U.S. Housing Acts
A (mostly) comprehensive list of federal housing legislation, in chronological order.
The following is a list of federal housing legislation, sorted by the president in office during passage. Beside each act is the public law number, date the act was passed, a link to the original act, followed by a summary of the important points of each act.
This post was created by combining three sources who reviewed the history of federal housing laws: Coan (1969), Soifer et al. (2014), and McCarty, Perl, and Jones (2019).
1930s
Herbert Hoover
Federal Home Loan Bank Act
AN ACT To create Federal Home Loan Banks, to provide for the supervision thereof, and for other purposes.
Home Owners Loan Act of 1933
“The Federal Government first took a major step into [housing] in 1933 when, in the depths of the depression, it authorized the creation of the Home Owners’ Loan Corporation. This Act enabled the Corporation to refinance the mortgages of homeowners faced with foreclosure and at the same time saved many financial institutions from insolvency because of the inability of these homeowners to pay off the then prevalent short-term mortgages held by these institutions.” (Coan 1969)
National Industrial Recovery Act of 1933
This Act, “in order to provide employment, authorized the use of Federal funds for the purpose of financing low-cost and slum clearance housing. Although the prime purpose of this legislation may have been to alleviate the financial distress and unemployment occasioned by the depression, the Federal Government now found itself in the business of being concerned about how its citizens were housed.” (Coan 1969)
Franklin D. Roosevelt
National Housing Act of 1934
“The broad objectives of the act were to:
encourage lenders to invest in housing construction, and
stimulate employment in the building industry.
The Act created the Federal Housing Administration (FHA). The FHA insured lenders against losses on home modernization and home improvement loans, created the Mutual Mortgage Insurance Fund to fund the operation of the newly created mortgage insurance programs, and established national mortgage associations to buy and sell mortgages.”
“The FHA also institutionalized” the idea of 20-year mortgages. “If borrowers defaulted, FHA insured the lender for full repayment.”
“In the early 1930s, a housing division was added to President Franklin D. Roosevelt’s Works Progress Administration (WPA). The Housing Division acquired land across the country and built multifamily housing projects for lower-income families. However, the Housing Division’s activities proved controversial with local government officials who felt they were not consulted in the process.” (McCarty, Perl, and Jones 2019)
This Act “created the Federal Housing Administration, established the Federal Savings and Loan Insurance Corporation, and authorized the chartering of national mortgage associations to provide a secondary mortgage market. This Act was to spawn three major governmental institutions that would play a significant part over the next three decades in encouraging the large-scale provision of single-family housing in this country.
The Federal Housing Administration, by demonstrating the feasibility of long-term mortgages and low down-payments, now an accepted practice in the mortgage field, would in later years be the means by which the great spurt in suburban development that took place after the Second World War would be made possible.
The vast system of federally insured savings and loan associations would be another important cog in the ever-increasing percentage of homeownership that was to be seen during this period.
The Federal National Mortgage Association, chartered pursuant to the provisions of the National Housing Act, would show the way to a true national market for federally insured or guaranteed housing mortgage paper.” (Coan 1969)
National Housing Act of 1937
This act “replaced the WPA’s Housing Division by establishing the U.S. Housing Agency (a precursor to today’s Dept. of Housing and Urban Development), and a new Low-Rent Public Housing program. States that wished to receive assistance in building low-rent public housing were required to establish quasi-governmental local public housing authorities (PHAs). These PHAs could then apply to the federal government for funding in the construction and maintenance” of developments.
“The act declared that it was United States policy to
promote the general welfare of the nation by employing its funds and credit, as provided in this Act, to assist the several states and their political subdivisions to alleviate present and recurring unemployment and to remedy the unsafe and unsanitary housing conditions and the acute shortage of decent, safe, and sanitary dwellings for families of low-income, in rural or urban communities, that are injurious to the health, safety, and morals of the citizens of the nation.
Housing was later a major issue in the presidential and congressional races of 1948, with Harry S. Truman pledging to address the postwar housing shortage and urban slums.” (McCarty, Perl, and Jones 2019)
This Act, “building upon experience developed under earlier legislation which authorized the Federal Government to build housing for those who could not afford it in the private market, initiated the low-rent public housing program, basically unchanged in concept [in 1969]. This Act, with its emphasis upon the clearance of an equivalent number of substandard or slum dwelling units for those built by a local housing authority with Federal assistance, also was a forerunner to later legislation that focused specifically on the elimination of slum properties.
