HAC President & CEO, David Lipsetz, testifies in front of the Senate Committee on Banking, Housing, and Urban Affairs Subcommittee on Housing, Transportation, and Community Development

HAC’s CEO Testifies to Senate Banking Subcommittee on Rural Housing Reforms

HAC was honored to be invited to testify on May 2, 2023 before the Housing, Transportation, and Community Development Subcommittee of the U.S. Senate Committee on Banking, Housing, and Urban Affairs to discuss commonsense, bipartisan reforms to the U.S. Department of Agriculture’s Rural Housing Service (RHS) programs. HAC’s President & CEO, David Lipsetz, was one of five witnesses on the hearing panel.

The hearing was held to discuss the bipartisan Rural Housing Service Reform Act of 2023, which has been introduced by Subcommittee Chairwoman Tina Smith (D-MN) and Senator Mike Rounds (R-SD). The RHS Reform Act includes a slate of provisions to improve the multifamily, single-family, and capacity building programs at RHS. Senators Smith and Rounds engaged deeply with stakeholders on the creation of the bill, including offering a call for policy recommendations in the summer of 2022. HAC’s response to that comment opportunity can be seen here. We were thrilled to see many of our recommendations included in the bill, and applaud Senators Smith and Rounds on their thoughtful engagement with stakeholders and their commitment to improving the RHS programs.

Highlights from the RHS Reform Act include:

  • Multifamily

    • Authorizing the Multifamily Preservation and Revitalization (MPR) program and Multifamily Preservation Technical Assistance Program
    • Allowing for the decoupling of a Section 515 mortgage and Section 521 Rental Assistance
    • Allowing Section 542 rural vouchers to be adjusted based on changes in tenant income
    • Streamlining the process for Section 515 nonprofit transfers and increasing the Section 515 nonprofit set aside
  • Single Family

    • Establishing the Native CDFI Section 502 relending program
    • Increasing the threshold for the mortgage requirement on a Section 504 home rehab loan from $7,500 to $15,000
    • Extending the loan term for a Section 502 loan up to 40 years
  • Capacity Building

    • Authorizing the Rural Community Development Initiative (RCDI) and waiving the matching funds requirement for groups working in areas of persistent poverty
    • Requiring RHS to publish more data on their housing programs
    • Authorizing funding for much needed technology upgrades at RHS
HAC in the News

Advocates eye farm bill to avert drop in affordable rural housing – CQ Roll Call

Posted April 11, 2023 at 5:00am

Housing advocates are turning to this year’s farm bill in an effort to steer rural communities away from an affordable housing cliff ahead.

Without action from Congress, rural communities stand to lose more than 100,000 affordable rental units in the next decade as federally subsidized loans used to build the apartments are paid off, ending landlords’ obligations to keep rents low. In a second blow for those renters, they will lose their eligibility for the Agriculture Department’s rental assistance.

“It’s a big problem, and it’s going to only get worse,” said Sarah Saadian, senior vice president of public policy at the National Low Income Housing Coalition.

“The heyday or the peak of rural housing was in the ’70s and ’80s, when their rental housing program was nearly a billion-dollar program, and it’s been cut really dramatically over the last several decades,” Saadian said in an interview. “All of those properties that were built at that time are now reaching the end of the maturity on their 515 mortgage, or the 515 loans that USDA provides in order to get those properties built.”

Advocates are pushing Congress to include provisions in the farm bill that would decouple the two programs, allowing the Agriculture Department to provide rental assistance even after a building’s owner has paid off the subsidized mortgage.

“The biggest issue in rural housing is the rapid loss of the 515 units due to mortgage maturity, prepayments, foreclosures. That is the 800-pound gorilla, or really the $31 billion gorilla over the next 30 years to preserve.”

Tackling Rural America’s ‘Hidden’ Housing Crisis – The Daily Yonder

What does homelessness in rural America look like?

In Southwest Oregon it looks like a city of under 25,000 residents with nearly 150 people on a waitlist for temporary housing.

In Eastern Kentucky, it looks like a severe shortage of affordable housing made immeasurably worse by a natural disaster.

For many tens of thousands of individuals and families in rural America, it looks like another anxiety-ridden night.

Homelessness in rural communities is generally less conspicuous than major cities like Portland, Oregon, or Los Angeles. “In rural communities, homelessness does tend to be more hidden,” said Adrienne Bush, director of the Homeless & Housing Coalition of Kentucky. “It expresses itself through housing insecurity, folks doubled up with friends or family, people couch surfing because they don’t have a place of their own.”

