Democrats & Liberals Archives

America is in the Midst of a Rural Housing Crisis

For decades, the United States has been in the midst of a housing crisis. Every day, individuals from each and every state struggle to find clean, safe homes and apartments that cost less than 30 percent of their total gross annual income.

The narrative is typically framed in terms of big urban areas, where housing and living costs are rising rapidly, and gentrification pushes long-time residents out of homes and neighborhoods they've lived in for decades. The same is true for suburban areas, who have experienced a tremendous growth in poverty. What few realize, however, is that affordable housing crisis also affects rural America.

A report published this month by the Urban Institute, a Washington D.C. think tank, highlights the problem by ranking the affordable housing needs of rural communities across the United States. The study, entitled Rental Housing for a 21st Century Rural America, analyzed 152 rural counties that have the most-severe affordable housing needs.

There were very specific areas that exhibited a particular need including the southern border from Texas to California, the Southern Mississippi Delta, and the southeast including Florida, Alabama, and Georgia.

Rural counties, which have been defined by the Urban Institute as those that qualify for U.S. Department of Agriculture housing programs, were ranked by seven factors. Those factors included high rates of population growth, high rates of poverty, low vacancy rates and high unemployment rates. Counties who exh ibitedfour or more of these factors were considered to be in severe need of affordable housing.

"It was surprising to see so many rural communities that are struggling with just having very few vacant rental units available, and to see so many rural communities with very few federally subsidized rental units," Corianne Scally, the author of the report and a senior research associate at the Urban Institute told the Huffington Post.

In comparing rural areas to more urban environments, you might expect the reasons for the housing crisis to be vastly different. However, some of the problems are by and large the same.

Today's tenants and aspiring homeowners have a laundry list of issues that can prevent them from finding affordable housing, including an increased cost of living, stagnating household incomes, and gentrification. Many wonder whether it's worth it to rent, or if it's in their best interest to buy. Others wonder if they're ready to purchase homes, given the state of the housing market. They also have to consider situations in which they could lose their housing, including government acquisition of property, eviction, and the threat of foreclosure when faced with financial hardship.

While there are some similarities, there are also significant differences between urban and rural problems with affordable housing.

"Housing issues in rural communities can get overlooked as living and housing costs tend to be lower there than in the cities," writes Huffington Post contributor Laura Paddison. "However, incomes in many of these areas tends to be lower too, especially in areas that used to rely on the coal industry or that otherwise have limited job opportunities."

It's not just stagnated wages that are an issue. Though America has had a recent economic boom and relatively low unemployment for years now, this hasn't translated into a house-building boom. In fact, rates of construction are at record lows even though the demand for affordable housing is high. In rural areas in particular, there are specific obstacles preventing developers from starting construction.

"Developers find it difficult to get financing there," David Dangler said in the same Huffington Post piece. Dangler is the director of rural initiatives at the nonprofit NeighborWorks America. He went on to say "The already limited number of firms specializing in affordable rental housing is even smaller when it comes to rural markets. Rural rental housing developments tend to be significantly smaller than their urban counterparts, and financing is complex."

Additionally, developers note that in rural areas, things like water system infrastructure, electricity, garbage, sewage, and other utilities may not be available in the same capacity that they are in urban environments.

One solution to making housing more affordable in these rural areas is through government assistance. Scally, of the Urban Institute, is calling on lawmakers to allocate more money into building affordable rental housing in these areas.

"We found almost 700 counties with rural communities that had equal to or less than 5 percent of federally subsidized units, so again there just hasn't been much investment in these communities even through standard federal programs," she said.

Another solution, the report suggests, is that incentives be given to developers who operate in these underserved markets, whether that be through technical assistance or financial rewards, since many of these developers work in areas devoid of adequate construction material and labor.

Should Democrats succeed in the midterm elections, there are a number of proposed bills that seek to rectify the affordable housing issue. A number of bills were introduced earlier this year by introduced by Democratic Senators Cory Booker and Kamala Harris.

The most recent bill was introduced in September 2018 by Senator Elizabeth Warren. The American Housing and Economic Mobility Act calls for a half-trillion dollar investment in affordable housing to be allocated over the next decade. This bill would create up to 3.2 million new units for low-and middle-income families. The bill also expands protections of legislation to reduce discrimination in banking, housing, and aims to desegregate neighborhoods.