During the war years, the Federal Government’s involvement in housing was primarily directed toward providing shelter for military personnel and defense workers and their families. However, one of the major provisions enacted during this time was Title VI of the National Housing Act (P.L. 77-24), which would be later modified to encourage the insurance of mortgages financed under extremely liberal terms for the purpose of providing rental housing for veterans. This program would later come to be known as the ‘608’ program.” (Coan 1969)
1940s
Franklin D. Roosevelt
Servicemen’s Readjustment Act of 1944 (G.I. Bill)
This Act “contained provisions for the home financing plan for veterans called the Veterans Mortgage Program. The program provided mortgage insurance for 100% of the mortgage amount with no down payment, lower interest, and long terms. The 4%, 30-year Veterans Administration-insured mortgage not only allowed easy access to home mortgages, but by 1965 it had also contributed to the reduction of the annual cost of home ownership from 30% of median income to 21%. As a result, the increase in home ownership between the years of 1940-1956 topped that of the country’s entire preceding existence.” (Soifer et al. 2014)
Harry S. Truman
Housing Act of 1949
This Act “declared the goal of ‘a decent home and a suitable living environment for every American family.’ The act:
established a federal urban redevelopment and slum clearance program, authorizing federal loans of $1 billion over a 5-year period to help local redevelopment agencies acquire slum properties and assemble sites for redevelopment;
reactivated the public housing program for low-income families (which had been on hold during World War II), authorizing subsidies to local housing authorities sufficient to build 810,000 units over six years;
expanded the FHA’s mortgage insurance program to promote home building and homeownership;
created within the U.S. Dept. of Agriculture a program of financial assistance and subsidies to improve housing conditions on farms and in rural areas; and
authorized federal grants for research, primarily to improve the productivity of the housing industry.” (McCarty, Perl, and Jones 2019)
“It was in this Act that a National Housing Policy was set forth by the Congress, including the goal of a decent home and a suitable living environment for every American family. To help achieve this goal, a very substantial increase was made in the amount of low-rent public housing authorized under the United States Housing Act of 1937, and a comprehensive program of assistance for the provision of rural housing was authorized by the Dept. of Agriculture. However, this goal was not quantified until the Housing and Urban Development Act of 1968.
Another major feature of the 1949 Act was the institution of Federal assistance in the form of loans and grants to cities to carry out slum clearance and urban redevelopment activities. This program, now known as the urban renewal program, was a recognition that serious environmental problems existed in the older sections of our cities, that many of the problems could not be corrected without a complete clearance of the existing deteriorated and dilapidated structures and a complete rebuilding of these areas for both housing and non-housing uses, and that it was a Federal responsibility to help the cities cope with these problems. With the enactment of this program, the government was now committed to concerning itself with the urban environmental needs of the country as well as its housing needs.” (Coan 1969)
“Democrats and Republicans joined to pass the landmark Housing Act of 1949, which committed the country to ‘the goal of a decent home and suitable living environment for every American family.’ The act also authorized the Urban Redevelopment Program, which provided federal funds for the demolition of slum housing in cities that established an urban renewal authority.
Although the Housing Act of 1949 was relatively comprehensive in scope, political leaders remained reluctant to displace the private sector’s dominance in the housing industry. The U.S. Congress under President Harry Truman declined to include in the act a direct federal loan program for housing authorities and a housing program for low-income families ineligible for public housing. Even the Slum Clearance Program (later called “urban renewal”) financed urban demolition rather than development to provide an incentive for private builders to invest in urban areas instead of the more easily developed suburbs.
The private sector-public funding model of home ownership was not the only housing problem in postwar America. The New Deal had laid the groundwork for what became a “two-tract” housing system: government-supported home ownership for the middle class and limited “special” governmental programs for low-income renters. A Commission on Housing appointed by President Dwight Eisenhower examined the failures and inequalities of the two systems. The commission’s report led to the passage of the Housing Act of 1954.” (Soifer et al. 2014)
1950s
Dwight D. Eisenhower
Housing Act of 1954
This act “authorized a broadening of the slum clearance and urban redevelopment program to include assistance for not only clearance activities, but also efforts aimed at preserving existing structures in run-down areas, where rehabilitation and conservation activities could bring these structures and their surroundings up to a reasonable standard and achieve the re-establishment of a stable neighborhood.
The Act required (now known as the workable program for community improvement) that a community, in order to qualify for assistance under the urban renewal and low-rent public housing programs, as well as certain FHA programs enacted to complete the urban renewal program, must indicate a willingness on a planned basis to take such necessary steps on its own as were possible to prevent further deterioration and work toward the establishment and preservation of a desirable community.
The 1954 Act also rechartered the Federal National Mortgage Association with the explicit intention that it ultimately be converted to full private ownership, a goal to be realized in the 1968 Act, and authorized the initiation of the urban planning assistance program, commonly known as the ‘701’ program. This latter program, initially authorizing Federal grants to assist planning in communities under 25,000 population and for metropolitan areas, was the Federal Government’s first decisive legislative step in the broad area of urban development as opposed to the narrower concern of good housing and the removal of blight.” (Coan 1969)
“First, the law acknowledged that private mortgage insurance mechanisms of the Federal Housing Administration (FHA) would not work for the inner city, so it established special insurance for housing in urban renewal areas. Second, the law also allowed private financing under the restructured Federal National Mortgage Association (FNMA, or Fannie Mae).
By allowing private investors to meet the demand for home mortgage money, Fannie Mae placed no demands on the federal budget. However, investor demands to limit risk soon pushed Fannie Mae and the FHA away from acting in the older areas of cities, diluting the intended benefits of the legislation.
