a new Housing Assistance Council study. The report cautions against basing federal policy decisions on the assumption that Section 515 tenants have other housing options.

HAC studied the locations of more than 400,000 rental units for rural Americans with low incomes financed by USDA’s Section 515 program and their proximity to other federally subsidized properties. Many Section 515 developments are at risk of being lost as decent, affordable housing because of physical deterioration or owners’ desires to prepay their Section 515 mortgages.

“HAC knew anecdotally that in many rural communities Section 515 provides the only decent, affordable housing for people with low incomes,” explained Housing Assistance Council Executive Director Moises Loza, “but no one had done this kind of data analysis before.”

HAC’s research was made possible with funding from the John D. and Catherine T. MacArthur Foundation, which supports a ten year, $150 million initiative called Window of Opportunity: Preserving Affordable Rental Housing that aims to preserve and improve affordable rental housing across the country.

HAC’s research found that Section 515 units comprise particularly high proportions of the subsidized housing stock in four specific types of counties:

• nonmetropolitan counties, particularly more remote counties;
• urbanizing counties where demand for housing is increasing and rents are rising;
• nonmetropolitan “housing stress counties,” so named by USDA’s Economic Research Service because they suffer shortages of decent, affordable housing, whether local economies are booming or stagnant; and
• counties with proportionately high minority populations.

Examining Section 515 properties’ locations relative to other federally subsidized rental properties, HAC found that:

• fewer than half of all Section 515 properties are very close to other such subsidized properties (within one mile);
• more than one-fifth of Section 515 developments are relatively far from other subsidized properties (more than 10 miles);
• nearly half (45 percent) of these more isolated developments are located in the Midwest, and nearly the same proportion are located in the counties farthest away from metropolitan centers; and
• only 30 percent of Section 515 properties are within 10 miles of U.S. Department of Housing and Urban Development Section 202-811 properties, which provide rentals specifically for elderly and disabled people.

“By confirming that Section 515 tenants have few other options and that Section 515 properties are especially important in certain types of places,” Loza stated, “these findings support some government policy decisions. For example, when USDA is considering a request from a property owner to prepay a Section 515 mortgage and leave the program, the law requires it to take into account the availability of alternate affordable housing in the community, and the impact of prepayment on minorities. These are clearly important requirements.

“Similarly,” continued Loza, “60 percent of Section 515 tenants are elderly or disabled, and now we know that two-thirds of Section 515 developments are not close to alternative subsidized rentals dedicated to such tenants. Their needs must be considered carefully as well.

“Housing policy decisions must also take into account the significant unmet rental housing needs in rural America,” Loza concluded. “HAC’s study dovetails with a recent report from Harvard University’s Joint Center for Housing Studies that connects the mortgage foreclosure crisis and rental housing, and calls for a balanced national housing policy.”

“The Housing Assistance Council’s work on this study highlights the need to keep decent, affordable rental homes available in rural America,” said Erika Poethig, Associate Director for Housing at the MacArthur Foundation. “The MacArthur Foundation has made a significant, long-term commitment to reverse our nation’s loss of existing affordable rental homes, and is proud to support this valuable research that will inform the ongoing discussion about preserving and improving affordable rental homes in rural America.”

Connecting the Dots: A Location Analysis of USDA’s Section 515 Rental Housing and Other Federally Subsidized Rental Properties in Rural Areas is free on HAC’s website, www.ruralhome.org. Printed copies are available for $10.00 each from HAC, 202-842-8600.

The John D. and Catherine T. MacArthur Foundation is a private, independent grantmaking institution helping to build a more just, sustainable, and peaceful world. Through the support it provides, the Foundation fosters the development of knowledge, nurtures individual creativity, strengthens institutions, helps improve public policy, and provides information to the public, primarily through support for public interest media. With assets of $6.8 billion, the Foundation makes approximately $260 million in grants annually. More information is available at www.macfound.org.

A national nonprofit corporation headquartered in Washington, D.C., and founded in 1971, the Housing Assistance Council publishes numerous reports, program manuals, and other materials on rural housing topics. HAC helps local organizations build and preserve affordable homes in rural America by providing below-market financing, technical assistance, research, training, and information services. HAC’s programs focus on local solutions, empowerment of the poor, reduced dependency, and self-help strategies. HAC is an equal opportunity lender. More information is available at www.ruralhome.org.

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