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Supporting Sustainable Rural Communities

HUD, DOT, EPA, and USDA Programs at Work in Rural Communities

Working with its partners, the federal government has for many years played a significant role in rural America. The Partnership agencies and USDA have a variety of programs that support economic development, infrastructure, and conservation in rural communities. While some of these programs reflect the Partnership's objectives of enhancing economic competitiveness, supporting existing communities, and coordinating federal activities, others can be implemented without regard for the location of investments, their impacts on economic development and environmental outcomes, or potential leveraging of related federal, state, and local efforts. The effectiveness of these programs could be increased by better coordinating them with other federal efforts and incorporating the Livability Principles where appropriate.

This section lists some of the programs affecting the natural and built environments and economic development in rural communities. Each agency also has many other programs that can be helpful to rural communities. For more information, see each agency's website.

U. S. Department of Agriculture

USDA is comprised of multiple agencies that support agriculture, natural resources, and rural development. USDA's current strategic plan reflects a commitment to rural sustainability:

USDA is working to enhance the livability of rural communities. The department uses 21st-century technology to rebuild infrastructure, ensure that rural residents have decent housing and homeownership opportunities, clean water, adequate systems for handling waste, reliable electricity and renewable energy systems, and critical community facilities including health-care centers, schools, and public safety departments. USDA also helps communities invest in strategic green infrastructure planning and protection of critical natural resources.[3]

While much of the department's work affects rural communities, three agencies stand out:

USDA is also spearheading various regional economic development initiatives. For instance, the Stronger Economies Together program aims to strengthen the capacity of rural regions to collaboratively develop and implement economic development blueprints. In another example, the first stage of the Great Regions initiative provided Rural Business Opportunity Grants to economic development projects that could have regional impacts, with the goal of further supporting these efforts through other USDA programs.

U.S. Department of Housing and Urban Development

Many HUD programs operate in rural as well as metropolitan areas, but their funds might pass through state agencies or other entities to rural communities, making it less evident that the funding comes from HUD. HUD invests around $6.2 billion per year in rural areas. The majority of these funds provide affordable housing to low-income residents. More than 800,000 families in rural communities currently receive assistance through HUD's Housing Choice Voucher, Public Housing, and Federal Housing Administration (FHA) Multifamily programs, with assistance totaling more than $4 billion per year.

The State and Small Cities Community Development Block Grant (CDBG) program enables rural communities to obtain grant funds for infrastructure, equitable affordable housing, economic development, and community planning. The State CDBG program provides about $840 million per year for economic development and other public investments in rural areas through state governments. The largest investments through the State and Small Cities CDBG are in public infrastructure, particularly for water and sewer projects, keeping Main Streets across rural America viable and directly supporting over 8,500 jobs per year. CDBG funds can also be used as the local match for other federal funding. HUD also funds over $500 million annually in affordable housing and homeownership programs in rural areas through another block grant to states, the HOME Investment Partnership. These two block grant programs also provide crucial additional funds to support communities rebuilding from disasters, serving as the vehicle for the supplemental appropriations Congress makes available to presidentially declared disaster areas.

HUD's Rural Housing Stability Grant Program assists individuals and families who are homeless, in danger of losing their homes, or in the worst housing situations in the geographic area - an increasing problem in rural communities. HUD's FHA insures more than $220 billion in mortgages, allowing over 1.5 million first-time homebuyers and other qualified families in rural areas to purchase their own homes. The FHA similarly insures loans on nursing homes, assisted living facilities, board and care facilities, and acute care hospitals, including a current total of over $545 million in loans to hospitals designated "critical access hospitals" in rural areas. Additionally, HUD ensures the quality of over 40,000 manufactured homes a year, more than 60 percent of which are located in rural areas. Less waste in construction and better energy efficiency make these homes more affordable to buy and live in.

HUD's Indian and Native Hawaiian Housing Block Grants, Home Loan Guarantees, and Community Development Block Grants support economic development and almost 40,000 homes, the single largest source of funding for housing on Indian tribal lands today at over $780 million per year. HUD supports these communities and their right to self-determination by allowing the recipients to design and implement housing programs according to local needs and customs.

HUD also administers several programs that link housing and economic development in rural areas. HUD's Rural Housing and Economic Development Program is designed to address problems of poverty, inadequate housing, and lack of economic opportunity in rural communities that are outside of metropolitan regions and have populations of 20,000 or less. It specifically focuses on high-need communities such as those in the Lower Mississippi Delta Region, the Colonias, and Appalachia, as well as federally recognized Indian tribes and seasonal farmworker communities. The program develops state and local capacity to support innovative rural housing and economic development approaches. Grants are awarded directly to local rural nonprofits, community development corporations, federally recognized Indian tribes, state housing finance agencies, and state community or economic development agencies.