The 1954 Housing Act required urban renewal authorities to submit a workable program for redevelopment after slum clearance in an attempt to correct the unilateral destruction of inner-city neighborhoods. The controversy over community destruction and its racial implications fueled action by progressive planners, settlement house and community workers, and civil rights leaders. Their unified response to “federal bulldozers” and “Negro removal,” as they termed this community destruction, resulted in improved relocation benefits for renters and citizen participation in planning in the reauthorization of the Housing Act in 1961.” (Soifer et al. 2014)
Housing Act of 1959
This Act “was the first significant instance where government incentives were used to persuade private developers to build housing that would be affordable to low- and moderate-income households.” Section 202 was the Housing for the Elderly program, through which “the federal government extended low-interest loans to private nonprofit organizations for the developments of affordable housing for moderate-income residents age 62 and older. Low-interest rates were meant to ensure that units would be affordable, with nonprofit developers able to charge lower rents and still have adequate revenue to pay back the government loans…
Section 202 is the only federal housing program that funds housing exclusively for elderly persons, although from approximately 1964 to 1990, non-elderly persons with disabilities were eligible for residency in Section 202 properties. Although the Section 202 program initially provided low-interest loans to nonprofit developers, since the early 1990s the program has provided nonprofit developers with capital grants, together with project rental assistance contracts (rental assistance that is similar to project-based Section 8). The current version of the Section 202 program serves very low-income elderly households (those with incomes at or below 50% of area median income).” (McCarty, Perl, and Jones 2019)
1960s
John F. Kennedy
Housing Act of 1961
This Act “further expanded the role of the private sector in providing housing to low- and moderate-income households. The act created the Section 221(d)(3) Below Market Interest Rate (BMIR) housing program, which both insured mortgages to private developers of multifamily housing and provided loans to developers at low interest rates. The BMIR program expanded to pool of eligible borrowers to private for-profit developers and government entities, as well as nonprofit developers. Eligible developers included cooperatives, limited-dividend corporations, and state or local government agencies. Like the Section 202 program, the low interest rates in the BMIR program were meant to ensure that building owners could offer affordable rents to tenants.” (McCarty, Perl, and Jones 2019)
This Act “created below-market interest rate subsidies known as the 221(d)(3) and 221(d)(4) programs and enabled the government to step in to purchase housing project mortgages. Public housing for the poorest families was expanded, and 100,000 units of low-rent public housing were added for the lowest income families. As a result, the below-market subsidy mechanisms established a second mode of ‘poor people’s housing’ that was separate from the conventional real estate industry and the income mix that had previously characterized minority neighborhoods.
Even though President Kennedy allocated $2 billion for urban renewal, the increased federal spending under the Housing Act of 1961 emphasized physical development as the answer to housing problems in poor neighborhoods. Although the direct federal development support did help fill the vacuum left by the departure of the private sector from these neighborhoods, the public housing and government programs that replaced the private sector functions created an even larger divide between poor families and mainstream markets.” (Soifer et al. 2014)
This Act “saw the first major effort by the Federal Government to attempt to provide housing for that large segment of the population whose incomes were too high to permit them to qualify for low-rent public housing, but too low to afford standard housing available in the private market. This was done through amendments to Section 221 of the National Housing Act, which had been enacted in 1954 for the purpose of providing favorable financing terms for housing for families displaced as a result of urban renewal or other governmental activities.
This took two forms: first, through the insurance of 3% down payment mortgages for terms up to 40 years on homes; and secondly, through the insurance of mortgages for apartment projects with interest rates set at the average cost to the Federal Government of borrowing money. This latter provision, commonly known as the 221(d)(3) below-market interest rate (BMIR) program, authorized 100% mortgages to public bodies, nonprofit organizations, and cooperatives, and 90% mortgages to corporations willing to limit their return to not in excess of 6% per year on their 10% equity investment. The funds for these below-market interest rate loans were to be made available by the Federal National Mortgage Association under its special assistance program, first authorized in 1954 to support mortgages for which there was not a ready market.
The 1961 Act also saw a major step forward in the Federal Government’s concern about the way the country’s urban areas were growing and the environment which was being created in these areas. It authorized grants to assist states and local communities to acquire land for the provision of permanent open space and the first direct assistance for the provision of mass transportation facilities in urban areas.” (Coan 1969)
Lyndon B. Johnson
Housing Act of 1964
This Act, “among other things, endeavored to further encourage rehabilitation, instead of the clearance of run-down urban neighborhoods, by authorizing a direct 3% loan program to property owners to rehabilitate their properties located in urban renewal areas and the first Federal assistance for code enforcement efforts by a community.
The Act also took cognizance of the fact that the ever-increasing complexity of the problems confronting our urban areas and the number of programs to deal with them had caused a new problem– the lack of enough, adequately trained persons to deal with them. It authorized direct Federal assistance to States to establish programs to train professionals in community development and Federal fellowships for the graduate training of city planners and other urban oriented specialists.” (Coan 1969)
Housing and Urban Development Act of 1965
This Act “added rental assistance to the list of incentives for private multifamily housing developers that participated in the Section 221(d)(3) BMIR program. The Rent Supplement Program… capped the rents charged to participating tenants at 20% of their incomes and paid building owners the difference between 20% of a tenant’s income and fair market rent. P.L. 89-117 also created the Section 23 leased housing program, which was the first program to provide rent subsidies for use with existing private rental market units.” (McCarty, Perl, and Jones 2019)
“A major step to involve the private sector in the provision of housing for those who could not afford it was taken in the Housing and Urban Development Act of 1965 with the enactment of the rent supplement program as a private counterpart to the low-rent public housing program. Under this program, a family with an income low enough to qualify for public housing could obtain a unit in a privately owned rental project with a market rate mortgage insured by FHA, paying 25% of its monthly income toward its rent, with the remainder being paid on its behalf to the project owners by the Federal Government. As the family’s income increased, the subsidy would decrease until ultimately the family would be able to pay the full cost of its rent. This Act fixed the maximum interest rate on the 221(d)(3) BMIR program at 3% instead of tying it to the going Federal rate, which was now threatening to reach 4%. It enacted a provision authorizing a local public housing authority to utilize the assistance received for the Federal Government to lease units in privately owned buildings for eligible low-income tenants, rather than constructing publicly owned projects.
