Public/Private Approaches to Urban Mortgage and Housing Problems

Abstract

A. General Approaches In 1965, the establishment of the Department of Housing and Urban Development gave promise of a new era in urban housing policies and programs. In the preceding three decades or so since the Great Depression, federal intervention in housing and mortgage markets had broadened and deepened-through war and peace, through business expansion and contraction. Now, endowed with cabinet status, federal housing policy-makers were given a voice in the highest councils of government. There could be no doubt of the nation's permanent commitment to housing progress in the setting of an improved urban structure. As Dr. Robert Weaver observed, shortly after his appointment as the first Secretary of HUD: national role in urban problem-solving is large and growing.' In 1966, however, the nation's housing and mortgage markets were in disarray. The output of new housing fell to a postwar low. Sales of existing housing dropped to uncommonly low levels. Residential mortgage credit virtually dried up, with net mortgage extensions down forty per cent on a year-to-year basis by year-end. New federal urban revitalization programs were lagging for lack of adequate financing. The national role in urban problem-solving, while undoubtedly large and growing, was only marginally effective in the face of devastating short-run problems. In 1967, therefore, we have been inundated with proposals to improve the role of government in urban housing and mortgage markets, to make it more effective in short-run as well as long-run urban problem-solving. New federal approaches to long-range urban rebuilding problems, particularly those related to housing for lowincome families, have been urged by legislators, planners, and economists alike. And accompanying the new and renewed public approaches, there have been