Toward a Context-Based Definition of “Rural”

Toward a Context-Based Definition of "Rural"

Highlights

• Federal agencies use various definitions of rural, including a dichotomous rural/urban distinction, a scale to classify the fluidity between rural and urban areas, a perception-based measure, and an additive definition that combines different data sources.
• HUD employs several methods to define rural, including the Office of Management and Budget's county- and block-level census classifications, the 2010 census definition, and perception-based definitions derived from American Housing Survey responses.
• The particular definition of rural that a federal agency uses directly affects whether rural households meet classification standards to qualify for a given government program.

Among the biggest challenges facing researchers and policymakers studying the unique characteristics and needs of rural areas are both the availability of data covering rural areas and the lack of a clear definition of the term "rural" itself. The availability of representative data covering rural areas is limited due to the cost and logistical challenges of rural data collection. A more important factor, however, is the tension that arguably exists between the potential analytical advantages of having a common definition and the multidimensional and sometimes perceptual nature of the rural construct.1

A standardized definition could reduce inconsistent or confusing findings. For example, researchers using the U.S. Census Bureau's definition of rural will find higher rural poverty rates than researchers using other measures.2 Such discrepancies complicate researchers' efforts to synthesize findings from multiple sources and understand the challenges facing rural America. The varying definitions of rural also directly affects those served by government programs; an individual classified as a rural resident by one program might not be one by the standards of another program.3

The construct of rural is multidimensional and not always consistent with standard geographic boundaries; many counties contain areas characterized as both rural and urban within their borders.4 Furthermore, determining the line between suburban and rural has become increasingly difficult as suburban areas have spread from outlying metropolitan areas into previously undeveloped land.5 Recent research suggests that the largest geographic category in the United States is actually the suburbs and that suburban, urban, and rural residents are distinct in terms of their "attitudes on social issues, labor and economic outcomes, and health outcomes."6

HUD serves both rural and urban individuals and communities nationwide. In some cases, HUD directs assistance to rural areas, such as capacity-building funds for community development and affordable housing in rural areas. HUD, however, does not consider rural or urban status in issuing most of its household-based assistance, making the HUD-assisted population an interesting demonstration of how the number of rural households served would vary based on the definition of rural used.

This article examines selected definitions of rural that federal agencies employ.7 Using data on HUD-assisted individuals as a lens for comparing definitional approaches, this article demonstrates the effects of applying different definitions of rural to the HUD-assisted population and recommends that policymakers consider a programmatic, context-based approach to defining rural in future interventions. Furthering program or policy goals may require an expansive definition of rural or favor a more targeted approach.

Definitions of Rural

Definitions of rurality differ across federal agencies and programs. Some agencies classify any place not otherwise considered urban as rural, some use a scale to represent different areas along a continuum from most rural to most urban, others incorporate a subjective measure of how residents perceive an area, and still others use a combination of measures. This section will describe various methods used by the Office of Management and Budget (OMB), U.S. Census Bureau (Census), U.S. Department of Agriculture (USDA), U.S. Department of Health and Human Services Health Resources and Services Administration (HRSA), and HUD.

Dichotomous Definitions of Rural
Office of Management and Budget
OMB does not technically use the term rural; rather, it classifies counties as metropolitan, micropolitan, or nonmetropolitan based on their population and adjacency to a "large population nucleus."8 Agencies using OMB definitions generally consider all counties outside of metropolitan areas — both micropolitan and nonmetropolitan — to be rural.9 Many programs, communities, and researchers, such as USDA and the National Center for Health Statistics, base their definitions of rural areas on OMB designations.10

Despite this widespread use, OMB cautions against using its classification system to designate counties as urban or rural, because county geographies typically are large enough to encompass both urban and rural areas; the Grand Canyon, for example, is located within a metropolitan county.11

OMB stresses that key programming considerations lie at the heart of rural definitional challenges: "[P]rograms that seek to strengthen rural economies by focusing solely on counties located outside [metropolitan statistical areas (MSAs)] could ignore a predominantly rural county that is included in an MSA because a high percentage of the county's residents commute to urban centers for work."12

