Senate Housing Subcommittee Hosts Hearing on USDA’s Rural Housing Service

The U.S. Senate Committee on Banking, Housing, and Urban Affairs’ Subcommittee on Housing, Transportation, and Community Development held a hearing, “Examining the U.S. Department of Agriculture’s Rural Housing Service: Stakeholder Perspectives,” on September 20. Witnesses included Elizabeth Glidden (deputy executive director of the Minnesota Housing Partnership, an NLIHC state partner), Marcia Erickson (CEO of GROW South Dakota), Tonya Plummer (director of Native American housing programs at Enterprise Community Partners), and David Battany (executive vice president of capital markets at Guild Mortgage Company, speaking on behalf of the Mortgage Bankers Association). Witnesses discussed ways to improve the Rural Housing Service (RHS), including ideas about how to increase staff capacity, invest in technological advancements, and improve Section 515 mortgages by decoupling rental assistance.

Senator Tina Smith (D-MN) opened the hearing by highlighting the important role of the U.S. Department of Agriculture (USDA) Rural Housing Service (RHS) in supporting the development of single- and multi-family housing in small towns and rural places across the country, which face unique challenges when it comes to developing and financing housing.

Elizabeth Glidden discussed the importance of USDA’s Section 515 program, which makes direct loans to developers to finance affordable multi-family rental housing for very low-income, low-income, and moderate-income families, for elderly people, and for persons with disabilities. Glidden recommended Congress take action to decouple rental assistance from USDA mortgages and increase funding for the USDA’s RHS programs. Notably, Senators Smith and Jeanne Shaheen (D-NH) introduced a bill addressing this issue the day before the hearing. The “Strategy and Investment in Rural Housing Preservation Act” (S.4872) would require properties seeking to decouple to adhere to certain conditions, such as signing a restrictive use agreement and multiyear rental assistance contract. Representative Cindy Axne (D-IA) introduced companion legislation in the House by the same name (H.R. 1728). NLIHC has endorsed both bills. (See the preceding article in this issue of Memo for more information about the bill.)

Marcia Erickson highlighted the fact that Section 515 properties are often the only decent affordable housing options for rural families. As she explained in her testimony, “tenants in Section 515 properties have an annual average income of only $14,665, with many units occupied by seniors and people with disabilities.” Erickson said RHS program participants also struggle with delayed response times as RHS agents are overwhelmed by demand.

Tonya Plummer further advocated for improvements to RHS, urging Congress to fully fund the agency so that it can meet the unique needs of rural and tribal communities, while using a nuanced approach for tribal lands and recognizing tribal sovereignty. Plummer stressed the need to invest in more staff, increased training, and up-to-date technology to improve the effectiveness of RHS housing services.

View a recording of the hearing and the witnesses’ testimony at: https://bit.ly/3feXXbO

Learn more about USDA’s Rural Rental Housing Programs on page 4-81 of NLIHC’s 2022 Advocate’s Guide.