Nationwide, homelessness rose less than a half percent from 2020 to 2022 but almost 6% in rural communities. The reasons are many and varied.

A primary factor is, of course, the cost of housing, said Lance George, director of research and information at the Housing Assistance Council in Washington, D.C. Wages are often stagnant, he said, and housing costs keep rising.

Compounding the problem is the fact that because large-scale development is rare in rural communities, construction costs are often higher and there’s therefore less incentive for private investment.

But some rural communities are rising to the challenge, recognizing that getting people into at least temporary housing is critical to the health and well-being of the entire community.

George said working with community-based organizations inspires him.

“They’re incredibly resourceful and ingenious and work on shoestring budgets and get amazing amounts of work done. They provide amazing services for their communities. And that inspires my hope.”

Two such examples are found in rural Oregon and Kentucky.

Taylor Sisk is a freelance reporter who had his work published in Kaiser Health News, National Geographic, and 100 Days in Appalachia, among others.

Jan Pytalski is the associate editor of The Daily Yonder.

This article first appeared on The Daily Yonder and is republished here under a Creative Commons license.

Policy News from Congress

HAC’s Research Director Testifies to Senate Banking Committee on the State of Housing 2023

HAC was deeply honored by an invitation to testify at the first hearing held in the new 118th Congress by the Senate Banking, Housing, and Urban Affairs Committee. Titled The State of Housing 2023, the session featured Lance George, HAC’s Director of Research and Information, as one of  three witnesses.

A wide range of topics was covered by the witnesses’ testimony and the Senators’ questions. Among the key areas of concern were the gap between housing supply and need, the high cost of both homeownership and rental housing, and what congressional actions could address these challenges. Committee Chair Sherrod Brown (D-Ohio) asked specifically about the loss of rentals financed by USDA’s Section 515 program, a serious concern addressed by HAC research in 2016 and 2022.

Key Takeaways

Lance’s statement made five key points about the state of rural housing in 2023:

  • The pandemic left its mark on rural America and housing markets remain uncertain.
  • Rural mortgage markets are being impacted by interest rates and prices too.
  • Affordability is the greatest housing challenge in rural America, by far.
  • Manufactured housing is an often overlooked but important source of housing – especially in rural America.
  • Race matters across the rural spectrum – especially in housing.

Key policy recommendations, based on HAC’s full set of policy priorities for 2023, included:

  • Increase rural communities’ access to credit and capital and strengthen USDA and HUD homeownership supports.
  • Improve opportunities and financing for preserving aging rental properties and protecting tenants.
  • Authorize the powerful Rural Community Development Initiative and a significant cross-sectoral, flexible capacity building rural investment initiative.

Lance George

Lance George

HAC’s Director of Research & Information

Watch the Hearing

The Daily Yonder Q&A: What Data Tells Us About Rural Housing Cost Burdens

This article first appeared on The Daily Yonder and is republished here under a Creative Commons license.

Editor’s Note: This interview first appeared in Path Finders, an email newsletter from the Daily Yonder. Each week, Path Finders features a Q&A with a rural thinker, creator, or doer. Like what you see here? You can join the mailing list at the bottom of this article and receive more conversations like this in your inbox each week.

Lance George is the Housing Assistance Council’s director of research and information, an arm of that nonprofit which seeks to generate and improve access to reliable data about rural housing trends nationwide. Since 2020, a lot of airtime has been given to the rise of remote work and the subsequent relocation of urban professionals to smaller communities, as well as the complicated ramifications of the overheated housing market. I wanted to speak with George to get a better sense of how housing chaos has played out in rural spaces, and whether (or how) the major issues in small towns have actually changed, or actually stand apart from trends across the population-density-spectrum.

Enjoy our conversation about rural America’s loss of federally assisted affordable housing, the intersection of its growing racial diversity with increasing rental cost burdens, and the still-unknown effects of Covid-related demographic churn, below.

Olivia Weeks, The Daily Yonder: What was the outlook on rural housing issues prior to the start of the pandemic? What were the trends demanding most of your organization’s attention?

Lance George: Rural America and its housing issues have always been a microcosm of the nation’s larger housing conditions and dynamics. While there are some very unique elements to rural markets, housing affordability was probably the largest housing concern prior to the pandemic. Sometimes there is a misperception that housing costs are not as problematic in rural areas because housing prices are nominally lower. But pre-pandemic, some of the largest growth in housing cost burdens were in rural areas.

