Building generational wealth in rural America : The Indicator from Planet Money Homes are not just where we eat and sleep, but one of the primary ways people build generational wealth in the U.S. But with home shortages and harsh climates, rural America's path to building that wealth looks a little different than other parts of the country. Today on the show, we focus in on housing challenges in Alabama's Black Belt and one innovative solution to preserving generational wealth.

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There is growing segregation in millennial wealth

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Building generational wealth in rural America

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SYLVIE DOUGLIS, BYLINE: NPR.

(SOUNDBITE OF DROP ELECTRIC SONG, "WAKING UP TO THE FIRE")

ADRIAN MA, HOST:

I've lived in a lot of different cities, from Chicago to Boston, from New York to D.C., and all these places have the same basic problem - too many people, not enough affordable housing. And so occasionally, I have thought, what if I moved away from the big cities - right? - somewhere to the country, you know, where the corn grows high, and the housing costs are low?

STEPHAN BISAHA, BYLINE: I hate to burst your bubble, Adrian, but the country has its own housing troubles.

MA: Welcome back, Stephan Bisaha, Gulf States Newsroom reporter and dream crusher.

BISAHA: I wear many a hat. But it's true. While the grass might be greener when you're surrounded by asphalt, rural areas, they have their own housing crisis, a rural housing crisis. And the reason that's important beyond, you know, needing a place to just live is that housing is one of the main ways people build generational wealth.

MA: OK.

BISAHA: As the name implies, it's the passing down of wealth from one generation to another. Housing is used to do that in both urban and rural spots. But like it often goes, things work just a bit differently, whether you live in urban America or the country.

MA: This is THE INDICATOR FROM PLANET MONEY. I'm Adrian Ma.

BISAHA: And I'm Stephan Bisaha from the Gulf States Newsroom. We're a family of public radio stations in Mississippi, Alabama and Louisiana.

MA: On today's show, how generational wealth gets passed down in the country versus the cities and the suburbs.

BISAHA: And how that's shaping the way architects are trying to solve the rural housing crisis.

(SOUNDBITE OF MUSIC)

MA: Alabama's Black Belt is this stretch of land in Alabama known for its rich black soil. It's got a couple of cities, but otherwise, it's a mostly rural region. For instance, Hale County has less than 15,000 people living there. And that is where Reggie Walker grew up.

REGGIE WALKER: I have a lot of memories of sneaking out the house, going down into the woods (laughter), doing a lot of - and getting in a lot of trouble.

BISAHA: Care to share that kind of trouble?

WALKER: No, no, no, no, no, no. I got to keep that secret (laughter).

BISAHA: Who amongst us doesn't have a childhood secret that they don't want to share?

MA: That's true. Some things you take to the grave.

BISAHA: Now, the thing about the Black Belt is that it is also one of the poorest parts of the country. A quarter of people in Hale County, they live below the federal poverty line.

WALKER: The biggest thing about rural area and housing is first of all, because of the poverty here in Alabama, most houses are passed down generation to generation to generation.

MA: And this is one of the key differences with housing between urban and rural areas. 'Cause with cities and suburbs, building generational wealth is not usually about holding onto your home. Instead, it's generally about selling it.

BISAHA: In cities, the story can start with a family living comfortably in their home. But then, you know, that whole life thing happens. Maybe you got a new baby coming or a new job.

RUSTY SMITH: Your family gets bigger, you get smaller, you increase income, decrease income.

BISAHA: Rusty Smith is an architecture professor at Auburn University.

SMITH: Typically, what happens is you will extract equity from your house through its sale, and you'll go buy another one that meets your needs at that moment. And so there's this sort of capital exchange that happens - over time is understood reasonably well to be one of the primary ways a individual or family can accrue wealth. And wealth, as we all know, is in some ways even more important than income.

MA: Yeah, wealth is more important than income in the sense that, you know, if you have kids, they can't inherit your job and your paycheck, right?

BISAHA: Rusty says when it comes to rural homeowners, they are less likely to just sell their home and pass down the money they made to their kids. And instead, it's more likely that the house itself becomes this main thing getting passed down.

SMITH: You know, in rural places, you're often born in the home. You're raised in a home. You get married in that home. Your parents pass away, and you get that home. And it's at that moment that the wealth accrual happens.

BISAHA: There's a saying about the country - people are land rich and cash poor. Rural homeowners, especially in low-income areas like the Black Belt, they might not have anything else to pass down to their kids besides that home.

