Rural Housing Has Big Exposure To Falling Off the Fiscal Cliff

Rural housing advocates are worried that the resolution of the “fiscal cliff” coming due at the end of this year may mean draconian cuts in funding for this niche.

Bob Greenstein, president of the Center on Budget and Policy Priorities, told the recent National Rural Housing Conference presented in Washington by the Housing Assistance Corp. that if the plan put forward by Rep. Paul Ryan, R-Wis., is adopted, rural housing money could be cut in half over the next ten years.

The Earned Income Tax Credit and the child tax credit could expire, Greenstein told the meeting, and that would affect rural workers, 69% of whom earn $40,000 or less, substantially. The analyst told the meeting that having the EITC and child tax credit translates to $3.50 per hour extra for a rural worker making the minimum $7.25 an hour.

At the conference HAC released a report, “Taking Stock,” which did just that for rural housing.  Rural America, it says, following whether intentionally or not the cliff metaphor, is at a precipice.

Rural America is a huge place, though it contains just 21% of the nation’s population. It reaches into 90% of the country’s land base. It has a high proportion of elderly people and a growing population of Hispanic people. And HAC notes that while rural America was hit just as hard by the recent recession, it had serious financial problems even before that, as well as high poverty regions and populations such as reservation Indians.

“Often forgotten or hidden from much of mainstream America, these communities continue to experience decades of economic distress, neglect and poor housing conditions.”

Total rural housing units come to 30 million, the report says, which is 23% of the nation’s total housing stock. A high 71.6% homeownership rate prevails, although that has declined in the past decade. And more rural residents own their own homes free and clear, 42%, than their urban or suburban counterparts (27%). Manufactured housing is higher than the national average, as well as 36% of all high-cost loans in the country.

It is easy to see that these vulnerable populations should not be cut free from whatever safety nets still exist (notably the Rural Housing Service Section 502 and 504 mortgages). And it is well to remember that in the popular cartoon that inevitably ended with an encounter with a cliff, one animal always escaped while the other was left looking down at a long plunge.