September 27, 2019

Preserving the Affordability of Rural Rental Housing: Why It Matters

People across the country face challenges with housing affordability, including many in rural areas. In fact, over 7 million rural households — one in four — pays more than 30 percent of their income each month on their rent or mortgage and are considered cost burdened. Of these, more than 3 million pay more than half of their income each month on housing costs.

Unfortunately, rather than increasing their stock of affordable homes, rural communities are losing affordable housing at an alarming rate. According to The Housing Assistance Council, a significant number of USDA Section 515 properties will be lost in the next few decades due to loan maturity or other reasons beyond control. The Housing Assistance Council (HAC) portfolio recognizes that nearly 1800 homes per year are expected to exit the program in the next 10 years. This is important to note since nearly 90 percent of USDA’s portfolio is over 20 years old and more than half of those properties are over 30 years old. 

With so many people struggling to afford a safe, stable home, it is critical to preserve as many of the units that are currently affordable as possible. Congress took a step towards addressing this issue this month, with the House passing H.R. 3620, the Strategy and Investment in Rural Housing Preservation Act of 2019. If enacted, this bill would help preserve multifamily housing at a time when it is desperately needed. 

H.R. 3620 would establish a Housing Preservation and Revitalization Program - authorized for $1 billion spread evenly between 2020-2024 -- which:

  • Requires 4-year advanced notice to owners and tenants with maturing mortgages, providing information on options and financial incentives including extension of existing loans and decoupling, and the rights of tenants;
  • Authorizes and revises the MPR program, designed to reconstruct loans for existing Rural Rental Housing and Off- Farm Labor Housing projects to help improve and preserve the availability of safe affordable rental housing for low income residents; 
  • Requires that rental assistance contracts offered in connection with restructuring have a 20-year term; and provides USDA the option to decouple rental assistance if the Secretary determines that the project cannot reasonably be restructured and establishes guidelines for determining rents and creates technical assistance programs to facilitate transfer of properties to non-profits and public housing authorities; 
  • Authorizes housing vouchers for any multi-family project that was prepaid, foreclosed upon or matured after September 30, 2005; and 
  • Clarifies rules regarding the use of rental assistance. 

In addition to creating the Housing Preservation and Revitalization program, the legislation would also authorize $50 million in 2020 for improving USDA technology for the management of its multi-family housing portfolio. Finally, it would require USDA to submit a written plan for preserving multi-family projects and establish a committee to advise USDA on preserving farm labor and rental housing in rural areas.

Enterprise strongly supports H.R. 3620. As a national affordable housing and community development non-profit, we are dedicated to the creation and preservation of affordable housing in urban, suburban, and rural communities. We have invested over $800 million in grants, loans and equity, and developed more than 15,000 affordable homes in rural communities nationwide. Our Rural and Native American Program (RNAP) supports rural communities by providing technical assistance, capacity building, and guidance on accessing and leveraging critical financing programs. We see first-hand both the need and the impact that housing stability can have for low-income families in rural communities. We urge the Senate to take up H.R. 3620 quickly and send it to the President’s desk for his signature. 

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