{"id":181351,"date":"2025-02-28T15:55:52","date_gmt":"2025-02-28T22:55:52","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=181351"},"modified":"2025-02-28T15:56:18","modified_gmt":"2025-02-28T22:56:18","slug":"short-history-of-public-housing-in-america","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/short-history-of-public-housing-in-america","title":{"rendered":"A Short History of Public Housing in the United States"},"content":{"rendered":"\n

Housing affordability (or the lack thereof), as well as public housing, were <\/span>major<\/span> issues in the last presidential election. Vice President Kamala Harris <\/span>planned to build three million new housing units<\/span><\/a> while effectively punishing corporations with large portfolios of single-family homes through various policy proposals. <\/span><\/p>\n\n\n\n

Some activists want to go even further. For example, a group named <\/span>People\u2019s Action<\/span><\/a> wants to \u201c<\/span>decommodify\u201d housing<\/span><\/a>\u2014or, in other words, make all housing in the United States government housing.<\/span><\/p>\n\n\n\n

President Trump, for his part, ran on <\/span>reducing grocery prices<\/span><\/a> or inflation in general. Housing <\/span>isn\u2019t directly measured<\/span> by the Consumer Price Index (CPI), but it still <\/span>factors <\/span>greatly<\/span> in<\/span> the cost of living. In Trump\u2019s first term, he sought to cut the Department of Housing and Urban Development\u2019s (HUD) budget, <\/span>but <\/span>was blocked<\/span> by Congress<\/span><\/a>.<\/span><\/p>\n\n\n\n

It would not be surprising if Trump again tried to cut HUD\u2019s budget despite public housing being long thought of as the third rail in politics. Indeed, it has a long history in the United States and the world over. And while the reasons behind public housing have been <\/span>completely<\/span> understandable, its results have often failed to live up to the promise.<\/span><\/p>\n\n\n\n

Public Housing\u2019s Earliest Beginnings<\/span><\/h2>\n\n\n\n

Examples (or quasi-examples) of public housing\u2014i.e., housing provided by a governing authority to people subject to that government\u2014have existed in one form <\/span>or another<\/span> since the dawn of civilization. That said, what we <\/span>think of as<\/span> the government or state doesn\u2019t exactly translate to ancient or medieval civilizations. <\/span><\/p>\n\n\n\n

Semantics aside, public housing still goes back a long way. For example, <\/span>Deir el-Medina<\/span><\/a> was a village of <\/span>craftsmen<\/span> and artists that built the tombs in the Valley of the Kings between the 18th and 20th Dynasties of the New Kingdom of Egypt (between approximately 1550 and 1080 BCE). <\/span><\/p>\n\n\n\n

In ancient Rome, ordinary Roman citizens often lived in <\/span>a kind of<\/span> apartment building called an <\/span>insula<\/span><\/a>. <\/span>These <\/span>often<\/span> shoddily constructed buildings were<\/span>, unfortunately,<\/span> quite susceptible to fire and, given their proximity to each other, made disasters like the <\/span>Great Fire of Rome<\/span><\/a> more likely to happen.<\/span> The insula was a <\/span>sort of<\/span> pseudo-public housing, as they tended to be owned by wealthy Roman patricians, many of whom were senators who controlled Rome\u2019s government. <\/span><\/p>\n\n\n\n

And, of course, throughout history, there have been slave quarters, which, in a very exploitative way, could be seen as <\/span>an extremely<\/span> unpleasant form of public housing.<\/span><\/p>\n\n\n\n

As we move from ancient times into the Middle Ages, concepts of property\u2014at least in Europe\u2014looked far different than they do today. <\/span>Feudalism<\/span><\/a> amounted to a series of pledges and obligations between lords and their vassals, with the king <\/span>being<\/span> at the top of the ladder. <\/span><\/p>\n\n\n\n

At the bottom were the <\/span>serfs<\/span><\/a>, who worked their lord\u2019s lands for a percentage of their produce. And since they were bound to that land and prohibited from leaving, their housing resembles public housing provided by the government (or the lord, in this case) more so than in a market economy. <\/span><\/p>\n\n\n\n

The Modern History of Public Housing<\/span><\/h2>\n\n\n\n

Gradually, public housing became less of a governing authority (be it a government, plutocrat, slave owner, or feudal lord) providing housing to his subjects, but instead, a way for governments to provide housing at a reduced cost to those who could not easily afford it. <\/span><\/p>\n\n\n\n