The 1965 Act further expanded the Federal Government’s concern about the quality of our environment and the way in which our urban areas were growing. The open-space land program was substantially expanded; grants were authorized to help communities to provide water and sewer facilities and neighborhood centers and to acquire land needed for future development; and FHA mortgage insurance was authorized to cover the cost of acquiring and readying, through the installation of necessary site improvements, large tracts of land for the development of residential and related uses.
Also in 1965, the Congress recognized that the problems of the city had come of age and should be considered on a par with agriculture, parks and other major concerns of the Nation by establishing the Department of Housing and Urban Development.” (Coan 1969)
Civil Rights Act of 1968
The Fair Housing Act, enacted as Title VIII of the Civil Rights Act, “prohibits discrimination in the sale, rental, or financing of housing based on race, color, religion, national origin, sex, familial status, and handicap” (familial status and handicap were added as part of the Fair Housing Amendments Act of 1988, P.L. 100-430). “In addition to prohibiting discrimination, the Fair Housing Act also requires HUD and other federal agencies to administer their housing and urban development programs in ways that affirmatively further fair housing. In other words, as determined by courts, HUD is to prevent segregation and ensure that housing is open to everyone.” (McCarty, Perl, and Jones 2019)
Housing and Urban Development Act of 1968
This Act “created the Section 236 and Section 235 programs. In the Section 236 program, the government subsidized private developers’ mortgage interest payments so that they would not pay more than 1% toward interest. Some Section 236 units also received rent subsidies (referred to a Rental Assistance Payments [RAP]) to make them affordable to the lowest-income tenants. The Section 235 program instituted mortgage interest reduction payments similar to the Section 236 program, but for individual homeowners rather than multifamily housing developers. Through it, eligible borrowers could obtain FHA-insured mortgages with subsidized interest rates. As the program was originally enacted, HUD was to make subsidy payments to the lender in order to reduce the interest rate on the mortgage to as low as 1%…
The Section 236 program provided mortgage insurance to housing developers for the construction and rehabilitation of rental housing, and it continues to provide mortgage subsidies to building owners through a mechanism called Interest Reduction Payments (IRPs). IRPs are subsidies to owners that ensure they will only pay 1% interest on their mortgages. Given the reduced financing costs, owners can charge below-market rents for Section 236 units.” (McCarty, Perl, and Jones 2019)
“In [this] Act, the model cities program was authorized. Enactment of this program represented a recognition of the fact that it was often not sufficient to just renew the physical character of a neighborhood. It was also necessary to improve the social and economic conditions of the area: in effect, to give the people who lived in the large blighted areas of our cities not only the opportunity to have sound building and well paved streets, but also the opportunity to realize such basic goals as adequate employment, good education and proper medial care. It represents a recognition that these improvements must be achieved on a coordinated basis by a concentration of Federal, state, local, and private efforts and that the people whose lives are to be affected by these activities should have an opportunity to participate in the decisions affecting them.” (Coan 1969)
“The United States was still reeling from urban riots in the late 1960s… The mainstream political establishment, in an attempt to pacify, rectify, or maybe even buy off the public (depending on one’s political views), responded immediately. The goal became to increase black home ownership as quickly as possible, and the Section 235 and 236 Programs, which addressed minority home ownership and indigenous nonprofit ownership of rental property respectively, were established in the Housing Act of 1968…
Abuse and failure were the consequences of such a grand gesture. Money in the Section 235 Program flowed through whatever mechanisms generated the highest volume and numbers. Whatever positive effects the program had on building the assets of African Americans (Johnson & Sherraden, 1992) has to be balanced with the unintended side effect of destroying neighborhoods. Realtors used scare tactics and other block-busting methods to increase the volume of property available to first-time black homebuyers. They infiltrated predominantly which and integrated neighborhoods on the edges of ghettos and incited white flight. Adequate screening and support of homebuyers were sacrificed for volume (Pietilla, 2010). Virtually the whole west side of Chicago, the east and inner west side of Detroit, as well as other similar urban neighborhoods, experienced a cataclysmic change. The process was so corrupt that many realtors, mortgage bankers, and FHA officials went to jail for exploiting and abusing the program…
The Section 236 Program, which provided for nonprofit ownership of rental property, also fell victim to the “increase numbers at any cost” directive. This program was seen as an untapped vehicle to increase property ownership in the black community, so the federal government aggressively pursued black nonprofit institutions (e.g. fraternal organizations, churches) as sponsors for large-scale subsidized apartment properties. To compensate for the organizations’ inexperience in property management, HUD included the services of a consultant in each property deal. The consultant’s job was to assist the sponsor with planning the project as well as aiding in the application, negotiation, and acquisition phases of securing the property. For this service, the consultant received a 1% commission, payable at the time of the property’s closing.
