The History of Subsidized Housing


Subsidized Housing in the United States has its roots in the Great Depression of the 1930s, when the country faced an urbanizing population and an economic crisis that produced mass unemployment and crippled the private housing sector. The New Deal ushered in the Federal Housing Administration (FHA) and authorized it to insure private mortgages to help stabilize the housing sector and to stimulate private housing construction. FHA programs have continued to the present day, benefiting millions of American households by making homeownership simpler and more feasible.

The Federal government enacted The Housing Act of 1937 to help meet the housing needs of those who could not attain homeownership. Under this act, the federal government largely funds public housing but local housing authorities, following federal guidelines, build and manage the units. 

The Housing Act of 1949 further provided governance over how federal financial resources could aid in reducing housing costs and raising housing standards. The declared goal of this act was to create “a decent home and a suitable living environment for every American family.”


Congress created the Department of Housing and Urban Development (HUD) in the 1960s, which brought the importance of housing every American family in a decent and suitable living environment to the cabinet level. Also, during this decade Congress passed the Fair Housing act which prohibits discrimination in housing and mortgage lending.

In 1974, the Housing and Community Development Act establishes the Section 8 housing program, now known as the Housing Choice Voucher (HCV) program. The voucher program has continued to win broad support from policy makers who see it as an efficient, effective alternative to public housing.

1980’s to Present Day

In 1986, President Reagan introduced the Low Income Housing Tax Credit, which remains the primary source of federal funding for affordable housing today. In 2012, The Obama administration created the most recent affordable housing program, the Rental Assistance Demonstration program, which authorizes the transformation of public housing into privately owned Section 8 housing.