The U.S. Senate Committee on Banking, Housing, and Urban Affairs’ Subcommittee on Housing, Transportation, and Community Development held a hearing, “Rural Housing Legislation,” on May 2. Senator Tina Smith (D-MN), chair of the Subcommittee, highlighted her “Rural Housing Service Reform Act” (S.1389), which would allow rental assistance to be “decoupled” from properties with maturing U.S. Department of Agriculture (USDA) mortgages, among other provisions. Rural housing experts testified regarding the impact of the legislation, the challenges facing rural renters, and the implications of the maturing mortgage crisis and lack of rural renter protections. Witnesses included Anne Mavity, executive director of the Minnesota Housing Partnership and NLIHC board member; David Lipsetz, president and CEO of the Housing Assistance Council (HAC); Natalie Maxwell, managing attorney at the National Housing Law Project (NHLP); Christopher Potterpin, president of the Council for Affordable and Rural Housing (CARH); and Dianne Hunt, president of Syringa Property Management.
Subcommittee Chair Tina Smith (D-MN) opened the hearing by emphasizing the lack of housing in rural communities and the need to pass the “Rural Housing Service Reform Act” to support rural residents. “We have a serious shortage of housing in this country, especially in those communities,” said the Chair.
In his statement, David Lipsetz endorsed the “Rural Housing Service Reform Act,” especially the bill’s proposal to slow the loss of rental units in the Rural Housing Service portfolio. Of the 530,000 units created by the program, more than 180,000 units have been lost. Lipsetz cited a HAC report auditing the physical condition of the Section 515 housing stock, explaining that “the report showed a multibillion-dollar backlog in roof repairs needed, window repairs, and all manner of upkeep for the properties.” If enacted, the bill would permanently establish the Multifamily Preservation and Revitalization Demonstration (MPR), and Multifamily Preservation Technical Assistance, which would help address these repairs and preservation needs. Lipsetz concluded his opening statement by noting the lack of investments in rural communities compared to suburban and urban centers: “In a nation united by the belief that people are created equal, a set of federal policies that systematically focuses on some places, while ignoring the needs of others, is going to drive economic, social, and political problems that we ignore at our peril.”
Anne Mavity, executive director of the Minnesota Housing Partnership and NLIHC board member, stated that Minnesota “leads the nation in the number of Section 515 properties exiting the program” and warned that as more properties leave the RHS portfolio, seniors and people with disabilities across the country are at risk of losing their housing. Mavity supported the Chair’s “Rural Housing Service Reform Act” and applauded the bill’s actions to improve the MPR preservation and technical assistance programs. The bill would make permanent the Native CDFI Relending pilot program and improve staff training and capacity within RHS. Mavity also supported the decoupling provisions in the bill, especially conditions on decoupling such as “permitting extension of a Rental Assistance contract for a decoupled property for 10 to 20 years subject to requirements that the property is maintained as decent, safe, and sanitary and rents remain restricted, among other conditions.”
Christopher Potterpin, president of CARH, spoke of the urgent need to assist low-income rural renters by decoupling rental assistance from properties with maturing mortgages (those leaving the USDA portfolio). “The lack of affordable housing reflects the lack of investment in these localities more broadly. Rural renters are more than twice as likely to live in substandard housing, and with lower median incomes and higher poverty rates than homeowners, many renters are simply unable to find decent housing,” said Potterpin. The Council for Affordable and Rural Housing also endorsed Chair Smith’s “Rural Housing Service Reform Act” and endorsed improvements to the Low-Income Housing Tax Credit program, as proposed in the “Affordable Housing Credit Improvement Act.” (See NLIHC’s LIHTC recommendations here.)
Natalie Maxwell, managing attorney with NHLP, noted that housing and rental assistance provided by the Rural Housing Service “has historically been a critical source of safe, decent, affordable housing” in rural communities, but the number of units poised to exit the housing portfolio “threatens to upend the lives of the more than 560,000 renters who call Section 515 apartments home.” Maxwell also drew attention to the Section 515 program’s lack of flexibility. The subsidy amount never changes, and the families are required to pay the difference if their landlord increases rent or if the family has to move to a more costly unit. “Congress can, and must, do more to preserve these properties for families living in poverty,” said Maxwell.
When asked to speak on how reducing restrictive regulations increases the supply of multi-family housing in rural communities, Dianne Hunt focused on the tenant perspective, stating that “we need a way to keep the tenants in their homes.” In response to a question from Senator Fetterman (D-PA) about holding the program to a high standard, Natalie Maxwell noted that the “Rural Housing Service Reform Act” would stabilize families living in housing with matured mortgages who would be susceptible to losing the unit. Under the current model, the value of a USDA voucher is set at the time it is awarded and does not adjust based on income or other factors.
NLIHC supports the “Rural Housing Service Reform Act” and echoes Anne Mavity’s statement: “Like the air we breathe and the water we drink and the food that sustains us, a home is among the most basic human needs that we all have in common.” Congress should pass this legislation to more effectively serve low-income rural renters.
Watch a recording of the hearing and read the witnesses’ written statements at: https://tinyurl.com/322v8eu4