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2019

History of Housing Policy in the United States History of Housing Policy in the United States

Lauren Elizabeth Morrow Everett Portland State University, laurenemeverett@gmail.com

Marta Petteni Portland State University

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Citation Details Citation Details Everett, Lauren Elizabeth Morrow and Petteni, Marta, "History of Housing Policy in the United States" (2019). Homelessness Research & Action Collaborative Publications and Presentations. 3. https://pdxscholar.library.pdx.edu/hrac_pub/3

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A Brief History of H

ousing Policy in the United States

[PSU H

omelessness R

esearch & Action Collaborative - Sum

mer Student R

esearch Institute]

Student: Lauren Everett; Marta Petteni (design)

Arm

ed O

ccupation ActThis Act aim

s to remove

the Indigenous Seminole

inhabitants of southern and eastern Florida by populating the area w

ith w

hite settlers. Each man

who cultivated five acres or

more of land, for a period

of five years, would receive

160 acres of land and one year’s rations from

the Federal governm

ent.

George H

ealey ActR

equires ‘means testing’

for public housing built under the Project W

orks Adm

inistration (PWA), ty-

ing social housing eligibility to incom

e. This established public housing as the pur-view

of the poor, and along w

ith government subsidies

for the private housing m

arket, was a significant

step in the emergence of

what Bauer called our duel

housing policy.

Hom

estead ActThis sem

inal land distribu-tion policy officially lasted until 1976. It w

as originally designed w

ith the intention of rem

oving Indigenous residents through settle-m

ent, which w

as a much

cheaper solution than m

ilitary intervention. This w

as the most significant

of these acts, in terms of

volume of land settled (160

million acres). It w

as open to any adult w

ho had not taken up arm

s against the U

nited States, including Black and Asian people, w

omen and im

migrants.

Defense H

ousing C

ongress authorizes the US

Housing Authority to build

World W

ar II defense work-

er housing using funds for low

-income housing. Shortly

thereafter, the National D

e-fense H

ousing Act (Lanham

Act) passes, authorizing the Federal W

orks Agency (FWA)

to construct more defense

housing. The bill includes a clause specifically prohibiting defense housing from

being converted into low

-income

public housing after the war

without congressional ap-

proval. Many of the housing

developments features inno-

vative design and comm

unity features.

National H

ousing Crisis U

S renters face an ‘un-precedented affordability crisis’, w

ith 51% of renters

paying more than 30%

of their incom

e for hous-ing. This includes three quarters of low

-income

households, and 6 in 10 w

omen of color versus 3

in 10 white m

en. Prop 10, A C

alifornia ballot initiative to facilitate the expansion of rent control protections, fails to pass. The opposi-tion cam

paign was funded

by $73 million in donations

from the real estate lobby

and private equity firms.

The home m

ortgage in-terest deduction is w

ritten into the U

S Tax Code. By

the mid-1960s hom

eown-

er tax deductions were

around seven billion dol-lars annually, and by 1984 had reached $53 billion; a sum

almost five tim

es m

ore than all direct federal funding for housing during that year.

The Douglas R

eport is released, recom

mend-

ing annual construction of 500,000 units of low

-income

housing. Instead, President N

ixon issues a moratorium

on all housing activities involving the federal gov-ernm

ent. The combination

of low rental incom

es and lack of federal funding had caused m

any properties to fall into disrepair, and the blighted ‘project’ becam

e the trope of public housing. The H

ousing and Urban D

evel-opm

ent Act of 1968 aim

ed to address concerns about the concentration of poverty by prohibiting construction of high-rise public housing for fam

ilies and children.

World W

ar IThe U

nited States enters the w

ar, and creates The D

epartment of Labor’s

U.S. H

ousing Corpo-

ration (USH

C) and the

U.S. Shipping Board’s

Emergency Fleet C

orpo-ration (EFC

) to provide

McKinney-Vento

Hom

eless A

ssistance ActThe first legislation to specifically address hom

e-lessness, and provides federal support for a m

ulti-tiered system

of homeless

service programs at the

local level . The Federal Em

ergency Managem

ent Agency (FEM

A) was initial-

ly the lead agency tasked w

ith managing the shelter

system for individuals ex-

periencing homelessness,

which w

as shifted to the D

epartment of H

ousing and U

rban Developm

ent (H

UD

) with the passage of

the Act.

Progressive Era H

ousing ReformC

rowded housing conditions in

cities give rise to housing reform

movem

ents. Social workers,

planners, industrialists and others visited housing developm

ents in Europe to study their structure. They w

ere interested in building m

odel developments to raise

working class standards of living

from the slum

s and tenements

that had become dom

inant. Their concerns centered around cram

ped and unsanitary condi-tions, and resulting physical and m

oral degradation. Around the sam

e time, housing developers

started marketing single fam

ily hom

eownership as a source of

stability, status and autonomy

for the modern w

orker. This was

directed at both working-class im

-m

igrant households, and affluent households.

Housing Act

Authorizes federal funding for slum

clearance and ur-ban renew

al. Meanw

hile, federal m

ortgage backing and suburbanization sup-ported through legislation like the Interstate H

ighway

Act of 1956 led to the phe-nom

enon of ‘white flight’

from urban centers. O

ver the next decade, the per-centage of public housing residents w

ho were house-

holds of color increased from

36% to 46%

.

