Rural News

Jennifer Emerling / There Is More Work To Be Done

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.