HOUSING

The devastating effects of the Great Depression on both the U. S. home-building industry and the homeowner were immediately visible. Residential home building and home repair came to a near standstill, contributing to unemployment in thousands of related industries ranging from lumber to real estate. Historian Kenneth Jackson calculated that between 1928 and 1933 new home construction dropped 95 percent and expenditures on home maintenance fell 90 percent. By early 1933 half of the nation's homeowners were in default on their mortgages.

In his famous oral history of the Great Depression, Hard Times (1970), Studs Terkel recounted how Americans blamed themselves or other family members for the humiliation of repossession. The nation's foremost symbol of individualism and security was revealed to be just another commodity subject to seizure. In a typical account, Slim Collier recalled how his father, a tool and die maker, responded to the loss of his real estate with "anger and frustration [that] colored my whole life." A decade earlier, local bankers and businessmen probably applauded the real estate investments made by Collier's father as a sound strategy to improve his economic and class standings.

Families who could not afford to pay their mortgages or rents had few options. In order to avoid the public humiliation of eviction, most moved in with other family members or friends before legal proceedings were instituted. In both rural and urban areas, some families remained as squatters in their own houses or apartments or in homes vacated by others who had been evicted by banks or landlords. A small minority sought shelter or housing assistance from religious or private charitable organizations. Homeless families gathered in makeshift communities called Hoovervilles, devoid of safe drinking water and sanitation facilities. Automobiles, railroad cars, grain bins, barns, sheds, and shacks also provided shelter for members of the peaceful army of the dispossessed.

The devastation of the home-building industry and the dissolution of the American Dream of home ownership destroyed any vestiges of a laissez-faire approach to the housing market. Seemingly moved by the plight of the millions of families who suffered the social and economic indignities of eviction, deferred ordinary home maintenance, or abandoned hope of purchasing a home, Congress and the administrations of Presidents Herbert Hoover and Franklin D. Roosevelt passed a plethora of housing bills. Both administrations and Congress considered the revitalization of the home construction, real estate, and home finance sectors of the economy to be paramount in solving the housing problems faced by ordinary Americans.

Seeking to maintain the status quo, the 1931 President's National Conference on Home Building and Home Ownership downplayed calls for the creation of a federally financed public housing program. Instead, it promoted housing legislation and policy that encouraged suburban growth and urban decline—trends that had emerged a decade earlier with the rise of automobile ownership and road construction. The first piece of housing legislation supported by President Hoover, the Federal Home Loan Bank Act (1932), increased the amount of capital available to banks to lend to home builders. The Emergency Relief and Reconstruction Act, passed in 1932 with support of Hoover, authorized the Reconstruction Finance Corporation to offer loans to limited-dividend housing corporations for the construction of urban housing. The only project instituted under the program was New York City's Knickerbocker Village—New York was the only state that had the necessary enabling legislation.

Under President Roosevelt's New Deal, the number, scope, and effectiveness of federal housing programs increased dramatically. As historian Gail Radford observed in 1996, under Roosevelt, a "bifurcated" federal housing policy emerged that . . . provided broad political and financial support for housing agencies that aided upper- and middle-income families, such as the Home Owners Loan Corporation (HOLC), established in April 1933, and the Federal Housing Administration (FHA), created in June 1933. By contrast, programs that assisted families who could not afford to purchase or rent a home on the private market, such as those created under the Federal Emergency Administration of Public Works Administration (PWA) in 1933 and the United States Housing Authority (USHA) in 1937, were poorly funded and subject to political attack.

The HOLC and the FHA did not directly spur economic recovery, but they did help to preserve the economic and social value of home ownership among wage-earning families. According to one estimate, the HOLC refinanced approximately one-tenth of the nation's nonfarm residences between 1933 and 1935. At the same time, the policies adopted by these agencies supported informal practices of racial and social class residential segregation and urban divestment. Through its sale of affordable home mortgage insurance and its creation of minimal construction standards, the FHA encouraged the growth of outlying suburban areas, which were usually segregated by race and class, and discouraged investment in older, urban neighborhoods where greater racial, ethnic and religious diversity often existed.

Ironically perhaps, the New Deal agencies that helped to preserve the commercial housing market, such as the FHA, are less celebrated than two other Roosevelt administration initiatives that frequently are portrayed as political failures—the federally subsidized, low-income public housing program and the model community programs. In 1933 and 1934 the PWA's Division of Housing offered low-interest loans to several limited-dividend housing corporations for the construction of urban housing. Catherine Bauer, author of the classic 1934 study Modern Housing, regarded Philadelphia's PWA-financed Carl Mackley Houses as a model community, partly because of the way architects Alfred Katsner and Oscar Stonorov used architectural design and community planning to foster resident interaction. The optimism Bauer and other reformers expressed in the early days of the public housing movement began to erode when the PWA discontinued the loan program in 1934 and began to build public housing directly. Although a few PWA-built public housing developments, such as Atlanta's Techwood Homes, featured sleek international-style architecture, civic art, and community facilities, inadequate funding resulted in the elimination from most developments of the amenities advocated by reform-minded planners.

The USHA inherited the public housing program from the PWA in 1937 upon the passage of the United States Housing Act, commonly known as the Wagner-Steagall Act. The USHA provided long-term, low-interest loans to local public housing authorities for the construction of public housing developments, and then it subsidized their operation. Strict per-unit construction cost limits inserted into the Wagner-Steagall Act by the political allies of the home-building, real estate, and banking sectors resulted in housing that was frequently inferior in terms of location and appearance, and its inhabitants were economically and socially stigmatized.

In 1937 the Farm Security Administration was assigned responsibility for the Greenbelt Town and Subsistence Homestead programs started three years earlier. Originally under the direction of Roosevelt braintruster Rexford G. Tugwell, the three Greenbelt towns—Greenbelt, Maryland; Green-dale, Wisconsin; and Greenhills, Ohio—demonstrated the social and economic value of comprehensive community planning and the merit of alternatives to commercial housing. Subsistence Homesteads such as Arthurdale, West Virginia, which combined subsistence agriculture and industrial labor shared at least two characteristics with the low-income, public housing program: Both were woefully underfunded, and both were highly vulnerable to political attack. Neither the low-income public housing developments nor the experimental communities built under the New Deal excited sufficient interest to muster the political and economic power necessary to bring about a fundamental shift in patterns of housing development and ownership.

The Great Depression threatened the American Dream of homeownership, practically extinguished the demand for new residential home building, and dramatically curtailed home improvements. Unwilling to accept the political consequences of a further reduction in housing standards, Congress and Presidents Hoover and Roosevelt assembled the funds necessary to shore up the declining private fortunes of the home-building industry and validate the sanctity of home ownership. But the United States's housing woes did not end with the Great Depression: mobilization for World War II only worsened the problem wage-earning families in rural and urban areas encountered during the Depression—a scarcity of affordable housing. Despite massive federal government intervention, the United States remained one-third poorly housed throughout the Great Depression.

BIBLIOGRAPHY

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