General Board Promotes Affordable
Rural Housing
The General Board of Pension and Health Benefits (General Board) helps alleviate a critical and overlooked housing need—affordable housing in rural areas—through its Positive Social Purpose (PSP) Lending Program. The 2009 United States Department of Agriculture (USDA) Progress Report states that approximately 50 million people live in rural areas, and about three-quarters of the United States is rural. Substandard housing is more pervasive in these rural communities due, in part, to long-term population decline.
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Substandard Housing Criteria
- Does not meet current building code requirements or is generally dilapidated.
- Does not have operable indoor plumbing, including flush toilet and bathing facilities.
- Does not have adequate or safe electrical service.
- Does not have adequate or safe heating source.
- Does not have a kitchen including, at minimum, a sink and stove.
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2010 United States Census data shows that in 1920, roughly 50% of the U.S. population lived in non-metropolitan (rural) areas, compared with 16% today. There has been little to no new housing built for decades in many non-metro areas. And as the existing housing ages, it is more likely to fall into disrepair and be classified as “substandard.” A 2010 USDA Economic Research Service study on poverty in the United States found that 16.5% of the population living in non-metro areas was classified as “poor,” yet the need for adequate, affordable housing is growing.
Promoting Affordable Rural Housing
The USDA Rural Development program is one source of funding for rural community development. The program—which promotes economic development by supporting loans to businesses—offers Rural Rental Housing Loans in order to provide affordable multi-family rental housing for low to moderate-income families, the elderly and individuals with disabilities.
Housing developments supported by the USDA Rural Development program often have multiple sources of financing. For example, in 2006, the Riverview Apartment development in Wakefield, Michigan—a rural community located in the Upper Peninsula near the Michigan-Wisconsin border—received funding from the USDA program, the sale of Low-Income Housing Tax Credits and financing from private lenders. The General Board, through its PSP Lending Program, invested in the project through the Great Lakes Capital Fund, a private lender.
Impacting Rural Communities
The Riverview Apartment development has three, two-story buildings with 32 one-, two- and three-bedroom apartments, some of which are designed to be accessible to individuals with physical disabilities and those who are hearing-impaired. The four-acre property is within walking distance of another development, Sunday Lake, that offers Riverview residents access to additional amenities, including swimming, camping, baseball, volleyball, fishing and picnic facilities. Apartments are available only to low-income families earning at or below 60% of the area median income level.
Riverview has had a positive impact on many individuals in the Wakefield community. One woman applied for a Riverview apartment after her son, who is a resident, recommended the development. She searched for a new rental property because she was not able to pay her rent and wanted to be near her son and other family members. The Riverview rent was $200 a month less than her previous rent and her new home was larger and nicer.
Relationships like the one between the General Board and Great Lakes Capital Fund help the PSP Lending Program provide financing to support rural multifamily housing that is affordable, attractive and safe, while earning a competitive investment return. The Riverview Apartments development is another example of the General Board’s commitment to invest in projects that support the values of The United Methodist Church—making a positive social impact on the quality of life for communities and individuals.
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