The Guru Is In
Affordable housing in post-rural America
By David A. Smith
5 min read
To judge by our media, rural America is dead, the District 12 of under-educated and under-sophisticated people whose homespun values are leached into permanently gray landscapes and drawn, sere faces, and from which aspiring idealists escape. That popular view is a cultural outcome of half a century’s continuous urbanization, a half-century that has largely coincided with the rise of the reinvented city that transformed itself from smokestack manufacturing to intellectual metropolis, whose name is its own glamorous brand.
What then is the business model of 21st century rural America? Though you may not realize it, finding the answer is absolutely critical for the affordable housing industry. It stumped me for years, but now I think I’ve figured it out.
As the cities have grown richer and more powerful, the shift in ‘natural’ growth pressurizes the economies of rural areas, with rural jobs disappearing or migrating overseas. And the old rural-economy models are no salvation. Farming isn’t it, for although American farmers (along with Australians) are modern miracles of productivity, that productivity is mechanized, where yields and profits are up even as farming jobs are down. Leisure isn’t it, because leisure is seasonal and while it may spawn resort hotels and time-shares, an empty condo buys no local services, and the jobs made in the leisure industry are in the main low-skill, low-wage, and low-upside. Weekend getaways aren’t it, because the folks that leaf-peep or hike on Saturday afternoons drive back to the city grind Sunday night.
Without a business model to support job growth, there can be no population growth, and with population loss, a place’s residential real estate values can collapse virtually to zero. That may be no problem for a president who’s lived his whole life in high-income cities and enclaves but it keeps two-thirds of America’s governors up at night. Even urban-dominated states have their rural economic laggards, such as upstate New York, western Massachusetts, and the San Joaquin Valley. And if we in the affordable housing and tax credit fields aren’t delivering the goods for the rural parts of states, governors can bend QAPs until we do.
Ironically, the same forces that seemingly devalued place – dematerialization of capital and global banking, the explosion of broadband and the handheld-device revolution of ubiquitous connectivity – offer a new post-rural American alternative.
What has the city got that rural lacks? Infrastructure at scale. Density and diversity of people. Large-scale place-based businesses. Activity. Bustle. Congestion. High rents. Opportunity. Stimulus. Stress. Tiny living accommodations. Unaffordable ownership. All things that hipsters relish, like, or tolerate, and that make trendy HBO dramas.
What has rural got that the city lacks? Affordable homeownership. Convenient parking. Green space and fresh air. Large homes with front yards. Safety and schools to raise children.
Until 15 years ago, however, rural lacked one feature the city had: a window on the global world. Indeed, isolation is the Hollywood paradigm, isn’t it? Uninformed hicks, monoglot hayseeds distrustful of innovation, new culture, and furriners.
No more. In post-rural America all the idea content the city can generate – all the world can generate – is now brought to the living room by iPad, satellite dish, Skype headset, UPS van, and Amazon drone. So if you want to start up an information-based company – software innovation, Web design, biomedical research – you just find yourself a bucolic environment down the road from a university, close to a feeder airport where the 48-seaters shuttle in and out to the mega-airhub … and you’re in business for one-third the housing prices and one-tenth the hassle.
Even as America is urbanizing in macro, the post-rural environment is urbanizing in micro – dispersed smaller towns within a county are consolidating, perhaps even to only the county seat, with everything else village-scale clusters closer in minutes than in miles.
For housing, that means our tax credit sources should flow into developments like these:
- Historic-rehab of derelict century-old downtown icons into job-boosting mixed-use (flats over shops) and mixed-income (ownership, rental, affordable rental).
- Preservation and upgrading (for service enrichment and broadband living) of Section 202 elderly, Section 515 family, and physically obsolete public housing.
- Reinvention of local housing authorities from indentured servants of Panem HUD into post-RAD localized redevelopment authorities.
- Transformation of older residential areas into ethnic ‘landing-pad’ neighborhoods where newcomers from around the world can create Little Cairos, Bogotas, and Hanois on their way to their fondest wish – becoming Americans.
- Deployment of local non-federal, non-cash resources (land priced below market, zoning/ density advantages, real estate tax abatements) into true workforce housing (above 60 percent AMI, below the local market-rent equilibrium) to attract those aspiring Americans – immigrants, urban escapees, young couples who want children that know sidewalks, not subways – to bring their energy, entrepreneurialismand innovation into the reviving post-rural downtown.
Urban redevelopment doesn’t necessarily mean demolition and slum clearance. Instead it should mean what it was intended to mean: jump-starting economic growth in stagnant cities by using government resources to reconfigure property so that walkable neighborhoods are inhabited 24/7. A presidential candidate who articulates that vision of post-rural America would be formidable indeed.