The consultants were motivated to close deals and were effective at getting projects through the commitment pipeline to construction. However, as soon as the deal was done, the consultant moved on to the next project and the next commission, leaving an inexperienced nonprofit organization to manage the property. The result was chaos, and many projects failed. The federal government shouldered the negative financial impact of a high rate of foreclosures as well as a growing hostility toward nonprofit housing corporations among the public and federal agency staff…
The political pressures on the Model Cities program to produce large-scale results quickly also condemned the program to failure. For example, it called on community institutions to increase the volume of housing production by 400 to 1000% in just a year or two. The complications of achieving volume overwhelmed the program’s capacity and spirit. The government could not, or did not, continue to provide the massive, long-term resources that were needed in order to continue. Johnson’s attention subsequently shifted from the domestic housing agenda to the Vietnam War. Without adequate resources and federal support, the Model Cities program was ultimately canceled in 1974.” (Soifer et al. 2014)
Richard Nixon
Housing and Urban Development Act of 1969
“Under the public housing program, tenants generally paid rent in an amount equal to the cost of operating the assisted housing in which they lived. Over time, as operating costs rose, there was a concern that the below-market rents being charged were too high to be affordable to the poorest families. The Brooke Amendment, which was included as part of [this Act], limited tenant contributions toward rent in all rent assisted units (including public housing and all project-based rental assistance units) to an amount equal to 25% of tenant income (this was later raised to 30%). The Brooke Amendment is considered to be responsible for codifying an income-based rent structure in federal housing programs. (McCarty, Perl, and Jones 2019)
1970s
Richard Nixon
Housing and Community Development Act of 1974
“By the early 1970s, concern was growing about the cost, efficacy, and equity of the construction-based housing subsidy programs, such as the Section 236 and public housing programs… President Nixon declared a moratorium on all new activity under the major housing subsidy programs– except for the Section 23 leased-housing program… Assisted housing activity slowly restarted in response to lawsuits and new legislation.
The [1974 Act] was the first omnibus housing legislation since 1968… The act created a new low-income rental assistance program, referred to as Section 8. Although the 1960s had seen rental assistance programs like Rent Supplement and Section 23, the scale of the Section 8 program made it the first comprehensive rental assistance program. The Section 8 program combined features of the Section 236 program, which was popular with advocates of construction-based subsidies, and the Section 23 leased-housing program, which used the existing stock and was popular with the Nixon Administration. Through Section 8, the federal government provided private property owners monthly assistance payments for new or substantially rehabilitated rental units. In exchange for monthly rental payments, property owners agreed to rent to eligible low-income families (defined as families with incomes at or below 80% of local area median income), who would pay an income-based rent. It also provided PHAs with the authority to enter into rental assistance contracts for existing, private market units that met certain quality standards.
…The Community Development Block Grant (CDBG) program… is administered by HUD. ..Its purpose is to develop viable urban communities by providing decent housing, a suitable living environment, and expanding economic opportunities primarily for low- and moderate-income persons. The CDBG program distributes 70% of total funds through formula grants to entitlement communities– central cities of metropolitan areas, cities with population of 50,000 or more, and urban counties– and the remaining 30% goes to states for use in small, non-entitlement communities.
Recipient communities may use CDBG funds for a variety of activities, although at least 70% of funds much be used to benefit low- and moderate-income persons. Eligible activities include the acquisition and rehabilitation of property for purposes such as public works, urban beautification, and historic preservation; the demolition of blighted properties; services such as crime prevention, child care, drug abuse counseling, education, or recreation; neighborhood economic development projects; the rehabilitation or development of housing; and housing counseling services.” (McCarty, Perl, and Jones 2019)
“President Richard Nixon came to office determined to cut federal domestic spending on antipoverty, urban renewal, housing, employment and training, education, and welfare programs. He offered local politicians a compromise: In exchange for fewer federal funds and smaller budgets, he would give them more control over how they spend the federal funds they received… [through] a ‘block grant.’