Warren's bill, for example, would make it illegal for landlords to discriminate against renters with federal housing vouchers and would also impose new regulations on credit unions and nonbank mortgage lenders like Quicken Loans. The bill also aims to incentivize states to rectify any racist and discriminatory zoning restrictions; hopes to ease the path for low-income families to move into more affluent communities; and provides federal assistance to first-time homebuyers from formerly segregated areas and those who saw their wealth decline during and after the 2008 financial crisis.

"Much of the housing discussion has been about affordability, production, and tenant protections, which are all really important issues," Philip Tegeler, the executive director of the Poverty and Race Research Action Council tells The Intercept. "What's so powerful about Warren's bill is that it aims to tackle all those things, and it also looks at how are we going to structure our society going forward. Fair housing is really embedded in the legislation, and that's why I find it so creative."

These bills are all highly dependent on Democrats doing well in midterm elections, or at the very least bipartisan support. Regardless, amidst America's housing crisis, it's going to be important for governments, whether federal, state, or local to intervene.

Posted by DanikaK at October 30, 2018 2:59 PM
Comment #433720

Yup…more free stuff paid for by taxpayers. Wow, am I surprised that Democrats support such legislation.

Bill Clinton helped end “welfare as we know it”. Today’s’ progressives want to bring it back even bigger than before.

More federal government benefits always attracts the “something-for-nothing” crowd.

Posted by: Royal Flush at October 30, 2018 6:52 PM
Comment #433730

Royal, if the market can’t or won’t work correctly what other choices do we have but to get the government involved. This failure of capitalism is embarrassing the richest country ever. New families trying to buy or rent homes in rural areas face high costs and a lack of choice many times. The shortage of affordable housing drives prices up.

Instead of upping the military budget and cutting taxes on the elites we should be investing in the future of this country. The problem in Colorado is developers all want to build luxury houses/condos/ apartments instead of affordable housing for the middle class and working poor. So we either wait around for the lenders and developers to do their jobs or we have bills like the AHEMA to address the problem.

Posted by: j2t2 at October 31, 2018 1:09 AM
Comment #433764
If there is a continuing (lasting two or more years) lack of affordable housing it represents a great opportunity for builders, not government.

It should work, in theory Royal, but when builders/developers don’t or can’t take the opportunity the problem still exists. The market doesn’t always work forcing rents up. Which of course works for those rentiers but not for the people in the rural areas with housing shortages.

Posted by: j2t2 at October 31, 2018 2:53 PM
Comment #433770

Housing builders focus changes regularly…government programs are everlasting.

Posted by: Royal Flush at October 31, 2018 3:17 PM
Comment #433777

Yet the shortages exist, the supply isn’t keeping up with the demand in many rural areas. The consumer pays more for less.

Posted by: j2t2 at October 31, 2018 6:21 PM
Comment #433778

Housing shortages have existed in the past j2t2, were resolved, and will exist again in the future.

No industry reacts immediately to demand…and the federal government is always the slowest, and most expensive to respond to consumer needs.

“The consumer pays more for less.”

What nonsense is this j2t2? What the hell does that even mean?

Posted by: Royal Flush at October 31, 2018 6:26 PM
Comment #433845


I’m guessing developers don’t invest in rural areas because the first mover cost is high. They will build luxury buildings because their clients will pay for those costs; the poor and middle class can’t. They aren’t evil people; they just can’t build at a loss.

We should be looking at what the first mover expenses are and determining the most efficient way to solve that problem. There Is not a uniform cause for these problems everywhere. If we want to solve this we should give the authority, responsibility, and resources to the people closest to the problem to solve it.

That could be a local housing authority, a public works commission, or a county development agency, or even local businesses. If the Dems really want to solve the problem, they should fund a grant program that will allow the locals to propose a solution. The locals should also fund a portion of it to show that they believe in it enough to put their own money in it.

The group that allocates the funds sould also be ruthless. Because not every problem needs to be solved. Most likely, some of those 700 counties should remain on that list because it would cost as much to solve the problems for 1 that it would cost for 15. And the folks that live there will have to be on there own or move.

But this won’t happen because it’s too complicated to put in a sound bite and to bi-partisan to be sexy to either party. This is the way problems used to get solved. But not in the winner take all world we live in now.

