Ensuring Equity in Rural America: 

State CED Associations Play Critical Role

 

State community economic development associations ensure that federal and state public and private sector resources reach low-income people in rural communities.  Through their board, staff, and member leadership they ensure that legislation and programs designed to build homes, create jobs, or provide services are able to work in rural communities.

 

Without state associations, rural communities are often isolated from community development resources and other professionals for a number of reasons.  Travel is a major barrier to networking and resource access.  In addition, resources are much lower than comparable urban areas.  Banks are less likely to invest because the Community Reinvestment Act does not apply in the same way to non-census tract areas.  There are few foundations or United Ways that serve or assist rural areas.  Churches in rural communities tend to focus on individual charity rather than structural approaches to poverty alleviation.

 

Fortunately, state associations can bridge that gap by ensuring that state policies and programs reach rural America and increase the capacity of staff.

 

Recent legislative initiatives led by state CED associations to assist rural communities include: 

 

Ø      The Maryland Center for Community Development (MCCD) worked with the rural legislative delegation to push the Administration to avoid damage to rural areas by state Smart Growth policies.  One specific issue was the Administration’s decision to eliminate CDBG and HOME spending in rural areas even for rehabilitation, unless the area was in a smart growth priority funding area.  They argued that this proposal was discriminatory because entitlement counties can spend their CDBG and HOME outside of their smart growth priority funding areas if they want to.  However, non-entitlement areas have to apply to the state for CDBG and HOME.  The Administration agreed to change their program rules to accommodate this problem, so rural houses needing repair will be able to get funds.

 

Ø      Maryland increased housing counseling services in rural areas of the state, because statistics show that low-income buyers are more stable if they receive home buying counseling.  In their state, many first-time buyer products now require counseling.  MCCD helped the state to receive HUD housing counseling funds, and targeted them to the rural counties that it could document were under-served for nonprofit counseling services.  MCCD also provided accompanying technical assistance to the designated nonprofit groups to increase their capacity.

 

Ø      The Ohio CDC Association (OCDCA) created the Ohio Finance Fund, a community development financial institution.  The Fund levels the playing field for rural and urban groups in the area of pre-development and linked deposits.  The association also actively supported CHDO operating funds for rural groups and helped extend it for eight years.  In crafting its tax credit bill, it advocated for a 70 percent tax credit for rural areas and 50 percent for urban areas to help bridge the financing gap found in rural areas.

 

Ø      The federal Rural Development Program and Rural Housing Program was being underutilized in Rhode Island until the Affordable Housing Network of Rhode Island began providing housing counseling training.  One hundred and fifty people in rural areas graduated from the state’s housing program, and sixty are already homeowners. 

 

Ø      The Tennessee Network for Community Economic Development (TNCED) serves as a statewide intermediary.  It raises loan funds from larger banks for smaller rural areas in partnership with micro-enterprise programs.  It also provide training to eleven rural programs.  TNCED also manages eight rural Individual Development Account programs which create a way for low wealth individuals to purchase homes in their local community, start businesses which may grow to employ others thus creating much needed employment opportunities, and increase the potential earnings potential of the Savers.

 

State community economic development associations also seek to provide training to increase the capacity and skill level the staff of rural CDCs:

 

Ø      The Affordable Housing Network of Rhode Island partnered with four rural members to coordinate the homebuyer education/counseling classes/clubs offered in those areas.  The Network provides downpayment/closing cost assistance through its statewide pot. 

 

Ø      In Ohio, 77 of the 216 participants in its Basic Skills program since 1992 have come from rural areas.  The OCDCA trains rural community action agencies in the area of micro-enterprise and Individual Development Accounts as well.  Of seven Assets for Independence sites, four are in rural groups.  It also provided funding in a privately funded IDA demonstration to a rural CDC in Athens.

 

Ø      The Maryland Center for Community Development recently was awarded a $20,000 contract from the state to provide focused services to the rural areas of Maryland.  The Center will provide outreach to assess organizational needs, sponsor three workshops, and provide one-on-one technical assistance to a set number of groups, and create the ability to do peer networking through our website.

 

Ø      The West Virginia Community Action Directors Association assists small communities through the Rural Community Assistance Program that employs five professional development specialists.  In Year 2000, over $7 million funding was influenced and over $1 million directly leveraged for small community infrastructure development.

 

Despite their impressive work, there are still challenges.  In Tennessee, it has been extremely difficult for rural housing development programs to operate.  In response, rather than allocating resources to assist them, the state housing finance agency is now allowing urban housing development programs to compete to serve rural areas, thus making it more difficult for rural programs to survive.  In other states, tensions between rural groups and urban groups, or the predominance of urban groups, threaten the entire community economic development industry.

 

However, the existence of state associations with active members from across the state can lead to better policies for CDCs in rural and urban areas.  For more information on state community development associations, please contact Carol Wayman (202) 289-9020 x112.