The Democratic administration came into office in 1961 on a platform committed to assisting cities with pressing problems of housing and urban renewal. Indicative of this commitment was President John F. Kennedy?s first message to Congress which devoted considerable space to housing problems, particularly those of middle income families and special groups. This message also made public plans to establish at cabinet level a department of urban affairs which would include all housing activities of the federal government; no bill for the proposed department was introduced in Congress.
Government Legislation and Policy.
The 1961 ?omnibus? housing bill contained programs designed to assist three different income groups: those in the lower middle-income group for whom better financing terms would mean the increased possibility of home ownership, those who could not afford ownership but were ineligible for public housing, and those in need of public housing. For the first group, the lower middle-income families, provisions were made for 35-year, 3-per cent downpayment mortgages to be insured by the Federal Housing Administration. For those with lower incomes, provisions were made for rental and cooperative housing which would be financed by 40-year, 1002140f-cost loans, available to cooperatives, to nonprofit or limited dividend corporations, and to public agencies other than public housing authorities. Although these provisions were directed at families with low incomes, the income limits which were finally set for this program made nearly half of the nation?s families eligible. For the third group, approximately 100,000 units of public housing, the remainder of the authorization of the 1949 Act, were made available.
Under the new law, federal loans and insurance continued to cover housing for the aged, college housing, farm housing, and military housing. Also included were nursing homes, trailer parks, condominium, and experimental housing. Home improvement and rehabilitation were encouraged by a new program of 20-year, 6% loans up to $10,000, for one- to four-family houses at least 10 years old.
Benefits to cities also were provided by new programs in the housing act. Aid was made available for the first time for the purchase of land to be kept as permanent open space. Federal grants, not to exceed 20% of purchase price, may be given for the purchase of open land in cities where an approved program of comprehensive planning is under way. The grant may be increased to 30% if the plan includes the entire urbanized area. A total of $75 million was set aside for demonstration programs and for loans to municipalities to improve transportation systems. This was in addition to the existing program of grants for transportation planning. Terms of urban renewal programs were modified to increase contributions to communities with a population of 50,000 or less.
The 1961 Housing Act was only one of the bills which affected housing passed by the Congress during the year. Perhaps an even greater stimulant to construction than the housing bill was the allotment of $1.2 billion to continue the Veterans Administration?s direct lending program for six years. Under this program, loans were made available to veterans living in rural areas or small cities and towns where VA-guaranteed mortgages generally have not been available.
While the 1961 Housing Act tended to focus attention on low-income families, the Home Loan Bank Board acted to ease conventional financing for higher income families. For homes costing between $20,000 and $30,000 financed by federal savings and loan associations, down payments were cut and terms extended. This made these loans competitive with those of the Federal Housing Agency (F.H.A.) on houses over $20,000.
Construction.
During the first half of 1961, the amount of new construction remained at substantially the same level as that in 1960. In the first seven months, 726,000 private nonfarm units were started, only 2% less than in 1960. However, in the latter part of the year, some indications of the predicted upturn in new home construction began to appear.
Although conventional on-site construction continued to provide the largest portion of new single-family housing, an increase was noted in the construction of other types of dwellings. The number of shell houses (basic wood-frame houses completely finished on the outside but unfinished inside), prefabricated houses, and mobile homes increased significantly during the year.
The sale of shell houses boomed. Precise figures were not available, but it was estimated that, in the first six months of the year, ?shell? sales were 38% above those during the first half of 1960. Although sales appeared to be diminishing toward the end of the year, the ?shell? represented an attempt to reach the low-income market, the importance of which was increasingly recognized.
Statistics indicated that prefabricated houses were competing more strongly with conventional, single-family houses, with one out of eight new homes being prefabricated. Mobile homes also gained in importance. Manufacturers offered addon units that changed the standard shape of the home and provided new amenities. In some areas, mobile homes could be financed by conventional real estate mortgages instead of the more costly chattel mortgages.