One of the first examples of this was the <\/span>Fuggerei<\/span><\/a>. According to the Fugger Foundation, \u201cThe Fuggerei is the oldest existing social housing complex in the world, a city within a city with 67 buildings and 142 residences, as well as a church.\u201d<\/span><\/p>\n\n\n\n

These houses were constructed by Jakob Fugger in 1521 for 150 needy Catholic citizens of Augsburg at a substantially reduced rate. Jakob Fugger was the head of the extremely wealthy Fugger family (some estimated Jakob\u2019s wealth amounted to <\/span>2%<\/span><\/a> of <\/span>all<\/span> <\/em>of Europe\u2019s wealth at the time) and a major supporter of the Habsburgs, who ruled the Holy Roman Empire at the time.<\/span><\/p>\n\n\n\n

Of course, this was during the Reformation, and the Fuggers were trying to lure support away from the Protestant reformers. (Just four years earlier, Martin Luther had posted his famous <\/span>95 Theses<\/span><\/a> to the door of the Wittenberg Castle church.) The previous family to hold the title of being the richest in Europe\u2014the Medicis of Florence, Italy\u2014had instead bestowed their charity not on the working poor but on the arts instead. <\/span><\/p>\n\n\n\n

This<\/span> is particularly true of Lorenzo De Medici, <\/span>who was<\/span> the banker to the Pope, de facto ruler of Florence, and patron to Leonardo da Vinci, Michelangelo, and many others. The <\/span>Italian Renaissance<\/span><\/a>, in no small part, was made possible by the Medicis. (This is also true of <\/span>a variety of<\/span> wars, such as the War of the Roses in Europe, in <\/span>which they financed both sides<\/span><\/a>.)  <\/span><\/p>\n\n\n\n

While the social housing provided by various rules and oligarchs in the early modern era was illustrative of things to come, it still amounted to <\/span>rich<\/span> individuals performing charitable works. Public housing, as we know it today, <\/span>really<\/span> began to take off at the dawn of the Industrial Revolution. <\/span><\/p>\n\n\n\n

The Industrial Revolution, Urban Crowding, and Demands for Public Housing<\/span><\/h2>\n\n\n\n

The Industrial Revolution<\/span><\/a> first<\/span> began in Britain sometime between 1760 and 1780 before migrating to the rest of Europe and then throughout the world. <\/span>A variety of<\/span> factors made this possible, including <\/span>new technologies<\/span><\/a> like the steam engine and spinning ginny, <\/span>the enclosure acts<\/span><\/a> that moved many rural peasants off their land into the cities, and <\/span>large coal deposits<\/span><\/a> near those cities to <\/span>act as fuel for<\/span> Britain\u2019s burgeoning industrialization.<\/span><\/p>\n\n\n\n

However, as the cities grew rapidly, urban blight, disease, overcrowding, and the like went <\/span>right along with it<\/span>. Despite unparalleled growth in history, <\/span>the urban poor<\/span> were doing quite <\/span>badly<\/span>. For example, between 1850 and 1870, the world output of <\/span>coal increased by 250% and iron by 400%<\/span><\/a>, while the <\/span>amount of railroad mileage laid <\/span><\/a>went from 2,808 miles in 1840 to 52,922 in 1870, to its peak of 254,037 in 1916. <\/span><\/p>\n\n\n\n

On the other hand, <\/span>the average height of<\/span> British citizens <\/span>actually<\/span> declined<\/span><\/a> in the first half of the 19th century due to poor nutrition and living conditions.<\/span> Indeed, life expectancy in Britain <\/span>actually<\/span> flatlined and even fell slightly at the beginning of the 19th century before finally starting to rise again in the second half <\/span>of the century<\/span>. <\/span><\/p>\n\n\n

\"Statistic:<\/a>
Find more statistics at Statista<\/a><\/p>\n\n\n\n

Thus, it’s not surprising that there would be a reaction. <\/span>This<\/span> came in moderate forms like the <\/span>Chartist movement<\/span><\/a> in Britain and radical forms like Frederich Engels, who wrote his blistering critique of the early capitalist system, <\/span>The Condition of the Working Class in England<\/span><\/em>, and Karl Marx, who wrote <\/span>The Communist Manifesto<\/span><\/em> in 1848, the same year as <\/span>a continent-wide revolt took place<\/span><\/a>.<\/span><\/p>\n\n\n\n