… [T]he Nixon administration… locked horns with Congress and was unable to make the changes it desired to existing federal housing and development programs quickly. Therefore, Nixon issued an executive order that placed a moratorium on housing expenditures, freezing even projects that had already received federal commitment for redevelopment. The impasse between Nixon and Congress was not resolved until the Housing Act of 1974, which merged existing urban renewal programs into the Community Development Block Grant (CDBG) and consolidated a variety of housing programs into the Section 8 rent subsidies program.” (Soifer et al. 2014)
Jimmy Carter
Housing and Community Development Act of 1977
“In 1977, Congress enacted the Community Reinvestment Act (CRA) as part of the [1974 Act] (enacted as P.L. 95-128). The CRA affirms that federally insured depository institutions have an obligation to meet the credit needs of the communities in which they are chartered and accept deposits, consistent with financial safety and soundness considerations, and requires federal banking regulators to assess the extent to which banks are meeting those needs. The enactment of the CRA grew out of concern that banking deposits were funding lending activities across the country at the expense of providing credit in certain areas where deposits were collected, thereby contributing to neighborhood disinvestment.” (McCarty, Perl, and Jones 2019)
“While courting private lenders to make mortgage and business loans in viable but economically threatened neighborhoods, organizers accidentally discovered the practice of redlining… In response, Congress enacted the Home Mortgage Disclosure Act, which required financial institutions to report the geographic origins of their deposits and the destination of the investments. The activists then asked for prescriptive action. The response was the Community Reinvestment Act (CRA) which required financial institutions to meet the credit needs of the communities from which they took their deposits.” (Soifer et al. 2014)
1980s
Ronald Reagan
Housing and Urban-Rural Recovery Act of 1983
“Over time, the use of Section 8 in new construction and substantial rehabilitation projects was found to be more expensive than its use in existing housing. The [1983 Act] repealed HUD’s authority to enter into new Section 8 contracts tied to new construction and substantial rehabilitation, but retained HUD’s authority to issue new contracts for existing properties. The act also created a new demonstration program to test a modified use of Section 9, referred to as vouchers. Vouchers were similar to the use of Section 8 rent subsidies in existing housing, but they provided more flexibility to PHAs, particularly by permitting families to pay more than 30% of their incomes in rent. The demonstration was made permanent in 1985.” (McCarty, Perl, and Jones 2019)
Related Acts:
(P.L. 98-45, July 12, 1983) Department of Housing and Urban Development-Independent Agencies Appropriation Act, 1984
(P.L. 98-479, October 17, 1984) Housing and Community Development Technical Amendments Act of 1984
Tax Reform Act of 1986
“[T]he Low Income Housing Tax Credit (LIHTC) program was created as part of the [1986 Tax Act]. The LIHTC was not initially part of the bill that became the Tax Reform Act (H.R. 3838). However, because portions of H.R. 3838 eliminated the favorable treatment of real estate investment income, Members added the LIHTC program to the bill to ensure that developers would have an incentive to continue to construct low- and moderate-income housing. The LIHTC, intentially or not, was one of the first major programs to give a good deal of control over federal funding for housing to states. Tax credits are allocated to states based on population, and states have discretion in setting priorities as to how the credits will be used. While states much prioritize projects that serve the lowest-income tenants for the longest period of time, they may choose to allocate credits based on criteria such as the tenant populations served (e.g., those with special needs, families with children, or those on public housing waiting lists)…
The LIHTC… provides incentives for the development of affordable rental housing through federal tax credits administered through the Internal Revenue Service… The tax credits are disbursed to state housing finance agencies (HFAs) based on population. HFAs, in turn, award the credits to housing developers that agree to build or rehabilitate housing in which a certain percentage of units will be affordable to low-income households. Housing developers then sell the credits to investors and use the proceeds to help finance the housing developments. The benefit of the tax credits to the purchasing investors is that they reduce the investor’s federal income tax liability annually over a 10-year period.
Because tax credits reduce the amount of private financing required to build or rehabilitate housing, the owners of developments financed through tax credits are able to charge lower rents. To qualify for the tax credits, one of three criteria must be met:
at least 20% of units in a development must be occupied by households with incomes at or below 50% of area median income;
at least 40% of units must be occupied by households with incomes at or below 60% of area median income;
or, more recently, properties have been allowed to adopt an ‘income-averaging’ approach that enables them to serve a mix of higher-income families if they also serve lower-income families, as long as it results in an average of 40% of units being occupied by households with incomes that average 60% or below of area median income (the income-averaging approach was authorized under the Consolidated Appropriations Act of 2018 [P.L. 115-141]).
Rent charged for the rent-restricted units in a development may not exceed 30% of an imputed income limitation– calculated based on area median incomes. Units financed with tax credits must remain affordable for at least 15 years, although states may choose to adopt longer use restrictions. As of 2018, more than 2.3 million units had been placed in service using LIHTCs.” (McCarty, Perl, and Jones 2019)
Stewart B. McKinney Homeless Assistance Act of 1987
Congress passed this Act which “included funding for several grants that states and localities could use to assist people experiencing homelessness. Grants were available for permanent and transitional housing, as well as supportive services, with the idea that localities are in a better position to know how to serve the people living in their communities.
…The grants have gone through several permutations since their enactment, with the most recent change taking place when they were reauthorized in the 111th Congress…” (see below, P.L. 111-22) (McCarty, Perl, and Jones 2019)
1990s
George H. W. Bush
National Affordable Housing Act of 1990 (NAHA)
This Act authorized the HOME Investment Partnerships Program, “a housing block grant program administered by HUD and designed to expand the supply of decent, safe, sanitary, and affordable housing… HOME funding is allocated via formula: 60% of funds are awarded to”participating jurisdictions” (localities that have populations above a certain threshold and qualify for a certain amount of funding under the formula), and 40% are awarded to states. HOME grantees must match 25% of their HOME grants (with some exceptions) and submit a plan to HUD detailing their community housing needs and priorities.
HOME funds can be used for four main purposes: rehabilitation of owner-occupied housing, homebuyer assistance, rental housing construction and rehabilitation, and the provision of tenant-based rental assistance. All HOME funds must be used to benefit low-income families (those with incomes at or below 80% of area median income), and at least 90% of funds used for rental housing activities or tenant-based rental assistance must be used to benefit families with incomes at or below 60% of area median income.
…The Section 811 Supportive Housing for Persons with Disabilities Program was created in 1990 as part of [this Act]… Until the enactment of Section 811, the Section 202 program provided housing for persons with disabilities.
