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The Roots of Sprawl: Housing Policies

Federal housing policy in the 1930s and subsequent decades helped foster the movement of the middle class out of the city into an expanding suburban periphery.

  • As historian Laurence Gerckens notes:
    "The Federal Housing Administration was created in the US Housing Act of 1934 to encourage improvement in housing standards and conditions" and "to provide a system of mutual mortgage insurance." In so doing, Congress encouraged small home construction as a vehicle for creating jobs for relatively unskilled labor and established minimum standards for an FHA-insured home mortgage that guaranteed quick resale of a defaulted unit by assuring that the unit would be of a size and quality desired by those of above average means. The creation of FHA also guaranteed that the dominant American dwelling unit of the future would be the single family home on a suburban lot, and that most Americans of below average means would not have access to these newly developed suburban areas."

    -- from "Ten Events that Shaped the Twentieth Century American City." This article can be ordered and downloaded online, or ordered as part of the PCJ's Our Changing Society reprint set.

  • Historian Kenneth T. Jackson, in his book Crabgrass Frontier: The Suburbanization of the United States, also notes the profound impact of FHA policies on development patterns:
    "... FHA insurance went to new residential developments on the edges of metropolitan areas, to the neglect of core cities. This occurred for three reasons. First, although the legislation [National Housing Act] nowhere mentioned an antiurban bias, it favored the construction of single-family projects and discouraged construction of multi-family housing through unpopular terms ...

    Second, loans for the repair of existing structurs were small and for short duration, which meant that a family could more easily purchase a new home than modernize an old one. ...

    The third and most important variety of suburban, middle-class favoritism had to do with the "unbiased professional estimate" that was a prerequisite to any loan guarantee. ... this mandatory judgement included a rating of the property itself, a rating of the mortgagor or borrower, and a rating of the neighborhood. ... The 1939 Underwriting Manual taught that 'crowded neighborhoods lessen desirability,' and 'older properties in a neighborhood have a tendency to accelerate the transition to lower class occupancy.' ... Reflecting the racist tradition of the United States, the Federal Housing Administration was extraordinarily concerned with 'inharmonious racial or nationality groups.' It feared that an entire area could lose its investment value if rigid white-black separation was not maintained."

  • The development of Island Trees [Levittown] by William Levitt was made possible by federal policies designed to promote suburban, racially exclusive, single family housing.

    -- for more on Levittown, see Expanding the American Dream: Building and Rebuilding Levittown, by Barbara M. Kelly (State Univ. of New York Press 1993)

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