In the wake of the pandemic and with growing fears of an impending recession, concerns about access to affordable housing are growing. Because affordable housing is such a complex, multi-faceted subject, advocates are often met with red tape when trying to ensure that people in need can access affordable, comfortable housing.
To circumvent the lack of affordable housing, federal government involvement has created programs and policies to provide security for those in need. But— as with any government initiative— we will have a long way to go. In this blog, we’ll discuss the history of government-sponsored affordable housing programs, our progress, and the work that still needs to be done.
Major Housing Policy Developments in the U.S.
The history of affordable public housing in the United States primarily began in the 1930s in response to an increase in housing insecurity during the Great Depression; in 1934, the National Housing Act was passed as part of President Franklin D. Roosevelt’s New Deal programs. From this came the Federal Housing Administration (FHA) “to encourage improvements in housing standards and conditions."
Further progress was made in 1944 when President Roosevelt signed the Serviceman’s Readjustment Act— also known as the G.I. Bill— into law, which created programs to support World War II veterans. These programs guaranteed low-cost mortgages and low-interest homes to over 2 million veterans. However, this aid was deliberately denied to black veterans under Jim Crow laws.
The 1950s saw a significant post-war boom. Because of America’s thriving economy, there was an increase in home ownership and workforce productivity. To keep up with the rising demand for homes and capitalize on the country’s growth, the Federal Highway Act was passed. The bill authorized the building of the 41,000-mile Interstate Highway System, designed to connect cities across the country and make it easier for people to commute from the suburbs. However, this further segregated disenfranchised communities and displaced thousands by bulldozing over lower-income neighborhoods to complete construction.
In 1968, President Lyndon B. Johnson signed the Civil Rights Act just one week following the assassination of Dr. Martin Luther King. Through this, the FHA protected citizens from discrimination when buying or renting a home and offered special provisions for those seeking federally-assisted housing.
The next major milestone in public housing efforts was the addition of the Section 8 amendment to the Housing Act. This created the Section 8 program that we still have today, providing federal vouchers to low-income families looking to rent from a private landlord. Households are able to pay roughly 30% of their income in rent, and the rest is covered by the voucher. And while this program can help people on the verge of homelessness, it can take years to get approval to get this assistance. Access is also limited because many landlords don’t accept the Section 8 vouchers.
In 1999, public housing was set back by the Faircloth Amendment, which capped the number of public housing units available and halted further construction. Because affordable housing waitlists are already so long, this makes accommodations even more inaccessible to those in need. In 2021, The Rental Assistance Act created a shift in previous affordable housing policy, subsidized through mixed-finance housing to keep up with the increased demand for affordable housing. This reliance on private investment does help meet the financial need but may limit accountability as private investors are not held under the same scrutiny as federal agencies.
Timeline of Government Agencies for Affordable Housing
1934- FDR launches the New Deal programs, forming the FHA
1935- Resettlement Administration is created to address poor housing for farmers & rural people
1937- The United States Housing Act of 1937 establishes the nation’s public housing system
1939- A report estimates that the FHA helped 12 million people improve housing conditions
1944- G.I Bill is passed to help WWII veterans but excluded black veterans
1956- Federal-Aid Highway Act is passed, cutting isolating low-income communities
1965- Congress creates HUD
1968- President Lyndon B. Johnson signs The Civil Rights Act
1974- Congress passes the Housing Choice Voucher Program
1999- Faircloth Amendment caps the allowed number of public housing units
2008- President Bush signs National Housing Trust Fund into law
2012- RAD is created to preserve & improve public housing properties
Affordable vs. Public Housing
Public and affordable housing are often used interchangeably, but there are some key differences. Public housing is publicly owned properties funded through congressional appropriations, cities, and states. 100% of units on these properties are permanently affordable to all low-income households.
Conversely, affordable housing is owned by private developers, investors, or non-profit private corporations. These properties are privately and publicly funded— investors are incentivized to build through tax credits, state bonds, affordable housing state grants, and government revenues.
The Future of Affordable Housing
In our eight-decade history of affordable housing, we still have not found a way to provide everyone with safe and affordable housing. Now more than ever, Americans are dependent on these agencies to maintain a decent standard of living for their families, especially as rising rent prices and stagnant wages make it difficult for lower and middle-class Americans to rent homes.
Because the very funding structure for affordable housing programs puts them at risk, with funding amounts changing from year to year, already volatile programs have trouble maintaining and growing their service scope. At Builders Patch, we help affordable housing developers break ground faster by managing all of their loan applications and projects in one place. Learn more about how partnering with Builders Patch can help supply more affordable housing here.