Rural Affordable Housing in Crisis

Rural U.S. communities are losing affordable housing at an alarming pace, creating a crisis in many places unused to tight housing markets and high prices.

As Bill Conroy explains in HousingWire, the crisis is compounded by the threat posed to the U.S. Department of Agriculture’s (USDA) Section 515 rural housing assistance program, which “faces a wave of mortgage maturities and payoffs on the thousands of affordable-housing complexes it has helped to finance over the years — with no new construction carried out under the program since 2012.”

Once the government-supported mortgages terminate, property owners often turn affordable housing to market-rate units. “In fact, if nothing is done, this USDA program —  called Section 515 — is projected to lose up to 137,000 affordable-housing units between 2023 to 2033 nationwide due to mortgage maturities alone, according to USDA projections, ‘with a potential to lose approximately 333,000 units by the year 2050.’”

To address the issue, the proposed  Rural Housing Service Reform Act (RHSRA) would decouple rental assistance from the Section 515 mortgages so that assistance recipients can continue using the program after mortgages expire and make it easier for nonprofits to buy properties with expired 515 mortgages. The proposal would also expand a rural housing voucher program, Section 542, to allow for more flexibility. Conroy points out that the RHSRA does not address the lack of new construction of Section 521 housing.