Posted by: Rob at November 2, 2018 8:01 AM
Comment #433857

Good response Rob, thanks for your input.

Posted by: Royal Flush at November 2, 2018 5:09 PM
Comment #433956

Perhaps there would be more housing IF houses were not being filled up by tens of millions of illegal immigrants?

Perhaps Democrats could convince George Soros to spend the billion$ for rural housing, instead of billion$ on elections for Democrat politicians?

Perhaps there would be more housing if the federal government had not meddled in real estate, helping in many ways to create the mortgage crisis that collapsed around 2008?

I remember once when I was renting a house in Texas, and the home owner stopped paying the HUD mortgage loan, but was still collecting my rent checks. When HUD finally took the house back, HUD kicked me out of the house, instead of letting me continue to pay the rent to HUD, until the house could be sold. Seems like there would be house rental investors that would be interested in a house that already has a renter living in the house? But no, this is just another example of the stupidity of government-run programs.

One thing that some people fail to learn is that inviting government to meddle in more and more things almost, always, results in a disaster (such as the last mortgage crisis). The meddling by the federal government is already at nightmare proportions.

The federal government already has a Housing and Urban Development department.
So, now we need a Housing and Rural Development department too?

Do we need all of this ?
Perhaps, IF it were not the cost of all the following (bloat and waste of nightmare proportions), there would be more money for people to afford rural housing?

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Posted by: d.a.n at November 5, 2018 10:13 AM
Comment #433959

Perhaps there would be more money for rural housing IF the tax system was more fair (i.e. less regressive), and some other problems (see below) are addressed.
The current tax system is regressive, and has been that way for a long time (since George W. Bush lowered capital gains taxes to ZERO-to-15%).
The problem is that there was not an equivalent tax cuts for the vast majority of Americans who earn income via wages.

Hence, Mitt Romney paid 15% on $21 Million, while a person making $40,000 per year paid about a 32.65% in taxes (i.e. 25% federal income tax, 6.2 Social Security tax, 1.45% Medicare tax), and that does not even include the matching 7.65% (i.e. 6.2% Social Security tax, 1.45% Medicare tax) paid by the employer, which effectively increases the actual tax on employees’ income. Capital gains are not subject to any Social Security and Medicare taxes.

The fact is, the wealthy earn most (if not all) of their income through investments (i.e. capital gains); not via wages and/or salaries.
Why should people with income made via wages and/or salaries be taxes so much more (i.e. up to 44.65% = 37% fed. income tax + 7.65% S.S. & Medicare) than the ZERO%-to-15% tax on capital gains.

Why not that same percentage tax rate on ALL types of income (above the poverty level)?

The last Trump tax cut included a reduction of the corporate tax from 35% to 21% is common-sense, and it was necessary, because high corporate taxes above the global average of 20% was simply driving corporations, jobs, investment, and money out of the country, for several decades. Some will argue that this is a tax cut for wealthy, and there is some truth in that, but it simply stupid to defend a corporate tax rate that continues to drive corporations, jobs, investment, and money out of the country.

The following Trump tax rate changes take effect in 2019:

  • 2017 ____ 2018-to-2025___single____________married
  • 10% _____ 10%________ $0-$9,525 _________$0-$19,050
  • 15% _____ 12%________ $9,525-$38,700_____$19,050-$77,400
  • 25% _____ 22%________ $38,700-$82,500____$77,400-$165,000
  • 28% _____ 24%________ $82,500-$157,500___$165,000-$315,000
  • 33% _____ 32%________ $157,500-$200,000__$315,000-$400,000
  • 33%-35% _ 35%________ $200,000-$500,000__$400,000-$600,000
  • 39.6% ____ 37%________ $500,000+ _________$600,000+
The percentages for the upper-income brackets were reduced 1%-to-2.4%, but 2%-to-4% for the lower brackets. So, that is actually a slightly larger percentage tax-cut for the lower income levels?.
However, when Social Security and Medicare adds another 7.65% (6.2% for S.S. and 1.45% for Medicare) for the employer, and matching 7.65% for the employer, the employee is paying

The tax system is regressive (as shown below).
Most people would agree that a regressive tax system is not a fair tax system?
Sales taxes are almost ALWAYS regressive, because the sales taxes that the wealthy pay are almost always a much smaller percentage of their annual income. The sales taxes paid by the less wealthy are almost always a much larger percentage of their annual income.

