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Self-Help Builder News June 2012 Volume 5, Issue #2 >
Census hits hard on rural eligibility
By Stanley Keasling, RCAC chief executive officer
When USDA certifies the census, something that will happen before the start of the new fiscal year, a host of communities that have been eligible for rural housing programs will no longer be eligible. Over 500 communities across the country, and at least 162 in the RCAC service area, will have populations that exceed the limits in the housing act.
The greatest impact will be on communities in metropolitan areas, where the maximum community size is limited to 10,000 people except for a provision called the “grandfather clause”. This clause essentially says that as long as a community in a metropolitan county does not exceed 20,000 population then it will remain eligible for rural housing programs until the Secretary certifies the 2010 census. Once the certification takes place, the population limit goes back to the law, 10,000 people. Needless to say, there are many folks anxiously looking for a way to keep the communities they have been working in eligible for rural housing.
Our best chance of fixing this problem is in the Agriculture Appropriations bill. The Senate appropriations subcommittee has included language that would simply continue the eligibility of any community that was eligible last fiscal year for Federal Fiscal Year 2013. According to the National Rural Housing Coalition (NRHC), there is a good chance this provision will be included in the continuing resolution even if the president has not signed the appropriations bill by October 1.
Tammye Trevino recently met with the NRHC board, and she suggested a second possibility to the NRHC board. The administration could certify the Census, but rather than making the change at the beginning of the fiscal year, give the state offices six months to put the new population limits into effect. A third possibility is a bill introduced by Representative Fortenberry, HR 273, which would also extend the grandfather clause, but would restrict eligibility to communities under 20,000 people.
None of these strategies is really a solution to the problem we face. Bob Rapoza at NRHC believes that if the Senate appropriations language is approved, then it will continue every year going forward. However, RCAC may become the only organization willing to lend new subdivision money in a community perpetually on the cusp of ineligibility. On the other hand, this solution may work in the short-term for those who own already-developed land.
The Agriculture Department has proposed in the Farm Bill to expand the rural definition to include all communities with populations less than 50,000. If this becomes law, and if the House Banking Committee adopted the Ag Bill language, we will likely find ourselves fighting to make sure that larger communities do not divert all of the resources from small rural communities.
It does not appear that the House and Senate will agree on an Ag bill this year however. And, we likely will not know about the extension of the grandfather clause until September 30 when the first continuing resolution needs to be passed to keep the government operating. I remain reasonably confident that we will find a solution.