In the world of affordable housing, rural concerns often do not get much attention. But in recent months on May 25 and September 20, a Senate housing subcommittee held hearings on the U.S. Department of Agriculture’s (USDA) rural housing programs. 

And earlier in September, Senators Tina Smith (D-Minnesota) and Jean Shaheen (D-New Hampshire) introduced a bill – the Strategy and Investment in Rural Housing Preservation Act — that would protect rural low-income tenants in USDA rental projects who are in danger of losing their government-provided rental assistance. These tenants tend to be elderly and disabled. Congresswoman Cindy Axne (D-Iowa) introduced companion legislation in the House of Representatives.  

“Without access to housing nothing else in your life works. Not your job, your health, your education, or your family,” Senator Smith, who chairs the Senate Banking Committee’s Subcommittee on Housing, Transportation, and Community Development, which convened the two hearings, in her introduction. “We know that the housing crisis is hurting communities across the country, with many families struggling to find a safe, affordable place to live.”

Several stakeholder witnesses during September 20 hearing focused on the use of USDA housing on tribal lands, rental housing preservation, reforms recommended for USDA guaranteed homeownership mortgages, and the agency’s staffing shortages and outdated technology.

On May 25, the Subcommittee heard from Xochitl Torres Small, USDA Under Secretary for Rural Development, on aspects of the Department’s Rural Housing Service programs that are functioning well and areas needing improvements.

“The Rural Housing Service has the tools to be a partner with [rural] communities—helping an elderly individual repair a family home, supporting a family to purchase their first home, or providing affordable farm labor housing in agricultural communities,” said Torres Small. 

“[But these tools need] … additional resources and authorities to modernize the Rural Housing Service, support staffing to ensure that we are providing top-tier customer service and provide flexibility to allow the agency to adapt in the face of unique challenges.”

The Smith-Shaheen bill aims to fix a looming problem in the USDA-supported Section 515/521 rental housing program. (Section 515 funds apartment construction and Section 521 supports tenant rents in those units.)  

“Since …1963, the Section 515 program has financed nearly 28,000 rental properties containing over 533,000 affordable apartment units, but fewer than 12,900 properties and approximately 370,000 occupied units remain in the program today….,” David Lipsetz of the Housing Assistance Council (HAC) said in a comment on the bill.  

“Without action, USDA and the rural families they serve will continue to lose thousands of affordable Section 515 units each year to mortgage maturations….  [T]his bill would help … address the preservation needs of these critical properties.” 

The bill aims to provide USDA with the tools to keep Section 521 rental assistance available for tenants in privately-owned prepaid or maturing Section 515 properties. An additional part of the problem is that 27,000 units of Section 521 rental assistance will expire at the end of the fiscal year. This funding was provided in the American Rescue Plan Act.

Industry and nonprofit experts on these programs expressed strong support for the bill.  One possible strategy may be to try to include this legislation in the 2023 Farm Bill.

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