The response of the British authorities to these challenges was modest. <\/span>This<\/span> mostly<\/span> consisted of shipping off much of its poor and riffraff to the New World and putting in a few regulations on working conditions, including limiting working hours, factory inspectors, and regulations regarding women and children. <\/span><\/p>\n\n\n\n

However, <\/span>virtually nothing was done<\/span> about housing until the <\/span>Housing and Working Classes Act of 1885<\/span><\/a>, which <\/span>put in<\/span> some basic regulations and allowed the authorities to clear slum housing. Other than that (and private charity, of course), the <\/span>main<\/span> government form of public housing was <\/span>the workhouses<\/span><\/a> for orphans, the poor, and the intransigent that <\/span>were so thoroughly pilloried<\/span> by <\/span>the likes of<\/span> Charles Dickens. <\/span><\/p>\n\n\n\n

While the condition of the working class was <\/span>quite<\/span> poor at the time, Marx\u2019s and Engels\u2019 theories never made much sense. By the time the first volume of Karl Marx\u2019s magnum opus, <\/span>Das Kapital<\/span><\/em>, was published in 1867, the condition of the working class had already been improving substantially<\/span>, whereas he<\/span> predicted <\/span>they would become poorer and poorer until the inevitable revolution<\/span><\/a>. The working class was supposed to <\/span>be ground<\/span> into dust, but arguing today that working people are worse off than they were in the early 19th century is beyond ridiculous. <\/span><\/p>\n\n\n\n

Indeed, pretty much all of Marx\u2019s theories failed. He <\/span>predicted the revolution<\/span><\/a> would come in the most advanced capitalist states like Britain, the United States, or Germany. Instead, it happened in pseudo-feudalist states as they were industrializing, like Russia and China.<\/span><\/p>\n\n\n\n

Marx also didn\u2019t publish the second and third volumes of<\/span> Das Kapital<\/span><\/em> during his lifetime (Engels put them together and published them in 1885 and 1894, respectively). <\/span>This<\/span> was probably <\/span>in large part<\/span> because Marx\u2019s theory was that capitalists stole the \u201csurplus value\u201d from laborers. But if that were so, then why did labor-intensive industries not have a higher profit margin than capital-intensive industries? <\/span><\/p>\n\n\n\n

Eugen von B\u00f6hm-Bawerk counted no less than four different and <\/span>rather<\/span> contradictory explanations for this inconsistency (<\/span>Karl Marx and the Close of His System<\/span><\/a>, pg. 32). It seems the one Marx settled on the most is that the capitalists broke down old feudal barriers, which allowed competition to smooth out the difference in profit levels between industries despite labor being exploited more in some industries than others. <\/span>This<\/span>, of course, is unfalsifiable and akin to saying \u201cjust trust me, bro.\u201d<\/span><\/p>\n\n\n\n

And, of course, the whole idea behind <\/span>the labor theory of value is absurd<\/span><\/a> to begin with<\/span>. Marx only includes \u201csocially necessary labor\u201d but doesn\u2019t acknowledge that some labor is more valuable than others, except for noting that a certain amount of unskilled labor adds up to skilled labor. <\/span>This<\/span> is false, as 10 unskilled laborers or even 100 cannot do what one<\/span>, say,<\/span> electrician can.<\/span> <\/span><\/p>\n\n\n\n

Further, Marx implies that anything not mixed with labor is of no value when<\/span>, obviously,<\/span> that is not true. A gold deposit has value, even if it\u2019s just sitting there. <\/span>And <\/span>of<\/span> course, he ignored the skill and effort required in entrepreneurship, business management, etc. <\/span>and<\/span> just<\/span> assumed it to be theft.<\/span><\/p>\n\n\n\n

Still, Marx did inspire the revolutions that took place throughout the early-to-mid-20th century. With them, all housing became effectively universally government housing. <\/span><\/p>\n\n\n\n

And oh boy, did they create some of <\/span>the ugliest, soul-crushing, cookie-cutter block housing<\/span><\/a> the world has ever seen. The Soviet version <\/span>were<\/span> known as <\/span>Khrushchevkas<\/span><\/a>. Here\u2019s one example of such an abomination: <\/span><\/p>\n\n\n\n

