A Proven Record: New Report Finds Housing Credit Is Key Driver of Affordable Rental Housing in Rural Areas

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The federal low-income housing tax credit has played a critical role in the development and preservation of much-needed affordable rental housing in rural America, according to a new report.

The publication documents the successful track record of the LIHTC program in rural communities, describes barriers to affordability in these areas, and contains detailed profiles of many individual rural housing credit developments nationwide.

The report was prepared by Rapoza Associates, a Washington, D.C. firm, in partnership with five members of the National Rural Housing Coalition: Self-Help Enterprises; Coachella Valley Housing Coalition; Peoples’ Self-Help Housing Corporation; South County Housing; and Community Housing Improvement Program of California.

“Rural barriers face significant barriers to clean, decent, and affordable rental housing,” says the report. “Due to lower income and higher poverty rates, far too many rural families live in rental housing that is either too expensive or in substandard condition.”

The study says more than 3 million rural renters – over 47% of all rural renters – spend more than 30% of their income on rent, and rural renters are twice as likely to live in substandard housing as rural homeowners.

“LIHTC is the largest source of federal housing funding and is the principal tool used by rural communities to overcome these barriers to affordable rental housing,” says the study. “Since its inception in 1986, LIHTC has been used to develop and preserve more than 7,600 rental housing projects – or more than 270,000 rental units – in rural America.”

According to the report, while housing costs are generally lower in rural areas, “rural families have lower incomes and higher poverty rates than the national average.” The median annual income for rural families ($40,038) is 20% below the national median income and 23% below the median income for urban households. Rural renters are even worse off, with a median income of $25,833 and poverty rate of nearly 33%.

The study contains charts and extensive statistics on rural LIHTC projects and units, including the number of units in each state, funding sources, type of construction, location in high-risk census tracts, and economic impact. The report identifies the states that had set-asides in their 2011 qualified allocation plans for rural projects and the size of these set-asides.

In 2012, according to the report, LIHTC generated 48% of the total funds for rural new construction rental projects and 54% of the total funding for rural preservation rental projects.

(To view report, The Low-Income Housing Tax Credit: Barriers to Affordable Housing in Rural America, go to http://tinyurl.com/ky898k6)