U.S. Census Bureau
Census defines rural areas as areas not otherwise defined as urban based on area population, density, land use, and other factors.13 The agency designates urban and rural areas at the census block level; these smaller geographies identify rural areas located within otherwise metro- or micropolitan counties and eliminate some of the challenges that OMB's county-level data present. The analysis of Census data, however, is affected by geographic boundary changes between decennial censuses as well as changes in the rural-urban designation process. In 2020, Census increased the minimum population for urban census tracts from 2,500 to 5,000 and incorporated housing density as a qualifying factor. As a result of this change, 2020 data show approximately 4.2 million people in rural areas that previously had been classified as urban in 2010.14 This change complicates longitudinal comparisons of data, making it difficult to determine whether changes in rural population over time stem from an observable change in population or the definitional change.

Scales to Categorize Rurality
U.S. Department of Agriculture
USDA's Economic Research Service has created several measures of rurality.15 One definition researchers commonly use relies on the Rural-Urban Commuting Area (RUCA) codes, which use a proximity-based scale rather than a strict urban/rural dichotomy to classify urban and rural areas (exhibit 1). For RUCA, USDA uses Census commuting data and a methodology similar to that used to define metropolitan and micropolitan areas to classify areas at the census-tract level and on a scale of 1 to 10.16 For example, a 1 on the RUCA scale indicates a metropolitan area core with the primary commuting flow occurring within an urbanized area, whereas a 10 on the RUCA scale indicates the most rural areas, with primary commuting flows occurring mainly to tracts not in urbanized areas or urban cores. One common use of RUCA, referred to as RUCA1, sets an urban/rural threshold, designating codes 4 and above as rural.17 Another use of RUCA, called RUCA2, defines urban areas as those with both high population and commuting flows (codes 1, 4, and 7) and tracts in the remaining codes as rural.

Perception-Based Definitions
USDA's Concept of "Rural in Character"
In addition to the continuum code noted above, some USDA programs also apply a subjective measure of rurality. For example, USDA's Single-Family Housing Loans and Grants program sets automatic eligibility criteria based on population density. However, the program's eligibility guidelines also offer Field Offices additional discretion to designate areas that are considered "rural in character" or "open country" based on analyses of economic vitality, aerial maps, site visits, or other factors.18

Urbanization Perceptions Small Area Index
In 2017, HUD added a question to the American Housing Survey (AHS) asking respondents to describe their neighborhood as urban, rural, or suburban.19 HUD and Census researchers used these AHS neighborhood perception data to co-create the Urbanization Perceptions Small Area Index (UPSAI), a national, census-tract-level urbanization classification index published in 2020. Using machine-learning techniques, researchers created a model based on the relationship between the AHS neighborhood description question and other variables to predict how households outside of the sample would describe their neighborhood. They then classified each tract based on the most likely description (urban, suburban, or rural).20

Definitions That Combine Geographies
Some federal agencies and programs use a combination of the available data to define rurality for the purposes of eligibility for their programs, which may result in a combination of geographies. These definitions adopt an additive and data-based approach rather than relying on perceptual assessments.

Health Resources and Services Administration
One of the more expansive definitions of rural comes from HRSA, the division of the U.S. Department of Health and Human Services focused on increasing access to care for people in rural communities.21 Rural residents may lack access to health care because their areas lack providers or because of other barriers, such as a lack of transportation or the inability to pay for care or secure time off from work.22 To determine eligibility for rural grants, HRSA uses a broad, data-driven approach combining data from multiple sources in two levels of geography. HRSA begins with counties that OMB has identified as nonmetropolitan counties, adds outlying metropolitan counties with populations below 50,000, and then incorporates additional census tracts with RUCA codes greater than 4 plus tracts with RUCA codes 2 or 3 that meet certain area or population density criteria or are in areas with rugged terrain.23

