Rural Poverty, Before and After the War

By James P. Ziliak, Center for Poverty Research and Department of Economics, University of Kentucky

rv-se-2014-coverThis story appears in the 2014 Special Edition of Rural VoicesThe 50th anniversary of the War on Poverty has generated scores of articles, books, and radio and television reports. Lost in much of this coverage is the acute hardship facing rural America at the dawn of the 1960s and the role this played in shaping the nation’s response to poverty. Lack of access to adequate food and health care, along with quality schools, roads, and housing was rampant in many rural communities, especially in Appalachia and the Deep South. The public policy response reflected that need with the creation of programs such as food stamps, school lunch and breakfast, Medicaid, Medicare, Head Start, and, later on, Section 8 vouchers, and Low-Income Home Energy Assistance. This article provides a brief overview of poverty trends, and lingering challenges, facing parts of rural America.

Photo by George Ballis

Poverty Trends

In the United States, the official measure of poverty compares a family’s money income against a family-size specific threshold. Money income includes private income from wages and salaries, self-employment, rent/interest/dividend income, and government cash transfers such as Social Security, disability, veteran’s payments, unemployment, welfare, among others. This information is collected in March of each year as a supplement to the roughly 50,000 – 60,000 households in the monthly Current Population Survey, and the income information refers to the previous calendar year. The family is the basic reference unit for poverty measurement, where family means two or more persons residing together and related by marriage, birth, or adoption. The income of all family members is summed to yield total family income for the year. All members of the same family, including related subfamilies, share the same poverty status. It is important to note that this measure excludes many of the programs borne out of the War on Poverty, such as the dollar value of food stamps and housing subsidies, Medicaid and Medicare, and also excludes tax liabilities and the refundable Earned Income Tax Credit. Spending on these programs now exceeds $1 trillion, but they are not part of the official poverty rate.

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The poverty threshold for a family is based on a 1955 survey of American families whereby it was determined that the average family of three or more persons spent about one-third of their after-tax money income on food purchases. This implies that after establishing the appropriate food budget one could use a multiplier of 3 to establish an income cutoff for minimally adequate needs. The food plan adopted in the 1960s was the least costly of four nutritionally adequate diets specified by the U.S. Department of Agriculture known as the ‘economy’ food plan. The poverty line was first implemented in 1967, and in each year since it has been updated by changes in the consumer price index. This means for purposes of poverty measurement we have allowed no adjustment for changes in the standard of living, including the fact that the average family of three spends closer to one-seventh of their budget on food today. In 2014 the poverty line for a single individual is $11,670 and for a family of four it is $23,850.

Figure 1 depicts trends in the national poverty rate, as well as the numbers of persons in poverty, from 1959 through 2011. As seen in the figure, the overall poverty rate was about 22 percent in 1959, and the number of Americans living in poverty was about 40 million. Within a decade, poverty fell by half. Since 1970, however, while moving up and down with the business cycle, both the poverty rate, and especially the number of poor, have trended upward such that in 2011, 15 percent of the population was poor, or over 45 million people. Research suggests that this post-1970 experience is due to a host of factors, the most prominent of which include the slowdown of economic growth, rising inequality (including declining inflation-adjusted wages among less-skilled workers), and the rise in female-headed families.

Geography of Poverty

Figure 2-4 ZiliackWhat is missing from Figure 1 is the vast differences in poverty rates across the country. For example, while the overall poverty rate in 1959 was 22 percent, Figure 2, which depicts poverty rates at the county level from the 1960 Decennial Census, shows that in much of the rural South and Native American territories poverty rates exceeded 50 percent. It was this level of deep poverty that then-Senator John F. Kennedy witnessed during a campaign stop in West Virginia in his 1960 bid for the presidency, and subsequently shaped his domestic agenda and that of President Johnson.

Overall, rural America shared in the prosperity of the ensuing decades, such that by the end of the economic boom of the 1990s, the excessive high rates of poverty were mostly absent, as depicted in Figure 3. But upon closer examination what one sees is the emergence of pockets of persistently high poverty. Specifically, following the USDA definition, a persistently poor county is one with a poverty rate above 20 percent across Decennial Censuses. In Figure 4 this is represented across each Census year from 1960 to 2000. The figure shows that these persistently poor counties, which represent about 11 percent of all counties, are generally clustered in five regions: central Appalachia, the “Black Belt” region from the Carolinas to Alabama, the Mississippi Delta, the Texas “colonias,” and counties with Native American reservations in the western U.S. These five regions vary greatly in terms of race, ethnicity, geography, culture, and primary economic specialization. What they have in common, and what distinguishes them even from other rural counties, is low levels of formal education attainment, low labor force participation rates, low capital expenditures, and greater distance from urban economic hubs, which when combined, help explain the high rates of poverty persistence. An obvious question to ask is, which factor matters most?

