Key facts
- Rural rents rose 31.2% between 2000 and 2023, while median rural renter income increased 5.5%.
- Rural home prices grew more than six times faster than homeowner incomes between 2000 and 2023.
- A new MOU between USDA and HUD aims to streamline environmental reviews for rural housing projects.
- The 21st Century ROAD to Housing Act includes provisions to preserve affordable housing and ease development barriers.
- The ROAD Act allows USDA's Section 515 program to retain rental assistance for low-income tenants after loan maturity.
- Rural communities face challenges including financing access, inadequate infrastructure, labor shortages, and zoning restrictions.
The U.S. Department of Agriculture (USDA) and the U.S. Department of Housing and Urban Development (HUD) have signed a memorandum of understanding (MOU) aimed at streamlining environmental reviews for federally funded rural housing projects. This initiative is a tangible step toward implementing provisions of the bipartisan 21st Century ROAD to Housing Act, which seeks to address the growing housing crisis in rural America.
Between 2000 and 2023, rural rents rose 31.2% after adjusting for inflation, while median real income for rural renter households increased by only 5.5%. During the same period, rural home prices grew more than six times faster than homeowner incomes. The ROAD Act includes measures to preserve affordable housing supply and simplify environmental reviews to facilitate rural housing development.
The new MOU specifically targets the duplication of environmental reviews and physical inspections that rural housing developments financed by both departments often face. David Dworkin, President and CEO of the National Housing Conference, stated that each redundant step adds time and cost to affordable housing programs. The agreement seeks to reduce this administrative friction by exploring potential exemptions and allowing one agency to adopt the other's environmental impact statements.
Despite these advancements, rural housing leaders point to persistent barriers beyond administrative hurdles. These include difficulties in accessing financing, inadequate infrastructure, severe labor shortages, and restrictive zoning regulations that hinder large-scale home construction. Jarrod Elwell, Community Development Regional Manager at the Federal Reserve Bank of Richmond, highlighted that rural jurisdictions often lack the staff capacity to pursue government funding, and the loss of local banking relationships further complicates financing access. Developers also face challenges attracting investment due to fewer builders capable of large-scale projects and competition from higher-density markets. A shortage of construction workers and a lack of qualified instructors for vocational training exacerbate these issues. Additionally, challenging topography and limited water and sewer infrastructure restrict development potential in some areas.