\"Khrushchevkas\"<\/figure>\n\n\n\n

Sometimes <\/span>the<\/span> cure is worse than the disease, a theme we will return to shortly.<\/span><\/p>\n\n\n\n

Public Housing in the United States<\/span><\/h2>\n\n\n\n

As noted, what exactly is and isn\u2019t public housing is a bit trickier to define in early periods. <\/span>The company towns<\/span><\/a> that popped up throughout the Midwest in the 19th century were effectively corporate-owned cities with public housing for their workforce (and their <\/span>own<\/span> currency, for that matter, called scrip, to use in company-owned stores). Indeed, we see the same thing to a certain extent with some of the enormous corporate campuses like <\/span>Apple Park<\/span><\/a>.<\/span><\/p>\n\n\n\n

What began the push for public housing was the rapid urbanization brought on by the nation\u2019s growing industrialization and large-scale immigration of the late 19th century. <\/span>Jacob Riis<\/span><\/a> became famous for his book <\/span>How the Other Half Lives<\/span><\/em> and photos of overcrowded, squalid housing. <\/span><\/p>\n\n\n\n

\"Midnight
Midnight in Ludlow St., Jacob Riis – International Center of Photography<\/span><\/a><\/em><\/figcaption><\/figure>\n\n\n\n

While this created the impetus for public housing, the<\/span> policy didn\u2019t follow suit in any notable way until the Great Depression and Franklin Delano Roosevelt\u2019s New Deal. <\/span>The Public Works Administration<\/span><\/a> subsidized a variety of construction projects, including housing. <\/span><\/p>\n\n\n\n

Then came the <\/span>National Housing Act of 1937<\/span><\/a>, which provided subsidies to local public housing agencies. <\/span>This<\/span> was partially inspired<\/span> by Catherine Bauer\u2019s influential <\/span>Modern Housing<\/span><\/em>, which advocated for housing to <\/span>be seen<\/span> as a public utility. The spirit of that economically depressed age moved away from the free market and toward government intervention.<\/span><\/p>\n\n\n\n

After World War II, <\/span>public housing kicked into high gear<\/span><\/a> throughout the Western world<\/span>. In Europe, much of this had to do with rebuilding after the war\u2019s devastation. <\/span>In the United States,<\/span> there was a housing shortage as vets returned from the war, and the <\/span>so-called<\/span> baby boom began.<\/span> <\/span><\/p>\n\n\n\n

Harry Truman passed the <\/span>Housing Act of 1949<\/span><\/a>, <\/span>which is<\/span> when the large and infamous public housing projects began. It also pushed for slum clearing and urban renewal. Not surprisingly, this policy did quite a poor job of it, as they <\/span>ended up destroying<\/span> substantially more housing than they built and <\/span>upended numerous vibrant local communities<\/span><\/a> along the way.<\/span><\/p>\n\n\n\n

It was in this period that<\/span> the United States saw the construction of some of the largest (and most disastrous) public housing projects in history.<\/span> This<\/span> included <\/span>Cabrini-Green Homes<\/span><\/a> in Chicago (housed 15,000 people, constructed between 1942 and 1962, demolished in 2011); the <\/span>Robert Taylor Homes<\/span><\/a> also in Chicago (housed 27,000 people, <\/span>constructed<\/span> in 1961, and demolished in 2007); and <\/span>Pruitt-Igoe<\/span><\/a> in St. Louis (housed 10,000 people, <\/span>constructed<\/span> in 1951, and demolished in 1976). <\/span><\/p>\n\n\n\n

These public housing projects became infamous and <\/span>simply<\/span> referred to as<\/span> \u201cthe projects.\u201d<\/span> As Howard Husock explained in his book <\/span>America\u2019s Trillion-Dollar Housing Mistake<\/span><\/a><\/em>, these housing projects concentrated the poorest people in one place that \u201cradiate dysfunction and social problems outward, damaging local businesses and neighborhood property values. They hurt cities by inhibiting or even preventing these run-down areas from <\/span>coming back<\/span> to life by attracting higher-income homesteaders and new business investment.\u201d <\/span>This<\/span> is not at all what <\/span>was originally intended<\/span>.<\/span><\/p>\n\n\n\n

