Friday, June 01, 2018

Obstacles to rural housing hurt rural job growth

Rural areas want to attract more workers, but the lack of available housing is putting a damper on such efforts. "Fewer homes are being built per household than at almost any time in U.S. history, and it is even worse in rural communities," Shayndi Raice reports for The Wall Street Journal. "Developers in less populated areas can’t tap into the economies of scale available in urban centers, making materials and labor more expensive. Rural areas are also seeing their populations stagnate or decline as younger people opt for urban living, adding to the gamble involved in speculative building."

Competition for housing sometimes drives up the prices on available houses beyond what local wages can easily support. "It’s a pretty simple equation," Lance George, director of research for Washington, D.C.-based Housing Assistance Council, which works on affordable housing in rural communities, told Raice. "The incomes in this country have not really matched housing prices so you continue to have this disconnect."

Some towns and states are getting creative in solving the problem. Nebraska recently gave rural communities $7 million to build affordable housing to attract more workers. And Newton, Iowa, took out $3.7 million in bonds to fix up dilapidated homes and encourage local development, Raice reports. Since Newton began the initiative in 2014, new housing has increased dramatically: 50 new housing permits have been issued since 2014, up from only eight from 2011 through 2013.

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