A second major concern pre-pandemic – that was also closely tied to affordability problems – was (and continues to be) the loss of federally assisted affordable housing in rural communities. In many rural areas these properties are among the only affordable rental housing. But for various business and market related reasons these developments are leaving the affordable housing market. These homes also serve some of rural America’s most vulnerable residents. As an example,  approximately two thirds of residents of USDA’s affordable rental properties are elderly and their average incomes are just above $13,000. These are households who literally and figuratively cannot afford to be displaced. We also know this trend continued and accelerated through the pandemic as chronicled in HAC’s research and report – Rural America is Losing Affordable Rental Housing at an Alarming Rate.

DY: How’d your focus shift throughout the past two years? Did any issues become more dire or more obvious?

LG: I like to say that HAC “helps” build homes and communities in rural America with “help” being the most important word. The community-based nonprofit organizations, municipalities and tribal entities do the real and important work of providing housing in their rural communities and HAC is there to assist them. So our immediate and most important response was to try and assist our nonprofit partners throughout the early tumultuous and “unknown-unknown” days of the pandemic. We quickly shifted our technical assistance and training, financial products, policy response and research to help meet their needs in such unprecedented times. HAC provided resources to bolster business continuity and assist these valuable entities to continue providing housing resources in their communities. While the pandemic is still present, we devoted an edition of HAC’s Rural Voices magazine to chronicling how Covid-19 Left Its Mark on Rural America and some of our partners’ responses, actions and innovations during the pandemic.

DY: I think most Americans, at this point, are familiar with the discourse about affordable housing, and in particular our country’s lack of it. Most of the coverage I’ve seen about the difficulties involved in building new housing – and especially non-luxury housing, which offers more of a profit incentive for builders – is focused on cities like New York and San Francisco. But what’s the housing stock like in small towns these days?

LG: As I noted before, I think many of the housing dynamics in rural America are very similar to the nation as whole. But there are some differences, and two major exceptions are rental housing and manufactured housing.

There is just a dearth of good quality and affordable rental housing in many rural communities that exacerbates housing challenges for renters. Rural renters tend to have lower incomes, less savings, fewer housing protections, and were more likely to have their jobs impacted by the pandemic. And we can see this in the occurrence of housing affordability problems. In the housing world, we use the term “Housing Cost-Burden” which means that a household spends more than 30 percent of their monthly income towards housing. The rate of housing cost-burden for rural renters is double that of owners and a larger share of rural renters pay more than half of their income towards housing costs.

Manufactured homes are an often overlooked and maligned component of our nation’s housing stock, but these homes are an important source of housing for millions of Americans, especially those with low incomes and in rural areas. Although the physical quality of manufactured housing continues to progress, the basic delivery system of how these homes are sold, financed, and managed is still in need of improvement to ensure that they are a viable and quality source of affordable housing. And while cost and convenience have been a hallmark of manufactured housing’s popularity, this type of housing has not been immune to the dramatic price increases we have seen across the housing spectrum during the pandemic. As an example, according to data from HUD, the average purchase price of a new manufactured home prior to the pandemic was about $86,000. Today, the average purchase price of a new manufactured home is roughly $123,000.

Source: HAC Tabulations of the U.S. Census Bureau’s Manufactured Home Survey

Finally, I think it is important to mention the longer (and short) term trend of how race and ethnicity matters in rural housing markets. Rural America is – and has traditionally been – more racially and ethnically homogenous than the nation as a whole. There is a wide degree of variation in the geography of race in rural America, but there is also an unequivocal trend that most rural communities are becoming more racially diverse. The changing racial and ethnic landscape has wide-reaching implications across social, economic, and housing trends for rural communities.

Similar to national characteristics, nonwhite rural households have substantially lower homeownership rates than white non-Hispanic households. Approximately 77 percent of rural and small town white non-Hispanics own their homes while only 55 percent of nonwhite households own their homes. Black rural households (51 percent) and Native Hawaiian/Pacific Islanders (49 percent) are the least likely groups to own their homes. At the same time, rural nonwhite households are nearly 8 percent more likely to own their homes than non-whites in the nation as a whole. As such, geographic isolation and relative segregation continue to be important components of poverty and substandard housing in many rural communities. Addressing disparity in access to affordable and quality housing must specifically center systemically marginalized racial-ethnic populations.

DY: What’s your sense of how accurate the narratives about remote workers moving to rural places during the pandemic were? Do we have data yet about how widespread those trends are and where they’ve been concentrated?

The effects of the pandemic on the rural housing markets are — in some ways — yet to be seen. (Photo courtesy of Housing Development Alliance.)

