Abstract: The Federal Housing Administration: Did It Really Favor the Suburbs?

Judge Glock

Abstract

There is a near universal consensus among historians of post-World War II America that the Federal Housing Administration (FHA) was central in shaping the modern American landscape. Its putative anti-urban bias is used to explain both the rise of white, middle-class suburbia and the decline of increasingly impoverished and increasingly black central cities. This paper will show that this claim is based on two fundamental misunderstandings. One is the absence of any comparison of FHA mortgages with the rest of the private housing market. When this comparison is performed, the result is almost the polar opposite to that usually posited. The FHA tended to favor multifamily housing relative to single-family, central city developments relative to suburban, and its loans to white and nonwhite households largely mimicked the rest of the market. Second, a singular focus on the FHA's Section 203 guarantee program for single family homes has ignored the myriad other programs at the FHA, from multifamily rentalhousing to home repair loans, which disproportionally benefited cities and existing neighborhoods and which constituted large portions of all FHA loans. This paper shows that far from creating contemporary suburbia, the FHA struggled vigorously against its rise.