Long Reach of Human Capital

Historical sociologists have theorized that patterns of land tenure in Appalachia and the Mississippi delta, where ownership was highly concentrated, led to the development of institutions that contribute to those regions’ low incomes today. Macroeconomists have also pointed to the role of climate and geography; namely, temperate climates have more predictable rainfall, better soil quality, and lower disease prevalence than tropical areas. Again in the U.S. context, this may place the coastal regions at an advantage relative to the South and Appalachia.

In a recent study at the Center for Poverty Research at the University of Kentucky, we run a “horse race” of sorts to understand whether the persistently poor counties are where they are economically because of lower levels of human and physical capital, less efficient use of their human and physical resources, or from historical contributions of institutions, culture, and geography. Our research points to the key role that education plays both contemporaneously and historically in the development of these poor counties—shortfalls in human capital account for about 60 percent of the income gap between persistently poor and non-poor counties. While persistently poor counties historically were also warmer, had lower stocks of physical capital, fewer foreign-born residents, and were less urban, what really stands out is that persistently poor counties today had, on average, illiteracy rates 25 percentage points higher than did non-poor counties a century ago. In recent decades, gains have been made in closing the gap in high school graduation rates, but while that gap narrowed, the gap in college completion rates widened just as college was becoming more important for the economic success of families and communities. In other words, human capital has a long reach.

Policy Considerations

The most important factor contributing to persistent poverty in rural America today is low levels of human capital. While daunting, this is not an insurmountable barrier from a policy perspective. Substantial investment in education from prekindergarten through higher education, coupled with incentives to retain the recipients of the investments, are needed for poor rural regions to have a chance of catching up to the rest of the nation. These investments in education, coupled with economic development programs that aim to diversify the economic base around nearby urban centers, may offer a path out of persistent poverty.

Whether this investment should come from the state and local level, or the federal level, or both, is the subject of much debate. Most agree that state and local governments should invest in their local communities across a host of dimensions from education to health to business incentives, but if and how the federal government gets involved is another matter. If people are mobile across communities, and state lines, in response to additional opportunities offered by education, then there are clear grounds for federal investment in schooling from pre-K and beyond. However, investing in schooling is a long-term proposition and cannot be accomplished in isolation of present-day economic development needs—place-based policies such as infrastructure projects, business subsidies, and even public-works jobs akin to the Works Progress Administration after the Great Depression.

Proponents of place-based policy typically make an appeal on redistributive grounds, i.e. persistently poor regions are trapped and there is a national interest in ameliorating those deficits through direct investment. The case against such place-based intervention follows from the belief that helping poor places is not the same thing as helping poor people—business subsidies may just induce new firms to bring new migrants to the area and not hire locals. This drives up local prices harming the poor who tend to be renters. However, federal involvement cannot be ruled out in the persistently poor regions of the country if the primary consideration is to ameliorate historical deficits in human capital and overall well being of the regions.
There is some precedent for effective federal investment. In an evaluation of the introduction of the Appalachian Regional Development Act in 1965, research showed that the ARDA reduced Appalachian poverty between 1960 and 2000 by 7.6 percentage points relative to the rest of the U.S., and 4 percentage points relative to border counties. These anti-poverty gains were most pronounced in the Central Appalachian region. Most of the benefits were realized in the first five years of the law when the investment was largest. This suggests that federal involvement will be most effective if it well targeted and sustained.

James P. Ziliak Founding Director of the Center for Poverty Research at the University of Kentucky where he holds the Carol Martin Gatton Endowed Chair in Microeconomics in the Department of Economics. Dr. Ziliak’s research interests are in the areas of labor and public economics, with a special emphasis on U.S. tax and transfer programs, poverty measurement and policy, and inequality.

Islam, T., J. Minier, and J. Ziliak. Forthcoming. “On Persistent Poverty in a Rich Nation.”
Southern Economic Journal.

Revisiting Poverty in Rural America

Where are we 50 years after the war on poverty began?

In the 2014 special edition of Rural Voices magazine, HAC revisits the issue of rural poverty with frank questions, informed viewpoints, and honest assessments. Experts and contributors from across the nation help provide a better understanding of this complex issue and its intersection with housing in rural communities.

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Where are we 50 years after the war on poverty began?

In the 2014 special edition of Rural Voices magazine, HAC revisits the issue of rural poverty with frank questions, informed viewpoints, and honest assessments. Experts and contributors from across the nation help provide a better understanding of this complex issue and its intersection with housing in rural communities.

FEATURES

Rural Poverty, Before & After the War
by James P. Ziliak, Center for Poverty Research and Department of Economics, University of Kentucky

The 50th anniversary of the War on Poverty has generated scores of articles, books, and radio and television reports. Lost in much of this coverage is the acute hardship facing rural America at the dawn of the 1960s, and the role this played in shaping the nation’s response to poverty.