Through Section 811, HUD provides capital grants to nonprofit organizations to create rental housing that is affordable to very low-income households (income at or below 50% of AMI) with an adult who has a disability. The program also funds project rental assistance contract to subsidize the rent paid by tenants. Housing built with capital grants may include group homes, independent living facilities, multifamily rental units, condominium units, and cooperative housing. Section 811 developers must provide supportive services to those residing in the units.
In addition, through FY2010 the Section 811 program created tenant-based rental assistance, sometimes called ‘mainstream vouchers,’ that tenants could use to find housing in the private market, much like Section 8 vouchers. However, since FY2011 (based on a law enacted in 2010 [P.L. 111-374]), Section 811 tenant-based assistance has been funded via the Section 8 account. Also as part of P.L. 111-374, Section 811 rental assistance funds were made available to be used in conjunction with capital funding from other sources (such as LIHTC and HOME funds).
…The Housing Opportunities for Persons with AIDS (HOPWA) program is the only federal program that provides funding specifically for housing for persons with acquired immunodeficiency syndrome (AIDS) and related illnesses. ..HOPWA program funding is distributed both by formula allocation and competitive grants. HUD awards 90% of appropriated funds by formula to states and eligible metropolitan statistical areas (MSAs) that meet thresholds regarding population, AIDS cases, and AIDS incidence. Recipient states and MSAs may allocate grants to nonprofit organizations or administer the funds through government agencies. HOPWA grantees may use funds for a wide range of housing, social services, program planning, and development costs.” (McCarty, Perl, and Jones 2019)
Jack Kemp, HUD secretary under George H. W. Bush, “expanded HUD’s economic development role, created new programs to encourage tenant management and tenant ownership of public housing, and promoted an enterprise zone approach to city and economic development. Kemp divested the secretary position of practically all discretionary authority, leaving only formula block grants and competitive bidding as means of awarding HUD funds. He also initiated a number of programs called HOPE I, II, and III to convert rental and foreclosed housing to homes available for ownership.” (Soifer et al. 2014)
HOPE stands for Homeownership and Opportunity for People Everwhere. “HOPE I helps low-income people buy public housing units by providing funds that nonprofit organizations, resident groups, and other eligible grantees can use to develop and implement homeownership programs. HOPE I is authorized by the National Affordable Housing Act (P.L. 101-625), which added a new Title III to the U.S. Housing Act of 1937.” (HUD, n.d.)
Bill Clinton
Department of Veterans Affairs and Housing and Urban Development, and Independent Agencies Appropriations Act, 1993
“Under the Clinton administration, Kemp’s HOPE program was modified to include HOPE VI. The purpose of HOPE VI was to fund public housing authorities’ demolition of high-rise public housing and to replace it with lower-density, mixed-income, mixed-use projects that were developed by the private sector and large nonprofits. Despite some liberal opposition favoring one-to-one replacement of units as they were demolished, HOPE VI moved forward to eliminate virtually every dense high-rise project in the country. Tenants who were displaced and chose not to come back were given Section 8 vouchers.” (Soifer et al. 2014)
Note: For additional reading, on HOPE VI, see HUD’s overview and a 2004 report from the Urban Institute “A Decade of HOPE VI: Research Findings and Policy Challenges”.
Native American Housing Assistance and Self-Determination Act of 1996 (NAHASDA)
This Act “reorganized the system of federal housing assistance to Native Americans by eliminating several separate programs of assistance and replacing them with a single block grant program. In addition to simplifying the process of providing housing assistance, a purpose of NAHASDA was to provide federal assistance for [Native American] tribes in a manner that recognizes the right of [Native American] self-determination and tribal self-governance.
…The act provides block grants to Indian tribes or their tribally designated housing entities (TDHEs) to use for a wide range of affordable housing activities through the Native American Housing Block Grant (NAHBG) program. The tribe must submit an Indian housing plan (IHP), which is reviewed by HUD for compliance with statutory and regulatory requirements. Funding is provided under a need-based formula, which was developed pursuant to negotiated rulemaking between tribal representatives and HUD. Tribes and TCHEs can leverage funds, within certain limits, by using future grants as collateral to obtain private loans for affordable housing activities under the Title VI Loan Guarantee Program.” (McCarty, Perl, and Jones 2019)
Multifamily Assisted Housing Reform and Accountability Act of 1997 (MAHRA)
This Act was created “to preserve affordable housing. ..Through this effort, HUD restructures the debt of building owners while at the same time renegotiating their rental assistance contracts.” (McCarty, Perl, and Jones 2019)
Quality Housing and Work Responsibility Act of 1998 (QHWRA)
“Throughout the 1990s, concern about the state of public housing grew. The public perceived public housing to be mismanaged, of poor quality, and dangerous. At the same time, interest was growing in reforming social programs by devolving control to the states and increasing the programs’ focus on promoting work and self-sufficiency. Concern over the condition of public housing– and the influence of the 1996 welfare reform debate and legislation– led to proposals for major public and assisted housing reforms. Several years of debate in Congress culminated with the enactment of [QHWRA].
