Caitlin Cain is a vice president at the Local Initiatives Support Corp. (LISC) and director of Rural LISC, which provides a wide range of services, including financial support and technical assistance, to help developers and service partners address obstacles specific to rural communities.
She is helping LISC fulfill its Rural Promise, an aspiration to produce 20% of its overall community development impact in rural areas by 2023. Approximately 20% of the country’s population resides in rural America.
Before taking the lead at Rural LISC last year, Cain led her own New Orleans-based social investment firm. She’s also served as CEO of the World Trade Center of New Orleans.
What is your definition of rural?
Rural is really a spectrum with a variety of definitions, but generally, we consider rural to be a community having a population of approximately 50,000 or less.
What is often misunderstood about the needs and opportunities of rural communities?
Rural America is incredibly diverse demographically, culturally, and economically. I think we tend to view rural communities through a narrow lens—impairing our ability to fully appreciate the extent of innovation, entrepreneurship, and cultural richness that characterizes some small towns and rural/remote communities. Some rural areas are home to major employers and research centers, and/or serve as recreation and cultural meccas, while others struggle to retain population and workforce. Because of this diversity, there is no one-size-fits-all investment strategy for rural America. Solving for the complex needs of rural communities—housing, workforce development, infrastructure (including broadband), health care, access to capital—often requires regionalism and a willingness to explore and adopt unique public-private partnerships. Communities that are able to leverage these partnerships are often the ones with the greatest ability to maximize future opportunity.
What is LISC’s Rural Promise? And, where are you on meeting the program’s goal?
Early in 2020, LISC launched the LISC Rural Promise, a commitment to enhance total investment in rural communities to 20% of our impact over the next few years. More recently, LISC rolled out Project 10X—an ambitious, decade-long strategy to address racial gaps in health, wealth, and opportunity that affect millions of people throughout the country, including rural America. Project 10X is a $1 billion plan to raise and deploy capital that will help build a more broadly shared prosperity.
In 2021, Rural LISC operationalized the LISC Rural Promise and Project 10X by providing need-driven technical assistance, training, and access to programs and capital to connect with our partner organizations and rural collaborators in both Black, Indigenous, and People of Color (BIPOC) and non-BIPOC communities throughout rural America. Rural LISC makes these investments through five core pillars to better support, strengthen, and leverage investment in rural ecosystems.
The Rural LISC five pillars include:
• Access to Capital
• Broadband and Infrastructure
• Workforce Development
• Disaster Response, Adaptation, and Resilience Planning
• Place-Making/Housing
Buoying up all of these pillars is our technical assistance and capacity building grants to organizational partners. Rural LISC is working hard to meet the 20% goal through various programming and investments. Last year alone, Rural LISC had its best fundraising year, deploying more than $38 million in grants and total investment directly to rural communities.
Since 1995, Rural LISC has directly invested more than $1.1 billion in grants, loans, lines of credit, repayable investments, and equity into community development corporations. This funding has, in turn, been matched and leveraged to the tune of $4.4 billion in investment in rural America ($5 billion-plus in total development costs) in the form of low-income housing tax credits, New Markets Tax Credits, small business grants and loans, U.S. Department of Agriculture grants and loans, Department of Housing and Urban Development grants, and millions in public and private philanthropic support.
Do you see access to capital improving in rural areas? If so, where will it come from?
Yes, access to capital is improving in some rural areas, but many communities continue to remain significantly challenged.
Rural LISC works to deploy capital in 49 states and Puerto Rico, but we tend to do so through our network of over 145 partner agencies and 45 business development organizations. Of this network, some of our partners have been incredibly successful at leveraging initial seed funding to secure additional investment for housing and various community development initiatives, while other still struggle due to capacity constraints and various other complexities, including lack of commercial capital locally. Some communities have also been successful at growing their CDFI capabilities to help address capital challenges, but a great deal of disparity exists. We know there remains a considerable need for extended technical assistance for organizational supports and capital in rural America.
