This is the second post in our series examining America’s housing crisis. In our first post, we explored different types of housing assistance and the scale of need for affordable housing in our country. Today, we examine how deliberate policy decisions transformed the United States from a country on track to eliminate homelessness into one where millions face housing insecurity.
America once made a serious commitment to ensuring everyone had access to decent housing. That commitment didn’t fail by accident; it was dismantled through specific policy choices that prioritized different priorities over human housing needs.
Understanding this history is crucial because it reveals that our current housing crisis isn’t inevitable; it was created through choices over decades, and is the predictable result of abandoning policies that were working towards a solution.
The Promise: When America Committed to Housing for All
In 1949, Congress passed the American Housing Act with an ambitious goal: ensuring “a decent home in a suitable living environment for every American family.” This legislation was enacted to address general housing shortages, improve urban conditions, and provide housing for low-income Americans. This wasn’t empty rhetoric; it also echoed the Universal Declaration of Human Rights, signed by the U.S. in 1948, which recognized housing as a fundamental human right. Even in 1948, housing as a human right was widely recognized and agreed upon.
For several decades, this commitment yielded tangible results, beginning with the establishment of the Federal Housing Administration, created by President Franklin Roosevelt in 1934. This organization operated as one of the nation’s most significant housing agencies in the United States, and eventually became part of the Department of Housing and Urban Development. It helped millions of families buy homes through programs that required lower down payments and offered more affordable monthly payments than those in the private market.
Simultaneously, the government invested in rental housing for those who couldn’t access homeownership. In 1965, President Lyndon B. Johnson signed the Department of Housing and Urban Development Act into law, thus establishing the Department of Housing and Urban Development, which created comprehensive support for both home purchases and rental assistance.
The results were measurable. After the Great Depression and through the 1970s, very few people in America were homeless. Those experiencing homelessness were mainly older men living in cheap hotels or flophouses. Many housing experts predicted that even this limited homelessness would be eliminated by the end of the 1970s.
The Turning Point: The 1980s Policy Reversal
In the early 1980s, under the Reagan administration, federal housing funding was slashed by nearly 80%. This wasn’t a budget adjustment; it was a tangible shift to retreat from the principle that the government should ensure housing accessibility, setting into motion this dismantling of earlier policies to ensure that Americans had access to homes.
The timing coincided with other policy changes that reduced the social safety net. Benefits for people living with disabilities were restricted, and eligibility requirements for assistance programs were tightened, meaning hundreds of thousands of people lost income support.
As Western Regional Advocacy Project director Paul Boden observed, “Racism, poverty, and addiction all existed before 1980. What didn’t exist was a homeless shelter.” The mass homelessness we see today didn’t emerge from individual circumstances; it appeared when policy supports were systematically removed.
The Mathematical Reality of Abandonment
The human cost of this policy abandonment becomes clear when examining current housing assistance. Today, 75% of Americans are eligible for federal housing subsidies but cannot access them because the programs are so underfunded. Housing advocates who describe this as “the cruelest musical chairs game: three of every four people lose out.”.
The average family waits two and a half years on subsidized housing waiting lists. A recent survey, Long Waitlists for Housing Vouchers Show Pressing Unmet Need for Assistance of forty-four housing agencies, published by the Center on Budget and Policy Priorities, revealed over 737,000 households waiting for assistance, with some lists closed for more than a decade.
The delays are extreme, and in some cases deadly for those who cannot obtain safe and stable housing. The New York City Housing Authority last opened its waiting list in 2009, and then again by a lottery to apply in 2024. Chicago Alderwoman Jeanette Taylor made national headlines in 2022 after revealing it took twenty-nine years for her to reach the top of a Chicago Housing Authority (CHA) waiting list.
The Systematic Destruction Continues
The 1980s cuts were only the beginning. Since 1996, zero federal dollars have been spent on new public housing construction, despite growing need and an estimated $70 billion maintenance backlog in existing units.
The Faircloth Amendment capped the total number of public housing units, preventing growth even in communities with demonstrated need.
Programs like HOPE VI accelerated the destruction even further. Under this initiative, Atlanta lost 86% of its public housing and Chicago lost 62%. The program demolished far more housing than it created, contributing to a net loss of over 400,000 public housing units since 1996.
Housing researchers trace these failures to, as Quigley states in the book, Lessons From Eviction Court: How We Can End Our Housing Crisis, “under-funding and segregationist logic” that treated public housing as a last resort for the economically disadvantaged residents rather than a community asset serving diverse populations.
The Structural Flaws from the Beginning
Hawaii State Senator Stanley Chang, a supporter of public and social housing, calls the 1937 Housing Act the “original sin” of federal housing policy. While it established government involvement in housing, it forced income restrictions that concentrated poverty and enabled racial segregation.
This flawed foundation made public housing vulnerable to later attacks. When developments were eroded through underfunding and isolated from broader communities, their deteriorating conditions became arguments for further disinvestment.
The cycle became self-reinforcing: underfunding created poor conditions, which generated a negative public perception, which in turn justified further cuts, leading to even worse conditions.
A Crisis by Design
The housing emergency facing millions of Americans today isn’t a natural disaster or economic inevitability. It’s the direct result of policy choices made over four decades.
We went from a country where homelessness was rare and declining to one where working families face impossible choices between rent and other necessities. We transformed from building hundreds of thousands of affordable housing units annually to building very few.
These changes didn’t happen automatically. They required sustained political effort to dismantle programs that were working and abandon commitments that were producing results.
Understanding the Path Forward
Acknowledging this history and understanding the path that led us to where we are today are key for anyone working toward housing solutions. Mysterious market forces or individual choices didn’t cause the housing crisis; it resulted from specific policy decisions.
In our next post, we’ll examine why purely market-based approaches cannot solve the affordability crisis for the lowest-income households, and why housing advocates argue that treating homes as commodities rather than human necessities will always leave millions without adequate shelter.
The story of American housing policy over the past forty years is about choices: whether to prioritize housing as a human right or as a source of private profit. Understanding how we chose the latter helps clarify what’s required to choose differently.