A Frank Discussion on Persistent Poverty in Rural America

Forgotten or hidden from mainstream America, several rural areas and populations are isolated geographically, lack resources and economic opportunities, and have suffered through decades of disinvestment and double-digit poverty rates. Persistent poverty is most evident within several rural regions and populations, including the Lower Mississippi Delta, the rural Southeast, Central Appalachia, Native American lands, the colonias along the U.S. Mexico border, and migrant and seasonal farmworkers.

Among the most economically depressed areas in the country, addressing social, economic, and housing problems has proved challenging. To help better understand this issue, Rural Voices spoke with five housing experts, each with decades of experice providing housing and working with low-income familes in persistent poverty areas. Their firsthand knowledge presents an unparalleled view into the harsh reality of families and communities grappling with long-term poverty. These experts offer their insights, passion, and commitment to help solve what is often considered an intractable problem.

  • Bill Bynum is the CEO of Hope Enterprise Corporation/Hope Credit Union (HOPE). Bill has worked with HOPE for over 20 years providing banking opportunities to low-income individuals and families in the Mid South.
  • Tom Carew is the Executive Vice President of Membership and Advocacy at the Federation of Appalachian Housing Enterprises (FAHE). Tom has more than 34 years of experience providing affordable housing in Central Appalachia.
  • Ann Cass is the Executive Director of Proyecto Azetca and has over three decades of experience working in the Texas border colonias.
  • Emma “Pinky” Clifford is the Executive Director for the Oglala Sioux Tribe Partnership for Housing (OSTPH). As a tribal member of the Oglala Sioux, Pinky has worked to improve access to safe, affordable housing with OSTPH for the past two decades.
  • Selvin McGahee is the Executive Director of Florida Non-Profit Housing, Inc. and has spent his career working to provide affordable housing in the rural Southeast and farmworker housing.

Decline in Senior Poverty: A Success Story…
by the Housing Assistance Council

One of the biggest successes in reducing poverty has been among older Americans.

…With a Cautionary Outlook
by Kim Datwyler, Executive Director, Neighborhood Nonprofit Housing Corporation (NNHC)

Staying Housed on a Fixed Income: The Importance of Available Affordable Housing for Seniors

From a Spare Bedroom to a Home of Her Own
by Stacey Howard, Dream$avers IDA Program Director, NeighborWorks Umpqua

A Single Mother’s Struggle Out of Poverty to Provide a Better Life for Her Son

Innovative Approaches to Reducing Poverty Locally

The problem of poverty is often viewed from a national or regional perspective. But success in moving people out of poverty can emanate from community-specific innovation and solutions.

  • Job Skills through Housing Development – Motivation, Education, Training, Inc. (Texas)
  • Combating Poverty in Puerto Rico with Job Training & Economic Development – Pathstone (Puerto Rico)
  • IDAs Help Low-Income Families Save for Increased Opportunities in Rural Oregon – NeighborWorks Umpqua (Oregon)

A VIEW FROM WASHINGTON

“The People Left Behind” Are Today the People Still Behind
by Joe Belden and Lance George

Additional Content

rv-se-infographic-piraPoverty in Rural America

Approximately 45 million Americans, or 15 percent of the population, had incomes below the official poverty rate in 2012. In rural America, the poverty rate is above 17 percent with more than 10 million people living in poverty.

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.

Housing an Aging Rural America: Rural Seniors and Their Homes

Download the Report

Ensuring seniors have access to safe, secure affordable housing in a rapidly aging rural America

The United States is on the cusp of an extensive and far-reaching demographic transformation as the senior population is expected to more than double in the next 40 years. Rural America is “older” than the nation as a whole and more than one-quarter of all seniors live in rural and small town areas, and a rapidly aging population will significantly impact nearly all aspects of the nation’s social, economic, and housing systems. Most seniors wish to remain and age in their homes as long as possible, but rural elders are increasingly experiencing challenges with housing affordability and quality. These challenges point to an underlying gap in housing options and availabilities. With the scope and magnitude of the looming demographic shift of seniors, rural communities will need to develop a range of housing options available to seniors such as more rental housing, rehabilitation and repair programs, housing with services, and assisted living. These options not only enhance the lives of seniors but are fiscally prudent measures that are more cost effective than long-term care options.

Download the report.

USDA Rural Development Obligations FY 15 – October

Download complete report (Through october FY 2015)

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The Housing Assistance Council (HAC) presents this month’s report on Fiscal Year 2015 USDA Rural Housing program obligations.

USDA is operating under a Continuing Resolution (CR) which provides funding through December 11, 2014 based on funding levels in the Consolidated Appropriations Act, 2014. Congress will need to pass a final appropriations bill or another CR to keep the government operating after December 11.

As of the end of October, USDA obligated 13,763 loans, loan guarantees, and grants totaling about $1.85 billion. This is more than twice as many obligations as this time last year when there were 6,394 loans, loan guarantees, and grants obligated totaling about $849 million.