Since fiscal year 1999, HUD's Office of Rural Housing and Economic Development has received an average of $22 million annually for the Rural Housing and Economic Development Program. Appropriations increased from $27 million in fiscal year 1999 to $248.7 million in fiscal year 2009, and grantees leveraged $850.9 million over that period. Grant awards increased from 91 in fiscal year 1999 to 964 in fiscal year 2009. Rural Housing and Economic Development grantees have created 13,005 jobs, trained 38,347 people, created 2,058 new businesses, assisted 5,557 existing businesses, constructed 8,595 housing units, and rehabilitated 9,267 housing units.

On a smaller scale, Rural Innovation Fund grants build homes and community facilities and support job-training programs and other economic development projects. This funding to federally recognized Indian tribes, local rural non-profits, community development corporations, and state housing and economic development agencies lets communities address local issues and builds their capacity to serve residents.

Launched in 2004, HUD's Rural Gateway serves as a clearinghouse of innovative ideas on rural housing, economic development, and revitalization, with a specific focus on communities in the Colonias, the Lower Mississippi Delta Region, Appalachia, and federally recognized Indian Tribes, as well as seasonal farmworker communities. The Rural Gateway builds the capacity of local, state, and regional organizations working on housing, economic development, and infrastructure development in rural areas. It also serves as a promoter and facilitator of private sector based partnerships to support housing, economic development, infrastructure, and capacity building activities.

HUD has historically been a key federal resource for community planning, and the Sustainable Communities Regional Planning Grant and Community Challenge Planning Grant programs, recent Partnership initiatives, focus on helping communities create plans that integrate economic development, housing, and transportation. These grant programs provide a useful example of broadly applicable initiatives that set aside a portion of funding for rural and small communities. For instance, $28 million in Sustainable Communities Regional Planning Grants was awarded to regions with populations less than 500,000 and $15 million in Community Challenge Planning Grants went to rural places with fewer than 200,000 people. The interest from rural areas in the first year was great-52 percent of applicants to the Sustainable Communities Regional Planning Grant Program were from small towns and rural areas.

U.S. Department of Transportation

Like HUD, most programs in DOT, including safety research, highway and transit construction, and transportation planning, have a rural component. Most federal transportation funding is distributed by formula to state and local transportation agencies.

The Federal Transit Administration (FTA) administers a variety of programs that provide access to public transportation in rural communities, particularly to prevent the economic and social isolation of elderly and low-income residents and to support intercity mobility. FTA's formula grant programs provide over $500 million for public transportation in and between rural communities, in addition to targeted technical assistance for rural transit providers, grants to tribes for transit and roads, and grants that support sustainable transportation for visitors to national parks and federal lands. Since 1979, FTA has provided grants to states under the Section 5311 Non-urbanized Transit Program to establish and maintain transit systems in communities with populations under 50,000.

The Rural Transit Assistance Program provides funding for training and technical assistance projects and other support services tailored to meet the needs of transit operators in rural areas. Additionally, the Tribal Transit Program provides approximately $45 million in direct funding to federally recognized tribes to support tribal public transportation in rural areas. The tribes can use this funding for capital, operating, planning, and administrative expenses for transit projects that meet the growing needs of rural tribal communities.

The Paul S. Sarbanes Transit in Parks Program provides funding for sustainable transportation systems, such as shuttle buses, rail connections, and bicycle trails in America's national parks, national forests, and wildlife refuges. The program seeks to conserve natural, historical, and cultural resources; reduce congestion and pollution; improve visitor mobility and accessibility; enhance the visitor experience; and ensure access to everyone, including persons with disabilities. FTA awarded $27 million through this program in 2010.

The Federal Highway Administration (FHWA) plays an important role in supporting the transportation needs of rural communities with its investments in America's highway and road network, including state highways that often serve as main streets through rural towns and villages. In fiscal year 2008, nearly 39 percent of all federal highway funds obligated-approximately $13.7 billion-were for highways classified as rural.

FHWA also administers the Highway Safety Improvement Program (HSIP) to reduce traffic fatalities and injuries on public roads. The High Risk Rural Roads Program was established through a set-aside from each state's apportionment of HSIP funds for construction and operational improvements on high-risk rural roads. A total of $90 million is set aside nationally per year and is applied proportionally from the states' HSIP apportionments.[6]

The Federal Lands Highway Program provides transportation infrastructure for the 30 percent of America that is federally owned (national parks, forests, monuments, reserves, rangelands, etc.). Similarly, the National Scenic Byways Program invests in transportation corridors to support the environmental and cultural features that make them economically valuable.

With a more regional focus, FHWA also supports the Appalachian Development Highway System Program. This program provides funds for the construction of highways in 13 states in Appalachia to promote economic development and meet the region's transportation needs. The Appalachian Development Highway System is 76 percent complete.

Additionally, FHWA supports freight movement, which often passes through rural areas and is critical for bringing rural products to market. Freight operations and planning are dealt with across many of FHWA's program areas. The agency also sponsors peer-to-peer exchanges and seminars on freight movement and planning, and on linking freight transportation and livability.