During the first half of the year, rental housing increased in importance, representing over one quarter of all new, private, nonfarm housing starts. This growth in rental units was largely the result of increased apartment construction. In 1955, units in structures accommodating three or more families accounted for only 6.6% of private residential building. In 1960, this figure rose to 17% and in the first half of 1961 increased to around 22%.
1960 Census.
Although 1960 Census tabulations were not completed, early figures indicated a substantial improvement in housing conditions during the last 10 years. In 1950, 38% of the dwelling units in the United States were dilapidated or lacked some or all plumbing facilities, while in 1960 only 18% of the units fell in this category.
Although a larger per cent of owner-occupied units than renter-occupied units were classified by Census standards as fully equipped and not dilapidated, both showed improvement in quality during the last decade. In 1960, nearly 90% of owner-occupied units were fully equipped and not dilapidated compared with 70% in 1950. Seventy-five per cent of renter-occupied units fell in this category in 1960 compared with 59% in 1950.
The South continued to have the largest share of poor quality housing, but has improved at a rapid rate. This improvement was not simply the result of new construction and conversions. While the total housing inventory in the South increased by one fourth, the number of nondilapidated units with all plumbing facilities increased by 129%.
Although poor housing is popularly conceived of as having an urban locale, Census figures indicated that the bulk of the nation?s poor housing was located in smaller cities, towns, and rural areas. In the 24 largest metropolitan areas (containing one third of the nation?s housing), less than 10% of the housing was dilapidated or lacking in facilities compared with 18% for the nation as a whole. There were, however, significant differences in quality from one area of the country to another.
In addition to counting dwelling units which were ?dilapidated,? the 1960 Census for the first time identified dwelling units which were in the process of deteriorating. This new classification included dwelling units which had ?deficiencies which will require repairs if the units are to continue to provide adequate shelter.? If these units were added to those which were dilapidated or lacked some or all plumbing facilities, over one quarter of the nation?s housing would be included.
Discrimination.
The anticipated executive order barring racial discrimination in federally aided housing was not issued. However, because of the appointment of Dr. Robert C. Weaver, a distinguished Negro, as head of the Housing and Home Finance Agency, the anti-bias cause had a strong voice in the government.
At the state level, anti-bias legislation was presented to 12 state legislatures and was passed by three, New York, Minnesota, and Pennsylvania. (States which passed laws prior to 1961 forbidding discrimination in private-for-sale or rental housing were Colorado, Connecticut, Massachusetts, and Oregon.) Exemptions from the provisions of the new anti-bias laws vary from state to state. In New York, for example, the law applies to multi-family housing except three-family dwellings which are owner-occupied and one- and two-family houses in developments of fewer than 10 units.
Progress was also being made in local situations. In Illinois, a court decision enjoined the community of Deerfield from taking the site of a proposed integrated housing development for ostensible park purposes.
Aged.
Early in 1961, public attention was focused on the aged by the White House Conference on Aging. The conference not only stressed the problem of housing the aged (referred to by one speaker as ?as big a housing problem as the one faced by the veterans just after the war?), but also recommended public housing for the aged and direct loans to co-operatives, nonprofit or limited-dividend corporations, and public agencies for housing for the aged. In his first message to the Congress, President Kennedy called attention to housing needs of the aged when he requested direct loans for the construction of housing for the aged and asked that half of the 100,000 public housing units requested be set aside for the aged. The 1961 Housing Act continued existing programs for the aged and added measures to increase the amount of public housing provided for the aged. The use of public housing for this group was expected to appeal particularly to cities that had previously resisted public housing because of a fear that inhabitants of such housing would be problem families. The growing importance of housing for the aged in the programs of the federal government also was indicated by the creation of the new position of coordinator for the several programs for the aged in the Housing and Home Finance Agency.
As the demand for housing for the aged increased, the interest of private concerns in providing this type of housing expanded. No longer was such housing sponsored only by nonprofit groups or only in warm climates, but luxury housing as well as public housing appeared in many areas of the country.
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