Single Family Housing Program Highlights

The Section 502 Guaranteed loan program, the largest of the Single Family Housing programs, obligated $1.8 billion (13,339) in loan guarantees. Obligations for October FY 2014 were about $845 million (6,338) less than half of the obligations so far this year.

For the Section 502 Direct program, there have been over $8.6 million (83 loans) in loan obligations so far in FY 2015; this is about $4 million (42 loans) more than last year. Very low-income (VLI) loan obligations as a percentage of the total was 31.4 percent.

The Section 504 Repair and Rehabilitation programs obligated 103 loans representing $608,952 and 238 grants representing $1,439,243. Significantly more than last October when 15 loans ($80,658) and no grants were obligated.

There were no other obligations for Single Family Housing programs in October.

Multi-Family Housing Programs

The only MFH obligations so far were in the Section 521 Rental Assistance program.

Rental assistance obligations were slightly lower than in October FY 2014. There were about 46 thousand RA units funded at over about $207 million. This compares to about 49 thousand units at $211 million last year.

Download the combined document.

Individual Program Files

Summary Files

Summary of Rural Development Obligations
USDA Rural Development Eligible Areas

Single Family Housing Program Obligations

Section 502 Direct Homeownership Total Obligations
Section 502 Direct Homeownership Low and Very Low Obligations
Section 502 Guaranteed Homeownership Obligations
Section 504 Total Home Rehab Obligations
Section 523 Self-Help Technical Assistance Grant Obligations

Multi-Family Housing Program Obligations

Section 514/516 Farm Labor Housing Obligations
Section 515 Rental Housing Obligations
Section 521 Rental Assistance Obligations
Section 533 Housing Preservation Obligations
Section 538 Guaranteed Rental Obligations
Multifamily Housing Tenant Voucher Obligations
Multifamily Housing Revitalization Demonstration Program

Unallocated Program Obligations

Section 306 Water/Wastewater Grant Obligations
Section 509 Compensation for Construction Defects
Multifamily and Single-family Housing Credit Sales

* The Rural Housing Service (RHS) monthly obligation reports are produced by the Housing Assistance Council (HAC) 1025 Vermont Ave., NW, Suite 606, Washington, DC 20005. The monthly figures derive from HAC tabulations of USDA –RHS 205c, d, and f report data. For questions or comments about the obligation reports, please contact Michael Feinberg at 202-842-8600 or michael@ruralhome.org.

HAC News: November 12, 2014

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November 12, 2014
Vol. 43, No. 23

• November is National Native American Heritage Month • Congress returns for lame duck sessionCongress returns for lame duck session • Judge strikes down HUD’s disparate impact rule • CFPB amends qualified mortgage regulation, HUD accepts some changes • Regulatory agencies propose flood insurance updates • Input requested for HUD Code changes • Farmworker incomes unchanged, averaging under $20,000 • HUD releases annual fair housing report • HUD reports reductions in homelessness • GAO recommends changes in program offering surplus federal property for homeless • HAC News takes a break • THERE’S STILL TIME TO REGISTER FOR THE CONFERENCE!

November 12, 2014
Vol. 43, No. 23

NOVEMBER IS NATIONAL NATIVE AMERICAN HERITAGE MONTH. President Obama’s proclamation also designates November 28 as Native American Heritage Day.

CONGRESS RETURNS FOR LAME DUCK SESSION. Both the House and Senate reconvene November 12 for a post-election session. A final FY15 spending package is on the agenda, with the current stopgap continuing resolution set to expire on December 11. Most observers are predicting a full-year continuing resolution or omnibus appropriations bill through September 30, 2015. Passage may be complicated, however, by the Obama administration’s request for $6.2 billion in emergency funds to fight Ebola. As reported in a HAC post on the Rooflines blog, some important committee positions will change in the new Congress, which takes office in January. HAC will post updates as available.

JUDGE STRIKES DOWN HUD’S DISPARATE IMPACT RULE. On November 3 a federal district court judge, ruling that HUD could not extend the Fair Housing Act’s ban on disparate treatment to include disparate impact, vacated HUD’s 2013 regulation on the subject (see HAC News, 2/20/13). During its current term the Supreme Court is expected to consider a different disparate impact case.

CFPB AMENDS QUALIFIED MORTGAGE REGULATION, HUD ACCEPTS SOME CHANGES. A final Consumer Financial Protection Bureau rule adopts an April proposal (see HAC News, 5/14/14), exempting some nonprofits and loans by nonprofits from some requirements and providing a way to cure some points and fees that exceed the qualified mortgage limits. Contact CFPB’s Office of Regulations, 202-435-7700. CFPB’s nonprofit exemptions will apply also to HUD’s qualified mortgage rule, but HUD is not adopting CFPB’s new points and fees cure provision, instead providing guidance to mortgagees. Contact Michael P. Nixon, HUD, 202-402-5216, ext. 3094.

