Broadband Access Still a Challenge in Rural Affordable Housing

More subsidies and government funding needed to encourage providers to serve communities

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Broadband Access Still a Challenge in Rural Affordable Housing
A water tower with antennas for broadband internet is seen on Monday, January 31, 2022 in Cusseta, GA. Chattahoochee County received millions in grant money to expand rural broadband access, but the result is internet that can only be accessed by residents with a line of sight to one of the two water towers in town.
The Washington Post via Getty Images

Although broadband internet access has increased in much of the U.S., nearly 1 in 4 rural Americans still say it is a major problem in their community. Broadband access also remains a challenge for residents of affordable rental housing. These properties may have no internet access or only limited access in community facilities. In many urban areas, affordable housing developments without broadband access are often near homes that have service coverage—meaning that adding the connection for the affordable housing development wouldn’t require high cost or effort for an internet service provider (ISP)—but this is not always the case in rural areas.

When looking at solutions to bring those households online, policymakers and partners must address the dual challenge of extending broadband access to the community at large and then ensuring that residents are connected to that service.

Rural areas often unserved by broadband; many residents remain unconnected

Housing in rural areas, including low-income housing, is often spread out across greater distances than it is in urban regions. This increases the cost of building out the infrastructure needed to provide broadband access and means there are relatively few customers to subscribe to the service. As a result, ISPs do not see a favorable return on investment for deploying that infrastructure and often require federal or state subsidies to do so. Federal investment through the $42.45 billion Broadband Equity, Access, and Deployment (BEAD) Program created last year as part of the Infrastructure Investment and Jobs Act provides an opportunity to ensure sufficient broadband access for those residents.

Rural residents are also less likely to subscribe to broadband service. Rural areas have lower median incomes than urban areas—the majority of the nation’s persistent poverty counties are rural. And many rural areas have older populations. Insufficient housing supply makes it difficult for senior households to move from single family homes to housing that better meets their needs. This population would benefit from broadband access to give them better quality of life while aging in place. However, all three of these factors—rurality, income, and age—are associated with lower broadband adoption.

Households may not have room for broadband in monthly budgets

Broadband is only one cost in a household’s monthly budget, and low-income households may forgo internet service in favor of critical needs such as housing, transportation, and health care. Further, a national shortage of affordable rental housing is affecting both urban and rural communities. According to the National Low Income Housing Coalition, nationally “only 36 affordable and available rental homes exist for every 100 extremely low-income renter households”—those earning at or below the federal poverty guideline or 30% of their area median income. In fact, a full-time minimum-wage worker cannot afford a two-bedroom apartment in any state in the country.

Most offline households do not have the resources to pay market prices for broadband service even where it is available. The mean price that offline households surveyed in 2021 said they could pay for broadband was approximately $10 per month, though a majority chose $0. But the average monthly broadband bill in the U.S. ranges from $50 to $70 and can be as high as $85 with taxes and fees. Without subsidy assistance, internet access is out of reach for many of these households.

These households may qualify for the Affordable Connectivity Program (ACP), a federal initiative that provides low-income households up to $30 per month for broadband service. However, more outreach is needed to make residents aware of the ACP, as rural households have been less likely than urban ones to enroll in broadband subsidies than the national average.

Rural affordable housing takes many forms that may complicate broadband access

ISPs often face higher costs and more logistical hurdles in bringing broadband to rural affordable housing—which often consists of garden-style apartments or scattered site developments—than to the high-rises and other dense housing units commonly found in federally assisted urban housing.

Furthermore, the affordable housing stock in rural areas is different from that in urban areas. Specifically, although urban areas feature mostly properties assisted by the Department of Housing and Urban Development (HUD), rural areas have a higher percentage of housing subsidized by the Department of Agriculture (USDA), which supports both rental and homeownership programs. Thus HUD and USDA have opportunities to prioritize broadband access and affordability through revisions to their affordable housing program rules. State housing finance agencies can further incentivize ISPs to expand broadband access through grant requirements and scoring in the Low-Income Housing Tax Credit program, the primary source of new affordable rental housing.

It is important to note that the majority of affordable housing units across the country are unsubsidized—what is sometimes known as “naturally occurring affordable housing.” These existing multifamily rental properties tend to be older buildings that rent at lower rates than the local market rates, and renters are predominantly low-income people of color. Rural areas also have much higher rates of manufactured housing, which has its own unique financing structure and regulations.

Because these properties do not receive federal assistance, there’s no requirement to provide broadband access—unlike with new or substantially rehabilitated HUD units, for which builders are mandated to provide connections. However, there are opportunities to connect manufactured housing properties and other naturally occurring affordable housing through the BEAD Program.

Federal and state governments and ISPs face unique challenges to getting affordable rental housing in rural areas broadband connected. These are households that are both more likely to be located in unserved areas and less likely to adopt broadband service. As states think about how to address broadband access in affordable rental housing, they need to consider the specific needs and challenges for establishing access in rural affordable housing. Federal funding opportunities through the BEAD Program and ACP will be essential to both provide broadband service to these communities and ensure that low-income residents can actually afford it.

Anna Read is a senior officer and Kelly Wert is an associate with The Pew Charitable Trusts’ broadband access initiative.

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