In terms of new capital, we are seeing increased growth in our micro-lending programs for small businesses along with growing interest in social impact funds and credit enhancement deals to help move the needle on housing and community development projects. At present, CARES Act and American Rescue Plan Act funding represent an unprecedented infusion of public investment for states and municipalities with even more funding potentially being available to rural communities through the Build Back Better plan. This new (unprecedented) infusion of public-sector supports will require rural communities to quickly rethink internal operations so they can better access and leverage public funds for key local priority initiatives, such as broadband connectivity, child care, and quality, affordable housing development.
Rural communities may also benefit from the additional federal funding for climate change resilience and adaptation, especially as it relates to home and small business retrofits and workforce development training. However, rural municipalities must have the technical resources, compliance mechanisms, and organizational supports in place in order to benefit from this funding. This will remain a challenge.
How is developing affordable housing in rural areas changing?
In some respects, it is not changing; rural communities still lack infrastructure, organizational capacity, and the patient capital needed to support investment projects.
While some rural communities have growing populations and economies, many do not. For those communities in growth mode, the challenge is less about developing additional affordable units and more about preserving the affordability and quality of the existing housing stock. Why is this important? Because the majority of housing in rural communities is comprised of single-family homes (rental and home ownership) yet, nationally, approximately 27% of this rural housing stock is considered “inadequate.”
Additionally, natural disasters are becoming more common, and rural communities are disproportionality impacted due to the already tight housing conditions. Adaptation and affordability are becoming paramount concerns. The ability to rebuild and retrofit a house to withstand future disasters, and making it affordable to do so, remains a significant challenge.
Finally, it is also important to note that housing development should not happen in a silo. LISC and Rural LISC work with many partners around the country to integrate additional supports into community housing strategies, such as improving infrastructure, addressing small business needs, increasing access to broadband, and incorporating arts, culture, and other community assets into an overall community strategy that reinforces local vision.
What did the COVID-19 crisis teach you about rural communities?
Rural communities faced many challenges during COVID-19, especially related to the lack of broadband connectivity to support schooling, work, and health care needs. Remote areas, in particular, were incredibly hard hit, especially our BIPOC communities. Some rural areas experienced demographic shifts (urbanites moving into their communities) that resulted in increasing demand for quality rural housing. This led to escalating housing costs that were further strained by increasing material costs and labor shortages. Yet, despite all of this, rural communities continue, for me, to embody the human journey— they adapt, innovate, and celebrate in family, friends, and the art of simply being (no matter the crisis). Perhaps this is why so many people flocked to rural communities during COVID-19, and (I would argue) desire to stay.
What issue is keeping you up at night?
Climate change and adaptation—we need to be able to make resilience planning a priority and ensure that infrastructure adaptation for rural communities, small businesses, and homeowners alike is affordable and accessible. This will require substantial amounts of capacity support, new types of innovative capital and wraparound technical assistance to support community leaders and residents as they rethink how to rebuild post-disaster.
Many projects financed with the USDA’s Rural Development Section 515 program are nearing loan maturity. Through 2040, nearly 10,000 properties containing more than 280,000 units are at risk of exiting the program. If and/or when that happens, existing tenants will no longer be eligible to receive the critical rental assistance that helps ensure their housing stability. To further exacerbate the situation, the Section 515 portfolio is aging and likely in need of significant rehabilitation.
The amount of new capital flowing toward affordable housing right now is unprecedented. While additional resources are most certainly welcomed and needed, I remain concerned about the capacity and nimbleness of some of our partners to be able to draw down, leverage, and comply with the requirements of public funding.
Finally, I believe more philanthropic organizations and public agencies should consider a rural development strategy. Rural America is incredibly important to the economic and cultural makeup of the country, yet rural communities receive pennies on the dollar when it comes to philanthropic investment. Rural communities require more investment, especially in lieu of climate change and the disproportionate impact severe climate activity has on many rural communities and economic sectors.
What are you optimistic about going into 2022?
Though COVID-19 proved hugely devastating for so many rural and remote communities, this period of tragedy also gave rise to an incredible movement that challenged the status quo and behavioral norms. I remain optimistic that we will continue to forge the relationships and behaviors needed to break down silos, foster new partnerships, and make the transformative investments needed for rural communities to thrive. I also believe the Saints will win the Super Bowl.
