“It is the policy of the United States (1) to promote the general welfare of the Nation by employing the funds and credit of the Nation...(A) to assist States and political subdivisions of States to remedy the unsafe housing conditions and the acute shortage of decent and safe dwellings for low-income families; [and] (B) to assist States and political subdivisions of States to address the shortage of housing affordable to low-income families...”

– Excerpt from the United States Housing Act of 1937

1937: Housing Act (Wagner-Steagall Act)

Established the United States Housing Administration responsible for building publicly subsidized housing.

• The Act required that for each new public housing unit created, a unit of substandard quality must be removed. This one-to-one policy ensured that the federal program would increase the quality of housing, but not the quantity.
• Operational decisions were left to local authorities, ensuring that communities that did not want public housing could avoid it and those that did could determine the project’s location, virtually guaranteeing that housing projects would remain racially segregated.

While the federal government would provide funding, the ownership and operation of the housing would be the responsibility of the local public housing authority, appointed by local elected officials. Leaving operational decisions up to local authorities ensured that communities that did not want it could avoid public housing and those that did could determine the project’s location, virtually guaranteeing that housing projects would remain racially segregated.

The Housing Act of 1937 also set very low maximum income requirements for public housing residents. This policy was intended to alleviate fears that public housing would compete with the private market, but it ultimately led to high concentrations of poverty within public housing projects.