By BEVERLY ANN FLEMING

The state of rural housing in Illinois

Rural Illinois has housing problems every bit as pressing as the state's urban areas. Rural elderly, minorities and the poor live in inadequate housing and have, until recently, found repair loans extremely difficult to obtain

STOP the average Illinois citizen on the street and ask where the state's worst housing is located. The answer — usually — will be either Chicago or East St. Louis. Yet a 1979 ranking of the state's counties by percentage of housing need gives a different answer. According to County Household and Housing Profiles prepared by the University of Illinois at Urbana-Champaign for the Illinois Department of Commerce and Community Affairs, of the 40 counties with the greatest housing need, all but three were rural (72 of the state's 102 counties can be classified as rural). Cook County (Chicago) was ranked 19th and St. Clair County (East St. Louis) was 39th. The third urban county was Vermilion (Danville), ranked 33rd, but it is still predominantly rural.

Rural Illinois has some of the state's oldest, run-down and ill-equipped housing. And although rural Illinois is home for 1.8 million of the state's population, its housing needs are generally overlooked or overshadowed by those of the urban centers. Several federal, state, and local agencies are striving to alleviate the housing problems of rural Illinois, but only the Illinois Farmers Home Administration (FmHA) focuses specifically on the needs of rural Illinois. All of these agencies operate their own programs, and in addition, several of them cooperate in a joint rural housing and community development demonstration program known as the Illinois Areawide Project.

The housing problems of the rural counties differ in several ways from those of the urban centers. In sheer number there are more households inadequately housed in urban than in rural areas. But the proportion of the total rural population inadequately housed is much greater than the proportion of urban households. Driving through the Illinois countryside, one is struck by the contrast between the houses. Classic white-pillared farmhouses alternate with ramshackle dwellings with sagging roofs and junk-filled yards. Why?

In urban areas the primary housing problems are high rents and purchase costs. In rural areas, although cost is often an issue, substandard quality is a more important problem. More than twice as many (5.9% versus 2.3%) rural than urban dwelling units have deficiencies: inadequate plumbing, heating, and/or kitchens. The only physical measure of housing unit deficiency that is worse in urban counties than in rural is overcrowding, and here the difference is only 9/10 of 1 percent. The general condition of neighborhoods is another measure where urban areas are less satisfactory than rural ones, although this is difficult to determine with any precision.

The reasons

Why is a greater proportion of rural housing physically deficient? Rural housing is often much older than housing in urban areas; 59 percent of the housing in rural counties was built prior to 1939 as compared to 42 percent of the housing in urban counties. Houses that would have been condemned as health or safety hazards in urban areas remain standing and occupied in rural areas because of the difference in housing code standards or the laxity of housing code enforcement.

Rural households do not usually have the income to maintain older houses or buy new ones. So they make do. Unemployment is higher in rural than urban counties, and almost twice as many rural county families live below the poverty level than do urban county families. Loans to fix up or buy housing are often hard to obtain in rural areas; local lenders have limited resources and big lenders from urban areas are loathe to make long-distance loans. When it is available, credit often becomes unreasonably expensive.

A declining tax base, the need to accommodate growth, pressure from state and federal government to protect the environment, and an increasingly dependent population (a high percentage of elderly and low-income families) drastically crimp the ability of rural municipalities to provide housing. There are only a few public programs (those of the FmHA mainly) that provide housing assistance and credit in rural areas, and there just isn't enough money to go around. FmHA always has a large backlog of applications for its housing programs.

Rural communities not only lack financial resources, but they are also short on the expertise necessary to use available resources. Public officials are usually part-time and unsalaried, and they don't have the time or knowledge to develop housing programs. Apathy, if not outright resistance, in rural communities to government interference is another problem. The isolation -physical and psychological — or rural communities is difficult to penetrate by outsiders.

New construction housing economies also work against rural areas. Population is dispersed and large-scale concentrated housing projects are impossible. Yet this is the type of housing that is most economical to produce.

One solution to the high cost or lack of labor and materials in rural areas is the use of pre-fab rather than 'stick built' housing

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Shown above are one- and two-bedroom apartments for families completed in 1979 in Dixon through FmHA funding.