REGULATORY AGENCIES PROPOSE FLOOD INSURANCE UPDATES. The federal agencies that oversee lenders, including credit unions, suggest changes to implement statutory requirements. Comments are due December 29. Contact Rhonda L. Daniels, Office of the Comptroller of the Currency, 202-649-5405.

INPUT REQUESTED FOR HUD CODE CHANGES. Proposed revisions to HUD’s Manufactured Home Construction and Safety Standards are due December 31 and will be reviewed by the Manufactured Housing Consensus Committee as it develops recommendations to HUD. Contact Pamela Beck Danner, HUD, 202-708-6423.

FARMWORKER INCOMES UNCHANGED, AVERAGING UNDER $20,000. A new memo from Farmworker Justice examines data from the Department of Labor’s 2011-12 National Agricultural Workers Survey. One-quarter of farmworker families live in poverty but, since the survey does not include dependents outside the U.S., Farmworker Justice believes the figure should be higher. Survey responses indicated 48% of workers lack work authorization, but that figure is probably understated as well. In 2011-12, only 17% of crop workers were migrants, compared to 27% in 2007-09 and 42% in 2001-02.

HUD RELEASES ANNUAL FAIR HOUSING REPORT. Covering fiscal years 2012 and 2013, the report provides national and state level data on complaints filed and their disposition, as well as complaints initiated by HUD. Discrimination against persons with disabilities remains the largest category of complaints received.

HUD REPORTS REDUCTIONS IN HOMELESSNESS. HUD’s 2014 Annual Homeless Assessment Report to Congresssays homelessness has dropped by 10% since 2010, and the number of people living on the street has declined 25%. Veteran homelessness has fallen 10.5% since 2013 and 33% since 2010. Data are available for each state and each Continuum of Care, some of which did experience increases from 2013 to 2014.

GAO RECOMMENDS CHANGES IN PROGRAM OFFERING SURPLUS FEDERAL PROPERTY FOR HOMELESS. Federal Real Property: More Useful Information to Providers Could Improve the Homeless Assistance Program (GAO-14-739) addresses HUD’s program that makes unused federal real property available to homeless assistance providers. Contact David J.Wise, GAO, 202-512-2834.

HAC NEWS TAKES A BREAK. The next issue of the HAC News is scheduled for the week of December 8, after the Thanksgiving holiday and the HAC Rural Housing Conference 2014. Check HAC’s website for news in the meantime.

THERE’S STILL TIME TO REGISTER FOR THE CONFERENCE! Register online for the HAC Rural Housing Conference 2014: Retool, Rebuild, Renew, in Washington, DC, December 3-5 with pre-conference activities December 2. Contact HAC staff, registration@ruralhome.org.

Rural Veterans Resource Guide

The report contains program sheets that describe various programs and initiatives available for veterans as well as eligibility requirements and additional resources for each program. Keywords are provided to better help orient the guide. Each keyword can be found at the back of the report with a list of corresponding programs and their page numbers within the guide. HAC’s Veteran Resource Guide aims to provide insights into how to better utilize available resources. Knowing where to refer veterans to for needed services is critical in ensuring that veterans receive the services that will enable them to remain in safe, secure housing.

INTRODUCTION
ELIGIBILITY FOR VA PROGRAMS
DEFINITIONS
GLOSSARY OF ABBREVIATIONS
REPORT SECTIONS

HOUSING

HEALTH

COMMUNITY PROGRAMS

OTHER PROGRAMS

HAC News: October 29, 2014

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October 29, 2014
Vol. 43, No. 21

• Rent aid kept over 3 million people out of poverty in 2013 • Regulatory agencies align QRM with QM, drop requirement for large downpayments • HUD posts general section of FY15 NOFAs • Electronic signatures now accepted for Section 502 guaranteed loans • CFPB lists rural and underserved counties for 2015 • Public housing demolition and disposition proposal corrected • HUD provides guide to establishing smoke-free properties • GAO offers framework for assessing housing finance reform • Guide helps nonprofits to preserve Low Income Housing Tax Credit properties • 2013 American Housing Survey data released • Household participation in banking system increased, 2011 to 2013 • Have you investigated HAC’s Rural Data Portal? • HAC News e-mail subscribers get news faster

October 29, 2014
Vol. 43, No. 22

RENT AID KEPT OVER 3 MILLION PEOPLE OUT OF POVERTY IN 2013. The Supplemental Poverty Measure: 2013, published by the Census Bureau, presents data with adjustments that are not taken into account in the official poverty measure (see HAC News, 9/17/14), including the impact of government programs assisting low-income people. A Center on Budget and Policy Priorities analysis of the data shows that rental assistance alone kept 3 million people out of poverty, and all assistance programs lifted 39 million people above the poverty line.

