Another Definition for Rural?

Another Definition for Rural?

Todd M. Richardson, General Deputy Assistant Secretary for Policy Development and Research.

Several weeks ago, I spoke at the Housing Assistance Council’s (HAC’s) virtual annual conference. While preparing for the conference, I recalled this Edge post last year written by former director of the Office of Policy Development and Research’s (PD&R) Housing and Demographic Analysis Division Shawn Bucholtz about a 2017 American Housing Survey (AHS) question that asked respondents about whether they would describe the area in which they lived as urban, suburban, or rural.

Using those 2017 AHS data, Shawn Bucholtz and PD&R’s Emily Molfino developed a way to predict the likelihood that a person would describe a neighborhood as urban, suburban, or rural using American Community Survey census tract explanatory variables. Using this algorithm, Bucholtz and Molfino created a clever new index called the Urbanization Perceptions Small Area Index (UPSAI). Their paper, several tables comparing this new index to other measures of urbanization, and the census-tract-level data are all available on the HUD User website.

PD&R also hosts a map tool that displays UPSAI data.

I used this research as my “hook” at the HAC conference as I discussed the Coronavirus Aid, Relief, and Economic Security Act, American Rescue Plan, and Build Back Better Act in the context of rural America.

One point I made in my HAC remarks is that, whenever I am asked about what our data say about rural America, I default to discussing “nonmetropolitan” America. This choice is fairly common among policymakers. Bucholtz and Molfino’s index shows that most people living outside of metropolitan America would likely describe where they live as “rural” as defined by this perception index.

Table 1. This table shows that 57 percent of those living in nonmetropolitan areas are in census tracts that HUD’s perception index defines as rural.

HUD Perception Index	Metropolitan Area	Nonmetropolitan Area1	Total
Urban	30%	13%	27%
Suburban	56%	30%	52%
Rural	14%	57%	21%
Total	100%	100%	100%
1Nonmetropolitan areas include micropolitan areas and non-core-based statistical areas from the U.S. Department of Agriculture’s 2010 Rural-Urban Commuting Area Codes file.

The more interesting finding is that 13 percent of people living in nonmetropolitan areas are in census tracts classified as likely having an urban perception, and 30 percent are in census tracts classified as likely having a suburban perception. Bucholtz and Molfino’s analysis found that residents of small towns often say they live in an urban or suburban area rather than a rural area.

From a HUD public policy perspective, when we think of investing in rural areas, we generally classify those small and mid-size core towns of micropolitan areas as serving rural areas. Examples of these micropolitan places are Hope, AR; Taylorville, IL; Danville, KY; Rockland, ME; and Bozeman, MT (although Bozeman will likely graduate to a metropolitan area this year).

My view is that it is still safe to use the term “nonmetropolitan” as a proxy for “rural.”

The brain teaser this presents, however, is that, although Table 1 shows most residents of nonmetropolitan areas are in areas likely to be perceived as rural, Table 2 shows most residents of areas likely to be perceived as rural live within a metropolitan area.

Table 2. This table below shows that 56 percent of residents of census tracts HUD’s perception index has defined as rural live in a metropolitan area.

HUD Perception Index	Metropolitan Area	Nonmetropolitan Area	Total
Urban	92%	8%	100%
Suburban	90%	10%	100%
Rural	56%	44%	100%
Total	84%	16%	100%

Huh?

This is the power of numbers. As Table 2 shows, 84 percent of all Americans live in metropolitan areas; as a result, even if only a small percentage of residents of Metropolitan Areas identify as rural, the result is still a big number. Those of us in Washington know that parts of West Virginia are included in the Washington, DC metropolitan area.

From the perspective of HUD public policy, then, how do we resolve this problem so that we can answer questions such as, “What fraction of households served by HUD live in rural areas?” This post suggests that we could answer this question by combining those living in nonmetropolitan areas with those living in the census tracts in metropolitan areas that Bucholtz and Molfino’s algorithm categorize as likely to be perceived as rural: the yellow-shaded areas in Table 3 shows 28 percent of the US population as being in non-metropolitan or UPSAI rural areas.

Table 3. 2010 Population

HUD Perception Index	Metropolitan Area	Nonmetropolitan Area	Total
Urban	76,696,955	6,365,629	83,062,584
Suburban	144,448,745	15,471,008	159,919,753
Rural	36,622,812	29,025,243	65,648,055
Total	257,768,512	50,861,880	308,630,392
Note: Percentage of the population that is nonmetropolitan or UPSAI metropolitan rural: 28%

At HUD, we often think in terms of households by tenure. Thirty percent of owner households live in nonmetropolitan or UPSAI rural areas while just 20 percent of renter households do. Looking at households with severe housing needs – without kitchen or plumbing, overcrowded, or paying more than half their income for housing costs - 29 percent of owner households and 16 percent of renter households with severe housing needs are in nonmetropolitan or UPSAI rural areas.

I matched up the UPSAI data with the census-tract-level data from our Picture of Subsidized Households to generate Table 4.

Table 4. HUD-Assisted Households by Census Tract

HUD Perception Index	Metropolitan Area	Nonmetropolitan Area	Total
Urban	2,320,601	188,453	2,509,054
Suburban	1,222,528	256,088	1,478,616
Rural	113,149	148,716	261,865
Total	3,656,278	593,257	4,249,535
Note: Percentage of HUD-assisted households that live in nonmetropolitan or UPSAI metropolitan rural areas: 17%

Table 4 shows 17 percent of HUD-assisted units are in nonmetropolitan or UPSAI rural areas. With 20 percent of renters and 16 percent of renters with severe housing needs in these areas, HUD Assistance seems to be reaching rural areas as well as it does urban areas.

Here are a few other programs I linked up using our egis.hud.gov files we have on program participants by census tracts. Among the 7.2 million households with Federal Housing Administration single-family mortgage insurance, 25 percent live in nonmetropolitan or UPSAI rural areas. Among the more than 3.1 million low-income housing tax credit units for which HUD has information, 17 percent are in nonmetropolitan or UPSAI rural areas.

Something to think about.