The ZERO%-to-15%(max) capital gains tax rate is far below the ZERO%-to-37% taxes on wages (which, again, explains how Mitt Romney paid 15% on a $21 Million annual income, while a person making $40K per year is paying 32.7% (a higher percentage) in federal income, Social Security, and Medicare taxes; and that 32.7% does not even include the employer matching for Social Security and Medicare taxes)?!?

The ZERO%-to-15%(max) capital gains tax rate is far below the ZERO%-to-37% taxes on wages (which, again, explains how Mitt Romney paid 15% on a $21 Million annual income, while a person making $40K per year is paying 32.7% (a higher percentage) in federal income, Social Security, and Medicare taxes; and that 32.7% does not even include the employer matching for Social Security and Medicare taxes)?!?

Due to several factors ((a)maxiumum capital gains tax of 15%, (b)Social Security and Medicare taxes ONLY on wages (not on capital gains), (c)and the $128,400 and $132,900 cap (for 2018 and 2019 respectively) on income subject to Social Security taxes), the U.S. tax-vs-income curve ACTUALLY looks like this (i.e. regressive):

  • CURRENT TAX-RATE CURVE (hammers the middle-class; W=Wage Earners; C=Capital Gains Earners):
  • 45% |_______________________W_____W_____W______________________________
  • 40% |___________________W____________________W_________________________
  • 35% |______________W______________________________W____W____W___W___W
  • 30% |_________W________________________________________________________
  • 25% |_____W____________________________________________________________
  • 20% |__W_______________________________________________________________
  • 15% |_WC___C___C____C____C____C____C_____C_____C_____C_____C____C____C
  • 10% |W__________________________________________________________________
  • 00% |W_80K_160K_240K_320K_400K_480K_…1+ Million __ $INCOME
Therefore, a cut in federal income taxes (i.e. 10% would bring taxes close to a maximum fedral income rate of 27%, which is good, but still higher than the 15% maximum rate on capital gains (since there are still 7.65% taxes included on wages for S.S. and Medicare). To be fair, all forms of income should be treated equally (e.g. 20%-to-22%, or less, if possible, on ALL types of income, above the poverty level).

One certainly has to wonder how the tax system got so regressive. The fact is, IF you believe a FLAT income tax on ALL types of income (above the poverty level) is most fair, then you can only draw one conclusion: The current tax system favors the wealthy, in the sense that they pay a smaller percentage of their income to taxes than the vast majority of people.

A more fair tax system would be a FLAT income tax (which includes all taxes, including income tax, Social Security tax, and Medicare tax) ONLY on all income above the poverty level (poverty level for 2017 is about $12060, $16240, 20240, $24600, $28780, $32960, 37140, $41320 for a household of 1,2,3,4,5,6,7,8+ respectively).
For example, how about a 20%-to-22% FLAT income tax on ALL types of income? It could be a higher percentage, if necessary for a while, due to $21.5 Trillion national debt, but then lowered as much as possible after the debt is reduced significantly.

The federal government would probably get more revenue, since the curve is not regressive (as it currently is as shown in the chart above).
A FLAT income tax curve would look like this:

  • FLAT INCOME TAX-RATE CURVE (more fair; taxes only above the poverty level):
  • 40% |______________________________________________________
  • 35% |______________________________________________________
  • 30% |______________________________________________________
  • 25% |______________________________________________________
  • 20% |____F___F____F____F____F____F____F____F____F____F____F_
  • 15% |__F___________________________________________________
  • 10% |_F____________________________________________________
  • 00% |F_80K_160K_240K_320K_400K_480K_…1+Million __ $INCOME
The wealthy might pay more in total taxes, but they would pay the same 20% as everyone else (only on income above the poverty level).

A more fair tax system (i.e. a flat income tax on all types of income above the poverty level, and elimination if most, if not all tax loop-holes and tax deductions) would billion$ on tax preparation, and would also probably result in less tax evasion.

I am not someone who wants to soak the rich, and I certainly do not believe in a progressive tax system.
However, it is likely that the wealthy would have a difficult time explaining why they think paying the same FLAT income tax on all types of income (above the poverty level), like everyone else, would be unfair.

