EXECUTIVE SUMMARY

In a nation that places value on homeownership and has committed substantial resources to increasing ownership opportunities, the needs of rental households can often be overlooked. Rental housing provides a housing alternative for the millions of rural families unable to purchase or uninterested in owning a home. In rural communities where homeownership has long been the preferred form of tenure for the vast majority of households (76 percent), the importance of the rental housing stock and the needs of renter households are often ignored.

With just under 9 million occupied rental units, 24 percent of the total occupied rural housing stock is renter-occupied. Although they make up a smaller proportion of the total rural population than rural homeowners, rural rental households suffer some of the most significant housing problems in the United States. There is a significant need for rental housing assistance to alleviate housing cost burden, improve substandard conditions, and increase the supply of affordable rental housing. Despite these pressing needs, attention to rural rental housing issues has been limited and resources to address these conditions are limited.

This year’s State of the Nation’s Rural Housing is an examination of the occupied U.S. rural rental housing stock and the needs of rural rental households. This report reflects both an analysis of 1995 American Housing Survey (AHS) data and a summary of roundtable discussions convened by the Housing Assistance Council (HAC).

This examination of rural rental housing issues revealed the following:

• There are 8.9 million occupied rental units in rural America. Sixty-one percent of all rural rental households are low-income. Female-headed households make up 46 percent of all rural rental households and minority-headed households make up 17 percent.
• More than 1 million rental households in rural America experience worst case needs; these are very low-income, extremely cost burdened and/or inadequately housed, rental households who do not receive federal housing assistance.
• Housing cost burden is the most significant problem facing rural rental households. One third of all rural renters pay more than 30 percent of their income for housing costs, and 92 percent of all rural worst case needs households are severely cost burdened, paying more than 50 percent of their income for housing costs.
• Over 900,000 rural rental households (10.4 percent) live in either severely or moderately inadequate housing. Over 19 percent of rural worst case renters live in housing that is at least moderately substandard.
• Funding for the Section 515 program, the major project financing tool for developing rural rental housing, has decreased by 74 percent since 1990. Consequently, the number of new units produced using this program has also decreased significantly.
• The growing trend of using guaranteed loans to finance affordable rural rental housing development does not serve very low-income households. In order to serve the poorest of the poor, additional subsidies are typically needed.
• Preserving the current stock of affordable rural rental housing is one of the most pressing issues for housing advocates. Project owners, particularly older owners, are choosing to opt out of affordable housing programs. Strategies must be developed to keep these units affordable to low-income households.

This report consists of several sections that speak to issues of rental housing supply, affordability, quality, and federal rental assistance and project development financing programs. The study concludes with a section of general and specific policy recommendations that were provided by HAC’s roundtable participants. Overall, the data and panel discussions strongly indicate that an increased level of funding must be dedicated to increasing, improving, and maintaining the stock of rural rental units in the U.S.

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