The federal government provided funds to local public housing agencies to build housing for low-income families.
The Housing Act of 1937 built off of the Housing Act of 1934, which created the Federal Housing Administration (FHA) that worked to reduce the flood of bank foreclosures on home ownership that had been de-stabilized due to the Great Depression. The Housing Act of 1937 focused on the construction of public housing units to replenish the depleted national rental housing stock.
The Housing Act of 1937:1
- Created local public-housing agencies (PHAs) throughout the country.
- States and localities could decide whether they wanted to create PHAs or not.
- Public housing properties were owned by these PHAs.
- Federal government assistance for capital was provided.
- Local authorities had the ability to choose elements of their PHAS such as design, location and requirements for who could live in the developments.
- Most local funding came from rent, as residents had to high enough income to afford rent.
In the mid-1930s, the Home Owners Loan Corporation, established by the FHA, created maps for over 200 cities throughout the country, drawing lines to determine what neighborhoods were good investments for home loans and those who were to risky in to invest in at all. The result it what is now called redlining, which helped worsen racial and economic disparities in home ownership to this day and helped set the stage for Urban Renewal in the late 1940s and 1950s.
Neighborhoods were graded based the racial and ethic class and identification, quality of the current housing stock, and recent history of housing sales and renting costs. For more information on Redlining, see The University of Richmond’s report on Redlining in New Deal America.
For more information on Public housing, see here.
For the full text of the Housing Act of 1934, see here.
Endnotes
1. https://fas.org/sgp/crs/misc/R41654.pdf