Why Housing in Rural America Matters

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Rural America has changed dramatically since 1900, when more than two-thirds of the U.S. population lived in agricultural areas. Today, fewer than one-fourth do. Large corporate agricultural enterprises and strip malls have replaced traditional family farms. Just as the rural landscape has changed, so have rural homes. Most of these changes have been positive, according to the Housing Assistance Council (HAC), a national nonprofit organization. More rural Americans now live in decent, safe, and comfortable homes. Despite this positive trend, HAC finds that far too many rural Americans still lack decent, affordable housing.

With support from HUD, HAC publishes an annual report on the Nation's rural housing. Why Housing Matters: HAC's 2000 Report on the State of the Nation's Rural Housing illustrates how good housing and communities are essential for high quality of life and economic well-being. This year's report combines an overview of housing conditions in locations outside metropolitan areas with stories of several rural families who live in federally assisted housing.

Why Housing Matters begins with a comprehensive review of nonmetropolitan housing in 1997. About 22 percent (22 million) of all occupied U.S. housing units are located in nonmetropolitan areas, and owner-occupied units comprise the majority of the rural housing stock.

The predominance of homeownership in rural areas has overshadowed the importance of rental housing and the needs of renters in nonmetropolitan areas. More than 14 percent of rural rental households, which tend to have lower incomes, occupy housing with severe or moderate physical problems. Mobile homes continue to make up one of the fastest growing housing segments in the United States, particularly in rural areas. A significant trend in rural areas is the 86-percent increase in the number of Hispanic households. According to HAC, rural Hispanic households reside in inadequate housing at twice the rate for all rural families. Elderly households are already more prevalent in nonmetropolitan areas than in urban areas. Senior citizens typically "move down" from ownership to less costly and smaller rental units. Given the shortages of affordable rental housing in rural areas, meeting the needs of senior citizens will be a challenge.

Housing inadequacy is more common in nonmetropolitan areas than in metropolitan areas. Approximately 8.2 percent (1.8 million) of nonmetropolitan units are either moderately or severely inadequate. Approximately 21 percent of rural households are considered cost-burdened because they spend more than 30 percent of their monthly income for housing. Renters comprise a disproportionate number of these cost-burdened households.

The report highlights the relationship between housing and neighborhood quality. Compared with metropolitan households, rural residents, in general, are more satisfied with their housing and neighborhoods. These satisfaction levels are lower for nonmetropolitan households experiencing quality or cost problems. Housing and neighborhood quality also have significant consequences for the health and well-being of children. Of the 7.7 million nonmetropolitan units with children present, 35 percent have problems with cost, crowding, or inadequacy. Government housing assistance seems to improve housing quality and satisfaction for nonmetropolitan households. An overwhelming portion of assisted renters and owners indicate that their current subsidized housing is better than their previous dwellings.

This HAC report also looks at housing and economic well-being in rural America. Homeownership remains one of the best methods of asset accumulation for rural households with low incomes. Although more rural households than urban households own their homes, the equity accumulated by a nonmetropolitan homeowner is likely to be less because rural homes are generally less valuable. Several barriers to quality and affordable mortgages exist in rural areas. Higher interest rates in rural America are particularly significant. These higher rates in nonmetropolitan areas are partly attributable to the larger number of mobile home loans, which often carry higher interest rates. Subprime lending, on the rise in rural areas, also contributes to higher mortgage rates.

HAC concludes that housing matters deeply in rural America, where residents strongly value home and community. A decent home promotes safety, security, and economic well-being. Satisfaction levels with housing and neighborhoods in rural America are high among homeowners, seniors, and whites and lower for other groups such as renters, younger households, and people experiencing cost or quality problems.

Why Housing Matters is available in pdf format on HAC's Website at http://www.ruralhome.org/pubs/hsganalysis/snrh/why/whyhousingmatters.pdf or for $9 by mail, including postage and handling. To request a printed copy of HAC's annual report, contact Luz Rosas at (202) 842-8600, fax: (202) 347-3441, or write to Housing Assistance Council, 1025 Vermont Avenue NW, Suite 606, Washington, DC 20005.