Hom

e Loan CriteriaThe H

ome O

wners Loan

Corporation (H

OLC

) is established. They create a universal property apprais-al system

based on neigh-borhood context that w

ould com

e to have devastating effects for household of color by inform

ing the rating practice know

n as ‘redlining’.

The Housing and

Comm

unity D

evelopment Act

Marks a significant shift in

housing policy, by moving

towards block grants and

designating increased au-thority to local jurisdictions. It rolled seven housing and infrastructure program

s into the C

omm

unity De-

velopment Block G

rant (C

DBG

) program, and w

as the origin of the Section 8 program

.

Donation Land

Claim Act

This Act is intended to ensure the Am

erican claim

over Britain to the Oregon

territory, and to remove

Indigenous people from

desirable land. Each settler w

as entitled to 320 acres, and had to be a w

hite man,

or a white m

an with an

Indigenous mother.

Wagner-Steagall Act

Authorizes local housing au-thorities to issue bonds to fund public housing developm

ents. An adaptation of a previous bill co-authored by the progressive Labor H

ousing Conference and

Bauer, this version eliminated

provisions for nonprofits and cooperatives, and all authority for siting and tenant selection w

as left to local jurisdictions. This last piece m

eant that low

-income public housing

was usually situated in less

desirable neighborhoods, and enabling discrim

ination and concentrated poverty. The ‘equivalent elim

ination clause’ w

as a key piece of the bill, w

hich mandated urban

renewal and slum

clear-ance in equal m

easure with

new dw

ellings constructed.

The ExodustersThe ‘Exodusters’, as South-ern Blacks em

igrating to C

olorado, Kansas and Okla-

homa during the tim

e of the H

omestead Act w

ere known,

sought to escape the oppres-sive racism

of the South and create all-Black com

munities.

They had already seen land grant prom

ises of the Re-

construction era South fall apart w

hen The Freedman’s

Bureau Act (1865) and South-ern H

omestead Act (1866)

were underm

ined by bureau-cratic inefficiency, funding constraints, and local law

s designed to underm

ine them.

The war phase of defense

housing construction is characterized by a decline in quality, and an increase in housing built for Black w

orkers, which accounted for

over 11% by 1944. O

verall, 700,000 residences w

ere constructed under the Lan-ham

Act by the end of the w

ar. By 1955, 87% of de-

fense and war housing had

been liquidated, with 182,000

permanent hom

es sold to residents, investors and vet-erans. O

nly 2% of the total

housing stock created during this tim

e was converted to

low-incom

e public housing.

Lawrence Veiller releas-

es the influential Housing

Reform

: A Hand-Book for

Practical Use in Am

erican C

ities. This guidebook focused on im

proving the m

aterial condition of the poor through housing itself. In later years, the focus of both reform

and valuation w

ould expand to the block and neighborhood.

Rent ControlN

ew York becom

es the first state to enact its ow

n rent control program

, as a re-placem

ent to expiring fed-eral controls im

plemented

under the Emergency Price

Control Act during W

orld W

ar II, and the subsequent Federal H

ousing and Rent

Act of 1947. The city has the longest running pro-gram

in the country.

The Great

Migration

From 1915 to the end of

World W

ar I, 454,000 Black w

orkers would em

igrate from

the south to the north. Prom

pted by ‘pull factors’ of industrial labor dem

and, and ‘push factors’ like the boll w

eevil epidemic, this dem

o-graphic shift also brought the advent of true segregation and ghettoization to urban Black populations. The early tw

entieth century was m

arred by race riots in m

ajor US

cities, as whites registered

their fears over the perceived ‘invasion’, and Black people of all classes w

ere forced into the sam

e highly segregated neighborhoods. The m

igration w

ould continue through World

War II, and end in 1960.

Tax Reform Act

Creates the Low

Income

Housing Tax C

redit (LIHTC

) incentive. This policy pro-vides tax credits for investing in affordable rental housing, and w

ould become an es-

sential pillar of affordable housing provision for de-cades, accounting for 90%

of designated affordable devel-opm

ents.

The National H

ousing Act

passes, and The Federal H

ousing Administration is cre-

ated to offer federally insured m

ortgages through private fi-nancial institutions. The Public W

orks Administration (PW

A) w

as tasked with construction

and renovation of low-cost

housing and slum clearance

projects. 25,000 residences w

ere built in four years. The sam

e year, Catherine Bauer’s

Modern H

ousing is released. The book lays out a vision for a com

prehensive, Europe-an-style governm

ent-spon-sored public housing regim

e that w

ould meet the needs of

all Americans. H

er progressive vision w

ould never come to

fruition.