Some people have proposed a flat sales tax system (i.e. FAIR tax), but don’t be fooled. Sales taxes are regressive. Google “sales taxes are regressive” to understand why. Here is a real world example:

  • Weekly Salary: $300
  • Groceries: $100
  • Sales Tax: $6
  • Percent of Income: 2%
  • Weekly Salary: $1500
  • Groceries: $100
  • Sales Tax: $6
  • Percent of Income: 0.4%
Hence, sales taxes are regressive.
Some people will argue, how is a system that taxes the SAME AMOUNT for each dollar spent not fair?
Well, sure, IF you think every person should pay the same equal amount of tax (not a percentage), then what will that amount be that everyone can afford? And what about other existing taxes:
  • (01) Accounts Receivable Tax
  • (02) Building Permit Tax
  • (03) CDL license Tax
  • (04) Cigarette Tax
  • (05) Corporate Income Taxes (21% in 2019)
  • (06) Dog License Tax
  • (07) Federal Income Tax (0%-to-37% in 2019)
  • (08) Federal Unemployment Tax (FUTA)
  • (09) Fishing License Tax
  • (10) Food License Tax,
  • (12) Fuel permit tax
  • (12) Fuel Taxes (42 cents per gallon for gasoline)
  • (13) Home Property Tax (these are very high in some states)
  • (14) Hunting License Tax
  • (15) Inheritance Tax
  • (16) Interest expense
  • (17) Inventory tax
  • (18) IRS Interest Charges
  • (19) IRS Penalties (tax on top of tax)
  • (20) Liquor Tax
  • (21) Luxury Taxes
  • (22) Marriage License Tax
  • (23) Medicare Tax (1.45% for employee and 1.45% for employer)
  • (24) Real Estate Tax
  • (25) Service charge taxes
  • (26) Social Security Tax (6.2% for employee and 6.2% for employer)
  • (27) Road usage taxes
  • (28) Sales Tax
  • (29) Recreational Vehicle Tax
  • (30) School Tax
  • (31) State Income Tax State
  • (32) Unemployment Tax (SUTA)
  • (33) Telephone federal excise tax
  • (34) Telephone federal universal service fee tax
  • (35) Telephone federal, state and local surcharge taxes
  • (36) Telephone minimum usage surcharge tax
  • (37) Telephone recurring and non-recurring charges tax
  • (38) Telephone state and local tax
  • (39) Telephone usage charge tax
  • (40) Utility Taxes
  • (41) Vehicle License Registration Tax
  • (42) Vehicle Sales Tax
  • (43) Watercraft registration Tax
  • (44) Well Permit Tax
  • (45) Workers Compensation Tax

Some people will argue that the wealthy people spend more, but there is no evidence that the wealthy spend more (and pay more sales taxes, as a percentage of their total income) than the vast majority of tax payers.
The problem is that the sales tax rate would have to be VERY high to fund only 20% of the current level of federal spending.
High sales taxes can also have some very negative results.

Currently, the wealthy pay more taxes than the vast majority of people, but the wealthy pay a lower percentage of their income to taxes (e.g. Mitt Romney paid 15% on $21 Million, but a person making $40K per year is paying 32.7% in income, S.S., and Medicare taxes.
And, there are still a lot of tax loop-holes.
So, the question is, which is the fairest tax system?:

  • (a) a FLAT SALES tax ?
  • (b) a FLAT INCOME tax ?
  • (c) a combination of FLAT SALES and FLAT INCOME tax ?
  • (d) a PROGRESSIVE INCOME tax ?

At any rate, there are lots of problems, but many problems, such as housing shortages, might be minimized IF everyone were taxed more fairly, and had more income, and less taxes, to make housing, and basic living expenses more affordable.

Also, don’t forget, there are tens of millions of illegal immigrants are occupying many houses, getting free education, in-state tuitions, receiving welfare, free healthcare, free housing, foodstamps, 32% of everyone in federal prison is an illegal immigrant (Source: ); and the estimated annual net losses due to illegal immigration is about $297 Billion (Source: ).

So, there are solutions. But is there sufficient will to make changes?

Posted by: d.a.n at November 5, 2018 2:39 PM
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