FmHA Award Winning Housing Above and to the left are Lake Matherville Manor in Matherville, located in Mercer County. The project was the FmHA top award winner in the 1st Annual Program To Recognize Excellence. Below is family housing completed in 1978 in Pittsfield, located in Pike County.

For example, the Illinois Housing Development Authority (see June Illinois Issues), the state's subsidized housing finance mechanism, usually builds projects of 100-plus units — far too large for many rural communities. And the frequent absence of public water and sewer services complicates the site selection of any new construction. Because of sparse settlement patterns, materials and labor must move great distances, which, of course, drives up costs.

One solution to the high cost or lack of labor and materials in rural areas is the use of pre-fab rather than "stick built" housing. According to Dana Schneider, general manager of Best Industries (the state's largest supplier of pre-fab housing), a single-family $35,000-40,000 home (1,000 sq. ft.) can be placed on site and finished in 45 days with only two carpenters and four helpers. Best housing is one of about 18 companies with approved models on the Illinois FmHA single-family register of accepted manufactured housing. And a significant percentage of 502 construction (see box) is of manufactured homes.

Some existing rural housing is in such poor condition that spending large sums of money on rehabilitation would be foolish. Yet rural owners often have strong attachments to their homes and land and are unwilling to move. The quintessence of this quandary is Future City, an unincorporated community just outside Cairo. Home for 53 black families, this community has an antiquated water system (built in 1904), no sewer system and sits in the middle of a floodplain. Very little of the housing may be salvageable. Future City was founded at the turn of the century in response to racial tensions in Cairo. The majority of its residents are elderly and have lived most of their lives there. Despite the conditions, they are adamant about remaining even if better housing were available. However so humble, Future City is still home. The pragmatic course would be to bulldoze everything and start anew. But pragmatism counts little when the family homestead is in question.

The characteristics

There are four other distinguishing characteristics of the rural housing problem in Illinois.

1.  While a greater proportion of tenants, as opposed to homeowners, are inadequately housed in urban areas, the reverse is true in rural areas. There, it is the homeowners, not the renters that are poorly housed, largely because homeowner households outnumber tenant households three to one in rural areas. There is a severe scarcity of rental housing in rural Illinois.

2.  Compared to the total population, the number of elderly in rural areas is very high. According to a 1978 Illinois Department of Local Government Affairs report, Housing Problems in Illinois, 22 percent of the state's elderly live in rural areas. But this group represents 35 percent of all

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rural households. The economic decline of most rural communities following WWII forced the young to migrate to urban centers; a disproportionate number of elderly were left behind. Many of these elderly citizens are homeowners who would like to move into rental housing if such housing were available.

3.  Only about 3 percent of Illinois' minority population lives in rural counties, mainly in southern Illinois counties. Yet according to the report cited above, the percentage of poor housing among minorities, particularly blacks, is higher in rural areas than in urban areas. A full 56 percent of black homeowners in rural areas are inadequately housed, as opposed to 15 percent in urban areas. And 73 percent of black renters in rural areas are inadequately housed, as opposed to 57 percent in urban areas. The black elderly are the most ill-housed group in rural areas: 69 percent, compared to 35 percent of the white elderly.

4.  Each year, says the Illinois Migrant Council, approximately 35,000 migrant farm workers and their families settle temporarily in the state's rural counties. They usually come from Mexico and Texas to do harvesting, corn detasseling, nursery and cannery work in central Illinois. In addition, a significant number of poor Appalachian whites and blacks live in southern Illinois and make their living from seasonal work. The housing needs of the farm worker in Illinois are often neglected, although the Illinois Department of Public Health must inspect farm labor camps for compliance with 1972 state regulations. Nancy Hernandez, housing specialist for the Migrant Council, says that the present state standards are minimal. These standards ignore weather conditions, assuming that migrant housing will be used only in warm-weather months. In actuality, the camps are often in use seven months of the year. Waste disposal is a big problem, and sanitary facilities are nowhere near adequate. Because of their supposedly temporary nature, there is no running water inside the units. Camps are not landscaped and with the slightest rain turn into large mud pits.

A number of public and private, nonprofit agencies are working independently and cooperatively to solve the housing problems of rural Illinois. As the following descriptions indicate, there have been some encouraging successes.