U.S. Department of Housing and Urban Development
HUD also employs several of the above methods to define rurality. For example, HUD uses data from multiple sources to determine the rural status of its public housing agencies (PHAs), the local government entities that receive HUD subsidies to administer housing programs. To help small and rural PHAs that may not have sufficient staffing and resources for unit inspections or environmental reviews, HUD reduces regulatory burdens for agencies designated as small rural PHAs.24 HUD defines a PHA as small and rural if the PHA's address is in a rural area or if more than 50 percent of its units are in rural areas. For this designation, HUD defines rurality using a mix of OMB county classifications and block-level census classifications: rural PHAs are those whose address is not in an OMB metropolitan county, not in a micropolitan county adjacent to a metropolitan county, or not in a Census block defined as urban.25

HUD also awards grant funding for housing and community development in rural areas and has used varying definitions of rurality based on program design. For some programs, HUD has used the 2010 census definition of rurality to target grant funds to rural areas.26 For example, HUD used the 2010 census definition to determine eligibility for $12 million in grant funding for fiscal years 2023 and 2024 for the Rural Capacity Building Program.27

Other grant funding has used an additive definition of rural. In 2022, HUD set aside $54 million of its Special Notice of Funding Opportunity to Address Unsheltered and Rural Homelessness for projects that serve rural areas.28 Eligibility guidelines for this program defined a rural area as a county that is not within an OMB-designated metropolitan area, has at least 75 percent of its population in census blocks classified as nonurban, or is in a state with a low population density.

Measuring Housing Programs in Rural Areas

Visualizing Definitions of Rural
This section uses HUD data to present a tangible example of the variation among definitions. First, I use HUD administrative data to illustrate the difference between various definitions of rurality, and then I demonstrate the potential of a new measure of rurality that combines data from Census and UPSAI.

As exhibit 2 shows, HRSA's expansive definition of rurality captures nearly three times as many HUD-assisted households as Census' more targeted definition.29

Program Takeup in Rural Areas
HUD housing programs and the affordable housing properties created under the Low-Income Housing Tax Credit (LIHTC) program are available in both rural and urban areas. Thus, an important policy question involves determining the extent to which the share of rural households that HUD housing programs serve matches the share of all rural households.

The analysis in exhibit 3 uses 2023 HUD administrative data, 2023 Federal Housing Administration (FHA) loan data, and 2023 LIHTC data to show that some programs have greater coverage in rural areas than do others. Using HUD's more limited definition of rural — the 2010 census definition described above — the rural share of the 19 million FHA mortgage (19.4%) and refinancing (19.9%) loans originated in 2023 was similar to the share of the U.S. population living in rural areas (20%).30 In contrast, only approximately 5 percent of the nation's 4 million subsidized households — those participating in programs such as the Housing Choice Voucher and Public Housing programs — were in rural areas.31 Slightly more than 11 percent of LIHTC properties, low-income housing developments created using federal tax incentives, are in rural areas.

Using UPSAI Findings for an Additive but Targeted Definition of Rural
Future housing policymakers and researchers might consider an additive definition that combines data and geographies that Census identifies as rural with Census-HUD UPSAI data.32 This new definition would continue to emphasize the most rural areas but would allow the flexibility to incorporate areas defined as urban or suburban that residents perceive as being rural in character. Exhibit 4 shows that residents of census-defined Urban Clusters (urban areas with fewer than 50,000 people) were nearly as likely to describe their neighborhood as rural as they were to describe it as urban (26% and 28%, respectively).33 In addition, 5 percent of respondents in census-defined Urbanized Areas (urban areas with more than 50,000 people) also considered their neighborhoods to be rural.

These differences in rural perception versus rural census classification could mean that some households in areas that Census would define as urban may face barriers to housing that are more akin to those that rural households face. To demonstrate the potential extent of this phenomenon, the dark red bars in exhibit 5 illustrate an expanded definition of rural that includes areas that are either categorized as rural by the 2010 census or perceived as rural in UPSAI. This new measure results in increases in the number of rural households covered by all four kinds of housing assistance analyzed, with the biggest percentage increases observed in HUD-subsidized households (an increase of nearly 70%) and LIHTC properties (an increase of more than 50%). More research is needed to better understand the housing needs of those living in rural pockets of urban areas.