LG: Candidly, it’s still murky. And some of this lack of clarity is that we just don’t have as robust market data for rural areas. But there is no doubt there was some ‘churn’ in the population during the pandemic. From HAC’s preliminary analysis of mortgage activity, rural areas did appear to have some of the largest gains in new home loans between 2020 and 2021.

However, there was variation in that activity. Rural communities with natural amenities, retirement destinations, or near major metropolitan areas had the highest activity, and much of this activity was concentrated with higher income borrowers and more expensive housing. These were trends that were already happening in mortgage markets, they just accelerated over the past couple of years.

I am convinced there will be longer-term implications from the pandemic that we are not realizing yet. For example, we are just now starting to see some housing impacts from the longer-term demographic trends that were precipitated by the 2008 housing crisis

So yes, the ‘jury is still out.’

DY: Obviously the economy and the costs of housing right now are major sources of stress for a lot of Americans, but are there any policy changes or economic trends giving you hope lately?

LG: Many Americans were buoyed by large scale federal unemployment benefits and economic stimulus. Some of that federal investment is still making its way into many rural communities, while other pandemic-related resources have ended. It is our hope that rural communities and rural households who need it most will get their share of these resources.

But most of my optimism comes from those community-based housing entities I mentioned earlier. These are some of the most dynamic, innovative, and resourceful entities you will find in this nation. And pandemic or not, they’ve always had their ‘heads into the wind.’ They, and the communities they serve, have always shown remarkable resilience and perseverance. These attributes – as well as recognition of the need for rural-focused strategies and policy solutions – will be needed in an equitable recovery.

This interview first appeared in Path Finders, a weekly email newsletter from the Daily Yonder. Each Monday, Path Finders features a Q&A with a rural thinker, creator, or doer. Join the mailing list today, to have these illuminating conversations delivered straight to your inbox.


HAC in the News

Congressional Hearing Focuses on the Potential of Manufactured Housing

HAC’s Director of Research, Lance George, was one of several witnesses to provide testimony at a hearing of the House Transportation-HUD Appropriations Subcommittee on  Manufactured Housing: Supporting America’s Largest Unsubsidized Affordable Housing Stock. North Carolina news station WRAL covered the hearing and provided local perspective on the potential for manufactured housing to increase housing affordability in the region.

HAC in the News

How HAC Fills the Data Gap in Rural America

Filling The Data Gap In Rural America on forbes.com highlights how HAC works to increase access to data about rural America to better address rural housing challenges and persistent poverty.

Over the years, there has been an increase in accurate data collection regarding rural America, and HAC has been at the forefront.

David Lipsetz Offers Perspective on Inflation and its Impact on Nonprofits

HAC President and CEO David Lipsetz was quoted in Inflation Hits Ability of Nonprofits to Provide Services, Keep Workers — and Raise Money, an article by Dan Parks at the Chronicle of Philanthropy. The piece examines how inflationary pressures are affecting nonprofits and their ability to operate.

“It’s stalled countless projects for us, right in the middle of a period of time when housing and shelter are the most important things needed to weather the storm of a pandemic,” says Lipsetz. “For us, a modest increase in costs can shut down a project in an area of the country where it’s needed the most.”

Read the full story.


The story also appeared in:

HAC in the News

HAC’s Lance George Discusses Housing Affordability and Tourism with NPR Washington

In an interview on the Soundside podcast, Lance George, HAC’s Director of Research and Information, speaks about the importance of affordable housing not only in high amenity rural communities, but in rural communities throughout the U.S. He stresses that housing affordability has been an ongoing problem that is only getting worse and argues that comprehensive community-based solutions are needed to address the issue.

“It’s a misperception that rural communities should be more affordable or shouldn’t have affordability challenges and pressures that you’re know seeing. In fact, housing affordability has always been the challenge in rural communities, as well as urban communities.”

HAC in the News

CIRD Work Featured by New Hampshire Newspaper

Representatives of the Citizens’ Institute on Rural Design, a leadership initiative of the National Endowment for the Arts in partnership with the Housing Assistance Council, drew attention from the Keene (N.H.) Sentinel when they toured an area in Keene, New Hampshire targeted to become an arts corridor.

National Rural-Design Agency Advising Keene on Proposed Arts Corridor

by Caleb Symons

November 22, 2021

The mural needed a second look.

Sylvie Rice, a volunteer with the Historical Society of Cheshire County, had pointed out that Abraham Lincoln’s profile is deliberately etched into the clouds of an otherwise colonial-era scene on Church Street in downtown Keene. In unison, the small group of local arts promoters and rural-development advisers craned their necks to better see the 16th president.