The purposes of QHWRA, as defined in the act, were to deregulate PHAs, provide PHAs with more flexibility in their use of federal assistance, facilitate mixed income communities, decrease concentrations of poverty in public housing, increase accountability and reward effective management of PHAs, create incentives and economic opportunities for residents assisted by PHAs to work and become self-sufficient, consolidate the Section 8 voucher and certificate programs into a single market-driven program, remedy the problems of troubled PHAs, and replace or revitalize severely distressed public housing projects.
Specific reforms in QHWRA included increased income targeting in the voucher program, removal of federal preference categories for housing assistance, enactment of a limited community service requirement in public housing, creation of the Section 8 Housing Choice Voucher program (a hybrid of the Section 8 voucher and certificate programs), authorization of the HOPE VI program, consolidation and reform of funding for public housing, and modifications to the assessment systems of PHAs. QHWRA also featured the so-called “Faircloth Amendment,” which prohibited the use of public housing funding for the development of any net new units of public housing.” (McCarty, Perl, and Jones 2019)
As part of QHWRA, “Congress passed a HUD request… for major reconstruction of public housing, allowing all local public housing authorities the freedom to develop HOPE VI-type mixed-income, mixed-use projects under its general authority and funding.” (Soifer et al. 2014)
“Section 9(g)(3) of the United States Housing Act of 1937 (”Faircloth Amendment”) limits the construction of new public housing units. The Faircloth Amendment states that the Department cannot fund the construction or operation of new public housing units with Capital or Operating Funds if the construction of those units would result in a net increase in the number of units the PHA owned, assisted or operated as of October 1, 1999.” (HUD 2020)
2000s
George W. Bush
Housing and Economic Recovery Act of 2008 (HERA)
This Act created the Housing Trust Fund (HTS), “a block grant administered by HUD that is targeted primarily toward the development of rental housing for the lowest-income households… HTF funds are allocated to states via formula.
HTF funds are to be used primarily for rental housing; however, by statute up to 10% of funds can be used for certain homeownership activities for eligible first-time homebuyers. Furthermore, all HTF funds must benefit households that are at least very low-income, and at least 75% of the funds used for rental housing must benefit extremely low-income households (or households with incomes at or below the poverty line). While the HTS is similar to the HOME program in some ways, it is more explicitly focused on rental housing and has deeper income targeting requirements than HOME.
The HTF is funded through contributions from… Fannie Mae and Freddie Mac rather than through appropriations. Although the HTF was created in 2008, due to concerns about Fannie Mae’s and Freddie Mac’s financial situations, the first contributions were not provided to the HTF until 2016.
…The Capital Magnet Fund (CMF)… is administered by the Department of the Treasury’s Community Development Financial Institutions (CDFI) Fund… The CMF provides competitive grant funds to CDFIs or eligible nonprofit organizations to use to finance affordable housing and certain related community development activities.
CMF funds can be used for either rental housing or homeownership, but they must primarily benefit low-income households. The CMF is meant to leverage other sources of funding, and eligible activities are supposed to leverage at least 10x the CMF award amount from other sources. Eligible forms of assistance that grantees can provide with CMF funds include capitalizing loan loss reserves or revolving loan funds and providing risk-sharing loans or loan guarantees, among other things.
Like the HTF… the CMF is funded through contributions from the government-sponsored enterprises Fannie Mae and Freddie Mac rather than through appropriations. Although the CMF was created in 2008, the first contributions were not transferred to it until 2016 due to concerns about Fannie Mae’s and Freddie Mac’s financial situations.” (McCarty, Perl, and Jones 2019)
Barack Obama
Helping Families Save Their Homes Act of 2009
Part of this Act was the reauthorization of Homeless Assistance Grants, as part of the Homeless Emergency Assistance and Rapid Transition to Housing (HEARTH). “The Homeless Assistance Grants consist of the Emergency Solutions Grants (ESG) program, Continuum of Care (CoC) program, and Rural Housing Stability (RHS) program.
ESG funds are distributed to local communities and states by formula and may be used by grantees in two categories:
emergency shelter and related services and
homelessness prevention and rapid rehousing.
The statute limits use of funds in the first category to the greater of 60% of a state or local government’s ESG allocation or the amount the recipient spent for these purposes in the year prior to the effective dat of the HEARTH Act.
CoC program funds, distributed to nonprofit organizations, public housing agencies, and state and local governments via a competition, may be used for transitional housing, permanent supporting housing, rapid rehousing, supportive services, and Homeless Management Information Systems.
The RHS program has not been implemented, but would allow rural grantees to assist people who are experiencing homelessness in the same ways as the CoC program. The statute would allow RHS funds to be used for homelessness prevention activities, relocation assistance, short-term emergency housing, and home repairs that are necessary to make housing habitable. (McCarty, Perl, and Jones 2019)
2010s
Barack Obama
Consolidated and Further Continuing Appropriations Act of 2012
The Rental Assistance Demonstration “allows PHAs to remove their properties from the public housing program and instead receive a form of Section 8 rental assistance. As the program is currently authorized, HUD is authorized to approve the conversion of nearly half of the remaining public housing stock to Section 8 rent assistance.” (McCarty, Perl, and Jones 2019)
References
Citation
@online{johnson2021,
author = {Johnson, Sarah},
title = {U.S. {Housing} {Acts}},
date = {2021-11-07},
url = {https://sarahjohnson.io/posts/hsg-acts.html},
langid = {en}
}