Discussion

This article highlights the extent to which the population described as rural can vary based on the definition used. This variance suggests the importance of carefully considering policy goals when deciding how to define rurality: Would a targeted definition or a widely cast net provide the greatest benefit? Is the program designed to serve only the most rural households, or should beneficiaries include rural households that have the opportunity to commute to a more populous area regardless of whether they do so successfully? Answers to these questions can help decisionmakers determine whether to adopt a targeted or more expansive definition of rurality and whether to choose a dichotomous rural/urban definition, a scale illustrating the continuum between rural and urban, a perceptual measure, or an additive definition that chooses areas that meet various criteria.

Similarly, future housing research on the needs of households in rural areas should consider how comparing the results of multiple definitions might foster improved findings. Future research is also warranted to investigate several key questions in rural housing policy: do place-based programs in rural areas effectively address the housing needs of rural residents? Are participants in tenant-based programs able to find housing in their desired areas? What are the experiences of residents in areas that data alone might classify as urban but perceptions classify as rural in character? The findings of such research will help inform future housing policy in rural America.

— Gretchen Armstrong, HUD Staff
 Stephanie Hawke, HUD Staff, contributed key analyses to this article.

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1. Kevin J. Bennett, Tyrone F. Borders, George M. Holmes, Kati Backes Kozhimannil, and Erika Ziller. 2019. "What Is Rural? Challenges and Implications of Definitions that Inadequately Encompass Rural People and Places," Health Affairs 38:12, 1985–92.
2. Julianna Long, Paul Delamater, and George Holmes. 2021. "Which Definition of Rurality Should I Use? The Relative Performance of 8 Federal Rural Definitions in Identifying Rural-Urban Disparities," Medical Care Research and Review 59:10(5), S413–9.
3. Corianne Payton Scally, Eric Burnstein, Matthew Gerken, and Evelyn Immonen. 2020. "In Search of 'Good' Rural Data: Measuring Rural Prosperity," Metropolitan Housing and Communities Policy Center Research Report.
4. Bennett et al.; Office of Management and Budget. 2021. "2020 Standards for Delineating Core Based Statistical Areas," Federal Register 86 FR 37770, 16 July.
5. Payton Scally et al.
6. Jed Kolko and Shawn Bucholtz. 2018. "America Really Is a Nation of Suburbs," CityLab, 14 November.
7. See "Rural Housing" for a definition of rural from a nongovernmental entity, the Housing Assistance Council.
8. Office of Management and Budget.
9. Austin Sanders. 2025. "Rural Classifications – What is Rural?" U.S. Department of Agriculture.
10. Ibid.; Bennett et al.; Peter Han. 2022. "Rural Definitions Matter: Implications for HUD Assistance Programs," Cityscape 24:3, 215–30.
11. Health Resources and Services Administration. "How We Define Rural" (www.hrsa.gov/rural-health/about-us/definition). Accessed 16 June 2025.
12. Office of Management and Budget.
13. Michael Ratcliffe, Charlynn Burd, Kelly Holder, and Alison Fields. 2016. "Defining Rural at the U.S. Census Bureau," American Community Survey and Geography Brief, December.
14. U.S. Census Bureau. 2022. "Nation's Urban and Rural Populations Shift Following 2020 Census," press release CB22-CN.25, 29 December.
15. In addition to the Rural-Urban Commuting Area (RUCA) codes, USDA tools also include Rural-Urban Continuum codes, assigned to counties on a scale of 1 to 9 based on the degree of urbanization or rurality; Urban Influence codes, designed to indicate the impact of nearby urban areas on rural areas; and Frontier and Remote Area codes, which indicate areas that are highly remote. John Cromartie and Shawn Bucholtz. 2008. "Defining the ‘Rural' in Rural America," Amber Waves, USDA Economic Research Service, 1 June.