\u201cPublic housing spawns neighborhood social problems because it concentrates together welfare-dependent, single-parent families, whose fatherless children disproportionately turn out to be school dropouts, drug users, nonworkers, and criminals. These are not, of course, the families that public housing originally aimed to serve. But as the U.S. economy boomed after World War II, the lower-middle-class working families for whom the projects had been built discovered that they could afford privately built homes in America\u2019s burgeoning suburbs, and by the 1960s, they had completely abandoned public housing. Left behind were the poorest, most disorganized nonworking families, almost all of them headed by single women. Public housing then became a key component of the vast welfare-support network that gave young women their own income and apartment if they gave birth to illegitimate kids. As the fatherless children of these women grew up and went astray, many projects became lawless places, with gunfire a nightly occurrence and murder commonplace.\u201d\u00a0<\/span><\/em>(<\/span>America\u2019s Trillion-Dollar Housing Mistake<\/span><\/a><\/em>, pp. 30-31)<\/span><\/p>\n\n\n\n

Cabrini-Green became so dangerous that <\/span>the police refused <\/span>to even enter the building<\/span><\/a>. Residents complained of living in the same type of squalor Jacob Riis described but also in constant fear for their lives. In 1992, <\/span>a 7-year-old boy <\/span>was shot<\/span> and killed<\/span><\/a> next to Cabrini-Green while walking to school. Cabrini-Green became the poster child for dysfunctional public housing and <\/span>was thankfully demolished<\/span> in phases between 1995 and 2011.<\/span><\/p>\n\n\n\n

Since then, public housing has moved toward a more dispersed method of providing subsidies for those with low income that doesn’t concentrate poverty in one place, making it all the harder for those stuck in such situations to get out.<\/span><\/p>\n\n\n\n

In 1974, HUD began the <\/span>Section 8 Housing Choice Voucher Program<\/span><\/a>, which allows voucher holders to have their rent subsidized by the government in privately owned units whose owners accept vouchers. (Although, whether a landlord has the right to accept or reject Section 8 vouchers is being eroded. Today, 17 states, 21 counties, and 85 cities <\/span>ban so-called \u201csource of income discrimination<\/span><\/a>\u201d and require landlords to rent to those on Section 8.)<\/span><\/p>\n\n\n\n

The government also provides tax credits to developers to build <\/span>Section 42<\/span><\/a> or LIHTC (Low Income Housing Tax Credit) properties that require landlords to charge below-market rent to low-income tenants in exchange for tax credits. <\/span><\/p>\n\n\n\n

These programs are far from perfect. Section 8 is <\/span>a cumbersome process<\/span><\/a> with <\/span>all sorts of<\/span> bureaucratic delays and costs. For Section 42 projects, <\/span>the costs of developing them are notably higher than market-rate properties<\/span><\/a>, <\/span>mostly<\/span> because of the \u201csoft costs\u201d (i.e., attorneys, permitting, etc.).<\/span><\/p>\n\n\n\n

Still, these programs <\/span>are a <\/span>great<\/span> improvement<\/span> over the large public housing projects that preceded them. As a study by the <\/span>Federal Reserve Bank of Cleveland notes<\/span><\/a>, \u201c\u2026closing large public housing developments and dispersing former residents throughout a wider portion of the city was associated with net reductions in violent crime, at the city level.\u201d The quality of Section 8 and Section 42 housing is also far superior to that of the old, dilapidated housing projects like Cabrini-Green and Pruitt-Igoe. <\/span><\/p>\n\n\n\n

Final Thoughts<\/span><\/h2>\n\n\n\n

Indeed, the history of public housing has <\/span>clearly<\/span> demonstrated that while the needs are <\/span>real<\/span>, the results are often far from ideal. The market is still the best place to provide at least <\/span>the majority of<\/span> housing. <\/span>And while there is a place for government-subsidized or even government-built housing, policies regarding such housing <\/span>need to <\/span>be enacted<\/span> very<\/span> carefully.<\/span> After all, history is replete with examples of the cure being worse than the disease, and we all know where paths paved with good intentions can lead. <\/span><\/p>\n\n\n\n

Few things offer better examples of that than the history of public housing, particularly in the United States.<\/span><\/p>\n\n\n\n \n

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Housing affordability (or the lack thereof), as well as public housing, were major issues in the last presidential election. Vice President Kamala Harris planned to build three million new housing […]<\/p>\n","protected":false},"author":1689,"featured_media":181345,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[7384],"tags":[],"class_list":["post-181351","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-politics-policy"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/181351","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/1689"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=181351"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/181351\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/181345"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=181351"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=181351"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=181351"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}