To Move or to Improve?

Posted by Bill Bynum on November 10, 2016

During a recent national housing conference, a senior HOPE colleague, along with an architect and the mayor of a small Delta town—having won a slot through a rigorous application process—presented a plan to resurrect a failed affordable housing project in the Mississippi Delta. The overwhelming response to the proposal was quite disconcerting, with comments such as “It would be a waste," "The people should move," and "It’s not just better housing they need, it’s access to health care, quality education, and healthy food.” Most comments were consistent with an all-too common lack of understanding of development needs in rural areas.

In response to the negative reaction: yes, of course there are challenges beyond housing in the Delta, but these are challenges that need to be addressed where people live.

Unfortunately this “move them somewhere else” attitude is not limited to a single conference.

What it ignores is the deep-seated connection people have with their place. It ignores the investment people have made over generations in purchasing land and homes—even if those homes need significant improvement. It ignores the relationships and familiarity that are vital to one’s sense of belonging. If we truly believe in equality of opportunity, then this must include the rural places, too, which many of us have clearly given up on.

HOPE got involved in revitalizing the housing project described above after we opened a credit union branch nearby. Our project team includes neighborhood association leaders, elected officials, an architect fulfilling a Rouse Fellowship, the Mississippi State University School of Architecture, and the Delta Regional Authority. The development is a mile from a community college and sits near an empty, but viable, industrial building. There is capacity and commitment in this place.

The homes are a mix of owner-occupied and rental units and provide tremendous opportunity for moving people from substandard housing into solid, safe, aesthetically-pleasing places where they can build a future. The financing will come from a mixture of public and private sources.

During two decades of generating more than $2 billion in financing to address development needs in the Delta region, including more than 1,500 affordable housing units, we’ve learned a lot about affordable housing in rural areas.

Some of the most important lessons include:

Lack of private capital. Rural residents suffer from a severe lack of private capital needed to finance all types of affordable housing. In the absence of capital, local people are more likely to live in substandard housing or pay predatory rates for mortgages. In Sunflower County, where our latest project is located, more than 36 percent of the home loans made in 2014 were among the highest rates in the state.

Lack of public capital. Some states, including Mississippi, dedicate no state funding to affordable housing. Mississippi is also one of only four states in the country without a Housing Trust Fund. The funding environment underscores the importance of the federal government in financing affordable housing.

The effects of persistent poverty. Mississippi and Louisiana are the only two states in the country where at least half of the counties are persistently poor. Nearly all of them are rural. Twenty-four of the 100 poorest counties in the country—all rural—are located in the Mid-South. The deep poverty means that one out of four Mid-South rural and small town households are cost-burdened.

As a result, there is an ongoing need to subsidize the development of affordable housing. Wages in our region simply aren’t high enough to support the rents needed to make housing projects viable, particularly in rural, persistently poor counties.

Looking Ahead
We can do things to address these challenges, and so we should. The U.S. Department of Agriculture recently took the bold step of making $500 million available for community lenders to finance community facilities (schools, health clinics, municipal projects, etc.) in rural, high-poverty places. Most of the lenders will be community development financial institutions (CDFIs) with track records of investment in poor rural areas. 

A similar approach should be taken by HUD. Low Income Housing Tax Credit allocations, for example, should be increased and prioritized for persistent poverty counties. Federal grant dollars should also be made available to strengthen the balance sheets of CDFIs with the proven capacity to leverage public and private dollars for viable affordable housing projects. Finally, projects that integrate with comprehensive community plans to create jobs, enhance access to fresh food, health care, and financial services merit priority in the allocation of public and philanthropic resources, particularly in persistently poor areas.

To reduce solutions to poverty to a simplistic “they should move” paradigm demonstrates an offensive ignorance of people and place. As community development practitioners, we must engage in our work in a manner that values the dreams and dignity of all people and all places.

(Image: The town of Moorhead, Mississippi, courtesy of Hope Credit Union)

About the author more »

Bill Bynum is chief executive officer of HOPE, a credit union (Hope Credit Union), loan fund (Hope Enterprise Corporation) and policy center (Hope Policy Institute) dedicated to improving lives in one of the nation’s most persistently impoverished regions. Since 1994, HOPE has provided financial services, leveraged private and public resources, and shaped policies that have benefited more than 650,000 residents in the Delta and other distressed parts of Arkansas, Louisiana, Mississippi and Tennessee. For more than three decades, Bynum has worked to advance economic opportunity for disenfranchised populations. He helped to establish Self-Help, a pioneer in the development finance industry, and later built nationally recognized programs at the North Carolina Rural Economic Development Center. A recipient of the Aspen Global Leadership Network John P. McNulty Prize and University of North Carolina Distinguished Alumnus Award, Bill has advised several U.S. presidents on financial service matters, and served ten years as chairman of the Treasury’s Community Development Advisory Board. He currently chairs the Consumer Financial Protection Bureau’s Consumer Advisory Board and is a member of the U.S. Partnership for Mobility from Poverty, funded by the Bill & Melinda Gates Foundation.

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