Program's end may slow Jackson growth

Unless Congress decides otherwise, Jackson no longer will qualify for Rural Development programs on Oct. 1, putting a strain on first-time homebuyers, housing developers and perhaps the city's growth.

According to the 2010 U.S. Census, Jackson exceeded the population limit set by the United States Department of Agriculture Rural Development programs, which calculate population using a variety of factors, not just the number of people living within the city limits.

Greg Batson, program support director of Rural Development for the USDA, said Jackson's eligibility is not affected by the city's population alone. Jackson is part of the Cape Girardeau Metropolitan Statistical Area, which had a population of 96,275, according to the 2010 U.S. Census, Batson said.

The purpose of Rural Development programs is to promote community development, improve quality of life for rural residents and support job creation, housing development and infrastructure development, he said.

The Rural Development programs that no longer will be available to Jackson are sections 502 and 504, which offer 100 percent financing for owning, purchasing, construction and repairing of single-family housing, Batson said. Jackson also no longer will be eligible for funds to pay for community projects.

Jackson will be eligible for the Business Industry Guaranteed Loan Program, he said, which provides loans for business startup and expansion.

"Without Congress' action, then Jackson would become ineligible for single-family housing loans as far as Rural Development programs go," Batson said.

Should Jackson remain ineligible, prospective home owners would not be the only ones who would see consequences.

Brandon Williams of Brandon O. Williams Construction Co. LLC has 23 lots in Jackson that are developed and sold, and about 18 left to be developed. Those 18 lots will remain empty until Williams sees what happens with Jackson's eligibility. He said there has been so much uncertainty with the USDA and Rural Development he decided after selling his last house in July to wait and see what happens.

"Right now, you know, I just can't justify spending money there," he said.

The consequences, Williams said, will be huge if something is not done. He predicts problems with every aspect of the housing market, from bankers to material suppliers to real estate, but especially first-time homebuyers and the growth of Jackson.

"If they want the building industry to continue -- smaller homes make up a big sector -- they're going to have to put a program together that is affordable and feasible to make it possible for first-time homebuyers," he said.

Bill Cole, executive broker of Realty Executives of Cape County, said Rural Development programs allowed Jackson's population and economy to grow. He said a great option for housing may go away, but questioned how "rural" Jackson is when looked at with Cape Girardeau.

"It's kind of a shame that that threshold isn't a little bit higher, but there has to be a cutoff somewhere," he said.

Cole believes the lack of Rural Development help will have a major effect on Jackson developers who have invested in subdivisions.

"We're talking significant dollars that a developer is risking to develop homes," he said. "Where is your incentive to do that now if that program goes away?"

He said if nothing is done by Oct. 1, more housing will be developed in areas outside Jackson, such as Gordonville. Cole said some subdivisions still will be eligible for Rural Development loans, so it could turn into a situation where one subdivision is eligible while an adjacent subdivision isn't.

"If someone wants a home badly enough, they will just end up in a different subdivision," Cole said.

As for selling homes, he thinks the lack of help for first-time buyers could hurt sales in Jackson.

"People who want to live in Jackson but lack a down payment will either have to hold off on their home purchase until they save the necessary down payment, or they will have to consider housing situated outside the Jackson city limits," he said in an email.

Cole and Williams agree the housing market could suffer.

"Most of them need Rural Development to own their first home, and that's going to stop," Williams said. "That's the American dream, and were getting away from the American dream in this country."

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