Most housing programs of the U.S. Department of Housing and Urban Development (HUD), the Illinois Housing Development Authority (IHDA), Illinois Department of Commerce and Community Affairs (DCCA) and local housing authorities are not available to rural areas to the same degree as they are to urban areas. Under the federal Housing and Community Development Act of 1974, however, 20-25 percent of HUD's subsidies for public housing and the Section 8 rental assistance program must be used in nonmetropolitan areas. The major national rural advocacy group, Rural America Inc., argues that the percentage should be raised to 50 percent in order to match the proportion of need.

The HUD program

Those who are black and elderly are the most ill-housed group in rural Illinois. The housing needs of farm workers have also been neglected

Probably the most valuable HUD program to rural communities is the Community Development Block Grant Program which can be used to finance the water and sewer systems badly needed in many rural areas. In 1975 HUD instigated a Small Cities Program aimed at small rural communities. According to DCCA, this program appears to favor larger communities.

The major provider of capital for housing in rural areas is the Farmers Home Administration (FmHA), an agency of the U.S. Department of the Agriculture. FmHA channels not only credit for housing to rural areas, but also credit to purchase or operate farms, provide new employment, develop business or industrial opportunities, and construct community projects like sewer and water systems. FmHA credit is available to farmers, residents and communities in rural areas (only) that can show they are unable to obtain credit through private sources. The FmHA definition of rural includes open country, all communities up to 10,000 in population, and communities between 10,000 and 20,000 population that are designated by the state director of FmHA as eligible for FmHA program due to their rural character.

The FmHA role

Although FmHA's housing role was authorized in the federal Housing Act of 1949, its housing programs were not funded until the early 60's, according to Jon Linfield, state FmHA director. FmHA's role in housing has continued to grow. Of the $373 million FmHA spent during fiscal 1979 to serve the needs of the state's rural residents, about $114.4 million went towards housing.

Unlike HUD, FmHA is a decentralized agency. Illinois is served by eight district offices and 52 county offices usually located in county seats. The state director's office is in Champaign. In contrast, HUD's pyramidal hierarchy of regional, area, and service offices consists of only 84 offices nationwide. In Illinois, all HUD business transpires in Chicago. Thus FmHA offers a more localized, personal service to clients who walk right into the FmHA county supervisor's office.

The high rate of homeownership in rural areas has shaped FmHA programs. During fiscal year 1978, $78.9 million was distributed among 2,877 applications for single-family housing loans, grants or mortgage guarantees. By contrast, $34.2 million was distributed among 70 applications for approximately 1,200 units of rental housing funding during the same year, FmHA's largest housing program by far is its individual family home loan program (Section 502) which provides money to buy, build or improve a house. The average loan was $30,600, but loans for new construction averaged close to $40,000 for about 1,050 square feet.

Although slightly lower than the national average, FmHA in Illinois has a delinquency rate of about 21 percent on Section 502 loans. According to

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Malcolm Obourn, FmHA assistant director for District 8 covering the southernmost Illinois counties, poor people live from paycheck to paycheck. They have no savings or reserves to fall back on when emergencies such as illness or unemployment occur. It is easy for the poor to fall behind on taxes, insurance or loan payments; but FmHA tends to be generous since a family is unlikely to have any other place to live if their home reconverts to the government. FmHA recognizes the need for more careful screening of Section 502 applicants and more counseling on homeownership responsibilities.

One solution to the problem of FmHA foreclosures is being demonstrated in Cairo by the Little Egypt Housing Development Corporation, a nonprofit community-based housing corporation. Cairo has a high inventory of FmHA foreclosures (about 50 out of 150 units built under the Section 502 program). FmHA has sold 24 foreclosed single-family houses on scattered sites to the Little Egypt Housing Development Corporation which, in turn, will rent them to low-income families after rehabilitating the houses. HUD's Section 8 Rent Subsidy Program (see box on federal housing programs, May Illinois Issues, p. 10) is being used to reduce the rents to affordable levels. Unfortunately, before the units can be occupied, they must be rehabilitated because of vandalism while vacant. According to Les Williams, project president, the rehabilitation of 18 of the 24 units had been completed after five months. Costs have averaged $5,000 per house. Once rehabilitation is complete, maintenance will be done by an employee hired under the Comprehensive Employment and Training Act (CETA). The Illinois Housing Development Authority is providing management technical assistance to the Little Egypt Housing Development Corporation.