16. Sanders.
17. Han.
18. U.S. Department of Agriculture. 2020. "Chapter 5.3: Rural Area Designation" in Direct Single Family Housing Loans and Grants — Field Office Handbook, HB-1-3550 Revised (03-19-20) PN 534.
19. U.S. Department of Housing and Urban Development. Office of Policy Development and Research. "The 2017 AHS Neighborhood Description Study" (www.huduser.gov/portal/AHS-neighborhood-description-study-2017.html#small-area-tab). Accessed 16 June 2025.
20. Shawn Bucholtz, Emily Molfino, and Jed Kolko. 2020. "The Urbanization Perceptions Small Area Index: An Application of Machine Learning and Small Area Estimation to Household Survey Data," U.S. Department of Housing and Urban Development; Kolko and Bucholtz; Shawn Bucholtz. 2020. "Urban. Suburban. Rural. How Do Households Describe Where They Live?" PD&R Edge, 3 August.
21. Health Resources and Services Administration. 2025. "About HRSA: Tens of millions of Americans receive quality, affordable health care and other services through HRSA" (www.hrsa.gov/about). Accessed 25 March 2025; Health Resources and Services Administration. 2024. "Mission" (www.hrsa.gov/rural-health/about-us/mission). Accessed 16 June 2025.
22. "Healthcare Access in Rural Communities," Rural Health Information Hub website (www.ruralhealthinfo.org/topics/healthcare-access). Accessed 16 June 2025.
23. Health Resources and Services Administration's use of RUCA codes differs from that of researchers using RUCA1 or RUCA2. Health Resources and Services Administration. "How We Define Rural" (www.hrsa.gov/rural-health/about-us/what-is-rural). Accessed 16 June 2025; Health Resources and Services Administration. 2024. "Inclusion of Terrain Factors in the Definition of Rural Area for Federal Office of Rural Health Policy Grants," Federal Register 89 FR 92131 Document 2024-27133.
24. U.S. Department of Housing and Urban Development. 2019. "Section 209 of the Economic Growth, Regulatory Relief, and Consumer Protection Act: Initial Guidance," Federal Register 84 FR 4097 Document 2019-02359.
25. "Subpart H—Assessment of Small Rural Public Housing Agencies," 24 C.F.R. § 902.101 (www.ecfr.gov/current/title-24/subtitle-B/chapter-IX/part-902/subpart-H); "Requirements for higher-priced mortgage loans," 12 C.F.R. § 1026.35(b)(2)(iv)(A)(1) (www.ecfr.gov/current/title-12/chapter-X/part-1026/subpart-E/section-1026.35#p-1026.35(b)(２)(iv)(A)).
26. Although data using the 2020 census definition of urban and rural are available, HUD was still using the 2010 census definition as of the publication of this article.
27. U.S. Department of Housing and Urban Development. "HUD Invests $12 Million to Strengthen Rural Communities," 18 December press release; U.S. Department of Housing and Urban Development. "Rural Beneficiary Mapping Tool" (www.hudexchange.info/programs/rural-capacity-building/). Accessed 13 March 2025.
28. U.S. Department of Housing and Urban Development. 2022. "Continuum of Care Supplemental to Address Unsheltered and Rural Homelessness: Technical Correction."
29. "HUD-assisted households" are households that participate in HUD programs that provide subsidies to reduce rents for low-income tenants who meet program eligibility requirements. This assistance may be attached to public housing; tenant-based vouchers; or privately owned, project-based units. U.S. Department of Housing and Urban Development, Office of Policy Development and Research. "Picture of Subsidized Households" (www.huduser.gov/portal/datasets/assthsg.html). Accessed 17 April 2025; Han.
30. The change from 19.3 percent of the rural population in 2010 to 20 percent of the rural population in 2020 was primarily the result of changes in the definitions of rural rather than a substantial change in living patterns. U.S. Census Bureau.
31. U.S. Department of Housing and Urban Development, Office of Policy Development and Research. "Picture of Subsidized Households"(www.huduser.gov/portal/datasets/assthsg.html). Accessed 17 April 2025.
32. Todd Richardson. 2021. "Another Definition for Rural?" PD&R Edge, 21 December.
33. Kolko and Bucholtz.