REGULATORY AGENCIES ALIGN QRM WITH QM, DROP REQUIREMENT FOR LARGE DOWNPAYMENTS. As proposed in September 2013 (see HAC News, 9/25/13), final credit risk retention regulations define “qualified residential mortgages” the same way as the Consumer Financial Protection Bureau defines “qualified mortgages.” Private mortgage lenders are expected to focus on QRM lending when the rule takes effect in October 2015, so a 2011 proposal that included a 20% downpayment in the QRM definition would have made it more difficult for low-income, minority, and first-time homebuyers to obtain mortgages. USDA Section 502 mortgages are all considered QRMs until USDA issues its own regulations on the subject. Contact Ronald P. Sugarman, FHFA, 202-649-3208 or Mike Feinberg, HAC, 202-842-8600.

HUD POSTS GENERAL SECTION OF FY15 NOFAS. As in the past, the general section will apply to all of HUD’s funding announcements for individual programs when they are issued. Contact HUD’s Office of Strategic Planning and Management, 202-708-0667.

ELECTRONIC SIGNATURES NOW ACCEPTED FOR SECTION 502 GUARANTEED LOANS. Administrative Notice 4776 (September 23, 2014) “clarifies that lenders may use electronic signatures as long as the lender perfects and maintains a first lien position, an enforceable promissory note, and meets all other agency requirements.” Contact USDA RD’s Single Family Housing Guaranteed Loan Division, 202-720-1452.

CFPB LISTS RURAL AND UNDERSERVED COUNTIES FOR 2015. The designations apply to several Consumer Financial Protection Bureau regulations.

PUBLIC HOUSING DEMOLITION AND DISPOSITION PROPOSAL CORRECTED. The proposed rule (see HAC News, 10/17/14) included an erroneous definition. Comments are still due December 15.

HUD PROVIDES GUIDE TO ESTABLISHING SMOKE-FREE PROPERTIES. Change is in the Air: An Action Guide for Establishing Smoke-Free Public Housing and Multifamily Properties provides reasons, best practices, and step by step guidance.

GAO OFFERS FRAMEWORK FOR ASSESSING HOUSING FINANCE REFORM. Housing Finance System: A Framework for Assessing Potential Changes (GAO-15-131) describes and analyzes market developments since 2000 that have led to changes in the federal government’s role in the single-family housing finance system, and proposes a way to assess potential changes to the system. Contact Matt Scirè, GAO, 202-512-8678.

GUIDE HELPS NONPROFITS TO PRESERVE LOW INCOME HOUSING TAX CREDIT PROPERTIES. Beyond Year 15: Preserving Housing Credit Projects & Portfolio, published by Enterprise Community Partners, includes organizational procedures for preparing for Year 15 events as well as strategies for repositioning communities for the long term. It covers all types of LIHTC projects but focuses on issues around the most challenging projects and approaches to address those challenges.

2013 AMERICAN HOUSING SURVEY DATA RELEASED. HUD’s press release highlights the findings from questions on new subjects including neighborhood involvement, disaster planning, and use of public transportation. AHS data also include housing conditions, ownership rates, costs, and more. Nationwide, from 2011 to 2013, costs for renters rose slightly, while owners’ costs fell. Summary tables are posted in Excel format.

HOUSEHOLD PARTICIPATION IN BANKING SYSTEM INCREASED, 2011 TO 2013. A report on the 2013 FDIC National Survey of Unbanked and Underbanked Households credits changes in economic conditions and household demographics for the decline in “unbanked” households. In both 2011 and 2013, FDIC’s survey found the highest unbanked rates among non-Asian minorities and households who were lower-income, younger, or unemployed, though the unbanked rate for Hispanics dropped from 2011 to 2013. The report includes data at the national, state, and metro levels.

HAVE YOU INVESTIGATED HAC’S RURAL DATA PORTAL? The Rural Data Portal is an easy-to-use, on-line resource that provides essential information on the social, economic, and housing characteristics of communities in the United States. It is targeted toward rural communities, but a wide range of information is presented for the nation, states, and counties for rural, suburban, and urban areas.

HAC NEWS E-MAIL SUBSCRIBERS GET NEWS FASTER. Subscribe to the HAC News by e-mail and receive it sooner, plus updates when important news occurs between issues.

HAC News: October 17, 2014

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October 17, 2014
Vol. 43, No. 21

• USDA unable to spend all single-family appropriations in FY14 • HUD has Jobs Plus funds available • Rule changes suggested for Section 202 and 811 programs • 2015 DDAs and QCTs announced • Final Fair Market Rents set • HUD publishes new OCAFs • Most children in HUD-assisted renter households still live in high-poverty neighborhoods • Rural Voices wonders “What does affordable housing mean to you?” •HAC analysis of mortgage data now available • Farmworker housing and health conference set for November • Webinar to cover protecting seniors and other RD tenants from displacement • REGISTER FOR CONFERENCE BEFORE OCTOBER 31!