Great Recession

Triggered by subprime

mortgage securitization,

the financial crisis starts in late 2007 and leads to w

idespread home

foreclosures. Between

2006 and 2014, nearly 10 m

illion Americans lost

their homes. D

uring this tim

e, Wall Street equity

firms bought over 200,000

foreclosed single-family

homes. The crisis had

a disproportioante im-

pact on households of color, w

ho had limited

Herbert H

oover is ap-pointed U

S Secretary of C

omm

erce. His housing

policy focused on promoting

homeow

nership over build-ing affordable rental hous-ing. The real estate industry w

as strongly against pub-licly-funded housing of any kind, and found a com

patriot in H

oover, who felt strongly

that private control of proper-ty and real estate w

as best. This sam

e year the popular “O

wn Your O

wn H

ome” pro-

gram w

as moved from

the U

.S. Labor Departm

ent to the C

omm

erce Departm

ent. These cam

paigns spurred a boom

in construction of single-fam

ily homes, w

hich accounted for 60 percent of fam

ily housing constructed in the 1920s, and 90 percent in the 1930s.

Predatory LendingLenders take advantage of securitized m

ortgages and recent deregulation, targeting loan products to low

-income and m

inority hom

eowners w

ho were

previously excluded from

the homebuying m

arket.

Renter Protection PoliciesC

alifornia becomes the

second state after Oregon

to enact statewide rent

stabilization and no-cause eviction legislation.

18431936

18621940

2018

1913

1968

1917

19871974

1890s

19491933

18501937

1879

19421910

1950

1915

19861934

20071921

2000s2019

Gentrification

In a reversal of mid-century suburban ‘w

hite flight’, m

iddle-class and affluent households start returning to urban centers w

here real estate is cheap. This trend results in in-creasing land values, triggering w

aves of speculative investm

ent on multiple scales.

As a result, residents are displaced from

their neighborhoods through evictions, fore-closures and rent increases - both com

mer-

cial and residential.

Nixon declares the ‘urban

crisis’ over, and scales back social services in the inner-city, leaving com

muni-

ty organizations to fill in the gaps.

1973

Hom

eowner Society

“The present large proportion of families that

own their ow

n homes is both the foundation of a

sound economic and social system

and a guar-antee that our society w

ill continue to develop rationally as changing conditions dem

and.” - H

erbert Hoover, 1925

This quote reflects the preference toward hom

e-ow

nership that would shape U

S housing policy throughout the 20th century and beyond.

Financialization of Rental H

ousingR

ental housing emerges as a m

ajor investment

frontier in the mid-2000s. This unfolded concur-

rently with the subprim

e mortgage boom

, and was

an outcome of the sam

e search for new capital

circuits, enabled by deregulation or lack of regu-lation and oversight. W

eakened rental protections also shaped the nature of financialization (defined as private equity investor-ow

ned property) in urban space, by creating opportunities to trans-form

affordable housing into a new global asset

class. Wall street investors bought about 100,000

rent stabilized apartments in N

ew York C

ity alone in the early 2000s, w

here erosion of rent control created an environm

ent favorable to speculative investm

ent.

Racialization of SpaceW

hile the HO

LC stated there w

as no reason that mortgages couldn’t be

issued in the lower-rated areas, The Federal H

ousing Administration and

private lenders applied the rating system in this w

ay, which privileged

single-family housing in low

-density neighborhoods. This redlining prac-tice m

eant that residents of prediminantly non-w

hite neighborhoods had restricted access to hom

e loans, for improvem

ent or sale. Meanw

hile new

suburban developments often included covenants of racial and religious

exclusion in their deeds, which lim

ited buyers to white C

hristian house-holds. D

iscriminatory real estate practices also dictated w

here non-white

households could buy and rent housing, which created overcrow

ded, racially segregated neighborhoods characterized by disinvestm

ent at the hands of absentee landlords, and underfunded m

unicipal governments.

Whiteness as Property

Harris (1993) argues that the advantages

of whiteness im

plicitly offer powerful in-

centive to maintain system

s of oppression based upon racial hierarchy. M

uch like physical property, the boundaries of w

hite-ness are defined by w

ho is excluded, and w

ho has the power to exclude. As such,

race and access to property was a frequent

topic of policy debate during the westw

ard expansion project of the 19th century.

Early local policies of racial exclusionSan Francisco: In response to grow

ing tensions over Chinese im

migration and labor force com

petition, The W

orkingmen’s Party of C

alifornia was established in 1877 w

ith the intention of passing anti-Chinese

legislation. Over the next several years San Francisco rolled out over a dozen ordinances targeting C

hi-nese laundries, w

hich were a prim

ary means of em

ployment for C

hinese imm

igrant entrepreneurs. In 1886 the C

alifornia Supreme C

ourt ruled that the unequal application of one of these laws (O

rder No.

1569) was a violation of the Equal Protection C

lause of the 14th Amendm

ent. This was the first case to

evoke this defense, which w

ould become key in the C

ivil Rights era.

Baltimore: In 1911 the city enacted the first segregation law

in the United States, aim

ed at Black residents. This legislation w

as presented in the guise of a progressive reform to avoid racial conflict. The ordinance

was officially invalidated w

hen the US Suprem

e Court struck dow

n a similar law

in Louisville in 1917, on the grounds that it lim

ited white hom

eowners’ right to sell their property to w

hom they w

ished. How

ever, the m

ayor of Baltimore continued to uphold it through a variety of tactics.