April 23, 2002
Financing Rural Western Community Infrastructure
by Anne Moore Odell
The Rural Community Assistance Corporation helps people in the western United States build homes,
strengthen small communities and create environmental infrastructure.
Over the past three years, the Rural Community Assistance
Corporation (RCAC)has stood out as a community development leader by making loans in the rural
West that have helped to produce 1,580 units of affordable housing. Along with loans and technical
support for affordable housing projects, RCAC also offers technical assistance and financing for
community facilities and environmental infrastructure. Active in twelve western
states—Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New
Mexico,Oregon, Utah and Washington—RCAC’s staff provides the know-how for rural people
to help themselves.
RCAC specializes in providing technical assistance and training
to organizations that create farm worker housing. All types of safe and
affordable farm worker
housing are supported by RCAC, including single family and multi-family, single rooms, rental
housing, and preservation and
renovation of existing housing. RCAC also works as an advocate
for farm worker housing issues at both the local and national level.
According to June
Otow, RCAC’s Corporate Development Director, "RCAC is the lead agency of the Pacific Mountain
Farmworker Partnership. The Partnership consists of 11 well-established farm worker housing
agencies. The Department of Labor contracts with the Partnership through RCAC to increase housing
for farm workers in the most severely impacted states in the country."
RCAC works with
farm worker agencies to determine technical assistance needs, creating a plan in partnership with
the agencies, tailored to their
communities’ specific needs. As Otow explained, "RCAC
recognizes that sustainable housing development requires well-functioning and accountable
Along with their focus on farm worker housing, RCAC is one the
West’s biggest supporters of self-help home building. Since 1980, RCAC has provided
technical and management assistance to the U.S. Department of Agriculture (USDA) state staff and
program grantees in eleven western
"In the mutual self-help program, a group
of six to ten families and individuals work together under the guidance of a nonprofit housing
developer (self-help grantee) to build each others’ homes," said Otow. "With a
construction supervisor, these groups perform at least 65 percent of the construction work and
labor required (known as "sweat equity") to build their homes."
RCAC’s third area of
affordable housing development is its community facility program. Community facilities include
community health care
centers, education centers, fire, rescue and public safety organizations,
childcare centers, adult day care centers, city halls, courthouses, business incubators and
transportation centers among others. "The community facility lending program has grown to become a
major product line," said Otow. "It has moved RCAC into the long term lending arena. Over the past
three years we have originated 24 community facility loans totaling $9.9 million, six of which were
long term loans."
RCAC has provided technical assistance concerning environmental
infrastructure since its inception in 1978, with each state branch utilizing
specialists with environmental certification. RCAC also works with all tribal nations within their
eleven state area. The
environmental staff work together with the loan officers, and other
staff to create needed services in rural communities. The creation of a sound environmental
infrastructure in rural areas means in part that local communities must devise solutions to their
own problems, provide
environmental education, and "achieve compliance" with their drinking
water, wastewater and solid waste.
As part of their support of environmental
infrastructures, RCAC publishes The Pacific Mountain Network News and The Pacific Mountain Review.
Both publications are free for RCAC’s partners. These publications help keep
up to date and offer ongoing support.
RCAC provided its first loans in 1988; since 1996,
RCAC has been certified as a Community Development Financial Institution (CDFI). "As of September
30, 2001 (the end of our fiscal year), RCAC had closed 170 predevelopment loans totaling $52
million," explained Otow. "These loans leveraged over $402 million for rural projects. RCAC also
closed 36 long-term loans totaling over $18.5 million, which leveraged over $56 million."
Affordable housing continues to be RCAC’s largest lending area and the foundation of its
lending activity. Over the past three years, RCAC has made 51 housing loans totaling $22.7 million.
Two types of loans are usually offered. Short-term loans, limited to three year terms,
typically focus on unimproved land purchases, pre-development expenses, on and off site
improvements, unit construction, rehabilitation costs and income stabilization. Long term loans are
offered to rural communities with less than 20,000 people.
RCAC has formed partnerships
with foundations, banks, religious organizations and governmental agencies to create its loan pool
that offers low-interest loans to organizations that serve the rural poor. The investment is repaid
to the investor with terms and rates negotiable.
Minimum investments are $100,000. At this
time, RCAC does not accept investments from individuals although grants and donations from
individuals are appreciated and are tax-deductible as allowed by law.
RCAC is in the
second year of a 5-year strategic plan. Otow said "We are working hard to define our role in
economic development technical
assistance. We are also working to develop a stronger
leadership development and community capacity building component to our services. We see an
increase in environmental lending and community facility lending."
With more than 115
staff members located in 29 locations throughout the west, RCAC is available to help serve the low
and very low-income rural
people in the west. Working with local non-profits and
municipalities, RCAC helps provide safe housing, water and community facilities to some of the
people who need them most.