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A Brief History of Public Housing
Unformatted Document Text:  -10- appeared perfectly functional. Perversely, the renewal process could be quite lengthy, leaving large barren areas in the center of a city waiting for development to begin. The benefits to the poor of new commercial and retail development, if any, were mostly indirect (Teaford 2000). The 1949 Housing Act mandated 810,000 units of public housing be built, but by December of 1951, only 84,600 units were under construction. The 1954 Housing Act called for public housing to be built only in areas of slum clearance and urban renewal. Thus, new public housing did not increase the housing supply, but served to replace demolished housing. Additionally, displacement was a problem for former slum dwellers, as they waited for the promised new housing to be built. As public housing construction declined, investment in urban renewal increased. Between 1957 and 1960 an average of 26,750 public housing units per year were constructed (Biles 2000). Financing Public housing has always been faced with financial difficulties. Congress funded fewer units than were authorized beginning with the first housing act. The 1937 Act funded only capital costs and expected that most operational and maintenance costs would be covered by rental income, though operating subsidies were not explicitly excluded (Schill 1991). Often, though, excess rent was applied to debt payment and maintenance needs were neglected. Congress attributed rising costs in public housing to management problems, although in the 1950’s and 1960’s, high inflation, increasing expenses and aging buildings clearly contributed to higher maintenance costs. Compounding rising inflation, tenant incomes declined from 47.1% to 36.9% of the U.S. median income between 1961 and 1970 (Hays 1995). A small construction boom in public housing between 1969-1970 intensified

Authors: Stoloff, Jennifer.
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-10-
appeared perfectly functional. Perversely, the renewal process could be quite lengthy,
leaving large barren areas in the center of a city waiting for development to begin. The
benefits to the poor of new commercial and retail development, if any, were mostly indirect
(Teaford 2000).
The 1949 Housing Act mandated 810,000 units of public housing be built, but by
December of 1951, only 84,600 units were under construction. The 1954 Housing Act called
for public housing to be built only in areas of slum clearance and urban renewal. Thus, new
public housing did not increase the housing supply, but served to replace demolished
housing. Additionally, displacement was a problem for former slum dwellers, as they waited
for the promised new housing to be built. As public housing construction declined,
investment in urban renewal increased. Between 1957 and 1960 an average of 26,750 public
housing units per year were constructed (Biles 2000).
Financing
Public housing has always been faced with financial difficulties. Congress funded
fewer units than were authorized beginning with the first housing act. The 1937 Act funded
only capital costs and expected that most operational and maintenance costs would be
covered by rental income, though operating subsidies were not explicitly excluded (Schill
1991). Often, though, excess rent was applied to debt payment and maintenance needs were
neglected. Congress attributed rising costs in public housing to management problems,
although in the 1950’s and 1960’s, high inflation, increasing expenses and aging buildings
clearly contributed to higher maintenance costs. Compounding rising inflation, tenant
incomes declined from 47.1% to 36.9% of the U.S. median income between 1961 and 1970
(Hays 1995). A small construction boom in public housing between 1969-1970 intensified


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