Estimating Potential Changes to USDA RD’s Eligible Area Designations (PDF)

SUMMARY

The United States Department of Agriculture (USDA) utilizes a specific definition of rural to establish “Eligible Areas” for rural housing programs administered by its Rural Development (RD) agency. The Housing Assistance Council (HAC) investigated potential impacts to the current USDA‐RD eligible area designations that could result from statutory changes linked to population figures from the 2010 Decennial Census.

An Estimated 500 USDA‐RD Eligible Areas Could Potentially be Reclassified as Ineligible Based on Population Estimates and Thresholds. Using recently released population figures from the 2010 Census, the Housing Assistance Council assessed the potential impacts of population change on USDA‐RD eligible area classifications. HAC’s analysis estimates that 500 places (cities, town, villages, etc.) currently classified as USDA‐RD eligible areas may exceed statutory population thresholds and could potentially be reclassified as ineligible territory on the basis of their population threshold alone.

The identified 500 places with the potential of losing their USDA‐RD eligible area status encompass approximately 10,132 square miles, constituting a possible .3 percent reduction in the current eligible area landmass nationally. Additionally, there are an estimated 9.1 million people living in these potential reclassification areas, which could reduce the total current USDA‐RD eligible areas population (not program or income eligible population) by roughly 8 percent.

Potential Changes are Greatest in Metropolitan Areas. USDA RD’s rural areas definition includes differing eligibility thresholds based on OMB designated Metropolitan Area status. Generally, places within Metropolitan Areas must have a population below 10,000 to be considered a USDA eligible area. Places outside of Metropolitan Areas can have populations up to 20,000 and still be eligible, if certain other conditions are prevalent. Approximately 90 percent of the identified USDA eligible areas that are potentially impacted by population change are located in Metropolitan areas.

Limited Analysis. HAC’s investigation presents an extremely limited analysis of potential changes to the USDA‐RD Eligible Areas designations. The study does not constitute a comprehensive assessment of USDA’s eligible areas definition. Instead it is intended to provide a platform to estimate potential modifications resulting from population changes revealed in the 2010 Census. The findings and projections are based solely on population estimates and do not take into consideration other elements associated with USDA’s eligible areas determination such as mortgage access, concepts of “rural character,” and the issue of grandfathering. Caution should be exercised when generalizing from, or referring to these estimates.