MA: And this can actually create its own issues because land is a lot harder to split up than cash. Multiple family members often end up inheriting all the land together, and it can lead to some messy family and legal drama that can actually get in the way of building generational wealth.

BISAHA: Reggie Walker's grandmother, she passed down her house to him and other family members. And so far, he's lucky. He's escaped that drama and was able to move back to this land around 2020, but that doesn't mean he was able to move back into the house.

WALKER: When I came out here, my grandmother's house was here, but it was totally dilapidated. It was so dilapidated I could actually take my hands and tear it down.

BISAHA: Oh, so this is, like, loose board just, like, hanging that you're just pulling off the walls.

WALKER: Bingo. Unfortunately, good housing structures is very, very hard to find.

BISAHA: Reggie says the high poverty in places like his part of the Black Belt mean these homes are often just not well maintained. Like cities, rural areas often just don't have enough houses on the market.

WALKER: Now, we do have a lot of mobile homes, but mobile homes lose their value very, very quickly.

MA: Now, modern mobile homes - or manufactured homes, as they're called nowadays - they might do a better job at holding onto their value. But yeah, older mobile homes tend to depreciate fast.

BISAHA: And really, this is a key thing for both rural and urban areas. To build that generational wealth, the house needs to raise or at least maintain its value.

MA: Now, Reggie ended up hurting his shoulder taking down his grandma's old home. So he got help from an unusual group in town - Auburn University's Rural Studio.

BISAHA: Rural Studio is this architecture school trying to answer this important question - how do you make rural homes that are affordable and that will last? For 20 years now, they've been experimenting with different designs to see what works best.

MA: Students from the studio helped Reggie tear down his old home, and they offered to build him a new one for free in exchange for getting to test out some of their ideas.

WALKER: Well, I told them the only thing I needed was a roof over my head and a place to sleep and a place take me a bath. And this is what they gave me, which is absolutely wonderful.

BISAHA: Reggie's new home has that bedroom and has that bath. But when it came to the roof, that's where Rural Studio got experimental.

SMITH: None of the other parts of the house touched that roof.

BISAHA: That's Rusty Smith again, and along with being a professor, he's also the Rural Studio's associate director. And he means exactly what he says, Adrian. Reggie's roof, it actually doesn't touch the rest of the house. And I took some photos when I was there, so here - take a look and tell me what you see.

MA: OK. I've never seen a house like this before. It's like the roof itself is this giant structure that's hovering a few feet above what look like these little sheds. So it almost has the appearance of, like, a car port but for a house.

BISAHA: It is definitely a strange way to be building a house. But it is meant to solve one of the biggest challenges when it comes to rural housing. Now, remember, both Reggie and Rusty, they say rural homeowners, they're more likely to stay in their home when their family grows. So that often means needing to make renovations, like adding an extra bedroom.

SMITH: And it's those very renovations that, in some ways, can actually begin to increase the risk of that home further deteriorating.

BISAHA: That's because renovations often mean cutting into that roof and likely damaging it in the long run, especially when you do it over and over again.

SMITH: Reggie's house was, in some ways, a kind of a direct response to that.

BISAHA: Because the roof is detached and covers a lot of extra space...

SMITH: That house can be modified, expanded, added onto, changed over and over and over and over and over again without ever compromising the kind of big roof structure that protects the whole thing.

MA: Building houses that last means being aware of the unique needs of each area - right? - from the country lifestyle to Alabama weather, from tornadoes to tropical storms coming from the Gulf of Mexico.

SMITH: We also have this other kind of weather that we just call humidity, which is constant. Winter, spring, summer or fall, it's always damp and you - and that can...

BISAHA: Yeah, you don't escape the humidity down here.

SMITH: Yeah, never. And it's really, really hard on physical structures. Being responsive to those kind of conditions is really, really important in building that kind of long-term generational approach to housing.

BISAHA: This is just one of the designs Rural Studio has tested out. And a decade ago, this studio expanded beyond the Black Belt. Last year, the studio worked with partners in a half-dozen states, like a local Habitat for Humanity. The goal is building affordable rural homes that can last long enough to build generational wealth.

(SOUNDBITE OF MUSIC)

MA: This show was produced by Julia Ritchey with engineering by Robert Rodriguez. It was fact-checked by Sierra Juarez. Kate Concannon is our editor, and THE INDICATOR's a production of NPR. Also, you can check out a picture of Reggie's new house with its raised roof in our show notes.

Copyright © 2024 NPR. All rights reserved. Visit our website terms of use and permissions pages at www.npr.org for further information.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

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