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For very low-income homeowners, FmHA has an emergency repair loan program (Section 504) with grants for senior citizens. During fiscal year 1979, statewide, 92 very low-income households were served by the loan program and 371 senior citizens received grants. FmHA also has a mortgage guarantee program and a self-help housing program. The self-help housing program has not yet been used in Illinois, although an application is currently being developed by the Egyptian Housing Development Corporation, a sister organization of the Little Egypt Housing Development Corporation.

FmHA has two complementary rental programs: the Section 515 program which subsidizes purchase or construction mortgages for new or rehabilitated rental housing and a rural rent assistance program which provides direct subsidies to the tenant. In conjunction with the Section 515 program, the private sector has been the prime mover in supplying assisted rental housing in rural areas of Illinois. Although local housing authorities can use the 515 program, an overwhelming majority (about 400 of the 448 FmHA rental projects in the state) have been built by the private sector. After two years of effort by the FmHA staff, participation of local housing authorities has increased from eight local authorities in 1978 to 21 in 1980. Another 13 have met all application requirements.

Illinois FmHA housing activity, fiscal 1979
Program	Number of loans or grants	Dollars obligated
502 home ownership loans	2,877	$78,871,550
502 guarantees (above moderate)	8	-0-
504 rehab grants	371	771,670
504 rehab loans	92	219,320
515 multifamily rural rental	70*	34,210,000
*1,200 living units Source: Illinois FmHA

The private sector

Private sector involvement in assisted rental housing has done much to stretch Illinois' limited housing resources. But since profit is the chief motive of builders, the quality of privately built housing has sometimes suffered as costs have risen. To counter this tendency, FmHA is encouraging well-designed assisted housing through an awards program. In 1979, Linfield established two annual awards for multi-family housing projects, one for elderly and the other for non-elderly. Susan Stone, special projects representative for FmHA, says that FmHA feels it now expects architects and developers to provide better design and quality construction. This is even more true with FmHA as an available funding source in the current construction slowdown.

The funding

The funding levels for FmHA programs are not sufficient to match the applications. According to FmHA's 1978 annual report, FmHA received 189 applications but could fund only 89 for its rural rental housing program. During the same period, FmHA received 11,026 applications for the Section 502 program, but could fund only 2,781.

Allocation of limited resources is a major issue for FmHA. Six policy priorities have been established for allocating FmHA dollars in Illinois:

1.  the targeting of FmHA resources for low-income individuals and families and to distressed communities, especially those which truly lack access to other resources;
2.  special attention to minorities;
3.  special attention to women;
4.  funding only projects which do not encroach upon prime farmland;
5.  encouragement of compact community development, using existing infrastructure whenever possible;
6.  development of timely information-sharing and cooperative working relationships with other groups engaged in rural development.

The first three policies developed as a result of FmHA's past neglect of these groups — the very poor, minorities and women.

Policies four and five are an extension of FmHA's Resource Management Policy. The last policy has been responsible for FmHA's key role in the Illinois Areawide Project and other cooperative relationships with Illinois Housing Development Authority (IHDA), the Illinois Department on Aging, local community action agencies, and the Illinois Department of Commerce and Community Affairs (DCCA). Both DCCA and FmHA agree that they have developed a very close working relationship on rural housing and community development. The two agencies have agreed to use the University of Illinois' County Household and Housing Profiles as a common data base for determining rural housing needs in Illinois. They hope to obtain the same agreement from HUD, IHDA and other state agencies. Symbolic of this cooperation is the Illinois Areawide Project.

Originally, it was the Rural Areawide Housing and Community Development Demonstration Project co-sponsored by HUD and FmHA. Announced in 1976, it was a unique two-year demonstration program designed to provide coordinated and comprehensive housing and community development assistance to low-income persons in rural areas. Coordination of federal, state and local housing and community development programs was the primary goal of the project. Illinois was one of four states selected to participate in the project along with California, Colorado and West Virginia.

