THE NEW DEAL AND HOUSING

Owning one’s home had long been a widely shared American ambition. “A man is not a whole and complete man,” Walt Whitman had written in the 1850s, “unless he owns a house and the ground it stands on.” For many members of the middle class, home ownership had become a mark of respectability. For workers, it offered economic security at a time of low wages, erratic employment, and limited occupational mobility. On the eve of World War I, a considerably higher percentage of immigrant workers than the native-born middle class owned their homes.

The Depression devastated the American housing industry. The construction of new residences all but ceased, and banks and savings and loan associations that had financed home ownership collapsed or, to remain afloat, foreclosed on many homes (a quarter of a million in 1932 alone). In 1931, President Hoover convened a Conference on Home Building and Home Ownership to review the housing crisis. The president called owning a home an American “birthright,” the embodiment of the spirit of “enterprise, of independence, and of... freedom.” Rented apartments, he pointed out, did not inspire “immortal ballads” like Home, Sweet Home or The Little Gray Home in the West. Papers presented at the conference revealed that millions of Americans lived in overcrowded, unhealthy urban slums or in ramshackle rural dwellings. Private enterprise alone, it seemed clear, was unlikely to solve the nation’s housing crisis.

Hoover’s administration established a federally sponsored bank to issue home loans. Not until the New Deal, however, did the government systematically enter the housing market. Roosevelt spoke of “the security of the home” as a fundamental right akin to “the security of livelihood, and the security of social insurance.” In 1933 and 1934, his administration moved energetically to protect home owners from foreclosure and to stimulate new construction. The Home Owners Loan Corporation and Federal Housing Administration (FHA) insured millions of long-term mortgages issued by private banks. At the same time, the federal government itself built thousands of units of low-rent housing. New Deal housing policy represented a remarkable departure from previous government practice. Thanks to the FHA and, later, the Veterans’ Administration, home ownership came within the reach of tens of millions of families. It became cheaper for most Americans to buy single-family homes than to rent apartments.

Figure 21.1 THE BUILDING BOOM AND ITS COLLAPSE, 1919-1939

As it did in other sectors of the economy, the Great Depression led to a collapse in the construction industry.

Other important measures of Roosevelt’s first two years in office included the ratification of the Twenty-first Amendment to the Constitution, which repealed Prohibition; the establishment of the Federal Communications Commission to oversee the nation’s broadcast airwaves and telephone communications; and the creation of the Securities and Exchange Commission to regulate the stock and bond markets. Taken together, the First New Deal was a series of experiments, some of which succeeded and some of which did not. They transformed the role of the federal government, constructed numerous public facilities, and provided relief to millions of needy persons. But they did not end the Depression. Some io million Americans—more than 20 percent of the workforce—remained unemployed when 1934 came to an end.

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