Rep. Axne Introduces Legislation to Preserve Affordable Housing Options for Rural Communities

Press Release

Earlier this week, Rep. Cindy Axne (IA-03) introduced legislation that will help ensure Iowans in rural communities have access to affordable housing by preserving existing housing options for families.

Currently, the supply of affordable rural housing maintained through the U.S. Department of Agriculture (USDA)'s Section 515 and 514 programs is shrinking due to loans maturing and a lack of new investment -- with no new construction in a decade. The Strategy and Investment in Rural Housing Preservation Act would provide USDA the tools and funding to preserve affordable housing options by restructuring existing Section 515 loans, extending incentives for owners to stay in the program, and providing properties with additional resources to repair and restore homes, while ensuring residents have rental assistance.

The bill is cosponsored by Rep. Emmanuel Cleaver (MO-05), the Chairman of the Housing, Community Development, and Insurance Subcommittee.

"While rising rents are often considered an urban issue, our rural communities are facing the same challenges when it comes to keeping a roof over their heads," said Rep. Axne. "This legislation that I'm introducing today will both protect Iowans who benefit from existing USDA programs and will preserve the affordable housing options available in our rural communities. Continued underinvestment in housing is the last thing our rural communities need, and this bill works to address that for the long term."

Background:

USDA provides affordable rental housing options by making direct loans to developers to finance housing projects for low-income, elderly and disabled individuals in rural communities. As part of this program, USDA also provides Rental Assistance (RA) to tenants, which caps their rent contribution at 30% of their income. However, as property owners pay off those loans in full, they are no longer required to offer affordable rental rates -- and at the same time, tenants living in those properties are no longer eligible for USDA's Rental Assistance. New construction in these USDA programs has been non-existent, and so as loans mature or are prepaid, rural Americans are left with less and less affordable rental options. In order to help address these issues, the USDA created the Multifamily Housing Preservation and Revitalization (MPR) pilot program to restructure loans to extend the affordable use of these properties without displacing tenants and expand eligibility for Rental Assistance.

The Strategy and Investment in Rural Housing Preservation Act will permanently authorize and provide $1 billion in funding for the MPR program, require USDA to come up with a plan to ensure the long-term preservation of rural housing options provided by USDA loans and establish an advisory committee to help USDA implement that plan.

Support:

This bill has the support of the Housing Assistance Council, National Rural Housing Coalition, National Housing Law Project, Council for Affordable and Rural Housing, and Local Initiative Support Corporation.

"Many low-income rural families rely on USDA multifamily housing properties to provide affordable rental opportunities in rural places, and preserving those properties is rapidly reaching a crisis point in many communities. We applaud Congresswoman Axne's leadership on this important legislation to provide USDA with tools to address this crisis," said David Lipsetz, President & CEO of the Housing Assistance Council. "Since its inception in 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. No new construction has been undertaken in a decade. Without action, USDA and the rural families they serve will continue to lose thousands of affordable Section 515 units each year to mortgage maturations. The provisions of this bill would help USDA to address the preservation needs of these critical properties."

"In rural America today there are some 400,000 units of rental housing financed by the US Department of Agriculture (USDA). These units are occupied by seniors, persons with disabilities and families, all with very limited incomes. In many rural communities this USDA financed rental housing is the only affordable housing in town," said Bob Rapoza, executive secretary of the National Rural Housing Coalition. "A recent study by USDA indicated that the 20 year cost to preserve and maintain this rural rental housing totals over $5 billion. For these reasons we support the Strategy and Investment in Rural Housing Preservation Act of 2021 introduced by Rep. Cynthia Axne (D-IA). The legislation establishes important policies to protect tenants and authorizes resources preserve rental housing in rural America. We thank Congresswoman Axne for her leadership on this important issue."

"The Local Initiatives Support Corporation is proud to support the Strategy and Investment in Rural Housing Preservation Act, since we've seen firsthand the hardship caused by losing affordable rental housing in rural communities. U.S. Department of Agriculture financed properties are often the only affordable rental housing in small towns and house some of our nation's most vulnerable residents," said Caitlin Cain, vice president of the Rural Local Initiative Support Corporation. "The resources provided under this legislation will help preserve this critical housing stock while furthering tenant protections. We applaud Rep. Axne for her commitment to Rural America and leadership in affordable housing preservation."

Related Work:

Rep. Axne has made access to affordable housing in rural communities a central focus over the past year.

Last May, Rep. Axne introduced the Protect Rural Renters Act to provide additional support for rural renters through USDA Section 515 and 521 housing programs.

That bill, which provides an additional $100 million for the programs, was included in the American Rescue Plan -- the COVID-19 relief package passed by the House this week.

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