Affordable Rental Housing in Rural America

A new research note from the Housing Assistance Council (HAC) highlights the need for affordable rental housing in rural America. According to the report, there is a shortage of rental options for people living in rural communities, and as demographic shifts occur, there is likely to be a growing demand for rental housing. Rental housing makes up 28.4% of the rural and small town housing stock, housing approximately 7.1 million households across the country. Rural renters often have much lower incomes than rural homeowners, with nearly one-third of rural and small town renters living below the poverty level, compared to just 7% of rural homeowners. As is true in urban areas, racial and ethnic minorities are more likely to rent than white non-Hispanics in rural areas. Forty-four percent of rural minority households rent their homes, compared to 25% of rural white non-Hispanic households. HAC found that 47% of rural renters experience unaffordable housing cost burden and nearly half of these households actually pay more than 50% of their monthly income on housing costs. According to the research, rural renters are also disproportionately represented among households with multiple housing problems. Renters make up over half of all rural and small town households with the combined problems of cost, quality and/or crowding. The rural housing stock is also unique. Rural renters are much more likely to live in single-family homes or small multifamily structures than in large apartment complexes. Forty-three percent of rural renters live in one-unit single-family homes, compared to 26.2% of renters nationally. HAC also found that manufactured housing units are utilized in rural areas at more than twice the national rate. The authors also spend time discussing the USDA’s Section 515 loan program and the risks facing the properties in this portfolio. The Section 515 program provides more than 400,000 decent and affordable rental homes to low income households in rural America. Owners with projects that received loans prior to 1989 are able to request prepayment of the loan balances and convert the projects into market-rate housing. Over the past decade owners have chosen to prepay the loans on over 50,000 Section 515 rental units, removing the provisions that required the property to be affordable to low income residents. HAC found that 46% of properties with active Section 515 mortgages are eligible to prepay now and a total of 60% will be eligible to prepay in the near future. Access the full research note at