October 17, 2014
Vol. 43, No. 21

USDA UNABLE TO SPEND ALL SINGLE-FAMILY APPROPRIATIONS IN FY14. HAC’s analysis of USDA RD data for FY14 determined that 90% of Section 502 direct loan funds were obligated. (See HAC News, 9/17/14.) Very low-income borrowers received 33.2% of the obligations, consistent with past RD difficulties in meeting the requirement to loan 40% of its Section 502 direct dollars to VLI households, and all the unobligated FY14 funds were in the VLI setaside. A 2010 HAC report examined possible reasons and solutions to achieve the 40% requirement. Other FY14 obligation levels include 80% for Section 502 guaranteed loans, 53% and 98% for Section 504 loans and grants, and 73% for Section 523 self-help grants. Well over 100% of the amounts appropriated for Section 514/516 farmworker housing and Section 533 Housing Preservation Grants were obligated, along with 96% of Section 515 loans and 112% of Section 542 vouchers. A percentage could not be calculated for the MPR rental preservation program. HAC’s early analysis is posted now and a more detailed report will be published also. Contact Michael Feinberg, HAC, 202-842-8600.

HUD HAS JOBS PLUS FUNDS AVAILABLE. Public housing agencies can apply by December 17 for grants to provide job support to public housing residents. Contact Anice Chenault, HUD, JobsPlus@hud.gov.

RULE CHANGES SUGGESTED FOR SECTION 202 AND 811 PROGRAMS. HUD’s proposal would implement statutory amendments made in 2011 to both programs, and would “streamline” the programs. Comments are due December 8. Contact Alicia Anderson, HUD, 202-708-3000.

HUD PROPOSES REGULATIONS ON DEMOLITION AND DISPOSITION OF PUBLIC HOUSING. Comments are due December 15 on updates that would increase HUD’s oversight of demolition and disposition of public housing and make other changes. Contact Kathleen Szybist, HUD, 401-277-8310.

2015 DDAS AND QCTS ANNOUNCED. For the Low-Income Housing Tax Credit program, HUD designates Difficult Development Areas every year, and this year is also making new designations of Qualified Census Tracts to incorporate recent income and poverty measures. Contact Michael K. Hollar, HUD, 202-402-5878.

FINAL FAIR MARKET RENTS SET. FMRs for FY15 are used for HUD’s voucher and moderate rehabilitation programs, and to calculate Flat Rents for public housing. Contact local HUD program staff.

HUD PUBLISHES NEW OCAFS. These operating cost adjustment factors will be used to adjust Section 8 rents in some HUD-assisted properties, effective February 11, 2015. Contact Stan Houle, HUD, 202-402-2572.

MOST CHILDREN IN HUD-ASSISTED RENTER HOUSEHOLDS STILL LIVE IN HIGH-POVERTY NEIGHBORHOODS. The Center on Budget and Policy Priorities reports that only 15% of children with HUD rental assistance live in low-poverty neighborhoods, while 18% are in extreme-poverty neighborhoods. Families with vouchers are more likely to escape concentrations of poverty than those in public housing or receiving Section 8 project-based aid, but a quarter of a million children in the Housing Choice Voucher program do live in extreme-poverty neighborhoods. “Creating Opportunity for Children: How Housing Location Can Make a Difference” states that this problem exists in nearly every state and in rural as well as urban areas, though it is most prevalent east of the Mississippi and in California.

RURAL VOICES WONDERS “WHAT DOES AFFORDABLE HOUSING MEAN TO YOU?” The fall issue of HAC’s magazine presents the perspectives of rural families, the challenges they faced when living in unaffordable or substandard conditions, and how they used federal resources to obtain quality housing. Sign up online for email notices when new issues are published, or request one free print subscription per organization from Dan Stern, HAC, 202-842-8600.

HAC ANALYSIS OF MORTGAGE DATA NOW AVAILABLE. “Rural Mortgage Activity Declines,” a Rural Research Note, is now available on HAC’s site and is also covered in a story on the Daily Yonder. (See HAC News, 10/1/14.)

FARMWORKER HOUSING AND HEALTH CONFERENCE SET FOR NOVEMBER. “Farmworker Housing Quality and Health: A Transdisciplinary Conference” will be held November 11 in Arlington, VA. Registration is $70.

WEBINAR TO COVER PROTECTING SENIORS AND OTHER RD TENANTS FROM DISPLACEMENT. The National Housing Law Project will offer a free webinar on October 21 at 2:00 pm Eastern time/11:00 am Pacific on “Prepayments, Maturing Mortgages, and Foreclosures: Protecting Seniors and Others from Rural Development Rental Housing Displacement.

