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Rural Affordable Housing Issues: Does Appalachia Presage the Future of Rural America?

Image of Rachelle Levitt, Director of PD&R's Research Utilization Division.Rachelle Levitt, Director of PD&R's Research Utilization Division.

The recently published Hillbilly Elegy by J.D. Vance and Factory Man by Beth Macy vividly portray the housing, health, and employment conditions and stresses facing residents of rural America — particularly those living in Appalachia. In the context of economic globalization, declining investment in rural industry combined with technological advances in manufacturing, such as automation, that reduce the number of people needed to operate machinery have resulted in widespread unemployment. The disappearance of jobs has had many unfortunate consequences, including rising rates of early disability, an increasing reliance on Social Security for income, health problems, and the ravages of opioid addiction and the related drug trade. Some observers feel that these factors are wiping out the culture of Appalachia and other rural areas. Neither Vance nor Macy, however, is an apologist for the problems facing the rural population of Appalachia. Vance suggests that the residents of Appalachia are potentially the cause of their own demise, although both authors agree that health and employment problems are often the result of structural problems. Efforts to confront these critical economic development and health problems are inextricably tied to the preservation and accessibility of affordable rural housing.

Disability

According to American Community Survey (ACS) data, the overall percentage of U.S. residents with disabilities was estimated at 12.6 percent in 2015, up from 11.9 percent in 2010. ACS data also show that 28.9 percent of U.S. households have a member with a disability. People with disabilities tend to have lower incomes than those who do not; in 2015, the median income of people with disabilities ages 16 and over in the United States was about two-thirds that of people without disabilities ($21,572 and $31,874, respectively).1 Many heavily rural states such as those in the Midwest, South, and Appalachian regions employ high percentages of the workforce in physically demanding industries, including forestry, certain types of mining, utilities, construction, and manufacturing. These states tend to have more disability recipients than do states with economies oriented toward service industries, and some of these states have disability rates that are nearly double the national average.2 The low earnings of disability recipients stress household budgets, making access to affordable housing critical for many rural families.

Health

Residents of rural areas often live far from healthcare providers, including emergency care providers. Some areas may also have fewer providers, making it difficult for residents to get routine checkups, treatments, and screenings. These challenges may lead to delayed care, which can cause health problems to worsen before they are diagnosed and addressed.3 Policy responses that address the need for affordable rural housing should consider opportunities to better link housing and health services, whether through improved transportation options, in-home supportive services, community health centers, or other interventions.

Employment

To help improve the employment prospects of workers displaced by foreign competition, retraining is available through the federal Trade Adjustment Assistance program. According to Factory Man author Macy, however, people in such education and training programs often drop out of classes when any job became available, whatever the salary — rarely considering the long-term consequences of taking such employment. Massachusetts Institute of Technology economist David Autor, as quoted in Factory Man, has argued for “better-designed job training programs that would help people rejoin the labor markets and acquire skills to prevent them from exiting the workforce, as many do in import-slammed areas.”4 Other studies have found that wages for displaced workers are lower than those of other workers in the long run.5 However, younger workers and those who take advantage of job training and apprenticeships fare better than older participants in the long run.6 Many displaced, adversely affected employees turn to Social Security Disability Insurance for support — an expensive solution for the federal government. Although underutilized, training for new skills that match the needs of the new economy is a solution for the economic challenges of rural regions.

Affordable Housing

There is a growing need for affordable rental housing in rural America. The National Rural Housing Coalition indicates that 35 percent of rural renters are cost burdened, meaning that they spend more than 30 percent of their income on housing costs.7 The U.S. Department of Agriculture’s (USDA’s) Section 515 Rural Rental Housing loans for very low-, low-, and moderate-income families; elderly people; and people with disabilities have been used successfully to house the rural population since 1949. As of April 2010, the average income of Section 515 tenants, per USDA, was $11,086.8 According to an analysis by the Housing Assistance Council, there were 13,838 Section 515 properties with 416,688 rental units in the United States in 2016. Almost two-thirds of the households in these properties received rental assistance from USDA. Many of these properties, however, are approaching their estimated loan maturity or payoff date, at which time they can exit the Section 515 program. USDA projects that 74 properties with 1,788 units will exit the program each year from 2016 to 2027, after which the projected average annual loss will rise to 556 properties (16,364 units) annually through 2032. From 2032 to 2040, when the losses are expected to peak, an estimated 22,500 units per year will leave the program.9 Therefore, as is the case in many urban areas, the preservation of affordable rental housing in rural communities remains a challenge. The acute need for affordable rental housing and the projected loss of affordable units requires a policy response. As suggested by the Preservation Compact in Chicago, preservation efforts could entail a change in federal legislation, an early warning system for housing at risk of losing affordability, an Energy Savers program to cut operating costs, and help for tenants being squeezed out of markets.

Conclusion

Multiple forces have come together to create significant health, employment, and structural problems in America’s rural areas. Today’s challenge for public officials is to preserve affordable housing and rural hospitals, improve access to health care, and provide job training for new economy skills while preserving the culture and heritage of these rural areas.

Source:

Lewis Kraus. 2017. 2016 Disability Statistics Annual Report, Durham, NH: Institute on Disability, University of New Hampshire, 2–3.

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U.S. National Library of Medicine. “Rural Health Concerns,” MedlinePlus website (medlineplus.gov/ruralhealthconcerns.html). Accessed 19 June 2017.

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Beth Macy. 2014. Factory Man: How One Furniture Maker Battled Offshoring, Stayed Local — and Helped Save an American Town, New York: Little, Brown and Company, 353.

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Pawel Krolikowski. 2015. “Job ladders and earnings of displaced workers,” VOX, 13 February. Accessed 22 June 2017.

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Robert Maxim. 2016. “No Helping Hand: Federal Worker-Retraining Policy — Renewing America Progress Report and Scorecard,” Council on Foreign Relations.

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National Rural Housing Coalition. “Section 515 Rural Rental Housing Loans." Accessed 20 June 2017.

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Housing Assistance Council. 2011. “USDA Rural Rental Housing Loans (Section 515)." Accessed 22 June 2017.

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Housing Assistance Council. 2016. “USDA Maturing Multifamily Mortgages." Accessed 22 June 2017.

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