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Origins of HUD

To examine the issue of why the Department of Housing

and Urban Development was established, one must first recall

the social and political climate of 1965.  At the height of

the Johnson administration's popularity, Congress approved

legislation casting a variety of existing agencies in a new

light.  Chief among those agencies was the Housing and Home

Finance Agency, a New Deal-era agency and HUD precursor

established to direct credit toward the home mortgage mar-

ket.  The Department of Housing and Urban Development was

intended to be a mechanism through which federal grants,

low-interest loans, and individual rent subsidies would be

channeled to subsidize specific building and rebuilding

projects.  What Bernard Frieden and Marshall Kaplan said of

HUD's Model Cities program applies to the agency as a whole:

"Like most Great Society innovations of the late 1960s . . .

[HUD] was both a response to the special conditions of that

turbulent period and the product of a long lineage of prior

federal actions."1

Although HUD had a broad mandate to improve urban life

generally, there was no doubt where its chief focus lay.

"The first challenge," Lyndon Johnson stated, was "to attack

the problem of rebuilding the slums."2  It was the era of

the affluent society, when the U.S. economy was viewed not

only as a powerful but perhaps even as an unstoppable engine

of economic growth--an engine that was allegedly leaving a

few groups behind.  The most prominent group was the blacks

whose emigration from the rural south had peaked after World

War II.  That poor, formerly rural group was living in older

housing vacated by more affluent whites who were moving up

and out to the expanding suburbs.  The racial contrast was

heightened by the 1964 and 1965 summer riots in Watts and

Harlem.  The older urban residential neighborhoods to which

blacks were suddenly moving took on a collective national

name: the inner city.  Its existence was viewed as a rebuke

to American prosperity.  At the same time, the headlong rush

of the middle class to the expanding suburbs was dramatical-

ly diminishing the cities' populations and tax bases.  A

sense of national crisis emerged and was dramatically re-

flected in works such as Cities in a Race with Time.3

It would be HUD's mission not only to respond to what

sociologist Kenneth Clark termed the "dark ghetto"--in other

words, poor, black, urban neighborhoods--but, at the same

time, to "save" cities.  In that context, HUD's mission was