REGISTER FOR CONFERENCE BEFORE OCTOBER 31! Register online for the National Rural Housing Conference 2014: Re-tool, Rebuild, Renew, in Washington, DC, December 3-5 with pre-conference activities December 2. Until October 31, the rate is $350 for nonprofits and government, $400 for for-profits. Contact HAC staff, registration@ruralhome.org.

“We wouldn't want to live any place else”

by Sam and Carol Davis

We bought the house in 1970 and have lived here since then. We were both born in West Virginia and loved it here. This is where our roots are. We moved out of state a couple of times in the early years of our marriage, mainly because of the job situation in West Virginia, but when the opportunity arose, we moved back. It’s been a struggle at times, but we wouldn’t want to live any place else.

Sam and Carol Davis

We heard about a repair program through a family member. Although we had tried to keep our home in good condition, always doing the work ourselves, there were some things that we couldn’t afford to do. We had a wood stove and had always cut all of our wood for the winter. As we aged, it was getting harder and harder to do. Our house is probably over 100 years old. The house has a very strong and sturdy foundation, but very little insulation and no storm windows.

We filed an application with the Southern Appalachian Labor School and found that we were eligible for help through the senior weatherization program and also home improvement. We were hoping to qualify for central heating and possibly vinyl siding (we had wood siding and had been painting it by hand when needed).We not only got a new heating system and siding, we also got new windows and insulation. We also put in a wonderful sidewalk at the back of the house that is the whole length of the house. We love it very much!

I feel we have made lifetime friends through the program. We have corresponded with some of the ones from other states.

We thoroughly enjoyed all of the worker’s hard work and appreciated the workers that made our home more comfortable and easier to maintain. We are enjoying not having to cut wood all summer to be able to keep warm in the winter. Our home is affordable thanks to the insulation and new windows. It is much more energy efficient and convenient.

With the wonderful sidewalk, we can bring our groceries in the back door and not have to carry them up 31 steps at the front of our house.

I feel we have made lifetime friends through the program. We have corresponded with some of the ones from other states.

sam-assisting-with-work

I love to cook and I was able to make lunch for the workers and enjoyed baking and cooking for them. They were so appreciative, respectful and kind. We even had a little birthday party for one of them who came from out of state and couldn’t be with his family for his birthday.

All of this enriched our lives and I hope we made a lasting impression on some of them.

I especially want to thank Vickie Smith and Barbara Painter for being instrumental in the process.

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.

 

A Farmer's Fight

by Yuqi Wang, Bill Emerson National Hunger Fellow

Rural Voices - Fall 2014This story appears in the Fall 2014 issue of Rural VoicesMr. Lee was a poultry farmer in the small town of Vinita, Oklahoma, just an hour northeast of Tulsa. He lost his home and farm to a bank before he had a chance to save them. “It’s too late for you to do anything about it”, the bank said to Mr. Lee as he scrambled to pay the overdue mortgages that he wasn’t even aware he had. Within months his farm and home were closed and sold.

Originally from Laos, Mr. Lee came to the United States in 1987 as a refugee of the Vietnam War. Mr. Lee’s family was one of many Hmong families that migrated to the Ozarks. After visiting his cousin’s poultry farm, Mr. Lee decided to purchase one as well. He took a $290,000 loan from a local bank for his farm and house.

Midwest Winter Vegetable Production Project - MUExtension417Some Hmong farmers have recently experienced financial problems from faulty loans.
Photo: Creative Commons, https://flic.kr/p/gWMvVy

With this type of loan, if a borrower falls short on their mortgage payments, everything on the land can be taken by the bank, including the house. This was exactly what happened to Mr. Lee. When Mr. Lee asked for help, the bank told him “It’s too late.” Later, the court informed him that he had lost his case because the attorney a local nonprofit had secured for him failed to appear in court. After many years spent farming, Mr. Lee is currently working as a night janitor at a high school and is renting an apartment. A different local nonprofit, Hmong National Development, is working with Mr. Lee to explore his options for redress.

We are trying to create stronger linkages between farmers and housing advocates to encourage [farmers] to take advantage of those resources and information whenever they can.

“[Bank] servicing issues are a big problem for the Hmong community, and for newer immigrants,” says Bao Vang, President and CEO of the nonprofit Hmong National Development. “The bank was very unresponsive when Mr. Lee tried to contact them even before problems started and did not help him in a timely manner. This is in part due to a lack of language access where the banks very rarely provide resources and services in the language of their users.”

The Hmong National Development is creating partnerships with organizations in Arkansas, Missouri, and Oklahoma to expand services for immigrants. “We are trying to create stronger linkages between farmers and housing advocates, and we would love to be able to pass on any information to the farmers and to encourage them to take advantage of those resources and information whenever they can” says Bao.

Hmong National Development, Inc. (HND): A national, not-for-profit organization. HND is the leading nonprofit capacity building and policy advocacy organization for the Hmong American community.

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