The FTA and FHWA jointly administer the State Planning and Research Programs, through which states are required to conduct comprehensive and collaborative intermodal statewide transportation planning that facilitates the efficient movement of people and goods. As part of this process, states are required to consult with officials from places outside of metropolitan areas.[7]

The Federal Railroad Administration administers the Railroad Rehabilitation & Improvement Financing Program which provides direct federal loans and loan guarantees to finance development of railroad infrastructure that can particularly benefit large projects in rural areas.

Rural areas also compete successfully in DOT's discretionary livability grant programs. In 2009 and 2010, with the support of the Partnership, the TIGER (Transportation Investments Generating Economic Recovery) and TIGER II programs provided approximately $288 million in funding to support the planning and construction of transportation infrastructure in rural areas.

U.S. Environmental Protection Agency

EPA's mission is to protect the environment and public health, and a healthy environment is essential to a healthy economy. Programs that most explicitly integrate environmental, economic, and community outcomes in rural places include technical assistance offered by the Office of Sustainable Communities; support for wastewater and drinking water infrastructure provided by the Office of Water; and brownfields assessment, cleanup, and area-wide planning grants from the Office of Brownfields and Land Revitalization. These programs do not formally set aside funds for rural communities, but they have worked with many rural places.

For example, the Office of Sustainable Communities has provided intensive technical assistance to rural communities through its Smart Growth Implementation Assistance program as well as offering more targeted, short-term help on growth and development challenges in small towns through its Sustainable Communities Building Blocks program. Fifteen of the 31 Building Blocks technical assistance projects served small towns and rural communities, bringing approximately $180,000 in technical assistance services. The Office of Sustainable Communities also provides funding for the Governors' Institute on Community Design, which offers technical assistance to governors and their staffs, some of whom have asked for help with rural issues. The office has funded and helped to create the Smart Growth Network publication Putting Smart Growth to Work in Rural Communities,[8] which highlights smart growth strategies that leaders from rural communities and small towns can use to help guide growth while protecting natural and working lands and preserving rural character. Smart growth is development that is good for the economy, the environment, and the community, providing more choices for residents, greater opportunity across the community, good return on public investment, and clean air and water.[9] Smart growth techniques look different in different places because they are meant to be adapted to local needs, but many communities use smart growth strategies to foster neighborhoods that have stores, offices, schools, and houses of worship near homes; to preserve open space for agriculture, recreation, and aesthetic value; and to ensure that people can find a safe, convenient, and affordable place to live.

EPA's Brownfields Program, in the Office of Brownfields and Land Revitalization, empowers states, communities, and other stakeholders in economic redevelopment to work together to prevent, assess, clean up, and reuse brownfields. A brownfield is a property, the expansion, redevelopment, or reuse of which may be complicated by the presence or potential presence of a hazardous substance, pollutant, or contaminant. Brownfields can exist in urban and rural communities. The Brownfields Program offers grants to support revitalization efforts by funding environmental assessment, cleanup, and job training activities. Brownfields Assessment Grants provide funding for brownfield inventories, planning, environmental assessments, and community outreach. Brownfields Revolving Loan Fund Grants provide funding to capitalize loans that are used to clean up brownfields. Brownfields Job Training Grants provide environmental training for residents of brownfields communities. Brownfields Cleanup Grants provide direct funding for cleanup activities at certain properties with planned green space, recreational, or other nonprofit uses. In 2010, the Brownfields Program worked with the Partnership to give out Area-Wide Planning Grants to help selected communities create a shared vision for brownfields redevelopment that will inform cleanup decisions. Five out of 23 of those grants, representing nearly $1 million in funding, supported rural communities with populations less than 20,000.

The Office of Water provides grants to states to operate revolving loan programs that provide low-interest financing for wastewater, drinking water, and other water quality projects. In 2010, these programs issued guidance recommending that states make funding decisions that are consistent with the Partnership's Livability Principles and discourage expanding infrastructure to accommodate growth if there are available facilities in existing communities. In fiscal year 2009, 78 percent of the Clean Water State Revolving Fund assistance agreements-approximately $1.2 billion-were established with communities of fewer than 10,000 people.[10] About $608 million in assistance was provided to communities of fewer than 10,000 people through the Drinking Water State Revolving Fund in fiscal year 2009.[11]

Other EPA programs at work in rural areas include AgSTAR, which advances the capture and use of biogas at livestock facilities; Smartway Transport, which works with the freight sector to improve energy efficiency, reduce greenhouse gas and air pollutant emissions, and improve energy security; and the U.S.-Mexico Border Water Infrastructure Grant Program, which provides grants for the planning, design, and construction of wastewater and drinking water facilities to communities within 60 miles of the border.

Updated: 4/3/2012
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