United States Housing Act (1937)

President Roosevelt signed the United States Housing Act (the “Wagner-Steagall Act”) into law on September 1, 1937 [1]. The purpose of the law was, “To provide financial assistance to [state and local governments] for the elimination of unsafe and unsanitary housing conditions, for the eradication of slums, for the provision of decent, safe, and sanitary dwellings for families of low income, and for the reduction of unemployment and the stimulation of business activity, to create a United States Housing Authority, and for other purposes” [2].

New Deal policymakers had been addressing America’s housing problems from the start. The Public Works Administration (PWA) had a Housing Division (1933-1937) that created homes for thousands of families across the nation. In late 1937, the United States Housing Authority (USHA) assumed the Housing Division’s responsibilities and, whereas the PWA’s Housing Division engaged in direct construction and loans to seven limited-dividend corporations, the USHA loaned money to local housing authorities created by state governments. It was thought that local representatives would have the best understanding of their local housing needs [3].

Between September 1937 and June 1941, the USHA lent about $800 million towards the construction of 587 low-rent housing developments, as well as some housing for defense industry workers, creating over 170,000 dwelling units [4]. Tenants were typically expected to pay half the rent, with federal, state, and local governments pitching in the rest [5].

The USHA was originally established within the U.S. Department of the Interior [6], but after the reorganization of the federal government in 1939 it was placed under the newly-created Federal Works Agency [7]. There it stayed until 1942, when it was incorporated into the National Housing Agency and renamed the Federal Public Housing Authority [8]. Housing expert Nathan Straus, Jr., served as the USHA’s head administrator during its entire existence, 1937-1942 [9].

A driving force behind New Deal housing policies was Catherine Bauer Wurster. Wurster “wrote the classic volume ‘Modern Housing’… [and] served as Director of Research and Information for the new (USHA) and as adviser to numerous other federal and local agencies” [10]. Section 1 of the U.S. Housing Act of 1937 states: “It is hereby declared to be the policy of the United States to promote the general welfare of the Nation…” Here, we see another example of how New Deal policymakers embraced the “general welfare” sections of the U.S. Constitution (i.e., the Preamble and Article I, Section 8), as opposed to narrowly focusing on the “common defense” sections.

But public housing has always been highly controversial in the United States, where private supply prevails. While public provision would continue after the war, it would be overshadowed by urban renewal programs launched by the housing acts of 1949 and 1954. In the 1960s, there would be a brief revival of public housing under President Johnson’s Great Society and the U.S. Department of Housing and Urban Development was created. Federal support for public housing continues today in modest ways [11].

Sources: (1) “75th Anniversary of the Wagner-Steagall Housing Act of 1937,” FDR Presidential Library and Museum, https://www.fdrlibrary.marist.edu/aboutfdr/housing.html, accessed June 16, 2015. (2) The full text can be found at https://catalog.hathitrust.org/Record/006738230, Hathitrust Digital Library, accessed June 16, 2015. (3) Federal Works Agency, “First Annual Report, Federal Works Agency, 1940: Fiscal Year Ended June 30, 1940,” Washington, DC: U.S. Government Printing Office, 1940, pp. 159-163. (4) Federal Works Agency, “Second Annual Report, Federal Works Agency, 1941: Fiscal Year Ended June 30, 1941,” Washington, DC: U.S. Government Printing Office, 1941, pp. 118-119 (see table on p. 119). (5) See note 1. (6) United States Housing Act of 1937, Sec. 3(a) (see note 2). (7) See note 3. (8) “Records of the Public Housing Administration,” section 196.1, “Administrative History,” National Archives and Records Administration, https://www.archives.gov/research/guide-fed-records/groups/196.html#196.1, accessed June 16, 2015; Federal Works Agency, “Third Annual Report, Federal Works Agency, 1942: Fiscal Year Ended June 30, 1942,” Washington, DC: U.S. Government Printing Office, 1942, p. 1. (9) “Nathan Straus, Jr. (1889-1961),” Virtual Museum of Public Service, https://www.vmps.us/node/1529, accessed June 17, 2015. (10) “Catherine Bauer Wurster, City and Regional Planning: Berkeley,” calisphere, University of California, https://content.cdlib.org/view?docId=hb658006rx&doc.view=frames&chunk.id=div00031&toc.depth=1&toc.id=, accessed June 16, 2015. (11) Mark Gelfand, A Nation of Cities: The Federal Government and Urban America, 1933-1975. New York: Oxford University Press, 1975. Gwendolyn Wright, Building the Dream: A Social History of Housing In America. Cambridge: MIT Press, 1981. Gail Radford, Modern Housing for America: Policy Struggles in the New Deal Era. Chicago: University of Chicago Press, 1995.