Why I think Rural Communities need Rehab Housing Programs

November 19th, 2008 by

I’ve been talking to a lot of people here at the SDHDA’s Annual Housing Conference about Northeast Housing Initiative’s Rehab Program.  The conversation turned to why I’m so passionate about rehab housing programs.  In case you’ve missed it, I believe South Dakota’s rural communities could really benefit from a rehab housing program, and here are my reasons why. 

  1. It helps prevent people from living in substandard homes. Way too often people, who can afford a $60,000 house, settle for a lesser quality house because that’s what is available in the community at the time. The house may be priced at around $45,000, but needs an additional $20,000 – $25,000 in renovations. The homeowner moves in with the intent of taking on the renovation sometime in the future, but for this reason or that, the improvements never happen. Maybe the homeowner couldn’t acquire the remodeling loan. Maybe they couldn’t figure out how to do the renovations while living in the house. And maybe, the money they’d intended to spend on renovations was eaten up by the high energy costs of living in a poorly insulated house. What’s scary is that while living in the house the homeowner exposes his/her family to the hazards of lead-based paint, poor electrical wiring, or a leaking roof.
  2.  It makes homeownership possible for more people. I hope everyone understands how the Northeast Housing Initiative’s program works: They provide gap financing to income qualifying individuals. Specifically, this means NEHI provides a loan of 20% of the purchase price as down-payment assistance. This enables the bank to loan the remaining 80%. Because NEHI’s loan is a 0% interest, zero payment (during the life of the first mortgage), more families are able to qualify for purchasing a house. And since the NEHI has rehab standards, we know the homeowner is not living in a substandard home.
  3. It’s good economic development for rural communities. It’s no secret our rural communities need residents. Often economic development focuses on job development – which is good – but we have to recognize economic development isn’t just about jobs! In many ways a rehab housing program, based on the NEHI design, is really an economic development incentive that can be used to attract people to our rural communities. And I highly recommend communities develop a “people attraction” strategy as a part of their economic development plan.
  4. It’s a beautification program. Driving through the older housing neighborhoods in rural communities can be very depressing. Empty houses, overgrown grass, and junked cars, leave the impression of hopelessness. At times communities attempt to address the situation by tearing down the junk houses with the city taking ownership of the newly vacated lot. The dream is that someday, someone will buy and build a house on the lot. Dreams, however, seldom materialize without a plan and some hard work. A rehab housing program is a program that could help that dream become a reality before the housing deteriorates to the point of needing to be torn down.

I realize a rehab housing program won’t save any rural community, but I definitely believe it’s part of the answer.  Whether you agree or disagree, I hope you’ll share your thoughts so that we can build a dialog.

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Posted in Community Development, Housing, Rural, Training and Events | Comments ( 3 )

3 Responses to “Why I think Rural Communities need Rehab Housing Programs”

  1. Joe Bartmann Says:
    November 24th, 2008 at 2:03 pm

    Mike is right on, and there are at least two more great reasons to consider rehab as a housing strategy. The beautification doesn’t stick only to the rehab homes–it becomes contagious and spreads around. Soon, the whole neighborhood is painting and trimming and cleaning up.

    Rehab, if done right, can also be a ‘greener’ strategy compared to new construction. You’re reusing a lot of materials, and not tearing up more land for development.

  2. Mike Knutson Says:
    November 24th, 2008 at 2:30 pm

    Thanks Joe. Anyone interested in learning more about “greener” rehab, should check out the Enterprise Foundation’s “Green Communities” program. (http://www.greencommunitiesonline.org/). Maybe an innovative community or organization can connect the Neighborhood Stablization Program, Green Communities, and rehab housing.

  3. echo dahl Says:
    May 6th, 2009 at 12:58 pm

    This is such a real issue. One I doubt many people know about. I have been trying to form a plan to create a non-profit to solve problems such as the ones you address here. My grandparents are my own personal catalyst. I’m currently searching for hard data with regards to current living conditions in rural communities.

    Another issue no one has yet mentioned is that when older folks are allowed to embrace their independence in their own homes, they often live much longer.

    I would love to have the opportunity to collaborate with others on this topic. If there’s anyone out there willing to do so, please feel free to contact me, and by all means, visit my website!

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