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:
National mortgage markets
New standards for debt structuring
I’ve discussed the left’s hatred for suburbia more than once, most recently in my discussion of the offshore oil industry. But this piece shows that their hatred may be misplaced: it should be directed to policies which are part and parcel with Franklin Roosevelt’s New Deal. Without the credit controlling mechanisms and incentives that began with the creation of the FHA, American suburbs would not be what they are (and the housing bubble that crashed the economy in 2008 would not have taken place.)
I strongly urge my readers to go back to the original piece and look at the FHA’s mortgage evaluation list; that explains a great deal of why American suburbs are what they are today.