entremet
Member
Regarding suburban subsidization;
Here's a good article, and from a right leaning publication:
https://www.theamericanconservative.com/urbs/we-have-always-subsidized-suburbia/
What image springs to mind when you picture “federally subsidized housing”? Most people imagine a low-income public housing tower, a homeless shelter, or a shoddy apartment building.
Nope—suburban homeowners are the single biggest recipient of housing subsidies. As a result, suburbs dominate housing in the United States. For decades, federal finance regulations incentivized single-family homes through three key mechanisms:
A New Deal to Restore the Housing Industry
Debt has a negative connotation these days. Credit cards, student loans, and auto loans are the anchors that keep many Americans in debt for most of their lives. Meanwhile, we view mortgages very differently—they are seen as an investment, a symbol of adulthood, and a sign of financial stability.
This was not always the case. In the early 1900s, mortgages were just like any other kind of debt. Nowadays payments are spread out over decades, but back then they came due all at once after a few years. Most people didn’t have enough cash at the end of the term. It was standard to pay back some and negotiate a new loan for whatever they still owed.
This worked fine while the economy was booming, but investors refused to renew the loans after the 1929 stock market crash. Homeowners missed payments and foreclosure rates doubled. The housing industry collapsed, taking the economy down with it.
New Deal policymakers realized that restoring the economy depended on restoring the housing sector. In 1934, they created the Federal Housing Administration (FHA) with two key mandates:
This particular requirement is very important:
FHA rules had implicit and explicit hierarchies of what homeowners ought to want. They had two key purposes: to stimulate the economy, and to constrain the market to only good investments. These goals—plus the social assumptions of the time—were reflected in the FHA’s evaluation of a mortgage. The standards included:
Here's a good article, and from a right leaning publication:
https://www.theamericanconservative.com/urbs/we-have-always-subsidized-suburbia/
What image springs to mind when you picture “federally subsidized housing”? Most people imagine a low-income public housing tower, a homeless shelter, or a shoddy apartment building.
Nope—suburban homeowners are the single biggest recipient of housing subsidies. As a result, suburbs dominate housing in the United States. For decades, federal finance regulations incentivized single-family homes through three key mechanisms:
- Insurance
- National mortgage markets
- New standards for debt structuring
A New Deal to Restore the Housing Industry
Debt has a negative connotation these days. Credit cards, student loans, and auto loans are the anchors that keep many Americans in debt for most of their lives. Meanwhile, we view mortgages very differently—they are seen as an investment, a symbol of adulthood, and a sign of financial stability.
This was not always the case. In the early 1900s, mortgages were just like any other kind of debt. Nowadays payments are spread out over decades, but back then they came due all at once after a few years. Most people didn’t have enough cash at the end of the term. It was standard to pay back some and negotiate a new loan for whatever they still owed.
This worked fine while the economy was booming, but investors refused to renew the loans after the 1929 stock market crash. Homeowners missed payments and foreclosure rates doubled. The housing industry collapsed, taking the economy down with it.
New Deal policymakers realized that restoring the economy depended on restoring the housing sector. In 1934, they created the Federal Housing Administration (FHA) with two key mandates:
- Revive the housing market, and
- Make homeownership attainable for more Americans
This particular requirement is very important:
FHA rules had implicit and explicit hierarchies of what homeowners ought to want. They had two key purposes: to stimulate the economy, and to constrain the market to only good investments. These goals—plus the social assumptions of the time—were reflected in the FHA’s evaluation of a mortgage. The standards included:
- Large, new homes were given a higher score, because they increased demand for labor and materials. Older homes with small spaces didn’t create demand for new furniture. Features like long hallways and steep staircases lowered the rating, because they prevented easy moving of furniture.
- Homogeneity of neighboring housing stock was believed to indicate stable housing prices. To get the max score on the FHA evaluation, the manual preferred that a house be a part of “a sparsely developed new neighborhood … completed over the span of very few years.”
- The ideal house had “sunshine, ventilation, scenic outlook, privacy, and safety,” and “effective landscaping and gardening” added to its worth. The guide recommended that houses should be set back at least 15 feet from the road, and well-tended lawns that matched the neighbors’ yards helped the rating.
- The manual had strict definitions for how streets should be built.
- It prescribed minimum street widths and other specific measurements.
- It recommended a hierarchical network, with a major arterial roads interlaced with smaller streets. The idea was to separate through traffic and enable efficient circulation.
- It saw cul-de-sacs as the most desirable home locations, because they were most isolated from foot and auto traffic coming from outside of the neighborhood.
- The guidelines favored auto- rather than transit-oriented development. The idea was that this would increase demand for cars, which were a growing part of American manufacturing.
- The manual emphasized that suburbs must be arranged to promote strict separation of land uses
- Multi-use districts with “commercial, industrial, or manufacturing enterprise” were seen to threaten residential value. So the FHA simply did not provide insurance for units where the first floor was a shop with residences above for most of the agency’s lifetime.
- Development like what you see in Greenwich Village and other traditional neighborhoods in East Coast cities could not get an FHA loan. (These rules only changed in 2015.)
- “There would be no corner groceries; if there were any stores at all, they would be grouped into a single shopping center,” wrote Tom Hanchett in The Other “Subsidized Housing.”
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