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In Illinois two areas were selected where existing housing and community development programs were coordinated on a geographic and intergovernmental basis during 1977-79. The effort was known as the Illinois Areawide Project. Target Area I consisted of Bureau, Putnam, Marshall, and Stark counties in north central Illinois. Target Area II consisted of nine counties in southeastern Illinois: Jasper, Crawford, Clay, Richland, Lawrence, Wayne, Edwards, Wabash and White. The original project included the participation of HUD, FmHA, IHDA, the Illinois Department of Local Government Affairs (now part of DCCA), the Governor's Office of Manpower and Human Development (now also part of DCCA), the Illinois State Economic Opportunity Office, the Cooperative Extension Service of the University of Illinois, the appropriate regional planning agencies, and various advisory groups.

Due to the success of the program, HUD/USDA has extended the program until 1981 to include two more areas: a five-county area in southern Illinois (Alexander, Pulaski, Massac, Johnson, Union) and a four-county area in western Illinois (Adams, Schuyler, Brown, Pike). In addition, 14 more counties have been added to the original target areas where project activities will continue.

The accomplishments

Major accomplishments during the original project were identified in a DCCA evaluation report issued June 30, 1979, and include:

•   Preparation of applications for the construction of 629 units of assisted rental housing under FmHA's Section 515 program with 145 units complete or under construction at the end of the original two years. FmHA's allocation of HUD's Section 8 Rental Assistance Program was requested for 111 of the 629 units.

•  Over 800 applications submitted to FmHA for rehabilitation loans and grants with 250 houses rehabilitated at the end of the original two years.

• Water and sewer systems constructed in 11 communities.

•  Over 12,300 households contacted.

• 1,600 applications for single-family housing submitted to FmHA under the Section 502 program, with 328 single-family homes purchased by low-income families at program end.

The program is an attempt to foster cooperative working relationships among several agencies. The lead agency was the Illinois Department of Local Government Affairs (now DCCA), which administered $500,000 in HUD Community Development Block Grant Funds to provide water and sewer improvements and technical assistance to communities in the target areas. From applications generated during the project, FmHA will eventually spend some $17 million to increase housing opportunities and community facilities.

The best use of Illinois' limited housing resources can probably be made through interagency cooperation rather than competition or duplication of effort

There are three community action agencies in the target areas: the Tri-County Opportunities Council, the Embarras River Basin Agency and the Wabash Area Development, Inc. They offered house inspections, home-ownership counseling and loan packaging to residents with housing need. They also repaired 250 homes under housing rehabilitation programs financed with FmHA money with repair work done by employees hired under CETA. This program was in addition to the housing weatherization program funded by the U.S. Department of Energy and administered by community action agencies throughout the state.

The Cooperative Extension Service of the University of Illinois provided outreach, referral and educational services to residents of the target areas. The education program included home repairs, budgeting, energy conservation, home maintenance and storage planning.

The Governor's Office of Manpower and Human Development, which administered the CETA program in Illinois, assisted project efforts by assigning CETA positions to FmHA, the community action agencies and the Cooperative Extension Service.

HUD was slow to participate in the project, and IHDA did not participate. IHDA could not provide technical assistance to developers, and, because of legal impediments, did not provide interim construction financing. Nor was IHDA, as originally intended, able to assign part of its Section 8 allocation to the assisted rental housing projects built under FmHA's 515 program because of a change in HUD policy that reduced the allocation to IHDA for elderly Section 8 units that were to be used in the project.

The Illinois Areawide Project had some notable successes. The cooperative working relationships demonstrated in the project should be extended to all housing activities in the state. The best use of Illinois' limited housing resources can probably be made through interagency cooperation rather than competition or duplication of effort.

The decline of rural Illinois may have come to a halt. As noted in the first article in this housing series (see January Illinois Issues), some urban families are seeking a return to quiet, small town life. Demographic experts question whether the nation's farm population can further decline and still maintain the present number of acres in agricultural production. The possible revitalization of the coal industry in southern Illinois may generate new rural economic growth. But even if the rural population and economic conditions should stablize or even grow slightly, rural Illinois still has a large dependent population of elderly and low-income families whose housing needs should not be overshadowed by those of their city cousins.

Beverly Ann Fleming holds a master's degree in urban planning from the University of Illinois at Urbana-Champaign. She is a research associate at the Center for Policy Studies and Program Evaluation, Sangamon State University.

[This is the seventh in a series of articles on Illinois housing issues. The series is supported by a grant from the Ford Foundation. The eighth article will discuss the problems of discrimination in housing. — Editor]

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