September 9, 2011
On September 9, 1965, the Department of Housing and Urban Development Act was signed into law by President Lyndon B. Johnson, which created the United States Department of Housing and Urban Development.
The Department, commonly known as “HUD,” was part of Johnson’s “Great Society” program that was intended to work towards the elimination of poverty and racial injustice.
As such, HUD operates to provide housing assistance to low-income individuals and families, and bans housing discrimination based on race, sex, national origin, or religion.
Of course, that’s a bit of an oversimplification of HUD’s functions, which have changed and expanded since its initial formation.
The passage of the HUD Act didn’t explicitly increase funding for any housing or rent programs, nor did it expressly create any such programs (that was actually done by the Housing and Urban Development Act of 1965, passed less than a month earlier).
Instead, the Act created HUD, which is itself quite significant.
Until the Act’s passage, there wasn’t a cabinet-level agency that addressed housing and urban development at the federal level, which HUD now does.
Not only did such an agency allow for more centralized coordination over existing program administration and federal funds allocation, but it laid the groundwork for the future expansion of such programs and funds.
In fact, it was only three years later that the Fair Housing Act was enacted as part of the Civil Rights Act of 1968.
Although the earlier Civil Rights Act of 1866 also prohibited housing discrimination based on race, the only available remedy were civil suits, which in some areas or circumstances was no remedy at all.
The Fair Housing Act created provisions that made HUD responsible for hearing complaints of housing discrimination, investigating those complaints, and penalizing violators of the law.
In addition based on race, religion, and national origin, further amendments to the Fair Housing Act have also banned discrimination based on gender (in 1974), and individuals with disabilities and families with children (in 1988).
With HUD currently hearing over 2 million cases of housing discrimination each year, enforcement of federal anti-discrimination laws has become a major function of HUD.
Another major function of HUD, as mentioned earlier, is providing economic housing assistance to low-income individuals and families.
Nevertheless, at least two programs administered by HUD are fairly prominent: Section 8 housing and Federal Housing Administration (FHA).
“Section 8” (short for “Section 8 of the United States Housing Act of 1937”) provides partial or complete financial assistance to low-income families.
Because of the program’s popularity and limited funding, the waiting list to receive such benefits can be very long, often with families waiting three to six years.
The FHA, which became a part of HUD in 1965 at its inception, is mainly engaged in insuring private home mortgages.
The FHA has become especially prominent since the subprime mortgage crisis.
The crisis was followed by a widespread credit crunch, leaving FHA-insured loans one of, if not the only option for many potential home-buyers.
Indeed, the share of home purchases financed with FHA mortgages went from 2% to over 33% because of the crunch.
Undoubtedly, since its creation in 1965, HUD has had, and continues to have a significant impact in America’s housing, and with the housing market still in unrest, the agency will surely have a large role to play in the future.