Ensuring quality and affordable rural housing

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Lisa Stifler is a Research Associate with the Community & Economic Development Program.

Although rural areas are commonly considered to have lower housing costs than suburban and metropolitan areas, housing in rural communities is nonetheless a concern for many individuals, families, and community leaders.  This is particularly true in rural areas of the state where housing prices have increased significantly over the years, often faster than incomes, due to the community’s proximity to jobs and urban areas or due to the increased popularity of some areas among retirees.Affordable housing, whether rented or owned, is defined as housing that costs the occupant no more than 30% of his or her gross monthly household income.  According to the NC Rural Center and based on 2000 Census data, 20 counties in eastern NC, 8 counties in central NC, and 2 counties in western have more than 20% of households living in unaffordable housing.  Although housing data for rural NC is sparse, most of the counties in eastern NC with such high rates of households living in unaffordable housing can be considered rural counties.  (Click here for the website with the data.)  In all, it is estimated that about 2 million North Carolinians are living in unaffordable, inadequate, or crowded housing, and about 300,000 households pay more than half of their gross monthly income on housing.  (See this fact sheet for more information.)  Nationwide, 30% of all rural households live in unaffordable housing, while 40% of rural renters live in unaffordable housing.  (Click here for the data source.)  Additionally, rural renters often deal with more housing problems than rural homeowners, as more than half deal with multiple housing problems (substandard housing, crowding, and/or affordability) and rural renters are twice as likely to live in substandard housing.  (NOTE: MPA student Eric Moore has developed more recent data on housing affordability in NC, which will be presented as part of his capstone presentation in May.  The data will be available online after that presentation.)

There are a variety of tactics and approaches that rural organizations around the state and country have used to increase access to affordable and adequate housing for rural residents.  Mountain Housing Opportunities (MHO) in Buncombe County develops and offers affordable rental housing for individuals and families in the workforce, retirees, and people with disabilities.  River City CDC in Pasquotank and Camden Counties developed and offers affordable rental housing for seniors.  Frontier Housing in KY developed two affordable housing rental complexes for families in rural Kentucky.  Although Frontier does not manage the properties, it partners with the management company to provide on-site services to tenants, including support services, financial education, credit counseling, and homebuyer education classes.

A variety of homeownership approaches are being used throughout the state and country as well.  Mountain Housing Opportunities runs a homeownership program for low- and moderate-income rural families on a “sweat equity” model, much like that used by Habitat for Humanity.  In this model, housing is made affordable in part because future homeowners contribute time and “sweat” to the building of the homes, thus reducing the costs of the homes.  Through the MHO model, neighborhoods are built one at a time, all future homeowners work on all homes in the neighborhood, and no one moves in until all homes are finished.

A prior post offers a brief and excellent discussion of another common tactic used throughout the country – the shared equity housing model known as community land trusts.  In NC, there are only two or three CLTs, and all are located in urban areas.  However, the CLT model has been successfully used in rural areas.  Champlain Housing Trust in Vermont is one of the oldest and considered to be one of the most successful CLTs in the country, and it happens to serve a largely rural area.  A recent study of the work done over the past 25 years by Champlain Housing Trust indicates that the CLT model has increased individual and family wealth, community wealth, enabled residential mobility, enhanced residential stability, and preserved housing affordability in the service areas.

Perhaps a more controversial approach being implemented is one that works with manufactured housing, which is a frequent source and choice of housing among low-income homeowners and in rural areas.  The New Hampshire Community Loan Fund pioneered an affordable housing program by working with residents of manufactured home parks to buy and manage their parks as cooperatives.  The idea behind the program is that a resident-owned community helps to stabilize housing costs by controlling the land rent prices and through access to less expensive financing, improves living conditions in the neighborhood, and creates a sense of community.  This model is also being used by the Community Resource Group, which serves Alabama, Mississippi, Texas, Arkansas, Oklahoma, Louisiana, and Tennessee.  Alternately, Frontier Housing, in Kentucky, is pioneering an initiative it calls “Manufactured Housing Done Right!”.  Through the initiative, Frontier has partnered with Clayton Homes, a manufactured home manufacturer, to develop and provide affordable, high quality, and energy efficient manufactured homes for very low-income and working families.  Although Frontier first started offering multi-section manufactured homes as a supplement to its site-built homes in 2005, the initiative has since expanded to include single-section homes and is also focused on serving homeowners who need to replace their substandard, older manufactured homes.

Finally, all of the programs mentioned above offer various forms of homeownership assistance.  These forms of assistance include downpayment assistance, support services, credit counseling, financial education, homeowner education classes, and continuing support and education after an individual or family purchases a home.

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